diff --git a/full_contract_txt/2ThemartComInc_19990826_10-12G_EX-10.10_6700288_EX-10.10_Co-Branding Agreement_ Agency Agreement.txt b/full_contract_txt/2ThemartComInc_19990826_10-12G_EX-10.10_6700288_EX-10.10_Co-Branding Agreement_ Agency Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..b8c8c773f790cc04ea439484e850e1d07c396851 --- /dev/null +++ b/full_contract_txt/2ThemartComInc_19990826_10-12G_EX-10.10_6700288_EX-10.10_Co-Branding Agreement_ Agency Agreement.txt @@ -0,0 +1,227 @@ +CO-BRANDING AND ADVERTISING AGREEMENT + +THIS CO-BRANDING AND ADVERTISING AGREEMENT (the "Agreement") is made as of June 21, 1999 (the "Effective Date") by and between I-ESCROW, INC., with its principal place of business at 1730 S. Amphlett Blvd., Suite 233, San Mateo, California 94402 ("i-Escrow"), and 2THEMART.COM, INC. having its principal place of business at 18301 Von Karman Avenue, 7th Floor, Irvine, California 92612 ("2TheMart"). + +1. DEFINITIONS. + +(a) "CONTENT" means all content or information, in any medium, provided by a party to the other party for use in conjunction with the performance of its obligations hereunder, including without limitation any text, music, sound, photographs, video, graphics, data or software. Content provided by 2TheMart is referred to herein as "2TheMart Content" and Content provided by i-Escrow is referred to herein as "i-Escrow Content." + +(b) "CO-BRANDED SITE" means the web-site accessible through Domain Name, for the Services implemented by i-Escrow. The homepage of this web-site will visibly display both 2TheMart Marks and i-Escrow Marks. + +(c) "CUSTOMERS" means all users who access Co-Branded Site. + +(d) "DOMAIN NAME" means www.iescrow.com/2TheMart. + +(e) "ESCROW SERVICES" means services for auction sellers and high bidders whereby an agent holds a buyer's money in trust until the buyer approves the applicable item that was physically delivered, at which time the agent releases the buyer's money to seller, after subtracting the escrow fees. + +(f) "INFORMATION TRANSFER MECHANISM" means the mechanism by which 2TheMart transfers to i-Escrow information to populate the applicable i-Escrow transaction and user registration forms. + +(g) "LAUNCH DATE" means the first date on which the Co-Branded Site is pointed to in all references to i-Escrow from 2TheMart auction site, and the Information Transfer Mechanism is publicly deployed (post-beta). + +(h) "MARKS" means all domain names, trademarks and logos designated by a party for the other party's use in conjunction with such other party's performance under this Agreement. Marks designated by 2TheMart for i-Escrow's use are referred to herein as "2TheMart Marks" and Marks designated by i-Escrow for 2TheMart' use are referred to herein as "i-Escrow Marks." + +(i) "SERVICES" means i-Escrow's implementation and performance of the Escrow Services as of the Effective Date, as modified over time. + +(j) "SHADOW SITE" means the site where Co-Branded Site is made available for 2TheMart's testing of the Information Transfer Mechanism prior to being made publicly available. + +(k) "TRANSACTION" means a transaction utilizing the Services that actually closes and that was initiated by a Transaction Inquiry from a Customer. + +(l) "TRANSACTION INQUIRY" means a Customer's submission of i-Escrow's standard New Transaction Inquiry form (or its successor) on or through the Co-Branded Pages. Currently this means entry of a description and price of merchandise by a user (buyer or seller) who agrees to abide by the terms and conditions of the Services, together with email address of the other party, regardless of whether or not any Transaction is completed. + +Source: 2THEMART COM INC, 10-12G, 8/26/1999 + + + + + +2. DEVELOPMENT AND IMPLEMENTATION. + +2.1 OVERVIEW. As set forth herein, 2TheMart will promote Services to its auction users (buyers and sellers), and i-Escrow shall develop Co-Branded Site, and develop the Information Transfer Mechanism working with 2TheMart to make Services available seamlessly to Customers. Unless otherwise specified, each party shall be responsible for all development, hosting and other costs associated with the pages resident on their servers and all emails to users they send. + +2.2 INITIAL INFORMATION TRANSFER MECHANISM DEVELOPMENT. The parties shall negotiate in good faith to determine the initial operation of the Information Transfer Mechanism and to describe such operation and development fees, in a statement of work ("SOW"). Each party shall make available sufficient and qualified engineers to negotiate the SOW. No SOW shall be binding on the parties unless mutually approved by both parties. In the event that the parties are unable to agree to an SOW within 2 months following the Effective Date, either party may, in its sole discretion, terminate this Agreement by providing written notice. + +Once approved, the parties shall use commercially reasonable efforts to diligently implement their respective obligations under the SOW. Upon completion of its duties under the SOW, a party shall notify the other party and provide the other party with the opportunity to test and evaluate its work. i-Escrow shall make available the Shadow Site for such testing in a timely manner. Each party shall reasonably cooperate with the other party in effectuating their respective duties under the SOW. The Information Transfer Mechanism shall not go live until its operation has been approved ("Approval Date") by both parties, such approval not to be unreasonably withheld. + +2.3 LAUNCH TIMING. Each party shall use good faith and reasonable efforts to expeditiously develop the Co-Branded Pages and the Information Transfer Mechanism. In the event that, after using such efforts, the Launch Date has not occurred within 4 months following the Effective Date, either party may terminate this Agreement by providing written notice. If + +only one party has used good faith and reasonable development efforts, only that party may exercise the foregoing right to terminate. + +2.4 RESTRICTIONS ON COMMUNICATIONS. i-Escrow may place banner advertising on the Co-Branded Site upon prior written approval of 2TheMart, which shall be at the discretion of 2TheMart. All advertising revenue arising from the banner ads shall be solely i-Escrow's. i-Escrow shall not run banner advertisements on the Co-Branded Site for any of 2TheMart's competitors. 2TheMart shall provide in writing, a list of companies they would like to exclude, including every time they wish to change this list. + +2.5 SERVICE PERFORMANCE OF INFORMATION TRANSFER MECHANISM. The parties each shall in good faith work to provide reasonable service levels with respect to the operation of the portions of the Information Transfer Mechanism in their control. + +Source: 2THEMART COM INC, 10-12G, 8/26/1999 + + + + + +2.6 PROGRAM REVIEW MEETINGS. The parties shall meet, at least once per month either in person, or by telephone, to coordinate the implementation of this agreement over time. + +3. PROMOTION. + +After Launch Date, 2TheMart will widely promote the Services: + +(a) To every seller and high bidder through means including, but not limited to, end of auction emails containing links, such that, it shall be possible for the buyer or seller to initiate a Transaction Inquiry with i-Escrow, without having to re-enter all their personal or transaction related information. + +(b) By adding links to Co-Branded Site in FAQ section of 2TheMart auctions. + +(c) By adding links to Co-Branded Site on the seller listing pages of 2TheMart auctions. + +(d) By displaying a text or graphic link to a page containing information about Services on all auction item pages and bidding pages to educate bidders about i-Escrow. 2TheMart may use the "Escrow Services Description" attached in Exhibit A for creating such a page. + +5. PAYMENT. + +5.1 ADVERTISING FEES. After the Launch Date, i-Escrow shall pay 2TheMart advertising fees based on the number of Transaction Inquiries. This advertising fees shall consist of a per Transaction Inquiry amount calculated by multiplying 0.025% by the amount of the average Transaction from all Customers in the preceding quarter. The formula for arriving at the per Transaction Inquiry amount may be revised from time to time during the term of this Agreement to reflect present market conditions ("the Adjusted Rate"), but only by mutual + +consent of the parties after good faith discussions. The Adjusted Rate shall be added as an addendum to this Agreement. + +5.2 REPORTING. Within two (2) weeks following the end of each calendar quarter, i-Escrow shall provide to 2TheMart a report, describing for each quarter: the number of new registrations through the Co-Branded Pages; the number of Transaction Inquiries from Customers; the total number of Transactions from such inquiries; the total dollar value of the Transactions. + +5.3 AUDIT RIGHTS. i-Escrow shall keep for one (1) year proper records and books of account relating to the computation of advertising payments owed to 2TheMart (including, as appropriate, the computation of the size of average Transaction). Once every twelve (12) months, 2TheMart through a CPA may inspect and audit such records to verify reports. Any such inspection will be conducted in a manner that does not unreasonably interfere with i-Escrow's business activities and with no less than fifteen (15) days notice. i-Escrow shall within two (2) weeks make any overdue payments disclosed by the audit. Such inspection shall be at 2TheMart's expense; however, if the audit reveals overdue payments in excess of ten percent (10%) of the payments owed to date, i-Escrow shall immediately pay all cost of such audit. + +6. RIGHTS AND STANDARDS. + +Source: 2THEMART COM INC, 10-12G, 8/26/1999 + + + + + +6.1 CONTENT. 2TheMart hereby grants to i-Escrow a worldwide, non-exclusive right to use, reproduce, distribute, publicly perform, publicly display and digitally perform the 2TheMart Content soley with respect to and in conjunction with the Co-Branded Site all with the prior written consent of 2TheMart, for the term of this Agreement. i-Escrow hereby grants to 2TheMart a worldwide, non-exclusive right to use, reproduce, distribute, publicly perform, publicly display and digitally perform the i-Escrow Content on or in conjunction with 2TheMart auctions. + +6.2 CONTENT OWNERSHIP. Except as otherwise provided in this Agreement, as between 2TheMart and i-Escrow: (a) 2TheMart and its suppliers retain all rights, title and interest in and to all intellectual property rights embodied in or associated with the 2TheMart Content, and b) i-Escrow and its suppliers retain all rights, title and interest in and to all intellectual property rights embodied in or associated with the i-Escrow Content and Co-Branded Site. There are no implied licenses under this Agreement, and any rights not expressly granted are reserved. Neither party shall exceed the scope of the rights granted hereunder. + +6.3 TRADEMARKS. Subject to the terms and conditions of this Agreement: (a) i-Escrow hereby grants to 2TheMart a non-exclusive, nontransferable right to use the i-Escrow Marks (including without limitation the Domain Name) in links to and advertisements and promotions for the Co-Branded Pages or the Services; and (b) 2TheMart hereby grants to i-Escrow a non-exclusive, nontransferable right to use 2TheMart Marks (including without limitation the Domain Name) on the Co-Branded Pages, and for the performance of Services. + +6.4 TRADEMARK RESTRICTIONS. The Mark owner may terminate the foregoing rights if, in its reasonable discretion, the other party's use of the Marks tarnishes, blurs or dilutes the quality associated with the Marks or the associated goodwill and such problem is not cured within ten (10) days of notice of breach; alternatively, instead of terminating the right in total, the + +owner may specify that certain pages of the other party's web-site may not contain the Marks. Title to and ownership of the owner's Marks shall remain with the owner. The receiving party shall use the Marks exactly in the form provided and in conformance with any trademark usage policies. The other party shall not take any action inconsistent with the owner's ownership of the Marks, and any benefits accruing from use of such Marks shall automatically vest in the owner. The other party shall not form any combination marks with the other party's Marks. Notwithstanding the foregoing, to the extent that the Domain Name is deemed a combination mark, neither party shall use the Domain Name for any purpose except as expressly provided herein or attempt to register the Domain Name, and the parties will jointly cooperate on any enforcement action of infringement of the Domain Name. + +6.5 LIMITS ON SUBLICENSING. All rights (under any applicable intellectual property right) granted herein are not sublicenseable, + +Source: 2THEMART COM INC, 10-12G, 8/26/1999 + + + + + +transferable or assignable. Notwithstanding the foregoing, either party may use a third party web host, but all actions or failures to act of the web host that would be a breach of this Agreement, were the actions or failures to act taken by the applicable party, shall be deemed a breach of this Agreement. In addition, 2TheMart may grant sublicenses to companies that 2TheMart has a business relationship with to the extent that 2TheMart Content is visible from such company's web-site through a link or other means. + +6.6 CONTENT STANDARDS. 2TheMart shall not provide any 2TheMart Content, and i-Escrow shall not provide any i-Escrow Content, that: (a) infringes any third party's copyright, patent, trademark, trade secret or other proprietary rights or rights of publicity or privacy; (b) violates any law, statute, ordinance or regulation (including without limitation the laws and regulations governing export control, unfair competition, antidiscrimination or false advertising); (c) is defamatory, trade libelous, unlawfully threatening or unlawfully harassing; (d) is obscene, harmful to minors or child pornographic; (e) contains any viruses, Trojan horses, worms, time bombs, cancelbots or other computer programming routines that are intended to damage, detrimentally interfere with, surreptitiously intercept or expropriate any system, data or personal information; and (f) is materially false, misleading or inaccurate. + +6.7 SERVICE STANDARDS. i-Escrow will comply with all laws and regulations and act as an Independent Escrow Agent as per the guidelines of California Escrow Law (California Financial Code Section17000 et seq., or its successor). Should any of the terms, conditions or provisions of this Agreement conflict with the California Escrow Law, its rules or regulations, which govern i-Escrow's business practices, the California Escrow Law shall prevail. Notwithstanding the foregoing, at any time that i-Escrow reasonably believes such a conflict exists, i-Escrow will give 2TheMart written notice of such conflict and the parties will use their best efforts to resolve such conflict. + +7. DISCLAIMER OF WARRANTIES. EACH PARTY PROVIDES ALL MATERIALS AND SERVICES TO THE OTHER PARTY "AS IS." EACH PARTY DISCLAIMS ALL WARRANTIES AND CONDITIONS, EXPRESS, IMPLIED OR STATUTORY, INCLUDING WITHOUT LIMITATION THE IMPLIED WARRANTIES OF TITLE, NON- + +INFRINGEMENT, MERCHANTABILITY ANDFITNESS FOR A PARTICULAR PURPOSE. Each party acknowledges that it has not entered into this Agreement in reliance upon any warranty or representation except those specifically set forth herein. + +8. TERM AND TERMINATION. + +8.1 TERM. The term of this Agreement shall continue for one (1) year following the Launch Date, unless earlier terminated as provided herein. This Agreement may be renewed for any number of successive one (1) year terms by mutual written agreement of the parties prior to the conclusion of the term of this Agreement. A party wishing to renew this Agreement shall give the other party notice thereof no less than thirty (30) days before the expiration of the term then in effect. In the event that either party does not give such notice, the term of this Agreement shall be automatically renewed for another one (1) year. + +Source: 2THEMART COM INC, 10-12G, 8/26/1999 + + + + + +8.2 TERMINATION FOR BREACH. In addition to other remedies that may be available to it, by providing written notice, a party may immediately terminate this Agreement: (a) if the other party materially breaches this Agreement and fails to cure that breach within sixty (60) days after receiving written notice of the breach, or (b) as provided in Sections 2.2 [INITIAL INFORMATION TRANSFER MECHANISM DEVELOPMENT], 2.4 [RESTRICTIONS ON COMMUNICATIONS], or 12.4. + +8.3 TERMINATION FOR CHANGE IN COMPANY STRUCTURE. If a majority of the equity securities of either 2TheMart or i-Escrow, Inc. (except that i-Escrow may sell all or a majority of its equity securities or voting interests to i-Escrow.com, and i-Escrow.com may sell all or a majority of its equity securities or voting interests to i-Escrow's existing shareholders, without triggering the foregoing) are acquired by another company during the term of this Agreement either company may terminate this Agreement, without liability, by giving a thirty (30) days written notice to the other party. + +8.4 TERMINATION FOR BANKRUPTCY. Either party may terminate or suspend this Agreement effective immediately and without liability upon written notice to the other party if any one of the following events occurs: + +(a) the other party files a voluntary petition in bankruptcy or otherwise seeks protection under any law for the protection of debtors; + +(b) a proceeding is instituted against the other party under any provision of any bankruptcy laws which is not dismissed within ninety (90) days; + +(c) the other party is adjudged bankrupt; + +(d) a court assumes jurisdiction of all or a substantial portion of the assets of the other party under a reorganization law; + +(e) a trustee or receiver is appointed by a court for all or a substantial portion of the assets of the other party; + +(f) the other party becomes insolvent, ceases or suspends all or substantially all of its business; or + +(g) the other party makes an assignment of the majority of its assets for the benefit of its creditors. + +8.5 EFFECTS OF TERMINATION. Upon expiration or termination of this Agreement for any reason: (a) all rights granted herein shall terminate, (b) i-Escrow shall pay all amounts owed to 2TheMart within six (6) weeks of termination, and (c) each party shall remove the other party's content and Marks from their servers. Notwithstanding the foregoing, unless this Agreement was terminated for a material breach, all provisions of this Agreement shall survive to the extent necessary for i-Escrow to complete any Customer transactions which are pending at the time of expiration or termination. Sections 1, 7, 8.5 [EFFECTS OF TERMINATION], 9, 10, 11 and 12 shall survive expiration or termination of this Agreement. + +9. INDEMNITY. Each party (the "Indemnifying Party") shall indemnify the other party (the "Indemnified Party") against any and all claims, losses, costs and expenses, including reasonable attorneys' fees, which the Indemnified Party may incur as a result of claims in any form by third parties arising from the Indemnifying Party's acts, omissions or misrepresentations to the extent that the Indemnified Party is deemed a principal of the Indemnifying Party. In addition, 2TheMart shall indemnify i-Escrow against any and all claims, losses, costs and expenses, including reasonable attorneys' fees, which i-Escrow may incur as a result of claims in any form by third parties arising from 2TheMart Content. In addition, i-Escrow shall indemnify 2TheMart against any and all claims, losses, costs and expenses, including reasonable attorneys' fees, which 2TheMart may incur as a result of claims in any form by third parties arising from i-Escrow + +Source: 2THEMART COM INC, 10-12G, 8/26/1999 + + + + + +Content and or the Services provided to Customers. The foregoing obligations are conditioned on the Indemnified Party: (i) giving the Indemnifying Party notice of the relevant claim, (ii) cooperating with the Indemnifying Party, at the Indemnifying Party's expense, in the defense of such claim, and (iii) giving the Indemnifying Party the right to control the defense and settlement of any such claim, except that the Indemnifying Party shall not enter into any settlement that affects the Indemnified Party's rights or interest without the Indemnified Party's prior written approval. The Indemnified Party shall have the right to participate in the defense at its expense. + +10. LIMITATION ON LIABILITY. EXCEPT IN THE EVENT OF A BREACH OF SECTION 11, NEITHER PARTY SHALL BE LIABLE FOR SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES OR LOST PROFITS (HOWEVER ARISING, INCLUDING NEGLIGENCE) ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT, EVEN IF THE PARTIES ARE AWARE OF THE POSSIBILITY OF SUCH DAMAGES. + +11. CONFIDENTIAL INFORMATION. A party's "Confidential Information" is defined as any confidential or proprietary information of a party which is disclosed to the other party in a writing marked confidential or, if disclosed orally, is identified as confidential at the time of disclosure and is subsequently reduced to a writing marked confidential and delivered to the + +other party within ten (10) days of disclosure. Each party shall hold the other party's Confidential Information in confidence and shall not disclose such Confidential Information to third parties nor use the other party's Confidential Information for any purpose other than as required to perform under this Agreement. Such restrictions shall not apply to Confidential Information which (a) is already known by the recipient, (b) becomes, through no act or fault of the recipient, publicly known, (c) is received by recipient from a third party without a restriction on disclosure or use, or (d) is independently developed by recipient without reference to the Confidential Information. The restriction on disclosure shall not apply to Confidential Information which is required to be disclosed by a court or government agency. Upon expiration or termination of this Agreement, within fourteen (14) days of the other party's request, each party will return all Confidential Information and other deliverables to the requesting party. + +12. GENERAL PROVISIONS. + +12.1 GOVERNING LAW. This Agreement will be governed and construed in accordance with the laws of the State of California without giving effect to conflict of laws principles. Both parties submit to personal jurisdiction in California and further agree that any cause of action arising under this Agreement shall be brought in a court in Orange County, California. + +12.2 SEVERABILITY; HEADINGS. If any provision herein is held to be invalid or unenforceable for any reason, the remaining provisions will continue in full force without being impaired or invalidated in any way. The parties agree to replace any invalid provision with a valid provision that most closely approximates the intent and economic effect of the invalid provision. Headings are for reference purposes only and in no way define, limit, construe or describe the scope or extent of such section. + +12.3 PUBLICITY. Prior to the release of any press releases or other similar promotional materials related to this Agreement, the releasing party shall submit a written request for approval to the other party with a copy of the materials to be released, which + +Source: 2THEMART COM INC, 10-12G, 8/26/1999 + + + + + +request shall be made no less than three (3) business days prior to the requested release date. A party shall not unreasonably withhold or delay the granting of its approval of such materials, and such approval shall be provided to the other party within one (1) business day of receipt + +12.4 FORCE MAJEURE. Except as otherwise provided, if performance hereunder (other than payment) is prevented, restricted or interfered with by any act or condition whatsoever beyond the reasonable control of a party (a "force majeure event"), the party so affected, upon giving prompt notice to the other party, shall be excused from such performance to the extent of such prevention, restriction or interference. However, if a force majeure event interferes with the operation of this Agreement for sixty (60) days or more, either party can terminate this Agreement, without penalty. Notwithstanding the foregoing, the occurrence of any force majeure event shall not limit either party's obligations under Section 9 with respect to any third party claim as to which the other party seeks indemnification. + +12.5 INDEPENDENT CONTRACTORS. The parties are independent contractors, and no agency, partnership, joint venture, employee- employer or franchisor-franchisee relationship is + +intended or created by this Agreement. Neither party shall make any warranties or representations on behalf of the other party. + +12.6 NOTICE. Any notices hereunder shall be given to the appropriate party at the address specified below or at such other address as the party shall specify in writing. Notice shall be deemed given: upon personal delivery; if sent by fax, upon confirmation of receipt; or if sent by a reputable overnight courier with tracking capabilities, one (1) day after the date of mailing: To i-Escrow: i-Escrow, Inc. 1730 South Amphlett Blvd., #215 San Mateo, CA 94402 Fax no. (650) 638-7890 Attention: President + +With copy to: Fred M. Greguras, Esq. Legal Counsel of i-Escrow Fenwick & West LLP Two Palo Alto Square Palo Alto, CA 94306 + +To 2TheMart: Dominic J. Magliarditi President 18301 Von Karman Avenue, 7th Floor Irvine, CA 92612 Fax no. (949) 477-1221 + +11.7 COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which shall be taken together and deemed to be one instrument. + +12.8 GOOD FAITH. The parties agree to act in good faith with respect to each provision of this Agreement and any dispute that may arise related hereto. + +12.9 ADDITIONAL DOCUMENTS/INFORMATION. The parties agree to sign and/or provide such additional documents and/or information as may reasonably be required to carry out the intent of this Agreement and to effectuate its purposes. + +12.10 RIGHTS AND REMEDIES CUMULATIVE. The rights and remedies provided herein will be cumulative and not exclusive of any other rights or remedies provided by law or otherwise. + +12.11 NONWAIVER. No failure or forbearance by either party to exercise any right or insist upon or enforce performance of any obligation hereunder shall be deemed a waiver or relinquishment to any extent of that or any other right or obligation, in that or any other instance; rather, the + +Source: 2THEMART COM INC, 10-12G, 8/26/1999 + + + + + +same shall be and shall remain in full force and effect. Any waiver of any right of a party or any obligation of the other party hereunder must be made in a writing signed by the arty waiving such right or obligation. + +12.12 ENTIRE AGREEMENT. This Agreement contains the entire understanding of the parties hereto with respect to the transactions and matters contemplated hereby, supersedes all previous Agreements between i-Escrow and 2TheMart concerning the subject matter (except for the Confidential Agreement Dated January 4 1999, which shall survive this Agreement). No amendments or supplements to this Agreement will be effective for any purpose except by a written Agreement signed by the parties. No party hereto has relied on any statement, representation or promise of any party or with any other officer, agent, employee or attorney for the other party in executing this Agreement except as expressly stated herein. + +2THEMART.COM, INC.: I-ESCROW, INC.: + +By:/s/Dominic J. Magliarditi By:/s/Sanjay Bajaj Name: Dominic J. Magliarditi Name: Sanjay Bajaj Title: President Title: VP Business Development Date: 6/21/99 Date: 6/11/99 + + EXHIBIT A + +ESCROW SERVICES DESCRIPTION + +Successful completion of a transaction involves exchange of merchandise with payment. The buyer has to be satisfied he/she received what they thought they were getting and the seller has to be sure he/she gets paid. i-Escrow holds payment from the buyer in trust until the seller sends the merchandise to the buyer. Once the buyer accepts the merchandise, i-Escrow forwards the payment to the seller by writing a check. A typical escrow transaction: When an auction ends, your end of auction email contains links to i-Escrow. Once you have signed up with i-Escrow you go through the following steps to complete your transaction. 1. Start a transaction by entering the description and price of the merchandise along with email address of the other party. 2. The other party receives an email from i-Escrow requesting an acknowledgement of the terms of the transaction. 3. Once the transaction is acknowledged by the other party, the buyer pays i-Escrow the agreed upon price, by credit card or other means. 4. i-Escrow informs the seller that payment has been received, requesting them to ship the merchandise directly to the buyer. 5. The seller provides i-Escrow with the tracking number of the shipment. 6. The buyer receives and accepts the merchandise. 7. i-Escrow sends the check to the seller. + +For more information about I-Escrow, visit their web-site at www.iescrow.com + +Source: 2THEMART COM INC, 10-12G, 8/26/1999 \ No newline at end of file diff --git a/full_contract_txt/ABILITYINC_06_15_2020-EX-4.25-SERVICES AGREEMENT.txt b/full_contract_txt/ABILITYINC_06_15_2020-EX-4.25-SERVICES AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..6078257eadbb7ae2797faf22136f3890167a8a0e --- /dev/null +++ b/full_contract_txt/ABILITYINC_06_15_2020-EX-4.25-SERVICES AGREEMENT.txt @@ -0,0 +1,79 @@ +EXHIBIT 4.25 INFORMATION IN THIS EXHIBIT IDENTIFIED BY [ * * * ] IS CONFIDENTIAL AND HAS BEEN EXCLUDED BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM TO THE REGISTRANT IF PUBLICLY DISCLOSED. SERVICES AGREEMENT This Services Agreement (this "Agreement") is entered into on October 1, 2019 and is made effective as of November 1, 2019 (the "Effective Date"), by and between [ * * * ] (the "Provider"), and TELCOSTAR PTE, LTD., a company organized and existing under the laws of Singapore and Ability Computer & Software Industries Ltd, a company organized and existing under the laws of the State of Israel (each and both of them "Recipient"). Each of the foregoing parties is referred to herein as a "Party" and together as the "Parties". RECITALS A. Recipient wishes to engage the Provider to provide certain services and resources (the "Services") and Provider desires to provide Recipient with the Services all in accordance with the terms and conditions set forth herein. AGREEMENT The Parties hereby agree as follows: 1. Services. 1.1 Provision of Services. (a) Provider agrees to provide the Services set forth on the Exhibit A attached hereto (as such Exhibit may be amended or supplemented pursuant to the terms of this Agreement, the "Exhibit") to Recipient for the respective periods and on the other terms and conditions set forth in this Agreement and in the Exhibit. Notwithstanding the contents of the Exhibit, Provider agrees to respond in good faith to any reasonable request by Recipient for access to any additional services and resources that are necessary for the operation of the Recipient and which are not currently contemplated in the Exhibit, at a price to be agreed upon after good faith negotiations between the Parties. Any such additional services and resources so provided by Provider shall constitute Services under this Agreement and be subject in all respect to the provisions of this Agreement as if fully set forth on the Exhibit as of the date hereof. (b) Recipient may freely assign its rights under this Agreement to receive the Services to any of its affiliates. 1.2 Standard of Service. (a) Provider represents, warrants and agrees that the Services shall be provided in good faith, in accordance with applicable law and in a manner generally consistent with the historical provision of the Services and with the same standard of care as historically provided. (b) Provider shall maintain complete and accurate records relating to the provision of the Services under this Agreement, in such form as Recipient shall approve. + + + + + +(c) Provider shall use its best efforts to provide for employees or contractors to perform the Services, each of whose names, positions, and respective levels of experience and relevant licenses shall be set out in Exhibit A attached hereto (collectively, the "Provider Representatives"). Provider may not make any change in the Provider Representatives without the prior consent of the Recipient. Provider Representatives shall be dedicated to solely providing the Services to Recipient and shall not provide any such services or resources to Provider or any other customer of Provider. (d) Recipient acknowledges that this Agreement does not create a fiduciary relationship, partnership, joint venture or relationships of trust or agency between the Parties and that all Services are provided by Provider as an independent contractor. (e) Notwithstanding anything to the contrary in this Section 1.2: (a) in the event that Provider uses any subcontractors to perform any Services, Provider is not released from responsibility for its obligations under this Agreement; (b) Provider shall remain fully responsible, financially and otherwise, for the Services provided by each subcontractor to the same extent as if Provider had performed the Services itself (subject to the limitations set forth in this Agreement) and agrees to pay the fees and expenses of any such subcontractor; (c) Provider shall remain ultimately responsible for ensuring that the Services are provided and any such subcontractor performs any such obligations in accordance with the terms of this Agreement, and (d) the obligations with respect to the nature, quality and standards of care set forth in Section 1.2 are satisfied with respect to any Service provided by any subcontractor. (f) Provider shall at all times during the term of this Agreement maintain, or cause to be maintained, the computer software and computer hardware that is used in connection with the Services with substantially the same degree of care, skill and diligence with which Provider maintains, or causes to be maintained, as of the Effective Date, such computer software and computer hardware for itself, consistent with past practices, as of the Effective Date, including without limitation, with respect to type, quality and timeliness of such maintenance. 1.3 Additional Services. Nothing in this Agreement shall be construed to prevent the Recipient from itself performing or from acquiring services from other providers that are similar to or identical to the Services. 1.4 Intellectual Property. (a) Recipient shall own, and Provider hereby irrevocably assigns to the Recipient, all rights, title, and interest in any invention, technique, process, device, discovery, improvement, or know-how, whether patentable or not and all other proprietary rights, industrial rights and any other similar rights, in each case on a worldwide basis, and all copies and tangible embodiments thereof, or any part thereof, in whatever form or medium hereafter made or conceived solely or jointly by Provider while working for or on behalf of the Recipient, which relate to, is suggested by, or results from the Services. (b) At Recipient's request, Provider shall disclose any such invention, technique, process, device, discovery, improvement, or know-how promptly to Recipient. Provider shall, upon request of Recipient, promptly execute a specific assignment of title to Recipient, and do anything else reasonably necessary to enable Recipient to secure for itself, patent, trade secret, or any other proprietary rights. + +2 + + + + + +(c) All writings or works of authorship, including, without limitation, program codes or documentation, produced or authored by Provider in the course of performing services for the Recipient, together with any associated copyrights, are works made for hire and the exclusive property of the Recipient. To the extent that any writings or works of authorship may not, by operation of law, be works made for hire, this Agreement shall constitute an irrevocable assignment by Provider to the Recipient of the ownership of and all rights of copyright in, such items, and the Recipient shall have the right to obtain and hold in its own name, rights of copyright, copyright registrations, and similar protections which may be available in the works. Provider shall give the Recipient or its designees all assistance reasonably required to perfect such rights. 2. Compensation. 2.1 Responsibility for Wages and Fees. For such time as any employees of Provider are providing the Services to Recipient under this Agreement, (a) such employees will remain employees of Provider and shall not be deemed to be employees of Recipient for any purpose, and (b) Provider shall be solely responsible for the payment and provision of all wages, bonuses and commissions, employee benefits, including severance and worker's compensation, and the withholding and payment of applicable taxes relating to such employment. 2.2 Terms of Payment and Related Matters. (a) As consideration for provision of the Services following the Effective Date, Recipient shall pay Provider an amount equal to Provider's actual cost of providing the Services plus a 10% service fee. In addition to such amount, in the event that Provider incurs reasonable and documented out-of-pocket expenses in the provision of any Service, including, without limitation, license fees and payments to third-party service providers or subcontractors (such included expenses, collectively, "Out-of-Pocket Costs"), Recipient shall reimburse Provider for all such Out-of-Pocket Costs. (b) (i) Provider shall provide Recipient with monthly invoices ("Invoices"), which shall set forth in reasonable detail, with such supporting documentation as Recipient may reasonably request with respect to Out-of-Pocket Costs, amounts payable under this Agreement, and (ii) payments pursuant to this Agreement shall be made within fifteen (15) days after the date of receipt of an Invoice by Recipient from Provider. (c) Provider shall allow the Recipient to use [ * * * ] at no cost, until December 31, 2021. 2.3 Invoice Disputes. In the event of an Invoice dispute, Recipient shall deliver a written statement to Provider prior to the date payment is due on the disputed Invoice listing all disputed items and providing a reasonably detailed description of each disputed item. Amounts not so disputed shall be deemed accepted and shall be paid, notwithstanding disputes on other items. The Parties shall seek to resolve all such disputes expeditiously and in good faith. Provider shall continue performing the Services in accordance with this Agreement pending resolution of any dispute. + +3 + + + + + +2.4 No Right of Setoff. Each of the Parties hereby acknowledges that it shall have no right under this Agreement to offset any amounts owed (or to become due and owing) to the other Party, whether under this Agreement, the Purchase Agreement or otherwise, against any other amount owed (or to become due and owing) to it by the other Party. 3. Termination. 3.1 Termination of Agreement. This Agreement be deemed effective as of the Effective Date, Agreement and shall terminate on December 31, 2020, unless terminated earlier in accordance with Section 3.2. 3.2 Each of the Recipient and the Provider may, in their sole discretion, terminate this Agreement in whole or in part, at any time without cause, and without liability except, in the case of the Recipient, for required payment for services rendered and reimbursement for authorized expenses incurred, by providing at least 90 (ninety) days' prior written notice to the other party (such date, the "Services Termination Date"). 3.3 Breach. Any Party (the "Non-Breaching Party") may terminate this Agreement with respect to any Service, in whole but not in part, at any time upon prior written notice to the other Party (the "Breaching Party"), if the Breaching Party has failed (other than pursuant to Section 3.6) to perform any of its material obligations under this Agreement relating to such Service, and such failure shall have continued without cure for a period of 30 days after receipt by the Breaching Party of a written notice of such failure from the Non-Breaching Party seeking to terminate such service. For the avoidance of doubt, non-payment by Recipient for a Service provided by Provider in accordance with this Agreement and not the subject of a good-faith dispute shall be deemed a breach for purposes of this Section 3.3. 3.4 Insolvency. In the event that either Party hereto shall (a) file a petition in bankruptcy, (b) become or be declared insolvent, or become the subject of any proceedings (not dismissed within sixty (60) days) related to its liquidation, insolvency or the appointment of a receiver, (c) make an assignment on behalf of all or substantially all of its creditors, or (d) take any corporate action for its winding up or dissolution, then the other party shall have the right to terminate this Agreement by providing written notice in accordance with Section 6.6. 3.5 Effect of Termination. Upon termination of this Agreement in its entirety pursuant to Section 3.1, all obligations of the Parties hereto shall terminate, except for the provisions of Section 2.2, and the entirety of Sections 4, 5 and 6, which shall survive any termination or expiration of this Agreement. 3.6 Upon expiration or termination of this Agreement for any reason, Provider shall promptly: (a) Deliver to Recipient all documents, work product, and other materials, whether or not complete, prepared by or on behalf of Provider in the course of performing the Services for which Recipient has paid. (b) Return to Recipient all Recipient -owned property, equipment, or materials in its possession or control. + +4 + + + + + +(c) Remove any Provider-owned property, equipment, or materials located at Recipient's locations. (d) Deliver to Recipient, all documents and tangible materials (and any copies) containing, reflecting, incorporating, or based on Recipient's Confidential Information. (e) On a pro rata basis, repay all fees and expenses paid in advance for any Services which have not been provided. (f) Permanently erase all of Recipient's Confidential Information from its computer systems. (g) Certify in writing to Recipient that it has complied with the requirements of this Section 3.6 3.7 Force Majeure. If Provider is prevented from or delayed in complying, either totally or in part, with any of the terms or provisions of this Agreement by reason of fire, flood, storm, strike, lockout or other labor trouble or shortage, delays by unaffiliated suppliers or carriers, shortages of fuel, power, raw materials or components, any law, order, proclamation, regulation, ordinance, demand, seizure or requirement of any governmental authority, riot, civil commotion, war, rebellion, acts of terrorism, nuclear accident or other causes beyond the reasonable control of Provider, or acts, omissions, or delays in acting by any governmental or military authority or Recipient (each, a "Force Majeure"), then upon written notice to Recipient, the Services affected by the Force Majeure (the "Affected Services") and/or other requirements of this Agreement will be suspended during the period of such Force Majeure and Provider will have no liability to Recipient or any other party in connection with such Affected Services. If the Force Majeure in question prevails for a continuous period in excess of three months after the date on which the Force Majeure begins, Provider shall be entitled to give notice to Recipient to terminate the Affected Services. The notice to terminate must specify the termination date, which must be not less than ten (10) days after the date on which the notice to terminate is given. Once a notice to terminate has been validly given, the Affected Services will terminate on the termination date set out in the notice. Neither Party shall have any liability to the other in respect of termination of the Affected Services due to Force Majeure, but rights and liabilities which have accrued prior to termination shall subsist. + +5 + + + + + +4. Confidentiality. 4.1 Confidentiality. During the term of this Agreement and thereafter, the Parties hereto shall, and shall instruct their respective representatives to, maintain in confidence and not disclose the other Party's financial, technical, sales, marketing, development, personnel, and other information, records, or data, including, without limitation, customer lists, supplier lists, trade secrets, designs, product formulations, product specifications or any other proprietary or confidential information, however recorded or preserved, whether written or oral (any such information, "Confidential Information"). Each Party hereto shall use the same degree of care, but no less than reasonable care, to protect the other Party's Confidential Information as it uses to protect its own Confidential Information of like nature. Unless otherwise authorized in any other agreement between the Parties, any Party receiving any Confidential Information of the other Party (the "Receiving Party") may use Confidential Information only for the purposes of fulfilling its obligations under this Agreement (the "Permitted Purpose"). Any Receiving Party may disclose such Confidential Information only to its representatives who have a need to know such information for the Permitted Purpose and who have been advised of the terms of this Section 4.1 and the Receiving Party shall be liable for any breach of these confidentiality provisions by such Persons; provided, however, that any Receiving Party may disclose such Confidential Information to the extent such Confidential Information is required to be disclosed by law, in which case the Receiving Party shall promptly notify, to the extent possible, the disclosing party (the "Disclosing Party"), and take reasonable steps to assist in contesting such disclosure requirement or in protecting the Disclosing Party's rights prior to disclosure, and in which case the Receiving Party shall only disclose such Confidential Information that it is advised by its counsel in writing that it is legally bound to disclose. Notwithstanding the foregoing, "Confidential Information" shall not include any information that the Receiving Party can demonstrate: (a) was publicly known at the time of disclosure to it, or has become publicly known through no act of the Receiving Party or its representatives in breach of this Section 4.1, (b) was rightfully received from a third party without a duty of confidentiality, or (c) was developed by it independently without any reliance on the Confidential Information. 4.2 Return of Confidential Information. Upon demand by the Disclosing Party at any time, or upon expiration or termination of this Agreement with respect to any Service, the Receiving Party agrees promptly to return or destroy, at the Disclosing Party's option, all Confidential Information received in connection with this Agreement. If such Confidential Information is destroyed, an authorized officer of the Receiving Party shall certify to such destruction in writing. 5. Indemnification. 5.1 Indemnification. Provider shall indemnify, defend, and hold harmless Recipient and its officers, directors, employees, agents, affiliates, successors, and permitted assigns (collectively, "Indemnified Party") against any and all losses, damages, liabilities, deficiencies, claims, actions, judgments, settlements, interest, awards, penalties, fines, costs, or expenses of whatever kind, including attorneys' fees, fees and the costs of enforcing any right to indemnification under this Agreement, and the cost of pursuing any insurance providers, incurred by Indemnified Party or awarded against Indemnified Party (collectively, "Losses"), relating to/arising out of or resulting from any claim of a third party or Recipient arising out of or occurring in connection with Provider's negligence, willful misconduct, or breach of this Agreement. Provider shall not enter into any settlement without Recipient's or Indemnified Party's prior written consent. 6. Miscellaneous. 6.1 Entire Agreement. This Agreement, the Purchase Agreement and the documents referred to herein and therein constitute the entire agreement among the Parties and supersedes any prior understandings, agreements, or representations by or among the Parties, written or oral, to the extent they relate in any way to the subject matter hereof. + +6 + + + + + +6.2 Succession and Assignment. This Agreement shall be binding upon and inure to the benefit of the Parties named herein and their respective successors and permitted assigns. Provider may not assign, delegate or otherwise transfer either this Agreement or any of its rights, interests, or obligations hereunder without the prior written approval of Recipient. 6.3 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together will constitute one and the same instrument. Counterparts may be delivered via facsimile and electronic mail (including portable document format (PDF) or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com). 6.4 Titles and Headings. Titles and section headings contained in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement. 7. Notices. All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been given (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by facsimile or e-mail of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next Business Day if sent after normal business hours of the recipient or (d) on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications must be sent to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 7: If to Provider: [ * * * ] With a copy to: N/A If to Recipient: TELCOSTAR PTE. LTD 6 Eu Tong Sen Street Tel Aviv, Israel, 6770007 #10-15 The Central Singapore 059817 Email: avi@ability.co.il Attention: Avi Levin With a copy to: McDermott Will & Emery LLP 340 Madison Avenue New York, NY 10173-1922 Telephone: (212) 547-5541 Facsimile: (212) 547-5444 EMAIL: GEMMANUEL@MWE.COM Attention: Gary Emmanuel + +7 + + + + + +Any Party may change the address to which notices, requests, demands, claims, and other communications hereunder are to be delivered by giving the other Parties notice in the manner herein set forth. 7.1 Further Assurances. The Parties agree (a) to furnish upon request to each other such further information, (b) to execute and deliver to each other such other documents, and (c) to do such other acts and things, all as the other party may reasonably request for the purpose of carrying out the intent of this Agreement and the documents referred to in this Agreement. 7.2 Governing Law. This Agreement and any claim, controversy or dispute arising out of or related to this Agreement, any of the transactions contemplated hereby and/or the interpretation and enforcement of the rights and duties of the Parties, whether arising in contract, tort, equity or otherwise, shall be governed by and construed in accordance with the domestic laws of the State of Israel (including in respect of the statute of limitations or other limitations period applicable to any such claim, controversy or dispute), without giving effect to any choice or conflict of law provision or rule (whether of the State of Israel or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Israel. 7.3 Consent to Jurisdiction. The Parties hereby irrevocably submit any disputes under this Agreement to the exclusive jurisdiction of the courts located in Tel-Aviv, Israel, provided however, that Recipient shall be entitled to seek an injunction or other appropriate remedy against Provider in the country in which Provider has acted in breach of the terms hereof. 7.4 Specific Performance. The Parties hereby agree that, in the event of breach of this Agreement, damages would be difficult, if not impossible, to ascertain and that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. Accordingly, it is hereby agreed that the Parties shall be entitled to seek an injunction or other equitable relief in any court of competent jurisdiction to enjoin any such breach and enforce specifically the terms and provisions hereof, this being in addition to any other remedy or right to which they are entitled at law or in equity, without any necessity of proving damages or any requirement for the posting of a bond or other security. 7.5 Amendments and Waivers. No amendment of any provision of this Agreement shall be valid unless the same shall be in writing and signed by Recipient and the Provider. No waiver by any Party of any provision of this Agreement or any default, misrepresentation, or breach of warranty or covenant hereunder, whether intentional or not, shall be valid unless the same shall be in writing and signed by the Party making such waiver nor shall such waiver be deemed to extend to any prior or subsequent default, misrepresentation, or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence. + +8 + + + + + +7.6 Severability. Any term or provision of this Agreement that is held invalid or unenforceable by a court of competent jurisdiction or other competent governmental authority in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction. Upon such a determination, the Parties shall negotiate in good faith to replace invalid or unenforceable provisions with valid provisions, the economic effect of which comes as close as possible to that of the invalid or unenforceable provisions. 7.7 Construction. The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement. Any reference to any law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise. The word "including" shall mean including without limitation. 7.8 Incorporation of Exhibits and Disclosure Schedule. The Exhibit identified in this Agreement is incorporated herein by reference and made a part hereof. 7.9 Amendment and Restatement. This Agreement amends and restates in full the Production Contract. [SIGNATURE PAGE FOLLOWS] + +9 + + + + + +IN WITNESS WHEREOF, the Parties have executed this Services Agreement as of the date first written above. PROVIDER: RECIPIENT: [ * * * ] [ * * * ] By: By: Name: Name: Title: Title: + +10 + + + + + +EXHIBIT A Services [ * * * ] 11 \ No newline at end of file diff --git a/full_contract_txt/ACCELERATEDTECHNOLOGIESHOLDINGCORP_04_24_2003-EX-10.13-JOINT VENTURE AGREEMENT.txt b/full_contract_txt/ACCELERATEDTECHNOLOGIESHOLDINGCORP_04_24_2003-EX-10.13-JOINT VENTURE AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..56e249e6c42f0661c0525a9b2aa4ca764a0423b4 --- /dev/null +++ b/full_contract_txt/ACCELERATEDTECHNOLOGIESHOLDINGCORP_04_24_2003-EX-10.13-JOINT VENTURE AGREEMENT.txt @@ -0,0 +1,87 @@ +EXHIBIT 10.13 + + JOINT VENTURE AGREEMENT + +Collectible Concepts Group, Inc. ("CCGI") and Pivotal Self Service Tech, Inc. ("PVSS"), (the "Parties" or "Joint Venturers" if referred to collectively, or the "Party" or Joint Venturer" if referred to singularly), by this Agreement associate themselves as business associates, and not as partners, in the formation of a joint venture (the "Joint Venture"), for the purpose of engaging generally in the business provided for by terms and provisions of this Agreement. + +1. Name of the Joint Venture. The name of the Joint Venture will be MightyCell Batteries, and may sometimes be referred to as "MightyCell" or the "Joint Venture" in this Agreement. The principal office and place of business shall be located in 1600 Lower State Road, Doylestown, PA 18901. + +2. Scope of the Joint Venture Business. The Joint Venture is formed for the purpose of engaging generally in the business of marketing batteries and related products, (the "Products") that include the display of licensed logos, images, brand names and other labels that differentiate them from the branding (the "PVSS Products") under which PVSS and/or its affiliates, sell to retailers and distributors in the normal course of their business. Without in any way limiting the generality of the foregoing, the business of the Joint Venture shall include: + + (a) The purchase of Products for resale; (b) The acquisition of a license(s) permitting the use of selected images in the Products; (c) The sale and distribution of the Products to retailers and distributors; and, (d) The transaction of such other and further business as is necessary, advisable, or incidental to the business of the Joint Venture. (e) Develop a global marketing program for licensed Products + + Exhibit A attached hereto, describes by way of example but not limitation the responsibilities of the Joint Venturers + +3. Capital Contributions. Except as agreed upon by mutual consent, the Joint Venturers shall not be required to make any capital contribution to the Joint Venture. + +4. Offices of the Joint Venture. The principal place of business of the Joint Venture shall be at 1600 Lower State Road, in the City of Doylestown, Bucks County, Pennsylvania, but may maintain such other offices as the Joint Venturers may deem advisable at any other place or places within or without the Commonwealth of Pennsylvania. + +5. Powers and Authority of the Joint Venturers. The Joint Venturers shall have full and complete charge of all affairs of the Joint Venture. The Joint Venturers recognize that both of the Joint Venturers are and will continue to be engaged in the conduct of their respective businesses for their own account. Neither Joint Venturer shall be entitled to compensation for services rendered to the Joint Venture as such, but each Joint Venturer shall be reimbursed for all direct expenses, including travel, office, and all other out-of-pocket expenses incurred in the operation of the affairs of the Joint Venture and the promotion of its businesses. + + It is agreed that either Joint Venturer shall, except as provided for below, have authority to execute instruments of any character relating to the affairs of the Joint Venture; provided, that without the written consent or approval of both of the Joint Venturers: (i) the Joint Venture shall incur no liability of any sort, nor any indebtedness for borrowed funds; (ii) no assets owned in the name of the Joint Venture be disposed of; and (iii) no commitment to purchase any item for the Joint Venture shall be made. + + 39 + +6. Division of Income and Losses. All income and credits, and all losses and deductions shall be owned and shared among the Joint Venturers as follows: + + 50% to Collectible Concepts Group, Inc. + + 50% to Pivotal Self Service Tech, Inc. + + Depreciation and all other charges and expenses, which are not expressly apportioned by this Agreement, shall be apportioned in accordance with generally accepted accounting principles, consistently applied. + +7. Accounting Provisions. The Joint Venturers shall maintain adequate books and records to be kept of all the Joint Venture activities and affairs conducted pursuant to the terms of this Agreement. All direct costs and expenses, which shall include any insurance costs in connection with the distribution of the Products or operations of the Joint Venture, or if the business of the Joint Venture requires additional office facilities than those now presently maintained by each Joint Venturer, such item shall be + + + + + + paid by the Joint Venture. The fiscal year of the Joint Venture shall be the calendar year, and shall use the cash basis of accounting. If requested by a Joint Venturer, the Joint Venture books and records shall be audited as of the close of each year by an independent accountant acceptable to both Joint Venturers. All books and records of every kind and character, of the Joint Venture, and other information, shall be kept at the principal office of the Joint Venture, or at such other place or places as may be agreed upon by the Joint Venturers, and shall be fully available to each Joint Venturer or his duly authorized representative, all at reasonable times. The books of the Joint Venture shall represent the complete record and report of business operations, including a balance sheet and income and expense statements reflecting all receipts and disbursements of the Joint Venture, and such reports shall be submitted to the Joint Venturers on a regular basis. + +8. Term of Joint Venture. The Joint Venture shall commence on the 1st of March, 2003, and shall be effective until February 28, 2004 unless extended by written agreement of the Joint Venturers not less than thirty (30) days prior to scheduled termination. + +9. Distributions. During the term of the Joint Venture, no interest shall be allowed to any Joint Venturer upon the amount of his contribution. No Joint Venturer shall withdraw, transfer or have paid to him in any manner any part of his capital contribution or account, or any other funds or property of the Joint Venture without the consent of both Joint Venturers; provided, however, there may be distributed to the Joint Venturers, from time to time, so much of the gross income of the Joint Venture as shall not be needed to defray the necessary and expected costs and expenses of the Joint Venture business. Distributions may only be made if after any distribution is made, the Joint Venture assets are in excess of all liabilities of the Joint Venture. Each distribution shall be made ratably to the Joint Venturers according to their prorata interest in the Joint Venture as shown in Section 6. + +10. Internal Revenue Code Election. The Joint Venturers agree and declare that this association for the carrying on of a joint venture business operation does not, and is not intended to create a partnership, for either legal or United States income tax purposes, each Party recognizing that the other is willing and able to contribute capital, labor, and services for the operation of a successful joint venture business. Further, each Party elects under the authority of Section 761(a) of the Internal Revenue Code of 1986 (the "Code"), as amended and all successor statutes, to be excluded from the application of all of the provisions of Subchapter K of Chapter 1 of the Subtitle A of the Code, and the Parties agree that the election out of Subchapter K of Chapter 1 of Subtitle A of the Code shall, if necessary, be manifested by their execution and filing of all appropriate documentation. The Parties also declare that they are not making any agreement to undertake any business other than that set forth in this Agreement; and nothing in this Agreement is to be construed as a limitation of the powers or rights of either Party to carry on his separate business for his sole benefit; provided, however, the Parties shall cooperate with each other according to the terms and spirit of this Agreement in the performance of their joint venture business operation. + +11. Procedure on Termination and Liquidation. On any termination of the Joint Venture, its debt shall be paid or provided for in a manner satisfactory to the Joint Venturers. Then, any unexpended portion of Joint Venture funds shall be distributed to the Joint Venturers in accordance with their prorata ownership in the Joint Venture and all other assets of the Joint Venture shall be distributed as undivided interests to the Joint Venturers ratably according to their prorata interests in the Joint Venture as set forth in Section 6. If any asset is not capable of being distributed on an undivided basis, the Parties shall agree on a price for such asset and it shall be distributed to one Party and a corresponding balance, in cash or property, shall be made of the Joint Venture assets so that each Party receives his proportionate share of all the Joint Venture assets. + +12. Sale or Purchase of Interest of Joint Venturer Prohibited. No Joint Venturer shall be authorized or empowered to mortgage, hypothecate, pledge, sell, or transfer, an interest in the Joint Venture, nor confer on any successor or assignee the right to become a Joint Venturer without the consent of the other Joint Venturer. + +13. Notice. Any notice which a Joint Venturer shall have occasion to give to the other Joint Venturer shall be deemed sufficient notice for all purposes as to its contents if given in writing, hand delivered, by fax, or prepaid mail, to the address of such Joint Venturer as set out below his signature. + +14. Construction. The Joint Venturers declare that in entering into this Agreement, they have contracted with reference to the laws of the Commonwealth of Pennsylvania, and the construction and interpretation of the terms and provisions of this Agreement shall be interpreted and construed under the laws of the Commonwealth of Pennsylvania, except in such cases and to such extent as the laws of another jurisdiction shall necessarily control. + +15. Benefit. This Agreement shall be binding on the Joint Venturers and their respective heirs, successors, executors, administrators, and assigns. + +16. Counterparts. This Agreement may be signed in counterparts and shall be deemed one original instrument. + + + + + +For Collectible Concepts Group, Inc. + +By: ____________________________________ + +Its: ____________________________________ + +Date: ___________________________________ + +For Pivotal Self Service Tech, Inc. By: ___________________________________ + +Its: ____________________________________ Date: __________________________________ + +EXHIBIT A + + GENERAL RESPONSIBILITIES OF THE PARTIES + +Collectible Concepts Group will: + + 1) Obtain any licenses deemed by the Joint Venturers to add value in the marketing of the Products 2) Prepare any artwork necessary for the reproduction of licensed or branded images for the purpose of manufacturing the Products and / or packaging 3) In concert with PVSS, appoint appropriate sales agents and / or representatives and distributors to sell the Products into specific retail channels 4) Prepare marketing materials for sales agents', representatives' and distributors' use in presentations to prospective clients 5) Engage in any support activities required to promote and sell the Products 6) Provide fulfillment services through affiliates for final distribution of the Products + +Pivotal Self Service Tech, Inc. will: + + 1) Provide the Products in accordance with the specifications and quantities and time frames designated by CCGI 2) Provision any additional Products deemed by the Joint Venturers to be salable through the channels established by CCGI 3) Negotiate such favorable pricing and terms with the suppliers of the Products so as to assure the viability of the Joint Venture offerings and the continuity of Product availability to the customers of the Joint Venture 4) Provide alternate fulfillment and distribution services of the Products as backup to those provided by CCGI + + 40 \ No newline at end of file diff --git a/full_contract_txt/ACCURAYINC_09_01_2010-EX-10.31-DISTRIBUTOR AGREEMENT.txt b/full_contract_txt/ACCURAYINC_09_01_2010-EX-10.31-DISTRIBUTOR AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..3c2c1e8b7bf8543d40d9c7bbbd602a053f43a6d5 --- /dev/null +++ b/full_contract_txt/ACCURAYINC_09_01_2010-EX-10.31-DISTRIBUTOR AGREEMENT.txt @@ -0,0 +1,271 @@ +Exhibit 10.31 PURSUANT TO 17 C.F.R. § 240.24B-2, CONFIDENTIAL INFORMATION (INDICATED BY {*****}) HAS BEEN OMITTED FROM THIS DOCUMENT AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT APPLICATION FILED WITH THE COMMISSION ACCURAY INCORPORATED MULTIPLE LINAC AND MULTI-MODALITY DISTRIBUTOR AGREEMENT This Multiple LINAC and Multi-Modality Distributor Agreement ("Agreement") is entered into by and between ACCURAY INCORPORATED, a Delaware corporation with its executive offices located at 1310 Chesapeake Terrace, Sunnyvale, California 94089, USA ("Accuray"), and SIEMENS AKTIENGESELLSCHAFT, a corporation formed under the laws of the Federal Republic of Germany, with its registered offices located at Berlin and Munich ("Siemens"), as of June 8, 2010 ("Effective Date"). RECITALS Accuray manufactures and sells full-body radiosurgery systems using image-guided robotics, including the CyberKnife® Robotic Radiosurgery System, which is FDA cleared in the United States to provide treatment planning and image-guided stereotactic radiosurgery and precision radiotherapy for lesions, tumors and conditions anywhere in the body where radiation treatment is indicated. In order to achieve its business objectives, Accuray relies on qualified distributors to market and distribute its products and services. Accuray and Siemens have entered into that certain Strategic Alliance Agreement, dated as of the date hereof (the "Strategic Alliance Agreement"), and such agreement provides that Accuray and Siemens shall enter into a distribution agreement for Multiple LINAC and Multi- Modality Purchases (as defined below). Accuray wishes to appoint Distributor (as defined below) as a non-exclusive, worldwide distributor for the Products and Services to Customer in connection with Multiple LINAC or Multi-Modality Purchases (as defined below), subject to the terms and conditions of this Agreement, and Distributor wishes to accept such appointment. NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants set forth below, the parties hereto hereby agree as follows: 1. DEFINITIONS. Capitalized terms used, but not defined herein, shall have the meaning provided in the Strategic Alliance Agreement. The following terms, as used herein, have the following meaning: 1.1. "Accuray Regions" means Accuray's sales regions (as of the Effective Date) of the Americas (North America and South America), APAC (Asia Pacific, including Australia and other than India and Japan), EIMEA (Europe, India, Middle East, and Africa), and Japan. 1.2. "Customer" means any person or business entity with whom Distributor enters into an agreement for Products or Services in connection with a Multiple LINAC or Multi-Modality Purchase pursuant to this Agreement. 1.3. "Distributor" means Siemens, its Affiliates, or any Third Party which has been granted distribution rights whose scope includes the Products and/or Services by Siemens. 1.4. "Multiple LINAC or Multi-Modality Purchase" means a Multiple LINAC Purchase or a Multi-Modality Purchase. + + + + + + 1.5. "Multi-Modality Purchase" means the purchase, on a single purchase order, of at least one Distributor imaging product (e.g., CT, MR, PET-CT) and at least one System. 1.6. "Multiple LINAC Purchase" means the purchase, on a single purchase order, of at least one Distributor linear accelerator product and at least one System. 1.7. "Product(s)" means the System and/or related products manufactured by or for Accuray for use in the radiosurgery market, which have been approved for sale in the Customer's geographic region. 1.8. "Quote" means a quote provided by Accuray to Distributor pursuant to Section 2.3 that will serve as the basis for the Product configuration, Services, pricing and delivery schedule offered to a Customer by Distributor. 1.9. "Service(s)" means the performance of radiosurgery-related service(s) by Accuray or its distributors, which may include technical support, training or installation of Products as specified in the Quote. 1.10. "Service Agreements" means the Accuray CyberKnife Service Agreement or such other service programs and agreements as may be released or modified by Accuray from time to time. 1.11. "Spare Parts" means replacement or additional parts or Products used in connection with the System. 1.12. "Specification(s)" means the current written description of a Product or Service prepared by Accuray and provided to Distributor. 1.13. "System(s)" means the Accuray CyberKnife® Robotic Radiosurgery System or CyberKnife® VSI™ System, as applicable. 2. DISTRIBUTORSHIP 2.1. Appointment. Accuray hereby appoints Distributor as a non-exclusive, worldwide distributor of Products and Services to Customers solely in connection with Multiple LINAC or Multi-Modality Purchases, not to the exclusion of Accuray itself or any of its other current or future distributors and subject to the terms and conditions of this Agreement. By way of clarification, this Agreement does not relate to any Cayman Product, including, without limitation, the distribution or sale thereof or any services related thereto. 2.2. Pricing. 2.2.1. Pricing of Products and Services shall be based upon Accuray's then current price lists for such Products and Services. The current price list for Products and Services effective as of the Effective Date will be provided to Distributor contemporaneously with the delivery of this fully executed Agreement to Distributor. Such price lists will be subject to change from time to time in Accuray's sole discretion, and Accuray shall use commercially reasonable efforts to provide Distributor with updated pricing on a regular basis, provided that pricing included in a Quote delivered by Accuray to Distributor shall reflect Accuray's current up-to-date pricing unless otherwise agreed. Updated price lists shall not apply to valid Quotes 2 + + + + + + issued by Accuray and subject to acceptance by Distributor prior to the effective date of such updated price lists. 2.2.2. Notwithstanding the foregoing or anything to the contrary contained in this Agreement, Distributor may present for approval to Accuray opportunities for sales of Products and Services at prices that differ from the prices set forth in the then current price list. Accuray may, in its sole and absolute discretion, approve any such opportunity, and if approved in writing by Accuray, Distributor shall otherwise be permitted to pursue such opportunity at such prices, which opportunity shall otherwise be governed by and pursued pursuant to the terms of this Agreement. 2.3. Quote and Purchase Process. Distributor acknowledges and agrees that Accuray will determine the appropriate quote process to be observed by the parties under this Agreement and may amend this process (other than the approval rights set forth in Section 2.3.2) as notified to the Distributor reasonably in advance. In addition, Distributor acknowledges that each proposed sale of a Product or Service under this Agreement is subject to the approval rights of Accuray set forth in Section 2.3.2. Accuray and Distributor will comply with the following process for making sales of Products and Services in connection with Multiple LINAC or Multi-Modality Purchases: 2.3.1. Opportunity. Once Distributor has identified a Customer opportunity in connection with a Multiple LINAC or Multi-Modality Purchase, it shall request a Quote from Accuray based on the Product configuration and Services requested by the Customer and the Accuray Region in which the Customer is located, and shall include such other information regarding the Customer and the proposed opportunity as Accuray may reasonably request. 2.3.2. Quote. Following receipt of Distributor's Quote request, Accuray will determine whether to approve the issuance of a Quote related to such request. Such determination shall be made in accordance with and subject to the conditions set forth in Schedule 2.3.2 attached hereto. If Accuray approves the issuance of a Quote, Accuray shall issue a Quote to Distributor based on the Product configuration and Services requested by the Customer, including pricing for such Products and Services as provided in Section 2.2 above. The Quote issued by Accuray in relation to a Customer opportunity shall serve as the basis of any offer made by Distributor to that Customer and shall remain valid for at least six months (unless earlier declined by Distributor), and Distributor shall submit an amended Quote request to Accuray in the event adjustments to a Quote are requested by the Customer. Any such amended Quote request from Distributor shall again be subject to the Accuray approval process set forth in this Section 2.3.2. 3 + + + + + + 2.3.3. Purchase. To purchase Products or Services based on a Quote provided by Accuray, Distributor will issue a purchase order, which shall include specific references to the quote number of such Quote (the "Purchase Order"). Accuray shall either accept or reject such Purchase Order within two weeks after receipt thereof, with any failure to approve or disapprove of such Purchase Order in such period constituting disapproval. Each purchase of Accuray Components and Interfaces shall be accomplished and a Purchase Order may be accepted by the execution of the Purchase Order by an authorized representative of Accuray. To the extent of any inconsistency between the Quote and the related Purchase Order, the terms and conditions of such Quote shall govern and Distributor acknowledges and agrees that Accuray shall not be bound by any terms, conditions or boilerplate language included in a Distributor purchase order submitted to Accuray. The Purchase Order shall be delivered to Accuray via fax, electronic mail, or mail at the following address: Accuray Incorporated ATTN: Contracts Administration 1310 Chesapeake Terrace Sunnyvale, CA 94089 Main: (408) 716-4600 Fax: (408) 789-4205 Email: Orders@accuray.com 2.3.4. Cancellation; Amendment; Conflict. Distributor may cancel the Purchase Order if Accuray has not executed such Purchase Order within two weeks of receipt. Any amendment or addition to the Purchase Order shall only be effective if Distributor and Accuray confirm such amendment or addition in writing. To the extent of any inconsistency between a Quote or a Purchase Order and this Agreement, this Agreement shall prevail, unless such Quote or Purchase Order is signed by both the CFO or General Counsel of Accuray and the CFO of Distributor, expressly refers to this Section 2.3.4, and states that the Quote or Purchase Order is intended to supersede this Agreement. 2.4. Standard Lead Time. As of the Effective Time and to the best of Accuray's knowledge, Accuray's standard lead time for delivery of Products is six months. 3. DUTIES OF DISTRIBUTOR 3.1. Independent Distributor. Distributor shall be and must at all times make it clear that it is an independent entity contracting with Accuray, and is not the employee, representative or agent of Accuray. Distributor does not have the ability or authority to enter into any legal agreements or obligations that would bind Accuray in any manner. 3.2. Market Knowledge, Promotion and Sales. Distributor will develop a thorough and complete understanding of the Products and Services. Distributor will use its knowledge and understanding to identify and cultivate potential Customers. Distributor agrees to use commercially reasonable efforts to introduce, promote the sale of, and obtain orders for the Products and Services in connection with Multiple LINAC or Multi-Modality Purchases, including, without limitation, including the Products and Services in each of Distributor's 4 + + + + + + Oncology Care Systems price book and sales operation system, such that all of Distributor's sales representatives can access quotations for Products and Services at least as easily as all other systems then available for purchase from Distributor. Moreover, Distributor represents and warrants that, on the date hereof and during the Term of this Agreement and any extension thereof, it (i) possesses the knowledge, experience, skills, and ability required to properly fulfill its obligations under this Agreement; and (ii) has the required facilities, manpower, capacity, financial strength, and knowledge to market and distribute Accuray's Products and Services in connection with Multiple LINAC or Multi-Modality Purchases. 3.3. Distributor Personnel. During the Term of this Agreement and any extension thereof, Distributor agrees to use commercially reasonable efforts to employ qualified sales and technical personnel familiar with the Products and Services, including, without limitation, at least one person in Distributor's Oncology Care Systems sales group with a primary responsibility for sales of Products, to perform the marketing and sales requirements as set forth herein. 3.4. Distributor Personnel Sales Training. Distributor shall use commercially reasonable efforts to cause each of its Oncology Care Systems sales personnel with any sales duties related to the Systems to attend any training provided by Accuray in such personnel's Accuray Region pursuant to Section 4.12. 3.5. Offers. Distributor shall inform Accuray of all potential Customers for Multiple LINAC or Multi-Modality Purchases during the Term of this Agreement or any extension thereof. Distributor shall offer such potential Customers only those Products or Services described in then current price lists, and only in accordance with the applicable Customer Quote and this Agreement. 3.6. Purchase Schedule. For each sale completed by Distributor, the resulting contract for the sale of Products shall be between Distributor and the Customer and the Service Agreement, if any, shall be between Accuray and the Customer or Accuray and the Distributor, as determined pursuant to Section 4.8. For each such sale, Distributor must send a Purchase Order to Accuray at least six (6) months prior to the expected shipment date. 3.7. Customer Complaints. Distributor shall report promptly and in writing to Accuray any complaints or expressions of dissatisfaction by the Customers to Distributor relating to the Products or Services. Any such reports shall be provided to Accuray via electronic mail to the following address: complaints@accuray.com. 3.8. Warranty. Distributor will not make any warranties or representations in Accuray's name or on Accuray's behalf other than the warranty provided by Accuray pursuant to Section 4.6 unless approved in advance in writing by Accuray. 3.9. Service Agreements. Distributor will make commercially reasonable efforts to sell a Service Agreement to each Customer. For the avoidance of doubt, (i) the obligations of the parties with respect to the Service Agreement are as set forth in Sections 3.6 and 4.8 and (ii) the failure of Distributor to sell a Service Agreement to any Customer shall not be deemed to be a breach of this Agreement. 3.10. Upgrades. Any Product upgrades released by Accuray (other than Bug Fixes and Safety Updates, which are addressed in Section 4.6.3 and 4.6.4 respectively) can be purchased at the discretion of the Distributor pursuant to the procedures set forth in Section 2.3. Such 5 + + + + + + upgrades will be available at the prices listed in the then current price list as of the date of the Quote (unless prior written approval by Accuray for application of an earlier price list is obtained) for the upgrade, less any applicable discounts as specified in Exhibit A hereto. 3.11. Compliance with Laws. 3.11.1. Compliance Generally. Distributor has and will have during the Term of this Agreement and any extension thereof the ability to distribute, market and sell the Products and Services in accordance with the terms of this Agreement, in full compliance with all governmental, regulatory and other requirements under any applicable law. Furthermore, Distributor agrees to comply with all applicable international, national, regional and local laws applicable to the performance of its duties hereunder or to any transactions involving the Products or Services contemplated hereunder. 3.11.2. United States Laws. Distributor understands that, because it is distributing the Products and Services of Accuray, a corporation subject to the laws of the United States of America, Distributor must, when carrying out its duties pursuant to this Agreement, avoid violations of certain of such laws. These include, but are not necessarily limited to, the following: 3.11.2.1. Restrictive Trade Practices or Boycotts, U.S. Code of Federal Regulations Title 15, Chapter VII, Part 760. 3.11.2.2. Foreign Corrupt Practices Act, U.S. Code Title 15, § 78. 3.11.2.3. Export Controls, imposed by U.S. Executive Order or implementing regulations of the U.S. Departments of Commerce, Defense or Treasury. 3.11.3. No Illegal Activity. Neither party (nor their sub-distributors, if any ("Sub-Distributors")) shall engage in any illegal activities. A party will not be held responsible for any activities of the other party or the other party's Sub-Distributors that may be considered to be illegal. For example, neither party supports the practice of bribes or under-the-table payments. Each party will ensure a like clause is included in each agreement it has with its Sub-Distributors, and monitor activities of its Sub- Distributors closely. In the event a party deems that its good-will has been or may potentially be affected by any such illegal activity of the other party or the other party's Sub-Distributors, then such party reserves the right to terminate this Agreement or any portion thereof that relates to or is materially affected by such illegal activity with no further liability to the other party or the other party's Sub-Distributors. Such party assumes no liability for such illegal activity and the other party hereby indemnifies and holds such party, its officers and assigns, harmless from any loss, damage and liability arising from or in connection with such illegal activity. 3.12. Sales Targets. Distributor shall not be subject to any minimum purchase requirements, but shall agree to the annual sales targets set forth in Schedule 2.5(d)(i)(2) of the Strategic Alliance Agreement and to using its customary standard sales processes, including, without limitation, the MTA process, with respect to sales of Systems. 6 + + + + + + 3.13. Affiliates; Distributors. Siemens shall cause any of its Affiliates or distributors purchasing Systems or Services pursuant to the terms of this Agreement to agree to be bound by and comply with the terms and conditions of this Agreement and the provisions of the Strategic Alliance Agreement related to or applicable to such purchase, unless such Affiliate or distributor is already party to a distribution agreement for Products with Accuray. 4. DUTIES OF ACCURAY 4.1. Fulfillment and Shipment. 4.1.1. Fulfillment of Executed Purchase Orders. Accuray is responsible for ensuring that the Products supplied are of good quality as further described below. Accuray will use commercially reasonable efforts to provide to Distributor or Customer, as applicable, in a timely manner those Products and Services required to fill confirmed Purchase Orders received from Distributor in accordance with the terms of this Agreement. 4.1.2. Shipment. All shipments shall be made F.C.A. Port of Oakland, California, USA. Transfer of risk from Accuray to Distributor shall occur at such F.C.A. location as provided in F.C.A. terms and transfer of title shall occur at the same time. Distributor may request Accuray to use a particular freight carrier, and Accuray agrees to do so, if feasible. If not feasible in Accuray's reasonable judgment, then Accuray shall promptly advise Distributor of the reasons. If no such request is made, Accuray shall ship in accordance with any instructions contained in the Purchase Order or via FedEx ground, with no extra insurance. Accuray shall bill any actual freight costs to Distributor. Any supplementary shipping costs arising from the need to meet the delivery deadline set forth in the Purchase Order by way of expedited delivery shall be borne by Accuray, if such delivery deadline was at least six months after the submission of such Purchase Order by Distributor. For example, if a Purchase Order was submitted on June 1, with a requested delivery date of December 1, any expedited delivery expenses required in order to ensure delivery by December 1 shall be borne by Accuray, while if the requested delivery date was October 1, any expedited delivery expenses required in order to ensure delivery by October 1 shall be borne by Distributor. 4.2. Product and Service Pricing. Accuray will provide its then current U.S. list pricing for its Products and Services to Siemens once per year during the Term of this Agreement and any extension thereof, or upon request from Siemens. All prices will be stated in US Dollars, unless another currency is agreed upon in writing by Accuray. 4.3. Product Specifications and Promotional Literature. Accuray will provide product specifications and promotional literature to Distributor from time to time during the Term of this Agreement and any extension thereof. Distributor may use product specifications and promotional literature in Distributor's dealings with Customers. Accuray may introduce changes and upgrades to the Products. Accuray will use commercially reasonable efforts to give Distributor as much advance notice of upgrades as is feasible. 4.4. Regulatory Clearance. Accuray will be responsible for and will bear all expenses related to obtaining and maintaining any approvals, permits and licenses required under any applicable law in order to sell, market and distribute the Products and Services to a Customer in 7 + + + + + + connection with Multiple LINAC or Multi-Modality Purchases, including any upgrades to or expanded usage of the Products; provided, however, that if Accuray does not have a direct presence in or Accuray does not have a distributor for the sales of Systems specifically for the country in which the Customer requests delivery, as a condition to any sale of Products or Services to such Customer, Accuray may require Distributor (solely with the consent of Distributor) to enter into a distribution agreement with Accuray pursuant to Section 3.2 of the Strategic Alliance Agreement providing, among other things, that Distributor will be responsible for obtaining all such approvals, permits, and licenses for sales to such Customer. Distributor will provide any assistance or documentation reasonably requested by Accuray and at Accuray's expenses to assist Accuray with its obligations under this Section 4.4. Accuray will be registered as the sole owner of any rights, title and interest to any of the Products or Spare Parts, as the case may be; provided, however, that should any applicable law or regulation require that Distributor alone be entitled to such ownership rights, Distributor shall hold this approval as trustee for Accuray and hereby consents to transfer or sublicense such approval to Accuray free of charge or to support Accuray in its efforts to re-obtain the approval for the benefit of Accuray or a third party named by Accuray upon expiration or termination of this Agreement. Lists indicating, as of the Effective Date, (i) the countries in which Accuray has obtained regulatory approvals for the Products and Services and (ii) the countries in which Accuray has a direct presence or has a distributor for the sales of Systems specifically for such country are being delivered to Siemens concurrently with the execution of this Agreement. Accuray shall provide to Siemens updates of such lists on a quarterly basis. 4.5. Import License. Accuray or its distributor will obtain and maintain all required import licenses, and shall serve as importer of record for all Products and Services delivered in or into any country or region, other than the United States, pursuant to this Agreement; provided, however, that if Accuray does not have a direct presence in or Accuray does not have a distributor specifically for the sales of Systems in the country in which the Customer requests delivery, as a condition to any sale of Products or Services to such Customer, Accuray may require Distributor (solely with the consent of Distributor) to enter into a distribution agreement with Accuray pursuant to Section 3.2 of the Strategic Alliance Agreement providing, among other things, that Distributor will obtain and maintain all required import licenses and will act as the importer of record for the Products and Services ordered by such Customer. 4.6. Warranty. 4.6.1. Scope of Warranty. Accuray will provide a warranty to each Customer that the Products will be free from material defects and perform substantially in accordance with the written Specifications provided by Accuray as reflected in the regulatory clearance at the time of sale for a period of one (1) year following Installation of the Products at Customer's facility, but not to exceed eighteen (18) months following shipment of such Products to Distributor ("Warranty Period"). "Installation" of the System shall occur upon completion by Accuray or the entity installing the System, as applicable, of Accuray's acceptance test procedure demonstrating that the System substantially conforms to the written Specifications. If Accuray does not perform the Installation, Distributor will notify Accuray in writing within ten (10) days following Installation (including any testing procedures undertaken by Customer or its installation service provider). In no event shall Distributor, Customer or their respective agents use the System (or any portion thereof) for any purpose before Installation thereof without the express written approval of Accuray. Distributor 8 + + + + + + shall indemnify and hold Accuray harmless from any such use. Accuray makes no warranty that the operation of any software will be uninterrupted or error-free. Except as set forth in the preceding sentences, Accuray makes no warranties or representations to Customers or to any other party regarding any Products or Services provided by Accuray. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ACCURAY DISCLAIMS ALL OTHER WARRANTIES AND REPRESENTATIONS, WHETHER EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND ANY WARRANTIES ARISING OUT OF COURSE OF DEALING OR USAGE OF TRADE. 4.6.2. Hardware and Software. If a Customer notifies Accuray in writing during the Warranty Period of a defect in a Product that causes the Product to fail to conform to the foregoing warranty, Accuray shall at its option either repair or replace the non- conforming Product or, if in Accuray's opinion such repair or replacement is not commercially reasonable, Accuray shall refund a pro-rated portion of the price paid by the Customer for such Product calculated based on a straight-line depreciation over a 5-year period beginning on the date of delivery. This will be Accuray's sole and exclusive obligation and such Customer's sole and exclusive remedy in relation to defective Products and parts. 4.6.3. Software and Bug Fixes. Notwithstanding Section 4.6.2, for a period of 10 years following Installation of a System, Accuray will provide to Customer, without charge, Bug Fixes with respect to any software included in the System. This is Accuray's sole and exclusive obligation and Customer's and Distributor's sole and exclusive remedy in relation to defective software. By way of clarification, Accuray's sole obligation shall be to make such Bug Fixes available to Customer, and Accuray shall have no obligation (unless otherwise agreed by the Customer and Accuray) for installation or implementation of such Bug Fixes at the Customer's site. "Bug Fix" means an error correction or minor change in the existing software and/or hardware configuration that is required in order to enable the existing software and/or hardware configuration to perform to the existing functional specification(s). 4.6.4. Safety Updates. Notwithstanding Section 4.6.2 and any obligations according to law, for a period of 10 years following Installation of a System, Accuray will provide to Customer, without charge, Safety Updates with respect to any hardware or software included in the System. This is Accuray's sole and exclusive obligation and Customer's and Distributor's sole and exclusive remedy in relation to any Safety Update required to be provided by applicable law in the Customer's jurisdiction. By way of clarification, Accuray's sole obligation shall be to make such Safety Update available to Customer, and Accuray shall have no obligation (unless otherwise agreed by the Customer and Accuray) for installation or implementation of such Safety Update at the Customer's site. "Safety Update" means an error correction or change in the existing software and/or hardware configuration that is required for safety in order to enable the existing software and/or hardware configuration to perform to the existing functional specification(s) in accordance with applicable law in the Customer's jurisdiction. 4.6.5. Warranty Exclusions. All warranty replacement of Products and parts shall be limited to malfunctions which are due and traceable to defects in original material or workmanship of Products. The warranties set forth in this Section 4.6 shall be void 9 + + + + + + and of no further effect in the event of abuse, accident, alteration, misuse or neglect of Products, including but not limited to user modification of the operating environment specified by Accuray and user modification of any software. 4.6.6. Warranty Basis. Any limitation of liability under any warranty contained herein shall be an integral part of such warranty, which limits its scope (Section 444, second alternative German Civil Code shall not apply). Any limitation of liability for any defects contained herein shall be void insofar as Accuray has intentionally failed to disclose such defect. 4.7. Installation. Unless otherwise agreed by Accuray and Distributor (including, without limitation, pursuant to the terms of any distribution agreement entered into pursuant to Section 3.2 of the Strategic Alliance Agreement), Accuray shall be responsible for installation of Accuray Products at Customer sites. 4.8. Service Agreements. Accuray will provide its then current Service Agreements to Distributor from time to time during the Term of this Agreement and any extension thereof, or upon request from Distributor. All prices will be stated in US Dollars, unless another currency is agreed upon in writing by Accuray. Such Service Agreements are to be offered to the Customer on the terms as set forth in those agreements, unless otherwise agreed to in writing by an authorized representative of Accuray. Accuray shall execute a Service Agreement with the Customer upon receipt of (i) a copy of such Service Agreement executed by the Customer, and (ii) any payments then due under such Service Agreement; provided, however, that Accuray shall have no obligation to enter into such Service Agreement if it materially deviates from the form Service Agreement provided to Distributor; provided, further, that if Accuray does not have a direct presence in or Accuray does not have a distributor for the sales of Systems specifically for the country in which the Customer requests Services, as a condition to any sale of Services to such Customer, Accuray may require Distributor (solely with the consent of Distributor) to enter into a distribution agreement with Accuray pursuant to Section 3.2 of the Strategic Alliance Agreement providing, among other things, that Distributor may (at its sole discretion) enter into such Service Agreement with such Customer and will provide directly to such Customer the Services required to be performed under such Service Agreement. If Accuray enters into such Service Agreement with such Customer, Accuray will be responsible for and will provide to such Customer (either directly or through one or more of its distributors) the services required to be performed under such Service Agreement. 4.9. Customer Training. If training of Customer's personnel is included in a Purchase Order confirmed by Accuray, Accuray will provide such training in accordance with Accuray's then current training offerings and will coordinate with the Customer in order to provide such training at Accuray's facility in Sunnyvale, California (or such other facility as may be agreed upon by Customer and Accuray). For the purposes of such training, Accuray will be responsible for the travel and accommodation expenses of its personnel, while Customer shall be responsible for the travel and accommodation expenses of its personnel. All Customer training provided by Accuray will be conducted in English and, to the extent a Customer or its personnel do not have adequate English language reading and comprehension skills, Accuray will provide an interpreter and translation services sufficient to enable the Customer and its personnel to meaningfully and effectively participate in Accuray training courses. 10 + + 4.10. Customer Support. Unless otherwise agreed by Accuray and Distributor (including, without limitation, pursuant to the terms of any distributorship agreement entered into pursuant to Section 3.2 of the Strategic Alliance Agreement), Accuray will provide guidance to billing and reimbursement personnel of each Customer regarding regulatory and billing requirements and reimbursement for treatment provided with Products under radiosurgery reimbursement codes. Accuray will coordinate and assist the Customer with room evaluation, architecture support and quality assurance issues in relation to Customer installation sites. 4.11. Additional Support and Training. Accuray will provide additional service, support, or training in relation to Products or Services at Customer's request, to be ordered separately and directly from Accuray, and priced on a time and materials basis according to Accuray's then current price lists. 4.12. Distributor Personnel Sales Training. Accuray shall provide training of Distributor's sales personnel responsible for sales of Products and Services to Distributor free of charge. Such training shall be at the times, in such locations, and in the scope agreed upon by Distributor and Accuray in good faith; provided, however, that such training shall be provided to such Distributor personnel in each Accuray Region at least once per year. Each party shall be responsible for all costs and expenses, including travel and lodging, incurred by it or its personnel to attend or provide such training. Accuray will provide additional training to Distributor's personnel as may be reasonably requested by Distributor on a time and materials basis according to Accuray's then current price lists. 4.13. Support of Distributor's Efforts. Accuray shall, at its own expense: 4.13.1. assign a dedicated marketing point of contact for Distributor's marketing and sales personnel, which employee may be based at any of Distributor's facilities as requested by the Steering Committee; and 4.13.2. provide global sales and marketing support, including support for individual sales opportunities, to Distributor; provided, however, that the scope, duration, location, availability, and timing of such support shall be subject to commercially reasonable limits and shall be determined pursuant to Section 3.3(a)(iii) of the Strategic Alliance Agreement. 4.14. Compliance with Laws. Accuray will be responsible for complying with (i) applicable U.S. laws, (ii) where Products are being shipped to Distributor and unless otherwise agreed by Accuray and Distributor, applicable laws, codes, registrations, regulations, and ordinances related to the export of the Products to Distributor, and (iii) any other applicable laws as they pertain to the Products, the regulatory clearance, and safety in accordance with Accuray's written Specifications for the intended use. In addition, Accuray shall be responsible for compliance with any applicable law, code, registration, regulation, and ordinance related to the export of the Products or Services to Customer and/or Distributor, if any (the "Export Regulations"), and Accuray shall be liable for any expenses and/or damages incurred by Distributor due to any non-compliance with such Export Regulations by Accuray (unless Accuray is not responsible for such non-compliance). Accuray shall advise Distributor in writing within two weeks of the confirmation of the Purchase Order of any information or data required by Accuray to comply with an Export Regulation, including without limitation: + + + + + +(a) All applicable export list numbers, including the Export Control 11 + + + + + + Classification Number according to the U.S. Commerce Control List (ECCN); (b) The statistical commodity code according to the current commodity classification for foreign trade statistics and the HS (Harmonized System) coding; (c) The country of origin (non-preferential origin); and (d) Accuray's declaration of preferential origin (in case of European suppliers) or preferential certificates (in case of non-European suppliers). 4.15. Spare Parts. Upon a termination of this Agreement, Accuray shall continue to make available to Customers support services on commercially reasonable terms, including, without limitation, spare parts for the Systems for a minimum period of 10 years after the last shipment of a System pursuant to this Agreement. 5. COMPENSATION AND PAYMENT 5.1. Orders. Distributor shall make an offer to a Customer based on the Quote provided by Accuray pursuant to the process set forth in Section 2.3. Submission and acceptance of an order shall be completed pursuant to Section 2.3.3. 5.2. Purchase Price. 5.2.1. Distributor shall pay the prices listed in the applicable Purchase Order (unless prior written approval by Accuray for application of an earlier price list is obtained) for the Products, including any Spare Parts, less any applicable discounts as specified in Exhibit A hereto. Distributor shall receive a commission in the amount specified in Exhibit A hereto for any Service Agreement entered into by Accuray with Customer pursuant to Section 4.8. 5.2.2. All costs of delivering the Products to the Distributor or Customer (including, but not limited to, costs for land, air and/or ocean freight, insurance, port, customs and forwarding fees, if any), as well as any rigging and unloading of the Products, shall be paid as provided in the F.C.A. terms. Unless advised otherwise, all prices quoted by Accuray include the cost of packing and crating for delivery. 5.2.3. Taxes. By way of clarification, all Accuray prices referenced in this Agreement, and all other amounts payable by Distributor to Accuray pursuant to this Agreement are net of any value added tax or federal, state, county or municipal sales or use tax, excise or similar charge, withholding tax, or other tax assessment (except for any taxes that are assessed against income) (collectively, the "Taxes"). The parties agree that it is their intention that Accuray will not bear any economic burden relating to the Taxes. Subject to the foregoing and to compliance with applicable laws, Accuray and Distributor agree to cooperate with each other as reasonably requested to establish the responsibilities of the parties relating to the payment and withholding of Taxes, filing of documents, and other matters in order to achieve an efficient tax result. 5.3. Compensation. Except as otherwise provided herein, Distributor's only compensation for its efforts on Accuray's behalf shall be the margins it earns on the resale of Products and 12 + + + + + + commissions on sales of Services, and Distributor shall bear all of the expenses which it incurs in making those efforts. Notwithstanding the foregoing, in the event that Accuray does not approve the issuance of a Quote to a potential Customer and later contracts directly (or through one of its distributors) with such potential Customer, of which Accuray shall inform Distributor without undue delay, Distributor shall receive credit for any sales of Systems to such potential Customer pursuant to and subject to the fulfillment of the conditions set forth in Section 3.4 of the Strategic Alliance Agreement. 5.4. Payment. 5.4.1. System Purchase Payments. Payment for the purchase of a System shall be made by Distributor to Accuray in US Dollars in the form of either (1) an irrevocable trade finance letter of credit or (2) wire transfer as further described in Sections 5.4.1.1 (Letter of Credit) and 5.4.1.2 (Wire Transfer), respectively below. Accuray shall bear the cost of any bank charges assessed by its bank for a letter of credit and any commission charge for a wire transfer. Past due balances on any reasonably undisputed amount shall bear interest at the rate of 0.5% per month or, if lower, the maximum amount permitted by applicable law. If Distributor is a "business person" (as defined in § 14 of the German Civil Code, "BGB"), the payment shall be deemed past due only if Distributor fails to pay in response to a payment demand note received after payment becomes due. 5.4.1.1. Letter of Credit. An irrevocable trade finance letter of credit issued by Distributor's bank, confirmed by a bank designated by Accuray in all respects and delivered to Accuray upon the acceptance of the Purchase Order by Accuray. The letter of credit will provide that Accuray can draw against the letter of credit according to the following schedule: 5.4.1.1.1. US $100,000 (non-refundable but, in case of cancellation of the Purchase Order, automatically applied to Distributor's next purchase of a System) upon Accuray's acceptance of the Purchase Order, which must be at least four (4) months prior to the Distributor's proposed shipment date; and 5.4.1.1.2. Balance upon presentation of documents by Accuray evidencing shipment of the Products to Distributor or Customer as designated in the Purchase Order. 5.4.1.2. Wire Transfer. A wire transfer made in advance of the date payment is due, made in U.S. dollars, to a bank selected by Accuray, according to the following schedule: 5.4.1.2.1. US $100,000 (non-refundable but, in case of cancellation of the Purchase Order, automatically applied to Distributor's next purchase of a System) upon Accuray's acceptance of the Purchase Order, which must be at least four (4) months prior to the Distributor's proposed shipment date; and 13 + + + + + + 5.4.1.2.2. The remaining balance is due net 30 days after delivery by Accuray at the specified F.C.A. location pursuant to Section 4.1.2 and receipt by Distributor of a reasonably undisputed invoice. 5.4.1.3. Tax Exempt Status. In the event that Customer claims tax exempt status in the country where the Accuray System is to be installed, Customer must provide Accuray with sufficient evidence of such tax exempt status prior to delivery of the Accuray System. 5.4.2. Products, Spare Parts and Upgrade Payments. Full payment of the purchase price for Products (other than Systems), Spare Parts and upgrades shall be made by Distributor to Accuray in US Dollars by wire transfer to a bank selected by Accuray and is due net 30 days after delivery by Accuray at the specified F.C.A. location pursuant to Section 4.1.2 and receipt by Distributor of a reasonably undisputed invoice. Accuray shall bear the cost of any commission charge for a wire transfer. 5.4.3. Payments by Customers Direct to Accuray. If agreed to in writing by Accuray, Customers may make payments directly to Accuray using the payment methods and schedules set forth in Sections 5.4.1.1 (Letter of Credit), 5.4.1.2 (Wire Transfer) and 5.4.2 (Products, Spare Parts and Upgrade Payments) above. Should Customers make such payments to Accuray and such payment include the Distributor's margin, then Accuray will pay such margin to Distributor once payment is received from the Customer and cleared by Accuray's designated bank. 5.5. Collections. Notwithstanding Section 5.4.3 above, Distributor shall be solely responsible for determining the creditworthiness of and collecting payment from its Customers. The risk of non-collection from the Customer will be borne entirely by Distributor, which shall be responsible for making timely payment to Accuray for Products whether or not Distributor is successful in collecting from its Customer. In the event that full payment is not received by Accuray, Accuray shall not be liable to Distributor for any margin or commission unless and until it has received payment of amounts sufficient to cover the costs incurred by Accuray to provide the applicable Products to Distributor and the applicable Services to Customer ("Accuray Cost"). Distributor acknowledges and agrees that it shall not be entitled to receive payment of any margin or commission until Accuray has received payment of the Accuray Cost amount in relation to the applicable Products and Services. 6. TERM AND TERMINATION 6.1. Term. Unless otherwise agreed in writing by Accuray and Distributor and subject to the termination rights contained in this Agreement, this Agreement shall begin on the Effective Date and shall continue until the termination of the Strategic Alliance Agreement; provided, however, that if a Termination Election relating to this Agreement is made pursuant to Section 10.3 of the Strategic Alliance Agreement prior to such termination, this Agreement shall terminate 36 months after such Termination Election (the "Term"). 6.2. Termination. 6.2.1. Breach. If either party commits a material breach of a material provision of this Agreement, if such breach was not excused as a force majeure pursuant to Section 12.12, and if the breaching party has not cured such breach to the other party's 14 + + + + + + reasonable satisfaction within 30 days after written notice from the other party specifying the nature of such breach, then the other party shall have the right to terminate this Agreement upon delivery of written notice to the breaching Party. 6.2.2. Bankruptcy. A party may terminate this Agreement effective upon delivery of written notice to the other party if: (i) any assignment for the benefit of the other party's creditors is made, (ii) the other party voluntarily files a petition in bankruptcy or similar proceeding, (iii) the other party has such a petition in bankruptcy or similar proceeding involuntarily filed against it, (iv) the other party is placed in an insolvency proceeding, (v) if an order is entered appointing a receiver or trustee of the other party, or (vi) a levy or attachment is made against a substantial portion of the other party's assets, and, with respect to any event set forth in clauses (iii) through (vi) above, such position, placement, order, levy or attachment is not dismissed or removed within 30 days from the date of such event. 6.3. Effect of Termination. Upon expiration of the Term (or other termination of this Agreement): 6.3.1. Transition of Activities. Accuray and Distributor agree to negotiate in good faith an orderly transition of Distributor's distribution responsibilities and activities to Accuray or a third party designated by Accuray and Distributor agrees to assist in the transition. 6.3.2. Pending Obligations. Each party must continue to fulfill any obligations, including but not limited to pending Quotes, accrued before the effective date of such termination. 6.3.3. Return of Materials. Distributor shall transfer to Accuray upon Accuray's request: any regulatory clearances, licenses or permits obtained for conduct of the business pursuant to this Agreement; any Confidential Information; and other items as negotiated in good faith between the parties. Furthermore, each of the parties agree to cooperate fully with the other for any reasonable transition assistance required in the case of termination or expiration of this Agreement. 6.4. No Termination Compensation. Distributor waives any rights it may have to receive any compensation or indemnity upon termination or expiration of this Agreement, other than as expressly provided in this Agreement. Distributor acknowledges that it has no expectation and has received no assurances that any investment by Distributor in the promotion of the Products will be recovered or recouped or that Distributor will obtain any anticipated amount of profits by virtue of this Agreement. 6.5. Accruals. No termination or expiration of this Agreement will terminate any obligation of payment which has accrued prior to the effective date of such termination or expiration. 7. DISPUTE RESOLUTION. Any contractual issues or disputes arising out of or related to this Agreement shall be resolved pursuant to the procedures set forth in Section 11.3 of the Strategic Alliance Agreement. 8. CONFIDENTIALITY. Accuray and Distributor agree that all Confidential Information furnished to a party or its Affiliates, employees, consultants, and advisors in connection with this Agreement will 15 + + + + + + be subject to and the parties' rights and obligations with respect to such Confidential Information shall be governed by the Confidentiality Agreement. 9. INTELLECTUAL PROPERTY RIGHTS. 9.1. Notice of Infringement. Distributor undertakes to inform Accuray without undue delay if it first becomes aware of any possible infringement by third parties of Accuray's proprietary rights, including, without limitation, a duplication of the Products or any other patent, trademark or copyright or other infringement of Accuray's intellectual property rights in connection with the Products, and to cooperate with Accuray at Accuray's sole expense regarding any legal action in relation to such infringement, which in Accuray's judgment, is necessary or desirable. 9.2. Third Party Claims. If Distributor promptly notifies Accuray of a claim it has received or of which it becomes aware that the Products or any part thereof purchased by Distributor hereunder infringes a third party's proprietary rights, then Accuray agrees, at its discretion, either to (i) defend the claim at its expense, with the cooperation of Distributor, provided, that Accuray shall reimburse Distributor for any reasonable costs or expenses actually incurred by Distributor in connection with providing such cooperation, or (ii) make changes in the Product or part thereof so that they are at least functionally equivalent and non-infringing or replace the Products with alternatives that are at least functionally equivalent to avoid the claim, or (iii) purchase the right to use such proprietary right or (iv) refund to the purchaser the net book value of the Product less a reasonable deduction for use, wear and tear, and depreciation upon Accuray taking possession of such Product. Notwithstanding Section 10.1, the foregoing states the entire liability of Accuray with respect to infringement of patents or other proprietary rights by the Products or part thereof, or by their operation. To remove all doubt, Accuray has no obligation regarding any claim based on any of the following: (a) modification of the Products by any person other than Accuray; (b) combination, operation or use of the Products with other products, parts, components, materials or accessories not provided by Accuray; or (c) infringement by a product not manufactured by Accuray. 9.3. Intellectual Property Ownership and License. Accuray and its licensors retain all intellectual property rights in the Products. Accuray hereby grants Distributor or Customer a nonexclusive, non-transferable, royalty-free right to use the software provided in connection with the Products only in machine readable form and only in combination with the Products with which such software is provided. No such software shall be copied or decompiled in whole or in part by Distributor or Customer, and Distributor or Customer shall not disclose or provide any such software, or any portion thereof, to any third party. Accuray hereby grants to Customers of Products a non-exclusive, non-transferable and royalty-free license under any Patents owned by Accuray or the licensing of which is controlled by Accuray that, but for this license, would be infringed by the use of such Products in accordance with the applicable Specification. All rights in intellectual property not expressly granted hereunder are reserved by the owner of such intellectual property. 9.4. Product Labeling. Products shall be labeled and identified at point of manufacture. Accuray shall be responsible for compliance with all applicable local laws and regulations relating to labeling. Such labeling and identification shall be only as acceptable to Accuray and may be altered or added to by Distributor only as previously agreed upon in writing by Accuray. The failure of Distributor to comply with these provisions shall be considered a material default under the terms of this Agreement. 16 + + + + + + 9.5. Trademarks. Distributor acknowledges the validity and proprietary value of Accuray's trademarks including, but not limited to, "CyberKnife." Accuray shall retain sole ownership of all goodwill associated with the Products, as represented and symbolized by the associated trademarks, and Distributor shall not register any of Accuray's trademarks in its name. Distributor undertakes to display Accuray's trademarks solely in connection with identifying Accuray in the sale and marketing of Products hereunder. Distributor shall not remove copyright notices or any trademarks from the Products. Distributor shall not be entitled to use said trademarks in conjunction with Distributor's own trademarks or for any other purpose, except in the manner authorized by Accuray, which authorization will not be unreasonably withheld and in compliance with distribution standards and specifications established by Accuray. If Accuray determines in its sole discretion that Distributor is not meeting such standards and specifications, Distributor shall immediately, at Accuray's instructions, take all steps necessary to ensure that such standards and specifications are met or cease all further use and display of the trademarks. In the event of expiration or termination of this Agreement, Distributor shall immediately discontinue all use of Accuray's trademarks except for the sale of Distributor's inventory of Products. 10. INDEMNITIES. 10.1. Accuray Indemnity. Accuray will defend or settle any action brought against Distributor and shall indemnify and hold Distributor harmless from any liability, damages and expenses (including court costs and reasonable attorneys' fees) to the extent that it is based upon a third-party claim that a Product, as provided by Accuray to Distributor under this Agreement, infringes any patent issued in the United States, Germany, or in the country in which the Customer requested delivery of the Product or any copyright or misappropriates any trade secret, and will pay any costs and damages made in settlement or awarded against Distributor in final decision resulting from any such claim, provided that Distributor: (i) gives Accuray prompt notice of any such claim; (ii) gives Accuray sole control of the defense and any related settlement of any such claim; and (iii) gives Accuray, at Accuray's expense, all reasonable information, assistance and authority in connection with the foregoing. Accuray will not be bound by any settlement or compromise that Distributor enters into without Accuray's express prior written consent. 10.2. Products Liability Indemnity. Accuray will defend or settle any action brought against Distributor and shall indemnify and hold Distributor harmless from any liability, damages and expenses (including court costs and reasonable attorneys' fees) to the extent that it is based upon a third-party claim that a Product, as provided by Accuray to Distributor under this Agreement is unsafe when used according to Accuray's written Specifications for its intended use, and will pay any costs and damages made in settlement or awarded against Distributor in final decision resulting from any such claim, provided that Distributor: (i) gives Accuray prompt notice of any such claim; (ii) gives Accuray sole control of the defense and any related settlement of any such claim; and (iii) gives Accuray, at Accuray's expense, all reasonable information, assistance and authority in connection with the foregoing. Accuray will not be bound by any settlement or compromise that Distributor enters into without Accuray's express prior written consent. 10.3. Injunctions. If Distributor's rights to use and distribute a Product under the terms of this Agreement are, or in Accuray's opinion are likely to be, enjoined due to the type of claim specified in Section 10.1 (Accuray Indemnity), then Accuray may, at its sole option and expense: (i) procure for Distributor the right to continue to use and distribute such Product under the terms of this Agreement; (ii) replace or modify such Product so that it is non- 17 + + + + + + infringing; or (iii) if options (i) and (ii) above cannot be accomplished despite Accuray's reasonable efforts, then Accuray or Distributor may terminate this Agreement with respect to such Product and Accuray shall credit to Distributor a pro-rated portion of the amount paid for such Product based on a straight-line depreciation calculated over a 5-year period beginning on the date of delivery of the Product, provided that all units of such Product are returned to Accuray in an undamaged condition. 10.4. Indemnity Exclusions. Notwithstanding the foregoing, Accuray will have no obligation under Sections 10.1 (Accuray Indemnity) or 10.2 (Products Liability Indemnity) for any third-party claim to the extent that such claim results from: (i) use of any Products not in accordance with Accuray's written Specifications; (ii) use or combination of the Products with other items, such as other equipment, processes, programming applications or materials not furnished by Accuray; (iii) compliance by Accuray with Distributor's or Customers' designs, specifications or instructions; (iv) modifications to a Product not made by or at the express written direction of Accuray; (v) Distributor's failure to use updated or modified Products provided by Accuray, provided that such updated or modified Products would have avoided the basis for such claim; or (vi) Distributor's use or distribution of a Product other than in accordance with this Agreement. The foregoing clauses (i) to (vi) are referred to collectively as "Indemnity Exclusions". 10.5. Limitation. WITHOUT AFFECTING STRICT PRODUCT LIABILITY UNDER MANDATORY APPLICABLE LAW, THE FOREGOING PROVISIONS OF THIS SECTION SET FORTH ACCURAY'S SOLE AND EXCLUSIVE LIABILITY AND DISTRIBUTOR'S SOLE AND EXCLUSIVE REMEDY FOR ANY CLAIMS OF INFRINGEMENT OR MISAPPROPRIATION OF INTELLECTUAL PROPERTY RIGHTS OR PROPRIETARY RIGHTS OF ANY KIND. 10.6. Distributor Indemnity. Distributor will defend or settle, indemnify and hold Accuray harmless from any liability, damages and expenses (including court costs and reasonable attorneys' fees) to the extent based upon a third-party claim based on or otherwise attributable to: (i) Distributor's acts or omissions not in accordance with this Agreement or (ii) any misrepresentations made by Distributor with respect to Accuray or the Products or Services. 11. LIABILITY. 11.1. Liability for Death or Injury. The liability of any party with respect to death or injury to any person is subject to and governed by the provisions of applicable law. 11.2. Limitation on Liability. WITHOUT AFFECTING STRICT PRODUCT LIABILITY UNDER MANDATORY APPLICABLE LAW, SECTION 10, OR THE RESPECTIVE OBLIGATIONS OF THE PARTIES UNDER THE CONFIDENTIAILITY AGREEMENT AND EXCEPT FOR BREACHES ASSOCIATED WITH THE UNAUTHORIZED USE OF INTELLECTUAL PROPERTY, IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR SPECIAL, INCIDENTAL, CONSEQUENTIAL, PUNITIVE OR TORT DAMAGES, INCLUDING WITHOUT LIMITATION, ANY DAMAGES RESULTING FROM LOSS OF USE, LOSS OF DATA, LOSS OF PROFITS OR LOSS OF BUSINESS ARISING OUT OF OR IN CONNECTION WITH THE MATTERS CONTEMPLATED BY THIS AGREEMENT, WHETHER OR NOT A PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. 18 + + + + + + 11.3. Liability Cap. Without affecting Section 10 or the respective obligations of the parties under the Confidentiality Agreement and except for any liability (i) relating to any breach associated with the unauthorized use of Intellectual Property, (ii) arising from the intentional breach or willful misconduct of a party, or (iii) arising from the non-compliance with any mandatory applicable law or regulation, the total aggregate liability of one party to another party for any claim relating to any breach of this Agreement (or any Purchase Order or other agreement entered into in connection with this Agreement) (a "Claim") shall be limited to the aggregate amount of the purchase prices paid by Distributor to Accuray for Products pursuant to this Agreement (or any Purchase Order or other Agreement entered into in connection with this Agreement) during the twelve calendar months preceding the date of the notification to the other party of such Claim less any amounts paid or payable in respect of any other Claim of which the other party was notified during such twelve month period. 11.4. Notice; No Waiver. Each party shall not unreasonably delay notification to the other party of any Claim. Nothing in this Section 11 shall be deemed a waiver by any party of any right to injunctive relief to the extent it is available to such party. 12. MISCELLANEOUS PROVISIONS 12.1. Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the Federal Republic of Germany excluding the United Nations Convention on Contracts of International Sale of Goods (CISG) and the provisions of German private international law. 12.2. Modification. Notwithstanding any provision to the contrary in this Agreement, Distributor and Accuray may agree, by execution of a written agreement, to modify any term or provision of this Agreement, including, without limitation, the duties of the parties, the Quote and Purchase Order approval procedure, the pricing of the Products and Services, and the payment terms, with respect to any single or number of Customer opportunities, Quotes, or Purchase Orders. 12.3. Publicity. Both parties may not use the other party's name or trademarks on its literature, signs, or letterhead, nor may it make press releases or other public statements disclosing its relationship under this Agreement or otherwise without the prior written consent of the other party, which shall not be unreasonably withheld or delayed. 12.4. Goodwill. Distributor agrees that it will help develop and work to preserve the goodwill of Accuray, and will not unreasonably harm that goodwill. In the event of termination of this Agreement for any reason, Distributor will not do anything to unreasonably harm the goodwill of Accuray. 12.5. Titles. Titles of the various paragraphs and sections of this Agreement are for ease of reference only and are not intended to change or limit the language contained in those paragraphs and sections. 12.6. Assignment. Neither this Agreement, nor any of the rights, interests, or obligations under this Agreement may be assigned or delegated, in whole or in part, by operation of law or otherwise, by any party without the prior written consent of the other party, and any such assignment without such prior written consent shall be null and void; provided, however, that this Agreement may be assigned by a Party in connection with a Change in Control of such party, subject to the specific termination and other rights set forth in the Strategic 19 + + + + + + Alliance Agreement upon such Change in Control; provided, further, that Siemens may assign its rights and obligations under this Agreement to any Distributor that agrees, in writing, to be bound by and comply with the terms and conditions of this Agreement and the provisions of the Strategic Alliance Agreement, provided, that no such assignment shall relieve Siemens of its obligations hereunder or thereunder if such Distributor does not perform such obligations. Subject to the foregoing, this Agreement will be binding upon, inure to the benefit of, and be enforceable by, the parties and their respective successors and permitted assigns. 12.7. Conduct. 12.7.1. Both parties prohibit the harassment of their employees and contractors in any form. They consider harassment of, or discrimination against, their employees and affiliated persons a very serious matter and will investigate all complaints of inappropriate conduct. Where the investigation uncover harassment or discrimination, the other party may take reasonable corrective action, including, without limitation, termination of this Agreement for material breach. 12.7.2. During the Term, Accuray shall comply, in all material respects, with Siemens' Code of Conduct, attached hereto as Exhibit B (the "Code of Conduct"). Siemens shall give Accuray written notice of any change to its Code of Conduct as soon as reasonably practicable. 12.7.3. During the Term, Distributor shall comply, in all material respects, with the Business Conduct Guidelines of Siemens and all other Siemens internal regulations and guidelines. 12.8. Quality Assurance Agreement. During the Term and in connection with its performance of its duties under this Agreement, Accuray shall comply, in all material respects, with Siemens' Quality Assurance Agreement attached hereto as Exhibit C, with the exception of any provisions thereof related to barcoding. 12.9. Notices. All notices and other communications hereunder shall be in writing and shall be deemed duly given (a) on the date of delivery if delivered personally, (b) if by facsimile, upon written or electronic confirmation of receipt (if sent during business hours of the recipient, otherwise on the next business day following such confirmation), (c) on the first business day following the date of dispatch if delivered utilizing a next-day service by a recognized next-day courier, (d) on the earlier of confirmed receipt or the fifth business day following the date of mailing if delivered by registered or certified mail, return receipt requested, postage prepaid. All notice hereunder shall be delivered to the addresses set forth below: 20 + + + + 12.10. Waiver. The waiver of any breach or default of any provision of this Agreement will not constitute a waiver of any other right hereunder or of any subsequent breach or default. 12.11. Severability. If any provision of this Agreement is held invalid or unenforceable by a court of competent jurisdiction, the remaining provisions of the Agreement will remain in full force and effect, and the provision affected will be construed so as to be enforceable to the maximum extent permissible by law. 12.12. Survival. The expiration or termination of this Agreement for any reason will not release either party from any liabilities or obligations set forth herein which (i) the parties have expressly agreed will survive any such expiration or termination; or (ii) remain to be performed or by their nature would be intended to be applicable following any such termination or expiration. In addition to the foregoing, the following provisions shall survive any termination or expiration of this Agreement: Section 3.8 (Warranty); Section 3.11 (Compliance with Laws); Section 4.6 (Warranty); Section 6.2 (Effect of Termination); Section 6.3 (No Termination Compensation); Section 6.4 (Accruals); Section 7 (Dispute Resolution); Section 8 (Confidentiality); Section 9 (Intellectual Property Rights); Section 10 (Indemnities), Section 11 (Liability) and Section 12 (Miscellaneous Provisions). 12.13. Force Majeure. Neither party will be responsible for any failure or delay in its performance under this Agreement (except for the payment of money) due to causes beyond its reasonable control, including, but not limited to, labor disputes, strikes, lockouts, shortages of or inability to obtain labor, energy, raw materials or supplies, war, acts of terror, riot, acts of God or governmental action. 12.14. Amendments. Any amendment or modification of this Agreement must be made in writing and signed by duly authorized representatives of each party. For Accuray, a duly authorized representative must be any of the following: CEO, CFO, General Counsel or Associate General Counsel. 12.15. English Language Requirement. This Agreement is written in the English language as spoken and interpreted in the United States of America, and such language and interpretation shall be controlling in all respects. 12.16. Foreign Currency. Distributor acknowledges and agrees that it shall assume all risk associated with any fluctuation of foreign currency exchange rates associated with its pricing of Products and Services to Customers in a currency other than US Dollars. All payments made by Distributor to Accuray shall be in US Dollars. 12.17. Entire Agreement. This Agreement and the Strategic Alliance Agreement contain the entire agreement of the parties hereto with + +To Accuray: To Distributor: Accuray Incorporated Siemens AG Attention: Chief Financial Officer Henkestr. 127 1310 Chesapeake Terrace 91054 Erlangen Sunnyvale, CA 94089 Germany Facsimile: +1 (408) 789-4205 Attn: Healthcare General Counsel, Ritva Sotamaa with cc to: General Counsel Facsimile: + 49/### - ## - #### + + + + + +respect to the subject matter hereof, and supersedes all prior understandings, representations and warranties, written and oral. If any part of the terms and conditions stated herein are held void or unenforceable, such part will be treated 21 + + + + + + as severable, leaving valid the remainder of the terms and conditions. In case of any contradiction between this Agreement and the Strategic Alliance Agreement, the terms of this Agreement shall prevail. 12.18. Counterparts. This Agreement may be executed in counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument. SIGNATURE PAGE FOLLOWS 22 + + + + + + IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the Effective Date by their duly authorized representatives. The parties acknowledge and agree that this Agreement does not become effective until it has been signed by all parties indicated below. + + SIGNATURE PAGE TO MULTIPLE LINAC AND MULTI-MODALITY DISTRIBUTOR AGREEMENT + +DISTRIBUTOR: ACCURAY INCORPORATED: By: /s/ Christian Klaussner By: /s/ Euan Thompson Print name: Christian Klaussner Print name: Euan Thomson Title: HIM OCS CFO Title: President and Chief Executive Officer Date: June 8, 2010 Date: June 7, 2010 By: /s/ Holger Schmidt By: /s/ Darren Milliken Print name: Holger Schmidt Print name: Darren Milliken Title: HIM OCS CEO Title: Senior Vice President and General Counsel Date: June 8, 2010 Date: June 7, 2010 + + + + + + SCHEDULE 2.3.2 ACCEPTANCE PROCESS · Accuray shall have 5 Business Days from date of the submission of a proposed Multiple LINAC Purchase or Multi-Modality Purchases by Siemens in which to either give or withhold approval of such purchase, with any failure to approve or disapprove of such purchase in such period constituting disapproval; · Such approval may be given by either Accuray's applicable General Regional Manager or a corporate representative of Accuray, expressly designated with such approval authority in writing by Accuray to Siemens; · Siemens' shall provide any information concerning such proposed purchase and the proposed purchaser as is reasonably requested by Accuray; · Such approval of any such proposed purchase must not be unreasonably withheld or delayed; · In determining whether to grant such approval, Accuray may consider, at a minimum: · Existing exclusivity arrangements between Accuray and Third Parties; · Prior and current contact with the proposed purchaser by either Party; · Other commercial relationships that either Party may have with the proposed purchaser; · Bona fide concerns about the suitability of the proposed purchaser; and · Whether Accuray or any of its distributors have obtained any required regulatory clearances and/or import licenses required in connection with the proposed purchase. + + + + + + EXHIBIT A DISTRIBUTOR DISCOUNTS ON PRODUCTS AND SERVICES + + + +* Siemens distributor channel discount. Siemens Bundled Sales Price= (List Price (1- (Volume Discount + Distributor Discount)) + + EXHIBIT B SIEMENS CODE OF CONDUCT SIEMENS Code of Conduct for Siemens Suppliers This Code of Conduct defines the basic requirements placed on Siemens' suppliers of goods and services concerning their responsibilities towards their stakeholders and the environment. Siemens reserves the right to reasonably change the requirements of this Code of Conduct due to changes of the Siemens Compliance Program. In such event Siemens expects the supplier to accept such reasonable changes. The supplier declares herewith: · Legal compliance · to comply with the laws of the applicable legal system(s). · Prohibition of corruption and bribery · to tolerate no form of and not to engage in any form of corruption or bribery, including any payment or other form of benefit conferred on any government official for the purpose of influencing decision making in violation of law. · Respect for the basic human rights of employees · to promote equal opportunities for and treatment of its employees irrespective of skin color, race, nationality, social background, disabilities, sexual orientation, political or religious conviction, sex or age; · to respect the personal dignity, privacy and rights of each individual; · to refuse to employ or make anyone work against his will; · to refuse to tolerate any unacceptable treatment of employees, such as mental cruelty, sexual harassment or discrimination; · to prohibit behavior including gestures, language and physical contact, that is sexual, coercive, threatening, abusive or exploitative; · to provide fair remuneration and to guarantee the applicable national statutory minimum wage; · to comply with the maximum number of working hours laid down in the applicable laws; · to recognize, as far as legally possible, the right of free association of employees and to neither favor nor discriminate against members of employee organizations or trade unions. · Prohibition of child labor · to employ no workers under the age of 15 or, in those countries subject to the developing country exception of the ILO Convention 138, to employ no workers under the age of 14. · Health and safety of employees · to take responsibility for the health and safety of its employees; · to control hazards and take the best reasonably possible precautionary measures against accidents and occupational diseases; · to provide training and ensure that employees are educated in health and safety issues; · to set up or use a reasonable occupational health & safety management system(1) + +Discount Type + +List Price Range USD Volume Discount Distributor Discount* Volume Discounts - Tier # 1 {*****} {*****} {*****} Volume Discounts - Tier # 2 {*****} {*****} {*****} Volume Discounts - Tier # 3 {*****} {*****} {*****} Volume Discounts - Tier # 4 {*****} {*****} {*****} Volume Discounts - Tier # 5 {*****} {*****} {*****} Volume Discounts - Tier # 6 {*****} {*****} {*****} Volume Discounts - Tier # 7 {*****} {*****} {*****} Volume Discounts - Tier # 8 {*****} {*****} {*****} Volume Discounts - Tier # 9 {*****} {*****} {*****} Volume Discounts - Tier # 10 {*****} {*****} {*****} Volume Discounts - Tier # 11 {*****} {*****} {*****} Volume Discounts - Tier # 12 {*****} {*****} {*****} + + + + + + · Environmental protection · to act in accordance with the applicable statutory and international standards regarding environmental protection; · to minimize environmental pollution and make continuous improvements in environmental protection; · to set up or use a reasonable environmental management system(1) · Supply chain · to use reasonable efforts to promote among its suppliers compliance with this Code of Conduct; · to comply with the principles of non discrimination with regard to supplier selection and treatment. + +(1) For further information see www.siemens.com/procurement/cr/code-of-conduct + + EXHIBIT C SIEMENS QUALITY ASSURANCE AGREEMENT Please see attached. + + SIEMENS For internal use only Copyright © Siemens AG 2002. All rights reserved. Quality Requirement Med Identification of Products and basic requirements for packaging Requirements for Suppliers QR Med 1 A1 Siemens Medical Solutions and affiliated Companies Issued by Med Quality Management & Regulatory Affairs Released 2007-09-28 by the Med Quality Steering Board (QSB) Valid from 2007-11-01 04798372 AND 02S 04 1 + + + + + + + + + + 2 + +Contents + + 1 Purpose and scope 3 2 Definitions and abbreviations 3 2.1 Material No. 3 2.2 Revision 3 2.3 Serial No. 3 2.4 Data Identifier 3 2.5 Expiration date 4 2.6 Batch 4 2.7 Shelf life 4 3 Reference documents 4 4 Requirements 4 4.1 Identification of parts, components and systems 4 4.2 Labeling of parts, components, systems and its packaging 4 4.3 Spacing 6 5 Basic requirements for packaging 7 6 Literature 7 7 Transition and retrospective measures 7 8 Changes to prior version 7 9 Attachments 7 + +Author: + +Gabriele Franz AX QP Reviewer: + +Volker Glahn QM&RA Philippe Hoxter CSQ + + + + + + 1 Purpose and scope For Siemens Medical Solutions it is a basic requirement that any part, component or system is identified the same way worldwide. This document lists the minimum requirements for suppliers of Siemens Medical Solutions describing · how parts, components and systems are identified with their attributes and · how attributes are labeled both as plain text as well as barcode on products and its packaging. Detailed specifications with regards to the labeling of products are defined for the individual product concerned. 2 Definitions and abbreviations 2.1 Material No. The Siemens Medical Solutions Material No. is used to uniquely identify products (parts, components and systems). It consists of an 8-digit identification no. assigned by Siemens Medical Solutions. Previously, the term "Part no." was also used; it is replaced by the term "Material No.". 2.2 Revision The Revision (abbreviated "Rev.") serves to distinguish between different update statuses of hardware. It is assigned by Siemens Medical Solutions. The English term "Revision" replaces the German term "Erzeugnisstand" (abbreviated "ES") and "Ausführungsstand" (abbreviated "AS"). 2.3 Serial No. The Serial No. is an identifying attribute used to uniquely identify hardware or software with the same Material No. . For suppliers the Serial No. can consist of up to 15 alphanumeric digits; it is however recommended to use only a 6 digit numerical Serial No. where possible. The Serial No. may contain a dash (-) or a slash (/), but no other special characters (e.g. # + * ?). Spaces, lower-case letters or language-specific characters (e.g. Ä, Ö, Ü) are not allowed within the Serial No. . The characters "L", "SxxL" or "Sxx" at the end or the beginning of the Serial No. should be avoided (xx = any alphanumerical character). For any Serial No. that is numeric only (i.e. has no letters) it is allowed to omit printing of leading zeros („0"). It is recommended to use the Serial No. of the supplier if it complies with the principles described above. 2.4 Data Identifier Data Identifiers are used in the barcode to indicate that the information following the Data Identifier is data of a certain attribute. The Data Identifier enables the barcode reading program to recognize that the following information represents a certain type of attribute. Data Identifiers to be used: + + 3 + +1P Material No. 2P Revision (for packaging only) S Serial No. Q Quantity (for packaging only) 14D Expiration date (for packaging only) T Batch (for packaging only) + + + + + + 2.5 Expiration date The format of the expiration date shall be definite and specified as follows: YYYYMMDD 2.6 Batch The batch is an alphanumeric ident number with 10 digits, used to identify parts manufactured or shipped together. Is no batch provided on the packing but required, a batch is initiated in the stock. 2.7 Shelf life If a shelf life is defined for parts the shelf life has to be filed in calendar days. (365 days per year) 3 Reference documents n.a. 4 Requirements 4.1 Identification of parts, components and systems Non-serialized parts (including spare parts) and components are identified using a Material No. . If necessary, different statuses of a part, component or system can be distinguished via the Revision. Serialized parts, components and systems are identified using the combination of Material No. and Serial No. . In addition, the Revision may be used to distinguish between different statuses of hardware. 4.2 Labeling of parts, components, systems and its packaging In general, requirements with respect to labeling have to be defined for the product concerned. However, minimum requirements are specified in order to allow proper identification throughout all processes involved. This chapter lists those minimum requirements. For all material numbers specified by Siemens the parts and its packaging have to be labeled according to the requirements listed below. The label depends on whether a part/component/system · is serialized · contains a revision level · is classified as an IVK ("Installed Volume Component") · shall be handled by expiration date or batch Siemens defines those requirements per individual Material No. . 4 + + + + + + + + 5 + +Color Usually white label with black printing other colors are allowed as long as barcode/plain text can be read Barcode content 1P S Additionally for packaging only 2P Q It is not allowed to label Revision and Quantity on product identification labels! e.g.: 1P01234567 as barcode *) (1P) Model No. 01234567 S1001 as barcode *) (S) Serial No. 1001 + + Each symbol structure with start and stop character including Data Identifier (e.g. "1P" or "S"), but without symbol check character. No space allowed between Data Identifier and attribute. It is not allowed to print any other information in the barcode fields described above. Barcode type Code 39 according to ISO/IEC 16388 Narrow element (bar or space) Min. 0,17 mm Ratio of wide element to narrow element Min. 2,25 : 1 Barcode height Min. 2 mm, typical 4mm Plain text (below barcode) (1P) Model No.: (S) Serial No.: Additionally for packaging only (2P) Revision: (Q) Quantity: It is not allowed to label Revision and Quantity on product identification labels! + + Data Identifier (e.g. "1P" or "S") in brackets in front of data element title (e.g. ''Model No." or "Serial No.") in plain text! e.g.: (1P) Model No.: 01234567 *) (1p) Model No. 01234567 (S) Serial No.: 1001 *) (S) Serial No. 1001 + + Note: Due to 21CFR1020.30 section e) the term "Model No." shall be used instead of the term "Material No." in plain text on all labels. + + + +It is not allowed to print any other information near the data fields described above. If any other information is printed, it must be printed in a manner so that it can't be misinterpreted as being part of the fields described above; this can be done by printing other information at the very right side of the label. Additionally for products only + + + +For IVKs or System IVKs, the text "IVK" or "SYSTEM IVK" shall be printed on the very right side of the label. It has to be ensured that this text can't be misinterpreted as being part of the Serial No. ; this can be done by printing this text on a different level. [Siemens Medical Solutions decides and specifies whether a product is an IVK or System IVK.] + + + + + + + + + +Additionally for packing only The Expiration date of parts with Shelf life is fixed below the quantity as following: Expiration date: YYYYMMDD + + For parts which require a Batch, the batch is fixed below the Expiration date as following: AAAAAAAAAA For a transition period the batch can also be fixed above the material number Font Universe, if not possible use similar font (e.g. Helvetica) + +*) In case of limited space, it is possible to print the bar code next to (and not under) the clear text. 4.3 Spacing Minimum distances are: + + + + + + 5) Expiration date and 6) Batch can be printed in barcode additionally. + +(A) Horizontal distance from edge (quiet zone) >5 mm (B) Vertical distance from edge >2 mm (C) Vertical distance between printing areas >1 mm + +Legend: a) printing area for barcode b) printing area for plain text + +For a transition period the batch can also be fixed above the material number 6 + + + + + + 5 Basic requirements for packaging Especially for spare parts appropriate packaging are required for the global shipping process. Should those packaging contain wood, generally "non wood-packaging" according IPPC (International Plant Protection Convention) shall be used, but fumigation of such packaging is not allowed. Packaging shall be designed in a suitable way to protect the packed good against transportation load according to IEC 60721-3-2 class's 2M2/2K4 International pictograms following the IEC 60601 series shall be used for parts which fall under specific restrictions for transport or storage. The specification of packaging especially for spare parts is within the responsibility of the Business Unit responsible for the product. 6 Literature ISO/IEC 16388 "Information technology — Automatic identification and data capture techniques — Bar code symbology specifications — Code 39". IEC 60721-3-2 Classification of environmental conditions — Part 3: Classification of groups of environmental parameters and their severities — Section 2: Transportation 7 Transition and retrospective measures n.a. 8 Changes to prior version CR-No.: 2007-005 Changes to previous edition 04798372 AND 02S 03: · Chapter 2: Reference document IEC 60721-3-2 added · Chapter 5: Design of packaging changed CR-No. 2006-008 (CR N06/0207) Changes to previous edition 04798372 AND 02S 02: · Title: Added: and basic requirements for packaging · Chapter 3.4 Data Identifier for Expiration Date and Batch added · Chapter 3.5 — 3.7: Completely new · Chapter 4.2 Added: Expiration date and batch · Chapter 4.3. Added: labeling of Expiration Date and Batch, · Chapter 5: Completely new CR-No. 2006-01, 2006-02 Changes to previous edition 4798372 AND 02S 01: · Chapter 2, 4.2 : EN 800 replaced by ISO/IEC 16388 · Chapter 4.2 : general requirements at the beginning stated more clearly, footnote added 9 Attachments n.a. 7 \ No newline at end of file diff --git a/full_contract_txt/ADAMSGOLFINC_03_21_2005-EX-10.17-ENDORSEMENT AGREEMENT.txt b/full_contract_txt/ADAMSGOLFINC_03_21_2005-EX-10.17-ENDORSEMENT AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..99c707981d2ab62dad1a9517b31a99d05ee77eac --- /dev/null +++ b/full_contract_txt/ADAMSGOLFINC_03_21_2005-EX-10.17-ENDORSEMENT AGREEMENT.txt @@ -0,0 +1,305 @@ +REDACTED COPY + +CONFIDENTIAL TREATMENT REQUESTED + +CONFIDENTIAL PORTIONS OF THIS + +DOCUMENT HAVE BEEN REDACTED + +AND HAVE BEEN SEPARATELY + +FILED WITH THE COMMISSION + + 1 + + + + + +ENDORSEMENT AGREEMENT + +This Agreement is entered into on January 13, 2005 between professional golfer, TOM WATSON, (hereinafter referred to as "CONSULTANT") and ADAMS GOLF, LTD. (hereinafter referred to as "ADAMS GOLF"). + +WITNESSETH + +WHEREAS, ADAMS GOLF desires to obtain the right to use the name, likeness and ENDORSEMENT of CONSULTANT in connection with the advertisement and promotion of ADAMS GOLF'S PRODUCT; + +NOW THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows: + +CONTRACT PERIOD + +1. TERM OF CONTRACT + +The Term of this Agreement shall be for a period of [* ****] years and [*****] months commencing the 1st day of September 2004 and terminating the [*****] day of [*****]. + +2. DEFINITIONS + +As used in this Agreement, the following terms shall be defined as set forth below: + + A. CONSULTANT'S "ENDORSEMENT" means the right to use the CONSULTANT'S name, fame, nickname, autograph, voice, facsimile, signature, photograph, likeness, and image in connection with the marketing, advertising, promotion and sale of ADAMS GOLF'S PRODUCT. + +B."PRODUCT" shall mean all golf clubs including, but not limited to, metal woods, drivers, fairway woods, irons, iron- woods, utility clubs, wedges, and putters, bags, and headwear. C."MANDATORY PRODUCTS" shall mean the following ADAMS GOLF PRODUCTS that CONSULTANT must exclusively play/use in all Champions/Senior Professional Golf Association (SPGA) and Professional Golf Association (PGA) events at all times: + +[***** ] Confidential Material redacted and filed separately with the Commission. 2 + + + + + + 1.[*****] 2.Sufficient [*****] to maintain total minimum of [*****] ADAMS GOLF [*****] (includes [*****])[*****] at all times 3.[*****] 4.[*****] (CONSULTANT may continue to place the [*****] logo on the [*****] consistent with historical practice.) + +D. "CONTRACT TERRITORY" shall mean the entire world. + +CONSULTANT'S OBLIGATIONS + +3. CONSULTANT'S ENDORSEMENT + +CONSULTANT hereby gives and grants to ADAMS GOLF the exclusive right and license to use CONSULTANT'S ENDORSEMENT in connection with the manufacture, sale, distribution, advertising and promotion of PRODUCT in the CONTRACT TERRITORY. 4. EXCLUSIVITY OF ENDORSEMENT During the term of this Agreement, unless otherwise authorized at the sole discretion of ADAMS GOLF in writing, CONSULTANT shall not: A.give the right to use or permit the use of CONSULTANT'S name, facsimile signature, nickname, voice or likeness to any other manufacturer or seller of PRODUCT; + +B.sponsor or endorse PRODUCT made or sold by any other manufacturer or seller; or + +C.serve as a CONSULTANT or advisor of any other manufacturer or seller of PRODUCT. + +D.Notwithstanding paragraphs 4A, 4B and 4C above, CONSULTANT shall be entitled to endorse and play the [*****]. The parties expressly agree that CONSULTANT may permit [*****] the use of CONSULTANT'S name and/or likeness in [*****] print and/or television advertisement provided that this is executed in a manner consistent with [*****] past [*****] advertising practice using similarly situated professional golfers with competing golf club endorsement agreements that include [*****]. If [*****] use of CONSULTANT varies from past practice of utilizing similarly situated professionals, CONSULTANT will take action to remedy the situation [*****]. If CONSULTANT participates directly in any [*****] sponsored photo shoots for advertising or PR, CONSULTANT shall wear his ADAMS GOLF [*****]. The parties further expressly agree that CONSULTANT'S endorsement of the [*****] shall not include the right to place a [*****] logo on his ADAMS GOLF [*****] or the ADAMS GOLF [*****]. If CONSULTANT'S relationship with [*****] terminates during this Agreement, CONSULTANT shall be permitted to replace the [*****] endorsement with another [*****] endorsement under the same terms and conditions expressed herein. + +[***** ] Confidential Material redacted and filed separately with the Commission. 3 + + + + + + E.Notwithstanding paragraphs 4A, 4B and 4C above, CONSULTANT shall not be required to wear ADAMS GOLF [*****] in [*****] ads. + +5. EXCLUSIVE USE OF PRODUCT + +During the term of this Agreement, CONSULTANT shall exclusively play/use the MANDATORY PRODUCT. (It is expressly understood by the parties that CONSULTANT may play [* ****] clubs in the bag other than ADAMS GOLF clubs including, but not limited to, a putter by a manufacturer other than ADAMS GOLF but may not endorse those clubs and/or putter.) + +6. CONSULTANT'S ENDORSEMENT OF NON-COMPETITIVE PRODUCT + +If CONSULTANT endorses or promotes a non-competitive product and in that endorsement or promotion CONSULTANT wears, plays, uses, holds or is in any way associated with a product that would constitute PRODUCT as defined under this Agreement, CONSULTANT shall use objectively reasonable best efforts to ensure that PRODUCT is an ADAMS GOLF PRODUCT and it shall not be altered or changed in appearance in the endorsement in any manner whatsoever without the express written consent of ADAMS GOLF. When endorsing a non-competitive product, under no circumstances shall CONSULTANT wear, play, use, hold or in any way be associated with an ADAMS GOLF competitor's Product. + +7. CONSULTANT'S SATISFACTION OF MANDATORY PRODUCT + +It is particularly and expressly understood and agreed that if CONSULTANT shall find in his sincere best reasonable judgment that the MANDATORY PRODUCT so supplied is not suitable for his use in tournament competition, then he shall promptly notify ADAMS GOLF in writing of such fact and the reasons therefor. Thereafter, ADAMS GOLF shall have a period of thirty (30) days to either, at ADAMS GOLF'S sole discretion, supply CONSULTANT with MANDATORY PRODUCT that is acceptable to him or terminate the agreement. It is agreed that if the contract is terminated pursuant to this paragraph, the compensation due CONSULTANT shall be prorated from the date this Agreement is terminated. Proration of compensation shall be determined on the same repayment schedule as provide in paragraph 8A below. + +[***** ] Confidential Material redacted and filed separately with the Commission. 4 + + + + + + 8. MINIMUM NUMBER OF TOURNAMENTS AND POTENTIAL REPAYMENT OF BASE COMPENSATION + + A. In each and every calendar year of this Agreement, CONSULTANT shall achieve a satisfactory record of play in a minimum of [* ****] professional golf association events on the SPGA and/or PGA tour (which shall include both the PGA and SPGA Tour Skins Games). If for any reason, CONSULTANT should achieve a satisfactory record of play in less than [*****] SPGA and/or PGA tour events in a calendar year, he shall repay ADAMS GOLF an amount per event for each event under [*****] achieved in the given calendar year as follows: + +The agreed upon repayment amount per event per calendar year: + +1. Year 1. $[*****] 2. Year 2 $[*****] 3. Year 3 $[*****] 4. Year 4 $[*****] 5. Year 5 $[*****] + +B.Payment shall be made to ADAMS GOLF within one month following the end of the calendar year. For example, if in the calendar year 2005 CONSULTANT achieves a satisfactory record of play in [*****] events, he shall repay ADAMS GOLF [*****] dollars no later than January 31, 2006. + +C.In the event that CONSULTANT is prevented from competing for reasons outside his control, the parties agree to a good faith attempt to resolve the issues. If a resolution can not be reached, ADAMS GOLF may, at its sole discretion, demand prorated repayment pursuant to the repayment schedule in paragraph 8A above. + +9. PRODUCT DESIGN During the term of this Agreement, CONSULTANT shall use best efforts to cooperate with ADAMS GOLF in giving advice, suggestions and recommendations concerning the acceptability and playability of current ADAMS GOLF lines, the development of new ADAMS GOLF lines, and information about significant golf PRODUCT and golf market trends, and meet as reasonably requested with ADAMS GOLF'S Design/Testing Teams. 10. PROMOTION OF PRODUCT + + During the term of this Agreement, CONSULTANT shall use best efforts to wear the headwear and display ADAMS GOLF'S brand name and to demonstrate, discuss and emphasize the newest features of ADAMS GOLF PRODUCT at every opportunity including but not limited to all Senior PGA tour events and promotional and advertising events in which CONSULTANT takes part. + +[***** ] Confidential Material redacted and filed separately with the Commission. 5 + + + + + + 11. PROMOTIONAL APPEARANCES + +A.During the term of this Agreement, CONSULTANT shall use best efforts to be available for such press interviews, radio or TV appearances arranged for CONSULTANT by ADAMS GOLF which are compatible with CONSULTANT'S own practice, play and personal time requirements. CONSULTANT will be required to be available after a tournament for selected interviews, either the Sunday afternoon or Monday morning following the tournament. In all such interviews and appearances, CONSULTANT will use his best efforts to make reference to the ADAMS GOLF PRODUCT and wear [*****] and display ADAMS GOLF'S brand name. + +B.During the term of this Agreement, CONSULTANT shall make himself available on not more than [*****] days for television and radio commercials, photo shoots, modeling and promotional appearances compatible with CONSULTANT'S own practice, play and personal time requirements. Said activities shall be directly related to the promotion of ADAMS GOLF PRODUCT. ADAMS GOLF shall reimburse CONSULTANT for reasonable travel expenses for CONSULTANT when making special appearances for ADAMS GOLF pursuant to this paragraph but ADAMS GOLF shall not pay CONSULTANT session fees, residual payments or the like for television appearances. Travel expenses shall include jet fuel or first-class round-trip airfare and lodging, meals and local transportation. + +12. BEHAVIOR + +During the term of this Agreement, CONSULTANT will conduct himself at all times with due regard to public morals and conventions. If the value of CONSULTANT'S ENDORSEMENT is materially reduced or impaired because CONSULTANT: + +A.committed or shall commit any public act that involves moral turpitude, B.commits or violates any material foreign, U.S., federal, or other applicable state or local law, C.commits any act which brings him into public disrepute, contempt, scandal or ridicule, or which insults or offends the community, D.makes any statements in derogation, in any material respect, of ADAMS GOLF or any of its affiliates or any of their respective PRODUCT or services and such statement is made to the general public or becomes a matter of public knowledge, + +then at any time after the occurrence of such act, thing or statement, ADAMS GOLF shall have the right, in addition to its other legal and equitable remedies, to immediately terminate this Agreement, by giving written notice to CONSULTANT. ADAMS GOLF must exercise its right of termination within ninety (90) days of its senior management becoming aware of the conduct giving rise to the right of termination. + +[***** ] Confidential Material redacted and filed separately with the Commission. 6 + + + + + + 13. FREEDOM TO CONTRACT + +CONSULTANT represents and warrants that CONSULTANT is free of all prior undertakings and obligations which would prevent or tend to impair either the full performance of CONSULTANT'S obligations hereunder or ADAMS GOLF'S full enjoyment of the rights and privileges granted to it by CONSULTANT. + +14. INDEMNITY + +CONSULTANT agrees to protect, indemnify and hold ADAMS GOLF harmless from any and all liability, claims, causes of action, suits, damages and expenses (including reasonable attorneys' fees and expenses) for which it becomes liable or is compelled to pay by reason of a breach of any covenant or representation by CONSULTANT in this Agreement. + +15. ABSENCE OF AGENCY + +CONSULTANT shall not and will not have the right or authority to bind ADAMS GOLF by any representation or in any other respect whatsoever or to incur any obligation or liability in the name of or on behalf of ADAMS GOLF. + +16. MEMBERSHIPS + +CONSULTANT warrants and represents that during the term of this Agreement he is a member in good standing of SAG, AFTRA or any other organization having jurisdiction over CONSULTANT'S services hereunder. This Agreement is subject to all of the terms and conditions of the collective bargaining agreements with SAG, AFTRA, or any other union agreements or codes having jurisdiction over CONSULTANT'S services hereunder. Any and all payments required to be made to SAG or AFTRA or any other organization having jurisdiction over CONSULTANT'S services hereunder, shall be the sole responsibility of CONSULTANT. + +ADAMS GOLF'S OBLIGATIONS + +17. SUPPLY OF PRODUCT + +A. During the term of this Agreement, ADAMS GOLF shall provide CONSULTANT with sufficient quantities of such MANDATORY PRODUCTS for CONSULTANT'S use as CONSULTANT may reasonably need to fulfill his obligations under this agreement. ADAMS GOLF shall pay all charges in connection with the delivery of MANDATORY PRODUCTS to CONSULTANT. + +B.In addition to paragraph 17A above, ADAMS GOLF shall provide CONSULTANT with [*****] sets of clubs for CONSULTANT'S family and friends each calendar year of this Agreement. + +[***** ] Confidential Material redacted and filed separately with the Commission. 7 + + + + + + 18. BASE COMPENSATION + +For the entire term of this Agreement, from September 1, 2004 through [*****] ADAMS GOLF shall pay CONSULTANT a base compensation of [*****] dollars. The base compensation shall be paid [*****]. + +19. PERFORMANCE BONUSES AND TOTAL COMPENSATION LIMITATION + + A. In addition to his base compensation, CONSULTANT shall also be entitled to bonuses based on performance in particular PGA and SPGA events and year-end standing as follows: + + 1. If CONSULTANT wins a PGA Tour Major (consisting of the Masters, US Open, PGA and British Open) or the Champion's Tour (SPGA) US Open, CONSULTANT shall receive a bonus of $ [*****]. + + 2. If CONSULTANT wins a Champions/Seniors Tour (SPGA) major other than the US Open (which shall for the purposes of this agreement consist of the Senior PGA, Senior British, the Tradition and the Ford Seniors) CONSULTANT shall receive a bonus of $ [*****]. + +3. If CONSULTANT finishes in the top [*****] on the official year end money list of the Champion's Tour (SPGA), CONSULTANT shall also be entitled to a year end performance bonus according to the following schedule: + +a.2005 $ [*****] b.2006$ [*****] c.2007$ [*****] d.2008$ [*****] e.2009$ [*****] + +B.Notwithstanding paragraph A and its subparts above, the maximum total annual bonuses shall in no case exceed the following schedule: + +1.2005 $ [*****] 2.2006$ [*****] 3.2007$ [*****] 4.2008$ [*****] 5.2009$ [*****] + +(For example, if in the calendar year [*****]CONSULTANT wins every PGA tour major and finishes in the top [*****] on the official year end money list of the Champion's Tour (SPGA), CONSULTANT'S total bonuses shall be [*****] dollars. + +[***** ] Confidential Material redacted and filed separately with the Commission. 8 + + + + + + C. In the event of ADAMS GOLF'S insolvency or bankruptcy, it is expressly agreed to by the parties that CONSULTANT shall not be obligated to repay any money so long as CONSULTANT continues to fully perform his obligations under this Agreement. 20. APPROVAL OF ADVERTISING + +Prior to publishing or placing any advertising or promotional material which uses CONSULTANT'S name, facsimile signature, nickname, voice or likeness, ADAMS GOLF shall submit the same to CONSULTANT, or CONSULTANT'S designee, for approval, which approval shall not be unreasonably withheld or delayed. If CONSULTANT disapproves, the reasons therefore shall be given to ADAMS GOLF in writing within three (3) business days or shall be deemed approved. ADAMS GOLF agrees to protect, indemnify and hold CONSULTANT harmless from and against any and all expenses, damages, claims, suits, actions, judgments and costs whatsoever, arising out of, or in any way connected with, any advertising material furnished by, or on behalf of, the company. + +21. INDEMNITY + + ADAMS GOLF agrees to defend, indemnify and hold harmless CONSULTANT from any and all liability, claims, causes of action, suits, damages and expenses (including reasonable attorneys' fees and expenses) for which he becomes liable or is compelled to pay by reason of or arising out of any claim or action for personal injury, death or otherwise involving alleged defects in ADAMS GOLF'S PRODUCT, provided that ADAMS GOLF is promptly given notice in writing and is given complete authority and information required for the defense, and ADAMS GOLF shall pay all damages or costs awarded therein against CONSULTANT and any other cost incurred by CONSULTANT in defense of any suit, but shall not be responsible for any cost, expense or compromise incurred or made by CONSULTANT without ADAMS GOLF'S prior written consent. + +TERMINATION + +22. FAILURE TO PLAY + +Notwithstanding any other paragraph of this Agreement, in the event that CONSULTANT dies or is unable to play tour golf at all, ADAMS GOLF may terminate this Agreement on thirty (30) days' written notice. Upon such termination, CONSULTANT and/or CONSULTANT'S estate shall be required to repay ADAMS GOLF for that period of the Agreement not performed by CONSULTANT. The repayment amount shall be calculated in the same way as repayment is calculated under paragraph 8A. 9 + + + + + + 23. TERMINATION FOR CAUSE + +Notwithstanding any other paragraph of this Agreement, if either party commits any material breach of this Agreement, the other party may terminate for cause upon giving fifteen (15) days written notice of such cause and provided the breach is not rectified within such fifteen (15) day period. Upon such termination, CONSULTANT shall be required to repay ADAMS GOLF for that period of the Agreement not performed by CONSULTANT. The repayment amount shall be calculated in the same way as repayment is calculated under paragraph 8A. + +24. ADAMS GOLF'S RIGHTS UPON TERMINATION + +A.In the event of termination of this Agreement, ADAMS GOLF shall cease using the name and/or likeness of CONSULTANT in advertising within [*****] days. + +B.In the event of termination of this Agreement, ADAMS GOLF shall cease using the name and/or likeness of CONSULTANT on Product within [*****] months after termination of this Agreement. + +MISCELLANEOUS PROVISIONS + +24. SIGNIFICANCE OF HEADINGS + +Section headings contained herein are solely for the purpose of aiding in speedy location of subject matter and are not in any sense to be given weight in the construction of this Agreement. Accordingly, in case of any question with respect to the construction of this Agreement, it is to be construed as though such section headings had been omitted. + +25. APPLICABLE LAW + +This Agreement shall be governed and construed according to the laws of the State of Kansas. + +26. ENTIRE AGREEMENT + +The provisions of this Agreement are intended by the parties as a complete, conclusive and final expression of their agreement concerning the subject matter hereof, which Agreement supersedes all prior agreements concerning the subject matter, and no other statement, representation, agreement or understanding, oral or written, made prior to or at the execution hereof, shall vary or modify the written terms hereof. No amendments, modifications or releases from any provision hereof shall be effective unless in writing and signed by both parties. + +27. WAIVER + +Unless otherwise mutually agreed in writing, no departure from, waiver of, or omission to require compliance with any of the terms hereof by either party shall be deemed to authorize any prior or subsequent departure or waiver, or obligate either party to continue any departure or waiver. + +[***** ] Confidential Material redacted and filed separately with the Commission. 10 + + + + + + 28. EXECUTION AND DELIVERY REQUIRED + +This instrument shall not be considered to be an agreement or contract nor shall it create any obligation whatsoever on the part of CONSULTANT or ADAMS GOLF unless and until it has been signed by CONSULTANT, or a duly authorized representative, and by duly authorized representatives of ADAMS GOLF and delivery has been made of a fully signed original to both parties. + +29. SEVERABILITY + +Any provision or part of this Agreement prohibited by applicable law shall be ineffective to the extent of such prohibition without invalidating the remaining provisions or parts hereof. + +30. RELATIONSHIP + +Both parties agree that this Agreement does not constitute and shall not be construed as a constituting of a partnership or joint venture between ADAMS GOLF and CONSULTANT. Neither party shall have any right to obligate or bind the other party in any manner whatsoever, and nothing herein contained shall give or is intended to give any rights of any kind to any third person. + +31. ASSIGNMENT AND CHANGE OF CONTROL + +Neither ADAMS GOLF nor CONSULTANT shall have the right to grant sublicenses hereunder or to assign, alienate or otherwise transfer any of its rights or obligations hereunder. + +32. CONFIDENTIALITY + +Both parties understand that the contents of this Agreement, including, but not limited to, all amounts paid or to be paid and any additional consideration, are extremely confidential, and that disclosure of same to any third party could be detrimental to the interests of one or both parties. Therefore, both parties agree not to disclose the terms of this Agreement, without the permission of the other party, to any third party other than to CONSULTANT'S business, legal and financial advisors, and with respect to all such advisors, CONSULTANT shall take all reasonable steps to ensure such confidentiality to ADAMS GOLF. Furthermore, CONSULTANT recognizes that during the course of performing his duties hereunder he may become aware of proprietary, confidential information concerning ADAMS GOLF, its PRODUCT, methods, processes, billing practices, financial condition, etc., or information ADAMS GOLF designates as confidential (collectively "Confidential Information"). CONSULTANT agrees that he will maintain in confidence and not disclose to any third party at any time any such Confidential Information and shall not use any such information to the detriment of ADAMS GOLF or for any purpose not contemplated by the Agreement. 11 + + + + + + 33. ARBITRATION + +In the event a dispute arises under this Agreement which cannot be resolved, such dispute shall be submitted to arbitration and resolved by a panel of three arbitrators (who shall be lawyers), in a decision required by a majority of the arbitrators. If the parties cannot agree upon the panel of three arbitrators, then each party may pick an arbitrator and the two chosen arbitrators shall choose upon the three-arbitrator panel. The arbitration shall be conducted in accordance with the Arbitration Rules of the American Arbitration Association. Venue shall be Kansas. The award or decision rendered by the arbitration panel shall be final, binding and conclusive and judgment may be entered upon such award by any court of competent jurisdiction. + +34. NOTICE + +Every written notice or written report which may be served upon CONSULTANT, according to the terms of this Agreement, may be served by enclosing it in a postpaid envelope addressed to: + +Mr. Tom Watson C/O Assured Management Company 1901 W. 47th Place, Suite 200 Westwood, Kansas 66205 + +or at such other address as is given in writing to ADAMS GOLF by CONSULTANT. + +Every written notice which may be served upon ADAMS GOLF, according to the terms of this Agreement, shall be served by enclosing it in a postpaid envelope addressed to: + +Attention Legal Department ADAMS GOLF, LTD. 2801 East Plano Parkway Plano, Texas 75074 + +or at such other address as is given in writing by ADAMS GOLF to CONSULTANT. + +12 + + + + + + IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first set forth above. + + APPROVED FOR CONSULTANT By: /s/ Tom Watson Date: January 13, 2005 + +Tom Watson + + + + APPROVED FOR ADAMS GOLF, LTD. By: /s/ Oliver G. "Chip" Brewer III Date: January 13, 2005 + +Oliver G. ("Chip") Brewer III + + CEO, ADAMS GOLF + + 13 \ No newline at end of file diff --git a/full_contract_txt/ADAPTIMMUNETHERAPEUTICSPLC_04_06_2017-EX-10.11-STRATEGIC ALLIANCE AGREEMENT.txt b/full_contract_txt/ADAPTIMMUNETHERAPEUTICSPLC_04_06_2017-EX-10.11-STRATEGIC ALLIANCE AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..2d844e3700323ebafda619ea5d819b48176b8988 --- /dev/null +++ b/full_contract_txt/ADAPTIMMUNETHERAPEUTICSPLC_04_06_2017-EX-10.11-STRATEGIC ALLIANCE AGREEMENT.txt @@ -0,0 +1,819 @@ +Exhibit 10.11 ***Certain portions of this exhibit have been omitted based on a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. The omitted portions have been filed separately with the Securities and Exchange Commission. STRATEGIC ALLIANCE AGREEMENT This Strategic Collaboration Agreement ("Agreement"), effective as of the 23rd day of September, 2016 ("Effective Date"), is entered into by and between The University of Texas M. D. Anderson Cancer Center, with a place of business located at 1515 Holcombe Blvd., Houston, TX 77030, USA ("MD Anderson"), a member institution of The University of Texas System ("System") and Adaptimmune LLC, with a place of business located at 2001 Market Street, Philadelphia, PA 1903, USA ("Adaptimmune"); and Adaptimmune Limited, with a place of business at 101 Milton Park, Abingdon, Oxfordshire, OX14 4RY ("Adaptimmune Limited") (MD Anderson and Adaptimmune each a "Party" and collectively the "Parties"). WITNESSETH Whereas Adaptimmune and Adaptimmune Limited are biotechnology companies involved in the field of research, development and marketing of pharmaceutical products and therapies, including the sponsorship of clinical trials. Whereas MD Anderson is a comprehensive cancer research, treatment, and prevention center, with scientists and technicians in substantive fields relating to cancer research. Whereas the Parties hereby wish to establish a strategic alliance, as further described herein, ("Alliance") whereby Adaptimmune will provide funding and in-kind support for: (a) one or more preclinical studies ("Pre-clinical Studies"); and (b) one or more clinical and related correlative studies ("Clinical Studies") to be conducted by MD Anderson pursuant to this Agreement (each such Clinical Study or Pre-clinical Study, a "Study," and all such Clinical Studies and Pre-clinical Studies, the "Studies."). Now therefore, in consideration of the premises and the mutual covenants and conditions hereinafter recited, the Parties do hereby agree as follows: 1. Subject and Scope of Agreement 1.1 The initial scope of the Alliance will consist of the Studies described in Exhibit I, the details of which are to be mutually agreed upon by the JSC from time to time in accordance with Sections 1.5 - 1.8 below). The Studies and/or the scope of the Alliance may be replaced and/or changed as agreed upon by the JSC. Adaptimmune shall have responsibility for IND filing and monitoring unless otherwise agreed by JSC. The Alliance Funding (defined in Section 1.3 below) will cover enrollment of a minimum of *** Clinical Study subjects into Clinical Studies (with Clinical Studies in this context excluding any screening Study or long term follow-up Study) ("Minimum Patient Numbers"). MD Anderson represents and undertakes that (a) *** and (b) that the *** (together (a) and (b) being the ***): 1.2 Adaptimmune shall be the sponsor of any Clinical Study. MDACC shall be responsible for the conduct of each Study in accordance with the relevant protocol and/or workscope. The Agreement shall govern the performance of Studies by MD Anderson and one or more Principal Investigator(s) on basis of + +*** Portions of this page have been omitted pursuant to a request for Confidential Treatment and filed separately with the Commission. 1 + + + + + + Study specific documents ("Study Orders") as agreed upon by the Parties. This Agreement shall apply to all Studies set out in the Study Orders performed by MD Anderson and the MD Anderson principal investigator(s) responsible for the performance of such Studies ("Principal Investigator(s)") upon execution of Study Orders during the term of this Agreement. Each Study Order shall be substantially in the form attached as Exhibit III to this Agreement and shall detail the specifics of the Study to be performed under such Study Order including, without limitation, (i) the detailed Protocol or workscope, (ii) the Principal Investigator and (iii) identify any project-specific resources or support provided by Adaptimmune. In the event of any conflict of terms of this Agreement and the terms of a Study Order, the terms of this Agreement shall govern, unless the Study Order specifically and expressly supersedes this Agreement with respect to a specific term, and then only with respect to the particular Study Order and specific term. If there is any discrepancy or conflict between the terms contained in a Protocol or workscope and this Agreement and/or the relevant Study Order, the terms of the Protocol or workscope shall govern and control with respect to clinical/scientific matters and the terms of the Agreement and/or the relevant Study Order in that order shall govern and control with respect to all other matters, e.g., legal and financial matters. 1.3 Adaptimmune agrees to commit funding in an amount of at least nineteen million six hundred and forty four thousand Dollars US ($19,644,000) for the performance of the Studies as set out in Exhibit I during the term ("Alliance Funding"). The JSC may allocate and/or re-allocate funds to Studies as necessary and agreed by JSC. The basic per patient estimate for Clinical Studies is as follows: for screening Clinical Studies: $***, for long term follow-up Clinical Studies: $*** and for other Clinical Studies: $***. If the Parties extend the term by mutual agreement as set forth herein, the Parties shall negotiate in good faith the amount of future Study funding commitments by Adaptimmune applicable to such extended term. In the event a Study is terminated early, then in relation to any funds allocated to such Study, the Parties shall promptly discuss and agree upon a replacement of that Study with a new study of similar scope that is of mutual scientific interest to the Parties and that is approved by the JSC, and that will be funded by the Alliance Funding. If there is any Alliance Funding at the expiration or termination of this Agreement, it will be allocated to studies, research or tests agreed by the JSC, and such Alliance Funding will be payable in accordance with agreed milestones relevant to such agreed studies, research or tests. The Parties understand that the compensation being paid to MD Anderson under this Agreement constitutes the fair market value of the services to be provided hereunder. Neither MD Anderson nor Principal Investigator shall seek or accept reimbursement from any third-party payor for any Study items or procedures supplied by or paid for by Adaptimmune under this Agreement. MD Anderson acknowledges that Adaptimmune may be obligated to disclose all payments made hereunder, including the provision of non-monetary items of value, as may be required under Applicable Law, including the Physician Payments Sunshine Act, passed as Section 6002 of the 2010 Patient Protection and Affordable Care Act and, to the extent required by Applicable Laws, agrees to keep and maintain relevant records of such and, upon Adaptimmune's reasonable request, provide such records to Adaptimmune to the extent such information is not already in Adaptimmune's possession, but only to the extent required for Adaptimmune to comply with its legally required reporting obligations. MD Anderson consents to such disclosure, to the extent such disclosure is required for Adaptimmune to comply with Applicable Laws. MD Anderson shall ensure that the Principal Investigator provides in a timely manner all such reasonable information to Adaptimmune necessary for Adaptimmune to comply with any disclosure requirements to the extent required by and in accordance with 21 C.F.R. Part 54, including but not limited to, any information required to be disclosed in connection with any financial relationship between Adaptimmune and the Principal Investigators and sub-investigators involved in the Study, as well as any immediate family members thereof. MD Anderson will ensure that Principal Investigator promptly updates any provided information if any relevant changes occur during the performance of any Study and for one year following completion of any Study. + +*** Portions of this page have been omitted pursuant to a request for Confidential Treatment and filed separately with the Commission. 2 + + + + + + No amounts paid under this Agreement are intended to be for, nor shall they be construed as, an offer or payment made in exchange for any explicit or implicit agreement to purchase, prescribe, recommend, or provide a favorable formulary status, for any Adaptimmune product or service. Any such compensation will be consistent with fair market value in arms-length transactions and will not be determined in a manner that takes into account the volume or value of any referrals or business otherwise generated between the Parties for which payment may be made in whole or in part under Medicare, Medicaid or other Federal health care programs. MD Anderson and Adaptimmune each confirm that in entering into this Agreement they have not accepted any bribes or illegal inducements to enter into this Agreement or to perform any Study and will not accept any bribe or illegal inducement or offer any bribe or illegal inducement in the performance of or for the performance of any Study whether during or after the termination or expiry of this Agreement. 1.4 The nineteen million six hundred and forty four thousand Dollars US ($19,644,000) for the Studies shall be due and payable to MD Anderson according to the schedule outlined in Table 2 in Exhibit II. The JSC retains the right to prioritize and replace Studies as necessary subject to Section 1.6. 1.5 The Parties will establish a Joint Steering Committee ("JSC") of equal representation, comprised of three (3) representatives (employees, directors or consultants who are subject to appropriate confidentiality obligations) from each Party, with the representatives of each Party collectively having one vote on all matters to be decided upon by the JSC. Each Party can appoint and replace its representatives in the JSC at its own discretion through timely written notice to the other Party. 1.6 The JSC will have meetings (either in person, by teleconference or via electronic means) at least quarterly. At least one meeting per year will be conducted in person or by videoconference (including the kick-off meeting). The JSC will decide on matters by unanimous vote with each of MD Anderson and Adaptimmune exercising one vote each provided, however, that no action may lawfully be taken at any meeting unless at least two representatives of each Party (including for this purpose any proxy representative appointed as provided below) are present at the meeting. If a member of the JSC is unable to attend a meeting, he or she may appoint, in writing, a proxy to participate and vote in his or her stead. Decisions may also be made by electronic mail, provided such electronic mail is provided by at least two representatives from Adaptimmune and MD Anderson and such electronic mail is acknowledged to be received by the recipient. Although decision will be made by mutual agreement of the JSC, in the event of any disagreement, *** . 1.7 The main task of the JSC will be to oversee the Alliance. In order to achieve the objectives of the Alliance, the JSC will oversee each Study under the Alliance. The JSC will provide technical, scientific, clinical, and regulatory guidance to the Studies and will be responsible for monitoring progress of these Studies. Additional representatives can be invited by the JSC on a case by case basis should discussion of certain topics require so, provided that such guests will be subject to an obligation of confidentiality and non-use at least as strict as Section 5 below. In the event a Study is terminated early or does not initiate, the Parties shall promptly replace that Study with a new study similar in scope that is of mutual scientific interest to the Parties. Once agreed by the JSC, such replacement study will be funded by the Alliance Funding and payable in accordance with agreed milestones for such replacement study. + +*** Portions of this page have been omitted pursuant to a request for Confidential Treatment and filed separately with the Commission. 3 + + + + + + 1.8 In addition, the JSC will be responsible for coordinating resolution of problems arising in the Studies or in the Alliance as a whole. In the event of any matter to which the JSC cannot reach resolution, or in the event of any dispute arising as to any matter subject to JSC responsibility and save where Adaptimmune has the deciding vote in accordance with Section 1.6 above, such matter or dispute will be escalated to executive management of MD Anderson and Adaptimmune for good faith resolution. Both Parties shall use all reasonable efforts to resolve any matter or dispute on a timely basis. 1.9 MD Anderson represents and certifies that neither MD Anderson nor Principal Investigator will, directly or indirectly, offer or pay, or authorize an offer or payment of, any money or anything of value to any Public Official (defined below) or public entity, with the knowledge or intent that the payment, promise or gift, in whole or in part, will be made in order to improperly influence an official act or decision that will assist Adaptimmune in securing an improper advantage or in obtaining or retaining business or in directing business to any person or entity in relation to the Study. In addition to other rights or remedies under this Agreement or at law, Adaptimmune may terminate the affected Study Order if MD Anderson breaches any of the representations or certifications contained in this Section or if Adaptimmune learns that improper payments are being or have been made to any Public Official by MD Anderson or Investigator. For the purposes of this Agreement, "Public Official" means any officer or employee of a government, a public international organization or any department or agency thereof, or any person acting in an official capacity, including, for a public agency or enterprise; and any political party or party official, or any candidate for public office. Adaptimmune acknowledges and agrees that MD Anderson is an agency of the State of Texas, and its investigator, employees, and officers do constitute a Public Official, as used in this paragraph, for purposes of this Section. Notwithstanding anything in this Section 1.9, nothing in this Section shall constitute a limitation on MD Anderson's ability to operate within its legal capacity as an agency of the State of Texas, nor shall anything in this Agreement require MD Anderson to violate any law or to refrain from complying with any law applicable to MD Anderson. 2. Responsibilities and Compliance 2.1 Each Clinical Study shall be subject to review and approval of the Study protocol ("Protocol") as required by MD Anderson's Institutional Review Board ("Institutional Review Board" or "IRB") and/or any relevant authorities prior to commencement of the Study as may be required in order to comply with Applicable Laws. 2.2 The scope of the Study to be performed shall be set forth in the Protocol(s) or workscope referenced in the Study Order, which shall be incorporated by reference into such Study Order. These Protocol(s)/workscope shall be considered final after being agreed to by MD Anderson and Adaptimmune and, for Clinical Studies, including approval by MD Anderson's IRB. The Principal Investigator for a Clinical Study shall submit the Protocol and reports of the ongoing conduct of the Clinical Study to the IRB as required by the IRB, obtain written approval from the IRB, and inform the IRB of Study closure. 2.3 MD Anderson shall and will ensure that each Principal Investigator shall conduct a Study in accordance with (a) the terms and conditions of this Agreement and the relevant Study Order, (b) the provisions of the Protocol or workscope, as applicable, (c) applicable Good Clinical Practice requirements as incorporated by FDA regulations ("GCP"), (d) the ethical principles of the Declaration of Helsinki, as applicable, and (e) any and all applicable orders and mandates of relevant authorities (including the FDA) and IRB, and applicable MD Anderson policies. MD Anderson shall ensure that all persons participating in any Study are either employees of MD Anderson or are under legally binding obligations to MD Anderson requiring performance in accordance with the terms of this Agreement and that all persons 4 + + + + + + conducting any Study are properly trained with respect to their tasks performed for the Study. The Study shall be conducted at MD Anderson. Only Adaptimmune shall be entitled to amend or modify the Protocol, which amendments and modification must be approved by the IRB prior to implementation. Neither MD Anderson or Principal Investigator shall be entitled to amend any Protocol for any Study except as necessary to eliminate any immediate hazard to the safety, rights or welfare of the Study patient or unless required by the IRB. Any deviation from the Protocol must be agreed by Adaptimmune in advance unless necessary to eliminate an apparent immediate hazard to the safety, rights or welfare of any Study patient or unless required by the IRB. MD Anderson will promptly report any known deviation to Adaptimmune. 2.4 MD Anderson and Adaptimmune shall comply with all federal, state, and local laws and regulations as well as ethical codes applicable to the conduct of each such Study ("Applicable Laws") to the extent, in each case, applicable to the relevant performance of a Party's obligations under this Agreement and any Study Order. 2.5 Prior to the enrollment of any patient into any Clinical Study, MD Anderson and/or Principal Investigator shall forward to Adaptimmune evidence of approval of each Clinical Study by MD Anderson's IRB, and with respect to Studies for which MD Anderson serves as "sponsor" within the meaning of such term under Applicable Laws and regulations, evidence of approval of the Study by relevant regulatory authorities (or exemption from such regulatory authority/ies review and approval). MD Anderson shall, as required by Applicable Law, obtain from the IRB written evidence of continuing review and approval of the Study and shall provide evidence of such approval to Adaptimmune. 2.6 If, in the course of any Clinical Study at MD Anderson, a Study subject is injured by such Study subject's participation in the Study, MD Anderson and/or Principal Investigator shall inform Adaptimmune of any such injury by fax or email in case of serious and unexpected adverse reactions and/or serious and unexpected adverse events arising from the use of Study Drug as soon as reasonably possible and in any event in accordance with the timescales set out in the Protocol, and/or, if applicable, pregnancies, within the timelines stipulated in the Protocol, or if such is not stipulated in the Protocol, within *** (***) business days following MD Anderson or Principal Investigator becoming aware of such event. 2.7 MD Anderson represents that: (a) it has not been debarred by the FDA pursuant to its authority under Sections 306(a) and (b) of the U.S. Food, Drug, and Cosmetic Act (21 U.S.C.. § 335(a) and (b)) and is not the subject of any investigation or proceeding which may result in debarment by the FDA, and to the extent applicable, it shall not use any Principal Investigator or Study team member in the performance of a Study that has been so debarred or subject to any such investigation or proceeding, and; (b) it is not included in the List of Excluded Individuals/Entities (maintained by the U.S. Department of Health and Human Services Office of Inspector General) or the List of Parties Excluded from Federal Procurement and Non-procurement maintained by the U.S. General Services Administration, and is not the subject of any investigation or proceeding which may result in inclusion in any such list, and to the extent applicable, it shall not use any Principal Investigator or Study team member in the performance of a Study that is so included or the subject of any such investigation or proceeding. MD Anderson agrees to promptly notify Adaptimmune in writing if it becomes aware of any such debarment, exclusion, investigation or proceeding of MD Anderson or, to the extent applicable, any Principal Investigator. 2.8 MD Anderson and Adaptimmune shall comply with all applicable federal, state and local laws pertaining to confidentiality, consent and disclosure of all information or records obtained and reviewed in the course of the Study, and shall permit access to such information or records only as authorized by a relevant Study subject, the IRB, and as authorized by law. Each Party agrees to comply with all provisions of the Health Insurance Portability and Accountability Act ("HIPAA") regulations (45 C.F.R. + +*** Portions of this page have been omitted pursuant to a request for Confidential Treatment and filed separately with the Commission. 5 + + + + + + Parts 160 and 164) as to the protection and security of Protected Health Information ("PHI") to the extent applicable to a Party. Prior to participation of each subject in a Clinical Study, MD Anderson will ensure that (a) it has obtained a signed written informed consent document from the subject ("Consent") and (b) it has obtained a signed, written, HIPAA authorization that adequately discloses the circumstances under which the subject's personal data might be disclosed, as applicable, and documents the subject's express written authorization for use and disclosure of the subject's PHI for Study purposes, as applicable, pursuant to the HIPAA regulations ("Authorization"). MD Anderson will agree to the contents of any Consent or Authorization provided to any Study patient or prospective Study patient with Adaptimmune prior to use in any Clinical Study. Adaptimmune, Adaptimmune Limited and its Joint Research Partners will only obtain, access, use and disclose the individually identifiable health information of each Study Subject in accordance with and to the extent permitted by the IRB, Consent and the Authorization document and in accordance with this Agreement and Applicable Laws. "Joint Research Partners," for the purposes of this Agreement, means Adaptimmune Limited's strategic collaboration partner, GlaxoSmithKline (including all companies within the GlaxoSmithKline group of companies) but only to the extent and for the duration that GlaxoSmithKline remains a collaboration partner of Adaptimmune or otherwise takes over control of any Study Drug which is the subject of any Study. Adaptimmune shall have in place with its Joint Research Partners a written agreement with terms at least as stringent as those set out in this Agreement in relation to the obtaining, access, use and disclosure of individually identifiable health information under this Section 2.8 or the receipt, access, use and disclosure of MD Anderson Confidential Information under Section 5. 2.9 MD Anderson and Adaptimmune will promptly notify each other upon identifying any aspect of a Protocol, including information discovered during site monitoring visits, or Study results that may adversely affect the safety, well-being, or medical care of the Study subjects, or that may affect the willingness of Study subjects to continue participation in a Study, influence the conduct of the Study, or that may alter the IRB's approval to continue the Study. MD Anderson will promptly notify the IRB of any such events. If the IRB at any time suspends, qualifies or withdraws approval of the Study, MD Anderson shall promptly notify Adaptimmune, provide a reasonable written explanation of the circumstances leading to such suspension, qualification or withdrawal, and cease the treatment of all Study patients as medically appropriate and if required by the IRB. When Study subject safety or medical care could be directly affected by Study results, then notwithstanding any other provision of this Agreement, MD Anderson will send Study subjects a written communication about such results. *** . 2.10 MD Anderson shall not subcontract any of its or the Principal Investigator's responsibilities under this Agreement without the prior written consent of Adaptimmune. Any consent provided under this Section 2.10 shall not enable the relevant sub-contractor to further subcontract its responsibilities to any other third party. MD Anderson shall ensure that any subcontracting is governed by a binding agreement which imposes on the subcontractor obligations and responsibilities substantially equivalent to those set out in this Agreement, to the extent such apply to the subcontracted activity (including obligations of confidentiality and ownership of Inventions). Regardless of any delegation of duties to any subcontractor, MD Anderson remains obligated to fulfill all MD Anderson obligations to Adaptimmune and Adaptimmune Limited hereunder. 3. Personnel, Materials and Equipment + +*** Portions of this page have been omitted pursuant to a request for Confidential Treatment and filed separately with the Commission. 6 + + + + + + 3.1 Except as otherwise set forth in this Agreement, MD Anderson shall provide all necessary personnel, facilities, and resources to accomplish their responsibilities under this Agreement and the relevant Study Order. 3.2 Adaptimmune agrees to promptly provide MD Anderson with the required quantities of the drug or therapy under a Study Order that will be utilized in accordance with the provisions of the Protocol or workscope applicable to the Study ("Study Drug"), Alliance Funding applicable to the Study, and/or support services to the extent required for the conduct of a Study as specified in the Protocol or workscope. Any Study Drug provided by Adaptimmune will be used solely for the applicable Study and solely in accordance with the Protocol or workscope for the relevant Study. MD Anderson will not use such Study Drug outside of the scope of the Study. MD Anderson will not transfer or provide unsupervised access to the Study Drug to any third party for any purpose, without the prior written consent of Adaptimmune. MD Anderson acknowledges that the Study Drug is experimental in nature, and shall exercise prudence and reasonable care in its handling, storage, transportation, disposition and containment of the Study Drug and, if applicable, any other Proprietary Materials provided by Adaptimmune. 3.3. Use of Proprietary Materials. From time to time during the Term, either Party (the "Transferring Party") may supply the other Party (the "Receiving Party") with proprietary materials of the Transferring Party (other than Study Drug) ("Proprietary Materials") for use in the Study as may be further listed in the Study Order. In connection therewith, each Receiving Party hereby agrees that: (a) the Receiving Party will not use the Proprietary Materials for any purpose other than exercising its rights or performing its obligations hereunder; (b) it will use such Proprietary Materials only in compliance with all Applicable Laws; (c) it will not transfer any such Proprietary Materials to any third party without the prior written consent of the Transferring Party; (d) it will not acquire any rights of ownership, or title in or to such Proprietary Materials as a result of such supply by the Transferring Party; and (e) upon the expiration or termination of this Agreement or a Study Order, if requested by the Transferring Party, it will destroy or return any such Proprietary Materials 3.4 Nothing in this Agreement shall be construed to limit the freedom of MD Anderson or of any Principal Investigator or Study team member or Adaptimmune to engage in similar clinical trials or research performed independently under other grants, contracts, or agreements with parties other than Adaptimmune. 3.5 MD Anderson will obtain, prepare, store and ship all Study patient samples required to be collected and shipped under Protocol for any Clinical Study in accordance with and to the extent permitted by Applicable Laws, the Consent, Authorization, the IRB and any applicable Study reference manuals and any reasonable written instructions provided by Adaptimmune. Both Parties shall retain all such samples in accordance with and to the extent permitted by the Consent, Authorization, the IRB and Protocol and only disseminate such samples to third parties to the extent permitted by the Consent and HIPAA Authorization the IRB, Applicable Laws, and the Protocol. Adamptimmune, and service providers for the Study may only use the samples only to the extent permitted by the Consent and HIPAA Authorization documents, the IRB, as necessary to conduct the Study and as permitted by Applicable Laws. 4. Payments 4.1 Payments of Alliance Funding applicable to a Study will be made according to the terms specified in Sections 1.3 and 1.4 above. 5. Confidential Information 7 + + + + + + 5.1 In conjunction with each Study, the Parties may wish to disclose confidential information to each other. For purposes of this Agreement, "Confidential Information" means confidential, non-public information, know-how and data (technical or non-technical) that is disclosed in writing, orally, graphically, in machine readable form, or in any other manner by or on behalf of a disclosing Party to a receiving Party or its Affiliates for purposes of this Agreement or any Study Order ("Purpose"). Data or Inventions arising in the performance of the Study and which are owned by Adaptimmune will also constitute Confidential Information of Adaptimmune, even where first disclosed by MD Anderson and in each case subject to the publication rights of MD Anderson in Section 12 and subject to Section 7 below. Confidential Information may be disclosed in any form (e.g. oral, written, graphic, electronic or sample) by or on behalf of disclosing Party or its Affiliates, or may be otherwise accessible to receiving Party or its Affiliates. Exchanges of Confidential Information directly between the Affiliates and Joint Research Partners are also covered by this Agreement. "Affiliates" means any individual, company, partnership or other entity which directly or indirectly, at present or in the future, controls, is controlled by or is under common control of a Party, and "control" will mean direct or indirect beneficial ownership of at least fifty per cent (50%) of the voting share capital in such company or other business entity, or to hold the effective power to appoint or dismiss members of the management. 5.2 Without disclosing Party's prior written consent, receiving Party will: (a) not use any part of or the whole of the Confidential Information for any purpose other than the Purpose; (b) restrict the dissemination of Confidential Information to individuals within its own organization and disclose the Confidential Information only to those of its officers, employees and Affiliates and Joint Research Partners who have a legitimate need to have access to the Confidential Information, who will be bound by confidentiality and non-use commitments no less restrictive than those of this Agreement, and who will have been made aware of the confidential nature of the Confidential Information; (c) protect the Confidential Information by using the same degree of care, but not less than a reasonable degree of care, to prevent the unauthorized use, dissemination, or publication of the Confidential Information as receiving Party uses to protect its own confidential information of a like nature; (d) preserve the confidentiality of the Confidential Information, not disclose it to any third party, and take all necessary and reasonable precautions to prevent such information from being accessible to any third party; and (f) promptly notify the disclosing Party upon becoming aware of evidence or suspicion of any unauthorized use or disclosure of the Confidential Information. The foregoing obligations will exist for a period of *** (***) years from the date of completion of the last Study in relation to which the Confidential Information is disclosed or used. 5.3 The obligations of confidentiality and non-use listed in this Section 5 will not apply to information: (a) which is in the public domain or public knowledge at the time of disclosure, or which subsequently enters the public domain through no fault of receiving Party; (b) which was rightfully in the possession of receiving Party at the time of disclosure by disclosing Party; (c) which is independently developed by receiving Party without use of disclosing Party's Confidential Information; (d) which the receiving Party receives legally from any third party and which is not subject to an obligation of confidentiality; (e) is communicated to the receiving party's IRB or other scientific committee; (f) is required to be disclosed in order to obtain informed consent from patients or subjects who may wish to enroll in the Study, provided, however, that the information will be disclosed only to the extent necessary and will not be provided in answer to unsolicited inquiries by telephone or to individuals who are not eligible to be Study subjects; or (g) is disclosed to a Study subject for the safety or well-being of the Study subject. The receiving Party may also disclose Confidential Information of any other Party where it is required to disclose such pursuant to Applicable Law; provided, however, that receiving Party will make reasonable efforts, if legally permissible, to (i) notify disclosing Party prior to the disclosure of any part of or the whole of the Confidential Information and (ii) allow disclosing Party the opportunity to + +*** Portions of this page have been omitted pursuant to a request for Confidential Treatment and filed separately with the Commission. 8 + + + + + + contest and avoid such disclosure, and provided, further, that receiving Party will disclose only that portion of such Confidential Information that it is legally required to disclose. 5.4 For the purposes of this Section 5, any combination of features disclosed to the receiving Party will not be deemed to be within the foregoing exceptions merely because individual features are. Moreover, specific disclosures made to the receiving Party will not be deemed to be within the foregoing exceptions merely because they are embraced by general disclosures. 5.5 All Confidential Information disclosed to receiving Party pursuant to this Agreement will be and remain the disclosing Party's property. Nothing contained herein will be construed as granting to receiving Party any proprietary right on or in relation to any part of or the whole of the Confidential Information, or any right to use any of the Confidential Information except for the Purpose. Receiving Party will return to disclosing Party all documents and other materials which constitute Confidential Information, as well as all copies thereof, promptly upon request or upon termination of this Agreement (whichever is earlier); provided, however, that receiving Party may keep one copy of the Confidential Information received under this Agreement in its secure files in accordance with the terms of this Agreement for the sole purpose of maintaining a record of the Confidential Information received hereunder and for compliance with this Agreement and/or Applicable Laws. 5.6 Adaptimmune will not require MD Anderson to disclose any Protected Health Information. Notwithstanding the foregoing, if Adaptimmune comes into knowledge or possession of any "Protected Health Information" (as such term is defined under HIPAA) by or through MD Anderson or any information that could be used to identify any Study subject or other MD Anderson patients or research subjects, Adaptimmune will maintain any such Protected Health Information or other information confidential in accordance with laws and regulations as applicable to MD Anderson, including without limitation HIPAA, will use any such Protected Health Information solely to the extent permitted by Applicable Laws, the IRB and the Consent/Authorization of the patient/research subject, and will not use or disclose any such Protected Health Information or other information in any manner that would constitute a violation of any Applicable Laws or regulation if such use or disclosure was made by MD Anderson. It is intended that MD Anderson will not disclose any Protected Health Information to Adaptimmune under this Agreement. 5.7 Improper use or disclosure of the Confidential Information by receiving Party is likely to cause substantial harm to disclosing Party. Therefore, in the event of a breach, threatened breach, or intended breach of this Agreement by receiving Party, in addition to any other rights and remedies available to it at law or in equity, disclosing Party will be entitled to seek preliminary and final injunctions enjoining and restraining such breach, threatened breach, or intended breach. 6. Clinical Data / Monitoring 6.1 MD Anderson shall maintain complete, accurate and current records with respect to the conduct of any Study as set forth in any Protocol or Study Order, to the extent required by Applicable Laws and regulations ("Study Records"). All Study Records shall be retained by MD Anderson in accordance with and for the time period as is required by Applicable Law. Prior to any disposal of such Study Records, MD Anderson shall give Adaptimmune thirty (30) days' prior written notice thereof to allow Adaptimmune the opportunity to request in writing, within such time frame, that MD Anderson continue to store such Study Records at Adaptimmune's expense. In relation to Clinical Studies, MD Anderson will keep Adaptimmune reasonably informed of the progress of the Study and respond to any reasonable queries of Adaptimmune in relation to such Study promptly. In relation to Pre-Clinical Studies, oral reports or interim written status reports of the progress of the Studies will be provided by the Principal Investigator to Adaptimmune on a regular basis and at least once every *** (***) months during the + +*** Portions of this page have been omitted pursuant to a request for Confidential Treatment and filed separately with the Commission. 9 + + + + + + course of a Study. Significant developments arising out of Studies will be communicated promptly to Adaptimmune. In the context of any Clinical Study, MD Anderson shall timely prepare and submit to Adaptimmune (a) case report forms, as soon as reasonably possible but in any event within *** (***) business days following completion of any Study patient visit; and (b) responses to data resolution queries as soon as reasonably possible and in any event within *** (***) business days following receipt of such query. 6.2 As applicable to and appropriate for a Clinical Study, Adaptimmune may monitor the conduct of a Clinical Study in accordance with Good Clinical Practice requirements of FDA Regulations, and may visit MD Anderson for the purpose of such monitoring. Such monitoring visits shall also enable Adaptimmune to (a) inspect and review any or all Study Records and Study source documents for comparison with case report forms; and (b) audit financial records relating solely to the performance of the Study under this Agreement. During any visit, MD Anderson and Principal Investigator shall reasonably cooperate with Adaptimmune and will use reasonably efforts to promptly provide any reasonably Study Records or Study information requested by Adaptimmune in accordance with this Section. Any such visits shall be scheduled in coordination with MD Anderson and/or Principal Investigator during normal administrative business hours, and shall be subject Adaptimmune's and Adaptimmune Limited's compliance with MD Anderson's reasonable measures for confidentiality, safety and security, and shall also be subject to compliance with generally applicable premises rules at MD Anderson. 6.3 MD Anderson and Principal Investigator shall, during a Study, permit inspections by responsible legal and regulatory authorities with respect to such Clinical Study. To the extent permitted by law and to the extent practicable, MD Anderson shall notify Adaptimmune of such inspection and provide Adaptimmune with an opportunity to be present at such inspection (to the extent reasonably possible). MD Anderson shall, to the extent permitted by Applicable Law, inform Adaptimmune of any findings resulting from any such inspection and MD Anderson shall promptly correct any non-conformances or requests for correction identified as a result of such inspection. MD Anderson shall promptly notify Adaptimmune of, and to the extent permitted by law, provide Adaptimmune with copies of, any inquiries, correspondence or communications with any legal or regulatory authority with authority over any Study, to the extent in each case applicable to any Study or the performance of such Study by MD Anderson. Where MD Anderson intends to respond to any such communication, MD Anderson shall provide, to the extent permitted by law, Adaptimmune with a copy of such response and an opportunity to comment on such response (to the extent reasonably practicable) in advance of the due date for the response. MD Anderson will review any comments provided by Adaptimmune in good faith. 6.4 Notwithstanding any provision of this Section 6, to the extent that MD Anderson is the holder of an Investigational New Drug Application ("IND") or other applicable regulatory application or approval for a Study, the provisions of Section 6.2 and 6.3 shall not apply, and MD Anderson shall have the sole responsibility for monitoring, auditing, and reporting for such Study, provided that MD Anderson agrees to reasonably negotiate access to Study documentation and records relevant to the applicable Study Drug and documentation and facilities applicable to the Study upon the request of Adaptimmune and provided that Adaptimmune shall be subject to compliance with MD Anderson's reasonable measures for confidentiality, safety and security, and shall also be subject to compliance with generally applicable premises rules at MD Anderson. 7. Data & Inventions. 7.1 Each Party will retain all right, title and interest in and to its own Background IP and no license to use such Background IP is granted to the other party except for MD Anderson's use of Study Drug in a Study as set forth in Section 3.2 above and in the Protocol and each Party's use of the other Party's + +*** Portions of this page have been omitted pursuant to a request for Confidential Treatment and filed separately with the Commission. 10 + + + + + + + + Proprietary Material as set forth in Section 3.3 above. "Background IP" means all intellectual property (including rights in Confidential Information) of a Party that: (a) was generated by such Party before the Effective Date; (b) is generated by such Party outside the scope or after expiration of this Agreement or any Study under this Agreement; and in each such case; (c) is owned by such Party, either partially or wholly, or is licensed to, or otherwise controlled by such Party, and which is not an Invention under this Agreement. 7.2 Patient records, research notebooks, all original source documents, Protected Health Information (as such term is defined by HIPAA), MD Anderson's business records, regulatory and compliance documents, original medical records or any information required to be maintained by MD Anderson in accordance with Applicable Laws, that is generated in the conduct of the Studies (collectively, "MD Anderson Records") will be owned by MD Anderson. All results, data and work product (excluding MD Anderson Records) generated in the conduct of the Studies ("Data") shall be owned by Adaptimmune Limited. MD Anderson shall maintain all such Data as confidential, subject to the publication rights granted in Section 12 below. Data will be promptly disclosed by MD Anderson to Adaptimmune in the form of a Study report or as otherwise reasonably requested by Adaptimmune. Notwithstanding any other provision of this Agreement, MD Anderson shall have the right to use results and Data of the Study for its internal research, academic, and patient care purposes and for publication in accordance with Section 12 below, save that no right or license is granted to MD Anderson under any of Adaptimmune's Background IP. Adaptimmune shall promptly disclose any Data it generates to MD Anderson. 7.3 MD Anderson will provide to Adaptimmune a detailed written disclosure of each patentable invention and/or discovery (and all intellectual property rights therein) conceived and reduced to practice in the conduct of a Study and arising from the performance of a Study ("Invention") promptly after a written invention disclosure report for such Invention is received by MD Anderson's Office of Technology Commercialization. 7.4 Inventions shall be owned by the Parties in accordance with the following: (a) *** "Adaptimmune Inventions" shall be the sole property of Adaptimmune Limited. (b) With respect to any Inventions that are not Adaptimmune Inventions ("Other Inventions"), where made solely by MD Anderson or its employees and agents, such Inventions will be solely owned by MD Anderson; where made jointly by MD Anderson and Adaptimmune and/or Adaptimmune Limited and their employees and agents will be jointly owned by MD Anderson and Adaptimmune Limited. Inventions that are made solely by Adaptimmune, Adaptimmune Limited or its employees and agents will be solely owned by Adaptimmune Limited. Inventorship will be determined in accordance with United States patent law. 7.5 MD Anderson hereby grants Adaptimmune and Adaptimmune Limited a non-exclusive, worldwide, irrevocable royalty-free license to any Invention in which MD Anderson has an ownership interest, for any purpose. Such license shall include an unrestricted right to sublicense through multiple tiers. MD Anderson also hereby grants to Adaptimmune Limited an exclusive option to negotiate an + +*** Portions of this page have been omitted pursuant to a request for Confidential Treatment and filed separately with the Commission. 11 + + + + + + exclusive (subject to MD Anderson's perpetual, irrevocable, no-cost right to use such Invention for non-commercial internal research, academic and patient care purposes), royalty-bearing license to any Invention in which MD Anderson has an ownership interest, provided that Adaptimmune Limited pays all reasonably incurred patent expenses for such Invention in the event Adaptimmune Limited exercises its option. Adaptimmune Limited must exercise its option to negotiate a license to any Invention by notifying MD Anderson in writing within six months' of MD Anderson disclosing such Invention to Adaptimmune (the "Option Period"). If Adaptimmune Limited fails to timely exercise its option within the Option Period with respect to any Invention, Adaptimmune Limited's right to negotiate a license agreement with respect to such Invention will automatically terminate, and MD Anderson will be free to negotiate and enter into a license with any other party. If Adaptimmune Limited timely exercises its option, the terms of the license shall be negotiated in good faith within six months of the date such option is exercised, or within such time the parties may mutually agree in writing (the "Negotiation Period"). If, however, Adaptimmune Limited timely exercises its option, but MD Anderson and Adaptimmune Limited are unable to agree upon the terms of the license during the Negotiation Period, Adaptimmune Limited's right to exclusively license such Invention will terminate, and MD Anderson will be free to enter into a license with any other party (subject to the grant of the non-exclusive license above). 7.6. Adaptimmune Limited hereby grants MD Anderson a perpetual, irrevocable, no-cost, non-exclusive, royalty-free license to any Adaptimmune Invention or Other Invention in which Adaptimmune Limited has an ownership interest for MD Anderson's internal non-commercial research, academic and patient care purposes. For clarity the grant of any license under any Invention or assignment of any Invention by either Party does not include any license under any of such Party's Background IP, even where such Background IP dominates or encompasses any Invention. 7.7 As between the Parties, the sole owner of any Invention will have the sole right to prepare, file, prosecute, maintain, enforce and defend all U.S. and foreign patents, registrations and other forms of intellectual property in such Invention but nothing herein will obligate the owner to take any such actions. As between the Parties, Adaptimmune will have the first right to prepare, file, prosecute, maintain, enforce and defend all U.S. and foreign patents, registrations and other forms of intellectual property in any jointly-owned Invention using patent counsel of its choice that is subject to the written approval of MD Anderson not to be unreasonably withheld and at the sole cost and expense of Adaptimmune, with accounting to MD Anderson. Adaptimmune will keep MD Anderson reasonably informed of all such material preparations, filings, material prosecution, material maintenance, material enforcement and defense and will consider MD Anderson's recommendations in good faith (provided such recommendations are provided on a timely basis) If Adaptimmune elects not to file in the United States or not to maintain an application or patent arising from any jointly-owned Invention, Adaptimmune will promptly notify MD Anderson within reasonable time for MD Anderson to file, prosecute or maintain such application or patent, and MD Anderson will have the right to file, prosecute or maintain such application or patent, at MD Anderson's expense. MD Anderson will keep Adaptimmune reasonably informed of all such material preparations, material filings, material prosecution, material maintenance, material enforcement and defense it makes in relation to any jointly-owned Invention. The Parties will reasonably cooperate with each other with respect to matters concerning jointly-owned Inventions to the extent reasonably necessary for filing, prosecuting, maintaining, defending or enforcing any such patents, registrations and other forms of intellectual property protection. MD Anderson will keep Adaptimmune reasonably informed of any material filings, material prosecution, enforcement and defense patents, new patent applications, material registrations or other forms of intellectual property covering Other Inventions. 7.8 *** + +*** Portions of this page have been omitted pursuant to a request for Confidential Treatment and filed separately with the Commission. 12 + + + + + + . 8. Term and Termination 8.1 The term of this Agreement shall be five (5) years following the Effective Date or until the Studies are completed, whichever is later, unless extended or unless terminated earlier in accordance with the provisions hereof. In the event of expiration or early termination of this Agreement, the terms and conditions of this Agreement shall remain binding with respect to any ongoing Studies (including any new studies to which any remaining Alliance Funding is allocated under Section 1.3) until completion of the Studies or termination of the respective Study Order/s. 8.2 A Party will have the right to terminate this Agreement if the other Party commits a material breach of the Agreement and fails to cure such breach within thirty (30) days of receiving notice from the non-breaching Party of such breach. Any expiration or termination of this Agreement will not affect any then existing Study Orders, and any then outstanding Study Orders will continue after the expiration or earlier termination of this Agreement in accordance with their respective provisions. Upon any expiration or termination of this Agreement, provisions of this Agreement that are incorporated by reference into any then outstanding Study Orders will survive termination of this Agreement and will continue to apply to such Study Orders until termination or expiration of each such Study Orders in effect at the time this Agreement expires or is terminated. 8.3 A Party may terminate a Study Order: (a) if the other Party commits a material breach of this Agreement or the Study Order and fails to cure such breach within thirty (30) days of receiving notice from the non-breaching Party of such breach; or (b) in the case of any Clinical Studies, due to health and safety concerns related to the Study Drug or procedures in the Study (including regulatory holds due to the health and safety of the Study Subjects); or (c) in the case of MD Anderson and in relation to any Clinical Studies, where IRB requests termination of any Study; or (d) in the case of Adaptimmune, *** set out in Section 1.2 above. The Parties agree that any termination of a Study Order shall allow for: (i) the wind down of the Study to ensure the safety of Study subjects; and (ii) Adaptimmune's final reconciliation of Data related to the Study in addition to Adaptimmune's final monitoring visit. All reasonable fees associated with the wind-down activities and final monitoring visit shall be paid by Adaptimmune, to the extent not covered by Alliance Funding. Termination of one or more Study Orders will not automatically result in the termination of this Agreement or termination of any other Study Orders. Upon termination of a Study Order, MD Anderson will immediately return (at Adaptimmune's cost) any Study Drugs provided by Adaptimmune for such Study as directed by Adaptimmune. 8.4 In case any regulatory or legal authorization necessary for the conduct of the Study is (i) finally rejected or (ii) withdrawn, the relevant Study Order shall terminate automatically at the date of receipt of such final rejection. Termination or cancellation of this Agreement or a Study Order will not affect the rights and obligations of the Parties that have accrued prior to termination, and any provisions of this Agreement or a particular Study Order that by their nature extend beyond expiration or termination will survive the expiration or termination of this Agreement and/or that particular Study Order. In particular, the provisions of Sections 2-13 as applicable will survive any expiration or termination of this Agreement. + +*** Portions of this page have been omitted pursuant to a request for Confidential Treatment and filed separately with the Commission. 13 + + + + + + 8.5 In the event the Parties cannot reach agreement on a new Principal Investigator pursuant to Section 14.1 or such new Principal Investigator does not agree to the terms of this Agreement and the relevant Study Order, either Party may terminate such Study Order upon notice to the other Party. 8.6 In addition, in order to accommodate the review and approval of this Agreement by the Office of General Counsel of UT System (the "OGC"), for a period of *** (***) days following the Effective Date (the "Limited Unilateral Termination Period"), MD Anderson will have the right to terminate this Agreement without cause upon ten (10) days' notice to Adaptimmune; provided, however, that (i) a termination by MD Anderson will be effective if notice of termination is sent by MD Anderson any time within the Limited Unilateral Termination Period even if the ten day notice period extends beyond the Limited Unilateral Termination Period and (ii) the Limited Unilateral Termination Period will expire on the earlier to occur of (x) the end of the sixty days, or (y) written notice to Adaptimmune from MD Anderson that the Agreement has been approved by the OGC. Should MD Anderson terminate this Agreement in accordance with this Section 8.6 then the Parties will use reasonable efforts to ensure that any Clinical Study in relation to which any patient has been screened or enrolled shall continue under a separate clinical trial agreement to be entered into between the Parties as soon as possible after receipt of notice of termination by Adaptimmune. The terms of such clinical trial agreement shall be in substantially similar form to terms agreed for other clinical trial agreements between the Parties and a separate budget shall be agreed pursuant to such clinical trial agreement. 8.7 For each Study, Adaptimmune shall make all payments due for Study performance reasonably incurred or obligated in good faith hereunder which have accrued up to the date of termination of a Study Order or this Agreement, or, in case of a termination of this Agreement or the relevant Study Order pursuant to Section 8.4, up to the date of receipt of such final rejection. 9. Indemnification 9.1 Adaptimmune and Adaptimmune Limited agree to defend, indemnify, and hold harmless MD Anderson, System, each Principal Investigator and its/their Regents, trustees, directors, officers, staff, employees, students, faculty members, and its/their affiliates and contracted clients and other parties as may be listed on a Study Order ("Indemnified Party/ies"): (a) from and against any and all liability, claims, lawsuits, losses, demands, damages, costs, and expenses as a result of third party claims or judgments ("Indemnified Losses") resulting from (i) personal injury (including death) to any person or damage to property to the extent arising from the design or manufacture of the Study Drug, and (ii) the use of the Data or results of the Study by or on behalf of Adaptimmune, Adaptimmune Limited or any Joint Research Partner and (iii) Adaptimmune's or Adaptimmune Limited's negligence in connection with a Study or this Agreement; (b) from and against any Indemnified Losses arising from an injury to a Study subject caused by the Study Drug or any procedure required by the Protocol. The completion or termination of a Study shall not affect Adaptimmune's obligation to indemnify with respect to any claim or suit based upon the aforementioned Indemnified Losses. Notwithstanding the foregoing, Adaptimmune and Adaptimmune Limited will not be responsible for any Indemnified Losses to the extent that they arise from the negligence, intentional misconduct, or malpractice of the Indemnified Parties or of any breach of the terms of this Agreement by any Indemnified Party, it being understood that the proper administration of the Study Drug in accordance with the Protocol (including permitted deviations) shall not constitute negligence, intentional misconduct, or malpractice for the purposes of this Agreement. For clarity, a request for indemnity by any Indemnified Party under this Section 9.1 may only be made against one of Adaptimmune or Adaptimmune Limited. 9.2 To the extent authorized by the constitution and laws of the State of Texas, MD Anderson, agrees indemnify, and hold harmless Adaptimmune and Adaptimmune Limited: (a) from and against any and all + +*** Portions of this page have been omitted pursuant to a request for Confidential Treatment and filed separately with the Commission. 14 + + + + + + Indemnified Losses resulting from any negligent or intentional act or omission of MD Anderson in conducting a Study hereunder; (b) failure of MD Anderson or Principal Investigator to comply with Applicable Laws or to adhere to Protocol; or (c) any use by MD Anderson of the results and Data of the Study outside of the performance of any Study. The completion or termination of a Study shall not affect MD Anderson's obligation to indemnify with respect to any claim or suit based upon the aforementioned Indemnified Losses. Notwithstanding the foregoing, MD Anderson will not be responsible for any Indemnified Losses to the extent that they arise from the negligence, intentional misconduct, or malpractice of Adaptimmune or Adaptimmune Limited or from a breach of Agreement by Adaptimmune or Adaptimmune Limited. 9.3 Subject to the statutory duties of the Texas State Attorney General, any indemnified Party shall: (a) notify the indemnifying Party in writing as soon as is reasonably possible after receipt of notice of any and all claims, lawsuits, and demands, or any action, suit, or proceeding giving rise to the right of indemnification; (b) permit the indemnifying Party to retain counsel to represent the named indemnified Party; and (c) permit the indemnifying Party to retain control of any such claims, lawsuits, and demands, including the right to make any settlement, except that the indemnifying Party shall not make any settlement or take any other action which would be deemed to confess wrongdoing by any of the indemnified Parties without the prior written consent of the applicable indemnified Party. 10. Subject Injury Medical Costs 10.1 Adaptimmune shall assume responsibility for reasonable medical expenses incurred by a Study subject for reasonable and necessary treatment if the Study subject experiences an illness, adverse event or injury that is a result of the Study Drug or any procedure required by the Protocol that the subject would not have undergone were it not for such Study subject's participation in the Study. Adaptimmune shall not be responsible for expenses to the extent that they are due to pre-existing medical conditions, underlying disease, or the negligence or intentional misconduct or due to breach of this Agreement by MD Anderson or Principal Investigator. Adaptimmune shall have no obligation to make any payments for any Study patient that is not eligible for inclusion in any Protocol. Any payments for such medical expenses shall be subject to Adaptimmune receiving relevant documentation supporting the claim for such medical expenses. 11. Insurance 11.1 During the term of any Study Order under this Agreement, Adaptimmune Limited shall maintain in full force and effect insurance for its and Adaptimmune's liabilities arising from the Study with limits of not less than $*** per loss and $*** annual aggregate. Adaptimmune shall provide MD Anderson with evidence of such insurance upon request. 11.2 MD Anderson is self-insured pursuant to The University of Texas Professional Medical Liability Benefit Plan under the authority of Chapter 59, Texas Education Code. MD Anderson has and will maintain in force during the term of this Agreement adequate insurance or financial resources to cover its obligations pursuant to this Agreement. 12. Publications + +*** Portions of this page have been omitted pursuant to a request for Confidential Treatment and filed separately with the Commission. 15 + + + + + + 12.1 Adaptimmune recognizes the value of disseminating research results and accepts that MD Anderson will have the right to publish or otherwise publicly disclose the results and Data of any Study, subject in each case to this Article 12. 12.2 Clinical Studies: In relation to any Clinical Study, Adaptimmune shall have the *** right to publish or publicly disclose any Data or results arising from such Clinical Study including where such publication arises from the submission of data and/or results to the regulatory authorities. Such right to publish shall not include any MD Anderson Records or any public health information protected by HIPAA or where any publication would be in breach of the Consent and/or Authorization. MD Anderson and/or Principal Investigator shall have the right to independently publish or publicly disclose, either in writing or orally, the Data and results of the Clinical Study/ies after the earlier of the (i) first publication (including any multi-site publication) of such Data and/or results; (ii) twelve (12) months after completion of any multi-site study encompassing any Study or if none, six (6) months after completion of Study. MD Anderson shall, at least thirty (30) days ahead of any proposed date for submission, furnish Adaptimmune with a written copy of the proposed publication or public disclosure. Within such thirty (30) day period, Adaptimmune shall review such proposed publication for any Confidential Information of Adaptimmune provided hereunder or patentable Data. Adaptimmune may also comment on such proposed publication and MD Anderson shall consider such comments in good faith during the aforementioned thirty (30) day period. MD Anderson and/or Principal Investigator shall remove Confidential Information of Adaptimmune provided hereunder that has been so identified (other than Data or Study results), provided that Adaptimmune agrees to act in good faith when requiring the deletion of Adaptimmune Confidential Information. In addition Adaptimmune may request delay of publication for a period not to exceed *** (***) days from the date of receipt of request by MD Anderson, to permit Adaptimmune or Adaptimmune Limited or any Joint Research Partner to file patent applications or to otherwise seek to protect any intellectual property rights contained in such publication or disclosure. Upon such request, MD Anderson shall delay such publication until the relevant protection is filed up to a maximum of *** (***) days from date of receipt of request for delay by MD Anderson. 12.3 Pre-Clinical Studies: MD Anderson and/or Principal Investigator shall have the *** right to publish or publicly disclose, either in writing or orally, the Data and results of the Pre-Clinical Study/ies and shall have the sole determination of the authorship and contents, provided that MD Anderson or Principal Investigator, as applicable, shall provide Adaptimmune with a copy of any such proposed publication at least thirty (30) days prior to submission for publication. Within such thirty (30) day period, Adaptimmune shall review such proposed publication for any Confidential Information of Adaptimmune provided hereunder or patentable Data. Adaptimmune may also comment on such proposed publication and MD Anderson shall consider such comments in good faith during the aforementioned thirty (30) day period. MD Anderson and/or Principal Investigator shall remove Confidential Information of Adaptimmune provided hereunder that has been so identified (other than Data or Study results), provided that Adaptimmune agrees to act in good faith when requiring the deletion of Adaptimmune Confidential Information. In addition Adaptimmune may request delay of publication for a period not to exceed *** (***) days from the date of receipt of request by MD Anderson, which delay may be for any reason including but not limited to permit Adaptimmune or Adaptimmune Limited or any Joint Research Partner to file patent applications or to otherwise seek to protect any intellectual property rights contained in such publication or disclosure. Upon such request, MD Anderson shall delay such publication up to a maximum of *** (***) days from date of receipt of request for delay by MD Anderson or, if earlier, where the reason is for the filing of a patent application or other intellectual property right.. 12.4 MD Anderson and/or Principal Investigator shall give Adaptimmune acknowledgment for its sponsorship of a Study in all applicable Study publications. Authorship and acknowledgements for + +*** Portions of this page have been omitted pursuant to a request for Confidential Treatment and filed separately with the Commission. 16 + + + + + + scientific publications shall be consistent with the principles embodied in the International Committee of Medical Journal Editors ("ICMJE") Uniform Requirements for Manuscripts. 12.5 The "sponsor" of a Study, within the regulatory meaning of such term, shall register the Study if required by, and in accordance with, Section 801 of the Food and Drug Administration Amendments Act of 2007 on www.clinicaltrials.gov and on any other database required by laws or regulations in accordance with applicable standards regarding scope, form and content and in accordance with ICMJE guidelines such that the Study will be eligible for publication in those publications. 12.6 Nothing in this Agreement shall prevent Adaptimmune or any of its Affiliates from complying with any obligations it has to make disclosure under Applicable Laws or under the rules of any security exchange or listing authority applicable to it. 13. Use of Name/Public Statements/ Press Release/ Disclosure 13.1 Except as expressly set forth in this Agreement, each Party agrees that it will not at any time during the term of this Agreement or following termination of this Agreement use any name of the other Party or any other names, insignia, mark(s), symbol(s), or logotypes associated with the other Party or any variant or variants thereof in any advertising, or promotional materials without the prior written consent of the other Party. 13.2 Except as expressly set forth in this Agreement, to the extent required by law or regulation, or to the extent necessary for MD Anderson or Adaptimmune for the recruitment of subjects to any Study hereunder, the Parties agree to make no public presentations about any Study conducted under this Agreement, and to issue no news releases about any Study, without the prior written consent of the other Party (provided that this statement shall not apply to any information already in the public domain). Any advertisements directed at recruitment of study subjects for a Study must comply with all Applicable Laws, rules and regulations (including the need for IRB review), the confidentiality obligations herein, and shall not include the trademarked insignia, symbol(s), or logotypes, or any variant or variants thereof, of the other Party. Except as required by law or for regulatory purposes, neither Party will use the name (including trademark or other identifier) of the other Party or such other Party's employee or staff member (except in an acknowledgment of sponsorship) in publications, advertising, press releases (except as permitted below in Section 13.3) or for any other commercial purpose without the written approval of the other Party. Adaptimmune will not state or imply in any publication, advertisement, or other medium that any product or service bearing any of Adaptimmune's names or trademarks and/or manufactured, sold or distributed by Adaptimmune has been tested, approved, or endorsed by MD Anderson. Notwithstanding any other provision of this Agreement, each Party and its researchers and employees will have the right, to acknowledge the other Party and its involvement with a Study in scientific or academic publications describing the Study or reporting the results of the Study. 13.3. The Parties agree to have a joint press release after the Effective Date, to be issued at a time mutually agreed by the Parties but in any event within 30 days of Effective Date. The text of such press release is set out at Exhibit IV to this Agreement. Any press release by either Party relating to this Agreement, the Alliance, or any Study shall require the prior review and written approval of the other Party, which approval shall not be unreasonably withheld, delayed or conditioned unless such press release is required to be issued by a Party to the extent required by it to comply with its legally required obligation to any securities exchange on which it is listed. 13.4 Either Party may use the name of the other Party in any document filed with any governmental authority or regulatory agency applicable to a Study, and to comply with any applicable legal or regulatory requirements. Further, each Party is permitted to disclose the other Party's name, the title of 17 + + + + + + the Study, the name of the Principal Investigator, and an overall Study budget amount projected to be paid/actual total amount paid for conducting the Study, provided that this information is presented together as part of mandatory disclosure in accordance with and to the extent required Applicable Law. 14. Principal Investigator 14.1 If a designated Principal Investigator is terminated from a Study, or in the event of the death or other non-availability of the Principal Investigator, MD Anderson shall use reasonable efforts to designate a duly qualified person to act as new Principal Investigator, subject to the reasonable agreement of Adaptimmune. If the Parties are unable to agree on a new Principal Investigator or if the new Principal Investigator is unwilling to agree to the terms and conditions of this Agreement and the relevant Study Order, either Party shall be entitled to terminate the respective Study Order in accordance with Section 8.5. 15. General Provisions 15.1 Warranties. EXCEPT AS EXPRESSLY PROVIDED HEREIN, NEITHER PARTY MAKES ANY WARRANTIES, EXPRESS OR IMPLIED, CONCERNING THE RESULTS OF ANY STUDY OR THE STUDY DRUG, OR OF THE MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE OF SUCH DATA, RESULTS OR STUDY DRUG. NEITHER PARTY SHALL BE LIABLE FOR ANY INDIRECT OR CONSEQUENTIAL DAMAGES SUFFERED BY THE OTHER PARTY AS A RESULT OF PERFORMANCE OF ANY STUDY UNDER THIS AGREEMENT. ADAPTIMMUNE REPRESENTS AND WARRANTS THAT EACH STUDY DRUG HEREUNDER SHALL HAVE BEEN MANUFACTURED IN ACCORDANCE WITH CURRENT GOOD MANUFACTURING PRACTICES IN THE UNITED STATES AND THAT AS AT THE EFFECTIVE DATE OF THIS AGREEMENT IT HAS NOT RECEIVED ANY CLAIM THAT USE OF ANY STUDY DRUG IN THE PERFORMANCE OF A STUDY WOULD INFRINGE THE RIGHTS OF ANY THIRD PARTY. ADAPTIMMUNE REPRESENTS THAT AS AT THE EFFECTIVE DATE TO ITS KNOWLEDGE THERE ARE NO KNOWN DEFECTS IN ANY STUDY DRUG; ADAPTIMMUNE UNDERSTANDS AND ACKNOWLEDGES THAT THE DEVELOPMENT AND DISSEMINATION OF SCIENTIFIC KNOWLEDGE IS A FUNDAMENTAL COMPONENT OF MD ANDERSON'S MISSION, AND THAT MD ANDERSON MAKES NO REPRESENTATIONS, WARRANTIES, OR GUARANTEES WITH RESPECT TO ANY SPECIFIC RESULTS OF THE STUDIES. 15.2 Assignment. This Agreement and/or any Study Order may not be assigned by either Party except as agreed upon in writing by the other Party. Any assignment or attempt to assign, or any delegation or attempt to delegate, not in accordance with this Section shall be void and without effect. For any permitted assignment, the rights and obligations of the Parties hereunder will inure to the benefit of and be binding upon their permitted successors and assigns. 15.3 Independent Contractors. MD Anderson and Adaptimmune shall be independent parties and nothing contained in this Agreement shall be construed or implied to create an agency or partnership. No Party shall have the authority to agree to or incur expenses on behalf of another except as may be expressly authorized by this Agreement or a Study Order. 15.4 Notices. Any notice or communication required or permitted to be given or made under this Agreement by one of the Parties hereto to the other shall be in writing and shall be deemed to have been sufficiently given or made for all purposes on the date of mailing by certified mail, postage prepaid, overnight courier service, and/or fax to be followed by mailed original addressed to such other Party at its respective address as referenced in the Study Order. 18 + + + + + + 15.5 Severability. If any one or more of the provisions of this Agreement shall be held to be invalid, illegal or unenforceable, the validity, legality or enforceability of the remaining provisions of this Agreement shall not in any way be affected or impaired thereby. 15.6 Entirety. This Agreement (including its Exhibits and Appendices) represents the entire agreement of the Parties with respect to the subject matter hereof and it expressly supersedes all previous written and oral communications between the Parties. No amendment, alteration, or modification of this Agreement or any Study Orders attached hereto shall be valid unless executed in writing by authorized signatories of all Parties. 15.7 Waiver. The failure of any Party hereto to insist upon strict performance of any provision of this Agreement or to exercise any right hereunder will not constitute a waiver of that provision or right. 15.8 Force Majeure. In the event that performance of the obligations of a Party hereunder are prevented by events beyond their reasonable control, including, but not limited to, acts of God, regulations or acts of any governmental authority, war, civil commotion, strikes, or other labor disturbances, epidemics, fire, earthquakes, storms or other catastrophes of a similar nature ("Force Majeure"), the affected Party will promptly notify the other Party of such event using the procedure defined herein, and the Parties shall be relieved of their respective obligations hereunder to the extent that the performance of such obligations is actually prevented thereby. During the existence of any such condition, the affected Party shall, nevertheless, use its best efforts to remove the cause thereof and resume performance of its obligations hereunder. The period of performance shall be extended for the Party who is unable to perform due to Force Majeure reasons by a period of time equal to the length of the period during which the Force Majeure reason exists or for a longer period if required to meet the requirements of the Study Protocol. 15.9 Counterparts. It is understood that this Agreement may be executed in one or more counterpart copies, each of equal dignity, which when joined, shall together constitute one Agreement. In the event of execution by exchange of facsimile or electronic signed copies, the Parties agree that, upon being signed by both Parties, this Agreement shall become effective and binding and that facsimile or .pdf signed copies will constitute evidence of this Agreement. 15.10 Export Control. Notwithstanding any other provision of this Agreement, it is understood that the Parties are subject to, and shall comply with, applicable United States laws, regulations, and governmental requirements and restrictions controlling the export of technology, technical data, computer software, laboratory prototypes, and other commodities, information and items (individually and collectively, "Technology and Items"), including without limitation, the Arms Export Control Act, the Export Administration Act of 1979, relevant executive orders, and United States Treasury Department embargo and sanctions regulations, all as amended from time to time ("Restrictions") and that the Parties' obligations hereunder are contingent on compliance with applicable Restrictions. 15.11 Choice of Law. Any disputes or claims arising under this Agreement shall be governed by the laws of the State of Texas. MD Anderson is an agency of the State of Texas and under the constitution and the laws of the State of Texas possesses certain rights and privileges, is subject to certain limitations and restrictions, and only has such authority as is granted to it under the constitution and laws of the State of Texas. Notwithstanding any provision hereof, nothing in this Agreement is intended to be, nor will it be construed to be, a waiver of the sovereign immunity of the State of Texas or a prospective waiver or restriction of any of the rights, remedies, claims, and privileges of the State of Texas. Moreover, notwithstanding the generality or specificity of any provision hereof, the provisions of this Agreement as they pertain to MD Anderson are enforceable only to the extent authorized by the constitution and laws of the State of Texas; accordingly, to the extent any provision hereof conflicts with the constitution or laws 19 + + + + + + of the State of Texas or exceeds the right, power or authority of MD Anderson to agree to such provision, then that provision will not be enforceable against MD Anderson or the State of Texas. [Signatures of Following Page] 20 + + + + + + + + In witness whereof, the Parties hereto have caused this Agreement to be executed by their duly authorized representatives to be effective as of the Effective Date. The University of Texas M. D. Anderson Cancer Center + + + + Adaptimmune LLC Date: 9/23/16 + + + + + + + + Date: 23 September 2016 + + /s/ Chris McKee + + + + + + + + /s/ Helen Tayton-Martin Name Chris McKee, M.H.A + + + + Name Helen Tayton-Martin Title: VP. Business Operations + + + + Title: Authorized Signatory Adaptimmune Limited + + + + + + + + Date: 23 September 2016 + + + + + + + + + + + + + + + + /s/ James Noble + + + + + + + + + + + +Name James Noble + + + + + + + +Title: CEO + + + + + + + + 21 + + + +rd + +rd + + + + + + Exhibit I *** *** + +*** *** *** *** + +*** Portions of this page have been omitted pursuant to a request for Confidential Treatment and filed separately with the Commission. + + + + + +22 + + + + + + *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** + + + + + + *** + +*** Portions of this page have been omitted pursuant to a request for Confidential Treatment and filed separately with the Commission. 23 + + + + + + *** *** *** . *** . *** . *** . *** . *** . *** . *** *** . *** + +*** Portions of this page have been omitted pursuant to a request for Confidential Treatment and filed separately with the Commission. 24 + + + + + + + + + + *** ***: *** *** *** *** + +*** *** + +*** *** *** + +*** *** *** + +*** + + + + + + + + + + + + *** *** *** *** *** + + + + + + + + *** + + + + + + + + + + + +*** *** *** + +*** *** *** *** *** *** *** + + + + + +*** *** + +*** *** *** *** *** *** + + + + + + + +*** *** *** *** *** *** *** + + + + + + + +*** *** + +*** *** *** *** *** *** + + + + + + + +*** *** + +*** *** *** *** + + + + *** *** + + + + + +*** *** + + + + + + *** *** + + + + + + + + + + + +*** *** + + + + + + + + *** + + + + + + + + + + + +*** ***: + +*** + + ***: *** *** *** + +*** + +*** *** *** *** *** *** + +*** *** + +*** *** + +*** *** *** *** *** ***: + + + + *** *** . *** + + + + + + . *** *** *** . *** + +*** Portions of this page have been omitted pursuant to a request for Confidential Treatment and filed separately with the Commission. 25 + + + + + + *** . *** . *** : · *** · *** · *** · *** · *** *** . *** *** . *** : *** + +*** Portions of this page have been omitted pursuant to a request for Confidential Treatment and filed separately with the Commission. 26 + + + + + + *** · *** · *** · *** . *** . *** . *** *** . *** . *** . *** . *** *** . *** . *** . *** + +*** Portions of this page have been omitted pursuant to a request for Confidential Treatment and filed separately with the Commission. 27 + + + + + + *** *** : · *** . o *** . o *** . · *** . o *** . o *** . o *** . · *** . · *** . *** *** + +*** Portions of this page have been omitted pursuant to a request for Confidential Treatment and filed separately with the Commission. 28 + + + + + + *** . *** *** : · *** · *** · *** · *** *** . *** *** *** . *** 1. *** 2. *** . 3. *** 4. *** 5. *** . 6. *** 7. *** *** . *** *** *** + +*** Portions of this page have been omitted pursuant to a request for Confidential Treatment and filed separately with the Commission. 29 + + + + + + *** . *** . *** + +*** Portions of this page have been omitted pursuant to a request for Confidential Treatment and filed separately with the Commission. + + + + + +30 + + + + + + *** *** *** ***: *** + +*** Portions of this page have been omitted pursuant to a request for Confidential Treatment and filed separately with the Commission. 31 + + + + + + *** *** ***: ***: *** + +*** Portions of this page have been omitted pursuant to a request for Confidential Treatment and filed separately with the Commission. 32 + + + + + + *** *** *** + +*** Portions of this page have been omitted pursuant to a request for Confidential Treatment and filed separately with the Commission. 33 + + + + + + *** ***: ***: *** *** + +*** Portions of this page have been omitted pursuant to a request for Confidential Treatment and filed separately with the Commission. 34 + + + + + + *** *** *** + +*** Portions of this page have been omitted pursuant to a request for Confidential Treatment and filed separately with the Commission. 35 + + + + + + *** ***: ***:*** *** + +*** Portions of this page have been omitted pursuant to a request for Confidential Treatment and filed separately with the Commission. 36 + + + + + + *** *** *** + +*** Portions of this page have been omitted pursuant to a request for Confidential Treatment and filed separately with the Commission. 37 + + + + + + *** *** + +*** Portions of this page have been omitted pursuant to a request for Confidential Treatment and filed separately with the Commission. 38 + + + + + + + + + + Exhibit II Table 1 Clinical Study (excluding screening and long term follow- up studies) + +Study Start Date + +*** *** + + + + + + + + + + + + *** *** *** *** *** *** *** *** *** *** *** *** *** *** + + + + + +*** *** *** *** *** + + + + + +*** *** *** *** *** + + + + + +*** *** *** + + + + *** *** Table 2-Payment Schedule Clinical Studies (total funding US$13,374,000): Milestone Payment amount (US$) Date on which Payment can be invoiced. Effective Date *** On expiry of Limited Unilateral Termination Period Enrollment of *** Patients in a Cl in ica l S tudy (exc lud ing screening and long term follow- up studies) + +*** On notification to Adaptimmune that *** patient is eligible and has been enrolled. + +Enrollment of *** Patients in a Cl in ica l S tudy (exc lud ing screening and long term follow- up studies) + +*** On notification to Adaptimmune that *** patient is eligible and has been enrolled. + +Enrollment of *** Patients in a Cl in ica l S tudy (exc lud ing screening and long term follow- up studies) + +*** On notification to Adaptimmune that *** patient is eligible and has been enrolled. + +Enrollment of *** Patients in a Cl in ica l S tudy (exc lud ing screening and long term follow- up studies) + +*** On notification to Adaptimmune that *** patient is eligible and has been enrolled. + +Enrollment of *** Patients in a Cl in ica l S tudy (exc lud ing screening and long term follow- up studies) + +*** On notification to Adaptimmune that *** patient is eligible and has been enrolled. + +Total A l l iance Funding payable: + +13,374,000 + + + + + + Pre-clinical Studies (total funding $6,270,000, including indirect costs of US$***): + +*** Portions of this page have been omitted pursuant to a request for Confidential Treatment and filed separately with the + +th + +th + +th + +th + +th + + + + + +Commission. 39 + + + + + + Milestone Payment amount (US$) Date on which Payment can be invoiced. Effective Date *** . + +On expiry of Limited Unilateral Termination Period + +Completion of each analysis of *** patient samples for *** (Pre-clinical Study 1) + +*** Completion of analysis of samples for *** patients, up to a maximum payment of US$*** and provision of results of such analysis to Adaptimmune. (Max. *** patients) Completion of each analysis of *** patient samples arising from *** (Pre-clinical Study 2) + +*** Completion of analysis of samples for 50 patients, up to a maximum payment of US$*** and provision of results of such analysis to Adaptimmune. (Max. *** patients) Completion of each analysis of *** patient samples arising from the *** and additional *** Study (Pre-clinical Study 3) + +*** Completion of analysis of samples for *** patients, up to a maximum payment of US$*** and provision of results of such analysis to Adaptimmune. (max. *** patients) + +TOTAL Alliance Funding payable: + +6,270,000 + + + + + + For clarity: milestones and payments of Alliance Funding shall only be payable once the milestones set out above have been met by MD Anderson. There shall be no obligation on Adaptimmune to make such payments where any such milestones have not been met; and no payments of Alliance Funding will be due until expiry of Limited Unilateral Termination Period. All payments will be paid by Adaptimmune within 45 days of receipt of an invoice from MD Anderson. Such invoice shall be addressed to Adaptimmune and sent by electronic mail to accounts@adaptimmune.com with copies to lini.pandite@adaptimmune.com and susan cousounis@adaptimmune.com for Clinical Study payments and with copies to Samik.basu@adaptimmune.com in relation to Pre-clinical Study payments. Payments will be made by Adaptimmune to The University of Texas M. D. Anderson Cancer Center: The University of Texas M. D. Anderson Cancer Center P.O. Box 4390 Houston, Texas 77210-4390 Or if payment is made by wire transfer, wired to the following: *** *** *** *** *** *** *** + +*** Portions of this page have been omitted pursuant to a request for Confidential Treatment and filed separately with the Commission. 40 + + + + + + *** *** + +*** Portions of this page have been omitted pursuant to a request for Confidential Treatment and filed separately with the Commission. 41 + + + + + + Exhibit III STRATEGIC COLLABORATION AGREEMENT - STUDY ORDER This Study Order ("Study Order"), effective as of the ___ day of ______("Effective Date" of Study Order), is entered into by and between The University of Texas M. D. Anderson Cancer Center, with a place of business located at 1515 Holcombe Blvd., Houston, TX 77030, USA ("MD Anderson"), a member institution of The University of Texas System ("System"); Adaptimmune Limited with a place of business at 101 Milton Park, Abingdon, Oxfordshire, OX14 4RY; and Adaptimmune LLC, with a place of business located at 2001 Market Street, Philadelphia, PA 1903, USA ("Adaptimmune") (MD Anderson and Adaptimmune each a "Party" and collectively the "Parties"). This Study Order is a part of, and is subject to, the terms and conditions of the Strategic Collaboration Agreement entered into between MD Anderson and Adaptimmune dated August ___ 2015 ("Agreement"). 1. The Parties enter into this Study Order in connection with: the [Pre-Clinical or Clinical]] Study entitled __________________, to be conducted pursuant for Clinical: to Protocol No. [Insert Protocol number] as attached hereto and incorporated herein. for Preclinical: to the workscope attached as Appendix A 2. _______ is the Principal Investigator (as defined in the Agreement) for the Study which will be conducted at MD Anderson. 3. Study Drug for the above referenced Study is ________________. 4. The parties may further exchange the following Proprietary Materials (other than Study Drug) with each other in connection with the Study: _________ being provided by [Insert name of providing party] _________ being provided by [Insert name of providing party] 5. Term: This Study Order will continue until the Study is completed, which is expected to be ________ (__) months after the Effective Date, or until terminated early as provided in the Agreement. 7. Notices. Any notice or other formal communication related to this Agreement must be in writing and will be deemed given only if: (a) delivered in person; or (b) sent by internationally recognized overnight delivery service or air courier guaranteeing next day delivery. Until a change of address is communicated, as provided below, all notices and other communications must be sent to the Parties at the following addresses or facsimile numbers: If to MD Anderson: The University of Texas 42 + + + + + + M. D. Anderson Cancer Center Attn: Vice President, Strategic Industry Ventures 1515 Holcombe Boulevard, Box 1643 Houston, TX 77030 With a copy to: The University of Texas M. D. Anderson Cancer Center Legal Services—Unit 1674 PO Box 301407 Houston, Texas 77230-1407 Attn: Chief Legal Officer And to: [insert investigator information] If to Adaptimmune: [To Be Added] With a copy to: [To Be Added] 12.2 All notices will be effective and will be deemed delivered: (a) if by personal delivery, delivery service or courier, on the date of delivery; and (b) if by electronic facsimile communication, on the date of transmission of the communication. Either Party may change its notice address by sending notice of the change to the other Party in the manner set forth above. 8. Specific superseding terms: N/A. In witness whereof, the Parties hereto have caused this Study Order to be executed by their duly authorized representatives to be effective as of the Effective Date. The University of Texas M. D. Anderson Cancer Center + + + + Adaptimmune LLC + + Date: + + + + + + + + Date: + + + + + + 43 + + + + + + Name + + + + Name Function: + + + + Function: Adaptimmune Limited + + + + + + + + Date: + + + + + + + + + + + + + + Name + + + + + + + +Title: + + + + + + + + READ AND UNDERSTOOD: I confirm that I have received a copy of the Agreement under which this Study Order is issued, and that I have read and understand the Agreement and this Study Order. Principal Investigator + + + + + + + + Date: + + + + + + + + + + + + + + + + + + + +Name + + 44 + + + + + + EXHIBIT IV 45 + + + + + + DRAFT RELEASE MD Anderson Cancer Center and Adaptimmune Form Strategic Alliance to Advance Development of Immunotherapies Targeting Multiple Cancers PHILADELPHIA, and HOUSTON, U.S.A. and OXFORD, UK, September XX, 2016 — Adaptimmune Therapeutics plc (Nasdaq: ADAP), a leader in T-cell therapy to treat cancer, and The University of Texas MD Anderson Cancer Center announced today that they have entered into a multi-year strategic alliance designed to expedite the development of novel adoptive T-cell therapies for multiple types of cancer. The alliance pairs MD Anderson's preclinical and clinical teams with Adaptimmune's scientists and proprietary SPEAR® (Specific Peptide Enhanced Affinity Receptor) T-cell technology platform, which enables Adaptimmune to identify targets expressed on solid and hematologic cancers and to develop affinity enhanced T-cell receptors (TCRs) with optimal potency and specificity against them. The teams will collaborate in a number of areas including preclinical and clinical development of Adaptimmune's SPEAR T-cell therapies targeting MAGE-A10 and future clinical stage first and second generation SPEAR T-cell therapies such as MAGE-A4 across a number of cancers, including bladder, lung, ovarian, head and neck, melanoma, esophageal and gastric cancers. The alliance will also drive research and development of other new SPEAR TCR therapies to targets in other tumor types such as breast cancers and facilitate clinical study participation by MD Anderson in other Adaptimmune trials. Access to MD Anderson's tumor repository will guide further target selection and clinical trial design, while its cancer immunology cores and expertise in performing translational medicine studies may help optimize the efficacy and safety of SPEAR T-cell therapies. "At MD Anderson, we are focused on providing the best possible care for cancer patients, including implementing important new technologies and treatment modalities," said Elizabeth Mittendorf, M.D., Ph.D., associate professor of Breast Surgical Oncology. David Hong, M.D., associate professor of Investigational Cancer Therapeutics at MD Anderson added, "It is our hope this alliance will allow us to address numerous solid tumors and augment the patient's immune system, directing it against tumors based on their specific molecular makeup." "We believe that this strategic alliance will provide a strong partnership for the development of multiple new first and subsequent generation SPEAR T-cell therapies against many intractable solid tumors in our near-term clinical programs," commented Rafael Amado, Adaptimmune's chief medical officer. "It will also generate invaluable data from patient samples that will help us understand these therapies and design the next generation of studies. We are very proud to form this alliance with the outstanding team of cancer immunologists at MD Anderson, and are confident that together we can move these novel immunotherapeutic candidates forward for patients who are fighting a variety of cancers." About MD Anderson The University of Texas MD Anderson Cancer Center in Houston ranks as one of the world's most respected centers focused on cancer patient care, research, education and prevention. The institution's sole mission is to end cancer for patients and their families around the world. MD Anderson is one of only 45 comprehensive cancer centers designated by the National Cancer Institute (NCI). MD Anderson is ranked No.1 for cancer care in U.S. News & World Report's "Best Hospitals" survey. It has ranked as one of the nation's top two hospitals since the survey began in 1990, and has ranked first for nine of the 46 + + + + + + past 10 years. MD Anderson receives a cancer center support grant from the NCI of the National Institutes of Health (P30 CA016672). About Adaptimmune Adaptimmune is a clinical stage biopharmaceutical company focused on novel cancer immunotherapy products based on its SPEAR® (Specific Peptide Enhanced Affinity Receptor) T-cell platform. Established in 2008, the company aims to utilize the body's own machinery - the T-cell - to target and destroy cancer cells by using engineered, increased affinity TCRs as a means of strengthening natural patient T-cell responses. Adaptimmune's lead program is a SPEAR T-cell therapy targeting the NY-ESO cancer antigen. Its NY-ESO SPEAR T-cell therapy has demonstrated signs of efficacy and tolerability in Phase 1/2 trials in solid tumors and in hematologic cancer types, including synovial sarcoma and multiple myeloma. Adaptimmune has a strategic collaboration and licensing agreement with GlaxoSmithKline for the development and commercialization of the NY-ESO TCR program. In addition, Adaptimmune has a number of proprietary programs. These include SPEAR T-cell therapies targeting the MAGE-A10 and AFP cancer antigens, which both have open INDs, and a further SPEAR T-cell therapy targeting the MAGE-A4 cancer antigen that is in pre-clinical phase with IND acceptance targeted for 2017. The company has identified over 30 intracellular target peptides preferentially expressed in cancer cells and is currently progressing 12 through unpartnered research programs. Adaptimmune has over 250 employees and is located in Oxfordshire, U.K. and Philadelphia, USA. For more information: http://www.adaptimmune.com Forward-Looking Statements This release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 (PSLRA). These forward-looking statements involve certain risks and uncertainties. Such risks and uncertainties could cause our actual results to differ materially from those indicated by such forward-looking statements, and include, without limitation: the success, cost and timing of our product development activities and clinical trials and our ability to successfully advance our TCR therapeutic candidates through the regulatory and commercialization processes. For a further description of the risks and uncertainties that could cause our actual results to differ materially from those expressed in these forward-looking statements, as well as risks relating to our business in general, we refer you to our Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission (SEC) on August 8, 2016, and our other SEC filings. The forward-looking statements contained in this press release speak only as of the date the statements were made and we do not undertake any obligation to update such forward-looking statements to reflect subsequent events or circumstances. Adaptimmune Contacts Will Roberts Vice President, Investor Relations T: (215) 825-9306 E: will.roberts@adaptimmune.com Margaret Henry Head of PR T: +44 (0)1235 430036 Mobile: +44 (0)7710 304249 47 + + + + + + E: margaret.henry@adaptimmune.com MD Anderson Contact: Ron Gilmore Rlgilmore1@mdanderson.org Phone: 713-745-1898 48 \ No newline at end of file diff --git a/full_contract_txt/ADIANUTRITION,INC_04_01_2005-EX-10.D2-RESELLER AGREEMENT.txt b/full_contract_txt/ADIANUTRITION,INC_04_01_2005-EX-10.D2-RESELLER AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..f2bf0669bd3dd978d07ed0604b87a84c7069370d --- /dev/null +++ b/full_contract_txt/ADIANUTRITION,INC_04_01_2005-EX-10.D2-RESELLER AGREEMENT.txt @@ -0,0 +1,145 @@ +Exhibit 10d-2 + + RESELLER AGREEMENT + + BY AND BETWEEN + + PIVX CORPORATION + + AND + + DETTO TECHNOLOGIES + +This Reseller Agreement is entered as of this ___ day of _________, 2004 ("Effective Date") by and between PivX Corporation, a California corporation, having its principal place of business at 23 Corporate Plaza Drive, Newport Beach, California, 92661 ("PivX") and Detto Technologies, a Washington corporation, having its principal place of business at 14320 NE 21st Street, Suite 11, Bellevue, Washington, 98007 ("Detto"). + +NOW THEREFORE, for good and valuable consideration, the parties hereby agree as follows: + +1. GRANT OF RIGHTS + +1.1 LICENSE. Subject to the terms and conditions of this Agreement, PivX hereby grants to Detto a non-transferable, exclusive license to distribute PivX's Qwik-Fix Pro and any documentation supporting Qwik-Fix Pro provided from time to time by PivX (the "Documentation") within North America, solely to third parties to whom Detto licenses Qwik-Fix Pro ("Third Parties"), and as governed by the terms set forth in Exhibit A (PivX/Detto Reseller Agreement Addendum). PivX also hereby grants to Detto a non-transferable, non-exclusive license to distribute PivX's Qwik-Fix Pro and the Documentation outside of North America, solely to Third Parties and as governed by the terms in Exhibit A. Detto shall have no right to reproduce Qwik-Fix Pro or any part thereof. All copies of Qwik-Fix Pro distributed by Detto shall be distributed pursuant to PivX's current Enterprise License Agreement, as amended by PivX from time to time (the "License"), a copy of which PivX will provide Detto. Detto shall not distribute Qwik-Fix Pro to any Third Party unless the Third Party has accepted the terms of PivX's current License under penalty of perjury and in writing. + +1.2 OWNERSHIP. As between PivX and Detto, PivX owns and retains all right, title, and interest in and to Qwik-Fix Pro and Documentation; all trademarks, service marks or trade names associated with Qwik-Fix Pro or Documentation (the "Trademarks"); all copyrights, patents, trade secret rights, and other intellectual property rights therein (collectively, together with Qwik-Fix Pro, Documentation, and Trademarks, the "Property"). Except as expressly granted herein, PivX does not grant to Detto any right or license, either express or implied, in Qwik-Fix Pro, Documentation or Property. Detto shall not reverse engineer, disassemble, decompile, or otherwise attempt to derive source code from Qwik-Fix Pro. + +1.3 PIVX CHANNELNET. PivX grants Detto access to PivX ChannelNet as governed by the terms set forth in Exhibit A. + +2. DETTO'S OBLIGATIONS + +2.1 DETTO'S MARKETING; PUBLIC RELATIONS. Detto obligations for marketing and public relations are governed under the terms in Exhibit A. + +2.2 TRADEMARKS; PROPERTY. During the term of this Agreement, Detto shall have the right to use and reproduce the Trademarks in connection with Detto's marketing, advertising, promotion and distribution of Qwik-Fix Pro. Detto's use of the Trademarks shall not create any right, title or interest therein. Detto shall use the Trademarks only in a manner which complies in all material respects with PivX's reasonable policies in effect from time to time, and all + + 1 + +such use shall be for PivX's benefit. Detto shall not remove, obscure or alter PivX's copyright notice or the Trademarks from Qwik-Fix Pro or Documentation. If Detto, in the course of distributing Qwik-Fix Pro, acquires any goodwill or reputation in any of the Trademarks, all such goodwill or reputation shall automatically be transferred to and shall vest in PivX when and as, on an on-going basis, such acquisition of goodwill or reputation occurs, as well as at the expiration or termination of this Agreement, without any separate payment or other consideration of any kind to Detto, and Detto agrees to take all such actions necessary to effect such vesting. Detto shall not contest the validity of any of the Property or PivX's exclusive ownership of them. Detto shall not adopt, use, or register, whether as a corporate name, trademark, service mark or other indication of origin, any of the Trademarks, or any word or mark confusingly similar to the Trademarks in any jurisdiction. + +2.3 SUPPORT FOR QWIK-FIX PRO. Detto shall provide for all customer support for Qwik-Fix Pro that it resells as governed by the terms set forth in Exhibit A. + +2.4 COMPLIANCE WITH APPLICABLE LAWS. Detto shall comply with all laws and regulations applicable to Detto's marketing and distribution of Qwik-Fix Pro hereunder. Without limiting the generality of the foregoing, Detto shall, at its own expense, make, obtain, and maintain in force at all times during the term of this Agreement, all filings, registrations, licenses, permits and authorizations + + + + + +in North America required for Detto to perform its obligations under this Agreement. + +2.5 SECURITY ISSUES. Detto shall take all action necessary to ensure that (a) Qwik-Fix Pro and Documentation on Detto's servers or computer systems is appropriately secured so that Qwik-Fix Pro and Documentation can only be viewed, copied, or utilized by licensed Third Parties; and (b) that the object code of the Courseware can only be accessed by employees authorized by PivX and cannot be copied or downloaded by any of Detto's licensees or by any other third party. In addition, Detto shall make its offices and equipment available in person, upon reasonable notice, and to the extent feasible, remotely, to PivX to inspect and test Detto's physical and technical set-up to ensure that Detto is complying with its obligations under this Section. Detto agrees to indemnify and hold PivX harmless in accordance with the provisions of Section 4.4 to the extent that Detto breaches its obligations under this Section 2.5. + +2.6 PROTECTION OF PROPRIETARY RIGHTS. Detto shall cooperate without charge (provided that PivX will reimburse out of pocket expenses as agreed in advance in writing), in PivX's efforts to protect PivX's rights in the Property. Detto shall promptly notify PivX of any infringements of PivX's Property Rights that come to Detto's attention. PivX shall have the exclusive right to institute infringement or other appropriate legal action against alleged infringers of its Property Rights. PivX shall incur all expenses in connection therewith and shall retain all monetary recoveries received therefrom. + +2.7 NO EXCESS REPRESENTATIONS OR WARRANTIES. Detto covenants that it shall not make any representations or warranties with respect to Qwik-Fix Pro or Documentation in excess of those provided by PivX herein. Detto agrees to indemnify and hold PivX harmless in accordance with the provisions of Section 4.4 to the extent that Detto breaches its covenant under this Section 2.7. + +2.8 FULFILLMENT OF DETTO'S OBLIGATIONS. Detto covenants that it will fulfill all of its contractual and legal obligations to its customers. Detto covenants that it will (a) provide its customers with first quality sales and technical support with respect to any copies or licenses of Qwik-Fix Pro sold by Detto, (b) promptly, courteously and appropriately respond to its customers questions, concerns and complaints, and (c) generally deal with its customers in a professional manner that shall add to the good reputation of Detto and PivX. To the extent that Detto fails to fulfill its contractual and legal obligations to its customers, Detto agrees that PivX may elect to fulfill those obligations, or any portion of them, and Detto shall reimburse PivX any costs and expenses so incurred by PivX. Detto agrees to indemnify and hold PivX harmless in accordance with the provisions of Section 4.4 to the extent that it breaches any of its covenants under this Section 2.8. + +2.9 U.S. GOVERNMENT - RESTRICTED RIGHTS. Detto covenants to require its customers to accept a click-wrap agreement that, among other things, provides that Qwik-Fix Pro and accompanying documentation are deemed to be "commercial computer Software" and "commercial computer Software documentation," + + 2 + +respectively, pursuant to DFAR Section 227.7202 and FAR Section 12.212, as applicable. Any use, modification, reproduction release, performance, display or disclosure of Qwik-Fix Pro and accompanying documentation by the U.S. Government shall be governed solely by the terms of the Agreement and shall be prohibited except to the extent expressly permitted by the terms of this Agreement. + +2.10 BUSINESS DEVELOPMENT. Detto will engage in future business development with PivX as governed by the terms set forth in Exhibit A. + +2.11 SALES FORECASTING; SALES METRICS; SALES REPORTING. Detto will provide sales forecasting, sales metrics and sales reporting to PivX as governed by the terms set forth in Exhibit A. + +3. PRICE AND PAYMENT; SHIPMENT AND DELIVERY + +3.1 SUGGESTED THIRD PARTY PRICES. Third Party prices are governed by the terms set forth in Exhibit A. + +3.2 PER COPY FEES. Detto shall pay to PivX for each unit of Qwik-Fix Pro distributed hereunder per copy fees (the "Per Copy Fees") as governed by the terms set forth in Exhibit A. In the event that PivX changes the Third Party prices, Per Copy Fees based on such changed prices shall apply to any order for Qwik-Fix Pro received by PivX after the effective date of the increase. PivX shall provide Detto with at least forty-five (45) days written notice of any increase in the Per Copy Fees. + +3.3 PAYMENT. All payments to PivX shall be made within thirty (30) days after the receipt by Detto of the PivX's invoice. Detto shall pay PivX a late charge on outstanding amounts due equal to one and one-half percent (1.50%) per month or the maximum amount allowed by law, whichever is less. All payments shall be made in United States Dollars, free of any withholding tax and of any currency control or other restrictions to PivX. PivX shall have the right, at reasonable times and on reasonable notice, to inspect and audit the books and records of Detto to verify the accuracy of any statements. In the event that such an inspection discloses any error of any amount, the parties shall by appropriate payment promptly adjust for the error. If Detto fails to make payments when due, PivX shall be entitled to, in its sole discretion, to take any one or more of the following: (a) place Detto on credit hold, in which case, PivX may cease to fulfill Detto's orders to any new Third Parties; (b) rescind Detto's right to sell or distribute any additional Qwik-Fix Pro or Documentation hereunder; and (c) to require that Detto direct all future payments, for licenses sold in the past or in the future, from the Third Parties directly to PivX or a lock box or + + + + + +an account designated by PivX for such purpose, to be applied by PivX to the payment default (and interest thereon) until such defaults have been satisfied. All amounts received by PivX hereunder shall be nonrefundable except for any payments received or held under PivX's control pursuant to clause "c" of the last sentence after Detto's payment default has been satisfied. + +3.4 TAXES, TARIFFS, FEES. PivX's Suggested Prices and Per Copy Fees do not include any national, state or local sales, use, value added or other taxes, customs duties, or similar tariffs and fees which may be required to be paid or collected upon the delivery of Qwik-Fix Pro or upon collection of the prices for Qwik-Fix Pro or the Per Copy Fees. Should any tax or levy be made, Detto agrees to pay such tax or levy and indemnify PivX against any claim for such amount. Detto represents and warrants to PivX that all Qwik-Fix Pro acquired hereunder is for redistribution in the ordinary course of Detto's business, and Detto agrees to provide PivX with appropriate resale certificate numbers and other documentation satisfactory to the applicable taxing authorities to substantiate any claim of exemption from any such taxes or fees. + +3.5 SHIPMENT AND DELIVERY. PivX shall electronically deliver Qwik-Fix Pro to Detto. Detto shall inspect all software delivered to it, upon receipt and shall, within 10 days of receipt, give written notice to PivX of any claim of damage or missing portions. Should Detto fail to give such notice, or fail to obtain an extension of such 10-day period from PivX, the packages shall be deemed to be accepted by Detto. PivX will reasonably accommodate Detto's request to replace its master copy of software that becomes corrupted or damaged. Detto shall contractually require its Third Parties to report any claim of damage or shortages for Qwik-Fix Pro shipped to them within thirty (30) days of the Third Parties receipt of such package (or the time required by applicable law, if longer). PivX shall use commercially reasonable efforts to meet delivery dates requested by Detto, but in no event shall PivX be liable for its failure to meet such dates. In the event that PivX shall be unable to meet Detto's requested ship dates, PivX shall advise Detto of the change in or actual delivery schedule. + + 3 + +3.6 SECURITY INTEREST. Detto hereby grants PivX a purchase money security interest in all Qwik-Fix Pro licensed to Detto, all physical media on which Qwik-Fix Pro is located, and all rights licensed to Detto pursuant to this Agreement in the amount of the Total Purchase Price. Detto also grants PivX a security interest in Detto's address list of Third Parties to secure Detto's payment, indemnification, and other obligations hereunder. To secure its rights hereunder, PivX shall have the right to file one or more UCC financing statements and to make such other filings as PivX shall deem appropriate. Detto shall cooperate with PivX with respect to all such filings. Upon PivX's demand, Detto agrees to execute promptly any financing statement, security agreement, chattel mortgage, applications for registration and/or similar documents, and to take any other action deemed necessary for registration or otherwise deemed necessary or desirable by PivX in order to perfect PivX's security interest hereunder. In the event of Detto's default hereunder, PivX may foreclose its security interests and exercise such other rights as provided under the UCC. + +4. WARRANTY AND LIABILITY + +4.1 PRODUCT WARRANTY. With respect to Qwik-Fix Pro delivered by PivX to Detto on CD-Rom, PivX warrants that for a period of thirty (30) days following delivery to Detto, the media on which Qwik-Fix Pro is furnished to Detto will be free from defects in materials and workmanship during normal use. PivX warrants that Qwik-Fix Pro will substantially conform to the user documentation. EXCEPT AS EXPRESSLY SET FORTH ABOVE, QWIK-FIX PRO AND DOCUMENTATION ARE PROVIDED "AS IS". PIVX HEREBY DISCLAIMS ALL OTHER WARRANTIES, EXPRESS, IMPLIED, OR STATUTORY, INCLUDING WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. + +4.2 PRODUCT INDEMNITY. PivX will indemnify, defend and hold Detto and its subsidiaries (each, an "Indemnified Party"), harmless from and against any and all claims, losses, costs, liabilities and expenses (including reasonable attorneys' fees), arising as a result of or in connection with any claim that Qwik-Fix Pro or Documentation infringes any intellectual property right of a third party provided: (i) the Indemnified Party promptly gives written notice of any claim to PivX; (ii) the Indemnified Party provides any assistance which PivX may reasonably request for the defense of the claim (with reasonable out of pocket expenses paid by PivX); and (iii) PivX has the right to control of the defense or settlement of the claim, provided, however, that the Indemnified Party shall have the right to participate in, but not control, any litigation for which indemnification is sought with counsel of its own choosing, at its own expense. Additionally, if an injunction or order issues restricting the use or distribution of any of Qwik-Fix Pro or Documentation, or if PivX determines that Qwik-Fix Pro or Documentation are likely to become the subject of a claim of infringement or violation of any proprietary right of any third party, PivX shall in its discretion and, at its option (a) procure the right to continue using, reproducing, and distributing Qwik-Fix Pro and Documentation; (b) replace or modify Qwik-Fix Pro and Documentation so that they become noninfringing, provided such modification or replacement does not materially alter or affect the specifications for or the use or operation of Qwik-Fix Pro; require return of Qwik-Fix Pro to PivX and refund any licensing fees relating to the future use of Qwik-Fix Pro. + +4.3 LIMITATION OF LIABILITY. EXCEPT FOR PIVX'S OBLIGATIONS UNDER SECTION 4.2, IN NO EVENT SHALL PIVX'S OR ITS LICENSORS' LIABILITY TO DETTO OR ANY THIRD PARTY ARISING OUT OF THIS AGREEMENT EXCEED THE TOTAL AMOUNT ACTUALLY RECEIVED BY PIVX HEREUNDER DURING THE PREVIOUS SIX (6) MONTHS. IN NO EVENT SHALL ANY PARTY OR PIVX'S LICENSORS BE LIABLE TO ANOTHER PARTY OR ANY THIRD PARTY FOR LOSS OF DATA, COSTS OF PROCUREMENTS OF SUBSTITUTE GOODS OR SERVICES OR ANY INDIRECT, INCIDENTAL, SPECIAL, OR CONSEQUENTIAL DAMAGES UNDER ANY CAUSE OF ACTION, EVEN IF + + + + + +SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. THIS LIMITATION SHALL APPLY NOTWITHSTANDING ANY FAILURE OF AN ESSENTIAL PURPOSE OF ANY LIMITED REMEDY PROVIDED HEREIN. + + 4 + +4.4 INDEMNIFICATION. Detto shall indemnify and hold PivX harmless from and against any and all damages, liabilities, costs and expenses (including reasonable attorney's fees) which PivX incurs as a result of any claim based on any breach of any representation or warranty, covenant or agreement by Detto under this Agreement or any breach of this Agreement by Detto; provided: (i) that PivX promptly gives written notice of any claim to Detto; (ii) at Detto's expense, PivX provides reasonable assistance which Detto may reasonably request for the defense of the claim; and (iii) Detto has the right to control the defense or settlement of the claim, provided, however, that PivX shall have the right to participate in, but not control, any litigation for which indemnification is sought with counsel of its own choosing, at its own expense. + +5. TERM AND TERMINATION + +5.1 TERM OF AGREEMENT. The term of this Agreement shall commence on the Effective Date and continue for six (6) months. + +5.2 TERMINATION OF AGREEMENT. PivX may terminate this Agreement for convenience by giving at least thirty (30) days written notice of termination to Detto. This Agreement may be terminated by either party in the event of a material breach of this Agreement by the other party that is not cured within thirty (30) days of the other party's receipt of written notice of such breach. If a material breach is cured within a thirty (30) day cure period this Agreement shall remain in effect as if no material breach had occurred. This Agreement shall terminate automatically without notice and without further action by the other party in the event that the other party becomes insolvent, which means it becomes unable to pay its debts in the ordinary course of business as they come due, or makes an assignment of this Agreement for the benefit of creditors. + +5.3 EFFECT OF TERMINATION. Upon the expiration or termination of this Agreement: + +(a) Detto shall, within thirty (30) days, pay to PivX all amounts due hereunder, return to PivX all products and demonstration copies received from PivX, erase any and all of the foregoing from all computer memories and storage devices within Detto's possession or control and, if requested, provide PivX with a signed written statement that Detto has complied with the foregoing obligations. All rights and licenses granted by PivX hereunder shall terminate, provided such termination shall not result in the termination of Licenses for copies of Qwik-Fix Pro which already have been purchased by Third Parties in accordance with the provisions of this Agreement. + +(b) The following shall survive termination of this Agreement: Section 1.2, the last two sentences of Section 2.2, Sections 2.3 through and including 2.9, Section 3.6, Section 4, this Section 5 and Section 6. 5.4 LIMITATION OF LIABILITY UPON TERMINATION. In the event of termination in accordance with Section 5.1, PivX shall not be liable to Detto because of such termination for compensation, reimbursement or damages on account of the loss of prospective profits or anticipated sales or on account of expenditures, inventory, investments, leases or commitments in connection with the business or goodwill of Detto. + +6. GENERAL PROVISIONS + +6.1 CONFIDENTIALITY. By virtue of this Agreement, each party may have access to information that is confidential to the other ("Confidential Information"). Confidential Information shall include, but not be limited to, software, documentation, formulas, methods, know how, processes, designs, new products, developmental work, marketing requirements, marketing plans, customer names, prospective customer names, the terms and pricing under the Agreement, and any information clearly identified in writing at the time of disclosure as confidential. A party's Confidential Information shall not include information that (a) is or becomes a part of the public domain through no act or omission of the other party; or (b) is independently developed by the other party without + + 5 + +use of or reference to the first party's Confidential Information. In the event, Confidential Information is required to be disclosed by law or other governmental authority, a party hereunder shall not be prohibited from disclosing such information by this Section provided that the responding party shall first have given prompt notice to the other party hereto and shall have made a reasonable effort to obtain a protective order restricting or limiting the disclosure of the Confidential Information to the extent possible. + +6.2 THIS AGREEMENT CONTROLS; MERGER; AMENDMENT; WAIVER. This Agreement and Exhibit A to this Agreement shall control Detto's distribution of Qwik-Fix Pro and Documentation. All different or additional terms or conditions in any Detto purchase order or similar document shall be null and void. This Agreement, including Exhibit A, constitutes the final, complete, and exclusive agreement between the parties with respect to the subject matter hereof and supersedes all prior or contemporaneous agreements. No modification, amendment, or waiver of any provision of this Agreement shall be effective unless in writing signed by both parties. The failure or delay by either party in exercising any right, power or remedy under this Agreement shall not operate as a waiver of any such right, power or remedy. + + + + + +6.3 NOTICES. All notices shall be given in writing and shall be considered effective when (a) personally delivered, (b) upon confirmed receipt if sent by electronic mail or facsimile; or (c) two (2) days after posting if sent by overnight registered private carrier (e.g. DHL, Federal Express, etc.). + +6.4 ASSIGNMENT. Detto may not assign any of its rights or delegate any of its obligations hereunder, whether by operation of law or otherwise, without PivX's prior written consent. Subject to the foregoing, this Agreement shall bind and inure to the benefit of the parties, their respective successors and permitted assigns. + +6.5 FORCE MAJEURE. PivX will not incur any liability to Detto or any other party on account of any loss or damage resulting from any delay or failure to perform all or any part of this Agreement (except for payment obligations) to the extent such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control, and without the negligence of, the parties. Such events, occurrences, or causes include, without limitation, acts of God, telecommunications outages, Internet outages, power outages, strikes, lockouts, riots, acts of war, floods, earthquakes, fires, and explosions. + +6.6 GENERAL. If any provision of this Agreement shall be held by a court of competent jurisdiction to be contrary to law, such provision shall be changed and interpreted so as to best accomplish the objectives of the original provision to the fullest extent allowed by law and the remaining provisions of this Agreement shall remain in full force and effect. Detto is an independent contractor, and nothing herein shall be construed to create an employer-employee, partnership, joint venture, or agency relationship between the parties. Detto shall have no authority, right or power to create any obligation or responsibility on behalf of PivX. + +6.7 GOVERNING LAW. This Agreement shall be governed by and construed under the laws of the State of California, excluding conflict of laws provisions and excluding the 1980 United Nations Convention on Contracts for the International Sale of Goods. The parties consent to the personal and exclusive jurisdiction of and venue in the state and federal courts of Orange County, California, U.S.A. for any disputes arising out of this Agreement. This Agreement may be executed simultaneously in two or more counterparts, each one of which shall be deemed an original, but all of which shall constitute one and the same instrument. + +IN WITNESS WHEREOF, the following duly authorized representatives have signed this Agreement on behalf of the entities indicated below, as of the date first above written. + +DETTO PIVX ----------------------------------------- -------------------------------------- + +----------------------------------------- -------------------------------------- By: By: ----------------------------------------- -------------------------------------- Title: Title: ----------------------------------------- -------------------------------------- Date: Date: ----------------------------------------- -------------------------------------- + + 6 \ No newline at end of file diff --git a/full_contract_txt/ADMA BioManufacturing, LLC - Amendment #3 to Manufacturing Agreement .txt b/full_contract_txt/ADMA BioManufacturing, LLC - Amendment #3 to Manufacturing Agreement .txt new file mode 100644 index 0000000000000000000000000000000000000000..d5c5996bb888921a9bd3bcbf6ad1c0f45618d29b --- /dev/null +++ b/full_contract_txt/ADMA BioManufacturing, LLC - Amendment #3 to Manufacturing Agreement .txt @@ -0,0 +1,43 @@ +Confidential treatment has been requested with respect to portions of this agreement as indicated by "[***]" and such confidential portions have been deleted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. Amendment #3 to the Manufacturing Agreement This Amendment #3 to the Manufacturing Agreement (this "Amendment #3") is made effective as of December 21, 2017 ("Amendment Effective Date"), by and between ADMA BioManufacturing, LLC, a Delaware limited liability company, having a place of business at 5800 Park of Commerce Boulevard NW, Boca Raton, Florida 33487 USA ("ADMA") and Sanofi Pasteur S.A., a company existing and organized under the laws of France ("Sanofi Pasteur"), having its registered head office at 14, espace Henry Vallee, 69007, Lyon, France. WHEREAS, ADMA (as successor-in-interest to Biotest Pharmaceuticals Corporation ("BPC") and Sanofi Pasteur are parties to that certain Manufacturing Agreement, effective September 30, 2011, as previously amended (including by that certain Amendment #2 to the Manufacturing Agreement, effective as of August 1, 2016, by and between BPC and Sanofi Pasteur ("Amendment #2")) (the "Agreement") for the production of Rabies Fraction II Paste (the "Product," as further defined in the Agreement) for Sanofi Pasteur from human plasma containing rabies antibodies; WHEREAS, BPC and Sanofi Pasteur are Parties to that certain Plasma Supply Agreement, effective January 20, 2009, as amended (the "Plasma Supply Agreement"), for the production of human Rabies Hyperimmune Plasma ("Rabies Plasma") by BPC for Sanofi Pasteur to be used in the manufacturing of Rabies Immunoglobulin; WHEREAS, the Rabies Plasma manufactured by BPC under the Plasma Supply Agreement may be transferred to ADMA to be fractionated into Product under the Agreement; WHEREAS, ADMA and Sanofi Pasteur desire to further amend the Agreement in order to memorialize the amendment of certain provisions in the Agreement; NOW, THEREFORE, in consideration of the respective promises contained herein and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the Parties hereto agree as follows: 1. All capitalized terms used and not defined in this Amendment shall have the meaning as set out in the Agreement. 2. The supply terms set forth in Section 1 of Amendment #2 (the "Prior Supply Terms") are hereby deleted in their entirety. In their place, the Parties agree to the following (and Section 2.1 of the Agreement is hereby amended as needed to implement the following): Sanofi Pasteur agrees to purchase and ADMA to manufacture [***] Batches of Product, which Batches will be produced over a period from Q3 2018 to Q3 2019. Attached hereto as Exhibit A is a detailed supply plan provided to ADMA by Sanofi Pasteur (the "Updated Supply Plan") that describes the agreed-upon timing for production of such Batches of Product, which supply plan is made an integral part hereof and shall be binding on the Parties. Prices for such [***] Batches of Product shall be in accordance with Section 3.2 of the Agreement (as amended in Amendment #2). + +BPC Initials ___ Sanofi Pasteur Initials ___ 1 + + + + + +Confidential treatment has been requested with respect to portions of this agreement as indicated by "[***]" and such confidential portions have been deleted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. The Parties agree to amend the Agreement to impose on ADMA an obligation to supply a minimum of [***] Batches of Product for that period stalling from Q4 2018 up to Q4 2019, as further specified in Exhibit A attached hereto. Should ADMA fail to supply a minimum of [***] Batches of Product (the "Minimum Volume") of Product during the time period as specified in this Amendment #3, ADMA agrees that Sanofi Pasteur shall be entitled to obtain from ADMA as liquidated damages, and not a penalty, amounting to $[***] ([***]) USD. ADMA accepts and declares that the amount of the liquidated damages is a fair and equitable compensation, and not a penalty, for such failure in reaching the volume commitment within the timelines agreed herein and in regard to the value and use of the Source Plasma. In addition to the Minimum Volume of Product to be manufactured by ADMA, should ADMA deliver the Minimum Volume of Product but fail to meet the Updated Supply Plan as provided in Exhibit A as attached hereto and made an integral part hereof, then it is agreed upon by the Parties that ADMA shall pay to Sanofi Pasteur an amount equal to $[***] ([***]) USD for each Batch of Product that is less than the agreed upon quantity in Exhibit A, as liquidated damages, and not as a penalty. The foregoing liquidated damages [***] respect to the [***] within the [***] agreed in this Amendment #3. [***] not be entitled to [***] by this Agreement as a result of [***], including without limitation [***]. Notwithstanding the foregoing, [***], sections 6.1 and 6.2 of the Agreement [***]. 3. Furthermore, should ADMA's compliance status under the FDA Warning Letter be escalated, and if such consequence limits ADMA's ability to supply the Batches of Product as specified in this Amendment #3 and the Updated Supply Plan or in case of failure by ADMA to supply any Batch of Product under this Amendment, Sanofi Pasteur shall be entitled to terminate immediately this Agreement upon written notice to ADMA and Sanofi Pasteur shall not be obligated to provide any additional payments (as outlined in Section 5 below and payments for any of the unproduced or delivered production batches) to ADMA from the date of such termination. In such a case, the remaining Source Plasma shall be immediately returned to Sanofi Pasteur, under ADMA's liability and expenses. Shipment of the Source Plasma to Sanofi Pasteur shall be made in compliance with the transportation conditions as provided in the Quality Agreement (as defined below), to be further amended by the Parties as contemplated in Section 9 below. + +BPC Initials ___ Sanofi Pasteur Initials ___ 2 + + + + + +Confidential treatment has been requested with respect to portions of this agreement as indicated by "[***]" and such confidential portions have been deleted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. 4. In the event of a non-conformance in the Source Plasma at the time of delivery of the Source plasma at ADMA's place, or in the event of damaged Source Plasma, which non-conformance, damage or loss in the Source Plasma occurred prior to the transfer of risks in the Source Plasma to ADMA as per Section 7 below, it is agreed upon by the Parties that Sanofi Pasteur shall not be responsible, nor liable, to compensate or indemnify ADMA for the loss of business arising from the fact that, in such a case, the Source Plasma will no longer be manufactured by ADMA and consequently Sanofi Pasteur will not pay for the unproduced batch. 5. In consideration for certain quantities of Product that ADMA would have been contractually obligated to supply, and that Sanofi Pasteur would have been contractually obligated to purchase, under the Agreement, but that will now not be supplied and purchased as a result of the Parties' agreement in Section 2 above, Sanofi Pasteur agrees to pay ADMA an amount of seven million (7,000,000 USD) (the "Compensation Fee") in five installments and will be invoiced as follows: (a) [***] USD upon execution of this Amendment #3 (b) [***] USD on March 1, 2018 (c) [***] USD on June 1, 2018 (d) [***] USD on September 1, 2018 (e) [***] USD on December 1, 2018 Such payments shall be made in accordance with Section 3.4 of the Agreement; provided, however, that the initial payment described in Section 5(a) above shall be due no later than December 31,2017. Each invoice shall reference this Amendment 3 and shall be sent at the following address: Sanofi Pasteur SA DSFF Pole de Lyon - Carteret Tri C5-2-01 14 Espace Henry Vallee CS 90119 69361 LYON CEDEX 07 - FRANCE Upon payment of the Compensation Fee, ADMA shall be fully compensated for any kind of prejudice or damages ADMA may suffer arising from or related to the decrease in the quantities of Product Sanofi Pasteur committed to purchase initially from ADMA as per the Prior Supply Terms. ADMA declares that the Compensation Fee is fair and equitable. 6. Upon full payment of the Compensation Fee, each Party, with the intention of binding itself, its Affiliates, shareholders, successors and assigns, hereby releases, remises and forever discharges the other Party, and its Affiliates, employees, directors, shareholders, successors and assigns, from all actions, causes of action, suits, debts, dues, sums of money, accounts, covenants, contracts, controversies, agreements, promises, damages, claims and demands whatsoever, in law, contract or equity, arising directly out of, or relating to the Updated Supply Plan and/or the amount of the Compensation Fee Sanofi agrees to pay to ADMA. + +BPC Initials ___ Sanofi Pasteur Initials ___ 3 + + + + + +Confidential treatment has been requested with respect to portions of this agreement as indicated by "[***]" and such confidential portions have been deleted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. 7. The Parties further agree to amend Section 6.5 of the Agreement as follows: (a) The liability cap set forth under section 6.5 is hereby amended to adapt to the provisions of this Amendment #3 and is therefore set at "[***]" instead of "[***]". (b) The last sentence of Section 6.5 of the Agreement is hereby deleted and replaced with the following: Unless Section 2.7 applies, and subject to any risk of loss assumed by BPC under the Plasma Agreement (as amended) or that certain [Termination, Settlement and Release Agreement] between BPC and Sanofi Pasteur, [of even date herewith], Sanofi Pasteur assumes all risk of loss for all Source Plasma (the "Sanofi Pasteur Property") while under storage conditions at BPC's warehouse except in case such loss occurs as a result of BPC negligence or willful misconduct, and Sanofi Pasteur hereby waives any and all rights of recovery against ADMA and its Affiliates, and against any of their respective directors, officers, employees, agents or representative, for any loss or damage to the Sanofi Pasteur Property while under storage conditions at BPC's warehouse. At such time that the Source Plasma is delivered to the ADMA loading dock located at 5800 Park of Commerce Blvd NW, Boca Raton, FL 33487, risk of loss for such delivered Source Plasma shall, as between Sanofi Pasteur and ADMA, transfer to ADMA. ADMA agrees to assume the risks of loss to the Sanofi Pasteur Property and shall reimburse Sanofi Pasteur, at the dollar value, the Source Plasma in case of damage or loss. In consideration of the foregoing, Section 6.5 is deleted in its entirety and replaced by the following: 6.5 Limitation of Liability: In no event shall either party be liable to the other party for incidental, indirect, special and consequential or punitive damages, including without limitation any claims for damages based upon lost profits or lost business opportunity. Except for the obligation of indemnity as set forth in Section 6.1 (c) with respect to claims by third parties for personal injury, illness or death (but not including property damage) resulting from the manufacture of the Product by BPC, aggregate damages for which ADMA shall be liable to Sanofi Pasteur hereunder, including without limitation costs of Source Plasma yield loss and/or rejected Batches, shall not exceed [***]. All claims by Sanofi Pasteur for breach or default under this Agreement shall be brought within [***] year after the cause of action comes into existence or otherwise shall be waived. This limitation of liability will not apply for damages that result from the gross negligence or the willful misconduct of a Party. + +BPC Initials ___ Sanofi Pasteur Initials ___ 4 + + + + + +Confidential treatment has been requested with respect to portions of this agreement as indicated by "[***]" and such confidential portions have been deleted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. Furthermore, unless Section 2.7 applies, and subject to any risk of loss assumed by BPC under the Plasma Agreement (as amended) or that certain [Termination, Settlement and Release Agreement] between BPC and Sanofi Pasteur, [of even date herewith], Sanofi Pasteur assumes all risk of loss for all Source Plasma (the "Sanofi Pasteur Property") while under storage conditions at BPC's warehouse except in case such loss occurs as a result of BPC negligence or willful misconduct, and Sanofi Pasteur hereby waives any and all rights of recovery against ADMA and its Affiliates, and against any of their respective directors, officers, employees, agents or representative, for any loss or damage to the Sanofi Pasteur Property while under storage conditions at BPC's warehouse. At such time that the Source Plasma is delivered to the ADMA loading dock located at 5800 Park of Commerce Blvd NW, Boca Raton, FL 33487, risk of loss for such delivered Source Plasma shall, as between Sanofi Pasteur and ADMA, transfer to ADMA. ADMA agrees to assume the risks of loss to the Sanofi Pasteur Property and shall reimburse Sanofi Pasteur, at the dollar value, the Source Plasma in case of damage or loss. 8. The Parties further agree to amend that certain Quality and Technical Agreement between Sanofi Pasteur and ADMA (as successor to BPC) effective as of September 15, 2015 (the "Quality Agreement") to modify the address where the Source Plasma shall be stocked and the conditions associated therewith, as well as to ensure consistency with the other terms of this Amendment. The Parties shall use best efforts to complete such amendment to the Quality Agreement within 60 days after the Amendment Effective Date. 9. All other terms of the Agreement shall remain in full force and effect except to the extent superseded by the terms of this Amendment #3. IN WITNESS WHEREOF, the parties hereby have caused this Amendment #3 to the Agreement to be executed and the persons signing below warrant that they are duly authorized to sign for and on behalf of their respective Parties. Made in two original copies. Sanofi Pasteur, S.A. By:/s/ Vincent Hingot Name: Vincent Hingot Title: Senior Vice President Industrial Affairs Date: 22 Dec. 2017 + +ADMA BioManufacturing, LLC By: /s/ Adam Grossman Name: Adam Grossman Title: President & CEO Date: 12-21-2017 + +BPC Initials ___ Sanofi Pasteur Initials ___ 5 + + + + + +Confidential treatment has been requested with respect to portions of this agreement as indicated by "[***]" and such confidential portions have been deleted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. Exhibit A [***] ADMA Initials ___ Sanofi Pasteur Initials ___ A-1 \ No newline at end of file diff --git a/full_contract_txt/ADUROBIOTECH,INC_06_02_2020-EX-10.7-CONSULTING AGREEMENT(1).txt b/full_contract_txt/ADUROBIOTECH,INC_06_02_2020-EX-10.7-CONSULTING AGREEMENT(1).txt new file mode 100644 index 0000000000000000000000000000000000000000..66e44474a12ed263821d62aedd25e91d5ee01f8b --- /dev/null +++ b/full_contract_txt/ADUROBIOTECH,INC_06_02_2020-EX-10.7-CONSULTING AGREEMENT(1).txt @@ -0,0 +1,63 @@ +Exhibit 10.7 + +CONSULTING AGREEMENT + +Aduro Biotech, Inc., with a place of business at 740 Heinz Avenue, Berkeley, CA 94710 ("Aduro") and IREYA B.V having an address at Staalwijkstraat 16, 2313 XR Leiden, the Netherlands, represented by Andrea van Elsas, ("Consultant") agree to all terms and conditions of this Consulting Agreement ("Agreement") dated June 1, 2020, effective as of July 1, 2020 ("Effective Date"). + +1. Services. At the request and direction of Aduro and the agreement of Consultant, Consultant will provide advice and consultation to Aduro with respect to its research, clinical development programs and other business matters as requested by Aduro from time to time. + +2. Compensation and Expenses. Aduro shall pay Consultant for the Services at the rate of €500 per hour. On a monthly basis, Consultant shall submit to Aduro an invoice for the hours worked along with itemized documentation and receipts and other information for pre-approved travel and/or out-of- pocket expenses as Aduro reasonably requests at the time reimbursement is requested. Consultant will not incur any travel and/or other out-of-pocket expenses of more than €5,000 individually or €20,000 in the aggregate without the prior written consent of Aduro. Aduro shall pay Consultant any amounts due that are not reasonably disputed by Aduro, by check or direct bank deposit, within thirty days after receiving the invoice. Consultant's sole compensation for the Services shall be the amounts set forth above in this Section 2. Invoices shall be sent to the attention of: + +ap@aduro.com Attn: Accounts Payable + +3. Term of Agreement. This Agreement shall begin on the Effective Date and shall continue until December 31, 2020, unless extended or earlier terminated. Either party may terminate this Agreement at any time on prior written notice to the other. This Agreement may be extended upon mutual written agreement of the parties. + +4. Confidential Information. + +(a) "Confidential Information" means any information, materials or methods in whatever form or embodiment that has not been made available by Aduro to the general public and any information, materials or methods in the possession or control of Consultant on the Effective Date or developed in the performance of the Services, except that Confidential Information shall not include any information, material or method that (i) at the time of disclosure is in, or after disclosure becomes part of the public domain, through no improper act on the part of Consultant or any of its employees; (ii) was in Consultant's possession at the time of disclosure, as shown by written evidence, and was not acquired, directly or indirectly, from work with Aduro; or (iii) Consultant receives from a third party, provided that such Confidential Information was not obtained by such third party, directly or indirectly, from Aduro. + +Specific information disclosed as part of the Confidential Information shall not be deemed to be in the public domain or in the prior possession of Consultant merely because it is encompassed or contemplated by more general information in the public domain or in the prior possession of the Consultant. Failure to mark any of the Confidential Information as confidential or proprietary shall not affect its status as Confidential Information under the terms of this Agreement. + + + + + +(b) Consultant shall keep all Confidential Information confidential, and Consultant shall not disclose, disseminate, publish, reproduce or use Confidential Information except to perform the Services. If Consultant is required by judicial or administrative process to disclose Confidential Information, Consultant shall promptly notify Aduro to allow Aduro a reasonable time to oppose such process and Consultant shall reasonably cooperate in Aduro's efforts. + +(c) On Aduro's request, or upon the termination or expiration of this Agreement, Consultant shall immediately: (i) stop using Confidential Information; (ii) return all materials provided by Aduro to Consultant that contain Confidential Information, except for one copy that may be retained by Consultant's legal counsel to confirm compliance with the obligations under this Agreement; (iii) destroy all copies of Confidential Information in any form including Confidential Information contained in computer memory or data storage apparatus or materials prepared by or for Consultant; and (iv) provide a written warranty to Aduro that Consultant has taken all the actions described in the foregoing Subparagraphs 4(c)(i-iii). + +(d) Any breach of this Paragraph 4 by an employee or agent of Consultant shall be deemed to be a breach by Consultant. + +(e) Defend Trade Secrets Act Notice: Nothing herein shall prevent Consultant from reporting possible violations of federal or state law or regulation to any governmental agency or entity, or making other disclosures that are protected under the whistleblower provisions of federal or state law or regulation. Consultant does not need the prior authorization of Aduro to make any such reports or disclosures and is not required to notify Aduro that it has made such reports or disclosures. In addition, as set forth in 18 U.S.C. §1833(b), Consultant shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made in confidence to a federal, state or local government official, either directly or indirectly, or to an attorney, and that is made solely for the purpose of reporting or investigating a suspected violation of law, or that is made in a complaint or other document filed in a lawsuit or other proceeding if such filing is made under seal. + +5. Independent Contractor. Consultant's relationship to Aduro shall be that of an independent contractor. Consultant shall be responsible for the timely payment of his or her own self-employment and income taxes. Neither party shall have any authority to bind the other. + +6. Intellectual Property. Aduro shall be the sole and exclusive owner of, and Consultant hereby assigns to Aduro, any and all writings, documents, work product, inventions, developments, improvements, discoveries, know-how, processes, chemical entities, compounds, plans, memoranda, tests, research, designs, specifications, models and data that Consultant makes, conceives, discovers or develops, either solely or jointly with any other person in performance of the Services (collectively, "Work Product"). Consultant shall promptly disclose to Aduro all information relating to Work Product as appropriate as part of the Services and at the request of Aduro. To the extent, if any, that Consultant has rights in or to any Work Product or any data or inventions developed in connection with work under this Agreement ("Aduro IP"), Consultant hereby irrevocably assigns and transfers to Aduro, and to the extent that an executory assignment is not enforceable, Consultant hereby agrees to assign and transfer to Aduro, in writing, from time to time, upon request, any and all right, title, or interest that Consultant has or may obtain in any Work Product and/or Aduro IP without the necessity of further consideration. Aduro shall be entitled to obtain and hold in its own name all copyrights, patents, trade secrets and trademarks with respect thereto. At Aduro's request and expense, Consultant shall assist Aduro in acquiring and maintaining its right in and title to, any Work Product. Such assistance may include, but will not be limited to, signing applications and other documents, cooperating in legal proceedings, and taking any other steps considered necessary or desirable by Aduro. + + + + + +7. Nonsolicitation. From the Effective Date and for twelve (12) months after the termination of this Agreement (the "Restricted Period"), Consultant shall not, without Aduro's prior written consent, directly or indirectly, solicit or encourage any employee or contractor of Aduro or its affiliates to terminate employment with, or cease providing Services to, Aduro or its affiliates. In the event of a breach of this Paragraph 7 by Consultant, Aduro shall be entitled to entry of injunctive relief. Such injunctive remedy shall be nonexclusive and shall be in addition to any and all other remedies which may be available to it at law or in equity, including without limitation, the recovery of direct, indirect, incidental, consequential and/or punitive damages. + +8. Representations. Consultant represents as follows: + +(a) Consultant is not subject to any other agreement that Consultant will violate by signing this Agreement; + +(b) Consultant has and shall continue to have the knowledge, experience, qualifications and required skill to perform, and shall perform, the Services in a professional manner; + +(c) Consultant to perform the Services in accordance with all Applicable Law; and + +(d) During the term of this Agreement, Consultant will not, directly or indirectly (whether for compensation or without compensation) engage in or provide consulting services, or enter into any agreement either written or oral, that would present a material conflict with any of the provisions of this Agreement, or would preclude Consultant from complying with the terms and conditions hereof. If during the term of this Agreement any situation or circumstance arises that might reasonably be expected to present a conflict of interest, or if Consultant might be unable to render Services or otherwise participate in such work without risk of breaching an obligation of confidentiality to another party, Consultant will promptly advise the Company's General Counsel of the situation and Company and Consultant shall, in good faith, attempt to resolve any such conflicts(s). If requested by the Company's General Counsel, Consultant will recuse herself from providing Services for the duration of the conflict. + +9. Material Non-Public Information. Consultant may have access to, or learn, "material non-public information" about Aduro or companies working with Aduro during the course of performing Services under this Agreement. Consultant acknowledges that it is illegal to buy or sell Aduro's stock or the stock of companies working with Aduro, on the basis of "material non-public information." It is also illegal to pass such information on to others who use it to buy or sell Aduro stock. Consultant is subject to and will comply with Aduro's Insider Trading and Trading Window Policy. + +10. Miscellaneous. This Agreement shall be construed and enforced in accordance with the laws of the State of California, without regard to the conflict of law principles of California or any other jurisdiction. This Agreement contains the entire agreement and understanding of the parties relating to the subject matter hereof and merges and supersedes all prior discussions, agreements and understandings of every nature between them with respect to the subject matter hereof. For the avoidance of doubt, this Agreement does not supersede or in modify in anyway any other written agreement between the parties. This Agreement may not be changed or modified, except by an agreement in writing signed by both of the parties hereto. The obligations of Consultant as set forth herein, other than Consultant's obligations to perform the Project, shall survive the termination of Consultant's engagement with Aduro. If any provision of this Agreement is found to be illegal or unenforceable, the other provisions of this Agreement shall remain effective and enforceable to the greatest extent permitted by law. This Agreement shall not be assignable by Consultant. This Agreement may be executed in any number of counterparts, and each such counterpart shall be deemed to be an original instrument, but all such counterparts together shall constitute but one agreement. + + + + + +ADURO BIOTECH, INC. CONSULTANT + +By: /s/ Stephen T. Isaacs By: /s/ Andrea van Elsas Name: Stephen T. Isaacs Name: Andrea van Elsas Title: President and Chief Executive Officer Title: Chief Scientific Officer \ No newline at end of file diff --git a/full_contract_txt/ADUROBIOTECH,INC_06_02_2020-EX-10.7-CONSULTING AGREEMENT.txt b/full_contract_txt/ADUROBIOTECH,INC_06_02_2020-EX-10.7-CONSULTING AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..66e44474a12ed263821d62aedd25e91d5ee01f8b --- /dev/null +++ b/full_contract_txt/ADUROBIOTECH,INC_06_02_2020-EX-10.7-CONSULTING AGREEMENT.txt @@ -0,0 +1,63 @@ +Exhibit 10.7 + +CONSULTING AGREEMENT + +Aduro Biotech, Inc., with a place of business at 740 Heinz Avenue, Berkeley, CA 94710 ("Aduro") and IREYA B.V having an address at Staalwijkstraat 16, 2313 XR Leiden, the Netherlands, represented by Andrea van Elsas, ("Consultant") agree to all terms and conditions of this Consulting Agreement ("Agreement") dated June 1, 2020, effective as of July 1, 2020 ("Effective Date"). + +1. Services. At the request and direction of Aduro and the agreement of Consultant, Consultant will provide advice and consultation to Aduro with respect to its research, clinical development programs and other business matters as requested by Aduro from time to time. + +2. Compensation and Expenses. Aduro shall pay Consultant for the Services at the rate of €500 per hour. On a monthly basis, Consultant shall submit to Aduro an invoice for the hours worked along with itemized documentation and receipts and other information for pre-approved travel and/or out-of- pocket expenses as Aduro reasonably requests at the time reimbursement is requested. Consultant will not incur any travel and/or other out-of-pocket expenses of more than €5,000 individually or €20,000 in the aggregate without the prior written consent of Aduro. Aduro shall pay Consultant any amounts due that are not reasonably disputed by Aduro, by check or direct bank deposit, within thirty days after receiving the invoice. Consultant's sole compensation for the Services shall be the amounts set forth above in this Section 2. Invoices shall be sent to the attention of: + +ap@aduro.com Attn: Accounts Payable + +3. Term of Agreement. This Agreement shall begin on the Effective Date and shall continue until December 31, 2020, unless extended or earlier terminated. Either party may terminate this Agreement at any time on prior written notice to the other. This Agreement may be extended upon mutual written agreement of the parties. + +4. Confidential Information. + +(a) "Confidential Information" means any information, materials or methods in whatever form or embodiment that has not been made available by Aduro to the general public and any information, materials or methods in the possession or control of Consultant on the Effective Date or developed in the performance of the Services, except that Confidential Information shall not include any information, material or method that (i) at the time of disclosure is in, or after disclosure becomes part of the public domain, through no improper act on the part of Consultant or any of its employees; (ii) was in Consultant's possession at the time of disclosure, as shown by written evidence, and was not acquired, directly or indirectly, from work with Aduro; or (iii) Consultant receives from a third party, provided that such Confidential Information was not obtained by such third party, directly or indirectly, from Aduro. + +Specific information disclosed as part of the Confidential Information shall not be deemed to be in the public domain or in the prior possession of Consultant merely because it is encompassed or contemplated by more general information in the public domain or in the prior possession of the Consultant. Failure to mark any of the Confidential Information as confidential or proprietary shall not affect its status as Confidential Information under the terms of this Agreement. + + + + + +(b) Consultant shall keep all Confidential Information confidential, and Consultant shall not disclose, disseminate, publish, reproduce or use Confidential Information except to perform the Services. If Consultant is required by judicial or administrative process to disclose Confidential Information, Consultant shall promptly notify Aduro to allow Aduro a reasonable time to oppose such process and Consultant shall reasonably cooperate in Aduro's efforts. + +(c) On Aduro's request, or upon the termination or expiration of this Agreement, Consultant shall immediately: (i) stop using Confidential Information; (ii) return all materials provided by Aduro to Consultant that contain Confidential Information, except for one copy that may be retained by Consultant's legal counsel to confirm compliance with the obligations under this Agreement; (iii) destroy all copies of Confidential Information in any form including Confidential Information contained in computer memory or data storage apparatus or materials prepared by or for Consultant; and (iv) provide a written warranty to Aduro that Consultant has taken all the actions described in the foregoing Subparagraphs 4(c)(i-iii). + +(d) Any breach of this Paragraph 4 by an employee or agent of Consultant shall be deemed to be a breach by Consultant. + +(e) Defend Trade Secrets Act Notice: Nothing herein shall prevent Consultant from reporting possible violations of federal or state law or regulation to any governmental agency or entity, or making other disclosures that are protected under the whistleblower provisions of federal or state law or regulation. Consultant does not need the prior authorization of Aduro to make any such reports or disclosures and is not required to notify Aduro that it has made such reports or disclosures. In addition, as set forth in 18 U.S.C. §1833(b), Consultant shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made in confidence to a federal, state or local government official, either directly or indirectly, or to an attorney, and that is made solely for the purpose of reporting or investigating a suspected violation of law, or that is made in a complaint or other document filed in a lawsuit or other proceeding if such filing is made under seal. + +5. Independent Contractor. Consultant's relationship to Aduro shall be that of an independent contractor. Consultant shall be responsible for the timely payment of his or her own self-employment and income taxes. Neither party shall have any authority to bind the other. + +6. Intellectual Property. Aduro shall be the sole and exclusive owner of, and Consultant hereby assigns to Aduro, any and all writings, documents, work product, inventions, developments, improvements, discoveries, know-how, processes, chemical entities, compounds, plans, memoranda, tests, research, designs, specifications, models and data that Consultant makes, conceives, discovers or develops, either solely or jointly with any other person in performance of the Services (collectively, "Work Product"). Consultant shall promptly disclose to Aduro all information relating to Work Product as appropriate as part of the Services and at the request of Aduro. To the extent, if any, that Consultant has rights in or to any Work Product or any data or inventions developed in connection with work under this Agreement ("Aduro IP"), Consultant hereby irrevocably assigns and transfers to Aduro, and to the extent that an executory assignment is not enforceable, Consultant hereby agrees to assign and transfer to Aduro, in writing, from time to time, upon request, any and all right, title, or interest that Consultant has or may obtain in any Work Product and/or Aduro IP without the necessity of further consideration. Aduro shall be entitled to obtain and hold in its own name all copyrights, patents, trade secrets and trademarks with respect thereto. At Aduro's request and expense, Consultant shall assist Aduro in acquiring and maintaining its right in and title to, any Work Product. Such assistance may include, but will not be limited to, signing applications and other documents, cooperating in legal proceedings, and taking any other steps considered necessary or desirable by Aduro. + + + + + +7. Nonsolicitation. From the Effective Date and for twelve (12) months after the termination of this Agreement (the "Restricted Period"), Consultant shall not, without Aduro's prior written consent, directly or indirectly, solicit or encourage any employee or contractor of Aduro or its affiliates to terminate employment with, or cease providing Services to, Aduro or its affiliates. In the event of a breach of this Paragraph 7 by Consultant, Aduro shall be entitled to entry of injunctive relief. Such injunctive remedy shall be nonexclusive and shall be in addition to any and all other remedies which may be available to it at law or in equity, including without limitation, the recovery of direct, indirect, incidental, consequential and/or punitive damages. + +8. Representations. Consultant represents as follows: + +(a) Consultant is not subject to any other agreement that Consultant will violate by signing this Agreement; + +(b) Consultant has and shall continue to have the knowledge, experience, qualifications and required skill to perform, and shall perform, the Services in a professional manner; + +(c) Consultant to perform the Services in accordance with all Applicable Law; and + +(d) During the term of this Agreement, Consultant will not, directly or indirectly (whether for compensation or without compensation) engage in or provide consulting services, or enter into any agreement either written or oral, that would present a material conflict with any of the provisions of this Agreement, or would preclude Consultant from complying with the terms and conditions hereof. If during the term of this Agreement any situation or circumstance arises that might reasonably be expected to present a conflict of interest, or if Consultant might be unable to render Services or otherwise participate in such work without risk of breaching an obligation of confidentiality to another party, Consultant will promptly advise the Company's General Counsel of the situation and Company and Consultant shall, in good faith, attempt to resolve any such conflicts(s). If requested by the Company's General Counsel, Consultant will recuse herself from providing Services for the duration of the conflict. + +9. Material Non-Public Information. Consultant may have access to, or learn, "material non-public information" about Aduro or companies working with Aduro during the course of performing Services under this Agreement. Consultant acknowledges that it is illegal to buy or sell Aduro's stock or the stock of companies working with Aduro, on the basis of "material non-public information." It is also illegal to pass such information on to others who use it to buy or sell Aduro stock. Consultant is subject to and will comply with Aduro's Insider Trading and Trading Window Policy. + +10. Miscellaneous. This Agreement shall be construed and enforced in accordance with the laws of the State of California, without regard to the conflict of law principles of California or any other jurisdiction. This Agreement contains the entire agreement and understanding of the parties relating to the subject matter hereof and merges and supersedes all prior discussions, agreements and understandings of every nature between them with respect to the subject matter hereof. For the avoidance of doubt, this Agreement does not supersede or in modify in anyway any other written agreement between the parties. This Agreement may not be changed or modified, except by an agreement in writing signed by both of the parties hereto. The obligations of Consultant as set forth herein, other than Consultant's obligations to perform the Project, shall survive the termination of Consultant's engagement with Aduro. If any provision of this Agreement is found to be illegal or unenforceable, the other provisions of this Agreement shall remain effective and enforceable to the greatest extent permitted by law. This Agreement shall not be assignable by Consultant. This Agreement may be executed in any number of counterparts, and each such counterpart shall be deemed to be an original instrument, but all such counterparts together shall constitute but one agreement. + + + + + +ADURO BIOTECH, INC. CONSULTANT + +By: /s/ Stephen T. Isaacs By: /s/ Andrea van Elsas Name: Stephen T. Isaacs Name: Andrea van Elsas Title: President and Chief Executive Officer Title: Chief Scientific Officer \ No newline at end of file diff --git a/full_contract_txt/AFSALABANCORPINC_08_01_1996-EX-1.1-AGENCY AGREEMENT.txt b/full_contract_txt/AFSALABANCORPINC_08_01_1996-EX-1.1-AGENCY AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..ee0c437f8084c6e85a81866638d75d563fb4f779 --- /dev/null +++ b/full_contract_txt/AFSALABANCORPINC_08_01_1996-EX-1.1-AGENCY AGREEMENT.txt @@ -0,0 +1,511 @@ +Exhibit 1.1 + + 1,265,000 Shares (subject to increase up to 1,454,750 shares in the event of an oversubscription) + + AFSALA BANCORP, INC. (a Delaware corporation) + + COMMON STOCK ($0.10 Par Value Per Share) + + Subscription Price: $10.00 Per Share + + AGENCY AGREEMENT + + ____________, 1996 + +Capital Resources, Inc. 1701 K Street, N.W. Suite 700 Washington, D.C. 20006 + +Ladies and Gentlemen: + + AFSALA Bancorp, Inc. (the "Company") and Amsterdam Federal Savings and Loan Association, a federally chartered mutual savings and loan association ("Association"), with its deposit accounts insured by the Savings Association Insurance Fund ("SAIF") administered by the Federal Deposit Insurance Corporation ("FDIC"), hereby confirm their agreement with Capital Resources, Inc. ("Capital Resources") as follows: + + SECTION 1. The Offering. The Association, in accordance with and pursuant to its plan of conversion adopted by the Board of Directors of the Association (the "Plan"), intends to be converted from a federally-chartered mutual savings and loan association to a federally-chartered stock savings bank and will sell all of its issued and outstanding stock to the Company. The Company will offer and sell its common stock (the "Common Stock") in a subscription offering ("Subscription Offering") to (1) tax qualified employee benefit plans of the Association, (2) depositors of the Association as of March 31, 1995 ("Eligible Account Holders"), (3) depositors of the Association as of June 30, 1996 ("Supplemental Eligible Account Holders"), (4) certain other deposit account holders and borrower members of the Association ("Other Members") and (5) to its employees, officers and directors, pursuant to rights to subscribe for shares of Common Stock (the "Shares"). Subject to the prior subscription rights of the above-listed parties, the Company may offer for sale in a public offering (the "Public Offering," and when referred to together with the Subscription Offering, the "Subscription and Public Offerings") conducted after the Subscription Offering, the Shares not so subscribed for or ordered in the Subscription Offering to the general public (all such offerees being referred to in the aggregate as "Eligible Offerees"). Shares may also be sold in the Public Offering by a selling group of broker-dealers organized and managed by Capital Resources. It is acknowledged that the purchase of Shares in the Subscription and Public Offerings is subject to maximum and minimum purchase limitations as described in the Plan and that the Company may reject in whole or in part any subscriptions received from subscribers in the Public Offering. + + The Company and the Association desire to retain Capital Resources to assist the Company with its sale of the Shares in the Subscription and Public Offerings. By and through this Agreement, the Company and the Association confirm the retention of Capital Resources to assist the Company and the Association during the Subscription and Public Offerings. + + The Company has filed with the Securities and Exchange Commission (the "Commission") a registration statement on Form S-l (File No. 333-6399) containing an offering prospectus relating to the Subscription and Public Offerings for the registration of the Shares under the Securities Act of 1933, as amended (the "1933 Act"), and has filed such amendments thereto, if any, and such amended prospectuses as may have been required to the date hereof (the "Registration Statement"). The prospectus, as amended, included in the Registration Statement at the time it initially becomes effective, is hereinafter called the "Offering Prospectus", except that if any prospectus is filed by the Company pursuant to Rule 424(b) or (c) of the rules and regulations of the Commission under the 1933 Act (the "1933 Act Regulations") differing from the offering prospectus included in the Registration Statement at the time it initially becomes effective, the term "Offering Prospectus" shall refer to the offering prospectus filed pursuant to Rule 424(b) or (c) from and after the time said offering prospectus is filed with or mailed to the Commission for filing. + + In accordance with Title 12, Part 563b of the Code of Federal Regulations (the "Conversion Regulations"), the Association has filed with the Office of Thrift Supervision (the "OTS") an Application for Approval of Conversion on Form AC (the "Conversion Application") including the Offering + + + + + +Prospectus and has filed such amendments thereto, if any, as may have been required by the OTS. The Conversion Application has been approved by the OTS. The Company has filed with the OTS its application on Form H-(e)lS (the "Holding Company Application") to acquire the Association under the Home Owners' Loan Act, as amended (12 U.S.C. ss. 1467a) ("HOLA"). + + SECTION 2. Retention of Capital Resources; Compensation; Sale and Delivery of the Shares. Subject to the terms and conditions herein set forth, the Company and the Association hereby appoint Capital Resources as their agent to advise and assist the Company and the Association with the Company's sale of the Shares in the Subscription and Public Offerings. + + On the basis of the representations, warranties, and agreements herein contained, but subject to the terms and conditions herein set forth, Capital Resources accepts such appointment and agrees to consult with and advise the Company and the Association as to matters relating to the Conversion and the Subscription and Public Offerings. It is acknowledged by the Company and the Association that Capital Resources shall not be required to purchase any Shares and shall not be obligated to take any action which is inconsistent with any applicable laws, regulations, decisions or orders. If requested by the Company or the Association, Capital Resources also may assemble and manage a selling group of broker dealers which are members of the National Association of Securities Dealers, Inc. (the "NASD") to participate in the solicitation of purchase orders for Shares under a selected dealers' agreement ("Selected Dealers' Agreement"). The obligations of Capital Resources pursuant to this Agreement shall terminate upon the completion or termination or abandonment of the Plan by the Company or the Association or upon termination of the Subscription and Public Offerings, or if the terms of the Conversion are substantially amended so as to materially and adversely change the role of Capital Resources, but in no event later than 45 days after the completion of the Subscription and Public Offerings (the "End Date"). All fees due to Capital Resources but unpaid will be payable to Capital Resources in next day funds at the earlier of the Closing Date (as hereinafter defined) or the End Date. In the event the Subscription and Public Offerings are extended beyond the End Date, the Company, the + + -2- + +Association and Capital Resources may mutually agree to renew this Agreement under mutually acceptable terms. + + In the event the Company is unable to sell a minimum of 935,000 Shares within the period herein provided, this Agreement shall terminate, and the Company shall refund to any persons who have subscribed for any of the Shares, the full amount which it may have received from them plus accrued interest as set forth in the Offering Prospectus; and none of the parties to this Agreement shall have any obligation to the other parties hereunder, except as set forth in this Section 2 and in Sections 7, 9 and 10 hereof. + + In the event the closing does not occur, the Conversion is terminated or otherwise abandoned, or the terms of the Conversion are substantially amended so as to materially and adversely change the role of Capital Resources, Capital Resources shall be reimbursed for all reasonable legal fees and out-of-pocket expenses for rendering financial advice to the Association concerning the structure of the Conversion, preparing a market and financial analysis, performing due diligence and assisting in the preparation of the Application for Conversion and the Registration Statement, which shall be paid upon such termination, abandonment or amendment or within five days of such event. + + If all conditions precedent to the consummation of the Conversion, including, without limitation, the sale of all Shares required by the Plan to be sold, are satisfied, the Company agrees to issue or have issued the Shares sold in the Subscription and Public Offerings and to release for delivery certificates for such Shares on the Closing Date (as hereinafter defined) against payment to the Company by any means authorized by the Plan, provided, however, that no certificates shall be released for such shares until the conditions specified in Section 7 hereof shall have been complied with to the reasonable satisfaction of Capital Resources and its counsel. The release of Shares against payment therefor shall be made on a date and at a time and place acceptable to the Company, the Association and Capital Resources. The date upon which the Company shall release or deliver the Shares sold in the Subscription and Public Offerings, in accordance with the terms hereof, is herein called the "Closing Date." + + Capital Resources shall receive the following compensation for its services hereunder: + + (a) (i) a marketing fee in the amount of (x) two percent (2.0%) of the aggregate dollar amount of all Shares sold in the Subscription and Public Offerings, excluding sales made through broker assisted purchases or by other NASD member firms participating in the Subscription and Public Offerings pursuant to the Selected Dealers' Agreement, if any (for which Capital Resources' compensation shall be pursuant to sub-paragraph (ii)) and excluding shares sold to the Association's Employee Stock Ownership Plan, directors, officers or employees and any member of such person's immediate family (defined to include children, spouse, parents, grandparents and grandchildren); + + (ii) a management fee in the amount of one percent and one-half (1.5%) of the aggregate dollar amount of Shares sold through broker assisted purchases or through selected dealers, if any. + + + + + + (b) Capital Resources shall be reimbursed for all reasonable out-of-pocket expenses, including, but not limited to, legal fees, travel, communications and postage, incurred by it whether or not the Conversion is successfully completed as set forth in Section 7 hereof. Capital Resources shall be reimbursed promptly for all out-of-pocket expenses upon receipt by the Company or the Association of a monthly itemized bill summarizing such expenses since the date of the last bill, if any, to the date + + -3- + +of the current bill. + + In the event other broker-dealers are assembled and managed by Capital Resources under a selling syndicate to participate in the Public Offering pursuant to the Selected Dealers' Agreement or participate in the Public Offering as assisting brokers, the Company and the Association will be directly responsible for the payment of selected dealers' commissions to such participating firms or assisting brokers' commissions up to a maximum of four percent (4%) and four percent (4%), respectively, of the amount of stock sold by such firms. Capital Resources' fees are limited to those stated in subparagraph (a) above and all other brokers will be paid fees based upon the capacity in which they are acting in the particular stock sale. + + All subscription funds received by Capital Resources (and if by check shall be made payable to the Company) or by other NASD registered broker-dealers soliciting subscriptions (if any) shall be transmitted (either by U.S. Mail or similar type of transmittal) to the Company by noon of the following business day. + + SECTION 3. Offering Prospectus; Subscription and Public Offerings. The Shares are to be initially offered in the Subscription and Public Offerings at the Purchase Price as set forth on the cover page of the Offering Prospectus. + + SECTION 4. Representations and Warranties. The Company and the Association jointly and severally represent and warrant to Capital Resources as follows: + + (a) The Registration Statement was declared effective by the Commission on __________, 1996. At the time the Registration Statement, including the Offering Prospectus contained therein (including any amendment or supplement thereto), became effective, the Registration Statement complied in all material respects with the requirements of the 1933 Act and the 1933 Act Regulations and the Registration Statement, including the Offering Prospectus contained therein (including any amendment or supplement thereto), any Blue Sky Application or any Sales Information (as such terms are defined previously herein or in Section 8 hereof) authorized by the Company or the Association for use in connection with the Subscription and Public Offerings did not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and at the time any Rule 424(b) or (c) Offering Prospectus was filed with or mailed to the Commission for filing and at the Closing Date referred to in Section 2, the Registration Statement including the Offering Prospectus contained therein (including any amendment or supplement thereto), any Blue Sky Application or any Sales Information (as such terms are defined previously herein or in Section 8 hereof) authorized by the Company or the Association for use in connection with the Subscription and Public Offerings will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the representations and warranties in this Section 4(a) shall not apply to statements in or omissions from such Registration Statement or Offering Prospectus made in reliance upon and in conformity with written information furnished to the Company or the Association by Capital Resources expressly regarding Capital Resources for use under the caption "The Conversion-Marketing Arrangements." + + (b) The Conversion Application, including the Offering Prospectus, was approved by the OTS on __________, 1996. At the time of the approval of the Conversion Application, including + + -4- + +the Offering Prospectus, by the OTS (including any amendment or supplement thereto) and at all times subsequent thereto until the Closing Date, the Conversion Application, including the Offering Prospectus, will comply in all material respects with the Conversion Regulations and any other rules and regulations of the OTS. The Conversion Application, including the Offering Prospectus (including any amendment or supplement thereto), does not include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; provided, however, that representations or warranties in this Section 4(b) shall not apply to statements or omissions made in reliance upon and in conformity with written information furnished to the Association by Capital Resources expressly regarding Capital Resources for use in the Offering Prospectus contained in the Conversion Application under the caption "The Conversion- Marketing Arrangements." + + + + + + (c) The Company has filed with the OTS the Holding Company Application and will have received, as of the Closing Date, approval of its acquisition of the Association from the OTS. + + (d) No order has been issued by the OTS, the Commission, the FDIC (and hereinafter reference to the FDIC shall include the SAIF), or to the best knowledge of the Company or the Association any State regulatory or Blue Sky authority, preventing or suspending the use of the Offering Prospectus and no action by or before any such government entity to revoke any approval, authorization or order of effectiveness related to the Conversion is, to the best knowledge of the Association or the Company, pending or threatened. + + (e) At the Closing Date referred to in Section 2, the Plan will have been adopted by the Board of Directors of both the Company and the Association, the Company and the Association will have completed all conditions precedent to the Conversion and the offer and sale of the Shares will have been conducted in accordance with the Plan, the Conversion Regulations and all other applicable laws, regulations, decisions and orders, including all terms, conditions, requirements and provisions precedent to the Conversion imposed upon the Company or the Association by the OTS, the Commission or any other regulatory authority and in the manner described in the Offering Prospectus. At the Closing Date, no person will have sought to obtain review of the final action of the OTS, to the knowledge of the Company or the Association, in approving the Plan or in approving the Conversion or the Company's application to acquire all of the capital stock and control of the Association pursuant to the HOLA or any other statute or regulation. + + (f) The Association is now a duly organized and validly existing federally-chartered savings and loan association in mutual form of organization and upon the Conversion will become a duly organized and validly existing federally-chartered savings bank in capital stock form of organization, in both instances duly authorized to conduct its business and own its property as described in the Registration Statement and the Offering Prospectus; the Company and the Association have obtained all material licenses, permits and other governmental authorizations currently required for the conduct of their respective businesses; all such licenses, permits and governmental authorizations are in full force and effect, and the Company and the Association are in all material respects complying with all laws, rules, regulations and orders applicable to the operation of their businesses; and the Association is in good standing under the laws of the United States and is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which its ownership of property or leasing of properties or the conduct of its business requires such qualification, unless the failure to be so qualified in one or more of such jurisdictions would not have a material adverse effect on the condition, financial or otherwise, or the business, operations or income of the Association. The Association does not own + + -5- + +equity securities or any equity interest in any other business enterprise except as described in the Offering Prospectus. Upon the completion of the Conversion of the Association pursuant to the Plan to a federally-chartered stock savings bank, (i) all of the authorized and outstanding capital stock of the Association will be owned by the Company, and (ii) the Company will have no direct subsidiaries other than the Association. The Conversion will have been effected in all material respects in accordance with all applicable statutes, regulations, decisions and orders; and except with respect to the filing of certain post-sale, post-conversion reports and documents in compliance with the 1933 Act Regulations or the OTS's resolutions or letters of approval. All terms, conditions, requirements and provisions with respect to the Conversion imposed by the Commission, the OTS and the FDIC, if any, will have been complied with by the Company and the Association in all material respects or appropriate waivers will have been obtained and all material notice and waiting periods will have been satisfied, waived or elapsed. + + (g) The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Delaware with corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Registration Statement and the Offering Prospectus, and the Company is qualified to do business as a foreign corporation in any jurisdiction in which the conduct of its business requires such qualification, except where the failure to so qualify would not have a material adverse effect on the business of the Company. + + (h) The Association is a member of the Federal Home Loan Bank of New York ("FHLBNY"); and the deposit accounts of the Association are insured by the FDIC up to the applicable limits. Upon consummation of the Conversion, the liquidation account for the benefit of Eligible Account Holders and Supplemental Eligible Account Holders will be duly established in accordance with the requirements of the Conversion Regulations. + + (i) The Company and the Association have good and marketable title to all assets owned by them which are material to the business of the Company and the Association and to those assets described in the Registration Statement and Offering Prospectus as owned by them, free and clear of all liens, charges, encumbrances or restrictions, except such as are described in the Registration Statement and Offering Prospectus or are not materially significant or important in relation to the business of the Company and the Association; and all of the leases and subleases material to the business of the Company and the Association under which the Company or the Association holds properties, including those described in the Registration Statement and Offering Prospectus, + + + + + +are in full force and effect. + + (j) The Association has received an opinion of its counsel, Malizia, Spidi, Sloane & Fisch, P.C., with respect to the federal income tax consequences of the Conversion of the Association from mutual to stock form, the acquisition of the capital stock of the Association by the Company, the sale of the Shares, and the reorganization of the Association as described in the Registration Statement and the Offering Prospectus and an opinion from KPMG Peat Marwick, LLP ("KPMG") with respect to the State income tax consequences of the proposed transaction; all material aspects of the opinions of Silver Freedman & Taff, L.L.P. and KPMG are accurately summarized in the Offering Prospectus; and the facts and representations upon which such opinions are based are truthful, accurate and complete, and neither the Association nor the Company will take any action inconsistent therewith. + + (k) The Company and the Association have all such power, authority, authorizations, approvals and orders as may be required to enter into this Agreement, to carry out the provisions and conditions hereof and to issue and sell the Capital Stock of the Association to the Company and Shares to be sold by the Company as provided herein and as described in the Offering Prospectus. The + + -6- + +consummation of the Conversion, the execution, delivery and performance of this Agreement and the consummation of the transactions herein contemplated have been duly and validly authorized by all necessary corporate action on the part of the Company and the Association and this Agreement has been validly executed and delivered by the Company and the Association and is the valid, legal and binding agreement of the Company and the Association enforceable in accordance with its terms (except as the enforceability thereof may be limited by bankruptcy, insolvency, moratorium, reorganization or similar laws relating to or affecting the enforcement of creditors' rights generally or the rights of creditors of savings and loan holding companies, the accounts of whose subsidiaries are insured by the FDIC or by general equity principles regardless of whether such enforceability is considered in a proceeding in equity or at law, and except to the extent, if any, that the provisions of Sections 9 and 10 hereof may be unenforceable as against public policy). + + (l) The Company and the Association are not in violation of any directive which has been delivered to the Company or the Association or of which management of the Company or the Association has actual knowledge from the OTS, the Commission, the FDIC or any other agency to make any material change in the method of conducting their businesses so as to comply in all material respects with all applicable statutes and regulations (including, without limitation, regulations, decisions, directives and orders of the OTS, the Commission and the FDIC) and except as set forth in the Registration Statement and the Offering Prospectus there is no suit or proceeding or, to the knowledge of the Company or the Association, charge, investigation or action before or by any court, regulatory authority or governmental agency or body, pending or, to the knowledge of the Company or the Association, threatened, which might materially and adversely affect the Conversion, the performance of this Agreement or the consummation of the transactions contemplated in the Plan and as described in the Registration Statement or which might result in any material adverse change in the condition (financial or otherwise), earnings, capital, properties, business affairs or business prospects of the Company or the Association or which would materially affect their properties and assets. + + (m) The financial statements which are included in the Registration Statement and which are part of the Offering Prospectus fairly present the financial condition, results of operations, retained earnings and cash flows of the Association at the respective dates thereof and for the respective periods covered thereby, and comply as to form in all material respects with the applicable accounting requirements of Title 12 of the Code of Federal Regulations and generally accepted accounting principles ("GAAP") (including those requiring the recording of certain assets at their current market value). Such financial statements have been prepared in accordance with generally accepted accounting principles consistently applied through the periods involved, present fairly in all material respects the information required to be stated therein and are consistent with the most recent financial statements and other reports filed by the Association with the OTS and the FDIC, except that accounting principles employed in such filings conform to requirements of such authorities and not necessarily to generally accepted accounting principles. The other financial, statistical and pro forma information and related notes included in the Offering Prospectus present fairly the information shown therein on a basis consistent with the audited and unaudited financial statements, if any, of the Association included in the Offering Prospectus, and as to the pro forma adjustments, the adjustments made therein have been properly applied on the basis described therein. + + (n) Since the respective dates as of which information is given in the Registration Statement and the Offering Prospectus, except as may otherwise be stated therein: (i) there has not been any material adverse change, financial or otherwise, in the condition of the Company or the Association, or of the Company and the Association considered as one enterprise, or in the earnings, capital, + + -7- + + + + + +properties, business affairs or business prospects of the Company or the Association, whether or not arising in the ordinary course of business, (ii) there has not been (A) an increase of greater than $500,000 in the long term debt of the Association or (B) an increase of $100,000 or more in loans past due 90 days or more or (C) an increase of $100,000 or more in real estate acquired by foreclosure or (D) a decrease of $50,000 or more in the allowance for loan losses or (E) any decrease in total retained earnings or (F) a decrease in net income from January 1, 1996 to date when compared to the like period in 1995 or (G) any change in total assets of the Association in an amount greater than $2,000,000 or (H) any other material change which would require an amendment to the Offering Prospectus; (iii) the Association has not issued any securities or incurred any liability or obligation for borrowing other than in the ordinary course of business; (iv) there have not been any material transactions entered into by the Company or the Association, except with respect to those transactions entered into in the ordinary course of business; and (v) the capitalization, liabilities, assets, properties and business of the Company and the Association conform in all material respects to the descriptions thereof contained in the Offering Prospectus, and neither the Company nor the Association have any material liabilities of any kind, contingent or otherwise, except as set forth in the Offering Prospectus. + + (o) As of the date hereof and as of the Closing Date, neither the Company nor the Association is in violation of its certificate of incorporation or charter, respectively, or its bylaws (and the Association will not be in violation of its charter or bylaws in capital stock form as of the Closing Date) or in default in the performance or observance of any material obligation, agreement, covenant, or condition contained in any contract, lease, loan agreement, indenture or other instrument to which it is a party or by which it, or any of its property may be bound which would result in a material adverse change in the condition (financial or otherwise), earnings, capital, properties, business affairs or business prospects of the Company or Association or which would materially affect their properties or assets. The consummation of the transactions herein contemplated will not (i) conflict with or constitute a breach of, or default under, the certificate of incorporation and bylaws of the Company, the charter and bylaws of the Association (in either mutual or capital stock form), or any material contract, lease or other instrument to which the Company or the Association has a beneficial interest, or any applicable law, rule, regulation or order; (ii) violate any authorization, approval, judgment, decree, order, statute, rule or regulation applicable to the Company or the Association; or (iii) with the exception of the Liquidation Account established in the Conversion, result in the creation of any material lien, charge or encumbrance upon any property of the Company or the Association. + + (p) No default exists, and no event has occurred which with notice or lapse of time, or both, would constitute a default on the part of the Company or the Association, in the due performance and observance of any term, covenant or condition of any indenture, mortgage, deed of trust, note, bank loan or credit agreement or any other instrument or agreement to which the Company or the Association is a party or by which any of them or any of their property is bound or affected in any respect which, in any such cases, is material to the Company or the Association; such agreements are in full force and effect; and no other party to any such agreements has instituted or, to the best knowledge of the Company or the Association, threatened any action or proceeding wherein the Company or the Association would or might be alleged to be in default thereunder. + + (q) Upon consummation of the Conversion, the authorized, issued and outstanding equity capital of the Company will be within the range set forth in the Registration Statement under the caption "Capitalization," and no shares of Common Stock have been or will be issued and outstanding prior to the Closing Date referred to in Section 2; the Shares will have been duly and validly authorized for issuance and, when issued and delivered by the Company pursuant to the Plan against payment of the + + -8- + +consideration calculated as set forth in the Plan and in the Offering Prospectus, will be duly and validly issued and fully paid and non-assessable; the issuance of the Shares will not violate any preemptive rights; and the terms and provisions of the Shares will conform in all material respects to the description thereof contained in the Registration Statement and the Offering Prospectus. Upon the issuance of the Shares, good title to the Shares will be transferred from the Company to the purchasers thereof against payment therefor, subject to such claims as may be asserted against the purchasers thereof by third party claimants. + + (r) No approval of any regulatory or supervisory or other public authority is required in connection with the execution and delivery of this Agreement or the issuance of the Shares, except for the approval of the OTS, the Commission and any necessary qualification or registration under the securities or blue sky laws of the various states in which the Shares are to be offered and as may be required under the regulations-of the National Association of Securities Dealers, Inc. ("NASD") and the National Association of Securities Dealers Automated Quotation ("NASDAQ") National Market. + + (s) KPMG, which has certified the financial statements of the Association included in the Registration Statement, are with respect to the Company and the Association independent public accountants within the meaning of the Code of Professional Ethics of the American Institute of Certified Public Accountants and Title 12 of the Code of Federal Regulations, Section 571.2(c)(3) and the 1933 Act and the 1933 Act Regulations. + + + + + + (t) The Company and the Association have (subject to all properly obtained extensions) timely filed all required federal and state tax returns, have paid all taxes that have become due and payable in respect of such returns, have made adequate reserves for similar future tax liabilities and no deficiency has been asserted with respect thereto by any taxing authority. + + (u) Appropriate arrangements have been made for placing the funds received from subscriptions for Shares in special interest-bearing accounts with the Association until all Shares are sold and paid for, with provision for refund to the purchasers in the event that the Conversion is not completed for whatever reason or for delivery to the Company if all Shares are sold. + + (v) The Company and the Association are in compliance in all material respects with the applicable financial record keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, and the regulations and rules thereunder. + + (w) To the knowledge of the Company and the Association, none of the Company, the Association nor employees of the Company or the Association have made any payment of funds of the Company or the Association as a loan to any person for the purchase of the Shares. + + (x) Prior to the Conversion, the Association was not authorized to issue shares of capital stock and neither the Company nor the Association has: (i) issued any securities within the last 18 months (except for notes to evidence other bank loans and reverse repurchase agreements or other liabilities); (ii) had any material dealings within the twelve months prior to the date hereof with any member of the NASD, or any person related to or associated with such member, other than discussions and meetings relating to the proposed Subscription and Public Offerings and routine purchases and sales of U.S. government and agency securities and other investment securities; (iii) entered into a financial or management consulting agreement except as contemplated hereunder; and (iv) engaged any intermediary between Capital Resources and the Company and the Association in connection with the offering of Common Stock, and no person is being compensated in any manner for such service. + + -9- + + (y) The Association has no subsidiaries. + + Any certificates signed by an officer of the Company or the Association and delivered to Capital Resources or its counsel that refer to this Agreement shall be deemed to be a representation and warranty by the Company or the Association to Capital Resources as to the matters covered thereby with the same effect as if such representation and warranty were set forth herein. + + SECTION 5. Capital Resources represents and warrants to the Company and the Association that: + + (a) Capital Resources is a corporation and is validly existing in good standing under the laws of the District of Columbia with full power and authority to provide the services to be furnished to the Company and the Association hereunder. + + (b) The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly and validly authorized by all necessary action on the part of Capital Resources, and this Agreement has been duly and validly executed and delivered by Capital Resources and is the legal, valid and binding agreement of Capital Resources, enforceable in accordance with its terms. + + (c) Each of Capital Resources and its employees, agents and representatives who shall perform any of the services hereunder shall be duly authorized and empowered, and shall have all licenses, approvals and permits necessary, to perform such services and Capital Resources is a registered selling agent in the jurisdictions listed in Exhibit A hereto and will remain registered in such jurisdictions in which the Company is relying on such registration for the sale of the Shares, until the Conversion is consummated or terminated. + + (d) The execution and delivery of this Agreement by Capital Resources, the consummation of the transactions contemplated hereby and compliance with the terms and provisions hereof will not conflict with, or result in a breach of, any of the terms, provisions or conditions of, or constitute a default (or event which with notice or lapse of time or both would constitute a default) under, the certificate of incorporation of Capital Resources or any agreement, indenture or other instrument to which Capital Resources is a party or by which its property is bound, or law or regulation by which Capital Resources is bound. + + (e) Funds received by Capital Resources to purchase Common Stock will be handled in accordance with Rule 15c2-4 under the Securities Exchange Act of 1934, as amended. + + SECTION 6. Covenants of the Company and Association. The Company and the Association hereby jointly and severally covenant with Capital Resources as follows: + + (a) The Company has filed the Registration Statement with the Commission. The Company will not, at any time after the date the Registration + + + + + +Statement is declared effective, file any amendment or supplement to the Registration Statement without providing Capital Resources and its counsel an opportunity to review such amendment or file any amendment or supplement to which amendment Capital Resources or its counsel shall reasonably object. + + (b) The Association has filed the Conversion Application with the OTS. The + + -10- + +Association will not, at any time after the date the Conversion Application is approved, file any amendment or supplement to the Conversion Application without providing Capital Resources and its counsel an opportunity to review such amendment or supplement or file any amendment or supplement to which amendment or supplement Capital Resources or its counsel shall reasonably object. + + (c) The Company and the Association will use their best efforts to cause any post-effective amendment to the Registration Statement to be declared effective by the Commission and any post-effective amendment to the Conversion Application to be approved by the OTS and will immediately upon receipt of any information concerning the events listed below notify Capital Resources and promptly confirm the notice in writing: (i) when the Registration Statement, as amended, has become effective; (ii) when the Conversion Application, as amended, has been approved by the OTS; (iii) of the receipt of any comments from the Commission, the OTS or the FDIC or any other governmental entity with respect to the Conversion or the transactions contemplated by this Agreement; (iv) of the request by the Commission, the OTS or the FDIC or any other governmental entity for any amendment or supplement to the Registration Statement or for additional information; (v) of the issuance by the Commission, the OTS, the FDIC or any other governmental entity of any order or other action suspending the Subscription or Public Offerings or the use of the Registration Statement or the Offering Prospectus or any other filing of the Company and the Association under the Conversion Regulations or other applicable law, or the threat of any such action; (vi) the issuance by the Commission, the OTS or the FDIC, or any other state authority, of any stop order suspending the effectiveness of the Registration Statement or of the initiation or threat of initiation or threat of any proceedings for that purpose; or (vii) of the occurrence of any event mentioned in paragraph (h) below. The Company and the Association will make every reasonable effort to prevent the issuance by the Commission, the OTS or the FDIC, or any other state authority of any such order and, if any such order shall at any time be issued, to obtain the lifting thereof at the earliest possible time. + + (d) The Company and the Association will provide Capital Resources and its counsel notice of its intention to file, and reasonable time to review prior to filing any amendment or supplement to the Conversion Application or the Holding Company Application and will not file any such amendment or supplement to which Capital Resources shall reasonably object or which shall be reasonably disapproved by its counsel. + + (e) The Company and the Association will deliver to Capital Resources and to its counsel two conformed copies of each of the following documents, with all exhibits: the Conversion Application and the Holding Company Application, as originally filed and of each amendment or supplement thereto, and the Registration Statement, as originally filed and each amendment thereto. Further, the Company and the Association will deliver such additional copies of the foregoing documents to counsel for Capital Resources as may be required for any NASD and blue sky filings. In addition, the Company and the Association will also deliver to Capital Resources such number of copies of the Offering Prospectus, as amended or supplemented, as Capital Resources may reasonably request. + + (f) The Company will furnish to Capital Resources, from time to time during the period when the Offering Prospectus (or any later prospectus related to this Offering) is required to be delivered under the 1933 Act or the Securities Exchange Act of 1934 (the "1934 Act"), such number of copies of such prospectus (as amended or supplemented) as Capital Resources may reasonably request for the purposes contemplated by the 1933 Act or the 1934 Act or the respective applicable rules and regulations of the Commission thereunder. The Company authorizes Capital Resources to use the Offering Prospectus (as amended or supplemented, if amended or supplemented) for any lawful manner in + + -11- + +connection with the sale of the Shares by Capital Resources. + + (g) The Company and the Association will comply in all material respects with any and all terms, conditions, requirements and provisions with respect to the Conversion and the transactions contemplated thereby imposed by the Commission, by applicable state law and regulations, and by the 1933 Act, the 1934 Act and the rules and regulations of the Commission promulgated under such statutes, to be complied with prior to or subsequent to the Closing Date and when the Offering Prospectus is required to be delivered, the Company and the Association will comply in all material respects, at their own expense, with all requirements imposed upon them by the OTS, the Conversion Regulations, the FDIC, the Commission, by applicable state law and regulations and by the 1933 Act, the 1934 Act and the rules and regulations of the Commission promulgated under such statutes, including, without limitation, Rule + + + + + +10b-6 under the 1934 Act, in each case as from time to time in force, so far as necessary to permit the continuance of sales or dealing in shares of Common Stock during such period in accordance with the provisions hereof and the Offering Prospectus. + + (h) If, at any time during the period when the Offering Prospectus relating to the Shares is required to be delivered, any event relating to or affecting the Company or the Association shall occur, as a result of which it is necessary or appropriate, in the reasonable opinion of counsel for the Company and the Association or in the reasonable opinion of Capital Resources' counsel, to amend or supplement the Registration Statement or Offering Prospectus in order to make the Registration Statement or Offering Prospectus not misleading in light of the circumstances existing at the time it is delivered to a purchaser, the Company and the Association will, at their expense, forthwith prepare, file with the Commission and the OTS and furnish to Capital Resources a reasonable number of copies of any amendment or amendments of, or a supplement or supplements to, the Registration Statement or Offering Prospectus (in form and substance reasonably satisfactory to Capital Resources and its counsel after a reasonable time for review) which will amend or supplement the Registration Statement or Offering Prospectus so that as amended or supplemented it will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances existing at the time the Offering Prospectus reasonably is delivered to a purchaser, not misleading. For the purpose of this Agreement, the Company and the Association each will timely furnish to Capital Resources such information with respect to itself as Capital Resources may from time to time request. + + (i) The Company and the Association will take all necessary actions, in cooperation with Capital Resources, and furnish to whomever Capital Resources may direct, such information as may be required to qualify or register the Shares for offering and sale by the Company under the applicable securities or blue sky laws of such jurisdictions in which the shares are required under the Conversion Regulations to be sold or as Capital Resources may reasonably designate and as reasonably agreed to by the Association; provided, however, that the Company shall not be obligated to file any general consent to service of process or to qualify to do business in any jurisdiction in which it is not so qualified. In each jurisdiction where any of the Shares shall have been qualified or registered as above provided, the Company will make and file such statements and reports in each fiscal period as are or may be required by the laws of such jurisdiction. + + (j) The liquidation account for the benefit of account holders with account balances of $50 or more as of the applicable record dates will be duly established and maintained in accordance with the requirements of the OTS, and such Eligible Account Holders and Supplemental Eligible Account Holders who continue to maintain their savings accounts in the Association will have an inchoate interest + + -12- + +in their pro rata portion of the liquidation account which shall have a priority superior to that of the holders of shares of Common Stock in the event of a complete liquidation of the Association. + + (k) The Company and the Association will not sell or issue, contract to sell or otherwise dispose of, for a period of 180 days after the date hereof, without Capital Resources' prior written consent, any shares of Common Stock other than in connection with any plan or arrangement described in the Offering Prospectus. + + (l) The Company shall register its Common Stock under Section 12(g) of the 1934 Act concurrent with the stock offering pursuant to the Plan and shall request that such registration be effective upon completion of the Conversion. The Company shall maintain the effectiveness of such registration for not less than three years or such shorter period as permitted by the OTS. + + (m) During the period during which the Company's common stock is registered under the 1934 Act or for three years from the date hereof, whichever period is greater, the Company will furnish to its stockholders as soon as practicable after the end of each fiscal year an annual report (including a balance sheet and statements of income, stockholders' equity and changes in financial position or cash flow statement of the Company as at the end of and for such year, certified by independent public accountants and prepared in accordance with Regulation S-X under the 1934 Act). + + (n) During the period of three years from the date hereof, the Company will furnish to Capital Resources: (i) a copy of each report of the Company furnished to or filed with the Commission under the 1934 Act or any national securities exchange or system on which any class of securities of the Company is listed or quoted (including but not limited to, reports on Form 10-K, 10-Q and 8-K and all proxy statements and annual reports to stockholders), a copy of each report of the Company mailed to its stockholders or filed with the Commission or the OTS or any other supervisory or regulatory authority or any national securities exchange or system on which any class of securities of the Company is listed or quoted, each press release and material news items and additional public documents and information with respect to the Company or the Association as Capital Resources may reasonably request, and (ii) from time to time, such other publicly available information concerning the Company and the Association as Capital Resources may reasonably request. + + (o) The Company and the Association will use the net + + + + + +proceeds from the sale of the Shares in the manner set forth in the Offering Prospectus under the caption "Use of Proceeds." + + (p) Other than as permitted by the Conversion Regulations, the 1933 Act, the 1933 Act Regulations and the laws of any state in which the Shares are qualified for sale, neither the Company nor the Association will distribute any prospectus, offering circular or other offering material in connection with the offer and sale of the Shares. + + (q) The Company will make generally available to its security holders as soon as practicable, but not later than 90 days after the close of the period an earnings statement (in form complying with the provisions of Rule 158 under the 1933 Act) covering a twelve-month period beginning not later than the first day of the Company's fiscal quarter next following the effective date (as defined in said Rule 158) of the Registration Statement. + + (r) The Company will file with the Commission such reports on Form SR as may be required pursuant to Rule 463 under the 1933 Act. + + -13- + + (s) The Company will obtain approval for and maintain quotation of the shares on the NASDAQ National Market effective on or prior to the Closing Date. + + (t) The Association will maintain appropriate arrangements for depositing all funds received from persons mailing subscriptions for or orders to purchase Shares in the Subscription and Public Offerings on an interest-bearing basis at the rate described in the Offering Prospectus until the Closing Date and satisfaction of all conditions precedent to the release of the Association's obligation to refund payments received from persons subscribing for or ordering Shares in the Subscription and Public Offerings in accordance with the Plan as described in the Offering Prospectus or until refunds of such funds have been made to the persons entitled thereto or withdrawal authorizations canceled in accordance with the Plan and as described in the Offering Prospectus. The Association will maintain such records of all funds received to permit the funds of each subscriber to be separately insured by the FDIC (to the maximum extent allowable) and to enable the Association to make the appropriate refunds of such funds in the event that such refunds are required to be made in accordance with the Plan and as described in the Offering Prospectus. + + (u) The Company will promptly register as a savings and loan holding company under the HOLA. + + (v) The Company and the Association will take such actions and furnish such information as are reasonably requested by Capital Resources in order for Capital Resources to ensure compliance with the "Interpretation of the Board of Governors of the NASD on Free Riding and Withholding." + + (w) The Company will conduct its businesses in compliance in all material respects with all applicable federal and state laws, rules, regulations, decisions, directives and orders, including all decisions, directives and orders of the Commission, the OTS and the FDIC. + + (x) The Association will not amend the Plan of Conversion without Capital Resources' prior written consent in any manner that, in the reasonable opinion of Capital Resources, would materially and adversely affect the sale of the Shares or the terms of this Agreement. + + (y) The Company shall advise Capital Resources, if necessary, as to the allocation of the Shares in the event of an oversubscription and shall provide Capital Resources with any information necessary to assist Capital Resources in allocating the Shares in such event and such information shall be accurate and reliable. + + SECTION 7. Payment of Expenses. Whether or not this Agreement becomes effective, the Conversion is completed or the sale of the Shares by the Company is consummated, the Company and Association jointly and severally agree to pay directly for or to reimburse Capital Resources for (to the extent that such expenses have been reasonably incurred by Capital Resources) (a) all filing fees and expenses incurred in connection with the qualification or registration of the Shares for offer and sale by the Company under the securities or blue sky laws of any jurisdictions Capital Resources and the Company may agree upon pursuant to subsection (i) of Section 6 above, including counsel fees paid or incurred by the Company, the Association or Capital Resources in connection with such qualification or registration or exemption from qualification or registration; (b) all filing fees in connection with all filings with the NASD; (c) any stock issue or transfer taxes which may be payable with respect to the sale of the Shares to purchasers in the Conversion; (d) reasonable and necessary expenses of the Conversion, + + -14- + +including but not limited to, attorneys' fees, transfer agent, registrar and other agent charges, fees relating to auditing and accounting or other advisors and costs of printing all documents necessary in connection with the Conversion; + + + + + +and (e) out-of-pocket expenses incurred by Capital Resources in connection with the Conversion or any of the transactions contemplated hereby, including, without limitation, the fees of its attorneys, and reasonable communication and travel expenses. + + SECTION 8. Conditions to Capital Resources' Obligations. Capital Resources' obligations hereunder, as to the Shares to be delivered at the Closing Date, are subject to the condition that all representations and warranties and other statements of the Company and the Association herein are, at and as of the commencement of the Subscription and Public Offerings and at and as of the Closing Date, true and correct in all material respects, the condition that the Company and the Association shall have performed in all material respects all of their obligations hereunder to be performed on or before such dates, and to the following further conditions: + + (a) At the Closing Date, the Company and the Association will have completed the conditions precedent to, and shall have conducted the Conversion in all material respects in accordance with, the Plan, the Conversion Regulations and all other applicable laws, regulations, decisions and orders, including all terms, conditions, requirements and provisions precedent to the Conversion imposed upon them by the OTS. + + (b) The Registration Statement shall have been declared effective by the Commission and the Conversion Application approved by the OTS not later than 5:30 p.m. (eastern time) on the date of this Agreement, or with Capital Resources' consent at a later time and date; and at the Closing Date no stop order suspending the effectiveness of the Registration Statement shall have been issued under the 1933 Act or proceedings therefore initiated or threatened by the Commission or any state authority, and no order or other action suspending the authorization of the Offering Prospectus or the consummation of the Conversion shall have been issued or proceedings therefore initiated or, to the Company's or Association's knowledge, threatened by the Commission, the OTS, the FDIC or any state authority. + + (c) At the Closing Date, Capital Resources shall have received: + + (1) The favorable opinion, dated as of the Closing Date addressed to Capital Resources and for its benefit, of Malizia, Spidi, Sloane & Fisch, P.C., counsel for the Company and the Association dated the Closing Date, addressed to Capital Resources and in form and substance to the effect that: + + (i) The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Delaware. + + (ii) The Company has corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Registration Statement and the Offering Prospectus; and the Company is qualified to do business as a foreign corporation in New York, to the best of such counsel's knowledge based on the conferences and document review specified in item (xiii) below, the only state in which it is doing business. + + (iii) The Association was a duly organized and is a validly existing federally-chartered savings and loan association in mutual form of organization and upon the Conversion will become a duly organized and validly existing federally-chartered savings bank in capital stock form of organization, in + + -15- + +both instances duly authorized to conduct its business and own its property as described in the Registration Statement; and the Association is in good standing under the laws of the United States and is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which its ownership of property or leasing of properties or the conduct of its business requires such qualification unless the failure to be so qualified in one or more such jurisdictions would not have a material adverse effect on the condition, financial or otherwise, or the business, operations or income or business prospects of the Association. The activities of the Association as described in the Offering Prospectus, insofar as they are material to the operations and financial condition of the Association, are permitted by the rules, regulations and resolutions and practices of the OTS or the FDIC and any other federal or state authorities. + + (iv) The Association is a member of the FHLBNY, and the deposit accounts of the Association are insured by the FDIC up to the maximum amount allowed under law and to the best of such counsel's knowledge no proceedings for the termination or revocation of such insurance are pending or threatened; and the description of the liquidation account as set forth in the Registration Statement and the Offering Prospectus under the caption "The Conversion - Effects of Conversion to Stock Form on Depositors and Borrowers of the Bank - Liquidation Account" has been reviewed by such counsel and is accurate in all material respects. + + (v) Upon consummation of the Conversion, the authorized, issued and outstanding capital stock of the Company will be as set forth in the Registration Statement and the Offering Prospectus under the caption "Capitalization," and no shares of Common Stock have been issued prior to the Closing Date; at the time of the Conversion, the Shares subscribed for pursuant to the Offerings will have been duly and validly authorized for issuance, and when issued and delivered by the Company pursuant to the Plan against payment of + + + + + +the consideration calculated as set forth in the Plan, will be duly and validly issued and fully paid and non-assessable; and the issuance of the Shares is not subject to preemptive rights. + + (vi) The issuance and sale of the common stock of the Association to the Company have been duly and validly authorized by all necessary corporate action on the part of the Company and the Association and, upon payment therefor in accordance with the terms of the Plan of Conversion, will be duly and validly issued, fully paid and non-assessable and will be owned of record by the Company, free and clear of any mortgage, pledge, lien, encumbrance or claim (legal or equitable). + + (vii) The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly and validly authorized by all necessary action on the part of the Company and the Association; and this Agreement is a valid and binding obligation of the Company and the Association, enforceable in accordance with its terms (except as the enforceability thereof may be limited by bankruptcy, insolvency, moratorium, reorganization or similar laws relating to or affecting the enforcement of creditors' rights generally or the rights of creditors of savings associations or savings and loan holding companies, the accounts of whose subsidiaries are insured by the FDIC or by general equity principles, regardless of whether such enforceability is considered in a proceeding in equity or at law, and except to the extent, if any, that the provisions of Sections 9 and 10 hereof may be unenforceable as against public policy). + + (viii) The Plan has been duly adopted by the required vote of the Directors of the Company and the Association and members of the Association. + + -16- + + (ix) Subject to the satisfaction of the conditions to the OTS's approval of the Conversion and the Company's application to acquire the Association, no further approval, registration, authorization, consent or other order of any regulatory agency, public board or body is required in connection with the execution and delivery of this Agreement, the issuance of the Shares and the consummation of the Conversion, except as may be required under the regulations of the NASD and the NASDAQ National Market. The Conversion has been consummated in all material respects in accordance with all applicable provisions of the HOLA, the Conversion Regulations, Federal and State law and all applicable rules and regulations promulgated thereunder. + + (x) The Conversion Application including the Offering Prospectus as filed with the OTS was complete in all material respects and has been approved by the OTS. The OTS has issued its order of approval under the savings and loan holding company provisions of the HOLA, and the purchase by the Company of all of the issued and outstanding capital stock of the Association has been authorized by the OTS and no action has been taken, or to counsel's knowledge is pending or threatened, to revoke any such authorization or approval. + + (xi) The Registration Statement is effective under the 1933 Act and no stop order suspending the effectiveness has been issued under the 1933 Act or proceedings therefor initiated or, to counsel's knowledge, threatened by the Commission. + + (xii) At the time the Conversion Application, including the Offering Prospectus contained therein, was approved, the Conversion Application including the Offering Prospectus contained therein (as amended or supplemented, if so amended or supplemented) complied as to form in all material respects with the requirements of all applicable federal laws and the rules, regulations, decisions and orders of the OTS (except as to the financial statements, other financial data and stock valuation information included therein as to which such counsel need express no opinion); to the best of such counsel's knowledge, based on conferences with management of and the independent accountants for the Company and the Association, and on such investigation of the corporate records of the Company and the Association as such counsel conducted in connection with the preparation of the Registration Statement and the Conversion Application, all material documents and exhibits required to be filed with the Conversion Application (as amended or supplemented, if so amended or supplemented) have been so filed. The description in the Conversion Application and the Offering Prospectus contained therein of such documents and exhibits is accurate in all material respects and fairly presents the information required to be shown. + + (xiii) At the time that the Registration Statement became effective, (i) the Registration Statement (as amended or supplemented if so amended or supplemented) (other than the financial statements and other financial and statistical data and stock valuation information included therein, as to which no opinion need be rendered), complied as to form in all material respects with the requirements of the 1933 Act and the 1933 Act Regulations and (ii) the Offering Prospectus (other than the financial statements and other financial and statistical data and the stock valuation information included therein, as to which no opinion need be rendered) complied as to form in all material respects with the requirements of the 1933 Act, the 1933 Act Regulations, Conversion Regulations and Federal and State law (other than state blue sky law as to which we express no opinion). To the best of such counsel's knowledge based on the conferences and document review specified in item (xiii) above, all material documents and exhibits required to be filed with the Registration Statement (as amended or supplemented, if so amended or supplemented) have been so filed. The description in the Registration Statement and the Offering Prospectus of such documents and exhibits is accurate in all + + + + + +material respects and fairly + + -17- + +presents the information required to be shown. To the best of such counsel's knowledge, no person has sought to obtain regulatory or judicial review of the final action of the OTS approving the Conversion Application or in approving the Holding Company Application. + + (xiv) During the course of such counsel's representation of the Company and the Association, nothing has come to such counsel's attention that caused it to believe that (i) the Company and the Association have not conducted the Conversion, in all material respects, in accordance with all applicable requirements of the Plan and applicable law, and (ii) the Plan, the Conversion Application, the Registration Statement and the Offering Prospectus (other than the financial statements and other financial and statistical data and the stock valuation information included therein as to which no opinion need be rendered) do not comply in all material respects with all applicable laws, rules, regulations, decisions and orders including, but not limited to, the Conversion Regulations, the HOLA, the 1933 Act and 1933 Act Regulations and all other applicable laws, regulations, decisions and orders, including all applicable terms, conditions, requirements and provisions precedent to the Conversion imposed upon it by the OTS, the Commission and the FDIC, if any. + + (xv) The terms and provisions of the Common Stock of the Company conform to the description thereof contained in the Registration Statement and the Offering Prospectus, and the form of certificates used to evidence the Shares are in due and proper form. + + (xvi) To the best knowledge of such counsel, there are no legal or governmental proceedings pending or threatened which are required to be disclosed in the Registration Statement and the Offering Prospectus, other than those disclosed therein, and all pending legal and governmental proceedings to which the Company or the Association is a party or of which any of their property is the subject which are not described in the Registration Statement and the Offering Prospectus, including ordinary routine litigation incidental to the business, are, considered in the aggregate, not material; provided that for this purpose, any litigation or governmental proceeding is not considered to be "threatened" unless the potential litigant or governmental authority has manifested to the management of the Company or the Association, or to such counsel, a present intention to initiate such litigation or proceeding. + + (xvii) To the best knowledge of such counsel, the Company and the Association have obtained all licenses, permits and other governmental authorizations required for the conduct of their respective businesses, except where the failure to have such licenses, permits or authorizations would not have a material adverse effect on the business, operations or income or business prospects of the Company and the Association, and all such licenses, permits and other governmental authorizations are in full force and effect, and the Company and the Association are in all material respects complying therewith. + + (xviii) Neither the Company nor the Association is in contravention of its certificate of incorporation or its charter, respectively, or its bylaws (and the Association will not be in contravention of its charter or bylaws in stock form upon consummation of the Conversion) or, to the best knowledge of such counsel, in contravention of any obligation, agreement, covenant or condition contained in any material contract, indenture, mortgage, loan agreement, note, lease or other instrument to which it is a party or by which it or its property may be bound which contravention would be material to the business of the Company and the Association considered as one enterprise; the execution and delivery of this Agreement by the Company and the Association, the incurring of the obligations herein set forth and the consummation of the transactions contemplated herein have been duly authorized by all necessary + + -18- + +corporate action of the Company and the Association, and, to the best knowledge of such counsel, will not constitute a material breach of, or default under, or result in the creation or imposition of any material lien, charge or encumbrance upon any property or assets of the Company or the Association which are material to their business considered as one enterprise, pursuant to any contract, indenture, mortgage, loan agreement, note, lease or other instrument to which the Company or the Association is a party or by which any of them may be bound, or to which any of the property or assets of the Company or the Association is subject. In addition, such action will not result in any contravention of the provisions of the certificate of incorporation or bylaws of the Company or the Association or any applicable law, act, regulation or order or court order, writ, injunction or decree. The charter of the Association in stock form has been approved by the OTS. + + (xix) To the best knowledge of such counsel, the Company and the Association have good and marketable title to all properties and assets described in the Registration Statement as owned by them, free and clear of all liens, charges, encumbrances or restrictions, except such as are described in the Registration Statement or are not material in relation to the business of the Company and the Association considered as one enterprise; and to the best of such counsel's knowledge, all of the leases and subleases material to the business of the Company and the Association under which the Company and the + + + + + +Association hold properties, as described in the Registration Statement, are in full force and effect. + + (xx) The Company and the Association are not in violation of any directive from the OTS or the FDIC to make any material change in the method of conducting their business and the Company and the Association have conducted and are conducting their business so as to comply in all material respects with all applicable statutes and regulations (including, without limitation, regulations, decisions, directives and orders of the OTS and the FDIC). + + (xxi) The information in the Registration Statement and Offering Prospectus under the captions "Regulation," "Certain Restrictions on Acquisitions of the Company," "The Conversion," "Description of Capital Stock" and the information in response to Items 7(d)(l), 7(f), 7(g) and 7(i) of the Form PS of the Conversion Regulations, to the extent that it constitutes matters of law, summaries of legal matters, documents or proceedings, or legal conclusions, has been reviewed by such counsel and is correct in all material respects (except as to the financial statements and other financial data included therein as to which such counsel need express no opinion). + + In rendering such opinion, such counsel may rely (A) as to matters involving the application of laws of any jurisdiction other than the United States, to the extent such counsel deems proper and specified in such opinion satisfactory to Capital Resources, upon the opinion of other counsel of good standing (providing that such counsel states that Capital Resources is justified in relying upon such specified opinion or opinions), and (B) as to matters of fact, to the extent such counsel deems proper, on certificates of responsible officers of the Company and the Association and public officials (but not on conclusions of law which may be set forth in said certificates); provided copies of any such opinion(s) or certificates are delivered pursuant hereto or to Capital Resources together with the opinion to be rendered hereunder by special counsel to the Company and the Association. Such counsel may assume that any agreement is the valid and binding obligation of any parties to such agreement other than the Company or the Association. + + (2) The letter of Malizia, Spidi, Sloane & Fisch, P.C., counsel for the Company and the Association addressed to Capital Resources, dated the Closing Date, in form and substance to the effect that: + + -19- + + During the preparation of the Conversion Application, the Registration Statement and the Offering Prospectus, such counsel participated in conferences with management of, and the independent public accountants for the Company and the Association. Based upon such conferences and a review of corporate records of the Company and the Association as such counsel conducted in connection with the preparation of the Registration Statement and Conversion Application, nothing has come to their attention that would lead them to believe that the Conversion Application, the Registration Statement, the Offering Prospectus, or any amendment or supplement thereto (other than the financial statements and other financial and statistical data and stock valuation information included therein, as to which such counsel need express no view), contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. + + (3) The favorable opinion, dated as of the Closing Date, of Serchuk & Zelermyer, LLP, Capital Resources' counsel, with respect to such matters as Capital Resources may reasonably require. Such opinion may rely upon the opinions of counsel to the Company and the Association, and as to matters of fact, upon certificates of officers and directors of the Company and the Association delivered pursuant hereto or as such counsel shall reasonably request. + + (d) At the Closing Date, counsel to Capital Resources shall have been furnished with such documents and opinions as they may reasonably require for the purpose of enabling them to render the opinion as herein contemplated and related proceedings or in order to evidence the occurrence or completeness of any of the representations or warranties, or the fulfillment of any of the conditions, herein contained. + + (e) At the Closing Date, Capital Resources shall receive a certificate of the Chief Executive Officer and the Chief Financial Officer of the Company and of the Chief Executive Officer and Chief Financial Officer of the Association, dated as of such Closing Date, to the effect that: (i) they have carefully examined the Offering Prospectus and, in their opinion, at the time the Offering Prospectus became authorized for final use, the Offering Prospectus did not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; (ii) since the date the Offering Prospectus became authorized for final use, in their opinion no event has occurred which should have been set forth in an amendment or supplement to the Offering Prospectus which has not been so set forth, including specifically, but without limitation, any material adverse change in the condition, financial or otherwise, or in the earnings, capital, properties, business prospects or business affairs of the Company or the Association, and the conditions set forth in this Section 8 have been satisfied; (iii) since the respective dates as of which information is given in the Registration Statement and the Offering Prospectus, there has been no material adverse change in the condition, financial or otherwise, or in the earnings, capital, properties, business affairs or business prospects of the Company or the Association, + + + + + +independently, or of the Company and the Association considered as one enterprise, whether or not arising in the ordinary course of business; (iv) to the best knowledge of such officers the representations and warranties in Section 4 are true and correct with the same force and effect as though expressly made at and as of the Closing Date; (v) the Company and the Association have complied with all material agreements and satisfied, in all material respects at or prior to the Closing Date, all obligations required to be met by such date and will in all material respects comply with all obligations to be satisfied by them after Conversion; (vi) no stop order suspending the effectiveness of the Registration Statement has been initiated or, to the best knowledge of the Company or Association, threatened by the Commission or any state authority; (vii) no order suspending the Subscription or Public Offerings, the Conversion, the + + -20- + +acquisition of all of the shares of the Association by the Company or the effectiveness of the Offering Prospectus has been issued and to the best knowledge of the Company or Association, no proceedings for that purpose have been initiated or threatened by the OTS, the Commission, the FDIC, or any state authority; and (viii) to the best of their knowledge, no person has sought to obtain review of the final action of the OTS approving the Plan. + + (f) Prior to and at the Closing Date: (i) in the reasonable opinion of Capital Resources, there shall have been no material adverse change in the condition, financial or otherwise, or in the earnings, or the business affairs or business prospects of the Company or the Association independently, or of the Company or the Association, considered as one enterprise, since the latest dates as of which such condition is set forth in the Offering Prospectus, except as referred to therein; (ii) there shall have been no material transaction entered into by the Company or the Association from the latest date as of which the financial condition of the Company or the Association is set forth in the Offering Prospectus other than transactions referred to or contemplated therein; (iii) the Company or the Association shall not have received from the OTS or the FDIC any direction (oral or written) to make any material change in the method of conducting their business with which it has not complied (which direction, if any, shall have been disclosed to Capital Resources) and which would reasonably be expected to have a material and adverse effect on the business, operations or financial condition or income of the Company or the Association taken as a whole; (iv) neither the Company nor the Association shall have been in default (nor shall an event have occurred which, with notice or lapse of time or both, would constitute a default) under any provision of and agreement or instrument relating to any material outstanding indebtedness; (v) no action, suit or proceedings, at law or in equity or before or by any federal or state commission, board or other administrative agency, shall be pending, or, to the knowledge of the Company or the Association, threatened against the Company or the Association or affecting any of their properties wherein an unfavorable decision, ruling or finding would reasonably be expected to have a material and adverse effect on the business, operations, financial condition or income of the Company or the Association, taken as a whole; and (vi) the Shares have been qualified or registered for offering and sale under the securities or blue sky laws of the jurisdictions as Capital Resources shall have requested and as agreed to by the Company. + + (g) Concurrently with the execution of this Agreement, Capital Resources shall receive a letter from KPMG, dated the date hereof and addressed to Capital Resources: (i) confirming that KPMG is a firm of independent public accountants within the meaning of the 1933 Act and the 1933 Act Regulations and 12 C.F.R. ss. 571.2(c)(3) and no information concerning its relationship with or interests in the Company and the Association is required to be disclosed in the Offering Prospectus by the Conversion Regulations or Item 10 of the Registration Statement, and stating in effect that in KPMG's opinion the financial statements of the Association as are included in the Offering Prospectus comply as to form in all material respects with the applicable accounting requirements of the 1933 Act and the related published rules and regulations of the Commission thereunder and the Conversion Regulations and generally accepted accounting principles; (ii) stating in effect that, on the basis of certain agreed upon procedures (but not an audit examination in accordance with generally accepted auditing standards) consisting of a reading of the latest available unaudited interim financial statements of the Association prepared by the Association, a reading of the minutes of the meetings of the Board of Directors and members of the Association and consultations with officers of the Association responsible for financial and accounting matters, nothing came to their attention which caused them to believe that: (A) such unaudited financial statements are not in conformity with generally accepted accounting principles applied on a basis substantially consistent with that of the audited financial statements included in the Offering Prospectus; or (B) during the period from the date of the latest financial statements included in the + + -21- + +Offering Prospectus to a specified date not more than five business days prior to the date hereof, there has been (1) an increase of greater than $500,000 in the long term debt of the Association or (2) an increase of $100,000 or more in loans past due 90 days or more as of the last day of the month immediately prior to such specified date or (3) an increase of $100,000 or more in real estate acquired by foreclosure or (4) a decrease of $50,000 or more in the allowance for loan losses or (5) any decrease in total retained earnings or (6) a decrease + + + + + +in net income when compared to the like period in 1995 or (7) any change in total assets of the Association in an amount greater than $2,000,000 excluding proceeds from stock subscriptions; and (iii) stating that, in addition to the audit examination referred to in its opinion included in the Offering Prospectus and the performance of the procedures referred to in clause (ii) of this subsection (g), they have compared with the general accounting records of the Company and/or the Association, as applicable, which are subject to the internal controls of the Company and/or the Association, as applicable, accounting system and other data prepared by the Company and/or the Association, as applicable, directly from such accounting records, to the extent specified in such letter, such amounts and/or percentages set forth in the Offering Prospectus as Capital Resources may reasonably request; and they have found such amounts and percentages to be in agreement therewith (subject to rounding). + + (h) At the Closing Date, Capital Resources shall receive a letter from KPMG, dated the Closing Date, addressed to Capital Resources, confirming the statements made by its letter delivered by it pursuant to subsection (g) of this Section 8, except that the "specified date" referred to in clause (ii)(B) thereof to be a date specified in such letter, which shall not be more than three business days prior to the Closing Date. + + (i) The Company and the Association shall not have sustained since the date of the latest audited financial statements included in the Registration Statement and Offering Prospectus any loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Registration Statement and Offering Prospectus, and since the respective dates as of which information is given in the Registration Statement and Offering Prospectus, there shall not have been any material change in the long term debt of the Company or the Association other than debt incurred in relation to the purchase of Shares by the Company's Tax-Qualified Employee Plans, or any change, or any development involving a prospective change, in or affecting the general affairs, management, financial position, stockholders' equity or results of operations of the Company or the Association, otherwise than as set forth or contemplated in the Registration Statement and Offering Prospectus, the effect of which, in any such case described above, is in Capital Resources' reasonable judgment sufficiently material and adverse as to make it impracticable or inadvisable to proceed with the Subscription or Public Offerings or the delivery of the Shares on the terms and in the manner contemplated in the Offering Prospectus. + + (j) At or prior to the Closing Date, Capital Resources shall receive (i) a copy of the letter from the OTS authorizing the use of the Offering Prospectus, (ii) a copy of the order from the Commission declaring the Registration Statement effective, (iii) a copy of a certificate from the OTS evidencing the good standing of the Association, (iv) certificates of good standing from the States of Delaware and New York evidencing the good standing of the Company and from the State of New York evidencing that the Company is duly qualified to do business and in good standing in New York and (v) a copy of the letter from the OTS approving the Company's Holding Company Application. + + (k) As soon as available after the Closing Date, Capital Resources shall receive a + + -22- + +certified copy of the Association's stock charter. + + (1) Subsequent to the date hereof, there shall not have occurred any of the following: (i) a suspension or limitation in trading in securities generally on the New York Stock Exchange or American Stock Exchange or in the over-the-counter market, or quotations halted generally on the NASDAQ National Market, or minimum or maximum prices for trading being fixed, or maximum ranges for prices for securities being required by either of such exchanges or the NASD or by order of the Commission or any other governmental authority; (ii) a general moratorium on the operations of commercial banks or federal savings banks or general moratorium on the withdrawal of deposits from commercial banks or federal savings banks declared by either federal or state authorities; (iii) the engagement by the United States in hostilities which have resulted in the declaration, on or after the date hereof, of a national emergency or war; or (iv) a material decline in the price of equity or debt securities if, as to clauses (iii) or (iv), the effect of such hostilities or decline, in Capital Resources' reasonable judgment, makes it impracticable or inadvisable to proceed with the Subscription or Public Offerings or the delivery of the Shares on the terms and in the manner contemplated in the Registration Statement and the Offering Prospectus. + + All such opinions, certifications, letters and documents shall be in compliance with the provisions hereof only if they are, in the reasonable opinion of Capital Resources and its counsel, satisfactory to Capital Resources and its counsel. Any certificates signed by an officer or director of the Company or the Association and delivered to Capital Resources or its counsel shall be deemed a representation and warranty by the Company or the Association to Capital Resources as to the statements made therein. + + If any of the conditions specified in this Section shall not have been fulfilled when and as required by this Agreement, this Agreement and all of Capital Resources' obligations hereunder may be canceled by Capital Resources by notifying the Association of such cancellation in writing or by telegram at any time at or prior to the Closing Date, and any such cancellation shall be without liability of any party to any other party except as otherwise provided in Sections 2, 7, 9 and 10 hereof. Notwithstanding the above, if this + + + + + +Agreement is canceled pursuant to this paragraph, the Company and the Association jointly and severally agree to reimburse Capital Resources for all out-of-pocket expenses, (including without limitation the fees and expenses of Capital Resources' counsel) reasonably incurred by Capital Resources and Capital Resources' counsel at its normal rates, in connection with the preparation of the Registration Statement and the Offering Prospectus, and in contemplation of the proposed Subscription or Public Offerings to the extent provided for in Sections 2 and 7 hereof. + + SECTION 9. Indemnification. + + (a) The Company and the Association jointly and severally agree to indemnify and hold harmless Capital Resources, its officers, directors, agents and employees and each person, if any, who controls or is under common control with Capital Resources within the meaning of Section 15 of the 1933 Act or Section 20(a) of the 1934 Act, against any and all loss, liability, claim, damage or expense whatsoever (including but not limited to settlement expenses), joint or several, that Capital Resources or any of them may suffer or to which Capital Resources and any such persons upon written demand for any expenses (including fees and disbursements of counsel) incurred by Capital Resources or any of them in connection with investigating, preparing or defending any actions, proceedings or claims (whether commenced or threatened) to the extent such losses, claims, damages, liabilities or actions (i) arise out of or are based upon any untrue statement or alleged untrue statement of a material + + -23- + +fact contained in the Registration Statement (or any amendment or supplement thereto), preliminary or final Offering Prospectus (or any amendment or supplement thereto), the Conversion Application or any Blue Sky application or other instrument or document of the Company or the Association or based upon written information supplied by the Company or the Association filed in any state or jurisdiction to register or qualify any or all of the Shares or the subscription rights applicable thereto under the securities laws thereof (collectively, the "Blue Sky Application"), or any application or other document, advertisement, oral statement, or communication ("Sales Information") prepared, made or executed by or on behalf of the Company with its consent or based upon written or oral information furnished by or on behalf of the Company or the Association, whether or not filed in any jurisdiction in order to qualify or register the Shares under the securities laws thereof; (ii) arise out of or are based upon the omission or alleged omission to state in any of the foregoing documents or information, a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; or, (iii) arise from any theory of liability whatsoever relating to or arising from or based upon the Registration Statement (or any amendment or supplement thereto), preliminary or final Offering Prospectus (or any amendment or supplement thereto), the Conversion Application, any Blue Sky Application or Sales Information or other documentation distributed in connection with the Conversion; provided, however, that no indemnification is required under this paragraph (a) to the extent such losses, claims, damages, liabilities or actions arise out of or are based upon any untrue material statements or alleged untrue material statements in, or material omission or alleged material omission from, the Registration Statement (or any amendment or supplement thereto), the Conversion Application, any Blue Sky Application, the preliminary or final Offering Prospectus (or any amendment or supplement thereto), or Sales Information made in reliance upon and in conformity with written information furnished to the Company or the Association by Capital Resources regarding Capital Resources expressly for use under the caption "The Conversion - Marketing Arrangements" in the Offering Prospectus nor is indemnification required for material oral misstatements made by Capital Resources, which are not based upon information provided by the Association or the Company orally or in writing or based on information contained in the Registration Statement (or any amendment or supplement thereto), preliminary or final Offering Prospectus (or any amendment or supplement thereto), the Conversion Application, any Blue Sky Application or Sales Information distributed in connection with the Conversion. + + (b) Capital Resources agrees to indemnify and hold harmless the Company and the Association, their directors and officers, agents, servants and employees and each person, if any, who controls the Company or the Association within the meaning of Section 15 of the 1933 Act or Section 20(a) of the 1934 Act against any and all loss, liability, claim, damage or expense whatsoever (including but not limited to settlement expenses), joint or several which they, or any of them, may suffer or to which they, or any of them, may become subject under all applicable federal and state laws or otherwise, and to promptly reimburse the Company, the Association and any such persons upon written demand for any expenses (including fees and disbursements of counsel) incurred by them, or any of them, in connection with investigating, preparing or defending any actions, proceedings or claims (whether commenced or threatened) to the extent such losses, claims, damages, liabilities or actions arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment of supplement thereto), or the preliminary or final Offering Prospectus (or any amendment or supplement thereto), or the Conversion Application or any Blue Sky Application or Sales Information or are based upon the omission or alleged omission to state in any of the foregoing documents a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that Capital Resources obligations under this Section 9(b) shall exist only if and only to the + + -24- + + + + + +extent that such untrue statement or alleged untrue statement was made in, or such material fact or alleged material fact was omitted from, the Registration Statement (or any amendment or supplement thereto), the preliminary or final Offering Prospectus (or any amendment or supplement thereto), or the Conversion Application, any Blue Sky Application or Sales Information in reliance upon and in conformity with written information furnished to the Company or the Association by Capital Resources regarding Capital Resources expressly for use under the caption "The Conversion - Marketing Arrangements" in the Offering Prospectus or in the event of oral misstatements made by Capital Resources, which are not based upon information provided by the Association or the Company orally or in writing or based on information contained in the Registration Statement (or any amendment or supplement thereto), preliminary or final Offering Prospectus (or any amendment or supplement thereto), the Conversion Application, any Blue Sky Application or Sales Information distributed in connection with the Conversion. + + (c) Each indemnified party shall give prompt written notice to each indemnifying party of any action, proceeding, claim (whether commenced or threatened), or suit instituted against it in respect of which indemnity may be sought hereunder, but failure to so notify an indemnifying party shall not relieve it from any liability which it may have on account of this Section 9 or otherwise. An indemnifying party may participate at its own expense in the defense of such action. In addition, if it so elects within a reasonable time after receipt of such notice, an indemnifying party, jointly with any other indemnifying parties receiving such notice, may assume defense of such action with counsel chosen by it and approved by the indemnified parties that are defendants in such action, unless such indemnified parties reasonably object to such assumption on the ground that there may be legal defenses available to them that are different from or in addition to those available to such indemnifying party. If an indemnifying party assumes the defense of such action, the indemnifying parties shall not be liable for any fees and expenses of counsel for the indemnified parties incurred thereafter in connection with such action, proceeding or claim, other than reasonable costs of investigation. In no event shall the indemnifying parties be liable for the fees and expenses of more than one separate firm of attorneys (and any special counsel that said firm may retain) for all indemnified parties in connection with any one action, proceeding or claim or separate but similar or related actions, proceedings or claims in the same jurisdiction arising out of the same general allegations or circumstances. + + (d) The agreements contained in this Section 9 and in Section 10 hereof and the representations and warranties of the Company and the Association set forth in this Agreement shall remain operative and in full force and effect regardless of: (i) any investigation made by or on behalf of Capital Resources or its officers, directors or controlling persons, agents or employees or by or on behalf of the Company or the Association or any officers, directors or controlling persons, agents or employees of the Company or the Association or any controlling person, director or officer of the Company or the Association; (ii) delivery of and payment hereunder for the Shares; or (iii) any termination of this Agreement. + + (e) No indemnification by the Association under Section 9(a) hereof nor contribution under Section 10 hereof shall be effective if the same shall be deemed to be in violation of any law, rule or regulation applicable to the Association including, without limitation, Section 23A of the Federal Reserve Act. If the indemnification or contribution by the Association is not effective pursuant to the preceding sentence, then the indemnification by Capital Resources pursuant to Section 9(b) shall be given only to the Company, its directors and officers, agents, servants and employees and not to the Association, its directors and officers, agents, servants and employees and the Association shall not be entitled to any contribution from Capital Resources pursuant to Section 10. + + -25- + + SECTION 10. Contribution. In order to provide for just and equitable contribution in circumstances in which the indemnification provided for in Section 9 is due in accordance with its terms but is for any reason unavailable as a result of Section 9(e) or held by a court to be unavailable from the Company, the Association or Capital Resources, the Company, the Association and Capital Resources shall contribute to the aggregate losses, claims, damages and liabilities (including any investigation, legal and other expenses incurred in connection with, and any amount paid in settlement of any action, suit or proceeding of any claims asserted, but after deducting any contribution received by the Company or the Association or Capital Resources from persons other than the other party thereto, who may also be liable for contribution) in such proportion so that Capital Resources is responsible for that portion represented by the percentage that the fees paid to Capital Resources pursuant to Section 2 of this Agreement (not including expenses) bears to the gross proceeds received by the Company from the sale of the Shares in the Subscription and Public Offerings and the Company and the Association shall be responsible for the balance. If, however, the allocation provided above is not permitted by applicable law or if the indemnified party failed to give the notice required under Section 9 above, then each indemnifying party shall contribute to such amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative fault of the Company and the Association on the one hand and Capital Resources on the other + + + + + +in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions, proceedings or claims in respect thereof), but also the relative benefits received by the Company and Association on the one hand and Capital Resources on the other from the offering as well as any other relevant equitable considerations. The relative benefits received by the Company and the Association on the one hand and Capital Resources on the other shall be deemed to be in the same proportion as the total gross proceeds from the Subscription and Public Offerings (before deducting expenses) received by the Company bear to the total fees (not including expenses) received by Capital Resources. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company and/or the Association on the one hand or Capital Resources on the other and the parties' relative intent, good faith, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company, the Association and Capital Resources agree that it would not be just and equitable if contribution pursuant to this Section 10 were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to above in this Section 10. The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or action, proceedings or claims in respect thereof) referred to above in this Section 10 shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action, proceeding or claim. It is expressly agreed that Capital Resources shall not be liable for any loss, liability, claim, damage or expense or be required to contribute any amount which in the aggregate exceeds the amount paid (excluding reimbursable expenses) to Capital Resources under this Agreement. It is understood that the above-stated limitation on Capital Resources' liability is essential to Capital Resources and that Capital Resources relied upon such limitation and would not have entered into this Agreement if such limitation had not been agreed to by the parties to this Agreement. No person found guilty of any fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not found guilty of such fraudulent misrepresentation. The obligations of the Company and the Association under this Section 10 and under Section 9 shall be in addition to any liability which the Company and the Association may otherwise have. For purposes of this Section 10, each of Capital Resources', the Company's or the Association's officers and directors and each person, if any, who controls Capital Resources or the Company or the Association within the meaning of the 1933 Act and the 1934 Act shall have the same rights to contribution as the Company and the Association. + + -26- + +Any party entitled to contribution, promptly after receipt of notice of commencement of any action, suit, claim or proceeding against such party in respect of which a claim for contribution may be made against another party under this Section 10, will notify such party from whom contribution may be sought, but the omission to so notify such party shall not relieve the party from whom contribution may be sought from any other obligation it may have hereunder or otherwise than under this Section 10. + + SECTION 11. Survival of Agreements, Representations and Indemnities. The respective indemnities of the Company, the Association and Capital Resources and the representations and warranties and other statements of the Company and the Association set forth in or made pursuant to this Agreement shall remain in full force and effect, regardless of any termination or cancellation of this Agreement or any investigation made by or on behalf of Capital Resources, the Company, the Association or any indemnified person referred to in Section 9 hereof, and shall survive the issuance of the Shares, and any legal representative, successor or assign of Capital Resources, the Association, and any such indemnified person shall be entitled to the benefit of the respective agreements, indemnities, warranties and representations. + + SECTION 12. Termination. Capital Resources may terminate this Agreement by giving the notice indicated below in this Section at any time after this Agreement becomes effective as follows: + + (a) In the event the Company fails to sell all of the Shares within the period specified, and in accordance with the provisions of the Plan or as required by the Conversion Regulations and applicable law, this Agreement shall terminate upon refund by the Association to each person who has subscribed for or ordered any of the Shares the full amount which it may have received from such person, together with interest as provided in the Offering Prospectus, and no party to this Agreement shall have any obligation to the other hereunder, except for payment by the Association and/or the Company as set forth in Sections 2, 7, 9 and 10 hereof. + + (b) If any of the conditions specified in Section 8 shall not have been fulfilled when and as required by this Agreement, or by the Closing Date, or waived in writing by Capital Resources, this Agreement and all of Capital Resources obligations hereunder may be canceled by Capital Resources by notifying the Association of such cancellation in writing or by telegram at any time at or prior to the Closing Date, and, any such cancellation shall be without Liability of any party to any other party except as otherwise provided in Sections 2, 7, 9 and 10 hereof. + + (c) If Capital Resources elects to terminate this Agreement as provided in this section, the Company and the Association shall be notified as provided in Section 13 hereof, promptly by Capital Resources by telephone or telegram, confirmed by letter. + + + + + + SECTION 13. Notices. All communications hereunder, except as herein otherwise specifically provided, shall be mailed in writing and if sent to Capital Resources shall be mailed, delivered or telegraphed and confirmed to Capital Resources, Inc.,1701 K Street, N.W., Suite 700, Washington, D.C. 20006 Attention: Catherine Kozlow Rochester (with a copy to Serchuk & Zelermyer, LLP, 81 Main Street, White Plains, NY 10601, Attention: Clifford S. Weber, Esq.) and, if sent to the Company and the Association, shall be mailed, delivered or telegraphed and confirmed to the Company and the Association at 161 Church Street, Amsterdam, New York, 12010, (Attention: John M. Lisicki (with a copy to Malizia, Spidi, Sloane & Fisch, P.C., 1301 K Street, N.W., Suite 700 East Washington, D.C. 20005, Attention: John J. Spidi, Esq.) + + -27- + + SECTION 14. Parties. The Company and the Association shall be entitled to act and rely on any request, notice, consent, waiver or agreement purportedly given on behalf of Capital Resources when the same shall have been given by the undersigned. Capital Resources shall be entitled to act and rely on any request, notice, consent, waiver or agreement purportedly given on behalf or the Company or the Association, when the same shall have been given by the undersigned or any other officer of the Company or the Association. This Agreement shall inure solely to the benefit of, and shall be binding upon, Capital Resources and the Company, the Association and the controlling persons referred to in Section 9 hereof, and their respective successors, legal representatives and assigns, and no other person shall have or be construed to have any legal or equitable right, remedy or claim under or in respect of or by virtue of this Agreement or any provision herein contained. + + SECTION 15. Closing. The closing for the sale of the Shares shall take place on the Closing Date at the offices of Capital Resources or such other location as mutually agreed upon by Capital Resources, the Company and the Association. At the closing, the Association shall deliver to Capital Resources in next day funds the commissions, fees and expenses due and owing to Capital Resources as set forth in Sections 2 and 7 hereof and the opinions and certificates required hereby and other documents deemed reasonably necessary by Capital Resources shall be executed and delivered to effect the sale of the Shares as contemplated hereby and pursuant to the terms of the Offering Prospectus. + + SECTION 16. Partial Invalidity. In the event that any term, provision or covenant herein or the application thereof to any circumstances or situation shall be invalid or unenforceable, in whole or in part, the remainder hereof and the application of said term, provision or covenant to any other circumstance or situation shall not be affected thereby, and each term, provision or covenant herein shall be valid and enforceable to the full extent permitted by law. + + SECTION 17. Construction. This Agreement shall be construed in accordance with the laws of the District of Columbia. + + SECTION 18. Counterparts. This Agreement may be executed in separate counterparts, each of which so executed and delivered shall be an original, but all of which together shall constitute but one and the same instrument. + + Time shall be of the essence of this Agreement. + + -28- + + If the foregoing correctly sets forth the arrangement among the Company, the Association and Capital Resources, please indicate acceptance thereof in the space provided below for that purpose, whereupon this letter and Capital Resources' acceptance shall constitute a binding agreement. + + Very truly yours, + + AFSALA BANCORP, INC. + + By: ________________________________ John M. Lisicki, President and Chief Executive Officer + + AMSTERDAM FEDERAL SAVINGS AND LOAN ASSOCIATION + + By: ________________________________ John M. Lisicki, President and Chief Executive Officer + + Accepted as of the date first above written. + +CAPITAL RESOURCES, INC. + + + + + +By: _____________________________________ Catherine K. Rochester, President + + -29- \ No newline at end of file diff --git a/full_contract_txt/AIRSPANNETWORKSINC_04_11_2000-EX-10.5-Distributor Agreement.txt b/full_contract_txt/AIRSPANNETWORKSINC_04_11_2000-EX-10.5-Distributor Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..098495fa5ef431709024f328d920658ad0b14ee3 --- /dev/null +++ b/full_contract_txt/AIRSPANNETWORKSINC_04_11_2000-EX-10.5-Distributor Agreement.txt @@ -0,0 +1,543 @@ +Exhibit 10.5 + +Note: Portions of this exhibit indicated by"[*]" are subject to a confidential treatment request, and have been omitted from this exhibit. Complete, unredacted copies of this exhibit have been filed with the Securities and Exchange Commission as part of this Company's confidential treatment request. + +Distributor Agreement --------------------- + +This Distributor Agreement (the "Agreement") is made effective as of the 31st day of March, 2000 (the "Effective Date"), by and between Airspan Networks Incorporated, a company incorporated under the laws of the State of Washington having its principal office at 777 108th Avenue NE, Suite 1895, Bellevue, Washington 98004 ("Airspan") and GLS LLC, ("Distributor") a limited liability company incorporated under the laws of the State of South Dakota having its principal office at 501 Fourth Street, Sergeant Bluff, IA 51054. + +WITNESSETH: + +WHEREAS, Airspan is engaged in the design and manufacture of various telecommunications product lines, including, among others, those product lines more completely described in Schedule I hereto (the product lines described in Schedule I, as from time to time amended in accordance with the provisions of this Agreement, are hereinafter called the "Airspan Products") the hardware components thereof are sometimes referred to separately as "Equipment," the software components thereof are sometimes referred to separately as "Software" as defined in Section 11.1, and an arrangement of Equipment which, when interfaced with Software, is operable to perform predetermined functions, is referred to as a "System"); + +WHEREAS, Distributor is engaged in the promotion of sales of telecommunications products; and + +WHEREAS, Airspan desires to appoint Distributor as a Distributor for the Airspan Products for the territory described in Schedule II hereto (the "Territory"). + +NOW, THEREFORE, in consideration of the mutual promises herein contained, it is hereby agreed as follows: + +1. APPOINTMENT. ----------- + +1.1 Subject to the provisions of this Agreement, Airspan hereby appoints Distributor as an independent, exclusive distributor to assist Airspan in marketing the Airspan Products to customers in the Territory, and Distributor hereby accepts such appointment as of the Effective Date of this Agreement. Distributor's appointment as a distributor of the Airspan Products grants to Distributor only a license to resell the + +- ------------------------------------------------------------------------------- + +Page 1 + +Airspan Products to Distributor's customers in the Territory, and does not transfer any right, title, or interest in any of the Airspan Software to Distributor. + +1.2 Distributor's relationship to Airspan is that of an independent contractor, and nothing in this Agreement shall constitute Distributor as the agent or employee of Airspan. Distributor shall have no authority to accept any order or make any offer (except as herein stated), or execute any instrument or make any commitment on behalf of Airspan. Specifically, without in any way limiting the generality of the foregoing, Distributor agrees not to make any representation, guarantee, or warranty on Airspan's behalf concerning the Airspan Products, but will refer customers to Airspan's printed literature. Nothing contained in this Agreement is to be construed as a limitation or restriction upon Airspan in the sale or other disposition of any of its products to any person, firm, or corporation inside or outside of the Territory. Airspan will pay no commissions under this Agreement. Distributor's compensation is to be obtained solely by the difference between the price Distributor pays to Airspan and the price Distributor charges its customers. The parties also acknowledge that this Agreement is not intended to create a joint venture or partnership between Airspan and Distributor. + +1.3 Distributor will use its best efforts to maintain and support the Airspan Products within the Territory by devoting such attention, time, and effort as may be reasonably necessary to fully develop the available market potential. During the term of this Agreement, and for a period of three (3) months following the expiration or termination of this Agreement, Distributor agrees that neither it nor any organization or entity controlled or directed by it will, without Airspan's prior, written consent, represent a manufacturer or supplier of products similar in design or performance to or which are of such a nature as to be competitive with any products contained in the Airspan Products, nor will Distributor market or otherwise promote the sale of such products. Distributor will give Airspan thirty (30) days' prior, written notice of each new potential representation role being considered by Distributor, and Distributor will not undertake such representation without Airspan's prior, written consent, such consent not to be unreasonably withheld. Except as + + + + + +provided above, in no event will Airspan consent to Distributor's consultation for or representation of a manufacturer or supplier, which is directly or indirectly, a competitor of Airspan. + +1.4 Distributor shall maintain a place of business at the location specified in Section 21.10 where Distributor can be contacted by Airspan, customers, and prospective customers during regular business hours with a permanent mailing address and an accessible cellular telephone, and will provide Airspan with written notice promptly upon any change in address. Distributor agrees to assume all of the expenses of this place of business, including rent, stenographic services, and all other expenses except as specifically assumed in writing by Airspan. + +- -------------------------------------------------------------------------------- + +Page 2 + +1.5 Airspan will provide Distributor with such commercial and technical assistance and training as may reasonably be necessary, in Airspan's sole judgment, to enable Distributor to effectively carry out its activities under this Agreement and, in connection therewith, to provide such sales promotional materials, as Airspan may deem appropriate. Airspan will provide such technical support as is reasonable and necessary to maintain the product line as a viable competitor in the market. + +2. REPRESENTATIONS AND WARRANTIES. + +Distributor hereby represents and warrants as follows: + +a. Distributor has been duly registered in accordance with any and all relevant legislation, has received any and all necessary governmental authorizations to enter into and perform its obligations under this Agreement, and that its entry into and performance under this Agreement will not violate applicable legislation; + +b. Distributor is duly registered with all necessary tax authorities and is in compliance with all payment obligations in accordance with applicable legislation. No claims against or investigations of Distributor with respect to its tax obligations exist; + +c. Distributor is not currently involved in any litigation, arbitration, or other legal proceedings in which claims are being asserted against Distributor which might affect its ability to perform its obligations under this Agreement, nor is Distributor aware of any unasserted claims against Distributor of this nature; and + +d. Distributor's bank accounts have been established and operated in accordance with applicable legislation. All transactions of Distributor required to be carried out through authorized banks have been so carried out. Distributor is not, has not, and warrants that it will not breach any currency regulation or currency control legislation. Distributor further warrants that it is not, has not, and will not breach any bank secrecy act, rules or regulations. + +3. SERVICES. + +3.1 In addition to the above, the Distributor will perform the following services under this Agreement: + +a. In cooperation with Airspan, identify potential customers and project opportunities within the Territory that will lead to sales/licenses of Airspan Products and services; + +b. Prepare reports on the opportunities that will include: (1) description of the project; (2) assessment of the appropriate fit to Airspan Products and + +- -------------------------------------------------------------------------------- + +Page 3 + +services; (3) dollar size and timing of the project; (4) competitive assessment; and (5) identification of key decision makers and other technical and commercial contacts; + +c. Assist and advise Airspan in the preparation and delivery of appropriate marketing and sales programs; + +d. Initiate and coordinate meetings at all levels for the appropriate Airspan employees to evaluate the identified projects; + +e. Initiate and assist in the preparation of sales and technical meetings with customers, and where appropriate, attend these meetings with Airspan personnel and provide administrative support and translation services; + +3.2 Distributor will use its best efforts to vigorously and aggressively promote the sale of Airspan Products within the Territory. Such efforts shall include, but shall not be limited to, that advertising within the Territory which is reasonably necessary. All such advertising shall follow the general statements made in advertising prepared by Airspan. All advertising shall contain a prominent reference to Airspan, indicating the actual commercial origin of Airspan Products so advertised. Distributor shall not make any claims in its advertising which exceed or contradict + + + + + +claims made by Airspan in its printed materials. + +3.3 Distributor will train and maintain a sufficient number of technical and sales personnel in order to: (a) serve the demands and needs of its customers for Airspan Products, service, and support; and (b) carry out the obligations of Distributor under this Agreement. + +3.4 Distributor and its staff will be conversant with the technical language related to Airspan Products and will develop sufficient knowledge of the industry, Airspan Products, and products competitive with Airspan Products (including specifications, features, and benefits) so as to be able to explain in detail to customers the differences between Airspan Products and competitive products. Distributor will conduct or provide for any training of its personnel which may be necessary to impart such knowledge. + +3.5 Distributor and its staff will research the technical requirements and specifications of the market for Airspan Products in the Territory and make information known to Airspan such that Airspan may, at its discretion, implement appropriate technical changes to the Products to enable them to be sold in the Territory. Airspan acknowledges that, subject to a further and separate Agreement, such changes may be implemented in the future by Distributor, with the assistance of Airspan. + +- ------------------------------------------------------------------------------ + +Page 4 + +3.6 Distributor agrees to purchase and stock a comprehensive inventory of spare parts based upon the recommended list set forth in Schedule III to this Agreement. + +3.7 Distributor agrees to provide to its customers' installation services for all Airspan Products. All such installation services shall be performed by Distributor in accordance with Airspan's latest installation standards as provided by Airspan. + +3.8 Distributor agrees to train and have readily available a maintenance staff to efficiently and expeditiously maintain or upgrade all Airspan Products purchased or licensed by Distributor from Airspan. Maintenance shall be performed in accordance with Airspan's latest maintenance standards for Airspan Products, as provided by Airspan, by Distributor's own personnel and may not be subcontracted or delegated to any other person or entity without Airspan's prior, written authorization. + +3.9 Distributor agrees to provide and maintain those facilities adequate to meet the obligations set forth in this section and of the Agreement. Distributor further agrees to provide all of the sales and support functions set forth in this section at no charge to Airspan. + +3.10 Distributor agrees not to actively seek to promote, rent, lease, sell, sublicense or authorize the rental, sale or sublicense of Airspan Products outside of the Territory [without the prior written approval of Airspan], but nothing in this Agreement shall prevent Distributor from renting, selling or sublicensing the Airspan Products to customers outside of the Territory in response to an unsolicited request from such customer. + +3.11 During the term of this Agreement Distributor agrees that neither it nor any organization or entity controlled or directed by it will, without Airspan's prior, written consent, represent a manufacturer or supplier of products similar in design or performance to or which are of such a nature as to be competitive with any products contained in the Airspan Products. + +3.12 The parties mutually agree that by April 30, 2000, the parties will negotiate and execute a National Accounts Consulting Agreement whereby the Distributor will receive consulting fees and commissions for the sale and deployment of Airspan's products on a national basis. It is the intent of the parties to jointly pursue the sale of products to said companies and to enter into and complete contracts for the deployment of products in this manner. + +- -------------------------------------------------------------------------------- + +Page 5 + +4. ORDERING PROCEDURE. + +4.1 The following procedures shall be followed with respect to each purchase order issued by Distributor: + +a. During the Term, Distributor will inform Airspan of its intent to purchase Equipment and Installation Services (but only if Airspan expressly agrees to perform such Installation Services) and to license Software, by sending to Airspan a written order. This written order (the "Purchase Order") will state the type of Equipment, System, or Installation Services that Distributor wants to purchase and the Software Distributor wants to license, the price of the ordered items (the "Contract Price") as set forth in Schedule IV, "Price List" (which is hereby incorporated by reference) and the proposed delivery and installation dates, if applicable. + +b. Each Purchase Order shall specifically incorporate by reference the terms and conditions of this Agreement, and no additional or different terms and conditions stated in a Purchase Order, any letter, or otherwise + + + + + +shall be binding unless expressly referred and agreed to by Airspan in writing. In the event of a conflict between the terms and conditions of this Agreement and of any Purchase Order issued hereunder, or if the Purchase Order does not reference the terms and conditions of this Agreement, the terms and conditions of this Agreement shall control. + +4.2 If a Purchase Order is accepted by Airspan, Airspan will issue an order acknowledgment to Distributor within five (5) business days of Airspan's receipt of the written Purchase Order from Distributor. + +5. RECORDS AND REPORTING. + +5.1 At Airspan's request, within fifteen (15) days of the end of each calendar month, Distributor will provide to Airspan a written report showing, for the just-ended calendar month: (a) Distributor's shipments of Airspan Products by dollar volume, both in the aggregate and for such categories as Airspan may designate from time to time; (b) forecasts of Distributor's anticipated orders by product; (c) Distributor's current inventory levels of Airspan Products, in the aggregate and by product; and (d) any other information which Airspan may reasonably request. + +5.2 Distributor will promptly advise Airspan concerning any market information which comes to Distributor's attention regarding Airspan, Airspan Products, Airspan's market position, or the continued competitiveness of Airspan Products in the marketplace. Distributor will confer with Airspan from + +- -------------------------------------------------------------------------------- + +Page 6 + +time to time, at Airspan's request, on matters relating to market conditions, distribution forecasting, and product planning. + +5.3 For at least two (2) years after termination of this Agreement, Distributor will maintain its records, contracts, and accounts relating to distribution of Airspan Products, and will permit examination thereof by authorized representatives of Airspan at all reasonable times. + +6. CONTRACT PRICE + +6.1 The Contract Price for each item of Equipment, Installation Services, or Software is as specified in Schedule IV and shall be paid to Airspan in US Dollars (US$) free of any withholding tax and of any currency controls or other restrictions. The Contract Price includes: + +a. The price of the Equipment; + +b. The fee for the licensing of the Software; + +c. If Installation Services are ordered and such order is accepted by Airspan, the charges for installing and testing each unit of Equipment or Software; + +d. The charges for the warranty of the Equipment and Software in accordance with Sections 14 and 15; and + +e. Costs in accordance with delivery obligations set forth in Sections 8.1 and 8.2. + +[*] + +[*] Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. + +- ------------------------------------------------------------------------------- + +Page 7 + +Airspan warrants that during the term of this Agreement, the prices at which Airspan sells to Distributor products supplied under this Agreement shall be no less favorable to the Distributor than those prices at which Airspan sells, at substantially the same time in the United States, similar products and pursuant to similar terms and conditions as those by which Airspan sells Products to the Distributor under this Agreement. Products shall only be deemed similar if they provide like functionality. The terms and conditions shall only be deemed similar if the product is supplied pursuant to an agreement or arrangement of similar duration and commitment, provides for similar warranties and after service commitments, involves similar spare part and support commitments, has the same payment and other financial terms, and otherwise has similar terms and conditions. + +6.2 The Contract Price is shown in Schedule IV and shall include applicable duties, taxes or imposts, including all export or import duties. Sales taxes and contractor's excise taxes shall be itemized on all Purchase Orders. The parties agree that the Contract Price in Schedule IV shall be firm for a minimum period of twenty-four (24) months from the Effective Date. After the above period of twenty-four (24) months, Exhibit B may be revised by Airspan giving thirty (30) days written notice to Distributor. + +7. PAYMENT TERMS. + + + + + +7.1 Airspan will issue an invoice (the "Invoice") to Distributor in accordance with the payment terms below. The Invoice specifically will identify the Equipment, Software, or other items shipped, and the Contract Price of such items. Any Installation Services or other services provided by Airspan will be invoiced separately following completion of such services. The Invoice also shall state the total due to Airspan from Distributor (the "Invoice Total"), which shall include the Contract Price, and any applicable taxes, duties, and other fees due pursuant to Section 6 of this Agreement. Payment of the Invoice Total is due (without any right of set-off) Net forty-five (45) days after the date of invoice. + +7.2 If Distributor disputes any invoice or part thereof, Distributor must notify Airspan in writing within twenty-five (25) days of the invoice date giving details of the reason for such dispute. + +- ------------------------------------------------------------------------------- + +Page 8 + +Distributor and Airspan agree to work together in good faith to resolve the dispute as quickly as possible. Distributor may withhold payment of such disputed amounts until resolution of the dispute. Any parts of the invoice not under dispute shall be paid net forty-five (45) days after the date of invoice. On resolution of the dispute, Distributor shall immediately pay any amounts due in full. + +7.3 Distributor will make payment by wire or telegraphic transfer to the bank account set forth below or, on receipt of written notification from Airspan, to another designated bank within the United States. + +Bank: Seafirst Bank, 10555 N.E. 8th, Bellevue, WA98004, USA. Account name: Airspan Networks Inc. Account number: 68777507 Routing Number: 125 - 0000 - 24 Further instructions: "Reference (Distributor's name), Purchase Order number, Payment of Invoice number" + +Payment will be deemed to have been made upon receipt of funds in Airspan's bank. + +7.4 If the cost to Airspan of performing this Agreement increases as a result of any change to the law or increase in import duty or freight duty, Airspan may, at any time, add such increase to the Contract Price by notifying Distributor in writing of such increase. + +8. DELIVERY, TITLE AND RISK OF LOSS. + +8.1 All Equipment and Software will be delivered by Airspan CIP (as defined in Incoterms 2000) to an airport in South Dakota that completes international customs clearances and shipped to a location within the city limits of the above arrival airport, such airport and delivery location are to be agreed upon in writing by the parties for each Purchase Order. Airspan will be responsible for and pay all packing, shipping, freight, and insurance charges to the agreed upon location within the city limits. If requested by Distributor, Airspan may arrange for shipment to be made to Distributor's identified warehouse facilities or freight forwarder outside of the city limits, subject to approval in writing by Airspan and agreement to any additional charges in advance of shipment. Unless specified in the Purchase Order, Airspan will select the mode of shipment and the carrier. + +In this Agreement, "Incoterms" means the most recent international rules for the interpretation of trade terms published by the International Chamber of Commerce as in force on the Effective Date. Unless the context otherwise requires, any term or expression which is defined in or given a particular meaning by the provisions of the Incoterms shall have the same meaning in this + +- -------------------------------------------------------------------------------- + +Page 9 + +Agreement, but if there is any conflict between the provisions of the Incoterms and this Agreement, the latter shall prevail. + +8.2 All risk of loss or damage to the Equipment and Software will pass to Distributor on collection by the freight forwarder from Airspan. However, Airspan will insure the Equipment against loss or damage in transit to the agreed to location as set forth in the Purchase Order within the city limits of the arrival airport as set forth in Paragraph 8.1. + +8.3 Title to the Equipment shall pass to Distributor on collection by the freight forwarder from Airspan. + +8.4 If Distributor has any Airspan owned Equipment in its possession: + +a. Distributor shall ensure that Equipment is clearly marked as the property of Airspan, and if asked, shall inform any third parties that the Equipment is the property of Airspan; + +b. Distributor shall not purport to create any security, mortgage, lien or pledge over the Equipment, or otherwise deal with the Equipment without Airspan's written consent; + + + + + +c. In the event of any threatened seizure of the Equipment by any third parties, and on termination or expiration of this Agreement, or any Contract made pursuant to it, Airspan shall have the right, without prejudice to any other remedy, to enter without prior notice any premises and to repossess and take away or otherwise deal with the Equipment. + +8.5 The Software shall at all times remain the exclusive property of Airspan, subject to the uses provided herein. + +8.6 Unless Distributor clearly advises Airspan to the contrary in writing, Airspan may make partial deliveries on account of Purchase Orders. Delay in delivery of any installment shall not relieve Distributor of its obligation to accept said installment, provided that said delay does not exceed sixty (60) days from Airspan's scheduled ship date and unless Distributor has clearly advised Airspan to cancel the delayed installment in writing at least fifteen (15) days prior to its revised planned shipment date or its actual shipment date by Airspan. + +8.7 Airspan will use reasonable efforts to meet Distributor's requested delivery schedules for Equipment and Software, but Airspan reserves the right to refuse, or delay delivery to Distributor when Distributor's credit is impaired, + +- -------------------------------------------------------------------------------- + +Page 10 + +when Distributor is delinquent in payments or fails to meet other credit or financial requirements reasonably established by Airspan, or when Distributor has failed to perform its obligations under this Agreement. + +8.8 Should orders for Equipment and Software exceed Airspan's available inventory, Airspan will allocate its available inventory and make deliveries on a basis that Airspan deems equitable, in its sole discretion, and without liability to Distributor on account of the method of allocation chosen or its implementation. In any event, Airspan shall not be liable for any direct, indirect, consequential, or special losses or damages (including, but not limited to, loss of income or profit and loss of data) that may be suffered by the Distributor or by any other person for failure to deliver or for any delay or error in delivery of Equipment or Software for any reason whatsoever. + +9. TRADEMARKS AND COPYRIGHTS. + +9.1 Distributor acknowledges Airspan's exclusive right, title, and interest in and to any trademarks, trade names, logos and designations which Airspan may at any time have adopted, used, or registered in the United States of America and in the Territory (the "Trademarks"), and will not at any time do or cause to be done any act or thing contesting or in any way impairing or tending to impair any part of said right, title, and interest. In connection with any reference to the Trademarks, Distributor shall not in any manner represent that it has an ownership interest in the Trademarks or registration(s) thereof, and Distributor acknowledges that no action by it or on its behalf shall create in Distributor's favor any right, title, or interest in or to the Trademarks. + +9.2 Distributor recognizes the validity of Airspan's copyright in any written material to which Airspan shall have made a claim to copyright protection, and Distributor specifically recognizes Airspan's exclusive right to copyright protection and/or registration of any translation of any advertising, promotional, or descriptive material furnished to Distributor by Airspan. + +9.3 Whenever Distributor refers to the Trademarks in advertising or in any other manner to identify the products, Distributor shall clearly indicate Airspan's ownership of the Trademarks and before distributing or publishing any advertising, descriptive, or promotional materials, Distributor shall affirmatively provide Airspan with an opportunity to inspect and approve such materials. + +9.4 Distributor agrees that when referring to the Trademarks, it shall diligently comply with all laws pertaining to the Trademarks at any time in force in the Territory. + +- -------------------------------------------------------------------------------- + +Page 11 + +9.5 Distributor shall promptly notify Airspan of any and all infringements, imitations, illegal uses, or misuses of the Trademarks which come to Distributor's attention. Distributor also agrees that it shall not at any time take any action in the courts or before the administrative agencies of the Territory or otherwise to prevent the infringement, imitation, illegal use, or misuse of the Trademarks, it being clearly understood by Distributor that such action falls wholly within the authority of Airspan as sole owner of the Trademarks. + +9.6 Distributor agrees to render to Airspan all assistance in connection with any matter pertaining to the protection of the Trademarks, whether in the courts or before the administrative agencies of the Territory or otherwise, and to make promptly available to Airspan, its Distributors, and attorneys all of Distributor's files, records, and other information pertaining to the + + + + + +advertising, promotion, and sale of the Airspan Products. All assistance requested by Distributor in this paragraph shall be at AIRSPAN's expense. This Expense includes costs, attorneys' and consultants' fees, and reimbursement of time spent by officers, agents and employees of Distributor. + +9.7 Distributor agrees and undertakes that it will not at any time, whether during the term of this Agreement or after its expiration or termination, adopt, use, or register without Airspan's prior, written consent any work or symbol or combination thereof which is similar to any of the Trademarks. + +9.8 In the advertising and sale of Airspan Products, Distributor may use the Trademarks in relation to those Airspan Products. Distributor will not make or permit the alteration or removal of any tags, labels, or other identifying marks placed by Airspan on Airspan Products. Distributor will not use or give any third party permission to use the Trademarks. Distributor will not use, or give any third party permission to use, the names "Airspan Communications Ltd.", "Airspan Networks Incorporated", "ACL", "ANI" or abbreviations or derivations thereof in Distributor's corporate titles, or in any way which might result in confusion as to Airspan and Distributor being separate and distinct entities. Distributor admits Airspan's exclusive ownership of the name "Airspan Networks Incorporated", "Airspan Communications Ltd.", "ANI", "ACL", and any abbreviations or derivations thereof and all of Airspan's Trademarks (whether registered or not). Distributor shall not take any action inconsistent with Airspan's ownership of such Trademarks; therefore, Distributor shall treat all of Airspan's items distinctively (as to typography) and shall only use exact reproductions of all Airspan's symbols (including Airspan's logo). Distributor shall not adopt or use any Trademark or product name which may be confusingly similar to any Airspan Trademark. Distributor may use the Airspan logo as it appears on Airspan's letterhead. + +10. CONFIDENTIAL INFORMATION AND TRADE SECRETS. + +- ------------------------------------------------------------------------------- + +Page 12 + +10.1 In this Agreement, the term "Confidential Information" shall mean the information of Airspan disclosed to Distributor in connection with its performance under this Agreement, which is in written, recorded, photographic, machine-readable, or other physical form or oral information reduced to writing as soon as practicable after disclosure to Distributor, and which is conspicuously marked "Confidential", "Proprietary", "Private", or in any other manner indicating its confidential and/or proprietary nature. Without limitation, Confidential Information includes: (1) Airspan's software products, materials, data reports, programs, documentation, diagrams, and all related technical information; (2) all information relating to Airspan's business and products which is critical to Airspan's position in the marketplace, including future plans of Airspan relating to the fields of endeavor in which Distributor performs services for Airspan, the nature of certain work projects to which Distributor is exposed, and the identity of persons working on those projects; and (3) any improvements, enhancements, or modifications to the above made by or on behalf of Airspan during the performance under this Agreement which are provided, made available, or disclosed by or on behalf of Airspan to Distributor, or used by Airspan or any of Airspan's other Distributors in connection with their own sales activities. + +10.2 Trade secrets are confidential information that includes ideas, concepts, techniques, processes, inventions, knowledge, and know-how developed by Airspan which: (1) derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and (2) is subject to the efforts of Airspan that are reasonable under the circumstances to maintain its secrecy. (This "trade secret" language comes from the Uniform Trade Secrets Act.) + +10.3 Distributor covenants and agrees that it will use the Confidential Information solely for the performance of services under this Agreement, and shall not disclose such Confidential Information to any other person (including Airspan employees in any other division, group, or entity), firm, or corporation. + +10.4 Distributor shall use the same degree of care in safeguarding the Confidential Information as it uses for its own confidential information of like importance, but no less than reasonable care. Upon discovery of any disclosure or misuse of Confidential Information, Distributor shall endeavor to prevent any further disclosure or misuse. + +10.5 All Confidential Information shall remain the property of Airspan, and such Confidential Information and all copies thereof shall promptly be returned to Airspan upon request or, at Airspan 's option, destroyed, in which case Airspan shall be notified in writing when it has been destroyed. + +- -------------------------------------------------------------------------------- + +Page 13 + +10.6 Nothing contained in this Agreement shall be construed as granting to or conferring upon Distributor any rights, by license or otherwise, express or implied, in Airspan's Confidential Information, other than the right to use the Confidential Information for the purpose of this Agreement. + + + + + +10.7 Any copies of the Confidential Information made by Distributor shall reproduce proprietary marking and legends included therein, but the provisions of this Agreement supersede any provisions of such legends inconsistent herewith. + +10.8 The terms and conditions of this Agreement shall not be disclosed by Distributor to others, except with the prior, written consent of Airspan, or as may be required by law or as necessary to establish its rights hereunder. + +10.9 If, in connection with its performance, Distributor discloses to Airspan any ideas, developments, or inventions conceived or actually reduced to practice by Distributor prior to its performance hereunder, no relationship, confidential or otherwise, express or implied, is established with Airspan by the disclosure thereof. With respect to any such disclosure, no obligation of any kind is assumed by nor may be implied against Airspan, its subsidiary, or associated companies unless a formal, separate, written contract regarding the subject of disclosure is consummated by the parties, and then the obligation shall be only as expressed in the separate contract. + +10.10 Distributor agrees that any breach of the provisions of this Section by Distributor or Distributor's personnel, agents, or subcontractors, or any third party providing products or services to Distributor will cause immediate and irreparable injury to Airspan and that, in the event of such breach, Airspan shall be entitled to injunctive relief and any and all other remedies available at law or in equity. + +10.11 After Distributor has received Airspan's Confidential Information and know-how, it will be impossible to segregate Airspan's knowledge and know- how from other knowledge acquired independently by Distributor. Accordingly, during the performance of this Agreement and for three (3) months after termination of services under this Agreement, Distributor will not offer services to third parties which compete with the services provided by Airspan under this Agreement, or otherwise use the knowledge acquired from Airspan in order to compete with Airspan or its customers. Notwithstanding anything to the contrary above, Distributor is not precluded from any activities which concern product sectors or industries other than those that concern products or services similar to those offered by Airspan in connection with this Agreement. Nothing in this paragraph will be construed to prevent Distributor from providing service to existing customers of Distributor which would result in their interruption of service to the public. + +- -------------------------------------------------------------------------------- + +Page 14 + +10.12 During the performance of this Agreement and for three (3) months after termination of services under this Agreement, Airspan will not offer products or services to third parties which compete with the products or services provided by Distributor under this Agreement, or otherwise use the knowledge acquired from Distributor in order to compete with Distributor its customers + +10.13 The obligations of this Section 10 shall survive the expiration or termination of this Agreement. + +11. SOFTWARE LICENSE. + +11.1 Airspan grants Distributor, and Distributor hereby accepts, a nonexclusive, non-transferable license to use, and to sublicense as set forth below, Software provided by Airspan hereunder only on a single System or unit of Equipment, as may be applicable. No license is granted to use the Software on multiple Systems or in conjunction with Equipment furnished by a party other than Airspan, unless specifically agreed to in writing by Airspan. Software licensed under this Agreement is defined as: (a) any digital instruction sequence or control data contained on any media, including but not limited to, any magnetic-, electronic-, optical-, or organic device, and the term Software shall include any enhancement, modification, extension, part, portion or expansion thereof or implementation or downloading from network of any of the foregoing, for use exclusively on a System or a unit of Equipment; and (b) all associated documentation used to describe, maintain and use the Software. + +11.2 Any Software provided to Distributor by Airspan will be treated as the exclusive property of Airspan, and Distributor will: (a) treat such Software as Confidential Information under Section 10 of this Agreement; (b) utilize such Software or any portions or aspects thereof (including any methods or concepts utilized therein) solely on Systems or Equipment provided by Airspan; (c) forthwith return to Airspan all memory media, documentation and/or other material that has been modified, updated or replaced; (d) except to the extent permitted by applicable law not modify, disassemble or decompile such Software, or reverse engineer any portion of the Software or functioning of Systems or Equipment, or permit others to do so, without Airspan's prior written consent; (e) except to the extent permitted by applicable law not reproduce or copy such Software in whole or in part except for backup and archival purposes or as otherwise permitted in writing by Airspan; (f) not perform or release benchmarks or other comparisons of the Software; and (g) not remove any trademark, tradename, copyright, notice or other proprietary notice from the Software and Distributor shall be responsible for the conservation of the same on any back-up copy of the Software. + +- -------------------------------------------------------------------------------- + +Page 15 + + + + + +11.3 In the event of a breach of this license by Distributor, then Airspan may, in its discretion, terminate the license with immediate effect, whereupon Distributor shall return to Airspan all Software and copies thereof within ten (10) days. + +12 EXCUSABLE DELAY. + +Airspan shall not suffer any liability for non-performance, defective performance, or late performance under this Agreement due to causes beyond its control and without its fault or negligence such as, but not limited to, acts of God, war (including civil war), civil unrest, acts of government, fire, floods, explosions, the elements, epidemics, quarantine, restrictions, strikes, lock- outs, plant shutdown, material shortages, or delays in transportation or delays of its suppliers or subcontractors for like cause. + +In the event of excusable delay as defined in the preceding sentence, then Airspan, upon giving prompt written notice to Distributor, shall be excused from such performance on a day-to-day basis to the extent of such prevention, restriction, or interference (and Distributor shall likewise be excused from performance of its obligations on a day-to-day basis to the extent Distributor's obligations relate to the performance so prevented, restricted, or interfered with), provided that Airspan shall use its best endeavors to avoid or remove such causes of non-performance and both parties shall proceed to perform with dispatch whenever such causes are removed or cease to exist. + +13. TERM AND TERMINATION. + +13.1 This Agreement shall remain in effect for sixty (60) months from the Effective Date (the "Initial Term"). After the Initial Term, the term of the Agreement may be extended by a further period of five (5) years by mutual written agreement by the parties in the form of an amendment to this Agreement. If Distributor wishes to extend the term of the Agreement beyond the Initial Term, it must notify Airspan in writing at least six (6) months prior to then end of the Initial Term. However, nothing contained herein shall be interpreted as requiring either party to renew or extend this Agreement. Notwithstanding the provisions of this section or of any other provisions of this Agreement, this Agreement may be terminated prior to the expiration of its stated term as set forth below. + +13.2 Either party may terminate this Agreement at any time during the term of this Agreement if either party fails materially to comply with any covenant, term, or provision of this Agreement, by written notice given to the other party not less than thirty (30) days prior to the effective date of such termination. Either party's right to terminate this Agreement under this Section 13.2 may not be exercised unless said + +- -------------------------------------------------------------------------------- + +Page 16 + +party shall have given the other party written notice of the failure, and the other party has not cured the failure within the thirty (30) day period following notice from said party. + +13.3 This Agreement terminates automatically for just cause, with no further act or action of either party if: (a) a receiver is appointed for Distributor or its property; (b) Distributor&sbsp;makes an assignment for the benefit of its creditors; (c) any proceedings are commenced by, for, or against Distributor under any bankruptcy, insolvency, or debtor's relief law; or (d) Distributor is liquidated, dissolved, or otherwise terminates its activities. + +13.4 In the event of termination by either party for any reason, Distributor shall provide Airspan with lists of existing customers as well as other information necessary for an orderly changeover of representation in the Territory. + +13.5 Upon termination, Distributor shall immediately return to Airspan all Confidential Information, and Distributor agrees that neither it nor any company or organization controlled or directed by it shall divulge the contents of such material to any person at any time, notwithstanding the termination of this Agreement. + +13.6 Airspan shall not be liable to Distributor for damages of any kind, including incidental or consequential damages, on account of the termination of this agreement in accordance with this section 13. Airspan shall not be liable to Distributor on account of termination or expiration of this Agreement for reimbursement or damages for loss of goodwill, prospective profits, or anticipated orders, or on account of any expenditures, investments, leases, or commitments made by either party, or for any other reason whatsoever based upon or growing out of such termination or expiration. Airspan will recognize payments due to Distributor for orders received up to ninety (90) days after the termination or expiration of this Agreement. + +13.7 Distributor acknowledges and agrees that: (a) Distributor has no expectation and has received no assurances that its business relationship with Airspan will continue beyond the states term of this agreement or its earlier termination in accordance with this section, that any investment by Distributor in the promotion of Airspan's Products will be recovered or recouped, or that Distributor shall obtain any anticipated amount of profits by virtue of this Agreement; and (b) Distributor shall not have or acquire by virtue of this Agreement or otherwise any vested, proprietary, or other right in the promotion of Airspan's Products or in any goodwill created by its efforts hereunder. + + + + + +13.8 This Section 13.8, as well as the provisions of Sections 9, 10, 11, 16, 17 and 18, shall survive the termination of this Agreement. + +- ------------------------------------------------------------------------------- + +Page 17 + +14. WARRANTY. + +14.1 THE WARRANTIES SET FORTH IN SECTIONS 14 AND 15 OF THIS AGREEMENT ARE IN LIEU OF, AND Airspan HEREBY DISCLAIMS, ALL OTHER WARRANTIES AND CONDITIONS, WHETHER EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION, THE IMPLIED TERMS AND WARRANTIES OF SATISFACTORY QUALITY, MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. + +14.2 Subject to Sections 14.3 and 14.4, Airspan warrants that the Equipment sold to Distributor under this Agreement shall, under normal use and service, be free from defects in materials and faulty workmanship, and that the Software licensed to Distributor under this Agreement shall conform in all material respects to Airspan's published specifications therefor. The warranty period for any item of Equipment and related Software shall be twelve (12) months from the date of delivery of such Equipment and related Software to Distributor as set forth in Paragraph 8.1 (hereinafter, this period of time shall be referred to as the "Initial Warranty Period.") + +14.3 Airspan's obligation and Distributor's sole remedy under this warranty are limited to the replacement or repair, at Airspan's option, of the defective Equipment or Software within the Initial Warranty Period. Airspan shall have no obligation to remedy any such defect if it can be shown that: (a) the Equipment or Software was altered, repaired, or reworked by any party other than Airspan without Airspan's prior written consent; (b) such defects were the result of Distributor's or a third party's improper storage, mishandling, abuse, or misuse of the Equipment or Software; (c) such defects were the result of Distributor's or a third party's use of the Equipment or Software in conjunction with equipment electronically or mechanically incompatible or of an inferior quality; or (d) the defect was the result of damage by fire, explosion, power failure, or any act of nature. + +14.4 In no event shall Airspan be obliged to provide on-site maintenance. Subject to the provisions of this warranty clause, defective parts or components must be returned by Distributor to Airspan's designated facility located within the contiguous 48 states in the United States, freight prepaid, within the Initial Warranty Period, and said defective parts will be repaired or replaced by Airspan at no charge to Distributor. In connection with such return by Distributor, Distributor shall comply with Airspan's Return Material Authorization (RMA) procedures. Risk of loss or damage to Equipment or Software returned to Airspan for repair or replacement shall be borne by Distributor until delivery to Airspan. Upon delivery of such Equipment or Software, Airspan shall assume the risk of loss or damage until that time that the Equipment or Software being repaired or replaced is returned and delivered to Distributor. Distributor will pay all transportation costs for Equipment or Software shipped to Airspan for repair or replacement. Airspan shall pay all transportation costs associated + +- ------------------------------------------------------------------------------- + +Page 18 + +with returning repaired or replaced Equipment or Software to Distributor unless there was no fault found (NFF), in which event, the Distributor shall pay such transportation costs, along with Airspan's then prevailing standard NFF charge. + +14.5 Airspan will charge Distributor for any maintenance carried out which is not covered by the warranties contained in Section 14.2 or Section 15 at Airspan's then prevailing standard rates for such services. + +15. WARRANTY ON REPAIRED AND REPLACEMENT MATERIALS. + +Airspan warrants that, following repair or replacement, the repaired or replaced Equipment or Software by Airspan shall be free from defects in materials and faulty workmanship and that the Software will conform in all material respects to Airspan's published specifications therefor for ninety (90) days from date of shipment from Airspan to Distributor or until the end of the Initial Warranty Period, whichever is longer. + +16. LIMITATION OF LIABILITY. + +16.1 WITHOUT PREJUDICE TO SECTION 16.4, NEITHER Airspan, NOR ANY OF ITS OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, REPRESENTATIVES, SHAREHOLDERS, OR AFFILIATES (Airspan AND SUCH OTHER PERSONS, THE "Airspan PARTIES"), SHALL HAVE ANY LIABILITY TO DISTRIBUTOR FOR LOSS OF PROFITS, INCOME, REVENUE OR DATA, OR INCIDENTAL, CONSEQUENTIAL, INDIRECT OR PUNITIVE DAMAGES OR LOSSES, ARISING FROM OR IN CONNECTION WITH THIS AGREEMENT, ANY PURCHASE ORDER PLACED PURSUANT TO THIS AGREEMENT OR ANY OTHER COLLATERAL CONTRACT, OR FROM OR IN CONNECTION WITH THE EQUIPMENT OR THE SOFTWARE OR THE USE THEREOF OR THE INABILITY TO USE THEM EITHER SEPARATELY OR IN COMBINATION WITH OTHER EQUIPMENT OR SOFTWARE, OR FROM ANY OTHER CAUSE, WHETHER CAUSED BY NEGLIGENCE, BREACH OF CONTRACT, STRICT LIABILITY, BREACH OF WARRANTY, ON GROUNDS OF FAILURE OF ESSENTIAL PURPOSE OR OTHERWISE. + +16.2 Without prejudice to Sections 16.3 and 16.4, the liability of the Airspan Parties, taken as a whole, for each event or series of connected events + + + + + +arising out of or in connection with this Agreement, any purchase order placed pursuant to this Agreement, or any other collateral contract, or from or in connection with the Equipment or Software or the use thereof, or the inability to use them either separately or in combination with other equipment or software, or from any other cause, whether caused by negligence, breach of contract, strict liability, breach of warranty, on grounds of failure of essential purpose, or otherwise, shall in no circumstance exceed the total amount payable by Distributor to Airspan under this Agreement for the provision of + +- ------------------------------------------------------------------------------- + +Page 19 + +the Equipment or Software which gave rise to the loss or damage or in connection with which the loss or damage was incurred. + +16.3 Airspan Parties, taken as a whole, shall be liable for physical damage to Distributor's property resulting from Airspan's negligence under or in connection with this Agreement up to a maximum aggregate amount of one million US Dollars (US$1,000,000). And Distributor, taken as a whole, shall be liable for physical damage to Airspan's property resulting from Distributor's negligence under or in connection with this Agreement up to a maximum aggregate amount of one million US Dollars (US$1,000,000). + +16.4 Nothing in this Agreement shall exclude or in any way limit Airspan liability for death or personal injury caused by its negligence. + +16.5 Save as provided for in Section 17 Distributor shall indemnify and hold harmless and defend the Airspan Parties from and against all claims, demands, actions, suits, proceedings, writs, judgments, orders and decrees brought, made or rendered against them or any of them and all damages, losses and expenses suffered or incurred by them or any of them howsoever arising out of or related to the breach by Distributor of any of the terms of this Agreement. Airspan shall notify Distributor forthwith of any claim, demand, action, suit, proceeding, writ, judgment, order or decree falling within the scope of this Section 16.5 and shall permit Distributor sole conduct of the same and shall provide reasonable assistance in relation thereto, subject to appropriate defense by Distributor and the payment by Distributor of Airspan's reasonable costs and expenses. + +16.6 Distributor shall include, in its agreements with its customers pursuant to which Distributor supplies Equipment or Software, provisions pursuant to which such customers agree that the Airspan Parties shall have no liability for any of the types of damages referred to at Section 16.1 in connection with or arising from the Equipment or Software or the use thereof, or the inability to use them either separately or in combination with other equipment or software, or from any other causes. + +17. INTELLECTUAL PROPERTY RIGHTS INDEMNITY. + +17.1 Airspan agrees to indemnify and hold Distributor harmless with respect to any suit, claim, or proceeding brought against Distributor by a third party alleging that Distributor's use of the Equipment or the Software, separately or in combination, as a whole or in part, constitutes an infringement of any patent or copyright or misuse of proprietary or trade secret information. Airspan agrees to defend Distributor against any such claims and to pay all litigation costs, reasonable attorney's fees, settlement payments, and any damages awarded or resulting from any such claim. + +- ------------------------------------------------------------------------------- + +Page 20 + +17.2 Distributor shall promptly advise Airspan of any such suit, claim, or proceeding and shall co-operate with Airspan in the defense or settlement thereof. Airspan shall have sole control of the defense of any action involving such a claim and of all negotiations for its settlement or compromise. + +17.3 In the event that an injunction is obtained against Distributor's use of the Equipment and/or the Software, in whole or in part, as a result of any such claim, Airspan shall use its best efforts to either: (a) procure for Distributor the right to continue using the portions of the Equipment or the Software enjoined from use; or (b) replace or modify the same with functionally equivalent or better Equipment and/or Software so that Distributor's use is not subject to any such injunction. In the event that Airspan cannot perform the remedies set forth in Sections 17.3(a) or 17.3(b), then Distributor shall have the right to return such Equipment and the Software to Airspan. In the event of such return, Airspan shall refund the depreciated value of the Equipment and the license to use the Software within thirty (30) days of the receipt by Airspan of the Equipment and the Software. + +17.4 This indemnity shall not apply to claims arising in respect to the use of the Equipment or Software supplied by Airspan or manufactured by its suppliers in accordance with any design or any special instruction furnished by Distributor, or which is used by Distributor in a manner or for a purpose not contemplated by this Agreement. + +17.5 The provisions of this Section 17 set forth the entire obligation of Airspan with respect to any claim of patent infringement, copyright infringement, or misuse of proprietary or trade secret information. + +18. EXPORT CONTROLS AND LEGAL COMPLIANCE. + + + + + +18.1 If any approval with respect to this Agreement, or the registration thereof, shall be required at any time during the term of this Agreement, with respect to giving legal effect to this Agreement in the Territory, or with respect to compliance with exchange regulations or other requirements so as to assure the right of remittance abroad of United States dollars pursuant to Section 6 hereof, Distributor shall immediately take whatever steps may be necessary in this respect, and any charges incurred in connection therewith shall be for the account of Distributor. Distributor shall keep Airspan currently informed of its efforts in this connection. Airspan shall be under no obligation to ship Airspan Products to Distributor hereunder until Distributor has provided Airspan with satisfactory evidence that such approval or registration is not required or that it has been obtained. + +18.2 In the performance of its obligations under this Agreement, Distributor shall at all times strictly comply with all export laws, regulations, and orders of the + +- ------------------------------------------------------------------------------- + +Page 21 + +United Kingdom and the United States of America. Distributor specifically acknowledges that Equipment, Software or technology supplied or licensed by Airspan under this Agreement are subject to U.K. and U.S. trade sanctions and export control laws and regulations including, but not limited to, the various Foreign Assets Control Regulations, the Export Administration Regulations, and the International Traffic in Arms Regulations. Distributor specifically acknowledges that Equipment, Software, or technology obtained from Airspan pursuant to this Agreement shall not be exported, re-exported, transshipped, disclosed, diverted, or transferred, directly or indirectly, contrary to U.K. and U.S. laws, orders or regulations. The provisions of this section shall survive any termination of this Agreement. + +19. TRAINING AND DOCUMENTATION. + +19.1 Airspan shall provide a single technical course in the English language for up to two (2) qualified technicians of Distributor during the first year of this Agreement. The training course so developed by Airspan shall be used to familiarize Distributor's technicians with the use and maintenance of Airspan Products. Training will be conducted at Airspan's facilities in Uxbridge, UK, unless otherwise agreed to by Airspan. The necessary instructors and training facilities will be provided by Airspan at no charge to Distributor. Distributor will pay all additional expenses of training including, but not limited to, travel and room and board. Additional training courses may be requested by Distributor at Airspan's then current rates for such courses. + +19.2 Airspan agrees to provide Distributor at no additional charge with its standard package of documentation related to the use, maintenance, and installation of Airspan Products. In the event that such documentation is modified during the term of this Agreement, Airspan agrees to provide to Distributor at no additional charge all such modifications. In addition to the documentation described above, Airspan agrees to provide at no additional charge reasonable amounts of sales materials such as brochures, press releases, and fact sheets. All documentation provided by Airspan to Distributor shall be in the English language. All translation of such documentation provided by Airspan will be at Distributor's sole expense. All such translations and advertising material not supplied by Airspan relating to Airspan Products and services will be submitted to Airspan for approval before publication or dissemination. + +20. CONFLICT OF INTEREST. + +Distributor confirms that it has revealed all information pertaining to possible conflicts of interest created by the sale of competing products or services or arising from other positions or contracts held by Distributor, and represents that no conflict of interest exists. Any future circumstances which could create possible conflicts of interest will be revealed to Airspan as soon as they become known by informing Airspan of any business relationships, circumstances, or situations which could prejudice in any way + +- -------------------------------------------------------------------------------- + +Page 22 + +the conduct of Airspan marketing activities according to the highest ethical and business standards, or place Airspan or Distributor in any kind of embarrassing situation. + +21. MISCELLANEOUS. + +21.1 Pursuant to the Foreign Corrupt Practices Act of the United States of America, directors, officers, or employees of Distributor shall not offer or pay any bribe to any individual or corporation in connection with the provision or support of any Airspan Products obtained under this Agreement. When other individuals or organizations are required to participate in the sales program covered by this Agreement, they shall be compensated fairly based on the tasks performed. In no circumstances are public servants or holders of public office to be offered or paid any bribe or other benefit, direct or indirect. No contribution in any way related to Airspan shall be made to candidates for public office or to political parties or other political organizations, regardless of whether such contributions are permitted by the laws of the Territory. The parties agree that both parties will comply fully with all of the terms, conditions, rules, regulations and statutes of the Foreign Corrupt Practices Act. The parties further agree that if either party violates any of + + + + + +the provisions of said Act, the party violating the Act will indemnify the other party from any and all liability thereunder, including costs, expenses, fines or legal fees. + +21.2 In performing this Agreement, the parties shall comply with all applicable laws, rules, and regulations, and shall indemnify, defend and save each other harmless from said party's failure to do so. Furthermore, if this Agreement, the relationship created hereby or the performance hereof is determined by either party to be contrary either to (a) the laws, rules or regulations applicable to the parties; or (b) the parties' representations as set forth herein, this Agreement will be null and void from its inception. The parties have entered into this Agreement in material reliance on the following representations made by each party that: + +a. Neither this Agreement, the relationship created hereby nor the performance hereof is contrary to any applicable law, rule or regulation; + +b. The parties have not refunded and will not refund either directly or indirectly, any funds to any director, officer, employee or other representative of either party (or of any subsidiary controlled by or affiliated with either party) or to such party's family; and + +c. The parties represent and covenant that they have not made and will not commit themselves to make, nor will they directly or indirectly make, any payments in connection with the business of the parties to any director, officer, official, employee or shareholder of any governmental or private + +- -------------------------------------------------------------------------------- + +Page 23 + +customer, or prospective customer, or of any political party, or to such party's family, or that are otherwise illegal under applicable law. + +Distributor understands and agrees that Airspan will comply with any legal provision requiring disclosure of, or request from a government or governmental or private customer to disclose, by affidavit or otherwise, the identity of payments made or to be made to Distributor. + +21.3 Neither party may assign this Agreement or subcontract its obligations under this Agreement to another party without the other party's prior, written consent executed by a duly authorized officer. The parties agree that if said assignment is to a subsidiary or affiliate organization, said consent to assignment will not be unreasonably withheld. + +21.4 This Agreement shall be construed in accordance with and governed by the laws of the State of South Dakota. + +21.5 Any dispute, controversy or claim between the parties arising out of, or in connection with, this Agreement, or the breach, termination or validity thereof will be resolved by mutual agreement of the parties, provided that this shall not limit the ability of the parties to seek temporary or interim injunctive relief in the event of any breach or threatened or impending breach of the confidentiality provisions of this Agreement. If any dispute, controversy, or claim arising out of or relating to this Agreement, or the breach, termination or validity thereof is unable to be resolved by mutual agreement of the parties, each of the parties hereby (i) agrees that any action, suit or proceeding with respect to this Agreement against it or its properties or revenues must be brought exclusively in the federal and state courts siting in Minneapolis, MN, and (ii) irrevocably submits to the exclusive jurisdiction of any such court and any appellate court from any order or judgment thereof in any such action, suit or proceeding. The parties hereby irrevocably agree that all claims in respect of such action, suit or proceeding may be heard and determined in such courts. The parties hereby irrevocably waive, to the fullest extent they may effectively do so, the defense of an inconvenient forum to the maintenance of such action, suit or proceeding. The parties agree that a final judgment in any such action, suit, or proceeding will be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. + +21.6 The parties' failure to enforce at any time any of the provisions of this Agreement or any right with respect thereto, or to exercise any option herein provided shall in no way be construed to be a waiver of such provision, rights, or options, or in any way to affect the validity of this Agreement. The parties' exercise of any of their rights hereunder or of any options hereunder under the terms or covenants herein shall not preclude or prejudice the parties from thereafter exercising the same or any right + +- -------------------------------------------------------------------------------- + +Page 24 + +which they may have under this Agreement, irrespective of any previous action or proceeding taken by either party hereunder. + +21.7 In the advertising and sale of Airspan products, Distributor will utilize Airspan's regular trade names and trademarks only as permitted or directed by Airspan, will not make or permit alteration or removal of any tags, labels, or other identifying marks placed by Airspan on its products, and will not use the name "Airspan Communications Corporation" or abbreviations thereof in Distributor's corporate titles or in any other way which might result in confusion as to Airspan and Distributor being separate and distinct entities. + + + + + +Distributor will not register any Airspan trademark. + +21.8 This Agreement shall be binding upon the parties, their heirs, successors in interest and permitted assigns. + +21.9 This Agreement and any attachment hereto shall be modified only by an instrument in writing and signed by duly-authorized officers or agents of the parties. + +21.10 All notices, requests, consents, and other communications hereunder must be in writing and will be deemed to have been properly given when actually received by the party to whom sent, at the following addresses: + +To: Airspan To: Distributor + +Airspan Networks Inc. GLS LLC 777 108 Th. Avenue NE 501 Fourth Street Suite 1895 PO Box 67 Bellevue, Washington Sergeant Bluff, IA 98004 51054 Attn: Peter Stanway Attn: Jon Winkel Contracts Manager Fax No. 919-319-0106 + +21.11 The provisions of this Agreement are severable, and if any provision is held invalid or unenforceable in whole or in part in any jurisdiction, then such invalidity or unenforceability will affect only such provision or part thereof in such + +- ------------------------------------------------------------------------------ + +Page 25 + +jurisdiction, and will not in any manner affect the provision in any other jurisdiction, or any other provision in this Agreement in any other jurisdiction. + +21.12 Distributor agrees not to publish any press releases or otherwise publicize the existence, or any of the terms, of this Agreement without the prior written consent of Airspan, such consent not unreasonably to be withheld or delayed. + +22. This document constitutes the entire agreement between the parties with respect to the subject matter hereof, and supersedes all previous communications, representations, understandings, and agreements, either oral or written, between the parties or any official or Distributor thereof with respect to the subject matter hereof. + +- -------------------------------------------------------------------------------- + +Page 26 + +IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the Effective Date, such parties acting by their officers, being thereunto duly authorized. + +Airspan Networks Inc. GLS LLC + +By: _______________________________ By: ______________________________ + +Name: ______________________________ Name: _____________________________ + +Title: ______________________________ Title: ____________________________ + +Page 27 \ No newline at end of file diff --git a/full_contract_txt/AIRTECHINTERNATIONALGROUPINC_05_08_2000-EX-10.4-FRANCHISE AGREEMENT.txt b/full_contract_txt/AIRTECHINTERNATIONALGROUPINC_05_08_2000-EX-10.4-FRANCHISE AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..240ab394defcec887bcb8313d4c1c4be044ecaf2 --- /dev/null +++ b/full_contract_txt/AIRTECHINTERNATIONALGROUPINC_05_08_2000-EX-10.4-FRANCHISE AGREEMENT.txt @@ -0,0 +1,701 @@ +[LOGO] + + EXHIBIT C + + AIRSOPURE FRANCHISE AGREEMENT + +THIS AGREEMENT is entered into on this ____ day of ___________, 2000, by and between Airsopure International Group, Inc., a Nevada corporation whose principal place of business is located at 15400 Knoll Trail, Suite 200, Dallas, Texas 75248 (hereinafter "AIRSOPURE" or by reference "we", "us", "our"), and You: , ------------------------------------ whose address is: + +- ---------------------------------------- + +- ---------------------------------------- (hereinafter "You" or by reference "Franchisee", or "Your"). Either Party or both Parties respectively may be referred to as "Party" or "Parties." + + RECITALS + +A. AIRSOPURE and its affiliate design, manufacture and distribute indoor air cleaning systems under the name and mark "AIRSOPURE" (the "Products"). + +B. AIRSOPURE has developed a system for the establishment, development and operation of sales centers ("AIRSOPURE Center(s)" or "Center(s)") for the sale and servicing of AIRSOPURE's exclusive line of Products using the service mark "AIRSOPURE" and other trademarks, service marks (including but not limited to, "The Essence of Clean Air"), logos and identifying features designated from time to time by AIRSOPURE (the "Licensed Marks") and using AIRSOPURE's distinctive methods for establishing and operating AIRSOPURE Centers. + +C. You desire to establish an AIRSOPURE Center to be located in the following geographic area: + +- ---------------------------------------- + +- ---------------------------------------- + +(the "Exclusive Territory"), and AIRSOPURE desires to grant You the right to operate an AIRSOPURE Center at such location under the terms and conditions contained in this Agreement. + +NOW, THEREFORE, in consideration of the mutual rights, covenants and obligations set forth herein, the Parties agree as follows: + +1. GRANT OF FRANCHISE + +1.01. AIRSOPURE grants to You, and You accept from AIRSOPURE, the right and license to operate an AIRSOPURE Center (or the "Franchise") for the sale or lease of AIRSOPURE's exclusive line of Products or at a location in the Exclusive Territory to be approved in writing by AIRSOPURE and listed in attached Exhibit A (the "Exclusive Territory and Center Location"), to purchase Products from AIRSOPURE or its affiliates for resale at the Center to customers in the Exclusive Territory, and to use the Licensed Marks only in connection with the operation of the Franchise in accordance with the terms and conditions of this Agreement. AIRSOPURE grants the Franchise to You hereunder in reliance upon Your agreement to at all times operate and manage the Franchise faithfully, honestly and diligently in strict conformance with AIRSOPURE's operating procedures and specifications, as set forth herein and as otherwise from time to time communicated to You, using Your best efforts to promote and enhance the performance and operation of the Franchise. + +1.02. AIRSOPURE hereby grants to You the exclusive right to solicit customers for the Products by direct mail advertising, or other approved means, but not including the World Wide Web (Internet) nor by printed catalogues, in + + 1 + +the Exclusive Territory described above and in Exhibit A. Other AIRSOPURE franchisees will not be permitted to solicit customers for Products by advertising in Your Exclusive Territory. Likewise, You may not target or solicit customers for Products by advertising in other Franchisees respective Exclusive Territories. Exclusive Territories will not overlap into other Exclusive Territories. You shall not purposely solicit sales and service to customers located outside Your Exclusive Territory, provided such activity in not within an assigned Exclusive Territory. You have been granted an exclusive trade area by this Agreement. + +2. TERM AND RENEWAL + +2.01. The term of this Agreement shall be for 10 years commencing on the date of execution of this Agreement by AIRSOPURE. + +2.02. At the expiration of the term or any renewal term hereof, You may, at its option, renew the Franchise granted hereunder for 2 additional terms of 10 years each on the following terms and conditions: + + + + + +A. You shall give AIRSOPURE notice in writing of Your election to renew this Agreement at least 3 months prior to the expiration of the then-current term. + +B. You shall not be in default of any provision of this Agreement or amendment hereto, including without limitation all payment obligations to AIRSOPURE and its affiliates. + +C. As a condition of renewal of the Franchise, You agree to execute AIRSOPURE's then-current form of franchise agreement and to comply fully with all terms and conditions thereof, and to pay AIRSOPURE the then-current renewal fee, which is presently $1,000.00. You understand that AIRSOPURE may revise its franchise agreement for any renewal term, at AIRSOPURE's sole discretion, including without limitation to increase the royalty fees or other fees payable by You or to require other obligations of franchisees. + +D. You shall meet AIRSOPURE's then-current qualifications and training requirements. + +E. You shall execute a general release in a form prescribed by AIRSOPURE releasing AIRSOPURE and its affiliates, directors, officers, employees and agents from all known and unknown claims and liabilities to the extent permitted by state and federal law. + +F. You may be required, at AIRSOPURE's sole discretion, to upgrade or remodel Your AIRSOPURE Center to conform to AIRSOPURE's then-current specifications and standards as specified in AIRSOPURE's Operating Manual of otherwise in writing, provided such upgrade or remodel is reasonable in terms of cost and implementation schedule. + +3. FEES + +3.01. In consideration of the Franchise rights and license granted herein, You agree to pay to AIRSOPURE the following fees: + +A. You shall pay to AIRSOPURE an initial franchise fee of $25,000.00 upon execution of this Agreement. You agree that the initial franchise fee represents payment for the initial grant of the Franchise rights and license granted herein, shall be fully earned upon execution of this Agreement, and the said fee will not be refunded under any circumstances unless otherwise specifically set forth herein. You must find a suitable Center site within 90 days of signing the Franchise Agreement, unless we mutually agree otherwise. If we cannot agree on a Center location, within 4 months, we may a) extend your search time, b) exchange your territory, or c) terminate your Franchise and refund up to 70% of your Franchise Fee, at our sole discretion. There are no refunds under any other circumstances. + +B. You shall pay to AIRSOPURE a continuing non-refundable royalty fee on a monthly basis of + + 2 + +5% of Your total monthly gross sales, as defined below. This fee is due by the 7th of the month for the preceding month. + +C. You shall account to AIRSOPURE for Your continuing non-refundable local advertising fee of 2% of Your total monthly gross sales, which You must spend on the promotion of Your Center. This accounting is due by the 7th of the month for the preceding month. + +D. You shall pay to AIRSOPURE a continuing non-refundable Advertising Fund fee of 2% of Your total monthly gross sales, beginning January 1, 2001, or later at our sole option, as described in Section 10 hereof. This fee will be due by the 7th of the month for the preceding month. + +E. "Gross sales" as used in this Section 3.01 shall mean the amount of gross revenues received by You from all sources, including without limitation sales of Products, services or other merchandise of every kind or nature from, at or in connection with the operation of the AIRSOPURE Center granted herein, excluding state, federal or local sales taxes collected from customers and paid to the appropriate taxing authority. + +F. Fees payable under Paragraphs 3.01.B and 3.01.D above shall be due and payable monthly by the seventh day of each month, based on Your gross sales of the previous month. Delinquent fees shall bear interest at a rate of the lower of: (i) one and one-half percent (1.5%) per month, or (ii) the maximum rate permitted by applicable law. + +4. DUTIES OF AIRSOPURE + +4.01. Prior to the opening of the Franchise, AIRSOPURE shall: + +A. Following receipt in writing from You of a request for approval of at least 3 possible locations as the Authorized Location for the Franchise, AIRSOPURE will promptly evaluate such locations and notify You in writing of its approval or rejection of such location(s) within 7 working days. + +B. Provide You with AIRSOPURE's specifications and requirements or other assistance deemed necessary by AIRSOPURE to assist You in opening the Center. + +C. Provide an initial training program for 2 people to be designated by You as described in AIRSOPURE's Operations Manual. + +D. Provide one copy, on loan to You, of AIRSOPURE's Operations Manual as described in Section 8 hereof for use solely in connection with operation of the + + + + + +AIRSOPURE Center granted hereunder. + +E. Sell to You an opening order of Products for resale or lease at the Franchise as described in Paragraph 6.01 below. + +4.02. Following the opening of the Franchise, AIRSOPURE shall: + +A. Provide daily consultation by telephone as reasonably requested by You during the first two weeks of operation of the AIRSOPURE Center Franchise. + +B. Provide continuing general advisory assistance as deemed necessary by AIRSOPURE regarding the operation and advertising of the Franchise. + +C. Provide updates, revisions and amendments to the AIRSOPURE Operating Manual and system as AIRSOPURE may from time to time deem necessary or desirable. + +D. Fill Your orders for Products for resale at the Franchise in accordance with Section 6 below. + +E. Provide training programs or seminars as AIRSOPURE may, from time to time in its sole discretion, deem appropriate. AIRSOPURE's training programs for franchisees is described in AIRSOPURE's Operations Manual, and is subject to change at any time in AIRSOPURE's sole + + 3 + +discretion. + +F. AIRSOPURE may, from time to time at its sole discretion, provide test customers or store visits by AIRSOPURE representatives to evaluate Your methods of operation and compliance with AIRSOPURE's standards and specifications. + +5. YOUR DUTIES + +5.01. You shall: A. You must find a suitable Center site within 90 days of signing the Franchise Agreement, unless we mutually agree otherwise, and attend (or if You are a corporation, Your majority shareholder will attend or Your Operating Principal or manager and one other employee) and successfully complete to AIRSOPURE's reasonable satisfaction AIRSOPURE's initial training program within 90 DAYS following execution of this Agreement. + +B. Obtain all federal, state and local business licenses, permits, certifications and bonds required for lawful operation of the Franchise and certify in writing to AIRSOPURE prior to opening that all such requirements have been obtained. + +C. Attend (with Your manager) and complete to AIRSOPURE's reasonable satisfaction such continuing training or educational programs as AIRSOPURE may from time to time require in writing. AIRSOPURE will not charge You for the training programs, but You shall be responsible for the costs of meals, lodging, travel and all other expenses incurred by You or Your employees in attending such programs. + +D. Actively promote AIRSOPURE's Products and services and exert Your best efforts to fully develop and maximize the market for AIRSOPURE's Products and services in Your Exclusive Territory. + +E. Devote Your full time (or if You are a corporation, designate a manager) to oversee the management and operation of the Center. + +F. Purchase and maintain and adequate supply for use in connection with the operation of the Franchise Business various copyrighted materials and forms which are the proprietary property of AIRSOPURE and which are an integral part of AIRSOPURE's system franchised hereunder. Other supplies and equipment necessary for operation of the Center may be purchased from third Party suppliers who meet AIRSOPURE's standards and specifications and have been approved in writing by AIRSOPURE in accordance with the procedures set forth in AIRSOPURE's Operating Manual, which may be amended from time to time by AIRSOPURE at its sole discretion. + +G. Purchase Products from AIRSOPURE for resale to customers in the Exclusive Territory in accordance with Section 6 below. + +H. Comply with all federal, state and local health and safety laws, rules and standards applicable to operation of the Franchise. You will forward copies of all notices of non-compliance by the Franchise with any law, rule, regulation or ordinance to AIRSOPURE within three days from receipt thereof accompanied by a summary of action You will take to comply. + +I. Maintain adequate working capital to operate the Franchise in accordance with the AIRSOPURE Operations Manual, as such may be amended by AIRSOPURE from time to time. + +J. Operate the Franchise in strict conformance with AIRSOPURE's policies, procedures, standards and specifications as may be prescribed by AIRSOPURE from time to time in the Operations Manual or otherwise in writing, including without limitation all changes specified by AIRSOPURE to its system or Products. . + +K. Display AIRSOPURE's Licensed Marks or logos on all marketing materials and at Your AIRSOPURE Center. AIRSOPURE reserves the + + 4 + + + + + +right to alter or change its Licensed Marks, logos or trade dress at any time, and You agree to use such Licensed Marks, logos or trade dress as specified from time to time by AIRSOPURE promptly upon receipt of notice in writing from AIRSOPURE. + +L. Maintain and supply to third Parties upon request information to be supplied by AIRSOPURE regarding the availability of franchises. + +M. Provide AIRSOPURE and its representatives with unlimited access to FRANCHISEE'S offices or its AIRSOPURE Center (personal residence excluded), including Your books, computer system (for sales and products only, unless we are auditing You) and records of the Franchise, during normal business hours for purposes of conducting inspections to fully examine and evaluate Your methods of doing business, including interviews with Your employees and customers. + +N. You acknowledge and agree that such inspections and evaluations are necessary for AIRSOPURE to insure the maintenance of its quality standards, and You agree to fully cooperate with any reasonable request by AIRSOPURE in connection with such inspections and evaluations. + +O. Diligently and immediately take such steps as are deemed reasonably necessary by AIRSOPURE to correct any deficiencies detected by AIRSOPURE in Your adherence to AIRSOPURE's operating policies, procedures, standards and specifications. + +P. In the event You are a corporation, comply with the following: + +1. You will provide in Your Articles of Incorporation that Your sole corporate purpose is the operation of the Franchise. + +2. Every certificate for shares of stock in the corporation will include the following legend printed thereon if sole purpose of the corporation is to own and operate franchised business: + +"THE TRANSFER, PLEDGE OR ASSIGNMENT OF THE SHARES REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO THE TERMS AND RESTRICTIONS CONTAINED IN A FRANCHISE AGREEMENT BETWEEN THE HOLDER OF THESE SHARES AND AIRSOPURE FRANCHISE GROUP, INC." + +3. You agree to comply with the restrictions on transfer of ownership of the corporation set forth in Section 12.02 below. + +4. You will provide AIRSOPURE, prior to the opening of the Franchise, with copies of Your Articles of Incorporation, Bylaws and other governing documents, including all amendments thereto, and a copy of the resolutions by Your Board of Directors authorizing execution of this Agreement, certified by the Secretary of the corporation. + +5. You will provide AIRSOPURE with a current list of shareholders and will update such list from time to time as the list changes. + +6. Each shareholder of the corporation (if sole corporate purpose is the franchise), will execute a personal guarantee of Your performance under this Agreement and all amounts owed by You to AIRSOPURE in the form of attached Exhibit B. + +Q. The Parties recognize the importance of fully developing the market for Products in the Exclusive Territory, and a substantial part of the consideration for and inducement to AIRSOPURE to enter into this Agreement is Your agreement to devote Your best efforts to market, sell and support Products to customers located in Your Exclusive Territory. You agree to concentrate Your marketing efforts to customers located in Your Territory, and You agree not to advertise the Products using media or publications whose primary coverage area is outside Your Exclusive Territory. + + 5 + +R. You may relocate Your Center at Your sole expense, within Your Exclusive Territory, provided You give us written notification at least 30 days prior to relocation stating the reasons for such a move. + +6. PURCHASE AND SALE OF PRODUCTS + +6.01. You will purchase from AIRSOPURE and AIRSOPURE will sell to You for resale or lease at the Center to customers in the Exclusive Territory an opening order of Products having an aggregate cost to You of from $5,000.00 to $10,000.00, by mutual agreement, based on market conditions. Such purchase must be consummated in its entirety before You open Your Center, unless AIRSOPURE agrees in writing to extend such time period. + +6.02. After the opening order contemplated by the preceding Paragraph, You will from time to time place orders for Products with AIRSOPURE on the following basis: + +A. All orders for Products shall be accompanied by payment, unless at AIRSOPURE's sole discretion, other payment terms are permitted. + +B. All orders will be shipped freight collect unless freight is paid in advance by You. + +C. You will pay the prices then prevailing at the time AIRSOPURE receives each order. Such prices are subject to change at any time by AIRSOPURE. + +D. All merchandise will be shipped to You at the Center for resale to customers + + + + + +in the Exclusive Territory. You will sell Products only to end-user customers and not for resale. You will not sell or lease Products at any location other than within Your Exclusive Territory, engage in mail order sales of Products or supply Products to others for resale or lease at any other location. + +E. All orders for Products are subject to availability. In the event any Product is in short supply, AIRSOPURE shall have the right to allocate such Product on an equitable basis. + +F. You will not modify the Products, and You will not offer or carry any products or services other than AIRSOPURE's Products and services specified by AIRSOPURE without written approval from AIRSOPURE. + +G. Notwithstanding nationally advertised prices by AIRSOPURE, You may resell Products purchased under this Agreement at prices set by You. However, AIRSOPURE retains the right, to the extent permitted by law, to refuse to fill Your orders for Products if You fail to honor AIRSOPURE's suggested prices for the same Products sold by other franchise owners in Your region. + +7. LICENSED MARKS + +7.01. AIRSOPURE represents with respect to the Licensed Marks that: + +A. AIRSOPURE is the owner of all right, title and interest in and to the Licensed Marks or has the right and license to use and grant a license to You to use the said Licensed Marks. + +B. AIRSOPURE will take all steps reasonably necessary to preserve and protect the ownership and validity in and to the Licensed Marks. + +7.02. With respect to Your licensed use of the Licensed Marks pursuant to this Agreement, You agree that: + +A. You shall use only the Licensed Marks designated by AIRSOPURE and shall use them only in the manner authorized and permitted by AIRSOPURE. + +B. You shall use the Licensed Marks only for the operation of the Franchise at the Authorized Location. + + 6 + +C. During the term of this Agreement, You shall identify Yourself as the owner of the Franchise in conjunction with any use of the Licensed Marks, including, but not limited to, on invoices, order forms, receipts, business cards, contracts and at such conspicuous locations on the Center's premises or in the field as AIRSOPURE may specify. The identification shall be in a form which specifies Your name, followed by the term "Independent Franchise Owner" or such other identification as shall be approved by AIRSOPURE. + +D. You shall not use the Licensed Marks to incur any obligation or indebtedness on behalf of AIRSOPURE, and You shall not represent that Your Center is owned, operated by or affiliated with AIRSOPURE other than as a franchisee. + +E. You shall not use the Licensed Marks as part of Your corporate or other legal name, without the prior written consent of AIRSOPURE. + +F. You shall file an assumed name registration, and shall execute any documents deemed necessary by AIRSOPURE to obtain protection for the Licensed Marks or to maintain their continued validity and enforceability. + +7.03. You expressly understand and acknowledge that: + +A. As between the Parties hereto, AIRSOPURE, by its trademark License Agreement with Airsopure, Inc. is the licensor of all right, title and interest in and to the Licensed Marks and the goodwill associated with and symbolized by them. + +B. You shall not directly or indirectly contest the validity of the ownership of the Licensed Marks. + +C. Your use of the Licensed Marks pursuant to this Agreement does not give You any ownership interest or other interest in or to the Licensed Marks. + +D. Any and all goodwill arising from Your use of the Licensed Marks in the Franchise under AIRSOPURE's system shall inure solely and exclusively to the benefit of AIRSOPURE, and upon expiration or termination of this Agreement and the Franchise herein granted, no monetary amount shall be assigned as attributable to any goodwill associated with Your use of the Licensed Marks. + +E. The right and license to use the Licensed Marks granted hereunder to You is nonexclusive, and AIRSOPURE may use and grant franchises to others to use the Licensed Marks in any manner except as expressly provided otherwise herein. + +F. AIRSOPURE reserves the right to substitute different Licensed Marks for use in identifying the System and the businesses operating thereunder, and You agree to comply with AIRSOPURE's requirements relating thereto. + +7.04. You shall promptly notify AIRSOPURE of any unauthorized use of the Licensed Marks or marks confusingly similar thereto, any challenge to the validity of the Licensed Marks, or any challenge to AIRSOPURE's ownership of, or Your right to use, the Licensed Marks. You acknowledge that AIRSOPURE has the sole right to direct and control any administrative proceeding or litigation involving the Licensed Marks, including any settlement thereof. AIRSOPURE has the right, but not the obligation, to take action against uses by others that may constitute infringement of the Licensed Marks. + + + + + +7.05. Provided You have used the Licensed Marks in accordance with this Franchise Agreement and AIRSOPURE's Operations Manual, AIRSOPURE will defend You at AIRSOPURE's expense against any third Party claim, suit or demand involving the Licensed Marks and arising out of Your use thereof. In the event that You have not used the Licensed Marks in accordance with this Agreement, AIRSOPURE shall defend You, at Your expense, against such third Party claims, suits or demands. + + 7 + +7.06. In the event of any litigation or administrative proceeding relating to the Licensed Marks, You shall execute any and all documents and do all acts as may, in the opinion of AIRSOPURE, be necessary to carry out such defense or prosecution, including, but not limited to, becoming a nominal Party to any legal action. Except to the extent that such litigation is the result of Your use of the Proprietary Marks in a manner inconsistent with the terms of this Agreement, AIRSOPURE agrees to reimburse You for its out-of-pocket costs in performing such acts, except that You shall bear the salary costs of its employees, and AIRSOPURE shall bear the cost of any judgment or settlement. + +8. OPERATIONS MANUAL + +8.01. AIRSOPURE shall provide You with one copy of AIRSOPURE's Operations Manual covering the proper operating and marketing techniques and the standards and specifications for operation of the Franchise. You agree to fully comply with the Operations Manual in its entirety as an essential aspect of Your obligations under this Agreement. Failure to so comply shall be treated as a breach of this Agreement. + +8.02. You shall at all times treat the Operations Manual, all supplements and revisions thereto, any other operations manual, brochure or memorandum created for or approved for use in the operation of the Franchise and the information contained therein as the confidential and proprietary information of AIRSOPURE, and shall use all reasonable efforts to maintain the confidentiality of such information. You shall not at any time, without AIRSOPURE's prior written consent, copy, duplicate, record, or otherwise reproduce the foregoing materials, in whole or in part, nor otherwise make the same available to any unauthorized person. You may disclose such information and materials only to such of Your employees or agents, or others who must have access to it in connection with their employment or the performance of this Agreement, in which event You shall obtain the agreement of such persons and entities to maintain the confidentiality thereof. The Operations Manual shall remain at all times the sole property of AIRSOPURE. + +8.03. AIRSOPURE may from time to time revise the contents of the Operations Manual, and You expressly agree to comply with each new or changed standard, specification or procedure set forth therein. You shall at all times ensure that Your copy of the Operations Manual is kept current and up to date. In the event of any dispute as to the content of the Operations Manual, the terms of the master copy of the Operations Manual maintained by AIRSOPURE at AIRSOPURE's home office shall be controlling. + +9. ACCOUNTING AND RECORDS + +9.01. During the term of this Agreement, You shall maintain and preserve, for at least five years from the date of their preparation, full, complete, and accurate, books, records and accounts in the form and manner prescribed by AIRSOPURE from time to time in the Operations Manual or otherwise in writing. + +9.02. You shall, at Your expense, submit to AIRSOPURE, by the 7th day of each month, a monthly statement on forms prescribed by AIRSOPURE accurately reflecting gross sales of the Franchise for the preceding calendar month. Each statement shall accompany Your monthly royalty and advertising fund fee payments and shall be signed by You attesting that it is true and correct. + +9.03. You shall, at Your expense, submit to AIRSOPURE an annual financial statement for the Franchise, which includes an income statement prepared in accordance with generally accepted accounting principals, within 90 days of the end of each fiscal year during the term hereof. Each statement shall be signed by You attesting that it is true and correct. + +9.04. You shall submit to AIRSOPURE for review and auditing such other forms, reports, + + 8 + +records, information and data, as AIRSOPURE may reasonably request in writing. + +9.05. AIRSOPURE or its designated agents shall have the right at all reasonable times to examine and copy, at its expense, all books, records, receipts and tax returns of Yours related to the Franchise and, at its option, to have an independent audit made, and thereupon be allowed to search Your computer accounting files. If an inspection or audit should reveal that payments have been understated in any report to AIRSOPURE, then You shall immediately pay to AIRSOPURE the amount understated upon demand, in addition to interest from the date such amount was due until paid, at the prime rate being charged by Bank of America on the date the payment was due plus 2%, or the maximum rate permitted by law, whichever is less. If an inspection discloses an underpayment to AIRSOPURE of 2% or more of the total amount that should have been paid to AIRSOPURE, You shall, in addition to repayment of such understated amount with interest, reimburse AIRSOPURE for any and all costs and expenses incurred in connection with the inspection or audit (including, without limitation, + + + + + +reasonable accounting and attorneys' fees). The foregoing remedies shall be in addition to any other remedies AIRSOPURE may have, including without limitation, the remedies for default. + +10. MARKETING AND ADVERTISING + +10.01. You shall submit to AIRSOPURE for review prior to use samples of all advertising and promotional materials that have not been previously approved by AIRSOPURE. AIRSOPURE shall notify You of its approval or disapproval within 7 days or less from the date of receipt by AIRSOPURE of such materials. Failure by You to obtain the prior approval in writing of AIRSOPURE for all advertising and promotional materials shall be a violation of this Agreement. + +10.02. AIRSOPURE has established an advertising fund (the "Fund") to build recognition of the Products and the Licensed Marks and to promote AIRSOPURE's Products and the Franchise. You shall participate in the Fund, in addition to Your obligation to conduct local advertising of the Franchise, on the basis described in Paragraph 3.01.D above. + +10.03. AIRSOPURE will administer the Fund as follows: + +A. The Fund shall be maintained in a separate bank account. Upon request by You, AIRSOPURE will provide an annual accounting of amounts spent from the Fund, including a reasonable allocation to cover AIRSOPURE's overhead expenses for administration and management of the Fund. + +B. AIRSOPURE may allocate amounts held in the Fund at its discretion as AIRSOPURE deems appropriate. You are not guaranteed that any particular amount or percentage of the Fund will be spent in Your local market. + +C. AIRSOPURE shall have the right to terminate the Fund at any time. However, the Fund will not be terminated until all moneys in the Fund have been expended for the purposes stated in Paragraph 10.02 above. + +D. AIRSOPURE may from time to time amend its policies or establish new policies and procedures for administration of the Fund. + +10.04. In addition to its monthly contribution to the Fund, You shall spend an amount equal to at least 2% of Your total monthly gross sales (as defined in Paragraph 3.01.C above) on local advertising in Your Exclusive Territory. You shall submit to AIRSOPURE a monthly report to accompany Your advertising fund fee and royalty fee payments accounting for and evidencing Your local advertising expenditures. Your local advertising shall comply with the procedures specified in Paragraph 10.01 above. + + 9 + +11. INSURANCE + +11.01. You shall procure and maintain in full force and effect during the term of this Agreement, at Your expense, insurance policies written by an insurance company satisfactory to AIRSOPURE in accordance with standards and specifications set forth in the Operations Manual or otherwise by AIRSOPURE in writing. Such policies shall name AIRSOPURE as an additional insured and shall include, at a minimum: + +A. Comprehensive general liability insurance in the amount of $1,000,000.00. + +B. Comprehensive automobile liability insurance, including collision, comprehensive, medical and liability to satisfy state law requirements. + +C. Additional coverage's and higher policy limits may be required from time to time by AIRSOPURE. + +11.02. At least 7 days prior to the opening of the Center and on each policy renewal date thereafter, You shall submit to AIRSOPURE copies of all policies and policy amendments. The evidence of insurance shall include a statement by the insurer that the policy or policies will not be canceled or materially altered without at least 30 days prior written notice to AIRSOPURE. + +11.03. Your obligation to obtain and maintain the foregoing policy or policies in the amounts specified shall not be limited in any way by reason of any insurance which may be maintained by AIRSOPURE, nor shall Your performance of that obligation relieve You of liability under the indemnity provisions set forth in Section 17 of this Agreement. + +11.04. Should You, for any reason, fail to procure or maintain the insurance required by this Agreement, AIRSOPURE shall have the right and authority (without, however, any obligation to do so) immediately to procure such insurance and to charge same to You, which charges, together with a reasonable fee for AIRSOPURE's expenses in so acting, shall be payable by You immediately upon notice. AIRSOPURE is not a licensed insurance agent or agency. + +12. TRANSFER OF INTEREST + +12.01. Transfer by AIRSOPURE + +A. AIRSOPURE shall have the right to transfer or assign all or any part of its rights or obligations in this Agreement to any person or legal entity. AIRSOPURE may sell or assign any of its assets, including without limitation the Licensed Marks, the system or Products, to any person or legal entity without liability or obligation to You. + +B. Nothing in this Agreement or otherwise shall obligate AIRSOPURE to remain in + + + + + +the indoor air purification business in the event AIRSOPURE should exercise its right to assign this Agreement or its assets which are the subject of this Agreement to a third Party. + +12.02. Transfer by You A. You agree that the rights and duties set forth in this Agreement are personal to You, and that AIRSOPURE has entered into this Agreement and granted the Franchise rights and license hereunder in reliance on Your business skill, financial capacity, and character. Accordingly, You shall not sell, assign, transfer, convey, give away, mortgage or otherwise encumber any direct or indirect interest in the Franchise without the prior written consent of AIRSOPURE. + +B. Any purported assignment or transfer, by operation of law or otherwise, not having the prior written consent of AIRSOPURE shall be null and void and shall constitute a material breach of this Agreement. + +C. AIRSOPURE shall not unreasonably withhold its consent to a transfer of any interest in Your Franchise or in this Agreement if the following conditions have been met: + +1. All of Your accrued monetary and other + + 10 + +obligations to AIRSOPURE and its subsidiaries, affiliates and suppliers shall have been satisfied; + +2. You shall not be in default of any provisions of this Agreement or any other agreement between You and AIRSOPURE or its affiliates or suppliers; + +3. You shall have executed a general release, in a form satisfactory to AIRSOPURE, of any and all claims against AIRSOPURE and its officers, directors, shareholders and employees. + +4. You shall remain liable for all obligations to AIRSOPURE in connection with the Franchise prior to the effective date of the transfer; + +5. The transferee shall enter into a written assignment in a form satisfactory to AIRSOPURE assuming and agreeing to discharge all of Your obligations under this Agreement; + +6. The transferee shall demonstrate to AIRSOPURE's satisfaction that the transferee meets AIRSOPURE's then existing requirements and qualifications for the granting of an AIRSOPURE Franchise; + +7. The transferee shall execute for a term ending on the expiration date of this Agreement the standard form franchise agreement then being offered to new franchisees and such other ancillary agreements and documents as AIRSOPURE may then require for the Franchise, which may include changes in required fee payments or other terms; + +8. The transferee shall agree to upgrade the Franchise to conform to the then current standards and specifications for AIRSOPURE franchises; + +9. Transferee and its employees shall complete such training programs as AIRSOPURE may reasonably require, at the transferee's expense; + +10. You shall pay AIRSOPURE a transfer fee of $1000.00 to cover AIRSOPURE's administrative expenses in connection with the transfer. + +12.03. Right of First Refusal + +In the event You desire to sell the AIRSOPURE Center and Franchise rights and license granted herein, or any part of Your stock interest in a corporation that has been granted such rights, and receives a bona fide acceptable offer in writing, You agree to notify AIRSOPURE in writing of the terms and conditions of such offer. AIRSOPURE shall have the option, within 15 days after receipt of such written notice, to notify You that AIRSOPURE elects to purchase the rights and license granted herein or stock ownership on the same terms and conditions as the bona fide written offer. You agree to sell to AIRSOPURE on the same terms and conditions as the bona fide offer and to comply with all applicable laws relating to bulk transfers of assets. If AIRSOPURE fails to notify You of its election to exercise its right of first refusal granted herein within the thirty day period, then You may sell the franchise rights and license or the stock for the amount of the bona fide offer, subject to AIRSOPURE's rights under Section 12.02 above. Any material change in the terms or conditions of any offer prior to closing shall constitute a new offer subject to AIRSOPURE's right of first refusal described herein. If You fail to consummate the transaction within 30 days from the earlier of: (a) receipt of notice from AIRSOPURE that it elects not to exercise its right of first refusal, or (b) expiration of the 15 day period referred to herein, then You must resubmit the proposed transaction to AIRSOPURE, and AIRSOPURE shall have a new 15 day review period and right of first refusal. + +12.04. Transfer Upon Death or Mental Incapacity Upon Your death or mental incapacity, or a person owning all or controlling interest in Your Franchise, AIRSOPURE shall consent to the transfer of such interest to Your spouse or heirs provided, in AIRSOPURE's sole determination, such person(s) meet AIRSOPURE's then existing requirements and qualifications for the granting of an AIRSOPURE Franchise. If the said transfer + + 11 + + + + + +shall not be approved by AIRSOPURE, Your executor, administrator or personal representative shall transfer Your interest to a third Party approved by AIRSOPURE within 6 months after Your death or the determination of Your mental incapacity. If Your interest is not disposed of within 6 months after such death or mental incapacity, AIRSOPURE may terminate this Agreement. + +12.05. Operation of Franchise by AIRSOPURE In order to prevent any interruption in the business that would cause harm to the Franchise or AIRSOPURE, You authorize AIRSOPURE, at its option but not its obligation, in the event that You are absent or incapacitated by reason of illness, death or otherwise and are not, in AIRSOPURE's sole judgment, able to operate the Franchise for any extended period of time, to operate and manage the Franchise for so long as AIRSOPURE deems necessary, without waiving any of AIRSOPURE's other rights and remedies under this Agreement. All monies from the operation of the Franchise during such period of operation by AIRSOPURE shall be kept in a separate account, and the expenses of AIRSOPURE during such period for operating the Franchise, including reasonable compensation of AIRSOPURE and its employees or representatives, shall be charged to such account. You agree to save harmless and fully indemnify AIRSOPURE and its employees and representatives for and against all claims, losses or actions in connection with the operation and management of the Franchise hereunder. + +12.06. Non-Waiver of Claims AIRSOPURE's consent to a transfer of any interest in the Franchise granted herein shall not constitute a waiver of any claims it may have against You, nor shall it be deemed a waiver of AIRSOPURE's right to demand exact compliance with any of the terms of this Agreement by the transferee. + +13. CONFIDENTIAL INFORMATION + +13.01 You shall not, during the term of this Agreement or thereafter, communicate, divulge, or use for the benefit of any other person or entity any confidential information, knowledge, or know-how concerning AIRSOPURE's system, the Products or the operation of the Franchise, including without limitation the Operations Manual. You shall divulge such confidential information only to such of Your employees or agents as must have access to it in order to operate the Franchise. Any and all information, trade secrets, knowledge, know-how, or other data concerning AIRSOPURE's system, the Products or which AIRSOPURE designates as confidential shall be deemed confidential for purposes of this Agreement, except information which You can demonstrate came to Your attention prior to disclosure thereof by AIRSOPURE, or which, at or after the time of disclosure by AIRSOPURE to You, had become or later becomes a part of the public domain, through publication or communication by others. You agree to use such proprietary information of AIRSOPURE only for operation of the Franchise Business. + +13.02. You acknowledge that the provisions of this Section 13 are and have been a primary inducement to AIRSOPURE to enter into this Agreement, and that any failure to comply with the requirements of Section 13.01 will cause AIRSOPURE irreparable injury without an adequate remedy at law; and You agree to pay all court costs and reasonable attorneys' fees incurred by AIRSOPURE in obtaining specific performance of, or an injunction against any violation of, the requirements of Section 13.01. + +14. DEFAULT AND TERMINATION + +14.01. AIRSOPURE may, at its option, terminate this Agreement and all rights granted hereunder, without affording You any opportunity to cure the defaults, effective immediately upon receipt of notice by You, upon the occurrence of any of the following: + +A. You become insolvent or makes a general assignment for the benefit of creditors; or if a + + 12 + +petition in bankruptcy is filed by You or such a petition is filed against and consented to by You; or if You are adjudicated a bankrupt; or if You are unable to pay commercial debts as they become due. + +B. You (or a principal shareholder if the Franchisee is a corporation) is convicted of a felony or any other crime or offense that is reasonably likely, in the sole opinion of AIRSOPURE, to adversely affect the goodwill or reputation of AIRSOPURE or the Licensed Marks. + +C. A judgment or consent decree is entered against You (or a principal shareholder if the Franchisee is a corporation) in a case involving allegations of fraud, racketeering, unfair or deceptive trade practices or similar allegations which, in AIRSOPURE's judgment, are likely to adversely affect AIRSOPURE, its Products, the Licensed Marks or the goodwill associated therewith. + +D. You or any partner or shareholder in You transfers any rights or obligations under this Agreement or any interest in You or in the Franchise to any third Party without AIRSOPURE's prior written consent. + +E. You intentionally disclose the contents of the Operations Manual or&bbsp;other trade secrets or confidential information provided to You by AIRSOPURE to any unauthorized person or fails to exercise reasonable care to prevent such disclosure. + +F. You maintain false books or records of the Franchise or knowingly make any material false statements or omission to AIRSOPURE in connection with Your + + + + + +application for the franchise granted herein or in connection with any reports submitted to AIRSOPURE, including without limitation the understatement of gross sales by more than 2%. + +G. You fail to commence business within 4 months following the execution of this Agreement. + +H. You (and Your manager) fail to attend any scheduled training program which AIRSOPURE has indicated is mandatory. + +I. You operate the Franchise in such a manner which causes a threat or danger to public health or safety. + +J. You receive 3 or more notices of default of this Agreement from AIRSOPURE for violations under Section 14.02 hereof. + +14.02. Except for violations of this Agreement listed in Section 13.01 above, or violations specifically provided for elsewhere in this Agreement, You shall have 30 days from receipt from AIRSOPURE of a written Notice of Termination (citing the reason(s) therefor) within which to remedy any default listed in this Section 13.02, or any other violation of this Agreement. + +A. You fail to pay promptly any monies owing to AIRSOPURE or its subsidiaries or affiliates when due, or to submit the financial information or reports required by AIRSOPURE under this Agreement. + +B. You fail to meet or comply with any standards, specifications or procedures prescribed by AIRSOPURE in this Agreement, the Operations Manual or otherwise specified in writing from time to time by AIRSOPURE. + +C. You are convicted, plead guilty or enter into a consent agreement for violation of any federal, state or local law, ordinance, rule or regulation that is reasonably likely, in the sole opinion of AIRSOPURE, to materially and unfavorably affect the Franchise or AIRSOPURE, the Licensed Marks or the goodwill associated therewith. + +D. You misuse or make any unauthorized use of the Proprietary Marks or otherwise impairs the + + 13 + +goodwill associated therewith or AIRSOPURE's rights therein. + +E. You abandon the Franchise or fail to operate the Center during normal business hours without the consent in writing of AIRSOPURE. + +F. You fail to submit advertising or promotional materials to AIRSOPURE for approval in writing prior to use. + +14.03. No right or remedy of AIRSOPURE conferred herein shall be exclusive of any other right or remedy provided herein, at law or in equity, unless specifically provided otherwise in this Agreement or any amendment hereto. + +14.04. In the event this Agreement is terminated by AIRSOPURE for violation of this Agreement by You, AIRSOPURE shall have the right, at its option, to purchase Your interest in the tangible assets of the Franchise at their fair market value. + +15. OBLIGATIONS UPON TERMINATION + +15.01. Upon termination or expiration of this Agreement, this Agreement and all rights granted hereunder to You shall immediately terminate, and: + +A. You shall immediately cease to operate the Franchise and shall not thereafter, directly or indirectly, represent to the public or hold itself out as a present or former franchisee of AIRSOPURE. + +B. You shall immediately and permanently cease to use, by advertising or in any other manner whatsoever, the Licensed Marks of AIRSOPURE, any other identifying characteristics or trade dress of the system, and all confidential methods, procedures and techniques associated with the Franchise. + +C. You shall take such action as may be necessary to cancel any assumed name or equivalent registrations or listings in telephone or other directories which contain the names or Licensed Marks of AIRSOPURE, and You shall furnish AIRSOPURE with evidence satisfactory to AIRSOPURE of compliance with this obligation within 30 days after termination or expiration of this Agreement. + +D. You shall promptly pay all sums owing to AIRSOPURE and its subsidiaries and affiliates, including all damages, costs and expenses, including reasonable attorneys' fees, incurred by AIRSOPURE as a result of the default. + +E. You shall pay to AIRSOPURE all damages, costs and expenses, including reasonable attorneys' fees, incurred by AIRSOPURE subsequent to the termination or expiration of the Franchise herein granted in obtaining injunctive or other relief for the enforcement of any provisions of this Agreement. + +F. You shall immediately turn over to AIRSOPURE the Operations Manual, records, files, instructions, software, correspondence, and all other materials provided by AIRSOPURE related to the operation of the Franchise, and all copies thereof (all of which are acknowledged to be AIRSOPURE's property), and shall retain no copy or record of any of the foregoing, except only Your copy of this Agreement and any correspondence between the Parties, and any other documents which You reasonably need for compliance with any applicable provision of law. + + + + + +G. AIRSOPURE shall have the right, but not the duty, to be exercised by notice of intent to do so within 30 days after termination or expiration, to purchase any or all signs, advertising materials, supplies and inventory and any other items bearing AIRSOPURE's Licensed Marks, at Your cost or at fair market value, whichever is less. If the Parties cannot agree on the fair market value of such items, the Parties will select and share the expense of an independent appraiser to determine fair market value. With respect to any purchase by AIRSOPURE as provided herein, AIRSOPURE shall have the right to set off against the purchase price all amounts due from + + 14 + +You under this Agreement. + +16. COVENANTS + +16.01. You covenant and agree (or if Your Franchise is a corporation Your controlling shareholder agrees) to supervise and devote Your best efforts to manage and operate the Franchise. + +16.02. You acknowledge that, pursuant to this Agreement, You will receive valuable specialized training and confidential and proprietary information of AIRSOPURE, including, without limitation, information regarding the operational, sales, promotional, and marketing methods and techniques of AIRSOPURE and its system. You covenant and agree that during the term of this Agreement, and subject to the post-termination provisions contained herein, You shall not, except as otherwise approved in writing by AIRSOPURE, either directly or indirectly: + +A. Divert or attempt to divert any business or customer of the Franchise to any competitor, or competing business, by direct or indirect inducement or otherwise, or do or perform, directly or indirectly, any other act injurious or prejudicial to AIRSOPURE or the goodwill associated with the Licensed Marks and Products. + +B. Employ or seek to employ any person who is at that time employed by AIRSOPURE or by another AIRSOPURE franchisee or induce such person to leave his or her employment. + +C. Own, maintain, engage in, be employed by, advise, consult, assist, invest in or have any interest whatsoever in any business or entity which competes with or offers products or services which are the same or similar to those of AIRSOPURE or the Franchise. + +16.03. You covenant and agree that You (or any shareholder if Your Franchise is a corporation) shall not, for a period of two years following termination of this Agreement for any reason, either directly or indirectly own, maintain, engage in, be employed by, advise, consult, assist, invest in or have any interest whatsoever in any business or entity which competes with or offers products or services which are the same or similar to those of AIRSOPURE or the Franchise within a radius of 25 miles of Your Exclusive Territory. In the event a court of competent jurisdiction should hold this covenant to be unreasonable or overly broad, the Parties agree to reduce the scope of such covenant to the maximum restriction permitted by law, and You agree to be bound by such less restrictive terms of this covenant. If requested by AIRSOPURE, You agree to obtain and provide to AIRSOPURE executed covenants containing terms equivalent to those contained herein from any employee of Yours who has received training from AIRSOPURE, and, if Your Franchise is a corporation, from any director or shareholder of Your corporation. + +16.04. AIRSOPURE covenants and agrees that the restrictions set forth above in Paragraphs 16.02.C and 16.03 shall not apply to ownership by You of less than a 5% beneficial interest in the outstanding equity securities of any publicly traded corporation, provided that You are not an employee, consultant or director of such corporation. + +16.05. You covenant and agree that its violation of any covenant contained herein would result in serious, immediate and irreparable injury to AIRSOPURE for which no adequate remedy at law will be available, and You consent, in addition to other remedies which may be available to AIRSOPURE, to the entry without opposition of an injunction prohibiting any conduct by You in violation of any covenant set forth herein. + +17. INDEMNIFICATION + +17.01. You agree to defend, indemnify and hold AIRSOPURE and its affiliates, directors, officers, employees and agents harmless from all claims, losses, lawsuits and expenses arising from or relating to the Franchise and Your operation thereof, except for: (i) any claims of infringement + + 15 + +from third Parties due to Your use of the Licensed Marks, provided that You have used the said Licensed Marks as authorized by AIRSOPURE; and (ii) claims alleging that Products sold or leased by You are defective. + +17.02. AIRSOPURE agrees to defend, indemnify and hold You harmless from all claims, losses, lawsuits and expenses arising from or relating to: (i) any claims of infringement from third Parties due to Your use of the Licensed Marks, provided that You have used the Licensed Marks as authorized by AIRSOPURE; and (ii) claims alleging that Products sold or leased by You are defective. + + + + + +18. GENERAL PROVISIONS + +18.01. No failure of a Party to exercise any power reserved to it by this Agreement or to insist upon strict compliance by the other Party with any obligation or condition hereunder shall constitute a waiver of such Party's rights unless such waiver is in writing. Any waiver by either Party shall not constitute a waiver thereafter to demand exact compliance with any of the terms herein. Waiver by a Party of any particular default by the other Party shall not affect or impair such Party's rights with respect to any subsequent default of the same, similar or different nature; nor shall any delay, forbearance or omission of a Party to exercise any power or right arising out of any breach or default by the other Party of any of the terms, provisions, or covenants thereof, affect or impair such Party's right to exercise the same. + +18.02. Unforeseen Events + +Delays in the performance of any duties hereunder which are not the fault of and are beyond the ability of the Party to control, including without limitation fires, floods, natural disasters, acts of God, labor disputes, riots or other similar events, shall not constitute a default in the Party's performance of this Agreement, and the Parties agree to extend the time of performance for a reasonable period of time to allow for such delays. + +18.03. The relationship between the Parties is that of independent contractors. No partnership, joint venture, employment or relationship of principal and agent is intended, and You may not commit or bind AIRSOPURE to any obligation whatsoever. + +18.04. Any and all notices required or permitted under this Agreement shall be in writing and shall be delivered by any means which will provide evidence of the date received, to the respective Parties at the following addresses unless and until a different address has been designated by written notice to the other Party: + +Notices to AIRSOPURE: Airsopure International Group, Inc. 15400 Knoll Trail, Suite 200 Dallas, Texas 75248 Attn: John Potter, President + +Notices to You: + +- -------------------------------- + +- -------------------------------- + +- -------------------------------- + +Any notice shall be deemed to have been given at the date and time it is received. + +18.05. This Agreement and the documents referred to herein constitute the entire Agreement between AIRSOPURE and You concerning the subject matter hereof, and supersede all prior agreements, oral or written. No amendment, change or variance from this Agreement shall be binding on either Party unless executed by both Parties in writing. + +18.06. Except as expressly provided to the contrary herein, each provision of this Agreement shall be considered severable; and if, for any reason, any provision herein is determined to be invalid under any law or by a court having valid jurisdiction, such shall not impair the operation of, or have any other effect upon, such other + + 16 + +provisions of this Agreement, and the latter shall continue to be given full force and effect and bind the Parties hereto, and the invalid provision shall be deemed not to be a part of this Agreement. + +18.07. This Agreement takes effect upon its acceptance and execution by AIRSOPURE in the State of Texas, and shall be interpreted and construed under the laws of the State of Texas. + +18.08. The Parties agree that any action brought by either Party against the other in any court, whether federal or state, shall be brought within the State of Texas in the judicial district in which AIRSOPURE has its principal place of business and do hereby waive all questions of personal jurisdiction or venue for the purpose of carrying out this provision. + +18.09. If either Party is required to resort to legal process to enforce any provision of this Agreement, the prevailing Party will recover all costs, including reasonable attorneys fees, incurred in such legal proceeding. + +18.10. You represent to AIRSOPURE that You have conducted an independent investigation of the business franchised hereunder and recognizes that the business venture contemplated by this Agreement involves business risks, and that its success will be largely dependent upon Your ability as an independent business person. AIRSOPURE expressly disclaims the making of, and You acknowledge that You have not received, any representation or guarantee, express or implied, as to the potential volume, profits or success of the business venture contemplated by this Agreement. + +18.11. You acknowledge that You received a completed copy of this Agreement, the attachments hereto, if any, and agreements relating thereto, if any, at least 5 + + + + + +business days prior to the date on which this Agreement was executed. You further acknowledge that You have received the Offering Circular, as required by the Federal Trade Commission, at least 10 business days prior to the date on which this Agreement was executed. + +18.12. This Agreement contains various headings, but it is agreed that such headings are for convenience only and shall not affect the meaning of the provisions of this Agreement. + +18.13. You acknowledge that You have read and understood this Agreement, the attachments hereto, if any, and agreements relating thereto, if any, and that AIRSOPURE has accorded You ample time and opportunity to consult with advisors of Your own choosing about the potential benefits and risks of entering into this Agreement. + +19. APPLICABLE LAW AND MEDIATION + +A. THE PARTIES AGREE TO SUBMIT ANY CLAIM, CONTROVERSY OR DISPUTE ARISING OUT OF OR RELATING TO THIS AGREEMENT (AND ATTACHMENTS) OR THE RELATIONSHIP CREATED BY THIS AGREEMENT TO NON-BINDING MEDIATION PRIOR TO BRINGING SUCH CLAIM, CONTROVERSY OR DISPUTE IN A COURT. THE MEDIATION SHALL BE CONDUCTED THROUGH EITHER AN INDIVIDUAL MEDIATOR OR A MEDIATOR APPOINTED BY A MEDIATION SERVICES ORGANIZATION OR BODY, EXPERIENCED IN THE MEDIATION OF DISPUTES IN THE AIR PURIFICATION SERVICE BUSINESS, AGREED UPON BY THE PARTIES AND, FAILING SUCH AGREEMENT WITHIN A REASONABLE PERIOD OF TIME AFTER EACH PARTY HAS NOTIFIED THE OTHER OF ITS DESIRE TO SEEK MEDIATION OF ANY CLAIM CONTROVERSY OR DISPUTE (NOT TO EXCEED 15 DAYS), THROUGH THE AMERICAN ARBITRATION ASSOCIATION IN ACCORDANCE THE RULES GOVERNING MEDIATION, AT AIRSOPURE CORPORATE HEADQUARTERS IN DALLAS, TEXAS. THE COSTS AND EXPENSES OF MEDIATION, INCLUDING COMPENSATION AND EXPENSES OF THE MEDIATOR, SHALL BE BORNE BY THE PARTIES EQUALLY. IF THE PARTIES ARE UNABLE TO RESOLVE THE CLAIM, CONTROVERSY OR DISPUTE 90 DAYS + + 17 + +AFTER THE MEDIATOR HAS BEEN APPOINTED, THEN EITHER PARTY MAY SUBMIT SUCH CLAIM, CONTROVERSY OR DISPUTE TO A COURT IN ACCORDANCE WITH SECTION 19.B. BELOW NOTWITHSTANDING THE FOREGOING, EITHER PARTY MAY BRING AN ACTION (1) FOR MONEYS OWED, (2) FOR INJUNCTIVE RELIEF, OR (3) INVOLVING THE POSSESSION OR DISPOSITION OF, OR OTHER RELIEF RELATING TO, REAL PROPERTY IN A COURT HAVING JURISDICTION AND IN ACCORDANCE WITH SECTION 19.B. BELOW, WITHOUT SUBMITTING SUCH ACTION TO MEDIATION. + +B. WITH RESPECT TO ANY CLAIMS, CONTROVERSIES OR DISPUTES WHICH ARE NOT FINALLY RESOLVED THROUGH MEDIATION, YOU HEREBY IRREVOCABLY SUBMIT YOURSELF TO THE NONEXCLUSIVE JURISDICTION OF THE STATE COURTS OF DALLAS COUNTY, TEXAS AND THE FEDERAL DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS, DALLAS DIVISION. YOU HEREBY IRREVOCABLY AGREE THAT SERVICE OF PROCESS MAY BE MADE UPON YOU IN ANY EACH PROCEEDING RELATING TO OR ARISING OUT OF THIS AGREEMENT OR THE RELATIONSHIP CREATED BY THIS AGREEMENT BY ANY MEANS ALLOWED BY TEXAS OR FEDERAL LAW. VENUE FOR ANY SUCH LEGAL PROCEEDING SHALL BE DALLAS COUNTY, TEXAS; PROVIDED, HOWEVER WITH RESPECT TO ANY ACTION (1) FOR MONEYS OWED, (2) FOR INJUNCTIVE OR OTHER EXTRAORDINARY RELIEF OR (3) INVOLVING POSSESSION OR DISPOSITION OF; OR OFFER RELIEF RELATING TO, REAL PROPERTY, AIRSOPURE MAY BRING SUCH ACTION IN ANY STATE OR FEDERAL DISTRICT COURT WHICH HAS JURISDICTION. YOU HEREBY WAIVE ALL QUESTIONS OF PERSONAL JURISDICTION FOR TITLE PURPOSE OF CARRYING OUT THIS PROVISION. WITH RESPECT TO ALL CLAIMS, CONTROVERSIES, DISPUTES OR ACTIONS, THIS AGREEMENT SHALL BE INTERPRETED AND CONSTRUED UNDER TEXAS LAW (EXCEPT FOR TEXAS CHOICE OF LAW RULES). + +C. YOU AND AIRSOPURE ACKNOWLEDGE THAT THE PARTIES' AGREEMENT REGARDING APPLICABLE STATE LAW AND FORUM SET FORTH IN SECTION 19.B. ABOVE PROVIDE EACH OF THE PARTIES WITH THE MUTUAL BENEFIT OF UNIFORM INTERPRETATION OF THIS AGREEMENT AND ANY DISPUTE ARISING OUT OF THIS AGREEMENT OR THE PARTIES' RELATIONSHIP CREATED BY THIS AGREEMENT, EACH OF YOU AND AIRSOPURE FURTHER ACKNOWLEDGE THE RECEIPT AND SUFFICIENCY OF MUTUAL CONSIDERATION FOR SUCH BENEFIT. + +D. YOU AND AIRSOPURE ACKNOWLEDGE THAT THE EXECUTION OF THIS AGREEMENT OCCURRED IN DALLAS, TEXAS AND FURTHER ACKNOWLEDGE THAT THE PERFORMANCE OF CERTAIN OBLIGATIONS OF YOU ARISING UNDER THIS AGREEMENT SHALL OCCUR IN DALLAS, TEXAS. + +IN WITNESS WHEREOF, the Parties hereto have duly executed, sealed, and delivered this Agreement on the day and year first above written. + +AIRSOPURE: + +By: --------------------------------- + +Title: ------------------------------ + +YOU: + +By: --------------------------------- + +Title: ------------------------------ + + 18 + + EXHIBIT F + + + + + + PERSONAL GUARANTEE + +For value received, and in consideration of the execution by Airsopure International Group, Inc. ("Airsopure") of a Franchise Agreement with + +- ---------------------------------------- ("Franchisee"), The undersigned + +- ---------------------------------------- ("Guarantor") hereby unconditionally guarantees to Airsopure all indebtedness, obligations and liabilities, direct or indirect, matured or immatured, primary or secondary, certain or contingent, of Franchisee to Airsopure, now or hereafter owing or incurred. This Guarantee is an absolute, unconditional, unlimited and continuing guarantee of the full and punctual payment by Franchisee of the foregoing indebtedness, obligations and liabilities and not of their collectibility only. Upon any default by Franchisee in such full and punctual payment, the liabilities and obligations of the Guarantor hereunder shall, at Airsopure's option, become forthwith due and payable without demand or notice of any nature, all of which are expressly waived by the Guarantor. + +Airsopure may deal with Franchisee in such manner as Airsopure in its sole discretion deems fit, and Guarantor gives to Airsopure full authority, in its sole discretion, to do any or all of the following things: a) extend credit, make loans and afford other financial accommodations to Franchisee at such times, in such amounts and on such terms as Airsopure may approve; b) vary the terms and grant extensions or renewals of any present or future indebtedness of Franchisee to Airsopure; c) grant time, waivers and other indulgences in respect thereto; d) vary, exchange, release or discharge, wholly or partially, or delay in or abstain from perfecting and enforcing any security or guaranty or other means of obtaining payment; e) accept partial payments from Franchisee; f) release or discharge, wholly or partially, any endorser or guarantor; g) compromise or make any settlement or other arrangement with Franchisee. + +Guarantor waives notice of acceptance hereof or of any action taken or omitted by Airsopure in reliance hereon and any requirement that Airsopure be diligent or prompt in making demands hereunder, giving notice of any default by Franchisee or asserting any other right hereunder. + +No provision of this Guaranty can be changed, waived, discharged or terminated except by an instrument in writing signed by Airsopure and Guarantor, and no such waiver shall extend to, affect or impair any other right of Airsopure hereunder. + +This Unlimited Guarantee shall inure to the benefit of Airsopure and its successors and assigns, and shall be binding on the Guarantor and the Guarantor's successors, heirs and assigns. + +EXECUTED on this ____ day of ____________, 2000. + +- ---------------------------------------- GUARANTOR + +- ---------------------------------------- WITNESS + + EXHIBIT G + + CONFIDENTIALITY AGREEMENT + +This Confidentiality and Noncompetition Agreement (the "Agreement") is made and entered into effective the _____day of ________________, 2000 by and between Airsopure International Group, Inc., a Nevada corporation, located at 15400 Knoll Trail, Suite 200, Dallas, Texas 75248 (the "Company") and + +- ----------------------------------------------- who resides at + +- ----------------------------------------------- + +- ----------------------------------------------- + +- ----------------------------------------------- + +- ----------------------------------------------- (the "Associate"). + + RECITALS + +A. Company sells franchises for the operation of air purification system business which operate under the name and service mark "Airsopure" (the "Franchises"); + +B. Company has developed a business method for operating Franchises utilizing certain Information, plans, methods, data, processes, marketing systems, techniques, operating procedures, trademarks, designs, information and know how of Company (the "Confidential Information"), and such Confidential Information may be further developed from time to time by Company: + +C. Company has established substantial goodwill and an excellent reputation with respect to the quality of services available, which goodwill and reputation have been and will continue to be of Major benefit to Company; + + + + + +D. Associate is or will become involved with Company, or a franchise of Company, in the capacity of an officer, partner, director or as beneficial owner of an Airsopure Franchise or an employee of a Franchise, and will become privileged to certain Confidential Information; and + +E. Associate and Company have reached an understanding with regard to nondisclosure by Associate of Confidential Information and Noncompetition by Associate with Company + +NOW THEREFORE, in consideration of the foregoing, the mutual promises contained herein and other good and valuable consideration, the receipt and sufficiency of which hereby are acknowledged, Associate and Company, intending legally to be bound, hereby agree as follows: + +1. CONFIDENTIAL INFORMATION. Associate and Company acknowledge that the business plan and methods used in connection with the operation of the Franchise which utilize Company's Confidential Information, are confidential, unique, constitute the exclusive property of Company and are trade secrets of Company. Associate acknowledges that any disclosure of the Confidential Information would be wrong and would cause irreparable injury and harm to Company. Associate further acknowledges that Company has expended a great amount of effort and money in obtaining and developing the Confidential Information, the Company has taken numerous precautions to guard the secrecy of the Confidential Information and that it would be very costly for competitors to acquire or duplicate the Confidential Information. + +2. OPERATIONS MANUAL AS TRADE SECRET It is understood that Confidential Information, constituting "trade secret", as used in this Agreement is deemed to include, without initiation, any and all information contained in the Franchise Operations Manual, which may be provided AS one or more separate manuals, or written instructional guides, as the same are changed or supplemented from time to time, and any information of whatever nature which gives to Company an opportunity to obtain an advantage over its competitors who do not have access to, know or use such lists, written materials or information. + +3. CONFIDENTIAL INFORMATION. Associate shall not at any time, publish, disclose, divulge or in any manner communicate to any person, firm' corporation, association. partnership or any other entity whatsoever or use, directly or indirectly, for its own benefit or for the benefit of any Person, firm, corporation or other entity, other than the use of Company, any of the Confidential Information of Company or its Affiliates. + +4. NO INTERFERENCE WITH BUSINESS. During the term of this Agreement, neither Associate nor any member of his or her immediate finally shall divert or attempt to divert: I) any business related to, or any customer or prospective customer of; the Franchise by direct inducement or otherwise, or 2) the employment of Company or another franchisee licensed by Company, + + 1 + +to any Competitive Business by any direct inducement or otherwise. + +5. REMEDIES. Associate hereby acknowledges and agrees that in the event of any violations of this Agreement, Company shall be authorized and entitled, without posting a bond to obtain from any court of competent jurisdiction, preliminary and permanent injunctive relief as well as an equitable accounting of all profits or benefits arising out of any such violation, which rights and remedies shall be cumulative and in addition to any rights or remedies to which Company may be entitled. + +6. EFFECT OF WAVIER. The waiver by Associate or company of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach thereof + +7. BINDING EFFECT. This Agreement shall be binding upon and inure to the benefit of Associate and Company and their respective heirs, executors, representatives successors and assigns. + +8. ENTIRE AGREEMENT. This instrument contains the entire agreement of Associate and Company relating to the matters set forth here It may not be changed orally, but only by an agreement in writing, signed by the party against whom enforcement of any waiver, change modification, extension or discharge is sought. + +9. GOVERNING LAW. This instrument shall be governed by and construed under the laws of the State of Texas. + +10. JURISDICTION AND VENUE. In the event of a breach or threatened breach by Associate of this Agreement, Associate hereby irrevocably submits to the jurisdiction of the State District Court in Dallas County, Texas and the Federal District Court for the Northern District of Texas, and irrevocably agrees that venue for any action or proceeding shall be in Dallas County, Texas. Notwithstanding the foregoing, in the event that the laws of the state where, Associate resides require that the jurisdiction or venue be elsewhere, then such other states laws shall control. but only to the extent that such other state's laws so require. + +11. SEVERABILITV. Should anyone or more of the provisions hereof be determined to be illegal or unenforceable, all other provisions hereof shall be given separately therefrom and shall not be affected thereby. + +12. COST OF ENFORCEMENT. In any action at law or in equity to enforce any of the provisions or rights under this Agreement, the unsuccessful party in such + + + + + +litigation as determined by the court in a final judgment or decree, shall pay the successful party or parties all costs, expenses and reasonable attorney's fees incurred therein by such arty or parties (including without Initiation such as costs, expenses and fees on any appeals), plus, if applicable, interest at the highest rate allowable by law, accruing from the date of the breach of this Agreement. If such successful party shall recover judgement in any such action or proceeding, such costs, expenses. attorney's fees and interest shall be included as part of such judgment. + +IN WITNESS WHEREOF, the parties hereto have signed this Agreement on the date first above written. + +FOR AIRSOPURE (COMPANY): + +- -------------------------------------------- + +FOR FRANCHISEE OF AIRSOPURE: + +- -------------------------------------------- + +ASSOCIATE OF FRANCHISEE: + +- -------------------------------------------- + +ASSOCIATE'S WORK CAPACITY: + +- -------------------------------------------- + + 2 \ No newline at end of file diff --git a/full_contract_txt/ALAMOGORDOFINANCIALCORP_12_16_1999-EX-1-AGENCY AGREEMENT.txt b/full_contract_txt/ALAMOGORDOFINANCIALCORP_12_16_1999-EX-1-AGENCY AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..2d4429b49c3de4ec1d874b61a4ad6b129c7a9397 --- /dev/null +++ b/full_contract_txt/ALAMOGORDOFINANCIALCORP_12_16_1999-EX-1-AGENCY AGREEMENT.txt @@ -0,0 +1,587 @@ +ALAMOGORDO FINANCIAL CORPORATION 1,101,643 Shares + + COMMON STOCK (Par Value $.0l Per Share) + + Subscription Price $10.00 Per Share + + AGENCY AGREEMENT + + ___________ __, 2000 + +Charles Webb & Company, a Division of Keefe, Bruyette & Woods, Inc. 211 Bradenton Avenue Dublin, Ohio 43017 + +Ladies and Gentlemen: + + Alamogordo Financial Corporation, a federal corporation (the "Company"), AF Mutual Holding Company (the "MHC") and Alamogordo Federal Savings and Loan Association, a federally chartered stock savings and loan association (the "Bank") with its deposit accounts insured by the Savings Association Insurance Fund ("SAIF") administered by the Federal Deposit Insurance Corporation ("FDIC"), hereby confirm, jointly and severally, their agreement with Charles Webb & Company, a Division of Keefe, Bruyette & Woods, Inc. (the "Agent"), as follows: + + Section 1. The Offering. In accordance with the Stock Issuance Plan adopted by its Board of Directors (the "Plan"), the Company will offer and sell up to 1,101,643 shares of its common stock, par value, $.01 per share (the "Shares" or "Common Stock"), in a subscription offering (the "Subscription Offering") to (1) depositors of the Bank with account balances of $50.00 or more as of September 30, 1998 ("Eligible Account Holders"), (2) the Employee Stock Ownership Plan of the Bank (the "ESOP"), (3) depositors of the Bank with account balances of $50.00 or more as of December 31, 1999 ("Supplemental Eligible Account Holders"), and (4) employees, officers and directors of the Bank. To the extent Shares remain unsold in the Subscription Offering, the Company is offering for sale in a community offering (the "Community Offering" and when referred to together with the Subscription Offering, the "Subscription and Community Offering") the Shares not so subscribed for or ordered in the Subscription Offering to members of the general public, with preference given to natural persons residing in the New Mexico counties of Otero and Lincoln + +("Other Subscribers"), (all such offerees being referred to in the aggregate as "Eligible Offerees"). It is anticipated that shares not subscribed for in the Subscription and Community Offering will be offered to certain members of the general public on a best efforts basis through a selected dealers arrangement (the "Syndicated Community Offering") (the Subscription Offering, Community Offering and Syndicated Community Offering are collectively referred to as the "Offering"). It is acknowledged that the purchase of Shares in the Offering is subject to the maximum and minimum purchase limitations as described in the Plan and that the Company and the Bank may reject, in whole or in part, any orders received in the Community Offering or Syndicated Community Offering. The Company will issue the Shares at a purchase price of $10.00 per share (the "Purchase Price"). + + The Company has filed with the Securities and Exchange Commission (the "Commission") a registration statement on Form S-1 (File No. 333- ) (the "Registration Statement") containing a prospectus relating to the Offering for the registration of the Shares under the Securities Act of 1933 (the "1933 Act"), and has filed such amendments thereof and such amended prospectuses as may have been required to the date hereof. The term "Registration Statement" shall include all exhibits thereto, as amended, including post-effective amendments. The prospectus, as amended, on file with the Commission at the time the Registration Statement initially became effective is hereinafter called the "Prospectus," except that if any Prospectus is filed by the Company pursuant to Rule 424(b) or (c) of the rules and regulations of the Commission under the 1933 Act (the "1933 Act Regulations") differing from the prospectus on file at the time the Registration Statement initially becomes effective, the term "Prospectus" shall refer to the prospectus filed pursuant to Rule 424(b) or (c) from and after the time said prospectus is filed with the Commission. + + In accordance with Title 12, Parts 575 and 563b of the Code of Federal Regulations (the "MHC Regulations"), the Company has filed with the Office of Thrift Supervision (the "OTS") an Application on Form MHC-2 with respect to the stock issuance (the "MHC Application"), including the Prospectus and the Valuation Appraisal Report prepared by RP Financial, LC (the "Appraisal") and has filed such amendments thereto as may have been required by the OTS. The MHC Application has been approved by the OTS and the related Prospectus has been authorized for use by the OTS. + + + + + + Section 2. Retention of Agent; Compensation; Sale and Delivery of the Shares. Subject to the terms and conditions herein set forth, the Company and the Bank have retained the Agent to consult with and to advise the Bank, the MHC and the Company, and to assist the Company, on a best efforts basis, in the distribution of the shares of Common Stock in the Offering. The services that the Agent will provide include, but are not limited to (i) training the employees of the Bank who will perform certain ministerial functions in the Subscription and Community Offering regarding the mechanics and regulatory requirements of the stock offering process, (ii) managing the Stock Information Center by assisting interested stock subscribers and by keeping records of all stock orders and (iii) preparing marketing materials. + + 2 + + On the basis of the representations, warranties, and agreements herein contained, but subject to the terms and conditions herein set forth, the Agent accepts such appointment and agrees to consult with and advise the Company, the MHC and the Bank as to the matters set forth in the letter agreement ("Letter Agreement"), dated November 29, 1999 between the Company and the Agent (a copy of which is attached hereto as Exhibit A). It is acknowledged by the Company, the MHC and the Bank that the Agent shall not be required to take or purchase any Shares or be obligated to take any action which is inconsistent with all applicable laws, regulations, decisions or orders. + + The obligations of the Agent pursuant to this Agreement (other than those set forth in Sections 2(d), 8 and 9 hereof) shall terminate upon the completion or termination or abandonment of the Plan by the Company or upon termination of the Offering, but in no event later than the date (the "End Date") which is 45 days after the Closing Date (as hereinafter defined). All fees or expenses due to the Agent but unpaid will be payable to the Agent in next day funds at the earlier of the Closing Date (as hereinafter defined) or the End Date. In the event the Offering is extended beyond the End Date, the Company, the MHC, the Bank and the Agent may agree to renew this Agreement under mutually acceptable terms. + + In the event the Company is unable to sell a minimum of 708,050 Shares within the period herein provided, this Agreement shall terminate and the Company shall refund to any persons who have subscribed for any of the Shares, the full amount which it may have received from them plus accrued interest as set forth in the Prospectus; and none of the parties to this Agreement shall have any obligation to the other parties hereunder, except as set forth in this Section 2 and in Sections 6, 8 and 9 hereof. + + In the event the Offering is terminated, the Agent shall be reimbursed for its actual accountable out-of-pocket expenses. + + If all conditions precedent to the consummation of the Offering, including, without limitation, the sale of all Shares required by the Plan to be sold, are satisfied, the Company agrees to issue, or have issued, the Shares sold in the Offering and to release for delivery certificates for such Shares on the Closing Date (as hereinafter defined) against payment to the Company by any means authorized by the Plan; provided, however, that no funds shall be released to the Company until the conditions specified in Section 7 hereof shall have been complied with to the reasonable satisfaction of the Agent and their counsel. The release of Shares against payment therefor shall be made on a date and at a place acceptable to the Company, the MHC, the Bank and the Agent. Certificates for shares shall be delivered directly to the purchasers in accordance with their directions. The date upon which the Company shall release or deliver the Shares sold in the Offering, in accordance with the terms herein, is called the "Closing Date." + + The Agent shall receive the following compensation for its services hereunder: + + 3 + + (a) A management fee of $25,000, payable in four installments of $6,250 on November 29 and December 29, 1999 and January 29 and February 29, 2000. Should the Offering be terminated for any reason not attributable to the action or inaction of the Agent, the Agent shall have earned and be entitled to be paid fees accruing through the stage at which the termination occurred. + + (b) A Success Fee of $75,000. + + (c) If any of the shares remain available after the Subscription and Community Offerings, at the request of the Bank, the Agent will seek to form a syndicate of registered broker-dealers to assist in the sale of such Common Stock on a best efforts basis, subject to the terms and conditions set forth in the selected dealers agreement. the Agent will endeavor to distribute the Common Stock among dealers in a fashion which best meets the distribution objectives of the Bank and the Plan. the Agent will be paid a fee not to exceed 5.5% of the aggregate Purchase Price of the Shares sold by them. the Agent will pass onto selected broker-dealers, + + + + + + who assist in the syndicated community, an amount competitive with gross underwriting discounts changed at such time for comparable amounts of stock sold at a comparable price per share in a similar market environment. Fees with respect to purchases affected with the assistance of a broker/dealer other than the Agent shall be transmitted by the Agent to such broker/dealer. The decision to utilize selected broker-dealers will be made by the Bank upon consultation with the Agent. In the event, with respect to any purchases of Shares, fees are paid pursuant to this subparagraph 2(c), such fees shall be in lieu of, and not in addition to, payment pursuant to subparagraph 2(a) and 2(b). + + (d) The Company will bear those expenses of the proposed offering customarily borne by issuers, including, without limitation, regulatory filing fees, "Blue Sky," and NASD filing and registration fees; the fees of the Company's accountants, attorneys, appraiser, transfer agent and registrar, printing, mailing and marketing and syndicate expenses associated with the Offering; the fees set forth in Section 2; and fees for "Blue Sky" legal work. If the Agent incurs expenses on behalf of the Company, the Company will reimburse the Agent for such expenses. + + The Agent shall be reimbursed for reasonable out-of-pocket expenses, including costs of travel, meals and lodging, photocopying, telephone, facsimile and couriers. The Agent shall also be reimbursed for its fees of underwriter's counsel (including counsel's out-of-pocket expenses) not to exceed $35,000. The selection of such counsel will be done by the Agent, after consultation with the Bank. + + Section 3. Prospectus; Offering. The Shares are to be initially offered in the Offering at the Purchase Price as defined and set forth on the cover page of the Prospectus. + + 4 + + Section 4. Representations and Warranties of the Company, the MHC and the Bank. The Company, the MHC and the Bank jointly and severally represent and warrant to and agree with the Agent as follows: + + (a) The Registration Statement which was prepared by the Company, the MHC and the Bank and filed with the Commission was declared effective by the Commission on __________ __, 2000. At the time the Registration Statement, including the Prospectus contained therein (including any amendment or supplement), became effective, the Registration Statement contained all statements that were required to be stated therein in accordance with the 1933 Act and the 1933 Act Regulations, complied in all material respects with the requirements of the 1933 Act and the 1933 Act Regulations and the Registration Statement, including the Prospectus contained therein (including any amendment or supplement thereto), and any information regarding the Company or the MHC or the Bank contained in Sales Information (as such term is defined in Section 8 hereof) authorized by the Company, the MHC or the Bank for use in connection with the Offering, did not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and at the time any Rule 424(b) or (c) Prospectus was filed with the Commission and at the Closing Date referred to in Section 2, the Registration Statement, including the Prospectus contained therein (including any amendment or supplement thereto), and any information regarding the Company, the MHC or the Bank contained in Sales Information (as such term is defined in Section 8 hereof) authorized by the Company, the MHC or the Bank for use in connection with the Offering will contain all statements that are required to be stated therein in accordance with the 1933 Act and the 1933 Act Regulations and will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; provided, however, that the representations and warranties in this Section 4(a) shall not apply to statements or omissions made in reliance upon and in conformity with written information furnished to the Company, the MHC or the Bank by the Agent or its counsel expressly regarding the Agent for use in the Prospectus or statements in or omissions from any Sales Information or information filed pursuant to state securities or blue sky laws or regulations regarding the Agent. + + (b) The MHC Application which was prepared by the Company, the MHC and the Bank and filed with the OTS was approved by the OTS on ___________ ___, 2000, and the related Prospectus has been authorized for use by the OTS. At the time of the approval of the MHC Application, including the + + 5 + + + + + + Prospectus (including any amendment or supplement thereto), by the OTS and at all times subsequent thereto until the Closing Date, the MHC Application, including the Prospectus (including any amendment or supplement thereto), will comply in all material respects with the MHC Regulations, except to the extent waived in writing by the OTS. The MHC Application, including the Prospectus (including any amendment or supplement thereto), does not include any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; provided, however, that the representations and warranties in this Section 4(b) shall not apply to statements or omissions made in reliance upon and in conformity with written information furnished to the Company, the MHC or the Bank by the Agent or its counsel expressly regarding the Agent for use in the Prospectus contained in the MHC Application or statements in or omissions from any sales information. + + (c) The Company and the MHC have registered with the OTS as savings and loan holding companies under the Home Owners' Loan Act, as amended ("HOLA"). + + (d) No order has been issued by the OTS or the FDIC (hereinafter any reference to the FDIC shall include the SAIF) preventing or suspending the use of the Prospectus, and no action by or before any such government entity to revoke any approval, authorization or order of effectiveness related to the Offering is, to the best knowledge of the Company, the MHC or the Bank, pending or threatened. + + (e) The MHC is and, as of the Closing Date, will continue to be duly organized and validly existing as a federally chartered mutual holding company under the laws of the United States, duly authorized to conduct its business and own its property as described in the Registration Statement and the Prospectus; as of the Closing Date, the MHC will have obtained all licenses, permits and other governmental authorizations required for the conduct of its business except those that individually or in the aggregate would not materially adversely affect the financial condition, earnings, capital, assets or properties of the Company, MHC and Bank taken as a whole; as of the Closing Date, all such licenses, permits and governmental authorizations will be in full force and effect and the MHC will be in compliance therewith in all material respects; as of the Closing Date, the MHC will be duly qualified as a foreign corporation to transact business in each jurisdiction in which the failure to be so qualified in one or more of such jurisdictions would have a material adverse effect on the financial condition, earnings, capital, assets, properties or business of the Company, MHC and Bank considered as one enterprise. + + 6 + + (f) The MHC does not own any equity securities or any equity interest in any business enterprise except as described in the Prospectus. + + (g) The MHC is not authorized to issue any shares of capital stock. + + (h) At the Closing Date, the Plan will have been adopted by the Boards of Directors of the Company, the MHC and the Bank and approved by the members of the Bank, and the offer and sale of the Shares will have been conducted in all material respects in accordance with the Plan, the MHC Regulations, and all other applicable laws, regulations, decisions and orders, including all terms, conditions, requirements and provisions precedent to the Offering imposed upon the Company, the MHC or the Bank by the OTS, the Commission, or any other regulatory authority and in the manner described in the Prospectus. No person has sought to obtain review of the final action of the OTS in approving the Plan or in approving the MHC Application, or any other statute or regulation. + + (i) The Bank has been organized and is a validly existing federally chartered savings and loan association in capital stock form of organization, duly authorized to conduct its business and own its property as described in the Registration Statement and the Prospectus; the Bank has obtained all material licenses, permits and other governmental authorizations currently required for the conduct of its business; all such licenses, permits and governmental authorizations are in full force and effect, and the Bank is in all material respects complying with all laws, rules, regulations and orders applicable to the operation of its business; the Bank is existing under the laws of the United States and is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which its ownership of property or leasing of property or the conduct of its business requires such qualification, unless the failure to be so qualified in one or more of such jurisdictions would not have a material adverse effect on the condition, financial or otherwise, or the business, operations or income of the Bank. The + + + + + + Bank does not own equity securities or any equity interest in any other business enterprise except as described in the Prospectus or as would not be material to the operations of the Bank. Upon completion of the sale by the Company of the Shares contemplated by the Prospectus, (i) all of the issued and outstanding capital stock of the Bank will be owned by the Company, (ii) the Company will have no direct subsidiaries other than the Bank, and (iii) the Company will be a majority-owned subsidiary of the MHC. The Offering will have been effected in all material respects in accordance with all applicable statutes, regulations, decisions and orders; and, except with respect to the filing of certain post-sale, post-Offering reports, and documents in compliance with the 1933 Act Regulations, the OTS' resolutions or letters of + + 7 + + approval, all terms, conditions, requirements and provisions with respect to the Offering imposed by the Commission, the OTS, and the FDIC, if any, will have been complied with by the Company, the MHC and the Bank in all material respects or appropriate waivers will have been obtained and all material notice and waiting periods will have been satisfied, waived or elapsed. + + (j) The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the United States with corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Registration Statement and the Prospectus, and at the Closing Date the Company will be qualified to do business as a foreign corporation in each jurisdiction in which the conduct of its business requires such qualification, except where the failure to so qualify would not have a material adverse effect on the condition, financial or otherwise, or the business, operations or income of the Company. The Company has obtained all material licenses, permits and other governmental authorizations currently required for the conduct of its business; all such licenses, permits and governmental authorizations are in full force and effect, and the Company is in all material respects complying with all laws, rules, regulations and orders applicable to the operation of its business. + + (k) The Bank is a member of the Federal Home Loan Bank of Dallas ("FHLB- Dallas"). The deposit accounts of the Bank are insured by the FDIC up to the applicable limits; and no proceedings for the termination or revocation of such insurance are pending or, to the best knowledge of the Company or the Bank, threatened. + + (l) The Company, the MHC and the Bank have good and marketable title to all real property and good title to all other assets material to the business of the Company, the MHC and the Bank, taken as a whole, and to those properties and assets described in the Registration Statement and Prospectus as owned by them, free and clear of all liens, charges, encumbrances or restrictions, except such as are described in the Registration Statement and Prospectus, or are not material to the business of the Company, the MHC and the Bank, taken as a whole; and all of the leases and subleases material to the business of the Company, the MHC and the Bank, taken as a whole, under which the Company, the MHC or the Bank hold properties, including those described in the Registration Statement and Prospectus, are in full force and effect. + + (m) The Company and the Bank have received an opinion of their special counsel, Luse Lehman Gorman Pomerenk & Schick with respect to the federal income tax consequences of the Offering and the opinions of + + 8 + + ____________________ with respect to New Mexico income tax consequences of the Offering; all material aspects of the opinions of Luse Lehman Gorman Pomerenk & Schick and _____________________ are accurately summarized in the Registration Statement and will be accurately summarized in the Prospectus; and further represent and warrant that the facts upon which such opinions are based are truthful, accurate and complete. + + (n) The Company, the MHC and the Bank have all such power, authority, authorizations, approvals and orders as may be required to enter into this Agreement, to carry out the provisions and conditions hereof and to issue and sell the Shares to be sold by the Company, as provided herein and as described in the Prospectus except approval or confirmation by the OTS of the final appraisal of the Company. The consummation of the Offering, the execution, delivery and performance of this Agreement and the consummation of the transactions herein contemplated have been duly and validly authorized by all necessary corporate action on the part + + + + + + of the Company, the MHC and the Bank and this Agreement has been validly executed and delivered by the Company, the MHC and the Bank and is the valid, legal and binding agreement of the Company, the MHC and the Bank enforceable in accordance with its terms (except as the enforceability thereof may be limited by bankruptcy, insolvency, moratorium, reorganization or similar laws relating to or affecting the enforcement of creditors' rights generally or the rights of creditors of savings and loan holding companies, the accounts of whose subsidiaries are insured by the FDIC or by general equity principles regardless of whether such enforceability is considered in a proceeding in equity or at law, and except to the extent if any, that the provisions of Sections 8 and 9 hereof may be unenforceable as against public policy). + + (o) The Company, the MHC and the Bank are not in violation of any directive received from the OTS, the FDIC, or any other agency to make any material change in the method of conducting their businesses so as to comply in all material respects with all applicable statutes and regulations (including, without limitation, regulations, decisions, directives and orders of the OTS, and the FDIC) and, except as may be set forth in the Registration Statement and the Prospectus, there is no suit or proceeding or charge or action before or by any court, regulatory authority or governmental agency or body, pending or, to the knowledge of the Company, the MHC or the Bank, threatened, which might materially and adversely affect the Offering, the performance of this Agreement or the consummation of the transactions contemplated in the Plan and as described in the Registration Statement and the Prospectus or which might result in any material adverse change in the condition (financial or otherwise), earnings, capital or properties of the + + 9 + + Company, the MHC and the Bank, or which would materially affect their properties and assets. + + (p) The financial statements, schedules and notes related thereto which are included in the Prospectus fairly present the consolidated balance sheet, income statement, statement of changes in equity and cash flows of the Bank at the respective dates indicated and for the respective periods covered thereby and comply as to form in all material respects with the applicable accounting requirements of Title 12 of the Code of Federal Regulations and generally accepted accounting principles (including those requiring the recording of certain assets at their current market value). Such financial statements, schedules and notes related thereto have been prepared in accordance with generally accepted accounting principles consistently applied through the periods involved, present fairly in all material respects the information required to be stated therein and are consistent with the most recent financial statements and other reports filed by the Bank with the OTS. The other financial, statistical and pro forma information and related notes included in the Prospectus present fairly the information shown therein on a basis consistent with the audited and unaudited financial statements of the Bank included in the Prospectus, and as to the pro forma adjustments, the adjustments described therein have been properly applied on the basis described therein. + + (q) Since the respective dates as of which information is given in the Registration Statement including the Prospectus: (i) there has not been any material adverse change, financial or otherwise, in the condition of the Company, the MHC or the Bank considered as one enterprise, or in the earnings, capital or properties of the Company, the MHC or the Bank, whether or not arising in the ordinary course of business; (ii) there has not been any material increase in the long-term debt of the Bank or in the principal amount of the Bank's assets which are classified by the Bank as substandard, doubtful or loss or in loans past due 90 days or more or real estate acquired by foreclosure, by deed-in-lieu of foreclosure or deemed in-substance foreclosure or any material decrease in retained earnings or total assets of the Bank nor has the Company, the MHC or the Bank issued any securities (other than in connection with the incorporation of the Company) or incurred any liability or obligation for borrowing other than in the ordinary course of business; (iii) there have not been any material transactions entered into by the Company, the MHC or the Bank; (iv) there has not been any material adverse change in the aggregate dollar amount of the Bank's deposits or its consolidated net worth; (v) there has been no material adverse change in the Company's, the MHC's or the Bank's relationship with its insurance carriers, including, without limitation, cancellation or other termination of the Company's, the + + 10 + + + + + + MHC's or the Bank's fidelity bond or any other type of insurance coverage; (vi) except as disclosed in the Prospectus there has been no material change in management of the Company, the MHC or the Bank, neither of which has any material undisclosed liability of any kind, contingent or otherwise; (vii) the Company, the MHC or the Bank has not sustained any material loss or interference with its respective business or properties from fire, flood, windstorm, earthquake, accident or other calamity, whether or not covered by insurance; (viii) the Company, the MHC or the Bank is not in default in the payment of principal or interest on any outstanding debt obligations; (ix) the capitalization, liabilities, assets, properties and business of the Company, the MHC and the Bank conform in all material respects to the descriptions thereof contained in the Prospectus; and (x) neither the Company, the MHC nor the Bank has any material contingent liabilities, except as set forth in the Prospectus. All documents made available to or delivered or to be made available to or delivered by the Bank, the MHC or the Company or their representatives in connection with the issuance and sale of the Shares, including records of account holders, depositors and other members of the Bank, or in connection with the Agent's exercise of due diligence, except for those documents which were prepared by parties other than the Bank, the MHC, the Company or their representatives, to the best knowledge of the Bank, the MHC and the Company, were on the dates on which they were delivered, or will be on the dates on which they are to be delivered, true, complete and correct in all material respects. + + (r) As of the date hereof and as of the Closing Date, neither the Company, the MHC nor the Bank is (i) in violation of its articles of incorporation or charter or bylaws, respectively, or (ii) in default in the performance or observance of any material obligation, agreement, covenant, or condition contained in any material contract, lease, loan agreement, indenture or other instrument to which it is a party or by which it or any of its property may be bound; the consummation of the Offering, the execution, delivery and performance of this Agreement and the consummation of the transactions herein contemplated have been duly and validly authorized by all necessary corporate action on the part of the Company, the MHC and the Bank and this Agreement has been validly executed and delivered by the Company, the MHC and the Bank and is a valid, legal and binding Agreement of the Company, the MHC and the Bank enforceable in accordance with its terms, except as the enforceability thereof may be limited by (i) bankruptcy, insolvency, reorganization, moratorium, conservatorship, receivership or other similar laws now or hereafter in effect relating to or affecting the enforcement of creditors' rights generally or the rights of creditors of federal savings institutions, (ii) general equitable principles, (iii) laws relating to the safety and soundness of insured depository institutions, and (iv) applicable + + 11 + + law or public policy with respect to the indemnification and/or contribution provisions contained herein, and except that no representation or warranty need be made as to the effect or availability of equitable remedies or injunctive relief (regardless of whether such enforceability is considered in a proceeding in equity or at law). The consummation of the transactions herein contemplated will not: (i) conflict with or constitute a breach of, or default under, or result in the creation of any material lien, charge or encumbrance upon any of the assets of the Company, the MHC or the Bank pursuant to the articles of incorporation of the Company or the charter and bylaws of the Bank and the MHC, or any material contract, lease or other instrument to which the Company, the MHC or the Bank has a beneficial interest, or any applicable law, rule, regulation or order; (ii) violate any authorization, approval, judgement, decree, order, statute, rule or regulation applicable to the Company, the MHC or the Bank, except for such violations which would not have a material adverse effect on the financial condition and results of operations of the Company, the MHC and the Bank on a consolidated basis; or (iii) result in the creation of any material lien, charge or encumbrance upon any property of the Company, the MHC or the Bank. + + (s) No default exists, and no event has occurred which with notice or lapse of time, or both, would constitute a default, on the part of the Company, the MHC or the Bank in the due performance and observance of any term, covenant or condition of any indenture, mortgage, deed of trust, note, bank loan or credit agreement or any other instrument or agreement to which the Company, the MHC or the Bank is a party or by which any of them or any of their property is bound or affected, except such defaults which would not have a material adverse affect on the financial condition or results of operations of the Company, the MHC and the Bank on a consolidated basis; such agreements are in full force and effect; and no other party to any such agreements has instituted or, to the best knowledge of the Company, the MHC and the Bank, threatened any action or proceeding wherein the Company, the MHC or the Bank would or might be alleged to be in default + + + + + + thereunder. + + (t) Upon consummation of the Offering, the authorized, issued and outstanding equity capital of the Company will be within the range set forth in the Prospectus under the caption "Capitalization," and no Shares have been or will be issued and outstanding prior to the Closing Date (other than Shares held by the MHC); the Shares will have been duly and validly authorized for issuance and, when issued and delivered by the Company pursuant to the Plan against payment of the consideration calculated as set forth in the Plan and in the Prospectus, will be duly and validly issued, fully paid and non-assessable, except for shares purchased by the ESOP with funds + + 12 + + borrowed from the Company to the extent payment therefor in cash has not been received by the Company; except to the extent that subscription rights and priorities pursuant thereto exist pursuant to the Plan, no preemptive rights exist with respect to the Shares; and the terms and provisions of the Shares will conform in all material respects to the description thereof contained in the Registration Statement and the Prospectus. To the best knowledge of the Company, the MHC and the Bank, upon the issuance of the Shares, good title to the Shares will be transferred from the Company to the purchasers thereof against payment therefor, subject to such claims as may be asserted against the purchasers thereof by third-party claimants. + + (u) No approval of any regulatory or supervisory or other public authority is required in connection with the execution and delivery of this Agreement or the issuance of the Shares, except for the approval of the Commission, the OTS and any necessary qualification, notification, registration or exemption under the securities or blue sky laws of the various states in which the Shares are to be offered, and except as may be required under the rules and regulations of the NASD. + + (v) The Accounting & Consulting Group L.L.P. which has certified the consolidated audited financial statements and schedules of the Bank included in the Prospectus, has advised the Company, the MHC and the Bank in writing that they are, with respect to the Company, the MHC and the Bank, independent public accountants within the meaning of the Code of Professional Ethics of the American Institute of Certified Public Accountants and Title 12 of the Code of Federal Regulations and Section 571.2(c)(3). + + (w) RP Financial LC, which has prepared the Valuation Appraisal Report as of December ___, 1999 (as amended or supplemented, if so amended or supplemented) (the "Appraisal"), has advised the Company in writing that it is independent of the Company, the MHC and the Bank within the meaning of the MHC Regulations. + + (x) The Company, the MHC and the Bank have timely filed all required federal, state and local tax returns; the Company, the MHC and the Bank have paid all taxes that have become due and payable in respect of such returns, except where permitted to be extended, have made adequate reserves for similar future tax liabilities and no deficiency has been asserted with respect thereto by any taxing authority. + + (y) The Bank is in compliance in all material respects with the applicable financial record-keeping and reporting requirements of the Currency and + + 13 + + Foreign Transactions Reporting Act of 1970, as amended, and the regulations and rules thereunder. + + (z) To the knowledge of the Company, the MHC and the Bank, neither the Company, the MHC, the Bank nor employees of the Company, the MHC or the Bank have made any payment of funds of the MHC, the Company or the Bank as a loan for the purchase of the Shares or made any other payment of funds prohibited by law, and no funds have been set aside to be used for any payment prohibited by law. + + (aa) Prior to the Offering, neither the Company, the MHC nor the Bank has: (i) issued any securities within the last 18 months (except for notes to evidence other bank loans and reverse repurchase agreements or other liabilities in the ordinary course of business or as described in the Prospectus, and except for any shares issued in connection with the incorporation of the Company); (ii) had any material dealings within the 12 months prior to the date hereof with any member of the NASD, or any person related to or associated with such member, other than discussions and meetings relating to the proposed Offering and routine purchases and sales of United States government and + + + + + + agency securities; (iii) entered into a financial or management consulting agreement except as contemplated hereunder; and (iv) engaged any intermediary between the Agent and the Company, the MHC and the Bank in connection with the offering of the Shares, and no person is being compensated in any manner for such service. Appropriate arrangements have been made for placing the funds received from subscriptions for Shares in a special interest-bearing account with the Bank until all Shares are sold and paid for, with provision for refund to the purchasers in the event that the Offering is not completed for whatever reason or for delivery to the Company if all Shares are sold. + + (bb) The Company, the MHC and the Bank have not relied upon the Agent or its legal counsel or other advisors for any legal, tax or accounting advice in connection with the Offering. + + (cc) The Company is not required to be registered under the Investment Company Act of 1940, as amended. + + (dd) Any certificates signed by an officer of the Company, the MHC or the Bank pursuant to the conditions of this Agreement and delivered to the Agent or their counsel that refers to this Agreement shall be deemed to be a representation and warranty by the Company, the MHC or the Bank to the Agent as to the matters covered thereby with the same effect as if such representation and warranty were set forth herein. + + 14 + + Section 5. Representations and Warranties of the Agent. + + The Agent represents and warrants to the Company, the MHC and the Bank that: + + (i) it is a corporation and is validly existing in good standing under the laws of the State of Ohio and licensed to conduct business in the State of Ohio and it has the full power and authority to provide the services to be furnished to the Bank, the MHC and the Company hereunder. + + (ii) The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly and validly authorized by all necessary action on the part of the Agent, and this Agreement has been duly and validly executed and delivered by the Agent and is a legal, valid and binding agreement of the Agent, enforceable in accordance with its terms. + + (iii) Each of the Agent and its employees, agents and representatives who shall perform any of the services hereunder shall be duly authorized and empowered, and shall have all licenses, approvals and permits necessary to perform such services. + + (iv) The execution and delivery of this Agreement by the Agent, the consummation of the transactions contemplated hereby and compliance with the terms and provisions hereof will not conflict with, or result in a breach of, any of the terms, provisions or conditions of, or constitute a default (or an event which with notice or lapse of time or both would constitute a default) under, the articles of incorporation of the Agent or any agreement, indenture or other instrument to which the Agent is a party or by which it or its property is bound. + + (v) No approval of any regulatory or supervisory or other public authority is required in connection with the Agent's execution and delivery of this Agreement, except as may have been received. + + (vi) There is no suit or proceeding or charge or action before or by any court, regulatory authority or government agency or body or, to the knowledge of the Agent, pending or threatened, which might materially adversely affect the Agent's performance of this Agreement. + + Section 5.l Covenants of the Company, the MHC and the Bank. The Company, the MHC and the Bank hereby jointly and severally covenant with the Agent as follows: + + (a) The Company will not, at any time after the date the Registration Statement is declared effective, file any amendment or supplement to the Registration Statement without providing the Agent and its counsel an opportunity to + + 15 + + review such amendment or supplement or file any amendment or supplement to which amendment or supplement the Agent or its counsel shall reasonably object. + + (b) The MHC and Bank will not, at any time after the MHC Application is approved by the OTS, file any amendment or supplement to such + + + + + + MHC Application without providing the Agent and its counsel an opportunity to review such amendment or supplement or file any amendment or supplement to which amendment or supplement the Agent or its counsel shall reasonably object. + + (c) The Company, the MHC and the Bank will use their best efforts to cause any post-effective amendment to the Registration Statement to be declared effective by the Commission and any post-effective amendment to the MHC Application to be approved by the OTS and will immediately upon receipt of any information concerning the events listed below notify the Agent: (i) when the Registration Statement, as amended, has become effective; (ii) when the MHC Application, as amended has been approved by the OTS; (iii) any comments from the Commission, the OTS or any other governmental entity with respect to the Offering or the transactions contemplated by this Agreement; (iv) of the request by the Commission, the OTS or any other governmental entity for any amendment or supplement to the Registration Statement, the MHC Application or for additional information; (v) of the issuance by the Commission, the OTS or any other governmental entity of any order or other action suspending the Offering or the use of the Registration Statement or the Prospectus or any other filing of the Company, the MHC or the Bank under the MHC Regulations, or other applicable law, or the threat of any such action; (vi) the issuance by the Commission, the OTS or any authority of any stop order suspending the effectiveness of the Registration Statement or of the initiation or threat of initiation or threat of any proceedings for that purpose; or (vii) of the occurrence of any event mentioned in paragraph (g) below. The Company, the MHC and the Bank will make every reasonable effort (i) to prevent the issuance by the Commission, the OTS or any state authority of any such order and, if any such order shall at any time be issued, (ii) to obtain the lifting thereof at the earliest possible time. + + (d) The Company, the MHC and the Bank will deliver to the Agent and to its counsel two conformed copies of the Registration Statement and the MHC Application, as originally filed and of each amendment or supplement thereto, including all exhibits. Further, the Company, the MHC and the Bank will deliver such additional copies of the foregoing documents to counsel to the Agent as may be required for any NASD and "blue sky" filings. + + 16 + + (e) The Company, the MHC and the Bank will furnish to the Agent, from time to time during the period when the Prospectus (or any later prospectus related to this offering) is required to be delivered under the 1933 Act or the Securities Exchange Act of 1934 (the "1934 Act"), such number of copies of such Prospectus (as amended or supplemented) as the Agent may reasonably request for the purposes contemplated by the 1933 Act, the 1933 Act Regulations, the 1934 Act or the rules and regulations promulgated under the 1934 Act (the "1934 Act Regulations"). The Company authorizes the Agent to use the Prospectus (as amended or supplemented, if amended or supplemented) in any lawful manner contemplated by the Plan in connection with the sale of the Shares by the Agent. + + (f) The Company, the MHC and the Bank will comply with any and all material terms, conditions, requirements and provisions with respect to the Offering, and the transactions contemplated thereby, imposed by the Commission, the OTS or the MHC Regulations, and by the 1933 Act, the 1933 Act Regulations, the 1934 Act and the 1934 Act Regulations to be complied with prior to or subsequent to the Closing Date and when the Prospectus is required to be delivered, and during such time period the Company, the MHC and the Bank will comply, at their own expense, with all material requirements imposed upon them by the Commission, the OTS or the MHC Regulations, and by the 1933 Act, the 1933 Act Regulations, the 1934 Act and the 1934 Act Regulations, including, without limitation, Rule 10b-5 under the 1934 Act, in each case as from time to time in force, so far as necessary to permit the continuance of sales or dealing in the Common Stock during such period in accordance with the provisions hereof and the Prospectus. + + (g) If, at any time during the period when the Prospectus relating to the Shares is required to be delivered, any event relating to or affecting the Company, the MHC or the Bank shall occur, as a result of which it is necessary or appropriate, in the opinion of counsel for the Company, the MHC and the Bank or in the reasonable opinion of the Agent's counsel, to amend or supplement the Registration Statement or Prospectus in order to make the Registration Statement or Prospectus not misleading in light of the circumstances existing at the time the Prospectus is delivered to a purchaser, the Company, the MHC and the Bank will immediately so inform the Agent and prepare and file, at their own expense, with the Commission and the OTS and furnish to the Agent a reasonable number of copies of an amendment or amendments of, or a supplement or supplements to, the Registration Statement or Prospectus (in form and substance reasonably satisfactory to the Agent and its counsel after a reasonable time for review) which will amend or supplement the Registration Statement or + + + + + + Prospectus so that as amended + + 17 + + or supplemented it will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances existing at the time the Prospectus is delivered to a purchaser, not misleading. For the purpose of this Agreement, the Company, the MHC and the Bank each will timely furnish to the Agent such information with respect to itself as the Agent may from time to time reasonably request. + + (h) The Company, the MHC and the Bank will take all necessary actions, in cooperating with the Agent, and furnish to whomever the Agent may direct, such information as may be required to qualify or register the Shares for offering and sale by the Company or to exempt such Shares from registration, or to exempt the Company as a broker-dealer and its officers, directors and employees as broker-dealers or agents under the applicable securities or blue sky laws of such jurisdictions in which the Shares are required under the MHC Regulations to be sold or as the Agent and the Company, the MHC and the Bank may reasonably agree upon; provided, however, that the Company shall not be obligated to file any general consent to service of process, to qualify to do business in any jurisdiction in which it is not so qualified, or to register its directors or officers as brokers, dealers, salesmen or agents in any jurisdiction. In each jurisdiction where any of the Shares shall have been qualified or registered as above provided, the Company will make and file such statements and reports in each fiscal period as are or may be required by the laws of such jurisdiction. + + (i) The Company, the MHC and the Bank will not sell or issue, contract to sell or otherwise dispose of, for a period of 90 days after the Closing Date, without the Agent's prior written consent, any Common Stock other than the Shares or other than in connection with any plan or arrangement described in the Prospectus, including existing stock benefit plans. + + (j) The Company shall register its Common Stock under Section 12(g) of the 1934 Act on or prior to the Closing Date pursuant to the Plan and shall request that such registration be effective prior to or upon completion of the Offering. The Company shall maintain the effectiveness of such registration for not less than three years or such shorter period as may be required by the OTS. + + (k) During the period during which the Company's Common Stock is registered under the 1934 Act or for three (3) years from the date hereof, whichever period is greater, the Company will furnish to its shareholders as soon as practicable after the end of each fiscal year an annual report of the Company (including a consolidated balance sheet and statements of consolidated + + 18 + + income, shareholders' equity and cash flows of the Company and its subsidiaries as at the end of and for such year, certified by independent public accountants in accordance with Regulation S-X under the 1933 Act and the 1934 Act). + + (l) During the period of three years from the date hereof, the Company will furnish to the Agent: (i) as soon as practicable after such information is publicly available, a copy of each report of the Company furnished to or filed with the Commission under the 1934 Act or any national securities exchange or system on which any class of securities of the Company is listed or quoted (including, but not limited to, reports on Forms 10-K, 10-Q and 8-K and all proxy statements and annual reports to stockholders), (ii) a copy of each other non-confidential report of the Company mailed to its stockholders or filed with the Commission, the OTS or any other supervisory or regulatory authority or any national securities exchange or system on which any class of securities of the Company is listed or quoted, each press release and material news items and additional documents and information with respect to the Company, MHC or the Bank as the Agent may reasonably request; and (iii) from time to time, such other nonconfidential information concerning the Company, the MHC or the Bank as the Agent may reasonably request. + + (m) The Company, the MHC and the Bank will use the net proceeds from the sale of the Shares in the manner set forth in the Prospectus under the caption "Use of Proceeds." + + (n) Other than as permitted by the MHC Regulations, the HOLA, the 1933 Act, the 1933 Act Regulations, and the laws of any state in which the Shares are registered or qualified for sale or exempt from registration, neither the Company, the MHC nor the Bank will + + + + + + distribute any prospectus, offering circular or other offering material in connection with the offer and sale of the Shares. + + (o) The Company will use its best efforts to (i) encourage and assist a market maker to establish and maintain a market for the Shares and (ii) list and maintain quotation of the Shares on a national or regional securities exchange or on the Nasdaq Stock Market ("Nasdaq") effective on or prior to the Closing Date. + + (p) The Bank will maintain appropriate arrangements for depositing all funds received from persons mailing subscriptions for or orders to purchase Shares in the Offering on an interest-bearing basis at the rate described in the Prospectus until the Closing Date and satisfaction of all conditions precedent to the release of the Bank's obligation to refund payments received from + + 19 + + persons subscribing for or ordering Shares in the Offering in accordance with the Plan and as described in the Prospectus or until refunds of such funds have been made to the persons entitled thereto or withdrawal authorizations canceled in accordance with the Plan and as described in the Prospectus. The Bank will maintain such records of all funds received to permit the funds of each subscriber to be separately insured by the FDIC (to the maximum extent allowable) and to enable the Bank to make the appropriate refunds of such funds in the event that such refunds are required to be made in accordance with the Plan and as described in the Prospectus. + + (q) The Company, the MHC and the Bank will take such actions and furnish such information as are reasonably requested by the Agent in order for the Agent to ensure compliance with the NASD's "Interpretation Relating to Free Riding and Withholding." + + (r) Neither the Company, the MHC nor the Bank will amend the Plan without notifying the Agent prior thereto. + + (s) The Company shall assist the Agent, if necessary, in connection with the allocation of the Shares in the event of an oversubscription and shall provide the Agent with any information necessary to assist the Company in allocating the Shares in such event and such information shall be accurate and reliable in all material respects. + + (t) Prior to the Closing Date, the Company, the MHC and the Bank will inform the Agent of any event or circumstances of which it is aware as a result of which the Registration Statement and/or Prospectus, as then amended or supplemented, would contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein not misleading. + + (u) Subsequent to the date the Registration Statement is declared effective by the Commission and prior to the Closing Date, except as otherwise may be indicated or contemplated therein or set forth in an amendment or supplement thereto, neither the Company, the MHC nor the Bank will have: (i) issued any securities or incurred any liability or obligation, direct or contingent, for borrowed money, except borrowings from the same or similar sources indicated in the Prospectus in the ordinary course of its business, or (ii) entered into any transaction which is material in light of the business and properties of the Company and the Bank, taken as a whole. + + (v) The facts and representations provided to Luse Lehman Gorman Pomerenk & Schick by the Bank, the MHC and the Company and upon which Luse + + 20 + + Lehman Gorman Pomerenk & Schick will base its opinion under Section 7(c)(1) are and will be truthful, accurate and complete. + + Section 6. Payment of Expenses. Whether or not the Offering is completed or the sale of the Shares by the Company is consummated, the Company, the MHC and the Bank jointly and severally agree to pay or reimburse the Agent for the Company, the MHC and the Bank have agreed to reimburse the Agent for its out-of-pocket expenses, and its legal fees (as specified in Section 2) and to indemnify the Agent against certain claims or liabilities, including certain liabilities under the Securities Act, and will contribute to payments the Agent may be required to make in connection with any such claims or liabilities; and the fees set forth under Section 2. In the event the Company is unable to sell a minimum of 708,050 Shares, the Company, the MHC and the Bank shall promptly reimburse the Agent in accordance with Section 2 hereof. + + Section 7. Conditions to the Agent's Obligations. The obligations of the Agent hereunder, as to the Shares to be delivered at the Closing Date, are + + + + + +subject, to the extent not waived in writing by the Agent, to the condition that all representations and warranties of the Company, the MHC and the Bank herein are, at and as of the commencement of the Offering and at and as of the Closing Date, true and correct in all material respects, the condition that the Company, the MHC and the Bank shall have performed all of their obligations hereunder to be performed on or before such dates, and to the following further conditions: + + (a) At the Closing Date, the Company, the MHC and the Bank shall have conducted the Offering in all material respects in accordance with the Plan, the MHC Regulations, and all other applicable laws, regulations, decisions and orders, including all terms, conditions, requirements and provisions precedent to the Offering imposed upon them by the OTS. + + (b) The Registration Statement shall have been declared effective by the Commission and the MHC Application and MHC Notice shall be approved by the OTS not later than 5:30 p.m. on the date of this Agreement, or with the Agent's consent at a later time and date; and at the Closing Date, no stop order suspending the effectiveness of the Registration Statement shall have been issued under the 1933 Act or proceedings therefore initiated or threatened by the Commission or any state authority, and no order or other action suspending the authorization of the Prospectus or the consummation of the Conversion shall have been issued or proceedings therefore initiated or, to the Company's, the MHC's or the Bank's knowledge, threatened by the Commission, the OTS, the FDIC, or any state authority. + + (c) At the Closing Date, the Agent shall have received: + + 21 + + (1) The favorable opinion, dated as of the Closing Date and addressed to the Agent and for its benefit, of Luse Lehman Gorman Pomerenk & Schick, special counsel for the Company, the MHC and the Bank, in form and substance to the effect that: + + (i) The Company has been duly incorporated and is validly existing as a corporation under the laws of the United States. + + (ii) The Company has corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Registration Statement and the Prospectus. + + (iii) The Bank has been organized and is a validly existing federally chartered savings and loan association in capital stock form of organization, authorized to conduct its business and own its property as described in the Registration Statement and the Prospectus. All of the outstanding capital stock of the Bank upon completion of the Offering will be duly authorized and, upon payment therefor, will be validly issued, fully paid and non-assessable and will be owned by the Company, free and clear of any liens, encumbrances, claims or other restrictions. + + (iv) The Bank is a member of the FHLB-Dallas. The deposit accounts of the Bank are insured by the FDIC up to the maximum amount allowed under law and no proceedings for the termination or revocation of such insurance are pending or, to such counsel's Actual Knowledge, threatened; to the extent that such information constitutes matters of law and legal conclusions, has been reviewed by such counsel and is accurately described in all material respects. + + (v) The MHC has been duly organized and is validly existing as a federally chartered mutual holding company, duly authorized to conduct its business and own its properties as described in the Registration Statement and Prospectus. + + (vi) Upon consummation of the Offering, immediately upon completion thereof subject to compliance with all conditions imposed by the OTS under the terms of the OTS' approval order, in an amount as described in the Prospectus, the authorized, issued and outstanding capital stock of the Company will be within the range set forth in the Prospectus under the caption "Capitalization," and no shares of Common Stock have been issued prior to the Closing Date; at the time of the Offering, the Shares subscribed for pursuant to the Offering will have been duly and validly authorized for issuance, and when issued and delivered by the Company pursuant to the Plan against payment of the consideration calculated as set forth in the Plan and + + 22 + + Prospectus, will be duly and validly issued and fully paid and non-assessable; the issuance of the Shares is not subject to preemptive rights and the terms and provisions of the Shares conform in all material respects to the description thereof + + + + + + contained in the Prospectus. To such counsel's Actual Knowledge, upon the issuance of the Shares, good title to the Shares will be transferred by the Company to the purchasers thereof against payment therefor, subject to such claims as may be asserted against the purchasers thereof by third-party claimants. + + (vii) The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby, have been duly and validly authorized by all necessary action on the part of the Company, the MHC and the Bank; and this Agreement is a valid and binding obligation of the Company, the MHC and the Bank, enforceable in accordance with its terms, except as the enforceability thereof may be limited by (i) bankruptcy, insolvency, reorganization, moratorium, conservatorship, receivership or other similar laws now or hereafter in effect relating to or affecting the enforcement of creditors' rights generally or the rights of creditors of savings institutions, the deposits of which are insured by the FDIC and their holding companies, (ii) general equitable principles, (iii) laws relating to the safety and soundness of insured depository institutions and their holding companies, and (iv) applicable law or public policy with respect to the indemnification and/or contribution provisions contained herein, including without limitation the provisions of Sections 23A and 23B of the Federal Reserve Act and except that no opinion need be expressed as to the effect or availability of equitable remedies or injunctive relief (regardless of whether such enforceability is considered in a proceeding in equity or at law). + + (viii) The MHC Application has been approved by the OTS and the Prospectus has been authorized for use by the OTS, and no action has been taken, and to such counsel's Actual Knowledge none is pending or threatened, to revoke any such authorization or approval. + + (ix) The Plan has been duly adopted by the required vote of the directors of the Company, the MHC and the Bank, and based upon the certificate of the inspector of election, by the members of the Bank. + + (x) Subject to the satisfaction of the conditions to the OTS' approval of the Offering, no further approval, registration, authorization, consent or other order of any federal regulatory agency is required in connection with the execution and delivery of this Agreement, the issuance of the Shares and the consummation of the Offering, except as may be required under the securities or blue sky laws of various jurisdictions (as to which no opinion need be + + 23 + + rendered) and except as may be required under the rules and regulations of the NASD and/or the NYSE (as to which no opinion need be rendered). To such counsel's Actual Knowledge, the Offering has been consummated in all material respects in accordance with MHC Regulations, except that no opinion is rendered with respect to (a) the Registration Statement or Prospectus, which are covered by other clauses of this opinion, (b) the satisfaction of the post-Offering conditions in the OTS Regulations or in the OTS approvals of the MHC Application, (c) the securities or "blue sky" laws of various jurisdictions, and (d) the rules and regulations of the NASD. + + (xi) The Registration Statement is effective under the 1933 Act, and no stop order suspending the effectiveness has been issued under the 1933 Act or proceedings therefor initiated or, to such counsel's Actual Knowledge, threatened by the Commission. + + (xii) At the time the MHC Application, including the Prospectus contained therein, was approved by the OTS, the MHC Application, including the Prospectus contained therein, complied as to form in all material respects with the requirements of the MHC Regulations, federal law and all applicable rules and regulations promulgated thereunder (other than the financial statements, the notes thereto, and other tabular, financial, statistical and appraisal data included therein, as to which no opinion need be rendered). + + (xiii) At the time that the Registration Statement became effective, (i) the Registration Statement (as amended or supplemented, if so amended or supplemented) (other than the financial statements, the notes thereto, and other tabular, financial, statistical and appraisal data included therein, as to which no opinion need be rendered), complied as to form in all material respects with the requirements of the 1933 Act and the 1933 Act Regulations, and (ii) the Prospectus (other than the financial statements, the notes thereto, and other tabular, financial, statistical and appraisal data included therein, as to which no opinion need be rendered) complied as to form in all material respects with the requirements of the 1933 Act, the 1933 Act Regulations, the MHC Regulations and federal law. + + + + + + (xiv) The terms and provisions of the Shares of the Company conform, in all material respects, to the description thereof contained in the Registration Statement and Prospectus, and the form of certificate used to evidence the Shares is in due and proper form. + + (xv) There are no legal or governmental proceedings pending or threatened which are required to be disclosed in the Registration Statement and Prospectus, other than those disclosed therein, and to such counsel's + + 24 + + Actual Knowledge, all pending legal and governmental proceedings to which the Company, the MHC or the Bank is a party or of which any of their property is the subject, which are not described in the Registration Statement and the Prospectus, including ordinary routine litigation incidental to the Company's, the MHC's or the Bank's business, are, considered in the aggregate, not material. + + (xvi) To such counsel's Actual Knowledge, there are no material contracts, indentures, mortgages, loan agreements, notes, leases or other instruments required to be described or referred to in the MHC Application, the Registration Statement or the Prospectus or required to be filed as exhibits thereto other than those described or referred to therein or filed as exhibits thereto in the MHC Application, the Registration Statement or the Prospectus. The description in the MHC Application, the Registration Statement and the Prospectus of such documents and exhibits is accurate in all material respects and fairly presents the information required to be shown. + + (xvii) To such counsel's Actual Knowledge, the Company, the MHC and the Bank have conducted the Offering, in all material respects, in accordance with all applicable requirements of the Plan and applicable federal law, except that no opinion is rendered with respect to (a) the MHC Application, the Registration Statement or Prospectus, which are covered by other clauses of this opinion, (b) the satisfaction of the post-Offering conditions in the OTS Regulations or in the OTS approval of the MHC Application, (c) the securities or "blue sky" laws of various jurisdictions, and (d) the rules and regulations of the NASD. The Plan complies in all material respects with all applicable federal laws, rules, regulations, decisions and orders including, but not limited to, the MHC Regulations; no order has been issued by the OTS, the Commission, the FDIC, or any state authority to suspend the Offering or the use of the Prospectus, and no action for such purposes has been instituted or, to such counsel's Actual Knowledge, threatened by the OTS, the Commission, the FDIC, or any state authority and no person has sought to obtain regulatory or judicial review of the final action of the OTS, approving the Plan, the MHC Application or the Prospectus. + + (xviii) To such counsel's Actual Knowledge, the Company, the MHC and the Bank have obtained all material licenses, permits and other governmental authorizations currently required for the conduct of their businesses and all such licenses, permits and other governmental authorizations are in full force and effect, and the Company, the MHC and the Bank are in all material respects complying therewith, except where the failure to have such licenses, permits and other governmental authorizations or the failure to be in compliance therewith would not have a material adverse effect on the + + 25 + + business or operations of the Bank, the MHC and the Company, taken as a whole. + + (xix) To such counsel's Actual Knowledge, neither the Company, the MHC nor the Bank is in violation of its articles of incorporation and bylaws or its Charter and bylaws, as appropriate or, to such counsel's Actual Knowledge, in default or violation of any obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, loan agreement, note, lease or other instrument to which it is a party or by which it or its property may be bound, except for such defaults or violations which would not have a material adverse impact on the financial condition or results of operations of the Company, the MHC and the Bank on a consolidated basis; to such counsel's Actual Knowledge, the execution and delivery of this Agreement, the occurrence of the obligations herein set forth and the consummation of the transactions contemplated herein will not conflict with or constitute a breach of, or default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company, the MHC or the Bank pursuant to any material contract, indenture, + + + + + + mortgage, loan agreement, note, lease or other instrument to which the Company, the MHC or the Bank is a party or by which any of them may be bound, or to which any of the property or assets of the Company, the MHC or the Bank are subject; and, such action will not result in any violation of the provisions of the certificate of incorporation or bylaws of the Company or the Charter or bylaws of the MHC or the Bank or, to such counsel's Actual Knowledge, result in any violation of any applicable federal law, act, regulation (except that no opinion with respect to the securities and blue sky laws of various jurisdictions or the rules or regulations of the NASD need be rendered) or order or court order, writ, injunction or decree. + + (xx) The Company's articles of incorporation and bylaws comply in all material respects with the regulations of the OTS. The Bank's and MHC's charter and bylaws comply in all material respects with the rules and regulations of the OTS. + + (xxi) To such counsel's Actual Knowledge, neither the Company, the MHC nor the Bank is in violation of any directive from the OTS or the FDIC to make any material change in the method of conducting its respective business. + + (xxii) The information in the Prospectus under the captions "Regulation," "The Stock Offering," "Restrictions on Acquisition of the Alamogordo Financial and Alamogordo Federal" and "Description of Capital Stock of the Alamogordo Financial," to the extent that such information constitutes + + 26 + + matters of law, summaries of legal matters, documents or proceedings, or legal conclusions, has been reviewed by such counsel and is correct in all material respects. The discussion of statutes or regulations described or referred to in the Prospectus are accurate summaries and fairly present the information required to be shown. The information in the Prospectus relating to the tax consequences of the stock offering has been reviewed by such counsel and fairly describes the opinions rendered by Luse Lehman Gorman Pomerenk & Schick and _____________________ to the Company, the MHC and the Bank with respect to such matters. + + (xxiii) The Company and the MHC have been duly registered and are in good standing as savings and loan holding companies under the HOLA. + + (xxiv) In addition, such counsel shall state that during the preparation of the MHC Application, the Registration Statement and the Prospectus, they participated in conferences with certain officers of, the independent public and internal accountants for, and other representatives of the Company, the MHC and the Bank, at which conferences the contents of the MHC Application, the Registration Statement and the Prospectus and related matters were discussed and, while such counsel have not confirmed the accuracy or completeness of or otherwise verified the information contained in the MHC Application, the Registration Statement or the Prospectus, and do not assume any responsibility for such information, based upon such conferences and a review of documents deemed relevant for the purpose of rendering their view (relying as to materiality as to factual matters on certificates of officers and other factual representations by the Company, the MHC and the Bank), nothing has come to their attention that would lead them to believe that the MHC Application, the Registration Statement, the Prospectus, or any amendment or supplement thereto (other than the financial statements, the notes thereto, and other tabular, financial, statistical and appraisal data included therein as to which no view need be rendered) contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. + + In giving such opinion, such counsel may rely as to all matters of fact on certificates of officers or directors of the Company, the MHC and the Bank and certificates of public officials. The opinion of Luse Lehman Gorman Pomerenk & Schick shall be governed by the Legal Opinion Accord ("Accord") of the American Bar Association Section of Business Law (1991). The term "Actual Knowledge" as used herein shall have the meaning set forth in the Accord. For purposes of such opinion, no proceedings shall be deemed to be pending, no order or stop order shall be deemed to be issued, and no action shall be deemed to be instituted unless, in each case, a director or executive officer of the Company, the MHC or the Bank shall have received a copy of such + + 27 + +proceedings, order, stop order or action. In addition, such opinion may be limited to present statutes, regulations and judicial interpretations and to + + + + + +facts as they presently exist; in rendering such opinion, such counsel need assume no obligation to revise or supplement it should the present laws be changed by legislative or regulatory action, judicial decision or otherwise; and such counsel need express no view, opinion or belief with respect to whether any proposed or pending legislation, if enacted, or any proposed or pending regulations or policy statements issued by any regulatory agency, whether or not promulgated pursuant to any such legislation, would affect the validity of the Offering or any aspect thereof. Such counsel may assume that any agreement is the valid and binding obligation of any parties to such agreement other than the Company, the MHC or the Bank. + + The favorable opinion, dated as of the Closing Date and addressed to the Agent and for their benefit, of the Bank's local counsel, in form and substance to the effect that, to the best of such counsel's knowledge, (i) the Company, the MHC and the Bank have good and marketable title to all properties and assets which are material to the business of the Company, the MHC and the Bank and to those properties and assets described in the Registration Statement and Prospectus, as owned by them, free and clear of all liens, charges, encumbrances or restrictions, except such as are described in the Registration Statement and Prospectus, or are not material in relation to the business of the Company, the MHC and the Bank considered as one enterprise; (ii) all of the leases and subleases material to the business of the Company, the MHC and the Bank under which the Company, the MHC and the Bank hold properties, as described in the Registration Statement and Prospectus, are in full force and effect; and (iii) the Bank is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which its ownership of property or leasing of property or the conduct of its business requires such qualification, unless the failure to be so qualified in one or more of such jurisdictions would not have a material adverse effect on the condition, financial or otherwise, or the business, operations or income of the Bank. + + (d) At the Closing Date, the Agent shall have received the favorable opinion, dated as of the Closing Date, of Silver, Freedman & Taff, L.L.P., the Agent's counsel, with respect to such matters as the Agent may reasonably require. Such opinion may rely upon the opinions of counsel to the Company, the MHC and the Bank, and as to matters of fact, upon certificates of officers and directors of the Company, the MHC and the Bank delivered pursuant hereto or as such counsel shall reasonably request. + + (e) At the Closing Date, the Agent shall receive a certificate of the Chief Executive Officer and the Principal Financial and/or Accounting Officer of the Company, the MHC and the Bank in form and substance reasonably satisfactory to the Agent's Counsel, dated as of such Closing Date, to the effect that: (i) they have carefully reviewed the Prospectus and, in their opinion, at the time the Prospectus became authorized for final use, the Prospectus did not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; (ii) since + + 28 + + the date the Prospectus became authorized for final use, no event has occurred which should have been set forth in an amendment or supplement to the Prospectus which has not been so set forth, including specifically, but without limitation, any material adverse change in the condition, financial or otherwise, or in the earnings, capital, properties or business of the Company, the MHC or the Bank, and the conditions set forth in this Section 7 have been satisfied; (iii) since the respective dates as of which information is given in the Registration Statement and the Prospectus, there has been no material adverse change in the condition, financial or otherwise, or in the earnings, capital or properties of the Company, the MHC or the Bank, independently, or of the Company, the MHC and the Bank, considered as one enterprise, whether or not arising in the ordinary course of business; (iv) the representations and warranties in Section 4 are true and correct with the same force and effect as though expressly made at and as of the Closing Date; (v) the Company, MHC and the Bank have complied in all material respects with all agreements and satisfied all conditions on their part to be performed or satisfied at or prior to the Closing Date and will comply in all material respects with all obligations to be satisfied by them after the Offering; (vi) no stop order suspending the effectiveness of the Registration Statement has been initiated or, to the best knowledge of the Company, the MHC or the Bank, threatened by the Commission or any state authority; (vii) no order suspending the Offering or the effectiveness of the Prospectus has been issued and no proceedings for that purpose are pending or, to the best knowledge of the Company, the MHC or the Bank, threatened by the OTS, the Commission, the FDIC, or any state authority; and (viii) to the best knowledge of the Company, the MHC or the Bank, no person has sought to obtain review of the final action of the OTS approving the Plan. + + (f) Prior to and at the Closing Date: (i) in the reasonable opinion of the Agent, there shall have been no material adverse change in the condition, financial or otherwise, or in the earnings or business of the Company, the MHC or the Bank independently, or of the Company, the MHC and the Bank, considered as one enterprise, + + + + + + from that as of the latest dates as of which such condition is set forth in the Prospectus other than transactions referred to or contemplated therein; (ii) the Company, the MHC or the Bank shall not have received from the OTS or the FDIC any direction (oral or written) to make any material change in the method of conducting their business with which it has not complied (which direction, if any, shall have been disclosed to the Agent) or which materially and adversely would affect the business, operations or financial condition or income of the Company, the MHC and the Bank taken as a whole; (iii) the Company, the MHC and the Bank shall not have been in default (nor shall an event have occurred which, with notice or lapse of time or both, would constitute a default) under any provision of + + 29 + + any agreement or instrument relating to any outstanding indebtedness; (iv) no action, suit or proceeding, at law or in equity or before or by any federal or state commission, board or other administrative agency, shall be pending or, to the knowledge of the Company, the MHC or the Bank, threatened against the Company, the MHC or the Bank or affecting any of their properties wherein an unfavorable decision, ruling or finding would materially and adversely affect the business, operations, financial condition or income of the Company, the MHC and the Bank taken as a whole; and (v) the Shares have been qualified or registered for offering and sale or exempted therefrom under the securities or blue sky laws of the jurisdictions as the Agent shall have reasonably requested and as agreed to by the Company, the MHC and the Bank. + + (g) Concurrently with the execution of this Agreement, the Agent shall receive a letter from The Accounting & Consulting Group L.L.P. dated as of the date of the Prospectus and addressed to the Agent: (i) confirming that The Accounting & Consulting Group L.L.P. is a firm of independent public accounts within the meaning of Rule 101 of the Code of Professional Ethics of the American Institute of Certified Public Accountants and applicable regulations of the OTS and stating in effect that in its opinion the consolidated financial statements, schedules and related notes of the Bank as of September 30, 1999 and 1998 and for each of the three years in the period ended September 30, 1998, as are included in the Prospectus and covered by their opinion included therein, comply as to form in all material respects with the applicable accounting requirements and related published rules and regulations of the OTS and the 1933 Act; (ii) stating in effect that, on the basis of certain agreed upon procedures (but not an audit in accordance with generally accepted auditing standards) consisting of a reading of the latest available unaudited interim consolidated financial statements of the Bank prepared by the Bank, a reading of the minutes of the meetings of the Board of Directors and members of the Bank and consultations with officers of the Bank responsible for financial and accounting matters, nothing came to their attention which caused them to believe that: (A) the unaudited financial statements included in the Prospectus are not in conformity with the 1933 Act, applicable accounting requirements of the OTS and generally accepted accounting principles applied on a basis substantially consistent with that of the audited financial statements included in the Prospectus; or (b) during the period from the date of the latest unaudited consolidated financial statements included in the Prospectus to a specified date not more than three business days prior to the date of the Prospectus, except as has been described in the Prospectus, there was any increase in borrowings, other than normal deposit fluctuations, by the Bank; or (c) there was any decrease in the consolidated net assets of the Bank at the date of such letter as compared with amounts + + 30 + + shown in the latest unaudited consolidated statement of condition included in the Prospectus; and (iii) stating that, in addition to the audit referred to in their opinion included in the Prospectus and the performance of the procedures referred to in clause (ii) of this subsection (f), they have compared with the general accounting records of the Bank, which are subject to the internal controls of the Bank, the accounting system and other data prepared by the Bank, directly from such accounting records, to the extent specified in such letter, such amounts and/or percentages set forth in the Prospectus as the Agent may reasonably request; and they have reported on the results of such comparisons. + + (h) At the Closing Date, the Agent shall receive a letter dated the Closing Date, addressed to the Agent, confirming the statements made by The Accounting & Consulting Group L.L.P. in the letter delivered by it pursuant to subsection (f) of this Section 7, the "specified date" referred to in clause (ii) of subsection (f) + + + + + + thereof to be a date specified in such letter, which shall not be more than three business days prior to the Closing Date. + + (i) At the Closing Date, the Agent shall receive a letter from RP Financial LC, dated the date thereof and addressed to counsel for the Agent (i) confirming that said firm is independent of the Company, the MHC and the Bank and is experienced and expert in the area of corporate appraisals within the meaning of Title 12 of the Code of Federal Regulations, Section 563b.7(f)(1)(i), (ii) stating in effect that the Appraisal prepared by such firm complies in all material respects with the applicable requirements of Title 12 of the Code of Federal Regulations, and (iii) further stating that their opinion of the aggregate pro forma market value of the Company, the MHC and the Bank expressed in their Appraisal dated as of December __, 1999, and most recently updated, remains in effect. + + (j) The Company, the MHC and the Bank shall not have sustained since the date of the latest financial statements included in the Prospectus any material loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Registration Statement and Prospectus and since the respective dates as of which information is given in the Registration Statement and Prospectus, there shall not have been any change in the long- term debt of the Company, the MHC or the Bank other than debt incurred in relation to the purchase of Shares by the Bank's Eligible Plans, or any change, or any development involving a prospective change, in or affecting the general affairs, management, financial position, stockholders' equity or results of operations of the Company or the Bank, otherwise than as set forth or + + 31 + + contemplated in the Registration Statement and Prospectus, the effect of which, in any such case described above, is in the Agent's reasonable judgment sufficiently material and adverse as to make it impracticable or inadvisable to proceed with the Subscription Offering or the delivery of the Shares on the terms and in the manner contemplated in the Prospectus. + + (k) At or prior to the Closing Date, the Agent shall receive: (i) a copy of the letters from the OTS approving the MHC Application and authorizing the use of the Prospectus; (ii) a copy of the order from the Commission declaring the Registration Statement effective; (iii) certificate of good standing from the OTS evidencing the good standing of the Company; (iv) a certificate from the FDIC evidencing the Bank's insurance of accounts; (v) a certificate of the FHLB-Dallas evidencing the Bank's membership thereof; (vi) a certificate from the OTS evidencing the Company's and the MHC's standing as registered savings and loan holding companies; (vii) a copy of the Bank's federal stock charter; and (viii) a copy of the Company's federal charter; and (viii) a copy of the MHC's federal charter. + + (l) Subsequent to the date hereof, there shall not have occurred any of the following: (i) a suspension or limitation in trading in securities generally on the New York Stock Exchange or in the over-the-counter market, or quotations halted generally on the Nasdaq, or minimum or maximum prices for trading have been fixed, or maximum ranges for prices for securities have been required by either of such exchanges or the NASD or by order of the Commission or any other governmental authority; (ii) a general moratorium on the operations of commercial banks, federal savings institutions or a general moratorium on the withdrawal of deposits from commercial banks or federal savings institutions declared by federal authorities; (iii) the engagement by the United States in hostilities which have resulted in the declaration, on or after the date hereof, of a national emergency or war; or (iv) a material decline in the price of equity or debt securities if the effect of such a declaration or decline, in the Agent's reasonable judgement, makes it impracticable or inadvisable to proceed with the Offering or the delivery of the shares on the terms and in the manner contemplated in the Registration Statement and the Prospectus. + + (m) At or prior to the Closing Date, counsel to the Agent shall have been furnished with such documents and opinions as they may reasonably require for the purpose of enabling them to pass upon the sale of the Shares as herein contemplated and related proceedings or in order to evidence the occurrence or completeness of any of the representations or warranties, or the fulfillment of any of the conditions, herein contained; and all proceedings taken by the Company, the MHC or the Bank in connection with the Offering and the sale + + 32 + + + + + + of the Shares as herein contemplated shall be satisfactory in form and substance to the Agent and its counsel. + + Section 8. Indemnification. + + (a) The Company, the MHC and the Bank jointly and severally agree to indemnify and hold harmless the Agent, its respective officers and directors, employees and agents, and each person, if any, who controls the Agent within the meaning of Section 15 of the 1933 Act or Section 20(a) of the 1934 Act, against any and all loss, liability, claim, damage or expense whatsoever (including but not limited to settlement expenses), joint or several, that the Agent or any of them may suffer or to which the Agent and any such persons may become subject under all applicable federal or state laws or otherwise, and to promptly reimburse the Agent and any such persons upon written demand for any expense (including reasonable fees and disbursements of counsel) incurred by the Agent or any of them in connection with investigating, preparing or defending any actions, proceedings or claims (whether commenced or threatened) to the extent such losses, claims, damages, liabilities or actions: (i) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment or supplement thereto), preliminary or final Prospectus (or any amendment or supplement thereto), the MHC Application (or any amendment or supplement thereto), or any instrument or document executed by the Company, the MHC or the Bank or based upon written information supplied by the Company, the MHC or the Bank filed in any state or jurisdiction to register or qualify any or all of the Shares or to claim an exemption therefrom, or provided to any state or jurisdiction to exempt the Company as a broker-dealer or its officers, directors and employees as broker-dealers or agent, under the securities laws thereof (collectively, the "Blue Sky Application"), or any document, advertisement, oral statement or communication ("Sales Information") prepared, made or executed by or on behalf of the Company, the MHC or the Bank with their consent or based upon written or oral information furnished by or on behalf of the Company, the MHC or the Bank, whether or not filed in any jurisdiction, in order to qualify or register the Shares or to claim an exemption therefrom under the securities laws thereof; (ii) arise out of or are based upon the omission or alleged omission to state in any of the foregoing documents or information, a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; or (iii) arise from any theory of liability whatsoever relating to or arising from or based upon the Registration Statement (or any amendment or supplement thereto), preliminary or final Prospectus (or any amendment or supplement thereto), the MHC Application + + 33 + + (or any amendment or supplement thereto), any Blue Sky Application or Sales Information or other documentation distributed in connection with the Offering; provided, however, that no indemnification is required under this paragraph (a) to the extent such losses, claims, damages, liabilities or actions arise out of or are based upon any untrue material statement or alleged untrue material statement in, or material omission or alleged material omission from, the Registration Statement (or any amendment or supplement thereto), preliminary or final Prospectus (or any amendment or supplement thereto), the MHC Application (or any amendment or supplement thereto), any Blue Sky Application or Sales Information made in reliance upon and in conformity with information furnished in writing to the Company, the MHC or the Bank by the Agent or its counsel regarding the Agent provided, that it is agreed and understood that the only information furnished in writing to the Company, the MHC or the Bank by the Agent regarding the Agent is set forth in the Prospectus; and, provided further, that such indemnification shall be to the extent permitted by the Commissioner, the OTS, the FDIC and the Board of Governors of the Federal Reserve. The indemnification provided for in this paragraph (a) shall not be applicable with respect to any loss, liability, claim, damage, or expense whatsoever if it is determined by final judgment of a court having jurisdiction over the matter that such loss, liability, claim, damage or expense was primarily a result of the Agent's willful misconduct or gross negligence. + + (b) The Agent agrees to indemnify and hold harmless the Company, the MHC and the Bank, their directors and officers and each person, if any, who controls the Company, the MHC or the Bank within the meaning of Section 15 of the 1933 Act or Section 20(a) of the 1934 Act against any and all loss, liability, claim, damage or expense whatsoever (including but not limited to settlement expenses), joint or several, which they, or any of them, may suffer or to which they, or any of them may become subject under all applicable federal and state laws or otherwise, and to promptly reimburse the Company, the MHC, the Bank, and any such persons upon written demand for any expenses (including + + + + + + reasonable fees and disbursements of counsel) incurred by them, or any of them, in connection with investigating, preparing or defending any actions, proceedings or claims (whether commenced or threatened) to the extent such losses, claims, damages, liabilities or actions: (i) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment or supplement thereto), the MHC Application (or any amendment or supplement thereto), the preliminary or final Prospectus (or any amendment or supplement thereto), any Blue Sky Application or Sales Information, (ii) are based upon the omission or alleged omission to state in any of the foregoing documents a material fact required to be stated therein + + 34 + + or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, or (iii) arise from any theory of liability whatsoever relating to or arising from or based upon the Registration Statement (or any amendment or supplement thereto), preliminary or final Prospectus (or any amendment or supplement thereto), the MHC Application (or any amendment or supplement thereto),or any Blue Sky Application or Sales Information or other documentation distributed in connection with the Offering; provided, however, that the Agent's obligations under this Section 8(b) shall exist only if and only to the extent (i) that such untrue statement or alleged untrue statement was made in, or such material fact or alleged material fact was omitted from, the Registration Statement (or any amendment or supplement thereto), the preliminary or final Prospectus (or any amendment or supplement thereto), the MHC Application (or any amendment or supplement thereto), or any Blue Sky Application or Sales Information in reliance upon and in conformity with information furnished in writing to the Company, the MHC or the Bank by the Agent or its counsel regarding the Agent, provided, that it is agreed and understood that the only information furnished in writing to the Company, the MHC or the Bank by the Agent regarding the Agent is set forth in the Prospectus. The indemnification provided for in this Section 8 (b) shall not be applicable with respect to any loss, liability, claim, damage, or expense whatsoever if it is determined by final judgment of a court having jurisdiction over the matter that such loss, liability, claim, damage or expense was primarily a result of the Company's, the MHC's or the Bank's willful misconduct or gross negligence. + + (c) Each indemnified party shall give prompt written notice to each indemnifying party of any action, proceeding, claim (whether commenced or threatened), or suit instituted against it in respect of which indemnity may be sought hereunder, but failure to so notify an indemnifying party shall not relieve it from any liability which it may have on account of this Section 8 or otherwise. An indemnifying party may participate at its own expense in the defense of such action. In addition, if it so elects within a reasonable time after receipt of such notice, an indemnifying party, jointly with any other indemnifying parties receiving such notice, may assume defense of such action with counsel chosen by it and approved by the indemnified parties that are defendants in such action, unless such indemnified parties reasonably object to such assumption on the ground that there may be legal defenses available to them that are different from or in addition to those available to such indemnifying party. If an indemnifying party assumes the defense of such action, the indemnifying parties shall not be liable for any fees and expenses of counsel for the indemnified parties incurred thereafter in connection with such action, proceeding or claim, other than reasonable costs + + 35 + + of investigation. In no event shall the indemnifying parties be liable for the fees and expenses of more than one separate firm of attorneys (and any special counsel that said firm may retain) for each indemnified party in connection with any one action, proceeding or claim or separate but similar or related actions, proceedings or claims in the same jurisdiction arising out of the same general allegations or circumstances. + + (d) The agreements contained in this Section 8 and in Section 9 hereof and the representations and warranties of the Company, the MHC and the Bank set forth in this Agreement shall remain operative and in full force and effect regardless of: (i) any investigation made by or on behalf of agent or their officers, directors or controlling persons, agent or employees or by or on behalf of the Company, the MHC or the Bank or any officers, directors or controlling persons, agent or employees of the Company, the MHC or the Bank; (ii) delivery of and payment hereunder for the Shares; or (iii) any termination of this + + + + + + Agreement. + + Section 9. Contribution. In order to provide for just and equitable contribution in circumstances in which the indemnification provided for in Section 8 is due in accordance with its terms but is for any reason held by a court to be unavailable from the Company, the MHC, the Bank or the Agent, the Company, the MHC, the Bank and the Agent shall contribute to the aggregate losses, claims, damages and liabilities (including any investigation, legal and other expenses incurred in connection with, and any amount paid in settlement of, any action, suit or proceeding of any claims asserted, but after deducting any contribution received by the Company, the MHC, the Bank or the Agent from persons other than the other party thereto, who may also be liable for contribution) in such proportion so that the Agent is responsible for that portion represented by the percentage that the fees paid to the Agent pursuant to Section 2 of this Agreement (not including expenses) bears to the gross proceeds received by the Company from the sale of the Shares in the Offering, and the Company, the MHC and the Bank shall be responsible for the balance. If, however, the allocation provided above is not permitted by applicable law or if the indemnified party failed to give the notice required under Section 8 above, then each indemnifying party shall contribute to such amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative fault of the Company, the MHC and the Bank on the one hand and the Agent on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions, proceedings or claims in respect thereto), but also the relative benefits received by the Company, the MHC and the Bank on the one hand and the Agent on the other from the Offering (before deducting expenses). The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company, the MHC and/or the Bank on the one hand or the Agent on the other and the parties' relative intent, good faith, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company, the MHC, the Bank and the Agent agree that it would not be just and equitable if contribution pursuant to this Section 9 were determined by pro-rata allocation or by any other + + 36 + +method of allocation which does not take into account the equitable considerations referred to above in this Section 9. The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions, proceedings or claims in respect thereof) referred to above in this Section 9 shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action, proceeding or claim. It is expressly agreed that the Agent shall not be liable for any loss, liability, claim, damage or expense or be required to contribute any amount which in the aggregate exceeds the amount paid (excluding reimbursable expenses) to the Agent under this Agreement. It is understood that the above stated limitation on the Agent's liability is essential to the Agent and that the Agent would not have entered into this Agreement if such limitation had not been agreed to by the parties to this Agreement. No person found guilty of any fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not found guilty of such fraudulent misrepresentation. The obligations of the Company, the MHC and the Bank under this Section 9 and under Section 8 shall be in addition to any liability which the Company and the Bank may otherwise have. For purposes of this Section 9, each of the Agent's, the Company's, the MHC or the Bank's officers and directors and each person, if any, who controls the Agent or the Company or the MHC or the Bank within the meaning of the 1933 Act and the 1934 Act shall have the same rights to contribution as the Agent, the Company, the MHC or the Bank. Any party entitled to contribution, promptly after receipt of notice of commencement of any action, suit, claim or proceeding against such party in respect of which a claim for contribution may be made against another party under this Section 9, will notify such party from whom contribution may be sought, but the omission to so notify such party shall not relieve the party from whom contribution may be sought from any other obligation it may have hereunder or otherwise than under this Section 9. + + Section 10. Survival of Agreements, Representations and Indemnities. The respective indemnities of the Company, the MHC, the Bank and the Agent and the representations and warranties and other statements of the Company, the MHC, the Bank and the Agent set forth in or made pursuant to this Agreement shall remain in full force and effect, regardless of any termination or cancellation of this Agreement or any investigation made by or on behalf of the Agent, the Company, the MHC, the Bank or any controlling person referred to in Section 8 hereof, and shall survive the issuance of the Shares, and any successor or assign of the Agent, the Company, the MHC, the Bank, and any such controlling person shall be entitled to the benefit of the respective agreements, indemnities, warranties and representations. + + Section 11. Termination. The Agent may terminate this Agreement by giving the notice indicated below in this Section 11 at any time after this Agreement becomes effective as follows: + + (a) In the event the Company fails to sell the required minimum number of the Shares by _________, 2000, and in accordance with the provisions of the Plan or as required by the MHC Regulations, and applicable law, this Agreement shall terminate upon refund by the Company to each person who has subscribed for or ordered any of the Shares the full amount which it may + + + + + + 37 + + have received from such person, together with interest as provided in the Prospectus, and no party to this Agreement shall have any obligation to the other hereunder, except for payment by the Company, the MHC and/or the Bank as set forth in Sections 2(a), 6, 8 and 9 hereof. + + (b) If any of the conditions specified in Section 7 shall not have been fulfilled when and as required by this Agreement unless waived in writing, or by the Closing Date, this Agreement and all of the Agent's obligations hereunder may be cancelled by the Agent by notifying the Company, the MHC and the Bank of such cancellation in writing or by telegram at any time at or prior to the Closing Date, and any such cancellation shall be without liability of any party to any other party except as otherwise provided in Sections 2(a), 6, 8 and 9 hereof. + + (c) If the Agent elects to terminate this Agreement as provided in this Section, the Company, the MHC and the Bank shall be notified promptly by telephone or telegram, confirmed by letter. + + The Company, the MHC and the Bank may terminate this Agreement in the event the Agent is in material breach of the representations and warranties or covenants contained in Section 5 and such breach has not been cured after the Company, the MHC and the Bank have provided the Agent with notice of such breach. + + This Agreement may also be terminated by mutual written consent of the parties hereto. + + Section 12. Notices. All communications hereunder, except as herein otherwise specifically provided, shall be mailed in writing and if sent to the Agent shall be mailed, delivered or telegraphed and confirmed to Charles Webb & Company, a Division of Keefe, Bruyette & Woods, Inc., 211 Bradenton, Dublin, Ohio 43017-3514, Attention: Patricia A. McJoynt, Executive Vice President (with a copy to Silver, Freedman & Taff, L.L.P., Attention: Martin L. Meyrowitz, P.C.) and, if sent to the Company, the MHC and the Bank, shall be mailed, delivered or telegraphed and confirmed to the Company, the MHC and the Bank at 500 10th Street, Alamogordo, New Mexico 88310-0690, Attention: Miles Ledgewood, President (with a copy to Luse Lehman Gorman Pomerenk & Schick, Attention: Eric Luse). + + Section 13. Parties. The Company, the MHC and the Bank shall be entitled to act and rely on any request, notice, consent, waiver or agreement purportedly given on behalf of the Agent when the same shall have been given by the undersigned. The Agent shall be entitled to act and rely on any request, notice, consent, waiver or agreement purportedly given on behalf of the Company, the MHC or the Bank, when the same shall have been given by the undersigned or any other officer of the Company, the MHC or the Bank. This Agreement shall inure solely to the benefit of, and shall be binding upon, the Agent, the Company, the MHC, the Bank, and their respective successors and assigns, and no other person shall have or be construed to have any legal or equitable right, remedy + + 38 + +or claim under or in respect of or by virtue of this Agreement or any provision herein contained. It is understood and agreed that this Agreement is the exclusive agreement among the parties hereto, and supersedes any prior agreement among the parties and may not be varied except in writing signed by all the parties. + + Section 14. Closing. The closing for the sale of the Shares shall take place on the Closing Date at such location as mutually agreed upon by the Agent and the Company, the MHC and the Bank. At the closing, the Company, the MHC and the Bank shall deliver to the Agent in next day funds the commissions, fees and expenses due and owing to the Agent as set forth in Sections 2 and 6 hereof and the opinions and certificates required hereby and other documents deemed reasonably necessary by the Agent shall be executed and delivered to effect the sale of the Shares as contemplated hereby and pursuant to the terms of the Prospectus. + + Section 15. Partial Invalidity. In the event that any term, provision or covenant herein or the application thereof to any circumstance or situation shall be invalid or unenforceable, in whole or in part, the remainder hereof and the application of said term, provision or covenant to any other circumstances or situation shall not be affected thereby, and each term, provision or covenant herein shall be valid and enforceable to the full extent permitted by law. + + Section 16. Construction. This Agreement shall be construed in accordance with the laws of the State of Kansas. + + Section 17. Counterparts. This Agreement may be executed in separate counterparts, each of which so executed and delivered shall be an original, but all of which together shall constitute but one and the same instrument. + + If the foregoing correctly sets forth the arrangement among the Company, the MHC, the Bank and the Agent, please indicate acceptance thereof in + + + + + +the space provided below for that purpose, whereupon this letter and the Agent's acceptance shall constitute a binding agreement. + + Section 18. Entire Agreement. This Agreement, including schedules and exhibits hereto, which are integral parts hereof and incorporated as though set forth in full, constitutes the entire agreement between the parties pertaining to the subject matter hereof superseding any and all prior or contemporaneous oral or prior written agreements, proposals, letters of intent and understandings, and cannot be modified, changed, waived or terminated except by a writing which expressly states that it is an amendment, modification or waiver, refers to this Agreement and is signed by the party + + 39 + +to be charged. No course of conduct or dealing shall be construed to modify, amend or otherwise affect any of the provisions hereof. + + Very truly yours, + +ALAMOGORDO FINANCIAL ALAMOGORDO FEDERAL SAVINGS AND CORPORATION LOAN ASSOCIATION + +By Its Authorized By Its Authorized Representative: Representative: + +- ---------------------------- --------------------------------- Miles Ledgerwood Miles Ledgerwood Chairman Chairman + +AF MUTUAL HOLDING COMPANY + +By Its Authorized Representative: + +- ---------------------------- Miles Ledgerwood Chairman + +Accepted as of the date first above written + +Charles Webb & Company, a Division Keefe, Bruyette & Woods, Inc. + +By Its Authorized Representative: + +- ----------------------------- Patricia A. McJoynt Executive Vice President + + 40 \ No newline at end of file diff --git a/full_contract_txt/ALCOSTORESINC_12_14_2005-EX-10.26-AGENCY AGREEMENT.txt b/full_contract_txt/ALCOSTORESINC_12_14_2005-EX-10.26-AGENCY AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..e45e59997e2a5b8fb1586fc6faade55361fe3782 --- /dev/null +++ b/full_contract_txt/ALCOSTORESINC_12_14_2005-EX-10.26-AGENCY AGREEMENT.txt @@ -0,0 +1,85 @@ +Exhibit 10.26 + +AGENCY AGREEMENT + +THIS AGENCY AGREEMENT, dated November 9, 2005 ("Agreement"), between General Electric Capital Corporation, a Delaware corporation (together with its successors and assigns, if any, "Lessor"), and Duckwall-Alco Stores, Inc., a Kansas corporation (the "Company"). Capitalized terms not defined herein shall have the meanings assigned to them in the Lease (as that term is defined below). + +RECITALS: + +WHEREAS, Lessor and the Company have entered into a Master Lease Agreement dated November 9, 2005 wherein Lessor, as the lessor, has agreed to lease certain items of equipment to the Company (the Master Lease Agreement and all Schedules entered into from time to time thereunder are hereinafter collectively referred to as the "Lease"; and all equipment leased thereunder are hereinafter collectively referred to as the "Equipment"); capitalized terms used herein but not otherwise defined shall have the meanings as provided in the Lease; and + +WHEREAS, Lessor desires to appoint the Company its agent to order, receive and, in the name and on behalf of Lessor, the Equipment; + +NOW, THEREFORE, in consideration of the above premises and the mutual promises contained herein, as well as other good and valuable considerations, the receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows: + +ARTICLE I GENERAL UNDERTAKING + +Section 1.01 Appointment. Lessor hereby appoints the Company, and the Company hereby agrees to accept such appointment, as the agent of Lessor, without any fee for acting as such agent, pursuant to the terms and conditions of this Agreement, for the purpose of ordering and, subject to the conditions set forth in Section's 2.01 and 2.05 hereof, accepting Equipment on Lessor's behalf for leasing to the Company under the Lease from the respective supplier thereof (each a "Supplier" and collectively, the "Suppliers"). It is specifically agreed that all of the power and authority vested to the Company herein shall be subject to any modifications as may from time to time be made by Lessor. + +Section 1.02 Powers. Except as may be otherwise expressly provided in this Agreement, the Company is hereby granted the authority to act, and hereby agrees to act, on behalf of Lessor and in the name of Lessor, to the extent necessary to carry out its duties under this Agreement. + +Section 1.03 Master Lease. This Agreement is entered into in connection with and subject to the terms of the Lease and in the event of a conflict between the terms of this Agreement and the Lease, the Lease shall control. The Company and Lessor may from time to time hereafter enter into Equipment Schedules to the Lease, and it is the intent of the parties that this Agreement facilitate the leasing of Equipment under the Lease. EXCEPT AS PROVIDED IN ANY OTHER AGREEMENT, NOTHING IN THIS AGREEMENT SHALL BE OR SHALL BE DEEMED TO BE, A COMMITMENT ON THE PART OF EITHER THE COMPANY OR LESSOR TO EXECUTE OR OTHERWISE ENTER INTO ANY EQUIPMENT SCHEDULES AFTER THE DATE OF THIS AGREEMENT. + +ARTICLE II DUTIES OF AGENT + +Section 2.01 Equipment Orders. Upon the written acknowledgment by the Company and Lessor of each jointly approved purchase agreement, purchase order or invoice ("Purchase Order"), the Company, pursuant to the agency granted to it by Lessor in Article I hereof, may order, receive, accept the Equipment to be leased in accordance with the Economic Terms (as hereafter defined and described). + +Upon and as of the date of acceptance of the Equipment by the Company and satisfaction of the conditions precedent provided for in the Lease: (a) Lessor shall be unconditionally obligated to purchase such Equipment pursuant to the terms of the applicable Purchase Order and to lease such Equipment to the Company pursuant to the terms and conditions of the Lease and the applicable completed Schedule; and (b) the Company shall be unconditionally obligated to lease such Equipment from Lessor pursuant to the terms and conditions of the Lease and the applicable completed Schedule. The leasing of Equipment pursuant to this Agreement shall be in accordance with the Economic Terms set forth in Section 2.05 hereof, and upon delivery of the Equipment from any Supplier shall be deemed to be leased pursuant to this Agreement and the Lease and be subject to all of the provisions of the Lease, including without limitation, the insurance and indemnity provisions of the Lease. Notwithstanding any provision to the contrary herein, the Company's ability to act as Lessor's agent hereunder, and to unconditionally obligate Lessor to purchase Equipment pursuant to such agency, shall be limited by the following: (i) the Company must disclose to all Suppliers that it is ordering the Equipment as agent for Lessor; (ii) all of the Equipment ordered and/or accepted hereunder must meet at least one of the general description categories contained in Section 2:05; (iii) the aggregate Purchase Price for all Equipment purchased in connection with any Schedule must be less than, or equal to, the Maximum Aggregate Capitalized Lessor's Cost specified in Section 2:05; (iv) the Equipment must be delivered to, and accepted by, the Company on or before the Last Delivery Date specified in Section 2:05; (v) the Purchase Price of each unit of Equipment must not be more than the then current Fair Market Value of such Equipment; (vi) each unit of Equipment must qualify for all the Tax Benefits described in the applicable Schedule in the hands of Lessor upon the Company's acceptance thereof from the Supplier and (vii) with respect to any documentation, technical or confidential business information and/or software relating to the Equipment (collectively, "Software"), the Purchase Order will grant Lessor a license to use the Software and will allow Lessor to grant a sublicense to the Company to use such Software pursuant to the Lease and will allow Lessor to grant a sublicense to a third party after a termination or the expiration of the Lease in the event the Company does not elect to exercise any purchase option that may be provided for in the Lease; and (viii) all conditions precedent set forth in the Lease, including the delivery and execution of the Schedule and the Certificate of Acceptance, must be completed by no later than the Last Basic Term Commencement Date specified in Section 2.05. + + + + + +The Company additionally agrees that all Purchase Orders executed by the Company as Lessor's agent hereunder shall: (A) condition Lessor's obligation to pay for and purchase the Equipment on the Company's acceptance of such Equipment; (B) not permit passage of title or risk of loss for the Equipment earlier than such acceptance by the Company; (C) not permit the Supplier or any other person or entity to retain any security in, or lien on, any of the Equipment; and (D) otherwise be on terms and conditions acceptable to Lessor in its sole discretion. + +Section 2.02 Receipt of and Payment for Equipment. With respect to any Equipment ordered by the Company as agent for Lessor, the Company agrees to perform all obligations of the purchaser in the time and manner required by the applicable Purchase Order. + +Section 2.03 Payment of Purchase Price. On or before the Lease Commencement Date for any Schedule, the Company shall present to Lessor documentation ("Purchase Documentation"), in form and substance satisfactory to Lessor in its sole discretion, which (i) describes all units of Equipment ordered, received and accepted by the Company as agent for Lessor in connection with such Schedule, and (ii) if Company has paid any Supplier for any of the Equipment, includes evidence of the Purchase Price paid to Supplier for each such unit of Equipment and of passage of title thereto to Lessor. Upon the latter of (A) Lessor's receipt of the Purchase Documentation or (B) the satisfaction of all conditions precedent on or after the applicable Lease Commencement Date, Lessor shall pay the Supplier or reimburse the Company, as the case may be, for the aggregate Purchase Price for all Equipment purchased hereunder in connection with such schedule. + +Section 2.04 Books and Records. The Company shall maintain full and accurate books and records of all Equipment orders, receipts and All such books and records shall be maintained in a form acceptable to Lessor in its sole discretion. Such books and records shall be open for inspection and examination by Lessor and its respective representatives and/or accountants during the Company's normal business hours. + +Section 2.05 Economic Terms. The Company and the Lessor hereby agree that Schedules entered into pursuant to this Agency Agreement shall conform with the following "Economic Terms": + +1. Maximum Aggregate Capitalized Lessor's Cost: $14,500,000.00 + +2. Basic Term Lease Rate Factor: To be mutually agreed upon by Company and Lessor + +3. Basic Term (No. of Months): To be mutually agreed upon by Company and Lessor + +4. Equipment Type: To be mutually agreed upon by Company and Lessor + +5. Agency Agreement Expiration Date and Last Delivery Date: October 31, 2006 + +ARTICLE III TERMINATION + +Section 3.01 Termination. + +(a) So long as no default exists and is continuing hereunder or under the Lease, either party may terminate this Agreement at any time upon ____________ (______30________) days written notice to the other party; provided however that such termination shall not act as a termination of any Equipment leased hereunder. + +(b) In the event the Company is in default hereunder or under the Lease, Lessor may elect to terminate this Agreement immediately, which shall be effective upon the receipt of written notice thereof by the Company. + +(c) Any termination under this Section 3.01 shall automatically result in the immediate revocation of all authority vested in the Company under this Agreement to order, accept or pay for any Equipment on behalf of Lessor. + +IN WITNESS WHEREOF, the parties hereto have caused their duly authorized representatives to execute and deliver this Agreement on the date first above written. + +General Electric Capital Corporation Duckwall-Alco Stores, Inc. By: /s/ Susan Lyndon By: /s/ Richard A. Mansfield + +Title: Manager Portfolio Admin Title: V.P./CFO + +AGENCY AGREEMENT INSTRUCTIONS BEFORE EQUIPMENT IS ORDERED: + + • When issuing a Purchase Order or Sales Agreement for Equipment in connection with the Agency Agreement, incorporate the following in the Purchase Order or Sales Agreement: + + Duckwall-Alco Stores, Inc. is ordering the following equipment as Agent for: + + + + + + General Electric Capital Corporation 311 North Bayshore Drive Safety Harbor, FL 34695 Attn: Teresa Schafer + +• All invoices should indicate that General Electric Capital Corporation is the "Sold to" party at the above address, and that Duckwall-Alco Stores, Inc. is the "Ship to" party for delivery. + +• The invoices should be mailed directly to General Electric Capital Corporation. Also, all invoices should reference the appropriate Purchase Order/Sales Agreement Number. + +General Electric Capital Corporation will also require a complete set of Lease documentation prior to funding. These documents may include a Schedule and a Certificate of Acceptance. The full terms and conditions of the lease contract are set forth in the Master Lease Agreement and Equipment Schedule. \ No newline at end of file diff --git a/full_contract_txt/ALLIANCEBANCORPINCOFPENNSYLVANIA_10_18_2006-EX-1.2-AGENCY AGREEMENT.txt b/full_contract_txt/ALLIANCEBANCORPINCOFPENNSYLVANIA_10_18_2006-EX-1.2-AGENCY AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..72f4eff343407915059827f07af75e6be5625ff3 --- /dev/null +++ b/full_contract_txt/ALLIANCEBANCORPINCOFPENNSYLVANIA_10_18_2006-EX-1.2-AGENCY AGREEMENT.txt @@ -0,0 +1,755 @@ +Exhibit 1.2 + +Up to 2,445,223 Shares + +(subject to increase to up to 2,812,006 shares in the event of an increase in the pro forma market value of the Company's Common Stock) + +Alliance Bancorp, Inc. of Pennsylvania (a federal stock holding company) + +Common Stock (par value $.01 per share) + +AGENCY AGREEMENT + +November ___, 2006 + +SANDLER O'NEILL & PARTNERS, L.P. 919 Third Avenue, 6 Floor New York, New York 10022 + +Ladies and Gentlemen: + +Greater Delaware Valley Holdings, A Mutual Company, a Pennsylvania-chartered mutual holding company (the "PA MHC"), Alliance Mutual Holding Company, a federal mutual savings and loan holding company in formation (the "Federal MHC"), Alliance Bancorp, Inc. of Pennsylvania, a federal stock holding company in formation (the "Company"), and Greater Delaware Valley Savings Bank d/b/a Alliance Bank, a Pennsylvania-chartered stock savings bank (the "Bank"), hereby confirm their agreement with Sandler O'Neill & Partners, L.P. ("Sandler O'Neill" or the "Agent") with respect to the offer and sale by the Company of up to 2,445,223 shares (subject to increase to up to 2,812,006 shares in the event of an increase in the pro forma market value of the Company's common stock) of the Company's common stock, par value $.01 per share (the "Common Stock"). The shares of Common Stock to be sold by the Company in the Offerings (as defined below) are hereinafter called the "Securities." + +The PA MHC and the Bank have determined to undertake a reorganization pursuant to which the Company will be created as a mid-tier holding company, the outstanding capital stock of the Bank will be exchanged for shares of the Common Stock, and the PA MHC will convert from a Pennsylvania-chartered mutual holding company to a federally-chartered mutual holding company under the name Alliance Mutual Holding Company, all in accordance with the Agreement and Plan + +1 + +th + + + + + +of Reorganization, dated as of June 21, 2006, as may be amended from time to time pursuant to the terms thereof. Concurrently therewith, the Securities are being offered for sale in the Offerings (as defined below) in accordance with the Plan of Additional Stock Issuance dated June 21, 2006 as may be amended from time to time pursuant to the terms thereof. The Agreement and Plan of Reorganization and the Plan of Additional Stock Issuance are hereinafter referred to collectively as the "Plans." The PA MHC and Federal MHC are hereinafter referred to collectively as the "MHCs." + +Pursuant to the Plans, the Company will offer to certain depositors of the Bank and to the Bank's tax qualified employee benefit plans, including the Bank's employee stock ownership plan (the "ESOP") (collectively, the "Employee Plans"), rights to subscribe for the Securities in a subscription offering (the "Subscription Offering"). To the extent Securities are not subscribed for in the Subscription Offering, such Securities may be offered to certain members of the general public and to other persons in a community offering (the "Community Offering"), with preference given first to natural persons and trusts of natural persons residing in Delaware and Chester Counties, Pennsylvania and then to the Bank's stockholders as of ___________, 2006. The Community Offering, which together with the Subscription Offering, as each may be extended or reopened from time to time, is herein referred to as the "Subscription and Community Offering," may be commenced concurrently with, during or after, the Subscription Offering. It is currently anticipated that any Securities not subscribed for in the Subscription and Community Offering will be offered, subject to Section 2 hereof, in a syndicated community offering (the "Syndicated Community Offering"). The Subscription and Community Offering and the Syndicated Community Offering are hereinafter referred to collectively as the "Offerings." The conversion of the PA MHC from a state-chartered mutual holding company to a federally-chartered mutual holding company, the formation of the Company, the exchange of the capital stock of the Bank for capital stock of the Company and the Offerings are hereinafter referred to collectively as the "Reorganization and Additional Stock Issuance." As a result of the Reorganization and Additional Stock Issuance, the Bank, which is currently 80.02% owned by the PA MHC, will become a wholly-owned subsidiary of the Company and the Company will be 55% owned by the Federal MHC. The Securities may be offered to the general public in a public offering (the "Public Offering") in lieu of or subsequent to the Syndicated Community Offering. If there is a Public Offering, the Public Offering will be governed by a separate definitive purchase agreement as described in Section 2 hereof. It is acknowledged that the number of Securities to be sold in the Offerings may be increased or decreased in accordance with the Plans. If the number of Securities is increased or decreased, the term "Securities" shall mean such greater or lesser number, where applicable. In the event that a mid-tier holding company form of organization is not utilized, all pertinent terms of this Agreement will apply to the sale of the Bank's common stock. + +The Company has filed with the Securities and Exchange Commission (the "Commission") a registration statement on Form S-1 (No. 333- 136853), including a related prospectus, for the registration of the Securities under the Securities Act of 1933, as amended (the "Securities Act"), has filed such amendments thereto, if any, and such amended prospectuses as may have been required to the date hereof by the Commission in order to declare such registration statement effective, and will file such additional amendments thereto and such amended prospectuses and prospectus supplements as may hereafter be required. Such registration statement (as amended to date, if applicable, and as from time to time amended or supplemented hereafter) and the prospectuses constituting a part thereof (including in each case all documents incorporated or deemed to be incorporated by reference + +2 + + + + + +therein and the information, if any, deemed to be a part thereof pursuant to the rules and regulations of the Commission under the Securities Act, as from time to time amended or supplemented pursuant to the Securities Act or otherwise (the "Securities Act Regulations")), are hereinafter referred to as the "Registration Statement" and the "Prospectus," respectively, except that if any revised prospectus shall be used by the Company in connection with the Subscription and Community Offering or the Syndicated Community Offering which differs from the Prospectus on file at the Commission at the time the Registration Statement becomes effective (whether or not such revised prospectus is required to be filed by the Company pursuant to Rule 424(b) of the Securities Act Regulations), the term "Prospectus" shall refer to such revised prospectus from and after the time it is first provided to the Agent for such use. + +Concurrently with the execution of this Agreement, the Company is delivering to the Agent copies of the Prospectus of the Company to be used in the Offerings. Such Prospectus contains information with respect to the Bank, the Company, the MHCs and the Common Stock. + +SECTION 1. REPRESENTATIONS AND WARRANTIES. + +(a) The Company, the Bank and the MHCs jointly and severally represent and warrant to the Agent as of the date hereof as follows: + +(i) The Registration Statement has been declared effective by the Commission, no stop order has been issued with respect thereto and no proceedings therefor have been initiated or, to the knowledge of the Company, the MHCs and the Bank, threatened by the Commission. At the time the Registration Statement became effective and at the Closing Time referred to in Section 2 hereof, the Registration Statement complied and will comply in all material respects with the requirements of the Securities Act and the Securities Act Regulations and did not and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. The Prospectus, at the date hereof does not and at the Closing Time referred to in Section 2 hereof will not, include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, provided, however, that the representations and warranties in this subsection shall not apply to statements in or omissions from the Registration Statement or Prospectus made in reliance upon and in conformity with information with respect to the Agent furnished to the Company in writing by the Agent expressly for use in the Registration Statement or Prospectus (the "Agent Information," which the Company, the MHCs and the Bank acknowledge appears only in the sixth paragraph of the section "The Offering - Plan of Distribution and Marketing Arrangements" of the Prospectus.) + +(ii) At the time of filing the Registration Statement relating to the offering of the Securities and at the date hereof, the Company was not, and is not, an ineligible issuer, as defined in Rule 405 of the Securities Act Regulations. At the time of the filing of the Registration Statement and at the time of the use of any issuer free writing prospectus, as defined in Rule 433(h) of the Securities Act Regulations, the Company met the conditions required by Rules 164 and 433 of the Securities Act Regulations for the use of a free writing prospectus. If required to be filed, the Company has filed any issuer free writing + +3 + + + + + +prospectus related to the offered Securities at the time it is required to be filed under Rule 433 of the Securities Act Regulations and, if not required to be filed, will retain such free writing prospectus in the Company's records pursuant to Rule 433(g) of the Securities Act Regulations and if any issuer free writing prospectus is used after the date hereof in connection with the offering of the Securities the Company will file or retain such free writing prospectus as required by Rule 433 of the Securities Act Regulations. + +(iii) As of the Applicable Time, neither (i) the Issuer-Represented General Free Writing Prospectus(es) issued at or prior to the Applicable Time and the Statutory Prospectus, all considered together (collectively, the "General Disclosure Package"), nor (ii) any individual Issuer-Represented Limited-Use Free Writing Prospectus, when considered together with the General Disclosure Package, included any untrue statement of a material fact or omitted to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The preceding sentence does not apply to statements in or omissions from any Prospectus included in the Registration Statement relating to the offered Securities or any Issuer-Represented Free Writing Prospectus based upon and in conformity with written information furnished to the Company by the Agent specifically for use therein. As used in this paragraph and elsewhere in this Agreement: + +1. "Applicable Time" means each and every date when a potential purchaser submitted a subscription or otherwise committed to purchase Securities. + +2. "Statutory Prospectus", as of any time, means the Prospectus relating to the offered Securities that is included in the Registration Statement relating to the offered Securities immediately prior to that time, including any document incorporated by reference therein. + +3. "Issuer-Represented Free Writing Prospectus" means any "issuer free writing prospectus," as defined in Rule 433(h) of the Securities Act Regulations, relating to the offered Securities. The term does not include any writing exempted from the definition of prospectus pursuant to clause (a) of Section 2(a)(10) of the 1933 Act, without regard to Rule 172 or Rule 173 of the Securities Act Regulations. + +4. "Issuer-Represented General Free Writing Prospectus" means any Issuer-Represented Free Writing Prospectus that is intended for general distribution to prospective investors. + +5. "Issuer-Represented Limited-Use Free Writing Prospectus" means any Issuer-Represented Free Writing Prospectus that is not an Issuer-Represented General Free Writing Prospectus. The term Issuer-Represented Limited- Use Free Writing Prospectus also includes any "bona + +4 + + + + + +fide electronic road show," as defined in Rule 433 of the Securities Act Regulations, that is made available without restriction pursuant to Rule 433(d)(8)(ii) of the Securities Act Regulations or otherwise, even though not required to be filed with the Commission. + +(iv) Each Issuer-Represented Free Writing Prospectus, as of its date of first use and at all subsequent times through the completion of the Offerings and sale of the offered Securities or until any earlier date that the Company notified or notifies the Agent (as described in the next sentence), did not, does not and will not include any information that conflicted, conflicts or will conflict with the information contained in the Registration Statement relating to the offered Securities, including any document incorporated by reference therein that has not been superseded or modified. If at any time following the date of first use of an Issuer-Represented Free Writing Prospectus there occurred or occurs an event or development as a result of which such Issuer-Represented Free Writing Prospectus conflicted or would conflict with the information contained in the Registration Statement relating to the offered Securities or included or would include an untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances prevailing at that subsequent time, not misleading, the Company has notified or will notify promptly the Agent so that any use of such Issuer-Represented Free-Writing Prospectus may cease until it is amended or supplemented and the Company has promptly amended or will promptly amend or supplement such Issuer-Represented Free Writing Prospectus to eliminate or correct such conflict, untrue statement or omission. The foregoing two sentences do not apply to statements in or omissions from any Issuer-Represented Free Writing Prospectus based upon and in conformity with written information furnished to the Company by the Agent specifically for use therein. + +(v) The MHCs and the Company have filed with the Office of Thrift Supervision (the "OTS") an application for approval of their acquisition of the Bank (the "Holding Company Application") on Form H-(e)1 promulgated under the savings and loan holding company provisions of the Home Owners' Loan Act, as amended ("HOLA") and the regulations promulgated thereunder. The Holding Company Application includes a proxy statement for the special meeting of stockholders of the Bank called to approve the Agreement and Plan of Reorganization (the "Proxy Statement"). The MHCs and the Company have received written notice from the OTS of its approval of the Holding Company Application, such approval remains in full force and effect and no order has been issued by the OTS suspending or revoking such approval and no proceedings therefor have been initiated or threatened by the OTS. At the date of such approval and at the Closing Time referred to in Section 2, the Holding Company Application complied and will comply in all material respects with the applicable provisions of HOLA and the regulations promulgated thereunder. The Holding Company Application is truthful and accurate in all material respects. + +The Company has filed with the Pennsylvania Department of Banking (the "Department") an application for approval of its acquisition of the Bank (the "Application for Approval to Acquire a Savings Bank"). The Company has received written notice from the + +5 + + + + + +Department of its approval of the acquisition of the Bank, such approval remains in full force and effect and no order has been issued by the Department suspending or revoking such approval and no proceedings therefor have been initiated or threatened by the Department. At the date of such approval and at the Closing Time referred to in Section 2, the Application for Approval to Acquire a Savings Bank complied and will comply in all material respects with the applicable provisions of the Banking Code of 1965 of the Commonwealth of Pennsylvania and the regulations promulgated thereunder. The Application for Approval to Acquire a Savings Bank is truthful and accurate in all material respects. + +The Bank has filed with the Department an application for approval of the proposed merger between the Bank and Alliance Interim Savings Bank (the "Application for Approval to Merge or Consolidate"). The Bank has received written notice from the Department of its approval of the Application for Approval to Merge or Consolidate, such approval remains in full force and effect and no order has been issued by the Department suspending or revoking such approval and no proceedings therefor have been initiated or threatened by the Department. At the date of such approval and at the Closing Time referred to in Section 2, the Application for Approval to Merge or Consolidate complied and will comply in all material respects with the applicable provisions of the Banking Code of 1965 of the Commonwealth of Pennsylvania and the regulations promulgated thereunder. The Application for Approval to Merge or Consolidate is truthful and accurate in all material respects. + +The Bank and Alliance Interim Savings Bank have filed with the Federal Deposit Insurance Corporation (the "FDIC") an application for approval of the proposed merger between the Bank and Alliance Interim Savings Bank (the "Bank Merger Application"). The Bank and Alliance Interim Savings Bank have received written notice from the FDIC of its approval of the Bank Merger Application, such approval remains in full force and effect and no order has been issued by the FDIC suspending or revoking such approval and no proceedings therefor have been initiated or threatened by the FDIC. At the date of such approval and at the Closing Time referred to in Section 2, the Bank Merger Application complied and will comply in all material respects with the applicable provisions of the Bank Merger Act and the regulations promulgated thereunder. The Bank Merger Application is truthful and accurate in all material respects. + +(vi) Pursuant to the rules and regulations of the OTS, as from time to time amended or supplemented (the "OTS Regulations"), the Company has filed with the OTS an Application for Approval of a Minority Stock Issuance by a Mid-Tier Subsidiary of a Mutual Holding Company (Form MHC-2) and has filed such amendments thereto and supplementary materials as may have been required to the date hereof. The Form MHC-2, as amended to date, if applicable, and as from time to time amended or supplemented hereafter, is hereinafter referred to as the "MHC Application." The Company has received written notice from the OTS of its approval of the MHC Application, such approval remains in full force and effect and no order has been issued by the OTS suspending or revoking such approval and no proceedings therefor have been initiated or threatened by the OTS. At the date of such approval and at the Closing Time referred to in Section 2, the MHC Application + +6 + + + + + +complied and will comply in all material respects with the applicable provisions of the OTS Regulations. The MHC Application is truthful and accurate in all material respects. + +(vii) At the time of their use, the Proxy Statement and any other proxy solicitation materials will comply in all material respects with the applicable provisions of the OTS Regulations and will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The Company, the MHCs and the Bank have filed the Prospectus and any supplemental sales literature with the Commission and the OTS. The Prospectus and all supplemental sales literature, as of the date the Registration Statement became effective and at the Closing Time referred to in Section 2, complied and will comply in all material respects with the applicable requirements of the OTS Regulations, and the Securities Act Regulations and, at or prior to the time of their first use, will have received all required authorizations of the OTS and Commission for use in final form. + +(viii) None of the Commission, the OTS or any "Blue Sky" authority has, by order or otherwise, prevented or suspended the use of the Proxy Statement, the Prospectus or any supplemental sales literature authorized by the Company, the MHCs or the Bank for use in connection with the Offerings, and no proceedings for such purposes are pending or, to the knowledge of the Company, the MHCs or the Bank, threatened. + +(ix) The Offerings and other transactions contemplated hereby do not and will not require any material consent, approval, authorization or permit or filing with any other governmental agency or regulatory authority, except as disclosed in the Prospectus. + +(x) The Reorganization and Additional Stock Issuance has been approved by and the Plans have been duly adopted by the Boards of Directors of the Company, the Bank and the MHCs and such approval and adoption has not since been rescinded or revoked. At the Closing Time referred to in Section 2, the Company, the Bank and the MHCs will have completed the conditions precedent to the Reorganization and Additional Stock Issuance in accordance with the Plans, the applicable OTS Regulations and all other applicable laws, regulations, decisions and orders, including all material terms, conditions, requirements and provisions precedent to the Reorganization and Additional Stock Issuance imposed upon the Company, the Bank or the MHCs by the OTS, the FDIC, or any other regulatory authority, other than those which the regulatory authority permits to be completed after the Reorganization and Additional Stock Issuance. + +(xi) RP Financial, LC (the "Appraiser"), which prepared the valuation of the Bank as part of the Reorganization and Additional Stock Issuance, has advised the Company, the MHCs and the Bank in writing that it satisfies all requirements for an appraiser set forth in the OTS Regulations and any interpretations or guidelines issued by the OTS or its staff with respect thereto. + +(xii) Deloitte & Touche LLP, the accountants who audited and reported on the consolidated financial statements and supporting schedules of the Bank and its subsidiaries + +7 + + + + + +included in the Registration Statement, have advised the Company, the MHCs and the Bank in writing that they are independent public accountants within the meaning of the Code of Ethics of the American Institute of Certified Public Accountants (the "AICPA"), that they are registered with the Public Company Accounting Oversight Board ("PCAOB") and such accountants are, with respect to the Company, the MHCs and the Bank, independent certified public accountants as required by, and are not in violation of the auditors independence requirements of, the Securities Act, the Securities Act Regulations and OTS Regulations. + +(xiii) The only direct or indirect subsidiary of the Company upon completion of the Reorganization and Additional Stock Issuance will be the Bank; the only direct or indirect subsidiaries of the Bank are Alliance Delaware Corporation, 541 Corp., and Alliance Financial and Investment Services LLC (collectively, the "Subsidiaries"). Except for the Subsidiaries, none of the Company, the MHCs or the Bank, directly or indirectly, controls any other corporation, limited liability company, partnership, joint venture, association, trust or other business organization. + +(xiv) The consolidated financial statements and the related schedules and notes thereto included in the Registration Statement and the Prospectus present fairly the financial position of the Bank and its subsidiaries at the dates indicated and the results of operations, retained earnings, equity and cash flows for the periods specified, and comply as to form with the applicable accounting requirements of the Securities Act Regulations and the OTS Regulations; except as otherwise stated in the Registration Statement and Prospectus, said financial statements have been prepared in conformity with generally accepted accounting principles applied on a consistent basis; and the supporting schedules and tables included in the Registration Statement and Prospectus present fairly the information required to be stated therein. The other financial, statistical and pro forma information and related notes included in the Prospectus present fairly the information shown therein on a basis consistent with the audited and unaudited financial statements included in the Prospectus, and as to the pro forma adjustments, the adjustments made therein have been consistently applied on the basis described therein. + +(xv) Since the respective dates as of which information is given in the Registration Statement and the Prospectus, except as otherwise stated therein (A) there has been no material adverse change in the financial condition, results of operations, business affairs or prospects of the Company, the MHCs, the Bank and the Subsidiaries, considered as one enterprise, whether or not arising in the ordinary course of business, (B) except for transactions specifically referred to or contemplated in the Registration Statement and Prospectus, there have been no transactions entered into by the Company, the MHCs or the Bank, other than those in the ordinary course of business consistent with past practice, which are material with respect to the Company, the MHCs, the Bank and the Subsidiaries, considered as one enterprise, (C) the capitalization, liabilities, assets, properties and business of the Company, the MHCs and the Bank conform in all material respects to the descriptions contained in the Prospectus and none of the Company, the MHCs or the Bank has any material liabilities of any kind, contingent or otherwise, except as disclosed in the Registration Statement or the Prospectus and (D) none of the Company, the MHCs or the Bank will have issued any securities or incurred any liability or obligation, direct or + +8 + + + + + +contingent, or borrowed money, except borrowings in the ordinary course of business consistent with past practice from the same or similar sources and in similar amounts as indicated in the Prospectus. + +(xvi) The Company, upon completion of its formation, and in any event no later than Closing Time will be duly organized and validly existing as a federal stock holding company chartered under the laws of the United States of America with full corporate power and authority to own, lease and operate its properties, to conduct its business as described in the Registration Statement and the Prospectus, and to enter into and perform its obligations under this Agreement and the transactions contemplated hereby. The Company, upon completion of its formation, and in any event no later than the Closing Time will be duly qualified to transact business and in good standing under the laws of the United States of America, in the Commonwealth of Pennsylvania and in each other jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure to so qualify would not have a material adverse effect on the financial condition, results of operations, business affairs or prospects of the Company, the MHCs and the Subsidiaries, considered as one enterprise (a "Material Adverse Effect"). + +(xvii) Upon completion of the Offerings as described in the Prospectus, the issued and outstanding capital stock of the Company will be within the range as set forth in the Prospectus under "Capitalization" (except for subsequent issuances, if any, pursuant to reservations, agreements or employee benefit plans referred to in the Prospectus). The authorized capital stock of the Company consists of 15,000,000 shares of Common Stock and 5,000,000 shares of preferred stock, par value $.01 per share ("Company Preferred Stock"). No shares of Common Stock or Company Preferred Stock have been or will be issued prior to the Closing Time referred to in Section 2 hereof. At the date hereof and at the Closing Time, the Securities will have been duly authorized for issuance and, when issued and delivered by the Company pursuant to the Plans against payment of the consideration calculated as set forth in the Plans and stated on the cover page of the Prospectus, will be duly and validly issued and fully paid and nonassessable. The terms and provisions of the Common Stock and the other capital stock of the Company conform to all statements relating thereto contained in the Prospectus. The certificates representing the shares of Common Stock will conform to the requirements of applicable law and regulations. The issuance of the Securities is not subject to preemptive or other similar rights, except for subscription rights granted pursuant to the Plans in accordance with the OTS Regulations. + +(xviii) The PA MHC has been duly organized and is validly existing as a mutual savings and loan holding company chartered under the laws of the Commonwealth of Pennsylvania with full corporate power and authority to own, lease and operate its properties, to conduct its business as described in the Registration Statement and the Prospectus, and to enter into and perform its obligations under this Agreement and the transactions contemplated hereby; and the PA MHC is duly qualified to transact business and is in good standing under the laws of the Commonwealth of Pennsylvania and in each other jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure to so qualify would not have a + +9 + + + + + +Material Adverse Effect. The Federal MHC, upon completion of its formation, and in any event no later than the Closing Time will be duly organized and validly existing as a federal mutual savings and loan holding company chartered under the laws of the United States of America with full corporate power and authority to own, lease and operate its properties, to conduct its business as described in the Registration Statement and the Prospectus, and to enter into and perform its obligations under this Agreement and the transactions contemplated hereby; and the Federal MHC is duly qualified to transact business and is in good standing under the laws of the United States of America, in the Commonwealth of Pennsylvania and in each other jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure to so qualify would not have a Material Adverse Effect. + +(xix) The MHCs have no capital stock. All holders of the savings, demand or other authorized accounts of the Bank are members of the MHCs. As of the Closing Time referred to in Section 2, the MHCs will not own any equity securities or any equity interest in any business enterprise except as described in the Prospectus. + +(xx) The Bank has been duly organized and is validly existing as a stock savings bank chartered under the laws of the Commonwealth of Pennsylvania with full corporate power and authority to own, lease and operate its properties, to conduct its business as described in the Registration Statement and the Prospectus, and to enter into and perform its obligations under this Agreement and the transactions contemplated hereby; and the Bank is duly qualified to transact business and is in good standing under the laws of the Commonwealth of Pennsylvania and in each other jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure to so qualify would not have a Material Adverse Effect. + +(xxi) The authorized capital stock of the Bank is 10,000,000 shares of common stock, par value $.01 per share ("Bank Common Stock"), and 5,000,000 shares of preferred stock, par value $.01 per share ("Bank Preferred Stock"), and the issued and outstanding capital stock of the Bank is 3,442,383 shares of Bank Common Stock and zero shares of Bank Preferred Stock. No shares of Bank Preferred Stock have been or will be issued prior to the Closing Time referred to in Section 2 hereof. + +The issued and outstanding shares of Bank Common Stock have been duly and validly issued and are fully paid and nonassessable. Shares of Bank Common Stock owned beneficially and of record by the PA MHC are owned free and clear of any security interest, mortgage, pledge, lien, encumbrance or legal or equitable claim; the terms and provisions of the Bank Common Stock conform to all statements relating thereto contained in the Prospectus, and the certificates representing the shares of the Bank Common Stock comply with the requirements of applicable laws and regulations; and the issuance of the Bank Common Stock is not subject to preemptive or similar rights; and there are no other warrants, options or rights of any kind to acquire additional shares of Bank Common Stock or any shares of Bank Preferred Stock other than as disclosed in the Prospectus. + +10 + + + + + +(xxii) The Company, the MHCs, the Bank and the Subsidiaries have each obtained all licenses, permits and other governmental authorizations currently required for the conduct of their respective businesses, or required for the conduct of their respective businesses as contemplated by the Holding Company Application and the MHC Application, except where the failure to obtain such licenses, permits or other governmental authorizations would not have a Material Adverse Effect; all such licenses, permits and other governmental authorizations are in full force and effect and the Company, the MHCs, the Bank and the Subsidiaries are in all material respects in compliance therewith; none of the Company, the MHCs, the Bank or any Subsidiary has received notice of any proceeding or action relating to the revocation or modification of any such license, permit or other governmental authorization which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, might have a Material Adverse Effect. + +(xxiii) Each Subsidiary has been duly organized and is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation, has full corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Registration Statement and Prospectus, and is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure to so qualify would not have a Material Adverse Effect; the activities of each Subsidiary are permitted to subsidiaries of a Pennsylvania-chartered savings bank and both a Pennsylvania-chartered and a federally- chartered mutual holding company by the rules, regulations, resolutions and practices of the OTS, the FDIC and the Department; all of the issued and outstanding capital stock of each Subsidiary has been duly authorized and validly issued, is fully paid and nonassessable and is owned by the Bank directly, free and clear of any security interest, mortgage, pledge, lien, encumbrance or legal or equitable claim; and there are no warrants, options or rights of any kind to acquire shares of capital stock of any Subsidiary. + +(xxiv) The Bank is a member in good standing of the Federal Home Loan Bank of Pittsburgh; the deposit accounts of the Bank are insured by the FDIC up to the applicable limits. The Bank is a "qualified thrift lender" within the meaning of 12 U.S.C. Section 1467a(m). + +(xxv) The Company, the MHCs and the Bank have taken all corporate action necessary for them to execute, deliver and perform this Agreement and the transactions contemplated hereby, and this Agreement has been duly executed and delivered by, and is the valid and binding agreement of, the Company, the MHCS and the Bank, enforceable against each of them in accordance with its terms, except as may be limited by bankruptcy, insolvency or similar laws and the availability of equitable remedies. + +(xxvi) No approval of any regulatory or supervisory or other public authority is required in connection with the execution and delivery of this Agreement or the issuance of the Securities that has not been obtained and a copy of which has been delivered to the Agent, except as may be required under the "Blue Sky" or securities laws of various jurisdictions. + +11 + + + + + +(xxvii) None of the Company, the MHCs, the Bank or any of the Subsidiaries is in violation of their respective certificate of incorporation, organization certificate, articles of incorporation or charter, as the case may be, or bylaws or other written corporate governance requirements or guidelines; and none of the Company, the MHCs, the Bank or any of the Subsidiaries is in default (nor has any event occurred which, with notice or lapse of time or both, would constitute a default) in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, loan agreement, note, lease or other instrument to which the Company, the MHCs, the Bank or any of the Subsidiaries is a party or by which it or any of them may be bound, or to which any of the property or assets of the Company, the MHCs, the Bank or any of the Subsidiaries is subject, except for such defaults that would not, individually or in the aggregate, have a Material Adverse Effect; and there are no contracts or documents of the Company, the MHCs or the Bank which are required to be filed as exhibits to the Registration Statement, the Holding Company Application or the MHC Application which have not been so filed. + +(xxviii) The Reorganization and Additional Stock Issuance, the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated herein, have been duly authorized by all necessary corporate action on the part of the Company, the MHCs, and the Bank, and do not and will not conflict with or constitute a breach of, or default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company, the MHCs or the Bank pursuant to, any contract, indenture, mortgage, loan agreement, note, lease or other instrument to which the Company, the MHCs or the Bank is a party or by which it or any of them may be bound, or to which any of the property or assets of the Company, the MHCs or the Bank is subject, except for such conflicts, breaches or defaults that would not, individually or in the aggregate, have a Material Adverse Effect nor will such action result in any violation of the provisions of the respective charter or bylaws of the Company, the MHCs or the Bank, or any applicable law, administrative regulation or administrative or court decree. + +(xxix) No labor dispute with the employees of the Company, the MHCs, the Bank or the Subsidiaries exists or, to the knowledge of the Company, the MHCs, the Bank or the Subsidiaries, is imminent or threatened; and the Company, the MHCs and the Bank are not aware of any existing or threatened labor disturbance by the employees of any of its principal suppliers or contractors which might be expected to have a Material Adverse Effect. + +(xxx) Each of the Company, the MHCs, the Bank and the Subsidiaries has good and marketable title to all of its properties and assets for which ownership is material to the business of the Company, the MHCs, the Bank or the Subsidiaries and to those properties and assets described in the Prospectus as owned by them, free and clear of all liens, charges, encumbrances or restrictions, except such as are described in the Prospectus or are not material in relation to the business of the Company, the MHCs, the Bank or the Subsidiaries, considered as one enterprise; and all of the leases and subleases material to the business of the Company, the MHCs, the Bank or the Subsidiaries under which the Company, the MHCs, the Bank or the Subsidiaries hold properties, including those described in the Prospectus, are valid and binding agreements of the Company, the MHCs, the Bank or the Subsidiaries, in full force and effect, enforceable in accordance with their terms except as + +12 + + + + + +may be limited by bankruptcy, insolvency or similar laws and availability of equitable remedies. + +(xxxi) None of the Company, the MHCs or the Bank is in violation of any order or directive from the OTS, the Commission or any regulatory authority to make any material change in the method of conducting its respective businesses; the Company, the MHCs, the Bank, and each of the Subsidiaries have conducted and are conducting their business so as to comply with all applicable statutes, regulations and administrative and court decrees (including, without limitation, all regulations, decisions, directives and orders of the OTS, the FDIC and the Commission). Neither the Company, the MHCs, the Bank nor any of the Subsidiaries is subject or is party to, or has received any notice or advice that any of them may become subject or party to, any investigation with respect to any cease-and-desist order, agreement, consent agreement, memorandum of understanding or other regulatory enforcement action, proceeding or order with or by, or is a party to any commitment letter or similar undertaking to, or is subject to any directive by, or has been a recipient of any supervisory letter from, or has adopted any board resolutions at the request of, any Regulatory Agency (as defined below) that currently restrict the conduct of their business or that in any manner relates to their capital adequacy, their credit policies, their management or their business (each, a "Regulatory Agreement"), nor has the Company, the MHCs, the Bank or any of the Subsidiaries been advised by any Regulatory Agency that it is considering issuing or requesting the issuance of any such Regulatory Agreement; and there is no unresolved violation, criticism or exception by any Regulatory Agency with respect to any report or statement relating to any examinations of the Company, the MHCs, the Bank or any of the Subsidiaries which is expected to have a Material Adverse Effect, or which might materially and adversely affect the properties or assets thereof or which might adversely affect the consummation of the Offerings or the performance of this Agreement. As used herein, the term "Regulatory Agency" means any federal or state agency charged with the supervision or regulation of depositary institutions or holding companies of depositary institutions, or engaged in the insurance of depositary institution deposits, or any court, administrative agency or commission or other governmental agency, authority or instrumentality having supervisory or regulatory authority with respect to the Company, the MHCs, the Bank or any of the Subsidiaries. + +(xxxii) There is no action, suit or proceeding before or by any court or governmental agency or body, domestic or foreign, now pending, or, to the knowledge of the Company, the MHCs, or the Bank, threatened, against or affecting the Company, the MHCs or the Bank which is required to be disclosed in the Registration Statement (other than as disclosed therein), or which might result in any material adverse change in the financial condition, results of operations, business affairs or prospects of the Company, the MHCs and the Bank, considered as one enterprise, or which might materially and adversely affect the properties or assets thereof, or which might adversely affect the consummation of the Offerings, or the performance of this Agreement; all pending legal or governmental proceedings to which the Company, the MHCs, the Bank or any Subsidiary is a party or of which any of their respective property or assets is the subject which are not described in the Registration Statement, including ordinary routine litigation incidental to their business, are considered in the aggregate not material. + + + +13 + + + + + +(xxxiii) The Company, MHCs and the Bank have obtained (i) an opinion of their counsel, Elias, Matz, Tiernan & Herrick L.L.P., with respect to the legality of the Securities to be issued and certain federal income tax consequences of the Offerings and the Plans, and (ii) the opinion of Elias, Matz, Tiernan & Herrick L.L.P. with respect to the certain state and local income tax consequences of the Offerings and the Plans, copies of which are filed as exhibits to the Registration Statement; all material aspects of the aforesaid opinions are accurately summarized in the Prospectus under "The Reorganization — Federal and State Tax Consequences," the facts and representations upon which such opinions are based are truthful, accurate and complete in all material respects; and neither the Company, the MHCs, nor the Bank has taken or will take any action inconsistent therewith. + +(xxxiv) The Company is not and, upon completion of the Reorganization and Additional Stock Issuance and the application of the net proceeds therefrom, will not be, required to be registered as an "investment company" as that term is defined under the Investment Company Act of 1940, as amended. + +(xxxv) All of the loans represented as assets on the most recent consolidated financial statements or consolidated selected financial information of the Bank included in the Prospectus meet or are exempt from all requirements of federal, state or local law pertaining to lending, including without limitation truth in lending (including the requirements of Regulations Z and 12 C.F.R. Part 226 and Section 563.99), real estate settlement procedures, consumer credit protection, equal credit opportunity and all disclosure laws applicable to such loans, except for violations which, if asserted, would not result in a Material Adverse Effect. + +(xxxvi) To the knowledge of the Company, the MHCs, the Bank and each Subsidiary, with the exception of the intended loan to the Bank's ESOP by the Company to enable the ESOP to purchase shares of the Common Stock, none of the Company, the MHCs, the Bank or their employees has made any payment of funds of the Company, the MHCs or the Bank as a loan for the purchase of the Common Stock or made any other payment of funds prohibited by law, and no funds have been set aside to be used for any payment prohibited by law. + +(xxxvii) Each of the Company, the MHCs, the Bank and each of the Subsidiaries maintains a system of internal accounting controls sufficient to provide reasonable assurance that (a) transactions are executed in accordance with management's general or specific authorizations; (b) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset accountability; (c) access to assets is permitted only in accordance with management's general or specific authorization; and (d) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. + +(xxxviii) The Company, the MHCs, the Bank and each Subsidiary are in compliance with the applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transaction Reporting Act of 1970, as amended, and the rules and regulations + +14 + + + + + +thereunder. The Bank has established compliance programs and is in compliance with the requirements of the USA Patriot Act and all applicable regulations promulgated thereunder. The Bank is in compliance with the USA Patriot Act and all applicable regulations promulgated thereunder, and there is no charge, investigation, action, suit or proceeding before any court, regulatory authority or governmental agency or body pending or, to the best knowledge of the Company, the MHCs, and the Bank, threatened regarding the Bank's compliance with the USA Patriot Act or any regulations promulgated thereunder. + +(xxxix) None of the Company, the MHCs, the Bank or any Subsidiary nor any properties owned or operated by the Company, the MHCs, the Bank or any Subsidiary is in violation of or liable under any Environmental Law (as defined below). There are no actions, suits or proceedings, or demands, claims, notices or investigations (including, without limitation, notices, demand letters or requests for information from any environmental agency) instituted or pending, or to the knowledge of the Company, the MHCs, the Bank or any Subsidiary threatened, relating to the liability of any property owned or operated by the Company, the MHCs, the Bank or any Subsidiary, under any Environmental Law, except for such actions, suits or proceedings, or demands, claims, notices or investigations that, individually or in the aggregate, would not have a Material Adverse Effect. For purposes of this subsection, the term "Environmental Law" means any federal, state, local or foreign law, statute, ordinance, rule, regulation, code, license, permit, authorization, approval, consent, order, judgment, decree, injunction or agreement with any regulatory authority relating to (i) the protection, preservation or restoration of the environment (including, without limitation, air, water, vapor, surface water, groundwater, drinking water supply, surface soil, subsurface soil, plant and animal life or any other natural resource), and/or (ii) the use, storage, recycling, treatment, generation, transportation, processing, handling, labeling, production, release or disposal of any substance presently listed, defined, designated or classified as hazardous, toxic, radioactive or dangerous, or otherwise regulated, whether by type or by quantity, including any material containing any such substance as a component. + +(xl) The Company, the MHCs, the Bank and each Subsidiary have filed all federal, state and local income and franchise tax returns required to be filed and have made timely payments of all taxes shown as due and payable in respect of such returns, and no deficiency has been asserted with respect thereto by any taxing authority. No tax deficiency has been asserted, and the Company, the MHCs and the Bank have no knowledge of any tax deficiency which could be asserted against the Company, the MHCs, the Bank or the Subsidiaries. + +(xli) The Company has received all approvals required to consummate the Offerings, and to have the Securities quoted on the Nasdaq Global Market effective as of the Closing Time referred to in Section 2 hereof. + +(xlii) The Company has filed a registration statement for the Securities under Section 12(g) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and such registration statement was declared effective concurrent with the effectiveness of the Registration Statement. + +15 + + + + + +(xliii) There are no affiliations or associations (as such terms are defined by the National Association of Securities Dealers, Inc. ("NASD")) between any member of the NASD and any of the MHCs', Company's or Bank's officers or directors. + +(xliv) The Company, the MHCs, the Bank and each Subsidiary carries, or is covered by, insurance in such amounts and covering such risks as is adequate for the conduct of their respective businesses and the value for their respective properties as is customary for companies engaged in similar industries. + +(xlv) The Company, the MHCs and the Bank have not relied on Agent or its counsel for any legal, tax or accounting advice in connection with the Offerings. + +(xlvi) The records of eligible account holders, supplemental eligible account holders, and other depositors are accurate and complete in all material respects. + +(xlvii) The Company, the MHCs, the Bank and each Subsidiary is in compliance with all presently applicable provisions of the Employee Retirement Income Security Act of 1974, as amended, including the regulations and published interpretations thereunder ("ERISA"); no "reportable event" (as defined in ERISA) has occurred with respect to any "pension plan" (as defined in ERISA) for which the Company, the MHCs, the Bank or any Subsidiary, respectively, would have any liability; each of the Company, the MHCs, the Bank, and each Subsidiary has not incurred and does not expect to incur liability under (i) Title IV of ERISA with respect to termination of, or withdrawal from, any "pension plan" or (ii) Sections 412 or 4971 of the Internal Revenue Code of 1986, as amended, including the regulations and published interpretations thereunder (the "Code"); and each "pension plan" for which the Company, the MHCs, the Bank and any Subsidiary would have any liability that is intended to be qualified under Section 401(a) of the Code is so qualified and nothing has occurred, whether by action or by failure to act, which would cause the loss of such qualification. + +(xlviii) The Bank has established and maintains disclosure controls and procedures (as such term is defined in Rule 13a-14 and 15d-14 under the Exchange Act), which (i) are designed to ensure that material information relating to the Bank, including its consolidated subsidiaries, is made known to the Bank's principal executive officer and its principal financial officer by others within those entities; and (ii) are effective in all material respects to perform the functions for which they were established. There are no significant deficiencies in the design or operation of internal controls which could adversely affect the Bank's ability to record, process, summarize, and report financial data. There has been no fraud, whether or not material, that involves management or other employees who have a significant role in the Bank's internal controls. Since the date of the most recent evaluation of the Bank's disclosure controls and procedures, there have been no significant changes in internal controls or in other factors that could significantly affect internal controls, including any corrective actions with regard to significant deficiencies and material weaknesses. + +The Company, upon completion of its formation, and in any event no later than Closing Time will have established and maintained disclosure controls and procedures (as + +16 + + + + + +such term is defined in Rule 13a-14 and 15d-14 under the Exchange Act), which (i) are designed to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to the Company's principal executive officer and its principal financial officer by others within those entities; and (ii) are effective in all material respects to perform the functions for which they were established. + +(xlix) The Company, upon completion of its formation, and in any event no later than Closing Time will be in compliance with the applicable provisions of the Sarbanes-Oxley Act, the rules and regulations of the Commission thereunder, and the Nasdaq corporate governance rules applicable to the Company, will use its best efforts to maintain such compliance and will use its best efforts to comply with provisions of the Sarbanes-Oxley Act, rules and regulations of the Commission thereunder, and Nasdaq corporate governance rules that become effective in the future. + +(l) Any certificate signed by any officer of the Company, the MHCs, the Bank or any Subsidiary and delivered to either of the Agent or counsel for the Agent shall be deemed a representation and warranty by the Company, the MHCs or the Bank to the Agent as to the matters covered thereby. + +SECTION 2. APPOINTMENT OF SANDLER O'NEILL; SALE AND DELIVERY OF THE SECURITIES; CLOSING. On the basis of the representations and warranties herein contained and subject to the terms and conditions herein set forth, the Company hereby appoints Sandler O'Neill as its Agent to consult with and advise the Company, and to assist the Company with the solicitation of subscriptions and purchase orders for Securities, in connection with the Company's sale of Common Stock in the Offerings. On the basis of the representations and warranties herein contained, and subject to the terms and conditions herein set forth, Sandler O'Neill accepts such appointment and agrees to use its best efforts to assist the Company with the solicitation of subscriptions and purchase orders for Securities in accordance with this Agreement; provided, however, that the Agent shall not be obligated to take any action which is inconsistent with any applicable laws, regulations, decisions or orders. The services to be rendered by Sandler O'Neill pursuant to this appointment include the following: (i) consulting as to the securities marketing implications of any aspect of the Plans or related corporate documents; (ii) reviewing with the Board of Directors of the Company, the MHCs and the Bank financial and securities marketing implications of the Appraiser's appraisal of the Common Stock; (iii) reviewing all offering documents, including the Prospectus, stock order forms and related offering materials (it being understood that preparation and filing of such documents is the sole responsibility of the Company and the Bank and their counsel); (iv) assisting in the design and implementation of a marketing strategy for the Offerings; (v) assisting management of the Company and the Bank in preparing for meetings with potential investors and broker-dealers; and (vi) providing such other general advice and assistance regarding financial and marketing aspects of the Offering as may be requested to promote the successful completion of the Offering. + +The appointment of the Agent hereunder shall terminate upon the earlier to occur of (a) forty-five (45) days after the last day of the Subscription and Community Offering, unless + +17 + + + + + +the Company and the Agent agree in writing to extend such period and the OTS agrees to extend the period of time in which the Securities may be sold, or (b) the receipt and acceptance of subscriptions and purchase orders for all of the Securities, or (c) the completion of the Syndicated Community Offering. + +If any of the Securities remain available after the expiration of the Subscription and Community Offering, at the request of the Company and the Bank, Sandler O'Neill will seek to form a syndicate of registered brokers or dealers ("Selected Dealers") to assist in the solicitation of purchase orders of such Securities on a best efforts basis. Sandler O'Neill will endeavor to limit the aggregate fees to be paid by the Company, the MHCs and the Bank to an amount competitive with gross underwriting discounts charged at such time for underwritings of comparable amounts of stock sold at a comparable price per share in a similar market environment; provided, however, that the aggregate fees payable to Sandler O'Neill and Selected Dealers shall not exceed 6.0% of the aggregate dollar amount of the Securities sold in the Syndicated Community Offering by such Selected Dealers. Sandler O'Neill will endeavor to distribute the Securities among the Selected Dealers in a fashion which best meets the distribution objective of the Company and the Bank, which may result in limiting the allocation of stock to certain Selected Dealers. It is understood that in no event shall Sandler O'Neill be obligated to act as a Selected Dealer or to take or purchase any Securities. + +If any of the Securities remain available after the expiration of the Offerings, the Company agrees to offer the Agent the first right to act as lead managing underwriter for the Public Offering. The terms of the Public Offering will be set forth in a separate definitive purchase agreement in a form satisfactory to Sandler O'Neill and containing customary representations, warranties, conditions, agreements and indemnities, which purchase agreement, when executed, will supersede and replace this Agreement with respect to Securities sold thereunder (the "Purchase Agreement"). This Agreement is not intended to constitute, and should not be construed as, an agreement or commitment between the Company, the Bank and Sandler O'Neill relating to the firm commitment underwriting of any securities, and Sandler O'Neill may, in its sole judgment and discretion, determine at any time not to proceed with the proposed firm commitment underwriting. Such proposed underwriting will be subject, among other things, to: (i) satisfactory completion by Sandler O'Neill of such due diligence investigation or inquiries as it may deem appropriate, (ii) market conditions, which, in the sole judgment of Sandler O'Neill, shall be satisfactory, and (iii) the execution and delivery of a definitive Purchase Agreement. + +In the event the Company is unable to sell at least the total minimum of the Securities, as set forth on the cover page of the Prospectus, within the period herein provided, this Agreement shall terminate and the Company shall refund to any persons who have subscribed for any of the Securities the full amount which it may have received from them, together with interest as provided in the Prospectus, and no party to this Agreement shall have any obligation to the others hereunder, except for the obligations of the Company, the MHCs and the Bank as set forth in Sections 4, 6(a) and 7 hereof and the obligations of the Agent as provided in Sections 6(b) and 7 hereof. Appropriate arrangements for placing the funds received from subscriptions for Securities or other offers to purchase Securities in + +18 + + + + + +special interest-bearing accounts with the Bank until all Securities are sold and paid for were made prior to the commencement of the Subscription Offering, with provision for refund to the purchasers as set forth above, or for delivery to the Company if all Securities are sold. + +If at least the total minimum of Securities, as set forth on the cover page of the Prospectus, are sold, the Company agrees to issue or have issued the Securities sold and to release for delivery certificates for such Securities at the Closing Time against payment therefor by release of funds from the special interest-bearing accounts referred to above. The closing shall be held at the offices of Elias, Matz, Tiernan & Herrick L.L.P., at 10:00 a.m., Eastern Standard Time, or at such other place and time as shall be agreed upon by the parties hereto, on a business day to be agreed upon by the parties hereto. The Company shall notify the Agent by telephone, confirmed in writing, when funds shall have been received for all the Securities. Certificates for Securities shall be delivered directly to the purchasers thereof in accordance with their directions. Notwithstanding the foregoing, certificates for Securities purchased through Selected Dealers shall be made available to the Agent for inspection at least 48 hours prior to the Closing Time at such office as the Agent shall designate. The hour and date upon which the Company shall release for delivery all of the Securities, in accordance with the terms hereof, is herein called the "Closing Time." + +The Company will pay any stock issue and transfer taxes which may be payable with respect to the sale of the Securities. + +In addition to the reimbursement of the expenses specified in Section 4 hereof, the Agent will receive the following compensation for its services hereunder: + +(a) One percent (1.00%) of the aggregate purchase price of the Securities sold in the Subscription and Community Offering, excluding in each case shares purchased by (i) any employee benefit plan of the Company or the Bank established for the benefit of their respective directors, officers and employees, and (ii) any director, officer or employee of the Company or the Bank or members of their immediate families (which term shall mean parents, grandparents, spouse, siblings, children and grandchildren); and + +(b) With respect to any Securities sold by a National Association of Securities Dealers, Inc. ("NASD") member firm (other than Sandler O'Neill) in the Syndicated Community Offering, (i) the compensation payable to Selected Dealers, (ii) any sponsoring dealer's fees; and (iii) a management fee to Sandler O'Neill of one percent (1.0 %) of the aggregate purchase price of the Securities sold in the Syndicated Community Offering. Any fees payable to Sandler O'Neill for Securities sold by Sandler O'Neill under any such agreement shall be limited to an aggregate of six percent (6.0 %) of the purchase price of the Securities sold by Sandler O'Neill and other NASD member firms. + +If this Agreement is terminated by the Agent in accordance with the provisions of Section 9(a) hereof, no fee shall be payable by the Company to Sandler O'Neill; provided, however, that the Company shall reimburse the Agent for all of its reasonable out-of-pocket expenses incurred prior to termination, including the reasonable fees and disbursements of counsel for the Agent in accordance with the provisions of Section 4 hereof. In addition, the + +19 + + + + + +Company shall be obligated to pay the fees and expenses as contemplated by the provisions of Section 4 hereof in the event of any such termination. + +All fees payable to the Agent hereunder shall be payable in immediately available funds at Closing Time, or upon the termination of this Agreement, as the case may be. In recognition of the long lead times involved in the conversion process, the Bank agreed to make an advance payment to the Agent in the amount of $25,000, all of which has been previously paid, which shall be credited against any fees or reimbursement of expenses payable hereunder. In the event that the advance payment exceeds the amount due in payment of fees and reimbursement of expenses hereunder, the excess shall be refunded. + +SECTION 3. COVENANTS OF THE COMPANY, THE MHCS AND THE BANK. The Company, the MHCs and the Bank covenant with the Agent as follows: + +(a) The Company, the MHCs and the Bank will prepare and file such amendments or supplements to the Registration Statement, the Prospectus, the Holding Company Application, the MHC Application and the Proxy Statement as may hereafter be required by the Securities Act Regulations or the OTS Regulations or as may hereafter be requested by the Agent. Following completion of the Subscription and Community Offering, in the event of a Syndicated Community Offering, the Company, the MHCs and the Bank will (i) promptly prepare and file with the Commission a post-effective amendment to the Registration Statement relating to the results of the Subscription and Community Offering, any additional information with respect to the proposed plan of distribution and any revised pricing information or (ii) if no such post-effective amendment is required, will file with the Commission a prospectus or prospectus supplement containing information relating to the results of the Subscription and Community Offering and pricing information pursuant to Rule 424 of the Securities Act Regulations, in either case in a form acceptable to the Agent. The Company, the MHCs and the Bank will notify the Agent immediately, and confirm the notice in writing, (i) of the effectiveness of any post-effective amendment of the Registration Statement, the filing of any supplement to the Prospectus and the filing of any amendment to the Plans, (ii) of the receipt of any comments from the OTS or the Commission with respect to the transactions contemplated by this Agreement or the Plans, (iii) of any request by the Commission or the OTS for any amendment to the Registration Statement or the Plans or any amendment or supplement to the Prospectus or for additional information, (iv) of the issuance by the OTS of any order suspending the Offerings or the use of the Prospectus or the initiation of any proceedings for that purpose, (v) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose, and (vi) of the receipt of any notice with respect to the suspension of any qualification of the Securities for offering or sale in any jurisdiction. The Company, the MHCs and the Bank will take all necessary action to prevent the issuance of any stop order and, if any stop order is issued, to obtain the lifting thereof at the earliest possible moment. + +(b) The Company represents and agrees that, unless it obtains the prior consent of the Agent and the Agent represents and agrees that, unless it obtains the prior consent of the Company, it has not made and will not make any offer relating to the offered Securities + +20 + + + + + +that would constitute an "issuer free writing prospectus," as defined in Rule 433 of the Securities Act Regulations, or that would constitute a "free writing prospectus," as defined in Rule 405 of the Securities Act Regulations, required to be filed with the Commission. Any such free writing prospectus consented to by the Company and the Agent is hereinafter referred to as a "Permitted Free Writing Prospectus." The Company represents that it has and will comply with the requirements of Rule 433 of the Securities Act Regulations applicable to any Permitted Free Writing Prospectus, including timely Commission filing where required, legending and record keeping. The Company need not treat any communication as a free writing prospectus if it is exempt from the definition of prospectus pursuant to clause (a) of Section 2(a)(10) of the 1933 Act without regard to Rule 172 or 173 of the Securities Act Regulations. + +(c) The Company, the MHCs and the Bank will give the Agent notice of its intention to file or prepare any amendment to the Plans or Registration Statement (including any post-effective amendment) or any amendment or supplement to the Prospectus (including any revised prospectus which the Company proposes for use in connection with the Syndicated Community Offering of the Securities which differs from the prospectus on file at the Commission at the time the Registration Statement becomes effective, whether or not such revised prospectus is required to be filed pursuant to Rule 424(b) of the Securities Act Regulations), will furnish the Agent with copies of any such amendment or supplement a reasonable amount of time prior to such proposed filing or use, as the case may be, and will not file any such amendment or supplement or use any such prospectus to which the Agent or counsel for the Agent may object. + +(d) The Company, the MHCs and the Bank will deliver to the Agent as many signed copies and as many conformed copies of the Holding Company Application, the MHC Application and the Registration Statement as originally filed and of each amendment thereto (including exhibits filed therewith or incorporated by reference therein) as the Agent may reasonably request, and from time to time such number of copies of the Prospectus as the Agent may reasonably request. + +(e) During the period when the Prospectus is required to be delivered, the Company, the MHCs and the Bank will comply, at their own expense, with all requirements imposed upon them by the OTS, by the OTS Regulations, as from time to time in force, and by the Nasdaq Global Market, the Securities Act, the Securities Act Regulations, the Exchange Act, and the rules and regulations of the Commission promulgated thereunder, including, without limitation, Regulation M under the Exchange Act, so far as necessary to permit the continuance of sales or dealing in shares of the Securities during such period in accordance with the provisions hereof and the Prospectus. + +(f) If any event or circumstance shall occur as a result of which it is necessary, in the opinion of counsel for the Agent, to amend or supplement the Registration Statement or Prospectus in order to make the Prospectus not misleading in the light of the circumstances existing at the time it is delivered to a purchaser, the Company, the MHCs and the Bank will forthwith amend or supplement the Registration Statement or Prospectus (in form and substance satisfactory to counsel for the Agent) so that, as so amended or + +21 + + + + + +supplemented, the Registration Statement or Prospectus will not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing at the time it is delivered to a purchaser, not misleading, and the Company, the MHCs and the Bank will furnish to the Agent a reasonable number of copies of such amendment or supplement. For the purpose of this subsection, the Company, the MHCs and the Bank will each furnish such information with respect to itself as the Agent may from time to time reasonably request. + +(g) The Company, the MHCs and the Bank will take all necessary action, in cooperation with the Agent, to qualify the Securities for offering and sale under the applicable securities laws of such states of the United States and other jurisdictions as the OTS Regulations may require and as the Agent and the Company have agreed; provided, however, that none of the Company, the MHCs or the Bank shall be obligated to file any general consent to service of process or to qualify as a foreign corporation in any jurisdiction in which it is not so qualified. In each jurisdiction in which the Securities have been so qualified, the Company, the MHCs and the Bank will file such statements and reports as may be required by the laws of such jurisdiction to continue such qualification in effect for a period of not less than one year from the effective date of the Registration Statement. + +(h) The Company authorizes Sandler O'Neill and any Selected Dealer to act as agent of the Company in distributing the Prospectus to persons entitled to receive subscription rights and other persons to be offered Securities having record addresses in the states or jurisdictions set forth in a survey of the securities or "blue sky" laws of the various jurisdictions in which the Offerings will be made (the "Blue Sky Survey"). + +(i) The Company will make generally available to its security holders as soon as practicable, but not later than 60 days after the close of the period covered thereby, an earnings statement covering a twelve month period beginning not later than the first day of the Company's fiscal quarter next following the effective date of the Registration Statement (as defined in Rule 158 of the Securities Act Regulations) that will satisfy the provisions of Section 11(a) of the Securities Act. + +(j) During the period ending on the third anniversary of the expiration of the fiscal year during which the closing of the transactions contemplated hereby occurs, the Company will furnish to its stockholders as soon as practicable after the end of each such fiscal year an annual report (including consolidated statements of financial condition and consolidated statements of income, stockholders' equity and cash flows, certified by independent public accountants) and, as soon as practicable after the end of each of the first three quarters of each fiscal year (beginning with the fiscal quarter ending after the effective date of the Registration Statement), the Company will make available to its stockholders consolidated summary financial information of the Company and the Bank for such quarter in reasonable detail. In addition, such annual report and quarterly consolidated summary financial information shall be made public through the issuance of appropriate press releases at the same time or prior to the time of the furnishing thereof to stockholders of the Company. + +22 + + + + + +(k) During the period ending on the fifth anniversary of the expiration of the fiscal year during which the closing of the transactions contemplated hereby occurs, the Company will furnish to the Agent (i) as soon as publicly available, a copy of each report or other document of the Company furnished generally to stockholders of the Company or furnished to or filed with the Commission under the Exchange Act or any national securities exchange or system on which any class of securities of the Company is listed, and (ii) from time to time, such other information concerning the Company as the Agent may reasonably request. + +(l) The Company, the MHCs and the Bank will comply, at their own expense, with all requirements imposed by the Commission, the OTS and the Nasdaq Global Market, or pursuant to the applicable Securities Act Regulations, OTS Regulations and Nasdaq Global Market Regulations, as from time to time in force. + +(m) The Company will promptly inform the Agent upon its receipt of service with respect to any material litigation or administrative action instituted with respect to the Offerings. + +(n) Each of the Company and the Bank will use the net proceeds received by it from the sale of the Securities in the manner specified in the Prospectus under "Use of Proceeds." + +(o) The Company will report the use of proceeds from the Offerings on its first periodic report filed pursuant to Sections 13(a) and 15(d) of the Exchange Act and on any subsequent periodic reports as may be required pursuant to Rule 463 of the Securities Act Regulations. + +(p) The Company will maintain the effectiveness of the Exchange Act Registration Statement for not less than three years and will comply in all material respects with its filing obligations under the Exchange Act. The Company will use its best efforts to effect and maintain the listing of the Common Stock on the Nasdaq Global Market and, once listed on the Nasdaq Global Market, the Company will comply with all applicable corporate governance standards required by the Nasdaq Global Market. The Company will file with the Nasdaq Global Market all documents and notices required by the Nasdaq Global Market of companies that have issued securities that are traded in the over-the-counter market and quotations for which are reported by the Nasdaq Global Market. + +(q) The Company and the Bank will take such actions and furnish such information as are reasonably requested by the Agent in order for the Agent to ensure compliance with Rule 2790 of the National Association of Securities Dealers, Inc. + +(r) Other than in connection with any employee benefit plan or arrangement described in the Prospectus, the Company will not, without the prior written consent of the Agent, sell or issue, contract to sell or otherwise dispose of, any shares of Common Stock other than the Securities for a period of 180 days following the Closing Time. + +23 + + + + + +(s) During the period beginning on the date hereof and ending on the later of the fifth anniversary of the Closing Time or the date on which the Agent receives full payment in satisfaction of any claim for indemnification or contribution to which it may be entitled pursuant to Sections 6 or 7, respectively, none of the Company, the MHCs or the Bank shall, without the prior written consent of the Agent, take or permit to be taken any action that could result in the Bank Common Stock becoming subject to any security interest, mortgage, pledge, lien or encumbrance. + +(t) The Company, the MHCs and the Bank will comply with the conditions imposed by or agreed to with the OTS in connection with its approval of the Holding Company and the MHC Application including the Plans. + +(u) During the period ending on the first anniversary of the Closing Time, the Bank will comply with all applicable laws and regulations necessary for the Bank to continue to be a "qualified thrift lender" within the meaning of 12 U.S.C. Section 1467a(m). + +(v) The Company shall not deliver the Securities until the Company, the MHCs and the Bank have satisfied each condition set forth in Section 5 hereof, unless such condition is waived by the Agent. + +(w) The Company, the MHCs and the Bank will furnish to Sandler O'Neill as early as practicable prior to the Closing Date, but no later than two (2) full business days prior thereto, a copy of the latest available unaudited interim consolidated financial statements of the Company which have been read by Deloitte & Touche LLP, as stated in their letters to be furnished pursuant to subsections (f) and (g) of Section 5 hereof. + +(x) Each of the Company, the MHCs and the Bank will conduct its business in compliance in all material respects with all applicable federal and state laws, rules, regulations, decisions, directives and orders, including all decisions, directives and orders of the Commission, the Nasdaq Global Market and the OTS. + +(y) The Bank will not amend the Plans in any manner that would affect the sale of the Securities or the terms of this Agreement without the consent of the Agent. + +(z) The Company, the MHCs and the Bank will not, prior to the Closing Time, incur any liability or obligation, direct or contingent, or enter into any material transaction, other than in the ordinary course of business consistent with past practice, except as contemplated by the Prospectus. + +(aa) The Company, the MHCs and the Bank will use all reasonable efforts to comply with, or cause to be complied with, the conditions precedent to the several obligations of the Agent specified in Section 5 hereof. + +(bb) The Company, the MHCs and the Bank will provide the Agent with any information necessary to carry out the allocation of the Securities in the event of an oversubscription, and such information will be accurate and reliable in all material respects. + +24 + + + + + +(cc) The Company, the MHCs and the Bank will notify the Agent when funds have been received for the minimum number of Securities set forth in the Prospectus. + +(dd) At the Closing Time, (i) the Company, the MHCs and the Bank will have completed the conditions precedent to the Offerings in accordance with the Plans, the applicable OTS Regulations and all other applicable laws, regulations, decisions and orders, including all material terms, conditions, requirements and provisions precedent to the Reorganization and Additional Stock Issuance imposed upon the Company, the MHCs or the Bank by the Commission, the OTS or any other regulatory authority or Blue Sky authority, and will comply with those which the regulatory authority permits to be completed after the Reorganization and Additional Stock Issuance; and (ii) the Reorganization and Additional Stock Issuance will have been effected in the manner described in the Prospectus and in accordance with the Plans, the OTS Regulations and all other applicable material laws, regulations, decisions and orders, including in compliance with all terms, conditions, requirements and provisions precedent to the Reorganization and Additional Stock Issuance imposed upon the Company, the MHCs and the Bank by the Commission, the OTS, the FDIC or any other regulatory or Blue Sky authority. + +SECTION 4. PAYMENT OF EXPENSES. The Company, the MHCs and the Bank jointly and severally agree to pay all expenses incident to the performance of their obligations under this Agreement, including but not limited to (i) the cost of obtaining all securities and bank regulatory approvals, (ii) the preparation, printing and filing of the Registration Statement and the Plans as originally filed and of each amendment thereto, (iii) the preparation, issuance and delivery of the certificates for the Securities purchased in the Offerings, (iv) the fees and disbursements of the Company's, the MHCs's and the Bank's counsel, conversion agent, accountants, appraiser and other advisors, (v) the qualification of the Securities under securities laws in accordance with the provisions of Section 3(f) hereof, including filing fees and the fees and disbursements of counsel in connection therewith and in connection with the preparation of the Blue Sky Survey, (vi) the printing and delivery to the Agent of copies of the Registration Statement as originally filed and of each amendment thereto and the printing and delivery of the Prospectus and any amendments or supplements thereto to the purchasers in the Offerings and the Agent (in such quantities as the Agent shall reasonably request), (vii) the printing and delivery to the Agent of copies of a Blue Sky Survey, and (viii) the fees and expenses incurred in connection with the listing of the Securities on the Nasdaq Global Market. In the event the Agent incurs any such fees and expenses on behalf of the Company, the MHCs or the Bank, the Bank will reimburse the Agent for such fees and expenses whether or not the Offerings are consummated; provided, however, that the Agent shall not incur any substantial expenses on behalf of the Company, the MHCs or the Bank pursuant to this Section without the prior approval of the Bank. + +The Company, the MHCs and the Bank jointly and severally agree to pay certain expenses incident to the performance of the Agent's obligations under this Agreement, regardless of whether the Offerings are consummated, including (i) the filing fees paid or incurred by the Agent in connection with all filings with the NASD, and (ii) all reasonable out-of-pocket expenses incurred by the Agent relating to the Offerings, including without limitation, fees and expenses of the Agent's counsel, advertising, promotional, syndication + +25 + + + + + +and travel expenses. All fees and expenses to which the Agent is entitled to reimbursement under this paragraph of this Section 4 shall be due and payable upon receipt by the Company, the MHCs or the Bank of a written accounting therefor setting forth in reasonable detail the expenses incurred by the Agent. + +SECTION 5. CONDITIONS OF AGENT'S OBLIGATIONS. The Company, the MHCs, the Bank and the Agent agree that the issuance and the sale of Securities and all obligations of the Agent hereunder are subject to the accuracy of the representations and warranties of the Company, the MHCs and the Bank herein contained as of the date hereof and the Closing Time, to the accuracy of the statements of officers and directors of the Company, the MHCs and the Bank made pursuant to the provisions hereof, to the performance by the Company, the MHCs and the Bank of their obligations hereunder, and to the following further conditions: + +(a) No stop order suspending the effectiveness of the Registration Statement shall have been issued under the Securities Act or proceedings therefor initiated or threatened by the Commission, no order suspending the Offerings or authorization for final use of the Prospectus shall have been issued or proceedings therefor initiated or threatened by the Commission or the OTS, and no order suspending the sale of the Securities in any jurisdiction shall have been issued. + +(b) At Closing Time, the Agent shall have received: + +(1) The favorable opinion, dated as of Closing Time, of Elias, Matz, Tiernan & Herrick L.L.P., counsel for the Company, the MHCs and the Bank, in form and substance satisfactory to counsel for the Agent, to the effect that: + +(i) The Company, at the Closing Time, will be duly organized and validly existing as a federal stock holding company chartered under the laws of the United States of America; the Federal MHC, at the Closing Time, will be duly organized and validly existing as a federal mutual holding company chartered under the laws of the United States of America; the PA MHC has been duly organized and is validly existing as a mutual holding company chartered under the laws of the Commonwealth of Pennsylvania; the Bank has been duly organized and is validly existing as a stock savings bank chartered under the laws of the Commonwealth of Pennsylvania. + +(ii) Each of the Company, the MHCs and the Bank has full corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Registration Statement and the Prospectus and to enter into and perform its obligations under this Agreement and the transactions contemplated hereby. + +26 + + + + + +(iii) Each of the Company, the MHCs and the Bank is duly qualified as a domestic or foreign corporation to transact business and is in good standing under the laws of the United States of America, in the Commonwealth of Pennsylvania and in each other jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure to so qualify would not have a Material Adverse Effect. + +(iv) The authorized capital stock of the Company consists of 15,000,000 shares of Common Stock and 5,000,000 shares of preferred stock, par value $.01 per share, and no capital stock of the Company has been issued prior to the Closing Time; upon consummation of the Offerings, the authorized issued and outstanding capital stock of the Company will be within the range set forth in the Prospectus under "Capitalization". + +(v) The authorized capital stock of the Bank consists of 10,000,000 shares of common stock, par value $.01 per share, and 5,000,000 shares of serial preferred stock, par value $.01 per share, and the issued and outstanding capital stock of the Bank is 3,441,383 shares of common stock, all of which are owned beneficially and of record by the Company free and clear of any security interest, mortgage, pledge, lien, encumbrance or legal or equitable claim. All of the issued and outstanding capital stock of the Bank has been duly authorized, validly issued and fully paid and nonassessable and has been issued in compliance with all federal and state securities laws. + +(vi) The Securities have been duly and validly authorized for issuance and sale; the Securities, when issued and delivered by the Company pursuant to the Plans against payment of the consideration calculated as set forth in the Plans, will be duly and validly issued and fully paid and nonassessable. + +(vii) The issuance of the Securities is not subject to preemptive or other similar rights arising by operation of the law or, to counsel's knowledge after due inquiry, otherwise, except for subscription rights granted pursuant to the Plans. + +(viii) The issuance of the Securities is in compliance with all conditions imposed upon the Company, the MHCs and the Bank by the OTS under the terms of their written approval or notice of intention not to object, as applicable. + +27 + + + + + +(ix) Each of the Company and the MHCs is registered as a savings and loan holding company under the Home Owners Loan Act. + +(x) The Bank is a member in good standing of the Federal Home Loan Bank of Pittsburgh and the deposit accounts of the Bank are insured by the FDIC up to the applicable limits. + +(xi) Each Subsidiary has been duly incorporated and is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation, and each of the Subsidiaries has full corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Registration Statement and Prospectus, and is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure to so qualify would not have a Material Adverse Effect; the activities of each Subsidiary are permitted to subsidiaries of a Pennsylvania-chartered savings bank, in the case of the Bank, and a federally chartered stock holding company, in the case of the Company, by the rules, regulations, resolutions and practices of the OTS, the Department and the FDIC; all of the issued and outstanding capital stock of each Subsidiary has been duly authorized and validly issued, is fully paid and non-assessable and is owned by the MHCs or the Bank, as the case may be, directly, free and clear of any security interest, mortgage, pledge, lien, encumbrance, or legal or equitable claim. + +(xii) The OTS has duly approved the Holding Company Application and the MHC Application, including the Plans; the FDIC has duly approved the Bank Merger Application; the Department has duly approved the Application for Approval to Acquire a Savings Bank and the Application for Approval to Merge or Consolidate; such approvals remains in full force and effect and no action is pending, or to the best of such counsel's knowledge, threatened respecting such approvals or the Plans. Such approvals remain in full force and effect and no action is pending, or to such counsel's knowledge, threatened respecting the approvals or the Plans; the Holding Company Application, the MHC Application, the Bank Merger Application, the Application for Approval to Acquire a Savings Bank and the Application for Approval to Merge or Consolidate and the Plans comply as to form in all material respects with the applicable requirements of the OTS, the FDIC and the Department, as applicable, include all documents required to be filed as exhibits thereto, and are, to such counsel's knowledge, truthful, accurate and + +28 + + + + + +complete (other than the financial statements, notes to financial statements and tabular, statistical and appraisal data included therein, as to which no opinion need be rendered) and the Company is duly authorized to own all of the issued and outstanding capital stock of the Bank. + +(xiii) The execution and delivery of this Agreement, the incurrence of the obligations herein set forth, and the consummation of the transactions contemplated hereby, (A) have been duly and validly authorized by all necessary action on the part of each of the Company, the MHCs and the Bank, and this Agreement constitutes the legal, valid and binding agreement of each of the Company, the MHCs and the Bank, enforceable in accordance with its terms, except as rights to indemnity and contribution hereunder may be limited under applicable law (it being understood that such counsel may avail itself of customary exceptions concerning the effect of bankruptcy, insolvency or similar laws and the availability of equitable remedies); (B) will not result in any violation of the provisions of the certificate of incorporation, reorganization certificate, articles of incorporation or charter, as the case may be, or bylaws of the Company, the MHCs, the Bank or any Subsidiary; and, (C) will not conflict with or constitute a breach of, or default under, and no event has occurred which, with notice or lapse of time or both, would constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance, that, individually or in the aggregate, would have a Material Adverse Effect or a material adverse effect upon any property or assets of the Company, the MHCs, the Bank or the Subsidiaries pursuant to any contract, indenture, mortgage, loan agreement, note, lease or other instrument to which the Company, the MHCs, the Bank or the Subsidiaries is a party or by which any of them may be bound, or to which any of the property or assets of the Company, the MHCs, the Bank or the Subsidiaries is subject. + +(xiv) The Prospectus and the Proxy Statement have been duly authorized by the OTS for final use pursuant to the OTS Regulations and no action has been taken or is pending, or to the best of such counsel's knowledge after due inquiry, is threatened, by the OTS to revoke such authorization. + +(xv) The Registration Statement is effective under the Securities Act and no stop order suspending the effectiveness of the Registration Statement has been issued under the Securities Act or, proceedings therefor initiated or, to the best of such counsel's knowledge, threatened by the Commission. + +29 + + + + + +(xvi) No further approval, authorization, consent or other order of any public board or body is required in connection with the execution and delivery of this Agreement, the issuance of the Securities and the consummation of the Plans, except as may be required under the securities or "Blue Sky" laws of various jurisdictions as to which no opinion need be rendered. + +(xvii) At the time the Registration Statement became effective, the Registration Statement (other than the financial statements and statistical data included therein, as to which no opinion need be rendered) complied as to form in all material respects with the requirements of the Securities Act and the Securities Act Regulations and the OTS Regulations. + +(xviii) The Common Stock conforms to the description thereof contained in the Prospectus, and the form of certificate used to evidence the Common Stock is in due and proper form and complies with all applicable statutory requirements. + +(xix) There are no legal or governmental proceedings pending or threatened against or affecting the Company, the MHCs, the Bank or the Subsidiaries which are required, individually or in the aggregate, to be disclosed in the Registration Statement and Prospectus, other than those disclosed therein, and all pending legal or governmental proceedings to which the Company, the MHCs, the Bank or any Subsidiary is a party or to which any of their property is subject which are not described in the Registration Statement, including ordinary routine litigation incidental to the business, are, considered in the aggregate, not material. + +(xx) The information in the Prospectus under "Risk Factors," "We Intend to Continue to Pay Quarterly Cash Dividends," "Regulation," "Taxation," "The Offering," "The Reorganization," "Restrictions on Acquisition of Alliance Bancorp and Alliance Bank and Related Anti-Takeover Provisions" "Description of Alliance Bancorp Capital Stock," and "Legal and Tax Opinions" to the extent that it constitutes matters of law, summaries of legal matters, documents or proceedings, or legal conclusions, has been reviewed by them and is complete and accurate in all material respects. + +(xxi) There are no contracts, indentures, mortgages, loan agreements, notes, leases or other instruments required to be described or referred to in the Registration Statement and Prospectus or to be filed as exhibits thereto other than those described or referred to therein or filed as exhibits thereto and the descriptions thereof or references thereto are correct, and no default exists, and no event has + +30 + + + + + +occurred which, with notice or lapse of time or both, would constitute a default, in the due performance or observance of any material obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, loan agreement, note, lease or other instrument so described, referred to or filed. + +(xxii) The approvals of the OTS, the FDIC and the Department of the Plans and the actions contemplated thereunder remain in full force and effect, and the Agreement and Plan of Reorganization has been approved by the requisite vote of the Bank's stockholders; the Company, the MHCs and the Bank have conducted the Offerings in all material respects in accordance with applicable requirements of the OTS Regulations, the Plans and all other applicable regulations, decisions and orders thereunder, including all material applicable terms, conditions, requirements and conditions precedent to the Offerings imposed upon the Company, the MHCs or the Bank by the OTS and, no order has been issued by the OTS to suspend the Offerings and no action for such purpose has been instituted or threatened by the OTS; and, to the best of such counsel's knowledge after due inquiry, no person has sought to obtain review of the final action of the OTS, the Department or the FDIC in approving the Plans and the actions contemplated thereunder. + +(xxiii) To the best of such counsel's knowledge after due inquiry, the Company, the MHCs and the Bank have obtained all licenses, permits and other governmental approvals and authorizations currently required for the conduct of their respective businesses as described in the Registration Statement and Prospectus, and all such licenses, permits and other governmental authorizations are in full force and effect, and the Company, the MHCs, the Bank and the Subsidiaries are in all material respects complying therewith. + +(xxiv) (A) None of the Company, the MHCs, the Bank, or any of the Subsidiaries is in violation of their respective certificates of incorporation, organization certificate, articles of incorporation or charter, as the case may be, or bylaws and (B) to the best of such counsel's knowledge, the Company, the MHCs, the Bank and the Subsidiaries are not in default (nor has any event occurred which, with notice or lapse of time or both, would constitute a default) in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, loan agreement, note, lease or other instrument to which the Company, the MHCs, the Bank or the Subsidiaries is a party or by which the Company, the MHCs, the Bank, the Subsidiaries or any of their property may be bound. + +31 + + + + + +(xxv) The Company is in compliance with the applicable provisions of the Sarbanes-Oxley Act. + +(xxvi) The Company is not and, upon completion of the Reorganization and Additional Stock Issuance and the application of the net proceeds therefrom, will not be required to be registered as an investment company under the Investment Company Act of 1940. + +(2) The favorable opinion, dated as of Closing Time, of Malizia Spidi & Fisch, PC, counsel for the Agent, with respect to the matters set forth in Section 5(b)(1)(i), (iv), (v), (vi), (ix), (xi), (xiv) and (xvi) and such other matters as the Agent may reasonably require. + +(3) In addition to giving their opinions required by subsections (b)(l) and (b)(2), respectively, of this Section, Elias, Matz, Tiernan & Herrick L.L.P. and Malizia Spidi & Fisch, PC shall each additionally state that nothing has come to their attention that would lead them to believe that the Registration Statement (except for financial statements and schedules and other financial or statistical data included therein, as to which counsel need make no statement), at the time it became effective, or that the General Disclosure Package as of the Applicable Time, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading or that the Prospectus (except for financial statements and schedules and other financial or statistical data included therein, as to which counsel need make no statement), at the time the Registration Statement became effective or at Closing Time, included or includes an untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. + +In giving their opinions, Elias, Matz, Tiernan & Herrick L.L.P. and Malizia Spidi & Fisch, PC may rely as to matters of fact on certificates of officers and directors of the Company, the MHCs, the Bank and the Subsidiaries and certificates of public officials, and Malizia Spidi & Fisch, PC may also rely on the opinion of Elias, Matz, Tiernan & Herrick L.L.P. with respect to matters set forth in paragraphs (i), (iv), (v), (vi), (vii), (viii), (ix), (xi), (xiii), (xiv), (xv), (xvi) and (xvii). + +(c) At Closing Time referred to in Section 2, the Company, the MHCs and the Bank shall have completed in all material respects the conditions precedent to the Reorganization and Additional Stock Issuance in accordance with the Plans, the applicable OTS Regulations and all other applicable laws, regulations, decisions and orders, including all terms, conditions, requirements and provisions precedent to the Reorganization and Additional Stock Issuance imposed upon the Company, the MHCs or the Bank by the OTS, or any other regulatory authority other than those which the OTS permits to be completed after the Reorganization and Additional Stock Issuance. + +(d) At Closing Time, there shall not have been, since the date hereof or since the respective dates as of which information is given in the Registration Statement and the Prospectus, + +32 + + + + + +any material adverse change in the financial condition, results of operations, business affairs or prospects of the Company, the MHCs, the Bank and the Subsidiaries, considered as one enterprise, whether or not arising in the ordinary course of business consistent with past practice, and the Agent shall have received a certificate of the President and Chief Executive Officer of the Company, of the MHCs and of the Bank and the chief financial or chief accounting officer of the Company, of the MHCs and of the Bank, dated as of Closing Time, to the effect that (i) there has been no such material adverse change, (ii) there shall have been no material transaction entered into by the Company, the MHCs or the Bank from the latest date as of which the financial condition of the Company, the MHCs or the Bank, as set forth in the Registration Statement and the Prospectus other than transactions referred to or contemplated therein and transactions in the ordinary course of business consistent with past practice (iii) neither the Company, the MHCs nor the Bank shall have received from the OTS any order or direction (oral or written) to make any material change in the method of conducting its business with which it has not complied (which order or direction, if any, shall have been disclosed in writing to the Agent) or which materially and adversely would affect the business, financial condition, results of operations or prospects of the Company, the MHCs or the Bank, considered as one enterprise, (iv) the representations and warranties in Section 1 hereof are true and correct with the same force and effect as though expressly made at and as of the Closing Time, (v) each of the Company, the MHCs and the Bank have complied with all agreements and satisfied all conditions on their part to be performed or satisfied at or prior to Closing Time, (vi) no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been initiated or threatened by the Commission, and (vii) no order suspending the Subscription and Community Offering or Syndicated Community Offering or the authorization for final use of the Prospectus has been issued and no proceedings for that purpose have been initiated or threatened by the OTS and no person has sought to obtain regulatory or judicial review of the action of the OTS in approving the Plans in accordance with the OTS Regulations nor has any person sought to obtain regulatory or judicial review of the action of the OTS in approving the Plans. + +(e) At the Closing Time, the Agent shall have received a certificate of the Chief Executive Officer and President of the Company, of the MHCs and of the Bank and the Chief Financial Officer of the Company, of the MHCs and of the Bank, dated as of Closing Time, to the effect that (i) they have reviewed the contents of the Registration Statement and the Prospectus; (ii) based on each of their knowledge, the Registration Statement and the Prospectus do not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made therein, in light of the circumstances under which such statements were made, not misleading; and (iii) based on each of their knowledge, the financial statements and other financial information included in the Registration Statement and the Prospectus fairly present the financial condition and results of operations of the Bank and the Subsidiaries as of and for the dates and periods covered by the Registration Statement and the Prospectus. + +(f) At the time of the execution of this Agreement, the Agent shall have received from Deloitte & Touche LLP a letter dated such date, in form and substance satisfactory to the Agent, to the effect that: (i) they are independent public accountants with respect to the Company, the MHCs, the Bank and the Subsidiaries within the meaning of the Code of Ethics of the AICPA, the Securities Act and the Securities Act Regulations and the OTS Regulations, they are registered with the PCAOB, and they are not in violation of the auditor independence requirements of the + +33 + + + + + +Sarbanes-Oxley Act; (ii) it is their opinion that the consolidated financial statements and supporting schedules included in the Registration Statement and covered by their opinions therein comply as to form in all material respects with the applicable accounting requirements of the Securities Act and the Securities Act Regulations; (iii) based upon limited procedures as agreed upon by the Agent and Deloitte & Touche LLP set forth in detail in such letter, nothing has come to their attention which causes them to believe that (A) the unaudited consolidated financial statements and supporting schedules of the Company included in the Registration Statement do not comply as to form in all material respects with the applicable accounting requirements of the Securities Act, the Securities Act Regulations and the OTS Regulations or are not presented in conformity with generally accepted accounting principles applied on a basis substantially consistent with that of the audited consolidated financial statements included in the Registration Statement and the Prospectus, (B) the unaudited amounts of net interest income and net income set forth under "Selected Financial and Other Data" in the Registration Statement and Prospectus do not agree with the amounts set forth in unaudited consolidated financial statements as of and for the dates and periods presented under such captions or such amounts were not determined on a basis substantially consistent with that used in determining the corresponding amounts in the audited financial statements included in the Registration Statement, (C) at a specified date not more than five (5) business days prior to the date of this Agreement, there has been any increase in the consolidated long-term or short-term debt of the Company or any decrease in consolidated total assets, the allowance for loan losses, total deposits or net worth of the Company, in each case as compared with the amounts shown in the consolidated statements of financial conditions included in the Registration Statement or, (D) during the period from January 1, 2006 to a specified date not more than five (5) business days prior to the date of this Agreement, there were any decreases, as compared with the corresponding period in the preceding fiscal year, in total interest income, net interest income, net interest income after provision for loan losses, income before income tax expense or net income of the Company, except in all instances for increases or decreases which the Registration Statement and the Prospectus disclose have occurred or may occur; and (iv) in addition to the examination referred to in their opinions and the limited procedures referred to in clause (iii) above, they have carried out certain specified procedures, not constituting an audit, with respect to certain amounts, percentages and financial information which are included in the Registration Statement and Prospectus and which are specified by the Agent, and have found such amounts, percentages and financial information to be in agreement with the relevant accounting, financial and other records of the Company, the MHCs and the Bank identified in such letter. + +(g) At Closing Time, the Agent shall have received from Deloitte & Touche LLP a letter, dated as of Closing Time, to the effect that they reaffirm the statements made in the letter furnished pursuant to subsection (f) of this Section, except that the specified date referred to shall be a date not more than five (5) days prior to Closing Time. + +(h) At Closing Time, the Securities shall have been approved for quotation on the Nasdaq Global Market upon notice of issuance. + +(i) At Closing Time, the Agent shall have received a letter from the Appraiser, dated as of the Closing Time, confirming its appraisal. + +34 + + + + + +(j) At Closing Time, counsel for the Agent shall have been furnished with such documents and opinions as they may require for the purpose of enabling them to pass upon the issuance and sale of the Securities as herein contemplated and related proceedings, or in order to evidence the accuracy of any of the representations or warranties, or the fulfillment of any of the conditions, herein contained; and all proceedings taken by the Company in connection with the issuance and sale of the Securities as herein contemplated shall be satisfactory in form and substance to the Agent and counsel for the Agent. + +(k) At any time prior to Closing Time, (i) there shall not have occurred any material adverse change in the financial markets in the United States or elsewhere or any outbreak of hostilities or escalation thereof or other calamity or crisis the effect of which, in the judgment of the Agent, is so material and adverse as to make it impracticable to market the Securities or to enforce contracts, including subscriptions or orders, for the sale of the Securities, and (ii) trading generally on either the American Stock Exchange, the New York Stock Exchange or the Nasdaq Stock Market shall not have been suspended, and minimum or maximum prices for trading shall not have been fixed, or maximum ranges for prices for securities have been required, by either of said Exchanges or by order of the Commission or any other governmental authority, and a banking moratorium shall not have been declared by either Federal, Pennsylvania or New York authorities. + +35 + + + + + +SECTION 6. INDEMNIFICATION. + +(a) The Company, the MHCs and the Bank, jointly and severally, agree to indemnify and hold harmless the Agent, each person, if any, who controls the Agent, within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, and its respective partners, directors, officers, employees and agents as follows: + +(i) from and against any and all loss, liability, claim, damage and expense whatsoever, as incurred, related to or arising out of the Offerings or any action taken by the Agent where acting as agent of the Company, the MHCs or the Bank or otherwise as described in Section 2 hereof; + +(ii) from and against any and all loss, liability, claim, damage and expense whatsoever, as incurred, based upon or arising out of any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment thereto), or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading or arising out of any untrue statement or alleged untrue statement of a material fact contained in the Prospectus (or any amendment or supplement thereto) or any Issuer-Represented Free Writing Prospectus, or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; + +(iii) from and against any and all loss, liability, claim, damage and expense whatsoever, as incurred, to the extent of the aggregate amount paid in settlement of any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever described in clauses (i) or (ii) above, if such settlement is effected with the written consent of the Company, the MHCs or the Bank, which consent shall not be unreasonably withheld; and + +(iv) from and against any and all expense whatsoever, as incurred (including, subject to Section 6(c) hereof, the fees and disbursements of counsel chosen by the Agent), reasonably incurred in investigating, preparing or defending against any litigation, or any investigation, proceeding or inquiry by any governmental agency or body, commenced or threatened, or any claim pending or threatened whatsoever described in clauses (i) or (ii) above, to the extent that any such expense is not paid under clause (i), (ii) or (iii) above; + +provided, however, that the indemnification provided for in this paragraph (a) shall not apply to any loss, liability, claim, damage or expense to the extent arising out of any untrue statement or alleged untrue statement of a material fact contained in the Prospectus (or any amendment or supplement thereto) or any Issuer-Represented Free Writing Prospectus, or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading which was made in reliance upon and in conformity with the Agent Information. + +36 + + + + + +(b) The Agent agrees to indemnify and hold harmless the Company, the MHCs and the Bank, their directors, each of their officers who signed the Registration Statement, and each person, if any, who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act against any and all loss, liability, claim, damage and expense described in the indemnity contained in subsection (a) of this Section, as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, of a material fact made in the Prospectus (or any amendment or supplement thereto) or any Issuer-Represented Free Writing Prospectus, in reliance upon and in conformity with the Agent Information. + +(c) Each indemnified party shall give notice as promptly as reasonably practicable to each indemnifying party of any action commenced against it in respect of which indemnity may be sought hereunder, but failure to so notify an indemnifying party shall not relieve such indemnifying party from any liability which it may have otherwise than on account of this indemnity agreement. An indemnifying party may participate at its own expense in the defense of any such action. In no event shall the indemnifying parties be liable for fees and expenses of more than one counsel (in addition to no more than one local counsel in each separate jurisdiction in which any action or proceeding is commenced) separate from their own counsel for all indemnified parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances. + +(d) The Company, the MHCs and the Bank also agree that the Agent shall not have any liability (whether direct or indirect, in contract or tort or otherwise) to the MHCs and its members, the Bank, the Company's, the MHCs's or the Bank's creditors relating to or arising out of the engagement of the Agent pursuant to, or the performance by the Agent of the services contemplated by, this Agreement. + +(e) In addition to, and without limiting, the provisions of Section (6)(a)(iv) hereof, in the event that the Agent, any person, if any, who controls the Agent within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act or any of its partners, directors, officers, employees or agents is requested or required to appear as a witness or otherwise gives testimony in any action, proceeding, investigation or inquiry brought by or on behalf of or against the Company, the MHCs, the Bank, the Agent or any of its respective affiliates or any participant in the transactions contemplated hereby in which the Agent or such person or agent is not named as a defendant, the Company, the MHCs, and the Bank, jointly and severally, agree to reimburse the Agent and its partners, directors, officers, employees or agents for all reasonable and necessary out-of-pocket expenses incurred by them in connection with preparing or appearing as a witness or otherwise giving testimony and to compensate the Agent and its partners, directors, officers, employees or agents in an amount to be mutually agreed upon. + +SECTION 7. CONTRIBUTION. In order to provide for just and equitable contribution in circumstances in which the indemnity agreement provided for in Section 6 hereof is for any reason held to be unenforceable by the indemnified parties although applicable in accordance with its terms, the Company, the MHCs, the Bank, and the Agent shall contribute to the aggregate losses, liabilities, claims, damages and expenses of the nature contemplated by said indemnity agreement incurred by the Company, the MHCs or the Bank and the Agent, as incurred, in such proportions (i) that the Agent is responsible for that portion represented by the percentage that the maximum aggregate + +37 + + + + + +marketing fees appearing on the cover page of the Prospectus bears to the maximum aggregate gross proceeds appearing thereon and the Company, the MHCs and the Bank are jointly and severally responsible for the balance or (ii) if, but only if, the allocation provided for in clause (i) is for any reason held unenforceable, in such proportion as is appropriate to reflect not only the relative benefits to the Company, the MHCs and the Bank on the one hand and the Agent on the other, as reflected in clause (i), but also the relative fault of the Company, the MHCs and the Bank on the one hand and the Agent on the other, as well as any other relevant equitable considerations; provided, however, that no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section, each person, if any, who controls the Agent within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act shall have the same rights to contribution as the Agent, and each director of the Company, the MHCs and the Bank, each officer of the Company who signed the Registration Statement, and each person, if any, who controls the Company, the MHCs or the Bank within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act shall have the same rights to contribution as the Company, the MHCs and the Bank. Notwithstanding anything to the contrary set forth herein, to the extent permitted by applicable law, in no event shall the Agent be required to contribute an aggregate amount in excess of the aggregate marketing fees to which the Agent is entitled and actually paid pursuant to this Agreement. + +SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY. All representations, warranties and agreements contained in this Agreement, or contained in certificates of officers of the Company, the MHCs or the Bank submitted pursuant hereto, shall remain operative and in full force and effect, regardless of any investigation made by or on behalf of the Agent or any controlling person, or by or on behalf of the Company, and shall survive delivery of the Securities. + +SECTION 9. TERMINATION OF AGREEMENT. + +(a) The Agent may terminate this Agreement, by notice to the Company, at any time at or prior to Closing Time (i) if there has been, since the date of this Agreement or since the respective dates as of which information is given in the Registration Statement, any material adverse change in the financial condition, results of operations, business affairs or prospects of the Company, the MHCs or the Bank, considered as one enterprise, whether or not arising in the ordinary course of business, (ii) if there has occurred any material adverse change in the financial markets in the United States or elsewhere or any outbreak of hostilities or escalation thereof or other calamity or crisis the effect of which, in the judgment of the Agent, is so material and adverse as to make it impracticable to market the Securities or to enforce contracts, including subscriptions or orders, for the sale of the Securities, (iii) if trading generally on the Nasdaq Global Market, the American Stock Exchange or the New York Stock Exchange has been suspended, or minimum or maximum prices for trading have been fixed, or maximum ranges for prices for securities have been required, by either of said Exchanges or by order of the Commission or any other governmental authority, or if a banking moratorium has been declared by either Federal, Pennsylvania or New York authorities, (iv) if any condition specified in Section 5 shall not have been fulfilled when and as required to be fulfilled; (v) if there shall have been such material adverse changes in the condition or prospects of the Company, the MHCs or the Bank or the prospective market for the Company's Securities as in the Agent's + +38 + + + + + +good faith opinion would make it inadvisable to proceed with the offering, sale or delivery of the Securities; (vi) if, in the Agent's good faith opinion, the price for the Securities established by the Appraiser is not reasonable or equitable under then prevailing market conditions, or (vii) if the Offerings are not consummated on or prior to June 30, 2007. + +(b) If this Agreement is terminated pursuant to this Section, such termination shall be without liability of any party to any other party except as provided in Sections 2 and 4 hereof relating to the reimbursement of expenses and except that the provisions of Sections 6 and 7 hereof shall survive any termination of this Agreement. + +SECTION 10. NOTICES. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication. Notices to the Agent shall be directed to the Agent at 919 Third Avenue, 6 Floor, New York, New York 10022, attention of General Counsel, with a copy to Malizia Spidi & Fisch, PC at 901 New York Avenue, N.W., Suite 210 East, Washington, DC 20001; notices to the Company, the MHCs and the Bank shall be directed to any of them at 541 Lawrence Road, Broomall, Pennsylvania 19008. + +SECTION 11. PARTIES. This Agreement shall inure to the benefit of and be binding upon the Agent, the Company, the MHCs and the Bank and their respective successors. Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any person, firm or corporation, other than the Agent, the Company, the MHCs and the Bank and their respective successors and the controlling persons and the partners, officers and directors referred to in Sections 6 and 7 and their heirs and legal representatives, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision herein or therein contained. This Agreement and all conditions and provisions hereof and thereof are intended to be for the sole and exclusive benefit of the Agent, the Company, the MHCs and the Bank and their respective successors, and said controlling persons, partners, officers and directors and their heirs, partners, legal representatives, and for the benefit of no other person, firm or corporation. + +SECTION 12. ENTIRE AGREEMENT; AMENDMENT. This Agreement represents the entire understanding of the parties hereto with reference to the transactions contemplated hereby and supersedes any and all other oral or written agreements heretofore made, except for the engagement letter dated May 11, 2006, by and between the Agent and the Bank, relating to the Agent's providing conversion agent services to the Company and the Bank. No waiver, amendment or other modification of this Agreement shall be effective unless in writing and signed by the parties hereto. + +SECTION 13. GOVERNING LAW AND TIME. This Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to agreements made and to be performed in said State without regard to the conflicts of laws provisions thereof. Unless otherwise noted, specified times of day refer to Eastern time. + +SECTION 14. SEVERABILITY. Any term or provision of this Agreement which is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions of this Agreement or affecting the validity or enforceability of any of the terms or + +39 + +th + + + + + +provisions of this Agreement in any other jurisdiction. If any provision of this Agreement is so broad as to be unenforceable, the provision shall be interpreted to be only so broad as is enforceable. + +SECTION 15. HEADINGS. Sections headings are not to be considered part of this Agreement, are for convenience and reference only, and are not to be deemed to be full or accurate descriptions of the contents of any paragraph or subparagraph. + +[The next page is the signature page] + + + + + +40 + + + + + +If the foregoing is in accordance with your understanding of our agreement, please sign and return to the Company a counterpart hereof, whereupon this instrument, along with all counterparts, will become a binding agreement between the Agent on the one hand, and the Company, the MHCs and the Bank on the other in accordance with its terms. + + + +Very truly yours, + +Alliance Bancorp, Inc. of Pennsylvania + +By: + + + +Name: + + + +Title: + + + +Greater Delaware Valley Savings Bank + +d/b/a Alliance Bank + +By: + + + +Name: + + + +Title: + + + +Greater Delaware Valley Holdings, A Mutual Company + +By: + + + +Name: + + + +Title: + + + +Alliance Mutual Holding Company + +By: + + + +Name: + + + +Title: + + CONFIRMED AND ACCEPTED, + +as of the date first above written: + + SANDLER O'NEILL & PARTNERS, L.P. + + By: + +Sandler O'Neill & Partners Corp., the sole general partner + + + + By: + + + +Name: + + + +Title: \ No newline at end of file diff --git a/full_contract_txt/ALLISONTRANSMISSIONHOLDINGSINC_12_15_2014-EX-99.1-COOPERATION AGREEMENT.txt b/full_contract_txt/ALLISONTRANSMISSIONHOLDINGSINC_12_15_2014-EX-99.1-COOPERATION AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..7ea06705c858a77230d4f1a9ceb6c7e27824755c --- /dev/null +++ b/full_contract_txt/ALLISONTRANSMISSIONHOLDINGSINC_12_15_2014-EX-99.1-COOPERATION AGREEMENT.txt @@ -0,0 +1,183 @@ +Exhibit 99.1 + +COOPERATION AGREEMENT + +This Cooperation Agreement (this "Agreement") dated December 12, 2014, is by and among the persons and entities listed on Schedule A (collectively, the "ValueAct Group", and individually a "member" of the ValueAct Group), Allison Transmission Holdings, Inc. (the "Company") and Gregory P. Spivy, in his individual capacity and as a member of the ValueAct Group (the "ValueAct Designee"). + +WHEREAS, the ValueAct Group currently beneficially owns 19,125,204 shares of the common stock, par value $0.01 per share, of the Company (the "Common Stock"), which represents approximately 10.77% of the issued and outstanding shares of Common Stock. + +WHEREAS, the Nominating and Governance Committee of the Board (the "Nominating Committee") and the Company's Board of Directors (the "Board") have considered the qualifications of the ValueAct Designee and conducted such review as they have deemed appropriate. + +WHEREAS, the Board has determined that it is in the best interests of the Company to appoint the ValueAct Designee on the terms set forth in this Agreement. + +NOW, THEREFORE, In consideration of and reliance upon the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows: + +1. Board Nomination. + +(a) Subject to the satisfactory completion of the Company's customary background check, the Board shall appoint the ValueAct Designee to serve as a director beginning within ten (10) calendar days following receipt of the ValueAct Group's written request to the Company to have the ValueAct Designee appointed to the Board; provided that, at such time, the Board does not conclude in good faith and based on the written opinion of outside legal counsel that such appointment would constitute a breach of the directors' fiduciary duties. If the ValueAct Designee is appointed to the Board pursuant to this Section 1(a), the Company shall include the ValueAct Designee as a Class I Director, which term expires at the Company's 2016 annual meeting of stockholders. + +(b) As a condition to the ValueAct Designee's appointment to the Board, the ValueAct Group, including the ValueAct Designee, agrees to provide to the Company information required to be or customarily disclosed for directors, candidates for directors, and their affiliates and representatives in a proxy statement or other filings under applicable law or stock exchange rules or listing standards, information in connection with assessing eligibility, independence and other criteria applicable to directors or satisfying compliance and legal obligations, and such other information as reasonably requested by the Company from time to time with respect to the ValueAct Group and the ValueAct Designee. + +(c) The ValueAct Designee agrees that, at all times while serving as a member of the Board, he will (i) meet all director independence and other standards of the Company, the New York Stock Exchange and the Securities and Exchange Commission ("SEC") and applicable provisions of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the rules and regulations promulgated thereunder, including Rule 10A- 3; and (ii) be qualified to serve as a director under the Delaware General Corporation Law (the "DGCL") (clauses (i) and (ii), the "Conditions"). The ValueAct Designee will promptly advise the Nominating Committee if he ceases to satisfy any of the Conditions. + +(d) At all times while serving as a member of the Board, the ValueAct Designee shall comply with all policies, procedures, processes, codes, rules, standards and guidelines applicable to Board members, including the Company's Code of Business Conduct, Insider Trading Policy, Executive Stock Ownership Policy as in effect on the date hereof, and Corporate Governance Guidelines, and (except as permitted by the Confidentiality Agreement (as defined in Section 7 below)) preserve the confidentiality of Company business and information, including discussions or matters considered in meetings of the Board or Board committees to the extent not disclosed publicly by the Company. 1 + + + + + +(e) So long as the ValueAct Group collectively beneficially owns, in the aggregate, at least 7.5% of the outstanding Common Stock, if, during the Covered Period, a vacancy on the Board is created as a result of the ValueAct Designee's death, resignation, disqualification or removal, then the ValueAct Group and the Company (acting through the Board) shall work together in good faith to fill such vacancy or replace such nominee with an individual who (A) meets the Conditions, (B) meets the historical standards and criteria applied by the Company in nominating and appointing directors, and (C) is otherwise mutually acceptable (in each of their sole discretion) to the ValueAct Group and the Company, and thereafter such individual shall serve and/or be nominated as the "ValueAct Designee" under this Agreement. + +(f) The Company's obligations hereunder shall terminate immediately, and the ValueAct Designee shall promptly offer to resign from the Board, and any committee of the Board on which he then sits (and, if requested by the Company, promptly deliver his written resignation to the Board (which shall provide for his immediate resignation) it being understood that it shall be in the Board's sole discretion whether to accept or reject such resignation) if: (i) members of the ValueAct Group, collectively, cease to beneficially own at least 7.5% of the Company's outstanding Common Stock; (ii) the ValueAct Designee ceases to satisfy the conditions set forth in clauses (c)-(d) above; (iii) a member of the ValueAct Group, including the ValueAct Designee, otherwise ceases to comply or breaches any of the terms of this Agreement or the Confidentiality Agreement; or (iv) the employment of the ValueAct Designee with the ValueAct Group is terminated for any reason. The ValueAct Group agrees to cause the ValueAct Designee to resign from the Board if the ValueAct Designee fails to resign if and when requested pursuant to this Section 1(f). Notwithstanding the foregoing, in the event of the occurrence of an event set forth in subsection (ii) or (iv) above, the provisions of Section 1(e) must be complied with before the Company's obligations hereunder may terminate. + +(g) The percentage thresholds set forth in clauses (e) and (f) above shall not be deemed unsatisfied to the extent a failure to maintain the specified ownership thresholds is the result of share issuances or similar Company actions that increase the number of outstanding shares of Common Stock. + +2. Standstill. + +(a) Each member of the ValueAct Group agrees that, during the Covered Period, (unless specifically requested in writing by the Company, acting through a resolution of a majority of the Company's directors not including the ValueAct Designee), it shall not, and shall cause each of its Affiliates or Associates (as such terms are defined in Rule 12b-2 promulgated by the SEC under the Exchange Act) (collectively and individually, the "ValueAct Affiliates," provided that no portfolio company of the ValueAct Group shall be deemed a "ValueAct Affiliate" so long as such portfolio company (A) has not discussed any of the actions set forth in this subsection (a) with the ValueAct Group or the ValueAct Designee, (B) has not received from the ValueAct Group or the ValueAct Designee information concerning the Company or its business, and (C) is not acting at the request of, in coordination with or on behalf of the ValueAct Group or the ValueAct Designee), not to, directly or indirectly, in any manner, alone or in concert with others: + +(i) make, engage in, or in any way participate in, directly or indirectly, any "solicitation" of proxies (as such terms are used in the proxy rules of the SEC but without regard to the exclusion set forth in Rule 14a-1(l)(2)(iv) of the Exchange Act) or consents to vote, or seek to advise, encourage or influence any person with respect to the voting of any securities of the Company or any securities convertible or exchangeable into or exercisable for any such securities (collectively, "securities of the Company") for the election of individuals to the Board or to approve stockholder proposals, or become a "participant" in any contested "solicitation" for the election of directors with respect to the Company (as such terms are defined or used under the Exchange Act) (other than a "solicitation" or acting as a "participant" in support of all of the nominees of the Board at any stockholder meeting) or make or be the proponent of any stockholder proposal (pursuant to Rule 14a-8 under the Exchange Act or otherwise); + +(ii) form, join, encourage, influence, advise or in any way participate in any Group (as such term is defined in Section 13(d)(3) of the Exchange Act) with any persons who are not ValueAct Affiliates 2 + + + + + +with respect to any securities of the Company or otherwise in any manner agree, attempt, seek or propose to deposit any securities of the Company in any voting trust or similar arrangement, or subject any securities of the Company to any arrangement or agreement with respect to the voting thereof, except as expressly set forth in this Agreement; + +(iii) acquire, offer or propose to acquire, or agree to acquire, directly or indirectly, whether by purchase, tender or exchange offer, through the acquisition of control of another person, by joining a partnership, limited partnership, syndicate or other group (including any group of persons that would be treated as a single "person" under Section 13(d) of the Exchange Act), through swap or hedging transactions or otherwise, any securities of the Company or any rights decoupled from the underlying securities of the Company that would result in the ValueAct Group (together with the ValueAct Affiliates) owning, controlling or otherwise having any beneficial or other ownership interest in more than 12% in the aggregate of the shares of Common Stock outstanding at such time; provided, that, nothing herein will require Common Stock to be sold to the extent the ValueAct Group and the ValueAct Affiliates, collectively, exceed the ownership limit under this paragraph as the result of a share repurchase or similar Company actions that reduces the number of outstanding shares of Common Stock; + +(iv) sell, offer or agree to sell directly or indirectly, through swap or hedging transactions or otherwise, the securities of the Company or any rights decoupled from the underlying securities of the Company held by the ValueAct Group or any ValueAct Affiliate to any person or entity not a (A) party to this Agreement, (B) member of the Board, (C) officer of the Company or (D) ValueAct Affiliate (any person or entity not set forth in clauses (A)-(D) shall be referred to as a "Third Party"), that would knowingly result in such Third Party, together with its affiliates and associates, owning, controlling or otherwise having any beneficial or other ownership interest in the aggregate of more than 4.9% of the shares of Common Stock outstanding at such time, except in a transaction approved by the Board; + +(v) effect or seek to effect, offer or propose to effect, cause or participate in, or in any way assist or facilitate any other person to effect or seek, offer or propose to effect or participate in, any tender or exchange offer, merger, consolidation, acquisition, scheme, arrangement, business combination, recapitalization, reorganization, sale or acquisition of material assets, liquidation, dissolution or other extraordinary transaction involving the Company or any of its subsidiaries or joint ventures or any of their respective securities (each, an "Extraordinary Transaction"), or make any public statement with respect to an Extraordinary Transaction; provided, however, that this clause shall not preclude the tender by the ValueAct Group or a ValueAct Affiliate of any securities of the Company into any tender or exchange offer or vote by the ValueAct Group or a ValueAct Affiliate of any securities of the Company with respect to any Extraordinary Transaction; + +(vi) engage in any short sale or any purchase, sale or grant of any option, warrant, convertible security, stock appreciation right, or other similar right (including, without limitation, any put or call option or "swap" transaction) with respect to any security (other than a broad- based market basket or index) that includes, relates to or derives any significant part of its value from a decline in the market price or value of the securities of the Company; + +(vii) (A) call or seek to call any meeting of stockholders, including by written consent, (B) seek representation, on or nominate any candidate to, the Board, except as set forth herein, (C) seek the removal of any member of the Board, (D) solicit consents from stockholders or otherwise act or seek to act by written consent, (E) conduct a referendum of stockholders, or (F) make a request for any stockholder list or other Company books and records, whether pursuant to Section 220 of the DGCL or otherwise; + +(viii) take any action in support of or make any proposal or request that constitutes: (A) advising, controlling, changing or influencing the Board or management of the Company, including any plans or proposals to change the number or term of directors or to fill any vacancies on the Board; (B) any material change in the capitalization, stock repurchase programs and practices or dividend policy of the Company; (C) any other material change in the Company's management, business or corporate structure; (D) seeking to have the Company waive or make amendments or modifications to the Company's Certificate of Incorporation or Bylaws, or other actions that may impede or facilitate the acquisition of control of the Company by any person; (E) causing a class of securities of the Company to be delisted from, or to cease to be authorized to be quoted on, any securities exchange; or (F) causing a class of securities of the Company to become eligible for termination of registration pursuant to Section 12(g)(4) of the Exchange Act; 3 + + + + + +(ix) disparage or cause to be disparaged the Company or Affiliates thereof, any of its current or former officers, or directors; + +(x) make any public disclosure, announcement or statement regarding any intent, purpose, plan or proposal with respect to the Board, the Company, its management, policies or affairs, any of its securities or assets or this Agreement that is inconsistent with the provisions of this Agreement; + +(xi) enter into any substantive discussions, negotiations, agreements, or understandings with any Third Party with respect to any of the foregoing, or advise, assist, knowingly encourage or seek to persuade any Third Party to take any action or make any statement with respect to any of the foregoing, or otherwise take or cause any action or make any statement inconsistent with any of the foregoing; or + +(xii) request, directly or indirectly, any amendment or waiver of the foregoing. + +The foregoing provisions of this Section 2(a) shall not be deemed to prohibit the ValueAct Group or its directors, officers, partners, employees, members or agents (acting in such capacity) ("Representatives") from communicating privately with the Company's directors, officers or advisors so long as such communications are not intended to, and would not reasonably be expected to, require any public disclosure of such communications. + +(b) Each member of the ValueAct Group shall cause all shares of Common Stock beneficially owned, directly or indirectly, by it, or by any ValueAct Affiliate, to be present for quorum purposes and to be voted, at the Company's annual and special stockholder meetings and at any adjournments or postponements thereof, and further agrees that at the 2015 annual stockholder meeting they shall vote in favor of (i) all directors nominated by the Board for election at such meeting and (ii) in accordance with the Board's recommendation with respect to any proposals for the election of directors that may be the subject of stockholder action at such meeting. + +(c) The ValueAct Group acknowledges that the ValueAct Designee shall have all of the rights and obligations, including fiduciary duties to the Company and its stockholders, of a director under applicable law and the Company's organizational documents while the ValueAct Designee is serving on the Board. Notwithstanding the foregoing, nothing in this Section 2 shall limit any actions that may be taken by the ValueAct Designee acting solely as a director of the Company consistent with his fiduciary duties as a director of the Company (it being understood and agreed that the ValueAct Group and the ValueAct Affiliates shall not seek to do indirectly through the ValueAct Designee anything that would be prohibited if done by the ValueAct Group or the ValueAct Affiliates). + +For purposes of this Agreement the terms "person" or "persons" shall mean any individual, corporation (including not-for-profit), general or limited partnership, limited liability or unlimited liability company, joint venture, estate, trust, association, organization or other entity of any kind or nature. + +3. Representations of the Company. The Company represents and warrants as follows: (a) the Company has the power and authority to execute, deliver and carry out the terms and provisions of this Agreement and to consummate the transactions contemplated hereby; and (b) this Agreement has been duly and validly authorized, executed and delivered by the Company, constitutes a valid and binding obligation and agreement of the Company and is enforceable against the Company in accordance with its terms. + +4. Representations of the ValueAct Group. The ValueAct Group, jointly and severally, represent and warrant as follows: (a) the ValueAct Group has the power and authority to execute, deliver and carry out the terms and provisions of this Agreement and to consummate the transactions contemplated hereby; (b) this Agreement has been duly and validly authorized, executed and delivered by the ValueAct Group, constitutes a valid and binding obligation and agreement of the ValueAct Group and is enforceable against the ValueAct Group in accordance with its terms; and (c) the ValueAct Group, together with the ValueAct Affiliates, beneficially owns, directly or indirectly, an aggregate of 19,125,204 shares of Common Stock and such shares of Common Stock constitute all of the Common Stock beneficially owned by the ValueAct Group and the ValueAct Affiliates or in which the ValueAct Group or the ValueAct Affiliates have any interest or right to acquire, whether through derivative securities, voting agreements or otherwise; and (d) as of the date of this Agreement, the ValueAct Designee satisfies all of the Conditions. 4 + + + + + +5. Termination. + +(a) This Agreement is effective as of the date hereof and shall remain in full force and effect for the period (the "Covered Period") commencing on the date hereof and ending on the date that is the earliest of: (i) the Company's failure to appoint the ValueAct Designee to the Board following the ValueAct Group's written request to the Company to have the ValueAct Designee appointed to the Board pursuant to Section 1(a) of this Agreement; (ii) the failure of the Company to comply in good faith with Section 1(e) of this Agreement; or (iii) the date which is the 60t h day prior to the Company's 2016 annual meeting of stockholders. + +(b) The provisions of Section 1(d) this Section 5, Section 7 through Section 16 (and, for the avoidance of doubt, the Confidentiality Agreement) shall survive the termination of this Agreement. No termination pursuant to Section 5(a) shall relieve any party hereto from liability for any breach of this Agreement prior to such termination. + +6. Public Announcement and SEC Filing. + +(a) The Company shall file promptly a Form 8-K reporting entry into this Agreement (the "Form 8-K") and appending or incorporating by reference this Agreement as an exhibit thereto. + +(b) The ValueAct Group shall promptly, but in no case prior to the date of filing of the Form 8-K by the Company pursuant to Section 6(a) hereof, file an amendment to its Schedule 13D with respect to the Company filed with the SEC on November 13, 2013 (the "ValueAct Schedule 13D"), reporting the entry into this Agreement and amending applicable items to conform to its obligations hereunder. None of the ValueAct Group, the ValueAct Affiliates or the ValueAct Designee shall (i) issue a press release in connection with this Agreement or the actions contemplated hereby or (ii) otherwise make any public statement, disclosure or announcement with respect to this Agreement or the actions contemplated hereby, other than as mutually agreed to by the Company and the ValueAct Group. + +(c) The Company shall promptly issue a press release in connection with this Agreement and in the form attached hereto as Exhibit A (the "Press Release"), which is expressly agreed to by the ValueAct Group. + +7. Confidentiality Agreement. The Company hereby agrees that, notwithstanding any other provision of this Agreement to the contrary, the ValueAct Group may be provided confidential information in accordance with and subject to the terms of a Confidentiality Agreement in the form attached hereto as Exhibit B (the "Confidentiality Agreement"), after the Confidentiality Agreement has been mutually executed and delivered concurrently with the appointment of the ValueAct Designee to the Board pursuant to the terms of this Agreement. + +8. Compensation. The ValueAct Designee shall participate in all director compensation and benefit programs in which the Company's other non-employee directors participate. The Company acknowledges that pursuant to the ValueAct Group's policies, cash, equity awards and other property received by the ValueAct Designee are held by such person for the benefit of certain members of the ValueAct Group. The Company agrees that it will seek board or appropriate committee approval of all stock-based awards made to the ValueAct Designee so that the grant of such awards shall be exempt from Section 16(b) of the Exchange Act by virtue of Rule 16b-3 thereunder. Without limiting the foregoing, the Company also acknowledges that as a result of the ValueAct Designee's service on the Board, members of the ValueAct Group may be considered directors of the Company by deputization under applicable interpretations of Section 16 of the Exchange Act. The Company agrees that it will seek board or appropriate committee approval for purposes of Rule 16b-3 for all transactions in classes of Company securities subject to Section 16 and involving the ValueAct Designee or any member of the ValueAct Group who may be considered a "director by deputization" or who may be deemed to have an indirect interest in the transaction in question. + +9. Miscellaneous. The parties agree that irreparable damage would occur in the event any of the provisions of this Agreement were not performed in accordance with the terms hereof and that such damage would not be adequately compensable in monetary damages. Accordingly, the parties hereto shall be entitled to an injunction or injunctions to prevent breaches of this Agreement, to enforce specifically the terms and provisions of this Agreement exclusively in the Court of Chancery or other federal or state courts of the State of Delaware and to 5 + + + + + +require the resignation of the ValueAct Designee from the Board commencing on the date that is 10 days following the date that the ValueAct Designee and/or the ValueAct Group materially breaches its obligations under this Agreement, provided, that, such breach has not been cured prior to the expiration of such 10-day period, in addition to any other remedies at law or in equity, and each party agrees it will not take any action, directly or indirectly, in opposition to another party seeking relief. Each of the parties hereto agrees to waive any bonding requirement under any applicable law, in the case any other party seeks to enforce the terms by way of equitable relief. Furthermore, each of the parties hereto (a) consents to submit itself to the personal jurisdiction of the Court of Chancery or other federal or state courts of the State of Delaware in the event any dispute arises out of this Agreement or the transactions contemplated by this Agreement, (b) agrees that it shall not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court, (c) agrees that it shall not bring any action relating to this Agreement or the transactions contemplated by this Agreement in any court other than the Court of Chancery or other federal or state courts of the State of Delaware, and each of the parties irrevocably waives the right to trial by jury, and (d) each of the parties irrevocably consents to service of process by a reputable overnight mail delivery service, signature requested, to the address set forth in Section 11 of this Agreement or as otherwise provided by applicable law. THIS AGREEMENT SHALL BE GOVERNED IN ALL RESPECTS, INCLUDING WITHOUT LIMITATION VALIDITY, INTERPRETATION AND EFFECT, BY THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO CONTRACTS EXECUTED AND TO BE PERFORMED WHOLLY WITHIN SUCH STATE WITHOUT GIVING EFFECT TO THE CHOICE OF LAW PRINCIPLES OF SUCH STATE. + +10. Expenses. All attorneys' fees, costs and expenses incurred in connection with this Agreement and all matters related hereto will be paid by the party incurring such fees, costs or expenses. + +11. Entire Agreement; Amendment. This Agreement and the Confidentiality Agreement contain the entire agreement and understanding of the parties with respect to the subject matter hereof and supersede any and all prior and contemporaneous agreements, memoranda, arrangements and understandings, both written and oral, between the parties, or any of them, with respect to the subject matter hereof. This Agreement may be amended only by an agreement in writing executed by the parties hereto, and no waiver of compliance with any provision or condition of this Agreement and no consent provided for in this Agreement shall be effective unless evidenced by a written instrument executed by the party against whom such waiver or consent is to be effective. No failure or delay by a party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any right, power or privilege hereunder. + +12. Notices. All notices, consents, requests, instructions, approvals and other communications provided for herein and all legal process in regard hereto shall be in writing and shall be deemed validly given, made or served, when delivered in person or sent by overnight courier, when actually received during normal business hours at the address specified in this subsection: If to the Company: Allison Transmission Holdings, Inc. Mail Code L-25 One Allison Way Indianapolis, IN 46222-3271 Attention: General Counsel + +If to the ValueAct Group: ValueAct Capital Management, L.P. One Letterman Drive Building D, 4t h Floor San Francisco, CA 94129 Attention: General Counsel + +13. Severability. If at any time subsequent to the date hereof, any provision of this Agreement shall be held by any court of competent jurisdiction to be illegal, void or unenforceable, such provision shall be of no force and effect, but the illegality or unenforceability of such provision shall have no effect upon the legality or enforceability of any other provision of this Agreement. 6 + + + + + +14. Counterparts. This Agreement may be executed in two or more counterparts either manually or by electronic or digital signature (including by facsimile or electronic mail transmission), each of which shall be deemed to be an original and all of which together shall constitute a single binding agreement on the parties, notwithstanding that not all parties are signatories to the same counterpart. + +15. No Third Party Beneficiaries; Assignment. This Agreement is solely for the benefit of the parties hereto and is not binding upon or enforceable by any other persons. No party to this Agreement may assign its rights or delegate its obligations under this Agreement, whether by operation of law or otherwise, and any assignment in contravention hereof shall be null and void. Nothing in this Agreement, whether express or implied, is intended to or shall confer any rights, benefits or remedies under or by reason of this Agreement on any persons other than the parties hereto, nor is anything in this Agreement intended to relieve or discharge the obligation or liability of any third persons to any party. + +16. Interpretation and Construction. When a reference is made in this Agreement to a Section, such reference shall be to a Section of this Agreement, unless otherwise indicated. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Whenever the words "include," "includes" and "including" are used in this Agreement, they shall be deemed to be followed by the words "without limitation." The words "hereof, "herein" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The word "will" shall be construed to have the same meaning as the word "shall." The words "dates hereof" will refer to the date of this Agreement. The word "or" is not exclusive. The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms. Any agreement, instrument, law, rule or statute defined or referred to herein means, unless otherwise indicated, such agreement, instrument, law, rule or statute as from time to time amended, modified or supplemented. Each of the parties hereto acknowledges that it has been represented by counsel of its choice throughout all negotiations that have preceded the execution of this Agreement, and that it has executed the same with the advice of said independent counsel. Each party cooperated and participated in the drafting and preparation of this Agreement and the documents referred to herein, and any and all drafts relating thereto exchanged among the parties shall be deemed the work product of all of the parties and may not be construed against any party by reason of its drafting or preparation. Accordingly, any rule of law or any legal decision that would require interpretation of any ambiguities in this Agreement against any party that drafted or prepared it is of no application and is hereby expressly waived by each of the parties hereto, and any controversy over interpretations of this Agreement shall be decided without regards to events of drafting or preparation. + +[Signature Pages Follow] 7 + + + + + +IN WITNESS WHEREOF, each of the parties hereto has executed this COOPERATION AGREEMENT or caused the same to be executed by its duly authorized representative as of the date first above written. Allison Transmission Holdings, Inc. + +By: /s/ Eric C. Scroggins Name: Eric C. Scroggins Title: Vice President, General Counsel & Secretary [Signature Page to Cooperation Agreement] + + + + + +IN WITNESS WHEREOF, each of the parties hereto has executed this COOPERATION AGREEMENT or caused the same to be executed by its duly authorized representative as of the date first above written. + +VA Partners I, LLC By: /s/ George F. Hamel, Jr. Name: George F. Hamel, Jr. Title: Chief Operating Officer + +ValueAct Capital Master Fund, L.P. By: /s/ George F. Hamel, Jr. Name: George F. Hamel, Jr. Title: Chief Operating Officer + +ValueAct Capital Management, L.P. By: /s/ George F. Hamel, Jr. Name: George F. Hamel, Jr. Title: Chief Operating Officer + +ValueAct Capital Management, LLC By: /s/ George F. Hamel, Jr. Name: George F. Hamel, Jr. Title: Chief Operating Officer + +ValueAct Holdings, L.P. By: /s/ George F. Hamel, Jr. Name: George F. Hamel, Jr. Title: Chief Operating Officer + +ValueAct Holdings GP, LLC By: /s/ George F. Hamel, Jr. Name: George F. Hamel, Jr. Title: Chief Operating Officer /s/ Gregory P. Spivy Gregory P. Spivy [Signature Page to Cooperation Agreement] + + + + + +Schedule A + +Members of ValueAct Group + +VA Partners I, LLC + +ValueAct Capital Master Fund, L.P. + +ValueAct Capital Management, L.P. + +ValueAct Capital Management, LLC + +ValueAct Holdings, L.P. + +ValueAct Holdings GP, LLC + +Gregory P. Spivy \ No newline at end of file diff --git a/full_contract_txt/AMBASSADOREYEWEARGROUPINC_11_17_1997-EX-10.28-ENDORSEMENT AGREEMENT.txt b/full_contract_txt/AMBASSADOREYEWEARGROUPINC_11_17_1997-EX-10.28-ENDORSEMENT AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..c72a774b3ae0ab28ddc7e91e743c48e8cfe1a5ab --- /dev/null +++ b/full_contract_txt/AMBASSADOREYEWEARGROUPINC_11_17_1997-EX-10.28-ENDORSEMENT AGREEMENT.txt @@ -0,0 +1,269 @@ +Exhibit 10.28 + + ENDORSEMENT AGREEMENT + + This Endorsement Agreement ("Agreement") is made and entered into as of August 24, 1995, by and among the following parties: + + (a) Kathy Ireland, Inc. ("KI Inc."), furnishing the services of Kathy Ireland ("KI"), c/o The Sterling/Winters Co., 1900 Avenue of the Stars, Suite #1640, Los Angeles, California 90067; + + (b) The Sterling/Winters Co. ("SW"), 1900 Avenue of the Stars, Suite #1640, Los Angeles, California 90067; and + + (c) Diplomat Ambassador Eyewear Group ("Diplomat"), 1010 Arch Street, 3rd Floor, Philadelphia, Pennsylvania 19107. + + 1. Recitals. + + (a) Whereas Diplomat has created a new product line to be known as "Kathy Ireland Eyewear" ("KI Eyewear"); + + (b) Whereas Diplomat estimates on a non-binding basis that wholesale sales of KI Eyewear will reach $ during the first License Year, $ during the 2nd License Year, $ during the 3rd License Year, and $ during the 4th License Year (as those License Years are defined in subparagraph 3.(b) of this Agreement); + + (c) Whereas Diplomat desires to obtain the right to use the name, likeness and endorsement of KI in connection with the advertisement, promotion and sale of KI Eyewear; and + + (d) Whereas KI, Inc. has the authority to grant the right to use KI's name, likeness and endorsement to Diplomat in connection with the advertisement, promotion and sale of KI Eyewear and desires to do so; + + (e) NOW THEREFORE, for and in consideration of the mutual promises and conditions contained in this Agreement, the parties hereby agree as follows. + + 2. Grant of License. + + (a) Products. Upon the terms and conditions set forth in this Agreement, KI, Inc. hereby grants to Diplomat and Diplomat hereby accepts the right, license and privilege of utilizing KI's name and likeness solely upon and in connection with the manufacture, sale and distribution of the following products: + + (1) sunglasses, eyeglasses, readers and ophthalmic frames; + + 1 + + (2) optical cases, optical eye chains, eye pins, and lens cleaning kits sold only in optical retailers; and + + (3) such other optical accessories as the parties shall agree. + + (b) Territory. The license hereby granted extends worldwide. + + (c) Term. The term of the license hereby granted shall commence August 1, 1995 and continue until January 30, 2000, unless sooner terminated in the manner provided in the immediately succeeding sentence or as otherwise provided in this Agreement. Notwithstanding the foregoing, if the management of Kmart stores elects not to carry KI eyewear prior to the end of the first license year (January 30, 1997), then either party shall have the right to terminate this Agreement as of such date. + + 3. Terms of Payment. + + (a) Rate. Diplomat agrees to pay KI, Inc. as royalty a sum equal to % of the net wholesale volume of the products covered by this Agreement by Diplomat and its affiliated, associated, or subsidiary companies. The term "net wholesale volume" shall mean gross sales to all customers; less returns, trade discounts and cash discounts; but no deduction shall be made for other discounts or uncollectible accounts. No costs incurred in the manufacture, sale, distribution, or exploitation of the products covered by this Agreement shall be deducted from any royalty payable by Diplomat. + + (b) Minimum Royalties. Diplomat agrees to pay KI, Inc. the minimum royalties set forth below as a minimum guarantee against royalties to be paid to KI, Inc. under subparagraph 3.(a), above: + + (1) 1st License Year (8/1/95 - 1/30/97): $ (2) 2nd License Year (2/1/97 - 1/30/98): $ (3) 3rd License Year (2/1/98 - 1/30/99): $ (4) 4th License Year (2/1/99 - 1/30/2000): $ + + + + + +The minimum royalty for the 1st License Year shall be paid as follows: $ upon the signing of the Deal Memo dated August 24, 1995, the balance of $ to be paid in six (6) equal, consecutive, monthly installments of $ commencing with the month in which this Agreement is signed. No part of the minimum royalty for the first License Year shall in any event be repayable to Diplomat. The minimum royalty for the 2nd, 3rd and 4th License Years shall be made in four equal installments payable on February 1st, May 1st, August 1st and November 1st of each such License Year. Notwithstanding the foregoing, if royalties paid by Diplomat to KI, Inc. on net + + 2 + +wholesale volume for any particular License Year under subparagraph 3(a) of this Agreement should exceed the minimum royalties remaining to be paid for that same License Year under this subparagraph 3(b), then no further payments of minimum royalties for such License Year shall be required under this subparagraph 3(b). + + (c) Periodic Statements. Within thirty (30) days after the initial shipment of the products covered by this Agreement, and promptly on the 15th of each calendar month thereafter, Diplomat shall furnish to KI, Inc. complete and accurate statements certified to be accurate by Diplomat showing the number, description and gross sales price, itemized deductions from gross sales price, and net sales price of the products covered by this Agreement distributed and/or sold by Diplomat during the preceding calendar month, together with any returns made during the preceding calendar month. Such statements shall be furnished to KI, Inc. whether or not any of the products have been sold during the preceding calendar month. + + (d) Royalty Payments. Royalties in excess of the minimum royalty shall be due on the 25th day of the month following the calendar month in which they are earned, and payment shall accompany the statements furnished pursuant to subparagraph (c), above. The receipt or acceptance by KI, Inc. of any of the statements furnished pursuant to this Agreement, or of any royalties paid hereunder, or the cashing of any royalty checks paid hereunder, shall not preclude KI, Inc. from questioning the correctness of such statements or payments, provided all such questions are raised with Diplomat within two years of the date of KI Inc's receipt of the statement or payment in question. In the event any inconsistencies or mistakes are discovered in such statements or payments, they shall immediately be rectified and the appropriate payments made by Diplomat. + + 4. Exclusivity. + + The license hereby granted shall be exclusive as to the products described in subparagraphs 2.(a)(1) and (2) of this Agreement, but nonexclusive as to all other products covered by this Agreement. Nothing in this Agreement shall be construed to prevent KI, Inc. from granting any other licenses for the use of KI's name or likeness, or from utilizing KI's name and likeness in any manner whatsoever, except that KI, Inc. agrees that except as provided herein it will grant no other licenses for the territory to which this license extends for the use of KI's name and likeness in connection with the sale of the products described in subparagraphs 2.(a)(1) and (2) of this Agreement effective during the term of this Agreement. + + 5. Personal Endorsement and Appearances. + + (a) Endorsement. KI, Inc. agrees that KI shall endorse KI Eyewear and that KI will use her best efforts to wear KI Eyewear whenever reasonably possible and appropriate, with KI to have sole, unfettered discretion as to where and when to wear KI Eyewear. + + 3 + + (b) USA Appearance. KI will make one (1) personal appearance per License Year during the period of this Agreement on behalf of Diplomat at the Vision Expo in New York, New York, subject to the terms of this paragraph. Such appearance shall be for the purpose of signing autographs, shall last for a period of up to three (3) hours, and shall be subject to KI's schedule and availability. Diplomat, at its own expense, shall provide KI with a hair and make-up assistant of KI's choosing for each personal or media appearance required under this Agreement. + + (c) Travel. Travel expenses of KI in connection with all scheduled personal appearances under this Agreement, as well the travel expenses of KI's child, the child's nanny, KI's hair and make-up assistant of KI's choosing, and two (2) additional traveling companions of KI's choosing (collectively referred to as KI's "entourage"), shall be provided by Diplomat. KI and the members of her entourage shall travel via first class air and portal-to-portal limousine ground transportation. In addition, KI and the members of her entourage shall be lodged in first class hotel accommodations and all of them shall be reimbursed for all meals and other incidental expenses in connection with such appearances. All the above travel expenses of KI and the members of her entourage shall be billed directly to Diplomat. For purposes of this paragraph (c), the term "travel expenses" shall include + + (d) Photo Sessions. KI will participate in up to two (2) photo sessions per License Year during the period of this Agreement on behalf of Diplomat at a mutually acceptable time and place. The photo sessions shall be scheduled at KI's convenience upon not less than two (2) weeks prior notice, and shall be subject to KI's preexisting personal and professional commitments. The photo sessions shall be up to two (2) consecutive days in duration, each day to consist of no more than eight (8) working hours. The photo shoots shall be + + + + + +produced by SW, approved in writing by Diplomat (which approval shall not be unreasonably withheld), and all images produced from the photo sessions shall be the property of SW. The parties agree that all images from the photo sessions shall be retouched at the expense of Diplomat. In recognition of SW's expenses in connection with the above photo sessions, Diplomat shall pay SW the sum of $ per day for each day (or partial day) of such photo sessions. It is understood by the parties that such sum shall include all expenses required to provide Diplomat with positive film (excluding travel expenses of KI, as set forth in this Agreement), and that such sum contemplates a typical location for such photo sessions. If a more elaborate set-up for such photo sessions is required, and such set-up is mutually agreed to by the parties, then the above sum shall be increased to such amount as the parties shall agree. The above sum shall not include retouching images. + + (e) Videotapes. KI will participate in the production of up to one (1) product information/sales video per License Year during the period of this Agreement on behalf of Diplomat at a mutually acceptable time and place. The video production sessions shall be scheduled at KI's convenience upon not less than two (2) weeks prior notice, and shall be subject to KI's preexisting personal and professional commitments. The video production sessions shall be up to two (2) consecutive days + + 4 + +in duration, each day to consist of no more than eight (8) working hours. The video production sessions shall be produced by SW, approved in writing by Diplomat (which approval shall not be unreasonably withheld), and all images produced from the video production sessions shall be the property of SW. In recognition of SW's expenses in connection with such video production sessions, Diplomat shall pay SW a sum per day for each day (or partial day) of such sessions, such sum to be agreed upon by the parties. It is understood by the parties that such sum shall include all expenses required to provide Diplomat with an acceptable video (excluding travel expenses of KI, as set forth in this Agreement). + + (f) Scope of License. The license granted to Diplomat in subparagraph 2(a) of this Agreement shall include the right to use the photos and videotapes referred to in subparagraphs 5(d) and 5(e) of this Agreement in connection with the marketing, distribution and sale of the products described in subparagraph 2(a) of this Agreement, subject to the prior approval of KI, Inc. + + 6. Good Will, Etc. + + Diplomat recognizes the great value of the good will associated with KI's name and acknowledges that (a) KI's name, and all rights and good will pertaining to KI's name, belong exclusively to KI, Inc. and (b) that KI's name has a secondary meaning in the mind of the public. + + 7. KI, Inc.'s Title and Protection of KI. Inc.'s Rights. + + (a) Diplomat agrees that it will not at any time during the term of this Agreement or thereafter attack (i) KI, Inc.'s title to, or rights in and to, KI's name or (ii) the validity of this license. KI, Inc. hereby indemnifies Diplomat and undertakes to hold it harmless against only those claims or suits (i) arising solely out of the authorized use of KI's name by Diplomat in accordance with this Agreement and (ii) brought by those persons or entities to whom KI, Inc. has licensed the use of KI's name and likeness. Prompt notice shall be given by Diplomat to KI, Inc. of any such claim or suit. In addition, KI, Inc. shall have the option to undertake and conduct the defense of any suit so brought and no settlement of any such claim or suit shall be made without the prior written consent of KI, Inc. + + (b) Diplomat shall notify KI, Inc. in writing of any infringements or imitations by others of KI's name on products similar to those covered by this Agreement that may come to Diplomat's attention, and KI, Inc. shall have the sole right to determine whether or not any action shall be taken in connection with such infringements or imitations. Diplomat shall not institute any suit or take any action in connection with any such infringements or imitations without first obtaining the written consent of KI, Inc. + + 5 + + 8. Indemnification by Licensee and Product Liability Insurance. + + Diplomat hereby indemnifies KI, Inc. and KI, undertakes to defend KI, Inc. and KI against, and hold KI, Inc. and KI harmless from, any claims, suits, loss and damage (including attorneys' fees and costs) arising out of (a) any allegedly unauthorized use of any patent, process, idea, method, or device by Diplomat in connection with the products covered by this Agreement, (b) any alleged defects in the products covered by this Agreement, and (c) any other alleged action by Diplomat. Diplomat agrees that it will obtain, at its own expense, product liability insurance from a recognized insurance company which is qualified to do business in the State of California providing adequate protection (at least in the amount of $ ) for KI, Inc., KI and Diplomat against any claims, suits, loss or damage arising out of any alleged defects in the products. As proof of such insurance, a fully paid certificate of insurance naming KI, Inc. and KI as an insured party will be submitted to KI, Inc. by Diplomat for KI, Inc.'s prior approval before any product is distributed or sold, and at the latest within thirty (30) days after the date first written above. Any proposed change in certificates of insurance shall be submitted to KI, Inc. for its prior approval. KI, Inc. shall be entitled to a copy of the + + + + + +then prevailing certificate of insurance, which shall be furnished KI, Inc. by Diplomat. As used in the first 2 sentences of this paragraph 6, "KI, Inc." shall also include the officers, directors, agents, and employees of the KI, Inc., or any of its subsidiaries or affiliates. + + 9. Quality of Merchandise. + + Diplomat agrees that the products covered by this Agreement shall be of such style, appearance and quality as to be adequate and suited to their exploitation to the best advantage, protection and enhancement of KI's name and the good will pertaining to such name. Diplomat further agrees that (a) such products will be manufactured, sold and distributed in accordance with all applicable Federal, State and local laws, (b) that the policy of sale, distribution, and/or exploitation by Diplomat shall be to the best advantage of KI, Inc. and KI, and (c) that the latter policy shall in no manner reflect adversely upon the good name of KI and KI, Inc. To this end, Diplomat shall, before selling or distributing any of the products, furnish to KI, Inc. for its approval, free of cost, a reasonable number of samples of each product and the cartons, containers, packing and wrapping material for such products. The quality and style of such products, as well as of any carton, container or packing or wrapping material, shall be subject to the approval of KI, Inc., which shall not be unreasonably withheld or delayed. Failure to reject any product, carton, container, or packing or wrapping within 15 days of receipt of such item or items by KI, Inc. shall be deemed an acceptance of the quality and style of such item or items. After samples have been approved pursuant to this paragraph, Diplomat shall not depart therefrom in any material respect without KI, Inc.'s prior written consent. From time to time after Diplomat has commenced selling the products, and upon KI, Inc.'s written request, Diplomat shall furnish without cost to KI, Inc. not more than ten (10) additional random samples of each product being manufactured and sold by Diplomat under this Agreement, together with any containers and packing and wrapping material used in connection with such products. + + 6 + + 10. Labeling. + + (a) Diplomat agrees that it will cause to appear on or within each product sold by it under this license and on or within all advertising, promotional, or display material bearing KI's name (i) the notice "Copyright (c) (year) ______" and any other notice desired by KI, Inc and (ii) where such product, advertising, promotional, or display material bears a trademark or service mark, appropriate statutory notice of registration or application for registration thereof. In the event that any product is marketed in a carton, container, packing or wrapping material bearing KI's name, such notice shall also appear upon the said carton, container, packing or wrapping material. Each and every tag, label, imprint, or other device containing any such notice and all advertising, promotional or display material bearing KI's name shall be submitted by Diplomat to KI, Inc. for its written approval prior to use by Diplomat. Approval by KI, Inc. shall not constitute waiver of KI, Inc.'s rights or Diplomat's duties under any provision of this Agreement. + + (b) Diplomat agrees to cooperate fully and in good faith with KI, Inc., at the expense of KI, Inc., for the purpose of securing and preserving KI, Inc.'s (or any grantor of KI, Inc.'s) rights in and to KI's name. It is agreed that nothing contained in this Agreement shall be construed as an assignment or grant to Diplomat of any right, title or interest in or to KI's name, it being understood that all rights relating thereto are reserved by KI, Inc., except for the license hereunder to Diplomat of the right to use and utilize KI's name only as specifically and expressly provided in this Agreement. Diplomat hereby agrees that at the termination or expiration of this Agreement Diplomat will be deemed to have assigned, transferred and conveyed to KI, Inc. any trade rights, equities, good will, titles or other rights in and to KI's name which may have been obtained by Diplomat or which may have vested in Diplomat in pursuance of any endeavors covered by this Agreement, and that Diplomat will execute any instruments requested by KI, Inc. to accomplish or confirm the foregoing. Any such assignment, transfer, or conveyance shall be without consideration other than the mutual covenants and considerations of this Agreement. + + (c) Diplomat hereby agrees that its every use of KI's name shall inure to the benefit of KI, Inc. and that Diplomat shall not at any time acquire any rights in KI's name by virtue of any use it may make of such name. + + 11. Promotional Material. + + (a) In all cases where Diplomat desires artwork to be created involving products that are the subject of this license, the cost of such artwork and the time for the production thereof shall be borne by Diplomat. All artwork and designs involving KI's name, or any reproduction thereof, shall, notwithstanding their invention or use by Diplomat, be and remain the + + 7 + + property of SW, and SW shall be entitled to use the same and to license the use of the same by others. + + (b) KI, Inc. shall have the right, but shall not be under any + + + + + + obligation, to use KI's name and/or the name of Diplomat so as to give KI's name, KI, Inc., or KI, Inc.'s programs full and favorable prominence and publicity. KI, Inc. shall not be under any obligation whatsoever to use KI's name, or any person, character, symbol, design, likeness, or visual representation thereof in any radio or television program. + + (c) Diplomat agrees not to offer for sale, advertise, or publicize any of the products licensed hereunder on radio or television without the prior written approval of KI, Inc., which approval KI, Inc. may grant or withhold in its unfettered discretion. + + 12. Distribution. + + (a) Diplomat agrees that during the term of this license it will diligently and continuously manufacture, distribute and sell the products covered by this Agreement and that it will make and maintain adequate arrangements for the distribution of the products. + + (b) Diplomat agrees that it will sell and distribute the products covered by this Agreement (i) to jobbers, wholesalers and distributors for sale and distribution to retail stores and merchants, and (ii) to retail stores and merchants for sale and distribution direct to the public. Diplomat shall not, without the prior written consent of KI, Inc., sell or distribute such products to jobbers, wholesalers, distributors, retail stores, or merchants whose sales or distribution are or will be made for publicity or promotional tie-in purposes, combination sales, premiums, give-aways, or similar methods of merchandising. In the event any sale is made at a special price to any of Diplomat's subsidiaries or to any other person, firm or corporation related in any manner to Diplomat or its officers, directors or major stockholders, there shall be a royalty paid on such sales based upon the price generally charged the trade by Diplomat. + + (c) Diplomat agrees to sell to KI, Inc. such quantities of the products at as low a rate and on as good terms as Diplomat sells similar quantities of the products to the general trade. + + 13. Records. + + Diplomat agrees to keep accurate books of account and records covering all transactions relating to the license hereby granted. KI, Inc. and its duly-authorized representatives shall have the right, upon reasonable notice and at reasonable hours of the day, to visit the offices of Diplomat one time each calendar quarter for the purpose of examining said books of account and records, and all other documents and materials in the possession or under the control of Diplomat, with respect to the + + 8 + +subject matter and terms of this Agreement, and shall have free and full access thereto for said purposes and for the purpose of making extracts therefrom. Upon demand of KI, Inc., Diplomat shall furnish to KI, Inc. a detailed statement by an independent certified public accountant showing the number, description, gross sales price, itemized deductions from gross sales price and net sales price of the products covered by this Agreement distributed and/or sold by Diplomat to the date of KI, Inc.'s demand. The cost of preparing such statement shall be borne by KI, Inc. However, notwithstanding the foregoing, if the prepared statement indicates that KI, Inc., received less than all royalties payable to it under this Agreement, and the differential between the royalties received and those payable amounts to more than % of the royalties received, then the cost of such statement shall be borne by Diplomat. In the event books of account and records shall be kept available for at least two (2) years after the termination of this license. + + 14. Bankruptcy, Violation, Etc. + + (a) If Diplomat shall not have commenced in good faith to manufacture or distribute in commercial quantities sunglasses and ophthalmic frames using KI's name within three months after the date of this Agreement, or if at any time thereafter in any six calendar month period Diplomat fails to sell or distribute sunglasses or ophthalmic frames, or any other product described in subparagraph 2(a) of this Agreement, KI Inc. may give notice of such failure with respect to any such product which has not been so manufactured or distributed during the six calendar month period. In the event that Diplomat does not commence selling such product in commercial quantities within 90 days after such notice, such notice shall be deemed to be a termination of this License with respect to such product. + + (b) If Diplomat files a petition in bankruptcy, or is adjudicated a bankrupt, or if a petition in bankruptcy is filed against Diplomat, or if it becomes insolvent, or it makes an assignment for the benefit of its creditors or an arrangement pursuant to any bankruptcy law, or if Diplomat discontinues its business, or if a receiver is appointed for it or its business, the license hereby granted shall automatically terminate forthwith without any notice whatsoever being necessary. In the event this license is so terminated, Diplomat, its receivers, representatives, trustees, agents, administrators, successors and/or assigns shall have no right to sell, exploit or in any way deal with or in any of the products covered by this Agreement, or any carton, container, packing or wrapping material, advertising, promotional or display material pertaining thereto, except with and under the special consent and instructions of KI, Inc. in writing, which they shall be obligated to follow. + + + + + + (c) If Diplomat shall violate any of its other material obligations under the terms of this Agreement, KI, Inc. shall have the right to terminate the license hereby granted upon twenty (20) days' notice in writing, and such notice of termination shall become effective unless Diplomat shall + + 9 + + completely remedy the violation within the twenty-day period and satisfy KI, Inc. that such violation has been remedied. + + (d) Termination of the license under the provisions of this paragraph 14 shall be without prejudice to any rights which KI, Inc. may otherwise have against Diplomat. Upon the termination of this license, notwithstanding anything to the contrary herein, all royalties on sales theretofore made shall become immediately due and payable and no minimum royalties shall be repayable. + + 15. Final Statement Upon Termination or Expiration. + + Sixty (60) days before the expiration of this license and, in the event of its termination, ten (10) days after receipt of notice of termination or the happening of the event which terminates this Agreement where no notice is required, a statement showing the number and description of products covered by this Agreement on hand or in process shall be furnished by Diplomat to KI, Inc. KI, Inc. shall have the right to take a physical inventory to ascertain or verify such inventory and statement and refusal by Diplomat to submit to such physical inventory by KI, Inc. shall forfeit Diplomat's right to dispose of such inventory, KI, Inc. retaining all other legal and equitable rights KI, Inc. may have under the circumstances. + + 16. Disposal of Stock Upon Termination or Expiration. + + Upon and after the termination of the license, and except as otherwise provided in this Agreement, Diplomat may dispose of products covered by this Agreement which are on hand, or in process at the time notice of termination is received, for a period of one hundred and twenty (120) days after notice of termination, provided advances and royalties with respect to that period are paid and statements are furnished for that period in accordance with paragraph 3. Notwithstanding anything to the contrary herein, Diplomat shall not manufacture, sell or dispose of any products covered by this license after (a) the expiration of the license, or (b) the termination of the license based on (i) the failure of Diplomat to affix notice of copyright, trademark or service mark registration or any other notice to the products, cartons, containers, or packing or wrapping material or advertising, promotional or display material, or (ii) because of the departure by Diplomat from the quality and style approved by KI, Inc. pursuant to paragraph 9. + + 17. Effect of Termination or Expiration. + + Upon and after the expiration or termination of this license, all rights granted to Diplomat hereunder shall forthwith revert to KI, Inc., who shall be free to license others to use KI's name in connection with the manufacture, sale and distribution of the products covered hereby, and Diplomat will refrain from further use of KI's name or any further reference to it, direct or indirect, or anything deemed by KI, Inc. to be similar to the KI's name, in connection with the manufacture, sale or distribution of Diplomat's products, except as provided in paragraph 17. + + 10 + + 18. KI, Inc.'s Remedies. + + (a) Diplomat acknowledges that (except as otherwise provided herein) its failure to commence in good faith to manufacture and distribute in commercial quantities any one or more of the products listed in subparagraph 2(a) within three (3) months of the date of this Agreement and to continue during the term hereof to diligently and continuously manufacture, distribute and sell the products covered by this Agreement, or any class or category thereof, will result in immediate damages to KI, Inc. + + (b) Diplomat also acknowledges that (except as otherwise provided herein) its failure to cease the manufacture, sale or distribution of the products covered by this Agreement, or any class or category thereof, at the termination or expiration of this Agreement will result in immediate and irremediable damage to KI, Inc. and to the rights of any subsequent licensee. Diplomat acknowledges and admits that there is no adequate remedy at law for such failure to cease manufacture, sale or distribution, and Diplomat agrees that in the event of such failure KI, Inc. shall be entitled to equitable relief by way of temporary and permanent injunctions and such other further relief as any court with jurisdiction may deem just and proper. + + (c) Resort to any remedies herein shall not be construed as a waiver of any other rights and remedies to which KI, Inc. is entitled under this Agreement or otherwise. + + 19. Excuse for Nonperformance. + + Diplomat shall be released from its obligations hereunder and this license shall terminate in the event that governmental regulations or other + + + + + +causes arising out of a state of national emergency, war, or causes beyond the control of the parties render performance impossible and one party so informs the other in writing of such causes and its desire to be so released. In such events, all royalties on sales theretofore made shall become immediately due and payable and no minimum royalties shall be repayable. + + 20. No Joint Venture. + + Nothing herein contained shall be construed to place the parties in the relationship of partners or joint venturers, and Diplomat shall have no power to obligate or bind KI, Inc. in any manner whatsoever. + + 21. No Assignment or Sublicense by Diplomat. + + This Agreement and all rights and duties hereunder are personal to Diplomat and shall not, without the written consent of KI, Inc., be assigned, mortgaged, sublicensed or otherwise encumbered by Diplomat or by operation of law. + + 11 + + KI, Inc. may assign its rights hereunder, but shall furnish written notice of such assignment to Diplomat. + + 22. No Waiver, Etc. + + None of the terms of this Agreement can be waived or modified except by an express Agreement in writing signed by both parties. There are no representations, promises, warranties, covenants or undertakings other than those contained in this Agreement, which represents the entire understanding of the parties. The failure of either party hereto to enforce, or the delay by either party in enforcing, any of its rights under this Agreement shall not be deemed a continuing waiver or a modification thereof and either party may, within the time provided by applicable law, commence appropriate legal proceedings to enforce any or all of such rights. No person, firm, group or corporation (whether included in KI's name or otherwise) other than Diplomat and KI, Inc. shall be deemed to have acquired any rights by reason of anything contained in this Agreement, except as provided in paragraphs 8 and 22. + + 23. Additional Endorsers. If, during the term of this Agreement, Diplomat should utilize the services of any other person to endorse its products, and the public image of such person is so inconsistent with that of KI as to risk damaging the good will of KI's name should KI, Inc. continue to do business with Diplomat, then KI, Inc. shall have the right to terminate this Agreement, subject to the remedial and other provisions of paragraph 14 of this Agreement. + + 24. Miscellaneous Provisions. + + (a) Authority. KI, Inc. has the full right, power, legal capacity and authority to enter into this Agreement on behalf of KI, to carry out its terms, and to grant Diplomat the rights, licenses and privileges granted in this Agreement. + + (b) Merger. This Agreement supersedes any and all prior written or oral agreements between the parties. + + (c) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California without regard to conflict of law principles. + + (d) Attorneys' Fees. The prevailing party in any proceeding brought to enforce any provision of this Agreement shall be entitled to recover the reasonable fees and costs of its counsel, plus all other costs of such proceeding. + + (e) Notices. All notices and statements to be given, payments to be made and materials to be submitted under this Agreement shall be given, made and submitted via certified or registered mail, postage prepaid, return + + 12 + + receipt requested, at the addresses of the parties, as set forth above, unless notification of a change of address is given in writing, and the date of mailing shall be deemed the date the notice or statement is given. + + IN WITNESS WHEREOF, this Agreement has been executed as of the date first set forth above. + + /s/ Kathy Ireland --------------------------------- KATHY IRELAND, Individually KATHY IRELAND, INC. By /s/ Kathy Ireland --------------------------------- KATHY IRELAND, President + + + + + + THE STERLING/WINTERS CO. By /s/ Jason Winters --------------------------------- JASON WINTERS DIPLOMAT AMBASSADOR EYEWEAR GROUP By /s/ Barry Budilov --------------------------------- BARRY BUDILOV, President + + 13 + + ADDENDUM TO ENDORSEMENT AGREEMENT + + This addendum to the Endorsement Agreement between Kathy Ireland, Inc., Diplomat Ambassador Eyewear Group, and The Sterling/Winters Company entered into as of August 24, 1995 now includes the following provision: + + Diplomat Ambassador Eyewear Group agrees to comply with the laws and regulations of any state or territory in which they manufacture or have sub-contracted any Kathy Ireland product, especially pertaining to labor and safety issues. + + Diplomat Ambassador Eyewear Group agrees to comply with any reasonable requests from Kathy Ireland, Inc. concerning labor and safety resolutions. + + DIPLOMAT AMBASSADOR EYEWEAR GROUP 3/4/97 By /s/ Barry Budilov - ------- --------------------------------- Dated BARRY BUDILOV, President + + KATHY IRELAND, INC. 3/18/97 By /s/ Kathy M Ireland - ------- --------------------------------- Dated KATHY IRELAND, President THE STERLING/WINTERS CO. 3/21/97 By /s/ Jason Winters - ------- --------------------------------- Dated JASON WINTERS \ No newline at end of file diff --git a/full_contract_txt/AMERICANPHYSICIANSCAPITALINC_03_31_2003-EX-10.26-AGENCY AGREEMENT.txt b/full_contract_txt/AMERICANPHYSICIANSCAPITALINC_03_31_2003-EX-10.26-AGENCY AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..d1b21a2aefcc5d6d43a44af93e54e5f0092872a9 --- /dev/null +++ b/full_contract_txt/AMERICANPHYSICIANSCAPITALINC_03_31_2003-EX-10.26-AGENCY AGREEMENT.txt @@ -0,0 +1,241 @@ +EXHIBIT 10.26 MICOA AGENCY AGREEMENT + + Mutual Insurance Corporation of America, a Michigan insurance corporation (MICOA) and Stratton, Cheeseman & Walsh-Nevada, Inc., a Nevada corporation, ("Agency"), (sometimes commonly referred to as the Parties) agree as follows: + +A. AUTHORITY OF AGENCY + + Subject to requirements imposed by law, the underwriting rules, procedures and regulations of MICOA and this agreement, the Agency is authorized to: + + 1. Solicit within the State of Nevada, receive and transmit immediately and directly to MICOA, proposals for health care liability insurance contracts for which a commission is specified in the schedule of commissions provided by Exhibit A, attached and as amended or supplemented by such attachments from time to time. + + 2. Produce and deliver certificates of insurance and written binders in accordance with MICOA underwriting requirements. The Agency is not authorized to accept or bind any risk or to otherwise obligate MICOA without specific authority from MICOA. + + 3. Provide all usual and customary services of an Agency on all policies placed with MICOA subject to the following: + + a. MICOA will not be responsible for Agency expenses including but not limited to rent, transportation, employee hire or solicitor's fees, postage, telegrams, telephone, advertising, licensing fees or any other Agency expenses whatsoever. + + b. The Agency will not undertake or initiate advertising of any nature in connection with business or policies related to MICOA without the approval of MICOA. + + 4. To promptly report all claims and losses of which the Agency has knowledge and properly notify MICOA when the Agency receives notice of the commencement of any related legal action. Agency shall refrain from admitting or denying liability on the part of the company in connection with any claim or lawsuit. + + 5. In return for the exclusive appointment of Agency by MICOA to sell its professional liability products listed on the &sbsp;attached Commission Schedule + + in Nevada, Agency agrees not to sell any competing professional liability products in Nevada, without the written consent of MICOA. Provided that, if a particular risk has been submitted to MICOA and MICOA has declined that risk, then Agency may search appropriate markets for placement of that risk, and may place that risk with another insurance company. + + 6. Designated Agent representatives upon request from MICOA will be expected to participate in MICOA's Nevada Market Managers Group activities and to attend all scheduled meetings. + + 7. MICOA will share on a project basis development costs of all promotional materials and some advertising costs related to Nevada sales, provided that all such expenditures or budgets for them are approved by MICOA in writing in advance. + + 8. Agency may solicit subagencies for appointment, subject to MICOA's prior written approval of each subagency following disclosure to and review by MICOA of information requested by MICOA for each proposed subagency. All such appointments by Agent shall stipulate that MICOA may terminate the subagency at any time without cause upon at least 90 days notice and that the subagency shall comply with all MICOA requirements and duties owed MICOA by Agency concerning solicitation, communications, and service to insureds. Subagencies shall also be required to submit all proposals immediately and directly to MICOA. + +B. MICOA BILLED POLICIES + + For business subject to Exhibit A, placed with and billed by MICOA directly to the policyholder, the following shall apply in addition to all the other provisions of this agreement: + + 1. The processing and submittal of all such business shall be subject to provisions outlined in MICOA's written requirements and forms as they may be implemented by MICOA from time to + + + + + + time; + + 2. Commissions on premiums shall be paid to the Agency within 30 business days of the month in which such premiums are received and recorded by MICOA, subject to deduction by MICOA of any return commissions due from the Agency. + + 3. Except as provided in Section D or unless authorized by the Agency, MICOA or its affiliates shall not use its records of business placed by the Agency with MICOA to solicit individual policyholders for the sale of other lines of + + -2- + + insurance or other products or services. When the Agency grants such authorization, Agency shall be paid the applicable commission on such sales, provided an appropriate agreement is in place with MICOA. + + 4. If this agreement is terminated, MICOA shall, at the Agency's request, provide the Agency with a list of existing MICOA-billed policies placed by the Agency including their expiration dates. + + 5. The Agency's name shall appear on all policies, premium notices, and cancellation notices to policyholders. Copies of all such items sent to policyholders shall be provided by MICOA to the Agency. + +C. POLICY CANCELLATION + + Cancellation of any policy in force, when requested in writing by the insured, will be honored by MICOA, except for those MICOA is not otherwise permitted to cancel. + +D. EXPIRATIONS + + 1. In the event this Agreement is terminated for any reason, MICOA agrees to purchase from Agency, and Agency agrees to sell to MICOA Agency's ownership interest in the expirations for the MICOA insurance issued pursuant to this Agreement. The purchase price shall be two times Agency's commissions on business produced directly by Agency during the last 12 full months preceding the termination date. The purchase shall be completed within 60 calendar days after the termination date. In return for this payment, for a two-year period following the termination date, Agency will not directly or indirectly sell any professional liability insurance to any individuals or entities who were MICOA insureds in Nevada at the time of termination of this Agreement. + + 2. If Agency enters into a subagency agreement under which the subagency has the right to retain ownership of expirations on business produced by the subagency, then the purchase of expirations under subparagraph 1 above will not include the purchase of those subagency expirations, and the purchase price paid to Agency will not include the commissions paid for such business produced by the subagency. + + -3- + +E. AGENCY'S ERRORS AND OMISSION, AND FIDELITY & ELECTRONIC CRIME INSURANCE + + The Agency will maintain valid errors and omissions insurance, with minimum limits of $1,000,000 per incident, and a fidelity and electronic crime policy through an insurer, both of which shall contain terms and limits of coverage acceptable to MICOA covering the Agency's solicitors and each of its employees. The Agency shall provide MICOA a copy of each policy; doing so on a regular and current basis shall be a precondition to all of Agency's rights under this Agreement, including but not limited to the payment of all earned commissions. + +F. TERMINATION OF AGREEMENT + + 1. This agreement shall terminate: + + a. Automatically if any public authority cancels or declines to renew the Agency's license or Certificate of Authority. + + b. Immediately if either party gives detailed written notice to the other of alleged gross and willful misconduct, fraud or material misrepresentation. + + 2. This Agreement shall terminate, subject to any automatic renewal or extension for one year as required by law, upon either party giving at least one hundred twenty (120) days advance written notice to the other, if not otherwise contrary to applicable law or this Agreement. + + 3. If the Agency is delinquent in either accounting or payment of + + + + + + monies due MICOA, MICOA may by written notice to the Agency immediately terminate, suspend or modify any of the provisions of this agreement. Such action shall not be taken by MICOA over minor differences between the records of the Agency and MICOA. + + 4. All supplies, including forms and policies furnished by MICOA and any copies or other reproductions of them, shall remain the property of MICOA and shall be returned to MICOA or its representative upon demand. + +G. INDEMNIFICATION + + The respective parties shall indemnify and hold one another harmless as follows: + + -4- + + 1. MICOA shall indemnify and hold Agency harmless against any MICOA act or omission, except to the extent the Agency has caused, compounded, or contributed to such error. + + 2. Agency shall indemnify and hold Agency harmless against any act or omission of the Agency, except to the extent MICOA has caused, compounded, or contributed to such error. + + 3. The Agency and MICOA shall properly notify one another upon receiving notice of the commencement of any action related to such liabilities. MICOA shall be entitled to participate in any such action or in consultation with Agency and its carrier to assume the defense of any such action. If MICOA assumes the defense of any such action, it shall not be liable to the Agency for any legal or other expenses subsequently incurred on the Agency's behalf absent MICOA's advance approval of such expenses. + + 4. Neither party shall, except at its own risk and expense, voluntarily assume any liability, make any payment or incur any expense without the prior written consent of the other. + +H. POTENTIAL OPPORTUNITIES + + 1. Other Programs. Agency and MICOA agree that Agency may be offered the opportunity to support MICOA's workers' compensation, and its other nonphysician professional liability or product programs in Nevada when MICOA proceeds with related marketing plans. Such plans may also include Agency's involvement in sales of MICOA commercial and personal products. Appropriate agreements must be negotiated separately from this agreement for each such product, and for each such territory, including but not limited to Nevada. + + 2. Territory. Agency and MICOA further agree to consider, subject to successful negotiation of appropriate agreements separate from this agreement, expansion of Agencies' sales territories for MICOA beyond Nevada. + +I. MISCELLANEOUS + + 1. Amendment. This agreement may be amended only in writing by mutual agreement of the Agency and MICOA, except that MICOA's name herein shall be deemed changed automatically for purposes of this agreement without written amendment upon approval of any such change by MICOA's domiciliary regulator. + + 2. Non Waiver. Any failure by MICOA to insist upon compliance with any provisions of this Agreement or of the rules and regulations of MICOA shall not be construed as or constitute a waiver of them by MICOA. + + -5- + + 3. Integrated Agreement. This Agreement and its attachments as modified from time to time supersedes and replaces as of its effective date, all previous agreements, if any, between MICOA and the Agency. There are other agreements between MICOA and the Agency's parent corporation, SC&W, which are not superceded. + + 4. &bbsp; Independent Contractor. The Agency is an independent insurance Agency and independent contractor, and not an employee, manager, officer or owner of MICOA. + + 5. Applicable Law. This Agreement shall be interpreted under the laws of the State of Nevada. Any provisions of this Agreement or any amendments to the Agreement that are or become in conflict with any applicable statutes or regulations shall be deemed to be amended to conform to those statutes or regulations. + + 6. Counterparts. This Agreement and any Exhibits which require signatures may be executed in counterparts which shall + + + + + + together be regarded as binding upon the Parties. + + 7. Authority. The persons signing below represent and warrant that they are duly authorized representatives of the respective Parties, fully willing and able to execute this Agreement. + + 8. Assignment. MICOA may assign this Agreement to its parent, affiliate, or subsidiary corporations who are licensed insurers upon written notice to Agency. Agency may not assign this Agreement without the written permission of MICOA or its successors or assigns. + + 9. Resolution of Disputes. In the event of any dispute arising out of this Agreement, MICOA and Agency agree to submit such dispute to arbitration as follows: + + a. There shall be three arbitrators; one shall be selected by the Agency, one shall be selected by MICOA, and a third shall be selected by those two arbitrators. If the two arbitrators cannot agree on the selection of a third, American Arbitration Association's regional office closest to Agency's main office shall be requested to appoint the third arbitrator. + + b. The determination of the arbitrators shall be final and binding upon the Agency and MICOA. + + c. Neither MICOA nor the Agency shall be entitled to punitive and/or exemplary damages. + + -6- + + d. The arbitration shall be conducted in accordance with the procedures of the above referenced regional office of the American Arbitration Association. The Agency and MICOA shall pay the cost of their arbitrator and share equally in the expense of the third arbitrator. + + e. Either Party, may where permitted by the law of Nevada, enter judgment upon the arbitrators' award. + + 10. Year 2000 Compliance. Agency must at times assure that any of its computers, data processing systems, software components, and network arrangements use for MICOA business completely and accurately, present, produce, store and calculate all dates after December 31, 1999; and that they will not produce abnormally ending or incorrect results involving such dates as used in any forward or regression data based functions. All such items must yield date-related functionalities and date fields which accurately indicate the century and millennium and correctly perform all calculations involving a four digit year field. + +Signed and effective this 25th day of May, 1999. + + AGENCY + + By: /s/ Terrence L. Walsh ------------------------------------ + + Its: President + + MICOA + + By: /s/ Thomas C. Payne, M.D. ------------------------------------ Thomas C. Payne, M.D. Secretary/Treasurer + + -7- + + EXHIBIT A + + AGENCY AGREEMENT SCHEDULE OF COMMISSIONS AND WRITTEN PREMIUM + +New Business Policies: 12% of the annual premium Renewal Policies: 12% of the annual premium + +Appointed agents who are not a party to a current MICOA agency contract and/or + + + + + +are not affiliated with an agency which has an agency contract will receive a 1% commission rate for all lines of business stated above. + +Commission will decrease by .5% effective 10/1/99 as part of a repayment program under a project memorandum dated 4/7/99. This decrease will stay in effect until SC&W reaches $10MM in premium or at a maximum of 10 years. + + -8- + +April 7, 1999 + +Mr. Terrence Walsh Stratton, Cheeseman & Walsh, Inc. 1301 N. Hagadorn East Lansing, MI 48823 + +RE: NEVADA DEPARTMENT PROJECT MEMORANDUM + +Dear Terry: + +In response to MICOA's request to develop a complete insurance distribution system for Nevada, including physicians professional liability and personal and commercial insurance by July 1999, Stratton, Cheeseman & Walsh, Inc. (SC&W) has spent and will continue to spend a substantial amount of time and money. In recognition that these expenditures will directly benefit MICOA, SC&W and MICOA agree to the following: + +- During the first two years of developing the Nevada distribution system, a portion of the start up costs will be shared. Subject to compliance with a detailed budget developed by SC&W and MICOA, these reimbursable costs shall include: + + - Salaries and benefits for SCW-Nevada, Inc. employees and agents. + + - 20% of your total personal benefits and salary, and 100% of your personal travel expenses incurred with respect to the Nevada office, which respective percentages are intended to recognize your personal support of MICOA's Nevada initiative. + + - Legal expenses directly attributable to the Nevada initiative. + + - Nevada office set up. + + - Consultant's expenses paid by SC&W in direct support of the initiative. + + - The above costs are to be designated and itemized in the preapproved budget and reimbursed by MICOA at 100% for the first full year of development and 50% for the second year. It is agreed that the first year began effective October 1, 1997. + +- All other costs attributable to the normal operation of the Nevada insurance agency site are the sole responsibility of SC&W. + +- After the first two years (i.e. after October 1, 1999) all expenses will be borne by SC&W and those amounts paid to SC&W during the first two years shall be repaid. Repayment shall be through reduction of commissions due SC&W by 0.5% or if + + -7- + + SC&W exceeds $10.0 million in premium revenues by offset in the event any money is owed the Agency by MICOA. Such reduction or offset shall occur for so long as necessary to repay amounts reimbursed by MICOA during the two-year period of development; but in no event will repayment be collected for a period of greater than ten years. Any unpaid amounts at the end of ten years shall be forgiven by MICOA. + +- Nevada rent expenses will be shared on a 50/50 basis between MICOA and SC&W. + +- In order to allow SC&W to expand the distribution system in Nevada with select and controlled subagents, an exclusive agency agreement will be negotiated which will spell out the terms and conditions of the relationship. A commission rate of 12% will be paid for both new and renewal physicians liability business. Other commission rates will be determined as products become available. This Agency Agreement should be finalized by April 30, 1999. + +- MICOA may pay future payments advanced pursuant to this letter on a monthly basis, unless doing so would be impractical, in which case another periodic form of&bbsp;payment will be arranged. Amounts owed for past time periods will be paid as follows: one-third by March 25, 1999; one-third by May 1, 1999; and one-third by June 1, 1999. All other amounts owed under this Project Memorandum to be paid by October 1, 1999. + +SC&W's responsibilities, under this Project Memorandum, will include assisting MICOA with market assessment, distribution, and sales integration into Nevada. SC&W agrees not to serve in a strategic marketing capacity for another insurer + + + + + +in Nevada while it is providing such services for MICOA or for a period of one year thereafter. + +Terry, please countersign and return this letter to indicate your acceptance. + +Sincerely, + +MUTUAL INSURANCE CORPORATION OF AMERICA + +/s/ Thomas C. Payne, M.D. ----------------------------------------- Thomas C. Payne, M.D. Secretary/Treasurer + +ACCEPTED AND AGREED TO: STRATTON, CHEESEMAN & WALSH, INC. + +/s/ Terrence L. Walsh ----------------------------------------- Terrence L. Walsh CEO \ No newline at end of file diff --git a/full_contract_txt/AMERICASSHOPPINGMALLINC_12_10_1999-EX-10.2-SITE DEVELOPMENT AND HOSTING AGREEMENT.txt b/full_contract_txt/AMERICASSHOPPINGMALLINC_12_10_1999-EX-10.2-SITE DEVELOPMENT AND HOSTING AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..aa96513f20922877fc838c4ec73111f900218580 --- /dev/null +++ b/full_contract_txt/AMERICASSHOPPINGMALLINC_12_10_1999-EX-10.2-SITE DEVELOPMENT AND HOSTING AGREEMENT.txt @@ -0,0 +1,183 @@ +EXHIBIT 10.2 + + SITE DEVELOPMENT AND HOSTING AGREEMENT + + This SITE DEVELOPMENT AND HOSTING AGREEMENT (the "Agreement") dated as of August 9, 1999 is made between Hanover Direct, Inc. ("HDI"), a New Jersey Corporation, located at 1500 Harbor Boulevard, Weehawken, NJ 07087, and The Deerskin Companies, Inc. (the "Company"), a Nevada corporation, located at 2500 Arrowhead Drive, Carson City, NV 89706. Each of the parties hereto shall be referred to as a "Party". + + In consideration of the mutual promises and covenants set forth below, HDI and the Company agree as follows: + +1. HDI's Responsibilities. + + 1.1 HDI shall design, develop, implement, operate, maintain and manage, and enable the Company to establish a presence on the World Wide Web ("Site") to make available to Internet users on demand, men's and women's apparel and accessories from the Deerskin Catalog ("Deerskin Products"). As used in this Agreement, "Deerskin Products" shall not include (i) closeout merchandise which the Company may identify as "Deerskin" branded items, if such is the case, nor (ii) products from the Company's Joan Cook Catalog. + + 1.2 HDI shall bear all costs associated with the design, development, implementation, operation, maintenance and management of the Site, including, without limitation, technology and labor. + + 1.3 HDI shall host and maintain the Site on a server provided by HDI. + + 1.4 HDI shall provide the Company with access to, and + +the right to use, a computer system on which the Site will be stored and operated, with a direct Internet connection of shared but greater than T-1 bandwidth, plus capacity to process continuously during burst periods. HDI shall also provide the Company with access to HDI's software and Content administration tools for purposes of allowing the Company to monitor current catalog information. + + 1.5 For the purposes of collecting orders for Deerskin Products from the Site and to communicate to the Site the unavailability of certain Deerskin Products, HDI shall provide export files in the format provided by the Company. HDI shall bear the programming and software costs relating to efforts required to create order export files and receive and process import files of the Company's inventory information. + + 1.6 HDI shall have the Site fully operational and accessible on demand by users of the Internet no later than sixty (60) days from the date this Agreement has been executed by both Parties. In the event that HDI fails to have the Site fully operational within seventy (70) days from the date of this Agreement, the Company shall have the right to terminate this Agreement without penalty. + + 1.7 HDI shall distribute the Site through the world wide protocol of the Internet using distribution channels used by HDI sites and other similar distribution channels. + + 1.8 HDI agrees that it shall promote the Site and Deerskin Products no less favorably than it promotes HDI's + + -2- + +catalog titles. HDI's promotion of the Site and Deerskin Products shall include, but not be limited to, the incorporation of the Site and Deerskin Products into HDI's promotion calendars with Xoom.com and Excite for the term of this Agreement. HDI agrees that the costs of any such promotions shall be borne by HDI. + +2. Company's Responsibilities. + + 2.1 The Company shall provide all Content to HDI to be included in the Site no later than ten (10) days from the date this Agreement has been executed by both Parties. + + 2.2 The Company shall bear all costs associated with the processing of customer orders. + +3. Fees; Payment. + + 3.1 The Company shall pay HDI thirty percent (3016) of the Net Sales in excess of Eleven Thousand Dollars ($11,000) per calendar month. "Net Sales" shall mean all revenues from the sale of Deerskin Products on the Site including shipping and handling charges, minus refunds and exchanges. + + + + + + 3.2 Payments to HDI shall be due monthly within thirty (30) days of the end of each calendar month and shall be accompanied by documentation reasonably detailing the calculation of the payment. + + 3.3 Quarterly reconciliation of payments shall be conducted within thirty (30) days of the end of each calendar quarter to adjust for refunds and exchanges not taken into account in payments made to HDI. + + -3- + + 3.4 HDI's General Manager (as hereinafter defined), may upon no less than thirty (30) days prior written notice to the Company, have the right to inspect the records of the Company's General Manager reasonably related to the calculation of such payments during the Company's normal business hours. The fees incurred by HDI in connection with the inspection shall be borne by HDI. + +4. Term; Termination; Termination Payment. + + 4.1 Term; Termination. This Agreement shall be effective as of that date (the "Effective Date") the Site becomes fully operational as set forth in writing and executed by both Parties and shall continue for a period of one (1) year from the Effective Date. This Agreement shall be automatically renewed for an additional one year period on each anniversary of the Effective Date, unless terminated by either Party hereto upon ninety (90) days written notice to the other. Such notice shall specify the date on which this Agreement is to be terminated (the "Termination Date"). + + 4.2 Termination Payment. + + (a) In the event the Company terminates this Agreement, the Company shall pay to HDI a termination payment, (the "Termination Payment") the amount of which shall be an amount equal to the aggregate Net Sales for the twelve (12) months preceding the Termination Date less $800,000, the balance of which shall be divided by two. + + (b) In the event that the amount of the Termination + + -4- + +Payment is determined pursuant to this Section 4.2 to be less than or equal to zero, then no Termination Payment shall be due to HDI nor shall HDI be required to make any termination payment to the Company if the amount is determined to be less than zero. + + (c) The Termination Payment, if any, shall be payable by the Company in eight (8) equal payments to be made quarterly, commencing thirty (30) days after the termination date. + +5. Site; Site Management. + + 5.1 URL. The Uniform Resource Locator, or address on the World Wide Web for the Site ("URL") shall be as mutually agreed by the Parties and shall be established and registered as necessary by HDI at no cost to the Company. + + 5.2 The Company shall have exclusive artistic and editorial control over the Site, including, without limitation, the implementation of the Content on the Site and the design and look and feel of the Site. Neither the Site nor any portion of thereof shall be deemed accepted and approved by the Company unless and until the Company accepts and approves same in writing to HDI. No portion of the Site shall be made available on the Internet without the consent of the Company. + + 5.3 The Company shall be deemed the "merchant of record" for all commercial transactions on the Site related to Deerskin Products. Until the sale of the Deerskin Products to the consumer from the Site all title to the Deerskin Products shall remain with the Company. + + 5.4 Each of HDI and the Company shall appoint a + + -5- + +General Manager of its own to act as liaison with the other Party for the Site (each a "General Manager") who shall bear sole responsibility for bookkeeping and business operations of the Site on a day-today basis. Each General Manager shall have the authority to make and convey decisions on behalf of each Party and to be the liaison with the other Party for all production and Content matters. + +6. Exclusivity. + + 6.1 Except as provided in Section 6.2, during the term of this Agreement, the Company shall not participate in any project similar to the Site on the Internet with respect to Deerskin Products or products substantially similar to Deerskin Products (including, without limitation, the products of Wilson's House of Leather, Excelled and companies similar to Wilson's House of Leather and Excelled) and HDI shall have the exclusive right to use of the "Deerskin" brand for a self-contained web site for the offering of Deerskin Products directly to the consumer on the Internet. + + The Company hereby grants to HDI a non-exclusive, limited, non-transferable license to use the Company's "Deerskin" trademarks, service + + + + + +marks, and logos (collectively, "Marks") solely for the purpose of carrying out its obligations under this Agreement. Except as provided herein, no licenses of the Company's Marks are granted or implied under this Agreement. + + 6.2 The Company retains the right to establish a web site on the Internet for the purpose of offering closeout + + -6- + +merchandise which may be identified as "Deerskin" branded products, if such is the case. + + 6.3 During the term of this Agreement and for a period of two years after the expiration date of this Agreement, HDI shall not participate in any project similar to the Site on the Internet from which products substantially similar to Deerskin Products (including, without limitation, the products of Wilson's House of Leather, Excelled and and companies similar to Wilson's House of Leather and Excelled) are offered for sale to consumers on the Internet. + +7. Cross-Promotions. + + 7.1 Joint Efforts. The Parties agree to cross-promote one another's products through the use of their respective customer e-mail lists on a reciprocal and equitable basis. The Parties specifically agree that the form, content and design of any and all advertisements or promotional materials featuring the other Party or such Party's products shall continue to be developed by or on behalf of such Party and shall be subject to such Party's final approval. The Parties agree further that any promotions or advertisements involving the use of a Party's customer e-mail list by the other Party shall be subject to the prior approval of such Party. + + 7.2 Mutual Covenants as to Advertisements. The Parties hereby covenant and agree that their respective marketing and advertising efforts provided for herein shall at all times comply with all applicable laws rules and regulations and will + + -7- + +not contain any material which is obscene, threatening, fraudulent, harassing, libelous, infringing of third party intellectual property rights, otherwise illegal or, in the reasonable judgment of the Party required to display or transmit the advertisement, offensive. + +8. Confidentiality. + + 8.1 Unless otherwise agreed to in writing by the Company, HDI shall maintain the strict confidentiality and shall not disclose to any third party the existence of, or terms and conditions of this Agreement. In addition, HDI, in performing the Services for the Company hereunder, may have access to or be exposed to, directly or indirectly, Content, user information, data, knowledge and proprietary and trade secret information of the Company in oral, graphic, written, electronic or machine readable form (hereinafter collectively referred to as "Confidential Information"). Confidential Information shall not include information which can be demonstrated: (a) to have been rightfully in the possession of HDI from a source other than the Company prior to the time of disclosure of said information to HDI hereunder ("Time of Receipt"); (b) to have been in the public domain prior to the Time of Receipt; (c) to have become part of the public domain after the Time of Receipt by a publication or by any other means except an unauthorized act or omission or breach of this Agreement on the part of HDI, its employees, or agents; or (d) to have been supplied to HDI after the Time of Receipt by a third party who is under no obligation to the + + -8- + +Company to maintain such information in confidence. + + 8.2 HDI Obligations. All Confidential Information of the Company shall be held in strict confidence by HDI and shall not be disclosed or used without express written consent of the Company, except as may be required by law. HDI shall use reasonable measures and reasonable efforts to provide protection for Confidential Information, including measures at least as strict as those HDI uses to protect its own Confidential Information. + + 8.3 Company's Obligations. The Company acknowledges that it may receive confidential information of HDI relating to its technical, marketing, product and/or business affairs. All such confidential information of HDI shall be-held in strict confidence by the Company and shall not be disclosed or used without express written consent of HDI, except as may be required by law. The Company shall use reasonable measures and reasonable efforts to provide protection for such confidential information of HDI, including measures at least as strict as those the Company uses to protect its own Confidential Information. + + -9- + +9. Warranties. + + (a) Each Party represents and warrants to the other Party that (1) it is a corporation organized, validly existing and in goodstanding under the laws of the state of its incorporation; (2) it has the full right power and authority to enter into, and to perform the obligations contemplated in this Agreement, and the person signing on its behalf has the full right, + + + + + +power and authority to enter into this Agreement on behalf of the Party; (3) this Agreement constitutes a legal valid and binding obligation of the Party, enforceable in accordance with its terms; and (4) the execution of this Agreement will not conflict in any way with any pre-existing agreements or understandings of the Party with any person or entity. + + -10- + + (b) HDI acknowledges that the Company is currently a party to a web-hosting agreement with Globix Corporation (the "Globix Agreement") for the Company's web site offering Deerskin Products to Internet customers. HDI agrees that the Company shall not be deemed in breach of any provision of this Agreement by virtue of the Globix Agreement remaining in effect after this Agreement has been executed by both Parties, provided, that the Globix Agreement is terminated on or prior to the Effective Date + +10. General Provisions. + + 10.1 Notices. Any notice under this Agreement will be in writing and delivered by personal delivery, express courier, confirmed facsimile, or certified or registered mail, return receipt requested and will be deemed given upon personal delivery, one (1) day after deposit with express courier, upon confirmation of receipt of facsimile or five (5),days after deposit in the mail. Notices will be sent to a Party at its address set forth above or such other address as that Party may specify in writing pursuant to this Section. + + 10.2 No Joint Venture. The Parties agree that and acknowledge that the relationship of the Parties is in the nature of an independent contractor. This Agreement shall not be deemed to create a partnership or joint venture and neither Party is the other's agent, partner, employee or representative. Neither Party shall have any right, power or authority to enter into any agreement for or on behalf of, or to assume or create any obligation, liability, or responsibility on behalf of the other. + + -11- + +This Agreement will not be construed to create or imply an association, joint venture, co-ownership, or partnership between the Parties or to impose any partnership obligation or liability upon either Party. + + 10.3 Assignment. This Agreement shall be binding upon, and shall inure to the benefit of and be enforceable by, the parties hereto and their respective legal representatives, successors and assigns, but no other person shall acquire or have any rights under this Agreement. + + 10.4 Waiver of Breach. The failure of either Party at any time to enforce any of the provisions of this Agreement shall not be deemed or construed to be a waiver of any such provisions, or in any way to affect the right of any Party hereto to thereafter enforce each and every provision of this Agreement. No waiver of any breach of any provisions of this Agreement shall be effective unless set forth in writing and executed by the Party against which enforcement of such waiver is sought; and no waiver of any such breach shall be construed or deemed to be a waiver of any other or subsequent breach. + + 10.5 Governing Law. This Agreement shall be governed and construed and enforced in accordance with the laws of the State of New York applicable to contracts made and to be performed exclusively in that State without giving effect to the principles of conflict of laws. + + 10.6 Severability. If any provision of this Agreement is declared invalid or otherwise determined to be unenforceable + + -12- + +for any reason, such provision shall be deemed to be severable from the remaining provisions of this Agreement, which shall otherwise remain in full force and effect. + + 10.7 Survival. Sections 6.3, 7, 9 and 10 of this Agreement shall survive and continue in full force and effect for a period of two years from the expiration or termination of this Agreement. + + 10.7 Entire Agreement. This Agreement is the complete and exclusive agreement between the Parties with respect to the subject matter hereof, superseding any prior agreements and communications (both written and oral) regarding such subject matter. This Agreement may only be modified, or any rights under it waived, by a written document executed by both Parties. + + 10.8 Headings; Counterparts. The section headings in this Agreement are for reference purposes only and shall not define, limit or affect the meaning or interpretation of this Agreement. This Agreement is being executed in two or more counterparts, each of which shall be deemed an original but all of which shall constitute one and the same instrument. + + IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date first above written. + +THE DEERSKIN COMPANIES, INC. HANOVER DIRECT, INC. + +By By ------------------------------ -------------------------- + + + + + + Name: Irwin Schneidmill Name: Rakesh K. Kaul Tilte: President Title:President + + -13- \ No newline at end of file diff --git a/full_contract_txt/ANIXABIOSCIENCESINC_06_09_2020-EX-10.1-COLLABORATION AGREEMENT.txt b/full_contract_txt/ANIXABIOSCIENCESINC_06_09_2020-EX-10.1-COLLABORATION AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..ad52b176f7f5fc86e2e76943c5967056e1a03172 --- /dev/null +++ b/full_contract_txt/ANIXABIOSCIENCESINC_06_09_2020-EX-10.1-COLLABORATION AGREEMENT.txt @@ -0,0 +1,253 @@ +Exhibit 10.1 + +Redactions with respect to certain portions hereof denoted with "***" + +COLLABORATION AGREEMENT + +This Collaboration Agreement (the "Agreement") is made as of April 14th, 2020 (the "Effective Date") by and between Anixa Biosciences, Inc., a Delaware corporation, located at 3150 Almaden Expressway, Suite 250, San Jose, CA 95118, U.S.A. ("Anixa"), and OntoChem GmbH, a German limited liability company, located at Blücherstr. 24, D-06120 Halle (Saale), Germany ("OntoChem"). Anixa and OntoChem are referred to herein individually as a "Party" and collectively as the "Parties." + +WHEREAS, the Parties wish to collaborate in the discovery and development of novel drug candidates for the treatment of COVID-19 in accordance with the terms and conditions of this Agreement. + +NOW, THEREFORE, in consideration of the premises and the mutual promises set forth in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows: + +1. Defined Terms. + +1.1 "Affiliate" means, with respect to a Party, any entity directly or indirectly controlled by, controlling or under common control with such Party. For purposes of this definition, "control" means (a) ownership of fifty percent (50%) (or such lesser percentage which is the maximum allowed to be owned by a foreign entity or investor in a particular jurisdiction) or more of the outstanding voting stock or other ownership interest of an entity, or (b) possession of the power to (i) elect, appoint, direct or remove fifty percent (50%) or more of the members of the board of directors or other governing body of an entity or (ii) otherwise direct or cause the direction of the management or policies of an entity by contract or otherwise. + +1.2 "Hit Compound" means any chemical entity that is determined in performing the Research Plan to meet the Hit Criteria. + +1.3 "Hit Criteria" means the criteria identified as "Hit Criteria" as set forth in the Research Plan. + +1.4 "Invention" means any invention, know-how, data, discovery or proprietary information, whether or not patentable, that is made or generated solely by the Representatives of Anixa or OntoChem or jointly by the Representatives of Anixa and OntoChem in performing the Research Plan, including all intellectual property rights in the foregoing. + +1.5 "Representative" means, with respect to a Party, an officer, director, employee, agent or permitted subcontractor of such Party. + +1.6 "Research Plan" means the research plan attached hereto as Exhibit A. + +1 + + + + + +1.7 "SAR" means the relationship between the chemical or three-dimensional structure of a compound and its biological activity, and includes the determination of the chemical groups responsible for evoking a target biological effect. + +1.8 "Target" means: (a) any protease of any coronavirus, including Mpro; (b) the Nsp15-pRB ribonuclease protein- protein interaction; (c) all mutants and variants of any molecule or component referenced in clauses (a) or (b); and (d) all truncated forms (including fragments) of any molecule or component referenced in clauses (a) or (b) or mutant or variant referenced in clause (c). + +1.9 "Variant" means, with respect to any Hit Compound: (a) all compounds within the genus of compounds to which such Hit Compound would belong under United States patent laws as referenced in the Selection Notice (as defined below); and (b) any base form, metabolite, ester, salt form, racemate, stereoisomer, polymorph, hydrate, anhydride or solvate of such Hit Compound or any other compound described in clause (a) (in the case of this clause (b), without regard to whether such compound is referenced in the Selection Notice). + +2. Research Program. + +2.1 Performance. The Parties will diligently perform their respective activities set forth in the Research Plan (such activities, collectively, the "Research Program") in accordance with the timelines set forth therein, with the objective of identifying Hit Compounds and Lead Scaffolds that modulate the applicable Target. Without limiting the foregoing, OntoChem will (a) provide all deliverables set forth in the Research Plan (each, a "Deliverable") and (b) obtain any authorizations, approvals and licenses required for performance of the Research Plan. If any terms set forth in the Research Plan conflict with the terms set forth in this Agreement, the terms of this Agreement will control unless expressly indicated to the contrary in the Research Plan. The Research Plan may not be amended without the prior written consent of both Parties. If, from time to time, the Parties desire to expand the scope of the Research Program, then they will negotiate in good faith a potential amendment of the Research Plan in regard to such expanded scope, on commercially reasonable terms, but neither Party will be obligated to enter into any such amendment. + +2.2 Weekly Updates. OntoChem will provide Anixa with weekly (or more frequently as requested) updates regarding its progress under the Research Program via teleconference, videoconference or e-mail, and the Parties will make appropriate personnel available in a timely manner to discuss and provide feedback in regard to such updates. + +2.3 Delivery of Data. In conjunction with each weekly update described in Section 2.2, OntoChem will deliver to Anixa all data generated under the Research Plan since the preceding update. In addition, Anixa will have the right to reasonably request additional information relating to such data, and OntoChem will respond to such requests promptly with any such additional information in its possession or control, provided that, for clarity, OntoChem will not be required to perform any new or additional research in order to generate any such additional information. + +2 + + + + + +2.4 Selection of Lead Scaffolds. Within one year following completion of all activities under the Research Plan (the "Selection Deadline"), Anixa, in good faith consultation with OntoChem, will have the right to select up to two hundred (200) Hit Compounds (each, a "Selected Hit Compound"), by providing OntoChem with written notice of such Selected Hit Compound(s) (the "Selection Notice"), and each Selected Hit Compound, along with all Variants of such Selected Hit Compound referenced in the Selection Notice, is hereby designated as a "Lead Scaffold" under this Agreement. Commencing upon selection of a Selected Hit Compound, Anixa (itself and through its Affiliates and designees) will have sole authority over and control of the further development, manufacture, and commercialization of the corresponding Lead Scaffold and any product candidate or product incorporating a compound from such Lead Scaffold. Following the Selection Deadline, Anixa will have no further rights with respect to any Hit Compound that is not a Selected Hit Compound or included within a Lead Scaffold (each, a "Rejected Hit Compound"), provided that, during the period of two (2) years following the Selection Deadline, neither OntoChem nor any of its Affiliates will use or disclose to any third party any Rejected Hit Compound or any Variant thereof, including the identity, structure or SAR information of any such compound, for application as anti-viral agents or protease inhibitors, for purposes of modulating any Target or for treatment of virus-related conditions. In case OntoChem finds a novel and unexpected antiviral use of those Rejected Hit Compounds during this 2-years period, it will notify Anixa about these findings and Anixa has the right of first negotiation during a period of 6 months after this notification. If Anixa decides to not license those uses or compounds for this novel antiviral use, OntoChem is free to develop those molecules further as its own intellectual property without any further restrictions. + +2.5 Subcontractors. OntoChem may engage one or more subcontractors to perform its activities under the Research Plan with the prior written approval of Anixa and provided that, with respect to any such subcontractor, OntoChem will (a) be responsible and liable for the performance of such subcontractor and (b) enter into a written agreement (i) consistent with terms and conditions of this Agreement, including with respect to confidentiality and intellectual property, and (ii) prohibiting such subcontractor from further subcontracting. For clarity, vendors where commercial building blocks or compounds will be purchased are nor regarded as subcontractors. + +2.6 Target Exclusivity. During the term of this Agreement, except in the performance of its obligations or exercise of its rights under this Agreement, neither OntoChem nor any of its Affiliates will discover, research, develop, manufacture or commercialize any compound or product directed to any Target, either independently or for or in collaboration with a third party (including the grant of a license to any third party), or have any of the foregoing activities performed on behalf of OntoChem or any of its Affiliates by a third party. For clarity, the foregoing includes the screening (including via computational methods) of any compound library or virtual compound library against any Target. + +2.7 Records. Each Party will maintain complete and accurate records of all activities performed by or on behalf of such Party under the Research Program and all Inventions made or generated by or on behalf of such Party in the performance of the Research Program. Such records will be in sufficient detail and in good scientific manner appropriate for patent and regulatory purposes. Each Party will provide the other Party with the right to inspect such records, and upon request will provide copies of all such records, to the extent reasonably required for the exercise or performance of such other Party's rights or obligations under this Agreement, provided that any information disclosed under this Section 2.7 will be subject to the terms and conditions of Section 5. Each Party will retain such records for at least three (3) years following expiration or termination of this Agreement or such longer period as may be required by applicable law or regulation. + +3 + + + + + +2.8 Debarment. Each Party hereby represents and warrants to the other Party that neither it nor any of its Affiliates or personnel has been debarred under any health care laws or regulations and that, to its knowledge, no investigations, claims or proceedings with respect to debarment are pending or threatened against such Party or any of its Affiliates or personnel. Neither Party nor any of its Affiliates will use in any capacity, in connection with the Research Program, any person or entity who has been debarred. Each Party agrees and undertakes to promptly notify the other Party if such Party or any of its Affiliates or personnel becomes debarred or proceedings have been initiated against any of them with respect to debarment, whether such debarment or initiation of proceedings occurs during or after the term of this Agreement. + +3. Financial Terms. + +3.1 Research Program Payments. In consideration for OntoChem's performance of its activities under the Research Plan, Anixa will: + +(a) pay OntoChem 100,002 Euros in six (6) equal installments as follows: (i) 16,667 Euros within five (5) days after the Effective Date; and (ii) five (5) installments in the amount of 16,667 Euros on each one-month anniversary of the Effective Date, except that the last such payment will be due within thirty (30) days after completion of all activities under the Research Plan; and + +(b) reimburse OntoChem for its out-of-pocket expenses incurred in performing the Research Plan on a pass- through basis without mark-up, within thirty (30) days after delivery of an invoice therefore (including reasonable supporting documentation), provided that Anixa has approved such expenses in advance and in writing (including in regard to the selection of specific Hit Compounds to be synthesized and analyzed in biological assays). It is estimated that OntoChem's out-of-pocket expenses under the Research Plan will include 110,000 Euros payable to Tube Pharmaceuticals GmbH as a subcontractor of OntoChem, subject to Section 2.5. + +(c) High-throughput screening compounds + +OntoChem will forward a commercial proposal to acquire these compounds at the sole discretion of Anixa. Both parties will agree on payment conditions. + +(d) Extra custom synthesis + +OntoChem will forward a commercial proposal to have synthesized these compounds at the sole discretion of Anixa. Both parties will agree on payment conditions. + +(e) Biological testing + +OntoChem will forward a commercial proposal to have biologically test these compounds at the sole discretion of Anixa. Both parties will agree on payment conditions. + +3.2 Lead Scaffold Payments. For each Lead Scaffold selected by Anixa, Anixa will pay OntoChem an annual fee of 10,000 U.S. Dollars, payable within thirty (30) days following each anniversary of the date of the Selection Notice, until five (5) years after the first commercial sale of the first product incorporating a compound from such Lead Scaffold, subject to Section 4.3 with respect to any Terminated Scaffold (as defined below). + +3.3 Milestone Payment. Anixa will pay OntoChem a one-time milestone payment of 300,000 U.S. Dollars within thirty (30) days following the dosing of the first patient in the first human clinical trial for the first product incorporating a compound from a Lead Scaffold. + +4 + + + + + +3.4 Payment Terms. Payments to OntoChem will be made by check or by wire transfer of immediately available funds to such bank account as designated in writing by OntoChem from time to time. Taxes (and any penalties and interest thereon) imposed on any payment made by Anixa to OntoChem will be the responsibility of OntoChem. The fees for the respective bank transfers will be borne by Anixa. + +3.5 Financial Records. OntoChem will maintain complete and accurate books and accounting records related to all out-of-pocket expenses incurred in performing the Research Plan. These records will be available for inspection during regular business hours upon reasonable notice by Anixa, or its duly authorized representative, at Anixa's expense, for three (3) years following the end of the calendar year in which such expenses are invoiced. If it is determined that Anixa has overpaid for any expenses passed through by OntoChem under this Agreement, OntoChem will promptly reimburse Anixa for the amount of such overpayment and, if such overpayment represents more than five percent (5%) of the corresponding amount due, OntoChem will pay Anixa's reasonable fees and expenses incurred in connection with such inspection. + +4. Term and Termination. + +4.1 Term. Unless earlier terminated in accordance with Section 4.2 or 4.3, this Agreement will be in effect from the Effective Date until completion of the Research Program. + +4.2 Termination by Anixa. This Agreement may be terminated by Anixa, without cause, upon at least thirty (30) days written notice to OntoChem. + +4.3 Termination of Lead Scaffolds. For each Lead Scaffold, if (a) neither Anixa nor any of its Affiliates, licensees or assignees has dosed the first patient in a human clinical trial for a product incorporating a compound from such Lead Scaffold by the fifth (5th) anniversary of the date of the Selection Notice, or (b) Anixa earlier provides written notice of termination of such Lead Scaffold referencing this Section 4.3, then such Lead Scaffold (each, a "Terminated Scaffold") will thereupon cease to be a Lead Scaffold under this Agreement and thereafter, notwithstanding anything to the contrary in this Agreement: (i) Anixa will promptly assign to OntoChem all right, title and interest in and to any patents and patent applications owned by Anixa that claim such Terminated Scaffold (including the composition, use or manufacture thereof) and, following such assignment, OntoChem will exclusively control the filing, prosecution, maintenance and enforcement of such patents and patent applications; (ii) the identity, structure and SAR information of such Terminated Scaffold will be deemed to be the Confidential Information of OntoChem; (iii) Anixa will not owe any further annual fees under Section 3.2 for such Terminated Scaffold; and (iv) this Agreement will otherwise remain in full force and effect. + +4.4 Termination for Cause. This Agreement may be terminated by either Party for material breach by the other Party, provided that the terminating Party has given the breaching Party written notice of the breach and at least sixty (60) days to cure the breach prior to the effective date of termination. + +4.5 Effects of Termination. Promptly following expiration or termination of this Agreement, OntoChem will provide Anixa with an invoice (including reasonable supporting documentation) for any pre-approved out-of-pocket expenses (including non- cancellable commitments) incurred by OntoChem in performing the Research Plan and not yet reimbursed by Anixa, and Anixa will pay such invoice within thirty (30) days after receipt thereof. In addition, if this Agreement is terminated prior to completion of the Research Program, OntoChem will promptly furnish to Anixa any Deliverable or other work product generated to date and not previously provided to Anixa, including work in process. + +5 + + + + + +4.6 Survival. Expiration or termination of this Agreement will not affect the rights and obligations of the Parties that accrued prior to the effective date of such expiration or termination. The following provisions will remain in effect following expiration or termination of this Agreement and the Parties will continue to be bound thereby: Sections 2.4 (last three sentences), 2.7, 2.8 (last sentence only), 3.2, 3.3, 3.4, 3.5, 4.5, 4.6, 5, 6, 8 and 9. + +5. Confidentiality. + +5.1 Definition. "Confidential Information" means any information disclosed (directly or indirectly) by a Party (in such capacity, "Discloser") to the other Party (in such capacity, "Recipient") in connection with this Agreement whether in written, graphic, electronic, tangible or any other form. Confidential Information will not, however, include any information that: (a) was publicly known or generally available to the public prior to the time of disclosure by Discloser to Recipient; (b) becomes publicly known or generally available to the public after disclosure by Discloser to Recipient through no wrongful action or inaction of Recipient; (c) is in the rightful possession of Recipient without confidentiality obligations at the time of disclosure by Discloser to Recipient as shown by Recipient's then-contemporaneous written files and records kept in the ordinary course of business; (d) is obtained by Recipient from a third party without an accompanying duty of confidentiality and without (to Recipient's knowledge) a breach of such third party's obligations of confidentiality; or (e) is independently developed by Recipient without use of or reference to Discloser's Confidential Information. Notwithstanding anything to the contrary in this Agreement, except as expressly provided in Section 4.3 with respect to a Terminated Scaffold, the identity, structure and SAR information of: (i) the Hit Compounds will be deemed to be the Confidential Information of both Parties until the Selection Deadline, provided that, during such period, Anixa (itself or through one or more third party service providers on its behalf under a written agreement consistent with terms and conditions of this Agreement, including with respect to confidentiality and intellectual property) may perform biological assays and other analyses to evaluate the Hit Compounds solely for purposes of selecting Lead Scaffolds pursuant to Section 2.4; (ii) the Lead Scaffolds will be deemed to be Anixa's Confidential Information commencing upon the date of the Selection Notice; (iii) the Rejected Hit Compounds will be deemed to be OntoChem's Confidential Information commencing upon the date of the Selection Notice, subject to the last sentence of Section 2.4. + +5.2 Non-Use and Non-Disclosure. Neither Party will use any Confidential Information of the other Party for any purpose except as reasonably necessary to fulfill its obligations or exercise its rights under this Agreement. Neither Party will disclose any Confidential Information of the other Party nor permit any such Confidential Information to be disclosed, either directly or indirectly, to any third party or its personnel without the other Party's prior written consent, except as expressly permitted hereunder. Each Party may disclose Confidential Information of the other Party to its Representatives who are required to have the information in order for such Party to fulfill its obligations or exercise its rights under this Agreement, provided that such Representatives are subject to legally binding non-use and non-disclosure obligations consistent with this Agreement, prior to any disclosure of Confidential Information to such Representatives. If Recipient becomes legally compelled to disclose any Confidential Information of Discloser, Recipient will provide Discloser prompt written notice of such disclosure obligation, if legally permissible, and upon request will reasonably assist Discloser in seeking a protective order or other appropriate remedy. If Discloser waives Recipient's compliance with this Agreement or fails to obtain a protective order or other appropriate remedy, Recipient will furnish only that portion of the Confidential Information that is legally required to be disclosed, provided that any Confidential Information so disclosed will maintain its confidentiality protection for all purposes other than such legally compelled disclosure. + +6 + + + + + +5.3 Maintenance of Confidentiality. Recipient will take commercially reasonable measures to protect the secrecy of and avoid disclosure and unauthorized use of the Confidential Information of Discloser. Without limiting the foregoing, Recipient will take at least those measures that it employs to protect its own confidential information of a similar nature. Recipient will promptly notify Discloser in writing of any unauthorized use or disclosure, or suspected unauthorized use or disclosure, of Discloser's Confidential Information of which Recipient becomes aware. + +5.4 Confidential Terms. Except as otherwise required by applicable law or regulation, neither Party will disclose the existence or terms of this Agreement to any third party without the prior written consent of the other Party, except that (a) each Party may disclose this Agreement or its terms to its advisors and to existing and potential investors, acquirers, lenders and, in the case of Anixa, licensees on a reasonable need-to-know basis under circumstances that reasonably ensure the confidentiality thereof, and (b) Anixa may issue press releases, make investor and other public presentations and post content on its website from time to time regarding the existence and terms of this Agreement and progress regarding the development, manufacture and commercialization of Lead Scaffolds (including the identity of any permitted subcontractors under this Agreement), to the extent deemed appropriate for purposes of investor relations in its capacity as a publicly traded company and compliance with securities laws and regulations. + +5.5 Equitable Relief. Recipient agrees that any violation or threatened violation of this Article 5 may cause irreparable injury to Discloser, entitling Discloser to seek to obtain injunctive relief in addition to all legal remedies without showing or proving any actual damage and without any bond required to be posted. + +5.6 Return of Confidential Information. Upon expiration or termination of this Agreement, or upon written request, each Party will promptly return to the other Party, or upon written request of such other Party destroy, all materials containing such other Party's Confidential Information, provided, however, that the Recipient may retain in confidence (a) one archival copy of the Confidential Information of the Discloser in its legal files solely to permit the Recipient to determine compliance with this Agreement and (b) any portion of the Confidential Information of the Discloser which the Recipient is required by applicable law or regulation to retain. Notwithstanding the return or destruction of the materials described above, the Parties will continue to be subject to the terms of this Section 5. + +6. Intellectual Property. + +6.1 Background Intellectual Property. All inventions, know-how, data, discoveries and proprietary information, including all intellectual property rights in the foregoing, owned or controlled by a Party as of immediately prior to the Effective Date are and will remain the sole property of such Party. + +6.2 Inventions Owned by OntoChem. OntoChem will own, and Anixa hereby assigns to OntoChem, all right, title and interest in and to all Inventions directed to (a) any methods of generating or screening compound libraries and (b) the Rejected Hit Compounds (including the composition, use or manufacture thereof), in the case of this clause (b), effective as of the Selection Deadline (collectively (clauses (a) and (b)), "OntoChem Inventions"). As between the Parties, OntoChem will exclusively control the filing, prosecution, maintenance and enforcement of any patents and patent applications claiming OntoChem Inventions. + +7 + + + + + +6.3 Inventions Owned by Anixa. Anixa will own, and OntoChem hereby assigns to Anixa, all right, title and interest in and to all Inventions other than OntoChem Inventions, including, for clarity, Inventions directed to the Lead Scaffold(s) (including the composition, use or manufacture thereof) (collectively, "Anixa Inventions"). As between the Parties, Anixa will exclusively control the filing, prosecution, maintenance and enforcement of any patents and patent applications claiming Anixa Inventions. + +6.4 License Grant. OntoChem hereby grants to Anixa a non-exclusive, fully paid-up, royalty-free, perpetual, irrevocable, transferable, worldwide license (with the right to grant and authorize sublicenses through multiple tiers) under any patents which OntoChem or any of its Affiliates own or control during the term of this Agreement, to make, have made, use, sell, offer for sale and import the Lead Scaffold(s) and products that incorporate compounds from the Lead Scaffold(s). OntoChem will not incorporate any invention, discovery or other proprietary information owned by any third party into any Anixa Inventions or Deliverables without Anixa's prior written consent. + +6.5 Invention Disclosure and Implementation. Each Party will notify the other Party promptly in writing of each Invention made or generated by such Party. The determination of inventorship with respect to all Inventions will be made in accordance with United States patent law. Each Party will assign, and does hereby assign, to the other Party rights with respect to the applicable Inventions as necessary to achieve ownership as provided in Sections 6.2 and 6.3. Each assigning Party will execute and deliver all documents and instruments reasonably requested by the other Party to evidence or record such assignment or to file for, perfect or enforce the assigned rights. Each assigning Party will make its relevant Representatives (and their assignments and signatures on such documents and instruments) reasonably available to the other Party for assistance in accordance with this Section 6.5 at no charge. However, out of pocket expenses such as travel or communication costs shall be reimbursed. Each Party will have the sole right to file and prosecute patent applications claiming any Inventions of which such Party is the sole owner pursuant to this Agreement without the consent of the other Party, and such other Party will provide, and will cause its Representatives to provide, reasonable cooperation and assistance with such filing and prosecution upon request. To the extent OntoChem is obligated by reason of mandatory provisions of the Gesetz über Arbeitnehmererfindungen (ArbNErfG) (German law covering employee inventions) to make payments to its employees, OntoChem will be solely responsible, and indemnify Anixa, for any and all such payments to OntoChem's employees. + +6.6 No Implied Rights. Except as otherwise expressly provided herein, nothing in this Agreement is intended to grant to either Party any rights under any intellectual property right of the other Party. + +7. Representations and Warranties. + +7.1 Mutual Representations and Warranties. Each Party hereby represents and warrants to the other Party that: (a) it is duly organized, validly existing, and in good standing under the laws and regulations of the jurisdiction in which it is organized; (b) it has the requisite power and authority and the legal right to enter into this Agreement and to perform its obligations hereunder; (c) it has taken all requisite action on its part to authorize the execution and delivery of this Agreement and the performance of its obligations hereunder; (d) this Agreement has been duly executed and delivered by such Party and constitutes a legal, valid and binding obligation of such Party, enforceable against such Party in accordance with its terms; and (e) the execution, delivery and performance of this Agreement by it do not conflict with any agreement, instrument or understanding, oral or written, to which it is a party, or to which it is bound, and it will not enter into any agreement, instrument or understanding, oral or written, that conflicts with the rights and obligations of this Agreement during the term of this Agreement. + +8 + + + + + +7.2 Additional Representations and Warranties of OntoChem. OntoChem hereby further represents and warrants to Anixa that: (a) to OntoChem's knowledge, OntoChem's performance of its activities under the Research Plan does not infringe or constitute misappropriation of the intellectual property rights of any third party; (b) no licenses, permissions or releases from any third party are necessary for OntoChem's performance of its activities under the Research Plan; (c) OntoChem has obtained rights to use any third-party compound libraries and software referenced in the Research Plan under terms and conditions consistent with this Agreement; and (d) OntoChem's performance of its activities under the Research Plan will not result in any third party acquiring any right, title or interest in or to any Anixa Invention or Deliverable. + +7.3 Mutual Covenants. Each Party hereby covenants that: (a) all Representatives of such Party who participate in the performance of the activities contemplated by this Agreement will be subject to written obligations regarding the treatment of Confidential Information and the assignment of Inventions that are consistent with such Party's obligations under this Agreement, as of the commencement of such activities by such Representatives; and (b) such Party will comply with applicable laws and regulations in connection its performance of this Agreement. + +8. Indemnification and Insurance. + +8.1 Indemnification by Anixa. Anixa will indemnify, defend and hold harmless OntoChem, its Affiliates and their respective Representatives from and against any liability, demand, damage, cost or expense (including reasonable attorney's fees) arising from any third-party claim, action or proceeding arising from (a) Anixa's breach of this Agreement or (b) Anixa's negligence or willful misconduct in connection with this Agreement, except with respect to any matter for which OntoChem is obligated to provide indemnification under Section 8.2. + +8.2 Indemnification by OntoChem. OntoChem will indemnify, defend and hold harmless Anixa, its Affiliates and their respective Representatives from and against any liability, demand, damage, cost or expense (including reasonable attorney's fees) arising from any third-party claim, action or proceeding arising from (a) OntoChem's breach of this Agreement or (b) OntoChem's negligence or willful misconduct in connection with this Agreement, except with respect to any matter for which Anixa is obligated to provide indemnification under Section 8.1. Financial reimbursements claimed according to such indemnification shall not exceed payments received by OntoChem under this contract. + +8.3 Indemnification Procedure. A Party (the "Indemnitee") that intends to claim indemnification under this Section 8 will promptly notify the other Party (the "Indemnitor") in writing of any claim, action or proceeding in respect of which the Indemnitee intends to claim such indemnification (each a "Claim"), and the Indemnitor will have the right to control the defense and/or settlement of such Claim, provided that the Indemnitee will have the right to participate, at its own expense, with counsel of its own choosing in the defense and/or settlement of such Claim. The Indemnitor will not, without the prior written consent of the Indemnitee, enter into any settlement or agree to any disposition of the applicable Claim that imposes any conditions or obligations on the Indemnitee. The failure to deliver written notice to the Indemnitor within a reasonable period of time after the commencement of any such Claim will not relieve such Indemnitor of any liability to the Indemnitee under this Section 8 except to the extent such failure is prejudicial to the Indemnitor's ability to defend such Claim. The Indemnitee and its Representatives, at the Indemnitor's request and expense, will provide full information and reasonable assistance to the Indemnitor and its legal representatives with respect to the applicable Claim subject to indemnification. It is understood that only a Party may claim indemnification under this Section 8 (on its own behalf or on behalf of its Affiliates or their respective Representatives), and such Party's Affiliates and their respective Representatives may not directly claim indemnification hereunder. + +9 + + + + + +8.4 Insurance. Each Party will maintain liability insurance, with reputable and financially secure insurance carriers, at levels consistent with industry standards based upon such Party's respective activities and indemnification obligations under this Agreement. Upon request, each Party will furnish to the other Party certificates issued by the applicable insurance company(ies) evidencing such insurance. + +9. Miscellaneous. + +9.1 Relationship of the Parties. The Parties are independent contractors and nothing contained in this Agreement will be construed to place them in the relationship of partners, principal and agent, employer/employee or joint venturer. Neither Party will have the power or right to bind or obligate the other Party, nor will either Party hold itself out as having such authority. + +9.2 Use of Name. Neither Party will use the name, logo or trademark of the other Party in any advertising, publicity or other promotional activities without such other Party's prior written consent, unless such use is reasonably necessary to comply with applicable laws or regulations and subject to clause (b) of Section 5.4. + +9.3 Notices. Any notice required or permitted to be given under this Agreement by either Party will be in writing (in English) and will be delivered to the applicable Party at its respective address set forth below by personal delivery, e-mail, reputable international courier or registered or certified mail. Notices will be deemed given on the date received if delivered personally, on the next business day if sent by e-mail or international courier, or five (5) days after the date postmarked if sent by registered or certified mail, return receipt requested, postage prepaid. + +If to OntoChem: OntoChem GmbH Blücherstr. 24, D-06120 Halle (Saale) Germany Attention: Chief Executive Officer E-mail: lutz.weber@ontochem.com + +If to Anixa: Anixa Biosciences, Inc. 3150 Almaden Expressway, Suite 250 San Jose, CA 95118 U.S.A. Attention: Chief Executive Officer E-mail: ak@anixa.com 10 + + + + + +9.4 Governing Law. This Agreement and the rights and obligations of the Parties hereunder will be governed by the laws of the State of Delaware without regard to the conflict of laws provisions of any jurisdiction. The Parties agree that the 1980 United Nations Convention on Contracts for the International Sale of Goods shall not apply to this Agreement. + +9.5 Arbitration. The Parties agree that any dispute arising out of, or in connection with, this Agreement, which cannot be amicably resolved between the Parties, will be finally settled by binding arbitration under the then current rules of the International Chamber of Commerce ("ICC") by one (1) arbitrator appointed in accordance with ICC rules. Any such arbitration will be conducted in English in the State of Delaware. The arbitrator may grant injunctive or other relief in such dispute or controversy. The decision of the arbitrator will be final, conclusive and binding on the Parties. Judgment may be entered on the arbitrator's decision in any court of competent jurisdiction. The costs of the arbitration, including administrative and arbitrator's fees, will be shared equally by the Parties. Each Party will bear the cost of its own attorneys' fees and expert witness fees. Notwithstanding anything to the contrary in this Agreement, a Party may seek a temporary restraining order or a preliminary injunction from any court of competent jurisdiction in order to prevent immediate and irreparable injury, loss or damage on a provisional basis, pending the selection of the arbitrator or pending the arbitrator's determination of the merits of any dispute pursuant to this Section 9.5. + +9.6 Severability. If any one or more provisions of this Agreement will be found to be invalid or unenforceable in any respect, the Parties will negotiate in good faith a valid and enforceable substitute provision that most nearly reflects the original intent of the Parties, and the validity and enforceability of the remaining provisions of this Agreement will not in any way be affected or impaired thereby. + +9.7 Amendment; Waiver. This Agreement may be amended or modified, and any of the terms of this Agreement may be waived, only by a written instrument executed by each Party or, in the case of waiver, by the Party or Parties waiving compliance. The delay or failure of either Party at any time or times to require performance of any provision will in no manner affect its rights at a later time to enforce the same. No waiver by either Party of any condition or of the breach of any term contained in this Agreement, in any one or more instances, will be deemed to be, or considered as, a further or continuing waiver of any such condition or of the breach of such term or any other term of this Agreement. + +9.8 Assignment. Neither Party may assign or otherwise transfer this Agreement (or any of its rights or obligations hereunder) without the prior written consent of the other Party, except that either Party may assign this Agreement without such consent to an entity that acquires all or substantially all of the business or assets of such Party to which this Agreement relates, whether by merger, consolidation, sale of assets or otherwise. Any assignment or transfer of this Agreement in violation of this Section 9.8 will be null and void. This Agreement will bind and inure to the benefit of the Parties and their respective successors and permitted assigns. + +9.9 Entire Agreement. This Agreement represents the complete and entire understanding between the Parties regarding the subject matter hereof and supersedes all prior negotiations, representations or agreements, either written or oral, regarding such subject matter. + +9.10 Counterparts. The Parties may execute this Agreement in multiple counterparts, all of which together will constitute one instrument. Signatures to this Agreement delivered by facsimile or other electronic transmission (e.g., portable document format (PDF)) will be deemed to be binding as original signatures. + +(The remainder of this page is intentionally left blank. The signature page follows.) + + + + + +11 + + + + + +IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date. + + + + + +ANIXA BIOSCIENCES, INC. ONTOCHEM GMBH + +By: /s/ Amit Kumar By: /s/ Lutz Weber Amit Kumar, Ph.D. Name: Dr. Lutz Weber President and Chief Executive Officer Title: CEO 12 + + + + + +Exhibit A: Research Plan + +*** + +13 \ No newline at end of file diff --git a/full_contract_txt/ARMSTRONGFLOORING,INC_01_07_2019-EX-10.2-INTELLECTUAL PROPERTY AGREEMENT.txt b/full_contract_txt/ARMSTRONGFLOORING,INC_01_07_2019-EX-10.2-INTELLECTUAL PROPERTY AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..9b6347be1909457cbd2de4855cd228c85923d219 --- /dev/null +++ b/full_contract_txt/ARMSTRONGFLOORING,INC_01_07_2019-EX-10.2-INTELLECTUAL PROPERTY AGREEMENT.txt @@ -0,0 +1,567 @@ +Exhibit 10.2 + +Execution Version + +INTELLECTUAL PROPERTY AGREEMENT + +This INTELLECTUAL PROPERTY AGREEMENT (this "Agreement"), dated as of December 31, 2018 (the "Effective Date") is entered into by and between Armstrong Flooring, Inc., a Delaware corporation ("Seller") and AFI Licensing LLC, a Delaware limited liability company ("Licensing" and together with Seller, "Arizona") and AHF Holding, Inc. (formerly known as Tarzan HoldCo, Inc.), a Delaware corporation ("Buyer") and Armstrong Hardwood Flooring Company, a Tennessee corporation (the "Company" and together with Buyer the "Buyer Entities") (each of Arizona on the one hand and the Buyer Entities on the other hand, a "Party" and collectively, the "Parties"). + +WHEREAS, Seller and Buyer have entered into that certain Stock Purchase Agreement, dated November 14, 2018 (the "Stock Purchase Agreement"); WHEREAS, pursuant to the Stock Purchase Agreement, Seller has agreed to sell and transfer, and Buyer has agreed to purchase and acquire, all of Seller's right, title and interest in and to Armstrong Wood Products, Inc., a Delaware corporation ("AWP") and its Subsidiaries, the Company and HomerWood Hardwood Flooring Company, a Delaware corporation ("HHFC," and together with the Company, the "Company Subsidiaries" and together with AWP, the "Company Entities" and each a "Company Entity") by way of a purchase by Buyer and sale by Seller of the Shares, all upon the terms and condition set forth therein; + +WHEREAS, Arizona owns certain Copyrights, Know-How, Patents and Trademarks which may be used in the Company Field, and in connection with the transactions contemplated by the Stock Purchase Agreement the Company desires to acquire all of Arizona's right, title and interest in and to such Intellectual Property used exclusively in the Company Field, and obtain a license from Arizona to use other such Intellectual Property on the terms and subject to the conditions set forth herein; + +WHEREAS, Seller is signatory to the Trademark License Agreement pursuant to which Seller obtains a license to the Arizona Licensed Trademarks; + +WHEREAS, the Company desires to obtain a sublicense to use the Arizona Licensed Trademarks in the Company Field; + +WHEREAS, Arizona has obtained consent from all counterparties to the Trademark License Agreement to grant to the Company the sublicenses to the Arizona Licensed Trademarks included in this Agreement; and + +WHEREAS, the Company Entities own certain Copyrights and Know-How which may be used in the Arizona Field, and in connection with the transactions contemplated by the Stock Purchase Agreement, Arizona desires to obtain a license from the Company Entities to use such Intellectual Property on the terms and subject to the conditions set forth herein. + +NOW, THEREFORE, in consideration of the foregoing and the mutual agreements, provisions and covenants contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows: + + + + + +1. DEFINITIONS AND INTERPRETATION 1.1 Certain Definitions. As used herein, capitalized terms have the meaning ascribed to them herein, including the following terms have the meanings set forth below. Capitalized terms that are not defined in this Agreement shall have the meaning set forth in the Stock Purchase Agreement. (a) "Arizona Assigned Copyrights" means all Copyrights, whether registered or unregistered, owned by Licensing or Seller as of the Effective Date and used or held for use exclusively in the Company Field as of November 14, 2018 (the "SPA Signing Date") and/or as of the Effective Date. (b) "Arizona Assigned Internet Domain Names" means the Internet domain names set forth on Schedule 1.1(b) and all other Internet domain names owned by Licensing or Seller as of the Effective Date and used or held for use exclusively in the Company Field as of the SPA Signing Date and/or as of the Effective Date (other than any Internet domain names that include any Arizona Licensed Trademarks). (c) "Arizona Assigned IP" means the Arizona Assigned Copyrights, Arizona Assigned Internet Domain Names, Arizona Assigned Know- How, Arizona Assigned Patents and Arizona Assigned Trademarks. (d) "Arizona Assigned Know-How" means all Know-How owned by Licensing or Seller as of the Effective Date and used or held for use exclusively in the Company Field as of the SPA Signing Date and/or as of the Effective Date. (e) "Arizona Assigned Patents" means the Patents set forth on Schedule 1.1(e) and all other Patents owned by Licensing or Seller and used or held for use exclusively in the Company Field as of the SPA Signing Date and/or as of the Effective Date. (f) "Arizona Assigned Trademarks" means the Trademarks set forth on Schedule 1.1(f) and all other Trademarks owned by Licensing or Seller as of the Effective Date and used or held for use exclusively in the in the Company Field as of the SPA Signing Date and/or as of the Effective Date (other than, for clarity any Arizona Licensed Trademarks). (g) "Arizona Domain Names" means the Internet domain names set forth on Schedule 1.1(g). (h) "Arizona Field" means all activities conducted by Arizona or its Affiliates, other than the Company Field. (i) "Arizona Licensed Copyrights" means all Copyrights owned by Licensing or Seller or their respective Affiliates, as of the Effective Date and used or held for use in the Company Field during the five (5) years prior to the Effective Date (other than the Arizona Assigned Copyrights). 2 + + + + + +(j) "Arizona Licensed IP" means the Arizona Licensed Copyrights, the Arizona Licensed Know-How, the Arizona Licensed Patents, the Arizona Licensed Trademarks, the Diamond Licensed Trademarks and the Phase-Out Marks. (k) "Arizona Licensed Know-How" means all Know-How owned by Licensing or Seller or their respective Affiliates, as of the Effective Date and used or held for use in the Company Field during the five (5) years prior to the Effective Date (other than the Arizona Assigned Know- How). (l) "Arizona Licensed Patents" means the Patents set forth on Schedule 1.1(l) and all other Patents owned by Licensing or Seller or their respective Affiliates as of the Effective Date and used or held for use in the Company Field during the five (5) years prior to the Effective Date (other than the Arizona Assigned Patents). (m) "Arizona Licensed Trademarks" means the Trademarks set forth on Schedule 1.1(m). (n) "Arizona Trademark License Term" means the period commencing on the Effective Date and ending twenty-four (24) months thereafter. (o) "Company Field" means the design, development, manufacture, marketing, promotion, advertising, sourcing, distribution and sale of solid hardwood and engineered wood flooring products by or for any Company Entity. (p) "Company Licensed Copyrights" means all Copyrights and registrations and applications for any of the foregoing owned by any Company Entity as of the Effective Date and used or held for use in the Arizona Field as of the Effective Date. (q) "Company Licensed IP" means the Company Licensed Copyrights, the Company Licensed Know-How and the Company Licensed Patents. (r) "Company Licensed Know-How" means all Know-How owned by any Company Entity as of the Effective Date and used or held for use in the Arizona Field as of the Effective Date. (s) "Company Licensed Patents" means the Patents set forth on Schedule 1.1(s). (t) "Copyrights" means copyrights (whether registered or unregistered) including applications for copyright (excluding, for clarity, Trademarks). (u) "Diamond Licensed Trademarks" means the Trademarks set forth on Schedule 1.1(u). (v) "Diamond Product" means the design, development, manufacture, marketing, promotion, advertising, sourcing, distribution and sale of the solid hardwood flooring product by any Company Entity as conducted under the Diamond Licensed Trademarks by any Company Entity prior to the Effective Date 3 + + + + + +(including the composition of coating used with respect to such solid hardwood flooring product). (w) "Diamond Trademark License Term" means the period commencing on the Effective Date and ending eighteen (18) months thereafter. (x) "Know-How" means trade secrets, and other confidential and proprietary information, inventions, processes, formulas and methodologies. (y) "Licensed IP" means the Arizona Licensed IP and the Company Licensed IP. (z) "Licensed Copyrights" means the Arizona Licensed Copyrights and the Company Licensed Copyrights. (aa) "Licensed Know-How" means the Arizona Licensed Know-How and the Company Licensed Know-How. (bb) "Licensed Trademarks" means the Arizona Licensed Trademarks, the Diamond Licensed Trademarks and the Phase-Out Marks. (cc) "Patents" means patent rights, including patents, patent applications, and all related continuations, continuations-in-part, divisionals, renewals, reissues, re-examinations, substitutions, and extensions thereof, and applications for any of the foregoing. (dd) "Proceeding" means any proceeding, claim, suit or action arising out of, or in connection with, this Agreement or its subject matter (including its validity, formation at issue, effect, interpretation, performance or termination), howsoever arising. (ee) "Seller Licensed Trademarks" means the Arizona Licensed Trademarks and the Diamond Licensed Trademarks. (ff) "Third Party" means any Person other than Arizona, the Company, and their respective Affiliates. (gg) "Trademarks" means any trademarks, service marks, trade names, trade dress, and other similar designations of source or origin, and registrations and applications for any of the foregoing. (hh) "Trademark License Agreement" means the Trademark License Agreement by and between Armstrong World Industries, Inc., AWI Licensing LLC and Armstrong Flooring, Inc, dated as of April 1, 2016 and attached hereto as Exhibit A. 4 + + + + + +1.2 Interpretation. Section 10.5 and 10.14 of the Stock Purchase Agreement shall apply hereto, mutatis mutandis. 1.3 Company Actions. In respect of any action herein required to be undertaken by any of the Company Entities, or to be omitted by any of the Company Entities, the Buyer Entities shall cause the applicable Company Entity to so undertake or omit to undertake, as applicable, such action. 2. ASSIGNMENT OF ARIZONA ASSIGNED IP 2.1 Assignment. Arizona agrees to assign and hereby assigns its entire right, title and interest in and to the Arizona Assigned IP to the Company. 2.2 Recordation of Assignment. Arizona will reasonably cooperate with the Company to obtain, record, and perfect title to, and provide all necessary evidence of the Company's ownership of, the Arizona Assigned IP, including the execution of (i) a Patent Assignment in the form of the attached Exhibit B, and (ii) a Trademark Assignment in the form of the attached Exhibit C. 3. GRANT OF COPYRIGHT LICENSE 3.1 Arizona Copyright Grant. Subject to the terms and conditions of this Agreement, Arizona hereby grants to the Company a perpetual, non- exclusive, royalty-free license in, to and under the Arizona Licensed Copyrights for use in the Company Field throughout the world. 3.2 Company Copyright Grant. Subject to the terms and conditions of this Agreement, the Company hereby grants to Seller a perpetual, non- exclusive, royalty-free license in, to and under the Company Licensed Copyrights for use in the Arizona Field throughout the world. 4. GRANT OF KNOW-HOW LICENSE 4.1 Arizona Know-How Grant. Subject to the terms and conditions of this Agreement, Arizona hereby grants to the Company a perpetual, non- exclusive, royalty-free license in, to and under the Arizona Licensed Know-How for use in the Company Field throughout the world. 4.2 Company Know-How Grant. Subject to the terms and conditions of this Agreement, the Company hereby grants to Seller a perpetual, non- exclusive, royalty-free license in, to and under the Company Licensed Know-How for use in the Arizona Field throughout the world. 5. GRANT OF PATENT LICENSE 5.1 Arizona Patent Grant. Subject to the terms and conditions of this Agreement, Arizona hereby grants to the Company a perpetual, non-exclusive, royalty-free license in, to and under the Arizona Licensed Patents for use in the Company Field throughout the world. 5 + + + + + +5.2 Company Patent Grant. Subject to the terms and conditions of this Agreement, the Company hereby grants to Seller a perpetual, non-exclusive, royalty-free license in, to and under the Company Licensed Patents for use in the Arizona Field throughout the world. 6. GRANT OF TRADEMARK LICENSE 6.1 Arizona Licensed Trademark Grant. Subject to the terms and conditions of this Agreement, Arizona hereby grants to the Company a limited, non- exclusive, royalty-free, non-sublicensable (except as set forth in Section 7.1), non-assignable license in, to and under the Arizona Licensed Trademarks for the Arizona Trademark License Term for use in the Company Field throughout the world only in the form and manner that such Arizona Licensed Trademarks are used in the Business as of the Closing, provided that the Company shall use commercially reasonable efforts to present the Arizona Licensed Trademarks in the form set forth on Schedule 6.1. 6.2 Diamond Licensed Trademark Grant. Subject to the terms and conditions of this Agreement, Arizona hereby grants to the Company a limited, non- exclusive, royalty-free, non-sublicensable (except as set forth in Section 7.1), non-assignable (except as set forth in Section 13.2) license in, to and under the Diamond Licensed Trademarks for the Diamond Trademark License Term for use with respect to the Diamond Product throughout the world only in the form and manner set forth on Schedule 6.2. 6.3 Quality Control. The Buyer Entities acknowledge the importance of Arizona's exercise of quality control over the use of the Seller Licensed Trademarks to preserve the continued integrity and validity of the Seller Licensed Trademarks and to protect the value and goodwill associated with the Seller Licensed Trademarks, and accordingly: (a) The Company shall ensure that all goods and services provided by the Company, under or in association with any of the Seller Licensed Trademarks, shall (i) be substantially the same as or greater than the quality of goods and services provided under such Seller Licensed Trademarks immediately prior to the Effective Date and (ii) not be associated with any goods or services, including any activities, that are reasonably likely to have an adverse effect on (A) the image or reputation of any of the Seller Licensed Trademarks or (B) Seller's right, title or interest in and to, any of the Arizona Licensed Trademarks. (b) The Company shall not tarnish or bring into disrepute the reputation of or goodwill associated with the Seller Licensed Trademarks or Arizona. (c) The Company shall use the Seller Licensed Trademarks at all times in compliance with all applicable Laws. (d) The Company shall include trademark and other notices in connection with the use of the Seller Licensed Trademarks as reasonably requested by Arizona from time to time. 6 + + + + + +(e) The Company shall upon Arizona's reasonable request from time to time, supply to Arizona representative samples and/or written descriptions, as appropriate, of uses made by the Company of the Seller Licensed Trademarks. (f) The Buyer Entities acknowledge that this license grant does not include, and the Company shall receive no rights under this Agreement or the Stock Purchase Agreement, to use any Trademark that is confusingly similar to or derivative of a Seller Licensed Trademark (other than the Seller Licensed Trademarks themselves as expressly authorized hereunder). 6.4 Trademark License Agreement. In addition to the obligations set forth in Section 6.3, and notwithstanding any other provision of this Agreement, the Company shall comply with all obligations applicable to Arizona and its Affiliates under the Trademark License Agreement including, for the avoidance of doubt, any obligations with respect to reporting Complaints (as defined in the Trademark License Agreement), which reports the Company shall provide to Arizona, and quality control and standards, and Licensor Competitors (as defined in the Trademark License Agreement), and neither Party shall undertake any act that would constitute a breach or a basis for termination under the Trademark License Agreement. 6.5 Trade Names. The Company shall not create or use any corporate or trade names that include the Arizona Licensed Trademarks, other than those in existence immediately prior to the Effective Date. No later than thirty (30) days following the Closing, each of AWP and the Company shall change its respective corporate name and trade name and cause its organizational documents to be amended to remove any reference to "Armstrong." 6.6 With respect to any Trademarks notified to the Company in writing after the Effective Date that are used as of the Effective Date in the Company Field and are not (i) owned by any Company Entity, (ii) Arizona Assigned Trademarks, or (iii) Seller Licensed Trademarks (the "Phase-Out Marks") in each case (i)-(iii) the Company shall have a period of twenty-four (24) months from the date of notification to phase out all use. Any use by the Company of any of the Phase-Out Marks as permitted in this Section 6.6, is subject to its use of the Phase-Out Marks in a form and manner and with standards of quality consistent with that in effect for the Phase-Out Marks as of the Effective Date. 6.7 Domain Names. Subject to the terms and conditions of this Agreement, the license set forth in Section 6.1 shall include the right of the Company to use the Arizona Domain Names solely in connection with the applicable Arizona Licensed Trademarks in the Company Field during the Arizona Trademark License Term, in the ordinary course of business in a manner generally consistent with the past practice of Arizona in the Company Field. The Company shall not have the right to register any domain name or social media addresses (or any similar or successor identifiers) containing Arizona Licensed Trademarks. 7 + + + + + +7. INTELLECTUAL PROPERTY RIGHTS 7.1 Sublicenses. Arizona may sublicense the licenses granted herein to its Affiliates and Third Parties in the ordinary course of business in support of its and its Affiliates' business, but not for the independent use of Third Parties, and the Company may sublicense the licenses granted herein to Third Parties, its Subsidiaries, AWP, controlled Affiliates, or any holding company that is a direct or indirect parent of the Company in the ordinary course of business in support of its and its Subsidiaries' or controlled Affiliates' business, but not for the independent use of Third Parties (each such Affiliate, Third Party, AWP or Subsidiary, a "Sublicensee"). Each Party shall ensure that any sublicense that it grants to a Sublicensee does not conflict with this Agreement. For clarity, granting a sublicense shall not relieve the Parties of any obligations hereunder and each Party shall cause each of its Sublicensees to comply, and shall remain responsible for such Sublicensees' compliance, with all terms and conditions hereof applicable to the Parties. At the request of a licensing Party, the other Party shall provide to the licensing Party a list of all Sublicensees and otherwise reasonably cooperate with the licensing Party in connection with Sublicensees' compliance with this Agreement. 7.2 Reservation of Rights. Except as expressly provided in the Stock Purchase Agreement or herein, each Party reserves its and its Affiliates' rights in and to all Intellectual Property (including with respect to the use, registration and licensing thereof). 8. OWNERSHIP 8.1 Ownership of Arizona Licensed IP. The Buyer Entities acknowledge and agree that (a) Arizona and its Affiliates own the Arizona Licensed IP (other than the Arizona Licensed Trademarks), (b) AWI Licensing LLC owns the Arizona Licensed Trademarks, (b) neither the Company, nor its Affiliates or its Sublicensees, will acquire any ownership rights in the Arizona Licensed IP, and (c) the Company shall not represent or make any claim that it has an ownership interest in any Arizona Licensed IP. Without limitation to the foregoing, the Company shall not file applications to register any Arizona Licensed IP or assist any person in doing the same, or contest, challenge, or otherwise take any action adverse to Arizona's and its Affiliates' ownership of or rights in and to the Arizona Licensed IP, or assist any person in doing the same. 8.2 Ownership of Company Licensed IP. Arizona acknowledges and agrees that (a) the Company and its Affiliates own the Company Licensed IP, (b) neither Arizona, nor its Affiliates or its Sublicensees, will acquire any ownership rights in the Company Licensed IP, and (c) Arizona shall not represent or make any claim that it has an ownership interest in any Company Licensed IP. Without limitation to the foregoing, Arizona shall not file applications to register any Company Licensed IP or assist any person in doing the same, or contest, challenge, or otherwise take any action adverse to the Company's and its Affiliates' ownership of or rights in and to the Company Licensed IP, or assist any person in doing the same. 8 + + + + + +9. PROSECUTION, MAINTENANCE AND ENFORCEMENT 9.1 Responsibility and Cooperation. As between the Parties, Arizona, with respect to the Arizona Licensed IP, and the Buyer Entities, with respect to the Company Licensed IP, shall have the right (but not the obligation) for filing, prosecuting, and maintaining all Arizona Licensed IP and Company Licensed IP, respectively, in the licensing Party's name. For the avoidance of doubt, in case either such Party files any new Intellectual Property registration to the extent covering the Licensed IP, such new Intellectual Property registration shall automatically become Licensed IP. However, and for the further avoidance of doubt, the aforementioned shall not apply to new Intellectual Property created by a licensee Party or its Sublicensees separately and independently from the Licensed IP, for example in case of separate and independent technical enhancements or advancements. The Parties shall reasonably consult and coordinate with each other at the other Party's request with respect to the matters set forth in this Section 9.1. 9.2 No Additional Obligations. This Agreement shall not obligate either Party to disclose to the other Party, or maintain, register, prosecute, pay for, enforce, or otherwise manage any Intellectual Property except as expressly set forth herein. 9.3 Enforcement. As between the Parties, Arizona, with respect to the Arizona Licensed IP, and the Company or Buyer, with respect to the Company Licensed IP, shall have the right (but not the obligation) to elect to bring a Proceeding or enter into settlement discussions regarding, or otherwise seek to resolve, any infringement, misappropriation, or other violation, or allegations of invalidity or unenforceability, of the Licensed IP. In the event that Arizona declines to institute any Proceedings against third-party infringers or violators of any Arizona Licensed Patents, regarding activities that would fall within the Company Field if conducted by the Company, within forty-five (45) days after being notified or becoming aware of such infringing conduct, the Company or Buyer shall have the right to institute any Proceedings against such third-party infringers or violators. In the event that the Company or Buyer elects to institute such Proceedings, Arizona will reasonably cooperate with the Company or Buyer in such Proceedings, and the Company or Buyer shall reimburse Arizona for all reasonable costs and fees incurred by Arizona as a result of such cooperation. Such cooperation by Arizona will include joining such Proceeding as a party, if deemed necessary by the Company or Buyer. In the event that Arizona elects to bring a Proceeding against any alleged infringer of the Arizona Licensed Trademarks and seeks the cooperation of the Licensor of the Trademark License Agreement in such Proceeding, Arizona will take reasonable steps to assist the Company or Buyer in requesting the cooperation of the Licensor of the Trademark License Agreement, and pursuing an infringement claim against such alleged infringer. The Company or Buyer, as applicable, shall retain all benefits, recoveries, injunctions or other value derived from such Proceedings instituted by such Party. 10. INDEMNIFICATION 10.1 Indemnification. Each Party (the "Indemnifying Party") agrees to indemnify, defend and hold harmless the other Party and its Affiliates and their respective employees, 9 + + + + + +directors, officers, agents and successors (collectively, the "Indemnified Parties") from and against any and all losses (including all costs, liabilities (including present and future damages), claims and expenses) incurred or suffered by any of the Indemnified Parties, to the extent arising out of, relating to or resulting from (a) a breach by the Indemnifying Party of this Agreement; or (b) any gross negligence or willful misconduct of the Indemnifying Party in connection with this Agreement. 11. DISCLAIMERS 11.1 Disclaimer. Each Party hereby acknowledges that, except to the extent expressly set forth in this Agreement, the Stock Purchase Agreement, the Transition Services Agreement or the Confidentiality Agreement, neither Party nor any of its Affiliates has made any representation or warranty, expressed or implied, including any representation or warranty regarding the validity, enforceability, or scope of the Licensed IP, noninfringement, merchantability or fitness for a particular purpose. 12. TERM 12.1 Term and Termination. (a) Unless earlier terminated pursuant to the provisions hereof, the term of this Agreement and the licenses and other grants of rights (and related obligations) under this Agreement shall (i) with respect to the Arizona Licensed Trademarks, be for the Arizona Trademark License Term, (ii) with respect to the Diamond Licensed Trademarks, be for the Diamond Trademark License Term, (iii) with respect to the Phase- Out Marks, be for the term set forth in Section 6.6, and (iv) with respect to Copyrights, Know-How and Patents, be in perpetuity. (b) Either Party may terminate this Agreement if the other Party materially breaches this Agreement and fails to remedy such breach within thirty (30) days' written notice thereof; provided, however, that if the material breach of this Agreement by the breaching Party is limited to the Licensed Copyrights, Licensed Know-How, the Arizona Licensed Patents, or the Licensed Trademarks, the non-breaching Party shall be entitled to termination solely with respect to the affected part of the license (i.e., in such case, the non-breaching Party may terminate this Agreement with respect to the Licensed Copyrights or the Licensed Know-How or the Arizona Licensed Patents or the Licensed Trademarks, as applicable). 12.2 Effect of Termination. (a) Effect of Termination. Upon termination of this Agreement, each licensee Party shall and shall cause all of its Sublicensees to cease all use of the Licensed IP that is subject to such termination (excluding for clarity (a) any Arizona Licensed Patents, Licensed Copyrights or Licensed Trademarks that are expired, invalid or abandoned or (b) any Licensed Know-How that no longer constitutes confidential information). 10 + + + + + +(b) Survival. The following provisions of this Agreement, together with all other provisions of this Agreement that expressly specify that they survive, shall survive expiration or termination of this Agreement, in part or in its entirety: Sections 8, 10, 11, 12.2(a) and 13. 13. MISCELLANEOUS 13.1 Entire Agreement. This Agreement (together with the Schedules attached hereto), the Stock Purchase Agreement, the Transition Services Agreement and the Confidentiality Agreement constitute the entire agreement of the Parties hereto and supersede all prior negotiations, correspondence, agreements and undertakings, both written and oral, between or among the Parties, or any of them, with respect to the subject matter hereof. It shall be expressly understood that the Stock Purchase Agreement shall govern the transactions contemplated thereby as a whole and that this Agreement shall not be construed as an amendment or variation of the Stock Purchase Agreement but rather shall be complemented by and interpreted in light of the Stock Purchase Agreement. In the event that any provision of this Agreement is inconsistent with, conflicts with or contradicts any term of the Stock Purchase Agreement, the terms of the Stock Purchase Agreement will prevail. 13.2 Assignment. Except as otherwise provided in this Agreement, including under Section 7.1, neither this Agreement nor any of the rights, interests or obligations of any Party under this Agreement shall be assigned, in whole or in part, by operation of law or otherwise, by either Party without the prior written consent of the other Party; provided, however, that (a) either Party may assign any of the foregoing in connection with the sale or other transfer of the applicable business or assets of such Party or its Affiliates to which this Agreement relates (except that neither of the Buyer Entities may assign any such rights, interests or obligations with respect to the Arizona Licensed Trademarks); (b) Arizona may assign any of the foregoing to one or more of its Affiliates and (c) the Company and Buyer may assign any of the foregoing to one or more of its Subsidiaries, controlled Affiliates, AWP, or any holding company that is a direct or indirect parent of the Company; provided that in each case (b) and (c), no assignment shall relieve the assigning Party of any of its obligations under this Agreement unless agreed to by the non-assigning Party. Any assignment or other disposition in violation of the preceding sentence shall be void. 13.3 Notices. All notices and other communications given or made pursuant hereto shall be in writing and shall be deemed to have been duly given (i) on the date delivered, if delivered personally, (ii) on the third (3rd) Business Day after being mailed by registered or certified mail (postage prepaid, return receipt requested), or (iii) on the next Business Day after being sent by reputable overnight courier (delivery prepaid), in each case, to the parties at the following addresses, or on the date sent and confirmed by electronic transmission or confirmatory return email to the telecopier number or email address specified below (or at such other address, telecopier number or email address for a Party as shall be specified by notice given in accordance with this Section 13.3): + +(a) If to Buyer: 11 + + + + + +c/o American Industrial Partners 450 Lexington Avenue, 40th Floor Attention: General Counsel and Richard Hoffman Email: notices@americanindustrial.com richard@americanindustrial.com + +with a copy to: + +Baker Botts L.L.P. 1299 Pennsylvania Avenue, NW Washington, D.C. 20004 Attention: Terrance L. Bessey Brendan O. Dignan Email: terrance.bessey@bakerbotts.com brendan.dignan@bakerbotts.com + +(b) If to Arizona: + +Armstrong Flooring, Inc. 2500 Columbia Avenue, PO Box 3025 Lancaster, PA 17604 Attention: Christopher S. Parisi Email: csparisi@armstrongflooring.com + +with a copy to: + +Skadden, Arps, Slate, Meagher & Flom LLP 4 Times Square New York, NY 10036 Attention: Eric L. Cochran Steven J. Daniels Email: eric.cochran@skadden.com steven.daniels@skadden.com 13.4 Specific Performance. Each Party hereto acknowledges that money damages would be both incalculable and an insufficient remedy for any breach of this Agreement by such Party and that any such breach would cause Arizona, on the one hand, and the Buyer Entities, on the other hand, irreparable harm. Accordingly, each Party hereto also agrees that, in the event of any breach or threatened breach of the provisions of this Agreement by such Party, Arizona, on the one hand, and the Buyer Entities, on the other hand, shall be entitled to equitable relief without the requirement of posting a bond or other security, including in the form of injunctions and orders for specific performance. Any and all remedies herein expressly conferred upon a Party will be deemed cumulative with and not exclusive of any other remedy conferred hereby, or by law or equity upon such Party, and the exercise by a Party of any one remedy will not preclude the exercise of any other remedy. Arizona, on the one hand, and Buyer Entities, on the other hand, hereby agree not to raise any objections to the availability of the equitable remedy of specific 12 + + + + + +performance to prevent or restrain breaches or threatened breaches of this Agreement by the Buyer Entities or Arizona, as applicable, and to specifically enforce the terms and provisions of this Agreement to prevent breaches or threatened breaches of, or to enforce compliance with, the covenants and obligations of the Buyer Entities or Arizona, as applicable, under this Agreement. 13.5 Governing Law; Jurisdiction; Waiver of Jury Trial. (a) This Agreement shall be governed by the laws of the State of Delaware, its rules of conflict of laws notwithstanding. Each Party hereby agrees and consents to be subject to the jurisdiction of the Court of Chancery of the State of Delaware in and for New Castle County, or if the Court of Chancery lacks jurisdiction over such dispute, in any state or federal court having jurisdiction over the matter situated in New Castle County, Delaware, in any Action seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby. Each Party hereby irrevocably consents to the service of any and all process in any such Action by the delivery of such process to such Party at the address and in the manner provided in Section 13.3 hereof. Each of the Parties hereto irrevocably and unconditionally waives any objection to the laying of venue of any Proceeding arising out of this Agreement or the transactions contemplated hereby in the Court of Chancery of the State of Delaware in and for New Castle County, or if the Court of Chancery lacks jurisdiction over such dispute, in any state or federal court having jurisdiction over the matter situated in New Castle County, Delaware, and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such Proceeding brought in any such court has been brought in an inconvenient forum. (b) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE BREACH, TERMINATION OR VALIDITY OF THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (iv) EACH SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 13.5(b). 13 + + + + + +13.6 Severability. If any term or other provision of this Agreement, or any portion thereof, is invalid, illegal or incapable of being enforced by any rule of law or public policy, all other terms and provisions of this Agreement, or the remaining portion thereof, shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any Party. Upon such determination that any such term or other provision, or any portion thereof, is invalid, illegal or incapable of being enforced, the Parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are consummated to the fullest extent possible. 13.7 Counterparts. This Agreement may be executed in any number of counterparts, including by means of email in portable document format (.pdf), each of which when executed shall be deemed to be an original copy of this Agreement and all of which taken together shall constitute one and the same agreement. + +[Remainder of page intentionally left blank] 14 + + + + + +IN WITNESS WHEREOF, the Parties have duly executed this Agreement as of the date first written above. ARMSTRONG FLOORING, INC. + +By: /s/ Donald R. Maier Name: Donald R. Maier Title: President and Chief Executive Officer + +AFI LICENSING LLC + +By: /s/ Christina Geerlof Name: Christina Geerlof Title: President + +AHF HOLDING, INC. (formerly known as Tarzan Holdco, Inc.) + +By: /s/ Stanley Edme Name: Stanley Edme Title: Vice President + +ARMSTRONG HARDWOOD FLOORING COMPANY + +By: /s/ Jason Braeglemann Name: Jason Braegelmann Title: Vice President [Signature Page to IP Agreement] + + + + + +Schedule 1.1(b) - Arizona Assigned Internet Domain Names Domain Name Expiration date Owner amish-handscraped.com 13-Apr-2019 Armstrong Flooring, Inc. ("AFI") amishhandscraped.com 13-Apr-2019 AFI bruce.adult 28-Apr-2019 AFI bruce.biz 26-Mar-2019 AFI bruce.com 21-Jan-2019 AFI bruce.dpml.pub 29-Oct-2019 AFI bruce.dpmlblock 29-Oct-2019 AFI bruce.info 10-Aug-2019 AFI bruce.porn 28-Apr-2019 AFI bruce.xxx 01-Dec-2021 AFI brucebuilder.com 02-Mar-2019 AFI brucecontractor.com 02-Mar-2019 AFI brucedealer.com 02-Mar-2019 AFI brucedistributor.com 02-Mar-2019 AFI brucefloors.com 04-Aug-2019 AFI brucehardwoodfloors.com 11-Apr-2019 AFI brucehome.com 02-Mar-2019 AFI brucelaminate.com 30-Dec-2018 AFI bruceremodeler.com 02-Mar-2019 AFI bruceretailer.com 02-Mar-2019 AFI brucesucks.com 25-Oct-2018 AFI brucesucks.info 22-Sep-2019 AFI capellaflooringcompany.com 12-Nov-2018 AFI capellafloors.com 27-Oct-2018 AFI forestglenhardwood.com 13-Sep-2019 AFI handscraped-hardwood.com 13-Apr-2019 AFI handscrapedhardwoodflooring.com 13-Sep-2019 AFI handscrapedwoodfloor.com 05-Sep-2019 AFI handscrapehardwoodfloor.com 05-Sep-2019 AFI handscrapehardwoodflooring.com 05-Sep-2019 AFI handscrapehardwoodfloors.com 05-Sep-2019 AFI handscrapewoodfloor.com 05-Sep-2019 AFI handscrapewoodflooring.com 05-Sep-2019 AFI handscrapewoodfloors.com 05-Sep-2019 AFI hardwood-flooring.asia 26-Mar-2019 AFI hartco.biz 18-Nov-2018 AFI hartco.info 10-Aug-2019 AFI hartcodistributor.com 02-Mar-2019 AFI hartcoflooring.com 24-May-2019 AFI + + + + + +Domain Name Expiration date Owner hartcoflooringcompany.com 18-Jun-2019 AFI hartcohome.com 02-Mar-2019 AFI homerwood.com 14-Sep-2019 AFI lifetimeluxuryhardwood.com 14-Jun-2019 AFI lockandfold.com 20-Nov-2018 AFI luxuryhardwood.com 20-Dec-2018 AFI mybruce.com 25-Jul-2019 AFI mybruce.net 25-Jul-2019 AFI myhartco.com 25-Jul-2019 AFI myhartco.net 25-Jul-2019 AFI myrobbins.com 25-Jul-2019 AFI myrobbins.net 25-Jul-2019 AFI powerofparagon.com 15-Jun-2019 AFI premium-hardwood.com 13-Apr-2019 AFI robbins-home.com 02-Mar-2019 AFI robbins.biz 26-Mar-2019 AFI robbins.com 13-Sep-2019 AFI robbins.info 10-Aug-2019 AFI robbinsflooring.com 21-Nov-2018 AFI robbinsflooring.info 22-Sep-2019 AFI robbinsfloors.com 14-Sep-2019 AFI robbinsfloors.net 17-Apr-2019 AFI robbinshardwoodflooring.com 26-Sep-2019 AFI robbinshighperformance.com 18-Oct-2018 AFI smokedhardwood.com 30-Apr-2019 AFI smokedhardwoodfloor.com 30-Apr-2019 AFI smokedhardwoodflooring.com 30-Apr-2019 AFI smokedhardwoodfloors.com 30-Apr-2019 AFI softscrapedhardwoodfloor.com 05-Sep-2019 AFI softscrapedhardwoodflooring.com 05-Sep-2019 AFI softscrapedhardwoodfloors.com 05-Sep-2019 AFI softscrapedwoodfloor.com 05-Sep-2019 AFI softscrapedwoodflooring.com 05-Sep-2019 AFI softscrapedwoodfloors.com 05-Sep-2019 AFI softscrapehardwoodfloor.com 05-Sep-2019 AFI softscrapehardwoodflooring.com 05-Sep-2019 AFI softscrapehardwoodfloors.com 05-Sep-2019 AFI softscrapewoodfloor.com 05-Sep-2019 AFI softscrapewoodflooring.com 05-Sep-2019 AFI softscrapewoodfloors.com 05-Sep-2019 AFI + + + + + +Domain Name Expiration date Owner tmortan.com 07-Sep-2019 AFI tmorten.com 07-Sep-2019 AFI tmortin.com 07-Sep-2019 AFI tmorton-flooring.com 17-Mar-2019 AFI tmorton-floors.com 17-Mar-2019 AFI tmorton-hardwood-flooring.com 17-Mar-2019 AFI tmorton-hardwood-floors.com 17-Mar-2019 AFI tmorton-hardwood.com 17-Mar-2019 AFI tmorton-wood-flooring.com 17-Mar-2019 AFI tmorton-wood-floors.com 17-Mar-2019 AFI tmorton.asia 20-Mar-2019 AFI tmorton.com 17-Mar-2019 AFI tmorton.org 17-Mar-2019 AFI tmortonandco.com 17-Mar-2019 AFI tmortonco.com 17-Mar-2019 AFI wwwbruce.com 01-Mar-2019 AFI wwwhartco.com 17-Jan-2019 AFI wwwrobbins.com 17-Jan-2019 AFI + + + + + +Schedule 1.1(e) - Arizona Assigned Patents + +Country App. Status App. Number Filing Date Patent Number Issue Date US Granted 10/459,977 12-Jun-03 7381474 3-Jun-08 AU Granted 2004304906 22-Nov-04 2004304906 28-Oct-10 CN Granted 200480039516 22-Nov-04 ZL200480039516.1 2-Jan-13 DE Granted 6020040309575 22-Nov-04 1944158 11-Feb-17 EP Granted 8007063.4 22-Nov-04 1944158 5-Jan-11 FR Granted 8007063.4 22-Nov-04 1944158 5-Jan-11 GB Granted 8007063.4 22-Nov-04 1944158 5-Jan-11 US Granted 10/727,749 4-Dec-03 7,261,947 28-Aug-07 US Granted 11/901,361 17-Sep-07 8,287,971 16-Oct-12 US Granted 13/611,028 12-Sep-12 8,399,075 19-Mar-13 US Granted 12/825,448 29-Jun-10 8801505 12-Aug-14 US Granted 14/458,103 12-Aug-14 10,072,427 11-Sep-18 AU Granted 2014240948 28-Mar-14 2014240948 20-Oct-16 EP Published 14722915.7 28-Mar-14 AU Granted 2013246000 10-Apr-13 2013246000 26-Nov-15 CA Granted 2,869,667 10-Apr-13 2869667 19-Dec-17 CN Granted 201380018751 10-Apr-13 2512525 9-Jun-17 EP Published 13718698.7 10-Apr-13 US Granted 13/442,960 10-Apr-13 9434087 6-Sep-16 AU Granted 2013246002 10-Apr-13 2013246002 17-Dec-15 CA Granted 2,869,752 10-Apr-13 2869752 3-Jan-17 CN Granted 201380018754 10-Apr-13 104245258 3-May-17 US Granted 13/442,966 10-Apr-12 9,108,335 18-Aug-15 CN Granted 201410046641 10-Feb-14 103978829 12-Apr-17 EP Granted 14154551.7 10-Feb-14 EP2764965 21-Sep-16 US Granted 14/176,299 10-Feb-14 9701040 11-Jul-17 AU Granted 2014240951 28-Mar-14 2014240951 30-Jun-16 AU Granted 2013270463 10-Dec-13 2013270463 26-Nov-15 CN Granted 201310674310 11-Dec-13 103866947 4-Jan-17 AU Granted 2014274549 10-Dec-14 2014274549 15-Oct-15 CA Granted 2,873,571 8-Dec-14 2873571 27-Mar-18 CN Published 201407560485 10-Dec-14 AU Pending 2016287834 5-Jul-16 CN Published 2016800338922 5-Jul-16 + + + + + +Country App. Status App. Number Filing Date Patent Number Issue Date EP Published 16818951.2 5-Jul-16 TW Published 20160120286 28-Jun-16 WO Published PCT/US16/40942 5-Jul-16 CN Published 201510954585 17-Dec-15 EP Published 15201544.2 21-Dec-15 US Published 14/970,662 16-Dec-15 AU Pending 2016380976 20-Dec-16 CN Published 20168078711 20-Dec-16 EP Pending 16882368 20-Dec-16 US Published 14/980,263 28-Dec-15 WO Published PCT/US2016/067690 20-Dec-16 AU Pending 2016380975 20-Dec-16 CN Published 201680078712 20-Dec-16 EP Pending 16882368 20-Dec-16 US Published 14/980,313 28-Dec-15 WO Published PCT/US2016/067688 20-Dec-16 WO Published PCT/US2017/055068 5-Oct-17 US Published 15902327 22-Feb-18 WO Published PCT/US18/19186 22-Feb-18 US Granted 09/478,016 5-Jan-00 6164351 26-Dec-00 US Granted 11/390,679 28-Mar-06 7537841 26-May-09 US Granted 09/175,661 20-Oct-98 6148884 21-Nov-00 US Granted 09/303,176 30-Apr-99 6156402 5-Dec-00 US Granted 09/241,878 2-Feb-99 6194078 27-Feb-01 US Pending 62/611953 29-Dec-17 US Expired 62/404,413 5-Oct-16 US Expired 62/462,609 23/Feb-17 US Abandoned 09/903,549 13-Jul-01 US Abandoned 14/828,598 18-Aug-15 US Expired 62/187,925 2-Jul-15 US Granted 12/425,560 17-Apr-09 8,357,752 22-Jan-13 US Granted 13/741,770 15-Jan-13 8,617,654 31-Dec-13 AU Granted 2014274559 10-Dec-14 2014274559 24-Mar-16 EP Published 14199378.2 19-Dec-14 CN Published 2015109813242 23-Dec-15 EP Published 15202406.3 23-Dec-15 US Granted 14/580,347 23-Dec-14 9,567,755 14-Feb-17 + + + + + +Country App. Status App. Number Filing Date Patent Number Issue Date US Pending 15/724,391 5-Oct-17 + + + + + +Schedule 1.1(f) - Arizona Assigned Trademarks + +Country Trademark Status App. Number App. Date Reg. Number Reg. Date US AMERICAN SCRAPE Registered 85616030 3-May-12 4481771 11-Feb-14 + +CA ARTISAN COLLECTIVE Pending 1817435 10-Jan-17 + +US ARTISAN COLLECTIVE CLTM + +CA ARTISTIC TIMBERS Registered 1670991 2-Apr-14 TMA967273 31-Mar-17 + +US ARTISTIC TIMBERS CLTM + +US BIRCH RUN Registered 85/931,142 14-May-13 4,524,637 6-May-14 + +CA BIRCH RUN Registered 1,636,822 25-Jul-13 TMA905398 4-Jun-15 + +US BRISTOL TRAIL Registered 86919986 25-Feb-16 5423957 13-Mar-18 + +CA BRISTOL TRAIL Published 1769733 26-Feb-16 + + + + + +Country Trademark Status App. Number App. Date Reg. Number Reg. Date US BRUSHED IMPRESSIONS Registered 86906683 12-Feb-16 5183009 11-Apr-17 + +CA BRUSHED IMPRESSIONS Published 1768050 16-Feb-16 + +CA CAPELLA Published 1789784 4-Jul-16 + +US DUNDEE Registered 86274578 7-May-14 4649247 2-Dec-14 + +US EVERGUARD Registered 86084365 7-Oct-13 4654066 9-Dec-14 + +US FARMINGTON Registered 86920079 25-Feb-16 5423958 13-Mar-18 + +CA FARMINGTON Published 1769729 26-Feb-16 + +US FOREST GLEN Registered 86084354 7-Oct-13 4633917 4-Nov-14 + +CA FOREST GLEN Registered 1769732 26-Feb-16 961263 27-Jan-17 + + + + + +Country Trademark Status App. Number App. Date Reg. Number Reg. Date CA FORGED HERITAGE Published 1,752,076 26-Oct-15 + +CA Hydropel Pending 1917541 30-Aug-18 + +US Hydropel Pending 88148020 9-Oct-18 + +US LOCK&FOLD Registered 76656450 13-Mar-06 3200208 23-Jan-07 + +US MIDTOWN Registered 85736605 24-Sep-12 4401628 10-Sep-13 + +US MILLWORK SQUARE Registered 86906649 12-Feb-16 5183008 11-Apr-17 + +CA MILLWORK SQUARE Published 1768051 16-Feb-16 + +CA ORIGINAL RUSTICS Published 1791791 18-Jul-16 + +US ORIGINAL RUSTICS CLTM + + + + + +Country Trademark Status App. Number App. Date Reg. Number Reg. Date US PARAGON CLTM + +CA PARAGON CLTM + +US PRIME HARVEST Registered 86/285,289 19-May-14 4,742,207 26-May-15 + +CA PRIME HARVEST Registered 1,677,599 20-May-14 TMA906580 17-Jun-15 + +US RIGHT EVERY TIME Published 87261852 8-Dec-16 + +US RUSTIC RESTORATIONS Published 87215879 26-Oct-16 5520272 17-Jul-18 + +CA RUSTIC RESTORATIONS Pending 1806462 26-Oct-16 + +US SDF Pending '87947440 4-Jun-18 + +CA SDF Pending 1902212 1-Jun-18 + + + + + +Country Trademark Status App. Number App. Date Reg. Number Reg. Date US SIGNATURE SCRAPE Registered 86920111 25-Feb-16 5187924 18-Apr-17 + +CA SIGNATURE SCRAPE Published 1769731 26-Feb-16 + +CA SIGNATURE SOFT SCRAPE Published 1769730 26-Feb-16 + +US TimberBlock Published 87839322 19-Mar-18 + +CA TimberBlock Pending 1889001 20-Mar-18 + +US TIMBERBRUSHED Registered 87105110 15-Jul-16 5267454 15-Aug-17 + +US TIMBERCUTS Registered 87295586 10-Jan-17 5371502 2-Jan-18 + +CA TIMBERCUTS Pending 1817434 10-Jan-17 + +US TIMBERLAND Registered 76496979 13-Mar-03 2923877 1-Feb-05 + + + + + +Country Trademark Status App. Number App. Date Reg. Number Reg. Date CA TRANQUIL WOODS Published 1790828 11-Jul-16 + +US TRANQUIL WOODS CLTM + +US TruTop Published 87870541 10-Apr-18 + +CA TruTop Pending 1892873 10-Apr-18 + +CA VINTAGE FARMHOUSE Published 1790827 11-Jul-16 + +US WEAR MASTER Registered 74/329383 9-Nov-92 1834641 3-May-94 + +CN WEAR MASTER Registered 4819937 5-Aug-05 4819937 + +CA OPAL CREEK Registered 1738695 23-Jul-15 1002365 08-Aug-18 + +US OPAL CREEK Registered CLTM + + + + + +Schedule 1.1(g) - Arizona Domain Names + +Domain Name Expiration date Owner armstrongwoodproducts.com 19-Dec- 2018 AFI + + + + + +Schedule 1.1(l) - Arizona Licensed Patents COUNTRY APP NO. FILING DATE PATENT NUMBER ISSUE DATE AU 2009241803 30-Apr-09 2009241803 26-Sep-13 AU 2013231111 19-Sep-13 2013231111 7-Jan-16 CN 200980120494 30-Apr-09 DE 60 2009 024 610.0 30-Apr-09 2 286 018 EP 9739191.6 30-Apr-09 2286018 11-Jun-14 EP 13192693.3 30-Apr-09 2703461 31-Aug-16 FR 9739191.6 30-Apr-09 2 286 018 11-Jun-14 GB 9739191.6 30-Apr-09 2 286 018 11-Jun-14 US 12/432,845 30-Apr-09 8,420,710 16-Apr-13 US 14/700,669 30-Apr-15 BE 10770074.2 29-Nov-11 2 424 911 23-Mar-16 DE DE 60 2010 031 448.0 29-Nov-11 2 424 911 23-Mar-16 EP 10770074.2 29-Nov-11 2 424 911 23-Mar-16 FR 10770074.2 29-Nov-11 2 424 911 23-Mar-16 GB 10770074.2 29-Nov-11 2 424 911 23-Mar-16 NL 10770074.2 29-Nov-11 2 424 911 23-Mar-16 US 12/799,700 30-Apr-10 US 14/140,206 24-Dec-13 AU 2012286867 26-Jul-12 2012286867 4-Feb-16 CN 2012800367594 26-Jul-12 2094039 1-Jun-16 DE 12751639.1 26-Jul-12 EP2736977 20-May-15 EP 12751639.1 26-Jul-12 EP2736977 20-May-15 GB 12751639.1 26-Jul-12 EP2736977 20-May-15 AU 2013222106 25-Feb-13 2013222106 25-Feb-13 EP 13707792.1 25-Feb-13 US 14/380,432 22-Aug-14 9540825 10-Jan-17 AU 2013308554 30-Aug-13 2013308554 28-Apr-16 CN 201380046030 4-Mar-15 2789549 23-Jan-18 EP 13770989.5 30-Mar-15 EP2890749 16-May-18 US 14/423,186 23-Feb-15 AU 2014207438 8-Jul-15 2014207438 9-Feb-17 EP 14702412.9 14-Aug-15 US 14/760,080 9-Jul-15 AU 2014207441 8-Jul-15 2014207441 10-Nov-16 CN 2014800055962 15-Jul-15 2581656 11-Aug-17 EP 14703007.6 14-Aug-15 + + + + + +COUNTRY APP NO. FILING DATE PATENT NUMBER ISSUE DATE US 14/760,060 9-Jul-15 AU 2015227440 16-Sep-15 2015227440 30-Mar-17 CN 2015105859497 23-Dec-14 3045520 24-Aug-18 EP 15198373.1 8-Dec-15 US 14/580,312 23-Dec-14 9650792 16-May-17 EP 1151281 12-Jul-00 1072659 13-Oct-04 US 10/062,616 31-Jan-02 6572932 3-Jun-03 US 10/060,487 30-Jan-02 6911263 28-Jun-05 AU 2016243556 6-Nov-17 CN 2016800223098 16-Oct-17 EP 16719581.7 14-Nov-17 TW 105110285 31-Mar-16 624366 21-May-18 US 14/678,163 3-Apr-15 WO PCT/US16/24457 28-Mar-16 AU 2016243132 6-Nov-17 CN 2016800229978 20-Oct-17 EP 16718052 14-Nov-17 US 15564161 3-Oct-17 WO PCT/US16/24462 28-Mar-16 US 62/142,611 3-Apr-15 AU 2016243552 6-Nov-17 CN 2016800226325 18-Oct-17 EP 16719580.9 14-Nov-17 US 14/678,183 3-Apr-15 WO PCT/US16/24451 28-Mar-16 AU 2016357732 18-Apr-18 CN 2016800648806 7-May-18 EP 16866982.8 14-Jun-18 US 15776637 16-May-18 WO PCT/US2016/062133 16-Nov-16 WO PCT/US2017/055060 5-Oct-17 WO PCT/US2017/055047 4-Oct-17 WO PCT/US2017/055077 4-Oct-17 WO PCT/US2017/055089 5-Oct-17 WO PCT/US2017/055044 5-Oct-17 WO PCT/US2017/055033 4-Oct-17 US 14/721,724 26-May-15 9468314 18-Oct-16 + + + + + +Schedule 1.1(m) - Arizona Licensed Trademarks + +ARMSTRONG + + + + + +Schedule 1.1(s) - Company Licensed Patents + +Country App. Status App. Number Filing Date Patent Number Issue Date US Granted 12/425,560 17-Apr-09 8,357,752 22-Jan-13 US Granted 13/741,770 15-Jan-13 8,617,654 31-Dec-13 CN Published 2015109813242 23-Dec-15 EP Published 15202406.3 23-Dec-15 US Granted 14/580,347 23-Dec-14 9,567,755 14-Feb-17 US Pending 15/724,391 5-Oct-17 + + + + + +Schedule 1.1(u) - Diamond Licensed Trademarks + +DIAMOND 10 + + + + + +Schedule 6.1 - Presentation of Arizona Licensed Trademarks + +Armstrong Logo Usage: 1. Logo Colors: The Armstrong logo can appear only in black, white or 100% Tungsten. If reversed out white, it should be on a dark background color. The entire mark must be the same color. The Armstrong logo cannot be used alone. + +2. Logo Size: The minimum logo size is 1" or 25mm. In digital formats, the minimum width is 100 pixels at 72 dpi. + + + + + +3. Clear Space: If the business unit identifier is used below the logo, the clear space is 1∕2 the diameter of the Armstrong ring on the top, right side and left side and the width of the stem in in the lower case "r" on the bottom. + +If the business unit identifier is used above the logo, the clear space is 1∕2 the diameter of the Armstrong ring on the right side, left side and bottom and the width of the stem of the lower case "r" on the top. + +a. There is no clear space defined below the business unit identifier if used below the logo and no clear space defined above the business unit identifier if used above the logo. b. If the business unit identifier is two lines, the clear space definition applies to the top most line, if used above, or bottom most line, if used below the Armstrong logo. 4. Font: The Armstrong logo is considered art and the font type, spacing, bold, cannot be modified. + + 5. Logo Background: The logo should never be used on a busy background or one that does not provide enough contrast. + + + + + +6. Logo Direction: The logo can be used on an angle or vertically but must read left to right and top to bottom + +7. Circle A: The Circle A can never be used as a separate graphic element. + +Notice: 1. The trademark should always be distinguishable from surrounding text - at a minimum, the trademark notice (TM or ®) should be used at least the first time in the text. After first instance, mark should appear with some other distinguishing feature (e.g., different font, all caps, and/or different color) from the surrounding text. 2. Must include notice of AWI Licensing LLC's ownership of the trademark within the credit notice of the product, product documentation, or other product communication. (E.g., Armstrong and the Armstrong Logo are registered trademarks of AWI Licensing LLC. + + + + + +Schedule 6.2 - Presentation of Diamond Licensed Trademarks + +Diamond 10® Technology trademark and logo usage: 1. When using Diamond 10® Technology in sentences to identify goods or services: a. Always mark with ® (required for first usage on page) b. Always add a space between Diamond and 10. c. Always keep the entire mark together. 2. Use of Diamond 10® or the Diamond 10® logo must include notice of AFI Licensing LLC's ownership of the trademark within the credit notice of the product, product documentation, or other product communication. (E.g., Diamond 10 and the Diamond 10 Technology logo are registered trademarks of AFI Licensing LLC.) 3. Logo Colors: Can appear only in White or 4 Color Process comprised of Morado, Tungsten and Black. If reversed out White, use only on dark background color for contrast. + +COLORS + + + + + +4. Logo Size: A general guideline for the maximum width of the logo in any application should be the equivalent to 20% of the width of the shortest side. Exceptions may be made for signage and promotional materials. The minimum logo size is 1" or 25mm. In digital formats, the minimum width is 100 pixels at 72 dpi. + + + + + +5. Clear Space: The size of the clear space around the logo is determined by the size of the circle of the capital height of the word diamond. + +6. Font: The Diamond 10 Technology logo is considered art and the font type, spacing, bold, cannot be modified. + +7. Logo Background: The logo should never be used on a busy background or one that does not provide enough contrast. + + + + + +Exhibit A - Trademark License Agreement + +Attached. + + + + + +Exhibit B - Form of Patent Assignment + +FORM OF PATENT ASSIGNMENT + +This PATENT ASSIGNMENT (the "Assignment"), dated as of December 31, 2018 (the "Effective Date"), is by and between Armstrong Flooring, Inc., a Delaware corporation ("Seller") and AFI Licensing LLC, a Delaware limited liability company ("Licensing" and together with Seller, "Assignor") and Armstrong Hardwood Flooring Company, a Tennessee corporation (the "Company" or "Assignee") (each of Assignor and Assignee, a "Party" and collectively, the "Parties"). All capitalized terms used, but not defined herein, shall have the meanings ascribed to such terms in the Intellectual Property Agreement (defined herein below). + +WHEREAS, Seller and AHF Holding, Inc. (formerly known as Tarzan Holdco, Inc.), a Delaware corporation ("Buyer") have entered into that certain Stock Purchase Agreement, dated November 14, 2018 (the "SPA") and Seller, Buyer and the Company have entered into that certain Intellectual Property Agreement, dated December 31, 2018 (the "Intellectual Property Agreement"); + +WHEREAS, pursuant to the SPA, the Seller has agreed to sell and transfer, and the Buyer has agreed to purchase and acquire, all of Seller's right, title and interest in and to Armstrong Wood Products, Inc. and the Company Subsidiaries (including the Company) by way of a purchase by Buyer and sale by Seller of the Shares, all upon the terms and condition set forth therein; and + +WHEREAS, pursuant to the Intellectual Property Agreement, Assignor has agreed to sell, convey, assign, and transfer to Assignee all of Assignor's right, title, and interest in and to the patent applications and registrations set forth on Schedule A hereto (collectively, the "Assigned Patents"). + +NOW, THEREFORE, in consideration of the foregoing recitals, the mutual covenants and conditions contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereto agree as follows: + +1. Conveyance. Assignor does hereby irrevocably sell, convey, grant, set over, assign and transfer to Assignee, without reservation of any rights, title or interest, all of Assignor's right, title and interest in and to the Assigned Patents, all rights corresponding to the Assigned Patents throughout the world, and all continuations, continuations-in-part, divisions or renewals thereof, all patents that may be granted therefrom, all reissues, re-exams, or extensions of such patents, and in and to any applications that have been or shall be filed in any country, and all patents or utility models of countries that may be granted therefrom, for its own use and enjoyment, and for the use and enjoyment of any of Assignee's successors and assigns, as the + + + + + +same would have been held and enjoyed by Assignor if this Assignment had not been made, together with any and all claims or causes of infringement thereof that may have accrued prior to the effective date of this Assignment, together with the right to bring suit for and/or initiate any proceeding to collect any and all damages arising from said claims or causes of action. Assignee hereby accepts such assignment, transfer and conveyance. + +2. Recordation. Assignor hereby authorizes and requests the Commissioner of Patents and Trademarks and any other applicable governmental entity or registrar (including any applicable foreign or international office or registrar), to record Assignee as the owner of the Assigned Patents, and to issue any and all Assigned Patents to Assignee, as assignee of Assignor's entire right, title and interest in, to, and under the same. Assignee shall have the right to record this Assignment with all applicable governmental authorities and registrars so as to perfect its ownership of the Assigned Patents. + +3. Further Assistance. Upon Assignee's reasonable request and at Assignee's sole cost and expense, Assignor shall (i) provide any further assistance reasonably necessary to effect the assignment of all rights, title and interest in and to the Assigned Patents to Assignee, including, but not limited to, the execution of any further documents and instruments, and (ii) take such other actions as are reasonably necessary to document the aforesaid assignment and transfer to Assignee. + +4. No Modification. Nothing contained in this Assignment is intended to or shall be deemed to modify, alter, amend or otherwise change any of the rights or obligations of Assignor and Assignee and their respective Affiliates under the SPA or the Intellectual Property Agreement. + +5. Successors and Assigns. This Assignment shall inure to the benefit of and be binding upon the Parties hereto and their respective successors and permitted assigns. + +6. Counterparts. This Assignment may be executed in any number of counterparts, including by means of email in portable document format (.pdf), each of which when executed shall be deemed to be an original copy of this Assignment and all of which taken together shall constitute one and the same agreement. + +7. Descriptive Headings. The descriptive headings herein are inserted for convenience of reference only and are not intended to be part of or to affect the meaning or interpretation of this Assignment. + +8. Governing Law. This Assignment shall be governed by the laws of the State of Delaware, its rules of conflict of laws notwithstanding. Each Party hereby agrees and consents to be subject to the jurisdiction of the Court of Chancery of the State of Delaware in and for New Castle County, or if the Court of Chancery lacks jurisdiction over such dispute, in any + + + + + +state or federal court having jurisdiction over the matter situated in New Castle County, Delaware, in any Action seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Assignment or the transactions contemplated hereby. + +9. Severability. If any term or other provision of this Assignment, or any portion thereof, is invalid, illegal or incapable of being enforced by any rule of law or public policy, all other terms and provisions of this Assignment, or the remaining portion thereof, shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any Party. Upon such determination that any such term or other provision, or any portion thereof, is invalid, illegal or incapable of being enforced, the Parties hereto shall negotiate in good faith to modify this Assignment so as to effect the original intent of the Parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are consummated to the fullest extent possible. + +10. Authority. Each Party hereby represents that its undersigned representative is authorized and legally competent to execute this Assignment as a binding and enforceable agreement. + +[Signature Page Follows] + + + + + +IN WITNESS WHEREOF, the Parties have caused this Assignment to be executed as of the date above first written by their duly authorized representatives. SELLER: + +By: Name: Title: + +LICENSING + +By: Name: Title: + +Acknowledged and Accepted: + +ASSIGNEE: + +By: Name: Title: + + + + + +SCHEDULE A TO PATENT ASSIGNMENT + + + + + +Exhibit C - Form of Trademark Assignment + +FORM OF TRADEMARK ASSIGNMENT + +This TRADEMARK ASSIGNMENT (the "Assignment"), dated as of December 31, 2018 (the "Effective Date"), is by and between Armstrong Flooring, Inc., a Delaware corporation ("Seller") and AFI Licensing LLC, a Delaware limited liability company ("Licensing" and together with Seller, "Assignor") and Armstrong Hardwood Flooring Company, a Tennessee corporation (the "Company" or "Assignee") (each of Assignor and Assignee, a "Party" and collectively, the "Parties"). All capitalized terms used, but not defined herein, shall have the meanings ascribed to such terms in the Intellectual Property Agreement (defined herein below). + +WHEREAS, Seller and AHF Holding, Inc. (formerly known as Tarzan Holdco, Inc.), a Delaware corporation ("Buyer") have entered into that certain Stock Purchase Agreement, dated November 14, 2018 (the "SPA") and Seller, Buyer and the Company have entered into that certain Intellectual Property Agreement, dated December 31, 2018 (the "Intellectual Property Agreement"); + +WHEREAS, pursuant to the SPA, the Seller has agreed to sell and transfer, and the Buyer has agreed to purchase and acquire, all of Seller's right, title and interest in and to the Company and the Company Subsidiaries (including the Company) by way of a purchase by Buyer and sale by Seller of the Shares, all upon the terms and condition set forth therein; and + +WHEREAS, pursuant to the Intellectual Property Agreement, Assignor has agreed to sell, convey, assign, and transfer to Assignee all of Assignor's right, title, and interest in and to the trademarks applications and registrations set forth on Schedule A hereto (collectively, the "Assigned Marks"). + +NOW, THEREFORE, in consideration of the foregoing recitals, the mutual covenants and conditions contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereto agree as follows: + +11. Conveyance. Assignor does hereby irrevocably sell, convey, grant, set over, assign and transfer to Assignee, without reservation of any rights, title or interest, all of Assignor's worldwide and universal rights, title and interest in and to the Assigned Marks, including, but not limited to, the applications and registrations therefor which are identified in Schedule A attached hereto, together with the goodwill of the business symbolized by such Assigned Marks, the same to be held and enjoyed by Assignee, for its own use and enjoyment, and for the use and enjoyment of any of Assignee's successors and assigns, as the same would have been held and enjoyed by Assignor if this Assignment had not been made, including, but not limited to, all common-law rights of Assignor in and/or to the Assigned Marks, and + + + + + +Assignor's right to sue for all claims, demands and/or causes of action, both at law and in equity, that Assignor may have on account of any infringement, claim of unfair competitions, likelihood of confusion or dilution of the Assigned Marks or any other claim or cause of action related to the Assigned Marks prior to and following the effective date of this Assignment. Assignor further assigns to Assignee the right to sue and recover damages and/or profits for claims of past, present and/or future infringement, unfair competition, dilution, or any other violation or unlawful act relating to the Assigned Marks, if any. Assignee hereby accepts such grant, assignment, transfer and conveyance. + +12. Recordation. Assignor hereby authorizes and requests the Commissioner of Patents and Trademarks and any other applicable governmental entity or registrar (including any applicable foreign or international office or registrar), to record Assignee as the owner of the Assigned Marks, and to issue any and all Assigned Marks to Assignee, as assignee of Assignor's entire right, title and interest in, to, and under the same. Assignee shall have the right to record this Assignment with all applicable governmental authorities and registrars so as to perfect its ownership of the Assigned Marks. + +13. Further Assistance. Upon Assignee's reasonable request and at Assignee's sole cost and expense, Assignor shall (i) provide any further assistance reasonably necessary to effect the assignment of all rights, title and interest in and to the Assigned Marks to Assignee, including, but not limited to, the execution of any further documents and instruments, and (ii) take such other actions as are reasonably necessary to document the aforesaid assignment and transfer to Assignee. + +14. No Modification. Nothing contained in this Assignment is intended to or shall be deemed to modify, alter, amend or otherwise change any of the rights or obligations of Assignor and Assignee and their respective Affiliates under the SPA or the Intellectual Property Agreement. + +15. Successors and Assigns. This Assignment shall inure to the benefit of and be binding upon the Parties hereto and their respective successors and permitted assigns. + +16. Counterparts. This Assignment may be executed in any number of counterparts, including by means of email in portable document format (.pdf), each of which when executed shall be deemed to be an original copy of this Assignment and all of which taken together shall constitute one and the same agreement. + +17. Descriptive Headings. The descriptive headings herein are inserted for convenience of reference only and are not intended to be part of or to affect the meaning or interpretation of this Assignment. + + + + + +18. Governing Law. This Assignment shall be governed by the laws of the State of Delaware, its rules of conflict of laws notwithstanding. Each Party hereby agrees and consents to be subject to the jurisdiction of the Court of Chancery of the State of Delaware in and for New Castle County, or if the Court of Chancery lacks jurisdiction over such dispute, in any state or federal court having jurisdiction over the matter situated in New Castle County, Delaware, in any Action seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Assignment or the transactions contemplated hereby. + +19. Authority. Each Party hereby represents that its undersigned representative is authorized and legally competent to execute this Assignment as a binding and enforceable agreement. + +20. Severability. If any term or other provision of this Assignment, or any portion thereof, is invalid, illegal or incapable of being enforced by any rule of law or public policy, all other terms and provisions of this Assignment, or the remaining portion thereof, shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any Party. Upon such determination that any such term or other provision, or any portion thereof, is invalid, illegal or incapable of being enforced, the Parties hereto shall negotiate in good faith to modify this Assignment so as to effect the original intent of the Parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are consummated to the fullest extent possible. + +[Signature Page Follows] + + + + + +IN WITNESS WHEREOF, the Parties have caused this Assignment to be executed as of the date above first written by their duly authorized representatives. SELLER: + +By: Name: Title: + +LICENSING: + +By: Name: Title: + +Acknowledged and Accepted: + +ASSIGNEE: + +By: Name: Title: + + + + + +SCHEDULE A TO TRADEMARK ASSIGNMENT \ No newline at end of file diff --git a/full_contract_txt/ASHWORTHINC_01_29_1999-EX-10.(D)-PROMOTION AGREEMENT AND NANTZ COMMUNICATIONS, INC..txt b/full_contract_txt/ASHWORTHINC_01_29_1999-EX-10.(D)-PROMOTION AGREEMENT AND NANTZ COMMUNICATIONS, INC..txt new file mode 100644 index 0000000000000000000000000000000000000000..dcf3d12fdfeb78ce5d234c510d08492661727d75 --- /dev/null +++ b/full_contract_txt/ASHWORTHINC_01_29_1999-EX-10.(D)-PROMOTION AGREEMENT AND NANTZ COMMUNICATIONS, INC..txt @@ -0,0 +1,203 @@ +EXHIBIT 10(d) + +PROMOTION AGREEMENT ASHWORTH, INC., JAMES W. NANTZ III AND NANTZ COMMUNICATIONS, INC. THIS AGREEMENT is entered into by and among ASHWORTH, INC. (The "Company" or "Ashworth"), JAMES W. NANTZ III ("Nantz") and NANTZ COMMUNICATIONS, INC. ("Nantz Communications"), effective as of June 1, 1998. + +WHEREAS, the Company desires to retain Nantz Communications and Nantz to provide certain promotional and other services and Nantz Communications and Nantz are willing to provide such services on the terms and conditions set forth herein; and + +WHEREAS, the parties hereto desire to set forth in writing their agreement as to such promotion arrangement; + +NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows: + +DEFINITIONS + +As used herein, the terms set forth below shall be defined as follows: + +ENDORSEMENT shall include only the right to use the name, any nickname, initials, autograph, facsimile signature, photograph, portrait, likeness, and/or endorsement of Nantz. + +ASHWORTH APPAREL shall mean all ASHWORTH(R) brand sportswear apparel contained in the Company's present and future collections (during the Term (as defined below)). + +ASHWORTH PRODUCTS shall mean, collectively, Ashworth Apparel and Ashworth hats and shoes. + +DISABILITY shall mean mental or physical illness or condition rendering Nantz incapable of fulfilling the services to be provided by him under this Agreement for a continuous period of at least 60 days. + +PREMIUM PROGRAM shall mean any traffic builder or other program involving the use of a premium to sell products or services other than Ashworth products and shall include any program primarily designed to attract the consumer to purchase a product or service other than Ashworth Products themselves. + +CONTRACT YEAR shall mean a period of twelve (12) successive months commencing on any first day of June during the Term. + +Ashworth/Nantz Promotion Agreement - ------------------- + +TERM OF RELATIONSHIP 1. GRANT AND ACCEPTANCE. The Company hereby retains Nantz Communications and Nantz to provide the below described services (the "Services") and Nantz Communications and Nantz agree to provide the Services upon the terms and conditions herein set forth. + +2. TERM. Except as otherwise provided herein, this Agreement shall commence effective June 1, 1998, and shall continue for a term of three (3) years expiring May 31, 2001 (the "Term"). + +SERVICES + +Nantz Communications and Nantz shall furnish the following Services: + +1. ENDORSEMENT. Subject to the terms and conditions hereof, Nantz Communications grants to the Company the Endorsement throughout the world during the Term in connection with the advertisement, promotion and sale by the Company of Ashworth Products except in connection with Premium Programs. + +2. ASHWORTH APPAREL AND PRODUCTS. Subject to any restrictions, contractual or otherwise, on Nantz Communications or Nantz (collectively, the "Restrictions"), Nantz shall wear Ashworth Products, when possible and as reasonably appropriate, while broadcasting all professional sports tournaments and other professional sports outings, and during any professional sports clinics or instructions given by Nantz Communications or Nantz; provided that the Company has provided Nantz, at no charge, with sufficient amounts of Ashworth Products in styles and sizes Nantz finds suitable and appropriate for his use, subject to the restriction under Paragraph 4 of Section COMPENSATION AND CONSULTING FEES. + +3. LOGOS. Except as otherwise provided herein, and subject to the Restrictions, Nantz Communications agrees that such Products may prominently bear the Company's logo and shall not bear any other logos. + + + + + +4. PHOTOGRAPHY, SPEAKING AND STORE APPEARANCES. Nantz agrees to be available for up to four photography sessions (2 in Southern California during the week and 2 to be at Nantz's site locations or tournaments), two speaking engagements, and three store appearances each Contract Year, at times and places mutually convenient for Nantz and the Company but in no event at times which adversely impact on the schedules of Nantz Communications or Nantz. Nantz Communications shall have the right to review and reject in good faith the use of any advertising, promotion or other programs and materials which include Nantz or his image. No use shall be made of any such programs or materials hereunder unless and until the same has been approved by Nantz + +Ashworth/Nantz Promotion Agreement - ------------------- + +Communications. The Company agrees that each photography session shall not exceed one and one-half days and each speaking engagement and store appearance shall not exceed one-half day. The Company further understands that failure to utilize services of Nantz pursuant to this section shall not result in any reduction in payments to Nantz Communications hereunder, nor may the obligations to provide Services be carried forward from one Contract Year to another Contract year. The obligations of Nantz Communications and Nantz to provide the Services hereunder are subject to the condition that payments to Nantz Communications are current and up to date. + +5. NEW ACCOUNTS, CELEBRITIES. Nantz agrees to assist Ashworth in locating potential new accounts based on his professional contacts, assist Ashworth in gaining access to celebrities and CBS executives which Ashworth could provide clothes for special events and also assist in gaining access to non-golf professionals who potentially would wear Ashworth clothes. + +6. SPECIAL EVENTS. Nantz will assist Ashworth in creating, promoting and participating in an event (i.e., golf tournament, cocktail reception, etc.) ---- to be associated with a major sporting event (i.e., PGA Championship, ---- Masters, etc.). + +7. EMPLOYEE STATUS. Nantz will be a full time Ashworth employee rather than an independent contractor. + +8. BOARD OF DIRECTORS. Nantz agrees to be nominated, elected to and serve on the Board of Directors of Company in the capacity of voting director. + +9. OTHER OBLIGATIONS. The Company acknowledges that Nantz Communications' and Nantz's obligations to CBS or any other television station or network with which Nantz Communications or Nantz has a contract or arrangement shall take precedence over any other commitments of Nantz Communications or Nantz under this Agreement. + +INDEMNIFICATION + +Neither Nantz Communications nor Nantz shall be liable for any obligations of the Company resulting directly or indirectly from the Endorsement of Ashworth Products. The Company shall protect, indemnify and hold harmless each of Nantz Communications and Nantz against any and all expenses, damages, claims, suits, actions, judgments and costs whatsoever, arising out of, or in any way connected with such Endorsement, in any advertising or promotional materials furnished by or on behalf of the Company, actions or omissions of the Company or any claim or action for personal injury, death or other cause of action involving alleged defects in Ashworth Products, including but not limited to indemnification of reasonable legal expenses incurred in defense of all such claims. Further, Nantz Communications or Nantz shall have the + +Ashworth/Nantz Promotion Agreement - ------------------- + +right to select legal counsel to represent it or him in the event of any such claims or legal proceedings, and the costs of such legal representation shall be paid by the Company. + +INSURANCE + +The Company agrees to provide and maintain, at its own expense, advertising and product liability insurance each with limits no less than $5,000,000 and within thirty (30) days from the date hereof, the Company will submit to Nantz Communications a fully paid policy or certificate of insurance naming Nantz Communications and Nantz as insured parties, requiring that the insurer shall not terminate or materially modify such without written notice to Nantz Communications at least twenty (20) days in advance thereof. + +The Company further agrees to provide and maintain, at its own expense, a policy of Directors and Officers Insurance with limits no less than $25,000,000 and within thirty (30) days from the date hereof, the Company will submit to Nantz Communications a fully paid policy or certificate of insurance naming Nantz as an insured party, requiring that the insurer shall not terminate or materially modify such without written notice to Nantz Communications at least twenty (20) days in advance hereof. + + + + + +COMPENSATION AND CONSULTING FEES + +As full compensation for Services, the Company shall pay Nantz Communications the following fees: + +10. CONSULTING FEE. The Company shall pay Nantz Communications an annual consulting fee of $30,000, such fee to be paid in equal quarterly installments of $7,500 on the 1st day of each June, September, December and March of each Contract year. + +11. ADDITIONAL FEES. If Nantz agrees to participate in more than three store appearances in any given Contract Year, the Company shall pay Nantz Communications an additional fee of $7,500 for such additional appearance prior to or simultaneously with such appearances. + +12. REIMBURSEMENT OF EXPENSES. The Company shall reimburse Nantz Communications for expenses reasonably incurred by Nantz or Nantz Communications in connection with the Services to the Company including, but not limited to, first-class air fare, hotel accommodations, local transportation and meals. Nantz Communications shall furnish the Company with an itemized statement from time to time, together with, whenever possible, actual bills, receipts, and other evidence of expenditure. Nantz Communications shall be reimbursed within thirty (30) days after receipt by the Company of such itemized statements and attachments. + +Ashworth/Nantz Promotion Agreement - ------------------- + +As full compensation for Services, the Company shall provide and issue to Nantz the following: + +13. APPAREL. The Company shall furnish Nantz, at no cost, with sufficient Ashworth Products to be used by him in connection with the Services and for the personal use of Nantz and his immediate family. The cost of said Product shall not exceed $12,000 (at wholesale) during any single Contract Year. + +14. STOCK OPTIONS. a) As consideration for the rights granted and the services to be rendered hereunder, the Company hereby grants to Nantz options (the "Options"), to purchase shares of the common stock of the Company par value $.001 per share (the "Share"), which are exercisable as follows: + +15. The first Option to purchase 40,000 Shares upon payment of the aggregate Option Share Price (as defined below) for the number of Shares so purchased shall become exercisable on June 1, 1999, unless this Agreement is terminated as provided herein prior to such date, in which case this Option shall be canceled. Once exercisable, this Option may be exercised in full or in any number of partial exercises or in combination with the full or partial exercise of any other Option for a period terminating upon the earlier to occur of (A) the fifth anniversary of the initial exercisability date or (B) the date of termination of this Agreement, as provided herein, if this Agreement is terminated prior to May 30, 2001. + +16. The second Option to purchase up to an additional 40,000 shares upon payment of the aggregate Option Share Price for the number of Shares so purchased shall become exercisable on June 1, 2000, unless this Agreement is terminated as provided herein prior to such date, in which case this Option shall be canceled. Once exercisable, this Option may be exercised in full or in any number of partial exercises or in combination with the full or partial exercise of any other Option for a period terminating upon the earlier to occur of (A) the fifth anniversary of the initial exercisability date or (B) the date of termination of this Agreement, as provided herein, if this Agreement is terminated prior to May 30, 2001; + +17. The third Option to purchase up to an additional 40,000 shares upon payment of the aggregate Option Share Price for the number of Shares so purchased shall become exercisable on June 1, 2001, unless this Agreement is terminated as provided herein prior to such date, in which case this Option shall be canceled. Once exercisable, this Option may be exercised in full or in any number of partial exercises or in combination with the full or partial exercise of any other Option for a period terminating upon the earlier to occur of (A) the fifth anniversary of the initial exercisability date or (B) the date of termination of this Agreement, as provided herein, if this Agreement is terminated prior to May 30, 2001; + +The "Option Share Price" shall initially be $6 per Share as approved by the Compensation Committee at its regular meeting held on December 15, 1998. + +Ashworth/Nantz Promotion Agreement - ------------------- + +b) The Options being granted hereunder are being granted under and subject to the terms and conditions of the Ashworth, Inc. Amended and Restated Incentive Stock Option Plan, dated November 1, 1996, ("Amended Plan") and all Shares issued upon the exercise of any Option shall be registered under the Securities Act of 1933, as amended. + +EXCLUSIVITY + +During the Term, neither Nantz Communications nor Nantz shall enter into + + + + + +any activity, employment, independent contract, or other business arrangement which conflicts with Nantz Communications' or Nantz's obligations under this Agreement or perform any service which reasonably appears to be an endorsement of the sportswear apparel, hats and shoes of a third party without the Company's prior written approval. Nantz Communications and Nantz expressly agree that the Endorsement will not be granted to anyone other than the Company for use during the Term in connection with the advertisement and promotion of sportswear apparel, hats and shoes. Notwithstanding the foregoing Nantz shall be permitted to wear a Lynx hat or clothing logo when performing promotional services for Lynx and to use Lynx equipment when performing any promotional services for the Company in which equipment will be used. + +TERMINATION + +This Agreement may be terminated by any party in the following circumstances: + +18. Upon mutual consent of the Company, on the one hand, and Nantz Communications and Nantz, on the other hand; + +19. Nantz's Disability or death, in which event the Agreement shall terminate on the May 1 following such Disability or death; + +20. Repeated misconduct of Nantz which subjects Nantz to continued public ridicule causing a substantial loss of Nantz's positive public image; + +21. Nantz's conviction or plea of guilty or no contest to a felony involving moral turpitude; + +22. A finding of insolvency or bankruptcy against the other party (which, in the case of a desired termination by the Company, shall mean Nantz Communications or Nantz); and + +23. Failure to comply with the terms and conditions of this Agreement after being given notice thereof and, where applicable, a reasonable opportunity to cure the failure (which shall be 10 days in the event of a failure to timely make a payment pursuant hereto; 30 days otherwise). In order to be a sufficient notice hereunder, any such written notice shall specify in detail each item of default, and shall specify in detail the action the defaulting party is required to take in order to cure each item. + +Ashworth/Nantz Promotion Agreement - ------------------- + +Notwithstanding the foregoing, upon the occurrence of repeated intentional failures to comply with the terms and conditions of this Agreement, which have been noticed in accordance with the terms hereof (regardless of whether such failures have been cured), the non-defaulting party may immediately terminate this Agreement upon written notice to the defaulting party without affording a further opportunity to cure. + +Should Nantz Communications or Nantz disagree with the Company as to the existence of a condition affording the Company the right to so terminate this Agreement, Nantz Communications or Nantz shall, within thirty (30) days following the receipt of any such notice of termination, submit the matter to arbitration pursuant to the provisions of this Agreement. + +The termination rights set forth in this section shall not constitute the exclusive remedy of the non-defaulting party hereunder, however, and if a default is made by either party hereunder, the other may resort to such other remedies as said party would have been entitled to if this section had been omitted from this Agreement. Termination under the provisions of this section shall be without prejudice to any rights or claims which the terminating party may otherwise have against the defaulting party. + +From and after the termination of the Term all of the rights of the Company to the use of the Endorsement shall cease absolutely and the Company shall not thereafter use or refer to the Endorsement in advertising or promotion in any manner whatsoever. The Company shall not advertise, promote, distribute or sell any item whatsoever in connection with the use of any name, figure, design, logo, trademark or trade name confusingly similar to or suggestive of the Endorsement following the termination of the Term. + +ASSIGNMENT This Agreement shall bind and inure to the benefit of the parties hereto and their respective successors and permitted assigns. Nantz Communications and Nantz acknowledge that the Services to be rendered by Nantz Communications and Nantz are unique and personal. Accordingly, except as otherwise expressly provided below, neither Nantz Communications nor Nantz shall assign any of their respective rights or delegate any of their respective duties or obligations under this Agreement without the written consent of the Company. Nothing herein shall prevent Nantz Communications from assigning the monetary benefits of this Agreement as it may so desire. Further, inasmuch as it is recognized that Nantz Communications is the representative of Nantz, Nantz Communications may at any time assign this Agreement to Nantz and, in such event, Nantz Communications shall have no further obligation or liability in connection herewith and Nantz Communications' position vis-a'-vis the Company in connection herewith shall be in all respects the same as if Nantz Communications had signed this Agreement as agent rather than as a principal from the beginning. The rights granted the Company hereunder shall be used only by it and shall not, without the prior written consent of Nantz Communications or Nantz, be transferred or assigned to + + + + + +any other. In the event of the merger or consolidation of the Company with any other entity, Nantz Communications shall have the right to terminate the Agreement by so notifying the Company in writing on or before sixty (60) days + +Ashworth/Nantz Promotion Agreement - ------------------- + +after Nantz Communications has received notice of such merger or consolidation if and only if, by virtue of such merger or consolidation Nantz Communications or Nantz would be in default under or violating any provisions of any agreement to which he or it is subject entered into prior to June 1, 1994. + +ARBITRATION Unless otherwise mutually agreed to in writing by the Company, Nantz Communications and Nantz, any controversy or claim arising out of or related to this Agreement, or the breach thereof, shall be settled by arbitration in accordance with the Rules of the American Arbitration Association or any successor. Each of the Company, on the one hand, and Nantz Communications and Nantz, on the other hand, shall select one arbitrator and the two so selected shall select a third. Failing the selection of an arbitrator by either party or by the two so selected, the claim or controversy shall be settled by the American Arbitration Association upon the application of either party. Judgment upon any award of a majority of the arbitrators filed in a court of competent jurisdiction shall be binding. + +MISCELLANEOUS 24. NOTICES. Any and all notices required pursuant to this Agreement shall be deemed given if in writing and delivered in person, sent by certified or registered mail, return receipt requested, or set by telefax at or to the addresses and telefax numbers set forth below or such other addresses and telefax numbers as the parties may direct by notice given as herein provided: + +Ashworth, Inc. + +Attention: President and Chief Executive Officer 2791 Loker Avenue West Carlsbad, California 92008 Telephone: (619) 438-6610 Telefax: (619) 438-9107 James W. Nantz III Nantz Communications, Inc. c/o International Merchandising Corporation 22 East 71st Street New York, New York 10021 Attention: Barry Frank Telephone: (212) 774-8900 Telefax: (212) 772-2617 + +Ashworth/Nantz Promotion Agreement - ------------------- + +25. GOVERNING LAW. This Agreement and its formation, operation and performance shall be governed, construed, performed, and enforced in accordance with the laws of the State of California. + +26. JURISDICTION AND VENUE. For the purposes of any dispute arising hereunder, jurisdiction and venue shall lie in the appropriate court in California. + +27. ATTORNEY FEES AND EXPENSES. In any legal action or alternative dispute resolution instituted to interpret or enforce the terms and/or conditions of this Agreement, the prevailing party shall be entitled to recover reasonable attorney fees and expenses. + +28. WAIVER. A waiver by either party of any provision of this Agreement shall not be deemed a waiver of any other portion of this Agreement. Failure to require performance of any provision of this Agreement shall not be deemed a continuing waiver of that provision or any other provision of this Agreement. + +29. SEVERABILITY. In the event that any provision or any portion of any provision of this Agreement shall be held invalid, illegal or unenforceable, the remainder of this Agreement shall remain valid, enforceable, the remainder of this Agreement shall remain valid, enforceable, and in effect. + +30. CAPTION REFERENCES. All items headings and captions are for reference purposes only and do not in any way modify or limit the provisions set forth thereunder. + +31. ENTIRE AGREEMENT. This Agreement contains the entire understandings and agreement of the parties and supersedes any prior understandings and/or agreement of the parties. This Agreement may not be modified or amended without the written consent of all parties hereto. + + + + + +[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] + +Ashworth/Nantz Promotion Agreement - ------------------- + +IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date indicated below, effective the date first above mentioned. + +THE COMPANY: + +ASHWORTH, INC. a Delaware corporation + +Date: December 16, 1998 By: /s/ RANDALL L. HERRAL, SR. ------------------------------ Randall L. Herrel, Sr. President & Chief Executive Officer + +NANTZ COMMUNICATIONS, INC. + +Date: December 16, 1998 By: /s/ JAMES W. NANTZ III -------------------------- James W. Nantz III President + +Date: December 16, 1998 /s/ JAMES W. NANTZ III -------------------------- James W. Nantz III \ No newline at end of file diff --git a/full_contract_txt/ASIANDRAGONGROUPINC_08_11_2005-EX-10.5-Reseller Agreement.txt b/full_contract_txt/ASIANDRAGONGROUPINC_08_11_2005-EX-10.5-Reseller Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..79dce0d0b1995585c23b720433f75d476d81ace6 --- /dev/null +++ b/full_contract_txt/ASIANDRAGONGROUPINC_08_11_2005-EX-10.5-Reseller Agreement.txt @@ -0,0 +1,299 @@ +Exhibit 10.5 + +Reseller Agreement + +This Agreement is made and entered into by and between 695014 B.C. Ltd. dba Galaxy Telecom, having a principal office at 200 - 375 Water Street, Vancouver, British Columbia V6B 5C6 Canada ("Galaxy") and Galaxy Telnet SRL, having a principal office at Aleea Malinului, Nr. 11, Bl. D, Scara C, Apt. 43, Constanta, Judetul Constanta, Romania ("Telnet") as of the 1s t day of June, 2004. + +WHEREAS: Galaxy is a wholesale provider of Voice over Internet Protocol ("VoIP") telephony and related services and products. Telnet is a provider of VoIP telephony and related services and products to Subscribers, as defined hereafter. Galaxy wishes to provide to Telnet and Telnet wishes to acquire from Galaxy VOIP related services and products from time to time for the purpose of providing them to Telnet's existing and future clients. NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by the Parties, the Parties covenant and agree with each other as follows: 1. DEFINITIONS AND INTERPRETATION 1.1 Definitions In this agreement unless the context otherwise requires: "Agreement" means this agreement; "Confidential Information" means all information which one of the Parties will have access to or come into possession of which is confidential and proprietary to the other Party and which is either declared to be confidential or which the receiving Party should know, acting reasonably, is confidential or proprietary in nature and includes, but is not limited to, the terms and pricing for the Products and Services, all information contained on or accessible through the Partner Portal, as defined hereafter, any information disclosed by any third party which the third party is obligated to treat as confidential or proprietary to one of the Parties hereto, trade secrets, know-how, processes, standards, product specifications, marketing plans and techniques, cost and financial pricing figures, all client or customer information (including without limitation their names, financial information, address or telephone number), all systems software applications, all software/systems source and object code, data, documentation, program files, flow charts, and all operational procedures. "Effective Date" means the date first written above; "Force Majeure" shall include but not be limited to an Act of God, strike, lockout, labour dispute, act of a public enemy, war whether declared or undeclared, blockade, revolution, riot, insurrection, civil commotion, lightning, fire storms, flood, or other natural calamities, explosion, governmental restraint or restrictions, laws, regulations, orders, proclamations of any governmental entities, judgement or orders of any court of law, embargoes, unavailability of equipment and any other cause (other than a shortage or unavailability of funds) which is not reasonably within the control of the Party whose performance under this Agreement is affected by the cause; "Partner Portal" means Galaxy's web-based VoIP subscriber, management and business administration system; "Party" means either Galaxy or Telnet as is appropriate in context and "Parties" means both or either of Galaxy and Telnet as is appropriate in context; "Product" means one of and "Products" means some or all of the VoIP related devices offered for sale by Galaxy; "Service" means one of and "Services" means some or all of the VoIP services as listed in Schedule "A" attached hereto; "Subscriber" means a client of Telnet who is a consumer of the Products or Services as provided by Galaxy and sold by Telnet. 1.2 Currency All references to currency, unless otherwise specified, are to lawful money of the United States. 1.3 Headings The division of this Agreement into articles, sections, and/or subsections and the provision of headings for all or any of them are for convenience of reference only and shall not affect the interpretation of this Agreement. 1.4 Schedules The following schedules are attached to and form part of this Agreement: Schedule "A" Services and Products and Pricing Schedule "B" Tier 1 Subscriber Support + + + + + +Schedule "C" Subscriber Contract Clauses Whenever any provision of any schedule to this Agreement conflicts with any provision in the body of this Agreement, the provision in the body of this Agreement shall prevail. References herein to a schedule shall mean a schedule of this Agreement. Reference in any schedule of this Agreement to an agreement shall mean this Agreement. 1.5 Usage In this Agreement, unless there is something in the subject matter or context inconsistent therewith: words importing the singular shall include the plural and vice versa; and words importing gender shall include masculine, feminine and neuter genders. 1.6 Governing Law This Agreement shall be governed by and construed in accordance with the laws of the Province of British Columbia and the federal laws of Canada applicable therein, excluding its conflict-of-laws rules. The parties expressly disclaim the application of the United Nations' Uniform Convention for the Sale of Goods convention, to this Agreement. + +2. RELATIONSHIP OF THE PARTIES 2.1 Non-Exclusive Reseller Subject to the terms and conditions of this Agreement, Galaxy hereby appoints Telnet as a non-exclusive authorized reseller of the Products and Services and Telnet hereby accepts the appointment. 2.2 Not a Partnership This Agreement does not and shall not be construed to create a partnership, joint venture, agency or any other business relationship which would authorize either Party to act on behalf of the other or to have any authority to create any liability or obligations on behalf of or in the name of the other. Each of the Parties is and will remain completely independent of the other. Telnet may indicate to the public that it is an authorized seller of Galaxy Services and it may advertise Products and Services under Galaxy trademarks, logos, and symbols as provided for in this Agreement, but under no circumstances shall it represent itself to be an associate, franchisee, representative, servant or agent of Galaxy. + +3. TELNET OBLIGATIONS 3.1 Marketing and Sales Telnet shall be responsible for promoting, marketing and selling those Products and Services it offers for sale or distribution and it shall use its reasonable best efforts to do so; Telnet may market and sell the Services as being Telnet services or as Galaxy services being provided by Telnet. 3.2 Business Expenses Telnet shall be responsible for all expenses it incurs from its business activities associated with the marketing, promotion, sale and support of the Products and Services, including, but not limited to, those expenses related to the installation and activation of Products and Services. 3.3 Pricing Structure & Levels Telnet shall, in its sole discretion, set the prices it charges for the Products and Services it sells or distributes and the manner, if any, in which it bundles or combines them. 3.4 Qualified Sales and Marketing Representatives Telnet covenants that all of its employees, agents and representatives who promote, market and sell the Products and Services will be fully qualified in and knowledgeable of the Products and Services. 3.5 Terms of Service Telnet shall include those terms set out in Schedule "C" as a term in each Subscriber agreement for Services. 3.6 Subscriber Support Telnet shall maintain a first line of response, known within the telephony industry as a "Tier 1 Subscriber help-desk and support function", as further defined in Schedule "B", as is required to maintain Subscriber satisfaction at or above industry standards. 3.7 Government Authorizations Telnet shall obtain and maintain in good standing all licenses, permits and other governmental approvals and authorizations required in connection with implementation of this Agreement and the sale of Products and Services, including without limitation, business licenses, import licenses and foreign exchange permits. Telnet shall keep Galaxy apprised of any change in the status of the licenses, permits and approvals and authorizations as are referred to in subsection 3.7(a) which may materially affect the implementation of this Agreement. 3.8 Notification of Infringement Telnet shall notify Galaxy immediately of any actual, suspected or alleged infringement of Galaxy trademarks, or copyrights that it + + + + + +becomes aware of. + +4. TELNET RECORDS 4.1 Maintain Records Telnet shall maintain complete and, to the best of its ability, accurate records on the Partner Portal (the "Records") of all Subscribers, including: (a) Name, location, contact information and date of activation; (b) Products purchased, including model and serial number and date of activation; (c) Services subscribed; including date of activation; and All service calls relating to Products or Services, showing Subscriber information, date and nature of call, Telnet response, service work performed and such other information as Galaxy may reasonably request. 4.2 Ownership and Privacy of Records Galaxy shall own the Records, but it shall use the information contained therein only as allowed by the terms and conditions and intent of this Agreement. Galaxy shall treat the Records as Confidential Information and it shall not provide to or allow access by any third party except as required or allowed by this Agreement. 4.3 911 Call Response Service Galaxy shall have the right to disclose Records to any third party providing emergency call response service to Subscribers as are required by such third party in order to provide the service. + +5. GALAXY RESPONSIBILITIES Services and Products Subject to the terms and conditions of this Agreement, Galaxy shall provide the Products and Services to Telnet. 5.2 Network Galaxy shall establish a Telnet account within the Partner Portal and, subject to the terms and conditions of this Agreement, it shall provide Telnet with access thereto. 5.3 Materials Galaxy shall provide Telnet with access to electronic copies of sales and technical materials, user manuals, installation manuals and brochures and catalogues relating to the Products and Services which Galaxy has electronic versions of and which it, in its absolute discretion, is of the opinion are relevant. 5.4 Supporting Information Galaxy shall make available to Telnet such technical and commercial information which Galaxy has or which comes into Galaxy's possession and which, in Galaxy's opinion, may be of assistance to Telnet in selling and supporting the Products and Services. 5.5 Tier 2 Support Galaxy shall provide "Tier 2" technical support to Telnet which would include assistance with any technical issues related to the Services and Products that could not be resolved by Telnet's Tier 1 Subscriber support personnel. + +6. PRODUCTS 6.1 Approved Products Galaxy shall, at its sole discretion, determine the technical specifications and the brand and model of those devices which it will support in providing the Services and chooses to offer as Products; Telnet shall purchase from Galaxy all devices or Products used or to be used by it to enable the provisioning of the Services pursuant to this Agreement and Galaxy shall be required to support only those devices actually purchased from Galaxy by Telnet; Notwithstanding section 6.1(b), Telnet may request from Galaxy that it enable and support devices other than Products acquired by Telnet from Galaxy, and Galaxy shall not unreasonably refuse such request; and Galaxy shall have the right, at its sole discretion, to change the Products by discontinuing or adding new devices to the Products offered and by changing manufacturers, brands, models or technical or software specifications of any of them. 6.2 Pricing Prices for Products shall be as quoted at the time of order by Telnet and are subject to change at any time; Prices quoted shall be for the Products only and shall not include applicable taxes and shipping, insurance, expedition, import/export, brokerage and other fees, which shall be in addition to the quoted Product prices. 6.3 Ordering All Telnet orders of Products are subject to acceptance by Galaxy (upon acceptance, the "Order"). Galaxy shall have the right to not accept an order of Products from Telnet, in whole or in part, if Telnet is in breach of any term or condition of this Agreement; + + + + + +Unless specifically agreed otherwise and stated in writing, the terms of this Agreement shall supersede the terms of any Order; 6.4 Payment Telnet shall pay (the "Product Payment" ) for an Order, using a payment method acceptable to Galaxy, prior to shipment of the Order by Galaxy; If Telnet falls into arrears on its account for Services, Galaxy shall have the right to apply any Product Payment, in whole or in part, to Telnet's account for Services and any Product Payment so transferred shall be deemed to be a payment for Services, not Products, and Galaxy shall have no further obligation to deliver the Products which such funds were originally payment for. 6.5 Delivery Galaxy shall, subject to availability, use all reasonable effort to deliver the Order within a reasonable time from the date of the Order; Galaxy shall have the right to suspend or stop delivery of an Order, in whole or in part, if Telnet is in breach of any of the terms and conditions of this Agreement, and, if Galaxy elects to stop delivery pursuant to this section, it shall deem such Order to be an inventory return subject to section 6.7. 6.6 Order Substitution Subject to obtaining Telnet's approval for any price changes, Galaxy shall have the right to deliver a different Product of equal or greater technical capability in place of the Order. 6.7 Inventory Returns Galaxy may, at its sole discretion, accept the return, in whole or in part, of an Order and, if it elects to do so, Telnet shall pay a restocking fee of 25% of the original purchase price of the returned Product or Products. 6.8 Warranty Unless specifically stated otherwise, Galaxy makes no warranty or guarantee, express or implied, including any implied warranty of merchantability or fitness for a particular purpose, with regard to the Products. All warranties with regard to the Products shall be those of the original equipment manufacturer only. + +7. SERVICES 7.1 Available Services Listed in Schedule "A" is a list of the Services which are available to Telnet as of the Effective Date. 7.2 Change to Services Galaxy reserves the right to, at its sole discretion, to add, delete or change any of the Services from time to time. 7.3 Provision of Service Upon Telnet's activation of a Subscriber account, Galaxy shall, subject to the terms and conditions of this Agreement, provide the requested Services to Subscriber on behalf of Telnet; Subject to section 13.2, if Telnet is in breach of any of the terms and conditions of this Agreement, Galaxy shall have the right to suspend or terminate delivery of the Services, in whole or in part, to Telnet and the Subscribers. 7.4 Communication of Termination Galaxy may, at its sole and absolute discretion, provide long distance termination through one or more termination partners. Galaxy shall have the right, at its sole discretion, to reroute the communication traffic originating from Telnet or Subscribers between Galaxy's different termination partners. 7.5 411 and 911 Service Galaxy shall arrange with third parties for the provision of: 411 directory assistance service; and 911 emergency call response service, which services will be provided through Galaxy as part of the Services. 7.6 Prices The prices charged by Galaxy to Telnet for each of the Services (the "Service Prices") shall be as listed in Schedule "A"; Galaxy shall have the right, but not the obligation, to: during the term of this Agreement, adjust any of the Service Prices by an amount that is proportionate with any changes to Galaxy's direct third party costs in providing the related Services; at the time of any renewal of this Agreement, adjust the Service Prices as it, in its absolute discretion, determines provided it has given written notice to Telnet of such price changes a minimum of 60 days in advance of the renewal. Prices for long distance termination shall be as posted on the Partner Portal and Telnet understands and agrees that, other than for those destinations noted in Schedule A as being fixed in price for the term of this Agreement, such prices are variable and subject + + + + + +to change without notice. 7.7 Billing For Services Galaxy shall invoice Telnet once per month for the Services delivered, termination fees, 411 directory assistance and 911 emergency call service fees and any other fees or billings chargeable to Telnet; Galaxy shall deliver each invoice to Telnet's account in the Partner Portal; and Telnet shall give notice to Galaxy of all errors and inaccuracies in an invoice within 15 days of receipt by Telnet of the invoice at issue. Thereafter, Telnet will be deemed to have agreed with the accuracy of the invoice. 7.8 Payment of Services Invoice Telnet hereby covenants to pay all invoices rendered to its account by Galaxy within 15 days of the date of invoice; Interest shall accrue on overdue accounts at the rate of 1.5% per month calculated and payable from the date of invoice until the date of payment in full of the overdue amount. 7.9 Warranty Galaxy does not guarantee the integrity of data transmitted using the Products and Services or that the Products and Services will operate uninterrupted or error-free, including, without limitation, the degradation of voice transmission quality and the failure of an incoming or outgoing call, including emergency calls (911 or equivalent), to be connected or completed. + +8. LIMITATION OF REMEDIES AND LIABILITY 8.1 Telnet's Exclusive Remedies Telnet's sole and exclusive remedies concerning Galaxy's performance or non-performance in any matter related to this Agreement or the provisioning of the Services or Products are limited to those expressly stated in this Agreement. 8.2 Limitation of Galaxy Liability Galaxy shall have no liability to Telnet, whether in contract, tort (including negligence), strict liability or otherwise, for any special, indirect or consequential damages or for lost profits, in any matter related to this Agreement, including but not limited to any delay or failure by Galaxy to furnish, deliver or provide Products or Services; Galaxy's liability in any matter related to Product shall be limited to the purchase price paid by Telnet for the Product with respect to which such liability relates; Galaxy's liability in any matter related to Services shall be limited to the fee paid by Telnet for the Service with respect to which the liability relates in the month or months in which the event giving rise to the liability occurred. 8.3 Liability Upon Termination of Agreement Neither Party shall be liable to the other for any damages or compensation in connection with termination of this Agreement including, without limitation, for loss of profits, loss of investment or expenditures made in reliance on this Agreement or loss of goodwill. 8.4 Force Majeure Neither party will be liable to the other for any delay or failure to perform if that delay or failure results from a cause beyond its reasonable control. 8.5 Telnet's Indemnity Telnet agrees to indemnify Galaxy (and any business entity controlled by it, controlling it or under common control with it) and save them harmless from any claim made against any of them, directly or indirectly, by a Subscriber or resulting from: (i) any promise or commitment that Telnet may have made purportedly on Galaxy's behalf in violation of this Agreement; or (ii) from any breach by Telnet or Telnet's employees with respect to Telnet's obligations under this Agreement. 8.6 Limitation of Privacy The Products and Services utilize, in whole or in part, the public Internet and third party networks to transmit voice and other communications. Galaxy shall not be liable to Telnet for any loss or damages caused by or related to a lack of privacy which may be experienced as a result of use of the Products and Services. + +9. USE OF NAME, LOGOS, TRADEMARKS AND LICENSED MATERIALS 9.1 News Releases Neither Party will use the name of the other in any news release, public announcement, advertisement or other form of publicity, without the prior written consent of the other Party. 9.2 Ownership and Use of Galaxy Trade Marks Telnet acknowledges Galaxy's exclusive ownership of the Galaxy name and logo as well as certain other trademarks and trade names which Galaxy uses in connection with the Products and Services (the "Trademarked Material") and agrees that Telnet will not acquire any interest in any of the Trademarked Material by virtue of this Agreement or anything done pursuant to it; While this Agreement is in effect, Telnet may indicate to the public its status of being an authorized seller of the Galaxy Products + + + + + +and Services; Except with the prior written consent of Galaxy, Telnet will not adopt or use any of the Trademarked Material, in whole or in part, or any confusingly similar word or symbol, as part of Telnet's name or, to the extent Telnet has knowledge of such use and the power to prevent such use, allow others to use the Trademarked Material; Nothing in this Agreement contains any transfer or license to Telnet of any Trademarked Material or other proprietary rights. 9.3 Review and Approval of Uses Galaxy shall have the right to review any use by Telnet of the Trademarked Material and to approve or disapprove, in its absolute discretion, Telnet's use of it and if Galaxy disapproves of Telnet's use of Trademarked Material, Telnet shall not use the Trademarked Material for such use. Telnet shall, at Galaxy's request, provide to Galaxy a copy of anything which Telnet is using or may use and which contains the Trademarked Material; Telnet must adhere to Galaxy's standards of use in respect to any of the Trademarked Material. Among other things, Telnet will be required to indicate explicitly Galaxy's ownership of the name or mark. 9.4 No Removal of Logos, Trademarks & Notices Unless Telnet first obtains express written consent from Galaxy, Telnet will not remove or alter any patent numbers, trade names, trademarks, copyright or other proprietary notices, serial numbers, labels, tags or other identifying marks, symbols or legends affixed to or included with any Product or portion thereof, whether on packaging, media, presentations or otherwise, or any related materials provided to Telnet by Galaxy. + +10. TERM AND TERMINATION 10.1 Term of the Agreement The initial term of this Agreement will be for two (2) year(s) commencing on the Effective Date. Thereafter, this agreement will renew automatically from year to year unless cancelled in writing by either Party giving the other written notice of such cancellation a minimum of 60 days before the end of the then current term. 10.2 Termination for Default Subject to section 13.2, either Party may terminate this Agreement, effective immediately, if the other commits a material breach of it, commits any material fraudulent act in performing any of its obligations or makes any material misrepresentation to the other or commits an act of malfeasance or misfeasance in the performance of its or his duties or is unable or unwilling to perform its obligations and duties under this Agreement which circumstances will include, but not be limited to: If a receiver, trustee in bankruptcy or similar officer is appointed to take charge of any of its assets; or If it files for relief under any applicable bankruptcy laws. 10.3 Obligations Upon Termination Upon expiration or termination of this Agreement: (a) Telnet shall immediately: stop representing itself as a seller of the Products and Services and marketing and selling the Products and Services; discontinue using the Trademarked Materials; and return to Galaxy all Galaxy sales and technical materials and other Galaxy literature; Galaxy shall deliver pending Orders per the terms of such Orders; and all amounts due from each party to the other shall become immediately due and payable. 10.4 Inventory Returns Upon termination of this Agreement, Galaxy may, at its sole discretion accept inventory returns of Products. If Galaxy accepts inventory returns, Telnet shall pay a restocking fee of twenty-five percent (25%) of the original billing amount for the returned inventory. 10.5 Subscribers If this Agreement is terminated pursuant to section 10.2, Galaxy shall have the right to contact Subscribers directly and solicit such Subscribers to become subscribers of Galaxy, an affiliate thereof or of another client of Galaxy's. + +11. CONFIDENTIALITY 11.1 Confidential Information Each of the Parties acknowledges that in the course of their relationship pursuant to this Agreement, each (the "Receiving Party") will have access to or come into possession of Confidential Information of the other Party (the "Disclosing Party") and that the disclosure of such Confidential Information to third parties or to the general public would be detrimental to the best interests and business of the Disclosing Party. + + + + + +11.2 Exceptions to Confidential Information Notwithstanding the definition of Confidential Information and the provisions of section 11.1, "Confidential Information" does not include information or data, which the Receiving Party can prove, on a balance of probabilities, is or was: publicly known at the time of disclosure; already known by the Receiving Party at the time it receives the information; provided to the Receiving Party by a third party that is not under obligation to keep such information confidential; or independently developed by the Receiving Party without use of any Confidential Information of the Disclosing Party. 11.3 Limitations on Use The Receiving Party will not, during the term of this Agreement or at any time thereafter: disclose any Confidential Information to any person; use or exploit, directly or indirectly, the Confidential Information for any purpose other than the proper purposes of the Disclosing Party; or disclose for any purpose, other than those of the Disclosing Party, the private affairs of the Disclosing Party or any other information which the Receiving Party may acquire during the term of the Agreement with respect to the business and affairs of the Disclosing Party, whether acquired in the course of carrying out the Agreement or incidentally. 11.4 Required Disclosure Notwithstanding the foregoing, the Receiving Party will be entitled to disclose Confidential Information if required by law provided that the Receiving Party will promptly notify the Disclosing Party, consult with the Disclosing Party and cooperate with the Disclosing Party in any attempt to enjoin, to resist or narrow such disclosure or to obtain an order or other assurance that such information will be accorded confidential treatment. 11.5 Survival of Confidentiality All covenants of confidentiality herein shall survive the term of this agreement by three (3) additional years counting from the date of termination of this Agreement. + +12. EXCLUSION FROM TERRITORIES 12.1 Right to Exclude Subject to section 12.2 Galaxy reserves the right to grant to any other person an exclusive territory (the "Territory") for the marketing, sales and distribution of the Services and, from that date which is 30 days after the date upon which Galaxy delivers notice in writing to Telnet of such grant of exclusivity over a Territory (the "Exclusion Date"), Telnet shall not sell, distribute or market the Services within the Territory. However, Telnet shall be entitled to continue to sell the Services to any Subscriber resident within the Territory who became a Subscriber prior to the Exclusion Date. 12.2 Territories From Which Telnet May Not Be Excluded During the term of this Agreement, Telnet may not be excluded pursuant to section 12.1, from the following areas: (a) Romania. + +13. MISCELLANEOUS 13.1 No Waiver The failure by either Party to enforce or take advantage of any of the provisions of this Agreement shall not constitute nor be construed as a waiver of such provisions or of the right subsequently to enforce or take advantage of each and every such provision. 13.2 Default If either of the Parties should be in default (the "Defaulting Party") of any obligation or requirement under this Agreement, the Party affected may give written notice to the Defaulting Party specifying the default and will give the Defaulting Party a grace period of 30 days (the "Grace Period") to cure such default or to take such reasonable steps to cure without undue delay such default prior to seeking any remedy it may have on account of such default. The Defaulting Party shall lose no rights under this Agreement if it cures the stated default within the Grace Period. 13.3 Disputes Galaxy and Telnet will attempt to settle any claim or controversy relating to this Agreement through consultation and negotiation in good faith and a spirit of mutual cooperation. If those attempts fail, then a mutually acceptable mediator, chosen by Galaxy and Telnet within forty-five (45) days after written notice from one of the parties to the other, demanding mediation, will mediate the dispute. Neither party may unreasonably withhold consent to the selection of a mediator. Galaxy and Telnet will share the costs of the mediation equally and each shall bear its own costs. Any dispute which the parties cannot resolve between themselves through negotiation or mediation within ninety (90) days after the date of the initial demand for mediation may then be submitted to the courts for final resolution. Nothing in this paragraph will prevent either party from resorting to judicial proceedings if: + + + + + +good faith efforts to resolve the dispute under these procedures have been unsuccessful; or interim relief from a court is necessary to prevent serious and irreparable injury to one party or to others. 13.4 Notices Any formal notice between the Parties hereto will be in writing and will be either personally delivered or sent by facsimile or by registered mail to the appropriate party or parties at the address noted for that party on the first page of this Agreement, or such other address as may be designated by a party in a written notice sent to the other parties in accordance with this paragraph. Any notice or other communication will be effective seven calendar days from the day that it was sent, or if given by personal delivery or facsimile, the day following its receipt. 13.5 Assignment Neither party may assign this Agreement without the prior written consent of the other. However, Telnet agrees that Galaxy may assign this entire Agreement to an affiliate or sell, transfer or assign any account receivable under it to a financing institution to enforce the Galaxy's rights to receive payment from Telnet. This Agreement will be binding upon any authorized assignee or successor of Telnet or Galaxy. 13.6 Compliance with Law Each of the Parties agrees to comply with all applicable laws, rules and regulations of the jurisdictions in which it operates and to do nothing to cause the other to violate the law, rules and regulations of those jurisdictions. If this Agreement or the performance hereof, is determined to be contrary of the laws, rules or regulations of the Territory or of Canada, this Agreement will automatically terminate subject the terms of Termination outlined in this Agreement. + +14. GENERAL 14.1 Entire Agreement This Agreement and all documents contemplated by or delivered under or in connection with this Agreement constitute the entire agreement between the Parties with respect to the subject matter of this Agreement, and supersede all prior agreements, negotiations, discussions, undertakings, representations, warranties and understandings, whether written or oral, express or implied, statutory or otherwise. 14.2 Amendment No amendment, supplement, restatement or termination of any provision of this Agreement is binding upon the Parties hereto unless it is in writing and signed by an authorized representative of each Party to this Agreement at the time of the amendment, supplement, restatement or termination. 14.3 Severability If any provision or any portion of any provision of this Agreement shall be held unlawful or unenforceable, the balance of such provision and all other provisions hereof shall nonetheless in all respects remain binding and effective and shall be construed in full force and effect to the extent lawfully permissible. 14.4 Time of Essence Time is of the essence in the performance of the terms and conditions of this Agreement. 14.5 Enurement This Agreement enures to the benefit of and binds the Parties and their respective heirs, executors, administrators, successors and permitted assigns. 14.6 Counterpart Signature and Facsimile Delivery This Agreement may be executed in two or more counterparts and may be delivered by facsimile, each of which will be deemed to be an original and all of which will constitute one agreement, effective as of the reference date given above. + +IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized representatives as of the date first written above: + +695014 B.C. LTD. GALAXY TELNET SRL + +Per: "Peter Wiggans" Per: "Michael Stunden" + + Authorized Signatory Authorized Signatory + + Peter Wiggans Michael Stunden + + (Print name) (Print name) + +Title: Chief Operating Officer Title: Chief Financial Officer + + + + + + + +SCHEDULE "A" + + + + + +SCHEDULE "A" PARTNER PRICING Galaxy Telnet + +Table 1 + + Business Partner Pricing + +VoIP Services One-Time Fee Monthly Service Fee + +VoIP Connectivity (per port charge) + +Includes: Unlimited VoIP calls, VoIP Caller ID, Call waiting, Basic voicemail + +$9.95 $5.95 + +VoIP Connectivity - Commpanion Galaxy Telecom Brand + +With i-box subscription + +Includes: Unlimited VoIP calls, VoIP Caller ID, Call waiting, Basic voicemail, 3-way Calling, Call forwarding, Do not disturb, Call hold, Auto answer, Call ignore, Call "go to voicemail", Redial, Mute + +$19.95 $1.95 + +VoIP Connectivity - i-box Commpanion Galaxy Telecom Brand + +Stand alone subscription + +Includes: Unlimited VoIP calls, VoIP Caller ID, Call waiting, Basic voicemail, 3-way Calling, Call forwarding, Do not disturb, Call hold, Auto answer, Call ignore, Call "go to voicemail", Redial, Mute + +$19.95 $5.95 + +VoIP to VoIP Termination included included + +VoIP to PSTN Termination (Long distance) included See Current Published Rates + +Basic Voicemail Service included included + +i-box CommCenter - Enhanced Voicemail + +Includes: Web interface, call forwarding, do not disturb, speed dial, call logs, email message notify management, time zone control, profile management, greeting management and password control + +included $2.00 + +Services + +Partner Portal included included + +Partner Portal Back-Office (API) included included + +Special Accounts + +Demonstration Accounts See note 3 free free + + + + + +Employee only Accounts See note 3 free $1.95 + +Promotion Accounts + +TBD Special Special + +Phone Numbers + +Direct Inward Dial (DID) - Canada $250 one time fee per order + +see note 1 + +$3.00 + +Direct Inward Dial (DID) - USA $250 one time fee per order + +see note 1 + +$2.50 + +Toll Free Dial (1-8XX) - Canada/USA $2.50 $2.50 plus usage ($.05 avg.) + +Use existing phone number see note 2 $10.00 $3.00 + +Bundles & Calling Zones + +Monthly 250 North America minute bundle n/a $2.95 + +Monthly 500 North America minute bundle n/a $5.95 + +Monthly 750 North America minute bundle n/a $8.95 + +Monthly 1000 North America minute bundle n/a $11.95 + +Local Calling Zone + +On-net locations only + +Includes: 750 minutes inbound and outbound local calls. Requires DID. Subscriber must reside in Local Calling area. + +included $6.95 + +Virtual Calling Zone + +On-net locations only + +Includes: 750 minutes inbound calls from virtual calling area. Requires DID Applies to North America-based subscribers only. + +See note 4 + +included $6.95 + +Custom Calling Zone + +Off-net locations + +Custom Quote Custom Quote + +Note 1 Not available in all areas, see Table 3, 25 DID number block minimum Note 2 Not available in all areas see Table 3 Note 3 Quantity to be agreed between parties, Long distance charges apply Note 4 Unlimited calling FROM Virtual Calling Zone only. Long distance charges apply when calling to VCZ. + + + + + + + + + +Table 2 i-box Commpanion Telecom Branded Version + +Licenses i-box CommPanion Additional 500 Licenses $7,000 $14.00 ea 1,350 Licenses $14,000 $10.50 ea 2,500 Licenses $21,000 $8.40 ea 3,650 Licenses $28,000 $7.70 ea 5,000 Licenses $35,000 $7.00 ea 6,700 Licenses $42,000 $6.30 ea 8,750 Licenses $49,000 $5.60 ea 11,500 Licenses $56,000 $4.90 ea 15,000 Licenses $63,000 $4.20 ea 20,000 Licenses $70,000 $3.50 ea + +Note 1 Co-Branding one time charge $1,350.00 + + + + + +Table 3 Galaxy Telecom On-net locations + +Canada Province City Alberta Calgary Edmonton British Columbia Vancouver Victoria Kelowna Whistler Abbotsford Manitoba Winnipeg Nova Scotia Halifax Ontario Toronto Ottawa Hamilton Windsor Kitchener London Guelph Kingston Oshawa St. Catherines Waterloo Hespeler Quebec Montreal Quebec City Saskatchewan Regina + +USA State City Alabama Birmingham Arizona Phoenix California Los Angeles San Diego San Francisco Colorado Denver Florida Gainesville Miami Orlando Tampa Georgia Atlanta Illinois Chicago Indiana Indianapolis Maryland Baltimore Michigan Detroit Minnesota Minneapolis Missouri Kansas City St Louis New York New York City North Carolina Charlotte Fayetteville Greensboro Raleigh Ohio Cincinnati Cleveland Dayton + + + + + +Oregon Portland Pennsylvania Philadelphia Tennessee Nashville Texas Dallas Austin Houston San Antonio Utah Salt lake City Virginia Culpepper Washington Seattle Washington DC Washington DC + + + + + +SCHEDULE "B" TIER 1 SUBSCRIBER SUPPORT + +Under this Agreement the Telnet is required to maintain Tier 1 Subscriber Support (the "Subscriber Support") functioning as initial response for any direct Subscriber inquiries. Galaxy will provide Tier 2 technical support for technical inquiries from qualified resellers only. The Criteria for the Subscriber Support are as follows: Subscriber Satisfaction Telnet will use its best efforts to ensure that Subscribers achieve the highest levels of satisfaction with the Services delivered by Telnet. Telnet shall notify Galaxy immediately of any complaints by Subscribers, whether they involve sales, Service, Performance or other issues. Galaxy shall use Subscriber satisfaction surveys, field Service reports, and random audits, as it deems necessary to determine if the appropriate levels of Subscriber satisfaction are achieved. If Galaxy determines that an inappropriate level of Subscriber dissatisfaction exists, Galaxy and Telnet shall put in place an action plan as approved by Galaxy to continually improve and maintain Subscriber satisfaction levels. Staff Subscriber Support shall be staffed by fully qualified and trained personnel as per the following criteria: 1. Training Telnet shall maintain technically qualified Service personnel and use its best efforts to service Telnet subscribers in the Territory. 2. Technical Team (a) Language Capabilities Telnet shall employ at least one lead Service engineer who is fluent in English who will be responsible for communicating with Galaxy's technical staff and who can accurately translate all technical documentation from English. Service Staff Upon execution of this Agreement and annually thereafter, Telnet shall furnish Galaxy with a list of its Service management and other technical staff qualified to support Galaxy Services. (c) Help Desk Telnet shall ensure that the personnel staffing the Subscriber help desk, as set out in section 3.6, shall have a sufficient working knowledge of: networking in a TCP/IP WAN/LAN environment; configuring and maintaining network equipment; relevant operating systems (Macintosh, Windows, Linux); and both written and spoken English,. to be able to provide effective help to Subscribers, communicate and work with Galaxy's Tier 2 help desk to address those Subscriber issues which Telnet's help desk are unable to resolve and to communicate and work with Galaxy with regard to technical issues. + +SCHEDULE "C" + + + + + +SCHEDULE "C" SUBSCRIBER CONTRACT CLAUSES + +Telnet shall include as a term of any agreement between itself and a Subscriber with respect to any of the Services, the relevant clauses of the following: General + +The Subscriber will not use the Service for any purpose that is unlawful, abusive, intrusive on another's privacy, harassing, libellous, defamatory, threatening or hateful, or in any other way that would violate any applicable governmental law. + +Telnet offers the Service internationally. While the Service may be used to make and receive international calls, we do not represent that the use of the Service is legally appropriate in locations outside of Canada and the United States. If the Subscriber chooses to use the Service from or to a location outside of Canada and the United States, the Subscriber is responsible for compliance with any and all governing foreign and local laws. + +The Subscriber may not reverse engineer, distribute, publish, display, modify or in any way exploit the configuration parameters Telnet provides as a means to access the Service. + +The Subscriber acknowledges that any devices and embedded software or firmware ("Products") furnished by Telnet are exclusively for use with Telnet's Service. + +Residential Use of Service + +If you have subscribed to Residential Services, the Service is provided to you as a residential user, for your personal, residential, non-business and non-professional use. This means that you are not using the service for any commercial or governmental activities, profit-making or non-profit, including but not limited to business, sales, telecommuting, telemarketing, autodialing, continuous or extensive call forwarding, fax broadcast, fax blasting or any other activity that would be inconsistent with normal residential usage patterns. Telnet reserves the right to immediately terminate or modify the service, if Telnet determines, in its sole discretion, that the subscriber's service is being used for any of the aforementioned activities. + +The Service is offered on a monthly basis to the Subscriber. The monthly Service term begins on the date that Service is activated for the subscriber. Full monthly terms will renew automatically unless Telnet is otherwise notified of the intent to cancel the Service. Upon cancellation, the Subscriber will be responsible for charges for the full term of the then current billing period and any unbilled charges. + +Small Business Use of Service + +If you have subscribed to Small Business Services, the Service is provided to you as a small business user. You agree not to use the Service for auto-dialling, continuous or extensive call forwarding, telemarketing or fax broadcasting. Telnet reserves the right to immediately terminate or modify the service, if Telnet determines, in its sole discretion, that the subscriber's service is being used for any of the aforementioned activities. + +The Service is offered on a monthly basis to the Subscriber. The monthly Service term begins on the date that subscriber requests activation of the Service. Full monthly terms will renew automatically unless the Telnet and Galaxy is otherwise notified of the intent to cancel the Service. Upon cancellation, the Subscriber will be responsible for charges for the then current full monthly term and any unbilled charges + +Short Form Emergency Services, E911 and 911 + +The Service presently does not support 911, E911 or any other type of emergency Services; that calls to "9-1-1" cannot be connected; and that alternative arrangements need to be made to contact emergency Services in situations where emergency numbers would have to be dialled. + +Theft + +The Subscriber is responsible for cancelling the Service if Subscriber believes that the associated Products have been lost or stolen, or if the Subscriber becomes aware that the Service provided is being used or misused without Subscribers consent. Subscriber is liable for all charges accruing to Subscribers account for the Service until Subscriber cancels the Service. Service Termination The Provider reserves the right to terminate the Service at any time with or without notice and for any reason. The subscriber agrees that the provider shall not be liable to the subscriber or to any third party for any modification, suspension or discontinuance of the Service. Privacy Personal data and certain other information submitted by the subscriber is subject to our Privacy Policy. Voice over IP + + + + + +communications are transmitted over public networks including the Internet. The subscriber acknowledges that the provider is not liable for any loss of privacy arising out of use of the Service. \ No newline at end of file diff --git a/full_contract_txt/ASPIRITYHOLDINGSLLC_05_07_2012-EX-10.6-OUTSOURCING AGREEMENT.txt b/full_contract_txt/ASPIRITYHOLDINGSLLC_05_07_2012-EX-10.6-OUTSOURCING AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..a368f59091e4cc9d5a5c781a68bb0b0950b71bd5 --- /dev/null +++ b/full_contract_txt/ASPIRITYHOLDINGSLLC_05_07_2012-EX-10.6-OUTSOURCING AGREEMENT.txt @@ -0,0 +1,211 @@ +Exhibit 10.6 + + OUTSOURCING AGREEMENT dated as of , 2012 TWIN CITIES POWER HOLDINGS, LLC and REDWATER LLC + + $50,000,000.00 Renewable Unsecured Subordinated Notes + + + + + + TABLE OF CONTENTS ARTICLE I DEFINITIONS 1 Section 1.01 Defined Terms 1 + + + + + +Section 1.02 Accounting Terms 4 ARTICLE II APPOINTMENT OF THE AGENT AND RELATED AGREEMENTS 5 Section 2.01 Appointment; Exclusivity 5 Section 2.02 Scope of Agency 5 Section 2.03 Compensation to the Contractor 6 Section 2.04 Brokers and Dealers 8 Section 2.05 The Contractor's Unrelated Activities 8 Section 2.06 Best Efforts; Independent Contractor 8 Section 2.07 Issuance and Payment 8 ARTICLE III SERVICES; STANDARD OF CARE 8 Section 3.01 Services for the Notes 8 Section 3.02 Maintenance of Files and Records 11 Section 3.03 Monthly Reports to the Company 12 ARTICLE IV REPRESENTATIONS AND COVENANTS OF THE COMPANY 13 Section 4.01 Representations, Warranties and Agreements of the Company 13 Section 4.02 Covenants of the Company 20 ARTICLE V REPRESENTATIONS AND COVENANTS OF THE AGENT; CONDITIONS 22 Section 5.01 Representations and Warranties of the Contractor 22 Section 5.02 Covenants of the Contractor 24 ARTICLE VI CONDITIONS 25 Section 6.01 Conditions of the Contractor's Obligations 25 Section 6.02 Conditions of the Company's Obligations 31 ARTICLE VII INDEMNIFICATION AND CONTRIBUTION 31 + + + + + + + + Section 7.01 The Company's Indemnification of the Contractor 31 Section 7.02 The Contractor's Indemnification of the Company 32 Section 7.08 Intellectual Property Infringement 35 Section 7.09 Confidentiality 35 ARTICLE VIII TERM AND TERMINATION 36 Section 8.01 Effective Date of this Agreement 36 Section 8.02 Termination Prior to Initial Closing Date 36 Section 8.03 Notice of Termination 37 Section 8.04 Termination After Initial Closing Date 37 Section 8.05 Termination Without Termination of Offering 38 ARTICLE IX MISCELLANEOUS 38 + + + + + + + + ii + + Section 9.01 Survival 38 Section 9.02 Notices 38 Section 9.03 Successors and Assigns; Transfer 39 Section 9.04 Cumulative Remedies 39 Section 9.05 Attorneys' Fees 39 Section 9.06 Entire Agreement 39 Section 9.07 Choice of Law; Venue 39 Section 9.08 Rights to Investor Lists 39 Section 9.09 Waiver; Subsequent Modification 40 Section 9.10 Severability 40 Section 9.11 Joint Preparation 40 Section 9.12 Captions 40 Section 9.13 Counterparts 40 Section 9.14 Third Party Contractors 40 + + + + + + OUTSOURCING AGREEMENT This OUTSOURCING AGREEMENT is entered into as of this day of , 2012 by and between Twin Cities Power Holdings, LLC, a Minnesota limited liability company (the "Company"), and Redwater LLC, a Minnesota limited liability company (the "Contractor"). RECITALS WHEREAS, the Company has registered for public offer and sale an aggregate principal amount of $50,000,000.00 of renewable, unsecured, subordinated notes of the Company; and WHEREAS, subject to the termination rights set forth herein, the Company desires to retain the Contractor to perform certain ministerial tasks on behalf of the Company, and Contractor desires to accept such duties, all as provided for by the terms of this Agreement. NOW, THEREFORE, in consideration of the above and for other good and valuable consideration, receipt of which is acknowledged, and in consideration of the mutual promises, covenants, representations and warranties hereinafter set forth, the parties hereto agree as follows: ARTICLE I DEFINITIONS Section 1.01 Defined Terms. Whenever used in this Agreement, the following terms have the respective meanings set forth below. The definitions of such terms are applicable to the singular as well as to the plural forms of such terms. Accepted Note Practices. As applicable to the context in which this term is used, those procedures and practices with respect to the servicing and administration of the Notes that satisfy the following: (i) the use of reasonable care; (ii) compliance with all Governmental Rules; (iii) compliance with the provisions of this Agreement and the Indenture; and (iv) give due consideration to the accepted standards of practice of prudent servicing firms that service or administer comparable programs for publicly offered notes or securities and the reliance of the Company on the Contractor for the servicing and administration of the Renewable Note Program. Contractor. Redwater LLC, a Minnesota limited liability company, or its successors in interest or assigns, if approved by the Company as provided in Sections 5.02(c) and 9.03, below. Agreement. This Outsourcing Agreement, including any exhibits or attachments hereto, as originally executed, and as amended or supplemented from time to time in accordance with the terms hereof. Business Day. Any day other than (a) a Saturday or Sunday or (b) another day on which banking institutions in the the State of Minnesota are authorized or obligated by law, executive order, or governmental decree to be closed. + +th + + + + + + Commission or SEC. The Securities and Exchange Commission. Company. Twin Cities Power Generation, or its successors or assigns, if approved by Contractor as provided in Section 9.03, below. Due Period. The monthly, quarterly, semi-annual, or annual periods, or the full term of the Note if interest is due at maturity, for which scheduled payments of interest will be paid on any Note. Exchange Act. The Securities Exchange Act of 1934, as amended, and as hereafter amended, and the rules and regulations thereunder. Governmental Rules. Any law, rule, regulation, ordinance, order, code, interpretation, judgment, decree, policy, decision or guideline of any governmental agency, court or authority. Holder. The registered owner of any Note as it appears on the records of the Registrar, including any purchaser or any subsequent transferee or other holder thereof. Incorporated Documents. All documents that, on or at any time after the effective date of the Registration Statement, are incorporated by reference therein, in the Prospectus, or in any amendment or supplement thereto. Indenture. That certain Indenture dated on or about , 2012, by and between the Company and the Trustee with respect to the Notes as the same may be amended or supplemented in accordance with its terms, and including a supplement dated , 2012. Investor. Any person who purchases Notes or who contacts the Contractor expressing an interest in purchasing the Notes or requesting information concerning the Notes. Material Agreement. With respect to a person, any agreement, contract, joint venture, lease, commitment, guaranty or other contractual arrangement or any bond, debenture, indenture, mortgage, deed of trust, loan or security agreement, note, instrument or other evidence of indebtedness, which in the case of any of the foregoing is material to the business, assets, operations, condition or prospects, financial or otherwise, of such person or which is material to the ability of such person to perform its obligations under this Agreement. FINRA. Financial Industry Regulatory Authority. Note Confirmation. With respect to the issuance and ownership of the Notes in book-entry form, an appropriate written confirmation of the issuance and ownership or transfer of ownership of a Note to a Holder, the format of which shall comply with the provisions of the Indenture. 2 + + + + + + Note Portfolio. The aggregate of individual Notes, as it exists from time to time, which, unless the context otherwise requires or provides, determined by the principal balances of the outstanding Notes. Notes. The renewable, unsecured, subordinated notes of the Company that are being offered and sold pursuant to the Registration Statement and that have an aggregate principal amount up to $50,000,000 and such other terms as described in the Prospectus, and any additional principal amount of the same or similar notes as may be registered from time to time pursuant to the Registration Statement. Offering. The offer and sale of the Notes in accordance with the terms and subject to the conditions set forth in the Registration Statement. Paying Agent. Bank, National Association or its successors or assigns, or such other paying agent with respect to the Notes as may be subsequently appointed by the Company pursuant to the Indenture. Paying Agent Agreement. That certain agreement by and between the Company and the Paying Agent relating to the Company's engagement of the Paying Agent to act as the paying agent for the Notes. Paying Agent Fees. All fees and expenses payable to the Paying Agent in accordance with the Paying Agent Agreement. Proprietary Rights. All rights worldwide in and to copyrights, rights to register copyrights, trade secrets, inventions, patents, patent rights, trademarks, trademark rights, confidential and proprietary information protected under contract or otherwise under law, and other similar rights or interests in intellectual or industrial property. Prospectus. The prospectus included in the Registration Statement at the time it was declared effective by the Commission, as supplemented by all prospectus supplements (including interest rate supplements) related to the Notes that are filed with the Commission pursuant to Rules 424(b) or (c) under the Securities Act. References to the Prospectus shall be deemed to refer to and include the Incorporated Documents to the extent incorporated by reference therein. Redemption Payment. The payment of principal plus any accrued and unpaid interest that is being made at the discretion of the Company in accordance with the Indenture. Registration Statement. That certain Registration Statement on Form S-1 (File No. - ) of the Company with respect to the Notes filed with the Securities and Exchange Commission under the Securities Act on or about , 2012, as amended and declared effective by the Commission, including the respective copies thereof filed with the Commission. References to the 3 + + + + + + Registration Statement shall be deemed to refer to and include the Incorporated Documents to the extent incorporated by reference therein. Renewable Note Program. The marketing, administration, customer service and investor relations, registration of ownership, reporting, payment, repurchase, redemption, renewal and related activities associated with the Notes. Repurchase Payment. The payment of principal plus any accrued and unpaid interest, less any penalties upon the repurchase of any Note, that is being made at the request of the Holder in accordance with the Indenture. Scheduled Payment. For any Due Period and any Note, the amount of interest and/or principal indicated in such Note as required to be paid by the Company under such Note for the Due Period and giving effect to any rescheduling or reduction of payments in any insolvency or similar proceeding and any portion thereof. Securities Act. The Securities Act of 1933, as amended, and as hereafter amended, and the rules and regulations thereunder. Subscription Agreement. A subscription agreement entered into by a Person under which such Person has committed to purchase certain Notes as identified thereby, in such form and substance as mutually agreed by the parties and as filed as an exhibit to the Registration Statement. Trust Account. The trust account established by the Trustee pursuant to the Indenture. Trust Indenture Act. The Trust Indenture Act of 1939, as amended, and as hereafter amended, and the rules and regulations thereunder. Trustee. Bank, National Association, or its successors or assigns, or any replacement Trustee under the terms of the Indenture. Trustee's Fees. All fees and expenses payable to the Trustee in accordance with the Indenture. Section 1.02 Accounting Terms. Unless otherwise specified in this Agreement, all accounting terms used in this Agreement shall be interpreted, all accounting determinations under this Agreement shall be made, and all financial statements required to be delivered by any person pursuant to this Agreement shall be prepared, in accordance with U.S. generally accepted accounting principles, as in effect from time to time and as applied on a consistent basis. To the extent such principles do not apply to certain reports or accounting practices of the Contractor, the parties will mutually agree on the accounting practices and assumptions. 4 + + ARTICLE II RETENTION OF THE CONTRACTOR AND RELATED AGREEMENTS Section 2.01 Retention. On the basis of the representations, warranties and agreements herein contained, and subject to the terms, conditions and covenants set forth herein during the term of this Agreement, the Company retains the Contractor to perform the tasks specified herein on behalf of the Company related to servicing of the Notes, in each case, under the Renewable Note Program upon the terms and conditions set forth herein, including, without limitation, compliance and conformity with Accepted Note Practices and Governmental Rules, and the Contractor agrees to use its best efforts perform such tasks until the later of the termination of the Offering or the sale of all of the Notes, or until the termination of this Agreement, if earlier. In connection with the servicing of the Renewable Note Program, the Contractor will carry out the duties provided for herein. Section 2.02 Scope of Duties. In the performance of its duties hereunder, the Contractor shall have only such power and authority to take action for purposes of servicing the Notes, under the Renewable Note Program that the Company, in its discretion, deems necessary or appropriate, subject in all respects to compliance and conformity with Accepted Note Practices and Governmental Rules. Initial instructions of the Company to the Contractor are set forth in Exhibit B to this Agreement, which Company may, in its discretion, amend and supplement from time to time. In the performance of its duties hereunder, the Contractor shall (i) act as the agent of the Company in connection with the Renewable Note Program; (ii) promptly forward to the Company all Subscription Agreements, notices or other documents received by it in connection with the Renewable Note Program for the sole and exclusive use and benefit of the Company; and (iii) make dispositions of the items in clause (ii) only in accordance with this Agreement or at the written direction of the Company. Except as set forth in this Agreement with respect to the Renewable Note Program, the Contractor shall have no authority, express or implied, to act in any manner or by any means for or on behalf of the Company. Section 2.03 Compensation to the Contractor. (a) The Contractor's Fees. In consideration of the agreement of the Contractor to provide its services as set forth in this Agreement, the Company will pay the Contractor the following amounts: (i) a monthly service fee of $7.50 per note based on the maximum number of notes outstanding during the month, subject to a monthly minimum of $2,500; (ii) a fee for media services further described in Exhibit A equal to the 15% gross/net differential or the fee equivalent thereof; (iii) a fulfillment fee of $2.00 per investment kit mailed; (iv) a fulfillment fee of $1.00 per address for each bonus offer or marketing postcard mailed, subject to a $10,000 maximum per project. 5 + + + + + + + + + + (b) The Contractor's Expenses. Except as otherwise provided in this Agreement, each party shall bear all of its own expenses. To the extent that the Company agrees herein to pay specified offering-related expenses such as all marketing and advertising costs, the Company will pay or cause to be paid such expenses whether incurred prior or subsequent to the date of this Agreement (c) Payment of Fees. On the first Business Day of each month, or as soon thereafter as practicable, the Contractor shall provide the Company with a written invoice for the previous month's fees and expenses that are payable with respect to Notes issued up to the last day of such month.. Such fees and expenses will be due and payable by the later of the fifteenth (15 ) day of every month or fifteen (15) days after the date such invoice is received. Section 2.04 Brokers and Dealers. At the discretion of the Company, the Company may, at no additional obligation or expense to the Contractor, use the services of brokers or dealers who are members in good standing of FINRA in connection with the offer and sale of the Notes. The Company may enter into agreements with any such broker or dealer to act as its agents for the sale of the Notes and shall be solely responsible for the payment of any portion of the Contractor's compensation hereunder to such broker or dealer. The Contractor's administrative services will apply to all notes sold by brokers or dealers and the Company will compensate the Contractor for such services in accordance with Section 2.03. Section 2.05 The Contractor's Unrelated Activities. The Company agrees that the Contractor may service renewable note programs for other issuers during the course of the Offering, but such activities shall not prevent the Contractor from promptly and efficiently performing its duties hereunder. The Contractor (and the Agency as defined in Section 3.01(b) below) may direct other issuers to advertise the securities of other issuers on websites, in print, by radio, or by any other means and at such times as they may determine; provided, however, that any such advertising which refers to the Notes shall not refer to, mention, or advertise any securities or notes of any other issuer, nor include any links to any other issuer, renewable note program or offering. The Contractor shall have the right to advertise or otherwise disclose to unrelated prospective issuers, at its own expense, its relationship with the Company, the services it provides in connection with the Notes and the amount of money that it raised through the Offering and the performance of the Offering, subject to the Company's consent, which shall not be unreasonably withheld. Section 2.06 Independent Contractor. The Contractor shall have no obligation to purchase Notes for its own account. During the term of this Agreement, all actions taken by the Contractor pursuant to this Agreement shall be in the capacity of an independent contractor, and in no event shall the Contractor have any obligations under the Notes. Section 2.07 Issuance and Payment. The Notes shall be issued pursuant to the Indenture and all Scheduled Payments, Redemption Payments and Repurchase Payments shall be made by automated clearing house (i.e., ACH) remittance from the Trust Account by the Paying Agent in accordance with the Paying Agent Agreement and the Indenture. 6 + +th + + + + + + ARTICLE III SERVICES; STANDARD OF CARE Section 3.01 Services for the Notes. The services to be provided to the Company by the Contractor pursuant to and during the term of this Agreement shall include the following: (a) Marketing and Advertising. During the term of this Agreement, the Contractor shall develop and execute a direct response marketing strategy for the Notes designed to meet the Company's capital goals in a timely manner, which shall be subject to the prior approval of the Company. The Contractor shall also oversee designing and printing all marketing materials (subject to the prior approval of the Company), in accordance with the Securities Act, including the applicable rules and regulations and any other requirements of the SEC and any other Governmental Rules. The Contractor will provide the Company with media planning, media buying, media production and media placement services related to the Offering. All ad placements and use of all marketing materials shall be subject to the prior written approval of the Company. The Company will pay all marketing and advertising costs related to the offering, including printing, postage, advertising and web site hosting. (i) During the term of this Agreement, the Company hereby grants the Contractor a limited license to use the Company's logo, corporate colors, trademarks, trade names, fonts, and other aspects of corporate identity in advertisements and marketing materials related to the Notes and on the Contractor's website, subject to the Company's prior written approval of the specific use of these items in writing in each instance (which shall not be unreasonably withheld). The Contractor will not make use of the Company's logo, corporate colors, trademarks or trade names in any manner that would reasonably be expected to disparage or damage such marks or the reputation of the Company or diminish the Company's goodwill. It is expressly agreed that the Contractor is not acquiring any right, title or interest in the Company's logo, corporate colors, trademarks, trade names or other intellectual property. (b) Subscription, Sale and Ownership. During the term of this Agreement, the Contractor shall promptly forward to the Company each Subscription Agreement for the Notes received from an Investor. The Company shall be responsible for determining whether (i) such subscription shall be accepted, (ii) such agreement is complete and accurate in all material respects, including without limitation the execution thereof by such Investor, (iii) such Investor timely remits the proper purchase price for the Notes in accordance with the Subscription Agreement, and (iv) the principal amount, interest rate and term to maturity and any other material terms of the Notes are verified for accuracy and completeness. Upon delivery by each Investor of a completed Subscription Agreement for Notes and full payment of the principal amount of such Notes in accordance with the Investor's Subscription Agreement, and subject to the acceptance of the Subscription Agreement by the Company, the Company shall promptly notify the Contractor and the Contractor shall promptly (i) verify that the payment of the principal amount of such Investor's accepted subscription for the Notes 7 + + + + + + is being remitted to the Company in accordance with the Subscription Agreement in an account established by the Company for such purpose or in such other manner as may be directed by the Company from time to time, and (ii) remit to the Trustee electronic or hard copies of all accepted Subscription Agreements and related records as may be reasonably requested by the Trustee, including without limitation, a record of each deposit relating to the payment of the subscription amount of the Notes. Pursuant to the preceding sentence, Notes shall be issued by the Contractor as the Company's Registrar in book-entry form only and the Contractor shall deliver a Note Confirmation to each Holder with respect to such Holder's respective accepted Subscription Agreement and the receipt of full payment for such Holder's Notes. In the event that the Company rejects a Subscription Agreement, the Contractor shall promptly return the Subscription Agreement and the related subscription amount to the related Investor. The Company hereby appoints the Contractor, and the Contractor hereby accepts such appointment, as its initial Registrar (as such term is defined in the Indenture) for the Notes pursuant to the terms of the Indenture. For so long as the Contractor shall serve as the Registrar for the Notes, the Contractor shall perform, in accordance with the terms of the Indenture, all of the duties and obligations of the Registrar under the Indenture, including, without limitation, the obligation to maintain a book-entry registration and transfer system for the ownership of the Notes in accordance with the terms of the Indenture. (c) Investor Relations and Reporting. During the term of this Agreement the Contractor, in conjunction with the Trustee, shall perform ministerial tasks included in the customer service and investor relations functions with respect to the Offering, as directed from time to time by the Company, which may include, but not be limited to, handling inquiries from Investors in a manner consistent with Section 3.01(d), mailing investment kits, delivering to each Investor the Prospectus and Subscription Agreement, and processing Subscription Agreements. The Contractor shall to the best of its knowledge ensure that each person submitting a Subscription Agreement shall have received the Prospectus. An Investor who visits the offering web site shall be deemed to have received the Prospectus, provided such person either delivers an Electronic Delivery Consent Form with such Investors Subscription Agreement or certifies under penalties of perjury that he, she or it has received the Prospectus. (d) The Contractor shall forward to the Company written or telephonic questions by Investors and Holders relating to the Notes regarding topics that are not addressed in the Prospectus or its supplements, including without limitation questions relating to the Company's finances and business, the Company's performance and practices with regard to the Notes, and substantive matters regarding an investment in the Notes, unless such questions can be answered solely by reference to the Company's SEC filings. Notwithstanding the foregoing, the Contractor may respond to questions that are purely administrative or ministerial in nature. The Contractor shall also be responsible for recording changes in Holders' addresses or accounts, preparing and issuing maturity and renewal notices, quarterly statements, newsletters, reports and analyses to Holders and to the Company, directing the Paying Agent to make Scheduled Payments, Repurchase Payments and Redemption Payments to Holders in a timely manner, and directing the Paying Agent to issue Form 1099INT's to Holders as required by law. In addition, the Contractor shall provide the Trustee (and copy the Company) with management reports regarding the Notes as required under the Indenture. 8 + + + + + + (e) Web Site Development. Subject to compliance and conformity with Accepted Note Practices by the Contractor, the Contractor (or a third party service provider working at the Contractor's direction) shall assist the Company in developing a dedicated Internet web site separate from the Company's corporate site to allow Investors to view online and download copies of the Offering documents (including the Prospectus and Subscription Agreement) and marketing materials that are included in the investment kit or comparable information. (f) Ownership of Web Pages. Any and all web pages used by Contractor in connection with the Offering (the "Web Pages"), and all associated Proprietary Rights, shall be owned exclusively by the Company. (g) Daily Payment Reports to Company. On each Business Day during the term of the Notes, the Contractor shall furnish daily reports to the Company that detail and summarize the amount of cash that is required to pay interest and principal on the Notes. Section 3.02 Maintenance of Files and Records. The Contractor shall establish and maintain at all times during the term of this Agreement files and records (including, without limitation, computerized records) regarding the Notes and the Note Portfolio, with full and correct entries of all transactions or modifications in a reasonably secure, up-to-date manner and in accordance with the following: (a) Location. All Note and Note Portfolio files and records shall be stored and maintained at the Contractor's principal place of business, or other location as designated by the Company. The Contractor shall keep in such files all correspondence received or sent regarding each Note, each Investor, and each Holder, whether upon any purchase or transfer of a Note. (b) Original Documents. The Contractor will store all original Subscription Agreements, Note Confirmations, correspondence from Investors and Holders and other materials relating to the Renewable Note Program in a reasonably secure manner at the Contractor's principal offices or such other location as may be designated by the Company. The Contractor shall exercise due care in handling and delivering the original documents and the other documents in the Note files and records. The Contractor shall not grant or allow any person an interest in original documents or rights thereunder, and all original documents in the possession of the Contractor shall be deemed to be in the possession of the Company. (c) Examination. At any time the Company and its agents and representatives may physically inspect any documents, files or other records relating to the Renewable Note Program and discuss the same with the Contractor's officers and employees. The Contractor shall supply copies of any such documents, files, or other records upon the request of the Company, as soon as is reasonably and commercially practicable at the Company's cost and expense. (d) Retention. Unless otherwise requested by the Company, or unless otherwise required by Governmental Rules, the Contractor shall retain, with respect to 9 + + + + + + each Note, for a period of 24 months from the date the Note is fully paid, all records, files and documents related to each such Note. At the end of such 24-month period, unless otherwise directed by the Company, all such items shall be transferred to the Company, or to a third party as designated by the Company, at the Company's sole cost and expense. The Contractor shall be permitted to retain copies of any such documents for its own files for its own account and at its own expense. The Contractor shall maintain the privacy of the Investors and Holders in accordance with all applicable Governmental Rules. (e) Return. If this Agreement is terminated, or otherwise at the instruction of the Company, the Contractor shall promptly deliver to the Company or its designee, as the case may be, all Note files and records (including, without limitation, copies of computerized records and servicing and other software, except as may be prohibited by any third party contract or license) related to the administration of the Notes and all monies collected by it relating to the Renewable Note Program (less any fees or expenses due to the Contractor). The Contractor shall be entitled to make and keep copies of such records, at its cost and expense. In addition to delivering such data and monies, the Contractor shall use its best efforts to effect the orderly and efficient transfer of the administration of the Notes to the Company or other party designated by the Company to assume responsibility for such administration, including, without limitation, directing Holders to remit all repurchase or other notices to the address designated by the Company. All costs of conversion and transfer of such records to the Company or another agent shall be paid by the Company. (f) Security. The parties shall take appropriate security measures to protect customer nonpublic personal information ("NPI"), as defined in the Gramm-Leach-Bliley Act of 1999, Title V, and its implementing regulations, against accidental or unlawful destruction and unauthorized access, tampering, and copying during storage in either party's computing or paper environment. Access to NPI must be restricted to only the personnel that have a business need relating to the Renewable Note Program. NPI must be stored in a secured format within all systems at both parties' location and any other locations where the data may reside. Transmission of such NPI between the parties or vendors must be done in a secure manner, in a method mutually agreed upon by both parties. Each party will engage appropriate and industry-standard measures necessary to meet information security guidelines as required by the Gramm- Leach-Bliley Act, Title V and its implementing regulations as applicable to such party to effectuate this Agreement. Section 3.03 Information to the Company. As agreed by the parties, the Contractor shall make reports and analyses available to the Company regarding the status of the Note Portfolio, the marketing results and the amount of Notes remaining available for issuance under the Registration Statement. The Contractor shall also provide interim or custom reports at the Company's request as is commercially reasonable, including, without limitation, a weekly update via email identifying new Holders by name, address and principal amount of Notes purchased. The Contractor shall also furnish statements, reports and information to the Paying Agent to the extent that the Company is required to furnish or cause to be furnished such statements, reports or information to the Paying Agent under the Paying Agent Agreement. 10 + + + + + + ARTICLE IV REPRESENTATIONS AND COVENANTS OF THE COMPANY Section 4.01 Representations, Warranties and Agreements of the Company. The Company represents and warrants to and agrees with the Contractor as follows, which representations and warranties shall be deemed to be made continuously from and as of the date hereof until this Offering is terminated and all then outstanding Notes have been paid in full or such earlier date that this Agreement has been terminated, except for those representations and warranties that address matters only as of a particular date, which representations and warranties shall be deemed to be made as of such date. (a) The Company satisfies all of the requirements for the use of Form S-1 with respect to the offer and sale of securities as contemplated by the Offering. The Commission has not issued any order preventing or suspending the use of the Registration Statement or Prospectus and no proceeding for that purpose has been instituted or, to the Company's knowledge, threatened by the Commission or the securities authority of any state or other jurisdiction. (b) The Company has full requisite power and authority to enter into this Agreement and perform the transactions contemplated hereby. This Agreement has been duly authorized, executed and delivered by the Company and is a valid and binding agreement on the part of the Company, enforceable against the Company in accordance with its terms subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general principles of equity. The performance of this Agreement and the consummation of the transactions herein contemplated will not result in a breach or violation of any of the terms and provisions of, or constitute a default under: (i) any Material Agreement to which the Company or any subsidiary is a party or by which the Company or any subsidiary or their respective properties may be bound; (ii) the articles of incorporation or bylaws of the Company, or (iii) any applicable law, order, rule, regulation, writ, injunction, judgment or decree of any court, government or governmental agency or body, domestic or foreign, having jurisdiction over the Company or any subsidiary or their respective properties. (c) No consent, approval, authorization or order of or qualification with any court, governmental agency or body, domestic or foreign, having jurisdiction over the Company or over its properties is required for the execution and delivery of this Agreement and the consummation by the Company of the transactions herein contemplated, except such as may be required under the Securities Act, the Exchange Act, the Trust Indenture Act, or under state or other securities or blue sky laws, all of which requirements have been satisfied. 11 + + + + + + Section 4.02 Covenants of the Company. The Company hereby covenants and agrees with the Contractor as follows: (a) The Company will notify the Contractor promptly of the time when the Registration Statement or any post-effective amendment to the Registration Statement has become effective or any supplement to the Prospectus has been filed and of any request by the Commission for any amendment or supplement to the Registration Statement or Prospectus or additional information. In the event that the Company files any amendment or supplement to the Registration Statement or Prospectus to which the Contractor shall reasonably object, the Contractor will be relieved of its obligations with respect to the Offering (but not the administration) of the Notes until such time as the Company shall have filed such further amendments or supplements such that the Contractor is reasonably satisfied with the Registration Statement and the Prospectus, as then amended or supplemented. (b) The Company will advise the Contractor, promptly after it shall receive notice or obtain knowledge thereof, of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement, of the suspension of the qualification of the Notes for offering or sale in any jurisdiction, or of the initiation or receipt of any specific threat of any proceeding for any such purpose. (c) The Company will furnish to the Contractor copies of the Registration Statement, the Prospectus, and all amendments and supplements to such documents, in each case as soon as available and in such quantities as the Contractor may from time to time reasonably request. (d) For such period as this Agreement may be in effect, the Company shall make available to the Contractor, as soon as the same shall be sent to its stockholders generally, copies of all annual or interim stockholder reports of the Company and will, for the same period, also furnish the Contractor one copy of any report, application or document (other than exhibits, which, however, will be furnished on the Contractor's request) filed by the Company with the Commission, The Nasdaq Stock Market or any other securities exchange. (e) At all times during the term of this Agreement, the Company shall provide all information reasonably requested by the Contractor that relates to the Renewable Note Program in a timely manner and shall use its best efforts to insure that such information is complete and accurate. (f) The Company will, during the term of this Agreement, furnish directly to the Contractor quarterly profit and loss statements and reports of the Company's cash flow as reported on the applicable quarterly report on Form 10-Q. 12 + + ARTICLE V REPRESENTATIONS AND COVENANTS OF THE CONTRACTOR; CONDITIONS Section 5.01 Representations and Warranties of the Contractor. The Contractor hereby represents and warrants to the Company as follows, which representations and warranties shall be deemed to be made continuously from and as of the date hereof until this Offering is terminated or such earlier date that this Agreement has been terminated: (a) The Contractor (i) has been duly organized, is validly existing and in good standing as a Minnesota limited liability company, (ii) has qualified to do business as a foreign corporation and is in good standing in each jurisdiction where the character of its properties or the nature of its activities (including without limitation activities of the Contractor hereunder) makes such qualification necessary, and (iii) has full power, authority and legal right to own its property, to carry on its business as presently conducted, and to enter into and perform its obligations under this Agreement. (b) The Contractor has full requisite power and authority to enter into this Agreement and perform the transactions contemplated hereby. This Agreement has been duly authorized, executed and delivered by the Contractor and is a valid and binding agreement on the part of the Contractor, enforceable against the Contractor in accordance with its terms subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general principles of equity. The performance of this Agreement and the consummation of the transactions herein contemplated will not result in a breach or violation of any of the terms and provisions of, or constitute a default under: (i) any Material Agreement to which the Contractor is a party or by which the Company or its properties may be bound; (ii) the articles of incorporation or bylaws of the Contractor, or (iii) any applicable law, order, rule, regulation, writ, injunction, judgment or decree of any court, government or governmental agency or body, domestic or foreign, having jurisdiction over the Contractor or over its properties. (c) The Contractor has obtained all governmental consents, licenses, approvals and authorizations, registrations and declarations which are necessary for the execution, delivery, performance, validity and enforceability of the Contractor's obligations under this Agreement. (d) The Contractor has operated and is operating in compliance with all authorizations, licenses, certificates, consents, permits, approvals and orders of and from all state, federal and other governmental regulatory officials and bodies necessary to conduct its business as contemplated by and described in this Agreement, all of which are, to the Contractor's knowledge, valid and in full force and effect. The 13 + + + + + + Contractor is conducting its business in compliance with all applicable Governmental Rules, laws, rules and regulations of the jurisdictions in which it is conducting business, and the Contractor is not in violation of any applicable Governmental Rules, law, order, rule, regulation, writ, injunction, judgment or decree of any court, government or governmental agency or body, domestic or foreign, having jurisdiction over the Contractor or over its properties. (e) The Contractor maintains insurance, which is in full force and effect, with insurers of recognized financial responsibility of the types and in the amounts generally deemed adequate for its business and, to the best of the Contractor's knowledge, in line with the insurance maintained by similar companies and businesses; and the Contractor has no reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not materially and adversely affect the financial condition or business operations of the Contractor. Section 5.02 Covenants of the Contractor. The Contractor hereby covenants to the Company as follows, which covenants shall be deemed in force unless and until this Agreement is terminated as provided herein: (a) The Contractor shall punctually perform and observe all of its obligations and agreements contained in this Agreement. (b) The Contractor shall conduct its business in compliance with all applicable Governmental Rules, and its activities shall not violate any governmental rules relating to the registration or the activities of securities brokers and dealers. To the extent that this covenant to comply with all Governmental Rules conflicts with any other covenant contained in this Agreement, the covenant to comply with all Governmental Rules shall control. (c) Except as provided in this Agreement, the Contractor shall not take any action, or permit any action to be taken by others, which would excuse any person from any of its covenants or obligations under any Note, or under any other instrument related to a Note, or which would result in the amendment, hypothecation, subordination, termination or discharge of, or impair the validity or effectiveness of, any Note or any such instrument or any right in favor of the Company in a Note or such instrument, without the written consent of the Company. (d) The Contractor shall not assign this Agreement or any of its rights, powers, duties or obligations hereunder without the express prior written consent of the Company, which shall not be unreasonably withheld. (e) At all times during the term of this Agreement, the Contractor shall provide all information relating to the Offering, the Renewable Note Program or the Note Portfolio reasonably requested by the Company in a timely manner and shall use its best efforts to insure that such information is complete and accurate in all material respects. 14 + + + + + + (f) The Contractor shall take such additional action as is reasonably requested by the Company in order to carry out the purposes of this Agreement. Such reasonable additional action includes, but is not limited to, cooperating with Company in verification of Contractor's compliance, such as by providing copies of certificates of insurance and of other books and records of Contractor, and by permitting inspection of the premises, books and records of Contractor. ARTICLE VI CONDITIONS Section 6.01 Conditions of the Contractor's Obligations. The obligation of the Contractor to administer the Offering on a best efforts basis as provided herein shall be subject to the accuracy of the representations and warranties of the Company, to the performance by the Company of its obligations hereunder, and to the satisfaction of the following additional conditions: (a) The Registration Statement shall be effective, and no stop order suspending the effectiveness thereof shall have been issued and no proceedings for that purpose shall have been initiated or, to the knowledge of the Company, or the Contractor, threatened by the Commission or any state securities commission or similar regulatory body. Any request of the Commission for additional information (to be included in the Registration Statement or the Prospectus or otherwise) shall have been complied with to the reasonable satisfaction of the Contractor and the Contractor's counsel. (b) The Contractor shall not have advised the Company of its reasonable belief that the Registration Statement or Prospectus, or any amendment thereof or supplement thereto, contains any untrue statement of a fact which is material or omits to state a fact which is material and is required to be stated therein or is necessary to make the statements contained therein, in light of the circumstances under which they were made, not misleading, or, if the Contractor has so advised the Company, the Company shall not have taken reasonable action to investigate such belief and, where appropriate, amend the Registration Statement or supplement the Prospectus so as to correct such statement or omission or effect such compliance. (c) The Indenture shall have been duly authorized, executed and delivered by the Company and duly qualified under the Trust Indenture Act. (d) All corporate proceedings and other legal matters in connection with this Agreement, the form of Registration Statement and the Prospectus, and the registration, authorization, issue, sale and delivery of the Notes shall have been reasonably satisfactory to the Contractor's counsel, in all material respects, and the Contractor's counsel shall have been furnished with such papers and information as it may reasonably have requested to enable it to pass upon the matters referred to in this Section. 15 + + + + + + ARTICLE VII INDEMNIFICATION AND CONTRIBUTION Section 7.01 The Company's Indemnification of the Contractor. The provisions of Exhibit A hereto, entitled "Responsibility of and Indemnification by Agency" are hereby incorporated herein by reference. Section 7.02 The Contractor's Indemnification of the Company. The provisions of Exhibit A hereto, entitled "Responsibility of and Indemnification by Company" are hereby incorporated herein by reference. Section 7.03 Intellectual Property Infringement. The Contractor agrees that it shall defend, indemnify and hold harmless, at its own expense, all suits and claims against the Company and any officers, directors, employees and affiliates of the Company (collectively, the "Company Indemnified Parties"), for infringement or violation of any patent, trademark, copyright, trade secret or other intellectual property rights of any third party that relates to this Agreement or the Offering, or servicing of the Notes. The Contractor agrees that it shall pay all sums, including without limitation, reasonable attorneys' fees and other costs incurred by the Company, in defense of, by final judgment or decree, or in settlement of any suit or claim asserted or assessed against, or incurred by, any of the Company Indemnified Parties on account of such infringement or violation, provided that the Company Indemnified Parties involved shall cooperate in all reasonable respects with the Contractor and its attorneys in the investigation, trial and defense of such lawsuit or action and any appeal arising therefrom; provided, however, that the Company Indemnified Parties may, at their own cost, participate in the investigation, trial and defense of such lawsuit or action and any appeal arising therefrom. The parties shall cooperate with each other in any notifications to insurers. Section 7.04 Confidentiality. The parties to this Agreement acknowledge and agree that all information, whether oral or written, concerning a disclosing party and its business operations, prospects and strategy, which is furnished by the disclosing party to the other party is deemed to be confidential, restricted and proprietary to the disclosing party (the "Proprietary Information"). Proprietary Information supplied shall not be disclosed, used or reproduced in any form except as required to accomplish the intent of, and in accordance with the terms of, this Agreement and the Indenture. The receiving party shall provide the same care to avoid disclosure or unauthorized use of Proprietary Information as it provides to protect its own proprietary information, including without limitation retaining Proprietary Information in a secure place with limited access, but in no event shall the receiving party fail to use reasonable care under the circumstances to avoid disclosure or unauthorized use of Proprietary Information. Unless otherwise specified in writing, all Proprietary Information shall (i) remain the property of the disclosing party, (ii) be used by the receiving party only for the purpose for which it was intended under this Agreement and the Indenture, and (iii) together with all copies of such information, be returned to the disclosing party or destroyed upon request of the disclosing party, and, in any event, upon termination of this Agreement, except as otherwise provided or contemplated by this Agreement, including Sections 3.02(b) and (e) and 8.05 hereof. Proprietary Information does not include information which is: (a) published or included as disclosure within the Registration Statement or otherwise available in the public domain through no fault of the receiving party; (b) lawfully received from a third party having rights in the information without 16 + + + + + + restriction of the third party's right to disseminate the information and without notice of any restriction against its further disclosure; or (c) produced under order of a court of competent jurisdiction or other similar requirement of a governmental agency or authority, so long as the party required to disclose the information provides the other party with prior notice of such order or requirement and its cooperation to the extent reasonable in preserving its confidentiality. Because damages may be difficult to ascertain, and without limiting any other rights and remedies specified herein, an injunction may be sought against the party who has breached or threatened to breach this Section. ARTICLE VIII TERM AND TERMINATION Section 8.01 Effective Date of this Agreement. This Agreement shall become effective as of the date first set forth above, and shall continue in full force and effect until terminated as provided below. Section 8.02 Termination. The Company or the Contractor may terminate this Agreement at any time in whole or in part as more specifically provided below, and in such case, the Contractor will be paid fees incurred up to the date of such termination plus its expenses accrued as of such date within 30 days of such termination. The Company will have the ability to terminate this Agreement by giving 60 days' prior written notice to the Contractor. The Contractor will have the ability to terminate this Agreement by giving 90 days' prior written notice to the Company. Section 8.03 Termination Without Termination of Offering. Anything to the contrary notwithstanding, the termination of this Agreement shall not prevent the Company from commencing or cause the Company to terminate the Offering. In the event this Agreement is terminated without a termination of the Offering, then the Company, or its agents, shall be entitled to use all materials developed by the Contractor related to the Notes as provided elsewhere herein. ARTICLE IX MISCELLANEOUS Section 9.01 Survival. The respective indemnity and contribution agreements of the Company and the Contractor set forth herein and the respective representations, warranties, covenants and agreements of the Company and the Contractor set forth herein, shall remain operative and in full force and effect, regardless of any investigation made by, or on behalf of, the Contractor, the Company, any of its officers and directors, or any controlling person referred to in Article VII and shall survive the sale of the Notes and any termination or cancellation of this Agreement. Any successor of any party or of any such controlling person, or any legal representative of such controlling person, as the case may be, shall be entitled to the benefit of the respective indemnity and contribution agreements. Section 9.02 Notices. All notices or communications hereunder, except as herein otherwise specifically provided, shall be in writing and shall be mailed, delivered or transmitted by any standard form of telecommunication, as follows: 17 + + + + + + + + Section 9.03 Successors and Assigns; Transfer. This Agreement shall inure to the benefit of and be binding upon the Contractor and the Company and their respective successors and permitted assigns. Nothing expressed in this Agreement is intended or shall be construed to give any person or corporation, other than the parties hereto, their respective successors and assigns, any legal or equitable right, remedy or claim under, or in respect of, this Agreement or any provision herein contained; this Agreement and all conditions and provisions hereof being intended to be and being for the sole and exclusive benefit of the parties hereto and their respective executors, administrators, successors, and for the benefit of no other person or corporation. Neither party may assign its rights and obligations under this Agreement without the written consent of the other party. Section 9.04 Cumulative Remedies. Unless otherwise expressly provided herein, the remedies of the parties provided for herein shall be cumulative and concurrent, and may be pursued singularly, successively or together, at the sole discretion of the party for whose benefit such remedy is provided, and may be exercised as often as occasion therefor shall arise. Section 9.05 Attorneys' Fees. In the event of any action to enforce or interpret this Agreement, the prevailing party shall be entitled to recover reasonable attorneys' fees and costs, whether or not such action proceeds to judgment. 18 + + If to the Contractor, to: + + + +Redwater LLC 5400 Opportunity Court Suite 160 Minneapolis, Minnesota 55343 Attention: K. Edward Elverud Tel. (952) 345-3385 If to the Company, to: + + + + Twin Cities Power Holdings, LLC 16233 Kenyon Avenue Suite 210 Lakeville, Minnesota 55044 Attn: Chief Executive Officer Tel. 952-431-0400 with a copy to: + + + +Leonard, Street and Deinard 150 South Fifth Street — Suite 2300 Minneapolis, Minnesota 55402 Attention: Mark S. Weitz Tel. 612-335-1517 + + + + + + Section 9.06 Entire Agreement. Except as otherwise expressly provided herein, this Agreement constitutes the entire agreement of the parties hereto with respect to the matters addressed herein and supersedes all prior or contemporaneous contracts, promises, representations, warranties and statements, whether written or oral (including, but not limited to, the Proposal), with respect to such matters. Section 9.07 Choice of Law; Venue. This Agreement shall be governed by and construed in accordance with the laws of the State of Minnesota, without regard to conflict of law principles. Any dispute shall be heard in the courts of the state of Minnesota. Section 9.08 Rights to Investor Lists. The parties acknowledge that the Offering will produce a list of investors that purchase Notes, a list of prospects that respond to advertisements, but do not purchase any Notes, a list of former investors who redeemed their Notes, and a list of former investors whose Notes the Company redeemed. Subject to any privacy laws, both the Company and the Contractor will be able to use these lists for their own business purposes as long as doing so does not interfere with the marketing, sale or administration of the Notes. Section 9.09 Waiver; Subsequent Modification. Except as expressly provided herein, no delay or omission by any party in insisting upon the strict observance or performance of any provision of this Agreement, or in exercising any right or remedy, shall be construed as a waiver or relinquishment of such provision, nor shall it impair such right or remedy, and no waiver by any party or any failure or refusal of the other party to comply with its obligations under this Agreement shall be deemed a waiver of any other or subsequent failure or refusal to so comply by such other party. No waiver or modification of the terms hereof shall be valid unless in writing and signed by the party to be charged, and then only to the extent therein set forth. Section 9.10 Severability. If any term or provision of this Agreement or application thereof to any person or circumstance shall, to any extent, be found by a court of competent jurisdiction to be invalid or unenforceable, the remainder of this Agreement, or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby and each term or provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. Section 9.11 Joint Preparation. The preparation of this Agreement has been a joint effort of the parties and the resulting document shall not, solely as a matter of judicial construction, be construed more severely against one of the parties than the other. Section 9.12 Captions. The title of this Agreement and the headings of the various articles, section and subsections have been inserted only for the purpose of convenience, are not part of this Agreement and shall not be deemed in any manner to modify, explain, expand or restrict any of the provisions of this Agreement. Section 9.13 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one instrument. Section 9.14 Third Party Contractors. In the event that the Company engages a third party to perform any of the obligations of the Contractor under this Agreement, the Company 19 + + + + + + shall provide written notice to the Contractor of such engagement, the Contractor shall thereafter be relieved of any such obligations for which the third party was engaged. [Remainder of page intentionally left blank] 20 + + + + + + IN WITNESS WHEREOF, this Outsourcing Agreement is hereby entered into by the undersigned parties as of the date first set forth above. + + 21 + +Exhibit A Media Services The following describes the advisory services to be provided by Redwater LLC ("Contractor") to Twin Cities Power Generation ("Company") in connection with the administration of Company's renewable, unsecured, subordinated notes (the "Notes"), as more specifically defined in, and pursuant to the terms of, the Outsourcing Agreement to which this description is an exhibit. 1. Agent Services. Agent will perform the following services for Company: · Acting on the study, analysis and knowledge of the product described above, formulate and recommend a media plan to the Company and coordinate the execution of such a plan as directed by the Company. · Check and verify insertions, displays, broadcasts or other means used. · Audit invoices for space and time and other marketing services performed on Company's behalf. · Coordinate creative and copy development, direct mail services, literature fulfillment, commercial printing, list management, list brokering, efficiency analysis and other similar activities. 2. General Provisions. + + TWIN CITIES POWER HOLDINGS, LLC By: + + Name: + + Title: + + + + REDWATER LLC. By: + + Name: K. Edward Elverud Title: Manager + + + + + + Approval of Expenditures: Contractor agrees to secure Company's written approval of all expenditures in connection with Company's plans. Cancellation of Plans: Company reserves the right to modify, reject, cancel or stop any and all plans, schedules or work in progress. In such event Contractor shall take reasonable steps to carry out Company's instructions as promptly as practicable. Company agrees to assume liability for all commitments made by Contractor on its behalf, and to reimburse Contractor for any losses (including cancellation penalties) that Contractor may sustain derived therefrom and for all expenses incurred in connection with Company approved plans on its authorization, and to pay Contractor any service charges relating thereto, in accordance with the provisions hereof. Failure of Suppliers to Perform: Contractor will endeavor to the best of its knowledge and ability guard against any loss to Company through failure of media or suppliers to properly execute their commitments, but shall not be held responsible for any failure on their part. Confidentiality: Contractor acknowledges its responsibility to use all reasonable efforts to preserve the confidentiality of any proprietary or confidential information or data developed by Contractor on behalf of Company or disclosed by Company to Contractor. 22 + + + + + + Responsibility of and Indemnification by Agency: Contractor agrees to indemnify and hold Company, its officers, directors, agents and employees harmless from and against any claims, liabilities, losses, costs, expenses, or the like, including reasonable attorneys' fees, incurred in respect to any material breach by Contractor hereof or Contractor's negligence and/or intentional wrongdoing in connection with the services. Responsibility of and Indemnification by Company: Company agrees to indemnify and hold Contractor, its officers, managers, directors, agents and employees harmless from and against any claims, liabilities, losses, costs, expenses, or the like, including reasonable attorneys' fees, incurred in respect to any material breach by Company of this Agreement or Company's negligence and/or intentional wrongdoing in connection with the services. Company shall be responsible for the accuracy, completeness and propriety of information concerning its products and services that it furnishes to Contractor in connection with the performance of the services. 3. Expenses and Fees. · Company agrees to pay or prepay advertising, graphic design and printing expenses either directly to the respective vendors or to the Contractor as required. The Company will pay the Contractor the difference between the published gross rates and the net rates for all advertisements, graphic design services or printing services or an equivalent mark-up. All Contractor fees will be subject to the approval of the Company. · Refunds: Contractor shall refund or credit Company any other refunds received in connection with advertisements. · Other Marketing Expenses. Subject to its prior approval, the Company agrees to pay Contractor for all reasonable out of pocket, non-media charge marketing expenses related to the development and production of all direct marketing and promotional materials. 5. Termination. · Period of Services: The services described herein to be provided by Agency shall begin upon execution and delivery of the Outsourcing Agreement and shall continue until termination of Contractor's activities to administer the Notes thereunder. · Payment for Purchases and Work Done: Any materials, services, etc. Contractor has committed to purchase for Company's account, or with Company's approval (or any uncompleted work previously approved by Company either specifically or as part of a plan) prior to termination of the Services shall be paid for by Company in accordance with the provisions of this Agreement. 23 + + + + + + Exhibit B Service Standards Initial Instructions of Company to Contractor pursuant to that certain Outsourcing Agreement dated as of , 2012, between Twin Cities Power Holdings, LLC and Redwater LLC. Geographical Limitations. Contractor shall not communicate with Investors resident in any state that is identified in the then-current Prospectus as a state in which the Notes are not offered, other than to communicate, in substance, that the Notes are not offered to persons resident in such states. The initial list of such states is as follows, but the Company may, in its discretion, amend such list by filing an amended Prospectus or a supplement to Prospectus: . [TBD] 24 \ No newline at end of file diff --git a/full_contract_txt/ATENTOSA_07_06_2020-EX-99.1-JOINT FILING AGREEMENT.txt b/full_contract_txt/ATENTOSA_07_06_2020-EX-99.1-JOINT FILING AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..c4b8cc04ae43d72c46f3e12c609037cc8360e76b --- /dev/null +++ b/full_contract_txt/ATENTOSA_07_06_2020-EX-99.1-JOINT FILING AGREEMENT.txt @@ -0,0 +1,29 @@ +Exhibit 99.1 + +JOINT FILING AGREEMENT + +Pursuant and subject to Rule 13d-1(k)(1) promulgated under the Securities Exchange Act of 1934, as amended, the undersigned hereby agree to the joint filing of the Statement on Schedule 13D to which this Joint Filing Agreement is attached, and any amendments thereto may be filed without the necessity of filing additional joint filing agreements. This Joint Filing Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument. + +The execution and filing of this agreement shall not be construed as an admission that the below-named parties are a group or have acted as a group. + +Dated: July 6, 2020 + +HPS INVESTMENT PARTNERS, LLC /s/ John Madden Name: John Madden Title: Authorized Signatory HPS MEZZANINE PARTNERS II, LLC By: HPS Investment Partners, LLC, its sole member /s/ John Madden Name: John Madden Title: Authorized Signatory + +[Signature Page to Joint Filing Agreement] + + + + + +HPS MEZZANINE PARTNERS II OFFSHORE GP, L.P. By: HPS Partners Holdings II, LLC, its general partner /s/ John Madden Name: John Madden Title: Authorized Signatory MEZZANINE PARTNERS - OFFSHORE INVESTMENT MASTER FUND II, L.P. By: HPS Mezzanine Partners II, LLC, its investment manager By: HPS Investment Partners, LLC, its sole member /s/ John Madden Name: John Madden Title: Authorized Signatory MEZZANINE PARTNERS II OFFSHORE LUX S.À R.L /s/ John Madden Name: John Madden Title: Authorized Signatory MEZZANINE PARTNERS II OFFSHORE LUX S.À R.L II /s/ John Madden Name: John Madden Title: Authorized Signatory + +[Signature Page to Joint Filing Agreement] + + + + + +HPS MEZZANINE PARTNERS II GP, L.P. By: HPS Partners Holdings II, LLC, its general partner /s/ John Madden Name: John Madden Title: Authorized Signatory MEZZANINE PARTNERS II, L.P. By: HPS Mezzanine Partners II Offshore GP, L.P., its general partner By: HPS Partners Holdings II, LLC, its general partner /s/ John Madden Name: John Madden Title: Authorized Signatory MEZZANINE PARTNERS II ONSHORE LUX S.À R.L /s/ John Madden Name: John Madden Title: Authorized Signatory MEZZANINE PARTNERS II ONSHORE LUX S.À R.L II /s/ John Madden Name: John Madden Title: Authorized Signatory + +[Signature Page to Joint Filing Agreement] \ No newline at end of file diff --git a/full_contract_txt/ATHENSBANCSHARESCORP_11_02_2009-EX-1.2-AGENCY AGREEMENT , 2009.txt b/full_contract_txt/ATHENSBANCSHARESCORP_11_02_2009-EX-1.2-AGENCY AGREEMENT , 2009.txt new file mode 100644 index 0000000000000000000000000000000000000000..eb390da1dd39539225db2a535b861fe359917d8c --- /dev/null +++ b/full_contract_txt/ATHENSBANCSHARESCORP_11_02_2009-EX-1.2-AGENCY AGREEMENT , 2009.txt @@ -0,0 +1,677 @@ +Exhibit 1.2 + +ATHENS BANCSHARES CORPORATION up to Shares (subject to increase up to shares) COMMON SHARES ($.01 Par Value) Subscription Price $10.00 Per Share AGENCY AGREEMENT , 2009 + +Keefe, Bruyette & Woods, Inc. Investment Banking 10 South Wacker Drive, Suite 3400 Chicago, Illinois 60606 + +Ladies and Gentlemen: + +Athens Bancshares Corporation, a Tennessee corporation (the "Company"), and Athens Federal Community Bank, a federal savings bank located in Athens, Tennessee (the "Bank") (references to the "Bank" include the Bank in mutual or stock form as indicated by the context), the deposit accounts of which are insured by the Federal Deposit Insurance Corporation ("FDIC"), hereby confirm their agreement with Keefe, Bruyette & Woods, Inc. (the "Agent") as follows: + +Section 1. The Offering. The Bank, in accordance with its plan of conversion adopted by its Board of Directors (the "Plan"), intends to convert from a federally-chartered mutual savings bank to a federal stock savings bank (the "Conversion"), and issue all of its issued and outstanding capital stock to the Company. The Conversion will be accomplished pursuant to federal law and the rules and regulations of the Office of Thrift Supervision (the "OTS"). Pursuant to the Plan, the Company will offer and sell up to shares (subject to increase up to shares) of its common stock, $.01 par value per share (the "Shares" or "Common Shares"), in a subscription offering (the "Subscription Offering") to (1) depositors of the Bank with Qualifying Deposits (as defined in the Plan) as of March 31, 2008 ("Eligible Account Holders"), (2) the employee stock ownership plan established by either the Bank or the Company (the "ESOP"), (3) depositors of the Bank with Qualifying Deposits as of September 30, 2009 ("Supplemental Eligible Account Holders"), and (4) other depositor and borrower members of the Bank as defined in the Plan. Subject to the prior subscription rights of the above-listed parties, the Company may offer for sale in a community offering (the "Community Offering" and when referred to together with or subsequent to the Subscription Offering, the "Subscription and Community Offering") the Shares not subscribed for or ordered in the Subscription Offering to members of the general public to whom a copy of the Prospectus (as hereinafter defined) is delivered with a preference given first to natural persons who are residents of Blount, Bradley, Hamilton, Knox, Loudon, McMinn, Meras, Monroe and Polk Counties in Tennessee. It is anticipated that shares not subscribed for in the Subscription and Community Offering may be offered to certain members of the general public on a best efforts basis through a selected dealers agreement (the "Syndicated Community Offering") (the Subscription Offering, Community Offering and Syndicated Community Offering are collectively referred to as the "Offering"). It is acknowledged that the purchase of Shares in the Offering is subject to the maximum and minimum purchase limitations as described in the Plan and that the Company may reject, in whole or in part, any orders received in the Community Offering or Syndicated Community Offering. + +In connection with the Conversion and pursuant to the terms of the Plan as described in the Prospectus, immediately following the consummation of the Conversion, subject to the approval of the Bank's depositors and compliance with certain conditions as may be imposed by regulatory authorities, the Company will contribute $100,000 and 100,000 shares of Common Stock to the Athens Federal Foundation (the "Foundation") such shares hereinafter being referred to as the ("Foundation Shares"). + + + + + + + +The Company has filed with the Securities and Exchange Commission (the "Commission") a registration statement on Form S-1 (File No. 333- ) (the "Registration Statement"), containing a prospectus relating to the Offering, for the registration of the Shares under the Securities Act of 1933 (the "1933 Act"), and has filed such amendments thereof and such amended prospectuses as may have been required to the date hereof. The term "Registration Statement" shall include any documents incorporated by reference therein and all financial schedules and exhibits thereto, as amended, including post-effective amendments. The prospectus, as amended, on file with the Commission at the time the Registration Statement initially became effective is hereinafter called the "Prospectus," except that if any Prospectus is filed by the Company pursuant to Rule 424(b) or (c) of the rules and regulations of the Commission under the 1933 Act (the "1933 Act Regulations") differing from the prospectus on file at the time the Registration Statement initially became effective, the term "Prospectus" shall refer to the prospectus filed pursuant to Rule 424(b) or (c) from and after the time said prospectus is filed with the Commission. + +In accordance with Title 12, Part 563b of the Code of Federal Regulations (the "Conversion Regulations"), the Bank has filed with the OTS an Application For Conversion on Form AC (the "Form AC"), including the Prospectus and the Conversion Valuation Appraisal Report prepared by Keller & Company, Inc. (the "Appraisal") and has filed such amendments thereto as may have been required by the OTS. The Form AC has been approved by the OTS and the related Prospectus has been authorized for use by the OTS. In addition, the Company has filed with the OTS its Application H-(e)l-S (the "Holding Company Application") to become a savings and loan holding company under the Home Owners' Loan Act, as amended ("HOLA") and the regulations promulgated thereunder (the "Control Act Regulations"). + +Section 2. Retention and Compensation of Agent. Subject to the terms and conditions herein set forth, the Company and the Bank hereby appoint the Agent as their exclusive financial advisor and marketing agent (i) to utilize its best efforts to solicit subscriptions for Common Shares and to advise and assist the Company and the Bank with respect to the Company's sale of the Shares in the Offering and (ii) to participate in the Offering in the areas of market making and in syndicate formation (if necessary). + +On the basis of the representations, warranties, and agreements herein contained, but subject to the terms and conditions herein set forth, the Agent accepts such appointment and agrees to consult with and advise the Company and the Bank as to the matters set forth in the letter agreement, dated June 9, 2009, between the Bank and the Agent (a copy of which is attached hereto as Exhibit A) (the "Engagement Letter"). It is acknowledged by the Company and the Bank that the Agent shall not be required to purchase any Shares or be obligated to take any action which is inconsistent with all applicable laws, regulations, decisions or orders. + +The obligations of the Agent pursuant to this Agreement shall terminate upon termination of the Offering, but in no event later than 45 days after the completion of the Subscription Offering (the "End Date"). All fees or expenses due to the Agent but unpaid will be payable to the Agent in next day funds at the earlier of the Closing Date (as hereinafter defined) or the End Date. In the event the Offering is extended beyond the End Date, the Company and the Agent may agree to renew this Agreement under mutually acceptable terms. + +In the event the Company is unable to sell a minimum of Shares within the period herein provided, this Agreement shall terminate and the Company shall refund to any persons who have subscribed for any of the Shares the full amount which it may have received from them plus accrued interest, as set forth in the Prospectus; and none of the parties to this Agreement shall have any obligation to the other parties hereunder, except as set forth in this Section 2 and in Sections 7, 9 and 10 hereof. In the event the Offering is terminated for any reason not attributable to the action or inaction of the Agent, the Agent shall be paid the fees due to the date of such termination pursuant to subparagraphs (a) and (d) below. + +2 + + + + + + + +The Agent shall receive the following compensation for its services hereunder: + +(a) A management fee of $30,000 payable in four consecutive monthly installments of $7,500 each commencing with the execution of the Engagement Letter. This fee shall be deemed to have been earned when due and shall be non-refundable. + +(b) A success fee upon completion of the Offering of 1.125% of the aggregate purchase price of the Common Shares sold in the Subscription Offering and Community Offering excluding shares purchased by the Bank's officers, directors, or employees (or members of their immediate family), any ESOP, tax-qualified or stock-based compensation plans (except IRAs) or similar plan created by the Bank or the Company for some or all of its directors or employees, or contributed to any charitable foundation established by the Bank in connection with the Conversion. In no event shall the success fee paid for the sale of Common Stock in the Subscription and Community Offering be less than $200,000. The management fee will be applied against the first success fee. + +(c) If any of the Common Shares remain available after the Subscription Offering, at the request of the Company, the Agent will seek to form a syndicate of registered broker-dealers ("Selected Dealers") to assist in the sale of such Common Shares on a best efforts basis, subject to the terms and conditions set forth in the selected dealers agreement. The Agent will endeavor to distribute the Common Shares among the Selected Dealers in a fashion which best meets the distribution objectives of the Bank and the Plan. The Agent will be paid a fee not to exceed 5.5% of the aggregate Purchase Price of the Shares sold in the Syndicated Community Offering. The Agent will pass onto the Selected Dealers who assist in the Syndicated Community Offering an amount competitive with gross underwriting discounts charged at such time for comparable amounts of stock sold at a comparable price per share in a similar market environment. Fees with respect to purchases effected with the assistance of Selected Dealers other than the Agent shall be transmitted by the Agent to such Selected Dealers. The decision to utilize Selected Dealers will be made by the Company upon consultation with the Agent. + +(d) The Company and the Bank shall reimburse the Agent for reasonable out-of-pocket expenses, including costs of travel, meals and lodging, photocopying, telephone, facsimile and couriers. The Company and the Bank will reimburse the Agent for the fees and expenses of the Agent's counsel which will not exceed $50,000. The Company will bear the expenses of the Offering customarily borne by issuers including, without limitation, regulatory filing fees, SEC, "Blue Sky," and FINRA filing and registration fees; the fees of the Company's accountants, attorneys, appraiser, transfer agent and registrar, printing, mailing and marketing and syndicate expenses associated with the conversion; and the fees set forth under this Section 2; and any fees for Blue Sky legal work. + +Full payment of the Agent's actual and accountable expenses, advisory fees and compensation shall be made in next day funds on the earlier of the Closing Date or a determination by the Bank to terminate or abandon the Offering. The payment of such expenses assume no unusual circumstances or delays, or a re-solicitation in connection with the subscription and community offering. The Company and the Bank acknowledge that such expense cap may be increased by mutual consent, including in the event of a material delay in the Offering which would require an update of the financial information in tabular form to reflect a period later than that set forth in the original filing. + +Section 3. Sale and Delivery of Shares. If all conditions precedent to the consummation of the Conversion, including without limitation, the sale of all Shares required by the Plan to be sold, are satisfied, the Company agrees to issue, or have issued, the Shares sold in the Offering and to release for delivery certificates for such Shares on the Closing Date against payment to the Company by any means authorized by the Plan; provided, however, that no funds shall be released to the Company until the conditions specified in Section 8 hereof shall have been complied with to the reasonable satisfaction of the Agent and its counsel. The release of Shares against payment therefor shall be made on a date and at a place acceptable to the Company, the Bank and the Agent. Certificates for shares shall be delivered + +3 + + + + + + + +directly to the purchasers in accordance with their directions. The date upon which the Company shall release or deliver the shares sold in the Offering, in accordance with the terms herein, is called the "Closing Date." + +Section 4. Representations and Warranties of the Company and the Bank. The Company and the Bank jointly and severally represent and warrant to and agree with the Agent as follows: + +(a) The Registration Statement which was prepared by the Company and the Bank and filed with the Commission has been declared effective by the Commission, no stop order has been issued with respect thereto and no proceedings therefor have been initiated or, to the knowledge of the Company or the Bank, threatened by the Commission. At the time the Registration Statement, including the Prospectus contained therein (including any amendment or supplement), became effective, at the Applicable Time (as defined in Section 4(c) hereof) and at the Closing Date, the Registration Statement complied and will comply in all material respects with the requirements of the 1933 Act and the 1933 Act Regulations and the Registration Statement, including the Prospectus contained therein (including any amendment or supplement thereto), and any information regarding the Company contained in Sales Information (as such term is defined in Section 9(a) hereof) authorized by the Company for use in connection with the Offering, did not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and at the time any Rule 424 (b) or (c) Prospectus is filed with the Commission and at the Closing Date referred to in Section 2 hereof, the Prospectus (including any amendment or supplement thereto) and any information regarding the Company contained in Sales Information (as such term is defined in Section 9(a) hereof) authorized by the Company for use in connection with the Offering will contain all statements that are required to be stated therein in accordance with the 1933 Act and the 1933 Act Regulations and will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; provided, however, that the representations and warranties in this Section 4(a) shall not apply to statements or omissions made in reliance upon and in conformity with written information furnished to the Company by the Agent or its counsel expressly regarding the Agent for use in the Prospectus under the caption "The Conversion and Stock Offering — Marketing Arrangements" or statements in or omissions from any Sales Information or information filed pursuant to state securities or blue sky laws or regulations regarding the Agent. + +(b) At the time of filing the Registration Statement relating to the offering of the Shares and at the date hereof, the Company was not, and is not, an ineligible issuer, as defined in Rule 405 of the 1933 Act Regulations. At the time of the filing of the Registration Statement and at the time of the use of any issuer free writing prospectus, as defined in Rule 433(h) of the 1933 Act Regulations, the Company met the conditions required by Rules 164 and 433 of the 1933 Act Regulations for the use of a free writing prospectus. If required to be filed, the Company has filed any issuer free writing prospectus related to the offered Shares at the time it is required to be filed under Rule 433 of the 1933 Act Regulations and, if not required to be filed, will retain such free writing prospectus in the Company's records pursuant to Rule 433(g) of the 1933 Act Regulations and if any issuer free writing prospectus is used after the date hereof in connection with the offering of the Shares the Company will file or retain such free writing prospectus as required by Rule 433 of the 1933 Act Regulations. + +(c) As of the Applicable Time, neither (i) the Issuer-Represented General Free Writing Prospectus(es) issued at or prior to the Applicable Time and the Statutory Prospectus, all considered together (collectively, the "General Disclosure Package"), nor (ii) any individual Issuer-Represented Limited-Use Free Writing Prospectus, when considered together with the General Disclosure Package, included any untrue statement of a material fact or omitted to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The preceding sentence does not apply to statements in or omissions from any Prospectus included in the Registration Statement relating to the offered Securities or any Issuer-Represented Free + +4 + + + + + + + +Writing Prospectus based upon and in conformity with written information furnished to the Company by the Agent specifically for use therein. As used in this paragraph and elsewhere in this Agreement: + +1. "Applicable Time" means each and every date when a potential purchaser submitted a subscription or otherwise committed to purchase Securities. + +2. "Statutory Prospectus", as of any time, means the Prospectus relating to the offered Shares that is included in the Registration Statement relating to the offered Shares immediately prior to the Applicable Time, including any document incorporated by reference therein. + +3. "Issuer-Represented Free Writing Prospectus" means any "issuer free writing prospectus," as defined in Rule 433(h) of the 1933 Act Regulations, relating to the offered Shares in the form filed or required or, if not required to be filed, in the form retained in the Company's records pursuant to Rule 433(g) under the 1933 Act Regulations. The term does not include any writing exempted from the definition of prospectus pursuant to clause (a) of Section 2(a)(10) of the 1933 Act, without regard to Rule 172 or Rule 173 of the 1933 Act Regulations. + +4. "Issuer-Represented General Free Writing Prospectus" means any Issuer-Represented Free Writing Prospectus that is intended for general distribution to prospective investors. + +5. "Issuer-Represented Limited-Use Free Writing Prospectus" means any Issuer-Represented Free Writing Prospectus that is not an Issuer- Represented General Free Writing Prospectus. The term Issuer-Represented Limited-Use Free Writing Prospectus also includes any "bona fide electronic road show," as defined in Rule 433 of the 1933 Act Regulations, that is made available without restriction pursuant to Rule 433(d)(8)(ii) of the 1933 Act Regulations or otherwise, even though not required to be filed with the Commission. + +6. "Permitted Free Writing Prospectus" means any free writing prospectus as defined in Rule 405 of the 1933 Act Regulations that is consented to by the Company, the Bank and the Agent. + +(d) Each Issuer-Represented Free Writing Prospectus, as of its date of first use and at all subsequent times through the completion of the Offering and sale of the offered Shares or until any earlier date that the Company notified or notifies the Agent (as described in the next sentence), did not, does not and will not include any information that conflicted, conflicts or will conflict with the information contained in the Registration Statement, including any document incorporated by reference therein that has not been superseded or modified. If at any time following the date of first use of an Issuer-Represented Free Writing Prospectus there occurred or occurs an event or development as a result of which such Issuer-Represented Free Writing Prospectus conflicted or would conflict with the information contained in the Registration Statement relating to the offered Shares or included or would include an untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances prevailing at that subsequent time, not misleading, the Company has notified or will notify promptly the Agent so that any use of such Issuer-Represented Free-Writing Prospectus may cease until it is amended or supplemented and the Company has promptly amended or will promptly amend or supplement such Issuer-Represented Free Writing Prospectus to eliminate or correct such conflict, untrue statement or omission. The foregoing two sentences do not apply to statements in or omissions from any Issuer-Represented Free Writing Prospectus based upon and in conformity with written information furnished to the Company by the Agent specifically for use therein. + +(e) The Form AC, which was prepared by the Company and the Bank and filed with the OTS, has been approved by the OTS and the related Prospectus and proxy statement to be delivered to members of the Bank have been authorized for use by the OTS and the Form AC complied in all material respects with the Conversion Regulations. No order has been issued by the OTS or the FDIC preventing or + +5 + + + + + + + +suspending the use of the Prospectus or the proxy statement, and no action by or before any such government entity to revoke any approval, authorization or order of effectiveness related to the Offering is pending or threatened. At the time of the approval of the Form AC, including the Prospectus (including any amendment or supplement thereto) by the OTS and at all times subsequent thereto until the Closing Date, the Form AC, including the Prospectus (including any amendment or supplement thereto), will comply in all material respects with the Conversion Regulations, except to the extent waived or otherwise approved by the OTS. The Form AC, including the Prospectus (including any amendment or supplement thereto), does not include any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; provided, however, that the representations and warranties in this Section 4(e) shall not apply to statements or omissions made in reliance upon and in conformity with written information furnished to the Company by the Agent or its counsel expressly regarding the Agent for use in the Prospectus contained in the Form AC under the caption "The Conversion and Stock Offering — Marketing Arrangements." + +(f) The Company has filed the Holding Company Application with the OTS and the Holding Company Application is accurate and truthful. The Company has received written notice from the OTS of its approval of the acquisition of the Bank, such approval remains in full force and effect and no order has been issued by the OTS suspending or revoking such approval and no proceedings therefor have been initiated or threatened by the OTS. At the date of such approval, the Holding Company Application complied in all material respects with the applicable provisions of HOLA and the regulations promulgated thereunder. + +(g) The Company and the Bank have filed the Prospectus and any supplemental sales literature with the Commission and the OTS. The Prospectus and all supplemental sales literature, as of the date the Registration Statement became effective and on the Closing Date referred to in Section 2, complied and will comply in all material respects with the applicable requirements of the 1933 Act Regulations and, at or prior to the time of their first use, will have received all required authorizations of the OTS and Commission for use in final form. No approval of any other regulatory or supervisory or other public authority is required in connection with the distribution of the Prospectus and any supplemental sales literature that has not been obtained and a copy of which has been delivered to the Agent. The Company and the Bank have not distributed any offering material in connection with the Offering except for the Prospectus and any supplemental sales material that has been filed with the Registration Statement and the Form AC and authorized for use by the Commission and the OTS. The information contained in the supplemental sales material filed as an exhibit to both the Registration Statement and the Form AC does not conflict with information contained in the Registration Statement and the Prospectus. + +(h) The Plan has been adopted by the Boards of Directors of the Company and the Bank and, at the Closing Date, will have been approved by the members of the Bank, and the offer and sale of the Shares will have been conducted in all material respects in accordance with the Plan, the Conversion Regulations except to the extent waived or otherwise approved by the OTS, and all other applicable laws, regulations, decisions and orders, including all terms, conditions, requirements and provisions precedent to the Offering imposed upon the Company and the Bank by the OTS, the Commission, or any other regulatory authority and in the manner described in the Prospectus. To the best knowledge of the Company and the Bank, no person has sought to obtain review of the final action of the OTS in approving the Conversion pursuant to the HOLA or any other statute or regulation. + +(i) The Bank has been duly organized and is validly existing as a federally-chartered savings bank in mutual form of organization and upon completion of the Conversion will become a duly organized and validly existing federally-chartered savings bank in permanent capital stock form of organization, in both instances duly authorized to conduct its business and own its property as described in the Registration Statement and the Prospectus; the Bank has obtained all licenses, permits and other governmental authorizations currently required for the conduct of its business, except those that individually or in the + +6 + + + + + + + +aggregate would not materially adversely affect the financial condition, results of operations or business of the Company and the Bank, taken as a whole; all such licenses, permits and governmental authorizations are in full force and effect, and the Bank is in compliance with all material laws, rules, regulations and orders applicable to the operation of its business, except where failure to be in compliance would not materially adversely affect the financial condition, results of operations or business of the Company and the Bank, taken as a whole; the Bank is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which its ownership of property or leasing of property or the conduct of its business requires such qualification, unless the failure to be so qualified in one or more of such jurisdictions would not have a material adverse effect on the financial condition, results of operations or business of the Bank ("Material Adverse Effect"). The Bank does not own equity securities or any equity interest in any other business enterprise except as described in the Prospectus or as would not be material to the operations of the Bank. Upon completion of the sale by the Company of the Shares contemplated by the Prospectus, (i) all of the outstanding capital stock of the Bank will be duly authorized, validly issued and fully paid and non-assessable and owned directly by the Company free and clear of any security interest, mortgage, pledge, lien, encumbrances or legal or equitable claim and (ii) the Company will have no direct subsidiaries other than the Bank and no indirect subsidiaries other than Southland Finance, Inc., Ti-Serv, Inc. and Valley Title Services, LLC (the "Subsidiaries"). The Conversion will be effected in all material respects in accordance with all applicable statutes, regulations, decisions and orders; and, except with respect to the filing of certain post-sale, post-Conversion reports, and documents in compliance with the 1933 Act Regulations, the Conversion Regulations or letters of approval, at the Closing Date, all terms, conditions, requirements and provisions with respect to the Conversion imposed by the Commission, the OTS and the FDIC, if any, will have been complied with by the Company and the Bank in all material respects or appropriate waivers will have been obtained and all applicable notice and waiting periods will have been satisfied, waived or elapsed. + +(j) The Company is duly organized, validly existing and in good standing as a corporation under the laws of the State of Tennessee with full corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Registration Statement and the Prospectus, and, at the Closing Date, the Company will be qualified to do business as a foreign corporation in each jurisdiction in which the conduct of its business requires such qualification, except where the failure to so qualify would not have a Material Adverse Effect on the financial condition, results of operations or business of the Company. At the Closing Date, the Company will have obtained all licenses, permits and other governmental authorizations currently required for the conduct of its business except those that individually or in the aggregate would not materially adversely affect the financial condition, results of operations or business of the Company and the Bank, taken as a whole; all such licenses, permits and governmental authorizations will be in full force and effect, and the Company will be in all material respects complying with all laws, rules, regulations and orders applicable to the operation of its business. There are no outstanding warrants or options to purchase any securities of the Company. + +(k) The Subsidiaries are each duly organized, validly existing and in good standing as a corporation under the laws of the State of Tennessee with full corporate power and authority to own, lease and operate its properties and to conduct their businesses as described in the Registration Statement and the Prospectus, and are duly qualified to do business as foreign corporations and are in good standing in each jurisdiction in which the conduct of its business requires such qualification, except where the failure to so qualify would not have a Material Adverse Effect on the financial condition, results of operations or business of the Company and the Bank, taken as a whole. The activities of the Subsidiaries are permissible to subsidiaries of federal savings banks. The Subsidiaries have each obtained all licenses, permits and other governmental authorizations currently required for the conduct of its business except those that individually or in the aggregate would not materially adversely affect the financial condition, results of operations or business of the Company and the Bank, taken as a whole; all such licenses, permits and governmental authorizations will be in full force and effect, and the Subsidiaries are in all material respects complying with all laws, rules, regulations and orders applicable to the operation of their respective business. All of the issued and outstanding capital stock of the Subsidiaries have been duly + +7 + + + + + + + +authorized and validly issued, is fully paid and non-assessable and owned by the Bank directly, free and clear of any security interest, mortgage, pledge, lien, encumbrance or legal or equitable claim. + +(l) The Bank is a member of the Federal Home Loan Bank of Cincinnati ("FHLB-Cincinnati"). The deposit accounts of the Bank are insured by the FDIC up to the applicable limits, and no proceedings for the termination or revocation of such insurance are pending or, to the best knowledge of the Company or the Bank, threatened. The Bank is a "qualified thrift lender" within the meaning of 12 U.S.C. §l467a(m). + +(m) The Bank and the Company have good and marketable title to all real property and good title to all other assets material to the business of the Company and the Bank, taken as a whole, and to those properties and assets described in the Registration Statement and Prospectus as owned by them, free and clear of all liens, charges, encumbrances or restrictions, except such as are described in the Registration Statement and Prospectus, or are not material to the business of the Company and the Bank, taken as a whole; and all of the leases and subleases material to the business of the Company and the Bank, taken as a whole, under which, the Company or the Bank hold properties, including those described in the Registration Statement and Prospectus, are in full force and effect. + +(n) The Company has received an opinion of its special counsel, Kilpatrick Stockton LLP, with respect to the federal income tax consequences of the Conversion and an opinion of its tax advisor, Hazlett, Lewis & Bieter, PLLC, with respect to the Tennessee income tax consequences of the Conversion; all material aspects of such opinions are accurately summarized in the Registration Statement and the Prospectus. The Company and the Bank represent and warrant that the facts upon which such opinions are based are truthful, accurate and complete. Neither the Company nor the Bank will take any action inconsistent therewith. + +(o) Each of the Company and the Bank has all such power, authority, authorizations, approvals and orders as may be required to enter into this Agreement, to carry out the provisions and conditions hereof and to issue and sell the Shares to be sold by the Company as provided herein and as described in the Prospectus, subject to approval or confirmation by the OTS of the final appraisal of the Bank. The execution, delivery and performance of this Agreement and the consummation of the transactions herein contemplated have been duly and validly authorized by all necessary corporate action on the part of the Bank and the Company. This Agreement has been validly executed and delivered by the Company and the Bank and is the valid, legal and binding agreement of the Company and the Bank enforceable in accordance with its terms (except as the enforceability thereof may be limited by bankruptcy, insolvency, moratorium, reorganization or similar laws relating to or affecting the enforcement of creditors' rights generally or the rights of creditors of savings and loan holding companies, the accounts of whose subsidiaries are insured by the FDIC, or by general equity principles, regardless of whether such enforceability is considered in a proceeding in equity or at law, and except to the extent, if any, that the provisions of Sections 9 and 10 hereof may be unenforceable as against public policy). + +(p) Neither the Company nor the Bank is in violation of any directive received from the OTS, the FDIC, or any other agency to make any material change in the method of conducting its business so as to comply in all material respects with all applicable statutes and regulations (including, without limitation, regulations, decisions, directives and orders of the OTS and the FDIC) and, except as may be set forth in the Registration Statement, the General Disclosure Package and the Prospectus, there is no suit or proceeding or charge or action before or by any court, regulatory authority or governmental agency or body, pending or threatened, which might materially and adversely affect the Offering, as described in the Registration Statement and the Prospectus or which might result in any material adverse change in the financial condition, results of operations or business of the Company and the Bank, taken as a whole, or which would materially affect their properties and assets. + +8 + + + + + + + +(q) The consolidated financial statements, schedules and notes related thereto which are included in the General Disclosure Package and the Prospectus fairly present the balance sheet, income statement, statement of changes in equity capital and statement of cash flows of the Bank and the Subsidiaries on a consolidated basis at the respective dates indicated and for the respective periods covered thereby and comply as to form in all material respects with the applicable accounting requirements of the 1933 Act Regulations and Title 12 of the Code of Federal Regulations. Such consolidated financial statements, schedules and notes related thereto have been prepared in accordance with generally accepted accounting principles ("GAAP") consistently applied through the periods involved, present fairly in all material respects the information required to be stated therein and are consistent with the most recent financial statements and other reports filed by the Bank with the OTS, except that accounting principles employed in such regulatory filings conform to the requirements of the OTS and not necessarily to GAAP. The other financial, statistical and pro forma information and related notes included in the Prospectus present fairly the information shown therein on a basis consistent with the audited and unaudited consolidated financial statements of the Bank included in the Prospectus, and as to the pro forma adjustments, the adjustments made therein have been properly applied on the basis described therein. + +(r) Since the respective dates as of which information is given in the Registration Statement including the Prospectus: (i) there has not been any material adverse change, financial or otherwise, in the condition of the Company and the Bank and their subsidiaries, considered as one enterprise, or in the earnings, capital, properties or business of the Company and the Bank and their subsidiaries, whether or not arising in the ordinary course of business; (ii) there has not been any material increase in the long-term debt of the Bank or in the principal amount of the Bank's assets which are classified by the Bank as impaired, substandard, doubtful or loss or in loans past due 90 days or more or real estate acquired by foreclosure, by deed-in-lieu of foreclosure or deemed in-substance foreclosure or any material decrease in equity capital or total assets of the Bank; nor has the Company or the Bank issued any securities (other than in connection with the incorporation of the Company) or incurred any liability or obligation for borrowing other than in the ordinary course of business; (iii) there have not been any material transactions entered into by the Company or the Bank; (iv) there has not been any material adverse change in the aggregate dollar amount (on a consolidated basis with the Bank) of the Company's deposits or its net worth; (v) there has been no material adverse change in the Company's or the Bank's relationship with its insurance carriers, including, without limitation, cancellation or other termination of the Company's or the Bank's fidelity bond or any other type of insurance coverage; (vi) except as disclosed in the General Disclosure Package and the Prospectus, there has been no material change in management of the Company or the Bank; (vii) neither the Company nor the Bank has sustained any material loss or interference with its respective business or properties from fire, flood, windstorm, earthquake, accident or other calamity, whether or not covered by insurance; (viii) neither the Company nor the Bank has defaulted in the payment of principal or interest on any outstanding debt obligations; (ix) the capitalization, liabilities, assets, properties and business of the Company and the Bank conform in all material respects to the descriptions thereof contained in the General Disclosure Package and the Prospectus; and (x) neither the Company nor the Bank has any material contingent liabilities, except as set forth in the Prospectus. + +(s) Neither the Company nor the Bank is (i) in violation of their respective charters or bylaws (and the Bank will not be in violation of its charter or bylaws in stock form upon completion of the Conversion), or (ii) in default in the performance or observance of any obligation, agreement, covenant, or condition contained in any material contract, lease, loan agreement, indenture or other instrument to which it is a party or by which it or any of its property may be bound. The execution and delivery of this Agreement and the consummation of the transactions herein contemplated will not: (i) conflict with or constitute a breach of, or default under, or result in the creation of any lien, charge or encumbrance upon any of the assets of the Company or the Bank pursuant to the respective charters or bylaws of the Company or the Bank or any contract, lease or other instrument in which the Company or the Bank has a beneficial interest, or any applicable law, rule, regulation or order; (ii) violate any authorization, approval, judgment, decree, order, statute, rule or regulation applicable to the Company or the Bank, except for + +9 + + + + + + + +such violations which would not have a Material Adverse Effect on the financial condition and results of operations of the Company and the Bank on a consolidated basis; or (iii) result in the creation of any material lien, charge or encumbrance upon any property of the Company or the Bank. + +(t) All documents made available to or delivered or to be made available to or delivered by the Company and the Bank or their representatives in connection with the issuance and sale of the Shares, including records of account holders and depositors of the Bank, or in connection with the Agent's exercise of due diligence, except for those documents which were prepared by parties other than the Company or the Bank or their representatives, to the best knowledge of the Company and the Bank, were on the dates on which they were delivered, or will be on the dates on which they are to be delivered, true, complete and correct in all material respects. + +(u) No default exists, and no event has occurred which with notice or lapse of time, or both, would constitute a default on the part of the Company or the Bank in the due performance and observance of any term, covenant or condition of any indenture, mortgage, deed of trust, note, bank loan or credit agreement or any other instrument or agreement to which the Company or the Bank is a party or by which any of them or any of their property is bound or affected, except such defaults which would not have a material adverse affect on the financial condition or results of operations of the Company and the Bank, taken as a whole; such agreements are in full force and effect and are the legal, valid and binding agreements of the applicable party and the other parties thereto, enforceable in accordance with their terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization or similar laws affecting the rights of creditors generally and subject to general principles of equity; and no other party to any such agreements has instituted or, to the best knowledge of the Company or the Bank, threatened any action or proceeding wherein the Company or the Bank would or might be alleged to be in default thereunder, where such action or proceeding, if determined adversely to the Company or the Bank, would have a Material Adverse Effect on the financial condition, results of operations, or business of the Company or the Bank, taken as a whole. There are no contracts or documents that are required to be filed as exhibits to the Registration Statement or described in the Registration Statement, the Prospectus, or any Permitted Free Writing Prospectus which are not so filed or described as required, and such contracts and documents as are summarized in the Registration Statement, the Prospectus, and any Permitted Free Writing Prospectus are fairly summarized therein in all material respects. No party has sent or received any notice indicating the termination of or intention to terminate any of the contracts or agreements referred to or described in the Registration Statement, the Prospectus, or any Permitted Free Writing Prospectus, or filed as an exhibit to the Registration Statement, and, to the knowledge of the Company and the Bank, no such termination has been threatened by any party to any such contract or agreement. + +(v) Upon consummation of the Conversion, the authorized, issued and outstanding equity capital of the Company will be within the range set forth in the General Disclosure Package and the Prospectus under the caption "Capitalization," and no Shares have been or will be issued and outstanding prior to the Closing Date; the Shares will have been duly and validly authorized for issuance and, when issued and delivered by the Company pursuant to the Plan against payment of the consideration calculated as set forth in the Plan and in the Prospectus, will be duly and validly issued, fully paid and non-assessable, except for shares purchased by the ESOP with funds borrowed from the Company to the extent payment therefor in cash has not been received by the Company; except to the extent that subscription rights and priorities pursuant thereto exist pursuant to the Plan, no preemptive rights exist with respect to the Shares; and the terms and provisions of the Shares will conform in all material respects to the description thereof contained in the Registration Statement and the Prospectus. The Shares have been approved for listing on the Nasdaq Capital Market, subject to issuance. Upon the issuance of the Shares, good title to the Shares will be transferred from the Company to the purchasers thereof against payment therefor, subject to such claims as may be asserted against the purchasers thereof by third-party claimants. + +(w) No approval of any regulatory or supervisory or other public authority is required in connection with the execution and delivery of this Agreement or the issuance of the Shares, except for the + +10 + + + + + + + +approval of the Commission and the OTS, and any necessary qualification, notification, registration or exemption under the securities or blue sky laws of the various states in which the Shares are to be offered, and except as may be required under the rules and regulations of the Financial Industry Regulatory Authority ("FINRA") + +(x) Hazlett, Lewis & Bieter, PLLC, which has certified the audited financial statements and schedules of the Bank included in the Prospectus, has advised the Company and the Bank in writing that they are, with respect to the Company and the Bank, independent registered public accountants within the applicable rules of the Public Company Accounting Oversight Board (United States). + +(y) Keller & Company, Inc., which has prepared the Valuation Appraisal Report (as amended or supplemented, if so amended or supplemented) of the Bank, has advised the Bank in writing that it is independent of the Company and the Bank within the meaning of the Conversion Regulations. + +(z) The Company and the Bank have timely filed or extended all required federal, state and local tax returns; the Company and the Bank have paid all taxes that have become due and payable in respect of such returns, except where permitted to be extended, have made adequate reserves for similar future tax liabilities and no deficiency has been asserted with respect thereto by any taxing authority. The Company and the Bank have no knowledge of any tax deficiency which has been or might be assessed against either of them which, if the subject of an unfavorable decision, ruling or finding, could have, individually or in the aggregate with other tax deficiencies, a Material Adverse Effect. All material tax liabilities have been adequately provided for in the financial statements of the Company and the Bank in accordance with GAAP. There are no transfer taxes or other similar fees or charges under Federal law or the laws of any state, or any political subdivision thereof, required to be paid in connection with the execution and delivery of this Agreement by the Company or with the issuance or sale by the Company of the Shares. + +(aa) The Company and the Bank are in compliance in all material respects with the applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, and the regulations and rules thereunder. + +(bb) To the knowledge of the Company and the Bank, none of the Company, the Bank or the employees of the Company or the Bank has made any payment of funds of the Company or the Bank as a loan for the purchase of the Shares or made any other payment of funds prohibited by law, and no funds have been set aside to be used for any payment prohibited by law. + +(cc) Neither the Company nor the Bank has: (i) issued any securities within the last 18 months (except for notes to evidence bank loans and reverse repurchase agreements or other liabilities in the ordinary course of business or as described in the Prospectus); (ii) had any material dealings within the 12 months prior to the date hereof with any member of the FINRA, or any person related to or associated with such member, other than discussions and meetings relating to the proposed Offering and routine purchases and sales of United States government and agency and other securities in the ordinary course of business; (iii) entered into a financial or management consulting agreement except as contemplated hereunder; and (iv) engaged any intermediary between the Agent and the Company or the Bank in connection with the offering of the Shares, and no person is being compensated in any manner for such service. Appropriate arrangements have been made for placing the funds received from subscriptions for Shares in a special interest-bearing account with the Bank until all Shares are sold and paid for, with provision for refund to the purchasers in the event that the Offering is not completed for whatever reason or for delivery to the Company if all Shares are sold. + +(dd) The Company and the Bank have not relied upon the Agent or its legal counsel for any legal, tax or accounting advice in connection with the Conversion. + +11 + + + + + + + +(ee) The records used by the Company and the Bank to determine the identities of Eligible Account Holders, Supplemental Eligible Account Holders and Other Members are accurate and complete in all material respects. + +(ff) The Company is not required to be registered under the Investment Company Act of 1940, as amended. + +(gg) Neither the Company nor the Bank or any properties owned or operated by the Company or the Bank, is in violation of or liable under any Environmental Law (as defined below), except for such violations or liabilities that, individually or in the aggregate, would not have a Material Adverse Effect on the financial condition, results of operations or business of the Company and the Bank, taken as a whole. There are no actions, suits or proceedings, or demands, claims, notices or investigations (including, without limitation, notices, demand letters or requests for information from any environmental agency) instituted or pending or, to the knowledge of the Company or the Bank, threatened relating to the liability of any property owned or operated by the Company or the Bank under any Environmental Law. For purposes of this subsection, the term "Environmental Law" means any federal, state, local or foreign law, statute, ordinance, rule, regulation, code, license, permit, authorization, approval, consent, order, judgment, decree, injunction or agreement with any regulatory authority relating to (i) the protection, preservation or restoration of the environment (including, without limitation, air, water, vapor, surface water, groundwater, drinking water supply, surface soil, subsurface soil, plant and animal life or any other natural resource), and/or (ii) the use, storage, recycling, treatment, generation, transportation, processing, handling, labeling, production, release or disposal of any substance presently listed, defined, designated or classified as hazardous, toxic, radioactive or dangerous, or otherwise regulated, whether by type or by quantity, including any material containing any such substance as a component. + +(hh) The Company has filed a registration statement to register for the Common Shares under Section 12(b) of the Securities Exchange Act of 1934, as amended (the "1934 Act"). + +(ii) The Company and its subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that (A) transactions are executed in accordance with management's general or specific authorizations, (B) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain accountability for assets, (C) access to assets is permitted only in accordance with management's general or specific authorization, and (D) the recorded accounts or assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect thereto. The books, records and accounts and systems of internal accounting control of the Company and its subsidiaries comply in all material respects with the requirements of Section 13 (b)(2) of the 1934 Act. The Company has established and maintains "disclosure controls and procedures" (as defined in Rule 13a-15(e) under the 1934 Act) that are effective in ensuring that the information it will be required to disclose in the reports it files or submits under the 1934 Act is accumulated and communicated to the Company's management (including the Company's chief executive officer and chief financial officer) in a timely manner and recorded, processed, summarized and reported within the periods specified in the Commission's rules and forms. To the knowledge of the Company and the Bank, and the Audit Committee of the Board of Directors have been advised of: (A) any significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which could adversely affect Company's and the Bank's ability to record, process, summarize, and report financial data; and (B) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company's or the Bank's internal accounting controls. + +(jj) All of the loans represented as assets of the Company or the Bank in the Prospectus meet or are exempt from all requirements of federal, state and local law pertaining to lending, including, without limitation, truth in lending (including the requirements of Regulation Z and 12 C.F.R. Part 226), real estate settlement procedures, consumer credit protection, equal credit opportunity and all disclosure laws + +12 + + + + + + + +applicable to such loans, except for violations which, if asserted, would not have a Material Adverse Effect on the financial condition, results of operations, or business of the Company and the Bank, taken as a whole. + +(kk) To the Company's and the Bank's knowledge, there are no affiliations or associations between any member of the FINRA and any of the Company's or the Bank's officers, directors or 5% or greater securityholders, except as set forth in the Registration Statement and the Prospectus. + +(ll) The Company has taken all actions necessary to obtain at Closing a Blue Sky Memorandum from Kilpatrick Stockton LLP. + +(mm) Any certificates signed by an officer of the Company or the Bank pursuant to the conditions of this Agreement and delivered to the Agent or their counsel that refers to this Agreement shall be deemed to be a representation and warranty by the Company or the Bank, as the case may be, to the Agent as to the matters covered thereby with the same effect as if such representation and warranty were set forth herein. + +(nn) The Company and the Bank carry, or are covered by, insurance in such amounts and covering such risks at they deem reasonably adequate for the conduct of their respective businesses and the value of their respective properties. + +(oo) Subsequent to the date the Registration Statement is declared effective by the Commission and prior to the Closing Date, except as otherwise may be indicated or contemplated in the Registration Statement, neither the Company nor the Bank has or will have issued any securities or incurred any liability or obligation, direct or contingent, for borrowed money, except borrowings from the same or similar sources indicated in the Prospectus in the ordinary course of its business. + +(pp) All Sales Information (as defined in Section 9(a)) used by the Company in connection with the Conversion that is required by the OTS and the Commission to be filed has been filed with and approved by the OTS and the Commission. + +(qq) The statistical and market related data contained in any Permitted Free Writing Prospectus, the Prospectus and the Registration Statement are based on or derived from sources which the Company and the Bank believe were reliable and accurate at the time they were filed with the Commission. No forward-looking statement (within the meaning of Section 27A of the 1933 Act and Section 21E of the 1934 Act) contained in the Registration Statement, the Prospectus, or any Permitted Free Writing Prospectus has been made or reaffirmed without a reasonable basis or has been disclosed other than in good faith. + +(rr) Except for the Bank's profit sharing/401(k) plan, neither the Company nor the Bank maintains any other "pension plan," as defined in the Employee Retirement Income Security Act of 1974, as amended ("ERISA"). In addition, (A) the employee benefit plans, including employee welfare benefit plans, of the Company or the Bank (the "Employee Plans") have been operated in compliance with the applicable provisions of ERISA, the Internal Revenue Code of 1986, as amended (the "Code"), all regulations, rulings and announcements promulgated or issued thereunder and all other applicable laws and governmental regulations, (B) no reportable event under Section 4043(c) of ERISA has occurred with respect to any Employee Plan of the Company or the Bank for which the reporting requirements have not been waived by the Pension Benefit Guaranty Corporation, (C) no prohibited transaction under Section 406 of ERISA, for which an exemption does not apply, has occurred with respect to any Employee Plan of the Company or the Bank and (D) all Employee Plans that are group health plans have been operated in compliance with the group health plan continuation coverage requirements of Section 4980B of the Code, except to the extent such noncompliance, reportable event or prohibited transaction would not have, individually or in the aggregate, a Material Adverse Effect. There are no pending or, to the knowledge of + +13 + + + + + + + +the Company and the Bank, threatened, claims by or on behalf of any Employee Plan, by any employee or beneficiary covered under any such Employee Plan or by any governmental authority, or otherwise involving such Employee Plans or any of their respective fiduciaries (other than for routine claims for benefits). + +Section 5. Representations and Warranties of the Agent. The Agent represents and warrants to the Company and the Bank as follows: + +(a) The Agent is a corporation and is validly existing in good standing under the laws of the State of New York with full power and authority to provide the services to be furnished to the Company and the Bank hereunder. + +(b) The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly and validly authorized by all necessary action on the part of the Agent, and this Agreement has been duly and validly executed and delivered by the Agent and is a legal, valid and binding agreement of the Agent, enforceable in accordance with its terms, except as the legality, validity, binding nature and enforceability thereof may be limited by (i) bankruptcy, insolvency, moratorium, reorganization, conservatorship, receivership or other similar laws relating to or affecting the enforcement of creditors' rights generally, and (ii) general equity principles regardless of whether such enforceability is considered in a proceeding in equity or at law. + +(c) Each of the Agent and its employees, agents and representatives who shall perform any of the services hereunder shall be duly authorized and empowered, and shall have all licenses, approvals and permits necessary to perform such services; and the Agent is a registered selling agent in each of the jurisdictions in which the Shares are to be offered by the Company in reliance upon the Agent as a registered selling agent as set forth in the blue sky memorandum prepared with respect to the Offering. + +(d) The execution and delivery of this Agreement by the Agent, the consummation of the transactions contemplated hereby and compliance with the terms and provisions hereof will not conflict with, or result in a breach of, any of the terms, provisions or conditions of, or constitute a default (or an event which with notice or lapse of time or both would constitute a default) under, the Articles of Incorporation or Bylaws of the Agent or any agreement, indenture or other instrument to which the Agent is a party or by which it or its property is bound. + +(e) No approval of any regulatory or supervisory or other public authority is required in connection with the Agent's execution and delivery of this Agreement, except as may have been received. + +(f) There is no suit or proceeding or charge or action before or by any court, regulatory authority or government agency or body or, to the knowledge of the Agent, pending or threatened, which might materially adversely affect the Agent's performance under this Agreement. + +Section 6. Covenants of the Company and the Bank. The Company and the Bank hereby jointly and severally covenant and agree with the Agent as follows: + +(a) The Company will not, at any time after the date the Registration Statement is declared effective, file any amendment or supplement to the Registration Statement without providing the Agent and its counsel an opportunity to review such amendment or supplement or file any amendment or supplement to which amendment or supplement the Agent or its counsel shall reasonably object. + +(b) If at any time following issuance of an Issuer-Represented Free Writing Prospectus there occurred or occurs an event or development as a result of which such Issuer Represented Free Writing Prospectus conflicted or would conflict with the information contained in the Registration Statement or included or would include an untrue statement of a material fact or omitted or would omit to state a + +14 + + + + + + + +material fact necessary in order to make the statements therein, in light of the circumstances prevailing at the subsequent time, not misleading, the Company has notified or will notify promptly the Agent so that any use of such Issuer-Represented Free Writing Prospectus may cease until it is amended or supplemented and the Company has promptly amended or will promptly amend or supplement such Issuer-Represented Free Writing Prospectus to eliminate or correct such conflict, untrue statement or omission; provided, however, that this covenant shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company by the Agent expressly for use therein. + +(c) The Company and the Bank represent and agree that, unless it obtains the prior consent of the Agent, and the Agent represents and agrees that, unless it obtains the prior consent of the Company or the Bank, it has not made and will not make any offer relating to the offered Shares that would constitute an "issuer free writing prospectus" as defined in Rule 433 of the 1933 Act Regulations, or that would constitute a "free writing prospectus," as defined in Rule 405 of the 1933 Act Regulations, required to be filed with the Commission. Any such free writing prospectus consented to by the Company, the Bank and the Agent is hereinafter referred to as a "Permitted Free Writing Prospectus." The Company and the Bank represent that it has treated or agrees that it will treat each Permitted Free Writing Prospectus as an "issuer free writing prospectus," as defined in Rule 433 of the 1933 Act Regulations, and has complied and will comply with the requirements of Rule 433 of the 1933 Act Regulations applicable to any Permitted Free Writing Prospectus, including timely Commission filing where required, legending and record keeping. The Company and the Bank need not treat any communication as a free writing prospectus if it is exempt from the definition of prospectus pursuant to Clause (a) of Section 2(a)(10) of the 1933 Act without regard to Rule 172 or 173 of the 1933 Act Regulations. + +(d) The Bank will not, at any time after the Form AC is approved by the OTS, file any amendment or supplement to such Form AC without providing the Agent and its counsel an opportunity to review such amendment or supplement or file any amendment or supplement to which amendment or supplement the Agent or its counsel shall reasonably object. + +(e) The Company will not, at any time after the Holding Company Application is approved by the OTS, file any amendment or supplement to such Holding Company Application without providing the Agent and its counsel an opportunity to review the non-confidential portions of such amendment or supplement or file any amendment or supplement to which amendment or supplement the Agent or its counsel shall reasonably object. + +(f) The Company and the Bank will use their best efforts to cause any post-effective amendment to the Registration Statement to be declared effective by the Commission and any post-effective amendment to the Form AC or the Holding Company Application to be approved by the OTS and will immediately upon receipt of any information concerning the events listed below notify the Agent: (i) when the Registration Statement, as amended, has become effective; (ii) when the Form AC or the Holding Company Application, as amended, has been approved by the OTS; (iii) of any comments from the Commission, the OTS or any other governmental entity with respect to the Conversion contemplated by this Agreement; (iv) of the request by the Commission, the OTS or any other governmental entity for any amendment or supplement to the Registration Statement, the Form AC, Holding Company Application or for additional information; (v) of the issuance by the Commission, the OTS or any other governmental entity of any order or other action suspending the Conversion or the use of the Registration Statement or the Prospectus or any other filing of the Company or the Bank under the Conversion Regulations, or other applicable law, or the threat of any such action; (vi) of the issuance by the Commission, the OTS or any authority of any stop order suspending the effectiveness of the Registration Statement or of the initiation or threat of initiation or threat of any proceedings for that purpose; or (vii) of the occurrence of any event mentioned in paragraph (h) below. The Company and the Bank will make every reasonable effort (i) to prevent the issuance by the Commission, the OTS or any other state + +15 + + + + + + + +authority of any such order and, (ii) if any such order shall at any time be issued, to obtain the lifting thereof at the earliest possible time. + +(g) The Company and the Bank will deliver to the Agent and to its counsel two conformed copies of the Registration Statement, the Form AC or the Holding Company Application, as originally filed and of each amendment or supplement thereto, including all exhibits. Further, the Company and the Bank will deliver such additional copies of the foregoing documents to counsel to the Agent as may be required for any FINRA filings. + +(h) The Company and the Bank will furnish to the Agent, from time to time during the period when the Prospectus (or any later prospectus related to this offering) is required to be delivered under the 1933 Act or the 1934 Act, such number of copies of such Prospectus (as amended or supplemented) as the Agent may reasonably request for the purposes contemplated by the 1933 Act, the 1933 Act Regulations, the 1934 Act or the rules and regulations promulgated under the 1934 Act (the "1934 Act Regulations"). The Company authorizes the Agent to use the Prospectus (as amended or supplemented, if amended or supplemented) in any lawful manner contemplated by the Plan in connection with the sale of the Shares by the Agent. + +(i) The Company and the Bank will comply with any and all material terms, conditions, requirements and provisions with respect to the Offering imposed by the Commission, the OTS or the Conversion Regulations, and by the 1933 Act, the 1933 Act Regulations, the 1934 Act and the 1934 Act Regulations to be complied with prior to or subsequent to the Closing Date and when the Prospectus is required to be delivered, and during such time period the Company and the Bank will comply, at their own expense, with all material requirements imposed upon them by the Commission, the OTS or the Conversion Regulations, and by the 1933 Act, the 1933 Act Regulations, the 1934 Act and the 1934 Act Regulations, including, without limitation, Rule 10b-5 under the 1934 Act, in each case as from time to time in force, so far as necessary to permit the continuance of sales or dealing in the Common Shares during such period in accordance with the provisions hereof and the Prospectus. The Company will comply with all undertakings contained in the Registration Statement. + +(j) If, at any time during the period when the Prospectus is required to be delivered, any event relating to or affecting the Company or the Bank shall occur, as a result of which it is necessary or appropriate, in the opinion of counsel for the Company or in the reasonable opinion of the Agent's counsel, to amend or supplement the Registration Statement or Prospectus in order to make the Registration Statement or Prospectus not misleading in light of the circumstances existing at the time the Prospectus is delivered to a purchaser, the Company will immediately so inform the Agent and prepare and file, at its own expense, with the Commission and the OTS, and furnish to the Agent a reasonable number of copies, of an amendment or amendments of, or a supplement or supplements to, the Registration Statement or Prospectus (in form and substance reasonably satisfactory to the Agent and its counsel after a reasonable time for review) which will amend or supplement the Registration Statement or Prospectus so that as amended or supplemented it will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances existing at the time the Prospectus is delivered to a purchaser, not misleading. For the purpose of this Agreement, the Company will timely furnish to the Agent such information with respect to itself and the Bank as the Agent may from time to time reasonably request. + +(k) The Company and the Bank will take all necessary actions in cooperating with the Agent and furnish to whomever the Agent may direct such information as may be required to qualify or register the Shares for offering and sale by it or to exempt such Shares from registration, or to exempt the Company as a broker-dealer and its officers, directors and employees as broker-dealers or agents under the applicable securities or blue sky laws of such jurisdictions in which the Shares are required under the Conversion Regulations to be sold or as the Agent and the Company may reasonably agree upon; provided, however, that the Company shall not be obligated to file any general consent to service of + +16 + + + + + + + +process, to qualify to do business in any jurisdiction in which it is not so qualified, or to register its directors or officers as brokers, dealers, salesmen or agents in any jurisdiction. In each jurisdiction where any of the Shares shall have been qualified or registered as above provided, the Company will make and file such statements and reports in each fiscal period as are or may be required by the laws of such jurisdiction. + +(l) The liquidation account for the benefit of Eligible Account Holders and Supplemental Eligible Account Holders will be duly established and maintained in accordance with the requirements of the Conversion Regulations, and such Eligible Account Holders and Supplemental Eligible Account Holders who continue to maintain their savings accounts in the Bank will have an inchoate interest in their pro rata portion of the liquidation account, which shall have a priority superior to that of the holders of the Common Stock in the event of a complete liquidation of the Bank. + +(m) The Company and the Bank will not sell or issue, contract to sell or otherwise dispose of, for a period of 90 days after the Closing Date, without the Agent's prior written consent, any of their shares of their common stock, other than the Common Shares or other than in connection with any plan or arrangement described in the Prospectus. + +(n) The Company will register its common stock under Section 12(b) of the 1934 Act. The Company shall maintain the effectiveness of such registration for not less than three years from the time of effectiveness or such shorter period as may be required by the OTS. + +(o) During the period during which the Common Shares are registered under the 1934 Act or for three years from the date hereof, whichever period is greater, the Company will furnish to its shareholders as soon as practicable after the end of each fiscal year an annual report of the Company (including a consolidated balance sheet and statements of consolidated income, shareholders' equity and cash flows of the Company and its subsidiaries as at the end of and for such year, certified by independent public accountants in accordance with Regulation S-X under the 1933 Act and the 1934 Act) and make available as soon as practicable after the end of each of the first three quarters of each fiscal year (beginning with the first fiscal quarter ending after the effective time of the Registration Statement) financial information of the Company and its subsidiaries for such quarter in reasonable detail. + +(p) During the period of three years from the date hereof, the Company will furnish to the Agent: (i) as soon as practicable after such information is publicly available, a copy of each report of the Company furnished to or filed with the Commission under the 1934 Act or any national securities exchange or system on which any class of securities of the Company is listed or quoted (including, but not limited to, reports on Forms 10-K, 10-Q and 8-K and all proxy statements and annual reports to stockholders), (ii) a copy of each other non-confidential report of the Company mailed to its shareholders or filed with the Commission, the OTS or any other supervisory or regulatory authority or any national securities exchange or system on which any class of securities of the Company is listed or quoted, each press release and material news items and additional documents and information with respect to the Company or the Bank as the Agent may reasonably request; and (iii) from time to time, such other nonconfidential information concerning the Company or the Bank as the Agent may reasonably request. + +(q) The Company and the Bank will use the net proceeds from the sale of the Shares in the manner set forth in the Prospectus under the caption "Use of Proceeds." + +(r) Other than as permitted by the Conversion Regulations, the HOLA, the 1933 Act, the 1933 Act Regulations and the rules and regulations and the laws of any state in which the Shares are registered or qualified for sale or exempt from registration, the Company will not distribute any prospectus, offering circular or other offering material in connection with the offer and sale of the Shares. + +17 + + + + + + + +(s) The Company will make generally available to its security holders as soon as practicable, but not later than 60 days after the close of the period covered thereby, an earnings statement (in form complying with the provisions of Rule 158 of the 1933 Act Regulations) covering a twelve-month period beginning not later than the first day of the Company's fiscal quarter next following the effective date (as defined in such Rule 158) of the Registration Statement. + +(t) The Company will use its best efforts to obtain and maintain a listing of the Common Shares on the Nasdaq Capital Market on or prior to the Closing Date. + +(u) The Bank will maintain appropriate arrangements for depositing all funds received from persons mailing or delivering subscriptions for or orders to purchase Shares in the Offering with the Bank or another financial institution whose deposits are insured by the FDIC, on an interest- bearing basis at the rate described in the Prospectus until the Closing Date and satisfaction of all conditions precedent to the release of the Company's or the Bank's obligation to refund payments received from persons subscribing for or ordering Shares in the Offering in accordance with the Plan and as described in the Prospectus or until refunds of such funds have been made to the persons entitled thereto or withdrawal authorizations canceled in accordance with the Plan and as described in the Prospectus. The Bank will maintain such records of all funds received to permit the funds of each subscriber to be separately insured by the FDIC (to the maximum extent allowable) and to enable the Bank to make the appropriate refunds of such funds in the event that such refunds are required to be made in accordance with the Plan and as described in the Prospectus. + +(v) The Company will report the use of proceeds of the Offering in accordance with Rule 463 under the 1933 Act. + +(w) The Company will promptly take all necessary action to register as savings and loan holding company under the HOLA. + +(x) The Company and the Bank will take such actions and furnish such information as are reasonably requested by the Agent in order for the Agent to ensure compliance with the FINRA Rule 2790. + +(y) Neither the Company nor the Bank, will amend the Plan without notifying the Agent and the Agent's counsel prior thereto. + +(z) The Company shall assist the Agent, if necessary, in connection with the allocation of the Shares in the event of an oversubscription and shall provide the Agent with any information necessary to assist the Company in allocating the Shares in such event and such information shall be accurate and reliable in all material respects. + +(aa) Prior to the Closing Date, the Company will inform the Agent of any event or circumstances of which it is aware as a result of which the Registration Statement and/or Prospectus, as then amended or supplemented, would contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein not misleading. + +(bb) The Company will not deliver the Shares until the Company and the Bank have satisfied or caused to be satisfied each condition set forth in Section 8 hereof, unless such condition is waived in writing by the Agent. + +(cc) Subsequent to the date the Registration Statement is declared effective by the Commission and prior to the Closing Date, except as otherwise may be indicated or contemplated therein or set forth in an amendment or supplement thereto, neither the Company nor the Bank will have: (i) issued any securities or incurred any liability or obligation, direct or contingent, for borrowed money, except + +18 + + + + + + + +borrowings from the same or similar sources indicated in the Prospectus in the ordinary course of its business, or (ii) entered into any transaction which is material in light of the business and properties of the Company and the Bank, taken as a whole. + +(dd) The Company shall use its best efforts to ensure that the Foundation submits, within the time frames required by applicable law, a request to the Internal Revenue Service to be recognized as a tax-exempt organization under Section 501(c)(3) of the Internal Revenue Code, as amended. The Company will not take any action which will result in the possible loss of the Foundation's tax exempt status. + +(ee) Until the Closing Date, the Company and the Bank will conduct their businesses in compliance in all material respects with all applicable federal and state laws, rules, regulations, decisions, directives and orders, including all decisions, directives and orders of the Commission, the FDIC and the OTS. + +(ff) The Company and the Bank shall comply in all material respects with any and all terms, conditions, requirements and provisions with respect to the Offering imposed by the OTS, the Conversion Regulations, the Commission, the 1933 Act and the 1933 Act Regulations, the 1934 Act and the 1934 Act Regulations to be complied with subsequent to the Closing Date. The Company will comply with all provisions of all undertakings contained in the Registration Statement. + +(gg) The facts and representations provided to Kilpatrick Stockton LLP by the Bank and the Company and upon which Kilpatrick Stockton LLP will base its opinion under Section 8(c)(1) are and will be truthful, accurate and complete. + +(hh) The Company and the Bank will not distribute any offering material in connection with the Offering except for the Prospectus and any supplemental sales material that has been filed with the Registration Statement and the Form AC and authorized for use by the Commission and the OTS. The information contained in any supplemental sales material (in addition to the supplemental sales material filed as an exhibit to the Registration Statement and the Form AC) shall not conflict with the information contained in the Registration Statement and the Prospectus. + +(ii) The Company will comply with all applicable provisions of the Sarbanes-Oxley Act of 2002 and all applicable rules, regulations, guidelines and interpretations promulgated thereunder by the Commission. + +Section 7. Payment of Expenses. Whether or not the Conversion is completed or the sale of the Shares by the Company is consummated, the Company and the Bank jointly and severally agree to pay or reimburse the Agent for: (a) all filing fees in connection with all filings related to the Conversion with the FINRA; (b) any stock issue or transfer taxes which may be payable with respect to the sale of the Shares; (c) subject to Section 2(d), all expenses of the Conversion, including but not limited to the Agent's attorneys' fees and expenses, blue sky fees, transfer agent, registrar and other agent charges, fees relating to auditing and accounting or other advisors and costs of printing all documents necessary in connection with the Offering. In the event the Company is unable to sell the minimum number of shares necessary to complete the Conversion or the Conversion is terminated or otherwise abandoned, the Company and the Bank shall promptly reimburse the Agent in accordance with Section 2(d) hereof. + +In the event that the Agent incurs any expenses on behalf of the Company or the Bank that are customarily borne by the issuer, the Company and the Bank will pay or reimburse the Agent for such expenses regardless of whether the Offering is successfully completed, and such reimbursements will not be included in the expense limitations set forth in Section 2(d) hereof. The Company and the Bank acknowledge, however, that such limitations may be increased by the mutual consent of the Bank and Agent in the event of delay in the Offering requiring the Agent to utilize a Syndicated Community Offering, a delay as a result of circumstances requiring material additional work by Agent or its counsel + +19 + + + + + + + +or an update of the financial information in tabular form contained in the Prospectus for a period later than [December 31, 2009] . Not later than two days prior to the Closing Date, the Agent will provide the Company with an accounting of all reimbursable expenses to be paid at the Closing in next day funds. In the event the Bank determines to abandon or terminate the Conversion prior to Closing, payment of such expenses shall be made in next day funds on the date such determination is made. + +Section 8. Conditions to the Agent's Obligations. The obligations of the Agent hereunder, as to the Shares to be delivered at the Closing Date, are subject, to the extent not waived in writing by the Agent, to the condition that all representations and warranties of the Company and the Bank, herein are, at and as of the commencement of the Offering and at and as of the Closing Date, true and correct in all material respects, the condition that the Company and the Bank shall have performed all of its obligations hereunder to be performed on or before such dates, and to the following further conditions: + +(a) At the Closing Date, the Company and the Bank shall have conducted the Conversion in all material respects in accordance with the Plan, the Conversion Regulations, the applicable laws of Tennessee, and all other applicable laws, regulations, decisions and orders, including all terms, conditions, requirements and provisions precedent to the Conversion imposed upon them by the OTS. + +(b) The Registration Statement shall have been declared effective by the Commission and the Form AC and Holding Company Application shall have been approved by the OTS not later than 5:30 p.m. on the date of this Agreement, or with the Agent's consent at a later time and date; and at the Closing Date, no stop order suspending the effectiveness of the Registration Statement shall have been issued under the 1933 Act or proceedings therefore initiated or threatened by the Commission or any state authority, and no order or other action suspending the authorization of the Prospectus or the consummation of the Conversion shall have been issued or proceedings therefore initiated or, to the Company's or the Bank's knowledge, threatened by the Commission, the OTS, the FDIC or any other state authority. + +(c) At the Closing Date, the Agent shall have received: + +(1) The favorable opinion, dated as of the Closing Date and addressed to the Agent and for its benefit, of Kilpatrick Stockton LLP special counsel for the Company and the Bank in form and substance to the effect that: + +(i) The Company has been duly incorporated and is validly existing as a corporation under the laws of the State of Tennessee. + +(ii) The Company has corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Form AC, the Registration Statement, the Prospectus and the General Disclosure Package. + +(iii) The Bank is a validly existing federally-chartered savings bank in mutual form and immediately following the completion of the Conversion will be a validly-existing federally-chartered savings bank in stock form and, in both instances duly authorized to conduct its business and own its property as described in the Registration Statement and the Prospectus. All of the outstanding capital stock of the Bank, upon completion of the Conversion, will be duly authorized and, upon payment therefor, validly issued, fully-paid and non-assessable and will be owned by the Company, free and clear of any liens, encumbrances, claims or other restrictions. + +(iv) The Bank is a member of the FHLB-Cincinnati. The deposit accounts of the Bank are insured by the FDIC up to the maximum amount allowed under law and no proceedings for the termination or revocation of such insurance are pending or threatened. The description of the liquidation account as set forth in the Prospectus under the caption "The Conversion and Stock Offering — Effects of + +20 + + + + + + + +Conversion to Stock Form — Liquidation Account," to the extent that such information constitutes matters of law and legal conclusions, has been reviewed by such counsel and is accurately described in all material respects. + +(v) The only subsidiaries of the Bank are Southland Finance, Inc., Ti-Serv, Inc. and Valley Title Services, LLC. The operations of the Subsidiaries are not material to financial condition, results of operations, capital, properties or business prospects of the Company and the Bank, taken as a whole. The Subsidiaries have been duly organized and are validly existing as corporations in good standing under the laws of Tennessee, have full corporate power and authority to own, lease and operate their properties and to conduct their respective businesses as described in the Registration Statement and Prospectus, and are duly qualified as foreign corporations to transact business and are in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure to so qualify would not have a Material Adverse Effect. Each Subsidiary has obtained all licenses, permits and other governmental authorizations required for the conduct of their businesses and all such licenses, permits and other governmental authorizations are in full force and effect and the Subsidiaries are in all material respects complying therewith; the activities of the Subsidiaries are permitted to subsidiaries of a federally chartered savings bank by the rules, regulations and practices of the Federal Deposit Insurance Corporation ("FDIC") and the OTS in the case of the Bank; all of the issued and outstanding capital stock of each Subsidiary has been duly authorized and validly issued, is fully paid and non-assessable and is owned by the Bank, free and clear of any security interest, mortgage, pledge, lien, encumbrance or legal or equitable claim; and there are no warrants, options or rights of any kind to acquire shares of capital stock of any Subsidiary. + +(vi) The Foundation has been duly organized and is validly existing as a non-stock corporation in good standing under the laws of the State of Delaware with corporate power and authority to conduct its business as described in the Prospectus; to the knowledge of Company and the Agent, all approvals required to establish the Foundation and to contribute the Foundation Shares thereto have been obtained as described in the Prospectus; except as specifically disclosed in the Prospectus and the Proxy Statement, there are no agreements and/or understandings, written or oral or otherwise, between any of the Company, the Agent and the Foundation with respect to the control, directly or indirectly, over the voting and the acquisition or disposition of the shares of Common Stock to be contributed by the Company to the Foundation; the Foundation Shares to be issued to the Foundation in accordance with the Plan and as described in the Prospectus will have been duly and validly authorized for issuance and, when issued and contributed by the Company pursuant to the Plan, will be duly authorized and validly issued and fully paid and non-assessable. Upon issuance of the Foundation Shares, good title to the Foundation Shares will be transferred from the Company to the Foundation, subject to such claims as may be asserted against the Foundation by third-party claimants. + +(vii) The authorized equity capital of the Company consists of shares of common stock and shares of preferred stock. Immediately following the consummation of the Offering and the issuance of the Foundation Shares to the Foundation, the authorized, issued and outstanding Common Shares of the Company will be within the range set forth in the Prospectus under the caption "Capitalization," and no shares of capital stock of the Company have been issued prior to the Closing Date; at the time of the Offering, the Common Shares subscribed for pursuant to the Conversion will have been duly and validly authorized for issuance, and when issued and delivered by the Company pursuant to the Plan against payment of the consideration calculated as set forth in the Plan and Prospectus, will be duly and validly issued and fully paid and non-assessable, except for shares purchased by the ESOP with funds borrowed from the Company and shares issued and contributed to the Foundation by the Company to the extent payment therefor in cash has not been received by the Company; except to the extent that subscription rights and priorities pursuant thereto exist pursuant to the Plan, the issuance of the Shares is not subject to preemptive rights (other than subscription rights as provided in the Plan) and the terms and provisions of the Shares conform in all material respects to the description thereof contained in the + +21 + + + + + + + +Prospectus. The Shares will not, when issued, be subject to any liens, charges, encumbrances or other claims created by the Company. + +(viii) The Company and the Bank have full corporate power and authority to enter into this Agreement and to consummate the transactions contemplated thereby and by the Plan. The execution and delivery of this Agreement and the consummation of the Offering, including the establishment of the Foundation and the issuance of shares to the Foundation, have been duly and validly authorized by all necessary action on the part of the Company and the Bank; and this Agreement is a valid and binding obligation of the Company and the Bank, enforceable against the Company and the Bank, in accordance with its terms, except as the enforceability thereof may be limited by (i) bankruptcy, insolvency, reorganization, moratorium, conservatorship, receivership or other similar laws now or hereafter in effect relating to or affecting the enforcement of creditors' rights generally or the rights of creditors of federally chartered savings institutions or holding companies as applicable, (ii) general equitable principles, (iii) laws relating to the safety and soundness of insured depository institutions, and (iv) applicable law or public policy with respect to the indemnification and/or contribution provisions contained herein and except that no opinion need be expressed as to the effect or availability of equitable remedies or injunctive relief (regardless of whether such enforceability is considered in a proceeding in equity or at law). + +(ix) The Form AC and the Holding Company Application have been approved by the OTS, the Prospectus has been authorized for use by the OTS, and the acquisition by the Company of all of the issued and outstanding capital stock of the Bank has been approved by the OTS and no action has been taken, and none is pending or threatened, to revoke any such authorization or approval. + +(x) To such counsel's knowledge, the OTS's approval or non-objection of the Plan remains in full force and effect; each of the Form AC, the Holding Company Application, and Plan comply in all material respects with the regulations of the OTS (other than the financial statements, notes to financial statements, stock valuation information and other financial, tabular and statistical data included therein, as to which no opinion need be rendered). Such counsel has been advised by the OTS staff and Commission staff that no order has been issued by any other state authority, to prevent the Conversion or the offer, sale or issuance of the Shares, or to suspend the Offering or the use of the Prospectus, and no action for such purposes has been instituted or, to the knowledge of such counsel, threatened by the OTS, the Commission or any other state authority; and, to the knowledge of such counsel, no person has sought to obtain regulatory or judicial review of the final action of the OTS approving the Plan, the Form AC, the Holding Company Application or the Prospectus or to otherwise prevent the Conversion or the offer, sale or issuance of the Shares. + +(xi) The Plan has been duly adopted by the required vote of the directors of the Company and the Bank and by the required vote of the Bank's members. + +(xii) Subject to the satisfaction of the conditions to the OTS's approval of the Conversion and the Holding Company Application, no further approval, registration, authorization, consent or other order of any federal regulatory agency is required in connection with the execution and delivery of this Agreement, the consummation of the Conversion and the issuance of the Shares, including the issuance of shares to the Foundation, except as may be required under the securities or blue sky laws of various jurisdictions (as to which no opinion need be rendered) and except as may be required under the rules and regulations of the FINRA (as to which no opinion need be rendered). + +(xiii) The Registration Statement is effective under the 1933 Act; and any required filing of the Prospectus and any Permitted Free Writing Prospectus pursuant to Rule 424(b) or Rule 433 has been made within the time period required by Rule 424(b) or Rule 433; and no stop order suspending the effectiveness has been issued under the 1933 Act or proceedings therefor initiated or, to such counsel's Actual Knowledge, threatened by the Commission. + +22 + + + + + + + +(xiv) At the time the Form AC, including the Prospectus contained therein, was approved by the OTS, the Form AC, including the Prospectus contained therein, complied as to form in all material respects with the requirements of the Conversion Regulations except as waived or otherwise approved by the OTS (other than the financial statements, the notes thereto, and other tabular, financial, statistical and appraisal data included therein, as to which no opinion need be rendered). + +(xv) At the time the Holding Company Application was approved by the OTS, the Holding Company Application complied as to from in all material respects with the requirements and the rules and regulations of the OTS (except as waived or otherwise approved by the OTS, and other than the financial statement, the notes thereto, and other tabular, financial, statistical and appraisal data included therein, as to which no opinion need be rendered). + +(xvi) At the time that the Registration Statement became effective, (i) the Registration Statement (as amended or supplemented, if so amended or supplemented) (other than the financial statements, the notes thereto, and other tabular, financial, statistical and appraisal data included therein, as to which no opinion need be rendered), complied as to form in all material respects with the requirements of the 1933 Act and the 1933 Act Regulations, and (ii) the Prospectus (other than the financial statements, the notes thereto, and other tabular, financial, statistical and appraisal data included therein, as to which no opinion need be rendered) complied as to form in all material respects with the requirements of the 1933 Act and the 1933 Act Regulations. + +(xvii) The terms and provisions of the shares of common stock of the Company conform, in all material respects, to the description thereof contained in the Registration Statement, the General Disclosure Package and Prospectus, and the form of certificate used to evidence the Shares complies with applicable laws. + +(xviii) There are no legal or governmental proceedings pending or threatened (i) asserting the invalidity of this Agreement, (ii) seeking to prevent the Conversion or the offer, sale or issuance of the Shares, including the establishment of the Foundation and the issuance of shares thereto, or (iii) which are required to be disclosed in the Registration Statement and Prospectus, other than those disclosed therein. + +(xix) Neither the Company nor the Bank are required to be registered as an investment company under the Investment Company Act of 1940. + +(xx) Neither the Company nor the Bank is in violation of any directive from the OTS or the FDIC to make any material change in the method of conducting its respective business. + +(xxi) There are no material contracts, indentures, mortgages, loan agreements, notes, leases or other instruments required to be described or referred to in the Form AC, the Registration Statement, the General Disclosure Package or the Prospectus or required to be filed as exhibits thereto other than those described or referred to therein or filed as exhibits thereto in the Form AC, the Registration Statement, the General Disclosure Package or the Prospectus. The description in the Form AC, the Registration Statement, the General Disclosure Package and the Prospectus of such documents and exhibits is accurate in all material respects and fairly presents the information required to be shown. + +(xxii) Except as waived or otherwise approved by the OTS, the Plan complies in all material respects with all applicable federal law, rules, regulations, decisions and orders including, but not limited to, the Conversion Regulations; the Conversion, including the establishment of the Foundation and the issuance of shares thereto, has been effected by the Company's and the Bank in all material respects in accordance with the Conversion Regulations and the OTS approvals issued thereunder; no order has been issued by the OTS, the Commission, the FDIC, or any state authority to suspend the Offering or the use of the Prospectus, and no action for such purposes has been instituted or threatened by the OTS, the Commission, the FDIC, or any other state authority and, to such counsel's Actual + +23 + + + + + + + +Knowledge, no person has sought to obtain regulatory or judicial review of the final action of the OTS approving the Plan, the Form AC, the Holding Company Application or the Prospectus. + +(xxiii) The Company, and the Bank have obtained all licenses, permits and other governmental authorizations currently required for the conduct of their businesses as described in the Registration Statement, and all such licenses, permits and other governmental authorizations are in full force and effect, and the Company and the Bank are in all material respects complying therewith. + +(xxiv) Neither the Company nor the Bank is in violation of its Charter and Bylaws or in default or violation of any obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, loan agreement, note, lease or other instrument to which it is a party or by which it or its property may be bound, except for such defaults or violations which would not have a material adverse impact on the financial condition or results of operations of the Company and the Bank on a consolidated basis; the execution and delivery of this Agreement, the incurrence of the obligations herein set forth and the consummation of the transactions contemplated herein will not, in any material respect, conflict with or constitute a breach of, or default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or the Bank pursuant to any material contract, indenture, mortgage, loan agreement, note, lease or other instrument to which the Company or the Bank is a party or by which any of them may be bound, or to which any of the property or assets of the Company or the Bank are subject; and such action will not result in any violation of the provisions of the Charter or Bylaws of the Company or the Bank, or result, in any material respect, in any violation of any applicable federal or state law, act, regulation (except that no opinion with respect to the securities and blue sky laws of various jurisdictions or the rules or regulations of the FINRA need be rendered) or order or court order, writ, injunction or decree. + +(xxv) The Company's Charter and Bylaws comply in all material respects with the laws of the State of Tennessee. The Bank's Charter and Bylaws each comply in all material respects with the laws of the United States of America. + +(xxvi) The information in the Prospectus under the captions "Regulation and Supervision," "Federal and State Taxation," "The Conversion and Stock Offering," "Restrictions on the Acquisition of Athens Bancshares Corporation and Athens Federal Community Bank," "Description of Athens Bancshares Corporation Capital Stock" and "Athens Federal Foundation," to the extent that such information constitutes matters of law, summaries of legal matters, documents or proceedings, or legal conclusions, has been reviewed by such counsel and is accurate in all material respects. The description of the Offering process in the Prospectus under the caption "The Conversion and Stock Offering" to the extent that such information constitutes matters of law, summaries of legal matters, documents or proceedings, or legal conclusions, has been reviewed by such counsel and fairly describes such process in all material respects. The descriptions in the Prospectus of statutes or regulations are accurate summaries and fairly present, in all material respects, the information required to be shown. The information under the caption "The Conversion and Stock Offering — Material Income Tax Consequences" has been reviewed by such counsel and fairly describes the federal and state tax opinions rendered by them and Hazlett, Lewis & Bieter, PLLC, respectively, to the Company and the Bank with respect to such matters. + +In addition, such counsel shall state that during the preparation of the Form AC, the Holding Company Application, the Registration Statement, the Prospectus and the General Disclosure Package, they participated in conferences with certain officers of, the independent public and internal accountants for, and other representatives of, the Company and the Bank, at which conferences the contents of the Form AC, the Holding Company Application, the Registration Statement, the Prospectus and the General Disclosure Package and related matters were discussed and, while such counsel have not confirmed the accuracy or completeness of or otherwise verified the information contained in the Form AC, the Holding Company Application, the Registration Statement or the Prospectus or the General Disclosure Package and do not assume any responsibility for such information, based upon such conferences and a review of + +24 + + + + + + + +documents deemed relevant for the purpose of rendering their opinion (relying as to materiality as to factual matters on certificates of officers and other factual representations by the Company), nothing has come to their attention that would lead them to believe that the Form AC, the Holding Company Application, the Registration Statement, the Prospectus, the General Disclosure Package or any amendment or supplement thereto as of the Applicable Time (other than the financial statements, the notes thereto, and other tabular, financial, statistical and appraisal data included therein as to which no view need be rendered) contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. + +In giving such opinion, such counsel may rely as to all matters of fact on certificates of officers or directors of the Company and the Bank and certificates of public officials. Such counsel's opinion shall be limited to matters governed by federal laws and by the laws of Tennessee and with respect to enforceablity, New York law, and may add other qualifications and explanations on the basis of this opinion as may be reasonably acceptable to the Agent. + +(d) A Blue Sky Memorandum from Kilpatrick Stockton LLP relating to the Offering, including Agent's participation therein, and should be furnished to the Agent with a copy thereof addressed to Agent or upon which Kilpatrick Stockton LLP shall state the Agent may rely. The Blue Sky Memorandum will relate to the necessity of obtaining or confirming exemptions, qualifications or the registration of the Shares under applicable state securities law. + +(e) At the Closing Date, the Agent shall receive a certificate of the Chief Executive Officer and the Chief Financial Officer of the Company in form and substance reasonably satisfactory to the Agent's Counsel, dated as of such Closing Date, to the effect that: (i) they have carefully examined the Prospectus and, in their opinion, at the time the Prospectus became authorized for final use, the Prospectus did not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; (ii) since the date the Prospectus became authorized for final use, no event has occurred which should have been set forth in an amendment or supplement to the Prospectus which has not been so set forth, including specifically, but without limitation, any material adverse change in the condition, financial or otherwise, or in the earnings, capital, properties or business of the Company or the Bank and the conditions set forth in this Section 8 have been satisfied; (iii) since the respective dates as of which information is given in the Registration Statement, the General Disclosure Package and the Prospectus, there has been no material adverse change in the condition, financial or otherwise, or in the earnings, capital, properties or business of the Company or the Bank independently, or of the Company and the Bank considered as one enterprise, whether or not arising in the ordinary course of business; (iv) the representations and warranties in Section 4 are true and correct with the same force and effect as though expressly made at and as of the Closing Date; (v) the Company has complied in all material respects with all agreements and satisfied all conditions on their part to be performed or satisfied at or prior to the Closing Date and will comply in all material respects with all obligations to be satisfied by them after the Closing Date; (vi) no stop order suspending the effectiveness of the Registration Statement has been initiated or, to the best knowledge of the Company or the Bank, threatened by the Commission or any state authority; (vii) no order suspending the Conversion, the Offering or the effectiveness of the Prospectus has been issued and no proceedings for that purpose are pending or, to the best knowledge of the Company or the Bank, threatened by the OTS, the Commission, the FDIC, or any state authority; and (viii) to the best knowledge of the Company or the Bank, no person has sought to obtain review of the final action of the OTS approving the Conversion. + +(f) Neither the Company or the Bank shall have sustained, since the date of the latest financial statements included in the Registration Statement, the General Disclosure Package and Prospectus, any material loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, + +25 + + + + + + + +otherwise than as set forth in the Registration Statement and the Prospectus, and since the respective dates as of which information is given in the Registration Statement and the Prospectus, there shall not have been any Material Adverse Effect on the financial condition, results of operations, or business of the Company or the Bank that is in the Agent's reasonable judgment sufficiently material and adverse as to make it impracticable or inadvisable to proceed with the Offering or the delivery of the Shares on the terms and in the manner contemplated in the Prospectus. + +(g) Prior to and at the Closing Date: (i) in the reasonable opinion of the Agent, there shall have been no material adverse change in the financial condition, results of operations or business of the Company and the Bank considered as one enterprise, from that as of the latest dates as of which such condition is set forth in the Prospectus, other than transactions referred to or contemplated therein; (ii) neither the Company nor the Bank shall have received from the OTS or the FDIC any direction (oral or written) to make any material change in the method of conducting their business with which it has not complied (which direction, if any, shall have been disclosed to the Agent) or which materially and adversely would affect the financial condition, results of operations or business of the Company and the Bank taken as a whole; (iii) neither the Company or the Bank shall have been in default (nor shall an event have occurred which, with notice or lapse of time or both, would constitute a default) under any provision of any agreement or instrument relating to any outstanding indebtedness; (iv) no action, suit or proceeding, at law or in equity or before or by any federal or state commission, board or other administrative agency, not disclosed in the Prospectus, shall be pending or, to the knowledge of the Company or the Bank, threatened against the Company or the Bank or affecting any of their properties wherein an unfavorable decision, ruling or finding would materially and adversely affect the financial condition, results of operations or business of the Company and the Bank taken as a whole; and (v) the Shares shall have been qualified or registered for offering and sale or exempted therefrom under the securities or blue sky laws of the jurisdictions as the Agent shall have reasonably requested and as agreed to by the Company and the Bank. + +(h) Concurrently with the execution of this Agreement, the Agent shall receive a letter from Hazlett, Lewis & Bieter, PLLC, dated as of the date hereof and addressed to the Agent: (i) confirming that Hazlett, Lewis & Bieter, PLLC is a firm of independent registered public accountants within the applicable rules of the Public Company Accounting Oversight Board (United States) and stating in effect that in its opinion the consolidated financial statements and related notes of the Company as of December 31, 2008, and for each of the years in the three-year period ended December 31, 2008, and covered by their opinion included therein, and any other more recent unaudited financial statements included in the Prospectus comply as to form in all material respects with the applicable accounting requirements and related published rules and regulations of the OTS and the 1933 Act; (ii) stating in effect that, on the basis of certain agreed upon procedures (but not an audit in accordance with standards of the Public Company Accounting Oversight Board (United States)) consisting of a reading of the latest available consolidated financial statements of the Company prepared by the Company, a reading of the minutes of the meetings of the Board of Directors, Executive Committee and Audit Committee of the Company and the Bank and consultations with officers of the Company and the Bank responsible for financial and accounting matters, nothing came to their attention which caused them to believe that: + +(A) audited consolidated financial statements and any unaudited interim financial statements included in the Prospectus are not in conformity with the 1933 Act, applicable accounting requirements of the OTS and accounting principles generally accepted in the United States of America applied on a basis substantially consistent with that of the audited consolidated financial statements included in the Prospectus; or + +(B) during the period from the date of the latest financial statements included in the Prospectus to a specified date not more than three business days prior to the date of the Prospectus, except as has been described in the Prospectus, there was any increase in borrowings of the Company, other than normal deposit fluctuations for the Bank; or (C) there was any decrease in the net assets of the Company + +26 + + + + + + + +at the date of such letter as compared with amounts shown in the latest balance sheet included in the Prospectus; and (iii) stating that, in addition to the audit referred to in their opinion included in the Prospectus and the performance of the procedures referred to in clause (ii) of this subsection (h), they have compared with the general accounting records of the Company, which are subject to the internal controls of the Company, the accounting system and other data prepared by the Company, directly from such accounting records, to the extent specified in such letter, such amounts and/or percentages set forth in the Prospectus as the Agent may reasonably request; and they have found such amounts and percentages to be in agreement therewith (subject to rounding). + +(i) At the Closing Date, the Agent shall receive a letter dated the Closing Date, addressed to the Agent, confirming the statements made by Hazlett, Lewis & Bieter, PLLC in the letter delivered by it pursuant to subsection (g) of this Section 8, the "specified date" referred to in clause (i) of subsection (h) to be a date specified in the letter required by this subsection (h) which for purposes of such letter shall not be more than three business days prior to the Closing Date. + +(j) At the Closing Date, the Company shall receive a letter from Keller & Company, Inc., dated the Closing Date (i) confirming that said firm is independent of the Company and the Bank and is experienced and expert in the area of corporate appraisals within the meaning of Title 12 of the Code of Federal Regulations, Section 563b.200(b), (ii) stating in effect that the Appraisal prepared by such firm complies in all material respects with the applicable requirements of Title 12 of the Code of Federal Regulations, and (iii) further stating that its opinion of the aggregate pro forma market value of the Company including the Bank, as most recently updated, remains in effect. + +(k) At or prior to the Closing Date, the Agent shall receive: (i) a copy of the letters from the OTS approving the Form AC, the Holding Company Application and authorizing the use of the Prospectus and the establishment of the Foundation, including the issuance of shares thereto; (ii) a copy of the orders from the Commission declaring the Registration Statement and the Exchange Act Registration Statement effective; (iii) a certificate from the OTS evidencing the valid existence of the Company and the Bank; (iv) a certificate from the FDIC evidencing the Bank's insurance of accounts; (v) a certificate from the FHLB-Cincinnati evidencing the Bank's membership therein; and (vi) a certified copy of the Bank's Charter and Bylaws. + +(l) Subsequent to the date hereof, there shall not have occurred any of the following; (i) a suspension or limitation in trading in securities generally on the New York Stock Exchange (the "NYSE") or in the over-the-counter market, or quotations halted generally on The Nasdaq Stock Market, or minimum or maximum prices for trading have been fixed, or maximum ranges for prices for securities have been required by either of such exchanges or the Nasdaq Stock Market or by order of the Commission or any other governmental authority; (ii) a general moratorium on the operations of commercial banks, or federal savings and loan associations or a general moratorium on the withdrawal of deposits from commercial banks or federal savings and loan associations declared by federal or state authorities; (iii) the engagement by the United States in hostilities which have resulted in the declaration, on or after the date hereof, of a national emergency or war; or (iv) a material decline in the price of equity or debt securities if the effect of such a declaration or decline, in the Agent's reasonable judgment, makes it impracticable or inadvisable to proceed with the Offering or the delivery of the Shares on the terms and in the manner contemplated in the Registration Statement and the Prospectus. + +(m) At or prior to the Closing Date, counsel to the Agent shall have been furnished with such documents and opinions as they may reasonably require for the purpose of enabling them to pass upon the sale of the Shares as herein contemplated and related proceedings or in order to evidence the occurrence or completeness of any of the representations or warranties, or the fulfillment of any of the conditions, herein contained; and all proceedings taken by the Company and the Bank in connection with the sale of the Shares as herein contemplated shall be satisfactory in form and substance to the Agent and its counsel. + +27 + + + + + + + +(n) All such opinions, certificates, letters and documents will be in compliance with the provisions hereof only if they are reasonably satisfactory in form and substance to the Agent and to counsel for the Agent. Any certificate signed by an officer of the Company or the Bank and delivered to the Agent or to counsel for the Agent shall be deemed a representation and warranty by the Company or the Bank, as the case may be, to the Agent as to the statements made therein. + +Section 9. Indemnification. + +(a) The Company and the Bank jointly and severally agree to indemnify and hold harmless the Agent, its officers and directors, employees and agents, and each person, if any, who controls the Agent within the meaning of Section 15 of the 1933 Act or Section 20(a) of the 1934 Act, against any and all loss, liability, claim, damage or expense whatsoever (including, but not limited to, settlement expenses), joint or several, that the Agent or any of them may suffer or to which the Agent and any such persons may become subject under all applicable federal or state laws or otherwise, and to promptly reimburse the Agent and any such persons upon written demand for any expense (including all fees and disbursements of counsel) incurred by the Agent or any of them in connection with investigating, preparing or defending any actions, proceedings or claims (whether commenced or threatened) to the extent such losses, claims, damages, liabilities or actions: (i) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment or supplement thereto), the General Disclosure Package, any Issuer-Represented Limited-Use Free Writing Prospectus, preliminary or final Prospectus (or any amendment or supplement thereto), the Form AC (or any amendment or supplement thereto), the Holding Company Application (or any amendment or supplement thereto) or any instrument or document executed by the Company or the Bank or based upon written information supplied by the Company filed in any state or jurisdiction to register or qualify any or all of the Shares or to claim an exemption therefrom or provided to any state or jurisdiction to exempt the Company or the Bank as a broker-dealer or its officers, directors and employees as broker-dealers or agents, under the securities laws thereof (collectively, the "Blue Sky Application"), or any document, advertisement, oral statement or communication ("Sales Information") prepared, made or executed by or on behalf of the Company or the Bank with its consent and based upon written or oral information furnished by or on behalf of the Company or the Bank, whether or not filed in any jurisdiction, in order to qualify or register the Shares or to claim an exemption therefrom under the securities laws thereof; (ii) arise out of or are based upon the omission or alleged omission to state in any of the foregoing documents or information a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; or (iii) arise from any theory of liability whatsoever relating to or arising from or based upon the Registration Statement (or any amendment or supplement thereto), preliminary or final Prospectus (or any amendment or supplement thereto), the General Disclosure Package, any Issuer-Represented Limited-Use Free Writing Prospectus, the Form AC (or any amendment or supplement thereto) the Holding Company Application (or any amendment or supplement thereto), any Blue Sky Application or Sales Information or other documentation distributed in connection with the Conversion; provided, however, that no indemnification is required under this paragraph (a) to the extent such losses, claims, damages, liabilities or actions arise out of or are based upon any untrue material statement or alleged untrue material statement in, or material omission or alleged material omission from, the Registration Statement (or any amendment or supplement thereto), preliminary or final Prospectus (or any amendment or supplement thereto), the General Disclosure Package, any Issuer- Represented Limited-Use Free Writing Prospectus, the Form AC, the Holding Company Application, any Blue Sky Application or Sales Information made in reliance upon and in conformity with information furnished in writing to the Company, by the Agent or its counsel regarding the Agent, and provided, that it is agreed and understood that the only information furnished in writing to the Company, by the Agent regarding the Agent is set forth in the Prospectus under the caption "The Conversion and Stock Offering — Marketing Arrangements"; and, provided further, that such indemnification shall be limited to the extent prohibited by the Commission, the OTS, the FDIC and the Board of Governors of the Federal Reserve System. + +28 + + + + + + + +(b) The Agent agrees to indemnify and hold harmless the Company and the Bank, their directors and officers and each person, if any, who controls the Company or the Bank within the meaning of Section 15 of the 1933 Act or Section 20(a) of the 1934 Act against any and all loss, liability, claim, damage or expense whatsoever (including but not limited to settlement expenses), joint or several, which they, or any of them, may suffer or to which they, or any of them may become subject under all applicable federal and state laws or otherwise, and to promptly reimburse the Company, the Bank, and any such persons upon written demand for any expenses (including reasonable fees and disbursements of counsel) incurred by them, or any of them, in connection with investigating, preparing or defending any actions, proceedings or claims (whether commenced or threatened) to the extent such losses, claims, damages, liabilities or actions: (i) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment or supplement thereto), the Form AC (or any amendment or supplement thereto), the Holding Company Application, the preliminary or final Prospectus (or any amendment or supplement thereto), any Blue Sky Application or Sales Information, (ii) are based upon the omission or alleged omission to state in any of the foregoing documents a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, or (iii) arise from any theory of liability whatsoever relating to or arising from or based upon the Registration Statement (or any amendment or supplement thereto), preliminary or final Prospectus (or any amendment or supplement thereto), the Form AC (or any amendment or supplement thereto), the Holding Company Application, or any Blue Sky Application or Sales Information or other documentation distributed in connection with the Offering; provided, however, that the Agent's obligations under this Section 9(b) shall exist only if and only to the extent that such untrue statement or alleged untrue statement was made in, or such material fact or alleged material fact was omitted from, the Registration Statement (or any amendment or supplement thereto), the preliminary or final Prospectus (or any amendment or supplement thereto), the Form AC (or any amendment or supplement thereto), the Holding Company Application, any Blue Sky Application or Sales Information in reliance upon and in conformity with information furnished in writing to the Company or the Bank, by the Agent or its counsel regarding the Agent, and provided, that it is agreed and understood that the only information furnished in writing to the Company or the Bank, by the Agent regarding the Agent is set forth in the Prospectus under the caption "The Conversion and Stock Offering — Marketing Arrangements." + +(c) Each indemnified party shall give prompt written notice to each indemnifying party of any action, proceeding, claim (whether commenced or threatened), or suit instituted against it in respect of which indemnity may be sought hereunder, but failure to so notify an indemnifying party shall not relieve it from any liability which it may have on account of this Section 9 or otherwise. An indemnifying party may participate at its own expense in the defense of such action. In addition, if it so elects within a reasonable time after receipt of such notice, an indemnifying party, jointly with any other indemnifying parties receiving such notice, may assume defense of such action with counsel chosen by it and approved by the indemnified parties that are defendants in such action, unless such indemnified parties reasonably object to such assumption on the ground that there may be legal defenses available to them that are different from or in addition to those available to such indemnifying party. If an indemnifying party assumes the defense of such action, the indemnifying parties shall not be liable for any fees and expenses of counsel for the indemnified parties incurred thereafter in connection with such action, proceeding or claim, other than reasonable costs of investigation. In no event shall the indemnifying parties be liable for the fees and expenses of more than one separate firm of attorneys (and any special counsel that said firm may retain) for each indemnified party in connection with any one action, proceeding or claim or separate but similar or related actions, proceedings or claims in the same jurisdiction arising out of the same general allegations or circumstances. + +Section 10. Contribution. In order to provide for just and equitable contribution in circumstances in which the indemnification provided for in Section 9 is due in accordance with its terms but is for any reason held by a court to be unavailable from the Company, the Bank or the Agent, the Company, the Bank and the Agent shall contribute to the aggregate losses, claims, damages and liabilities + +29 + + + + + + + +(including any investigation, legal and other expenses incurred in connection with, and any amount paid in settlement of, any action, suit or proceeding, but after deducting any contribution received by the Company, the Bank or the Agent from persons other than the other parties thereto, who may also be liable for contribution) in such proportion so that the Agent is responsible for that portion represented by the percentage that the fees paid to the Agent pursuant to Section 2 of this Agreement (not including expenses) bears to the gross proceeds received by the Company from the sale of the Shares in the Offering, and the Company and the Bank shall be responsible for the balance. If, however, the allocation provided above is not permitted by applicable law, then each indemnifying party shall contribute to such amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative fault of the Company and the Bank on the one hand and the Agent on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions, proceedings or claims in respect thereto), but also the relative benefits received by the Company and the Bank on the one hand and the Agent on the other from the Offering (before deducting expenses). The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company and the Bank on the one hand or the Agent on the other and the parties' relative intent, good faith, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company, the Bank and the Agent agree that it would not be just and equitable if contribution pursuant to this Section 10 were determined by pro-rata allocation or by any other method of allocation which does not take into account the equitable considerations referred to above in this Section 10. The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions, proceedings or claims in respect thereof) referred to above in this Section 10 shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action, proceeding or claim. It is expressly agreed that the Agent shall not be liable for any loss, liability, claim, damage or expense or be required to contribute any amount pursuant to Section 9(b) or this Section 10 which in the aggregate exceeds the amount paid (excluding reimbursable expenses) to the Agent under this Agreement. It is understood that the above stated limitation on the Agent's liability is essential to the Agent and that the Agent would not have entered into this Agreement if such limitation had not been agreed to by the parties to this Agreement. No person found guilty of any fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not found guilty of such fraudulent misrepresentation. The obligations of the Company, the Bank and the Agent under this Section 10 and under Section 9 shall be in addition to any liability which the Company and the Agent may otherwise have. For purposes of this Section 10, each of the Agent's, the Company's or the Bank's officers and directors and each person, if any, who controls the Agent or the Company or the Bank within the meaning of the 1933 Act and the 1934 Act shall have the same rights to contribution as the Agent on the one hand, or, the Company or the Bank on the other hand. Any party entitled to contribution, promptly after receipt of notice of commencement of any action, suit, claim or proceeding against such party in respect of which a claim for contribution may be made against another party under this Section 10, will notify such party from whom contribution may be sought, but the omission to so notify such party shall not relieve the party from whom contribution may be sought from any other obligation it may have hereunder or otherwise than under this Section 10. + +Section 11. Survival of Agreements, Representations and Indemnities. The respective indemnities of the Company, the Bank and the Agent, the representations and warranties and other statements of the Company, the Bank and the Agent set forth in or made pursuant to this Agreement and the provisions relating to contribution shall remain in full force and effect, regardless of any termination or cancellation of this Agreement or any investigation made by or on behalf of the Agent, the Company, the Bank or any controlling person referred to in Section 9 hereof, and shall survive the termination of this Agreement and the issuance of the Shares, and any successor or assign of the Agent, the Company and the Bank, and any such controlling person shall be entitled to the benefit of the respective agreements, indemnities, warranties and representations. + +30 + + + + + + + +Section 12. Termination. The Agent may terminate this Agreement by giving the notice indicated below in this Section 12 at any time after this Agreement becomes effective as follows: + +(a) If any domestic or international event or act or occurrence has materially disrupted the United States securities markets such as to make it, in the Agent's reasonable opinion, impracticable to proceed with the offering of the Shares; or if trading on the NYSE shall have suspended (except that this shall not apply to the imposition of NYSE trading collars imposed on program trading); or if the United States shall have become involved in a war or major hostilities; or if a general banking moratorium has been declared by a state or federal authority which has a material effect on the Company on a consolidated basis; or if a moratorium in foreign exchange trading by major international banks or persons has been declared; or if there shall have been a material adverse change in the financial condition, results of operations or business of the Bank, or if the Bank shall have sustained a material or substantial loss by fire, flood, accident, hurricane, earthquake, theft, sabotage or other calamity or malicious act, whether or not said loss shall have been insured; or if there shall have been a material adverse change in the financial condition, results of operations or business of the Bank. + +(b) In the event the Company fails to sell the required minimum number of the Shares by the date when such sales must be completed, in accordance with the provisions of the Plan or as required by the Conversion Regulations, and applicable law, this Agreement shall terminate upon refund by the Company to each person who has subscribed for or ordered any of the Shares the full amount which it may have received from such person, together with interest as provided in the Prospectus, and no party to this Agreement shall have any obligation to the other hereunder, except as set forth in Sections 2(a) and (d), 7, 9 and 10 hereof. + +(c) If any of the conditions specified in Section 8 shall not have been fulfilled when and as required by this Agreement, unless waived in writing, or by the Closing Date, this Agreement and all of the Agent's obligations hereunder may be cancelled by the Agent by notifying the Company of such cancellation in writing or by telegram at any time at or prior to the Closing Date, and any such cancellation shall be without liability of any party to any other party except as otherwise provided in Sections 2(a), 2(d), 7, 9 and 10 hereof. + +(d) If the Agent elects to terminate this Agreement as provided in this Section, the Company and the Bank shall be notified promptly by telephone or telegram, confirmed by letter. + +The Company or the Bank may terminate this Agreement in the event the Agent is in material breach of the representations and warranties or covenants contained in Section 5 and such breach has not been cured after the Company or the Bank has provided the Agent with notice of such breach. + +This Agreement may also be terminated by mutual written consent of the parties hereto. + +Section 13. Notices. All communications hereunder, except as herein otherwise specifically provided, shall be mailed in writing and if sent to the Agent shall be mailed, delivered or telegraphed and confirmed to Keefe, Bruyette & Woods, Inc., Investment Banking, 10 South Wacker Drive, Suite 3400, Chicago, Illinois 60606, Attention: Harold T. Hanley, III, Managing Director (with a copy to Silver, Freedman & Taff, L.L.P, 3299 K Street, N.W., Suite 100, Washington, D.C. 20007, Attn: Martin L. Meyrowitz, P.C.) and, if sent to the Company or the Bank, shall be mailed, delivered or telegraphed and confirmed to the Company at 106 Washington Avenue, P.O. Box 869, Athens, Tennessee, 37371-0869, Attn: Jeff Cunningham, President and Chief Executive Officer (with a copy to Kilpatrick Stockton LLP, 607 14th Street, N.W., Suite 900, Washington, D.C., 2005, Attn: Victor L. Cangelosi, Esq.). + +Section 14. Parties. The Company and the Bank shall be entitled to act and rely on any request, notice, consent, waiver or agreement purportedly given on behalf of the Agent when the same shall have been given by the undersigned. The Agent shall be entitled to act and rely on any request, notice, consent, + +31 + + + + + + + +waiver or agreement purportedly given on behalf of the Company or the Bank, when the same shall have been given by the undersigned or any other officer of the Company or the Bank. This Agreement shall inure solely to the benefit of, and shall be binding upon, the Agent, the Company, the Bank and their respective successors and assigns, and no other person shall have or be construed to have any legal or equitable right, remedy or claim under or in respect of or by virtue of this Agreement or any provision herein contained. It is understood and agreed that this Agreement is the exclusive agreement among the parties hereto, and supersedes any prior agreement among the parties and may not be varied except in writing signed by all the parties. + +Section 15. Closing. The closing for the sale of the Shares shall take place on the Closing Date at such location as mutually agreed upon by the Agent and the Company and the Bank. At the closing, the Company and the Bank shall deliver to the Agent in next day funds the commissions, fees and expenses due and owing to the Agent as set forth in Sections 2 and 7 hereof and the opinions and certificates required hereby and other documents deemed reasonably necessary by the Agent shall be executed and delivered to effect the sale of the Shares as contemplated hereby and pursuant to the terms of the Prospectus. + +Section 16. Partial Invalidity. In the event that any term, provision or covenant herein or the application thereof to any circumstance or situation shall be invalid or unenforceable, in whole or in part, the remainder hereof and the application of said term, provision or covenant to any other circumstances or situation shall not be affected thereby, and each term, provision or covenant herein shall be valid and enforceable to the full extent permitted by law. + +Section 17. Construction. This Agreement shall be construed in accordance with the laws of the State of New York without regard to principles of conflicts of law. + +Section 18. Counterparts. This Agreement may be executed in separate counterparts, each of which so executed and delivered shall be an original, but all of which together shall constitute but one and the same instrument. + +Section 19. Entire Agreement. This Agreement, including schedules and exhibits hereto, which are integral parts hereof and incorporated as though set forth in full, constitutes the entire agreement between the parties pertaining to the subject matter hereof superseding any and all prior or contemporaneous oral or prior written agreements, proposals, letters of intent and understandings, and cannot be modified, changed, waived or terminated except by a writing which expressly states that it is an amendment, modification or waiver, refers to this Agreement and is signed by the party to be charged. No course of conduct or dealing shall be construed to modify, amend or otherwise affect any of the provisions hereof. + +Section 20. Waiver of Trial by Jury. Each of the Agent and the Company and the Bank waive all rights to trial by jury in any action, proceeding, claim or counterclaim (whether based on contract, tort or otherwise) related to or arising out of this Agreement. + +32 + + + + + + + +If the foregoing correctly sets forth the arrangement among the Company, the Bank and the Agent, please indicate acceptance thereof in the space provided below for that purpose, whereupon this letter and the Agent's acceptance shall constitute a binding agreement. + +Accepted as of the date first above written + +33 + + Very truly yours, ATHENS FEDERAL COMMUNITY BANK ATHENS BANCSHARES CORPORATION By Its Authorized Representative By Its Authorized Representative: + +Jeff Cunningham Jeff Cunningham President and Chief Executive Officer President and Chief Executive Officer + + KEEFE, BRUYETTE & WOODS, INC. By its Authorized Representative + + Harold T. Hanley, III, Managing Director Managing Director \ No newline at end of file diff --git a/full_contract_txt/ATMOSENERGYCORP_11_22_2002-EX-10.17-TRANSPORTATION SERVICE AGREEMENT.txt b/full_contract_txt/ATMOSENERGYCORP_11_22_2002-EX-10.17-TRANSPORTATION SERVICE AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..8fcd076c663be6bbfd299b980db649c52508d26e --- /dev/null +++ b/full_contract_txt/ATMOSENERGYCORP_11_22_2002-EX-10.17-TRANSPORTATION SERVICE AGREEMENT.txt @@ -0,0 +1,291 @@ +EXHIBIT 10.17 + + TRANSPORTATION SERVICE AGREEMENT UNDER RATE SCHEDULE FTS OR ITS + + THIS AGREEMENT ("Agreement"), entered into on May 20, 1992, is between Arkansas Western Pipeline Company ("Transporter"), an Arkansas corporation, and Associated Natural Gas Company, a division of Arkansas Western Gas Company, ("Shipper"); + + WITNESSETH: + + WHEREAS, Shipper has requested natural gas for that Transporter transport Shipper; and + + WHEREAS, Transporter has agreed to provide such transportation for Shipper subject to the terms and conditions set forth in this Agreement. + + NOW, THEREFORE, in consideration of the promises and the mutual covenants herein contained, the parties agree as follows: + + ARTICLE I + + DEFINITIONS + + 1.1 "Maximum Daily Delivery Obligation (MDDO)" means the maximum daily quantity of natural gas, expressed in Dekatherms (Dth), that Transporter is obligated to deliver from time to time at the Point(s) of Delivery specified in Exhibit B to the executed Agreement. + + 1.2 "Maximum Daily Quantity (MDQ) " means the maximum daily quantity of natural gas, expressed* in Dth's, that Transporter is obligated under the executed Agreement to transport on behalf of' Shipper, which shall be 23,000 Dth. + + 1.3 "Equivalent Quantity" means the quantity, expressed in Dth's, delivered to Shipper by Transporter at the Point(s) of Delivery. Such quantity is equal to the quantity of gas received from Shipper at the Point(s) of Receipt less Fuel Usage and Applicable Shrinkage. + + 1.4 "Fuel Usage and Applicable Shrinkage" means the quantity of natural gas retained by Transporter for fuel usage, leakage, blow-down, minor line pack fluctuations, and lost and unaccounted for natural gas. + + ARTICLE II + + NATURAL GAS TRANSPORTATION SERVICE + + 2.1 Beginning on the date on which deliveries of natural gas are commenced hereunder, and thereafter for the remaining term of this Agreement, Shipper agrees to tender gas to Transporter at the Point(s) of Receipt, and Transporter agrees to transport and redeliver and Shipper agrees to accept delivery of the Equivalent Quantities of gas at the Point(s) of Delivery, all &bbsp; in accordance with the terms of this Agreement. + + 2.2 Transportation service rendered hereunder shall be firm/interruptible service as described in Section 2 of Transporter's X Rate Schedule FTS _____ Rate Schedule ITS. + + ARTICLE III + + POINT(S) OF RECEIPT + + The Point(s) of Receipt at which Transporter shall receive gas for transportation under this Agreement shall be specified in Exhibit A to this Agreement. + + ARTICLE IV + + POINT(S) OF DELIVERY + + The Point(s) of Delivery at which Transporter shall redeliver to Shipper or for the account of Shipper an Equivalent Quantity of gas for transportation under this Agreement shall be specified in Exhibit B to this Agreement. Notwithstanding the MDDO at each Point of Delivery, Shipper shall not nominate a total quantity of natural gas at all Points of Delivery that exceeds the MDQ set forth in this Agreement. + + ARTICLE V + + TERM OF AGREEMENT + + 5.1 Subject to the General Terms and Conditions of Transporter's FERC Gas Tariff and Rate Schedule FTS/ITS, this Agreement shall be effective as of the date of physical completion of and initial deliveries on Transporter's pipeline and shall continue for a primary term of ten years. Thereafter, this + + + + + + Agreement shall be effective month to month, until terminated by Transporter or Shipper upon the following written notice to the other specifying a termination date: sixty (60) days for + + interruptible transportation under Rate Schedule ITS and 180 days for firm transportation under Rate Schedule FTS. + + 5.2 Any portions of this Agreement necessary to balance receipts and deliveries under this Agreement as required by the FTS/ITS Rate Schedule, shall survive the other parts of this Agreement until such time as such balancing has been accomplished. + + ARTICLE VI + + RATE SCHEDULE AND CHARGES + + 6.1 Shipper shall pay Transporter for the service hereunder an amount determined in accordance with Transporter's FTS/ITS Rate Schedule, and the General Terms and Conditions of Transporter's FERC Gas Tariff, all as may be revised from time to time. Such FTS/ITS Rate Schedule and General Terms and Conditions are incorporated by reference and made a part hereof. + + 6.2 Transporter may seek authorization from the FERC and/or other appropriate body to change any rate(s) and/or term(s) set forth herein or in the FTS or ITS Rate Schedule. Nothing herein shall be construed to deny Shipper any rights it may have under the Natural Gas Act or the Natural Gas Policy Act including the right to participate fully in rate proceedings by intervention or otherwise to contest increased rates in whole or in part. + + ARTICLE VII + + REDUCTION IN CAPACITY + + For firm transportation only, if Transporter's capacity is reduced for any reason and a reduction of the quantity of gas being transported hereunder is required, Shipper's MDQ shall be reduced pro rata with the MDQ's of the other firm Shippers during the period of such capacity reduction. + + ARTICLE VIII + + MISCELLANEOUS + + 8.1 Amendment. This Agreement shall only be amended, varied or modified by an instrument in writing executed by Transporter and Shipper. Such amendment will be effective upon compliance with Article VIII herein. + + 8.2 Applicable Law. This Agreement and the rights and duties of Transporter and Shipper hereunder shall be governed by and interpreted in accordance with the laws of the State of Arkansas, without recourse to the law governing conflict of laws. + + 8.3 Waiver. No waiver by either Transporter or Shipper of any default by the other in the performance of any provision, condition or requirement herein shall be deemed a waiver of, or in any manner a release from, performance of any other provision, condition or requirement herein, nor deemed to be a waiver of, or in any manner a release from, future performance of the same provision, condition or requirement; nor shall any delay or omission by Transporter or Shipper to exercise any right hereunder impair the exercise of any such right or any like right accruing to it thereafter. + + 8.4 Headings. The headings of each of the various sections in this Agreement are included for convenience of reference only and shall have no effect on, nor be deemed part of the text of, this Agreement. + + 8.5 Further Assurances. Transporter and Shipper shall execute and deliver all instruments and documents and shall do all acts necessary to effectuate this Agreement. + + 8.6 Entire Agreement. This Agreement constitutes the entire agreement between Transporter and Shipper concerning the subject matter hereof and supersedes all prior understandings and written and oral agreements relative to said matter. + + 8.7 Cancellation of Prior Agreement(s). This Agreement, upon its effective date, supersedes and cancels any and all other agreements between Transporter and Shipper relating to the transportation of gas by Transporter for Shipper. + + ARTICLE IX + + NOTICES + + + + + + All notices, requests, statements or other communications provided for under this Agreement shall be in writing and shall be given by personal delivery or by United States mail, postage prepaid, and addressed as follows: + + If to Shipper: + + Arkansas Western Gas Company 1001 Sain Street P. 0. Box 1288 Fayetteville, AR 72702-1288 + + If to Transporter: + + Arkansas Western Pipeline Company 1083 Sain Street P. O. Box 1408 Fayetteville, AR 72702-1408 Attn: Manager of Transportation Services + + All written notices, requests, statements or other communications shall be sufficiently given if mailed postage prepaid by registered, certified, or regular mail and shall be deemed to have been duly delivered on the third business day following the date on which same was deposited in the United States mail, addressed in accordance with this Article VIII. Either Shipper or Transporter may designate a different address to which notices, requests, statements, payments or other communications shall be sent upon proper notice as set forth in this Article VIII. + + IN WITNESS WHEREOF, Transporter and Shipper have caused this Agreement to be duly executed by their duly authorized officers in two (2) original counterparts as of May 20, 1992. + + "TRANSPORTER" + + ARKANSAS WESTERN PIPELINE COMPANY an Arkansas Corporation + + By /s/ [ILLEGIBLE] --------------------------------------- President + +WITNESS: /s/ [ILLEGIBLE] ------------------------ + + "SHIPPER" + + ASSOCIATED NATURAL GAS COMPANY, a division of Arkansas Western Company Gas Company + + By /s/ [ILLEGIBLE] --------------------------------------- + +WITNESS: ------------------------ + + EXHIBIT A TO TRANSPORTATION SERVICE AGREEMENT DATED MAY 20, 1992 BETWEEN ASSOCIATED NATURAL GAS COMPANY AND ARKANSAS WESTERN PIPELINE COMPANY + + Pressure Psig Meter MDQ ------------- Receipt Point Number SEC-TWN-RNG County ST Dth/d Max Min ------------- ------- ----------- ------ -- ------ ----- ----- 1. NOARK Pipeline System Pending 31-19N-9E Clay AR 23,000 685 550 + +SHIPPER: TRANSPORTER: ASSOCIATED NATURAL GAS COMPANY ARKANSAS WESTERN PIPELINE COMPANY + +By: /s/ [ILLEGIBLE] By: /s/ [ILLEGIBLE] -------------------------- ----------------------------- + + + + + + EXHIBIT B TO TRANSPORTATION SERVICE AGREEMENT DATED MAY 20, 1992 BETWEEN ASSOCIATED NATURAL GAS COMPANY AND ARKANSAS WESTERN PIPELINE COMPANY + + Pressure Psig Meter MDDO ------------- Delivery Point Number SEC-TWN-RNG County ST Dth/d Max Min -------------- ------- ----------- ------- -- ------ ----- ----- 1. Associated Natural Gas Pending 28-19N-10E Dunklin mo 23,000 500 400 + +SHIPPER: TRANSPORTER: ASSOCIATED NATURAL GAS COMPANY ARKANSAS WESTERN PIPELINE COMPANY + +By: /s/ [ILLEGIBLE] By: /s/ [ILLEGIBLE] -------------------------- ----------------------------- President + + SCHEDULE 2 + + CONTRACTS BIFURCATED OR PARTIALLY ASSIGNED TO ATMOS + +Contract Quantity Assigned Expiration -------- ----------------- ---------- Transportation & Storage: AWP FT dated 5/20/92 13,370 MMBtu/d 07/31/2003 Ozark FT #Z2001 @ AWP 13,370 MMBtu/d 10/31/2002 Ozark FT #Z2001 @ NGPL .2000 MMBtu/d 10/31/2002 TETCO CDS (FT) #800204 9,826 MMBtu/d 10/31/2012 TETCO SSI #400184 11,303 DTH/d W/D 04/30/2012 .3,876 DTH/d Inj. 04/30/2012 Supply: SEECO Finn Sales dated 10/1/90 15,370 MMBtu/d 09/30/2000 + + FORM OF NOTICE OF PERMANENT RELEASE OF FIRM CAPACITY AND CONSENT TO PARTIAL ASSIGNMENT + +A. Associated Natural Gas Company, a division of Arkansas Western Gas Company ("Releasing Shipper") is a firm Shipper that is party to an executed and valid Service Agreement with Arkansas Western Pipeline Company under Rate Schedule FTS ("Transporter"). Releasing Shipper proposes to release capacity as set forth below, and in accordance with the applicable provisions of Transporter's FERC Gas Tariff. Upon the satisfaction of all conditions applicable to the proposed release transaction, including all applicable provisions of Section 14 of the General Terms and Conditions of Transporter's FERC Gas Tariff, Releasing Shipper will consent to a partial and permanent assignment of capacity on Transporter's system. Subject to the satisfaction of such conditions by the Releasing Shipper and the Replacement Shipper, Transporter will consent to this partial and permanent assignment of capacity on its system, and will waive the requirement under Section 14.7 of the General Terms and Conditions of Transporter's FERC Gas Tariff, providing that Releasing Shipper shall remain the guarantor of payment to Transporter of all demand charges arising under its Service Agreement with Transporter for such assigned capacity. + +B. Rate Schedule and contract number pursuant to which capacity is released, Contract Number: FTS - 0 1 + +C. Quantity of capacity to be released: Max 13,370 Dfli/Day, Min 13,370 DthDay. + +D. (i) Minimum transportation rate acceptable to Releasing Shipper (if none, write "none"; includes commodity component): + + Tariff Rate + + (ii) Bid Requirements: + + (a) _X_ Reservation, __Volumetric + + or ___ Volumetric with ___ volume commitment + + (b) __ Dollar/Cents or __ Percentage + +E. Receipt Points and Delivery Points (designate primary and/or secondary): + + Receipt Point: "Ozark/AWP Interconnect" Meter 00010 + + + + + + Delivery Point: "AWP/ANG Interconnect" Meter 00020 MDQ @ 13,370 MMBtu/d. + +F. Bid Evaluation Methodology: i) highest rate, net revenue or present value + + ii). If Releasing Shipper chooses to provide weighting factors in accordance with Section 14.9 of the General Terms and Conditions of Transporter's FERC Gas Tariff, weighting factors are as follows: Please provide a range for each factor between 0 - 1,000. The numbers need not add up to 1,000. + + _________________ Volume (0 - 1,000) + + Max Rate ___________________ -1 Rate (0 - 1,000) + +G. i). Designated Replacement Shipper (if none, write "none"): + + United Cities Gas Company a, division of Atmos Energy Corporation. + + ii). Terms and conditions agreed to between Releasing Shipper and Designated Replacement Shipper: + + _________ Demand Rate (MMBtu) + + 13,370 Volume MMBtu/Day + + iii) Releasing Shipper and Designated Replacement Shipper understand Designated Replacement Shipper may not receive the released capacity if it fails to match any best bid submitted by another potential Shipper as provided in Transporter's FERC Gas Tariff. + +H. Other terms and conditions (if none, write "none"): _________________ + +This is a maximum tariff rate, permanent assignment of capacity, not subject to bid. + + "Date Releasing Shipper: Associated Natural Gas Co. Charles V. Stevens, Sr. Vice President + + ANY, a division of Atmos Energy Corporation + + UNITED CITIES GAS + + BY: /s/ [ILLEGIBLE] ----------------------------------------- Replacement Shipper* + + -May 24, 2000 + + Date + + Date Transporter: + + ARKANSAS WESTERN PIPELINE COMPANY + +To be executed, prior to posting by Transporter, by Replacement Shipper only if Replacement Shipper has been designated by Releasing Shipper in G(i) above. + + BID ON PERMANENTLY RELEASED CAPACITY ON ARKANSAS WESTERN PIPELINE COMPANY + +A. United Cities Gas Company a, division of Atmos Energy Corporation ("Bidder") hereby bids on released capacity ("Capacity") on the system of Arkansas Western Pipeline Company ("Transporter"). This bid will remain open until Transporter selects a winning bidder, or notice of withdrawal is received by Transporter. + +B. The Capacity was released by Associated Natural Gas Company, a division of Arkansas Western Gas Company. + + (FTS - 01) under Transporter's Rate Schedule FTS, + +C. The transportation rate bid is Maximum Tariff Rate per Dth, not including commodity charge, fuel, or other applicable fees. + +D. The quantity of Capacity bid for is 13,370 Dth/Day + +E. The term of the Capacity bid for is (Permanent Assignment through original contract term) Months/Years, beginning June 1, 2000 and ending at the expiration date of contract FTS - 01. + +F. Receipt and Delivery points (designate primary and/or secondary) + + Receipt Point: "Ozark/AWP Interconnect" Meter 000 10 + + Delivery Point: "AWP/ANG Interconnect" Meter 00020 MDQ @ 13,370 MMBtu/d. + + + + + +G. Other information requested by the Releasing Shipper + + This is a maximum tariff rate, permanent assignment of capacity, not subject to bid. + +H. Bidder agrees to comply with all terms and conditions of Transporter's FERC Gas Tariff. + +I. If selected by Transporter as the winning bidder, Bidder will immediately execute the partial assignment form set forth below. + +i Bidder acknowledges that it has the full authority to make this bid and bind itself and its agents and/or principals to this bid. + + UNITED CITIES GAS COMPANY, a division of May 24, 2000 + +Atmos Energy Corporation ------------------------ ----------------------------------------------------- + +Date BIDDER + + By: /s/ GORDON J. ROY + + Gordon J. Roy Vice President + + PARTIAL ASSIGNMENT OF CAPACITY ON ARKANSAS WESTERN PIPELINE COMPANY + +A. United Cities Gas Company a, division of Atmos Energy Corporation ("Replacement Shipper") has submitted the winning bid for firm capacity on the system of Arkansas Western Pipeline Company ("Transporter") for capacity released by Associated Natural Gas Company, a division of Arkansas Western Gas Company ("Releasing Shipper"), and understands that its bid of (date) June 1, 2000 has been accepted by Transporter. + +B. Replacement Shipper has read and understands the terms and conditions under which the Releasing Shipper has permanently released such capacity on Transporter and hereby contracts for such capacity, in accordance with its bid, subject to terms and conditions set forth on Transporter's FERC Gas Tariff and the Service Agreement between the Releasing Shipper and Transporter (copy of bid and release notice attached). Replacement Shipper adopts such Service Agreement for the assigned capacity, and from and after the effective date of the referenced release shall be fully liable to Transporter for all demand charges, volumetric charges, surcharges, and other charges arising under the terms of the Service Agreement with Transporter for such assigned capacity from and after that effective date. + +C. Releasing Shipper hereby makes a partial assignment of its rights and obligations under contract number FTS - 01 in accordance with the attached bid and release notice. This assignment is made in accordance with Transporter's FERC Gas Tariff. + + Releasing Shipper: Associated Natural Gas Co. Charles V. Stevens, Sr. Vice President UNITED GAS a division of Atmos Energy Corporation + + BY: CITIES COMPANY + + /s/ GORDON J. ROY ------------------------------------------------- Replacement Shipper Gordon J. Roy, Vice President + + Transporter: + + Arkansas Western Pipeline Company \ No newline at end of file diff --git a/full_contract_txt/AULAMERICANUNITTRUST_04_24_2020-EX-99.8.77-SERVICING AGREEMENT.txt b/full_contract_txt/AULAMERICANUNITTRUST_04_24_2020-EX-99.8.77-SERVICING AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..27217fa4a99de972ea599a5a16b01e2e69d6890a --- /dev/null +++ b/full_contract_txt/AULAMERICANUNITTRUST_04_24_2020-EX-99.8.77-SERVICING AGREEMENT.txt @@ -0,0 +1,73 @@ +Exhibit 8.77 SERVICING AGREEMENT NATIONWIDE MUTUAL FUNDS Agreement, made as of this day of , 20 between Nationwide Fund Management LLC ("Nationwide"), on behalf of Nationwide Mutual Funds or its surviving entity ("the Trust"), and American United Life Insurance Company, and OneAmerica Securities, Inc., a registered Broker Dealer (collectively referred to as "Servicing Agent," "you" or "your"), whereby you agree to provide certain administrative support services to your customers who may from time to time be the record or beneficial owners of shares (such shares referred to herein as the "Shares") of the funds listed in Appendix A (each a "Fund") subject to the following terms and conditions: 1. Administrative Support Services You agree to provide administrative support services, directly or through an affiliate/designee, to your customers who may from time to time own of record or beneficially a Fund's Shares. Services provided may include, but are not limited to, some or all of the following: (i) processing dividend and distribution payments from the Fund on behalf of customers; (ii) providing periodic statements to your customers showing their positions in the Shares or share equivalents; (iii) arranging for bank wires; (iv) responding to routine customer inquiries relating to services performed by you; (v) providing sub-accounting or sub-transfer agency services with respect to the Shares beneficially owned by your customers or the information necessary for sub-accounting or sub-transfer agency services; (vi) if required by law, forwarding shareholder communications from the Fund (such as proxies, shareholder reports, annual and semi-annual financial statements and dividend, distribution and tax notices) to your customers; (vii) forwarding to customers proxy statements and proxies containing any proposals regarding this Agreement or the Administrative Services Plan related hereto; (viii) aggregating and processing purchase, exchange, and redemption requests from customers and placing net purchase, exchange, and redemption orders for your customers; (ix) providing customers with a service that invests the assets of their accounts in the Shares pursuant to specific or preauthorized instructions; (x) establishing and maintaining customer accounts and records related to customer accounts and/or transactions in the Shares; (xi) assisting customers in changing dividend or distribution options, account designations and addresses; or (xii) other similar services if requested by the Funds. In providing administrative support services, you agree to follow any written guidelines or standards relating to the processing of purchase, exchange and redemption orders for your customers as we may provide to you including the provisions outlined in Appendix B. All purchase and redemption orders will be executed at net asset value, plus or minus any applicable sales charges, in accordance with the terms and conditions of a Fund's then current prospectus and Statement of Additional Information. You represent and warrant that your internal controls for accepting, processing and transmitting purchase, exchange and redemption orders are reasonably designed to ensure that you comply with Section 22(c) of the Investment Company Act of 1940 (the "1940 Act") and Rule 22c-1 thereunder. 2. Office Space You will provide such office space and equipment, telephone facilities and personnel (which may be any part of the space, equipment and facilities currently used in your business, or any personnel employed by you) as may be reasonably necessary or beneficial in order to provide the aforementioned services to customers. March 2015 + + + + + +3. Representations About the Funds and Shares Neither you nor any of your officers, employees or agents are authorized to make any representations concerning the Funds or their Shares except those contained in the then-current prospectuses or then-current Statements of Additional Information for such shares, copies of which will be supplied by the Fund's distributor (the "Distributor") to you, or in such supplemental literature or advertising as may be authorized by the Distributor in writing. 4. Independent Contractor and Limited Agency You will be deemed to be an independent contractor, and will have no authority to act as agent for either Nationwide or the Funds in any matter or in any respect. Notwithstanding the foregoing, Nationwide, on behalf of each Fund, appoints you as each Fund's agent for the limited purpose of accepting orders for purchase, redemption and exchange of Shares, and receipt of such orders by you therefore shall constitute receipt by the applicable Fund of such orders for purposes of determining the price per Share at which such orders will be executed, in accordance with Rule 22c-1 under the 1940 Act. Except as specifically set forth herein, nothing in this Agreement will be deemed or construed to make you a partner, employee, representative or agent of Nationwide or any Fund or to create a partnership, joint venture, syndicate or association between you and us. 5. Indemnification By your written acceptance of this Agreement, you agree to and do release, indemnify and hold Nationwide and the Funds harmless from and against any and all direct or indirect liabilities or losses resulting from requests, directions, actions or inactions of or by you or your officers, employees or agents regarding your responsibilities hereunder or the purchase, redemption, transfer or registration of the Shares by or on behalf of customers. In turn, Nationwide, on behalf of the Funds, agrees to and does release, indemnify and hold you and your affiliates harmless from and against any and all direct or indirect liabilities or losses resulting from directions, actions or inactions of or by Nationwide, the Funds, or their respective officers, employees or agents regarding their responsibilities pursuant to this Agreement. 6. Compensation In consideration for the services and facilities provided by you hereunder, Nationwide (on behalf of the Funds) will pay to you, and you will accept as full payment therefore, a fee at the annual rate designated in Appendix A of the average daily net assets of a Fund's Shares owned of record or beneficially by your customers from time to time for which you provide administrative support services hereunder. Such fee will be computed daily and payable monthly by Nationwide within thirty (30) days of receipt from you of a valid invoice (in excel format) that identifies, for each CUSIP of each Fund, the number of sub-accounts, participants or beneficial shareholders serviced by you and such other information as may be necessary to validate the fee payable. The fee rate stated above may be prospectively increased or decreased by the Funds and/or Nationwide, in their sole discretion, at any time upon notice to you. Further, Nationwide or a Fund may, in its sole discretion and without notice, suspend or withdraw the sale of such Shares, including the sale of such Shares to you for the account of any customer(s). Nationwide, in its sole discretion, may arrange for the payment to you of the fees under this Agreement directly by the Funds rather than through Nationwide. Quarterly and Other Reports 2 + + + + + +You agree to provide all such information as is reasonably necessary for the Board of Trustees of the Trust to review, at least quarterly, a written report of the amounts of compensation received by you hereunder and the services provided for which you received such compensation. In addition, you will furnish Nationwide with such information as Nationwide or the Funds may reasonably request (including, without limitation, periodic certifications confirming the provision to customers of some or all of the services described herein), and will otherwise cooperate with Nationwide and the Funds (including, without limitation, any auditors designated by the Funds), in connection with the preparation of reports to the Trust's Board of Trustees concerning this Agreement and the monies paid or payable by Nationwide on behalf of the Funds pursuant hereto, as well as any other reports or filings that may be required by law. You agree, upon the reasonable request of Nationwide, to provide access during normal business hours to your facilities and records related to the services provided and the compensation payable hereunder, and to permit Nationwide to review the quality of such services provided and to respond to requests of the Trust's Board of Trustees. Nationwide agrees that all records obtained in connection with access to your facilities is your property and to maintain the confidentiality thereof. In particular, Nationwide agrees that no person having access to such records may use such records or information to solicit, directly or indirectly, any of your customers for any purpose. 7. Non-Exclusivity Both parties may enter into other similar Servicing Agreements with any other person or persons without the other's consent. 8. Representations and Warranties By your written acceptance of this Agreement, you represent, warrant and agree that: (i) all compensation payable to you hereunder is for administrative support services only; (ii) in no event will any of the compensation payable by Nationwide or the services provided by you hereunder be primarily intended to result in the sale of any Shares issued by a Fund; (iii) the compensation payable to you hereunder, together with any other compensation you receive from customers for services contemplated by this Agreement, will to the extent required be disclosed to your customers, and will not be excessive or unreasonable under the laws and instruments governing your relationships with your customers; and (iv) if you are subject to laws governing, among other things, the conduct of activities by federally chartered and supervised banks and other affiliated banking organizations, you will perform only those activities which are consistent with your statutory and regulatory obligations. 9. Termination This Agreement will become effective on the date a fully executed copy of this Agreement is received by Nationwide. This Agreement may be terminated as to the payments made on behalf of the Funds at any time, without the payment of any penalty, by the vote of a majority of the members of the Board of Trustees and who have no direct or indirect financial interest in the operation of the Administrative Services Plan or in any related agreements to the Administrative Services Plan ("Disinterested Trustees") or by a majority of the outstanding voting securities of a Fund, on at least sixty (60) days written notice to the parties to this Agreement. In addition, either you or Nationwide may terminate this Agreement (i) upon the material breach of this Agreement by the other or (ii) for any reason on at least ninety (90) days written notice to the other party. 3 + + + + + +In the event this Agreement is terminated as described herein, the indemnification provisions contained in this Agreement shall continue until the possibilities for damages or loss have expired. 10. Notices All notices and other communications to either you or Nationwide will be duly given if mailed, telegraphed, telexed or transmitted by similar telecommunications device to the address contained in the "Acceptance of Agreement" (Section 19) portion of this Agreement. 11. Choice of Law This Agreement will be construed in accordance with the laws of the State of Delaware and is assignable only upon the written consent by all the parties hereto. Amendments will be made only upon written consent by both parties. 12. Board Approval The Administrative Services Plan that relates to this Agreement has been approved by vote of a majority of (i) the Board of Trustees and (ii) the Disinterested Trustees, cast in person at a meeting called for the purpose of voting on such approval. 13. Trust Disclosure The term "Nationwide Mutual Funds" refers to the Trust created by, and the terms "Board of Trustees" and "Trustees" refer to the Trustees, as trustees but not individually or personally, acting from time to time under, the Amended and Restated Agreement and Declaration of Trust made and dated as of October 28, 2004, as has been or may be amended and/or restated from time to time ("Agreement and Declaration of Trust"), and to which reference is hereby made. Nothing herein contained shall be deemed to require the Trust to take any action contrary to the Trust's Agreement and Declaration of Trust or By-Laws, or any applicable statutory or regulatory requirement to which the Trust is subject or by which the Trust is bound, or to relieve or deprive the Trust's Board of Trustees of the Board's responsibility for and control of the conduct of the affairs of the Trust. 14. Complete Agreement This Agreement supersedes and cancels any prior Servicing Agreement with respect to the Shares of a Fund listed in Exhibit A, and may be amended at any time and from time to time by written agreement of the parties hereto. Notwithstanding the foregoing, Nationwide may amend or modify the Exhibits incorporated herein, as provided throughout this Agreement, by providing new exhibits to you. However, such amendment shall only become effective and part of this Agreement and be considered binding upon the first transaction placed by you following receipt of the new exhibits. 15. Privacy Program Each party to this Agreement agrees to protect Customer Information (defined below) and to comply as may be necessary with requirements of the Gramm-Leach-Bliley Act, the relevant state and federal regulations pursuant thereto, including Regulation S-P, and state privacy laws (all the foregoing referred to as "Privacy Law"). 4 + + + + + +Customer Information means any information contained on an application of a customer ("Customer") of a Fund or other form and all nonpublic personal information about a Customer that a party receives from the other party. Customer Information includes, by way of example and not limitation, name, address, telephone number, social security number, date of birth and personal financial information. The parties shall establish and maintain safeguards against the unauthorized access, destruction, loss or alteration of Customer Information in their control, which are no less rigorous than those maintained by a party for its own information of a similar nature. In the event of any improper disclosure of any Customer Information, the party responsible for the disclosure will immediately notify the other party. The Servicing Agent represents that it has implemented and maintains a comprehensive written information security program that contains appropriate security measures to safeguard Customer Information that the Servicing Agent receives, stores, maintains, processes or otherwise accesses in connection with the provision of services hereunder, including protecting such Customer Information against cyber attack. The provisions of this Privacy Program section shall survive the termination of the Agreement. 16. Anti-Money Laundering Program Nationwide and the Funds will rely upon you to establish a written Anti-Money Laundering Program (the "Program") to include policies, procedures, and controls that comply with the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act (USA Patriot Act) of 2001, ("the ACT") and the Bank Secrecy Act of 1970 ("BSA"). Each party to this Agreement acknowledges, represents, and warrants that it has adopted and implemented an Anti-Money Laundering Program that complies and will continue to comply with all aspects and requirements of the ACT, the BSA, and all other applicable anti-money laundering laws and regulations. Upon request, you shall promptly certify to having such Program that complies with and continues to comply with all aspects and requirements of the ACT, the BSA, and all other applicable federal, state and local anti-money laundering laws and regulations. Your Program shall include, and Nationwide and the Funds shall rely upon, your policies, procedures and controls to, among other things, (i) verify the identity (due diligence) of your customers, (ii) maintain records of the information used to identify your customers, (iii) determine if your customer appears on lists of known or suspected terrorists or associated with known or suspected terrorist organizations (said customer hereinafter referred to as a "Prohibited Customer"), and (iv) to ensure that Prohibited Customers and foreign shell banks do not maintain investments in any Fund. Your Program shall also comply with the Customer Identification Program ("CIP") for customers who open accounts on or after October 1, 2003, and as such, shall among other matters provide for the release of customer information to law enforcement agencies, and the filing of Suspicious Activity Reports ("SARs"), as and if applicable, and in accordance with the ACT. In addition, your Program also shall include procedures for fulfilling the currency reporting requirements of the ACT and the BSA, as and if applicable. The provisions of this Anti-Money Laundering section shall survive the termination of the Agreement. 5 + + + + + +18. Shareholder Information 18.1 Agreement to Provide Information. You agree to provide the Funds, upon written request, the taxpayer identification number ("TIN"), if known, of any or all Shareholder(s) of an account and the amount, date, name or other identifier of any registered representative(s) associated with the Shareholder(s) or account (if known), and transaction type (purchase, redemption, transfer, or exchange) of every purchase, redemption, transfer, or exchange of Shares held through an account maintained by you during the period covered by the request. 18.1.1 Period Covered by Request. Requests must set forth a specific period, not to exceed 12 months from the date of the request, for which transaction information is sought. A Fund may request transaction information older than 12 months from the date of the request as it deems necessary to investigate compliance with policies established by the Funds for the purpose of eliminating or reducing any dilution of the value of the outstanding shares issued by a Fund. 18.1.2 Form and Timing of Response. You agree to transmit the requested information that is on your books and records to the Fund or its designee promptly, but in any event not later than five (5) business days, after receipt of a request. If the requested information is not on your books and records, you agree to: (i) provide or arrange to provide the requested information from Shareholders who hold an account with an indirect intermediary; or (ii) if directed by the Fund, block further purchases of Fund Shares from such indirect intermediary. In such instance, you agree to inform the Fund whether you plan to perform (i) or (ii). Responses required by this paragraph must be communicated in writing and in a format mutually agreed upon by the parties. To the extent practicable, the format for any transaction information provided to a Fund should be consistent with the NSCC Standardized Data Reporting Format. For purposes of this provision, an "indirect intermediary" has the same meaning as in SEC Rule 22c-2 under the 1940 Act. 18.1.3 Limitations on Use of Information. The Funds agree not to use the information received for marketing or any other similar purpose without your prior written consent. 18.2 Agreement to Restrict Trading. You agree to promptly and fully cooperate with any reasonable request made by the Fund to address market timing or excessive trading strategies identified by Nationwide in accordance with the applicable provisions of Rule 22c-2 and agree to restrict or prohibit further purchases or exchanges of Shares by a Shareholder that has been identified by such Fund as having engaged in transactions of the Fund's Shares (directly or indirectly through your account) that violate policies established by the Fund for the purpose of eliminating or reducing any dilution of the value of the outstanding Shares issued by the Fund. 18.2.1 Form of Instructions. Instructions must include the TIN, if known, and the specific restriction(s) to be executed. If the TIN is not known, the instructions must include an equivalent identifying number of the Shareholder(s) or account(s) or other agreed upon information to which the instruction relates. 18.2.2 Timing of Response. You agree to execute instructions as soon as reasonably practicable, but not later than five business days after your receipt of the instructions. 6 + + + + + +18.2.3 Confirmation by You. You must provide written confirmation to the Fund that instructions have been executed. You agree to provide confirmation as soon as reasonably practicable, but not later than ten business days after the instructions have been executed. 18.3 Definitions. For purposes of this paragraph 18: 18.3.1 The term "Fund" includes a Fund's distributor and a Fund's transfer agent. The term not does include any "excepted funds" as defined in SEC Rule 22c-2(b) under the 1940 Act. 18.3.2 The term "Shares" means the interest of Shareholders corresponding to the redeemable securities of record issued by a Fund under the 1940 Act that are held by you. 18.3.3 The term "Shareholder" means the beneficial owner of Shares, whether the Shares are held directly or by you in nominee name. 18.3.4 The term "written" includes electronic writings and facsimile transmissions. [The remainder of this page is intentionally left blank.] 7 + + + + + +19. Acceptance of Agreement If you agree to be legally bound by the provisions of this Agreement, please sign a copy of this Agreement where indicated below and promptly return it to Nationwide at the address below: Nationwide Fund Management LLC Attention: Fund Administration 1000 Continental Drive, Suite 400 King of Prussia, PA 19406 This Agreement will become effective on the date a fully executed copy of this Agreement is received by Nationwide. Accepted by: Name Title Nationwide Fund Management LLC Date: Accepted and Agreed to: By: Name: Title: Company: Date: 8 + + + + + +APPENDIX A TO SERVICING AGREEMENT Nationwide Mutual Funds Funds of Nationwide Mutual Funds Class R6 and Institutional Service Class shares of all Funds of Nationwide Mutual Funds as offered in the Fund's current prospectus. Administrative Services Fees Share Class Rate (Bps) Institutional Service Class 25 Class R6 0 (no fee) Acknowledgement: Servicing Agent: Nationwide Fund Management LLC 1000 Continental Drive Suite 400 King of Prussia, PA 19406 x x By: By: + + + + + +APPENDIX B FUND/SERV PROCESSING PROCEDURES AND MANUAL PROCESSING PROCEDURES The purchase, redemption and settlement of Shares of a Fund will normally follow the Fund/SERV-Defined Contribution Clearance and Settlement Service ("DCCS") Processing Procedures below and the rules and procedures of the SCC Division of the National Securities Clearing Corporation ("NSCC") shall govern the purchase, redemption and settlement of Shares of the Funds through NSCC by the Servicing Agent. In the event of equipment failure or technical malfunctions or the parties' inability to otherwise perform transactions pursuant to the FUND/SERV Processing Procedures, or the parties' mutual consent to use manual processing, the Manual Processing Procedures below will apply. It is understood and agreed that, in the context of Section 22 of the 1940 Act and the rules and public interpretations thereunder by the staff of the Securities and Exchange Commission (SEC Staff), receipt by the Servicing Agent of any Instructions from the Client-shareholder prior to the Close of Trade on any Business Day shall be deemed to be receipt by the Funds of such Instructions solely for pricing purposes and shall cause purchases and sales to be deemed to occur at the Share Price for such Business Day, except as provided in 4(c) of the Manual Processing Procedures. Each Instruction shall be deemed to be accompanied by a representation by the Servicing Agent that it has received proper authorization from each Client-shareholder whose purchase, redemption, account transfer or exchange transaction is effected as a result of such Instruction. Fund/SERV-DCCS Processing Procedures 1. On each business day that the New York Stock Exchange (the "Exchange") is open for business on which the Funds determine their net asset values ("Business Day"), Nationwide shall accept, and effect changes in its records upon receipt of purchase, redemption, exchange, account transfer and registration instructions from the Servicing Agent electronically through Fund/SERV ("Instructions") without supporting documentation from the Client-shareholder. On each Business Day, Nationwide shall accept for processing any Instructions from the Servicing Agent and shall process such Instructions in a timely manner. 2. Nationwide shall perform any and all duties, functions, procedures and responsibilities assigned to it under this Agreement and as otherwise established by the NSCC. Nationwide shall conduct each of the foregoing activities in a competent manner and in compliance with (a) all applicable laws, rules and regulations, including NSCC Fund/SERV-DCCS rules and procedures relating to Fund/SERV; (b) the then-current Prospectus of a Fund; and (c) any provision relating to Fund/SERV in any other agreement of Nationwide that would affect its duties and obligations pursuant to this Agreement. 3. Confirmed trades and any other information provided by Nationwide to the Servicing Agent through Fund/SERV and pursuant to this Agreement shall be accurate, complete, and in the format prescribed by the NSCC. 4. Trade, registration, and broker/dealer information provided by the Servicing Agent to Nationwide through Fund/SERV and pursuant to this Agreement shall be accurate, complete and, in the + + + + + +format prescribed by the NSCC. All Instructions by the Servicing Agent regarding each Fund/SERV Account shall be true and correct and will have been duly authorized by the registered holder. 5. For each Fund/SERV transaction, including transactions establishing a Client-shareholder account with Nationwide, the Servicing Agent shall provide the Funds and Nationwide with all information necessary or appropriate to establish and maintain each Fund/SERV transaction (and any subsequent changes to such information), which the Servicing Agent hereby certifies is and shall remain true and correct. The Servicing Agent shall maintain documents required by the Funds to effect Fund/SERV transactions. The Servicing Agent certifies that all Instructions delivered to Nationwide on any Business Day shall have been received by the Servicing Agent from the Client-shareholder by the close of trading (generally 4:00 p.m. Eastern Time ("ET")) on the Exchange (the "Close of Trading") on such Business Day and that any Instructions received by it after the Close of Trading on any given Business Day will be transmitted to Nationwide on the next Business Day. Manual Processing Procedures 1. On each Business Day, the Servicing Agent may receive Instructions from the Client-shareholder for the purchase or redemption of shares of the Funds based solely upon receipt of such Instructions prior to the Close of Trading on that Business Day. Instructions in good order received by the Servicing Agent prior to the close of trading on any given Business Day (generally, 4:00 p.m. ET (the "Trade Date") and transmitted to Nationwide by no later than 9:30 a.m. ET the Business Day following the Trade Date ("Trade Date plus One" or "TD+1"), will be executed at the NAV-based public offering price ("Share Price") of each applicable Fund, determined as of the Close of Trading on the Trade Date. 2. By no later than 6:00 p.m. ET on each Trade Date ("Price Communication Time"), Nationwide will use its best efforts to communicate to the Servicing Agent via electronic transmission acceptable to both parties, the Share Price of each applicable Fund, as well as dividend and capital gain information and, in the case of Funds that credit a daily dividend, the daily accrual for interest rate factor (mil rate), determined at the Close of Trading on that Trade Date. 3. As noted in Paragraph 1 above, by 9:30 a.m. ET on TD+1 ("Instruction Cutoff Time") and after the Servicing Agent has processed all approved transactions, the Servicing Agent will transmit to Nationwide via facsimile, telefax or electronic transmission or system-to-system, or by a method acceptable to the Servicing Agent and Nationwide, a report (the "Instruction Report") detailing the Instructions that were received by the Servicing Agent prior to the Funds' daily determination of Share Price for each Fund (i.e., the Close of Trading) on Trade Date. (a) It is understood by the parties that all Instructions from the Client-shareholder shall be received and processed by the Servicing Agent in accordance with its standard transaction processing procedures. The Servicing Agent or its designees shall maintain records sufficient to identify the date and time of receipt of all Client-shareholder transactions involving the Funds and shall make or cause to be made such records available upon reasonable request for examination by the Funds or its designated representative or, at the request of the Funds, by appropriate governmental authorities. Under no circumstances shall the Servicing Agent change, alter or modify any Instructions received by it in good order. + + + + + +(b) Following the completion of the transmission of any Instructions by the Servicing Agent to Nationwide by the Instruction Cutoff Time, the Servicing Agent will verify that the Instruction was received by Nationwide and trades are pending by utilizing a remote terminal or such other method acceptable to Nationwide. (c) In the event that an Instruction transmitted by the Servicing Agent on any Business Day is not received by Nationwide by the Instruction Cutoff Time, due to mechanical difficulties or for any other reason beyond the Servicing Agent's reasonable control, such Instruction shall nonetheless be treated by Nationwide as if it had been received by the Instruction Cutoff Time, provided that the Servicing Agent retransmits such Instruction electronically (by facsimile transmission or other means mutually agreed upon) to Nationwide and such Instruction is received by Nationwide's (or the Distributor's) financial control representative no later than 9:30 a.m. ET on TD+1. In addition, the Servicing Agent will place a phone call to a financial control representative of Nationwide (or the Distributor) prior to 9:00 a.m. ET on TD+1 to advise Nationwide (or the Distributor) that a facsimile transmission concerning the Instruction is being sent. (d) With respect to all Instructions, Nationwide (or the Distributor's financial control representative) will manually adjust a Fund's records for the Trade Date to reflect any Instructions sent by the Servicing Agent. (e) By no later than 4:00 p.m. on TD+1, and based on the information transmitted to Nationwide (or the Distributor's financial control representative) pursuant to Paragraph 3(c) above, the Servicing Agent will use its best efforts to verify that all Instructions provided to Nationwide (or the Distributor's financial control representative) on TD+1 were accurately received and that the trades for each Account were accurately completed and the Servicing Agent will use its best efforts to notify Nationwide of any discrepancies. 4. As set forth below, upon the timely receipt from the Servicing Agent of the Instructions, the Fund will execute the purchase or redemption transactions (as the case may be) at the Share Price for each Fund computed as of the Close of Trading on the Trade Date. (a) Except as otherwise provided herein, all purchase and redemption transactions will settle on TD+1. Settlements will be through net Federal Wire transfers to an account designated by a Fund. In the case of Instructions which constitute a net purchase order, the Servicing Agent shall, by 1:00 p.m. ET on TD+1, remit funds to the Fund's custodian in the amount necessary to cover such net purchase order. In the case of Instructions which constitute a net redemption order, Nationwide shall, by 1:00 p.m. ET on TD+1, remit funds to the Servicing Agent in the amount necessary to cover such net redemption order, provided that the Fund reserves the right to (i) delay settlement of redemptions for up to seven (7) Business Days after receiving a net redemption order in accordance with Section 22 of the 1940 Act and Rule 22c-1 thereunder, or (iii) suspend redemptions pursuant to the 1940 Act or as otherwise required by law. Settlements shall be in U.S. dollars and a Fund may pay redemption proceeds in whole or in part by a distribution in-kind of readily marketable securities that it holds in lieu of cash in conformity with applicable law or regulations. + + + + + +(b) The Servicing Agent or such other party as may be designated, as record owner of each account ("Record Owner") will be provided with all written confirmations required under federal and state securities laws. (c) On any Business Day when the Federal Reserve Wire Transfer System is closed, all communication and processing rules will be suspended for the settlement of Instructions. Instructions will be settled on the next Business Day on which the Federal Reserve Wire Transfer System is open. The original TD+1 Settlement Date will not apply. Rather, for purposes of this Paragraph 4(c) only, the Settlement Date will be the date on which the Instruction settles. (d) The Servicing Agent shall, upon receipt of any confirmation or statement concerning the accounts, promptly verify by use of the terminal or by such other method acceptable to Nationwide and the Servicing Agent the accuracy of the information contained therein against the information contained in the Servicing Agent's internal record-keeping system and shall promptly, but in no event not more than seven days, advise Nationwide in writing of any discrepancies between such information. Nationwide and the Servicing Agent shall cooperate to resolve any such discrepancies as soon as reasonably practicable. Indemnification In the event of any error or delay with respect to both the Fund/SERV Processing Procedures and the Manual Processing Procedures outlined in Exhibit B herein: (i) which is caused by the Funds or Nationwide, Nationwide shall make any adjustments on the Funds' accounting system necessary to correct such error or delay and the responsible party or parties shall reimburse the Client-shareholder and the Servicing Agent, as appropriate, for any losses or reasonable costs incurred directly as a result of the error or delay but specifically excluding any and all consequential punitive or other indirect damages or (ii) which is caused by the Servicing Agent or by any Client-shareholder, Nationwide shall make any adjustment on the Funds' accounting system necessary to correct such error or delay and the affected party or parties shall be reimbursed by the Servicing Agent for any losses or reasonable costs incurred directly as a result of the error or delay, but specifically excluding any and all consequential punitive or other indirect damages. In the event of any such adjustments on the Funds' accounting system, the Servicing Agent shall make the corresponding adjustments on its internal record-keeping system. In the event that errors or delays with respect to the Procedures are contributed to by more than one party hereto, each party shall be responsible for that portion of the loss or reasonable cost which results from its error or delay. All parties agree to provide the other parties prompt notice of any errors or delays of the type referred to herein and to use reasonable efforts to take such action as may be appropriate to avoid or mitigate any such costs or losses. \ No newline at end of file diff --git a/full_contract_txt/AURASYSTEMSINC_06_16_2010-EX-10.25-STRATEGIC ALLIANCE AGREEMENT.txt b/full_contract_txt/AURASYSTEMSINC_06_16_2010-EX-10.25-STRATEGIC ALLIANCE AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..039942762fe9cd47ba29434004a28c0d063d3a87 --- /dev/null +++ b/full_contract_txt/AURASYSTEMSINC_06_16_2010-EX-10.25-STRATEGIC ALLIANCE AGREEMENT.txt @@ -0,0 +1,259 @@ +STRATEGIC ALLIANCE AGREEMENT This STRATEGIC ALLIANCE AGREEMENT (the "Agreement") is entered into as of March 18, 2010 (the "Effective Date"), between AURA SYSTEMS INC., a Delaware Corporation ("Aura") and ZANOTTI EAST INC., a Massachusetts Corporation ("Zanotti"). WHEREAS, Aura has invented, manufactures and distributes a unique, integrated electromagnetic mobile power generation system capable of delivering on-demand both AC and DC power for numerous end-uses, including without limitation, all-electric transport refrigeration (the "AuraGen"); WHEREAS, the AuraGen is the subject of substantial proprietary information, including but not limited to patents, trademarks, trade secrets, know-how, and confidential information owned by Aura; WHEREAS, Zanotti is a world-wide leading manufacturer and distributor of transport refrigeration systems and is desirous of expanding its market share within the United States, and WHEREAS, Zanotti and Aura are desirous of incorporating the AuraGen power system with various Zanotti transport refrigeration systems to be sold by Aura to end-users in the United States as an integrated all-electric transport refrigeration solution; NOW, THEREFORE, in consideration of their mutual covenants and obligations contained herein, and the mutual benefits to be derived herefrom, Aura and Zanotti (collectively the "Parties"), intending to be legally bound, do hereby covenant and agree as follows: Article 1: Definitions 1.1 The term "AETRU System" means an integrated all-electric vehicle refrigeration system comprising of Product as the refrigeration mechanism and the AuraGen as the power-supply. 1.2 The term "Confidential Information" means all know-how, formulations, recipes, specifications, catalogs, books, price books, maintenance, parts and service manuals, data sheets, sales, service and technical bulletins, customer lists, sales and marketing programs, price lists, cost data, sales aids, such as filmstrips and recordings, and all other publications and information, whether or not reduced to writing, relating to the formulation, manufacture, use, marketing and sale of the AuraGen and/or the Products, as well as any other information which may be divulged by one party under this Agreement to the other in the course of its performance of this Agreement, which is marked as Confidential or which is disclosed under circumstances that reasonably place the recipient on notice of the confidentiality of the information. Confidential Information does not, however, include any information which the recipient can establish (i) was publicly known and made generally available in the public domain prior to the time of disclosure by the discloser; (ii) becomes publicly known and made generally available after disclosure by the discloser to recipient through no fault or breach of recipient; (iii) is already in the possession of recipient without restriction on use or disclosure at the time of disclosure by discloser as shown by recipient's files and records prior to the time of the + + + + + + disclosure; (iv) is obtained by recipient lawfully and without restriction on use or disclosure from a third party without a breach of such third party's obligations of confidentiality; or (v) is independently developed by recipient without use of or reference to discloser's Confidential Information, as shown by recipient's files and records. 1.3 The term "Field of Use" means exclusively transport refrigeration systems for vehicles and trailers. 1.4 The term "Products" means collectively those transport refrigeration systems listed in Exhibit A attached hereto, as well as any future modifications, enhancements or improvements thereto. 1.5 The term "Proprietary Rights" means all Technology, Trademarks, data, inventions, information (including, without limitation, Confidential Information), processes, know-how, trade secrets, sketches, prototypes, notebooks, papers, drawings, formulae (including copies or extracts thereof) and similar intellectual property rights which the respective parties have or may hereafter develop and which are necessary or useful for the development, manufacture, or sale of the AuraGen, the Products, or any components of the Products and/or AuraGen. Further, Proprietary Rights shall include all analyses, specifications, proposals, reports or other information, data or documents (whether in raw, preliminary or final form) and all inventions, discoveries, modifications and improvements, whether or not patentable, which: (a) are concerned in some manner with, but not directed to the AuraGen, the Products or any components thereof; or (b) pertain to processes, procedures, methods, and the like manufacturing, assembling or servicing of the AuraGen or Products. 1.6 The term "Technology" means all patent rights concerning each and every patent, whether U.S. or foreign, owned by or licensed to Company and any associated Aura Proprietary Rights appurtenant thereto which are necessary, used or useful to develop, manufacture, or sell the Products or any of the components of the Products. Aura Technology shall further mean any future modifications, enhancements or improvements to the technology embodied in the patents owned or licensed by Company, the Products, or the Aura Proprietary Rights. 1.7 The term "Territory" means exclusively the United States of America and Canada. 1.8 The term "Trademarks" means all those trademarks, service marks, designs, logos, slogans and trade names belonging or licensed to Aura and/or Zanotti, worldwide. Article 2 Grant of Rights 2.1 Appointment. Pursuant to the terms and conditions set forth in this Agreement, Aura appoints Zanotti as its exclusive supplier of the Products within the Territory and Field of Use and Zanotti hereby accepts such appointment. In order to maintain the exclusivity granted hereunder, Zanotti shall provide Aura with orders for a minimum of (i) one thousand (1,000) AETRU Systems during the first twenty-four (24) months of this Agreement and (ii) seven hundred and fifty (750) AETRU Systems per year thereafter for so long as this Agreement remains in effect (the "Minimum Order"). In the event that Zanotti fails to secure purchases + + + + + + + + + + amounting to the Minimum Order for any particular period, the exclusive supplier rights granted pursuant to this Article 2 shall become non- exclusive commencing immediately following such period in which the Minimum Order was not achieved and Aura shall have full discretion to purchase or otherwise obtain Product from sources other than Zanotti. Aura shall serve as seller for all orders for AETRU Systems (whether such orders are provided by Zanotti or otherwise) and shall directly invoice all buyers and collect the purchase price for all AETRU Systems sold. Article 3 Terms and Conditions 3.1 Ordering of Products. Within thirty (30) days from the Effective Date hereof, Zanotti shall deliver to Aura a minimum total of twelve (12) Products to be delivered to Aura's facilities McDonough, Georgia, of such type as mutually agreed by the Parties (the "Initial Order"). All purchases and delivery of Products shall be made pursuant to separate individual purchase orders issued by Aura to Zanotti consistent with the terms of this Agreement. If any term of a purchase order is inconsistent with this Agreement, then this Agreement shall govern to the extent of any such inconsistency. Except with respect to the Initial Order, Aura shall place all purchase orders for Products at least forty-five (45) days prior to the requested delivery date. 3.2 Warehousing. Zanotti hereby agrees that Aura may, at any given time, store up to two (2) AuraGen systems in such Zanotti facilities as Aura may designate from time to time. Zanotti shall not charge Aura any fee or cost in connection with such warehousing. Zanotti shall not acquire any interest in or right to any property warehoused pursuant to this Section 3.2 by virtue of such warehousing and such property shall remain the sole and exclusive property of Aura (or its respective owner) at all times. It is expressly understood and agreed by the Parties that Zanotti shall incur no liability for any property stored in its facilities pursuant to this Section 3.2 (including without limitation risk of loss, theft or damage) and that all risk of loss and/or damage with respect to any such warehoused property shall belong solely to Aura. Aura shall have full access to all AuraGen systems and/or other Aura equipment warehoused in any Zanotti facilities during normal business hours and at all other reasonable times. 3.3 Pricing. Throughout the first consecutive twelve (12) months of this Agreement, all Products shall be sold to Aura by Zanotti at those prices as listed in Exhibit B, attached hereto. Prior to each twelfth month anniversary of the Effective Date of this Agreement, the Parties shall jointly reevaluate the Product price list and shall mutually agree as to prices for the upcoming twelve-month period. In accordance with Section 3.6 below, at no time shall any Product price exceed the lowest price for which Zanotti sells such Product (or substantial equivalent thereof) in similar quantities to any third party. Notwithstanding anything to the contrary contained in any applicable provision herein, Zanotti shall be permitted to adjust the price of the Products prior to each twelfth month anniversary of the Effective Date to reflect any actual fluctuation in the Consumer Price Index (CPI) during the prior twelve-month period. In the event that the final price of any Product to be sold to Aura by Zanotti pursuant to this Agreement upto, equal or exceeds 150% of the final price of any substantially-similar third part produc, Aura shall notify Zanotti of this lower price and provide Zanotti with the opportunity to match such price with respect to such Product. If, within five (5) business days of receipt of such notice from Aura, Zanotti does not agree to match such price, the exclusive supplier rights granted pursuant to + + + + + + + + + + Article 2 above shall, upon Aura's sole election, immediately become non-exclusive with respect to such specific Product to which the lower price applies and Aura shall have full discretion to purchase or otherwise obtain such Product from sources other than Zanotti. 3.4 Payment. Aura shall remit payment to Zanotti for the invoiced price of any given Product within the earlier of: (i) fifteen (15) business days following Aura's receipt and acceptance of payment from its customer for such AETRU System into which such Product is incorporated; or (ii) forty-five (45) calendar days from the date of Aura's shipment to a customer of such AETRU System into which such Product is incorporated. Aura shall have no obligation to remit payment for any Product before fifteen (15) days following sale to a third-party of such Product nor shall Aura have any obligation to remit payment for any Product not sold by Aura. 3.5 Shipment, Delivery and Risk of Loss. Unless otherwise specifically agreed by the Parties, all Products delivered to Aura from Zanotti pursuant to this Agreement shall be F.C.A., Aura's designated facility. From time to time, the parties may enter into other shipping arrangements. However, no shipping arrangements shall affect or alter in any way the provisions of this Section with respect to transfer of title, responsibility of safe carriage and risk of loss. + + + + + + 3.6 Most Favored Nation. During the term of this Agreement, Zanotti agrees that Aura shall be allowed the full benefit of any and all lower prices and/or any more favorable terms and/or conditions ("MFN" Terms) contained in any other agreement entered into by Zanotti for the sale of any product substantially similar to the Product in the same or lesser quantities described in this Agreement to third parties. Zanotti shall notify Aura in writing of any such MFN Terms within fifteen (15) calendar days after agreeing thereto, and shall make the MFN Terms available to Aura as of the effective date of such agreement and thereafter for the greater of (i) three (3) months or (ii) such time that the MFN Terms remain in effect. 3.7 End-User Warranty. At all times during the Term of this Agreement, Zanotti shall warrant the Products to purchasers of AETRU Systems in accordance with the terms of its standard warranty attached hereto as Exhibit "C" ("End User Warranty"), as such End User Warranty may be modified from time to time by Zanotti, provided however that at no time shall such End User Warranty provide for a warranty coverage period of less than thirty-six (36) months from the time of purchase by the initial end-user. A copy of the End User Warranty shall be included as part of the packaging included with all Product delivered to Aura and Aura shall distribute each Product with all warranty cards, a copy of the End User Warranty and all other + + + + (a) Deliveries may be made in partial shipments. With respect to all deliveries (partial or otherwise) Zanotti shall invoice each Product separately. + + (b) Title and risk of loss shall pass to Aura at the time the Products are tendered by Zanotti to the initial carrier and Aura alone shall be responsible for all freight, customs duties, insurance or other shipping costs. + + (c) In the absence of specific instructions from Aura, Zanotti shall select a reasonable carrier but shall not thereby assume any liability in connection with shipment, nor shall the carrier be construed to be the agent of Zanotti. + + + + + + + + packaging materials intact. Additionally, Zanotti shall offer to end-users the option to purchase extended warranty coverage for an additional twenty-four (24) months - making the total warranty period sixty (60) months. Article 4 Additional Obligations 4.1 Compliance with Law. Each party shall at all times comply with the provisions of all applicable laws and the rules and regulations thereunder, and refrain from engaging in any illegal, unfair or deceptive trade practices or unethical business practices whatsoever with respect to the promotion and sale or service of Products. 4.2 Recalls. Zanotti shall maintain records of all Products sold by Zanotti and shall immediately alert Aura in the event that Zanotti becomes aware of any defect in or hazard posed by any Product. If Aura, any governmental agency or other proper authority issues a product recall or product advisory of any of the Products, Zanotti agrees to cooperate with Aura (i) in contacting purchasers during the course of any such product advisories, recalls and complaints, (ii) in communicating to such purchasers such information or instructions as Aura may reasonably desire be transmitted to such purchasers, (iii) in obtaining the removal of all such recalled Products from customers and (iv) in disposing of such recalled Product as Aura so directs. Aura agrees to reimburse Zanotti for all costs and expenses incurred by Zanotti in connection with such Product advisories, recalls and complaints, unless such advisory, recall or complaint is due to the fault or negligence of Zanotti, its representatives or affiliates. 4.3 Press Releases. In the event any party desires to issue any press release or public announcement concerning any provisions of this Agreement or the transactions contemplated hereby, such party shall so advise the other party hereto, and the parties shall thereafter use commercially reasonable efforts to cause a mutually agreeable release or announcement to be issued. Neither party will publicly disclose or divulge any provisions of this Agreement or the transactions contemplated hereby without the other party's written consent, except as way be required by applicable law, including applicable securities laws or stock exchange regulations, and except for communications to such party's employees and professional advisors. 4.4 Joint Training. Zanotti and Aura shall jointly schedule periodic training sessions at mutually agreed reasonable intervals with respect to installation and maintenance of the AETRU Systems, which Aura and Zanotti shall make available to AETRU System dealers and service providers. Zanotti and Aura shall each bear all living and travel expenses associated with their respective personnel during such training sessions but shall split equally all other costs associated with such training sessions such as, without limitation, facility or equipment rentals - such costs to be mutually agreed to in advance by the Parties. Upon mutual agreement by the Parties, AETRU System dealers and service providers may be charged attendance or other fees in connection with training and/or certification, provided however, that in the event that any such fees are assessed, such fees shall be divided equally among the Parties. 4.5 Joint Sales and Marketing Plan. Within thirty (30) days following the Effective Date of this Agreement, Aura and Zanotti shall develop both a joint marketing plan and a joint sales plan for cooperative worldwide marketing and sales of AETRU Systems. Any such agreement + + + + + + + + + + reached between Zanotti and Aura regarding such worldwide sales and marketing shall prohibit competition among Zanotti and Aura with regard to AETRU Systems and shall be memorized in a separate agreement between the Parties. 4.6 Confidentiality. Each party shall hold all Confidential Information in strict confidence and will in no way disclose or provide such Confidential Information to any person or entity, except (i) with the prior written approval of the owner of such Confidential Information or (ii) as expressly permitted under this Agreement. Each party shall take all necessary measures to prevent such disclosure by its present and future employees, officers, agents, subsidiaries, dealers or consultants during the term of this Agreement and thereafter. Each party shall give prompt notice to the other party of any unauthorized disclosure or use of Confidential Information and must cooperate fully with such other party in remedying each unauthorized use or disclosure. Neither receipt of notice of disclosure under this Section 4.6 nor any action taken by the owner of the improperly disclosed Confidential Information to assist in rectifying an unauthorized disclosure or use of Confidential Information shall constitute a waiver by such party of any breach by the disclosing party of this Article 4. The Parties each expressly acknowledge that all Confidential Information shall remain the sole property of the respective owning party and that all documents and other tangible media that embody any such Confidential Information must be, at such owning party's option, either promptly returned or destroyed, except as otherwise may be required from time to time by applicable law. Confidential Information in documentary or other tangible form, and all copies of it, must be returned promptly to the owning party upon termination of this Agreement or, as applicable, upon earlier expiration of a party's rights thereto in accordance with this Agreement. Each party further acknowledges and agrees that because: (i) an award of money damages in inadequate to compensate a party for any breach of this Article 4; and (ii) any breach of this Article 4 will causes irreparable harm, if there is a breach or threatened breach of this Article 4 by either party, the non-breaching party shall be entitled to equitable relief, including injunctive relief and specific performance, without proof of actual damages. The covenants and agreements contained herein with respect to any Confidential Information deemed a trade secret under applicable law shall continue until the information ceases to be a trade secret under applicable law. The obligations with respect to all other Confidential Information shall continue for a period of five (5) years following termination of this Agreement. Article 5 Representations and Warranties 5.1 Representations and Warranties by Aura: Aura represents and warrants to Zanotti that, as of the date of this Agreement: + + + + + + (a) Power and Authority: Aura has the corporate power and authority to enter into and to carry out the terms and provisions of this Agreement; and this Agreement is the legal, valid and binding obligation of Aura and is enforceable against Aura in accordance with its terms. + + + + + + + + (b) No Conflicting Agreement: Aura has not granted to any person other than Zanotti any right, title or interest or entered into any agreement which is in conflict with or inconsistent with any of the terms or conditions of this Agreement. + + + + 5.2 Representations and Warranties by Zanotti: Zanotti represents and warrants to Aura that, as of the date of this Agreement: + + + + + + + + Article 6 Intellectual Property 6.1 During the Term of this Agreement and subject to its provisions, Aura grants to Zanotti a limited, non-exclusive license to use Aura's Trademarks to identify and promote the sale of the AETRU System within the Field of Use in the Territory and Zanotti grants to Aura a limited, non-exclusive license to use Zanotti's Trademarks to identify and promote the Products used in conjunction with the AETRU System within the Field of Use in the Territory. Zanotti may not use Trademarks belonging or licenses to Aura in connection with the sale or promotion of any goods, services, products, equipment or process other than the Products within the Field of Use in the Territory. Aura may not use Trademarks belonging or licensed to Zanotti in connection with the sale or promotion of any goods, services, products, equipment or process other than the Products within the Field of Use in the Territory. Upon termination of this Agreement, Zanotti and Aura shall each promptly cease using any trademarks belonging to the other Party. + + + + (c) Litigation: There are no actions or proceedings pending, or to Aura's knowledge, threatened, which would prevent or make unlawful the consummation of the transactions contemplated by this Agreement. + + (d) Infringement: Aura has no actual knowledge, that the AuraGen System or, as assembled the AETRU System conflicts with, violate or infringe any rights of any third party. + + (a) Power and Authority: Zanotti has the corporate power an authority to enter into and to carry the terms and provisions of this Agreement; and this Agreement is the legal, valid and binding obligation of Zanotti and is enforceable against Zanotti in accordance with its terms. + + (b) No Conflicting Agreements: The execution, delivery and performance of this Agreement by Zanotti will not conflict with or violate any agreements or understandings to which Zanotti is a party or by which it may be bound. + + (c) Litigation: There are no actions or proceedings pending, or to Zanotti's knowledge, threatened, which would prevent or make unlawful the consummation of the transactions contemplated by this Agreement. + + (d) Infringement: Zanotti has no actual knowledge, that any Product conflicts with, violates or infringes any rights of any third party. + + + + + + + + 6.2 Trademark Markings. The Parties agree that each AETRU System shall prominently bear appropriate Aura and Zanotti Trademarks and shall clearly indicate the respective Parties' ownership of such Trademarks. The Parties further agree to take all reasonably required action in connection with trademark marking or the giving of such other notices as provided for under United States or applicable foreign trademark laws. Neither Party shall remove or deface any Trademark belonging to the other Party without such Party's prior written authorization. 6.3 Trademark Ownership. Zanotti acknowledges and agrees that Aura is the sole and exclusive owner of the Aura Trademarks. Aura likewise acknowledges and agrees that Zanotti s.p.a is the sole and exclusive owner of the Zanotti Trademarks. As such, neither Party shall at any time acquire any rights in the other Party's trademarks by virtue of its use thereof. Further, nothing contained in this Agreement shall be construed as an assignment or grant by either party of any right, title or interest in or to such party's Trademarks, it being understood that all rights relating thereto (except for the licenses granted hereunder for the right to use and utilize the Parties' Trademarks as expressly provided herein) are reserved by the respective Parties. Further, the Parties agree that at no time shall either of them use any Trademark, mark or name confusingly similar to a Trademark, mark or name owned by or licensed to the other party, in any manner without the prior written approval of the other party. Each party each agrees that it will not knowingly do anything inconsistent with the other party's ownership of such party's intellectual property, including without limitation, questioning the validity of that party's Trademarks or registering or attempting to register the other party's Trademarks in its own name or that of any other firm, person or corporation. 6.4 Patent Markings. Each party shall each do everything reasonably required of it by the other party in connection with patent marking or the giving of such other notices as provided for under United States or applicable foreign patent laws. 6.5 Protection of Intellectual Property. Each party agrees to take such actions as the other party may reasonably require for the protection of such other party's proprietary interest in its Trademarks, Technology, and all other Proprietary Rights. Each Party shall cooperate fully and in good faith with the other party for the purpose of preserving such other party's rights in and to the its Trademarks, Technology and all other Proprietary Rights. Each party agrees to promptly notify the other party in writing of any uses, which may be infringements of the trademarks, technology or other proprietary rights which come to its attention. In the event of infringement of a party's Trademarks, Technology, and other Proprietary Right, such party alone shall have the sole right to determine whether or not any action shall be taken on account of any such infringement(s). Article 7 Term and Termiantion 7.1 Term. This Agreement shall be for a period of five (5) years commencing upon the Effective Date hereof unless sooner terminated in accordance with this Agreement (the "Initial Term"). Unless terminated prior to the natural expiration of the Initial Term, upon the expiry of the Initial Term this Agreement shall automatically renew for successive terms of the same duration, unless either party gives written notice to the other of such party's desire not to renew not less than ninety (90) days prior to the date of the expiration of the Initial Term or any + + + + + + + + + + successive term thereafter. For purposes of this Agreement, "Term" shall mean collectively the Initial Term as well as any successive renewal or extension thereof. 7.2 Termination. Notwithstanding Section 7.1 above, this Agreement may be terminated upon the occurrence of any of the following events: + + + (a) At the election of either party, in writing, if: (i) all or substantially all of the assets of the non-terminating party are transferred, sold or liquidated; (ii) the non-terminating party is dissolved; (iii) the non-terminating party is adjudged a bankrupt or becomes insolvent; (iv) the non-terminating party enters into an assignment or other arrangement for the benefit of its creditors; or (v) the ownership or operations of the non-terminating party have materially changed; + + (b) By Aura, in writing in the event that Zanotti fails to meet the minimum purchase requirements as described in Article 3 above, provided, however, that such default has not been remedied by Zanotti within sixty (60) days after receipt of written notice thereof from Aura; + + (c) By either party, if an event of force majeure continues for more than three (3) months as provided in Article 8 below; + + (d) By either party hereto upon sixty (60) days prior written notice to the other party hereto; or + + (e) By the non-defaulting party, (i) upon any default by the other party in the performance of any of its material obligations under this Agreement, if such default has not been remedied within thirty (30) days after receipt of written notice thereof from the non- defaulting party; or (ii) if any representation or warranty of either party herein proves to be incorrect in any material respect. + + + + + + + 7.3 Rights and Obligations upon Termination. Upon termination of this Agreement for whatever reason whatsoever, the Parties shall have the following rights and obligations: + + + + + + + + + + + + (a) Neither party shall be discharged for any antecedent obligations or liabilities to the other party under this Agreement, unless otherwise agreed in writing; + + (b) Aura shall have the right but not the obligation to purchase any or all Products then in Aura's possession at the invoiced price(s). In the event that Aura does not elect to purchase said Products, Aura, at its cost, shall return all such non-purchased Products to Zanotti. + + (c) For a period of not less than two (2) years after the date of termination, each party shall maintain, and make available to the other party upon its request, for inspection and copying all books and records that pertain to performance of and compliance with obligations, warranties and representations under this Agreement. + + + + + + + + 7.4 Effect of Termination. On and after termination of this Agreement, whether pursuant to the provisions of Section 7.3 of otherwise: + + + + + + Article 8 General Provisions 8.1 Entire Agreement. This Agreement, including any Exhibits hereto, represents the entire agreement between the Parties on the subject matter hereof and supersedes all prior discussions, agreements and understandings of every kind and nature between them. This Agreement may be modified, amended, rescinded, cancelled or waived, in whole or in part, only by written instrument signed by all of the Parties hereto. 8.2 Notice. All notices under this Agreement shall be in English and shall be in writing and given by airmail, certified or registered, postage prepaid, return receipt requested, cable, telex or facsimile, promptly confirmed by airmail, addressed to the parties at the addresses immediately below their respective signatures hereto, or to such other address of which either party may advise the other in writing. Any notice given by airmail shall be deemed received by the addressee three (3) business days from the date of mailing. All other forms of notice will be deemed given when sent. 8.3 Force Majeure. Neither party shall be in default hereunder by reason of any failure or delay in the performance (either in whole or in part) of any obligation under this Agreement (other than the payment of money) where such failure or delay arises out of any cause beyond the reasonable control and without the fault or negligence of such party (an "Event of Force Majeure"). Such causes shall include, without limitation, storms, floods, other acts of nature, fires, explosions, riots, war, terrorism or civil disturbance, strikes or other labor unrests, embargoes, shortage or failure in supply of raw materials from the then contemplated sources of supply and no other source or supply can be located or obtained with commercially reasonable + + + + (a) The Parties shall immediately cease all advertising and sale of the AETRU System although Aura may fill any orders received before the date of termination, subject to the provisions hereto; + + (b) NEITHER PARTY SHALL NOT BE LIABLE TO THE OTHER FOR ANY DAMAGES, LOSSES OR EXPENSES RESULTING FROM ANY TERMINATION OR EXPIRATION OF THIS AGREEMENT ARISING FROM ANY CLAIMS ASSERTED WHICH ARE BASED UPON LOSS OF GOODWILL, PROSPECTIVE PROFITS OR ANTICIPATED ORDERS, OR ON ACCOUNT OF ANY EXPENDITURES, INVESTMENTS, LEASES OR COMMITMENTS MADE BY SUCH PARTY; + + (c) All rights granted to either party hereunder shall forthwith and without further act or instrument, be assigned and revert to the original party. In addition, each party will execute any instruments requested by the other which are necessary to accomplish or confirm the foregoing. Any such assignment, transfer or conveyance shall be without consideration other than the mutual agreements contained herein + + + + + + + + diligence and effort, and other governmental actions or regulations which would prohibit either party from ordering or furnishing Products or from performing any other aspects of the obligations hereunder. Within ten (10) days from the date of commencement of an Event of Force Majeure, the party affected by such an event shall advise the other party (the "Other Party") of the date when such delay in performance commenced, and the reasons therefore as enumerated in this Agreement; likewise, within ten (10) days after the delay ends, the party affected by such an Event of Force Majeure shall advise the Other Party of the date when such delay ended, and shall also specify the redetermined time by which the performance of the obligation hereunder is to be completed. In the event that the Event of Force Mejeure continues for a period of sixty (60) days then the Other Party shall have the right to elect to terminate this Agreement upon ten (10) days notice to the party affected by such an event. 8.4 Severability. In the event any one or more of the provisions contained in this Agreement are deemed illegal or unenforceable, in whole or in part, the remaining provisions, and any partially unenforceable provisions to the extent enforceable, shall nevertheless be binding and enforceable. In the event that any act, regulation, directive, or law of a government having jurisdiction and respect of this Agreement, including its departments, agencies or courts, should make it impossible or prohibit, restrain, modify or eliminate any act or obligation of either party under this Agreement, the non-affected party shall have the right, at its option, to suspend this Agreement or the parties may, at their mutual agreement, make such modifications therein as may be necessary. 8.5 Assignment. Except as expressly provided for herein, neither party may assign or otherwise transfer any of its rights or obligations under this Agreement without the other party's prior written approval and any such assignment or transfer shall be void. This Agreement does not create, and shall not be construed as creating, any rights enforceable by any person not a party to this Agreement. 8.6 Applicable Law. This Agreement is deemed made and entered into in the State of California and shall be construed, enforced and performed in accordance with the laws of the State of California, without reference, to choice of law. THE RIGHTS AND OBLIGATIONS OF THE PARTIES IN CONNECTION WITH THIS AGREEMENT AND ANY PURCHASE OF THE PRODUCTS SHALL NOT BE GOVERNED BY THE PROVISIONS OF THE 1980 U.N. CONVENTION ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS. 8.7 Dispute Resolution. Any and all disputes of whatever nature, arising between the Parties of this Agreement or the underlying business relationship, including termination thereof and statutory claims, and which are not resolved between the parties themselves, shall be submitted to binding and final arbitration to be conducted in English, in Los Angeles, California, before a panel of three arbitrators in accordance with the Commercial Arbitration Rules of the American Arbitration Association for Complex Commercial Cases in effect as of the date of this Agreement. Judgment upon the award of the arbitrators may be entered in any court having jurisdiction thereof. In the event of any proceeding in arbitration between the Parties arising in any manner out of this Agreement or the asserted breach thereof, the prevailing party shall recover court costs or costs of arbitration, as appropriate, and reasonable attorneys' fees. + + + + + + + + + + 8.8 Waiver. The waiver or excuse by either party hereto as to any breach, default or deficiency and the performance by the other party of any duty or obligation by the other party to be performed hereunder shall not constitute or be deemed a continuing waiver or excuse of the same or any other duty or obligation owed by the other. 8.9 Interpretation. In the event any claim is made by any party relating to any conflict, omission or ambiguity in this Agreement, no presumption or burden of proof or persuasion shall be implied by virtue of the fact that this Agreement was prepared by or at the request of a particular party or that party's counsel. Reference to "include," "includes" and "including" shall be deemed to be followed by the phrase "without limitation." 8.10 Captions. Captions of sections of this Agreement are included for reference only, shall not be construed as part of this Agreement and shall not be used to define, limit, extend or interpret the terms hereof. 8.11 Currency. Unless otherwise agreed by the parties in writing, all payments required to be made under this Agreement shall be made in United States Dollars via cash, check, wire transfer, or other immediately available funds. The remitting party shall pay at its own expense all charges and expenses associated with the other party's receipt of such payment, including but not limited to credit card transaction fees. 8.12 Remedies Not Exclusive. No remedy conferred by any of the specific provisions of this Agreement is intended to be exclusive of any other remedy and each and every right and remedy hereunder is cumulative with each and every other right and remedy herein or in any other agreement between the parties or under applicable law. 8.13 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall constitute an original and all of which together shall constitute one and the same instrument. 8.14 No Consequential Damages. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR ANY SPECIAL, CONSEQUENTIAL OR INDIRECT DAMAGES, HOWEVER CAUSED. 8.15 Successors. Except as otherwise provided herein, this Agreement shall be binding upon and inure to the benefit of the parties hereto and their permitted successors and assigns. 8.16 No Joint Venture. Nothing contained herein shall be construed to deem the Parties in the relationship of partners or joint venturers, and no party hereto shall have any power to obligate any other party hereto in any manner whatsoever, except as expressly provided for herein. 8.17 Indemnity. Zanotti agrees to indemnify, defend and hold Aura, including its employees, agents and affiliates, harmless from and against any and all payments, damages, demands, claims, losses, expenses, costs, obligations and liabilities (including reasonable attorney's fees and costs), which arise out of, result from or are related to: (i) any breach by Zanotti of any provision contained in this Agreement, including without limitation any obligation, representation, warranty or covenant herein; (ii) any occupational injury or illness sustained by any employee or agent of Zanotti to the extent claims are made against, or held to be payable by + + + + + + + + + + Aura; (iii) any applicable sales or other taxes due from or on behalf of Zanotti regardless of whether such taxes must be collected by Aura on behalf of the taxing authority and regardless of whether Zanotti shall challenge the assessment or amount of such taxes (iv) any negligent or willful act or omission or violation of any contractual arrangement of Zanotti or any of Zanotti's affiliates, officers, directors, agents or employees of each, in connection with its or their performance relating to this Agreement; or (v) Zanotti's agreements, if any, with any other third parties. Aura agrees to indemnify, defend and hold Zanotti, including its employees, agents and affiliates, harmless from and against any and all payments, damages, demands, claims, losses, expenses, costs, obligations and liabilities (including reasonable attorney's fees and costs), which arise out of, result from or are related to the breach by Aura of any representation, warranty or covenant contained in this Agreement. Either party seeking indemnification under this Agreement (the "Indemnified Party") shall give notice to the party required to provide indemnification hereunder (the "Indemnifying Party") promptly after the Indemnified Party has actual knowledge of any claim as to which indemnity may be sought hereunder, and the Indemnified Party shall permit the Indemnifying Party (at the expense of the Indemnifying Party) to assume the defense of any claim or litigation resulting thereform; provided that: (i) counsel for the Indemnifying Party who shall conduct the defense of such claim or litigation shall be reasonably satisfactory to the Indemnified Party; (ii) the Indemnified Party may participate in such defense, but only at the Indemnified Party's own cost and expense; and (iii) the omission by the Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its indemnification obligations hereunder except to the extent that such omissions results in a failure of actual notice to the Indemnifying Party and the Indemnifying Party is damaged as a result of such failure to give notice. The Indemnifying Party shall not, except with the consent of the Indemnified Party, consent to entry of any judgment or administration order or enter into any settlement that (i) could affect the intellectual property rights or other business interests of the Indemnified Party or (ii) does not include as an unconditional term thereof the giving by the claimant or plaintiff to the Indemnified Party of a release form all liability with respect to such claim or litigation. In the event that the Indemnified Party shall reasonably and in good faith determine that the conduct of the defense of any claim subject to indemnification hereunder or any proposed settlement of any such claim by these Indemnifying Party might be expected to affect adversely the Indemnified Party's intellectual property rights or ability to conduct future business, the Indemnified Party shall have the right at all times to take over and assume control over the defense, settlement, negotiations or lawsuit relating to any such claim at the sole cost and expense of the Indemnifying Party. In the event that the Indemnifying Party does not accept the defense of any matter as provided herein, the Indemnified Party shall have the full right to defend against any such claim or demand, and shall be entitled to settle or agree to pay in full such claim or demand, in its sole discretion. The provisions of this Section 8.17 shall survive the expiration or sooner termination of this Agreement. 8.18 Insurance. Both Parties will each have and maintain in full force and effect during the Term of this Agreement (including any post-termination period for which indemnification obligations continue), all product liability and other insurance reasonably necessary to cover + + + + + + + + + + such party's anticipated indemnification obligation and other risk of loss for which it may be liable under this Agreement. All such insurance coverages shall be occurrence based and not claims made. Such policy or policies will (a) have aggregate limits of liability of not less than $1,000,000 with respect to any incident or occurrence and of not less than $2,000,000 in the aggregate; (b) name both Zanotti and Aura as insured parties; and (c) provide that such policy may not be canceled except upon not less than 30 days' written notice to both Zanotti and Aura. Each party will provide such evidence of the effectiveness of such insurance to the other party as may be reasonably requested. [signature page to follow] + + + + + + + + + + IN WITNESS WHEREOF, Aura and Zanotti have caused this instrument to be executed by their duly authorized employees, as of the day and year first above written. AURA SYSTEMS, INC. ZANOTTI USA A Delaware Corporation A Massachusetts Corporation By: By: _____________________________ _____________________________ Melvin Gagerman Zoltan Lemperth CEO [title] _____________________________ Greg Demetri [title] _____________________________ Scott Demetri [title] _____________________________ Michael Driscoll [title] + + + + + + + + + + Exhibit A "Products" + + + + V3.03/17/10 AURA/ZANOTTI STRATEGIC ALLIANCE AGREEMENT Exhibit A + + + + + + + + Exhibit B Product Prices + + + + V3.03/17/10 AURA/ZANOTTI STRATEGIC ALLIANCE AGREEMENT Exhibit B + + + + + + + + Exhibit C End-User Warranty + + + + V3.03/17/10 AURA/ZANOTTI STRATEGIC ALLIANCE AGREEMENT Exhibit C \ No newline at end of file diff --git a/full_contract_txt/AgapeAtpCorp_20191202_10-KA_EX-10.1_11911128_EX-10.1_Supply Agreement.txt b/full_contract_txt/AgapeAtpCorp_20191202_10-KA_EX-10.1_11911128_EX-10.1_Supply Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..3690721fbd05ad1ad66c64f93ccedfb4eecf344e --- /dev/null +++ b/full_contract_txt/AgapeAtpCorp_20191202_10-KA_EX-10.1_11911128_EX-10.1_Supply Agreement.txt @@ -0,0 +1,99 @@ +ODM - SUPPLY AGREEMENT BETWEEN: ORGANIC PREPARATIONS INC. 2nd Floor, Transpacific Haus Lini Highway, Port Vila. Vanuatu "the Manufacturer" -- AND -- AGAPE ATP INTERNATIONAL HOLDING LIMITED Unit 05, 4F, Energy Plaza No. 92, Granville Road Tsim Sha Tsui East Kowloon, Hong Kong "the Customer" + +Source: AGAPE ATP CORP, 10-K/A, 12/2/2019 + + + + + +ODM SUPPLY AGREEMENT THIS AGREEMENT is made on the 15t h day of January 2018. BETWEEN: ORGANIC PREPARATIONS INC. 2nd Floor, Transpacific Haus Lini Highway, Port Vila. Vanuatu ('the Manufacturer') of one part AND: AGAPE ATP INTERNATIONAL HOLDING LIMITED Unit 05, 4F, Energy Plaza No. 92, Granville Road Tsim Sha Tsui East Kowloon, Hong Kong ('the Customer') of the other part. RECITALS a. The Manufacturer wishes to appoint the Customer to be the sole and exclusive agent for the promotion, sales, marketing distribution and administration of the Products listed in schedule A of this agreement. b. The Manufacturer and the Customer wish to record their agreement under the stipulations of this Agreement. NOW IT IS AGREED as follows:- 1. TERMS OF AGREEMENT 1.1 Commencement This agreement commences upon execution of this document. 1.2 Term This agreement is for a term of ten (10) years. 1.3 Renewal This agreement will be automatically renewed at the end of every ten (10) year term, with each subsequent term of renewal being for a ten (10) year term. A six (6) months notice must be given by either party of their intention to terminate relations due to any reason other than breach of this agreement. ODM Supply Agreement 2 Organic Preparations INC. & Agape ATP International Holding Limited + +Source: AGAPE ATP CORP, 10-K/A, 12/2/2019 + + + + + +2. PROVISION OF DOCUMENTATION 2.1 Provision by the Manufacturer The Manufacturer agrees to supply to the Customer, within a reasonable period of time, all documentation and information relating to the Products and their Manufacture as is required for the registration of the Products in the Territories as listed in Schedule C of this document. The party responsible for documentation fees and costs will be the Customer. 2.2 Provision by the Customer The Customer agrees to supply to the Manufacturer at its own expense, within a reasonable period of time, all documentation and information as is reasonably required by or would be beneficial to the Manufacturer in the performance of its obligations under this agreement. 3. COVENANTS BY THE MANUFACTURER 3.1 Compliance with Local Laws and Regulations The Manufacturer covenants that it is and will remain for the term of this agreement in compliance with any and all Local Laws and Regulations. This includes without limitation laws relating to business practice, workplace relations, safety and taxation. 3.2 Manufacturing standards The Manufacturer covenants that it is and will remain for the term of this agreement in compliance with all International standards in production and manufacturing. 3.3 Packaging The Manufacturer covenants that it is and will remain for the term of this agreement in compliance with any and all packaging laws and regulations in all of the Territories. 3.4 Ability to Perform The Manufacturer covenants that it is willing and able to perform any and all of its obligations under this agreement. 3.5 Intellectual Property 3.5 (a) The Manufacturer covenants that the Products are clear of any Intellectual Property claims by third parties and that the Customer has full rights to sell and market the Products worldwide. The Manufacturer indemnifies the Customer for the same. ODM Supply Agreement 3 Organic Preparations INC. & Agape ATP International Holding Limited + +Source: AGAPE ATP CORP, 10-K/A, 12/2/2019 + + + + + +3.5 (b) The composition of the below individuals is also relevant and related to the Intellectual Property of the Manufacturer. The following names listed as Medical Team members, and any subsequent consultations in that capacity, are considered the Intellectual Property of The Manufacturer: 1. Dr Lily Tomas 2. Dr Bernd Friedlander 3. Mr Markus Eistert 4. Dr Ed Smith 5. Mr Vic Cherikoff 6. Dr Pavel Yutsis 7. Dr Michael Tirant 8. Mr Frank Ellis 9. Mr Peter Davids 10. Dr Rutledge Taylor The list shall be expanded and added to in future addendums to this agreement. 3.6 Sale of Product The Manufacturer covenants not to sell any product listed in this agreement, or product name (as listed in schedule A of this agreement) to any other party without prior written consent of the Customer. 4. COVENANTS BY THE CUSTOMER 4.1 Compliance with Local Laws and Regulations The Customer covenants that it is and will remain for the term of this agreement in compliance with any and all Local Laws and Regulations. This includes without limitation laws relating to business practice, workplace relations, safety and taxation. 4.2 Ability to Perform The Customer covenants that it is and will remain for the term of this agreement willing and able to perform any and all of its obligations under this agreement. 4.3 Market Penetration The Customer covenants to give its best endeavours to establish and develop a market for the Products in the Territories with maximum market penetration. ODM Supply Agreement 4 Organic Preparations INC. & Agape ATP International Holding Limited + +Source: AGAPE ATP CORP, 10-K/A, 12/2/2019 + + + + + +5. SHIPPING AND PAYMENT TERMS 5.1 Shipping Products delivered pursuant to the terms of this Agreement shall be suitably packed for shipment in the Manufacturer's standard shipping cartons, marked for shipment to the destination specified in the Customer's Purchase Order, and delivered to the destination Ex Works. The Customer agrees to pay freight, insurance and any associated expenses. The Customer agrees to help the Manufacturer select the most appropriate carrier for each of the Territories. All freight, insurance, and other shipping expenses shall be paid by the Customer. 5.2 Guarantee of packaging quality The Manufacturer further guarantees that the Products, when shipped, are packaged in such a way as to be protected from any foreseeable damage during shipment. 5.3 Rejection of defective products The Customer shall inspect all Products promptly upon receipt thereof and may reject any defective Product, provided that the Customer shall within seven (7) days after receipt of such alleged defective Product, notify the Manufacturer of its rejection and either: (i) request to destroy in field for credit of the value of the defective product and the associated shipping costs (with approval), or (ii) request a Return Material Authorization ("RMA") number and within seven (7) days of receipt of the RMA number from the Manufacturer return such rejected Product to the Manufacturer. Products not rejected within the foregoing time periods shall be deemed accepted by the Customer. In the event that the Manufacturer determines that the returned Product is defective and properly rejected by the Customer, the Manufacturer shall credit to the Customer the value of the defective product and the associated shipping costs. 5.4 Payment terms Unless separate payment terms are agreed to outside of this Agreement by both parties in writing, payment terms will be as follows: (i) 50% of the Total Order Cost must be paid on placement of the customer's order. (ii) The remaining 50% of the total order cost must be paid prior to the goods leaving the warehouse of the manufacturer. The Manufacturer will notify the Customer when the goods are ready for shipment prior to the goods leaving the warehouse. ODM Supply Agreement 5 Organic Preparations INC. & Agape ATP International Holding Limited + +Source: AGAPE ATP CORP, 10-K/A, 12/2/2019 + + + + + +6. INDEMNITY / INSURANCE 6.1 The Manufacturing Companies utilised by the Agent to manufacture the products listed in Schedule A of this agreement shall maintain throughout the term of this agreement product liability insurance issued by a reputable insurance company under standard terms and conditions in the industry to cover the liability of the Customer and to indemnity the Customer from any costs, expenses, loss or damages resulting from any act, neglect or default of the company. 6.2 The Customer shall at all times during the term of this agreement maintain product liability insurance, covering all products sold by the Manufacturer to the Customer and which policy shall name the Manufacturer as Additional Insured. 7. BREACH / TERMINATION 7.1 Notice of Breach Each party has an obligation to notify immediately the other party of any breach of this agreement. 7.2 Rectification of Breach Where the breach is rectifiable, the breaching party has 21 days from the date of notification of its breach to rectify. Following the expiry of this period, the non-breaching party may execute any rights it may have both in law and under this agreement. 7.3 Rights to termination Without prejudice to any right or remedy both parties may have against each other for breach or non-performance of this Agreement each party shall have the right to summarily terminate this Agreement: (a) On the committing of a material breach of this agreement providing that where the breach is capable of rectification the breaching party has been advised in writing of the breach and has not rectified it within twenty-one (21) days of receipt of such advice. (b) On the commencement of the winding up or bankruptcy of either party or on the appointment of a receiver of the distributor's assets or on either party ceasing to do business at any time for thirty consecutive days (other than for annual holidays). (c) On either party for any reason (other than a default of the other party) being substantially prevented from performing or becoming unable to perform its obligations under this agreement. (d) On either party assigning or attempting to assign this agreement without the prior written consent of the other party. ODM Supply Agreement 6 Organic Preparations INC. & Agape ATP International Holding Limited + +Source: AGAPE ATP CORP, 10-K/A, 12/2/2019 + + + + + +(e) If control of either party shall pass from the present shareholders or owners or controllers to other persons whom the other party shall in their absolute discretion regard as unsuitable. (f) Either parties voting stock is transferred to any third party to such extent as to result in a change in effective control of the company or its ownership or active management is changed in any other manner. The termination of this agreement shall be without prejudice to the rights of either party to payment or other claims due or accrued up to the termination of this agreement. For termination to be effective, written notice of termination must be served on the other party. Where valid, termination takes effect immediately upon service. 8. ARBITRATION 8.1 Any and all disputes, claims or differences arising out of or relating to this agreement or the alleged breach thereto shall be settled by mutual consultation between the parties in good faith as promptly as possible but failing such amicable settlement, shall be decided by Arbitration by the Arbitration Committee of the International Chamber of Commerce located in Switzerland. 8.2 The language to be used in the Arbitration proceedings shall be English. 8.3 The award/decision of the Arbitration Committee shall be final and binding on both the parties and enforceable in any jurisdiction. 9. COSTS Each of the parties shall bare its own legal costs and expenses incurred by it in connection with this agreement and any stamp duty payable under this agreement shall be borne by equally by both parties. 10. GOVERNING LAW This agreement shall be governed by the Laws of England (English common and statutory Law). 11. INTELLECTUAL PROPERTY The Manufacturer is the owner of the intellectual Property pertaining to the products listed in schedule A of this agreement as well as to the book 'How to Achieve Super Health beyond 2000 - Advanced Edition' ODM Supply Agreement 7 Organic Preparations INC. & Agape ATP International Holding Limited + +Source: AGAPE ATP CORP, 10-K/A, 12/2/2019 + + + + + +12. TRANSFER OF INTELLECTUAL PROPERTY The Manufacturer agrees to offer the Customer the first right of refusal to purchase the intellectual property for the products listed in Schedule A of this agreement based upon agreed terms. 13. APPOINTMENT AND GRANT OF LICENSE 13.1 The Manufacturer hereby appoints the Customer to be the sole and exclusive agent for the promotion, sales, marketing, distribution and administration of the products listed in schedule A of this agreement based on minimum annual product purchase requirements as listed in Schedule B of this agreement. 13.2 The Manufacturer grants exclusive rights to the Customer for the term of ten (10) years from the date of the signing of this agreement and for an indefinite period upon the customer fulfilling the minimum annual purchase requirement as listed in Schedule B. of this agreement. 14. MISCELLANEOUS PROVISIONS 14.1 Notice Any notice to be served under this agreement must be served by sending it to the usual business address of the recipient by ordinary mail, facsimile, or personal delivery, and in the case of ordinary mail service will be deemed to occur one (1) day after the date of posting, and in all other cases deemed to occur on the same day. 14.2 Entire Agreement This agreement contains the entire understanding of the parties with respect to the subject matter hereof and supersedes all prior agreements relating thereto, written or oral, between the parties. Amendments to this agreement must be in writing, signed by the duly authorized officers of the parties. The terms of any purchase order are expressly excluded 14.3 Conflicting Terms The parties agree that the terms and conditions of this agreement shall prevail, notwithstanding contrary or additional terms, in any purchase order, sales acknowledgment, confirmation or any other document issued by either party effecting the purchase and/or sale of Products. 14.4 Severability If any provision of this agreement is held to be invalid by a court of competent jurisdiction, then the remaining provisions will nevertheless remain in full force and effect. The parties agree to renegotiate in good faith those provisions so held to be invalid to be valid, enforceable provisions which provisions shall reflect as closely as possible the original intent of the parties, and further agree to be bound by the mutually agreed substitute provisions. ODM Supply Agreement 8 Organic Preparations INC. & Agape ATP International Holding Limited + +Source: AGAPE ATP CORP, 10-K/A, 12/2/2019 + + + + + +14.5 No Implied Waivers The failure of either party at any time to require performance by the other of any provision hereof shall not affect the right of such party to require performance at any time thereafter, nor shall the waiver of either party of a breach of any provision hereof be taken or held to be a waiver of a provision itself. 14.6 Assignment The Manufacturer may not transfer or assign any of its rights or obligations under this agreement without the prior written consent of the Customer. The Customer may not freely transfer or assign its rights or obligations under this agreement without the prior written consent of the Manufacturer. Subject to the foregoing, this agreement will be binding upon and inure to the benefit of the parties hereto, their successors and assignees. 14.7 Force Majeure Neither party to this agreement is liable to the other for a breach of this agreement when the breach is as a result of the occurrence of one of the events below: (i) The outbreak of hostilities (whether or not accompanied by any formal declaration of war), riot, civil disturbance, or acts of terrorism; or (ii) The act of any government or competent authority (including the cancellation or revocation of any approval, authority or permit); or (iii) Fire, explosion, flood, inclement weather, or natural disaster; or (iv) The declaration of a state of emergency or the invocation of martial law having an effect on commerce generally; or (v) Industrial action (including strikes and lock-outs) that is of a widespread nature affecting the Principal solely or the industry or sector of which the Principal is a part (whether in a vertical sense or horizontal sense); or (vi) Any other cause, impediment or circumstance beyond the reasonable control of any party. Where the occurrence of one of the above events is to any extent as a result of an act or omission of the breaching party, this section will not apply. 14.8 New Products Designed, Formulated and Supplied by the Manufacturer The Manufacturer agrees to maintain its focus on the design and formulation of new products and agrees to provide the Customer with one new product each quarter for a minimum of four (4) new products per year. The Manufacturer agrees to give the Customer exclusive rights to the marketing, promotion and sales of the new products should the Customer decide to take on the new products. ODM Supply Agreement 9 Organic Preparations INC. & Agape ATP International Holding Limited + +Source: AGAPE ATP CORP, 10-K/A, 12/2/2019 + + + + + +14.9 Other products outside of the product range listed in schedule A of this document The Manufacturer agrees that the Customer has the right under this agreement to consider, source, promote, market and sell other product outside of the products listed in Schedule A of this agreement in line with the following assumptions: That they are non-competing products to the range of products or those products listed in schedule A of this agreement. 14.10 HOW TO ACHIEVE SUPER HEALTH BEYOND 2000 - ADVANCED EDITION BOOK The Manufacturer has appointed the Customer the copyright holder of both the English and the Chinese version of the book How to achieve Super Health beyond 2000 - Advanced Edition, authored by Frank D.P. Ellis and Dr. Michael Tait M.D. This appointment shall be deemed valid provided the Customer fulfils and maintains the criteria of this agreement. The Customer will provide the Manufacturer with prior notification of printing runs of the book and the quantity of books to be printed in each run. The Customer will compensate the Manufacturer the amount of AUS $1.00 per book prior to printing. ODM Supply Agreement 10 Organic Preparations INC. & Agape ATP International Holding Limited + +Source: AGAPE ATP CORP, 10-K/A, 12/2/2019 + + + + + +EQUITY HOLDINGS LIMITED by the duly authorised Officer: __________________________________ ____________________________ Common Seal of Organic Preparations INC. was hereunto affixed in the presence of Duly authorized to sign on behalf of Organic Preparations INC. Date 15 JANAURY, 2018 In the presence of: Witness Signature ____________________ Date 15 JANAURY, 2018 Witness Name Mercy Saula Address 2nd Floor, Transpacific Hous, Port Vila, Vanuatu. Signed under common seal of Agape ATP International Holding Limited with authority of the board. Signature ______________ Name How Kok Choong ______________________ Common Seal of Agape ATP International Holding Limited Date 31 JANAURY, 2018 In the presence of: Witness Signature ___________________________ Date 31 JANAURY, 2018 Witness Name Ku Suat Hong Address 17-1, 17-2, 17-3, 17-4, Wisma Laxton, Jalan Desa,Taman Desa, Off Jalan Klang Lama, 58100 Kuala Lumpur. ODM Supply Agreement 11 Organic Preparations INC. & Agape ATP International Holding Limited + +Source: AGAPE ATP CORP, 10-K/A, 12/2/2019 + + + + + +SCHEDULE A - The Products at Commencement Product names: ATP 1S Survivor Select ATP 2 Energized Mineral Concentrate ATP 3 Ionized Cal-Mag ATP 4 Omega Blend ATP 5 BetaMaxx AGP 1 Iron YFA Young Formula ORYC Organic Soap SCHEDULE B - Minimum Annual Product Performance Requirements Performance targets have been discussed between the Manufacturer and the Customer to determine fair and reasonable performance targets. Minimum Annual Product Performance Requirements are listed below: Product Name: Agreed Quantity of Units to be purchased per Annum: ATP 1 S Survivor Select 150gm packaged 15,000 ATP 2 Energized Mineral Concentrate 29.5mL packaged 20,000 ATP 3 Ionized Cal-Mag 114gm packaged 15,000 ATP 4 Omega Blend 250mL packaged 15,000 ATP 5 BetaMaxx 150gm packaged 15,000 AGP 1 Iron 29.5mL packaged 1000 YFA Young Formula 450gm packaged 3000 ORYC Organic Soap 150gm packaged 2500 ODM Supply Agreement 12 Organic Preparations INC. & Agape ATP International Holding Limited + +Source: AGAPE ATP CORP, 10-K/A, 12/2/2019 + + + + + +SCHEDULE C - THE TERRITORIES The Territories consisting of the following Countries: Global - All countries ODM Supply Agreement 13 Organic Preparations INC. & Agape ATP International Holding Limited + +Source: AGAPE ATP CORP, 10-K/A, 12/2/2019 \ No newline at end of file diff --git a/full_contract_txt/AimmuneTherapeuticsInc_20200205_8-K_EX-10.3_11967170_EX-10.3_Development Agreement.txt b/full_contract_txt/AimmuneTherapeuticsInc_20200205_8-K_EX-10.3_11967170_EX-10.3_Development Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..25bc274db30ff3ca94999f35f834f9df7f4b9def --- /dev/null +++ b/full_contract_txt/AimmuneTherapeuticsInc_20200205_8-K_EX-10.3_11967170_EX-10.3_Development Agreement.txt @@ -0,0 +1,1223 @@ +Exhibit 10.3 + +[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded information is not material and would likely cause competitive harm to the registrant if publicly disclosed. + +Execution Copy + +LICENSE, DEVELOPMENT AND COMMERCIALIZATION AGREEMENT + +DATED AS OF FEBRUARY 4, 2020 + +BY AND BETWEEN + +XENCOR, INC. + +AND + +AIMMUNE THERAPEUTICS, INC. + +Source: AIMMUNE THERAPEUTICS, INC., 8-K, 2/5/2020 + + + + + +TABLE OF CONTENTS Page ARTICLE 1 Definitions 1 + +ARTICLE 2 Licenses 13 + +ARTICLE 3 Development 16 + +ARTICLE 4 Regulatory 17 + +ARTICLE 5 Commercialization 19 + +ARTICLE 6 Supply 20 + +ARTICLE 7 Payments 21 + +ARTICLE 8 Payment; Records; Audits 24 + +ARTICLE 9 Intellectual Property Matters 26 + +ARTICLE 10 Representations, Warranties and Covenants; Compliance 31 + +ARTICLE 11 Indemnification 34 + +ARTICLE 12 Confidentiality 36 + +ARTICLE 13 Term and Termination 40 + +ARTICLE 14 Effects of Expiration Or Termination 40 + +ARTICLE 15 Miscellaneous 43 + +Schedule 1.10 Antibody 50 + +Schedule 1.79 Xencor General Patents 51 + +Schedule 1.81 Xencor Product Specific Patents 52 + +Schedule 2.7 Xencor Know-How, Regulatory Materials, and Regulatory Data 53 + +Schedule 6.1 Initial Product Supply 54 + +Schedule 10.2.6 Exceptions 55 + +Schedule 12.2 Initial Press Release 56 + +Source: AIMMUNE THERAPEUTICS, INC., 8-K, 2/5/2020 + + + + + +LICENSE, DEVELOPMENT AND COMMERCIALIZATION AGREEMENT + +This License, Development and Commercialization Agreement (this "Agreement"), dated as of February 4, 2020 (the "Effective Date"), is made by and between Xencor, Inc. ("Xencor"), and Aimmune Therapeutics, Inc. ("Aimmune"). Xencor and Aimmune are sometimes referred to herein individually as a "Party" and collectively as the "Parties". + +RECITALS + +WHEREAS, Xencor has developed the Antibody (as defined below); + +WHEREAS, Aimmune is interested in further developing and commercializing the Antibody; and + +WHEREAS, Xencor wishes to grant a license to Aimmune under certain intellectual property rights related to the Antibody to develop, manufacture and commercialize the Product (as defined below), and Aimmune wishes to take such license, in each case in accordance with the terms and conditions set forth below. + +NO W THEREFORE, in consideration of the foregoing premises and the mutual promises, covenants and conditions contained in this Agreement, and for other good and valuable consideration, receipt of which is hereby acknowledged, the Parties agree as follows: + +ARTICLE 1 DEFINITIONS + +As used in this Agreement, the following initially capitalized terms shall have the meanings set forth in this ARTICLE 1 or as otherwise defined elsewhere in this Agreement: + +1.1 "Active Ingredient" means any substance (whether chemical or biologic) or mixture of substances intended to be used in the manufacture of a drug (medicinal) product that, when used in the production of such drug, becomes a therapeutically active ingredient of the drug product, and which such substance or mixture of substances is intended to furnish pharmacological activity or other direct effect in the diagnosis, cure, mitigation, treatment or prevention of disease or to affect the structure or function of the body. + +1.2 "Affiliate" means with respect to any person, any other person directly or indirectly controlling, controlled by, or under common control with such person; provided, that, for purposes of this definition, "control" (including, with correlative meanings, the terms "controlled by" and "under common control with"), as used with respect to any person, shall mean (i) the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such person, whether through the ownership of voting securities or by contract or otherwise, or (ii) the ownership, directly or indirectly, of fifty percent (50%) or more of the voting securities of such person. For purposes of this Section 1.2, "person" means mean an individual, corporation, partnership, limited partnership, limited liability company, limited liability partnership, syndicate, person (including a "person" as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, together with the rules and regulations promulgated thereunder), trust, association, entity or government or political subdivision, agency or instrumentality of a government. 1 + +Source: AIMMUNE THERAPEUTICS, INC., 8-K, 2/5/2020 + + + + + +1.3 "Aimmune Agreement Entities" means Aimmune's Affiliates and Sublicensees (excluding distributors). + +1.4 "Aimmune Common Stock" means Aimmune's common stock, par value $0.0001 per share. + +1.5 "Aimmune Field" means the field of [***]. + +1.6 "Aimmune Invention" means an Invention that is Invented, solely or jointly with a Third Party, by or on behalf of Aimmune or its Affiliates. + +1.7 "Aimmune Know-How" means any and all Know-How, whether or not patented or patentable, that is Controlled by Aimmune or its Affiliates as of the Effective Date or at any time during the Term that is necessary or reasonably useful in connection with the Development, Manufacture, Commercialization or other use of the Antibody or Product. + +1.8 "Aimmune Patent" means any Patent that (i) (a) is Controlled by Aimmune (or its Affiliates) as of the Effective Date or comes under the Control of Aimmune (or its Affiliates) during the Term (other than as a result of the licenses granted by Xencor to Aimmune under this Agreement) and (b) that would be infringed by the Development, Manufacture, Commercialization or use of the Antibody or Product or that claims or Covers Aimmune Know-How, or (ii) is an Aimmune Collaboration Patent. + +1.9 "Aimmune Technology" means Aimmune Know-How and Aimmune Patents. + +1.10 "Antibody" means Xencor's humanized antibody known as XmAb7195 having the sequence listed in Schedule 1.10. + +1.11 "Anti-Corruption Laws" means the U.S. Foreign Corrupt Practices Act, as amended, the UK Bribery Act 2010, as amended, as well as Applicable Law related to the prevention of fraud, racketeering, money laundering or terrorism. + +1.12 "Applicable Law" means any applicable United States federal, state or local or foreign or multinational law, statute, standard, ordinance, code, rule, regulation, resolution or promulgation, or any order, writ, judgment, injunction, decree, stipulation, ruling, determination or award entered by or with any Governmental Authority, or any license, franchise, permit or similar right granted under any of the foregoing, or any similar provision having the force or effect of law. For the avoidance of doubt, any specific references to any Applicable Law or any portion thereof, shall be deemed to include all then- current amendments thereto or any replacement or successor law, statute, standard, ordinance, code, rule, regulation, resolution, order, writ, judgment, injunction, decree, stipulation, ruling, or determination thereto. 2 + +Source: AIMMUNE THERAPEUTICS, INC., 8-K, 2/5/2020 + + + + + +1.13 "Baseline Quarter Net Sales" means, on a country-by-country and Product-by-Product basis, the average cumulative Net Sales of such Product in such country during the [***] Calendar Quarters that [***]precede the Calendar Quarter during which a Generic Product with respect to such Product is first commercially sold in such country. For example, if a Generic Product with respect to a given Product is commercially sold in the U.S. for the first time on [***], then the Baseline Quarter Net Sales with respect to such Product and U.S. are the cumulative Net Sales of such Product in the U.S. during the [***] Calendar Quarters of [***] divided by [***]. + +1.14 "Business Day" means a day other than a Saturday, Sunday, or bank or other public holiday in California. + +1.15 "Calendar Quarter" means each three (3) month period commencing January 1, April 1, July 1 or October 1 of any year; provided, however, that (a) the first Calendar Quarter of the Term shall extend from the Effective Date to the end of the first full Calendar Quarter thereafter, and (b) the last Calendar Quarter of the Term shall end upon the expiration or termination of this Agreement. + +1.16 "Calendar Year" means the period beginning on the 1st of January and ending on the 31st of December of the same year; provided, however, that (a) the first Calendar Year of the Term shall commence on the Effective Date and end on December 31 of the same year and (b) the last Calendar Year of the Term shall commence on January 1 of the Calendar Year in which this Agreement terminates or expires and end on the date of termination or expiration of this Agreement. + +1.17 "Clinical Trial" means a clinical trial, including any a Phase I Clinical Trial, Phase II Clinical Trial, Phase III Clinical Trial, or Phase IV Clinical Trial, as the case may be, and as any such trial is defined by an applicable Regulatory Authority. + +1.18 "Co-pay Program" means a program to support patient access to a Product whereby the Product manufacturer makes payments to a Third Party equal to all or part of the difference between the price of Product prescribed to a patient and the amount such patient pays for such Product through such patient's insurance plan. + +1.19 "Combination Product" means any Product containing an Active Ingredient that is not an Antibody. Such Combination Product shall be either (a) priced and sold in a single package containing such multiple products or (b) packaged separately but sold together for a single price. + +1.20 "Commercialize" means, with respect to the Product, to promote, market, distribute, sell (and offer for sale or contract to sell), import, export, or otherwise commercially exploit or provide product support for the Product and to conduct activities, other than Development or Manufacturing, in preparation for conducting the foregoing activities, including activities to produce commercialization support data and to secure and maintain market access and reimbursement. "Commercializing" and "Commercialization" shall have correlative meanings. For the avoidance of doubt, Commercialization does not include Development and Manufacturing. 3 + +Source: AIMMUNE THERAPEUTICS, INC., 8-K, 2/5/2020 + + + + + +1.21 "Commercially Reasonable Efforts" means, with respect to the efforts to be expended by a Party with respect to any objective (e.g., Development Activities and Commercialization hereunder), the level of efforts consistent with the efforts and resources [***] of similar market potential, at a similar stage in development or product lifecycle, taking into account the stage of development or product lifecycle of other of [***] product candidates, safety and efficacy, product profile, cost of goods, the competitiveness of the marketplace, such company's patent position with respect to such product (including such company's ability to obtain or enforce, or have obtained or enforced, such patent rights), the Third Party patent landscape relevant to the product, the regulatory structure involved, the likelihood of regulatory approval, the likelihood and extent of anticipated or actual profitability of the applicable product, and other technical, legal, scientific and medical considerations. Without limiting the foregoing, Commercially Reasonable Efforts requires, with respect to such obligations, that a Party: (i) promptly assign responsibility for such obligation to specific employee(s) who are held accountable for progress and monitor such progress on an on-going basis, (ii) set objectives for carrying out such obligations, and (iii) allocate resources designed to advance progress with respect to such objectives. + +1.22 "Control" or "Controlled by" means, with respect to any Know-How, Invention, Patent, technology, copyright, trademark or other intellectual property right, possession by a Party or its Affiliates (whether by ownership, license grant or other means) of the legal right to grant the right to access or use, or to grant a license or a sublicense to, such Know-How, Invention, Patent, technology, copyright, trademark or other intellectual property right as provided for herein without violating the proprietary rights of any Third Party or any terms of any agreement or other arrangement between such Party (or any of its Affiliates) and any Third Party. + +1.23 "Cover" or "Covering" means, with respect to a particular subject matter at issue and a relevant Patent, that the manufacture, use, sale, offer for sale or importation of such subject matter would, but for the existence of this Agreement, infringe one or more claims in such Patents (or in the case of a Patent application, would infringe if such application were to issue). + +1.24 "Designated Officer" means, with respect to Xencor, the Chief Executive Officer of Xencor (or its designee), and, with respect to Aimmune, the Chief Executive Officer of Aimmune (or its designee). + +1.25 "Develop" means to research, develop, analyze, test and conduct preclinical trials, Clinical Trials (including, for the avoidance of doubt, Phase IV Clinical Trials and any preclinical/clinical/CMC commitments following Regulatory Approval) and all other regulatory trials, for the Product, as well as any and all activities pertaining to manufacturing development, formulation development, medical affairs and lifecycle management, including new indications, new formulations and all other activities, including regulatory activities, related to securing and maintaining Regulatory Approval for the Product, or otherwise characterizing or understanding the properties and uses of the Antibody or the Product. "Developing" and "Development" shall have correlative meanings. 4 + +Source: AIMMUNE THERAPEUTICS, INC., 8-K, 2/5/2020 + + + + + +1.26 "Development Activities" means those Development activities undertaken by or on behalf of Aimmune with respect to the Product. + +1.27 "Dollar" or "$" means the legal tender of the United States of America. + +1.28 "E.U. Major Countries" means the United Kingdom, France, Germany, Italy, and Spain. + +1.29 "FDA" means the United States Food and Drug Administration and any successor Regulatory Authority having substantially the same function. + +1.30 "FD&C Act" means the U.S. Federal Food, Drug and Cosmetic Act, as amended, and the regulations promulgated thereunder. + +1.31 "First Commercial Sale" means, with respect to a Product in any country, the first shipment of such Product to a Third Party in such country for end use or consumption of such Product in such country after Regulatory Approval of such Product in such country or, if earlier, the invoicing of a Third Party for such shipment. + +1.32 "Force Majeure" means any circumstances whatsoever which are not within the reasonable control of the Party affected thereby, potentially including an act of God, war, act of terrorism, insurrection, riot, strike or labor dispute, shortage of materials, fire, explosion, flood, earthquake, government requisition or allocation, breakdown of or damage to plant, equipment or facilities, interruption or delay in transportation, fuel supplies or electrical power, embargo, boycott, order or act of civil or military authority. + +1.33 "Generic Product" means, with respect to a Product and on a country-by-country basis, a product that (a) is marketed for sale in such country [***], (b) contains or comprises an antibody with the [***], (c) is approved [***], and (d) such product, as and to the extent required, is approved through an abbreviated process based in reliance, at least in part, on the safety and efficacy data generated for the prior Regulatory Approval of such Product by Aimmune or an Aimmune Agreement Entity in such country (similar, with respect to the United States, to an Abbreviated New Drug Applications under Section 505(j) of the FD&C Act (21 USC 355(j))) or is approved as a "Biosimilar Biologic Product" under Title VII, Subtitle A Biologics Price Competition and Innovation Act of 2009, Section 42 U.S.C. 262, Section 351 of the PHSA, or, outside the United States, in accordance with European Directive 2001/83/EC on the Community Code for medicinal products (Article 10(4) and Section 4, Part II of Annex I) and European Regulation EEC/2309/93 establishing the community procedures for the authorization and evaluation of medicinal products, each as amended, and together with all associated guidance, and any counterparts thereof or equivalent process inside or outside of the United States or EU to the foregoing. + +1.34 "Good Clinical Practices" or "GCP" means all applicable Good Clinical Practice standards for the design, conduct, performance, monitoring, auditing, recording, analyses and reporting of clinical trials, including, as applicable, (i) as set forth in the International Conference on Harmonisation of Technical Requirements for Registration of 5 + +Source: AIMMUNE THERAPEUTICS, INC., 8-K, 2/5/2020 + + + + + +Pharmaceuticals for Human Use ("ICH") Harmonised Tripartite Guideline for Good Clinical Practice (CPMP/ICH/135/95) and any other guidelines for good clinical practice for trials on medicinal products, (ii) the Declaration of Helsinki (1964) as last amended at the 64t h World Medical Association in October 2013 and any further amendments or clarifications thereto, (iii) U.S. Code of Federal Regulations Title 21, Parts 50 (Protection of Human Subjects), 56 (Institutional Review Boards) and 312 (Investigational New Drug Application), as may be amended from time to time, and (iv) the equivalent Applicable Law in any relevant country, each as may be amended and applicable from time to time and in each case, that provide for, among other things, assurance that the clinical data and reported results are credible and accurate and protect the rights, integrity, and confidentiality of trial subjects. + +1.35 "Good Laboratory Practices" or "GLP" means all applicable Good Laboratory Practice standards, including, as applicable, (i) as set forth in the then-current good laboratory practice standards promulgated or endorsed by the FDA as defined in 21 C.F.R. Part 58, and (ii) the equivalent Applicable Law in any relevant country, each as may be amended and applicable from time to time. + +1.36 "Good Manufacturing Practices" or "GMP" means all applicable Good Manufacturing Practices including, as applicable, (i) the principles detailed in the U.S. Current Good Manufacturing Practices, 21 C.F.R. Sections 210, 211, 601 and 610, (ii) the principles detailed in the ICH Q7 guidelines, and (iii) the equivalent Applicable Law in any relevant country, each as may be amended and applicable from time to time. + +1.37 "Government Official" means: (i) any official, officer, employee, representative, or anyone acting in an official capacity on behalf of: (a) any government or any department or agency thereof; (b) any public international organization (such as the United Nations, the International Monetary Fund, the International Red Cross, or the World Health Organization), or any department, agency, or institution thereof; or (c) any government-owned or controlled company, institution, or other entity, including a government-owned hospital or university; (ii) any political party or party official; and (iii) any candidate for political office. + +1.38 "Governmental Authority" means any United States federal, state or local, or any foreign, government or political subdivision thereof, or any multinational organization or authority, or any authority, agency or commission entitled to exercise any administrative, executive, judicial, legislative, police, regulatory or taxing authority or power, any court or tribunal (or any department, bureau or division thereof), or any governmental arbitrator or arbitral body. For clarity, any Regulatory Authority shall be a Governmental Authority. + +1.39 "IFRS" means international financial reporting standards, or with respect to the U.S., as appropriate, generally accepted accounting principles in the U.S. (GAAP), in each case, consistently applied. + +1.40 "IND" means an investigational new drug application, clinical trial authorization or similar application or submission for approval to conduct human clinical investigations filed with or submitted to a Regulatory Authority in conformance with the requirements of such Regulatory Authority. 6 + +Source: AIMMUNE THERAPEUTICS, INC., 8-K, 2/5/2020 + + + + + +1.41 "Invented" means the acts of (an) inventor(s), as determined in accordance with Applicable Law relating to inventorship set forth in the patent laws of the United States (Title 35, United States Code), in first conceiving an Invention. + +1.42 "Invention" means any discovery or invention, whether or not patentable, conceived or otherwise made by either Party, or by both Parties, in exercising its rights or performing its obligations under this Agreement. + +1.43 "Joint Invention" means an Invention that is Invented jointly by an employee of, or Person under an obligation of assignment to, each of Xencor and Aimmune or their respective Affiliates. + +1.44 "Know-How" means all technical, scientific, regulatory and other information, results, knowledge, techniques and data, in whatever form and whether or not confidential, patented or patentable, including Inventions, invention disclosures, discoveries, plans, processes, practices, methods, knowledge, trade secrets, know-how, instructions, skill, experience, ideas, concepts, data (including biological, chemical, pharmacological, toxicological, pharmaceutical, physical and analytical, safety, quality control, and preclinical and clinical data), formulae, formulations, compositions, specifications, marketing, pricing, distribution, cost, sales and manufacturing data or descriptions. Know-How does not include any Patent claiming any of the foregoing. + +1.45 "Licensed Field" means the diagnosis, treatment or prevention of human diseases and conditions. + +1.46 "Major Territory" means the [***]. + +1.47 "Manufacture" or "Manufacturing" or "Manufactured" means, with respect to the Antibody and Product, the receipt, handling and storage of Active Ingredients, drug substance or drug product, medical devices and other materials, the manufacturing, processing, Packaging and Labeling, holding (including storage), quality assurance and quality control testing (including release) of the Antibody and Product (other than quality assurance and quality control related to development of the manufacturing process, which activities shall be considered Development Activities) and shipping of the Antibody and Product. + +1.48 "Marketing Authorization Application" or "MAA" means an application to the appropriate Regulatory Authority for approval to sell the Product (but excluding Pricing Approval) in any particular country or regulatory jurisdiction, including a Biologics License Application as described in 21 C.F.R. §601.2, as amended. + +1.49 "Medical Science Liaison" means an individual who is employed by or on behalf of Aimmune or its Affiliates and who provides educational services and other educational efforts directed towards the medical and/or scientific community. 7 + +Source: AIMMUNE THERAPEUTICS, INC., 8-K, 2/5/2020 + + + + + +1.50 "Net Sales" means, with respect to a Product, the gross amount invoiced for sales of a Product by a Selling Party to Third Parties for end use, less the following deductions from such gross amounts to the extent attributable to such Product and to the extent actually incurred, allowed, accrued or specifically allocated: + +(a) credits or allowances actually granted for damaged Product, returns or rejections of Product, price adjustments and billing errors; + +(b) governmental and other rebates (or equivalents thereof) granted to managed health care organizations, pharmacy benefit managers (or equivalents thereof), federal, state, provincial, local and other governments, their agencies and purchasers and reimbursers or to trade customers; + +(c) normal and customary trade, cash and quantity discounts, allowances and credits actually allowed or paid; + +(d) payments made as part of a Co-pay Program for a Product; and + +(e) sales taxes, VAT taxes and other taxes directly linked to the sales of Product; + +all as determined in accordance with IFRS on a basis consistent with the Selling Party's annual audited financial statements. + +Net Sales shall not include sales to Affiliates, Sublicensees or contractors engaged by Aimmune to Develop, Manufacture, or Commercialize the Product, solely to the extent that such Affiliate, Sublicensees or contractor purchasing the Product resells such Product to a Third Party. However, subsequent sales of Product by such Aimmune Affiliates, Sublicensees or contractors to a Third Party shall be included in the Net Sales when sold in the market for end-user use. + +Further, any use, supply or provision of Product by Aimmune or Aimmune Agreement Entities at no cost or at a de minimis cost not to exceed [***] percent ([***]%) of the fully burdened cost thereof (i) in connection with patient assistance programs, (ii) for charitable or promotional purposes, (iii) for preclinical, clinical, regulatory or governmental purposes, or compassionate use or other similar programs, or (iv) for tests or studies reasonably necessary to comply with any Applicable Law, regulation or request by a Regulatory Authority shall not be included in Net Sales of Product. Sale or transfer of Products among the Aimmune Agreement Entities shall not result in any Net Sales, in which case Net Sales shall be based only on any subsequent sales or dispositions to a Third Party; provided that the Aimmune Agreement Entity is not an end user. + +In no event shall any particular amount identified above be deducted more than once in calculating Net Sales (i.e., no "double counting" of reductions). + +In the event that Product is sold as part of a financial bundle with other products or included in financial package deals to customers and in such case, the price of Product relevant for the calculation of Net Sales will be the average invoiced sales price of Product in the preceding Calendar Quarter sold separately less the average discount of all products sold as part of such bundle or package. 8 + +Source: AIMMUNE THERAPEUTICS, INC., 8-K, 2/5/2020 + + + + + +For Net Sales of a Combination Product, the Net Sales applicable to such Combination Product in a country will be determined by multiplying the total Net Sales of such combined product by the fraction A/(A+B), where A is the actual price of the Product that is included in such Combination Product in the same dosage amount or quantities in the applicable country during the applicable quarter if sold separately, and B is the sum of the actual prices of all other products with which such Product is combined in such Combination Product, in the same dosage amount or quantities in the applicable country during the applicable quarter if sold separately. If A or B cannot be determined because values for such Product or such other products with which such Product is combined are not available separately in a particular country, then the Parties shall discuss an appropriate allocation for the fair market value of such Product and such other products with which such Product is combined to mutually determine Net Sales for the relevant transactions based on an equitable method of determining the same that takes into account, in the applicable territory, the relative contribution of each Active Ingredient, variations in dosage formulation and relative value to the end user of each Active Ingredient. + +1.51 "Patents" means any and all (i) issued patents, (ii) pending patent applications, including all provisional applications, substitutions, continuations, continuations-in-part, divisionals and renewals, and all patents granted thereon, (iii) patents-of-addition, reissues, and reexaminations, including patent term adjustments, Patent Term Extensions, supplementary protection certificates or the equivalent thereof, (iv) inventor's certificates, (v) other forms of government-issued rights substantially similar to any of the foregoing, and (vi) United States and foreign counterparts of any of the foregoing. + +1.52 "Patent Term Extension" means any term extensions, supplementary protection certificates and equivalents thereof offering Patent protection beyond the initial term with respect to any issued Patents. + +1.53 "Person" means any individual, firm, corporation, partnership, limited liability company, trust, business trust, joint venture, Governmental Authority, association or other entity. + +1.54 "Phase I Clinical Trial" means a study in humans which provides for the first introduction into humans of a product, conducted in normal volunteers or patients to generate information on product safety, tolerability, pharmacological activity or pharmacokinetics, as more fully defined in 21 CFR §312.21(a) or comparable regulations in any country or jurisdiction outside the U.S., and any amended or successor regulations. + +1.55 "Phase II Clinical Trial" means a study in humans for which a primary endpoint is a preliminary determination of efficacy in patients with the disease being studied, as more fully defined in 21 CFR §312.21(b) or comparable regulations in any country or jurisdiction outside the U.S., and any amended or successor regulations. Phase II Clinical Trial shall include in all cases any phase I/II clinical trial. + +1.56 "Phase III Clinical Trial" means a controlled study in humans that is performed after preliminary evidence suggesting effectiveness of a product has been obtained, and is intended to demonstrate or confirm the therapeutic benefit of such product and to gather the additional information about effectiveness and safety that is needed to evaluate the overall 9 + +Source: AIMMUNE THERAPEUTICS, INC., 8-K, 2/5/2020 + + + + + +benefit-risk relationship of such product and to provide support for filing for Regulatory Approval and for such product's labeling and summary of product characteristics, as more fully defined in 21 CFR §312.21(c) or comparable regulations in any country or jurisdiction outside the U.S., and any amended or successor regulations. For the sake of clarity, with respect to what is commonly called a phase II/III study, the Phase III Clinical Trial definition is met upon [***], as further defined in Federal Regulation 21 C.F.R. §312.21(c) and its foreign equivalents. + +1.57 "Phase IV Clinical Trial" means a clinical study in humans initiated in a country after receipt of Regulatory Approval for a biopharmaceutical product in such country, usually within or in support of the approved product labeling. + +1.58 "Pre-Marketing" means all sales and marketing activities undertaken prior to and in preparation for the launch of the Product. Pre-Marketing shall include market research, key opinion leader development, advisory boards, medical education, disease-related public relations, health care economic studies, sales force training and other pre-launch activities prior to the First Commercial Sale of the Product in a given country or other regulatory jurisdiction. + +1.59 "Pricing Approval" means, with respect to any country where a Governmental Authority authorizes reimbursement or access, or approves or determines pricing, for biopharmaceutical products, receipt (or, if required to make such authorization, approval of determination effective publication) of such reimbursement or access authorization or pricing approval or determination (as the case may be). + +1.60 "Product" means any biopharmaceutical product containing or comprising (i) the Antibody; and (ii) any Variant of the Antibody that: (a) [***] and (b) [***]; provided, that a Product does not include any Active Ingredient that is [***], other than the Antibody as described in the foregoing subsections (i) and (ii). For clarity, Product excludes: (1) [***]; (2) [***]; (3) [***]; (4) [***]; (5) [***]; or (6) [***]. + +1.61 "Product Approval" means the approval by a Governmental Authority necessary for the marketing and sale of the Product in a given country or regulatory jurisdiction, which may include the approval of an MAA (but shall not include any Pricing Approvals). + +1.62 "Product Complaint" means any written, verbal or electronic expression of dissatisfaction regarding any Product sold by or on behalf of a Selling Party, including reports of actual or suspected product tampering, contamination, mislabeling or inclusion of improper ingredients. + +1.63 "Promotional Materials" means all written, printed, video or graphic advertising, promotional, educational and communication materials (other than the Product labels and package inserts) for marketing, advertising and promoting of the Product, for use (i) by a Sales Representative or a Medical Science Liaison or (ii) in advertisements, web sites or direct mail pieces. 10 + +Source: AIMMUNE THERAPEUTICS, INC., 8-K, 2/5/2020 + + + + + +1.64 "Regulatory Approval" means, with respect to any biopharmaceutical product in any regulatory jurisdiction for a given indication, approval from the applicable Regulatory Authority permitting the manufacture, sale, distribution or Commercialization of such biopharmaceutical product in such regulatory jurisdiction for such indication in accordance with Applicable Law, including any Pricing Approvals. + +1.65 "Regulatory Authority" means, in a particular country or regulatory jurisdiction, any applicable Governmental Authority involved in granting Regulatory Approval and/or, to the extent required in such country or regulatory jurisdiction, governmental Pricing Approval of a biopharmaceutical product in such country or regulatory jurisdiction. + +1.66 "Regulatory Data" means any and all research data, pharmacology data, chemistry, manufacturing and control data, preclinical data, clinical data and all other documentation submitted, or required to be submitted, to Regulatory Authorities in association with regulatory filings for the Product (including any applicable Drug Master Files, Chemistry, Manufacturing and Control ("CMC") data, or similar documentation). + +1.67 "Regulatory Materials" means regulatory applications, submissions, notifications, communications, correspondence, meeting minutes, registrations, Regulatory Approvals and/or other filings made to, received from or otherwise conducted with a Regulatory Authority that are necessary in order to Develop, Manufacture, obtain marketing authorization, market, sell, distribute or otherwise Commercialize the Product in a particular country or regulatory jurisdiction. Regulatory Materials include INDs, MAAs, presentations, responses, and applications for Product Approvals. + +1.68 "Royalty Term" means, with respect to a Product on a country-by-country basis, the period of time beginning on the First Commercial Sale of such Product in such country and ending the later of (i) the expiration of the last to expire Valid Claim Covering the Antibody or Product in such country, or (ii) [***] ([***]) years from the First Commercial Sale of such Product in such country. Notwithstanding subsections (i) and (ii) above, the Royalty Term for a Product in a country shall not [***]. + +1.69 "Sales Representative" means an individual who is employed by a Party and who performs details and other promotional efforts with respect to the Product. + +1.70 "Selling Party" means Aimmune or another Aimmune Agreement Entity. + +1.71 "Third Party" means any Person other than Xencor, Aimmune or their respective Affiliates. + +1.72 "United States" or "U.S." means the United States of America and its possessions and territories. + +1.73 "Upstream Agreement" means that certain [***] Agreement by and between Xencor and the [***] dated [***]. 11 + +Source: AIMMUNE THERAPEUTICS, INC., 8-K, 2/5/2020 + + + + + +1.74 "Valid Claim" means, with respect to a particular country, (i) a claim of [***] that (a) has not been specifically held permanently revoked, unenforceable or invalid by a decision of a court or other Governmental Authority of competent jurisdiction, which decision is unappealed or unappealable within the time allowed for appeal, and (b) has not been cancelled, withdrawn, abandoned, disclaimed or admitted to be invalid or unenforceable through reissue, disclaimer or otherwise, or (ii) a bona fide claim of a pending patent application [***] that has not been (a) cancelled, withdrawn or abandoned without being re-filed in another application in the applicable jurisdiction, or (b) finally rejected by an administrative agency action from which no appeal can be taken or that has not been appealed within the time allowed for appeal. + +1.75 "Variant" means [***]. + +1.76 "Xencor [***]" means a [***]. + +1.77 "Xencor Invention" means an Invention that is Invented solely or jointly with a Third Party, by or on behalf of Xencor or its Affiliates. + +1.78 "Xencor Know-How" means any and all Know-How, whether or not patented or patentable, (i) to the extent Controlled by Xencor or its Affiliates as of the Effective Date, or, if transferred to Aimmune thereafter during the Term of this Agreement, and that is necessary in connection with the Development, Manufacture, Commercialization or other use of the Antibody or Product or (ii) constituting a Xencor Invention. Notwithstanding the foregoing, in all cases, Xencor Know-How does not include (a) [***], (b) [***], (c) [***], (d) [***], (e) [***], or (f) [***]. + +1.79 "Xencor General Patent" means (i) the Patents identified on Schedule 1.79, including patents issuing from any patent application set forth on Schedule 1.79, (ii) with respect to such Patents set forth on Schedule 1.79, all provisional applications, substitutions, continuations, continuations-in-part, divisionals, renewals, patents-of-addition, reissues, reexaminations and extensions, (iii) all international and domestic counterparts of any of the foregoing, and (iv) any other Patents Controlled by Xencor that claim inventions necessary for the Development, Manufacture, Commercialization or other use of the Antibody or Product as the Antibody and Product exist as of the Effective Date. + +1.80 "Xencor Patent" means Xencor General Patents and Xencor Product Specific Patents. + +1.81 "Xencor Product Specific Patent" means (i) the Patents identified on Schedule 1.81, including patents issuing from any patent application set forth on Schedule 1.81, (ii) with respect to all Patents set forth on Schedule 1.81, all provisional applications, substitutions, continuations, continuations- in-part, divisionals, renewals, patents-of-addition, reissues, reexaminations and extensions, (iii) any [***], and (iv) all international and domestic counterparts of any of the foregoing. + +1.82 "Xencor Technology" means Xencor Know-How and Xencor Patents. 12 + +Source: AIMMUNE THERAPEUTICS, INC., 8-K, 2/5/2020 + + + + + +1.83 Additional Definitions. The following terms have the meanings set forth in the corresponding Sections of this Agreement: + +ARTICLE 2 LICENSES + +2.1 Grant to Aimmune. Subject to the terms and conditions of this Agreement, Xencor hereby grants to Aimmune during the Term an exclusive, worldwide, payment-bearing license under and with respect to Xencor Patents and Xencor's interest in Joint Collaboration Patents, and a non-exclusive, payment bearing license under and with respect to Xencor Know-How, in each case, with the right to sublicense solely in accordance with Section 2.3.2, solely to Develop, Manufacture and Commercialize the Product in and for the Licensed Field; provided that notwithstanding the foregoing, Xencor shall retain the right under and with respect to Xencor Patents and Xencor's interest in Joint Collaboration Patents to the extent necessary to perform its obligations under this Agreement. + +2.2 Additional Licensing Provisions. + +2.2.1 Negative Covenant. Aimmune covenants that it will not use or practice any of Xencor's rights to and under the Xencor Patents, Xencor Know-How or other intellectual property rights licensed (or sublicensed, as applicable) to it under this ARTICLE 2, except for the purposes expressly permitted in the applicable license grant. Aimmune covenants that it will not research or develop (including Develop) the Antibody itself, including not developing any modification, variant, fragment, progeny or derivatives of such Antibody, in each case, in a way that would produce a molecule that is neither the Antibody nor a molecule that falls within the definition of a Product. 13 + +Term Section "Agreement" Preamble "Bankrupt Party" 14.7 "Breaching Party" 13.2 [***] 1.73 "Claim" 11.1 "CMC" 1.66 "Commercialization Data" 5.5 "Confidential Information" 12.1.1 "Controlling Party" 9.4.1(a) "Court" 15.13.3 "Dispute" 15.1 "Effective Date" Preamble "ICH" 1.34 + +Term Section "Indemnified Party" 11.3.1 "Indemnifying Party" 11.3.1 "Infringement Claim" 9.4.1 "Joint Collaboration Patents" 9.1.1 "Aimmune" Preamble "Aimmune Collaboration Patents" 9.1.1 + +"Xencor" Preamble "Xencor Collaboration Patents" 9.1.1 "Losses" 11.1 "Packaging and Labeling" 6.2 + +Term Section "Party" or "Parties" Preamble "Product Trade Dress" 5.4.1 "Product Trademark" 5.4.1 "Recovery" 9.4.2(c)(iv) "Shares" 7.1 "Stock Issuance Agreement" 7.1 "Sublicensee" 2.3.2 "Term" 13.1 "Third Party Patent" 7.3.2(b) "Upfront Payment" 7.1 "VAT" 8.3.3 + +Source: AIMMUNE THERAPEUTICS, INC., 8-K, 2/5/2020 + + + + + +2.2.2 No Implied Licenses; Retained Rights. Except as explicitly set forth in this Agreement, Xencor does not grant any license, express or implied, under its intellectual property rights to Aimmune, whether by implication, estoppel or otherwise. + +2.2.3 Upstream Agreement. Aimmune acknowledges, understands and agrees that (i) the Xencor Know-How licensed to Aimmune pursuant to Section 2.1 includes certain Know-How licensed to Xencor pursuant to the Upstream Agreement, (ii) the license to such Xencor Know-How constitutes a sublicense under the Upstream Agreement, (iii) Aimmune's rights to such Xencor Know-How are subject and subordinate to the terms and conditions of the Upstream Agreement, (iv) Aimmune will comply with the Upstream Agreement, including undertaking such activities as Xencor reasonably requests to so comply, (v) [***] is responsible for any and all payments due under the Upstream Agreement (following the Effective Date) in connection with Developing, Manufacturing and Commercializing the Product by or on behalf of Aimmune (including by or on behalf of its Affiliates or sublicensees), and (vi) Aimmune received a copy of the Upstream Agreement prior to the Effective Date. + +2.3 Performance by Affiliates and Sublicensees. + +2.3.1 Performance by Affiliates. The Parties recognize that each may perform some or all of its obligations under this Agreement through Affiliates; provided, however, that each Party shall remain responsible for and be guarantor of the performance by its Affiliates and shall cause its Affiliates to comply with the provisions of this Agreement in connection with such performance. Each Party hereby expressly waives any requirement that the other Party exhausts any right, power or remedy, or proceed against an Affiliate, for any obligation or performance hereunder prior to proceeding directly against such Party. Wherever in this Agreement the Parties delegate responsibility to Affiliates, the Parties agree that such entities may not make decisions inconsistent with this Agreement, amend the terms of this Agreement or act contrary to its terms in any way. + +2.3.2 Sublicensees. Aimmune shall [***] the right (but not the obligation) to sublicense the rights granted to it under Section 2.1 to its Affiliates or Third Parties (each, a "Sublicensee"); provided, however, that Aimmune shall remain responsible for the performance by any of its direct and indirect Sublicensees and shall cause its direct and indirect Sublicensees to comply with the applicable provisions of this Agreement in connection with such performance. Without limiting the foregoing, Aimmune shall cause its direct and indirect Sublicensees to accept in writing all applicable terms and conditions of this Agreement, including the reporting, audit, inspection and confidentiality provisions hereunder and Sections 2.2.1 and 2.4. For the avoidance of doubt, (a) Aimmune will remain directly responsible for all amounts owed to Xencor under this Agreement, and (b) Aimmune shall cause each Sublicensee (including each tier of Sublicensee) to be subject to the negative and restrictive covenants set forth in Sections 2.2.1 and 2.4, respectively. Aimmune hereby expressly waives any requirement that Xencor exhaust any right, power or remedy, or proceed against a subcontractor, for any obligation or performance hereunder prior to proceeding directly against Aimmune. + +2.4 Restrictive Covenants. Aimmune hereby covenants and agrees that it shall not (and shall cause the other Aimmune Agreement Entities not to), either directly or indirectly, 14 + +Source: AIMMUNE THERAPEUTICS, INC., 8-K, 2/5/2020 + + + + + +Develop, Manufacture, or Commercialize the Product for use outside the Licensed Field. Furthermore, Xencor hereby covenants and agrees that it shall not (and shall cause its Affiliates not to), either directly or through granting a license or other right to, or otherwise facilitating, a Third Party to (a) Develop, Manufacture or Commercialize the Antibody or the Product during the Term, (b) commence any [***] of any [***] that is not the Antibody or a Product and that [***] for use in the Licensed Field, prior to the [***] ([***]t h) anniversary of the Effective Date, or (c) Develop, Manufacture or Commercialize any [***] that is not the Antibody or a Product and that [***] for use in the Aimmune Field during the Term. It is the desire and intent of the Parties that the restrictive covenants contained in this Section 2.4 be enforced to the fullest extent permissible under Applicable Laws and public policies applied in each jurisdiction in which enforcement is sought. Xencor and Aimmune believe that the restrictive covenants in this Section 2.4 are valid and enforceable. However, if any restrictive covenant should for any reason become or be declared by a competent court or competition authority to be invalid or unenforceable in any jurisdiction, such restrictive covenant shall be deemed to have been amended to the extent necessary in order that such provision be valid and enforceable, such amendment shall apply only with respect to the operation of such provision of this Section 2.4 in the particular jurisdiction in which such declaration is made. Further, both Parties agree that [***] of this Agreement. + +2.5 Progress Updates. Aimmune shall keep Xencor informed as to its progress and activities relating to the Development, Manufacture and Commercialization of the Product on [***] basis (i.e., every [***] ([***]) months), including by providing updates on the status of studies necessary for obtaining Regulatory Approval with respect to the Product, regulatory matters and meetings with Regulatory Authorities with respect to the Product, and Commercialization activities commencing no later than [***] ([***]) year prior to the date on which Aimmune estimates the First Commercial Sale of Product will occur. Additionally, to the extent applicable, such updates shall include summaries of Aimmune's Development plans for the Product for the ensuing [***] ([***]) year time period. Any information disclosed under this Section 2.5 shall be treated as Confidential Information as defined in Section 12.1. + +2.6 Upstream Agreement. During the Term, neither Xencor nor any of its Affiliates shall (a) encumber any GPEx Technology, as defined in the Upstream Agreement, to the extent included within the Xencor Technology, or commit any act or permit the occurrence of any omission that would cause the breach or termination of the Upstream Agreement, or otherwise knowingly take actions or permit omissions that would adversely affect the rights granted to Aimmune hereunder with respect to the Xencor Patents and Xencor Know-How, or (b) without Aimmune's prior written consent, amend or otherwise modify or permit to be amended or modified, the Upstream Agreement in any respect that would adversely affect Aimmune's rights with respect to, the Antibody or Products. Xencor shall promptly notify Aimmune upon Xencor's becoming aware of any alleged, threatened, or actual breach of the Upstream Agreement by either Party and shall not take any action that would reasonably give rise to the right of the counterparty to terminate the Upstream Agreement. + +2.7 Technology Transfer. Xencor shall use Commercially Reasonable Efforts to transfer, and Aimmune shall use Commercially Reasonable Efforts to receive, the Xencor Know-How, Regulatory Materials, and Regulatory Data, in each case, as identified on Schedule 2.7 to 15 + +Source: AIMMUNE THERAPEUTICS, INC., 8-K, 2/5/2020 + + + + + +permit and enable Aimmune or its Affiliates to Develop and Manufacture the Product pursuant to the terms of this Agreement no later than [***] ([***]) Business Days after the Effective Date. The technology transfer under this Section 2.7 shall occur in an orderly fashion and in a manner reasonably agreed by the Parties. The implementation and transfer of information pursuant hereto shall be conducted through electronic, email and teleconference consultation between the Parties. [***] shall be responsible for any Development or Manufacturing related out-of-pocket costs associated with such technology transfer, including lab runs, pilot scale testing and demo batches. Xencor will allocate adequate appropriately qualified representatives to enable Aimmune to practice and understand the Xencor Know-How, Regulatory Materials, and Regulatory Data, including in connection with the transition of Manufacturing responsibility to Aimmune, Xencor's obligations under this Section 2.7 shall not exceed an aggregate of [***] ([***]) full- time equivalent hours unless the Parties otherwise agree in writing [***]. + +ARTICLE 3 DEVELOPMENT + +3.1 Overview of Development. Subject to the terms and conditions of this Agreement, Aimmune shall be responsible for the Development of the Product as set forth herein. Aimmune, itself or with or through its Affiliates and Sublicensees, shall use Commercially Reasonable Efforts to perform the Development Activities for the Product to (i) achieve the development milestones set forth in Section 7.2, and (ii) obtain Regulatory Approval for the Product. + +3.2 Compliance. Aimmune shall conduct the Development Activities in accordance with sound and ethical business and scientific practices, and in compliance with all Applicable Law, including GCPs and GLPs, and also including all applicable data privacy and data protection laws. In addition, Aimmune shall not use in any capacity, in connection with its Development (or Commercialization) of the Product hereunder, any Person who has been debarred pursuant to Section 306 of the FD&C Act (or similar Applicable Law outside of the U.S.), or who is the subject of a conviction described in such section, and Aimmune shall inform Xencor in writing promptly if it or any Person who is performing services for Aimmune hereunder is debarred or is the subject of a conviction described in Section 306 (or similar Applicable Law outside of the U.S.), or if any action, suit, claim, investigation or legal administrative proceeding is pending or, to Aimmune's knowledge, is threatened, relating to the debarment of Aimmune or any Person used in any capacity by Aimmune in connection with its Development (or Commercialization) of the Product hereunder. Xencor shall not use in any capacity in connection with performing its obligations under this Agreement, any Person who has been debarred pursuant to Section 306 of the FD&C Act (or similar Applicable Law outside of the U.S.), or who is the subject of a conviction described in such section. Xencor shall inform Aimmune in writing immediately promptly if it or any Person who is performing services for Xencor hereunder is debarred or is the subject of a conviction described in Section 306 (or similar Applicable Law outside of the U.S.), or if any action, suit, claim, investigation or legal administrative proceeding is pending or, to Xencor's knowledge, is threatened, relating to the debarment of Xencor or any Person used in any capacity by Xencor in connection with its Development or Manufacture of the Product prior to the Effective Date or performance under this Agreement or during the Term in the course of performing Xencor's obligations under this Agreement. 16 + +Source: AIMMUNE THERAPEUTICS, INC., 8-K, 2/5/2020 + + + + + +3.3 Development Costs. As between the Parties, Aimmune shall be solely responsible for one hundred percent (100%) of all Development costs incurred with respect to any Development Activities. + +3.4 Records, Reports and Information. Aimmune shall, and shall cause each of the other Aimmune Agreement Entities to, maintain current and accurate records of all Development Activities conducted by it and all data and other information resulting from such work (which records shall include, as applicable, books, records, reports, research notes, charts, graphs, comments, computations, analyses, recordings, photographs, computer programs and documentation thereof (e.g., samples of materials and other graphic or written data generated in connection with the Development Activities)). Such records shall properly reflect all work done and results achieved in the performance of the Development Activities in sufficient detail and in good scientific manner appropriate for regulatory and patent purposes. Aimmune shall document all preclinical studies and Clinical Trials to be conducted in formal written study reports according to applicable national and international (e.g., ICH, GCP and GLP) guidelines. + +ARTICLE 4 REGULATORY + +4.1 Regulatory Filings and Regulatory Approvals. + +4.1.1 General Responsibilities; Ownership of Regulatory Approvals. Aimmune shall be responsible for the preparation of all Regulatory Materials necessary or desirable for obtaining and maintaining the Regulatory Approvals for the Product and Aimmune shall submit such Regulatory Materials, as applicable, to the applicable Governmental Authorities. For clarity, to the extent allowed by Applicable Law, all Regulatory Approvals for the Product shall be held and owned by Aimmune in its name. + +4.1.2 Pricing Approvals. To the extent that a given country or regulatory jurisdiction requires Pricing Approval for sale of the Product, Aimmune shall (to the extent permitted by Applicable Laws) be solely responsible for (and shall use Commercially Reasonable Efforts toward) obtaining and maintaining Pricing Approvals in all such countries and regulatory jurisdictions in which it obtains Regulatory Approval for Product, in its own name. + +4.1.3 Cost of Regulatory Activities. All regulatory costs incurred in connection with the preparation of Regulatory Materials, and obtaining of Product Approvals, for the Product shall be borne solely by Aimmune. Aimmune shall be responsible for all regulatory costs involved in the maintenance of all Regulatory Approvals for the Product. + +4.1.4 Reporting and Review. Pursuant to the updates to be provided to Xencor under Section 2.5, Aimmune shall keep Xencor reasonably informed in connection with the preparation of all material Regulatory Materials, Regulatory Authority review of Regulatory Materials, and Regulatory Approvals, in each case with respect to the Product. 17 + +Source: AIMMUNE THERAPEUTICS, INC., 8-K, 2/5/2020 + + + + + +4.1.5 Safety Reporting. Aimmune shall provide a [***] safety report in connection with the Development of the Product. Aimmune shall determine, [***], the contents and frequency of such reports, but in any event such reports will be made as [***] for Xencor to remain informed of the safety status of the Product to assess, monitor and report to Regulatory Authorities information relevant to the safety of Product in connection with Xencor's efforts to obtain Regulatory Approval of products that are not the Product and that [***], and comply with Applicable Laws. Xencor shall provide a [***] safety report in connection with the development of products (other than Product) that [***]. Xencor shall determine, [***], the contents and frequency of such reports, but in any event such reports will be made as [***] for Aimmune to assess, monitor and report to Regulatory Authorities information relevant to the safety of Product in connection with Aimmune's efforts to obtain Regulatory Approval of the Product and comply with Applicable Laws. + +4.2 No Other Regulatory Filings. Except as otherwise expressly set forth in this ARTICLE 4, Aimmune and Aimmune Agreement Entities shall not file any Regulatory Materials or Regulatory Approvals that are based on any Xencor Technology. + +4.3 Pharmacovigilance and Medical Inquiries. + +4.3.1 Pharmacovigilance. Subject to Section 4.1.1, Aimmune, as the holder of the Product Approvals, shall be responsible for the collection, review, assessment, tracking and filing of information related to adverse events associated with the Product (whether or not Product Approval has been achieved), in each case in accordance with Applicable Law and this Agreement (and Aimmune shall, in the Development and Commercialization of the Product, record, investigate, summarize, notify, report and review all adverse events in accordance with Applicable Law). + +4.3.2 Medical Inquiries for the Product. Following the Effective Date, subject to Section 4.1.1, Aimmune shall be responsible for handling all medical questions or inquiries in each country, including all Product Complaints, with regard to any Product distributed or sold by or on behalf of Aimmune (or any of the other Aimmune Agreement Entities), in each case in accordance with Applicable Law and this Agreement. + +4.3.3 Regulatory Authority Communications. In addition to its obligations under this Agreement, each Party shall disclose to the other Party (and each Party shall have the right to subsequently disclose to its Affiliates and subcontractors and licensees, specifically those licensees of the Product in the case of Aimmune, who are bound by obligations of confidentiality substantially consistent with those in ARTICLE 12) the following regulatory information: All material information pertaining to material adverse or potentially material adverse actions taken or that may be taken by Regulatory Authorities, in connection with the Product or Antibody, including any notice, audit notice, notice of initiation by Regulatory Authorities of investigations, detentions, seizures or injunctions concerning the Product or Antibody, notice of violation letter (i.e., an untitled letter), warning letter, service of process or other equivalent 18 + +Source: AIMMUNE THERAPEUTICS, INC., 8-K, 2/5/2020 + + + + + +communication or action. Without limiting the generality of the foregoing, each Party shall promptly, but in any event within [***] ([***]) Business Days, inform the other Party of any material adverse or potentially material adverse actions taken or that may be taken by Regulatory Authorities in connection with the Product or Antibody, including any notice, audit notice, notice of initiation by Regulatory Authorities of investigations, detentions, seizures or injunctions concerning the Product or Antibody, notice of violation letter (i.e., an untitled letter), warning letter, service of process or other equivalent communication or action. + +4.3.4 Recall, Withdrawal, or Market Notification of Product. In the event that any Governmental Authority threatens or initiates any action to remove the Product from the market, Aimmune shall notify Xencor of such communication promptly, but in no event later than [***] ([***]) Business Days, after receipt thereof. Aimmune shall [***] any recall, withdrawal or market notification of the Product. As between the Parties, all costs and expenses associated with implementing a recall, withdrawal or market notification with respect to the Product shall be borne by [***]. + +ARTICLE 5 COMMERCIALIZATION + +5.1 Commercialization. During the Term, as between the Parties, Aimmune shall be solely responsible for Commercializing the Product. Aimmune shall be responsible for one hundred percent (100%) of the expenses (including Pre-Marketing and other Commercialization expenses) incurred in connection with the Commercialization of the Product. + +5.2 Aimmune's Performance. + +5.2.1 Specific Commercialization Obligations. Without limiting the generality of the provisions of Section 5.1, in connection with the Commercialization of the Product by or on behalf of Aimmune or its Affiliates and Sublicensees hereunder: + +(a) Aimmune, itself or with or through its Affiliates and Sublicensees, shall (i) use Commercially Reasonable Efforts to Commercialize the Product in the Licensed Field throughout the Major Territory, (ii) represent the Product accurately and fairly, and (iii) not sell or distribute the Product in a bundle with other products at a discount that is not equitably allocated between Product and other products with which the Product is bundled. + +(b) Aimmune shall not (i) [***], or (ii) utilize deceptive, misleading or unethical business practices, in each case in the course of performing activities pursuant to this Agreement. + +(c) Aimmune, itself or with or through its Affiliates and Sublicensees, shall be solely responsible for (i) receiving, accepting and filling orders for the Product, (ii) handling all returns of the Product, (iii) controlling invoicing, order processing and collection of accounts receivable for the sales of the Product, and (iv) distributing and managing inventory of the Product. 19 + +Source: AIMMUNE THERAPEUTICS, INC., 8-K, 2/5/2020 + + + + + +5.3 Reports. Without limiting Aimmune's other reporting obligations hereunder, Aimmune shall, during the fourth Calendar Quarter of each Calendar Year after the First Commercial Sale of a Product, provide Xencor [***] involving Product during the preceding four (4) Calendar Quarters. + +5.4 Product Trademarks and Product Trade Dress. + +5.4.1 Product Trademark. Aimmune shall Commercialize the Product under the trademark and the trade dress selected by Aimmune (the "Product Trademark" and the "Product Trade Dress", respectively). + +5.4.2 Use and Ownership of Product Trademarks and Product Trade Dress. All uses of the Product Trademark and Product Trade Dress by Aimmune (and its other Aimmune Agreement Entities) to identify and/or in connection with the Commercialization of the Product shall be in accordance with Regulatory Approvals and all Applicable Law. Aimmune or the other Aimmune Agreement Entities shall own and retain all rights to the Product Trademark and Product Trade Dress (in each case, together with all goodwill associated therewith). Aimmune or the other Aimmune Agreement Entities shall also own rights to any internet domain names incorporating the Product Trademark or any variation or part of such trademark as its URL address. + +5.4.3 Maintenance of Product Trademark. During the Term, Aimmune or the other Aimmune Agreement Entities will use Commercially Reasonable Efforts to establish and maintain the Product Trademark and will [***]. + +5.4.4 No Inclusion of Xencor Logos on Packaging and Promotional Materials. Notwithstanding anything to the contrary herein, Aimmune shall not use any Xencor trademark, names, logos or housemark in connection with any Promotional Materials or the Product without Xencor's written consent. Without limiting the foregoing, Aimmune will take no action that will interfere with or diminish Xencor's rights in its respective trademarks, names and logos, and if Xencor reasonably believes that the use of any trademarks, names and logos by Aimmune hereunder is interfering with or diminishing its rights, Xencor shall notify Aimmune thereof in writing and Aimmune shall promptly cease use of such trademarks, names or logos in such manner. + +5.5 Commercialization Data. As between the Parties, Aimmune shall own all marketing and sales data and information resulting from its Commercialization of the Product during the Term (the "Commercialization Data"), including promotional materials, marketing strategies and market research data. + +ARTICLE 6 SUPPLY + +6.1 Initial Product Supply. Xencor shall provide a [***] supply of Product to Aimmune in the amounts and in the form set forth on Schedule 6.1, which Aimmune agrees to accept on an as-is basis. Xencor shall make available to Aimmune the quantity of the Product 20 + +Source: AIMMUNE THERAPEUTICS, INC., 8-K, 2/5/2020 + + + + + +specified on Schedule 6.1 within [***] ([***]) Business Days from the Effective Date or otherwise as agreed to by the Parties, and shall provide appropriate documentation at such time (i.e., appropriate certificates of analysis or compliance, as applicable). The Product shall be made available to Aimmune [***]. For clarity, Aimmune shall bear all costs in connection with such supply of Product related to shipping, taxes, additional testing and other matters. + +6.2 Packaging and Labeling; Certain Other Manufacturing Activities. Notwithstanding anything to the contrary contained herein, Aimmune or its designated Third Party shall be responsible ([***]) for all final product labeling and packaging (whether in commercial or clinical packaging presentation), including materials such as patient inserts, patient medication guides, professional inserts and any other written, printed or graphic materials accompanying the Product and considered to be part of the finished Product packaging and labeling, and handling, storage, quality control, quality assurance, testing and release (collectively, "Packaging and Labeling"). Aimmune or its designated Third Party shall ensure that all such Packaging and Labeling complies with Applicable Laws, GMPs and the Regulatory Approvals for the Product. To the extent that a Third Party is involved in Packaging and Labeling or other activities described in this Section 6.2, [***] shall be [***] responsible for[***], qualifying such Third Party to perform such activities. + +ARTICLE 7 PAYMENTS + +7.1 Upfront Payments. Within [***] ([***]) days after the Effective Date of this Agreement, Aimmune shall issue to Xencor shares of Aimmune Common Stock (the "Shares") in accordance with that certain Stock Issuance Agreement, dated the date hereof, by and among Xencor and Aimmune (the "Stock Issuance Agreement"), and pay to Xencor by wire transfer of immediately available funds, into an account designated in writing by Xencor, an amount equal to five million Dollars ($5,000,000) (together with the issuance of the Shares, the "Upfront Payment"). The Upfront Payment shall be nonrefundable and noncreditable against any other payments due hereunder. + +7.2 Milestone Payments. Aimmune shall pay to Xencor the one-time milestone payments described in this Section 7.2 following achievement (and only upon the first occurrence) of the corresponding milestone event for a Product. Aimmune shall promptly notify Xencor in writing of, but in no event later than [***] ([***]) days after, the achievement of each such milestone event with respect to a Product. Aimmune shall pay the applicable milestone payment by wire transfer of immediately available funds within [***] ([***]) days after the achievement (and only upon the first occurrence) of the applicable milestone event into an account designated by Xencor in writing. Each such milestone payment is nonrefundable and noncreditable against any other payments due hereunder. 21 + +Source: AIMMUNE THERAPEUTICS, INC., 8-K, 2/5/2020 + + + + + +Milestone Event Milestone Payment Development Milestone [***] $ [***] [***] $ [***] [***] $ [***] [***] $ [***] [***] $ [***] [***] $ [***] Sales Milestones [***] $ [***] [***] $ [***] [***] $ [***] [***] $ [***] + +7.3 Royalty Payments. + +7.3.1 Product. On a Product-by-Product and country-by-country basis during the Royalty Term applicable to such Product and such country, Aimmune shall pay to Xencor the following royalties on Net Sales of Products, subject to Section 7.3.2: + +Aggregate Annual Net Sales Royalty Rate [***] [***]% [***] [***]% [***] [***]% [***] [***]% [***] [***]% + +[***]. 22 + +Source: AIMMUNE THERAPEUTICS, INC., 8-K, 2/5/2020 + + + + + +7.3.2 Royalty Reductions. + +(a) No Valid Claim. On a country-by-country and Product-by-Product basis, if at any time during the Royalty Term with respect to such country and such Product, such Product is not Covered by any Valid Claim of a [***], the royalty rate applied to Net Sales of such Product shall be the royalty rate in Section 7.3.1 reduced by [***] percent ([***]%) for so long as during the Royalty Term such Product is not Covered by a Valid Claim of a [***] in such country. + +(b) Third Party Intellectual Property. Aimmune shall have the right (but not the obligation), at its own expense (subject to the reduction provided for by this Section 7.3.2(b)), to obtain any licenses from any Third Parties that are not Sublicensees of Aimmune with respect to a Product in such country under any issued Patents that would be infringed by the practice of Xencor Technology licensed under Section 2.1 with respect to a given Product in a particular country (each such Patent, a "Third Party Patent"). If Aimmune obtains such a license to a Third Party Patent, Aimmune shall be entitled to credit [***] percent ([***]%) of the royalties paid to such Third Party during a Calendar Quarter against the royalty payment otherwise payable by Aimmune to Xencor pursuant to this Section 7.3 with respect to such Product and such country in such Calendar Quarter. Notwithstanding the foregoing, Aimmune shall have no right to reduce payments due to Xencor under this Agreement by any amount paid to [***] in connection with the Upstream Agreement or any other agreement entered into between Aimmune and [***]. + +(c) Generic Competition. On a country-by-country and Product-by-Product basis, if at any time during the Royalty Term with respect to such country and such Product there is one or more Generic Product(s) with respect to such Product being sold for [***]) consecutive Calendar Quarters, then [***] for such country and such Product, the royalty rate for such Product shall be reduced, after giving effect to any reduction applicable to such Product in such country pursuant to [***], on a Calendar Quarter basis as follows: + +(i) if the cumulative Net Sales of such Product in such country during such Calendar Quarter are equal to or less than [***] percent ([***]%), but are greater than [***] percent ([***]%), of the Baseline Quarter Net Sales, then the royalty rate will be reduced for such Calendar Quarter by [***] percent ([***]%); and + +(ii) if the cumulative Net Sales of such Product in such country during such Calendar Quarter are less than [***] percent ([***]%) of the Baseline Quarter Net Sales of the Baseline Quarter Net Sales, then the royalty rate for such Calendar Quarter will be reduced by [***] percent ([***]%). + +provided, that, for clarity, on a country-by-country and Product-by-Product basis, there will be no royalty rate reduction with respect to a given country and Product pursuant to this Section 7.3.2(c) with respect to the initial [***] ([***]) consecutive Calendar Quarter periods during which Generic Product entry with respect to such Product and such country is being established. 23 + +Source: AIMMUNE THERAPEUTICS, INC., 8-K, 2/5/2020 + + + + + +(d) Royalty Floor. Notwithstanding any provision set forth in this Agreement to the contrary, none of the permitted reductions to royalties provided in this Section 7.3.2 will reduce any royalty payment payable in a given Calendar Quarter with respect to Net Sales of any Product in any country during the Royalty Term by more than [***] percent ([***]%) of the royalties otherwise owed to Xencor pursuant to Section 7.3.1. + +ARTICLE 8 PAYMENT; RECORDS; AUDITS + +8.1 Royalty Payments and Reports. The royalty payments due by Aimmune to Xencor under Section 7.3 shall be calculated, reported and paid for each Calendar Quarter within [***] ([***]) days after the end of each Calendar Quarter and shall be accompanied by a report setting forth Net Sales of Products by Aimmune in sufficient detail to permit confirmation of the accuracy of the royalty payment made, including the gross sales and Net Sales of each Product, on a country-by-country basis, and the exchange rates used in accordance with Section 8.2. Without limiting the generality of the foregoing, Aimmune shall require its Affiliates and other Aimmune Agreement Entities to account for its Net Sales and to provide such reports with respect thereto as if such sales were made by Aimmune. + +8.2 Manner and Place of Payment. When conversion of payments from any currency other than U.S. Dollars is required, such conversion shall be at an exchange rate equal to the rates of exchange for the currency of the country from which such payments are payable as published by The Wall Street Journal, Western U.S. Edition, on the last Business Day of the Calendar Quarter in which the applicable sales were made in such country. All payments hereunder shall be payable in U.S. Dollars. All payments owed under this Agreement shall be made by wire transfer in immediately available funds to a bank and account designated in writing by Xencor, unless otherwise specified in writing by Xencor. + +8.3 Taxes. + +8.3.1 The Parties acknowledge and agree that it is their mutual objective and intent to minimize, to the extent feasible, taxes payable with respect to their collaborative efforts under this Agreement to cooperate and coordinate with each other to achieve such objective. For the avoidance of doubt, as between the Parties, Aimmune shall be responsible for any Branded Prescription Drug Fees that may be levied under section 9008 of the Affordable Care Act with respect to any Product sold. + +8.3.2 Subject to this Section 8.3.2, Xencor will pay any and all taxes, including withholdings, levied on account of any payments made to it under this Agreement. If any taxes are paid or required to be withheld by Aimmune for the benefit of Xencor on account of any payments payable to Xencor under this Agreement, Aimmune will (i) deduct such taxes from the amount of payments otherwise due to Xencor, (ii) timely pay the taxes to the proper taxing authority, (iii) send proof of payment to Xencor within [***] ([***]) days following such payment and (iv) cooperate with Xencor in any way reasonably required by Xencor to obtain available reductions, credits or refunds of such taxes. Notwithstanding the foregoing, if (a) Aimmune assigns its rights or obligations or delegates its rights under this Agreement, (b) as a 24 + +Source: AIMMUNE THERAPEUTICS, INC., 8-K, 2/5/2020 + + + + + +result of such assignment or delegation, Aimmune (or its assignee) is required by Applicable Law to withhold taxes from or in respect of any amount payable under this Agreement, and (c) such withholding taxes exceed the amount of withholding taxes that would have been applicable but for such assignment or delegation, then any such amount payable shall be increased to take into account such withholding taxes as may be necessary so that, after making all required withholdings (including withholdings on the additional amounts payable), the payee receives an amount equal to the sum it would have received had no such increased withholding been made. Each Party shall cooperate with the other Party in any way reasonably requested by the other Party to minimize the withholding tax implications of any such assignment or delegation. + +8.3.3 Aimmune shall be responsible for all Value Added Taxes ("VAT"), if any, attributable to transactions contemplated by this Agreement without any offset or reimbursement from Xencor. Xencor shall cooperate with Aimmune in any way reasonably requested by Aimmune to obtain available reductions, credits or refunds of any VAT amounts attributable to transactions contemplated by this Agreement. + +8.3.4 [***]. + +8.4 Records; Audits. During the Term and for [***] ([***]) years thereafter, Aimmune shall keep, and shall cause its Affiliates and Sublicensees to keep and provide to Xencor, complete and accurate records pertaining to the sale or other disposition of Product in sufficient detail to permit Xencor to confirm the accuracy of payments due hereunder. Xencor shall have the right, upon [***] ([***]) days' prior written notice to Aimmune, to cause an independent, certified international public accounting firm reasonably acceptable to Aimmune or reasonably acceptable to its Affiliates or Sublicensees, as applicable, to audit such records during Aimmune's, or its Affiliate's or Sublicensees', as applicable, normal business hours to confirm the number of Product units sold, the gross sales and Net Sales of Product, the royalties payable, the method used to calculate the royalties payable, and the exchange rates used in accordance with Section 8.2. The audit shall be limited to pertinent records kept by Aimmune and its Affiliates and Sublicensees for any year ending not more than [***] ([***]) months prior to the date of the written notice. An audit under this Section 8.4 shall not occur more than [***] in any Calendar Year, except in the case of any subsequent "for cause" audit. The accounting firm shall disclose to Xencor only whether the reports are correct or incorrect and the specific details concerning any discrepancies. No other information shall be provided to Xencor. The accounting firm shall provide Aimmune with a copy of any disclosures or reports made to Xencor and Aimmune shall have an opportunity to discuss such disclosures or reports with Xencor and the accounting firm. Information, disclosures, or reports arising from any such examination shall be Confidential Information of Aimmune subject to the confidentiality and other obligations of ARTICLE 12. Prompt adjustments shall be made by the Parties to reflect the results of such audit. Xencor shall bear the full cost of such audit unless such audit discloses an underpayment of more than [***] percent ([***]%) of the payments due under this Agreement, in which case, [***]. + +8.5 Late Payments. In the event that any payment due under this Agreement is not sent to Xencor when due in accordance with the applicable provisions of Sections 7.1, 7.2, or 8.1, the payment shall accrue interest from the date due at the [***], plus an additional [***] 25 + +Source: AIMMUNE THERAPEUTICS, INC., 8-K, 2/5/2020 + + + + + +percentage points ([***] ppts); provided, however, that (a) in the event that more than [***] payment due under this Agreement is not received by Xencor when due, the foregoing rate shall increase to the prime rate plus an additional [***] percentage points ([***] ppts) per year calculated on the number of days such payment is delinquent, compounded annually and computed on the basis of a three hundred sixty five (365) day year, and (b) in no event shall such rate exceed the maximum legal annual interest rate. The payment of such interest shall not limit Xencor from exercising any other rights it may have as a consequence of the lateness of any payment. + +ARTICLE 9 INTELLECTUAL PROPERTY MATTERS + +9.1 Ownership of Intellectual Property. + +9.1.1 General. Subject to the provisions of this Section 9.1.1 and except as expressly set forth otherwise in this Agreement, (i) Xencor shall solely own Patents Covering any Xencor Invention ("Xencor Collaboration Patents"), and (ii) Aimmune shall solely own Patents Covering any Aimmune Invention ("Aimmune Collaboration Patents"). All Joint Inventions shall be jointly owned by the Parties, and Patents Covering Joint Inventions shall be referred to as "Joint Collaboration Patents". Each Party shall promptly disclose to the other Party all Xencor Inventions, Aimmune Inventions and Joint Inventions, as applicable, made by it during the Term. The determination of inventorship for such Inventions shall be made in accordance with Applicable Law relating to inventorship set forth in the patent laws of the United States (Title 35, United States Code). + +9.1.2 Employees. Each Party will require all of its and its Affiliates' employees to assign all Inventions that are developed, made or conceived by such employees according to the ownership principles described in Section 9.1.1 free and clear of all liens, encumbrances, charges, security interests, mortgages or other similar restrictions. Each Party will also use its Commercially Reasonable Efforts to require any agents or independent contractors performing an activity pursuant to this Agreement to assign all Inventions that are developed, made or conceived by such agents or independent contractors to the relevant Party, according to the ownership principles described in Section 9.1.1 free and clear of all liens, encumbrances, charges, security interests, mortgages or other similar restrictions. + +9.2 Disclosures; Disputes Regarding Inventions. Each Party shall, before filing a new Patent application (including provisionals and continuations-in-part) claiming an Invention, promptly disclose such Invention to the other Party and shall provide to the other Party with a copy of the proposed patent application at least [***] ([***]) Business Days before filing such application or such shorter time as may be required to preserve Patent rights, including the avoidance of a statutory bar or prior publication. If such other Party believes that the first Party's proposed Patent application discloses such other Party's Confidential Information, such other Party shall so notify the first Party within such [***] ([***]) Business Days after receipt thereof, and such first Party shall amend its proposed application to comply with the confidentiality provisions of this Agreement. If the Parties are in agreement as to the designation of the Invention as a Xencor Invention, Joint Invention or Aimmune Invention, as applicable, they can 26 + +Source: AIMMUNE THERAPEUTICS, INC., 8-K, 2/5/2020 + + + + + +continue as set forth in Section 9.3. If the Parties disagree as to whether an Invention is a Xencor Invention, Joint Invention or Aimmune Invention, and are unable to reach agreement within [***] ([***]) days after commencing discussions, then the provisions of Section 15.1 shall apply to such dispute without limiting either Party's right to continue with filing such application. + +9.3 Patent Filings, Prosecution and Maintenance. + +9.3.1 Xencor General Patents. Subject to, and without limiting Aimmune's rights under, Section 9.4 of this Agreement, Xencor shall have the sole right to prepare, file, prosecute and maintain all Xencor General Patents, [***], including by conducting reissues, reexaminations, interferences, and/or defending against post grant proceedings, such as inter partes reviews and oppositions and other challenges to the validity or enforceability of such Xencor General Patents. Xencor shall keep Aimmune generally informed of the status of Xencor General Patents upon Aimmune's request reasonable request from time-to-time. + +9.3.2 Xencor Product Specific Patent, Aimmune Patents and Joint Collaboration Patents. + +(a) Aimmune shall have the first right to prepare, file, prosecute and maintain (i) Xencor Product Specific Patents, (ii) Aimmune Patents Covering an Antibody or Product, and (iii) Joint Collaboration Patents, [***], including by conducting reissues, reexaminations, interferences, and/or defending against post grant proceedings, such as inter partes reviews and oppositions and other challenges to the validity or enforceability of the relevant Patent; provided that Aimmune shall receive Xencor's prior written approval, not to be unreasonably withheld or delayed, before conducting reissues, reexaminations, interferences, and/or defending against post grant proceedings for the [***], such as inter partes reviews and oppositions and other challenges to the validity or enforceability of such relevant Patent. [***]. [***]. Aimmune shall keep Xencor informed of the status of Xencor Product Specific Patents, Aimmune Patents Covering an Antibody or Product, and Joint Collaboration Patents [***]. With respect to any material substantive submissions that Aimmune is required to or otherwise intends to submit to a patent office with respect to a [***], Aimmune shall provide a draft of such submission to Xencor at least [***] ([***]) days (or such time as is possible) prior to the deadline for, or the intended filing date of, such submission, whichever is earlier (or as soon as reasonably possible if Aimmune has less than [***] ([***]) days' notice of a deadline for submission). Xencor shall have the right to review and comment upon any such submission by Aimmune to a patent office, and will provide such comments within [***] ([***]) days after receiving such submission (provided, that if no comments are received within such [***] ([***]) day period, then Aimmune may proceed with such submission). Aimmune shall [***]any suggestions or recommendations of Xencor concerning the preparation, filing, prosecution and maintenance thereof. + +(b) The Parties shall cooperate reasonably in the prosecution of all Xencor Product Specific Patents, Aimmune Patents Covering an Antibody or Product and Joint Collaboration Patents and shall share all material information relating thereto promptly after receipt of such information. If, during the Term, Aimmune (i) intends to allow any Xencor Product Specific Patent, Aimmune Patent Covering an Antibody or Product or Joint 27 + +Source: AIMMUNE THERAPEUTICS, INC., 8-K, 2/5/2020 + + + + + +Collaboration Patent to expire or intends to otherwise abandon any such Xencor Product Specific Patent, Aimmune Patent Covering an Antibody or Product or Joint Collaboration Patent, or (ii) decides not to prepare or file patent applications Covering Aimmune Inventions or Joint Inventions, Aimmune shall notify Xencor of such intention or decision at least [***] ([***]) days (or as soon as possible if less than [***] ([***]) days) prior to any filing or payment due date, or any other date that requires action, in connection with such Xencor Product Specific Patent, Aimmune Patent Covering an Antibody or Product or Joint Collaboration Patent, and Xencor shall thereupon have the right, but not the obligation, to assume responsibility for the preparation, filing, prosecution or maintenance thereof [***], in the name of Xencor or Aimmune, as applicable. + +9.3.3 Cooperation. The Parties agree to cooperate in the preparation, filing, prosecution and maintenance of all Patents under this Section 9.3, including obtaining and executing necessary powers of attorney and assignments by the named inventors, providing relevant technical reports to the filing Party concerning the Invention disclosed in such Patent, obtaining execution of such other documents which are needed in the filing and prosecution of such Patent, and, as requested by a Party, updating each other regarding the status of such Patent, and shall cooperate with the other Party so far as reasonably necessary with respect to furnishing all information and data in its possession reasonably necessary to obtain or maintain such Patents. + +9.4 Infringement of Third Party Patents; Enforcement of Patents. + +9.4.1 Infringement of Third Party Patents. Each of the Parties shall promptly, but in any event no later than [***] ([***]) days after receipt of notice thereof, notify the other Party in writing in the event of any claims by a Third Party of alleged patent infringement by Aimmune or the other Aimmune Agreement Entities with respect to the research, development, manufacture, use, sale, offer for sale or importation of the Antibody or Product (each, an "Infringement Claim"). With respect to any Infringement Claim, the Parties shall attempt to negotiate in good faith a resolution with respect thereto. If the Parties cannot settle such Infringement Claim with the appropriate Third Parties within [***] ([***]) days after the receipt of the notice pursuant to this Section 9.4.1, then the following shall apply: + +(a) In the case of any such claim against Aimmune alone or against both Aimmune and Xencor, in each case, with respect to the Antibody or Product, then Aimmune shall be deemed to be the "Controlling Party" for purposes of such Infringement Claim. In the case of any claim against Xencor alone, then Xencor shall be deemed to be the "Controlling Party" for purposes of such Infringement Claim. + +(b) The Controlling Party shall assume control of the defense of such Infringement Claim. The non-Controlling Party, upon request of the Controlling Party, agrees to join in any such litigation, and in any event to reasonably cooperate with the Controlling Party, in each case, at the [***] expense. The non-Controlling Party will have the right to consult with the Controlling Party concerning such Infringement Claim and to participate in and be represented by independent counsel in any litigation in which such non-Controlling Party is a party at its own expense. The Controlling Party shall have the exclusive right to settle any 28 + +Source: AIMMUNE THERAPEUTICS, INC., 8-K, 2/5/2020 + + + + + +Infringement Claim without the consent of the other Party, unless such settlement would have a material adverse impact on the other Party (in which case the consent of such other Party shall be required). For purposes of this Section 9.4.1(b), any settlement that would involve the waiver of rights (including the rights to receive payments) of such other Party shall be deemed a material adverse impact and shall require the consent of such other Party, such consent not to be unreasonably withheld. + +9.4.2 Prosecution of Infringers. + +(a) Notice. If either Party (i) receives notice of any patent nullity actions, any declaratory judgment actions or any alleged or threatened infringement of patents or patent applications or misappropriation of intellectual property comprising the (w) Joint Inventions, (x) Xencor Patents, Xencor Inventions, or Xencor Know-How or (y) Aimmune Patents, Aimmune Inventions, Joint Collaboration Patents or Aimmune Know-How, or (ii) learns that a Third Party is infringing or allegedly infringing any Patent within the Xencor Patents, Joint Collaboration Patents or Aimmune Patents, or if any Third Party claims that any such Patent is invalid or unenforceable, it will promptly notify the other Party thereof, including providing evidence of infringement or the claim of invalidity or unenforceability reasonably available to such Party. Any matters relating to patent nullity actions, declaratory judgment actions or claims of Patent invalidity or unenforceability will be handled as provided in Section 9.3. + +(b) Enforcement of Patents. + +(i) As between the Parties, Aimmune will have the first right (but not the obligation) to take the appropriate steps to enforce any Patent within the Xencor Product Specific Patents, Aimmune Patents and Joint Collaboration Patents against infringement by a Third Party, that is, in each cause, conducting the manufacture, sale, use, offer for sale or import of any biopharmaceutical product. Aimmune may take any steps it reasonably believes appropriate to enforce such Patent, including the initiation, prosecution and control of any suit, proceeding or other legal action by counsel of its own choice and shall bear the costs of such enforcement, as applicable. Notwithstanding the foregoing, Xencor will have the right, at [***] expense, to be represented in any such action by counsel of its own choice. + +(ii) If, pursuant to Section 9.4.2(b)(i), Aimmune fails to institute such litigation or otherwise take steps to remedy the applicable infringement within [***] ([***]) days of the date one Party has provided notice to the other Party pursuant to Section 9.4.2(a) of such infringement, then Xencor will have the right (but not the obligation), at [***] expense, to bring any such suit, action or proceeding by counsel of its own choice and Aimmune will have the right, at [***] expense, to be represented in any such action by counsel of its own choice. + +(iii) As between the Parties, Xencor will have the sole right (but not the obligation) to take the appropriate steps to enforce any Patent within the Xencor General Patents against infringement by a Third Party, that is, in each cause, conducting the manufacture, sale, use, offer for sale or import of any biopharmaceutical product. Xencor may take steps including the initiation, prosecution and control of any suit, proceeding or other legal action by counsel of its own choice and shall bear the costs of such enforcement, as applicable. 29 + +Source: AIMMUNE THERAPEUTICS, INC., 8-K, 2/5/2020 + + + + + +(c) Cooperation; Damages. + +(i) If one Party brings any suit, action or proceeding under Section 9.4.2(b), the other Party agrees to be joined as party plaintiff if necessary to prosecute the suit, action or proceeding and to give the first Party reasonable authority to file and prosecute the suit, action or proceeding; provided, however, that neither Party will be required to transfer any right, title or interest in or to any property to the other Party or any other party to confer standing on a Party hereunder without the first Party's consent, not to be unreasonably withheld, conditioned or delayed. + +(ii) The Party not pursuing the suit, action or proceeding hereunder will provide reasonable assistance to the other Party, including by providing access to relevant documents and other evidence and making its employees available, subject to the other Party's reimbursement of any costs incurred by the non-enforcing or defending Party in providing such assistance. + +(iii) Aimmune shall not, without the prior written consent of Xencor ([***]), enter into [***] relating to any claim, suit or action that it brought under Section 9.4.2 involving a [***]. Xencor shall not, without the prior written consent of Aimmune ([***]), enter into any [***] relating to any claim, suit or action that it brought under Section 9.4.2 involving an [***]. + +(iv) Any settlements, damages or other monetary awards (a "Recovery") recovered pursuant to a suit, action or proceeding brought pursuant to Section 9.4.2(b) will be allocated first to the costs and expenses of the Party taking such action, and second, to the costs and expenses (if any) of the other Party, with any remaining amounts (if any) to be allocated as follows: (i) for a suit, action or proceeding controlled by Aimmune, Aimmune retains [***] percent ([***]%) and Xencor retains [***] percent ([***]%) of such Recovery, and (ii) for a suit, action or proceeding controlled by Xencor, be allocated between the Parties such that Xencor retains [***] percent ([***]%) and Aimmune retains [***] percent ([***]%) of such Recovery, provided that, notwithstanding the foregoing clauses (i) or (ii), the portion of any Recoveries from any such actions involving [***]. + +9.5 Patent Term Extensions. As between Xencor and Aimmune, Aimmune shall have the right, but not the obligation, to seek Patent Term Extensions (including any supplemental protection certificates and the like available under Applicable Law) in any country in relation to all [***]; provided that if, with respect to a given country, Aimmune [***] then Xencor [***]. Aimmune will reasonably consider seeking Patent Term Extensions for [***], and will not [***] for the purpose of [***] under this Agreement. Aimmune and Xencor shall cooperate in connection with all such activities. Each Party, its agents and attorneys will give due consideration to all suggestions and comments of the other Party regarding any such activities, but in the event of a disagreement between the Parties, Aimmune will have the final decision making authority as to [***]. 30 + +Source: AIMMUNE THERAPEUTICS, INC., 8-K, 2/5/2020 + + + + + +9.6 Patent Marking. Aimmune shall mark the Product marketed and sold by Aimmune (or the other Aimmune Agreement Entities) hereunder with appropriate patent numbers or indicia. + +9.7 Patent Challenge. Xencor will be permitted to terminate this Agreement upon written notice to Aimmune, effective [***] ([***]) days after receipt of written notice thereof by Aimmune, if Aimmune or any of the other Aimmune Agreement Entities, directly or indirectly, (i) [***], or (ii) [***]. + +ARTICLE 10 REPRESENTATIONS, WARRANTIES AND COVENANTS; COMPLIANCE + +10.1 Mutual Representations and Warranties. Each Party hereby represents and warrants to the other Party as follows, as of the Effective Date: + +10.1.1 Corporate Existence and Power. It is a company or corporation duly organized, validly existing, and in good standing under the laws of the jurisdiction in which it is incorporated, and has full corporate power and authority and the legal right to own and operate its property and assets and to carry on its business as it is now being conducted and as contemplated in this Agreement, including the right to grant the licenses granted by it hereunder. + +10.1.2 Authority and Binding Agreement. (i) It has the corporate power and authority and the legal right to enter into this Agreement and perform its obligations hereunder, (ii) it has taken all necessary corporate action on its part required to authorize the execution and delivery of this Agreement and the performance of its obligations hereunder, and (iii) this Agreement has been duly executed and delivered on behalf of such Party, and constitutes a legal, valid, and binding obligation of such Party that is enforceable against it in accordance with its terms, except as enforcement may be affected by bankruptcy, insolvency or other similar laws and by general principles of equity. + +10.1.3 No Conflicts. The execution, delivery and performance of this Agreement by it does not (i) conflict with any agreement, instrument or understanding, oral or written, to which it is a party and by which it may be bound or (ii) violate any Applicable Law. + +10.1.4 All Consents and Approvals Obtained. Except with respect to Regulatory Approvals for the Development, Manufacturing or Commercialization of the Product or as otherwise described in this Agreement, (i) all necessary consents, approvals and authorizations of, and (ii) all notices to, and filings by such Party with, all Governmental Authorities and other Persons required to be obtained or provided by such Party as of the Effective Date in connection with the execution, delivery and performance of this Agreement have been obtained and provided, except for those approvals, if any, not required at the time of execution of this Agreement. 31 + +Source: AIMMUNE THERAPEUTICS, INC., 8-K, 2/5/2020 + + + + + +10.2 Additional Representations, Warranties and Covenants of Xencor. Xencor hereby represents, warrants and covenants to Aimmune that, as of the Effective Date: + +10.2.1 Xencor has not filed any Marketing Authorization Applications with a Governmental Authority for the sale of the Product. + +10.2.2 Xencor is the sole owner or licensee of the Xencor Patents existing as of the Effective Date. + +10.2.3 There is no Know-How that is owned by or licensed to Xencor that is necessary in connection with the Development, Manufacture, Commercialization or other use of the Antibody or Product that is not in the Control of Xencor as the Antibody and Product exist, and as being Developed and Manufactured, as of the Effective Date. + +10.2.4 Schedule 1.79 and Schedule 1.81, when taken together, set forth a true, complete and correct list of all Patents Controlled by Xencor or its Affiliates as of the Effective Date that relate to the Antibody or Product and are necessary for Developing, Manufacturing or Commercializing the Antibody or Product. + +10.2.5 To Xencor's knowledge, Xencor has complied with all Applicable Laws in all material respects, including any disclosure requirements, in connection with the filing, prosecution and maintenance of the Xencor Patents owned by Xencor. + +10.2.6 Other than as set forth in Schedule 10.2.6, [***] the issued Patents within the Xencor Patents are neither invalid nor unenforceable. + +10.2.7 No claim or demand of any Person has been asserted in writing to Xencor or its Affiliates, or to Xencor's knowledge, its licensees or sublicensees that challenges the rights of Xencor, its Affiliates, licensees or sublicensees to make, use, sell, exploit or license the Antibody or Product or to practice the Xencor Technology. + +10.2.8 Neither Xencor nor, to the knowledge of Xencor, its Affiliates, licensees, sublicensees or subcontractors have received written notice of any proceedings pending before or threatened by any Regulatory Authority with respect to the Antibody or Product. + +10.2.9 The Upstream Agreement is in full force and effect and, to its knowledge, no facts or circumstances exist that would give either party to the Upstream Agreement the right to terminate for the other party's material breach thereof. + +10.2.10 Xencor has not used in any capacity, in connection with its Development or Manufacture of the Product prior to the Effective Date any Person who has been debarred pursuant to Section 306 of the FD&C Act (or similar Applicable Law outside of the U.S.), or who is the subject of a conviction described in such section. 32 + +Source: AIMMUNE THERAPEUTICS, INC., 8-K, 2/5/2020 + + + + + +10.2.11 Neither Xencor nor its Affiliates or, to the knowledge of Xencor, its licensees, sublicensees or subcontractors have made any material misstatements in any regulatory filing with any Regulatory Authority with respect to the Antibody or Product. + +10.2.12 Neither Xencor nor, to the knowledge of Xencor, its Affiliates, licensees, sublicensees or independent contractors have received any notices or claims of noncompliance with Applicable Law relating to activities conducted by or facilities used by, Xencor, its Affiliates, licensees, sublicensees or independent contractors in connection with the Development or Manufacture of Antibody or Product, and Xencor is not aware of any reasonable basis for any such notices or claims. + +10.2.13 [***] as of the Effective Date, neither the Development, Manufacture nor Commercialization of Antibody in the Licensed Field as the Antibody exists as of the Effective Date will infringe or misappropriate any intellectual property rights of any Third Party. + +10.2.14 To Xencor's knowledge, Xencor has disclosed to Aimmune all material information in its possession or Control relating to the Antibody and Product, and all such information is accurate in all material respects. + +10.2.15 Neither Xencor nor its Affiliates have developed or commercialized, and are not developing or commercializing, either directly or through enabling any Third Party (by license, sublicense or other grant of rights or performance of actions), any antibody [***], other than the Antibody. + +10.2.16 The following variations of the Antibody are not required to Develop, Manufacture and Commercialize the Product in the Licensed Field: (i) [***], (ii) [***], (iii) [***], (iv) [***], (v) [***], or (vi) [***]. + +10.3 Additional Representations, Warranties and Covenants of Aimmune. Aimmune hereby represents, warrants and covenants to Xencor that, as of the Effective Date: + +10.3.1 [***] + +10.3.2 Aimmune and its Affiliates (a) have not developed or commercialized, and (b) are not developing or commercializing, either directly or through enabling any Third Party, any antibody [***] other than the Antibody and Product pursuant to this Agreement. + +10.3.3 As of the Effective Date, Aimmune has conducted due diligence in connection with the Development and Manufacture of the Product in the Licensed Field. + +10.4 Disclaimer. Aimmune understands that the Product is the subject of ongoing clinical research and development and that Xencor cannot ensure the safety or usefulness of the Product or that the Product will receive Regulatory Approvals. 33 + +Source: AIMMUNE THERAPEUTICS, INC., 8-K, 2/5/2020 + + + + + +10.5 No Other Representations or Warranties. EXCEPT AS EXPRESSLY STATED IN THIS AGREEMENT, NO REPRESENTATIONS OR WARRANTIES WHATSOEVER, WHETHER EXPRESS OR IMPLIED, INCLUDING WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT, OR NON-MISAPPROPRIATION OF THIRD PARTY INTELLECTUAL PROPERTY RIGHTS, ARE MADE OR GIVEN BY OR ON BEHALF OF A PARTY. EXCEPT AS EXPRESSLY STATED IN THIS AGREEMENT, ALL REPRESENTATIONS AND WARRANTIES, WHETHER ARISING BY OPERATION OF LAW OR OTHERWISE, ARE HEREBY EXPRESSLY EXCLUDED. + +10.6 Compliance. + +10.6.1 Compliance with Anti-Corruption Laws. In connection with this Agreement, each Party represents, warrants and covenants to the other Party that it has complied and will comply with all Applicable Laws (including Anti-Corruption Laws) and industry codes dealing with government procurement, conflicts of interest, corruption or bribery, including, if applicable, the U.S. Foreign Corrupt Practices Act of 1977, as amended, and any laws enacted to implement the Organization of Economic Cooperation and Development Convention on Combating Bribery of Foreign Officials in International Business Transactions. + +10.6.2 Prohibited Conduct. In connection with this Agreement, each Party represents, warrants and covenants to the other Party that it has not made, offered, given, promised to give, or authorized, and will not make, offer, give, promise to give, or authorize, any bribe, kickback, payment or transfer of anything of value, directly or indirectly, to any person or to any Government Official for the purpose of: (i) improperly influencing any act or decision of the person or Government Official; (ii) inducing the person or Government Official to do or omit to do an act in violation of a lawful or otherwise required duty; (iii) securing any improper advantage; or (iv) inducing the person or Government Official to improperly influence the act or decision of any organization, including any government or government instrumentality, in order to assist such Party in obtaining or retaining business. + +ARTICLE 11 INDEMNIFICATION + +11.1 Indemnification by Xencor. Xencor hereby agrees to save, indemnify, defend and hold Aimmune, its Affiliates, and their respective directors, officers, agents and employees harmless from and against any and all losses, damages, liabilities, costs and expenses (including reasonable attorneys' fees and expenses) (collectively, "Losses") arising in connection with any and all charges, complaints, actions, suits, proceedings, hearings, investigations, claims, demands, judgments, orders, decrees, stipulations or injunctions by a Third Party (each a "Claim") resulting or otherwise arising from (i) any breach by Xencor of any of its representations, warranties, covenants or obligations pursuant to this Agreement, (ii) the Development, Manufacturing, Commercialization (if applicable, after the Term) or the performance of a Clinical Trial for the Antibody or Product conducted by or on behalf of Xencor (or its Affiliates, licensees (other than Aimmune and its Affiliates and Sublicensees), sublicensees, or independent contractors), prior to the Effective Date or after the Term, provided that this Section (ii) is not intended to extend to strict liability Claims relating to the Product, (iii) [***], and (iv) the negligence or willful misconduct by Xencor or its Affiliates, licensees, sublicensees or subcontractors or their respective officers, directors, employees, agents or consultants in performing any obligations under this Agreement, in each case except to the extent that such Losses are subject to indemnification by Aimmune pursuant to Section 11.2. 34 + +Source: AIMMUNE THERAPEUTICS, INC., 8-K, 2/5/2020 + + + + + +11.2 Indemnification by Aimmune. Aimmune hereby agrees to save, indemnify, defend and hold Xencor, its Affiliates, and their respective directors, agents and employees harmless from and against any and all Losses arising in connection with any and all Claims resulting or otherwise arising from (i) any breach by Aimmune of any of its representations, warranties, covenants or obligations pursuant to this Agreement, (ii) [***], (iii) the negligence or willful misconduct by Aimmune (or its Affiliates, Sublicensees, subcontractors, wholesalers or distributors) or their respective officers, directors, employees, agents or consultants in performing any obligations under this Agreement, or (iv) the Development, Manufacturing, Packaging and Labeling or Commercialization of the Antibody or a Product hereunder during or after the Term (including, for clarity, any product liability Losses resulting therefrom) by Aimmune (or its Affiliates, Sublicensees, subcontractors, wholesalers or distributors) or their respective officers, directors, employees, agents or consultants, in each case except to the extent that such Losses are subject to indemnification by Xencor pursuant to Section 11.1. + +11.3 Indemnification Procedures. + +11.3.1 A Party believing that it is entitled to indemnification under, as applicable, Section 11.1 or Section 11.2 (an "Indemnified Party") shall give prompt written notification to the other Party (the "Indemnifying Party") of the commencement of any Claim for which indemnification may be sought or, if earlier, upon the assertion of any such Claim by a Third Party (it being understood and agreed, however, that the failure by an Indemnified Party to give notice of a Claim as provided in this Section 11.3.1 shall not relieve the Indemnifying Party of its indemnification obligation under this Agreement except and only to the extent that such Indemnifying Party is actually materially prejudiced as a result of such failure to give notice). Within [***] ([***]) days after delivery of such notification, the Indemnifying Party may, upon written notice thereof to the Indemnified Party, assume control of the defense of such Claim with counsel reasonably satisfactory to the Indemnified Party. If a Party believes that a Claim presented to it for indemnification is one as to which the Party seeking indemnification is not entitled to indemnification under, as applicable, Section 11.1 or Section 11.2, it shall so notify the Party seeking indemnification. + +11.3.2 If the Indemnifying Party elects to assume the defense of such Claim, the Indemnified Party may participate in such defense at its own expense; provided, that if the Indemnified Party reasonably concludes, based on advice from counsel, that the Indemnifying Party and the Indemnified Party have conflicting interests with respect to such Claim, the Indemnifying Party shall be responsible for the reasonable fees and expenses of counsel to the Indemnified Party solely in connection therewith. + +11.3.3 The Indemnifying Party shall keep the Indemnified Party advised of the status of such Claim and the defense thereof and shall consider recommendations made by the Indemnified Party with respect thereto. 35 + +Source: AIMMUNE THERAPEUTICS, INC., 8-K, 2/5/2020 + + + + + +11.3.4 The Indemnified Party shall not agree to any settlement of such Claim without the prior written consent of the Indemnifying Party, which shall not be unreasonably withheld. The Indemnifying Party shall not agree to any settlement of such Claim or consent to any judgment in respect thereof that does not include a complete and unconditional release of the Indemnified Party from all liability with respect thereto or that imposes any liability or obligation on the Indemnified Party or adversely affects the Indemnified Party without the prior written consent of the Indemnified Party, which shall not be unreasonably withheld. + +11.4 Limitation of Liability. NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR ANY LOST PROFITS, OR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL, OR INDIRECT DAMAGES ARISING FROM OR RELATING TO ANY BREACH OF THIS AGREEMENT, REGARDLESS OF ANY NOTICE OF THE POSSIBILITY OF SUCH DAMAGES. NOTWITHSTANDING THE FOREGOING, NOTHING IN THIS SECTION 11.4 IS INTENDED TO OR SHALL LIMIT OR RESTRICT THE INDEMNIFICATION RIGHTS OR OBLIGATIONS OF ANY PARTY UNDER SECTION 11.1 or 11.2, OR DAMAGES AVAILABLE FOR A PARTY'S BREACH OF CONFIDENTIALITY OBLIGATIONS UNDER ARTICLE 12. + +11.5 Insurance. Aimmune shall procure and maintain insurance, including clinical trials insurance and product liability insurance, adequate to cover its obligations hereunder and which is consistent with normal business practices of prudent companies similarly situated at all times during which the Product is being clinically tested in human subjects or commercially distributed or sold by Aimmune pursuant to this Agreement; provided, that any such clinical trials insurance coverage shall, prior to the First Commercial Sale of a Product, in no event be less than [***] Dollars ($[***]) per loss occurrence, and product liability insurance coverage shall, after such First Commercial Sale, in no event be less than [***] Dollars ($[***]) per loss occurrence. It is understood that such insurance shall not be construed to create a limit of Aimmune's liability with respect to its indemnification obligations under this ARTICLE 11. Aimmune shall provide Xencor with written evidence of such insurance prior to commencement of this Agreement and upon expiration of any one coverage. Aimmune shall provide Xencor with written notice at least [***] ([***]) days prior to the cancellation, nonrenewal or material change in such insurance or self-insurance which materially adversely affects the rights of Xencor hereunder. + +ARTICLE 12 CONFIDENTIALITY + +12.1 Confidential Information. + +12.1.1 The Parties agree that during the Term, and for a period of [***] ([***]) years thereafter, a Party receiving Confidential Information of the other Party will (X) maintain in confidence such Confidential Information to the same extent such Party maintains its own proprietary information of similar kind and value, and, in any event, no less than a reasonable standard of care, (Y) not disclose such Confidential Information to any Third Party without the prior written consent of the other Party, except as otherwise expressly permitted below, and (Z) not use such Confidential Information for any purpose except those permitted by this Agreement. 36 + +Source: AIMMUNE THERAPEUTICS, INC., 8-K, 2/5/2020 + + + + + +As used herein, "Confidential Information" means all Know-How and other information and materials received by either Party from the other Party or its Affiliates pursuant to this Agreement. The foregoing obligations and the other obligations set forth in this Section 12.1 shall not apply with respect to any portion of such Confidential Information which: + +(a) is publicly disclosed by the disclosing Party, either before or after it becomes known to the receiving Party; + +(b) was known to the receiving Party or any or its Affiliates, without any obligation to keep it confidential, prior to when it was received from the disclosing Party; + +(c) is subsequently disclosed to the receiving Party or any of its Affiliates by a Third Party that is lawfully in possession thereof without obligation to keep it confidential; + +(d) has been published by a Third Party or otherwise enters the public domain through no fault of the receiving Party or any of its Affiliates in breach of this Agreement; or + +(e) has been independently developed or acquired by the receiving Party or any of its Affiliates without the aid, application or use of the disclosing Party's Confidential Information. + +12.1.2 The receiving Party shall have the right to disclose any Confidential Information provided by the other Party hereunder if, in the reasonable opinion of the receiving Party's legal counsel, such disclosure is necessary to comply with the terms and conditions of this Agreement, or the requirements of any law or rule imposed by the U.S. Securities and Exchange Commission or any securities exchange or other Applicable Law, but only to the extent of such necessity or requirements; and no such disclosure shall cause any such information to cease to be Confidential Information hereunder, except to the extent such disclosure results in a public disclosure of such information. Where reasonably possible, the receiving Party shall notify the disclosing Party of the receiving Party's intent to make such disclosure of Confidential Information pursuant to the preceding sentence sufficiently prior to making such disclosure so as to allow the disclosing Party adequate time to take whatever action the disclosing Party may deem to be appropriate to protect the confidentiality of the Confidential Information. + +12.1.3 Except as set forth above, each Party agrees that it shall provide or permit access to Confidential Information of the other Party only to (i) the receiving Party's attorneys, independent accountants and financial advisors for the sole purpose of enabling such attorneys, independent accountants and financial advisors to provide advice to the receiving Party and (ii) the receiving Party's Affiliates, directors, officers, employees, consultants, advisors, actual or potential acquirers and permitted subcontractors, sublicensees and subdistributors, and to the directors, officers, employees, consultants, advisors and permitted subcontractors, actual or potential acquirers, sublicensees and subdistributors of such Affiliates, who have a need to know such Confidential Information to assist the receiving Party with the 37 + +Source: AIMMUNE THERAPEUTICS, INC., 8-K, 2/5/2020 + + + + + +activities contemplated or required of it by this Agreement; provided that in each case the Person to whom Confidential Information is being disclosed is subject to obligations of confidentiality and non-use with respect to such Confidential Information substantially similar to the obligations of confidentiality and nonuse of the receiving Party pursuant to this Section 12.1; and provided further, that each Party shall remain responsible for any failure by its attorneys, independent accountants and financial advisors, Affiliates, and its and its Affiliates' respective directors, officers, employees, consultants, advisors, actual or potential acquirers and permitted subcontractors, sublicensees and subdistributors, to treat such Confidential Information as required under this Section 12.1. + +For clarity, either Party may disclose without any limitation such Party's U.S. federal income tax treatment and the U.S. federal income tax structure of the transactions relating to such Party that are based on or derived from this Agreement, as well as all materials of any kind (including opinions, other tax analyses, or a complete copy of this Agreement and any amendments thereto) relating to such tax treatment or tax structure, except to the extent that nondisclosure of such matters is reasonably necessary in order to comply with applicable securities laws. + +12.1.4 Each Party acknowledges that a Party in breach of any of its obligations under this Section 12.1 shall cause the non-breaching Party irreparable harm, for which monetary damages will be an inadequate remedy. Therefore, notwithstanding anything to the contrary in this Agreement in the event of any such breach, the non-breaching Party shall be entitled, in addition to any other remedy available to it under this Agreement, at law or in equity, to injunctive relief, including an accounting for profits, specific performance of the terms hereof and other equitable relief for such breach, without the posting of bond or other security. + +12.2 Publicity. Promptly after the Effective Date, the Parties shall each issue the applicable press release in the form attached hereto as Schedule 12.2, with respect to this Agreement. Subject to the foregoing, any press releases or other public statements or disclosures regarding the subject matter of this Agreement shall be subject to the express prior written consent of each of the Parties; provided that a disclosure shall be permitted without the other Party's consent to the extent that it does not contain information beyond that included in a prior disclosure approved in writing by both Parties. Notwithstanding the foregoing any disclosure which is required by Applicable Law or the rules of the U.S. Securities and Exchange Commission or any securities exchange, as reasonably advised by the disclosing Party's counsel, may be made without the prior consent of the other Party, although, prior to any such legally required disclosure by a Party, such Party shall use reasonable efforts where practicable to give the other Party reasonable notice and an opportunity to comment on the proposed disclosure. + +12.3 Securities Filings. In the event either Party proposes to file with the U.S. Securities and Exchange Commission or the securities regulators of any state or other jurisdiction under the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, or any other applicable securities law a registration statement or any other disclosure document which describes or refers to this Agreement, such Party shall notify the other Party of such intention and shall provide such other Party with a copy of relevant portions of the proposed filing not less than [***] ([***]) Business Days prior to such filing (or such shorter period of time as may be required in the circumstances, and any revisions to such 38 + +Source: AIMMUNE THERAPEUTICS, INC., 8-K, 2/5/2020 + + + + + +portions of the proposed filing a reasonable time prior to the filing thereof), and shall use reasonable efforts where practicable to consider such comments to the extent consistent with such Party's disclosure obligations under applicable securities laws or rules of a securities exchange. + +12.4 Publications. Except for disclosures permitted under this Agreement, if Xencor, its Affiliates, or its employee(s) or consultant(s) wishes to make a publication or presentation specific to the Product or which otherwise may reasonably contain Know-How, or other intellectual property, of Aimmune, Xencor must receive written approval, not to be unreasonably withheld, conditioned or delayed, from Aimmune at least [***] ([***]) days prior to submission for publication or presentation. If Aimmune, its Affiliates, or its employee(s) or consultant(s) wishes to make a publication specific to the Product or which otherwise may reasonably contain Xencor Technology, Aimmune shall deliver to Xencor a copy of the proposed written publication or an outline of an oral disclosure at least [***] ([***]) days prior to submission for publication or presentation and reasonably consider any comments of Xencor thereon; provided that subject to Sections 12.1 through 12.3, to the extent such publication describes or is specific to Xencor Technology, Aimmune must receive written approval, not to be unreasonably withheld, conditioned or delayed, from Xencor prior to submitting such publication to any Third Party. + +12.5 Use of Names. Except as otherwise set forth in this Agreement, neither Party shall use the name of the other Party in relation to this transaction in any public announcement, press release or other public document without the written consent of such other Party, which consent shall not be unreasonably withheld; provided, however, that subject to Section 12.3, either Party may use the name of the other Party in any document filed with any Regulatory Authority or Governmental Authority, including the Securities and Exchange Commission or the rules of any securities exchange. + +12.6 Unauthorized Disclosure of Confidential Information. Each Party shall have a response plan in place for any disclosure of Confidential Information that is not authorized or otherwise permitted under this Agreement. Such plan shall include considerations of, among other things, notification, remediation and retrieval. In the event that a Party becomes aware of an unauthorized disclosure of Confidential Information, then such Party shall notify the other Party promptly in writing. + +12.7 Prior CDA. As of the Effective Date, the terms of this ARTICLE 12 shall supersede any prior non-disclosure, secrecy or confidentiality agreement between the Parties (or their Affiliates) dealing with the subject of this Agreement, including the Confidentiality Agreement between the Parties dated [***]. Any information disclosed pursuant to any such prior agreement shall be deemed Confidential Information of the applicable Party for purposes of this Agreement, to the extent that such information was deemed to be "Proprietary Information" under such prior agreement. 39 + +Source: AIMMUNE THERAPEUTICS, INC., 8-K, 2/5/2020 + + + + + +ARTICLE 13 TERM AND TERMINATION + +13.1 Term. This Agreement shall become effective on the Effective Date and, unless earlier terminated pursuant to this ARTICLE 13, shall remain in effect on a Product-by-Product and country-by-country basis until the expiration of the Royalty Term applicable to such Product and country (the "Term"). Upon expiration of this Agreement with respect to a Product in a country, the licenses granted to Aimmune pursuant to this Agreement shall continue in full force and effect on a fully-paid basis. + +13.2 Termination for Breach. Either Party may, without prejudice to any other remedies available to it at law or in equity, terminate this Agreement upon written notice to the other Party in the event that the other Party (the "Breaching Party") shall have materially breached or defaulted in the performance of any of its obligations. The Breaching Party shall have sixty (60) days (thirty (30) days in the event of non-payment) after written notice thereof was provided to the Breaching Party by the non-breaching Party to remedy such default. Unless the Breaching Party has cured any such breach or default prior to the expiration of such sixty (60) day period (thirty (30) day period for non-payment), such termination shall become effective upon receipt of the written notice of termination by the Breaching Party to be given within ten (10) days of the end of such sixty (60) day period (thirty (30) day period for non-payment). Notwithstanding the foregoing, in the event that Aimmune as the Breaching Party has materially breached or defaulted in the performance of any of its payment obligations under this Agreement a third time or more in any three (3) year period, then Xencor shall have the right to terminate this Agreement immediately by providing written notice Aimmune, without Aimmune having opportunity to cure such breach or default. + +13.3 Termination as a Result of Bankruptcy. Each Party shall have the right to terminate this Agreement upon written notice as a result of the filing or institution of bankruptcy, reorganization, liquidation or receivership proceedings, or upon an assignment of a substantial portion of the assets for the benefit of creditors by the other Party; provided that such termination shall be effective only if such proceeding is not dismissed within ninety (90) days after the filing thereof. + +13.4 Termination by Aimmune. Aimmune may terminate this Agreement in its entirety at any time for its convenience upon sixty (60) days' prior written notice to Xencor. + +13.5 Termination by Xencor. Without limitation of its rights under this ARTICLE 13, Xencor may also terminate this Agreement in its entirety as applicable, pursuant to the provisions of Section 9.7. + +ARTICLE 14 EFFECTS OF EXPIRATION OR TERMINATION + +14.1 Licenses. Upon the termination of this Agreement: + +14.1.1 all rights and licenses granted to Aimmune hereunder shall immediately terminate and be of no further force and effect and Aimmune shall cease Developing, Commercializing, Manufacturing and Packaging and Labeling such Product in and for all applicable countries; provided, that Aimmune and its Affiliates will be entitled, during the period 40 + +Source: AIMMUNE THERAPEUTICS, INC., 8-K, 2/5/2020 + + + + + +ending on the last day of the [***] following the effective date of such termination, to sell any inventory of Product affected by such termination that remains on hand as of the effective date of the termination, so long as Aimmune pays to Xencor all amounts payable hereunder (including milestones) applicable to said subsequent sales, as applicable, in accordance with the terms and conditions set forth in this Agreement and otherwise complies with the terms set forth in this Agreement. + +14.1.2 Aimmune hereby grants to Xencor an exclusive license under and with respect to Aimmune Patents, and a non-exclusive license under and with respect to Aimmune Know-How, in each case, where such license is an irrevocable, perpetual, royalty-bearing license, with the right to sublicense, to Develop, Manufacture and Commercialize the Product(s), as the Product(s) exist as of the effective date of such termination, or optimized versions thereof that are Products. For clarity, upon the termination of this Agreement, as consideration for such licenses granted under this Section 14.1.2, Xencor shall [***], and Xencor shall be responsible for [***]; provided further that Xencor shall have the right to terminate such license and forgo paying such royalties at its sole discretion upon written notice to Aimmune. + +14.2 Assignments. Upon the termination of this Agreement, Aimmune will promptly, in each case within [***] ([***]) days thereafter: + +(a) assign to Xencor, [***], all of Aimmune's right, title and interest in and to any agreements (or portions thereof) between Aimmune and Third Parties that relate to the Development, Commercialization or Manufacture of the Product, where such assignment is permitted without charge to Aimmune or its Affiliates and where Xencor shall assume all future payments due under any agreement assigned pursuant to this subsection; + +(b) assign to Xencor, [***], and subject to the execution of a standard trademark license between the Parties prior to such assignment, all of Aimmune's right, title and interest in and to any (i) Promotional Materials, (ii) copyrights and trademarks (including the Product Trademarks and Product Trade Dress), including any goodwill associated therewith, and any registrations and design patents for the foregoing, and (iii) any internet domain name registrations for such trademarks and slogans, all to the extent solely related to the Product; provided, however, in the event Xencor exercises such right to have assigned such Promotional Materials, Aimmune shall grant, and hereby does grant, a royalty-free right and license to any housemarks, trademarks, names and logos of Aimmune contained therein for a period of [***] ([***]) months in order to use such Promotional Materials solely in connection with the Commercialization of the Product; + +(c) assign to Xencor, [***], the management and continued performance of any Clinical Trials for the Product ongoing hereunder as of the effective date of such termination in respect of which Xencor shall assume full financial responsibility from and after the effective date of such termination; + +(d) transfer to Xencor all of Aimmune's right, title and interest in and to any and all regulatory filings, Regulatory Approvals and other Regulatory Materials for the Product; 41 + +Source: AIMMUNE THERAPEUTICS, INC., 8-K, 2/5/2020 + + + + + +(e) transfer to Xencor all of Aimmune's right, title and interest in and to any and all Development-related data and Commercialization Data Controlled by Aimmune for the Product; and + +(f) provide a copy of (i) the material tangible embodiments of the foregoing and (ii) any other material books, records, files and documents Controlled by Aimmune solely to the extent related to the Product and which may be redacted to exclude Confidential Information of Aimmune; + +provided, however, that to the extent that any agreement or other asset described in this Section 14.2 is not assignable by Aimmune (whether because such agreement or asset is explicitly non-assignable or because the Third Party consent required for such assignment is not obtained), then such agreement or other asset will not be assigned, and upon the request of Xencor, Aimmune will take such steps as may be reasonably necessary to allow Xencor to obtain and to enjoy the benefits of such agreement or other asset. For purposes of clarity, (1) [***] and (2) to the extent Xencor requests [***]. + +14.3 Disclosure and Delivery. Upon the termination of this Agreement, Aimmune will promptly transfer to Xencor copies of any physical embodiment of any Aimmune Know-How, to the extent then used in connection with the Development or Commercialization of the Product; such transfer shall be effected by the delivery of material documents, to the extent such Aimmune Know-How is embodied in such documents, and to the extent that Aimmune Know-How is not fully embodied in such documents, Aimmune shall make its employees and agents who have knowledge of such Aimmune Know-How in addition to that embodied in documents available to Xencor for interviews, demonstrations and training to effect such transfer in a manner sufficient to enable Xencor to practice such Aimmune Know-How but only in a manner as set out as follows in this Section 14.3. The Aimmune Know- How shall be transferred pursuant to the procedure to transfer Xencor Know-How, Regulatory Materials, and Regulatory Data in Section 2.7 applied mutatis mutandis. + +14.4 Disposition of Commercialization Related Materials. Upon the termination of this Agreement, Aimmune will promptly deliver to Xencor in electronic, sortable form (a) a list identifying all wholesalers and other distributors involved in the Commercialization of the Product, will reasonably consider providing customer lists (e.g., purchasers), where permitted under Applicable Law and under applicable agreements with Third Parties, at Xencor's expense, related to the Commercialization of the Product, and (b) all Promotional Materials as well as any items bearing the Product Trademark or Product Trade Dress and/or any trademarks or housemarks otherwise associated with the Product or Xencor. + +14.5 Accrued Rights. Expiration or termination this Agreement for any reason will be without prejudice to any rights that will have accrued to the benefit of a Party prior to the effective date of such expiration or termination. Such expiration or termination will not relieve a Party from obligations that are expressly indicated to survive the expiration or termination of this Agreement. 42 + +Source: AIMMUNE THERAPEUTICS, INC., 8-K, 2/5/2020 + + + + + +14.6 Survival. Notwithstanding anything to the contrary contained herein, the following provisions shall survive any expiration or termination of this Agreement: Articles: ARTICLE 1 (to the extent necessary to give effect to the other surviving provisions), ARTICLE 4 (solely with respect to remaining inventory of Product that Aimmune continues to sell after the effective date of termination), ARTICLE 7 (with respect to amounts accruing prior to expiration or termination of this Agreement), ARTICLE 11, ARTICLE 12 (for the period specified in Section 12.1.1), ARTICLE 14, ARTICLE 15 and ARTICLE 8 (with respect to amounts accruing prior to expiration or termination of this Agreement) and Sections: 2.2.1, 2.3 (with respect to the applicable Party being responsible for its Affiliates or Sublicensee, and the waiver), 2.4, 9.1, 10.2 (for [***] after the effective date of termination or expiration), 10.3 (for [***] after the effective date of termination or expiration), 10.4, and 10.5. Except as set forth in this ARTICLE 14 or otherwise expressly set forth herein, upon expiration or termination of this Agreement all other rights and obligations of the Parties shall cease. + +14.7 Rights in Bankruptcy. All rights and licenses granted under or pursuant to this Agreement by Xencor and Aimmune are, and shall otherwise be deemed to be, for purposes of Section 365(n) of the U.S. Bankruptcy Code, licenses of right to "intellectual property" as defined under Section 101 of the U.S. Bankruptcy Code. The Parties agree that each Party, as licensee of certain rights under this Agreement, shall retain and may fully exercise all of its rights and elections under the U.S. Bankruptcy Code. The Parties further agree that, in the event of the commencement of a bankruptcy proceeding by or against a Party (such Party, the "Bankrupt Party") under the U.S. Bankruptcy Code, (a) the other Party shall be entitled to a complete duplicate of (or complete access to, as appropriate) any intellectual property licensed to such other Party and all embodiments of such intellectual property, which, if not already in such other Party's possession, shall be promptly delivered to it (x) upon any such commencement of a bankruptcy proceeding upon such other Party's written request therefore, unless the Bankrupt Party elects to continue to perform all of its obligations under this Agreement or (y) if not delivered under clause (x), following the rejection of this Agreement by the Bankrupt Party upon written request therefore by the other Party and (b) the Bankrupt Party shall not unreasonably interfere with the other Party's rights to intellectual property and all embodiments of intellectual property, and shall assist and not unreasonably interfere with the other Party in obtaining intellectual property and all embodiments of intellectual property from another entity. The "embodiments" of intellectual property includes all tangible, intangible, electronic or other embodiments of rights and licenses hereunder, including all compounds and products embodying intellectual property, Products, filings with Regulatory Authorities and related rights and Xencor Know-How in the case that Xencor is the Bankrupt Party and Aimmune Know-How in the case Aimmune is the Bankrupt Party. + +ARTICLE 15 MISCELLANEOUS + +15.1 Disputes. The Parties recognize that, from time to time, disputes, controversies or claim may arise which stem from or are related to a Party's respective rights or obligations under this Agreement or a Party's actual or alleged breach of this Agreement (a "Dispute"). It is the desire of the Parties to establish procedures to facilitate the resolution of Disputes arising under this Agreement in an expedient manner by mutual cooperation and without resort to 43 + +Source: AIMMUNE THERAPEUTICS, INC., 8-K, 2/5/2020 + + + + + +arbitration or litigation. To accomplish this objective, the Parties agree to follow the procedures set forth in this Section 15.1 if and when a Dispute arises under this Agreement. If the Parties are unable to resolve any Dispute within [***] ([***]) days after such Dispute is submitted to it, either Party may, by written notice to the other Party, have such Dispute referred to Designated Officers of each Party for attempted resolution. In the event the Designated Officers or their delegates are not able to resolve such Dispute within such [***] ([***]) day period after receipt of written notice, then each Party is free to pursue any remedy at law or in equity available to such Party consistent with Section 15.13. + +15.2 Entire Agreement; Amendment. This Agreement, together with the Schedules and Exhibits hereto, contains the entire understanding of the Parties with respect to the subject matter hereof. Any other express or implied agreements and understandings, negotiations, writings and commitments, either oral or written, in respect to the subject matter hereof are superseded by the terms of this Agreement. The Schedules and Exhibits to this Agreement are incorporated herein by reference and shall be deemed a part of this Agreement. This Agreement may be amended, or any term hereof modified, only by a written instrument duly executed by authorized representatives of each of the Parties. + +15.3 Force Majeure. No Party shall be liable for any failure to perform, or be considered in breach of, its obligations under this Agreement (other than obligations to make payments of money) to the extent such performance has been delayed, interfered with or prevented by an event of Force Majeure, and the obligations of such Party under this Agreement (other than obligations to make payments of money) whose performance is affected by Force Majeure shall be suspended during, but not longer than, the continuance of the event of Force Majeure. Any Party that experiences an event of Force Majeure shall provide prompt notice of such event to the other Party, including and an estimate of the likely period of time during which its performance will be affected, and shall use reasonable efforts to remove the condition constituting Force Majeure. In the event of a prolonged condition of Force Majeure that makes it unreasonable to continue to perform other activities then being performed by the Parties and their Affiliates pursuant to this Agreement, the Parties shall consult directly as to whether they should appropriately scale back their respective activities in order to avoid waste or inappropriate usage of resources under the circumstances. + +15.4 Notices. Any notice required or permitted to be given under this Agreement shall be in writing, shall specifically refer to this Agreement and shall be deemed to have been sufficiently given for all purposes if; mailed by first class certified or registered mail, postage prepaid (which notice shall be effective [***] ([***]) Business Days [***]); express delivery service (which notice shall be effective on the first Business Day after delivery to such service); or personally delivered to the appropriate addresses (which notice shall be effective upon delivery to such addresses) set forth below or to such other addresses or numbers for a Party as such Party may inform the other Party by giving [***] ([***]) Business Days' prior written notice: If to Xencor: Xencor, Inc. 111 West Lemon Avenue Monrovia, CA 91016 Attention: General Counsel 44 + +Source: AIMMUNE THERAPEUTICS, INC., 8-K, 2/5/2020 + + + + + +With copies to (which shall not constitute notice): Xencor, Inc. 111 West Lemon Avenue Monrovia, CA 91016 Attention: Chief Executive Officer + +Morgan, Lewis & Bockius LLP 1 Market Street, Spear Street Tower San Francisco, CA 94105 Attention: Benjamin Pensak + +If to Aimmune: Aimmune Therapeutics, Inc. 8000 Marina Boulevard Suite 300 Brisbane, CA 94005 Attention: General Counsel + +With copies to (which shall not constitute notice): Latham & Watkins LLP 140 Scott Drive Menlo Park, CA 94025 Attention: Patrick Pohlen Judith Hasko + +15.5 Maintenance of Records. Aimmune shall keep and maintain all records required by Applicable Law or regulation (including records for intellectual property protection purposes) with respect to the Antibody and Product and shall, upon Xencor's written request, allow Xencor reasonable access to make copies of such records, at Xencor's expense. Aimmune must maintain such records for the greater of [***] ([***]) years or the time period required by Applicable Law. + +15.6 Assignment. Neither Party may assign or transfer this Agreement or any rights or obligations hereunder without the prior written consent of the other Party, except that a Party may make such an assignment or transfer without the other Party's written consent to (a) any of its Affiliates, in whole or in part, or (b) any Third Party in connection with (i) the acquisition of such Party by or merger or consolidation of such Party with another entity or (ii) a merger, consolidation, sale of stock, sale of all or substantially all of such Party's assets or other similar transaction in which such Third Party either becomes the owner of all or substantially all of the business and assets of (y) such Party or (z) that portion of such Party's business or business unit relating to this Agreement. Any permitted successor or assignee of rights or obligations hereunder shall, in a writing delivered to the other Party, expressly assume the performance of such rights or obligations. Except as set forth in the immediately preceding sentence, in the event of an assignment or transfer as permitted above in this Section 15.6, the assigning or transferring Party shall remain responsible (jointly and severally) with such Affiliate for the 45 + +Source: AIMMUNE THERAPEUTICS, INC., 8-K, 2/5/2020 + + + + + +performance of such assigned or transferred obligations. Any assignment or transfer, or attempted assignment or transfer, by either Party in violation of the terms of this Section 15.6 shall be null and void and of no legal effect. This Agreement shall be binding on, and inure to the benefit of, each Party, its successors and permitted assigns. Notwithstanding anything to the contrary in this Agreement, in the event of any permitted assignment, the intellectual property rights of the acquiring party and its Affiliates (if other than one of the Parties to this Agreement) shall not be included in the technology licensed to the other Party hereunder to the extent held by such acquirer (or its Affiliates) prior to such transaction, or to the extent such technology is developed outside the scope of activities conducted with respect to the Antibody or Products, unless the acquired Party practices such intellectual property rights of the acquirer in connection with its performance of activities pursuant to this Agreement. + +15.7 Offset Rights. Notwithstanding anything to the contrary in this Agreement, neither Party may, at any time or for any reason, offset any payments due to the other Party or its Affiliates under this Agreement. + +15.8 Severability. If any one (1) or more of the provisions of this Agreement is held to be invalid or unenforceable by any court of competent jurisdiction from which no appeal can be or is taken, such provision shall be considered severed from this Agreement and shall not serve to invalidate any remaining provisions hereof. The Parties shall make a good faith effort to replace any invalid or unenforceable provision with a valid and enforceable one such that the objectives contemplated by the Parties when entering this Agreement may be realized. + +15.9 Cumulative Remedies. No remedy referred to in this Agreement is intended to be exclusive, but each shall be cumulative and in addition to any other remedy referred to in this Agreement or otherwise available under Applicable Law. + +15.10 Ambiguities; No Presumption. Each of the Parties acknowledges and agrees that this Agreement has been diligently reviewed by and negotiated by and between them, that in such negotiations each of them has been represented by competent counsel and that the final agreement contained herein, including the language whereby it has been expressed, represents the joint efforts of the Parties hereto and their counsel. Accordingly, in interpreting this Agreement or any provision hereof, no presumption shall apply against any Party hereto as being responsible for the wording or drafting of this Agreement or any such provision, and ambiguities, if any, in this Agreement shall not be construed against any Party, irrespective of which Party may be deemed to have authored the ambiguous provision. + +15.11 Headings. The headings for each Article and Section in this Agreement have been inserted for convenience of reference only and are not intended to limit or expand on the meaning of the language contained in the particular article or section. + +15.12 Interpretation. Except where the context expressly requires otherwise, (a) the use of any gender herein shall be deemed to encompass references to either or both genders, and the use of the singular shall be deemed to include the plural (and vice versa), (b) the words "include", "includes" and "including" shall be deemed to be followed by the phrase "without limitation", (c) the word "will" shall be construed to have the same meaning and effect as the 46 + +Source: AIMMUNE THERAPEUTICS, INC., 8-K, 2/5/2020 + + + + + +word "shall", (d) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (e) any reference herein to any person shall be construed to include the person's successors and assigns, (f) the words "herein", "hereof" and "hereunder", and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (g) all references herein to Articles, Sections, Exhibits or Schedules shall be construed to refer to Articles, Sections, Exhibits or Schedules of this Agreement, and references to this Agreement include all Exhibits and Schedules hereto, (h) the word "notice" means notice in writing (whether or not specifically stated) and shall include notices, consents, approvals and other written communications contemplated under this Agreement, (i) provisions that require that a Party or the Parties hereunder to "agree", "consent" or "approve" or the like shall require that such agreement, consent or approval be specific and in writing, whether by written agreement, letter, approved minutes or otherwise (but excluding instant messaging), (j) references to any specific law, rule or regulation, or article, section or other division thereof, shall be deemed to include the then-current amendments thereto or any replacement or successor law, rule or regulation thereof, and (k) the term "or" shall be interpreted in the inclusive sense commonly associated with the term "and/or." + +15.13 Governing Law and Equitable Relief. + +15.13.1 Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of California applicable to agreements made and to be performed entirely within such state, without regard to the conflicts of law principles of such state; provided that any matters relating to the construction or effect of any Patent will be governed by the patent laws of the relevant jurisdiction in which such Patent is granted. This Agreement was prepared in the English language, which language shall govern the interpretation of, and any dispute regarding, the terms of this Agreement. + +15.13.2 Equitable Relief. Notwithstanding anything in this Agreement to the contrary, each Party shall have the right to seek injunctive or other equitable relief from a court of competent jurisdiction that may be necessary to avoid irreparable harm or to maintain the status quo. + +15.13.3 Jurisdiction. Each Party (a) irrevocably submits to the exclusive jurisdiction of any United States District Court in California (the "Court"), for purposes of any action, suit or other proceeding arising out of this Agreement, (b) agrees not to raise any objection at any time to the laying or maintaining of the venue of any such action, suit or proceeding in any of such Court, and (c) irrevocably waives any claim that such action, suit or other proceeding has been brought in an inconvenient forum and further irrevocably waives the right to object, with respect to such action, suit or other proceeding, that such Court does not have any jurisdiction over such Party. Each Party further agrees that service or any process, summons, notice or document by U.S. registered mail to such Party's notice address provided for in this Agreement shall be effective service of process for any action, suit or proceeding in California with respect to any matters to which it has submitted to jurisdiction in this Section 47 + +Source: AIMMUNE THERAPEUTICS, INC., 8-K, 2/5/2020 + + + + + +15.13.3. Notwithstanding the forgoing, nothing contained in this Agreement will deny any Party the right to seek injunctive relief or other equitable relief from a court of competent jurisdiction applying the laws of the court in the context of a bona fide emergency or prospective irreparable harm, and such an action may be filed and maintained notwithstanding any other ongoing proceeding. + +15.13.4 No Waiver. Any delay in enforcing a Party's rights under this Agreement or any waiver as to a particular default or other matter shall not constitute a waiver of such Party's rights to the future enforcement of its rights under this Agreement, except with respect to an express written and signed waiver relating to a particular matter for a particular period of time. + +15.14 No Third Party Beneficiaries. No person or entity other than Aimmune, Xencor and their respective Affiliates, successors and permitted assignees hereunder, shall be deemed an intended beneficiary hereunder or have any right to enforce any obligation of this Agreement. + +15.15 Independent Contractors. It is expressly agreed that Aimmune and Xencor shall be independent contractors and that the relationship between Aimmune and Xencor shall not constitute a partnership, joint venture or agency. Neither Aimmune nor Xencor shall have the authority to make any statements, representations, or commitments of any kind, or to take any action, which shall be binding on the other Party, without the prior written consent of such other Party. + +15.16 Counterparts; Facsimile Signatures. This Agreement may be executed in three (3) or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one (1) and the same instrument. This Agreement may be executed by delivery of electronically scanned copies of original signatures delivered by facsimile or electronic mail, and such signatures shall be deemed to bind each Party as if they were original signatures. + +[No Further Text on This Page] 48 + +Source: AIMMUNE THERAPEUTICS, INC., 8-K, 2/5/2020 + + + + + +IN WITNESS WHEREOF, the Parties have executed this Agreement by their duly authorized representatives as of the date first written above. AIMMUNE THERAPEUTICS, INC. XENCOR, INC. + +By: /s/ Jayson Dallas, M.D By: /s/ Bassil Dahiyat, Ph.D. + +Name: Jayson Dallas, M.D Name: Bassil Dahiyat, Ph.D. + +Title: President & CEO Title: President & CEO 49 + +Source: AIMMUNE THERAPEUTICS, INC., 8-K, 2/5/2020 + + + + + +Schedule 1.10 Antibody + +Omitted pursuant to Regulation S-K, Item 601(a)(5) 50 + +Source: AIMMUNE THERAPEUTICS, INC., 8-K, 2/5/2020 + + + + + +Schedule 1.79 Xencor General Patents + +Omitted pursuant to Regulation S-K, Item 601(a)(5) 51 + +Source: AIMMUNE THERAPEUTICS, INC., 8-K, 2/5/2020 + + + + + +Schedule 1.81 Xencor Product Specific Patents + +Omitted pursuant to Regulation S-K, Item 601(a)(5) 52 + +Source: AIMMUNE THERAPEUTICS, INC., 8-K, 2/5/2020 + + + + + +Schedule 2.7 Xencor Know-How, Regulatory Materials, and Regulatory Data + +Omitted pursuant to Regulation S-K, Item 601(a)(5) 53 + +Source: AIMMUNE THERAPEUTICS, INC., 8-K, 2/5/2020 + + + + + +Schedule 6.1 Initial Product Supply + +Omitted pursuant to Regulation S-K, Item 601(a)(5) 54 + +Source: AIMMUNE THERAPEUTICS, INC., 8-K, 2/5/2020 + + + + + +Schedule 10.2.6 Exceptions + +Omitted pursuant to Regulation S-K, Item 601(a)(5) 55 + +Source: AIMMUNE THERAPEUTICS, INC., 8-K, 2/5/2020 + + + + + +Schedule 12.2 Initial Press Release 56 + +Source: AIMMUNE THERAPEUTICS, INC., 8-K, 2/5/2020 + + + + + +Distribution on Wednesday, 2/5 @ 8:01 am ET + +FOR IMMEDIATE RELEASE + +Aimmune Licenses Exclusive Worldwide Rights to Xencor's XmAb®7195 for the Development of Next-Generation Food Allergy Treatments + +BRISBANE, Calif. - February 5, 2020 - Aimmune Therapeutics, Inc. (Nasdaq: AIMT), a biopharmaceutical company developing treatments for potentially life-threatening food allergies, today announced it has obtained an exclusive worldwide license to develop and commercialize the investigational humanized monoclonal antibody XmAb®7195 from Xencor, Inc. + +XmAb7195, which has been renamed AIMab7195, was originally developed by Xencor for the treatment of allergic asthma. It uses three distinct mechanisms of action to reduce blood serum IgE and suppress IgE-producing cells. Aimmune initially plans to develop AIMab7195 as an adjunctive treatment with select Characterized Oral Desensitized ImmunoTherapy (CODIT™) programs, including PALFORZIA™ , to explore treatment outcomes in patients with food allergies. + +"As we look to the future of food allergy treatments, we are excited to explore the potential of oral immunotherapy to achieve greater levels of desensitization - and perhaps even remission - when combined with adjunctive biologics that target immune pathways," said Jayson Dallas, M.D., President and CEO of Aimmune. "In-licensing AIMab7195 demonstrates our commitment to enriching our pipeline and strengthening Aimmune's global leadership in the evolving therapeutic landscape of food allergy treatments." + +"Aimmune's focus, clinical success and regulatory expertise in food allergy demonstrate their capability to advance AIMab7195 with highly complementary CODIT pipeline programs to create new options for people living with food allergy," said Bassil Dahiyat, Ph.D., President and CEO of Xencor. "AIMab7195 is designed to reduce levels of IgE, a key mediator of allergic response, and there is strong scientific rationale that this reduction would synergize with the activity of desensitization therapies." + +Under the terms of the agreement, Aimmune will make an upfront payment to Xencor of $5 million in cash and $5 million in equity, equivalent to 156,238 newly issued shares of Aimmune common stock at $32.0025/share. Xencor also is eligible to receive up to $385 million based on the achievement of certain clinical development, regulatory and commercialization milestones — beginning with the initiation of a Phase 2 clinical trial — and is eligible to receive a high single-digit to mid-teen percentage of royalties upon commercialization of AIMab7195. Aimmune will be solely responsible for costs related to the development of AIMab7195 and plans to provide a development plan in the coming months. + +About AIMab7195 (formerly XmAb®7195) + +AIMab7195 is an anti-IgE monoclonal antibody with enhanced binding to the Fc gamma receptor IIb (FcyRIIb). IgE recognizes and interacts with allergens and, as a result, can activate immune cells, such as mast cells and basophils, that drive an allergic response + +Source: AIMMUNE THERAPEUTICS, INC., 8-K, 2/5/2020 + + + + + +in patients. AIMab7195 is designed to clear IgE rapidly from circulation, to prevent the production of IgE by preventing the activation of IgE-positive B cells, and to block IgE from interacting with its receptor on immune cells. AIMab7195 has been evaluated in two Phase 1 studies that enrolled more than 100 healthy volunteers and patients with allergy and atopic disease. + +About Aimmune + +Aimmune Therapeutics, Inc. is a biopharmaceutical company that aspires to become the global leader in developing curative therapies and solutions for patients with food allergies. With a mission to improve the lives of people with food allergies, Aimmune is developing and commercializing oral treatments for potentially life-threatening food allergies. The Company's Characterized Oral Desensitization ImmunoTherapy (CODIT™) approach is intended to provide meaningful levels of protection against allergic reactions resulting from accidental exposure to food allergens by desensitizing patients with defined, precise amounts of key allergens. Aimmune has one FDA-approved medicine for peanut allergy and other investigational therapies in development to treat other food allergies. For more information, please visit www.aimmune.com. + +Forward-Looking Statements + +Statements contained in this press release regarding matters that are not historical facts are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Because such statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Such statements include, but are not limited to, statements regarding: Aimmune's expectations regarding the potential benefits of AIMab7195; and Aimmune's expectations regarding potential applications of the CODIT™ approach to treating life-threatening food allergies. Risks and uncertainties that contribute to the uncertain nature of the forward-looking statements include: the expectation that Aimmune will need additional funds to finance its operations; Aimmune's dependence on the success of PALFORZIA; Aimmune's reliance on third parties for the manufacture of AIMab7195, PALFORZIA and other product candidates; possible regulatory developments in the United States and foreign countries; and Aimmune's ability to attract and retain senior management personnel. These and other risks and uncertainties are described more fully in Aimmune's most recent filings with the Securities and Exchange Commission, including its Quarterly Report on Form 10-Q for the quarter ended September 30, 2019. All forward-looking statements contained in this press release speak only as of the date on which they were made. Aimmune undertakes no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they were made. + +This press release concerns PALFORZIA (AR101), which has been approved for marketing by the FDA in the United States and has not been approved for marketing by the EMA or Swissmedic. AR101 in Europe is currently limited to investigational use, and no representation is made as to its safety or effectiveness for the purposes for which it is being investigated. + +Source: AIMMUNE THERAPEUTICS, INC., 8-K, 2/5/2020 + + + + + +AIMab7195 T M, PALFORZIA™ , AIMMUNE™ , AIMMUNE THERAPEUTICS™ and CODIT™ are trademarks of Aimmune Therapeutics, Inc + +Xencor® and XmAb® are registered trademarks of Xencor, Inc. + +### + +Contacts: Investors: DeDe Sheel (917) 834-1494 dsheel@aimmune.com + +Media: Julie Normart (559) 974-3245 jnormart@w2ogroup.com + +Lauren Barbiero (646) 564-2156 lbarbiero@w2ogroup.com + +Source: AIMMUNE THERAPEUTICS, INC., 8-K, 2/5/2020 + + + + + +Aimmune Licenses Exclusive Worldwide Rights to Xencor's XmAb®7195 for the Development of Next-Generation Food Allergy Treatments + +MONROVIA, Calif. - February 5, 2020 - Xencor, Inc. (NASDAQ:XNCR), a clinical-stage biopharmaceutical company developing engineered monoclonal antibodies for the treatment of cancer and autoimmune diseases, announced it has granted an exclusive worldwide license to develop and commercialize the investigational humanized monoclonal antibody XmAb®7195 to Aimmune Therapeutics, Inc. + +XmAb7195, which has been renamed AIMab7195, was originally developed by Xencor for the treatment of allergic asthma. It uses three distinct mechanisms of action to reduce blood serum IgE and suppress IgE-producing cells. Aimmune initially plans to develop AIMab7195 as an adjunctive treatment with select Characterized Oral Desensitized ImmunoTherapy (CODIT™) programs, including PALFORZIA™ , to explore treatment outcomes in patients with food allergies. + +"As we look to the future of food allergy treatments, we are excited to explore the potential of oral immunotherapy to achieve greater levels of desensitization - and perhaps even remission - when combined with adjunctive biologics that target immune pathways," said Jayson Dallas, M.D., president and CEO of Aimmune. "In-licensing AIMab7195 demonstrates our commitment to enriching our pipeline and strengthening Aimmune's global leadership in the evolving therapeutic landscape of food allergy treatments." + +"Aimmune's focus, clinical success and regulatory expertise in food allergy demonstrate their capability to advance AIMab7195 with highly complementary CODIT pipeline programs to create new options for people living with food allergy," said Bassil Dahiyat, Ph.D., President and CEO of Xencor. "AIMab7195 is designed to reduce levels of IgE, a key mediator of allergic response, and there is strong scientific rationale that this reduction would synergize with the activity of desensitization therapies." + +Under the terms of the agreement, Aimmune will make an upfront payment to Xencor of $5 million in cash and $5 million in equity, equivalent to 156,238 newly issued shares of Aimmune common stock at $32.0025/share, the seven-day volume weighted average price. Xencor also is eligible to receive up to $385 million based on the achievement of certain clinical development, regulatory and commercialization milestones - beginning with the initiation of a Phase 2 clinical trial - and is eligible to receive a high single-digit to mid-teen percentage of royalties upon commercialization of AIMab7195. Aimmune will be solely responsible for costs related to the development of AIMab7195 and plans to provide a development plan in the coming months. + +About AIMab7195 (formerly XmAb®7195) + +AIMab7195 is an anti-IgE monoclonal antibody with enhanced binding to the Fc gamma receptor IIb (FcyRIIb). IgE recognizes and interacts with allergens and, as a result, can activate immune cells, such as mast cells and basophils, that drive an allergic response in patients. AIMab7195 is designed to clear IgE rapidly from circulation, to prevent the production of IgE by preventing the activation of IgE-positive B cells, and to block IgE from interacting with its receptor on immune cells. AIMab7195 has been evaluated in two Phase 1 studies that enrolled more than 100 healthy volunteers and patients with allergy and atopic disease. + +Source: AIMMUNE THERAPEUTICS, INC., 8-K, 2/5/2020 + + + + + +About Xencor, Inc. + +Xencor is a clinical-stage biopharmaceutical company developing engineered monoclonal antibodies for the treatment of cancer and autoimmune diseases. Currently, 15 candidates engineered with Xencor's XmAb® technology are in clinical development internally and with partners. Xencor's XmAb antibody engineering technology enables small changes to the structure of monoclonal antibodies resulting in new mechanisms of therapeutic action. For more information, please visit www.xencor.com. + +Forward-Looking Statements + +Statements contained in this press release regarding matters that are not historical facts are forward-looking statements within the meaning of applicable securities laws, including, but not limited to, the quotations from the chief executive officers of Xencor and Aimmune and any expectations relating to the potential benefits of AIMab7195; its clinical development, synergies with CODIT™ programs and efficacy; regulatory approval; or commercialization. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements and the timing of events to be materially different from those implied by such statements, and therefore these statements should not be read as guarantees of future performance or results. Such risks include, without limitation, the risks associated with the process of discovering, developing, manufacturing and commercializing drugs that are safe and effective for use as human therapeutics and other risks described in Xencor's public securities filings. For a discussion of these and other factors, please refer to Xencor's annual report on Form 10-K for the year ended December 31, 2018 as well as Xencor's subsequent filings with the Securities and Exchange Commission. All forward-looking statements are based on Xencor's current information and belief as well as assumptions made by Xencor. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. This caution is made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All forward-looking statements are qualified in their entirety by this cautionary statement and Xencor undertakes no obligation to revise or update this press release to reflect events or circumstances after the date hereof, except as required by law. + +AIMab7195™ , PALFORZIA™ , AIMMUNE™ , AIMMUNE THERAPEUTICS™ and CODIT™ are trademarks of Aimmune Therapeutics, Inc + +Xencor® and XmAb® are registered trademarks of Xencor, Inc. + +Contacts + +Charles Liles 626-737-8118 cliles@xencor.com + +Media Contact Jason I. Spark Canale Communications 619-849-6005 jason@canalecomm.com + +Source: AIMMUNE THERAPEUTICS, INC., 8-K, 2/5/2020 \ No newline at end of file diff --git a/full_contract_txt/AlliedEsportsEntertainmentInc_20190815_8-K_EX-10.19_11788293_EX-10.19_Content License Agreement.txt b/full_contract_txt/AlliedEsportsEntertainmentInc_20190815_8-K_EX-10.19_11788293_EX-10.19_Content License Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..f2f74676dc11e2df826e3a8f3ea37bd8d9239e09 --- /dev/null +++ b/full_contract_txt/AlliedEsportsEntertainmentInc_20190815_8-K_EX-10.19_11788293_EX-10.19_Content License Agreement.txt @@ -0,0 +1,97 @@ +Exhibit 10.19 JOINT CONTENT LICENSE AGREEMENT This JOINT CONTENT LICENSE AGREEMENT (the "Agreement"), dated February 1, 2018 (the "Effective Date"), is made by and between WPT Enterprises, Inc., a Delaware corporation, with offices located at 1920 Main Street, Suite 1150, Irvine, CA 92614 ("WPT"), and ZYNGA INC., a Delaware corporation with offices located at 699 8th Street, San Francisco CA, 94103 ("Zynga US") and ZYNGA GAME IRELAND LIMITED, a limited company organized under the laws of Ireland, resident in Ireland and having its registered office located at The Oval, Building One, Third Floor 160 Shelbourne Road Ballsbridge 4 Co. Dublin Ireland ("Zynga Ireland," and together with Zynga US and their respective Affiliates, "Zynga"). In addition to the Definitions set forth in Section 1 of the Additional Provisions (attached and incorporated by reference), all capitalized terms used herein shall have the meanings set forth below. In consideration of the mutual promises herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows: BASIC PROVISIONS 1. Joint Content License Relationship. Among other games, Zynga produces and distributes the ZYNGA POKER® game on a number of global platforms, including Apple iOS, Google Android, Facebook and the zynga.com website. The ZYNGA POKER® game features a Zynga Poker Tournaments Mode that Zynga can customize. Among other things, WPT is the creator of the World Poker Tour, WPT Tournaments and the WPT Invitational Tournaments. WPT Tournaments and WPT Invitational Tournaments are televised poker tournaments where a partner can promote its brand. The parties desire to work cooperatively, but independently, to use commercially reasonable efforts to engage in the marketing and promotional activities described in Exhibit A, including, but not limited to Zynga promoting the WPT brand in a WPT-branded Zynga Poker Tournament Mode, and WPT promoting the Zynga brand in WPT Tournaments and WPT Invitational Tournaments. This Agreement describes the terms of a content license and cooperative marketing relationship under which each party will independently or cooperatively engage in mutually agreed activities to promote each other's products and services throughout the Territory (as defined below). 2. Territory. The Territory for this Agreement is worldwide, but not including Asian countries (including, but not limited to, Bangladesh, Bhutan, Brunei, Cambodia, East Timor, Hong Kong, India, Indonesia, Japan, Laos, Macau, Malaysia, Maldives, Mongolia, Myanmar, Nepal, North Korea, Pakistan, People's Republic of China, Philippines, Singapore, South Korea, Sri Lanka, Taiwan, Thailand, Vietnam). The parties acknowledge and agree that the rights granted hereunder by Zynga (a) with respect to the United States are granted to, held and exercised by Zynga US and (b) with respect to all other parts of the Territory are granted to, held and exercised by Zynga Ireland. + +1 + +Source: ALLIED ESPORTS ENTERTAINMENT, INC., 8-K, 8/15/2019 + + + + + +3. Term. This Agreement will be in effect for three (3) years from the Effective Date ("Initial Term") unless terminated earlier in accordance with this Agreement. This Agreement shall automatically extend for an additional two (2) years on the same terms herein ("Renewal Term") provided WPT receives payments greater than twelve million U.S. dollars ($12,000,000) within the Initial Term. The Initial Term and any such Renewal Term are collectively referred to as the "Term." 4. Annual Minimum Guarantee. Zynga will pay WPT three million U.S. dollars ($3,000,000) per year according to the following schedule (which the parties may alter upon mutual agreement) (the "Annual Minimum Guarantee"): a. Within thirty (30) days of executing this Agreement: $1.5M b. July 1, 2018: $1.5M c. January 1, 2019: $1.5M d. July 1, 2019: $1.5M e. January 1, 2020: $1.5M f. July 1, 2020: $1.5M 5. Royalty. Zynga will pay to WPT ten percent (10%) of the cumulative Net Revenue (as defined in Section 3.b. of the Additional Provisions) ("Royalty") from the WPT-branded Zynga Poker Tournament Mode or other such use of the WPT brand on the Zynga platform. Zynga shall not be required to pay the Royalty to the extent offset by the Annual Minimum Guarantee payments previously paid to WPT during the Term. Conversely, Zynga shall not be required to make Annual Minimum Guarantee payments to the extent offset by the Royalty previously paid to WPT during the Term. The Additional Provisions and any attached Exhibits are incorporated by reference. Signature page to follow. + +2 + +Source: ALLIED ESPORTS ENTERTAINMENT, INC., 8-K, 8/15/2019 + + + + + +IN WITNESS WHEREOF ZYNGA INC. Signature: ______________________ Name: _________________________ Title: __________________________ + +WPT ENTERPRISES, INC. Signature: _________________________ Name: ____________________________ Title: _____________________________ ZYNGA GAME IRELAND LIMITED Signature: ______________________ Name: _________________________ Title: __________________________ + +3 + +Source: ALLIED ESPORTS ENTERTAINMENT, INC., 8-K, 8/15/2019 + + + + + +ADDITIONAL PROVISIONS The following Additional Provisions form part of the Agreement dated February 1, 2018 entered into by and between ZYNGA INC. and ZYNGA GAME IRELAND LIMITED and their respective affiliates ("Zynga"), and WPT Enterprises, Inc. ("WPT"). 1. DEFINITIONS a. "Affiliate" means an entity, directly or indirectly, controlled by, controlling of, or under common control with a party, either now or in the future, and their respective successors and assigns. b. "Artwork" means, without limitation, all pictorial, graphic, visual, audio, audio-visual, digital, literary, animated, artistic, dramatic, sculptural, musical or any other type of creation or application, whether finished or not, including, without limitation, animation, drawings, designs, sketches, images, illustrations, film, video, electronic, digitized or computerized information, software, object code, source code, on-line elements, music, text, dialogue, stories, visuals, effects, scripts, voiceovers, logos, one-sheets, promotional pieces, packaging, display materials, printed materials, photographs, interstitials, notes, shot logs, character profiles and translations. c. "Agreement" means the Basic Provisions, these Additional Provisions, and any and all attached Exhibits. d. "Licensed Property" means those specific trademarks, service marks, publicity rights, copyrights, intellectual property rights, and any other items set forth in this Agreement, which the parties may utilize in connection with the marketing and promotional activities in Exhibit A. A list of the Licensed Property for each party is described in Exhibit B. e. "Annual Minimum Guarantee" means the guaranteed minimum amount due to WPT by Zynga in consideration of the rights granted herein, which amount may be recoupable from Royalties as set forth below and in the Basic Provisions. f. "Royalty" means the amount(s) set forth in the Basic Provisions and calculated as described in the Additional Provisions. g. "Term" means the term of this Agreement as set forth in the Basic Provisions. h. "Territory" means the territory throughout which the parties are authorized to engage in the marketing and promotional activities as described in Exhibit A and in the Basic Provisions. 2. TRADEMARKS, APPROVALS, AND RESERVATION OF RIGHTS a. Materials. To the extent indicated on Exhibit A, each party will provide the other party with electronic files containing the Licensed Property of such party to be used under this Agreement, as specified in Exhibit B, if any. b. License by Zynga. Subject to the terms and conditions of this Agreement, Zynga grants to WPT a non-exclusive, non- assignable, non-sublicensable, royalty-free, paid up, limited worldwide license to use and display Zynga's Licensed Property solely as necessary to perform WPT's obligations under this Agreement and as specifically described on Exhibit A, in any and all media now known or hereafter devised, for the Term (subject to Section 7.e. of Additional Provisions). c. License by WPT. Subject to the terms and conditions of this Agreement, WPT grants to Zynga a non-exclusive, non-assignable, non-sublicensable, royalty-free, paid up, limited license in the Territory to use and display WPT's Licensed Property solely as necessary to perform Zynga's obligations under this Agreement and as specifically described on Exhibit A, for the Term. d. Trademark Guidelines. In its use of the Licensed Property of the other party ("Licensee"), each party ("Licensor") will comply with any trademark usage guidelines that Licensor may communicate to Licensee from time to time. Each use of Licensor's marks by Licensee will be accompanied by the appropriate trademark symbol (either "™" or "®") and a legend specifying that such marks are trademarks of Licensor as specified on Exhibit B, and will be in accordance with Licensor's then-current trademark usage policies as provided in writing to Licensee from time to time. Licensee will provide Licensor with copies of any materials bearing any of Licensor's marks as requested by Licensor from time to time. If Licensee's use of any of Licensor's marks, or if any material bearing such marks, does not comply with the then-current trademark usage policies provided in writing by Licensor, Licensee will promptly remedy such deficiencies upon receipt of written notice of such deficiencies from Licensor. Other than the express licenses granted herein with respect to each Licensor's marks, nothing herein will grant to Licensee any other right, title or interest in Licensor's marks. All goodwill resulting from Licensee's use of Licensor's marks will inure solely to Licensor. Each party recognizes the great value of the publicity and good will associated with the Licensed Property and acknowledges that: (a) such good will is exclusively that of Licensor or Licensee, as applicable; and (b) the Licensed Property have acquired a secondary meaning as trademarks and/or identifications of Licensor or Licensee, as applicable, in the mind of the purchasing public. Licensee will not, at any time during or after this Agreement, register, attempt to register, claim any interest in, contest the use of, or otherwise adversely affect the validity of any of Licensor's marks (including, without limitation, any act or assistance to any act, which may infringe or lead to the infringement of any such marks). + +4 + +Source: ALLIED ESPORTS ENTERTAINMENT, INC., 8-K, 8/15/2019 + + + + + +e. Approvals. The Licensed Property shall be displayed or used only in such form and in such manner as has been approved in writing (which may be by email) by Licensor pursuant to this Section 2 and Licensee shall ensure its usage of the Licensed Property solely as approved. Throughout the Term, including any renewals or extensions (if applicable), Licensee shall comply with reasonable quality standards, style guides and clear specifications communicated to Licensee and rights of approval of Licensor set forth in this Section 2 with respect to any and all of its usage of the Licensed Property. Subject to Licensor's prior written approval of any applicable Licensed Property (hereinafter the "Approved Content"), all Conforming Content will be deemed approved by Licensor. "Conforming Content" means any and all elements of the Approved Content which (i) do not represent deviations in quality, style, look-and-feel or other aspects of use from the Approved Content and (ii) are consistent with the aesthetic style or tone of the Approved Content. The parties will come to agreement with respect to Exhibit A as to whether prior written approval is needed in every instance or whether it is not needed after the first instance has been approved in writing (e.g., given exigencies in television production business, it is reasonable that Zynga would approve the use of its brand conceptually in elements of an episode but not need to re-approve the use in a similar manner for every episode the brand is used in; and similarly, given exigencies in the social gaming business, it is reasonable that WPT would approve use of its brand conceptually in elements of the Zynga platform but not need to re-approve the use in a similar manner for every poker tournament the brand is used in). i. Licensee may use textual and/or pictorial matter pertaining to the Licensed Property on such promotional, display and advertising material as may, in Licensee's reasonable judgment, promote the awareness, consumption and sale of the Licensed Property. All final advertising and promotional material using the Licensed Property must be submitted to Licensor for its prior written approval. All press releases respecting this Agreement or the relationship of the parties herein shall require prior written approval by the other party. ii. Licensor will use commercially reasonable efforts to provide approval and/or feedback within five (5) business days after its receipt of a creative submission, or re-submission, with respect to the Licensed Property or marketing materials; provided that: (a) if Licensor declines to approve any submission or re-submission, then it shall provide reasonably detailed feedback in order to enable Licensee to modify the Licensed Property or marketing material accordingly in order to address Licensor's concerns and obtain Licensor's approval, and (b) if Licensor fails to (1) approve or (2) disapprove and provide feedback within such timeframe, then such submission or re-submission is deemed to have been approved. No approval may be unreasonably withdrawn by Licensor once delivered. iii. Zynga shall advise WPT to Zynga's knowledge as to which jurisdictions where it may be illegal to advertise Zynga's Licensed Property (if any) given local laws or regulations. iv. WPT or its affiliates shall not authorize a Zynga Competitor to commercially exploit the Licensed Property in connection with social poker gaming via a license similar to the license granted herein for the Term. A "Zynga Competitor" means: 1) Aristocrat Technologies Australia Pty Ltd. Or Big Fish Games, Inc.; 2) HUUUGE Inc.; 3) Activision Blizzard, Inc., King.com Ltd. Or King.com (US) LLC; 4) Scientific Games Corporation; 5) Tencent Holdings Limited; and 6) Murka Ltd. The parties agree to work together in good faith to amend the definition of a Zynga Competitor if that meaning for Zynga reasonably changes during the Term. f. Reservation of Rights. The parties acknowledge and agree that, except for the rights and licenses expressly granted by each party to the other party under this Agreement, each party will retain all right, title and interest in and to its products, services, marks, copyrights or other intellectual property, and all content, information and other materials on its website(s), and nothing contained in this Agreement will be construed as conferring upon such party, by implication, operation of law or otherwise, any other license or other right. 3. PAYMENT a. Annual Minimum Guarantee. Zynga will pay to WPT the Annual Minimum Guarantee as set forth in the Basic Provisions. The Annual Minimum Guarantee shall be recoupable from such Royalties as are, or have become, paid to WPT. For clarification, the Annual Minimum Guarantee will operate as an advance payment, such that when accrued Royalties exceed the Annual Minimum Guarantee payments already paid, then the excess Royalties will be paid by Zynga to WPT. b. Royalty. The Royalties to be paid by Zynga to WPT is the percentage of Net Revenue as set forth in Section 5 of the Basic Provisions. "Net Revenue(s)" shall be defined as one hundred percent (100%) of gross revenues and all other receivables of any kind whatsoever received by Zynga or any of Zynga's affiliates attributable to the use of Paid Currency or in connection with the sale of Virtual Digital Goods derived from use of the WPT-brand on the Zynga platform, less the following actual and verifiable "Allowable Deductions": (i) out-of-pocket, third-party payment processing and currency system fees, commissions, and platform distribution fees (e.g., Apple, Google or Facebook platform fees); (ii) any governmental taxes (e.g., VAT, excise or sales or use tax, etc.) arising in connection with related receipts, but excluding any taxes on Licensee's net income; and (iii) charge- backs/refunds/cancellations/fraud. "Paid Currency" means virtual currency purchased using real money. "Virtual Digital Goods" means any virtual, digital representation of any actual or fictional thing or item within Zynga Poker, which is capable of being made available for distribution, placement, download or other display by electronic means. Any other deductions must be mutually agreed upon in advance and in writing by the parties. + +5 + +Source: ALLIED ESPORTS ENTERTAINMENT, INC., 8-K, 8/15/2019 + + + + + +c. Payment. All amounts payable and due will be made in U.S. dollars. If withholding taxes are required, Zynga may account for the required amount of such withholding taxes when calculating the Royalty or other payments payable prior to remittance to WPT. Zynga shall provide WPT with an official receipt or other equivalent documentation issued by the appropriate taxing authority or other evidence as is reasonably requested by WPT to establish that such taxes have been paid. Zynga shall pay all amounts accruing under this Agreement for any reporting period to WPT by check or wire transfer to the account specified by WPT in writing, concurrently with Zynga's delivery of the applicable report under Section 3(d), provided that payments will only be paid if the amount owed to WPT for any reporting period is greater than five hundred dollars ($500.00). An amount due of less than five hundred dollars ($500.00) will be accumulated to the next payment and will be included in the amount to be paid to WPT on the next payment date, again provided that the amount owed to WPT in the subsequent month exceeds five hundred dollars ($500.00). Accumulated amounts do not accrue any interest. d. Reporting. Zynga will, within thirty (30) days of the end of each calendar quarter, commencing with the first full calendar quarter following the Effective Date, furnish WPT with complete statements containing the following information with respect to all Net Revenue from the use of the WPT-brand on the Zynga platform, during the preceding period covered by such statement: the Territory; the amount due WPT (or the remaining unrecouped Annual Minimum Guarantee balance as applicable); Net Revenue; Royalties rate; the distribution channels or portals, the platform, the territory(ies), and itemized Allowable Deductions ("Royalty Statement(s)"). The amount shown to be payable to WPT shall be paid simultaneously with the rendition of the respective Royalty Statement. The statements and payments remitted hereunder shall be delivered to WPT via email to the following email address: Deborah.Frazzetta@wpt.com (ATTN: Deborah Frazzetta, VP, Finance. e. Audit Rights. Zynga shall keep full, complete and accurate books of account and records (collectively "records") covering all transactions relating to the subject matter of this Agreement in sufficient detail to enable the Royalties payable hereunder to be determined and verified. Zynga shall permit such records to be examined by authorized representatives of WPT, including such independent auditors as WPT may designate, during usual business hours, with advance notice, to verify to the extent necessary the Royalties paid hereunder, and WPT and its representatives shall use reasonable efforts to minimize disruptions to Zynga's business. Prompt adjustment shall be made by Zynga to compensate for any errors or omissions disclosed by such examination. If the adjustment is more than $1,500 in favor, then out-of-pocket costs of such examination shall be borne by Zynga. f. No Other Charges or Expenses. Neither party will be liable to pay the other party any other types of charges or expenses not agreed to in this Agreement or any related amendment signed by the Parties. 4. REPRESENTATIONS AND WARRANTIES; LIMITATIONS OF LIABILITY a. Each party represents and warrants to the other as follows: (i) it is duly authorized under applicable law and has the authority to enter into and perform this Agreement; (ii) this Agreement constitutes a valid and binding obligation of such party enforceable in accordance with its terms; (iii) the making of this Agreement by such party does not violate any agreement, right or obligation existing between such party and any third party; (iv) the marketing and promotional activities in Exhibit A shall not infringe or misappropriate third party rights, including, without limitation, any patent, trade name, trademark, copyright or other intellectual property or proprietary right and shall not invade or violate any right of privacy, publicity, personal or proprietary right, or other common law or statutory right, nor defame any person or entity in the United States and European Union (the "Principal Territories"), and to the knowledge of such party, outside the Principal Territories; provided that such party makes no representations regarding the Licensed Property or any other materials provided by Licensor as contemplated under this Agreement. b. DISCLAIMER. EXCEPT AS EXPRESSLY STATED IN THIS AGREEMENT, NEITHER PARTY MAKES ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND WITH RESPECT TO THE SUBJECT MATTER HEREOF, INCLUDING BUT NOT LIMITED TO THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR ANY LEVEL OF BUSINESS OR SERVICE THAT MAY RESULT FROM THIS AGREEMENT, OR ANY WARRANTY OR CONDITION ARISING FROM ANY COURSE OF DEALING, COURSE OF PERFORMANCE OR USAGE IN THE INDUSTRY. c. LIMITATIONS ON LIABILITY/NO INJUNCTIVE RELIEF. EXCEPT IN CASES OF GROSS NEGLIGENCE, WILLFUL MISCONDUCT OR FRAUD, INDEMNIFICATION CLAIMS UNDER SECTION 5 OR BREACHES OF SECTION 2 (TRADEMARKS), 8 (CONFIDENTIALITY), OR 9 (NO AGENCY RELATIONSHIP), IN NO EVENT SHALL EITHER PARTY OR ITS OFFICERS, DIRECTORS, OR EMPLOYEES BE LIABLE TO THE OTHER PARTY IN CONNECTION WITH THE SUBJECT MATTER HEREOF, FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES OF ANY KIND, LOST PROFITS OR LOST REVENUE, WHETHER ARISING IN CONTRACT, TORT, NEGLIGENCE, STATUTE, OR OTHERWISE, EVEN IF ADVISED OF THE POSSIBILITY THEREOF. IN NO EVENT SHALL THE NON-BREACHING PARTY BE ENTITLED TO EQUITABLE OR INJUNCTIVE RELIEF OF ANY KIND. + +6 + +Source: ALLIED ESPORTS ENTERTAINMENT, INC., 8-K, 8/15/2019 + + + + + +5. INDEMNIFICATION a. WPT shall indemnify, defend, and hold harmless Zynga and its Affiliates, and the respective directors, officers and employees of the foregoing (the "Zynga Indemnified Parties") from and against any and all third party claims, actions, suits, costs, liabilities, judgments, obligations, losses, penalties, expenses or damages (including, without limitation, reasonable legal fees and expenses) of whatsoever kind and nature imposed on, incurred by or asserted against any of the Zynga Indemnified Parties arising out of: (i) any breach or alleged breach by WPT of any representation, warranty or covenant made, by WPT pursuant to this Agreement; or (ii) WPT's non-compliance with any applicable federal, state or local laws or with any applicable regulations in connection with its performance of this Agreement. b. Zynga shall indemnify, defend, and hold harmless WPT and its Affiliates, and the respective directors, officers and employees of the foregoing (the "WPT Indemnified Parties") from and against any and all third party claims, actions, suits, costs, liabilities, judgments, obligations, losses, penalties, expenses or damages (including, without limitation, reasonable legal fees and expenses) of whatsoever kind and nature imposed on, incurred by or asserted against any of the WPT Indemnified Parties arising out: (i) any breach or alleged breach by Zynga of any representation, warranty or covenant made by Zynga pursuant to this Agreement; or (ii) Zynga's non-compliance with any applicable federal, state or local laws or with any applicable regulations in connection with its performance of this Agreement. c. In order to seek or receive indemnification hereunder in cases involving third-party claims the party seeking indemnification (the "Indemnified Party") must have promptly notified the other (the "Indemnifying Party") of any claim or litigation of which the Indemnified Party is aware and to which the indemnification relates; and the Indemnified Party must reasonably cooperate with Indemnifying Party in the defense or settlement of such claim or litigation. With regard to any claim or litigation to which the Indemnifying Party itself is not a party, the Indemnifying Party must have afforded the Indemnified Party the opportunity to participate in any compromise, settlement, litigation or other resolution or disposition of such claim or litigation. 6. TERMINATION a. Each party shall have the right at any time to terminate this Agreement without prejudice to any rights which it may have, whether pursuant to the provisions of this Agreement or otherwise in law or in equity or otherwise, upon the occurrence of any one or more of the following events: i. The other party breaches or fails to perform any of its material obligations provided for in this Agreement; ii. The other party is unable to pay its debts when due, or makes any assignment for the benefit of creditors, or files any petition under the bankruptcy or insolvency laws of any jurisdiction, county or place, or has or suffers a receiver or trustee to be appointed for its business or property, or is adjudicated a bankrupt or an insolvent; or iii. The other party asserts any rights in or to the terminating party's intellectual property in violation of this Agreement. a. In the event that any of these events of default should occur and a party elects to exercise its right to terminate this Agreement, such party shall give notice of termination in writing to the other party, which notice shall specify in reasonable detail the event(s) of default that give rise to such termination. The other party shall have thirty (30) days from the effective date of such notice in which to correct any such default(s) (except those which are not curable), and failing such correction by the end of such thirty (30) day cure period, this Agreement shall thereupon immediately terminate. 7. RIGHTS AND OBLIGATIONS UPON TERMINATION OR EXPIRATION. Upon expiration or termination of this Agreement: a. All rights granted to WPT by Zynga shall immediately revert to Zynga, and WPT shall promptly cease any and all marketing and promotional activities using Zynga's Licensed Property. b. All rights granted to Zynga by WPT shall immediately revert to WPT, and Zynga shall promptly cease any and all marketing and promotional activities using WPT's Licensed Property. c. Notwithstanding the foregoing, for each end user that previously downloaded a Zynga game that includes WPT's Licensed Property, and stored such Zynga game within such end user's device, WPT grants a license and right to continue to use, activate, operate, perform, store, use and display that game on the end user's device in perpetuity at no additional charge; provided, however, that Zynga shall use best efforts to offer end users updates to its games which no longer include WPT's Licensed Property after the Term. d. Notwithstanding any termination of this Agreement, nothing herein will obligate Zynga, any users of a Zynga game that includes WPT's Licensed Property or any third party platform or distribution partners to remove from the publicly available content regarding Zynga services or any user accounts with Zynga, any of the references to user interactions, experience points, achievements, item purchases or other engagements or metrics in the Zynga game(s) that were generated prior to the expiration or termination of this Agreement. + +7 + +Source: ALLIED ESPORTS ENTERTAINMENT, INC., 8-K, 8/15/2019 + + + + + +e. Notwithstanding any termination of this Agreement, any Approved Content that includes Zynga's Licensed Property may remain in perpetuity in any media in which such Licensed Property was integrated into during the Term (e.g., televised WPT Tournaments or WPT Invitational Tournaments, social media posts, repurposed integrations for "best of" television programs) or for historical purposes (e.g., reference on WPT's website that Zynga-sponsored tour events took place as part of the tour). f. Sections 1, 3-7, and 8-10 of the Additional Provisions shall survive termination or expiration of this Agreement. 8. CONFIDENTIALITY. The parties acknowledge and agree that the subject matter of this Agreement constitutes "Business Purpose" and this Agreement and any Exhibits hereunder are "Confidential Information" of the parties as defined as "Information" in the Non- Disclosure Agreement between the parties dated August 24, 2017, and accordingly the restrictions relating to confidentiality and use thereof provided in the Non-Disclosure Agreement apply to any party's Confidential Information disclosed pursuant to this Agreement. In the event of a conflict between the Non-Disclosure Agreement and this Agreement, the terms of this Agreement will govern. 9. INDEPENDENT CONTRACTORS. The parties are independent contractors with respect to each other and nothing herein shall create any association, partnership, joint venture or agency relationship between them. Neither party shall have the right to obligate or bind the other party in any manner whatsoever, and nothing herein contained shall give, or is intended to give, any rights of any kind to any third persons. 10. MISCELLANEOUS a. Insurance. Each party agrees to carry liability insurance sufficient to cover the risks posed under this Agreement. b. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original and all of which shall constitute together but one and the same document. c. Notices. All notices and other communications given hereunder shall be in writing and shall be sent by courier service, express mail, personal delivery or mail to the respective addresses of the parties set forth above (or at such other address as such party may designate by notice to the other party). A copy of any notice to WPT shall also be sent to WPT Enterprises, Inc., ATTN: Legal, 1920 Main Street, Suite 1150, Irvine, CA 92614. A copy of any notice to Zynga shall also be sent to Office of the General Counsel, Zynga Inc., 699 8th Street, San Francisco, CA 94103 with a copy to legalnotices@zynga.com. Notice shall be deemed given as follows: upon delivery if sent by courier service, express mail or personal delivery; and five (5) days after the date of mailing, postage prepaid, certified or registered mail if sent by mail. d. Entire Agreement. This Agreement contains the full and complete understanding between the parties hereto with respect to the license granted hereunder and supersedes all prior agreements and understandings, whether written or oral, pertaining thereto. This Agreement cannot be modified except by a written instrument signed by each party hereto. e. Waiver. No waiver of any term or condition of this Agreement shall be construed as a waiver of any other term or condition and no waiver of any default under this Agreement shall be construed as a waiver of any other default. f. Force Majeure. In the event that either party is prevented from engaging in the marketing and promotional activities in Exhibit A manufacturing, distributing or selling the Licensed Property because of any act of God; unavoidable accident; fire, epidemic; strike, lockout, or other labor dispute; war, riot or civil commotion; act of public enemy; enactment of any rule, law, order or act of government or governmental instrumentality (whether federal, state, local or foreign); or other cause beyond such party's control, and such condition continues for a period of two (2) months or more, either party hereto shall have the right to terminate this Agreement effective at any time during the continuation of such condition by giving the other party at least thirty (30) days' notice to such effect. In such event, all payments made shall become immediately due and payable and this Agreement shall be automatically terminated. g. Governing Law and Forum. This Agreement will for all purposes be governed by and interpreted in accordance with the laws of the State of California without giving effect to any conflict of laws principles that require the application of the laws of a different state. Each of the parties hereto (i) irrevocably agrees that the federal and state courts in the Northern District of California shall have sole and exclusive jurisdiction over any suit or other proceeding arising out of or based upon this Agreement, (ii) submits to the venue and jurisdiction of such courts, and (iii) irrevocably consents to personal jurisdiction by such courts. h. Assignment. This Agreement shall bind and inure to the benefit of each party, its successors and assigns. Without the prior written consent of the other party, neither party shall assign or transfer any of its rights or obligations hereunder, in whole or in part, to any third party, and any purported assignment without such prior written consent shall be null and void and of no force and effect; except that notice, but no consent shall be required for such assignment or transfer in connection with an internal reorganization or sale of the transferring party, including by merger or other business combination, or a sale of substantially all of the assets of the transferring party. None of either party's rights hereunder shall devolve by operation of law or otherwise upon any receiver, liquidator, trustee or other party. i. Severability. In case any one or more of the terms contained in this Agreement shall be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining terms shall not in any way be affected or impaired thereby. The parties shall endeavor in good faith negotiations to replace the invalid, illegal or unenforceable terms with valid terms the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable terms. + +8 + +Source: ALLIED ESPORTS ENTERTAINMENT, INC., 8-K, 8/15/2019 + + + + + +EXHIBIT A MARKETING AND PROMOTIONAL ACTIVITIES (the parties mutually agree to provide additional details and commitments) BY WPT: WPT shall promote the Zynga brand in the following activities: ● Prominent display of the Zynga or Zynga Poker brand in WPT Tournaments and WPT Invitational Tournaments, subject to venue approval, network approval and inventory space given existing sponsorship deals BY ZYNGA: Zynga shall promote the WPT brand in the following activities: ● Creation of a WPT-branded Zynga Poker Tournament Mode playable in the Zynga Poker game or other such use of the WPT brand on the Zynga platform as Zynga determines + +9 + +Source: ALLIED ESPORTS ENTERTAINMENT, INC., 8-K, 8/15/2019 + + + + + +EXHIBIT B LICENSED PROPERTY (the parties mutually agree to provide additional details on allowable IP) WPT MARKS: ● WPT® ● WORLD POKER TOUR® ZYNGA MARKS: ● ZYNGA® ● ZYNGA POKER® + +10 + +Source: ALLIED ESPORTS ENTERTAINMENT, INC., 8-K, 8/15/2019 \ No newline at end of file diff --git a/full_contract_txt/AlliedEsportsEntertainmentInc_20190815_8-K_EX-10.34_11788308_EX-10.34_Sponsorship Agreement.txt b/full_contract_txt/AlliedEsportsEntertainmentInc_20190815_8-K_EX-10.34_11788308_EX-10.34_Sponsorship Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..9e4b0d874faebf6017ef55afed79c93d44c1d8d9 --- /dev/null +++ b/full_contract_txt/AlliedEsportsEntertainmentInc_20190815_8-K_EX-10.34_11788308_EX-10.34_Sponsorship Agreement.txt @@ -0,0 +1,97 @@ +Exhibit 10.34 EVENT SPONSORSHIP AGREEMENT This Event Sponsorship Agreement ("Agreement") is made and effective as of February 1, 2019 (the "Effective Date"), by and between Newegg Inc. ("Newegg"), a Delaware corporation, and Allied Esports International, Inc., a Nevada corporation ("Allied"). Newegg and Allied are hereinafter referred to jointly as the "Parties" and each as a "Party." BACKGROUND A. Newegg, an online retailer of items including computer hardware and consumer electronics, is in the business of developing, marketing, selling and supporting gaming accessories and memory products, and proposes to provide promotional and product support as a sponsor for the HyperX Esports Arena Las Vegas ("the Arena"). B. Allied is an esports organization that owns and controls the Commercial Rights (as hereinafter defined) to the Arena and wishes to grant rights to Newegg in respect of Newegg's sponsorship of the Arena pursuant to this Agreement. C. Each of the Parties undertakes obligations to the other Party as provided in this Agreement. For valuable consideration received, including the Parties' respective covenants in this Agreement, the Parties hereby agree as follows: 1. Scope of this Agreement. Newegg agrees to provide certain financial sponsorship, including fees to Allied in connection with the Arena and Allied agrees to grant certain rights to Newegg, all as described in this Agreement. 2. Certain Definitions. When used in this Agreement, the following terms have the following meanings: 2.1 "Commercial Rights" means any and all rights of a commercial nature connected with the Arena, including image rights, broadcasting rights, new media rights, endorsement and official supplier rights, sponsorship rights, merchandising rights, licensing rights, advertising rights, hospitality rights and all intellectual property rights in and to the foregoing. 2.2 "Including," "Includes" and similar words means "including but not limited to" and shall mean in all contexts "without limitation." 2.3 "Intellectual Property Rights" means rights protecting or governing intellectual property rights, including all now known and hereafter existing: (i) copyright and related rights in original works of authorship and all rights to use, commercialize, and exploit such rights; (ii) rights on trademarks, service marks, trade names, logos, trade dress, indicia of origin, and other commercial names; (iii) trade secret rights including, without limitation, all rights in confidential information, trade secret, know-how and other proprietary and/or confidential materials and information, whether arising by law or contract; (iv) patent rights, rights in patentable inventions and processes, utility models, designs, algorithms and other industrial property rights; and (v) other intellectual property rights and proprietary rights of every kind and nature throughout the world, whether arising by operation of law, by contract, by license or otherwise in any form, media or technology now known or later developed. 2.4 "Newegg Marks" means the Newegg trademarks and logos set out in Schedule 1, together with any accompanying artwork, design, slogan, text and other collateral marketing signs of Newegg. 2.5 "Allied Marks" means Allied's trademarks to be used for all promotion, advertising and marketing of the Arena, as set out in Schedule 2, including the texts, slogans, logos, trademarks, images, photographs, information, audio and video materials and other materials owned (or licensed from a third party) by Allied and used in or in connection with the Arena, and including Allied's name and the names used for any parts of the Arena. + +1 + +Source: ALLIED ESPORTS ENTERTAINMENT, INC., 8-K, 8/15/2019 + + + + + +2.6 "Sponsorship Benefits" means the benefits Newegg will provide Allied, including the license granted in Section 6.1 and the fee stated in Schedule 3. 2.7 "Sponsorship Rights" means the bundle of rights, services and deliverables Allied will provide to Newegg as set out in Schedule 4, which includes the license of, and rights with respect to, Allied Marks granted in Section 5. 2.8 "Technology E-Commerce (or E-Tail)" means the Arena partnership category that Allied is granting to Newegg and is defined as including technology-focused products in categories including computer systems, components, electronics, gaming, networking, office solutions, software & services, automotive and industrial, home and tools, health & sports, and hobbies and toys. For purposes of clarity, this does not include apparel and accessories. 2.9 "Term" has the meaning given in Section 3 of this Agreement. 2.10 "Sponsorship Fee" has the meaning given in Schedule 3 of this Agreement. 2.11 "Venue" means the premises where events wi ll occur. 3. Term of this Agreement. This Agreement shall be valid for five (5) years from February 1, 2019 through January 31, 2024 unless this Agreement is terminated earlier pursuant to Section 14 (the "Term"). For the purpose of clarity, the second year of this Agreement starts February 1, 2020, and the third year of this Agreement starts February 1, 2021 the fourth year of this Agreement starts February 1, 2022, and the fifth and final year of this Agreement starts February 1, 2023. 4. Allied Obligations and Newegg Sponsorship Obligations 4.1 Allied shall provide, by the license granted in Section 5.1 and otherwise as appropriate, to or for the benefit of Newegg, the Sponsorship Rights, including generally providing advertising space in all of Allied's media and participation in Allied's marketing activities relating to the Arena 4.2 Newegg shall provide to Allied the Sponsorship Benefits set out in Schedule 3, including paying the Sponsorship Fee as provided in that Schedule. Any value-added, goods and services, or similar tax or duty imposed by any government or tax authority on any Sponsorship Benefit shall be borne solely by Allied. 4.3 During third-party event buyouts, Newegg's sponsorship benefits will run at the discretion of the third-party and may not be included for select events. Newegg's pass-through rights are limited to both Newegg and Allied-owned and operated events. 5. Allied's License to Newegg 5.1 Allied grants Newegg a non-exclusive, royalty-free, non-assignable, non-transferable, and non- sublicensable worldwide license to use, publicly display, transmit, broadcast, stream, distribute and reproduce the Allied Marks in all approved forms and in manners for the purposes of this Agreement during the Term. Allied acknowledges and agrees that Newegg shall not pay any fees or royalties for the license of the Allied Marks, except the Sponsorship Fee specified in Schedule 3. 5.2 Without limitation of any other provision of this Agreement, failure by Allied to comply with the provisions of Sections 5.1 shall be deemed as a material breach of this Agreement and Newegg has the right to terminate this Agreement subject first to the cure provisions in Section 14.1 and be discharged from any further obligation to pay the Sponsorship Fee. If any portion of the Sponsorship Fee shall have previously been paid for any period following such termination by Newegg, the Sponsorship Fee shall be prorated and Allied shall immediately refund the portion corresponding to the unused period of the Term. + +2 + +Source: ALLIED ESPORTS ENTERTAINMENT, INC., 8-K, 8/15/2019 + + + + + +6. Newegg's License to Allied; Allied's Obligations Regarding Newegg Marks and Products 6.1 Newegg grants Allied a revocable, non-transferrable, non-assignable (whether voluntarily, or as a result of a change of control, or by operation of law), non-sublicensable, non-exclusive and limited license to use, during the Term, the Newegg Marks solely in connection with Allied's marketing and conduct of the Arena. 6.2 Allied acknowledges and agrees that Newegg has valuable goodwill and reputation in the Newegg Marks and that Newegg is and shall be at all times the sole and exclusive owner of rights, including Intellectual Property Rights, in and related to the Newegg Marks. Allied does not acquire any right, title, or interest in or to the Newegg Marks by virtue of the limited license granted in Section 6.1, or through Allied's permitted use of the Newegg Marks, other than the right to use such Newegg Marks in accordance with that license. Allied acknowledges that its use of the Newegg Marks pursuant to this Agreement, and all goodwill associated with such use, shall inure exclusively to the benefit of Newegg. Allied further acknowledges and agrees that Newegg shall have sole control and final editorial say, in Newegg's sole discretion, over the marketing/promotion, appearance, design, layout, placement, and presentation of Newegg's Products, including all packaging, advertisements and other marketing and promotional materials relating to the Newegg Products. 6.3 Allied shall use the Newegg Marks only in strict compliance with the terms and conditions of this Agreement. Allied's use of the Newegg Marks (a) shall be subject to Newegg's right of review and approval, and prior direction and control, to be exercised in Newegg's sole discretion, and (b) shall, at all times, meet or exceed Newegg's trademark-usage guidelines and quality standards which may be provided by Newegg from time to time ("Acceptable Quality Standards"). Without limiting any other provision of this Section 6.3, if at any time Newegg reasonably determines that Allied's use of the Newegg Marks fails to comply with this Agreement or to conform to the Acceptable Quality Standards, Allied shall, within five (5) days of receipt of notice from Newegg, correct its use of the Newegg Marks so that its use is in compliance with this Agreement and the Acceptable Quality Standards or cease using, and remove, the Newegg Marks from all of Allied's videos, streams and other publications in all media ("Allied's Correction Action"). Allied's obligation to take and complete Allied's Correction Action shall survive any expiration or termination of this Agreement. 6.4 Allied shall not at any time do, or cause to be done, directly or indirectly any act that may impair or tarnish any part of Newegg's goodwill and reputation in the Newegg Marks and the Newegg Products. Without limiting the preceding sentence, Allied agrees not to use the Newegg Marks in any advertising materials or conduct any activities in a manner that may be seen to unreasonably modify, alter, detract from or impair the integrity, character, or dignity of the Newegg Marks or reflect unfavorably upon Newegg or Newegg Products. 6.5 In exercise of the rights granted in Section 6.1, Allied shall always use the Newegg Marks in a manner that significantly distinguishes them from any surrounding text or other logo or source designation. Except as may be expressly authorized in writing by Newegg, Allied shall not use the Newegg Marks as a co-brand with any third-party mark. Allied agrees to use the Newegg Marks only in the form and with only the content provided by Newegg. The Newegg Marks may not be altered in any manner. The Newegg Marks must include a ™ or ® symbol as part of the Newegg Marks, as provided by Newegg. Where practicable, the following trademark notice must appear in close proximity to the Newegg Marks and the ownership of the Newegg Marks must be identified: "Newegg and the Newegg logo are trademarks of Newegg Incorporated." 7. Exclusivity of Sponsorship Rights for Newegg 7.1 In all of Allied's actions and publications (in all media and formats) in connection with the marketing and conducting of the Events, where possible and appropriate, Allied shall where reasonably practicable communicate that Newegg is the exclusive sponsor of the Arena for the technology e-commerce and online retailer categories. 7.2 Allied shall not endorse, or permit the marketing of any other company whose principal business is as an e-commerce provider at or in connection with the Arena. For purposes of clarity, this is not meant to prohibit incidental third-party endorsements not controlled by Allied such as individual player and team sponsorships of participants in events at the Arena. + +3 + +Source: ALLIED ESPORTS ENTERTAINMENT, INC., 8-K, 8/15/2019 + + + + + +8. Refund or Reduction of Sponsorship Fee 8.1 Without limitation of other rights of Newegg under this Agreement, the Parties agree to negotiate a reasonable reduction and, where applicable, the refund of the Sponsorship Fee to reflect any material restriction in the benefit or value of the Sponsorship Rights to Newegg, including as a result of any change in any laws or regulatory provisions which has an adverse impact on the value of the Sponsorship Rights. 8.2 If Allied fails to perform or provide the Sponsorship Rights in accordance with the terms of this Agreement, Newegg shall, without limiting its other rights or remedies, have one or more of the following rights: (a) to refuse to accept any subsequent performance of the Sponsorship Rights which Allied attempts to make; and (b) where Newegg has paid in advance for Sponsorship Rights that have not been provided by Allied, to have such sums refunded by Allied. 9. Certain Material Covenants of Allied 9.1 Allied shall organize and host events, both online and at the Venue, at its sole cost and expense in accordance with the terms of this Agreement, and perform and cause to be performed the Sponsorship Rights with reasonable skill and care and in accordance with generally recognized commercial practices and standards. 9.2 Allied shall use its best endeavours to deliver or ensure the delivery to Newegg of each and all of the Sponsorship Rights. Without limitation of the preceding sentence or any other provision of this Agreement, Allied shall identify and name Newegg as a Founding Partner, and as the exclusive Technology E-Commerce (or E-tail) Partner, of the Arena and in all of Allied's marketing materials in connection with the Arena where reasonably practicable. 9.3 Allied shall ensure that all relevant Newegg signage and advertising to be delivered as part of the Sponsorship Rights is properly in place, and operational and not concealed or obscured from view. 9.4 Allied confirms that, whenever possible, it will ensure that Newegg Marks will be present in accordance with this Agreement and that Newegg Marks are incorporated into all promotional, advertising and publicity material published in connection with the Arena where reasonably practicable. 9.5 Allied shall comply with: (a) all applicable laws, rules, regulations, regulatory policies, guidelines or codes applicable to the Arena and Allied's activities to be carried out in performing its obligations in accordance with this Agreement, including all such guidelines and codes issued by statutory, regulatory and industry bodies, and further, will not pay, deliver, or offer or promise to pay or deliver, any funds or other item of value excluding the Products, either directly or through any third party, to any state or federal governmental official for any reason whatsoever other than the payment of statutory and administrative fees, charges and taxes that are due from Allied as a result of its performance under this Agreement; (b) the terms and conditions, rules of conduct and/or community guidelines of any other online platform (including any advertising policies); and (c) any conditions attached to any licences or consents issued in connection with the Arena including regarding health and safety and crowd security measures at the Arena. 9.6 Allied accepts that, regardless of its obligations to promote the Arena within the terms of this Agreement, Newegg shall be entitled to advertise, publicise, promote and otherwise commercially exploit its own Products, goodwill and reputation through Newegg's association with the Arena on and subject to the terms of this Agreement throughout and after the Term. + +4 + +Source: ALLIED ESPORTS ENTERTAINMENT, INC., 8-K, 8/15/2019 + + + + + +9.7 Allied shall make available to Newegg in connection with the Arena Allied's Marks in order for Newegg to exploit and make best use of the Sponsorship Rights. 9.8 For the avoidance of doubt, Allied shall be at all times responsible for its employees', agents' and sub- contractors' compliance with the obligations set out in this Section 9. 10. Certain Material Covenants of Newegg 10.1 Newegg shall exercise the Sponsorship Rights in accordance with the terms of this Agreement. For the avoidance of doubt, Newegg shall not be entitled to use or exploit any of the Commercial Rights other than the Sponsorship Rights in any way except in accordance with this Agreement. 10.2 Newegg shall provide to Allied, at Newegg's cost and expense, all necessary materials including artwork of Newegg Marks in a format and within print deadlines reasonably specified by Allied in order for it to be reproduced under the control of Allied for the fulfilment of the Sponsorship Rights. 11. Representations and Warranties 11.1 Each Party represents and warrants to the other Party that it has, and will maintain throughout the Term, the right, power and authority to enter into and perform this Agreement and to grant the licenses as provided in this Agreement; that it has procured all rights, permissions and approvals necessary for the performance of its obligations, including the grant of licenses, in this Agreement; and that it is not bound by any agreement with any third party that adversely affects its performance of its obligations in, or that would preclude it from fully complying with the provisions of, this Agreement. 11.2 Each Party covenants that it shall not make, publish or communicate to any person or entity in any online or other public forum any defamatory, misleading or disparaging remarks, comments or statements concerning (a) the other Party or any of its affiliates, or any of such Party's or its affiliates' respective employees, officers, directors, agents, officials, equity holders, investors or sponsors, or (b) any software, products or services of the other Party or any affiliate. 11.3 Each Party represents and warrants that it is not a government-owned entity and that neither its management personnel nor any of its employees are government officials. 11.4 Newegg represents and warrants that it holds the necessary rights to permit Allied to use Newegg's Marks in accordance with the license granted in Section 6.1; and that to Newegg's actual knowledge the use, reproduction, distribution or transmission of Newegg's Marks will not violate any criminal laws, or any rights of any third parties, including, but not limited to, such violations as infringement or misappropriation of any copyright, patent, trademark, trade secret, music, image, or other proprietary or property right, false advertising, unfair competition, defamation, invasion of privacy or rights of celebrity, violation of any anti-discrimination law or regulation, or any other right of any person or entity. 11.5 Allied represents and warrants that it holds the necessary rights to permit Newegg to use Allied's Marks and accept the Commercial Rights in accordance with the Sections 5.1 and 9.7; and that to Allied's actual knowledge the use, reproduction, distribution or transmission of Allied's Marks will not violate any criminal laws, or any rights of any third parties, including, but not limited to, such violations as infringement or misappropriation of any copyright, patent, trademark, trade secret, music, image, or other proprietary or property right, false advertising, unfair competition, defamation, invasion of privacy or rights of celebrity, violation of any anti-discrimination law or regulation, or any other right of any person or entity. + +5 + +Source: ALLIED ESPORTS ENTERTAINMENT, INC., 8-K, 8/15/2019 + + + + + +12. Indemnity and Liability 12.1 Each Party ("Indemnitor") will defend, indemnify and hold the other Party (including associated officers, directors, shareholders, employees, agents and affiliates) (cumulatively, "Indemnitee") harmless from and against any and all losses, damages, claims, liabilities and expenses (including reasonable legal fees), suffered or incurred as a result of or in connection with any claim, suit, action, demand, or proceeding brought against Indemnitee based upon (a) a claim of a failure to perform, or a breach by Indemnitor of, any obligation, warranty, representation or covenant in this Agreement; (b) a claim of personal injury or property damage arising out of the fault or negligence of Indemnitor, its representatives, agents, or employees; or (c) a claim of infringement or misappropriation of any patent, trademark, copyright or other proprietary right held by any third party. 12.2 EXCEPTING ONLY CLAIMS MADE PURSUANT TO SECTION 12.1, IN NO EVENT WILL EITHER PARTY BE LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OF ANY KIND, INCLUDING ANY LOST PROFITS, LOST REVENUES OR LOST SAVINGS, ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT AND/OR THE PRODUCTS, WHETHER IN CONTRACT, TORT, STRICT LIABILITY OR OTHERWISE, EVEN IF THE PARTY HAS BEEN ADVISED, KNOWS OR SHOULD KNOW, OR IS OTHERWISE AWARE OF THE POSSIBILITY OF SUCH DAMAGES. 13. Confidentiality 13.1 Confidential Information. Each Party (the "Disclosing Party") may from time to time during the Term of this Agreement disclose to the other Party (the "Receiving Party") certain information regarding the Disclosing Party's business, including, without limitation, technical, marketing, financial, employee, planning and other confidential or proprietary information, which information is either marked as confidential or proprietary (or bears a similar legend) or which a reasonable person would understand to be confidential given the circumstance and nature of the disclosure ("Confidential Information"), whether disclosed orally or in writing. Without limiting the foregoing, Newegg's Confidential Information shall include information and materials provided by Newegg in connection with this Agreement. Confidential Information does not include information that: (i) is in the Receiving Party's possession at the time of disclosure as shown by credible evidence; (ii) before or after it has been disclosed to the Receiving Party, enters the public domain, not as a result of any action or inaction of the Receiving Party; (iii) is approved for release by written authorization of the Disclosing Party; (iv) is disclosed to the Receiving Party by a third party not in violation of any obligation of confidentiality; or (v) is independently developed by the Receiving Party without reference to Confidential Information of the Disclosing Party, as evidenced by such Party's written records. 13.2 Protection of Confidential Information. The Receiving Party will not use, and will cause its Representatives not to use, any Confidential Information of the Disclosing Party for any purpose other than performing its obligations or exercising its rights under this Agreement, and will not disclose the Confidential Information of the Disclosing Party to any party other than Receiving Party's employees, agents, directors, officers, auditors, attorneys, other professional advisors, regulators and contractors (collectively, the "Representatives") on a "need to know" basis, provided such Representatives are under a contractual obligation with Receiving Party to maintain the confidentiality of such Confidential Information, which obligation is consistent with, and no less protective of Confidential Information, than the terms of this Section 13. The Receiving Party will protect the Disclosing Party's Confidential Information from unauthorized use, access, or disclosure in the same manner as the Receiving Party protects its own confidential or proprietary information of a similar nature and with no less than reasonable care. 13.3 Confidentiality of Agreement. Other than as permitted in this Agreement, neither Party will disclose any terms of this Agreement except: (a) as required by law, or (b) pursuant to a mutually agreeable press release. Press releases concerning Newegg's sponsorship of the Events will only be published after written preapproval by both Parties, provided that if for any reason the Parties cannot agree about a specific release, Newegg shall have the ultimate decision-making right concerning whether to issue any press releases about this Agreement or Newegg's sponsorship of the Events. 13.4 Return of Confidential Information. Upon any termination or expiration of this Agreement, Allied shall deliver to Newegg all originals and copies of any material in any form containing or representing Newegg's Marks and other Confidential Information of Newegg or, at Newegg's request, shall destroy the same and provide Newegg a certification of the destruction. 13.5 Expiry or termination of this Agreement shall not affect any accrued rights, liabilities or obligations dealing with protection of the Confidential Information of either Party. The expiration or termination of this Agreement shall also not affect the obligations of this Section 13 with respect to any of Newegg's Confidential Information that is protected as a trade secret, which shall remain covered by this Section 13 for the duration of the trade secret. + +6 + +Source: ALLIED ESPORTS ENTERTAINMENT, INC., 8-K, 8/15/2019 + + + + + +14. Expiry or Termination 14.1 Failure by Allied to perform and comply with any of its obligations in sections 5, 6, 7, 9, 11, 12 and 13 of this Agreement shall be deemed a material breach of this Agreement and Newegg shall have the right to terminate this Agreement immediately if Allied fails to cure the breach within fifteen (15) days following Newegg's written notice of the breach. 14.2 Each Party may also terminate the Agreement for convenience after Contract Year 2 (as defined in Section 14.4) by providing written notice to the other Party at least sixty (60) calendar days prior to the effective date of such termination 14.3 Except as provided in (i) Section 5.2 for immediate termination subject to cure provisions in Section 14.1 , (ii) Section 14.1 for termination following notice, and (iii) Section 14.5 for immediate termination without notice, if either Party defaults in the performance, or breaches any provision, of this Agreement, then the non- defaulting Party may give written notice to the defaulting Party requiring the default or breach to be cured, and if the default or breach is not cured within fifteen (15) days of the receipt of the notice, this Agreement shall, without prejudice to any accrued right, automatically terminate at the end of the fifteen (15) day period. 14.4 During the first two (2) contract years of Term (i.e., February 1, 2019 through January 31, 2020 ("Contract Year 1") and February 1, 2020 through January 31, 2021 ("Contract Year 2")) and notwithstanding any other provisions of this Agreement, if Newegg defaults on or breaches any its obligations under the Agreement for any reason and fails to cure such default or breach within fifteen (15) days following receipt of Allied's written notice of such default or breach, the Parties acknowledge and agree that (i) Newegg shall remain responsible and/or liable for the full payment or, if applicable, the remaining portion of the Sponsorship Fee for Contract Year 1 and Contract Year 2, and (ii) Allied shall have the right to pursue any additional legal and equitable remedies in connection with the Agreement. 14.5 This Agreement shall terminate immediately, without any requirement of notice, (i) upon the institution against or the filing by either Party of insolvency, receivership or bankruptcy proceedings; or (ii) upon either Party making an assignment for the benefit of its creditors. 14.6 Upon termination for any reason, Newegg shall, without prejudice to its other rights, be immediately discharged of all obligations to pay any further Sponsorship Fees not yet rendered or to provide any further Sponsorship Benefits that have not already been delivered to Allied. Further, if Sponsorship Fees have been paid in advance, the Sponsorship Fee shall be prorated through the date of termination and Allied shall refund the portion corresponding to the unused period of the Term. 14.7 Notwithstanding the expiry or termination of this Agreement, both Parties shall not, and shall ensure that its Representatives shall not, do any of the following: (a) make any form of representation (whether express or implied) that Allied remains under the sponsorship of or in public association with Newegg; or (b) commit any act that would reasonably be seen as disparaging (whether expressly or implicitly) the Newegg and Allied brand names, reputations or any of their respective products or offerings. 14.8 Upon expiry or termination of this Agreement, Newegg's license granted to Allied in Section 6.1 and all other rights granted to Allied in this Agreement shall terminate and Allied shall cease any and all uses of Newegg's Marks. 14.9 All provisions of this Agreement that by their nature extend beyond expiry or termination of this Agreement shall remain in full force and effect notwithstanding the expiry or termination of this Agreement. + +7 + +Source: ALLIED ESPORTS ENTERTAINMENT, INC., 8-K, 8/15/2019 + + + + + +15. Miscellaneous 15.1 Relationship. The relationship of the Parties is solely that of independent contractors, and each Party will represent itself to any third parties only as such. Neither Party has the power to bind, represent or act for the other Party. The Parties have no agency, partnership, joint venture or fiduciary duties to each other. 15.2 Publicity. The Parties shall co-operate in good faith on all announcements and press releases regarding this Agreement and Newegg's sponsorship arrangement with Allied and Newegg shall determine in its sole discretion whether any such announcement or press release shall be published. Press releases concerning Newegg's sponsorship of the Arena will only be published after written preapproval by both Parties and Newegg shall have the final decision making right concerning any press releases regarding Newegg's sponsorship arrangement with Allied. 15.3 Expenses. Each Party shall be responsible for its own costs and expenses in connection with all matters relating to the negotiation and performance of this Agreement, unless otherwise agreed in writing by the Parties. 15.4 Assignment. Neither Newegg nor Allied shall have the right or power to assign or transfer any part of its rights or obligations under this Agreement without the prior consent in writing of the other Party. 15.5 Injunctive Relief. Each Party agrees that money damages for a breach of its obligations under the provisions of this Agreement protecting Confidential Information and those governing Intellectual Property Rights may be an inadequate remedy for the loss suffered by the other Party and the other Party shall have the right to obtain injunctive relief from any court of competent jurisdiction in order to prevent the breach, or further breach as the case may be, of any such obligation, without limiting the other Party's right to pursue any and all remedies provided in such event by law or equity. 15.6 Non-Waiver. All waivers must be in writing. No failure or delay by a Party in exercising any right, power or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege preclude further exercise thereof or of any other right, power or privilege. 15.7 Severability. If any provision of this Agreement is found by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the provision shall be modified as necessary to conform to such laws or, if such modification would be inconsistent with the intent of the Parties, the provision shall be severed from this Agreement, and this Agreement shall be interpreted without reference to the severed provision with the remaining provisions continuing with full force and effect. 15.8 Entire Agreement. This Agreement, including the attached Schedules, which are incorporated herein in their entirety, constitutes the entire agreement of the Parties with respect to the subject matter hereof, and supersedes all prior agreements, representations, understandings, written or oral. No amendment or modification of any provision of this Agreement shall be binding upon the Parties unless made by a written instrument signed by a duly authorized representative of each Party. 15.9 Notice. Any notice required under this Agreement shall be given in writing, in the English language and sent to the address or e-mail address of the other Party as set out below its signature of this Agreement, or such other address or email address as shall have been notified to the other Party in accordance with this provision. Notices shall be sent by registered post or equivalent, facsimile, courier or by electronic transmission. If posted, the notice shall be deemed to have been received five (5) working days after the date of posting or, in the case of a notice to an addressee not in the country of the sender, ten (10) working days after the date of posting. If sent by facsimile or electronic transmission, notice shall be deemed received upon confirmation of complete receipt being given by the intended receiving Party. If couriered, notice will be deemed to have been received on delivery. + +8 + +Source: ALLIED ESPORTS ENTERTAINMENT, INC., 8-K, 8/15/2019 + + + + + +15.10 Governing Law and Jurisdiction. Without reference to choice or conflict of law principles, this Agreement shall be governed by and construed in accordance with the laws of the State of California, USA. The Parties unconditionally submit to exclusive jurisdiction of and accept as the exclusive venue for any legal proceeding involving this Agreement the state and federal courts located in the County of Los Angeles, California. Before any Party (the "Complaining Party") may bring any legal proceeding against the other (the "Non Complaining Party"), the Complaining Party shall first make a reasonable and good faith attempt to resolve all disputes privately by notifying and providing to the Non Complaining Party of the Complaining Party's complaints, reasons and supporting evidence for the complaints, and the reasonable steps Complaining Party would like the Non Complaining Party to take in order to address the complaints. If for any reason the Non-Complaining Party disagrees with either the complaint or the steps suggested to address the complaints, the Parties shall discuss and work on an amicable solution for at least thirty (30) days before the Complaining Party may bring any legal proceeding to resolve the complaints. Any dispute, claim or controversy arising out of or relating to this Agreement or the breach, termination, enforcement, interpretation, or validity thereof, including the determination of the scope and applicability of this agreement to arbitrate, shall be determined by arbitration in Los Angeles County, California, by an arbitrator of JAMS, in accordance with its arbitration rules and procedures then in effect. Judgment on the arbitrator's award may be entered in any court having jurisdiction. The prevailing Party in any dispute involving this Agreement shall be entitled to recover from the other Party its costs, expenses, and reasonable attorneys' fees (including any fees for expert witnesses, paralegals, or other legal service providers). This Section 15.10 shall not preclude or place any condition on any Party from seeking injunctive relief from a court of appropriate jurisdiction. 15.11 Third Party Rights. This Agreement does not confer any rights or remedies on any third party. 15.12 Counterparts. This Agreement may be executed in any number of counterparts, each of which when executed and delivered shall be deemed to be an original and all of which counterparts taken together shall constitute one and the same instrument. 15.13 Headings. All section headings contained in this Agreement are for convenience or reference only, do not form a part hereof and shall not in any way affect the meaning or interpretation of this Agreement. 15.14 Force Majeure. Neither Party will be liable for any delays in the performance of any of its obligations hereunder due to causes beyond its reasonable control, including earthquake, fire, strike, war, riots, acts of any civil or military authority, acts of God, judicial action, unavailability or shortages of labor, materials or equipment, terrorism or threat thereof, outbreak of disease or other public health hazard, failure or delay in delivery by suppliers or delays in transportation. In such event the Party unable to meet its obligations will use all best efforts to remedy its delayed performance and will promptly notify the other Party in writing of the circumstances affecting its timely performance. + +9 + +Source: ALLIED ESPORTS ENTERTAINMENT, INC., 8-K, 8/15/2019 + + + + + +IN WITNESS WHEREOF, the Parties have executed this Agreement acting through their duly authorized representatives as of the Effective Date. "Newegg" "Allied" Newegg Inc. Allied Esports International, Inc. By /s/ Mitesh Patel By: /s/ Judson Hannigan Name: Mitesh Patel Name: Judson Hannigan Title: VP, Marketing Title: CEO Newegg Inc. Allied Esports International, Inc. Address: Newegg Inc. 17560 Rowland St. City of Industry, CA 91745 USA + +Address: Allied Esports International, Inc. 4000 McArthur Blvd, 6t h Floor Newport Beach, California 92660 Contact: +1 (714) 435-2600 Contact: +1 714-265-7323 Email: Email: jud@esportsallied.com Attention: Legal Department By Newegg Legal at 11:40 am, Feb 25, 2019 Attention: Judson Hannigan + +10 + +Source: ALLIED ESPORTS ENTERTAINMENT, INC., 8-K, 8/15/2019 \ No newline at end of file diff --git a/full_contract_txt/Antares Pharma, Inc. - Manufacturing Agreement.txt b/full_contract_txt/Antares Pharma, Inc. - Manufacturing Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..e3c32b29d3448f1a4615bf4e7fe50650da3fc90d --- /dev/null +++ b/full_contract_txt/Antares Pharma, Inc. - Manufacturing Agreement.txt @@ -0,0 +1,1067 @@ +Exhibit 10.3 + +[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED + +Manufacturing Agreement + +Between + +Antares Pharma, Inc. + +and + +AMAG Pharmaceuticals, Inc. + + + + + +[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED + +MANUFACTURING AGREEMENT + +This Manufacturing Agreement ("Agreement") is made and entered into as of the 20th day of March, 2018 (the "Effective Date") by and between Antares Pharma, Inc., a Delaware corporation, with offices located at 100 Princeton South, Suite 300, Ewing, NJ 08628 ("Antares"), and AMAG Pharmaceuticals, Inc., a Delaware corporation, with a corporate address at 1100 Winter Street, Waltham, MA 02451 ("AMAG"). Antares and AMAG are sometimes referred to herein individually as a "Party" and collectively as the "Parties". Recitals WHEREAS, AMAG is engaged in discovering, developing and marketing pharmaceutical products, including the Drug (as defined below); WHEREAS, Antares is engaged in the research and development of certain drug delivery devices, including auto-injection systems and the development and marketing of pharmaceutical products; WHEREAS, AMAG Pharma USA, Inc. (f/k/a Lumara Health, Inc., ("AMAG USA")), which was acquired by AMAG on November 12, 2014 and is a wholly-owned subsidiary of AMAG, and Antares entered into a certain Development and License Agreement (defined below) under which Antares granted AMAG USA an exclusive, worldwide license to Antares' VIBEX® QuickShot® (QS) auto-injection system or similar Device (defined below) for use with the Drug, and further under which Antares and AMAG USA agreed to collaborate to develop such a product; + +WHEREAS, contemporaneously with the execution of this Agreement, Antares, AMAG and AMAG USA are entering into a First Amendment to Development and License Agreement, pursuant to which, among other amendments set forth therein, AMAG USA assigned, and AMAG assumed, the rights and responsibilities under the Development and License Agreement (the "First Amendment to Development and License Agreement"); + +WHEREAS, AMAG (as the permitted assignee of the Development and License Agreement) and Antares agreed under the Development and License Agreement to enter into this Agreement and, whereby it will provide Antares or its Subcontractor (defined below) with Prefilled Syringes (defined below) containing the Drug and Antares or it Subcontractor will incorporate the Prefilled Syringes into Devices to produce finished Products (defined below) and sample Products to supply AMAG's requirements for such Products and sample Products; and + +WHEREAS, AMAG wishes to purchase, and Antares wishes to supply, AMAG's requirements of the Trainers (defined below) on the terms set forth in this Agreement. NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and promises contained in this Agreement, the Parties hereto agree as follows: + +- 1 - + + + + + +[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED + +ARTICLE 1 INTERPRETATION + +1.1 Definitions. Capitalized terms used in this Agreement and not otherwise defined in this Section 1.1 shall have the meanings set out in the Development and License Agreement. The following terms shall, unless the context otherwise requires, have the respective meanings set out below and grammatical variations of such terms shall have corresponding meanings: + +"[***]" has the meaning specified in Section 3.2(c); + +"[***]" has the meaning specified in Section 3.2(c); + +[***] + +"Agreement" has the meaning specified in the Preamble; + +"AMAG" has the meaning specified in the Preamble; + +"AMAG Indemnitees" has the meaning specified in Section 9.2; + +"AMAG USA" has the meaning specified in the Recitals; + +"AMAG Quality Tasks" means AMAG's quality, testing and release obligations set forth in Section 2.6(b) and in the Quality Agreement; + +"Annual Product Review Report" means the annual product review report as described in Title 21 of the United States Code of Federal Regulations, Section 211.180(e); + +"Annual Report" means the annual report as described in Title 21 of the United States Code of Federal Regulations, Section 314.81(b)(2); + +"Antares" has the meaning specified in the Preamble; + +"Antares' Fully Burdened Manufacturing Costs" means those costs actually incurred by Antares related directly to the acquisition of materials and their conversion into Products, sample Products or Trainers, as the case may be. [***]; + +"Antares Indemnitees" has the meaning specified in Section 9.1; + +"Batch Record" means a detailed, step-by-step description of the entire assembly, packaging and labelling process for the Products and sample Products which explains how such Products or sample Products (as the case may be) were assembled, packaged and labelled, indicating specific types and quantities of Components, additional materials, processing parameters, in- process quality controls, and other relevant controls; + +- 2 - + + + + + +[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED + +"Binding Forecast" has the meaning specified in Section 3.2(a); + +"[***]" has the meaning specified in Section 3.2(c); + +"Business Day" means a day other than a Saturday, Sunday or a day that is a federal holiday in the United States; + +"Calendar Quarter" means a three-month period ending on March 31, June 30, September 30 or December 31; + +"Calendar Year" means a calendar year occurring after the Effective Date; provided, however, the first Calendar Year means the period from the Effective Date up to and including December 31 of the same calendar year in which the Effective Date occurs; + +"[***]" has the meaning specified in Section 3.2(c); + +"Certificate of Analysis (Device)" means a document signed by an authorized representative of Antares or the Subcontractor that conducted the applicable analysis, in reasonable and customary form, that: (i) describes the specifications for, and testing methods applied to, the quantity of each of the Major Device Components manufactured by or on behalf of Antares pursuant to this Agreement, and the results of such testing, and (ii) certifies that such quantity of each of the Major Device Components was manufactured in accordance with cGMP, all other Applicable Laws, and the Product Specifications; + +"Certificate of Analysis (PFS Manufacture)" means a document signed by an authorized representative of AMAG, its agent or its permitted subcontractor that conducted the applicable analysis, in reasonable and customary form, that: (i) describes the specifications for, and testing methods applied to the Drug manufactured by or on behalf of AMAG pursuant to this Agreement, and the results of such testing, and (ii) certifies that such quantity of Drug was manufactured in accordance with cGMP, all other Applicable Laws, and the Product Specifications; + +"Certificate of Analysis (PFS ID Testing)" means a document signed by an authorized representative of AMAG, its agent or its permitted subcontractor that conducted the applicable analysis, in reasonable and customary form, that describes the specifications for, and testing methods applied to, the Drug manufactured by or on behalf of AMAG pursuant to this Agreement for identification of the Drug, and the results of such testing; + +"Certificate of Analysis (Product)" means a document signed by an authorized representative of AMAG, its agent or its permitted subcontractor that conducted the applicable analysis, in reasonable and customary form, that: (i) describes the specifications for, and testing methods applied to, the quantity of Product and/or sample Product manufactured by or on behalf of Antares pursuant to this Agreement, and the results of such testing, and (ii) certifies that such quantity of Product and/or sample Product was + +- 3 - + + + + + +[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED + +manufactured in accordance with cGMP, all other Applicable Laws, and the Product Specifications; + +"Certificate of Conformance (Device)" means the document provided to AMAG by Antares or the Subcontractor that conducted the applicable review, as the case may be, that certifies each batch of each of the Major Device Components was manufactured in compliance with the cGMP, all other Applicable Laws, and the Product Specifications; + +"Certificate of Conformance (Product)" means the document provided to AMAG by Antares or the Subcontractor that conducted the applicable review, as the case may be, that certifies each batch of Product and/or sample Product was assembled, packaged and labelled in compliance with the cGMP, all other Applicable Laws, and the Product Specifications; + +"cGMP" means current good manufacturing practice and standards as provided for (and as amended from time to time) in the "Current Good Manufacturing Practice Regulations" of the U.S. Code of Federal Regulations Title 21 (21CFR§4; 21CFR§210/211 and 21CFR§820) and in European Community Council Directive 93/42/EEC concerning medical devices, any U.S., European, or other applicable laws, regulations or respective guidance documents now or subsequently established by a governmental or regulatory authority, and any arrangements, additions, or clarifications; + +"Change Order" has the meaning specified in Section 4.2(b); + +"Commercially Reasonable Efforts" means, with respect to each Party, such efforts and commitment of resources in accordance with [***] that such Party [***]. As used in this definition of "Commercially Reasonable Efforts", "reasonable" shall be measured by [***]. References in this Agreement to "commercially reasonable" and similar formulations shall be deemed to incorporate the standard set forth in this definition of "Commercially Reasonable Efforts"; + +"Components" means, collectively, [***]; + +"Damages" has the meaning specified in Section 9.1; + +"Deficiency Notice" has the meaning specified in Section 5.1(a); + +"Delivery Date" means the delivery date of a Purchase Order of Products, sample Products or Trainers as agreed upon by the Parties pursuant to Section 3.2(b)(i) or Antares' proposed date if AMAG does not respond within the [***] set forth in Section 3.2(b)(i); + +"Development and License Agreement" means that certain Development and License Agreement entered into by and between the Parties dated as of September 30, 2014, as amended by the First Amendment to the Development and License Agreement, and as further amended by the Parties from time to time; + +- 4 - + + + + + +[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED + +"Device" means the VIBEX® QS auto-injection system device, consisting of the Major Device Components, designed and developed to incorporate a Prefilled Syringe for delivery of the Drug, and any improvements or modifications thereof made pursuant to the Development and License Agreement, or such other Antares-proprietary device as agreed to by Antares designed and developed to deliver the Drug pursuant to the Development and License Agreement, as further set forth on Exhibit B. For greater certainty, the Major Device Components are intended to be assembled with the Prefilled Syringe to produce a finished Product; + +"DHF" has the meaning specified in the Development and License Agreement; + +"DMF" has the meaning specified in the Development and License Agreement and is expanded to further clarify that a DMF is equivalent to an "MAF" or Master File; + +"Drug" means 17-alpha hydroxyprogesterone caproate; + +"Effective Date" has the meaning specified in the Preamble; + +[***] + +"Excess Order" has the meaning specified in Section 3.2(b)(i); + +"Firm Orders" means any Purchase Order accepted by Antares pursuant to Section 3.2(b)(i) (as evidenced by an Order Acceptance), including any Excess Orders agreed to by Antares in an Order Acceptance, with the Delivery Date as set forth in Section 3.2(b)(i); + +"First Amendment to the Development and License Agreement" has the meaning specified in the Recitals; + +"Force Majeure Event" has the meaning specified in Section 12.4; + +"Forecast" has the meaning specified in Section 3.2(a); + +"[***]" has the meaning specified in Section 4.6; + +"[***]" has the meaning specified in Section 3.2(c); + +"[***]" has the meaning specified in Section 3.2(c); + +"Invoice" has the meaning specified in Section 4.2(a); + +"[***]" has the meaning specified in Section 3.2(c); + +"Latent Defects" has the meaning specified in Section 5.1(a); + +- 5 - + + + + + +[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED + +"Long Lead Time Materials" means [***], a description of which are set forth on Exhibit A (as such exhibit may be amended from time to time by the mutual written agreement of the Parties), [***]; + +"Major Device Components" means the following Components of the Device: [***]. + +"Manufacture(d) at Risk" has the meaning specified in Section 3.7(a); + +"Manufacturing Services" means the manufacturing, quality control and quality assurance, storage, labelling, packaging, assembly and related services, to be performed by Antares or its Subcontractor as contemplated in this Agreement and described in the Specifications and the Quality Agreement, required to manufacture Devices and produce and supply Trainers, Products and sample Products from such Devices, Prefilled Syringes and Components. For the avoidance of doubt, the "Manufacturing Services" specifically excludes the AMAG Quality Tasks and all other services, activities or tasks to be performed by or on behalf of AMAG set forth in this Agreement or as otherwise described in the Specifications or the Quality Agreement; + +"Manufacturing Site" means [***] or such other facility owned and operated by Antares or a Subcontractor on behalf of Antares under this Agreement [***]. + +"Non-Binding Forecast" has the meaning specified in Section 3.2(a); + +"Non-Cancellable Non-Returnable Materials" or "NCNR Materials" means [***]; + +[***] + +"Order Acceptance" has the meaning specified in Section 3.2(b)(i); + +"Other Approved Antares Product" has the meaning specified in Section 4.6(a); + +"Parties" and "Party" have the meanings specified in the Preamble; + +"Person" means any natural person, a corporation, a partnership, a trust, a joint venture, a limited liability company, any Governmental Authority or any other entity or organization; + +"[***]" has the meaning specified in Section 2.1(b); + +"Prefilled Syringe" means the prefilled syringe containing the formulated Drug for incorporation into the Device, as further set forth in the Product Specifications; + +"Prior Orders" has the meaning specified in Section 3.2(c); + +"Product(s)" means the fully packaged Device for auto-injection delivery of the Drug incorporating a Prefilled Syringe and other applicable Components listed on Exhibit B + +- 6 - + + + + + +[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED + +hereto, as such exhibit may be amended from time to time by the mutual written agreement of the Parties; + +"Product Specifications" means, as set forth on Exhibit B hereto, for each Product, with AMAG having primary responsibility with respect to the Drug and Prefilled Syringe, and Antares having primary responsibility with respect to the Devices and Components, the following documents relating to such Product: + +(a) specifications for Devices, Prefilled Syringes and Components; + +(b) the Product Specifications; and + +(c) storage, packaging, prescribing information and label specifications and requirements; and + +all as updated, amended and revised from time to time by the Parties in writing in accordance with the terms of this Agreement, and in all cases including compliance with all Applicable Laws and the Quality Agreement; + +"Quality Agreement" has the meaning specified in Section 2.6(a); + +"Recall" means any action (i) by AMAG to recover title to or possession of quantities of the Products, sample Products and/or Trainers sold or shipped to third parties (including, without limitation, the voluntary withdrawal of Products, sample Products and/or Trainers) from the market); or (ii) by any Regulatory Authorities to detain or destroy any of the Products and/or the sample Products. Recall shall also include any action by either Party to refrain from selling or shipping quantities of the Products, sample Products and/or Trainers to third parties which would have been subject to a Recall if sold or shipped; + +"Safety Stock" has the meaning specified in Section 3.6(a); + +"Second Source Supplier" has the meaning specified in Section 3.9; + +"[***]" has the meaning specified in Section 2.1(b); + +"Specifications" means the Product Specifications with respect to the Product and sample Product, and the Trainer Specifications with respect to the Trainers, as the case may be; + +"Subcontractor" has the meaning specified in Section 2.1(b); + +"Supply Failure" has the meaning specified in Section 3.5(a); + +"Supply Failure Remedy Option" has the meaning specified in Section 3.5(b); + +[***] + +"Term" has the meaning specified in Section 7.1; + +- 7 - + + + + + +[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED + +"[***]" has the meaning specified in Section 3.2(c); + +"Third Person" means any Person or entity other than AMAG, Antares, or an Affiliate or sublicensee of either Party with respect to this Agreement and/or the Development and License Agreement. + +"Third Person Claim" has the meaning specified in Section 9.1; + +"Trainer" means a reusable version of the Product that does not incorporate the Prefilled Syringe and that is to be used to demonstrate how to operate the Product; + +"Trainer Specifications" means, as set forth on Exhibit C hereto, for each Trainer, the requirements and print/part numbers documents relating to such Trainer, as updated, amended and revised from time to time by or on behalf of the Parties, and in all cases including compliance with all Applicable Laws; + +"Transfer Price" has the meaning specified on Exhibit D hereto; + +"U.S. GAAP" has the meaning specified in the definition of Antares' Fully Burdened Manufacturing Costs; and + +"VAT" means, in relation to any jurisdiction within the European Union, the value added tax provided for in Council Directive 2006/112/EC and charged under the provisions of any national legislation implementing that directive or Council Directive 77/388/EEC together with legislation supplemental thereto and, in relation to any other jurisdiction, the equivalent tax (if any) in that jurisdiction. + +"Yield" has the meaning specified in Section 2.10. + +1.2 Currency. Unless otherwise indicated, all monetary amounts are expressed in this Agreement in the lawful currency of the United States of America. + +1.3 Sections and Headings. The division of this Agreement into Articles, Sections, subsections and Exhibits and the insertion of headings are for convenience of reference only and shall not affect the interpretation of this Agreement. Unless otherwise indicated, any reference in this Agreement to an Article, Section or Exhibit refers to the specified Article, Section or Exhibit to this Agreement. In this Agreement, the terms "this Agreement", "hereof", "herein", "hereunder" and similar expressions refer to this Agreement and not to any particular part, Section, Exhibit or the provision hereof. + +1.4 Singular Terms. Except as otherwise expressly provided herein or unless the context otherwise requires, all references to the singular shall include the plural and vice versa. + +1.5 Exhibits. The following Exhibits are attached to, incorporated in and form part of this Agreement: + +- 8 - + + + + + +[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED + +Exhibit A - Long Lead Time Materials Exhibit B - Product Specifications Exhibit C - Trainer Specifications Exhibit D - Transfer Price Exhibit E - Quality Agreement Exhibit F - Batch Numbering & Expiration Dates Exhibit G - Retained Samples Exhibit H - Initial Forecast Exhibit I - Redundancy Plan Exhibit J - [***] Exhibit K - AMAG Equipment Exhibit L - Form of Change Order + +ARTICLE 2 MANUFACTURING AND SUPPLY OBLIGATIONS + +2.1 Manufacturing Services. + +(a) Starting on the Effective Date, Antares or its Subcontractor shall provide the Manufacturing Services in order to manufacture Devices, Products, sample Products and Trainers exclusively for AMAG for the Territory, all in accordance with the Specifications, Applicable Laws, Quality Agreement and this Agreement. For the avoidance of doubt, subject to, and without limiting or amending the exclusivity restrictions and confidentiality obligations set forth in Section 6.1 and ARTICLE 17 of the Development and License Agreement, respectively, Antares or its Subcontractor may manufacture the VIBEX® QS device or other devices (other than the Device) for itself or other Persons. Antares or its Subcontractor shall conduct all Manufacturing Services at the Manufacturing Site and may change the Manufacturing Site for the Products, sample Products and Trainers only with the prior written consent of AMAG, such consent not to be unreasonably withheld, conditioned or delayed (provided that, Antares or its Subcontractor shall provide a minimum of [***] prior written notice of such change of Manufacturing Site). + +(b) [***]. + +(c) Antares shall have the right to specify the final assembly packaging and labeling process (subject to AMAG's provision of label content) for Products, sample Products and Trainers, including the combination of the components thereof, in accordance with the Specifications and the Quality Agreement. + +2.2 Prefilled Syringes. + +(a) AMAG or its designee(s) will be responsible for manufacture, formulation and testing of any Drug and the Prefilled Syringe for assembly with the Device into the Product + +- 9 - + + + + + +[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED + +and sample Product by Antares or its Subcontractor and for final Product and/or sample Product release for sale, commercialization or use by a Third Person. AMAG shall supply Prefilled Syringes to Antares or its Subcontractor in accordance with the terms of this Section 2.2 AMAG will have sole decision-making authority regarding the use of a Third Person to manufacture any aspect of the Drug and the Prefilled Syringes. AMAG shall conduct release testing for Prefilled Syringes. Antares or its Subcontractor shall use and store all Prefilled Syringes provided hereunder in accordance with AMAG's reasonable instructions, the Quality Agreement, cGMPs and all other Applicable Laws at Antares' or its Subcontractor's storage facility at the Manufacturing Site. Antares or its Subcontractor shall conduct a visual inspection of all Prefilled Syringes received at the Manufacturing Site not later than [***] after the date of receipt in accordance with the mutually agreed upon procedures. Antares or its Subcontractor shall promptly (and in any event within [***] following completion of applicable inspection) notify AMAG in writing of any visual inspection failure of the Prefilled Syringes. Antares shall not allow any lien or other security interest to be imposed on the Prefilled Syringes by Antares or its Subcontractor or as a result of Antares or its Subcontractor action or inaction. Antares or its Subcontractor shall use all quantities of Prefilled Syringes provided hereunder for the sole purpose of performing the Manufacturing Services on behalf of AMAG and not for any other use or purpose. + +(b) The Parties acknowledge and agree that title to and risk of loss of all Prefilled Syringes shall at all times belong to and remain in AMAG; provided that, subject to the limitations on liability set forth in this Section 2.2(b), in the event of loss or damage of any Prefilled Syringes while they are at the Manufacturing Site, Antares shall be only responsible for the replacement costs (as evidenced by AMAG invoices) of such Prefilled Syringes if the damage, loss, theft or destruction was caused by the negligent act or omission or the willful misconduct of Antares or its Subcontractor. For the avoidance of doubt, Antares shall not be responsible for any damage, loss or destruction to the Prefilled Syringes resulting from damage, loss or destruction caused by the reasonable amount of Prefilled Syringes damaged, lost or destroyed in the manufacturing process (i.e. consistent with the Yield) or obsolescence due to changes in the manufacturing process. Not later than [***] following the end of each Calendar Year, AMAG shall provide Antares with an invoice and accounting of the Prefilled Syringes that were damaged or destroyed during the prior year (following notification from Antares of such damage or destruction). Payment of undisputed portions of such invoice shall be due [***] from Antares' receipt of such invoice. [***]. All Prefilled Syringes in Antares' possession shall be subject to disposition by AMAG upon expiration or termination of this Agreement, and in either such event, Antares or its Subcontractor shall deliver the Prefilled Syringes to AMAG or its designee, at AMAG's + +- 10 - + + + + + +[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED + +reasonable expense. AMAG shall be solely responsible and reimburse Antares for all reasonable costs and expenses associated with the storage of the Prefilled Syringes at Antares' or its Subcontractor's storage facility at the Manufacturing Site following the expiration or termination of this Agreement. Antares agrees to reasonably cooperate with AMAG, at AMAG's expense, in the filing of any UCC financing statements relating to the Prefilled Syringes as may be required under Applicable Laws. + +(c) All shipments of Prefilled Syringes made by AMAG or its designee to Antares or its Subcontractor hereunder will be delivered [***] Antares' or its Subcontractor's Manufacturing Site unless otherwise mutually agreed. [***]. + +2.3 Devices. Antares or its Subcontractor shall manufacture and test all Devices as specified by the Product Specifications prior to using such Devices to manufacture Products and sample Products. Antares or its Subcontractor shall properly store the Devices at Antares' or its Subcontractor's storage facility at the Manufacturing Site pursuant to cGMP and Applicable Law. + +2.4 Components. Antares or its Subcontractor shall purchase and inspect all Components as specified by the Specifications prior to using such Components to manufacture Products, sample Products and Trainers. Antares or its Subcontractor shall properly store the Components at Antares' or its Subcontractor's storage facility at the Manufacturing Site pursuant to cGMP and Applicable Law. + +2.5 Assembly of Devices, Prefilled Syringes and Components. Antares or its Subcontractor shall assemble Devices, Prefilled Syringes and Components into Products, sample Products and Trainers (as applicable) in accordance with the terms of this Agreement. + +2.6 Quality Control and Quality Assurance. + +(a) On or about the date hereof, the Parties shall amend and restate the Quality Agreement entered into on May 16, 2016 between the Parties covering the Product, sample Products, Trainers, the Device and the Prefilled Syringes, as set forth in the form of Amended and Restated Quality Agreement attached hereto as Exhibit E (as amended and restated, the "Quality Agreement"). The Parties shall review the Quality Agreement and shall modify the same from time to time as detailed in the Quality Agreement as necessary through a written amendment to the Quality Agreement signed by an authorized representative on behalf of each of the Parties. The Parties shall perform the quality control and quality assurance testing specified in Section 2.6(b) and the Quality Agreement. The Parties shall perform Product, sample Product and Trainer review and final release of the Product, sample Product and Trainers for sale in accordance with Section 2.6(b) and the Quality Agreement, the Specifications and Applicable Laws. + +- 11 - + + + + + +[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED + +(b) Subject to, and as more fully set forth in, the Quality Agreement, the Parties agree as follows: + +[***]. + +2.7 Labelling and Packaging. Antares or its Subcontractor shall label and package the Products, sample Products and Trainers as set out in the Specifications. AMAG shall be responsible for the cost of artwork development for the Products, sample Products and Trainers. In addition, Antares or its Subcontractor shall arrange for and implement (a) the imprinting of batch numbers and expiration dates for each batch of Products and sample Products shipped, and (b) the imprinting of batch numbers for each batch of Trainers shipped. Such batch numbers and expiration dates shall be affixed on the Products, sample Products and Trainers and, on the shipping carton of each Product, sample Product and Trainer as outlined in the Specifications and, as required by cGMPs and Applicable Laws. The system used by Antares or its Subcontractor for batch numbering and expiration dates is detailed in Exhibit F hereto. AMAG shall be solely responsible for the content of the labelling and the provision of such content. Notwithstanding anything to the contrary in this Agreement, Antares' obligation to perform the Manufacturing Services is subject to AMAG's reasonably timely approval and provision of all labelling content. AMAG may, in its sole discretion, make changes to labels, product inserts and other packaging for the Products, sample Products and Trainers, which changes shall be submitted by AMAG to all applicable Regulatory Authorities from which approval of such changes is required. AMAG shall be responsible for the cost of labeling obsolescence due to changes to such labeling made by AMAG, including the reasonable cost of disposal and replacement of packaging materials. Antares' name shall appear on the label or anywhere else on the Products, sample Products and Trainers as reasonably agreed upon by the Parties, unless: (i) prohibited by Applicable Laws; or (ii) the Parties otherwise agree in writing. + +2.8 Validation Activities. Antares or its Subcontractor will be responsible for the development and approval of the validation protocols for analytical methods and manufacturing processes (including packaging processes) for the Products, sample Products and Trainers as described in the Specifications in accordance with the Quality Agreement and shall be approved by AMAG prior to execution thereof. [***]. + +2.9 Retained Samples. Antares or its Subcontractor shall retain sufficient quantities of shipped Products, sample Products, Devices and Components as retained repository samples as required under the Quality Agreement and Applicable Laws at AMAG's sole cost and expense and as set forth in Exhibit G. Such retained samples shall minimally represent [***] the number of samples necessary to re-execute chemical release testing and will be maintained in a suitable storage facility at Antares' or its Subcontractors' Manufacturing Site until [***] or such longer period as may be required by Applicable Laws. All such samples shall be available for inspection by AMAG at reasonable intervals upon reasonable + +- 12 - + + + + + +[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED + +notice. AMAG shall advise Antares of the required quantities of shipped Products, sample Products, Devices and Components that AMAG desires to be retained. Antares shall invoice AMAG for the costs associated with performing these activities. + +2.10 Yield. [***]. + +ARTICLE 3 ANTARES' SUPPLY OF PRODUCT + +3.1 Supply of Product. + +(a) Commencing on the Effective Date and continuing during the Term, Antares shall manufacture and supply, or have manufactured and supplied by its Subcontractor, all quantities of the Products, sample Products and Trainers ordered by AMAG in the Territory pursuant to this Agreement. Commencing on the Effective Date and during the Term, AMAG shall commit to purchase its entire requirements of Product(s), sample Products and Trainers for sale in the Territory from Antares. + +(b) The Parties agree that in the event that AMAG seeks Regulatory Approval for the Product, sample Product or Trainers for a country outside of the United States, the Parties will enter into an amendment to this Agreement setting forth the terms and conditions of supply of Products, sample Products or Trainers for that country. + +3.2 Orders and Forecasts. + +(a) Rolling Forecasts. On or before the [***] after the Effective Date, AMAG shall provide Antares with an updated written [***] rolling forecast of the volume of Product, sample Product and Trainers that AMAG then anticipates will be required to be produced and delivered to AMAG during [***] (the "Forecast"). The initial Forecast is attached hereto as Exhibit H. [***] of each Forecast shall constitute a firm order and be a binding commitment on AMAG to purchase the volume of Product, sample Product and Trainers set forth therein (the "Binding Forecast"). [***] of each Forecast shall be non-binding (the "Non-binding Forecast"). The Non-binding Forecast shall be prepared in good faith by AMAG and represent AMAG's reasonable expectation of its requirements of Product, sample Product and Trainers for [***] of such Forecast. Each Forecast shall include an estimated delivery date of the Prefilled Syringes to Antares or its Subcontractor (such estimate to be provided by AMAG in good faith). + +(b) Purchase Orders. + +(i) To order Products, sample Products and Trainers for supply by Antares or its Subcontractor under this Agreement, AMAG shall submit to Antares a Purchase Order (which is deemed binding on AMAG) complying with the other applicable terms of this Agreement [***]. Not later than [***] after receipt of a Purchase + +- 13 - + + + + + +[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED + +Order, Antares shall confirm in writing its receipt of the Purchase Order ("Order Acceptance") and the proposed delivery date to AMAG in writing; provided that Antares may reject any Purchase Order not consistent with the requirements set forth in this Agreement, including this Section 3.2(b)(i). AMAG shall notify Antares within [***] after receipt of the Order Acceptance if such proposed delivery date is unacceptable for AMAG, and in such event, the Parties shall promptly discuss and seek to agree on an alternative delivery date. If AMAG does not respond within such [***] period, the proposed date will be the confirmed delivery date. Antares shall not be obligated to fill any portion of any Purchase Order to the extent the volumes in such Purchase Order exceed the volumes set forth in the most recent Binding Forecast (such excess amount, the "Excess Order"). For any Purchase Order that contains an Excess Order, Antares shall notify AMAG in the Order Acceptance whether Antares and/or its Subcontractors will fulfill such Excess Order (or part thereof) and the expected delivery date for fulfillment. The decision to fulfill any Excess Order may be made by Antares in its sole discretion and Antares shall not be liable for any failure to deliver any Product, sample Product or Trainers set forth in any Excess Order; provided that Antares meets its obligations consistent with the Binding Forecast. AMAG's failure to deliver a Purchase Order consistent with the volumes of Product, sample Product and/or Trainers under any Binding Forecast, shall not relieve AMAG of its obligation to purchase such volumes of Product, sample Product and/or Trainers. The terms of this Agreement shall be controlling and any additional or inconsistent terms or conditions contained on any Forecast, Purchase Order, Order Acceptance, invoice or similar documentation given or received by the Parties shall have no effect and such terms and conditions are expressly disclaimed and excluded. + +(ii) AMAG and Antares acknowledge and agree that any minor difference between the quantity of ordered and delivered quantity of Product, sample Product or Trainers (as the case may be) that falls within applicable industry standards shall be accepted by AMAG as delivery in full of the ordered quantities set forth on any Firm Order and shall not be deemed a shortage as set forth in Section 5.1(c), but in no event shall the quantity delivered deviate from the quantity ordered by more than: [***]. + +(iii) Notwithstanding anything in this Agreement to the contrary, AMAG acknowledges and agrees that Antares shall only be responsible for producing and delivering to AMAG that portion (up to the entire quantity) of Products and sample Products requested pursuant to a Purchase Order for which Antares or its Subcontractor (as the case may be) possesses, at least [***] prior to the Delivery Date, a sufficient stock of inventory of Prefilled Syringes necessary to + +- 14 - + + + + + +[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED + +fulfill such order (including any additional quantity of Prefilled Syringes necessary to account for Prefilled Syringes reasonably expected to be damaged, lost or destroyed in the manufacturing process (i.e. consistent with the Yield)) and the Certificate of Analysis (PFS Manufacture) relating thereto. In the event that Antares or its Subcontractor (as the case may be) has not received a sufficient stock of Prefilled Syringes by the dates set forth in the previous sentence, Antares or its Subcontractor shall (A) manufacture and deliver such number of Products and sample Products for which Antares or its Subcontractor (as the case may be) has Prefilled Syringes in accordance with the schedule set forth in the Firm Order, and (B) as soon as practicable (and no more than [***] following receipt of the Prefilled Syringes required for such Firm Order, Antares or its Subcontractor shall manufacture and deliver the Products and sample Products in such order taking into account any Products and sample Products manufactured and delivered pursuant to subsection (A). + +(iv) Notwithstanding anything in this Agreement to the contrary, AMAG acknowledges and agrees that Antares shall not be responsible for delay in the delivery of quantity of Products, sample Products or Trainers (as the case may be) set forth in any Firm Order to the extent such delay is caused primarily due to AMAG's failure to fulfill the AMAG Quality Tasks to enable Antares and/or its Subcontractor to timely perform the Manufacturing Services. + +(c) Prior Orders. [***]. + +3.3 Minimum Orders. The quantity of Products, sample Products or Trainers (as the case may be) ordered by AMAG from Antares in each shipment (as set forth in a Purchase Order) must be equal to or greater than [***] units for each type of Product, sample Product and Trainers ordered. Such minimum order quantity may be updated from time to time by a mutual written agreement of the Parties. For avoidance of doubt, except for any Purchase Orders placed by AMAG and/or quantities set forth in the Binding Forecast, nothing in this Agreement requires AMAG to purchase any particular quantity of Products from Antares. + +3.4 Shipments. + +(a) Shipments of Products, sample Product and Trainers shall be made EXW (as such term is defined in INCOTERMS 2010) Antares' or its Subcontractor's (as the case may be) designated shipping location unless otherwise mutually agreed. The Parties acknowledge and agree that delivery of Products, samples Products and/or Trainers under this Agreement shall be deemed to be made once the Products, samples Products and/or Trainers (as the case may be) are made available at Antares' or its Subcontractor's (as the case may be) designated shipping location. [***]. AMAG shall pay for shipping. AMAG shall arrange for insurance and shall select the freight + +- 15 - + + + + + +[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED + +carrier to ship Products, sample Products and Trainers. Antares shall not be responsible for the payment of such insurance. Products, sample Products and Trainers shall be transported in accordance with the Specifications. + +(b) Prior to release for distribution, sale or use by AMAG pursuant to Section 2.6(b)(v)(D), AMAG, its agent or its permitted subcontractor shall test each batch of Products, sample Products and Trainers manufactured under this Agreement in accordance with Section 2.6(b)(v)(D). AMAG, its agent or its permitted subcontractor shall conduct all such testing in accordance with the procedures and using the analytical testing methodologies set forth in the Specifications, the Quality Agreement and Applicable Laws. All Products, sample Products and Trainers shipped by Antares or its Subcontractor to AMAG or AMAG's designee, including its packaging, shall meet all applicable export and customs laws, regulations and like requirements for the United States. + +3.5 Supply Failure. + +[***]. + +3.6 Safety Stock. + +(a) At AMAG's sole cost and expense, Antares or its Subcontractor will maintain and make available to AMAG a safety inventory of the Major Device Components necessary to assemble the Devices in the quantities set forth in this Section 3.6(a) at Antares or its Subcontractor's Manufacturing Site in accordance with this Section 3.6 ("Safety Stock"). + +(i) [***]. + +(ii) [***]. + +(b) With respect to the initial Safety Stock (as set forth in Section 3.6(a)(i)) or any increase in Safety Stock pursuant to Section 3.6(a)(ii), upon the completion of the manufacture of such Safety Stock and delivery to AMAG of the Certificate of Analysis (Device) and the Certificate of Conformance (Device) applicable to such Safety Stock, Antares shall invoice AMAG for its [***] pursuant to invoicing and payment terms set forth in Section 4.2. + +(c) With respect to any reduction in the Safety Stock pursuant to Sections 3.6(a)(ii) or 3.6(d), to the extent such reduced quantities of Safety Stock are used in the manufacture of fully finished Products and/or sample Products, then Antares shall credit any amount previously paid by AMAG with respect to such reduced quantity in Safety Stock in the Invoice issued to AMAG pursuant to Section 4.2 for such fully finished Product and/or sample Product. + +- 16 - + + + + + +[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED + +(d) Antares or its Subcontractor shall manage the Safety Stock as part of its overall inventory and use the Safety Stock to fulfill its obligations pursuant to a Firm Orders on a first in/first out basis. As such inventory of Safety Stock is used as part of the Manufacturing Services of Product and/or sample Product, Antares shall use Commercially Reasonable Efforts to replenish the Safety Stock to the level set forth in Section 3.6(a)(i) (as adjusted pursuant to Section 3.6(a)(ii)) within [***] of receipt of such Firm Order. + +(e) Title and risk of loss of the Safety Stock shall transfer to AMAG upon the delivery to AMAG of the Certificate of Conformance (Device) and Certificate of Analyses (Device) for the applicable shipment of such Safety Stock from Antares' Subcontractor that manufactured such Safety Stock. Antares shall not be responsible for any insurance with respect to the risk of loss of such Safety Stock. + +(f) In the event any Safety Stock expires, Antares or its Subcontractor shall dispose of or destroy such Safety Stock in accordance with the Quality Agreement. AMAG shall reimburse Antares for any costs or expenses incurred (without markup) in connection with such disposal or destruction. + +(g) Notwithstanding the quantities set forth in Section 3.6(a), Antares or its Subcontractor shall maintain and store the Safety Stock during the Term of this Agreement, provided that during the last [***] before expiration or termination of this Agreement, Antares or its Subcontractor is only required to maintain that amount of Safety Stock as is required to deliver amounts set forth in the then-current Forecast(s) until such expiration or termination date. AMAG shall reimburse Antares for any reasonable costs or expenses incurred (without markup) in connection with maintaining or storing the Safety Stock. + +3.7 Manufacture at Risk. + +(a) In the event AMAG desires for Antares and/or its Subcontractor to initiate Manufacturing Services with respect to any Product or sample Product prior to the receipt of the Certificate of Analysis (PFS Manufacture) and the Certificate of Analysis (PFS ID Testing) ("Manufacture(d) at Risk"), AMAG shall deliver written notice of such to Antares. Notwithstanding anything in this Agreement to the contrary, Antares shall not be required to perform any Manufacturing Services with respect to the Product or sample Product until Antares receives (i) such written notice of AMAG's intention to Manufacture at Risk as set forth in the first sentence of this Section 3.7(a), or (ii) the Certificate of Analysis (PFS Manufacture) and the Certificate of Analysis (PFS ID Testing). + +(b) [***]. + +- 17 - + + + + + +[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED + +3.8 Redundancy Plan. Antares shall, at the Party's respective costs set forth on Exhibit I, develop, implement and maintain an the redundancy plan for molds, tooling and assemblies for the manufacturing of the Devices set forth on Exhibit I. + +3.9 Qualification of Second Source Supplier(s). Antares shall, upon AMAG's written request provided to Antares and at AMAG's cost (as set forth in this Section 3.9), identify and reasonably verify the suitability of one or more Third Persons as a "backup" supplier of Devices (each, a "Second Source Supplier") in addition to Antares' then-current supplier of Devices (whether Antares or its then-current Subcontractor). Within [***] following the receipt of such written request, the Parties will negotiate in good faith a budget for the costs and expenses associated with the Second Source Supplier, including all costs and expenses for the establishment and qualification thereof. Within [***] following the agreement by both Parties of such budget, Antares will use Commercially Reasonable Efforts to establish and qualify such Second Source Supplier; provided, however, that the Joint Project Team under the Development and License Agreement may agree to extend such time periods. AMAG shall have the right to propose a Second Source Supplier and Antares shall have the right to consent to such Second Source Supplier, which consent shall not be unreasonably withheld or delayed. Within [***] of a receipt of an invoice thereof, AMAG shall reimburse Antares for all documented costs and expenses (without markup) associated with the Second Source Supplier, including all documented costs and expense for the establishment and qualification thereof; provide that such costs and expenses, in the aggregate, shall not exceed [***] of the agreed-upon budget (as set forth above). + +3.10 Right to Purchase Directly from Subcontractors or Second Source Suppliers. + +(a) If (i) a Force Majeure Event affecting solely Antares (specifically excluding its Subcontractors or Second Source Suppliers) lasts for [***] which prevents Antares from fulfilling its financial obligations to a Subcontractor or a Second Source Supplier, or (ii) Antares is otherwise in material breach of its financial obligations to a Subcontractor or a Second Source Supplier for a period of at least [***] then Antares shall promptly deliver to AMAG a written notice of such event or breach. Following the receipt of such notice, or following Antares' material breach of its obligation to deliver such notice under this Section 3.10(a), AMAG may deliver written notice to Antares of its intention to exercise its rights under this Section 3.10. + +(b) For the period commencing on Antares' receipt of such notice from AMAG as set forth in Section 3.10(a) and ending [***] thereafter, Antares and AMAG shall negotiate in good faith a commercially reasonable agreement with respect to the Force Majeure Event or material breach describe in Section 3.10(a)(i) or 3.10(a)(ii), respectively, which may include, AMAG advancing payment for Manufacturing Services on terms to be negotiated among the Parties (an "Alternate Arrangement"). If, following the expiration of such [***] period, the Parties cannot mutually agree on a commercially + +- 18 - + + + + + +[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED + +reasonable agreement thereof, then, notwithstanding anything to the contrary in this Agreement, Antares shall use Commercially Reasonable Efforts to enable AMAG to commence purchasing Devices, Components, Products, sample Products and/or Trainers directly from Antares' Subcontractors or Second Source Supplier(s) on substantially similar terms, including price, that Antares has with such Subcontractor or Second Source Supplier(s) (as the case may be). AMAG's right to purchase Devices, Components, Products, sample Products and/or Trainers directly from Antares' Subcontractor(s) or Second Source Supplier(s) shall continue to [***]. + +(c) Provided that (i) AMAG and Antares have agreed to the terms of an Alternate Arrangement, or (ii) AMAG commences purchasing Devices, Components, Products, sample Products and/or Trainers directly from Antares' Subcontractors or Second Source Supplier(s) pursuant to the terms of Section 3.10(b), AMAG's election of its right to purchase Devices, Components, Products, sample Products and/or Trainers directly from Antares' Subcontractor(s) or Second Source Supplier(s) under this Section 3.10 shall be AMAG's sole and exclusive remedy, and Antares' sole liability, with respect to Antares' failure to supply such Devices, Components, Products, sample Products and/or Trainers for the reasons specified in Section 3.10(a); provided, that, if AMAG does not elect such right, AMAG shall not be prohibited from exercising all other rights available to AMAG under this Agreement and at law. + +ARTICLE 4 PRICE AND PAYMENT + +4.1 Prices. + +(a) During the Term, Antares or its Subcontractor shall deliver Products, sample Products and Trainers ordered by AMAG in accordance with this Agreement at the Transfer Prices set forth on Exhibit D. + +(b) [***]. + +4.2 Invoices and Payment. + +[***]. + +4.3Records; Financial Audit Request. With respect to audits of Antares' records relating to the establishment of the Transfer Price, [***] or any other amounts payable by AMAG hereunder, including, without limitation, pursuant to Section 4.6, Article 11 of the Development and License Agreement is hereby incorporated by reference herein and made a part of this Agreement. + +4.4Taxes. + +- 19 - + + + + + +[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED + +(a) The Transfer Price includes all taxes except (i) such sales and use taxes which Antares is required by law to collect from AMAG and (ii) to the extent imposed on the date of this Agreement or as a result of a change in law, VAT. Such VAT and taxes, if any, will be payable in addition to the Transfer Price. Where Antares is required by law to collect and/or account for such VAT and taxes from AMAG, such VAT and taxes will be separately stated in Antares's Invoice and will be paid by AMAG to Antares unless AMAG provides an exemption to Antares and, in the case of VAT, subject to Antares providing a valid VAT invoice to AMAG in the form and manner required by law to allow AMAG to recover such VAT (to the extent AMAG is allowed to do so by law). For avoidance of doubt, any increase in VAT imposed as a result of any action taken by Antares, and not consented to by AMAG, after the date of this Agreement shall not be paid by AMAG or otherwise included in the Transfer Price. + +(b) Except where AMAG is required by Applicable Law to account for any VAT to the applicable Governmental Authority, Antares shall be solely responsible for the timely payment of all such VAT and taxes to the applicable Governmental Authority + +(c) Notwithstanding the foregoing in this Section 4.4, AMAG shall be responsible for the payment of all duties, tariffs, VAT, taxes and similar charges payable on the exportation or importation of the Products, sample Products or Trainers. Without limiting any of Antares's obligations hereunder, Antares shall cooperate with and assist AMAG in all aspects of the shipment, exportation, importation and delivery process in order to ensure the expeditious delivery of the Product to the designated delivery point, including assisting in obtaining any documents that may be required. + +4.5[***] + +4.6[***] + +ARTICLE 5 PRODUCT CLAIMS AND RECALLS + +5.1 Product Claims. + +(a) Product Claims. [***]. + +(b) Determination of Deficiency. [***]. + +(c) Shortages. [***]. + +5.2 Product Recalls and Returns. + +- 20 - + + + + + +[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED + +(a) Records and Notice. In addition to the requirements of Section 6.2, Antares and AMAG shall each maintain such records in compliance with Applicable Laws as is reasonably necessary to permit a Recall of any Products, sample Products and Trainers delivered to AMAG, AMAG's designee or customers of AMAG. Each Party shall promptly (but no later than [***] of receipt of such information) notify the other by telephone (to be confirmed in writing) of any information which might affect the marketability, safety, or effectiveness of the Products, sample Products or Trainers and/or which might result in the Recall or seizure of the Products, sample Products, or Trainers. Upon receiving any such notice or upon any such discovery, each Party shall cease and desist from further shipments of such Products, sample Products or Trainers in its possession or control until a decision by AMAG has been made whether a Recall or some other corrective action is necessary. + +(b) Recalls. The decision to initiate a Recall or to take some other corrective action, if any, shall be made and implemented by AMAG in its sole discretion after consultation with Antares. AMAG shall be responsible for managing all Recalls and Antares shall cooperate with AMAG as AMAG may reasonably request. Subject to Antares' obligation to cover the costs set forth in Section 5.3(b), AMAG shall be responsible for all costs incurred due to the Recall of a Product, sample Product or Trainer. + +(c) Product Returns. AMAG shall have the responsibility for handling customer returns of the Products, sample Products and Trainers. + +5.3 Antares' Responsibility for Defective and Recalled Products. + +(a) Defective Product. [***]. + +(b) Recalled Product. [***]. + +5.4 Disposition of Defective or Recalled Products. AMAG shall not dispose of any damaged, defective, returned or Recalled Products, sample Products or Trainers in relation to which it intends to assert a claim against Antares without Antares' prior written authorization to do so, unless otherwise required by Applicable Laws. Alternatively, Antares may instruct AMAG to return such Products, sample Products and Trainers to Antares at Antares' expense. Antares shall bear the cost of disposition with respect to any damaged, defective, returned or Recalled Products, sample Products or Trainers in relation to which it bears responsibility under Sections 5.1, 5.2 or 5.3 hereof. In all other circumstances, AMAG shall bear the cost of disposition with respect to any damaged, defective, returned or Recalled Products, sample Products and Trainers. + +5.5 Customer Questions or Complaints. AMAG shall have the sole right and responsibility for responding to questions and complaints from AMAG's customers. Antares shall refer any questions and complaints (including safety and efficacy inquiries, quality complaints + +- 21 - + + + + + +[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED + +and adverse event reports) that it receives concerning the Device or the Products, sample Products or Trainers to AMAG (together with all available evidence and other information relating thereto) as soon as practicable and, in any event within [***] of Antares' receipt of such question or complaint; provided that all complaints concerning Product and sample Product tampering, contamination or mix-up (e.g., wrong ingredients) shall be delivered within [***] of Antares' receipt thereof. Antares shall not take any further action in connection with any such questions or complaints without the consent of AMAG, but shall cooperate in the investigation and closure of any such questions or complaints at the request of AMAG. Such assistance shall include follow-up investigations, including testing. In addition, Antares shall provide AMAG with all information to enable AMAG to respond properly to questions or complaints relating to the Products and sample Products as provided in the Quality Agreement. + +ARTICLE 6 CO-OPERATION; QUALITY AUDIT; REGULATORY FILINGS + +6.1 Governmental Agencies. Subject to the Regulatory Authority inspection obligations set forth in Section 6.3, Antares and/or its Subcontractor(s) may communicate with any Regulatory Authority regarding the Products, sample Products and Trainers only if, in the reasonable opinion of Antares' and/or its Subcontractor's counsel, such communication is necessary to comply with the terms of this Agreement or Applicable Laws; provided, however, that unless, in the reasonable opinion of Antares' and/or its Subcontractor's counsel, there is a legal prohibition against doing so, Antares shall notify AMAG reasonably in advance of any such communication and permit AMAG to accompany Antares and/or its Subcontractor and take part in any communications with such Regulatory Authority, and provide AMAG with copies of all such communications from such Regulatory Authority. + +6.2 Records and Accounting by Antares. Antares shall keep records of the manufacture, testing and shipping of the Products, sample Products and Trainers and retain samples of such Products, sample Products and Trainers as are necessary to comply with cGMPs, Applicable Laws, the Quality Agreement, and manufacturing regulatory requirements applicable to Antares, as well as to assist with resolving Product, sample Product and Trainer complaints and other similar investigations. Copies of such records and samples shall be retained for the respective periods set forth in the Quality Agreement. + +6.3 Regulatory Inspections. Antares shall permit the FDA and other Regulatory Authorities to conduct inspections of each Manufacturing Site as they may request, including pre-approval inspections, and shall cooperate with such Regulatory Authorities with respect to the inspections and any related matters, in each case which is related to the Device, Product or sample Product. Antares shall give AMAG notice within [***] of becoming aware of any such inspections, and keep AMAG reasonably informed about the results and conclusions of each regulatory inspection, including actions taken by Antares or its Subcontractor to + +- 22 - + + + + + +[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED + +remedy conditions cited in the inspections, to the extent such results and conclusions relate to the Device, Product or sample Product. In addition, Antares will promptly provide AMAG with copies of any written inspection reports issued by Regulatory Authorities and all correspondence between Antares and Regulatory Authorities, including, but not limited to, FDA Form 483, Notice of Observation, and all related correspondence, in each case only to the extent relating to the Device, Product or sample Product or general manufacturing concerns related to the Device, Product or sample Product, which in all cases may be reasonably redacted by Antares to protect confidential information of Antares or its partners, licensees or licensors. Antares agrees to promptly notify and provide AMAG copies of any request, directive or other communication of the FDA or other Regulatory Authority relating to the Device, Product or sample Product and to reasonably cooperate with AMAG in responding to such requests, directives and communications. + +6.4 Quality Audit. The Parties rights and obligations with respect to quality assurance audits are set forth in the Quality Agreement. + +6.5 Reports. Antares will promptly supply on an annual basis and when reasonably requested by AMAG from time to time, at no additional charge, all available information and data in its control that AMAG reasonably requires in order to complete any filing for, or apply for, obtain or maintain, regulatory approvals under any applicable regulatory regime (including any Annual Report that AMAG is required to file with the FDA), including without limitation information relating to the Manufacturing Site, Development Report (as described in ICH guidelines), Manufacturing Services, Device, Product, sample Product, Trainers or the process, methodology, raw materials and intermediates used in the manufacture, processing, or packaging of the Device, Product, sample Product or Trainers, release test results, complaint test results, all investigations (in manufacturing, testing and storage), and all information required to be submitted in the CMC (chemistry, manufacturing and controls) section of an IND or a NDA or other regulatory filings, or required or requested to be provided to any Regulatory Authority. At AMAG's reasonable written request, Antares shall be responsible for supporting AMAG's Annual Product Review Report, consistent with cGMPs, Applicable Laws, and customary FDA or other Regulatory Authority requirements. Any additional report requested by AMAG beyond the scope of what is required or recommended under cGMPs, Applicable Laws and customary FDA or other Regulatory Authority requirements shall be subject to an additional fee to be agreed upon between Antares and AMAG. In addition, Antares shall cooperate with AMAG with respect to all reporting obligations relevant to the Product, sample Product and Trainers under Applicable Laws. + +6.6 Regulatory Filings. Responsibility for regulatory filings shall be as set forth in Section 4.1 of the Development and License Agreement. + +- 23 - + + + + + +[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED + +ARTICLE 7 TERM AND TERMINATION + +7.1 Term. Subject to early termination of this Agreement pursuant to Sections 7.2, 7.3 or 7.4, this Agreement shall become effective as of the Effective Date and shall continue until the expiration or earlier termination of the Development and License Agreement (the "Term"). + +7.2 Termination By AMAG. This Agreement may be terminated in its entirety by AMAG, upon AMAG's prior written notice to Antares: + +(a) Subject to Sections 11.1 and 12.4, if Antares commits a material breach of this Agreement and such material breach remains uncured for [***] following written notice of breach by Antares. Notwithstanding the foregoing, AMAG's termination rights with respect to an Antares' failure to supply Products, sample Products or Trainers, including a Supply Failure, are not subject this Section 7.2(a) and are set forth in Section 7.2(b); + +(b) Subject to Section 12.4, if a Supply Failure remains uncured for [***] following written notice of such failure to Antares; provided, however, that AMAG may not terminate this Agreement if Antares' failure to supply Products, sample Products or Trainers is a result of Force Majeure Event under Section 12.4 or AMAG's breach of this Agreement including, but not limited to, failure to provide adequate quantities of Prefilled Syringe; + +(c) If Antares is subject to a petition for relief under any bankruptcy legislation, or makes an assignment for the benefit of creditors, or is subject to the appointment of a receiver for all or a substantial part of Antares' assets, and such petition, assignment or appointment prevents Antares (as a legal or as a practical matter) from performing its obligations under this Agreement, or such petition, assignment or appointment is not otherwise dismissed or vacated within [***]; or + +(d) Upon [***] written notice to Antares in the event that AMAG permanently ceases commercializing the Product for efficacy or safety reasons, as evidenced by the placement of the Product on the Discontinued Drug Product List of the FDA Orange Book publication ("Approved Drug Products with Therapeutic Equivalence Evaluations"). + +7.3 Termination by Antares. This Agreement may be terminated in its entirety by Antares upon Antares' prior written notice to AMAG: + +(a) Subject to Sections 11.1 and 12.4, if AMAG commits a material breach of this Agreement and such material breach remains uncured for [***] following written notice of breach by Antares; + +- 24 - + + + + + +[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED + +(b) If AMAG is subject to a petition for relief under any bankruptcy legislation, or makes an assignment for the benefit of creditors, or is subject to the appointment of a receiver for all or a substantial part of AMAG's assets, and such petition, assignment or appointment prevents AMAG (as a legal or as a practical matter) from performing its obligations under this Agreement, or such petition, assignment or appointment is not otherwise dismissed or vacated within [***]; or + +(c) Upon [***] written notice to AMAG in the event that AMAG permanently ceases commercializing the Product for efficacy or safety reasons, as evidenced by the placement of the Product on the Discontinued Drug Product List of the FDA Orange Book publication ("Approved Drug Products with Therapeutic Equivalence Evaluations"). + +7.4 Co-Termination. Without further action by either Party, this Agreement shall automatically terminate effective immediately upon the termination of the Development and License Agreement in its entirety, subject to the provisions that expressly survive the termination thereof. + +7.5 Remedies for Material Breach. + +(a) Remedies for AMAG. Subject to Sections 11.1 and 12.4, in the event of an uncured material breach by Antares that would entitle AMAG to terminate this Agreement under Section 7.2(a) and Section 7.2(b), in addition to and independent of AMAG's right to terminate this Agreement, AMAG may seek monetary damages (whether or not this Agreement is terminated) for such material breach and/or equitable relief to prevent such material breach from continuing or occurring again in the future. + +(b) Remedies for Antares. Subject to Sections 11.1 and 12.4, in the event of a uncured material breach by AMAG that would entitle Antares to terminate this Agreement under Section 7.3(a), in addition to and independent of Antares' right to terminate this Agreement, Antares may seek monetary damages (whether or not this Agreement is terminated) for such material breach and/or equitable relief to prevent such material breach from continuing or occurring again in the future. + +7.6 Effects of Expiration or Termination of this Agreement. + +(a) If this Agreement expires or is terminated for any reason, then (in addition to any other remedies either Party may have in the event of material breach by the other Party): + +[***]. + +(b) [***]. + +(c) [***]. + +- 25 - + + + + + +[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED + +(d) [***]. + +(e) Except with respect to AMAG's right to sell off existing inventory as set forth in Section 7.6(d), the Parties acknowledge and agree that following any expiration or termination of this Agreement, all rights and licenses granted to AMAG under this Agreement or the Development and License Agreement shall terminate and AMAG shall cease using and selling any Products, sample Products or Trainers. + +(f) Any termination or expiration of this Agreement shall not affect any outstanding obligations or payments due hereunder prior to such termination or expiration, nor shall it prejudice any other remedies that the Parties may have under this Agreement or Applicable Laws (except as otherwise provided in this Agreement). For greater certainty, termination of this Agreement for any reason shall not affect the obligations and responsibilities of the Parties pursuant to ARTICLE 1 (Interpretation), ARTICLE 9 (Remedies and Indemnities) (provided that, the obligation to maintain the insurance coverages set forth in Section 9.3 shall only survive for the time period set forth therein), ARTICLE 10 (Confidentiality), ARTICLE 11 (Dispute Resolution), and Sections 2.9 (Retained Samples) (for the period set forth therein), 4.4 (Taxes), 5.2 (Product Recalls and Returns); 5.5 (Customer Questions or Complaints) (for a period of [***] from the date of termination or expiration); 6.2 (Regulatory and Accounting by Antares) (for the period set forth therein), 7.6 (Effects of Expiration or Termination of this Agreement), 12.1 (Agency), 12.2 (Assignment) 12.5 (Notices), 12.6 (Amendment), 12.7 (Waiver) and 12.10 (Governing Law), all of which survive any termination or expiration. + +(g) Termination, relinquishment or expiration of the Agreement for any reason shall be without prejudice to any rights which shall have accrued to the benefit of either Party prior to (or as a result of, including, without limitation, rights available under law and equity) such termination, relinquishment or expiration. Such termination, relinquishment or expiration shall not relieve either Party from obligations that are expressly indicated to survive termination or expiration of the Agreement. + +7.7 [***]. + +ARTICLE 8 REPRESENTATIONS, WARRANTIES AND COVENANTS + +8.1 Authority. Each Party hereby represents, warrants and covenants to the other Party that: (i) it has the full right and authority to enter into this Agreement and to grant to the other Party the rights granted to such other Party under this Agreement, (ii) it has obtained all necessary corporate approvals to enter and execute this Agreement, and (iii) that it is not aware of any impediment that would inhibit its ability to perform its obligations hereunder. + +- 26 - + + + + + +[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED + +8.2 AMAG Warranties. AMAG hereby represents, warrants and covenants to Antares as follows: + +(a) AMAG, or a Third Person manufacturing Drug and Pre-Filled Syringes on behalf of AMAG, shall manufacture the Drug and Pre-Filled Syringe in accordance with the Specifications, cGLP, cGCP, cGMP and cQSRs, this Agreement, the Quality Agreement and Applicable Laws including, without limitation, federal, state, or local laws, regulations, or guidelines governing manufacturing at the site where such manufacturing is being conducted; + +(b) AMAG, or a Third Person manufacturing Drug and Pre-Filled Syringes on behalf of AMAG, shall obtain and maintain all necessary licenses, permits and approvals required by Applicable Laws in connection with the manufacture the Drug and Pre-Filled Syringe, and supply of Drug and Prefilled Syringes to Antares or its Subcontractor; + +(c) That all Drug or Prefilled Syringes manufactured by AMAG, or a Third Person on behalf of AMAG, when delivered to Antares or its Subcontractor (i) will comply with applicable Product Specifications and Certificate of Analysis (PFS Manufacture); (ii) will not be adulterated or misbranded within the meaning of any Applicable Laws effective at the time of delivery and will not be an article which may not be introduced into interstate commerce under any Applicable Laws; (iii) will be delivered to Antares or its Subcontractor (as the case may be) free and clear of all liens and encumbrances, and (iv) will be in compliance with cGMPs and all Applicable Laws; + +(d) That all Products and sample Products, when released by AMAG for distribution, sale or use pursuant to Section 2.6(b)(v)(D): (i) will comply with applicable Product Specifications, Batch Record, Certificate of Analysis Certificate of Analysis (PFS Manufacture), the Certificate of Analysis (PFS ID Testing), Certificate of Analysis (Product) and the Certificate of Conformance (Product); (ii) will not be adulterated or misbranded within the meaning of any Applicable Laws effective at the time of delivery and will not be an article which may not be introduced into interstate commerce under any Applicable Laws; and (iii) will be in compliance with cGMPs and all Applicable Laws; + +(e) Prior to the first commercial sale by AMAG or a Third Person on behalf of AMAG of Products, sample Product and Trainers in a given market, the Products, sample Product and Trainers, if labelled and manufactured in accordance with the Specifications and in compliance with applicable cGMPs and Applicable Laws, have received the necessary marketing approvals from applicable Regulatory Authorities for sale, distribution and use in such market; + +- 27 - + + + + + +[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED + +(f) AMAG has the requisite legal title and ownership under its intellectual property necessary for it to fulfill its obligations under this Agreement, and that there is no pending or threatened litigation, arbitration, government proceeding, or government investigation (and AMAG has not received any communication relating thereto) which alleges that AMAG's past activities relating to the Drug or activities proposed under this Agreement infringe or misappropriate any of the intellectual property rights of any Third Person, and to AMAG's actual knowledge, there is no intellectual property of any Third Person that would be infringed or misappropriated by Antares or its Subcontractor carrying out the Manufacturing Services in accordance with this Agreement; and + +(g) AMAG agrees that federal securities law may prohibit it, its Affiliates and its representatives from purchasing or selling any securities of Antares while it is in possession of material, non-public information of Antares, and that it will not disclose any material, non-public information, directly or indirectly, to any party for the purpose of encouraging such party to trade in Antares's securities and that it will comply at all times with the applicable securities laws and regulations. + +8.3 Antares Warranties. Antares hereby represents, warrants and covenants to AMAG as follows: + +(a) Antares or its Subcontractor shall perform the Manufacturing Services in accordance with the Specifications, cGLP, cGCP, cGMPs and cQSRs, this Agreement, the Quality Agreement and Applicable Laws including, without limitation, federal, state, or local laws, regulations, or guidelines governing manufacturing at the Manufacturing Sites; + +(b) Antares or its Subcontractor shall obtain and maintain all necessary licenses, permits and approvals required by Applicable Laws in connection with the Manufacturing Services, manufacture of Devices and supply of Products, sample Products or Trainers to AMAG; + +(c) As of the Effective Date, Antares has disclosed to AMAG any and all FDA Form 483's, warning letters or similar notices relating to the Manufacturing Site and import alerts for any other products manufactured in the Manufacturing Site issued during the last [***]; + +(d) [***]; + +(e) Antares has the requisite legal title and ownership of intellectual property necessary for it to fulfill its obligations under this Agreement, and that there is no pending or threatened litigation, arbitration, government proceeding, or government investigation (and Antares has not received any communication relating thereto) which alleges that Antares' past activities relating to [***] devices or activities proposed under this + +- 28 - + + + + + +[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED + +Agreement infringe or misappropriate any of the intellectual property rights of any Third Person, and to Antares' actual knowledge, there is no intellectual property of any Third Person that would be infringed or misappropriated by AMAG fulfilling any of its obligations or exercising any of its rights under this Agreement; and + +(f) Antares agrees that federal securities law may prohibit it, its affiliates and its representatives from purchasing or selling any securities of AMAG while it is in possession of material, non-public information of AMAG, and that it will not disclose any material, non-public information, directly or indirectly, to any party for the purpose of encouraging such party to trade in AMAG's securities and that it will comply at all times with the applicable Federal Securities Laws and regulations. + +(g) [***]. + +8.4 Debarred Persons. Each of the Parties covenants, represents and warrants that: (i) neither it nor any of its employees or, subcontractors performing Manufacturing Services have been "debarred" by the FDA, or subject to a similar sanction from another Regulatory Authority; nor have debarment proceedings against said Party or any of its employees or subcontractors performing Manufacturing Services been commenced; and (ii) it will not in the performance of its obligations under this Agreement use the services of any person debarred or suspended by the FDA as described in 21 U.S.C. §335(a) or (b). Said Party will promptly notify the other Party in writing if any such debarment proceedings have commenced or if said Party or any of its employees or subcontractors performing Manufacturing Services are debarred by the FDA or other Regulatory Authorities. Each of the Parties further covenants, represents and warrants that it does not currently have, and will not hire, as an officer or an employee any person who has been convicted of a felony under the laws of the United States for conduct relating to the regulation of any drug product under the Federal Food, Drug, and Cosmetic Act. + +8.5 Permits. As between the Parties, AMAG shall be solely responsible for obtaining or maintaining, on a timely basis, any permits or other Regulatory Approvals in respect of the Products, sample Products, Trainers, Specifications, including, without limitation, all marketing and post-marketing approvals. + +8.6 No Warranty. NEITHER PARTY MAKES ANY REPRESENTATION OR WARRANTY OF ANY KIND, EITHER EXPRESSED OR IMPLIED, BY FACT OR LAW, OTHER THAN THOSE EXPRESSLY SET FORTH IN THIS AGREEMENT, INCLUDING WITHOUT LIMITATION ANY WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE OR WARRANTY OF MERCHANTABILITY OR WARRANTY OF NON-INFRINGEMENT OF THIRD PERSON RIGHTS. + +- 29 - + + + + + +[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED + +ARTICLE 9 REMEDIES AND INDEMNITIES + +9.1 Antares' Right to Indemnification. AMAG shall indemnify each of Antares, its Affiliates, its Subcontractors and their respective successors and assigns, and the directors, officers, employees, and agents thereof (the "Antares Indemnitees"), defend and hold each Antares Indemnitee harmless from and against any and all liabilities, damages, losses, settlements, claims, actions, suits, penalties, fines, costs or expenses (including, without limitation reasonable attorneys' fees) (any of the foregoing, "Damages") incurred by or asserted against any Antares Indemnitee of whatever kind or nature, including, without limitation, any claim or liability based upon negligence, warranty, strict liability, violation of government regulation or infringement of patent or other proprietary rights, but only to the extent arising from or occurring as a result of a claim or demand made by a Third Person (a "Third Person Claim") against any Antares Indemnitee because of (a) breach of any warranty made by AMAG pursuant to Section 8.2 hereof; (b) the Product, sample Product or Trainer (including the content of any labelling and the decision to release the Product, sample Product or Trainer) unless attributable to an item identified in Section 9.2 below which is under the responsibility of Antares or its Subcontractors; (c) the distribution or detailing of any Product, sample Product or Trainer by or on behalf of AMAG or its sublicensees, except to the extent such claim is attributable to an item identified in Section 9.2(f) below which is under the responsibility of Antares; (d) any allegation that the manufacture, use, sale, offer for sale or importation of a Product, sample Product or Trainer infringes any patent, other intellectual property rights or other proprietary rights of a Third Person, except to the extent such infringement relates to the manufacture, use, sale, offer for sale or importation of a Device (including a Device incorporated into a Product) or any delivery system including the Device; or (e) any breach of this Agreement by AMAG, except, in each such case, to the extent that such Damages are finally determined to have resulted from the negligence or misconduct of Antares. Antares shall promptly notify AMAG of any Third Person Claim upon becoming aware thereof, and shall permit AMAG, at AMAG's cost, to defend against such Third Person Claim and to control the defense and disposition (including, without limitation, selection its counsel and all decisions to litigate, settle or appeal) of such claim, and shall cooperate in the defense thereof. Antares may, at its option and expense, have its own counsel participate in any proceeding that is under the direction of AMAG and shall cooperate with AMAG and its insurer in the disposition of any such matter. + +9.2 AMAG's Right to Indemnification. Antares shall indemnify each of AMAG, its Affiliates, and their respective successors and assigns, and the directors, officers, employees, and agents thereof (the "AMAG Indemnitees"), defend and hold each AMAG Indemnitee harmless from and against any and all Damages incurred by or asserted against any AMAG Indemnitee of whatever kind or nature, including, without limitation, any claim or liability based upon negligence, warranty, strict liability, violation of government regulation or infringement of + +- 30 - + + + + + +[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED + +patent or other proprietary rights, but only to the extent arising from or occurring as a result of a Third Person Claim against any AMAG Indemnitee because of (a) breach of any warranty made by Antares pursuant to Section 8.3 hereof; (b) any alleged defect in the design or functionality of the Device; (c) the failure by Antares or its Subcontractors to provide the Manufacturing Services according to Specifications, except to the extent AMAG approved such failure pursuant to its in process acceptance activities set forth in the Quality Agreement; (d) [***]; (e) the warehousing or shipping of a Product, sample Product or Trainer by Antares, except to the extent such claim alleges infringement of any patent, other intellectual property rights or other proprietary rights of a Third Person; (f) any allegation that the Manufacturing Services performed under this Agreement or the manufacture, use, sale, offer for sale or importation of a Device (including a Device incorporated into a Product) or any delivery system including the Device, in such cases, infringes any patent, other intellectual property rights or other proprietary rights of a Third Person; or (g) any breach of this Agreement by Antares, except, in each such case, to the extent that such Damages are finally determined to have resulted from the negligence or misconduct of AMAG or a sublicensee of AMAG. AMAG shall promptly notify Antares of any Third Person Claim upon becoming aware thereof, and shall permit Antares at Antares' cost to defend against such Third Person Claim and to control the defense and disposition (including, without limitation, selection its counsel and all decisions to litigate, settle or appeal) of such Third Person Claim and shall cooperate in the defense thereof. AMAG may, at its option and expense, have its own counsel participate in any proceeding that is under the direction of Antares and will cooperate with Antares or its insurer in the disposition of any such matter. + +9.3 Insurance. Each Party shall obtain and maintain commercial general liability insurance, including product liability insurance covering the obligations of that Party under this Agreement through the Term and for a period of [***] thereafter, which insurance shall afford limits of not less than (i) $[***] for each occurrence; and (ii) $[***] in the aggregate per annum. Such insurance may be provided in more than one separate insurance policy and/or on claims made or claims made and reported forms as is common in the insurance marketplace for similar risks. If requested each Party will provide the other with a current and valid certificate of insurance evidencing the above and showing the name of the issuing company, the policy number, the effective date, the expiration date and the limits of liability. If a Party is unable to maintain the insurance policies required under this Agreement through no fault on the part of such Party, then such Party shall forthwith notify the other Party in writing and the Parties shall in good faith negotiate appropriate amendments to the insurance provision of this Agreement in order to provide adequate assurances. + +9.4 Limitation of Liability. + +[***]. + +- 31 - + + + + + +[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED + +ARTICLE 10 CONFIDENTIALITY + +Articles 17 and 18 of the Development and License Agreement are hereby incorporated by reference herein and made a part of this Agreement. + +ARTICLE 11 DISPUTE RESOLUTION + +11.1 Commercial Disputes. In the event of any dispute arising out of or in connection with this Agreement [***], the Parties shall first try to solve it amicably. In this regard, any Party may send a notice of dispute to the other, and each Party shall appoint, within [***] from receipt of such notice of dispute, a senior executive representative having full power and authority to solve the dispute. The representatives so designated shall meet as necessary in order to solve such dispute. If the dispute has not been resolved within [***] after the end of the [***] negotiation period referred to above (which period may be extended by mutual agreement), then such dispute shall be subject to any other remedy available under this Agreement or at law or equity. + +11.2 [***]. + +ARTICLE 12 MISCELLANEOUS + +12.1 Agency. Neither Party is, nor shall be deemed to be, an employee, agent, co-venturer or legal representative of the other Party for any purpose. Neither Party shall be entitled to enter into any contracts in the name of, or on behalf of the other Party, nor shall either Party be entitled to pledge the credit of the other Party in any way or hold itself out as having the authority to do so. + +12.2 Assignment. Except as otherwise provided in this Section 12.2, neither this Agreement nor any interest hereunder shall be assignable by any Party without the prior written consent of the other (which consent shall not be unreasonably withheld, conditioned or delayed); provided, however, that either Party may assign this Agreement to any wholly-owned subsidiary or to any successor by merger or sale of substantially all of its business unit to which this Agreement relates. This Agreement shall be binding upon the successors and permitted assignees of the Parties. Any purported assignment in violation of this paragraph shall be void and ineffectual and shall not operate to transfer or assign any interest or title to the purported assignee. + +12.3 Further Actions. Each Party agrees to execute, acknowledge and deliver such further instruments, and to do all such other acts, as may be necessary or appropriate in order to carry out the purposes and intent of this Agreement. + +- 32 - + + + + + +[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED + +12.4 Force Majeure. Neither Party shall be liable to the other for loss or damages or shall have any right to terminate this Agreement for any default or delay attributable to any force majeure event outside of the affected Party's reasonable control, including, but not limited to, acts of God, acts of government, war, fire, flood, earthquake, terrorist acts, strike, labor dispute and the like (each, a "Force Majeure Event"), if the Party affected shall give prompt notice of any such cause to the other Party. The Party giving such notice shall thereupon be excused from such of its obligations hereunder as it is disabled by the Force Majeure Event from performing for so long as it is so disabled; provided, however, that such affected Party commences and continues to take reasonable and diligent actions to cure such cause throughout such disability. + +12.5 Notices. All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally or by electronic mail or facsimile transmission (receipt verified), telexed, mailed by registered or certified mail (return receipt requested), postage prepaid, or sent by express courier service, to the Parties at the following addresses (or at such other address for a Party as shall be specified by like notice; provided, that notices of a change of address shall be effective only upon receipt thereof): + +If to AMAG, addressed to: AMAG Pharmaceuticals, Inc. + +[***] 1100 Winter Street Waltham, MA 02451 [***] + +With a copy to: [***] AMAG Pharmaceuticals, Inc. 100 Winter Street Waltham, MA 02451 [***] + +If to Antares, addressed to: Antares Pharma, Inc. + +[***] 100 Princeton South, Suite 300 Ewing, NJ 08628 [***] + +with a copy to: General Counsel Antares Pharma, Inc. 100 Princeton South, Suite 300 Ewing, NJ 08628 [***] + +- 33 - + + + + + +[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED + +12.1 Amendment. No amendment, modification or supplement of any provision of the Agreement shall be valid or effective unless made in writing and signed by a duly authorized officer of each Party. + +12.2 Waiver. No provision of the Agreement shall be waived by any act, omission or knowledge of a Party or its agents or employees except by an instrument in writing expressly waiving such provision and signed by a duly authorized officer of the waiving Party. No waiver of any term, provision or condition of this Agreement whether by conduct or otherwise in any one or more instances shall be deemed to be or construed as a further or continuing waiver of any such term, provision or condition or of any other term, provision or condition of this Agreement. + +12.3 Counterparts; Electronic Copies. The Agreement may be executed simultaneously in two or more counterparts, either one of which need not contain the signature of more than one Party but both such counterparts taken together shall constitute one and the same agreement. A facsimile transmission or portable document format (PDF) electronic transmission of this signed Agreement by a Party's authorized representative shall be legal and binding upon such Party. + +12.4 Descriptive Headings. The descriptive headings of this Agreement are for convenience only, and shall be of no force or effect in construing or interpreting any of the provisions of this Agreement. + +12.5 Governing Law; Choice of Forum. This Agreement shall be governed by and interpreted in accordance with the substantive laws of the State of New York, without regard to its conflict of law provisions. The Parties agree that the United Nations Convention on Contracts for the International Sale of Goods does not apply to this Agreement. Except as otherwise provided in ARTICLE 11, all claims and proceedings under this Agreement shall be brought exclusively in the state or federal courts of competent subject matter jurisdiction in New York City, State of New York. The Parties hereby waive (i) any objection which it may have at any time to the venue of the proceeding in any such court, (ii) any claim that such proceedings have been brought in an inconvenient forum, and (iii) the right to object, with respect to such proceedings, that such court does not have any jurisdiction over such Party. + +12.6 Severability. Whenever possible, each provision of the Agreement will be interpreted in such manner as to be effective and valid under Applicable Law, but if any provision of the Agreement is held to be prohibited by or invalid under Applicable Law, such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of the Agreement. In the event of such invalidity, the Parties shall seek to agree on an alternative enforceable provision that preserves the original purpose of this Agreement. + +- 34 - + + + + + +[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED + +12.7 Entire Agreement of the Parties. This Agreement, including the Exhibits attached hereto, the Quality Agreement and the Development and License Agreement constitute and contain the complete, final and exclusive understanding and agreement of the Parties hereto, and cancels and supersedes any and all prior negotiations, correspondence, understandings and agreements, whether oral or written, between the Parties respecting the subject matter hereof. In the event there is a discrepancy between the Exhibits and the Agreement, the Agreement shall control, provided that to the extent there is a discrepancy between the Quality Agreement and the Agreement, the Quality Agreement shall control with respect to quality-related matters; and this Agreement shall control with respect to all other matters. Furthermore, to the extent that any provision of this Agreement is inconsistent with any provision of the Development and License Agreement, this Agreement shall control and then only to the extent of the inconsistency. For the avoidance of doubt, this Agreement supersedes and replaces Sections 10.2 and 10.3 of the Development and License Agreement. + +12.8 Jointly Prepared. This Agreement has been prepared jointly by both Parties and shall not be strictly construed against either Party. + +[Signature page follows.] + +- 35 - + + + + + +[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED + +IN WITNESS WHEREOF, the duly authorized representatives of the Parties have executed this Agreement as of the date first written above. + +ANTARES PHARMA, INC. + +By: /s/ Patrick Madsen + +Name: Patrick Madsen Title: Senior Vice President, Operations + +AMAG PHARMACEUTICALS, INC. + +By: /s/ William K. Heiden + +Name: William K. Heiden Title: President and Chief Executive Officer + +[Signature Page to Manufacturing Agreement] + + + + + +[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED + +EXHIBIT A + +LONG LEAD TIME MATERIALS + +Part Name Material Specification Lead-Time [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] + +[***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] + +[Exhibit A to Manufacturing Agreement] + + + + + +[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED + +EXHIBIT B + +PRODUCT SPECIFICATIONS + +[***] + +[Exhibit B to Manufacturing Agreement] + + + + + +[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED + +EXHIBIT C + +TRAINER SPECIFICATIONS + +[***] + +[Exhibit C to Manufacturing Agreement] + + + + + +[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED + +EXHIBIT D + +TRANSFER PRICE + +The "Transfer Price" to be paid by AMAG to Antares for each Product, sample Product and Trainer delivered to AMAG or AMAG's designee under this Agreement during the Term shall be determined as follows: + +[***] + +[Exhibit D to Manufacturing Agreement] + + + + + +[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED + +EXHIBIT E + +QUALITY AGREEMENT + +[***] + +[Exhibit E to Manufacturing Agreement] + + + + + +[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED + +EXHIBIT F + +BATCH NUMBERING AND EXPIRATION DATES + +[***] + +[Exhibit F to Manufacturing Agreement] + + + + + +[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED + +EXHIBIT G + +RETAINED SAMPLES + +Part Number Description [***] [***] [***] [***] [***] [***] [***] [***] + +[Exhibit G to Manufacturing Agreement] + + + + + +[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED + +EXHIBIT H + +INITIAL FORECAST + +[***] + +[Exhibit H to Manufacturing Agreement] + + + + + +[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED + +EXHIBIT I + +REDUNDANCY PLAN + +Item Financial Responsibility Primary Back-up On Hand + +[***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] + +[Exhibit I to Manufacturing Agreement] + + + + + +[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED + +EXHIBIT J + +[***] + +[Exhibit J to Manufacturing Agreement] + + + + + +[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED + +EXHIBIT K + +AMAG EQUIPMENT + +The following molds: + +Part Number Description + +[***] [***] + +[***] [***] + +[***] [***] + +[Exhibit K to Manufacturing Agreement] + + + + + +[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED + +EXHIBIT L + +FORM OF CHANGE ORDER + +[***] + +[Exhibit L to Manufacturing Agreement] \ No newline at end of file diff --git a/full_contract_txt/Apollo Endosurgery - Manufacturing and Supply Agreement.txt b/full_contract_txt/Apollo Endosurgery - Manufacturing and Supply Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..974c0b18546b3cf8a471e00db8a9638f60930060 --- /dev/null +++ b/full_contract_txt/Apollo Endosurgery - Manufacturing and Supply Agreement.txt @@ -0,0 +1,465 @@ +Exhibit 10.19 CONFIDENTIAL TREATMENT REQUESTED Certain portions of this document have been omitted pursuant to a request for Confidential Treatment and, where applicable, have been marked with "[***]" to indicate where omissions have been made. The confidential material has been filed separately with the Securities and Exchange Commission. + +MANUFACTURING AND SUPPLY AGREEMENT + +This Manufacturing and Supply Agreement (this "Agreement") is entered into as of the Effective Date (as defined below) by and between (1) Apollo Endosurgery, Delaware corporation having offices at 1120 S Capital of Texas Highway #300, Austin, TX 78746 ("APOLLO"), and (2) Establishment Labs, S.A a corporation organized under the laws of Costa Rica and having a principal place of business at Coyol Free Zone, B15, Alajuela, 20113, Costa Rica ("ESTABLISHMENT"). APOLLO and ESTABLISHMENT shall hereinafter be individually referred to as a "Party" and collectively as the "Parties." + +RECITALS + +A. APOLLO is engaged in the research and development, manufacture, distribution and marketing of certain medical devices. + +B. ESTABLISHMENT is engaged in the contract manufacturing and packaging of certain medical device products. + +C. APOLLO desires that ESTABLISHMENT be the manufacturer and supplier of the product(s) outlined on Exhibit A of this Agreement ("Product") for APOLLO. + +D. APOLLO and ESTABLISHMENT desire to enter into this Agreement governing the supply of the Product upon the terms and conditions contained herein. + +AGREEMENT + +NOW THEREFORE, in consideration of the covenants contained herein, the above recitals, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto agree as follows: + +1. DEFINITIONS + +1.1"Affiliates" of a Party shall mean any corporation or other business entity controlling, controlled by, or under common control with such Party. + +1.2"Certificate of Conformance" or "COC" shall mean a document prepared by ESTABLISHMENT containing at a minimum: product name, Lot (defined below) number, lot quantity and a statement indicating compliance to all product specifications. Each COC shall be signature approved by ESTABLISHMENT's Quality Assurance department. + +1.3"Control" (including "controlling", "controlled by" and "under common control with" of any party, corporation, or other business entity) shall mean the direct or indirect ownership of at least fifty percent (50%) of the voting or income interest in such party, corporation, or other business entity, respectively. + +-1- + + + + + +1.4"Current Good Manufacturing Practices" (abbreviated "GMPs" or "cGMPs") shall mean, a) for any period during the Term during which ESTABLISHMENT has received FDA certification, the standards established by the United States Food and Drug Administration (the "FDA") for current Good Manufacturing Practices, as specified in FDA 21 C.F.R. §820 Quality Systems Regulations (or its successor provisions); and b) ISO 13485 Medical Devices - Quality Management Systems and other sections so designated by the title "Good Manufacturing Practices"; and c) as applicable to each respective Product to be manufactured and/or supplied by ESTABLISHMENT. + +1.5"Effective Date" shall mean December 5, 2014. + +1.6"Facilities" shall mean ESTABLISHMENT's manufacturing facilities at Coyol Free Zone, B15, Alajuela, 20113, Costa Rica. + +1.7"Lead Time" shall mean the time period that begins on the day ESTABLISHMENT receives a Purchase Order (defined below) for Product from APOLLO and ends on the day ESTABLISHMENT is required to deliver the Product to APOLLO. + +1.8"Lot" shall mean a defined quantity of starting material, packaging material or product processed in one process or series of processes so that it could be expected to be homogeneous. + +1.9"Product" shall mean the product(s) to be manufactured and supplied by ESTABLISHMENT to APOLLO under Purchase Order(s) issued under this Agreement and as more specifically detailed in Exhibit A attached hereto. + +1.10 "Purchase Order" shall mean a written purchase order issued to ESTABLISHMENT by APOLLO for the purchase of Product under this Agreement. + +1.11"Span of Control" shall mean all operational activities that are necessary to occur at ESTABLISHMENT and component suppliers, if any, that are related to the procurement and manufacture of the Product. + +1.12 "Specifications" shall mean the Product specifications provided to ESTABLISHMENT by APOLLO. The Specifications shall include all necessary test protocols, packaging and labeling specifications, bills of materials and other documentation required to describe, control, and assure the quality of the manufacture of the Product. + +1.13 "WIP" shall mean Work In Progress. + +2. TERM AND TERMINATION + +2.1Term. This Agreement shall commence on the Effective Date and shall be valid for a period of five (5) years with automatic renewal of one year thereafter until terminated + +-2- + + + + + +by either party with one (1) year written notice prior to the expiration of the initial period or any extension period thereof. + +2.2Termination. + +(a) Either Party may terminate this Agreement (i) for material breach upon one hundred and twenty (120) days written notice specifying the nature of the breach, if such breach has not been substantially cured within the one hundred twenty (120) day period, or (ii) if the other Party shall formally declare bankruptcy, insolvency, reorganization, liquidation, or receivership; or is named in an action for bankruptcy, insolvency, reorganization, liquidation, or receivership proceedings, and fails to remove itself from such proceedings within ten (90) days from the date of institution of such proceedings. + +(b) In the event this Agreement is terminated for reasons other than material breach by ESTABLISHMENT, APOLLO shall pay ESTABLISHMENT for all work, material purchases, WIP and finished goods performed pursuant to any unfinished Purchase Order(s) prior to such termination in addition to reparation charges outlined on Exhibit A of this Agreement. + +(c) In the event this Agreement is terminated for any reason, ESTABLISHMENT shall promptly cease performing any work not necessary for the orderly close out of the affected Purchase Order(s) or for the fulfillment of regulatory requirements. + +(d) Within thirty (30) days following the termination of this Agreement, and upon receiving payment for any outstanding invoices for previously fulfilled Purchase Orders, ESTABLISHMENT shall deliver to APOLLO all data and materials provided by APOLLO to ESTABLISHMENT for the manufacturing and supply activities under the impacted Purchase Order(s). Within this same timeframe APOLLO shall provide ESTABLISHMENT any reasonable compensation relative to work, materials, and WIP purchased specifically to support APOLLO's Product. Termination of this Agreement, for any reason, shall not release either Party from liability which at said time has already incurred, nor affect in any way the survival of any rights, duties or obligations of either Party which are expressly stated elsewhere in this Agreement to survive termination. Without limiting the generality of the foregoing, the Parties agree that Sections 2.2 and Articles 6, 7, 8, 9, and 10 shall survive termination of this Agreement for any reason. + +3. MANUFACTURE AND SUPPLY OF PRODUCT + +3.1Performance Standards. ESTABLISHMENT shall manufacture the Product in accordance with the Specifications of this Agreement, and shall comply with all quality system requirement communicated by Apollo from time to time, ISO 13485:2012 and any applicable cGMPs and all other applicable local, United States or European regulations or laws in connection with the manufacture, testing, packaging, labeling, shipping, and handling of the Product. + +-3- + + + + + +(a) ESTABLISHMENT shall be responsible for normal and daily maintenance of all consigned equipment provided by APOLLO, as described in Exhibit C. APOLLO will be responsible for all other repair and/or replacement costs relating to loaned or consigned equipment due to normal wear and use. Unless otherwise agreed upon in writing, at APOLLO's sole discretion, this equipment will be insured by APOLLO while located in ESTABLISHMENT's manufacturing plants. + +3.2ESTABLISHMENT Representations. ESTABLISHMENT makes the following representations to APOLLO: + +(a) ESTABLISHMENT is duly organized, validly existing and in good standing under the laws of Costa Rica. ESTABLISHMENT has all requisite power and authority to own, operate and lease its properties and to carry on its business as now conducted. ESTABLISHMENT has full corporate power and authority to execute, deliver and perform this Agreement; all corporate actions of ESTABLISHMENT necessary for such execution, delivery and performance have been duly taken; and this Agreement is a valid and binding obligation of ESTABLISHMENT. + +ESTABLISHMENT shall perform all manufacturing, storage, handling, and testing of the Product(s) at the Facilities. ESTABLISHMENT warrants that the Facilities have been periodically inspected by its Notified Body's representatives and auditors and/or any other required government agency and are in good standing with said governmental agencies, are fully compliant with ISO 13485:2012 and that all employees working on the Product whose responsibilities involve work which must be performed under ISO 13485:2012 standards have been properly trained in the requirements of those standards. ESTABLISHMENT additionally warrants that the Facilities hold all necessary licenses and permits from applicable local, national, and European regulatory bodies, required for the manufacture and testing of the Product and that all such licenses and permits are in full force and effect. + +(b) ESTABLISHMENT shall comply with all applicable export and import control laws and regulations. + +3.3Suppliers. Except as otherwise agreed upon in writing ESTABLISHMENT assumes the responsibility for interacting with all chemical, component and packaging suppliers as required to deliver the Product in accordance with the applicable Purchase Order, including the Specifications, and this Agreement. Payment to the suppliers shall be handled directly by ESTABLISHMENT unless otherwise agreed upon in writing by APOLLO. ESTABLISHMENT shall not change its raw material, component or packaging materials without the prior written consent of APOLLO, which consent shall not be unreasonably withheld. With respect to the supply of the silicone raw materials for the shell and sheath product components, APOLLO shall acquire materials from a third party supplier and arrange for delivery to ESTABLISHMENT and ESTABLISHMENT shall be responsible for inspecting said components to ensure that they meet chemical, component and packaging specifications. + +-4- + + + + + +4. PRICING AND PAYMENT; Fixtures and Tooling + +4.1Product Prices. Pricing for the Product ordered per the terms of this Agreement is set forth in Exhibit A attached hereto. Any penalty for failure to purchase a designated quantity of product for a defined period, if any, shall be clearly described in Exhibit A or in a written amendment. Any future modification to pricing shall be mutually agreed upon and may be captured in a revised Exhibit A or a written amendment signed by both Parties. + +4.2Payment Terms. Unless otherwise agreed to by ESTABLISHMENT in writing, ESTABLISHMENT shall invoice APOLLO for Product ordered at the time of shipment and APOLLO shall pay each invoice within thirty (30) days from date of invoice. Each invoice shall set forth, in U.S. Dollars, the applicable price for the shipment properly determined in accordance with the provisions of this Agreement. If APOLLO disputes any portion of an invoice received from ESTABLISHMENT the Parties shall use good faith efforts to reconcile the disputed amounts as soon as practicable. Invoices should be sent to the physical and email addresses as specified in writing by APOLLO in the applicable Purchase Order. + +4.3Fixtures and Tooling. In addition, Apollo will pay as set forth in Exhibit A for certain fixtures and tooling to be set forth in Exhibit C, and Apollo will maintain all right, title and interest in and to such fixtures and tooling. During the Term, fixtures and tooling will be identified to Apollo and will be subject to the requirements for ESTABLISHMENT to maintain set forth as part of the Services in Exhibit A. The parties will amend Exhibit C from time to time in writing to set forth an accurate list of such fixtures and tooling. With respect to all tooling and fixtures purchased by Apollo in connection with the manufacture and supply of Product and provision of Services hereunder and listed on Exhibit C (which, in accordance with this Agreement, Apollo shall retain all right, title and interest in and to), for so long as ESTABLISHMENT maintains possession of such tooling and fixtures, Establishment will retain, maintain and use such fixtures and tooling in the ordinary course of business (normal wear and tear excepted) consistent with its handling of other tooling and fixtures and will use such tooling and fixtures only for manufacturing and supply of Product and provision of Services to APOLLO as provided in this Agreement. + +5. FORECASTS, PURCHASE ORDERS AND DELIVERY + +5.1Forecasts. APOLLO shall provide ESTABLISHMENT on a monthly basis a twelve (12) month rolling forecast to allow for visibility into expected future demands. APOLLO shall deliver to ESTABLISHMENT a forecast for anticipated monthly deliveries of Product to APOLLO over the subsequent four (4) calendar quarters (the "Forecast"). The Forecast is to be used by the Parties for planning purposes and is not a commitment by APOLLO to purchase the quantities of Products specified in such Forecast, except as described below. + +The quantities of Product forecasted for the initial three (3) months of each updated rolling Forecast shall represent a binding obligation of Apollo to purchase from ESTABLISHMENT, and of ESTABLISHMENT to manufacture and supply to APOLLO, such quantities of Product. + +-5- + + + + + +ESTABLISHMENT shall, at all times during the Term, maintain an inventory of raw materials and components sufficient to manufacture the binding obligations. + +5.2Orders. APOLLO shall routinely provide ESTABLISHMENT Purchase Orders for Product demands. All Product ordered by APOLLO shall be in the form of a firm written Purchase Order. Each Purchase Order shall contain at a minimum, the following information: description of the Product and quantity ordered, price, freight carrier information, payment terms, delivery date, and Purchase Order number for billing purposes. The Parties shall cooperate to establish appropriate lead times for orders; requested delivery dates shall provide sufficient lead times for the products ordered. + +5.3Delivery. Unless expressly provided otherwise in the applicable Purchase Order, shipping to APOLLO for the Product shall be Ex Works - ESTABLISHMENT (Incoterms 2010). The Product will be packaged and shipped per the Specifications and using a shipper and insurance coverage approved by APOLLO. In the event that any delivery of the Product is anticipated to be late, ESTABLISHMENT will promptly notify APOLLO of the circumstances for the delay and, upon request, ESTABLISHMENT will take reasonable steps to minimize the delay. At the request of APOLLO, ESTABLISHMENT will provide a written corrective action for the result of delays caused by events under the Span of Control of ESTABLISHMENT. + +5.4Acceptance, Rejection, and Claims. APOLLO may inspect any or all shipments of Product to insure all specifications are met including proper labeling, packaging and count within thirty (30) business days of APOLLO's receipt of each shipment; however, any such inspection shall not relieve ESTABLISHMENT of any obligations or warranties under this Agreement. APOLLO has the right to reject, via written notification to ESTABLISHMENT within this thirty (30) day period, any or all of a shipment of Product that fails to satisfy any warranty in this Agreement and may reject all of a given Lot of Product if a statistical sample does not meet the Specifications. Upon confirmation of defective condition by ESTABLISHMENT and issuance of a return material authorization ("RMA") number, APOLLO shall be entitled to the immediate return and replacement, free of charge, of any Product supplied by ESTABLISHMENT in breach of any warranty under this Agreement. + +5.5Spoilage Due to Change or Obsolescence. APOLLO shall be responsible for any printed packaging components, purchased raw materials, work in progress or finished Product which becomes obsolete as a result of a specification or drawing change so long as the purchased raw materials did not exceed three months of APOLLO's forecast requirements and, upon Apollo's request, such raw materials, work in progress and finished Product are transferred to APOLLO + +6. WARRANTIES + +6.1Product Warranty. ESTABLISHMENT warrants that all Product supplied under this Agreement shall, when it leaves ESTABLISHMENT's possession and control, conform with the Specifications and shall be free from defects in materials and workmanship. + +-6- + + + + + +ESTABLISHMENT further warrants that the Product shall be manufactured in accordance with applicable ISO 13485:2012 standards and with all applicable laws and regulations. + +6.2Debarment. ESTABLISHMENT represents, warrants and covenants that no person or entity that will be involved in the performance of ESTABLISHMENT's obligations under this Agreement is under investigation by the FDA or other Regulatory Authority for debarment or is presently debarred by the FDA or other Regulatory Authority. In addition, ESTABLISHMENT represents and warrants that it has not engaged in any conduct or activity that could lead to any such debarment actions. If during the Term, ESTABLISHMENT or any person or entity that will be involved in the performance of ESTABLISHMENT's obligations under this Agreement (i) comes under investigation by the FDA for a debarment action, (ii) is debarred, or (iii) engages in any conduct or activity that could lead to debarment, ESTABLISHMENT shall notify APOLLO immediately after gaining knowledge of the situation. + +6.3 Intellectual Property. ESTABLISHMENT represents, warrants and covenants to APOLLO that ESTABLISHMENT will not, in the course of performing obligations hereunder, infringe or misappropriate any intellectual property of any other person. APOLLO represents, warrants and covenants to ESTABLISHMENT that by complying with its obligations under this agreement APOLLO will not knowingly direct ESTABLISHMENT to incur any violation, infraction or misappropriation of any intellectual property of any other party. + +6.4Training. ESTABLISHMENT represents, warrants and covenants to APOLLO that all of its employees and personnel that will be performing any work in connection with this Agreement will have the appropriate training and skill necessary to perform their job functions. + +6.5No Conflicts. ESTABLISHMENT represents, warrants and covenants that it shall not enter into any agreement or arrangement with any other entity that would prevent or in any way negatively interfere with ESTABLISHMENT's ability to perform it obligations hereunder. + +7. REGULATORY AND QUALITY + +7.1Compliance. ESTABLISHMENT agrees that its work under this Agreement will be conducted in compliance with all applicable laws, rules and regulations, and with the standard of care customary in the industry. If requested by APOLLO, ESTABLISHMENT shall provide APOLLO with a certificate evidencing its accreditation by the appropriate accrediting body. Such accreditation shall remain in force during the term of this Agreement. ESTABLISHMENT agrees that all Product shipments to APOLLO shall be in accordance with APOLLO's instructions governing the shipment, labeling, and packaging of the Product. + +7.2Quality Control. Establishment shall maintain and follow a quality control and testing program consistent with the Product Specifications, ISO 13485:2012, Applicable Laws and quality system requirements communicated in writing by APOLLO from time to time + +-7- + + + + + +(the "Quality Control Procedures"). All Product supplied to APOLLO hereunder shall be manufactured in compliance with ISO 13485:2012 and all other applicable requirements of Regulatory Authorities, and in compliance with all other Applicable Laws (collectively, "Regulatory Standards"). At all times the Products shall be manufactured in an ISO Class 7 Clean Room, unless otherwise set forth in an amendment to this Agreement or the Exhibits hereto signed by both Parties. + +7.3Records. Establishment shall keep complete, accurate and authentic accounts, notes, data and records pertaining to the manufacture, processing, testing, storage, and distribution of the Product, including without limitation master production and control records, in material compliance with applicable Regulatory Standards. Establishment shall use commercially reasonable efforts to maintain and store such records in a manner to prevent loss, theft or deterioration. Establishment shall retain such records for five (5) years following the date of manufacture, or such longer period of time if consistent with Regulatory Standards, and shall make available to Apollo copies of such records; and upon the expiration of such period, Establishment shall contact Apollo and give Apollo the option to have such quality control documentation transferred to Apollo or destroyed. Unless this Agreement is terminated by Apollo due to a Triggering Event, in which case APOLLO shall bear the following costs: (i) ESTABLISHMENT may charge APOLLO for ESTABLISHMENT actual, documented, reasonable labor expenses incurred by ESTABLISHMENT for transfer or destruction of such documents and (ii) in the event of transfer of documents all freight costs shall be borne by APOLLO. + +7.4Product Complaints/Reports. The parties expect that APOLLO shall receive any complaint, claim or adverse reaction report regarding the Product. However (and except as otherwise noted below) in the event that ESTABLISHMENT receives any complaint, claim or adverse reaction report regarding any Product, including, but not limited to, notices from a competent Regulatory Authority regarding any regulatory non-compliance of a Product, upon notice, ESTABLISHMENT shall within a reasonable time frame provide APOLLO with all information related to such complaint, report, or notice and such additional information regarding the Product as may be reasonably requested. ESTABLISHMENT shall provide as much information as it has, to allow APOLLO comply with the competent Regulatory Authority requirements for complaint handling. If Product contains a defect which could or did cause death or serious bodily injury, ESTABLISHMENT shall immediately provide APOLLO with a complete description of all relevant details known to ESTABLISHMENT concerning any such incident, including but not limited to, a description of any defect and such other information which may be necessary to report to the competent Regulatory Authority or any Ministry of Health. APOLLO is responsible for filing any/all MDR Reports as required by the competent Regulatory Authority. + +7.5Recalls. APOLLO shall have the right to reasonably declare any recall of, or field corrective action to, any Product supplied to APOLLO under this Agreement. ESTABLISHMENT agrees to cooperate with APOLLO in connection with any such recall inasmuch as related to its concern in the Product. + +-8- + + + + + +7.6Government Inquiries. Without limiting the generality of Section 7.2, ESTABLISHMENT shall use its best efforts to: + +(a) Respond fully and accurately to all inquiries directed to it by the competent Regulatory Authority or any government agency or regulatory body with respect to the manufacture and testing of the Product. + +(b) Assist APOLLO in responding to inquiries directed to APOLLO by any competent Regulatory Authority or any government agency or regulatory body with respect to the manufacture and testing of the Product. + +7.7 Inspection of Manufacturing Facilities. + +(a) ESTABLISHMENT shall permit APOLLO and its agents, during business hours and upon notice to ESTABLISHMENT, to inspect the Facilities where the Product is manufactured, handled, stored or tested, as well as all processes relating to the manufacture, handling, storage, or testing of the Product, as well as all test records regarding the Product. + +7.8ESTABLISHMENT warrants and agrees that it will correct within a reasonable amount of time from the date of notification, all deficiencies and/or non-conformances found during an APOLLO or any competent Regulatory Authority (regulatory body or agency) audit; and that it will take reasonable steps to correct such deficiencies and/or non-conformances or issue an approved plan, including a timetable, to correct all deficiencies and/or non-conformances within a reasonable time period. + +7.9Control Testing. ESTABLISHMENT shall perform quality control testing in accordance with the Specifications for release of each Lot of Product to APOLLO. Quality control testing shall include testing associated with the production of the Product, including, but not limited to, incoming component and raw material testing, in process testing, and final release testing as agreed upon from time to time between APOLLO and ESTABLISHMENT. + +7.10 Specifications and Change Control. + +(a) The Specifications may not be changed without prior written approval by APOLLO. + +(b) ESTABLISHMENT shall not make any changes to the manufacturing process, Facilities, or equipment used in the manufacture that affects the form, fit or function of the Product without APOLLO's prior written approval. + +(c) APOLLO shall use commercially reasonable efforts to provide ESTABLISHMENT with sufficient written notice of any instructions or requirements of a government regulatory agency that may require a change of the Specifications. ESTABLISHMENT shall immediately notify APOLLO if any such changes in the Specifications + +-9- + + + + + +shall render ESTABLISHMENT unable to supply the Product in accordance with the terms and conditions of this Agreement or if they would cause a delay in supply of the Product. + +7.11Technical Assistance. ESTABLISHMENT shall provide APOLLO with certain technical support regarding the Product as reasonably requested by APOLLO, including, but not limited to, analytical test methods, manufacturing process development, and validation support. If there are charges associated with these services, a separate quote will be provided to APOLLO. + +7.12 Quality Agreement. ESTABLISHMENT and APOLLO shall execute a written Quality Agreement between the Parties (the "Regulatory Agreement"). Upon execution, the Quality Agreement shall be attached hereto as Exhibit B and shall be incorporated herein. The Quality Agreement may be updated from time to time upon the mutual written agreement of the Parties. ESTABLISHMENTs agrees to comply with any reasonable requirements of APOLLO's quality system. + +8. INDEMNIFICATION, LIMITATION OF LIABILITY AND INSURANCE + +8.1 Indemnification by APOLLO. APOLLO agrees to indemnify, defend and hold harmless ESTABLISHMENT, its officers, agents, and employees from any and all liability, loss (including reasonable attorneys' fees) or damage they may suffer as the result of claims, demands, costs or judgments against them arising out of the negligence, recklessness or willful misconduct on the part of APOLLO, its officers, agents, employees, contractors or consultants in connection with this Agreement. + +8.2 Indemnification by ESTABLISHMENT. ESTABLISHMENT agrees to indemnify, defend and hold harmless APOLLO, its officers, agents, and employees from any and all liability, loss (including reasonable attorneys' fees), or damage they may suffer as the result of claims, demands, costs or judgments against them arising out of: + +(a) a failure by ESTABLISHMENT, its officers, agents, employees, contractors or consultants to adhere to the terms of a Purchase Order or written instructions received from APOLLO in accordance with this agreement; + +(b) negligence, recklessness or willful misconduct on the part of ESTABLISHMENT, its officers, agents, employees, contractors or consultants; or + +(c) a breach of any applicable local law or regulation or of this Agreement by ESTABLISHMENT, its officers, agents, employees, contractors or consultants in relation to the execution of this agreement. + +8.3General Conditions of Indemnification. Each Party's agreement to indemnify, defend and hold the other harmless is conditioned on the indemnified Party (i) providing written notice to the indemnifying Party of any claim, demand or action arising out of the indemnified activities within thirty (30) days after the indemnified Party has knowledge of + +-10- + + + + + +such claim, demand or action; (ii) permitting the indemnifying Party to assume full responsibility to investigate, prepare for and defend against any such claim or demand; (iii) assisting the indemnifying Party, at the indemnifying Party's reasonable expense, in the investigation of, preparation for and defense of any such claim or demand; and (iv) not compromising or settling such claim or demand without the indemnifying Party's written consent; provided, however, that the failure of the indemnified Party to undertake any of the foregoing actions shall not relieve the indemnifying Party of any obligation it may have under this Article 8, except to the extent that the indemnifying Party's ability to fulfill such obligation has been materially prejudiced thereby. + +8.4Limitation of Liability. EXCEPT FOR BREACHES OR VIOLATIONS OF ARTICLE 9, OR INDEMNITY LIABILITIES ARISING UNDER THIS ARTICLE 8, OR CASES OF GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY CONSEQUENTIAL, INDIRECT, SPECIAL, INCIDENTAL OR PUNITIVE DAMAGES INCLUDING LOSS OF USE, REVENUES OR PROFITS, INTERRUPTION OF BUSINESS OR CLAIMS AGAINST EITHER PARTY OR ITS CUSTOMERS BY ANY THIRD PARTY, WHETHER SUCH CLAIM IS BASED IN CONTRACT, TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY OR OTHERWISE, EVEN IF THE PARTY IS ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. + +8.5 Insurance. ESTABLISHMENT, at its sole cost and expense, will maintain appropriate insurance including, but not limited to, Commercial General Liability Insurance with premises, operations coverage including Person Injury/Property Damage coverage, with limits of not less than $1,000,000 per occurrence. As of January 1, 2015, such insurance shall also have annual aggregate limits not less than $2,000,000. Evidence of insurance indicating such coverage will be delivered to APOLLO upon request. The evidence will (a) indicate that the policy will not change or terminate without at least fifteen (15) days prior written notice to APOLLO, (b) APOLLO shall be listed as an additional insured on the commercial general liability policy. + +9. CONFIDENTIALITY + +9.1Confidential Information. For purposes of this Agreement, "Confidential Information" shall mean all information relating to the subject matter of this Agreement (i) identified in written or oral format by the disclosing Party as confidential, trade secret or proprietary information and, if disclosed orally, summarized in written format within thirty (30) days of disclosure, or (ii) the receiving Party knows or has reason to know is confidential, trade secret or proprietary information of the disclosing Party. Notwithstanding the foregoing, "Confidential Information" shall not include any information which the receiving Party can show: (i) is now or subsequently becomes legally and publicly available without breach of this Agreement by the receiving Party, (ii) was rightfully in the possession of the receiving Party without any obligation of confidentiality prior to receiving it from the disclosing Party, (iii) was rightfully obtained by the receiving Party from a source other than the disclosing Party without + +-11- + + + + + +any obligation of confidentiality, or (iv) was developed by or for the receiving Party independently and without reference to such information as shown by documentary evidence. + +9.2Nondisclosure. Each Party agrees not to use the Confidential Information of the other Party for any purpose, including trading in the financial instruments of the other Party, except in its performance under this Agreement. In addition, the receiving Party shall treat and protect such Confidential Information in the same manner as it treats its own information of like character, but with not less than reasonable care. The receiving Party agrees to take appropriate measures by instruction and/or written agreement prior to disclosure of Confidential Information to its employees and contractors to prevent unauthorized use or disclosure. Confidential Information may be disclosed to the extent necessary to comply with an order of an administrative agency or court of competent jurisdiction provided, however, that the Party so required to disclose Confidential Information shall provide prior written notice thereof to the other Party in sufficient time to enable that Party to seek a protective order or otherwise prevent such disclosure. The receiving Party's confidentiality obligations under this Article 9 shall survive the termination of this Agreement, and shall remain binding on the Parties hereto until the earlier of a) the Confidential Information falls within one of the exceptions stated in Section 9.1 and b) five (5) years from the expiration or termination of the Agreement. Previously executed non-disclosure agreements between the Parties will remain in effect in conjunction with The Agreement until the termination dates specified in those agreements and any Confidential Information shall also be considered to be Confidential Information hereunder. Disclosure of Confidential Information under this Agreement will create no license, right, interest, or ownership in any such information in a receiving Party. + +10. GENERAL PROVISIONS + +10.1 Relationship Between the Parties. In fulfilling its obligations pursuant to this Agreement, each Party shall be acting as an independent contractor. Neither Party is granted any right or authority to assume or to create any obligation or responsibility, express or implied, on behalf of or in the name of the other Party. + +10.2 Nonexclusivity. Nothing in this Agreement shall limit or restrict Apollo from establishing a second source for the manufacture of the Products. + +10.3 No Third Party Beneficiaries. This Agreement is neither expressly nor impliedly made for the benefit of any party other than those executing it. + +10.4 Severability. If, for any reason, any part of this Agreement or any Purchase Order is adjudicated invalid, unenforceable or illegal by a court of competent jurisdiction, such provision will be changed and interpreted to accomplish the objectives of such provision to the greatest extent possible under applicable law and the remaining provisions of this Agreement or Purchase Order (as the case may be) will continue in full force and effect. + +10.5 Notices. Any notice to be given under this Agreement must be in writing and delivered either in person, by any method of mail (postage prepaid) requiring return receipt, + +-12- + + + + + +or by overnight courier, to the Party to be notified at its address(es) given below, or at any address such Party has previously designated by prior written notice to the other. Notice shall be presumptively deemed to be sufficiently given for all purposes upon the earlier of: (a) the date of actual receipt; (b) if mailed, three (3) calendar days after the date of postmark; or (c) if delivered by overnight courier, the next business day the overnight courier regularly makes deliveries. + +If to ESTABLISHMENT: Establishment Labs S.A. Coyol Free Zone, B15, Alajuela 20113, Costa Rica Attention: Luis Gutierrez. General Counsel + +If to APOLLO: Apollo Endosurgery, Inc. 1120 S. Capital of Texas Hwy, Suite 300 Austin, TX 78746 Attn: Brian Szymczak, Legal Dept. + +10.6 Force Majeure. Each Party shall be excused from liability for the failure or delay in performance of any obligation under this Agreement by reason of any event beyond such Party's reasonable control, including, but not limited to, Acts of God, other natural forces or war. Such excuse from liability shall be effective only to the extent and duration of the event(s) causing the failure or delay in performance and provided that the Party seeking relief has not caused such event(s) to occur. Notice of a Party's failure or delay in performance due to force majeure must be given to the other Party within three (3) calendar days after its occurrence. All delivery dates under this Agreement that have been affected by force majeure shall be tolled for the duration of such force majeure. + +10.7 Legal Fees. The prevailing Party in any litigation between the Parties relating to this Agreement may be awarded some or all of its reasonable attorneys' fees and court costs if the Court (in its reasonable discretion) finds that a non- prevailing party has not acted in good faith in the pursuit or defense of a claim hereunder, in addition to any other relief that it may be awarded. + +10.8 Governing Law and Venue. Notwithstanding its place of execution or performance, this Agreement shall be governed by and construed in accordance with the laws of the State of Texas, irrespective of its laws regarding choice or conflict of laws. Any dispute arising under or relating to this Agreement shall be submitted for resolution to a state or federal court of competent jurisdiction in Austin, Texas, and the Parties hereby agree to submit to the jurisdiction and venue of such court. + +10.9 Assignment. This Agreement is binding upon and inures to the benefit of the Parties to it, and to their successors and assigns. Neither Party shall have the right to assign this Agreement or any of its rights or obligations hereunder without the prior written consent of the other Party; provided, however, APOLLO may assign the Agreement to and may, without the + +-13- + + + + + +prior consent of ESTABLISHMENT, assign all of its rights under this Agreement to (i) a parent or subsidiary of Apollo, (ii) a purchaser of all or substantially all the Apollo assets related to this Agreement, or (iii) a third party acquiring control of Apollo through a merger, acquisition, sale of assets or other corporate reorganization. + +-14- + + + + + +IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the Effective Date. + +ESTABLISHMENT LABS, SA Apollo Endosurgery, Inc. By: /s/ Juan Jose Chacon By: /s/ Todd Newton Name: Juan Jose Chacon Name: Todd Newton Title: CEO Title: CEO + +-15- + + + + + +1. a. i. ii. + +2. a. b. c. + +3. + +a. b. c. d. + +• • + +4. a. b. c. + +5. a. b. c. + +6. a. b. c. + +EXHIBIT A + +Product & Price Listing + +Apollo BIB Sheath and Balloon Assembly Transition to E-LABS Rev.4 + +Transition Plan Milestones & Description Approximate Timeline Fee Notes + +Project Launch Apollo to define component requirements (draft drawings) Onsite review of Allergan process in Costa Rica (1 trip). Agreement on specification/requirements Production to be performed in an ISO Class 7 Clean Room. + +[***] [***] Agreement to be signed before project launch.. + +Proof of Process Obtain raw materials Prototype 1st mandrels/fixtures Deliver samples (10 pcs each) to Apollo (or Allergan) to agreed draft specification + +[***] [***] + +Requirements: -Drawings from Allergan for molds and tooling. -STL files from Allergan. -Materials standard specifications from Allergan. -Contact information of suppliers. -No cost for raw materials is included. -Tooling and Materials to be provided from Allergan. + +Process Set Up & Scale Up (for initial annual volumes of up to 50,000 pcs/each) Define production mandrels/fixtures Measurement system process set up Manufacturing Documentation Process characterization & definition of process limits + +Tooling (for annual volumes of 50,000 pcs/each) BIB Balloon Mandrels BIB Sheath Mandrels + +[***] [***] + +Completion is achieved when ready for first wet run. + +E-Labs Process Validation Equipment qualification Measurement systems Apollo review of protocol + +[***] [***] + +No raw materials or equipment cost are considered. + +First Articles / Validation (Apollo) Quantities to be determined by Apollo Deliver first articles to Apollo Transition project complete + +[***] [***] + +Patched BIB ballon with Sheath, including raw material. + +Manufacture / Deliver BIB Components for Commercial Use Apollo receives approval from applicable government/regulatory agencies. Order quantities to be determined Anticipate first delivery by [***]. + +[***] [***] + +Patched BIB ballon with Sheath, including raw material. + +-16- + + + + + +• • • • + +• • • • + +• ◦ ◦ • • • • + +• ◦ ◦ • • • • + +Tooling & Other Program Requirements Unit Price Notes + +Shell, BIB Sheath, DWG BSS Rev. 08 [***] Material: NuSil [***] Silicone Assumes NuSil MED 4-2014 [***], Xylene [***]/liter Bulk packaged in double poly bags and labeled Lead time: [***] weeks + +For annual volumes between [***] See below + +Shell, BIB Sheath, [***] and E-Labs Draws from Apollo Stock] Material: NuSil [***] Silicone Assumes NuSil MED [***]/kg, Xylene [***]/liter Bulk packaged in double poly bags and labeled Lead time: [***] weeks + +For annual volumes between [***] See below + +Budgetary pricing for higher volumes of Shell Bib Sheath, [***] + +Note: This row should accommodate the two scenarios: Purchasing NuSil Material & Apollo Purchases NuSil Material and E-Labs Draws from Apollo Stock + +Annual Volumes [***] + +Annual [***] + +See below + +See below + +Balloon Assembly, BIB (E/S), per [***] Includes Shell, BIB BB, [***] Material: NuSil [***] Assumes NuSil [***]kg, Xylene [***]/liter Includes Valve Ring, BIB produced [***] Includes Valve Cylinder Slit, [***] for [***] Bulk packaged in double poly bags and labeled Lead time: [***] weeks + +For annual volumes between [***] See below + +Balloon Assembly, BIB (E/S), per drawing 6870 Rev 10 [Apollo Purchases Nusil Material and E-Labs Draws from Apollo Stock] Includes Shell, BIB BB, [***] Material: NuSil [***] Silicone Assumes NuSil [***]/kg, Xylene [***]/liter Includes Valve Ring, BIB [***] Includes Valve Cylinder Slit, [***] for [***] each Bulk packaged in double poly bags and labeled Lead time: [***] weeks + +For annual volumes between [***] See below + +Budgetary pricing for higher volumes of BIB [***] + +Annual Volumes [***] pieces + +Annual [***]+ pieces + +See below + +See below + +PRICES + +TRANCHES BIB SYSTEM PRICING MATRIX [***] [***] [***] [***] BIB SYSTEM [***] [***] [***] [***] BIB SHELL [***] [***] [***] [***] BIB SHEATH [***] [***] [***] [***] + +Conditions: • Prices have been calculated considering the information available to Establishment Labs on this date, subject to the requirements noted on each item. Prices may vary with further information. • Minimum yearly purchases of [***] units on each contract year. Five-year contract term is considered. + +-17- + + + + + +• As discussed with client, the quote given is for the manufacture of both components; prices for individual components is for reference only. • No cost of equipment or molds is included in the pricing. Item 3, Tooling, does include the cost of specific tooling as requested, for reference. • Process set-up and validation is considered on as-is condition. No process modification is quoted at this stage. • Quality control and certificates included as detailed in Exhibit B • Product sold [***] • Item 3, Tooling includes ONLY: ◦ For BIB Balloon, each run consists of [***] ◦ For BIB Sheath each run consists of [***] ◦ Unit Prices of tools: ▪ BIB Balloon Mandrel [***] ▪ BIB Balloon Handle [***] ▪ BIB Sheath Mandrel [***] • Note: The Tooling price is incomplete, prices for the following were not requested and are not included: cutters, inserts, racks, carts and machines (sheath dipping, mixing, cutting, vulcanizing). • Invoicing during the first six months after deliver of First Article should be a minimum of [***]. Any difference will be paid by Apollo. • Payment Terms: ◦ Fee for project launch payable upon signing. ◦ Transition Plan payments: on milestone completion. ◦ Net 30 on product sales. • Projected timeline for First Articles / Validation is [***]. For every month Establishment comes in earlier than said date, [***] incentive payment will be paid to Establishment. • For clarity, for the period from the delivery date of the first Purchase Order (as described in Item 6(c) above) until the end of the Calendar Year in which such delivery date occurs, Company shall be required to order only [***] to be given the pricing on such Purchase Orders for [***] annual units for such Calendar Year. Thereafter, in subsequent Calendar Years, the annual volume minimums to be given volume pricing shall be as set forth above and shall be per Calendar Year. [NOTE: This is to bring the contract pricing into a calendar year basis after the first purchases.] • In the event of termination under section 2.2(b) no additional reparation charges have been agreed upon by the parties; any future agreed upon reparation charge or amount shall be binding only if adopted as an amendment to this Agreement. + +-18- + + + + + +Exhibit B Regulatory Agreement + +Establishment Labs Apollo BIB Balloon and Sheath Testing & Inspection Proposal + +1. Manufacturing facility capabilities: • ISO Class 7 (ISO 14644-1:1999) - Certified clean room. • ISO 13485:2003 and ISO 9001:2008 Certified facility. • RDC#16:2013 Brazilian GMPs Approved facility. • SAP inventory levels remote consultation interface. Optional. 2. Certificate of raw material conformance as per specification for all supplier lots of silicone dispersions, valve ring, slit valve and silicone adhesive: • Incoming inspection testing, as applicable: ◦ Appearance, viscosity, Shore A durometer value, tear strength, refractive index, supplier certificate review, tack free time, tensile strength, and elongation. ◦ Verification of Slit Valve functionality at incoming receiving. • Pre-process testing and statistical analysis report to comply with mechanical properties of the shell: ◦ Shell thickness lot analysis. ◦ Shell elongation and break force. ◦ Tensile set. ◦ Lot viscosity and devol time process parameters definition. 3. Certificate of product conformance per lot, including: • Reference to Apollo/EL specifications drawing or Material Standard Specification. • EL Product Lot Number. • QTY description per lot. • Product Part Number and Description. • Raw Materials description with related documents including: ◦ Part number and supplier lot number. ◦ Supplier product certificates. • In process product testing controls, including: ◦ 100% shell and Sheath thickness report. ◦ 100% shell and Sheath visual inspection. ◦ 100% assembly visual inspection. ◦ Sampling testing for shell elongation and break force. ◦ Sampling testing for patch-joint. ◦ Sampling testing tensile strength. ◦ 100% leak test inspection of the balloon assembly. • DHR Review and QA approvals. • Other as required. 4. Process engineering: • Manufacturing procedures engineering change orders managing and execution. • Process parameters improvement and DMR's updating, if applicable. • Process data analysis. + + + + + +• Process Control Plans that identify Procedures, tooling, critical process controls, inspection requirements, inspection frequency, and inspection equipment. 5. Digital back-up at Establishment Labs in accordance with Quality Standards of: • Raw material incoming inspection reports. • Pre-process testing reports. • DHRs for every lot number. • Lot processing parameters. • Clean room monitoring. • Equipment maintenance and calibration records. • Tensile tester testing raw data. 6. Validations: • All processes that cannot be verified need to be validated. 7. Quality System: • Must be updated to allow business as a contract manufacturer. • For Apollo product, updates should include but not limited to: customer related processes, customer audits, feedback, monitoring and measurement of product, management review, and analysis of non-conforming product. + + + + + +Exhibit C + +Fixtures and Tooling + +-1- \ No newline at end of file diff --git a/full_contract_txt/ArcGroupInc_20171211_8-K_EX-10.1_10976103_EX-10.1_Sponsorship Agreement.txt b/full_contract_txt/ArcGroupInc_20171211_8-K_EX-10.1_10976103_EX-10.1_Sponsorship Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..20ee3c7ddc136ed531400ed6a0eca3104617f7fc --- /dev/null +++ b/full_contract_txt/ArcGroupInc_20171211_8-K_EX-10.1_10976103_EX-10.1_Sponsorship Agreement.txt @@ -0,0 +1,43 @@ +Exhibit 10.1 JACKSONVILLE JAGUARS SPONSORSHIP AGREEMENT This Sponsorship Agreement (this "Agreement") is entered into as of November 27, 2017 (the "Execution Date") by and between Jacksonville Jaguars, LLC, a Delaware limited liability company ("Club"), and The ARC Group, Inc., a Florida corporation (owner and operator of Dick's Wings and Grill) ("Sponsor"). This Agreement consists of this Sponsorship Agreement and Exhibits A and B hereto, each of which is incorporated into and forms a part of this Agreement by this reference. RECITALS A. Club owns and operates the National Football League ("NFL") team known as the Jacksonville Jaguars (the "Team") and has the right to grant sponsorship rights and to exploit certain commercial, advertising and related opportunities with respect to the Team, including at the football- based stadium in Jacksonville, Florida currently named EverBank Field (the "Stadium"). B. Sponsor wishes to obtain certain sponsorship rights, benefits and opportunities with respect to the Team in connection with the advertising and promotion of the Sponsor Business (as defined below). In consideration of the mutual covenants contained herein, the parties agree as follows: 1. Term of Agreement. This Agreement shall be binding on the parties hereto as of the Execution Date. The term of this Agreement (the "Term") shall commence as of April 1, 2018 (the "Effective Date") and shall expire upon the later of: (a) the conclusion of the 2022/23 NFL season and (b) the last day in February, 2023 (such expiration date, the "Scheduled Expiration Date"), unless sooner terminated pursuant to the terms of this Agreement. 2. Sponsor Rights and Benefits. Subject to the terms and conditions of this Agreement, as part of the consideration of the full and timely payment of the Sponsor Fees, Club hereby grants to Sponsor, and Sponsor hereby accepts, solely in the Territory, and during the Term: (i) the right to use the Benefits set forth on Exhibit A and the license and right to use the Team Marks solely in connection with the advertisement and promotion of Sponsor's Dick's Wings and Grill branded restaurants (the "Sponsor Business") in accordance with this Agreement; and (ii) the right to use the designation "Official Wings of the Jacksonville Jaguars" and such other designations as Club and Sponsor may agree to in a writing from time to time (collectively, the "Official Designations"), solely in connection with the Sponsor Business. No license or right is granted for the use of any other Club intellectual property for any other purpose, in any geographic area outside the Territory, for any medium of distribution that cannot be reasonably limited to the Territory, or during any period before or after the Term. The rights granted to Sponsor pursuant to this Section 2 may not be used to promote or advertise any products or services of Sponsor other than the Sponsor Business, or any other person or entity, whether directly or by affiliation, cooperation, co-sponsorship, or any joint programs or promotions. 3. Annual Fees; Playoff Payment. (a) In consideration for the Benefits, during each Contract Year of the Term, Sponsor shall pay Club, in accordance with this Section 3(a) and Section 2(d) of the Terms and Conditions, the amount set forth next to the applicable Contract Year below (the "Annual Fee"). First Contract Year (2018/19): $ 200,000 Second Contract Year (2019/20): $ 204,000 Third Contract Year (2020/21): $ 208,080 Fourth Contract Year (2021/22): $ 212,240 Fifth Contract Year (2022/23): $ 216,490 Sponsor shall pay Club the Annual Fee for each Contract Year of this Agreement in six (6) equal installments, each due on or prior to the 1st of each month between June and November of the applicable Contract Year. (b) In addition to the Annual Fees identified in Section 3(a) above, Sponsor shall provide Club with food, beverage and serving products from Sponsor's Dicks' Wings restaurant with values equal to the following (each, an "Annual Trade Value"): First Contract Year (2018/19): $ 35,000 Second Contract Year (2019/20): $ 35,700 Third Contract Year (2020/21): $ 36,410 Fourth Contract Year (2021/22): $ 37,140 Fifth Contract Year (2022/23): $ 37,890 As part of the Annual Trade Value, Sponsor shall provide Club with a designated liaison who will coordinate the menu and quantities to be provided by Sponsor. Sponsor shall deliver the food (the cost of which is included in the Annual Trade Value) to the Stadium at the time and location specified by Club. If any portion of the Annual Trade Value is not used in any given Contract Year, such unused amount shall carry forward to the subsequent Contract Year. If any portion of the Annual Trade Value is not used at the end of the Term, Club shall be permitted to use such unused amount within twelve (12) months following expiration of this Agreement. The parties acknowledge that the Annual Trade Value is inclusive of any taxes, surcharges or related fees applicable to the orders placed by Club during the Term. + + + +Source: ARC GROUP, INC., 8-K, 12/11/2017 + + + + + + + + (c) If, during the Term, the Team plays in the Hall of Fame game, or any post-season playoff game, including any wild card, divisional playoff, conference championship, or Super Bowl (each, a "Playoff Game"), to the extent Club has the necessary rights to grant the Benefits identified on Exhibit A for such Playoff Game, Sponsor shall pay Club an additional amount per Playoff Game equal to a pro-rated portion of the Annual Fee applicable during the then-current Contract Year. The pro-rated portion shall be determined by Club using Club's internal line item accounting values as set forth in Club's standard rate card for such Benefits during each Playoff Game; provided that the cost of the Playoff Game tickets shall be based upon the generally applicable price for such tickets (the "Playoff Payments"). Sponsor shall pay the Playoff Payments in accordance with Section 2(d) of the Terms and Conditions not later than 30 days following Sponsor's receipt of an invoice requesting payment for such Playoff Games; provided that Club's failure to deliver such an invoice shall not, and not be construed to, relieve Sponsor of any obligation to pay any amount owed to Club. 4. Definitions. Capitalized terms used but not otherwise defined herein have the respective meanings given to them on Exhibit B (as it may be amended or otherwise modified from time to time, the "Terms and Conditions"). 5. Standard Terms and Conditions. Except as expressly set forth in this Sponsorship Agreement or Exhibit A, all Benefits granted by Club to Sponsor hereunder shall be subject to, and Sponsor shall at times comply with, the terms and conditions set forth in the Terms and Conditions. 6. Notices. Any notice or other communication under this Agreement shall be in writing and shall be considered given when delivered personally or by electronic mail (confirmed by one of the other permissible methods of giving notice hereunder), one business day after being sent by a nationally recognized overnight courier, or three business days after being mailed by registered or certified mail, postage prepaid and return receipt requested, to the parties at the following addresses (or at such other address as a party may specify by notice to the other): To Sponsor: The ARC Group, Inc. To Club: Jacksonville Jaguars, LLC 6327-4 Argyle Forest Blvd. 1 EverBank Field Drive Jacksonville, Florida 32244 Jacksonville, Florida 32202 Attn: Rick Akam Attn: Scott Massey Title: CEO Senior Vice President, Corporate Partnerships Email: rick@dickswings.com masseys@nfl.jaguars.com With a copy to: _________________________ With a copy to: Jacksonville Jaguars, LLC _________________________ 1 EverBank Field Drive _________________________ Jacksonville, Florida 32202 Attn: ____________________ Attn: Megha Parekh Title: ____________________ Senior Vice President, Chief Legal Officer Email: ____________________ parekhm@nfl.jaguars.com Notwithstanding the foregoing, delivery of an invoice via solely electronic mail shall constitute sufficient delivery under this Agreement. 7. Integration; Amendment. This Agreement contains the complete understanding between the parties hereto and supersedes all prior and contemporaneous written or verbal agreements or understandings (including but not limited to all negotiations, term sheets, letters of intent, presentations, and prior drafts of this Agreement) relating to the subject matter hereof. This Agreement may not be amended or otherwise modified except in a writing specifically referring to this Agreement and signed by authorized representatives of Sponsor and Club. 8. Counterparts. This Agreement may be executed in any number of counterparts, each of which will be deemed an original, but all of which taken together shall constitute one single agreement. Delivery of an executed counterpart by electronic transmission shall have the same effect as delivery of an original ink counterpart. IN WITNESS WHEREOF, each party has caused this Agreement to be executed in Jacksonville, Florida, by its duly authorized representative with the intent that it be binding as of the Execution Date. CLUB: SPONSOR: JACKSONVILLE JAGUARS, LLC The ARC Group, Inc. By: /s/ Scott Massey By: /s/ Richard W. Akam Scott Massey Rick Akam SVP, Corporate Partnerships CEO + + Page 2 of 4 + +Source: ARC GROUP, INC., 8-K, 12/11/2017 + + + + + + + + EXHIBIT A Sponsorship Benefits For purposes of clarity, the Benefits set forth on this Exhibit A are subject to the terms and conditions of this Agreement, including the Club Approval Rights under Section 5 of the Terms and Conditions. 1. STADIUM SIGNAGE a. Carousel Messaging: Sponsor shall receive three (3) minutes of real time (and not game clock time) of display of a Sponsor Mark on LED carousel Signage on one (1) of the main video boards above the north or south end zone during each quarter of each preseason and regular season Jaguars Home Game. During each three (3) minute segment, Sponsor may include up to thirty seconds (:30) of animated messaging. Sponsor shall be solely responsible for any costs related to the animated messaging. a. Ribbon LED Signage: Sponsor shall receive display of a Sponsor Mark on the LED ribbon boards located on the fascia on the east and west sides of the Stadium for thirty seconds (:30) of real time (and not game clock time) during each quarter of each preseason and regular season Jaguars Home Game. The exact timing of each display shall be determined by Club. b. Concourse Signage: Sponsor shall receive display of a Sponsor Mark or Advertisement on five (5) back-illuminated advertising panels at certain locations on the Stadium concourses to be displayed during each preseason and regular season Jaguars Home Game. The exact size and location of each panel shall be determined by Club. 2. RADIO a. Radio Spots: Sponsor shall receive the following radio spots in Club radio programming broadcasted by Club's primary radio partner. The exact timing of each spot shall be determined by Club or Club's primary radio partner: i. Jaguars Thursday: A total of twenty-three (23) thirty second (:30) spots for broadcast of an advertisement of the Sponsor Business during certain initial broadcasts of Jaguars Thursday. ii.Pre-Game Show: One (1) thirty second (:30) spot for broadcast of an advertisement of the Sponsor Business during each initial broadcast of the Pre-Game Show (for a total of twenty (20) spots during each Contract Year). iii.In-Game: One (1) thirty second (:30) spot for broadcast of an advertisement of the Sponsor Business during the initial broadcast of each preseason and regular season Team Game radio broadcast (for a total of twenty (20) spots during each Contract Year). 3. DIGITAL a. Banner Ad: During each Contract Year, Sponsor shall receive display of a Sponsor Mark on one (1) banner advertisement in respect of the Sponsor Business that rotates throughout www.jaguars.com (approximately 300x250 pixels) and that links to Sponsor's official website. The exact placement of the banner shall be determined by Club in its sole discretion. b. Gameday Magazine: During each Contract Year, Sponsor shall receive space to display one (1) full page advertisement in respect of the Sponsor Business and display of a Sponsor Mark in each digital (or printed, as determined by Club) issue of the Gameday Magazine distributed to Club's season ticket members prior to each Jaguars Home Game. The exact size and placement of the advertisement and timing of each distribution of the Gameday Magazine shall be determined by Club in its sole discretion. c. Social Media Feature: During each Contract Year, Sponsor shall be the presenting sponsor of a video feature that highlights a top rushing play by a Team player during each preseason and regular season Team Game (the "Feature"). The top rushing play shall be determined by Club in its sole discretion. Such presenting sponsorship shall consist of the following: i. A Sponsor Mark displayed in the Feature, which shall be published by Club to Club's official Facebook, Twitter, Instagram or Snapchat account. The post will tag Sponsor's official corresponding social media account. The content, timing and frequency of such social media posts and the social media platforms shall be determined by Club. 4. HOSPITALITY a. Season Tickets: Sponsor shall receive tickets (in Section 150, Row X, Seats 5-8, or a substantially similar location) to each preseason and regular season Jaguars Home Game. + + Page 3 of 4 + +Source: ARC GROUP, INC., 8-K, 12/11/2017 + + + + + + + + 5. CONCESSIONS a. Branded Concession Stands: During each preseason and regular season Jaguars Home Game and Other Events as requested by Club or the Stadium concessionaire ("Concessionaire"), Sponsor shall have the right to display Sponsor branding on (i) one (1) fixed concession stand in the Stadium located in the Bud Light Party Zone; and (ii) the fixed concession stand identified as Concession Stand 118 on the Stadium concourse (collectively, the "Stands"). The exact size and location of the Stands shall be determined by Club. The exact design of the Stands shall be mutually agreed upon between Sponsor and Club. Sponsor may display Signage displaying a Sponsor Mark in and/or on the Stand. Sponsor shall be responsible for all costs associated with the branding and Advertising in respect of the Stand. b. Vending: Subject to the Concessions Agreement (as defined herein), Sponsor shall have the right to have its food products sold or otherwise distributed from the Stands and/or certain general concessions areas at the Stadium determined by Club or the Concessionaire. For purposes of clarity, nothing in this Agreement grants Sponsor the right to operate the Stand or otherwise sell or distribute food products from or within the Stand. Sponsor shall enter into an agreement with the Concessionaire to memorialize any such rights regarding the sale or distribution of Sponsor's products at the Stadium during each Jaguars Home Game and Other Events (the "Concessions Agreement"). The exact products to be sold and distributed shall be subject to Club's final approval. For purposes of clarity, Club reserves the right to sell other products at the Stadium competitive to the Sponsor Business. Sponsor acknowledges that such rights do not automatically extend to Other Events at the Stadium. Sponsor acknowledges that Sponsor shall cooperate with the Concessionaire regarding logistics and management of the Sponsor's food products, and appropriate storage and dispensation of the food products. In the event of any recall with respect to Sponsor's products provided to the Concessionaire pursuant to this Agreement or the Concessions Agreement, Sponsor shall notify both Club and the Concessionaire immediately upon issuance of such recall, and Club may, at its sole discretion and without penalty, suspend the Benefits for a duration as reasonably determined by Club. Any costs or expenses incurred by Club or the Concessionaire with respect to any such recall shall be the sole responsibility of Sponsor. Sponsor shall be responsible for the management and control over the services provided by its staff members operating the Stands ("Sponsor Staff") and Sponsor shall be solely responsible for determining the terms of employment for Sponsor Staff. Sponsor shall train Sponsor Staff or require Sponsor Staff to undergo training provided by Concessionaire. The staffing levels at each Stand shall be subject to Club's approval. + + Page 4 of 4 + + + +Source: ARC GROUP, INC., 8-K, 12/11/2017 \ No newline at end of file diff --git a/full_contract_txt/ArcaUsTreasuryFund_20200207_N-2_EX-99.K5_11971930_EX-99.K5_Development Agreement.txt b/full_contract_txt/ArcaUsTreasuryFund_20200207_N-2_EX-99.K5_11971930_EX-99.K5_Development Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..7ad053b9cc5230b142cad22c10962dd9e7e5e7a7 --- /dev/null +++ b/full_contract_txt/ArcaUsTreasuryFund_20200207_N-2_EX-99.K5_11971930_EX-99.K5_Development Agreement.txt @@ -0,0 +1,43 @@ +Exhibit 99(k)(5) FORM OF BLOCKCHAIN ADMINISTRATION AND DEVELOPMENT AGREEMENT BETWEEN ARCA U.S. TREASURY FUND AND ARCA CAPITAL MANAGEMENT, LLC This Agreement ("Agreement") is made as of [___], 2020 by and between ARCA U.S. TREASURY FUND, a Delaware statutory trust (the "Fund"), and ARCA CAPITAL MANAGEMENT, LLC, a Delaware limited liability company (the "Blockchain Administrator"). WHEREAS, the Fund is a closed-end management investment fund that has registered as an investment company under the Investment Company Act of 1940, as amended (the "Investment Company Act") and that intends to operate as an interval fund pursuant to Rule 23c-3 under the Investment Company Act; WHEREAS, the Fund desires to retain the Blockchain Administrator to provide services related to the development of ERC-1404 compatible digital securities and administration of the smart contracts underlying the Fund's digital securities in the manner and on the terms set forth herein; WHEREAS, the Blockchain Administrator is willing to provide such services to the Fund on the terms and conditions set forth herein; WHEREAS, the Blockchain Administrator will also serve as the Fund's investment adviser (the "Adviser") pursuant to an Investment Advisory Agreement entered into by and between the Fund and the Adviser (as amended from time to time, the "Advisory Agreement"); and WHEREAS, the Fund bears all costs and expenses incurred in its operation, administration and transactions which are not specifically assumed by the Adviser pursuant to the Advisory Agreement or this Agreement. NOW, THEREFORE, in consideration of the premises and the covenants hereinafter contained and for other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the Fund and the Blockchain Administrator hereby agree as follows: 1. Duties of the Blockchain Administrator (a) The Fund hereby employs the Blockchain Administrator to act as the blockchain administrator of the Fund, and to furnish, or arrange for others to furnish, the services, personnel and facilities described below, subject to review by and the overall control of the Fund's Board of Trustees (the "Board"), for the period and on the terms and conditions set forth in this Agreement. (b) The Blockchain Administrator hereby accepts such employment and agrees during such period to render, or arrange for the rendering of, such services and to assume the obligations herein set forth subject to the reimbursement of costs and expenses provided for below. (c) The Blockchain Administrator shall perform (or oversee, or arrange for, the performance of) development and administrative services necessary for the issuance of the Fund's shares as ERC-1404 compatible digital securities ("Shares") and the on-going maintenance and administration of the smart contracts underlying such Shares. Without limiting the generality of the foregoing, the Blockchain Administrator shall provide the Fund with facilities, equipment, technology, coding and such other services as the Blockchain Administrator, subject to review by the Board, shall from time to time determine to be necessary or useful to perform its obligations under this Agreement. + +1 + +Source: ARCA U.S. TREASURY FUND, N-2, 2/7/2020 + + + + + +(d) The Blockchain Administrator shall also, on behalf of the Fund, conduct relations with custodians, depositories, transfer agents, dividend disbursing agents, other stockholder servicing agents, accountants, attorneys, underwriters, brokers and dealers, corporate fiduciaries, insurers, banks and such other persons as the Blockchain Administrator shall deem to be necessary or desirable in connection with the issuance and transfer of the Fund's ERC-1404 compatible digital security,. (e) The Blockchain Administrator shall make reports to the Board of its performance of obligations hereunder and furnish advice and recommendations with respect to such other aspects of the business and affairs of the Fund as it shall determine to be desirable; provided that nothing herein shall be construed to require the Blockchain Administrator to, and the Blockchain Administrator shall not, in its capacity as Blockchain Administrator pursuant to this Agreement, provide any advice or recommendation relating to the securities and other assets that the Fund should purchase, retain or sell or any other investment advisory services to the Fund. (f) The Blockchain Administrator shall for all purposes herein be deemed to be an independent contractor and shall, unless otherwise expressly provided or authorized herein, have no authority to act for or represent the Fund in any way or otherwise be deemed an agent of the Fund. (g) The Blockchain Administrator is hereby authorized to enter into agreements with other service providers pursuant to which the Blockchain Administrator may obtain the services of the service providers in fulfilling its responsibilities hereunder. The Blockchain Administrator shall ensure that any such service provider shall operate in conformity with the requirements of the Investment Company Act and other applicable federal and state law and shall maintain books and records of the Fund (if any) in a manner substantially similar to Section 2 of this Agreement. 2. Maintenance of Records The Blockchain Administrator agrees to maintain and keep all books, accounts and other records of the Fund that relate to activities performed by the Blockchain Administrator hereunder and will maintain and keep such books, accounts and records in accordance with the Investment Company Act. In compliance with the requirements of Rule 31a-3 under the Investment Company Act, the Blockchain Administrator agrees that all records which it maintains for the Fund shall at all times remain the property of the Fund, shall be readily accessible during normal business hours, and shall be promptly surrendered upon the termination of the Agreement or otherwise on written request. The Blockchain Administrator further agrees that all records which it maintains for the Fund pursuant to Rule 31a-1 under the Investment Company Act will be preserved for the periods prescribed by Rule 31a-2 under the Investment Company Act unless any such records are earlier surrendered as provided above. Records shall be surrendered in usable machine-readable form. The Blockchain Administrator shall have the right to retain copies of such records subject to observance of its confidentiality obligations under this Agreement. 3. Confidentiality The parties hereto agree that each shall treat confidentially the terms and conditions of this Agreement and all information provided by each party to the other regarding its business and operations. All confidential information provided by a party hereto, including nonpublic personal information (regulated pursuant to Regulation S-P), shall be used by any other party hereto solely for the purpose of rendering services pursuant to this Agreement and, except as may be required in carrying out this Agreement, shall not be disclosed to any third party, without the prior consent of such providing party. The foregoing shall not be applicable to any information that is publicly available when provided or thereafter becomes publicly available other than through a breach of this Agreement, or that is required to be disclosed by any regulatory authority, any authority or legal counsel of the parties hereto, by judicial or administrative process or otherwise by applicable law or regulation. 4. Compensation; Allocation of Costs and Expenses (a) In full consideration of the provision of the services of the Blockchain Administrator set forth herein, the Fund shall pay the Blockchain Administrator a fees calculated at the annual rate of 0.20% of the value of the Fund's average annual net assets. Such fee shall be accrued daily and paid monthly in arrears. + +2 + +Source: ARCA U.S. TREASURY FUND, N-2, 2/7/2020 + + + + + +(b) The Fund shall bear all fees, costs and expenses incurred in connection with its operation, administration and transactions that are not specifically assumed by the Blockchain Administrator (or the Adviser, if not the Blockchain Administrator, pursuant to the Advisory Agreement), including but not limited to: (i) compensation of the Fund's Trustees who are not affiliated with the Fund's Adviser or the Fund's principal underwriter/distributor or any of their respective affiliates; (ii) taxes and governmental fees; (iii) interest charges; (iv) fees and expenses of the Fund's independent accountants and legal counsel; (v) trade association membership dues; (vi) fees and expenses of any custodian (including maintenance of books and accounts and calculation of the net asset value of shares of the Fund), transfer agent, registrar and dividend disbursing agent of the Fund; (vii) expenses of issuing, redeeming, registering and qualifying for sale shares of beneficial interest in the Fund; (viii) expenses of preparing prospectuses and reports to shareholders, notices, proxy statements and reports to regulatory agencies; (ix) the cost of office supplies, including stationery; travel expenses of all officers, Trustees and employees; (x) insurance premiums; (xi) brokerage and other expenses of executing portfolio transactions; (xii) expenses of shareholders' meetings; (xiii) organizational expenses; and (xiv) extraordinary expenses. 5. Limitation of Liability of the Blockchain Administrator; Indemnification The Blockchain Administrator (and its officers, managers, partners, agents, employees, controlling persons, members and any other person or entity affiliated with the Blockchain Administrator) shall not be liable to the Fund for any action taken or omitted to be taken by the Blockchain Administrator in connection with the performance of any of its duties or obligations under this Agreement or otherwise as blockchain administrator of the Fund, and the Fund shall indemnify, defend and protect the Blockchain Administrator (and its officers, managers, partners, agents, employees, controlling persons, members and any other person or entity affiliated with the Blockchain Administrator) (collectively, the "Indemnified Parties") and hold them harmless from and against all damages, liabilities, costs and expenses (including reasonable attorneys' fees and amounts reasonably paid in settlement) incurred by the Indemnified Parties in or by reason of any pending, threatened or completed action, suit, investigation or other proceeding (including an action or suit by or in the right of the Fund or its security holders) arising out of or otherwise based upon the performance of any of the Blockchain Administrator's duties or obligations under this Agreement or otherwise as administrator of the Fund. Notwithstanding the preceding sentence of this Section 5 to the contrary, nothing contained herein shall protect or be deemed to protect the Indemnified Parties against or entitle or be deemed to entitle the Indemnified Parties to indemnification in respect of, any liability to the Fund or its security holders to which the Indemnified Parties would otherwise be subject by reason of criminal conduct, willful misfeasance, bad faith or gross negligence in the performance of the Blockchain Administrator's duties or by reason of the reckless disregard of the Blockchain Administrator's duties and obligations under this Agreement. 6. Activities of the Blockchain Administrator The services of the Blockchain Administrator to the Fund are not to be deemed to be exclusive, and the Blockchain Administrator and its affiliates are free to render services to others. It is understood that trustees, officers, employees and stockholders of the Fund are or may become interested in the Blockchain Administrator and its affiliates, as directors, officers, members, managers, employees, partners, stockholders or otherwise, and that the Blockchain Administrator and directors, officers, members, managers, employees, partners and stockholders of the Blockchain Administrator and its affiliates are or may become similarly interested in the Fund as stockholders or otherwise. 7. Duration and Termination of this Agreement (a) This Agreement shall become effective as of the first date above written. This Agreement may be terminated at any time, without the payment of any penalty, upon 60 days' written notice, by the vote of a majority of the outstanding voting securities of the Fund or by the vote of the Fund's Trustees or by the Blockchain Administrator. The provisions of Section 5 of this Agreement shall remain in full force and effect, and the Blockchain Administrator shall remain entitled to the benefits thereof, notwithstanding any termination of this Agreement. Further, notwithstanding the termination or expiration of this Agreement as aforesaid, the Blockchain Administrator shall be entitled to any amounts owed under Section 4 through the date of termination or expiration, and Section 5 shall continue in force and effect and apply to the Blockchain Administrator and its representatives as and to the extent applicable. + +3 + +Source: ARCA U.S. TREASURY FUND, N-2, 2/7/2020 + + + + + +(b) This Agreement shall continue in effect for two years from the date hereof, and thereafter shall continue automatically for successive annual periods, provided that such continuance is specifically approved at least annually by (A) the vote of the Board, or by the vote of a majority of the outstanding voting securities of the Fund and (B) the vote of a majority of the Fund's directors who are not parties to this Agreement or "interested persons" (as such term is defined in Section 2(a)(19) of the Investment Fund Act) of any such party, in accordance with the requirements of the Investment Fund Act. (c) This Agreement will automatically terminate in the event of its "assignment" (as such term is defined for purposes of Section 15(a) (4) of the Investment Fund Act). 8. Notices Any notice under this Agreement shall be given in writing, addressed and delivered or mailed, postage prepaid, to the other party at its principal office. 9. Amendments This Agreement may be amended pursuant to a written instrument by mutual consent of the parties. 10. Entire Agreement; Governing Law This Agreement contains the entire agreement of the parties and supersedes all prior agreements, understandings and arrangements with respect to the subject matter hereof. This Agreement shall be construed in accordance with the laws of the State of New York applicable to contracts formed and to be performed entirely within the State of New York, without regard to conflict of laws principles, and in accordance with the applicable provisions of the Investment Fund Act. In such case, to the extent the applicable laws of the State of New York, or any of the provisions herein, conflict with the provisions of the Investment Fund Act, the latter shall control. [Remainder of Page Intentionally Left Blank] + +4 + +Source: ARCA U.S. TREASURY FUND, N-2, 2/7/2020 + + + + + +IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as of the date first above written. ARCA U.S. TREASURY FUND By: Name: Philip Liu Title: President ARCA CAPITAL MANAGEMENT, LLC By: Name: J. Rayne Steinberg Title: Chief Executive Officer 5 + +Source: ARCA U.S. TREASURY FUND, N-2, 2/7/2020 \ No newline at end of file diff --git a/full_contract_txt/ArconicRolledProductsCorp_20191217_10-12B_EX-2.7_11923804_EX-2.7_Trademark License Agreement.txt b/full_contract_txt/ArconicRolledProductsCorp_20191217_10-12B_EX-2.7_11923804_EX-2.7_Trademark License Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..231dbc2c530a7058f8bf10079170b099bbb5224e --- /dev/null +++ b/full_contract_txt/ArconicRolledProductsCorp_20191217_10-12B_EX-2.7_11923804_EX-2.7_Trademark License Agreement.txt @@ -0,0 +1,55 @@ +Exhibit 2.7 FORM OF TRADEMARK LICENSE AGREEMENT THIS TRADEMARK LICENSE AGREEMENT (this "Agreement"), made and entered into as of the [ ] day of [ ], 2020 (the "Effective Date"), by and between ARCONIC INC., a corporation organized under the laws of Delaware ("Licensee") and ARCONIC ROLLED PRODUCTS CORP., a corporation organized under the laws of Delaware ("Licensor"). WHEREAS, Licensor and Licensee entered into a Separation and Distribution Agreement having an effective date of the [ ] day of [ ], 2020 ("Separation and Distribution Agreement"); unless specifically defined in this Agreement, any capitalized term in this Agreement shall have the meaning set forth in the Separation and Distribution Agreement. WHEREAS, Licensor formerly operated as a business unit of Licensee; WHEREAS, as part of and further to the Separation and Distribution Agreement: (a) Licensor and Licensee are now two separate publicly traded companies; and (b) Licensor was assigned all right, title, and interest to the trademark "ARMX" (the "Licensed Mark"); WHEREAS, Licensee wishes to license from Licensor the right to the Licensed Mark as hereinafter defined below; WHEREAS, Licensee wishes to obtain from Licensor, subject to the terms and conditions set forth in this Agreement, the right and license to use, have used, manufacture, have manufactured, sell, have sold, advertise, have advertised, import, have imported, export, have exported, offer for sale, and have offered for sale the Licensed Products (later defined) using the Licensed Mark (the "Licensed Purpose"); WHEREAS, Licensor is willing to grant such rights, upon the terms and subject to the conditions set forth in this Agreement. NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties, intending to be legally bound, hereby agree as follows: + +1 + +Source: ARCONIC ROLLED PRODUCTS CORP, 10-12B, 12/17/2019 + + + + + +1. GRANT AND SCOPE OF LICENSE. 1.1 Grant of License. Licensor on behalf of itself and its Affliates hereby grants to Licensee the limited licenses to use and have used the Licensed Mark: (i) for the Licensed Products as set forth on Schedule 2; and (ii) as set forth on Schedule 1, concerning agreements entered into by Licensee prior to the Effective Date ("Existing Agreements"). For the avoidance of doubt, Licensor also grants to Licensee and its subsidiaries and affiliates a non-exclusive, worldwide royalty-free license for continued use of the Licensed Mark for the production and sale of inventory containing the Licensed Mark applied to such products during the Transition Period as set forth in section 8.2 of the Separation and Distribution Agreement and in Schedule 2 of this Agreement. Licensee will not, however, use the Licensed Mark except for the production and sale of inventory as provided in this Section 1.1 and in Section 8.2 of the Separation and Distribution Agreement and Schedule 2 of this Agreement. For avoidance of doubt, to the extent that any of the licenses granted by the terms of this Agreement include any right to sublicense, such right to sublicense shall extend to Licensee's subsidiaries and joint venturers. 1.2 Goodwill. Licensee expressly recognizes and acknowledges that its use of the Licensed Mark shall inure solely to the benefit of Licensor, and shall not confer on Licensee any ownership rights to the Licensed Mark. Licensee agrees and covenants that it shall not challenge, contest, or take any actions inconsistent with Licensor's exclusive rights of ownership of the Licensed Mark. 1.3 Trademark Notices. All print and electronic displays of the Licensed Mark by Licensee shall include at Licensor's option, a notice to the effect that the Licensed Mark are owned by Licensor and used by Licensee under license from Licensor. 1.4 Licensee Cooperation. Licensee agrees to reasonably cooperate with Licensor in achieving registration of the Licensed Mark worldwide, and in maintaining and protecting existing registrations therefor at Licensor's sole expense. Licensee shall execute any and all documents which Licensor may reasonably request in support of such registrations, and, at Licensor's request, Licensee shall provide use evidence, testimony, and documentation that may be required in any ex parte or inter partes administrative proceedings and prosecutions, maintenance and renewals involving registrations of the Licensed Mark, at Licensee's sole expense. 1.5 Quality Control, Licensor Approvals. Licensor, as owner of the Licensed Mark, shall have the right at all times to control and approve the nature and quality of the Licensed Products (and the Licensed Mark thereon), and to inspect Licensee's business operations upon reasonable prior notice for the purpose of ensuring that a high level of quality of the Licensed Products is being maintained by Licensee. At Licensor's reasonable request during each calendar year, Licensee shall submit samples to Licensor, at no cost to Licensor, and shall not materially depart therefrom without Licensor's prior express written consent. The Licensed Products, as well as all promotional, packaging and advertising material relative thereto, shall include all appropriate legal notices as required by Licensor. No more frequently than once per year, a third party auditor chosen by Licensor and approved by Licensee, such approval not to be unreasonably withheld, shall be entitled at any time on reasonable notice to the Licensee to enter, during regular business hours, any premises used by the Licensee or its manufacturers for the manufacture, packaging or storage of the Licensed Products, to inspect such premises, all plant, workforce and machinery used for manufacture, packaging or storage of Licensed Products and all other aspects of the manufacture, packaging and storage of Licensed Products ("Access Rights"). Prior to exercising such Access Rights, the third party auditor shall enter into a nondisclosure agreement with Licensee that, among other terms deemed acceptable by Licensee and such third party auditor, shall: (a) limit the content of any report made by the third party auditor to Licensor to a description of the manner in which, and the conditions under which, the Licensed Mark are used by Licensee or its manufacturers; and (b) prevent the disclosure of any of Licensee's trade secrets and/or Confidential Information. To the extent reasonably practicable, all Licensed Products shall include notices on labeling and packaging for the Licensed Products stating that the Licensed Mark is owned by Licensor and used by Licensee under license from Licensor. The Licensed Products shall be of a quality commensurate with previous production or the samples approved by Licensor. If the quality of a class of the Licensed Products falls below such standards, Licensee shall use commercially reasonable efforts to restore such quality. In the event that Licensee has not taken appropriate steps to restore such quality within one-hundred twenty (120) days after notification by Licensor, Licensor shall have the right to terminate this Agreement. + +2 + +Source: ARCONIC ROLLED PRODUCTS CORP, 10-12B, 12/17/2019 + + + + + +1.6 Compliance with Trademark Usage Guidelines. Licensee agrees to comply with Licensor's trademark usage guidelines and any other policies and requirements applicable to the Licensed Mark. 2. ENFORCEMENT OF INTELLECTUAL PROPERTY. If legally able and without breaching any confidentiality provisions of a contract with a third party, in the event that Licensee becomes aware that any third party is infringing the Licensed Mark, Licensee shall promptly notify Licensor and provide pertinent details. Licensor shall have the right in its sole discretion to bring a legal action for infringement against the third party, together with the right to enforce and collect any judgment thereon. If Licensor elects to exercise such right, Licensee shall, at Licensor's request, provide reasonable assistance to Licensor, at the sole expense of Licensor. 3. INDEMNIFICATION. Licensee shall defend, indemnify and hold harmless Licensor and its officers, directors, employees, agents, corporate subsidiaries, parents, and affiliates ("Licensor Indemnitees") from and against any and all demands, claims, actions or causes of action, assessments, deficiencies, damages, losses, liabilities and expenses (including, without limitation, reasonable expenses of investigation and attorneys' fees and expenses), incurred in conjunction with or arising out of or relating to any third-party claim concerning the Licensed Products and any acts or omissions of Licensee with respect to the Licensed Mark, including without limitation Licensee's performance of its obligations under this Agreement. The Licensor Indemnitees agree to cooperate with Licensee, at Licensee's expense, to provide copies of any documents or materials reasonably requested by Licensee in support of its defense of the Licensor Indemnitees. 4. TERM AND TERMINATION. 4.1 Term. The Term of this Agreement will commence on the Effective Date and shall continue for the time periods set forth in Schedules 1 and 2 unless sooner terminated in accordance with the terms of this Agreement. 4.2 Termination for Breach. Licensor and Licensee will be entitled to terminate this Agreement by written notice to the other party in the event the other party is in material breach of any of its obligations hereunder and shall fail to remedy any such default within one hundred twenty (120) days after notice thereof by the non-breaching party. 4.3 Termination Upon Bankruptcy. Either party may terminate this Agreement by written notice to the other in the event of: (a) the other party's making assignment for the benefit of its creditors or filing a voluntary petition under any bankruptcy or insolvency law, under the reorganization or arrangement provisions of the United States Bankruptcy Code, or under the provisions of any law of like import; or (b) the filing of an involuntary petition against the other party under any bankruptcy or insolvency law, under the reorganization or arrangement provisions of the United States Bankruptcy Code, or under any law of like import; or (c) the appointment of a trustee or receiver for the party or its property. + +3 + +Source: ARCONIC ROLLED PRODUCTS CORP, 10-12B, 12/17/2019 + + + + + +4.4 Survival of Obligations; Return of Confidential Information. Notwithstanding any expiration or termination of this Agreement, Sections 1.4, 3, 4.4, 5.1, 5.2, and 6.1 through 6.11 shall survive and continue to be enforceable as set forth herein. Upon any expiration or termination of this Agreement, Licensee shall promptly return to Licensor, or at Licensor's direction, destroy all Licensor confidential information and all copies thereof in Licensee's possession. 5. REPRESENTATIONS AND WARRANTIES. 5.1 Licensor represents and warrants to Licensee that Licensor's performance of its obligations under this Agreement is not in conflict with, and will not result in a breach of or constitute a default under, any other contract, instrument, rule of law or order of any court or governmental agency to which Licensor is a party or by which Licensor is bound. 5.2 Licensee represents and warrants to Licensor that Licensee's performance of its obligations under this Agreement are not in conflict with, and will not result in a breach of or constitute a default under, any other contract, instrument, rule of law or order of any court or governmental agency to which Licensee is a party or by which Licensee is bound. 5.3 No Warranty. But for the warranty set forth in section 5.1., supra, Licensor, by this Agreement, makes no warranties or guarantees, either express or implied, arising by law or otherwise with regard to the Licensed Mark and/or the Licensed Products. In particular, Licensor assumes no obligation and makes no representations or warranties hereunder, express or implied, in law or in fact, with respect to: (i) the utility, quality or characteristics of the Licensed Mark or any use, embodiment, or modification thereof; (ii) the use of any Licensed Product, embodiments, or modifications thereof, or (iii) whether such Licensed Products, or any use, embodiments, or modifications thereof, would be in compliance with any federal, state or local laws, regulations, standards or criteria with respect to any claim which may arise in connection with any sale or use of Licensed Products. LICENSOR SPECIFICALLY DISCLAIMS, AND WILL HAVE NO OBLIGATION OR LIABILITY FROM THIS AGREEMENT WITH REGARD TO THE LICENSED MARK FOR ANY: (1) IMPLIED WARRANTY OF MERCHANTABILITY; (2) IMPLIED WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE; (3) IMPLIED WARRANTY OF NONINFRINGEMENT; AND (4) IMPLIED WARRANTY OF ANY OTHER TYPE. 6. MISCELLANEOUS. 6.1 Governing Law. This Agreement shall be governed by and interpreted in accordance with the laws of the State of Delaware without regard to its conflicts of law principles. 6.2 Jurisdiction and Venue. Each of the parties: (a) submits to the exclusive jurisdiction of any state or federal court sitting in Wilmington, Delaware for any action or proceeding arising out of, or relating to, this Agreement; (b) agrees that all claims in respect of the action or proceeding may be heard and determined in any such court; and (c) agrees not to bring any action or proceeding arising out of, or relating to, this Agreement in any other court. Each of the parties hereto waives any defense of inconvenient forum to the maintenance of any action or proceeding so brought and waives any bond, surety or other security that might be required of any other party with respect thereto. Each party agrees that a final judgment in any action or proceeding so brought will be conclusive and may be enforced by suit on the judgment or in any other manner provided by law or at equity. + +4 + +Source: ARCONIC ROLLED PRODUCTS CORP, 10-12B, 12/17/2019 + + + + + +6.3 Waiver. The waiver by one party of a breach or a default of any provision of this Agreement by the other party shall not be construed as a waiver of any succeeding breach of the same or any other provision, nor shall any delay or omission on the part of a party to exercise or avail itself of any right, power or privilege that it has or may have hereunder operate as a waiver of any right, power or privilege by such party. 6.4 Waiver of Jury Trial. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW EACH PARTY HEREBY IRREVOCABLY WAIVES ALL RIGHT OF TRIAL BY JURY IN ANY ACTION, PROCEEDING, CLAIM, OR COUNTERCLAIM ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY MATTER ARISING HEREUNDER. 6.5 Notices. Any notice or other communication under this Agreement shall be effective when: (a) delivered in person; (b) if mailed, when deposited in the mail by registered or certified mail, return receipt requested; or (c) if delivered by overnight mail by a recognized overnight carrier (e.g., FedEx, UPS, DHL). All such notices and other communications shall be addressed to the other party as follows: If to Licensor: If to Licensee: Arconic Inc. Arconic Rolled Products Corp. 201 Isabella Street 201 Isabella Street Pittsburgh, PA 15212 Pittsburgh, PA 15212 Attn.: General Counsel Attn: General Counsel 6.6 No Agency. Nothing herein shall be deemed to constitute Licensor, on the one hand, or Licensee, on the other hand, as the agent or representative of the other, or as joint venturers or partners for any purpose. Neither Licensor, on the one hand, nor Licensee, on the other hand, shall be responsible for the acts or omissions of the other. No party will have authority to speak for, represent or obligate the other party in any way without prior written authority from such other party. 6.7 Entire Agreement. This Agreement and the Separation and Distribution Agreement together contain the full understanding of the parties with respect to the subject matter hereof and supersedes all prior understandings and writings relating thereto. No waiver, alteration or modification of any of the provisions hereof shall be binding unless made in writing and signed by the parties. 6.8 Headings. The headings contained in this Agreement are for convenience of reference only and shall not be considered in construing this Agreement. + +5 + +Source: ARCONIC ROLLED PRODUCTS CORP, 10-12B, 12/17/2019 + + + + + +6.9 Severability. In the event that any provision of this Agreement is held by a court of competent jurisdiction to be unenforceable because it is invalid or in conflict with any law of any relevant jurisdiction, the validity of the remaining provisions shall not be affected and the invalid provision shall be severed herefrom. 6.10 Assignment. This Agreement may not be assigned by Licensee without the consent of Licensor which consent shall not be unreasonably withheld. Notwithstanding the foregoing, no such consent of Licensor is required under this Agreement in the event of a Change of Control of Licensee so long as: (a) the resulting, surviving or transferee Person assumes all the obligations of the Licensee by operation of Law or pursuant to an agreement in form and substance reasonably satisfactory to the Licensor; and (b) the licenses granted herein shall not be transferrable or sublicensable to Affiliates of such Person unless such Affiliates were Affiliates of Licensee prior to such Change of Control. 6.11 Counterparts; Images Signatures. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original but all of such together shall constitute one and the same instrument. Scanned PDF copies of signatures and facsimile copies of signatures may be deemed original signatures. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their respective authorized officers as of the Effective Date. ARCONIC INC. By Name: Title: ARCONIC ROLLED PRODUCTS CORP. By Name: Title: + +6 + +Source: ARCONIC ROLLED PRODUCTS CORP, 10-12B, 12/17/2019 \ No newline at end of file diff --git a/full_contract_txt/ArmstrongFlooringInc_20190107_8-K_EX-10.2_11471795_EX-10.2_Intellectual Property Agreement.txt b/full_contract_txt/ArmstrongFlooringInc_20190107_8-K_EX-10.2_11471795_EX-10.2_Intellectual Property Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..d66174a1c8d7018d0eaeb1dcf92aa4c4a9af90e4 --- /dev/null +++ b/full_contract_txt/ArmstrongFlooringInc_20190107_8-K_EX-10.2_11471795_EX-10.2_Intellectual Property Agreement.txt @@ -0,0 +1,497 @@ +Exhibit 10.2 + +Execution Version + +INTELLECTUAL PROPERTY AGREEMENT + +This INTELLECTUAL PROPERTY AGREEMENT (this "Agreement"), dated as of December 31, 2018 (the "Effective Date") is entered into by and between Armstrong Flooring, Inc., a Delaware corporation ("Seller") and AFI Licensing LLC, a Delaware limited liability company ("Licensing" and together with Seller, "Arizona") and AHF Holding, Inc. (formerly known as Tarzan HoldCo, Inc.), a Delaware corporation ("Buyer") and Armstrong Hardwood Flooring Company, a Tennessee corporation (the "Company" and together with Buyer the "Buyer Entities") (each of Arizona on the one hand and the Buyer Entities on the other hand, a "Party" and collectively, the "Parties"). + +WHEREAS, Seller and Buyer have entered into that certain Stock Purchase Agreement, dated November 14, 2018 (the "Stock Purchase Agreement"); WHEREAS, pursuant to the Stock Purchase Agreement, Seller has agreed to sell and transfer, and Buyer has agreed to purchase and acquire, all of Seller's right, title and interest in and to Armstrong Wood Products, Inc., a Delaware corporation ("AWP") and its Subsidiaries, the Company and HomerWood Hardwood Flooring Company, a Delaware corporation ("HHFC," and together with the Company, the "Company Subsidiaries" and together with AWP, the "Company Entities" and each a "Company Entity") by way of a purchase by Buyer and sale by Seller of the Shares, all upon the terms and condition set forth therein; + +WHEREAS, Arizona owns certain Copyrights, Know-How, Patents and Trademarks which may be used in the Company Field, and in connection with the transactions contemplated by the Stock Purchase Agreement the Company desires to acquire all of Arizona's right, title and interest in and to such Intellectual Property used exclusively in the Company Field, and obtain a license from Arizona to use other such Intellectual Property on the terms and subject to the conditions set forth herein; + +WHEREAS, Seller is signatory to the Trademark License Agreement pursuant to which Seller obtains a license to the Arizona Licensed Trademarks; + +WHEREAS, the Company desires to obtain a sublicense to use the Arizona Licensed Trademarks in the Company Field; + +WHEREAS, Arizona has obtained consent from all counterparties to the Trademark License Agreement to grant to the Company the sublicenses to the Arizona Licensed Trademarks included in this Agreement; and + +WHEREAS, the Company Entities own certain Copyrights and Know-How which may be used in the Arizona Field, and in connection with the transactions contemplated by the Stock Purchase Agreement, Arizona desires to obtain a license from the Company Entities to use such Intellectual Property on the terms and subject to the conditions set forth herein. + +NOW, THEREFORE, in consideration of the foregoing and the mutual agreements, provisions and covenants contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows: + +Source: ARMSTRONG FLOORING, INC., 8-K, 1/7/2019 + + + + + +1. DEFINITIONS AND INTERPRETATION 1.1 Certain Definitions. As used herein, capitalized terms have the meaning ascribed to them herein, including the following terms have the meanings set forth below. Capitalized terms that are not defined in this Agreement shall have the meaning set forth in the Stock Purchase Agreement. (a) "Arizona Assigned Copyrights" means all Copyrights, whether registered or unregistered, owned by Licensing or Seller as of the Effective Date and used or held for use exclusively in the Company Field as of November 14, 2018 (the "SPA Signing Date") and/or as of the Effective Date. (b) "Arizona Assigned Internet Domain Names" means the Internet domain names set forth on Schedule 1.1(b) and all other Internet domain names owned by Licensing or Seller as of the Effective Date and used or held for use exclusively in the Company Field as of the SPA Signing Date and/or as of the Effective Date (other than any Internet domain names that include any Arizona Licensed Trademarks). (c) "Arizona Assigned IP" means the Arizona Assigned Copyrights, Arizona Assigned Internet Domain Names, Arizona Assigned Know- How, Arizona Assigned Patents and Arizona Assigned Trademarks. (d) "Arizona Assigned Know-How" means all Know-How owned by Licensing or Seller as of the Effective Date and used or held for use exclusively in the Company Field as of the SPA Signing Date and/or as of the Effective Date. (e) "Arizona Assigned Patents" means the Patents set forth on Schedule 1.1(e) and all other Patents owned by Licensing or Seller and used or held for use exclusively in the Company Field as of the SPA Signing Date and/or as of the Effective Date. (f) "Arizona Assigned Trademarks" means the Trademarks set forth on Schedule 1.1(f) and all other Trademarks owned by Licensing or Seller as of the Effective Date and used or held for use exclusively in the in the Company Field as of the SPA Signing Date and/or as of the Effective Date (other than, for clarity any Arizona Licensed Trademarks). (g) "Arizona Domain Names" means the Internet domain names set forth on Schedule 1.1(g). (h) "Arizona Field" means all activities conducted by Arizona or its Affiliates, other than the Company Field. (i) "Arizona Licensed Copyrights" means all Copyrights owned by Licensing or Seller or their respective Affiliates, as of the Effective Date and used or held for use in the Company Field during the five (5) years prior to the Effective Date (other than the Arizona Assigned Copyrights). 2 + +Source: ARMSTRONG FLOORING, INC., 8-K, 1/7/2019 + + + + + +(j) "Arizona Licensed IP" means the Arizona Licensed Copyrights, the Arizona Licensed Know-How, the Arizona Licensed Patents, the Arizona Licensed Trademarks, the Diamond Licensed Trademarks and the Phase-Out Marks. (k) "Arizona Licensed Know-How" means all Know-How owned by Licensing or Seller or their respective Affiliates, as of the Effective Date and used or held for use in the Company Field during the five (5) years prior to the Effective Date (other than the Arizona Assigned Know- How). (l) "Arizona Licensed Patents" means the Patents set forth on Schedule 1.1(l) and all other Patents owned by Licensing or Seller or their respective Affiliates as of the Effective Date and used or held for use in the Company Field during the five (5) years prior to the Effective Date (other than the Arizona Assigned Patents). (m) "Arizona Licensed Trademarks" means the Trademarks set forth on Schedule 1.1(m). (n) "Arizona Trademark License Term" means the period commencing on the Effective Date and ending twenty-four (24) months thereafter. (o) "Company Field" means the design, development, manufacture, marketing, promotion, advertising, sourcing, distribution and sale of solid hardwood and engineered wood flooring products by or for any Company Entity. (p) "Company Licensed Copyrights" means all Copyrights and registrations and applications for any of the foregoing owned by any Company Entity as of the Effective Date and used or held for use in the Arizona Field as of the Effective Date. (q) "Company Licensed IP" means the Company Licensed Copyrights, the Company Licensed Know-How and the Company Licensed Patents. (r) "Company Licensed Know-How" means all Know-How owned by any Company Entity as of the Effective Date and used or held for use in the Arizona Field as of the Effective Date. (s) "Company Licensed Patents" means the Patents set forth on Schedule 1.1(s). (t) "Copyrights" means copyrights (whether registered or unregistered) including applications for copyright (excluding, for clarity, Trademarks). (u) "Diamond Licensed Trademarks" means the Trademarks set forth on Schedule 1.1(u). (v) "Diamond Product" means the design, development, manufacture, marketing, promotion, advertising, sourcing, distribution and sale of the solid hardwood flooring product by any Company Entity as conducted under the Diamond Licensed Trademarks by any Company Entity prior to the Effective Date 3 + +Source: ARMSTRONG FLOORING, INC., 8-K, 1/7/2019 + + + + + +(including the composition of coating used with respect to such solid hardwood flooring product). (w) "Diamond Trademark License Term" means the period commencing on the Effective Date and ending eighteen (18) months thereafter. (x) "Know-How" means trade secrets, and other confidential and proprietary information, inventions, processes, formulas and methodologies. (y) "Licensed IP" means the Arizona Licensed IP and the Company Licensed IP. (z) "Licensed Copyrights" means the Arizona Licensed Copyrights and the Company Licensed Copyrights. (aa) "Licensed Know-How" means the Arizona Licensed Know-How and the Company Licensed Know-How. (bb) "Licensed Trademarks" means the Arizona Licensed Trademarks, the Diamond Licensed Trademarks and the Phase-Out Marks. (cc) "Patents" means patent rights, including patents, patent applications, and all related continuations, continuations-in-part, divisionals, renewals, reissues, re-examinations, substitutions, and extensions thereof, and applications for any of the foregoing. (dd) "Proceeding" means any proceeding, claim, suit or action arising out of, or in connection with, this Agreement or its subject matter (including its validity, formation at issue, effect, interpretation, performance or termination), howsoever arising. (ee) "Seller Licensed Trademarks" means the Arizona Licensed Trademarks and the Diamond Licensed Trademarks. (ff) "Third Party" means any Person other than Arizona, the Company, and their respective Affiliates. (gg) "Trademarks" means any trademarks, service marks, trade names, trade dress, and other similar designations of source or origin, and registrations and applications for any of the foregoing. (hh) "Trademark License Agreement" means the Trademark License Agreement by and between Armstrong World Industries, Inc., AWI Licensing LLC and Armstrong Flooring, Inc, dated as of April 1, 2016 and attached hereto as Exhibit A. 4 + +Source: ARMSTRONG FLOORING, INC., 8-K, 1/7/2019 + + + + + +1.2 Interpretation. Section 10.5 and 10.14 of the Stock Purchase Agreement shall apply hereto, mutatis mutandis. 1.3 Company Actions. In respect of any action herein required to be undertaken by any of the Company Entities, or to be omitted by any of the Company Entities, the Buyer Entities shall cause the applicable Company Entity to so undertake or omit to undertake, as applicable, such action. 2. ASSIGNMENT OF ARIZONA ASSIGNED IP 2.1 Assignment. Arizona agrees to assign and hereby assigns its entire right, title and interest in and to the Arizona Assigned IP to the Company. 2.2 Recordation of Assignment. Arizona will reasonably cooperate with the Company to obtain, record, and perfect title to, and provide all necessary evidence of the Company's ownership of, the Arizona Assigned IP, including the execution of (i) a Patent Assignment in the form of the attached Exhibit B, and (ii) a Trademark Assignment in the form of the attached Exhibit C. 3. GRANT OF COPYRIGHT LICENSE 3.1 Arizona Copyright Grant. Subject to the terms and conditions of this Agreement, Arizona hereby grants to the Company a perpetual, non- exclusive, royalty-free license in, to and under the Arizona Licensed Copyrights for use in the Company Field throughout the world. 3.2 Company Copyright Grant. Subject to the terms and conditions of this Agreement, the Company hereby grants to Seller a perpetual, non- exclusive, royalty-free license in, to and under the Company Licensed Copyrights for use in the Arizona Field throughout the world. 4. GRANT OF KNOW-HOW LICENSE 4.1 Arizona Know-How Grant. Subject to the terms and conditions of this Agreement, Arizona hereby grants to the Company a perpetual, non- exclusive, royalty-free license in, to and under the Arizona Licensed Know-How for use in the Company Field throughout the world. 4.2 Company Know-How Grant. Subject to the terms and conditions of this Agreement, the Company hereby grants to Seller a perpetual, non- exclusive, royalty-free license in, to and under the Company Licensed Know-How for use in the Arizona Field throughout the world. 5. GRANT OF PATENT LICENSE 5.1 Arizona Patent Grant. Subject to the terms and conditions of this Agreement, Arizona hereby grants to the Company a perpetual, non-exclusive, royalty-free license in, to and under the Arizona Licensed Patents for use in the Company Field throughout the world. 5 + +Source: ARMSTRONG FLOORING, INC., 8-K, 1/7/2019 + + + + + +5.2 Company Patent Grant. Subject to the terms and conditions of this Agreement, the Company hereby grants to Seller a perpetual, non-exclusive, royalty-free license in, to and under the Company Licensed Patents for use in the Arizona Field throughout the world. 6. GRANT OF TRADEMARK LICENSE 6.1 Arizona Licensed Trademark Grant. Subject to the terms and conditions of this Agreement, Arizona hereby grants to the Company a limited, non- exclusive, royalty-free, non-sublicensable (except as set forth in Section 7.1), non-assignable license in, to and under the Arizona Licensed Trademarks for the Arizona Trademark License Term for use in the Company Field throughout the world only in the form and manner that such Arizona Licensed Trademarks are used in the Business as of the Closing, provided that the Company shall use commercially reasonable efforts to present the Arizona Licensed Trademarks in the form set forth on Schedule 6.1. 6.2 Diamond Licensed Trademark Grant. Subject to the terms and conditions of this Agreement, Arizona hereby grants to the Company a limited, non- exclusive, royalty-free, non-sublicensable (except as set forth in Section 7.1), non-assignable (except as set forth in Section 13.2) license in, to and under the Diamond Licensed Trademarks for the Diamond Trademark License Term for use with respect to the Diamond Product throughout the world only in the form and manner set forth on Schedule 6.2. 6.3 Quality Control. The Buyer Entities acknowledge the importance of Arizona's exercise of quality control over the use of the Seller Licensed Trademarks to preserve the continued integrity and validity of the Seller Licensed Trademarks and to protect the value and goodwill associated with the Seller Licensed Trademarks, and accordingly: (a) The Company shall ensure that all goods and services provided by the Company, under or in association with any of the Seller Licensed Trademarks, shall (i) be substantially the same as or greater than the quality of goods and services provided under such Seller Licensed Trademarks immediately prior to the Effective Date and (ii) not be associated with any goods or services, including any activities, that are reasonably likely to have an adverse effect on (A) the image or reputation of any of the Seller Licensed Trademarks or (B) Seller's right, title or interest in and to, any of the Arizona Licensed Trademarks. (b) The Company shall not tarnish or bring into disrepute the reputation of or goodwill associated with the Seller Licensed Trademarks or Arizona. (c) The Company shall use the Seller Licensed Trademarks at all times in compliance with all applicable Laws. (d) The Company shall include trademark and other notices in connection with the use of the Seller Licensed Trademarks as reasonably requested by Arizona from time to time. 6 + +Source: ARMSTRONG FLOORING, INC., 8-K, 1/7/2019 + + + + + +(e) The Company shall upon Arizona's reasonable request from time to time, supply to Arizona representative samples and/or written descriptions, as appropriate, of uses made by the Company of the Seller Licensed Trademarks. (f) The Buyer Entities acknowledge that this license grant does not include, and the Company shall receive no rights under this Agreement or the Stock Purchase Agreement, to use any Trademark that is confusingly similar to or derivative of a Seller Licensed Trademark (other than the Seller Licensed Trademarks themselves as expressly authorized hereunder). 6.4 Trademark License Agreement. In addition to the obligations set forth in Section 6.3, and notwithstanding any other provision of this Agreement, the Company shall comply with all obligations applicable to Arizona and its Affiliates under the Trademark License Agreement including, for the avoidance of doubt, any obligations with respect to reporting Complaints (as defined in the Trademark License Agreement), which reports the Company shall provide to Arizona, and quality control and standards, and Licensor Competitors (as defined in the Trademark License Agreement), and neither Party shall undertake any act that would constitute a breach or a basis for termination under the Trademark License Agreement. 6.5 Trade Names. The Company shall not create or use any corporate or trade names that include the Arizona Licensed Trademarks, other than those in existence immediately prior to the Effective Date. No later than thirty (30) days following the Closing, each of AWP and the Company shall change its respective corporate name and trade name and cause its organizational documents to be amended to remove any reference to "Armstrong." 6.6 With respect to any Trademarks notified to the Company in writing after the Effective Date that are used as of the Effective Date in the Company Field and are not (i) owned by any Company Entity, (ii) Arizona Assigned Trademarks, or (iii) Seller Licensed Trademarks (the "Phase-Out Marks") in each case (i)-(iii) the Company shall have a period of twenty-four (24) months from the date of notification to phase out all use. Any use by the Company of any of the Phase-Out Marks as permitted in this Section 6.6, is subject to its use of the Phase-Out Marks in a form and manner and with standards of quality consistent with that in effect for the Phase-Out Marks as of the Effective Date. 6.7 Domain Names. Subject to the terms and conditions of this Agreement, the license set forth in Section 6.1 shall include the right of the Company to use the Arizona Domain Names solely in connection with the applicable Arizona Licensed Trademarks in the Company Field during the Arizona Trademark License Term, in the ordinary course of business in a manner generally consistent with the past practice of Arizona in the Company Field. The Company shall not have the right to register any domain name or social media addresses (or any similar or successor identifiers) containing Arizona Licensed Trademarks. 7 + +Source: ARMSTRONG FLOORING, INC., 8-K, 1/7/2019 + + + + + +7. INTELLECTUAL PROPERTY RIGHTS 7.1 Sublicenses. Arizona may sublicense the licenses granted herein to its Affiliates and Third Parties in the ordinary course of business in support of its and its Affiliates' business, but not for the independent use of Third Parties, and the Company may sublicense the licenses granted herein to Third Parties, its Subsidiaries, AWP, controlled Affiliates, or any holding company that is a direct or indirect parent of the Company in the ordinary course of business in support of its and its Subsidiaries' or controlled Affiliates' business, but not for the independent use of Third Parties (each such Affiliate, Third Party, AWP or Subsidiary, a "Sublicensee"). Each Party shall ensure that any sublicense that it grants to a Sublicensee does not conflict with this Agreement. For clarity, granting a sublicense shall not relieve the Parties of any obligations hereunder and each Party shall cause each of its Sublicensees to comply, and shall remain responsible for such Sublicensees' compliance, with all terms and conditions hereof applicable to the Parties. At the request of a licensing Party, the other Party shall provide to the licensing Party a list of all Sublicensees and otherwise reasonably cooperate with the licensing Party in connection with Sublicensees' compliance with this Agreement. 7.2 Reservation of Rights. Except as expressly provided in the Stock Purchase Agreement or herein, each Party reserves its and its Affiliates' rights in and to all Intellectual Property (including with respect to the use, registration and licensing thereof). 8. OWNERSHIP 8.1 Ownership of Arizona Licensed IP. The Buyer Entities acknowledge and agree that (a) Arizona and its Affiliates own the Arizona Licensed IP (other than the Arizona Licensed Trademarks), (b) AWI Licensing LLC owns the Arizona Licensed Trademarks, (b) neither the Company, nor its Affiliates or its Sublicensees, will acquire any ownership rights in the Arizona Licensed IP, and (c) the Company shall not represent or make any claim that it has an ownership interest in any Arizona Licensed IP. Without limitation to the foregoing, the Company shall not file applications to register any Arizona Licensed IP or assist any person in doing the same, or contest, challenge, or otherwise take any action adverse to Arizona's and its Affiliates' ownership of or rights in and to the Arizona Licensed IP, or assist any person in doing the same. 8.2 Ownership of Company Licensed IP. Arizona acknowledges and agrees that (a) the Company and its Affiliates own the Company Licensed IP, (b) neither Arizona, nor its Affiliates or its Sublicensees, will acquire any ownership rights in the Company Licensed IP, and (c) Arizona shall not represent or make any claim that it has an ownership interest in any Company Licensed IP. Without limitation to the foregoing, Arizona shall not file applications to register any Company Licensed IP or assist any person in doing the same, or contest, challenge, or otherwise take any action adverse to the Company's and its Affiliates' ownership of or rights in and to the Company Licensed IP, or assist any person in doing the same. 8 + +Source: ARMSTRONG FLOORING, INC., 8-K, 1/7/2019 + + + + + +9. PROSECUTION, MAINTENANCE AND ENFORCEMENT 9.1 Responsibility and Cooperation. As between the Parties, Arizona, with respect to the Arizona Licensed IP, and the Buyer Entities, with respect to the Company Licensed IP, shall have the right (but not the obligation) for filing, prosecuting, and maintaining all Arizona Licensed IP and Company Licensed IP, respectively, in the licensing Party's name. For the avoidance of doubt, in case either such Party files any new Intellectual Property registration to the extent covering the Licensed IP, such new Intellectual Property registration shall automatically become Licensed IP. However, and for the further avoidance of doubt, the aforementioned shall not apply to new Intellectual Property created by a licensee Party or its Sublicensees separately and independently from the Licensed IP, for example in case of separate and independent technical enhancements or advancements. The Parties shall reasonably consult and coordinate with each other at the other Party's request with respect to the matters set forth in this Section 9.1. 9.2 No Additional Obligations. This Agreement shall not obligate either Party to disclose to the other Party, or maintain, register, prosecute, pay for, enforce, or otherwise manage any Intellectual Property except as expressly set forth herein. 9.3 Enforcement. As between the Parties, Arizona, with respect to the Arizona Licensed IP, and the Company or Buyer, with respect to the Company Licensed IP, shall have the right (but not the obligation) to elect to bring a Proceeding or enter into settlement discussions regarding, or otherwise seek to resolve, any infringement, misappropriation, or other violation, or allegations of invalidity or unenforceability, of the Licensed IP. In the event that Arizona declines to institute any Proceedings against third-party infringers or violators of any Arizona Licensed Patents, regarding activities that would fall within the Company Field if conducted by the Company, within forty-five (45) days after being notified or becoming aware of such infringing conduct, the Company or Buyer shall have the right to institute any Proceedings against such third-party infringers or violators. In the event that the Company or Buyer elects to institute such Proceedings, Arizona will reasonably cooperate with the Company or Buyer in such Proceedings, and the Company or Buyer shall reimburse Arizona for all reasonable costs and fees incurred by Arizona as a result of such cooperation. Such cooperation by Arizona will include joining such Proceeding as a party, if deemed necessary by the Company or Buyer. In the event that Arizona elects to bring a Proceeding against any alleged infringer of the Arizona Licensed Trademarks and seeks the cooperation of the Licensor of the Trademark License Agreement in such Proceeding, Arizona will take reasonable steps to assist the Company or Buyer in requesting the cooperation of the Licensor of the Trademark License Agreement, and pursuing an infringement claim against such alleged infringer. The Company or Buyer, as applicable, shall retain all benefits, recoveries, injunctions or other value derived from such Proceedings instituted by such Party. 10. INDEMNIFICATION 10.1 Indemnification. Each Party (the "Indemnifying Party") agrees to indemnify, defend and hold harmless the other Party and its Affiliates and their respective employees, 9 + +Source: ARMSTRONG FLOORING, INC., 8-K, 1/7/2019 + + + + + +directors, officers, agents and successors (collectively, the "Indemnified Parties") from and against any and all losses (including all costs, liabilities (including present and future damages), claims and expenses) incurred or suffered by any of the Indemnified Parties, to the extent arising out of, relating to or resulting from (a) a breach by the Indemnifying Party of this Agreement; or (b) any gross negligence or willful misconduct of the Indemnifying Party in connection with this Agreement. 11. DISCLAIMERS 11.1 Disclaimer. Each Party hereby acknowledges that, except to the extent expressly set forth in this Agreement, the Stock Purchase Agreement, the Transition Services Agreement or the Confidentiality Agreement, neither Party nor any of its Affiliates has made any representation or warranty, expressed or implied, including any representation or warranty regarding the validity, enforceability, or scope of the Licensed IP, noninfringement, merchantability or fitness for a particular purpose. 12. TERM 12.1 Term and Termination. (a) Unless earlier terminated pursuant to the provisions hereof, the term of this Agreement and the licenses and other grants of rights (and related obligations) under this Agreement shall (i) with respect to the Arizona Licensed Trademarks, be for the Arizona Trademark License Term, (ii) with respect to the Diamond Licensed Trademarks, be for the Diamond Trademark License Term, (iii) with respect to the Phase- Out Marks, be for the term set forth in Section 6.6, and (iv) with respect to Copyrights, Know-How and Patents, be in perpetuity. (b) Either Party may terminate this Agreement if the other Party materially breaches this Agreement and fails to remedy such breach within thirty (30) days' written notice thereof; provided, however, that if the material breach of this Agreement by the breaching Party is limited to the Licensed Copyrights, Licensed Know-How, the Arizona Licensed Patents, or the Licensed Trademarks, the non-breaching Party shall be entitled to termination solely with respect to the affected part of the license (i.e., in such case, the non-breaching Party may terminate this Agreement with respect to the Licensed Copyrights or the Licensed Know-How or the Arizona Licensed Patents or the Licensed Trademarks, as applicable). 12.2 Effect of Termination. (a) Effect of Termination. Upon termination of this Agreement, each licensee Party shall and shall cause all of its Sublicensees to cease all use of the Licensed IP that is subject to such termination (excluding for clarity (a) any Arizona Licensed Patents, Licensed Copyrights or Licensed Trademarks that are expired, invalid or abandoned or (b) any Licensed Know-How that no longer constitutes confidential information). 10 + +Source: ARMSTRONG FLOORING, INC., 8-K, 1/7/2019 + + + + + +(b) Survival. The following provisions of this Agreement, together with all other provisions of this Agreement that expressly specify that they survive, shall survive expiration or termination of this Agreement, in part or in its entirety: Sections 8, 10, 11, 12.2(a) and 13. 13. MISCELLANEOUS 13.1 Entire Agreement. This Agreement (together with the Schedules attached hereto), the Stock Purchase Agreement, the Transition Services Agreement and the Confidentiality Agreement constitute the entire agreement of the Parties hereto and supersede all prior negotiations, correspondence, agreements and undertakings, both written and oral, between or among the Parties, or any of them, with respect to the subject matter hereof. It shall be expressly understood that the Stock Purchase Agreement shall govern the transactions contemplated thereby as a whole and that this Agreement shall not be construed as an amendment or variation of the Stock Purchase Agreement but rather shall be complemented by and interpreted in light of the Stock Purchase Agreement. In the event that any provision of this Agreement is inconsistent with, conflicts with or contradicts any term of the Stock Purchase Agreement, the terms of the Stock Purchase Agreement will prevail. 13.2 Assignment. Except as otherwise provided in this Agreement, including under Section 7.1, neither this Agreement nor any of the rights, interests or obligations of any Party under this Agreement shall be assigned, in whole or in part, by operation of law or otherwise, by either Party without the prior written consent of the other Party; provided, however, that (a) either Party may assign any of the foregoing in connection with the sale or other transfer of the applicable business or assets of such Party or its Affiliates to which this Agreement relates (except that neither of the Buyer Entities may assign any such rights, interests or obligations with respect to the Arizona Licensed Trademarks); (b) Arizona may assign any of the foregoing to one or more of its Affiliates and (c) the Company and Buyer may assign any of the foregoing to one or more of its Subsidiaries, controlled Affiliates, AWP, or any holding company that is a direct or indirect parent of the Company; provided that in each case (b) and (c), no assignment shall relieve the assigning Party of any of its obligations under this Agreement unless agreed to by the non-assigning Party. Any assignment or other disposition in violation of the preceding sentence shall be void. 13.3 Notices. All notices and other communications given or made pursuant hereto shall be in writing and shall be deemed to have been duly given (i) on the date delivered, if delivered personally, (ii) on the third (3rd) Business Day after being mailed by registered or certified mail (postage prepaid, return receipt requested), or (iii) on the next Business Day after being sent by reputable overnight courier (delivery prepaid), in each case, to the parties at the following addresses, or on the date sent and confirmed by electronic transmission or confirmatory return email to the telecopier number or email address specified below (or at such other address, telecopier number or email address for a Party as shall be specified by notice given in accordance with this Section 13.3): + +(a) If to Buyer: 11 + +Source: ARMSTRONG FLOORING, INC., 8-K, 1/7/2019 + + + + + +c/o American Industrial Partners 450 Lexington Avenue, 40th Floor Attention: General Counsel and Richard Hoffman Email: notices@americanindustrial.com richard@americanindustrial.com + +with a copy to: + +Baker Botts L.L.P. 1299 Pennsylvania Avenue, NW Washington, D.C. 20004 Attention: Terrance L. Bessey Brendan O. Dignan Email: terrance.bessey@bakerbotts.com brendan.dignan@bakerbotts.com + +(b) If to Arizona: + +Armstrong Flooring, Inc. 2500 Columbia Avenue, PO Box 3025 Lancaster, PA 17604 Attention: Christopher S. Parisi Email: csparisi@armstrongflooring.com + +with a copy to: + +Skadden, Arps, Slate, Meagher & Flom LLP 4 Times Square New York, NY 10036 Attention: Eric L. Cochran Steven J. Daniels Email: eric.cochran@skadden.com steven.daniels@skadden.com 13.4 Specific Performance. Each Party hereto acknowledges that money damages would be both incalculable and an insufficient remedy for any breach of this Agreement by such Party and that any such breach would cause Arizona, on the one hand, and the Buyer Entities, on the other hand, irreparable harm. Accordingly, each Party hereto also agrees that, in the event of any breach or threatened breach of the provisions of this Agreement by such Party, Arizona, on the one hand, and the Buyer Entities, on the other hand, shall be entitled to equitable relief without the requirement of posting a bond or other security, including in the form of injunctions and orders for specific performance. Any and all remedies herein expressly conferred upon a Party will be deemed cumulative with and not exclusive of any other remedy conferred hereby, or by law or equity upon such Party, and the exercise by a Party of any one remedy will not preclude the exercise of any other remedy. Arizona, on the one hand, and Buyer Entities, on the other hand, hereby agree not to raise any objections to the availability of the equitable remedy of specific 12 + +Source: ARMSTRONG FLOORING, INC., 8-K, 1/7/2019 + + + + + +performance to prevent or restrain breaches or threatened breaches of this Agreement by the Buyer Entities or Arizona, as applicable, and to specifically enforce the terms and provisions of this Agreement to prevent breaches or threatened breaches of, or to enforce compliance with, the covenants and obligations of the Buyer Entities or Arizona, as applicable, under this Agreement. 13.5 Governing Law; Jurisdiction; Waiver of Jury Trial. (a) This Agreement shall be governed by the laws of the State of Delaware, its rules of conflict of laws notwithstanding. Each Party hereby agrees and consents to be subject to the jurisdiction of the Court of Chancery of the State of Delaware in and for New Castle County, or if the Court of Chancery lacks jurisdiction over such dispute, in any state or federal court having jurisdiction over the matter situated in New Castle County, Delaware, in any Action seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby. Each Party hereby irrevocably consents to the service of any and all process in any such Action by the delivery of such process to such Party at the address and in the manner provided in Section 13.3 hereof. Each of the Parties hereto irrevocably and unconditionally waives any objection to the laying of venue of any Proceeding arising out of this Agreement or the transactions contemplated hereby in the Court of Chancery of the State of Delaware in and for New Castle County, or if the Court of Chancery lacks jurisdiction over such dispute, in any state or federal court having jurisdiction over the matter situated in New Castle County, Delaware, and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such Proceeding brought in any such court has been brought in an inconvenient forum. (b) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE BREACH, TERMINATION OR VALIDITY OF THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (iv) EACH SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 13.5(b). 13 + +Source: ARMSTRONG FLOORING, INC., 8-K, 1/7/2019 + + + + + +13.6 Severability. If any term or other provision of this Agreement, or any portion thereof, is invalid, illegal or incapable of being enforced by any rule of law or public policy, all other terms and provisions of this Agreement, or the remaining portion thereof, shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any Party. Upon such determination that any such term or other provision, or any portion thereof, is invalid, illegal or incapable of being enforced, the Parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are consummated to the fullest extent possible. 13.7 Counterparts. This Agreement may be executed in any number of counterparts, including by means of email in portable document format (.pdf), each of which when executed shall be deemed to be an original copy of this Agreement and all of which taken together shall constitute one and the same agreement. + +[Remainder of page intentionally left blank] 14 + +Source: ARMSTRONG FLOORING, INC., 8-K, 1/7/2019 + + + + + +IN WITNESS WHEREOF, the Parties have duly executed this Agreement as of the date first written above. ARMSTRONG FLOORING, INC. + +By: /s/ Donald R. Maier Name: Donald R. Maier Title: President and Chief Executive Officer + +AFI LICENSING LLC + +By: /s/ Christina Geerlof Name: Christina Geerlof Title: President + +AHF HOLDING, INC. (formerly known as Tarzan Holdco, Inc.) + +By: /s/ Stanley Edme Name: Stanley Edme Title: Vice President + +ARMSTRONG HARDWOOD FLOORING COMPANY + +By: /s/ Jason Braeglemann Name: Jason Braegelmann Title: Vice President [Signature Page to IP Agreement] + +Source: ARMSTRONG FLOORING, INC., 8-K, 1/7/2019 + + + + + +Schedule 1.1(b) - Arizona Assigned Internet Domain Names Domain Name Expiration date Owner amish-handscraped.com 13-Apr-2019 Armstrong Flooring, Inc. ("AFI") amishhandscraped.com 13-Apr-2019 AFI bruce.adult 28-Apr-2019 AFI bruce.biz 26-Mar-2019 AFI bruce.com 21-Jan-2019 AFI bruce.dpml.pub 29-Oct-2019 AFI bruce.dpmlblock 29-Oct-2019 AFI bruce.info 10-Aug-2019 AFI bruce.porn 28-Apr-2019 AFI bruce.xxx 01-Dec-2021 AFI brucebuilder.com 02-Mar-2019 AFI brucecontractor.com 02-Mar-2019 AFI brucedealer.com 02-Mar-2019 AFI brucedistributor.com 02-Mar-2019 AFI brucefloors.com 04-Aug-2019 AFI brucehardwoodfloors.com 11-Apr-2019 AFI brucehome.com 02-Mar-2019 AFI brucelaminate.com 30-Dec-2018 AFI bruceremodeler.com 02-Mar-2019 AFI bruceretailer.com 02-Mar-2019 AFI brucesucks.com 25-Oct-2018 AFI brucesucks.info 22-Sep-2019 AFI capellaflooringcompany.com 12-Nov-2018 AFI capellafloors.com 27-Oct-2018 AFI forestglenhardwood.com 13-Sep-2019 AFI handscraped-hardwood.com 13-Apr-2019 AFI handscrapedhardwoodflooring.com 13-Sep-2019 AFI handscrapedwoodfloor.com 05-Sep-2019 AFI handscrapehardwoodfloor.com 05-Sep-2019 AFI handscrapehardwoodflooring.com 05-Sep-2019 AFI handscrapehardwoodfloors.com 05-Sep-2019 AFI handscrapewoodfloor.com 05-Sep-2019 AFI handscrapewoodflooring.com 05-Sep-2019 AFI handscrapewoodfloors.com 05-Sep-2019 AFI hardwood-flooring.asia 26-Mar-2019 AFI hartco.biz 18-Nov-2018 AFI hartco.info 10-Aug-2019 AFI hartcodistributor.com 02-Mar-2019 AFI hartcoflooring.com 24-May-2019 AFI + +Source: ARMSTRONG FLOORING, INC., 8-K, 1/7/2019 + + + + + +Domain Name Expiration date Owner hartcoflooringcompany.com 18-Jun-2019 AFI hartcohome.com 02-Mar-2019 AFI homerwood.com 14-Sep-2019 AFI lifetimeluxuryhardwood.com 14-Jun-2019 AFI lockandfold.com 20-Nov-2018 AFI luxuryhardwood.com 20-Dec-2018 AFI mybruce.com 25-Jul-2019 AFI mybruce.net 25-Jul-2019 AFI myhartco.com 25-Jul-2019 AFI myhartco.net 25-Jul-2019 AFI myrobbins.com 25-Jul-2019 AFI myrobbins.net 25-Jul-2019 AFI powerofparagon.com 15-Jun-2019 AFI premium-hardwood.com 13-Apr-2019 AFI robbins-home.com 02-Mar-2019 AFI robbins.biz 26-Mar-2019 AFI robbins.com 13-Sep-2019 AFI robbins.info 10-Aug-2019 AFI robbinsflooring.com 21-Nov-2018 AFI robbinsflooring.info 22-Sep-2019 AFI robbinsfloors.com 14-Sep-2019 AFI robbinsfloors.net 17-Apr-2019 AFI robbinshardwoodflooring.com 26-Sep-2019 AFI robbinshighperformance.com 18-Oct-2018 AFI smokedhardwood.com 30-Apr-2019 AFI smokedhardwoodfloor.com 30-Apr-2019 AFI smokedhardwoodflooring.com 30-Apr-2019 AFI smokedhardwoodfloors.com 30-Apr-2019 AFI softscrapedhardwoodfloor.com 05-Sep-2019 AFI softscrapedhardwoodflooring.com 05-Sep-2019 AFI softscrapedhardwoodfloors.com 05-Sep-2019 AFI softscrapedwoodfloor.com 05-Sep-2019 AFI softscrapedwoodflooring.com 05-Sep-2019 AFI softscrapedwoodfloors.com 05-Sep-2019 AFI softscrapehardwoodfloor.com 05-Sep-2019 AFI softscrapehardwoodflooring.com 05-Sep-2019 AFI softscrapehardwoodfloors.com 05-Sep-2019 AFI softscrapewoodfloor.com 05-Sep-2019 AFI softscrapewoodflooring.com 05-Sep-2019 AFI softscrapewoodfloors.com 05-Sep-2019 AFI + +Source: ARMSTRONG FLOORING, INC., 8-K, 1/7/2019 + + + + + +Domain Name Expiration date Owner tmortan.com 07-Sep-2019 AFI tmorten.com 07-Sep-2019 AFI tmortin.com 07-Sep-2019 AFI tmorton-flooring.com 17-Mar-2019 AFI tmorton-floors.com 17-Mar-2019 AFI tmorton-hardwood-flooring.com 17-Mar-2019 AFI tmorton-hardwood-floors.com 17-Mar-2019 AFI tmorton-hardwood.com 17-Mar-2019 AFI tmorton-wood-flooring.com 17-Mar-2019 AFI tmorton-wood-floors.com 17-Mar-2019 AFI tmorton.asia 20-Mar-2019 AFI tmorton.com 17-Mar-2019 AFI tmorton.org 17-Mar-2019 AFI tmortonandco.com 17-Mar-2019 AFI tmortonco.com 17-Mar-2019 AFI wwwbruce.com 01-Mar-2019 AFI wwwhartco.com 17-Jan-2019 AFI wwwrobbins.com 17-Jan-2019 AFI + +Source: ARMSTRONG FLOORING, INC., 8-K, 1/7/2019 + + + + + +Schedule 1.1(e) - Arizona Assigned Patents + +Country App. Status App. Number Filing Date Patent Number Issue Date US Granted 10/459,977 12-Jun-03 7381474 3-Jun-08 AU Granted 2004304906 22-Nov-04 2004304906 28-Oct-10 CN Granted 200480039516 22-Nov-04 ZL200480039516.1 2-Jan-13 DE Granted 6020040309575 22-Nov-04 1944158 11-Feb-17 EP Granted 8007063.4 22-Nov-04 1944158 5-Jan-11 FR Granted 8007063.4 22-Nov-04 1944158 5-Jan-11 GB Granted 8007063.4 22-Nov-04 1944158 5-Jan-11 US Granted 10/727,749 4-Dec-03 7,261,947 28-Aug-07 US Granted 11/901,361 17-Sep-07 8,287,971 16-Oct-12 US Granted 13/611,028 12-Sep-12 8,399,075 19-Mar-13 US Granted 12/825,448 29-Jun-10 8801505 12-Aug-14 US Granted 14/458,103 12-Aug-14 10,072,427 11-Sep-18 AU Granted 2014240948 28-Mar-14 2014240948 20-Oct-16 EP Published 14722915.7 28-Mar-14 AU Granted 2013246000 10-Apr-13 2013246000 26-Nov-15 CA Granted 2,869,667 10-Apr-13 2869667 19-Dec-17 CN Granted 201380018751 10-Apr-13 2512525 9-Jun-17 EP Published 13718698.7 10-Apr-13 US Granted 13/442,960 10-Apr-13 9434087 6-Sep-16 AU Granted 2013246002 10-Apr-13 2013246002 17-Dec-15 CA Granted 2,869,752 10-Apr-13 2869752 3-Jan-17 CN Granted 201380018754 10-Apr-13 104245258 3-May-17 US Granted 13/442,966 10-Apr-12 9,108,335 18-Aug-15 CN Granted 201410046641 10-Feb-14 103978829 12-Apr-17 EP Granted 14154551.7 10-Feb-14 EP2764965 21-Sep-16 US Granted 14/176,299 10-Feb-14 9701040 11-Jul-17 AU Granted 2014240951 28-Mar-14 2014240951 30-Jun-16 AU Granted 2013270463 10-Dec-13 2013270463 26-Nov-15 CN Granted 201310674310 11-Dec-13 103866947 4-Jan-17 AU Granted 2014274549 10-Dec-14 2014274549 15-Oct-15 CA Granted 2,873,571 8-Dec-14 2873571 27-Mar-18 CN Published 201407560485 10-Dec-14 AU Pending 2016287834 5-Jul-16 CN Published 2016800338922 5-Jul-16 + +Source: ARMSTRONG FLOORING, INC., 8-K, 1/7/2019 + + + + + +Country App. Status App. Number Filing Date Patent Number Issue Date EP Published 16818951.2 5-Jul-16 TW Published 20160120286 28-Jun-16 WO Published PCT/US16/40942 5-Jul-16 CN Published 201510954585 17-Dec-15 EP Published 15201544.2 21-Dec-15 US Published 14/970,662 16-Dec-15 AU Pending 2016380976 20-Dec-16 CN Published 20168078711 20-Dec-16 EP Pending 16882368 20-Dec-16 US Published 14/980,263 28-Dec-15 WO Published PCT/US2016/067690 20-Dec-16 AU Pending 2016380975 20-Dec-16 CN Published 201680078712 20-Dec-16 EP Pending 16882368 20-Dec-16 US Published 14/980,313 28-Dec-15 WO Published PCT/US2016/067688 20-Dec-16 WO Published PCT/US2017/055068 5-Oct-17 US Published 15902327 22-Feb-18 WO Published PCT/US18/19186 22-Feb-18 US Granted 09/478,016 5-Jan-00 6164351 26-Dec-00 US Granted 11/390,679 28-Mar-06 7537841 26-May-09 US Granted 09/175,661 20-Oct-98 6148884 21-Nov-00 US Granted 09/303,176 30-Apr-99 6156402 5-Dec-00 US Granted 09/241,878 2-Feb-99 6194078 27-Feb-01 US Pending 62/611953 29-Dec-17 US Expired 62/404,413 5-Oct-16 US Expired 62/462,609 23/Feb-17 US Abandoned 09/903,549 13-Jul-01 US Abandoned 14/828,598 18-Aug-15 US Expired 62/187,925 2-Jul-15 US Granted 12/425,560 17-Apr-09 8,357,752 22-Jan-13 US Granted 13/741,770 15-Jan-13 8,617,654 31-Dec-13 AU Granted 2014274559 10-Dec-14 2014274559 24-Mar-16 EP Published 14199378.2 19-Dec-14 CN Published 2015109813242 23-Dec-15 EP Published 15202406.3 23-Dec-15 US Granted 14/580,347 23-Dec-14 9,567,755 14-Feb-17 + +Source: ARMSTRONG FLOORING, INC., 8-K, 1/7/2019 + + + + + +Country App. Status App. Number Filing Date Patent Number Issue Date US Pending 15/724,391 5-Oct-17 + +Source: ARMSTRONG FLOORING, INC., 8-K, 1/7/2019 + + + + + +Schedule 1.1(f) - Arizona Assigned Trademarks + +Country Trademark Status App. Number App. Date Reg. Number Reg. Date US AMERICAN SCRAPE Registered 85616030 3-May-12 4481771 11-Feb-14 + +CA ARTISAN COLLECTIVE Pending 1817435 10-Jan-17 + +US ARTISAN COLLECTIVE CLTM + +CA ARTISTIC TIMBERS Registered 1670991 2-Apr-14 TMA967273 31-Mar-17 + +US ARTISTIC TIMBERS CLTM + +US BIRCH RUN Registered 85/931,142 14-May-13 4,524,637 6-May-14 + +CA BIRCH RUN Registered 1,636,822 25-Jul-13 TMA905398 4-Jun-15 + +US BRISTOL TRAIL Registered 86919986 25-Feb-16 5423957 13-Mar-18 + +CA BRISTOL TRAIL Published 1769733 26-Feb-16 + +Source: ARMSTRONG FLOORING, INC., 8-K, 1/7/2019 + + + + + +Country Trademark Status App. Number App. Date Reg. Number Reg. Date US BRUSHED IMPRESSIONS Registered 86906683 12-Feb-16 5183009 11-Apr-17 + +CA BRUSHED IMPRESSIONS Published 1768050 16-Feb-16 + +CA CAPELLA Published 1789784 4-Jul-16 + +US DUNDEE Registered 86274578 7-May-14 4649247 2-Dec-14 + +US EVERGUARD Registered 86084365 7-Oct-13 4654066 9-Dec-14 + +US FARMINGTON Registered 86920079 25-Feb-16 5423958 13-Mar-18 + +CA FARMINGTON Published 1769729 26-Feb-16 + +US FOREST GLEN Registered 86084354 7-Oct-13 4633917 4-Nov-14 + +CA FOREST GLEN Registered 1769732 26-Feb-16 961263 27-Jan-17 + +Source: ARMSTRONG FLOORING, INC., 8-K, 1/7/2019 + + + + + +Country Trademark Status App. Number App. Date Reg. Number Reg. Date CA FORGED HERITAGE Published 1,752,076 26-Oct-15 + +CA Hydropel Pending 1917541 30-Aug-18 + +US Hydropel Pending 88148020 9-Oct-18 + +US LOCK&FOLD Registered 76656450 13-Mar-06 3200208 23-Jan-07 + +US MIDTOWN Registered 85736605 24-Sep-12 4401628 10-Sep-13 + +US MILLWORK SQUARE Registered 86906649 12-Feb-16 5183008 11-Apr-17 + +CA MILLWORK SQUARE Published 1768051 16-Feb-16 + +CA ORIGINAL RUSTICS Published 1791791 18-Jul-16 + +US ORIGINAL RUSTICS CLTM + +Source: ARMSTRONG FLOORING, INC., 8-K, 1/7/2019 + + + + + +Country Trademark Status App. Number App. Date Reg. Number Reg. Date US PARAGON CLTM + +CA PARAGON CLTM + +US PRIME HARVEST Registered 86/285,289 19-May-14 4,742,207 26-May-15 + +CA PRIME HARVEST Registered 1,677,599 20-May-14 TMA906580 17-Jun-15 + +US RIGHT EVERY TIME Published 87261852 8-Dec-16 + +US RUSTIC RESTORATIONS Published 87215879 26-Oct-16 5520272 17-Jul-18 + +CA RUSTIC RESTORATIONS Pending 1806462 26-Oct-16 + +US SDF Pending '87947440 4-Jun-18 + +CA SDF Pending 1902212 1-Jun-18 + +Source: ARMSTRONG FLOORING, INC., 8-K, 1/7/2019 + + + + + +Country Trademark Status App. Number App. Date Reg. Number Reg. Date US SIGNATURE SCRAPE Registered 86920111 25-Feb-16 5187924 18-Apr-17 + +CA SIGNATURE SCRAPE Published 1769731 26-Feb-16 + +CA SIGNATURE SOFT SCRAPE Published 1769730 26-Feb-16 + +US TimberBlock Published 87839322 19-Mar-18 + +CA TimberBlock Pending 1889001 20-Mar-18 + +US TIMBERBRUSHED Registered 87105110 15-Jul-16 5267454 15-Aug-17 + +US TIMBERCUTS Registered 87295586 10-Jan-17 5371502 2-Jan-18 + +CA TIMBERCUTS Pending 1817434 10-Jan-17 + +US TIMBERLAND Registered 76496979 13-Mar-03 2923877 1-Feb-05 + +Source: ARMSTRONG FLOORING, INC., 8-K, 1/7/2019 + + + + + +Country Trademark Status App. Number App. Date Reg. Number Reg. Date CA TRANQUIL WOODS Published 1790828 11-Jul-16 + +US TRANQUIL WOODS CLTM + +US TruTop Published 87870541 10-Apr-18 + +CA TruTop Pending 1892873 10-Apr-18 + +CA VINTAGE FARMHOUSE Published 1790827 11-Jul-16 + +US WEAR MASTER Registered 74/329383 9-Nov-92 1834641 3-May-94 + +CN WEAR MASTER Registered 4819937 5-Aug-05 4819937 + +CA OPAL CREEK Registered 1738695 23-Jul-15 1002365 08-Aug-18 + +US OPAL CREEK Registered CLTM + +Source: ARMSTRONG FLOORING, INC., 8-K, 1/7/2019 + + + + + +Schedule 1.1(g) - Arizona Domain Names + +Domain Name Expiration date Owner armstrongwoodproducts.com 19-Dec- 2018 AFI + +Source: ARMSTRONG FLOORING, INC., 8-K, 1/7/2019 + + + + + +Schedule 1.1(l) - Arizona Licensed Patents COUNTRY APP NO. FILING DATE PATENT NUMBER ISSUE DATE AU 2009241803 30-Apr-09 2009241803 26-Sep-13 AU 2013231111 19-Sep-13 2013231111 7-Jan-16 CN 200980120494 30-Apr-09 DE 60 2009 024 610.0 30-Apr-09 2 286 018 EP 9739191.6 30-Apr-09 2286018 11-Jun-14 EP 13192693.3 30-Apr-09 2703461 31-Aug-16 FR 9739191.6 30-Apr-09 2 286 018 11-Jun-14 GB 9739191.6 30-Apr-09 2 286 018 11-Jun-14 US 12/432,845 30-Apr-09 8,420,710 16-Apr-13 US 14/700,669 30-Apr-15 BE 10770074.2 29-Nov-11 2 424 911 23-Mar-16 DE DE 60 2010 031 448.0 29-Nov-11 2 424 911 23-Mar-16 EP 10770074.2 29-Nov-11 2 424 911 23-Mar-16 FR 10770074.2 29-Nov-11 2 424 911 23-Mar-16 GB 10770074.2 29-Nov-11 2 424 911 23-Mar-16 NL 10770074.2 29-Nov-11 2 424 911 23-Mar-16 US 12/799,700 30-Apr-10 US 14/140,206 24-Dec-13 AU 2012286867 26-Jul-12 2012286867 4-Feb-16 CN 2012800367594 26-Jul-12 2094039 1-Jun-16 DE 12751639.1 26-Jul-12 EP2736977 20-May-15 EP 12751639.1 26-Jul-12 EP2736977 20-May-15 GB 12751639.1 26-Jul-12 EP2736977 20-May-15 AU 2013222106 25-Feb-13 2013222106 25-Feb-13 EP 13707792.1 25-Feb-13 US 14/380,432 22-Aug-14 9540825 10-Jan-17 AU 2013308554 30-Aug-13 2013308554 28-Apr-16 CN 201380046030 4-Mar-15 2789549 23-Jan-18 EP 13770989.5 30-Mar-15 EP2890749 16-May-18 US 14/423,186 23-Feb-15 AU 2014207438 8-Jul-15 2014207438 9-Feb-17 EP 14702412.9 14-Aug-15 US 14/760,080 9-Jul-15 AU 2014207441 8-Jul-15 2014207441 10-Nov-16 CN 2014800055962 15-Jul-15 2581656 11-Aug-17 EP 14703007.6 14-Aug-15 + +Source: ARMSTRONG FLOORING, INC., 8-K, 1/7/2019 + + + + + +COUNTRY APP NO. FILING DATE PATENT NUMBER ISSUE DATE US 14/760,060 9-Jul-15 AU 2015227440 16-Sep-15 2015227440 30-Mar-17 CN 2015105859497 23-Dec-14 3045520 24-Aug-18 EP 15198373.1 8-Dec-15 US 14/580,312 23-Dec-14 9650792 16-May-17 EP 1151281 12-Jul-00 1072659 13-Oct-04 US 10/062,616 31-Jan-02 6572932 3-Jun-03 US 10/060,487 30-Jan-02 6911263 28-Jun-05 AU 2016243556 6-Nov-17 CN 2016800223098 16-Oct-17 EP 16719581.7 14-Nov-17 TW 105110285 31-Mar-16 624366 21-May-18 US 14/678,163 3-Apr-15 WO PCT/US16/24457 28-Mar-16 AU 2016243132 6-Nov-17 CN 2016800229978 20-Oct-17 EP 16718052 14-Nov-17 US 15564161 3-Oct-17 WO PCT/US16/24462 28-Mar-16 US 62/142,611 3-Apr-15 AU 2016243552 6-Nov-17 CN 2016800226325 18-Oct-17 EP 16719580.9 14-Nov-17 US 14/678,183 3-Apr-15 WO PCT/US16/24451 28-Mar-16 AU 2016357732 18-Apr-18 CN 2016800648806 7-May-18 EP 16866982.8 14-Jun-18 US 15776637 16-May-18 WO PCT/US2016/062133 16-Nov-16 WO PCT/US2017/055060 5-Oct-17 WO PCT/US2017/055047 4-Oct-17 WO PCT/US2017/055077 4-Oct-17 WO PCT/US2017/055089 5-Oct-17 WO PCT/US2017/055044 5-Oct-17 WO PCT/US2017/055033 4-Oct-17 US 14/721,724 26-May-15 9468314 18-Oct-16 + +Source: ARMSTRONG FLOORING, INC., 8-K, 1/7/2019 + + + + + +Schedule 1.1(m) - Arizona Licensed Trademarks + +ARMSTRONG + +Source: ARMSTRONG FLOORING, INC., 8-K, 1/7/2019 + + + + + +Schedule 1.1(s) - Company Licensed Patents + +Country App. Status App. Number Filing Date Patent Number Issue Date US Granted 12/425,560 17-Apr-09 8,357,752 22-Jan-13 US Granted 13/741,770 15-Jan-13 8,617,654 31-Dec-13 CN Published 2015109813242 23-Dec-15 EP Published 15202406.3 23-Dec-15 US Granted 14/580,347 23-Dec-14 9,567,755 14-Feb-17 US Pending 15/724,391 5-Oct-17 + +Source: ARMSTRONG FLOORING, INC., 8-K, 1/7/2019 + + + + + +Schedule 1.1(u) - Diamond Licensed Trademarks + +DIAMOND 10 + +Source: ARMSTRONG FLOORING, INC., 8-K, 1/7/2019 + + + + + +Schedule 6.1 - Presentation of Arizona Licensed Trademarks + +Armstrong Logo Usage: 1. Logo Colors: The Armstrong logo can appear only in black, white or 100% Tungsten. If reversed out white, it should be on a dark background color. The entire mark must be the same color. The Armstrong logo cannot be used alone. + +2. Logo Size: The minimum logo size is 1" or 25mm. In digital formats, the minimum width is 100 pixels at 72 dpi. + +Source: ARMSTRONG FLOORING, INC., 8-K, 1/7/2019 + + + + + +3. Clear Space: If the business unit identifier is used below the logo, the clear space is 1∕2 the diameter of the Armstrong ring on the top, right side and left side and the width of the stem in in the lower case "r" on the bottom. + +If the business unit identifier is used above the logo, the clear space is 1∕2 the diameter of the Armstrong ring on the right side, left side and bottom and the width of the stem of the lower case "r" on the top. + +a. There is no clear space defined below the business unit identifier if used below the logo and no clear space defined above the business unit identifier if used above the logo. b. If the business unit identifier is two lines, the clear space definition applies to the top most line, if used above, or bottom most line, if used below the Armstrong logo. 4. Font: The Armstrong logo is considered art and the font type, spacing, bold, cannot be modified. + + 5. Logo Background: The logo should never be used on a busy background or one that does not provide enough contrast. + +Source: ARMSTRONG FLOORING, INC., 8-K, 1/7/2019 + + + + + +6. Logo Direction: The logo can be used on an angle or vertically but must read left to right and top to bottom + +7. Circle A: The Circle A can never be used as a separate graphic element. + +Notice: 1. The trademark should always be distinguishable from surrounding text - at a minimum, the trademark notice (TM or ®) should be used at least the first time in the text. After first instance, mark should appear with some other distinguishing feature (e.g., different font, all caps, and/or different color) from the surrounding text. 2. Must include notice of AWI Licensing LLC's ownership of the trademark within the credit notice of the product, product documentation, or other product communication. (E.g., Armstrong and the Armstrong Logo are registered trademarks of AWI Licensing LLC. + +Source: ARMSTRONG FLOORING, INC., 8-K, 1/7/2019 + + + + + +Schedule 6.2 - Presentation of Diamond Licensed Trademarks + +Diamond 10® Technology trademark and logo usage: 1. When using Diamond 10® Technology in sentences to identify goods or services: a. Always mark with ® (required for first usage on page) b. Always add a space between Diamond and 10. c. Always keep the entire mark together. 2. Use of Diamond 10® or the Diamond 10® logo must include notice of AFI Licensing LLC's ownership of the trademark within the credit notice of the product, product documentation, or other product communication. (E.g., Diamond 10 and the Diamond 10 Technology logo are registered trademarks of AFI Licensing LLC.) 3. Logo Colors: Can appear only in White or 4 Color Process comprised of Morado, Tungsten and Black. If reversed out White, use only on dark background color for contrast. + +COLORS + +Source: ARMSTRONG FLOORING, INC., 8-K, 1/7/2019 + + + + + +4. Logo Size: A general guideline for the maximum width of the logo in any application should be the equivalent to 20% of the width of the shortest side. Exceptions may be made for signage and promotional materials. The minimum logo size is 1" or 25mm. In digital formats, the minimum width is 100 pixels at 72 dpi. + +Source: ARMSTRONG FLOORING, INC., 8-K, 1/7/2019 + + + + + +5. Clear Space: The size of the clear space around the logo is determined by the size of the circle of the capital height of the word diamond. + +6. Font: The Diamond 10 Technology logo is considered art and the font type, spacing, bold, cannot be modified. + +7. Logo Background: The logo should never be used on a busy background or one that does not provide enough contrast. + +Source: ARMSTRONG FLOORING, INC., 8-K, 1/7/2019 + + + + + +Exhibit A - Trademark License Agreement + +Attached. + +Source: ARMSTRONG FLOORING, INC., 8-K, 1/7/2019 \ No newline at end of file diff --git a/full_contract_txt/Array BioPharma Inc. - LICENSE, DEVELOPMENT AND COMMERCIALIZATION AGREEMENT.txt b/full_contract_txt/Array BioPharma Inc. - LICENSE, DEVELOPMENT AND COMMERCIALIZATION AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..57fe866ed946b6e48b5d822992f4556b51433f81 --- /dev/null +++ b/full_contract_txt/Array BioPharma Inc. - LICENSE, DEVELOPMENT AND COMMERCIALIZATION AGREEMENT.txt @@ -0,0 +1,2157 @@ +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +CONFIDENTIAL + +EXECUTION VERSION + +LICENSE, DEVELOPMENT AND COMMERCIALIZATION AGREEMENT + +THIS LICENSE, DEVELOPMENT AND COMMERCIALIZATION AGREEMENT (this "Agreement") dated as of May 31, 2017 (the "Effective Date"), is made and entered into by and between Array BioPharma Inc., a company organized under the laws of Delaware and having its principal place of business at 3200 Walnut Street, Boulder, CO 80301 USA, ("Array") and Ono Pharmaceutical Co., Ltd., a company duly organized and existing under the laws of Japan, having offices and principal place of business at 8-2, Kyutaromachi 1-chome, Chuo-ku, Osaka 541-8564, Japan ("Ono"). + +BACKGROUND + +A. Array now owns or controls certain patents, know-how and other intellectual property relating to the Products (as defined below); + +B. Ono has experience in developing, marketing and distributing pharmaceutical products; + +C. Array and Ono wish to collaborate on the further development, manufacture and commercialization of the Products, with Ono taking the lead role in such efforts in the Ono Territory (as defined below); and + +D. Array is willing to grant to Ono, and Ono desires to obtain, certain exclusive rights and licenses with respect to the manufacture, registration and commercialization of the Products in the Ono Territory. Array will retain the right to develop and commercialize the Products for the Array Territory, all on the terms and conditions set forth herein. + +NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows: + +ARTICLE I DEFINITIONS + +1.1 "Affiliate" of a Party means any person, corporation or other entity that, directly or indirectly, controls, is controlled by, or is under common control with such Party, as the case may be. As used in this Section 1.1, the word "control" (including, with correlative meaning, the terms "controlled by" or "under the common control with") shall mean the actual power, either directly or indirectly through one or more intermediaries, to direct or cause the direction of the management and policies of such entity, whether by the ownership of more than fifty percent (50%) of the voting share capital in such person, corporation, or other entity, or by contract or otherwise. + +1.2 "Annual Net Sales" means the Net Sales generated over any given Fiscal Year, or in the case of the Fiscal Year in which the First Commercial Sale of the first Product occurs, the Net Sales generated during the period commencing on the date of such First Commercial Sale and continuing until the end of such Fiscal Year. + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +1.3 "Applicable Regulatory Exclusivity Period" means with respect to a particular Product and particular country in the Ono Territory, the period commencing upon the receipt of the first grant of Regulatory Exclusivity in such country for such Product ("Initial Regulatory Exclusivity"), and continuing until the later of (i) the expiration of such Initial Regulatory Exclusivity, or (ii) if any subsequent grant of Regulatory Exclusivity is received prior the expiration of the Initial Regulatory Exclusivity, then until the expiration of such additional Regulatory Exclusivity if such expiration would occur after the expiration of the Initial Regulatory Exclusivity. + +1.4 "Array Know-How" means, subject to Section 4.4(c)(ii), all scientific, medical, technical, manufacturing, marketing, regulatory, market access and other information (including clinical data and other related information generated in compliance with CDISC standards) relating to Binimetinib, Encorafinib, a Product and/or any Companion Diagnostic useful with respect to the Development, Manufacturing, registration (including registration for MAA) or Commercialization of a Product (including the Data), to the extent Controlled by Array or its Controlled Affiliates as of the Effective Date or during the term of this Agreement, and needed by or reasonably useful to Ono in order for Ono to exercise its rights or perform its obligations under this Agreement. Notwithstanding the foregoing or Section 1.18 (Data) below, but subject to Section 2.4 (Future Third Party Partners), Array Know-How shall in any case include all such items that are generated by or under authority of Array, or any of its Affiliates, in connection with Development Manufacturing, and/or Commercialization of the Product during the term of this Agreement. + +1.5 "Array Patents" means the Patents Controlled by Array or its Controlled Affiliates as of the Effective Date or during the term of this Agreement that: + +(a) are listed on Exhibit 1.5; or + +(b) but for the license granted under this Agreement, would be infringed by the Development, Manufacturing, registration, packaging, or Commercialization of a Product in the Ono Territory (including the identification of patients who would benefit from the Product based on the presence or absence of selected biomarkers); and + +(c) all additions, divisions, continuations, substitutions, re-issues, re-examinations, registrations, patent term extensions, supplemental protection certificates, and renewals of any the Patents listed on Exhibit 1.5 or to the extent the same would satisfy the requirements of subsection (b) above. + +1.1 "Array Territory" means all countries worldwide, excluding the Ono Territory. + +2 + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +1.2 "Binimetinib" means the compound known as MEK162, the chemical structure of which is depicted in Exhibit 1.7 as well as all salts, non-covalent complexes, hydrates, solvates, chelates, crystal polymorph or radiolabeled equivalent thereof. + +1.3 "Business Days" means any day other than Saturday, Sunday, a day within Array's company-wide corporate holidays (for Array's obligations) or Ono's company-wide corporate holidays (for Ono's obligations) or any other day on which commercial banks in USA or Japan are authorized or required by law to remain closed. + +1.4 "Calendar Year" means any period of time commencing on January 1 and ending on the next December 31 unless otherwise noted. + +1.5 "CDISC" means Clinical Data Interchange Standards Consortium which is an interdisciplinary nonprofit organization that establishes international standards for data collection, interchange, application, and storage for the purpose of promoting interoperation of clinical research data. + +1.6 "Change in Control" means, with respect to a Party, that any of the following occurs with respect to such Party after the Effective Date: + +(a) any "person" or "group" (as such terms are defined below) (i) is or becomes the "beneficial owner" (as defined below, except that a "person" or "group" shall be deemed to have "beneficial ownership" of all shares of capital stock or other equity interests if such person or group has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of shares of capital stock or other interests (including partnership interests) of such Party then outstanding and normally entitled (without regard to the occurrence of any contingency) to vote in the election of the directors, managers or similar supervisory positions ("Voting Stock") of such Party representing more than fifty percent (50%) of the total voting power of all outstanding classes of Voting Stock of such Party or (ii) has the power, directly or indirectly, to elect a majority of the members of such Party's board of directors or similar governing body; + +(b) such Party enters into a merger, consolidation or similar transaction with another Person (whether or not such Party is the surviving entity) and as a result of such merger, consolidation or similar transaction the Persons that beneficially owned, directly or indirectly, the shares of Voting Stock of such Party immediately prior to such transaction cease to beneficially own, directly or indirectly, shares of Voting Stock of such Party representing at least a majority of the total voting power of all outstanding classes of Voting Stock of the surviving Person in substantially the same proportions as their ownership of Voting Stock of such Party immediately prior to such transaction; or + +3 + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +(c) such Party sells or transfers to any Third Party, in one or more related transactions, properties or assets representing all or substantially all of such Party's assets to which this Agreement relates. + +For the purpose of this definition of Change in Control: (i) "person" and "group" have the meanings given such terms under Section 13(d) and 14(d) of the United States Securities Exchange Act of 1934 and the term "group" includes any group acting for the purpose of acquiring, holding or disposing of securities within the meaning of Rule 13d-5(b)(1) under the aforesaid Act; (ii) a "beneficial owner" shall be determined in accordance with Rule 13d-3 under the aforesaid Act; (iii) the terms "beneficially owned" and "beneficially own" shall have meanings correlative to that of "beneficial owner"; and (iv)"Person" means any natural person, corporation, firm, business trust, joint venture, association, organization, company, partnership or other business entity or any government, any agency or political subdivisions thereof. + +Such "person" or "group" in Section 1.11(a), such surviving Person in Section 1.11(b) or such Third Party in Section 1.11(c) shall be referred to herein as "Acquirer". + +1.7 "Clinical Studies" means any human clinical study of a Product, including without limitation Post-Approval Marketing Clinical Studies. + +1.8 "Combination Product" means any pharmaceutical preparations, in any dosage strengths, formulations and methods of administration, that combine Binimetinib or Encorafenib and one or more other active ingredients (other than Binimetinib or Encorafenib) in fixed dose combination, whether co-formulated or co-packaged. + +1.9 "Commercialization" means all processes and activities conducted to establish and maintain sales for the Products, including offering for sale, distribution, detailing, selling (including launch), promoting, importing, exporting, market access activities, all marketing activities undertaken prior to and after the launch of the Products (including education and advertising activities), branding, developing promotional materials, advertising, organizing speakers programs and post-marketing safety surveillance and reporting. "Commercialize" and "Commercializing" shall have the correlative meanings. + +1.10 "Companion Diagnostic" means an in vitro diagnostic medical device as defined in the European directive 98/79/EC; for the avoidance of doubt the term Companion Diagnostic includes companion diagnostics for a pharmaceutical product as defined in FDA's "Draft Guidance for Industry and Food and Drug Administration Staff - In Vitro Companion Diagnostic Devices". + +1.11 "Control" (including any variations such as "Controlled" and "Controlling"), in the context of intellectual property rights, data and/or other information, means that such Party or its Affiliate owns, is licensed or otherwise possesses rights to such intellectual property, data and/or information, + +4 + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +as applicable, sufficient to grant the applicable license or sublicense under this Agreement, without violating the terms of an agreement with a Third Party in existence as of the time such Party or its Affiliates would first be required hereunder to grant the other Party such (sub)license, right to use or access. + +1.12 "Controlled Affiliates" means, with respect to a Party, any Affiliate that is controlled (as defined in Section 1.1) by such Party. + +1.13 "Data" means, subject to Section 1.51 (Ono Know-How) and Section 4.4(c)(ii), any and all research data, pharmacology data, preclinical data, clinical data and/or all Regulatory Filings and/or other regulatory documentation, information and submissions pertaining to, or made in association with an IND, Marketing Approval Application, Marketing Approval or Pricing and Reimbursement Approvals, or any Post-Approval Marketing Clinical Study for each Product, in each case to the extent Controlled by a Party or its Affiliates as of the Effective Date or during the term of this Agreement. + +1.14 "Development" or "Develop" means non-clinical and clinical research and drug development activities, including toxicology, pharmacology, statistical analysis, Clinical Studies (including pre- and post-approval studies, Post-Approval Marketing Clinical Studies and Investigator Sponsored Clinical Studies), stability testing, formulation, process development, quality assurance/control development, regulatory affairs, and regulatory activities pertaining to designing and carrying out Clinical Studies and obtaining and maintaining Marketing Approvals (including pre-marketing activities but excluding regulatory activities directed to obtaining Pricing and Reimbursement Approvals). + +1.15 "Diligent Efforts" means, with respect to the efforts to be expended by a Party, with respect to any objective, reasonable, good faith efforts to accomplish such objective as such Party would normally use to accomplish a similar objective under similar circumstances for such Party's benefit. Without limiting the foregoing, with respect to efforts relating to the Development of, obtaining Marketing Approval or Pricing and Reimbursement Approval for, or Commercialization of the Product, generally or with respect to any particular country, "Diligent Efforts" means a sustained, continued and active commitment of efforts and resources by a Party consistent with those normally applied in the pharmaceutical industry with respect to compounds or products with similar market at a similar stage in the product life cycle that such Party is actively developing or commercializing (as applicable), taking into account the stage and risk of development or commercialization of the Product, issues of safety or efficacy, the cost effectiveness of efforts or resources while optimizing profitability, the competitiveness of alternative Third Party compounds, products or generics that are or are expected to be in the marketplace, the scope and duration of Patents or other intellectual property rights related to the compound or product (including any Regulatory Exclusivity), the profitability of the Product (including pricing and reimbursement status achieved or likely to be achieved) or other relevant commercial factors, + +5 + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +but not taking into account (a) any other pharmaceutical product such Party is then researching, developing or commercializing, alone or with one or more collaborators, or (b) any payments required to be made to the other Party hereunder. + +1.16 "EMA" means the European Medicines Agency, or any successor entity thereto performing similar functions. + +1.17 "Encorafenib" means the compound known as LGX818, the chemical structure of which is depicted in Exhibit 1.22, as well as all salts, non-covalent complexes, hydrates, solvates, chelates, crystal polymorph, or radiolabeled equivalent thereof. + +1.18 "FDA" means the U.S. Food and Drug Administration, or any successor entity thereto performing similar functions. + +1.19 "Field" means the diagnosis, treatment and/or prevention of diseases and conditions in humans. + +1.20 "First Commercial Sale" means, with respect to a Product the first bona fide, arm's length sale of such Product in the Ono Territory following receipt of the first Marketing Approval of such Product in the Ono Territory. + +1.21 "Fiscal Year" means each successive period of twelve (12) months commencing on April 1 of a particular calendar year and ending on March 31 of the immediately following the calendar year. Notwithstanding the foregoing, it is understood that the first Fiscal Year shall commence on the Effective Date and end on March 31, 2018. + +1.22 "Global Registration Study" means a study of a Product conducted by or under authority of a Party that is intended to support the filing of an MAA for such Product with the FDA, the PMDA and, as applicable, the EMA and/or MFDS. Global Registration Studies shall include human clinical studies designed as a pivotal study to confirm with statistical significance the efficacy and safety of the Product with respect to a given Indication (whether structured as a superiority, equivalence or non- inferiority study), which study is performed for purposes of filing an MAA or similar application to obtain Marketing Approval for a Product for such Indication from the FDA, the PMDA and, as applicable, the EMA or MFDS (regardless of whether such Clinical Study is identified as a Phase III clinical study on ClinicalTrials.gov), including a clinical study as described under 21 C.F.R. §312.21(c) with respect to the United States (or, with respect to a jurisdiction other than the United States, a similar clinical study). + +6 + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +1.23 "Good Clinical Practice or "GCP" means the current standards for clinical studies for pharmaceuticals, as set forth in the ICH guidelines and applicable regulations promulgated thereunder, as amended from time to time. + +1.24 "Good Laboratory Practice or "GLP" means the current standards for laboratory activities for pharmaceuticals, as set forth in the FDA's Good Laboratory Practice regulations or the Good Laboratory Practice principles of the Organization for Economic Co-Operation and Development, as amended from time to time, and such standards of good laboratory practice as are required by the MHLW and other organizations and governmental agencies in countries in which a Product is intended to be sold, to the extent such standards are not less stringent than United States Good Laboratory Practice. + +1.25 "Good Manufacturing Practices or "GMP" means all laws and guidelines applicable to the Manufacture of Binimetinib, Encorafenib or Product, including (i) the FD&C Act (21 U.S.C. 321 et seq.); (ii) relevant United States regulations in Title 21 of the United States Code of Federal Regulations (including Parts 11, 210, and 211); (iii) European Community Directives 2001/83/EC and 2003/94/EC; (iv) the EU Guidelines to Good Manufacturing Practice Medicinal Products for Human and Veterinary Use, as set out in Volume 4 of the European Commission's Rules governing medicinal products in the EU; (v) those standards required by the Japanese Ministry of Health Labour and Welfare (MHLW); (vi) International Conference on Harmonisation of Technical Requirements for Registration of Pharmaceuticals for Human Use ("ICH"), Q7 Good Manufacturing Practice Guidance for Active Pharmaceutical Ingredients; (vii) similar standards and Laws to those in (i) through (vi), as are in effect at the time of Manufacture; and (viii) all additional Regulatory Authority documents or regulations that replace, amend, modify, supplant or complement any of the foregoing. + +1.26 "Governmental Authority" means any domestic or foreign entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, including any governmental authority, agency, department, board, commission, court, tribunal, judicial body or instrumentality of any union of nations, federation, nation, state, municipality, county, locality or other political subdivision thereof. + +1.27 "Improvement" means any Patent, invention or other intellectual property made or used by or under authority of Ono (including any Ono Know-How) in connection with Development, Manufacture and/or Commercialization of Binimetinib, Encorafenib and/or a Product, in each case, to the extent the same is owned or Controlled by Ono or any of its Affiliates. + +1.28 "IND" means an investigational new drug application (including any amendments thereto) filed with the PMDA before the commencement of Clinical Studies for a Product in Japan, or any comparable filing with any Regulatory Authority in any other jurisdiction within or outside the Ono Territory (including any Investigational New Drug Application filed with a Regulatory Authority in the United States pursuant to 21 C.F.R. §321). + +7 + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +1.29 "Indication" means an initial, expanded or additional patient population for which use of a Product is indicated, as reflected or to be reflected in the approved label for such Product. + +1.30 "Initial Royalty Term" means, on a Product-by-Product and country-by-country basis within the Ono Territory, the period beginning on the date of the First Commercial Sale of such Product in a country until the last of: (a) [ * ] thereafter; (b) the expiration of all Valid Claims within the Array Patents that would, but for the license granted under this Agreement, be infringed by the sale or use of such Product in such country or (c) the expiration of the Applicable Regulatory Exclusivity Period for such Product in such country. Notwithstanding the foregoing, in the event that it has been more than [ * ] since the First Commercial Sale of a Product in a country and the Initial Regulatory Exclusivity with respect to such Product has expired but either (i) a subsequent grant of Regulatory Exclusivity is still in effect, and/or (ii) one or more Valid Claims within the Array Patents that cover such Product in such country　are still in effect, then if Generic Market Share with respect to such Product in such country equals or exceeds [ * ], the Initial Royalty Term will immediately terminate with respect to such Product.　 + +1.31 "Investigator Sponsored Clinical Study" means a clinical study of a Product that is sponsored and conducted by a physician, physician group or other Third Party not acting on behalf of a Party or an Affiliate and who does not have a license from a Party or its Affiliate to commercialize such Product, pursuant to an IND owned by such Third Party, and with respect to which a Party or its Affiliate provides clinical supplies of the Product, funding or other support for such clinical study. + +1.32 "IST Guidelines" means the guidelines governing the conduct of Investigator Sponsored Clinical Studies of the Product, which is attached hereto as Exhibit 1.37. + +1.33 "Joint Inventions" means all inventions arising during the term of the Agreement that (a) are jointly created or reduced to practice by employees, consultants, or contractors of Array or its Affiliates and by employees, consultants, or contractors of Ono or its Affiliates, and (b) relate to Binimetinib, Encorafenib and/or Products. + +1.34 "Joint Know-How" means all know-how arising during the term of the Agreement that (a) is jointly generated by employees, consultants, or contractors of Array or its Affiliates and by employees, consultants, or contractors of Ono or its Affiliates, and (b) relates to Binimetinib, Encorafenib and/or Products. + +1.35 "Joint Patent" means a Patent that covers or claims a Joint Invention. + +1.36 "Law" means any applicable national, supranational, federal, state, local or foreign law, statute, ordinance, principle of common law, or any rule, regulation, standard, judgment, order, writ, injunction, decree, arbitration award, agency requirement, license or permit of any Governmental + +8 + + + + + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +Authority, including any rules, regulations, guidelines, directives or other requirements of Regulatory Authorities, including all GMP, GLP and GCP, and including all laws pertaining to the pharmaceutical industry or the healthcare industry and all anti-bribery or anti-corruption laws, as applicable. + +1.37 "Manufacture" means any activities related to the production, manufacture, processing, filling, packaging, labeling, releasing, shipping (including shipping configurations and shipping studies), supply and holding of a compound or product or any intermediate thereof, including process development, process qualification and validation, scale-up, improvements or changes, pre- clinical, clinical and commercial manufacture and analytic development, product characterization, quality assurance and quality control (including in-process testing, release testing or stability testing). When used as a verb, "to Manufacture" and "Manufacturing" mean to engage in Manufacture and "Manufactured" has a corresponding meaning. + +1.38 "Marketing Approval" (or "MA") means such approvals, licenses, registrations or authorizations of the Regulatory Authorities in a country, that are necessary to Commercialize a Product in such country. Marketing Approval shall not be deemed to include Pricing and Reimbursement Approval. + +1.39 "Marketing Approval Application" (or "MAA") means an application requesting Marketing Approval for the Commercialization of a Product for a particular Indication in a particular jurisdiction filed with the relevant Regulatory Authorities in such jurisdiction. + +1.40 "Market Access" means any and all processes and activities conducted to establish and maintain national country reimbursement, as well as at country level, regional and local payor processes and activities to obtain and maintain local and regional patient access for the Products, including price setting, national mandatory rebate negotiations with Governmental Authorities and preparing reimbursement and economic dossiers. + +1.41 "MFDS" means the Ministry of Food and Drug Safety in Korea, or any successor entity thereto performing similar functions. + +1.42 "MHLW" means the Ministry of Health, Labour, and Welfare in Japan, or any successor entity thereto performing similar functions. + +1.43 "Net Sales" means the gross amounts invoiced by Ono, its Affiliates and/or Sublicensees (each, a "Selling Party") for the sales of a Product to a Third Party, less reasonable and customary deductions for the following costs incurred by the Selling Party on the sale to such Third Party: + +(a) trade, quantity and cash discounts actually granted to such Third Party; + +9 + + + + + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +(b) credits, rebates, chargeback and allowances to such Third Party on account of rejection or returns of such Product (including wholesaler and retailer returns) or on account of retroactive price reductions affecting the Product; + +(c) a fixed amount of [ * ] of gross sales to cover freight, postage, insurance costs on shipments to such Third Party, packing costs, and other transportation charges; and + +(d) sales and excise taxes, other consumption taxes, customs duties, and compulsory payments to Governmental Authorities, including mandatory sales-based contributions actually made by the Selling Party for "Contributions for Drug Induced Suffering" and any sales-based contribution for "Contribution for Measure for Drug Safety," in the amount determined by and payable to PMDA each as consistently applied by the Selling Party across all of its pharmaceutical products sold in Japan, and any other governmental, health insurance or other payers' charges, rebates, or discounts, retroactive or otherwise, imposed by or negotiated with Governmental Authorities with respect to the sale of such Product to such Third Party actually paid and separately identified on the invoice or other documentation maintained in the ordinary course of business. + +Ono shall ensure that all sales of Products are accurately invoiced and that Net Sales are calculated and accounted for in accordance with IFRS as consistently applied. Sales between Ono and its Affiliates or Sublicensees for resale shall be excluded from the computation of Net Sales, but the subsequent resale of such Product shall be included within the computation of Net Sales. + +For the purposes hereof, "Net Sales" shall not include any consideration received with respect to a sale, use or other disposition of any Product in a country for Development purposes or as samples or for charitable purposes, provided such consideration is no greater than the cost of goods of the Product units so sold, used or distributed. + +In the event that the Product is sold as a Combination Product, the Net Sales will be calculated by multiplying the Net Sales of the Combination Product by the fraction, A/(A+B) where A is the weighted (by sales volume) average sale price in the relevant country of the Product containing Binimetinib or Encorafenib as the sole active ingredient in finished form, and B is the weighted average sale price (by sales volume) in that country of the product(s) containing the other component(s) as the sole active ingredient(s) in finished form. Regarding prices comprised in the weighted average price when sold separately referred to above, if these are available for different dosages from the dosages of Binimetinib or Encorafenib and other active ingredient components that are included in the Combination Product, then the applicable Party shall be entitled to make a proportional adjustment to such prices in calculating the Net Sales of the Combination Product. If the weighted average sale price cannot be determined for the Product or other product(s) containing the single licensed compound or component(s), the calculation of Net Sales for Combination Products will be agreed by the Parties based on the relative value contributed by each component (each Party's agreement not to be unreasonably withheld or delayed). + +10 + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +1.44 "Party" means Array or Ono, individually; and "Parties" means Array and Ono, collectively. + +1.45 "Patent(s)" means any patents and patent applications, together with all additions, divisions, continuations, continuations-in-part, substitutions, reissues, re-examinations, registrations, patent term extensions, supplemental protection certificates, and renewals of any of the foregoing. + +1.46 "Ono Know-How" means all scientific, medical, technical, marketing, regulatory, market access and other information (including clinical data and other related information generated in compliance with CDISC standards) relating to Binimetinib, Encorafenib and/or a Product (including the Data), that (a) exists as of the Effective Date or is developed, acquired or otherwise comes within the Control of Ono during the term of this Agreement and (b) in each case is actually used by Ono in the Development, Manufacturing or Commercialization of a Product, and is needed by or reasonably useful to Array in order for Array to exercise its rights (including the conduct of activities directed towards Developing the Product for Commercialization outside the Ono Territory and/or the Commercialization of the Product outside the Ono Territory) or perform its obligations under this Agreement. Notwithstanding the foregoing or Section 1.18 (Data) above, Ono Know-How shall in any case include all such items that are generated by or under authority of Ono, or any of its Affiliates or Sublicensees, in connection with Development, Manufacturing and/or Commercialization of the Product during the term of this Agreement. + +1.47 "Ono Territory" means Japan and Republic of Korea ("Korea"). + +1.48 "Post-Approval Marketing Clinical Study" means a Clinical Study that is a marketing study, epidemiological study, pharmacoeconomic study, or post-marketing surveillance study of a Product, in each case that is conducted after Marketing Approval has been obtained in the applicable territory and that is not intended for use as a basis for obtaining Marketing Approval (e.g., for a further Indication, label expansion or otherwise) with respect to the Product and that is not being conducted as a commitment made to a Regulatory Authority as a condition of, or in connection with obtaining or maintaining, a Marketing Approval). + +1.49 "Pricing and Reimbursement Approval" means, with respect to any country or jurisdiction in the Ono Territory in which Governmental Authorities determine the pricing at which the Product will be reimbursed, the approval, agreement, determination or decision by the applicable Governmental Authorities establishing the pricing and reimbursement status for the Product. + +1.50 "Product" means shall mean any pharmaceutical product containing, as an active ingredient, one or more of Binimetinib or Encorafenib, including, without limitation, any Combination Product. + +11 + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +1.51 "Product Trademarks" means: (a) the product-specific trademarks owned or Controlled by Array and designated by Array for use with Products containing Binimetinib, as reflected on Exhibit 1.56(a); (b) the product-specific trademarks owned or Controlled by Array and designated by Array for use with Products containing Encorafenib, as reflected on Exhibit 1.56(b); and (c) any other product-specific trademark(s) and service mark(s) as may be proposed by either Party and reviewed by the JCC for use in connection with the distribution, marketing, promotion and sale of a Product in the Ono Territory, or accompanying logos, trade dress or indicia of origin. + +1.52 "Regulatory Authority" means the MHLW or its review agency, the Pharmaceutical and Medical Devices Agency (generally known as IYAKUHIN IRYOKIKI SOGO KIKO) in Japan ("PMDA") or a regulatory body with similar regulatory authority in any country/jurisdiction within the Ono Territory or in any jurisdiction outside the Ono Territory (e.g., the FDA and EMA). + +1.53 "Regulatory Exclusivity" means any exclusive marketing rights or data exclusivity rights conferred by any applicable Regulatory Authority, other than an issued and unexpired Patent, including any regulatory data protection exclusivity (including, where applicable, pediatric exclusivity and/or orphan drug exclusivity) and/or any other exclusivity afforded by restrictions which prevent the granting by a Regulatory Authority of regulatory approval to market a Generic Version. + +1.54 "Regulatory Filing" means all approvals, licenses, registrations, submissions and authorizations made to or received from a Regulatory Authority in a jurisdiction necessary for or in connection with the development, manufacture and/or commercialization of a pharmaceutical product, including any INDs, Marketing Approval Applications, Marketing Approvals, and Pricing and Reimbursement Approvals. + +1.55 "Secondary Royalty Term" means on a Product-by-Product and country by country basis within the Ono Territory, the period commencing on the expiration of the Initial Royalty Term for such Product and continuing until the [ * ] of the expiration of the Initial Royalty Term for such Product in such country. + +1.56 "Senior Executives" means the Executive Directors of each of Ono and Array. + +1.57 "Subcontractor" means any Third Party to which a Party or its Affiliate may subcontract the performance of any activities undertaken in accordance with this Agreement, provided that for clarity any entity which is involved in the selling of Products and is responsible for booking sales of Products shall not be included within this definition. + +1.58 "Sublicensee" means a Third Party that has been granted a right to market and sell a Product in the Ono Territory (and optionally, the additional right to Develop such Product) pursuant to Section 2.2; and "Sublicense" shall mean an agreement or arrangement granting such rights. As used + +12 + + + + + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +in this Agreement, "Sublicensee" shall not include a wholesaler, distributor or reseller of such Product, to the extent that Ono sells to such person the Product at supply prices, and the arrangement does not include royalty payments or other payments tied to the revenue such wholesaler, distributor or reseller receives upon resale of the Product, whether paid in arrears or as transfer price unless such payment structure is consistent to that applied by Ono for its other oncology products in the relevant country, and /or significant lump sum payments. + +1.59 "Third Party" means any person, corporation, joint venture or other entity, other than Array, Ono and their respective Affiliates. + +1.60 "Third Party Partner" means Pierre Fabre Medicament SAS ("PFM") and any other Third Party to which Array grants a license or sublicense, as applicable, under the Array Patents and Array Know How to market and sell Product(s) outside the Ono Territory, either with or without accompanying rights to Develop and/or Manufacture such Product(s). + +1.61 "Valid Claim" means a claim of an issued and unexpired Patent (including the term of any patent term extension, supplemental protection certificate, renewal or other extension) which has not been held unpatentable, invalid or unenforceable in a final decision of a court or other government agency of competent jurisdiction from which no appeal may be or has been taken, and which has not been admitted to be invalid or unenforceable through reissue, re-examination, disclaimer or otherwise. + +1.62 Additional Definitions. Each of the following terms shall have the meaning described in the corresponding section of this Agreement indicated below: + +13 + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +Term Section Defined Term Section Defined Approved Clinical Study 4.4(a)(i) Infringement Actions 11.4(a) Arbitration Tribunal Array Array Indemnitees + +17.3(a) Introduction 16.1 + +Infringing Product JCC Chairperson 11.3(a)(i) 3.3 + +Array Regulatory Filings 4.6(b) JDRC Chairperson 3.3 Audited Site 4.6(d)(ii) Joint Clinical Study Proposal 4.4(a) Auditor AZ 7.4 11.3(a)(ii) Joint Commercial Committee /JCC 3.2(a) + +AZ Agreement BEACON Clinical Study 11.3(a)(ii) 4.1(c) Joint Development and Regulatory Committee /JDRC 3.1(a) + +Blocking Patent 6.5 Joint Development Plan 4.4(a)(i) CAPA COLUMBUS Clinical Study Combination Study(ies) + +4.6(d)(ii) 4.1(c) 4.5(b)(i) + +Liabilities Liaison Local Study(ies) + +16.1 3.7 4.5(b)(i) Commercializing Party 2.3(a) Marketing Materials 5.1(c) Commercialization Plan 5.1(b) Materials 9.1(a) Committee 3.3 Medical Journal 10.4 Committee Dispute Competing Product 3.5(a) 8.2 NEMO Clinical Study [ * ] 4.1(c) 14.2(a)(ii) + +Confidential Information Declined Clinical Study Development Plan Dispute Domain Name + +10.1 4.4(c)(i) 4.2(a) 17.3 12.6 + +Non-Performing Party Novartis Ono Ono Indemnitees Patient Sample + +4.4(c)(i)(D) 4.1(c) Introduction 16.2 4.10 Drug Product Drug Substance 9.1(b) 9.1(b) Performing Party 4.4(c)(i)(D) + +Education Materials Effective Date 5.1(c) Introduction PFM Agreement Product Materials 2.4(a) 14.2(a)(vi) Enforcing Party Existing Clinical Studies Expert Dispute Expert Resolution Notice + +11.3(a)(i) 4.1(c) 17.2(a) 17.2(b) + +Quality Agreement Royalty Payments Royalty Report Rules + +9.4(b) 6.3 6.3(d) 17.3(a) Experts Generic Version Global Study(ies) + +17.2(c) 6.4(c)(i) 4.5(b)(iii) + +Scientific Meeting Scientific Paper Subcontract + +10.5 10.4 18.11 Government Official 15.1(f) Subject Party 11.4(a) Grant-Back License Indemnitee Indemnitor + +2.6 16.3 16.3 + +Sublicensing Party Supply Agreement Third Party Claim + +2.3(a) 9.4(b) 16.1 + + Third Party Technology Wind-down Period 2.3(a) 14.2(a)(ii) Working Group 3.6 + +14 + + + + + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +ARTICLE II GRANT OF LICENSE + +2.1 Licenses. + +(a) Development License. Subject to the terms and conditions of this Agreement, including without limitation Array's retained rights under Section 2.1(e) below, Array hereby grants to Ono an exclusive license, with the right to grant sublicenses as provided in Section 2.2, under the Array Patents, Array Know-How and Array's interests in the Joint Patents and Joint Know- How to Develop the Products in accordance with the Development Plan and Joint Development Plan(s) in the Ono Territory solely for purposes of obtaining Marketing Approval for use of the Product in the Field in the Ono Territory. + +(b) Manufacturing License. Subject to the terms and conditions of this Agreement, Array hereby grants to Ono a worldwide non-exclusive license under the Array Patents, Array Know-How and Array's interests in the Joint Patents and Joint Know-How to (i) Manufacture and have Manufactured Binimetinib and Encorafenib for use in the Manufacture of Products, and (ii) Manufacture and have Manufactured Products, in each case for use in Developing and Commercializing such Products in accordance with the rights and license granted to Ono under Sections 2.1(a) and 2.1(c). The licenses granted under this Subsection 2.1(b) may be sublicensed by Ono only to its Affiliates, and then only for so long as such entities remain as Affiliates. For clarity, the licenses granted under this Subsection 2.1(b) may be extended by Ono to Third Party manufacturers for Manufacturing the Products on Ono's behalf. + +(c) Commercialization License. Subject to the terms and conditions of this Agreement, Array hereby grants to Ono an exclusive license, with the right to grant sublicenses and appoint distributors as provided in Section 2.2, under the Array Patents, Array Know-How and Array's interests in the Joint Patents and Joint Know-How to Commercialize the Products in the Field in the Ono Territory. + +(d) Certain Clarifications. For clarity, it is understood that the foregoing licenses do not include the right to modify Binimetinib or Encorafenib and Ono agrees that it shall not, and shall ensure that its Affiliates, Sublicensees and any other Third Parties to whom it provides Products, Binimetinib or Encorafenib, do not, modify or make improvements to Binimetinib or Encorafenib. + +(e) Array Retained Rights. Except for the rights and licenses expressly granted to Ono in this Agreement, Array retains all rights under the Array Patents and Array Know-How, including its interest in the Joint Patent and Joint Know-How. Without limiting the foregoing and notwithstanding the exclusive license granted to Ono under Section 2.1(a) above, Array retains + +15 + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +all rights to, itself, through Affiliates and/or through Third Party contractor or Third Party Partner, conduct Clinical Studies (and file all Regulatory Filings required in connection with the such Clinical Studies) with respect to Products in the Ono Territory to the extent permitted under Section 4.5 below. + +2.2 Sublicensees and Distributors. + +(a) It is understood and acknowledged that Array's decision to select Ono to commercialize Products in the Ono Territory was based in part on the understanding that Ono currently markets pharmaceutical products in the Ono Territory and that Ono intends to market Products in the same manner. Ono shall have the right, in accordance with this Section 2.2, to grant sublicenses under the Array Patents and Array Know-How to its Affiliates and to Third Parties, provided that Ono shall not engage a Third Party as either (i) a Sublicensee of the Product, or (ii) as a distributor of the Product, without Array's prior written consent. For clarity, a wholesaler shall not be considered a "distributor" for purposes of the foregoing restriction. + +(b) Ono shall ensure that each of its Sublicensees and distributors is bound by a written agreement between Ono and such Sublicensee or distributor that does not conflict with, and contains provisions as protective of the Products and Array, as this Agreement. Without limiting any of Ono's obligations under this Agreement, Ono shall also ensure that each Sublicensee expressly agrees in writing to be bound by all of Ono's obligations under this Agreement to the extent applicable to such Sublicensee, including without limitation, the following provisions of this Agreement (as if such Sublicensee were expressly named in each such provision, to the extent Ono's Sublicensees are not so named therein): Sections 2.6 (Grantback License to Array), 4.7 (Exchange of Data and Know-How); 4.8 (Right of Reference and Access to Data); 7.4 (Records), 8.2 (Exclusivity of Efforts) and 14.2 (transition obligations on termination). + +(c) Ono shall in all cases remain responsible for any actions of its Affiliates and Sublicensees exercising rights under a sublicense of the rights granted by Array to Ono under this Agreement to the same extent as if such actions had been taken by Ono itself. + +(d) Promptly following the execution of each Sublicense to a Sublicensee, Ono shall provide Array with an executed copy of such Sublicense which may be redacted as described below (together with a detailed English summary of such sublicense agreement if such Sublicense was originally executed in a language other than English); and Ono shall also provide to Array an executed copy (which may be redacted as described below) of any amendment to a Sublicense that relates to a Product (together with a detailed English summary of such amendment, if such amendment was originally executed in a language other than English), promptly following the execution of each such amendment. Ono may redact from copies of executed Sublicenses and Sublicense amendments + +16 + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +to be provided hereunder any confidential terms that are not necessary to enable Array determine Ono's compliance with its obligations under this Agreement. + +(e) Ono shall not grant sublicenses or appoint distributors other than in accordance with this Section 2.2. + +2.3 Third Party Technology Acquired after Effective Date. + +(a) Generally. If after the Effective Date, Array or Ono (the "Sublicensing Party") acquire rights from a Third Party that are to be licensed to the other Party under this Agreement, respectively ("Third Party Technology"), but that is subject to royalty or other payment obligations to the Third Party, then the following shall apply: The licenses granted to the other Party (the "Commercializing Party") hereunder with respect to such Third Party Technology shall be subject to the Commercializing Party's agreeing to promptly reimburse and promptly reimbursing the Sublicensing Party for any milestone payments, royalties or other amounts that become owing to such Third Party by reason of the Commercializing Party's exercise of such license or sublicense to the Third Party Technology. To the extent that any such payments made by a Sublicensing Party under an agreement to acquire Third Party Technology are not attributable to either the Array Territory or Ono Territory, but are attributable to the acquisition of rights to a Third Party Technology used for the Product, such payments shall be allocated [ * ] to Array and [ * ] to Ono to the extent that such Third Party Technology has been licensed by the Sublicensing Party on a global basis and is equally applicable to the Products being sold in the Array Territory and the Ono Territory. In all other cases such costs shall be allocated between Array and Ono by the JDRC on a pro rata basis based on the respective value of Third Party Technology in the Array Territory or Ono Territory. At the inception of the inclusion of any Third Party Technology in such license under this Agreement and thereafter upon request by the Commercializing Party, the Sublicensing Party shall disclose to the Commercializing Party a true, complete and correct written description of such payment obligations, and the Commercializing Party's obligation to reimburse such amounts following such request shall be limited to those payment obligations as so disclosed by the Commercializing Party. In the event that the Commercializing Party does not agree to reimburse or does not promptly reimburse the Sublicensing Party for such amounts upon request (such amounts as determined by the JDRC in accordance with this Agreement, to the extent so provided above), then such Third Party Technology shall thereafter be deemed excluded from the licenses or other subject matter licensed hereunder. + +(b) Right to Offset. With respect to payments that Ono has agreed to reimburse to Array pursuant to subsection 2.3(a) above, Ono shall be entitled to treat such payments as payments made to Third Parties with respect to Blocking Patents for purposes of Section 6.6 below. + +2.4 Future Third Party Partners. + +17 + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +(a) Array and Pierre Fabre Medicament SAS ("PFM") have previously entered into that certain Development and Commercialization Agreement, dated as of November 10, 2015 (such agreement, as subsequently amended, the "PFM Agreement") pursuant to which Array and PFM are collaborating on the Development of Products in the U.S. and Europe. Under the PFM Agreement, Array is authorized to provide Ono with access to data, know-how and improvements generated by PFM and a right of reference with respect to PFM's Regulatory Filings provided that Ono consents to Array granting to PFM reciprocal access to data, know-how, rights of reference and improvements generated by Ono. Such access and rights of reference shall be granted to Ono without charge, provided that the reciprocal rights of access and rights of reference granted by Ono are without charge. + +(b) If after the Effective Date, Array retains a Third Party Partner for the Product in one or more countries in the Array Territory, Array shall use Diligent Efforts to gain such Third Party Partner's consent to allow Array to (i) share with Ono under Section 4.7 (Exchange of Data and Know-How) the clinical data and know-how generated by such Third Party Partner, (ii) extend to Ono under Section 4.8 (Rights of Reference and Access to Data) a right to reference the Regulatory Filings of such Third Party Partner with respect to Products, and (iii) extend to Ono a license under improvements made by such Third Party Partner, in each case: (A) to the extent that such data, know-how, rights of reference and improvements are necessary or reasonably useful for Ono's Development, preparation of MAAs and filing of MAAs with respect to Products in the Ono Territory or Commercialization of the Product in the Ono Territory and (B) without charge, however it is understood that a failure of Array to obtain such rights shall not be deemed a breach of this Section 2.4. Notwithstanding any other provisions of this Agreement, Array agrees that it shall not provide such future Third Party Partner with access to Data and Improvements generated by Ono or a right of reference with respect to Ono's Regulatory Filings except to the extent such Third Party Partner agrees to Ono with reciprocal access to data, know-how, rights of reference and improvements generated by such Third Party Partner. It is further agreed that to the extent that such future Third Party Partner conditions Ono's access to such data, know-how, rights of reference and improvements on payment from Ono, Ono may require that Array conditions such future Third Party Partner's access to Ono's data, know-how, rights of reference and improvements on receipt of similar payment. + +2.5 Activities Outside the Respective Territory. + +(a) To the extent permitted under applicable Law, Ono agrees that neither it, nor any of its Affiliates, will sell or provide the Product to any Third Party, if Ono or its relevant Affiliate knows, or has reason to know, that Products sold or provided to such Third Party may be sold or transferred, directly or indirectly, for use in the Array Territory. + +18 + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +(b) To the extent permitted under applicable Law, Array agrees that neither it, nor any of its Affiliates, will sell or provide the Product to any Third Party, if Array or its relevant Affiliate knows, or has reason to know, that Products sold or provided to such Third Party may be sold or transferred, directly or indirectly, for use in the Ono Territory. + +2.6 Grant-Back License to Array. Ono hereby grants to Array a non-exclusive, worldwide, royalty free license, with the right to issue and authorize sublicenses through multiple tiers subject to the last sentence of Section 2.4(b), under any Improvements and Ono's interest in Joint Patent and Joint Know-How solely to make, use, sell, offer for sale, import, the Products (collectively, the "Grant-Back License"), subject to the exclusive rights granted to Ono under this Agreement. Promptly following the execution of a sublicense to a Third Party Partner, Array shall notify Ono of such sublicense in writing. + +2.7 No Other Rights. Except for the rights and licenses expressly granted in this Agreement, each Party retains all rights under its intellectual property, and no additional rights shall be deemed granted to the other Party by implication, estoppel or otherwise. For clarity, the licenses and rights granted in this Agreement shall not be construed to convey any licenses or rights under the Array Patents or Improvements with respect to any drug substances other than Binimetinib or Encorafenib or to any products other than Products. + +ARTICLE III GOVERNANCE + +3.1 Joint Development and Regulatory Committee. + +(a) Establishment. As soon as reasonably practicable after the Effective Date, but in no event later than sixty (60) days following the Effective Date, Array and Ono shall establish a Joint Development and Regulatory Committee ("Joint Development and Regulatory Committee" or "JDRC"). + +(b) Duties. The JDRC shall: + +(i) review and discuss and accept or reject the initial Development Plan; + +(ii) review and update the Development Plan, as needed, but no less frequently than once each Fiscal Year, and present to the JDRC for review and approval all proposed material changes to the Development Plan; + +(iii) oversee Ono's implementation of the Development Plan; + +19 + + + + + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +(iv) review, discuss and accept or reject Joint Clinical Study Proposals submitted by either Party; + +(v) prepare any Joint Development Plans with respect to any Joint Clinical Study Proposals agreed by the Parties as well as any changes to such Joint Development Plans; + +(vi) review, discuss and accept or reject any changes to the Joint Development Plans; + +(vii) oversee both Parties' implementation of the Joint Development Plans, allocate responsibilities to each Party in connection with executing such Joint Development Plans and review Ono's execution of its responsibilities under the Development Plan + +(viii) review, discuss and accept or reject clinical study design and protocols for Clinical Studies included in the Development Plan or within any Joint Development Plan, including clinical study endpoints, clinical methodology and monitoring requirements for such Clinical Studies; + +(ix) establish, review and update the IST Guidelines; review and discuss plans for any proposed Investigator Sponsored Clinical Studies that are not expressly authorized in the IST Guidelines; + +(x) discuss clinical supply and CMC activity; + +(xi) review and discuss the regulatory strategy and Market Access strategies for the Product in the Ono Territory (and substantive amendments and updates thereto); + +(xii) provide a forum for the Parties: (A) to discuss and agree upon, material issues pertaining to the Development of the Product for the Ono Territory, and matters pertaining to Regulatory Filings for the Product in the Ono Territory; and (B) to coordinate their respective activities with respect to the foregoing matters; + +(xiii) provide a forum for resolving disputing and other matters referred to the JDRC under this Agreement, pursuant to the procedures set out in Section 3.5 below; and + +(xiv) perform such other duties as are specifically assigned to the JDRC in this Agreement. + +20 + + + + + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +3.2 Joint Commercial Committee. + +(a) Establishment. At the appropriate timing determined by the Parties, but no less than one (1) year prior to expected approval of the Product in the Ono Territory, Ono and Array shall establish a joint commercial committee ("Joint Commercial Committee" or "JCC"). + +(b) Duties. The JCC shall: + +(i) review the Commercialization Plan (including any substantive amendments and updates thereto); + +(ii) review the commercialization plan and marketing strategy of Array in the Array Territory; + +(iii) serve as the first forum for discussing disputes or disagreements resulting from, arising out of or in relation to the Commercialization of the Product in the Ono Territory; and + +(i) have such other responsibilities as may be assigned to the JCC pursuant to this Agreement or as may be mutually agreed upon by the Parties in writing from time to time. + +3.3 Committee Membership. The JDRC and JCC (each, a "Committee") shall each be composed of an equal number of representatives from each of Ono and Array, selected by such Party. Unless the Parties otherwise agree, the exact number of representatives for each of Ono and Array shall be: (a) with respect to the JDRC, four (4) representatives drawn from the ranks of senior directors or employees of each Party having appropriate expertise in the area of the Development and possessing authority to make decisions on behalf of the Party they represent; and (b) with respect to the JCC, three (3) representatives drawn from the ranks of senior directors or employees of each Party having appropriate expertise in the area of the Commercialization and at least one (1) of whom shall be at a level which allows him/her to make decisions on behalf of the Party they represent. Either Party may replace its respective Committee representatives at any time with prior written notice to the other Party; provided that the criteria for composition of each Committee set forth in the preceding sentence continues to be satisfied following any such replacement of a Party's representative on any such Committee. An alternate member designated by a Party may serve temporarily in the absence of a member each of the JDRC or JCC for such Party. Each Party may invite its employees involved in each of the Development or the Commercialization of the Product for each of JDRC meeting or JCC meeting with the prior notice to the other Party. Each Party shall designate one of their members each of the JDRC or the JCC to be a co-chairperson. The JDRC shall be co-chaired by one (1) representative selected by Array and one (1) representative selected by Ono (the "JDRC Chairpersons"). The JCC shall be co-chaired by one (1) representative selected by Array and one (1) representative selected by Ono (the "JCC + +21 + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +Chairpersons"). Either Party shall have the right to change their JDRC Chairperson or JCC Chairperson from time to time by written notice to the other Party. + +3.4 Committee Meetings. The JDRC and JCC shall meet at least twice each Calendar Year, or as more or less often as otherwise agreed to by the Parties. All Committee meetings may be conducted by telephone, video-conference or in person as determined by the applicable Committee; provided that the JDRC shall meet in person at least once each Calendar Year. Unless otherwise agreed by the Parties, all in-person meetings for each Committee shall be held on an alternating basis between Array's facilities and Ono's facilities. In addition to the regular meetings, either Party may request an ad-hoc meeting of the JDRC and JCC to solve any specific issues from time to time. Each Party shall bear its own personnel and travel costs and expenses relating to Committee meetings. With the consent of the Parties (not to be withheld unreasonably), other employee representatives of the Parties may attend any Committee meeting as non-voting observers. + +3.5 Decision-Making. + +(a) Escalation; Default Rules for Resolution. With respect to any decisions delegated to the Committees, decisions of each Committee shall be made by unanimous vote, with at least one (1) representative from each Party participating in any vote. The JDRC and JCC shall use good faith efforts to reach consensus on matters within its decision-making authority. In the event the JDRC or JCC fails to reach unanimous agreement with respect to a particular matter within its authority, then such matter shall be referred to an executive of each Party who is senior in rank and authority to such Party's JDRC or JCC representatives ("Senior Executive(s)") who shall meet promptly and negotiate in good faith to resolve the dispute. If, despite such good faith efforts, the Senior Executives are unable to resolve such dispute (each, a "Committee Dispute"), then, Ono shall have the casting vote for the matter, except for those matters expressly set forth in Section 3.5(b) below; provided, however, any and all casting votes shall be made in good faith, and after good faith consideration of Array's comments or requests on such matters, and with due regard for the impact of such casting vote on Development and Commercialization of the Products outside the Ono Territory. + +(b) Exceptions to Default Rules for Resolution. + +(i) To the extent the subject of a Committee Dispute is a modification of the Development Plan or the design or protocol of a Clinical Study to be conducted thereunder, Ono shall cast the deciding vote on such matter; provided that such deciding vote shall be subject to and limited by the following: + +(A) If such Committee Dispute relates to whether a new Indication outside oncology should be included in the Development Plan, then such matter shall be determined in accordance with Section 17.2 (and such determination shall become the decision of the JDRC); + +22 + + + + + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +(B) If such Committee Dispute relates to a proposal to adopt a new formulation (i.e., other than solid dose oral formulations) for use in the Ono Territory, then such matter shall be determined in accordance with Section 17.2 (and such determination shall become the decision of the JDRC); and + +(C) If such Committee Dispute relates to a proposal to develop a new fixed dose Combination Product for use in the Ono Territory, then such matter shall be determined in accordance with Section 17.2 (and such determination shall become the decision of the JDRC). + +(ii) If such Committee Dispute relates to whether to accept or reject under Section 4.4(b) a Joint Clinical Study Proposal, neither Party shall have a deciding vote, such matter shall not be determined in accordance with Section 17.2 and such Joint Clinical Study Proposal shall be adopted only as the Parties mutually agree. For clarity, once a Joint Clinical Study Proposal has been agreed by the Parties, then any Committee Dispute with respect to such Joint Development Plan or Approved Clinical Studies, or the performance thereof or changes thereto, shall be subject to resolution in accordance with Section 17.2. + +(iii) If such Committee Dispute relates to the allocation of costs for Third Party Technology under Section 2.3(a), then such matter shall be determined in accordance with Section 17.2 (and such determination shall become the decision of the JDRC). + +(iv) If such Committee Dispute relates to whether to approve a request by Ono to authorize an Investigator Sponsored Clinical Study that falls within one of the categories listed in the IST Guidelines, then such matter shall be determined in accordance with Section 17.2 (and such determination shall become the decision of the JDRC). + +(v) If such Committee Dispute relates to the establishment of trademark guidelines for use of the Binimetinib Product Trademark or Encorafenib Product Trademark to be established by the JCC, Array shall have the casting vote. + +(vi) If such Committee Dispute relates to whether any Marketing Materials, training manuals and/or Educational Materials developed and used by Ono, its Affiliates and Sublicensees for the Product in the Ono Territory are consistent with the reasonable trademark guidelines for use of the Binimetinib Product Trademark or Encorafenib Product Trademark agreed upon by the JCC, then such matter shall be determined in accordance with Section 17.2 (and such determination shall become the decision of the JDRC). + +(vii) If such Committee Dispute relates to whether any action by either Party under this Agreement would negatively impact the safety, commercial value or reputation of the Products, then such matter shall be determined in accordance with Section 17.2 (and such determination shall become the decision of the JDRC). + +23 + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +For clarity: (x) in the event of a Committee Dispute with respect to a proposed action that, pursuant to Section 3.5(a), has been referred to the Experts for a determination in accordance with Section 17.2, the Party proposing to take the action that is the subject of such dispute shall not proceed with such action unless and until the dispute has been resolved and JDRC has determined to authorize such action (either by agreement or decision of the Experts pursuant to Section 17.2); and (y) neither Party shall have the right to cast a deciding vote: (1) to excuse itself from any of its obligations specifically enumerated under this Agreement; or (2) to amend, modify or update to the Joint Development Plan. The resolution of the Experts with respect to a matter referred to the Experts for a determination pursuant to this Section 3.5 (b) shall be deemed a resolution of the JDRC thereafter and, subject to the terms and conditions of this Agreement, such decision shall be binding on the Parties. + +3.6 Working Groups. Upon mutual agreement, the Parties may establish other committees or working groups (each, a "Working Group") as they deem appropriate. These Working Groups shall report to the JDRC or JCC depending on the subject matter of such Working Group's oversight. Each Working Group shall have equal number of representatives from each Party. Working Group may be established on an ad hoc basis for purposes of a specific project. In no event shall the authority of a Working Group exceed that of the JDRC or JCC. + +3.7 Liaisons. Within thirty (30) days following the Effective Date, each Party shall appoint a representative ("Liaison") to facilitate communications between the Parties (including, coordinating the exchange of Data and know-how of each Party as required under this Agreement) and to act as a liaison between the Parties with respect to such other matters as the Parties may mutually agree in order to maximize the efficiency of the collaboration. Each Party may replace its Liaison with an alternative representative at any time with prior written notice to the other Party. Each Party's Liaisons shall be entitled to attend all Committee meetings. Each Liaison may bring any matter to the attention of the Committees where such Liaison reasonably believes that such matter requires attention of the Committees. Each Liaison shall be responsible with creating and maintaining a collaborative work environment within and among the Committees. + +3.8 Scope of Governance. Notwithstanding the creation of the JDRC or JCC, each Party shall retain the rights, powers and discretion granted to it hereunder, and no Committee shall be delegated or vested with rights, powers or discretion unless such delegation or vesting is expressly provided herein, or the Parties expressly so agree in writing. No Committee shall have the power to amend or modify this Agreement and shall only have such powers as are specifically delegated to it hereunder. No decision of any Committee shall be in contravention of any terms and conditions of this Agreement. The Liaisons shall not have any rights, powers or discretion except as expressly granted to the Liaisons hereunder and in no event shall the Liaisons have any power to modify or amend this Agreement. It is understood and agreed that issues to be formally decided by the JDRC or JCC, as applicable, are only those specific issues that are expressly provided in this Agreement to be decided by the JDRC or + +24 + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +JCC, as applicable. It is also understood that no Committee shall have any authority to take any decision over activities related to the registration and/or commercialization of the Product for use in the Array Territory. + +3.9 Cost of Governance. The Parties agree that the costs incurred by each Party in connection with its participation at any meetings under this Article 3 shall be borne solely by such Party. + +ARTICLE IV DEVELOPMENT AND REGULATORY ACTIVITIES + +4.1 Overview. + +(a) General. Except as otherwise expressly provided in a Joint Development Plan, Ono (itself or through its Affiliates or respective licensees or sublicensees) shall be responsible for the Development of the Products for the Ono Territory. All Development activities conducted by or on behalf of Ono hereunder shall be conducted in accordance with the Development Plan or Joint Development Plan(s), as applicable, and in compliance with applicable Law, including laws regarding environmental, safety and industrial hygiene, Good Laboratory Practice and Good Clinical Practice, current standards for pharmacovigilance practice, and all applicable requirements relating to the protection of human subjects. Except as otherwise set forth in a Joint Development Plan, Ono shall bear all of the costs and expenses which it incurs in connection with any of the activities it performs in the course of the Development of the Products for the Ono Territory. + +(b) Collaborative Development. The Parties recognize that since the Products will be developed both in the Ono Territory and the Array Territory, regulatory and budget efficiencies can be achieved through the Parties' coordination and worldwide use of preclinical and clinical data and in cooperatively conducting certain joint Clinical Studies. Accordingly, the Parties agree that it is their mutual interest to cooperatively conduct the Approved Clinical Studies to be agreed upon and set forth in Joint Development Plans as described in Section 4.4 below. + +(c) Current Development Status. Prior to the Effective Date, Novartis AG ("Novartis") and/or Array have independently initiated the following Clinical Studies of the Products: (i) a Phase III clinical trial in NRAS Melanoma ("NEMO Clinical Study"), (ii) a Phase III clinical trial in BRAF Melanoma ("COLUMBUS Clinical Study"), (iii) a Phase III clinical trial in BRAF Colorectal Cancer ("BEACON Clinical Study"), and (iv) those additional Phase 1 and Phase 2 Clinical Studies and Investigator Sponsored Clinical Studies set forth in Exhibit 4.1 (collectively, the "Existing Clinical Studies"). Array shall use Diligent Efforts to complete, at its expense, the Existing Clinical Studies (including all pharmacovigilance aspects), including contracting and managing any contract research organization(s) that may be involved in such Existing Clinical Studies, and Array shall keep the JDRC informed of the status thereof and Ono + +25 + + + + + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +shall have the opportunity to comment on the progress of the BEACON study through the JDRC. As between the Parties: (and subject to applicable agreements and consent requirements) Array shall have the right to implement modifications to any Existing Clinical Study(ies), provided that Array shall not implement any modification to any Existing Clinical Study(ies) that would prejudice Ono as regards safety or reputational issues, or the intended objectives for such Clinical Studies, or cause a material delay in such Existing Clinical Study(ies), and provided further that Array shall use Diligent Efforts to keep Ono informed through the JDRC of any material modification to any Existing Clinical Study(ies) being conducted in the Ono Territory. + +(d) Investigator Sponsored Clinical Studies. Notwithstanding Section 3.1(b)(viii) above, Ono shall have the right to authorize the protocol for Investigator Sponsored Clinical Study in the Ono Territory and support such Clinical Study at Ono's own discretion so long as such study does not fall within one of the categories listed in the IST Guidelines, however Ono agrees to inform Array of all such Investigator Sponsored Clinical Study(ies) in order to allow Array to provide Ono comments with respect to such proposed Investigator Sponsored Clinical Study(ies) in a timely manner. For clarity, in the event that a proposed Investigator Sponsored Clinical Study falls within one of the categories listed in the IST Guidelines, then authorization of such Investigator Sponsored Clinical Study shall require the agreement between the Parties through the JDRC. + +4.2 Development Plan; Amendments. + +(a) Initial Development Plan. Promptly following the Effective Date, and in any event within one hundred and twenty (120) days following the Effective Date, Ono shall prepare a plan detailing the Development activities ("Development Plan"), if any, that are necessary for obtaining Marketing Approval in the Ono Territory of (i) a Binimetinib Product and an Encorafenib Product for BRAF-mutant melanoma and (ii) a Binimetinib Product and an Encorafenib Product for BRAF-mutant colorectal cancer for review, discussion and approval (or rejection) by the JDRC. The initial Development Plan shall outline all of the regulatory activities, as well as of the Development activities, if any, planned to be conducted in order to obtain Marketing Approval in each country in the Ono Territory for the Products and Indications described in (i) and (ii) above and shall set out a more detailed description of the designs for any (A) all Clinical Studies, (B) pre-clinical studies and (C) other Development activities, that may be are necessary for obtaining the above referenced Marketing Approval and which are planned to be conducted during the first twelve (12) month period covered by such plan. + +(b) Updates and Changes to the Development Plan. Ono shall provide to the JDRC, for its review, discussion and approval (or rejection), an updated version of the Development Plan at least once each Fiscal Year, at the first JDRC meeting in each Fiscal Year; and such updated Development Plan shall include at least the level of detail regarding Ono's Development and + +26 + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +regulatory activities for the Products as the level of detail included in the Development Plan to be provided within one hundred and twenty (120) days after the Effective Date pursuant to Section 4.2(a). In addition, Ono shall provide to the JDRC any material modifications or additions to the then-current Development Plan for review, discussion and approval (or rejection) by the JDRC. + +(c) Diligence. Ono shall use Diligent Efforts to achieve the goals set forth in the then-current Development Plan in accordance with the timelines specified therein. + +4.3 Development by Ono. Except with respect to the Existing Clinical Studies and as provided in Section 4.4 (Joint Clinical Studies), subject to the oversight of the JDRC, Ono shall, at its expense, be responsible for the conduct of all further Development of the Product for the Ono Territory. Ono shall use Diligent Efforts to Develop, at its expense, the Products for the Ono Territory so as to maximize the sales potential for the Product in the Ono Territory for the initial Indications set forth in Section 4.2(a)(i) and (ii) and such other Indications as the Parties may elect through the JDRC to include within the Development Plan, including conducting Clinical Studies and other Development efforts in order to obtain and maintain Marketing Approval for the Product in the Ono Territory for such other Indications as the Parties may elect through the JDRC to include within the scope of this Agreement. Ono shall carry out all such activities in accordance with the then-current Development Plan and the provisions of this Agreement. + +4.4 Joint Clinical Studies. + +(a) Joint Clinical Study Proposals. From time to time during the term of this Agreement, either Party may submit to the JDRC a proposal for one or more joint Clinical Studies that would support the filing of Marketing Approval Applications for the Product with Regulatory Authorities in both the Ono Territory and the Array Territory (a "Joint Clinical Study Proposal"). Each such Joint Clinical Study Proposal shall include a draft synopsis, proposed timelines for the conduct of such studies, as well a proposed budget for such studies. The JDRC shall review and discuss each such Joint Clinical Study Proposal and shall approve or reject such Joint Clinical Study Proposal in its discretion. + +(i) If the JDRC approves a Joint Clinical Study Proposal, such Joint Clinical Study Proposal shall thereafter be deemed to be an "Approved Clinical Study" and the JDRC will create a Working Group to prepare a full development plan ("Joint Development Plan") covering the Approved Clinical Study based on the Joint Clinical Study Proposal. Unless otherwise agreed by the Parties, if such Approved Clinical Study(ies) are Global Registration Studies, then the cost of such Approved Clinical Study(ies) (including out-of-pocket costs incurred by the Parties together with FTE-costs associated with the Parties' personnel managing such Approved Clinical Study) shall be allocated eighty eight percent (88%) to Array and twelve percent (12%) to Ono. + +27 + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +(ii) In the event that the JDRC does not approve the Joint Clinical Study Proposal (or a substantially similar proposal) within sixty (60) days after such Joint Clinical Study Proposal has been submitted to the JDRC, the each Party shall be free to carry out at its own expense the relevant Clinical Study(ies) described in such Joint Clinical Study Proposal independently, subject to the terms of Sections 2.1 and 4.4(c). + +(b) Joint Development Plans. Pursuant to Section 4.4(a), the Working Group designated by JDRC shall in good faith discuss and prepare the Joint Development Plan covering Approved Clinical Study(ies) for review by JDRC. + +(i) Once Joint Development Plan prepared by the Working Group is approved at JDRC, the Parties shall initiate the Approved Clinical Study(ies) in accordance with the Joint Development Plan. + +(ii) In the event that the JDRC is unable to agree upon a Joint Development Plan for such Approved Clinical Study within sixty (60) days after the applicable Joint Study Proposal has been approved by the JDRC, each Party shall be free to carry out such Approved Clinical Study(ies) at its own expense independently upon notice to the other Party, and subject to the terms of Sections 2.1 and 4.4(c). + +(iii) The JDRC shall review the Joint Development Plan on an ongoing basis from time-to-time as needed. The JDRC may make adjustments to the then-current Joint Development Plan from time-to-time as it deems appropriate. + +(c) Consequences of Rejection of Joint Clinical Study Proposals or Joint Development Plan. + +(i) In case of the rejection of a Joint Clinical Proposal by the JDRC pursuant to Section 4.4(a)(ii) or the inability of the Parties to agree upon a Joint Development Plan for an Approved Clinical Study as described in Section 4.4(b)(ii), each Party may, upon notice to the other Party, conduct the relevant Clinical Study described in the Joint Clinical Study Proposal (hereinafter the "Declined Clinical Study") at its own expense, subject to Section 2.1 above; provided, however, that: + +(A) any Declined Clinical Study conducted by Ono (or its Affiliates or Sublicensees) shall be conducted solely within the Ono Territory; + +(B) each Party, should it elect to conduct any Declined Clinical Study on its own shall keep the JDRC and the other Party informed as to the design of any such Declined Clinical Study(ies) to be conducted by or under its authority; + +(C) any Declined Clinical Study conducted by Array or PFM shall be permitted to include clinical sites within the Ono Territory to the extent consistent with the requirements of Section 4.5; + +28 + + + + + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +(D) if the Party that is not conducting a Declined Clinical Study (the "Non-Performing Party") determines reasonably and in good faith that the Declined Clinical Study is reasonably likely to adversely affect the Development or Commercialization of the Products in the Field, then the Party performing such Declined Clinical Study (the "Performing Party") shall not undertake such Declined Clinical Study unless and until the JDRC determines that such Declined Clinical Study should be permitted; and + +(E) The Performing Party shall provide formal written reports of the results of the Declined Clinical Study and the costs of such Declined Clinical to the Non-Performing Party when such written reports are available, and the JDRC during meetings of the JDRC, upon request of the other Party but not more than twice a year during the period in which any study within the Declined Clinical Study is being performed. For clarity, Section 18.11 shall apply with respect to Declined Clinical Studies undertaken by either Party in accordance with this Section 4.4(c). + +(ii) Costs of Declined Clinical Studies and Use of related Data. The Performing Party shall bear all costs associated with Declined Clinical Studies it undertakes. If Ono (or an Ono Affiliate or Sublicensee) submits to a Regulatory Authority in Ono Territory Data generated by Array (including its Affiliates) or a Third Party Partner pursuant to a Declined Clinical Study (either directly or by reference under Section 4.8 below) for purposes of obtaining new or expanded Marketing Approval for the Product for the same Indication that was the subject of study in such Declined Clinical Study, Ono shall reimburse Array an amount equal to [ * ] of the costs incurred by Array (including by its Affiliates) and/or such Third Party Partner for the Declined Clinical Study. If Array (including its Affiliates) and/or PFM submits to a Regulatory Authority in the Array Territory Data generated by Ono pursuant to a Declined Clinical Study (either directly or by reference under Section 4.8 below) for purposes of obtaining new or expanded Marketing Approval for the Product for the same Indication that was the subject of study in such Declined Clinical Study, Array shall reimburse Ono an amount equal to [ * ] of the costs incurred by Ono (including by its Affiliates) for the Declined Clinical Study. Notwithstanding the foregoing, in the event that Ono is the Non-Performing Party and the PMDA (or MHLW), based on the fact that the Declined Clinical Study utilized clinical sites in Japan, compels Ono to file for a new or expanded Marketing Approval for the Product based on the Data generated by Array pursuant to a Declined Clinical Study, then the foregoing obligation to reimburse Array [ * ] of the costs of the Declined Clinical Study shall be waived. + +(d) Except for Investigator Sponsored Clinical Studies included in the Existing Clinical Studies, neither Party shall authorize or support an Investigator Sponsored Clinical Study or any Post-Approval Marketing Clinical Study in the other Party's territory without obtaining prior written consent. + +(e) Development Efforts; Manner of Performance; Reports. + +29 + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +(i) Development Efforts. Each of Array and Ono shall use Diligent Efforts to execute and to perform, or cause to be performed, the activities assigned to it in the Joint Development Plan(s), and to cooperate with the other in carrying out the Joint Development Plan(s), in accordance with the timetables therein. Each Party and its Affiliates shall conduct its Development activities in good scientific manner and in compliance with applicable Law, including Laws regarding environmental, safety and industrial hygiene, Good Manufacturing Practice, Good Laboratory Practice and Good Clinical Practice, current standards for pharmacovigilance practice, and all applicable requirements relating to the protection of human subjects. Before commencement of each Clinical Study pursuant to a Joint Development Plan, the JDRC shall define the common database format to be used, the owner of such database, the access of the other Party to the database, and the relevant clinical information to be contained within. This will be done in a manner designed to address both FDA and PMDA requirements. + +(ii) Day-to-Day Responsibility. Each Party shall be responsible for day-to-day implementation of the Development activities for which it (or its Affiliate) has or otherwise is assigned responsibility under this Agreement or the Joint Development Plan(s) and shall keep the other Party reasonably informed as to the progress of such activities, as determined by the JDRC. + +(iii) Development Reports. At each meeting of the JDRC, each Party shall report on the Development activities such Party, its Affiliates, Sublicensees and Third Party Partners (subject in the case of Third Party Partners, to confidentiality obligations Array owe to such Third Party Partners) has performed or caused to be performed under all ongoing Approved Clinical Studies since the last meeting of the JDRC, evaluate the work performed in relation to the goals of the applicable Joint Development Plans and provide such other information as may be reasonably requested by the JDRC with respect to such Development activities. If a Party fails to adequately provide such report at a meeting of the JDRC, the other Party may request, and such Party shall provide to such other Party, a written progress report that includes information regarding accrual, site initiation, progress on protocol writing, meeting requests and briefing documents, in the case of clinical or regulatory activities, and in other cases such information as is reasonably necessary to convey a reasonably comprehensive understanding of the status of the applicable Development activity. + +(f) Ownership of INDs for Approved Clinical Studies. Ownership of all INDs and other related regulatory filings filed in connection with each Approved Clinical Study shall be specified in the Joint Development Plan for such Approved Clinical Study, provided that in the absence of any agreement to the contrary in the Joint Development Plan, Ono shall be the owner of all INDs and other related regulatory filings filed in connection with each Approved Clinical Study in the Ono Territory and Array shall be the owner of all INDs and other related regulatory filings filed in connection with each Approved Clinical Study in the Array Territory. + +30 + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +4.5 Right to Conduct Clinical Studies in Other Party's Territory. + +(a) Generally. Neither Party shall conduct Clinical Studies in the other Party's Territory without the prior written approval of the other Party, except that Array shall be entitled to conduct Declined Clinical Studies utilizing sites within the Ono Territory without obtaining Ono's consent (but prior notification is required), subject to the following: + +(i) Array shall not conduct Clinical Studies for a Product in the Ono Territory with respect to an Indication for which such Product has received Marketing Approval in the Ono Territory if Ono reasonably believes that the conduct of such Clinical Studies is likely to materially adversely affect the commercial value of such Product. In the event of a dispute between the Parties as to whether Ono's belief regarding the harm to its market is reasonable, the Parties shall promptly resolve such matter in accordance with the provisions of Section 17.2 below; provided that Array shall not conduct such Clinical Studies in the Ono Territory unless and until such matter is resolved in favor of such Clinical Studies proceeding. + +(ii) Prior to commencing a Clinical Study in countries of the Ono Territory, Array shall inform and coordinate with Ono regarding the conduct of such Clinical Study. In the event that Array proceeds with a Clinical Study in the Ono Territory without Ono's participation, then the Parties shall enter into a pharmacovigilance agreement pursuant to which Array shall provide Ono with the safety data. + +(b) Combination Studies with [ * ] in the Ono Territory. Without limiting the limitations described in Section 4.5(a), Array further agrees as follows: + +(i) Array shall not sponsor any Clinical Studies of Binimetinib and/or Encorafenib in combination with a [ * ] ("Combination Studies") where the such Clinical Studies are conducted solely for purposes of obtaining Marketing Approval of the studied [ * ] in combination with Binimetinib and/or Encorafenib in the Ono Territory ("Local Studies"); and + +(ii) Array shall not supply Binimetinib, Encorafenib or Products to any Third Party for use in the conduct of Local Studies; and + +(iii) Array shall not include clinical sites in the Ono Territory in any Combination Study, including but not limited to Phase1/2 studies, sponsored by Array that is intended to support Marketing Approval of the studied [ * ] in combination with Binimetinib and/or Encorafenib in the United States or Europe ("Global Studies"), unless Ono has previously declined a Joint Clinical Study Proposal to conduct a Global Registration Study in the same patient population for a [ * ], Binimetinib and/or Encorafenib combination. For the avoidance of doubt, Array shall make [ * ], Binimetinib and/or + +31 + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +Encorafenib combination the highest priority in case Array intends to sponsor any Clinical Study of Binimetinib and/or Encorafenib in combination with a [ * ] in the Ono Territory. + +For clarity, it is understood and agreed that (w) nothing in this Section 4.5 shall prevent Array from supplying Third Parties with Binimetinib, Encorafenib or Products for use by such Third Party in Combination Studies so long as such Combination Studies are not Local Studies, (x) in the event Array determines to supply any Third Party with Binimetinib, Encorafenib or Products for use by such Third Party in any global Combination Studies sponsored by such Third Party that includes the Ono Territory, Array shall notify Ono of such supply of Binimetinib, Encorafenib or Products to such Third party promptly following Array's decision to supply such Third Party, (y) Array shall have no obligation to prevent Third Parties from acquiring Product on the open market for use in conducting Local Studies, and (z) the restrictions in this Section 4.5(b) shall not apply to PFM, and shall immediately terminate upon a Change in Control of Array; provided however that, any Combination Study shall be conducted subject to appropriate firewall procedures as described in Section 18.10 to segregate such activities (and the personnel conducting such activities) from the activities performed by or on behalf of Array pursuant to this Agreement, to ensure that [ * ] is used in connection with such Combination Study in case of Change in Control of Array. + +(c) Ono acknowledges that under the PFM Agreement, PFM has a right under certain circumstances to conduct Clinical Studies in the Ono Territory. Without limiting PFM's rights under the PFM Agreement, Array agrees that in the event that PFM submits an Additional Development Proposal (as defined in the PFM Agreement) that would utilize clinical sites in the Ono Territory, Array shall submit such proposal to the JDRC as a Joint Clinical Study Proposal under Section 4.4(a) and provide Ono the opportunity to include the Clinical Study described in such Additional Development Proposal as an Approved Clinical Study under this Agreement. + +4.6 Regulatory Submissions and Marketing Approvals. + +(a) Regulatory Responsibilities. Ono or its Affiliates shall be responsible for seeking and attempting to obtain all Marketing Approvals for the Products in the Field in the Ono Territory, and Array or its Affiliate or licensees shall be responsible for seeking and attempting to obtain all Marketing Approvals for the Products in the Field in the Array Territory. + +(b) INDs. Except for any INDs filed by Array in the Ono Territory (i) with respect to an Approved Clinical Study for which the Parties agree in the applicable Joint Development Plan that the applicable Regulatory Filing will be owned by Array, and/or (ii) with respect to Clinical Studies conducted by Array in one or more countries of the Ono Territory pursuant to Section 4.5 above, which Regulatory Filings, the "Array Regulatory Filings", shall be owned by Array, Ono shall be responsible, at its expense, for filing, obtaining and maintaining, and shall own, all INDs for the Product in the Ono Territory. + +32 + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +(c) Ownership of Marketing Approvals. Ono or an Ono Affiliate shall own and maintain Marketing Approvals for the Products in the Field in the Ono Territory including all regulatory submissions and applications, provided that Ono may assign Marketing Approvals for the Product to its Affiliates or permitted Sublicensees to the extent that such Affiliates or permitted Sublicensees have been delegated primary responsibility for the commercialization of the Product in such countries. As between the Parties, Array or an Array Affiliate shall own all regulatory submissions, including all applications, for Marketing Approvals for the Products in the Field in the Array Territory. + +(d) Regulatory Cooperation. Except with respect to (i) the Existing Clinical Studies, (ii) any Approved Clinical Studies for which Array is the owner of the IND in a given country in the Ono Territory, and/or (iii) with respect to Clinical Studies conducted by Array in one or more countries of the Ono Territory pursuant to Section 4.5 above, Ono shall be responsible for liaising with and managing all interactions with Regulatory Authorities in the Ono Territory, including with respect to all Regulatory Filings for the Product in the Ono Territory (other than the Array Regulatory Filings) and Array shall cooperate with Ono in such regulatory interactions (e.g. Ono's correspondence to matters of inquiry from Regulatory Authorities) in a timely manner. Array shall be entitled to participate in such interactions as provided in this Section 4.6(d) subject to receipt of any required permissions of such Regulatory Authorities in the Ono Territory. Ono shall be entitled to participate in interactions with Regulatory Authorities in Korea with respect to the Existing Clinical Studies as provided in this Section 4.6(d) subject to receipt of any required permissions of such Regulatory Authorities in Korea. Ono shall also be entitled to attend selected material meetings with the FDA as an observer. + +(i) To the extent relating to a Product within the Ono Territory or activities under this Agreement, Ono shall provide Array with: + +(A) reasonable advanced notice of substantive meetings (or telephone or similar substantive interactions) that are either scheduled or initiated by or under the authority of Ono with a Regulatory Authority in the Ono Territory and immediate notice of any unscheduled substantive interactions that are initiated by such a Regulatory Authority (including, the PMDA or MHLW or any committee to whom the PMDA or MHLW have delegated activities relating to the review or approval of MAAs filed with the PMDA) other than meetings or interactions with any such Regulatory Authority pertaining to Pricing and Reimbursement Approval of the Product in the applicable country, and advance copies of all related documents and other relevant information relating to such meetings or other contact except where the provision of advance copies is not possible as in the case of unscheduled substantive interactions that are initiated by a Regulatory Authority. + +(B) an opportunity to have up to two (2) representatives attend all substantive meetings and interactions with Regulatory Authorities in the Ono Territory, subject to receipt of any required permissions of such Regulatory Authorities in the Ono Territory, and if requested by Ono or required + +33 + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +under applicable Law, to actively participate in, all substantive meetings and interactions with any Regulatory Authority in the Ono Territory; provided that Ono shall not be required to delay the occurrence of any substantive meetings or interactions with any such Regulatory Authority to the extent that Array representatives are not available to attend such substantive meetings or interactions on the date and time the same are scheduled to occur; and in any case, Ono shall keep Array informed as to all material interactions with Regulatory Authorities within the Ono Territory; and + +(C) a copy of any material documents, information and correspondence that Ono (or its designee) proposes to submit to a Regulatory Authority in the Ono Territory relating to Regulatory Filings for the Product reasonably in advance of the date on which such documents, information and/or correspondence are proposed to be submitted, together with English translations thereof, if such translations exist. Array shall have the right to consult with, and provide comments to, Ono in connection with (1) any substantive meetings and/or interactions with Regulatory Authorities in the Ono Territory and (2) any material documents, information and correspondence that Ono (or its designee) proposes to submit to any Regulatory Authority in the Ono Territory; and Ono shall consider in good faith all reasonable comments provided by Array with respect to such meetings, interactions, documents, information and/or correspondence. Without limiting the foregoing, Ono shall provide to Array copies of the proposed labeling for the Product in the local language to be filed in the Ono Territory. Additionally, Ono shall provide Array with (1) a copy of the MAA in electronic format provided that in cases where the MAA was not filed electronically, Ono will provide the electronic files used to generate such submission, and (2) copies of the final labeling for the Product in the local language in all countries in the Ono Territory in which Ono obtains Marketing Approvals. Array shall provide to Ono copies of the proposed labeling for the Product in the local language to be filed by Array in USA and by PFM in France, Germany, Italy, Spain and the United Kingdom. Additionally, (1) Array shall provide Ono with a copy of the MAA filed by Array with the FDA and a copy of the MAA filed by PFM with the EMA, in each case in electronic format, provided that in cases where the MAA was not filed electronically, Array will provide the electronic files used to generate such submission, and (2) Array shall provide to Ono copies of the final labeling for the Product in the local language in all countries in the Array Territory in which Array and Array's Third Party Partners obtains Marketing Approvals. + +(ii) The Parties shall cooperate in good faith with respect to Regulatory Authority inspections of any site or facility where Clinical Studies, manufacturing or pharmacovigilance activities with respect to the Product are conducted by or on behalf Ono pursuant to this Agreement, whether such site or facility is Ono's or its Affiliate's or Subcontractor's (each an "Audited Site"). Array shall be given a reasonable opportunity (taking into account the timing and notice provided by the applicable Regulatory Authority) to assist in the preparation of the Audited Sites for inspection, where appropriate, and to attend any inspection by any Regulatory Authority of the Audited Sites, and the summary, or wrap-up, meeting with a Regulatory Authority at the conclusion of such inspection subject to any required + +34 + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +permission of such Regulatory Authorities. If such attendance would result in the disclosure to Array of Confidential Information unrelated to the subject matter of this Agreement, upon Ono's request the Parties shall enter into a reasonable and customary confidentiality agreement with respect to such unrelated subject matter. Ono shall use Diligent Efforts to secure for the other Party the rights set forth in this Section 4.6(d)(ii) from its Subcontractors. In the event that Ono is unable to secure such inspection rights from any of its Subcontractors, Ono agrees to secure such rights for itself and, if requested by Array, shall exercise such rights, at its own expense, on behalf of Array and fully report the results thereof to Array. In the event that any Audited Site is found to be non-compliant with one or more Good Laboratory Practice, Good Clinical Practice, Good Manufacturing Practice or current standards for pharmacovigilance practice, Ono shall submit to Array a proposed recovery plan or Corrective and Preventative Actions ("CAPA") within a reasonable period after Ono, its Affiliate or its Subcontractor receives notification of such non- compliance from the relevant Regulatory Authority and Ono shall use Diligent Efforts to implement such recovery plan or CAPA promptly after submission. + +(iii) Ono shall propose to the JDRC, and the JDRC shall review and approve or reject on the overall strategy of all material Regulatory Filings with applicable Regulatory Authorities in the Ono Territory through JDRC (other than any such Regulatory Filings pertaining to Pricing and Reimbursement Approval of the Product in the Ono Territory) prior to their submission or filing by or under the authority of Ono. Ono shall have the sole right to negotiate with, and obtain from, the applicable Regulatory Authorities a reimbursement drug price of the Products within the Ono Territory. [ * ] + +(iv) Each Party shall promptly provide the other Party with copies of all material documents, information and correspondence received from a Regulatory Authority within the Ono Territory as well as Array Territory directed to the Development of the Product for Commercialization within the Ono Territory (including a written summary in English of any material communications in which such other Party did not participate) and, upon reasonable request, with copies of any other documents, reports and communications from or to any Regulatory Authority within the Ono Territory directed to the Product or activities under the Agreement. + +(v) Notices, copies of submissions and correspondence, and other materials to be given in advance as provided in this Section 4.6(d) shall be provided in any event not less than a reasonable time in advance. + +4.7 Exchange of Data and Know-How. + +(a) By Array. Array or its Affiliates will make available to Ono, all additional (i.e., beyond that already made available to Ono as of the Effective Date) Array Know-How relating to Binimetinib, Encorafenib and the Products containing Binimetinib or Encorafenib currently under Development by Array that exists as of the Effective Date as may be reasonably requested + +35 + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +by Ono, in each case that is reasonably available to Array and is necessary or materially useful for Ono to Develop, Manufacture and/or Commercialize the Product(s) in accordance with this Agreement, including all Data from the Existing Clinical Studies and any other Clinical Studies and pre-Clinical Studies for the Product that have been conducted by or on behalf of Array prior to the Effective Date. Array shall make any such Data available in the original language in which such Data was generated. + +(b) By Either Party. During the term of this Agreement, Array shall provide to Ono all Array Know-How, and Ono shall provide to Array all Ono Know-How, that is generated during the term of this Agreement and that has not previously been provided hereunder, in each case promptly upon request by the other Party. The Party providing such Party's know-how shall provide the same in electronic form to the extent the same exists in electronic form, and shall provide copies or an opportunity to inspect (and copy) for all other materials comprising such know-how (including, for example, original patient report forms and other original source data). Any Data provided by one Party to the other under this Subsection 4.7(b) shall be provided in the original language in which such Data was generated, provided that, with respect to Data relating to any Joint Development Plan, if such original language is not English, then the Party supplying such Data shall also provide English translations thereof and the expense for such English translations shall be borne by the receiving Party. The Parties will cooperate and reasonably agree upon formats and procedures to facilitate the orderly and efficient exchange of the Array Know-How and the Ono Know-How in accordance with the last sentence of Section 4.7(b). + +4.8 Rights of Reference and Access to Data. Subject to Section 2.4 and 4.7, each Party shall have the right to cross- reference the other Party's Regulatory Filings (and in the case of Ono, Array's Third Party Partners' Regulatory Filings) related to the Products, and to access such Regulatory Filings and any Data therein and use such Data in connection with the performance of its obligations and exercise of its rights under this Agreement, including inclusion of such Data in its own Regulatory Filings for Product; provided, however, that with respect to Data obtained from Declined Clinical Studies conducted at the Performing Party's expense in accordance with Section 4.4(c), the Non-Performing Party's right to cross-reference, or to include such Data in its Regulatory Filings for Product, shall be subject to compliance with the corresponding reimbursement obligation set forth in Section 4.4(c)(ii). Each Party hereby grants to the other Party, its Affiliates and Sublicensees (or in the case of Array, its other licensees) a "Right of Reference," as that term is defined in 21 C.F.R. § 314.3(b) in the United States, or an equivalent right of access/reference in any other country or region, to any Data, including such Party's or its Affiliate's clinical dossiers, Controlled by such Party or such Affiliate that relates to the Product for use by the other Party to Develop and Commercialize the Product in the Field pursuant to this Agreement, subject to Section 4.4(c)(ii) above. Each Party or such Affiliate shall provide a signed statement to this effect, if requested by the other Party, in accordance with 21 C.F.R. § 314.50(g)(3) or the equivalent as required in any country or region or otherwise provide + +36 + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +appropriate notification of such right of the other Party to the applicable Regulatory Authority. Each Party will provide, and cause its Affiliates to provide, cooperation to the other Party to effect the foregoing. + +4.9 Inspection Right. + +(a) Ono shall, and shall require its Affiliates to, permit Array, and/or an authorized representative reasonably acceptable to Ono, to enter the relevant facilities of Ono and its Affiliates during normal business hours and upon reasonable advance notice to inspect and verify compliance with applicable regulatory and other requirements, as well as with this Agreement, with respect to all matters relating to the Product, all Ono Know-How to be provided to Array pursuant to Section 4.7 and the activities generating such Ono Know-How. Such inspection right shall include the right to examine any internal procedures or records of Ono and/or its Affiliates relating to the Product. Ono and its Affiliates shall give Array or its authorized representative, all necessary and reasonable assistance for a full and correct carrying out of the inspection. Such inspection shall not relieve Ono of any of its obligations under this Agreement. + +(b) Ono shall use Diligent Efforts to secure for Array the rights set forth in Section 4.9(a) from Ono's Sublicensees and other contractors for the Product. In the event Ono is unable to secure such inspection rights from any of its Sublicensees or contractors, Ono agrees to secure such rights for itself and, if requested by Array, Ono shall exercise such rights, at Array's expense, on behalf of Array and fully report the results thereof to Array. + +4.10 Patient Samples. To the extent permitted by applicable Laws, each Party shall own or control any patient samples (together with compilations of Data comprising annotations, or correlating outcomes, with respect to such samples, "Patient Samples") collected and retained in connection with Clinical Studies of which it is the sponsor. + +4.11 Reporting; Adverse Drug Reactions. + +(a) Array shall hold and maintain the global safety database with respect to the Products. Array shall be responsible for core safety management of the Product, as provided in a pharmacovigilance agreement executed by the Parties pursuant to section 4.11(b), within and outside the Ono Territory; and Ono shall cooperate with and assist Array, as requested and/or as provided in the pharmacovigilance agreement executed by the Parties, to enable Array to meet its regulatory reporting requirements with respect to the core safety management for the Product within and outside the Ono Territory. Ono shall be responsible for all other pharmacovigilance activities associated with the Product in the Ono Territory, including filing all reports required to be filed in order to maintain any IND for the Product filed by or under the authority of Ono as the sponsor, and/or any Marketing Approvals granted for the Product, in the + +37 + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +Ono Territory (including reporting of adverse drug experiences, product quality complaints and safety data relating to the Product in the Ono Territory). Each Party shall promptly notify the other Party with respect to any material changes or material issues that may arise in connection with any IND for the Product filed by or under the authority of such Party as the sponsor, and/or any Marketing Approvals for the Product, in any country within such Party's territory. + +(b) The Parties shall enter into pharmacovigilance agreements on reasonable and customary terms no less stringent than those required by applicable ICH Guidelines, including: (i) providing detailed procedures regarding the responsibilities for the creation and maintenance of core safety information (e.g.,: Core Data Sheet, Risk Management Plan, Local Product Safety Labeling, Development and Product Safety Updates); (ii) the exchange of safety data relating to the Product within and outside the Ono Territory within appropriate time frames and in an appropriate format to enable each Party to meet its expedited and periodic regulatory reporting requirements; and (iii) ensuring compliance with the reporting requirements of all applicable Regulatory Authorities on a worldwide basis for the reporting of safety data in accordance with all applicable legal and regulatory requirements regarding the management of safety data. Promptly following the Effective Date but no later than sixty (60) days before Ono's IND filing for the first Clinical Study in the Ono Territory, the Parties shall enter into such a pharmacovigilance agreement, which shall be applicable to such pre-marketing safety information that will be available from Clinical Studies. As soon as practicable following the Effective Date, the Parties shall initiate negotiation of a post-marketing safety data exchange agreement, and shall enter into such agreement no later than sixty (60) days before approval of such MAA by Regulatory Authority (or as otherwise agreed by the Parties), which shall be applicable to such post-marketing safety information that will be available from post-marketing experiences with the Product. + +ARTICLE V COMMERCIALIZATION AND PROMOTION + +5.1 Ono Commercialization. + +(a) Ono's Responsibility. Except as provided below, Ono shall be responsible for, and shall control the conduct of, the Commercialization of the Products in the Ono Territory, at its expense, in accordance with Section 8.1. + +(b) Commercialization Plan. + +(i) No later than one hundred eighty (180) days prior to the anticipated filing of the first MAA in the Ono Territory, Ono shall provide Array with the plan for Commercialization of the Product in the Ono Territory ("Commercialization Plan") through JCC. Further, Array shall also provide Ono with Array's plan for commercialization of the Product in USA and, to the extent it is able to do so + +38 + + + + + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +without violating its contractual obligations to PFM, PFM's plan for commercialization of the Product in France, Germany, Italy, Spain and the United Kingdom, in each case through JCC, in order for Ono to maximize its commercial activities conducted in the Ono Territory. + +(ii) Ono shall provide to the JCC an updated version of the Commercialization Plan for its review during the JCC meeting; and such updated Commercialization Plan shall include an equivalent level of detail regarding Ono's Commercialization activities for the Products as the level of detail included in the Commercialization Plan. Further, Array shall also provide to the JCC an updated version of the commercialization plan for the USA and, to the extent it is able to do so without violating its contractual obligations to PFM, an updated version of PFM's plan for commercialization of the Product in France, Germany, Italy, Spain and the United Kingdom for their review during the JCC meeting to be provided pursuant to Section 5.1(b)(i). + +(iii) Ono shall use Diligent Efforts to carry out, and to cause its Affiliates and Sublicensees to carry out, all Commercialization of the Products in the Ono Territory in accordance with the then-current Commercialization Plan and the provisions of this Agreement. + +(c) Marketing Materials. Marketing, advertising and promotional materials ("Marketing Materials") concerning the Products for use in the Ono Territory, as well as training manuals and education and communication materials ("Educational Materials") for sales representatives in the Ono Territory shall be developed and prepared by Ono, at its own expense. Array shall provide reasonable assistance to Ono in connection with the foregoing, including supplying to Ono representative forms of Marketing Materials, training manuals and Educational Materials for the Product used by Array in the United States, France, Germany, Italy, Spain and the United Kingdom, which Ono, its Affiliates and Sublicensees may adapt for use in the Ono Territory. Any Marketing Materials, training manuals and/or Educational Materials developed and used by Ono, its Affiliates and Sublicensees for the Product in the Ono Territory shall be consistent with the Marketing Approval in the applicable country and with the reasonable trademark guidelines for use of the Binimetinib Product Trademark and Encorafenib Product Trademark agreed upon by the JCC, and shall comply with all applicable Laws, rules and regulations. Ono shall keep Array reasonably informed with respect to Marketing Materials and Educational Materials used in the in the Ono Territory and shall provide to Array copies (in electronic form) of any Marketing Materials and/or Educational Materials to be used in the Ono Territory for the Product developed by Ono (and/or any of its Affiliates or Sublicensees) and any material changes to any such Marketing Materials and/or Educational Materials. + +ARTICLE VI PAYMENTS + +39 + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +6.1 Upfront Fee. Ono shall pay to Array a license fee equal to Three Billion Five Hundred Million Japanese Yen (¥3,500,000,000), on or before the date that is ten (10) Business Days after the receipt by Ono of invoice for such license fee and the taxation documents expressly described in Section 7.3. This license fee set forth in this Section 6.1 shall not be refundable or creditable against any future milestone payments, royalties or other payments by Ono to Array under this Agreement. + +6.2 Milestone Payments. + +(a) BEACON Milestone Payments. Ono shall pay to Array the milestone payments set out below following the first achievement by Array of the corresponding milestone events set out below with respect to the Product, in accordance with this Section 6.2(a) and the payment provisions in Article 7: + +Milestone Event Milestone Payment + +1. [ * ] ¥[ * ] + +2. [ * ] ¥[ * ] + +3. [ * ] ¥[ * ] + +4. [ * ] ¥[ * ] + +With respect to the milestones set forth in this Section 6.2(a), the total amount of such milestones to be paid by Ono to Array shall not exceed [ * ]. + +(b) Regulatory and Sales Milestone Payments. In addition, Ono shall pay to Array the milestone payments set out below following the first achievement by Ono, and/or any of its Affiliates or Sublicensees, of the corresponding milestone events set out below with respect to the Product, in accordance with this Section 6.2(b) and the payment provisions in Article 7: + +40 + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +Milestone Event Milestone Payment + +Regulatory Milestone Event + +1. [ * ] ¥[ * ] + +2. [ * ] ¥[ * ] + +3. [ * ] ¥[ * ] + +4. [ * ] ¥[ * ] + +5. [ * ] ¥[ * ] + +6. [ * ] ¥[ * ] + +7. [ * ] ¥[ * ] + +8. [ * ] ¥[ * ] + +Sales Milestone Event + +1. [ * ] ¥[ * ] + +2. [ * ] ¥[ * ] + +3. [ * ] ¥[ * ] + +4. [ * ] ¥[ * ] + +5. [ * ] ¥[ * ] + +With respect to the milestones set forth in this Section 6.2 (b), the total amount of such milestones to be paid by Ono to Array shall not exceed [ * ]. + +(c) Certain Definitions. For purposes of Section 6.2(b) above: + +(i) "Binimetinib Product" shall mean a Product containing Binimetinib as an active pharmaceutical ingredient; + +(ii) "Encorafenib Product" shall mean a Product containing Encorafenib as an active pharmaceutical ingredient; and + +(iii) [ * ] + +(d) Reports and Payments. Array shall notify Ono in writing within fifteen (15) Business Days after the achievement of each milestone set out in Section 6.2(a) by Array. Then, the corresponding milestone payment shall be due within thirty (30) days of receipt by Ono of an invoice for payment and the taxation documents delivered from Array. Ono shall notify Array in writing within fifteen (15) Business Days after the achievement of each milestone set out in Section 6.2(b) by Ono, or any of its Affiliates + + + + + +or Sublicensees. Then, the corresponding milestone payment shall be due within thirty (30) days of receipt by Ono of an invoice and the taxation documents delivered from Array. Any milestone payable by Ono pursuant to this Section 6.2 shall be made only once with respect to the achievement of each milestone set out in Section 6.2(a) and Section + +41 + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +6.2(b) above, regardless of subsequent or repeated achievement of such milestone event by any Product. + +6.3 Earned Royalties For Products. During the term of this Agreement, Ono shall pay to Array, on a quarterly basis, a royalty on the Net Sales of Products by Ono, its Affiliates or Sublicensees. Such royalty shall be paid quarterly, at the applicable rates set forth in Section 6.3 below, based on the Annual Net Sales of all Products, subject to the adjustments set forth in Sections 6.4 to 6.7 (the "Royalty Payments"). + +(a) General. + +(i) Subject to the other provisions of Sections 6.4 to 6.7, the applicable royalty rate shall be as follows: + +Annual Net Sales in a Given Fiscal Year Royalty Rate + +With respect to the portion of Annual Net Sales lower than or equal to [ * ] [ * ] + +With respect to the portion of Annual Net Sales greater than [ * ] [ * ] + +(ii) Notwithstanding Section 6.3(a)(i) and subject to the other provisions of Sections 6.4 to 6.7, the royalty rate applicable to an Annual Net Sale of a Product in a country during the Secondary Royalty Term shall be equal to [ * ] of the otherwise applicable royalty rate under 6.3(a)(i). + +(b) For purposes of determining the royalty rate(s) pursuant to Section 6.3 that is or are applicable hereunder on the Net Sales of Products and for determining Net Sales for the Commercial Milestones, all Annual Net Sales of all Products in all countries of the Ono Territory shall be aggregated on a Fiscal Year basis and the applicable royalty rate shall be determined. + +(c) For purposes of determining the royalty rate applicable under Section 6.3(a)(i) and 6.3(a)(ii), the Annual Net Sales of Products for which the royalty rate is subject to adjustment under Sections 6.4 below (Reduction for Generic Competition) and of Products not subject to such adjustment shall be allocated proportionately to the two Annual Net Sales levels (i.e., to the first [ * ], and amounts over [ * ]). Such allocation shall initially be made on a quarterly basis for each calendar quarter, but shall be reconciled in the royalty report under Section 6.3(d) below for the fourth quarter of each Fiscal Year, based on total Annual Net Sales for the full Fiscal Year. If as a result of such reconciliation, Ono has underpaid Array for the full Fiscal Year, the shortfall shall be due with such final royalty payment for such Fiscal Year. If as + +42 + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +a result of such reconciliation, Ono has overpaid Array for the full Fiscal Year, Ono shall be entitled to credit such overpaid amounts against future royalties due hereunder, provided that Array shall remit any such overpaid amounts that remain uncredited as of the termination of this Agreement within fifteen (15) days after such termination takes effect. + +(d) Royalty Reports. Within forty five (45) days after the end of each calendar quarter, commencing with the calendar quarter in which the First Commercial Sale occurs, Ono shall deliver to Array a report (each, a "Royalty Report") setting out all details necessary to calculate the payments due under this Section 6.3, including: + +(i) gross sales of the Product in the Ono Territory in the relevant calendar quarter on a country-by-country basis; + +(ii) Net Sales in the relevant calendar quarter on a country-by-country basis; + +(iii) all relevant exchange rate conversions in accordance with Section 7.2; + +(iv) all deductions in total in accordance with Sections 1.48 and 6.5; and + +(v) the amount of any payment due from Ono to Array, calculated in accordance with this Article 6. + +Simultaneously with the delivery of each such report, Ono shall pay to Array the total amounts due under Section 6.3 for the period covered by such report subject to Ono's receipt of taxation documents. + +6.4 Reduction for Generic Competition. + +(a) Initial Royalty Term. During the Initial Royalty Term for a Product in a particular country of the Ono Territory, the royalty rate applicable to such Product in such country under Section 6.3(a) (i) above is subject to reduction in certain events, based on the level of competition from Generic Versions of such Product in such country as follows. During the Initial Royalty Term for a Product in a country: + +(i) If Generic Market Share with respect to such Product in such country equals or exceeds [ * ], then for so long as such Generic Market Share with respect to such Product equals or exceeds [ * ] in such country, the royalty rate under Section 6.3(a) (i) applicable to the Annual Net Sales of such Product in such country shall be adjusted to [ * ]. + +(i) It is understood that the adjustment in this Section 6.4(a) shall apply to a particular Product in a particular country only during the Initial Royalty Term for such Product in + +43 + + + + + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +such country. After such Initial Royalty Term, any adjustment based on Generic Market Share of Generic Versions of such Product in such country will be governed by Section 6.4(b) below, if applicable. + +(a) Secondary Royalty Term. During the Secondary Royalty Term for a Product in a country: + +(i) If Generic Market Share with respect to such Product in such country equals or exceeds [ * ], but is less than [ * ], then the royalty rate under Section 6.3(a) (ii) applicable to the Annual Net Sales of such Product in such country shall be [ * ]. + +(ii) If Generic Market Share with respect to such Product in such country equals or exceeds [ * ], then the royalty rate under Section 6.3(a) (ii) applicable to Annual Net Sales of such Product in such country shall be equal to [ * ]. + +(b) Certain Terms. For purposes of this Section 6.4: + +(i) "Generic Version" means a product that: (i) contains as an active pharmaceutical ingredient a chemical composition that is assigned the same INN (international nonproprietary name) or JAN (Japanese Accepted Names for Pharmaceuticals) as is assigned to active pharmaceutical ingredient contained in the corresponding Product being marketed in the Ono Territory; (ii) obtained Marketing Approval in a country in the Ono Territory by means of an abridged procedure that relies (A) in whole or in part on the safety and efficacy data contained in the MAA for such Product submitted by Ono in such country, and (B) on establishing bioequivalence to the Product; and (iii) is legally marketed in the Ono Territory by an entity other than Ono, its Affiliates or its Sublicensees without infringing any Valid Claim of an Array Patent. + +(ii) "Generic Market Share" means, with respect to a Product in a country, for any calendar month, the fraction B/(A+B), where: A is the quantity (e.g. the number of tablets) of the Products sold by Ono, its Affiliates and Sublicensees in such country in the Ono Territory in such calendar month and B is the total quantity of the Generic Versions sold in such country in the Ono Territory in such calendar month. Generic Versions sales shall be determined by a reputable Third Party data source generally accepted in the pharmaceutical industry in the relevant country and mutually agreed by the Parties). + +6.5 Third Party Licenses. If Ono or any of its Affiliates or Sublicensees (i) becomes obliged to pay any amount to a Third Party with respect to any Blocking Patent or otherwise determines in its good faith judgment with advice from independent legal counsel that it is necessary or advisable to obtain a license from any Third Party with respect to any Blocking Patent in order to make, have made, use, sell, offer for sale or import the Product for any given country of the Ono Territory, Ono may deduct up to [ * ] of any such Third Party payments from the Royalty Payment; provided that such deduction + +44 + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +shall not exceed in any calendar quarter [ * ] of the aggregate Royalty Payment otherwise payable in such calendar quarter, with any amounts in excess of the permitted deduction be carried forward to the subsequent calendar quarters until exhausted. As used herein, "Blocking Patent" shall mean a Patent owned or controlled by a Third Party that covers the Product in the applicable country. + +6.1 Third Party Payments. Array shall be solely responsible for all Third Party license payments, milestones and royalties owed with respect to the Product, on intellectual property that is owned or licensed by Array on or prior to the Effective Date, or any Blocking Patent of which Array was actually aware but did not disclose to Ono on or prior to the Effective Date. + +6.2 Aggregate Floor for Royalty Reductions. Royalty Floor. Notwithstanding Sections 6.4, 6.5, and 6.6, the Royalty Payment to Array shall not be reduced in any calendar quarter (a) during the Initial Royalty Term to less than [ * ] of the amount due under Section 6.3(a)(i), and (b) during the Secondary Royalty Term to less than [ * ] of the amount due under Section 6.3(a) (ii) (provided that any amounts in excess of the permitted deduction shall be carried forward to the subsequent calendar quarters until exhausted), unless 6.4(b) applies in which case royalty shall be as set forth therein. + +ARTICLE VII PAYMENTS; BOOKS AND RECORDS + +7.1 Payment Method. All payments under this Agreement shall be made by bank wire transfer in immediately available funds to an account designated by the Party to which such payments are due. Any payments or portions thereof due under this Agreement that are not paid by the date such payments are due under this Agreement shall bear interest at a rate equal Libor US Dollars one month with respect to payments in US Dollars, or the one month equivalent interbank offered rate with respect to payments in other currencies, plus in each case [ * ] per year, calculated on the number of days such payment is delinquent, compounded monthly and computed on the basis of a three hundred sixty five (365) day year. This Section 7.1 shall in no way limit any other remedies available to the Parties. + +7.2 Currency Conversion. All amounts specified in this Agreement are in Japanese Yen. All payments hereunder shall be made in US Dollars. All such payment shall be converted into US Dollars at the exchange rate (TTS rate) for the conversion of Japanese Yen into US Dollars posted by the Bank of Tokyo-Mitsubishi UFJ, Ltd. on the date on which Ono will make the applicable payment hereunder, provided that no deduction from any amount shall be made in respect of bank fees or charges. All such payments shall be paid by bank wire transfer in immediately available funds to bank account designated in writing by Array from time to time. The first designated bank account of Array shall be as follows: + +45 + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +Account name: [ * ] + +Reference: [ * ] + +Account number: [ * ] + +Bank name: [ * ] + +Address: [ * ] + +Swift code: [ * ] + + + +[ * ] + +If any currency conversion shall be required in connection with the payment of royalties or other amounts under this Agreement, such conversion shall be calculated using at the exchange rate for the conversion of foreign currency into Japanese Yen posted by the Bank of Tokyo-Mitsubishi UFJ. + +7.3 Taxes. + +(a) Withholding Taxes. If Laws or regulations require withholding by Ono of any taxes imposed upon Array on account of any royalties or other payments paid under this Agreement, such taxes shall be deducted by Ono as required by Law from such payment and shall be paid by Ono to the proper taxing authorities. Ono shall use Diligent Efforts to secure official receipts of payment of any withholding tax and shall send them to Array as evidence of such payment. Array shall provide to Ono any taxation documents (Form 3 and Form 17), and the Residency Certificate of Array issued by the US Internal Revenue Service (which Residency Certificate is effective for three (3) years after its issuance to a public company) that may be reasonably necessary in order for Ono not to withhold tax or to withhold tax at a reduced rate under an applicable bilateral income tax treaty. Without limiting the foregoing, the Parties shall exercise their reasonable efforts to ensure that any withholding taxes imposed are reduced as far as possible under the provisions of any applicable tax treaty, and shall cooperate in filing any forms required for such reduction. Each Party shall cooperate with the other and furnish the other Party with appropriate documents to secure application of the most favorable rate of withholding tax under applicable Law (or exemption from such withholding tax payments, as applicable). + +(b) Sales Taxes. Any sales taxes (including any consumption tax or value added tax), use tax, transfer taxes, duties or similar governmental charges required to be paid in connection with the transfer to a Party of a Product (including for clarity, Drug Substance or Drug Product) produced by or on behalf of the supplying Party pursuant to this Agreement shall be the sole responsibility of the receiving Party. In the event that the supplying Party is required to pay any + +46 + + + + + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +such amounts, the receiving Party shall promptly remit payment to the supplying Party of such amounts. + +7.4 Records; Inspection. Ono shall keep, and require its Affiliates and Sublicensees to keep, complete, true and accurate books of accounts and records for the purpose of determining the amounts payable to Array pursuant to this Agreement. Such books and records shall be kept for at least three (3) years following the end of the calendar quarter to which they pertain. Such records will be open for inspection during such three (3) year period by an independent certified public accounting firm of nationally (the US or Japan) recognized standing (the "Auditor"), chosen by Array and reasonably acceptable to Ono for the purpose of verifying the amounts payable by Ono hereunder. Such inspections may be made no more than once each Calendar Year, at reasonable times and on reasonable prior written notice. Such records for any particular calendar quarter shall be subject to no more than one inspection. The Auditor shall be obligated to execute a reasonable confidentiality agreement prior to commencing any such inspection. Inspections conducted under this Section 7.4 shall be at the expense of Array, unless a variation or error producing an underpayment in amounts payable exceeding [ * ] of the amount paid for a period covered by the inspection is established, in which case all reasonable costs relating to the inspection for such period and any unpaid amounts that are discovered shall be paid by Ono, together with interest on such unpaid amounts at the rate set forth in Section 7.1 above. The Parties will endeavor in such inspection to minimize disruption of Ono's normal business activities to the extent reasonably practicable. For clarity, while Ono does not engage in the bundling of products as of the Effective Date, in the event that Ono elects in the future to provide a discount for the purchase of a bundle of products that includes a Product, or if its Affiliates or Sublicensees sell Product as part of said discounted bundle, such discount shall be allocated to Product, for purposes of this Agreement, based on the ratio, calculated on a quarterly basis, of Product sales to sales of all of Ono's products sold in the Ono Territory. It is understood that the foregoing audit rights shall include the right to have the Auditor verify Ono's compliance (and the compliance of its Affiliates and Sublicensees) with the above requirements. + +ARTICLE VIII CERTAIN COVENANTS + +8.1 Diligence Obligations. + +(a) General Diligence Obligations. Ono shall use Diligent Efforts (itself or through its Affiliates) to obtain in a prompt and expeditious manner Marketing Approvals and Pricing and Reimbursement Approvals in the Ono Territory for the Products and Indications specified in the Development Plan (including, conducting any Development that may be required by the Regulatory authorities in the Ono Territory to obtain and maintain such Marketing + +47 + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +Approvals), and thereafter shall use Diligent Efforts to Commercialize the Product(s) for such Indication(s) in the Ono Territory in a manner intended to maximize Net Sales in the Ono Territory as a whole. For the avoidance of doubt, a decision by Ono not to seek a new or expanded Marketing Approval for a Product in the Ono Territory based on a Declined Clinical Study or a Combination Study shall not constitute a breach by Ono of its diligence under this Section 8.1(a). + +(b) Conflicts of Interest. Ono and its Affiliates shall set prices and discounts for and shall otherwise Develop and Commercialize the Products solely in the interest of the commercial success of such Products in the Ono Territory and not for the interest of any of their other products and services. + +8.2 Exclusivity of Efforts. Prior to the [ * ], neither Ono or its Affiliates, nor Array or its Controlled Affiliates, shall Commercialize in the Ono Territory: (i) a product that includes, as an active pharmaceutical ingredient, an agent that is a [ * ] (other than Binimetinib), or (ii) a product that includes, as an active pharmaceutical ingredient, an agent that is a [ * ] (other than Encorafenib), or grant the right to a licensee or distributor to Commercialize in the Ono Territory any of the above described products (each a "Competing Product"). In addition, in the event that Array terminates this Agreement for Ono's breach pursuant to Section 13.3 during the [ * ], or Ono exercises its right to terminate this Agreement "at will" pursuant to Section 13.2 during the Initial Royalty Term, then neither Ono nor its Affiliates shall Commercialize a Competing Product or grant the right to a licensee or distributor to Commercialize a Competing Product in the Ono Territory prior to the [ * ] anniversary of the date such termination takes effect. If during the [ * ], Array Commercializes a Competing Product in the Ono Territory, the royalty payment period shall terminate and Ono may continue to Commercialize the Product. If Ono Commercializes a Competing Product in the Ono Territory during [ * ], Array may immediately terminate this Agreement. As used herein, (i) "[ * ]" means a compound that [ * ], and (ii) "[ * ]" means a compound that [ * ]. For the avoidance of doubt, [ * ] and [ * ] shall not include a [ * ]. + +ARTICLE IX PRODUCT MANUFACTURING AND SUPPLY + +9.1 General. + +(a) It is understood that Array procures supplies of Drug Substance and Drug Product (collectively, the "Materials") from Subcontractors. Subject to the terms and conditions of this Agreement, Array shall supply, or secure supply of, Ono's requirements for Materials for the Ono Territory pursuant to one or more supply agreements to be entered into by the Parties as set forth below. + +48 + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +(b) For purposes of this Article 9, "Drug Substance" shall mean active ingredient containing Binimetinib or Encorafenib that is intended to furnish pharmacological activity or other direct effect in the diagnosis, cure, mitigation, treatment, or prevention of disease or to affect the structure or any function of the human body, but does not include intermediates used in the synthesis of such ingredient; and "Drug Product" shall mean a finished dosage form containing Drug Substance. + +9.2 Related Substance Supply. Upon Ono's written request, Array agrees to supply to Ono from available quantities in its possession (i.e., quantities not otherwise required by Array in its own development and commercialization efforts) certain related materials (e.g., reference standard, internal standard and impurities) necessary for Ono to conduct non-clinical studies, clinical studies, including, but not limited to analytical test method development and/or validation, for regulatory submissions or Commercialization in the Ono Territory, at Array's manufacturing cost or the purchase price of Array from Array's Subcontractors. For clarity, the forgoing supply obligations not apply to materials that are generally commercially available. + +9.3 Clinical Supply. The Parties shall establish as soon as practicable following the Effective Date procedures for the supply of Materials to Ono for use in performing Ono's Development activities under Development Plan and any Joint Development Plans that may subsequently be agreed to by the Parties, and the Parties shall enter into a clinical supply agreement and quality agreement within three (3) months of the Effective Date pursuant to which: + +(a) Array shall procure Materials on behalf of and as reasonably requested in writing by Ono, which Materials will be supplied to Ono at transfer price equal to: (i) Array's manufacturing cost to the extent that Array or its Affiliate(s) Manufacture such Materials itself, or (ii) the purchase price paid by Array for such Materials to the extent that Array elects to have such Materials Manufactured by a Subcontractor. The clinical supply agreement shall contain forecasting and ordering procedures (including lead times), product specifications, delivery terms and other customary terms, which terms shall in all cases be consistent with Array's contractual arrangements with its Subcontractors; + +(b) Array may place orders for Materials with its Subcontractors on Ono's behalf, or, subject to Ono and the Subcontractors entering into an agreement or other arrangement therefor, Array shall arrange with such Subcontractors for Ono to place such orders, for shipment to Ono and for Ono to pay for such Materials directly to the particular supplier. Array shall not require Ono to place orders directly with a Subcontractor if such Subcontractor is unwilling to fulfill such orders on terms as favorable to Ono as the terms such Subcontractors have extended to Array. + +(c) Array shall use Diligent Efforts to secure for Ono the inspection rights from Array's Subcontractors for Materials. In the event Array is unable to secure such inspection rights from any of its Subcontractors, Array agrees to secure such rights for itself and, if requested by Ono, Array + +49 + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +shall exercise such rights, at Ono's expense, on behalf of Ono and fully report the results thereof to Ono. + +9.4 Commercial Supply. + +(a) Ono shall have the right (but not the obligation) to Manufacture and/or package, or engage a Subcontractor to Manufacture, Ono's requirements of particular Materials (e.g., Ono's requirements of Drug Substance or Ono's requirements of Drug Product of a particular Product) related to any Product for the Ono Territory. Promptly following Ono's request, Array shall transfer, or cause to be transferred, to Ono or such Subcontractor all Array's Know-How that is necessary, useful or actually used for such Manufacture, packaging and/ or testing and release of Materials (and the cost of such transfer of Array Know-How shall be borne by Ono), and shall make personnel of Array reasonably available to assist Ono and/or its contractor in implementing the Array Know-How necessary to Manufacture and/or control and release such Materials. Upon completion of the technology transfer enabling Ono to Manufacture the Materials for the Ono Territory under the Marketing Approval, Array's supply obligations under Sections 9.2 and 9.3(b) with respect to such Materials shall terminate and Ono shall assume all supply-related liability with respect to such Materials which it Manufactures or sources from Subcontractor. + +(b) Without limiting the foregoing, Ono shall have the right to obtain from Array Ono's commercial requirements of Materials for the Ono Territory. Upon Ono's request, the Parties shall enter into a commercial supply agreement (a "Supply Agreement") and commercial quality agreement (a "Quality Agreement") on commercially reasonable terms documenting the arrangement pursuant to which: + +(i) Array shall supply Ono's reasonable requirements for Materials for the Ono Territory, which Supply Agreement shall contain forecasting and ordering procedures (including lead times), product specifications, delivery terms and other appropriate provisions mutually acceptable, and any customary terms, which terms shall in all cases be consistent with Array's contractual arrangements with its Subcontractors, and taking into account the regulatory requirements imposed on Ono as the holder of the Marketing Approval. + +(ii) Array has made arrangements with Novartis to transfer and validate at no cost to Ono all technology reasonably necessary for the manufacturing and analytical testing of the Materials by [ * ] so that commercial quantities of Materials and can be supplied to Ono and released for the Ono Territory; + +(iii) Materials supplied by Array to Ono for commercial sale of the Products shall be charged to Ono in an amount equal to (A) [ * ] of Array's manufacturing cost to the extent that Array or its + +50 + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +Affiliate(s) Manufacture such Materials itself, or (ii) [ * ] of the purchase price paid by Array for such Materials to the extent that Array elects to have such Materials Manufactured by a Subcontractor. + +9.5 Limitation; Manufacturing by Ono. Array shall (a) cooperate fully with Ono to make available for the benefit of Ono the benefits of Array's supply agreements and/or arrangements with its Third Party suppliers of Materials, and (b) administer such agreements or arrangements diligently and pursue its rights and remedies thereunder. + +9.6 Companion Diagnostics. Array shall use Diligent Efforts to make available in the Ono Territory any Companion Diagnostic developed by or on behalf of Array for use with one or more Products. + +(a) Existing Clinical Studies. It is understood that Array is contracting or has contracted with Third Parties to develop Companion Diagnostics (i) for use with Binimetinib for the treatment of NRAS melanoma and (ii) for use with Binimetinib and Encorafenib for the treatment of BRAF melanoma. The Parties shall discuss and agree on the strategy to ensure such Third Party contractor makes such Companion Diagnostics available with respect to the Development, the registration and the Commercialization of the relevant Product(s) in such Indications in countries where the relevant Product will be Commercialized. In the event such Third Party contractor(s) fails to commercialize or ceases commercialization of a Companion Diagnostic subject to this Section 9.6(a), Array shall cooperate with Ono either to obtain from such Third Party contractor(s) quantities of such Companion Diagnostic to supply Ono's reasonable requirements for the Ono Territory or enable Ono to conclude appropriate agreements with such Third Party contractor for commercialization of such Companion Diagnostics in the Ono Territory. + +(b) Other. It is anticipated that the development of any necessary Companion Diagnostics for use with the Products will be outsourced to Subcontractor(s) by Array. The Parties shall discuss and agree on the strategy to ensure such Subcontractor makes such Companion Diagnostics available with respect to the Development, the registration and the Commercialization of the relevant Product(s) in the Ono Territory. In the event such Subcontractor(s) fails to commercialize or ceases commercialization of a Companion Diagnostic subject to this Section 9.6(b), Array shall cooperate with Ono either to obtain from such Third Party contractor(s) quantities of such Companion Diagnostic to supply Ono's reasonable requirements at the cost charged by the Third Party contractor to Array plus any other documented out-of-pocket costs and reasonable internal costs actually incurred by Array directly in procuring such Companion Diagnostic or enable Ono to conclude appropriate agreements with such Subcontractor for commercialization of such Companion Diagnostics in the Ono Territory. + +ARTICLE X CONFIDENTIALITY + +51 + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +10.1 Confidential Information. Except as expressly provided in this Agreement, the Parties agree that the receiving Party shall not provide or otherwise disclose to any Third Party, and shall not use for any purpose, any information furnished to it by the other Party hereto pursuant to this Agreement (collectively, "Confidential Information"), without the prior written consent of the disclosing Party. Notwithstanding the foregoing, Confidential Information shall not include information that, in each case as demonstrated by written documentation: + +(a) was already known to the receiving Party, other than under an obligation of confidentiality, at the time of disclosure, or was developed by the receiving Party prior to disclosure by the disclosing Party; + +(b) was generally available to the public or otherwise part of the public domain at the time of its disclosure to the receiving Party; + +(c) became generally available to the public or otherwise part of the public domain after its disclosure to the receiving Party, and other than through any act or omission of the receiving Party in breach of this Agreement; + +(d) was subsequently lawfully disclosed to the receiving Party on a non-confidential basis by a person other than the disclosing Party, and who did not directly or indirectly receive such information from disclosing Party; or + +(e) is developed by the receiving Party without use of or reference to any information or materials disclosed by the disclosing Party. + +The Parties agree that Data generated in the course of performing any Joint Development Plan shall be deemed Confidential Information of both Ono and Array. + +10.2 Permitted Uses; Disclosures. Notwithstanding the provisions of Section 10.1 above and subject to Sections 10.3 and 10.4 below, a receiving Party hereto may disclose the disclosing Party's Confidential Information to: (a) in case of Array, its Affiliates, subcontractors, licensees, and Third Party Partners, (b) in case of Ono, its Affiliates, Sublicensees and Subcontractors, and, (c) in case of either Party, any other Third Parties to the extent such disclosure is reasonably necessary to exercise the rights granted to it, or reserved by it, under this Agreement, performing its obligations under this Agreement, prosecuting or defending litigation, complying with applicable governmental Laws or regulations or the rules of any public stock exchange, submitting information to tax or other Governmental Authorities or conducting Clinical Studies hereunder with respect to the Product. If a receiving Party is required by Law, regulations or guidances to make any such disclosure of the disclosing Party's Confidential Information, to the extent it may legally do so, it will give notice to the disclosing Party of such disclosure as far in advance as is practicable and, save to the extent inappropriate in the + +52 + + + + + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +case of patent applications or otherwise, shall use Diligent Efforts to secure confidential treatment of such Confidential Information of the disclosing Party prior to its disclosure (whether through protective orders or otherwise). For any other disclosures of the other Party's Confidential Information, including: (i) in case of Array, its Affiliates, subcontractors, licensees, and Third Party Partners, (ii) in case of Ono, its Affiliates, Sublicensees and Subcontractors and (iii) in case of either Party, other Third Parties as above, a Party shall ensure that the recipient thereof is bound by a written confidentiality agreement as materially protective of such Confidential Information and the disclosing Party as this Article 10, it being however understood that, notwithstanding any other provision of this Agreement, in the case of disclosures made to academic clinical trial sites and investigators, CROs, and other Third Parties involved in the Development of the Product or Companion Diagnostic, the duration and of the confidentiality and non-use obligations provided in a Party's agreement with such academic clinical trial sites and investigators, CROs, and/or other Third Parties may be less than the duration and of the confidentiality and non-use obligations in this Agreement so long as (A) they have a duration of at least five (5) years from the date of first disclosure of such information to such institutions, investigators, CROs, and other Third Parties, and (B) the receiving Party uses Diligent Efforts to limit the amount of information disclosed to such institutions, investigators, CROs, and other Third Parties. For clarity, it is understood that Array may use and disclose, in accordance with the foregoing, Ono Know-How provided to Array by Ono, and that Ono may use and disclose, in accordance with the foregoing, Array Know-How provided to Ono by Array in each case to the extent reasonably necessary for the Development, Commercialization and/or Manufacturing of the Product for such Party's Territory, subject to the requirements of Sections 10.3, 10.4, 10.5 and 10.7. + +10.3 Confidential Terms. Each Party agrees not to disclose to any Third Party the terms of this Agreement without the prior written consent of the other Party hereto, except each Party may disclose the terms of this Agreement: (a) to advisors (including financial advisors, attorneys and accountants), actual or potential acquisition partners or private investors, and others on a need to know basis, in each case under appropriate confidentiality provisions substantially equivalent to those in this Agreement; or (b) to the extent necessary to comply with applicable Laws and court orders, including securities Laws, regulations or guidances; provided that in the case of paragraph (b) the disclosing Party shall promptly notify the other Party and (other than in the case where such disclosure is necessary, in the reasonable opinion of the disclosing Party's legal counsel, to comply with securities Laws, regulations or guidances) allow the other Party a reasonable opportunity to review the proposed disclosure and oppose with the body initiating the process and, to the extent allowable by Law, to seek limitations on the portion of the Agreement that is required to be disclosed. In addition, with respect of the required disclosure of a redacted version of this Agreement pursuant to applicable securities Laws, regulations or guidance, the disclosing Party shall provide the other Party with a draft of any disclosure it intends to issue at least fifteen (15) Business Days in advance and take into account the other Party's reasonable comments. + +53 + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +10.4 Scientific Papers. Each Party through the JDRC or its designee shall provide to the other, prior to submission for publication, a draft of any articles and papers containing Confidential Information or concerning a Product which have been prepared by or on behalf of such Party (or by a Clinical Study site contracted by such Party as sponsor of the relevant Clinical Study) (each a "Scientific Paper") to be published in indexed medical and scientific journals and similar publications ("Medical Journals"). Commencing with the receipt of such draft Scientific Paper, the receiving Party shall have fifteen (15) Business Days to notify the sending Party of its observations and suggestions with respect thereto (it being understood that, during such fifteen (15) Business Days period, no submission for publication thereof shall take place) and the Parties shall discuss these observations and suggestions. The Party proposing to publish such Scientific Paper shall, in good faith, consider the comments made by the other Party, particularly if disclosure may be prejudicial to the other Party's opportunity to obtain any Patent. The other Party may require that the publication be suspended for a period of time not exceeding sixty (60) days if a Patent may be filed using the Data or Know How covered in the proposed publication. Neither Party will publish or present any Confidential Information of the other Party without such other Party's prior written consent. The sending Party shall provide to the Receiving Party copies of any final Scientific Paper accepted by a Medical Journal, within ten (10) Business Days after the approval thereof (upon availability and distribution of such information assuming that providing such information is acceptable taking into consideration the publishers' need to comply with any healthcare compliance guidelines). To enable free exchange of copyrighted material between the Parties, each Party agrees that it has or shall (i) obtain and maintain, at its own expense, an annual copyright license or equivalent license from the copyright clearance center and (ii) list the other Party as a collaborator in an agreement with the copyright clearance center if required by such agreement. + +10.5 Abstracts, Posters and Slide Decks. If a Party (or a Clinical Study site contracted by such Party as sponsor of the relevant Clinical Study) intends to present findings with respect to a Product at symposia or other meetings of healthcare professionals, or international and/or US, European or Japanese congresses, conferences or meetings organized by a professional society or organization (any such occasion, a "Scientific Meeting"), such Party through the JDRC or its designee shall provide to the other Party, within ten (10) days prior to submission or presentation, as the case may be, copies of (i) all abstracts that will be submitted for publication (ii) all draft slide presentations for use in oral presentations, and (iii) all posters that will be presented at such Scientific Meeting, in each case, concerning the Product which have been prepared by or on behalf of one of the Parties, for submission or presentation. Commencing with the receipt of any such abstract, draft slide presentation or poster, the receiving Party shall have ten (10) days to inform the sending Party of its observations and suggestions with respect thereto (it being understood that, during such review period, as applicable, no submission or presentation thereof shall take place) and the Parties shall discuss these observations and suggestions. The Party proposing to publish such an abstract or make such a presentation shall, in good faith, consider the comments made by the other Party, particularly if disclosure may be prejudicial to + +54 + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +the other Party's opportunity to obtain a Patent. The other Party may require that the abstract or presentation be suspended for a period of time not exceeding sixty (60) days if a Patent may be filed using the Data or Know-How covered in the proposed abstract or presentation. A Party shall not publish or present any Confidential Information of the other Party without such other Party's prior written consent. The sending Party shall provide to the receiving Party copies of (i) all final abstracts as soon as reasonably practicable after the approval of the Scientific Meeting, and (ii) all final posters accepted for publication or to be presented five (5) Business Days prior to the planned publication or presentation thereof (upon availability and distribution of such information assuming that providing such information is acceptable taking into consideration the publishers' need to comply with any healthcare compliance guidelines). The Parties shall use good faith and reasonable efforts to provide the other Party with draft slide presentations in accordance with the foregoing time periods. + +10.6 Registries. Each Party shall be free to (a) register/publish the Clinical Studies they are sponsoring with respect to the Product, and (b) disclose any Data from such registered Clinical Trials concerning the Product, in each case on ClinicalTrials.gov or in similar clinical trial registries; provided, however, that the Party proposing to make such disclosure shall have provided the other Party a copy of the synopsis of the Clinical Study or a detailed description of any other proposed disclosure, as applicable, that it proposes to have published in such clinical trial registry at least thirty (30) days prior to such registration or disclosure and shall, in good faith, consider the comments made by the other Party regarding the proposed registration or disclosure and the protection of any intellectual property contained therein. + +10.7 Publicity. Notwithstanding anything to the contrary in Section 10.3, the Parties have agreed on a mutual press release to announce the execution of this Agreement, together with a corresponding Question & Answer outline for use in responding to inquiries about the Agreement; thereafter, each Party may each disclose to Third Parties the information contained in such press release and Question & Answer outline without the need for further approval by the other Party. Each Party may also desire to issue subsequent press releases or other public statements relating to this Agreement or activities hereunder, including information which pertains to the development and regulatory progress of any Product. Such disclosure may include, without limitation, the achievement of a milestone and any payments received in respect of such milestone in accordance with applicable Laws, as well as periodic updates regarding the status of the development and/or regulatory affairs pertaining to such Product. The Parties agree to consult with each other reasonably and in good faith with respect to the text and timing of such press releases or other disclosures and obtain the approval of the other Party, no later than within five (5) Business Days prior to the issuance thereof; provided, however, that a Party may not unreasonably withhold or delay consent to such releases unless such release would adversely affect the rights or interests of such Party. After release of a press release, each Party may each disclose to Third Parties the information contained in such press release without the need for further approval by the other. + +55 + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +10.8 Prior Non-Disclosure Agreements. Upon execution of this Agreement, the terms of this Article 10 shall supersede any prior non-disclosure, secrecy or confidentiality agreement between the Parties, including the Confidentiality Agreement between the Parties dated August 26, 2016. Any information disclosed under such prior agreements shall be deemed disclosed under this Agreement. + +ARTICLE XI + +PATENT PROSECUTION AND ENFORCEMENT + +11.1 Ownership of Inventions. + +(a) Title to all know-how, inventions and other intellectual property made solely by Ono personnel (or that of any Affiliate) in connection with this Agreement shall be owned by Ono (or its respective Affiliate). + +(b) Title to all know-how, inventions and other intellectual property made solely by Array personnel (or that of any Affiliate) in connection with this Agreement shall be owned by Array (or its respective Affiliate). + +(c) Title to all know-how, inventions and other intellectual property made jointly by personnel of Array (or that of any Affiliate) and Ono (or that of any Affiliate) in connection with this Agreement shall be jointly owned by Array (or its respective Affiliate) and Ono (or its respective Affiliate). + +(d) Except to the extent any jointly-owned inventions or intellectual property are included in subject matter licensed by one Party to the other Party under this Agreement, each Party may only practice any such jointly-owned inventions or intellectual property for its own internal purposes, and neither Party shall have the right to enforce, license, or assign such jointly- owned inventions or intellectual property, without the prior written consent of the other Party. The filing, prosecution and enforcement of Joint Patents is described in Section 11.2(b) below. With respect to the filing, prosecution and enforcement of all other Patents directed to inventions made jointly by personnel of Array (or that of any Affiliate) and Ono (or that of any Affiliate) in connection with this Agreement that are not Joint Inventions relating to Binimetinib and Encorafenib and/or Products, the Parties shall consult with one another and mutually agree upon such actions. + +11.2 Prosecution and Maintenance of Array Patents and Joint Patents. + +(a) Prosecution of Array Patents. As between Ono and Array, Array shall, have responsibility for the filing, prosecution and maintenance of all Array Patents in the Ono Territory at Array's sole cost and expense. Array agrees to keep Ono generally informed as to the + +56 + + + + + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +course of such patent filing, prosecution, maintenance or other proceedings with respect to Array Patents. Array shall provide Ono with copies of each draft patent application with respect to Array Patents (in English, unless Japanese translation is available) to be filed as well as copies of each office action received from the relevant patent offices in each country of the Ono Territory, in each case with enough lead time where reasonably practicable, to enable Ono to review and comment on such application or action; provided that Array shall have no obligation to delay any action or response pending receipt of such comments or suggestions. Additionally, Array will provide Ono with copies of the patent applications and responses to office actions it ultimately files with the patent offices in the Ono Territory (in the original language, unless English translation is available). If Array determines not to file within any jurisdiction requested by Ono, not to continue the prosecution of, or not to continue to maintain or defend, any Array Patent in any country in the Ono Territory, or if Array otherwise determines to abandon any such Array Patent, Array shall promptly notify Ono of such determination sufficiently in advance to enable Ono to undertake or continue the prosecution, maintenance or defense of such Array Patent without a loss of rights, and Ono shall have the right to undertake or continue such prosecution, maintenance or defense at its sole cost and expense. Ono shall hold all information disclosed to it under this Section 11.2 as confidential. + +(b) Prosecution of Joint Patents. Prior to preparation and filing of any Joint Patent, the Parties shall consult with one another and mutually agree upon a lead Party to file, prosecute and maintain such Joint Patent under the names of both Array and Ono. The Joint Patents shall be prepared and prosecuted by a mutually acceptable patent law firm and allocation of costs for preparation, filing, prosecution and maintenance shall be agreed by the Parties prior to preparation and filing of such Joint Patent. Notwithstanding the foregoing, either Party may elect not to support the filing, prosecution and maintenance of all or part of any Joint Patent in any country in the world. + +(c) Patent Term Extensions. Array shall have the right, in consultation with Ono with respect to Array Patents, and Ono shall have the right, with respect to any Patents owned or Controlled by Ono, its Affiliates or Sublicensees related to the Product, to file all applications and take actions necessary to obtain patent term extensions, or similar additional or supplemental protection, with respect to the Product under statutes in any other country within the Ono Territory, which extensions shall be owned by the Party that owns or Controls the underlying Patent. If such Party declines to pursue such patent term extensions, then the other Party shall have the right on behalf of such Party to file all such applications and take all such actions necessary to obtain such patent term extensions (or similar additional or supplemental protection) with respect to the Product. In each case, the Parties shall fully cooperate to obtain such extensions and additional protection. + +57 + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +11.3 Enforcement. + +(a) Enforcement Actions. + +(i) In the event that Array or Ono becomes aware of actual or threatened infringement or misappropriation of any Array Patent or Array Know-How in any country within the Ono Territory by the Manufacture or sale or use of an unauthorized version of a Product ("Infringing Product"), then such Party shall promptly notify the other Party in writing and the Parties shall consult with each other with respect to the strategy in response to such Infringing Product. Array shall have the first right, but not the obligation, to initiate proceedings or take other appropriate action in Ono Territory, at its own expense, against any such Third Party. If Array does not initiate proceedings or take other appropriate action within ninety (90) days of receipt of a request by Ono to initiate an enforcement proceeding, or if a legal proceeding must be commenced prior to the end of such ninety(90) day period to avoid a loss of rights, then no later than five (5) days prior to such deadline, then Ono shall be entitled to initiate infringement proceedings or take other appropriate action against an Infringing Product at its own expense. The Party conducting such action ("Enforcing Party") shall have full control over its conduct, including settlement thereof; provided, however, that the Enforcing Party may not settle any such action, or make any admissions or assert any position in such action, in a manner that would materially adversely affect the rights or interests of the other Party, without the prior written consent of the other Party, which shall not be unreasonably withheld or delayed. In any event, the Parties shall assist one another and cooperate in any such litigation at Enforcing Party's reasonable request. + +(ii) With respect to Infringing Products containing Binimetinib, Ono's rights under Section 11.3(a)(i) are subject to the rights previously granted to AstraZeneca AB ("AZ") pursuant to Sections 8.3.1 and 8.3.3 of that certain Collaboration and License Agreement between Array and AZ, effective as of December 18, 2003, as amended by that certain Amendment to Collaboration and License Agreement, between Array and AZ, effective as of June 1, 2009 (collectively, the "AZ Agreement"). For the avoidance of doubt, the rights granted to or retained by Array pursuant to Sections 8.3.1 and 8.3.3 of the AZ Agreement shall, to the extent relating to Infringing Products containing Binimetinib, be subject to this Agreement, including this Section 11.3. Any enforcement actions initiated by AZ with respect to an Infringing Product shall be deemed initiated by Array for purposes of Section 11.3(a)(i), and the costs and expenses incurred by Array in such enforcement action shall include any costs and expenses reimbursed or required to be reimbursed by Array to AZ in accordance with the AZ Agreement in such enforcement action. Additionally it is further understood that notwithstanding anything to the contrary in this Agreement, the AZ Agreement, and the rights granted to AZ thereunder, shall in no event constitute a breach of Sections 8.2 and 15.1. + +(iii) With respect to the responsibility and allocation of costs for the enforcement of the Joint Patents (i) against Third Party products that infringe the Joint Patents outside the Ono Territory, or (ii) + +58 + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +against Third Party products in the Ono Territory that infringe the Joint Patents but that are not "Infringing Products", the Parties shall discuss and agree at the time when the Parties consult with respect to the strategy of such enforcement action in response to such Third Party infringement. + +(b) Recovery. + +(i) Array and Ono shall recover their respective actual out-of-pocket expenses (including attorneys' fees), or equitable proportions thereof, associated with any litigation against infringers undertaken pursuant to Section 11.3(a) (i) or (ii) above or settlement thereof from any resulting recovery made by either Party. Any excess amount of such a recovery shall be allocated as follows: (i) if Ono initiated such litigation, [ * ] of such excess amount shall be retained by Ono and [ * ] by Array, and (ii) if Array initiated such litigation, Array shall retain [ * ] of such excess amount and Ono shall obtain [ * ] of such excess amount, to the extent such excess amount represents damages relating to Manufacture or sale or use of an Infringing Product in the Ono Territory. + +(ii) With respect to enforcement actions against infringers relating to Joint Patents undertaken pursuant to 11.3(a)(iii) above, the Parties shall discuss and agree in good faith at the time when the Parties consult with respect to the strategy of such enforcement action in response to such Third Party infringement. + +(c) Cooperation. The Parties shall keep one another informed of the status of their respective activities regarding any litigation or settlement thereof concerning the Array Patents or the Array Know-How within the Ono Territory, and shall assist one another and cooperate in any such litigation at the other's reasonable request (including joining as a party plaintiff to the extent necessary and requested by the other Party). + +11.4 Third Party Infringement Claims. + +(a) If the production, sale or use of any Product in the Ono Territory pursuant to this Agreement results in a claim, suit or proceeding alleging patent infringement against Array and/or Ono (or their respective Affiliates, licensees or Sublicensees) (collectively, "Infringement Actions"), the Party subject to such claim, suit or proceeding ("Subject Party") shall promptly notify the other Party hereto in writing and shall discuss with the other Party the strategy for defending such Infringement Actions but shall have the right to direct and control the defense thereof in its sole discretion and at its own expense, with counsel of its choice; provided, however, the other Party may participate in the defense and/or settlement thereof, at its own expense with counsel of its choice. In any event, the Subject Party agrees to keep the other Party hereto reasonably informed of all material developments in connection with any such Infringement Action. Ono agrees not to settle such Infringement Action, or make any admissions or assert any position in such Infringement Action, in a manner that would adversely affect the allegedly infringing Product + +59 + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +or the Manufacture, use or sale of such Product in any country of the world, without the prior written consent of Array; and Array agrees not to settle such Infringement Action, or make any admissions or assert any position in such Infringement Action, in a manner that would adversely affect the allegedly infringing Product, or the Manufacture, use or sale of such Product, within the Ono Territory, without the prior written consent of Ono, which shall not be unreasonably withheld or delayed. + +ARTICLE XII TRADEMARKS + +12.1 Display. + +(a) All packaging materials, labels and Marketing Materials for the Products shall display the Product Trademarks in katakana or in other applicable language and no other product-specific trademarks or branding. + +(i) Products Containing Binimetinib. Where possible, Ono shall utilize "mektovi" as the Product Trademark for Products containing Binimetinib. If the use of "mektovi" is not advisable for legal, regulatory or other material reasons outside the Parties' reasonable control, in one or more countries of the Ono Territory, Ono shall utilize "balimek" as such Product Trademark is such country or countries. If neither "mektovi" not "balimek" can be used (or if it is not advisable to use them) for legal, regulatory or other material reasons outside the Parties' reasonable control, in one or more countries of the Ono Territory, Ono may select an alternative Product Trademark reasonably acceptable to Array for use in such country or countries, with any disputes being referred to the JCC for resolution, it being understood that in resolving any such dispute the JCC shall give preference to the creation of a single brand for Products containing Binimetinib in countries where neither "balimek" or "mektovi" can be used. + +(ii) Products Containing Encorafenib. Where possible, Ono shall utilize "braftovi" as the Product Trademark for Products containing Encorafenib. If the use of "braftovi" is not advisable for legal, regulatory or other material reasons outside the Parties' reasonable control, in one or more countries of the Ono Territory, Ono may select an alternative Product Trademark reasonably acceptable to Array for use in such country or countries, with any disputes being referred to the JCC for resolution, it being understood that in resolving any such dispute the JCC shall give preference to the creation of a single brand for Products containing Encorafenib in countries where "braftovi" cannot be used. + +(b) Each Product shall be sold in the Ono Territory under the trade name Ono or other trade name chosen by Ono and the logo of Ono; provided, however that to the extent permissible under applicable Law within the Ono Territory, such packaging materials, labels and Marketing Materials shall also display the trade name of Array in reasonable size and prominence, + +60 + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +as reasonably approved by Array. The trademarks of Ono, trade dress, style of packaging and the like with respect to the Product in the Ono Territory may be determined by Ono in a manner that is consistent with Ono's standard trade dress and style, but shall be subject to the approval by the JCC to ensure the same are consistent with Array's global trademark guidelines. + +12.2 Assignment. Subject to the terms and conditions of this Agreement, following registration of the Product Trademark(s) by Array in the Ono Territory pursuant to Section 12.3 below, Array shall assign, and shall cause its Affiliates to assign, to Ono all rights to the Product Trademark(s) so registered in the Ono Territory at Ono's cost and expense, in each case solely for the purpose of Commercializing the Products in the Ono Territory in accordance with this Agreement. Ono shall be responsible for maintenance of such Product Trademark(s) at its cost and expense in the Ono Territory. + +12.3 Registration of Trademarks and Trade Dress. + +(a) Products Containing Binimetinib. If the Product Trademark for Products containing Binimetinib is balimek or mektovi, Array (or its designee) shall use Diligent Efforts to file and register at Array's expense and in its own name (to the extent permitted by applicable Law), appropriate registrations for such Product Trademarks in the Ono Territory. If, however, neither balimek nor mektovi is available or desirable in a given country or countries, Ono agrees to file and register, at Ono's expense and name, appropriate registrations for an alternative Product Trademark (selected in accordance with Section 12.1(a)(i)) in such country or countries of the Ono Territory. As between the Parties, Ono shall have the sole right to file at its expense and in its own name, appropriate registrations for the trade dress utilized with the Product in the Ono Territory. + +(b) Products Containing Encorafenib. If the Product Trademark for Products containing Encorafenib is braftovi, Array (or its designee) shall use Diligent Efforts to file and register at Array's expense and in its own name (to the extent permitted by applicable Law), appropriate registrations for such Product Trademarks in the Ono Territory. If, however, braftovi is not available or desirable in a given country or countries, Ono agrees to file and register, at Ono's expense and name, appropriate registrations for an alternative Product Trademark (selected in accordance with Section 12.1(a)(ii)) in such country or countries of the Ono Territory. As between the Parties, Ono shall have the sole right to file at its expense and in its own name, appropriate registrations for the trade dress utilized with the Product in the Ono Territory. + +12.4 Approval of Packaging and Promotional Materials. The Parties agree that the quality of the Products packaging shall be consistent with the highest standards of quality in the pharmaceuticals industry. + +(a) Mektovi/Balimek/Array. Without limiting Section 5.1(c) above, to the extent necessary to preserve Array's legal rights in the balimek or mektovi Product Trademarks, + +61 + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +Ono shall submit representative Marketing Materials, packaging and Product displaying the balimek or mektovi Product Trademarks and/or Array's trade name to Array for Array's review and approval (such approval shall not be unreasonably withheld or delayed) prior to the first use of such Marketing Materials, packaging or Product and prior to any subsequent change or addition to such Marketing Materials, packaging or Product; provided that if Array has not responded within ten (10) Business Days after the submission of such Marketing Materials, packaging or Product, Array's approval will be deemed to have been received. + +(b) Braftovi/Array. Without limiting Section 5.1(c) above, to the extent necessary to preserve Array's legal rights in the braftovi Product Trademark, Ono shall submit representative Marketing Materials, packaging and Product displaying the braftovi Product Trademark and/or Array's trade name to Array for Array's review and approval (such approval shall not be unreasonably withheld or delayed) prior to the first use of such Marketing Materials, packaging or Product and prior to any subsequent change or addition to such Marketing Materials, packaging or Product; provided that if Array has not responded within ten (10) Business Days after the submission of such Marketing Materials, packaging or Product, Array's approval will be deemed to have been received. + +(c) Other. With respect to all Product Trademarks other than balimek, mektovi or braftovi, Ono shall, and shall cause its respective Affiliates and Sublicensees to, comply with trademark style and usage standards approved by Array from time to time in connection with use of the Product Trademark(s). Ono shall, and shall cause its Affiliates to, at its own expense, submit representative Marketing Materials, packaging and Product displaying such Product Trademarks to Array for approval, which approval shall not be unreasonably withheld or delayed. In the event that Array reasonably objects to a proposed usage of the Product Trademark(s), it shall give written notice of such objection to Ono within sixty (60) days of receipt of such sample, specifying the way in which such usage of its Product Trademark(s) fails to meet the style, usage or quality standards for the Product or Product Trademark set forth in the first two sentences of this Section 12.4(c). If Ono or its Affiliate wishes to use such representative Marketing Materials, it must remedy the failure and submit further samples to Array's for approval. + +12.5 Enforcement. + +(a) If either Party becomes aware of any actual or threatened infringement of any Product Trademark in the Ono Territory, such Party shall promptly notify the other Party in writing. Ono shall, at its own expense, initiate infringement proceedings or take other appropriate actions against an infringement of any Product Trademark in the Ono Territory and/or to defend any actions or proceedings involving the Product Trademarks in the Ono Territory, as the case may be. Ono shall have full control over the conduct of such action, including settlement thereof; + +62 + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +provided, however, Ono may not settle any such action, or make any admissions or assert any position in such action, in a manner that would materially adversely affect the Product Trademarks in the Ono Territory nor the rights or interests of Array, without the prior written consent of Array, which shall not be unreasonably withheld or delayed. In any event, the Ono shall keep Array informed of the status of its activities regarding any litigation in the Ono Territory involving a Product Trademark or settlement thereof and Array shall assist Ono and cooperate in any such litigation at Ono's reasonable request and expense. + +(b) Ono and Array shall recover their respective actual out-of-pocket expenses, or proportionate percentages thereof, associated with any litigation against infringers undertaken pursuant to this Section 12.5 or settlement thereof from any resulting recovery made by either Party. Any excess amount of such a recovery shall be [ * ] between Ono and Array, to the extent such recovery represents damages pertaining to the infringement of a Product Trademark in the Ono Territory. + +12.6 Domain Names. Array shall own rights to, and shall be responsible, at its own expense, for registering and maintaining, the Internet domain names listed on Exhibit 12.6 (each of the foregoing, a "Domain Name") and agrees to grant, and hereby grants to Ono a royalty-free, fully paid-up exclusive license to use those particular Domain Names which Ono elects to use (and actually uses) in connection with Ono's commercialization of the Product in the Ono Territory in accordance with this Agreement. In the event Ono would like to use an available Internet domain name including the balimek, mektovi or braftovi, or Product Trademarks not previously registered to Array, Array grants Ono its consent to register and maintain such Internet domain names in Ono's name and at Ono's expense, provided that upon termination (but not expiration) of this Agreement, Ono shall transfer full and exclusive ownership and control of such Internet domain names to Array, or if Array so requests, promptly withdraw registration of such Internet domain name(s), in each case at Ono's sole cost and expense. Each Party shall own rights to any Internet domain names incorporating the Product Trademark(s) owned by such Party under Section 12.1 or any variation or part of such Product Trademark(s) as its URL address or any part of such address, and agrees to grant, and hereby grants to the other Party a royalty-free, fully paid-up exclusive license to use those particular Internet domain names which the grantee Party elects to use (and actually uses) in connection with the grantee Party's commercialization of the applicable Product in the grantee Party's Territory in accordance with this Agreement. The use rights granted to the Internet domain names under this Section 12.6 are limited to the grantee Party's Territory, and neither Party shall actively make or authorize any use, direct or otherwise, of its Internet domain names outside its respective territory. Each Party acknowledges and agrees that the Internet domain names and the goodwill pertaining to such Internet domain names shall belong exclusively to the Party owning such Internet domain name, who shall be registered as "Registrant" or "Owner" and as "Administrative Contact" of the relevant domain name. The Parties agree that any use of a Product Trademark in any content describing or referring to a Product: (i) on any internet page or web site operated by Array in + +63 + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +the Array Territory shall be in the sole control of Array, and (ii) on any internet page or web site operated by Ono in the Ono Territory, subject to the terms of this Agreement, shall be in the sole control of Ono, and therefore Ono and Array, respectively, shall be responsible for any damage caused to the Product Trademarks as a result of their use of the Product Trademarks on any internet page or web site in their respective territories. + +ARTICLE XIII + +TERM AND TERMINATION + +13.1 Term. This Agreement shall commence on the Effective Date and, unless terminated earlier pursuant to this Article 13, shall continue in full force and effect, on a Product-by-Product and country-by-country basis until the Secondary Royalty Term with respect to such Product expires, at which time this Agreement shall expire in its entirety with respect to such Product in such country. Upon expiration of this Agreement, the licenses granted to Ono under Section 2.1 shall become non-exclusive, fully paid- up, irrevocable, perpetual, royalty free licenses, with sublicensing rights, to Develop, Manufacture, and/or Commercialize the Products in the Ono Territory. From and after the expiration of this Agreement, Ono shall have the exclusive, fully paid up, royalty- free right to use (i) Product Trademarks assigned to Ono under Section 12.2, and (ii) those Domain Names licensed to Ono under Section 12.6, in each case solely for purposes of, and to the extent necessary, for Ono to continue to Commercialize the Products in the Field in the Ono Territory. + +13.2 Termination by Ono without Cause. Commencing on the later of (i) [ * ] of the First Commercial Sale of the Binimetinib Product in the Ono Territory, or (ii) [ * ] of the First Commercial Sale of the Encorafenib Product in the Ono Territory, Ono shall have the right to terminate this Agreement, for any reasons by giving [ * ] advance written notice to Array which shall be accompanied by the rationale for such termination. + +13.3 Termination for Material Breach. Either Party may terminate this Agreement in its entirety in the event the other Party shall have materially breached or defaulted in the performance of any of its material obligations hereunder, and such default shall have continued for ninety (90) days (or with respect to any breach of any payment obligations, for sixty (60) days) after written notice thereof was provided to the breaching Party by the non‑breaching Party. Any such termination shall become effective at the end of such ninety (90) day period (or sixty (60) day period with respect to any failure to pay) unless the breaching Party has cured any such breach or default prior to the expiration of the applicable cure period. Exercising the right to terminate this Agreement by a Party pursuant to this Section 13.3 shall not preclude a claim or a compensation for damages on the other Party. + +13.4 Termination for Bankruptcy. Either Party shall have the right to terminate this Agreement upon written notice to the other Party: (a) if such other Party is declared insolvent or bankrupt by a + +64 + + + + + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +court of competent jurisdiction; (b) if a voluntary or involuntary petition in bankruptcy is filed in any court of competent jurisdiction against such other Party and such petition is not dismissed within ninety (90) days after filing; (c) if such other Party shall make or execute an assignment of substantially all of its assets for the benefit of creditors; or (d) substantially all of the assets of such other Party are seized or attached and not released within ninety (90) days thereafter. + +13.5 Termination for Safety Reasons and Efficacy Reason. + +(a) Ono shall have the right to terminate this Agreement, on a Product-by-Product basis, for Safety Reasons upon thirty (30) days written notice to Array or within a shorter period if required under applicable Law, but only after consulting with Array and obtaining Array's agreement with Ono's assessment with respect to such Safety Reasons (or as provided for below, the agreement of the Experts). Ono shall have the right to terminate this Agreement for Efficacy Reasons upon one hundred and eighty (180) days written notice to Array. + +(b) If Array disagrees with Ono's assessment with respect to Safety Reasons, such matter shall be resolved in accordance with the procedures set forth in Section 17.2, which shall apply mutatis mutandis, which Experts shall determine whether the Safety Reasons are justified and are unlikely to be reversed, within a reasonable period of time with a commercially reasonable level of investment. The opinion of the majority of the Experts shall be finally binding on the Parties. + +(c) "Safety Reasons" shall mean that, based upon all relevant scientific data, there are safety and public health issues relating to the Product such that the medical benefit/risk ratio of such Product is sufficiently unfavorable as to materially compromise the welfare of patients so that the use in patients is no longer justifiable and that such issues are unlikely to be reversed within a reasonable period of time with a commercially reasonable level of investment. + +(d) "Efficacy Reasons" shall mean that either (i) there is no efficacy or lower efficacy of the Products in comparison with control arm in COLUMBUS Clinical Study as well as BEACON Clinical Study (neither triplet therapy nor doublet therapy demonstrates statistically significant efficacy in comparison with control arm), or (ii) as of the fifth anniversary of the Effective Date, neither BRAF-mutant Melanoma and Marketing Approval nor BRAF-mutant colorectal cancer have received Marketing Approval from MHLW. + +ARTICLE XIV EFFECT OF TERMINATION + +65 + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +14.1 Accrued Obligations. The expiration or termination of this Agreement for any reason shall not release either Party from any liability which, at the time of such expiration or termination, has already accrued to the other Party or which is attributable to a period prior to such expiration or termination, nor will any termination of this Agreement preclude either Party from pursuing all rights and remedies it may have under this Agreement, or at law or in equity, with respect to breach of this Agreement. + +14.2 Rights on Termination of Agreement. In case of termination of this Agreement by either Party, this Section 14.2 shall apply: + +(a) Wind-down. + +(i) Development. In the event Ono is the sponsor of or conducting any on-going Clinical Studies of the Product following the date a notice of termination has been issued by Array or Ono, to the extent requested by Array, Ono agrees to: (A) continue to sponsor or conduct any such Clinical Studies in normal course if such Clinical Studies can be completed (i) within [ * ] following the effective date of termination in the case of a termination by Ono pursuant to Section 13.2, or (ii) within [ * ] following the effective date of termination in the case of any other termination of this Agreement by either Party, or (B) promptly transition to Array or its designee such sponsorship or Clinical Studies (or portions thereof) provided that in such case, Array shall take over such studies (i) within [ * ] following the effective date of termination in the case of a termination by Ono pursuant to Section 13.2, or (ii) within [ * ] following the effective date of termination in the case of any other termination of this Agreement by either Party. In addition, in the event Ono is conducting any on-going pre-clinical studies and/or formulation studies (e.g., stability studies) of the Product, Ono agrees to promptly transition to Array or its designee such pre-clinical studies and/or formulation studies to the extent such transfer is reasonably possible. In the case of a termination by Array pursuant to Section 8.2, 13.3 or 13.4 or by Ono pursuant to Section 13.2, Ono shall be responsible for (1) costs of carrying out the transfers described in this Section 14.2(a)(i), and (2) all costs of on-going Clinical Studies through the termination of the wind-down period (including for clarity, the costs incurred by Array in carrying out any transferred Clinical Studies through the termination of the wind-down period). In all other cases Array shall be responsible for such costs. Notwithstanding the foregoing, if Ono terminates this Agreement with respect to a Product pursuant to Section 13.5(a), Ono shall not be obligated to continue to sponsor or conduct any Clinical Studies with respect to such Product under Section 14.2(a)(i)(A) above. + +(ii) Commercialization. To avoid disruption in the availability of Product to patients, if this Agreement is terminated after the First Commercial Sale of the Product in the Ono Territory other than pursuant to Section 13.5, then to the extent requested by Array, Ono, its Affiliates and its Sublicensees shall continue to distribute (but shall not be obligated to market or promote) the Product, in accordance + +66 + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +with the terms and conditions of this Agreement, in each country of the Ono Territory for which Marketing Approval therefor has been obtained, taking into account applicable issues, if any, for patient safety or the requirements of a Regulatory Authority within the Ono Territory, until the date on which Array notifies Ono in writing that Array has secured an alternative distributor or licensee for the Product in such country, but in no event more for than (A) [ * ] after the date of such notice of termination of this Agreement by Ono pursuant to Section 13.2 or by Array pursuant to Section 13.4 or (B) [ * ] after the date of such notice of termination of this Agreement by Array pursuant to Sections 8.2 or 13.3 or by Ono pursuant to Section 13.3 or 13.4 ("Wind- down Period"); provided that Ono, its Affiliates and its Sublicensees shall cease such activities, or any portion thereof, in a given country upon sixty (60) days' notice by Array requesting that such activities (or portion thereof) be ceased. Notwithstanding any other provision of this Agreement, during the Wind-down Period, Ono's and its Affiliates' and, subject to Section 14.2(a)(viii) below, Sublicensees' rights with respect to the Product (including the Product Trademarks) in the Ono Territory shall be non- exclusive and, without limiting the foregoing, Array shall have the right to engage one or more other distributor(s) and/or licensee(s) of the Product in all or part of the Ono Territory. Any Product sold or disposed by Ono, its Affiliates and, subject to Section 14.2(a) (viii) below, its Sublicensees in the Ono Territory during the Wind-down Period shall be subject to royalties under Section 6.3 above, provided that in the event of a termination by Ono pursuant to 13.3 or 13.4, if Array requests that Ono continue distributing the Product beyond the first anniversary of the date on which such notice of termination was given, then, the royalties owed by Ono under Section 6.3 above with respect to sales of Product occurring during the remainder of the Wind-down Period shall be reduced by [ * ] of the otherwise applicable royalty rate, provided further that in no event shall such royalties be reduced to less than the royalty due to [ * ] pursuant to that certain agreement dated [ * ]. Within thirty (30) days of expiration of the Wind- down Period, Ono shall notify Array of any quantity of the Product remaining in Ono's inventory and Array shall have the option, upon notice to Ono, to purchase any such quantities of unlabeled and unpackaged Product from Ono at the price equal to the price paid by Ono for such quantities of unlabeled and unpackaged Product manufactured by a Third Party manufacturer or, to the extent Ono manufactured such quantities of unlabeled and unpackaged Products itself, the cost of direct materials and direct labor for such unlabeled and unpackaged Products. + +(iii) Assignment of Regulatory Filings and Marketing Approvals. Ono shall assign (or cause to be assigned) to Array or its designee, at Array's cost, except in case of termination by Array pursuant to Section 13.3 or 13.4 or by Ono pursuant to Section 13.2, in which case the expenses will be borne by Ono, (or to the extent not so assignable, Ono shall take all reasonable actions to make available to Array or its designee the benefits of) all Regulatory Filings for the Product in the Ono Territory, including any such Regulatory Filings made or owned by its Affiliates and/or Sublicensees. In each case, unless otherwise required by any applicable Law or regulation or requested by Array, the foregoing assignment (or availability) shall be made within a period of time agreed upon and consistent + +67 + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +with Ono's obligations during the Wind Down Period. In addition, Ono shall promptly provide to Array a copy of all Data and Ono Know-How pertaining to the Product in the Ono Territory to the extent not previously provided to Array and Array shall have a fully-paid-up right to use and disclose all Data and Ono Know-How pertaining to the Product following termination of this Agreement, except in case of termination by Ono pursuant to Section 13.3 or 13.4, in which case the Section 14.2(a)(ix) shall apply. In addition, all such Data and Ono Know-How, to the extent solely related to the Product, shall be deemed Confidential Information of Array and not Confidential Information of Ono (and will not be subject to the exclusions under Sections 10.1(a) or (e) above). + +(iv) Transition. Each Party shall use Diligent Efforts to cooperate with the other and/or its designee to effect a smooth and orderly transition in the Development, sale and ongoing marketing, promotion and commercialization of the Product in the Ono Territory during the Wind-down Period and to conduct in an expeditious manner any activities to be conducted under this Section 14.2. Without limiting the foregoing, Ono shall, upon written request from Array, provide Array copies of customer lists, customer data and other customer information relating to the Product in the Ono Territory (except as prevented by the applicable Laws and regulations relating to the protection of personal information), which Array shall have the right to use and disclose. For clarity, "customers" means prescribers and individuals and entities with the ability to influence use of the Product (e.g. individuals responsible for hospital formularies and/or making purchasing decisions on behalf of the hospital) that are called on by Ono representatives when detailing the Product. + +(v) Licenses. Effective as of the date of expiration, Ono shall grant to Array a non-exclusive, worldwide, royalty-free license, with the right to grant sublicenses, (A) under any Improvements, and (B) under any other Patents owned or Controlled by Ono related to any Product(s) (including without limitation, Ono's interest in any Joint Patents) for the purposes of making, using, developing, importing, selling, distributing, marketing and promoting the Product(s) in the form they exist as of the time the Agreement is terminated, Notwithstanding the foregoing, in the event of a termination by Ono pursuant Section 13.3 or 13.4, Section 14.2(a)(ix) shall apply. + +(vi) Return of Materials. Within ninety (90) days after the end of the Wind-down Period, upon request by Array, Ono shall either deliver to Array or destroy all tangible items comprising, bearing or containing trademarks of Array (including the Product Trademarks), trade names, patents, copyrights, designs, drawings, formulas or other Data, photographs, samples, literature, sales and promotional aids ("Product Materials") and Confidential Information of Array, that is in Ono's possession, subject to Ono's right to keep one (1) copy for archiving purposes. Effective upon the end of the Wind-down Period, Ono shall cease to use all trademarks and trade names of Array (including the Product Trademarks) in the Ono Territory, and all rights granted to Ono hereunder with respect to the Product in the Ono Territory shall terminate. + +68 + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +(vii) Marks and Domains. Effective upon the effective date of termination, Ono hereby assigns and shall cause to be assigned to Array all worldwide rights in and to (i) any Product Trademarks specific to one or more Products that Ono or any of its Affiliates used in connection with Product(s), and (ii) all Internet domain names incorporating the applicable Product Trademark(s) or any variation or part of such Product Trademark(s) as its URL address or any part of such address, for domains outside the Array Territory. It is understood that such assignment shall not include the name of Ono or any of its Affiliates, nor the corporate logo, service mark, or trademark for Ono or for any of its Affiliates as a corporate entity. + +(viii) Sublicensees. Any contracts with Sublicensees in the Ono Territory engaged by Ono shall, at the request of Array in its discretion, be assigned to Array to the furthest extent possible; provided that such assignment is accepted by the Sublicensee(s) in any country or countries within the Ono Territory. In the event such assignment is not requested by Array or is not accepted by such Sublicensee(s), then the rights of such Sublicensees with respect to the Product in relevant country or countries within the Ono Territory shall terminate upon the termination of Ono's rights with respect to the Ono Territory. Subject to Ono's Affiliates' and Sublicensees' obligations under Section 14.2(a)(ii) above, Ono shall ensure that its Affiliates and such Sublicensees (if not assigned to Array pursuant to this Section 14.2(a)(viii)) shall transition all rights in and to the Product back to Array in the manner set forth in this Section 14.2 as if such Affiliate or Sublicensee were named herein. + +(ix) Following a termination by Ono pursuant to Section 13.3 or 13.4, in the event that Array wishes to have Ono: (A) assign to Array the Regulatory Filings for the Product in the Ono Territory and provide to Array a copy of all Data and Ono Know-How pertaining to the Product as described in 14.2(a)(iii) above, and/or (B) grant to Array a non-exclusive license under any Improvements, and/or under any other Patents owned or Controlled by Ono related to any Product(s) (including without limitation, Ono's interest in any Joint Patents) as described in 14.2(a)(v) above, Array shall so notify Ono and Ono shall make such rights for consideration consistent with then-prevailing market conditions, on customary terms and conditions to be negotiated in good faith. In the event that the Parties cannot finalize such an agreement within sixty (60) days of commencing negotiations with respect thereto, the agreement shall be referred for resolution pursuant to Section 17.3 applied mutatis mutandis to such agreement. + +14.3 Liquidated Damages. In the event that Array (a) [ * ] during [ * ], or (b) intentionally conceals or falsifies a material result and/or material item of data concerning the safety or efficacy of the Product, which concealment or falsification (i) is undertaken to induce Ono to not terminate this Agreement and (ii) results in a substantial reduction to the value of the Product in the Ono Territory, then, as an alternative to its right to terminate this Agreement pursuant to Section 13.3 above, Ono may in its discretion elect to continue this Agreement, in which case (A) Ono shall be relieved of its due diligence obligations under this Agreement; and (B) as liquidated damages for the breaches described + +69 + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +in (a) or (b) above, the otherwise applicable royalty rate with respect to Products shall thereafter be [ * ] for the [ * ]. + +14.4 No Renewal, Extension or Waiver. Acceptance of any order from, or sale or license of, any Product to Ono after the notice or effective date of expiration or termination of this Agreement in its entirety shall not be construed as a renewal or extension hereof, or as a waiver of expiration or termination of this Agreement in its entirety. + +14.5 Survival. Upon the expiration or termination of this Agreement, all rights and obligations of the Parties under this Agreement shall terminate except those described in the following Articles and Sections: Articles I (Definitions), XIV (Effect of Termination), XVI (Indemnification; Recalls) and XVII (Dispute Resolution), and Sections 2.7, 4.10, 4.11 (to the extent required by applicable Law), Sections 6.2-6.5 and 7.1-7.3 (with respect to milestone payments and royalty payments accruing prior to, but not yet paid as of, the effective date of termination); 7.4 (for a period of three (3) years from the end of the calendar quarter in which termination or expiration occurs, or if later, (3) years after the last relevant payment was made under this Agreement), Sections 10.1-10.3, 10.4 (to the extent any Confidential Information of Ono would be included in any publication of Data pursuant to Section 10.4), 10.5 (to the extent any Confidential Information of Ono would be included in any abstract, slide presentation or poster pursuant to Section 10.5) ; 11.1(a)-(c), 11.2(b), 11.3 (with respect to any enforcement actions being prosecuted by Ono as of the effective date of termination, but only until such enforcement action can be assumed by Array), 12.6 (with respect to Ono's obligation to transfer or withdraw registration of Internet domain names registered by Ono pursuant to this section and Array's ownership and other rights with respect to the Domain Names), 18.3, 18.7, 18.8, 18.13 and 18.14 and, in addition, any other provisions of this Agreement shall survive solely for so long as, and to the extent, reasonably necessary to enable Ono to perform its obligations under Section 14.2, and to the extent that any Product is sold during the period defined in Section 14.2(a)(ii) above, Sections 6.2-6.4 and 7.1-7.3 shall apply to such sales and Array's information, audit an inspection rights under Sections 4.7(b) and 4.9 shall continue to apply. + +14.6 Rights in Bankruptcy. The Parties acknowledge and agree that all rights and licenses granted under or pursuant to this Agreement to Ono or Array are, and shall otherwise be deemed to be, for purposes of Section 365(n) of the United States Bankruptcy Code and other similar foreign Laws, licenses of rights to "intellectual property" as defined under Section 101 of the United States Bankruptcy Code or other similar foreign Laws. The Parties agree that the Parties shall retain and may fully exercise all of their rights and elections under the United States Bankruptcy Code, Article 53 and 56 of the Japanese bankruptcy Law (or any comparable provision of Japanese Laws applicable to bankruptcies or insolvencies), and other similar foreign Laws. The Parties further agree that, in the event of the commencement of a bankruptcy proceeding by or against a Party under the United States Bankruptcy Code, the non debtor Party shall be entitled to a complete duplicate of (or complete access to, as + +70 + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +appropriate) any such intellectual property and all embodiments of such intellectual property and the same, which, if not already in the non debtor Party's possession, shall be promptly delivered to it (a) upon any such commencement of a bankruptcy proceeding upon the non debtor Party's written request therefor, unless the debtor Party continues to perform all of its obligations under this Agreement or (b) if not delivered under clause (a) above, following the rejection of this Agreement by or on behalf of the debtor Party upon written request therefor by the non debtor Party. Similarly, the Parties agree that, to the maximum extent permitted by applicable Law, in any bankruptcy proceeding by or against a Party under the Japanese bankruptcy Law, the non debtor Party shall retain the licenses and other rights granted to it under Article II hereof and may continue to exercise such rights in accordance with the terms and conditions of this Agreement, irrespective of whether or not the debtor Party elects to rescind this Agreement pursuant to Article 53 of the Japanese bankruptcy Law (or any comparable provision of other Japanese Laws applicable to bankruptcies or insolvencies). + +ARTICLE XV + +REPRESENTATIONS, WARRANTIES AND COVENANTS + +15.1 Mutual Covenants, Representations and Warranties. Each Party covenants, represents and warrants to the other Party that, as of the Effective Date: + +(a) it is a corporation duly organized, validly existing and is in good standing under the Laws of the jurisdiction in which it is incorporated, is qualified to do business and is in good standing as a foreign corporation in each jurisdiction in which the conduct of its business or the ownership of its properties requires such qualification and failure to have such would prevent the Party from performing its obligations under this Agreement; + +(b) this Agreement is a legal and valid obligation binding upon the Party and enforceable in accordance with its terms. + +(c) the execution, delivery and performance of this Agreement by the Party has been duly authorized by all necessary corporate action and does not and will not: (i) require the consent or approval of the Party's stockholders; (ii) to its knowledge, violate any Law, rule, regulation, order, writ, judgment, decree, determination or award of any court, governmental body or administrative or other agency having jurisdiction over the Party; nor (iii) conflict with, or constitute a default under, any agreement, instrument or understanding, oral or written, to which it is a party or by which it is bound; + +(d) it has the full right and authority to grant the rights and licenses granted herein; + +71 + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +(e) all necessary consents, approvals and authorizations of all Regulatory Authorities, other Governmental Authorities and other persons or entities required to be obtained by it in order to enter into this Agreement have been obtained; + +(f) it, its subsidiaries, and its Affiliates are in compliance with, and at all times during the term of this Agreement shall remain in compliance with, all applicable antibribery or anticorruption Laws. Neither such Party nor any of its subsidiaries, or Affiliates has, or will, authorize, offer, promise, or make payments or otherwise provide anything of value directly or indirectly to: (i) an executive, official, employee or agent of a government, governmental department, agency or instrumentality, (ii) a director, officer, employee or agent of a wholly or partially government-owned or controlled entity, (iii) a political party or official thereof, or candidate for political office, or (iv) an executive, official, employee or agent of a public international organization (e.g., the International Monetary Fund or the World Bank) ("Government Official") for purposes of (A) (i) improperly influencing any act or decision of such Government Official in his or her official capacity, (ii) inducing such Government Official to do or omit to do any act in violation of the lawful duty of such Government Official, or (iii) securing any improper advantage; or (B) inducing such Government Official improperly to use his or her influence in order to assist it or any of its subsidiaries in obtaining or retaining business or to direct business to any person. Neither Party shall, during the term of this Agreement, provide anything of value to any person that may be considered a bribe, kickback, an illegal influence payment, or other illegal payment. + +15.2 Representations and Warranties of Array. Array represents, warrants to Ono that, as of the Effective Date: + +(a) Array has not previously granted any right, license or interest in or to the Array Patents, the Array Know-How, or the Product Trademarks or any portion thereof, that is in conflict with the rights or licenses granted to Ono under this Agreement; + +(b) there are no actual, pending, or, to Array's knowledge, alleged or threatened action, suits, claims, interference or governmental investigations involving a Product (including with respect to the manufacturing of a Product), the Array Patents, the Array Know-How or the Product Trademarks listed on Exhibit 1.56 by or against Array, or any of its Affiliates or, to Array's knowledge, Third Party Partners; + +(c) Array has not brought a claim alleging an infringement by a Third Party of any of the Array Patents or the Array Know-How; + +(d) to Array's knowledge, there is no actual, alleged or threatened infringement by a Third Party of any of the Array Patents or the Array Know-How; + +72 + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +(e) to Array's knowledge, none of the issued Array Patents are invalid or unenforceable; + +(f) the Array Patents in the Ono Territory listed on Exhibit 1.5 constitute a true, accurate and complete list of all Patents in the Ono Territory in existence as of the Effective Date that are Controlled by Array and relate to the Products, indicating the owner, licensor and/or co-owner(s) thereof if any such Array Patent is not, solely owned by Array; + +(g) to Array's knowledge, Array and its Affiliates (i) have generated, prepared, and maintained all material Regulatory Filings in the Ono Territory in accordance with applicable Law and (ii) have conducted (and each of their respective Subcontractors and consultants have conducted) all Development of the Products in the Ono Territory in accordance with applicable Law; + +(h) to Array's knowledge, all material information with respect to the safety and efficacy of Encorafenib and Binimetinib has been provided or made available to Ono prior to the Effective Date through on site due diligence, in the electronic data room to which access was provided to Ono in connection with the negotiation of this Agreement or by other means. In addition, to Array's knowledge, there are no, and there have been no, material safety issues relating to Encorafenib or Binimetinib as of the Effective Date that have been provided or made available to Ono prior to the Effective Date through on site due diligence, in the electronic data room to which access was provided to Ono in connection with the negotiation of this Agreement or by other means. With respect to any information provided by Array to Ono prior to the Effective Date relating to the on-going Clinical Studies, Ono acknowledges and agrees that such information is partial, preliminary, and will not be finalized until the completion of data analysis, lock and transfer. Array is not aware of any fact or circumstance that would reasonably be expected to materially adversely affect the acceptance or the subsequent approval, by any Regulatory Authority of any filing, application or request for Marketing Approval; + +(i) Array and its Affiliates, and to Array's knowledge, its Subcontractors and PFM, have conducted all Development of the Products in accordance with applicable Law, including where required by applicable Law, in accordance good laboratory and clinical practice; and + +(j) Array is the sole and exclusive owner, the co-owner, or exclusive licensee with respect to the Products of all of the Array Patents listed in Exhibit 1.5, or the Product Trademarks listed on Exhibit 1.56 free from encumbrances and, with respect to Patents owned or co-owned by Array, is, listed in the records of the appropriate Governmental Authorities as the sole and exclusive owner or the co-owner of the Array Patents and has the right to grant to Ono the rights granted herein with the respect to the Array Know-How. + +15.3 Additional Covenants: Each Party hereby covenants as of the Effective Date, as follows: + +73 + + + + + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +(a) during the period from the Effective Date through the end of the term of this Agreement, such Party shall obtain (to the extent that it has not already obtained) from each of its employees, and from each of its Affiliates and Subcontractors who are or will be involved in the Manufacture of the Product or who are participating in the Development of the Product (and Ono shall obtain from each of its Sublicensees), rights to any and all scientific, medical, technical, manufacturing, marketing, regulatory, market access and other information (including clinical data and other related information generated in compliance with CDISC standards) generated pursuant to the above described activities and relating to Binimetinib, Encorafenib, the Products and/or the Companion Diagnostic, such that each Party shall, by virtue of this Agreement, receive from the other Party the licenses and other rights to which it is entitled hereunder (and such that the scope of such licenses and other rights are not limited in scope or exclusivity by a failure to obtain such rights from such persons); + +(b) Neither Party shall (i) employ, or use a Subcontractor or consultant that employs, any individual or entity that has been debarred by the FDA (or is subject to a similar sanction of the EMA or PMDA), or (ii) employ or use a Subcontractor or consultant that employs any individual or entity that is the subject of an FDA debarment investigation or proceeding (or similar proceeding of the EMA or PMDA); + +(c) Neither Party, nor any of its Affiliates, nor any of its or their respective officers or employees (i) will commit an act, (ii) will make a statement or (iii) will fail to act or make a statement, in any case ((i), (ii), or (iii)), that (A) would constitute a fraudulent statement to the FDA, PMDA or any other Regulatory Authority with respect to the Development, Manufacture or Commercialization or use of the Products or (B) could reasonably be expected to provide a basis for the FDA, the PMDA or any other Regulatory Authority to invoke its policy respecting "Fraud, Untrue Statements of Material Facts, Bribery and Illegal Gratuities", set forth in 56 Fed. Reg. 46191 (September 10, 1991) and any amendments thereto or any analogous laws or policies in the Ono Territory, with respect the Development, Manufacture, Commercialization or use of Products; and + +(d) Neither Party shall bring any claim or pursue any remedy against the other Party for breach of any of such other Party's covenants, representations or warranties under this Article 15 to the extent that the first Party had knowledge that such other Party was in breach of such representations or warranties as of the Effective Date. + +15.4 Except as otherwise expressly set forth in this Agreement, neither Party makes any representation or extends any warranties of any kind either express or implied, including, but not limited to, warranties of merchantability, fitness for a particular purpose, noninfringement or validity of any patents issued or pending + +74 + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +ARTICLE XVI + +INDEMNIFICATION; RECALLS + +16.1 Indemnification of Array. Ono shall indemnify and hold harmless each of Array, its Affiliates and the directors, officers and employees of such entities and the successors and assigns of any of the foregoing (the "Array Indemnitees"), from and against any and all liabilities, damages, penalties, fines, costs, expenses (including, reasonable attorneys' fees and other expenses of litigation) ("Liabilities") from any claims, actions, suits or proceedings brought by a Third Party (a "Third Party Claim") incurred by any Array Indemnitee, arising from, or occurring as a result of: (a) the use, marketing, distribution, importation or sale of any Product by Ono, its Affiliates or Sublicensees in the Ono Territory, including any Products Liability Claim arising therefrom; (b) injury or death of patients participating in any Clinical Studies conducted by or on behalf of Ono anywhere in the world, including any Products Liability Claim arising therefrom, (c) injury or death of patients participating in Clinical Studies conducted under any Joint Development Plan and sponsored by or on behalf of Ono, including any Products Liability Claim arising therefrom, and (d) any breach of any representations, warranties or covenants by Ono in Article 15 above; except to the extent such Third Party Claims result from the gross negligence or willful misconduct of an Array Indemnitee. + +16.2 Indemnification of Ono. Array shall indemnify and hold harmless each of Ono, its Affiliates and Sublicensees and the directors, officers and employees of Ono, its Affiliates and Sublicensees and the successors and assigns of any of the foregoing (the "Ono Indemnitees"), from and against any and all Liabilities from any Third Party Claims incurred by any Ono Indemnitee, arising from, or occurring as a result of: (a) the use, marketing, distribution. importation or sale of any Product by Array, its Affiliates or licensees in the Array Territory (or following termination of this Agreement, anywhere in the world), including any Products Liability Claim; (b) injury or death of patients participating in any Clinical Studies conducted by or on behalf of Array anywhere in the world, including any Products Liability Claim arising therefrom, (c) injury or death of patients participating in Clinical Studies conducted under any Joint Development Plan and sponsored by or on behalf of Array, including any Products Liability Claim arising therefrom, and (d) any breach of any representations, warranties or covenants by Array in Article 15 above, except to the extent such Third Party Claims result from the gross negligence or willful misconduct of a Ono Indemnitee. + +16.3 Procedure. A Party that intends to claim indemnification under this Article 16 (the "Indemnitee") shall promptly notify the other Party (the "Indemnitor") in writing of any Third Party Claim, in respect of which the Indemnitee intends to claim such indemnification, and the Indemnitor shall have sole control of the defense and/or settlement thereof provided that the Indemnitor shall keep the Indemnitee regularly informed of the status of the defense of the Third Party Claim and shall take into consideration the Indemnitee's reasonable comments thereon. The indemnity arrangement in this + +75 + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +Section 16.3 shall not apply to amounts paid in settlement of any action with respect to a Third Party Claim, if such settlement is effected without the consent of the Indemnitor, which consent shall not be withheld or delayed unreasonably. The failure to deliver written notice to the Indemnitor within a reasonable time after the commencement of any action with respect to a Third Party Claim, if prejudicial to its ability to defend such action, shall relieve such Indemnitor of any liability to the Indemnitee under this Section 16.3, but the omission to so deliver written notice to the Indemnitor shall not relieve the Indemnitor of any liability that it may have to any Indemnitee otherwise than under this Section 16.3. The Indemnitee under this Section 16.3 shall cooperate fully with the Indemnitor and its legal representatives in the investigation of any action with respect to a Third Party Claim covered by this indemnification. + +16.4 Allocation. In the event a claim falls with the scope of the indemnity given by each Party, any payments in connection with such claim shall be apportioned between the Parties in accordance with the degree of fault attributable to each Party. + +16.5 Disclaimer of Liability for Consequential Damages. UNLESS EXPRESSLY PROVIDED HEREUNDER, IN NO EVENT SHALL EITHER PARTY OR ANY OF ITS RESPECTIVE AFFILIATES AND THEIR RESPECTIVE OFFICERS, DIRECTORS AND EMPLOYEES BE LIABLE UNDER THIS AGREEMENT FOR SPECIAL, INDIRECT, PUNITIVE, INCIDENTAL OR CONSEQUENTIAL DAMAGES SUFFERED BY THE OTHER PARTY UNDER THIS AGREEMENT, OF ANY KIND WHATEVER AND HOWEVER CAUSED, AND WHETHER BASED ON AN ACTION OR CLAIM IN CONTRACT, TORT (INCLUDING NEGLIGENCE), BREACH OF STATUTORY DUTY OR OTHERWISE, AND EVEN IF FORESEEABLE OR SUFFERED IN CIRCUMSTANCES WHERE A PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH LOSSES. NOTWITHSTANDING THE FOREGOING, NOTHING IN THIS SECTION 16.5 IS INTENDED TO OR SHALL LIMIT OR RESTRICT THE AMOUNTS PAYABLE TO THIRD PARTIES UNDER THE INDEMNITIES PROVIDED PURSUANT TO ARTICLE 10, SECTIONS 16.1 AND 16.2 ABOVE; PROVIDED, FURTHER, THAT THE FOREGOING LIMITATION OF LIABILITY SHALL NOT APPLY IN THE CASE OF GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. + +16.6 Recalls. To the extent that: (i) any Regulatory Authority in the Ono Territory issues a directive or order that the Product be recalled or withdrawn in any country within the Ono Territory; (ii) a court of competent jurisdiction orders a recall or withdrawal of the Product in any country within the Ono Territory, or (iii) the Parties mutually agree, or a Party reasonably determines and the JCC or JDRC agrees, that the Product should be recalled or withdrawn voluntarily in any country within the Ono Territory, the Parties shall recall or withdraw the Product in such country as set forth in this Section 16.6. As between the Parties, Ono shall control and coordinate all activities that Ono reasonably believes to be necessary in connection with such recall or withdrawal of the Product in the Ono Territory, including + +76 + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +making all contact with relevant Regulatory Authorities; provided, however, that Ono shall not take any action with respect to any such recall without first consulting in good faith with Array and obtaining approval of the JDRC, to the extent practicable, and Ono shall consider in good faith any comments of Array in connection with any aspect of the management of any such recall. For clarity, all matters relating to a withdrawal or recall of the Product in the Array Territory shall, as between the Parties, be determined, controlled and coordinated by Array. + +ARTICLE XVII DISPUTE RESOLUTION + +17.1 Referral to Senior Executives. The Parties recognize that disputes as to certain matters relating to this Agreement may from time to time arise during the term of this Agreement. Any such dispute which cannot be resolved by good faith negotiations shall be referred, by written notice from either Party to the other, to the Senior Executives (or their respective designees) for resolution. The Senior Executives (or their respective designees) shall negotiate in good faith to resolve such dispute through discussions promptly following such written notice. If the Senior Executives cannot resolve the dispute within forty-five (45) days of such written notice, or either Party concludes that the matter will not be so resolved, then, (a) with respect to disputes or decisions regarding matters described in Section 17.2(a), the provisions set forth in Section 17.2 shall apply, and (b) with respect to all other disputes, the provisions of Section 17.3 shall apply. If the Parties should resolve such dispute pursuant to the procedures in this Section 17.1, a memorandum setting forth their agreement will be prepared and signed by both Parties, if requested by either Party. + +17.2 Resolution of Certain Disputes. + +(a) Application to Certain Disputes. The provisions of this Section 17.2 shall apply with respect to any dispute that has not been resolved following referral to Senior Executives described in Section 17.1, where such dispute concerns any matter (i) to be decided by the JDRC or JCC and for which a different means of resolution (e.g., a deciding vote of either Party) is not specified pursuant to Section 3.5 above, or (ii) that is otherwise expressly provided for in this Agreement to be resolved pursuant to this Section 17.2 (each of the foregoing cases referred to as an "Expert Dispute"). + +(b) Resolution by Experts. If the Parties do not reach a mutually acceptable resolution as to an Expert Dispute following referral to Executive Officers described in Section 17.1, then upon written notice by either Party (an "Expert Resolution Notice"), the Expert Dispute shall be resolved by a final, binding determination by independent experts in the manner described in this Section 17.2. + +77 + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +(c) Selection of Experts. Each Party shall select an independent Third Party expert who is neutral, disinterested and impartial, is not affiliated with either Party, has expertise and experience relevant to the specific subject matter of the particular Expert Dispute, and does not have a conflict of interest, and two experts so elected shall elect the third expert with qualification as set forth above (the three experts so selected, the "Experts"). Once the Experts have been selected, each Party shall, in accordance with mutually agreed timelines and procedures, but in no event later than fifteen (15) Business Days from the selection of the Experts, provide the Experts and the other Party with a written report setting forth its position with respect to the substance of the Expert Dispute and may submit a revised or updated report and position to the Experts as mutually agreed or as determined by the Experts. If so requested by the Experts, each Party shall make oral submissions to the Experts based on such Party's written report delivered pursuant to this Section 17.2(c), and each Party shall have the right to be present during any such oral submissions. + +(d) Determination by the Experts. The Experts shall, no later than ten (10) Business Days after the last submission of the written reports and, if any, oral submissions, select one of the Parties' positions as their final decision, and shall not have the authority to modify either Party's position or render any substantive decision other than to so select the position of either Ono or Array as set forth in their respective written report (as initially submitted, or as revised in accordance with Section 17.2(c), as applicable). The Parties agree that the decision of the Experts shall be the sole, exclusive and binding remedy between them regarding any Expert Dispute presented to the Experts, provided that the Experts' decision with respect to disputes referred to it pursuant to Section 3.5 shall become the decision of the JDRC on the matter for all purposes of this Agreement. The proceedings and the decision of the Experts shall not be made public without the joint consent of the Parties and each Party shall maintain the confidentiality of such proceedings and decision unless each Party otherwise agrees in writing; provided that either Party may make such disclosures as are permitted for Confidential Information of the other Party under Article 10 above. + +(e) Timetable for Completion in Thirty (30) business days. The Parties shall use, and shall direct the Experts to use, diligent efforts to resolve any Expert Dispute within thirty (30) Business Days after the selection of the Experts, or if resolution within thirty (30) Business Days is not reasonably achievable, as determined by the Experts, then as soon thereafter as is reasonably practicable, provided that the Experts shall resolve the Expert Dispute no later than ninety (90) Business Days after the selection of the Experts. + +17.3 Arbitration. Except with respect to (i) those matters subject to determination by the Experts as provided in Section 17.2, or (ii) any dispute between the Parties concerning the inventorship of intellectual property rights for which either Party may pursue such remedies as it may deem necessary + +78 + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +or appropriate, any dispute arising out of or in connection with this Agreement (each, a "Dispute") shall be exclusively resolved by final and binding arbitration as follows: + +(a) Arbitration under the ICC Rules of Arbitration. The arbitration shall be conducted by three (3) arbitrators according to the ICC Rules of Arbitration ("Rules"), and the panel of three arbitrators so selected is referred to herein as the "Arbitration Tribunal." The seat of the arbitration shall be in Osaka, Japan, if it is demanded by Array, and in New York, NY, USA, if it is demanded by Ono, with hearings to held in the same location. The Emergency Arbitrator Provisions shall not apply. + +(b) Conduct of the proceedings. The language of arbitration shall be English. If so requested by the Arbitration Tribunal, any documents originally in a language other than English shall be submitted with an English translation. The Arbitration Tribunal shall have the authority to order document production taking guidance from the applicable rules under the laws of the seat of the arbitration. If the tribunal orders production of documents, the tribunal shall take guidance from the IBA Rules on the Taking of Evidence in International Arbitration as current on the dated the commencement of the arbitration. The Parties wish to avoid a costly and time-consuming discovery exercise. The Arbitration Tribunal shall have the power to appoint one or more experts after having consulted with the Parties. For the avoidance of doubt, the governing law set forth in Section 18.3 shall not apply to determine any procedural issues. In particular, but without in any way restricting the generality of the foregoing, the Parties agree that the procedural rules of the governing law set forth in Section 18.3 shall not apply with respect to document production or other evidentiary issues, except that all privileges restricting disclosure established under such governing law shall apply and may be invoked by both Parties + +(c) Time limit for rendering the award. The Parties and the Arbitration Tribunal shall endeavor to complete any arbitration within twelve (12) months following the full constitution of the Arbitration Tribunal. However, this period is not a deadline and failure to render an award within them shall not be a ground for annulment of an award. + +(d) Decision of the Arbitration Tribunal. Every award shall be binding on the Parties. By submitting the dispute to arbitration under the Rules, the Parties undertake to carry out any award without delay and shall be deemed to have waived their right to any form of recourse insofar as such waiver can validly be made. The Parties agree that they can seek recognition and enforcement of any order and/or award made by the Arbitration Tribunal before any competent court. The Arbitration Tribunal shall have no authority to award punitive damages or other damages exceeding the damages actually suffered by the prevailing Party, and may not, in any event, make any ruling, finding or award that does not conform to the provisions of this Agreement. The fees and expenses of the Arbitration Tribunal (the translation fee described Section 17.3 (b) shall be + +79 + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +included) shall be shared equally by the Parties, and each Party shall bear its own expenses incurred in connection with the proceeding, in each case unless the Arbitration Tribunal in the award assesses such fees and/or expenses against one of the Parties or allocates such fees and expenses other than equally between the Parties. + +(e) Confidentiality. The existence and content of the Arbitration proceedings and any rulings or award shall be deemed Confidential Information of both Parties hereunder and kept confidential by the Parties and members of the Arbitration Tribunal except (i) where such disclosure is permitted under Article 10 of this Agreement, (ii) to the extent that disclosure may be required of a Party to fulfil a legal duty, protect or pursue a legal right, or enforce or challenge an award in bona fide legal proceedings before a state court or other judicial authority, (iii) with the consent of all Parties made in writing subsequently to this Agreement, (iii) where needed for the preparation or presentation of a claim or defense in this arbitration, (iv) where such information is already in the public domain other than as a result of a breach of this clause, or (v) by order of the Arbitration Tribunal upon application of a Party. + +(f) Non-Disclosure of Communications with Internal Counsel. Notwithstanding any rights to the contrary under applicable procedural or substantive rules of Law, any communications exchanged between members of each Party's respective legal department and directors, employees or agents in connection with any disputes, investigations, administrative or other proceedings, shall not be requested, produced or otherwise used, to the extent such communications would have been covered by legal privilege and not disclosable, had these communications been exchanged between such Party and its external attorneys. + +(g) Interim Relief. The Arbitration Tribunal shall have the power to grant any remedy or relief that it deems appropriate, whether provisional or final, including but not limited to conservatory relief and injunctive relief, and any such measures ordered by the Arbitration Tribunal shall, notwithstanding anything to the contrary in the governing law selected by the Parties pursuant to Section 18.3, be deemed to be a final award on the subject matter of the measures and shall be enforceable as such. Each Party retains the right to apply to any court of competent jurisdiction for provisional and/or conservatory relief, including injunctions or temporary restraining orders before or after the constitution of the Arbitration Tribunal, and any such request shall not be deemed incompatible with the Agreement to arbitrate or a waiver of the right to arbitrate. + +ARTICLE XVIII + +GENERAL PROVISIONS + +18.1 Force Majeure. If the performance of any part of this Agreement (except for any payment obligation under this Agreement) by either Party is prevented, restricted, interfered with or delayed by + +80 + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +reason of any cause beyond the reasonable control of such Party (including, fire, flood, earthquake, tsunami, embargo, power shortage or failure, acts of war, insurrection, riot, terrorism, strike, lockout or other labor disturbance, acts of God or any acts, omissions or delays in acting of the other Party), the Party so affected shall, upon giving written notice to the other Party, be excused from such performance to the extent of such prevention, restriction, interference or delay; provided that the affected Party shall use its reasonable efforts to avoid or remove such causes of non-performance and shall continue performance with the utmost dispatch whenever such causes are removed. + +18.2 Hardship. Should the occurrence of events not contemplated by the Parties fundamentally after the equilibrium of the present contract thereby placing an excessive burden on one of the Parties in the performance of its contractual obligations, that Party may proceed as follows: The party shall make a request for revision within a reasonable time from the moment it become aware of the event and of its effect on the economy of the present contract. The request shall indicate the grounds on which it is based. The Parties shall then consult one another with a view to revising the contract an equitable basis, in order to ensure that neither Party suffers excessive prejudice. The request for revision does not of itself suspend performance of the contract. If the Parties fail to agree on the revision of the contract within time limit of ninety (90) business days of the request, the contract remains in force in accordance with its original terms. + +18.3 Governing Law. This Agreement and all questions regarding its validity or interpretation, or the breach or performance of this Agreement, shall be governed by, and construed and enforced in accordance with, the laws of the State of New York, United States, without reference to conflict of law principles. The Parties hereby agree that the provisions of the United Nations Convention on Contracts for the International Sale of Goods shall not apply to this Agreement and are strictly excluded. + +18.4 Waiver of Breach. The failure of either Party at any time or times to require performance of any provision hereof shall in no manner affect its rights at a later time to enforce the same. No waiver by either Party of any condition or term in any one or more instances shall be construed as a further or continuing waiver of such condition or term or of another condition or term. + +18.5 Modification. No amendment or modification of any provision of this Agreement shall be effective unless in writing signed by both Parties hereto. No provision of this Agreement shall be varied, contradicted or explained by any oral agreement, course of dealing or performance or any other matter not set forth in an agreement in writing and signed by both Parties hereto. + +18.6 Severability. In the event any provision of this Agreement should be held invalid, illegal, or unenforceable in any jurisdiction, the Parties shall negotiate in good faith a valid, legal and enforceable substitute provision that most nearly reflects the original intent of the Parties and all other provisions of this Agreement shall remain in full force and effect in such jurisdiction. Such invalidity, illegality + +81 + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +or unenforceability shall not affect the validity, legality or enforceability of such provision in any other jurisdiction. + +18.7 Entire Agreement; Amendments. This Agreement (including the Exhibits attached hereto), together with the pharmacovigilance agreement specified in Section 4.11(b), the Quality Agreement, and the Supply Agreement (in each case, when executed) constitute the entire agreement between the Parties relating to the subject matter hereof and supersede all prior and contemporaneous agreements, representations and/or understandings, including the Confidentiality Agreement between the Parties dated August 26, 2016. No terms or provisions of this Agreement shall be varied or modified by any prior or subsequent statement, conduct or act of either of the Parties, except that the Parties may amend this Agreement by written instruments specifically referring to and executed in the same manner as this Agreement. + +18.8 Notices. Unless otherwise agreed by the Parties or specified in this Agreement, all communications between the Parties relating to, and all written documentation to be prepared and provided under, this Agreement shall be in the English language. Any notice required or permitted under this Agreement shall be in writing in the English language, and (a) delivered personally, (b) sent by air mail or express courier service providing evidence of receipt, postage pre-paid where applicable, or (c) by electronic transmission or facsimile (complete transmission confirmed and a copy promptly sent by another permissible method of providing notice described in paragraph (a) or (b) above), to the following addresses of the Parties (or such other address for a Party as may be specified by like notice): + +To Array: + +Array BioPharma Inc. 3200 Walnut Street Boulder, CO 80301 USA Attn: Chief Operating Officer + +To Ono: + +Ono Pharmaceutical Co., Ltd. 8-2, Kyutaromachi 1-chome, Chuo-ku, Osaka, 541-8564, Japan Attn: Director, License + +With a copy to (which shall not constitute notice): + +Array BioPharma Inc. 3200 Walnut Street Boulder, CO 80301 USA Attn: General Counsel + +With a copy to (which shall not constitute notice): + +Ono Pharmaceutical Co., Ltd. 8-2, Kyutaromachi 1-chome, Chuo-ku, Osaka, 541-8564, Japan Attn: General Manager, Legal Department + +Any notice required or permitted to be given concerning this Agreement shall be effective upon receipt by the Party to whom it is addressed. Notices given by the condition (b) shall be deemed to have been received seven business days after mailing or posting and notices given by the condition (c) shall be deemed to have been received on the first Business Day following its dispatch. + +82 + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +18.9 Assignment. This Agreement may not be assigned by either Party to any Third Party without the written consent of the other Party hereto; except either Party may assign this Agreement without the other Party's consent to an entity that acquires substantially all of the business or assets of the assigning Party, whether by merger, acquisition or otherwise; provided that the acquiring party agrees in a writing delivered to the non-assigning Party to assume all of the rights and obligations of the assigning Party under this Agreement. In addition, either Party shall have the right to assign this Agreement to an Affiliate, with the prior written consent of the other Party (which shall not be unreasonably withheld or delayed); provided that the assigning Party guarantees the performance of this Agreement by such Affiliate and such Affiliate agrees in a writing delivered to the non-assigning Party to assume all of the rights and obligations of the assigning Party under this Agreement; and further provided that if the non- assigning Party reasonably believes such assignment could result in material adverse tax consequences to the non-assigning Party, the non-assigning Party shall have no obligation to consent to the proposed assignment. For clarity, any assignment of this Agreement shall be without prejudice to any required review by the relevant competition law authorities. Subject to the foregoing, this Agreement shall inure to the benefit of each Party, its successors and permitted assigns. Any assignment of this Agreement in contravention of this Section 18.9 shall be null and void. + +18.10 Change in Control. In the event of a Change in Control of Array in which the Acquirer is developing or commercializing [ * ] in the Field, any Development and Commercialization of a [ * ], Binimetinib and/or Encorafenib combination by the Parties shall be conducted subject to appropriate firewall procedures to segregate such activities (and the personnel conducting such activities) from the activities performed by or on behalf of Acquirer with respect to [ * ] it is developing or commercializing, to ensure that [ * ] is disclosed to employees of the Acquirer who are developing or commercializing the Acquirer's [ * ]. + +18.11 Performance. Unless expressly otherwise provided hereunder, each Party or its Affiliates may perform its obligations hereunder through its Affiliates or Subcontractors, provided that such Party shall have entered into a written agreement (a "Subcontract") with its Subcontractors which shall be consistent with the terms and conditions of this Agreement, shall contain confidentiality provisions no less restrictive than those set forth in Article 10. Additionally, to the extent that such Subcontractor shall be responsible for performance of any Development activities undertaken in accordance with this Agreement, then the applicable Subcontract shall contain a certification that such Subcontractor has not been debarred, and is not subject to debarment, pursuant to Section 306 of the United States Federal Food, Drug and Cosmetics Act (or similar Laws of any other country), and is not the subject of a conviction described in such section. Notwithstanding the foregoing, the subcontracting Party (or Party whose Affiliate enters into a Subcontract) shall remain liable under this Agreement for the performance of all its obligations under this Agreement and shall be responsible for and liable for compliance by its Subcontractors with the applicable provisions of this Agreement. + +83 + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +18.12 No Partnership or Joint Venture. Nothing in this Agreement is intended, or shall be deemed, to establish a joint venture or partnership between Ono and Array. Neither Party to this Agreement shall have any express or implied right or authority to assume or create any obligations on behalf of, or in the name of, the other Party, or to bind the other Party to any contract, agreement or undertaking with any Third Party. + +18.13 Interpretation. The captions to the several Articles and Sections of this Agreement are not a part of this Agreement, but are included for convenience of reference and shall not affect its meaning or interpretation. In this Agreement: (a) the word "including" shall be deemed to be followed by the phrase "without limitation" or like expression; (b) the singular shall include the plural and vice versa; and (c) masculine, feminine and neuter pronouns and expressions shall be interchangeable. Each accounting term used herein that is not specifically defined herein shall have the meaning given to it under generally accepted cost accounting principles, but only to the extent consistent with its usage and the other definitions in this Agreement. This Agreement shall not confer any benefits on any third parties. No third party may enforce any term of this Agreement. The provisions of the Contracts (Rights of Third Parties) Act 1999 are hereby expressly excluded from this Agreement. + +18.14 Counterparts; Other Matters. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. Signatures to this Agreement delivered by facsimile or similar electronic transmission will be deemed to be binding as originals. This Agreement is established in the English language. Any translation in another language shall be deemed for convenience only and shall never prevail over the original English version. + +[Page Signature Follows] + +84 + + + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +CONFIDENTIAL + +EXECUTION VERSION + +IN WITNESS WHEREOF, the Parties have executed this Development and Commercialization Agreement as of the Effective Date. + +ARRAY BIOPHARMA INC. + +BY: _______________________________ + +NAME: Ron Squarer + +TITLE: Chief Executive Officer + +ONO PHARMACEUTICAL CO., LTD. + +BY: _______________________________ + +NAME: Gyo Sagara + +TITLE: President, Representative Director and CEO + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +CONFIDENTIAL + +EXECUTION VERSION + +EXHIBIT 1.5 + +ARRAY PATENTS + +[ * ] + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +CONFIDENTIAL + +EXECUTION VERSION + +EXHIBIT 1.7 + +BINIMETINIB + +[ * ] + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +CONFIDENTIAL + +EXECUTION VERSION + +EXHIBIT 1.22 + +ENCORAFENIB + +[ * ] + + + + + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +CONFIDENTIAL + +EXECUTION VERSION + +EXHIBIT 1.37 + +IST GUIDELINES + +[ * ] + +EXHIBIT 1.56(a) + +BINIMETINIB PRODUCT TRADEMARKS + +[ * ] + +EXHIBIT 1.56(b) + +ENCORAFENIB PRODUCT TRADEMARKS + +[ * ] + +EXHIBIT 4.1 EXISTING CLINICAL STUDIES + +Phase III Trials: + +BEACON CRC Trial / NCT02928224 "Phase 3 Randomized Encorafenib plus Cetuximab vs. Irinotecan A Multicenter, Randomized, Open-label Phase 3 Study of Encorafenib + Cetuximab +/- Binimetinib vs. Irinotecan + Cetuximab with a Safety Lead-in of Encorafenib + Binimetinib + Cetuximab in Patients with BRAF V600E-mutant Metastatic Colorectal Cancer" COLUMBUS Trial / NCT01909453 "A 2-part phase III randomized, open label, multicenter study of LGX818 plus MEK162 versus vemurafenib and LGX818monotherapy in patients with unresectable or metastatic BRAF V600 mutant melanoma" NEMO Trial / NCT01763164 "A Randomized Phase III, Open Label, Multicenter, Two- arm Study Comparing the Efficacy of MEK162 Versus Dacarbazine in Patients With Advanced Unresectable or Metastatic NRAS Mutation-positive Melanoma" MILO Trial / NCT01849874 " A Multinational, Randomized, Open-label Phase 3 Study of MEK162 vs. Physician's Choice Chemotherapy in Patients with Recurrent or Persistent Low-grade Serous + + + + + +Carcinomas of the Ovary, Fallopian Tube or Primary Peritoneum" [ * ] [ * ] + +EXHIBIT 12.6 + +DOMAIN NAMES + +[ * ] \ No newline at end of file diff --git a/full_contract_txt/ArtaraTherapeuticsInc_20200110_8-K_EX-10.5_11943350_EX-10.5_License Agreement.txt b/full_contract_txt/ArtaraTherapeuticsInc_20200110_8-K_EX-10.5_11943350_EX-10.5_License Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..e4f1dc3622debfc31c20d31d63cebb8f0552f3d2 --- /dev/null +++ b/full_contract_txt/ArtaraTherapeuticsInc_20200110_8-K_EX-10.5_11943350_EX-10.5_License Agreement.txt @@ -0,0 +1,167 @@ +Exhibit 10.5 CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY […***…], HAS BEEN OMITTED BECAUSE ARTARA THERAPEUTICS, INC. HAS DETERMINED THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM TO ARTARA THERAPEUTICS, INC. IF PUBLICLY DISCLOSED. SPONSORED RESEARCH AND LICENSE AGREEMENT This Sponsored Research and License Agreement (this "Agreement") is entered into on November 28, 2018 (the "Effective Date"), by and between ArTara, Inc. located at 1 Little West 12t h Street, New York, NY 10014 ("ArTara"), and The University of Iowa, located at c/o Division of Sponsored Programs, 2 Gilmore Hall, Iowa City, IA 52242 ("University"). ArTara and University may individually be referred to herein as a "Party," and collectively as "Parties." WI T N E S S E T H: WHEREAS, ArTara is engaged in the development of pharmaceutical products for the treatment of serious rare diseases; WHEREAS, University is engaged in clinical research to improve the diagnosis and treatment of lymphangioma (LM) using OK-432 (as defined below), a pharmaceutical product not approved by regulatory authorities in the United States; WHEREAS, University is engaged in a clinical research Program (as defined below) and with Chugai Pharmaceutical Co., Ltd., 1-1 Nihonbashi 2-Chome, Chuo-ku, Tokyo, 103-8324 Japan, and its wholly-owned subsidiary, Chugai Pharma U.S.A, LLC 300 Connell Drive, Suite 3100, Berkeley Heights, New Jersey 07922 (collectively "Chugai"), the product manufacturer; WHEREAS, Principal Investigator (as defined below) of the Program is an employee of the University and holds the IND (as defined below) approved by the FDA (as defined below) for OK-432 under BB-IND#5266; WHEREAS, ArTara wishes to develop and submit for regulatory approval, TARA-002, a proposed product that will be biosimilar to OK- 432; WHEREAS, ArTara wishes to use the Program Data (as defined below) collected from the Program, conduct research analysis of the Data and potentially rely on said Program Data to support Regulatory Approvals (as defined below) for TARA-002 in the Territory (as defined below); and WHEREAS, the copying, review and analysis of Program Data for the Project (as defined below) contemplated by this Agreement is of mutual interest and benefit to University and ArTara. NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements contained herein, the Parties agree as follows: ARTICLE ONE DEFINITIONS 1.1 "Affiliates" of a person or entity means any other entity which (directly or indirectly) is controlled by, controls or is under common control with such person or entity. For the purposes of this definition, the term "control" (including, with correlative meanings, the terms "controlled by" and "under common control with") as used with respect to an entity will mean (i) in the case of a corporate entity, direct or indirect ownership of voting securities entitled to cast at least fifty percent (50%) of the votes in the election of directors, or (ii) in the case of a non-corporate entity, direct or indirect ownership of at least fifty percent (50%) of the equity interests with the power to direct the management and policies of such entity, provided that if local law restricts foreign ownership, control will be established by direct or indirect ownership of the maximum ownership percentage that may, under such local law, be owned by foreign interests. + +1 + +Source: ARTARA THERAPEUTICS, INC., 8-K, 1/10/2020 + + + + + +1.2 "CRO" means a contract research organization selected by ArTara to assist in the Project as approved by the University and/or Principal Investigator, such approval not to be unreasonably delayed or withheld. 1.3 "FDA" means the United States Food and Drug Administration. 1.4 "Field" means all therapeutic, diagnostic and prophylactic uses of the Product(s). 1.5 "First Commercial Sale" means the first sale for use or consumption for which revenue has been recognized of Product in a country or territory after all required Regulatory Approvals for commercial sale of Product have been obtained in such country or territory. 1.6 "ICH-GCP's" means the International Conference on Harmonization and Good Clinical Practice Guidelines as adopted in the applicable FDA regulations. 1.7 "Indication" means treatment of lymphangioma (also known as lymphatic malformations) in humans. 1.8 "IND" means University filed investigational new drug application on file with the FDA (BB-IND#5266) for OK-432 for the Indication. 1.9 "Net Sales" means, with respect to the Product, the gross invoiced sales price payable to ArTara and/or its Affiliates and their respective licensees and sublicensees for sales anywhere in the world of the Product to a third party, less: (a) discounts (including cash, quantity and patient program discounts), retroactive price reductions, charge-back payments and rebates granted to managed health care organizations or to federal, state and local governments, their agencies, and purchasers and reimbursers or to trade customers; (b) credits or allowances actually, not to exceed the original invoice amount, granted upon claims, damaged goods, rejections or returns of the Product, including the Product returned in connection with recalls or withdrawals; (c) freight out, postage, shipping and insurance charges for delivery of the Product if charged separately and include in the gross receipts; and (d) taxes or duties, excluding income taxes and value-added taxes, levied on, absorbed or otherwise imposed on the sale of the Product, including governmental charges otherwise imposed upon the billed amount, as adjusted for rebates and refunds, provided that such are included in gross receipts and are paid to and/or its Affiliates and their respective licensees and sublicensees. + +2 + +Source: ARTARA THERAPEUTICS, INC., 8-K, 1/10/2020 + + + + + +Net Sales shall be determined in accordance with generally accepted accounting principles, consistently applied. 1.10 "OK-432" means Picibanil (OK-432), a lyophilized mixture of group A Streptococcus pyogenes developed by Chugai and that has been approved by applicable Japanese pharmaceutical regulatory authorities for the treatment of the Indication. 1.11 "Principal Investigator" means Richard Smith, MD 1.12 "Product" shall mean TARA-002 and any similar products. 1.13 "Program" means collectively, the clinical research studies investigating the efficacy and safety of OK-432 for the Indication conducted by Principal Investigator in collaboration with multiple sites in the United States and the University expanded access program performed by Principal Investigator designed to improve the diagnosis and treatment of the Indication using OK-432. 1.14 "Program Data" means the data set forth on Exhibit A including all case reports forms, source data, and safety data in the possession of or available to University arising from the Program and any other data and information included in the IND. 1.15 "Project" shall mean the compilation and available statistical analyses of the Program Data as described in the Project Plan, which is summarized in Section 2.2. 1.16 "Project Documentation" shall mean the documentation created and generated by ArTara and CRO in the conduct of the Project that incorporates or is based upon Program Data. 1.17 "Project Plan" means the plan for the Project mutually agreed upon by the Parties as summarized in Section 2.2. 1.18 "Right of Reference" means the authority to rely upon, and otherwise use, an investigation for the purpose of obtaining Regulatory Approvals, including the ability to make available the underlying raw (source) data from the investigation for audit, if necessary. 1.19 "Regulatory Approvals" means the medical, technical and scientific licenses, registrations, authorizations and approvals (including without limitation, approvals of IND's, New Drug Applications ("NDA's") and equivalents, supplements and amendments, pre- and post- approvals, pricing and third-party reimbursements approvals and labeling approvals) for the development and commercialization of pharmaceutical products. 1.20 "Regulatory Authorities" means any applicable national, regional, state or local regulatory agency, department, bureau, commission, council or other governmental entity, necessary for the development, manufacture, distribution, marketing, promotion, offer for sale, use, import, export or sale of a pharmaceutical product in a regulatory jurisdiction. 1.21 "Regulatory Filings" means collectively, IND's, Product License Applications, Drug Master Files, NDA's, Biological License Applications ("BLAs") including supportive and annual filings and/or any other equivalent or comparable filings as may be required by Regulatory Authorities to obtain Regulatory Approvals. 1.22 "Royalty" means the royalty on Net Sales of Product in the Indication, as set forth in Article Three below. + +3 + +Source: ARTARA THERAPEUTICS, INC., 8-K, 1/10/2020 + + + + + +1.23 "TARA-002" means the ArTara pharmaceutical product intended to be similar to or biosimilar to OK-432. 1.24 "Territory" means worldwide. ARTICLE TWO PROJECT 2.1 Performance of Project. The University and/or Principal Investigator together with ArTara and the CRO will conduct the Project in accordance with the Project Plan and will use all reasonable endeavors consistent with their expertise to successfully complete the Project. It is the goal of the Project to use the Program Data as clinical support for Product Regulatory Filings and to gain approval to commercialize the Product for the Indication in the Territory. 2.2 Project Plan. The Project Plan as approved by each of the Parties may be modified or amended only upon mutual agreement of each of the Parties. The Project will consist of three phases: (a) Phase I: University and/or Principal Investigator will provide access to the Program Data to ArTara and the CRO at the University's facilities. ArTara and the CRO will be allowed to make complete copies of the original Program Data for the purposes of off-site data entry and storage, all as and only to the extent needed to support ArTara's efforts to accomplish the Project. University will provide ArTara and CRO the opportunity to examine the originals of medical records and supporting records for the Program Data at the University during normal business hours and at mutually agreeable times. University and Principal Investigator will also provide to ArTara contact information for other participating investigators and research sites that have contributed data to the Program. University will retain all Program Data for the sooner to occur of a New Drug Application (NDA) for the Product being approved or ten (10) years from the Effective Date. ArTara will bear any costs related to necessary long-term on or off-site storage of the Program Data, medical records and/or supporting records. ArTara understands that separate engagement agreements may be required by collaborating third party entities and associated principal investigators and University will assist ArTara in obtaining such agreements. It is understood that the goal of Phase I is a feasibility analysis of the Program Data to support Regulatory Filings in the United States. (b) Phase II: University recognizes that because of ArTara's unfamiliarity with the Program Data database, assistance from the Principal Investigator and other research and medical employees of the University may from time to time be needed for ArTara to query and analyze the Program Data database as needed to achieve successful presentation to applicable Regulatory Authorities and submission of Regulatory Filings. ArTara will endeavor to minimize University resources required during Phase II. The goal of Phase II will be to compile the Project Documentation. (c) Phase III: CRO will convert Program Data to eCTD format for submission to Regulatory Authorities. University recognizes that ArTara may receive specific data requests from Regulatory Authorities in connection with ArTara's presentations of Program Data to support Regulatory Filings. University will assist ArTara in responding to such requests for data or access to source data from Regulatory Authorities. ArTara agrees to notify University of such requests as soon as is practicable. The goal of Phase III will be filing of a BLA based on Project Documentation and response to Regulatory Authorities. + +4 + +Source: ARTARA THERAPEUTICS, INC., 8-K, 1/10/2020 + + + + + +(d) Phase IV Optional: Upon mutual written agreement of University and ArTara, ArTara may sponsor, and University may conduct, new Product or Product-related clinical studies (for example, follow-up studies) to support the goal of the Project or as may be useful for gaining or maintaining Regulatory Approvals for the Product for the Indication. Any such studies will be at the sole discretion of each Party subject to terms and conditions to be mutually agreed upon in agreements separate from this Agreement. Richard Smith, MD will be given first consideration as a principal investigator for all new Product or Product- related clinical studies, in addition to other sites provided final site selection will be based on the best interest of the Project. (e) Phase V: Publication: Collected data from the Project will be used to write a paper by the University and/or Principal Investigator (the "Publication") as a follow up to the publication in 2009 (Smith MC, Zimmerman MB, Burke DK, Bauman NM, Sato Y, Smith RJ; OK-432 Collaborative Study Group. Efficacy and safety of OK-432 immunotherapy of lymphatic malformations. Laryngoscope. 2009Jan;119(1):107-15. doi: 10.1002/lary.20041. PubMed PMID: 19117316) . ( the "Publication"). The Publication will be in accordance with the terms in Article 5 herein. 2.3 Project Management. During the term of this Agreement, the Principal Investigator and and/or his authorized representative and ArTara authorized representatives will meet as necessary to consult with one another and discuss the progress and results of the Project and any modifications to the Project Plan. Consultation by either Party shall be by means of personal visits, correspondence and telephone calls, all as appear reasonable and necessary and are mutually agreed upon by the Principal Investigator and ArTara. ARTICLE THREE FUNDING AND PAYMENT 3.1 Funding. During the term of the Project in accordance with the Project Plan, ArTara will provide thirty thousand dollars (US $30,000) per year in funding for the Project, taking into consideration the time spent by University employees required for the Project. The Parties agree to discuss in good faith potential additional funding required for completion of the Project as applicable and necessary. 3.2 Approval Milestone based on Data Value: Within forty-five (45) days of an approval of the TARA-002 BLA by the FDA, ArTara will pay a one- time approval milestone to University pursuant to the usefulness of the Program Data in TARA-002's BLA filing, as set forth below: Official Feedback from FDA regarding the Program Data Milestone […***…] $[…***…] […***…] $[…***…] […***…] $[…***…] […***…] […***…] + +5 + +Source: ARTARA THERAPEUTICS, INC., 8-K, 1/10/2020 + + + + + +3.3 Royalties. Royalties will be payable by ArTara on Net Sales of Product in the Indication. ArTara will, no later than […***…] following the close of each calendar quarter, pay tiered Royalties based on annual Net Sales of Product in the Indication as set forth below: + +Annual Net Sales of Product for the Indication Annual Royalty Rate Percent Net Sales + +$0 - $25,000,000 1.75% + +>$25,000,000 - $50,000,000 2.25% + +>$50,000,000 2.50% + +3.4 Royalty Reduction. In the event the Regulatory Authorities determine that the Program Data is not sufficient for Regulatory Approvals on its own and additional pediatric efficacy and safety clinical studies are required, Royalties set forth above will be reduced by […***…] percent ([… ***…]%). 3.5 Sales Milestone Payments. In the event that Annual Net Sales, as detailed in Section 3.3, surpass certain thresholds, ArTara will make the following payments no later than […***…] following the close of the calendar quarter in which each milestone is reached as set forth below: + +Annual Net Sales of Product for the Indication Exceeds Milestone Payment + +$25,000,000 $62,500 + +$50,000,000 $62,500 + +$100,000,000 $125,000 + +3.6 Payments. All payments under Articles 3.2, 3.3 and 3.5 shall be sent to the following address: Checks will be sent to: The University of Iowa Research Foundation ATTN: Accounting 6 Gilmore Hall 112 North Capitol St. Iowa City, IA 52242-5500 Wire transfers will be sent to: […***…] + +6 + +Source: ARTARA THERAPEUTICS, INC., 8-K, 1/10/2020 + + + + + +ArTara will include the University of Iowa Research Foundation agreement number 2019- 068, a reference to "Richard Smith, MD, ArTara Sponsored Research and License Agreement dated November 28, 2018" and purpose of payment with all payments. ArTara will add all applicable wire transfer fees to wire transfer payments. All other payments shall be sent to the following address: The University of Iowa c/o Grant Accounting Office 118 S. Clinton St. Iowa City, IA 52242 ARTICLE FOUR DATA AND INTELLECTUAL PROPERTY 4.1 Program Data and Project Documentation. (a) Program Data. Access to all original Program Data shall be provided to ArTara and the CRO at University's facilities in accordance with the Project Plan for the purposes of review and copying as and only to the extent needed to support ArTara's efforts to accomplish the Project. As between ArTara and the University, ownership of all Program Data is hereby retained by the University. (b) Project Documentation. All Project Documentation shall be owned by ArTara to the extent publishable in accordance with Section 5 herein, except that ownership of any and all Program Data incorporated into Project Documentation shall as between ArTara and the University remain with the University. University may use all Project Documentation without royalty obligation for patient care and for its own internal teaching, research, and educational purposes, for publication to the extent permitted under Section 5 herein, and for the purpose of complying with any federal, state, or local laws or regulations. All medical records that support the Program Data and Project Documentation shall remain the property of the University. 4.2 License. University hereby grants to ArTara an exclusive license to use the Program Data solely for the Project and in Regulatory Filings in the Field in the Territory. 4.3 Right of Reference and IND Assignment. University hereby grants to ArTara an exclusive Right of Reference to all Program Regulatory Filings by University in support of the Product. Upon written request of ArTara, University will assign the IND to ArTara. 4.4 Intellectual Property. All intellectual property or patentable inventions arising out of or in connection with the Project which is discovered or invented solely by the University and/or Principal Investigator shall be the exclusive property of the University ("University Intellectual Property"). All intellectual property or patentable inventions arising out of or in connection with the Project which is discovered or invented solely by or on behalf of ArTara shall be the exclusive property of ArTara. All intellectual property or patentable inventions arising out of or in connection with the Project that are discovered or invented jointly by Principal Investigator and ArTara shall be considered Joint Intellectual Property and shall be jointly owned by the University and ArTara. + +7 + +Source: ARTARA THERAPEUTICS, INC., 8-K, 1/10/2020 + + + + + +ARTICLE FIVE CONFIDENTIAL INFORMATION; PUBLICATION 5.1 Confidentiality. During the term of this Agreement and for a period of seven (7) years after its termination or expiration each Party (the "Receiving Party") shall maintain in confidence and, except as authorized by this Agreement, not use any know-how, data, processes, techniques, formulas, test data and other information disclosed by the other Party (the "Disclosing Party") and which for any of the foregoing, if written, is marked "Confidential" by the Disclosing Party or, if verbal or visual, is identified in writing as "Confidential" at the time of disclosure and reduced to writing by the Disclosing Party within thirty (30) days of the verbal or visual disclosure ("Confidential Information"). 5.2 Exceptions. The obligations of confidentiality and non-use set forth in paragraph 5.1 shall not apply to the extent that it can be established by Receiving Party that the information: (a) was already known to Receiving Party without restriction at the time of disclosure; (b) was generally available to the public or otherwise part of the public domain at the time of its disclosure; (c) became generally available to the public or otherwise part of the public domain after its disclosure to Receiving Party through no breach of this Agreement by Receiving Party; (d) was disclosed to Receiving Party without restriction by a third party who had no known obligation to not to disclose such information; (e) was independently developed by Receiving Party without the use of Confidential Information; (f) was required to be disclosed by operation of law or court order; or (g) Disclosing Party gave prior written consent to Receiving Party to disclose such Confidential Information. 5.3 Return of Confidential Information. In the event the Disclosing Party requests in writing the return of Confidential Information, the Receiving Party shall return such Confidential Information to Disclosing Party with the exception of one copy, which may be retained for archival purposes. 5.4 Publication. The University and ArTara each agree to treat matters of authorship of the Publication in a proper collaborative spirit and following guidelines and policies in accordance with the University of Iowa's Operations Manual which may be found at: https://opsmanual.uiowa.edu/. It is anticipated that employees of the University will be first and senior authors on the Publication, but it is understood that final authorship will be determined in accordance with all applicable laws and regulations in publication practice, including Section 6002 of the Affordable Care Act a/k/a Sunshine Act and with ICMJE (International Committee of Medical Journal Editors) guidelines, standard scientific practice and journal guidelines. University and/or Principal Investigator shall provide ArTara with a copy of any proposed Publication for review and comment at least […***…] prior to submission thereof for publication. ArTara shall have […***…], after receipt of said copy to object to such proposed Publication because there is Confidential Information which needs protection. In the event that ArTara makes such objection, University and/or Principal Investigator shall refrain from submitting such Publication for a maximum of […***…] from date of receipt of such objection in order for ArTara to file patent application(s) directed to patentable subject matter contained in the proposed Publication. If in its review, ArTara identifies information it considers to be its Confidential Information, ArTara may require redaction of that Confidential Information; provided, however, that ArTara shall not require removal of information necessary for complete and accurate presentation and interpretation of the Program Data and results. The Publication shall occur within […***…] of the date the Project is closed or terminated, or University and/or Principal Investigator shall be free to publish Program Data and results at that time. + +8 + +Source: ARTARA THERAPEUTICS, INC., 8-K, 1/10/2020 + + + + + +ARTICLE SIX REPRESENTATIONS; INDEMNIFICATION 6.1 Representations. University represents: (a) The Program is being, and has been, conducted in accordance with all applicable local, state and federal laws, and regulations, including, but not limited to, the Federal Food, Drug and Cosmetic Act and the regulations of the FDA, International Conference on Harmonization Good Clinical Practices as adopted in the applicable FDA regulations ("GCP's"), and the Form FDA 1572 Statements of Investigators. (b) The Program is being and has been conducted in accordance with all applicable medical privacy laws or regulations, including without limitation, by obtaining any required subject informed consent to allow ArTara and ArTara's authorized representatives, FDA and other Regulatory Authorities access to and use of enrolled subjects' medical information as may be necessary for ArTara to receive and use Program Data under this Agreement. (c) The clinical studies included in the Program are and have been conducted in accordance with the applicable protocol associated with the BB-IND#5266 held by the Principal Investigator. (d) University represents that informed consent was required from all individual subjects prior to enrollment in the Program, and that the Program was approved by the Institutional Review Board of the University. (e) University represents that it is authorized to enter into this Agreement and that the terms of this Agreement are consistent with the rules, regulations, policies and/or guidelines of University. (f) University represents that to the best of its knowledge and belief there are no outstanding agreements or assignments which are inconsistent with the rights granted to ArTara pursuant to Article Four. (g) The Parties shall commence performance of the Project promptly after the date of last signature of this Agreement and shall perform the Project in accordance with the current state of the laboratory research art and in accordance with applicable state and federal laws, including export laws, and regulations. (h) University represents to the best of its knowledge, all information provided to ArTara pursuant to this Agreement is accurate in accordance with ICH-GCP's. (i) EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, THE UNIVERSITY MAKES NO REPRESENTATION AND EXTENDS NO WARRANTY OF ANY KIND, EITHER EXPRESS OR IMPLIED, WITH RESPECT TO THE SUBJECT MATTER OF THIS AGREEMENT. IN PARTICULAR, BUT WITHOUT LIMITATION, THE UNIVERSITY MAKES NO REPRESENTATION AND EXTENDS NO WARRANTY CONCERNING WHETHER THE PROGRAM DATA IS ACCURATE OR COMPLETE. THE PARTIES RECOGNIZE AND AGREE THAT ALL PROGRAM DATA, AND RELATED MATERIALS, DOCUMENTS, AND OTHER INFORMATION, THE UNIVERSITY MAKES AVAILABLE TO ARTARA AT ANY TIME IN CONNECTION WITH THIS AGREEMENT, ARE MADE AVAILABLE TO ARTARA AS AN ACCOMMODATION, AND WITHOUT REPRESENTATION OR WARRANTY OF ANY KIND, WHETHER EXPRESS, IMPLIED OR STATUTORY, AS TO THE ACCURACY AND COMPLETENESS OF SUCH MATERIALS, DOCUMENTS, AND OTHER INFORMATION. ARTARA EXPRESSLY AGREES THAT ANY RELIANCE UPON OR CONCLUSIONS DRAWN FROM THE PROGRAM DATA SHALL BE AT ARTARA'S OWN RISK TO THE MAXIMUM EXTENT PERMITTED BY LAW AND SHALL NOT GIVE RISE TO ANY LIABILITY OF OR AGAINST THE UNIVERSITY. ARTARA HEREBY WAIVES AND RELEASES ANY CLAIMS ARISING UNDER THIS AGREEMENT, COMMON LAW OR ANY STATUTE ARISING OUT OF ANY PROGRAM DATA, RELATED MATERIALS, DOCUMENTS OR INFORMATION PROVIDED TO IT BY THE UNIVERSITY. + +9 + +Source: ARTARA THERAPEUTICS, INC., 8-K, 1/10/2020 + + + + + +(j) University represents, to the best of its knowledge and belief, that neither it nor any of its officers, directors, employees involved in performing the Project is presently debarred pursuant to the Generic Drug Enforcement Act of 1992. University shall notify ArTara upon becoming aware of any inquiry or the commencement of any such investigation or proceeding. 6.2 Representations. ArTara represents and warrants: (a) It is a company duly organized, existing, and in good standing under the laws of Delaware; (b) The execution, delivery, and performance of this Agreement have been authorized by all necessary corporate action on the part of ArTara and the person signing this Agreement on behalf of ArTara has the authority to do so; (c) The making, exercising of any right, or performance of any obligation under this Agreement does not violate any separate agreement it has with a third party, and in so acting, ArTara will not breach the terms and conditions of this Agreement or fail to comply with applicable laws, regulations, and court orders; (d) It is not a party to any agreement or arrangement that would prevent it from performing its duties and fulfilling its obligations to the University under this Agreement; (e) It has and will maintain at the time specified in Article 7 herein, the insurance coverage called for in Article 7; (f) It will obtain any additional licenses from any third party needed to perform and fulfill its duties and obligations under this Agreement; and (g) There is no pending litigation and no threatened claims against it that could impair its ability or capacity to perform and fulfill its duties and obligations under this Agreement. 6.3 Indemnification by ArTara. To the extent permitted by law, ArTara agrees to defend, indemnify and hold the University of Iowa Research Foundation, the University, the State of Iowa, the University's Board of Regents, their respective affiliates, trustees, officers, directors, faculty, staff, students, successors, assigns, independent contractors, agents and employees including but not limited to Principal Investigator ("University Indemnitees"), harmless from and against any and all liability, loss, expense, reasonable adjudicated attorneys' fees, or claims for injury or damages arising out of the use of the Program Data by ArTara and its Affiliates and subcontractors including but not limited to the CRO involved in the Project, but only in proportion to and to the extent such liability, loss, expense, attorneys' fees, or claims for injury or damages are caused by or result from the negligent or acts or omissions of ArTara, its officers, agents, employees, subcontractors, the CRO or Affiliates. + +10 + +Source: ARTARA THERAPEUTICS, INC., 8-K, 1/10/2020 + + + + + +6.4 No Consequential Damages. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY UNDER THIS AGREEMENT IN A DIRECT ACTION BETWEEN THE PARTIES FOR SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING, WITHOUT LIMITATION, LOSS OF PROFITS) SUFFERED BY THE OTHER PARTY. ARTICLE SEVEN INSURANCE 7.1 ArTara, Affiliates, and sublicensees will obtain and maintain commercial general liability insurance with a reputable and financially secure insurance carrier prior to clinical testing, making, using, importing, offering to sell, or selling any licensed Product or engaging in any other act involving any licensed Product or the patent rights, if such act could possibly create risk of a claim against University Indemnitees for personal injury or property damage. (a) The insurance will identify University Indemnitees as additional insureds and will provide that the carrier will notify University in writing at least […***…] prior to cancellation, non-renewal, or material change in coverage. Should ArTara fail to obtain replacement insurance providing comparable coverage within such […***…] period, University will have the right to termination this Agreement effective as of the end of the […***…] period without notice or any additional cure period. (b) The insurance will include coverage for product liability with a minimum of […***…] dollars ($[…***…]) per occurrence and [… ***…] dollars ($[…***…]) annual aggregate, coverage for contractual liability, clinical trials liability if any such trial is performed, bodily injury and property damage, including completed operations, personal injury, coverage for contractual employees, blanket contractual and products, and all other coverages standard for such policies. Such insurance will additionally include errors and omissions insurance with a minimum of […***…] dollars ($[…***…]) per occurrence. (c) Insurance policies purchased to comply with this Article Seven will be kept in force for at least […***…] after the last sale of licensed Product. 7.2 At University's request, such request to be made no more than annually, ArTara will provide University with a certificate of insurance and notices of subsequent renewals for its insurance and that of Affiliates extended rights under this Agreement and of sublicensees. 7.6 The specified minimum coverages and other provisions of this Article Seven do not constitute a limitation on ArTara's obligation to indemnify the University Indemnitees under this Agreement. + +11 + +Source: ARTARA THERAPEUTICS, INC., 8-K, 1/10/2020 + + + + + +ARTICLE EIGHT TERM AND TERMINATION 8.1 Term. This Agreement may be terminated by ArTara upon thirty (30) days prior written notice to University. 8.2 Termination by Either Party. Either Party may terminate the Project and all commitments and obligations with respect thereto, subject to Section 8.3 herein, upon thirty (30) days written notice to the other Party. In the event of any termination of the Project by University, (a) University agrees to complete Phase I and II of the Project, and (b) ArTara will continue to provide annual funding until the completion of Phase II. Upon termination of the Project by ArTara this Agreement will terminate subject to Section 8.3 and ArTara will reassign to University the IND if assignment thereof previously occurred pursuant to Section 4.3. 8.3 Survival. Termination of the Project for any reason shall not relieve any Party of any obligation that accrued under this Agreement prior to termination. The provisions of Article Three, Article Four, Article Five, Sections 6.3 and 6.4, and Articles Seven through Nine shall survive termination of the Project by University. The provisions of Article Five, Sections 6.3 and 6.4, Article Seven, Section 8.3 and Article Nine shall survive termination of the Project and this Agreement by ArTara. ARTICLE NINE MISCELLANEOUS 9.1 Force Majeure. University will not be liable for any failure to perform as required by this Agreement, if the failure to perform is caused by circumstances reasonably beyond University's control, such as labor disturbances or labor disputes of any kind, accidents, failure of any governmental approval required for full performance, civil disorders or commotions, acts of aggression, acts of God, energy or other conservation measures, explosions, failure of utilities, mechanical breakdowns, material shortages, disease, thefts, or other such occurrences. 9.2 Publicity. No Party will use directly or by implication the name of any other Party, or the name of any employee thereof without prior written notification and agreement of the named Party for promotional, marketing or advertising purposes. Notwithstanding the foregoing, nothing herein shall prevent either Party from disclosing the existence of this Agreement, the identities of the Parties, or the basic nature and scope of the purpose of this Agreement. 9.3 Notices. Any Notice required to be given pursuant to this Agreement shall be made by personal delivery or, if by mail, then by registered or certified mail, return receipt requested, by one Party to the other Party at the following addresses. In the case of ArTara, Notice should be sent to: ArTara Therapeutics 1 Little West 12t h Street NY, NY 10014 + +12 + +Source: ARTARA THERAPEUTICS, INC., 8-K, 1/10/2020 + + + + + +Attention: Jesse Shefferman In the case of University, Notice should be sent to: The University of Iowa c/o Division of Sponsored Programs 2 Gilmore Hall Iowa City, IA 52242 Attention: […***…] 9.4 Governing Law. This Agreement shall be governed by the laws of the State of Iowa. 9.5 Assignment. No Party may assign any rights under this Agreement or delegate any duties hereunder without the prior written consent of the other Party. 9.6 Independent Contractors. The relationship between ArTara and the University created by this Agreement shall be one of an independent contractor and no Party shall have the authority to bind or act as agent for the other Party. 9.7 Entire Agreement. This Agreement constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior agreements and understandings between the Parties (whether written or verbal) relating to said subject matter. 9.8 Severability. Whenever possible each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law but should any provision of this Agreement be held to be prohibited or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of this Agreement. However, if such provision is deemed significant and its invalidity would substantially alter the basis of this Agreement, the Parties will negotiate in good faith to amend the provisions of this Agreement to give effect to the original intent of the parties. 9.9 Waiver. No provision of this Agreement shall be waived by any act or omission of the Parties or their agents or employees except by an instrument in writing expressly waiving such provision and signed by a duly authorized officer of the waiving Party. 9.10 Counterparts. This Agreement may be signed in any number of counterparts, including in PDF format, each of which shall be an original, with the same effect as though the signatures hereto and thereto were on the same instrument. 9.11 Section Headings. The recitals and descriptive headings of this Agreement are for convenience only and shall be of no force or effect in interpreting any of the provisions of this Agreement. + +13 + +Source: ARTARA THERAPEUTICS, INC., 8-K, 1/10/2020 + + + + + +IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed by an authorized official as of the day and year first above written. ARTARA THERAPEUTICS, INC. /s/ Jesse Shefferman By: Jesse Shefferman Title: Chief Executive Officer THE UNIVERSITY OF IOWA /s/ Wendy Beaver By: Wendy Beaver Title: Executive Director, Division of Sponsored Programs READ & ACKNOWLEDGED BY PRINCIPAL INVESTIGATOR /s/ Richard Smith By: Richard Smith, M.D. Title: Professor of Otolaryngology Head and Neck Surgery + +14 + +Source: ARTARA THERAPEUTICS, INC., 8-K, 1/10/2020 + + + + + +EXHIBIT A + +PROGRAM DATA […***…] + +15 + +Source: ARTARA THERAPEUTICS, INC., 8-K, 1/10/2020 \ No newline at end of file diff --git a/full_contract_txt/AtnInternationalInc_20191108_10-Q_EX-10.1_11878541_EX-10.1_Maintenance Agreement.txt b/full_contract_txt/AtnInternationalInc_20191108_10-Q_EX-10.1_11878541_EX-10.1_Maintenance Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..b4c94c86884e0d2b203ba52543e9982318433b7a --- /dev/null +++ b/full_contract_txt/AtnInternationalInc_20191108_10-Q_EX-10.1_11878541_EX-10.1_Maintenance Agreement.txt @@ -0,0 +1,1507 @@ +Exhibit 10.1 CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND REPLACED WITH "[***]". SUCH IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS (I) NOT MATERIAL AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM TO THE COMPANY IF DISCLOSED. Execution Version Network Build and Maintenance Agreement Between Commnet Wireless, LLC And AT&T Mobility LLC + +Source: ATN INTERNATIONAL, INC., 10-Q, 11/8/2019 + + + + + +Mobility Network General Agreement TABLE OF CONTENTS Page 1.1 Scope 1 1.2 Scope of Agreement 1 1.3 Term of Agreement 1 2.1 Definitions 1 2.2 Affiliate 1 2.3 Agreement 2 2.4 Attorney's Fees 2 2.5 AT&T Competitor 2 2.6 AT&T Indemnified Parties 2 2.7 Cell Site 2 2.8 Change Management Plan 2 2.9 Change of Control 2 2.10Change Order 2 2.11Control 2 2.12Customer Information 3 2.13Deliverable 3 2.14Delivery or Completion 3 2.15Delivery Date or Completion Date 3 2.16Documentation 4 2.17Drug Screen 4 2.18Employment Claims 4 2.19Excusable Delay 4 2.20FirstNet Authority 4 2.21Information 5 2.22Intellectual Property Rights 5 2.23Items 5 2.24Laws 5 2.25Liability 5 2.26Lien 5 2.27Litigation Expense 5 2.28Loss 5 2.29Material 6 2.30Non-Service Affecting Defect 6 2.31OEM 6 2.32Permits 6 2.33Person 6 2.34Physical Entry 6 2.35Restricted Entities 6 2.36Service Affecting Defect 7 2.37Services 7 + +Proprietary and Confidential This Agreement and information contained therein is not for use or disclosure outside of AT&T, its Affiliates, and third party representatives, and Vendor except under written agreement by the contracting parties. ii + +Source: ATN INTERNATIONAL, INC., 10-Q, 11/8/2019 + + + + + +Mobility Network General Agreement TABLE OF CONTENTS 2.38Software 7 2.39Specifications 7 2.40Subcontractor 7 2.41Suspend a Site, Suspend or Suspension 7 2.42System 7 2.43Third Party Loss 7 2.44Vendor Indemnified Parties 7 2.45Vendor Person 8 2.46Work 8 2.47Writing or Written 8 3.1 General Terms 8 3.2 Affiliate 8 3.3 Amendments and Waivers 8 3.4 Anticipated and Actual Delays in Delivery and Performance 8 3.5 Anticorruption Laws 9 3.6 Assignment and Delegation; Change of Control 10 3.7 Compliance with Laws 11 3.8 Conflict of Interest 11 3.9 Construction and Interpretation 11 3.10Cumulative Remedies 12 3.11Delivery, Performance and Acceptance 12 3.12Entire Agreement 13 3.13Force Majeure 14 3.14Government Contract Provisions and Flow Downs 14 3.15Governing Law 16 3.16Indemnity 16 3.17Information 18 3.18Infringement 21 3.19Insurance 25 3.20Invoicing and Payment 28 3.21Licenses and Patents 29 3.22Limitation of Damages 29 3.23Offset Right 29 3.24Material and Services Furnished by Vendor and AT&T 29 3.25Non-Exclusive Market 29 3.26Notice of Certain Events 30 3.27Notices 30 3.28Offshore Work Prohibited 32 3.29Order of Precedence 32 3.30Ownership of Paid-For Development, Use and Reservation of Rights 32 3.31Publicity 33 + +Proprietary and Confidential This Agreement and information contained therein is not for use or disclosure outside of AT&T, its Affiliates, and third party representatives, and Vendor except under written agreement by the contracting parties. 3 + +Source: ATN INTERNATIONAL, INC., 10-Q, 11/8/2019 + + + + + +Mobility Network General Agreement TABLE OF CONTENTS 3.32Records and Audits 34 3.33Restricted Entities 37 3.34Severability 37 3.35Supplier Citizenship and Sustainability 37 3.36Survival of Obligations 37 3.37Taxes 37 3.38Termination and Suspension 39 3.39Third Party Administrative Services 42 3.40Third Party Beneficiaries 42 3.41Title and Risk 43 3.42Title To Material Furnished by AT&T 43 3.43Transaction Costs 44 3.44Utilization of Minority, Women, and Disabled Veteran Owned Business Enterprises 44 3.45Vendor Personnel and Employment Matters 44 3.46Warranty 44 3.47Subcontractors; Work Done By Others 47 3.48Affordable Care Act 48 3.49Customer Information 48 3.50Reimbursable Expenses 50 4.1 Special Terms 50 4.2 Access 50 4.3 AT&T Supplier Information Security Requirements (SISR) 50 4.4 Background Checks 51 4.5 Clean Up 52 4.6 Vendor's Audited Financial Statements 52 4.7 Vendor Personnel Information 52 4.8 Damage to Property 52 4.9 Dispute Resolution 53 4.10Electronic Data Interchange (EDI) 54 4.11Emergency Work 55 4.12Hazardous Material and Regulated Substances 55 4.13Identification of Vendor's Personnel and Equipment 57 4.14Independent Contractor 57 4.15Inspection of Material 58 4.16Inspection of Work 58 4.17Liens 58 4.18Notification of Injury or Damage 59 4.19Protection of Property 59 4.20Releases Void 59 4.21Removal and Management of Used Batteries 59 4.22Resource Recovery Center 60 + +Proprietary and Confidential This Agreement and information contained therein is not for use or disclosure outside of AT&T, its Affiliates, and third party representatives, and Vendor except under written agreement by the contracting parties. 4 + +Source: ATN INTERNATIONAL, INC., 10-Q, 11/8/2019 + + + + + +Mobility Network General Agreement TABLE OF CONTENTS 4.23Safety Management 60 4.24Technical Support 61 4.25Testimony 61 4.26AT&T Data and AT&T Derived Data (Big Data) 61 4.27Business Continuity Plan 63 4.28Change in Laws 63 4.29FOSS 63 5.1 Execution of Agreement 64 5.2 Transmission of Original Signatures and Executing Multiple Counterparts 64 Exhibit A: Government Flow Downs and Contract Clauses + +Exhibit B: Supplier Information Security Requirements (SISR) + +Exhibit C: Change Management Plan + +Addendum 1: Network Build and Structured Payments + +Addendum 2: Maintenance + +Proprietary and Confidential This Agreement and information contained therein is not for use or disclosure outside of AT&T, its Affiliates, and third party representatives, and Vendor except under written agreement by the contracting parties. 5 + +Source: ATN INTERNATIONAL, INC., 10-Q, 11/8/2019 + + + + + +This Network Build and Maintenance Agreement is entered into as of the 31 day of July, 2019 (the "Effective Date") by and between Commnet Wireless, LLC, a Delaware limited liability company (hereinafter referred to as "Vendor"), and AT&T Mobility LLC, a Delaware limited liability company on behalf of itself and its Affiliates (as such term is defined herein) (collectively and hereinafter referred to as "AT&T"), each of which may be referred to in the singular as a "Party" or in the plural as the "Parties." + +1.0 Scope + +1.1 Scope of Agreement. Subject to the terms and conditions of this Agreement, Vendor shall (i) build, install and deploy a radio access network ("RAN") at certain Cell Sites in one or more states for AT&T and its Affiliates as more particularly described in Addendum 1: Network Build and Structured Payments (the "Build Addendum") attached hereto, (ii) provide ongoing maintenance of the RAN network constructed by Vendor pursuant to the Build Addendum as more particularly described in Addendum 2: Maintenance (the "Maintenance Addendum") attached hereto and (iii) provide to AT&T certain other Material and Services related thereto as described herein and therein. In exchange for the provision of the Material and Services set forth in the Build Addendum, the Parties agree that AT&T will pay to Vendor the Structured Payments (as such term is defined in the Build Addendum) and in exchange for the provision of the Material and Services set forth in the Maintenance Addendum, the Parties agree that AT&T will pay to Vendor the Maintenance Fees (as such term is defined in the Maintenance Addendum). Vendor agrees that the Material and Services provided pursuant to this Agreement, the Build Addendum and the Maintenance Addendum shall strictly conform to the Specifications contained herein and therein. + +Concurrently herewith, the Parties or their Affiliates have entered into (i) that certain Cell Site Backhaul Master Services Agreement between Vendor and AT&T Corp. pursuant to which Vendor is responsible for providing transport services from the Cell Sites to AT&T's designated MTSO (the "Transport Agreement") and (ii) that certain Master License Agreement that governs all site license agreements between AT&T and Vendor (or its Affiliates) for the Cell Sites (the "Master License Agreement"). + +1.2 Term of Agreement. The "Term" of this Agreement shall commence on the Effective Date and shall continue in full force and effect until the expiration or earlier termination of the last Addendum to expire or be terminated, at which time this Agreement will expire, unless this Agreement is sooner terminated in accordance with the terms and provisions of this Agreement. + +2.0 Definitions + +2.1 Affiliate. "Affiliate" of a Person means any other Person, directly or indirectly, through one or more intermediaries, Controlling, Controlled by or under common Control with such Person or any other Person in which such Person beneficially owns a majority of the outstanding capital stock, membership interests or partnership interests. + +Proprietary and Confidential This Agreement and information contained therein is not for use or disclosure outside of AT&T, its Affiliates, and third party representatives, and Vendor except under written agreement by the contracting parties. 1 + +st + +Source: ATN INTERNATIONAL, INC., 10-Q, 11/8/2019 + + + + + +2.2 Agreement. "Agreement" means the written agreement between the Parties as set forth in this document and the attached addendums, exhibits, schedules and appendices and shall include the terms of such other documents as are incorporated by express reference in this document and the attached addendums, exhibits, schedules and appendices. All references herein to this Agreement shall include the Build Addendum and the Maintenance Addendum and all attachments, exhibits and schedules attached thereto, as amended from time to time. + +2.3 Attorney's Fees. "Attorney's Fees" include all reasonable outside counsel fees and expenses. + +2.4 AT&T Competitor. "AT&T Competitor" means [***]. + +2.5 AT&T Indemnified Parties. "AT&T Indemnified Parties" means AT&T and its Affiliates, as well as their respective officers, directors, employees, representatives and agents, individually or collectively, as the case may be, and all of their successors and assigns. + +2.6 Cell Site. "Cell Site" means a wireless communications tower or other structure on which cell site equipment is located, and for purposes of this Agreement shall refer to AT&T's space on such structure and all of the AT&T Provided Equipment (as such term is defined in the Build Addendum) and Vendor Provided Equipment (as such term is defined in the Build Addendum), including all Material contemplated herein or in the Build Addendum, together with all related ground space and other property and rights ancillary thereto as set forth in the Master License Agreement and the applicable Site License for the Vendor Cell Sites or the applicable Tower Lease for the Third Party Cell Sites. + +2.7 Change Management Plan. "Change Management Plan" means the process to accommodate changes to the Specifications or Work set forth in Exhibit C attached hereto. + +2.8 Change of Control. "Change of Control" means any contract or transaction or series of related contracts or transactions (regardless of form or structure) that would directly result in the Control of a Person or its business or assets changing from one Person to another Person (alone or in combination with any other third Person). + +2.9 Change Order. "Change Order" means any written request by any Party hereto to make any change to the Work, including the Services, Material, Delivery Dates or Completion Dates, Specifications or other terms and conditions of this Agreement, that is authorized and approved in writing by the other Party in accordance with the Change Management Plan. + +2.10 Control. "Control" (including the terms "Controlling" and "Controlled by") of a Person shall mean (i) holding fifty percent (50%) or more ownership or beneficial interest of income and capital of such Person; or (ii) having ownership of at least fifty percent (50%) + +Proprietary and Confidential This Agreement and information contained therein is not for use or disclosure outside of AT&T, its Affiliates, and third party representatives, and Vendor except under written agreement by the contracting parties. 2 + +Source: ATN INTERNATIONAL, INC., 10-Q, 11/8/2019 + + + + + +of the voting power or voting equity of such Person; or (iii) regardless of the percentage ownership interest held, having the ability to appoint a majority of the board of directors, managers or other governing body of such Person or otherwise direct management policies of such Person by contract or otherwise. + +2.11 Customer Information. "Customer Information" includes, to the extent received, observed, collected, stored, or accessed, in any way, in connection with this Agreement: AT&T's or its Affiliates' customers' names, addresses, and phone numbers, any such customer's or its employee's personal, health or financial information, authentication credentials, Internet activities, history, and/or patterns of use, information concerning accounts, network performance and usage information, web browsing and wireless application information, location information, any other information associated with a customer of AT&T or its Affiliates or with persons in the household of a customer of AT&T or its Affiliates, and any information available to AT&T, its Affiliates and/or the suppliers and/or subcontractors of AT&T or its Affiliates (for avoidance of doubt, including Vendor) by virtue of AT&T's or its Affiliates' relationship with customers as a provider of mobile and non-mobile communications, Internet, data, video, information or other services, including the quantity, technical configuration, location, type, destination, and amount of use of communications or other services subscribed to, and information contained on the bills of AT&T's or its Affiliates' customers. + +2.12 Deliverable. "Deliverable" means any and all deliverables set forth in this Agreement, including all deliverables set forth in the Build Addendum and the Maintenance Addendum, which are to be provided by Vendor to AT&T pursuant to the terms of any exhibit, schedule or appendix attached hereto or thereto. Deliverables include, but are not limited to, any cell site configuration files, reports, data, designs, plans, specifications, models, prototypes, performance requirements, and/or Documentation delivered pursuant to this Agreement. + +2.13 Delivery or Completion. "Delivery" or "Completion" or any similar terms mean Vendor's obligation to provide Material and Services that strictly conform to the Specifications, including, without limitation, Location Acceptance of the Cell Sites described in the Build Addendum. Vendor completes Delivery of Material or Completion of Services: (i) in the case of any Cell Site (and all Material and Services incorporated therein or related thereto) upon Location Acceptance, and (ii) in the case of delivery of Material or Services that are required to be delivered prior to or following Location Acceptance, (A) upon AT&T's possession of the Material if Vendor is not required to provide additional Services, such as installation, (B) upon completing such additional Services, if Vendor is required to provide such Services in connection with providing Material, or (C) for Services, upon completing the provision of Services. Notwithstanding the above, Delivery and Completion shall not be deemed to have occurred until Vendor causes the Material and Services to strictly conform to the Specifications and in the case of any Cell Site, Location Acceptance has occurred. + +2.14 Delivery Date or Completion Date. "Delivery Date" or "Completion Date" means the date on which the Parties agree Vendor is scheduled in this Agreement or the Build + +Proprietary and Confidential This Agreement and information contained therein is not for use or disclosure outside of AT&T, its Affiliates, and third party representatives, and Vendor except under written agreement by the contracting parties. 3 + +Source: ATN INTERNATIONAL, INC., 10-Q, 11/8/2019 + + + + + +Addendum or Maintenance Addendum or as such date may be extended due to an Excusable Delay, as applicable, to complete its Delivery of Material and Completion of Services, as applicable. + +2.15 Documentation. "Documentation" means all documentation included with Vendor's purchase of Vendor Provided Equipment, including user instructions, training materials and, if applicable, the source code for Software. + +2.16 Drug Screen. "Drug Screen" means the testing of any individual for the use of illicit drugs (including opiates, cocaine, cannabinoids, amphetamines, and phencyclidine (PCP)). + +2.17 Employment Claims. "Employment Claims" means any claims by any federal, state or local governmental agency or any of Vendor's current or former applicants, agents, employees or Subcontractors, or agents or employees of Vendor's Subcontractors arising out of the employment relationship with Vendor, or otherwise with respect to performance under this Agreement, including claims, charges and actions arising under Title VII of the Civil Rights Act of 1964, as amended, The Equal Pay Act, the Age Discrimination in Employment Act, as amended, The Rehabilitation Act, the Americans with Disabilities Act, as amended, the Fair Labor Standards Act, the Family and Medical Leave Act, Workers' Compensation Laws, the National Labor Relations Act and any other applicable Laws, including any liability, cause of action, lawsuit, penalty, claim, demand or administrative proceeding in which AT&T or its Affiliates is named as or alleged to be an "employer" or "joint employer" with Vendor as a result of this Agreement. + +2.18 Excusable Delay. "Excusable Delay" means a delay in Vendor's performance or obligations with respect to any Cell Site past any scheduled Delivery Date or Completion Date (including any scheduled Completion Date for a Milestone, scheduled Completion Date for Location Acceptance or scheduled Phase Completion Date set forth in the Build Addendum) that is caused by any of the following events: (a) a Force Majeure Event affecting Vendor's performance with respect to such Cell Site, subject to Section 3.12(b); (b) a Change Order that extends a Completion Date or Delivery Date with respect to such Cell Site; (c) a Permitting Delay affecting such Cell Site, subject to the process set forth in Section 3.3(b); (d) AT&T's failure to deliver the AT&T Provided Equipment (as such term is defined in the Build Addendum) within sixty (60) days prior to the applicable Phase Completion Date for such Cell Site; (e) any material defect, insufficiency, error or deficiency in any AT&T Provided Equipment or other items supplied by AT&T under this Agreement; or (f) AT&T's failure to satisfy any of the AT&T Task Service Level Agreements within the time periods set forth on Schedule 14 to the Build Addendum. Upon the occurrence of any of the triggering events set forth in clauses (a) through (f) causing a delay, such delay shall only be an Excusable Delay for the number of days that such triggering event was in existence and the applicable Delivery Date or Completion Date shall be extended on a day-for-day basis for the length of such triggering event. + +2.19 FirstNet Authority. "FirstNet Authority" or "FNA" means the First Responder Network Authority. + +Proprietary and Confidential This Agreement and information contained therein is not for use or disclosure outside of AT&T, its Affiliates, and third party representatives, and Vendor except under written agreement by the contracting parties. 4 + +Source: ATN INTERNATIONAL, INC., 10-Q, 11/8/2019 + + + + + +2.20 Information. "Information", with respect to a Party, means all confidential, proprietary or trade secret information, including discoveries, ideas, concepts, know-how, techniques, processes, procedures, designs, specifications, strategic information, proposals, requests for proposals, proposed products, drawings, blueprints, tracings, diagrams, models, samples, flow charts, data, computer programs, marketing plans, Customer Information (including Internet activities, history, and/or patterns of use), employee personal information, health or financial information, authentication credentials, and other technical, financial or business information, whether disclosed in writing, orally, or visually, in tangible or intangible form, including in electronic mail or by other electronic communication. + +2.21 Intellectual Property Rights. "Intellectual Property Rights" means all patents (including all reissues, divisions, continuations, and extensions thereof) and patent applications, trade names, trademarks, service marks, logos, trade dress, copyrights, trade secrets, mask works, rights in technology, know-how, rights in content (including performance and synchronization rights), or other intellectual property rights that are in each case protected under the Laws of any governmental authority having jurisdiction. + +2.22 Items. "Items" means any or all inventions, discoveries, ideas (whether patentable or not), and all works and materials, including but not limited to products, devices, computer programs, source codes, designs, files, specifications, texts, drawings, processes, data or other information or documentation in preliminary or final form, and all Intellectual Property Rights in or to any of the foregoing. + +2.23 Laws. "Laws" includes all federal, state, provincial, regional, territorial and local laws, statutes, ordinances, regulations, rules, executive orders, supervisory requirements, directives, circulars, opinions, interpretive letters and other official releases of or by any governmental authority. + +2.24 Liability. "Liability" means all losses, damages, expenses, costs, penalties, fines and fees, including Litigation Expenses, arising from or incurred in connection with a claim or cause of action related to performance or omission of acts under this Agreement, including, but not limited to, claims or causes of action brought by third parties. + +2.25 Lien. "Lien" means any mortgage, lien, pledge, security interest, charge, claim, restriction or other encumbrance of any nature whatsoever. + +2.26 Litigation Expense. "Litigation Expense" means any court filing fee, court cost, arbitration fee, and each other fee and cost of investigating or defending an indemnified claim or asserting any claim for indemnification or defense under this Agreement, including Attorney's Fees, other professionals' fees, and disbursements. + +2.27 Loss. "Loss" means any Liability, loss, claim, demand, suit, cause of action, settlement payment, cost, expense, interest, award, judgment, damage (including punitive damages), fine, fee, penalty, and Litigation Expense. + +Proprietary and Confidential This Agreement and information contained therein is not for use or disclosure outside of AT&T, its Affiliates, and third party representatives, and Vendor except under written agreement by the contracting parties. 5 + +Source: ATN INTERNATIONAL, INC., 10-Q, 11/8/2019 + + + + + +2.28 Material. "Material" means all units of equipment, apparatus, components, tools, supplies, material, structures, "as built" drawings, contract rights, Intellectual Property Rights or Documentation, including third party materials provided or furnished by Vendor, that are contemplated in this Agreement, the Build Addendum and the Maintenance Addendum (including all schedules thereto), including all such items that are used in connection with the Build Services (as such term is defined in the Build Addendum) provided hereunder or sold or transferred to AT&T in connection with the Build Addendum, including all Vendor Provided Equipment set forth in the Build Addendum. Material shall be deemed to include all rights to any replacement parts, but shall not be deemed to include any rights to Vendor's transport network (other than the rights to receive transport services in accordance with the terms of the Transport Agreement) or any tower or other structure owned or leased by Vendor (other than the rights set forth in the Master License Agreement and applicable Site License for any Vendor Cell Site or any Tower Lease for any Third Party Cell Site). + +2.29 Non-Service Affecting Defect. "Non-Service Affecting Defect" means any incorrect or incomplete Cell Site (or any Material, Services or Deliverables relating thereto) or defect or issue of or relating to a Cell Site that is not a Service Affecting Defect. + +2.30 OEM. "OEM" means original equipment manufacturer. + +2.31 Permits. "Permits" means all permits, licenses, franchises, approvals, authorizations, registrations, certificates and variances required to be obtained from any federal, state, local or foreign government or political subdivision thereof, or any agency or instrumentality of such government or political subdivision. + +2.32 Person. "Person" means an individual, corporation, limited liability company, partnership, trust, association, joint venture, unincorporated organization or entity of any kind or nature, or a governmental entity or authority. + +2.33 Physical Entry. "Physical Entry" means that an individual (a) is permitted to bodily enter, on an unsupervised (or badged) basis, into secured areas not available to the general public, or (b) is permitted on a regular basis to have supervised or escorted bodily access into secured areas not available to the general public for more than thirty (30) days in the aggregate annually. + +2.34 Restricted Entities. "Restricted Entities" means [***]. + +2.35 Service Affecting Defect. "Service Affecting Defect" means any incorrect or incomplete construction or maintenance by Vendor of a Cell Site (or any Material, Services or Deliverables relating thereto) that, if not promptly corrected or completed, is reasonably likely to (i) be a safety hazard to persons having access to a Cell Site, (ii) inhibit proper operation of a Cell Site or satisfaction of the Quality Metrics or Specifications and key performance indicators set forth in this Agreement, or (iii) prevent subsequent work required for "on-air" operation from taking place. For the avoidance of doubt, a Service Affecting Defect shall not include regular or routine failures of Material located at a Cell + +Proprietary and Confidential This Agreement and information contained therein is not for use or disclosure outside of AT&T, its Affiliates, and third party representatives, and Vendor except under written agreement by the contracting parties. 6 + +Source: ATN INTERNATIONAL, INC., 10-Q, 11/8/2019 + + + + + +Site that are not a result of the construction or maintenance of such Cell Site by Vendor. + +2.36 Services. "Services" means all of the services contemplated in the Build Addendum and the Maintenance Addendum (and all schedules thereto). + +2.37 Software. "Software" means any and all software (irrespective of whether it is Paid-For Development) and firmware in any form (including source code and object code), as well as any Documentation, licensed or otherwise provided by or on behalf of Vendor. + +2.38 Specifications. "Specifications" means (i) all of the Build Out Specifications set forth in the Build Addendum (and all schedules thereto, except as expressly waived by AT&T in writing), (ii) all of the specifications set forth in the Maintenance Addendum (and all schedules thereto) with respect to the Services contemplated therein, and (iii) all applicable OEM specifications. + +2.39 Subcontractor. "Subcontractor" means any Person (including an agent) supplying labor or materials to perform any or all of Vendor's obligations under this Agreement, including any Person at any tier of subcontractors, and shall not be limited to those Persons with a direct relationship with Vendor. + +2.40 Suspend a Site, Suspend or Suspension. "Suspend a Site", "Suspend" or "Suspension" means Vendor shall stop work on a Cell Site and not incur additional costs against the Cell Site and the Completion Date is suspended until AT&T notifies Vendor to resume work or AT&T terminates this Agreement with respect to such Cell Site. + +2.41 System. "System" means the hardware, operating system and application Software, interfaces, and databases that interact with Software. + +2.42 Third Party Loss. "Third Party Loss" means any Loss or Liability resulting from or relating to a claim or cause of action asserted by a third party. + +2.43 Vendor Indemnified Parties. "Vendor Indemnified Parties" means Vendor and its Affiliates, as well as their respective officers, directors, employees, representatives and agents, individually or collectively, as the case may be, and all of their successors and assigns. + +Proprietary and Confidential This Agreement and information contained therein is not for use or disclosure outside of AT&T, its Affiliates, and third party representatives, and Vendor except under written agreement by the contracting parties. 7 + +Source: ATN INTERNATIONAL, INC., 10-Q, 11/8/2019 + + + + + +2.44 Vendor Person. "Vendor Person" means any officer, director, employee, representative, agent, contractor or Subcontractor of Vendor and any officer, director, employee, representative or agent of any Vendor contractor or Subcontractor. + +2.45 Work. "Work" means all or any portion, as the case may be, of the Material, Deliverables and Services that Vendor is supplying pursuant to this Agreement, including all Material, Deliverables, Services and other Work contemplated in the Build Addendum and Maintenance Addendum (and all schedules thereto). + +2.46 Writing or Written. "Writing" or "Written" (whether or not capitalized) means a tangible document with an original signature or an electronic transmission of data pursuant to the Electronic Data Interchange ("EDI") Section of this Agreement. + +3.0 General Terms + +3.1 Affiliate. An Affiliate of AT&T may transact business under this Agreement. References to "AT&T" herein are deemed to refer to any Person that qualifies as an Affiliate of AT&T under the definition set forth in Section 2.1 when such Affiliate transacts business with Vendor under this Agreement; provided that AT&T Mobility LLC shall be responsible for any and all obligations of any such Affiliate under this Agreement. + +3.2 Amendments and Waivers. The Parties may not amend this Agreement except by a written agreement of the Parties that identifies itself as an amendment to this Agreement or by a Change Order modifying the terms or conditions of this Agreement, which in either case is signed by both Parties, or as otherwise expressly provided below in this Section. No waiver of any right or condition is effective unless given in writing and signed by the Party waiving such right or condition. No delay or omission by either Party to exercise any right or power it has under this Agreement shall impair or be construed as a waiver of such right or power. A waiver by any Party of any breach, condition or covenant shall not be construed to be a waiver of any succeeding breach or condition or of any other covenant. All waivers must be in writing and signed by the Party waiving its rights. + +3.3 Anticipated and Actual Delays in Delivery and Performance. + +(a) Anticipated Delays. Upon discovery of information indicating that Material and/or Services will not be Delivered by the scheduled Delivery Date or Completion Date (including any scheduled Completion Date for a Milestone, scheduled Completion Date for Location Acceptance or scheduled Phase Completion Date set forth in the Build Addendum) or other information causing Vendor to reasonably anticipate a delay in its performance of its obligations beyond the scheduled Delivery Date or Completion Date (collectively, the "Delay Information"), Vendor shall promptly notify AT&T of such Delay Information and the estimated length of the anticipated delay. If Vendor desires to request an extension of the applicable Delivery Date or Completion Date implicated by the Delay Information, Vendor may submit a change request to AT&T in accordance with the Change Management Plan. The Parties shall cooperate and work jointly in good faith toward resolving the delayed Delivery or Completion or adopting the requested Change Order. + +Proprietary and Confidential This Agreement and information contained therein is not for use or disclosure outside of AT&T, its Affiliates, and third party representatives, and Vendor except under written agreement by the contracting parties. 8 + +Source: ATN INTERNATIONAL, INC., 10-Q, 11/8/2019 + + + + + +(b) Permitting Delays. Vendor shall timely, diligently and continuously pursue and use reasonable best efforts to obtain as soon as possible any Permits required to be obtained in connection with or in order to perform the Work and otherwise fulfill its obligations under this Agreement, the Build Addendum and/or the Maintenance Addendum, including without limitation requesting assistance from AT&T as appropriate. Upon Vendor's reasonable request for AT&T's assistance in obtaining any such Permit, the Parties agree to cooperate in good faith to obtain such Permit. To the extent that Vendor (x) has timely notified AT&T of related Delay Information contemplated in Subsection (a) above, (y) has complied with this Section 3.3(b) and (z) is nevertheless unable to obtain or delayed in obtaining a required Permit which is reasonably likely to result in Vendor missing a Delivery Date or Completion Date (a "Permitting Delay"), then the Parties shall cooperate in good faith to extend such Delivery Date or Completion Date and such Permitting Delay shall constitute an Excusable Delay; provided, however that if the Parties cannot agree on a new Delivery Date or Completion Date or in the event of a Permitting Delay preventing or delaying Vendor's performance which AT&T determines is reasonably likely to cause a material delay of the ultimate Delivery Date or Completion Date applicable to a Cell Site, AT&T may elect to, after consultation with Vendor and good faith discussion to negotiate another resolution: + +(i) terminate its obligations solely with respect to each Cell Site affected by or related to such Permitting Delay under this Agreement and exercise any of the Termination Remedies set forth in the Build Addendum, without liability to Vendor; provided that AT&T shall pay to Vendor, an amount equal to the demonstrated costs incurred by Vendor for any Work completed (in accordance with applicable Specifications and requirements) to the extent such Work is transferred to AT&T as of the effective time of termination of the applicable terminated Cell Site, which amount shall not exceed $[***]; or + +(ii) suspend this Agreement or any part hereof for the duration of such Permitting Delay (as such period is reasonably determined by AT&T) solely with respect to any Cell Site affected by or related to such Permitting Delay, obtain Work elsewhere (including AT&T's performance of the Work itself), at AT&T's cost and expense (which shall reduce the Structured Payments applicable to such Cell Site by such amount, but in no event shall such reduction cause the Structured Payments to be less than an amount equal to the demonstrated costs incurred by Vendor up to the date of suspension), and provide notice to Vendor when AT&T desires for Vendor to resume its performance under this Agreement for the remaining Work at such Cell Site. + +(c) Actual Delays. Except in the case of an Excusable Delay and subject to any applicable cure period, in the event of any actual delay reasonably attributable to Vendor that causes Vendor to miss a Delivery Date or Completion Date, Vendor will provide written notice to AT&T and if the condition remains uncured after the expiration of any applicable cure period set forth in this Agreement, the Build Addendum and/or the Maintenance Addendum, AT&T may exercise any remedies available to AT&T under this Agreement, the Build Addendum and/or the Maintenance Addendum, as applicable. + +3.4 Anticorruption Laws. Vendor hereby represents and warrants that the employees, agents, consultants, partners, officers, directors, members or representatives of Vendor and its + +Proprietary and Confidential This Agreement and information contained therein is not for use or disclosure outside of AT&T, its Affiliates, and third party representatives, and Vendor except under written agreement by the contracting parties. 9 + +Source: ATN INTERNATIONAL, INC., 10-Q, 11/8/2019 + + + + + +Subcontractors, if any, performing Services or other activities under this Agreement (each and any of the foregoing individuals, for the purpose of this Section, a "Vendor Representative") shall comply with the US Foreign Corrupt Practices Act and all applicable anticorruption laws (including commercial bribery laws). Vendor Representatives shall not directly or indirectly pay, offer, give, promise to pay or authorize the payment of any portion of the compensation received in connection with this Agreement or any other monies or other things of value in connection with its performance to a Government Official, as such term is defined below, to obtain or retain business or secure any improper advantage nor shall it permit such actions by a third party in connection with this Agreement. For purposes of this Section, "Government Official" means: (i) an officer or employee of any government or any department, agency, or instrumentality thereof, including government-owned or government-controlled commercial entities; (ii) an officer or employee of a public international organization; (iii) any person acting in an official capacity for or on behalf of any government or department, agency, or instrumentality or public international organization; (iv) any political party or official thereof; (v) any candidate for political office; or (vi) any other Person at the suggestion, request or direction or for the benefit of any of the above-described Persons. + +3.5 Assignment and Delegation; Change of Control. + +(a) Neither Party may assign, delegate, or otherwise transfer any of its duties or obligations under this Agreement, voluntarily or involuntarily, without the prior written consent of the other Party (which shall not be unreasonably withheld, conditioned or delayed and which shall be signed by an authorized representative of the Party giving such consent); provided, however, that without the consent of Vendor, AT&T may assign its rights, or delegate its duties, or both, in whole or in part, to any present or future Affiliate of AT&T so long as AT&T Mobility LLC shall remain liable for such Affiliate's failure to satisfy its obligations hereunder. + +(b) Each Party may assign its rights under the Agreement, but any assignment of rights will be void to the extent that (i) the assignment purports to impose upon the non-assigning Party additional costs or obligations or requires AT&T to make payments to any Person other than Vendor, (ii) the assignment purports to preclude AT&T from dealing solely and directly with Vendor in all matters pertaining to this Agreement, including with respect to payments of Structured Payments and Maintenance Fees or (iii) the assignee is a Restricted Entity. + +(c) Subject to Section 3.5(b), in the event that Vendor, prior to Location Acceptance at all Cell Sites and without the prior written consent of AT&T, consummates (i) any sale, assignment, transfer, license, lease or conveyance of any interest in any Cell Site or any of the Material or Services contemplated in this Agreement or (ii) any Change of Control of Vendor to a Restricted Entity or to any other Person who, in AT&T's reasonable discretion, lacks the financial or operational resources, skill or expertise to fulfill the obligations of Vendor contemplated by this Agreement, then AT&T may terminate this Agreement and exercise any other remedies available to AT&T under this Agreement or at law or equity, including any of its Termination Remedies set forth in the Build Addendum. If, following Location Acceptance of all Cell Sites, Vendor consummates any Change of Control of Vendor to any Restricted Entity without the prior written consent of AT&T, then AT&T shall have the right, in its sole + +Proprietary and Confidential This Agreement and information contained therein is not for use or disclosure outside of AT&T, its Affiliates, and third party representatives, and Vendor except under written agreement by the contracting parties. 10 + +Source: ATN INTERNATIONAL, INC., 10-Q, 11/8/2019 + + + + + +discretion, to (x) immediately terminate the Maintenance Addendum without further liability or obligation (other than payment of Maintenance Fees for Maintenance Services performed prior to the date of such termination), but not this Agreement or the obligation to make the Structured Payments herein; and/or (y) prepay all of the remaining Structured Payments at any time in one lump sum payment without penalty, liability or obligations (including any "make- whole" obligation or Close-Out Costs (as such term is defined in the Build Addendum)). + +(d) Any assignment, delegation or transfer for which consent is required hereby and which is made without such consent given in writing will be void. No assignment by a Party will relieve such Party of its obligations under this Agreement. + +3.6 Compliance with Laws. Vendor shall comply with all Laws applicable to Vendor's performance under this Agreement, including all Work contemplated herein and all Material, Services and Deliverables provided hereunder, and AT&T's utilization of the Cell Sites. Vendor shall procure all approvals, bonds, certificates, insurance, inspections, licenses, and permits that such Laws require for the performance of this Agreement. Vendor shall create and maintain any necessary records and provide any certificate, affidavit or other information or documentation requested or as otherwise required by AT&T: (a) to show compliance by Vendor and its Subcontractors with Laws, (b) to comply or otherwise establish AT&T's compliance with Laws or (c) to allow AT&T to timely respond to any complaints, filings, or other proceedings. + +3.7 Conflict of Interest. Vendor represents and warrants that, to its knowledge, no officer, director, employee or agent of AT&T has been or will be employed, retained or paid a fee, or otherwise has received or will receive, any personal compensation or consideration, by or from Vendor or any of Vendor's officers, directors, employees or agents in connection with the obtaining, arranging or negotiation of this Agreement or other documents entered into or executed in connection with this Agreement. + +Vendor shall not offer or give gratuities in the form of gifts, entertainment, concessions, or otherwise to AT&T or its employees or representative(s), or any person related by blood or marriage to such individuals for the express or implied purpose of obtaining or securing favorable treatment with respect to this Agreement, or in the inspection or acceptance of the Services to be performed thereunder. Vendor shall not engage in any conduct which will constitute or appear to constitute a conflict of interest between Vendor's responsibility to AT&T under this contract and Vendor's responsibility to any person, business, or other entity with which Vendor may have had any dealings. + +3.8 Construction and Interpretation + +(a) This Agreement has been prepared jointly and has been the subject of arm's length and careful negotiation. Each Party has been given the opportunity to independently review this Agreement with legal counsel and other consultants, and each Party has the requisite experience and sophistication to understand, interpret and agree to the particular language of its provisions. Accordingly, the drafting of this Agreement is not to be attributed to either Party. + +Proprietary and Confidential This Agreement and information contained therein is not for use or disclosure outside of AT&T, its Affiliates, and third party representatives, and Vendor except under written agreement by the contracting parties. 11 + +Source: ATN INTERNATIONAL, INC., 10-Q, 11/8/2019 + + + + + +(b) Article, Section and paragraph headings contained in this Agreement are for reference purposes only and are not to affect the meaning or interpretation of this Agreement. The word "include" in every form means to include without limitation by virtue of enumeration and a derivative of a defined term shall have the meaning appropriate to the context of its use. Whenever this Agreement refers to a consent or approval to be given by either Party, unless such consent is expressly required to be given in writing and signed by the Party giving approval or consent, then such consent or approval is effective if given in an email from the individuals identified in Section 3.26 or designated by Vendor as its Project Manager pursuant to Section 18 of the Build Addendum. The Parties agree that time is of the essence with respect to AT&T's approval rights pursuant to this Agreement and the Build Addendum and Maintenance Addendum and Vendor is relying on the timeliness of such approvals or consents as set forth herein in order to complete the Services. The use of singular words includes the plural and vice versa. + +3.9 Cumulative Remedies. The rights and remedies of the Parties set forth in this Agreement are not exclusive of, but are cumulative to, any rights or remedies now or subsequently existing at law, in equity, by statute or otherwise, except in those cases where this Agreement specifies that a particular remedy is sole or exclusive, but neither Party may retain the benefit of inconsistent remedies. No single or partial exercise of any right or remedy with respect to one breach of this Agreement precludes the simultaneous or subsequent exercise of any other right or remedy with respect to the same or a different breach. + +3.10 Delivery, Performance and Acceptance + +(a) Vendor acknowledges that AT&T is responsible for the deployment of the FirstNet Nationwide Public Safety Broadband Network (the "NPSBN") in accordance with the terms of AT&T's agreement with the FirstNet Authority and that AT&T has provided certain terms of such agreement to Vendor but has not provided Vendor with a copy of such agreement with the FirstNet Authority. Therefore, Vendor understands generally that AT&T's business requires prompt Delivery of Material and provision of Services by the specified Delivery Dates. Furthermore, the Parties agree that dates for Delivery of Material and Services are firm subject to any Excusable Delay, time is of the essence, and, subject to any Excusable Delay, Vendor will complete such Delivery in strict conformance with the Specifications. + +(b) Vendor shall perform or cause to be performed testing sufficient to ensure that all of the Material and Deliverables perform in accordance with the Specifications, including all of the Cell Site optimization and testing contemplated by the Build Addendum. If testing indicates that any of the Cell Sites (or any of the Material or Deliverables relating thereto) does not conform to the Specifications, then Vendor shall notify AT&T, in writing, of such non- conformance promptly following Vendor's knowledge of such non- conformance. AT&T will advise Vendor whether Vendor should Deliver the non-conforming Cell Site or any of the Deliverables or Material relating thereto. In the event AT&T and Vendor agree in a signed writing to Deliver non-conforming Cell Sites or any of the Deliverables or Material relating thereto ("Provisional Location Acceptance"), Vendor shall use all commercially reasonable efforts promptly to cure any such non- conformance after Provisional Location Acceptance of + +Proprietary and Confidential This Agreement and information contained therein is not for use or disclosure outside of AT&T, its Affiliates, and third party representatives, and Vendor except under written agreement by the contracting parties. 12 + +Source: ATN INTERNATIONAL, INC., 10-Q, 11/8/2019 + + + + + +the non-conforming Cell Site; provided, however, that if Vendor has not cured all such non- conformance with respect to the Cell Site within nine (9) months following Provisional Location Acceptance (or sixty (60) days if the non-conformance is caused by the existence of a Lien, and in each case subject to an Excusable Delay), then AT&T may elect in its sole discretion, to complete any outstanding work, and recoup any costs by an offset against the Maintenance Fees due to Vendor for all Cell Sites. If such non-conforming Cell Site has not been cured within such nine (9) month cure period (or 60-day cure period in the case of a Lien), AT&T shall have no further obligation to pay any Maintenance Fees to Vendor with respect to such non-conforming Cell Site until the non-conformance has been cured. Provisional Location Acceptance of any such non-conforming Cell Site or receipt of any of the Deliverables or Material relating thereto shall not constitute Location Acceptance and shall not constitute a waiver of any of AT&T's rights, warranties, or remedies under this Agreement or elsewhere, including Termination Remedies under the Build Addendum. Location Acceptance of any such non-conforming Cell Site shall not occur until all non-conformance has been cured; provided, that AT&T shall begin making Structured Payments for such Cell Site upon Provisional Location Acceptance in the same manner as if it were Location Acceptance. + +(c) In no event shall Location Acceptance be deemed to occur absent a signed writing from AT&T prior to the date Vendor completes its Delivery of all Material and Services in accordance with the Specifications related to the Cell Site as required by the Build Addendum. + +(d) If AT&T advises Vendor of, or Vendor becomes aware of a landlord complaint, Vendor shall, if necessary, promptly respond to the landlord complaint, shall commence any agreed upon corrections promptly, and shall diligently pursue the same until completion. + +(e) In addition to the provisions set forth in this Section, AT&T shall be able to exercise any or all remedies available to it under the Build Addendum and Maintenance Addendum. + +3.11 Entire Agreement. Except to the extent otherwise expressly referenced herein, including the matters set forth in the Transport Agreement and the Master License Agreement, this Agreement and all addendums, appendices, exhibits, attachments, schedules and documents incorporated herein by reference, constitutes the final, complete, and exclusive expression of the Parties' agreement on the matters contained in this Agreement. The terms of this Agreement shall govern in lieu of all other pre-printed, standardized or other provisions that may otherwise appear in any other paper or electronic record of either Party (such as standard terms on order or acknowledgment forms, advance shipping notices, invoices, time sheets, and packages, shrink wrap terms, and click wrap terms). Except to the extent set forth in the Transport Agreement and the Master License Agreement, all prior written and oral negotiations and agreements, and all contemporaneous oral negotiations and agreements, between the Parties on the matters contained in this Agreement are expressly merged into and superseded by this Agreement. The Parties do not intend that the provisions of this Agreement be explained, supplemented, or qualified through evidence of trade usage or any prior course of dealings or any course of performance under any prior agreement. In entering into this Agreement, neither Party has relied upon any statement, estimate, forecast, projection, representation, warranty, action or agreement of the other Party except for those expressly contained in this Agreement. There are no + +Proprietary and Confidential This Agreement and information contained therein is not for use or disclosure outside of AT&T, its Affiliates, and third party representatives, and Vendor except under written agreement by the contracting parties. 13 + +Source: ATN INTERNATIONAL, INC., 10-Q, 11/8/2019 + + + + + +conditions precedent to the effectiveness of this Agreement other than any such condition expressly stated in this Agreement. + +3.12 Force Majeure + +(a) Except for AT&T's obligations to make the Structured Payments and pay the Maintenance Fees, a Party is excused from performing its obligations under this Agreement only if, to the extent that, and for so long as such Party's performance is actually prevented or delayed by acts of God or the public enemy, acts of civil or military authority, terrorists acts, embargoes, epidemics, war, riots, insurrections, fires, explosions, earthquakes, floods, and weather events that are beyond its reasonable control and could not have been prevented or avoided by its exercise of due diligence and such Party gives written notice to the other Party, as soon as practicable under the circumstances, of the act or event that so prevents such Party from performing its obligations (each, a "Force Majeure Event"). After Vendor provides written notice to AT&T of any Force Majeure Event in accordance with the preceding sentence, the Parties shall extend the applicable Delivery Date or Completion Date for the length of such Force Majeure Event and, subject to Subsection (b) below, such Force Majeure Event shall be an Excusable Delay. + +(b) If Vendor is the Party whose performance is prevented or delayed by a Force Majeure Event and AT&T determines that the Force Majeure Event is reasonably likely to cause a material delay of the ultimate Delivery Date or Completion Date for any Cell Site, then AT&T may elect to, after consultation with Vendor and good faith discussion to negotiate another resolution: + +(i) terminate its obligations with respect to each Cell Site affected by or related to such Force Majeure Event under this Agreement and exercise any of the Termination Remedies set forth in the Build Addendum, in each case without liability to Vendor; provided that AT&T shall pay to Vendor, an amount equal to demonstrated costs incurred by Vendor for any Work completed (in accordance with applicable Specifications and requirements) to the extent such Work is transferable to and usable by AT&T as of the effective time of termination of the applicable terminated Cell Site, which amount shall not exceed $[***]; or + +(ii) suspend this Agreement or any part hereof for the duration of such Force Majeure Event solely with respect to any Cell Site affected by or related to such Force Majeure Event, obtain Work elsewhere (including AT&T's performance of the Work itself), at AT&T's cost and expense (which shall reduce the Structured Payments applicable to such Cell Site by such amount, but in no event shall such reduction cause the Structured Payments to be less than an amount equal to the demonstrated costs incurred by Vendor up to the date of suspension), and provide notice to Vendor when AT&T desires for Vendor to resume its performance under this Agreement for the remaining Work at such Cell Site. + +3.13 Government Contract Provisions and Flow Downs + +(a) To the extent that Vendor's performance is required to comply with certain executive orders (including E.O. 11246 and E.O. 13201) and statutes (including Section 503 of the + +Proprietary and Confidential This Agreement and information contained therein is not for use or disclosure outside of AT&T, its Affiliates, and third party representatives, and Vendor except under written agreement by the contracting parties. 14 + +Source: ATN INTERNATIONAL, INC., 10-Q, 11/8/2019 + + + + + +Rehabilitation Act of 1973, as amended; the Vietnam Era Veteran's Readjustment Assistance Act of 1974; Section 8116 of the Defense Appropriations Act for Fiscal Year 2010 (Pub. L. 111-118); and the Jobs for Veterans Act) pertaining to government contractors, Vendor shall: + +(i) comply with such executive orders and statutes, and their implementing regulations, as amended from time to time; and + +(ii) fulfill the obligations of a contractor under the clauses incorporated by this Section, + +in each case, to the extent that Vendor's Services are required to comply with such rules and regulations. + +(b) This Section incorporates the following statutes and rules: + +(i) "Affirmative Action For Workers With Disabilities" (at 48 CFR §52.222-36); (ii) "Employment Reports On Special Disabled Veterans, Veterans Of The Vietnam Era, and Other Eligible Veterans" (at 48 CFR §52.222-37); (iii) "Equal Employment Opportunity" (at 48 CFR §52.222-26); (iv) "Equal Employment Opportunity Clause" (at 41 CFR §60-1.4(a)); (v) "Equal Opportunity For Special Disabled Veterans And Veterans of the Vietnam Era" (at 41 CFR §60- 250.5); (vi) "Equal Opportunity for Disabled Veterans, Recently Separated Veterans, Other Protected Veterans, and Armed Forces Service Medal Veterans" (at 41 CFR §60- 300.5); (vii) "Equal Opportunity For Workers With Disabilities" (at 41 CFR §60-741.5); (viii) "Prohibition of Segregated Facilities" (at 48 CFR §52.222-21); (ix) "Small Business Subcontracting Plan" (at 48 CFR §52.219-9); (x) "Utilization Of Small Business Concerns" (at 48 CFR §52.219-8); (xi) "Whistleblower Protections Under the American Recovery and Reinvestment Act of 2009" (FAR 52.203-15); (xii) "American Recovery and Reinvestment Act - Reporting Requirements" (FAR 52.204- 11); (xiii) "GAO/IG Access" (FAR 52.212-5(d) (Alt. II), FAR 52.214-26(c) (Alt. I), FAR 52.215- 2(d) (Alt. I)); (xiv) "Davis-Bacon Act" (FAR 52.222-6); (xv) "Buy American Act" (FAR 52.225-21, FAR 52.225-22, FAR 52.225-23, & FAR 52.225-24); (xvi) "Whistleblower Protections" (Pub. L. No. 111-5, Section 1553); (xvii) "Award term—Reporting and registration requirements under section 1512 of the Recovery Act" (2 CFR §176.50); (xviii) "GAO/IG Access" (Pub. L. No. 111-5, Section 902, 1514 and 1515); (xix) "Award term—Wage Rate Requirements under Section 1606 of the Recovery Act" (2 CFR §176.190); and (xx) "Buy American Requirements" (2 CFR §176.140, 2 CFR §176.150, 2 CFR §176.160, & 2 CFR §176.170). + +Proprietary and Confidential This Agreement and information contained therein is not for use or disclosure outside of AT&T, its Affiliates, and third party representatives, and Vendor except under written agreement by the contracting parties. 15 + +Source: ATN INTERNATIONAL, INC., 10-Q, 11/8/2019 + + + + + +(c) Vendor agrees to comply with all Government Flow Downs and Contract Clauses to the extent applicable to Vendor's performance as specifically required by that certain contract awarded to an Affiliate of AT&T by the FirstNet Authority regarding the FirstNet Nationwide Public Safety Broadband Network (the "FirstNet Agreement") and such Government Flow Downs and Contract Clauses that may be applicable are attached to this Agreement as Exhibit A, the terms of which are hereby fully incorporated into the Agreement. + +3.14 Governing Law. The laws of the State of New York (excluding any laws that direct the application of another jurisdiction's law) govern all matters arising out of or relating to this Agreement and all of the transactions it contemplates, including its validity, interpretation, construction, performance, and enforcement. + +3.15 Indemnity + +(a) Except for Covered Losses that are exclusively provided for in the Section entitled "Infringement," Vendor shall indemnify, hold harmless, and defend the AT&T Indemnified Parties, in accordance with this Section, against any Third Party Loss arising from, or in connection with, or resulting from, (i) any default, violation, breach or nonperformance by Vendor or any Vendor Person of Vendor's representations, warranties, covenants and obligations under this Agreement, the Build Addendum or the Maintenance Addendum, (ii) the Deliverables, Material or Services furnished by Vendor or any Vendor Person and the use, construction, maintenance, operation or occupancy of any Cell Site by Vendor or any Vendor Person, (iii) the negligent or willful acts or omissions of Vendor and each Vendor Person with respect to this Agreement or (iv) Employment Claims. Subject to AT&T's obligation to reimburse or indemnify Vendor as set forth in Subsection (c) or (d) below, respectively, Vendor's duty to indemnify, hold harmless, and defend the AT&T Indemnified Parties against any Third Party Loss extends to any Third Party Loss that may be caused or alleged to be caused in part by the negligence of any of the AT&T Indemnified Parties to the fullest extent that such indemnification is permitted by applicable Law. + +(b) AT&T shall promptly notify Vendor in writing of any claim, demand, suit, cause of action or legal proceeding that may give rise to a claim against Vendor for defense and indemnification under this Section 3.15. If AT&T fails to give notice, Vendor is still obligated to indemnify, hold harmless and defend the AT&T Indemnified Parties, except that Vendor is not liable for any Litigation Expense that AT&T incurs before the time when notice is given or for any Loss or Liability to the extent that Vendor can show that such delay or failure to provide notice actually and materially prejudiced it in defending against such Loss or Liability. + +(c) Vendor shall conduct the defense (employing one or more competent attorneys from a nationally recognized law firm), at Vendor's expense, against any claim, demand, suit or cause of action within the scope of Subsection (a) above, whether or not litigation is actually commenced or the allegations are meritorious and, upon AT&T's request, keep AT&T informed as to the progress of such defense. At its own option and expense, AT&T may employ separate counsel, including in- house counsel, to conduct the AT&T + +Proprietary and Confidential This Agreement and information contained therein is not for use or disclosure outside of AT&T, its Affiliates, and third party representatives, and Vendor except under written agreement by the contracting parties. 16 + +Source: ATN INTERNATIONAL, INC., 10-Q, 11/8/2019 + + + + + +Indemnified Parties' defense against such a claim. AT&T and Vendor shall cooperate in the defense of any such claim. Vendor may control the defense and settlement of such a claim, but if the settlement of a claim may have an adverse effect on any of the AT&T Indemnified Parties, then Vendor shall not settle such claim without the consent of AT&T, and AT&T shall not unreasonably withhold, condition or delay its consent. To the extent that Vendor pays any part of a judgment, award or settlement with respect to the Third Party Loss and any other expenses related to the resolution of the Third Party Loss, including costs, interest, and Attorneys' Fees, as a result of being self-insured (including any deductible) or as a result of insurance coverage being insufficient to cover the amount of the judgment, award or settlement, upon final resolution of the claim, demand, suit or cause of action, AT&T shall reimburse Vendor for the pro-rata portion of any such payment based on the AT&T Indemnified Parties' fault relative to Vendor's fault. + +(d) In addition to AT&T's obligation to reimburse Vendor as set forth in Subsection (c) above, AT&T shall indemnify, hold harmless and defend the Vendor Indemnified Parties against any Third Party Loss arising solely from or in connection with, resulting solely from, or relating solely to (i) the AT&T Provided Equipment furnished by AT&T or (ii) the negligent or intentionally wrongful acts or omissions of any of the AT&T Indemnified Parties under this Agreement; in each case in the same manner as set forth in Subsection (b) and in the first four sentences of Subsection (c), with the appropriate changes having been made. + +(e) Subject to AT&T's obligation to reimburse or indemnify Vendor as set forth in Subsection (c) and (d) above, respectively, Vendor shall bring no claim or action for indemnification, contribution, or subrogation against any of the AT&T Indemnified Parties nor shall Vendor implead any of them in any action brought by another, based on injury to the person or death arising out or relating to Vendor's performance under this Agreement. If, through any such action, Vendor ever acquires a Lien on a judgment against any of the AT&T Indemnified Parties, then Vendor shall assign such Lien to AT&T. Vendor waives any immunity from indemnification (only with respect to the AT&T Indemnified Parties) that Vendor may hold, by virtue of Vendor's compliance with its workers' compensation obligations in any jurisdiction, even if such immunity arises under the constitution or statutes of such jurisdiction. + +(f) Notwithstanding anything to the contrary contained in this Section, the Parties intend that any amount for which any of the AT&T Indemnified Parties might otherwise have an obligation of reimbursement to Vendor for its pro-rata portion pursuant to this Section will be net of any insurance proceeds or other amounts paid by Vendor's insurance company ("Insurance Proceeds") that actually reduce the amount that Vendor is required to pay on account of a Third Party Loss. Accordingly, the amount with respect to which AT&T is required to reimburse Vendor its pro-rata portion will be reduced by any Insurance Proceeds theretofore actually paid on behalf of Vendor in respect of the related Third Party Loss. If Vendor receives a reimbursement required by this Section from AT&T in respect of the AT&T Indemnified Parties' pro-rata share + +Proprietary and Confidential This Agreement and information contained therein is not for use or disclosure outside of AT&T, its Affiliates, and third party representatives, and Vendor except under written agreement by the contracting parties. 17 + +Source: ATN INTERNATIONAL, INC., 10-Q, 11/8/2019 + + + + + +of the amount of any Third Party Loss and subsequently receives Insurance Proceeds or the benefit of any payments made for Vendor or on its behalf by any insurance company or other entity with respect to such Third Party Loss, then Vendor will pay to AT&T, within fifteen (15) days after such receipt of Insurance Proceeds or benefit of any payments, an amount equal to the excess of the reimbursement that Vendor received from AT&T over the amount of the reimbursement that would have been due under this Section from AT&T if the Insurance Proceeds had been received, realized or recovered before the reimbursement was made by AT&T. An insurer that would otherwise be obligated to pay any amount as a result of a Third Party Loss shall not be relieved of the responsibility with respect thereto or, by virtue of the indemnification or reimbursement provisions hereof, have any subrogation rights with respect thereto, it being expressly understood and agreed that no insurer or any other third party shall be entitled to a "wind-fall" (i.e., a benefit they would not be entitled to receive in the absence of the indemnification provisions) by virtue of the indemnification or reimbursement provisions hereof. Vendor shall have a good faith obligation to seek, and AT&T shall provide its reasonable cooperation to Vendor in its efforts, to collect or recover any Insurance Proceeds that may in any way be available to reduce the amount of any Third Party Loss. + +3.16 Information + +(a) In connection with this Agreement, including Vendor's performance of its obligations hereunder and AT&T's receipt of Work, either Party may find it beneficial to disclose to the other Party (which may include permitting or enabling the other Party's access to) certain of its Information. For the purpose of this clause, AT&T's disclosure of Information to Vendor includes any Information that Vendor receives, observes, collects, stores, or accesses, in any way, in connection with this Agreement and all such Information disclosed by AT&T hereunder shall be and shall remain the sole and exclusive property of AT&T. Information of a disclosing Party shall be deemed to be confidential or proprietary only if it is clearly marked or otherwise identified by the disclosing Party as being confidential or proprietary, provided that if it is orally or visually disclosed (including Information conveyed to an answering machine, voice mail box or similar medium), the disclosing Party shall designate it as confidential or proprietary at the time of such disclosure, however, failure to do so shall not prevent such Information from receiving the protections afforded to it in this Section 3.16. Notwithstanding the foregoing, a disclosing Party shall not have any such obligation to so mark or identify, or to so designate, Information that the disclosing Party discloses to or is otherwise obtained by the other Party's employees, contractors, or representatives (i) who are located on the disclosing Party's premises; (ii) who access the disclosing Party's systems; or (iii) who otherwise obtain AT&T Information and/or AT&T Customer Information in connection with this Agreement; any such Information so disclosed shall automatically be deemed to be confidential and proprietary. Additionally, the failure to mark or designate information as being confidential or proprietary will not waive the confidentiality where it is reasonably obvious, under the circumstances surrounding disclosure, that the Information is confidential or proprietary; any such Information so disclosed or obtained shall automatically be deemed to be confidential and proprietary. For greater certainty, Information provided by either Party to the other Party prior to the Effective Date of this Agreement in connection with a separate + +Proprietary and Confidential This Agreement and information contained therein is not for use or disclosure outside of AT&T, its Affiliates, and third party representatives, and Vendor except under written agreement by the contracting parties. 18 + +Source: ATN INTERNATIONAL, INC., 10-Q, 11/8/2019 + + + + + +non-disclosure agreement (howsoever denominated) is also subject to the terms of this Agreement. Neither Party shall disclose Information under this Agreement that includes, in any form, any of the following: customer or employee personal information, credit card and credit related information, health or financial information, and/or authentication credentials, without the express consent of the disclosing Party, which consent shall be in writing and signed by the disclosing party. + +(b) With respect to the Information of the disclosing Party, the receiving Party shall: + +(i) hold all such Information in confidence with the same degree of care with which it protects its own confidential or proprietary Information, but with no less than reasonably prudent care; + +(ii) restrict disclosure of such Information solely to its and its Affiliates' employees, contractors, directors, advisors, financing sources and agents with a need to know such Information, advise such persons of their confidentiality obligations with respect thereto, and ensure that such persons are bound by obligations of confidentiality reasonably comparable to those imposed in this Agreement; + +(iii) use such Information only as needed to perform its obligations (and, if AT&T is the receiving Party, to receive the benefits of the Work provided) under this Agreement; + +(iv) except as necessary under the immediately preceding Subsection (iii), not copy, distribute, or otherwise use any such Information or allow anyone else to copy, distribute, or otherwise use such Information; and ensure that any and all copies bear the same notices or legends, if any, as the originals; and + +(v) upon the disclosing Party's request, promptly return, or destroy all or any requested portion of the Information, including tangible and electronic copies, notes, summaries, extracts, mail or other communications, and provide written certification within fifteen (15) business days to the disclosing Party that such Information has been returned or destroyed; provided, however, that (i) the receiving Party may retain copies of such documents and other tangible embodiments of Information as required by applicable Law to which the receiving Party is subject and (ii) the receiving Party shall have no obligation to destroy or delete electronic copies of, or material containing, Information that are automatically generated through data backup and/or archiving systems and that are not readily accessible by the receiving Party's business personnel. Notwithstanding the expiration or termination of this Agreement or any return or destruction of Information, all Information, including without limitation that as may be retained in accordance with the above-referenced exceptions, will continue to be subject to the provisions of this Section 3.16 for so long as such Information remains in the custody or control of the receiving Party. + +Proprietary and Confidential This Agreement and information contained therein is not for use or disclosure outside of AT&T, its Affiliates, and third party representatives, and Vendor except under written agreement by the contracting parties. 19 + +Source: ATN INTERNATIONAL, INC., 10-Q, 11/8/2019 + + + + + +(c) Except for Customer Information, neither Party shall have any obligation to the other Party with respect to Information which: + +(i) at the time of disclosure was already known to the receiving Party free of any obligation to keep it confidential (as evidenced by the receiving Party's written records prepared prior to such disclosure); + +(ii) is or becomes publicly known through no wrongful act of the receiving Party (such obligations ceasing at the time such Information becomes publicly known); + +(iii) is lawfully received from a third party, free of any obligation to keep it confidential; + +(iv) is independently developed by the receiving Party or a third party, as evidenced by the receiving Party's written records, and where such development occurred without any direct or indirect use of or access to the Information received from the disclosing Party, or + +(v) the disclosing Party consents in writing to be free of restriction. + +(d) If a receiving Party is required to provide Information of a disclosing Party to any court or government agency pursuant to a written court order, subpoena, regulatory demand, request under the National Labor Relations Act (an "NLRA Request"), or process of law, the receiving Party must, unless prohibited by applicable Law, first provide the disclosing Party with prompt written notice of such requirement and reasonable cooperation to the disclosing Party should it seek protective arrangements for the production of such Information. The receiving Party will (i) take reasonable steps to limit any such provision of Information to the specific Information required by such court or agency, and (ii) continue to otherwise protect all Information disclosed in response to such order, subpoena, regulation, NLRA Request, or process of law. + +(e) A receiving Party's obligations with respect to any particular Information of a disclosing Party shall remain in effect and survive the expiration or termination of this Agreement for a period of five (5) years thereafter. Notwithstanding anything to the contrary herein, Customer Information and trade secrets shall remain confidential indefinitely and shall never be disclosed or used without the prior written approval of an authorized representative of AT&T. + +(f) Notwithstanding anything to the contrary in this Agreement (including in this Section), Vendor understands and acknowledges that Vendor information related to installation, operation, repair, or maintenance shall not be considered confidential or proprietary, and AT&T may disclose any such information for purposes of installing, operating, repairing, replacing, removing, and maintaining the Material. + +(g) Notwithstanding anything to the contrary contained in this Agreement (including in this Section), AT&T may disclose the existence of this Agreement and the FirstNet-related terms contained herein and high level confidential information (excluding fees and specific terms and conditions) to relevant employees of the FirstNet Authority and any state, county, city, or + +Proprietary and Confidential This Agreement and information contained therein is not for use or disclosure outside of AT&T, its Affiliates, and third party representatives, and Vendor except under written agreement by the contracting parties. 20 + +Source: ATN INTERNATIONAL, INC., 10-Q, 11/8/2019 + + + + + +other locality in which the Cell Sites that are to be built in accordance with this Agreement and the Build Addendum will be located. + +3.17 Infringement + +(a) Definitions. For purposes of this Section: + +(i) "Infringement Loss" shall mean any Liability, loss, claim, demand, suit, cause of action, settlement payment, cost, expense, interest, award, judgment, damages (including punitive and exemplary damages and increased damages for willful infringement), Liens, fines, fees, penalties, and Litigation Expense. + +(ii) "Provided Elements" shall mean any Material, Services or Deliverables or other products, hardware, software, interfaces, systems, content, services, processes, methods, documents, materials, data or information, or any functionality therein, provided to any AT&T Indemnified Party by or on behalf of Vendor (including by any of Vendor's Subcontractors or distributors or any Vendor Person) pursuant to this Agreement (including under any addendum, order, statement of work, exhibit, schedule or other document under, subordinate to, or referencing this Agreement); provided, however, that Provided Elements shall not include any AT&T Provided Equipment. + +(b) Obligations. + +(i) Vendor shall indemnify, hold harmless, and defend (which shall include cooperating with AT&T as set forth below in the defense of) each of the AT&T Indemnified Parties against any Infringement Loss or other Liability resulting from, arising out of or relating to any allegation, threat, demand, claim or lawsuit brought by any third party ("Covered Claim"), regardless of whether such Covered Claim is meritorious, of: + +1. infringement (including direct, contributory and induced infringement) of any patent, copyright, trademark, service mark, or other Intellectual Property Right in connection with the Provided Elements, including any Covered Claim of infringement based on: + +A. making, repair, receipt, use, importing, sale or disposal (and offers to do any of the foregoing) of Provided Elements (or having others do any of the foregoing, in whole or in part, on behalf of or at the direction of the AT&T Indemnified Parties), or + +B. use of Provided Elements in combination with products, hardware, software, interfaces, systems, content, services, processes, methods, documents, materials, data or information not furnished by Vendor, including use in the form of the making, having made or using of an apparatus or system, or the making or practicing of a process or method unless the function performed by the Provided Elements in such combination is of a type that is neither normal nor reasonably anticipated for such Provided Elements (a "Combination Claim"); + +Proprietary and Confidential This Agreement and information contained therein is not for use or disclosure outside of AT&T, its Affiliates, and third party representatives, and Vendor except under written agreement by the contracting parties. 21 + +Source: ATN INTERNATIONAL, INC., 10-Q, 11/8/2019 + + + + + +2. misappropriation of any trade secret, proprietary or non-public information in connection with the Provided Elements; + +any and all such Infringement Loss or other Liabilities referenced in this Subsection (b)(i) being hereinafter referred to as a "Covered Loss." + +(ii) Insofar as Vendor's obligations under Subsection (b)(i) result from, arise out of, or relate to a Covered Claim that is a Combination Claim, Vendor shall be liable to pay only its Proportionate Share of the Covered Loss associated with such Combination Claim. The "Proportionate Share" payable by Vendor shall be a portion of the Covered Loss determined, not at AT&T's sole discretion, but rather on an objectively fair and equitable basis (taking into account the relevant facts and circumstances and using the same standards that would be applied by a court or other neutral adjudicator under applicable Law) to be attributable to Vendor based on the relative materiality of the role played by the applicable Provided Elements in the Combination Claim. If Vendor believes AT&T's assessment of Vendor's Proportionate Share is not fair and equitable, then Vendor's Proportionate Share shall be determined, insofar as possible, through good faith negotiation between the Parties; provided, however, that a failure of the Parties to agree on Vendor's Proportionate Share shall not relieve Vendor of its obligations to pay its Proportionate Share under this Section. Vendor shall make payments in satisfaction of its Proportionate Share obligation whenever such payments become due. In no event shall Vendor be liable, with regard to a Combination Claim, for more than its Proportionate Share. If the Parties cannot mutually agree on Vendor's Proportionate Share within sixty (60) days of AT&T's providing Vendor with AT&T's assessment of Vendor's Proportionate Share, either Party may notify the other Party that a dispute has occurred, at which point the Parties shall follow the dispute resolution procedures set forth in Section 4.8 ("Dispute Resolution"), provided that in preparation for the escalation set forth in Section 4.8(a), Vendor shall notify AT&T in writing of the percentage which Vendor believes, in good faith, constitutes Vendor's Proportionate Share ("Vendor's Minimum Share"). If arbitration is invoked under Section 4.8(b), all arbitrators shall be qualified by education, training, and experience in both the intellectual property law (e.g., patent law) and the technology relevant to any dispute under this Section. Throughout the course of attempting to resolve the dispute, Vendor shall continue to pay Vendor's Minimum Share to AT&T as such payments become due. When Vendor's Proportionate Share is finally determined (either through escalation or arbitration, as the case may be) ("Determined Proportionate Share"), there shall be a true-up and Vendor shall promptly pay to AT&T the aggregate amount of past underpayments (i.e., the difference between monies previously due computed at the Determined Proportionate Share, minus those amounts that Vendor had actually paid to AT&T), if any. Thereafter, Vendor shall promptly pay its Determined Proportionate Share. (In the event that the Determined Proportionate Share is less than the Vendor's Minimum Share, AT&T shall refund to Vendor any past overpayments.) In no event shall AT&T's acceptance of payments computed at Vendor's Minimum Share prejudice or waive any of AT&T's rights under this Agreement. + +Proprietary and Confidential This Agreement and information contained therein is not for use or disclosure outside of AT&T, its Affiliates, and third party representatives, and Vendor except under written agreement by the contracting parties. 22 + +Source: ATN INTERNATIONAL, INC., 10-Q, 11/8/2019 + + + + + +(iii) AT&T shall have sole control over the defense of (1) any Combination Claim and (2) any other Covered Claim that involves Vendor and one or more other suppliers of AT&T or its Affiliates ((1) and (2) being hereinafter referred to separately and collectively as a "Compound Claim"). Vendor shall cooperate with AT&T to facilitate the defense and may, at its option and at its own expense, participate with AT&T in the defense with counsel of its own choosing. Where AT&T controls the defense under this Subsection (b)(iii), AT&T shall make good faith efforts to enter into a reasonable joint defense or common interest agreement with Vendor. + +(iv) Insofar as Vendor's obligations under Subsection (b)(i) result from, arise out of, or relate to a Covered Claim other than a Compound Claim, Vendor shall have the discretion, but not the obligation, to control the defense of the Covered Claim. In the event that Vendor controls the defense of the Covered Claim, Vendor shall retain as its lead counsel, subject to AT&T's approval (which shall not be withheld, conditioned or delayed except for reasons of apparent or actual conflict of interest), one or more competent attorneys from a nationally recognized law firm who have significant experience in litigating intellectual property claims of the type at issue, and the AT&T Indemnified Parties may, at their option and sole expense, participate with Vendor in the defense of such Covered Claim. + +(v) AT&T shall notify Vendor promptly of any Covered Claim; provided, however, that any delay in such notice shall not relieve Vendor of its obligations under this Section, except insofar as Vendor can show that such delay actually and materially prejudiced Vendor. + +(vi) In no event shall Vendor settle, without AT&T's prior written consent, any Covered Claim, in whole or in part, in a manner that would require any AT&T Indemnified Party to discontinue or materially modify its products or services (or offerings thereof). In no event shall Vendor enter into any agreement related to any Covered Claim or to the Intellectual Property Rights asserted therein that discharges or mitigates Vendor's liability to the third-party claimant but fails to fully discharge all of AT&T's liabilities as to the Covered Loss. + +(c) Continued Use of Provided Elements Upon Injunction. Without in any manner limiting the foregoing indemnification, if, as a result of a Covered Claim, (i) the AT&T Indemnified Parties' rights under this Agreement are restricted or diminished, or (ii) an injunction, exclusion order, or other order from a court, arbitrator or other competent tribunal or governmental authority preventing or restricting the AT&T Indemnified Parties' use or enjoyment of the Provided Elements is issued, imminent, or reasonably likely to be issued, then, in addition to its other obligations set forth in this Section, Vendor, in any case at its sole expense (or, in the case of a Combination Claim, at its fairly and equitably apportioned expense) and at no loss, cost or damage to the AT&T Indemnified Parties or their customers, shall use commercially reasonable efforts to obtain for the AT&T Indemnified Parties the right to continue using or conducting other activities with respect to the Provided Elements (or, in the case of a Combination Claim, shall use commercially reasonable efforts, in cooperation as reasonably needed with other interested parties, to obtain for the AT&T Indemnified Parties the right to continue using or conducting other activities with respect to the Provided Elements in the combination at issue); provided that if Vendor is unable to obtain such right, then Vendor + +Proprietary and Confidential This Agreement and information contained therein is not for use or disclosure outside of AT&T, its Affiliates, and third party representatives, and Vendor except under written agreement by the contracting parties. 23 + +Source: ATN INTERNATIONAL, INC., 10-Q, 11/8/2019 + + + + + +shall, after consulting with and obtaining the written approval of the AT&T Indemnified Parties, provide modified or replacement non-infringing Provided Elements that are (or, in the case of a Combination Claim, shall use commercially reasonable efforts, in cooperation as reasonably needed with other interested parties, to provide a modified or replacement non- infringing combination, with the Provided Elements being modified or replaced as needed therein, that is) equally suitable and functionally equivalent while retaining the quality of the original Provided Elements and complying fully with all the representations and warranties set forth in this Agreement and all Specifications; provided further that if Vendor is unable in this way to provide such modified or replacement non-infringing Provided Elements, then AT&T shall have the right, at its option and without prejudice to any other rights or remedies that AT&T has in contract, law or equity: (1) to exercise any of the Termination Remedies set forth in the Build Addendum and to terminate AT&T's obligations under this Agreement with respect to the impacted Cell Sites and receive a reduction in the Maintenance Fees with respect to such Cell Site(s), and/or (2) to require Vendor, as applicable, to remove, accept return of, or discontinue the provision of the Provided Elements, to refund to AT&T the purchase price thereof or other monies paid therefor (subject, in the case of Provided Elements other than services, to reduction based on the amount of depreciation or amortization over the useful life of the Provided Elements at issue), and to reimburse AT&T for any and all reasonable out-of- pocket expenses of removing, returning or discontinuing such Provided Elements. + +(d) Elimination of Charges. After AT&T ceases, as a result of actual or claimed infringement or misappropriation, to exercise the rights granted under this Agreement with respect to the Provided Elements, AT&T has no obligation to pay Vendor any Structured Payments or Maintenance Fees that would otherwise be due under this Agreement for such rights. + +(e) Exceptions. Vendor shall have no liability or obligation to any of the AT&T Indemnified Parties for that portion of a Covered Loss which is based on (and only to the extent such portion is based on): + +(i) use of the Provided Elements by the AT&T Indemnified Parties in a manner that constitutes a material breach of this Agreement; or + +(ii) an unauthorized modification of the Provided Elements by an AT&T Indemnified Party; or + +(iii) Vendor's conformance to the AT&T Indemnified Party's written specifications, unless any one or more of the following is true: + +1. there was a technically feasible non-infringing means of complying with those specifications, unless Vendor can show that, at the time of such compliance, such non- infringing means would have been cost-prohibitive (whether on an individual Cell Site basis, or across multiple Cell Sites as set forth in the Build Addendum); or + +2. the relevant specifications are designed to bring the Provided Elements into compliance with, or have the Provided Elements conform to, an industry standard, which standard is promulgated by a generally recognized industry standards-setting body and which standard is not required for compliance with an applicable law, ordinance, regulation, + +Proprietary and Confidential This Agreement and information contained therein is not for use or disclosure outside of AT&T, its Affiliates, and third party representatives, and Vendor except under written agreement by the contracting parties. 24 + +Source: ATN INTERNATIONAL, INC., 10-Q, 11/8/2019 + + + + + +or building code governing the manner in which Cell Sites may lawfully be constructed; or + +3. products, services, or other items that substantially meet such written specifications, and that in other respects are substantially similar to the Provided Elements are typically provided by or on behalf of Vendor to third parties in connection with Services substantially similar to those provided herein; or + +4. the relevant specifications for the Provided Elements are of Vendor's (or one or more of its sub- suppliers') origin, design, or selection. + +(f) OTHER LIMITATIONS OF LIABILITY NOT APPLICABLE. NOTWITHSTANDING ANY OTHER PROVISION IN THIS AGREEMENT TO THE CONTRARY (AND WHETHER OR NOT SUCH A PROVISION CONTAINS LANGUAGE TO THE EFFECT THAT THE PROVISION TAKES PRECEDENCE OVER OTHER PROVISIONS CONTRARY TO IT), WHETHER EXPRESS OR IMPLIED, NONE OF THE LIMITATIONS OF LIABILITY (INCLUDING ANY LIMITATIONS REGARDING TYPES OF OR AMOUNTS OF DAMAGES OR LIABILITIES) CONTAINED ANYWHERE IN THIS AGREEMENT WILL APPLY TO VENDOR'S OBLIGATIONS UNDER THIS SECTION. + +3.18 Insurance + +(a) With respect to Vendor's performance under this Agreement, and in addition to Vendor's obligation to indemnify, Vendor shall at its sole cost and expense: + +(i) maintain the insurance coverages and limits required by this Section and any additional insurance and/or bonds required by Laws: + +1. at all times during the term of this Agreement and until completion of all Work associated with this Agreement, whichever is later; and + +2. with respect to any coverage maintained in a "claims-made" policy, for two (2) years following the term of this Agreement or completion of all Work associated with this Agreement, whichever is later. If a "claims-made" policy is maintained, the retroactive date must precede the commencement of Work under this Agreement; + +(ii) require each Subcontractor who may perform Work under this Agreement or enter upon any Cell Site to maintain coverages, requirements, and limits at least as broad as those listed in this Section, when prorated for the value of the Work to be performed by such Subcontractor from the time when the Subcontractor begins Work, throughout the term of the Subcontractor's Work and, with respect to any coverage maintained on a "claims made" policy, if any, for two (2) years thereafter; + +(iii) procure the required insurance from an insurance company eligible to do business in the state or states where Work will be performed and having and maintaining a Financial Strength Rating of "A-" or better and a Financial Size Category of "VII" or better, as rated in the A.M. Best Key Rating Guide for Property and Casualty Insurance Companies, except that, in the case of Workers' Compensation insurance, Vendor may procure insurance from the state fund of the state where Work is to be performed; and + +Proprietary and Confidential This Agreement and information contained therein is not for use or disclosure outside of AT&T, its Affiliates, and third party representatives, and Vendor except under written agreement by the contracting parties. 25 + +Source: ATN INTERNATIONAL, INC., 10-Q, 11/8/2019 + + + + + +(iv) if requested, provide to AT&T or AT&T's third party administrator certificates of insurance stating the types of insurance and policy limits. Vendor shall provide or have the issuing insurance company provide at least thirty (30) days' advance written notice of cancellation, non-renewal, or reduction in insurance coverage, terms, or limits. + +(b) The Parties agree that: + +(i) the failure of AT&T to request such certificate of insurance or failure of AT&T to identify a deficiency will not be construed as a waiver of Vendor's obligation to maintain the insurance required under this Agreement; + +(ii) the insurance required under this Agreement does not represent that coverage and limits will necessarily be adequate to protect Vendor, nor shall it be deemed as a limitation on Vendor's liability to AT&T in this Agreement; + +(iii) Vendor may meet the required insurance coverages and limits below with any combination of primary and Umbrella/Excess liability insurance; and + +(iv) Vendor is responsible for any deductible or self-insured retention. + +(c) The insurance coverage required by this Section includes: + +(i) Workers' Compensation insurance with benefits afforded under the laws of any state in which the Work is to be performed and Employers Liability insurance with limits of at least: + +$500,000 for Bodily Injury - each accident $500,000 for Bodily Injury by disease - policy limits $500,000 for Bodily Injury by disease - each employee + +To the fullest extent allowable by Law, the policy must include a waiver of subrogation in favor of AT&T, its Affiliates, and their directors, officers and employees. In states where Workers' Compensation insurance is a monopolistic state-run system, Vendor shall add Stop Gap Employers Liability with limits not less than $500,000 each accident or disease. + +(ii) Commercial General Liability insurance written on Insurance Services Office (ISO) Form CG 00 01 12 04 or a substitute form providing equivalent coverage, covering liability arising from premises, operations, personal injury, products/completed operations, and liability assumed under an insured contract (including the tort liability of another assumed in a business contract) with limits of at least: + +$2,000,000 General Aggregate limit $1,000,000 each occurrence limit for all bodily injury or property damage incurred in any one (1) occurrence $1,000,000 each occurrence limit for Personal Injury and Advertising Injury + +Proprietary and Confidential This Agreement and information contained therein is not for use or disclosure outside of AT&T, its Affiliates, and third party representatives, and Vendor except under written agreement by the contracting parties. 26 + +Source: ATN INTERNATIONAL, INC., 10-Q, 11/8/2019 + + + + + +$1,000,000 each occurrence limit for Products/Completed Operations + +If applicable, Vendor will maintain Products/Completed Operations for at least two (2) years following completion of the Work. + +The Commercial General Liability insurance policy must: + +1. include AT&T, its Affiliates, and their directors, officers, and employees as additional insureds. Vendor shall provide a copy of the additional insured endorsement to AT&T. The additional insured endorsement may either be specific to AT&T or may be "blanket" or "automatic" addressing any Person as required by contract. A copy of the additional insured endorsement must be provided within sixty (60) days of execution of this Agreement and within sixty (60) days of each Commercial General Liability policy renewal; + +2. include a waiver of subrogation in favor of AT&T, its Affiliates, and their directors, officers and employees; and + +3. be primary and non-contributory with respect to any insurance or self-insurance that is maintained by AT&T. + +(iii) Property Insurance with limits sufficient to cover the full replacement cost of all of the Cell Sites against direct and indirect loss or damage by fire and all other casualties and risks covered under "all risk" insurance respecting the tower and other improvements located at the Cell Site(s). + +(iv) Business Automobile Liability insurance if vehicles will be used in the performance of the Agreement with limits of at least $1,000,000 each accident for bodily injury and property damage, extending to all owned, hired, and non-owned vehicles. AT&T, its Affiliates and their directors, officers and employees shall be included as additional insureds on a primary and non-contributory basis. + +(v) Umbrella/Excess Liability insurance with limits of at least $10,000,000 each occurrence, claim or wrongful act with terms and conditions at least as broad as the underlying Commercial General Liability, Business Automobile Liability, and Employers Liability policies. Umbrella/Excess Liability limits will be primary and non-contributory with respect to any insurance or self-insurance that is maintained by AT&T. + +(vi) Professional Liability (Errors & Omissions) insurance with limits of at least $5,000,000 each claim or wrongful act. + +(vii) Explosion, Collapse, and Underground Damage Liability must not be excluded from the Commercial General Liability policy for any Work involving explosives or any underground Work. Explosion, Collapse, and Underground Damage Liability will have the same limit requirement as the Commercial General Liability policy. + +Proprietary and Confidential This Agreement and information contained therein is not for use or disclosure outside of AT&T, its Affiliates, and third party representatives, and Vendor except under written agreement by the contracting parties. 27 + +Source: ATN INTERNATIONAL, INC., 10-Q, 11/8/2019 + + + + + +(viii) To the extent that Vendor utilizes drones, Aircraft Liability insurance covering drones and similar devices, with limits of One Million and No/100 Dollars ($1,000,000.00) combined single limit for bodily injury and property damage and providing coverage on a worldwide basis and including commercial use and hired operations. + +3.19 Invoicing and Payment + +(a) Promptly after Location Acceptance, Vendor will render an invoice in duplicate to AT&T with respect to the applicable Cell Site. Such invoice for such Cell Site shall be consistent with the AT&T purchase order and detail the Material, Deliverables and Services provided for such Cell Site. The Vendor invoice must specify in detail, if applicable, (i) quantities of each item of Material, Deliverable, and Services, (ii) prices of each item of Material, Deliverable, and Services, (iii) whether the item is taxable and the amount of tax per item, (iv) total amounts for each item, (v) total amount of applicable sales or use taxes, (vi) discounts, if any, (vii) shipping charges, if any, (viii) total amount due, (ix) remit to address, (x) description of Material, Deliverables, and Services, and (xi) special service charges, if any. Each invoice shall specifically reference that the invoice will be paid in accordance with the terms set forth in this Agreement and all payments for amounts due on such invoice for Material, Deliverables, and Services provided under the Build Addendum will be made in accordance with the Structured Payments Schedule attached as Schedule 3 to the Build Addendum. AT&T will promptly review such invoice and, unless AT&T disputes in good faith the amounts set forth therein, will promptly acknowledge that the Structured Payment set forth therein is due in accordance with the terms of this Agreement and the Build Addendum. In the event that AT&T disputes in good faith any amounts set forth in any such invoice, AT&T shall give written notice of such disputed amounts to Vendor prior to the due date of the first Structure Payment set forth in such invoice. Vendor will provide a payment request to AT&T on a monthly basis on the first day of each calendar month for the Structured Payments set forth in the Build Addendum and the Maintenance Fees set forth in the Maintenance Addendum, in each case as provided in the respective addendum. AT&T shall pay Vendor no later than sixty (60) days after receipt of such monthly payment request for Structured Payments. AT&T shall pay, or provide a written notice of any good faith dispute to, Vendor no later than ninety (90) days after receipt of an invoice for Maintenance Fees. Any dispute of an invoice for Maintenance Fees shall be made by AT&T in good faith and shall set forth in writing a detailed description of the disputed amounts and the reason for such dispute. Notwithstanding any good faith dispute, AT&T shall pay all undisputed amounts in full to Vendor no later than the due date for such invoice. Invoices received by AT&T more than one (1) year after the Delivery of Material and Deliverables or the provision of Services are untimely and AT&T has no obligation to pay such invoices. + +(b) Vendor shall pay any amount due to AT&T or its Affiliates within sixty (60) days after written demand or invoice by AT&T. + +(c) Vendor agrees to accept standard, commercial methods of payment and evidence of payment obligations, including, but not limited to, credit card payments, purchasing card payments, AT&T's purchase orders, and electronic fund transfers, in connection with any amounts owed by AT&T hereunder. + +Proprietary and Confidential This Agreement and information contained therein is not for use or disclosure outside of AT&T, its Affiliates, and third party representatives, and Vendor except under written agreement by the contracting parties. 28 + +Source: ATN INTERNATIONAL, INC., 10-Q, 11/8/2019 + + + + + +3.20 Licenses and Patents. Except as provided in Section 3.29, no license, express or implied, is granted under this Agreement to Vendor for any patent, trademark, copyright, trade secret or any other intellectual property or application therefor which is now or may hereafter be owned by AT&T or its Affiliates. + +3.21 Limitation of Damages. Notwithstanding anything contained in this Agreement to the contrary, neither Party shall be liable to the other Party for any special, consequential, incidental or punitive damages, however caused, based on any theory of liability except to the extent such damages are payable by such Party (a) pursuant to its indemnification obligations under Section 3.15 and infringement indemnification obligations under Section 3.17, (b) arising out of or resulting from such Party's breach of its confidentiality obligations set forth in this Agreement (including Section 3.16, Section 3.48, Section 4.2 and Exhibit A attached hereto) or (c) in connection with a Third Party Loss arising out of or resulting from such Party's violation of applicable Law. + +3.22 Offset Right. Any amounts payable (including any recoupment claims or other amounts to be reimbursed) by Vendor or its Affiliates to AT&T or its Affiliates under this Agreement (including under the Build Addendum or the Maintenance Addendum) may be offset against the Maintenance Fees or any payment due or to become due to Vendor or its Affiliates from AT&T or its Affiliates under the Transport Agreement, Master License Agreement; provided, however, that AT&T's offset right under this Section 3.22 shall not apply to any Structured Payments for any Cell Site that has reached Location Acceptance and AT&T hereby waives all such rights of setoff and recoupment against such Structured Payments. Prior to exercising its right to offset amounts pursuant to this Section 3.22, AT&T shall provide written notice to Vendor of its intention to offset such amounts and to the extent any dispute between the Parties exists in respect of the amount to be offset, AT&T must first utilize the Escalation Procedure in Section 4.8(a). + +3.23 Material and Services Furnished by Vendor and AT&T. Vendor shall furnish all Services, including individuals to provide field and administrative support, and Vendor shall furnish all Material required to perform the Work, except those items specifically listed in this Agreement, the Build Addendum or the Maintenance Addendum to be furnished by AT&T. Any material provided by AT&T shall remain AT&T's material and shall be used only in connection with Work under this Agreement. Vendor shall protect and preserve AT&T's material and shall promptly return at the end of contracted Work, at Vendor's expense, any material not used, unless AT&T instructs Vendor otherwise in writing. AT&T shall receive full title and ownership rights to all Material furnished by Vendor relating to any Cell Site upon Location Acceptance of such Cell Site. + +3.24 Non-Exclusive Market. Other than with respect to the Cell Sites expressly contemplated in the Build Addendum, this Agreement does not grant Vendor any right or privilege to provide to AT&T any Work of the type described in or purchased under this Agreement in any market or geographic area. Except for obligations arising under the Build Addendum or the Maintenance Addendum and any work orders or trouble tickets thereunder that have not been terminated as provided herein, this Agreement does not obligate AT&T to purchase or license any such Work from Vendor. AT&T may contract with other + +Proprietary and Confidential This Agreement and information contained therein is not for use or disclosure outside of AT&T, its Affiliates, and third party representatives, and Vendor except under written agreement by the contracting parties. 29 + +Source: ATN INTERNATIONAL, INC., 10-Q, 11/8/2019 + + + + + +manufacturers and vendors for the procurement or trial of Work comparable to that described in or purchased under this Agreement for sites other than the Cell Sites expressly contemplated in the Build Addendum, and AT&T may itself perform such Work. + +3.25 Notice of Certain Events. Vendor shall promptly notify AT&T of any of the following which is connected with any Deliverables: (a) any material investigation, indictment, lawsuit, or administrative or other proceeding, or (b) the revocation of any license, permit or other document issued to Vendor by any governmental authority necessary for Vendor to complete its obligations as set forth herein. Prior to Location Acceptance of all Cell Sites pursuant to the Build Addendum, Vendor must notify AT&T immediately (and in any event within three (3) business days) in writing, if it breaches (or is given written notice of an alleged breach or prospective breach of) a material covenant in any material financial or material operational arrangement of Vendor. Following Location Acceptance of all Cell Sites pursuant to the Build Addendum, Vendor must notify AT&T immediately (and in any event within three (3) business days) in writing, if it breaches (or is given written notice of an alleged breach or prospective breach of) a material covenant in any material financial or material operational arrangement of Vendor that could reasonably be expected to adversely impact Vendor's ability to perform its obligations under this Agreement. + +3.26 Notices + +(a) Each Party giving or making any notice, consent, request, demand, or other communication (each, a "Notice") pursuant to this Agreement must give the Notice in writing and use one of the following methods, each of which for purposes of this Agreement is a writing: certified mail (return receipt requested and postage prepaid); U.S. Postal Service overnight or priority mail; internationally recognized overnight courier (in either case with all fees prepaid); or email. If a Notice is given by e-mail, then it must be confirmed by a copy sent by any one of the other methods. Each Party giving a Notice shall address the Notice to the appropriate person (the "Addressee") at the receiving Party at the address listed below: + +Commnet: + +Commnet Wireless, LLC 400 Northridge Road, Suite 31100 Atlanta, GA 30350 Attn: Joseph Moravec Email Address: jmoravec@atni.com Business Number: 404-649-6625 + +With a copy (which shall not constitute notice) to: + +Proprietary and Confidential This Agreement and information contained therein is not for use or disclosure outside of AT&T, its Affiliates, and third party representatives, and Vendor except under written agreement by the contracting parties. 30 + +Source: ATN INTERNATIONAL, INC., 10-Q, 11/8/2019 + + + + + +Commnet Wireless, LLC c/o ATN International, Inc. 500 Cummings Center, Suite 2450 Beverly, MA 01915 Attn: General Counsel Email Address: legalnotices@atni.com Business Number: (978) 619-1323 + +AT&T: + +AT&T Mobility LLC 1025 Lenox Park Blvd Atlanta, GA 30319 Attn: Kurt Dresch, Director - Global Connection Management Email: kurt.dresch@att.com + +and + +AT&T Mobility LLC 2180 Lake Blvd. NE B1260 Atlanta, GA 30319 Attn: Anu Seam, Assistant Vice President and Senior Legal Counsel Email Address: anu.seam@att.com + +With a required copy to: + +Kilpatrick Townsend & Stockton LLP 1100 Peachtree Street NE, Suite 2800 Atlanta, Georgia 30309 Attention: S. Joel Cartee Telephone: (404) 815-5909 Facsimile: (404) 541-3238 E-mail: JCartee@kilpatricktownsend.com + +(b) A Notice is effective only if the Party giving notice has complied with the foregoing requirements of this Section and the Addressee has received the Notice. A Notice is deemed to have been received as follows: + +(i) If a Notice is sent by certified mail, U.S. Postal Service overnight or priority mail, or internationally recognized overnight courier, upon the date of delivery as indicated by the receipt or other tracking record; + +Proprietary and Confidential This Agreement and information contained therein is not for use or disclosure outside of AT&T, its Affiliates, and third party representatives, and Vendor except under written agreement by the contracting parties. 31 + +Source: ATN INTERNATIONAL, INC., 10-Q, 11/8/2019 + + + + + +(ii) If a Notice is sent by e-mail, upon successful transmission to the recipient's email account, if such Notice is sent in time to allow it to be accessible by the Addressee before the time allowed for giving such Notice expires, and a confirmation copy is sent by one of the other methods. + +(c) The addresses and telephone numbers to which Notices may be given to the Addressees of either Party may be changed by written Notice given by such Party to the other pursuant to this Section. + +3.27 Offshore Work Prohibited. None of the Services under this Agreement shall be performed or provided and no Information related to this Agreement shall be collected, stored, handled or accessed by Vendor or its Subcontractors at any location outside of the United States. Additionally, Vendor shall not allow any of the Services under this Agreement to be performed or provided by any Restricted Entity and any Services performed or provided by a Subcontractor shall be subject to Vendor's compliance with the requirements of the Section entitled "Work Done by Others". + +3.28 Order of Precedence. The terms of this Agreement govern all Work to be performed by Vendor while this Agreement remains in effect. This Agreement shall govern in lieu of all other pre-printed or standardized provisions that may otherwise appear in any other paper or electronic record of either Party (such as standard terms on order or acknowledgment forms, advance shipping notices, invoices, time sheets, and packages, shrink wrap terms, and click wrap terms). + +In the event of a conflict between the terms of the body portion of this Agreement and any of the addendums, exhibits, schedules or appendices attached hereto, the order of precedence for controlling clauses shall be as follows: (a) Government Flow Downs and Contract Clauses attached to this Agreement as Exhibit A; (b) the Build Addendum or Maintenance Addendum, as applicable; and (c) the remaining provisions of this Agreement. + +3.29 Ownership of Paid-For Development, Use and Reservation of Rights + +(a) Paid-For Development. AT&T shall be the exclusive owner of all right, title, and interest in and to all Paid- For Development (defined below), including, without limitation, all Intellectual Property Rights therein and thereto. Vendor shall assign or have assigned to AT&T and hereby assigns to AT&T all Intellectual Property Rights in and to the Paid-For Development. "Paid- For Development" shall mean any and all Items to the extent produced or developed by or on behalf of Vendor or its employees, agents, or direct or indirect contractors or suppliers (and whether completed or in-progress), and forming part of any Deliverable, Material or Service pursuant to this Agreement (including, without limitation, under the Build Addendum, Maintenance Addendum or any statement of work, exhibit, schedule, order or other document under, subordinate to, or referencing this Agreement) for which AT&T has been or will be charged Structured Payments, Maintenance Fees or any monies in connection with a Change Order. Paid-For Development shall always include (without limitation) any modifications, alterations or updates that fall within the definition of Paid-For Development but shall not + +Proprietary and Confidential This Agreement and information contained therein is not for use or disclosure outside of AT&T, its Affiliates, and third party representatives, and Vendor except under written agreement by the contracting parties. 32 + +Source: ATN INTERNATIONAL, INC., 10-Q, 11/8/2019 + + + + + +include any Items produced by Vendor for its own use in connection with performance of the Services and for which AT&T has not been charged. + +(b) License Grant to AT&T. Vendor hereby grants and promises to grant and have granted to AT&T and its Affiliates a royalty-free, nonexclusive, sublicensable, assignable, transferable, irrevocable, perpetual, world- wide license in and to any applicable Intellectual Property Rights of Vendor to use, copy, modify, distribute, display, perform, import, make, sell, offer to sell, and exploit (and have others do any of the foregoing on or for AT&T's or any of its customers' behalf or benefit) any Intellectual Property Rights of Vendor or any third party that are not included in Material or Paid-For Development but necessary to operate the Cell Sites or receive the full benefit of the Work. + +(c) Further Acts and Obligations. Vendor will take or secure such action (including, but not limited to, the execution, acknowledgment, delivery and assistance in preparation of documents or the giving of testimony) as may be reasonably requested by AT&T to evidence, transfer, perfect, vest or confirm AT&T's right, title and interest in any Paid-For Development. Vendor shall, in all events and without the need of AT&T's request, secure all Intellectual Property Rights in any Paid-For Development (and any licenses specified above) from each employee, agent, Subcontractor or sub-contractor of Vendor who has or will have any rights in the Paid- For Development or Intellectual Property Rights. + +(d) Reservation of Rights and Limited License. Notwithstanding any other provision in this Agreement, AT&T is not transferring or granting to Vendor any right, title, or interest in or to (or granting to Vendor any license or other permissions in or to) any or all: (i) Items created by or on behalf of AT&T or directly or indirectly provided to Vendor (in any form, including, without limitation, verbally) by or on behalf of AT&T or its third party providers, including the AT&T Provided Equipment (as such term is defined in the Build Addendum) ("AT&T Provided Items"); (ii) Paid-For Development or (iii) Intellectual Property Rights, including, without limitation, any Intellectual Property Rights in or to any AT&T Provided Items or Paid- For Development. The sole exception to the foregoing reservation of rights is that AT&T hereby grants Vendor a limited, nonexclusive, non-transferable license (that shall automatically terminate upon the termination or expiration of this Agreement), under any rights owned by AT&T, to use the AT&T Provided Items and Paid- For Development solely as instructed by AT&T and to the extent necessary for Vendor to perform its obligations under this Agreement, subject further to the terms and conditions of this Agreement. In no way expanding the foregoing license, said license in no manner permits Vendor to (and Vendor hereby promises not to without the explicit prior written and signed consent of AT&T Intellectual Property, LLC ("ATTIP Consent")) make use of any AT&T Provided Items, Paid- For Development or AT&T Intellectual Property Rights either for the benefit of any third party or other than as instructed in writing by AT&T (AT&T may be willing, in its sole discretion, to grant ATTIP Consent in exchange for appropriate additional compensation). Paid-For Development and AT&T Provided Items shall constitute AT&T Information under this Agreement. + +3.30 Publicity. Other than use of AT&T's name in connection with Permit applications, Vendor shall not use AT&T's or its Affiliates' names, trademarks, service marks, designs, + +Proprietary and Confidential This Agreement and information contained therein is not for use or disclosure outside of AT&T, its Affiliates, and third party representatives, and Vendor except under written agreement by the contracting parties. 33 + +Source: ATN INTERNATIONAL, INC., 10-Q, 11/8/2019 + + + + + +logos or symbols. In addition, Vendor shall not use any language or pictures which could in AT&T's judgment imply AT&T's or its Affiliates' identities, or endorsement by AT&T, its Affiliates or any of its or their employees, in any (i) written, electronic, or oral advertising or presentation, or sales meeting, or (ii) brochure, newsletter, book, electronic database, testimonial quotation, thank you letter, reference letter or other communication of whatever nature, without prior written ATTIP Consent. + +Vendor and its employees, agents, and Subcontractors shall refer any questions from the media or third parties regarding the Work to AT&T and shall not discuss the Work with the media or third parties, without the prior written ATTIP Consent. For the purpose of clarity, any disclosure of the existence of this Agreement or the Work by Vendor as required by Law, including the regulations of the Securities and Exchange Commission, shall not be a violation of this section; provided that, prior to any such disclosure being made in the first instance, Vendor shall give AT&T a reasonable opportunity to review and comment thereon (including any press release). To the extent that any disclosure required to be made by Vendor to the Securities and Exchange Commission has been previously reviewed by AT&T, then Vendor shall not be required to provide AT&T with a reasonable opportunity to review and comment thereon prior to such disclosure being made thereafter so long as no substantive changes have been made thereto. A breach of this "Publicity" Section shall be deemed a material breach of this Agreement. + +3.31 Records and Audits + +(a) Vendor shall maintain complete and accurate records relating to the Work and the performance of this Agreement. AT&T and its auditors (including internal audit staff and external auditors) and governmental authorities shall have the right to review such records ("AT&T Audits") held and created by Vendor, to verify the following: + +(i) the accuracy of Vendor's invoices and AT&T's payment obligations hereunder; + +(ii) that the Work charged for was actually performed; + +(iii) that the Services have been and are being provided in accordance with this Agreement; + +(iv) the integrity of Vendor's systems that process, store, support, maintain, and transmit AT&T data; + +(v) Vendor's records relating to the performance of Vendor's Subcontractors with respect to any portion of the Services; and + +(vi) that Vendor and its Subcontractors are complying with Section 3.6 hereof. + +When the FirstNet Authority or other governmental authority requests to review Vendor's records, AT&T and its auditors will review these records first if the FirstNet Authority or other governmental authority permits such review, and provide the records to the requesting governmental authority; provided, however, the FirstNet Authority and other governmental authorities retain the right to perform audits independent of AT&T. + +Proprietary and Confidential This Agreement and information contained therein is not for use or disclosure outside of AT&T, its Affiliates, and third party representatives, and Vendor except under written agreement by the contracting parties. 34 + +Source: ATN INTERNATIONAL, INC., 10-Q, 11/8/2019 + + + + + +(b) Subject to Subsection (g) below, Vendor shall provide and shall require that its Subcontractors provide to AT&T, its auditors (including internal audit staff and external auditors), and governmental authorities access at all reasonable times to: + +(i) any facility at which the Services or any portion thereof are being performed; + +(ii) systems and assets used to provide the Services or any portion thereof; + +(iii) Vendor employees and Subcontractor employees providing the Services or any portion thereof; and + +(iv) all Vendor and Subcontractor records, including financial records relating to the invoices and payment obligations and supporting documentation, pertaining to the Services. + +The scope of AT&T Audits shall also include: + +(i) practices and procedures used in performing the Services; + +(ii) systems, communications and information technology used in performing the Services; + +(iii) general controls and security practices and procedures; + +(iv) supporting information and calculations regarding invoices and compliance with service requirements; + +(v) quality initiatives and quality assurance; and + +(vi) compliance with the terms of this Agreement. + +AT&T's access to the records and other supporting documentation shall include the right to inspect and photocopy Vendor's documentation and the documentation of its Subcontractors as provided to Vendor, and the right to retain copies thereof outside of their physical location with appropriate safeguards, if such retention is deemed reasonably necessary by AT&T and only to the extent that all such records are maintained by AT&T in accordance with Section 3.16 hereof. + +(c) AT&T Audits may be conducted once a year (or more frequently if requested by governmental authorities who regulate AT&T's business, if required by applicable Law or if auditors require follow-up access to complete audit inquiries or if an audit uncovers any problems or deficiencies), upon at least ten (10) business days advance notice (unless otherwise mandated by Law) and during business hours. Vendor will cooperate, and will ensure that its Subcontractors cooperate, in the AT&T Audits, and will make the information reasonably required to conduct the AT&T Audits available on a timely basis. + +(d) If, as a result of an AT&T Audit, AT&T determines that Vendor has not performed or has unsatisfactorily performed any obligation under this Agreement, then Vendor will promptly remedy the non-performance or unsatisfactory performance. + +Proprietary and Confidential This Agreement and information contained therein is not for use or disclosure outside of AT&T, its Affiliates, and third party representatives, and Vendor except under written agreement by the contracting parties. 35 + +Source: ATN INTERNATIONAL, INC., 10-Q, 11/8/2019 + + + + + +(e) Vendor will maintain and retain the records set forth in Subsection (a) during the term of the Agreement and for three (3) years thereafter (unless a discovery or legal hold request is made with respect to such records, in which case Vendor shall retain such records until AT&T notifies Vendor that such discovery or legal hold request has expired). Vendor will provide AT&T, at AT&T's request and cost, with paper and electronic copies of documents and information reasonably necessary to verify Vendor's compliance with this Agreement. Upon notification by AT&T of a discovery or legal hold request, Vendor shall fully cooperate with such request and immediately preserve any Vendor records covered by such request and promptly provide such Vendor records requested by AT&T related to the inquiry. + +(f) Except as provided in Subsection (d), all reasonable out-of-pocket costs and expenses incurred by AT&T in connection with an AT&T Audit shall be paid by AT&T. Vendor shall be solely responsible for all costs and expenses incurred by Vendor in connection with its obligations under this Section. In the event that either Party requires that an audit be performed by an independent auditor, unless otherwise specified herein, the Party requesting such independent auditor will be responsible for the costs and expenses associated with the independent auditor. + +(g) With respect to AT&T requests for audits or inspections of Vendor's Subcontractors, the following applies: + +(i) If Vendor's agreement with its applicable Subcontractor permits an AT&T Audit, AT&T shall be permitted to conduct such audit directly or through a third party representative. Vendor shall work with AT&T in facilitating the Subcontractor's cooperation for an expeditious and thorough audit or inspection. + +(ii) If Vendor's contract with its applicable Subcontractor precludes AT&T from directly conducting an audit or inspection, Vendor shall use reasonable best efforts to enable AT&T to perform an audit of the Subcontractor with Vendor coordinating the audit process. Failing those efforts, Vendor shall, upon AT&T's request and at AT&T's expense, conduct the audit or inspection on behalf of AT&T, subject to terms agreed to by Vendor and AT&T for the Subcontractor audit, such as areas to be audited, applicable fees, and the timeframe for reporting audit results to AT&T. If AT&T's request for a Vendor audit or inspection arises from, in AT&T's good faith opinion, materially or consistently deficient Service provided by the Subcontractor under AT&T's account, and the audit in both Parties' opinions confirms such deficiencies, Vendor shall not charge AT&T a fee for the Vendor's audit of its Subcontractor. + +(iii) If Vendor's contract with its applicable Subcontractor does not allow Vendor access to the facilities and systems of Subcontractor required to conduct the audit described in Subsection (b) above, then Vendor shall provide a list of such Subcontractors and the services being provided by such Subcontractor to AT&T for its review. To the extent AT&T deems it reasonably necessary to require such access, then Vendor will renegotiate its contract with the applicable Subcontractor in order to obtain the audit rights described in Subsection (b) above. + +Proprietary and Confidential This Agreement and information contained therein is not for use or disclosure outside of AT&T, its Affiliates, and third party representatives, and Vendor except under written agreement by the contracting parties. 36 + +Source: ATN INTERNATIONAL, INC., 10-Q, 11/8/2019 + + + + + +3.32 Restricted Entities. Vendor may not deliver or obtain any Material or Deliverables from or use any Restricted Entities to provide any Services under this Agreement, without prior written consent from AT&T. Vendor may not use, in connection with any Deliverable, Material or Service provided hereunder, any element, equipment, location, instrumentality or the like where a Restricted Entity has a security interest in that element, equipment, location, instrumentality or the like. Vendor may not obtain financing from any Restricted Entity or use any Cell Sites or Material owned, leased from, operated or financed by any Restricted Entity. + +3.33 Severability. If any provision of this Agreement is determined to be invalid, illegal, or unenforceable, the Parties agree that the remaining provisions of this Agreement shall remain in full force if both the economic and legal substance of the transactions contemplated by this Agreement are not affected in any manner that is materially adverse to either Party by severing the provision determined to be invalid, illegal, or unenforceable. + +3.34 Supplier Citizenship and Sustainability. Vendor shall conduct business with an abiding respect for corporate citizenship, sustainability, and human rights ("Citizenship and Sustainability"). Upon AT&T's request, which request may only be made once per calendar year, Vendor shall provide to AT&T reasonable information, reports, or survey responses to demonstrate Vendor's operation of its business in the context of Citizenship and Sustainability. + +3.35 Survival of Obligations. Obligations and rights under this Agreement that by their nature would reasonably continue beyond the termination or expiration of this Agreement (including those in the Sections entitled "Compliance with Laws," "Construction and Interpretation," "Cumulative Remedies," "Entire Agreement," "Governing Law," "Information," "Indemnity," "Infringement," "Insurance," "Limitation of Damages," "Order of Precedence," "Ownership of Paid-For Development, Use and Reservation of Rights," "Publicity," "Severability," "AT&T Supplier Information Security Requirements (SISR)," "Warranty," "Customer Information," "Dispute Resolution" and the representations, warranties, indemnities and Termination Remedies) will survive the termination or expiration of this Agreement. + +3.36 Taxes + +(a) Vendor shall invoice AT&T the amount of any federal excise, state, and local transaction taxes imposed upon the sale of Material, Delivery of Deliverables, and provision of Services under this Agreement. All such taxes must be stated as separate items on the applicable Material, Deliverable, or Services invoice listing the taxing jurisdiction imposing the tax. Installation, labor and other non-taxable charges must be separately stated. AT&T shall pay all applicable taxes to Vendor that are stated on and at the time the Material, Deliverables, or Services invoice is submitted by Vendor. Vendor shall remit taxes to the appropriate taxing authorities. Vendor shall honor tax exemption certificates, and other appropriate documents, which AT&T provides to Vendor, pursuant to relevant tax provisions of the taxing jurisdiction providing the exemption. + +Proprietary and Confidential This Agreement and information contained therein is not for use or disclosure outside of AT&T, its Affiliates, and third party representatives, and Vendor except under written agreement by the contracting parties. 37 + +Source: ATN INTERNATIONAL, INC., 10-Q, 11/8/2019 + + + + + +(b) Vendor will pay any penalty, interest, additional tax, or other charge that may be levied or assessed as a result of the delay or failure of Vendor, for any reason other than AT&T's failure to reimburse Vendor in a timely manner for such amounts, to pay any tax or file any return or information required by law, rule, or regulation or by this Agreement to be paid or filed by Vendor. + +(c) Upon AT&T's request, the Parties shall consult with respect to the basis and rates upon which Vendor shall pay any taxes or fees for which AT&T is obligated to reimburse Vendor under this Agreement. If AT&T determines that, in good faith and pursuant to applicable Law, any such taxes or fees are not payable or should be paid on a basis less than the full price or at rates less than the full tax rate, AT&T shall notify Vendor in writing of such determinations, Vendor shall make payment in accordance with such determinations, and AT&T shall be responsible for such determinations. If collection is sought by the taxing authority for a greater amount of taxes than that so determined by AT&T, Vendor shall promptly notify AT&T. If AT&T desires to contest such collection, AT&T shall promptly notify Vendor. Vendor shall cooperate with AT&T in contesting such determination, but AT&T shall be responsible and shall reimburse Vendor for any tax, interest, or penalty in excess of AT&T's determination and shall reimburse Vendor for Litigation Expense incurred by Vendor in connection with contesting such determination. + +(d) If the parties agree, where such agreement shall not be unreasonably withheld, conditioned, or delayed, that AT&T has paid Vendor for any taxes in excess of the amount that AT&T is obligated to pay Vendor under this Agreement, AT&T and Vendor shall consult in good faith to determine the appropriate method(s) to seek recovery of such excess payments, which method(s) may include, but are not limited to, (i) Vendor crediting any excess payments against tax amounts or other payments due from AT&T solely to the extent Vendor has successfully made corresponding adjustments to its payments to the relevant tax authority, (ii) Vendor timely filing claims for refund and any other documents required to recover any excess payments and Vendor promptly remitting to AT&T all such refunds and interest received, and (iii) Vendor immediately refunding to AT&T such excess payments. + +(e) If any taxing authority advises Vendor that it intends to audit Vendor with respect to any taxes for which AT&T is obligated to reimburse Vendor under this Agreement, Vendor shall (i) promptly so notify AT&T, (ii) afford AT&T an opportunity to participate with Vendor in such audit with respect to such taxes, and (iii) keep AT&T fully informed as to the progress of such audit. Except as set forth in Subsection (c) above, each Party shall bear its own expenses with respect to any such audit, and the responsibility for any additional tax, interest, or penalty resulting from such audit is to be determined in accordance with the applicable provisions of this Section 3.36. Vendor's failure to comply with the notification requirements of this Section 3.36 will relieve AT&T of its responsibility to reimburse Vendor for taxes only to the extent that Vendor's failure actually and materially prejudiced AT&T's ability to contest imposition or assessment of those taxes. + +(f) In addition to its rights under Subsections (c), (d), and (e) above with respect to any tax or tax controversy covered by this Section 3.36, AT&T is entitled to contest, pursuant to applicable Law and tariffs and at its own expense, any tax previously invoiced that AT&T is ultimately + +Proprietary and Confidential This Agreement and information contained therein is not for use or disclosure outside of AT&T, its Affiliates, and third party representatives, and Vendor except under written agreement by the contracting parties. 38 + +Source: ATN INTERNATIONAL, INC., 10-Q, 11/8/2019 + + + + + +obligated to pay. AT&T is entitled to the benefit of any refund or recovery of amounts actually received by AT&T or Vendor that AT&T has previously paid to Vendor resulting from such a contest. Vendor shall cooperate in any such contest, but AT&T shall reimburse Vendor for Litigation Expense incurred by Vendor in obtaining a refund or credit for AT&T. + +(g) If either Party is audited by a taxing authority or other governmental entity in connection with taxes under this Section 3.36, the other Party shall reasonably cooperate with the Party being audited in order to respond to any audit inquiries in an appropriate and timely manner, so that the audit and any resulting controversy may be resolved expeditiously. + +(h) AT&T and Vendor shall reasonably cooperate with each other with respect to any tax planning to minimize taxes. + +(i) Vendor and any of its Affiliates, as appropriate, receiving payments hereunder shall provide AT&T with a valid United States Internal Revenue Service ("IRS") Form W-8BEN, W-8BEN- E, W-8ECI, W-8EXP, W- 8IMY, or W-9 (or any successor form prescribed by the IRS). AT&T may reduce any payment otherwise due to Vendor in connection with the sale of Material, Delivery of Deliverables, or provision of Services under this Agreement by the amount of any tax imposed on Vendor that AT&T is required to pay directly to a taxing or other governmental authority ("Withholding Tax"). Alternatively, if applicable Law permits, AT&T agrees that it will honor a valid exemption certificate or other mandated document evidencing Vendor's exemption from payment of, or liability for, any Withholding Tax as authorized or required by statute, regulation, administrative pronouncement, or other Law of the jurisdiction providing said exemption. AT&T shall provide Vendor with documentation evidencing withholding in a reasonable time. + +3.37 Termination and Suspension + +(a) Mutual Agreement - This Agreement, the Build Addendum and/or the Maintenance Addendum may be terminated at any time upon the mutual written consent of the Parties. + +(b) Termination for Convenience - This Agreement, the Build Addendum and the Maintenance Addendum may not be terminated by either Party at any time for its own convenience. + +(c) Termination for Cause + +(i) If either Party breaches any provision of this Agreement (which for purposes of this Section 3.37(c) shall not mean any breaches of the Build Addendum or Maintenance Addendum) and (i) if the breach is one that by its nature could be cured, and such breach is not cured within thirty (30) days (or such other applicable cure period expressly provided herein and applicable to such breach) after the breaching Party receives written notice, provided that if such breach is not reasonably susceptible of cure within such thirty (30) day period (or such other applicable cure period) and Vendor is diligently and continuously pursuing a cure, the Parties shall cooperate in good faith to establish by mutual written agreement a reasonable extension of the applicable cure period, or (ii) if the breach is one that by its nature cannot be cured, or (iii) if the breach is a material violation of Laws that is not reasonably susceptible of cure, then, in addition to all other rights and remedies at law or + +Proprietary and Confidential This Agreement and information contained therein is not for use or disclosure outside of AT&T, its Affiliates, and third party representatives, and Vendor except under written agreement by the contracting parties. 39 + +Source: ATN INTERNATIONAL, INC., 10-Q, 11/8/2019 + + + + + +in equity or otherwise, the non-breaching Party shall have the right upon written notice to immediately terminate this Agreement (which termination shall include the Build Addendum and Maintenance Addendum), and exercise all Termination Remedies set forth in the Build Addendum, except AT&T cannot terminate its obligation to pay Vendor all Structured Payments for Cell Sites that have achieved Location Acceptance prior to the effective date of termination or any Maintenance Fees for Services performed under the Maintenance Addendum prior to the effective date of such termination. Failure of the non- breaching Party to immediately terminate this Agreement (x) following a breach which continues longer than such cure period, provided such breach has not been cured prior to the non-breaching Party's providing notice of termination, or (y) following a breach that cannot be cured or that constitutes a material violation of Laws that is not reasonably susceptible to cure shall not constitute a waiver of the non- breaching Party's rights to terminate. + +(ii) If Vendor becomes insolvent or generally fails to pay, or admits in writing its inability or refusal to pay, debts as they become due, then AT&T shall have the right upon written notice to immediately terminate AT&T's obligations under this Agreement or the Build Addendum or Maintenance Addendum, as applicable, and exercise all Termination Remedies set forth in the Build Addendum. + +(iii) If (1) Vendor (A) receives a notice of default (or similar breach or violation) and has not cured such default (or similar breach or violation) within thirty (30) days from the receipt of such notice or (B) is in default under any credit facility or other financing arrangement, (2) any Vendor credit facility or other financing arrangement has been terminated or suspended (other than by Vendor or as a result of an expiration in accordance with its terms) or (3) Vendor no longer has access to funding under any credit facility or other financing arrangement required by Vendor to fulfill its obligations to AT&T under this Agreement, the Master License Agreement, the Transport Agreement and the Roaming Agreement (as such term is defined in the Build Addendum), then Vendor shall promptly, but no later than one (1) business day following Vendor's receipt of notice of any such event, notify AT&T of such event and in addition to all other rights and remedies at law or in equity or otherwise, AT&T shall have the right upon written notice to immediately terminate AT&T's obligations under this Agreement or the Build Addendum or Maintenance Addendum, as applicable, and exercise all Termination Remedies set forth in the Build Addendum; provided, that prior to exercising such termination right, AT&T shall enter into good faith discussions with Vendor to determine if Vendor can obtain alternative financing. + +(d) Bankruptcy. In addition to all other termination rights set forth herein, this Agreement may be terminated by either Party or either Party may terminate its obligations hereunder, in each case in whole or in part (including terminating only specific addendums or specific Cell Sites), if the other Party files, or has filed against it, any voluntary petition seeking liquidation, reorganization, arrangement or readjustment of its debts or for any other relief under the United States Bankruptcy Code or under any other act or Law pertaining to insolvency or debtor relief, whether state, federal or foreign, now or hereafter existing; or such other Party has filed against + +Proprietary and Confidential This Agreement and information contained therein is not for use or disclosure outside of AT&T, its Affiliates, and third party representatives, and Vendor except under written agreement by the contracting parties. 40 + +Source: ATN INTERNATIONAL, INC., 10-Q, 11/8/2019 + + + + + +it any petition which petition seeks any of the foregoing relief or substantive consolidation of the assets of such other Party with a debtor in bankruptcy or liquidation and which is not dismissed within forty-five (45) days after the effective service of same; or the appointment is made of a receiver, custodian or trustee of such other Party or for all or a substantial part of the assets of such other Party. + +(e) Termination Events. In addition to all other termination rights set forth herein, this Agreement may be terminated by AT&T or AT&T may terminate its obligations hereunder (including terminating only specific addendums or specific Cell Sites), upon the occurrence of (i) any Termination Event (as defined in the Build Addendum) applicable to one or more Cell Sites and upon such termination AT&T may exercise any or all of the Termination Remedies (as defined in the Build Addendum) available to it pursuant to the Build Addendum with respect to such impacted Cell Sites; or (ii) any termination (regardless of the reason therefor) of the Master License Agreement resulting in AT&T's inability to use the impacted Cell Site. + +(f) Partial Termination - Whenever Law or a provision of this Agreement permits AT&T to terminate this Agreement with respect to a single Cell Site or group of Cell Sites or with respect to either the Build Addendum or Maintenance Addendum, AT&T may, at its option, terminate this Agreement in part with respect to such Addendum or on a Cell Site basis without further liability or obligation; provided that no such termination shall relieve AT&T's obligation to make Structured Payments with respect to any Cell Sites that have reached Location Acceptance prior to the effective date of such termination and pay any Maintenance Fees for Services performed under the Maintenance Addendum prior to the effective date of such termination. The Parties acknowledge that the Build Addendum and Maintenance Addendum include specific partial termination rights on a Cell Site by Cell Site basis, including the Termination Remedies that allow for termination of AT&T's obligations with respect to an individual Cell Site hereunder and special remedies to AT&T in connection with such termination. + +(g) Termination Charges - AT&T shall not be liable for any termination charges (or any charges for any Material or Services already ordered or performed at the time of termination) in any case when any termination results from a termination right granted to AT&T in this Agreement; provided that AT&T shall remain obligated to make Structured Payments with respect to any Cell Sites that have reached Location Acceptance prior to the effective date of such termination and pay any Maintenance Fees for Services performed under the Maintenance Addendum prior to the effective date of such termination. + +(h) Obligations upon Expiration or Termination - Upon expiration or termination of this Agreement, but prior to the effectiveness of full termination of the Agreement, AT&T may exercise any rights and remedies available to AT&T under this Agreement, at law or in equity, including AT&T's right to exercise any one or more of the Termination Remedies set forth in the Build Addendum, and Vendor shall, upon the request and at the expense (other than termination in accordance with Subsection (c) hereof) of AT&T: (i) return all papers, materials, equipment, assets and property of AT&T held by Vendor, including title and ownership to all Material, (ii) provide reasonable assistance as may be necessary for the orderly, non-disrupted continuation of the Services, (iii) transfer all of the contracts related to the Cell Sites to AT&T + +Proprietary and Confidential This Agreement and information contained therein is not for use or disclosure outside of AT&T, its Affiliates, and third party representatives, and Vendor except under written agreement by the contracting parties. 41 + +Source: ATN INTERNATIONAL, INC., 10-Q, 11/8/2019 + + + + + +as contemplated in the Build Addendum and (iv) reimburse AT&T for any AT&T Provided Equipment or other assets that are not installed at a Cell Site and cannot be returned in good working order (based on the acquisition costs plus taxes and shipping costs). Vendor also agrees to assist AT&T in coordinating the transfer of the provision of the Services to a successor contractor, which shall include continuing to provide the required level of Services until the date of expiration or termination and providing the successor contractor with all pertinent information about the Services. For the purposes of clarity and notwithstanding any other provisions herein, no termination under this Agreement shall relieve AT&T's obligation to make Structured Payments with respect to any Cell Sites that have reached Location Acceptance prior to the effective date of such termination and pay any Maintenance Fees for Services performed under the Maintenance Addendum prior to the effective date of such termination. + +3.38 Third Party Administrative Services + +(a) Vendor acknowledges that a third party administrator will perform certain administrative functions for AT&T in relation to this Agreement. Such administrative functions may include: + +(i) Collecting and verifying certificates of insurance; + +(ii) Providing financial analysis; + +(iii) Verifying certifications under the Section entitled "Utilization of Minority, Women, and Disabled Veteran Owned Business Enterprises"; and + +(iv) Collecting and verifying Vendor profile information. + +(b) Vendor shall cooperate with such third party administrator in its performance of such administrative functions and shall provide such data as from time to time the third party administrator may request. Further, notwithstanding any other provision of this Agreement, Vendor agrees that AT&T may provide any information regarding Vendor to such third party administrator. AT&T shall contractually require the third party administrator to maintain confidentiality of Vendor's information with rights to use it solely for purposes of the administrative functions. Vendor agrees to pay the third party administrator an annual fee for the performance of these administrative functions, which annual fee shall not exceed three hundred dollars ($300.00), and a one-time set-up fee of thirty dollars ($30.00). AT&T agrees to reimburse Vendor for such fees listed as a line item expense on the invoice issued by Vendor to AT&T pursuant to Section 3.19 for the month immediately following such payment. + +3.39 Third Party Beneficiaries. All AT&T Affiliates receiving Material or Services under this Agreement and the federal government of the United States shall be express third party beneficiaries under this Agreement. Except to the extent expressly set forth to the contrary in this Agreement (including with respect to Affiliates of AT&T and the U.S. Government), there are no third party beneficiaries of this Agreement, and this Agreement shall not provide any third Person other than AT&T Affiliates and the U.S. Government with any + +Proprietary and Confidential This Agreement and information contained therein is not for use or disclosure outside of AT&T, its Affiliates, and third party representatives, and Vendor except under written agreement by the contracting parties. 42 + +Source: ATN INTERNATIONAL, INC., 10-Q, 11/8/2019 + + + + + +remedy, claim, liability, reimbursement, claim of action or other legal or equitable right in excess of those existing without reference to this Agreement. + +3.40 Title and Risk. Title to Material furnished by Vendor shall vest in AT&T immediately and automatically upon Location Acceptance (as defined in the Build Addendum) or, if after Location Acceptance of a Cell Site, with respect to any Material provided in connection with the Maintenance Addendum, when actually installed or incorporated in the Work; provided, if the Material was paid for or provided by AT&T prior to incorporation into the Work, title shall always be vested in AT&T; provided, further, in both cases Vendor shall retain risk of loss and damages to all of the Material (including all AT&T Provided Equipment (as such term is defined in the Build Addendum)) until Location Acceptance and thereafter to the extent such Material is in the custody or control of Vendor. + +3.41 Title To Material Furnished by AT&T. Title to material furnished by AT&T under this Agreement shall at all times be in AT&T's name. Vendor assumes full responsibility for any loss or damage to such material while material is in Vendor's or its Subcontractor's possession or control and shall be liable for the full value of the material (which shall include AT&T's acquisition cost plus all taxes and shipping). Vendor shall not allow or permit any Lien to be placed upon or otherwise encumber any AT&T Provided Equipment or other assets, properties or rights owned, operated or leased by AT&T or any of its Affiliates. + +AT&T may inspect and inventory the material furnished by AT&T under this Agreement during Vendor's normal business hours. Prior to Location Acceptance, Vendor shall provide AT&T escorted access to the premises wherein all such material is located and, following Location Acceptance, AT&T shall have access to the premises wherein all such material is located pursuant to the terms of the Master License Agreement and the applicable Site License thereunder or any third party Tower Lease, as applicable. The obligations assumed by Vendor with respect to material furnished by AT&T under this Agreement are for the protection of AT&T's property. Should Vendor fail to comply in any respect, in addition to any other right or remedy AT&T may have, upon ten (10) days' written notice to Vendor, AT&T may withdraw all or any part of the material furnished. Vendor shall, at AT&T's option, return to AT&T, or hold for AT&T's disposition, any or all of such material provided by AT&T under this Agreement upon termination of this Agreement or the withdrawal of the material furnished; provided however, that with respect to any scrap produced as a by-product remaining in Vendor's possession at the completion of all Work to be provided at a Cell Site, Vendor shall, at AT&T's option, return to AT&T, or hold for AT&T's disposition, such scrap material for a period of one hundred twenty (120) days following the earlier of Location Acceptance at such Cell Site or the earlier termination of this Agreement with respect to such Cell Site. + +At all times and at Vendor's expense, Vendor shall maintain property insurance for all perils, for full replacement cost for all property of AT&T in the care, custody and control of the Vendor. AT&T shall be named as an additional insured and loss payee. + +Proprietary and Confidential This Agreement and information contained therein is not for use or disclosure outside of AT&T, its Affiliates, and third party representatives, and Vendor except under written agreement by the contracting parties. 43 + +Source: ATN INTERNATIONAL, INC., 10-Q, 11/8/2019 + + + + + +3.42 Transaction Costs. Except as expressly provided in this Agreement, each Party shall bear its own fees and expenses (including the fees and expenses of its agents, representatives, attorneys, and accountants) incurred in connection with the negotiation, drafting, execution, and performance of this Agreement and the transactions it contemplates. + +3.43 Utilization of Minority, Women, and Disabled Veteran Owned Business Enterprises + +(a) Vendor shall submit annual participation plans in the form set forth at http://www.attsuppliers.com no later than the Effective Date and by December 31 of each calendar year thereafter, establishing Vendor's goals for the upcoming reporting period for participation by minority owned business enterprises ("MBE"), women owned business enterprises ("WBE") and disabled veteran owned business enterprises ("DVBE"), with "participation" expressed as a percentage of aggregate estimated annual purchases by AT&T for the reporting period. + +(b) By the tenth day following the close of each calendar month, Vendor shall, in a format and manner acceptable to AT&T, report actual results of its efforts to meet the goals set forth in the applicable participation plan during the preceding calendar month. When reporting results, Vendor shall count only expenditures with entities that are certified as MBE, WBE, or DVBE firms by third party certifying agencies recognized by AT&T, as listed on http://www.attsuppliers.com. + +3.44 Vendor Personnel and Employment Matters + +(a) Personnel provided by Vendor shall be considered solely the employees of Vendor or its Subcontractors and not employees or agents of AT&T. Vendor has and shall retain the right to exercise full control of and supervision over the performance of the Services and full control over the employment, direction, assignment, compensation, and discharge of all personnel performing the Services. Vendor and its Subcontractors are and shall be solely responsible for all matters relating to compensation and benefits for all personnel provided by Vendor. Vendor shall ensure that all persons furnished by Vendor conduct themselves in a professional manner and in accordance with all policies set forth in this Agreement, the Build Addendum and the Maintenance Addendum. + +(b) If AT&T requests that Vendor or its Subcontractor remove any person provided by Vendor or its Subcontractor from AT&T's account for any lawful reason, then Vendor shall immediately comply with such request. Vendor shall, at no cost to AT&T, provide a qualified replacement. + +3.45 Warranty + +(a) The warranty period for all Material (excluding AT&T Provided Equipment) shall commence upon Delivery of such Material to Vendor from the OEM and shall continue for a period equal to the longer of (i) [***] or (ii) the applicable warranty period actually received by Vendor from the OEM for such Material Vendor acquired directly from the OEM, including the Vendor Provided Equipment as defined in the Build Addendum (the "Material Warranty Period"). Vendor provides no warranty for Material with respect to any AT&T Provided Equipment. The warranty period for workmanship and all Services provided + +Proprietary and Confidential This Agreement and information contained therein is not for use or disclosure outside of AT&T, its Affiliates, and third party representatives, and Vendor except under written agreement by the contracting parties. 44 + +Source: ATN INTERNATIONAL, INC., 10-Q, 11/8/2019 + + + + + +hereunder, including the Build Services contemplated in the Build Addendum, shall commence upon Location Acceptance of the applicable Cell Site and continue for a period equal to [***] from Location Acceptance of the applicable Cell Site (the "Workmanship Warranty Period"). For the duration of such warranty period, Vendor represents and warrants to AT&T as follows: + +(i) Material (excluding AT&T Provided Equipment) furnished hereunder will be merchantable, free from defects in design, material and workmanship, fit and sufficient for the purposes set forth in the Agreement, free from all Liens at the time of Location Acceptance, and will during the Material Warranty Period strictly conform to and perform in accordance with applicable Specifications, drawings and samples. + +(ii) Services provided hereunder will be performed (A) in a professional and efficient manner, in strict compliance with the Specifications, (B) with the care, skill, and diligence, and in accordance with professional industry standards and practices, currently recognized in Vendor's profession or industry, (C) in compliance with all applicable Laws and all descriptions and representations as to the Services (including performance capabilities, accuracy, completeness, characteristics, specifications, configurations, standards, functions and requirements) set forth in this Agreement, the Build Addendum and the Maintenance Addendum (and all schedules thereto), and (D) by personnel with appropriate experience, knowledge and competence. If Vendor fails to meet applicable professional standards, Vendor will, without additional compensation, promptly correct or revise any errors or deficiencies in the Services furnished hereunder. + +(b) In addition, Vendor represents and warrants that: + +(i) Vendor is duly organized, validly existing and in good standing under the laws of its state of formation with all requisite power to enter into and perform its obligations under this Agreement, the Build Addendum and the Maintenance Addendum and has the full power, authority and right to provide the Material and Services specified herein; + +(ii) The execution, delivery and performance of this Agreement, the Build Addendum and the Maintenance Addendum has been duly and validly authorized and approved by all necessary action of Vendor and will constitute legal, valid and binding obligations of Vendor enforceable in accordance with their respective terms; + +(iii) Vendor has (or will have at the time of the performance of the applicable Services) and will continue to hold during the performance of the applicable Services during the Term of this Agreement (or the Build Addendum Term or Maintenance Addendum Term, as applicable) all permits, licenses and Contracts required to enter into and perform this Agreement, the Build Addendum and Maintenance Addendum and to deliver the Material and Services hereunder; + +(iv) As of the Effective Date, there are no actions, suits, or proceedings, pending or threatened, which will have a material adverse effect on Vendor's ability to fulfill its + +Proprietary and Confidential This Agreement and information contained therein is not for use or disclosure outside of AT&T, its Affiliates, and third party representatives, and Vendor except under written agreement by the contracting parties. 45 + +Source: ATN INTERNATIONAL, INC., 10-Q, 11/8/2019 + + + + + +obligations under this Agreement and Vendor will immediately notify AT&T if, during the Term, Vendor becomes aware of any such action, suit, or proceeding; + +(v) Vendor has, as of the Effective Date, and will continue to have during the Term of the Build Addendum or Maintenance Addendum, as applicable, all necessary skills, rights, and financial resources (including any required binding commitments for financing from third Persons) applicable to such obligations then in effect, and authority to enter into this Agreement, the Build Addendum or the Maintenance Addendum, including the authority to provide or license the Material or Services, and satisfy all of its obligations hereunder and thereunder; + +(vi) As of the Effective Date, no third party claim has been alleged against Vendor that any Material and Services provided hereunder infringes upon such third party's intellectual property rights and Vendor will immediately notify AT&T if, during the Term, Vendor becomes aware of any such third party claim; + +(vii) No consent, approval, or withholding of objection is required from any entity, including any governmental authority, with respect to the entering into or the performance of this Agreement, the Build Addendum or the Maintenance Addendum; + +(viii) At the time of Location Acceptance (or, if later, at the time of Delivery), the Material and Services will be provided free of any Lien of any kind; + +(ix) Vendor will be fully responsible and liable for all acts, omissions, and Work performed by any of its representatives, including any Subcontractors; + +(x) All representatives, including Subcontractors, will strictly comply with the provisions specified in this Agreement and all applicable Laws; + +(xi) Vendor will strictly comply with the terms of this Agreement, the Build Addendum and the Maintenance Addendum, including those specified in any exhibits, schedules or appendices attached hereto or thereto; and + +(xii) All Material provided to AT&T hereunder shall be tested by or on behalf of Vendor prior to installation and prior to Location Acceptance to ensure its compliance with the Specifications. + +(c) All representations and warranties set forth above in Section 3.46(b) or elsewhere in this Agreement (other than the specific warranty periods specified in Section 3.46(a)) will survive expiration or termination of this Agreement for a period of [***] years from such expiration or termination; provided however, that any such representation and warranty that relates solely to the Build Services provided pursuant to the Build Addendum shall survive for a period of [***] years following Location Acceptance of all Cell Sites. The foregoing warranties will be in addition to all other warranties, express, implied or statutory. Vendor shall defend, indemnify and hold AT&T, its Affiliates, and their agents and representatives harmless from + +Proprietary and Confidential This Agreement and information contained therein is not for use or disclosure outside of AT&T, its Affiliates, and third party representatives, and Vendor except under written agreement by the contracting parties. 46 + +Source: ATN INTERNATIONAL, INC., 10-Q, 11/8/2019 + + + + + +and against all Third Party Losses arising out of or resulting from a breach of these representations and warranties, in accordance with the Section herein entitled "Indemnity". + +(d) If at any time during the warranty period for Material or Services AT&T believes there is a breach of any warranty, AT&T will notify Vendor setting forth the nature of such claimed breach. Vendor shall promptly investigate such claimed breach and shall either (i) provide Information satisfactory to AT&T that no breach of warranty in fact occurred or (ii) at no additional charge to AT&T, promptly take such action as may be required to correct such breach. If the required corrective action is to re-perform the Services and/or repair the Material, and if Vendor fails or refuses to make such repairs and/or re-perform such Services, then, in addition to any other remedies, AT&T shall have the right, at its option, either (1) to perform such Services and to repair such Material itself or engage a third party to do so, in either case at Vendor's expense; or (2) to receive a full refund of any amounts paid for such Material and Services. Vendor shall bear all transportation costs and risk of loss and damage in transit with respect to all Material transported in connection with this Section, and all repaired and replacement Material is warranted as provided herein. + +(e) If a breach of warranty for which Vendor is responsible has not been corrected within a commercially reasonable time, and such breach has caused material and irreparable damage and harm to AT&T, then upon thirty (30) days' notice to Vendor, AT&T may terminate this Agreement with respect to the applicable Cell Site(s) without further liability to Vendor for those Cell Sites. + +3.46 Subcontractors; Work Done By Others. + +(a) If any part of Vendor's Work is dependent upon work performed by others or subcontracted consistent with the terms herein, Vendor shall inspect and promptly report to AT&T any defect that renders such other work unsuitable for Vendor's proper performance. Vendor's silence shall constitute approval of such other work as fit, proper and suitable for Vendor's performance of its Services or provision of Material. + +(b) Any use of, including any changes to the use of, a Subcontractor shall be subject to the requirements of this Section 3.46. Vendor shall provide and keep current a list of all Subcontractors and certain information about each such Subcontractor, including the identity of, the location of, and a complete description of the activities to be performed by such Subcontractor. Vendor will provide such list of Subcontractors to AT&T upon request. If AT&T notifies Vendor that a particular Subcontractor is unacceptable to AT&T because use of the Subcontractor could adversely affect the security of AT&T's networks, or cause material financial harm to AT&T, or have a material and detrimental effect on AT&T's reputation, Vendor shall promptly cease use of such Subcontractor and provide a replacement Subcontractor or perform the Services itself. Should Vendor fail or refuse to cease use of any Subcontractor and provide a substitute Subcontractor or perform the Services itself after AT&T's request, AT&T shall have the right to terminate this Agreement. Where a portion of the Work is subcontracted, Vendor remains fully responsible for performance thereof and shall be responsible to AT&T for the acts and omissions of any Subcontractor, to the same extent as if such acts or omissions were performed by Vendor. Nothing in this Agreement shall create + +Proprietary and Confidential This Agreement and information contained therein is not for use or disclosure outside of AT&T, its Affiliates, and third party representatives, and Vendor except under written agreement by the contracting parties. 47 + +Source: ATN INTERNATIONAL, INC., 10-Q, 11/8/2019 + + + + + +any contractual obligation or other liability of AT&T to any Subcontractor or its employees. Vendor shall require all Subcontractors performing Work on the project or who may enter upon the Work site to maintain the same insurance requirements as those set forth in the Section entitled "Insurance" of this Agreement. Vendor agrees to bind every Subcontractor to terms consistent with the terms of this Agreement. Prior to Location Acceptance of all Cell Sites pursuant to the Build Addendum, Vendor shall immediately notify AT&T of any (i) failure or inability of Vendor to pay to any Subcontractor or other Vendor Person when due any amount owed to such Subcontractor or Vendor Person or (ii) any claim, notice or action asserted by any such Subcontractor or Vendor Person of or relating to any such failure or inability to pay amounts when due. Following Location Acceptance of all Cell Sites pursuant to the Build Addendum, Vendor shall immediately notify AT&T of any (x) failure (in the absence of a good faith dispute) or inability of Vendor to pay to any Subcontractor or other Vendor Person when due any amount owed to such Subcontractor or Vendor Person or (y) any claim, notice or action asserted by any such Subcontractor or Vendor Person of or relating to any such failure (in the absence of a good faith dispute) or inability to pay amounts when due. + +3.47 Affordable Care Act. For purposes of the Affordable Care Act (ACA), and in particular for purposes of Section 4980H of the Internal Revenue Code of 1986, as amended, and the regulations thereunder, with respect to each individual provided by Vendor to work on AT&T project(s) for at least thirty (30) hours per week for at least ninety (90) days, whether consecutive or not, Vendor represents and warrants that it or one of its Subcontractors is the common law employer of such individual and shall be responsible for either providing healthcare coverage as required by the ACA (to the extent applicable) or for paying any Section 4980H assessable payments that may be required for failure to provide to such individual: (a) health care coverage, or (b) affordable healthcare coverage. In no event will AT&T be considered to be the common law employer of such individual for purposes of the ACA. Vendor shall maintain for a period of ten (10) years (or such shorter period as required by applicable Law) information to show compliance with the ACA notwithstanding any other provision in this Agreement to the contrary. + +3.48 Customer Information + +(a) As between Vendor and AT&T, title to all Customer Information and customer proprietary network information ("CPNI") (as that term is defined in Section 222 of the Communications Act of 1934, 47 U.S.C. §222 (as amended, "Section 222")) shall be in AT&T. Except as otherwise provided herein, no license or rights to any Customer Information are granted to Vendor hereunder. + +(b) Vendor acknowledges that Customer Information received may be subject to certain privacy laws and regulations and requirements, including requirements of AT&T. Vendor shall consider Customer Information to be private, sensitive and confidential. Accordingly, with respect to Customer Information, Vendor shall comply with all applicable privacy laws and regulations and requirements, including the CPNI restrictions contained in Section 222. Accordingly, Vendor shall: + +Proprietary and Confidential This Agreement and information contained therein is not for use or disclosure outside of AT&T, its Affiliates, and third party representatives, and Vendor except under written agreement by the contracting parties. 48 + +Source: ATN INTERNATIONAL, INC., 10-Q, 11/8/2019 + + + + + +(i) not use any CPNI to market or otherwise sell products to AT&T's customers, except to the extent necessary for the performance of Services for AT&T or as otherwise approved or authorized by AT&T in this Agreement or in writing; + +(ii) make no disclosure of Customer Information to any party other than AT&T, except to the extent necessary for the performance of Services for AT&T or except such disclosure required under force of law; provided that Vendor shall provide AT&T with notice immediately upon receipt of any legal request or demand by a judicial, regulatory or other authority or third party to disclose or produce Customer Information; Vendor shall furnish only that portion of the Customer Information that it is legally required to furnish and shall provide reasonable cooperation to AT&T should AT&T exercise efforts to obtain a protective order or other confidential treatment with respect to such Customer Information; + +(iii) not incorporate any Customer Information into any database other than in a database maintained exclusively for the storage of AT&T's Customer Information; + +(iv) not incorporate any data from any of Vendor's other customers, including Affiliates of AT&T, into AT&T's customer database; + +(v) make no use whatsoever of any Customer Information for any purpose except to comply with the terms of this Agreement; + +(vi) make no sale, license or lease of Customer Information to any other party; + +(vii) restrict access to Customer Information to only those employees of Vendor that require access to perform Services under this Agreement; + +(viii) prohibit and restrict access or use of Customer Information by any of Vendor's other customers, any of Vendor's affiliates, or third parties except as may be agreed otherwise by AT&T; + +(ix) promptly return all Customer Information to AT&T upon expiration or termination of this Agreement, unless expressly agreed or instructed otherwise by AT&T; and + +(x) immediately notify AT&T upon Vendor's awareness of (1) any breach of the above- referenced provisions, (2) any disclosure (inadvertent or otherwise) of Customer Information to any third party not expressly permitted herein to receive or have access to such Customer Information, or (3) a breach of, or other security incident involving, Vendor's systems or network that could cause or permit access to Customer Information inconsistent with the above-referenced provisions, and such notice shall include the details of the breach, disclosure or security incident. Vendor shall fully cooperate with AT&T in determining, as may be necessary or appropriate, actions that need to be taken including the full scope of the breach, disclosure or security incident, corrective steps to be taken by Vendor, the nature and content of any customer notifications, law enforcement involvement, or news/press/media contact etc., and Vendor shall not + +Proprietary and Confidential This Agreement and information contained therein is not for use or disclosure outside of AT&T, its Affiliates, and third party representatives, and Vendor except under written agreement by the contracting parties. 49 + +Source: ATN INTERNATIONAL, INC., 10-Q, 11/8/2019 + + + + + +communicate directly with any AT&T customer without AT&T's consent, which such consent shall not be unreasonably withheld. + +3.49 Reimbursable Expenses. AT&T is not responsible for any travel, meal or other business related expense incurred by Vendor, whether or not incurred in its performance of its obligations under this Agreement, in addition to any such amounts that are included in the Structured Payments. + +4.0 Special Terms + +4.1 Access + +(a) Following Location Acceptance and in connection with the Maintenance Addendum, Vendor shall have reasonable access to AT&T's Cell Sites contemplated in the Build Addendum to enable Vendor to perform its obligations under the Maintenance Addendum. Vendor shall coordinate such access with AT&T's designated representative prior to visiting such premises. Vendor will ensure that only Vendor Persons will be allowed to enter AT&T's premises by using AT&T systems, such as the NFSD portal. If AT&T requests Vendor or its Subcontractors to discontinue furnishing any person provided by Vendor or its Subcontractor from performing Work on AT&T's premises or at any Cell Site, Vendor shall immediately comply with such request. Such person shall leave AT&T's premises or Cell Site promptly, and Vendor shall not furnish such person again to perform Work on AT&T's premises without AT&T's written consent. The Parties agree that, where required by governmental regulations, Vendor will submit satisfactory clearance from the U.S. Department of Defense and/or other federal, state, or local authorities. + +(b) AT&T requires Vendor or its representatives, including any Vendor Persons, to exhibit identification credentials, which AT&T may issue, to gain access to AT&T's premises for the performance of Services. If for any reason, any Vendor Person is no longer performing such Services, Vendor shall immediately inform AT&T. Notification shall be followed by the prompt delivery to AT&T of the identification credentials, if issued by AT&T, or a written statement of the reasons why the identification credentials cannot be returned. + +(c) Vendor shall ensure that its representatives, including any Vendor Persons, while on or off AT&T's premises, will (i) perform Services which conform to the Specifications, (ii) protect AT&T's material, buildings, and structures, (iii) perform Work which does not interfere with AT&T's business operations, and (iv) perform with care and due regard for the safety, convenience, and protection of AT&T, its employees, and property. + +4.2 AT&T Supplier Information Security Requirements (SISR). Vendor shall comply with AT&T's Supplier Information Security Requirements (the "SISR") set forth in Exhibit B attached hereto and incorporated herein by reference. Vendor shall cooperate fully with AT&T, including by completing checklists or similar documentation, to ensure that Customer Information, AT&T Derived Data, Software and/or computer systems + +Proprietary and Confidential This Agreement and information contained therein is not for use or disclosure outside of AT&T, its Affiliates, and third party representatives, and Vendor except under written agreement by the contracting parties. 50 + +Source: ATN INTERNATIONAL, INC., 10-Q, 11/8/2019 + + + + + +Vendor develops, designs, supports and/or uses under this Agreement comply with the standards and requirements set forth in the SISR. + +4.3 Background Checks + +(a) To assist AT&T's compliance with the law and its duties to protect its own employees and customers, Vendor, and subject to any Laws to the contrary that limit any Vendor action otherwise required by this Section, Vendor shall: + +(i) make all reasonable efforts, including checking the background, verifying the personal information and checking each Vendor Person's identification credentials, to determine all information necessary to verify whether any Vendor Person whom Vendor proposes to have perform any Service that permits Physical Entry or virtual or other access to AT&T's or its customers' systems, networks, or Information ("Access") at any time during the term of this Agreement (provided that the terms of this Section shall not apply to Vendor Persons having escorted access to secured AT&T areas not available to the general public where such Vendor Persons will not be providing "Services", delivering/installing "Material", or otherwise engaged in work activities under this Agreement, e.g., does not apply to attending meetings, reviewing locations to prepare contract bids, etc.): + +(1) has been convicted of any felony, or has been convicted of any misdemeanor involving violence, sexual misconduct, theft or computer crimes, fraud or financial crimes, drug distribution, or crimes involving unlawful possession or use of a dangerous weapon ("Conviction") or is identified on any government registry as a sex offender ("Sex Offender Status"); and + +(2) in addition to the requirements of Subsection (1) above, perform a Drug Screen on any Vendor Person whom Vendor proposes to have access to Customer Information, Systems, or Physical Entry onto AT&T's or its customers' premises, and not permit any such Vendor Person presenting a positive Drug Screen to have access to Customer Information, Systems, or Physical Entry onto AT&T's or its customers' premises. + +(ii) Comply with the obligations of Subsection (a)(i)(1) above by a Background Check, including credit history, employment history, driving records and criminal history ("Background Check") of applicable records for those counties, states, and federal court districts in which a proposed Vendor Person has identified as having resided, worked, or attended school in the previous ten (10) years, unless a shorter period is required by any Laws. + +(b) It is Vendor's sole and exclusive responsibility to determine whether a Vendor Person's Conviction or Sex Offender Status has a reasonable relationship to the individual's fitness or trustworthiness to perform the Service or other work activity, subject to applicable Laws on the consideration of criminal convictions in making employment decisions. If however a Vendor Person needs to have Physical Entry onto the premises of an AT&T customer, AT&T may require additional background information about and/or drug screening for the Vendor Person, when required by applicable Law, before permitting that individual to enter the customer's premises. + +Proprietary and Confidential This Agreement and information contained therein is not for use or disclosure outside of AT&T, its Affiliates, and third party representatives, and Vendor except under written agreement by the contracting parties. 51 + +Source: ATN INTERNATIONAL, INC., 10-Q, 11/8/2019 + + + + + +(c) Upon discovering that any Vendor Person has falsified any of his or her Social Security number, driver's license, educational credentials, employment history, home address, and citizenship indicia, such Vendor Person shall not have Access or perform work for AT&T under this Agreement. Vendor shall maintain records of all Background Checks and Drug Screens performed for Vendor Persons under this Agreement for the Term of this Agreement, or for such shorter period if provided by applicable Law, for AT&T to verify compliance with this Section. + +4.4 Clean Up. Vendor at all times, and at its expense, shall keep AT&T and its landlord's premises safe and free from accumulation of waste materials or rubbish caused by Vendor's operations. Upon completion of the Work, Vendor shall, at its expense, remove promptly from the premises all of Vendor's implements, equipment, tools, machines, surplus and waste materials and debris. If Vendor fails to clean up as provided herein, AT&T may hire another contractor to do so and charge the cost thereof to Vendor or deduct same from AT&T's payments to Vendor. + +4.5 Vendor's Audited Financial Statements. Vendor shall provide to AT&T (or its third party delegate), upon request and at no charge, its parent company, ATN International, Inc.'s bona fide and unedited: (a) financial statements for each quarter of each fiscal year during the term of the Build Addendum and (b) audited fiscal year financial statements for each fiscal year during the Term hereof. + +4.6 Vendor Personnel Information. In order to satisfy physical and network security requirements for AT&T, which may include both issuance of a building access badge and picture ID badge to Vendor personnel, Vendor and/or its personnel agree to provide any and all personal information required by the AT&T security department. This information includes, but is not limited to, social security numbers. Vendor personnel will not be authorized to perform Work for AT&T if Vendor personnel refuse to provide any and all information necessary to complete the process of issuing a badge or acquiring network access. AT&T will not be required to pay Vendor for the time spent trying to acquire a badge or network access for Vendor personnel while on premises at AT&T. + +Vendor is responsible for notifying the AT&T project manager of all Vendor information related to new hires, termination or changes in information. This includes but is not limited to starting date, end date and location changes. + +4.7 Damage to Property. Vendor assumes full responsibility for any damage or loss to AT&T's property that may be caused by or result from any tortious act or omission of Vendor or any person employed by or under contract with Vendor. In the event of such damage, AT&T may elect to have repairs made by Vendor, by AT&T personnel, or by other contractors. In the event AT&T shall elect to have Vendor repair the damage, Vendor shall promptly do so, at its own expense and to AT&T's satisfaction. In the event AT&T + +Proprietary and Confidential This Agreement and information contained therein is not for use or disclosure outside of AT&T, its Affiliates, and third party representatives, and Vendor except under written agreement by the contracting parties. 52 + +Source: ATN INTERNATIONAL, INC., 10-Q, 11/8/2019 + + + + + +shall elect to have the damage repaired by its own personnel or other contractors, Vendor shall reimburse AT&T for the cost to it of such repairs. + +If Vendor causes damage to AT&T's property, including damage to copper or fiber cable, Vendor shall reimburse AT&T for any actual direct damages or losses incurred in connection therewith. + +4.8 Dispute Resolution. + +(a) Escalation Procedure. The Parties agree to seek to resolve any dispute between the Parties or otherwise arising out of this Agreement or an Addendum in accordance with the following escalation procedures before commencing the arbitration procedures described below. + +(i) The contact persons of both Parties shall work in good faith to try to resolve the dispute within twenty (20) days from the date that a Party first gives notice that a dispute has occurred. + +(ii) If the contact persons fail to reach an agreement on the dispute within twenty (20) days, the dispute shall be referred to more senior persons within the respective Parties who shall try to resolve the dispute within a further twenty (20) day period. If no resolution is found each Party is entitled to commence the arbitration proceedings described below. + +(b) Arbitration. Any controversy or claim between the Parties or otherwise arising out of or relating to this Agreement, or the breach thereof, other than any action taken to enforce the right to payment of Structured Payments, shall be resolved by arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules then in effect, and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. Each of the Parties hereby submits to the jurisdiction of the United States District Court for the Southern District of New York and of any New York state court sitting in New York, New York for purposes of all actions taken to enforce the right to payment of the Structured Payments. + +(c) Locale. The hearings shall be held at a mutually agreed upon location within the United States at which the Parties may present evidence (including, without limitation, witnesses and documentation) and argument in support of their respective positions. If the Parties cannot agree upon an arbitration location within 3 business days, the arbitration shall be conducted in New York City, New York. + +(d) Award. The arbitrators shall make a reasoned award which may include an award of damages (but may not include attorney fees except in a case where a Party has failed to defend or indemnify the other Party where it had an obligation to do so pursuant to Sections 3.15 or 3.36) and said award shall be in writing setting forth the statement of facts to support their conclusions and decision. The decision rendered by the arbitrators will be final, conclusive, and binding upon the Parties, and any judgment thereon may be entered and enforced in any court of competent jurisdiction. + +Proprietary and Confidential This Agreement and information contained therein is not for use or disclosure outside of AT&T, its Affiliates, and third party representatives, and Vendor except under written agreement by the contracting parties. 53 + +Source: ATN INTERNATIONAL, INC., 10-Q, 11/8/2019 + + + + + +(e) Continuation of Service Pending Arbitration. Vendor and AT&T will continue to provide all Services and honor all other commitments under this Agreement in accordance with this Agreement during the course of resolution of disputes and arbitration pursuant to this Agreement. + +4.9 Electronic Data Interchange (EDI) + +(a) The Parties may exchange orders, payments, acknowledgements, invoices, remittance notices, and other records ("Data") electronically, in place of tangible documents, and agree to exchange such Data in accordance with the Telecommunications Industry Forum EDI Guidelines for use of American National Standards Institute (ANSI) Accredited Standards Committee X12 transaction sets, unless they mutually agree to a proprietary format or another standard such as Extensible Markup Language (XML). + +(b) The following additional conditions apply to any such exchanges: + +(i) Garbled Transmissions: If any Data is received in an unintelligible, electronically unreadable, or garbled form, the receiving Party shall promptly notify the originating Party (if identifiable from the received Data) in a reasonable manner. In the absence of such notice, the originating Party's record of the contents of such Data shall control. + +(ii) Signatures: Each Party will incorporate into each EDI transmission an electronic identification consisting of symbol(s) or code(s) ("Signature"). Each Party agrees that any predetermined Signature of such Party included in or affixed to any EDI transmission shall be sufficient to verify such Party originated, "signed" and "executed" such transmission. No Party shall disclose to any unauthorized Person the Signatures of the Parties hereto. + +(iii) Statute of Frauds: The Parties expressly agree that all Data transmitted pursuant to this clause shall be deemed to be a "writing" or "in writing" for purposes of the Uniform Commercial Code (UCC). Any such Data containing or having affixed to it a Signature shall be deemed for all purposes to: (i) to have been "signed" and "executed"; and (ii) to constitute an "original" when printed from electronic files or records established and maintained in the normal course of business. + +(iv) Method of Exchange: Exchange of Data will be made by direct electronic or computer systems communication between AT&T and Vendor or by indirect communications using a third party service provider ("Provider") or Value Added Network ("VAN") to translate, forward and/or store such Data. Each Party shall be responsible for the cost(s) and associated cost(s) of any Provider or VAN with which it contracts. + +(v) When the Parties are using EDI, the requirements of the EDI system will govern and will control if in conflict with any other provision of this Agreement. + +Proprietary and Confidential This Agreement and information contained therein is not for use or disclosure outside of AT&T, its Affiliates, and third party representatives, and Vendor except under written agreement by the contracting parties. 54 + +Source: ATN INTERNATIONAL, INC., 10-Q, 11/8/2019 + + + + + +4.10 Emergency Work. In an emergency, AT&T's representative may orally request Vendor to perform Work. + +4.11 Hazardous Material and Regulated Substances + +(a) If Vendor or its Subcontractors provide Material and/or Services in a state other than California, then Subparagraphs (i) through (iv) of this Subsection (a) shall apply. + +(i) A "Regulated Substance" as referenced in this Subsection is a generic term used to describe all materials that are regulated by the federal or any state or local government during transportation, handling and/or disposal. This includes, but is not limited to, materials that are regulated as (a) "hazardous materials" under the Hazardous Materials Transportation Act, (b) "chemical hazards" under the Occupational Safety and Health Administration (OSHA) standards, (c) "chemical substances or mixtures" under the Toxic Substances Control Act, (d) "pesticides" under the Federal Insecticide, Fungicide and Rodenticide Act and (e) "hazardous wastes" as defined or listed under the Resource Conservation and Recovery Act. + +(ii) Vendor shall comply with all applicable Laws, including any notice requirements, regarding any Material ordered hereunder which contains or consists of a Regulated Substance or any Service ordered hereunder which involves the handling, use, storage, recycling, disposal or transportation of Regulated Substances. Vendor shall notify AT&T and provide AT&T with all necessary information (including but not limited OSHA Material Safety Data Sheets (MSDS)) at least thirty (30) days before shipping Material containing or consisting of Regulated Substances to AT&T or commencing the performance of Services for AT&T involving the handling or use of Regulated Substances. Each MSDS must include information indicating the specific worker protection equipment requirement for use of the Regulated Substance covered thereby. + +(iii) AT&T and Vendor shall cooperate concerning the acceptance of any Material containing or consisting of a Regulated Substance or for Services involving the handling or use of Regulated Substances. Vendor shall provide assistance to AT&T of an advisory nature in the handling and use of Regulated Substances provided hereunder and the disposal of "hazardous waste", as defined by applicable Laws ("Hazardous Wastes"), resulting therefrom. + +(iv) Vendor shall provide AT&T with the same information pertaining to Regulated Substances in the Material and Services and used in the Services it provides to AT&T or Hazardous Waste resulting therefrom as Vendor provides to Vendor's employees or agents involved in the disposition or treatment of such Regulated Substances or Hazardous Waste. + +(b) If Vendor or its Subcontractors provide Material and/or Services in the state of California, then Subparagraphs (i) through (vi) of this Subsection (b) shall apply. + +(i) A "Regulated Substance" as referred to in this Subsection is a generic term used to describe all materials that are regulated by federal or any state or local government during transportation, handling and/or disposal. These include, but are not limited to, materials + +Proprietary and Confidential This Agreement and information contained therein is not for use or disclosure outside of AT&T, its Affiliates, and third party representatives, and Vendor except under written agreement by the contracting parties. 55 + +Source: ATN INTERNATIONAL, INC., 10-Q, 11/8/2019 + + + + + +that are regulated as (a) "hazardous material" under the Hazardous Material Transportation Act and the Control of Radioactive Contamination Law, Title 8 of the California Code of Regulation, Section 5194, and the Hazardous Substances Information and Training Act, (b) "chemical hazards" under the Occupational Safety and Health Administration (OSHA) standards, (c) "chemical substances and mixtures" under the Toxic Substances Control Act and "chemicals" on the Governor's List known to the State of California to cause cancer, birth defects, and/or other reproductive harm, as that term is defined in the California Safe Drinking Water and Toxic Enforcement Act of 1986 ("Proposition 65"), (d) "pesticides" under the Federal Insecticide, Fungicide and Rodenticide Act, and (e) "hazardous waste" as defined or listed under the Resource Conservation and Recovery Act and the Hazardous Waste Control Law. + +(ii) Vendor shall comply with all applicable Laws, including any notice requirements, regarding any Material ordered hereunder which contains or consists of a Regulated Substance or any Service ordered hereunder which involves the use, handling, storage, recycling, disposal or transportation of Regulated Substances. Vendor shall notify AT&T and provide AT&T with all necessary information (including but not limited OSHA Material Safety Data Sheets (MSDS)) at least thirty (30) days before shipping Material containing or consisting of Regulated Substances to AT&T or commencing the performance of Services for AT&T involving the handling or use of Regulated Substances. Each MSDS must include information indicating the specific worker protection equipment requirement for use with the Regulated Substance covered thereby. If the Regulated Substance is a chemical defined by Proposition 65, the MSDS for said chemical should indicate that the chemical is one which is known to the state of California to cause cancer, birth defects or other reproductive harm. Vendor shall maintain and distribute such information upon request to AT&T and/or any other Vendor at the same location. + +(iii) AT&T and Vendor shall cooperate concerning the acceptance by AT&T of any Material consisting of or containing a Regulated Substance or Service involving the use and handling of Regulated Substances. Vendor shall provide assistance to AT&T of an advisory nature in the handling and use of Hazardous Wastes provided hereunder and the disposal of Hazardous Wastes resulting therefrom. + +(iv) Vendor shall provide AT&T with the same information pertaining to Regulated Substances in or used in the Material and Services it provides to AT&T or Hazardous Waste as Vendor provides to Vendor's employees or agents involved in the disposition or treatment of such Regulated Substances. + +(v) Vendor shall, and shall require its Subcontractors to, issue warnings in accordance with Proposition 65 for exposure to chemicals covered by Proposition 65 introduced by Vendor or its Subcontractor to personnel at AT&T's California facilities, the public and AT&T from the time Vendor and/or its Subcontractor enter AT&T's California facilities and/or commences performing Services through the completion of such performance. Vendor shall, and shall require its Subcontractors to, warn AT&T of any exposure to chemicals covered by Proposition 65, which may continue after Vendor or its Subcontractors have + +Proprietary and Confidential This Agreement and information contained therein is not for use or disclosure outside of AT&T, its Affiliates, and third party representatives, and Vendor except under written agreement by the contracting parties. 56 + +Source: ATN INTERNATIONAL, INC., 10-Q, 11/8/2019 + + + + + +completed the performance of Services. Such warning may take the form of, but not be limited to, a MSDS for each such chemical. + +(vi) VENDOR IS HEREBY WARNED IN ACCORDANCE WITH PROPOSITION 65 THAT EXPOSURE TO CHEMICALS MAY OCCUR AT AT&T'S FACILITIES. VENDOR IS ALSO HEREBY WARNED THAT AT&T POLES MAY CONTAIN CHEMICALS KNOWN TO THE STATE OF CALIFORNIA TO CAUSE CANCER IN CERTAIN SITUATIONS. If requested, AT&T shall make available to Vendor, its Subcontractors, and any of their employees, a MSDS for the chemicals covered by Proposition 65, if any, at AT&T's facilities where Vendor is providing Services or in poles which will be handled by or sold to Vendor hereunder. Vendor shall issue appropriate warnings to inform and educate employees, agents, Subcontractors, other invitees and employees of any of them, entering AT&T's facilities or handling poles hereunder of the above information in accordance with applicable Laws. + +4.12 Identification of Vendor's Personnel and Equipment. Vendor's personnel, who may have contact with the public while performing Work for AT&T, shall carry and display upon request identification showing that they are the employees of Vendor. Vendor's personnel shall be responsible for securing permission to enter upon private property when entry is necessary to Vendor's performance of the Service. + +4.13 Independent Contractor. Vendor hereby represents and warrants to AT&T that: + +(a) Vendor is engaged in an independent business and will perform all obligations under this Agreement as an independent contractor and not as the agent or employee of AT&T; + +(b) Vendor's personnel performing Services shall be considered solely the employees or agents of Vendor and not employees or agents of AT&T; + +(c) Vendor has and retains the right to exercise full control of and supervision over the performance of the Services and full control over the employment, direction, assignment, compensation and discharge of all personnel performing the Services; and + +(d) Vendor is solely responsible for all matters relating to compensation and benefits for all of Vendor's personnel who perform Services. This responsibility includes, but is not limited to, (i) timely payment of compensation and benefits, including, but not limited to, overtime, medical, dental, and any other benefit, and (ii) all matters relating to compliance with all employer obligations to withhold employee taxes, pay employee and employer taxes, and file payroll tax returns and information returns under local, state, and federal income tax laws, unemployment compensation insurance and state disability insurance tax laws, social security and Medicare tax laws, and all other payroll tax laws or similar laws with respect to all Vendor personnel providing Services. Vendor will indemnify, defend, and hold AT&T, its Affiliates, and their respective agents and employees, harmless from and against all Loss, arising out of or related to Vendor's failure to comply with this Subsection (d), in accordance with the Section titled "Indemnity." + +Proprietary and Confidential This Agreement and information contained therein is not for use or disclosure outside of AT&T, its Affiliates, and third party representatives, and Vendor except under written agreement by the contracting parties. 57 + +Source: ATN INTERNATIONAL, INC., 10-Q, 11/8/2019 + + + + + +4.14 Inspection of Material. Vendor shall inspect all Material used in the performance of the Work, whether or not furnished by AT&T, for defects or hazardous conditions which could cause property damage, personal injury, or otherwise affect the quality of the Work. Vendor shall report all defects or hazardous conditions to an AT&T representative as soon as the defect has been identified. + +4.15 Inspection of Work. AT&T may have inspectors at the Cell Sites to inspect the performance and quality of the Work and to ensure Vendor's compliance with the plans and Specifications and with the terms and conditions of this Agreement. Any AT&T inspectors, employees or agents, however, shall have no authority to direct or advise Vendor concerning the method or manner by which the Work is to be performed. Vendor has sole authority, responsibility and control over the Work and shall exercise its full responsibilities as an independent contractor. + +4.16 Liens + +(a) At the time of Location Acceptance (or, if delivered thereafter, at the time of Delivery), the Work (including the Material and Services provided) shall be delivered to AT&T free and clear of all Liens of any kind. Following Location Acceptance of each Cell Site, if any Lien or notice of Lien is recorded or stop notice is served upon AT&T for or in connection with labor performed upon, or for or in connection with furnishing Material for use in, or for or in connection with furnishing appliances, teams or power contributing to, the Work (including without limitation Liens securing indebtedness for money borrowed or any obligations for the deferred purchase price of property or services related to or in connection with the Work), Vendor shall promptly discharge any such Liens and shall furnish AT&T with release vouchers or termination statements in settlement and satisfaction of such Liens in forms satisfactory to AT&T. If Vendor does not settle such a Lien or cause the Lien to be released and discharged within a reasonable period of time, not to exceed sixty (60) days after the Lien is filed or asserted, then AT&T shall have the right to procure the discharge of the Lien and, in such event, Vendor shall reimburse AT&T for all moneys paid by AT&T to procure the discharge, including costs and Attorneys' Fees. AT&T may require Vendor to prove payment of bills for Services, Material, or other things furnished or done for the performance of the Work, before making payment to the Vendor. AT&T may request at the time of Location Acceptance of each Cell Site that Vendor furnish an affidavit, stating that all bills in question have been paid in full, and that there are no outstanding claims, admitted or disputed, except as stated in the affidavit. AT&T may request that Vendor furnish receipts, release and Lien waivers, and Lien terminations releasing any Lien. AT&T reserves the right to pay any undisputed bill directly to such Person to whom it is owed and offset the amount (plus any other amounts permitted under this Section) pursuant to Section 3.22 against any amount payable to Vendor. + +(b) To the extent permitted by applicable state law, Vendor agrees that no mechanic's liens or other claim or claims in the nature of a Lien or charge shall be filed or maintained by Vendor or by any claimant claiming through Vendor against the real estate owned by, leased by, licensed to, or otherwise used or occupied by AT&T, or against any Structured Payments or Maintenance Fees, and that such right to file any such Lien is hereby expressly waived by Vendor. Vendor shall not serve or file any notice or document, or take any other action, which + +Proprietary and Confidential This Agreement and information contained therein is not for use or disclosure outside of AT&T, its Affiliates, and third party representatives, and Vendor except under written agreement by the contracting parties. 58 + +Source: ATN INTERNATIONAL, INC., 10-Q, 11/8/2019 + + + + + +would be a prerequisite for filing a claim for any Lien. Further, Vendor shall include the following language in any of its contracts or permitted subcontracts with Persons performing the Work or furnishing Material or Services: + +"Subcontractor agrees that no mechanic's liens or other claim or claims in the nature of a lien or charge for materials, labor, services or equipment in connection with the Services shall be filed or maintained by Subcontractor or by any claimant claiming through Subcontractor against real estate owned by, leased by, licensed to or otherwise used or occupied by Vendor or AT&T or against any amounts due to or coming due from AT&T to the general contractor and that any such right to file such lien, claim or charge is expressly waived." + +In the event that any Lien described in this Section 4.16(b) is filed by Vendor or its Subcontractor and Vendor does not remove such Lien within sixty (60) calendar days of written notification by AT&T, AT&T will have the right, but not the obligation, to pay such sums or take such actions as it deems necessary to have such Lien removed or discharged, and Vendor shall indemnify, defend and save AT&T harmless from and against all resulting Losses, including Attorneys' Fees. + +4.17 Notification of Injury or Damage. Vendor shall promptly notify AT&T of any injury, death, loss or damage to persons, animals, or property which is in any way related to the Work performed under this Agreement, even though such occurrence was not caused or contributed to by Vendor, its employees, or its agents. + +4.18 Protection of Property. Vendor shall immediately report to AT&T's representative any hazardous or unusual conditions or damage to any property caused or observed by Vendor or Vendor's agents on or about the property where the Work is being performed. Vendor agrees to make reasonable efforts to watch for any type of unsatisfactory or unsafe plant condition in need of correction and report such to AT&T's representative. + +4.19 Releases Void. Neither Party shall require waivers or releases by any person or representative of the other Party for visits to its premises, and no such releases or waivers shall be pleaded by either Party in any action or proceeding. + +4.20 Removal and Management of Used Batteries. Upon the Effective Date of this Agreement and thereafter Vendor shall comply with the requirements set forth in AT&T's Appendix BA - Removal and Management of Used Batteries ("RMUB") available at http://www.attsuppliers.com/misc/Appendix-BA- Removal-and-Management-of-Used- Batteries.pdf and incorporated herein by reference. Vendor further agrees to comply with the terms and conditions of the RMUB. Vendor agrees to cooperate fully with AT&T, including completing checklists, surveys, or similar documentation, to ensure that any management, shipment, smelting, recycling, and/or disposal of used batteries by Vendor and its Subcontractors on behalf of AT&T comply with the standards and requirements set forth in the RMUB. Note that the RMUB includes AT&T's requirement that all lead acid + +Proprietary and Confidential This Agreement and information contained therein is not for use or disclosure outside of AT&T, its Affiliates, and third party representatives, and Vendor except under written agreement by the contracting parties. 59 + +Source: ATN INTERNATIONAL, INC., 10-Q, 11/8/2019 + + + + + +batteries used in the United States may not be exported outside of the United States for recycling, smelting, or other disposition. + +4.21 Resource Recovery Center. Vendor and any Subcontractors it utilizes to perform the Services will accurately and completely fill out and sign any necessary shipping documentation on behalf of AT&T or as an authorized agent of AT&T prior to transporting Hazardous Waste, hazardous materials, or universal waste off-site for disposal. Prior to leaving any AT&T facility with such Hazardous Waste, hazardous materials, or universal waste for disposal off-site, Vendor shall sign and date any required shipping documentation on behalf of AT&T and provide a copy of the signed shipping documents to the responsible AT&T employee. Vendor shall subsequently fax a copy of the final shipping document (with signatures) to the AT&T RRC for retention in the project file (if applicable) and mail the original generator copy to the RRC not more than fifteen (15) days after pick-up. Documentation shall be mailed to the appropriate address as detailed below: + +Outside of California: AT&T Services Inc., Attn: Environment, Health & Safety (EH&S), Resource Recovery Center (RCC), One AT&T Way, Room 2C140, Bedminster, NJ 07921-- Phone: (800) 566- 9347 (Prompt 4) -- Fax: (512) 646-3596 + +California: AT&T Services Inc., Attn: Environment, Health & Safety (EH&S), Resource Recovery Center (RCC), P.O. Box 5095, Room 3E000, San Ramon, CA 94583-0995 -- Phone: (800) 566-9347 (Prompt 4) - Fax: (925) 973-0584. + +4.22 Safety Management + +(a) Vendor is responsible for the safe performance of all Services provided hereunder, and shall maintain a safety program appropriate to the Services being performed which complies with all laws and any requirements applicable to the Services. Vendor shall have at least Support Membership status (as defined by NATE) with the National Association of Tower Erectors ("NATE"), or a successor organization approved by AT&T, and shall be actively engaged in implementing best practices, safety requirements and training as advocated by the NATE organization or such successor organization. Further, Vendor, its applicable Subcontractors and their respective tower crews are required to be certified by a training provider recognized by NATE or such successor. Additionally, Vendor shall ensure that all tower workers have Competent Climber certification as defined by OSHA. + +(b) AT&T does not undertake to provide Vendor, its Subcontractors or their employees or representatives with a safe place to work. Vendor is responsible for providing such a safe place to work and shall not be relieved of its duties with regard to the safe performance of the Services by reason of any conduct, acts or omissions of any inspector, employee or representative of AT&T or its landlord or customer. Vendor shall take all reasonable measures and precautions at all times to prevent any bodily injury (including death) of its personnel, its Subcontractors' personnel, and any person who is on or near the premises where such Work is being performed. Vendor further agrees to perform all Work and furnish tools and equipment that comply with known safety regulations, practices, and precautions, including, but not limited to, regulations under the Occupational Safety and Health Act of 1970, as amended, or regulations of any Federal, State or local authorities. Vendor shall comply with the Federal + +Proprietary and Confidential This Agreement and information contained therein is not for use or disclosure outside of AT&T, its Affiliates, and third party representatives, and Vendor except under written agreement by the contracting parties. 60 + +Source: ATN INTERNATIONAL, INC., 10-Q, 11/8/2019 + + + + + +Communications Commission ("FCC") regulations that cover Radio Frequency ("RF") radiation safety, including ANSI C95.1-1982 adopted by the FCC in 1986, and 47 CFR 1.1310 RF Maximum Permissible Exposure limits. Vendor shall operate under an RF safety program, and workers must be fully aware and able to exercise control over their exposure to RF fields. Vendor shall establish a safety organization to implement safety management roles and responsibilities, which include training content and description, communications, inspection and audit, standards and criteria, and frequency and timing of aforementioned aspects of the safety program. Vendor shall develop a system to record and report tower crew personnel certificates, OSHA, EPA and other federal, state and local required information for environmental and public health and safety. Vendor shall maintain staff necessary to provide functional oversight and perform audits to ensure compliance at the national, regional, and market level. Vendor shall provide a "recovery plan" within thirty (30) days of experiencing a work-related or OSHA reportable "major incident" (hospital/death). Such plan shall identify what specific failures contributed to the incident and what practices have been or will be implemented to ensure that the incident does not recur. In the event of conflict between the requirements of this Subsection and any Vendor requirements imposed on its Subcontractors, the stricter health and safety requirements of the two shall prevail. + +4.23 Technical Support. Vendor will provide, at no additional cost to AT&T, full and complete technical assistance to AT&T for the Material and Services provisioned under this Agreement, including ongoing technical support and field service and assistance, and telephone assistance to assist with installation, operation, maintenance and problem resolution as set forth in the terms of the Maintenance Addendum. The availability or performance of this technical support will not be construed as altering or affecting Vendor's obligations as set forth in the "Warranty" Section or as provided elsewhere in this Agreement. Field Service and technical support, including emergency support (service affecting), will be available on call twenty-four (24) hours a day. Vendor will provide to AT&T, and keep current, an escalation document that includes names, titles and telephone numbers, including after-hours telephone numbers, of Vendor personnel responsible for providing technical support to AT&T. Vendor will maintain a streamlined escalation process to speed resolution of reported problems. + +4.24 Testimony. Matters relating to Work under this Agreement may be at issue before various governmental bodies. Vendor agrees to have appropriate members of its company willing to testify at appropriate times at no additional cost, regarding any aspect of the Work, unless otherwise mutually agreed upon by the Parties. + +4.25 AT&T Data and AT&T Derived Data (Big Data) + +(a) Definitions. For purposes of this Section: + +(i) "AT&T Data" means any data or information (i) of AT&T or its customers, that is disclosed or provided to Vendor by, or otherwise obtained by Vendor from, AT&T or any of its customers, including Customer Information and customer proprietary network information (as that term is defined in Section 222 of the Communications Act of 1934, as amended, 47 U.S.C. § 222), as well as data and information with respect to the businesses, customers, + +Proprietary and Confidential This Agreement and information contained therein is not for use or disclosure outside of AT&T, its Affiliates, and third party representatives, and Vendor except under written agreement by the contracting parties. 61 + +Source: ATN INTERNATIONAL, INC., 10-Q, 11/8/2019 + + + + + +operations, networks, systems, facilities, products, rates, regulatory compliance, competitors, consumer markets, assets, expenditures, mergers, acquisitions, divestitures, billings, collections, revenues and finances of AT&T; and (ii) not supplied by AT&T or any of its customers but created, generated, collected or harvested by Vendor either (a) in furtherance of this Agreement or (b) as a result of Vendor's having access to AT&T infrastructure, systems, data, hardware, software or processes (for example, through data processing input and output, service level measurements, or ascertainment of network and system information). + +(ii) "AT&T Derived Data" means any data or information that is a result of any modification, adaption, revision, translation, abridgement, condensation, compilation, evaluation, expansion or other recasting or processing of the AT&T Data, for example, as a result of Vendor's observation, analysis, or visualization of AT&T Data arising out of the performance of Vendor's obligations hereunder. + +(b) Ownership of AT&T Data and AT&T Derived Data. + +(i) AT&T Data is the property of AT&T. To the extent needed to perfect AT&T's ownership in AT&T Data, Vendor hereby assigns all right, title and interest in AT&T Data to AT&T. No transfer of title in AT&T Data to Vendor is implied or shall occur under this Agreement. AT&T Data shall not be (a) utilized by Vendor for any purpose other than as required to fulfill its obligations under this Agreement, (b) sold, assigned, leased, commercially exploited or otherwise provided to or accessed by third parties, whether by or on behalf of Vendor, (c) withheld from AT&T by Vendor, or (d) used by Vendor to assert any Lien or other right against or to it. Vendor shall promptly notify AT&T if Vendor believes that any use of AT&T Data by Vendor contemplated under this Agreement or to be undertaken as part of the performance of this Agreement is inconsistent with the preceding sentence. + +(ii) AT&T shall own all right, title and interest in and to the AT&T Derived Data. To the extent needed to perfect AT&T's ownership in AT&T Derived Data, Vendor hereby assigns all right, title and interest in AT&T Derived Data to AT&T. AT&T grants to Vendor a license to access, use, and copy the AT&T Derived Data, with no right to grant sublicenses, solely for the performance of Vendor's obligations during the Term of this Agreement and solely in compliance with AT&T's privacy policies, including obligations relating to Customer Information. For the avoidance of doubt, Vendor shall not create or develop AT&T Derived Data after the expiration or termination of this Agreement. + +(iii) Vendor shall promptly deliver AT&T Data and AT&T Derived Data to AT&T at no cost to AT&T, and in the format, on the media and in the timing prescribed by AT&T (i) at any time at AT&T's request, (ii) at the expiration or termination of this Agreement and the completion of any requested termination assistance services or (iii) with respect to particular AT&T Data or AT&T Derived Data, at such earlier date that such data is no longer required by Vendor to perform the Services. Thereafter, Vendor shall return or destroy, as directed by AT&T, all copies of the AT&T Data and AT&T Derived Data in Vendor's possession or under Vendor's control within ten (10) business days and deliver to AT&T written certification of such return or destruction signed by an officer of Vendor. + +Proprietary and Confidential This Agreement and information contained therein is not for use or disclosure outside of AT&T, its Affiliates, and third party representatives, and Vendor except under written agreement by the contracting parties. 62 + +Source: ATN INTERNATIONAL, INC., 10-Q, 11/8/2019 + + + + + +(iv) The provisions of this Section shall apply to all AT&T Data and AT&T Derived Data, regardless of whether such data was first disclosed or otherwise provided to, or created, developed, modified, recast or processed by, Vendor before, on or after the Effective Date of this Agreement, and shall survive the expiration or termination of this Agreement. Vendor shall secure AT&T Data and AT&T Derived Data pursuant to the provisions applicable to AT&T Information under the Section titled "AT&T Supplier Information Security Requirements (SISR)." Vendor's obligation to return AT&T Data and AT&T Derived Data upon AT&T's request shall not apply to such data which, at the time of AT&T's request for return, is no longer retained by or on behalf of Vendor. + +4.26 Business Continuity Plan. Vendor shall maintain and upon AT&T's request, promptly furnish to AT&T Supplier's Business Continuity Plan that complies with the requirements set forth in Appendix F - Business Continuity Plan Requirements (BCPR) available at http://attsuppliers.com/downloads/Business-Continuity- Plan-Requirements-BCPR.pdf, and incorporated herein by reference, which may be changed from time to time by AT&T. + +4.27 Change in Laws. If AT&T becomes aware of any change in Law or proposed change in Law, or there occurs a change in Law, that has or reasonably would be expected to have an adverse impact on the aggregate costs or aggregate benefits of transactions contemplated by this Agreement to AT&T (including without limitation by causing AT&T to incur taxes, costs, losses or expenses as a result of or in connection with the transactions contemplated by this Agreement that are incremental to those that would have been incurred by AT&T in the absence of such change in Law), then AT&T may, as promptly as reasonably practicable, inform the Vendor in writing of the change in Law or anticipated change in Law and the impact or expected impact to AT&T (a "Change in Law Notice"). Within fifteen (15) days after AT&T's delivery of a Change in Law Notice, Vendor and AT&T shall meet in good faith to formulate an action plan to mitigate, minimize or eliminate the impact of such change in Law on AT&T, which, upon the Parties' mutual agreement, may include restructuring the transaction contemplated by this Agreement, and/or adjustment(s) to pricing, fees and costs or Material or Services hereunder. + +4.28 FOSS + +(a) For purposes of this Section, "FOSS" means any and all freeware, open source software or shareware used or included in, or combined by or on behalf of Vendor with, the Deliverables or otherwise provided by or on behalf of Vendor under this Agreement; and a "FOSS Disclosure" means a complete, current, and accurate listing of all FOSS, which identifies for each FOSS component: (i) the component name; (ii) its version or release number; (iii) its web site URL of origin; (iv) the applicable software license and its version number; (v) the URL where Vendor identifies or sets forth the applicable software license; (vi) a brief (e.g., one- line) description of the purpose of the component; and (vii) how the component is linked within the Deliverables or as otherwise provided. A FOSS Disclosure may be provided in the form of a web site made accessible to AT&T where Vendor posts the foregoing information. + +(b) Upon AT&T's request Vendor shall promptly, but in any event within thirty (30) days of such request, furnish to AT&T a FOSS Disclosure that is complete, current and accurate when + +Proprietary and Confidential This Agreement and information contained therein is not for use or disclosure outside of AT&T, its Affiliates, and third party representatives, and Vendor except under written agreement by the contracting parties. 63 + +Source: ATN INTERNATIONAL, INC., 10-Q, 11/8/2019 + + + + + +furnished. Neither response nor non-response by AT&T concerning the receipt or non-receipt of any FOSS Disclosure or any reference to FOSS in the Agreement shall be deemed as acceptance, approval or acquiescence by AT&T that Vendor's use of the FOSS complies with the legal requirements of applicable FOSS license(s), or is suitable for the intent and purposes furnished hereunder. After receiving any FOSS Disclosure, AT&T may, upon written notice to Vendor, ask Vendor to use alternate FOSS (or other alternate software), if reasonably warranted to avert a risk that the rights of AT&T or its third-party Contractors in any proprietary software may be compromised. In that event, if Vendor cannot or will not use such alternate FOSS, then AT&T may immediately terminate the relevant purchase or funding commitments under this Agreement, without further cost, expense or liability to AT&T. + +(c) Vendor represents and warrants to AT&T: (i) that Vendor has satisfied all its obligations to any third parties with respect to all FOSS and the applicable FOSS licenses (including, for example, any obligation to make publicly available the FOSS source code for modifications to such FOSS); (ii) that the FOSS, in the form provided to AT&T, is suitable for the intent and purposes furnished hereunder; (iii) that use of the FOSS in such form for such intent and purposes in no manner creates any added obligation on the part of AT&T (including, for example, the payment of any additional monies), or diminishes, conditions or eliminates any of the rights, title, or interest that Vendor grants AT&T in or to any Deliverables or that Vendor may otherwise provide AT&T under this Agreement; and (iv) that use of the FOSS in such form for such intent and purposes, including, but not limited to, AT&T's use or combination of the FOSS, in the form provided to AT&T, with any proprietary software of AT&T or AT&T's third-party Contractors, does not subject AT&T to any obligation of disclosure or distribution to any third party or to the public of any such proprietary software, or otherwise make such proprietary software subject to the terms of any FOSS license or impair AT&T's or its third-party Contractors' rights, title, or interest in or to such proprietary software. + +(d) In the event that AT&T notifies Vendor or Vendor becomes aware of Vendor's noncompliance with any FOSS license term, then in either case, Vendor shall use all reasonable efforts promptly to cure such noncompliance so as to eliminate risks of public disclosure of proprietary software and prevent disruption of any AT&T business activity. Vendor shall promptly notify AT&T of all actions taken by Vendor to cure such noncompliance. Should AT&T receive notice from any third party alleging acts or omissions which, notwithstanding AT&T's use of the FOSS for the intent and purposes furnished hereunder, constitute noncompliance with any FOSS license term, then promptly upon AT&T's notice to Vendor of such allegation, Vendor shall indemnify, defend and hold harmless AT&T against such allegation in accordance with Vendor's obligations to do so as set forth elsewhere in this Agreement, in a manner that preserves any proprietary software of AT&T or its third-party Contractors from any public disclosure obligation or any other FOSS license noncompliance allegations. + +5.1 Execution of Agreement + +5.1 Transmission of Original Signatures and Executing Multiple Counterparts. Original signatures transmitted and received via facsimile or other electronic transmission of a + +Proprietary and Confidential This Agreement and information contained therein is not for use or disclosure outside of AT&T, its Affiliates, and third party representatives, and Vendor except under written agreement by the contracting parties. 64 + +Source: ATN INTERNATIONAL, INC., 10-Q, 11/8/2019 + + + + + +scanned document (e.g., pdf or similar format) are true and valid signatures for all purposes hereunder and shall bind the Parties to the same extent as that of original signatures. This Agreement may be executed in multiple counterparts, each of which shall be deemed to constitute an original but all of which together shall constitute only one document. + +[Signature page follows] + +Proprietary and Confidential This Agreement and information contained therein is not for use or disclosure outside of AT&T, its Affiliates, and third party representatives, and Vendor except under written agreement by the contracting parties. 65 + +Source: ATN INTERNATIONAL, INC., 10-Q, 11/8/2019 + + + + + +IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed as of the date the last Party signs. + +Commnet Wireless, LLC AT&T Mobility LLC By AT&T Services, Inc., its authorized representative + +By: /s/ Joseph Moravec By: /s/ Susan A. Johnson + +Printed Name: Joseph Moravec Printed Name: Susan A. Johnson + +Title: President Title: EVP, Global Connections & Supply Chain + +Date: July 31, 2019 Date: July 31, 2019 + +Source: ATN INTERNATIONAL, INC., 10-Q, 11/8/2019 \ No newline at end of file diff --git a/full_contract_txt/AudibleInc_20001113_10-Q_EX-10.32_2599586_EX-10.32_Co-Branding Agreement_ Marketing Agreement_ Investment Distribution Agreement.txt b/full_contract_txt/AudibleInc_20001113_10-Q_EX-10.32_2599586_EX-10.32_Co-Branding Agreement_ Marketing Agreement_ Investment Distribution Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..357f920c4ad18d7b5ab30686eba056c92810e979 --- /dev/null +++ b/full_contract_txt/AudibleInc_20001113_10-Q_EX-10.32_2599586_EX-10.32_Co-Branding Agreement_ Marketing Agreement_ Investment Distribution Agreement.txt @@ -0,0 +1,499 @@ +EXHIBIT 10.32 + + CO-BRANDING, MARKETING AND DISTRIBUTION AGREEMENT + + This Agreement, dated as of January 30, 2000 ("Effective Date"), is made and entered into by and between Amazon.com Commerce Services, Inc., a Delaware corporation ("ACSI"), and Audible Inc. a Delaware corporation ("Company"). ACSI and Company are sometimes referred to collectively herein as the "Parties" and individually as a "Party." ACSI and Company agree as follows: + +Section 1. Definitions + + Whenever used in this Agreement with initial letters capitalized, the following terms shall have the following specified meanings: + + "ACSI Competitor" means, collectively, such persons and entities as the Parties may agree upon from time to time. ACSI may update any agreed-upon list of ACSI Competitors no more frequently than once per quarter by written notice, provided that: (a) the number of entities specified on such list shall at no time [***]; (b) any entities added to such list must be [***]; and (c) no addition of any ACSI Competitor to such list shall require Company to breach any contractual or legal obligation to such ACSI Competitor by which Company is bound as of the date of such addition. + + "ACSI Derivative Work" means any Derivative Work (whether created by ACSI, Company, or the Parties jointly) of any ACSI Existing Intellectual Property or ACSI Future Intellectual Property. + + "ACSI Existing Intellectual Property" means, collectively, all of the following existing as of the Effective Date: (a) the Trademarks of ACSI and its Affiliates; and (b) the ACSI Site, including, without limitation, any and all content, data, URLs, domain names, technology, software, code, user interfaces, "look and feel", ACSI Site Functionality, Trademarks and other items posted thereon or used in connection or associated with any of the foregoing. + + "ACSI Future Intellectual Property" means, collectively, all of the following which are invented, created, developed or first reduced to practice by ACSI or its Affiliates after the Effective Date without the participation of Company or its Affiliates: (a) any Trademarks; and (b) any content, data, URLs, domain names, technology, software, code, user interfaces, "look and feel," ACSI Site Functionality and other items (but excluding any Company Derivative Works). + + "ACSI Intellectual Property" means, collectively, any ACSI Existing Intellectual Property, ACSI Future Intellectual Property and ACSI Derivative Works, but excluding any Joint Works. + +--------------- ***Confidential Information has been omitted and has been filed separately with the Securities and Exchange Commission. + + -1- + + "ACSI Product Section" means a discrete group of products available on the ACSI Site which is identified by a tab or other top-level product category identifier on the ACSI Site Home Page, but excluding: (a) the ACSI Site Home Page itself; and (b) any mechanisms, areas or services on or through which third parties may sell products through the ACSI Site in connection with ACSI's and its Affiliates' programmatic selling initiatives (including, without limitation, the existing "Auctions", "zShops", "Sothebys.amazon.com" and "Amazon.com Advantage" areas and services of the ACSI Site, and any successors or replacements to any of them). + + "ACSI Product Sub-Section" means a discrete sub-set of products in any ACSI Product Section which is accessible by following or using a browse tree or hypertext links on the ACSI Site, and is identified by a permanent product category description on the ACSI Site (e.g., as opposed to a description generated in response to a user search query), but is not identified by a tab or other top-level product category identifier on the ACSI Site Home Page (e.g., as of the Effective Date, the "business & investing" or "audio books" sub-set of products included in, and accessible through the browse tree of, the ACSI Product Section identified by the "Books" tab on the ACSI Home Page (the "Books Product Section")). + + "ACSI Site" means that Web Site, the primary Home Page of which is identified by the URL www.amazon.com (and any successor or replacement Web -------------- Site). For the avoidance of doubt, the "ACSI Site" does not include any other Web Sites maintained by or for ACSI or its Affiliates (including, without limitation, those Web Sites, the primary Home Pages of which are identified by the URL's www.amazon.co.uk and www.amazon.de). ---------------- ------------- + + "ACSI Site Functionality" means, collectively: (a) tab, search and browse functionality available to users of the ACSI Site for navigating through ACSI Product Sections (including, without limitation, the layout and design thereof); (b) payment and transaction functionality available to users of the ACSI Site for purchasing products (including, without limitation, "shopping cart" and "Payment with 1-Click" functionality), (c) any other functionality available on the ACSI Site which ACSI may make available to Company from time to time, and (d) any future equivalents, improvements and enhancements of any of the foregoing. + + "Affiliate" means, with respect to any person or entity (including either Party), any other person or entity that directly or indirectly controls, is controlled by or is under common control with that person or entity, or which that person or entity beneficially owns at least fifty percent (50%) of the equity interests therein (provided, however, that with respect to the Parties, no individual or entity as to which the ultimate parent entity of a Party does not directly or indirectly control the operations or management thereof (e.g., in the case of ACSI as of the date of this Agreement, Gear.com, Inc.) shall be deemed to be an Affiliate of such Party for purposes of this Agreement). + + "Annual Fee" means the sum of [***], representing the fixed fee payable by Company to ACSI with respect to each Year. + +--------------- + +Source: AUDIBLE INC, 10-Q, 11/13/2000 + + + + + +***Confidential Information has been omitted and has been filed separately with the Securities and Exchange Commission. + + -2- + + "Change of Control" means, with respect to Company, a transaction or series of related transactions that results in (a) a sale of all or substantially all of the assets of Company, (b) the transfer of fifty percent (50%) or more of the outstanding voting power of Company (other than directly or indirectly to a parent or wholly-owned subsidiary of Company), or (c) the acquisition by a person or entity, by reason of any contractual arrangement or understanding with one or more persons or entities, of the right or power to appoint or cause to be appointed a majority of the directors or officers of Company. + + "Claim" means any claim, action or proceeding instituted by a third party (other than an Affiliate of a Party), including, without limitation, any governmental authority. + + "Closing" means the consummation of the purchase of common stock of Company pursuant to the Securities Purchase Agreement between ACSI and Company dated on or about the Effective Date (the "Securities Purchase Agreement"). + + "Company Derivative Work" means any Derivative Work (whether created by ACSI, Company, or the Parties jointly) of any Company Existing Intellectual Property or Company Future Intellectual Property. + + "Company Existing Intellectual Property" means, collectively, all of the following existing as of the Effective Date: (a) the Trademarks of Company and its Affiliates; (b) the Company Site, including, without limitation, any and all content, data, URLs, domain names, technology, software, code, user interfaces, "look and feel," Trademarks and other items posted thereon or used in connection or associated with any of the foregoing + + "Company Future Intellectual Property" means, collectively, all of the following which are invented, created, developed or first reduced to practice by Company or its Affiliates after the Effective Date without the participation of ACSI or its Affiliates: (a) any Trademarks; and (b) any content, data, URLs, domain names, technology, software, code, user interfaces, "look and feel" or other items (but excluding any ACSI Derivative Works). + + "Company Intellectual Property" means, collectively, any Company Existing Intellectual Property, Company Future Intellectual Property, and Company Derivative Works, but excluding any Joint Works. + + "Company Site" means, collectively: (a) that Web Site, the primary Home Page for which is identified by the URL www.audible.com (and any successor or replacement Web Site); and (b) any other Web Sites operated by or for Company or its Affiliates from time to time (excluding the Mirror Company Site) through which Spoken-Word Audio Products are sold or offered for sale. + + "Confidential Information" means, with respect to either Party, all information relating to such Party or its Affiliates that is designated as confidential or that, given the nature of the information or the circumstances surrounding its disclosure, reasonably should + + -3- + +be considered as confidential. Confidential Information includes, without limitation, (a) all information relating to a Party's or its Affiliates' technology, customers, business plans, promotional and marketing activities, finances and other business affairs; (b) all third party information that a Party or its Affiliates is obligated to keep confidential; and (c) the terms of this Agreement. Confidential Information may be contained in tangible materials, such as drawings, data, specifications, reports and computer programs, or may be in the nature of unwritten knowledge. Confidential Information does not include any information that (i) has become publicly available without breach of this Agreement, (ii) can be shown by documentation to have been known to the Receiving Party at the time of its receipt from the Disclosing Party or its Affiliates without a breach of confidentiality or other improper means, (iii) is received from a third party who did not acquire or disclose such information by a wrongful or tortious act or (iv) can be shown by documentation to have been independently developed by the Receiving Party without reference to any Confidential Information. + + "Derivative Work" means any adaptation, modification, enhancement, improvement or derivative work. + + "Disclosing Party" means a Party that discloses Confidential Information to the other Party in connection with this Agreement. + + "Exclusive Spoken-Word Audio Products" means: (a) spoken-word audio-only products, in a format suitable for digital download and/or streaming, [***] + + "Existing ACSI Product Section" means any ACSI Product Section identified on the ACSI Site Home Page as of the Effective Date, as shown in the screen shot attached as Exhibit A. + + "Home Page" means, with respect to a Web Site or section of a Web Site (e.g., any section of the ACSI Site primarily related to an ACSI Product Section or ACSI Product Sub-Section), the Web page designated by the operator of the Web Site as the initial and primary end user interface for such Web Site or section of a Web Site. + + "Internet Radio Service" means a service through which users may receive interactive or other broadcasts via the Internet or other public or private data networks. + + "Joint Work" means any content, data, URLs, domain names, technology, software, code, user interfaces, "look and feel" or other items which are invented, created, developed or first reduced to practice jointly by the Parties after the Effective Date, are protected or protectable by any Intellectual Property Rights and either: (a) include or incorporate both ACSI Existing Intellectual Property, ACSI Future Intellectual Property and/or ACSI Derivative Works, on the one hand, and/or Company Existing Intellectual Property, Company Future Intellectual Property and/or Company Derivative Works, on the other hand; or (b) include or incorporate no ACSI Existing Intellectual Property or ACSI + +Source: AUDIBLE INC, 10-Q, 11/13/2000 + + + + + +Derivative Works, on the one hand, or Company Existing Intellectual Property or Company Derivative Works, on the other hand; provided, however, that notwithstanding any other provision of this Agreement, to the extent that any such items incorporate in whole or in part any ACSI + +--------------- ***Confidential Information has been omitted and has been filed separately with the Securities and Exchange Commission. + + -4- + +Site Functionality or technology, software, code, user interfaces or "look and feel" related thereto or incorporated therein, such items shall be deemed ACSI Derivative Works in their entirety and not Joint Works or Company Intellectual Property. + + "Incentive Offer" means either (a) a discount in the purchase price of Spoken-Word Audio Products offered for sale from or through the Spoken-Word Audio Sub-Section or (b) an equivalent benefit upon purchase of a Spoken-Word Audio Product from or through the Spoken-Word Audio Sub-Section. + + "Intellectual Property Right" means any patent, copyright, trademark, trade dress, trade name or trade secret right and any other intellectual property or proprietary right. + + "Launch Date" means the date on which the Parties mutually agree to launch the Spoken-Word Audio Sub-Section, but in any event no later than 90 days after the Effective Date. + + "Law" means any law, ordinance, rule, regulation, order, license, permit and other requirement, now or hereafter in effect, of any governmental authority of competent jurisdiction. + + "Mirror Company Site" means a "mirrored" version of that Web Site, the primary Home Page for which is identified by the URL www.audible.com (and any successor or replacement Web Site). The primary home page of the Mirror Company Site shall be identified by the URL www.amazon.audible.com (or such other URL as ---------------------- the Parties may agree upon). + + "Proration Percentage" means, as of any date within the Refund Period, the following quantity, expressed as a percentage: (a) one (1); minus (b) the sum of: (i) the number of days of the Refund Period which have elapsed prior to such date; divided by (ii) the total number of days in the Refund Period. + + "Non-Exclusive Spoken-Word Audio Products" means spoken-word audio-only products, in a format suitable for digital download and/or streaming (excluding Exclusive Spoken-Word Audio Products and Related Products), [***] + + "Receiving Party" means a Party that receives Confidential Information from the other Party in connection with this Agreement. + + "Referral Information" means any information disclosing that a specific end-user traveled from the ACSI Site to the Mirror Company Site or purchased any products through the Spoken-Word Audio Sub-Section (however obtained), or other personally-identifying information regarding users of the ACSI Site (including the Spoken-Word Audio Sub-Section). + +--------------- ***Confidential Information has been omitted and has been filed separately with the Securities and Exchange Commission. + + -5- + + "Refund Period" means the period of time from the date upon which Company makes the payment called for by Section 5.2.1 [Annual Fees] (or is deemed to have made such payment pursuant to Section 5.3 [Waiver of Payment Obligations]) until the end of Year 2. + + "Related Products" means: [***] + + "Site" means either the ACSI Site, on the one hand, or the Mirror Company Site and Company Site collectively, on the other hand, as required by the context. + + "Spoken-Word Audio Products" means, collectively, Exclusive Spoken-Word Audio Products, Related Products and Non-Exclusive Spoken-Word Audio Products. + + "Spoken-Word Audio Sub-Section" means an ACSI Product Sub-Section, to be created pursuant to this Agreement, featuring Spoken-Word Audio Products (but subject to Section 9.2 with respect to Related Products) and which shall be identified on the ACSI Site by such heading as the Parties may agree upon. + + "Term" means the term of this Agreement as defined in Section 10. + + "Trademark" means any trademark, service mark, trade name, trade dress, proprietary logo or insignia or other source or business identifier. + + "Web Site" means any point of presence maintained on the Internet or on any other public or private data network. With respect to any Web Site maintained on the World Wide Web or any successor public data network, such Web Site includes all HTML pages (or similar unit of information presented in any relevant data protocol) that either (a) are identified by the same second-level domain (such as http://www.amazon.com) or by the same equivalent level identifier in any relevant address scheme, or (b) contain branding, graphics, navigation or other characteristics such that a user reasonably would conclude that the pages are part of an integrated information or service offering. + + "Year" means any period of twelve (12) consecutive months commencing on the Effective Date. + +Section 2. Spoken-Word Audio Sub-Section and Mirror Company Site + + 2.1 Spoken-Word Audio Sub-Section. Pursuant to the implementation procedures set forth in Section 4, ACSI will establish and, upon and following the Launch Date, maintain (or cause one of its Affiliates to maintain) on the ACSI Site during the Term + +Source: AUDIBLE INC, 10-Q, 11/13/2000 + + + + + +-------- *** Confidential Information has been omitted and has been filed separately with the Securities and Exchange Commission. + + -6- + +the Spoken-Word Audio Sub-Section. In order to provide a harmonious and consistent user experience, the presentation, format, functionality and operation of the Spoken-Word Audio Sub-Section shall be generally consistent with that of other similar ACSI Product Sub-Sections (including, without limitation, by incorporating category headings and other navigational aids for specific types of Spoken-Word Audio Products offered by Company), except that ACSI will include prominent branding for Company where appropriate on pages of the Spoken-Word Audio Sub-Section. Subject to the foregoing and to Section 6, ACSI will determine the content, appearance, functionality and all aspects of the ACSI Site (including the Spoken-Word Audio Sub-Section) [***] + + 2.2 Certain Company Obligations. As of and following the Launch Date, Company will (a) maintain the Mirror Company Site, [***], (b) ensure that every page of the Mirror Company Site displays prominent, above-the-fold, graphical hypertext links (to be designed by ACSI and subject to Company's prior approval, which shall not be unreasonably withheld or delayed) which, when clicked, return the user to the ACSI Site, together with such other branding and Trademarks of ACSI as ACSI and Company may agree upon to be appropriate (provided, that if the Parties cannot agree upon such branding and Trademarks, notwithstanding any other provision of this Agreement, ACSI shall have no obligation to establish or maintain the Spoken-Word Audio Sub-Section until such time as the Parties have agreed upon the same; and provided further, that any disagreement shall be subject to the escalation procedure specified in Section 2.8 [Escalation of Certain Disputes] below), (c) ensure that the Mirror Company Site does not contain links to any Web Site other than the ACSI Site (including, without limitation, to the Company Site), (d) ensure that substantially all Spoken-Word Audio Products (and any other products approved by ACSI) available through the Company Site are available through the Spoken-Word Audio Sub-Section (but subject to Section 9.2 with respect to Related Products), (e) [***], and (f) [***]. Subject to the foregoing, Company shall have the right to limit the number of promotional incentives (e.g. free give-aways, low-cost promotional offers and the like) that are offered through the Spoken-Word Audio Sub-Section based upon the volume of traffic if such volume were to place Company in commercially untenable position as solely determined by Company. Unless otherwise agreed by the Parties in writing, Company will be solely responsible for all pricing, delivery and fulfillment of any products, including Spoken-Word Audio Products offered by Company on or through the Spoken-Word Audio Sub-Section (including the Mirror Company Site). + + 2.3 [***]. + + 2.4 Technical Standards; Customer Service. Company will at all times comply with the technical and customer service requirements and Site standards (including, without limitation, user privacy policies and customer guarantees) to be agreed upon by the Parties within forty-five (45) days after the Effective Date and attached hereto as Exhibit B. Any dispute arising related to the creation of such requirements and standards shall be subject to the escalation procedure specified in Section 2.8 [Escalation of Certain Disputes] below. Without limiting the generality of the foregoing Company will: (a) at all times conduct its dealings with users of the Spoken-Word Audio Sub-Section in a professional and courteous manner which reflects favorably upon ACSI and its Affiliates and the ACSI Site; and (b) in any event ensure that the customer + +--------------- ***Confidential Information has been omitted and has been filed separately with the Securities and Exchange Commission. + + -7- + +service provided to users of the Spoken-Word Audio Sub-Section (including, without limitation, in regard to product fulfillment and responsiveness to customer inquiries) is of as high a standard as is commercially reasonably possible and as good or better than that generally provided by any other online seller of Spoken-Word Audio Products in a format suitable for digital download. + + 2.5 Referral Information. Company will not disclose any Referral Information to any third party (except for third parties acting directly on behalf of Company in connection with Company's internal business and who have agreed in writing to maintain the same in confidence), or use or permit any third party to use any Referral Information to target communications specifically to users of the ACSI Site, primarily on the basis of such persons' being users of the ACSI Site, without ACSI's prior written consent (provided, however, that nothing in the foregoing shall prohibit Company from contacting its own customers generally (including contacting users of the ACSI Site as part of any such general contacts) or prohibit Company from using non-personal statistical information regarding such users in the aggregate for any purpose without ACSI's consent). [***] + + 2.6 ACSI Site Re-Design. Notwithstanding any other provision of this Agreement, nothing in this Agreement shall limit ACSI's and its Affiliates' ability to re-design or modify the appearance, content and functionality of the ACSI Site (including any ACSI Product Section, ACSI Product Sub-Section, or any Home Pages); provided, however, that in the event that ACSI and/or its Affiliates redesign or revise the ACSI Site or any ACSI Product Section, the treatment of the Spoken-Word Audio Sub-Section in connection with such re-design or revision will be substantially similar to and consistent with the treatment of other ACSI Product Sub-Sections on the ACSI Site. + + 2.7 Traffic Data. Throughout the Term, on a monthly basis, Company will provide ACSI all relevant data requested from time to time by ACSI concerning behavior on the Mirror Company Site, to the extent such behavior reasonably relates to the online promotion or sale of products sold through the ACSI Site and/or Mirror Company Site and such data is reasonably available. ACSI and its Affiliates will hold such data in confidence and will not use it except in connection with their marketing efforts or as otherwise may be agreed by Company in writing. Notwithstanding anything contained in this Section 2.7 [Traffic Data], Company will not be required to deliver to ACSI any user data in contravention of any applicable Law or Company's privacy policy (provided, that if Company modifies its privacy policy, Company shall revise the same in a manner which provides it the maximum legally permissible flexibility to provide the data + +Source: AUDIBLE INC, 10-Q, 11/13/2000 + + + + + +specified in this Section 2.7 [Traffic Data] to ACSI). + + 2.8 Escalation of Certain Disputes. If any dispute arises relating to the matters described in Section 2.2(b) [Certain Company Obligations], Section 2.4 [Technical Standards; Customer Service] or Section 4.1.3 of this Agreement, and the Parties are unable to resolve the dispute in the ordinary course of business, the Parties will use good-faith efforts to resolve the matter in accordance with this Section 2.8 [Escalation of Certain Disputes]. Within three (3) days + +--------------- ***Confidential Information has been omitted and has been filed separately with the Securities and Exchange Commission. + + -8- + +following the written request of either Party (which will describe the nature of the dispute and other relevant information), the Parties' managers who are responsible for the ACSI/Company relationship will meet to resolve the dispute at a mutually convenient time and place. If the relationship managers are unable to resolve the dispute within two (2) days following their initial meeting, they will refer the matter to the Parties' divisional executives who are responsible for the administration of this Agreement, along with a written statement (or statements) describing the nature of the dispute and other relevant information. Within three (3) days following the referral of the matter to the Parties' divisional executives, the divisional executives will meet to resolve the dispute at a mutually convenient time and place. Additional representatives of the Parties (but not their relationship managers) may be present at the meeting. If the divisional executives are unable to resolve the dispute within two (2) days following their initial meeting, they will refer the matter to the Parties' Presidents, along with a written statement (or statements) describing the nature of the dispute and other relevant information. Within three (3) days following the referral of the matter to the Parties' Presidents (or equivalent officers), the Presidents will meet to resolve the dispute at a mutually convenient time and place. Additional representatives of the Parties (but not their relationship managers or divisional executives) may be present at the meeting. If the Presidents are unable to resolve the dispute within two (2) days following their initial meeting (or such later date as they may agree), the Parties will be free to exercise such rights and remedies as may be available to them at law or in equity. Any resolution of any dispute reached under this Section 2.8 [Escalation of Certain Disputes] will be reduced to writing and signed by the Parties. During any dispute resolution procedure conducted under this Section, the Parties will diligently perform all obligations hereunder that are not directly related to the dispute. + +Section 3. Promotional Activities + + 3.1 Press Releases. The Parties will issue a joint press release promptly upon concluding Advertising. this Agreement, which press release shall be subject to the Party's mutual approval, which shall in any event state that Company is the exclusive provider on the ACSI Site of premium spoken-word audio product for download or streaming over the world wide web. The Parties shall have the right to issue mutually agreeable additional press releases describing the nature of their relationship at such times as the Parties shall mutually agree. Neither Party will issue any other press releases, make any other disclosures regarding this Agreement or its terms or the relationship between the Parties, or use the other Party's Trademarks (except as permitted by Section 6), without the other Party's prior written consent, except that, each Party may, without the other Party's prior consent: (y) distribute or issue public relations materials or press releases that contain a description of the relationship between the Parties, provided that such description has been approved in advance by such other Party (which approval shall not be unreasonably withheld or delayed); and (z) speak in public regarding disclosures made pursuant to the first sentence of this Section 3.1 [Press Releases]. Parties will be able to include a description of this strategic partnership in the "company descriptor" section of standard releases, subject to initial mutual approvals. + + -9- + +3.2 Advertising + + 3.2.1 Amazon.com Customer Base. During each Year of the Term following the Launch Date, ACSI (or one of its Affiliates) will deliver Amazon.com-branded e-mails and Amazon.com-branded in-product advertising materials related to the Spoken-Word Audio Sub-Section to selected members of the Amazon.com customer base in at least the following quantities: + +--------------------------------------------------------------------------------------------- Year Email Product Shipment ----------------------------- -------------------------- ------------------------------ --------------------------------------------------------------------------------------------- 1 [***] [***] --------------------------------------------------------------------------------------------- 2 [***] [***] --------------------------------------------------------------------------------------------- 3 [***] [***] --------------------------------------------------------------------------------------------- + + The Parties shall mutually agree on the nature of such advertising; [***]. With respect to all email advertising, ASCI and Company shall pre-test and plan such advertising in a manner generally consistent with the pre-testing and planning conducted by ACSI and its Affiliates with respect to advertising for other ACSI Product Sub-Sections, with the goal of achieving maximum commercial effectiveness for such advertisements (including, without limitation, by attempting to spread out such advertising in order to not unnecessarily "bunch" the same). [***] + + 3.2.2 Customer Subscription Emails. [***] + + 3.2.3 Company. [***] + + 3.3 Certain Covenants. [***] + +Source: AUDIBLE INC, 10-Q, 11/13/2000 + + + + + +Section 4. Implementation + + 4.1 Spoken-Word Audio Sub-Section and Mirror Company Site. + + 4.1.1 Generally. During the Term, the Parties will cooperate in good faith and use commercially reasonable efforts to provide a seamless customer experience of full interactivity between the Spoken-Word Audio Sub- Section and the Mirror Company Site. The Parties anticipate that the activities contemplated by this Section 4.1.1 [Generally] will be performed in two phases, as set forth in Section 4.1.2 [Implementation] and Section 4.1.3 [Phase II] below. + + 4.1.2 Phase I. Between the Effective Date and the Launch Date, the Parties shall perform such work as may be necessary to develop the Spoken-Word Audio Sub-Section (in the case of ACSI) and the Mirror Company Site (in the case of Company). Upon the Launch Date, ACSI will establish the Spoken-Word Audio Sub-Section under the browse tree (or equivalent navigation structure) of the Books Product Section, and Company will establish the Mirror Site. The Spoken- Word Audio Sub-Section will contain, among such + +--------------- ***Confidential Information has been omitted and has been filed separately with the Securities and Exchange Commission. + + -10- + +other content as may be contained therein pursuant to Section 2.1 [Spoken-Word Audio Sub-Section], multiple hypertext links that will allow users to navigate directly to the Mirror Company Site. + + 4.1.3 Phase II. [***], the Parties shall have fully integrated the ACSI Site Functionality into the Mirror Company Site pursuant to specifications and schedules (the "Phase II Development Plan") that shall be developed by ACSI in consultation with Company, which specification and schedules shall be attached hereto as Exhibit C, [***]. Any dispute arising related to the creation of the Phase II Development Plan shall be subject to the escalation procedure specified in Section 2.8 [Escalation of Certain Disputes].Without limiting the generality of the foregoing, ACSI and Company will cooperate to implement ACSI Site Functionality for the Spoken-Word Audio Sub-Section (including the Mirror Company Site) in a manner consistent with the ACSI Site Functionality provided in other ACSI Product Sub-Sections, and Company and ACSI will use commercially reasonable efforts to perform, in a timely and professional manner, all technical work necessary to seamlessly integrate the ACSI Site Functionality into the Mirror Company Site, in accordance with the Phase II Development Plan. + + 4.1.4 Tax Matters. [***] + + 4.2 ACSI Site Links. Upon the Launch Date, ACSI will post permanent and/or rotating links to the Home Page of the Spoken-Word Audio Sub-Section on relevant pages of the ACSI Site in a manner substantially similar to and generally consistent with the posting of links to other similar ACSI Product Sub-Sections (e.g., as of the Effective Date, the ACSI Product Sub-Section identified as "Audiobooks"). [***] + + The Parties shall consult together in connection with the specific nature, prominence and positioning of the links posted on the ACSI Site pursuant to this Section 4.2 [ACSI Site Links]; [***]. + + 4.3 Account Managers. Each Party will assign an account manager (which manager shall be subject to change from time to time by the assigning Party) to oversee the performance of such Party's obligations under this Agreement and to facilitate coordination of the Parties' performance of their respective obligations (including, without limitation, the establishment of the Spoken-Word Audio Sub-Section, the creation of the Co-Branded Pages, the integration of the ACSI Site Functionality with the Mirror Company Site, and the advertising activities contemplated in Section 3). The account managers will meet from time to time during the Term to review the implementation of this Agreement and to explore methods for improving performance. + + 4.4 Regulatory Compliance + + 4.4.1 Company will comply, and will ensure that the Mirror Company Site, the Spoken-Word Audio Products and all other activities undertaken through or in connection with the Mirror Company Site and this Agreement (including, without limitation, the participation of ACSI and its Affiliates as contemplated by this Agreement) comply with all applicable Laws. + +--------------- ***Confidential Information has been omitted and has been filed separately with the Securities and Exchange Commission. -11- + + 4.4.2 Company will provide reasonable assistance to ACSI and ACSI's Affiliates in all regulatory compliance activities required in connection with the advertising, operation, maintenance and sale of Spoken-Word Audio Products on and through the Spoken-Word Audio Sub-Section, including, but not necessarily limited to, assisting ACSI in identifying, obtaining and maintaining in force any and all licenses and permits necessary for ACSI and its Affiliates in connection with any of the foregoing. In connection with the foregoing regulatory compliance activities, Company will reimburse ACSI for any reasonable costs (including legal costs) incurred by ACSI or its Affiliates in connection with identifying and obtaining any and all such licenses and permits. Notwithstanding the foregoing, ACSI acknowledges and agrees that Company shall have no obligation to assist ACSI in any regulatory compliance activities related to, or reimburse ACSI for any costs incurred by ACSI or its Affiliates in connection with identifying or obtaining any licenses or permits required in connection with, any advertising, operation, maintenance or sale of Spoken-Word Audio Products or other products sold by ACSI or its Affiliates independently through the ACSI Site without the participation of Company. + + 4.5 Staffing. Each Party will dedicate during the Term the appropriate resources and personnel necessary for establishment of the Spoken-Word Audio Sub-Section, the integration of the ACSI Site Functionality into the Mirror Company Site and the performance of its other obligations under this Agreement. Each Party's designated employees will be subject to change from time to time by such Party in its sole discretion and promptly upon such change such Party shall + +Source: AUDIBLE INC, 10-Q, 11/13/2000 + + + + + +notify the other Party. + +Section 5. Compensation + + 5.1 In consideration of the intangible rights granted and services to be performed by ACSI during the Term, Company will pay ACSI the consideration specified in this Section. + + 5.2 Annual Fees. + + 5.2.1 Upon the Closing, subject to Section 5.3 [Waiver of Payment Obligations], Company will pay ACSI via wire transfer the sum of [***] (the "Company Closing Payment"), representing payment of the Annual Fee for the first Year of the Term and a pre- payment of the Annual Fee for the second Year of the Term. + + 5.2.2 On the first day of Year 3, Company will pay ACSI via wire transfer the sum of [***], representing the Annual Fee payable with respect to Year 3; provided, however, that if ACSI so elects by written notice delivered to Company at least ten (10) days prior to the end of Year 2, Company shall instead issue at the beginning of Year 3 to ACSI (or such of its Affiliates as it may designate) shares of common stock of Company (or any publicly-traded Affiliate thereof) with a then-current fair market value equal to [***] as of the date of such written notice (the "Year 3 Shares"). + + 5.3 Waiver of Payment Obligations. At the Closing, the Company Closing Payments due to ACSI pursuant to Section 5.2.1 [Annual Fees] hereof and the Shares Consideration (as defined in the Securities Purchase Agreement) due to the Company pursuant to Section 1.2 of + +--------------- ***Confidential Information has been omitted and has been filed separately with the Securities and Exchange Commission. -12- + +the Securities Purchase Agreement, which amounts are identical, shall offset each other solely for the purpose of determining the actual fund transfers required at Closing. ASCI acknowledges and agrees that the entire amount of the Company Closing Payments shall be deemed paid and received upon the issuance of the Common Stock (as defined in the Securities Purchase Agreement). + + 5.4 Royalties. In consideration for the intangible rights granted hereunder, for each Year in which the Spoken-Word Audio Sub-Section (including the Mirror Company Site) generates revenue of at [***] (the "Revenue Threshold"), Company will pay ACSI a royalty equal to [***] of all revenues generated from the Spoken-Word Audio Sub-Section (including, for the avoidance of doubt, any revenue received by Company from any Company customer who first links to the Mirror Company Site from the Spoken-Word Audio Sub-Section and who later accesses the Company Site directly) in excess of Revenue Threshold (the "Royalties") for each Year of the Term. Company will pay ACSI any Royalties payable pursuant to this Section 5.4 [Royalties] on an annual basis, in arrears, as follows: within thirty (30) days after the end of each Year as to which any Royalties are payable, Company will remit to ACSI the Royalties payable with respect to such Year, together with a report specifying in reasonable detail: (a) the gross revenue generated by the Spoken-Word Audio Sub-Section; and (b) Company's calculation of the Royalties. + + 5.5 Overdue Payments. Payments called for by this Section 5 which are not received within five (5) business days after the date upon which payment is due will bear interest at a rate equal to the lesser of one and one-half percent (1- 1/2%) per month or the maximum legal rate permitted under the controlling Laws. Payment of such interest shall not cure or excuse any breach of any underlying payment obligation. + + 5.6 Allocation of Payments. The Parties acknowledge and agree that the Annual Fees shall be allocated as consideration for advertising services and intangible rights granted by ACSI to Company hereunder, including the rights granted under Section 2.1 [Spoken-Word Audio Sub-Section] and Section 4.2 [ACSI Site Links] and the licenses granted to Company under Section 6, as follows: + + Year Advertising Services Intangible Rights ---------------------------------------------------------------------------------------------- 1 [***] [***] ---------------------------------------------------------------------------------------------- 2 [***] [***] ---------------------------------------------------------------------------------------------- 3 [***] [***] ---------------------------------------------------------------------------------------------- + +--------------- ***Confidential Information has been omitted and has been filed separately with the Securities and Exchange Commission. + + -13- + +Section 6. Proprietary Rights + + 6.1 Ownership. + + 6.1.1 As between the Parties, ACSI reserves all right, title and interest in and to the ACSI Intellectual Property, along with all Intellectual Property Rights associated therewith and no title to or ownership of any of the foregoing is transferred or, except as expressly set forth in Section 6.2 [ACSI License], licensed to Company or any other person or entity pursuant to this Agreement. + + 6.1.2 As between the Parties, Company reserves all right, title and interest in and to the Company Intellectual Property, along with all Intellectual Property Rights associated therewith and no title to or ownership of any of the foregoing is transferred or, except as expressly set forth in Section 6.3 [Company License], licensed to ACSI or any other person or entity pursuant to this Agreement. + +Source: AUDIBLE INC, 10-Q, 11/13/2000 + + + + + + 6.1.3 To the maximum extent permitted by applicable Laws, any ACSI Derivative Works or Company Derivative Works, to the extent created by or for the other Party, shall be deemed "works made for hire", and all right, title and interest therein shall vest in ACSI (in the case of ACSI Derivative Works) or Company (in the case of Company Derivative Works) immediately upon creation thereof. To the extent that any such ACSI Derivative Works or Company Derivative Works are not "works made for hire", Company hereby assigns and agrees to assign to ACSI (or such of its Affiliates as it may designate) all right, title and interest to all ACSI Derivative Works and all associated Intellectual Property Rights, and ACSI hereby assigns and agrees to assign to Company (or such of its Affiliates as it may designate) all right, title and interest in and to all Company Derivative Works and all associated Intellectual Property Rights. Each Party shall take, at the other Party's expense, any actions (including, without limitation, execution and delivery of affidavits and other documents) reasonably requested by such other Party to effect, perfect or confirm its or its designee's ownership rights as set forth in this Section 6.1.3 [Ownership]. + + 6.1.4 To the extent that any Joint Works are created in the course of performance of this Agreement, each Party shall own a joint, equal and undivided ownership interest in and to such Joint Works and the associated Intellectual Property Rights, with no duty on the part of either Party to account to the other with respect to its use and exploitation of the same. Each Party shall own all right, title and interest in and to any Derivative Works of any Joint Works created by or for such Party and all Intellectual Property Rights associated therewith (to the extent not also associated with the Joint Works). Without limiting the generality of the foregoing, either Party may, without any duty to account to the other (including, without limitation, any duty to pay, share or account for any royalties): + + (a) make, manufacture, assemble, produce, market, sell, distribute, transfer, use, license and otherwise commercially and non-commercially exploit and deal with the Joint Works; provided, that neither Party shall seek or obtain any + + -14- + + registration of any Intellectual Property Rights associated with the Joint Works without the other Party's prior written consent; + + (b) make, manufacture, assemble, produce, market, sell, distribute, transfer, use, license, seek and obtain registrations of Intellectual Property Rights (subject to paragraph (a) above) and otherwise commercially and non-commercially exploit and deal with Derivative Works of any Joint Works created by or for such Party, whether or not competitive with any items created by or for the other Party; and + + (c) authorize any third party to take any action described in (a) or (b) above. + + 6.2 ACSI License. ACSI hereby grants to Company, during the Term, a non- exclusive, non-transferable (except in accordance with Section 11.7 [Assignment]) license, which Company may sublicense only to its Affiliates, to use the ACSI Intellectual Property supplied by ACSI to Company as is reasonably necessary to perform its obligations under this Agreement; provided, however, that Company shall not use ACSI's Trademarks, including in any advertising, without ACSI's prior written consent, unless such use conforms to a written Trademark use policy previously furnished by ACSI to Company and not subsequently modified or revoked. All goodwill arising out of any use of any of ACSI's or its Affiliates' Trademarks by, through or under Company will inure solely to the benefit of ACSI and its Affiliates. + + 6.3 Company License. Company hereby grants to ACSI, during the Term, a non-exclusive, non-transferable (except in accordance with Section 11.7 [Assignment]) license, which ACSI may sublicense only to its Affiliates, to use the Company Intellectual Property supplied by Company to ACSI as is reasonably necessary to perform its obligations under this Agreement; provided, however, that ACSI shall not use Company's Trademarks, including in any advertising, without Company's prior written consent, unless such use conforms to a written Trademark use policy previously furnished by Company to ACSI and not subsequently modified or revoked. All goodwill arising out of any use of any of Company's Trademarks by, through or under ACSI will inure solely to the benefit of Company. + + 6.4 Non-Disparagement. Neither Company nor ACSI will use the other Party's Trademarks in a manner that disparages the other Party or its products or services, and/or portrays the other Party or its products or services in a false, competitively adverse or poor light. Each of Company and ACSI will comply with the other Party's requests as to the use of the other Party's Trademarks and will avoid knowingly taking any action that diminishes the value of such Trademarks. + +Section 7. Representations; Indemnity + + 7.1 Representations. Each Party represents and warrants to the other that: (a) it has the full corporate right, power and authority to enter into this Agreement and perform its obligations hereunder; (b) its performance of this Agreement, and the other Party's exercise of such other Party's rights under this Agreement, will not conflict with or result in a breach + + -15- + +or violation of any of the terms or provisions or constitute a default under any agreement by which it is bound; (c) when executed and delivered, this Agreement will constitute its legal, valid and binding obligation enforceable against it in accordance with its terms; and (d) it will comply with all applicable Laws in its performance of this Agreement. + + 7.2 Indemnity. Each Party (as applicable, the "Indemnifying Party") will defend, indemnify and hold harmless the other Party (the "Indemnified Party") and its Affiliates (and their respective employees, directors and representatives) from and against any and all claims, costs, losses, damages, judgments and expenses (including reasonable attorneys' fees) arising out of any Claim, to the extent it is based on (a) the operation or content of the Indemnifying Party's Site (other than any items or materials supplied, or operation or content required, by the Indemnified Party), (b) the offer, marketing or sale of any products or services through the Indemnifying Party's Site (other than any products offered, marketed or sold by the Indemnified Party + +Source: AUDIBLE INC, 10-Q, 11/13/2000 + + + + + +through such Site, the Parties acknowledging that Company shall be deemed the Indemnifying Party as to any Claim related to any products offered, marketed or sold by Company through the Spoken-Word Audio Sub-Section and/or Mirror Company Site, except to the extent that such Claim relates to any ACSI Site Functionality or other items or content provided by or for ACSI with respect to the Spoken-Word Audio Sub-Section and/or Mirror Company Site), (c) any actual or alleged breach of the Indemnifying Party's representations or warranties set forth in Section 7.1 [Representations] above, or, in the case of Company, its obligations under Section 4.4 [Regulatory Compliance] above, or (d) any actual or alleged infringement of any Intellectual Property Rights by any content, items or materials provided by the Indemnifying Party to the Indemnified Party for its use under this Agreement. Subject to Section 7.3 [Procedure], the Indemnifying Party will pay any award against the Indemnified Party and its Affiliates (and their respective employees, directors or representatives) and any costs and attorneys' fees reasonably incurred by them resulting from any such Claim. + + 7.3 Procedure. In connection with any Claim described in this Section 7, the Indemnified Party will (a) give the Indemnifying Party prompt written notice of the Claim, (b) cooperate with the Indemnifying Party (at the Indemnifying Party's expense) in connection with the defense and settlement of the Claim, and (c) permit the Indemnifying Party to control the defense and settlement of the Claim, provided that the Indemnifying Party may not settle the Claim without the Indemnified Party's prior written consent (which will not be unreasonably withheld). Further, the Indemnified Party (at its cost) may participate in the defense and settlement of the Claim with counsel of its own choosing. Unless the Indemnifying Party notifies the Indemnified Party in writing within five (5) days of its receipt of notice of any Claim that it irrevocably elects not to assume the defense of such Claim, the Indemnifying Party shall be deemed to have elected to assume the defense of such Claim. If the Indemnifying Party elects not to assume the defense of any Claim, or having assumed the defense of any Claim fails to pursue diligently the defense thereof, the Indemnifying Party shall be deemed to have irrevocably waived any right to participate in or control the defense or settlement of such Claim and the Indemnified Party shall be entitled to sole control of the defense and settlement of such Claim (without limitation of the Indemnifying Party's indemnity obligations under this Section 7). + + -16- + +Section 8. Disclaimers, Limitations and Reservations + + 8.1 DISCLAIMER OF WARRANTIES. EXCEPT AS PROVIDED IN SECTION 7.1 [Representations] ABOVE, NEITHER PARTY MAKES, AND EACH PARTY HEREBY WAIVES AND DISCLAIMS, ANY REPRESENTATIONS OR WARRANTIES REGARDING THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, INCLUDING (WITHOUT LIMITATION) ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR NON-INFRINGEMENT OR IMPLIED WARRANTIES ARISING OUT OF COURSE OF DEALING, COURSE OF PERFORMANCE OR USAGE OF TRADE. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, EACH PARTY SPECIFICALLY DISCLAIMS ANY REPRESENTATION OR WARRANTY REGARDING (A) THE AMOUNT OF SALES REVENUES THAT MAY OCCUR DURING THE TERM, AND (B) ANY ECONOMIC OR OTHER BENEFIT THAT THEY MIGHT OBTAIN THROUGH ITS PARTICIPATION IN THIS AGREEMENT (OTHER THAN THE SPECIFIC SUMS TO BE PAID PURSUANT TO THIS AGREEMENT). + + 8.2 No Consequential Damages. EXCEPT TO THE EXTENT AWARDED TO A THIRD PARTY IN A JUDGMENT AGAINST WHICH A PARTY IS ENTITLED TO INDEMNIFICATION PURSUANT TO SECTION 7.2 [Indemnity], OR TO THE EXTENT ARISING OUT OF ANY BREACH OF SECTION 11.4 [Nondisclosure], NEITHER PARTY WILL BE LIABLE (WHETHER IN CONTRACT, WARRANTY, TORT (INCLUDING, BUT NOT LIMITED TO, NEGLIGENCE), PRODUCT LIABILITY OR OTHER THEORY), TO THE OTHER PARTY OR ANY OTHER PERSON OR ENTITY FOR COST OF COVER OR FOR ANY INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES (INCLUDING WITHOUT LIMITATION DAMAGES FOR LOSS OF PROFIT, REVENUE, BUSINESS OR DATA) ARISING OUT OF THIS AGREEMENT, EVEN IF SUCH PARTY HAS BEEN ADVISEDOF THE POSSIBILITY OF SUCH COSTS OR DAMAGES. FOR THE AVOIDANCE OF DOUBT, THE PARTIES HEREBY ACKNOWLEDGE AND AGREE THAT NOTHING IN THIS SECTION 8.2 [No Consequential Damages] IS INTENDED TO LIMIT ANY RIGHT OF ACSI TO RECEIVE LIQUIDATED DAMAGES AS SET FORTH IN SECTION 10.5.2 [Effect of Termination]. + + 8.3 Limitation of Damages. EXCEPT FOR LIABILITIES UNDER SECTION 7.2 [Indemnity], NEITHER PARTY'S AGGREGATE LIABILITY ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, WHETHER IN CONTRACT, TORT (INCLUDING NEGLIGENCE), WARRANTY OR OTHERWISE, SHALL EXCEED [***]. + + 8.4 Third Party Infringement Claims. In the event that either Party receives from a third party a bona fide claim of infringement concerning any advertising materials or other content supplied by the other Party, such Party may immediately remove such materials + +--------- *** Confidential Information has been omitted and has been filed separately with the Securities and Exchange Commission. + + -17- + +or content from its Web Site at its sole discretion, pending receipt of non- infringing replacement materials or content or satisfactory resolution of such claim, and any such removal shall not constitute a breach of this Agreement. + +Section 9. Exclusivity. + + 9.1 ACSI + + 9.1.1 Exclusive Spoken-Word Audio Products. During the Term, [***], ACSI will not offer or sell through the ACSI Site, or authorize any third party to sell through the ACSI Site, any Exclusive Spoken-Word Audio Products; [***]. + + 9.1.2 [***] + + 9.2 [***] + + 9.3 [***] + + 9.4 Records; Audit. Each Party will, during the Term and for a period of one (1) year thereafter, maintain complete and accurate books and records sufficient to verify its compliance or non-compliance with the provisions of this Section 9 (and, in the case of Company, Section 5.4 [Royalties]). Each Party (the "Audited Party') will, upon at least thirty (30) days' prior written request by the other Party (the "Auditing Party"), allow an independent certified public + +Source: AUDIBLE INC, 10-Q, 11/13/2000 + + + + + +accounting firm selected by the Auditing Party and reasonably acceptable to the Audited Party to audit such books and records at the Audited Party's premises to the extent necessary to verify the Audited Party's compliance or non-compliance with the provisions of this Section 9 (or, in the case of Company, Section 5.4 [Royalties]); provided, that: (a) any such audit is conducted during normal business hours and in a manner designed to not unreasonably interfere with the Audited Party's ordinary business operations; (b) audits may not occur more frequently than once every twelve (12) months; and (c) each such audit may only cover the period commencing after the period covered by the last audit conducted pursuant to this Section, if any. The Auditing Party agrees that any information learned or disclosed by its auditor in connection with such audit is Confidential Information of the Audited Party. If any such audit reveals any material non- compliance with the provisions of this Section 9 by the Audited Party, the Audited Party shall, within ten (10) days of its receipt of an invoice therefor, reimburse the Auditing Party for all reasonable out-of-pocket fees and expenses incurred by the Auditing Party in connection with the applicable audit. If any such audit reveals any underpayment of any sums payable pursuant to Section 5.4 [Royalties], Company will promptly remit to ACSI the amount of the underpayment; and, if the amount of such underpayment is five percent (5%) or more for any audited period, Company shall, within ten (10) days of its receipt of an invoice therefor, reimburse ACSI for all reasonable out-of-pocket fees and expenses incurred by ACSI and its Affiliates in connection with the applicable audit together with interest on any underpayment as provided in Section 5.5 [Overdue Payments]. + +--------------- ***Confidential Information has been omitted and has been filed separately with the Securities and Exchange Commission. + + -18- + +Section 10. Term and Termination + + 10.1 Term. The term of this Agreement will commence on the Effective Date, and unless earlier terminated as provided elsewhere in this Agreement, will end automatically upon the end of Year 3. + + 10.2 Termination for Breach. Without limiting any other rights or remedies (including, without limitation, any right to seek damages and other monetary relief and ACSI's rights under Section 10.3 [ACSI Termination] or Company's rights under Section 10.4 [Company Termination]) that either Party may have in law or otherwise, either Party may terminate this Agreement if the other Party materially breaches its obligations hereunder, provided that, except as provided in Section 10.3 [ACSI Termination] and 10.4 [Company Termination], (a) the non-breaching Party sends written notice to the breaching Party describing the breach, and (b) the breaching Party does not cure the breach within thirty (30) days following its receipt of such notice; provided further, however, that without limitation of ACSI's rights under Section 10.3 [ACSI Termination] if the conditions set forth in that Section are satisfied, in the event of any failure by Company to comply with the customer service requirements specified in Section 2.4 [Technical Standards; Customer Service] and Exhibit B, ACSI shall only be entitled to terminate this Agreement by reason of such failure if it is material, ACSI has notified Company of such non-compliance and Company has not come into compliance with such requirements within sixty (60) days from the date of the non-breaching Party's notice. + + 10.3 ACSI Termination. In the event that: (a) Company at any time engages in any criminal conduct, fraud, dishonesty or other behavior that is materially harming the goodwill or reputation of ACSI or its Affiliates or the ACSI Site; (b) Company has consistently failed to abide by the technical and customer service requirements described in Section 2.4 [Technical Standards; Customer Service] or has failed to integrate the ACSI Site Functionality into the Spoken-Word Audio Sub-Section and/or Mirror Company Site as required by the Phase II Development Plan (so long as such failure is not a result of acts or omissions by ACSI); or (c) Company consistently fails to pay bona fide debts as they legally come due, institutes or has instituted against it any bankruptcy, reorganization, debt arrangement, assignment for the benefit of creditors, or other proceeding under any bankruptcy or insolvency Law or dissolution, receivership, or liquidation proceeding (and, if such proceeding is instituted against it, such proceeding is not dismissed within one hundred twenty (120) days), the same shall be deemed a material breach of this Agreement which is not susceptible to cure, and ACSI shall be entitled to terminate this Agreement upon written notice to Company. [***] + + 10.4 Company Termination. In the event that (a) ACSI has failed to integrate the ACSI Site Functionality into the Spoken-Word Audio Sub-Section and/or Mirror Company Site as required by the Phase II Development Plan (so long as such failure is not a result of acts or omissions by Company); or (b) ACSI consistently fails to pay its bona fide debts as they legally come due, institutes or has instituted against it any bankruptcy, reorganization, debt arrangement, assignment for the benefit of creditors, or other proceeding under any bankruptcy or insolvency Law or dissolution, receivership, or liquidation proceeding (and, if such proceeding is instituted against it, such proceeding is not dismissed within one hundred twenty (120) days), the same shall be deemed a material breach of this Agreement which is + +--------------- ***Confidential Information has been omitted and has been filed separately with the Securities and Exchange Commission. + + -19- + +not susceptible to cure, and Company shall be entitled to terminate this Agreement upon written notice to ACSI. + + 10.5 Effect of Termination. + + 10.5.1 General. Upon termination of this Agreement, each Party in receipt, possession or control of the other Party's intellectual or proprietary property, information and materials (including any Confidential Information) pursuant to this Agreement must return to the other Party (or at the other Party's written request, destroy and certify in writing such destruction) such property, information and materials. In addition, except as provided in Section 10.5.2 [Effect of Termination], Company will promptly upon any termination of this Agreement pay to ACSI a prorated portion of the Annual Fee due for the Year in which termination is effective; provided, however, that if Company terminates this Agreement by reason of ACSI's breach hereof, Company shall have no further payment obligation, and, if such termination occurs at any time during the Refund + +Source: AUDIBLE INC, 10-Q, 11/13/2000 + + + + + +Period, ACSI shall promptly either (a) refund to Company a percentage of the Annual Fees paid pursuant to Section 5.2.1 [Annual Fees] equal to the Proration Percentage, or, at ACSI's option, (b) cause the transfer and assignment to Company of a percentage of the Shares delivered pursuant to Section 5.3 [Waiver of Payment Obligations] equal to the Proration Percentage. Sections 6 through 8, 10 and 11 will survive the termination or expiration of this Agreement. + + 10.5.2 [***] + + 10.5.3 Construction by Court. To the extent that any court of competent jurisdiction determines that any provision of Section 10.5.2 [Effect of Termination] is for any reason unlawful, invalid, in violation of public policy or otherwise unenforceable in whole or in part, such provision shall be narrowed in scope to the extent necessary to make the same lawful, valid and enforceable while as nearly as possible reflecting the intent of the Parties as expressed in this Agreement. + + 10.5.4 User Transition. Upon any termination or expiration of the Term the Parties will cooperate in good faith to promote a smooth customer transition, and in any event, Company will, at ACSI's option, continue to operate the Mirror Company Site and offer Spoken-Word Audio Products through the Spoken-Word Audio Sub-Section in accordance with the terms of this Agreement for a period of up to six (6) months following such termination. + + 10.5.5 Phase II Development Plan. Notwithstanding any other provision of this Agreement, the Parties acknowledge and agree that no failure by the Parties to develop the Phase II Development Plan as contemplated by Section 4.1.3 [Phase II] shall be deemed, in itself, a breach of this Agreement by either Party (and therefore that such occurrence shall not, in itself, give rise to any of the remedies specified in Section 10.5.1 [General] or Section 10.5.2 [Effect of Termination]). + +--------------- ***Confidential Information has been omitted and has been filed separately with the Securities and Exchange Commission. + + -20- + +Section 11. Miscellaneous + + 11.1 Tax Treatment. + + 11.1.1 The Parties acknowledge and agree that this Agreement and the transactions contemplated hereby are not intended to create any jurisdiction or authority for any governmental authority to impose any obligation to collect any sales tax, use tax or similar tax in connection with any sales of products by either Party or its Affiliates. Accordingly, each Party agrees to take such action as the other Party may reasonably request (including, without limitation, execution of affidavits and other documents) to avoid or curtail the imposition, by reason of this Agreement or the transactions contemplated hereby, of any such obligation on such Party or its Affiliates, or the establishment of a nexus for tax purposes sufficient to grant any jurisdiction the authority to levy any sales tax, use tax or similar tax on sales of products by such Party or its Affiliates in connection with this Agreement; provided, however, that nothing in this Section 11.1.1 [Tax Treatment] shall limit Company's obligations under Section 11.1.2 [Tax Treatment]. + + 11.1.2 Company will collect and pay, and indemnify and hold harmless ACSI and its Affiliates from, any sales, use, excise, import or export, value added or similar tax or duty not based on ACSI's or its Affiliates' net income, including penalties and interest, costs associated with the collection and withholding thereof and attorneys fees in connection therewith, arising out of or in connection with this Agreement or Company's advertisement, offer or sale of any products. + + 11.2 Insurance. Company will at its expense, prior to the Launch Date obtain, and thereafter throughout the Term and for a period of six (6) months thereafter maintain, such policy or policies of insurance as is commercially reasonable for the transactions and business contemplated by this Agreement. Without limiting the generality of the foregoing, Company will ensure that such policies contain a waiver of subrogation against ACSI, name ACSI and its assignees as additional insureds. Company will not modify or terminate any coverage without giving at least thirty (30) days' prior written notice to ACSI. Upon request from ACSI, Company will furnish to ACSI certificates of insurance and such other documentation relating to such policies as ACSI may reasonably request. + + 11.3 Independent Contractors. The Parties are entering this Agreement as independent contractors, and this Agreement will not be construed to create a partnership, joint venture or employment relationship between them. Neither Party will represent itself to be an employee or agent of the other or enter into any agreement or legally binding commitment or statement on the other's behalf of or in the other's name. + + 11.4 Nondisclosure. Each Party will protect the Confidential Information of the other Party from misappropriation and unauthorized use or disclosure, and at a minimum, will take precautions at least as great as those taken to protect its own confidential information of a similar nature, but in no event with less than reasonable care. Without limiting the foregoing, the Receiving Party will: (a) use such Confidential Information solely for the purposes for which it has been disclosed; and (b) disclose such Confidential + + -21- + +Information only to those of its and its Affiliates' employees, agents, and consultants who have a need to know the same for the purpose of performing this Agreement and who are informed of and agree to a duty of nondisclosure. The Receiving Party may also disclose Confidential Information of the Disclosing Party to the extent necessary to comply with applicable Law or legal process or pursuant to a registration report or exhibits thereto filed or to be filed with the Securities and Exchange Commission, listing agency or any stock securities commission, or any other associated filings, provided that the Receiving Party uses gives the Disclosing Party not less than ten (10) days' prior written notice thereof and complies with all reasonable requests of the Disclosing Party to minimize the extent or scope of any such disclosure. Upon request of the other Party, or in any event upon any termination or expiration of the Term, each Party shall return to the other or destroy (and certify in writing such destruction) all materials, in any medium, which contain, embody, reflect or + +Source: AUDIBLE INC, 10-Q, 11/13/2000 + + + + + +reference all or any part of any Confidential Information of the other Party. + + 11.5 Costs. Except as expressly provided herein, each Party will be responsible for all costs and expenses incurred by it in connection with the negotiation, execution, delivery and performance of this Agreement. + + 11.6 Notices. Any notice or other communication under this Agreement given by either Party to the other Party will be in writing and, to be effective, must be sent to the intended recipient by prepaid registered letter, receipted commercial courier, or electronically receipted facsimile transmission (acknowledged in like manner by the intended recipient) at its address specified below its signature at the end of this Agreement, and in the case of ACSI, with a copy to Amazon.com, Inc., 1200 12th Avenue South, Suite 1200, Seattle, WA 98144, USA, Facsimile: (206) 266-7010 Attn: General Counsel and in the case of Company, with a copy to Audible Inc., Facsimile 973-890-0178, Attn: Vice President, Business & Legal Affairs; provided, that no notice of termination of this Agreement shall be deemed properly given unless sent by prepaid registered mail to such address(es) and to the attention of such officer(s). Either Party may from time to time change such address or individual by giving the other Party notice of such change in accordance with this Section 11.6 [Notices]. + + 11.7 Assignment. Company may not assign or delegate this Agreement or any of its rights or obligations hereunder, whether voluntarily, involuntarily, by operation of Law or otherwise, without ACSI's prior written consent, which consent shall not be unreasonably withheld or delayed, except that Company may assign this Agreement to any direct or indirect wholly owned subsidiary in connection with any corporate reorganization undertaken for the purpose of minimizing the tax liability of Company and its Affiliates or other bona fide corporate purpose or in connection with any Change of Control [***]. Subject to the preceding two sentences, this Agreement shall be binding upon and inure to the benefit of the Parties hereto and their successors and assigns. ACSI may assign this Agreement to (a) any corporation or other entity resulting from any merger, consolidation, or other reorganization involving ACSI, (b) any of its Affiliates, or (c) any person or entity to which it transfers all or + +--------------- ***Confidential Information has been omitted and has been filed separately with the Securities and Exchange Commission. + + -22- + +substantially all of its assets relating to the Spoken-Word Audio Sub-Section; provided that the assignee agrees in writing to be bound by all the terms and conditions of this Agreement. Subject to the foregoing, this Agreement will be binding on and enforceable by the Parties and their respective successors and permitted assigns. + + 11.8 Nonwaiver. To be effective, any waiver by a Party of any of its rights or the other Party's obligations under this Agreement must be made in a writing signed by the Party to be charged with the waiver. No failure or forbearance by either Party to insist upon or enforce performance by the other Party of any of the provisions of this Agreement or to exercise any rights or remedies under this Agreement or otherwise at law or in equity shall be construed as a waiver or relinquishment to any extent of such Party's right to assert or rely upon any such provision, right, or remedy in that or any other instance; rather the same shall be and remain in full force and effect. + + 11.9 Counterparts; Transmitted Copies. This Agreement may be executed in any number of counterparts, each of which will be deemed an original, but all of which taken together will constitute one and the same instrument. To expedite the process of entering into this Agreement, the Parties acknowledge that Transmitted Copies of the Agreement shall be equivalent to original documents until such time (if any) as original documents are completely executed and delivered. "Transmitted Copies" shall mean copies which are reproduced or transmitted via facsimile, or another process of complete and accurate reproduction and transmission. + + 11.10 Headings. The headings of sections and subsections of this Agreement are for convenience of reference only and are not intended to restrict, affect or otherwise influence the interpretation or construction of any provision of this Agreement. + + 11.11 Choice of Law. This Agreement will be interpreted, construed and enforced in accordance with the Laws of the State of Washington, without reference to its choice of Laws rules. + + 11.12 Venue. Company hereby irrevocably consents to non-exclusive personal jurisdiction and venue in the state and federal courts located in King County, Washington, with respect to any claim, action or proceeding arising out of or related to this Agreement and agrees not to commence or prosecute any such claim, action or proceeding other than in the aforementioned courts. + + 11.13 Entire Agreement. This Agreement (a) represents the entire agreement between the Parties with respect to the subject matter hereof and supersedes any previous or contemporaneous oral or written agreements regarding such subject matter and (b) may be amended or modified only by a written instrument signed by a duly authorized agent of each Party. No breach of this Agreement by either Party shall affect the rights or obligations of either Party under any other Agreement between the Parties; rather, the same will remain in full force and effect. + + -23- + +ACSI Company: ---- -------- + +Amazon.com Commerce Services, Inc. Audible Inc. + + /s/ /s/ Don Katz ---------------------------------- -------------------------------------- By (Sign) By (Sign) + +Vice President Founder, Chairman, Acting CEO ---------------------------------- -------------------------------------- Title Title + +Source: AUDIBLE INC, 10-Q, 11/13/2000 + + + + + +1/30/2000 1/30/2000 ---------------------------------- -------------------------------------- Date Date + +Notice Address: Notice Address: + +[***] [***] + +--------------- ***Confidential Information has been omitted and has been filed separately with the Securities and Exchange Commission. + + -24- + +Source: AUDIBLE INC, 10-Q, 11/13/2000 \ No newline at end of file diff --git a/full_contract_txt/AzulSa_20170303_F-1A_EX-10.3_9943903_EX-10.3_Maintenance Agreement1.txt b/full_contract_txt/AzulSa_20170303_F-1A_EX-10.3_9943903_EX-10.3_Maintenance Agreement1.txt new file mode 100644 index 0000000000000000000000000000000000000000..bda2ce3f04f909de23b29a9f4098c89328ec624b --- /dev/null +++ b/full_contract_txt/AzulSa_20170303_F-1A_EX-10.3_9943903_EX-10.3_Maintenance Agreement1.txt @@ -0,0 +1,2185 @@ +Execution version + +Exhibit 10.3 + +CONFIDENTIAL TREATMENT REQUESTED - REDACTED COPY Confidential Treatment has been requested for portions of this Exhibit. Confidential portions of this Exhibit are designated by [*****]. A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. + +GLOBAL MAINTENANCE AGREEMENT Contract No. DS/CS-3957/14 issue 7 + +Between + +AZUL LINHAS AÉREAS BRASILEIRAS S/A (as Company) + +and + +AVIONS DE TRANSPORT REGIONAL, G.I.E. (as Repairer) + +March 9th, 2015 + + AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 1/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONTENTS Clause Page 1. SUBJECT-MATTER OF THE AGREEMENT 6 2. DEFINITIONS AND INTERPRETATION 6 3. DURATION AND RENEWAL 15 4. EXCUSABLE DELAY 15 5. SERVICES, LEASE AND OBLIGATIONS OF THE PARTIES 16 6. DELIVERIES 18 7. WORK ORDERS 20 8. INSURANCES 21 9. WARRANTIES 22 10. PRICES 22 11. RECONCILIATION 22 12. INVOICING AND PAYMENT TERMS 23 13. SECURITY DEPOSIT 26 14. DISCLAIMER 27 15. LIABILITY AND INDEMNITY 27 16. TERMINATION 28 17. CONDITIONS PRECEDENT 31 18. EXPORT CONTROL 31 19. NOTICES 31 20. CONFIDENTIALITY 32 21. TAXES 34 22. ASSIGNMENT 34 23. MISCELLANEOUS 35 24. GOVERNING LAW AND ARBITRATION 37 AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 2/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version EXECUTION PAGE 39 EXHIBIT 1 - LIST OF ATR AIRCRAFT COVERED UNDER THIS AGREEMENT 40 EXHIBIT 2 - LIST OF SERVICES PROVIDED UNDER THIS AGREEMENT 42 EXHIBIT 3 - MAIN ELEMENTS COVERED UNDER THE AGREEMENT 43 EXHIBIT 4 - LIST OF LANDING GEAR ON CONDITION PARTS 44 EXHIBIT 5 - STOCK 45 EXHIBIT 6 - LRUS COVERED BY REPAIR AND STANDARD EXCHANGE SERVICES 61 EXHIBIT 7 - REPAIRER STANDARD WORK ORDER FORMS 70 EXHIBIT 8 - LEASE OF THE STOCK 74 EXHIBIT 9 - SPARE PARTS STANDARD EXCHANGE SERVICE 80 EXHIBIT 10 - LRUS REPAIR SERVICE 84 EXHIBIT 11 - MAIN ELEMENTS SERVICES 86 EXHIBIT 12 - INTENTIONALLY LEFT BLANK 92 EXHIBIT 13 - FORM OF STANDBY LETTER OF CREDIT 93 EXHIBIT 14 - PRICE CONDITIONS 94 EXHIBIT 15 - ADVANCED POOL SERVICE 101 EXHIBIT 16 - ADVANCED POOL STOCK 106 EXHIBIT 17 - INSURANCE CERTIFICATES 108 EXHIBIT 18 - NOTA FISCAL REPORTING 109 AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 3/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version THIS GLOBAL MAINTENANCE AGREEMENT (HEREINAFTER REFERRED TO AS THE "AGREEMENT" OR "GMMA") IS MADE ON March 9th 2015: + +BETWEEN: + +AZUL LINHAS AÉREAS BRASILEIRAS S/A, a company incorporated under the laws of Brazil, the registered office of which is located at Avenida Marcos Penteado de Ulhôa Rodrigues, 939 - Edif. Castello Branco Office Park - Torre Jatobá - 9° andar - CEP 06460-040 - Alphaville Industrial - Barueri - São Paulo - Brazil, identified under Cadastro Nacional de pessoa Juridica (CNPJ) number 09.296.295/0001-60. + +Hereafter referred to as the "Company" or "AZUL", + +on the one part, + +AND: + +AVIONS DE TRANSPORT REGIONAL, G.I.E., a French groupement d'intérêt économique established under articles L.251-1 to L251-23 of the French Commercial Code, whose registered office is at 1 allée Pierre Nadot, 31712 Blagnac, France identified under Corporate and Trade Register of Toulouse number 323 932 236, + +Hereafter referred to as the "Repairer"or "ATR", + +on the other part. + +Hereinafter individually referred to as the "Party" or collectively as the "Parties", as the context requires. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 4/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version RECITALS: + + 1) WHEREAS AZUL and ATR have entered into a Global Maintenance Agreement ref DS/CC-2612/10 (dated December 24t h, 2010) to support AZUL ATR aircraft fleet for operational support tasks as well as scheduled and unscheduled maintenance, as amended from time to time ("GMA AZUL"); and, + + 2) WHEREAS TRIP and ATR have entered into a Global Maintenance Agreement ref DS/C- 2883/09 (dated September 10t h, 2010) to support TRIP ATR aircraft fleet for operational support tasks as well as scheduled and unscheduled maintenance, as amended from time to time ("GMA TRIP"); and, + + + +3) WHEREAS pursuant to an investment agreement dated on May 25, 2012, entered into between Trip shareholders and Azul S.A., TRIP became a wholly owned subsidiary of the latter, integrating the Azul Group which already includes AZUL, an operating company, as duly approved in due time by their respective corporate governing bodies and the relevant authorities (National Civil Aviation Agency-"ANAC"-and Brazilian Antitrust Authority-"CADE"); and 4) WHEREAS further to operation as detailed above in 3), AZUL progressively operated an enlarged fleet of Aircraft coming from TRIP;and, + + 5) WHEREAS, in consideration of the local repair service in Brazil and the Aircraft fleet now solely operated by AZUL, the Parties wish to terminate the GMA TRIP and the GMA AZUL, and to enter into negotiation for a new GMLA between ATR and AZUL, on the terms and conditions set forth herein. + +NOW THEREFORE, IT IS HEREBY AGREED AS FOLLOWS: AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 5/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version + +1. SUBJECT-MATTER OF THE AGREEMENT + +This Agreement describes the terms and conditions according to which the Repairer (i) shall provide, or cause its Subcontractors to provide, Services for the Company's Aircraft fleet; and (ii) agrees to lease the Stock to the Company and the Company agrees to take the Stock on lease, subject to the terms and conditions set forth on Exhibit 8. + + 2. DEFINITIONS AND INTERPRETATION + +2.1 Unless otherwise defined, capitalised terms, singular or plural, used in this Agreement shall have the meaning set out below: "Abnormal Use" + + + +means any usage, maintenance, storage, handling of the Aircraft, or its sub-assemblies, or its systems, or Items fitted on it including LRUs, Main Elements, Spare Main Elements, that does not comply with all applicable technical documentation and any other instructions issued by the manufacturers and which is not attributable to the Repairer or Subcontractors, including: (i) Any failure by the Company to correctly comply with any Repairer and/or OEM instructions or recommendations, technical directives, or any workmanship defect, lack of qualification, non- approved repair and/or maintenance method; or, (ii) Any negligence or failure to exercise reasonable effort(s) made to initiate corrective action(s), or lateness or total or partial failure in undertaking corrective action(s), for Aircraft or LRU(s) or Main Element(s) malfunctions which should have been reasonably identified by the Company; or, (iii) Any Aircraft, LRU(s) or Main Element(s) suffering damage or premature removal arising out of or in connection with any defective storage, inappropriate Packaging or transport by the Company or its forwarder agent, or gross negligence or wilful misconduct of the Company(or its subcontractors or agents); or (iv) Any events or circumstances, including: FOD, abnormal wear, hard contact, material drop or shock, engine fire or submersion, lightning strike, hard landing, hail (including on storage position), partial or total destruction or loss of Aircraft, LRU(s) or, Main Element(s); + +"Affiliates" means with respect to any entity, any entity Controlled by, Controlling or under Common Control with, the first entity, and/or their respective lawful successors and/or assigns; + +"Agreement" has the meaning set forth in page four (4) here above; + +"Aircraft" + + + +means collectively or individually as the context requires the ATR aircraft listed in Exhibit 1 ("List of ATR Aircraft covered under this Agreement"), amended from time to time by way of notice sent to the Company , as relevant, by Repairer in order to cover any further ATR aircraft entering the Company's fleet, including the airframe, engines, propellers and landing gears and parts installed on the Aircraft, when solely operated by the Company ; AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 6/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED "Airworthiness Authority" + + + +means, in respect of any jurisdiction, the Government Entity, which under the laws of such jurisdiction, has control over civil aviation or the registration, airworthiness, operation of aircraft in such jurisdiction, including, in the European Union, the European Aviation Safety Agency (the "EASA") and, in the United States of America, the Federal Aviation Administration (the "FAA"); + +"Airworthiness Directives" or "AD" means enforceable rules issued by the relevant Airworthiness Authorities that have a mandatory impact on Aircraft operation and/or maintenance; + +"Aircraft Maintenance Manual" or "AMM" + +means the customized manual, drafted in compliance with the ATA100 specifications, issued by ATR, as Aircraft manufacturer, and which is split into three (3) separate parts, namely: the Description and Operation Manual, the Trouble Shooting Manual and the Job Instruction Cards; the purpose of which is to provide all information required for Aircraft maintenance, while ensuring personnel and flight safety; + +"Aircraft On Ground" or "AOG" + +means the highest priority designation to process a requirement for an LRU and/or maintenance action; when applied to an Aircraft, such term indicates that such Aircraft is unable to continue or to be returned to revenue service until that appropriate action is taken; + +"ANAC" means Agência Nacional de Aviação Civil, the Brazilian Civil Aviation Authority; + +"ATA" means Air Transport Association of America Inc.; + +"ATA 300" + + + +means documentation issued by ATA (as amended from time to time, or any other ATA's substituted documentation) reviews the design, development and procurement of effective packaging of supplies shipped by either Party to the other Party; it provides packaging instructions for repairable and expendable units and components, included packaging standards for kits, preparation of hazardous materials for shipment and handling of electrostatic discharge sensitive devices. + +"BER" or "Beyond Economical Repair" + +means the case in which the repair cost of any unserviceable Item is greater than [*****] of the price for a brand new identical LRU and/or Main Element; + +"BUR" or "Basic Unscheduled Removal" + + + +means any basic unplanned removal, premature removal of a LRU or a Main Element, due to a sub- component or accessory induced malfunction. Likewise, removal of a LRU and/or a Main Element, component or accessory due to a problem which could have been rectified using troubleshooting and/or corrective line maintenance actions as specified in the applicable AMM is not considered to be a BUR; + +"Business Day" means a day, other than a Saturday or a Sunday, on which banks are open for the transaction of domestic and foreign exchange business in Paris (France) and São Paulo (Brazil); + +"CMM" or "Component Maintenance Manuals" + +means a manual issued either by any relevant OEM and containing instruction concerning the overhaul and/or repair of components together with procedures for restoring such components to a fully serviceable condition. These manuals shall be compliant with ATA100 Specification; [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 7/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version "Confidential Information" + + + +means all and/or any part of any information and/or data disclosed to and/or obtained by either Party from the other Party during the Term relating to or in connection with the performance of this Agreement; such information is conclusively considered as confidential without it being necessary to mention at the moment of its disclosure, and includes: (i) technical information, such as instructional know-how, academic and/or practical maintenance courses and/or aircraft piloting courses, programs, software, manufacturing secrets, processes, prototypes, research work, studies, plans, sketches, formulae, samples, specifications, diagrams, etc., (ii) commercial information, such as list of customers, suppliers, etc., (iii) financial (tariffs, margins, market parts, etc.), (iv) legal information, such as the Agreement, Exhibits, contracts, amendments, appendices, contractual relations, negotiations, partners, etc. and (v) written, electronic or oral information (hard copy, computer, digital, etc.); + +Control", "Controlled", "Controlling" and "Common Control" + + + +are to be interpreted as follows: "I. A company is deemed to control another company: (i) When it directly or indirectly holds a fraction of the capital that gives it a majority of the voting rights at that company's general meetings; (ii) When it alone holds a majority of the voting rights in that company by virtue of an agreement entered into with other partners or shareholders and this is not contrary to the company's interests; (iii) When it effectively determines the decisions taken at that company's general meetings through the voting rights it holds; (iv) When it is a partner in, or shareholder of, that company and has the power to appoint or dismiss the majority of the members of that company's administrative, management or supervisory structures. II.—It is presumed to exercise such control when it directly or indirectly holds a fraction of the voting rights above 40% and no other partner or shareholder directly or indirectly holds a fraction larger than its own. III.—For the purposes of the same sections of the present chapter, two or more companies acting jointly are deemed to jointly control another company when they effectively determine the decisions taken at its general meetings". + +"Core Unit" means any unserviceable LRU returned by the Company to the Repairer as a counterpart to standard exchange; + +"Credit Note" "Credit Note" Means the credit note to be issued by the Repairer in accordance with Clause 11 ("Reconciliation") of this Agreement. + +"CSN" means the accrued Cycles Since New; + +"CSO" means the accrued Cycles Since Overhaul; + +"CY" or "Cycle" means a completed Aircraft takeoff and landing sequence; + +"Day" means a calendar day; AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 8/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version "Default" means any failure by either Party to perform or observe any material obligation under this Agreement, including as set forth with Clause 16.1 b) and including Abnormal Use; + +"Delivery" means the act of the Repairer putting at the Company's disposal any Item at Delivery Location according to the terms of this Agreement; + +"Delivery Location" means the Repairer's facility as defined under Clause 6 ("Deliveries") of this Agreement; + +"Early Event" + + + +concerns LRU and/or Main Element and/or Aircraft airframe maintenance subject to Scheduled Event and designates a situation where a Scheduled Event takes place before it is scheduled pursuant to Exhibit 11 Clause 1.2 for the Main Element and/or to the CMM for the LRU when applicable; + +"End Date" + + + +means the date on which this Agreement is terminated or expires, and shall be the earlier to occur of the following, as appropriate: (i) the end of the Initial Term as defined in Clause 3.1of this Agreement; or, (ii) the end of the term of each annual renewal of this Agreement as per Clause 3.2 of this Agreement; or, (iii) the date on which all or part of this Agreement is terminated as per Clause 16 ("Termination"); + +"Euros" or "€" designates the legal currency of the member countries of the European Union who have adhered to the European Monetary Union; + +"Excusable Delay" has the meaning set forth in Clause 4.1 of this Agreement; + +"Fleet Turnover" means the amount normally invoiced under this Agreement using the Standard Operations and all applicable prices in Exhibit 14 ("Price conditions"); + +"FH"or "Flight Hour" means airborne flight hour, the unit of measure of each Aircraft flight activity for the time elapsed between Aircraft take-off and Aircraft landing; + +"FOD" + + + +stands for Foreign Object Damage and means any damage, whether direct or indirect, to any Item and/or the airframe caused as a result of or related to any foreign object not forming part of any Item and/or the airframe; + +"Government Entity" means any national government, political subdivision thereof, or local jurisdiction thereof; + +"Incoterms" means the international rules for the interpretation of trade terms published by the International Chamber of Commerce ("ICC"), 2000 edition; + +"Initial Term" has the meaning set forth in Clause 3.1 of this Agreement; + +"Item" + + + +means, as the case may be, any LRU, Main Element, Spare Main Element, any of their sub- assembly or sub-component, any part of the Stock, or for the sake of clarity any part covered under this Agreement; AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 9/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED "Law" means any applicable law, order, statute, statutory instrument, regulation, decree, directive or instrument of equivalent effect; + +"LIBOR" + + + +stands for "London Interbank Offered Rate", which designates the annual rate equal to one month in Eurodollars quoted at 11:00 hours or approximately 11:00 hours (London time), as indicated on "Reuters screen" LIBOR01page, for an amount and period selected by the Repairer, which is available to the subscribers to the Telerate electronic display terminal, [*****] prior to the corresponding period; + +"LOC" or "StandBy Letter of Credit" + + + +means an irrevocable letter of credit in the form or substantial form stipulated by Exhibit 13 ("Form of StandBy Letter of Credit"), in accordance with Uniform Customs and Practice ("UCP") for the documentary credit, 2007 revision, ICC publication n°600, issued by a major international bank, confirmed by and domiciliated in NATIXIS, Paris, France, provided by the Company to the Repairer in accordance with Clause 13 ("Security Deposit") of this Agreement; + +"Loss" + + + +means any and all losses, costs, charges, expenses, interests (including default interest), fees (including legal fees and value-added tax thereon if applicable), payments, demands, liabilities, claims, actions, proceedings (including stamp, documentary, registration or other duties, taxes or any charges incurred by and/or in connection with proceedings), penalties, damages, adverse judgments, orders or other sanctions; + +"Lost Potential" with respect to LRU and/or Main Elements subject to Scheduled Events, designates, in the case of an Early Event, [*****]; + +"LRU(s)" or "Line Replaceable Unit(s)" + +means any equipment that can be replaced on line by the Company's technicians and listed into Exhibit 6 ("LRUs covered by repair and standard exchange Services"); + +"Main Element" + + + +means a propeller and/or a landing gear and/or an engine as listed in Exhibit 3 ("Main Elements and part numbers covered by this Agreement") and/or in Exhibit 5 ("Stock"), or any of their respective sub-assemblies; + +"MMEL" or "Master Minimum Equipment List" + +means a document provided by ATR providing operating and maintenance procedures for a categorized list of systems, instruments and equipment on an ATR aircraft that may be inoperative for flight; + +"Mean Time Between Unscheduled Removals" or "MTBUR" + +means a figure for assessing performance calculated by dividing the total number of FH of the ATR aircraft worldwide fleet during a given period, by the number of unscheduled removals of LRUs recorded during the same period on the same fleet; + + [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 10/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version "MPD" or "Maintenance Planning Document" + +means the documents issued by the Aircraft manufacturer, providing periodic maintenance requirements data necessary to plan and conduct the Aircraft maintenance checks and inspections, in force on the Signing Date; + +"MRBR" + + + +means the Maintenance Review Board Report, which outlines the initial minimum maintenance requirements to be used in the development of an approved continuous airworthiness maintenance program for the Aircraft, and which is issued by the Maintenance Review Board ("MRB"); + +"Measured Removal Rate(s)" or "MRR" + + + +designates, for the Aircraft and depending on the Aircraft age, the quantity of LRU removals per one thousand (1,000) FH, established in units and tens, to be measured during each period of three (3) consecutive Months of Aircraft activity during the Term for all LRUs listed into Exhibit 6 ("LRUs covered by repair and standard exchange Services") excluding Main Elements and/or Main Element subassemblies, repair warranty and "Rogue" units; + +"Month" + + + +refers to a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month (and references to months shall be construed accordingly) save that, where any such period would otherwise end on a non-Business Day, it shall end on the next Business Day, provided that if a period starts on the last Business Day in a calendar month or if there is no numerically corresponding day in the month in which that period ends, that period shall end on the last Business Day in that later month; + +"NFF" or "No Fault Found" + + + +means any event where an Item removed from an Aircraft by the Company and returned to the Repairer for repair is declared serviceable with non-confirmed fault by the latter through strip report or where a serviceable Item removed from the Pool by the Repairer and delivered to the Company under the standard exchange Service set out in Exhibit 9 ("Spare parts standard exchange Service") is returned by the Company to the Repairer unused; + +"Notice" + + + +means any notice or communication pertaining to this Agreement which shall be given in writing delivered by hand and/or by courier service with proof of delivery and/or by fax, and: a) if delivered by hand, shall have been deemed received when so delivered; or, b) if delivered by registered mail, shall be deemed to have been received by the addressee on the Day on which it shall have signed as received; or, c) if delivered by fax, shall be deemed to have been received by the addressee on the next Business Day following electronic acknowledgement. In the event a Party chooses to give a Notice by several of the aforesaid means, the earliest of the receipt dates will be considered. In any case, any notice or communication shall be also transmitted by an e-mail with attached copy of such (in format PDF or similar support)n, for courtesy purpose only. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 11/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version "OEM" or "Original Equipment Manufacturer" + +means a manufacturer of parts other than ATR manufactured parts including the engine manufacturer, the propeller manufacturer, the landing gear manufacturer or an LRU manufacturer; + +"Packaging" or "Packed" + + + +means packaging of any Item or packed Item, as relevant, shipped by either Party to other Party under the Agreement, in compliance with the following: (i) Repairer's and/or its suppliers' and/or its Subcontractors' and/or OEM's recommendations, as relevant; and (ii) ATA 300 specifications for air transport; and/or (iii) International Carriage Of Dangerous Goods By Road ("ADR") regulation for good and reusable condition; and/or, (iv) International Air Transport Association ("IATA") Dangerous Goods Regulations, for any shipment of dangerous Items. "Person" means any state, division of a state, Government Entity, individual or corporate body or any association of any one or more of the foregoing; + +"Pool" + + + +designates a stock of serviceable LRUs listed in Exhibit 6 ("LRUs covered by repair and standard exchange Services"), available on a non-exclusive basis to the Company under standard exchange Service as per Exhibit 9 ("Spare parts standard exchange Service"); such Pool may be amended from time to time by the Repairer by way of Notice sent to the Company, in compliance with this Agreement, subject to Company's approval. + +"Repair Shop" means any FAA/EASA part 145 or ANAC approved repair shop selected by the Repairer and acting as its Subcontractor; + +"Repairer Indemnified Parties" + +means the Repairer and/or ATR, as relevant, and/or their Affiliates and/or their respective lawful successors and/or assigns and/or their respective subsidiaries, officers, directors, employees, agents or Subcontractors; + +"Reference Removal Rate(s)" or "RRR" + + + +designates the standard reference rate of LRU removals per one thousand (1,000) FH, established in units and tens, during each period of six (6) consecutive Months of Aircraft activity during the Term for all LRUs listed into Exhibit 6 ("LRUs covered by repair and standard exchange Services") excluding Main Elements and/or Main Element sub-assemblies, and indicated in Clause 1.3.1 of the Exhibit 14 ("Price conditions"); + +"Rogue Units" + + + +designates a LRU for which the same serial number has been removed from an Aircraft on three (3) or more occasions for similar discrepancies (except regarding specific services not covered by the Services and except to the extent caused by Company's Default), or four (4) NFF based on official Repair Shop data within a twelve (12) Month period, with confirmation of approved trouble shooting as per the CMM and/or the AMM; AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 12/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version "Scheduled Event" + + + +with respect to LRUs and/or Main Elements and/or Aircraft airframe that are subject to programmed overhauls and/or inspections, designates such overhaul and/or inspections that shall take place after a specified number of accrued FH and/or Cycles or Months as set out in Exhibit 11 ("Main Elements Services") for the Main Elements and in the CMM for the relevant LRUs; + +"Security Deposit" + + + +designates the cash payment and/or the LOC issued, as security for the Company's performance of all of its obligations under this Agreement, in compliance with Clause 13 ("Security Deposit") of this Agreement; + +"Service" + + + +means any and all operational support tasks to be carried out by the Repairer and/or its Subcontractors under this Agreement, as defined in Exhibit 2 ("List of Services provided under this Agreement"); + +"Signing Date" means the date indicated on page four (4) of this Agreement and refers to the date on which this Agreement is signed by both Parties; + +"Spare Main Element" means the spare Main Element(s) the Repairer makes available to the Company during Main Element maintenance according to Exhibit 11 ("Main Elements Services"); + +"Standard Operations" has the meaning set forth in Clause 3.2 of Exhibit 14 ("Price conditions"); + +"Start Date" means the date occurring thirty (30) Days after the Signing Date, subject to fulfilment of the conditions set out in Clause 17 ("Conditions precedent"); + +"Stock" means all or part of the Items, as relevant, listed in Exhibit 5 ("Stock"); + +"Storage Location" means Company's facilities where the Stock is located as defined in Exhibit 8 ("Lease of the Stock"); + +"Subcontractor" means any Person, including a Repair Shop, engaged by the Repairer to support the Repairer in the performance of its contractual obligations under this Agreement; + +"SWIFT" stands for the Society for Worldwide Interbank Financial Telecommunication; + +"Taxe(s)" + + + +mean any and all present or future fees (including license, recording, documentation and registration fees), taxes [including income taxes, gross receipts taxes, capital taxes, franchise taxes, net worth taxes, gross profits taxes, sales taxes, rental taxes, use taxes, turnover taxes, value added taxes, ad valorem taxes, property taxes (tangible and intangible), excise taxes, customs or import duty, documentary and stamp taxes], licenses, levies, imposts, duties, charges, assessments or withholdings of any nature whatsoever, whether now existing or hereafter adopted, enacted or amended, howsoever imposed, levied or asserted by any Government Entity or taxing authority together with any and all penalties, fines, additions to tax and interest thereon; + +"TBO" stands for Time Between Overhaul and means the FH or CY elapsed between two (2) consecutive overhauls; + +"Term" means the period of time starting from the Signing Date and ending on the End Date; AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 13/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version "Time and Material" + +means any sale of goods and services, not covered by the scope of this Agreement and charged to the Company, which is subject to the "ATR General Terms and Conditions for the Sale of Goods and Services"; + +"TNR" or "Technically Non Reparable" + +means where an unserviceable Item (i) is not repairable according to ATA 100 and/or (ii) for which no technical repair can be considered; + +"TSN" or "Time Since New" means the FH elapsed since new; + +"TSO" or "Time Since Overhaul" means the FH elapsed since the last overhaul; + +"US Dollar" or "$" designates the legal currency of the United States of America; + +"Vendor Warranty Manual" + +means the manual giving details of the warranties granted by an OEM with respect to certain parts of Aircraft, provided by the said OEM; + +"Week" means a period of seven (7) Days; + +"Work Order" means any order issued by the Company to the Repairer for any of the Services and being one of the forms set out in Exhibit 7 ("[Repairer standard Work Order forms"), as applicable. + + 2.2 In this Agreement, save as otherwise expressly indicated to the contrary, any reference to: 2.2.1 this Agreement or any other agreement or document shall be construed as a reference to this Agreement or such other agreement ordocument as amended, novated or supplemented from time to time; any reference to this Agreement includes its Exhibits; and, 2.2.2 any Clause shall be construed as a reference to a clause of this Agreement and/or of an Exhibit to this Agreement, as relevant; and, 2.2.3 any Exhibit shall be construed as a reference to an Exhibit to this Agreement; and, 2.2.4 Headings: Clauses and Exhibits headings and sub-headings are used in this Agreement only for the ease of reading. They are notintended to affect its meaning and should not be used for the sake of its construction; and, 2.2.5 "including"shall be construed as a reference to "… including, without limitation,…" or "… including but not limited to…"; and, 2.2.6 Singular and plural: wherever the context so requires, the singular shall include the plural and vice versa; and, 2.2.7 a date will be by reference to the Gregorian calendar; and, 2.2.8 "in writing" includes any modes of reproducing words in a legible and non-transitory form but does not include e-mail (but caninclude the copy "PDF" of any document sent AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 14/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED by e-mail); and, + + 3. DURATION AND RENEWAL + +3.1 The Agreement enters into force on the Signing Date; it will have a duration of [*****] as from the Start Date (the "Initial Term"). 3.2 Upon expiry of the Initial Term, this Agreement [*****] unless a Notice of non-renewal is given by either Party to the other Party [*****] prior to the expiry of the Initial Term or the end of a renewal period, if any. 3.3 The Agreement shall end on the End Date without any further action, unless otherwise provided under this Agreement. + + 4. EXCUSABLE DELAY + +4.1 If a Party (the "Affected Party") is prevented, hindered or delayed from or in performing any of its obligations under this Agreement by an event which is unpredictable and unavoidable, including war or civil or foreign armed aggression, riots, fires, floods, explosions, earthquakes or accidents, epidemics or quarantine restrictions, any act of a Government Entity, embargoes, export prohibitions, failure by a subcontractor and/or vendor to furnish supplies or parts or delay the same, strikes or labour troubles causing cessation of work, such event will be referred to as an "Excusable Delay". 4.2 The Affected Party will give Notice to the other Party (the "Non-Affected Party") of such Excusable Delay as soon as reasonably possible after it becomes aware thereof, and the Affected Party will use its reasonable endeavours to mitigate the effects of such Excusable Delay, without being obliged however to incur any unreasonable costs. 4.3 Neither Party shall be held liable, or deemed to be in Default, if it fails to perform its obligations under this Agreement due to an Excusable Delay; without prejudice to Clause 4.5 hereinafter, the time fixed for the performance by the Affected Party of its obligations affected by the Excusable Delay shall be equivalent to the time set out under this Agreement plus a grace period equivalent to the time lost further to the occurrence of and because of the Excusable Delay. 4.4 As soon as reasonably possible after the end of the Excusable Delay, the Affected Party shall give Notice to the Non-Affected Party that the Excusable Delay has ended. 4.5 If the Excusable Delay continues for more than [*****] as from the receipt by the Non-Affected Party of the Notice as per Clause 4.2, each Party shall be entitled to terminate this Agreement according to the terms of Clause 16.4 hereof. + + 5. SERVICES AND OBLIGATIONS OF THE PARTIES + +5.1 Services [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 15/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED The Repairer shall provide the Company with the Services listed in Exhibit 2 ("List of Services provided under this Agreement"). 5.2 General conditions of the Services + + 5.2.1 The Services shall comply with the applicable AMM, MRBR and MPD issued by ATR, as Aircraft manufacturer, and the relevant CMM in force as of the Signing Date, and with the EASA and/or FAA or ANAC regulations in force at the time of performance of such Services + + 5.2.2 Should the AMM, MRBR or the MPD be modified in a manner that is likely to modify or impact the performance of the Services, the Parties hereby agree to negotiate in good faith the consequences of such modifications and impacts on this Agreement (including on the prices set out in Exhibit 14 "Price conditions"). + + + +5.2.3 Audit of the Repair: Company shall have the right, under EUR OPS or PART M equivalent applicable regulation approval, to audit the management and the performance of the Services provided by the Repairer under this Agreement, subject to giving a [*****] prior Notice to the Repairer. The cost of any such audits by the Company's representative(s) shall be borne by the Company unless if, as a result of that audit, the Repairer is found to be in Default, in which cases the cost of such audit will be borne by the Repairer. 5.2.4 Company's audit: at any time during the Term, the Repairer may: (i) audit the management and the performance of the Company's maintenance activities which are still under Company'sresponsibility; and/or, (ii) arrange for operational visits, in order to check that the Company complies with its obligations under this Agreement; and/or, (iii) investigate in any place, with the assistance of the Company, the causes of any abnormal removal or failure rate of any Itemand/or Abnormal Use. + +The Repairer shall give a Notice to the Company no later than [*****] prior to such audit or operational visit. + +The Company shall provide at no cost for the Repairer all necessary support to the Repairer's representative(s) and give access to: (i) the Company's facilities or any other place where the Aircraft and/or any data or document related to Aircraft maintenance andoperations that the Repairer may require may be located; and, (ii) the exact number of accumulated FH and Cycles for any Aircraft and Items operating or maintenance records. + +Unless otherwise agreed between the Parties, any operational visit shall be conducted during the scheduled operations of the Aircraft and the Repairer or its representative(s) shall use its reasonable endeavors not to disrupt the Company's scheduled operations. + +The cost incurred by the Repairer to conduct such audits and visits will be borne by the Repairer unless (i) a Company's Default (as defined in Clause 16 "Termination") has occurred and/or (ii) as a result of that audit or visit, the Company is found to be in Default, in which cases the cost of such audit or operational visit will be borne by the Company . + +The Repairer has no duty or obligation to perform any audit or operational visit and shall [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 16/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED not incur any obligation or liability if it does not perform any of its audit or operational visit rights referred to in this Clause 5.2.4. + +The Repairer shall notify the Company of the outcome of any such audit or operational visit and of any remedial action that the Company shall perform to comply with its obligations under this Agreement. The Company shall carry out all such remedial actions within a mutually agreed time period , otherwise the Company shall be deemed in Default. + +It is acknowledged and agreed that any audit or operational visit by the Repairer will be conducted by the Repairer for its own purposes in connection with this Agreement and the Repairer shall have no responsibility, liability or obligations with respect to the safety compliance with any AD, operation or, except as otherwise provided herein, maintenance of any Aircraft, all of which shall be the sole responsibility, liability and obligation of the Company. 5.3 Obligations of the Parties 5.3.1 Obligations of the Company + + 5.3.1.1 As a counterpart to the terms and conditions (including pricing conditions) agreed between the Parties under this Agreement [*****]. In the event, the Company fails to do so, the Repairer shall be entitled to revise such terms and conditions in order to take into account such failure. 5.3.1.2 During the Term, the Company shall: (i) operate and maintain the Aircraft in compliance with all applicable technical documentation and any otherinstructions issued by ATR and the OEM; and, (ii) remove and install LRUs and Main Elements from and on Aircraft; and, + + (iii) comply with any AD, and order such incorporation or modifications from the Repairer; and consequently manage the update of Aircraft, LRUs and Main Elements mandatory or regulatory technical notices and log books and deliver to the Repairer a copy of such documentation upon each maintenance event or upon Repairer's request; and, (iv) promptly inform the Repairer in case the Company or their insurer intends to attend any LRU or Main Element tear-down at the Repair Shop; and, + + (v) provide the Repairer not later than the tenth (10t h) Day of each Month with an activity report relating to each Aircraft and each Main Element serial number, and containing at least FH and Cycles performed during the preceding Month, the TSN, CSN, TSO, CSO, and the removals/installations events during such Month; and, (vi) preserve the Aircraft, any Main Elements and/or any and all sub-assemblies in accordance with the AMM in caseany Aircraft is temporarily unused by the Company for any reason whatsoever. 5.3.2 Obligations of the Repairer + +During the Term, the Repairer shall use its reasonable commercial endeavors, in accordance [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 17/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED with this Agreement: (i) to carry out the Services pursuant to the Work Order(s) placed by the Company ; and, (ii) to ensure that the Services provided to Company shall comply with EASA, FAA or ANAC regulations in force, as applicable (iii) in the event of specific or exceptional circumstances affecting the Company or the Repairer, to obtain the assistance of anyone or several third Parties servicers or suppliers of spare parts, subject to the Company s prior approval; and (iv) to administer LRUs and Main Elements warranty claims issued by the Company. + + 6. DELIVERIES + +The Delivery Location shall be one of the addresses set out in Clauses 6.1 and 6.2 hereafter as the context requires. 6.1 Items delivered by the Repairer to the Company + +Unless otherwise set forth in this Agreement, the Repairer shall deliver to the Company: 6.1.1 any Item as relevant in accordance with Exhibits 8 ("Lease of the Stock"), , 11 ("Main Elements Services") and 15 ("Advanced PoolStock"), [*****] and Packed at the following address: + +ATR Customer Support C/O DHL Solutions ZA du Pont Yblon 95500 Bonneuil en France + +And; + +any Item from the List A of the Exhibit 6 ("LRUs covered by repair and standard exchange services"), as relevant in accordance with Exhibit 9 ("Spare parts standard exchange Service") and Exhibit 10 ("LRUs repair Service"), [*****] and Packed at the following address: + +ATR Customer Support C/O DHL Solutions ZA du Pont Yblon 95500 Bonneuil en France + +And: + +any Item from the List B of the Exhibit 6 ("LRUs covered by repair and standard exchange services"), as relevant in accordance with Exhibit 9 ("Spare parts standard exchange Service") and Exhibit 10 ("LRUs repair Service"), [*****] and Packed at the following address: + +Helibras - Helicópteros do Brasil - Air Bus Helicopters Rodovia Dom Pedro I - Km 87 - Pista Norte Condomínio Barão de Mauá - Atibaia - São Paulo [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 18/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED or at any other address the Repairer may from time to time notify to the Company. 6.1.2 Intentionally left blank 6.2 Items returned by the Company to the Repairer + +The Company shall return to the Repairer: 6.2.1 any Item as relevant, in accordance with Exhibits 8 ("Lease of the Stock"), 11 ("Main Elements Services") and 15 ("Advanced PoolStock"), [*****] and Packed at the following address: + +ATR Customer Support C/O DHL Solutions ZA du Pont Yblon 95500 Bonneuil en France + +And; + +any Item from the List A of the Exhibit 6 ("LRUs covered by repair and standard exchange services") as relevant in accordance with Exhibit 9 ("Spare parts standard exchange Service") and Exhibit 10 ("LRUs repair Service"), [*****] and Packed at the following address: + +ATR Customer Support C/O DHL Solutions ZA du Pont Yblon 95500 Bonneuil en France + +And: + +any Item from the List B of the Exhibit 6 ("LRUs covered by repair and standard exchange services") as relevant in accordance with 9 ("Spare parts standard exchange Service") and 10 ("LRUs repair Service"), [*****] and Packed at the following address: + +Helibras - Helicópteros do Brasil - Air Bus Helicopters Rodovia Dom Pedro I - Km 87 - Pista Norte Condomínio Barão de Mauá - Atibaia - São Paulo + +or at any other address the Repairer may from time to time notify to the Company. 6.2.2 Intentionally left blank 6.3 Nota fiscal reporting + +Regarding the Items flow between the Stock and the Pool and vice et versa, as set forth under Clause 6 hereof, the Parties shall have the following obligations: - From Stock to Pool: the Company shall issue in due time any necessary document or required by the Repairer, including the "NotaFiscal" which shall comprise full, accurate [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 19/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED and complete information (as further detailed here below) and be in a form and substance compliant with applicable laws and regulations. + + + +- From Pool to Stock: subject to receipt from the Company of any necessary document or required by the Repairer as set forth here above, as relevant, the Repairer shall issue or have issued by third party in due time any necessary document or required by the Company in the frame of the Services, including the "Nota Fiscal" which shall comprise full, accurate and complete information (as further detailed here below) and be in a form and substance compliant with applicable laws and regulations. In addition, the Repairer shall provide or have provided by third party, a weekly reporting to the Company regarding the traceability of the Items and promptly answer to any request from the Company related thereto, in a form and substance in accordance with the form attached in Exhibit 18 ("Nota fiscal reporting"). + +For the avoidance of doubt, each "Nota Fiscal" shall be established in compliance with the relevant CFOP code according to the latest revision of SINIEF (Sistema Nacional Integrado de Informações Econômico-Fiscais), the current version is 07/01, which shall notably comprise the following element: - Seller of the goods: Name, address, contact information, Federal registration number, State Registration number - Acquirer of the goods: Name, address, contact information, Federal registration number, State Registration number - Transaction: type of transaction, nature of the transaction, transaction code, date of the transaction - Product: description, code, quantity, value, serial number of the relevant Item - Taxes : calculation basis, tax rate - Other information: freight, insurance, other costs - Additional information: in case of special taxation" + + 7. WORK ORDERS + +During the Term, the Company shall use the appropriate Work Order form (Exhibit 7 "Repairer Standard Work Order Forms"), depending on the nature of the Service requested, and send the Work Order to the Repairer according to the notice details below or any other contact the Repairer may from time to time notify to the Company. For any Services ATR SPARES DISTRIBUTION DESK requested in standard Tel: (33) 5 62 21 60 80 conditions (including Fax: (33) 5 62 21 62 80 routine and critical): e-mail: spares.orders@atr.fr + + For any Services A.O.G. DESK: requested in AOG Tel: (33) 5 62 21 62 00 conditions: Fax: (33) 5 62 21 62 62 e-mail: aog.toulouse@atr.fr 8. INSURANCES + +8.1 Without prejudice to any term and condition under this Agreement, the Company shall maintain in force, at all times during the Term and [*****], at its own costs and expenses, with insurers of internationally recognized [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 20/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED reputation reasonably acceptable to the Repairer, insurances in accordance with industry standards with respect to the undertakings of the Company in Clause 15 ("Liability and Indemnity") of this Agreement including: (i) Aircraft Hull and Spares All Risks Insurances (including, to the extent usually available war and allied perils); and, + + (ii) Comprehensive General Third Party Legal Liability and Aircraft Passengers and Third Party Legal Liability Insurance in respect of incidents involving Aircraft to the extent usually available, having a Combined Single Limit of not less than [*****] any one occurrence; and, (iii) Employer's liability insurance; and, (iv) Repairer's values to be insured, including: - Lease of Stock (Exhibit 8 Clause 2.2) and Advanced Pool Service (Exhibit 15): the Items of the Stock shall be insured by theCompany under Spares All Risk Insurance for not less than the full replacement value; and, + + + +- Main Elements Service (Exhibit 11): each Spare Main Element to be delivered by the Repairer to the Company shall be insured by the Company, for not less than its full replacement value, under the Hull Insurance when installed on the Aircraft in addition to the agreed value of such Aircraft and under the Spares All Risk Insurance while in Stock prior to attachment or following removal and replacement from the Aircraft, including transportation to and from the Company. 8.2 In respect of Hull and Spares All Risk Insurances, the Repairer shall be named as additional insured and loss payee for their respective rights and interests, to the extent required under Clause 15 ("Liability and Indemnity") of this Agreement. 8.3 In respect of Liability Insurance, the Repairer shall be named as additional insured and loss payee, as relevant, to the extent required under Clause 15 ("Liability and Indemnity"), with severability of interest and confirmation that the Company policy shall be primary without right of contribution. 8.4 In respect of all of the above insurances to contain breach or warranty provisions and confirmation the policies shall not be cancelled or materially changed without [*****] prior written notice [*****] or such lesser period in respect of War and Allied Peril). 8.5 Any applicable deductible shall be borne by the Company with respect to the above insurances. 8.6 At the latest upon the Signing Date, the Company shall provide the Repairer with relevant insurance certificates, in English, evidencing insurance requirements of this Clause 8, in a form reasonably acceptable to the Repairer, to be attached to this Agreement in the Exhibit 17 ("Insurance certificates"). + +Upon each renewal of the relevant insurance policies, the Company shall on reasonable request provide the Repairer with relevant insurance certificates in order to evidence insurance is maintained in accordance with this Clause 8. The Company also agrees to promptly pay each premium in respect of the aforesaid insurances and in the event of its failure to take out or maintain any such insurance then, without prejudice to any other rights it may have in respect of such failure, the Repairer may do so in its place and recover the cost [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 21/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED of doing so from the Company. + +8.7 The Repairer shall at its own expense procure and maintain in force, with insurers of internationally recognized reputation acceptable to the Company an Aviation Liability insurance which should include: + + (i) Aviation Products Liability insurance: the Repairer shall maintain or shall cause its Subcontractors to maintain a Products Liability Insurance during the performance of the Services up to an amount not less than [*****] per occurrence and in the annual aggregate; and, (ii) Hangar Keeper Liability insurance: the Repairer shall maintain or shall cause its Subcontractors to maintain during the performance ofthe Services an Hangar Keeper Liability Insurance in an amount of not less than [*****] any one occurrence. + +The Repairer shall, at the latest upon the Signing Date, provide the Company with evidence of the insurance maintained in accordance with this Clause 8.7. + + 9. WARRANTIES + +Upon Delivery, and subject to the terms of this Agreement, including the disclaimers and limitations on liability set forth in such warranties and in Clause 14 ("Disclaimer") of this Agreement, the Company shall be entitled to the benefit of the following warranties: i) For new LRUs or Main Elements, the terms and conditions set into the related Vendor Warranty Manual and in ATR72-600 Aircraft inthe relevant clauses of the relevant Aircraft sale and purchase agreement, shall apply. + + ii) For used LRUs and Main Elements repaired and overhauled by the Repairer, the warranty period shall start on the date of Delivery and shall end [*****] thereafter, whichever occurs the earliest, and such warranty shall be subject to the exclusions of warranty set forth in Exhibit 10 ("LRUs Repair Service") and in Exhibit 11 ("Main Elements Services"). + + 10. PRICES + +The Company shall pay to the Repairer the prices for the Services set out in Exhibit 14 ("Price conditions"). + + 11. RECONCILIATION + +11.1 Reconciliation: Every [*****] as from the Start Date and throughout the Term, the Parties will record the actual number of FH and Cycles [*****] of the preceding [*****] period, in order to reconcile (i) the amount effectively due to the Repairer with (ii) the total amount already paid by the Company , as relevant, as per Clause 12.1 (ii) hereafter, with respect of such period, as follows: (i) In case the amount effectively due to the Repairer with respect of the number [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 22/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED of FH and Cycles accumulated during the considered [*****] period is higher than the total amount already paid by the Company for the said period, the Repairer shall then issue an additional invoice in an amount equal to the difference between these amounts, to be paid by the Company as per Clause 12 ("Invoicing and payment terms"); or, + + (ii) In case the amount effectively due to the Repairer with respect of the number of FH and Cycles accumulated during the considered [*****] period is lower than the total amount already paid by the Company for said period, the Repairer shall issue a credit in an amount equal to the difference between these amounts; and/or, + + (iii) In case MRR is above RRR, the Repairer shall invoice an amount equal to the price set out in Clauses 2.2 and 3 of the Exhibit 14 ("Price conditions"), multiplied by the Aircraft fleet FH accrued during the [*****] reference period, multiplied by the difference between the MRR and the RRR; or, + + (iv) In case MRR is less than RRR, the Repairer shall issue a credit in an amount equal to the price set out in Clauses 2.2 and 3 of the Exhibit 14 ("Price conditions"), multiplied by the Aircraft fleet FH accrued during the [*****] reference period, multiplied by the difference between the RRR and the MRR, with a maximum allowed difference of [*****]. + +Each reconciliation shall be independent and shall have no impact on any subsequent reconciliation and/or invoicing. 11.2 Final reconciliation: within [*****] as from the End Date and without prejudice to Clause 6 of Exhibit 14 ("Price conditions") when applicable, a final reconciliation shall be performed by the Repairer as per this Clause 11 ("Reconciliation"). + +Any Credit Note resulting from this final reconciliation and due by the Repairer to the Company shall be issued within [*****] as from the effective End Date, subject to Clause 11.3 of this Agreement. 11.3 Each time a Credit Note results from any reconciliation, the Repairer shall issue such Credit Note to the Company, provided that the Company, is not in Default. + + 12. INVOICING AND PAYMENT TERMS + +12.1 The Repairer shall invoice the Company: (i) [*****] (ii) [*****] [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 23/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED [*****] [*****] [*****] [*****] [*****] [*****] [*****] [*****] [*****] [*****] [*****] [*****] [*****] (iii) [*****] (iv) [*****] (v) [*****] (vi) [*****] (vii) [*****] [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 24/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED + + (viii) [*****] (ix) [*****] (x) [*****] (xi) [*****] 12.2 Unless otherwise set out herein, the Company shall pay all invoices issued by the Repairer pursuant to this Agreement, as follows: (i) within thirty (30) Days from the date of issuance of the Repairer's invoice; and, (ii) in US Dollars; and, (iii) by SWIFT wire transfer; and, (iv) to the following bank account : + +NATIXIS PARIS 30 Avenue Pierre Mendès-France - 75013 PARIS - FRANCE Bank Code: [*****] Branch Code: [*****] Beneficiary: Avions de Transport Régional G.I.E. Bank Account: [*****] Key: [*****] IBAN Code: [*****] + +or such other account as the Repairer may from time to time notify to the Company. + +For the sake of clarity, the Repairer shall issue any invoice at least ten (10) Days before the first Day of the Month of reference for the Services. 12.3 Payments due to the Repairer herein shall be made in full, without set-off, counterclaim, deduction or withholding of any kind. Consequently, the Company shall procure that the sums received by the Repairer under this Agreement shall be equal to the full amounts expressed to be due to the Repairer herein, without deduction or withholding on account of and free from any and all Taxes (including all applicable sales, use, transfer and value added taxes and any tax required to be deducted or paid under the Laws of the country the Services are provided in respect of amounts paid by the Company to the Repairer), levies, imposts, dues or charges of whatever nature. 12.4 If any payment due to the Repairer (the "Unpaid Amount") remains unpaid after the date on which it is payable (the "Due Date"), without prejudice to any other rights or remedies that it may have at Law and/or under this Agreement, the Repairer shall be entitled to charge interests on such overdue sum from the Due Date until the actual date of payment of such sum at a rate per annum equal to the aggregate of [*****], such interest being calculated on a monthly basis. In any case, such interest rate shall not be lower than the highest of the three (3) following rates: [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 25/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED + + (i) [*****] (ii) [*****] (iii) [*****] + +In addition to the foregoing, and in compliance with Article L441-6 of the French Commercial Code, the Company shall pay a minimum fixed sum of forty (40) euros for compensation of recovery costs and reimburse all costs and expenses (including legal costs) incurred by the Repairer in the collection of any Unpaid Amount. 12.5 Invoice dispute: any invoice disputed by the Company shall have to be issued by Notice duly documented to the Repairer within [*****] from the date of its issuance. For the sake of clarity, the undisputed portion of such invoice shall be paid pursuant to this Agreement. Any invoice not disputed by the Company within said [*****] period, shall be deemed to be accepted by the Company. + + 13. SECURITY DEPOSIT + +13.1 As per provisions of Clause 17 ("Conditions precedent"), and unless otherwise agreed by the Parties, the Company shall pay the Security Deposit to the Repairer in an amount equal to the aggregate of: (i) [*****], as per Exhibit 14 ("Price conditions"); and, (ii) [*****] of the value of the Stock. + +For the sake of clarity, the global amount of Security Deposit payable at the time of the Signing Date shall be [*****]. 13.2 Such Security Deposit shall be constituted either, as follows, at the option of the Company: (i) a cash deposit by SWIFT wire transfer to the bank account indicated in Clause 12.2 (iv); or, + + (ii) one (1) LOC with a validity of at least [*****], acceptable to the Repairer acting reasonably. Such LOC shall be renewed and its confirmation extended, at the latest [*****] before the expiry of each previous LOC; all costs incurred as a result of the issuance and confirmation of the LOC shall be borne by the Company. + +It is agreed that the Security Deposit must be available for the period ending [*****] after the Term; such Security Deposit shall be the property of the Repairer and shall be non-refundable except as set out in this Agreement. + +Provided the Company is not in Default under this Agreement and/or any other agreement entered into between the Parties and subject to the prior written approval of the Repairer, the Company shall be entitled to substitute the LOC by a cash deposit, and vice et versa, subject to the terms of this Clause 13. 13.3 In the event that the LOC is not renewed or extended as per the terms of Clause 13.2 here above, the cash deposit shall become immediately due and payable and the Repairer shall be entitled to draw such LOC, in order for the Repairer to receive an amount equal to the Security Deposit. [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 26/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED 13.4 If, during the Term, the Company is in Default under this Agreement or under any other agreement entered into between the Repairer and the Company, and without prejudice to any rights and remedies available at Law and/or under this Agreement, the Repairer shall be entitled to forthwith use, apply or retain all or any portion of the Security Deposit, in order to remedy such Default, including the failure to pay any due sums, the compensation or otherwise reimbursement of any sums which the Repairer may in its discretion advance or expend as a result of said failure. + +If the Repairer so uses, applies or retains all or any portion of the Security Deposit, such use, application or retention shall not be deemed a cure or waiver of its rights hereunder and/or at Law as a consequence of any such Default, unless such use, application or retention has discharged in full the relevant sums then due and owed to the Repairer by the Company, and the Company shall voluntarily or promptly upon written demand provide to the Repairer additional security in an amount sufficient to restore the Security Deposit. 13.5 At the maximum at the end of the period of [*****] following the Term, (or such early date as the Company has made all payments due hereunder at the Repairer satisfaction), and provided that the Company is not in Default under this Agreement or any other agreement entered into between the Parties, the Repairer shall pay to the Company an amount equal to the balance of the Security Deposit, if any. + + 14. DISCLAIMER + +TO THE EXTENT PERMITTED BY LAW, THE TERMS AND CONDITIONS SET OUT IN THIS AGREEMENT SET OUT THE REPAIRER'S ENTIRE LIABILITY WITH RESPECT TO ALL GOODS AND SERVICES SUPPLIED HEREUNDER AND THE COMPANY AGREES THAT ALL OTHER CONDITIONS, WARRANTIES AND TERMS EXPRESSED OR IMPLIED BY LAW, STATUTE OR OTHERWISE, ARE HEREBY EXPRESSLY EXCLUDED. + + 15. LIABILITY AND INDEMNITY + +15.1 SUBJECT TO CLAUSE 15.2 BELOW, THE REPAIRER, SHALL NOT BE LIABLE TO THE COMPANY FOR ANY OF THE FOLLOWING TYPES OF LOSS OR DAMAGE ARISING UNDER OR IN RELATION TO THIS AGREEMENT (WHETHER ARISING FOR BREACH OF CONTRACT, TORT (INCLUDING NEGLIGENCE), BREACH OF STATUTORY DUTY, MISREPRESENTATION OR OTHERWISE): + +[*****] + +[*****] 15.2 NOTHING IN THIS AGREEMENT SHALL EXCLUDE OR RESTRICT ANY LIABILITY [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 27/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED OF THE REPAIRER FOR DEATH OR PERSONAL INJURY ARISING OUT OF NEGLIGENCE OR MISCONDUCT,, OR FOR ANY OTHER LIABILITY WHICH CANNOT BE EXCLUDED OR LIMITED BY LAW. 15.3 WITHOUT PREJUDICE TO CLAUSES 15.1 AND 15.2, THE COMPANY SHALL, EXCEPT IN CASE OF GROSS NEGLIGENCE OR WILFUL MISCONDUCT OF THE REPAIRER, BE LIABLE FOR AND SHALL INDEMNIFY AND HOLD HARMLESS THE REPAIRER INDEMNIFIED PARTIES FROM AND AGAINST ALL LIABILITIES, CLAIMS, DAMAGES, LOSSES, SUITS, ACTIONS, PROCEEDINGS, JUDGEMENTS, COSTS AND EXPENSES INCIDENT THERETO (INCLUDING LEGAL EXPENSES AND ATTORNEY FEES INCIDENT THERETO OR INCIDENT TO SUCCESSFULLY ESTABLISHING THE RIGHT TO INDEMNIFICATION), FOR INJURY TO OR DEATH OF ANY PERSON AND/OR FOR LOSS OF OR DAMAGE TO ANY PROPERTY AND/OR FOR LOSS OF USE THEREOF ARISING (INCLUDING THE AIRCRAFT), CAUSED BY OR IN ANY WAY CONNECTED TO THE PERFORMANCE OF THIS AGREEMENT. + + 16. TERMINATION + +16.1 Termination events: without prejudice to any other rights under this Agreement and/or at Law, either Party shall be entitled to terminate all or part of this Agreement by Notice of termination, as per Clauses 16.4 ("Termination procedure") and 16.6 ("Consequences of termination"), in the following events: + + + +a) Insolvency: the other Party becomes insolvent or goes into liquidation or ceases paying its debts as they fall due or makes an assignment for the benefit of creditors or if such Party being a limited Company passes a resolution for its winding up or if a petition for its winding up is presented or it files for protection from its creditors under any applicable Law relating to bankruptcy or insolvency or any analogous event in any jurisdiction shall take place; and/or b) Default: the other Party is in Default and does not remedy the same within [*****], or such extended period granted by the non-defaulting Party, from Notice of default specifying the failure and requiring the remedy of such, from the non-defaulting Party. + +For the purpose of this Clause 16.1.b), will be deemed as material obligations under this Agreement, without the following being exhaustive: (i) the compliance by the Company with any of its payment obligations; (ii) the compliance by the Company with the provisions of Clause 17 ("Conditions precedent") of this Agreement; (iii) the operation by the Company of at least one (1) Aircraft; + + (iv) the use by the Company of any Item, delivered by the Repairer to the Company pursuant to Exhibits 8 ("Lease of the Stock"), 9 ("Spare parts standard exchange Service"), 10 ("LRU repair Service"), 11 ("Main Elements Services") and 15 ("Advanced Pool Stock") exclusively on Aircraft and to benefit of the Parties; (v) the return by the Company to the Repairer of any unserviceable Item which should be exclusively removed from an Aircraft; (vi) the compliance by the Repairer with its Delivery obligations; (vii) the compliance by the Parties with any of the insurance obligations as per Clause 8 ("Insurances") of this Agreement; (viii) the compliance by either Party with any other of its obligations which by its [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 28/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED nature and/or context is intended to be material. c) Excusable Delay: an Excusable Delay event lasting for more than [*****] in accordance with Clause 4.5 of this Agreement. 16.2 Left intentionally blank 16.3 Suspension procedure: notwithstanding the terms of Clause 16.4 below, in the event of a Company's Default as per Clause 16.1.b), the Repairer shall be entitled to suspend all or part of this Agreement by way of Notice of suspension which shall specify: (i) the Services for which such suspension shall be immediately effective until such Company's Default is corrected; and (ii) that any pending Work Order and/or placed as from the Notice of suspension will be provided upon specific commercial proposalsubject to "Payment In Advance" procedure (and/or any additional conditions to be agreed upon by the Parties, as relevant). + +For the sake of clarity, such Notice of suspension shall not be construed as a waiver by the Repairer of its rights regarding (i) the obligation of the Company to perform each and every of its obligations under this Agreement and/or (ii) the right of the Repairer to enforce each and every of such Company's obligations and/or (iii) the right of the Repairer to terminate this Agreement, as per this Clause 16 ("Termination") of this Agreement. 16.4 Termination procedure: to the fullest extent permitted by Law and/or under this Agreement, the termination of all or part of this Agreement, for any reason whatsoever, as per Clauses 3 ("Duration and renewal") and 16 ("Termination"), shall become effective as from the receipt by the relevant Party of a Notice of termination from the other Party, or any other period to be granted by such other Party, without it being necessary to take any further action or to seek any consent from the relevant Party or any court having jurisdiction. + +The right of a Party to terminate all or part of this Agreement as per this Clause 16 shall be without prejudice to its other rights and remedies available at Law and/or under this Agreement to seek termination of all or part of this Agreement before any court having jurisdiction, following arbitration proceedings consistent with Clause 24 ("Governing law and arbitration") of this Agreement. + +In case of termination of part of this Agreement, the Notice of termination shall specify the Services that shall be terminated on the date of such termination. + +Any Work Order placed prior to the termination of all or part of this Agreement shall remain valid, provided that (i) any sum due by the Company to the Repairer under the Agreement and/or any other agreement between (i) the Repairer and (ii) the Company has been paid and (ii) when applicable, the Company having paid in advance the relevant Work Order price. + +In the cases set forth within Clause 16.1.b) above, the non-defaulting Party shall be entitled to proceed by appropriate court action or actions, following arbitration proceedings consistent with Clause 24 ("Governing law and arbitration") of this Agreement., to enforce performance of this Agreement, and/or to recover damages, without incurring any liability whatsoever and without prejudice to any other rights it may have at Law and/or under this Agreement, and specifically its right to terminate all or part of this Agreement. 16.5 Early termination fee: subject to not being in breach of any of its obligation under the Agreement, the Company may terminate this Agreement for convenience by way of Notice of termination; the Agreement shall be then terminated following a [*****] period as from [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 29/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED the receipt of such Notice by the Repairer or any other lesser period to be granted by the Repairer. + +Notwithstanding this Clause 16 ("Termination"), upon receipt of such Notice of termination and without prejudice to any rights it may have at Law, the Repairer shall invoice to the Company an early termination fee equivalent to [*****], which shall be paid within [*****] as from the issuance date of the said invoice and/or set off against any outstanding or due payment to the Company, at the Repairer's discretion. + + 16.6 Consequences of termination + + 16.6.1 Upon the End Date and without prejudice to any right that either Party may have at Law and/or under this Agreement [notably as perClause 13 ("Security Deposit")], the termination and/or expiry of the Agreement shall have the following consequences: + + + +a) Payment and reimbursement: subject to the provision of reasonable documentary evidence, any outstanding and/or due amounts by either Party to the other Party under this Agreement shall be promptly paid, and any and all legal fees and out- of-pocket expenses of the Party which terminates this Agreement for the other Party's Default including stamp, documentary, registration or other like duties, taxes or any charges incurred and/or in connection with enforcing, perfecting, protecting or preserving (or attempting to enforce, perfect, protect or preserve) any of its rights, or in suing for or recovering any sum, under this Agreement shall be forthwith reimbursed; and/or, b) Return of the Items: the Repairer shall be entitled, in accordance with the terms and conditions of this Agreement, includingClause 6 ("Deliveries"), to: + + + +(i) direct the Company to forthwith return the Items (excluding the Stock which, for the sake of clarity, shall be treated as per terms and conditions of Clause 6 ("Return of the Stock") of the Exhibit 8 and Clause 7 ("Purchase or return of the Advanced Pool Stock) of the Exhibit 15 to the address hereafter and/or any other address the Repairer may notify from time to time to the Company: [*****] and/or; (ii) repossess the Items and the Company agrees that the Repairer may enter onto the Company's premises where suchItems may be located; and/or, (iii) carry out any work, repair, re-certification, overhaul or replacement required to put such Items in serviceablecondition. + +In any case under this Clause 16.6.1.b) ("Return of the Items"), the Company shall forthwith reimburse and pay any Loss incurred and/or suffered by the Repairer. c) Termination for Default: in addition to the provisions of Clause 16.6.1.a) and b) here above, the defaulting Party shallindemnify and/or pay any Loss the other Party may sustain and/or incur as a result of such Default. + + d) In addition to the provisions of Clause 16.6.1.a) and b) and 16.6.1.c) here above, in the event the Repairer terminates the Agreement further to the occurrence of the event set out in Clause 16.1.b) (iii), the Company shall indemnify and/or pay for any Loss the [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 30/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED Repairer may sustain and/or incur as a result of such termination 16.6.2 Mitigation + +In case of termination of all or part for any reason whatsoever and/or expiry of this Agreement, either Party shall use reasonable endeavours to mitigate its Loss (to the extent within its control to do so), but it shall not be obliged to consult with the other Party concerning any proposed course of action or to notify such other Party of the taking of any particular action. + + 17. CONDITIONS PRECEDENT + +The Repairer's obligations under this Agreement shall be subject to each of the following conditions precedent having been met (or expressly waived by the Repairer) to the Repairer's satisfaction at the latest the [*****] Day from the Signing Date: (ii) the Security Deposit being available as per Clause 13 ("Security Deposit");and, (iii) a statement signed by a duly authorized officer of AZUL recording the status (serial number, TSN, TSO, CSN, CSO, as applicable) ofeach Main Element as of the Signing Date; and, (iv) a fully executed original of this Agreement; (v) the phase-in as per Clause 5 of the Exhibit 14 ("Price conditions"). + + 18. EXPORT CONTROL + +The Company warrants that the Items, the Aircraft and Services shall be used for commercial purposes only, and shall be used and/or re- exported (where relevant) in compliance with all export control laws and regulations (hereinafter referred to as "Export Laws"), including those applicable to parts and components of the Items and the Aircraft. The Company acknowledges that the Repairer's obligations under this Agreement are subject to all such Export Laws, and that the Repairer shall in no event be liable in the event that the performance by the Repairer of any of its obligations under this Agreement is affected or impaired by Export Laws. + + 19. NOTICES + +No Notice shall be deemed to have been duly given by a Party to the other unless addressed as follows or to such other place or Person as the Parties may respectively designate in writing. + +The Repairer shall be addressed at: + +AVIONS DE TRANSPORT REGIONAL, G.I.E. 1, allée Pierre Nadot 31712 Blagnac CEDEX France + +Attention: Mr Cyril DUPUY + + E-mail: cyril.dupuy@atr.fr + +Fax +00 33 5 62 21 67 40 [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 31/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version The Company shall be addressed at: AZUL + + Avenida Marcos Penteado de Ulhoa Rodrigues, 939, Castello Branco Office - Park - Torre Jatobá - 9° andar - CEP 06460-040 - Alphaville Industrial, Barueri, SaoPaulo, Brazil Attention Evandro Braga de Oliveira- : Technical officer E-mail: evandro.oliveira@voeazul.com.br Fax 55 11 4134-9890 + + 20. CONFIDENTIALITY + +20.1 Confidentiality obligations + +Unless otherwise provided in this Agreement, any Confidential Information released by either of the Parties (the "Disclosing Party") to the other Party (the "Receiving Party") shall not be released in whole or in part to any third party. + +In particular, the Receiving Party undertakes: - to keep the Confidential Information strictly confidential, not to deliver, disclose or publish it to any third party including subsidiarycompanies and companies having an interest in its capital, except as otherwise agreed in writing by the Disclosing Party; + + - to use the Confidential Information solely for the purpose of this Agreement and except as otherwise expressly agreed in writing by theDisclosing Party, not to use the same or permit its use for any other purpose; + + + +- to disclose the Confidential Information only to those of its direct employees having a need to know such Confidential Information in order to make permitted use thereof, after having beforehand clearly informed such employees of the strictly confidential nature of the Confidential Information and caused them to observe said conditions of confidentiality. The Receiving Party shall be responsible for the correct performance of said obligations of confidentiality by its employees and shall keep up to date the list of its personnel, to whom Confidential Information is communicated, which list shall be made available to the Disclosing Party at its request; - not to duplicate the Confidential Information nor to copy or reproduce the same beyond the purpose of the Agreement; + + - not to disclose Confidential Information to any third party, unless such third party is acting at the instruction of the Receiving Party and such disclosure is reasonably necessary to accomplish the purpose of the Agreement, provided however, that prior to any such disclosure both of the following conditions are satisfied: + + (i) each of such third parties, shall have signed an acknowledgement to keep such Confidential Information as strictly confidential;and, + + (ii) the Receiving Party shall have obtained written prior approval of the Disclosing Party of such proposed disclosure, whichapproval may be not unreasonably withheld or delayed. + + - promptly notify the Disclosing Party if a disclosure of Confidential Information is required by a Government Entity or by Law and to useall reasonable effort to assist the Disclosing Party in limiting such disclosure to the extent permitted by Law; + + - upon discovery of any disclosure of Confidential Information, regardless of whether such discovery is intentional or inadvertent, the Receiving Party shall promptly notify the Disclosing Party and take all reasonable actions (i) to retrieve the disclosed Confidential Information, (ii) to destroy any unauthorized copies thereof and (iii) to AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 32/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version stop further disclosure. 20.2 Non application of confidentiality obligations + +The obligations of Receiving Party with respect to Confidential Information as set forth in this Clause 20.1 above shall not be applicable to information which: (a) upon the Signing Date was part of the public domain or became part of the public domain after the disclosure, other than by a violationof the Agreement or any other non-disclosure agreement or the applicable Law of any jurisdiction; or (b) was already lawfully known by the Receiving Party, as evidenced by written records bearing an unquestionable date, prior the SigningDate by the Disclosing Party and was unrestricted; or (c) was lawfully disclosed to the Receiving Party subsequently to the signature of the Agreement by a third party which had not receivedthe same directly or indirectly from the Disclosing Party and that such disclosure does not violate any non-disclosure agreement. 20.3 Permitted disclosure of Confidential Information + +Notwithstanding any provision to the contrary in the Agreement, the Receiving Party shall be entitled to disclose Confidential Information if required to do so: (a) by order of a court or government agency of competent jurisdiction; or (b) by any applicable Law, + +provided, however, that prior to making such disclosure, the Receiving Party shall if possible advise the Disclosing Party of the circumstances requiring such disclosure in order to afford the Disclosing Party sufficient advance notice to permit to raise any objections that it may deem appropriate. 20.4 Disclosing Party's proprietary rights + +Any Confidential Information shall remain the property of the Disclosing Party. The Agreement shall not be construed as granting or conferring to the Receiving Party, either expressly or by implication, any license or proprietary interest in or to any Confidential Information nor any right of use beyond the purpose of this Agreement. + +The Repairer, its Affiliates and/or its Subcontractors as applicable shall remain the exclusive owner of any intellectual property right related to the Services including: design of the LRUs, Main Elements, job cards, task cards, operating manual or industrial process, as relevant. No title to or other ownership interest in the Confidential Information is transferred except as specifically stated in the Agreement, and the Receiving Party hereby expressly disclaims any such rights or interests. + +The Receiving Party hereby acknowledges and recognises that Confidential Information is protected by copyright Laws and related international treaty provisions, as the case may be. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 33/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED 20.5 For the sake of clarity, and for the purpose of this Clause 20 and this Agreement, any of the receiving Party's Affiliates and their Subcontractors shall not be considered as third party and shall be entitled to have access to any Confidential Information disclosed by the disclosing Party in connection with this Agreement. 20.6 This Clause 20 shall survive termination or expiry of this Agreement for a period of five (5) years following such End Date. + + 21. TAXES + +The prices set out in this Agreement [*****] and the [*****] shall not be required to pay and the [*****] shall bear, any present or future Taxes in any country of the Delivery [*****] pursuant to the requirements of this Agreement including the following: i) Taxes levied on goods imported into or services to be delivered under this Agreement; and, ii) Taxes levied on materials, equipment, tools and documentation imported temporarily which are required for the performance of thisAgreement; and, iii) Taxes levied in Company's country for goods or services delivered by the Repairer to the Company; and, iv) Value added taxes, sales tax, services tax, or any similar taxes imposed in any country, on goods or services delivered to the Company. + +In the event any of the Items above are levied upon the [*****], the [*****] shall promptly issue a Notice to the [*****]. The [*****], within [*****] of receipt of such notification from the [*****] shall either cause the charge to be waived or pay the charges directly. For those Items above that the [*****] is required by Law to pay, the [*****] shall charge the [*****] and the [*****] shall reimburse the [*****] in an amount which leaves the [*****] in the same economic situation as if such payment of charges and reimbursement thereof had not been required. + +If the Company is required by Law to make a withholding of taxes on the payments due to the Repairer under this Agreement, the Company shall gross up the payment so that the payment received by the Repairer after such withholding tax shall be the same amount of the prices described herein. + +For sake of clarity, the Repairer shall bear income tax assessed on the Repairer's income and net profits in its country. + +For Items delivered by the Repairer to the Company, the final customs clearance on flow between any Repairer's Affiliate located abroad and warehouse located in Brazil, as notably set forth in Clause 6, shall be borne by the Company. Customs duties, IPI, ISS, ICMS and other similar taxes shall be paid by the Company. + +In addition, the Company shall provide the Repairer with the << import declarations >> pertaining to any import activities performed by the Company. + + 22. ASSIGNMENT + +There are no beneficiaries of this Agreement other than the Parties hereto and their Affiliates and Subcontractors to the extent provided herein. [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 34/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version This Agreement shall be binding on the successors and permitted assignees of the Parties hereto. + + + +a) This Agreement has been entered into between the Parties in consideration of and based on characteristics specific to the Parties. Consequently either this Agreement or any of the respective rights or obligations of the Parties hereunder may be assigned or otherwise transferred, in whole or in part, in any form whatsoever (including by way of change of Control), by either Party subject to the prior written consent of the other Party, which consent shall not be unreasonably withheld or delayed, and any attempt to do so without such consent shall be null and void. b) Notwithstanding the above: + + + +(i) the Parties may at any time assign or transfer all or part of its rights and obligations under this Agreement to any of its Affiliates provided that such assignment or transfer is previously notified to the other Party. In such event, any reference in this Agreement to the assigning Party shall be deemed to constitute a reference to the assignee with respect to the part of this Agreement that is assigned; and, + + (ii) nothing in this Agreement shall in any way restrict any change in shareholding or control of the Parties or its Affiliates or the Repairer's rights to delegate obligations of it hereunder to a Subcontractor. provided that, in such case, the Repairer will remain responsible for the provision of the Services in accordance with the terms of this Agreement. + +provided such assignment or transfer, change in shareholding or control has no material adverse effect on any of the Company's rights and obligations under this Agreement. + + 23. MISCELLANEOUS + +23.1 The time stipulated in this Agreement for all payments by the Company to the Repairer under this Agreement shall be of the essence. 23.2 Survival: notwithstanding anything to the contrary stated in this Agreement, no termination or expiry of this Agreement shall affect the following rights or obligations of any Party hereto: (a) with respect to any payment hereunder actually owed by either Party to the other under this Agreement prior to the End Date; and/or, + + (b) pursuant to Clauses 2 - "Definitions and interpretation", 4 - "Excusable Delay", 8 - "Insurances", 9 - "Warranties", 14 - "Disclaimer", 15 - "Liability and indemnity", 16 - "Termination", 20 - "Confidentiality", 23.2 - "Survival", 23.5 - "No waiver", 23.8 - "Severability", and 24 - "Governing law and arbitration"; and/or, (c) pursuant to any other provisions of this Agreement that, by their nature and context, are intended to survive termination of thisAgreement. 23.3 Representations: each Party represents to the other Party that: 23.3.1 It is a legal entity duly incorporated and validly existing under the laws of the jurisdiction indicated in this Agreement; AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 35/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED + + 23.3.2 The entering into and performance by it of its obligations in this Agreement are within its corporate powers and have been duly authorized by all necessary corporate action and are not in violation of any applicable Law or documents, and do not require the consent or approval of, or registration or filing with, any Government Entity other than those already obtained or effected; 23.3.3 The signatory executing this Agreement on such Party's behalf has been vested with the necessary authority and power to enterinto this Agreement on its behalf; 23.3.4 This Agreement constitutes the Parties' legal, valid and binding obligation; 23.3.5 Subject to Clause 20 ("Confidentiality"), it will furnish all information relating to the provisions of the Services hereunder reasonablyrequired by the other Party and/or any Government Entity; 23.4 Left intentionally blank 23.5 No waiver: the failure by either Party to enforce at any time any of the provisions of this Agreement, or to require at any time the performance by the other Party of any of the provisions hereof, shall not be construed to be a waiver of such provisions, nor in any way affect the validity of this Agreement or any part thereof, or the right of such Party thereafter to enforce each and every such provision. 23.6 Independent contractors: neither Party is the representative or agent of the other Party for the purposes of this Agreement and nothing herein shall be construed as authorizing either Party to act as the other Party's representative or agent. Notwithstanding any other provisions of this Agreement, this Agreement shall not be construed as a joint venture, partnership, agency, incorporation or business association. Each Party hereto shall remain an independent contractor. 23.7 Amendments: this Agreement shall only be varied or amended by a written document duly signed by duly authorized representatives of both Parties. Notwithstanding the foregoing, Exhibit 1 ("List of ATR aircraft covered under this Agreement") and the Pool may be amended from time to time by the Repairer by way of Notice sent to the Company, unless, for LRU's reference suppression/replacement, the Company does not agree the same by way of Notice within [*****] as from the receipt date of the said Notice from the Repairer, in compliance with this Agreement and provided that it has no material economic impact to the Company. 23.8 Severability: if any term or provision of this Agreement is determined to be invalid, illegal or incapable of being enforced by any rule of Law or public policy, all other terms and provisions hereof shall remain in full force and effect, and the Parties shall negotiate in good faith in order to modify this Agreement with a provision having substantially the same legal and commercial effect as the severed provision. 23.9 Entire Agreement: this Agreement constitutes the entire agreement between the Parties and supersedes and replaces all prior discussions, representations, understandings or agreements whether verbal or written, between the Parties hereto or their agents with respect to or in connection with the subject matter hereto, save and except for the provisions of any agreements which by their nature or wording are intended to remain in full force and effect (including pre-existing confidentiality or non-disclosure undertakings not otherwise covered herein). No other documents and agreements, including either Party's standard terms and conditions, whether existing or future, will apply between the Parties with respect to the subject matter of this [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 36/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version Agreement, unless where otherwise expressly provided for in this Agreement. + +Each Party acknowledges that, in entering into this Agreement, it has not relied on, and shall have no right or remedy (other than for breach of contract) in respect of any statement, representation, insurance or warranty (whether made negligently or innocently) other than as expressly set out in this Agreement. + +Nothing in this Clause shall limit or exclude any liability of either Party arising out of its pre-contract fraudulent misrepresentation or fraudulent concealment. 23.10Language: the Parties declare that they have requested and hereby confirm their express wish that this Agreement and any and all related documents be drawn up in the English language (or, if not in English, with a certified English translation). 23.11Costs and expenses: except where this Agreement provides otherwise, each Party shall pay its own costs relating to the negotiation, preparation, execution and implementation of this Agreement and of any document related hereto. 23.12Counterparts: this Agreement shall be signed in several counterparts, each of such counterparts so signed shall constitute an original, and all counterparts together shall constitute a single instrument. Any executed version delivered via facsimile transmission or electronic mail ("PDF" format) shall be binding to the same extent as an original. Any Party who delivers such an executed version agrees to subsequently deliver an original counterpart to any Party that requests it. 23.13Publicity and public announcements: the Parties shall not make public announcements, press releases and/or advertise on the signature and/or the existence of this Agreement (but not its contents) without the prior written consent of the other Party. + +The Repairer is entitled to use the Company's name and associated logos as a business reference for its marketing activities in relation with the Services, provided such use (i) has no adverse impact on, such as but not limited to, Company's reputation and image and (ii) complies with graphic design policy of the Company. 23.14Company's audited financial statements: during the Term of this Agreement, the Company undertakes to provide promptly the Repairer with (i) its audited financial statements and (ii) any other financial information it shall request, acting reasonably, for each relevant financial year. It is hereby agreed that any such information shall be prepared in accordance with the applicable accounting policies. 23.15For the sake of clarity and transparency, the Services to be provided under this Agreement by the Repairer will not involve the transfer of know-how to the Company by no means whatsoever. The Services shall be performed without the presence of any Company's technician and no technical report shall be delivered by the Repairer in connection therewith (except if expressly required by the Company, as foreseen on Clause 23.3.5). + + 24. GOVERNING LAW AND ARBITRATION + +24.1 Governing law: Pursuant to and in accordance with Section 5-1401 of the New York General Obligations Law, the Parties hereto agree that this Agreement in all respects, and any claim or cause of action based upon or arising out of this Agreement, or any dealing between the Parties AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 37/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED relating to the subject matter of this Agreement or the transactions contemplated hereby or the Company/Repairer relationship being established, shall be governed by, and construed in accordance with, the laws of the State of New York, U.S.A. as applied to contracts to be performed wholly within the State of New York (Exclusive of Section 7-101 of the New York General Obligations Law which is inapplicable to this Agreement). 24.2 Arbitration: in the event of a dispute arising out of or relating to this Agreement, including without limitation disputes regarding the existence, validity or termination of this Agreement (a "Dispute"), either Party may notify such Dispute to the other through service of a written notice (the "Notice of Dispute"). The Parties shall make their reasonable endeavours to settle the Dispute amicably by a committee composed of one (1) management representative of each Party (the "Representatives"). Such committee shall be created by the Parties within [*****] from the date of receipt of the Notice of Dispute. + + + +24.2.1 Subject to sub-Clause 24.2.5 below and in the event the Representatives (i) fail to create such committee or (ii) do not agree on an amicable settlement within [*****] from the date the committee referred to in this sub-Clause 24.2 has been created or such longer period as may be agreed upon in writing by the Representatives (the "Amicable Settlement Period"), the Dispute shall be exclusively and finally settled under the Rules and Conciliation of Arbitration of the International Chamber of Commerce (the "ICC") by an arbitral tribunal composed of three (3) arbitrators; each Party shall then appoint one (1) arbitrator within [*****] from the last day of the Amicable Settlement Period and the third arbitrator, who will act as President, will be appointed by the other two (2) arbitrators. In case the two (2) arbitrators appointed by the Parties do not agree on this choice with [*****] from the date the last arbitrator is appointed, the third arbitrator will be appointed by the ICC Court. + + 24.2.2 The arbitration, and any proceedings, and meetings incidental to or related to the arbitration process, shall take place in New York, U.S.A, and the language to be used in the arbitral proceedings shall be English; arbitral award shall be final and binding upon the Parties. + + + +24.2.3 The arbitration shall be kept confidential and the existence of the proceeding and any element of it shall not be disclosed to any third party. Any information relating to and/or documents generated for the purpose of or produced in the arbitration, including any awards, shall remain confidential between the Parties, the arbitrators and any other Person involved in the arbitration proceedings, except to the extent that disclosure may be required pursuant to any order of court or other competent authority or tribunal, or to protect or pursue a legal rights or to enforce or challenge an award in bona fide legal proceedings before a state court or other judicial authority. 24.2.4 During any period of negotiation or arbitration, the Parties shall continue to meet their respective obligations in accordance with theprovisions of the Agreement. 24.2.5 Notwithstanding any provision of this Clause 24.2 the Parties may, at any time, seek and decide to settle a Dispute either throughdirect negotiations or in accordance with the ICC rules in respect of the alternative dispute resolution. 24.3 Judgment upon any award may be entered in any court having jurisdiction or application may be made to the court for a judicial recognition of the award or an order of enforcement, as the case may be. 24.4 Recourse to jurisdictions is expressly excluded except as provided for in the ICC Rules of Conciliation and Arbitration concerning Conservatory and Interim measures. [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 38/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 39/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version EXECUTION PAGE + +This Agreement has been executed in two (2) original copies in the English language on the Signing Date. On behalf of: On behalf of: AZUL LINHAS AÉREAS BRASILEIRAS AVIONS DE TRANSPORT REGIONAL (Company) (Repairer) Signed by: /s/ Amir Nasruddin Signed by: /s/ Massimo Castorina Function: Attorney in fact Function: Vice-President Commercial Product Support & Services AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 40/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED EXHIBIT 1 - LIST OF ATR AIRCRAFT COVERED UNDER THIS AGREEMENT + +[*****] [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 41/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED [*****] + +This list may be amended from time to time by way of Notice sent to the Company by Repairer in order to cover any further ATR aircraft entering the Company's fleet, including the airframe, engines, propellers and landing gears and parts installed on the Aircraft, when solely operated by the Company. + +ALL ITEMS, PARTS, COMPONENTS, SERVICES, WARRANTIES AND GUARANTEES PROVIDED HEREUNDER ARE PROVIDED SUBJECT TO CLAUSE 14 OF THE AGREEMENT. [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 42/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED EXHIBIT 2 - LIST OF SERVICES PROVIDED UNDER THIS AGREEMENT + +The Repairer shall provide the Company with the following Services: + +[*****] + +ALL ITEMS, PARTS, COMPONENTS, SERVICES, WARRANTIES AND GUARANTEES PROVIDED HEREUNDER ARE PROVIDED SUBJECT TO CLAUSE 14 OF THE AGREEMENT. [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 43/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED EXHIBIT 3 - MAIN ELEMENTS COVERED UNDER THE AGREEMENT + +[*****] + +Part number of each assembly and subcomponent to be provided by the Company. + +ALL ITEMS, PARTS, COMPONENTS, SERVICES, WARRANTIES AND GUARANTEES PROVIDED HEREUNDER ARE PROVIDED SUBJECT TO CLAUSE 14 OF THE AGREEMENT. [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 44/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED EXHIBIT 4 - LIST OF LANDING GEAR ON CONDITION PARTS + +[*****] + +ALL ITEMS, PARTS, COMPONENTS, SERVICES, WARRANTIES AND GUARANTEES PROVIDED HEREUNDER ARE PROVIDED SUBJECT TO CLAUSE 14 OF THE AGREEMENT. [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 45/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED EXHIBIT 5 - STOCK + +The following Exhibit is composed of sixteen (16) pages, into which are listed [*****] part numbers. [*****] DESCRIPTION [*****] [*****] EXCHANGER-HEAT,DUAL [*****] [*****] CONDENSER [*****] [*****] COOLING UNIT [*****] [*****] VALVE-TURBINE INLET CONTROL [*****] [*****] FLIGHT DATA ACQUISITION UNIT [*****] [*****] FLIGHT GUIDANCE CONTROL PANEL [*****] [*****] AUTO PILOT SERVO-ACTUATOR [*****] [*****] AUTO PILOT CAPSTAN [*****] [*****] CVR-SOLID STATE [*****] [*****] CONTROL UNIT-CVR [*****] [*****] AUDIO CONTROL PANEL [*****] [*****] AMPLIFIER-PASSENGER ADDRESS [*****] [*****] STARTER GENERATOR-DC [*****] [*****] CONTROL UNIT-GENERATOR,AC [*****] [*****] CONTROL UNIT-BUS POWER,AC [*****] [*****] CONTACTOR-ACW [*****] [*****] ATTENDANT PANEL [*****] [*****] ATTENDANT PANEL [*****] [*****] ATTENDANT PANEL USB KEY [*****] [*****] HANDLE-ENG1 FIRE [*****] [*****] ROD-DYNAMOMETRIC,ROLL [*****] [*****] SWITCH UNIT-FLAP CONTROL [*****] [*****] ACTUATOR-ELEVATOR [*****] [*****] ACTUATOR-TRIM [*****] [*****] VALVE BLOCK-FLAP [*****] [*****] RESTRICTOR-FLAP VLV BLOCK FLOW, EXTN LINE [*****] [*****] ACTUATOR-STICK PUSHER [*****] [*****] VALVE BLOCK-SPOILER [*****] [*****] SHAKER-STICK [*****] [*****] ACTUATOR-SPOILER [*****] [*****] CABLE-TENSION REGULATOR [*****] [*****] COUPLING-REFUEL/DEFUEL [*****] [*****] CONTROLLER-HORN ANTI ICING [*****] [*****] RESISTOR-HORN ANTI ICING,LH ELEVATOR [*****] [*****] RESISTOR-HORN ANTI-ICING,RH ELEVATOR [*****] [*****] RESISTOR-HORN ANTI-ICING,RUDDER [*****] [*****] RESISTOR-HORN ANTI ICING,LH AILERON [*****] [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 46/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED [*****] DESCRIPTION [*****] [*****] RESISTOR-HORN ANTI ICING,RH AILERON [*****] [*****] VALVE-DE ICING DUAL DISTRIBUTOR [*****] [*****] PROBE-CCAS ALPHA [*****] [*****] ACCELEROMETER-THREE AXIS [*****] [*****] TRANSMITTER-POSITION SYNCHRO [*****] [*****] RESERVOIR-BRAKE [*****] [*****] CYLINDER-MASTER [*****] [*****] VALVE-SELECTOR,LG [*****] [*****] ACCUMULATOR-PARKING [*****] [*****] ABSORBER-SHOCK [*****] [*****] VALVE-PARKING [*****] [*****] VALVE-BRAKE [*****] [*****] VALVE-RELIEF,LOW PRESSURE [*****] [*****] VALVE-BRAKE [*****] [*****] VALVE-DIFFERENTIAL CONTROL [*****] [*****] SELECTOR [*****] BOX-UPLOCK [*****] [*****] FLUX VALVE [*****] [*****] VALVE-FEED STOP [*****] [*****] PUMP-PROPELLER FEATHERING [*****] [*****] PUSH-PULL CABLE-PROP CONDITION [*****] [*****] PUMP GOVERNOR-PROPELLER [*****] OVERSPEED [*****] [*****] EXCITER—IGNITION I.C. [*****] [*****] EJECTOR, FUEL WASTE [*****] [*****] SERVO VALVE [*****] [*****] FUEL PUMP [*****] [*****] PUSH-PULL CABLE-PROPELLER POWER [*****] [*****] ACTUATOR-OIL COOLER FLAP [*****] [*****] COOLER-OIL [*****] [*****] REFERENCE UNIT-ATTITUDE AND HEADING [*****] [*****] GROUND COOLING FAN [*****] [*****] SMOKE DETECTOR [*****] [*****] TOTAL [*****] [*****] [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 47/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED [*****] DESCRIPTION [*****] [*****] CONTROLLER-DIGITAL [*****] [*****] COOLING UNIT [*****] [*****] FAN-AIR EXTRACTION [*****] [*****] VALVE-ELECTROPNEUMATIC OUTFLOW [*****] [*****] VALVE-PACK FLOW CONTROL [*****] [*****] VALVE-PNEUMATIC OUTFLOW [*****] [*****] VALVE-SHUTOFF TURBOFAN [*****] [*****] VALVE-TRIM AIR [*****] [*****] VALVE-TURBINE INLET CONTROL [*****] [*****] COUPLER HF ANTENNA [*****] [*****] ECU-3000 [*****] [*****] HANDSET-CABIN ATTENDANT [*****] [*****] MANAGEMENT UNIT-ACARS [*****] [*****] TRANSCEIVER-HF [*****] [*****] VHF/COMM TRANSCEIVER [*****] [*****] VHF-4000-8,33 KHZ [*****] [*****] CONTROL UNIT-BUS POWER,DC [*****] [*****] CONTROL UNIT-GENERATOR,DC [*****] [*****] GENERATOR-AC [*****] [*****] SENSOR-HALL EFFECT [*****] [*****] STATIC INVERTER [*****] [*****] TRANSFORMER RECTIFIER UNIT [*****] [*****] TRANSMITTER-EMERGENCY LOCATOR [*****] [*****] DETECTOR UNIT [*****] [*****] HANDLE-ENG2 FIRE [*****] [*****] ACTUATOR-FLAP [*****] [*****] DAMPER-RUDDER [*****] [*****] REFUEL CONTROL PANEL [*****] [*****] INDICATOR LEVEL SWITCH [*****] [*****] PUMP-ELECTRIC,AC [*****] [*****] DETECTOR-ICE [*****] [*****] VALVE-ANTI ICING PRESS REG AND [*****] SHUTOFF [*****] [*****] VALVE-ANTI ICING SHUTOFF [*****] [*****] VALVE-DE ICING DUAL DISTRIBUTOR [*****] [*****] CLOCK [*****] [*****] DIGITAL FLIGHT DATA RECORDER [*****] [*****] EFIS CONTROL PANEL LH SIDE [*****] [*****] EFIS CONTROL PANEL RH SIDE [*****] [*****] INDEX CONTROL PANEL [*****] [*****] INTEGRATED AVIONICS DISPLAY [*****] [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 48/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED [*****] DESCRIPTION [*****] [*****] MPC-ED36 [*****] [*****] MULTIFUNCTION COMPUTER [*****] [*****] MULTI-FUNCTION CONTROL PANEL [*****] [*****] MULTIPURPOSE CONTROL & DISPLAY UNIT [*****] [*****] SENSOR-WHEEL SPEED [*****] [*****] VALVE-DIFFERENTIAL CONTROL SELECTOR [*****] [*****] VALVE-SELECTOR,SWIVEL [*****] [*****] EMERGENCY LIGHTING POWER SUPPLY MODULE [*****] [*****] LIGHT-ANTICOLLISION,WHITE [*****] [*****] LIGHT-ANTI COLLISION,RED [*****] [*****] LIGHT-LANDING [*****] [*****] LIGHT-STROBE [*****] [*****] POWER SUPPLY-UNIT ANTI COLLISION LIGHT [*****] [*****] POWER SUPPLY-UNIT ANTI COLLISION LIGHT [*****] [*****] AIR DATA COMPUTER [*****] [*****] ATC TRANSPONDER [*****] [*****] ATTITUDE HEADING REF UNIT [*****] [*****] FLUX VALVE [*****] [*****] INTEGRATED ELEC STAND-BY EQUIP [*****] [*****] INTERROGATOR-DME [*****] [*****] NAVIGATOR PROCESSOR UNIT (GPS RECEIVER) [*****] [*****] PROBE-AIR TEMPERATURE [*****] [*****] PROBE-PITOT [*****] [*****] RADIO-ALTIMETER TRANSCEIVER [*****] [*****] RECEIVER-VOR/ILS/MKR [*****] [*****] T2CAS COMPUTER [*****] [*****] TRANSCEIVER-WEATHER RADAR [*****] [*****] VOR/ILS/MKR RECEIVER [*****] [*****] WX RADAR CONTROL PANEL [*****] [*****] TRANSMITTER/REGULATOR—OXYGEN PRESS [*****] [*****] DUCT-DISCHARGE DOWNSTREAM VALVE [*****] [*****] VALVE ASSY-SHUTOFF [*****] [*****] VALVE-XFEED,AIR BLEED [*****] [*****] CAC SWM [*****] [*****] CORE AVIONICS CABINET I/P O/P MODULE AP [*****] [*****] CORE AVIONICS CABINET I/P O/P MODULE-S [*****] [*****] CORE AVIONICS CABINET I/P O/P MODULE- DC [*****] [*****] INTEGRATED CORE PROCESSING [*****] MODULE [*****] [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 49/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED [*****] DESCRIPTION [*****] [*****] PROPELLER BLADES [*****] [*****] PROPELLER ASSEMBLY [*****] [*****] BRUSH BLOCK ASSY [*****] [*****] CONTROL ELECTRONIC-PROPELLER [*****] [*****] GOVERNOR-PROPELLER OVERSPEED [*****] [*****] MODULE VALVE PROPELLER [*****] [*****] SWITCH-PRESSURE,HYDRAULIC [*****] [*****] PIPE-EXHAUST [*****] [*****] TRANSMITTER-FUEL FLOW [*****] [*****] ENGINE ELECTRONIC CONTROL [*****] [*****] SENSOR TORQUE METER [*****] [*****] VALVE ASSY,INTERCOMPRESS BLEED [*****] [*****] VALVE INTERCOMPRESSOR BLEED [*****] MFC [*****] [*****] CONTROL,AUTOFEATHER [*****] [*****] COOLER - OIL [*****] [*****] FLOW DIVIDER & DUMP VALVE [*****] [*****] FUEL HEATER [*****] [*****] TOTAL [*****] [*****] [*****] DESCRIPTION [*****] [*****] COOLING UNIT [*****] [*****] EXCHANGER-HEAT,DUAL [*****] [*****] VALVE-PACK FLOW CONTROL [*****] [*****] VALVE-PNEUMATIC OUTFLOW [*****] [*****] VALVE-TRIM AIR [*****] [*****] VALVE-TURBINE INLET CONTROL [*****] [*****] AMPLIFIER-PASSENGER ADDRESS [*****] [*****] AUDIO CONTROL PANEL [*****] [*****] COUPLER HF ANTENNA [*****] [*****] CVR-SOLID STATE [*****] [*****] REMOTE CONTROL AUDIO UNIT [*****] [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 50/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED [*****] DESCRIPTION [*****] [*****] TRANSCEIVER-HF [*****] [*****] CONTROL UNIT-BUS POWER,AC [*****] [*****] CONTROL UNIT-BUS POWER,DC [*****] [*****] CONTROL UNIT-GENERATOR,AC [*****] [*****] CONTROL UNIT-GENERATOR,DC [*****] [*****] GENERATOR-AC [*****] [*****] INVERTER-STATIC [*****] [*****] SENSOR-HALL EFFECT [*****] [*****] STARTER GENERATOR-DC [*****] [*****] TRANSMITTER-EMERGENCY LOCATOR [*****] [*****] DETECTOR-SMOKE [*****] [*****] ACTUATOR-TRIM [*****] [*****] VALVE BLOCK-FLAP [*****] [*****] VALVE BLOCK-SPOILER [*****] [*****] PUMP-FUEL ELECTRIC [*****] [*****] PUMP-ELECTRIC,AUXILIARY,DC [*****] [*****] DETECTOR-ICE [*****] [*****] VALVE-DE ICING DUAL DISTRIBUTOR [*****] [*****] MULTIFUNCTION COMPUTER [*****] [*****] PROBE-CCAS ALPHA [*****] [*****] BOX-UPLOCK [*****] [*****] CONTROL UNIT-ANTISKID SYSTEM [*****] [*****] SENSOR-WHEEL SPEED [*****] [*****] VALVE-SELECTOR,SWIVEL [*****] [*****] EMERGENCY LIGHTING POWER SUPPLY MODULE [*****] [*****] LIGHT-ANTICOLLISION,WHITE [*****] [*****] LIGHT-LANDING [*****] [*****] LIGHT-STROBE [*****] [*****] POWER SUPPLY UNIT-STROBE LIGHT [*****] [*****] PROBE-PITOT [*****] [*****] TRANSMITTER/REGULATOR - OXYGEN PRESS [*****] [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 51/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED [*****] DESCRIPTION [*****] [*****] DUCT-DISCHARGE DOWNSTREAM VALVE [*****] [*****] VALVE ASSY-SHUTOFF [*****] [*****] VALVE-HP AIR BLEED [*****] [*****] VALVE-HP AIR BLEED [*****] [*****] VALVE-XFEED,AIR BLEED [*****] [*****] PUMP-PROPELLER FEATHERING [*****] [*****] SWITCH-PRESSURE,HYDRAULIC [*****] [*****] PIPE-EXHAUST [*****] [*****] TRANSMITTER-FUEL FLOW [*****] [*****] PUSH-PULL CABLE-PROPELLER POWER [*****] [*****] ACTUATOR-OIL COOLER FLAP [*****] [*****] COOLER-OIL [*****] [*****] BRAKE, PROPELLER [*****] [*****] EXCITER—IGNITION I.C. [*****] [*****] EJECTOR, FUEL WASTE [*****] [*****] COOLER - OIL [*****] [*****] SERVO VALVE [*****] [*****] VALVE INTERCOMPRESSOR BLEED [*****] [*****] FUEL HEATER [*****] [*****] FUEL PUMP [*****] [*****] TOTAL [*****] [*****] [*****] DESCRIPTION [*****] [*****] PROPELLER ASSY [*****] [*****] PROPELLER ASSY [*****] [*****] MULTIFONCTION COMPUTER [*****] [*****] PROPELLER ASSY [*****] [*****] MFC [*****] [*****] MFC [*****] [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 52/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED [*****] DESCRIPTION [*****] [*****] BRAKE, PROPELLER [*****] [*****] BRAKE, PROPELLER [*****] [*****] AIR DATA COMPUTER [*****] [*****] STARTER GENERATOR-DC [*****] [*****] BLADE PROPELLER [*****] [*****] TRANSCEIVER-TCAS [*****] [*****] BRAKE, PROPELLER [*****] [*****] BRAKE, PROPELLER [*****] [*****] MODULE VALVE PROPELLER [*****] [*****] MODULE VALVE PROPELLER [*****] [*****] ACTUATOR-NOSE [*****] [*****] FCU-HYDRO MECHANICAL [*****] [*****] ELECTRONIC ENGINE CONTROL UNIT [*****] [*****] COMPUTER-AFCS [*****] [*****] REMOTE CONTROL AUDIO UNIT [*****] [*****] REMOTE CONTROL AUDIO UNIT [*****] [*****] TRANSCEIVER-RADIO ALTIMETER [*****] [*****] GROUND PROXIMITY WARNING [*****] COMPUTER [*****] [*****] VALVE-HP AIR BLEED [*****] [*****] INDICATOR-VERTICAL SPEED [*****] [*****] GENERATOR-AC [*****] [*****] COOLER-OIL [*****] [*****] REMOTE CONTROL AUDIO UNIT [*****] [*****] VALVE-DIFFERENTIAL CONTROL [*****] SELECTOR [*****] [*****] VALVE INTERCOMPRESSOR BLEED [*****] [*****] FLIGHT DATA ACQUISITION UNIT [*****] [*****] FLIGHT DATA ACQUISITION UNIT [*****] [*****] FLIGHT DATA ACQUISITION UNIT [*****] [*****] ACTUATOR-MAIN [*****] [*****] ACTUATOR-MAIN RH [*****] [*****] ADVISORY DISPLAY UNIT-AFCS [*****] [*****] VALVE ASSY-P2.5,P3 AIR PRESS.VALVE [*****] [*****] CONDENSER [*****] [*****] TRANSFORMER RECTIFIER UNIT [*****] [*****] CONTROL,AUTOFEATHER [*****] [*****] VALVE BLOCK-FLAP [*****] [*****] VALVE BLOCK-FLAP [*****] [*****] FUEL HEATER [*****] [*****] ACTUATOR-MAIN [*****] [*****] PROBE-CCAS ALPHA [*****] [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 53/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED [*****] DESCRIPTION [*****] [*****] PROBE-CCAS ALPHA [*****] [*****] COUPLER-HF ANTENNA [*****] [*****] GOVERNOR-PROPELLER OVSP [*****] [*****] DUCT-DISCHARGE DOWNSTREAM VALVE [*****] [*****] CONTROLLER-DIGITAL [*****] [*****] RECEIVER-VOR/ILS/MKR [*****] [*****] FUEL PUMP [*****] [*****] VALVE-ELECTROPNEUMATIC OUTFLOW [*****] [*****] MOUNT ANTENNA-WEATHER RADAR [*****] [*****] PUMP, HYDRAULIC, OVSP GOV [*****] [*****] CONTROL ELECTRONIC-PROPELLER [*****] [*****] BOBBIN [*****] [*****] DATA COLLECTION UNIT [*****] [*****] PUMP-ELECTRIC,AC [*****] [*****] TRANSCEIVER-HF [*****] [*****] RESISTOR-HORN ANTI ICING,LH [*****] ELEVATOR [*****] [*****] RESISTOR-HORN ANTI-ICING,RH [*****] ELEVATOR [*****] [*****] ACTUATOR-CARGO DOOR [*****] [*****] INTERROGATOR-DME [*****] [*****] INDICATOR-CAB PRESS [*****] [*****] VALVE-ANTI ICING PRESS REGULATOR AND SHUTOFF [*****] [*****] VALVE-SELECTOR,SWIVEL [*****] [*****] SOLID STATE FLIGHT DATA RECORDER [*****] [*****] ANTENNA-TCAS [*****] [*****] CONTROL PANEL-AFCS [*****] [*****] PUMP-ELECTRIC,AUXILIARY,DC [*****] [*****] TRANSCEIVER-VHF [*****] [*****] ASSISTER-FREE FALL,MLG [*****] [*****] CONTROLLER-INSTRUMENT REMOTE [*****] [*****] COUPLER HF ANTENNA [*****] [*****] SEAT-DISABLED PASSENGER,RH [*****] [*****] SEAT-DISABLED PASSENGER,LH [*****] [*****] CONTROLLER-INSTRUMENT REMOTE [*****] [*****] DAMPER-RUDDER [*****] [*****] BAR ASSY-TORQUE [*****] [*****] HANDLE-ENG1 FIRE [*****] [*****] HANDLE-ENG2 FIRE [*****] [*****] INDICATOR-TAS/TEMP [*****] [*****] CONTROL PANEL-EFIS [*****] [*****] PROBE-AIR TEMPERATURE [*****] [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 54/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED [*****] DESCRIPTION [*****] [*****] SENSOR-HALL EFFECT [*****] [*****] HANDSET-CABIN ATTENDANT [*****] [*****] JOINT [*****] [*****] INDICATOR-FUEL FLOW/FUEL USED,KG [*****] [*****] CLOCK [*****] [*****] VALVE-SELECTOR,LG [*****] [*****] HOCKMOUNT-AFT LATERAL,RH [*****] [*****] EXCITER-IGNITION I.C. [*****] [*****] SENSOR TORQUE METER [*****] [*****] SENSOR TORQUE METER [*****] [*****] INDICATOR-FUEL QUANTITY,KG [*****] [*****] INDICATOR-FUEL QUANTITY,KG [*****] [*****] VALVE-DE ICING DUAL DISTRIBUTOR [*****] [*****] MASK ASSY-REGULATOR,OXYGEN [*****] [*****] CONTROL BOX-WEATHER RADAR [*****] [*****] DETECTOR UNIT [*****] [*****] TRANSCEIVER-VHF [*****] [*****] VALVE-DE ICING DUAL DISTRIBUTOR [*****] [*****] BATTERY-MAIN [*****] [*****] ACCELEROMETER-THREE AXIS [*****] [*****] PUMP-PROPELLER FEATHERING [*****] [*****] MOTOR-WIPER,F/O [*****] [*****] MOTOR-WIPER,CAPTAIN [*****] [*****] INDICATOR-PRESSURE,TRIPLE [*****] [*****] ACTUATOR-UNLOCKING,MLG [*****] [*****] PANEL-ATTENDANT [*****] [*****] SENSOR, TORQUE MONITOR [*****] [*****] INDICATOR-ITT [*****] [*****] CONTROL UNIT-TCAS [*****] [*****] SWITCH-PROXIMITY [*****] [*****] SERVO VALVE [*****] [*****] SWITCH-PROXIMITY [*****] [*****] VALVE-REFUEL/DEFUEL [*****] [*****] SWITCH-OVERTEMPERATURE [*****] [*****] CYLINDER-MASTER [*****] [*****] INDICATOR-AIRSPEED,STANDBY [*****] [*****] COMPENSATOR-COLD JUNCTION [*****] [*****] COMPENSATOR-COLD JUNCTION [*****] [*****] TRANSMITTER-FUEL FLOW [*****] [*****] COMPENSATOR-COLD JUNCTION [*****] [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 55/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED [*****] DESCRIPTION [*****] [*****] TANK-FUEL DRAIN AND EJECTOR PUMP [*****] [*****] EJECTOR, FUEL WASTE [*****] [*****] SENSOR-WHEEL SPEED [*****] [*****] CONTROL UNIT-DUAL ATC [*****] [*****] LEVER-CONTROL,L/G [*****] [*****] CONTROL UNIT-OVEN [*****] [*****] INDICATOR-ITT [*****] [*****] CLOCK [*****] [*****] CLOCK [*****] [*****] CONTROL UNIT-VHF [*****] [*****] VALVE-FLUX [*****] [*****] LIGHT-STROBE [*****] [*****] CONTROL UNIT-VOR/ILS/DME [*****] [*****] CONTROL UNIT-ADF [*****] [*****] SWITCH-PRESSURE [*****] [*****] MASK ASSY-REGULATOR,OXYGEN [*****] [*****] FLOW DIVIDER & DUMP VALVE [*****] [*****] TRANSMITTER-EMERGENCY LOCATOR [*****] [*****] INDICATOR-OIL TEMP/PRESS [*****] [*****] VALVE-TWO WAY AND WATER DRAIN [*****] [*****] SWITCH-PROXIMITY [*****] [*****] CONTACTOR-ACW [*****] [*****] SWITCH-PROXIMITY [*****] [*****] ACTUATOR-OIL COOLER FLAP [*****] [*****] LIGHT-LANDING [*****] [*****] EMERGENCY LIGHTING POWER SUPPLY MODULE [*****] [*****] SWITCH-OVERTEMPERATURE [*****] [*****] SWITCH-PRESSURE,HYDRAULIC [*****] [*****] VALVE-CHECK [*****] [*****] PROBE-PITOT [*****] [*****] INDICATOR-FUEL TEMPERATURE [*****] [*****] ANTENNA-RADIO-ALTIMETER RECEPTION [*****] [*****] CONTROL UNIT-ATC [*****] [*****] CONTROL UNIT-VHF [*****] [*****] STATIC INVERTER [*****] [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 56/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED [*****] DESCRIPTION [*****] [*****] EXCHANGER-HEAT,DUAL [*****] [*****] TRANSCEIVER-TCAS [*****] [*****] PLAYER-CASSETTE [*****] [*****] CONTROLLER-WINDSHIELD TEMPERATURE [*****] [*****] FAN-GROUND COOLING [*****] [*****] FAN-RECIRCULATION [*****] [*****] TOTAL [*****] [*****] [*****] DESCRIPTION [*****] [*****] AUTO PILOT CAPSTAN [*****] [*****] AUTO PILOT SERVO-ACTUATOR [*****] [*****] FLIGHT GUIDANCE CONTROL PANEL [*****] [*****] VHF/COMM TRANSCEIVER [*****] [*****] POWER TRIM BOX [*****] [*****] CLOCK [*****] [*****] DIGITAL FLIGHT DATA RECORDER [*****] [*****] EFIS CONTROL PANEL LH SIDE [*****] [*****] EFIS CONTROL PANEL RH SIDE [*****] [*****] INDEX CONTROL PANEL [*****] [*****] INTEGRATED AVIONICS DISPLAY [*****] [*****] MPC-ED36 [*****] [*****] MULTI-FUNCTION CONTROL PANEL [*****] [*****] MULTIPURPOSE CONTROL & DISPLAY UNIT [*****] [*****] AIR DATA COMPUTER [*****] [*****] ATC TRANSPONDER [*****] [*****] ATTITUDE HEADING REF UNIT [*****] [*****] FLUX VALVE [*****] [*****] INTEGRATED ELEC.STAND-BY EQUIP [*****] [*****] INTERROGATOR-DME [*****] [*****] NAVIGATOR PROCESSOR UNIT (GPS RECEIVER) [*****] [*****] RADIO-ALTIMETER TRANSCEIVER [*****] [*****] RECEIVER-VOR/ILS/MKR [*****] [*****] T2CAS COMPUTER [*****] [*****] WX RADAR CONTROL PANEL [*****] [*****] CAC SWM [*****] [*****] CORE AVIONICS CABINET INPUT OUPUT MODULE AUTO PILOT [*****] [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 57/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED [*****] DESCRIPTION [*****] [*****] CORE AVIONICS CABINET INPUT OUPUT MODULE-DC [*****] [*****] CORE AVIONICS CABINET INPUT OUTPUT MODULE-S [*****] [*****] INTEGRATED CORE PROCESSING MODULE [*****] [*****] PRINTER [*****] [*****] ICP 110VM [*****] [*****] ICP 111VM [*****] [*****] ICP 111VM [*****] [*****] ICP 112VM [*****] [*****] ICP 114VM [*****] [*****] ICP 131VM [*****] [*****] ICP 131VM [*****] [*****] ICP 132VM [*****] [*****] ICP 400VM [*****] [*****] ICP 401VM [*****] [*****] ICP 402VM [*****] [*****] ICP 404VM [*****] [*****] ICP 6VM [*****] [*****] ICP 811VM [*****] [*****] CENTRAL MAIN INSTRUMENT [*****] [*****] PANEL LIGHT [*****] [*****] LIGHT MANAGEMENT UNIT [*****] [*****] TCAS DIRECTIONAL ANTENNA [*****] [*****] TOTAL [*****] [*****] [*****] DESCRIPTION [*****] [*****] T2CAS Computer [*****] [*****] T2CAS Computer [*****] [*****] TOTAL [*****] [*****] [*****] DESCRIPTION [*****] [*****] PROBE-PITOT [*****] [*****] EJECTION DUCT [*****] [*****] BUS POWER CONTROL UNIT [*****] [*****] BATTERY-EMERGENCY [*****] [*****] AFTER ROLLER BLIND [*****] [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 58/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED [*****] DESCRIPTION [*****] [*****] OXYGEN CYLINDER ASSY [*****] [*****] DIGITAL FLT DATA RECORDER [*****] [*****] ATTITUDE HEADING REF UNIT [*****] [*****] PCMCIA [*****] [*****] POWER SUPPLY UNIT [*****] [*****] FUSELAGE GROUND LIGHT [*****] [*****] EMERGENCY POWER SUPPLY [*****] [*****] INTERCOMPRESSOR BLEED VALVE [*****] [*****] BATTERY-MAIN [*****] [*****] MOTOR AND PUMP ASSEMBLY [*****] [*****] FIRE EXTINGUISHER [*****] [*****] TRIM INDICATOR [*****] [*****] AISLE MARKING EMERGENCY [*****] [*****] INTERTURBINE TEMP.INDICATOR [*****] [*****] INTERTURBINE TEMP.INDICATOR [*****] [*****] PROPELLER SPEED INDICATOR [*****] [*****] VHF/COMM TRANSCEIVER [*****] [*****] STANDBY ALTIMETER [*****] [*****] AIR DATA COMPUTER [*****] [*****] AIRSPEED INDICATOR [*****] [*****] REFUEL CONTROL PANEL [*****] [*****] ELECTRONIC ENGINE [*****] CONTROL [*****] [*****] VHF/COMM CONTROL PANEL [*****] [*****] T2CAS COMPUTER [*****] [*****] FWD SIDE LH ISOLATOR [*****] [*****] EFIS CONTROL PANEL RH [*****] [*****] EFIS CONTROL PANEL LH [*****] [*****] INDEX CONTROL PANEL [*****] [*****] INTEGRATED CORE PROCESSING MOD [*****] [*****] PROPELLER VALVE MODULE [*****] [*****] REMOTE CONTROL AUDIO UNIT [*****] [*****] REMOTE CONTROL AUDIO UNIT [*****] [*****] LP CHECK VALVE [*****] [*****] MPC [*****] [*****] EMERGENCY LOCATOR BEACON [*****] [*****] EMERGENCY POWER SUPPLY [*****] [*****] PRESSURE REG & S/O VALVE [*****] [*****] PRESSURE REG & S/O VALVE [*****] [*****] HALL EFFECT CURRENT [*****] [*****] TOTAL [*****] [*****] [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 59/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED [*****] DESCRIPTION [*****] [*****] TRIM ACTUATOR [*****] [*****] T.I.C. VALVE [*****] [*****] AIR CYCLE UNIT [*****] [*****] LP CHECK VALVE [*****] [*****] DUAL DISTRIBUTOR VALVE [*****] [*****] HALL EFFECT CURRENT [*****] [*****] DESCRIPTION [*****] [*****] AUTO PILOT SERVO-ACTUATOR [*****] [*****] EXCHANGER [*****] [*****] CHECK VALVE [*****] [*****] PRESSURE REG AND S/O VALVE [*****] [*****] PRESSURE REG AND S/O VALVE [*****] [*****] INTEGRATED CORE PROCESSING MOD [*****] [*****] TOTAL [*****] [*****] [*****] DESCRIPTION [*****] [*****] VALVE BLOCK-FLAP [*****] [*****] DUCT-DISCHARGE DOWNSTREAM VALVE [*****] [*****] DUCT-DISCHARGE DOWNSTREAM VALVE [*****] [*****] VALVE-SELECTOR,SWIVEL [*****] [*****] VALVE-SELECTOR,SWIVEL [*****] [*****] JOINT [*****] [*****] LIGHT-LANDING [*****] [*****] ICP 112VM [*****] [*****] ICP 114VM [*****] [*****] TCAS DIRECTIONAL ANTENNA [*****] [*****] TCAS DIRECTIONAL ANTENNA [*****] [*****] SERVO VALVE [*****] [*****] TOTAL [*****] [*****] [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 60/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED [*****] DESCRIPTION [*****] [*****] PROBE-PITOT [*****] + +ALL ITEMS, PARTS, COMPONENTS, SERVICES, WARRANTIES AND GUARANTEES PROVIDED HEREUNDER ARE PROVIDED SUBJECT TO CLAUSE 14 OF THE AGREEMENT. [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 61/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED EXHIBIT 6 - LRUs COVERED BY REPAIR AND STANDARD EXCHANGE SERVICES + +The following Exhibit is composed of eight (8) pages, into which are listed [*****] part numbers. 1. List A + +The following list of LRUs contains [*****] part numbers. [*****] Description [*****] WATER EXTRACTOR [*****] AIR CYCLE UNIT [*****] DIGITAL CONTROLLER [*****] CONDITIONED AIR CHECK VALVE [*****] REGULATOR-PRESSURE [*****] PRESSURE REG AND S/O VALVE [*****] BUTTERFLY MODULATING VALVE [*****] CHECK VALVE [*****] CHECK VALVE [*****] PRESSURIZATION INDICATOR [*****] DUAL TEMPERATURE INDICATOR [*****] CONTROLLER-TEMP [*****] OVERTEMP. SWITCH [*****] VLV-U/FLOOR ISOL/VEN [*****] CONDENSER [*****] CONTROLLER-MANUAL [*****] VLV-SHUTOFF TURBOFAN [*****] TEMPERATURE CONTROL VALVE [*****] RECIRCULATION FAN ASSY [*****] GROUND COOLING FAN [*****] E/E COOLING FAN [*****] AMBIANT PRESSURE UNIT [*****] UNDER FLOOR VALVE [*****] GND OUTFLOW VALVE [*****] ROD-DYNAMOMETRIC ELE [*****] ROD-DYNAMOMTRC RUDDR [*****] FORCE DETECTOR ROD [*****] ROD-DYNAMOMETRIC ELE [*****] AP.SERVO ACTUATOR [*****] ADVISORY DISPLAY [*****] AUTOPILOT COMPUTER [*****] AUTOPILOT COMPUTER [*****] AP/FD CONTROL PANEL [*****] FLIGHT GUIDANCE CONTROL PANEL [*****] FLIGHT GUIDANCE CONTROL PANEL [*****] FLIGHT GUIDANCE CONTROL PANEL [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 62/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED [*****] Description [*****] AUTO PILOT SERVO-ACTUATOR [*****] CAPSTAN [*****] DIGITAL PLAYER [*****] MONITOR [*****] COCKPIT VOICE RECORDER [*****] VHF/COMM TRANSCEIVER [*****] DUAL SYSTEM ADAPTER [*****] HF/COMM TRANSCEIVER [*****] AUTOMATIC ANTENNA COUPLER [*****] HF/COMM CONTROL PANEL [*****] AUTOMATIC ANTENNA COUPLER [*****] HF/COMM TRANSCEIVER [*****] VHF/COMM TRANSCEIVER [*****] VHF/COMM TRANSCEIVER [*****] VHF COMM TRANSCEIVER [*****] VHF-4000-8,33 KHZ [*****] VHF 4000 [*****] MANAGEMNT UNIT-ACARS [*****] VHF/COMM CONTROL PANEL [*****] VHF/COMM CONTROL PANEL [*****] ATTENDANT HANDSET [*****] ATTENDANT HANDSET [*****] ATTENDANT HANDSET [*****] SELECTION PNL-SELCAL [*****] REMOTE CONTROL AUDIO UNIT [*****] REMOTE CONTROL AUDIO UNIT [*****] REMOTE CONTROL AUDIO UNIT [*****] PASSENGER ADDRESS AMPLIFIER [*****] SELCAL DECODER [*****] STATIC INVERTER [*****] TRANSFORMER RECTIFIER UNIT [*****] GENERATOR CONTROL UNIT [*****] HALL EFFECT CURRENT [*****] CURRENT TRANSFORMER [*****] BATTERY CH/DISCH.AMMETER [*****] GENERATOR CONTROL UNIT [*****] ELEC.POWER MESURING ASSY [*****] BUS POWER CONTROL UNIT [*****] AC.CONTACTOR [*****] TRANSFORMER RECTIFIER UNIT [*****] DC CONTACTOR [*****] EMERGENCY LOCATOR BEACON [*****] TOILET-PSU [*****] EMERGENCY LOCATOR BEACON [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 63/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED [*****] Description [*****] LF.FIRE-SHUT-OFF CTL.PANEL [*****] RH.FIRE-SHUT-OFF CTL.PANEL [*****] FIRE DETECTION CONTROL UNIT [*****] FAN SMOKE DETECTION [*****] SMOKE DETECTOR [*****] DETECTION BOX [*****] CONTROL BOX [*****] SMOKE DETECTOR [*****] SMOKE DETECTOR [*****] POSITION TRANSMITTER [*****] RELEASABLE CENTRING UNIT [*****] CABLE TENSION REGULATOR [*****] FLAPS POSITION INDICATOR [*****] FLAPS POSITION INDICATOR [*****] TRIM INDICATOR [*****] TRIM INDICATOR [*****] SHAFT-FLEXIBLE [*****] FLAP CONTROL SWITCH UNIT [*****] ELECTROMECHANICAL ACTUATOR [*****] STICK PUSHER [*****] FLAP VALVE BLOCK [*****] SPOILER VALVE BLOCK [*****] ALPHA PROBE [*****] POWER TRIM BOX [*****] RUDDER DAMPER [*****] RESTRICTOR UNIT [*****] RESTRICTOR UNIT [*****] RUDDER DAMPER [*****] FLAP ACTUATOR [*****] FLAP ACTUATOR [*****] STICK SHAKER [*****] AILERON GUST-LOCK ACTUATOR [*****] SPOILER ACTUATOR [*****] FIRE SHUT-OFF VALVE [*****] CROSSFEED VALVE [*****] MOTIVE FLOW VALVE [*****] ACTUATOR-FUEL LP VLV [*****] ACTUATOR-FUEL CROSSF [*****] GRAVITY FILLER CAP [*****] FUEL TANK TEMP.INDICATOR [*****] FUEL CONTROL UNIT [*****] REFUEL CONTROL PANEL [*****] FUEL QUANTITY REPEATER [*****] FUEL QUANTITY INDICATOR [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 64/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED [*****] Description [*****] FUEL QUANTITY INDICATOR [*****] FUEL PROBE(N1) [*****] FUEL QUANTITY PRESELECTOR [*****] FUEL QUANTITY PRESELECTOR [*****] CLINOMETER-ROLL ATT [*****] FUEL ELECTROPUMP [*****] FUEL ELECTROPUMP [*****] JET PUMP [*****] ENGINE FEED JET PUMP [*****] FUEL PUMP CANISTER [*****] REFUEL/DEFUEL COUPLING [*****] REFUELLING ASSEMBLY [*****] REFUELLING ASSEMBLY [*****] RESERVOIR [*****] LINE ACCUMULATOR [*****] PRESSURE MODULE [*****] LOW LEVEL SWITCH [*****] AC MOTOR DRIVEN PUMP [*****] DC HYDRAULIC PUMP [*****] TRIPLE INDIC [*****] ICE DETECTOR [*****] WIPER MOTOR CONVERTER [*****] WIPER MOTOR CONVERTER [*****] MAIN WINDSHIELD CONTROLLER [*****] STBY DE ICING CTL UNIT [*****] DUAL DISTRIBUTOR VALVE [*****] REGULATOR/SHUTOFF VALVE [*****] SHUT OFF VALVE [*****] ANTI-ICING CONTROLLER [*****] LEFT ELEVATOR HORN [*****] RIGHT ELEVATOR HORN [*****] RUDDER HORN [*****] LEFT AILERON HORN [*****] RIGHT AILERON HORN [*****] LEFT AILERON HORN [*****] RIGHT AILERON HORN [*****] ATTENDANT PANEL [*****] QUICK ACCESS RECORDER [*****] APIU [*****] DIGITAL FLT DATA RECORDER [*****] DIGITAL FLT DATA RECORDER [*****] LINEAR ACCELEROMETER [*****] MPC-ED36 [*****] ATTENDANT PANEL [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 65/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED [*****] Description [*****] ATTENDANT PANEL [*****] ROD-DYNAMOMETRIC,ROL [*****] CREW ALERTING PANEL [*****] ENTRY PANEL-FLT DATA [*****] CLOCK [*****] EFIS CONTROL PANEL RH SIDE [*****] EFIS CONTROL PANEL RH SIDE [*****] EFIS CONTROL PANEL LH SIDE [*****] EFIS CONTROL PANEL LH SIDE [*****] INDEX CONTROL PANEL [*****] INDEX CONTROL PANEL [*****] MULTI-FUNCTION CONTROL PANEL [*****] MULTI-FUNCTION CONTROL PANEL [*****] INTEGRATED AVIONICS DISPLAY [*****] FDAU [*****] FDAU [*****] MPC [*****] CLOCK [*****] MULTIPURPOSE CONTROL & DISPLAY UNIT [*****] MULTIFUNCTION COMPUTER [*****] CLOCK [*****] PARKING VALVE [*****] BRAKING RESERVOIR [*****] MASTER CYLINDER [*****] LANDING GEAR CONTROL VALVE [*****] PARKING ACCUMULATOR [*****] HYDRAULIC DUMPER [*****] NORMAL METERING VALVE [*****] WHEEL SPEED TRANSD ASSY [*****] PARKING VALVE [*****] NORMAL METERING VALVE [*****] MODULE-ANTISKIP [*****] ANTISKID VALVE MANIFOLD [*****] ANTISKID CONTROL UNIT [*****] ANTISKID CONTROL UNIT [*****] VLV-RELIEF LOW PRESS [*****] RESTRICTOR VALVE [*****] SOLENOID VALVE NLG [*****] SWIVEL SELECTOR VALVE [*****] DIFF CONTROL SELECT VALVE [*****] UP LOCK BOX [*****] LANDING GEAR SELECTOR [*****] ANTICOLL.LTG POWER SPLY UNIT [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 66/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED [*****] Description [*****] TRANSFORMER-115V/5V- [*****] LIGHT-LOGO [*****] WING-ENG SCAN LIGHT LH [*****] WING-ENG SCAN LIGHT LH [*****] WING-ENG SCAN LIGHT RH [*****] WING-ENG SCAN LIGHT LH [*****] LANDING LIGHT [*****] ANTICOLL.LTG POWER SPLY UNIT [*****] ANTICOLL. LIGHT [*****] TOTAL AIR TEMP SENSOR [*****] FLUX VALVE COMPENSATOR [*****] FLUX VALVE [*****] ATTITUDE HEADING REF UNIT [*****] VSI/TCAS INDICATOR [*****] ALTIMETER [*****] VSI/TCAS INDICATOR [*****] PROBE-PITOT [*****] RADIOMAGNETIC INDICATOR [*****] ADF.RECEIVER [*****] VOR/ILS/MKR.RECEIVER [*****] DME RECEIVER [*****] ATC CONTROL PANEL [*****] DME INDICATOR [*****] ADAPTER [*****] ATC TRANSPONDER [*****] ATC TRANSPONDER [*****] ATC TRANSPONDER [*****] IND-AIRSPEED STDBY [*****] STANDBY ALTIMETER [*****] AIR DATA COMPUTER [*****] INDICATOR-TAS/TEMP [*****] AIRSPEED INDICATOR [*****] ATTITUDE HEADING REF UNIT [*****] EFIS SYMBOL GENERATOR [*****] EFIS.CONTROL PANEL [*****] CRS/HDG.REMOTE CONTROLLER [*****] CRS/ALT.REMOTE CONTROLLER [*****] WX.RADAR CONTROL PANEL [*****] WX.RADAR CONTROL PANEL [*****] WX.RADAR CONTROL PANEL [*****] RADAR RECEIVER TRANSCEIVER [*****] ATC TRANSPONDER [*****] MULTI. CONTROL & DISPLAY UNIT [*****] TRANSCEIVER RECEIVER TCAS [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 67/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED [*****] Description [*****] VOR/ILS/MKR.RECEIVER [*****] DME TRANSCEIVER [*****] VOR/ILS/MKR.RECEIVER [*****] ATC CONTROL PANEL [*****] VOR/ILS/DME.CONTROL PANEL [*****] ADF.CONTROL PANEL [*****] TCAS CONTROL PANEL [*****] NAVIGATOR PROCESSOR UNIT [*****] NAVIGATOR PROCESSOR UNIT [*****] T2CAS COMPUTER [*****] RADIO-ALTIMETER TRANSCEIVER [*****] RADIO-ALTIMETER TRANSCEIVER [*****] EGPWS MK8 COMPUTER [*****] GPWS MK2 COMPUTER [*****] INTEGRATED ELEC.STAND-BY EQUIP [*****] AIR DATA COMPUTER [*****] GPS RECEIVER [*****] GPS RECEIVER [*****] STANDBY HORIZON [*****] RADAR RECEIVER TRANSCEIVER [*****] OXYGEN SOLENOID VALVE [*****] OXYGEN REGULATOR MASK ASSY [*****] OXYGEN REGULATOR MASK ASSY [*****] OXYGEN PRESS.XMTR/REG [*****] DUCT DISCHARGE DOWNSTREAM VALV [*****] CHECK VALVE [*****] PRESSURE REG & S/O VALVE [*****] BLEED AIR SHUTOFF VALVE [*****] ISOLATION VALVE [*****] INTEGRATED CORE PROCESSING MOD [*****] IOM - S [*****] CAC SWM [*****] IOM - DATA CONCENTRATOR [*****] CORE AVIONICS CABINET RACK [*****] IOM - AUTO PILOT [*****] CARGO DOOR ACTUATOR [*****] COCKPIT DOOR CONTROL UNIT [*****] HYDRAULIC PRESSURE SWITCH [*****] MOTOR AND PUMP ASSEMBLY [*****] PROPELLER COND.PUSH-PULL [*****] PROPELLER SPEED INDICATOR [*****] OVERSPEED GOVERNOR [*****] OIL PUMP [*****] ELECTRONIC PROPELLER CONTROL [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 68/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED [*****] Description [*****] PROPELLER VALVE MODULE [*****] ELECTROVALVE [*****] PROPELLER BLADE [*****] EJECTION DUCT [*****] EJECTION DUCT [*****] IND-FUEL TEMP [*****] FUEL FLOW INDICATOR [*****] FUEL FLOW TRANSMITTER [*****] ENGINE POWER PUSH-PULL [*****] HP SPEED INDICATOR [*****] TORQUE INDICATOR [*****] INTERTURBINE TEMP.INDICATOR [*****] PROPELLER TORQUE INDICATOR [*****] OIL COOLER FLAP ACTUATOR [*****] THERMOSTATIC VALVE [*****] OIL COOLER [*****] OIL TEMP/PRESS.INDICATOR [*****] OIL PRESSURE SENSOR [*****] CONTROL ENGINE ELECTRONIC [*****] EXCITER-IGNITION [*****] EJECTOR-FUEL WASTE [*****] VALVE ASSY-INTERCOMPRESSOR BLEED [*****] VALVE ASSY-INTERCOMPRESSOR BLEED [*****] AUTOFEATHER CONTROL [*****] FUEL CONTROL-MECHANICAL [*****] COOLER-OIL, FUEL COOLED [*****] FLOW DIVIDER AND DUMP VALVE [*****] VALVE ASSY-SERVO [*****] PUMP-FUEL [*****] BRAKE HYDROMECHANICAL ASSY [*****] EFIS.CATHODE RAY TUBE [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 69/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED + + 2. List B + +The following list of LRUs contains [*****] part numbers. [*****] Description [*****] T.I.C. VALVE [*****] EXCHANGER [*****] AUDIO CONTROL PANEL [*****] BUS POWER CONTROL UNIT [*****] AC GENERATOR [*****] DC STARTER GENERATOR [*****] TRIM ACTUATOR [*****] DUAL DISTRIBUTOR VALVE [*****] ANTICOLL. LIGHT [*****] STROBE LIGHTS [*****] POWER SUPPLY UNIT [*****] EMERGENCY POWER SUPPLY [*****] HEATER-OIL TO FUEL + +For sake of clarity, the above lists may be amended from time to time by way of Notice sent to the Company by the Repairer. + +ALL ITEMS, PARTS, COMPONENTS, SERVICES, WARRANTIES AND GUARANTEES PROVIDED HEREUNDER ARE PROVIDED SUBJECT TO CLAUSE 14 OF THE AGREEMENT. [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 70/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version EXHIBIT 7 - REPAIRER STANDARD WORK ORDER FORMS + +7-1 Standard exchange order: + + AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 71/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version 7-2 Repair order: + + Agreement ref.: code client-GMA-01 SHIPPING DATE: PAGE: 1 / 1 + +REPAIR ORDER + +(THIS FORM MUST BE ENCLOSED INSIDE THE BOX WITH THE UNIT) FROM: TO (Shipping address): COMPANY NAME Sender: + + Tel: Fax: + + + + + + ATR CUSTOMER SUPPORT c/o DHL Solutions ZA du Pont Yblon 95 500 Bonneuil en France FRANCE + + REPAIR ORDER NUMBER : DATA RELATED TO REMOVED UNIT A/C DATA TYPE: MSN: FH: REGISTRATION: CY: + +UNIT DATA + + PART NUMBER: TSN: AMENDMENT: CSN: SERIAL NBR: TSO: DESIGNATION:PAGE: CSO: WARRANTY COVERAGE INSTALLATION DATE: VENDOR (O.E.M.): YES NO REMOVAL DATE: A.C.S. REPAIR: YES NO REASON FOR REMOVAL REQUESTED WORK REPAIR OVERHAUL BENCH TEST CALIBRATION + +MODIFICATION + + + +(Please indicate the requested SB and final PN) + +OTHER WORKS TO INCORPORATE / REMARKS ATR—Global Maintenance Agreement ATR form ref. 7-2 AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 72/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version 7-3 Standard exchange Core Unit returned to ATR Pool: + + Agreement ref.: code client-GMA-01 SHIPPING DATE: PAGE: 1 / 1 + +STANDARD EXCHANGE CORE UNIT RETURNED TO ATR POOL + +(THIS FORM MUST BE ENCLOSED INSIDE THE BOX WITH THE UNIT) FROM: TO (Shipping address): COMPANY NAME + + Sender: Tel: Fax: + + + + + + ATR CUSTOMER SUPPORT c/o DHL Solutions ZA du Pont Yblon 95 500 Bonneuil en France FRANCE + + EXCHANGE ORDER REFERENCE: UNIT DELIVERED BY ACS: PART NUMBER: SERIAL NBR: DATA RELATED TO REMOVED UNIT A/C DATA TYPE: MSN: FH: REGISTRATION: CY: + +CORE UNIT DATA + + PART NUMBER: TSN: AMENDMENT: CSN: SERIAL NBR: TSO: DESIGNATION: CSO: WARRANTY COVERAGE INSTALLATION DATE: VENDOR (O.E.M.): YES NO REMOVAL DATE: A.C.S. REPAIR: YES NO REASON FOR REMOVAL REMARKS ATR - Global Maintenance Agreement ATR form ref. 7-3 AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 73/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version + + Agreement ref.: code client-GMA-01 DATE: PAGE: 1 / 1 + +LOAN ORDER + +FOR MAIN ELEMENT AVAILABILTY UNDER GMA FROM: TO: COMPANY NAME: + + Sender: Tel: Fax: + + + + + + A.C.S.-ATR CUSTOMER SUPPORT Attn: Tel for routine orders: (33) 5 62 21 60 80 Tel for AOG orders: (33) 5 62 21 62 00 Fax for routine orders: (33) 5 62 21 62 80 Fax for AOG orders: (33) 5 62 21 62 62 + + + + REQUEST FOR A/C TYPE: RGSTN: MSN: LOAN ORDER NUMBER DELIVERY LEAD TIME: A.O.G. CRITICAL REQUESTED PART NUMBER DESCRIPTION REASON + + DATA RELATED TO PART NUMBER REMOVED FROM AIRCRAFT + +PART NUMBER S / N Removal date + + COMMENTS SHIPPING ADDRESS IF SPECIFIC (Different from standard shipping address) REMARKS ATR - Global Maintenance Agreement ATR form ref. 7-4 AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 74/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED EXHIBIT 8 - LEASE OF THE STOCK + +1. Lease of the Stock + +The Repairer agrees to lease the Stock to the Company and the Company agree to take the Stock on lease, subject to the terms and conditions of this Agreement. + +2. Content and value of the Stock + +2.1 Content: the Stock listed in Exhibit 5 ("Stock") contains serviceable Items, either brand new or used, depending on availability of such Items by the Repairer at the time of their respective Delivery. 2.2 Value: the Stock total value for brand new Items, under economic conditions prevailing in two thousand fourteen (2014), shall be: + +For the initial AZUL stock delivered under economic conditions 2010, [*****] + +For the stock delivered under the AZUL amendment 3 under economic conditions 2011, [*****] + +For the stock delivered under the AZUL amendment 4 under economic conditions 2011, [*****] + +For the first batch, stock delivered under the GMA TRIP under economic conditions 2011 [*****] + +For the second batch limited to the parts not recommended by the repairer, stock delivered under the GMA TRIP under economic conditions 2011 [*****] + +For the sake of clarity, parts of the Stock contained into the second batch that are recommended by Repairer, are provided [*****] delivered under the GMA TRIP under economic conditions 2011 [*****] + +For the batch related to the Amendment 5, stock delivered under economic conditions 2013 [*****] + +For the batch related to the Amendment 6, stock delivered under economic conditions 2014 [*****] + +For the batch related to the Amendment 7, stock delivered under economic conditions 2014 [*****] + +For the batch related to the 2014 OSS replenishment, stock delivered under economic conditions 2014 [*****] + +For the batch related to the Pitot exchange, stock delivered under economic conditions 2014 [*****] [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 75/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED [*****] + +For the sake of clarity, + +The total Stock value of Exhibit 5 list shall be: + +[*****] + +And the lease fee payable in Exhibit 14 ("Price conditions")shall be based on the value of [*****] corresponding to parts of the Stock contained into the TRIP second batch that are recommended by Repairer, i.e. [*****] + +In the event the Repairer delivers used Items to the Company, the value of each such used Item shall be quoted at [*****] of the brand new value indicated in Exhibit 5 ("Stock") and the total value of the Stock shall be adjusted accordingly by way of Notice sent by the Repairer to the Company. 2.3 Modification of the Stock: on the first anniversary date of the Start Date, the Parties may review the content of the Stock and shall, in case of a variation in the contents of the Stock, amend the Agreement accordingly by way of Notice sent by the Repairer to the Company. Following such amendment, the Company shall return to the Repairer any Item of the Stock, or request the Repairer to replace any Item within the Stock subject to the following conditions: a) the Item returned by the Company (i) has never been used by the Company since the Start Date, (ii) is in serviceable condition, (iii) isdelivered in its original Packaging and with all appropriate airworthiness documents; and, + + b) the Item shall be returned as per Clause 6.2 of this Agreement; and, + + c) if an Item is returned to the Repairer, the value of the Stock shall be modified by deduction of the initial value of the relevant Itemapplicable at the time of its Delivery; and, d) if an Item is added to the Stock, the value of the Stock shall be increased according to the ATR spare parts catalogue price for the addedItem at the economic conditions corresponding to the time when the Stock is modified. + +The Company shall be responsible for and pay any costs incurred by and/or in connection with the return to the Repairer and/or replacement of such Items of the Stock, including transportation costs, customs duties, formalities and commissions, re-certification fees if documents are missing or damages are found or the conditions of this Clause 2.3 are otherwise not complied with by the Company. 2.4 Inventory of the Stock: the Repairer or any representative it designates shall have the right to inspect the Stock and to audit any records relating thereto at any reasonable time upon giving prior Notice to the Company, which shall provide full access to such Stock to enable the Repairer to conduct periodic inventory inspections and/or any audit of the Stock. + +Should any Item of the Stock be missing, partially or totally damaged, or not have its appropriate airworthiness documentation at the time the Repairer or its representative carries out its inspection and/or audit, and if the Company cannot justify such Item as being under repair, the Company shall have [*****] to remedy the situation to the satisfaction of the Repairer, failing which, the Repairer shall invoice the Company the price for any such lost or damaged Item at the ATR spare parts catalogue price applicable on the date of such invoice for a new part initially delivered by the Repairer. In the event the Repairer initially delivered used Items to the Company, each such used lost Item shall be invoiced at [*****] [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 76/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED [*****] of the brand new value at the ATR spare parts catalogue price applicable on the date of such invoice. + +3. Stock Delivery 3.1 Provided the Company has met each of the conditions precedent as per Clause 17 ("Conditions precedent") of the Agreement, the Stock shall be delivered to the Company by the Repairer with the relevant airworthiness documents (certificate of conformity, ANAC SEGVOO 003 or EASA Form 1 or FAA Form 8130-3), [*****] to the Repairer stores located at the address set forth in Clause 6.1 of this Agreement, or such other location as the Repairer may from time to time notify to the Company . 3.2 The Repairer shall use its reasonable endeavours to deliver [*****] in quantity of the Stock within [*****] as from the Start Date. 3.3 As from the Delivery of the Stock, the Company is appointed as the custodian of the Stock and, all risks relating to or arising in connection with the Stock shall be transferred to, vested in and borne by the Company, which shall promptly notify the Repairer of any loss or damage to the Stock. 3.4 Within [*****] as from the date of Delivery of any Item of the Stock, the Company shall be responsible for obtaining and shall provide the Repairer with evidence in respect of (i) custom clearance, including payment fees, customs duties, and (ii) customs declarations, with respect to the relevant Stock Item. + +4. Storage Location of the Stock (i) The Storage Location shall be: + +Rodovia Santos Dumont, Km 66, Jardim Itatinga, Campinas - São Paulo, Brazil CEP 13052-970. + +And + +Av Portugal, 5139, Itapoa - Belo Horizonte, Minas Genais, Brazil + +or any other address notified from time to time by the Company to the Repairer, or by default the address of the Company as indicated in page four (4) of this Agreement. + + (ii) The Stock shall be kept with its corresponding documentation in secured warehouse facilities at the Storage Location, which shall be separated from any area used to store any other equipment, and each Item shall be clearly identified as belonging to the Repairer and/or the Stock owner with the inscription "ATR PROPERTY". + + (iii) The Company shall notify to the Repairer the name and address of the owner or landlord of the Storage Location, if relevant, and each time such owner or landlord changes; the Company shall notify the said new owner or landlord, if relevant, of the Repairer's property of the Stock and copy the Repairer of such notification. (iv) The Company shall be liable for maintaining the Stock by applying the best methods for storage and maintenance as required byapplicable EASA or [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 77/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED ANAC regulations at its own costs, particularly for parts subject to limited shelf life or cure date. 5. Use and repair of the Stock + + (i) Each Item listed in Exhibit 3 ("Main Elements covered under this Agreement") and Exhibit 6 ("LRUs covered by repair and standardexchange Services") withdrawn from the Stock and used by the Company shall be exclusively repaired by the Repairer. + + (ii) The Company shall be entitled to withdraw and use Items from the Stock in accordance with its operational needs, to remedy to any corresponding unserviceable Item fitted on the Aircraft covered under this Agreement (Exhibit 1 "List of ATR Aircraft covered under this Agreement"). (iii) In such case, the Company shall return to the Repairer such unserviceable Item removed from the Aircraft with a Work Order for repairin the form set out in Exhibit 7-2 within [*****] from the withdrawal of the corresponding Item from the Stock. + +The Repairer shall then repair, as relevant, such unserviceable Item in accordance with the provisions of Exhibits 10 and/or 11 and re- deliver to the Company a serviceable Item with the relevant associated airworthiness documentation (i.e. a certificate of conformity, ANAC SEGVOO 003 and EASA Form 1 or FAA Form 8130-3,and when applicable the log book duly filled with any technical information). + +The Company shall then place such serviceable Item into the Stock. + + + +(iv) In the event that the unserviceable Item removed from the Aircraft is declared BER or TNR (copy of the Repair Shop report will be given to the Company ), and is not covered by Services as defined in Exhibit 10 and/or Exhibit 11, the Repairer will invoice such unserviceable Item to the Company , except if the Company replaces such unserviceable Item with an equivalent serviceable Item which shall be placed into the Stock. + + (v) Should the Company place a standard exchange Work Order, as per Exhibit 9 to replace any Item withdrawn from the Stock to replace an equivalent unserviceable Item removed from any Aircraft, then after repair and/or overhaul of such unserviceable Item, the Repairer will place such repaired and/or overhauled Item into the Pool and will not deliver it to the Company . (vi) [*****]. + +In the event the Company purchases any Item of the Stock, the Parties agrees to modify accordingly the price indicated in Clause 1.1 of the Exhibit 14 ("Price conditions"), to take into account monthly lease rental only for the remaining Items of the Stock. [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 78/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED + + 6. Return of the Stock 6.1 Within [*****] as from the End Date, the Company shall notify the Repairer of its decision to either: (a) [*****] and/or, (b) return the Stock to the Repairer as per Clause 6.2 of the Agreement in accordance with the following terms and conditions; such returnshall have to be performed within [*****] following such Notice. + +If the Company fails to notify the Repairer as provided here above, the Repairer shall either (i) invoice as per (a) here above and/or (ii) direct the Company to return the Stock within [*****] following the term of the aforesaid [*****] period and/or (iii) repossess the Stock, at its discretion. 6.2 If the Company fails to return the Stock as provided here above, the Company shall be charged interest at a rate equal to [*****] of the value of the non-returned Items, per Day as from the end of the aforesaid [*****] period, until the non-returned Items are duly received or repossessed by the Repairer. + +The Repairer shall be entitled to set off such late return interests with the Security Deposit pursuant to Clause 13 ("Security Deposit"). 6.3 In the event any Item of the Stock is not returned to or repossessed by the Repairer within [*****] period as from the End Date, the Repairer may consider, at its discretion, such Item as lost and shall then invoice such Item to the Company at the ATR spare parts catalogue price in force at the time of such invoice. + +The Repairer shall be entitled, at its sole discretion, to set off the corresponding amount(s) with the Security Deposit as specified in Clause 13 ("Security Deposit"). 6.4 In the event that (i) any Item is returned to the Repairer without the appropriate airworthiness documentation, or (ii) whenever the Items are returned without the original documents supplied by the Repairer, or (iii) if the Repairer has to test, to replace or to repair such returned Item(s) due to damage or deterioration as a result of incorrect storage, inappropriate Packaging and/or transport, or (iv) for any other reason whatsoever, the Company shall bear any associated re-certification, repair, overhaul, and/or replacement costs for such Items at the ATR spare parts catalogue prices applicable on the date of return of such Item to the Repairer. 6.5 Conditions for the return of the Main Elements: when returned or repossessed, if the TSO of the Main Element is different from the TSO at the time of its Delivery, the Repairer shall invoice to the Company the Lost Potential as per the conditions of this Agreement. + +In case the maintenance of the Main Elements is not covered by this Agreement, the Company shall return any Main Element with the same TSO as the one at the time of its Delivery. If such TSO is higher, the Repairer shall invoice to the Company the works necessary to restore such TSO based on Time and Material conditions. [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 79/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version 7. Payment and transfer of the property title 7.1 Save as otherwise set out in this Agreement, the purchase price for any Item of the Stock shall be paid in accordance with the provisions of Clause 12 ("Invoicing and payment terms"). 7.2 Notwithstanding the provisions of Clause 5 above, title to the Stock shall remain with Stock owner at all times until the Stock has been purchased by the Company as per Clause 6 above and provided that any amount of the corresponding invoice has been fully received by the Repairer in accordance with Clause 12 ("Invoicing and payment terms"). + +The Company specifically agrees that it shall not acquire any interest, equity or share of the Stock, or pledge or create any lien of any sort whatsoever prior to the transfer of title to the Stock to it in accordance with this Agreement and shall fully indemnify the Stock Owner and/or the Repairer with respect to any consequence of a non-compliance with its obligations under this Clause 7.2. 7.3 The Company may not, under any circumstances, perform or permit any action to be taken that may be detrimental to the Repairer's and/or Stock owner's property title to the Stock, including: i) The Company must not transfer, sell, charge, pawn, mortgage, negotiate, dispose of, or intend to negotiate or dispose of the Stock; and, + + + +ii) The Company shall take the necessary measures in order to prevent the Stock from being seized or taken away, or to check the Stock in the event of a seizure by distress or any other similar legal process. However, if the Stock is seized or taken away, the Company must immediately notify the Repairer and indemnify the Repairer and/or the Stock owner for any Loss incurred by the Repairer and/or the Stock owner as a result of the above-mentioned events, and shall mitigate any such Loss by using its reasonable endeavours to re- possess the Stock or to re-acquire the Stock. 7.4 Case of use of the Stock as per Clause 5 of the Exhibit 8 ("Lease of the Stock"): the title to the Item withdrawn from the Stock shall pass to the Company upon installation of such Item on the Aircraft, subject to (i) full and complete payment of any and all sums due by the Company in connection with this Agreement and (ii) the completion of all of its obligations under Clause 5 of the Exhibit 8 ("Lease of the Stock"). + +The title to the Item removed from the Aircraft and sent to the Repairer for repair as per Clause 5 hereof shall pass to the Repairer and/or the Stock owner, as relevant, upon such removal. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 80/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED EXHIBIT 9 - SPARE PARTS STANDARD EXCHANGE SERVICE + +The Company shall granted access to the Pool on a standard exchange basis where the Company may order any LRU listed in Exhibit 6 and provide the Repairer in return with an equivalent (same part number or same standard interchangeable) unserviceable LRU removed from the Aircraft. This right of access to the Pool is not exclusive to the Company. 1. Pool content + +The Pool is a set of serviceable LRUs listed in Exhibit 6 ("LRUs covered by repair and standard exchange Services") available upon the Start Date, provided the Company has complied with its obligations pursuant to Clause 17 ("Conditions precedent"). + +In the event of any Aircraft technical modification and upon the Company 's written request, the Repairer may update the list set forth in Exhibit 6 ("LRUs covered by repair and standard exchange Services"), in which case, the price set out in Clause 1.2 of the Exhibit 14 ("Price conditions") shall be adjusted accordingly. 2. Access to the Pool + +To access the Pool and take Delivery of the requested LRU, the Company must place a written standard exchange Work Order (by filling the form ref 7-1 in Exhibit 7) with the Repairer. 3. Repairer's obligations 3.1 Pool management + +The Repairer shall be responsible for managing and maintaining the Pool at his own expense and in compliance with the relevant OEM recommendations. + +Any LRU from the Pool delivered to the Company by the Repairer or any Repair Shop shall comply with the applicable Aircraft technical specifications. 3.2 Dispatching the Items + + (i) Any LRU from the Pool shall be delivered to the Company pursuant to Clause 6.1 of the Agreement within [*****] for routine orders, within [*****] for critical orders or within [*****] for AOG orders (limited to classified "no-go and go if" LRUs according to MMEL) as the case may be, starting from the Day of receipt by the Repairer of a standard exchange Work Order. (ii) The dispatch lead times set forth in Clause 3.2 (i) above remain subject to: (a) reception by the Repairer of written standard exchange Work Order 7.1 duly filled in by the Company; and, [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 81/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED + + (b) the availability in the Company 's facilities of a stock of critical Items at least at the level of Repairer's recommendations for theAircraft fleet; and, (c) the number of AOG standard exchange Work Orders being less than [*****] of the total number of standard exchange WorkOrders placed by the Company over the last [*****]; and, (d) The Company not being in breach of any of its obligations under this Agreement, including Clause 4.1 (i) of this Exhibit 9. + + + +(iii) Provided the conditions set out in Clause 3.2 (ii) of this Exhibit 9 are met and the Company placed an A.O.G. standard exchange Work Order with the Provider, should the Company be obligated, after Provider's approval, to lease similar LRU from a third Party servicer due to the unavailability of the requested LRU in the Pool, then the Provider will reimburse to the Company, for [*****] until the date of delivery of the requested unit by the Provider to the Company. The Provider shall not under any circumstances have any liability whatsoever (including liability of any consequential loss or damage) in respect of any late delivery of any part other than the liability set forth in this Clause 3.2(iii) . (iv) Any LRU of the Pool will be provided at its latest standard or fully interchangeable standard with the relevant certificate of conformity and, ANAC SEGVOO 003 and EASA form 1/FAA form 8130-3 dual release. (v) LRUs delivered from the Pool are covered by the provisions of Clause 9 ("Warranties"). (vi) Any LRU of the Pool subject to TBO event shall be delivered to the Company with no less than [*****] of life remaining to the nextscheduled overhaul. 4. Core Unit return 4.1 Return lead time + + + +(i) The Company shall return to the Repairer's facilities indicated in Clause 6 ("Deliveries") any Core Unit with the Work Order form ref 7-3 duly filled-in, as standard exchange counterparts, within a maximum [*****] as from the Delivery Date of the LRU from the Pool for any Items from the list A of the Exhibit 6 ("LRUs covered by repair and standard exchange services") and within a maximum of [*****] as from the Delivery Date of the LRU from the Pool for any Items from the list B of the Exhibit 6 ("LRUs covered by repair and standard exchange services"). + +For sake of clarity, in the event a Core Unit is not returned by the Company to the right Delivery Location as specified in the Clause 6 ("Deliveries"), the Repairer shall be entitled to charge the Company transportation costs, associated taxes and Customs duties due to the re-exportation of such Core Unit to the right Delivery Location. (ii) Prior to dispatching any Core Unit, the Company will also send by fax or by email all the data related to the dispatch (including the dateof dispatch and the carrier's name). + + (iii) Notwithstanding the above provision in sub-clause 4.1 (i), in the event a Core Unit is not received by the Repairer within [*****] after Delivery date of the LRU for by the Repairer to the Company for any Items from the list A of the Exhibit 6 ("LRUs covered by repair and standard [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 82/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED exchange services") and within a maximum [*****] as from the Delivery Date of the LRU from the Pool for any Items from the list B of the Exhibit 6 ("LRUs covered by repair and standard exchange services"), the Repairer shall be entitled to charge the Company , as the case may be, late fee equivalent to [*****] of the value of the part per Day starting the [*****] up to maximum the [*****] for any Items from the list A of the Exhibit 6 ("LRUs covered by repair and standard exchange services") and starting the [*****] up to maximum the [*****] for any Items from the list B of the Exhibit 6 ("LRUs covered by repair and standard exchange services") after the Company's standard exchange Work Order date, as the case may be. In the event the Core Unit is not returned by the [*****] for any Items from the list A of the Exhibit 6 ("LRUs covered by repair and standard exchange services") or by the [*****] for any Items from the list B of the Exhibit 6 ("LRUs covered by repair and standard exchange services") after the Company's standard exchange Work Order date, as the case may be, the Repairer will declare the Core Unit as lost in exchange as lost and shall be entitled to invoice to the Company , as the case may be, the amount corresponding to the value of the serviceable LRU primarily delivered by the Repairer according to spare parts catalogue price in force on the date of its Delivery. Title to such serviceable LRU shall pass to the Company, as the case may be, upon full payment of the Repairer's invoice. The Repairer shall be entitled to withdraw without delay the related amount from the Security Deposit as per Clause 13 ("Security Deposit"). (iv) In case of accumulated not returned Core Units pursuant to sub-clause 4.1 (iii) above, the Repairer shall be entitled, subject to a [*****]prior Notice, to suspend the Company's Pool access. 4.2 Any Core Unit shall be repaired in accordance with Exhibit 10 ("LRUs repair Service"). 5. Specific services not covered by standard exchange Service + +The following services and their related costs (labor and parts) are not eligible to the standard exchange Service, and shall be managed on Time and Material conditions: + + (i) services performed for LRU(s) fitted on Aircraft to comply with Aircraft redelivery conditions or delivery conditions of a third party. For sake of clarity, Aircraft redelivery conditions or delivery conditions of a third party will have to be declared by the Company to the Repairer in anticipation [*****] before the stop of the Aircraft; (ii) services performed for any part of the Company's own inventory if any, to be replaced, or maintained, re-certified, tested, checked, forinventory management and/or maintenance reasons (shelf life, cure dates…). 6. Transfer of title and risks 6.1 Title to the Items featured in the Pool, or in the Stock in the event of Clause 5 (v) of the Exhibit 8 ("Lease of the Stock"), or the Advanced Pool Stock of Clause 7 of the Exhibit 15 ("Advanced Pool Service"), remains at all times with the Repairer until: (a) receipt by the Repairer of the corresponding Core Unit in compliance with Clause 4.1 of this Exhibit 9 and of a confirmation from theRepair Shop that such Core Unit is repairable; and, (b) full and complete discharge of any and all sums due by the Company under or in connection with this Agreement. + +Title to the corresponding Core Unit shall pass to the Repairer and/or the Stock owner free from any lien, security or other encumbrance upon removal of such Core Unit from the Aircraft. [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 83/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version For the sake of clarity, in the event of Clause 5 (v) of the Exhibit 8 ("Lease of the Stock") and Clause 7 of the Exhibit 15 ("Advanced Pool Service"), the Repairer and/or the Stock Owner shall remain the owner of the serviceable LRU sent from the Pool to the Stock and to the Advanced Pool Stock, as replacement. 6.2 Notwithstanding the above, in the event the Core Unit is invoiced to the Company as per Clause 4.2 above, the transfer of title to the serviceable LRU primarily delivered from the Pool shall take place upon receipt by the Repairer of the full payment for the invoice relating to such serviceable LRU. 6.3 The Company hereby represents and warrants that (i) it is the lawful owner of the Core Unit and/or (ii) it is duly entitled to transfer the title to such Core Unit in accordance with Clause 6.1 above. 6.4 In any event, all risks whatsoever and howsoever relating to or arising in connection with any serviceable LRU of the Pool shall be transferred to, vested in and borne by the Company , as from Delivery thereof pursuant to Clause 6 ("Deliveries"). 7. THIS EXHIBIT IS PART OF THE AGREEMENT AND ALL APPLICABLE PROVISIONS THEREOF ARE APPLICABLE HERETO. WITHOUT LIMITING THE FOREGOING, ALL ITEMS, PARTS, COMPONENTS, SERVICES, WARRANTIES AND GUARANTEES PROVIDED HEREUNDER ARE PROVIDED SUBJECT TO CLAUSE 14 OF THE AGREEMENT AND TO THE DISCLAIMERS AND LIMITATIONS ON WARRANTIES AND DAMAGES, INCLUDING CONSEQUENTIAL DAMAGES, SET FORTH THEREIN. 8. FURTHER ASSURANCES + +The Repairer retains title to any serviceable LRU until payment therefor as provided above. As a precautionary measure however, the Company agrees that the Repairer shall have all rights and remedies afforded to a secured party upon the default of a debtor as provided in the UCC and grants a security interest to the Repairer in all of the Company's right, title and interest in each serviceable LRU and the proceeds thereof and all general (including payment) intangibles related thereto or arising therefrom to secure the prompt and punctual payment and performance when due of all obligations of the Company under this Agreement, including this Exhibit. + +The Company shall do all acts and things necessary or advisable, including execute and deliver all documents, to ensure that the Repairer's right, title and interest in and to the serviceable LRUs is perfected in all applicable jurisdictions and otherwise protected against the current or future claims of any third-party, including the Company's creditors, mortgagees, lessors, financing parties, trade creditors, any owner of an aircraft and other Persons. Such acts and things shall include obtaining such consents and approvals from, and execution, delivery, registration, recordation and filing of such UCC financing statements (including continuation statements and amendments), FAA mortgages and other documents with, such registries, governmental authorities and third parties as the Repairer may reasonably request. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 84/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED EXHIBIT 10 - LRUs REPAIR SERVICE 1. Definition of repair + +Any unserviceable LRU, not declared BER or TNR, shall be repaired or overhauled by the Repairer in compliance with the relevant CMM and according to ANAC or EASA/FAA part 145 regulations. + +If the Company receives from the Repairer a LRU repaired or overhauled under ANAC regulation only with associated ANAC SEGVOO 003 release, the Company may have the right in case of Aircraft redelivery for replacement of such part by another one with relevant certificate of conformity EASA form 1/FAA form 8130-3 dual release. The Repairer shall make its best efforts to provide to the Company the Services in compliance with EASA and FAA for all LRU repaired or overhauled by the local repair shops by end of December of 2015; + +[*****]. + +If the Repairer receives from the Company an excessive number of unserviceable LRUs compared to the MTBUR for such LRU, the Repairer may assist the Company in investigating the causes of such situation, and each Party shall take all necessary corrective actions to the satisfaction of the other Party acting reasonably. 2. Information concerning unserviceable LRUs returned to the Repairer + +The Company shall send to the Repairer any unserviceable LRU, as relevant, with a Work Order in the form set out in Exhibit 7-2 (for any single repair) or in the form attached as Exhibit 7-3 (for the repair of any Core Unit). 3. Documents provided with the repaired or overhauled LRU + +The following documents shall be provided by the Repairer to the Company with any repaired or overhauled LRU under this Agreement: (i) EASA form 1 certificate or FAA form 8130-3 or, if applicable, ANAC SEGVOO 003, (ii) Strip report issued by the Repair Shop, and (iii) An invoice, if such repair service is not covered by the scope of this Agreement. 4. Specific services not covered by LRU repair Service + +The following repairs and their related costs (labor and parts) are not covered by the prices set out in Clause 1.3.1 of the Exhibit 14 ("Price conditions") and shall be managed on Time and Material conditions: (i) all costs of technical modifications that may be incurred due to the embodiment on LRUs of Airworthiness Directives, service bulletins,optional or recommended modifications. (ii) the repair of an unserviceable LRU or additional costs resulting from Items received in damaged conditions due to Abnormal Use,mishandling, corrosion, abrasion, FOD and/or missing Items, [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 85/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED + + (iii) any additional costs in repairing or overhauling any unserviceable LRU due to Company's failure to produce data as requiredhereunder,, + + (iv) any cost and expense, direct and/or indirect, that may arise out of or connected with any additional technical expertise and/or counter expertise to be performed on any LRU, at the Company's request, in the event the Company challenges the Repairer's primary expertise, or repair cost estimation, or repair solution, (v) replacement or repair of LRUs' sub-components unapproved by the OEM, (vi) the maintenance costs relating to any failure of the Company to observe or comply with its obligations under this Agreement, (vii) all battery repairs or replacements, (viii) propeller brake disk replacements, (ix) CVR and DFDR memory and/or tape analysis and/or read outs. 5. Discarding the LRUs + +The Parties acknowledge that under normal operating conditions any unserviceable LRU may be BER or TNR. + +The Repairer shall notify the Company in case of BER or TNR status of any unserviceable LRU, and shall request the Company's approval to discard such unserviceable LRU. + +If the Company denies such approval, the unserviceable LRU shall be delivered back to it at the [*****] costs and risks. + +The Company's failure to respond to such Repairer's request within [*****] following the Repairer's notification of BER or TNR shall constitute an approval for the Repairer to discard the relevant unserviceable LRU. + +If the discarded unserviceable LRU has been replaced with a serviceable LRU of the Pool or of the Stock pursuant to the provisions of Exhibits 8 ("Lease of the Stock") or 9 ("Spare parts standard exchange Service"), the Repairer shall invoice and the Company shall pay for the price of such serviceable LRU of the Pool or of the Stock, based on the ATR spare parts catalogue sales price applicable at the date of such invoice for brand new or used LRU, as the case may be. + +ALL ITEMS, PARTS, COMPONENTS, SERVICES, WARRANTIES AND GUARANTEES PROVIDED HEREUNDER ARE PROVIDED SUBJECT TO CLAUSE 14 OF THE AGREEMENT. [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 86/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED EXHIBIT 11 - MAIN ELEMENTS SERVICES + + 1. Field of application + +1.1 The Repairer shall provide the Company with a Main Elements' maintenance (as per Clause 2 of this Exhibit 11) and availability (as per Clause 3 of this Exhibit 11) Service. + +This Service is applicable to: a) Main Elements listed in Exhibit 3 ("Main Elements and parts numbers covered by the Agreement") when installed on an Aircraft, and b) any Main Elements in the Stock as relevant, and c) any Spare Main Element. + +The Services provided to the Company by the Repairer in accordance with this Exhibit 11 cover off-Aircraft tasks and works performed by the Repairer. For the sake of clarity and unless otherwise agreed between the Parties, standard exchange Service shall not be available for Main Elements under this Agreement, except for propeller blades and slip ring as per Clause 3 of this Exhibit 11. 1.2 Main Elements' maintenance program (Scheduled Events) + +At the date of entry into force of this Agreement, the Parties acknowledge and agree that applicable intervals for inspections / overhauls on Main Elements are: i) for propellers: + +[*****]. ii) for landing gears: + +[*****]. + +The Repairer reserves its rights to require the Company to modify the above Main Elements maintenance program in accordance with the Aircraft manufacturer MRBR and/or MPD, to optimize the Company 's Aircraft dispatch reliability, provided the Company's Airworthiness Authorities enable so. + + 2. Main Elements' maintenance Service description + +2.1 Any off-Aircraft maintenance task and work to be performed on Main Elements and Spare Main Elements shall be carried out in accordance with the relevant CMM for each Main Element. Such maintenance tasks with respect to each Aircraft comprise the following services [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 87/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED on which are based the prices set out in Clause 1.3.2 of the Exhibit 14 ("Price conditions"): + +[*****] 2.2 Maintenance for Scheduled Events + +The Repairer shall provide the maintenance Service for Scheduled Events, in accordance with the applicable maintenance program of each Main Element described at Clause 1.2 of Exhibit 11. + +In the event that the Main Element's maintenance program set out in Clause 1.2 of this Exhibit 11 shall be changed, the Parties hereby agree that the Repairer may modify the price conditions set out in Clause 1.3.2 of the Exhibit 14 ("Price conditions"), as relevant. 2.3 Basic Unscheduled Removals + +The repair of Main Elements due to BUR shall be performed by the Repairer according to the relevant CMMV and provided that: - The Company has fulfilled its obligations as per Clause 5 of this Exhibit; and, - the maintenance tasks are related to normal Aircraft operation in accordance with all technical documentation and any otherinstructions issued by ATR or the OEM; and, - the maintenance tasks are not related to specific conditions as per Clause 6 of this Exhibit. + + 3. Spare Main Elements availability Service description + +3.1 With respect to each Aircraft, prices set out in Clause 1.3 of the Exhibit 14 ("Price conditions") comprise the availability of Spare Main Element for Scheduled Events and BUR according to the provisions of sub-clause 3.2 hereof. + +For the sake of clarity, propeller blades and slip rings may be available through the standard exchange Service, as per the Exhibit 9 ("Spare parts standard exchange Service"). + +. [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 88/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED + +3.2 Availability of Spare Main Element(s) for Scheduled Events and BUR: 3.2.1. Such Service includes, at any time and for the entire fleet, - [*****] propellers, - [*****] landing gear, + +In the event the Company requires any additional Spare Main Element, the Repairer will make a proposal on Time and Material conditions. 3.2.2 Subject to the Company having complied with its obligations as per Clause 5 of this Exhibit 11, the Repairer shall make available suchSpare Main Element(s) during the period necessary for the maintenance for Scheduled Events and BUR of Aircraft Main Element(s). 3.3 The Repairer will make Spare Main Element(s) available to the Company during maintenance for BUR of Main Elements within [*****] from the date of receipt by the Repairer of the Company's Work Order in the form set out in Exhibit 7-4. + + 4. Return to the Repairer of the Main Element or Spare Main Element + +At the time the Repairer delivers to the Company a Spare Main Element or returns any repaired or overhauled Main Element to the Company , for fitment on the Company 's Aircraft, the Company will deliver back to the Repairer the Main Element removed for repair or overhaul or the Spare Main Element previously obtained from the Repairer, with required technical documentation on a date (the "Due Date") within a time period of [*****] starting from the Delivery date of the Spare Main Element or the repaired or overhauled Main Element. When the Main Element removed for repair or overhaul is replaced by a Spare Main Element of the Stock or a spare of the Company 's property, the Company shall return to the Repairer or the designated Repair Shop such removed Main Element, with required technical documentation within a time period of [*****], starting from the removal date of the Spare Main Element. + +For returning the Main Elements and Spare Main Elements to the Repairer, the Company shall use adapted container or when applicable the containers received from the Repairer. Any container received by the Repairer or its approved Repair Shop in incomplete or damaged condition from the Company shall be subject to refurbishment or replacement at Company's cost and expense in addition to the prices specified in the Exhibit 14 ("Price conditions"). + +Should the Company fail to deliver the Main Element removed for repair or overhaul or the Spare Main Element(s) back to the Repairer or the Repair Shop on the above Due Date and without prejudice to other rights the Repairer may have at Law and/or under this Agreement, the Repairer may charge late return fees to the Company in an aggregate amount of: - [*****] - [*****] + +per [*****] of delay, as from the Due Date until the Spare Main Element or the Main Element is duly received by the Repairer or the Repair Shop. The Repairer shall be entitled to withdraw such late return fees from the Security Deposit pursuant to Clause 13 ("Security Deposit"). + + 5. Company's obligations + +In order to allow the Repairer to perform the maintenance tasks defined in Clause 2.1 of this Exhibit 11 in compliance with the relevant OEM's technical specifications, the Company [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 89/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED agrees: to provide the Repairer every [*****] with a detailed status of the Main Elements showing the Scheduled Events for the next [*****]; to send to the Repairer a Work Order for the Services at the latest [*****] before the event, either for maintenance Service and/or foravailability Service; to send to the Repairer the log book, log card and back to birth certificate of the landing gears removed for repair or overhaul or sparelanding gear; that, to be eligible for availability Service, no Main Element within the Stock pursuant to Exhibit 8 ("Lease of the Stock") and/or theCompany 's own on-site stock shall be available in the Company s premises, as per the Repairer's initial provisioning recommendation. + +Moreover, the Company shall: 5.1 In respect of the propellers: (i) perform line checks (not limited to lubricant levels, blade balancing, blade anti-erosion film replacements, etc...) and the requiredconsumable spare parts replacements during the Aircraft's entire service life; (ii) procure all the tools necessary for the line maintenance of the propellers including the propeller balancing tool; and (iii) initiate and pursue an efficient staggering program to ensure a smooth schedule removal plan for shop maintenance. 5.2 In respect of the landing gears: (i) perform the line checks (including Messier best practices service letter 631-32-218) and the required consumable spare partsreplacements during the Aircraft's entire service life, on landing gears, wheels and tires; and (ii) procure all the tools necessary for the line maintenance of the landing gear including the appropriate tooling used for wheelsreplacement. If required, the Repairer will have to assist the Company in procuring these tools (buying, hiring, etc.); and (iii) initiate and pursue an efficient staggering program to ensure a smooth schedule removal plan for shop maintenance. 5.3 Left intentionally blank 5.4 On-Aircraft tasks + +All scheduled and unscheduled on-Aircraft maintenance activities, tasks and works and line maintenance, including the following, are under and at the Company's responsibility, risks, costs and expenses: (i) line maintenance tasks associated with engines, propellers, landing gears, wheels, brakes and tires, (ii) Main Elements removals and installations for BUR and Scheduled Events, (iii) Main Elements accessories removals and installations, (iv) Main Elements conditioning for storage, (v) grease and lubricant refilling, seals, gaskets, hardware and consumable parts replacement, (vi) propellers balancing, blades removals and installations, (vii) ensure that log books are reflecting the updated maintenance status of each Main Element. (viii) engine fuel nozzles removals and installations, (ix) engine control trend monitoring performance and analysis, [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 90/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED + + (x) regular cleaning of the engines, (xi) inspection of internal parts (boroscopic inspection). + + 6. Specific services not covered by Main Elements' Service + +The following services and their related costs (labor and parts) are not covered by the prices set out in Clause 1.3.2 of the Exhibit 14 ("Price conditions") and shall be managed on Time and Material conditions: (i) all costs of technical modifications that may be incurred due to the embodiment on Main Elements of Airworthiness Directives, servicebulletins, optional or recommended modifications, (ii) replacement or repair of Main Elements' sub-Items costs relating to any failure of the Company to comply with its obligations under thisAgreement, (iii) the replacement cost of a Main Element and/or its sub-assemblies that is declared BER or TNR, (iv) any additional costs in connection with the repair or overhaul of any Main Element serial number due to Company's failure to producedata as required hereunder, + + (v) Items and/or any sub-Items received in damaged conditions due to Abnormal Use, mishandling, incorrect storage, lightning strike, FOD, corrosion, abrasion or erosion, dropped or water immersion, over-torque condition or over-speed in excess of transient or over- temperature + + (vi) Services performed on Main Element(s) fitted on Aircraft to comply with Aircraft redelivery conditions or delivery conditions to a third party, . For sake of clarity, Aircraft redelivery conditions or delivery conditions of a third party will have to be declared by the Company to the Repairer in anticipation [*****] before the stop of the Aircraft, (vii) the replacement of missing parts and parts unapproved by the OEM, (viii) the repair of damages or replacements resulting from previous repair and/or overhaul not performed pursuant to this Agreement, + + (ix) for the landing gears, the replacement of life limited parts, repair and/or replacement of On Condition Parts listed in Exhibit 4, replacement of any part (including expendables) which vendor price exceeds [*****] with the exception of parts listed in Exhibit 11 Clause 2.1 (ii), (x) for the propellers, replacement of dome, repair of armbore, replacement of de-icer and replacement of nickel sheath. + + 7. Discarding the Main Elements + +The Parties acknowledge that under normal operating conditions any Main Element may be declared BER or TNR. + +The Repairer shall notify the Company in case of BER or TNR status of any Main Element, and shall request the Companys approval to discard such Main Element. + +If the Company denies such approval, the Main Element shall be delivered back to the Company at its costs and risks. + +The Parties agree that the absence of a response by the Company to such Repairer's request within [*****] from the sending of the Repairer's notification of BER or TNR constitutes an approval for the Repairer to discard the relevant Main Element. [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 91/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version In the event the Repairer shall discard any unserviceable Main Element, the Company shall pay the applicable price for test and/or scrap, as the case may be. + +In case of the discarded Main Element is an unserviceable propeller blade that has been replaced with a serviceable propeller blade of the Pool or of the Stock pursuant to the provisions of Exhibits 8 ("Lease of the Stock") or 9 ("Spare parts standard exchange Service"), the Repairer shall invoice and the Company shall pay for the price of such serviceable propeller blade of the Pool or of the Stock, based on the ATR spare parts catalogue sales price applicable at the date of such invoice for brand new or used, as the case may be. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 92/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version EXHIBIT 12 - INTENTIONALLY LEFT BLANK AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 93/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version EXHIBIT 13 - FORM OF STANDBY LETTER OF CREDIT + +By swift message to our addressee BANK NATIXIS (SWIFT Code: CCBPFRPP) + +Issuing Bank: (NAME AND ADDRESS) Issuing Bank SWIFT Code: Confirming Bank: Applicant: Beneficiary: ATR + +StandBy Letter of Credit reference: + +By order of [AZUL NAME], located at [AZUL ADDRESS], we hereby issue our irrevocable and confirmed StandBy Letter of Credit in favour of Avions de Transport Régional, located 1 allée Pierre Nadot 31712 Blagnac, France ("ATR"), for the aggregate amount of USD XXXX (XXX USD) available for the period ending twelve (12) Months after the Term of the GMA (as defined below); + +Available by payment at sight by NATIXIS against your written demand bearing the Clause drawn under irrevocable StandBy Letter of credit (letter of credit reference) issued by (issuing bank name and address) accompanied by the following document: - Beneficiary's signed certificate specifying the amount drawn and stating: (1) that the amount claimed is due and payable by [AZUL NAME] in connection with the Global Maintenance Agreement between ATR asthe Repairer and [AZUL NAME] as the Company executed on (date) for the XXX [Services] (the "GMA"); and, (2) that the Beneficiary has requested payment of the amount claimed from [AZUL NAME] who is in default. + +Partial drawings are permitted. + +The Beneficiary shall not be entitled to assign or transfer any right, title or interest in this StandBy Letter of Credit to any other party. + +All banking charges and commissions are for the account of the Applicant. + +This StandBy Letter of Credit is subject to the 2007 revision of the Uniform Customs and Practices for Documentary Credits of the International Chamber of Commerce Publication 600. + +This StandBy Letter of Credit will take effect on the (date). AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 94/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED EXHIBIT 14 - PRICE CONDITIONS + + 1. Prices + +The price payable for the Services shall be the sum of the prices set out in this Agreement and established in accordance with the economic conditions prevailing in two thousand and fifteen (2015). 1.1 The lease fee payable for the lease of the Stock (based on the Stock technical contents defined in Exhibits 5 ["Stock"] and 8 ["Lease of the Stock"]), as from the Start Date is [*****]: (i) an amount of [*****] corresponding to [*****] of the Stock value which is set in Exhibit 8 ("Lease of the Stock"), Clause 2.2 ; or + + + +(ii) in the event the Repairer delivers used Items to the Company as per Clause 2.2 of the Exhibit 8 ("Lease of the Stock"), the [*****] set forth in 1.1 (i) here above shall be payable from the Start Date until the date on which the last Item of the Stock is delivered. On such latter mentioned date, the Repairer will notify to the Company the exact and definitive Stock value, and the accordingly revised monthly lease payment based upon [*****] of such exact and definitive Stock value. Upon Delivery of the last Item of the Stock, the Repairer shall issue a credit equal to the difference between: a. the total amount of lease payments actually paid by the Company since the Start Date according to Clause 1.1 (i) here above,and b. the price the Company should have paid for the used Items delivered by the Repairer according to Clause 1.1 (ii) here above. 1.2 The price payable [*****] per Aircraft by the Company to the Repairer for the standard exchange Service set out in Exhibit 9 ("Spare parts standard exchange Service") is as follows (with unlimited POOL access): [*****] [*****] [*****] [*****] [*****] 1.3 The prices per airborne FH per Aircraft payable by the Company to the Repairer for the repairs and overhauls of the LRUs and the Main Elements set out in this Agreement are: + + 1.3.1 For LRU repair and overhaul: [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 95/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED [*****] [*****] [*****] [*****] [*****] [*****] 1.3.2 For the Main Element Services as per Exhibit 11 ("Main Elements Services"): i) propellers [*****] per Aircraft): (a) For maintenance - [*****] - [*****] + +The above propellers maintenance provisions and availability prices are defined as a result of the following repartition related to the maintenance of the following propeller hub, actuator, transfer tube and blades composing each propeller assembly: + + Blades Hub Actuator Transfer Tube Adjusting Nut [*****] + + [*****] [*****] [*****] [*****] [*****] [*****] [*****] + + [*****] [*****] [*****] [*****] &bbsp; [*****] [*****] [*****] (b) For availability [*****] [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 96/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED + + ii) left intentionally blank iii) landing gears (per shipset): + +For 42-500, 72-500, 72-600 landing gears: (a) For maintenance: [*****] [*****] + +plus (b) For availability [*****] [*****] + +The above landing gear maintenance provisions and availability prices are defined as a result of the following repartition related to the maintenance of the following sub-assemblies composing each landing gear assembly [*****] [*****] NLG [*****] [*****] Drag Brace [*****] [*****] MGL [*****] [*****] Side Brace [*****] [*****] + +Life limited parts repair or replacement will be subject to a case by case quotation. 1.3.3 Additional flat rates: + +Additional flat rates here under shall be applied for the following operations, as applicable: a) for [*****], a flat rate of : + +For [*****]: [*****] b) for [*****], a flat rate of : + +For [*****]: [*****] 2. Reconciliation conditions + +2.1 Left intentionally blank 2.2 Price adjustment for LRUs removal rate reconciliation [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 97/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED Any difference, to be measured in units and tens, between the RRR and the MRR pursuant to the conditions set out in Clause 11.1 (iii) and (iv) of the Agreement, shall be invoiced or credited, provided the Company is not in Default of any of its obligations pursuant to this Agreement, per airborne FH on the basis of: + +for [*****] + +[*****] [*****] + +for [*****] + +[*****] [*****] + +for [*****] [*****] + +[*****] [*****] + +In addition, at each reconciliation based on the actual flown flight hours, the Repairer shall credit back: + +[*****] 2.3 Early Events + +The Parties agree that the prices for each Service subject to Scheduled Events are based on the achievement of the applicable maintenance program(s), expressed in [*****]. + +In case of deviation of the Scheduled Event maintenance program parameters by a number of [*****] shall be considered an Early Event. + +For any Early Event, whichever the context, the Repairer shall invoice the Company an amount equal to the Lost Potential multiplied by the applicable price mentioned in Clause 1.3 of this Exhibit. 2.4 Calendar Limits + +For propellers and landing gears, the prices given in Clause 1.3.2 of this Exhibit 14 are subject to the achievement of the applicable [*****] specified in Clause 1.2 of Exhibit 11 ("Main Elements Services") hereto. In case a maintenance event is necessary to comply with a calendar limit, the Company shall settle the applicable prices in Clauses 1.3.2 and 3 of this Exhibit 14 at the time of the event, multiplied by the full interval specified in Clause 1.2 of Exhibit 11 ("Main Elements Services") hereto less the amount already paid by the Company to the Repairer for the number of [*****] accrued since the last overhaul. + + 3. Prices adjustment + +For the sake of clarity, the adjustment conditions set out in Clauses 3.1 and 3.2 below [*****]. 3.1 Commercial conditions for price adjustment 3.1.1 For Lease of the Stock, standard exchange Service and LRUs repair Service + +The prices set out in this Agreement will be increased, if applicable, [*****] in accordance with the following adjustment formula: + +[*****] [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 98/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED where: + +[*****] is the [*****] for the year N+1, and [*****], + +[*****]: is the [*****] as determined by economic conditions of year N (current year), + +[*****]: is the [*****] in the year N, + +[*****]: is the corresponding [*****] of the year N-1, + +[*****]: is the [*****] in the year N, + +[*****]: is the corresponding [*****] of the year N-1. + +Escalation is subject to a [*****] for Stock, Clause 1.1 of the Exhibit 14, and Standard Exchange services, Clause 1.2 of the Exhibit 14. + +Escalation is subject to a [*****] for LRU repair service, Clause 1.3 and Clause 2.2 of the Exhibit 14. + +Escalation is subject to a [*****]. 3.1.2 For Main Elements Services + +The prices set out in this Agreement relative to the Main Elements will be [*****]. + +Escalation is subject to a [*****] for Main Elements repair service [*****] In any case the final result of the applicable annual adjustment rate [*****] Clause 1.3 of the exhibit 14. 3.2 Technical conditions for prices adjustment + +The prices set out in this Exhibit 14 shall be modified [*****] at the occasion of the invoicing reconciliation pursuant to Clause 11 ("Reconciliation") if the Standard Operations of the Aircraft, analyzed at the time of the adjustment (all calculations are made with figures corresponding to [*****]), change by more or less [*****] with respect to the estimated values of the same parameters, considered at the time of commencement of the Term. + +As from the date this Agreement enters into force, the Parties agree to take into account the following basic operating parameters (the "Standard Operations") as a reference for the above calculation: (i) [*****] - [*****] - [*****] - [*****] (ii) [*****] - [*****] [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 99/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED - [*****] - [*****] + + 4. Specific conditions + +4.1 Company's Aircraft fleet change(s) + +[*****]. 4.2 Unused Aircraft + +During the Term, should any Aircraft remain temporarily unused for less than [*****] by the Company for whatever reason, the Company shall not request or obtain from the Provider a change in prices or terms and conditions set out in this Agreement in Clause 12 ("Invoicing and Payment terms"). + + 5. Phase-in: + +As a condition precedent to the entry into force of this Agreement, as reflected in Clause 17 ("Conditions Precedent"), the Company shall pay to the Repairer an amount corresponding for each Main Element and/or any sub-assembly thereof, to the number of FH or CY accrued since the last overhaul or since new as applicable, at the date of entry into force of the Agreement, multiplied by the applicable rate defined in Clauses 1.3 and 3 of this Exhibit 14 and applicable at the date of the first event. + + 6. Phase-out: Refundable maintenance provisions + +6.1 Upon termination of this Agreement with respect to one or more Aircraft and/or Services in accordance with the terms of this Agreement (except as a result of a Company Default) (the "Termination Date"), the Repairer shall reimburse the Company Maintenance Provisions related to landing gears maintenance services and/or their sub-component for ATR 72-600 only based on [*****] of the amount set out in Clause 1.3.2 of the Exhibit 14 ("Price Conditions")for maintenance services (the "Refund Amount"), taking into account the price applicable [*****] as per Clauses 3 of the Exhibit 14 ("Price Conditions") and when applicable adjusted every [*****] as per Clause 10 and 11, for [*****] for Main Elements: between the re-installation on such Aircraft after the last shop repair or overhaul or exchange occurred under this Agreement, as evidenced in the relevant EASA, FAA, TC, or ANAC release form and ending on the Termination Date. + +For sake of clarity, since the Company will pay such service based on, [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 100/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED + + - for ATR 42-500, ATR 72-500 and ATR 72-600, [*****] of the price by the hours and [*****] - for ATR 72-600, [*****] of the price by the hours and [*****], - for ATR 42-500 and ATR 72-500 [*****] of the price by the hours and [*****], + +[*****]. In addition, it is agreed by the parties that [*****] out of [*****] of the maintenance provision paid for the maintenance of the landing gears [*****]. + +Should any Aircraft be an ATR and/or ATR Affiliate's property, then Refund Amount shall be reimbursed to the owner. + +The Repairer will reimburse the Refund Rate provided that: (i) the Company has returned to the Repairer all Spare(s), Main Element(s), Items of the Stock, Core Units and unserviceable LRUs theRepairer may have delivered or to be returned to the Repairer according to the terms of this Agreement, and (ii) The Company has paid to the Repairer all amounts due under this Agreement , and (iii) The Company is not in Default of any of its obligations under this Agreement. 6.2 It is also understood that [*****] to be taken into account for such a refund process are only those accrued for the original Main Element(s) of Aircraft when fitted on Company's Aircraft or alternatively spare(s) main elements of Company property. [*****] accrued on Spare Main Element(s) provided by the Repairer to the Company under this Agreement and/or any Main Element(s) different from those installed on Aircraft on the date they were originally delivered to the Company or not owned by the Company shall not be taken into account in the calculation of the Refund Rate phase-out set out in this Clause 6. 6.3 Such phase out shall occur simultaneously with the final reconciliation as per Clause 11.2 of this Agreement. [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 101/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED EXHIBIT 15 - ADVANCED POOL SERVICE + +1. Advanced Pool Stock Availability + +With the scope of further facilitating the maintenance operations of the Company, Repairer agrees to make available the Advanced Pool Stock to the Company and Company agrees to store the Advanced Pool Stock in a restricted area at the Storage Location. The provision, holding, use and disposal of the Advanced Pool Stock and its review shall be subject to the terms and conditions of this Agreement. + + 2. Provision and value of the Advanced Pool Stock + +2.1 The Advanced Pool Stock is composed of items defined in Exhibit 16 ("Advanced Pool Stock"), which may be either brand new items or Used Serviceable Items depending on availability of each item of the Advanced Pool Stock into Repairer's inventory at the time of their respective delivery. 2.2 The Advanced Pool Stock is governed by this Agreement until it is (i) either returned to the Repairer at the Expiry Date, (ii) purchased by Company in accordance with Clause 6 hereunder, or (iii) upon redelivery of the Advanced Pool Stock to Repairer after the termination of this Agreement pursuant to Clause 16 of this Agreement. 2.3 The Advanced Pool Stock shall be provided to Company by Repairer for the duration of the Term provided Company has met each of the Conditions Precedent set out in Clause 17 of the Agreement to the satisfaction of the Repairer before the Start Date. 2.4 The Advanced Pool Stock total value, under economic conditions 2010, shall be: + +[*****] + +For the sake of clarity, the total Stock value of Exhibit 16 ("Advanced Pool Stock") list shall be: [*****]. + +In the event the Repairer delivers Used Serviceable Items to the Company, the value of each such Used Serviceable Items shall be quoted at [*****] of the brand new value indicated in Exhibit 16 ("Advanced Pool Stock") and the total value of the Advanced Pool Stock shall be adjusted accordingly. + + 3. Delivery + +3.1 The items of the Advanced Pool Stock will be delivered by Repairer to Company, with the relevant airworthiness documents (certificate of conformity, ANAC SEGVOO 003, EASA Form 1 or FAA Form 8130-3), [*****] ATR stores located at the address set forth in Clause 6.1 of this Agreement, or such other location as Repairer may from time to time notify to Company. 3.2 Delivery of the Advanced Pool Stock shall take place gradually. Repairer shall use its reasonable efforts to deliver [*****] of the items of the Advanced Pool Stock (in quantity) at the Start Date. Delivery of the Advanced Pool Stock shall be subject to the Stock delivery. [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 102/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED 3.3 Notwithstanding the fact that the Repairer is the owner of the Advanced Pool Stock, all risks whatsoever and howsoever relating to or arising in connection with the Advanced Pool Stock and any item of the Advanced Pool Stock, shall be transferred to, vested in and borne by the Company as from the delivery of each item of the Advanced Pool Stock by Repairer to Company. 3.4 Company shall be responsible for and proceed to custom clearance of any item of the Advanced Pool Stock. Within a maximum [*****] lead time from the date any item of the Advanced Pool Stock is delivered, Company shall provide Repairer with evidence that any fees, customs duties, and customs declarations has been paid and made, failing which Repairer may consider such failure as a Company Default pursuant Clause 16 of this Agreement. + + 4. Management and Handling Procedures + +4.1 Location + + + +i. Company shall keep the Advanced Pool Stock in secured warehouse facilities at the Storage Location, the use of which is reserved for storing and protecting the Advanced Pool Stock owned by Repairer. These facilities shall be separated from any areas used to store any other equipment and the Storage Location shall be clearly marked with the inscription "ATR PROPERTY". All the items of the Advanced Pool Stock will be stored with their corresponding documentation. + + ii. Company agrees to maintain the Advanced Pool Stock by applying the best standard methods for storage and maintenance as requiredby applicable EASA regulations at its own maintenance and storage costs, particularly for parts subject to limited shelf life or cure date. + + iii. Company shall promptly notify the Repairer any loss or damage to the Advanced Pool Stock whilst under its management. + + iv. Prior to the Delivery Date and upon each renewal of any policy, the Company shall supply the Repairer with certificates of insurancecompliant with the terms and conditions set out in Clause 8 of this Agreement. + + + +v. If at any time during the term, the Storage Location is not owned by the Company and is leased from a third party, the Company shall advise the Repairer of the name and address of the owner or landlord of such facilities or if any change of the owner or landlord occurs. It shall be the responsibility of the Company to notify said owner or landlord of the Repairer's right of ownership in and to the Advanced Pool Stock and copy the Repairer of such notification. + + vi. The Company agrees to assume liability for and to indemnify and keep harmless Repairer against any loss, cost, expense (including the fees of professional advisers and out of pocket expense), financial liability, taxes, damage or monetary loss of any kind which Repairer may suffer or incur as a consequence of the loss or damage to any item of the Advanced Pool Stock. + + 4.2 Use + +The Company shall be entitled to, provided no Company Default has occurred and is continuing, withdraw and use any of the items of the Advanced Pool Stock pursuant standard [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 103/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED exchange service conditions defined in Exhibit 9 and in accordance with its operational needs, solely for the remedy of parts associated defects on the Aircraft covered under this Agreement. + + 4.3 Inventory + +The Repairer or its agent shall have the right to inspect the Advanced Pool Stock and to audit any records relating thereto at any reasonable time upon giving prior written notice to the Company. The Company shall provide full access to enable the Repairer to conduct periodic inventory inspection of the Advanced Pool Stock. + +Should any part of the Advanced Pool Stock be missing, partially or totally damaged, or has not its appropriate airworthiness documentation at the time the Repairer or its agent carries out its inspection/audit, and if the Company cannot justify the part being under repair, the Company shall have a period of [*****] to remedy the situation to the satisfaction of the Repairer, failing which, the Repairer shall invoice the Company the price for any such lost or damaged item at the ATR spare parts catalogue price applicable at the date of such invoice. + + 5. Purchase Option + +[*****] + + 6. Modifying the Composition of the Advanced Pool Stock + +Upon either party's request, the parties agree to review the content of the Advanced Pool Stock at the first anniversary date of the Start Date. Shall the parties agree to modify the content of the Advanced Pool Stock, the following conditions shall apply: + + i. item returned by the Company that has never been used by the Company since the Start Date, is received by the Repairer in serviceablecondition, in its original packaging and with all appropriate airworthiness documents; + + ii. the item shall be returned in accordance with the provisions of Clause 6.2 of this Agreement; and + + iii. if an item is returned to the Repairer from the Advanced Pool Stock, the value of the Advanced Pool Stock shall be modified bysubtraction of the initial value of the concerned item; and + + iv. if an item is added to the Advanced Pool Stock, the value of the Advanced Pool Stock shall be increased pursuant to the ATR SparesCatalogue price for the added item at the economical condition of the moment the Advanced Pool Stock is modified. + +The Company shall be responsible for and pay any costs incurred by the return to Repairer and/or replacement of such items of the Advanced Pool Stock, including but not limited to transportation costs, customs duties, formalities and commissions, re-certification fees if documents are missing or damages are found. + + 7. Purchase or Return of the Advanced Pool Stock + +7.1 Promptly on the Expiry Date, and subject to Clause 5 of this Exhibit 15, the Company shall [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 104/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED have the option to: + + i. [*****] + + ii. re-deliver the items of the Advanced Pool Stock to the Repairer in accordance with Clause 6.2 of this Agreement or to any other addressindicated from time to time by Repairer to the Company, in accordance with the following terms and conditions. 7.2 In the event that any items are delivered back to the Repairer without the appropriate airworthiness documentation, or whenever the parts are returned without the original documents supplied by the Repairer, or if the Repairer has to test, to replace or to repair such returned item(s) of the Advanced Pool Stock due to damage or deterioration as a result of incorrect storage, inappropriate packaging and/or transport, or for any other reason whatsoever, the Company is liable for any associated re-certification, repair, overhaul, or replacement costs for such items at the ATR catalogue prices applicable on the date of delivery of such item to the Company. 7.3 If the Company fails to deliver the Advanced Pool Stock or any part(s) of the Advanced Pool Stock within [*****] of the Expire Date, the Company shall pay late return fees equal to [*****] of the value of the non returned part(s), per Day since the Expire Date, until: a) the missing part(s) are duly received by the Repairer, or b) a maximum [*****] from the Expire Date. The Repairer will be entitled to withdraw such late return fees from the Security Deposit pursuant to Clause 13. 7.4 The Company acknowledges and agrees that in the event any item of the Advanced Pool Stock, or the entire Advanced Pool Stock, is not re- delivered to the Repairer within [*****] of the Expire Date, this item or the Advanced Pool Stock shall be deemed lost, and the Repairer will invoice this item of the Advanced Pool Stock to the Company at the ATR spare parts Catalogue price in force at the date of delivery of any such item of the Advanced Pool Stock. Should the Company fail to pay such invoice, Repairer will be entitled, at its sole discretion, to withdraw the corresponding amount(s) from the Security Deposit. + + 8. Payment and Transfer of the Title to Property + +8.1 Save as otherwise set out in this Agreement, the purchase price for any item of the Advanced Pool Stock shall be paid in accordance with the provisions of Clause 12. 8.2 Notwithstanding the provisions of Clause 6 of Exhibit 9, title to the Advanced Pool Stock or any item thereof shall remain with the Repairer at all times until such Advanced Pool Stock or part thereof has been purchased by the Company and provided that the amount of the corresponding invoice has been fully received by the Repairer in accordance with Clauses 10 and 12 of this Agreement. The Company specifically agrees that it shall not acquire any interest, equity or share of the Advanced Pool Stock, or pledge or create any lien of any sort whatsoever prior to the transfer of title to the Advanced Pool Stock to the Company in accordance with this Agreement. It is hereby acknowledged and agreed that the Company is appointed as the custodian of the Advanced Pool Stock, which appointment the Company hereby accepts until such time as the Repairer has received the Company's payment in full for the Advanced Pool Stock or any item if the Advanced Pool Stock in case such Advanced Pool Stock or item is either missing, damaged, without airworthiness documentation, purchased by the Company or not returned by the Company to the Repairer in accordance with the provisions of this Agreement. + + 8.3 The Company may not, under any circumstances, perform or permit any action to be taken that [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 105/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version may be detrimental to the Repairer's title to and property in the Advanced Pool Stock, including without limitation: + + i. the Company must not transfer, sell, charge, pawn, mortgage, negotiate, dispose of, or intend to negotiate or dispose of the AdvancedPool Stock or any item of the Advanced Pool Stock ; and + + + +ii. the Company shall take the necessary measures in order to prevent the Advanced Pool Stock or part of the Advanced Pool Stock from being seized or taken away, or to check the Advanced Pool Stock in the event of a seizure by distress or any other similar legal process. However, if the Advanced Pool Stock or part of the Advanced Pool Stock is seized or taken away, the Company must immediately inform the Repairer in writing and indemnify the Repairer for any losses, costs or expenses incurred by the Repairer as a result of the above-mentioned events, and shall mitigate any such Losses, costs or expenses by using its best efforts to re-possess the Advanced Pool Stock or to re-acquire the Advanced Pool Stock or any item of the Advanced Pool Stock. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 106/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED EXHIBIT 16 - ADVANCED POOL STOCK + +The following Exhibit is composed of two (2) pages, into which are listed [*****] part numbers. + +First List for [*****] specific fleet contains [*****] part numbers [*****] DESCRIPTION [*****] [*****] CONDENSER [*****] [*****] COOLING UNIT [*****] [*****] VALVE-TURBINE INLET CONTROL [*****] [*****] AUDIO CONTROL PANEL [*****] [*****] CONTROL UNIT-HF [*****] [*****] REMOTE CONTROL AUDIO UNIT [*****] [*****] CONTROL UNIT-BUS POWER,DC [*****] [*****] CONTROL UNIT-GENERATOR,AC [*****] [*****] STARTER GENERATOR-DC [*****] [*****] PROBE-CCAS ALPHA [*****] [*****] PROBE-PITOT [*****] [*****] VALVE-HP AIR BLEED [*****] [*****] EXCITER - IGNITION I.C. [*****] [*****] SERVO VALVE [*****] [*****] FUEL PUMP [*****] TOTAL + +Second List for [*****] specific fleet contains [*****] part numbers [*****] DESCRIPTION [*****] [*****] REMOTE CONTROL AUDIO UNIT [*****] [*****] REMOTE CONTROL AUDIO UNIT [*****] [*****] CONTROL UNIT-BUS POWER,DC [*****] [*****] FCU-HYDRO MECHANICAL [*****] [*****] FCU-HYDRO MECHANICAL [*****] [*****] AUDIO CONTROL PANEL [*****] [*****] EXCITER - IGNITION I.C. [*****] [*****] EXCITER - IGNITION I.C. [*****] [*****] PROBE-CCAS ALPHA [*****] [*****] PROBE-CCAS ALPHA [*****] [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 107/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED [*****] DESCRIPTION [*****] [*****] CONTROL UNIT-GENERATOR,DC [*****] [*****] SERVO VALVE [*****] [*****] CONTROL UNIT-VHF [*****] [*****] CONDITIONER,TORQUE SIGNAL [*****] [*****] ALTIMETER-STANDBY,MILLIBARS [*****] [*****] CONTROL UNIT-VHF [*****] [*****] ELECTRONIC SYSTEM UNIT [*****] [*****] INDICATOR-STANDBY HORIZON [*****] [*****] CONTROL,AUTOFEATHER [*****] [*****] CONTROL,AUTOFEATHER [*****] [*****] GOVERNOR-PROPELLER OVSP [*****] [*****] PUMP-PROPELLER FEATHERING [*****] [*****] PUMP-PROPELLER FEATHERING [*****] [*****] SWITCH-PROXIMITY [*****] TOTAL [*****] [*****] [*****] DESCRIPTION [*****] [*****] PROBE PITOT [*****] + +ALL ITEMS, PARTS, COMPONENTS, SERVICES, WARRANTIES AND GUARANTEES PROVIDED HEREUNDER ARE PROVIDED SUBJECT TO CLAUSE 14 OF THE AGREEMENT. [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 108/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version EXHIBIT 17 - INSURANCE CERTIFICATES + +ALL ITEMS, PARTS, COMPONENTS, SERVICES, WARRANTIES AND GUARANTEES PROVIDED HEREUNDER ARE PROVIDED SUBJECT TO CLAUSE 14 OF THE AGREEMENT. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 109/110 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version EXHIBIT 18 - NOTA FISCAL REPORTING + +Reporting 1: + +Dedicated to the pool import + 1st standard exchange loop + +Shall be submitted once (after all serviceable parts from the pool sent to Azul) + +Part number Serial number + +Nota Fiscal CFOP 5949 number Flow Azul -> Helibras + +Nota Fiscal CFOP 5949 number Flow Helibras -> Azul Fiscal value Table with XXX lines (XXX = number of parts to be imported) ... + +Reporting 2: + +Dedicated to subsequent standard exchanges + +Shall be submitted on a monthly basis + +Part number Serial number + +Nota Fiscal CFOP 5949 number Flow Azul -> Helibras + +Nota Fiscal CFOP 5949 number Flow Helibras -> Azul Fiscal value ... + +ALL ITEMS, PARTS, COMPONENTS, SERVICES, WARRANTIES AND GUARANTEES PROVIDED HEREUNDER ARE PROVIDED SUBJECT TO CLAUSE 14 OF THE AGREEMENT. AZUL-ATR Global Maintenance Master Agreement DS/CS-3957/14/Issue 7 Page 110/110 + +Source: AZUL SA, F-1/A, 3/3/2017 \ No newline at end of file diff --git a/full_contract_txt/AzulSa_20170303_F-1A_EX-10.3_9943903_EX-10.3_Maintenance Agreement2.txt b/full_contract_txt/AzulSa_20170303_F-1A_EX-10.3_9943903_EX-10.3_Maintenance Agreement2.txt new file mode 100644 index 0000000000000000000000000000000000000000..9d108adb76fbcdda6343dea894dc2d6e64052fe0 --- /dev/null +++ b/full_contract_txt/AzulSa_20170303_F-1A_EX-10.3_9943903_EX-10.3_Maintenance Agreement2.txt @@ -0,0 +1,245 @@ +Execution version + + + + Amendment n° 01 to the Global Maintenance Agreement ref. DS/C-3957/14 Issue 7 dated March 9t h , 2015 + + + +BETWEEN + +AZUL LINHAS AÉREAS BRASILEIRAS S/A + +AND + +AVIONS DE TRANSPORT REGIONAL, G.I.E. AZUL-ATR Amendment N° 1 Global Maintenance Agreement Page 1/9 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version TABLE OF CONTENTS: CLAUSE PAGE + +1. DEFINITIONS 4 + +2. AMENDMENT 4 + +3. EFFECTIVE DATE AND DURATION 5 + +4. CONFIDENTIALITY 5 + +5. GOVERNING LAW - ARBITRATION 7 + +6. MISCELLANEOUS 8 AZUL-ATR Amendment N° 1 Global Maintenance Agreement Page 2/9 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED This amendment (hereinafter referred to as the "Amendment") is entered into on January 6th, 2016. + +BETWEEN: + +AZUL LINHAS AÉREAS BRASILEIRAS S/A, a company incorporated under the laws of Brazil, the registered office of which is located at Avenida Marcos Penteado de Ulhôa Rodrigues, 939 - Edif. Castello Branco Office Park - Torre Jatobá - 9° andar - CEP 06460-040 - Alphaville Industrial - Barueri - São Paulo - Brazil, identified under Cadastro Nacional de pessoa Juridica (CNPJ) number 09.296.295/0001-60. + +Hereafter referred to as the "Company" or "AZUL", + +On the one part, + +AND: + +AVIONS DE TRANSPORT REGIONAL, G.I.E., a French groupement d'intérêt économique established under articles L.251-1 to L251-23 of the French Commercial Code, whose registered office is at 1 allée Pierre Nadot, 31712 Blagnac, France identified under Corporate and Trade Register of Toulouse number 323 932 236, + +Hereafter referred to as the "Repairer' or "ATR", On the other part. + +Hereinafter individually referred to as the "Party" or collectively as the "Parties" + +RECITALS: + +WHEREAS the Repairer and the Company entered into a Global Maintenance Agreement as referenced here above (as amended and supplemented from time to time, hereafter referred to as the "GMA") for the purpose of providing the Company with Services for the maintenance of the Aircraft; and, + +WHEREAS in consideration of modification of the operations, the Repairer and the Company agree to amend the GMA in order to update the number of [*****] required for the invoicing; and, + +WHEREAS the Parties wish to amend certain provisions of the GMA upon the terms and conditions set out below. + +NOW THEREFORE, IT IS HEREBY AGREED AS FOLLOWS: [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Amendment N° 1 Global Maintenance Agreement Page 3/9 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED + +1. DEFINITIONS + +Unless otherwise defined, capitalised terms, singular or plural, used in this Amendment, shall have the same meaning ascribed thereto in the GMA. + + 2. AMENDMENT + +The following Clauses, sentences or words of the GMA are amended as follows: 2.1 Clause 12 - INVOICING AND PAYMENT TERMS (i) Clause 12.1(ii) of the GMA shall be cancelled and substituted as follow: [*****] [*****] [*****] [*****] [*****] [*****] [*****] [*****] (ii) Any other provision of Clause 12 shall remain in full force and effect. 2.2 Exhibit 14 - PRICE CONDITIONS (i) Clause 3.2 of the Exhibit 14 of the GMA shall be cancelled and substituted as follow: "3.2 Technical conditions for prices adjustment + +The prices set out in this Exhibit 14 shall be modified every [*****] at the occasion of the invoicing reconciliation pursuant to Clause 11 ("Reconciliation") if the Standard Operations of the [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Amendment N° 1 Global Maintenance Agreement Page 4/9 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED Aircraft, analyzed at the time of the adjustment (all calculations are made with figures corresponding to [*****], change by more or less [*****] with respect to the estimated values of the same parameters, considered at the time of commencement of the Term. + +As from the date this Agreement enters into force, the Parties agree to take into account the following basic operating parameters (the "Standard Operations") as a reference for the above calculation: + + (i) [*****] + + - [*****] + + (ii) [*****] + + - [*****] + +(ii) Any other provision of the Exhibit 14 shall remain in full force and effect. + + 3. EFFECTIVE DATE AND DURATION + +This Amendment shall enter into force on the date of its signature by both Parties and, unless otherwise agreed upon in writing by the Parties through a subsequent amendment to the GMA, shall remain in force for the term of the referenced GMA. + + 4. CONFIDENTIALITY + +4.1 Confidentiality obligations + +Unless otherwise provided in this Amendment, any Confidential Information released by either of the Parties (the "Disclosing Party") to the other Party (the "Receiving Party") shall not be released in whole or in part to any third party. + +In particular, the Receiving Party undertakes: + + - to keep the Confidential Information strictly confidential, not to deliver, disclose or publish it to any third party including subsidiarycompanies and companies having an interest in its capital, except as otherwise agreed in writing by the Disclosing Party; + + - to use the Confidential Information solely for the purpose of this Amendment and except as otherwise expressly agreed in writing bythe Disclosing Party, not to use the same or permit its use for any other purpose; + + + +- to disclose the Confidential Information only to those of its direct employees having a need to know such Confidential Information in order to make permitted use thereof, after having beforehand clearly informed such employees of the strictly confidential nature of the Confidential Information and caused them to observe said conditions of confidentiality. The Receiving Party shall be responsible for the correct performance of said obligations of confidentiality by its employees and shall keep up to date the list of its personnel, to whom Confidential Information is communicated, which list shall be made available to the Disclosing Party at its request; + + - not to duplicate the Confidential Information nor to copy or reproduce the same beyond the purpose of the Amendment; + + - not to disclose Confidential Information to any third party, unless such third party is acting at the instruction of the Receiving Party and such disclosure is reasonably necessary to accomplish the purpose of the Amendment, provided however, that prior to any such disclosure both of the following conditions are satisfied: [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Amendment N° 1 Global Maintenance Agreement Page 5/9 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version + + (i) each of such third parties, shall have signed an acknowledgement to keep such Confidential Information as strictly confidential;and, + + (ii) the Receiving Party shall have obtained written prior approval of the Disclosing Party of such proposed disclosure, whichapproval may be not unreasonably withheld or delayed. + + - promptly notify the Disclosing Party if a disclosure of Confidential Information is required by a Government Entity or by Law and to useall reasonable effort to assist the Disclosing Party in limiting such disclosure to the extent permitted by Law; + + - upon discovery of any disclosure of Confidential Information, regardless of whether such discovery is intentional or inadvertent, the Receiving Party shall promptly notify the Disclosing Party and take all reasonable actions (i) to retrieve the disclosed Confidential Information, (ii) to destroy any unauthorized copies thereof and (iii) to stop further disclosure. + +4.2 Non application of confidentiality obligations + +The obligations of Receiving Party with respect to Confidential Information as set forth in this Clause 4.1 above shall not be applicable to information which: + + (a) upon the Signing Date was part of the public domain or became part of the public domain after the disclosure, other than by a violationof the Amendment or any other non-disclosure Amendment or the applicable Law of any jurisdiction; or + + (b) was already lawfully known by the Receiving Party, as evidenced by written records bearing an unquestionable date, prior the SigningDate by the Disclosing Party and was unrestricted; or + + (c) was lawfully disclosed to the Receiving Party subsequently to the signature of the Amendment by a third party which had not receivedthe same directly or indirectly from the Disclosing Party and that such disclosure does not violate any non-disclosure Amendment. + + 4.3 Permitted disclosure of Confidential Information + +Notwithstanding any provision to the contrary in the Amendment, the Receiving Party shall be entitled to disclose Confidential Information if required to do so: + + (a) by order of a court or government agency of competent jurisdiction; or + + (b) by any applicable Law, + +provided, however, that prior to making such disclosure, the Receiving Party shall if possible advise the Disclosing Party of the circumstances requiring such disclosure in order to afford the Disclosing Party sufficient advance notice to permit to raise any objections that it may deem appropriate. + + 4.4 Disclosing Party's proprietary rights + +Any Confidential Information shall remain the property of the Disclosing Party. The Amendment shall not be construed as granting or conferring to the Receiving Party, either expressly or by implication, any license or proprietary interest in or to any Confidential Information nor any right of use beyond the purpose of this Amendment. + +The Repairer, its Affiliates and/or its Subcontractors as applicable shall remain the exclusive owner of any intellectual property right related to the Services including: design of the LRUs, Main Elements, job cards, task cards, operating manual or industrial process, as relevant. No title to or other ownership interest in AZUL-ATR Amendment N° 1 Global Maintenance Agreement Page 6/9 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version CONFIDENTIAL TREATMENT REQUESTED the Confidential Information is transferred except as specifically stated in the Amendment, and the Receiving Party hereby expressly disclaims any such rights or interests. + +The Receiving Party hereby acknowledges and recognises that Confidential Information is protected by copyright Laws and related international treaty provisions, as the case may be. + + 4.5 For the sake of clarity, and for the purpose of this Clause 4 and this Amendment, any of the receiving Party's Affiliates and their Subcontractors shall not be considered as third party and shall be entitled to have access to any Confidential Information disclosed by the disclosing Party in connection with this Amendment. 4.6 This Clause 4 shall survive termination or expiry of this Amendment for a period of five (5) years following such End Date. + +5. GOVERNING LAW - ARBITRATION + +5.1 Governing law: + +Pursuant to and in accordance with Section 5-1401 of the New York General Obligations Law, the Parties hereto agree that this Amendment in all respects, and any claim or cause of action based upon or arising out of this Amendment, or any dealing between the Parties relating to the subject matter of this Amendment or the transactions contemplated hereby or the Company/Repairer relationship being established, shall be governed by, and construed in accordance with, the laws of the State of New York, U.S.A. as applied to contracts to be performed wholly within the State of New York (Exclusive of Section 7-101 of the New York General Obligations Law which is inapplicable to this Amendment). + + 5.2 Arbitration: in the event of a dispute arising out of or relating to this Amendment, including without limitation disputes regarding the existence, validity or termination of this Amendment (a "Dispute"), either Party may notify such Dispute to the other through service of a written notice (the "Notice of Dispute"). The Parties shall make their reasonable endeavours to settle the Dispute amicably by a committee composed of one (1) management representative of each Party (the "Representatives"). Such committee shall be created by the Parties within [*****] from the date of receipt of the Notice of Dispute. + + + + + +5.2.1 Subject to sub-Clause 5.2.5 below and in the event the Representatives (i) fail to create such committee or (ii) do not agree on an amicable settlement within [*****] from the date the committee referred to in this sub-Clause 5.2 has been created or such longer period as may be agreed upon in writing by the Representatives (the "Amicable Settlement Period"), the Dispute shall be exclusively and finally settled under the Rules and Conciliation of Arbitration of the International Chamber of Commerce (the "ICC") by an arbitral tribunal composed of three (3) arbitrators; each Party shall then appoint one (1) arbitrator within [*****]from the last day of the Amicable Settlement Period and the third arbitrator, who will act as President, will be appointed by the other two (2) arbitrators. In case the two (2) arbitrators appointed by the Parties do not agree on this choice with [*****] from the date the last arbitrator is appointed, the third arbitrator will be appointed by the ICC Court. + + 5.2.2 The arbitration, and any proceedings, and meetings incidental to or related to the arbitration process, shall take place in New York, U.S.A, and the language to be used in the arbitral proceedings shall be English; arbitral award shall be final and binding upon the Parties. + + 5.2.3 The arbitration shall be kept confidential and the existence of the proceeding and any element of it shall not be disclosed to any third party. Any information relating to and/or documents generated for the purpose of or produced in the arbitration, including any awards, shall remain confidential [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission. AZUL-ATR Amendment N° 1 Global Maintenance Agreement Page 7/9 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version between the Parties, the arbitrators and any other Person involved in the arbitration proceedings, except to the extent that disclosure may be required pursuant to any order of court or other competent authority or tribunal, or to protect or pursue a legal rights or to enforce or challenge an award in bona fide legal proceedings before a state court or other judicial authority. + + 5.2.4 During any period of negotiation or arbitration, the Parties shall continue to meet their respective obligations in accordance with theprovisions of the Amendment. + + 5.2.5 Notwithstanding any provision of this Clause 5.2 the Parties may, at any time, seek and decide to settle a Dispute either throughdirect negotiations or in accordance with the ICC rules in respect of the alternative dispute resolution. + + 5.3 Judgment upon any award may be entered in any court having jurisdiction or application may be made to the court for a judicial recognition of the award or an order of enforcement, as the case may be. + + 5.4 Recourse to jurisdictions is expressly excluded except as provided for in the ICC Rules of Conciliation and Arbitration concerning Conservatory and Interim measures. + + 6. MISCELLANEOUS + + 6.1 This Amendment contains the entire agreement between the Parties regarding the subject-matter and shall supersede any previous understandings, commitments and/or representations whatsoever oral or written. + + 6.2 In case of any inconsistency between the terms of the GMA and this Amendment regarding the subject-matter, the latter shall prevail. + +To the extent not inconsistent with this Amendment, all terms and conditions of the GMA shall remain valid and binding. + + 6.3 This Amendment shall not be varied or modified except by a written document duly signed by duly authorized representatives of both Parties. AZUL-ATR Amendment N° 1 Global Maintenance Agreement Page 8/9 + +Source: AZUL SA, F-1/A, 3/3/2017 + + + + + +Execution version IN WITNESS WHEREOF, the duly authorized representatives of the Parties hereto have agreed to execute this Amendment in two (2) original copies in the English language. On behalf of: /s/ Renato Covelo On behalf of: + +AZUL LINHAS AÉREAS BRASILEIRAS S/A (the Company) + +AVIONS DE TRANSPORT REGIONAL (the Repairer) + +Signed by: Renato Covelo Signed by: M. Castoriwa Function: Attorney In Fact Function: VP Commercial Date: December 18th, 2015 Date: January 6th, 2016 AZUL-ATR Amendment N° 1 Global Maintenance Agreement Page 9/9 + +Source: AZUL SA, F-1/A, 3/3/2017 \ No newline at end of file diff --git a/full_contract_txt/BABCOCK_WILCOXENTERPRISES,INC_08_04_2015-EX-10.17-INTELLECTUAL PROPERTY AGREEMENT between THE BABCOCK _ WILCOX COMPANY and BABCOCK _ WILCOX ENTERPRISES, INC..txt b/full_contract_txt/BABCOCK_WILCOXENTERPRISES,INC_08_04_2015-EX-10.17-INTELLECTUAL PROPERTY AGREEMENT between THE BABCOCK _ WILCOX COMPANY and BABCOCK _ WILCOX ENTERPRISES, INC..txt new file mode 100644 index 0000000000000000000000000000000000000000..40f195fa9a8dd7ea79ed11ee51391a29c4baf4fa --- /dev/null +++ b/full_contract_txt/BABCOCK_WILCOXENTERPRISES,INC_08_04_2015-EX-10.17-INTELLECTUAL PROPERTY AGREEMENT between THE BABCOCK _ WILCOX COMPANY and BABCOCK _ WILCOX ENTERPRISES, INC..txt @@ -0,0 +1,805 @@ +Exhibit 10.17 + +INTELLECTUAL PROPERTY AGREEMENT + +between + +THE BABCOCK & WILCOX COMPANY + +and + +BABCOCK & WILCOX ENTERPRISES, INC. + +dated as of + +June 26, 2015 + + + + + +TABLE OF CONTENTS ARTICLE I DEFINITIONS 1 + + Section 1.1 Definitions 1 + + Section 1.2 Interpretation 4 + +ARTICLE II INTELLECTUAL PROPERTY ASSIGNMENT AND OWNERSHIP 5 + + Section 2.1 Reserved 5 + + Section 2.2 Reserved 5 + + Section 2.3 Assistance by Employees; Inventor Compensation 5 + + Section 2.4 Ownership 6 + + Section 2.5 Rights Arising in the Future 6 + + Section 2.6 Abandonment of Certain Intellectual Property 7 + + Section 2.7 Reserved 7 + + Section 2.8 Steam/Its Generation and Use 7 + +ARTICLE III TRADEMARKS 8 + + Section 3.1 House Marks 8 + + Section 3.2 Limited License to Use SpinCo House Marks 9 + + Section 3.3 Removal of Classes from SpinCo Marks 10 + + Section 3.4 RemainCo Marks 10 + + Section 3.5 Duty to Avoid Confusion 10 + +ARTICLE IV SHARED LIBRARY MATERIALS 11 + + Section 4.1 Shared Library Materials 11 + + Section 4.2 Cross-License of Shared Library Materials 11 + + Section 4.3 Maintenance of Shared Library Materials 11 + + Section 4.4 Potential Allocation of Shared Library Materials 12 + + Section 4.5 Confidentiality and Trade Secret Status of Shared Library Materials 13 + + Section 4.6 Third Party Materials Contained in the Shared Library Materials 13 + +ARTICLE V INTELLECTUAL PROPERTY LICENSES AND COVENANTS 13 + + Section 5.1 Cross-License of Shared Know-How 13 + + Section 5.2 Reserved 14 + + Section 5.3 Reserved 14 i + + + + + + Section 5.4 Cross-Licenses of Software 14 + + Section 5.5 Reserved 15 + + Section 5.6 Sublicensing; Assignability 15 + + Section 5.7 Restrictions on Licensor Exploitation of Intellectual Property 16 + + Section 5.8 Third Party Agreements; Reservation of Rights 16 + + Section 5.9 Maintenance of Intellectual Property 16 + + Section 5.10 Covenants 17 + +ARTICLE VI TECHNICAL ASSISTANCE AND TECHNOLOGY TRANSFER 17 + + Section 6.1 Reserved 17 + + Section 6.2 Reserved 17 + + Section 6.3 No Additional Technical Assistance 17 + +ARTICLE VII NO WARRANTIES 18 + +ARTICLE VIII THIRD-PARTY INFRINGEMENT 18 + + Section 8.1 No Obligation 18 + + Section 8.2 Notice Regarding Infringement 19 + + Section 8.3 Suits for Infringement 19 + +ARTICLE IX CONFIDENTIALITY 21 + +ARTICLE X MISCELLANEOUS 22 + + Section 10.1 Authority 22 + + Section 10.2 Entire Agreement 22 + + Section 10.3 Binding Effect; Third-Party Beneficiaries; Assignment 23 + + Section 10.4 Amendment 23 + + Section 10.5 Failure or Indulgence Not Waiver; Remedies Cumulative 23 + + Section 10.6 Notices 23 + + Section 10.7 Counterparts 23 + + Section 10.8 Severability 23 + + Section 10.9 Governing Law 24 + + Section 10.10 Construction 24 + + Section 10.11 Performance 24 + +SCHEDULES Schedule 1.1(e) SpinCo Core Field; RemainCo Core Field Schedule 1.1(i) Specific RemainCo Field; Specific SpinCo Field Schedule 1.1(o) SpinCo House Marks Schedule 1.1(p) RemainCo House Marks ii + + + + + +Schedule 2.4(a) RemainCo Ownership Schedule 2.4(b) SpinCo Ownership Schedule 2.6 Abandonment of Certain Intellectual Property Schedule 3.1 SpinCo Trademarks Schedule 3.3 Required Actions and Filings Schedule 3.4 RemainCo Trademarks Schedule 4.1 Shared Library Materials Schedule 4.4 Nuclear Design Materials Schedule 5.4(a) Foundational Software iii + + + + + +INTELLECTUAL PROPERTY AGREEMENT + +This INTELLECTUAL PROPERTY AGREEMENT (this "Agreement") is entered into as of June 26, 2015 (the "Effective Date"), between The Babcock & Wilcox Company, a Delaware corporation, ("RemainCo") and Babcock & Wilcox Enterprises, Inc., a Delaware corporation ("SpinCo"). RemainCo and SpinCo are sometimes referred to herein individually as a "Party," and collectively as the "Parties." Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to such terms in Article 1 hereof. + +RECITALS + +WHEREAS, SpinCo is a wholly owned Subsidiary of RemainCo; + +WHEREAS, the Board of Directors of RemainCo has determined that it would be appropriate and in the best interests of RemainCo and its stockholders for RemainCo to separate the SpinCo Business from the RemainCo Business; + +WHEREAS, in order to effectuate the foregoing, RemainCo and SpinCo have entered into a Master Separation Agreement, dated as of June 8, 2015 (the "Master Separation Agreement"), which provides, among other things, upon the terms and subject to the conditions thereof, for the separation of the respective businesses of SpinCo and RemainCo and the Distribution, and the execution and delivery of certain other agreements, including this Agreement, in order to facilitate and provide for the foregoing; + +WHEREAS, it is the intent of the Parties, in order to facilitate the foregoing separation, in anticipation of the Distribution and in accordance with the Master Separation Agreement, that RemainCo convey to SpinCo certain Intellectual Property rights and licenses subject to the terms and conditions set forth in this Agreement; and + +WHEREAS, it is the intent of the Parties, in order to facilitate the foregoing separation, in anticipation of the Distribution and in accordance with the Master Separation Agreement, that SpinCo convey to RemainCo certain Intellectual Property rights and licenses subject to the terms and conditions set forth in this Agreement; + +NOW, THEREFORE, in consideration of the foregoing and the covenants and agreements set forth below and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound hereby, the Parties hereby agree as follows: + +ARTICLE I + +DEFINITIONS + +Section 1.1 Definitions. Except for the terms defined below, the capitalized terms used in this Agreement shall have the meanings ascribed to them in Section 1.1 of the Master Separation Agreement: + +"Confidential Information" has the meaning set forth in Section 9.2. 1 + + + + + +"Foundational Software" has the meaning set forth in Section 5.4(a). + +"Intellectual Property" means the rights associated with or arising out of any of the following in any jurisdiction throughout the world: (i) all patents and patent applications, together with all reissuances, divisionals, continuations, continuations-in-part, revisions, renewals, extensions, and reexaminations thereof, and any identified invention disclosures ("Patents"); (ii) trade secret rights and corresponding rights in confidential information and other non-public information (whether or not patentable), including ideas, formulas, compositions, inventor's notes, discoveries and improvements, know how, manufacturing and production processes and techniques, design manuals, testing information (including testing protocols and results), research and development information, prototypes, inventions, invention disclosures, unpatented blueprints, drawings, specifications, designs, plans, proposals and technical data, business and marketing plans, market surveys, market know-how and customer lists and information, including all tangible embodiments of the foregoing and unregistered copyrights ("Know-How"); (iii) all registered or unregistered copyrights, copyrightable works, rights in databases, data collections, "moral" rights, mask works, copyright registrations, applications and extensions therefor and corresponding rights in works of authorship ("Copyrights"); (iv) all trademarks, service marks, logos, trade dress and trade names indicating the source of goods or services, and other indicia of commercial source or origin (whether registered, common law, statutory or otherwise), all registrations and applications to register the foregoing anywhere in the world and all goodwill associated therewith ("Trademarks"); (v) all computer software and code, including assemblers, applets, compilers, source code, object code, development tools, design tools, utilities, library files, user interfaces and data, and all documentation and manuals related to such computer software and code in any form or format, however fixed ("Software"); (vi) all internet electronic addresses, uniform resource locators and alphanumeric designations associated therewith and all registrations for any of the foregoing ("Domain Names"); and (vii) any similar, corresponding or equivalent rights to any of the foregoing anywhere in the world. + +"IP Proceedings" has the meaning set forth in Section 2.3. + +"Licensed RemainCo Know-How" has the meaning set forth in Section 5.1(b). + +"Licensed SpinCo Know-How" has the meaning set forth in Section 5.1(a). + +"Licensed RemainCo Intellectual Property" means all Licensed RemainCo Know-How and, to the extent licensed by RemainCo hereunder, RemainCo's right, title and interest in and to Shared Library Materials and Foundational Software. + +"Licensed SpinCo Intellectual Property" means all Licensed SpinCo Know-How and, to the extent licensed by SpinCo hereunder, SpinCo's right, title and interest in and to Shared Library Materials and Foundational Software. + +"Master Separation Agreement" has the meaning set forth in the recitals. + +"Nuclear Design Materials" has the meaning set forth in Section 4.4. + +"Notifying Party" has the meaning set forth in Section 4.4. 2 + + + + + +"RemainCo" has the meaning set forth in the recitals. + +"RemainCo Core Field" has the meaning set forth on Schedule 1.1(e). + +"RemainCo House Marks" means all Trademarks that incorporate "BWX," "BWX Technologies," or "BWXT," and any translations or derivatives thereof and any terms of a confusingly similar nature, and all goodwill embodied in the foregoing, including, without limitation, all Trademarks set forth on Schedule 1.1(p), but expressly excluding "Babcock," "Wilcox," "Babcock and Wilcox," "Babcock & Wilcox," B&W," or "B&W & HERO ENGINE DESIGN." + +"RemainCo Know-How" means all Know-How owned by RemainCo as of the Effective Date. + +"RemainCo Trademarks" has the meaning set forth in Section 3.4. + +"Reviewing Party" has the meaning set forth in Section 4.4. + +"Shared Library Materials" means (i) proprietary research reports, letter reports, photographs, micrographs or other materials recorded in a tangible, microfilm, microfiche, and/or electronic form or media, or a combination thereof, which may contain trade secrets, know-how, methods, techniques, formulas, drawings, sketches or other proprietary materials reduced to tangible form, and which were developed by and/or contained in the Research & Development Division library at the former Alliance Research Center in Alliance, Ohio ("Research Documents") and (ii) publicly available books, textbooks, reference manuals, periodicals, journals or other publications that were located at the Research & Development Division library at the former Alliance Research Center in Alliance, Ohio ("Reference Materials"), in each case which are presently stored in certain identified vaults and storage accounts maintained with Third Party vendor document retention vendor Iron Mountain. + +"Specific RemainCo Field" has the meaning set forth on Schedule 1.1(i). + +"Specific SpinCo Field" has the meaning set forth on Schedule 1.1(i). + +"SpinCo" has the meaning set forth in the recitals. + +"SpinCo Core Field" has the meaning set forth on Schedule 1.1(e). + +"SpinCo House Marks" means all Trademarks that incorporate "Babcock," "Wilcox," "Babcock and Wilcox," "Babcock & Wilcox," "B&W," or "B&W & HERO ENGINE DESIGN" and any translations or derivatives thereof and any terms of a confusingly similar nature, and all goodwill embodied in the foregoing, including, without limitation, all Trademarks set forth on Schedule 1.1(o), but expressly excluding "BWX Technologies," "BWXT" and "BWX". + +"SpinCo Know-How" means all Know-How owned by SpinCo as of the Effective Date. + +"SpinCo Trademarks" has the meaning set forth in Section 3.1(a). 3 + + + + + +"Steam Book" has the meaning set forth in Section 2.8. + +Section 1.2 Interpretation. In this Agreement, unless the context clearly indicates otherwise: + +(a) words used in the singular include the plural and words used in the plural include the singular; + +(b) if a word or phrase is defined in this Agreement, its other grammatical forms, as used in this Agreement, shall have a corresponding meaning; + +(c) reference to any gender includes the other gender and the neuter; + +(d) the words "include," "includes" and "including" shall be deemed to be followed by the words "without limitation"; + +(e) the words "shall" and "will" are used interchangeably and have the same meaning; + +(f) the word "or" shall have the inclusive meaning represented by the phrase "and/or"; + +(g) relative to the determination of any period of time, "from" means "from and including," "to" means "to but excluding" and "through" means "through and including"; + +(h) all references to a specific time of day in this Agreement shall be based upon Eastern Standard Time or Eastern Daylight Savings Time, as applicable, on the date in question; + +(i) whenever this Agreement refers to a number of days, such number shall refer to calendar days unless Business Days are specified; + +(j) reference to any Article, Section or Schedule means such Article or Section of, or such Schedule to, this Agreement, as the case may be, and references in any Section or definition to any clause means such clause of such Section or definition; + +(k) the words "this Agreement," "herein," "hereunder," "hereof," "hereto" and words of similar import shall be deemed references to this Agreement as a whole and not to any particular Section or other provision of this Agreement; + +(l) the term "commercially reasonable efforts" means efforts which are commercially reasonable to enable a Party, directly or indirectly, to satisfy a condition to or otherwise assist in the consummation of a desired result and which do not require the performing Party to expend funds or assume Liabilities other than expenditures and Liabilities which are customary and reasonable in nature and amount in the context of a series of related transactions similar to the Separation; 4 + + + + + +(m) reference to any agreement, instrument or other document means such agreement, instrument or other document as amended, supplemented and modified from time to time to the extent permitted by the provisions thereof and by this Agreement; + +(n) reference to any Law (including statutes and ordinances) means such Law (including any and all rules and regulations promulgated thereunder) as amended, modified, codified or reenacted, in whole or in part, and in effect at the time of determining compliance or applicability; + +(o) references to any Person include such Person's successors and assigns but, if applicable, only if such successors and assigns are permitted by this Agreement; a reference to such Person's "Affiliates" shall be deemed to mean such Person's Affiliates following the Distribution and any reference to a Third Party shall be deemed to mean a Person who is not a Party or an Affiliate of a Party; + +(p) if there is any conflict between the provisions of the main body of this Agreement and the Schedules hereto, the provisions of the main body of this Agreement shall control unless explicitly stated otherwise in such Schedule; + +(q) the titles to Articles and headings of Sections contained in this Agreement, in any Schedule and in the table of contents to this Agreement have been inserted for convenience of reference only and shall not be deemed to be a part of or to affect the meaning or interpretation of this Agreement; and + +(r) any portion of this Agreement obligating a Party to take any action or refrain from taking any action, as the case may be, shall mean that such Party shall also be obligated to cause its relevant Subsidiaries and Affiliates to take such action or refrain from taking such action, as the case may be. + +ARTICLE II + +INTELLECTUAL PROPERTY ASSIGNMENT AND OWNERSHIP + +Section 2.1 Reserved. + +Section 2.2 Reserved. + +Section 2.3 Assistance by Employees; Inventor Compensation. Each Party agrees that it shall make available to the other Party the services of its employees and contractors reasonably necessary to assist the other Party with the prosecution of, and other patent or trademark office proceedings (e.g., reissue, reexamination, interference, inter partes review, post-grant review, supplemental examination, and other similar proceedings) regarding the other Party's Patents, Trademarks and other Intellectual Property (collectively, "IP Proceedings"). Each Party agrees to reasonably make available to the other Party (i) inventors and other reasonably necessary persons employed by it for the other Party's reasonable needs regarding execution of documents, interviews, declarations and testimony, and (ii) documents, materials and information for the other Party's reasonable good faith needs regarding such IP Proceedings. The Party involved in the IP Proceedings shall be responsible for the actual and reasonable out-of-pocket expenses 5 + + + + + +associated with such assistance, expressly excluding the value of the time of the other Party's personnel. Each Party will be responsible for providing inventor incentive compensation to its employees under its own internal policies. No Party shall have any obligation to provide any inventor incentive compensation to an employee of the other Party except as required by law. + +Section 2.4 Ownership. + +(a) SpinCo expressly acknowledges that, as between RemainCo and SpinCo (and any other member of the SpinCo Group), as of the Distribution Time and after effectuating all Prior Transfers and all assignments contemplated in the Intellectual Property Agreements, RemainCo is and shall be the sole and exclusive owner of the Intellectual Property set forth on Schedule 2.4(a), and SpinCo agrees that it shall do nothing inconsistent with such ownership. + +(b) RemainCo expressly acknowledges that, as between SpinCo and RemainCo (and any other member of the RemainCo Group), as of the Distribution Time and after effectuating all Prior Transfers and all assignments contemplated in the Intellectual Property Agreements, SpinCo is the sole and exclusive owner of the Intellectual Property set forth on Schedule 2.4(b), and RemainCo agrees that it shall do nothing inconsistent with such ownership. + +(c) If, within thirty-six (36) months of the Distribution Date, either Party has a good faith belief, based on reasonable inquiry, that Schedule 2.4(a) or Schedule 2.4(b) contains an error as to the allocation of ownership of any item of Intellectual Property set forth therein or that, as of the Distribution Date, any item of Intellectual Property was not otherwise properly allocated between RemainCo and the members of the RemainCo Group on the one hand and SpinCo and members of the SpinCo Group on the other hand, such Party will provide written notice to the other party regarding the error or discrepancy and the Parties shall, or shall cause the relevant members of the RemainCo Group and/or SpinCo Group, as necessary, to negotiate in good faith a mutually agreeable resolution. + +Section 2.5 Rights Arising in the Future. + +(a) As between RemainCo and SpinCo, unless otherwise agreed in writing by RemainCo or any member of the RemainCo Group and SpinCo or any member of the SpinCo Group, any and all Intellectual Property created, conceived, or actually reduced to practice by or on behalf of RemainCo or any member of the RemainCo Group after the Distribution Date, including, without limitation, any improvements or modifications to any Licensed SpinCo Intellectual Property or Shared Library Materials or any other Intellectual Property licensed by any member of the RemainCo Group or the SpinCo Group pursuant to any other Intellectual Property Agreement, shall belong solely and exclusively to RemainCo and neither SpinCo nor any member of the SpinCo Group shall have any right, title or interest in or to such Intellectual Property. RemainCo shall have no obligation to notify SpinCo or any member of the SpinCo Group of any such improvements or modifications or to disclose or license any such improvements or modifications to SpinCo or any member of the SpinCo Group. + +(b) As between RemainCo and SpinCo, unless otherwise agreed in writing by RemainCo or any member of the RemainCo Group and SpinCo or any member of the SpinCo Group, any and all Intellectual Property created, conceived, or actually reduced to practice by or 6 + + + + + +on behalf of SpinCo or any member of the SpinCo Group after the Distribution Date, including, without limitation, any improvements or modifications to any Licensed RemainCo Intellectual Property or Shared Library Materials or any other Intellectual Property licensed by any member of the RemainCo Group or the SpinCo Group pursuant to any other Intellectual Property Agreement, shall belong solely and exclusively to SpinCo and neither RemainCo nor any member of the RemainCo Group shall have any right, title or interest in or to such Intellectual Property. SpinCo shall have no obligation to notify RemainCo or any member of the RemainCo Group of any such improvements or modifications or to disclose or license any such improvements or modifications to RemainCo or any member of the RemainCo Group. + +Section 2.6 Abandonment of Certain Intellectual Property. SpinCo and RemainCo acknowledge and agree that, as of the Distribution Date, neither SpinCo nor RemainCo has an interest in maintaining or continuing the prosecution and maintenance of the Intellectual Property set forth on Schedule 2.6, which Intellectual Property will be owned and controlled by the SpinCo Group as of the Distribution. SpinCo will, and will cause the applicable members of the SpinCo Group, to take all actions necessary to discontinue the maintenance and prosecution of the Intellectual Property set forth on Schedule 2.6 as of the date any applicable renewal fees are due in the future. For clarity, SpinCo shall not be obligated to affirmatively abandon such Intellectual Property prior to the date that any renewal fees are due in the future. + +Section 2.7 Reserved. + +Section 2.8 Steam/its generation and use. The Parties acknowledge and agree that the engineering textbook/publication titled "Steam/its generation and use" and previously titled "Steam" (the "Steam Book") is a highly regarded and well respected publication in worldwide utility and industrial power generation fields. SpinCo and RemainCo acknowledge and agree that, as of the Distribution Date, SpinCo (i) owns all right, title and interest in and to the Copyright in all editions of the Steam Book throughout the world; (ii) shall have the exclusive right to publish and shall be solely responsible for all aspects of the publication of the Steam Book in all languages and in all media of expression now known or later developed, throughout the world, subject to the provisions of this Section 2.8; (iii) shall have the right to retain all proceeds derived from exploiting the Copyright of any edition of the Steam Book; and (iv) subject to Section 2.8(c), shall have the sole right to determine the content contained in all future editions of the Steam Book. + +(a) SpinCo and RemainCo agree and acknowledge that, although RemainCo was responsible for publishing the current forty-second (42nd) edition of the Steam Book, as of the Distribution Date, all rights, responsibilities, duties and obligations related to the publication, distribution and sale of this edition shall be transferred to SpinCo. SpinCo shall retain all proceeds of the sales of this publication. + +(b) SpinCo shall have the sole right to use the title Steam/its generation and use to publish future editions of the Steam Book. As between SpinCo and RemainCo, SpinCo will retain and own all Copyrights in and to any future editions of the Steam Book, provided, however, that content contributed by RemainCo in the future may be owned by, and the Copyright therein owned by, RemainCo, as may be set forth in a subsequent agreement related to such contributions. 7 + + + + + +(c) The Parties acknowledge that it is desirable for future editions of the Steam Book to present a comprehensive view of how steam is generated and used from a variety of energy sources including, inter alia, nuclear energy sources. SpinCo shall have the sole right to determine the content contained in future editions of the Steam Book, provided, however, that SpinCo will provide RemainCo with a right of first refusal to collaborate with SpinCo to provide content related to nuclear subject matter in the forty-third (43rd) edition of the Steam Book, with allocation of costs and revenues and any attribution and Copyright ownership with respect to RemainCo contributed content to be negotiated in good faith by the Parties. The foregoing right of first refusal shall cease in the event of a Change of Control of either RemainCo or SpinCo, provided, however, that the Parties will discuss the feasibility of future collaboration, specifically related to the contribution of nuclear related subject matter by RemainCo, in good faith in the event of a Change of Control. + +(d) RemainCo shall have, and SpinCo hereby grants to RemainCo, an unlimited, non-exclusive, perpetual, irrevocable, royalty free, worldwide right and license to use the content contained in the Steam Book, including the current edition and any past edition and any future edition to which RemainCo makes a contribution, for any purpose, including, without limitation, to reproduce, publicly display, modify, make derivative works, distribute, publicly perform and distribute for RemainCo's internal business purposes, including in connection with customer related activities, provided, however, that RemainCo shall (i) not use any non-nuclear content contained in the Steam Book in connection with publishing or distributing a publication which competes with the Steam Book and (ii) provide attribution and accreditation using a copyright notice having the format required by law in connection with the use of any protectable expression of the non-nuclear content contained in the Steam Book. SpinCo shall provide RemainCo with five hundred (500) copies of the current edition of the Steam Book at no cost to RemainCo, which copies RemainCo may distribute without limitation, including to RemainCo customers at no charge. In the event that RemainCo wishes to order additional copies of the current edition of the Steam Book or has a desire to purchase existing stock of earlier editions of the Steam Book, SpinCo will sell such copies to RemainCo at cost, which copies RemainCo may distribute without limitation, including to RemainCo customers at no charge. + +ARTICLE III + +TRADEMARKS + +Section 3.1 House Marks. + +(a) RemainCo agrees and acknowledges that (i) as of Distribution Date, as between the RemainCo Group and the SpinCo Group, all right, title and interest in and to the Trademarks set forth on Schedule 3.1 (the "SpinCo Trademarks"), including the SpinCo House Marks, shall be the sole and exclusive property of the SpinCo Group and (ii) except as otherwise provided in Section 3.2, the RemainCo Group shall cease and discontinue all use of the SpinCo Marks, including the SpinCo House Marks, as of the Distribution Date. In addition, RemainCo agrees to use its best efforts to change its name to eliminate Babcock & Wilcox therefrom, and, if applicable, to cause the members of the RemainCo Group to change their names to eliminate "Babcock," "Wilcox," "Babcock and Wilcox," "Babcock & Wilcox" or "B&W" therefrom and to cease and discontinue the use of the term "Babcock & Wilcox" or "B&W" and any of the 8 + + + + + +SpinCo Marks in its business or operations as promptly as practicable following the Distribution Date. Notwithstanding the foregoing, SpinCo agrees and acknowledges that RemainCo will change its name to BWX Technologies and that RemainCo and the RemainCo Group may continue to use "BW" and derivations thereof and therefrom (but not "B&W") in its business or operations after the Distribution Date. SpinCo agrees not to, and shall not permit any member of the SpinCo Group to, oppose, petition to cancel, or otherwise challenge or object to the use of or any current application and/or subsequent application for registration by RemainCo or any member of the RemainCo Group of any RemainCo House Marks as long as such use and/or registration does not make use of the SpinCo House Marks and further agrees to take such actions as may be reasonably requested by RemainCo and execute or cause to be executed by the appropriate members of the SpinCo Group such other agreements, instruments and other documents, including coexistence agreements and letters of consent, as may be reasonably requested by RemainCo to facilitate the registration and continued prosecution of RemainCo House Marks (e.g., in the event that any SpinCo House Mark is cited against an application for a RemainCo House Mark). + +(b) RemainCo agrees not to, and shall not permit any member of the RemainCo Group to, oppose, petition to cancel, or otherwise challenge or object to the use of or any current application and/or subsequent application for registration by SpinCo or any member of the SpinCo Group of any SpinCo House Marks, as long as such use and/or registration does not make use of the RemainCo House Marks and further agrees to take such actions as may be reasonably requested by SpinCo and execute or cause to be executed by the appropriate members of the RemainCo Group such other agreements, instruments and other documents, including coexistence agreements and letters of consent, as may be reasonably requested by SpinCo to facilitate the registration and continued prosecution of SpinCo House Marks (e.g., in the event that any RemainCo House Mark is cited against an application for a SpinCo House Mark). + +Section 3.2 Limited License to Use SpinCo House Marks. RemainCo shall have the right to use the SpinCo House Marks in connection with the operation of the RemainCo Business for a limited period of 270 days following the Distribution Date. After such 270-day period, RemainCo shall discontinue all use of the SpinCo House Marks, including any use on stationery or letterhead and any use on or in connection with other RemainCo Assets. However, the Parties agree that the RemainCo Group may continue, beyond such 270-day period, to distribute copies of any existing inventory of its marketing literature, including technical papers, brochures, and printed promotional material, in existence on the Distribution Date, provided, however, that reasonable efforts are made to remove or cover up any SpinCo House Marks appearing thereon prior to distribution. Notwithstanding the foregoing provisions of this Section 3.2, in no event shall any of the members of the RemainCo Group continue to use the SpinCo House Marks (whether in any of the materials referenced in the immediately preceding sentence or otherwise) following a Change of Control of RemainCo. For the avoidance of doubt, none of the foregoing shall apply to any stationery, letterhead or marketing literature, including technical papers, brochures, and printed promotional material, distributed by any member of the RemainCo Group to its customers prior to the Distribution Date or to any SpinCo House Marks included on or in any copies of the Steam Book distributed by RemainCo or any member of the RemainCo Group prior to or after the Distribution Date. All of RemainCo's use of the SpinCo House Marks shall inure to the benefit of SpinCo. RemainCo agrees to use the SpinCo House Marks in accordance with such quality standards as are used by the SpinCo Group as of the date of this Agreement. Except as set forth in this Section 3.2, it is expressly agreed that RemainCo is not obtaining any right, title or interest in the SpinCo House Marks. 9 + + + + + +Section 3.3 Removal of Classes from SpinCo Marks. + +(a) Within sixty (60) days from the Distribution Date, SpinCo will make all necessary filings and take all necessary actions, subject to all applicable local Laws, to (i) as applicable, amend the description of goods and services to remove references to nuclear subject matter included in any existing registration for any SpinCo House Mark registered in the United States, Canada, the United Kingdom, the People's Republic of China, Romania, South Korea, Vietnam, India, Indonesia, Japan, Mexico, Norway, South Africa, Ukraine, the European Union and Argentina and (ii) as applicable, to amend or modify the description of goods and services to remove references to nuclear subject matter contained in any application pending for any SpinCo House Mark in the United States, Canada, the United Kingdom, the People's Republic of China, Romania, South Korea, Vietnam, India, Indonesia, Japan, Mexico, Norway, South Africa, Ukraine, the European Union and Argentina. Without limiting the foregoing, within sixty (60) days from the Distribution Date, SpinCo will make all necessary filings and take all necessary actions, subject to all applicable local Laws, to amend the description of goods and services to remove referenced to nuclear subject matter from the registrations and applications for SpinCo House Marks listed on Schedule 3.3. + +(b) Within ninety (90) days from the Distribution Date, SpinCo will make all necessary filings and take all necessary actions, subject to all applicable local Laws, to (i) as applicable, amend the description of goods and services to remove references to nuclear subject matter included in any existing registration for any SpinCo Trademarks (other than SpinCo House Marks otherwise covered by Section 3.3(a)) and (ii) as applicable, amend or modify any application pending for any SpinCo Mark (other than SpinCo House Marks otherwise covered by Section 3.3(a)) to amend the description of goods and services to remove references to nuclear subject matter contained in such application. + +Section 3.4 RemainCo Marks. SpinCo agrees and acknowledges that (i) as of the Date of this Agreement, as between the SpinCo Group and the RemainCo Group, all right, title and interest in and to the Trademarks set forth on Schedule 3.4 (the "RemainCo Trademarks") shall be the sole and exclusive property of the RemainCo Group and the SpinCo Group shall cease and discontinue all use of the RemainCo Marks as of the Distribution Date. + +Section 3.5 Duty to Avoid Confusion. The Parties confirm their belief that the likelihood of confusion will not result from their respective use of the SpinCo Marks and RemainCo Marks, including RemainCo's continuing use of the name BWX Technologies and continued use of the terms "BWX", "BWX Technologies" or "BWXT" and derivations thereof and therefrom, due to the differences in the goods and services primarily associated therewith (e.g., nuclear versus fossil fuel). In the event that either Party becomes aware of any actual confusion or mistake occurring as a result of their uses of their respective marks, the Parties agree to communicate all details of each such instance to each other, and to cooperate reasonably to take steps to abate the cause of confusion or mistake, and to prevent any such confusion or mistake from arising again. 10 + + + + + +ARTICLE IV + +SHARED LIBRARY MATERIALS + +Section 4.1 Shared Library Materials. RemainCo and SpinCo acknowledge and agree that the Shared Library Materials represent a collection of shared historical and foundational information related to and derived from more than fifty (50) years of research and development focused on technology and design criteria applicable to the businesses of RemainCo and SpinCo, which information, including all Know-How and Copyrights contained therein, has application to the businesses of RemainCo and SpinCo. The Shared Library Materials identified as of the Distribution Date are set forth on Schedule 4.1, which may be amended or modified upon mutual agreement of the Parties from time to time to (i) include additional Shared Library Materials discovered after the Distribution Date or (ii) to reflect the results of the allocation process contemplated in Section 4.4 below. + +Section 4.2 Cross-License of Shared Library Materials. The Parties acknowledge and agree that each of RemainCo and SpinCo and additional members of the RemainCo Group and SpinCo Group presently have shared access to and rights to exploit the Shared Library Materials and may have a right and interest in and to certain Shared Library Materials, including in and to Intellectual Property embodied therein. Accordingly, (i) with respect to RemainCo's right and interest in and to the Shared Library Materials, RemainCo, for itself and as representative of all other members of the RemainCo Group, hereby grants to SpinCo (x) a perpetual (subject to Section 4.4), irrevocable, exclusive, royalty-free, worldwide right and license with the right to grant sublicenses (solely as set forth in Section 5.6) to use the Shared Library Materials, including all Know-How and Copyrights embodied therein, for any purpose in the SpinCo Core Field and (y) a perpetual (subject to Section 4.4), irrevocable, non-exclusive, royalty-free, worldwide right and license with the right to grant sublicenses (solely as set forth in Section 5.6) to use the Shared Library Materials, including all Know-How and Copyrights embodied therein, for any purpose in any field other than the RemainCo Core Field or the SpinCo Core Field and (ii) with respect to SpinCo's right and interest in and to the Shared Library Materials, SpinCo, for itself and as representative of all other members of the SpinCo Group, hereby grants to RemainCo (x) a perpetual (subject to Section 4.4), irrevocable, exclusive, royalty-free, worldwide right and license with the right to grant sublicenses (solely as set forth in Section 5.6) to use the Shared Library Materials, including all Know-How and Copyrights embodied therein, for any purpose in the RemainCo Core Field and (y) a perpetual (subject to Section 4.4), irrevocable, non- exclusive, royalty-free, worldwide right and license with the right to grant sublicenses (solely as set forth in Section 5.6) to use the Shared Library Materials, including all Know-How and Copyrights embodied therein, for any purpose in any field other than the SpinCo Core Field or the RemainCo Core Field. The foregoing licenses include the right to reproduce, prepare derivative works, distribute, perform and otherwise exploit such Shared Library Materials and to use the Shared Library Materials to design, develop, manufacture, have manufactured, sell and support products and services, subject in each case to applicable export control Laws and the provisions of Section 4.5. + +Section 4.3 Maintenance of Shared Library Materials. Unless mutually agreed upon by the Parties in writing, all Shared Library Materials (other than those which have been allocated pursuant to Section 4.4) shall be maintained in a mutually agreed upon location accessible to both Parties (the "Shared Location") and in a manner mutually agreeable to both Parties with respect to shared access, removal and replacement of documents and similar issues. 11 + + + + + +(a) Notwithstanding the foregoing, the Parties acknowledge and agree that (i) archival copies of certain Shared Library Materials are recorded on microfiche; (ii) two sets of the applicable microfiche exist as of the Distribution Time; and (iii) rather than maintaining such microfiche in a mutually agreed upon location accessible to both Parties, each Party will be entitled to maintain a copy of the microfiche at its own location, provided, however, that in the event that any Shared Library Materials are found to be missing from or otherwise inaccessible using one Party's copy of the applicable microfiche, the other Party will provide such Party with access to the microfiche in its possession for copying, with all copying costs to be paid by the Party seeking to obtain the copy. + +(b) RemainCo and SpinCo agree to share all costs and expenses of maintaining the Shared Library Materials on an equal basis and to share all costs and expenses of maintaining the Shared Location as set forth in Schedule 6.3 of the Master Separation Agreement. In the event that one Party is responsible vis-a-vis a Third Party for the payment of costs and expenses related to the Shared Location, such Party will provide to the other Party a statement of all costs and expenses incurred in connection with the Shared Location as set forth in Schedule 6.3 of the Master Separation Agreement. The other Party will reimburse the responsible Party for the applicable percentage of such costs and expenses within thirty (30) days of receipt of such statement, unless otherwise agreed upon by the Parties. + +(c) Without limiting this Section 4.3, the Parties agree that as of the Distribution Time, the Shared Location will be the Iron Mountain storage facility located at Boyers, Pennsylvania, which will be maintained pursuant to an agreement between RemainCo and Iron Mountain for the 137RC account and by SpinCo for the 1100 account. RemainCo and SpinCo shall share all costs and expenses related to storing the Shared Library Materials with Iron Mountain in a manner consistent with Section 4.3(b) above. + +Section 4.4 Potential Allocation of Shared Library Materials. The Parties acknowledge and agree that the Shared Library Materials may contain limited material that could be allocated solely to one Party with respect to ownership and use. In the event that one Party (the "Notifying Party") discovers an item of Shared Library Material which it believes should be allocated to one Party based upon a good faith belief that such items belongs to or relates exclusively to the business of such Party, the Notifying Party will notify the other Party (the "Reviewing Party") of the item and the proposed allocation, including the Notifying Party's rationale, in writing and designate at least one representative from the relevant operating division to negotiate the proposal. The Reviewing Party will designate at least one representative from the relevant operating division to review and negotiate the proposed allocation. The Parties, including the designated representatives, shall negotiate regarding the Notifying Party's proposal in good faith. In the event that the Parties mutually agree that the Notifying Party's proposal is valid, the applicable item of Shared Library Material (i) shall be deemed to be owned by the specified Party, (ii) shall no longer constitute Shared Library Material; (iii) shall be permanently removed from the Shared Location by the specified Party and (iv) shall be removed from Schedule 4.1, provided, however, that the foregoing shall not limit a Party's existing use of any Shared Library Material or obligate any Party to cease utilizing any derivative works of such 12 + + + + + +Shared Library Material made prior to the date of agreement regarding the Notifying Party's proposal. In the event that the Parties do not agree that the Notifying Party's proposal is valid, the applicable item shall remain Shared Library Material under the terms of this Agreement. Without limiting the foregoing, the Parties agree and acknowledge that the Shared Library Materials may contain design standards and design manuals related solely to nuclear content set forth on Schedule 4.4 (collectively, the "Nuclear Design Manuals"), and that such Nuclear Design Manuals are deemed to be owned by RemainCo, subject only to SpinCo's right to confirm that such Nuclear Design Manuals, including each page therein, are marked with the engineering standards series and numbering set forth on Schedule 4.4. SpinCo's right to such confirmation is expressly limited to confirmation of the engineering standards series and numbering system contained in or on such Nuclear Design Materials for purposes of confirmation of the document's identification and does not include the right to analyze, review, or approve any of the content contained in any such Nuclear Design Manual. + +Section 4.5 Confidentiality and Trade Secret Status of Shared Library Materials. The Parties acknowledge that the Research Documents contained within the Shared Library Materials likely contain proprietary trade secret information. Each Party will use reasonable efforts to maintain confidentiality of any trade secret or proprietary information contained within the Shared Library Materials in a manner materially consistent with the how the applicable Party protects its own trade secret or proprietary information. + +Section 4.6 Third Party Materials Contained in the Shared Library Materials. The Parties acknowledge that the Shared Library Materials contain Third Party-owned material, including, without limitation, the Reference Materials, and this Agreement does not include any license to utilize such Third Party-owned material or any representation, warranty or indemnity from or to SpinCo or RemainCo or any member of the SpinCo Group or RemainCo Group related to the use of such Third Party-owned material in connection with the Shared Library Materials. + +ARTICLE V + +INTELLECTUAL PROPERTY LICENSES AND COVENANTS + +Section 5.1 Cross-License of Shared Know-How. + +(a) SpinCo, for itself and as representative of all other members of the SpinCo Group, hereby grants to RemainCo (x) a perpetual, irrevocable, exclusive, royalty-free, worldwide right and license with the right to grant sublicenses (solely as set forth in Section 5.6) to use the SpinCo Know- How currently or previously used in connection with the RemainCo Business or otherwise in the possession of RemainCo or any member of the RemainCo Group as of Distribution Date (the "Licensed SpinCo Know-How"), for the continued operation of the RemainCo Business and any future extensions of the RemainCo Business in the RemainCo Core Field and (y) a perpetual, irrevocable, non-exclusive, royalty-free, worldwide right and license with the right to grant sublicenses (solely as set forth in Section 5.6) to use the Licensed SpinCo Know-How for the continued operation of the RemainCo Business and any future extensions of the RemainCo Business in any field other than the RemainCo Core Field or the SpinCo Core Field; provided, however, the foregoing licenses shall not extend to (i) SpinCo Know-How 13 + + + + + +licensed by SpinCo or any other member of the SpinCo Group if and to the extent the licensing of same to RemainCo would constitute a breach of an agreement with any Third Party executed prior to the Effective Date or result in any expense to SpinCo or any member of the SpinCo Group for payments to such Third Party or (ii) any intellectual property not owned by one or more members of the SpinCo Group, or as to which no member of the SpinCo Group has the right to grant sublicenses, as of the Effective Date. + +(b) RemainCo, for itself and as representative of all other members of the RemainCo Group, hereby grants to SpinCo (x) a perpetual, irrevocable, exclusive, royalty-free, worldwide right and license with the right to grant sublicenses (solely as set forth in Section 5.6) to use the RemainCo Know-How currently or previously used in connection with the SpinCo Business or otherwise in the possession of SpinCo or any member of the SpinCo Group as of the Distribution Date (the "Licensed RemainCo Know-How"), for the continued operation of the SpinCo Business and any future extensions of the SpinCo Business in the SpinCo Core Field and (y) a perpetual, irrevocable, non-exclusive, royalty-free, worldwide right and license with the right to grant sublicenses (solely as set forth in Section 5.6) to use the Licensed RemainCo Know-How for the continued operation of the SpinCo Business and any future extensions of the SpinCo Business in any field other than the RemainCo Core Field or the SpinCo Core Field; provided, however, the foregoing licenses shall not extend to (i) RemainCo Know-How licensed by RemainCo or any other member of the RemainCo Group if and to the extent the licensing of same to SpinCo would constitute a breach of an agreement with any Third Party executed prior to the Effective Date or result in any expense to RemainCo or any member of the RemainCo Group for payments to such Third Party or (ii) any intellectual property not owned by one or more members of the RemainCo Group, or as to which no member of the RemainCo Group has the right to grant sublicenses, as of the Effective Date. + +Section 5.2 Reserved. + +Section 5.3 Reserved. + +Section 5.4 Cross-Licenses of Software. + +(a) The Parties acknowledge and agree that each of RemainCo and SpinCo and additional members of the RemainCo Group and SpinCo Group presently have shared access to and rights to exploit the Software set forth on Schedule 5.4(a) (the "Foundational Software") and may have a right and interest in and to the Foundational Software, including in and to Intellectual Property embodied therein. Accordingly, (i) with respect to RemainCo's right and interest in and to the Foundational Software, RemainCo, for itself and as representative of all other members of the RemainCo Group, hereby grants to SpinCo (x) a perpetual, irrevocable, exclusive, royalty-free, worldwide right and license to use the Foundational Software, including any Intellectual Property embodied therein, for the continued operation of the SpinCo Business and any future extensions of the SpinCo Business in the SpinCo Core Field and (y) a perpetual, irrevocable, non-exclusive, royalty-free, worldwide right and license to use the Foundational Software, including any Intellectual Property embodied therein, for the continued operation of the SpinCo Business and any future extensions of the SpinCo Business in any field other than the SpinCo Core Field or the RemainCo Core Field; and (ii) with respect to SpinCo's right and interest in and to the Foundational Software, SpinCo, for itself and as representative of all other members 14 + + + + + +of the SpinCo Group, hereby grants to RemainCo (x) a perpetual, irrevocable, exclusive, royalty-free, worldwide right and license to use the Foundational Software, including any Intellectual Property embodied therein, for the continued operation of the RemainCo Business and any future extensions of the RemainCo Business in the RemainCo Core Field and (y) a perpetual, irrevocable, non-exclusive, royalty-free, worldwide right and license to use the Foundational Software, including any Intellectual Property embodied therein, for the continued operation of the RemainCo Business and any future extensions of the RemainCo Business in any field other than the SpinCo Core Field or the RemainCo Core Field. The foregoing licenses includes the right to reproduce, prepare derivative works, distribute, perform and otherwise exploit such Foundational Software and to use the Foundational Software to design, develop, manufacture, have manufactured, sell and support products and services. + +Section 5.5 Reserved. + +Section 5.6 Sublicensing; Assignability. + +(a) The foregoing licenses shall be assignable in whole or in part only (i) to any Affiliate or (ii) to the extent the licensee transfers to a Third Party all or substantially all of the assets of the business to which such Licensed SpinCo Intellectual Property or the Licensed RemainCo Intellectual Property, as applicable, relates. + +(b) RemainCo may sublicense the Licensed SpinCo Intellectual Property to Affiliates of RemainCo, even if they become Affiliates after the Distribution Date, solely within the scope of its licenses in Article 5, provided that such sublicense shall only be effective for such time as such entity remains an Affiliate of RemainCo, subject to Section 5.6(a)(ii). RemainCo may, and may permit its sublicensees to, sublicense erection and arrangement drawings; form, fit, and function drawings; and product and installation/erection specifications based upon the Licensed SpinCo Intellectual Property to: (i) customers to enable them to use, operate, maintain and repair the equipment, services or other deliverables which incorporate or are derived from the Licensed SpinCo Intellectual Property and which were sold to them by RemainCo or its sublicensees; and (ii) to contractors, subcontractors and vendors to enable them to manufacture, erect, install, service, repair and maintain those products to which the licenses set forth in Article 5 relate. + +(c) SpinCo may sublicense the Licensed RemainCo Intellectual Property to Affiliates of SpinCo, even if they become Affiliates after the Distribution Date, solely within the scope of its licenses in Article 5, provided that such sublicense shall only be effective for such time as such entity remains an Affiliate of SpinCo, subject to Section 5.6(a)(ii). SpinCo may, and may permit its sublicensees to, sublicense erection and arrangement drawings; form, fit, and function drawings; and product and installation/erection specifications based upon the Licensed RemainCo Intellectual Property to: (i) customers to enable them to use, operate, maintain and repair the equipment, services or other deliverables which incorporate or are derived from the Licensed RemainCo Intellectual Property and which were sold to them by SpinCo or its sublicensees; and (ii) to contractors, subcontractors and others to enable them to manufacture, erect, install, service, repair and maintain those products to which the license set forth in Article 5 relate. 15 + + + + + +Section 5.7 Restrictions on Licensor Exploitation of Intellectual Property. + +(a) RemainCo (i) shall not use or exploit the Licensed RemainCo Intellectual Property in the SpinCo Core Field and (ii) shall not, and shall not permit any member of the RemainCo Group to, license, provide or otherwise grant to any Third Party the right to use, exploit or access any Licensed RemainCo Intellectual Property in the SpinCo Core Field. + +(b) SpinCo (i) shall not use or exploit the Licensed SpinCo Intellectual Property in the RemainCo Core Field and (ii) shall not, and shall not permit any member of the SpinCo Group to, license, provide or otherwise grant to any Third Party the right to use, exploit or access any Licensed SpinCo Intellectual Property in the RemainCo Core Field. + +Section 5.8 Third Party Agreements; Reservation of Rights. + +(a) All licenses granted herein are expressly made only subject to, and only to the extent permissible under, all pre-existing rights, obligations and restrictions contained in any existing agreements related to the applicable Intellectual Property licensed herein, including, without limitation, licenses or other rights existing in third parties granted by SpinCo or RemainCo and/or their sublicensees in existing license agreements, applicable agreements in existence between members of the RemainCo Group and the United States Department of Energy, applicable agreements in existence between members of the SpinCo Group and the United States Department of Energy and all existing security agreements and liens in place in connection with such licensed Intellectual Property. + +(b) Except for the limited rights granted in this Agreement in connection with the Licensed RemainCo Intellectual Property, including, without limitation, the rights and obligations arising out of or related to Section 5.10, RemainCo reserves to itself all right, title and interest in and to the Licensed RemainCo Intellectual Property. Without limiting the foregoing, for purposes of clarity, as between RemainCo and SpinCo, RemainCo retains all rights in and to, and to use and exploit, and including without limitation the right to make, have made, use, lease, sell, offer for sale, and import, and use, reproduce, prepare derivative works of, distribute copies, perform and display products and services which utilize or embody such Licensed RemainCo Intellectual Property in the RemainCo Core Field. Except for the limited rights granted in this Agreement in connection with the Licensed SpinCo Intellectual Property, including, without limitation, the rights and obligations arising out of or related to Section 5.10, SpinCo reserves to itself all right, title and interest in and to the Licensed SpinCo Intellectual Property. Without limiting the foregoing, for purposes of clarity, as between RemainCo and SpinCo, SpinCo retains all rights in and to, and to use and exploit, and including without limitation the right to make, have made, use, lease, sell, offer for sale, and import, and use, reproduce, prepare derivative works of, distribute copies, perform and display products and services which utilize or embody such Licensed SpinCo Intellectual Property in the SpinCo Core Field. + +Section 5.9 Maintenance of Intellectual Property. + +(a) RemainCo shall not have, nor shall any member of the RemainCo Group have, any obligation to maintain the pendency, subsistence, validity, enforceability or confidentiality of any Licensed RemainCo Intellectual Property. RemainCo may, and may permit an applicable member of the RemainCo Group to, discontinue maintenance, abandon or dedicate to the public any Licensed RemainCo Intellectual Property. 16 + + + + + +(b) SpinCo shall not have, nor shall any member of the SpinCo Group have, any obligation to maintain the pendency, subsistence, validity, enforceability or confidentiality of any Licensed SpinCo Intellectual Property. SpinCo may, and may permit an applicable member of the RemainCo Group to, discontinue maintenance, abandon or dedicate to the public any Licensed RemainCo Intellectual Property. + +Section 5.10 Covenants. + +(a) RemainCo hereby covenants not to sue SpinCo under any Licensed RemainCo Know-How and under RemainCo's right, title and interest in and to Shared Library Materials and Foundational Software, including, without limitation, all applicable Patents, Copyrights, and Know-How, for infringement or misappropriation based upon any action that occurs in connection with the continued operation of the SpinCo Business and any future extensions of the SpinCo Business in any field other than the RemainCo Core Field after the Distribution Date. The foregoing covenant shall extend to any permitted assignees or sublicensees of SpinCo hereunder. RemainCo further covenants to impose the obligations set forth in this Section 5.10(a) on any subsequent Third Party or Affiliate to whom RemainCo may sell, transfer, convey or otherwise assign any of the foregoing Intellectual Property and shall ensure that any such Person agrees, in writing, to be bound by the covenants and obligations set forth herein. + +(b) SpinCo hereby covenants not to sue RemainCo under any Licensed SpinCo Know-How and under SpinCo's right, title and interest in and to Shared Library Materials and Foundational Software, including, without limitation, all applicable Patents, Copyrights, and Know-How, for infringement or misappropriation based upon any action that occurs in connection with the continued operation of the RemainCo Business and any future extensions of the RemainCo Business in any field other than the SpinCo Core Field after the Distribution Date. The foregoing covenant shall extend to any permitted assignees or sublicensees of RemainCo hereunder. SpinCo further covenants to impose the obligations set forth in this Section 5.10(b) on any subsequent Third Party or Affiliate to whom SpinCo may sell, transfer, convey or otherwise assign any of the foregoing Intellectual Property and shall ensure that any such Person agrees, in writing, to be bound by the covenants and obligations set forth herein. + +ARTICLE VI + +TECHNICAL ASSISTANCE AND TECHNOLOGY TRANSFER + +Section 6.1 Reserved. + +Section 6.2 Reserved. + +Section 6.3 No Additional Technical Assistance. Except as expressly set forth in the Master Separation Agreement or any other Intellectual Property Agreement or other Ancillary Agreement, no Party shall be required to provide the other Party with any technical assistance or to furnish any other Party with any documents, materials or other information or Know-How. 17 + + + + + +ARTICLE VII + +NO WARRANTIES. + +Except as expressly set forth in this Agreement, SpinCo and RemainCo understand and agree that no member of the RemainCo Group is making any representation or warranty of any kind whatsoever, express or implied, to SpinCo or any member of the SpinCo Group in any way as to the SpinCo Business, the Foundational Software, Shared Library Materials or the Licensed RemainCo Intellectual Property; and, no member of the SpinCo Group is making any representation or warranty of any kind whatsoever, express or implied, to RemainCo or any member of the RemainCo Group in any way as to the RemainCo Business, the Shared Library Materials, the Foundational Software or the Licensed SpinCo Intellectual Property. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING THE TRANSFERS AND LICENSES REFERRED TO IN THIS AGREEMENT (INCLUDING PRIOR TRANSFERS) HAVE BEEN, OR WILL BE, MADE WITHOUT ANY REPRESENTATION OR WARRANTY OF ANY NATURE, EXPRESS OR IMPLIED, AT COMMON LAW, BY STATUTE OR OTHERWISE, RELATING TO (A) THE VALUE OR FREEDOM FROM ENCUMBRANCE OF, ANY ASSETS OR INTELLECTUAL PROPERTY, (B) THE CONDITION OR SUFFICIENCY OF ANY ASSETS OR INTELLECTUAL PROPERTY (INCLUDING ANY IMPLIED OR EXPRESS WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, MARKETABILITY, TITLE, VALUE, FREEDOM FROM ENCUMBRANCE OR OF CONFORMITY TO MODELS OR SAMPLES OF MATERIALS, OR THE PRESENCE OR ABSENCE OF ANY HAZARDOUS MATERIALS IN OR ON, OR DISPOSED OR DISCHARGED FROM, SUCH ASSETS), (C) THE NON-INFRINGEMENT OF ANY PATENT OR OTHER INTELLECTUAL PROPERTY RIGHT OF ANY THIRD PARTY, (D) ANY OTHER MATTER CONCERNING ANY ASSETS OR INTELLECTUAL PROPERTY (E) AS TO THE LEGAL SUFFICIENCY TO CONVEY TITLE TO ANY ASSETS OR INTELLECTUAL PROPERTY OR (F) THAT THE LICENSOR HAS ANY RIGHTS OR TITLE AT ALL IN OR TO ANY INTELLECTUAL PROPERTY. WITHOUT LIMITING THE FOREGOING, REMAINCO AND SPINCO HEREBY ACKNOWLEDGE AND AGREE THAT ALL INTELLECTUAL PROPERTY TRANSFERRED OR LICENSED PURSUANT TO THIS AGREEMENT AND ALL INTELLECTUAL PROPERTY INCLUDED IN PRIOR TRANSFERS ARE BEING OR WERE LICENSED OR TRANSFERRED "AS IS, WHERE IS." + +ARTICLE VIII + +THIRD-PARTY INFRINGEMENT + +Section 8.1 No Obligation. No Party shall have any obligation to institute or maintain any action or suit against any Third Party for infringement or misappropriation of any Intellectual Property licensed hereunder, or to defend any action or suit brought by a Third Party which challenges or concerns the validity of any such Intellectual Property or which claims that any Intellectual Property licensed to the other Party infringes or constitutes misappropriation of the Intellectual Property rights of any Third Party. 18 + + + + + +Section 8.2 Notice Regarding Infringement. Each Party shall promptly notify the other Party in writing upon learning that a Third Party may potentially be infringing, misappropriating or otherwise violating any Intellectual Property licensed under this Agreement, which notice shall set forth in reasonable detail the identity of the suspected infringer and nature of suspected infringement. + +Section 8.3 Suits for Infringement. + +(a) Licensed RemainCo Intellectual Property. + +(i) With respect to any Licensed RemainCo Intellectual Property to which RemainCo has granted SpinCo an exclusive license hereunder, as between RemainCo and SpinCo, RemainCo shall have the first right to initiate, prosecute and control any action or proceeding to restrain infringement or misappropriation of such Licensed RemainCo Intellectual Property in the SpinCo Core Field, and, for purposes of clarity, the sole and exclusive right to initiate, prosecute and control such proceedings in the RemainCo Core Field and in any field other than the SpinCo Core Field. RemainCo shall provide prompt written notice to SpinCo of any determination to initiate, prosecute and control any such action or proceeding in the SpinCo Core Field. SpinCo, as the exclusive licensee, agrees to be joined as a party if necessary to prosecute the action or proceeding, and shall provide all reasonable cooperation, including any necessary use of their name, required to prosecute such action or proceeding. In such instance, RemainCo shall control any such action or proceeding and negotiations for its settlement and compromise and shall have sole discretion regarding the settlement or compromise thereof. In connection with the foregoing, SpinCo may, at its option, elect to assume and pay its and RemainCo's out-of-pocket costs incurred in connection with such litigation or proceeding undertaken by RemainCo, including, without limitation, attorney's fees. SpinCo will provide prompt written notice to RemainCo, in any event no later than thirty (30) days after receipt of RemainCo's notice of its determination to initiate, prosecute and control such action or proceeding in the SpinCo Core Field, of its determination to elect to assume and pay the applicable costs or to decline to pay assume and pay the applicable costs. In the event SpinCo does not elect to assume and pay the costs associated with RemainCo's initiation, prosecution and control of such action or proceeding in the SpinCo Core Field, RemainCo shall assume and pay its and SpinCo's out-of-pocket costs incurred in connection with such litigation or proceeding undertaken by RemainCo, including, without limitation, attorney's fees. Any recovery obtained as a result of such proceeding in the SpinCo Core Field shall be retained by (i) SpinCo in the event that SpinCo assumed and paid the applicable costs of the litigation or proceeding or (ii) RemainCo in the event that RemainCo assumed and paid the applicable costs of the litigation or proceeding in accordance with this Section 8.3(a)(i). + +(ii) If RemainCo does not exercise its right to enforce any applicable Licensed RemainCo Intellectual Property in the SpinCo Core Field, RemainCo shall provide notice to that effect to SpinCo and, as between RemainCo and SpinCo, SpinCo shall have the right to initiate, prosecute and control any action or proceeding to restrain infringement or misappropriation of such Licensed RemainCo Intellectual Property in the SpinCo Core Field. SpinCo shall provide prompt written notice to RemainCo of any determination to initiate, prosecute and control any such action or proceeding in the SpinCo Core Field. RemainCo, as the owner and licensor, agrees to be joined as a party if necessary to prosecute the action or proceeding, and shall 19 + + + + + +provide all reasonable cooperation, including any necessary use of their name, required to prosecute such action or proceeding. In connection with the foregoing, SpinCo shall assume and pay its and RemainCo's out-of-pocket costs incurred in connection with any litigations or proceedings described above, including, without limitation, attorney's fees. Any recovery obtained as a result of such proceeding related to infringement or misappropriation in the SpinCo Core Field shall be retained by SpinCo. + +(iii) In the event that a Third Party may potentially be infringing, misappropriating or otherwise violating any Licensed RemainCo Intellectual Property in both the SpinCo Core Field and the RemainCo Core Field, SpinCo and RemainCo will meet and confer in good faith regarding the manner in which to respond to such infringement in the SpinCo Core Field and RemainCo Core Field collectively, provided, however, that the foregoing does not limit the rights set forth in Section 8.3(a)(i) or Section 8.3(a)(ii). + +(b) Licensed SpinCo Intellectual Property. + +(i) With respect to any Licensed SpinCo Intellectual Property to which SpinCo has granted RemainCo an exclusive license hereunder, as between SpinCo and RemainCo, SpinCo shall have the first right to initiate, prosecute and control any action or proceeding to restrain infringement or misappropriation of such Licensed SpinCo Intellectual Property in the RemainCo Core Field, and, for purposes of clarity, the sole and exclusive right to initiate, prosecute and control such proceedings in the SpinCo Core Field and in any field other than the RemainCo Core Field. SpinCo shall provide prompt written notice to RemainCo of any determination to initiate, prosecute and control any such action or proceeding in the RemainCo Core Field. RemainCo, as the exclusive licensee, agrees to be joined as a party if necessary to prosecute the action or proceeding, and shall provide all reasonable cooperation, including any necessary use of their name, required to prosecute such action or proceeding. In such instance, SpinCo shall control any such action or proceeding and negotiations for its settlement and compromise and shall have sole discretion regarding the settlement or compromise thereof. In connection with the foregoing, RemainCo may, at its option, elect to assume and pay its and SpinCo's out-of- pocket costs incurred in connection with such litigation or proceeding, including, without limitation, attorney's fees. RemainCo will provide prompt written notice to SpinCo, in any event no later than thirty (30) days after receipt of SpinCo's notice of its determination to initiate, prosecute and control such action or proceeding in the RemainCo Core Field, of its determination to elect to assume and pay the applicable costs or to decline to pay assume and pay the applicable costs. In the event RemainCo does not elect to assume and pay the costs associated with SpinCo's initiation, prosecution and control of such action or proceeding in the RemainCo Core Field, SpinCo shall assume and pay its and RemainCo's out-of-pocket costs incurred in connection with such litigation or proceeding undertaken by SpinCo, including, without limitation, attorney's fees. Any recovery obtained as a result of such proceeding in the RemainCo Core Field shall be retained by (i) RemainCo in the event that RemainCo assumed and paid the applicable costs of the litigation or proceeding or (ii) SpinCo in the event that SpinCo assumed and paid the applicable costs of the litigation or proceeding in accordance with this Section 8.4(b)(i). + +(ii) If SpinCo does not exercise its right to enforce any applicable Licensed SpinCo Intellectual Property in the RemainCo Core Field, SpinCo shall provide notice to that 20 + + + + + +effect to RemainCo and, as between SpinCo and RemainCo, RemainCo shall have the right to initiate, prosecute and control any action or proceeding to restrain infringement or misappropriation of such Licensed SpinCo Intellectual Property in the RemainCo Core Field. RemainCo shall provide prompt written notice to SpinCo of any determination to initiate, prosecute and control any such action or proceeding. SpinCo, as the owner and licensor, agrees to be joined as a party if necessary to prosecute the action or proceeding, and shall provide all reasonable cooperation, including any necessary use of their name, required to prosecute such action or proceeding. In connection with the foregoing, RemainCo shall assume and pay its and SpinCo's out-of-pocket costs incurred in connection with any litigations or proceedings described above, including, without limitation, attorney's fees. Any recovery obtained as a result of such proceeding related to infringement or misappropriation in the RemainCo Core Field shall be retained by RemainCo. + +(iii) In the event that a Third Party may potentially be infringing, misappropriating or otherwise violating any Licensed SpinCo Intellectual Property in both the RemainCo Core Field and the SpinCo Core Field, SpinCo and RemainCo will meet and confer in good faith regarding the manner in which to respond to such infringement in the RemainCo Core Field and SpinCo Core Field collectively, provided, however, that the foregoing does not limit the rights set forth in Section 8.4(b)(i) or Section 8.4(b)(ii). + +ARTICLE IX + +CONFIDENTIALITY + +Section 9.1 RemainCo and SpinCo shall hold and shall cause the members of the RemainCo Group and the SpinCo Group, respectively, to hold, and shall each cause their respective officers, employees, agents, consultants and advisors to hold, in strict confidence and not to disclose or release without the prior written consent of the other Party, any and all Confidential Information (as defined herein) of such other Party or the members of its Group; provided, that the Parties may disclose, or may permit disclosure of, such Confidential Information (i) to their respective auditors, attorneys, financial advisors, bankers and other appropriate consultants and advisors who have a need to know such information and are informed of their obligation to hold such information confidential to the same extent as is applicable to the Parties and in respect of whose failure to comply with such obligations, RemainCo or SpinCo, as the case may be, will be responsible or (ii) to the extent any member of the RemainCo Group or the SpinCo Group is compelled to disclose any such Confidential Information by judicial or administrative process or, in the opinion of legal counsel, by other requirements of Law. Notwithstanding the foregoing, in the event that any demand or request for disclosure of Confidential Information is made pursuant to clause (ii) above, RemainCo or SpinCo, as the case may be, shall promptly notify the other of the existence of such request or demand and shall provide the other a reasonable opportunity to seek an appropriate protective order or other remedy, which both Parties will cooperate in seeking to obtain. In the event that such appropriate protective order or other remedy is not obtained, the Party who is being compelled to disclose (or whose Group member is being compelled to disclose) shall, and shall cause the applicable members at its Group to, furnish, or cause to be furnished, only that portion of such Confidential Information that is legally required to be disclosed. 21 + + + + + +Section 9.2 As used in this Article 9, "Confidential Information" shall mean all proprietary, technical or proprietary, operational information (including Know-How and proprietary information relating to the ages, birth dates, social security numbers, health-related matters or other confidential matters concerning employees or former employees) of one Party or members of its Group which, prior to or following the Distribution Time, has been disclosed by RemainCo or members of the RemainCo Group, on the one hand, or SpinCo or members of the SpinCo Group, on the other hand, to, or otherwise has come into the possession of, the other Group, including pursuant to the technical assistance and technology transfer provisions of Article VI hereof or any other provision of this Agreement (except to the extent that such information can be shown to have been (a) in the public domain through no fault of such Party (or, in the case of RemainCo, any other member of the RemainCo Group or, in the case of SpinCo, any other member of the SpinCo Group) or (b) later lawfully acquired from other sources by the Party (or, in the case of RemainCo, such member of the RemainCo Group or, in the case of SpinCo, such member of the SpinCo Group) to which it was furnished; provided, however, in the case of (b) that such sources did not provide such information in breach of any confidentiality obligations), or (c) independently developed by employees or agents of such Party who had no access, direct or indirect, to such information provided by the other Party. + +(a) Each Party shall use the Confidential Information only as permitted pursuant to this Agreement and shall not disclose any Confidential Information to any Third Party unless permitted pursuant to this Agreement. Each Party shall exercise the same degree of care to protect and maintain the confidentiality of the Confidential Information received from the other Party hereunder (but no less than a reasonable degree of care) as they take to preserve confidentiality for their own similar information. Without limiting the foregoing, each Party will take commercially reasonable efforts to implement and maintain comprehensive security protocols to protect and maintain the confidentiality of the Confidential Information received from the other Party hereunder, including, without limitation, implementing administrative, technical, digital, electronic and physical security strategies and access restrictions to protect Confidential Information. + +ARTICLE X + +MISCELLANEOUS + +Section 10.1 Authority. Each of the Parties represents to the other that (a) it has the corporate or other requisite power and authority to execute, deliver and perform this Agreement, (b) the execution, delivery and performance of this Agreement by it has been duly authorized by all necessary corporate or other actions, (c) it has duly and validly executed and delivered this Agreement to be executed and delivered on or prior to the Distribution Time, and (d) this Agreement is legal, valid and binding obligations, enforceable against it in accordance with their respective terms subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar Laws affecting creditors' rights generally and general equity principles. + +Section 10.2 Entire Agreement. This Agreement and the Schedules referenced herein or therein or attached hereto or thereto, constitute the entire agreement and understanding between the Parties with respect to the subject matter hereof and supersedes all prior written and oral and all contemporaneous oral agreements and understandings with respect to the subject matter hereof. 22 + + + + + +Section 10.3 Binding Effect; Third-Party Beneficiaries; Assignment. Except as expressly set forth in Section 5.10 and except for the Affiliates of the Parties, which are intended to be third party beneficiaries hereunder, this Agreement does not and is not intended to confer any rights or remedies upon any Person other than the Parties. This Agreement shall inure to the benefit of and be binding upon the Parties and their respective successors and permitted assigns. This Agreement may not be assigned by either Party, except with the prior written consent of the other Party. + +Section 10.4 Amendment. No change or amendment may be made to this Agreement except by an instrument in writing signed on behalf of both of the Parties. + +Section 10.5 Failure or Indulgence Not Waiver; Remedies Cumulative. No failure or delay on the part of either Party in the exercise of any right hereunder shall impair such right or be construed to be a waiver of, or acquiescence in, any breach of any representation, warranty, covenant or agreement contained herein, nor shall any single or partial exercise of any such right preclude other or further exercise thereof or of any other right. All rights and remedies existing under this Agreement or the Schedules attached hereto are cumulative to, and not exclusive of, any rights or remedies otherwise available. + +Section 10.6 Notices. Unless otherwise expressly provided herein, all notices, claims, certificates, requests, demands and other communications hereunder shall be in writing and shall be deemed to be duly given (i) when personally delivered or (ii) if mailed by registered or certified mail, postage prepaid, return receipt requested, on the date the return receipt is executed or the letter is refused by the addressee or its agent or (iii) if sent by overnight courier which delivers only upon the signed receipt of the addressee, on the date the receipt acknowledgment is executed or refused by the addressee or its agent or (iv) if sent by facsimile or electronic mail, on the date confirmation of transmission is received (provided that a copy of any notice delivered pursuant to this clause (iv) shall also be sent pursuant to clause (i), (ii) or (iii)), addressed to the attention of the addressee's General Counsel at the address of its principal executive office or to such other address or facsimile number for a Party as it shall have specified by like notice. + +Section 10.7 Counterparts. This Agreement, including the Schedules and Exhibits hereto and the other documents referred to herein, may be executed in multiple counterparts, each of which when executed shall be deemed to be an original but all of which together shall constitute one and the same agreement. + +Section 10.8 Severability. If any term or other provision of this Agreement or the Schedules attached hereto is determined by a nonappealable decision by a court, administrative agency or arbitrator to be invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to either Party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the court, administrative agency or arbitrator shall interpret this Agreement so as to effect the original 23 + + + + + +intent of the Parties as closely as possible in an acceptable manner to the end that transactions contemplated hereby are fulfilled to the fullest extent possible. If any sentence in this Agreement is so broad as to be unenforceable, the provision shall be interpreted to be only so broad as is enforceable. + +Section 10.9 Governing Law. This Agreement shall be governed by, and construed and enforced in accordance with, the substantive laws of the State of Delaware, without regard to any conflicts of law provisions thereof that would result in the application of the laws of any other jurisdiction. + +Section 10.10 Construction. This Agreement shall be construed as if jointly drafted by SpinCo and RemainCo and no rule of construction or strict interpretation shall be applied against either Party. The Parties represent that this Agreement is entered into with full consideration of any and all rights which the Parties may have. The Parties have relied upon their own knowledge and judgment and upon the advice of the attorneys of their choosing. The Parties have had access to independent legal advice, have conducted such investigations they and their counsel thought appropriate, and have consulted with such other independent advisors as they and their counsel deemed appropriate regarding this Agreement and their rights and asserted rights in connection therewith. The Parties are not relying upon any representations or statements made by any other Party, or such other Party's employees, agents, representatives or attorneys, regarding this Agreement, except to the extent such representations are expressly set forth or incorporated in this Agreement. The Parties are not relying upon a legal duty, if one exists, on the part of the other Party (or such other Party's employees, agents, representatives or attorneys) to disclose any information in connection with the execution of this Agreement or its preparation, it being expressly understood that neither Party shall ever assert any failure to disclose information on the part of the other Party as a ground for challenging this Agreement. + +Section 10.11 Performance. Each Party shall cause to be performed, and hereby guarantees the performance of, all actions, agreements and obligations set forth herein to be performed by any Subsidiary or Affiliate of such Party. + +[INTENTIONALLY LEFT BLANK] 24 + + + + + +WHEREFORE, the Parties have signed this Agreement effective as of the date first set forth above. THE BABCOCK & WILCOX COMPANY + +By: /s/ David S. Black Name: David S. Black Title: Vice President and Chief Accounting Officer + +BABCOCK & WILCOX ENTERPRISES, INC. + +By: /s/ J. André Hall Name: J. André Hall Title: Senior Vice President, General Counsel and Secretary + + + + + +Schedule 1.1(e) + +SpinCo Core Field; RemainCo Core Field + +SpinCo Core Field means: + +1. Ownership and/or operation of power generation facilities fired with combustible fossil fuels (e.g., coal, coal slurry, oil or natural gas), biomass, municipal solid waste or concentrated solar energy through tower based solar thermal conversion systems, in each case for the provision of power, other than maintenance and operation services performed as part of overall facility operation and management contracts for domestic or foreign government agencies or entities (including but not limited to NNSA, NASA, DOD, DOE, as well as United Kingdom NDA or MOD sites). &bbsp; + +2. Design, development, research, engineering, procurement, fabrication, analysis, manufacture, construction, installation, supply, marketing, sale, lease, rent, commissioning, training, delivery, inspection, testing of, support, operations, inspection, maintenance, upgrade, repair, refurbishment, rebuilding, replacement, modification, repowering/fuel switching, relocation, localization, or other services, including project management, construction project management or consultation, plant, system or component licensing, siting support or consultation, environmental, safety, health, laboratory analysis, engineering studies, field engineering services, nondestructive testing, evaluation or analytical services, metallographic analysis, consulting services, troubleshooting, failure analysis, cleaning, upgrading, tooling, or decommissioning related to: + + + +(a). Fired steam generators encompassing fossil fuel boilers which are fueled by combustible fossil fuels (e.g., coal, coal slurry, oil or natural gas) or support subsystems, equipment or components thereof, including fuel drying, fuel feed, pulverizers, burners, combustion systems, grates, pressure parts, air heaters, fans, boiler cleaning systems, ash systems, valves, controls & diagnostics, oxycombustion systems, condensing heat exchangers used in connection with such fired steam generators, other than maintenance and operation services performed as part of overall facility operation and management contracts for domestic or foreign government agencies or entities (including but not limited to NNSA, NASA, DOD, DOE, as well as United Kingdom NDA or MOD sites). + + + +(b). Fired steam generators encompassing waste fuel boilers which are fueled by combustible waste fuels (e.g., carbon monoxide, biomass, black liquor, municipal solid waste (MSW) or refuse-derived fuel (RDF)) or support subsystems, equipment or components thereof, including fuel drying, fuel feed, pulverizers, burners, combustion systems, grates, pressure parts, air heaters, fans, boiler cleaning systems, ash systems, valves, controls & diagnostics, oxycombustion systems, condensing heat exchangers used in connection with such fired steam generators, other than maintenance and operation services performed as part of overall facility operation and management contracts for domestic or foreign government agencies or entities (including but not limited to NNSA, NASA, DOD, DOE, as well as United Kingdom NDA or MOD sites). + + + + + + + +(c). Gasifier systems which partially convert fossil or waste fuels (e.g., coal, oil, natural gas or biomass) to syngas and support subsystems, equipment or components thereof, including fuel drying, fuel feed, pulverizers, burners, combustion systems, gasifiers, heat exchangers used in connection with such gasifier systems, pressure parts, boiler cleaning systems, ash systems, valves, controls & diagnostics, other than maintenance and operation services performed as part of overall facility operation and management contracts for domestic or foreign government agencies or entities (including but not limited to NNSA, NASA, DOD, DOE, as well as United Kingdom NDA or MOD sites). + + + +(d). Tower-based solar thermal conversion systems which are enabled by solar energy and support subsystems, equipment or components thereof, including receiver system, pressure parts, molten salt or particle systems (e.g., heat exchangers specifically for tower-based solar thermal conversion systems enabled by solar energy or associated pumps or tanks), valves, controls or diagnostics, other than maintenance and operation services performed as part of overall facility operation and management contracts for domestic or foreign government agencies or entities (including but not limited to NNSA, NASA, DOD, DOE, as well as United Kingdom NDA or MOD sites). + + + +(e). The following specific unfired heat exchangers Turbine Exhaust Gas boilers (10K2), Heat Recovery Steam Generation Boilers (10K22), Water Tube Waste Heat Boilers Two Drum (Stirling Types) (1K4), 3 Drum Waste Heat Recovery Boiler (1K4), Water Tube Waste Heat "H" Stirling Boiler (1K4), Water Tube Long Drum (LD) boiler (1K4), CO boiler (1K26), Waste Heat (WH) (1K4), Oxygen Convertor Hoods (1K44), Gas Tube (FT) boilers (1K46), FM boilers (1K239), FO boilers (1K2311), Struthers Wells type EOR boiler as defined by the existing specific referenced design standards, or support subsystems, equipment or components thereof, including pressure parts, cleaning systems, valves, controls or diagnostics, other than maintenance and operation services performed as part of overall facility operation and management contracts for domestic or foreign government agencies or entities (including but not limited to NNSA, NASA, DOD, DOE, as well as United Kingdom NDA or MOD sites). + + + +(f). Chemical looping conversion systems which are fueled by combustible fossil fuels (e.g., coal, coal slurry, oil or natural gas) and which produce an energy output of steam, CO2, H2 or syngas or support subsystems, equipment or components thereof, including fuel feed, pulverizers, reactors, pressure parts, air heaters, fans, boiler cleaning systems, ash systems, valves, controls or diagnostics, other than maintenance and operation services performed as part of overall facility operation and management contracts for domestic or foreign government agencies or entities (including but not limited to NNSA, NASA, DOD, DOE, as well as United Kingdom NDA or MOD sites). + + + +(g). Pulverized coal injection systems for use in connection with steel production or support subsystems, equipment or components thereof, including pulverizers, pressurization systems, tanks, valves, controls or diagnostics, other than maintenance and operation services performed as part of overall facility operation and management contracts for domestic or foreign government agencies or entities (including but not limited to NNSA, NASA, DOD, DOE, as well as United Kingdom NDA or MOD sites). + + + + + + + +(h). Heat transfer surface cleaning systems and support subsystems, equipment and components thereof (other than said systems related to or utilized in connection with nuclear fueled systems and expressly excluding nuclear steam generators), including sootblowers (air, steam, water or sonic), related valve or piping systems, sprayers, controls (basic, intelligent) or diagnostics, other than maintenance and operation services performed as part of overall facility operation and management contracts for domestic or foreign government agencies or entities (including but not limited to NNSA, NASA, DOD, DOE, as well as United Kingdom NDA or MOD sites). + + + +(i). Ash handling systems or support subsystems, equipment or components thereof, including mechanical conveyors (wet or dry), pneumatic conveyors (wet, dry, dilute, or dense phase), ash conditioning, tanks, valves, specialty piping, controls or diagnostics, other than maintenance and operation services performed as part of overall facility operation and management contracts for domestic or foreign government agencies or entities (including but not limited to NNSA, NASA, DOD, DOE, as well as United Kingdom NDA or MOD sites). + + + +(j). Industrial pulverizer or grinding equipment systems or support subsystems (other than said systems or support subsystems related to or utilized in connection with nuclear fuel manufacturing or processing), other than maintenance and operation services performed as part of overall facility operation and management contracts for domestic or foreign government agencies or entities (including but not limited to NNSA, NASA, DOD, DOE, as well as United Kingdom NDA or MOD sites). + + + +(k). Drying and/or coating systems utilizing continuous and/or batch flow dryer/oven equipment for industrial processes, including but not limited to various production lines (e.g., roll fed, sheet fed, coating, drying or web handling), dryers and/or ovens (e.g., air flotation dryers or ovens, roll support dryers, infrared dryers, ultraviolet dryers, microwave or radio frequency), coating line auxiliary equipment, festoon and catenary style ovens, valves and material handling systems, other than maintenance and operation services performed as part of overall facility operation and management contracts for domestic or foreign government agencies or entities (including but not limited to NNSA, NASA, DOD, DOE, as well as United Kingdom NDA or MOD sites). + + + +(l). Utility emissions control systems used in connection with combustion power generation systems, which are designed to remove nitrogen oxides (e.g., SCR or SNCR), sulfur oxides (e.g., WFGD, SDA, CDS, DSI, or others), particulates (e.g., dry ESP, wet ESP, fabric filter or cyclonic), carbon dioxide (e.g., scrubber systems), hydrocarbons, or air toxics (e.g., Sb, Be, Cd, Cr, Co, Pb, Mn, Ni, (SO2)3, HF, Hg, P, Se, Cd, As, or HCl (or other acid gases)), HAPS, dioxins, furans or others) and/or subsequent energy or waste recovery or associated subsystems, equipment or components thereof, including valves, other than maintenance and operation services performed as part of overall facility operation and management contracts for domestic or foreign government agencies or entities (including but not limited to NNSA, NASA, DOD, DOE, as well as United Kingdom NDA or MOD sites). + + (m). Wastewater treatment systems (i) that process wastewater derived from combustion power generation and municipal solid waste("MSW") systems, including + + + + + + + +without limitation FGD dewatering systems or zero liquid discharge (ZLD) systems, or associated subsystems, equipment or components thereof, including valves or (ii) that process wastewater as part of or ancillary to the systems set forth in SpinCo Core Field 2(k), 2(l) or 2(n), in each case other than maintenance and operation services performed as part of overall facility operation and management contracts for domestic or foreign government agencies or entities (including but not limited to NNSA, NASA, DOD, DOE, as well as United Kingdom NDA or MOD sites). + + + +(n). Industrial emission control, gas cleaning and/or conditioning, or liquids purification and/or recovery systems (other than said systems set forth in RemainCo Core Field 1(m)), including SCR, SNCR, WFGD, SDA, CDS, DSI, other scrubbers, dry ESP, wet ESP, fabric filter, cyclonic, solvent recovery systems, biological abatement systems, solvent distillation systems (including waste water treatment), evaporative gas conditioning and cooling systems or regenerative thermal (and other) oxidation systems or associated subsystems, equipment or components thereof, including valves, for the removal of nitrogen oxides, sulfur oxides, particulates, carbon dioxide, hydrocarbons, or air toxics (e.g., Sb, Be, Cd, Cr, Co, Pb, Mn, Ni, (SO2)3, HF, Hg, P, Se, As, Cd, HCl (or other acid gases)), HAPS, dioxins, furans, others) and/or subsequent energy or waste recovery, other than maintenance and operation services performed as part of overall facility operation and management contracts for domestic or foreign government agencies or entities (including but not limited to NNSA, NASA, DOD, DOE, as well as United Kingdom NDA or MOD sites). + + + +(o). Hybrid power generation systems or associated equipment where renewable energy sources are combined with a combustible fossil fuel (e.g., coal, coal slurry, oil or natural gas) or combustible waste fuel (e.g., carbon monoxide, biomass, black liquor, MSW or RDF) primary energy source, other than maintenance and operation services performed as part of overall facility operation and management contracts for domestic or foreign government agencies or entities (including but not limited to NNSA, NASA, DOD, DOE, as well as United Kingdom NDA or MOD sites). + +3. Engineering procurement, construction, installation, supply, lease, commissioning, training , delivery, inspection, testing of, support, operations, maintenance, upgrade, repair, refurbishment, rebuilding, replacement, modification, relocation, project management, construction management, technical advice, construction consultation, siting support or consultation, environmental services or consultation, safety, health, troubleshooting, cleaning, upgrading and tooling of balance of plant for power generation facilities fired with combustible fossil fuels (e.g., coal, coal slurry, oil or natural gas) and pulp and paper facilities, other than maintenance and operation services performed as part of overall facility operation and management contracts for domestic or foreign government agencies or entities (including but not limited to NNSA, NASA, DOD, DOE, as well as United Kingdom NDA or MOD sites). + +RemainCo Core Field means: + +1. Design, development, research, engineering, procurement, fabrication, analysis, manufacture, construction, installation, supply, marketing, sale, lease, rent, commissioning, training, delivery, inspection, testing of, support, operations, inspection, maintenance, upgrade, repair, + + + + + + + +refurbishment, rebuilding, replacement, modification, repowering/fuel switching, relocation, localization, or other services, including project management, construction project management or consultation, plant, system or component licensing, siting support or consultation, environmental, safety, health, laboratory analysis, engineering studies, field engineering services, nondestructive testing, evaluation or analytical services, metallographic analysis, consulting services, troubleshooting, failure analysis, cleaning, upgrading, tooling, or decommissioning, related to: + + + +(a). Nuclear facilities and nuclear reactor plants, nuclear reactor systems, nuclear reactors, including all thermal reactors (including all heavy-water and light-water reactors), all water cooled reactors, all liquid metal cooled reactors (including sodium cooled reactors), gas cooled reactors (including helium, carbon dioxide and nitrogen) and molten salt reactors, breeder reactors, traveling wave reactors, high temperature reactors, small modular nuclear reactors, medical isotope reactors and components thereof and all Generation I, Generation II, Generation III and all advanced reactors, including and Generation IV reactors and iterations thereof regardless of design, and hybrid power generation systems and associated equipment where renewable energy sources are combined with a nuclear primary energy source. + + + +(b). Support systems and subsystems, equipment and components of nuclear systems and nuclear reactors, including, reactor coolant systems, reactor protection, control and instrumentation systems, reactor auxiliary and safety systems, balance of plant systems, reactor vessel closure heads, reactor and other pressure vessels and internals, reactor coolant pumps, stators and motors, reactor fuel channels, feeders and related components, steam generators, reactor control rod drive mechanisms and other reactor electro-mechanical equipment and controls therefore, specialized tooling and inspection systems, heat exchangers, pressurizers, primary and secondary piping, valves and pumps, spent fuel and other nuclear fuel and nuclear material storage and shipping, nuclear waste containers and related systems, audio/visual systems, steam generator tube inspection systems, repair, modification and stabilization systems, tube plugging and tube removal systems. + + + +(c). Nuclear fuel and nuclear fuel components, including enrichment and any related components, assembly, nuclear fuel plant processes, manufacturing systems and processes and systems for the chemical processing of radiological materials, fuel core and fuel bearing precision components, fuel powder, sources, targets, targets for medical isotope production and industrial isotope production, targets for research and analysis in research reactors, graphite reflectors and control rods, poisons and other special nuclear materials for development and manufacturing of fuel components for pebble bed and other reactors. + + (d). Electro-mechanical devices related to or used in commercial, research, government, military and other nuclear facilities, reactors orvessels and associated subsystems, equipment and components thereof. + + (e). Advanced power systems for space applications and associated subsystems, equipment and components thereof. + + (f). Nuclear and non-nuclear propulsion systems for naval (U.S. and foreign) submarines and aircraft carriers and associated subsystems, equipment and components thereof, including all aftermarket, replacement and repair parts, components and equipment for existing naval submarines and aircraft carriers. + + + + + + (g). Nuclear propulsion systems for naval (U.S. and foreign) vessels other than submarines and aircraft carriers and associated subsystems, equipment and components thereof, including aftermarket, replacement and repair parts, components and equipment for such existing vessels. + + (h). Single crystal composite and ceramic materials for use in nuclear, defense, space and aerospace applications and subsystems,equipment and components thereof + + + +(i). High energy physics equipment, including electro-magnetic storage devices, power conversion and conditioning systems, superconducting materials and plasma energy systems, and, in each case, subsystems and components thereof, excluding energy storage systems that store kinetic energy using a rotating mass with low friction losses and deliver the stored energy via power electronics that convert kinetic to electrical energy using electrical equipment typical for that type of service. + + (j). Ordnance components, subsystems and components thereof. + + (k). Unfired heat exchangers where the applicable heat source energy input is derived from the release and/or use of nuclear energy orsupport subsystems, equipment or components thereof, including pressure parts, cleaning systems, valves, controls or diagnostics. + + (l). Wastewater treatment systems that process wastewater derived from the release and/or use of nuclear energy and subsystems,equipment and components thereof + + (m). Emission control systems related to nuclear fuel manufacture or fabrication, storage of nuclear materials and waste and nuclear poweredsystems and subsystems, equipment and components thereof. + +2. Chemical and physical processing, storage and decontamination of and other management, operations, safety, security, emergency management, remediation and technical services related to radiological materials (including highly enriched uranium, low enriched uranium, natural uranium, fissile material and transuranic material), including receipt, storage, inspection, characterization, dissolution, recovery and purification, downblending, recycling, scrap recovery and processing and related research, development, engineering and analysis. + +3. Developing and providing services related to security (including direct security services as well as training, consulting and similar services) for new or existing commercial, research, government, military and other facilities or vessels, including tactical security, security training, IT security, development of security processes, fitness for duty and government compliance (both contractual compliance) and in connection with NRC or other applicable licensing requirements. + +4. Provide facility operation and maintenance services, including production and program management, maintenance (including maintenance and service of fossil fired and renewable power generation systems performed as part of overall facility operation and management contracts), operation, environmental health and safety, security, emergency management, wastewater treatment, remediation and abatement, decontamination and decommissioning material storage and disposition and other related technical services, to domestic or foreign agencies (including but not limited to NNSA, NASA, DOD, DOE as well as United Kingdom NDA or MOD sites) and commercial entities related to critical infrastructure, nuclear, non-nuclear and biological activities such as nuclear operations of reactors and reactor facilities, laboratory (including national laboratories) and other facility operations, weapons production, refurbishment, storage and stockpile management, component + + + + + + + +(including centrifuge) manufacturing, medical and industrial isotope development and manufacture, and Chemical Laboratory Analysis Capability by SEM, Mass Spectrometer and similar equipment, excluding the provision of the foregoing services for solely standalone power generation facilities fired with combustible fossil fuels, biomass or municipal solid waste or concentrated solar energy through tower based solar thermal conversion systems For the avoidance of doubt, the foregoing does not include the design, manufacture, installation, supply, sale and supply of hardware, including entire systems, within the SpinCo Core Field (including, without limitation, the systems set forth in SpinCo Core Field 2(k), 2(l), 2(m) and 2(n)) to domestic or foreign agencies or commercial entities. + +For the avoidance of doubt, the following are not included in the SpinCo Core Field or the RemainCo Core Field: + +Design, development, research, engineering, procurement, fabrication, analysis, manufacture, construction, installation, supply, marketing, sale, lease, rent, commissioning, training, delivery, inspection, testing of, support, operations, inspection, maintenance, upgrade, repair, refurbishment, rebuilding, replacement, modification, repowering/fuel switching, relocation, localization, or other services, including project management, construction project management or consultation, plant, system or component licensing, siting support or consultation, environmental, safety, health, laboratory analysis, engineering studies, field engineering services, nondestructive testing, evaluation or analytical services, metallographic analysis, consulting services, troubleshooting, failure analysis, cleaning, upgrading, tooling, or decommissioning related to the following: + + (a). Un-fired heat exchangers other than those identified in SpinCo Core Field 2(e) or unfired heat exchangers where the applicable heat source energy input is derived from the release and/or use of nuclear energy, and support subsystems, equipment and components thereof, including pressure parts, cleaning systems, valves, controls, diagnostics, repair equipment and services. + + (b). Production of hydrogen by other high temperature processes. + + (c). Non-nuclear propulsion systems for naval (U.S. and foreign) vessels other than submarines and aircraft carriers, and associated subsystems equipment and components thereof, including aftermarket, replacement and repair parts, components and equipment for such existing vessels. + + (d). Non-naval (i.e., commercial marine) propulsion systems and associated subsystems, equipment and components thereof, includingaftermarket, replacement and repair parts, components and equipment for existing systems. + + + + + +Schedule 1.1(i) + +Specific RemainCo Field; Specific SpinCo Field + +"Specific SpinCo Field" means the design, development, research, engineering, procurement, fabrication, analysis, manufacture, construction, installation, supply, marketing, sale, lease, rent, commissioning, training, delivery, inspection, testing of, support, operations, inspection, maintenance, upgrade, repair, refurbishment, rebuilding, replacement, modification, repowering/fuel switching, relocation, localization, or other services, including project management, construction project management or consultation, plant, system or component licensing, siting support or consultation, environmental, safety, health, laboratory analysis, engineering studies, field engineering services, nondestructive testing, evaluation or analytical services, metallographic analysis, consulting services, troubleshooting, failure analysis, cleaning, upgrading, tooling, or decommissioning, related to heat exchangers specifically for tower-based solar thermal conversion systems enabled by solar energy and support subsystems, equipment or components thereof, including pressure parts, cleaning systems, valves, controls or diagnostics. + +"Specific RemainCo Field" means the design, development, research, engineering, procurement, fabrication, analysis, manufacture, construction, installation, supply, marketing, sale, lease, rent, commissioning, training, delivery, inspection, testing of, support, operations, inspection, maintenance, upgrade, repair, refurbishment, rebuilding, replacement, modification, repowering/fuel switching, relocation, localization, or other services, including project management, construction project management or consultation, plant, system or component licensing, siting support or consultation, environmental, safety, health, laboratory analysis, engineering studies, field engineering services, nondestructive testing, evaluation or analytical services, metallographic analysis, consulting services, troubleshooting, failure analysis, cleaning, upgrading, tooling, or decommissioning, related to: + + + +(a). Nuclear facilities and nuclear reactor plants, nuclear reactor systems, nuclear reactors, including all thermal reactors (including all heavy-water and light-water reactors), all water cooled reactors, all liquid metal cooled reactors (including sodium cooled reactors), gas cooled reactors (including helium, carbon dioxide and nitrogen) and molten salt reactors, breeder reactors, traveling wave reactors, high temperature reactors, small modular nuclear reactors, medical isotope reactors and components thereof and all Generation I, Generation II, Generation III and all advanced reactors, including and Generation IV reactors and iterations thereof regardless of design, and hybrid power generation systems and associated equipment where renewable energy sources are combined with a nuclear primary energy source. + + + +(b). Support systems and subsystems, equipment and components of nuclear systems and nuclear reactors, including, reactor coolant systems, reactor protection, control and instrumentation systems, reactor auxiliary and safety systems, balance of plant systems, reactor vessel closure heads, reactor and other pressure vessels and internals, reactor coolant pumps, stators and motors, reactor fuel channels, feeders and related components, steam generators, reactor control rod drive mechanisms and other reactor electro-mechanical equipment and controls therefore, specialized tooling and inspection systems, + + + + + + heat exchangers, pressurizers, primary and secondary piping, valves and pumps, spent fuel and other nuclear fuel and nuclear material storage and shipping, nuclear waste containers and related systems, audio/visual systems, steam generator tube inspection systems, repair, modification and stabilization systems, tube plugging and tube removal systems. + + + +(c). Nuclear fuel and nuclear fuel components, including enrichment and any related components, assembly, nuclear fuel plant processes, manufacturing systems and processes and systems for the chemical processing of radiological materials, fuel core and fuel bearing precision components, fuel powder, sources, targets, targets for medical isotope production and industrial isotope production, targets for research and analysis in research reactors, graphite reflectors and control rods, poisons and other special nuclear materials for development and manufacturing of fuel components for pebble bed and other reactors. + + (d). Naval nuclear propulsion systems and associated subsystems, equipment and components thereof, including aftermarket, replacementand repair parts, components and equipment for existing systems. + + + + + +The company agrees to furnish supplementally a copy of any omitted exhibit or schedule to the Commission upon request. \ No newline at end of file diff --git a/full_contract_txt/BANGIINC_05_25_2005-EX-10-Premium Managed Hosting Agreement.txt b/full_contract_txt/BANGIINC_05_25_2005-EX-10-Premium Managed Hosting Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..e827d9db4e6353b291ffb7d3201920f991cc1d7b --- /dev/null +++ b/full_contract_txt/BANGIINC_05_25_2005-EX-10-Premium Managed Hosting Agreement.txt @@ -0,0 +1,79 @@ +03/01/05 + +607-1295 Richards Street 604.684.2255 + +Vancouver, BC V6B1B7 deep@rrt.ca deep systems + + + + + +Premium Managed Hosting Agreement + +This is a managed hosting agreement between AstroNutrition.com and deep systems. The effective term is 12 months beginning March 1, 2005 and ending February 28, 2006. + +Included Monthly Services + +System Administration + +Management of SMTP, IMAP, DNS, SQL database and HTTP server software and systems for the AstroNutrition.com domain and web site. This includes regular off-site backups of the website itself and the database. + +Change Management + +Management of site source code and integration of contributed software updates and bug fixes into zencart is included. + +Personal Technical Support + +24 x 7 emergency phone support and 1-business-day email response on non-critical issues. + +Includes a 99 percent server uptime guarantee. + +Available Professional Services + +Project Management + +Support of external development is charged at a rate of $55 CAD per hour. + +Custom Software Development + +New code enhancing the functionality of the system is charged at a rate of $55 CAD per hour. + +Terms of Agreement + +Managed hosting fees are $175 per month for a period of 12 months. This includes up to 10 G of bandwidth, with overages at $20 for each 1 G beyond 10 in any given month. The billing cycle is the 1st of each month. + +D/WLM/717334.1 + + + + + + + +- 2 - + +03/01/05 + +607-1295 Richards Street 604.684.2255 + +Vancouver, BC V6B1B7 deep@rrt.ca deep systems + + + + + +Co-located Facilities + +Servers are co-located at 700 West Georgia in downtown Vancouver on UPS and backup generator power. + +Server Software + +- FreeBSD 5 Operating System - Apache 2 HTTP Server - MySQL 4 Database Server - AWStats Advancd Web Stats Package - WebDAV interface for external developers - Subversion Change Management System - Trac Issue Tracking System and Project Knowledge Base + +/s/ Ryan Thompson + +/s/ Chester Ku Ryan Thompson, Deep Systems + +Chester Ku, Astro Nutrition + +D/WLM/717334.1 - 2 - \ No newline at end of file diff --git a/full_contract_txt/BANUESTRAFINANCIALCORP_09_08_2006-EX-10.16-AGENCY AGREEMENT.txt b/full_contract_txt/BANUESTRAFINANCIALCORP_09_08_2006-EX-10.16-AGENCY AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..90b9ecc132a1fb1363a629c734656d8e4cbd5e3a --- /dev/null +++ b/full_contract_txt/BANUESTRAFINANCIALCORP_09_08_2006-EX-10.16-AGENCY AGREEMENT.txt @@ -0,0 +1,311 @@ +QuickLinks -- Click here to rapidly navigate through this document + +Exhibit 10.16 + + EL BANCO FINANCIAL CORPORATION + +AGENCY AGREEMENT + +, 2006 + +Ladies and Gentlemen: + +El Banco Financial Corporation, a Georgia corporation (the "Company"), proposes, subject to the terms and conditions stated herein, to engage the sales agent identified on the signature page to this Agreement (the "Agent" or "you") to assist the Company on a "best efforts" basis in the sale of the Company's common stock, $.01 par value per share (the "Shares"). + +1. The Offering. The Company is offering the Shares, in connection with the Company's initial public offering (the "Offering"). + +The Company has prepared and filed, in accordance with the provisions of the Securities Act of 1933 and the rules and regulations thereunder (collectively, the "1933 Act"), with the Securities and Exchange Commission (the "Commission") a registration statement on Form SB-2 (File No. 333-135900) under the 1933 Act, including a prospectus, relating to the Shares. Except where the context otherwise requires, "Registration Statement," as used herein, means the registration statement, as amended at the time of such registration statement's effectiveness for purposes of Section 11 of the 1933 Act (the "Effective Time"), including (i) all documents filed as a part thereof, (ii) any information contained in a prospectus subsequently filed with the Commission pursuant to Rule 424(b) under the 1933 Act and deemed, pursuant to Rule 430A or Rule 430C under the 1933 Act, to be part of the registration statement at the Effective Time, and (iii) any registration statement filed to register the offer and sale of the Shares pursuant to Rule 462(b) under the 1933 Act. + +Except where the context otherwise requires, a "Preliminary Prospectus," as used herein, means any preliminary prospectus included in the Registration Statement or filed with the Commission pursuant to Rule 424(a) under the Securities Act. + +Except where the context otherwise requires, "Prospectus," as used herein, means the prospectus filed by the Company with the Commission pursuant to Rule 424(b) under the 1933 Act on or before the second business day after the Effective Time (or such earlier time as may be required under the Act), or, if no such filing is required, the final prospectus included in the Registration Statement at the Effective Time. + +"Permitted Free Writing Prospectuses," as used herein, means the documents and each "road show" (as defined in Rule 433(h)(4) under the 1933 Act), if any, related to the offering of the Shares contemplated hereby that is a "written communication" (as defined in Rule 405 under the 1933 Act). + +"Disclosure Package," as used herein, means any Preliminary Prospectus together with any combination of one or more of the Permitted Free Writing Prospectuses, if any. + +"Blue Sky Application," as used herein, means any instrument or document executed by the Company or based upon written information supplied by the Company filed in any state or jurisdiction to register or qualify any or all of the Shares or to claim an exemption therefrom or provided to any state or jurisdiction to exempt the Company as a broker-dealer or the officers, directors or employees as broker-dealers or agents of the Company under the securities laws thereof. + +Any reference herein to the Registration Statement, any Preliminary Prospectus, the Prospectus or any Permitted Free Writing Prospectus shall be deemed to refer to and include the documents, if any, incorporated by reference, or deemed to be incorporated by reference, therein (the "Incorporated Documents"), including, without limitation, unless the context otherwise requires, the documents, if + + + + + + + + + +any, filed as exhibits to such Incorporated Documents. Any reference herein to the terms "amend," "amendment" or "supplement" with respect to the Registration Statement, any Preliminary Prospectus, the Prospectus or any Permitted Free Writing Prospectus shall be deemed to refer to and include the filing of any document under the Securities Exchange Act of 1934 and the rules and regulations thereunder (the "Exchange Act") on or after the Effective Time, or the date of such Preliminary Prospectus, the Prospectus or such Permitted Free Writing Prospectus, as the case may be, and deemed to be incorporated therein by reference. + +2. Retention of Agent; Compensation; Sale and Delivery of the Shares. Subject to the terms and conditions herein set forth, the Company hereby appoints the Agent as a placement agent, on a non-exclusive basis, to utilize its "best efforts" to solicit subscriptions for the Shares and to assist the Company with respect to the Company's sale of the Shares in the Offering. + +On the basis of the representations and warranties and subject to the terms and conditions of this Agreement, the Agent accepts such appointment. The Agent shall not be obligated to purchase any Shares and shall not be obligated to take any action which Agent deems to be inconsistent with any applicable law, regulation, decision or order. Subscriptions will be offered as described in the Registration Statement. Except as otherwise provided in this Agreement, the appointment of the Agent will terminate upon completion, expiration or termination of the Offering. + +In the event the Company is unable to sell a minimum of 1,875,000 Shares on or before June 30, 2007, this Agreement shall terminate and the Company shall cause the Escrow Agent (as defined below) to refund to any persons who have subscribed for any of the Shares the full amount it received from them, without interest, as set forth in the Prospectus; and none of the parties to this Agreement shall have any obligation to the other parties hereunder, except as set forth in this Section 2 and in Sections 8, 10, and 11. + +In the event the Offering is terminated and the Closing (as defined below) does not occur, then the Agent shall not receive the fees set forth in subparagraph (a) below (the "Fees"); provided, however, regardless of whether or not the Closing occurs, the Agent shall be entitled to receive reimbursement of its actual accountable out-of-pocket expenses, as set forth in subparagraph (b) below. + +If all conditions precedent to the consummation of the Offering are satisfied, the Company agrees to issue, or have issued, the Shares sold in the Offering and to release for delivery certificates for such Shares on the Closing Date (as defined below) against payment to the Company by any means authorized pursuant hereto; provided, however, that no funds shall be released to the Company until the conditions specified in Section 9 hereof shall have been complied with to the reasonable satisfaction of the Company. The release of Shares against payment therefor shall be made on a date or dates and at a place determined by the Company (each closing, a "Closing"). Certificates for Shares shall be delivered directly to the purchasers in accordance with their directions. The date upon which the Company shall release or deliver the Shares sold in the Offering, in accordance with the terms herein, is called the "Closing Date." After the initial Closing, which may occur at any time after the minimum of 1,875,000 Shares have been sold, the Company may continue the Offering and the Agent may continue to solicit purchasers for the Shares up to the maximum amount of the Offering or until the Offering expires or is closed by the Company as set forth in the Prospectus. Additional Closings shall occur with respect to Shares sold after the initial Closing on dates and at locations as determined by the Company after the initial Closing, each also considered a "Closing Date". + +The Agent shall receive the following compensation for its services hereunder: + +a. The fee shall be equal to 5.2% of the "gross proceeds" received in the Offering attributable to the efforts of the Agent. At least 48 hours prior to each Closing, the Agent shall deliver a schedule, identified as Appendix A, that lists each investor and the amount of investment. + +2 + + + + + + + +b. Agent shall be reimbursed for expenses as contemplated by Section 8 of this Agreement, regardless of whether the Offering is successfully completed. Any out-of-pocket expenses or commissions payable under this Agreement shall be paid in next day funds on the earlier of the initial Closing Date or a determination by the Company to terminate or abandon the Offering, and on each subsequent Closing Date thereafter. + +3. Representations and Warranties of the Company. The Company represents and warrants to the Agent that: + +a. The Company has all such power, authority, authorizations, approvals and orders as may be required to enter into this Agreement, to carry out the provisions and conditions hereof and to issue and sell the Shares as contemplated herein and as described in the Registration Statement, any Preliminary Prospectuses, the Prospectus or any Permitted Free Writing Prospectus. The consummation of the Offering, the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated herein have been duly and validly authorized by all necessary corporate action on the part of the Company and this Agreement has been validly executed and delivered by the Company and is the valid, legal and binding agreement of the Company enforceable in accordance with its terms, except to the extent, if any, that the provisions of Section 10 hereof may be unenforceable as against public policy, and except to the extent that such enforceability may be limited by bankruptcy laws, insolvency laws, or other laws affecting the enforcement of creditors' rights generally. + +b. The Registration Statement is effective under the 1933 Act; no stop order of the Commission preventing or suspending the use of any Preliminary Prospectus or Permitted Free Writing Prospectus or the effectiveness of the Registration Statement has been issued, and no proceedings for such purpose have been instituted or, to the knowledge of the Company, are contemplated by the Commission; the Registration Statement complied when it became effective, complies as of the date hereof and, as amended or supplemented, at each time a subscription agreement of funds are submitted by prospective investors to the Company during the Offering period (each such time referred to as a "time of delivery"), at the Closing Date and at all times during which a prospectus is required by the 1933 Act to be delivered (whether physically or through compliance with Rule 172 under the 1933 Act or any similar rule) in connection with any sale of Shares, will comply, in all material respects, with the requirements of the 1933 Act; each Preliminary Prospectus complied, at the time it was filed with the Commission, and complies as of the date hereof, in all material respects, with the requirements of the 1933 Act; at no time during the period that begins on the earlier of the date of such Preliminary Prospectus and the date such Preliminary Prospectus was filed with the Commission and ends at the Closing Time (as defined herein) did or will any Preliminary Prospectus, as then amended or supplemented, include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, and at no time during such period did or will any Preliminary Prospectus, as then amended or supplemented, together with any combination of one or more of the then issued Permitted Free Writing Prospectuses, if any, include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; the Prospectus will comply, as of its date, the date that it is filed with the Commission, each time of delivery, the Closing Date and at all times during which a prospectus is required by the Act to be delivered (whether physically or through compliance with Rule 172 under the 1933 Act or any similar rule) in connection with any sale of Shares, in all material respects, with the requirements of the 1933 Act (including, without limitation, Section 10(a) of the 1933 Act); at no time during the period that begins on the earlier of the date of the Prospectus and the date the Prospectus is filed with the Commission and ends at the later of the Closing Time and the end of the period during which a prospectus is required by the 1933 Act to be delivered (whether physically or through compliance with Rule 172 under the 1933 Act or any similar rule) in connection with any sale of Shares did or will the Prospectus, as then amended or + +3 + + + + + + + +supplemented, include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; at no time during the period that begins on the date of such Permitted Free Writing Prospectus and ends at the time of purchase did or will any Permitted Free Writing Prospectus include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the Company makes no representation or warranty with respect to any statement contained in the Registration Statement, any Preliminary Prospectus, the Prospectus or any Permitted Free Writing Prospectus in reliance upon and in conformity with information concerning the Agent and furnished in writing by or on behalf of the Agent to the Company expressly for use in the Registration Statement, such Preliminary Prospectus, the Prospectus or such Permitted Free Writing Prospectus, as applicable. All Permitted Free Writing Prospectuses were preceded by, or accompanied with, a statutory prospectus meeting the requirements of Section 10(a) of the Act as required by Rule 164 under the 1933 Act. + +c. If a Permitted Free Writing Prospectus is sent or given after the Registration Statement is filed with the Commission (and after such Permitted Free Writing Prospectus was, if required pursuant to Rule 433(d) under the 1933 Act, filed with the Commission), the sending or giving, by the Agent, of any Permitted Free Writing Prospectus will satisfy the provisions of Rule 164 or Rule 433 of the 1933 Act (without reliance on subsections (b), (c) and (d) of Rule 164); each of the Preliminary Prospectuses is a prospectus that, other than by reason of Rule 433 or Rule 431 under the 1933 Act, satisfies the requirements of Section 10 of the 1933 Act, including a price range where required by rule; neither the Company nor the Agent is disqualified, by reason of subsection (f) or (g) of Rule 164 under the 1933 Act, from using, in connection with the offer and sale of the Shares, "free writing prospectuses" (as defined in Rule 405 under the 1933 Act) pursuant to Rules 164 and 433 under the 1933 Act; the Company is not an "ineligible issuer" (as defined in Rule 405 under the 1933 Act) as of the eligibility determination date for purposes of Rules 164 and 433 under the 1933 Act with respect to the offering of the Shares contemplated by the Registration Statement; the parties hereto agree and understand that the content of any and all road shows related to the Offering is solely the property of the Company. + +d. No Blue Sky Application will include an untrue statement of a material fact or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the Company makes no representation or warranty with respect to any statement contained in a Blue Sky Application in reliance upon and in conformity with information concerning the Agent and furnished in writing by or on behalf of the Agent to the Company expressly for use in the Blue Sky Application. + +e. The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of State of Georgia, and has corporate power and authority to own, lease or operate its properties and to conduct its business as described in the Registration Statement, the Preliminary Prospectuses, the Prospectus and the Permitted Free Writing Prospectuses, if any, and to enter into and perform its obligations under this Agreement. + +f. Since the respective dates as of which information is given in the Registration Statement, the Preliminary Prospectuses, the Prospectus and the Permitted Free Writing Prospectuses, if any, except as otherwise stated therein, there has been no material adverse change in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company considered as one enterprise, whether or not arising in the ordinary course of business (a "Material Adverse Effect"). + +g. The Company has an authorized capitalization as set forth in the Registration Statement, the Preliminary Prospectuses, the Prospectus and the Permitted Free Writing Prospectuses, if any. + +4 + + + + + + + +h. The Shares have been duly and validly authorized and, when issued and delivered against payment therefor as provided herein, will be duly and validly issued and fully paid and nonassessable and will conform to the description of the Shares contained in the Registration Statement, the Preliminary Prospectuses, the Prospectus and the Permitted Free Writing Prospectuses, if any. + +i. The issuance and sale of the Shares being issued at each Closing Date by the Company and the performance of this Agreement and the consummation by the Company of the other transactions herein contemplated will not conflict with or result in a breach or violation of any terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company is a party or by which any of the property or assets of the Company is bound or to which any of the property or assets of the Company is subject, nor will such action result in any violation of the provisions of the Articles of Incorporation, as amended, or Bylaws, as amended, of the Company or any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company or any of its properties; and no consent, approval, authorization, order, registration or qualification of or with any such court or governmental agency or body is required for the issuance and sale of the Shares or the consummation by the Company of the transactions contemplated by this Agreement, except such consents, approvals, authorizations, registrations or qualifications as may be required under the Act and under state securities or Blue Sky laws in connection with the purchase and distribution of the Shares by the Agent. + +j. The Company owns its assets and has the right to conduct its business as currently conducted. + +k. There is no litigation or governmental proceeding pending or threatened against, or involving the properties or business of, the Company that might materially and adversely affect the value or the operation of the any such properties or the business of the Company. + +l. McNair, McLemore, Middlebrooks & Co., LLP, which has certified certain financial statements and supporting schedules of the Company included in the Registration Statement, the Preliminary Prospectus, the Prospectus and the Free Writing Prospectuses containing an audit report, are independent public accountants as required by the Act and the rules and regulations of the Commission thereunder. + +m. The Company has not distributed, nor will it distribute, prior to the Closing Time any prospectus (as defined under the 1933 Act) in connection with the Offering and sale of the Shares other than the Registration Statement, any Preliminary Prospectuses, the Prospectus, any Permitted Free Writing Prospectuses or other materials, if any, permitted by the 1933 Act, including Rule 134 promulgated thereunder. + +4. Representations and Warranties of the Agent. + +a. The Agent has all such power, authority, authorizations, approvals and orders as may be required to enter into this Agreement, to carry out the provisions and conditions hereof and to act as a sales agent as contemplated herein and as described in the Registration Statement, any Preliminary Prospectuses, the Prospectus or any Permitted Free Writing Prospectus. The consummation of the Offering, the execution, delivery and performance of this Agreement by the Agent and the consummation by the Agent of the transactions herein contemplated have been duly and validly authorized by all necessary corporate action on the part of the Agent and this Agreement has been validly executed and delivered by the Agent and is the valid, legal and binding agreement of the Agent enforceable in accordance with its terms, except to the extent, if any, that the provisions of Section 8 hereof may be unenforceable as against public policy, and except to the extent that such enforceability may be limited by bankruptcy laws, insolvency laws, or other laws affecting the enforcement of creditors' rights generally. + +5 + + + + + + + +b. The Agent is registered as a broker-dealer under applicable federal and state laws, is a member in good standing of the National Association of Securities Dealers, Inc., and has met and will continue to meet all registration, licensing, financial and reporting requirements it is required to meet under applicable federal and state laws and regulations in order to provide the services the Agent has agreed to provide, or that the Agent contemplates that it will provide, to the Company under this Agreement or otherwise in connection with the Offering. + +c. Each employee, agent, representative or affiliate of the Agent that provides any services to the Company under this Agreement or otherwise in connection with the Offering will, at the time of providing those services, meet all registration and licensing requirements he or it is required to meet under applicable federal and state laws and regulations in order to provide those services. + +5. Delivery and Payment. + +An escrow procedure shall be established which shall comply with Commission Rule 15c2-4, promulgated under the Exchange Act and applicable NASD rules and regulations, with Flag Bank as escrow agent (the "Escrow Agent"). + +The Company and the Agent shall transmit all funds received from subscribers to the Escrow Agent by noon of the next business day following receipt thereof. The Company shall direct the Escrow Agent to make payment for Shares sold hereunder by wire transfer or certified or bank cashier's check drawn to the order of the Company in next day funds. Such payment is to be made at the offices of Flag Bank, at 10:00 a.m. local time, on each Closing Date or at another time agreed to by the Agent and the Company. The time of such payment is referred to as the "Closing Time." The Company shall direct the Escrow Agent to deliver payment of the fees due to the Agent pursuant to Section 2 hereof (less any portion thereof previously paid to the Agent) to the Agent by wire transfer or certified or bank cashier's check drawn to the order of the Agent in next day funds, to the Agent on each Closing Date. + +6. Covenants of the Company. The Company hereby covenants to the Agent as follows: + +a. The Company has filed the Registration Statement with the Commission. The Company will use its best efforts to cause any post-effective amendment to the Registration Statement to be declared effective by the Commission, and will immediately upon receipt of any information concerning the events listed below notify the Agent (i) when the Registration Statement, as amended, has become effective; (ii) of any request by the Commission or any other governmental entity for any amendment or supplement to the Registration Statement; (iii) of the issuance by the Commission or any other governmental agency of any order or other action suspending the Offering or the use of the Registration Statement, the Preliminary Prospectuses, the Prospectus or the Permitted Free Writing Prospectuses, if any; or (iv) of the issuance by the Commission or any state authority of any stop order suspending the effectiveness of the Registration Statement or of the initiation or threat of initiation or threat of any proceedings for that purpose. + +b. The Company will deliver to the Agent copies of the Registration Statement, as originally filed and each amendment thereto. Further, the Company will deliver such additional copies of the foregoing documents to counsel to the Agent as may be required for any NASD filings. The Company will also deliver to the Agent such number of copies of the Prospectus, as amended or supplemented, as the Agent may reasonably request. + +c. The Company will comply in all material respects with any and all terms, conditions, requirements and provisions with respect to the Offering and the transactions contemplated thereby imposed by the Commission, by applicable state law and regulations, and by the 1933 Act, the Exchange Act and the rules and regulations of the Commission promulgated under such statutes, to be complied with prior to or subsequent to the Closing Date. + +6 + + + + + + + +d. If any event relating to or affecting the Company shall occur, as a result of which it is necessary, in the reasonable opinion of counsel for the Company, to amend or supplement the Registration Statement, any Preliminary Prospectus, the Prospectus or any Permitted Free Writing Prospectus in order to make them not misleading in light of the circumstances existing at the time of its use, the Company will, at its expense, prepare, file with the Commission, and furnish to the Agent, a reasonable number of copies of an amendment or amendments of, or a supplement or supplements to, the Registration Statement, any Preliminary Prospectus, the Prospectus or any Permitted Free Writing Prospectus which will amend or supplement the Registration Statement, Preliminary Prospectus, Prospectus or any Permitted Free Writing Prospectus so that as amended or supplemented it will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances existing at the time, not misleading. + +e. The Company will endeavor in good faith, in cooperation with the Agent, to register or to qualify the Shares for offering and sale under the applicable securities laws of the jurisdictions in which the Offering will be conducted; provided, however, that the Company shall not be obligated to file any general consent to service of process or to qualify to do business in any jurisdiction in which it is not so qualified. In each jurisdiction where any of the Shares shall have been registered or qualified as above provided, the Company will make and file such statements and reports in each year as are or may be required by the laws of such jurisdictions. + +f. Prior to the Closing Date, the Company will inform the Agent of any event or circumstances of which it is aware as a result of which the Registration Statement, any Preliminary Prospectus, the Prospectus, or any Permitted Free Writing Prospectus as then supplemented or amended, would include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein not misleading. + +g. The Company will distribute the Prospectus or other offering materials in connection with the offering and sale of the Shares only as set forth in the Prospectus, and only in accordance with the 1933 Act and the Exchange Act and the rules and regulations promulgated under such statutes, and the laws of any state in which the Shares are qualified for sale. + +h. The Company will maintain appropriate arrangements with the Escrow Agent for depositing all funds received from persons mailing subscriptions for or orders to purchase Shares in the Offering as described in the Prospectus until the Closing Date and satisfaction of all conditions precedent to the release of the Company's obligation to refund payments received from persons subscribing for or ordering Shares in the Offering as described in the Prospectus. + +i. The Company will take such actions and furnish such information as are reasonably requested by the Agent in order for the Agent to ensure compliance with the NASD Rule 2790 "Restrictions on the Purchase and Sale of Initial Equity Public Offerings of Equity Securities." + +j. The Company will not deliver the Shares until the Company has satisfied or caused to be satisfied each condition set forth in Section 9 hereof. + +7. Covenants of the Agent. + +a. The Agent will not provide any service or engage in any activity, and it will not permit the Agent or any of its employees, agents, representatives or affiliates to provide any service or engage in any activity, whether pursuant to this Agreement or otherwise in connection with the Offering, for which it or he does not have in effect all registrations, licenses and approvals necessary to cause that service or activity to comply with applicable federal and state laws and regulations. + +b. Notwithstanding anything contained in this Agreement to the contrary, the terms and conditions of the Offering as described in the Prospectus shall control the conduct of the Offering, and + +7 + + + + + + + +neither the Agent nor any of its respective employees, agents, representatives or affiliates shall take any action in connection with the Offering contrary to those terms and conditions. + +c. In connection with or during the course of the Offering, neither the Agent nor any employee, agent, representative or affiliate of the Agent will make any representation or provide any information to any subscriber or potential subscriber for the Shares other the representations and information contained in the Prospectus or other information specifically approved by the Company. + +8. Payment of Expenses. The Company covenants and agrees with the Agent that it will pay or cause to be paid the following: (i) the fees, disbursements and expenses of counsel to the Company and accountants in connection with the registration of the Shares under the Act and all other expenses in connection with the preparation, printing and filing of the Registration Statement, each Preliminary Prospectus, the Prospectus, each Permitted Free Writing Prospectus and any amendments or supplements thereto, and the mailing and delivering of copies thereof to the Agent and dealers; (ii) the cost of printing or reproducing this agreement, the Blue Sky Survey, any dealer agreements and any other documents in connection with the offering, purchase, sale and delivery of the Shares; (iii) all expenses in connection with the qualification of the Shares for offering and sale under state securities laws; (iv) the cost of preparing stock certificates; (v) all expenses related to road shows; (vi) the costs or expenses of any transfer agent or registrar; and (vi) all reasonable out-of-pocket fees and expenses of the Agent, including the reasonable fees and expenses of counsel for the Agent related to the Offering and not otherwise specifically provided for in this Section; the total for all such reasonable out-of-pocket fees and expenses shall not exceed $5,000 without the consent of the Company (exclusive of any blue sky-related fees if the Agent's counsel is requested to complete such services by the Company). + +9. Conditions to Closing. The Closing of the Offering is subject to the following conditions: + +a. The Registration Statement and any registration statement required to be filed, prior to the sale of the Shares, under the Act pursuant to Rule 424(b) shall have been filed and shall have become effective under the 1933 Act. + +b. (i) No stop order with respect to the effectiveness of the Registration Statement shall have been issued under the Act or proceedings initiated under Section 8(d) or 8(e) of the 1933 Act; (ii) the Registration Statement and all amendments thereto shall not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; (iii) none of the Preliminary Prospectuses or the Prospectus, and no amendment or supplement thereto, shall include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they are made, not misleading; (iv) no Disclosure Package, and no amendment or supplement thereto, shall include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they are made, not misleading; and (v) none of the Permitted Free Writing Prospectuses, if any, shall include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they are made, not misleading. + +c. The Company and Agent agree that Appendix A is accurate and complete. + +d. The NASD has confirmed that it has not raised any objection with respect to the fairness and reasonableness of the terms of this Agreement and Agent's compensation hereunder. + +10. Indemnification by the Company. + +a. The Company agrees to indemnify and hold harmless the Agent, and its officers, directors, agents, representatives and affiliates and any other person, if any, who controls the Agent or its + +8 + + + + + + + +affiliates within the meaning of the 1933 Act (these parties together with the Agent are hereinafter referred to as the "Agent Indemnitees") against any and all losses, claims, damages, liabilities and expenses (including reasonable costs of investigation and counsel's fees) arising out of or based upon the actions of the Company or any of its employees, agents, representatives or affiliates (i) that constitute bad faith or gross negligence on the part of the Company or its employees, agents, representatives or affiliates, (ii) that constitute violations of applicable federal or state laws or regulations on the part of the Company or its employees, agents, representatives or affiliates, or (iii) that constitute a violation of any of the Company's agreements, representations or warranties contained in this Agreement. The Company will reimburse the Agent and the Agent Indemnitees for any legal or other expenses reasonably incurred (individually or collectively) by it or them in connection with investigating or defending any such loss, claim, damage, liability or action. However, the Company will not be responsible for (i) any losses, claims, damages, liabilities or expenses that result from bad faith or gross negligence on the part of the Agent or any of its employees, agents, representatives or affiliates, or on the part of the Agent Indemnitee, (ii) that arise out of actions or conduct by the Agent or any of its employees, agents, representatives or affiliates, or by any Agent Indemnitee, that constitute a violation of any applicable federal or state law or regulation, or (iii) that arise out of actions or conduct by the Agent or any of its employees, agents, representatives or affiliates, or by any Agent Indemnitee, that constitutes a violation of any of Agent's agreements, representations or warranties contained in this Agreement. + +b. If any action or claim shall be brought or asserted against an Agent Indemnitee in respect of which indemnity may be sought from the Company, it or he shall promptly notify the Company in writing, enclosing copies of all papers served on or delivered to such party. A failure to notify or delay in notifying the Company shall not affect the right of the Agent Indemnitee to be indemnified or reimbursed hereunder except to the extent the Company is shown to have been materially prejudiced as a result of such failure. No Agent Indemnitee shall settle, compromise or consent to the entry of any judgment with respect to any litigation, investigation or proceeding commenced or threatened by any person or entity, including any governmental agency or body, or any claim whatsoever in respect of which indemnification or contribution can be sought under this Section 10 (whether or not the Agent Indemnitees are actual or potential parties thereto), unless the Agent or the Agent Indemnitee obtains the prior written consent of the Company. + +11. Indemnification by the Agent. + +a. The Agent agrees to indemnify and hold harmless the Company, and its officers, directors, agents, organizers, representatives and affiliates and any other person, if any, who controls the Company or its affiliates within the meaning of the 1933 Act (these parties together with the Company are hereinafter referred to as the "Company Indemnitees") against any and all losses, claims, damages, liabilities and expenses (including reasonable costs of investigation and counsel's fees) arising out of or based upon the actions of the Agent or any of its respective employees, agents, representatives or affiliates (i) that constitute bad faith or gross negligence on the part of the Agent or any of its employees, agents, representatives or affiliates, (ii) that constitute violations of applicable federal or state laws or regulations on the part of the Agent or any of its employees, agents, representatives or affiliates, or (iii) that constitutes a violation of any of the Agent's agreements, representations or warranties contained in this Agreement. The Agent will reimburse the Company and the Company Indemnitees for any legal or other expenses reasonably incurred (individually or collectively) by it or them in connection with investigating or defending any such loss, claim, damage, liability or action. However, the Agent will not be responsible for (i) any losses, claims, damages, liabilities or expenses that result from bad faith or gross negligence on the part of the Company or any of its employees, agents, representatives or affiliates, or on the part of the Company Indemnitee, (ii) that arise out of actions or conduct by the Company or any of its employees, agents, representatives or affiliates, or by the Company, that constitute a violation of any applicable federal or state law or regulation, or + +9 + + + + + + + +(iii) that constitutes a violation of any of the Company's agreements, representations or warranties contained in this Agreement. + +b. If any action or claim shall be brought or asserted against a Company Indemnitee in respect of which indemnity may be sought from the Agent, it shall promptly notify the Agent in writing, enclosing copies of all papers served on or delivered to such party. A failure to notify or delay in notifying the Agent shall not affect the right of the Company Indemnitee to be indemnified or reimbursed hereunder except to the extent the Agent is shown to have been materially prejudiced as a result of such failure. No Company Indemnitee shall settle, compromise or consent to the entry of any judgment with respect to any litigation, investigation or proceeding commenced or threatened by any person or entity, including any governmental agency or body, or any claim whatsoever in respect of which indemnification or contribution can be sought under this Section 11 (whether or not the Company Indemnitees are actual or potential parties thereto), unless the Company obtains the prior written consent of the Company. + +c. The Agent agrees to indemnify and hold harmless the Company Indemnitees against any and all losses, liabilities, claims, damages and expenses to which it or they may become subject if such losses, liabilities, claims, damages or expenses arise solely out of, or are based solely on, (i) any untrue or alleged untrue statement of material fact contained in the Prospectus or any amendment or supplement thereto, or the omission of a material fact required to be stated therein, or necessary to make the statements therein not misleading, but only if such untrue statement or omission or alleged omission was made in the Prospectus (as amended or supplemented) based upon and in conformity with written information concerning the Agent furnished to the Company by the Agent specifically for use in the Prospectus or (ii) any untrue or alleged untrue statement of material fact contained in any other information (whether oral or in writing) provided by the Agent or any of its respective employees, agents, representatives or affiliates to the Company or any other person in the course of providing services pursuant to this Agreement or otherwise in connection with the Offering. + +12. Representations and Indemnities to Survive. All representations, warranties and agreements contained in this Agreement of the Company and the Agent shall remain in full force and effect, regardless of any termination or cancellation of this Agreement, and shall survive delivery of and payment for the Shares. + +13. Termination and Payment of Expenses. This Agreement shall become effective on the date hereof and shall terminate upon the termination of the Offering. If for any reason any Shares are not delivered by or on behalf of the Company as provided herein, the Company will reimburse the Agent for all actual and accountable out-of-pocket expenses, including fees and disbursements of counsel, reasonably incurred by the Agent in making preparations for the purchase, sale and delivery of the Shares not so delivered, but the Company shall then be under no further liability to the Agent except as provided in Section 8 and Section 10 hereof. + +10 + + + + + + + +14. Notices. All statements, requests, notices and agreements hereunder shall be in writing and shall be sufficient in all respects if delivered or sent by reliable courier, first class mail, or facsimile transmission to: + + Agent: As set forth on the signature page to this agreement + + Company: El Banco Financial Corporation 623 Holcomb Bridge Road Roswell, Georgia 30076 Facsimile: (678) 352-1514 + + With a copy to: Nelson Mullins Riley & Scarborough LLP 999 Peachtree Street, Suit 1400 Atlanta, Georgia 30309 Attention: Rusty Pickering Facsimile: (404) 817-6050 + +Any such statements, requests, notices or agreements shall take effect upon receipt thereof. + +15. Non-Exclusive. This Agreement does not create an exclusive arrangement for the Agent to provide services to the Company, and nothing in this Agreement shall preclude the Company from contracting or entering into an arrangement with any other sales agent, consultant, broker-dealer or other person for such other person or entity to provide services to the Company as agent in the Offering and to receive compensation from the Company in connection with the Offering. + +16. Successors. This Agreement shall be binding upon, and inure solely to the benefit of, the Agent and the Company, and to the extent provided in Sections 10, 11 and 12 hereof; the officers and directors of the Company and each person who controls the Company, or the Agent, and their respective heirs, executors, administrators, successors and assigns, and no other person shall acquire or have any right under or by virtue of this agreement. No purchaser of any of the Shares from the Agent shall be deemed a successor or assign by reason merely of such purchase. + +17. Time of the Essence. Time shall be of the essence in this Agreement. + +18. Business Day. As used herein, the term "business day" shall mean any day when the Commission's office in Washington, D.C. is open for business. + +19. Applicable Law. THIS AGREEMENT IS TO BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF GEORGIA (WITHOUT REGARD TO THOSE LAWS RELATING TO CHOICE OF LAW) APPLYING TO CONTRACTS ENTERED INTO AND TO BE PERFORMED WITHIN THE STATE OF GEORGIA. VENUE FOR ANY CAUSE OF ACTION ARISING FROM THIS AGREEMENT WILL LIE IN FULTON COUNTY, GEORGIA. + +20. Captions. The captions included in this Agreement are included solely for convenience of reference and shall not be deemed to be a part of this Agreement. + +21. Counterparts. This Agreement may be executed by any one or more of the parties in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same instrument. + +22. Pronouns. All pronouns used herein shall be deemed to refer to the masculine, feminine or neuter gender as the context requires. + +[Signatures on Following Page] + +11 + + + + + + + + IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be executed on its behalf by its duly authorized officers as of the day and year first above written. + + EL BANCO FINANCIAL CORPORATION + + By: Name: Its: + + + + + +(SALES AGENT) By: Name: Its: Address: + +12 + + + + + + + + Appendix A + +Name of Investor + + + +Amount of Investment + +13 + + + + + +QuickLinks + +EL BANCO FINANCIAL CORPORATION AGENCY AGREEMENT Appendix A \ No newline at end of file diff --git a/full_contract_txt/BELLICUMPHARMACEUTICALS,INC_05_07_2019-EX-10.1-Supply Agreement.txt b/full_contract_txt/BELLICUMPHARMACEUTICALS,INC_05_07_2019-EX-10.1-Supply Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..873129f6bd2341675e8aa1cf90337ade923faa24 --- /dev/null +++ b/full_contract_txt/BELLICUMPHARMACEUTICALS,INC_05_07_2019-EX-10.1-Supply Agreement.txt @@ -0,0 +1,1205 @@ +Exhibit 10.1 [***] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would likely be competitively harmful if publicly disclosed. + +Miltenyi Biotec-Bellicum Supply Agreement (Execution Copy March 27, 2019) + +SUPPLY AGREEMENT + +(MB Global Contract Number MBGCR 19001) + +This Supply Agreement (this "Agreement") is made and entered into, effective as of March 27, 2019 (the "Effective Date"), by and between Miltenyi Biotec GmbH, a German corporation having an address at Friedrich-Ebert-Str. 68, 51429 Bergisch Gladbach, Germany (hereinafter referred to as "Miltenyi"), and Bellicum Pharmaceuticals, Inc., a US corporation, having a registered office at 2130 West Holcombe Boulevard, Suite 800, Houston, TX 77030 (on behalf of itself and its Affiliates, individually and collectively referred to as "Bellicum"). Miltenyi and Bellicum are sometimes referred to herein individually as a "Party" and collectively as the "Parties." + +RECITALS + +WHEREAS, Miltenyi is a biotechnology company having technology and expertise relating to, inter alia, monoclonal antibodies, cell separation, and cell and gene therapy, and Miltenyi has developed and owns and controls various platform technologies for use in research and clinical applications and pharmaceutical development and manufacturing, including (i) systems, devices, reagents, disposables and related procedures and protocols for cell processing (including cell enrichment, purification, activation, modification and expansion) and cell analysis, (ii) bioassay reagents, assays, probes and related materials, and (iii) clinical cell or sample processing systems; + +WHEREAS, Bellicum is a clinical stage biopharmaceutical company focused on discovering and developing cellular immunotherapies for hematological cancers and solid tumors, as well as orphan inherited blood diseases; + +WHEREAS, Bellicum desires to use certain Miltenyi Products (as defined below) solely for the Permitted Use (as defined below) in connection with the development and manufacture of certain Bellicum Products (as defined below) by Bellicum and/or its Subcontractors or Licensees (as defined below) for use in preclinical and clinical development programs and, if approved, for commercial use; and + +WHEREAS, Miltenyi desires to sell to Bellicum, and Bellicum desires to purchase from Miltenyi, the Miltenyi Products in accordance with the terms and conditions set forth in this Agreement. + +NOW, THEREFORE, in consideration of the foregoing and the mutual covenants contained herein, the Parties agree as follows: + +Article 1 DEFINITIONS AND INTERPRETATION + +1.1 Definitions. For the purposes of this Agreement, unless the context requires otherwise, the following terms shall have the meanings set forth below: + +"Additional Countries" shall have the meaning set forth in Section 2.3 of this Agreement. + +"Affiliate" means, with respect to a Party, any corporation, association, or other entity which, directly or indirectly, controls the Party or is controlled by the Party or is under common control with such Party, where "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the affairs or management of a corporation, association, or other entity through the ownership of fifty percent + + + + + +Miltenyi Biotec-Bellicum Supply Agreement (Execution Copy, March 27, 2019) + +or more of the voting securities or otherwise, including having the power to elect a majority of the board of directors or other governing body of such corporation, association, or other entity. + +"Agreed Standards" means all standards, specifications, guidelines and regulations as to quality, safety and performance as are consistently applied by Miltenyi from time to time with respect to the manufacture and quality control of the relevant Miltenyi Product in accordance with Miltenyi's established quality system, standard operating procedures, and quality control procedures, and includes (i) any standard(s) as may be specifically determined to be applicable to the manufacture and quality control of the relevant Miltenyi Product (if any) (for example, with regard to the manufacturing of cell processing reagents or processing aids) by agreement between Miltenyi and any relevant Regulatory Authority/ies and as set forth in Miltenyi's relevant Master Files and/or the Quality Agreement and (ii) any standard(s) as may be expressly agreed between the Parties with respect to a relevant Miltenyi Product from time to time in writing in this Agreement or in an amendment to this Agreement. + +"Agreement" means this Supply Agreement, including Exhibits A, B, C, D, E, F and G attached hereto and incorporated herein, as amended from time to time in accordance with Section 20.3 hereof. + +"Applicable Laws" means all supranational, national, state and local laws, rules and regulations and guidelines governing the activities of a Party described in this Agreement within the Territory that are applicable to the manufacture, use, storage, import, export and handling of the Miltenyi Products, including any applicable rules, regulations, guidelines, and other requirements of any Regulatory Authority that may be in effect in the Territory from time to time. + +"Bellicum Product" means one or more cell-based therapeutic product(s) that are manufactured using one or more Miltenyi Products and that are researched, developed and/or commercialized by or on behalf of Bellicum in the Field, as such products are identified in Modules set forth in Exhibit A to this Agreement, including related development candidate(s) and investigational cell-based therapeutics used under the sponsorship of Bellicum and as further specified in the applicable Module, as such Module may be amended from time to time by written notification of Bellicum to Miltenyi to add or remove product(s) in the Field. + +"Bellicum Program" means a specific Bellicum program for preclinical, clinical development and/or commercialization relating to one or more Bellicum Products as such program is identified and described in a Module to this Agreement. + +"Business Day" means any day on which banking institutions in both San Francisco, US, and Bergisch Gladbach, Germany, are open for business. + +"Calendar Quarter" means each successive period of three consecutive calendar months commencing on January 1, April 1, July 1 and October 1. + +"Calendar Year" means each successive period of twelve (12) months (each, a "Calendar Month") commencing on January 1 and ending on December 31, except that the first Calendar Year shall be that period from and including the Effective Date through December 31 of that same year, and the last Calendar Year shall be that period from and including the last January 1 of the Term through the earlier of the date of expiration or termination of this Agreement. + +"Clinical Grade Product" means any Miltenyi Product designated as "Clinical Grade" in the attached Exhibit B, Column "Quality Status". + +"Commercial Phase" means, on a Bellicum Product-by-Bellicum Product basis, the period of time during the Term of this Agreement following the approval by the FDA or other applicable Regulatory Authorities in the Designated Countries for a particular Bellicum Product, during which period of time Bellicum desires Miltenyi to supply Bellicum, its Subcontractors and/or Licensees with Miltenyi Product(s). + +1 + + + + + +Miltenyi Biotec-Bellicum Supply Agreement (Execution Copy, March 27, 2019) + +"[...***...]" shall mean, with respect to the efforts and resources required to fulfill any obligation hereunder, the use of [...***...] of companies in the pharmaceutical industry or the biotech industry. + +"Communication" shall have the meaning set forth in Section 4.5. + +"Confidential Information" shall have the meaning set forth in Section 14. + +"Contract Year" means each successive period of twelve (12)-months during the Term ending on each anniversary of the Effective Date of this Agreement. + +"Delivery" and "Deliver" shall have the meaning set forth in Section 6.1(a). + +"Designated Countries" means those countries listed under section "Designated Countries" on the Bellicum Product specific Module. + +"Discounts" shall have the meaning set forth in Section 8.4. + +"Ex Vivo Cell Processing" means the selection, modification, alteration, activation and/or expansion of cells outside the human body. + +"Facility" means (i) any production site owned or leased by Miltenyi or its Affiliate or by a Subcontractor of Miltenyi that is used for the manufacture of the Miltenyi Products, and (ii) any warehouse or distribution facility of Miltenyi or its Affiliate or a Subcontractor of Miltenyi that holds or ships Miltenyi Products, as the case may be. + +"Field" means genetically modified, cell-based therapeutics for the treatment of human diseases, including but not limited to treatment of solid tumors and hematological cancers. + +"Firm Zone" shall have the meaning provided in Section 5.1(a). + +"Forecast" shall have the meaning provided in Article 5 of this Agreement. + +"Forecast Territory" means those countries where a particular Bellicum Product is manufactured, and for such manufacturing where relevant Miltenyi Products are shipped, as listed under section "Forecast Territory" on the Bellicum Product specific Module. + +"Global Contract Number" means the reference number shown on the first page of this Agreement. + +"Initial Term" means the period set forth in Section 15.1. + +"Intellectual Property Rights" means any and all past, present, and future rights which exist, or which may exist or be created in the future, under the laws of any jurisdiction in the world with respect to all: (i) rights associated with works of authorship, including exclusive exploitation rights, copyrights, moral rights, and mask works; (ii) trademarks and trade name rights and similar rights; (iii) trade secret rights; (iv) inventions, patents, patent applications, and industrial property rights; (v) other proprietary rights in intellectual property of every kind and nature; and (vi) rights in or relating to registrations, renewals, re-examinations, extensions, combinations, continuations, divisions, and reissues of, and applications for, any of the rights referred to in sub-clauses (i) through (v) above. + +2 + + + + + +Miltenyi Biotec-Bellicum Supply Agreement (Execution Copy, March 27, 2019) + +"Lead Time" means the minimum amount of time, as specified for each Miltenyi Product in Exhibit B hereto, between the date an applicable Purchase Order (as defined below) for Miltenyi Product is received by Miltenyi and the requested date of Delivery. + +"Licensee" means any Bellicum associated Third Party that has rights by way of license, sublicense, collaboration or otherwise to research, have researched, develop, have developed, make, have made, use, have used, sell, offer for sale, import, have imported, export, have exported, or otherwise commercialize any Bellicum Product, as described in the Bellicum Product specific Module attached hereto as such Bellicum Product specific Module may be amended from time to time by written notification of Bellicum to Miltenyi to add or remove a Licensee. + +"Master File" means any Type II Master File, Medical Device Master File, or regulatory support file or other equivalent document, filed by or on behalf of Miltenyi, as of the Effective Date or during the Term, with the FDA, EMA and/or any other applicable Regulatory Authority that accepts such Master Files for any Miltenyi Products and/or any component thereof and/or any products used in connection therewith, as applicable, and in each case any amendment thereto. + +"Material Change" means any change to Agreed Standards, Product Specifications, critical raw materials, sources of critical raw materials and/or primary packaging of a Miltenyi Product that, to the extent reasonably foreseeable, could have potential adverse impact on the safety, quality, and/or performance or could otherwise materially alter the properties of a Miltenyi Product. + +"Miltenyi Competitor" means the commercial entities and their respective Affiliates as set forth in Exhibit G attached hereto as such Exhibit G may be amended from time to time by written notification of Miltenyi to Bellicum of any proposal to add or remove a Miltenyi Competitior, which addition or removal shall be mutually agreed by the Parties after good faith discussion of such proposal. + +"Miltenyi Products" means the products listed from time to time on Exhibit B attached hereto, and "Miltenyi Product" means any one of them. As used herein, Miltenyi Products include "Clinical Grade Products" and "Research Grade Products". + +"Miltenyi Product Warranty" shall have the meaning provided in Section 11.1. + +"Miltenyi Technology" means all Technology and Intellectual Property Rights currently in the possession of or controlled by Miltenyi, or conceived, developed or reduced to practice before or after the Effective Date by Miltenyi, relating to the research and development, manufacturing, registration for marketing, handling, use, or sale of a Miltenyi Product (e.g., instruments, columns, antibodies, antibody reagents, tubing sets, and buffers). The term "Miltenyi Technology" includes the CliniMACS® System, CliniMACS® Prodigy System, the MACS® Technology, and any other proprietary materials and methods useful for the selection, activation, purification, cultivation, or other kinds of processing, of cells or biological materials, or products utilizing any of the foregoing. + +"Module" means a written description, mutually agreed upon by the Parties, of one or more Bellicum Products or one or more Bellicum Program(s) under which Miltenyi agrees to supply Miltenyi Products to Bellicum under this Agreement, as specifically applicable for such Bellicum Product(s) or such Bellicum Program(s). Each Module shall be agreed upon between the Parties on a Bellicum Product-by- Bellicum Product or Bellicum Program- by Bellicum-Program basis, as set forth in Section 1.4 and any amendment thereto. + +"Permitted Use" shall have the meaning provided in Section 2.2 hereof. + +3 + + + + + +Miltenyi Biotec-Bellicum Supply Agreement (Execution Copy, March 27, 2019) + +"Product Specifications" means the particulars as to composition, quality, safety, integrity, purity and other characteristics for a Miltenyi Product as published by Miltenyi from time to time, or as set forth in the applicable Quality Agreement entered into by the Parties in accordance with Section 3.2. + +"Purchase Order" shall have the meaning set forth in Section 5.7. + +"Product Price" shall have the meaning set forth in Section 8.4. + +"Quality Agreement" means one or more written agreements between the Parties, incorporating all relevant quality assurance and quality control obligations and aspects for the Parties with respect to the supply of Clinical Grade Products to Bellicum by Miltenyi under this Agreement. + +"Regulatory Authority" means any federal, national, multinational, state, provincial or local regulatory agency, department, bureau or other governmental entity having the primary responsibility, jurisdiction, and authority to approve the manufacture, use, importation, packaging, labelling and/or marketing of pharmaceutical products or devices, including the United States Food and Drug Administration ("FDA") and the European Medicines Agency ("EMA"), and any equivalent or successor agency thereto. + +"Regulatory Work" shall have the meaning set forth in Section 4.3. + +"Rejected Products" shall have the meaning set forth in Section 7.2. + +"Renewal Term" shall have the meaning set forth in Section 15.1. + +"Required Change" shall have the meaning set forth in Section 3.2(c). + +"Research Grade Product" means any Miltenyi Product designated as "Research Grade" in the attached Exhibit B, Column "Quality Status". + +"Subcontractor" means a Third Party to which, as applicable: (i) Miltenyi subcontracts the manufacture and/or supply of Miltenyi Products on behalf of Miltenyi and under Miltenyi's authority and responsibility in accordance with Section 2.5 and as further set forth in the Quality Agreement, if applicable; or (ii) Bellicum or its Licensees subcontracts the manufacture and/or supply of Bellicum Products on behalf of Bellicum or its Licensees and under Bellicum's or its Licensees' authority and responsibility in accordance with this Agreement and as described in the Bellicum Product specific Module attached hereto, as such Bellicum Product specific Module may be amended from time to time by written notification of Bellicum to Miltenyi to add or remove Subcontractor. + +"Technology" means all inventions, discoveries, improvements and proprietary methods and materials of a Party, whether or not patentable, including samples of, methods of production or use of, and structural and functional information pertaining to, chemical compounds, proteins, cells or other biological substances; other data; formulations; specifications; protocols; techniques; processes and procedures; and know‑how; including any negative results; and other information of value to such Party that it maintains in secrecy, and in existence on or after the Effective Date. + +"Term" means the Initial Term and any Renewal Term thereof. + +"Territory" means worldwide. + +"Third Party" means any corporation, association, or other entity that is not a Party or an Affiliate of a Party. + +1.2 Certain Rules for Interpretation. + +4 + + + + + +Miltenyi Biotec-Bellicum Supply Agreement (Execution Copy, March 27, 2019) + +(a) The descriptive headings of Articles and Sections of the Agreement are inserted solely for convenience and ease of reference and shall not constitute any part of this Agreement, or have any effect on its interpretation or construction. + +(b) All references in this Agreement to the singular shall include the plural where applicable, and vice versa, as the context may require. + +(c) As used in this Agreement, (i) the word "including" is not intended to be exclusive and means "including without limitation"; (ii) neutral pronouns and any derivations thereof shall be deemed to include the feminine and masculine,; (iii) the words "hereof" and "hereunder" and other words of similar import refer to this Agreement as a whole, including all exhibits and appendices, as the same may be amended from time to time, and not to any subdivision of this Agreement; (iv) the word "days" means "calendar days," unless otherwise stated; (v) the words "shall" and "will" are used interchangeably and have the same meaning; and (vi) the word "Section" refers to sections and subsections in this Agreement. + +(d) Whenever any payment to be made or action to be taken under the Agreement is required to be made or taken on a day other than a Business Day, such payment shall be made or action shall be taken on the next Business Day following such day. + +1.3 Scope of Agreement. As a master form of contract, this Agreement allows the Parties to agree upon and contract for the supply of Miltenyi Products pursuant to one or more Modules as described in Section 1.4, without having to re-negotiate the basic terms and conditions contained herein that are generally applicable to Miltenyi Product supply. Each such Module will set forth Module-related terms, conditions, rights and obligations regarding the Bellicum Product(s) or Bellicum Program(s) described in such Module, such as the binding or non-binding nature of Bellicum's purchase commitment and Miltenyi's supply commitment, pursuant to such Module, Forecast Territory and Designated Countries. Nothing in this Agreement shall be construed as creating any relationship between Miltenyi and Bellicum other than that of seller and buyer, or licensor and licensee, respectively. This Agreement is not intended to be, nor shall it be construed as, a joint venture, association, partnership, franchise, or other form of business organization or agency relationship. Neither Party shall have any right, power, or authority to assume, create, or incur any expense, liability, or obligation, express or implied, on behalf of the other Party, except as expressly provided herein. + +1.4 Modules. The specific terms and conditions relating to Miltenyi's supply of Miltenyi Products in support of a Bellicum Product or Bellicum Program under this Argeement shall be separately described in reasonable detail in a Module, where the form of such description will be substantially similar to the form attached hereto as Exhibit A. Each Module shall be effective upon signature by both Parties, and upon signature, such executed Module shall be attached to this Agreement. Modules shall be sequentially numbered, shall specifically refer to this Agreement, and shall incorporate the terms and conditions hereof by reference. There shall be no minimum or maximum number of Modules to be executed under this Agreement. Each Module shall be subject to all of the terms and conditions of this Agreement in addition to the specific details set forth in the Module. Each Module exists independently of other Modules. Notwithstanding the foregoing, to the extent any terms or conditions expressly set forth in a Module conflict with the terms and conditions of this Agreement, the terms and conditions of this Agreement shall control, unless the Module expressly states the intent of the Parties that a particular provision of such Module will supersede this Agreement with respect to a particular matter in that Module only. + +ARTICLE 2 SUPPLY OF PRODUCT; ALLIANCE MANAGERS; JOINT STEERING COMMITTEE + +2.1 Supply of Product. During the Term of this Agreement, and subject to the terms and conditions hereof, Miltenyi will non-exclusively supply and sell to Bellicum or its Licensees or Subcontractors, and Bellicum or its Licensees or Subcontractors will purchase from Miltenyi, Miltenyi Products listed on Exhibit B solely for the Permitted Use (as defined below). Each Purchase Order placed + +5 + + + + + +Miltenyi Biotec-Bellicum Supply Agreement (Execution Copy, March 27, 2019) + +under this Agreement shall be exclusively governed by the terms and conditions of this Agreement and the Quality Agreement, as amended from time to time, unless specifically otherwise agreed between the Parties in writing. Any terms and conditions of any Purchase Order or acknowledgement given or received which are additional to or inconsistent with this Agreement or the Quality Agreement shall have no effect and such terms and conditions are hereby excluded and rejected. + +2.2 Permitted Use; Restrictions on Use. + +(a) The supply of the Miltenyi Products hereunder conveys to Bellicum the limited, non-exclusive, non-transferable (except as expressly provided herein, including as set forth in Article 17) right to use, and to permit its Subcontractors and Licensees to use the Miltenyi Products solely for Ex Vivo Cell Processing in the manufacture of Bellicum Products for use in the Field in the Territory (including for research, pre-clinical, clinical, regulatory and commercial purposes), in accordance with applicable Regulatory Authority requirements and approvals (including (to the extent applicable) any relevant clinical trial protocol, IND, and/or IRB approval pertaining to such Bellicum Products), in each case consistent with the terms and conditions of this Agreement and in accordance with Applicable Laws (the "Permitted Use"). Bellicum's Permitted Use of the Miltenyi Products shall be limited to the Designated Countries, subject to Section 2.3. + +(b) Bellicum shall not use, and shall cause its Subcontractors and Licensees not to use the Miltenyi Products and/or any component thereof for any purpose or in any manner whatsoever other than a Permitted Use expressly set forth in Section 2.2(a) above. Without limitation to the generality of the foregoing, any and all Miltenyi Products supplied hereunder (or any components thereof) shall not be used directly (i) for in vivo administration in humans; or (ii) as an ingredient of a Bellicum Product. + +(c) Including for purposes of Section 8.2, Bellicum shall promptly notify Miltenyi in writing of any additional Bellicum Product from time to time manufactured by or on behalf of Bellicum (or any of its Licensees, if any) by using one or more Miltenyi Products, which Bellicum Product shall be added to Exhibit A by amendment; subsequently, the Parties shall agree upon the Bellicum Product specific Module within sixty (60) days. + +(d) Except as expressly provided in this Agreement, no other right, express or implied, is conveyed by the sale or purchase of the Miltenyi Products (including the right to make or have made Miltenyi Products). Except as expressly provided in this Agreement, Bellicum specifically agrees not to, and agrees not to cause any Third Party to, sell, market, export, transfer, or re-export Miltenyi Products without Miltenyi's express prior written consent. + +(e) Bellicum may offer and permit its Licensees and Subcontractors (if any) to use the Miltenyi Products supplied hereunder only if and so long as such use is in compliance with the terms and conditions of this Agreement and Applicable Laws. Bellicum shall instruct and oblige its Licensees and Subcontractors accordingly. + +(f) Bellicum acknowledges that the Miltenyi Products should be used with the same caution applied to any potentially hazardous compound. Use of the Miltenyi Products by Bellicum, its Licensees or Subcontractors shall be supervised by a technically qualified individual. + +(g) Without limitation to the generality of clauses (a) through (e) above, Bellicum further will not, and will cause its Licensees and Subcontractors not to, without express prior written consent from Miltenyi: + +(1) Modify or alter, or cause any Third Party to modify or alter, any Miltenyi Product supplied hereunder other than in connection with its Permitted Use; + +6 + + + + + +Miltenyi Biotec-Bellicum Supply Agreement (Execution Copy, March 27, 2019) + +(2) Reverse engineer, disassemble or otherwise analyze, or cause any Third Party to reverse engineer, disassemble or otherwise analyze, any Miltenyi Product supplied hereunder, in whole or in part; provided, however, that the foregoing shall not limit the right or ability of Bellicum or its Licensees or Subcontractors to identify defects, troubleshoot problems, evaluate, test, use or conduct any study utilizing any Miltenyi Product(s) as reasonably necessary to achieve the purposes of this Agreement; + +(3) Transfer any Miltenyi Product supplied hereunder to any Third Party, except to Bellicum Subcontractors or Licensees solely for the Permitted Use or for training or validation purposes in connection with Bellicum's development and commercialization of Bellicum Product; + +(4) Resell Miltenyi Product supplied hereunder to any Third Party, including Bellicum Subcontractors and Licensees, without prior express written permission from Miltenyi; or + +(5) Transfer, use, import or export any Miltenyi Product supplied to Bellicum hereunder in any country or territory other than the Designated Countries. + +2.3 Additional Countries. Miltenyi acknowledges that Bellicum and/or its Licensees may from time to time desire to use Miltenyi Products in one or more countries that are currently not part of the Designated Countries (each, an "Additional Country"). The Parties agree, upon reasonable written request by Bellicum from time to time during the term of this Agreement, to evaluate the regulatory requirements for utilizing of Miltenyi Products for manufacture of Bellicum Products in the requested Additional Country(ies). Based on the assessment of potentially required additional work ("Additional Work"), including but not limited to regulatory work pursuant to Section 4.9 as may be required to prepare and file Master Files for Miltenyi Products in support of Bellicum Product filings in such Additional Country(ies), the Parties will negotiate in good faith with the goal of entering into an agreement on mutually acceptable terms with respect to Miltenyi's provision of such Additional Work. Bellicum shall inform Miltenyi in writing at least twelve (12) months in advance prior to any intended regulatory filing in an Additional Country. + +2.4 Reserved Rights. Notwithstanding anything to the contrary in this Agreement, nothing herein is intended nor shall be construed as creating any exclusive arrangement between Miltenyi and Bellicum with respect to the supply, purchase and/or use of the Miltenyi Products. Miltenyi reserves the right, at its sole discretion and without any restriction or limitation whatsoever, to manufacture, have manufactured, use, have used, sell, have sold, offer for sale, export, import or otherwise commercialize or dispose of Miltenyi Products in any manner and for any purpose whatsoever. + +2.5 Subcontracting by Miltenyi. Subject to the terms of the Quality Agreement, if applicable, Miltenyi may, at its sole discretion, upon reasonable prior written notice to Bellicum, elect to have the Miltenyi Products, or any one of them or any component thereof, manufactured by an Affiliate of Miltenyi, and further may subcontract the manufacturing of Miltenyi Product or any component thereof, to a Subcontractor; provided that (i) Miltenyi shall reasonably take into account Bellicum's written concerns regarding proposed Affiliate(s) or Subcontractor(s); and (ii) Miltenyi shall be solely and fully responsible for the performance of all delegated and subcontracted activities by its Affiliates and Subcontractor(s), including compliance with the terms of this Agreement and the Quality Agreement (as applicable), and in no event shall any such delegation or subcontract release Miltenyi from any of its obligations under this Agreement. Miltenyi's Subcontractors and Affiliates for the manufacture and/or supply of Miltenyi Products will be listed in the Quality Agreement + +2.6 Compliance. + +(a) Miltenyi shall have sole responsibility for ensuring, and shall ensure, that Miltenyi's and its Affiliates' and Subcontractors' activities and performance in connection with the manufacture of Miltenyi Products and the supply of such Miltenyi Products to Bellicum under this Agreement are at all times in compliance with Applicable Laws. Without limiting the generality of the foregoing, it shall + +7 + + + + + +Miltenyi Biotec-Bellicum Supply Agreement (Execution Copy, March 27, 2019) + +be the sole responsibility of Miltenyi to obtain and maintain, and Miltenyi shall obtain and maintain, all licenses, permits, authorizations, or registrations required by Applicable Laws in order for Miltenyi, its Affiliates, and/or Subcontractors (as the case may be) to manufacture and make Delivery of Miltenyi Products, except as otherwise provided in this Agreement, at Miltenyi's expense. + +(b) Bellicum shall have sole responsibility for ensuring, and shall ensure, that the use of the Miltenyi Products for their respective Permitted Use by Bellicum, its Subcontractors and Licensees (as the case may be) is at all times in compliance with Applicable Laws. Without limiting the generality of the foregoing, it shall be the sole responsibility of Bellicum to obtain and maintain, and Bellicum shall obtain and maintain, all licenses, permits, authorizations, registrations, additional validations or additional testing required by Applicable Laws in order for Bellicum, its Subcontractors and Licensees to use the Miltenyi Products for the Permitted Use, at Bellicum's expense. Miltenyi shall comply with all reasonable requests for assistance by Bellicum in connection with Bellicum's efforts to obtain such licenses, permits, authorizations, registrations, additional validations or additional testing, to the extent applicable to the Miltenyi Products; provided that the Parties shall agree on the scope of such assistance to be provided by Miltenyi and upon the reasonable costs to be paid by Bellicum to Miltenyi for such assistance. + +(c) In the event that Bellicum receives notice from a Regulatory Authority raising any issues concerning the safety or quality of any Miltenyi Product, Bellicum shall promptly notify Miltenyi of the same in writing. Upon receipt of such notification, and subject to Miltenyi's obligations set forth in the Quality Agreement, if applicable, in this regard, Miltenyi shall make [...***...] to cure such safety or quality issue(s) as they relate to the Miltenyi Products as promptly as possible, and unless such issues solely relate to Bellicum's Permitted Use of the relevant Miltenyi Product(s) in connection with the manufacture or use of a Bellicum Product, such efforts shall be at Miltenyi's sole expense. + +(d) As of the Effective Date and to and through the expiration or termination of this Agreement, each Party represents, warrants and covenants to the other Party that: (1) such Party, and, to its actual knowledge, its owners, directors, officers, employees, and any agent, representative, Subcontractor or other Third Party acting for or on such its behalf, shall not, directly or indirectly, offer, pay, promise to pay, or authorize such offer, promise or payment, of anything of value, to any person for the purposes of obtaining or retaining business through any improper advantage in connection with this Agreement, or that would otherwise violate any Applicable Laws, rules and regulations concerning or relating to public or commercial bribery or corruption; and (2) its financial books, accounts, records and invoices related to this Agreement or related to any work conducted for or on behalf of the other Party are and will be complete and accurate in all material respects. Each Party may request in writing from time to time that the other Party complete a compliance certification regarding the foregoing in this Section 2.6. + +2.7 Violations. Nothing herein contained shall oblige Miltenyi to continue supplying, or Bellicum to continue ordering or purchasing, any Miltenyi Product if such supply or purchase is reasonably believed by Miltenyi or Bellicum, as the case may be, based on objective grounds, to violate Applicable Laws or such Party's licenses, or if the Miltenyi Products supplied to Bellicum infringe, or are alleged to infringe, a Third Party's Intellectual Property Rights. + +2.8 Transfer of Miltenyi Products. Bellicum shall have the right to transfer Miltenyi Product(s) purchased hereunder, or to request from Miltenyi, by notice in writing, that Miltenyi Deliver any Miltenyi Product(s) purchased hereunder to an Affiliate of Bellicum or a Subcontractor or Licensee of Bellicum Product designated by Bellicum, solely for the purpose of the Permitted Use, subject to the payment to Miltenyi of all additional expenses (if any) incurred by Miltenyi in connection with such provision and transfer of Miltenyi Product(s) to Bellicum's designee; and provided that in each case: (i) each Subcontractor or Licensee of Bellicum to whom Miltenyi Products are transferred shall be bound in writing by limitations and obligations that are consistent with the corresponding limitations and obligations imposed on Bellicum + +8 + + + + + +Miltenyi Biotec-Bellicum Supply Agreement (Execution Copy, March 27, 2019) + +hereunder and under the Quality Agreement, as applicable; and (ii) notwithstanding the transfer of any Miltenyi Product purchased hereunder, Bellicum will nevertheless continue to remain fully and primarily responsible and liable to Miltenyi for payment of the Product Price and for the use of the Miltenyi Product by any Subcontractor and Licensee to whom a Miltenyi Product is transferred. + +2.9 Bellicum Licensees. + +(a) If and to the extent that Bellicum grants rights with respect to a Bellicum Product under license or other agreement(s) with one or more Licensees of Bellicum, in no event shall Bellicum grant any rights under Miltenyi Intellectual Property Rights other than as expressly permitted hereunder and as are necessary to use Miltenyi Product for the purpose of the Permitted Use, or any rights that are otherwise inconsistent with the terms of this Agreement or the Quality Agreement. + +(b) To the extent that the rights granted to Bellicum hereunder (including Bellicum's right to use each Miltenyi Product for its Permitted Use) are shared with one or more of its Subcontractors or Licensees in accordance with the terms hereof, Bellicum shall first impose limitations and obligations on such Subcontractors or Licensees, in writing, that are consistent with the corresponding limitations and obligations imposed on Bellicum hereunder, and Bellicum shall notify Miltenyi of the name and contact information for each such Subcontractor or Licensee that it shares such rights with, in writing, in accordance with Article 16 of this Agreement. + +(c) Bellicum shall promptly notify Miltenyi in writing of any additional Licensee contemplating the use of Miltenyi Product(s) for the manufacture of a Bellicum Product from time to time, which Licensee shall be added to the Bellicum Product specific Module by amendment. + +(d) At the reasonable written request of Bellicum during the Term, Miltenyi shall enter into a direct supply agreement for Miltenyi Products with any Licensee nominated by Bellicum, materially consistent with the terms and conditions of this Agreement and the Quality Agreement (as applicable), except as agreed otherwise in writing between Miltenyi and the respective Bellicum Licensee. + +2.10 Liability for Non-Compliance. Notwithstanding anything to the contrary herein, Bellicum shall, in relation to Miltenyi, at all times and in all respects continue to remain fully and primarily responsible and liable to Miltenyi for the performance and the acts or omissions of its Affiliate, Subcontractor, and Licensee in connection with the subject matter of this Agreement, including the failure of an Affiliate, Subcontractor, or Licensee of Bellicum to comply with all of the limitations and obligations imposed on Bellicum hereunder. Notwithstanding anything to the contrary herein, Miltenyi shall, in relation to Bellicum, at all times and in all respects continue to remain fully and primarily responsible and liable to Bellicum for the performance and the acts or omissions of its Affiliates and Subcontractors in connection with the subject matter of this Agreement, including the failure of an Affiliate or Subcontractor of Miltenyi to comply with all of the limitations and obligations imposed on Miltenyi hereunder. For clarity, in no event shall any permitted delegation or subcontracting of any activities to be performed in connection with this Agreement release a Party from any of its limitations or obligations under this Agreement. + +2.11 Governance. + +(a) Alliance Managers. Each Party shall appoint an appropriately qualified individual to serve as an alliance manager under this Agreement (the "Alliance Manager"). Such persons shall endeavor to assure clear and responsive communication between the Parties and the effective exchange of information, and may serve as the primary point of contact for any matters arising under this Agreement. The Alliance Managers may attend meetings of the JSC, assist in resolving Disputes at the initial level of the Parties' good faith discussions, and may raise issues for discussion by the JSC. + +9 + + + + + +Miltenyi Biotec-Bellicum Supply Agreement (Execution Copy, March 27, 2019) + +(b) Joint Steering Committee. The Parties hereby establish a joint steering committee (the "JSC") that will monitor and provide strategic oversight of the activities under this Agreement, and facilitate communications between the Parties with respect to the supply of Miltenyi Products and Bellicum's development and commercialization of Bellicum Products. Each Party shall initially appoint up to three (3) representatives (or their designees) to the JSC, excluding the Alliance Manager of each Party who will attend JSC meetings in a non- voting capacity. Each such JSC representative of a Party will have sufficient seniority within such Party to make decisions arising within the scope of the JSC's responsibilities. The Parties' initial representatives to the JSC will be provided to each other Party within thirty (30) days after the Effective Date. The JSC may change its size from time to time by mutual consent of its members. Each Party may replace its JSC representatives at any time upon written notice to the other Party; provided, however, that neither Party may replace a representative on the JSC with an individual with lower seniority without the approval of the other Party, which approval shall not be unreasonably withheld. The JSC shall meet at least two times each Calendar Year, and at least one such JSC meeting shall be in person/ face-to-face with alternating locations (for in person/ face-to-face meetings only), unless otherwise agreed in writing by both Parties. Each Party may invite up to three (3) of its own employees, and the JSC may invite other non-members, to participate in the discussions and meetings of the JSC, provided that such participants shall have no voting authority at the JSC. The JSC shall have two (2) co- chairpersons, one from each Party. The role of the co-chairpersons shall be to convene and preside at meetings of the JSC. The Alliance Managers shall work with the co-chairpersons to prepare and circulate agendas and to ensure the preparation of minutes. The co- chairpersons shall have no additional powers or rights beyond those held by the other JSC representatives. + +(c) Specific Responsibilities of the JSC. In addition to its overall responsibility for monitoring and providing strategic oversight with respect to the Parties' activities under this Agreement, the JSC shall in particular: (i) oversee the collaborative efforts of the Parties under this Agreement; (ii) review and discuss the research, development and commercialization of Miltenyi Products and Bellicum Products, including regulatory matters related thereto; (iii) attempt to resolve Disputes presented by the Alliance Managers; and (iv) perform such other functions as appropriate to further the purposes of this Agreement, in each case, as agreed in writing by the Parties. The JSC has no authority to modify this Agreement, the Quality Agreement or any Module. + +ARTICLE 3 PRODUCT QUALITY; CHANGE CONTROL + +3.1 Product Quality. + +(a) Product Specifications. Miltenyi shall manufacture or have manufactured the Miltenyi Products to meet the agreed Product Specifications, as then in effect, as published by Miltenyi from time to time, or as set forth in the Quality Agreement, as applicable. + +(b) Agreed Standards. All Miltenyi Products shall be manufactured and quality controlled in compliance with and pursuant to: (i) the Agreed Standards, (ii) the requirements of the Quality Agreement, if applicable, and (iii) Applicable Laws. + +(c) Testing. Miltenyi shall have standard analytical testing performed on each batch of Miltenyi Product to be shipped to Bellicum, in accordance with Agreed Standards and the procedures described in the corresponding documentation, to verify that Miltenyi Product meets Product Specifications and that it was manufactured in accordance with Agreed Standards and Applicable Laws. + +(d) Quality System. All Miltenyi Products supplied under this Agreement shall be manufactured and quality controlled under an appropriate quality system in accordance with Agreed Standards, as more fully described in the Quality Agreement (as applicable). Any subsequent change to Miltenyi's quality system that, as Bellicum can reasonably establish, would have or is likely to have a material effect on the safety, efficacy, identity and/or quality of a Miltenyi Product or its Permitted Use, requires the Parties to discuss and agree upon each such change in writing. + +10 + + + + + +Miltenyi Biotec-Bellicum Supply Agreement (Execution Copy, March 27, 2019) + +(e) Quality Agreement. Within [...***...] days from the Effective Date (or such longer period as agreed by the Parties in writing, but in any event prior to the first delivery of Clinical Grade Product to Bellicum), the Parties shall enter into an agreement on mutually acceptable, commercially reasonable terms that details the quality assurance obligations of each Party relating to Clinical Grade Products (the "Quality Agreement"). In the event of a conflict between the terms of the Quality Agreement and the terms of this Agreement, the provisions of this Agreement shall govern; provided, however, that the Quality Agreement shall govern in respect of quality issues. + +3.2 Change Control. + +(a) General. Subject to the terms and limitations set forth in this Section 3.2 and in the Quality Agreement, and unless otherwise agreed between the Parties in writing from time to time, Miltenyi reserves the right to periodically make changes to the Product Specifications, Agreed Standards and/or otherwise with respect to the properties, manufacture and/or testing of the Miltenyi Products (including changes with respect to: suppliers of raw materials; quality in raw materials; methods of manufacturing; packaging; equipment and/or premises; Subcontractors; product control techniques and methods of analysis; product release specifications; and/or presentation and content of relevant documentation, including certificates pursuant to Section 6.5) from time to time during the Term (each, a "Change"). + +(b) Change Notification. Change notifications shall be provided in accordance with the applicable notification procedures set forth in the Quality Agreement or in this Agreement. In the event that Miltenyi proposes a Material Change, unless such proposed Change is a Required Change pursuant to Section 3.2(c) below and there are compelling reasons for earlier implementation of such Required Change, Miltenyi shall give Bellicum at least [...***...] months' advance written notice prior to implementation of the proposed Material Change (a "Change Notification"). Miltenyi shall be responsible for drafting relevant documentation and shall provide to Bellicum all information reasonably necessary for Bellicum to make appropriate filings with the applicable Regulatory Authority regarding any Change under this subsection, if applicable. + +(c) Changes Required for Compliance. If during the Term a Change is required to comply with changes in Agreed Standards made by Regulatory Authorities, Applicable Laws and/or other requirements of a Regulatory Authority, or if Miltenyi determines, in its reasonable judgment, that a Change is required to address safety and/or quality issues in regard to the Miltenyi Product generally (in each case, a "Required Change"), Miltenyi shall use [...***...] to implement such Required Change at its cost. However, in the event that a Required Change is specifically related to the use of Miltenyi Product for a Permitted Use in relation to a Bellicum Product (a "Bellicum-Specific Required Change"), then Miltenyi shall use [...***...] to implement such Bellicum-Specific Required Change only if and to the extent Bellicum agrees to reimburse Miltenyi for all documented costs and expenses reasonably incurred by Miltenyi as a result of any such Bellicum-Specific Required Change. Prior to implementing a Required Change in accordance with this Section 3.2(c), Miltenyi shall promptly advise Bellicum as to any scheduling and/or Product Price adjustments which may result from any such Required Change, if any. Miltenyi and Bellicum shall negotiate in good faith in an attempt to reach agreement on (i) the new Product Price, if any, for any Miltenyi Product which embodies such Required Change, giving due consideration to the effect of such change on Miltenyi's manufacturing costs for the changed Miltenyi Product as well as any other relevant factors, (ii) the responsibility for any costs and expenses associated with Miltenyi's activities required to implement such Change, and (iii) any other amendments to this Agreement which may be necessitated by such Change (e.g., an adjustment to the lead time for firm orders). For clarity, Miltenyi shall have no obligation to implement a Bellicum-Specific Required Change unless and until the Parties have reached agreement on all items as described in the preceding sentence. + +(d) Changes Requested by Bellicum. If during the Term Bellicum desires Miltenyi to make any Change not necessary to comply with changes in Agreed Standards made by Regulatory + +11 + + + + + +Miltenyi Biotec-Bellicum Supply Agreement (Execution Copy, March 27, 2019) + +Authorities, Applicable Laws and/or other requirements of Regulatory Authorities (in each case, a "Bellicum-Requested Change"), Bellicum shall notify Miltenyi thereof in writing. Implementation of any such proposed Bellicum-Requested Change shall be subject to Miltenyi's consent. Miltenyi may withhold its consent to an Bellicum-Requested Change if Miltenyi reasonably determines that such change (i) does not comply with Agreed Standards, Applicable Laws or the requirements of Miltenyi's applicable Regulatory Authority, or (ii) could have potential adverse impact on Miltenyi's manufacturing activities or the sale of the respective Miltenyi Product to other customers. In addition, a Bellicum-Requested Change shall only be implemented following a technical and cost review which shall be conducted as promptly as is reasonably possible and in good faith by Miltenyi, at Bellicum's cost, and shall be subject to Miltenyi and Bellicum reaching agreement as to the one-time costs and revisions to the Product Price necessitated by any such Bellicum-Requested Change. If Bellicum agrees to reimburse Miltenyi for all documented costs and expenses reasonably incurred by Miltenyi as a result of the proposed Bellicum- Requested Change and accepts a proposed Product Price adjustment that reflects a change in Miltenyi manufacturing costs resulting from such Bellicum-Requested Change, Miltenyi shall use [...***...] to implement the proposed Bellicum-Requested Change. For clarity, an agreed adjustment to the Product Price shall become effective only with respect to orders for Miltenyi Products that are manufactured in accordance with the Bellicum-Requested Change. + +(e) Changes Requested by Miltenyi. If during the Term Miltenyi wishes to make any Material Change not necessary to comply with changes in Agreed Standards made by Regulatory Authorities, Applicable Laws or other requirements of Regulatory Authorities (in each case, a "Miltenyi-Requested Change"), Miltenyi shall notify Bellicum in accordance with the Change Notification procedures set forth in Section 3.2(b) and the Quality Agreement before implementation of such Miltenyi-Requested Change (including at least 6 months advance written notice prior to implementation), and shall keep Bellicum advised of its efforts to effectuate such change. Miltenyi shall use its best efforts to provide to Bellicum with a commercially reaosnable number of samples of the "Changed Miltenyi Product" (meaning such Miltenyi Product that is produced under conditions of the Miltenyi-Requested Change) for evaluation by Bellicum as soon as such Changed Miltenyi Product becomes available during the post-noficiation period. Miltenyi shall be responsible for drafting relevant documentation and shall provide to Bellicum any information reasonably necessary for Bellicum to make appropriate filings with the applicable Regulatory Authority for Bellicum to obtain any required amendment or other modification of the Bellicum Product regulatory approvals regarding changes under this subsection, if applicable. Miltenyi shall implement such Miltenyi-Requested Change at its own cost and expense. If Bellicum does not agree that such Changed Miltenyi Product is acceptable from Bellicum's perspective, then any limitations on or obligations of Bellicum under Article 5 pertaining to forecast variances and Firm Zone ordering in relation to Miltenyi Products affected by such Miltenyi-Requested Change shall not apply, and therefore Bellicum has no obligation to purchase any such Changed Miltenyi Products. + +(f) Cooperation. In connection with any Change pursuant to this Section 3.2, the Parties shall cooperate, share information, and otherwise act in good faith to prepare the appropriate documentation as may be necessary to secure and maintain appropriate regulatory approvals or manufacturing permits for Miltenyi Product and Bellicum Product, respectively. + +(g) Continued Supply. Except in the event of a Required Change, or other circumstances requiring the prompt implementation of a proposed Material Change (as such circumstances and prompt implementation are notified to Bellicum in writing and if requested by Bellicum, discussed with Bellicum in good faith), Miltenyi shall continue to supply Miltenyi Product without the proposed Material Change for as long a period as is reasonably required for Bellicum, using [...***...], to make all appropriate filings and obtain any required amendment or modification of existing regulatory approvals for Bellicum Product (unless otherwise agreed, such period not to exceed six (6) months from the date of implementation of the Material Change as provided in Miltenyi's Change Notification pursuant to Section 3.2(b)), subject to the Parties reaching agreement, as to the one-time costs and revisions to the Product + +12 + + + + + +Miltenyi Biotec-Bellicum Supply Agreement (Execution Copy, March 27, 2019) + +Price necessitated by any such continued supply of unchanged Miltenyi Product during such period. Until such agreement is reached, any limitations on or obligations of Bellicum under Article 5 pertaining to forecast variances and Firm Zone ordering in relation to Miltenyi Products described in this subsection (g) shall not apply, and therefore Bellicum has no obligation to purchase any such Miltenyi Products produced after implementation of such Material Change. If the continued supply of unchanged Miltenyi Product under this subsection (g) is reasonably estimated by the Parties to exceed a period of six (6) months from the implementation date of the Material Change notified in a Change Notification pursuant to Section 3.2(b), then the Parties shall promptly meet to discuss in good faith how to remedy the situation. + +(h) Notwithstanding the provisions of subsections (e) and (g), in the event that Bellicum reasonably determines to reject a proposed Material Change (including a Miltenyi-Requested Change), Miltenyi will continue to supply the applicable Miltenyi Product without such change after expiry of the said 6-month period and during the Term of this Agreement, or until Bellicum has secured an alternate source of supply from a Third Party manufacturer; provided, however, that the Parties will discuss in good faith, reflecting the change in circumstances contemplated by this Section 3.2(h), and agree in writing upon commercially reasonable terms to be set forth in an amendment to this Agreement to reflect any demonstrable increased cost and effort (if any) resulting from the manufacture of unchanged Miltenyi Product solely for Bellicum, including (as an example) any applicable adjustments to Forecasts, Lead Times, production cycles, batch sizes, Delivery Dates, Product Prices, or other relevant issues. If the Parties cannot reach agreement regarding such amendment, any obligations of Bellicum in relation to a Forecast for the affected Miltentyi Product in months 7-12 of the applicable Monthly Forecast, and any limitations regarding forecast variances, as each of these are set forth in Article 5, will not apply to a Miltenyi Product produced after implementation of such Material Change (i.e., one that replaces such affected (unchanged) Miltenyi Product), and Miltenyi shall be relieved from any obligations to supply such affected (unchanged) Miltenyi Product under this Agreement after the period described in the first sentence of this subsection (h) ends. For clarity, in no event shall Miltenyi be required to manufacture, supply or sell an existing Miltenyi Product to which a Required Change must be applied. + +(i) Research Grade Products. The notification requirements of the second sentence of Section 3.2(b) of this Agreement with respect to Material Changes and the obligations of Section 3.2(g) with respect to Continued Supply shall not apply to Research Grade Products. + +(j) Costs. Bellicum shall have responsibility for any Regulatory Authority filing fees and other costs and expenses incurred by Bellicum in connection with any filing or required amendment or other modification of regulatory approvals or consents for Bellicum Product resulting from any Change pursuant this Section 3.2, if applicable. + +ARTICLE 4 REGULATORY + +4.1 Regulatory Responsibility. + +(a) Bellicum Product(s). Subject to responsibilities pertaining to Miltenyi Products that are solely reserved by Miltenyi under this Agreement, and subject to the provisions in this Article 4 (including Section 4.7), Bellicum will be solely responsible for all regulatory activities with respect to any Bellicum Product, including the manufacture and quality control thereof. + +(b) Miltenyi Product(s). Subject to responsibilities pertaining to Bellicum Product(s) that are solely reserved by Bellicum under this Agreement, and subject to the provisions in this Article 4 (including Section 4.7), Miltenyi will be solely responsible for all regulatory activities with respect to any Miltenyi Product, including the manufacture and quality control thereof. + +(c) Disclaimer. Bellicum hereby acknowledges and agrees that, except as specifically set out with respect to any Miltenyi Product in the Product Specifications or in the Quality Agreement, as + +13 + + + + + +Miltenyi Biotec-Bellicum Supply Agreement (Execution Copy, March 27, 2019) + +applicable, the Miltenyi Products have no approvals by Regulatory Authorities in the Territory for use in diagnostic or therapeutic procedures or other clinical applications, or for any other use requiring compliance with any law or regulation regulating clinical, diagnostic or therapeutic products or any similar product (hereinafter collectively referred to as "Regulatory Laws"). Bellicum further acknowledges and agrees that Miltenyi Products have not yet been fully tested or validated for safety or effectiveness in connection with Bellicum's Permitted Use. Save as set out in the Product Specifications or the applicable Quality Agreement, it shall be the sole responsibility of Bellicum to test and validate the Miltenyi Products for Bellicum's contemplated Permitted Use hereunder and to take all other actions necessary to establish compliance of Bellicum's Permitted Use thereof with all regulatory requirements, and to ensure that any Bellicum Product resulting from such Permitted Use meets all applicable safety, quality, or other regulatory requirements (including Regulatory Laws), in each case prior to the first use of such Miltenyi Product. + +(d) The Miltenyi Products supplied hereunder may not be used for any purpose that would require Regulatory Authority approvals or consents unless such proper Regulatory Authority approvals or consents have been obtained. Bellicum agrees that if it elects to use, or causes any Bellicum Subcontractor or Licensee to use, any Miltenyi Products for a purpose that would subject Miltenyi or such Miltenyi Products to the jurisdiction of any Regulatory Laws, Bellicum will be solely responsible for obtaining any required Regulatory Authority approvals or consents, and for otherwise ensuring that Bellicum's (or its Subcontractors' or Licensees') use of such Miltenyi Products for such purpose complies with such Regulatory Laws. Bellicum shall defend and indemnify Miltenyi and its Affiliates against any liability, damage, loss or expense resulting from or arising out of Bellicum's failure to obtain all necessary Regulatory Authority approvals or consents or to comply with any Regulatory Laws in relation to Bellicum's use of such Miltenyi Products for such purpose. + +4.2 Regulatory Authority Requirements. Miltenyi states that (i) Miltenyi is obliged by relevant Regulatory Authorities to keep a record of all of its customer's clinical trials that use Miltenyi Products (name and title of clinical trials, the official registration numbers, name and addresses of the involved principal investigators and clinical trial centers as well as the corresponding formal document granting approval of an IND (for example only, IND/CTA acknowledgement letter of the relevant Regulatory Authority(ies) involving the use of "IDE/CRR"- labelled Miltenyi Products)) (regardless of whether such clinical trials are sponsored by Miltenyi or by any Third Party); and (ii) Miltenyi is not permitted to provide "IDE/CRR"-labeled Miltenyi Products to customers in the United States for use in clinical trials if the IND or IDE is not approved by the respective regulatory authority or rejected. . Miltenyi shall act and shall have no liability to Bellicum for acting in accordance with the foregoing requirements. As used herein, "CTA" means a clinical trial application; "IDE" means an investigational device exemption; and "IDE/CRR" references a certain subset of Miltenyi Products labeled with the "IDE/CRR" designation. + +4.3 Regulatory Work. Miltenyi has established, or may from time to time establish, Master Files for one or more Miltenyi Products with one or more Regulatory Authorities in the Territory. Miltenyi shall maintain each such Master File in accordance with Applicable Laws ("Regulatory Work"). To the extent Bellicum requests that Miltenyi generate any additional Master File and/or add additional information to any existing Master File, the provisions of Section 4.4 "Extension of Scope, Supplemental Services" below shall apply. + +4.4 Extension of Scope, Supplemental Services. With respect to any Bellicum Product, Bellicum may request that Miltenyi provide additional regulatory assistance beyond the scope of the Regulatory Work, and/or may request that Miltenyi perform additional services (i.e. generation of additional supportive data for inclusion in a Master File) that alter, amend, or add to the Regulatory Work. Bellicum shall submit each such request to Miltenyi with reasonable detail in writing. Any request that constitutes a material modification or increase in scope of the Regulatory Work or an agreement for the provision of additional services shall require a written amendment to this Agreement via the Bellicum Product- or Bellicum Program-specific Module signed by authorized representatives of both Parties. Such amendment + +14 + + + + + +Miltenyi Biotec-Bellicum Supply Agreement (Execution Copy, March 27, 2019) + +shall specify in detail any modification or scope change of the Regulatory Work performed by Miltenyi, the appropriate compensation (if any) or basis for such compensation to be paid to Miltenyi by Bellicum for the performance of such additional Regulatory Work assistance or services, and the appropriate time schedule for completion of such additional Regulatory Work assistance or services. Upon executing such written amendment, the additional Regulatory Work assistance or services shall be deemed included within Regulatory Work and subject to the standards of performance described in this Agreement. + +4.5 Master Files; Right to Cross Reference. Upon Bellicum's written request, subject to Section 4.9, Miltenyi shall submit a cross reference letter to the appropriate Regulatory Authority(ies) in any Designated Country in which Miltenyi maintains a Master File(s) for the relevant Miltenyi Product(s), authorizing such Regulatory Authority(ies) to access and refer to such Master File(s) for the relevant Miltenyi Product(s) to the extent such information is reasonably required for regulatory purposes to obtain the applicable regulatory approvals for the Permitted Use of the Miltenyi Product(s) and/or the Bellicum Product(s); provided, however, that Bellicum shall first provide to Miltenyi all necessary information about such Bellicum Product that is reasonably included in such cross reference letter. + +4.6 Rights to Master Files. Miltenyi shall solely own and retain all rights, title and interest in and to the Master File(s) (and any pertaining regulatory documentation). Bellicum shall have no right to access the Master File(s), or, except as expressly set forth in Section 4.5 supra, to require the disclosure by Miltenyi of any information contained in any Master File, or to cross-reference or otherwise use the Master File(s) for any purpose other than as expressly provided herein. + +4.7 Communication to/from Regulatory Authorities. + +(a) Communication from Regulatory Authorities. Each Party will promptly notify the other Party in writing of any material communication from any Regulatory Authority that is related specifically to (i) the safety and/or functionality of any Miltenyi Product(s) and/or the use thereof for the manufacture of Bellicum Product or (ii) the safety and/or functionality of any Bellicum Product(s) as the same relate or could relate to a Miltenyi Product and/or the use of Miltenyi Product(s) in the manufacture of Bellicum Product(s), and that would, in each case of (i) and (ii), reasonably be expected to have a material adverse effect on either Party's products that are the subject matter of this Agreement, or ability of a Party to comply with its obligations under this Agreement (collectively, "Communication(s)"). Each Party shall, as soon as practicable after any contact with or receipt of any Communication, forward a copy or description of the same (to the extent it so relates) to the other Party. Each Party reserves the right to redact its Confidential Information and confidential Third Party information from such Communications. Each Party shall obligate its Affiliates and Subcontractors accordingly. + +(b) Communication to Regulatory Authorities. In the event that a response to a Regulatory Authority is required in connection with any Communication, Bellicum will have sole responsibility for the form and content of any response to a Communication from a Regulatory Authority in connection with any regulatory submission regarding a Bellicum Product, or any non-Miltenyi Product component thereof (Miltenyi will provide its proposed response regarding any Miltenyi Product component thereof), and any non-product-specific information and/or non-procedure-specific information related to Bellicum, and Miltenyi will have sole responsibility for the form and content of any response to a Communication from a Regulatory Authority regarding a Miltenyi Product regulatory submission or any component thereof, the Master Files, and any non-product specific information related to Miltenyi. If Miltenyi's response is requested and needed in connection with any Bellicum Product regulatory submission, and a delayed response is likely to delay development or commercialization of such Bellicum Product, then Miltenyi will promptly use its diligent efforts to provide such response as soon as practicable. At the responding Party's reasonable request and expense, the other Party will collaborate in good faith with the responding Party in preparing such responses and, subject to Sections 4.5 and 4.6, will provide the responding + +15 + + + + + +Miltenyi Biotec-Bellicum Supply Agreement (Execution Copy, March 27, 2019) + +Party with information that the responding Party reasonably believes is required to develop a requested response for questions in relation to such Communication. + +(c) Required Communications. If Bellicum is required to communicate with any Regulatory Authority specifically regarding any Miltenyi Product, then Bellicum shall so advise Miltenyi as soon as practicable and, unless prohibited by Applicable Law, or to the extent that such a disclosure would result in the violation of any contractual obligations to a Third Party, provide Miltenyi in advance with a copy of any proposed written Communication with such Regulatory Authority to the extent that such Communication pertains to Miltenyi Products; provided that Bellicum reserves the right to redact its Confidential Information and confidential Third Party information from such copy. Bellicum shall use reasonable efforts to comply with all reasonable direction of Miltenyi pertaining to the foregoing. To the extent permitted by the Regulatory Authority, Miltenyi shall have the right to participate in any planned oral Communications or meetings between Bellicum and any Regulatory Authority specifically relating to Miltenyi Products or Miltenyi Technology. For purposes of clarification, the obligations imposed on Bellicum pursuant to this Section 4.7(c) shall not apply with respect to Communications with Regulatory Authorities that are focused primarily on a non-Miltenyi Product portions or on a Bellicum Product. + +4.8 Assistance. Miltenyi shall, if requested by Bellicum, consult with and provide reasonable assistance to Bellicum with regard to regulatory matters concerning the Miltenyi Products, as appropriate, provided that for any assistance regarding regulatory matters that is beyond the scope of standard use of the Miltenyi Products as made available in Miltenyi's catalogue, Bellicum shall pay for Miltenyi's time for such consulting and assistance at Miltenyi's then-standard rates, which scope and limits shall be discussed between the Parties and mutually agreed in writing prior to the performance of the assistance by Miltenyi (subject to the Parties' representations, warranties and liabilities under this Agreement). Absent Miltenyi's gross negligence or willful misconduct, Bellicum shall bear all responsibility for Bellicum's or Bellicum Subcontractors' use of information provided by Miltenyi (including use in regulatory filings and any Third Party liability) pursuant to this Section 4.8. + +4.9 Additional Filings. Bellicum acknowledges that, as of the Effective Date, Master Files in relation to Miltenyi's supply obligations have not been filed in all jurisdictions worldwide. If Bellicum desires to pursue clinical evaluations related to the approvability or approval of any Bellicum Product or decides to pursue commercialization of any Bellicum Product in any jurisdiction where Miltenyi does not then have an active Master File, and Bellicum would not legally be able to conduct such evaluation or commercialization without Miltenyi filing a Master File in such jurisdiction or making necessary information available to the Regulatory Authority, then Bellicum shall so notify Miltenyi, and the Parties shall discuss in good faith the terms and conditions under which Miltenyi would be willing to file such Master File or provide necessary information to the Regulatory Authority including additional compensation to Miltenyi (if any), but Miltenyi shall not be obligated to file such Master File or provide such information, unless the Parties mutually agree in writing on such commercially reasonable terms and conditions. To the extent requested by Bellicum in writing from time to time to amend the Bellicum Product specific Module to include Additional Countries, Miltenyi shall work in good faith with Bellicum to include such Additional Countries in accordance with the provisions of Section 2.3 supra. + +4.10 Disclaimer. Except as provided in this Article 4 or otherwise in the Agreement, Miltenyi provides no warranty that any Master File or other regulatory dossier or submission by Miltenyi or Bellicum will be approved by any Regulatory Authority. Miltenyi shall in no way be held responsible for any refusal by any Regulatory Authority or ethics committee to grant permission to conduct a clinical trial(s) and/or for any refusal by any Regulatory Authority to grant approval under an Investigational New Drug Application (IND) or under a Biological License Application (BLA) or for compassionate use for a Bellicum Product. + +16 + + + + + +Miltenyi Biotec-Bellicum Supply Agreement (Execution Copy, March 27, 2019) + +ARTICLE 5 FORECASTS AND ORDERS + +5.1 Forecasts. In order to assist Miltenyi with its capacity, procurement and production planning, and as a general framework for forecasting Bellicum's orders of Miltenyi Products (where more specific parameters may be set forth in a given Module), Bellicum agrees to provide Miltenyi with rolling forecasts of Bellicum's (and its Subcontractors' and Licensees') anticipated quantity requirements for Miltenyi Products in the Forecast Territory during the Term of this Agreement, in accordance with the provisions of this Section 5.1 (each, a "Forecast"). There is no binding forecasting obligation for Research Grade Products, except (if applicable) as otherwise explicitly agreed in a Module. Any modified forecasting terms and conditions for a particular Bellicum Product or Bellicum Program that supplement this Article 5 will be set forth in the Module applicable to that Bellicum Product or Bellicum Program. All of the Forecasts provided under this Agreement will break down the demand of Miltenyi Products on a product-by-product (expressed in number of units) and manufacturing country-by-manufacturing country basis (i.e., Forecast Territory only) and substantially follow the mutually agreed Miltenyi forecast sheet, as attached hereto in Exhibit C 1-3. All Forecasts provided by Bellicum will be good faith estimates of Bellicum's anticipated quantity requirements for Miltenyi Products during the relevant period. Bellicum agrees to use [...***...] in preparing all Forecasts provided hereunder to minimize variances between Forecasts. Each Forecast shall be duly signed by an authorized representative of Bellicum (or Bellicum's designee on behalf of Bellicum) and submitted in writing to Miltenyi, by mail, email or facsimile, and shall supersede prior Forecasts to the extent the Forecast overlaps with prior Forecasts. + +(a) Rolling Monthly Forecast; Firm Zone. Within [...***...] Business Days of the Effective Date, and thereafter by the [...***...] day of each Calendar Month during the Term, Bellicum shall submit a monthly rolling Forecast of Bellicum's anticipated quantity requirements for Miltenyi Products within the Forecast Territory (on a manufacturing country-by-manufacturing country basis) for each of the next twelve (12) consecutive Calendar Months (e.g., year 1: months 1-12), commencing with the Calendar Month in which such Forecast is submitted (each, a "Monthly Forecast"). (For clarity, the initial Monthly Forecast will cover Calendar Year 1, i.e., Calendar Months 1-12; the following Monthly Forecast will cover the twelve Calendar Months period following the Calendar Month 1 of the previous Monthly Forecast, i.e., Calendar Months 2-13.) The Monthly Forecast shall show quantities forecasted on a monthly basis, and for the first (1st) three (3) months shall state the desired dates of Delivery for the forecasted quantities. With respect to any Monthly Forecast for Miltenyi Products submitted during the Term, [...***...] percent ([...***...]%) of the quantities forecasted for the first (1st) three (3) month period of each Monthly Forecast (each such 3-month period will be referred to as the "Firm Zone") shall be binding, and the corresponding portion of each subsequent Monthly Forecast shall be consistent with such period. For clarity, all forecasted quantities of Miltenyi Products during the Firm Zone shall constitute a binding commitment by Bellicum to submit corresponding Purchase Orders for Miltenyi Products. The Parties agree that, except with respect to the Firm Zone and any additional conditions set forth in a given Module, a Monthly Forecast provided by Bellicum will not be binding upon both Parties. + +(b) Rolling Quarterly Forecast. Within [...***...] Business Days of the Effective Date, and thereafter by the [...***...] day of each last month of a Calendar Quarter during the Term, Bellicum shall submit a non-binding quarterly rolling Forecast of Bellicum's anticipated quantity requirements for Miltenyi Products for each of the four (4) Calendar Quarters immediately following the last month of such Calendar Quarter (each, a "Quarterly Forecast"). Each Quarterly Forecast shall show anticipated quantity requirements on a quarterly basis. (For clarity, the initial Quarterly Forecast will cover Calendar Year 2, i.e. Calendar Quarters 1, 2, 3 and 4 (covering Calendar Months 13-15, 16-18, 19-21 and 22-24); the following Quarterly Forecast will cover the four Calendar Quarter period following the Calendar Quarter 1 of the previous Quarterly Forecast, i.e. Calendar Quarters 2-5.) A Quarterly Forecast provided by Bellicum will not be binding upon both Parties. + +17 + + + + + +Miltenyi Biotec-Bellicum Supply Agreement (Execution Copy, March 27, 2019) + +(c) Long-Term Forecast. In addition, Bellicum (or Bellicum's designee on behalf of Bellicum) shall within [...***...] days of the Effective Date, and thereafter by [...***...] of each Calendar Year during the Term, submit a non-binding annual rolling Forecast of Bellicum's anticipated quantity requirements for Miltenyi Products for each of the next three (3) consecutive Calendar Years, commencing with the Calendar Year in which such Forecast is submitted (each, a "Long-Term Forecast") for the purposes of assisting Miltenyi with its capacity and production planning for Miltenyi Products during such period. Each Long-Term Forecast shall show anticipated quantity requirements on an annual basis. (For clarity, the initial Long-Term Forecast will cover the Calendar Years 3 to 5; the following Long-Term Forecast will cover the Calendar Years period following the previous Calendar Year 3 of the previous Long-Term Forecast, i.e. Calendar Years 4-5.) A Long Term Forecast provided by Bellicum will not be binding upon both Parties and shall serve to assess future capacity planning at Miltenyi. + +(d) Forecasts Due Periodically. In the event that Miltenyi has failed to receive an updated Forecast for any relevant forecast period within the times or by the dates provided in clauses (a) through (c) above, Miltenyi shall promptly notify Bellicum of such failure in writing and, if Bellicum fails to respond with an updated Forecast by the [...***...] day of a Calendar Month of the relevant forecast period, the most recent Forecast shall be regarded as current. + +(e) Acceptable Forecast Variance. Outside the Firm Zone, Bellicum may increase or decrease the amount of Miltenyi Product forecast for each Calendar Month of each Monthly Forecast by up to [...***...] percent ([...***...]%) for Calendar Months 4 through 6, and by [...***...] percent ([...***...]%) for Calendar Months 7 through 12, compared to the amount of Miltenyi Product that was forecast for the comparable Calendar Month in the prior Monthly Forecast provided in accordance with this Agreement, on a product-by-product and country-by-country basis, (e.g., the forecast for the fourth Calendar Month in a Monthly Forecast may not increase or decrease by more than [...***...]% of the amount of any particular Miltenyi Product in any particular country forecast for the fifth Calendar Month of the prior Monthly Forecast). For clarity, variances with respect to forecasts submitted for any Calendar Month within the Firm Zone shall not be acceptable. + +5.2 Volume Limitations. + +(a) Subject to Bellicum's adherence to its Forecast obligations pursuant to Section 5.1 above, or as specifically modified in a specific Module, Miltenyi shall meet the demands of any Purchase Orders (as defined below) that are made by Bellicum in compliance with the Forecasts. Miltenyi shall not be obligated to supply Bellicum with quantities of Miltenyi Product in excess of [...***...] percent ([...***...]%) of the most recent Forecast provided to Miltenyi but agrees to use [...***...] to satisfy Bellicum's requirement of Miltenyi Product in excess of [...***...] percent ([...***...]%) of the relevant Forecast quantities in accordance with the terms of this Agreement. + +(b) In the event that Miltenyi becomes aware that it is or will be unable to supply any desired quantity of Miltenyi Product pursuant to a Purchase Order that falls within the relevant Forecast on or before the applicable Delivery date(s) therefor, Miltenyi shall promptly inform Bellicum, and then, the Parties shall, in good faith, seek to agree on a revised date (or dates) for Delivery. If Miltenyi fails to propose a reasonably acceptable plan for the Delivery, Bellicum may, to be determined in Bellicum's reasonable discretion and notwithstanding anything to the contrary in the Agreement, at its option, cancel the Purchase Order. + +5.3 Firm Zone Requirements. Unless otherwise set forth in a relevant Module, the quantity of Miltenyi Product(s) forecasted for each Calendar Month of the Firm Zone of the most recent rolling Monthly Forecast submitted pursuant to Section 5.1(a) of this Agreement shall be binding on both Parties, commencing on the Effecctive Date of the Agreement (but not for the first three months thereto), and in each Calendar Month during the Term, Bellicum shall have the firm obligation to order at a minimum the amount of Miltenyi Product(s) specified for the first (1st) Calendar Month of the most recent rolling Monthly Forecast + +18 + + + + + +Miltenyi Biotec-Bellicum Supply Agreement (Execution Copy, March 27, 2019) + +(such amount, the "Firm Zone Requirements"). The Firm Zone Requirement shall not apply within the first three months of the Effective Date of the Agreement. Within [...***...] days of the end of each Calendar Quarter, Miltenyi will calculate the total Firm Zone Requirements for each of the three (3) Calendar Months during that Calendar Quarter. In the event that Bellicum fails to order the Firm Zone Requirements of Miltenyi Product from Miltenyi during any particular Calendar Month in the relevant Calendar Quarter in which Miltenyi was ready, willing and able to Deliver Miltenyi Product in accordance with the applicable Monthly Forecast, then the "Firm Zone Order Shortfall" shall be the total amount by which the Firm Zone Requirements for any given Calendar Month during such Calendar Quarter exceed the amount of Miltenyi Product actually ordered by Bellicum during such Calendar Month. Miltenyi will invoice Bellicum for an amount equal to the Firm Zone Shortfall and Bellicum will pay such invoice within [...***...] days of the invoice date. Upon Bellicum's request and subject to payment of the Firm Zone Shortfall amount by Bellicum, Miltenyi will, if so requested by Bellicum, provide Bellicum with Miltenyi's remaining stock of the relevant forecasted Miltenyi Products equal in value to such Firm Zone Shortfall amount. + +5.4 Purchase Orders. This Section 5.4 sets forth a general framework for Purchase Order-related terms and conditions, which shall apply unless modified terms and conditions for a particular Bellicum Product are set forth in its corresponding Module. + +(a) Bellicum shall order Miltenyi Products by submitting written purchase orders to Miltenyi, in such form as the Parties may agree from time to time and in accordance with any applicable Lead Times and the provisions of this Article 5 (each, a "Purchase Order"). All Purchase Orders (and any related acceptances or objections by Miltenyi) may be delivered electronically or by other means to Miltenyi's applicable sales representative located in the country of the shipping destination or to such location as Miltenyi shall reasonably designate from time to time. + +(b) Each Purchase Order will specify the MB Global Contract Number assigned to this Agreement, the volumes of Miltenyi Product(s) ordered, the desired Delivery date(s) the Miltenyi Products are to be made available to Bellicum for pick-up by Bellicum's designated carrier or freight forwarder, the relevant ship-to address, and any special shipping instructions. Bellicum will order Miltenyi Product in a defined number of units, subject to reasonable minimum order size requirements that may vary according to product type. + +(c) Bellicum shall submit each Purchase Order to Miltenyi reasonably prior to the desired Delivery date(s), which shall be no sooner than the applicable Lead Time(s) for the relevant Miltenyi Product(s); provided that absent an applicable Lead Time, the Purchase Order shall be submitted at least [...***...] days in advance of the desired Delivery date specified in such Purchase Order; and provided further that Miltenyi shall use diligent and good faith efforts to Deliver before the desiredDelivery date. + +(d) Purchase Orders shall be firm and binding upon written acceptance by Miltenyi. Miltenyi shall confirm acceptance of the Purchase Order by written notice (sent by fax, mail, overnight courier or e-mail) to Bellicum within [...***...] Business Days of receipt of the Purchase Order from Bellicum. If Miltenyi fails to confirm acceptance of a Purchase Order within [...***...] Business Days of receipt of the Purchase Order from Bellicum, then Bellicum will contact Miltenyi to verify Miltenyi's receipt and acceptance of such Purchase Order and request written confirmation thereof from Miltenyi. Miltenyi shall accept all Purchase Orders for quantities of Miltenyi Product that are within the Firm Zone Requirement amounts specified for the relevant Calendar Month in the applicable Monthly Forecast. + +(e) Each Purchase Order shall reference the MB Global Contract Reference Number (MBGCR) defined in the respective Modules, submitted by Bellicum to Miltenyi shall be governed exclusively by the terms and conditions of this Agreement, the relevant Module and the applicable Quality Agreement. None of the terms and conditions set forth on any Purchase Order, order form, invoice, acceptance, objection or similar document shall change or modify the terms and conditions of this Agreement, and the Parties hereby agree that the terms and conditions of this Agreement and the relevant Module shall + +19 + + + + + +Miltenyi Biotec-Bellicum Supply Agreement (Execution Copy, March 27, 2019) + +supersede any conflicting term or condition set forth in any Purchase Order, order form, invoice, acceptance, objection or similar document furnished by Bellicum to Miltenyi or by Miltenyi to Bellicum, as the case may be. For the avoidance of doubt, Purchase Orders may only contain products to be ordered under a single MBGCR. The combination of products referring to different MBGCR in one Purchase Order, or a combination of products referencing a MBGCR and products not referencing a MBGCR in one Purchase Order is not possible. + +(f) In the event of a Bellicum Product safety issue, withdrawal or hold on use of a Bellicum Product by a Regulatory Authority or other issue that directly results in a material reduction or elimination of Bellicum's quantity requirements for a particular Miltenyi Product(s), the Parties will discuss promptly and in good faith adjustments to the permitted forecast variance described in Section 5.1(e) during the period when such circumstance exists, and other steps that could be taken to soften the impact of such circumstance on each Party. + +5.5 Changes to Purchase Orders. Subject to Section 5.2 and applicable Lead Times, Miltenyi shall use [...***...] to comply with unplanned changes in Purchase Orders requested by Bellicum either in terms of quantities or Delivery dates. All requests for changes to Purchase Orders shall be submitted in writing. Bellicum shall be responsible for all supplementary costs that result from the implementation of any unplanned change to an accepted Purchase Order requested by Bellicum. + +5.6 Minimum Purchases. This Section 5.6 sets forth a general framework for Minimum Purchases-related terms and conditions, which shall apply unless modified terms and conditions for a particular Bellicum Product are set forth in its corresponding Module. In the event Bellicum's aggregate purchases of Miltenyi Products from Miltenyi under this Agreement in any Calendar Year during the Term is less than [...***...]% of the Rolling Monthly Forecast subject to Sections 5.1 and 5.3, at the beginning of that Calendar Year or €[...***...] ([...***...] Euros), whatever is higher, (the "Minimum Purchase"), then Miltenyi shall provide written notice to Bellicum of such shortfall. Notwithstanding anything to the contrary in the foregoing, and for Calendar Year 2019 only, the €[...***...] amount recited as an element used to determine the Minimum Purchase in a Calendar Year is hereby reduced to €[...***...]. Bellicum shall have [...***...] days to tender a firm Purchase Order for the purchase of such shortfall to satisfy the Minimum Purchase requirements set forth above. If Bellicum fails to tender such firm Purchase Order and has not otherwise met the Minimum Purchase requirements within said [...***...]-day period, then Miltenyi, in its sole discretion, effective immediately upon Bellicum's receipt of written notice of Miltenyi's election to do so, shall have no obligation to Bellicum under this Agreement: + +(1) not to discontinue the supply of any particular Miltenyi Product; + +(2) to use [...***...] to ensure continuous supply of Miltenyi Products to Bellicum in accordance with Forecasts provided by or on behalf of Bellicum; and + +(3) to provide Regulatory Work in accordance with Section 4.3. + +Minimum Purchases referred to above will include the quantities of Miltenyi Product(s) ordered by Bellicum in accordance with applicable Forecasts that could not be supplied by Miltenyi. At the time Bellicum reaches the Minimum Purchase requirements again, Miltenyi and Bellicum shall in good faith agree to continue the supply commitment. + +ARTICLE 6 DELIVERY + +6.1 Delivery; Shipment. + +(a) Each quantity of Miltenyi Product(s) ordered by Bellicum in a particular Purchase Order pursuant to this Agreement shall be delivered FCA (Incoterms 2010) Miltenyi's Facility by delivery + +20 + + + + + +Miltenyi Biotec-Bellicum Supply Agreement (Execution Copy, March 27, 2019) + +of the shipped goods to Bellicum's designated carrier or freight forwarder, in adequate packaging and ready for loading, on the Delivery Date ("Delivery"). + +(b) Each shipment of Miltenyi Products will be picked up by Bellicum's designated carrier on the agreed delivery date(s) (each, a "Delivery Date") confirmed by Miltenyi for the applicable Purchase Order in accordance with applicable Lead Time(s), during normal business hours (Monday to Friday, excluding statutory holidays) unless special arrangements are agreed to by Miltenyi in writing. Bellicum shall be responsible for all arrangements regarding loading, shipment, insurance from Miltenyi's Facility to the ultimate destination and import customs clearances at the destination country, except as otherwise agreed by the Parties in writing. Alternatively, upon Bellicum's written request, Miltenyi will make all necessary shipping arrangements on behalf of Bellicum with a carrier designated by Bellicum, on Bellicum's responsibility. Bellicum shall provide Miltenyi with a list of approved carriers. Bellicum also shall be responsible for all of the following costs and charges, as applicable: loading charges of the designated carrier, freight charges and other shipping expenses from Miltenyi's Facility to the ultimate destination, expenses for insurance of goods during transit, import customs clearances. + +(c) Upon Delivery, Bellicum will cause its carrier to verify the gross and visually observable physical integrity of all Miltenyi Product packaging prior to loading and to acknowledge proper receipt of the Miltenyi Products by signing the relevant transport documentation. + +(d) Miltenyi shall have the Miltenyi Products appropriately labelled with a traceable lot or batch number and packaged for shipping in commercial packaging materials in compliance with Agreed Standards, Miltenyi's standard procedures and, the applicable Quality Agreement. + +(e) Quantities actually Delivered to Bellicum or Bellicum's designee pursuant to an accepted Purchase Order may not vary from the quantities reflected in such Purchase Order without Bellicums' prior written consent; provided, however, that if Bellicum so consents to a variance in quantities actually Delivered (as compared to quantities set forth in an accepted Purchase Order), Bellicum shall only be invoiced and required to pay for the quantities of Miltenyi Product that Miltenyi actually Delivered to Bellicum or Bellicum's designee. In the event that Bellicum consents to accept Delivery of less than the quantities of Miltenyi Product in an accepted Purchase Order, Miltenyi shall include, in the next shipment of Miltenyi Product to Bellicum, any quantities ordered pursuant to an accepted Purchase Order but not actually delivered on the designated Delivery date. If a delay in any such Delivery of Miltenyi Products exceeds ten (10) Days, then Bellicum may require a pro rata reduction in its then-current Monthly Forecast to account for such delay. + +6.2 Title and Risk. Title and risk of loss or damage to Miltenyi Products shall pass to Bellicum as defined by Incoterm FCA (Incoterms 2010). Should any of the Delivered Miltenyi Products be damaged during transit to Bellicum or Bellicum's designee, then notwithstanding anything to the contrary in Section 5.4, a replacement order to replace such damaged Miltenyi Products shall be fulfilled, even if the volume limitations defined in Section 5.2 are exceeded, by Miltenyi in good faith and as soon as practicable (and such replacement order shall be considered a new Purchase Order during the applicable Firm Zone). + +6.3 Partial Delivery. With Bellicum's specific prior written consent, Miltenyi may make partial shipment against Purchase Orders, to be separately invoiced with each shipment and paid for when due in accordance with this Agreement. For such partial shipments, Miltenyi will pay all shipment costs associated with such subsequent or additional shipments. + +6.4 Minimum Guaranteed Shelf Life. Miltenyi shall ensure that, at the time of Delivery the remaining shelf life of each shipped Miltenyi Product shall be no less than the minimum shelf life set forth in Exhibit B as such Exhibit B Module may be amended from time to time by written notification of Miltenyi to Bellicum. As of the Effective Date the Minimum Guaranteed Shelf Life of certain Miltenyi Products is relatively short and thus requires Bellicum to perform a tight materials management (i.e. short-termed + +21 + + + + + +Miltenyi Biotec-Bellicum Supply Agreement (Execution Copy, March 27, 2019) + +ordering of such Miltenyi Products) regarding production planning of Bellicum Product. The Parties mutually agree to use their [...***...] to implement any back-office activities as necessary to implement a) an increased Minimum Guaranteed Shelf Life and/or b) improvements to material management and production planning to address the challenge in the previous sentence and the Parties agree to provide to each other reasonable assistance where practicable to implement such back-office changes as necessary, taking into account cost, resource and capacity requirements. + +6.5 Certificates. Miltenyi shall include proper release certificates, certificates of compliance, and/or certificates of analysis with all shipments of Miltenyi Product, as applicable, in accordance with the requirements of the Quality Agreement. + +6.6 Product Shortage. Miltenyi shall promptly notify Bellicum of any potential or anticipated shortfall in the manufacturing or inventory of any Miltenyi Product that may adversely affect the Delivery of such Miltenyi Product in accordance with Bellicum's forecast requirements and pending Purchase Orders therefor. If Miltenyi is unable to supply any Miltenyi Product subject to a pending Purchase Order for any reason, then the Parties shall, in good faith, seek to agree on a revised date (or dates) for Delivery and Miltenyi shall undertake prompt and diligent efforts to mitigate the adverse impact on Bellicum. In the case of a limited availability of any Miltenyi Product, in selling such Miltenyi Product, Miltenyi shall take into account the aggregate volume of Miltenyi Products purchased by Bellicum, and shall subject to reasonable ethical standards provide to Bellicum priority access to Miltenyi Product consistent with such Miltenyi Product purchase volumes and critical medical needs. If due to the fault or error of Miltenyi or a Third-Party supplier or Subcontractor of Miltenyi or Force Majeure, Miltenyi fails to deliver any Miltenyi Product in the quantities specified in Bellicum's Purchase Order, Miltenyi shall use all [...***...] that may be necessary in order to minimize the shortfall, and deliver the ordered Miltenyi Product as soon as possible. If Miltenyi fails to propose a reasonably acceptable plan for the Delivery or if the delay is more than thirty (30) days following the confirmed Delivery Date, Bellicum may, at its reasonable election and notwithstanding anything to the contrary in the Agreement, cancel the Purchase Order(s) without penalty. + +6.7 Continuity of Supply. + +(a) Contingent upon Bellicum's continued adherence to its obligations in accordance with this Agreement, including the Forecast obligations and Firm Zone Requirements pursuant to Sections 5.1 and 5.3 above, Miltenyi shall use [...***...] have and devote adequate manufacturing capacity to ensure continuous supply of Miltenyi Products to Belicum in accordance with the Forecasts during the Term, in accordance with the provisions of this Section 6.7. However, Miltenyi's compliance with this Section 6.7(a) shall not require Miltenyi to incur any significant expenses to purchase new equipment, to install equipment purchased or requested by Bellicum, or to add (or, for clarity, allocate or dedicate) additional manufacturing or storage capacity for the manufacturing and supply of Miltenyi Products to Bellicum hereunder. + +(b) In the event that Miltenyi becomes aware that it will not be able, or is likely not to be able, to produce all of Bellicum's forecast requirements of Miltenyi Products from its primary facility located in Bergisch Gladbach, Germany, Miltenyi shall determine, at its option and expense, to establish additional or alternative manufacturing and supply capability for the Miltenyi Products by qualifying and maintaining one or more back-up manufacturing facilities at the premises of Miltenyi and/or any of its Affiliates (each, a "Secondary Location"). Use of a Secondary Location must be notified to Bellicum in writing in accordance with the Change Notification processes set forth in Section 3.2. Miltenyi shall use its best efforts to provide to Bellicum with a commercially reasonable number of samples of the "Secondary Location Miltenyi Products" (meaning such Miltenyi Products that are produced at such Secondary Location) for evaluation by Bellicum as soon as each such Secondary Location Miltenyi Product becomes available during the post-noficiation period. In the event that Miltenyi decides to qualify a Secondary Location for the supply of Miltenyi Products hereunder, it shall provide reasonable prior written notice thereof (not less than + +22 + + + + + +Miltenyi Biotec-Bellicum Supply Agreement (Execution Copy, March 27, 2019) + +six (6) months in advance) to Bellicum, including such details as Bellicum reasonably requires to assess the qualifications of such Secondary Location. Miltenyi shall have sole responsibility for all activities in connection with the setup and approval of the Secondary Location, including for establishing proof of product equivalence for Miltenyi Products produced at the Secondary Location, process and equipment validation and for filing all submissions or other correspondence with Miltenyi's applicable Regulatory Authorities in connection with the Secondary Location. + +(c) In addition, Miltenyi may from time to time determine, in its sole discretion, to have one or more Miltenyi Products manufactured, assembled and/or supplied, in whole or in part, by a Subcontractor chosen by Miltenyi and reasonably acceptable to Bellicum. Miltenyi shall provide Bellicum with prior written notification of such Change in accordance with the applicable notification procedures as set forth in the Section Change Control and in the Quality Agreement, if applicable. Notwithstanding the foregoing, Miltenyi shall remain responsible for the fulfilment of its supply and other obligations hereunder with respect to any Miltenyi Product manufactured by Miltenyi's Subcontractor. Miltenyi shall be solely responsible for providing proof of product equivalence and for filing all submissions or other correspondence with the applicable governmental or regulatory authorities in connection with any decision to seek approval of a Third Party subcontractor site for the Miltenyi Products. Further, Miltenyi shall be solely responsible for all process and equipment validation required by the responsible Regulatory Authorities and the regulations thereunder and shall take all steps reasonably necessary to pass government inspection by such Regulatory Authorities + +(d) In addition, the Parties shall from time to time discuss in good faith and mutually and reasonably agree upon (i) whether one or more Miltenyi Products require a minimum inventory to be held by Bellicum, and (ii) whether there shall be any type of Miltenyi Product that require a minimum inventory to be held by Miltenyi on behalf of Bellicum and under which terms and conditions such minimum inventory shall be reserved for Bellicum. + +6.8 Continuity of Supply - Commercial Phase. + +If a given Module involves supply of Miltenyi Products for Bellicum's Commercial Phase activities, Section 6.8(b) shall apply, provided that additional terms and conditions regarding continuity of supply for such Commercial Phase activities pursuant to such Module have been negotiated in good faith and mutually agreed upon in such Module. The Parties acknowledge that provisions in such Module relating to additional terms and conditions regarding such continuity of supply will depend on the specific Miltenyi Product(s) that are relevant to such Module, and further acknowledge that such provision(s) in such Module may be subject to the Parties' good faith negotiation and mutual agreement regarding additional terms and conditions relevant to minimum purchase requirements (if any) for Miltenyi Product(s) under a Module. + +(a) Principal Terms. + +(1) In the event of a Supply Failure (as defined below), Bellicum shall have the option to request Miltenyi to establish, as soon as reasonably feasible and at Miltenyi's sole cost and expense, a Secondary Location reasonably capable of making up the Supply Failure of the affected Miltenyi Product (the "Affected Miltenyi Product"), and if Miltenyi should either (i) notify Bellicum in writing that it is not willing and/or capable to establish a Secondary Location, or (ii) should not have established such Secondary Location and made up the Supply Failure within a reasonable period of time with regard to the Affected Miltenyi Product from receipt of Bellicum's written request therefore, then Bellicum shall, at Bellicum's sole cost and expense, have the right to select, qualify, and maintain an additional second source manufacturing facility as a back-up manufacturing facility for the Affected Miltenyi Products at the premises of a Third Party (the "Second-Source Supplier"). In the event that Bellicum elects to qualify a Second-Source Supplier for an Affected Miltenyi Product, it shall provide Miltenyi with prior written notice to Miltenyi including such details as Miltenyi reasonably requires to assess the qualifications of such Second-Source Supplier. Any such Second-Source Supplier shall be subject to the prior written consent of Miltenyi, which + +23 + + + + + +Miltenyi Biotec-Bellicum Supply Agreement (Execution Copy, March 27, 2019) + +shall not be unreasonably withheld, conditioned or delayed, except as necessary in Miltenyi's reasonable judgment to protect the bona fide and legitimate interests of Miltenyi in protecting its proprietary Intellectual Property Rights from misappropriation or misuse (e.g., by disclosure to a Miltenyi Competitor). If Miltenyi so withholds its consent, it shall propose alternative Second-Source Suppliers reasonably acceptable to both Miltenyi and Bellicum. If the Parties fail to identify a mutually acceptable Second-Source Supplier within thirty (30) days, Bellicum may proceed with an alternative Second-Source Supplier of its choice (however not a Miltenyi Competitor) without Miltenyi's consent. + +(2) For purposes hereof, each of the following events shall be deemed a "Supply Failure": + +(i) if Miltenyi, using [...***...], fails to deliver to Bellicum at least [...***...]% (on a Miltenyi Product-by-Miltenyi Product basis) of an accepted Purchase Order of Miltenyi Product placed by Bellicum in accordance with the relevant binding Forecast within a reasonable period of time after the agreed Delivery Date therefor (whether by reason of Force Majeure or otherwise) more than twice during any Calendar Year; provided, however, that any of the foregoing events shall not be considered a Supply Failure to the extent that it results from: + +(x) an act or omission of Bellicum, including any specific written instructions or requirements issued by Bellicum, including an Bellicum- Requested Change; or + +(y) the failure or delay on the part of any supplier of materials designated and required by Bellicum or any other Subcontractor designated and required by Bellicum; or + +(z) a Required Change or other change in any material requirement relating to the development, manufacturing, packaging and shipping of Miltenyi Product at Miltenyi's facility required by Applicable Laws, or the imposition of any other condition with respect to the Miltenyi Product by any governmental body or agency, or Regulatory Authority, based on Applicable Laws, or an event of Force Majeure, unless Miltenyi fails to use [...***...] to remedy the failure, inability, or delay within a reasonable period of time. In the event of the foregoing failures, inabilities, or delays, the Parties shall meet and discuss in good faith how to remedy the situation. + +(ii) If Miltenyi fails to Deliver to Bellicum at least [...***...]% (on a Miltenyi Product-by-Miltenyi Product basis) of an accepted Purchase Order, then for that Miltenyi Product affected by such failed Delivery, the next step in the Discount scheme set forth in Exhibit F shall be applied to such Miltenyi Product during the following two (2) Calendar Quarters (and a repeated failure shall result in further step in the Discount scheme being applied in like manner). + +(3) In the event that Bellicum selects a Second-Source Supplier over Miltenyi's reasonable objection, Miltenyi shall not be responsible to Bellicum for the performance of the said Second-Source Supplier. Any such Second-Source Supplier shall, as a condition of qualification, provide reasonable and customary undertakings to Miltenyi related to the protection of Miltenyi's Confidential Information. Bellicum shall be primarily responsible, with Miltenyi's reasonable cooperation and assistance, for providing proof of product equivalence and for filing all submissions or other correspondence with the applicable governmental or regulatory authorities in connection with any decision to seek approval of a manufacturing facility as Second-Source Supplier for Affected Miltenyi Product. Further, Bellicum shall be primarily responsible, with Miltenyi's reasonable assistance, for all process and equipment validation + +24 + + + + + +Miltenyi Biotec-Bellicum Supply Agreement (Execution Copy, March 27, 2019) + +required by the responsible Regulatory Authorities and the regulations thereunder and shall take all steps reasonably necessary to pass government inspection by such Regulatory Authorities. + +(4) In the event of a Supply Failure, Miltenyi shall grant Bellicum's Second-Source Supplier a limited, non-exclusive, non-transferable, one-site production license, without the right to sublicense, under Miltenyi's Intellectual Property Rights solely to the extent reasonably necessary to manufacture the Affected Miltenyi Product for the Permitted Use by Bellicum at Bellicum's cost. For the avoidance of doubt, a Second-Source Supplier's license under this subsection shall not permit the manufacture of any Miltenyi Product that is not subject to Supply Failure. A Second-Source Supplier's license hereunder shall subsist until such time as Miltenyi and Bellicum reach agreement on alternative license and/or supply arrangements which shall, inter alia, take into consideration: (i) Miltenyi's interest in regaining control over the manufacture of Miltenyi Products, (ii) Bellicum's interest in securing continuity of supply of the Affected Miltenyi Product(s), (iii) the costs incurred by Bellicum in establishing the Second-Source Supplier to rectify the applicable Supply Failure, (iv) the avoidance of potential adverse effects (supply disruption) that may result from the transfer of manufacturing back to Miltenyi, and (v) the appropriate sharing of costs resulting from the Supply Failure. + +(5) In furtherance of the Second-Source Supplier's license grant pursuant to subsection (4) above, Miltenyi shall, to the extent reasonably necessary: + +(i) provide the Second-Source Supplier, subject to a non-disclosure agreement on terms no less restrictive than those set forth herein, with prompt access to the documentation, protocols, assays, SOPs, materials, including biological materials, and other know-how and information constituting the manufacturing process of the Affected Miltenyi Product(s); + +(ii) assist the Second-Source Supplier with the working up and use of Miltenyi's technology, including providing a reasonable level of technical assistance and consultation; + +(iii) provide the Second-Source Supplier with additional disclosures of information and technical assistance and consultation as necessary to keep the Second-Source Supplier informed of the then-current Miltenyi Intellectual Property Rights and the then-current manufacturing process(es) for the Affected Miltenyi Product(s); and + +(iv) provide such other assistance to Bellicum and the Second-Source Supplier as may be reasonably required to give effect to such license. + +(6) Unless Miltenyi is in material breach, Bellicum will pay for work requested by Bellicum and conducted by or on behalf of Miltenyi, and reimburse Miltenyi for all reasonable and necessary costs and expenses incurred by Miltenyi, in establishing and maintaining Bellicum's Second-Source Supplier for an Affected Miltenyi Product. + +ARTICLE 7 ACCEPTANCE AND REJECTION. + +7.1 Acceptance Testing. Bellicum or (for Miltenyi Product purchased by Bellicum but shipped directly to a Bellicum's Affiliate, Subcontractor, or Licensee) Bellicum's designated recipient of the + +shipment of Miltenyi Product will promptly upon Delivery visually inspect each shipment of Miltenyi Product delivered hereunder to (i) determine whether such Miltenyi Product is damaged and (ii) verify that the quantity of Miltenyi Product delivered conforms with the Purchase Order and other applicable documentation. Further, Bellicum shall have a period of [...***...] days from the date of Delivery to + +25 + + + + + +Miltenyi Biotec-Bellicum Supply Agreement (Execution Copy, March 27, 2019) + +perform, or have its Affiliate, Subcontractor, or Licensee (as the case may be) perform, incoming quality assurance testing on each shipment of Miltenyi Product in accordance with the Bellicum-approved quality control testing procedures as set forth in the Product Specifications or the Quality Agreement, as applicable (the "Testing Methods"), to verify conformance with the Product Specifications. For the avoidance of doubt, Bellicum shall have no obligation under this Section 7.1 to inspect or test the contents of the Miltenyi Products other than as in accordance with the agreed Testing Methods, save as prescribed by Applicable Laws. + +7.2 Rejection. Bellicum or its designee shall have the right to reject any shipment of Miltenyi Products that does not conform with the applicable Miltenyi Product Warranty at the time of Delivery when tested in accordance with the Testing Methods (each, a "Rejected Product"). Except in the case of latent defects as described in Section 7.3, each shipment of Miltenyi Products shall be deemed accepted by Bellicum if Bellicum or its designated recipient of the shipment does not provide Miltenyi with written notice of rejection (a "Rejection Notice") within [...***...] days from the date of receipt of the relevant shipment of Miltenyi Product, describing the reasons for the rejection and the non-conforming characteristics of such Rejected Product in reasonable detail. Once a Delivery of Miltenyi Products is accepted or deemed accepted hereunder, Bellicum shall have no recourse against Miltenyi in the event any such Miltenyi Product is subsequently deemed unsuitable for use for any reason, except for Miltenyi Product that does not conform to the Miltenyi Product Warranty after said 30-day period due to a latent defect in the Miltenyi Product that could not be detected through the performance of the Testing Methods. + +7.3 Latent Defects. Bellicum shall have the further right to reject such quantities of Miltenyi Product accepted or deemed accepted pursuant to Section 7.2 above by providing a Rejection Notice on the grounds that all or part of the shipment fails to comply with the Miltenyi Product Warranty to the extent such non-conformance could not have reasonably been determined by visual inspection or incoming quality assurance testing in accordance with Section 7.1, provided that the applicable shelf-life of the Miltenyi Product has not expired and such non-conformance is unrelated to the shipping or storage of the Miltenyi Product after Delivery. The rejection provisions of Section 7.2 above shall apply. Notification to Miltenyi by Bellicum must occur within [...***...] days after Bellicum or Bellicum's designated recipient of the shipment becomes aware or reasonably should have become aware that the Miltenyi Product fails to comply with the Miltenyi Product Warranty. + +7.4 Confirmation. After its receipt of a Rejection Notice from Bellicum or its designee pursuant to Section 7.2, Miltenyi shall notify Bellicum in writing as soon as reasonably practical whether or not it accepts Bellicum's basis for rejection, and Bellicum shall reasonably cooperate with Miltenyi in determining in good faith whether such rejection was necessary or justified. Upon Miltenyi's reasonable request, Bellicum shall provide, or cause its designees to provide, (i) evidence of appropriate transport, storage and handling for any Rejected Product in accordance with the storage and handling instructions set forth in the applicable Product Specifications; and (ii) reasonable testing data demonstrating that the Miltenyi Product in question does not conform to the Miltenyi Product Warranty. If the Parties are unable to agree as to whether a shipment of Miltenyi Products supplied by Miltenyi hereunder conforms to the applicable Miltenyi Product Warranty, such question shall be submitted to an independent quality control laboratory mutually agreed upon by the Parties. The findings of such independent quality control laboratory shall be binding upon the Parties. The cost of the independent quality control laboratory shall be borne by the Party whose results are shown by such laboratory to have been incorrect. + +7.5 Return or Destruction of Rejected Products. Bellicum may not return or destroy any batch of Miltenyi Products until it receives written notification from Miltenyi that Miltenyi does not dispute that such batch fails to conform to the applicable Miltenyi Product Warranty. Miltenyi will indicate in its notice either that Bellicum is authorized to destroy the rejected batch of Miltenyi Products, or that Miltenyi requires return of the rejected Miltenyi Products. Upon written authorization from Miltenyi to do so, Bellicum shall promptly destroy the rejected batch of Miltenyi Products and provide Miltenyi with written certification of + +26 + + + + + +Miltenyi Biotec-Bellicum Supply Agreement (Execution Copy, March 27, 2019) + +such destruction. Upon receipt of Miltenyi's request for return, Bellicum shall promptly return the rejected batch of Miltenyi Products to Miltenyi. In each case, Miltenyi will reimburse Bellicum for the documented, reasonable costs associated with the destruction or return of the rejected Miltenyi Products. + +7.6 Replacement or Refund. Bellicum shall not be required to pay any invoice with respect to any shipment of Miltenyi Products properly rejected pursuant to this Section 7.2. Notwithstanding the foregoing, Bellicum shall be obligated to pay in full for any rejected shipment of Miltenyi Products that is not returned or destroyed in accordance with Section 7.5 above, and that is subsequently determined to conform to the applicable Miltenyi Product Warranty, irrespective of whether Bellicum has already paid Miltenyi for a replacement shipment (but in such event, the replacement shipment will be Delivered to Bellicum and will be included in Bellicum's Minimum Purchases). If Bellicum pays in full for a shipment of Miltenyi Products and subsequently properly rejects such shipment in accordance with Section 7.2, Bellicum shall be entitled, upon confirmation that such shipment failed to conform to the applicable Miltenyi Product Warranty, either, at Bellicum's option: (i) to a refund or credit equal to the Product Price paid with respect to such rejected shipment (including without limitation, taxes paid and shipping expenses); or (ii) to require Miltenyi to promptly replace and Deliver to Bellicum an amount of Miltenyi Products that conforms to the requirements of this Agreement at no additional cost to Bellicum. Bellicum acknowledges and agrees that Bellicum's rights to a refund or credit for, or to receive replacement of, properly rejected shipments of Miltenyi Products hereunder shall be Bellicum's sole and exclusive remedy, and Miltenyi's sole obligation, with respect to non-conforming Miltenyi Products delivered hereunder. + +7.7 Exceptions. Bellicum's rights of rejection, return, refund and replacement set forth in this Article 7 shall not apply to any Miltenyi Product that is non-conforming due to damage (i) caused by Bellicum, its Affiliates, Subcontractors, or Licensees or their respective employees or agents, including but not limited to, misuse, neglect, improper storage, transportation or use beyond any dating provided, or (ii) that occurs after Delivery of such Miltenyi Product in accordance with this Agreement, including any damage caused thereafter by accident, fire or other hazard, and Miltenyi shall have no liability or responsibility to Bellicum with respect thereto. + +ARTICLE 8 FINANCIAL TERMS + +8.1 Upfront Payment. Following execution of this Agreement and within [...***...] days of Bellicum's receipt of an invoice therefor, and as consideration for (i) the right to use certain Miltenyi Products for human use, including the right to cross-reference to the Master File(s) and Miltenyi's additional filings in connection with such Master File(s) as described in Article 4; (ii) Miltenyi's obligation to supply certain Miltenyi Products for human clinical trials and commercialized human use; and (iii) Miltenyi's support of Bellicum's development and commercialization efforts regarding Bellicum Products, Bellicum will pay to Miltenyi a non-refundable upfront fee in the aggregate amount of two million Euro (€2,000,000) (the "Upfront Fee"). The Upfront Fee will be paid in installments, as follows: (a) a first installment of [...***...] Euro (€[...***...]), to be invoiced by Miltenyi following execution of this Agreement; (b) a second installment of [...***...] Euro (€[...***...]), to be invoiced by Miltenyi following the first anniversary of the Effective Date. + +8.2 Milestone Payments. For each particular Bellicum Product, Bellicum will pay to Miltenyi [...***...], one-time only milestone payments of [...***...] Euro (€[...***...]) each, [...***...] milestone payment corresponding to [...***...], and [...***...] milestone payment corresponding to [...***...], or [...***...], whatever comes earlier, respectively, of such Bellicum Product, as set forth in such Bellicum Product's or Bellicum Program corresponding Module(s). + +8.3 Third Party Fees and Royalties. Bellicum will reimburse Miltenyi for Third Party royalties and/or license fees, if any, owed by Miltenyi under Third Party license agreements existing as of the Effective Date as set forth on Exhibit D solely to the extent Miltenyi's exercise of rights under such licenses is required + +27 + + + + + +Miltenyi Biotec-Bellicum Supply Agreement (Execution Copy, March 27, 2019) + +to supply Miltenyi Product to Bellicum under this Agreement for the Permitted Use; and further provided that amounts owed under such Third Party license agreements have not otherwise been passed through to Bellicum and are actually paid by Miltenyi to Miltenyi's licensor(s). Bellicum acknowledges that the potential volume of such Third Party royalties and/or license fees under applicable Third Party license agreements will be as set forth on Exhibit D, as updated from time to time by Miltenyi. If, during the Term of this Agreement, the Parties mutually agree to obtain additional Third Party licenses to enable the Permitted Use of Miltenyi Products by Bellicum, its Affiliates, Subcontractors, and/or Licensees under this Agreement, and such additional licenses give rise to Third Party royalties and/or license fees with respect to Bellicum's use of Miltenyi Products under this Agreement, then the Parties will negotiate in good faith which Party(ies) is/are responsible for payment of such Third Party royalties and/or license fees. Miltenyi, acting reasonably, reserves the right to defer the inclusion of additional Miltenyi Products in Exhibit B hereto until the Parties have reached agreement on this matter. + +8.4 Pricing + +(a) Product Price. In consideration of the supply and Delivery of Miltenyi Products under and in accordance with this Agreement, Miltenyi agrees to sell and Deliver and Bellicum agrees to purchase Miltenyi Products under and in accordance with this Agreement at the Purchase Price listed for each unit of a Miltenyi Product set forth on Exhibit E (the "Product Price"). + +(b) Tiered Pricing. Bellicum shall be entitled to a reduction of the Product Prices set forth in Exhibit F (collectively, the "Discounts"). The Discount, as applicable to a particular Miltenyi Product in a Calendar Year, shall be based on Bellicum's and its Subcontractors' and Licensees' consolidated volume purchases of such Miltenyi Product in a Calendar Year. Within the first Calendar Year, Miltenyi shall analyze Bellicum's and its Subcontractors' and Licensees' purchases of Miltenyi Products at the end of each Calendar Quarter; if such purchases for a particular Miltenyi Product exceed the volume threshold of the then applicable Discount (based on binding and firm Purchase Orders received by Miltenyi in that Calendar Quarter), then, in the following Calendar Quarter, for all Purchase Orders regarding such Miltenyi Product, the corresponding higher Discount level in accordance with the volume thresholds as defined in Exhibit F shall apply. Subject to Bellicum reaching the Minimum Purchase requirements in accordcance with Section 5.6 in a Calendar Year, for the subsequent Calandar Year, the Discount applicable for the first Discount volume threshold shall apply, beginning from the first Miltenyi Product ordered by Bellicum under this Agreement during such subsequent Calendar Year. + +(c) Purchase Price Adjustments. Miltenyi shall be entitled to modify the Purchase Price for any Miltenyi Product as set forth in Section 8.3(a) above and Exhibit E on or after the commencement of each Calendar Year during the Term after Contract Year 1 in accordance with this Section 8.4(c), provided that there shall not be more than one (1) Purchase Price increase with respect to the same Miltenyi Product in any given Contract Year during the Term. In case, after application of the applicable Discount, any Purchase Price increases [...***...] percent ([...***...]%) annually, then the Parties shall consult each other, negotiate in good faith and agree in writing upon an adaptation of the applicable Discount to stay within the capping of a [...***...] percent ([...***...]%) increase, except for cases when such Purchase Price increase is the result of a documented increase of more than [...***...] ([...***...]%) in the cost of any raw materials, packaging and/or other components used in the manufacture of Miltenyi Product and Miltenyi, at Bellicum's request, has provided reasonable documentation evidencing such changes in production costs. It is however expressly agreed between the Parties that the adjusted Purchase Price charged to Bellicum for Miltenyi Product supplied hereunder shall in no event exceed Miltenyi's then-current list prices for such Miltenyi Product as in effect in the country of destination or use of the applicable Miltenyi Product, as published from time to time in Miltenyi's applicable product catalogue. + +(d) Product Price Adjustments resulting from Changes. The Parties acknowledge and agree that the limitations on Product Price increases set forth in Section 8.3(c) above shall not apply to + +28 + + + + + +Miltenyi Biotec-Bellicum Supply Agreement (Execution Copy, March 27, 2019) + +Product Price adjustments resulting from a Required Change or a Bellicum-Requested Change pursuant to Section 3.2(d) hereof. + +8.5 Payment Terms. The payment terms for all payments made by Bellicum for purchased Miltenyi Products shall be as follows: + +(a) Except as otherwise provided herein, all undisputed and properly due payments are payable within [...***...] days of Bellicum's receipt of each invoice corresponding to a shipment of Miltenyi Products by Miltenyi, such invoices to be issued by Miltenyi or the applicable Miltenyi Affiliate in the Forecast Territory. + +(b) Bellicum shall make all payments by wire transfer or electronic fund transfer in immediately available funds to an account designated by Miltenyi or its local Affiliate in the Forecast Territory, as applicable. All payments by Bellicum to Miltenyi or its Affiliate (as the case may be) under this Agreement shall be made in the local currency that applies to the Miltenyi company that is assigned to fulfill the respective Purchase Order for Miltenyi Products. + +(c) All sums payable by Bellicum under this Agreement are stated exclusive of sales tax and VAT. + +(d) Without prejudice to any other right or remedy available to Miltenyi, Miltenyi reserves the right to assess a late fee equal to [...***...] percent ([...***...]%) per month, or if lower, the maximum amount permitted by Applicable Law, on all undisputed and properly due amounts not paid by Bellicum when due. Bellicum acknowledges that failure by Bellicum to comply with its payment obligations in this Article 8 shall constitute a material breach. + +(e) Except as expressly provided herein, Bellicum shall not exercise any right of setoff, net-out or deduction, take any credit, or otherwise reduce the balance owed to Miltenyi with respect to any payments under this Agreement, unless the Parties otherwise agree or until Bellicum has obtained a final and non-appealable judgment against Miltenyi in the amount asserted by Bellicum. + +8.6 Taxes. All payments made under this Agreement shall be free and clear of any and all taxes, duties, levies, fees or other charges, except for withholding taxes. Each Party shall be entitled to deduct from its payment to the other Party under this Agreement the amount of any withholding taxes required to be withheld, to the extent paid to the appropriate governmental authority on behalf of the other Party (and not refunded or reimbursed). Each Party shall deliver to the other Party, upon request, proof of payment of all such withholding taxes. Each Party shall provide reasonable assistance to the other Party in seeking any benefits available to such Party with respect to government tax withholdings by any relevant law, regulation or double tax treaty. + +8.7 Right to Suspend. Without prejudice to any other right or remedy available to Miltenyi, Miltenyi shall have the right to suspend its performance under this Agreement if and to the extent Bellicum materially fails to perform its payment obligations under this Agreement and fails to cure such failure within five Business Days after confirmed receipt of a notice of breach from Miltenyi. For the avoidance of doubt, the failure by Bellicum to make timely payments of any material, undisputed amount that is properly due Miltenyi under this Agreement shall constitute a material failure of Bellicum to perform its payment obligations under this Agreement. Without prejudice to any other right or remedy available to Bellicum, Bellicum shall have the right to suspend payment under this Agreement if and to the extent Miltenyi materially fails to perform its obligations under this Agreement. + +29 + + + + + +Miltenyi Biotec-Bellicum Supply Agreement (Execution Copy, March 27, 2019) + +ARTICLE 9 INSPECTION + +9.1 Facility Audits. Upon commercially reasonable notice (to be provided not less than [...***...] days in advance) and during Miltenyi's normal business hours, but not more often than once every [...***...] months, except for cause, during the Term of this Agreement, Bellicum or Bellicum's Licensees duly authorized agents, representatives or designees may inspect those portions of Miltenyi's Facilities that are used to manufacture, store or conduct testing of Miltenyi Products to determine compliance with Agreed Standards, Applicable Laws and the applicable Quality Agreement. Such representatives shall comply with the applicable rules and regulations for workers at such Facilities and shall enter into reasonable confidentiality and non-use agreements if so requested by Miltenyi, as a representative of Bellicum or such Licensee (and not in an individual capacity). All audits shall be conducted in a manner that is intended to minimize disruption to the operations at such Facilities. Miltenyi shall promptly address and correct any deviations from Agreed Standards, Applicable Laws and/or the provisions of the applicable Quality Agreement identified in connection with such inspections. + +9.2 Exempt Documentation. Miltenyi reserves the right, at its sole discretion, to exempt certain documentation from such audit described in Section 9.1 if and to the extent this is reasonably required in order to protect Miltenyi's trade secrets in Miltenyi Technology and/or other Miltenyi Intellectual Property Rights or Third Party Intellectual Property rights. If such exemption will have a material impact on the scope of a representative's inspection, the Parties will discuss in good faith other means to provide sufficient information to such representative. + +9.3 Inspection by Regulatory Authority. Miltenyi shall permit inspections of the Miltenyi Facility by Regulatory Authorities and shall respond to any notices or requests for information by Regulatory Authorities for any import or export license, registration or pending registration for manufacturing of Miltenyi Products during the Term of the Agreement. Miltenyi shall permit representatives of any applicable Regulatory Authority to access, at any reasonable time during normal business hours, any and all relevant records and information, personnel and facilities. To the extent that a Regulatory Authority raises any quality issue during or following a Regulatory Authority inspection that would Bellicumbe reasonably likely to adversely affect the suitability of the Miltenyi Products for any Permitted Use, Miltenyi shall promptly advise Bellicum in writing of such issue. The Parties will promptly give written notice to each other in advance of any scheduled inspection of Miltenyi's Facility by a Regulatory Authority. + +9.4 Cost of Audits and Inspections. If Bellicum or or Bellicum's Licensees conduct a Facility audit or inspection more than [...***...] in a [...***...] month period, and such additional audits are not "for cause" audits, then Bellicum and its Licensees (as applicable) shall reimburse Miltenyi for all reasonable out-of-pocket expenses reasonably incurred by Miltenyi as a direct result of Facility audits and/or inspections pursuant to Sections 9.1and 9.3 solely to the extent that they relate to the review of a Bellicum Product. For clarity, Bellicum shall not be liable, in any event, for any costs and expenses incurred by Miltenyi to correct deficiencies of Miltenyi manufacturing procedures in order to comply with: 1) Agreed Standards, Applicable Laws, the applicable Quality Agreement and Product Specifications; 2) inspection of a Miltenyi Product in general; and 3) inspection of a Third Party product. + +ARTICLE 10 INTELLECTUAL PROPERTY + +10.1 Existing Intellectual Property. Except as the Parties may otherwise expressly agree in writing, each Party shall continue to own all rights, including all Intellectual Property Rights, in and title to its Technology existing as of the Effective Date or developed during the Term but outside the scope of this Agreement, without conferring any interests therein on the other Party. Without limiting the generality of the preceding sentence, as between the Parties, the Parties acknowledge and agree that (i) Miltenyi owns and shall continue to own all rights (including all Intellectual Property Rights) in the Miltenyi Technology included in the Miltenyi Products supplied to Bellicum, and Bellicum shall not acquire any right, interest in or title to the Miltenyi Technology by virtue of this Agreement or otherwise, and (ii) Bellicum owns or + +30 + + + + + +Miltenyi Biotec-Bellicum Supply Agreement (Execution Copy, March 27, 2019) + +controls and shall continue to own and control all rights (including all Intellectual Property Rights) in the Bellicum Technology and Bellicum Products (and any Intellectual Property rights thereof), and Miltenyi shall not acquire any right, interest in or title to the Bellicum Technology and Bellicum Products (and any Intellectual Property rights thereof) by virtue of this Agreement or otherwise. + +10.2 Limited License. Miltenyi hereby grants to Bellicum, subject to all the terms and conditions of this Agreement, a limited non-exclusive right and license under the Miltenyi Technology incorporated or embodied in the Miltenyi Products supplied hereunder), solely to use such Miltenyi Products for the Permitted Use. The foregoing license shall be sub-licensable through multiple tiers to Licensees of Bellicum and to Bellicum's and its Licensees' respective Subcontractors (but not to Miltenyi Competitors) solely in conjunction with the use of such Miltenyi Products for the Permitted Use, provided however that Subcontractors shall not have the right to grant sublicenses under Miltenyi Technology). For the avoidance of doubt, the license granted to Bellicum under this Section 10.2 conveys no right to Bellicum, its Subcontractors or Licensees to use Miltenyi Technology to make, have made, import, have imported, offer for sale and/or sell any Miltenyi Product. + +10.3 Notification. Miltenyi will promptly notify Bellicum in writing of Miltenyi's receipt of any written claim or demand from any Third Party alleging that the practice of Miltenyi Technology infringes such Third Party's Intellectual Property Rights, or Miltenyi's receipt of written notice of the initiation of any legal action or other legal proceeding by any Third Party alleging that the practice of Miltenyi Technology infringes such Third Party's Intellectual Property Rights. + +10.4 Disclaimer. Except as otherwise expressly provided herein, nothing contained in this Agreement shall be construed or interpreted, either expressly or by implication, estoppel or otherwise, as: (i) a grant, transfer or other conveyance by either Party to the other of any right, title, license or other interest of any kind in any portion of its Technology or Intellectual Property Rights, or (ii) creating an obligation on the part of either Party to make any such grant, transfer or other conveyance. + +ARTICLE 11 WARRANTIES + +11.1 Miltenyi Product Warranty. Subject to Section 11.4 below, Miltenyi warrants and represents and covenants to Bellicum that Miltenyi Product Delivered hereunder will: + +(1) be manufactured, tested and Devilvered by Miltenyi in accordance with all applicable marketing approvals (if any), Agreed Standards, the terms of this Agreement and other Applicable Laws applicable at the place of manufacture to the manufacture, testing, and Delivery of Miltenyi Products by Miltenyi; + +(2) conform to Product Specifications at the time of Delivery; + +(3) meet quality and purity characteristics that Miltenyi purports or represents that such Miltenyi Product possesses through its assigned expiry date (shelf life); + +(4) be supplied under a quality system in accordance and compliance with the Quality Agreement, + +(5) not be adulterated or mislabeled under Applicable Laws, and + +(6) at the time of Delivery, be delivered with full title and be free and clear of any lien or encumbrance + +31 + + + + + +Miltenyi Biotec-Bellicum Supply Agreement (Execution Copy, March 27, 2019) + +(collectively, the "Miltenyi Product Warranty"). Bellicum's remedies and Miltenyi liability with respect to this Miltenyi Product Warranty are set forth in Section 7.6 and as otherwise expressly set forth in this Agreement. + +11.2 Additional Miltenyi Representations, Warranties, and Covenants. Miltenyi further represents and warrants and covenants to Bellicum that: + +(1) Miltenyi and its Affiliates and Subcontractors have the scientific, technical and other requisite competencies, and full right and power to perform the obligations set forth in this Agreement, and Miltenyi covenants that during the Term of this Agreement it will not enter into any obligation owed to a Third Party that would materially impair Miltenyi's ability to perform its obligations under this Agreement (including Miltenyi's obligation to supply Miltenyi Products to Bellicum); + +(2) To Miltenyi's knowledge and after due inquiry, on the Effective Date, Miltenyi owns all right, title, and interest in and to, or otherwise possesses all necessary rights and licenses under, the Miltenyi Technology and the Miltenyi Intellectual Property Rights, to perform its obligations under this Agreement; + +(3) As of the Effective Date, Miltenyi has not received any written communication from any Third Party alleging that the manufacture, use, sale, offer for sale or import of any Miltenyi Product infringes any Third Party patent or misappropriates any other Third Party Intellectual Property Rights; and + +(4) To Miltenyi's knowledge on the Effective Date, except with respect to the agreements listed on Exhibit D hereto there are no agreements between Miltenyi and a Third Party that would impose any payment obligation on Bellicum with respect to the use of Miltenyi Product in connection with the manufacture, use or sale of any Bellicum Product, or any Bellicum use within the Permitted Use. + +11.3 Bellicum Representations, Warranties, and Covenants. Bellicum represents, warrants and covenants to Miltenyi that: + +(1) Bellicum has the scientific, technical and other requisite competencies to determine the suitability of each Miltenyi Product purchased hereunder for the use to which Bellicum will put such Miltenyi Product; + +(2) As of the Effective Date, the Product Specifications are adequate to confirm the suitability of the Miltenyi Product (including its packaging and labelling) for the uses to which such Miltenyi Product will be put by Bellicum; + +(3) Bellicum will perform, and will cause its Subcontractors and Licensees to perform, sufficient incoming inspection of each supplied Miltenyi Product to comply with its obligations under this Agreement and under all Applicable Laws; and + +(4) Bellicum shall manufacture (and require and ensure that any Subcontractor or Licensee will manufacture) Bellicum Products using appropriate standards of care and quality in accordance with Applicable Laws and all requirements of Regulatory Authorities applicable to such manufacture; and + +(5) Bellicum shall use, and will cause its Subcontractors and Licensees to use, Miltenyi Products in accordance with all Applicable Laws and all requirements of Regulatory Authorities applicable to such use. + +32 + + + + + +Miltenyi Biotec-Bellicum Supply Agreement (Execution Copy, March 27, 2019) + +11.4 Disclaimer. + +(a) EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, NEITHER PARTY MAKES ANY REPRESENTATIONS OR EXTENDS ANY WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, AND EACH PARTY EXPRESSLY DISCLAIMS ALL IMPLIED WARRANTIES OF MERCHANTABILITY AND OF FITNESS FOR A PARTICULAR PURPOSE OR USE, NON- INFRINGEMENT, VALIDITY AND ENFORCEABILITY OF PATENTS, OR THE PROSPECTS OR LIKELIHOOD OF DEVELOPMENT OR COMMERCIAL SUCCESS OF PRODUCT. + +(b) Notwithstanding the generality of clause (a) above, Miltenyi hereby expressly disclaims any warranty that (i) the Miltenyi Products will be suitable for the development or manufacturing of a Bellicum Product, or (ii) Bellicum's intended use of the Miltenyi Products for the development or manufacturing of Bellicum Product will be approved by any Regulatory Authority, or (iii) the Miltenyi Products will otherwise be suitable in any respect for a Permitted Use or be commercially exploitable or profitable. + +(c) In no event shall Miltenyi or its Affiliates be responsible or liable for any non-conformance or other defects in the Miltenyi Product(s), including any non-conformance with the warranties in Section 11.1 and 11.2, to the extent resulting from improper use, handling, storage, transportation, or disposal of the Miltenyi Product(s) after Delivery thereof (including without limitation failure to use the Miltenyi Product(s) in accordance with the terms of this Agreement or the Product Specifications), accident, or from any other cause not attributable to defective workmanship or failure to meet the Miltenyi Product Warranty on the part of Miltenyi or its Affiliates. + +(d) Miltenyi's warranty under Section 11.2 does not relate to the potential uses of Miltenyi Products by Bellicum, its Subcontractors or Licensees in relation to Third Party rights, even if foreseeable. Bellicum acknowledges that there may be proprietary rights owned by Third Parties that may be necessary or desirable for the use of Miltenyi Products in connection with processes for the production and/or use of Bellicum Products, and Bellicum agrees that (i) securing access to such Third Party rights regarding such use of Miltenyi Products in the manufacture or use of a Bellicum Product is Bellicum's responsibility, and (ii) neither Miltenyi nor any of its Affiliates has any responsibility or liability with respect to any such Third Party proprietary rights regarding such use of Miltenyi Products in the manufacture or use of a Bellicum Product. + +11.5 Remedies. + +(a) Miltenyi's sole obligation, and Bellicum's sole and exclusive remedy for breach of the Miltenyi Product Warranty in Section 11.1, shall be as set forth in Article 7, including replacement or refund in accordance with Section 7.6, provided that Miltenyi shall pay reasonable return freight and shipping charges. + +(b) In the event of breach of Miltenyi's warranties in Section 11.2 due to an actual or alleged infringement of a Third Party's Intellectual Property Rights due to Miltenyi's manufacture or sale, or Bellicum's import, export or use of any Miltenyi Product, Miltenyi shall at its option use [...***...] to either promptly and diligently negotiate a license from such Third Party at its own expense (including the payment due to the Third Party for such license) or modify the relevant Miltenyi Product(s) so that the supplied Miltenyi Product(s) are no longer infringing but have equivalent functionality. If Miltenyi fails to negotiate such license or modify the applicable Miltenyi Product, and to the extent Bellicum reasonably determines, following consultation with Miltenyi, that it is obligated to take a royalty-bearing license under any Third Party Intellectual Property Rights in order to avoid infringement of such Third Party Intellectual Property Rights with respect to the use of the applicable Miltenyi Product, then Bellicum shall have the right to offset any payment actually made to the Third Party for such license in any Contract Year against any Product Price payable to Miltenyi for the applicable Miltenyi Product in the same + +33 + + + + + +Miltenyi Biotec-Bellicum Supply Agreement (Execution Copy, March 27, 2019) + +Contract Year (on a Miltenyi Product-by-Miltenyi Product basis), under the proviso that Bellicum provides Miltenyi with reasonably satisfactory evidence of such Third Party royalties payment. The total amount of any reduction(s) pursuant to this Section 11.5(b) shall in no event exceed [...***...] percent ([...***...]%) of the Product Price payable for the applicable Miltenyi Product in that Contract Year (with the right to carry forward any unused offset). + +(c) The foregoing shall be Bellicum's sole and exclusive remedy and Miltenyi's sole obligation with respect to claims that any Miltenyi Product fails to comply with the Miltenyi Product Warranty or the warranties in Section 11.2. Miltenyi will not in any event be liable for increased manufacturing costs, downtime costs, purchase of substitute products, lost profits, revenue, or goodwill, or any other indirect incidental, special, or consequential damages caused by a breach of the Miltenyi Product Warranty or the warranties in Section 11.2. + +ARTICLE 12 LIMITATION OF LIABILITY + +12.1 Limitation of Liability. Except for liability for (i) breach of the confidentiality obligations described in Article 14, (ii) misappropriation or infringement by a Party of the other Party's Intellectual Property Rights, or (iii) gross negligence or willful misconduct: + +(a) IN NO EVENT SHALL A PARTY BE LIABLE FOR ANY PUNITIVE, EXEMPLARY, INDIRECT, INCIDENTAL, SPECIAL, OR CONSEQUENTIAL DAMAGES OR EXPENSES, INCLUDING LOSS OF PROFITS, REVENUE, DATA, OR USE, WHETHER IN AN ACTION IN CONTRACT OR TORT (INCLUDING ERRORS OR OMISSIONS OR BREACH OF WARRANTY), EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES; + +(b) EACH PARTY'S MAXIMUM LIABILITY FOR ANY DAMAGES FOR BREACH OF THIS AGREEMENT SHALL BE LIMITED TO DIRECT AND ACTUAL DAMAGES. IN NO ONE EVENT SHALL EITHER PARTY'S AGGREGATE LIABILITY FOR DAMAGES OR LOSSES UNDER THIS AGREEMENT EXCEED THE AGGREGATE AMOUNT OF THE PRODUCT PRICES PAID BY BELLICUM FOR THE MILTENYI PRODUCT(S) DURING THE TWELVE (12) MONTH PERIOD IMMEDIATELY PRECEDING THE EVENT GIVING RISE TO SUCH LIABILITY; AND FURTHER PROVIDED THAT SUCH AGGREGATE LIABILITY DURING SUCH PERIOD ALSO SHALL NOT EXCEED THE AMOUNT OF SUCH PARTY'S INSURANCE COVERAGE FOR SUCH AGGREGATE LIABILITY. + +12.2 No Liability for Clinical Trials. Bellicum shall have sole responsibility that any Bellicum Product is safe for human use, and Bellicum hereby assumes sole risk and liability arising out of or in connection with the use of Bellicum Products in clinical trials by or on behalf of Bellicum or commercialization of Bellicum Products (including product liability with respect thereto). + +ARTICLE 13 INDEMNIFICATION; INSURANCE + +13.1 Indemnification by Miltenyi. Miltenyi will save, defend and hold harmless Bellicum, its Licensees and Subcontractors and their respective officers, directors, employees, consultants and agents (collectively, "Bellicum Indemnitees") from and against any and all liability, damage, loss or expense (collectively, "Losses") to which any such Bellicum Indemnitee may become subject as a result of any claim, demand, action or other proceeding by any Third Party to the extent such Losses arise out of: (i) the material breach by Miltenyi of any representation, warranty, covenant or agreement made by it under this Agreement; or (ii) the gross negligence or willful misconduct of any Miltenyi Indemnitee (as defined below); except, in each case, to the extent that such Losses result from the material breach by Bellicum of any representation, warranty, covenant or agreement made by it under this Agreement or the gross negligence or willful misconduct of any Bellicum Indemnitee. In the event Bellicum seeks indemnification under this Section + +34 + + + + + +Miltenyi Biotec-Bellicum Supply Agreement (Execution Copy, March 27, 2019) + +13.1, Bellicum shall (a) notify Miltenyi in writing of such Third Party claim as soon as reasonably practicable after it receives notice of the claim, (b) provided that Miltenyi is not contesting the indemnity obligation, permit Miltenyi to assume direction and control of the defense of the claim (including the right to settle the claim solely for monetary consideration), provided further that Miltenyi shall act reasonably and in good faith with respect to all matters relating to the settlement or disposition of any claim as the settlement or disposition relates to parties being indemnified under this Section 13.1, and (c) cooperate as requested (at Miltenyi's expense) in the defense of the claim; but provided always that Miltenyi may not settle any such claim or otherwise consent to an adverse judgment or order in any relevant action or other proceeding or make any admission as to liability or fault without the prior express written permission of an authorized representative of Bellicum. + +13.2 Indemnification by Bellicum. Bellicum will save, defend and hold harmless Miltenyi, its Affiliates, Subcontractors, officers, directors, employees, consultants and agents (collectively, "Miltenyi Indemnitees") from and against any and all Losses to which any such Miltenyi Indemnitee may become subject as a result of any claim, demand, action or other proceeding by any Third Party to the extent such Losses arise out of: (i) the material breach by Bellicum of any representation, warranty, covenant or agreement made by it under this Agreement; (ii) the gross negligence or willful misconduct of any Bellicum Indemnitee (as defined above); or (iii) the development, manufacture, use, handling, storage, sale or other disposition of any Bellicum Product by or on behalf of Bellicum; except, in each case, to the extent such Losses result from the material breach by Miltenyi of any representation, warranty, covenant or agreement made by it under this Agreement or the gross negligence or willful misconduct of any Miltenyi Indemnitee. In the event Miltenyi seeks indemnification under this Section 13.2, Miltenyi shall (a) notify Bellicum in writing of such Third Party claim as soon as reasonably practicable after it receives notice of the claim, (b) provided that Bellicum is not contesting the indemnity obligation, permit Bellicum to assume direction and control of the defense of the claim (including the right to settle the claim solely for monetary consideration), provided further that Bellicum shall act reasonably and in good faith with respect to all matters relating to the settlement or disposition of any claim as the settlement or disposition relates to parties being indemnified under this Section 13.2, and (c) cooperate as requested (at Bellicum's expense) in the defense of the claim; but provided always that Bellicum may not settle any such claim or otherwise consent to an adverse judgment or order in any relevant action or other proceeding or make any admission as to liability or fault without the prior express written permission of Miltenyi. + +13.3 Survival of Indemnification Obligations. The provisions of this Article 13 shall survive the expiration or termination of this Agreement for any reason whatsoever. + +13.4 Insurance. Each Party will maintain at its sole cost and expense, an adequate amount of commercial general liability and product liability insurance throughout the Term and for a period of five (5) years thereafter, to protect against potential liabilities and risk arising out of products supplied or activities to be performed under this Agreement and any Quality Agreement related hereto upon such terms (including coverages, deductible limits and self-insured retentions) as are customary in the industry for the products supplied or activities to be conducted by such Party under this Agreement. Subject to the preceding sentence, such Bellicum liability insurance or self-insurance program will insure against personal injury, physical injury or property damage arising out of the pre-clinical, clinical and commercial manufacture, sale, use, distribution or marketing of Bellicum Product, and such Miltenyi liability insurance or self-insurance program will insure against personal injury, physical injury or property damage arising out of use of a Miltenyi Product in the manufacture of a Bellicum Product. In addition, from time to time during the Term, each Party shall increase their levels of insurance coverage if reasonably deemed prudent by such Party in light of the overall products supplied and/or activities performed under this Agreement. Each Party shall provide the other Party with written proof of the existence of such insurance upon reasonable written request. + +35 + + + + + +Miltenyi Biotec-Bellicum Supply Agreement (Execution Copy, March 27, 2019) + +ARTICLE 14 CONFIDENTIALITY + +14.1 Definition. As used in this Agreement, the term "Confidential Information" means any information disclosed by one Party (the "Disclosing Party") to the other Party (the "Receiving Party") pursuant to this Agreement which is (a) in written, graphic, machine readable or other tangible form and is marked "Confidential", "Proprietary" or in some other manner to indicate its confidential nature, or (b) oral information disclosed pursuant to this Agreement, provided that such information is designated as confidential at the time of disclosure and reduced to a written summary by the Disclosing Party, within thirty (30) calendar days after its oral disclosure, which is marked in a manner to indicate its confidential nature and delivered to the Receiving Party. Notwithstanding the foregoing, the Disclosing Party's failure to so mark any of its Confidential Information, whether disclosed in written, graphic, machine readable or other tangible form, or its failure to designate as confidential and reduce to writing any Confidential Information disclosed orally, shall not relieve the Receiving Party of its obligations hereunder with respect to such Confidential Information if its confidential nature would be apparent to a reasonable person in the biotechnology or biopharmaceutical industry, based on the subject matter of such Confidential Information or the circumstances under which it is disclosed. + +14.2 Non-Disclosure and Non-Use. During the Term and for five (5) years thereafter, each of Miltenyi and Bellicum shall keep Confidential Information of the other Party in strict confidence and shall not (i) use the other Party's Confidential Information for any use or purpose except as expressly permitted under this Agreement, the Quality Agreement or as otherwise authorized in writing in advance by the other Party, or (ii) disclose the other Party's Confidential Information to anyone other than those of its Affiliates, Subcontractors, directors, officers, employees, agents, contractors, collaborators and consultants, and in the case of Bellicum, its Licensees (collectively, "Authorized Representatives") who need to know such Confidential Information for a use or purpose expressly permitted under this Agreement. Each Receiving Party shall take reasonable measures to protect the secrecy of and avoid disclosure and unauthorized use of the Confidential Information of the Disclosing Party. Without limiting the foregoing, each Receiving Party shall take at least those measures that it takes to protect its own confidential information of a similar nature (but not less than reasonable measures) and shall ensure that any Authorized Representative of the Receiving Party who is permitted access to Confidential Information of the Disclosing Party pursuant to clause (ii) in the first sentence of this Section 14.2 is contractually or legally bound by obligations of non-disclosure and non-use in scope and content at least as protective of the Disclosing Party's Confidential Information as the provisions hereof prior to any disclosure of the Disclosing Party's Confidential Information to such Authorized Representative. The Receiving Party shall be responsible for any breach of this Agreement by its Authorized Representatives. + +14.3 Exceptions. Notwithstanding the above, a Receiving Party shall have no obligations under this Article 14 with regard to any information of the Disclosing Party which the Receiving Party can demonstrate through competent proof: (a) was generally known and available in the public domain at the time it was disclosed to the Receiving Party or becomes generally known and available in the public domain through no act or omission of the Receiving Party or its Authorized Representatives; (b) can be documented as previously known by the Receiving Party prior to disclosure thereof by the Disclosing Party; (c) is disclosed with the prior written approval of the Disclosing Party; (d) was independently developed by the Receiving Party without any use of the Disclosing Party's Confidential Information; or (e) becomes known to the Receiving Party on a non-confidential basis from a source other than the Disclosing Party without breach of this Agreement by the Receiving Party; provided (i) only the specific information that meets the exclusions shall be excluded, and not any other information that happens to appear in proximity to such excluded portions (for example, a portion of a document may be excluded without affecting the confidential nature of those portions that do not themselves qualify for exclusion) or that happens to be disclosed at the same time or in connection therewith; and (ii) specific Confidential Information shall not be deemed to be known, disclosed, in the public domain nor in Receiving Party's possession merely because of broader or related information being known, disclosed, in the public domain or in Receiving Party's possession, nor + +36 + + + + + +Miltenyi Biotec-Bellicum Supply Agreement (Execution Copy, March 27, 2019) + +shall combinations of elements or principles be considered to be known, disclosed, in the public domain nor in Receiving Party's possession merely because individual elements thereof are known, disclosed, in the public domain or in Receiving Party's possession. + +14.4 Permitted Disclosure. + +(a) Compelled Disclosure. Notwithstanding the provisions of this Article 14, nothing in this Agreement shall prevent the Receiving Party from disclosing Confidential Information of the Disclosing Party to the extent the Receiving Party is legally required or compelled to do so by any governmental investigative or judicial agency or body pursuant to proceedings over which such agency or body has jurisdiction; provided, however, that prior to making any such required or compelled disclosure, the Receiving Party shall: (i) assert the confidential nature of the Confidential Information to such agency or body; (ii) promptly notify the Disclosing Party in writing of such order or requirement to disclose; and (iii) cooperate fully with the Disclosing Party in protecting against or limiting any such disclosure and/or obtaining a protective order, confidential treatment and/or any other remedy narrowing the scope of the required or compelled disclosure and protecting its confidentiality. In the event that a protective order, confidential treatment and/or other remedy is not obtained, or if the Disclosing Party waives compliance with the provisions of this Agreement as applied to such required or compelled disclosure, then the Receiving Party may, without liability, disclose the Disclosing Party's Confidential Information to the extent that it is legally required or compelled to disclose. The Receiving Party will furnish only that portion of the Disclosing Party's Confidential Information that is legally required to disclose and will make all reasonable and diligent efforts to obtain reliable assurances that confidential treatment will be afforded to Confidential Information so disclosed. Disclosure of Confidential Information pursuant to this Section 14.4(a) shall not alter the character of that information as Confidential Information hereunder. + +(b) Authorized Disclosure. Notwithstanding the provisions of this Article 14, each Party may disclose the terms of this Agreement (i) in connection with the requirements of an initial public offering or securities filing; (ii) in confidence, to accountants, attorneys, other professional advisors, banks, and financing sources and their advisors; (iii) in confidence, in connection with the enforcement of this Agreement or rights under this Agreement; or (iv) in confidence, in connection with a merger or acquisition or proposed merger or acquisition, or a sale or proposed sale of its assets or business, or the like. + +14.5 Publicity. Each Party may disclose the existence of this Agreement, but agrees that the terms and conditions of this Agreement will be treated as Confidential Information of the other Party. Except as otherwise required by Applicable Laws or regulations, neither Party shall make any public announcement or press release regarding this Agreement or any terms thereof, or otherwise use the name, logos, trademarks or products of the other Party in any publication, without the other Party's express prior written consent. + +14.6 Remedies. The Parties acknowledge and agree that the provisions of this Article 14 are necessary for the protection of the business and goodwill of the Parties and are considered by the Parties to be reasonable for such purpose. Each Party agrees that any violation of this Article 14 by it or its Affiliate, or Subcontractors may cause substantial and irreparable harm to the other Party and, therefore, in the event of any violation or threatened violation of this Article 14 by the Receiving Party, the Disclosing Party shall be entitled to seek specific performance and other injunctive and equitable relief in addition to any other legal remedies available. + +ARTICLE 15 TERM AND TERMINATION + +15.1 Term. This Agreement shall enter into force on the Effective Date. The Agreement shall have an initial term of ten (10) years commencing from the Effective Date and ending on the tenth (10th) anniversary thereof (the "Initial Term"), unless earlier terminated by either Party in accordance with the provisions of Section 15.2 or Section 15.3. Thereafter, Bellicum shall have consecutive separate options to extend the Term for successive renewal terms of five (5) years each (each, a "Renewal Term", and + +37 + + + + + +Miltenyi Biotec-Bellicum Supply Agreement (Execution Copy, March 27, 2019) + +collectively with the Initial Term, the "Term"). Provided Bellicum is not then in default with its material obligations hereunder, Bellicum may exercise each such renewal option by giving written notice to Miltenyi not later than six (6) months prior to the expiration of the current Term. + +15.2 Termination for Cause. Notwithstanding Section 15.1 either Party may, in addition to any other remedies available to it under this Agreement or by law, terminate this Agreement or any particular Module as follows: + +(a) Termination for Material Breach. A Party may terminate this Agreement or a particular Module by providing written notice to the other Party describing the other Party's material breach and demanding its cure, in the event that the other Party materially breaches a material provision of this Agreement or such Module and fails to cure such breach within thirty (30) days of receipt of such notice of the breach or, if the breach is not susceptible to cure within such thirty (30) day period, if the breaching Party fails to submit to the notifying Party and implement within such thirty (30) day period a written remedial action plan reasonably satisfactory to the notifying Party that sets out appropriate corrective action for remedying such breach promptly after such 30-day period expires. + +(b) Termination for Bankruptcy or Insolvency. A Party may terminate this Agreement upon thirty (30) days' written notice to the other Party in the event the other Party shall have become insolvent or bankrupt, or shall have made an assignment for the benefit of its creditors, or there shall have been appointed a trustee or receiver of the other Party, or if any case or proceeding shall have been commenced or other action taken by or against the other Party in bankruptcy or seeking reorganization, liquidation, dissolution, winding- up, arrangement, composition or readjustment of its debts or any relief under any bankruptcy, insolvency, reorganization or other similar act or law of any jurisdiction now or hereinafter in effect that is not dismissed within thirty (30) days after commencement. + +(c) Termination for Force Majeure. A Party may terminate this Agreement or a particular Module upon providing written notice to the other Party if the other Party is affected by a Force Majeure event which cannot be removed, overcome or abated within three (3) continuous months (or within such other period as the Parties jointly shall agree in writing) from the initial date of such Force Majeure event. + +15.3 Discontinuance or Suspension of Bellicum Product Program or Without Cause Termination. Bellicum may terminate this Agreement or a particular Module upon ninety (90) days written notice to Miltenyi: 1) if Bellicum, in its sole and absolute discretion, discontinues or indefinitely suspends the development and/or commercialization of the Bellicum Product(s) or 2) without cause for any reason or no reason. Upon the termination of this Agreement or such Module pursuant to this Section 15.3, Bellicum's sole obligation shall be for it to make payment of all undisputed and properly due amounts payable for Miltenyi Product ordered prior to the effective date of such termination of each terminated Module, including any Purchase Order to be made by Bellicum in connection with Bellicum's then- outstanding obligation to purchase quantities of Miltenyi Product forecasted with respect to an applicable Firm Zone. For clarity, termination of this Agreement or any Module pursuant to this Section 15.3 shall not release Bellicum from its payment obligations with respect to the quantities set forth in any Purchase Orders or quantities forecasted for any Firm Zone. + +15.4 Expiration or termination of this Agreement or a particular Module for any reason shall not release either Party from liability accrued under this Agreement or such Module, respectively, prior to such expiration or termination, nor preclude either Party from pursuing any rights or remedies accrued prior to such expiration or termination or accrued at law or in equity with respect to any uncured material breach of this Agreement or such Module. + +15.5 The termination of this Agreement or a particular Module shall not operate to relieve Bellicum from its obligation to pay undisputed and properly due amounts of (a) the Product Price of all + +38 + + + + + +Miltenyi Biotec-Bellicum Supply Agreement (Execution Copy, March 27, 2019) + +quantities of Miltenyi Products (i) delivered in accordance with this Agreement, such Module(s) and the applicable Quality Agreement up to the effective date of termination and (ii) to be delivered under outstanding Purchase Orders accepted by Miltenyi prior to the date of notice of termination (including the Ordered Quantities) or (iii) forecasted for any Firm Zone in the most recent applicable Monthly Forecast; (b) any Upfront Fee payable under Section 8.1 and any earned Milestone Fee payable under Section 8.2 hereof; and (c) all other undisputed and properly due fees and/or expenses owed to Miltenyi in accordance with this Agreement, such Module(s) and the applicable Quality Agreement prior to the date of notice of termination; provided, however, that in the event of termination of this Agreement or such Module(s) by Bellicum pursuant to Section 15.2 (Termination for Cause), Bellicum shall not be responsible for payments relating to any portion of the Forecast applicable to any period after the effective date of termination. All amounts paid under Sections 8.1 through 8.3 shall be non-refundable once paid. + +15.6 Post Termination. Upon the termination or expiry of this Agreement, each Party shall promptly return to the other Party or destroy, at the other Party's request, + +(a) any and all Confidential Information of the other Party then in its possession or control, except if such information is covered under surviving license rights, and further provided that each Party may keep one (1) copy of such information in its legal archives for regulatory compliance purposes and in order to determine its ongoing obligations hereunder, including in connection with legal proceedings; and such additional copies of or any computer records or files containing such Confidential Information that have been created solely by the Receiving Party's automatic archiving and back-up procedures, to the extent created and retained in a manner consistent with the Receiving Party's standard archiving and back-up procedures, but not for any other use or purpose; and + +(b) any and all remaining materials and capital equipment of the other Party then in its possession or control. + +15.7 Survival. Other than obligations which have accrued and are outstanding as of the date of any expiration or termination of this Agreement, and except as otherwise expressly provided in this Agreement or the Quality Agreement or as otherwise mutually agreed by the Parties in writing, all rights granted and obligations undertaken by the Parties hereunder shall terminate immediately upon the termination or expiration of this Agreement, subject to Section 15.4 above and except for the following which shall survive according to their terms: Section 2.2 (Permitted Use); Section 2.7 (Subcontracting by Bellicum); Article 10 (Intellectual Property); Article 11 (Warranty); Article 12 (Limitation of Liability); Article 13 (Indemnification; Insurance); Article 14 (Confidentiality and Non-disclosure); Section 15.7 (Post-termination); Section 15.7 (Survival); Article 16 (Notices); Article 17 (Assignment); Article 19 (Dispute Resolution and Applicable Law); and Article 20 (Miscellaneous); and any and all rights and obligations of the Parties thereunder, as well as any other provision hereunder which by its nature is intended to survive expiration or termination of this Agreement. + +ARTICLE 16 NOTICES. + +All notices, demands, requests, consents, approval and other communications required or permitted to be given under this Agreement shall be in writing and will be delivered personally, or mailed by registered or certified mail, return receipt requested, postage prepaid, or sent by reputable overnight courier service, confirmed by mailing as described above at the address set forth below or to such other address as any Party may give to the other Party in writing for such purpose in accordance with this Article 16: + +39 + + + + + +Miltenyi Biotec-Bellicum Supply Agreement (Execution Copy, March 27, 2019) + +If to Miltenyi: Miltenyi Biotec GmbH Friedrich-Ebert-Str. 68 51429 Bergisch Gladbach Germany Attn: Managing Director Fax: [...***...] + +With copy to (for legal matters): Miltenyi Biotec GmbH Friedrich-Ebert-Str. 68 51429 Bergisch Gladbach Germany Attn: General Counsel Fax: [...***...] + +If to Bellicum Bellicum Pharmaceuticals, Inc. Life Science Plaza 2130 West Holcombe Boulevard, Suite 800 Houston, Texas 77030 Attn: Chief Business Officer Fax: [...***...] + +With a copy to (for legal matters): + +Bellicum Pharmaceuticals, Inc. Life Science Plaza 2130 West Holcombe Boulevard, Suite 800 Houston, Texas 77030 Attn: General Counsel Fax: [...***...] + +All such communications, if personally delivered on a Business Day, will be conclusively deemed to have been received by a Party hereto and to be effective when so delivered, or if sent by overnight courier service on the earlier of the Business Day when confirmation of delivery is provided by such service or when actually received by such Party, or if sent by certified or registered mail on the third Business Day after the Business Day on which deposited in the mail. Each Party will use [...***...] to provide additional notice by email but the failure to provide such notice will not affect the validity of any such notice. Either Party may change its address by giving the other notice thereof in the manner provided herein. + +ARTICLE 17 ASSIGNMENT + +17.1 This Agreement shall not be assignable, pledged or otherwise transferred, nor may any right or obligations hereunder be assigned, pledged or transferred, by either Party to any Third Party without the prior written consent of the other Party, which consent, in the event of a financing transaction by the Party asking for consent, shall not be unreasonably withheld, conditioned or delayed by the other Party; except either Party may assign or otherwise transfer this Agreement without the consent of the other Party to an entity that acquires all or substantially all of the business or assets of the assigning Party relating to the subject matter of this Agreement, whether by merger, acquisition or otherwise; provided that intellectual property rights that are owned or held by the acquiring entity or person to such transaction (if other than one of the Parties to this Agreement) shall not be included in the technology licensed hereunder. In addition, either Party shall have the right to assign or otherwise transfer this Agreement to an Affiliate upon written notice to the non-assigning Party; provided, however, the assigning or transferring Party shall continue to remain liable + +40 + + + + + +Miltenyi Biotec-Bellicum Supply Agreement (Execution Copy, March 27, 2019) + +for the performance of this Agreement by such Affiliate. Upon any such assignment, all of the terms and provisions of this Agreement binding upon, or inuring to the benefit of, the assigning Party shall be binding on, and inure to the benefit of, its assignee, whether so expressed in the assignment or not. Nothing herein shall be deemed to prohibit Miltenyi or any of its Affiliates from granting a security interest in this Agreement and any rights hereunder to any Third Party in connection with any financing transaction to the extent provided under (and subject to the restrictions on the rights of secured parties contained in) Applicable Laws. In addition, Miltenyi or any Affiliate of Miltenyi shall have the right to sell, assign, pledge or otherwise transfer any accounts and payment intangibles in connection with any financing transaction. Subject to the foregoing, this Agreement shall inure to the benefit of each Party, its successors and permitted assigns. Any assignment of this Agreement in contravention of this Article 17 shall be null and void. + +ARTICLE 18 FORCE MAJEURE + +18.1 Neither Party will be liable to the other Party on account of any loss or damage resulting from any delay or failure to perform all or any part of this Agreement if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the reasonable control and without negligence of the Parties ("Force Majeure Event"). Such events, occurrences, or causes will include acts of God, strikes, lockouts, acts of war, riots, civil commotion, terrorist acts, epidemic, failure or default of public utilities or common carriers, destruction of facilities or materials by fire, explosion, earthquake, storm or the like catastrophe, and failure of plant or machinery (provided that such failure could not have been prevented by the exercise of skill, diligence and prudence that would be reasonably and ordinarily expected from a skilled and experienced person engaged in the same type of undertaking under the same or similar circumstances), but the inability to meet financial obligations is expressly excluded. + +18.2 The Party affected by a Force Majeure Event shall inform promptly the other Party in writing of the Force Majeure Event's occurrence, anticipated duration and cessation. The Party giving such notice shall thereupon be excused from such of its obligations hereunder as it is thereby disabled from performing for so long as it is so disabled, provided, however, that such affected Party commences and continues to take reasonable and diligent actions to cure such cause. + +ARTICLE 19 APPLICABLE LAWS; JURISDICTION + +19.1 Governing Law. This Agreement shall be governed in all respects by, and construed and enforced in accordance with, the laws of the State of New York, USA, without regard to the conflict of law provisions thereof or the United Nations Convention on Contracts for the International Sale of Goods; provided, however, that any dispute relating to the scope, validity, enforceability or infringement of any Intellectual Property Right will be governed by, and construed and enforced in accordance with, the substantive laws of the jurisdiction in which such Intellectual Property Right applies. + +19.2 Dispute Resolution Procedures. Should any dispute, claim or controversy arise between the Parties relating to the validity, interpretation, existence, performance, termination or breach of this Agreement (collectively, a "Dispute"), the Parties shall use their best efforts to resolve the Dispute by good faith negotiations, first between their respective representatives directly involved in that Dispute and the Alliance Managers for a period of thirty (30) days, and then, if necessary, between vice presidents of the Parties for an additional fifteen (15) days, and then, if necessary, between Chief Executive Officers of the Parties for an additional five (5) Business Days. Any such Dispute not satisfactorily settled by negotiation in accordance with the foregoing process, either Party may submit such Dispute to a court of competent jurisdiction in accordance with subsection (a) below; provided that nothing in this Section 19.2 will preclude either Party from seeking injunctive relief in any court of competent jurisdiction in accordance with Section (a) below. + +(a) Submission to Jurisdiction; Waiver of Venue. Each Party hereto agrees that any action, proceeding or claim it commences against the other Party pursuant to this Agreement shall be brought + +41 + + + + + +Miltenyi Biotec-Bellicum Supply Agreement (Execution Copy, March 27, 2019) + +in the courts of the United States for the Southern District of New York, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement, or for recognition or enforcement of any judgment. Each Party hereby irrevocably and unconditionally submits to the jurisdiction of the State of New York Courts and irrevocably and unconditionally waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of the venue of any such suit, action or proceeding brought in any such court, any claim that any such suit, action or proceeding brought in such a court has been brought in an inconvenient forum and the right to object, with respect to any such suit, action or proceeding brought in any such court, that such court does not have jurisdiction over such Party. Each Party agrees that a final non-appealable judgment in any such suit, action or proceeding in such a court shall be conclusive and binding and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by Applicable Law. + +(b) Waiver of Jury Trial. Due to the high costs and time involved in commercial litigation before a jury, THE PARTIES HEREBY WAIVE ALL RIGHT TO A JURY TRIAL WITH RESPECT TO ANY AND ALL ISSUES IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT. + +19.3 Injunctive Relief. Each Party acknowledges that its breach of its obligations under this Agreement may result in immediate and irreparable harm to the other Party, for which there may be no adequate remedy at law. Therefore, in the event of a breach or threatened breach, the non-breaching Party may, in addition to other remedies, immediately seek from any court of competent jurisdiction injunctive relief (including a temporary restraining order, preliminary injunction or other interim equitable relief) prohibiting the breach or threatened breach or compelling specific performance, without the necessity of proving actual damages. Such right to injunctive relief as provided for in this paragraph is in addition to, and is not in limitation of, whatever remedies either Party may be entitled to as a matter of law or equity, including money damages. The Parties agree to waive the requirement of posting a bond in connection with a court's issuance of an injunction. + +ARTICLE 20 MISCELLANEOUS + +20.1 Governing Further Actions. Each Party will execute, acknowledge and deliver such further instruments, and do all such other acts, as may be necessary or appropriate in order to carry out the purposes and intent of the Agreement. + +20.2 Independent Contractors. The relationship between Miltenyi and Bellicum created by this Agreement is one of independent contractors. Neither Party shall have the power or authority to bind or obligate the other Party, or purport to take on any obligation or responsibility, or make any representations, warranties, guarantees or endorsements to anyone, on behalf of the other Party, except as expressly permitted in this Agreement. + +20.3 Entire Agreement and Amendment. This Agreement (including all Exhibits attached hereto, which are incorporated herein by reference, and as amended from time to time in accordance with the provisions hereof) and any Quality Agreement(s) sets forth all of the covenants, promises, agreements, warranties, representations, conditions and understandings between the Parties hereto with respect to the subject matter hereof, and constitutes and contains the complete, final, and exclusive understanding and agreement of the Parties with respect to the subject matter hereof, and cancels, supersedes and terminates all prior agreements and understanding between the Parties with respect to the subject matter hereof. There are no covenants, promises, agreements, warranties, representations conditions or understandings, whether oral or written, between the Parties other than as set forth herein or in a Quality Agreement. No subsequent alteration, amendment, change or addition to this Agreement (including all Exhibits attached hereto) shall be binding upon the Parties hereto unless reduced to writing and signed by the respective authorized officers of the Parties. + +42 + + + + + +Miltenyi Biotec-Bellicum Supply Agreement (Execution Copy, March 27, 2019) + +20.4 Severability and Headings. If any term, condition or provision of this Agreement is held to be invalid, unlawful or unenforceable to any extent by a court of competent jurisdiction, then the Parties will negotiate in good faith a substitute, valid and enforceable provision that most nearly effects the Parties' intent and the Parties agree to be bound by the mutually agreed substitute provision. If the Parties fail to agree on such an amendment, such invalid term, condition or provision will be severed from the remaining terms, conditions and provisions, which will continue to be valid and enforceable to the fullest extent permitted by law. Headings used in this Agreement are provided for convenience only, and shall not in any way affect the meaning or interpretation of this Agreement. + +20.5 No Waiver. Any waiver of the provisions of this Agreement or of a Party's rights or remedies under this Agreement must be in writing to be effective. Failure, neglect or delay by a Party to enforce the provisions of this Agreement or its rights or remedies at any time, will not be construed as a waiver of such Party's rights under this Agreement and will not in any way affect the validity of the whole or any part of this Agreement or prejudice such Party's right to take subsequent action. No exercise or enforcement by either Party of any right or remedy under this Agreement will preclude the enforcement by such Party of any other right or remedy under this Agreement or that such Party is entitled by law to enforce. + +20.6 Negotiated Terms. The Parties agree that the terms and conditions of this Agreement are the result of negotiations between the Parties and that this Agreement shall not be construed in favor of or against any Party by reason of the extent to which any Party or its professional advisors participated in the preparation of this Agreement. + +20.7 Counterparts. This Agreement may be executed in any number of counterparts, each of which need not contain the signature of more than one Party but all such counterparts taken together shall constitute one and the same agreement, and may be executed through exchange of original signatures or electronic copies (PDF). + +[Remainder of this page intentionally left blank. Signature page follows.] + +43 + + + + + +Miltenyi Biotec-Bellicum Supply Agreement (Execution Copy, March 27, 2019) + +IN WITNESS WHEREOF, the Parties, having read the terms of this Agreement and intending to be legally bound thereby, do hereby execute this Agreement. + +MILTENYI BIOTEC GMBH + +By: /s/ Stefan Miltenyi + +Name: Stefan Miltenyi + +Title: CEO and Founder + +BELLICUM PHARMACEUTICALS, INC. + +By: /s/ Rick Fair + +Name: Rick Fair + +Title: CEO + +44 + + + + + +MILTENYI & BELLICUM Supply Agreement (Execution CopyMarch 27, 2019) + +List of EXHIBITS + +EXHIBIT A Modules + +EXHIBIT B List of Miltenyi Products + +EXHIBIT C Forecast Format + +EXHIBIT D [...***...] Sublicense Royalties and/or License Fees + +EXHIBIT E Product Prices + +EXHIBIT F Discounts + +EXHIBIT G Miltenyi Competitor + +45 + + + + + +MILTENYI & BELLICUM Supply Agreement (Execution CopyMarch 27, 2019) + +EXHIBIT B List of Miltenyi Products + +[...***...] + +46 + + + + + +MILTENYI & BELLICUM Supply Agreement (Execution CopyMarch 27, 2019) + +EXHIBIT C: Forecast Format + +[...***...] + +47 + + + + + +MILTENYI & BELLICUM Supply Agreement (Execution CopyMarch 27, 2019) + +EXHIBIT D [...***...] Sublicense Royalties and/or Licensee Fees + +Miltenyi has entered into a license agreement with [...***...] ("[...***...]"), having a place of business at [...***...], to obtain certain rights regarding the patent family [...***...] ("[...***...] License Agreement"). + +Within the scope of the [...***...] License Agreement, Miltenyi has got the right to grant non-exclusive sublicenses to third parties utilizing cytokines for applications that are covered by the claims of [...***...] to develop, manufacture, market and commercialize medicinal products on terms and conditions consistent with the terms and conditions contained in the [...***...] License Agreement. Upon Bellicum's determination that a given Bellicum product falls within the licence agreement, Bellicum will notify Miltenyi of such determination. + +Subject to the provisions of this Agreement, Miltenyi is willing to grant to Bellicum a non-exclusive sublicense to its rights obtained under the [...***...] License Agreement in the form of a separate agreement between Miltenyi and Bellicum, under such separate sublicense agreement Bellicum would agree to hold harmless and reimburse Miltenyi for the fees that are due to [...***...] based on Bellicum's use of the sublicense rights for Bellicum Products ("[...***...] Sublicense Agreement"). + +48 + + + + + +MILTENYI & BELLICUM Supply Agreement (Execution CopyMarch 27, 2019) + +EXHIBIT E Country Specific Product List Prices* (Year 2019) + +[...***...] + +49 + + + + + +MILTENYI & BELLICUM Supply Agreement (Execution CopyMarch 27, 2019) + +EXHIBIT F Discounts + +Table 1 of Exhibit F: Discount Scheme for Miltenyi Products, forecasted to be purchased by Bellicum under the Supply Agreement + +50 + + + + + +MILTENYI & BELLICUM Supply Agreement (Execution CopyMarch 27, 2019) + +[...***...] + +For Discount Scale Definition, see Table 2 of Exhibit F, below. + +Table 2 of Exhibit F: Discount Scale Definitions + +51 + + + + + +MILTENYI & BELLICUM Supply Agreement (Execution CopyMarch 27, 2019) + +[...***...] + +52 + + + + + +MILTENYI & BELLICUM Supply Agreement (Execution CopyMarch 27, 2019) + +EXHIBIT G Miltenyi Competitor + +[...***...]. + +53 \ No newline at end of file diff --git a/full_contract_txt/BELLRINGBRANDS,INC_02_07_2020-EX-10.18-MASTER SUPPLY AGREEMENT.txt b/full_contract_txt/BELLRINGBRANDS,INC_02_07_2020-EX-10.18-MASTER SUPPLY AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..ac2d46b3a8eb57df6849995b9b89281c63c03990 --- /dev/null +++ b/full_contract_txt/BELLRINGBRANDS,INC_02_07_2020-EX-10.18-MASTER SUPPLY AGREEMENT.txt @@ -0,0 +1,255 @@ +EXHIBIT 10.18 + +CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED WITH "[***]", HAS BEEN EXCLUDED BECAUSE IT IS NOT MATERIAL AND WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. + +MASTER SUPPLY AGREEMENT + +THIS MASTER SUPPLY AGREEMENT ("Agreement") is made as of 31 October 2019 ("Effective Date") by and between Premier Nutrition Company, LLC, a Delaware limited liability company with its headquarters located at 1222 67th Street, Suite 210, Emeryville, CA 94608 ("Buyer" or "PNC"), and Fonterra (USA) Inc., a California corporation with its principal place of business located at 8700 W. Bryn Mawr Avenue, Suite 500N, Chicago, IL 60631 ("Supplier" or "Fonterra") (each a "Party", collectively "Parties"). + +WHEREAS PNC produces, distributes, markets and sells products including ready to drink protein shakes and beverages, powdered protein shakes, nutrition bars, and dietary supplements (the "Finished Products"); and + +WHEREAS Supplier produces raw materials including protein powders used by PNC to produce at least some of the Finished Products; + +NOW THEREFORE in consideration of their respective rights and obligations as set forth in this Agreement, and for other good and valuable consideration, the adequacy and receipt of which are acknowledged, PNC and Supplier agree as follows: + +1 Supply of Ingredients + +1.1 Supplier will provide such materials to PNC or its Third Party Manufacturers ("TPMs") as are specified in any Master Purchase Commitment or any other purchase orders that the Parties may execute from time to time during the term of this Agreement ("Ingredients"). Ingredients will be produced at Supplier's facilities listed in a Master Purchase Commitment, or any other of Supplier's facilities approved in advance, in writing by PNC. + +1.2 PNC or its TPMs will place specific orders for Ingredients from Supplier by issuing a purchase order that specifies, at minimum, the item, quantities, price, delivery dates, and delivery and payment terms (each a "Purchase Order"). + +1.3 PNC and Supplier may enter certain Master Purchase Commitments from time to time during the Term of this Master Supply Agreement. Such Master Purchase Commitments and any Purchase Orders issued against such Commitments shall be subject exclusively to the terms and conditions of this Agreement. In the event the terms of any Master Purchase Commitment conflicts with the terms of this Agreement, the terms of the Master Purchase Commitment shall control. + +1.4 Supplier will receive Purchase Orders by telephone, USPS, overnight courier, email, and fax transmission, Monday through Friday except on state or nationally recognized bank holidays. Purchase Orders not received by 3:00 p.m. Eastern Time are considered to be received on the following + +Page 1 + + + + + +business day. Supplier will confirm or reject Purchase Orders within [***] of receipt of the Purchase Order. Orders not rejected in writing within such time will be deemed confirmed and accepted by Supplier. Each Purchase Order issued by PNC or its TPMs and accepted by Supplier shall be governed by the terms and conditions of this Agreement. Additional terms included in acknowledgments, standard terms and conditions, or any other documents or communications exchanged by the Parties in connection with the sale or purchase of any Ingredients shall be void and of no force or effect. The Parties may only modify, add to or amend any of the terms or conditions of this Agreement by a writing signed by authorized representatives of both Parties. + +1.5 Supplier represents and warrants that at the time and date of delivery, the Ingredients will comply with all specifications ("Specifications"), a copy of which will be attached to the relevant Master Purchase Commitment or Purchase Order accordingly. A Specification may be updated from time to time by PNC in its sole discretion, provided PNC provides Supplier with reasonable prior notice on any updates ("Change Notification"). Within [***] from receipt of the Change Notification, Supplier will either: (1) accept the Specification change at the current price and terms; or (2) submit to PNC a proposal ("Proposal") setting forth the conditions of acceptance that may include a change in price and/or other terms, including documentation to support same. Within [***] the Parties will discuss the Proposal in good faith and exercise their best efforts to agree on the appropriate adjustment if any. PNC will not issue any Purchase Orders, nor be required to issue any Purchase Orders to Supplier until PNC and Supplier have agreed on required Ingredient Specifications and any associated price and/or term adjustment. In the event the Parties fail to agree on required Ingredient Specifications or price and/or term adjustments despite their best good faith efforts, neither Party will have any further obligation with regard to purchase or supply of those Ingredients under any Master Purchase Commitments except that PNC shall take and pay for [***] of Ingredient inventory manufactured according to the then-current Specification. + +1.6 Supplier will provide a Certificate of Analysis ("COA") completed in accordance with the Specifications with any shipment of Ingredients. + +1.7 INTENTIONALLY LEFT BLANK + +1.8 This Agreement is nonexclusive and sets forth the terms and conditions under which the Parties will supply and purchase Ingredients from the other Party. Nothing herein is intended to, nor does, guarantee that either Party will supply or purchase any specific, item, in any specific quantity, or conclude any business transaction with the other. + +1.9 Supplier Performance metrics will be identified and tracked periodically through Supplier Performance Review meetings no more frequently than each calendar quarter during the Term. [***] Metric targets will be established by PNC and agreed by Fonterra and updated as needed. The ultimate goal is zero defects for quality and administrative compliance issues. + +1.10 Supplier agrees to make a good faith effort to provide Advance Ship Notices ("ASN") with bar-coded pallet labels; Invoices, Purchase Orders and other business transactions, as may be advised by PNC, for each Ingredient shipment. Supplier will provide, itself or through a third-party provider, the information via Electronic Data Interface ("EDI") if and as requested by PNC. The technical specifications for all required EDI transactions will be provided by PNC. + +2 + + + + + +2 Quality and Food Safety + +2.1 For the purposes set forth in Section 303(c) of the Federal Food, Drug, and Cosmetic Act (the "Act"), Supplier guarantees to PNC that as of the time and date of delivery, all Ingredients will not be adulterated or misbranded within the meaning of the Act, nor will any Ingredients constitute an article that may not, under the provisions of Sections 404 and 505 of the Act, be introduced into interstate commerce. The Supplier further guarantees that as of the time and date of delivery, all of the Ingredients will be in compliance with all applicable laws, regulations, requirements and programs including those administered by the Food and Drug Administration (the "FDA"), the United States Department of Agriculture (the "USDA") and any state or local food or drug laws then in effect. This guarantee specifically includes Proposition 65 (California Safe Drinking Water and Toxic Enforcement Act), and Supplier hereby certifies that the Ingredients will not contain any non-naturally occurring chemicals subject to Proposition 65 or that any such chemicals pose "no significant risk" or cause "no observable effect" as set forth in the California Health and Safety Code, 22 CCR §§ 12701 et seq. and 22 CCR §§ 12801 et seq., as amended. Supplier shall comply with all applicable regulatory requirements for determining and documenting that all Ingredients are at or below no significant risk levels and no observable effect levels, as applicable. + +2.2 Supplier shall develop and maintain a food safety/food defense program as required under the Food Safety Modernization Act 21 USC §301 et seq and shall submit a copy of such plan (and any changes thereto) to PNC upon PNC's request. Supplier will conduct [***] third-party food safety/food defense audits (the "Audits") in compliance with, and consistent with, relevant audit schemes approved by the Global Food Safety Initiatives, AIB International, Silliker, or GMA SAFE. Supplier will submit summaries of audit reports to PNC's Quality Manager at [***] upon request. Failure to comply with the requirements of this Section 2.2 will constitute a material breach of this Agreement. + +2.3 Supplier will notify PNC immediately, by person-to-person voice communication or equivalent means, if any of the Ingredients contain, or are reasonably suspected to contain, material hazardous to human health, including but not limited to, chemical, physical or biological hazards. + +2.4 PNC shall notify Supplier in writing if it determines any Ingredient fails to meet the Specifications. Supplier shall be given an opportunity to and will promptly inspect and/or test such Ingredients to confirm compliance to Specification. If after any reasonable, good faith inspection and testing it is confirmed that certain Ingredients fail to meet the Specifications [***]. + +2.5 Subject to the occurring of a Force Majeure Event, if Supplier fails to deliver the Ingredients in accordance with the Specifications, including within the time specified on the Purchase Order, in addition to any other remedies available, PNC may terminate the Purchase Order in whole or in part. In the event of such a termination, Supplier shall continue performance of any nonterminated portion of the Purchase Order, or any nonterminated Purchase Orders, and the quantity of Ingredient ordered and so terminated shall be deducted against any relevant Master Purchase Commitment. + +2.6 PNC or its contracted third-party auditors may enter and audit/inspect Supplier's facilities where the Ingredients are produced, stored, packaged or otherwise processed [***] unless food safety is at issue or PNC has a good faith reason to believe the Ingredients are being stored, packaged, or processed + +3 + + + + + +in a way that is inconsistent with the Specifications, in which case an audit may be performed at any time during the Term. For routine visits and audits, PNC will provide [***] if facilities located in the US and with [***] if facilities are located [***], provided that such examination will be conducted during Supplier's normal business hours and in such a manner as to reasonably minimize disruption to Supplier's business, unless food safety is at issue, in which case such examination may be conducted at any time. Supplier shall cooperate in good faith with PNC during all such inspections. During qualification processes and on-site inspections, Supplier will present necessary documentation to ensure compliance with all applicable programs specified under 21 CFR Part 117 Current Good Manufacturing Practice, Hazard Analysis, and Risk-Based Preventative Controls for Human Food. Records of environmental monitoring activities by the Supplier, following Supplier's established environmental monitoring program and standard operating procedures will be made available upon request to PNC. Supplier will notify Buyer immediately via person-to- person voice communication in the event that any pathogen is found, or reasonably suspected, in the plant environment during any environmental monitoring activity that could have an impact on the quality or safety of PNC's Ingredients. In the event of an actual or suspected food safety concern, Supplier shall conduct sampling in all relevant areas and promptly provide results of such tests to PNC. If PNC or its representatives find that any of Supplier's facilities, processes, inventory, procedures or equipment are not in accordance or compliance with the requirements of this Agreement or applicable law or regulation, PNC will give notice to Supplier, and Supplier shall promptly take all reasonable steps to correct such deficiency as soon as possible. If correction of the deficiency cannot be affected within [***] of such notice, then Supplier shall promptly notify PNC with its plan to correct the deficiency including an estimated schedule. If the deficiency cannot be corrected within [***], unless otherwise agreed, then PNC shall have the right to terminate any Purchase Orders then outstanding, along with any Master Purchase Commitment related thereto. + +3 Business Continuity/Continuous Supply Assurances. Supplier will develop and maintain a business continuity plan that identifies critical pathways and potential crisis situations that could interrupt the supply of Ingredients to PNC and establish contingency plans for dealing with each crisis situation. Upon PNC's written request, Supplier will submit the business continuity plan to PNC for PNC's review. + +4 Intellectual Property. 4.1 Each Party shall retain ownership of all Intellectual Property Rights (as defined below): (1) owned or licensed by that Party prior to the commencement date of this Agreement; or (2) developed or acquired independently of this Agreement by that Party or its licensors other than in connection with this Agreement. 4.2 Ownership in the Intellectual Property Rights, if any, of any developments and/or modifications to the Ingredients during the Term shall be [***]. 4.3 For purposes of this Section 4, the term "Intellectual Property Rights" shall mean all statutory, common law and proprietary intellectual property rights, including rights in know-how, confidential information, copyright works, designs, inventions, patents, plant varieties, trademarks and all other rights, whether registered or unregistered (including applications for such rights). + +5 Confidential Information. "Confidential Information" means all business, financial and technical information of the Parties, or of a third- party as to whom a Party has an obligation of confidentiality, whether disclosed before or after the Effective Date and whether disclosed in writing, orally, by electronic delivery, or by inspection of tangible objects. Confidential Information includes, without limitation, trade secrets, ideas, + +4 + + + + + +processes, formulae (including formula and specifications for Ingredients and Finished Products), computer software (including source code), algorithms, data, data structures, know-how, copyrightable material, improvements, inventions (whether or not patentable), techniques, strategies, business and product development plans, timetables, forecasts, customer and supplier information, and information relating to product designs, specifications and schematics, product costs, product prices, product names, financial information, marketing plans, business opportunities, personnel, research, development and know-how. Confidential Information includes that which is marked or otherwise identified as confidential, as well as that which by its nature and the circumstances of its disclosure are reasonably understood to be confidential. + +5.1 Maintenance of Confidentiality and Limitations on Use. Each Party will hold in strict confidence and keep confidential all Confidential Information disclosed to it by the other. The Parties will use at least the same degree of care to avoid publication or dissemination of such Confidential Information as it uses with respect to similarly confidential information of its own, but in no event less than reasonable care. Use of such Confidential Information by such Party will be strictly limited to activities directly in support of its activities under this Agreement. The Parties will disclose such Confidential Information on a need-to-know basis only, and in all events only to such employees and independent contractors who are informed of the confidential nature of the Confidential Information and are bound by obligations substantially similar to those set forth herein applicable to such Confidential Information. Each Party hereby guarantees the performance of the provisions hereof by each person obtaining disclosure of such Confidential Information directly or indirectly from such Party. + +5.2 Copying and Return of Confidential Information. Each Party shall not make any copies or extracts of Confidential Information, or include such Confidential Information in its own materials except as reasonably required directly in support of its activities under this Agreement. When a Party no longer has need thereof in support of its activities under this Agreement or upon request of the other Party, whichever occurs first, such Party shall promptly cease using and shall return or destroy (and, if requested, certify destruction of) all such Confidential Information along with all tangible and electronic copies which it may have made, provided, however, that a Party is not obligated to remove Confidential Information from back up devices that have been made and are maintained in accordance with a corporate records retention policy. + +5.3 Certain Exceptions. Information will not be, or will cease being, Confidential Information, as the case may be, if Supplier can show: + +5.3.1 that such information entered the public domain other than by breach of this Agreement on the part of any Party obligated to confidentiality hereunder; 5.3.2 it is rightfully known to the receiving Party without obligation of confidentiality to any third-party prior to receipt of same from the disclosing Party as evidenced by bona fide written, dated documents; 5.3.3 it is independently developed by personnel of the receiving Party who have not had access to Confidential Information of the disclosing Party; and, 5.3.4 that it is generally made available to third-parties by the disclosing Party without obligation of confidentiality. + +5.4 Legally Required Disclosure. A Party shall not be in breach hereof if it discloses Confidential Information pursuant to a judicial or governmental order, or as required by applicable law or the rules + +5 + + + + + +of a recognized stock exchange, but any such disclosure shall be made only to the extent so ordered or required. In any such event, the Party (i) shall timely notify the other Party so that it may intervene in response to such order or take action to protect its interests (in which event such Party will cooperate in such effort), or (ii) if timely notice cannot be given, shall seek to obtain a protective order or confidential treatment from the court or government for such information. + +5.5 Defend Trade Secrets Act. Notwithstanding anything in this agreement to the contrary, a receiving Party is hereby notified in accordance with the US Defend Trade Secrets Act of 2016 that it will not be held criminally or civilly liable under any US federal or state trade secret law for the disclosure of a trade secret that: (x) is made (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (y) is made in a complaint or other document that is filed under seal in a lawsuit or other proceeding. + +5.6 Trading in Securities. Supplier acknowledges that it is aware, and agrees to advise its directors, officers, employees, agents and representatives who are informed as to the matters which are the subject of this Agreement, that the United States securities laws prohibit any person who has material, non-public information concerning PNC, its parent and affiliate companies including BellRing Brands, Inc. and Post Holdings, Inc. from purchasing or selling securities of those companies or from communicating such information to any other person under circumstances in which it is reasonably foreseeable that such person is likely to purchase or sell such securities. + +5.7 Title. As between the Parties, title or right to possess Confidential Information of PNC, except as otherwise provided herein, shall remain in PNC. Nothing in this Agreement shall be construed as granting or conferring any rights to any Confidential Information, except as otherwise explicitly stated in this Agreement. + +5.8 No Representation or Warranty. Except as expressly set forth herein, neither Party makes any representations or warranties of any nature whatsoever with respect to any Confidential Information it may provide, including, without limitation, any warranties of merchantability, fitness for a particular purpose or accuracy. All Confidential Information is provided on an "as-is" basis, and the recipient assumes all responsibility for its use thereof or reliance thereon. Further, each Party understands and acknowledges that any confidential information received from the other Party concerning future plans may be tentative and may not represent firm decisions concerning such plans, and neither Party shall be liable to the other Party for inaccuracies in Confidential Information under any theory of liability. + +6 Term and Termination. + +6.1 This Agreement will commence on the Effective Date and continue for an Initial Term of five (5) years, and will automatically renew for additional periods of five (5) years unless one Party notifies the other of its intention not to renew, no less than 12 months prior to the expiration of the then-current term, unless terminated as permitted under this Agreement. + +6.2 Either Party may terminate this Agreement for cause if the other Party fails to perform any material provision of this Agreement or commits a material breach of this Agreement which is not corrected within [***] after receiving written notice of the failure or breach. except that if the default is by + +6 + + + + + +Supplier that creates an immediate public food safety risk, PNC may terminate this Agreement immediately without regard to any period for correction. + +6.3 This Agreement will automatically terminate if either Party becomes insolvent or files a petition in bankruptcy, if a Party makes an assignment for the benefit of a creditor, if a receiver is appointed to take possession of any part of a Party's assets or if a Party becomes unable generally to pay its debts as they become due, or otherwise ceases to do business. + +6.4 On the termination of this Agreement for any reason, all rights granted to Supplier under this Agreement will immediately cease, and Supplier must deliver to PNC all written or recorded materials relating to the Confidential Information of PNC in the possession or control of Supplier or any of its related party, subject to Section 5.2. + +7 Indemnification and Insurance. 7.1 Each Party will defend and hold harmless the other Party and its subsidiaries, affiliates, officers, directors, employees, attorneys, insurers, shareholders, representatives and agents from and against any and all liabilities, losses, damages, claims, actions, proceedings, suits, costs or expenses, including reasonable attorney fees for counsel retained by the indemnified Party, brought by a Third Party, arising out of or in connection with: 7.1.1 any negligent or intentional act or omission of the indemnifying Party, its agents or employees; 7.1.2 any breach in or default by the indemnifying Party of its obligations under this Agreement; 7.1.3 any other loss, damage or injury caused by or arising out of the indemnifying Party's or its agents' or employees' on-site visits to the indemnified Party's premises; or any claims relating directly to trademark, patent or copyright infringement arising out of a Party's use of the other Party's (or its licensors') trademarks, patents or copyrights as permitted hereunder. 7.1.4 For purposes of this Section 7.1, "Third Party" means any individual, corporation, partnership, trust, cooperative, or other business organization or entity, and any other recognized organization, other than the Parties or their affiliates. + +7.2 Except for a Party's gross negligence or intentional acts or omissions and its obligations of indemnity under this Agreement, under no circumstances will either Party be liable to the other Party for [***]. + +7.3 Supplier agrees to indemnify and hold PNC harmless from any and all employment-related claims, payments, entitlements, taxes, interest and penalties assessed against or obtained from PNC by any individual or authority as a consequence of or related to the performance by any agent or employee of Supplier. + +7.4 Supplier shall maintain insurance with an insurance company with an equivalent of an A.M. Best rating of "A" or better, of the following kinds and in the following amounts during the term of this Agreement: 7.5 7.5.1 Comprehensive General Liability (CGL) Insurance with limits of not less than [***] each occurrence and [***] in the aggregate, including Contractual, Completed-Operations and + +7 + + + + + +Product-Liability Coverage's with limits of not less than [***] for each occurrence, covering both bodily injury and property damage liability. 7.5.2 Umbrella/Excess Liability with limits of not less than [***]. 7.5.3 Workers' Compensation Coverage plus Occupational Disease Insurance if Occupational Disease coverage is required by the laws of the state where the Facility is located or work is to be performed. Employers Liability $500,000 each accident 7.5.4 Auto Liability $1,000,000 combined single limit. + +7.6 Supplier shall have Buyer named as an additional insured on its insurance policies in subparts 7.5.1 and 7.5.2 above. Supplier shall furnish Buyer with a certificate from its insurer verifying that it has the above insurance in effect during the duration of this Agreement and that insurer acknowledges (a) the contractual liability assumed by Supplier in this Agreement and (b) that Buyer is an additional insured on such policies and (c) Supplier's CGL policy is primary and Buyer's CGL policy is non-contributory and (d) a waiver of subrogation shall be provided in favor of Buyer on the CGL, Workers' Compensation and Auto policies. Said certificate of insurance shall require Supplier's insurance carrier to give Buyer no less than ten (10) days written notice of any cancellation or change in coverage. Failure to secure such insurance as of the date of execution of this Agreement shall constitute a breach of this Agreement. Supplier shall provide to PNC a certificate evidencing such insurance within thirty (30) days of a request for same from PNC. + +7.7 Supplier shall, at its own expense, maintain throughout the term of this Agreement, all insurance required by law or regulation in all countries in which this Agreement will be performed. + +8 Recall. If Ingredients provided by Supplier under this Agreement are misbranded, contaminated, or otherwise unfit for human consumption at the time they are delivered to PNC or its TPM ("Defect"), PNC in its sole discretion will make a determination of the necessity of a recall, market withdrawal, inventory retrieval, or other action designed to prevent the distribution or sale of the affected Finished Products, plus the type, extent, method of handling, disposition of the Finished Products as well as any affected work in progress, and all other particulars involved in such an action (a "Recall"), and PNC will execute any Recall. Supplier, in its sole discretion, will make a determination of the necessity of a recall, market withdrawal, inventory retrieval or other action designed to prevent the distribution or sale of the Ingredients. Subject to Section 9.1, Supplier shall bear the complete responsibility for a Recall occasioned by a Defect in the Ingredient and shall indemnify PNC for [***] resulting from or related to the Recall. Any Recall occasioned by PNC labels or by tampering with the Ingredients after they have left Supplier's control, or by improper storing or handling by PNC, will not be considered a Defect. + +9 Limitation of Liability. + +9.1 The maximum liability of one Party to the other Party and its affiliates in relation to this Agreement will be [***] ("Liability Cap"), provided however that: + +8 + + + + + +9.1.1 The Liability Cap will not apply to any (1) material confidentiality breach under Section 5, and/or (2) indemnification obligations under Section 7.1. 9.1.2 The Liability Cap will not apply to intentional misconduct and/or gross negligence. + +9.2 For the purpose of this Section, "liability" means liability for any and all claims, causes of action, judgments, costs and expenses (including but not limited to reasonable attorney fees and expenses), reimbursements, losses, and any and all other liabilities and damages of any kind, whether in contract, tort (including negligence), equity, statute or otherwise arising out of, in relation to or as a result of this Agreement. + +10 Force Majeure. + +10.1 Neither Party will be liable for any breach of its obligations under this Agreement resulting from causes beyond its reasonable control, including, but not limited to, an act of nature, drought, outbreak of foot and mouth disease, port and other transport strikes, war, fires, quarantine restrictions, insurrections or riots, energy shortages, embargo or the inability to obtain supplies or raw materials because of a global shortage or governmental action (a "Force Majeure Event"). Notwithstanding anything herein to the contrary, in the event of a Force Majeure Event, or any other circumstance that limits Fonterra's ability to produce or deliver product, Supplier will exercise its best efforts to comply with its obligations hereunder, mitigate the adverse impact on and not disfavor PNC, and will treat it in parity with its other customers. + +10.2 Any obligation of either Party under this Agreement will be postponed until the cause underlying the Force Majeure Event has been eliminated, at which time the obligation will again be in effect. Any loss of time by the Force Majeure Event will not be held against the Party who was unable to comply with its obligations under this Agreement because of the Force Majeure Event. The Party unable to comply with its obligations under this Agreement will immediately notify the other Party in writing that a Force Majeure Event has delayed its performance and will state, to the best of its knowledge, the revised date for performance. If a Force Majeure Event persists for longer than [***], the Party not directly affected by the Force Majeure Event may terminate this Agreement with regard to any relevant Master Purchase Commitments or Purchase Orders. + +10.3 Should Supplier be unable to comply with its obligations under this Agreement because of a Force Majeure Event, PNC may obtain elsewhere the Ingredients the Supplier was unable to deliver because of the Force Majeure Event and those Ingredients will be credited against any relevant Minimum Purchase Commitment. PNC will not be obligated to purchase those Ingredients from Supplier at a later time. + +11 Notices. Notices contemplated by this Agreement must be in writing and may be sent by registered or certified mail, postage prepaid, to the address specified in the first paragraph of this Agreement or to any other address designated by prior written notice. + +12 Governing Law; Dispute Resolution. + +9 + + + + + +12.1 This Agreement will be governed by the laws of the State of Delaware without regard to its conflicts of law principles. + +12.2 The Parties consent to, acknowledge, and agree that any dispute arising out of or relating to this Agreement, including the breach, termination or validity thereof, shall be brought exclusively before the state and federal courts in and for the City of Wilmington and County of New Castle, Delaware Each Party waives any objection based on forum non conveniens. + +13 Assignment. Neither Party may transfer or assign any of its rights or obligations under this Agreement without the prior written consent of the other Party, except that either Party may assign this Agreement to any entity controlled by it, its parents, subsidiaries, or affiliates, or to any purchaser of the business to which this Agreement relates subject to the other Parties consent which will not be unreasonably withheld or delayed. + +14 Supplier Conduct. Supplier agrees to engage in responsible and ethical business practices and conduct itself in full compliance with all applicable laws, rules, and regulations in every country in which it does business. + +15 California Transparency Act. PNC does not accept or support the use of illegal, abusive, or forced labor in our own facilities. Within its supply chain, Supplier will comply with all laws of the country they are doing business in and are subject to. + +16 U.S. Government Affirmative Action Regulations. During the performance of this contract or any purchase order issued hereunder, the Supplier agrees to comply with all applicable Federal, state and local laws respecting discrimination in employment and non-segregation of facilities including, but not limited to, requirements set out at 41 CFR §60-1.4, 41 CFR §61-300.10, 29 CFR Part 471 Appendix A to Subpart A, 41 CFR §60-300.5 and 41 CFR §60-741.5, which specific clauses are herein incorporated by reference into all covered contracts and subcontracts as required by Federal law. This Supplier and any applicable subcontractor shall abide by the requirements of 41 CFR §60- 300.5(a) and §60-741.5(a) to the extent applicable. These regulations prohibit discrimination against qualified individuals on the basis of protected veteran status or disability, and require affirmative action by covered prime contractors and subcontractors to employ and advance in employment qualified protected veterans and individuals with disabilities. + +17 Fair Labor Practices. + +17.1 Supplier shall provide workers with clean, safe and healthy work environments; recognize and respect the right of employees to free association and collective bargaining in accordance with law; comply with all applicable wage and hour laws; and properly verify the employment eligibility of its employees. + +17.2 Forced Labor. Suppliers will not employ, use or otherwise benefit from involuntary labor, forced labor, or labor that results from slavery or human trafficking. Supplier hereby certifies that: (i) it is in compliance with this paragraph; and (ii) all materials incorporated into its products comply with all applicable laws addressing slavery, human trafficking and other forms of forced labor. Supplier shall provide PNC with documentation establishing compliance with this paragraph upon [***] notice. + +10 + + + + + +17.3 Child Labor. Supplier will not employ anyone under the legal working age defined by local law. Supplier will comply with all applicable laws addressing the working requirements and conditions for child workers. + +17.4 Respectful Workplace. Supplier shall prohibit all forms of unlawful discrimination, abuse, harassment, violence and retaliation. + +18 Gifts and Entertainment. Supplier will not offer any gift to a PNC employee, contractor, or agent that is: (i) more than a nominal value; (ii) more than an infrequent occurrence; (iii) cash or cash equivalents; or (iv) illegal, sexually oriented, offensive or otherwise inappropriate. + +19 Environment & Sustainability. Supplier will comply with all applicable environmental laws and reporting obligations, maintain all required permits, and strive to responsibly manage the impacts of their operations on the environment. + +20 Anticorruption. Suppliers will not, directly or indirectly, offer improper gifts to government employees, engage in bribery or fraud, or take any other action that would cause a violation of the U.S. Foreign Corrupt Practices Act, the UK Bribery Act or any other applicable anti- corruption law. + +21 Miscellaneous. + +21.1 If any provision of this Agreement is determined to be illegal or unenforceable, all other provisions will continue in full force and effect. + +21.2 This Agreement may be executed concurrently by original or facsimile signature in counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument. + +21.3 Each right and remedy of each Party described in this Agreement is cumulative and in addition to every other right or remedy, express or implied, now or hereafter arising, available to such Party, at law or in equity, or under any other agreement. No delay or omission by either Party in the exercise of any right or remedy arising under this Agreement will impair any such right or remedy or the right of such Party to resort thereto at a later date or be construed to be a waiver of any default under this Agreement. The indemnities, representations and warranties of each Party will survive termination of this Agreement. + +21.4 This Agreement, together with any schedules and exhibits and any Purchase Orders, Specifications and COAs, constitutes the complete agreement between the Parties and supersedes all prior agreements between the Parties regarding this subject matter. The Parties hereby agree that any such prior agreements are hereby terminated. No other contracts, warranties, promises or representations, either oral or in writing, relating to this Agreement will bind either Party except for the Purchase Orders, Specifications and COAs. This Agreement may not be amended or modified except by a writing signed by an authorized representative of the Party against whom such amendment or modification is asserted. This Agreement will be binding upon, and will inure to the benefit of, the parties, their successors and permitted assigns. + +(signature page follows) + +11 + + + + + +Agreed to and executed effective as of the date first above written. + +Fonterra (USA) Inc. Premier Nutrition Company, LLC + +By: [***] By: /s/ Paul Rode Title: President Title: CFO + +12 + + + + + +Agreed to and executed effective as of the date first above written. + +Fonterra (USA) Inc. Premier Nutrition Company, LLC + +By: By: /s/ Paul Rode + +Title: Title: CFO \ No newline at end of file diff --git a/full_contract_txt/BERKELEYLIGHTS,INC_06_26_2020-EX-10.12-COLLABORATION AGREEMENT.txt b/full_contract_txt/BERKELEYLIGHTS,INC_06_26_2020-EX-10.12-COLLABORATION AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..a73b8c2515256325b19bb9dc1f5ffeefc2e236fe --- /dev/null +++ b/full_contract_txt/BERKELEYLIGHTS,INC_06_26_2020-EX-10.12-COLLABORATION AGREEMENT.txt @@ -0,0 +1,1431 @@ +Exhibit 10.12 + +[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded information is not material and would likely cause competitive harm to the registrant if publicly disclosed. + +Execution Version + +COLLABORATION AGREEMENT + +This COLLABORATION AGREEMENT (this "Agreement"), effective as of September 13th, 2019 ("Effective Date"), is between Ginkgo Bioworks, Inc., a Delaware corporation with offices located at 27 Drydock Avenue, 8th floor, Boston, Massachusetts 02210 ("Ginkgo"), and Berkeley Lights, Inc., a Delaware corporation with offices located at 5858 Horton Street, Suite 320, Emeryville, California 94608 ("BLI"). Ginkgo and BLI may each be referred to herein as a "Party" or, collectively, as the "Parties." + +WHEREAS, BLI and Ginkgo are committed to the goal of developing and deploying workflows on the Beacon Platform to accelerate the engineering of microbial organisms and mammalian cell lines, including by developing new Workflows (as defined below) for use on the Beacon Platform for the Parties' mutual benefit (the "Purpose"); and + +WHEREAS, in furtherance of the Purpose, BLI and Ginkgo have decided to enter into this Agreement, including mutually agreed upon Workflow Development Plans, which establish the terms by which Ginkgo and BLI will work together to bring their unique resources and experiences to bear on the Purpose. + +NOW THEREFORE, in consideration of the above premises and the mutual covenants contained herein, the Parties hereby agree as follows: 1. DEFINITIONS + +1.1 "Affected Party" has the meaning set forth Section 14.8 (Force Majeure). + +1.2 "Affiliate" means with respect to a Party, any Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with that Party, for so long as such control exists. For purposes of this definition only, "control" and, with correlative meanings, the terms "controlled by" and "under common control with" means: (a) in the case of Persons that are corporate entities, direct or indirect ownership of more than fifty percent (50%) of the stock or shares (or such lesser percentage which is the maximum allowed to be owned by a foreign corporation in a particular jurisdiction) entitled to vote for the election of directors, or otherwise having the power to control or direct the affairs of such corporate entity; and (b) in the case of Persons that are non-corporate entities, direct or indirect ownership of at least fifty percent (50%) of the equity interest or the power to direct the management and policies of such non-corporate entity. + +1.3 "Agreement" has the meaning set forth in the Preamble. + +1.4 "[***]" means [***]. These include [***]. For clarity, [***] does not include [***]. + +1.5 "Alliance Manager" has the meaning set forth in Section 3.7 (Alliance Managers). + + + + + +1.6 "Antibody" means a soluble protein derived exclusively from an immunoglobulin protein that includes at least one hyper-variable antigen- binding region, including any fragment [***] of such protein, but, for clarity, excluding (i) [***] and (ii) [***]. + +1.7 "Applicable Law" means federal, state, local, national and supra-national laws, statutes, rules and regulations, including any rules, regulations, regulatory guidelines or other requirements of Regulatory Authorities, major national securities exchanges or major securities listing organizations, that may be in effect from time to time during the Term and applicable to a particular activity or country hereunder. + +1.8 "Arbitration Notice" has the meaning set forth in Section 14.5.2 (Dispute Resolution). + +1.9 "Beacon Optofluidic Machine Improvement" means any improvement or modification to the Beacon Optofluidic Machine conceived, developed, generated or reduced to practice during the Term (a) solely by a Party, its Affiliates or Persons acting on behalf of such Party or (b) jointly by, on one hand, Ginkgo, its Affiliates or Persons acting on behalf of Ginkgo and, on the other hand, BLI, its Affiliates or Persons acting on behalf of BLI, in each case of clauses (a) and (b) of this Section 1.9 ("Beacon Optofluidic Machine Improvement" definition) through the conduct of activities under a Workflow Development Plan or otherwise arising out of the Parties' performance of activities under this Agreement. + +1.10 "Beacon Optofluidic Machine" means (i) the machine with the Specifications set forth, as of the Effective Date, on Schedule 1.10 (Beacon Optofluidic Machine) and (ii) [***] and, with respect to (i)-(ii), any [***] of such machines, developed during the Term by BLI or its Affiliates that [***]. + +1.11 "Beacon Platform" means, collectively, (a) the Beacon Optofluidic Machine, (b) the OptoSelect Chips, (c) Consumables related to the Beacon Optofluidic Machine or the OptoSelect Chips and (d) any Software. + +1.12 "BLI" has the meaning set forth in the Preamble. + +1.13 "BLI Background IP" means any Intellectual Property (a) Controlled by BLI or its Affiliates as of the Effective Date, (b) that comes into the Control of BLI after the Effective Date other than by means of this Agreement or the activities performed hereunder or (c) developed during the Term by BLI outside and independently of this Agreement. + +1.14 "BLI Indemnitee" has the meaning set forth in Section 12.2 (Indemnification by Ginkgo). + +1.15 "BLI Inventions" has the meaning set forth in Section 8.2.2 (Ownership of Materials and Data - BLI Inventions). + +1.16 "BLI Proprietary Workflow" means any workflow on the Beacon Platform that was developed by or on behalf of BLI prior to the Effective Date or is developed during the Term in the conduct of activities outside and independent of this Agreement (including, for clarity, outside of any Workflow Development Plan), in each case whether solely by BLI or jointly by BLI and a Third Party. Page 2 of 85 + + + + + +1.17 "BLI Subcontractor" means a Person to whom BLI has subcontracted any of its activities under this Agreement pursuant to Section 2.7 (Subcontracting). + +1.18 "BLI Terms and Conditions" means those terms and conditions set forth in Schedule 1.18 (BLI Terms and Conditions) and the Product Warranty, as such may be amended from time to time by BLI, [***]. + +1.19 "Budget" means, with respect to a Workflow Development Plan, an itemized budget broken down on a [***] and high-level task-by-high-level task basis [***], that sets forth the following internal and out-of-pocket costs anticipated to be incurred in the conduct of activities under such Workflow Development Plan, to the extent applicable and mutually agreed upon by the Parties: + +1.19.1 the FAS Support Costs for services provided by any FAS under such Workflow Development Plan; + +1.19.2 other FTE Costs for BLI's personnel in the conduct of activities under, or [***] under, such Workflow Development Plan, including BLI personnel conducting development of Software for the Workflow under such Workflow Development Plan; provided that, with respect to the FTE Costs for BLI's personnel providing [***] under a Workflow Development Plan, such FTE Costs shall not exceed [***] percent ([***]%) of the total FTE Costs charged to Ginkgo with respect to any invoice; + +1.19.3 the out-of-pocket development ([***]) costs paid by BLI to Third Parties to purchase finished Consumables that are developed and designated as a deliverable under a Workflow Development Plan or raw materials necessary to manufacture Consumables that are developed and designated as a deliverable under a Workflow Development Plan , in each case from such Third Parties for the Beacon Platform, subject to a [***] percent ([***]%) mark-up; + +1.19.4 with respect to any then-existing Consumables (i.e. not Consumables for which development or manufacture is ongoing as described in Section 1.19.3), an amount equal to the number of units used in the performance of the Workflow Development Plan, multiplied by a price per unit of Consumables as set forth in Section 5.2.2(b) (Adjustments); and + +1.19.5 other out-of-pocket costs paid by BLI to permitted Third Party subcontractors and vendors attributable to the development of the Workflow or Hardware under such Workflow Development Plan, [***]. + +1.20 "Business Day" means any day, other than a Saturday, Sunday or a day on which commercial banks located in Boston, Massachusetts or San Francisco, California are authorized or required by Applicable Law or regulation or otherwise to close. Page 3 of 85 + + + + + +1.21 "Buy-Down Amount" means, at any given time of a Buy-Down Election, an amount equal to: + +1.21.1 if, at such time, [***], [***] ([***]%) of the difference between (a) the Full Purchase Target and (b) the sum of all the Development Purchases and Production Purchases made or incurred by Ginkgo; + +1.21.2 if, at such time, [***], [***] percent ([***]%) of the difference between (a) the Full Purchase Target and (b) the sum of all the Development Purchases and Production Purchases made or incurred by Ginkgo as of such time; + +1.21.3 if, at such time, [***], [***] percent ([***]%) of the difference between (a) the Full Purchase Target and (b) the sum of all the Development Purchases and Production Purchases made or incurred by Ginkgo as of such time; and + +1.21.4 if, at such time, [***], [***]. + +For illustrative purposes only, Schedule 1.21 (Buy-Down Examples) sets forth a table showing the calculated Buy-Down Amounts assuming [***] and [***]. + +1.22 "Buy-Down Election" has the meaning set forth in Section 7.3 (Buy-Down Election). + +1.23 "Calendar Quarter" means the respective periods of three (3) consecutive calendar months ending on March 31, June 30, September 30 and December 31; provided that the first Calendar Quarter of the Term shall begin on the Effective Date and end on the last day of the then current Calendar Quarter and the last Calendar Quarter of the Term shall begin on the first day of such Calendar Quarter and end on the last day of the Term. + +1.24 "[***]" means [***] that [***], including [***], by [***], whose [***]. + +1.25 "[***]" means the offering or performance of any services using the Beacon Platform, [***], to [***]: + +1.25.1 [***]; + +1.25.2 [***]; or + +1.25.3 [***]; + +provided that in no event shall [***] include the use of the Beacon Platform to (i) [***] or (ii) [***] but, for clarity, are not in any manner or form used as described in Sections 1.25.1, 1.25.2 or 1.25.3 above. + +1.26 "Change in Control" means, with respect to a Person, (a) the acquisition, directly or indirectly, by a Person or "group" (whether in a single transaction or multiple transactions) of fifty percent (50%) or more of the voting power of such Person or of beneficial ownership of (or the right to acquire such beneficial ownership) fifty percent (50%) or more of the outstanding Page 4 of 85 + + + + + +equity or convertible securities of such Person (including by tender offer or exchange offer); (b) any merger, consolidation, share exchange, business combination, recapitalization or similar corporate transaction involving such Person (whether or not including one or more wholly owned subsidiaries of such Person) or (c) such Person sells or transfers to any Third Party, in one or more related transactions, properties or assets representing all or substantially all of such Person's consolidated total assets to which this Agreement relates. + +1.27 "Claims" is defined in Section 12.1 (Indemnification by BLI). + +1.28 "Clinical Trial" means a human clinical study conducted on sufficient numbers of human subjects that is designed to (a) establish that a product is reasonably safe for continued testing, (b) investigate the safety and efficacy of the product for its intended use, and to define warnings, precautions and adverse reactions that may be associated with the product in the dosage range to be prescribed or (c) support Regulatory Approval of such product or label expansion of such product. Without limiting the foregoing, Clinical Trial includes any Phase II Clinical Trial or Phase III Clinical Trial conducted by or on behalf of one or both Parties in connection with this Agreement. + +1.29 "Collaboration Data" has the meaning set forth in Section 8.5.1 (Disclosure). + +1.30 "Collaboration Intellectual Property" means [***], that is conceived, developed, generated or reduced to practice during the Term (a) solely by a Party, its Affiliates or Persons acting on behalf of such Party or (b) jointly by, on one hand, Ginkgo, its Affiliates or Persons acting on behalf of Ginkgo and, on the other hand, BLI, its Affiliates or Persons acting on behalf of BLI, in each case of clauses (a) and (b) of this Section 1.30 ("Collaboration Intellectual Property" definition) through the conduct of activities under this Agreement. + +1.31 "Collaboration Workflow" means any Workflow on the Beacon Platform that [***] and is (a) developed jointly by the Parties (or on their behalf) or (b) developed solely by BLI (or on behalf of BLI) for Ginkgo, in each case of clause (a) and (b) of this Section 1.31 ("Collaboration Workflow" definition), pursuant to a Workflow Development Plan. For the avoidance of doubt, Collaboration Workflows shall not include [***]. + +1.32 "Commercial Services" means any [***] activities conducted by Ginkgo or any sublicensee under the rights granted to Ginkgo by BLI in Section 9.1.1 (Scope of Grants) in the Licensed Field (a) under an agreement or arrangement of Ginkgo or any such sublicensee with a Third Party or (b) for [***] that [***] by Ginkgo, an Affiliate or a Third Party; provided that, notwithstanding the foregoing, with respect to Third Parties, Workflows may only be [***] by Ginkgo permitted (under Section 9.1 (Grants to Ginkgo)) sublicensees, but no other Third Parties. + +1.33 "Completed Workflow" means any Key Collaboration Workflow that the JRC or the Expert Panel, as applicable, determines has been Substantially Completed. + +1.34 "Confidential Information" has the meaning set forth in Section 10.1 (Confidential Information). Page 5 of 85 + + + + + +1.35 "Conforming Product" means, with respect to a Beacon Optofluidic Machine or Consumable delivered by BLI to Ginkgo under this Agreement, that such Beacon Optofluidic Machine or Consumable meets the Product Warranty at the time of delivery. + +1.36 "Consumables" means those certain OptoSelect Chips and reagents set forth on Schedule 1.36 (Consumables) or that, during the Term, [***] for the use of the Beacon Platform and are sold by BLI. + +1.37 "Contract Year" means (a) with respect to the first Contract Year, the period of time commencing on the Effective Date and ending on September 30, 2020 and (b) with respect to each subsequent Contract Year, commencing on October 1 of such Contract Year and continuing for a period of twelve (12) consecutive calendar months; provided that the last Contract Year of the Term shall end on the last day of the Term. + +1.38 "Control" means, with respect to any item of Intellectual Property or material, the possession (whether by ownership or license, other than by a license granted pursuant to this Agreement) by a Party or its Affiliates of the ability to grant to the other Party access, ownership, a license or a sublicense as required herein to such item, without: (a) violating the terms of any agreement or other arrangement with any Third Party in existence as of the time such Party or its Affiliates would be required hereunder to grant the other Party such access, ownership, license or sublicense; (b) violating any Applicable Law, or (c) incurring payment obligations by reason of providing access, ownership, a license or a sublicense to the other Party with respect thereto (unless such other Party agrees in writing to bear such payment obligations [***] to providing access, ownership, a license or a sublicense to such item by such other Party). + +1.39 "Development Purchase Commitment" means, for a given Contract Year, the amount in the column named "Development Purchase Commitment" in Table 7.2.2 for such Contract Year, as may be amended from time to time under this Agreement. + +1.40 "Development Purchases" means, during any period of time, the aggregate amount paid by Ginkgo to BLI for the conduct of activities under any Workflow Development Plan or otherwise under Section 2.4.2 (Costs under Workflow Development Plan - Payment) during such period of time. + +1.41 "Disclosing Party" is defined in Section 10.1 (Confidential Information). + +1.42 "Discovered Antibody" has the meaning set forth in Section 7.4.2 (Milestone Events). + +1.43 "Dollars" means United States dollars ($). + +1.44 "Drug Approval Application" means any New Drug Application ("NDA"), as defined in the FFDCA, or any corresponding foreign applications in the Territory, including (a) with respect to the European Union, a Marketing Authorization Application (a "MAA") filed with the EMA pursuant to the Centralized Approval Procedure or with the applicable Regulatory Authority of a country in Europe with respect to the mutual recognition or any other regional or national approval procedure or (b) with respect to Japan, an MAA filed with the PMDA. Page 6 of 85 + + + + + +1.45 "Effective Date" has the meaning set forth in the Preamble. + +1.46 "EMA" means the European Medicines Agency and any successor agency(ies) or authority having substantially the same function. + +1.47 "European Union" or "E.U." means the economic, scientific and political organization of member states known as the European Union, as its membership may be altered from time to time, and any successor thereto, except that, for purposes of this Agreement, the E.U. will be deemed to include [***] the United Kingdom, irrespective of whether any such country leaves the European Union. + +1.48 "Excluded Fields" means the use of the Beacon Platform for: + +1.48.1 [***]; + +1.48.2 [***]; + +1.48.3 [***]; + +1.48.4 [***]; + +1.48.5 [***]; and + +1.48.6 [***]. + +1.49 "Expert Panel" has the meaning set forth in Section 3.5.3 (Decision-Making). + +1.50 "Expiration" has the meaning set forth in Section 13.3.1 (General). + +1.51 "Extended Force Majeure Event" has the meaning set forth Section 14.8 (Force Majeure). + +1.52 "Failure to Supply" has the meaning set forth in Section 5.4.3(a) (Remedial Efforts). + +1.53 "FAS" means a BLI Field Application Scientist providing [***] to Ginkgo related to a Workflow Development Plan or a Workflow either (a) at Ginkgo's facilities or (b) [***]; provided that, in the case of clause (b) of this Section 1.50 ("FAS" definition), such BLI Field Application Scientist must be specifically dedicated to development of Workflows on at least a part-time basis and identified as such in the Workflow Development Plan under this Agreement (such identification to include, in the case of part-time FAS, a specified percentage of dedication to Ginkgo [***]). + +1.54 "FAS Support Cost" shall mean, with respect to any services provided by one or more FAS(s) to Ginkgo over a specified period of time, the amount equal to the aggregate of the applicable FAS Support Rates for such services during such period of time. + +1.55 "FAS Support Rate" means, with respect to any services provided by a FAS pursuant to this Agreement to Ginkgo, the applicable rate (dependent on the length of support) for such services set forth in Schedule 5.2.1 (Pricing Schedule), subject to adjustment as set forth in Section 5.2.2(c) (Adjustments). Page 7 of 85 + + + + + +1.56 "FDA" means the United States Food and Drug Administration and any successor agency(ies) or authority having substantially the same function. + +1.57 "FFDCA" means the United States Federal Food, Drug, and Cosmetic Act, 21 U.S.C. § 301 et seq., as amended from time to time, together with any rules, regulations and requirements promulgated thereunder (including all additions, supplements, extensions, and modifications thereto). + +1.58 "Force Majeure Event" has the meaning set forth in Section 14.8 (Force Majeure). + +1.59 "FOU License Fee" has the meaning set forth in Section 7.4.1 (License Fees). + +1.60 "FTE" means (a) with respect to any full-time employee of BLI, [***], who is [***] dedicated to the development of Workflows under this Agreement, a total of twelve (12) months of [***] work conducted by such employee or (b) with respect to any full-time employee of BLI that is not [***] dedicated to the development of Workflows under this Agreement, a full time equivalent effort consisting of a minimum of a total of [***] ([***]) hours per year of work [***] a Workflow Development Plan by such employee of a Party. In no event shall the work of one (1) employee exceed 1 full FTE. + +1.61 "FTE Costs" means, with respect to any given activity or activities over any specified period of time, the number of FTEs conducting such activity or activities multiplied by the FTE Rate. + +1.62 "FTE Rate" means the rates per annum, listed in Schedule 1.62 (FTE Rate), which rate includes certain allowable allocations and subject to increase on an annual basis as of January 1 of each year, beginning in 2020, by a factor which reflects the increase, if any, in the Consumer Price Index for [***], as reported by the U.S. Bureau of Labor Statistics, for January 1 of such year when compared to the comparable statistic for January 1 of the preceding year. For clarity, if there is no such increase in the CPI-[***], the FTE Rate shall remain the same and shall not decrease. + +1.63 "Full Purchase Target" has the meaning set forth in Section 7.2.1 (Purchase Commitments - Generally). + +1.64 "Generalized Workflow" means any Collaboration Workflow or component thereof that is designated as a "Generalized Workflow" by the Parties in a Workflow Development Plan or, if the Parties have made no designation, is not a Specific Implementation. By way of non-limiting example, Generalized Workflows would encompass Workflows or components thereof that are not Specific Implementations and are generally directed to and required to enable: + +1.64.1 [***], + +1.64.2 [***]; Page 8 of 85 + + + + + +1.64.3 [***]; + +1.64.4 [***]; + +1.64.5 [***]; or + +1.64.6 [***]. + +For the purposes of Section 1.64.3 and Section 1.128, the following examples serve to illustrate the concept of a "[***]" (a) [***] (b) [***] and (c) [***] + +1.65 "Ginkgo" has the meaning set forth in the Preamble. + +1.66 "Ginkgo Background IP" means any Intellectual Property provided or otherwise disclosed to BLI under this Agreement or otherwise [***] for the performance of any activities allocated to BLI under a Workflow Development Plan that is (a) Controlled by Ginkgo or its Affiliates as of the Effective Date, (b) that comes into the Control of Ginkgo after the Effective Date other than by means of this Agreement or the activities performed hereunder, or (c) developed during the Term by Ginkgo [***]. + +1.67 "Ginkgo Excluded Use" has the meaning set forth in Section 9.1.6 (Use in Excluded Fields). + +1.68 "Ginkgo Indemnitee" has the meaning set forth in Section 12.1 (Indemnification by BLI). + +1.69 "Ginkgo Inventions" has the meaning set forth in Section 8.2 (Ownership of Ginkgo Inventions and BLI Inventions). + +1.70 "Ginkgo Licensed IP" has the meaning set forth in Section 9.2 (Grants to BLI). + +1.71 "Ginkgo Materials" has the meaning set forth in Section 8.2.1(d) (Ownership of Ginkgo Inventions and BLI Inventions). + +1.72 "Ginkgo Subcontractor" means a Person to whom Ginkgo has subcontracted any of its activities under this Agreement pursuant to Section 2.7 (Subcontracting). + +1.73 "Ginkgo Workflows" means Workflows on the Beacon Platform that are developed by [***]. For clarity, [***]. + +1.74 "Go/No-Go Criteria" has the meaning set forth in Section 2.2.1(g) (Workflow Development Plans - Generally). + +1.75 "Hardware" means any and all hardware, equipment, devices, tools, apparatus, machinery, and electronics including, but not limited to, the Beacon Optofluidic Machine, computer and computer-related hardware, servers, networking equipment, interfaces, databases, support equipment, power supplies, wiring and associated equipment. Page 9 of 85 + + + + + +1.76 "Headstart Invention" means any (a) specific part or component of a [***] (other than any [***], including any [***]) or (b) [***] in its entirety, including [***], in each case, either (i) designated as a "Headstart Invention" in the applicable Workflow Development Plan or (ii) for which Ginkgo has provided, or is slated to provide, by reference to the applicable category of the Workflow Development Plan(s) as further described in Section 2.2.1(f) and Section 2.2.1(h), Development Purchase funding of greater than [***] percent ([***]%) of the Budget set forth in the applicable Workflow Development Plan(s). For clarity, in no event shall any improvements, modifications or other changes to the [***], whether [***] based, [***] or [***], deemed to be a Headstart Invention or be subject to a Headstart Period. + +1.77 "[***]" means, [***] and [***] that [***] and (b) [***]. + +1.78 "Headstart Period" has the meaning set forth in Section 6.1.1 (BLI Standstill). + +1.79 "[***]" means the offering or performance of any [***] services using the Beacon Platform, for commercial sale or otherwise, to [***]; provided that in no event shall [***] include (a) use of the Beacon Platform to [***] if the same does not [***] or (b) the [***] outside of the Beacon Platform. + +1.80 "[***]" means the offering or performance of any [***] services using the Beacon Platform, for commercial sale or otherwise, for [***] applications to the extent specifically related to [***]; provided that in no event shall [***] include using the Beacon Platform to [***] if the same does not [***]. + +1.81 "Incremental Withholding Taxes" has the meaning set forth in Section 7.6 (Taxes). + +1.82 "IND" means an application filed with a Regulatory Authority for authorization to commence Clinical Trials, including: (a) an Investigational New Drug Application as defined in the FFDCA or any successor application or procedure filed with the FDA; (b) any equivalent of a United States IND in other countries or regulatory jurisdictions (i.e., clinical trial application); and (c) all supplements, amendments, variations, extensions and renewals thereof that may be filed with respect to any of the foregoing. + +1.83 "Independent Development" has the meaning set forth in Section 8.9 (Specific Implementation Restrictions). + +1.84 "Initial Workflows" has the meaning set forth in Section 2.2.2 (Committed Workflows). + +1.85 "Initiation" or "Initiate" means, with respect to a Clinical Trial, the first dosing of the first human subject or patient in such Clinical Trial. + +1.86 "Intellectual Property" means all intellectual and industrial property, and all rights therein and thereto, including registration rights thereto, of any kind throughout the world, including Patent Rights, Software, ideas, data, inventions, discoveries, algorithms, formulas, compositions, configurations, specifications, sequences, product applications, formulations, assays, techniques, sketches, drawings, models, works of authorship, copyrights, recordings, moral Page 10 of 85 + + + + + +rights, mask works, design rights, trademarks, trade names, trade dress, service marks, logos, trade secrets, methods, processes, techniques, developments, know-how, and all other similar rights, whether or not registered or capable of being registered in any jurisdiction. + +1.87 "Intended End of Term" means the later of (a) the seventh (7th) anniversary of the Effective Date and (b) the date determined to be the "Intended End of Term" under Section 7.2.2(d) (Effects of Tolling). + +1.88 "[***]" has the meaning set forth in Section 14.5.2 (Dispute Resolution). + +1.89 "JRC" or "Joint Review Committee" is defined in Section 3.1 (Joint Review Committee). + +1.90 "Key Collaboration Workflow" means a Collaboration Workflow designated as a "Key Collaboration Workflow" by the JRC pursuant to Section 3.2.11 (JRC Responsibilities). + +1.91 "Key Person" has the meaning set forth in Section 5.4.1(b) (Dedicated FTEs; Key Persons). + +1.92 "Lead Time" means, with respect to a Beacon Optofluidic Machine (including related Hardware and Software), Consumable or Service, the "Lead Time" for such Beacon Optofluidic Machine, Consumable or Service as set forth in Schedule 1.92 (Lead Time) or as otherwise mutually agreed upon by the Parties in writing. + +1.93 "Licensed Field" means any and all organisms, products, fields and uses other than the Excluded Fields. + +1.94 "Licensed Product" means a [***] product within the Licensed Field, including (a) [***] or (b) [***] by such [***] described in clause (a) of this Section 1.94, in each case of ((a)-(b)), initially produced on the Beacon Platform or, if not initially produced on the Beacon Platform, is later [***] through use of the Beacon Platform, with respect to each, in the conduct of activities [***] to produce such a product. + +1.95 "List Price" means, at any given time and for any Beacon Optofluidic Machine, Consumable or Service, the price for such Optofluidic Machine, Consumable or Service [***] at such time. + +1.96 "Losses" has the meaning set forth in Section 12.1 (Indemnification by BLI). + +1.97 "MAA" has the meaning set forth in Section 1.44 ("Drug Approval Application"). + +1.98 "[***]" means [***]. + +1.99 "Maximum Amount" has the meaning set forth in Section 5.3.1 (Issuance). + +1.100 "Milestone Event" has the meaning set forth in Section 7.4.2 (Milestone Payments). Page 11 of 85 + + + + + +1.101 "Milestone Payment" has the meaning set forth in Section 7.4.2 (Milestone Payments). + +1.102 "Minimum Cumulative Purchase Commitment" means, with respect to a Contract Year, the amount set forth in the column "Minimum Cumulative Purchase Commitment" in Table 7.2.2 for such Contract Year, as such Minimum Cumulative Purchase Commitment may be amended from time to time under this Agreement. + +1.103 "NDA" has the meaning set forth in Section 1.44 ("Drug Approval Application"). + +1.104 "OptoSelect Chips" means those BLI microfluidic chips described in Schedule 1.104 (OptoSelect Chips) and any other BLI chip used on the Beacon Optofluidic Machine that is developed to execute Workflows. + +1.105 "Party" and "Parties" has the meaning set forth in the Preamble. + +1.106 "Patent Rights" means any and all (a) issued patents, (b) pending patent applications, including all provisional applications, substitutions, continuations, continuations-in-part, divisions and renewals, and all patents granted thereon, (c) patents-of-addition, reissues, reexaminations and extensions or restorations by existing or future extension or restoration mechanisms, including patent term adjustments, patent term extensions, supplementary protection certificates or the equivalent thereof, (d) inventor's certificates, (e) other forms of government-issued rights substantially similar to any of the foregoing and (f) United States and foreign counterparts of any of the foregoing. + +1.107 "Performance Service Plan" shall mean the plan set forth in Schedule 1.107 (Performance Service Plan). + +1.108 "Permitted Subcontractor(s)" means, individually or collectively, BLI Subcontractor(s) and Ginkgo Subcontractor(s). + +1.109 "Person" means any natural person, corporation, unincorporated organization, partnership, association, joint stock company, joint venture, limited liability company, trust or government or any agency or administrative or political subdivision of any government, or any other entity. + +1.110 "Phase II Clinical Trial" means a Clinical Trial, the principal purpose of which is to make a preliminary determination as to whether a pharmaceutical product is safe for it intended use and to obtain sufficient information about such product's efficacy, in a manner that is generally consistent with 21 CFR § 312.21(b), as amended (or its successor regulation), to permit the design of further Clinical Trials. For clarity, A "Phase II Clinical Trial" shall include any clinical trial that would or does satisfy the requirements of 21 C.F.R. § 312.21(b) or any comparable regulation outside the United States whether or not it is designated a Phase II Clinical Trial. + +1.111 "Phase III Clinical Trial" means a pivotal Clinical Trial with a defined dose or a set of defined doses of a pharmaceutical product designed to ascertain efficacy and safety of such product, in a manner that is generally consistent with 21 CFR § 312.21(c), as amended (or its successor regulation), for the purpose of enabling the preparation and submission of a Drug Page 12 of 85 + + + + + +Approval Application. A "Phase III Clinical Trial" shall include any clinical trial that would or does satisfy requirements of 21 C.F.R. § 312.21(c) or any comparable regulation outside the United States., whether or not it is designated a Phase III Clinical Trial. + +1.112 "PMDA" means Japan's Pharmaceuticals and Medical Devices Agency and any successor agency(ies) or authority having substantially the same function. + +1.113 "Preamble" means the first, unnumbered paragraph of this Agreement. + +1.114 "Product Warranty" means, with respect to any Beacon Optofluidic Machine or Consumable, that (a) the representations, warranties and covenants of BLI set forth in the applicable BLI Terms and Conditions (including the product warranties therein) are true with respect to such Beacon Optofluidic Machine or Consumable, (b) with respect to a Beacon Optofluidic Machine, installation and qualification of such Beacon Optofluidic Machines are in accordance with, and meet the standards of, BLI's then-existing [***], such standards to be at least as stringent as those set forth in [***] and (c) BLI does not have knowledge of any defect that would result in a [***] other than those defects [***] or the [***] or any reason that such Beacon Optofluidic Machine or each Consumable is [***]. + +1.115 "Production Purchases" means the sum of payments made by Ginkgo to BLI for: + +1.115.1 purchases of Beacon Optofluidic Machines together with any associated freight, insurance, customs charges, tariffs or other transportation charges; + +1.115.2 purchases of OptoSelect Chips and other Consumables used by the Beacon Platform outside of a Workflow Development Plan together with any associated freight, insurance, customs charges, tariffs or other transportation charges; + +1.115.3 FAS or other BLI [***] personnel, as requested by Ginkgo, for general support services (including all payments for a Performance Service Plan), including [***] with respect to activities performed outside of a Workflow Development Plan; + +1.115.4 [***]; + +1.115.5 [***]; and + +1.115.6 any other amounts, including for [***] (including for Beacon Optofluidic Machines or any Consumable as applicable, properly charged and invoiced to Ginkgo and paid by Ginkgo under this Agreement in connection with the supply or provision of goods and services by BLI, which are not Development Purchases. + +1.116 "Purchase Order" has the meaning set forth in Section 5.3.1 (Issuance). + +1.117 "Purpose" shall have the meaning set forth in the first WHEREAS clause of this Agreement. + +1.118 "Receiving Party" has the meaning set forth in Section 10.1 (Confidential Information). Page 13 of 85 + + + + + +1.119 "Regulatory Approval" means, with respect to a country in the Territory, any and all approvals (including Drug Approval Applications that have been approved by a Regulatory Authority), licenses, registrations or authorizations of any Regulatory Authority necessary to commercialize a product in such country[***]. + +1.120 "Regulatory Authority" means any applicable supra-national, federal, national, regional, state, provincial or local governmental or regulatory authority, agency, department, bureau, commission, council or other entities (e.g., the FDA, EMA and PMDA) regulating or otherwise exercising authority with respect to activities contemplated in this Agreement. + +1.121 "Remedial Plan" has the meaning set forth in Section 5.4.3(a) (Remedial Efforts). + +1.122 "Responsible Tax Party" has the meaning set forth in Section 7.6 (Taxes). + +1.123 "Rolling Forecast" has the meaning set forth in Section 5.1 (Forecasts). + +1.124 "Senior Officers" means, (a) with respect to Ginkgo, [***] and (b) with respect to BLI, [***]. + +1.125 "Services" means services to be provided by or on behalf of BLI to Ginkgo under this Agreement, including with respect to Beacon Platform Software development services, installation services, support services and general training services, but excluding those services provided under a Workflow Development Plan. + +1.126 "Service Level Standards" means, with respect to any service at any given time, the standards for the performance of such service most recently agreed upon by the Parties at such time or if no such standards have been previously agreed upon by the Parties, the standards for the performance of such service then in effect for BLI's other [***] customers. + +1.127 "Software" means full applications or programs as well as partial applications, programs or sections of software code, whether source code, object code or other form, in each case incorporated in or otherwise used by the Beacon Optofluidic Machine. + +1.128 "Specific Implementation" means any individual component of any Collaboration Workflow that is designated as a "Specific Implementation" by the Parties in a Workflow Development Plan or, if the Parties have made no designation, (a) is [***] for a particular [***] pursuant to a Workflow Development Plan or [***]; or (b) incorporates [***] proprietary to Ginkgo that [***], provided that, to the extent such [***] provided by Ginkgo [***]. + +1.129 "Specifications" means, (a) with respect to any Beacon Optofluidic Machine (including related Hardware and Software), BLI's specifications set forth in Schedule 1.10 (Beacon Optofluidic Machine), along with any other specifications mutually agreed upon by the Parties in writing, in each case for such Beacon Optofluidic Machine (including related Hardware and Software) or (b) with respect to any Consumable, the specifications set forth in Schedule 1.36 (Consumables), along with any other specifications mutually agreed upon by the Parties in writing, in each case for such Consumable. Page 14 of 85 + + + + + +1.130 "Substantially Completed" means, with respect to a Workflow, that such Workflow (a) [***] and (b) is judged by the JRC (or Expert Panel, if applicable) to be substantially complete based upon [***]. For clarity, [***] will be considered by the JRC (or Expert Panel, if applicable) to be [***] of substantial completion. + +1.131 "Term" has the meaning set forth in Section 13.1 (Term). + +1.132 "Territory" means worldwide except for any and all embargoed and sanctioned countries as identified by the U.S. government. + +1.133 "Third Party" means any Person other than Ginkgo and its Affiliates and BLI and its Affiliates. + +1.134 "United States" or "U.S." means the United States of America, including its territories and possessions. + +1.135 "Upfront Payment" has the meaning set forth in Section 7.1 (Upfront Payment). + +1.136 "VAT" has the meaning set forth in Section 7.6 (Taxes). + +1.137 "Workflow" means a defined set of tasks performed using the Beacon Platform in a certain order utilizing specific Consumables to [***], including to load, culture, assay and export cells. + +1.138 "Workflow Development Plan(s)" has the meaning set forth in Section 2.2 (Workflow Development Plans). + +1.139 "Working Group" has the meaning set forth in Section 3.8 (Working Groups). 2. DEVELOPMENT + +2.1 Collaboration in General. The Parties will undertake this Agreement in furtherance of the Purpose and under the guidance of the JRC pursuant to Article 3 (Joint Review Committee). During the Term, each Party will use diligent efforts to implement and perform (itself or through its Permitted Subcontractors) its respective obligations under and in accordance with (a) this Agreement and (b) each Workflow Development Plan in accordance with the timelines set forth in such Workflow Development Plan. Each Party will reasonably cooperate with each other in the performance of their responsibilities under this Agreement and each Workflow Development Plan, including (i) responding to reasonable requests by the other Party submitted in accordance with this Agreement to provide information reasonably necessary for the performance of such requesting Party's obligations under this Agreement (including any Workflow Development Plan) and (ii) causing its personnel, agents and representatives, while at the other Party's facility, to abide by the written work rules and facility regulations applicable to such facility as provided in advance by such other Party. Page 15 of 85 + + + + + +2.2 Workflow Development Plans. + +2.2.1 Generally. Subject to the requirements of Section 2.2.2 (Committed Workflows), from time to time during the Term, the Parties shall discuss in good faith entering into work plans setting forth the activities to be undertaken by the Parties to develop a specific Collaboration Workflow in furtherance of the Purpose (each such work plan that is consistent with the terms of this Agreement and approved by the JRC, and as may be amended from time to time in accordance with this Agreement, a "Workflow Development Plan"); provided that the Parties and the JRC will manage the pipeline of Collaboration Workflows such that [***]. If the Parties mutually agree that a new Workflow Development Plan should be undertaken by the Parties in order to further the Purpose, then the Parties shall work together in good faith to prepare an initial draft of the proposed Workflow Development Plan on commercially reasonable terms. Once the proposed Workflow Development Plan has been drafted, such proposed Workflow Development Plan will be submitted to the JRC and the JRC shall review such proposed Workflow Development Plan and either (a) reject the proposed Workflow Development Plan, (b) accept the proposed Workflow Development Plan or (c) amend the proposed Workflow Development Plan prior to approving such plan. If the JRC approves a proposed Workflow Development Plan, such proposed plan shall be deemed a "Workflow Development Plan" under this Agreement and attached to this Agreement as an Exhibit (the first approved Workflow Development Plan to be attached as Exhibit A-1 and subsequently approved Workflow Development Plans to be sequentially numbered as Exhibit A-2, Exhibit A-3, etc.) and, through such attachment, made a part of this Agreement. BLI hereby acknowledges and agrees that in no event will BLI perform any work for Ginkgo in connection with this Agreement other than pursuant to a JRC-approved Workflow Development Plan, other than with respect to BLI providing Ginkgo with any FAS support or other standard service and support pursuant to the terms of this Agreement. At a minimum, each Workflow Development Plan will include the following information: + +(a) defined objective and scope of the relevant Collaboration Workflow; + +(b) a detailed description of the work to be performed under such Workflow Development Plan and which components of the Collaboration Workflow shall be deemed a Generalized Workflow or a Specific Implementation; + +(c) a detailed description of each Party's roles and responsibilities with respect to the work to be performed under such Workflow Development Plan; + +(d) the Budget[***] and the allocation of responsibility between the Parties for the funding of such Budget; + +(e) timelines for performing and completing work under such Workflow Development Plan; Page 16 of 85 + + + + + +(f) identification of deliverables to be created by a Party in connection with the work to be performed, including (i) any operating protocol, Software, Hardware, consumable, Beacon Optofluidic Machine Improvement or Workflow to be created and (ii) categories (e.g., [***]) of Headstart Inventions (and specific Headstart Inventions) that the JRC reasonably believes, during the drafting of the Workflow Development Plan, will result from the work to be performed by the Parties under the Workflow Development Plan; + +(g) (i) [***] descriptions of one or more go/no-go criteria, if any, at which time the JRC shall specifically determine whether to continue work under such Workflow Development Plan (each such criteria, a "Go/No-Go Criteria"); (ii) [***] metrics associated with such Collaboration Workflow being Substantially Completed; (iii) additional [***] criteria for the work to be performed and (iv) [***] criteria for any deliverables to be created, including any Workflows (such criteria with respect to Collaboration Workflows to include any additional criteria to be used when determining if a Collaboration Workflow has been Substantially Completed); and + +(h) (i) the anticipated Development Purchase amounts associated with any Collaboration Workflow that is the subject of such Workflow Development Plan and (ii) with respect to any Headstart Invention, the anticipated Development Purchase amounts (based on the Budget) to be paid by Ginkgo for [***] a Headstart Invention and each category of Headstart Inventions set forth in the applicable Workflow Development Plan. + +2.2.2 Committed Workflows. With respect to the Workflow Development Plans to be proposed to the JRC for approval and conducted by the Parties during the [***] Contract Years, subject to the requirement set forth in Section 7.2.2(b)(i) (Development Purchase Commitments) that not less than [***] ([***]%) of the Development Purchases made in the [***] Contract Years be for the development of Workflows for [***], the Parties agree that such Workflow Development Plans shall focus on yeast and mammalian cells and the [***] ([***]) initial Workflow Development Plans shall be directed toward the categories of Workflows set forth in Schedule 2.2.2 (Initial Workflow Development Plans) hereto (collectively, the "Initial Workflows"). At least [***] ([***]) of the Initial Workflows shall also be deemed to be Key Collaboration Workflows by the JRC (including as indicated on Schedule 2.2.2 (Initial Workflow Development Plans)). A draft outline of the first [***] ([***]) Workflow Development Plans for Initial Workflows are attached hereto as Exhibit B. Promptly following the Effective Date and in no event later than [***] ([***]) days after the Effective Date, the Parties shall finalize the Workflow Development Plans for such first [***] ([***]) Initial Workflows and begin implementation of such Initial Workflows. Promptly thereafter, the Parties shall develop a Workflow Development Plan for each such Initial Workflow to be submitted to the JRC for rejection or approval pursuant to Section 2.2.1 (Workflow Development Plans - Generally). Page 17 of 85 + + + + + +2.2.3 Retooling and Development Costs. If, pursuant to Section 3.2.6, the JRC determines that Hardware or Consumables will need to be developed, retooled or modified in order to create Collaboration Workflows, then Ginkgo and BLI shall discuss and negotiate in good faith the sharing of the costs associated therewith, which, once mutually agreed by the Parties, will be proposed to the JRC in the form of an amendment to the applicable Workflow Development Plan pursuant to Section 2.3.2 (Amendments by the Parties); provided that in all events the Intellectual Property in such developed, retooled or modified Hardware or Consumables will be [***]. + +2.3 Amendments to Workflow Development Plans. + +2.3.1 Amendments Raised by the JRC. The JRC will periodically review (at least once per [***]) each approved Workflow Development Plan and each Party's performance thereunder to determine whether amendments are needed with respect to such Workflow Development Plan in order to more efficiently develop the relevant Workflow, which review will include [***]. If the JRC determines that an amendment is needed with respect to any approved Workflow Development Plan, then the JRC shall amend and restate the applicable Workflow Development Plan to reflect such amendment with such amended and restated Workflow Development Plan to replace the previously attached Workflow Development Plan and, through such attachment and, after signature by each of the Parties, made a part of this Agreement. + +2.3.2 Amendments Raised by the Parties. Notwithstanding anything in Section 2.3.1 (Amendments by the JRC) to the contrary, either Party may, at any time, propose amendments to a Workflow Development Plan for the JRC's consideration and such Party shall submit the proposed amendment to the JRC for consideration. Following submission of a proposed amendment to the JRC, the JRC shall review such proposed amendment and either (a) reject the proposed amendment to such Workflow Development Plan, (b) accept the proposed amendment to such Workflow Development Plan or (c) further amend the proposed amendment to such Workflow Development Plan for approval by the JRC. If the JRC approves a proposed amendment to a Workflow Development Plan, then the JRC shall amend and restate the applicable Workflow Development Plan to reflect such amendment with such amended and restated Workflow Development Plan to replace the previously attached Workflow Development Plan and, after signature by each of the Parties, be made a part of this Agreement. + +2.4 Costs under Workflow Development Plans. + +2.4.1 Reporting. Within [***] ([***]) days following the end of each [***], [***], BLI shall provide a detailed report to Ginkgo setting forth the activities conducted by BLI [***] during such [***] and the costs for such activities [***]. If Ginkgo disputes any costs set forth in BLI's report, it shall so notify BLI in writing within [***] ([***]) days of receiving such report and provide the specific reasons for the dispute and the Parties will attempt to resolve such dispute in good faith for [***] ([***]) days following such notice. In the event the Parties are unable to resolve such dispute in such [***] ([***]) day period, then either Party may initiate dispute resolution in accordance with Section 14.5.2 (Dispute Resolution) and [***]; provided that, during the pendency of any such dispute, if Page 18 of 85 + + + + + +[***], [***] and, if any such disputed costs paid by Ginkgo are finally determined, pursuant to Section 14.5.2 (Dispute Resolution) or by mutual agreement of the Parties, to not have been owed to BLI at the time of payment, BLI will provide a credit against future purchases made by Ginkgo in the amount of the overpayment; provided further that, in the event that there are not sufficient future purchases made by Ginkgo during the Term to fully so credit, BLI will promptly refund any remaining amount of the overpayment to Ginkgo. + +2.4.2 Payment. [***], after generating and delivering a report as set forth in Section 2.4.1 (Reporting) or at such other time as may be specified [***], BLI shall issue an invoice to Ginkgo within [***] ([***]) days of Ginkgo receiving such report or, if any costs under BLI's report are disputed pursuant to Section 2.4.1 (Reporting), within [***] ([***]) days of resolution of such dispute, such invoice to be for the amount of costs owed by Ginkgo, if any, to effect the appropriate cost allocation [***] in such [***]. Notwithstanding anything to the contrary in this Agreement, in no event shall BLI provide an invoice (a) requesting payment, nor shall Ginkgo be responsible, in any given [***], for any costs incurred by BLI for any activity in excess of [***] percent ([***]%) of the costs of such activity as set forth in the applicable Workflow Development Plan's Budget for such [***] or (b) for any Development work performed outside the Workflow Development Plan. Ginkgo shall pay all undisputed amounts under an invoice received from BLI under this Section 2.4.2 (Payment) within [***] ([***]) days after receipt of such BLI invoice, and any overdue payments on undisputed amounts shall be subject to payment of interest pursuant to Section 7.10 (Late Payment). All amounts received by BLI in connection with the performance of each Workflow Development Plan shall be non-refundable except as otherwise set forth in Section 7.8 (Audits) and Section 6.1 (Headstart Period). + +2.5 Termination of Workflow Development Plans. A Workflow Development Plan, once approved by the JRC, may be terminated by the JRC, including, by way of example, if: (a) both Parties provide notice to the JRC requesting such termination or (b) the JRC finds that (i) termination is [***] or (ii) that [***]. In the event of termination of a Workflow Development Plan under this Section 2.5 (Termination of Workflow Development Plans), BLI will cease working on the Workflow Development Plan and [***] cancel orders or stop the work of a Permitted Subcontractor or any other supplier. Notwithstanding termination of a Workflow Development Plan, Ginkgo shall pay BLI for Ginkgo's share, if any, of the reasonable costs associated with [***] incurred in accordance with this Agreement prior to the decision to terminate such Workflow Development Plan to the extent that BLI could not, after using [***], (A) stop or cancel such or (B) relocate or reassign to any work to be performed for another Person. + +2.6 Limitations. Notwithstanding anything to the contrary in this Agreement, neither Party will be required to conduct any activity to develop a Workflow other than those activities allocated to it in a Workflow Development Plan and no proposed Workflow Development Plan (or, subject to Section 2.3 (Amendments to Workflow Development Plans), any amendment thereto) shall become binding on the Parties until approved by the JRC. + +2.7 Subcontracting. Each Party may only subcontract its activities under this Agreement (including under a Workflow Development Plan) with the other Party's consent; provided that such consent shall not be necessary if (a) such subcontracting of activities is [***] Page 19 of 85 + + + + + +of such subcontracting Party (e.g. [***]) or (b) [***] (e.g. [***]) in order for a Party to [***]. In any event, prior to any subcontracting by a Party to a Permitted Subcontractor, the subcontracting Party shall obtain a written undertaking from the Permitted Subcontractor that it will be subject to the applicable terms and conditions of this Agreement, including the confidentiality provisions of Article 10 (Confidentiality). Subcontracting will not relieve a Party of its obligations under this Agreement and each Party will remain directly liable for the acts and omissions of its Permitted Subcontractors. Any breach of this Agreement by a Permitted Subcontractor will be deemed to be a breach by the Party that subcontracted its activities to such breaching Permitted Subcontractor. + +2.8 Records. Each Party shall, and shall cause its Affiliates and Permitted Subcontractors to, maintain records in sufficient detail for the other Party to confirm compliance with this Agreement and in good scientific manner appropriate for patent and regulatory purposes under Applicable Law, which shall [***] properly reflect all activities conducted and results achieved by such Party under this Agreement. Such records shall be retained by such Party, its Affiliates or Permitted Subcontractors until [***] ([***]) years after the end of the period to which such books and records pertain or for such longer period as may be required by Applicable Law. Each Party shall have the right, during normal business hours and upon reasonable notice, to inspect all such records of the other Party, its Affiliates or Permitted Subcontractors. The reviewing Party shall be responsible for all costs of the inspection but shall have no right to copy or retain records. All disclosed records and the information disclosed therein shall be treated as Confidential Information in accordance with Article 10 (Confidentiality). 3. JOINT REVIEW COMMITTEE + +3.1 Formation; Chairperson. Within [***] ([***]) days of the Effective Date (or such other date as may be mutually agreed to by the Parties), the Parties will establish a Joint Review Committee ("JRC") comprised of two (2) representatives of Ginkgo and two (2) representatives of BLI, each of whom must have the requisite experience and seniority to enable such Person to make decisions on behalf of the Party it represents with respect to the issues falling within the jurisdiction of the JRC. Each Party may replace its representatives to the JRC at any time upon prior written notice to the other Party; provided that such replacement representatives must have the experience and seniority required under this Section 3.1 (Formation; Chairperson). [***] will select from its representatives the chairperson for the JRC, whose role shall be to call the periodic meetings, and publish meeting minutes. From time to time during the Term, [***] may change the representative who will serve as chairperson upon written notice to [***]. + +3.2 JRC Responsibilities. The JRC will have that specific decision-making authority expressly enumerated in this Agreement and will provide oversight and a forum for discussing all matters arising in connection with this Agreement, including with respect to planning, reviewing and coordinating the various activities to be undertaken by the Parties pursuant to a Workflow Development Plan. In particular, the JRC will be responsible for: + +3.2.1 rejecting or approving proposed Workflow Development Plans submitted to it by a Party or as amended by the JRC pursuant to Section 2.2.1 (Workflow Development Plans - Generally); Page 20 of 85 + + + + + +3.2.2 pursuant to Section 2.2.1 (Workflow Development Plans - Generally), managing the pipeline of anticipated Collaboration Workflows so that [***] including in the event a Workflow Development Plan is terminated early by the JRC; + +3.2.3 pursuant to Section 2.3.1 (Amendments by the JRC), periodically reviewing (at least once per [***]) each Workflow Development Plan and each Party's performance thereunder in order to determine whether amendments are needed with respect to such Workflow Development Plan and, if amendments are needed, revising the Workflow Development Plan as necessary; + +3.2.4 rejecting, prioritizing, approving or amending proposed amendments to Workflow Development Plans submitted to it by a Party pursuant to Section 2.3.2 (Amendments by the Parties); + +3.2.5 deciding whether [***] are at issue and whether to terminate a Workflow Development Plan as further described in Section 2.5 (Termination of Workflow Development Plans); + +3.2.6 in connection with each Workflow Development Plan, determining whether Hardware or Consumables will need to be developed or retooled in order to create Collaboration Workflows such that the Parties should discuss sharing of the costs associated therewith pursuant to Section 2.2.3 (Retooling and Development Costs); + +3.2.7 in connection with each Workflow Development Plan, designating (a) which components of Workflows are BLI Proprietary Workflows, which are Generalized Workflows, and which are Specific Implementations and (b) (i) which categories (e.g., [***]) of Headstart Inventions (and specific Headstart Inventions within such categories) that the JRC reasonably believes, during the drafting of the Workflow Development Plan, will result from the work to be performed by the Parties under the Workflow Development Plan and (ii) a reasonable estimation of the Development Purchase funding to be paid by Ginkgo with respect to the development of such categories of Headstart Inventions, which estimation will be set forth in the Budget for the applicable Workflow Development Plan; provided that, in no event will failure by the JRC to list (A) specific parts or components of Generalized Workflows or Collaboration Workflows or (B) Consumables, including OptoSelect Chips, with respect to (A)-(B), as Headstart Inventions in a Workflow Development Plan be given any significance in determining whether such invention constitutes a Headstart Invention; + +3.2.8 determining whether or not a Collaboration Workflow has been Substantially Completed based on the metrics for such Collaboration Workflow as set forth in the applicable Workflow Development Plan; + +3.2.9 pursuant to Section 7.2.1 (Purchase Commitments - Generally), determining whether additional development work is necessary in order to enable Ginkgo to deploy the Beacon Platform as specified in a Workflow Development Plan and if so, then determining how to adjust the Development Purchase Commitments and Production Purchase Targets for the then-current and future Contract Years (with the understanding the JRC has no power to modify the Maximum Amount or the Term); Page 21 of 85 + + + + + +3.2.10 upon determination by the JRC or the Expert Panel that a Collaboration Workflow has not been Substantially Completed, discussing if and how to address the Production Purchase amounts that would have been relevant to such Collaboration Workflow; + +3.2.11 designating at least [***] ([***]) Collaboration Workflows as Key Collaboration Workflows within [***] ([***]) years of the Effective Date and at least [***] ([***]) Collaboration Workflows as Key Collaboration Workflows within [***] ([***]) years of the Effective Date; and + +3.2.12 performing such other functions as expressly set forth in this Agreement as being under the purview of the JRC or as the Parties may mutually agree in writing, except where in conflict with any provision of this Agreement. + +3.3 Meetings and Minutes. Unless otherwise mutually agreed to by the Parties, the JRC will meet each [***] by audio or video teleconference and, at a minimum, [***] each Contract Year in person, with the location for such meetings alternating between Ginkgo and BLI facilities (or such other locations as are mutually agreed by the Parties). Meetings of the JRC will be effective only if a quorum of the JRC (as defined in Section 3.4 (Procedural Rules)) is present or participating by videoconferencing. The chairperson of the JRC will be responsible for calling meetings on no less than [***] ([***]) Business Days' notice, unless exigent circumstances require shorter notice. Each Party will make all proposals for agenda items and will provide all appropriate information with respect to such proposed items at least [***] ([***]) Business Days in advance of the applicable meeting; provided that under exigent circumstances requiring input by the JRC, a Party may provide its agenda items to the other Party within a shorter period of time in advance of the meeting, or may propose that there not be a specific agenda for a particular meeting, so long as the other Party consents to such later addition of such agenda items or the absence of a specific agenda for such meeting, such consent not to be unreasonably withheld, conditioned or delayed. The JRC will designate an individual to prepare and circulate for review and approval of the Parties minutes of each meeting [***] ([***]) Business Days after the meeting. The Parties will agree on the minutes of each meeting promptly, but in no event later than the next meeting of the JRC. + +3.4 Procedural Rules. The JRC will have the right to adopt such standing rules as will be necessary for its work, to the extent that such rules are not inconsistent with this Agreement. A quorum of the JRC will exist whenever there is present at a meeting at least one (1) representative appointed by each Party. The JRC will take action by consensus of the representatives present at a meeting at which a quorum exists, with each Party having a single vote irrespective of the number of representatives of such Party in attendance, or by a written resolution signed by at least one representative appointed by each Party. From time to time during the Term, a Party may invite non-voting employees (including its Alliance Manager), consultants and other advisors, experts and specialists to attend meetings of the JRC; provided that such attendees (a) will not vote in the decision-making process of the JRC, (b) are bound by obligations of confidentiality and non-use that are at least as protective of the Parties as set forth in this Agreement and that restrict use and disclosure of information learned while attending JRC meetings and (c) can be required to depart the meeting upon the request of the other (non-inviting) Party, in its sole discretion, due to confidentiality or business reasons. Page 22 of 85 + + + + + +3.5 Decision-Making. If the JRC cannot, or does not, reach consensus on an issue at any JRC meeting or within a period of [***] ([***]) Business Days thereafter (or such other period of time as mutually agreed by the Parties or by consensus of the JRC), then upon the request of either Party, the disagreement will first be referred to the Senior Officers of the Parties, who will confer in good faith on the resolution of the issue. Any final decision mutually agreed to by the Senior Officers will be conclusive and binding on the Parties. If the Senior Officers are not able to agree on the resolution of any such issue within [***] ([***]) days after such issue was first referred to them, then, if such decision is [***], [***] and, for all other decisions, shall be resolved consistent with the provisions of this Section 3.5 (Decision-Making): + +3.5.1 subject to Section 3.5.3, if the matter concerns (a) [***], including any [***] or (b) the [***], the final decision shall be made by the Senior Officer of Ginkgo; provided that, in no event may Ginkgo exercise its final-decision making authority, including in connection with amending an approved Workflow Development Plan, in any manner that would (i) [***] BLI's obligations under such Workflow Development Plan, (ii) obligate or require BLI to increase its spending under such Workflow Development Plan by more than [***] percent ([***]%) of BLI's spending obligation under such Workflow Development Plan or (iii) modify the Minimum Cumulative Purchase Commitment or the Full Purchase Target; + +3.5.2 subject to Section 3.5.3, if the matter concerns [***], including any [***] (provided that any [***] shall not affect decision-making authority under this Section 3.5 (Decision-Making)), the final decision shall be made by the Senior Officer of BLI; provided that, in no event may BLI exercise its final-decision making authority, including in connection with amending an approved Workflow Development Plan, in any manner that would (a) [***] Ginkgo's obligations under such Workflow Development Plan [***] or (b) obligate or require Ginkgo to increase its spending under such Workflow Development Plan by more than [***] percent ([***]%) of Ginkgo's spending obligation under such Workflow Development Plan, or (c) modify the Minimum Cumulative Purchase Commitment or the Full Purchase Target; + +3.5.3 if the matter is determining (a) whether [***] or (b) whether [***] (including with respect to [***]), with respect to each, at either Party's request, the dispute shall be resolved in an accelerated manner by a panel of three (3) independent Third Parties, each having expertise with respect to the subject matter of the applicable Workflow Development Plan (such panel, an "Expert Panel"), subject to the following process: (i) each Party will engage one independent Third Party expert for the Expert Panel [***] after [***] to serve on the Expert Panel, (ii) within [***] ([***]) days of any request to refer the matter to an Expert Panel or, if earlier, as promptly as reasonably practicable after each Party's engagement of its Third Party Expert, the Parties' two (2) Third Party experts shall mutually agree on a third (3rd) independent Third Party expert who will serve on such panel and as chairperson of the panel, (iii) the Expert Panel will reach a decision as to such matter (including whether [***]) as promptly as practicable, which may include having the JRC or Parties submit information in support of the Expert Panel making a determination, Page 23 of 85 + + + + + +but within no greater than [***] ([***]) days of the third (3rd) expert being chosen and (iv) [***] the Parties will be bound by the determination of the Expert Panel. Each Party shall bear its own costs of participating in the proceeding, including the costs incurred by its Third Party expert, and shall equally share the costs incurred by the third (3rd) Third Party expert selected jointly by the Parties' two (2) Third Party Experts, except that, with respect to [***]. The Expert Panel shall be and is empowered to request additional information or materials from one or both Parties as reasonably necessary for the Expert Panel to investigate and render a decision, [***]. The Parties shall [***] with all such requests and decisions. + +3.6 Limitations on Authority. Each Party will retain the rights, powers and discretion granted to it under this Agreement and, unless expressly provided in this Agreement, no rights, powers or discretion will be delegated to or vested in the JRC. The JRC will not have the power to accept, amend, modify, waive or determine compliance with this Agreement; provided that, for clarity, the JRC may reject, accept or amend proposed Workflow Development Plans pursuant to Section 2.2.1 (Workflow Development Plans - Generally) or review, amend or restate an approved Workflow Development Plan pursuant to Section 2.3 (Amendments to Workflow Development Plans) or terminate an approved Workflow Development Plan but, for clarity, in no event may the JRC amend or restate any Workflow Development Plan so it includes work in any Excluded Field. Notwithstanding anything to the contrary, no decision by the JRC or by a Party within the JRC will: (a) require the other Party to breach any obligation or agreement that such other Party may have with or to a Third Party [***] or (b) amend, modify, or waive a Party's compliance with, this Agreement (by way of example, a decision to [***]), any of which shall require mutual written agreement of the Parties. + +3.7 Alliance Managers. Each Party will appoint one employee of such Party who will oversee contact between the Parties for all matters between meetings of each JRC and will have such other responsibilities as the Parties may agree in writing after the Effective Date (each, an "Alliance Manager"). Each Party may replace its Alliance Manager at any time by notice in writing to the other Party. The Alliance Managers will work together to manage and facilitate the communication between the Parties under this Agreement, including the resolution (in accordance with the terms of this Agreement) of issues between the Parties that arise in connection with this Agreement. + +3.8 Working Groups. From time to time, the JRC may establish and delegate duties to sub-committees or directed teams (each, a "Working Group") on an "as-needed" basis to oversee particular projects or activities. Each such Working Group will be constituted and will operate as the JRC determines; provided that each Working Group will have equal representation from each Party, unless otherwise mutually agreed. Working Groups may be established on an ad hoc basis for purposes of a specific project or on such other basis as the JRC may determine. Each Working Group and its activities will be subject to the oversight, review and approval of, and will report to, the JRC. In no event will the authority of the Working Group exceed that specified by the JRC for such Working Group. All decisions of a Working Group will be by consensus. Any disagreement between the designees of Ginkgo and BLI with respect to a Working Group will be referred to the JRC for resolution. Page 24 of 85 + + + + + +3.9 Expenses. Each Party will be responsible for all travel and related costs and expenses for its members and other representatives to attend meetings of, and otherwise participate in, the JRC or other Working Group. 4. APPLICABILITY OF BLI TERMS AND CONDITIONS. + +With respect to Beacon Optofluidic Machines (including related Hardware and Software), Consumables and Services for which Ginkgo has placed a Purchase Order pursuant to this Agreement, the Parties agree to the BLI Terms and Conditions that apply with respect to Beacon Optofluidic Machines (including related Hardware and Software), Consumables and Services, unless, notwithstanding anything to the contrary set forth in the BLI Terms and Conditions (including any language regarding the treatment of additional or different terms set forth therein), a term in such BLI Terms and Conditions is inconsistent with a term in this Agreement, in which case this Agreement shall control, including as follows: + +4.1.1 this Agreement, and not the BLI Terms and Conditions, shall solely set forth the fields in which Ginkgo has and does not have the ability to use the Beacon Optofluidic Machines (including related Hardware and Software), Consumables and Services for certain purposes (e.g., the Excluded Field); + +4.1.2 BLI's liability with respect to any Failure to Supply, penalties for late delivery and obligations with respect to short supply shall be as set forth in this Agreement, including Section 5.4.3 (Failure to Supply) of this Agreement; + +4.1.3 any right of BLI to use Ginkgo's data, including Collaboration Data, is solely set forth in this Agreement, including Section 8.5 (Use of Collaboration Data) and the BLI Terms and Conditions shall give BLI no right to use any data of Ginkgo or its Affiliates, including Collaboration Data; + +4.1.4 each Party's indemnification obligations and matters relating to the extent of its liability (e.g. consequential damages waiver) shall solely be determined under the terms of this Agreement (including Section 11.6 (No Consequential Damages) and Section 12 (Indemnification; Insurance)); + +4.1.5 any disputes between the Parties related to Beacon Optofluidic Machines (including related Hardware and Software), Consumables, Services or the activities under this Agreement (including the performance of the Workflow Development Plans) shall be governed by Section 14.5 (Governing Law; Dispute Resolution; Equitable Remedies) of this Agreement, including disputes as to whether (a) [***], (b) [***] or (c) (i) [***], (ii) [***] or (iii) [***], and, with respect to each of (a), (b) and (c), which Ginkgo shall be entitled to dispute in writing in good faith irrespective of whether BLI is given sole or final decision-making authority with respect thereto under the applicable BLI Terms and Conditions; + +4.1.6 all payment provisions between the Parties related to the subject matter hereunder shall solely be under this Agreement and not any of the BLI Terms and Conditions; Page 25 of 85 + + + + + +4.1.7 each of the BLI Terms and Conditions shall be freely assignable solely to the applicable assignee in connection with any assignment permitted under the terms of Section 14.4 (Assignment) of this Agreement; + +4.1.8 no activities by BLI under this Agreement may be terminated or suspended under any of the BLI Terms and Conditions if such termination or suspension is not permitted under the terms of this Agreement; + +4.1.9 Ginkgo may elect, at any time in its sole discretion, to terminate the Software License Agreement that comprises part of the BLI Terms and Conditions and, upon such termination, Ginkgo's right to use such underlying Software shall terminate; and + +4.1.10 the BLI Terms and Conditions that apply with respect to any Beacon Optofluidic Machines (including related Hardware and Software), Consumables or Services for which Ginkgo has placed a Purchase Order pursuant to this Agreement shall not terminate absent mutual written consent of the Parties, unless this Agreement has been terminated early (e.g. prior to its Expiration) in which case such BLI Terms and Conditions shall survive only for so long and to the extent as Ginkgo continues to have the right to use Beacon Optofluidic Machines or Consumables or receive Services pursuant to Section 13.3 (Effects of Termination). 5. FORECASTS; ORDERS; SERVICE STANDARDS AND RELATED OBLIGATIONS + +5.1 Forecasts of Production Purchases. Within [***] ([***]) days following the Effective Date and on or before the first Business Day of each [***] thereafter, Ginkgo shall furnish BLI with a rolling forecast of the quantities of Beacon Optofluidic Machines (including related Hardware and Software) and Consumables (on a Consumable-by-Consumable basis) that Ginkgo expects to require from BLI under this Agreement during the ensuing [***] ([***]) month period on a [***] basis (each such forecast, a "Rolling Forecast"). Subject to the limitations set forth in this Agreement, Ginkgo may, in its sole discretion, update its estimated requirements of Beacon Optofluidic Machines (including related Hardware and Software) and Consumables in the next Rolling Forecast delivered; provided that (a) the [***] of each Rolling Forecast shall be binding upon the Parties with respect to Beacon Optofluidic Machines and with respect to Consumables, Ginkgo's Purchase Orders for Consumables during the [***] may fluctuate by +/- [***] percent ([***]%) of the amount of Consumables set forth in the Rolling Forecast for the [***]; (b) the [***] of each Rolling Forecast shall include binding amounts forecasted for Beacon Optofluidic Machines and Consumables within (i) [***] percent ([***]%) of the number of units of Beacon Optofluidic Machines or (ii) [***] percent ([***]%) of the number of units of any Consumable; and (c) the [***] of each Rolling Forecast shall be non-binding, good faith estimates of Ginkgo's demand for Beacon Optofluidic Machines and Consumables. The foregoing, along with any other relevant provisions in this Agreement, shall be the sole forecasting mechanics for Ginkgo's requirements of Beacon Optofluidic Machines (including related Hardware and Software) or Consumables expressly notwithstanding anything to the contrary in the BLI Terms and Conditions with respect to forecasting. Page 26 of 85 + + + + + +5.2 Pricing. Notwithstanding anything to the contrary in the BLI Terms and Conditions with respect to pricing for Beacon Optofluidic Machines (including related Hardware and Software), Consumables or Services, the following shall apply: + +5.2.1 General. The pricing as of the Effective Date for Beacon Optofluidic Machines, Consumables and certain services (including Services) are set forth in Schedule 5.2.1 (Pricing Schedule). Such pricing shall be adjusted pursuant to this Section 5.2 (Pricing). For any Consumable or service not listed in Schedule 5.2.1 (Pricing Schedule), BLI shall provide the price for such to Ginkgo upon Ginkgo's request during the Term, such price to be consistent with this Section 5.2 (Pricing). BLI represents and warrants that the pricing set forth in Schedule 5.2.1 (Pricing Schedule) are BLI's List Prices for the described Beacon Optofluidic Machines, Consumables and services (including Services) as of the Effective Date. BLI shall discount List Prices for Ginkgo by [***] percent ([***]%) or such higher amount as agreed by the Parties, and subject to pricing adjustments as set forth in Section 5.2.2 (Adjustments). For clarity, with respect to Consumables to be purchased under a Workflow Development Plan, Ginkgo will be responsible for costs for such Consumables as set forth in the Budget for such Workflow Development Plan. + +5.2.2 Adjustments. Notwithstanding anything else to the contrary in this Agreement, and [***], with respect to the prices charged by BLI to Ginkgo under Section 5.3.2 (Purchase Orders - Acceptance and Rejection): + +(a) With respect to any [***], (i) there will be no increases from the per unit pricing set forth in Schedule 5.2.1 (Pricing Schedule) for at least the first [***] and (ii) the per unit pricing charged by BLI to Ginkgo at any time shall be no greater than the lowest of the (A) lowest price per unit charged by BLI or its Affiliates to any similarly situated Third Party customer (i.e. taking into account [***]) for such unit at any time in the [***] ([***]) months prior to the delivery of the applicable Purchase Order by Ginkgo or (B) the then- current List Price; provided, however, that in no event shall BLI be required to charge a price less than the cost of goods sold for such unit, as determined in accordance with United States generally accepted accounting principles, consistently applied. + +(b) With respect to any [***], (i) there will be no increases from the per unit pricing set forth in Schedule 5.2.1 (Pricing Schedule) for at least the first [***], (ii) subject to subclause (iii), the per unit pricing charged by BLI to Ginkgo shall be no greater than [***] percent ([***]%) of the lowest List Price for such unit at any time between the delivery of the applicable Purchase Order by Ginkgo and delivery of such OptoSelect Chip or Consumable and (iii) the per unit pricing charged by BLI to Ginkgo for such unit that is [***] shall be no greater than [***] percent ([***]%) of the lowest List Price for such unit. Page 27 of 85 + + + + + +(c) With respect to any [***], there will be no increases from the per unit [***] set forth in Schedule 5.2.1 (Pricing Schedule) for at least the [***] and after such [***], BLI may adjust pricing for [***] for a Contract Year within the first [***] ([***]) days of such Contract Year by written notice to Ginkgo; provided that such adjustment [***] for such [***] and in no event will the [***] charged to Ginkgo for any [***] under this Agreement be higher than the then-current List Price for the applicable [***]. + +(d) With respect to any [***], there will be no increases from the rates set forth in Schedule 5.2.1 (Pricing Schedule), except that, on an annual basis, upon written notice to Ginkgo, BLI may increase the rates set forth in Schedule 5.2.1 (Pricing Schedule) by a percentage [***], not to exceed [***] percent ([***]%) per calendar year. + +(e) With respect to any other Beacon Optofluidic Machines, Consumables and services (including Services) not listed on Schedule 5.2.1 (Pricing Schedule), the per unit pricing charged by BLI to Ginkgo shall be no greater than the then-current List Price, [***]. + +5.3 Purchase Orders; Delivery and Payment. + +5.3.1 Issuance. Ginkgo shall submit orders for Beacon Optofluidic Machines (including related Hardware and Software), Consumables (on a Consumable-by-Consumable basis) and Services pursuant to written purchase orders (each, a "Purchase Order") issued to BLI in a form consistent with this Agreement. Purchase Orders shall be provided by Ginkgo, shall specify (a) the quantity of Beacon Optofluidic Machines (including related Hardware and Software), Consumables (on a Consumable-by-Consumable basis) or Services ordered and (b) the requested delivery date or service date and location. The requested delivery dates or service dates set forth in a Purchase Order shall be no earlier than the Lead Time for such delivery or service. BLI shall not be obligated to supply in any [***] (i) a quantity of the [***] in excess of the amount designated in such [***] in the binding portion of the Rolling Forecast or (ii) a quantity of [***] that is greater than [***] percent ([***]%) of the amount designated for such item or service in such [***] in the binding portion of the Rolling Forecast (such amount, the "Maximum Amount"); provided that notwithstanding the provisions set forth in this Section 5.3.1 (Issuance) or Section 5.3.2 (Acceptance and Rejection) to the contrary, BLI shall use [***] to accept and fulfill Purchase Orders for quantities of [***] in excess of the Maximum Amount in any [***]. The foregoing shall apply and, along with any applicable provisions of the Agreement, be the exclusive terms and conditions for Ginkgo's Purchase Orders under this Agreement, notwithstanding anything to the contrary in the BLI Terms and Conditions with respect to Ginkgo's orders for or ability to order (and have orders fulfilled for) [***]. + +5.3.2 Acceptance and Rejection. BLI shall, by written notice to Ginkgo, accept or, subject to the terms of this Agreement, reject, each Purchase Order (a) with respect to orders for [***], within [***] ([***]) days of receipt and (b) with respect to Page 28 of 85 + + + + + +orders for [***], within [***] ([***]) days of receipt, with respect to each, by written notice to Ginkgo. Any failure of BLI to accept or reject a Purchase Order within such [***] day period shall be deemed an acceptance by BLI of such Purchase Order. Any express acceptance of a Purchase Order by BLI shall confirm the quantity of Beacon Optofluidic Machines (including related Hardware and Software), Consumables (on a Consumable-by-Consumable basis) and Services requested to be supplied or performed, the prices, pursuant to Section 5.2 (Pricing), associated with such Beacon Optofluidic Machines (including related Hardware and Software), Consumables (on a Consumable-by-Consumable basis) and Services and that delivery or performance of such Optofluidic Machines (including related Hardware and Software), Consumables and Services shall occur [***]; provided that (i) BLI shall not have the right to reject, and shall be deemed to have accepted, any Purchase Order meeting the requirements of this Section 5.3 (Purchase Orders; Delivery and Payment) and (ii) if any Purchase Order contains quantities in excess of the Maximum Amount for such month and otherwise meets the requirements of this Section 5.3 (Purchase Orders; Delivery and Payment), then such Purchase Order shall be deemed accepted except with respect to such excess quantities and, subject to Section 5.3.1 (Issuance), BLI shall confirm to Ginkgo within [***] ([***]) days of receipt of such Purchase Order if BLI can supply such excess and if so, such Purchase Order shall be deemed accepted with respect to such excess quantities as well. The foregoing shall apply notwithstanding anything to the contrary in the BLI Terms and Conditions with respect to BLI's ability to accept or reject Ginkgo's orders for Beacon Optofluidic Machines (including related Hardware and Software), Consumables or Services. + +5.3.3 Delivery and Payment. Notwithstanding anything to the contrary in the BLI Terms and Conditions with respect to the delivery of Beacon Optofluidic Machines (including related Hardware and Software) or Consumables, the performance of Services and rights and responsibilities arising in connection with such delivery or performance, the following shall apply: + +(a) Machines and Consumables. With respect to Beacon Optofluidic Machines and Consumables for which Ginkgo has placed a Purchase Order under this Agreement: + +(i) such items shall be shipped by BLI (A) [***] or (B) [***], with respect to (A)-(B), to the delivery point set forth on the Purchase Order; [***]; + +(ii) a BLI employee will install the Beacon Optofluidic Machines at such delivery point and, within [***] ([***]) Business Days of installation, will deliver to Ginkgo a completed BLI field service report confirming installation and qualification of the relevant Beacon Optofluidic Machines in accordance with Schedule 5.3.3 (Qualification Standards); + +(iii) title and risk of loss to (A) [***] or (B) [***]; Page 29 of 85 + + + + + +(iv) BLI shall invoice Ginkgo for any Beacon Optofluidic Machine or Consumable at a price calculated in accordance with Section 5.2 (Pricing) [***]; + +(v) Ginkgo shall be deemed to have accepted delivery of any Beacon Optofluidic Platform upon [***] unless Ginkgo delivers, within [***] ([***]) Business Days a written statement detailing the reasons why the item delivered is not a Conforming Product and, if BLI disputes Ginkgo's allegation of non-conformance, the matter shall be resolved pursuant to Section 14.5.2 (Dispute Resolution); and + +(vi) Ginkgo shall pay BLI for all delivered quantities of Conforming Product within [***] ([***]) days from Ginkgo's [***] under this Agreement[***]. + +(b) Services. With respect to Services for which Ginkgo has placed a Purchase Order under this Agreement: + +(i) such Services shall be provided at the time and location set forth on an accepted Purchase Order, unless otherwise mutually agreed by the Parties in writing; + +(ii) BLI shall invoice Ginkgo for any Services at a price calculated in accordance with Section 5.2 (Pricing) [***] except [***], which shall be paid [***] and the Terms and Conditions except to the extent such conflicts with the terms of this Agreement, in which case this Agreement shall supersede with respect to the conflicting terms; and + +(iii) Ginkgo shall pay BLI for all performed Services that meet the applicable Service Standards within [***] ([***]) days from receipt of invoice[***]. + +(c) Payments. All Production Purchase amounts paid by Ginkgo to BLI for Beacon Optofluidic Machines, for Consumables and for Services are non-creditable and non-refundable except as set forth in expressly set forth in this Agreement (including Section 7.8 (Audits)) and the BLI Terms and Conditions. + +5.4 Capacity; Failure to Supply. + +5.4.1 Personnel. Notwithstanding anything to the contrary in the BLI Terms and Conditions for Services: + +(a) Generally. With respect to any [***] in the Term, to [***] continuity of supply with respect to services (including Services) rendered under this Agreement (including Workflow Development Page 30 of 85 + + + + + +Plans) to Ginkgo, BLI shall [***] employs a sufficient number of personnel so that it [***] satisfy, with respect to the then-current [***], Ginkgo's requirements for Services during such [***], as specified in the then-applicable Rolling Forecast. BLI shall (a) use qualified personnel in connection with performing Services for Ginkgo and perform such Services in a competent and workmanlike manner consistent with prevailing industry standards and in material conformance with Applicable Laws, the terms of this Agreement (which shall include the terms of any Workflow Development Plans) and (b) obtain and maintain all material licenses, permits or approvals required by Applicable Laws, the terms of this Agreement (which shall include the terms of any approved Workflow Development Plans) in connection with performing Services for Ginkgo. + +(b) Dedicated FTEs; Key Persons. In addition to its obligations set forth in Section 5.4.1(a) (Personnel - Generally), during the period beginning [***] ([***]) Business Days after the Effective Date and ending on the [***] ([***]) anniversary of the Effective Date, BLI shall [***] provide Ginkgo with [***] ([***]) FTEs to work on-site at Ginkgo to aid in [***]. Following the [***] ([***]) anniversary of the Effective Date, unless otherwise agreed by the Parties, BLI shall provide Ginkgo with [***] to work on-site at Ginkgo to aid in [***]. [***] shall designate up to [***] ([***]) BLI employees or personnel as key persons (individually, a "Key Person" and collectively, "Key Persons"). [***] to the percentage of any such Key Person's time that shall be dedicated to activities performed under this Agreement. No Key Person shall be reassigned, nor shall the time dedicated to activities under this Agreement be reduced, without [***], but if such Key Person (i) is no longer employed by BLI, (ii) [***] or (iii) [***], with respect to (i)-(iii), then the Parties shall work together to mutually identify in writing a new employee as a replacement for such Key Person and, upon such mutual identification, such employee shall be deemed a Key Person for all purposes of this Agreement. For clarity, [***] shall be [***] if [***], that [***] and [***] or [***]. In the event of a termination of employment at BLI of any Key Person, BLI shall notify Ginkgo of such circumstance as promptly as practicable. Ginkgo shall have the right, but not the obligation, at any time, to request that BLI replace such Key Person with another BLI employee reasonably acceptable to Ginkgo. In such event, BLI shall replace such person [***]. Ginkgo will provide each BLI FTE that is on-site at Ginkgo with (I) access to Ginkgo's facility to the extent required to perform each FTE's obligations as set forth in each approved Workflow Development Plan and (II) [***]. + +(c) Conduct on Site. BLI acknowledges and agrees that BLI FTEs (including Key Persons) are not employees or agents of Ginkgo, that Ginkgo has no responsibility to provide worker's compensation or other Page 31 of 85 + + + + + +liability coverage, insurance, benefits or, other than as expressly provided in this Agreement, compensation for BLI FTEs. BLI further acknowledges and agrees that BLI FTEs are acting solely as representatives of BLI during any work performed at Ginkgo's facilities. BLI shall (a) comply, and shall cause each BLI FTE to comply, with all Applicable Laws; (b) abide, and shall cause each on-site BLI FTE to abide, by [***] guidelines and procedures related to Ginkgo's facilities and use of its foundries that are [***] (e.g., [***]) made available to BLI or BLI's FTEs; and (c) cause on-site BLI FTEs to execute a confidentiality agreement with Ginkgo in the form attached hereto as Exhibit C. Each BLI FTE will be required to complete training offered by Ginkgo regarding the guidelines and procedures referred to in Section 5.4.1(b) (Dedicated FTEs; Key Persons). Without limitation of the foregoing, each BLI FTE shall be responsible for performing work in such a manner as to [***]. + +5.4.2 Safety Stock Inventory. At any given time during the Term, to ensure continuity of supply with respect to [***], BLI shall maintain an inventory of [***] sufficient to fulfill orders by Ginkgo for [***] for the next [***], such amount of [***] to be based on the then-applicable Rolling Forecast. + +5.4.3 Failure to Supply. + +(a) Remedial Efforts. If, for any reason, including [***], BLI [***] fails to provide Conforming Product or Service that conforms with this Agreement and the Service Level Standards for such Service, in each case in accordance with one or more accepted Purchase Orders for a period of [***] ([***]) consecutive days or more (each, a "Failure to Supply"), BLI shall notify Ginkgo promptly, including details of the reasons for the Failure to Supply and BLI's estimate of when the Failure to Supply shall be corrected. BLI shall [***] minimize any shortage or delay in delivery of Beacon Optofluidic Machines (including related Hardware and Software), Consumables or Services to Ginkgo as a result of a Failure to Supply. Within [***] ([***]) days of written notification by BLI to Ginkgo under this Section 5.4.3(a) (Remedial Efforts) of a Failure to Supply, the Parties shall hold a JRC meeting at which BLI's representatives will explain [***] the cause of such Failure to Supply and present BLI's remedial plan to [***] Beacon Optofluidic Machines (including related Hardware and Software), Consumables or Services to be supplied to Ginkgo in accordance with this Agreement and the accepted Purchase Orders, which plan [***] (the "Remedial Plan"). BLI shall consider [***] in good faith any reasonable changes proposed by Ginkgo to the Remedial Plan. If the JRC approves the Remedial Plan, BLI will execute such Remedial Plan [***]. + +(b) Fees for Late Delivery. [***], the following discounts on the amounts owed by Ginkgo to BLI under an accepted Purchase Order Page 32 of 85 + + + + + +shall be in effect for any [***] not delivered in accordance with this Agreement until after the applicable delivery date set forth in such Purchase Order: (a) for deliveries made more than [***] ([***]) days and less than [***] ([***]) days after such delivery date, a [***] percent ([***]%) discount; and (b) for deliveries made after [***] ([***]) days after such delivery date, a [***] percent ([***]%) discount, in each case of clauses (a) through (b), from the price for the Consumable delivered late; provided that, any discount shall only apply if the Purchase Order at issue was for a quantity of [***] at or below the binding forecasted quantity ([***]) provided pursuant to Section 5.1 (Forecasts of Production Purchases). Any discount in effect under this Section 5.4.3(b) (Fees for Late Delivery) shall be incorporated under any invoice presented by BLI to Ginkgo; provided that [***]. For purposes of counting towards Ginkgo's Production Purchases and Minimum Cumulative Purchase Commitments under this Agreement, Ginkgo shall be deemed to have paid any invoice as if no discount for delayed delivery was in effect. + +(c) Short Supply. Without limiting anything to the contrary in this Agreement, in the event that any Beacon Optofluidic Machines (including related Hardware and Software), Consumables or the Services are in short supply, i.e., [***], BLI shall notify Ginkgo in writing of such circumstances as soon as possible, including the underlying reasons for such shortage, the date such inability is expected to end and the amount of Beacon Optofluidic Machines (including related Hardware and Software), Consumables or Services to be allocated to Ginkgo. BLI shall allocate Beacon Optofluidic Machines (including related Hardware and Software), Consumables and Services in short supply to Ginkgo [***], with such [***] allocation applicable only up to the number of units of such item set forth in the binding portions of the then-current Rolling Forecast. + +(d) Tolling. Without limiting Ginkgo's rights under this Agreement or under Applicable Law, in the event of a Failure to Supply, [***] obligations of Ginkgo that are [***] by such Failure to Supply, including [***], shall be excused by an amount [***] to the Failure to Supply, which excused amount, in ensuring that such amount is [***] to the Failure to Supply, will include amounts [***] to such Failure to Supply. In addition, Ginkgo will submit to BLI a good faith proposal with respect to [***], taking into consideration the [***] that are attributable to such Failure to Supply. BLI shall promptly review such proposal and send written confirmation to Ginkgo of its [***] or, alternatively, inform Ginkgo in writing of and discuss with Ginkgo [***]. If [***], BLI will [***]. + +(e) Material Failure to Supply. If for reasons [***], over the course of any consecutive [***] period during the Term, BLI fails to provide Page 33 of 85 + + + + + +Ginkgo with at least [***] percent ([***]%) of (a) a given [***] or (b) the cumulative total of [***], with respect to each of clauses (a) and (b), in accordance with accepted Purchase Orders and this Agreement (including, with respect to [***]) over such [***] period, then, such Failure to Supply shall be deemed a material breach of this Agreement and Ginkgo shall have the right to terminate this Agreement pursuant to Section 13.2.1 (Material Breach), subject to BLI's right to cure such material breach. 6. RESTRICTIONS + +6.1 Headstart Period. + +6.1.1 BLI Standstill. Unless otherwise expressly agreed to in writing by the Parties, on a Headstart Invention-by-Headstart Invention basis, beginning on the date that a Workflow Development Plan is commenced and ending on the earlier of (a) the [***] anniversary of the date on which [***] under this Agreement or (b) subject to the last sentence of this Section 6.1.1 (BLI Standstill), if [***], then the [***] anniversary of the date on which [***] under this Agreement (for each such Headstart Invention, with respect to (a)-(b), the "Headstart Period"): (i) as between the Parties, Ginkgo will have the sole right to use, practice and exploit such Headstart Invention, and (ii) BLI shall not, and shall cause its Affiliates to not, directly or indirectly, itself or with or through a Third Party, use, practice or otherwise exploit such Headstart Invention in any way or grant any right, title or license to any Third Party to use, practice or otherwise exploit such Headstart Invention; provided that, for clarity, BLI shall retain the right to use, practice and otherwise exploit such Headstart Invention in accordance with the terms of this Agreement to perform BLI's obligations under this Agreement. For further clarity, nothing in this Section 6.1.1 (BLI Standstill) is intended to prevent a Third Party BLI customer or partner from using, practicing or otherwise exploiting any independently developed improvement, invention, process or workflow even if similar to a Headstart Invention as long as BLI and its Affiliates are in compliance with this Section 6.1.1 (BLI Standstill) [***]. If a Workflow Development Plan is cancelled under the terms of this Agreement, then the Headstart Period with respect to Headstart Inventions under such Workflow Development Plan shall be deemed to have immediately accelerated to conclusion, unless Ginkgo (x) identifies in writing one or more Headstart Inventions under the Workflow Development Plan within [***] ([***]) Business Days of cancellation of the Workflow Development Plan and (y) [***], in which case such Headstart Invention(s) shall be subject to the applicable Headstart Period under this Section 6.1.1 (BLI Standstill); provided that, Ginkgo's right to identify [***] under clauses (x) and (y) shall not exist if the cancellation of a Workflow Development Plan is [***]. + +6.1.2 [***]. Notwithstanding anything to the contrary in Section 6.1.1 (BLI Standstill), on a Headstart Invention-by-Headstart Invention basis, BLI may provide written notice to Ginkgo [***] (i.e. [***]), with respect to a Headstart Invention, such notice to specify (a) the applicable Headstart Invention [***], (b) the [***] and (c) whether BLI would prefer to [***] or, to the extent [***], [***] (which may, [***]); provided that to the extent the [***], BLI may only submit such a notice (and [***]) for [***]. Ginkgo Page 34 of 85 + + + + + +shall have [***] ([***]) Business Days following delivery of notice to Ginkgo to [***] by written notice to BLI. If the Parties [***] within [***] ([***]) Business Days of such written notice by Ginkgo, [***]. Following BLI's delivery of notice to Ginkgo [***], BLI shall [***] (i) if Ginkgo does not [***] within the [***] ([***]) Business Day period after notice delivery, within [***] ([***]) Business Days following the expiration of such [***] ([***]) Business Day period and (ii) if Ginkgo does [***] within the [***] ([***]) Business Day period after notice delivery, within [***] ([***]) Business Days following the [***]. Immediately upon [***] for a Headstart Invention, [***]. For clarity, [***]. For the avoidance of doubt, following the end of the Headstart Period for a Headstart Invention, Ginkgo shall still have the right to use, practice and exploit such Headstart Invention under this Agreement. + +6.2 Restrictions on the Parties. + +6.2.1 Restrictions on BLI. During the Term and for a period of [***] ([***]) months following the Term of this Agreement, other than pursuant to Sections 13.3.2 (Effects of Termination Based Upon Ginkgo's Buy-Down Election) or 13.3.3 (Effects of Termination Based Upon an Uncured Ginkgo Breach, Insolvency or Force Majeure Event), BLI shall not, and shall cause its Affiliates not to, directly or indirectly, itself or with or through a Third Party, develop, configure, customize, license, sell, provide or otherwise give access to the Beacon Platform or any [***] to, [***] or its Affiliates for any use; provided that this restriction shall terminate as set forth in Section 13.3 (Effects of Expiration or Termination) or if Ginkgo has not satisfied its Minimum Cumulative Purchase Commitments (as such may be adjusted under this Agreement) for a full Contract Year, including [***] as permitted under Section 7.2.2(a) (Minimum Cumulative Purchase Commitments) or Section 7.2.2(b)(iii) (Development Purchase Commitments); provided that BLI will provide written notice to Ginkgo within [***] ([***]) days of the end of any Contract Year with respect to which BLI believes that Ginkgo has not satisfied its Minimum Cumulative Purchase Commitment. Notwithstanding the foregoing, in the event that a Change in Control of an existing (as of the Effective Date or at any time during the Term) Third Party BLI customer results in such customer being controlled [***] following the date such Third Party became a BLI customer, BLI shall promptly notify Ginkgo in writing of such Change in Control (in no event later than [***] ([***]) days after BLI first learns of such Change in Control, [***] (in which case such notice will be provided by BLI no later than [***] ([***]) days after the earlier of [***] or [***]) and, in such written notice, provide Ginkgo with information regarding [***] and, if BLI does [***], the [***]. Within [***] ([***]) days of Ginkgo's receipt of such written notice, Ginkgo will have the option, at its sole discretion, (a) if [***], to [***] and to [***] and, if Ginkgo makes such election, BLI shall promptly [***] and (i) Ginkgo will [***] (but in no event [***]) and (ii) in the event [***], Ginkgo and BLI will [***] and (b) if [***], then [***], to (i) [***], (ii) [***] and (iii) [***]. In the event BLI notifies Ginkgo as aforesaid and Ginkgo fails to make such election within the [***] ([***]) day period, then, in the case of (A) or (B), BLI will not be deemed to be in breach of this Section 6.2.1 (Restrictions on BLI) solely on account of a Third Party customer [***]. Nothing in this Section 6.2.1 (Restrictions on BLI) will require or oblige BLI [***], then [***]. In the event [***], [***] in a manner that (x) [***], (y) [***] or (z) [***]. For clarity, the foregoing sentence shall not [***]. Except as provided in this Section 6.2.1 (Restrictions on BLI) and the scope of rights granted to Page 35 of 85 + + + + + +Ginkgo under this Agreement (including under Section 6.1 (Headstart Period) and Section 9.1 (Licenses to Ginkgo)), nothing in this Agreement shall otherwise limit, prohibit or preclude BLI from developing, configuring, customizing, licensing, selling or providing the Beacon Platform or Collaboration Workflows for itself or to a Third Party for any uses or otherwise entering into a business or advisory arrangement with any Third Party. As used in this Section 6.2.1 (Restrictions on BLI), "control" has the meaning set forth in Section 1.2 ("Affiliate" definition). For clarity, [***]. + +6.2.2 No Further Restrictions by Ginkgo. During the Term, Ginkgo shall not [***] prohibit (i.e. by [***]), as part of any [***] arrangement with a Third Party, a Third Party from purchasing a Beacon Platform or other BLI products or services, or otherwise using or utilizing such Beacon Platforms for [***], including [***]. For clarity, such obligation shall not prohibit or limit Ginkgo from entering into generally exclusive relationships with Third Parties (e.g., [***]). 7. ECONOMICS + +7.1 Upfront Payment. No later than [***] ([***]) days following the Effective Date, Ginkgo will pay to BLI a non-refundable upfront amount equal to Ten Million Dollars ($10,000,000) (the "Upfront Payment"). Such amount will be fully creditable against all Development Purchases and Production Purchases owed by Ginkgo to BLI [***] and will be fully creditable against the Full Purchase Target and, [***], the Minimum Purchase Commitment, Development Purchase Commitment and Production Purchase Target [***]. [***]. + +7.2 Purchase Commitments. + +7.2.1 Generally. Subject to the terms of this Agreement, during the Term, the Parties' target is for Ginkgo to make a total of One Hundred Fifty Million Dollars ($150,000,000) in Development Purchases and Production Purchases from BLI (as amended from time to time under this Agreement and as more fully set forth in this Section 7.2 (Purchase Commitments), the "Full Purchase Target"), which Full Purchase Target is divided into Contract Year purchase commitment targets with respect to Development Purchase Commitment and Production Purchase Targets, as more fully set forth in Section 7.2.2 (Contract Year Purchase Targets and Commitments). + +7.2.2 Contract Year Purchase Targets and Commitments. Subject to the terms of this Agreement (including the remainder of this Section 7.2.2 (Contract Year Purchase Targets and Commitments)), for each Contract Year, Ginkgo shall [***] make Development Purchases and Production Purchases from BLI in the amounts set forth in the Page 36 of 85 + + + + + +"Development Purchase Commitment" and "Production Purchase Target" columns respectively in Table 7.2.2 with respect to such Contract Year: + +Table 7.2.2 + +Development Purchase Commitment + +Production Purchase Target + +Total Targeted Purchase + +Minimum Cumulative Purchase Commitment Contract Year 1 $ [***] $ [***] $ [***] $ [***] Contract Year 2 $ [***] $ [***] $ [***] $ [***] Contract Year 3 $ [***] $ [***] $ [***] $ [***] Contract Year 4 $ [***] $ [***] $ [***] $ [***] Contract Year 5 $ [***] $ [***] $ [***] $ [***] Contract Year 6 $ [***] $ [***] $ [***] $ [***] Contract Year 7 [***] $ [***] $ [***] $ 109,000,000 Total $ [***] $ [***] $150,000,000 N/A + +(a) Minimum Cumulative Purchase Commitments. With respect to each Contract Year, by no later than [***], Ginkgo shall have incurred (including all credits and offsets permitted under this Agreement) at least, in the aggregate since the beginning of the Term, the Minimum Cumulative Purchase Commitment amount for such Contract Year. The Minimum Cumulative Purchase Commitments for each of Contract Years [***] are binding commitments. Any amounts paid by Ginkgo to BLI in excess of the Minimum Cumulative Purchase Commitment amount for a given Contract Year in Contract Years [***], regardless of whether such excess constitutes a Development Purchase or Production Purchase, will be creditable towards the Minimum Cumulative Purchase Commitment in subsequent Contract Year(s) until such excess amount has been fully credited. Ginkgo covenants to pay the Minimum Cumulative Purchase Commitments for each Contract Year by the [***] Business Day after the end of the [***]. If BLI has Substantially Completed at least [***] ([***]) [***] Workflows within the first [***] ([***]) Contract Years, then the Minimum Cumulative Purchase Commitment as of the Contract Year (which may include a portion of a full Contract Year) that is the last Contract Year during the Term pursuant to the terms of this Agreement shall change from $109 million (as currently reflected in Table 7.2.2) to $150 million. + +(b) Development Purchase Commitments. + +(i) Subject to Section 7.2.2(a) (Minimum Cumulative Purchase Commitments), unless the Parties otherwise mutually agree in writing, the Development Purchase Commitment for the [***] Contract Years shall constitute a binding obligation on Ginkgo, and, subject to Ginkgo exercising its Buy-Down Option pursuant to Section 7.3 (Buy-Down Election), the Development Purchase Commitment for the [***] Contract Years shall also constitute binding obligations on Ginkgo. No less than [***] percent ([***]%) of the Development Purchases made in the [***] Contract Years will be used by the Parties to develop Workflows for [***]. Page 37 of 85 + + + + + +(ii) At any time during a Contract Year, upon written notice to the JRC, Ginkgo may accelerate its Development Purchases in such Contract Year to include Development Purchases anticipated to be made in upcoming Contract Year(s). Such additional Development Purchases in excess of the Development Purchase Commitment for such Contract Year will be creditable towards Ginkgo's Development Purchases in subsequent Contract Year(s) until such excess amount has been exhausted and will count towards the Minimum Cumulative Purchase Commitment for the Contract Year in which it is paid, subject to allocation to subsequent Contract Year(s) as set forth in Section 7.2.2(a) (Minimum Cumulative Purchase Commitments). + +(iii) Notwithstanding anything to the contrary in this Agreement, in the event that Ginkgo's Development Purchases in a given Contract Year after [***] are less than the Development Purchase Commitment for such Contract Year, respectively, Ginkgo shall be able to apply the Development Purchases made in the first [***] of the next Contract Year to satisfy the previous Contract Year's Development Purchase Commitment; provided that (i) Ginkgo may only be able to satisfy [***] percent ([***]%) of the relevant Development Purchase Commitment for the previous Contract Year pursuant to this Section 7.2.2(b)(iii) (Development Purchase Commitments) and (ii) any amount of Development Purchases credited towards satisfying the previous Contract Year's Development Purchase Commitment shall not count towards satisfying such targets for the then-current Contract Year. + +(iv) Notwithstanding anything to the contrary in this Agreement, in the event that a Workflow Development Plan is terminated prior to completion by the JRC, including (A) [***], (B) [***], (C) [***] or (D) [***], then, subject to Section 3.5.1 (Decision-Making), the JRC shall, in good faith, discuss and approve [***]; provided, however, that such [***] (Term). + +(c) Production Purchase Commitments. + +(i) Subject to this Section 6.2.2(c) (Production Purchase Commitments), unless the Parties otherwise mutually agree in writing, the Production Purchase Target for the [***] shall constitute a binding obligation on Ginkgo and, in partial satisfaction of its Production Purchase commitment for the Page 38 of 85 + + + + + +[***], Ginkgo shall purchase [***] ([***]) [***] within [***] ([***]) days of the Effective Date, the cost of which, for clarity, shall be offset by the upfront payment paid by Ginkgo pursuant to Section 7.1 (Upfront Payment). Subject to Ginkgo's obligation to satisfy the Minimum Cumulative Purchase Commitment for a Contract Year, with respect to the second [***] Contract Years), Ginkgo's Production Purchase Targets for the [***] Contract Years as set forth in Table 7.2.2 are [***], and the Parties expressly acknowledge and agree that [***]. + +(ii) At any time during a Contract Year, upon written notice to the JRC, Ginkgo may accelerate its Production Purchases in such Contract Year to include Production Purchases anticipated to be made in upcoming Contract Year(s). Such additional Production Purchases in excess of the Production Purchase Target for such Contract Year will be creditable towards Ginkgo's Production Purchases in subsequent Contract Year(s) until such excess amount has been exhausted and will count towards the Minimum Cumulative Purchase Commitment. + +(d) Effects of Tolling. Notwithstanding anything to the contrary in this Agreement, Ginkgo's obligations to satisfy Development Purchase Commitments and Production Purchase Commitments at all times during the Term (including any Intended End of Term) are subject to Section 5.4.3(d) (Tolling) and this Section 7.2.2(d) (Effects of Tolling). In the event that, at any time during the Term, there is a Failure to Supply, then the duration of this Agreement will automatically be extended for additional calendar months (rounded to the nearest whole calendar month) equal to [***] (the seventh (7t h) anniversary of the Effective Date plus such additional calendar months, the "Intended End of Term"). + +7.3 Buy-Down Election. During the Term following the end of the second (2nd) Contract Year, Ginkgo may elect, upon written notice to BLI, to buy- down its remaining financial obligations under the Full Purchase Target (the "Buy-Down Election") by making a one-time payment to BLI in the amount of the Buy-Down Amount. In the event Ginkgo notifies BLI of its Buy-Down Election as set forth in this Section 7.3 (Buy-Down Election), then, upon Ginkgo's payment of the Buy-Down Amount to BLI within [***] ([***]) days of Ginkgo's Buy-Down Election, this Agreement shall automatically terminate, with the applicable effects of termination set forth in Section 13.3.2 (Effects of Termination Based Upon Ginkgo's Buy-Down Election). + +7.4 Additional Payments. + +7.4.1 License Fees. During the Term, and in consideration for the rights granted herein, Ginkgo shall pay field of use license fees ("FOU License Fees") as follows: (a) with respect to any calendar year, no FOU License Fees will be due until [***] and (b) [***] ($[***]) per calendar year per Beacon Optofluidic Machine [***] up to a Page 39 of 85 + + + + + +maximum of [***] ($[***]) per calendar year per Beacon Optofluidic Machine; provided that, in no event will the FOU License Fees paid by Ginkgo for use of a Beacon Optofluidic Machine [***]. FOU License Fees shall be applied to Ginkgo's use of all Beacon Optofluidic Machines, [***]. Notwithstanding anything to the contrary in this Agreement and without limiting any of Ginkgo's rights and remedies under Applicable Law and this Agreement, [***], + +7.4.2 Milestone Payments. In the event that Ginkgo uses any of the BLI Proprietary Workflows identified in Exhibit D to conduct Commercial Services for a Third Party customer and such Commercial Services [***] result in the discovery of an Antibody to be used as the active ingredient in a therapeutic product for which a Third Party [***] (each such Antibody subject to this Section 7.4.2 (Milestone Payments), a "Discovered Antibody"), then, on a Discovered Antibody-by-Discovered Antibody basis, in the event such Third Party (a) achieves any of the milestone events noted below in Table 7.4.2 (each, a "Milestone Event") with respect to a Discovered Antibody and (b) makes a payment to Ginkgo in connection with such Milestone Event, then Ginkgo will pay BLI [***] percent ([***]%) of such payment received by Ginkgo from such Third Party up to the amount of the corresponding "Maximum Milestone Payment" for such milestone event set forth below in Table 7.4.2 (each, a "Milestone Payment". Notwithstanding anything to the contrary in this Agreement, in no event shall a Discovered Antibody include (x) an Antibody [***] (e.g. [***]) through the conduct of Commercial Services by Ginkgo or (y) an Antibody [***]. Table 7.4.2 + +Milestone Event + +Maximum Milestone Payment [***] $ [***] [***] $ [***] [***] $ [***] [***] $ [***] + +Each Milestone Payment shall be payable only once for each and every Discovered Antibody. If any Milestone Event is achieved for any Discovered Antibody before any of the preceding Milestone Events are achieved for such Discovered Antibody, then all the Milestone Payments for such unachieved preceding Milestone Events will be due and payable with the Milestone Payment for the Milestone Event that was achieved. For example, [***]. + +7.5 Manner of Payments. Each payment under this Agreement to a Party will be made in Dollars and by electronic transfer in immediately available funds via either a bank wire transfer, an ACH (automated clearing house) mechanism, or any other means of electronic funds transfer, at such receiving Party's election, to such bank account as the receiving Party will designate in writing to the other Party at least [***] ([***]) Business Days before the payment is due. + +7.6 Taxes. It is understood and agreed between the Parties that any payments made by a Party to the other Party under this Agreement are exclusive of any sales tax, value added tax (if any) or similar tax ("VAT") upon such payments. Where VAT is properly added to a payment made under this Agreement, the Party making the payment will pay the amount of VAT only on Page 40 of 85 + + + + + +receipt of a valid tax invoice issued in accordance with the laws and regulations of the country in which the VAT is chargeable. If a Party is required to deduct or withhold from any payment due hereunder any taxes in the nature of a tax upon or measured by income, then the Parties shall work together to ensure, subject to this Section 7.6 (Taxes), that the withholding Party is able to comply with its obligations under Applicable Law and that the non- withholding Party still receives the net amount due to it following payment of such tax by the withholding Party. [***]. The Parties will reasonably cooperate to provide sufficient documentation to receive any credits available under Applicable Law. Notwithstanding the foregoing, to the extent that, due to (a) [***], (b) [***], (c) [***], (d) [***] or (e) [***], with respect to each, VAT or other taxes are imposed on payments made by Ginkgo or BLI, as applicable, to the other Party that were not otherwise applicable ("Incremental Withholding Taxes"), the Party that took such action resulting in Incremental Withholding Taxes (together with any subsequent successor or assign, "Responsible Tax Party") shall be solely responsible for and shall solely bear the amount of such Incremental Withholding Taxes. If the other Party receives a refund or tax credit in connection with the Incremental Withholding Taxes, then such other Party shall promptly pay the Responsible Tax Party an amount equal to the amount of such refund or tax credit. + +7.7 Financial and Other Records. Each Party shall, and shall cause its Affiliates to, keep complete and accurate books and records pertaining to its activities conducted and costs incurred under this Agreement (including each approved Workflow Development Plan), including with respect to Budget spending, Development Purchases, Production Purchases, FOU License Fees and Milestone Payments, in sufficient detail to calculate all amounts payable hereunder and to verify compliance with its obligations under this Agreement. Such books and records shall be retained by such Party and its Affiliates until [***] ([***]) years after the end of the period to which such books and records pertain or for such longer period as may be required by Applicable Law. + +7.8 Audits. At the request of the other Party, each Party will, and will cause its Affiliates to, permit an independent public accounting firm of nationally recognized standing designated by the other Party and reasonably acceptable to the audited Party, at reasonable times during normal business hours and upon reasonable notice, to audit the books and records maintained pursuant to Section 7.7 (Financial and Other Records) solely to confirm the accuracy of all financial reports, invoices and payments made hereunder or Budget spending under an approved Workflow Development Plan. Such examinations may not (a) be conducted more than once in any [***] month period (unless a previous audit during such [***] month period revealed an overpayment (or an underpayment of a Milestone Payment, FOU License Fees, or royalty for Licensed Products) of at least [***] percent ([***]%) of the amount actually due with respect to such period) or (b) [***]. The accounting firm will execute a reasonable written confidentiality agreement with the audited Party and will disclose to the auditing Party only such information as is reasonably necessary to provide the auditing Party with information regarding any actual or potential discrepancies between the amounts actually paid and the amounts payable under this Agreement. The accounting firm's report will [***] be delivered to each Party at the same time and will be deemed final [***] ([***]) business days after it is received by both Parties. The auditing Party shall bear the full cost of any such audit, unless the accounting firm's report discloses an overpayment (or underpayment) by the auditing Party of more than [***] percent ([***]%) of the amount due for any Calendar Quarter, in which case the audited Party shall bear the full cost of such audit. The audited Party shall pay the amount of any overpayment (or underpayment) disclosed in the accounting firm's report, together with interest thereon from the date such payment was originally due, within [***] ([***]) days after delivery to the Parties of the accounting firm's report. Page 41 of 85 + + + + + +7.9 Confidentiality. All books and records audited by a Party pursuant to Section 7.8 (Audits) will be maintained in confidence by such auditing Party in accordance with Article 10 (Confidentiality). + +7.10 Late Payment. If any payment due is not paid by the due date, BLI may (a) charge interest on any outstanding amount of such payment, accruing as of the original due date, at an annual rate equal to the rate of prime (as reported in The Wall Street Journal, Eastern U.S. Edition) plus [***] percentage points or the maximum rate allowable by Applicable Law, whichever is less. 8. INTELLECTUAL PROPERTY OWNERSHIP; USE OF DATA + +8.1 Ownership of Background IP; Efforts to Control. As between the Parties, and subject to the licenses granted under this Agreement, Ginkgo shall own and retain all rights, title, and interests in, to and under Ginkgo Background IP, and BLI shall own and retain all rights, title, and interests in, to and under BLI Background IP. With respect to any Intellectual Property developed by BLI or its Affiliates in collaboration or on behalf of a Third Party during the Term of this Agreement that is [***] for (a) [***] or (b) [***], with respect to each, BLI and its Affiliates shall [***] to [***] that BLI or its Affiliates Control such Intellectual Property so that BLI may grant a license to Ginkgo with respect to such Intellectual Property as set forth in Section 9.1 (Grants to Ginkgo). + +8.2 Ownership of Ginkgo Inventions and BLI Inventions. + +8.2.1 Ginkgo Inventions. Unless otherwise agreed to in writing by the Parties, as between the Parties, Ginkgo shall own: + +(a) all biological entities, including all organisms, cells, strains, enzymes and other proteins, nucleic acids and other biomaterials (that are not BLI-provided biological entities listed in Section 8.2.2(f) (BLI Inventions)) [***], in each case that Ginkgo loads onto the Beacon Platform or provides to BLI [***]; + +(b) all [***]; + +(c) any assays [***]; + +(d) all chemical entities other than [***], developed, generated, created, used or otherwise exploited in connection with the use of the Beacon Platform (clauses (a) through (d) of this Section 8.2.1 (Ginkgo Inventions) collectively, with the exception of [***], the "Ginkgo Materials"); + +(e) all [***]; Page 42 of 85 + + + + + +(f) the [***]; + +(g) the Ginkgo Workflows, with the exception of any BLI Inventions; and + +(h) all rights to the Intellectual Property contained or otherwise embodied in the inventions, discoveries, improvements, materials, chemical entities, Ginkgo Materials, [***], [***], or Ginkgo Workflows, described in clauses (a) through (g) of this Section 8.2.1 (Ginkgo Inventions) (clauses (a) through (g) collectively, the "Ginkgo Inventions"). + +For clarity, Ginkgo's ability to use Ginkgo Inventions are subject to the limitations set forth in Section 9.1 (Grants to Ginkgo). + +8.2.2 BLI Inventions. Unless otherwise agreed to in writing by the Parties, as between the Parties, BLI shall own: + +(a) all inventions or discoveries [***]related to, or improvements or modifications to, the Beacon Platform that are developed, generated, created, used or otherwise exploited in connection with the use of the Beacon Platform under a Workflow Development Plan; + +(b) any materials or chemical entities that are not Ginkgo Materials that are developed, generated, created, used or otherwise exploited in connection with the use of the Beacon Platform under a Workflow Development Plan, with the exception of any materials that are publicly available for purchase or are otherwise rightfully in the public domain; + +(c) all BLI Proprietary Workflows; + +(d) Generalized Workflows, with the exception of any Ginkgo Inventions; + +(e) all Consumables provided by BLI related to the Beacon Platform and [***], in each case (i) developed, generated, created, used or otherwise exploited in connection with the use of the Beacon Platform under a Workflow Development Plan and (ii) [***]; + +(f) although generally not expected during the Term, any [***]; and + +(g) all rights to the Intellectual Property contained or otherwise embodied in the inventions, discoveries, improvements, materials, chemical entities, Beacon Platform or Consumables described in clauses (a) through (f) of this Section 8.2.2 (BLI Inventions) (collectively, clauses (a) through (f) of this Section 8.2.2 (BLI Inventions), the "BLI Inventions"). Page 43 of 85 + + + + + +8.3 Ownership of Remaining Collaboration Intellectual Property. Subject to Section 8.2 (Ownership of Ginkgo Inventions and BLI Inventions), as between the Parties, BLI shall solely own all right, title and interest to all Collaboration Intellectual Property [***]. + +8.4 Prosecution and Enforcement Rights. Ginkgo shall have the sole and exclusive right, but not the obligation, to protect, seek registration for, defend and enforce, in its sole and entire discretion, the Ginkgo Inventions. BLI shall have the sole and exclusive right, but not the obligation, to protect, seek registration for, defend and enforce in its sole and entire discretion, the BLI Inventions and Collaboration Intellectual Property (other than the Ginkgo Inventions). In no event shall Ginkgo, and Ginkgo shall cause its Affiliates to not, file any patent applications covering (or support existing patent applications covering) the [***] and, in the event Ginkgo (or its Affiliates) do file one or more of such patent applications, Ginkgo will and hereby does assign, and shall cause its employees, agents and contractors to assign, to BLI all rights, title and interests in, to and under such patent applications. Other than as permitted under Section 8.5.2 (Use of Collaboration Data), in no event shall BLI, and BLI shall cause its Affiliates to not, file any patent applications covering (or support existing patent applications covering) [***] and, in the event that BLI (or its Affiliates) do file one or more of such patent applications, BLI will and hereby does assign, and shall cause its employees, agents and contractors to assign, to Ginkgo all rights, title and interests in, to and under such patent applications. + +8.5 Use of Collaboration Data. + +8.5.1 Disclosure. With respect to any data or results that are generated in connection with activities under a Workflow Development Plan (such data and results (but not Collaboration Workflows), "Collaboration Data"), each Party shall provide the other Party any Collaboration Data in its possession; provided that [***] shall provide any such Collaboration Data in its possession to [***] to the extent permitted under obligations of confidentiality owed by [***] to Third Parties with respect to such Collaboration Data. Notwithstanding the foregoing, [***] shall have the right to anonymize any Collaboration Data for disclosure to [***] or use by [***] under Section 8.5.2 (Use of Collaboration Data) and shall be permitted to remove from such Collaboration Data (a) any Third Party confidential information, (b) the identity of any [***] and (c) proprietary information regarding [***] Inventions or Intellectual Property Controlled, possessed or owned by [***] or its Affiliates. + +8.5.2 Use of Collaboration Data. BLI will have the right to use any Collaboration Data provided to it for disclosure pursuant to Section 8.5.1 (Disclosure) solely for the purposes of (a) [***], (b) [***], (c) [***], and (d) [***]. For clarity, with respect to clause (d) of this Section 8.5.2 (Use of Collaboration Data), [***]. + +8.6 Notification of New Products; [***]. + +8.6.1 Access to New Products. During the Term, BLI shall promptly notify Ginkgo of any upcoming or then-current commercial availability of any new Beacon Optofluidic Machine or Consumable that, at that time, is not listed in Schedule 1.10 (Beacon Optofluidic Machine) or Schedule 1.36 (Consumables) and the Parties shall[***]. Page 44 of 85 + + + + + +8.6.2 [***]. During the Term, BLI shall provide Ginkgo with [***] (a) [***], (b) [***] and (c) BLI [***], with respect to each, [***] and [***]. As used in this Section, "[***]" means [***]. + +8.7 Inventor's Remuneration. Each Party will be solely responsible for any remuneration that may be due to such Party's inventors under any applicable inventor remuneration laws. + +8.8 [***]. If, at any time during the Term, Ginkgo has purchased from BLI, in the aggregate, [***] ([***]) or more Beacon Optofluidic Machines, then: + +8.8.1 Non-Exclusive [***] License. To ensure that, [***], BLI shall, and hereby does, automatically grant to Ginkgo, as of the date Ginkgo purchases an aggregate of [***] ([***]) Beacon Optofluidic Machine from BLI, a non-exclusive, non-royalty bearing and sublicensable (through multiple tiers) worldwide license in any Intellectual Property Controlled by BLI that is necessary to [***], solely for Ginkgo's [***] own internal use so that Ginkgo (or its Affiliates or permitted sublicensees) may [***]. Notwithstanding the foregoing, Ginkgo hereby represents, warrants and covenants to BLI that, as of the date BLI grants such license to Ginkgo and throughout the Term and thereafter, it shall not, directly or indirectly, conduct any activities under the rights granted to it in this Section 8.8.1 ([***]) unless and until (a) (i) [***] or (ii) [***], with respect to (i)-(ii), and such [***] or (b) [***]; provided that, after the event(s) sufficient to trigger sub-sections (i) or (ii) of this sentence occur, Ginkgo must provide BLI with written notice of its intent to conduct activities under rights granted pursuant to this Section 8.8.1 [***]. In the event Ginkgo has the right to conduct activities under the rights granted to it in this Section 8.8.1 ([***]), Ginkgo shall [***]. BLI shall [***]. + +8.8.2 [***]. Upon Ginkgo's written request at any time after [***], BLI shall [***] and will [***] so that [***]. Notwithstanding the foregoing, Ginkgo hereby represents, warrants and covenants to BLI as of the Effective Date, throughout the Term that it shall not, directly or indirectly, [***] unless and until (a) (i) [***] or (ii) [***] or (b) [***]; provided that, after the event(s) sufficient to trigger sub-sections (i) or (ii) of this sentence occur, Ginkgo must provide BLI with written notice of its intent to conduct activities under rights granted pursuant to this Section 8.8.2 [***]. In the event Ginkgo has the right to so [***], Ginkgo shall [***]. + +8.8.3 [***]. Upon Ginkgo's written request to BLI at any time if (a) there is (i) [***] or (ii) [***], or (b) [***], BLI shall [***] and [***] and shall [***], including by [***]; provided further that, if [***] either (A) [***] or (B) [***], then [***]. In the event Ginkgo [***], Ginkgo hereby represents, warrants and covenants to BLI as of the Effective Date, throughout the Term and thereafter that it shall [***]. BLI shall [***]. + +8.8.4 Any obligation of Ginkgo to [***] shall be [***]. + +8.9 Specific Implementation Restrictions. For clarity, this Agreement does not prohibit BLI or its Affiliates, alone or in combination with a Third Party, from independently developing a Workflow or a part or component thereof; or a derivative, modification, replication or progeny of Page 45 of 85 + + + + + +a biological entity; that is the [***] to a Specific Implementation (each such independently developed item, an "Independent Development"); provided that the Independent Development does not use any [***]; and further provided that BLI and its Affiliates do not [***] any [***] to [***] any Independent Development. Without limiting any other provision of this Agreement or Ginkgo's rights or remedies under this Agreement or Applicable Law, any use of [***] by BLI or its Affiliates, alone or in combination with a Third Party to develop a Workflow or a part or component thereof; or a derivative, modification, replication or progeny of a biological entity that is [***] a Specific Implementation shall be deemed a material breach of this Agreement by BLI and shall give rise to Ginkgo's right to terminate this Agreement pursuant to Section 13.2.1 (Material Breach). 9. LICENSE GRANTS + +9.1 Grants to Ginkgo. + +9.1.1 Scope of Grants. Subject to the terms and conditions of this Agreement, and in consideration for the payments to BLI under this Agreement, during the Term, BLI, on behalf of itself and its Affiliates, hereby grants and shall grant to Ginkgo a non-exclusive, sublicensable (solely in accordance with Section 9.1.4 (Consent to Sublicense)), non-transferable, non-royalty-bearing (subject to Section 13.3.2 (Effects of Termination Based Upon Ginkgo Buy-Down Election)) worldwide license in, to and under (i) BLI Background IP, and (ii) other Intellectual Property that is Controlled by BLI and that is [***] BLI Inventions, with both of (i) and (ii) being limited to what is necessary for Ginkgo to [***] and (iii) the Collaboration Intellectual Property solely to: + +(a) perform research [***] on biological entities, including organisms, cells and strains (and sub-components thereof); + +(b) (i) design and develop (A) Collaboration Workflows as generally contemplated under a Workflow Development Plan and (B) Ginkgo Workflows as permitted under this Agreement and (ii) use [***] Workflows to conduct the activities set forth in clause (a) and clause (c) of this Section 9.1.1 (Scope of Grants); + +(c) perform commercial research [***] and other Commercial Services for Third Parties; and + +(d) in each case of clauses (a) through (c) of this Section 9.1.1 (Scope of Grants), the license granted is for activities solely within the Licensed Field. + +9.1.2 License Grant to Exploit [***]. Subject to the terms and conditions of this Agreement, during the Term BLI, on behalf of itself and its Affiliates, hereby grants and shall grant to Ginkgo a [***] license within the Licensed Field in, to and under any Intellectual Property Controlled by BLI that is necessary to make, have made, sell, have sold, import or use any [***] to make, have made, sell, have sold, import or use such [***]. Page 46 of 85 + + + + + +9.1.3 No Consumable License. For clarity and without limiting Section 8.8.1 (Non-Exclusive Manufacturing License; Covenant), the licenses granted to Ginkgo in Section 9.1.1 (Scope of Grants) and Section 9.1.2 (License Grant to Exploit [***]) do not include the right to make, have made, offer to sell or sell Consumables, [***], to or for Third Parties or any Ginkgo Affiliate or Ginkgo Subcontractor that are [***] on the Beacon Platform [***]. + +9.1.4 Consent to Sublicense. Ginkgo may grant sublicenses of the license granted to Ginkgo under Section 9.1.1 (Scope of Grants) and Section 9.1.2 (License Grant to Exploit [***]) with the prior written consent of BLI[***]; provided that such prior written consent of BLI shall not be needed for any sublicense granted by Ginkgo to (a) a Permitted Subcontractor of Ginkgo under Section 2.7 (Subcontracting) to the extent such sublicense relates to the subcontracted activities, (b) any wholly-owned subsidiary of Ginkgo existing as of the Effective Date or (c) any other Person, including other Affiliates and any Third Party, under Section 9.1.2 (License Grant to Exploit [***]) so long as, in the case of this clause (c), the sublicense [***]. Each sublicense of the license granted to Ginkgo under Section 9.1.1 will (i) be in writing, (ii) be consistent with the terms and conditions of this Agreement and (iii) require each sublicensee thereunder to comply with all terms of this Agreement applicable to a sublicensee. Notwithstanding the grant of any sublicense, Ginkgo shall remain [***] liable to BLI for the performance of all of Ginkgo's obligations under, and Ginkgo's compliance with all provisions of, this Agreement. + +9.1.5 Responsibility. Ginkgo shall not (and Ginkgo shall ensure that its Affiliates and [***] sublicensees do not) use any Intellectual Property of BLI's that is licensed under Section 9.1 (Grants to Ginkgo), any BLI Confidential Information or any Beacon Platforms that may be transferred to Ginkgo by BLI under this Agreement, in each case for a purpose other than as expressly permitted under this Agreement. + +9.1.6 Use in Excluded Fields. In the event BLI [***] that Ginkgo is using [***] in the Excluded Fields ("Ginkgo Excluded Use"), BLI shall send Ginkgo a written notice indicating that it believes Ginkgo is using [***] in an Excluded Field and, within [***] ([***]) Business Days after Ginkgo's receipt of BLI's written notice, Ginkgo shall investigate such claim internally and shall either (a) [***], or (b) [***], and the Parties will resolve such dispute pursuant to Section 14.5.2 (Dispute Resolution). If, following the dispute resolution process set forth in Section 14.5.2 (Dispute Resolution), it is determined that Ginkgo is using [***] in an Excluded Field, then BLI may either (i) [***], (ii) [***] or (iii) [***]; provided that, following determination that Ginkgo is using [***] in an Excluded Field pursuant to Section 14.5.2 (Dispute Resolution), if BLI wishes to make any election under clause (i), (ii) or (iii), it must notify Ginkgo within [***] ([***]) Business Days of such determination. [***]. + +9.2 Grants to BLI. Subject to the terms and conditions of this Agreement, during the Term, Ginkgo hereby grants and shall grant to BLI: + +9.2.1 a [***] and this Section 9.2 (Grants to BLI)), [***] license in, to and under any Intellectual Property (a) Controlled by Ginkgo, (b) used by Ginkgo in the conduct of a Workflow Development Plan and (c) necessary for BLI to perform its obligations under this Agreement ((a)-(c) collectively, "Ginkgo Licensed IP"), solely to perform BLI's obligations under such Workflow Development Plan; and Page 47 of 85 + + + + + +9.2.2 after any applicable Headstart Period, with respect to any [***], a [***] license in, to and under any Ginkgo Licensed IP [***] necessary for the performance of, such [***], to make, have made, offer to sell, sell, have sold, import, use, commercialize or perform such [***] to or for Third Parties and to license such Third Parties to do the same. + +Except as permitted under Sections 9.2.1 and 9.2.2, BLI may not sublicense, assign or otherwise transfer the rights granted to it in this Section 9.2 (Grants to BLI) without first obtaining the prior written consent of Ginkgo[***]. Each sublicense of any license granted to BLI under this Section 9.2 (Grants to BLI) will (i) be in writing, (ii) be consistent with the terms and conditions of this Agreement and (iii) require each sublicensee thereunder to comply with all terms of this Agreement applicable to a sublicensee; provided that, subject to Section 6.2.1, such prior written consent of Ginkgo shall not be needed for any sublicense granted by BLI (a) under Section 9.2.1, to a Permitted Subcontractor of BLI under Section 2.7 (Subcontracting) to the extent such sublicense relates to the subcontracted activities, (b) any wholly-owned subsidiary of BLI existing as of the Effective Date, or (c) any other Person, including other Affiliates and any Third Party, under Section 9.2.2. Notwithstanding the grant of any sublicense, BLI shall remain liable to Ginkgo for the performance of all of BLI's obligations under, and BLI's compliance with, all provisions of, this Agreement. BLI shall not (and BLI shall ensure that any of its Affiliates and sublicensees do not) use any Intellectual Property or Confidential Information of Ginkgo that is licensed under this Section 9.2 or otherwise disclosed to BLI under this Agreement for any purpose not expressly permitted under this Agreement. [***]. + +9.3 No Implied Rights. Except as expressly provided in this Agreement, neither Party will be deemed to have granted the other Party (by implication, estoppel or otherwise) any right, title, license or other interest in or with respect to any Intellectual Property or information Controlled by such Party. 10. CONFIDENTIALITY + +10.1 Confidential Information. Each Party may disclose ("Disclosing Party") to the other Party ("Receiving Party"), and Receiving Party may acquire during the course and conduct of activities under the Agreement, certain non-public or confidential information of Disclosing Party in connection with this Agreement. The term "Confidential Information" means all non-public or confidential information or material in tangible form that one Party discloses to the other Party hereunder, or proprietary or confidential information disclosed in non-tangible form that a Disclosing Party identifies to the Receiving Party as confidential information or that, from the nature of such information, the Receiving Party should reasonably know is the Confidential Information of the Disclosing Party, including all technical and non-technical information conveyed from one Party to the other or otherwise accessed or observed by a Party in any form, electronic data and other proprietary information, data, samples, products, materials, compounds, sequences, compositions, configurations, methods, formulas, formulations, processes, protocols, specifications, designs, recordings, drawings, sketches, models, technologies, equipment, information relating to quality assurance or control, laboratory notebooks, techniques, inventions, Page 48 of 85 + + + + + +know-how, apparatuses, formulae, customer lists, pricing information, strategies, business or marketing plans and other information related to the Disclosing Party's current, future and proposed products, business, customers, Software or technology. The Parties agree that the terms of this Agreement will be treated as Confidential Information of each Party. Without limitation of the foregoing, (i) Ginkgo Background IP, Ginkgo Inventions, Collaboration Data, Specific Implementations, and Ginkgo Workflows will be treated as the Confidential Information of Ginkgo and (ii) BLI Background IP, BLI Inventions, Generalized Workflows and BLI Proprietary Workflows will be treated as the Confidential Information of BLI. Notwithstanding any other provisions herein, Confidential Information does not include information that: + +10.1.1 was known to Receiving Party or any of its Affiliates prior to the time of disclosure other than under an obligation of confidentiality with respect to such information; + +10.1.2 is at the time of disclosure hereunder or later becomes public knowledge through no fault or omission of Receiving Party or any of its Affiliates; + +10.1.3 is obtained by Receiving Party or any of its Affiliates from a Third Party having the right to disclose such information (e.g. not under an obligation of confidentiality to the Disclosing Party or its Affiliates) to such Receiving Party or its Affiliates; + +10.1.4 has been independently developed by employees, Permitted Subcontractors, consultants or agents of Receiving Party or any of its Affiliates without the aid, application, or use of or reliance upon Disclosing Party's Confidential Information, as evidenced by contemporaneous written records; or + +10.1.5 Receiving Party obtains written consent from Disclosing Party to disclose. + +Specific aspects or details of Confidential Information will not be deemed to be within the public domain or in the possession of Receiving Party merely because the Confidential Information is embraced by more general information in the public domain or in the possession of Receiving Party. Further, any combination of Confidential Information will not be considered in the public domain or in the possession of Receiving Party merely because individual elements of such Confidential Information are in the public domain or in the possession of Receiving Party unless the combination and its principles are in the public domain or in the possession of Receiving Party. + +10.2 Confidential Treatment. At all times during the Term and for a period of [***] ([***]) years following the end of the Term, or with respect to trade secrets (with such trade secrets either (i) having been specifically identified in writing to the Receiving Party by the Disclosing Party claiming ownership of the same or (ii) reasonably distinguishable by its nature or content as a trade secret of the Disclosing Party), until such time that such information is no longer a trade secret (including pursuant to Sections 10.1.1 - 10.1.5), Receiving Party will, and will cause its Affiliates and its and their respective officers, directors, employees, Permitted Subcontractors, permitted sublicensees and agents to, keep confidential and not publish or otherwise disclose to a Third Party and not use for any purpose, any Confidential Information furnished or otherwise made known to it by the Disclosing Party, except to the extent such disclosure or use is expressly Page 49 of 85 + + + + + +permitted by the terms of this Agreement or is reasonably necessary for the performance of, or the exercise of such Party's rights under, this Agreement; provided that such parties to which the Confidential Information is disclosed are bound by written obligations of confidentiality at least as stringent as those set forth in this Agreement. Notwithstanding the foregoing, a Receiving Party will remain liable for any breach of this Article 10 (Confidentiality) by any party to whom the Receiving Party has disclosed the Disclosing Party's Confidential Information under this Section 10.2 (Confidential Treatment). + +10.3 Permitted Disclosures. Receiving Party may disclose the Confidential Information of the Disclosing Party in the following instances: + +10.3.1 in order to comply with Applicable Law (including any securities law or regulation or the rules of a securities exchange) or with a legal or administrative proceeding; provided that (a) to the extent legally permitted, Receiving Party gives written notice of such required disclosure to Disclosing Party prior to disclosing such Confidential Information and (b) Disclosing Party shall have the opportunity to take appropriate measures to assure confidential treatment of such Confidential Information to the extent practicable and consistent with Applicable Law and Receiving Party agrees to reasonably cooperate with the Disclosing Party in connection with such measures at Disclosing Party's expense; + +10.3.2 in connection with (a) prosecuting or defending litigation or (b) obtaining Regulatory Approval, making other regulatory filings and communications, and filing, prosecuting, enforcing, and defending patent rights, in each case, in connection with Receiving Party's rights and obligations pursuant to this Agreement; provided, however, that, where reasonably possible, Receiving Party will notify Disclosing Party of Receiving Party's intent to make any such disclosure sufficiently prior to making such disclosure so as to allow Disclosing Party adequate time to take whatever action it may deem appropriate to protect the confidentiality of the information to be disclosed; and + +10.3.3 with respect to the terms of this Agreement, after having been reasonably redacted by the Receiving Party, to the extent such disclosure is reasonably required, to a bona fide potential licensee, investor, investment banker, acquirer, merger partner or other potential financial partner, and their respective attorneys, professional advisors and agents; provided that each such Person to whom such information is to be disclosed is informed of the confidential nature of such information and has entered into a written agreement with the Party requiring such Person to keep such information confidential. + +10.4 Use of Names. Except as expressly provided herein, neither Party will mention or otherwise use the name, logo or trademark of the other Party or any of its Affiliates (or any abbreviation or adaptation thereof) in any publication, press release, website or marketing and promotional materials, or other form of publicity, without the prior written approval of such other Party in each instance; [***]. The restrictions imposed by this Section 10.4 (Use of Name) will not prohibit either Party from making any disclosure identifying the other Party that, in the reasonable opinion of the disclosing Party's counsel, is required by Applicable Law; provided that such Party will submit the proposed disclosure identifying the other Party in writing to the other Party as far in advance as reasonably practicable (and in no event less than [***] ([***]) Business Days prior to the anticipated date of disclosure) so as to provide a reasonable opportunity to comment thereon. Page 50 of 85 + + + + + +10.5 Publicity. Within [***] ([***]) days of the Effective Date (or such other period as mutually agreed to by the Parties), the Parties shall issue a press release in the form set forth in Schedule 10.5 (Press Release). After such initial press release, neither Party shall issue a press release or public announcement relating to this Agreement without the prior written approval of the other Party, which approval shall not be unreasonably withheld, conditioned or delayed, except that a Party may (a) once a press release or other public statement is approved in writing by both Parties, make subsequent public disclosure of the information contained in such press release or other written statement without the further approval of the other Party and (b) issue a press release or public announcement, including without limitation, the disclosure of this Agreement (or a summary thereof) in filings, as required, in the reasonable opinion of the publishing Party's counsel, by Applicable Law (including by the rules or regulations of the United States Securities and Exchange Commission or any stock exchange on which the equity interests of such Party or its Affiliates (or any successor entity) are listed), provided, however, that such Party seeking disclosure will prepare such summary and a proposed redacted version of this Agreement as far in advance as reasonably practicable (and in no event less than [***] ([***]) Business Days prior to the anticipated date of disclosure) so as to provide a reasonable opportunity to comment thereon, and the other Party shall within such [***] ([***]) Business Day period, provide its comments, if any, which may be incorporated, in the reasonable discretion of the Party seeking disclosure. + +10.6 Destruction or Return of Confidential Information. Upon the end of the Term, whether in its entirety or with respect to a specific Workflow Development Plan, Disclosing Party may request in writing to Receiving Party, and Receiving Party will, as requested by Disclosing Party except as and if necessary for such Receiving Party to exercise surviving rights under this Agreement following such expiration or termination, (a) at the Disclosing Party's request, destroy, as soon as reasonably practicable, specific Confidential Information identified by the Disclosing Party in writing to the Receiving Party that are in Receiving Party's possession and confirm such destruction in writing to Disclosing Party or (b) deliver to Disclosing Party, as soon as reasonably practicable, at Disclosing Party's expense, all copies of such Confidential Information in the possession of Receiving Party; provided that the Receiving Party will be permitted to retain one copy of such Confidential Information for the sole purpose of performing any continuing obligations hereunder, as required by Applicable Law or for archival purposes. Notwithstanding the foregoing, Receiving Party also will be permitted to retain such additional copies of or any computer records or files containing such Confidential Information that have been created solely by Receiving Party's automatic archiving and back-up procedures, to the extent created and retained in a manner consistent with Receiving Party's standard archiving and back-up procedures, but not for any other use or purpose. 11. WARRANTIES AND DISCLAIMER; LIMITATION OF LIABILITY + +11.1 Mutual Representations. Each Party hereby represents and warrants to the other Party, as of the Effective Date, as follows: + +11.1.1 such Party is a corporation or limited liability company duly organized, validly existing and in good standing under the laws of the state in which it is incorporated; Page 51 of 85 + + + + + +11.1.2 such Party (a) has the corporate power and authority and legal right to enter into this Agreement, to perform its obligations and to grant the licenses hereunder and (b) has taken all necessary corporate action on its part to authorize the execution and delivery of this Agreement and the performance of its obligations hereunder; + +11.1.3 this Agreement has been duly executed and delivered on behalf of such Party and constitutes a legal and valid obligation binding upon such Party and enforceable against it in accordance with its terms; + +11.1.4 such Party has the right to grant the rights and licenses granted to the other Party pursuant to this Agreement; and + +11.1.5 it has not entered into an agreement with a Third Party, or granted any right or license to any Third Party that conflicts with any of the rights, obligations or licenses granted to the other Party hereunder. + +11.2 Mutual Covenants. Each Party hereby covenants to the other Party, as of the Effective Date, that: + +11.2.1 all of its and its Affiliates' employees who conduct any work under this Agreement will be, during the conduct of all such work, bound to a written agreement with such Party or its Affiliate to automatically assign all right, title and interest in and to their inventions and discoveries, whether or not patentable, to such Party as the sole owner thereof; + +11.2.2 to the best of its knowledge, without further duty of inquiry, such Party will not + +(a) employ or use any contractor or consultant that employs any Person debarred by the FDA (or subject to similar sanction of the EMA or other Regulatory Authority) or (b) employ any Person that is the subject of an FDA debarment investigation or proceeding (or similar proceeding of the EMA or other Regulatory Authority), in each of (a)-(b), in the conduct of its activities under this Agreement; + +11.2.3 it will perform or cause to be performed the obligations assigned to it under this Agreement in good scientific manner and in compliance with all Applicable Laws; and + +11.2.4 it shall not, during the Term, enter into an agreement with a Third Party, or grant any right or license to any Third Party relating to any of the intellectual property rights it Controls, or otherwise encumber such intellectual property rights it Controls, that would conflict with any of the rights, obligations or licenses granted to the other Party hereunder. Page 52 of 85 + + + + + +11.3 Additional Representations, Warranties and Covenants of BLI. As of the Effective Date, BLI further represents, warrants and, as applicable, covenants to Ginkgo that: + +11.3.1 BLI has, as of the Effective Date, and to its current knowledge will have during the Term, the full right, power and authority to (a) grant all of the right, title and interest in the licenses and other rights granted or to be granted to Ginkgo under this Agreement and (b) perform its obligations under this Agreement; 11.3.2 neither BLI nor its Affiliates have granted, and BLI and its Affiliates will not grant, any liens or security interest on any assets, including Intellectual Property, that would limit the scope of any rights or licenses granted to Ginkgo hereunder; + +11.3.3 neither BLI nor its Affiliates have knowledge of or have received any written notice of any claim that any Intellectual Property Controlled by a Third Party would be infringed or misappropriated by the activities contemplated under this Agreement, including Ginkgo's use of the Beacon Platform to perform a general Workflow under this Agreement; + +11.3.4 the Beacon Optofluidic Machines (including related Hardware and Software) and Consumables, at the time of delivery to Ginkgo, (a) shall have been manufactured, stored, shipped and delivered in accordance with Applicable Law and this Agreement; (b) to BLI's knowledge, [***] and (c) shall be free from all liens, charges, encumbrances and security interests; + +11.3.5 all services, including Services, shall be performed by or on behalf of BLI with requisite care, skill and diligence, by individuals who are appropriately trained and qualified, and in accordance with Applicable Law and industry standards; + +11.3.6 to BLI's knowledge [***], the use of the Beacon Platform as contemplated under this Agreement, but without any representation or warranty regarding [***] (a) [***] or (b) [***]; + +11.3.7 to BLI's knowledge [***], (a) the use of the Beacon Platform as contemplated under this Agreement and (b) the performance of the activities Ginkgo is granted the right to conduct under Section 9.1 (Grants to Ginkgo) (but for both (a) and (b) no representation, warranty or covenant is given by BLI for Ginkgo Materials, Ginkgo Workflows or for Collaboration Workflows) [***]; and + +11.3.8 BLI has independently developed all BLI Background IP or otherwise has a valid right to use and, as applicable, to permit Ginkgo and its permitted sublicensees to use, the BLI Background IP for all permitted purposes under this Agreement. + +11.4 Additional Representations, Warranties and Covenants of Ginkgo. As of the Effective Date, Ginkgo further represents, warrants and, as applicable, covenants to BLI that: + +11.4.1 Ginkgo has, as of the Effective Date, and will have during the Term, the full right, power and authority to (a) grant all of the right, title and interest in the licenses and other rights granted or to be granted to BLI under this Agreement and (b) perform its obligations under this Agreement; Page 53 of 85 + + + + + +11.4.2 Ginkgo has independently developed all Ginkgo Background IP or otherwise has a valid right to use, and, as applicable, to permit BLI and its permitted sublicensees to use, the Ginkgo Background IP for all permitted purposes under this Agreement; and + +11.4.3 neither Ginkgo nor its Affiliates have granted, and Ginkgo and its Affiliates will not grant, any liens or security interest on any assets, including Intellectual Property, that would limit the scope of any rights or licenses granted to BLI hereunder. + +11.5 DISCLAIMERS. + +11.5.1 EXCEPT AS SPECIFICALLY SET FORTH IN THIS AGREEMENT, NEITHER PARTY MAKES ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND CONCERNING ITS ACTIVITIES UNDER THIS AGREEMENT OR RESULTS OF ANY WORK PLAN AND HEREBY DISCLAIMS ALL REPRESENTATIONS AND WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS OF ITSELF OR THIRD PARTIES, VALIDITY, ENFORCEABILITY AND SCOPE OF PATENT RIGHTS, VALIDITY OF PATENT RIGHTS CLAIMS, WHETHER ISSUED OR PENDING, AND THE ABSENCE OF LATENT OR OTHER DEFECTS WHETHER OR NOT DISCOVERABLE. + +11.5.2 BEACON PLATFORMS ARE SOLD "FOR RESEARCH USE ONLY. NOT FOR USE IN DIAGNOSTIC PROCEDURES." GINKGO ACKNOWLEDGES THAT (I) BEACON PLATFORMS HAVE NOT BEEN APPROVED, CLEARED OR LICENSED BY THE UNITED STATES FOOD AND DRUG ADMINISTRATION OR ANY OTHER REGULATORY ENTITY WHETHER FOREIGN OR DOMESTIC FOR ANY SPECIFIC INTENDED USE, WHETHER RESEARCH, COMMERCIAL, DIAGNOSTIC OR OTHERWISE AND (II) GINKGO MUST ENSURE IT HAS ANY REGULATORY APPROVALS THAT ARE NECESSARY FOR GINKGO'S INTENDED USES OF BEACON PLATFORMS. GINKGO FURTHER AGREES TO COMPLY WITH ALL APPLICABLE LAWS AND REGULATIONS WHEN USING, MAINTAINING AND DISPOSING OF BEACON PLATFORMS. + +11.6 No Consequential Damages. EXCEPT TO THE EXTENT ARISING (A) FROM A PARTY'S BREACH OF ARTICLE 10 (CONFIDENTIALITY), (B) [***] (E) FROM A PARTY'S FRAUD, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OR (F) IN CONNECTION WITH A PARTY'S INDEMNIFICATION OBLIGATIONS UNDER ARTICLE 12 (INDEMNIFICATION; INSURANCE), IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR ANY LOST PROFITS, INDIRECT, SPECIAL, INCIDENTAL, EXEMPLARY OR CONSEQUENTIAL DAMAGES OF ANY KIND ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT, HOWEVER CAUSED AND ON Page 54 of 85 + + + + + +ANY THEORY OF LIABILITY (WHETHER IN CONTRACT, TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY OR OTHERWISE). THE LIMITATIONS SET FORTH IN THIS SECTION WILL APPLY EVEN IF A PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, AND NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED REMEDY. + +11.7 Liability Limit. TO THE GREATEST EXTENT PERMITTED UNDER APPLICABLE LAW, IN NO EVENT WILL A PARTY'S AGGREGATE LIABILITY (ABOVE AMOUNTS ACTUALLY PAID OR REIMBURSED BY SUCH PARTY'S INSURER (TO THE EXTENT NOT SELF-INSURED)) FOR A CLAIM ARISING OUT OF OR RELATED TO THIS AGREEMENT UNDER ANY LEGAL OR EQUITABLE THEORY, INCLUDING BREACH OF CONTRACT, TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY, AND OTHERWISE EXCEED [***], EXCEPT THAT (A) SUCH LIMITATION SHALL NOT APPLY TO (I) A PARTY'S BREACH OF ARTICLE 10 (CONFIDENTIALITY), [***], (V) A PARTY'S FRAUD, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OR (VI) A PARTY'S INDEMNIFICATION OBLIGATIONS UNDER ARTICLE 12 (INDEMNIFICATION; INSURANCE) AND (B) SUCH LIMITATION ON LIABILITY SHALL NOT INCLUDE ANY AMOUNTS ACCRUED AND ACTUALLY OWED PURSUANT TO THE TERMS OF THIS AGREEMENT. 12. INDEMNIFICATION; INSURANCE + +12.1 Indemnification by BLI. BLI will indemnify, defend and hold Ginkgo and its Affiliates, and its and their officers, directors, employees, licensees, sublicensees, Permitted Subcontractors and agents (each, a "Ginkgo Indemnitee") harmless from and against any and all suits, claims, proceedings and causes of action brought by a Third Party (collectively, "Claims") and all associated damages, liabilities, expenses and losses, including reasonable legal expenses and reasonable attorneys' fees (collectively, "Losses"), to the extent caused by or arising as a result of (a) the breach by BLI of this Agreement or material inaccuracy in any representation or warranty made by BLI under this Agreement, (b) the negligence, gross negligence, fraud or willful misconduct by a BLI Indemnitee in connection with this Agreement, (c) [***], and (d) any Claims by BLI's employees, Permitted Subcontractors or agents for worker's compensation or other liability coverage, insurance, benefits, and other employee-related claims, in each case of clauses (a)-(d) of this Section 12.1 (Indemnification by BLI), except to the extent Ginkgo has an obligation to indemnify an BLI Indemnitee in connection with such Claims and Losses pursuant to Section 12.2 (Indemnification by Ginkgo). + +12.2 Indemnification by Ginkgo. Ginkgo will indemnify, defend and hold BLI and its Affiliates, and its and their officers, directors, employees, Permitted Subcontractors and agents (each, an "BLI Indemnitee") harmless from and against any and all Claims and Losses, to the extent caused by or arising as a result of (a) the breach by Ginkgo of this Agreement or material inaccuracy in any representation or warranty made by Ginkgo under this Agreement, (b) the negligence, gross negligence, fraud or willful misconduct by a Ginkgo Indemnitee in connection with this Agreement, (c) [***] and (d) any Claims by Ginkgo's employees, Permitted Subcontractors or agents for worker's compensation or other liability coverage, insurance, benefits, and other employee-related claims, and (e) the development, manufacture, use, handling, storage, importation, distribution, sale or other commercialization of Ginkgo Inventions by Ginkgo Page 55 of 85 + + + + + +or its Affiliates, agents, licensees, sublicensees or customers, in each case of clauses (a)-(e) of this Section 12.2 (Indemnification by Ginkgo) except to the extent BLI has an obligation to indemnify a Ginkgo Indemnitee in connection with such Claims and Losses pursuant to Section 12.1 (Indemnification by BLI). + +12.3 Procedure. Any Party seeking indemnification under this Article 12 (Indemnification; Insurance) will promptly notify the indemnifying Party in writing after the Party seeking indemnification has received notice of any Claim. The Party seeking indemnification will reasonably cooperate with the indemnifying Party in the defense of any such Claim at the cost of the indemnifying Party. An indemnifying Party will not be obligated to defend, indemnify and hold harmless the Party seeking indemnification if, and only to the extent, the Party seeking indemnification delays providing notice of a Claim to the indemnifying Party and the delay in notice substantively prejudices the ability of the indemnifying Party to successfully defend the Claim. The indemnifying Party may not make any admission on behalf of the Party seeking indemnification [***]. Notwithstanding the foregoing, the Party seeking indemnification may at any time choose to be represented by its own counsel at its expense (or at the indemnifying Party's expense if the indemnifying Party's defense is inadequate as determined by a reasonableness standard). + +12.4 Insurance. Each Party will obtain and carry in full force and effect the minimum insurance requirements set forth below. Such insurance (i) will be primary insurance with respect to each Party's own participation under this Agreement and (ii) will be issued by a recognized insurer rated by A.M. Best "A-VII" (or its equivalent) or better, or an insurer pre-approved in writing by the other Party. + +12.4.1 Types and Minimum Limits. The types of insurance, and minimum limits will be: (i) any insurance policy that is required by any Applicable Law, including [***] and [***] policies where applicable; and (ii) [***] insurance with a minimum limit of [***] Dollars ($[***]) per occurrence and [***] Dollars ($[***]) in the aggregate. For clarity, [***]. + +12.4.2 Certificates of Insurance. Upon request by a Party, the other Party will provide Certificates of Insurance evidencing compliance with this Section 12.4 (Insurance). The insurance policies will be under an occurrence form, but if only a claims-made form is available to a Party, then such Party will continue to maintain such insurance after Expiration or the termination of this Agreement for a period of [***] ([***]) years following the end of the Term. 13. TERM AND TERMINATION + +13.1 Term. + +13.1.1 General. This Agreement shall commence on the Effective Date and, unless sooner terminated in accordance with its terms, including by Ginkgo pursuant to Section 7.3 (Buy-Down Election) or extended by the mutual written agreement of the Parties, shall continue until the Intended End of Term (such time period, as may be extended pursuant to this Section 13.3.1 (Term - General), the "Term"); provided that, if, Page 56 of 85 + + + + + +at the expiration of the Intended End of Term, Ginkgo has paid the Minimum Cumulative Purchase Commitment, but will not have paid to BLI the Full Purchase Target, then the Term of this Agreement shall automatically extend for an additional [***] ([***]) year period from the date of the expiration of the then-Intended End of Term so that, among other things, BLI may potentially receive the benefit of the Full Purchase Target and Ginkgo may receive the continuing benefit of royalty-free licenses. + +13.1.2 Effects of Expiration. Upon Expiration of this Agreement: (i) the licenses granted to BLI from Ginkgo pursuant to Section 9.2 (Grants to BLI) and the licenses granted to Ginkgo from BLI in Section 9.1.1 (Scope of Grants) and 9.1.2 (License Grant to Exploit [***]) shall survive and become perpetual, irrevocable, and royalty-free, (ii) no royalties shall be payable by Ginkgo on the sale or transfer of a Licensed Product, (iii) the pricing terms for Beacon Optofluidic Machines, Consumables, and services (including Services) set forth in Section 5.2.2 (Pricing - Adjustments) shall [***], (iv) the restrictions on BLI set forth in Section 6.2.1 (Restrictions on BLI) shall survive to the extent set forth therein and (v) [***]. + +13.2 Termination With Cause. + +13.2.1 Material Breach. If either Party commits a material breach of any of its obligations under this Agreement, then the other Party may give the breaching Party written notice of such material breach. If the breaching Party fails to cure such breach within sixty (60) days after such notice, then the non-breaching Party may terminate this Agreement upon written notice to the breaching Party in its entirety. Notwithstanding the foregoing, if the breaching Party has a bona fide dispute as to whether such breach has occurred or has been cured, it will so notify the non- breaching Party in writing and the cure period will be tolled until such dispute is resolved pursuant to Section 14.5.2 (Dispute Resolution). Upon a final determination of breach or failure to cure, the breaching Party will have the remainder of the cure period to cure such breach. [***]. + +13.2.2 Bankruptcy. Each Party will have the right to terminate this Agreement immediately in its entirety by giving written notice of termination to the other Party, if the other Party files a voluntary petition, or if an involuntary petition is granted in respect of the other Party and appeal proceedings are not commenced within [***] ([***]) Business Days from the date of such petition under the bankruptcy provisions of Applicable Law, or the other Party is declared insolvent, undergoes voluntary or involuntary dissolution, or makes an assignment for the benefit of its creditors, or suffers the appointment of a receiver or trustee over all, or substantially all, of its assets or properties. All rights and licenses under or to Intellectual Property granted under or pursuant to this Agreement by one Party to the other are, and will otherwise be deemed to be, for purposes of Section 365(n) of the U.S. Bankruptcy Code, licenses of rights to "intellectual property" as defined under Article 101 (52) of the U.S. Bankruptcy Code. The Parties agree that each Party will retain and may fully exercise all of its rights and elections under the U.S. Bankruptcy Code or such similar laws in a jurisdiction outside the United States. Page 57 of 85 + + + + + +13.3 Effects Termination. + +13.3.1 General. As of the effective date of any early termination of this Agreement, (a) neither Party shall be relieved of any obligation that accrued prior to such effective date of termination; (b) except as otherwise expressly provided herein, all rights and obligations of each Party hereunder will cease and (c) each Party shall return or destroy all Confidential Information of the other Party that is in its possession, subject to and as more fully set forth in Section 10.6 (Destruction or Return of Confidential Information). BLI shall fulfill any Production Purchase orders placed by Ginkgo prior to the effective date of termination and Ginkgo shall pay for such orders pursuant to Section 5.3.3 (Delivery and Payment). For all Development Purchases, BLI shall deliver to Ginkgo all works-in-progress and any report or analysis prepared prior to the effective date of termination within [***] ([***]) days after the effective date of termination. "Expiration" of this Agreement occurs only when[***]. + +13.3.2 Effects of Termination Based Upon Ginkgo's Buy-Down Election. In the event that termination is the result of Ginkgo exercising the Buy-Down Election (including payment of the Buy-Down Amount), then, as of the effective date of termination: (a) any and all existing Headstart Periods shall immediately be deemed to have accelerated to conclusion, (b) the restrictions on BLI set forth in Section 6.2.1 (Restrictions on BLI) shall terminate; (c) the licenses granted to Ginkgo from BLI in Section 9.1.1 (Scope of Grants) and 9.1.2 (License Grant to Exploit [***]) shall survive and become perpetual and irrevocable; (d) the licenses granted to BLI from Ginkgo pursuant to Section 9.2 (Grants to BLI) shall survive; (e) any Licensed Products arising from Collaboration Workflows or Ginkgo Workflows developed and used by Ginkgo to good effect prior to the effective date of termination shall be [***] on any sale or transfer of such Licensed Product, (f) (i) for any Licensed Products arising from Workflows other than those set forth in subclause (e) of this Section 13.3.2 (Effects of Termination Based on Ginkgo's Buy-Down Election), Ginkgo shall pay [***] and (ii) Ginkgo shall pay [***] for as long as one or more Beacon Optofluidic Machines are in operation at Ginkgo, (g) the pricing terms for Beacon Optofluidic Machines, Consumables, and services (including Services) shall be consistent with then-current BLI List Prices, and (h) Ginkgo shall pay BLI for any amounts due for work performed by BLI under and in accordance with this Agreement prior to the effective date of termination to the extent that BLI cannot reasonably cancel or reallocate such work. + +13.3.3 Effects of Termination Based Upon an Uncured Ginkgo Breach, Insolvency or Extended Force Majeure Event affecting Ginkgo. In the event that termination is the result of an uncured, material Ginkgo breach of the Agreement under Section 13.2.1 (Material Breach), for Ginkgo's insolvency pursuant to Section 13.2.2 (Bankruptcy) or for an Extended Force Majeure Event with respect to Ginkgo pursuant to Section 14.8 (Force Majeure), then, as of the effective date of termination: (a) any and all existing Headstart Periods shall immediately be deemed to have accelerated to conclusion, (b) the restrictions on BLI set forth in Section 6.2.1 (Restrictions on BLI) shall immediately deemed to have terminated; (c) the licenses granted to BLI from Ginkgo pursuant to Section 9.2 (Grants to BLI) shall survive, (d) the licenses granted to Ginkgo under Sections 9.1.1(c) (Grants to Ginkgo - Commercial License) and 9.1.2 (License Grant to Page 58 of 85 + + + + + +Exploit [***]) shall survive, but shall convert immediately into royalty-bearing licenses as set forth in subclause (e) hereof, (e) Ginkgo shall to pay to BLI [***]; provided that in the event such uncured material breach is [***], Ginkgo, at its election to be made on or before the [***] ([***]t h) day following the effective date of termination (or, if later, within [***] ([***]) days of learning of the relevant royalties for Licensed Products), may elect, in lieu of royalties, to pay to BLI [***]; (f) the pricing terms for Beacon Optofluidic Machines, Consumables, and services (including Services) shall be consistent with then-current BLI List Prices; and (g) Ginkgo shall pay BLI for any amounts due for work performed by BLI under and in accordance with this Agreement prior to the effective date of termination or materials ordered prior to the effective date of termination to the extent that BLI cannot reasonably cancel or reallocate such work or materials. + +13.3.4 Effects of Termination Based Upon an Uncured BLI Breach or Insolvency. In the event that termination is the result of an uncured material BLI breach of the Agreement under Section 13.2.1 (Material Breach) or for BLI's insolvency pursuant to Section 13.2.2 (Bankruptcy), then: (a) Ginkgo's obligations to pay to BLI the Minimum Cumulative Purchase Commitment under Section 7.2.2(a) (Contract Year Purchase Targets and Commitments) shall terminate, (b) BLI shall grant royalty-free status on all Licensed Products developed using the Beacon Platform and no royalties shall be payable by Ginkgo on any sale or transfer of such Licensed Products, (c) Ginkgo's obligations to pay to BLI the FOU License Fees pursuant to Section 7.4.1 (License Fees) shall terminate, (d) the licenses granted to Ginkgo from BLI in Section 9.1.1 (Scope of Grants) and 9.1.2 (License Grant to Exploit [***]) shall survive [***], (e) the licenses granted to BLI from Ginkgo pursuant to Section 9.2 (Grants to BLI) shall terminate, except with respect to any sublicenses granted by BLI under Section 9.2.2 for products and processes that were sold, commercialized or performed by BLI or to or for Third Parties prior to termination, which shall survive and such termination, but only if such sublicenses were granted in accordance with this Agreement, (f) the pricing terms for Beacon Optofluidic Machines, Consumables, and services (including Services) set forth in Section 5.2.2 (Pricing - Adjustments) shall survive for a period of [***] from the effective date of termination, (g) the restrictions on BLI set forth in Section 6.2.1 (Restrictions on BLI) shall survive to the extent set forth therein and (h) any and all existing Headstart Periods shall survive for their duration. If any such uncured, material BLI breach is solely due to BLI's material failure to perform its supply-related obligations under this Agreement, Section 13.4 (Rights in Lieu of Termination for BLI's Material Breach of Supply Obligations) may apply in Ginkgo's sole discretion. + +13.3.5 Effects of Termination Based Upon Ginkgo's Election to Terminate based on a BLI Extended Force Majeure Event. In the event that termination is elected by Ginkgo based upon an Extended Force Majeure Event with respect to BLI pursuant to Section 13.2.1 (Force Majeure), then, as of the effective date of termination: (a) any and all existing Headstart Periods shall survive for their duration as if this Agreement had not been terminated, (b) the restrictions on BLI set forth in Section 6.2.1 (Restrictions on BLI) shall survive to the extent set forth therein as if this Agreement had not been terminated; (c) the licenses granted to Ginkgo from BLI in Section 9.1.1 (Scope of Grants) and 9.1.2 (License Grant to Exploit [***]) shall survive and become perpetual, irrevocable and, subject to clause (f) of this Section 13.3.2, royalty-free; (d) the licenses granted to BLI Page 59 of 85 + + + + + +from Ginkgo pursuant to Section 9.2 (Grants to BLI) shall survive; (e) any Licensed Products arising from Collaboration Workflows or Ginkgo Workflows developed or used by Ginkgo to good effect prior to the effective date of termination shall be royalty-free and no royalties shall be payable by Ginkgo on any sale or transfer of such Licensed Product; provided that, if [***], if [***], then, in order for the sale or transfer of Licensed Products arising from Collaboration Workflows or Ginkgo Workflows developed or used by Ginkgo to good effect prior to the effective date of termination to be royalty-free, Ginkgo must pay to BLI [***], but Ginkgo will have [***] ([***]) days following the effective date of termination to decide whether to make such payment to BLI or to pay royalties for such Licensed Products under subclause (f) of this Section 13.3.5 (Effects of Termination Based Upon Ginkgo's Election to Terminate based on a BLI Extended Force Majeure Event), (f) (i) for any Licensed Products arising from Workflows other than as set forth in subclause (e) of this Section 13.3.5 (Effects of Termination Based Upon Ginkgo's Election to Terminate based on a BLI Extended Force Majeure Event), Ginkgo shall pay [***] and (ii) Ginkgo shall pay [***]; provided that, if [***], then [***], (g) the pricing terms for Beacon Optofluidic Machines, Consumables, and services (including Services) shall be consistent with then-current BLI List Prices and (h) Ginkgo shall pay BLI for any amounts due for work performed by BLI under and in accordance with this Agreement prior to the effective date of termination to the extent that BLI cannot reasonably cancel or reallocate such work. + +13.3.6 Non-Limitation of Remedies. Nothing in this Section 13.3 (Effects of Expiration and Termination) limits or precludes any other remedies available to a Party, including for example, the seeking and obtaining of injunctive relief. + +13.3.7 Annual Royalty Update. The Parties hereby acknowledge that, if this Agreement is terminated, then, depending on the manner of termination, Ginkgo may, as more fully set forth in Section 13.3 (Effects of Termination), be required to pay royalties to BLI with respect to Licensed Product, which royalties will be in line with BLI's then-standard commercial terms. In order for Ginkgo to more fully understand the royalty that may be owed to BLI in the event this Agreement is terminated, on an annual basis, starting at the end of the [***] Contract Year, BLI will provide Ginkgo, in writing, its then-current commercial terms with respect to royalties for the Licensed Products. + +13.4 Rights in Lieu of Termination for BLI's Material Breach of Supply Obligations. In the event that Ginkgo has the right to terminate this Agreement under Section 13.2.1 (Material Breach) due to a material breach of BLI to perform its supply-related obligations under this Agreement (for clarity, this shall not include (a) [***] or (b) [***], Ginkgo may elect by written notice to BLI to, instead of terminating this Agreement, keep this Agreement and, without limiting any other right or remedy under Applicable Law or this Agreement, to decrease the amount of the Minimum Cumulative Purchase Commitment for the current and future Contract Years, as well as the Full Purchase Target, in each case in amounts reasonably mutually agreed upon by the Parties in good faith in accordance with this Section 13.4 (Rights in Lieu of Termination for BLI's Material Breach of Supply Obligations). Following any notice by Ginkgo to BLI under this Section 13.4 (Rights in Lieu of Termination for BLI's Material Breach of Supply Obligations), the Parties shall (i) discuss and implement in good faith a plan to address the supply breach by BLI and shall discuss in good faith potential approaches to prevent such breach from reoccurring, including a Page 60 of 85 + + + + + +modification to Ginkgo's forecasts and BLI's obligation to meet a certain percentage of such forecasts and (ii) discuss and implement reductions to the Minimum Cumulative Purchase Commitment for the current and future Contract Years, as well as reductions to the Full Purchase Target, which reductions will be made based on [***]. + +13.5 Determination of Use of Workflow to Good Effect. In the event the Parties disagree as to whether a Collaboration Workflow or Ginkgo Workflow has been developed and used by Ginkgo to good effect prior to termination pursuant to Section 13.3.2 (Effects of Termination Based Upon Ginkgo's Buy-Down Election) or Section 13.3.5 (Effects of Termination Based upon Ginkgo's Election to Terminate based on a BLI Extended Force Majeure Event), with respect to each, at either Party's request, the dispute shall be resolved in an accelerated manner by an Expert Panel subject to the process and cost allocation set forth in Section 3.5.3. + +13.6 Surviving Provisions. In addition to this Section 13.6 (Surviving Provisions), the following Sections and Articles will survive Expiration and any termination of this Agreement: Article 1 (Definitions), Section 2.2.3 (Retooling and Development Costs) (solely with respect to (i) [***] and (ii) [***]), Section 2.4 (Costs Under Workflow Development Plans) (solely with respect to costs incurred prior to the end of the Term), Section 2.5 (Termination of Workflow Development Plans) (solely with respect to the effects of termination of a Workflow Development Plan as set forth therein), Section 2.8 (Records) (solely for [***] ([***]) years following the end of the Term or for such longer period as required by Applicable Law), Section 3.9 (Expenses) (solely with respect to expenses incurred prior to the end of the Term), Section 4.1.10 (solely to the extent the BLI Terms and Conditions need to survive in order to give effect to the surviving terms of this Agreement), Section 6.1 (Headstart Period) solely to the extent any Headstart Periods extend beyond the Term) and further subject to each of Section 13.3.2 (Effects of Termination Based Upon Ginkgo's Buy-Down Election), Section 13.3.3 (Effects of Termination Based Upon an Uncured Ginkgo Breach, Insolvency or Extended Force Majeure Event affecting Ginkgo) or Section 13.3.5 (Effects of Termination Based upon Ginkgo's Election to Terminate based on a BLI Extended Force Majeure Event), as applicable), Section 6.2.1 (Restrictions on BLI) (solely for the [***] ([***]) month period following the end of the Term), Section 7.5 (Manner of Payments) through Section 7.10 (Late Payments) (solely with respect to any unpaid amounts that accrued prior to the end of the Term or that accrue at any time under Section 7.4.2 (Milestone Payments)), Article 8 (Intellectual Property Ownership; Use of Data), but excluding Section 8.4 (Prosecution and Enforcement Rights), Section 8.5.1 (Disclosure), and Section 8.6 (Notification of New Products; Early Access), Article 10 (Confidentiality), Section 11.5 (Disclaimers), Section 11.6 (No Consequential Damages), Section 11.7 (Liability Limit, Section 12.1 (Indemnification by BLI) through Section 12.3 (Procedure), Section 13.1.2 (Effects of Expiration) (solely for Expiration of this Agreement and only for [***] ([***]) years for under clause (iii) thereof), Section 13.3 (Effects of Termination) (solely for termination of this Agreement), Section 13.5 (Determination of Use of Workflow to Good Effect), Section 14.5 (Governing Law; Dispute Resolution; Equitable Remedies), Section 14.9 (Further Assurances) and Section 14.15 (Interpretation). 14. MISCELLANEOUS + +14.1 Notice. Any notice given under this Agreement must be in writing and delivered either to the addresses set forth below in person or via overnight courier (or to such other addresses Page 61 of 85 + + + + + +of which the Parties may from time to time be notified in writing) and each such notice will be effective upon actual receipt: + +If to Ginkgo: + +Ginkgo Bioworks, Inc. 27 Drydock Avenue, 8th Floor Boston, MA 02210 Attn: [***] + +With a copy to: + +Ginkgo Bioworks, Inc. 27 Drydock Avenue, 8th Floor Boston, MA 02210 Attn: [***] + +with an electronic copy to [***] + +With a copy to: + +[***] + +If to BLI: + +Berkeley Lights, Inc. 5858 Horton Street, Suite 320 Emeryville, CA 94608 Attn: [***] + +With a copy to: + +Berkeley Lights, Inc. 5858 Horton Street, Suite 320 Emeryville, CA 94608 Attn: [***] + +With an electronic copy to: [***] + +With a copy to: + +[***] + +Such notice will be deemed to have been given as of the date delivered by hand or on the second business day (at the place of delivery) after deposit with an internationally recognized overnight delivery service. + +14.2 Independent Contractors. It is understood that both Parties hereto are independent contractors and are engaged in the operation of their own respective businesses, and neither Party is to be considered the agent of the other. Neither Party has any authority to enter into any contracts or assume any obligations for the other. Page 62 of 85 + + + + + +14.3 Severability. If any provision of this Agreement is held illegal, invalid or unenforceable by a court of competent jurisdiction, such decision will in no way affect the validity or enforceability of any other provisions, which will remain in full force and effect, and the Agreement will be interpreted as if such provision were not included in this Agreement; provided that the Parties will negotiate in good faith an amendment to this Agreement that replaces the unenforceable provision with an enforceable provision (to the extent possible) that reflects their initial intent. + +14.4 Assignment. + +14.4.1 Permitted Assignments. Neither Party may assign or otherwise transfer this Agreement or any rights hereunder, without the prior written consent of the other Party; provided that either Party may assign or otherwise transfer this Agreement or any rights hereunder (a) to a wholly-owned subsidiary of such Party or (b) in connection with the transfer or sale of all or substantially all of the business or assets of such Party related to the subject matter of this Agreement, whether by merger, consolidation, divestiture, restructure, sale of stock sale of assets or otherwise its successor, whether in a merger, sale of stock or sale of assets or any other transaction, in each case (a)-(b), without first obtaining the prior written consent of the other Party, so long as the non-assigning Party is notified in writing of such assignment within [***] ([***]) days following such assignment; provided further that, in no event may BLI assign this Agreement, in whole or in part, to any Person [***] without first obtaining Ginkgo's prior written consent. Any purported assignment of this Agreement by a Party in contradiction to this Section 14.4 (Assignment) will be void and of no effect. + +14.4.2 Transferee. Notwithstanding anything to the contrary set forth herein, if a Party (the "Assigning Party") assigns or transfers this Agreement to a permitted Third Party pursuant to Section 14.4.1 (Permitted Assignments) (any such Third Party, a "Transferee"), then the Intellectual Property that was held or developed by such Transferee prior to or after such assignment or transfer (other than Intellectual Property developed by such Transferee in the course of conducting the Assigning Party's activities under this Agreement to the extent such Intellectual Property would have been so included had it been discovered, created, made, developed, conceived or reduced to practice by such Assigning Party) shall not be deemed to be Intellectual Property Controlled by such Assigning Party, and shall also not be affected or otherwise encumbered in any manner, including without limitation, by being subject to any rights of or licenses under this Agreement. Furthermore, such Transferee (and Affiliates of such Transferee: (i) existing immediately prior to such merger, acquisition, assignment or transfer; or (ii) formed on or after such merger, acquisition, assignment or transfer, which are not controlled by (as defined under the Affiliate definition in Section 1.2 ("Affiliate" definition)) the Assigning Party) shall be excluded from the Affiliate definition for purposes of determining Intellectual Property that is subject to this Agreement. Page 63 of 85 + + + + + +14.5 Governing Law; Dispute Resolution; Equitable Remedies. + +14.5.1 Governing Law. This Agreement will be construed and interpreted in accordance with the laws of the State of Delaware, without regard to any choice of law provision. + +14.5.2 Dispute Resolution. Except with respect to those disputes in which a Party seeks equitable relief pursuant to Section 14.5.3 (Equitable Remedies) or for which a Party or Person is expressly given final decision-making authority as set forth in Section 3.5 (Decision-Making), the Parties, through their Senior Officers, will make a good faith effort to settle any disputes that may arise between them with respect to this Agreement. If the Parties do not settle the matter within [***] ([***]) days after the delivery by one Party of written notice (the "Arbitration Notice") to the other Party involved, then the Parties will submit the matter to binding arbitration in Wilmington, Delaware. All matters so submitted to arbitration will be settled by three (3) arbitrators in accordance with the [***], or its successor (the "[***] Rules"). In the event of a conflict between [***] Rules and this Agreement, this Agreement shall govern. Each Party will designate an arbitrator and the Parties will cause the designated arbitrators to mutually agree upon and to designate a third arbitrator who will serve as chairperson; provided, however, that failing such agreement within [***] ([***]) days of delivery of the Arbitration Notice, the third (3rd) arbitrator will be appointed in accordance with [***] Rules within an additional [***] ([***]) days. The Parties shall arrange for a hearing to occur and be completed within [***] ([***]) days after the appointment of the third (3rd) arbitrator, which hearing shall last no longer than [***], unless the arbitral panel believes a longer period is required, in which case the hearing may last [***]. The Parties will cause the arbitrators to decide the matter to be arbitrated within [***] ([***]) days after the close of evidence unless the chairperson arbitrator determines, at the request of any Party or on his or her own initiative, that such time period should be extended, in which case such time period may not be extended beyond an additional [***] ([***]) day period. Each of Ginkgo and BLI will be permitted to serve one set of document production requests with no more than [***] ([***]) requests; no more than [***] ([***]) interrogatories, including subparts, no more than [***] ([***]) requests for admissions; no more than [***] ([***]) subpoenas to Third Parties; and no more than [***] ([***]) notices of deposition per side, in each case, unless the arbitral panel directs otherwise. Any documents not in English that are produced by a Party will be accompanied by a translation into English, which translation will not be binding upon the other Party or the arbitrators. Each Party covenants and agrees that (a) it will produce documents as required by this Section 14.5.2 (Dispute Resolution), and (b) it will make its employees, and will use commercially reasonable efforts to make its former employees, available for depositions and hearing testimony as requested by the other Party. The final decision of the majority of the arbitrators shall be in writing, in all events follow governing law and will be furnished to all the Parties in such dispute. Judgment on such decision may be entered in any court having jurisdiction. Such decision may be used in a court of law only for the purpose of seeking enforcement of the arbitrators' award. Except as required by Applicable Law or to enforce an arbitrators' award, neither Party may disclose the existence, contents or results of an arbitration brought in accordance with this Agreement, or the evidence produced by its opposing Parties, or any analysis or summaries derived from such evidence. The Parties agree that all applicable statutes of limitation and Page 64 of 85 + + + + + +time-based defenses (such as estoppel and laches) will be tolled while the procedures set forth in this Section 14.5.2 (Dispute Resolution) are pending. The Parties will cooperate in taking any actions necessary to achieve this result. Except as may be determined by the arbitrators, neither Party shall be penalized for delays resulting from dispute resolution conducted pursuant to this Section 14.5.2 (Dispute Resolution). + +14.5.3 Equitable Remedies; Single Forum. Notwithstanding any other terms of this Agreement, either Party may seek a preliminary injunction or other provisional equitable relief in any court of competent jurisdiction as permitted by Applicable Law. At all times while any claim, action, suit or other proceeding between the Parties and/or any of their Affiliates (or among the Parties and/or any of their Affiliates and one or more Third Parties) arising out of or relating to this Agreement is pending in any court of competent jurisdiction, no dispute that is justiciable and can be joined to such pending claim, action, suit or other proceeding shall be submitted to arbitration pursuant to Section 14.5.2 (Dispute Resolution) without both Parties' mutual consent and, instead, either Party may join such dispute to the pending claim, action, suit or other proceeding by including such dispute in its pleadings or amending its pleadings. In the event that a motion to amend is required to achieve such joinder, the non- moving Party shall consent to such motion. + +14.6 Entire Agreement; Amendment and Waiver. This Agreement, together with the Exhibits and Schedules attached hereto, sets forth and constitutes the entire agreement and understanding between the Parties with respect to the subject matter hereof and all prior agreements, understandings, promises and representations, whether written or oral, with respect thereto are superseded hereby. This Agreement may not be amended except by a writing signed by authorized representatives of both Parties. The failure of a Party at any time or times to require performance of any provision hereof will in no manner affect its rights at a later time to enforce the same. To be valid, a waiver must be in writing and signed by an authorized representative of the Party having the right that is waived or to whom the obligation to be waived is owed. + +14.7 English Language. This Agreement will be written and executed in, and all other communications under or in connection with this Agreement will be in, the English language. Any translation into any other language will not be an official version thereof, and in the event of any conflict in interpretation between the English version and such translation, the English version will control. + +14.8 Force Majeure. Any delay in the performance of any of the duties or obligations (other than payment obligations) of either Party hereto caused by a Force Majeure Event (defined below) shall not be considered a breach of this Agreement and the time required for performance shall be extended for a period equal to the period of such delay. "Force Majeure Event" shall mean acts of God, acts of the public enemy, war, terrorism, insurrections, riots, injunctions, embargoes, fires, explosions, floods, or other unforeseeable causes beyond the reasonable control and without the fault or negligence of the Party who is so prevented or delayed from fulfilling its obligations under this Agreement by such Force Majeure Event (the "Affected Party"). The Affected Party shall give prompt written notice to the other Party of such cause and shall take whatever reasonable steps are appropriate in the other Party's discretion to relieve the effect of such cause as rapidly as possible. The Party not directly affected by the Force Majeure Event shall have the right to terminate this Agreement with written notice effective upon receipt if Force Page 65 of 85 + + + + + +Majeure Event continues to prevent performance or compliance in any material respect by the other Party for a period of more than [***] ([***]) days or should [***] ([***]) Force Majeure Events apply to the performance of such other Party during any [***] (each a "Extended Force Majeure Event"). + +14.9 Further Assurances. Each Party will duly execute and deliver, or cause to be duly executed and delivered, such further instruments and do and cause to be done such further acts and things, including the filing of such assignments, agreements, documents, and instruments, as may be necessary or as the other Party may reasonably request in connection with this Agreement or to carry out more effectively the provisions and purposes hereof, or to better assure and confirm unto such other Party its rights and remedies under this Agreement. + +14.10 Third Party Beneficiaries. There are no Third Party beneficiaries under this Agreement, except to the extent a Third Party is indemnified pursuant to Article 12 (Indemnification; Insurance); provided that, in no event will any Third Party entitled to indemnification pursuant to Article 12 (Indemnification; Insurance) be allowed to enforce the terms thereof against a Party. + +14.11 Export Control. This Agreement is made subject to any restrictions concerning the export of products or technical information from the United States or other countries which may be imposed upon the Parties from time to time. Each Party agrees that it will not export, directly or indirectly, any technical information acquired from the other Party under this Agreement or any products using such technical information to a location or in a manner that at the time of export requires an export license or other governmental approval, without first obtaining the applicable license, approval, or written consent to do so from the appropriate agency or other governmental entity. + +14.12 References. Unless otherwise specified, (a) references in this Agreement to any Article, Section, Exhibit or Schedule will mean references to such Article, Section, Exhibit or Schedule of this Agreement, (b) references in any Section to any clause are references to such clause of such Section and (c) references to any agreement, instrument or other document in this Agreement refer to such agreement, instrument or other document as originally executed or, if subsequently amended, replaced or supplemented from time to time, as so amended, replaced or supplemented and in effect at the relevant time of reference thereto. + +14.13 Attachments. In the event of any inconsistencies between this Agreement and any Exhibits, Schedules or other attachments hereto, the terms of this Agreement will control, unless the relevant Exhibit, Schedule or other attachment explicitly references its inconsistency with this Agreement and states that it shall control. + +14.14 Non-Solicit. Neither Party will, [***], directly or indirectly with or through any Person, solicit for employment any Person who is an employee of the other Party; provided, however, that general solicitation of the public for employment shall not constitute a solicitation hereunder so long as such general solicitation is not designed to target any such Person. In the event that a Party solicits and then hires an employee of the other Party in violation of this Section 14.4 (Non-Solicit), the hiring Party shall, [***], within [***] ([***]) days of such hire, pay the other Party an amount equal to the [***] cash compensation actually paid to the individual Page 66 of 85 + + + + + +([***]) by the non-hiring Party in the immediately prior calendar year and, further, if the individual solicited and then hired in violation of this is a Key Person under Section 5.4.1(b) (Dedicated FTEs; Key Persons), then BLI shall have [***] ([***]) months to identify an employee as the individual to replace such Key Person and any (a) [***] or (b) [***], in each case (a)-(b), to the extent due to the absence of such Key Person performing a Workflow Development Plan upon which the Key Person was engaged, shall be deemed waived for that [***] month period. + +14.15 Interpretation. All headings are for convenience only and will not affect the meaning of any provision of this Agreement. The Parties acknowledge that each Party has read and negotiated the language used in this Agreement. Because both Parties participated in negotiating and drafting this Agreement, no rule of construction will apply to this Agreement which construes ambiguous language in favor of or against either Party by reason of that Party's role in drafting this Agreement. Except where the context expressly requires otherwise, (a) the use of any gender herein will be deemed to encompass references to either or both genders, and the use of the singular will be deemed to include the plural (and vice versa), (b) the words "include," "includes" and "including" will be deemed to be followed by the phrase "without limitation," whether or not so appearing herein, (c) the word "will" will be construed to have the same meaning and effect as the word "shall," (d) any reference herein to any Person will be construed to include the Person's successors and permitted assigns, (e) the words "herein," "hereof" and "hereunder," and words of similar import, will be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (f) references to any Applicable Law, rule or regulation, or article, section or other division thereof, will be deemed to include the then-current amendments thereto or any replacement or successor Applicable Law, rule or regulation thereof and (g) the term "or" will be interpreted in the inclusive sense commonly associated with the term "and/or." + +14.16 Counterparts. This Agreement may be executed in one or more counterparts, each of which, when executed and delivered by facsimile, electronic transmission or by mail delivery, will be deemed an original and all of which will constitute one and the same instrument. + +[Signature Page Directly Follows] Page 67 of 85 + + + + + +IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed as of the Effective Date by their respective duly authorized representatives. GINKGO BIOWORKS, INC. BERKELEY LIGHTS, INC. + +By: /s/ Barry Canton By: /s/ Keith Breinlinger Name: Barry Canton Name: Keith Breinlinger Title: CTO Title: CTO + + + + + +SCHEDULE 1.10 + +Beacon Optofluidic Machine Specifications + +Intentionally omitted pursuant to Regulation S-K, Item 601(a)(5) + + + + + +SCHEDULE 1.18 + +BLI Terms and Conditions + +Intentionally omitted pursuant to Regulation S-K, Item 601(a)(5) + + + + + +SCHEDULE 1.21 + +Buy-Down Examples + +Intentionally omitted pursuant to Regulation S-K, Item 601(a)(5) + + + + + +SCHEDULE 1.36 + +Intentionally omitted pursuant to Regulation S-K, Item 601(a)(5) + + + + + +SCHEDULE 1.62 + +FTE Rate + +$[***] USD per year* * All FTEs (Hardware, Software, Program Manager, FAS, etc.) will be billed to Ginkgo at this rate. For periods of less than 1 year, billing will be pro-rated based on time. [***] + + + + + +SCHEDULE 1.92 + +Lead Time + +Intentionally omitted pursuant to Regulation S-K, Item 601(a)(5) + + + + + +SCHEDULE 1.104 + +OptoSelect Chips + +Intentionally omitted pursuant to Regulation S-K, Item 601(a)(5) + + + + + +SCHEDULE 1.107 + +Performance Service Plan + +Intentionally omitted pursuant to Regulation S-K, Item 601(a)(5) + + + + + +SCHEDULE 2.2.2 + +Initial Workflow Development Plans + +Intentionally omitted pursuant to Regulation S-K, Item 601(a)(5) + + + + + +SCHEDULE 5.2.1 + +Pricing Schedule + +Intentionally omitted pursuant to Regulation S-K, Item 601(a)(5) + + + + + +SCHEDULE 5.3.3 + +Qualification Standards + +Intentionally omitted pursuant to Regulation S-K, Item 601(a)(5) + + + + + +SCHEDULE [***] 1. [***] + + + + + +SCHEDULE 10.5 + +Draft Press Release - Subject to further changes by Both Parties + +Intentionally omitted pursuant to Regulation S-K, Item 601(a)(5) + + + + + +EXHIBIT A + +Workflow Development Plans + +Intentionally omitted pursuant to Regulation S-K, Item 601(a)(5) + + + + + +EXHIBIT B + +Outline of First Two (2) Initial Workflow Development Plans + +Intentionally omitted pursuant to Regulation S-K, Item 601(a)(5) + + + + + +EXHIBIT C + +GINKGO BIOWORKS, INC. AGREEMENT CONCERNING RECEIPT OF AND ACCESS TO GINKGO PROPERTY AND CONFIDENTIAL INFORMATION + +Intentionally omitted pursuant to Regulation S-K, Item 601(a)(5) + + + + + +EXHIBIT D + +BLI Proprietary Workflows for Section 7.4.2 + +Intentionally omitted pursuant to Regulation S-K, Item 601(a)(5) \ No newline at end of file diff --git a/full_contract_txt/BEYONDCOMCORP_08_03_2000-EX-10.2-CO-HOSTING AGREEMENT.txt b/full_contract_txt/BEYONDCOMCORP_08_03_2000-EX-10.2-CO-HOSTING AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..46266ac1c26e33f13fd34dfe397457fd7d3b91ac --- /dev/null +++ b/full_contract_txt/BEYONDCOMCORP_08_03_2000-EX-10.2-CO-HOSTING AGREEMENT.txt @@ -0,0 +1,377 @@ +1 Exhibit 10.2 + + CO-HOSTING AGREEMENT + + This Co-Hosting Agreement (the "Agreement") is made by and between NETWORKS ASSOCIATES, INC., a Delaware corporation, doing business as Network Associates, Inc., with its principal place of business at 3965 Freedom Circle, Santa Clara, California 95054 ("NAI"), and SOFTWARE.NET CORPORATION, a Delaware corporation, a.k.a. Beyond.com, with its principal place of business at 1195 West Fremont Avenue, Sunnyvale, California 94087 ("Co-Host"). The Effective Date of this Agreement (herein called the "Effective Date") is September 21, 1998. + + RECITALS + + WHEREAS, Co-Host owns various Internet locations, including the location set forth in Part 1 of Exhibit "A" hereto (the "Co-Host Site") and markets software and computer hardware products from the Co-Host Site (herein referred to as the "Goods"). + + WHEREAS, Co-Host, as successor of Cybersource Corporation, and NAI are parties to an Electronic Software Distribution Agreement, dated as of September 1, 1997 regarding the electronic distribution of NAI's Goods (the "ESD Agreement"). + + WHEREAS, NAI has developed various Internet locations (the "NAI Internet Sites") (with separate URL designations issued to NAI by InterNIC) (said designations being herein referred to individually as an "URL") comprised of one or more file servers, with an Internet access at the applicable URL. Those portions of the NAI Internet Site or any future Internet locations developed by NAI which are accessible by members of the general public are referred to herein as the "Originating Locations." NAI permits the maintenance of "hot links" from the Originating Locations to other Internet locations, whereby the end user can transfer from the NAI Internet Sites to the Co-Host Site by clicking the pointing device on highlighted text or images. "Originating Locations" does not include the McAffee Mall (as defined in Part 2 of Exhibit "A") or web servers within a firewall or accessable only by passwords or other similarly restricted URLs (the "Restricted Sites"); provided, however, that the term Restricted Sites shall not include sites accessable only through online services (such as AOL) and other portals generally accessable to the public. + + WHEREAS, NAI and Co-Host desire to place a Co-Host "hot link" for the Goods at the Originating Locations and NAI and Co-Host desire to enter into certain additional agreements regarding such marketing opportunities through the Originating Locations. + + THEREFORE, in consideration of the foregoing, and of the mutual covenants and agreements hereinafter set forth, Co-Host and NAI have entered into the agreements hereinafter set forth. + + 1 + +2 IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the Effective Date. + + SOFTWARE.NET CORPORATION (a.k.a. Beyond.com) + +ADDRESS FOR NOTICES 1195 West Fremont Avenue Sunnyvale, California 94087 Attention: President + + By: /s/ JAMES R. LUSSIOR ------------------------------------- Name: James R. Lussior ----------------------------------- Title: Vice President Business Operations ---------------------------------- Date: 9/21/98 ----------------------------------- + + NETWORKS ASSOCIATES, INC. + +ADDRESS FOR NOTICES 3965 Freedom Circle Santa Clara, California 95054 Attention: Vice President Legal Affairs + + By: /s/ PRABHAT K. GOTAL ------------------------------------- Name: Prabhat K. Gotal ----------------------------------- Title: CFO ---------------------------------- + +Date: September 21, 1998 + + + + + + 2 3 + + TERMS AND CONDITIONS OF AGREEMENT + +1. LOCATION. During the Term (as defined in Section 6 (a) below), NAI shall provide the following marketing considerations to Co-Host: + + (a) Co-Hosting Rights. Co-Host shall be permitted to maintain on the Online Service Page (as defined in Part 2 of Exhibit "A") of the Originating Locations in the manner set forth on Exhibit "B" hereto (and on such other positions as are set forth on Exhibit "B" or as the parties may mutually agree upon in writing from time to time) a hot link to Internet locations specified by the Co-Host (the "Destination") from which Goods (other than Competitor's Goods (hereinafter defined)) may be sold. The web pages at the Destination shall be maintained in accordance with the requirements of this Agreement, including without limitation, Section 2 hereof. "Competitor's Goods" as used herein shall mean the Goods of any of the persons or entities described on Part 1 of Exhibit "C" attached hereto and made a part hereof. The Destination shall not contain any links to any third party sites for the purchase of Competitor's Goods; provided that the Destination will link to the Co-Host Site (which will sell Competitor's Goods). + + (b) Exclusive Positioning. Co-Host shall be the exclusive reseller of software products ("Software") at the Originating Locations. The preceding sentence shall not prohibit NAI from (i) reselling Software including NAI Goods (hereinafter defined) from the McAfee Mall; (ii) referencing and linking to sites of strategic partners (other than competitors of Co-Host listed on Part 2 of Exhibit "C") which may also be involved in the resale of Software from such sites; provided that no Software may be purchased on the page of such site which is linked to any Originating Location and further provided that the references and links to the sites of strategic partners shall not be placed on the Online Service Page; and (iii) advertising Software with banners, buttons and other forms of online advertising; provided that any link from such advertising takes the end user to the publisher of the Software and not a reseller of Goods (other than Co-Host). For example, an advertising banner or button for the Windows 98 software program may link back to the website of Microsoft Corporation but not the website of Dell Computer Corporation which is reselling the program. Without limitation on the foregoing, NAI may co-host a comparative shopping service on the Originating Locations. NAI will obtain a written covenant that the comparative shopping co-host will present sellers of Software in a neutral manner and upon request of Co-Host will require removal or alteration of presentations by such co-host on such co-hosted facility which Co-Host reasonably deems to be non-neutral; provided, however, that, notwithstanding the foregoing, Co-Host may be the featured or most prominent Software reseller on any such service. + + (c) Short Term Product Exclusives. For a period of fourteen (14) days following release of any new NAI Goods or major version releases (i.e., version 3.0 to 4.0) of existing NAI Goods, Co-Host shall be the exclusive online seller of any such + + 3 4 + + release released during the Term. "NAI Goods" as used herein shall mean retail desktop software products offered by NAI under the "McAfee" brand or other NAI owned brand, which NAI makes available for resale through distributors and resellers via the Internet. + + (d) Reference Site. Co-Host may refer to the Originating Locations as a Co-Host customer location and to NAI as a Co-Host customer hereunder provided all such references shall be subject to the prior review and approval of NAI, which approval will not be unreasonably withheld. + + (e) Links to Online Service Page. Any end user accessing the principal URLs of NAI (e.g., mcafee.com, cybermedia.com, pgp.com, tis.com) shall be taken to the Online Service Page. Any end user accessing a "buy" button on any of the Originating Locations shall be taken to the Online Service Page. NAI shall not sell retail desktop consumer products, including without limitation, NAI Goods from the NAI Internet Sites (other than the McAfee Mall). + + NAI reserves the right to change the URL of the Originating Locations from time to time and agrees to give Co-Host as much notice of any such change as is practicable. + +2. MARKETING AND SALES. + + (a) Placement of Order. In consideration of the Co-Hosting Fee set forth in Part 3 of Exhibit "A", NAI shall provide the marketing consideration identified in Section 1 during the Term of this + + + + + + Agreement. + + (b) Advertising Materials; Destination Operation. Co-Host shall provide to NAI artwork and text materials with respect to the advertisement of the Destination at the Originating Locations. Such artwork and materials must be non-infringing, inoffensive, accurate, truthful and otherwise comply with all applicable laws. Co-Host shall comply with all applicable laws in connection with the operation of the Destination, including without limitation, requirements regarding the confidentiality of information concerning end users. NAI retains the right, but not the obligation, to disapprove or remove any advertisements or advertising materials it reasonably deems illegal, inappropriate or otherwise inconsistent with the purposes of the Originating Sites, without the consent of Co-Host. + + (c) Use of Trademarks. Co-Host hereby grants to NAI a non-exclusive, non-transferable, royalty-free license during the term of this Agreement to use the trademarks, service marks and trade names of Co-Host in connection with the advertising and promotion of the Goods from the Originating Locations, provided that NAI complies with the terms of Section 9(b) of the Web Site Services Agreement (as defined below). Co-Host reserves the right to terminate the foregoing right, after giving NAI notice and opportunity to cure the allegedly harmful use, if in Co-Host's reasonable judgment, NAI's use of such trademarks, service marks and trade names harms the business, image or goodwill of Co-Host. + + 4 5 + + (d) Limited Duty of Promotion. NAI shall have no duty or obligation to advertise or promote the Goods, other than as set forth in this Section 2. Except as expressly set forth herein (including, without limitation, as set forth in this Section 2(d)), NAI does not, expressly or impliedly, guaranty or warrant any results or level of sales or customer leads to Co-Host. NAI reserves the right to cease publication of the Originating Locations for brief periods from time to time for maintenance or other purposes; provided that the Originating Locations will comply with the same "Uptime Requirements" specified with respect to the "Managed Site" in the Web Site Services Agreement. + + (e) Marketing Promotions. During the Term, Co-Host and NAI will regularly discuss and implement mutually agreed upon jointly funded marketing promotions. NAI and Co-Host hereby agree that the marketing promotions set forth on Exhibit "D" hereto will be implemented as set forth on Exhibit "D". + + (f) Distribution of Physical Products. NAI grants to Co-Host the right to distribute physical copies of NAI's Goods to end users ordering from the Managed Site, the Destination or Beyond.com upon the terms set forth in Exhibit "E" attached hereto and made a part hereof. + +3. PAYMENT AND RECORDS. + + (a) Fees. Subject to the provisions of Section 6 hereof, Co-Host shall pay to NAI the amount designated in Part 3 of Exhibit "A" as the Co-Hosting Fee upon the schedule set forth in such Part. + + (b) Payment Terms. Except as set forth in such Part 3 of Exhibit "A", payments from Co-Host to NAI shall be due thirty (30) days from the date of invoice. All payments will be made in United States dollars, free of any taxes then currently applicable, at the address designated above by NAI. Late payments shall bear interest at the lesser of: (i) the maximum rate permitted by law, and (ii) the rate of 1.5% per month from the due date until paid. + +4. EQUITABLE RELIEF. Each party acknowledges that any breach of its obligations under this Agreement with respect to the proprietary rights or confidential information of the other party will cause the other party irreparable injury for which there are inadequate remedies at law, and therefore such other party will be entitled to equitable relief in addition to all other remedies provided by this Agreement or available at law. + +5. PROPRIETARY RIGHTS. NAI retains ownership of the NAI Internet Site, the Originating Locations, the trademarks and all intellectual property rights in connection with the NAI Internet Site, including without limitation, its URL designations and all rights from InterNIC in connection therewith. Co-Host and its licensors retain ownership of all intellectual property rights in the advertising materials provided, the trademarks and all intellectual property rights in connection with the Destination and the Co-Host Site, including, without limitation, its URL designations and all rights from InterNIC in connection therewith, and all of its other intellectual property rights. + + 5 6 + +6. TERM AND TERMINATION. + + (a) Term. This Agreement will commence on the Effective Date, and will terminate on the third anniversary of the Effective Date (the "Term"), unless earlier terminated as provided in this Agreement. + + + + + + (b) Termination. A party may terminate this Agreement immediately: (i) if the other party engages in any material unlawful business practice and such practice continues uncured thirty (30) days following written notice thereof, (ii) if the other party fails to perform any material obligation, (which shall include, without limitation, the payment obligations hereunder and compliance with the Uptime Requirements in respect of the Originating Locations) or violates any material restriction contained in this Agreement and such failure continues uncured thirty (30) days following written notice thereof, (iii) by such party if that certain Web Site Services Agreement between NAI and Co-Host dated of even date herewith (the "Web Site Services Agreement") or the ESD Agreement is terminated by the other party, (iv) if a receiver is appointed for the other party or its property, (v) if the other party makes an assignment for the benefit of creditors, (vi) if the other party becomes the subject of any proceeding under any bankruptcy, insolvency or debtor's relief law, (vii) upon ninety (90) days prior notice in writing by Co-Host at any time after June 30, 2000, if the term of the Web Site Services Agreement has not been renewed for an additional term of one (1) year or more pursuant to its terms or (viii) if the party terminates the Web Site Services Agreement by reason of the other party's material default thereunder. + + (c) Effect of Termination. Upon the effective date of the termination, all outstanding invoices and other invoicable amounts will become due and payable. Co-Host's contractual right to the marketing consideration shall cease immediately upon the effective date of the termination. Termination or expiration of this Agreement if by reason of material breach by Co-Host shall not affect any of Co-Host's payment obligations, all of which survive termination of this Agreement; provided that, in (i) the event of termination of this Agreement by Co-Host due to a material default by NAI, NAI shall pay to the Co-Host the Liquidated Damages Amount (as defined in Part 2 of Exhibit "A"). + +7. CONFIDENTIALITY. Confidential Information disclosed by either party in writing and marked as "confidential," proprietary" or the like (or disclosed verbally if a written summary is provided within thirty days), including any information relating to such party's research, development, proprietary technology, product and marketing plans, finances, personnel and business opportunities will be considered confidential information. Each party will not use the other party's confidential information except as required to achieve the objectives of this Agreement and will not disclose such confidential information except to employees, agents and contractors who have a need to know in the discharge of their duties under this Agreement. Such restrictions will not apply to information that becomes public knowledge other than through the disclosing party, is independently developed by the non-disclosing party, or is lawfully required to be disclosed by any governmental agency or otherwise required to be disclosed by law. + + 6 7 + + Neither party will make any disclosure of, or statement covering, the terms of this Agreement, including the financial terms, to any third parties (other than its attorneys, accountants and professional consultants), without obtaining the other's prior written consent, except as required by court order or applicable regulatory authorities, including without limitation, the rules and regulations of the Securities and Exchange Commission, any stock exchange and the NASDAQ. The parties agree that under their current understanding, disclosure of the financial terms of this Agreement is not required under the foregoing rules and regulations. The obligations of this Section 7 shall survive the termination of this Agreement, under any circumstances. The parties shall make a joint press release announcing the relationship, the timing and content of which shall be subject to the mutual agreement of the parties. + +8. RELATIONSHIP OF THE PARTIES. The parties are independent contractors and not partners, joint venturers or agents, and neither party may obligate the other to any warranty or other obligation. Neither NAI nor Co-Host is by virtue of this Agreement authorized as an agent or other representative of the other party. + +9. REPRESENTATIONS, WARRANTIES AND INDEMNIFICATION. + + (a) Co-Host represents and warrants to NAI that Co-Host has all right, title, ownership interest and/or marketing rights necessary to provide the advertising materials to NAI, to perform its obligations hereunder and to operate the Destination. Each party further represents and warrants to the other that it has not entered into any agreements or commitments which are inconsistent with or in conflict with the rights granted or obligations incurred by the representing party in this Agreement. Co-Host further represents and warrants that the advertising materials supplied hereunder do not infringe any Covered Country (hereinafter defined) copyright, trademark, or trade secret right. Covered Country shall mean the United States of America and any member state of the European Economic Union. Co-Host agrees that, if notified promptly in writing and given sole control of the defense and all related settlement negotiations, it will defend NAI, its employees, officers and agents, against any claim based on an allegation that (i) advertising materials supplied hereunder infringes a Covered Country patent, copyright, trademark or state trade secret right, or (ii) Co-Host violated any law, statute or ordinance or any governmental or administrative order, rule or regulation with regard + + + + + + to the advertising materials, the operation of the Destination or the manufacture, possession, distribution, use or sale of the Goods. Co-Host will pay any resulting costs, damages and attorneys' fees finally awarded by a court, or agreed to in settlement by Co-Host, with respect to any such claims. NAI agrees that, if the advertising materials become, or in Co-Host's opinion are likely to become, the subject of an infringement claim, NAI will permit Co-Host, at Co-Host's option and expense, to, among other things, procure the right for NAI to continue marketing and using the advertising materials, or to replace or modify them so that they become non-infringing. + + 7 8 + + (b) NAI represents and warrants that NAI has all right, title, ownership interest and/or marketing rights necessary to operate the Originating Locations, provide the Products to Co-Host, and the Products shall be free and clear of all liens and encumbrances. NAI further represents and warrants that it has not entered into any agreements or commitments which are inconsistent with or in conflict with the rights granted to Co-Host in this Agreement. NAI further represents and warrants that the Products supplied hereunder do not infringe any Covered Country patent, copyright, trademark, or trade secret right. NAI agrees that, if notified promptly in writing and given sole control of the defense and all related settlement negotiations, it will defend Co-Host, its employees, officers and agents against any claim based on an allegation that (i) a Product supplied hereunder infringes a Covered Country patent, copyright, trademark or trade secret right, or (ii) NAI violated any law, statute or ordinance or any governmental or administrative order, rule or regulation with regard to a Product or its manufacturer, possession, use or sale. NAI will pay any resulting costs, damages and attorneys' fees finally awarded by a court, or agreed to in settlement by NAI, with respect to any such claims to the extent of the compensation received under this Agreement. Co-Host agrees that, if the Products in the inventory of Co-Host, or the operation thereof, become, or in NAI's opinion are likely to become, the subject of an infringement claim, Co-Host will permit NAI, at NAI's option and expense, to, among other things, procure the right for Co-Host to continue marketing and using such Products, or to replace or modify them so that they become non-infringing. If neither of the foregoing alternatives is available on terms that NAI deems reasonable, Co-Host will return such Products on written request from NAI. NAI will grant Co-Host a credit equal to the price paid by Co-Host for such returned Products, as adjusted for discounts, returns and credits actually given, provided that such returned Products are in an undamaged condition. NAI will have no obligation to Co-Host with respect to infringement of patents, copyrights, trademarks or trade secrets or other proprietary rights beyond that stated in this Section 9(b). + + (c) No Combination Claims. Notwithstanding Section 9(b), NAI will not be liable to Co-Host for any claims to the extent they arise solely based upon the combination, operation or use of any Product with equipment, data or programming not supplied by NAI, or to the extent they arise solely based upon the alteration or modification of the Products by the Co-Host or the purchaser of such Products. + +10. LIMITATION OF LIABILITY. EXCEPT FOR CLAIMS UNDER SECTION 9 HEREOF, THE LIABILITY OF A PARTY TO THE OTHER FOR DIRECT DAMAGES SHALL NOT EXCEED FIFTEEN MILLION DOLLARS. EXCLUSIVE OF ANY CLAIMS BY THIRD PARTIES FOR INJURY OR DAMAGES TO PERSONS OR TANGIBLE PROPERTY DIRECTLY CAUSED BY ANY PRODUCT, NEITHER PARTY'S LIABILITY WITH REGARD TO THIS AGREEMENT OR THE ADVERTISING MATERIALS, IF ANY, WILL INCLUDE CONSEQUENTIAL, INCIDENTAL, SPECIAL OR OTHER INDIRECT DAMAGES, SUCH AS LOST PROFITS, EVEN IF + + 8 9 + + THE OTHER PARTY HAS KNOWLEDGE OF THE LIKELIHOOD OF SUCH DAMAGES. + +11. FORCE MAJEURE. Neither party shall be liable for the failure to perform any of its obligations under this Agreement, except for payment obligations, if such failure is caused by the occurrence of any event beyond the reasonable control of such party, including without limitation, fire, flood, strikes and other industrial disturbances, failure of raw materials suppliers, failure of transport, accidents, transmission difficulties, phone service interruptions, riots, insurrections, acts of God or orders of governmental agencies. + +12. GENERAL. + + (a) This Agreement, the Web Site Services Agreement and the certain ESD Agreement between the parties set forth the entire agreement between the parties on all subject matters and supercede all prior agreements and understandings between the parties. + + (b) This Agreement may not be changed, terminated or amended except in writing. Whenever the consent of any party is required hereunder, such consent may be given or withheld in such party's sole discretion and with or without reason or cause, unless this Agreement states otherwise. + + + + + + (c) The parties agree that the terms and conditions of this Agreement shall prevail over any contrary or additional terms in any purchase order (unless agreed to in writing by both parties), sales acknowledgment, confirmation or any other document issued by either party affecting the purchase and/or sale of Goods. The terms of the Exhibits to this Agreement shall be equal in importance to the terms of the body of this Agreement. + + (d) Either party's failure or delay in exercising any of its rights will not constitute a waiver of such rights unless expressly waived in writing. Neither party may assign this Agreement without the other's prior written approval, except by operation of law or in connection with the sale of substantially all of the assets of such party's business or the acquisition of such party by a third party. + + (e) This Agreement will be governed and interpreted according to the laws of the State of California, without reference to principles of conflicts of laws. Each party hereto expressly consents to the personal jurisdiction of the state and federal courts located in Santa Clara County, California, and expressly waives any defense to any action based on inconvenient forum, choice of venue, lack of personal jurisdiction, sufficiency of service of process or the like. + + (f) In the event of any litigation or arbitral proceeding between they parties regarding this Agreement, the advertising materials or the obligations of the parties hereunder, the party not prevailing therein shall pay the reasonable attorneys' fees and court costs of the party prevailing therein. + + 9 10 + + (g) If a court of law finds any provision of this Agreement unenforceable, the parties agree to modify such provision to the extent necessary to make it legal and enforceable while preserving its intent and the economic effect of the unenforceable provision. + + (h) Any notices and demands provided hereunder must be in writing and will be deemed given upon the earlier of actual receipt or two (2) days after being sent by overnight Federal Express or Express Mail, return receipt requested, to the appropriate address set forth above, as such contacts and addresses may be changed by written notice to the other party. + + 10 11 + + EXHIBIT "A" + + Additional Agreement Terms (with location of first reference in Agreement) + +1. Destination (Recitals) + + www.mol.com or any successor site, which shall be the page to which traffic is directed from the public NAI URLs. + + Co-Host Site www.beyond.com + +2. Certain Definitions + + 1. "Aggregate Revenue" in any year of the Term shall mean the revenue generated in such year by (i) the sale of Goods to customers entering the Co-Host Site through the Destination,and (ii) sales of Goods from the Managed Site (as defined in the Web Site Services Agreement). + + 2. "Liquidated Damages Amount" shall mean the difference between (i) the aggregate amount of the Co-Hosting Fee paid by Co-Host (the "Aggregate Fee") and (ii) the Aggregate Fee multiplied by a number the numerator of which shall be the actual Aggregate Revenue through the effective date of termination of the Agreement and the denominator of which shall be the aggregate of the Minimum Revenue Targets through the effective date of the termination. + + 3. McAfee Mall shall mean the same thing as the Managed Site under the Web Site Services Agreement. + + 4. Online Service Page shall mean the general reference page for the NAI Sites established under the URL www.mol.com or any successor URL. + + 5. "Minimum Revenue Targets" shall mean: (i) in the first (1st) year of the Term, Aggregate Revenues of not less than Nine Million Dollars ($9,000,000) and (ii) in the second (2nd) year of the Term, Aggregate Revenues of not less than Twelve Million Dollars ($12,000,000). + +3. Co-Hosting Fee (Section 2(a)) Co-Host shall pay to NAI a "Co-Hosting Fee" in the following amounts: + + (a) A non-refundable initial payment of Two Million Five Hundred Thousand Dollars ($2,500,000) payable as follows: $2,000,000 on or before + + + + + + September 30, 1998, and the balance within sixty (60) days of the execution of this Agreement. + + 11 12 + + (b) Quarterly payments of $312,500 each, with the first payment being due September 15, 1999, and on each December 15, March 15, June 15, and September 15 thereafter during the Term unless (i) the Agreement is terminated in accordance with Section 6 of the Agreement prior to such date in which case no quarterly payments will be due following the effective date of such termination or (ii) if the Minimum Revenue Target (as defined in Part 2 of this Exhibit "A") for the first year of the Term is not achieved by the first anniversary of the Effective Date, in which case no quarterly payments are payable until such time as the Minimum Revenue Target for the first year of the Term is achieved at which point Co-Host will resume making future quarterly payments on the schedule and in the amount set forth above for the duration of the Term or (iii) if the aggregate Minimum Revenue Targets (as defined in Part 2 of this Exhibit "A") for the first and second year of the Term are not achieved by the second anniversary of the Effective Date, then, even if the Minimum Revenue Target (as defined in Part 2 of this Exhibit "A") for the first year of the Term has been achieved prior to such second Anniversary, no quarterly payments are payable during the second year of the Term until such time as such aggregate Minimum Revenue Target is achieved at which point Co-Host will resume making future quarterly payments on the schedule and in the amount set forth above for the duration of the Term. The parties hereby agree to renegotiate in good faith a downward adjustment to the foregoing quarterly payments in the event that the Minimum Revenue Target for year one (1) is not achieved in the first year of this Agreement. + + 12 13 + + EXHIBIT "B" + + SPECIFICATIONS FOR HOT LINK FROM THE ONLINE SERVICE PAGE OF ANY ORIGINATING LOCATION + +The hot link to the Co-Host site shall be no less prominent (whether is size, location or format) than any hot link to the McAfee Mall from the Online Service Page. In addition, in the event that any hot links to the McAfee Mall are located on any web page on the Originating Locations other than on the Online Service Page, then a hot link to the Co-Host Site shall all be located on such web page and shall be no less prominent (whether is size, location or format) than any hot link to the McAfee Mall. Notwithstanding the foregoing, the hot links to the Co-Host Site referred to above shall be no less prominent (whether in size, location or format) than any third party hot link on the Online Service Page or the Originating Locations. + + 13 14 + + EXHIBIT "C" + + COMPETITORS OF NAI + +PART 1 + +Computer Associates International, Inc. Symantec Corporation Check Point Software Internet Security Systems, Inc. Cisco Systems (only with respect to firewall products) Security Dynamics + + COMPETITORS OF CO-HOST + +PART 2 + +Microwarehouse CompUSA Insight PC Connection + + + + + +Best Buy Circuit City Cyberian Outpost Digital River Egghead.com Programmers Paradise Office Max Online Software Store Office Depot Online Software Store Staples Online Software Store WalMart Online Software Store BuyDirect.com Barnes & Noble Online Software Store Amazon.com Software Store Dell Computer Online Software Store Gateway 2000 Online Software Store Software Street Techwave and related companies CDW Online Store + +THE PARTIES AGREE TO ACT IN GOOD FAITH IN MODIFYING THE ABOVE LIST OF COMPETITORS. + + 14 15 + + EXHIBIT "D" + + Joint Marketing Programs + + PROGRAM: FUNDING: + +1. NAI will make five e-mail promotions during the fourth quarter of 1998 for NAI products which will contain links to the Online Service Page. + +2. NAI will make available up to 500,000 impressions on the NAI Internet Sites and ten percent (10%) of the impressions available on NAI's Upgrade/Update site for advertising materials to promote Beyond.com. + + 1 16 + + EXHIBIT "E" + + DISTRIBUTION ADDENDUM + + WHEREAS, NAI owns and/or markets certain computer software and hardware products set forth on Exhibit "A" ("Products"). + + WHEREAS, Co-Host is an independent reseller of computer products to end users ordering products through web sites on the Internet operated by Co-Host. + + WHEREAS, Co-Host distributes electronic copies of the Products pursuant to the ESD Agreement. + + WHEREAS, Co-Host desires to distribute the Products and NAI desires to make the Products available to Co-Host for further distribution. + + THEREFORE, in consideration of the foregoing, and of the mutual covenants and agreements hereinafter set forth, NAI and Co-Host enter into the following additional agreements regarding the Products: + +1. APPOINTMENT. NAI appoints Co-Host as a non-exclusive distributor of the Products to end users ordering the Products from the Destination or the Co-Host Site, and Co-Host accepts this appointment. Co-Host shall distribute the Products, as an independent reseller, at its own risk and expense and subject to any such prices, contractual terms and conditions as Co-Host may from time to time determine. Nothing in this Agreement shall prohibit Co-Host from distributing competing products in the Territory. The "Territory" as that term is used herein shall mean all countries in the world except countries to which export or re-export of any Product, or the direct products of any Product is prohibited by United States law without first obtaining the permission of the United States Office of Export Administration or its successor. Co-Host shall not have the right to assign or otherwise transfer this Agreement or any rights herein granted to any other person or entity, except by operation of law or in connection with the sale of all of its assets, or the acquisition of the Co-Host by a third party. Any such attempted assignment shall be void and the Agreement shall remain in effect. + +2. DISTRIBUTION. Co-Host has the right to market and distribute the Products subject to the license agreement that accompanies such Product. Co-Host may + + + + + + not engage in the rental of any of the Products. Co-Host shall not in any event remove from or obscure upon any Products any labels placed thereon by NAI containing statements of restrictions upon distribution, without the prior written consent of NAI. NAI reserves the right in its sole discretion and without liability to Co-Host to add additional Products, change the prices for the Products pursuant to Section 5, modify the Products, change the level of NAI's support for the Products and discontinue the availability of any Product. Any addition or deletion from the list of Products will be indicated by NAI's revision to the NAI price list, and NAI will use reasonable efforts to provide Co-Host with thirty (30) days notice prior to the effective date of such changes indicated on the NAI price list. + + 2 17 + +3. MARKETING. + + (a) General. Co-Host will use commercially reasonable efforts to market the Products it orders to the best of its ability, and to that end will (i) conduct marketing activities authorized by NAI, (ii) support special promotions initiated by NAI, and (iii) maintain a sound financial condition. Co-Host will conduct its business in a manner that reflects favorably upon the Products and NAI. + + (b) Advertising; Use of Trademarks. Co-Host may advertise and promote the Products in a commercially reasonable manner and, subject to the provisions of Section 5 of the Co-Hosting Agreement, may use trademarks, service marks and trade names provided by NAI in connection therewith, provided that all such promotions and advertising will be consistent with NAI's general quality standards and the provisions of Section 5 of the Co-Hosting Agreement. Unless otherwise agreed upon in writing by NAI, Co-Host will submit each advertisement and promotion to NAI for trademark review and approval prior to initial release, which approval will not be unreasonably delayed or withheld. All such usage which was not expressly approved by NAI must be terminated immediately upon receipt of notice from NAI to that effect. + + (c) Trademarks Rights. NAI owns any and all trademarks, trade names, and service marks for the Products (as noted in Section 5 of the Co-Hosting Agreement). Such trademarks, trade names, and service marks shall include all product names, the names "Network Associates," logos, designs, and other designations or brands used by NAI in connection with the Products. Co-Host acknowledges and agrees that NAI is not granting to Co-Host any rights in any Product trademark, trade name, or service mark in or outside of the Territory. + +4. INSPECTIONS, RECORDS AND REPORTING. + + (a) Sales Out Reports. Co-Host will provide to NAI within ten (10) days after the end of each calendar month, a computer media data file in the format established by NAI showing, for such month, Co-Host's total sales, by customer and by Product from each location. If requested by NAI, Co-Host shall provide such reports with respect to weekly periods or bi-weekly periods prior to the end of the calendar month in which such period occurs. + + (b) Inventory Level Reports. Co-Host will provide to NAI on Monday of each week, a computer media data file in the format established by NAI showing Co-Host's current inventory levels of each Product (including items in transit), and weekly runrate snapshots and the other information reasonably requested by NAI. + + (c) Records. For three (3) years after each calendar quarter during the term of this Agreement, Co-Host will keep, at Co-Host's office, full and accurate books of account and copies of all documents and other materials for such quarter relating to this Agreement and Co-Host's records, accounts and contracts relating to the distribution of the Products. + + 3 18 + + (d) Audit. NAI may inspect the records described in Sections 4(c) upon demand from time to time. In addition, Co-Host agrees to allow NAI's independent auditors to audit and analyze appropriate accounting records of Co-Host from time to time (but not more than one every six (6) months) to ensure compliance with all terms of this Agreement. Any such audit shall be permitted by Co-Host within fifteen (15) days of Co-Host's receipt of NAI's written request to audit, during normal business hours. The cost of such an audit will be borne by NAI unless a material discrepancy indicating inadequate record keeping or that additional fees due to NAI are discovered, in which case the cost of the audit shall be borne by Co-Host. A discrepancy shall be deemed material if it involves payment or adjustment of more than five percent of the amount reported in favor of NAI. Audits and inspections shall not interfere unreasonably with Co-Host's business activities.] + +5. ORDERING AND PAYMENT. + + (a) NAI's Acceptance. Any order for delivery of physical product placed + + + + + + with NAI is subject to acceptance by NAI within ten (10) days following receipt by NAI. NAI may decline any order, in whole or in part, and unless NAI accepts an order in writing, the order is considered accepted only to the extent it is fulfilled.] The terms and conditions of this Agreement and of the applicable NAI invoice or confirmation will apply to each order accepted or shipped by NAI. Electronic confirmation from an authorized NAI email address shall have the same effect as a signed written confirmation. The provisions of Co-Host's form of purchase order or other business forms will not apply to any order notwithstanding NAI's acknowledgment or acceptance of such order. + + (b) Price to Co-Host. NAI will inform Co-Host as to its current suggested retail price of the Products and standard discount or pricing granted to NAI's traditional product distributors. During the term of this Agreement, Co-Host will be invoiced on the basis of the discounts set forth on Exhibit "A" of this Distribution Addendum. Discounts off suggested retail price (SRP) for standard NAI Products shall exclude tradeups, upgrade SKUs and special promotions, unless otherwise indicated. NAI may change its SRP from time to time upon written notice to Co-Host, which may take the form of a revised price list, and NAI may notify Co-Host of a different discount from SRP in the event NAI offers special promotional SRPs or Product prices in NAI's discretion. + + (c) Price Increase. If NAI increases its suggested retail price for any Product (a product upgrade with a different part number will not be the same Product) and there is a resulting increase in the price of Products to Co-Host, NAI will give Co-Host thirty (30) days advance notice of the effective date of any such increase and: + + (i) NAI will honor the old price for any shipments of such Product already in transit to Co-Host; + + 4 19 + + (ii) All additional orders following such thirty (30) day period will be shipped at the new price; + + (iii) NAI has orders for such Product from Co-Host already booked into NAI's order entry system at the time of such price increase or if Co-Host orders additional Products during such thirty (30) day period, then the price increase will not apply to that portion of such orders which call for shipments of not more than the monthly average quantity of such Products shipped to Co-Host in the three month period preceding the date of the increase; and + + (iv) Orders for such Product in NAI's order entry system in excess of the quantity specified in (iii) above will be shipped at the new price unless they are canceled by Co-Host by written notice to NAI, provided that such notice is received by NAI no later than fifteen (15) days prior to the date of shipment specified in such order. + + (d) Price Decrease. If NAI decreases its suggested retail price for any Product (a product upgrade with a different part number will not be the same Product), the decrease will apply to all units of such Product in Co-Host's inventory and orders in transit to Co-Host from NAI that are in an unopened, salable condition as of the effective date of the decrease, provided that such Products had been shipped to Co-Host no more than ninety (90) days prior to such effective date. To be eligible for such price protection, Co-Host must deliver to NAI written evidence, signed by Co-Host, of an inventory of such Products showing the number and location of each unit of Product for which Co-Host claims price protection eligibility hereunder within thirty (30) days of receiving notice of such price decreases. Such reduction will constitute a credit on Co-Host's account for future orders from NAI under this Agreement (unless the Agreement has terminated or expired in which case such reduction will be refunded to the extent that Co-Host does not owe NAI money) in an amount equal to the difference between the net invoice price at which each such unit in inventory was provided to Co-Host and the current price then applicable for shipments of such Product to Co-Host hereunder. + + (e) TAXES. + + (i) All amounts payable by Co-Host to NAI under this Agreement are exclusive of any tax, withholding tax, levy, or similar governmental charge that may be assessed by any jurisdiction in or outside the Territory except income and similar taxes levied on and payable by NAI. Such taxes, withholding taxes, levies, and governmental charges (collectively "Taxes") include Taxes based on sales, use, excise, import or export values/fees, value-added, income, revenue, net worth, or may be the result of the delivery, possession, or use of the Products, the execution or performance of this Agreement or otherwise. Should any Taxes be due, Co-Host agrees to pay such Taxes and indemnify NAI for any claim for + + 5 20 + + + + + + such Taxes demanded. Co-Host shall make no deduction from any amounts owed to NAI for any Taxes. Co-Host covenants to NAI that all Products distributed hereunder will be in the ordinary course of Co-Host's business, and Co-Host agrees to provide NAI with appropriate information and/or documentation satisfactory to the applicable taxing authorities to substantiate any claim of exemption from any Taxes. + + (ii) For all Taxes paid by Co-Host, Co-Host shall provide to NAI within forty-five (45) days after the end of any quarter, a certificate of tax payment documenting the payment and amount of the Taxes paid during the preceding quarter. + +6. SHIPMENT, RISK OF LOSS AND DELIVERY. + + (a) Shipment. All the physical Products will be shipped by NAI, F.C.A. (Incoterms 1990) place of shipment. Co-Host is responsible for paying all freight charges, transportation expenses, insurance charges, all applicable taxes, duties, import and export fees and similar charges associated with the delivery of the Products to Co-Host. All shipments will be made using either any carrier approved by both Co-Host and NAI. Co-Host will not without NAI's prior written consent, submit any order calling for the shipment of a Product to more than a single redistribution site. + + (b) Risk of Loss. All risk of loss of or damage to the Products will pass to Co-Host upon delivery by NAI to the common carrier. Co-Host will bear the risk of loss or damage in transit. + + (c) Partial Delivery. Unless Co-Host clearly advises NAI to the contrary in writing NAI, may make partial shipments on account of Co-Host's orders which shall, to be separately invoiced and paid for when due. + +7. RETURNS. + + (a) Returned Merchandise Authorization. Notwithstanding anything to the contrary herein contained, NAI will not issue credit to nor be obligated to accept returns for any reason for any physical Products unless NAI shall have previously issued a written Return Merchandise Authorization ("RMA"). The preceding sentence governs whether or not NAI is obligated to issue an RMA under this Agreement or applicable law. RMAs must be in writing, signed by NAI and only authorize the return of Products in good resalable conditions unless expressly provided otherwise herein. If damaged goods are received pursuant to an RMA, no credit shall be given by NAI with respect to such damaged goods unless the RMA indicates otherwise. Co-Host shall be responsible for all freight charges for goods returned pursuant to an RMA, unless otherwise indicated herein or in the RMA. + + (b) Customer Returns and Bad Box. Subject to Section 7 (a), Co-Host may, during the term of this Agreement, obtain a credit against current or future invoices from + + 6 21 + + NAI, for Products which have been returned by end users as defective, or pursuant to the warranty stated in NAI's end user license. Such credit will be in an amount equal to the original invoice price less any discounts or other credits previously received. Co-Host shall also have the ability to return for credit Products which have boxes that are or become damaged, unless such damage was caused by Co-Host. An offsetting purchase order must be placed for all bad box returns. In the event of claims by end users of incomplete Product, NAI, at its discretion, may supply to Co-Host, at no charge, any and all missing materials which are supposed to be provided with the current release of such Products or replace the entire Products in such situation. + + (c) Discontinued Products. Co-Host may, during the term of this Agreement, obtain a credit for the price paid by Co-Host to be applied against current or future invoices, for all versions of Products shipped by NAI within the previous ninety (90) days that NAI discontinues or which are removed from NAI's current retail price list. Such credit will be equal to the price paid by Co-Host for such obsolete Products, less discounts received under Section 5 of this Agreements. All such discontinued Products will be counted and inspected at the Inspection Site by NAI's employee, and upon NAI's acceptance thereof (which will be a condition of Co-Host's eligibility for a credit hereunder) such Products will be promptly and completely destroyed or, if requested by NAI, such Products or any portion thereof will be returned to NAI as it directs. No Product shall be deemed discontinued if a later version of the Product is still being offered by NAI and end users may obtain the current version of such Product from NAI electronically at no additional charge. + + (d) Freight. Co-Host will pay all costs (including freight) associated with the return of the Products to NAI and back to Co-Host as provided herein, except that NAI will be responsible for all freight costs associated with (i) the return of Products under Section 7(b), (ii) the return of any discontinued or obsolete Products under Section 7(c), and (iii) the return of other Product updates agreed upon by NAI and Co-Host. + +8. GENERAL. + + + + + + (a) Co-Host agrees that it will not, directly or indirectly, export or transmit the Product and technical data (or any part thereof) or any process or service that is the direct product of the software and documentation, to any group S or Z country specified in Supplement No. 1 of Section 770 of the Export Administration Regulations or to any other country to which such export or transmission is restricted by such regulation or statute, without the prior written consent, if required, of the Office of Export Administration of the U.S. Department of Commerce, or such other governmental entity as may have jurisdiction over such export or transmission. + + 7 22 + + (b) Co-Host acknowledges that some NAI Products hereto contain encryption and some are export restricted (the "Restricted Software") by the U.S. Department of Commerce's Bureau of Export Administration (BXA). Co-Host further acknowledges that for this reason, the export of such items may subject the Co-Host or its executives to fines and/or other severe penalties. Unless all required permits and/or approvals have been obtained, Co-Host shall not export or re-export the Restricted Software outside of the United States, whether directly or indirectly, and will not cause, approve or otherwise facilitate others such as agents, subsequent purchasers, licensees or any other third parties in doing so. The parties agree to cooperate with each other with respect to any application for any required licenses and approvals. However, Co-Host acknowledges it is their ultimate responsibility to comply with all export laws with respect to the Restricted Software and that NAI has no further responsibility after the initial sale to the Co-Host within the United States. + + 8 23 + + EXHIBIT "A" TO EXHIBIT "E" + +1. PRODUCTS COVERED (RECITALS). Product(s) provided to Co-Host shall be all NAI Goods as that term is defined in Section 1 (c) of the Agreement and no other products. + +2. PRICES AND DISCOUNTS (SECTION 5(a)). + +The standard discount or pricing granted to NAI's traditional Product distributors increased by four percentage points. \ No newline at end of file diff --git a/full_contract_txt/BICYCLETHERAPEUTICSPLC_03_10_2020-EX-10.11-SERVICE AGREEMENT.txt b/full_contract_txt/BICYCLETHERAPEUTICSPLC_03_10_2020-EX-10.11-SERVICE AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..59c6a79e96ae5e1e06dd199232864cf42a4965f4 --- /dev/null +++ b/full_contract_txt/BICYCLETHERAPEUTICSPLC_03_10_2020-EX-10.11-SERVICE AGREEMENT.txt @@ -0,0 +1,557 @@ +Exhibit 10.11 + +DATED 26 September 2019 + +BicycleTX Ltd + +and + +Nigel Crockett + +___________________________________________________ + +SERVICE AGREEMENT + +___________________________________________________ + + + + + +THIS AGREEMENT is made on 26 September 2019 + +BETWEEN: + +(1) BICYCLETX LIMITED a company incorporated under the laws of England and Wales (Company Number 11036101) whose registered office is at Building 900 Babraham Research Campus, Babraham, Cambridgeshire, CB22 3AT, United Kingdom (the "Company"); and + +(2) NIGEL CROCKETT of (the ''Employee"). + +IT IS AGREED as follows: + +1. COMMENCEMENT OF EMPLOYMENT + +1.1 This Agreement shall take effect 26 September 2019 (the "Effective Date"). + +1.2 Your employment shall commence on 26 September 2019 and shall continue unless and until either party gives notice to the other in accordance with paragraph 11 below. No employment with a previous employer is deemed to be continuous with your employment with the Company. + +1.3 You warrant that by entering into this Agreement or any other arrangements with the Company you will not be in breach of or subject to any express or implied terms of any contract with, or other obligation to, any third party binding on you, including, without limitation, any notice period or the provisions of any restrictive covenants or confidentiality obligations arising out of any employment with any other employer or former employer. + +1.4 You warrant that you have the right to work in the United Kingdom and you agree to provide to the Company copies of all relevant documents in this respect at the request of the Company. If at any time during the course of this Agreement you cease to have the right to work in the United Kingdom the Company may immediately terminate your employment without payment of compensation. + +2. JOB TITLE + +2.1 You shall serve as Chief Business Officer ("CBO") reporting to the CEO. The nature of the Company's business may result in changes occurring to the content of your role from time to time. You may also be required to carry out such additional or alternative tasks as may from time to time be reasonably required of you consistent with your executive level and job title, provided that these do not fundamentally change or undermine your position. + +2.2 You shall faithfully and diligently perform such duties as you are required to undertake from time to time and exclusively devote the whole of your working time, skills, ability and attention to the business of the Company and use your best endeavours to promote the interests and reputation of the Company and (where applicable) any Group Company. + +2.3 The Company may require you to carry out work for, or become a director or officer of, any Group Company at any time. + +3. PLACE OF WORK + +The Company's offices at Building 900, Babraham Research Campus, Babraham, Cambridge, + +1 + +th + +th + + + + + +UK or such other location as the Company may reasonably determine. The CBO position may require extensive international travel on business. + +4. REMUNERATION + +4.1 Your salary will be USD370,000 per annum paid monthly in arrears on or about the last working day of each month (less statutory and voluntary deductions) ("Salary"). Salary will be converted to GBP and paid in GBP based on the USD/GBP Bank of England daily spot exchange rate applicable on the date of this Agreement, with the exchange rate being revised according to the prevailing Bank of England daily spot exchange rate applicable on 1 January of each year. Your Salary will be reviewed annually in accordance with the Company's practices from time to time (which is expected to be by the end of the first quarter of each year). You will be notified in writing of any changes to your Salary or benefits. + +4.2 You agree that the Company may deduct from the Salary or any other sum due to you (including any pay in lieu of notice) any amounts due to the Company including, without limitation, any overpayment of salary, loan or advance. + +4.3 For the purposes of this Agreement your earned salary shall mean the proportion of your Salary earned by and due to you in each calendar year of employment with the Company ("Earned Salary"). + +4.4 Annual Performance Bonuses: + +You will be eligible to participate in the Company's discretionary annual performance related bonus scheme to a maximum value of 35% of your Earned Salary in relation to your performance against agreed annual corporate and personal performance objectives as set out below (the "Annual Performance Bonus"). That is, if the compensation committee (the "Compensation Committee") of the board of directors (the "Board") of the Company's parent company, Bicycle Therapeutics plc ("BTL") determines that you have completed all such corporate and personal objectives to its satisfaction in a given year, your bonus would be 35% of your Earned Salary in that year, excluding any other bonuses in this offer. Such bonus may be payable in cash or, in whole or in part, in share options in BTL, as agreed by you and the Compensation Committee following notification by you of your preference at least 90 days prior to the normal payment date (and in the case of share options with the appropriate HMRC valuation process (if required by the Compensation Committee) and Board approval so as to be compliant with BTL's share option plan rules), with due consideration for the operational requirements of the Company at that time in your role as CBO. + +Any Annual Performance Bonus paid will not be pensionable and are subject to statutory applicable tax and National Insurance deductions. Performance will be assessed by the Compensation Committee at the end of each calendar year, against annual corporate and personal performance objectives agreed between you and the Board at the start of each calendar year, with any such bonus being payable in the first quarter of the following year. Qualification for your Annual Performance Bonus will require that you are employed by the Company (and have not served notice of termination of your employment to the Company) on 31 December of the year to which your bonus entitlement applies. + +2 + + + + + +4.5 Equity Incentives + +BTL has established the Bicycle Therapeutics 2019 Share Option Plan (the "Option Plan"). + +On or as soon as practicable following the Effective Date, it is intended that you will be granted an option under the Option Plan to acquire 107,417 ordinary shares in the capital of BTL ("Shares") (representing approximately 0.6% of the Company's issued share capital as at the Effective Date). + +In addition, and conditional on completion of a transaction on terms set out below, you will be granted a second option under the Option Plan, such option being one of: + +(a) an option to acquire 44,757 Shares (representing approximately 0.25% of the Company's issued share capital as at the Effective Date) granted as soon as practicable following the completion of a transaction approved by the Board on terms which include an upfront payment of at least USD30,000,000 and per product downstream milestone payments of at least USD300,000,000; or + +(b) an option to acquire 22,378 Shares (representing approximately 0.125% of the Company's issued share capital as at the Effective Date) granted as soon as practicable following the completion of a transaction approved by the Board on terms which include an upfront payment of USD24,000,000 and per product downstream milestone payments of USD240,000,000; or + +(c) an option to acquire such number of Shares (falling between 0.125% and 0.25% of the Company's issued share capital as at the Effective Date as the Board shall determine in its absolute discretion) granted as soon as practicable following completion of a transaction approved by the Board on terms which include an upfront payment greater than USD24,000,000 but less than USD 30,000,000, and per product downstream milestone payments greater than USD240,000,000 but less than USD 300,000,000. + +Any options granted under this paragraph 4.5 shall be subject to (i) the approval of the Board and/or the Compensation Committee; (ii) the rules of the Option Plan (as amended from time to time); and (iii) the terms of the option grant documentation which will be provided to you following such grant. + +5 BENEFITS + +5.1 The Company currently operates a personal pension plan provided by Scottish Widows Group. The Company will pay a sum equivalent to 12 % of your basic annual earned salary into a personal pension plan selected by the Company. You may make additional contributions if you wish, but this is not mandatory. In the event that you elect, of your own volition, to opt-out of the Company's pension scheme then the Company will pay you in equal monthly instalments in arrears (less statutory deductions) a sum equivalent to the contribution that it would have made into your pension scheme (the "Cash Equivalent Payment") less the Employer's National Insurance Contribution cost incurred by the Company as a result of making the Cash Equivalent Payment. + +5.2 The Company currently operates a private healthcare scheme and subject to acceptance by the insurer on reasonable terms, you will be entitled to join. + +3 + + + + + +5.3 The Company operates a death in service scheme which you automatically join upon commencement of employment. + +5.4 Further details regarding benefits will be provided upon commencement of your employment. The Company reserves the right to replace or supplement any or all of the scheme(s) referred to in this paragraph 5, or to amend them at any time without compensation, provided that equivalent scheme(s) providing a similar level of benefit are put in place. + +6 EXPENSES + +The Company shall reimburse all reasonable out of pocket expenses properly incurred by you in the performance of the duties under this Agreement including travelling, subsistence and entertainment expenses provided you follow the Company's guidelines/allowances in force at the relevant time and provided that you shall, where reasonably practicable, provide the Company with vouchers, invoices or such other evidence of such expenses as the Company may reasonably require. + +7 HOURS OF WORK + +7.1 Your normal working hours are Monday to Friday from 9.00 am to 5.30 pm on each working day with one hour for lunch. You will be required to work such other hours as shall be reasonably necessary for you to perform your duties for which no further remuneration is payable. + +7.2 By entering into this Agreement you confirm, that in your capacity as Chief Business Officer you may choose or determine the duration of your working time and the working time limits set out in part II of the Working Time Regulations 1998 do not apply to you. + +8 HOLIDAYS + +8.1 In addition to the usual public holidays you will be entitled to 25 working days paid holiday in each calendar year. The holiday will accrue on a pro rata basis throughout each calendar year. + +8.2 Holidays may only be taken at such time or times as are approved beforehand by the CEO, such approval not to be unreasonably withheld or delayed. You must give reasonable notice of proposed holiday dates by e-mailing the CEO or delegated director in advance, for approval. + +8.3 The holiday year runs from January to December. With the agreement of the CEO, you may carry forward up to 5 days of untaken holiday into the next holiday year. Any carried over holiday must be taken by the end of March of the following calendar year or will be forfeited and no payment will be made in respect of any days so forfeited. You will not generally be permitted to take more than 10 days holiday at any one time. + +8.4 Upon termination of your employment you will receive pay in lieu of accrued but untaken holiday. The Company may deduct an appropriate sum in respect of days taken in excess of your pro rata entitlement from your final remuneration on the basis that one day's holiday will be calculated as 1/260ths of your basic annual salary. + +8.5 In the event that notice of termination of this Agreement is served by either party, the Company may require you to take any outstanding holiday during this notice period. + +4 + + + + + +9 SICKNESS AND OTHER ABSENCE + +9.1 If you are unable to attend at work by reason of sickness or injury or any unauthorised reason you must inform the Company as soon as possible on the first day of absence (and in any event not later than 11.00 am on the first day of absence) and, in the case of absence of uncertain duration, you must keep the Company regularly informed of your continued absence and your likely date of return. You are expected to observe this rule very strictly since failure to do so will entitle the Company to stop payment in respect of each day you fail to notify the Company. + +9.2 If your absence, due to sickness or injury, is for less than seven (7) days, on your return to work you are required to immediately complete a self-certification form available from the Company. If your absence continues for more than seven (7) consecutive days (whether or not working days) you must provide the Company with a doctor's certificate from the seventh consecutive day of sickness or injury. This doctor's certificate must be provided to the Company promptly following the seventh consecutive day of absence. If illness continues after the expiry of the first certificate, further certificates must be provided promptly to cover the whole period of absence. + +9.3 Subject to your compliance with the Company's sickness absence procedures (as amended from time to time), the Company may in its sole and absolute discretion pay full salary and contractual benefits during any period of absence due to sickness or injury for up to an aggregate of 3 months in any fifty-two (52) week period (whether such absence is continuous or intermittent in any calendar year). Such payment shall be inclusive of any statutory sick pay due in accordance with applicable legislation in force at the time of absence. The Company may, in its sole and absolute discretion, extend the period of allowance in an individual case if the circumstances so justify. Thereafter, the Company shall pay statutory sick pay or equivalent benefit to which you may be entitled subject to your compliance with the appropriate rules. + +9.4 Whether absent from work or not, you may be, but only on reasonable grounds, required to undergo a medical examination by a Company doctor and your consent will be sought for a report to be sent to the Company. + +9.5 The payment of sick pay in accordance with this paragraph 9 is without prejudice to the Company's right to terminate this Agreement prior to the expiry of your right to payments. + +9.6 In the event you are incapable of performing your duties by reason of injuries sustained wholly or partly as a result of a third party's actions all payments made to you by the Company as salary or sick pay shall to the extent that compensation is recoverable from that third party constitute loans to you and shall be due and owing when and to the extent that you recover compensation for loss of earnings from the third party. + +10 GARDEN LEAVE + +10.1 After notice of termination has been given by you or the Company, the Company may at its discretion require you, for all or part of your notice period, to comply with any or all of the following instructions: + +(a) not to carry out any further work for the Company or for any Group Company; + +(b) to remain away from the Company's business premises and those of any Group + +5 + + + + + +Company (unless given written permission to do otherwise); + +(c) not to contact any of the Company's clients, suppliers or employees or those of any Group Company without the Company's prior written permission; + +(d) to carry out only part of your duties, or to carry out alternative duties or special projects for the Company within your skill set; + +(e) to co-operate in the handover of your duties and responsibilities; + +(f) to resign from any offices (including as a director) you hold within the Company or any Group Company or by virtue of your employment with us; + +(g) to answer, in an honest and helpful way, such questions as the Company may reasonably ask of you; + +(h) to keep the Company informed of your whereabouts and contact details and to remain reasonably contactable and available for work. + +10.2 During any such period as described in paragraph 10.1 ("Garden Leave") the Company may appoint another person to carry out some or all of your duties. You will continue to owe all other duties and obligations (whether express or implied including fidelity and good faith) during Garden Leave and you shall continue to receive full pay and benefits (except that you will not accrue any further entitlement to any cash or equity incentive awards or bonus payments in respect of the Garden Leave period). + +10.3 By placing you on Garden Leave, the Company will not be in breach of this Agreement or any implied duty of any kind whatsoever nor will you have any claim against the Company in respect of any such action. + +10.4 During any period of Garden Leave you will remain readily contactable and available for work save when on paid holiday taken in accordance with paragraph 8. In the event that you are not available for work having been requested by the Company to do so, you will, notwithstanding any other provision of this Agreement, forfeit any right to salary and contractual benefits. + +10.5 During any period of Garden Leave the Company may require you to deliver up any Confidential Information or property of the Company or any Group Company and upon instruction, delete any emails, spreadsheets or other Confidential Information and you will confirm your compliance with this paragraph 10.5 in writing if requested to do so by the Company. + +10.6 During any period of Garden Leave the Company may require you to take any outstanding holiday entitlement. + +11 NOTICE + +11.1 Without prejudice to the Company's right to summarily terminate your employment in accordance with paragraph 11.3 below and your right to summarily terminate your employment for Good Reason in accordance with paragraph 11.4 below, either you or the Company may terminate your employment by giving to the other not less than six months' notice in writing. + +11.2 The Company reserves the right in its sole and absolute discretion to give written notice to + +6 + + + + + +terminate your employment forthwith and to make a payment to you in lieu of salary and the benefits set out in paragraph 5 of this Agreement for all or any unexpired part of the notice period. For the avoidance of doubt, any payment in lieu made pursuant to this paragraph 11.2 will not include any element in relation to any payment in respect of (i) any Annual Performance Bonus or (ii) any holiday entitlement that would have otherwise accrued during the period for which the payment in lieu is made. For the further avoidance of doubt, if the Company elects to make a Payment in Lieu after notice of termination has been given by you, this will not constitute a termination by the Company without Cause for the purposes of paragraphs 11.7 and 11.8 below. + +11.3 The Company may summarily terminate your employment hereunder (without notice) for Cause. For purposes of this Agreement, "Cause" shall mean where you: + +(a) commit gross misconduct which includes, but is not limited to, dishonesty, fraud, theft, being under the influence of alcohol or drugs at work, causing actual or threatening physical harm and causing damage to Company property; + +(b) commit a material breach or non-observance of your duties or any of the provisions of this Agreement, or materially fail to observe the lawful directions of the Company, or breach any material Company policy or code of conduct, including but not limited to the Company's policy from time to time on matters relating to harassment; + +(c) are convicted of a criminal offence (other than an offence under the road traffic legislation in the United Kingdom or elsewhere for which a non-custodial sentence is imposed); + +(d) act in a manner which in the reasonable opinion of the Company, brings the Company into disrepute or otherwise prejudices or is in the reasonable opinion of the Company considered likely to prejudice the reputation of the Company; + +(e) in the reasonable opinion of the Company, are guilty of any serious negligence in connection with or affecting the business or affairs of the Company; + +(f) are unfit to carry out the duties hereunder because of sickness, injury or otherwise for an aggregate period of 26 weeks in any fifty-two (52) week period even if, as a result of such termination, you would or might forfeit any entitlement to benefit from sick pay under paragraph 9.3 above. + +Any delay or forbearance by the Company in exercising any right of termination in accordance with this paragraph 11.3 will not constitute a waiver of such right. + +11.4 You may summarily terminate your employment hereunder at any time (without notice) for Good Reason after complying with the Good Reason Process. For purposes of this Agreement, "Good Reason" shall mean that you have complied with the "Good Reason Process" (hereinafter defined) following the occurrence of any of the following events: (i) a material diminution in your responsibilities, authority or duties; (ii) a material diminution in your Salary; (iii) a material change in the geographic location at which you provides services to the Company; or (iv) the material breach of this Agreement by the Company. "Good Reason Process" shall mean that (i) you reasonably determine in good faith that a "Good Reason" condition has occurred; (ii) you notify the Company in writing of the first occurrence of the Good + +7 + + + + + +Reason condition within 60 days of the first occurrence of such condition; (iii) you cooperate in good faith with the Company's efforts, for a period not less than 30 days following such notice (the "Cure Period"), to remedy the condition; (iv) notwithstanding such efforts, the Good Reason condition continues to exist; and (v) you terminate your employment (without notice) within 60 days after the end of the Cure Period. If the Company cures the Good Reason condition during the Cure Period, Good Reason shall be deemed not to have occurred. + +11.5 Your employment hereunder shall also terminate immediately upon your death. + +11.6 If your employment with the Company is terminated for any reason, the Company shall pay or provide to you (or to your authorised representative or estate) (i) any Salary earned through the Termination Date (as defined below); (ii) unpaid expense reimbursements (subject to, and in accordance with, paragraph 6 of this Agreement); and (iii) any vested benefits you may have under any employee benefit plan of the Company through the Termination Date, which vested benefits shall be paid and/or provided in accordance with the terms of such employee benefit plans (collectively, the "Accrued Benefits"). + +Severance Pay and Benefits Upon Termination by the Company without Cause or by the Executive for Good Reason outside the Change in Control Period. + +11.7 If your employment is terminated on account of your death or by the Company without Cause (being for any reason not covered by paragraph 11.3), or you terminate your employment for Good Reason (as provided in paragraph 11.4), in either case outside of the Change in Control Period, then the Company shall pay you the Accrued Benefits. In addition, subject to (i) your (or your authorised representative or estate signing, if the termination is due to your death) signing a settlement agreement and a separation agreement and release (together the "Settlement Agreements") in a form and manner satisfactory to the Company, which shall include, without limitation, a general release of claims against the Company and all related persons and entities, a reaffirmation of all of your continuing obligations to the Company, including those set forth in paragraphs 13 - 15, and (in the case of the separation agreement and release) and a seven (7) business day revocation period; and (ii) the separation agreement and release becoming irrevocable, all within 60 days after the Termination Date (or such shorter period as set forth in the Settlement Agreements), the Company shall: (A) pay you (or your authorised representative or estate if the termination is due to your death) an amount equal to nine (9) months of your salary as of the Termination Date (which payment shall not be reduced by either the value of any salary paid to you during your notice period or by any payment in lieu of notice made pursuant to paragraph 11.2); and (B) pay you (or your authorised representative or estate if the termination is due to your death) an amount equal to the cost to the Company of providing you with the contractual benefits under paragraph 5 for nine (9) months or, at the Company's option, continue to provide you with such benefits for nine (9) months. + +Severance Pay and Benefits Upon Termination by the Company without Cause or by the Executive for Good Reason Within the Change in Control Period + +11.8 The provisions of this paragraph 11.8 shall apply in lieu of, and expressly supersede, the provisions of paragraph 11.7 regarding severance pay and benefits upon a termination by the Company without Cause or by you for Good Reason if such termination of employment occurs within 12 months after the occurrence of the first event constituting a Change in Control (such period, the "Change in Control Period"). These provisions shall terminate and be of no further + +8 + + + + + +force or effect after the Change in Control Period. + +(a) Change in Control Period. If during the Change in Control Period your employment is terminated on account of your death or by the Company without Cause (being for any reason not covered by paragraph 11.3) or you terminate your employment for Good Reason (as provided in paragraph 11.4), then, subject to (i) your signing (or your authorised representative or estate signing, if the termination is due to your death) a settlement agreement and a separation agreement and release (together the Settlement Agreements) in a form and manner satisfactory to the Company, which shall include, without limitation, a general release of claims against the Company and all related persons and entities, a reaffirmation of all of your continuing obligations to the Company, including those set forth in paragraphs 13 - 15, and (in the case of the separation agreement and release) and a seven (7) business day revocation period; and (ii) the separation agreement and release becoming irrevocable, all within 60 days after the Termination Date (or such shorter period as set forth in the Settlement Agreements): + +(i) the Company shall pay you (or your authorised representative or estate if the termination is due to your death) an amount equal to the sum of (A) your annual salary as of the Termination Date (or your annual salary in effect immediately prior to the Change in Control, if higher) plus (B) your target annual performance bonus amount under the Annual Bonus Plan for the then-current year (the "Change in Control Payment"), which payment shall not be reduced by either the value of any salary paid to you during your notice period or by the value of any payment made to you in lieu of notice pursuant to paragraph 11.2; + +(ii) the Company shall: pay you (or your authorised representative or estate if the termination is due to your death) an amount equal to the cost to the Company of providing you with the contractual benefits under paragraph 5 for twelve (12) months or, at the Company's option, continue to provide you with such benefits for twelve (12) months; and + +(iii) notwithstanding anything to the contrary in any applicable option agreement or other stock-based award agreement, all Time-Based Equity Awards shall immediately accelerate and become fully exercisable (for a period determined in accordance with the rules of the applicable equity plan) or nonforfeitable as of the later of (A) the Termination Date or (B) the Accelerated Vesting Date; provided that any termination or forfeiture of the unvested portion of such Time-Based Equity Awards that would otherwise occur on the Termination Date in the absence of this Agreement will be delayed until the Effective Date of the Settlement Agreements and will only occur if the vesting pursuant to this subsection does not occur due to the absence of the Settlement Agreements becoming fully effective within the time period set forth therein. Notwithstanding the foregoing, no additional vesting of the Time-Based Equity Awards shall occur during the period between your Termination Date and the Accelerated Vesting Date. + +11.9 Definitions. For purposes of this paragraph 11, the following terms shall have the following meanings: + +9 + + + + + +"Accelerated Vesting Date" means the effective date of the Settlement Agreements signed by you (or your authorised representatives or estate if the termination is due to your death). + +"Termination Date" means the date on which your employment hereunder terminates. + +"Time-Based Equity Awards" means all time-based stock options and other stock-based awards subject to time based vesting held by you. + +"Change in Control" has the meaning given to that term in the Schedule to this Agreement. + +12 DISCIPLINARY, DISMISSAL AND GRIEVANCE PROCEDURES + +12.1 A copy of the Company's disciplinary, dismissal and grievance procedures are set out in its employee handbook (the "Employee Handbook"). + +12.2 Any grievance concerning your employment should be taken up orally in the first instance with the CEO. If the grievance is not resolved to your satisfaction, you should then refer it to the Chairman. + +12.3 The Company reserves the right to suspend you on full pay and benefits at any time for a reasonable period to investigate any potential disciplinary matter that it reasonably believes you may be or may have been involved in. + +13 OUTSIDE EMPLOYMENT, CONFIDENTIAL INFORMATION, CONFLICTING INTERESTS AND RETURN OF COMPANY PROPERTY + +13.1 For the purposes of this paragraph 13, paragraph 10 above and paragraph 14 below the expression "Confidential Information" shall include, but not be limited to, any and all knowledge, data or information (whether or not recorded in documentary form or on computer disk or tape), which may be imparted in confidence or which is of a confidential nature or which you may reasonably regard as being confidential or a trade secret by the Company, concerning the business, business performance or prospective business, financial information or arrangements, plans or internal affairs of the Company, any Group Company or any of their respective customers. By way of illustration but not limitation, "Confidential Information" includes (a) trade secrets, inventions, mask works, ideas, processes, formulas, software in source or object code, data, records, reports, interpretations, the contents of any databases, programs, other works of authorship, know-how, materials, improvements, discoveries, developments, technical information, designs and techniques and any other proprietary technology and all IPRs (as defined below) therein (collectively, "Inventions"); (b) information regarding research, development, new products, planned products, planned surveys, marketing surveys, research reports, market share and pricing statistics, marketing and selling, business plans, financial details, budgets and unpublished financial statements, licenses, prices and costs, fee levels, margins, discounts, credit terms, pricing and billing policies, quoting procedures, commissions, commission charges, other price sensitive information, methods of obtaining business and other business methods, forecasts, future plans and potential strategies, financial projections and business strategies and targets, operational plans, financing and capital-raising plans, activities and agreements, internal services and operational manuals, methods of conducting Company business, corporate and business accounts, suppliers and supplier information, and purchasing; (c) information regarding clients or customers and potential clients or customers of the Company, including customer lists, client + +10 + + + + + +lists, names, addresses (including email), telephone, facsimile or other contact numbers and contact names, representatives, their needs or desires with respect to the types of products or services offered by the Company, proposals, bids, contracts and their contents and parties, the type and quantity of products and services provided or sought to be provided to customers and potential customers of the Company and other non-public information relating to customers and potential customers; (d) information regarding any of the Company's business partners and their services, including names, representatives, proposals, bids, contracts and their contents and parties, the type and quantity of products and services received by the Company, and other non-public information relating to business partners; (e) information regarding personnel, computer passwords, employee lists, compensation and remuneration, and employee skills; and (f) any other non-public information which a competitor of the Company could use to the competitive disadvantage of the Company. + +13.2 You shall not, without the prior written consent of the Company, either solely or jointly, directly or indirectly, carry on or be engaged, concerned or interested in any other trade or business, including, but not limited to, carrying on business with the Company's suppliers or dealers, save that nothing in this paragraph 13.2 shall prevent you from holding (with the prior written consent of the Company, which shall not be unreasonably delayed or withheld) up to three percent (3%) of the issued equity share capital of any company where those equity shares are listed on a recognised investment exchange (as defined in section 285 of the Financial Services and Markets Act 2000) or traded on the AIM market operated by the London Stock Exchange. Failure to secure advance permission in accordance with this paragraph 13.2 may result in summary dismissal. + +13.3 You will not (except with the prior written consent of the Board) except in the proper course of your duties during the continuance of this Agreement (which for the avoidance of doubt shall include the use of laptops and remote working), or at any time thereafter: + +(a) disclose or use for your own or for another's purpose or benefit any Confidential Information which you may learn while in the employment of the Company except as required by a court of law or any regulatory body or that which may be in or become part of the public domain other than through any act or default on your part; + +(b) copy or reproduce in any form or by or on any media or device or allow others access to copy or reproduce any documents (including without limitation letters, facsimiles and memoranda), disks, memory devices, notebooks, tapes or other medium whether or not eye-readable and copies thereof on which Confidential Information may from time to time be recorded or referred to ("Documents"); or + +(c) remove or transmit from the Company or any Group Company's premises any Documents on which Confidential information may from time to time be recorded. + +13.4 Upon termination of your employment for any reason by either party, you must immediately return to the Company all Company property including but not limited to documents, papers, records, keys, credit cards, mobile telephones, computer and related equipment, PDA or similar device, security passes, accounts, specifications, drawings, lists, correspondence, catalogues or the like relating to the Company's business which is in your possession or under your control and you must not take copies of the same without the Company's express written authority. + +11 + + + + + +14 RESTRICTIVE COVENANTS + +14.1 For the purpose of this paragraph 14 the following expressions shall have the following meanings: + +"Prospective Customer" shall mean any person, firm, company or other business who was to your knowledge at the Termination Date negotiating with the Company or with any Group Company with a view to dealing with the Company or any Group Company as a customer; + +"Restricted Business" means any business which (i) carries on research in the field of constrained peptides, including, without limitation, all work in the field of lead constrained peptide identification and optimization and pre-clinical development of constrained peptide therapeutics or (ii) is developing a drug conjugate compound for treating cancer that targets the same target as a drug conjugate compound in development by any Group Company; + +"Restricted Customers" shall mean any person, firm, company or other business who was to your knowledge at any time in the twelve (12) month period ending with the Termination Date a customer of the Company or any Group Company; + +"Restricted Period" shall mean the period of twelve (12) months from the Termination Date; + +"Restricted Territory" means anywhere in the United States or the United Kingdom or in any other country in which the Company or any Group Company conducts business or as of the date of termination of my employment relationship had plans to conduct business; and + +"Termination Date" shall mean the date on which your employment under this Agreement terminates either due to you or the Company terminating it in accordance with the terms of the Agreement or in breach of the terms of this Agreement. + +14.2 During the course of your employment hereunder you are likely to obtain Confidential Information relating to the business of the Company or any Group Company and personal knowledge and influence over clients, customers and employees of the Company or any Group Company. You hereby agree with the Company that to protect the Company's and any and all Group Company's business interests, customer connections and goodwill and the stability of its or their workforce, that you will not during the Restricted Period (and in respect of sub-paragraph 14.2(f) below only, at any time): + +(a) in the Restricted Territory, compete with the business of the Company or any Group Company by being directly or indirectly employed or engaged in any capacity by any person, firm or company which engages in or provides Restricted Business or commercial activities competitive with the Restricted Business to Restricted Customers or Prospective Customers; + +(b) in the Restricted Territory, compete with the business of the Company or any Group Company either on your own account or for any person, firm or company directly or indirectly by transacting business in competition with the Restricted Business with any Restricted Customer or Prospective Customer of the Company or Group Company and with whom you personally dealt in respect of Restricted Business in the pursuance of the employment hereunder in the twelve (12) months prior to the Termination Date; + +12 + + + + + +(c) in the Restricted Territory, compete with the business of the Company or any Group Company either on your own account or for any person, firm or company directly or indirectly in competition with the Restricted Business by soliciting or endeavouring to solicit or entice the business or custom of any Restricted Customer or Prospective Customer and with whom you personally dealt in respect of Restricted Business in the pursuance of the employment hereunder in the twelve (12) months prior to the Termination Date; + +(d) either on your own account or for any person, firm or company directly or indirectly solicit or entice away or endeavour to solicit or entice away any director or senior employee of the Company or any Group Company employed in a managerial, scientific or technical role with whom you have had material personal dealings in the twelve (12) months prior to the Termination Date; + +(e) from the Termination Date for the purpose of carrying on any trade, or business represent or allow you to be represented or held out as having any present association with the Company or any Group Company; and + +(f) from the Termination Date carry on any trade or business whose name incorporates the word Bicycle or any deviation or extension thereof which is likely or which may be confused with the name of the Company or any Group Company. + +14.3 While the restrictions set out in paragraph 14.2 above are considered by the parties to be reasonable in all the circumstances, it is agreed that if any one or more of such restrictions shall either taken by itself or themselves together be adjudged to go beyond what is reasonable in all the circumstances for the protection of the legitimate interests of the Company but would be adjudged reasonable if any particular restriction or restrictions were deleted or if any part or parts of the wording thereof were deleted, restricted or limited in a particular manner, then the restrictions set out in paragraph 14.2 above shall apply with such deletions or restrictions or limitations as the case may be. + +14.4 For the avoidance of doubt nothing in this paragraph 14 shall prevent you from having any dealings with any Prospective Customer or Restricted Customer in relation to any business which is not Restricted Businesses and which is not competitive with the Restricted Business, nor from continuing to deal with any Prospective Customer or Restricted Customer where you either have a social or business relationship unconnected to the Company and that relationship does not compete with the Restricted Business. + +14.5 The restrictions contained in paragraph 14.2 above are held by the Company for itself and on trust for any other Group Company and shall be enforceable by the Company on their behalf or by any Group Company (at their request). You shall during the employment hereunder enter into direct agreements with any Group Company whereby you will accept restrictions in the same or substantially the same form as those contained in paragraph 14.2 above. + +14.6 In the event that the Company exercises its rights and places you on Garden Leave under paragraph 10 above then the Restricted Period shall be reduced by any period/s spent by you on Garden Leave prior to the Termination Date. + +14.7 During the Restricted Period you shall provide a copy of the restrictions contained at paragraph 13 above and this paragraph 14 to any employer or prospective employer or any other party + +13 + + + + + +with whom you become or will become engaged or provide service or services to. + +15 INTELLECTUAL PROPERTY + +15.1 For the purpose of this paragraph 15 "IPRs" shall mean all trade secrets, Copyrights, trademarks and trade and business names (including goodwill associated with any trademark or trade or business names and the right to sue for passing off or unfair competition), service marks, mask work rights, patents, petty patents, rights in ideas, concepts, innovations, discoveries, developments and improvements, drug formulations, technology, rights in domain names, rights in inventions, utility models, rights in know-how (including all data, methods, processes, practices and other results of research), unregistered design rights, registered design rights, database rights, semiconductor topography rights and other intellectual property rights recognized by the laws of any jurisdiction or country including all applications and rights to apply for and be granted, renewals or extensions of, and rights to claim priority from, such rights and all similar or equivalent rights or forms of protection which subsist or will subsist now or in the future in any part of the world; the term "Copyright" means the exclusive legal right to reproduce, perform, display, distribute and make derivative works of a work of authorship (as a literary, musical, or artistic work) recognized by the laws of any jurisdiction or country; and the term "Moral Rights" means all paternity, integrity, disclosure, withdrawal, special and any other similar rights recognized by the laws of any jurisdiction or country. + +15.2 It is contemplated that you may in the course of your employment with the Company create, author or originate (either alone or jointly with others) Inventions (as defined in paragraph 13.1), and/or records, reports, papers, databases, data, information, know how, literature, drawings, graphics, typographical arrangements, designs, works, documents, publications and other materials (in printed, electronic, or any other media or form) (together with Inventions constituting "Works"). + +15.3 You will promptly disclose to the Company full details of any Inventions on their creation and provide further details, explanations and demonstrations as the Company from time to time requests. + +15.4 All IPRs subsisting in any Works shall be the exclusive property of the Company. + +15.5 To the extent that such IPRs do not vest automatically in the Company by operation of law, you hereby assign and agree to assign to the Company all of your right, title and interest in any existing and future IPRs which may subsist in any Works for their full term of protection (including any extensions, revivals and renewals) together with the right to sue and claim remedies for past infringement and all materials embodying these rights to the fullest extent permitted by law in any and all countries of the world. Insofar as such IPRs do not vest automatically by operation of law or under this Agreement, the Consultant holds legal title in these rights and inventions on trust for the Company. + +15.6 To the extent permitted by law you hereby irrevocably and unconditionally waive in favour of the Company, its licensees and successors in title, all existing and future Moral Rights (or similar rights existing in any part of the world) you may have in respect of any Works under Chapter IV of the Copyright Designs and Patents Act 1988 in England or any similar provisions of law in any jurisdiction, including (but without limitation) the right to be identified, the right of integrity and the right against false attribution, and agrees not to institute, support, maintain or + +14 + + + + + +permit any action or claim to the effect that any treatment, exploitation or use of such Works, Inventions or other materials infringes the Consultant's Moral Rights. + +15.7 Without prejudice to the generality of paragraph 15.9 below, during your employment with the Company and thereafter, without limit in time, you shall at the request and expense of the Company, promptly assist the Company: + +(a) to file, prosecute, obtain and maintain registrations and applications for registration of any IPRs subsisting in, or protecting, any Works; and + +(b) to commence and prosecute legal and other proceedings against any third party for infringement of any IPRs subsisting in, or protecting, any Works and to defend any proceedings or claims made by any third party that the use or exploitation of any Works infringes the IPRs or rights of any third party. + +15.8 You shall keep details of all Inventions confidential and shall not disclose the subject matter of any Inventions to any person outside the Company without the prior consent of the Company. You acknowledge that any unauthorised disclosure of such subject matter may prevent the Company from obtaining patent or registered intellectual property protection for such Invention. + +15.9 Whenever requested to do so by the Company and in any event on the termination or expiry of this Agreement, you shall promptly deliver to the Company all correspondence, documents, papers and records on all media (and all copies or abstracts of them), recording or relating to any part of the Works and the process of their creation which are in your possession, custody or power. + +15.10 Subject to paragraph 15.10 below, during your employment with the Company and thereafter without limit in time you shall at the request and expense of the Company promptly execute and do all acts, matters, documents and things necessary or desirable to give the Company the full benefit of the provision of this paragraph 15. You shall not register nor attempt to register any of the IPRs in the Works, nor any of the Inventions, unless requested to do so in writing by the Company. + +15.11 Nothing in this paragraph 15 shall be construed, or have the effect of, restricting your rights under sections 39 to 43 (inclusive) of the Patents Act 1977 (as amended from time to time). + +16 LITIGATION ASSISTANCE + +During the term of your employment and at all times thereafter subject always to your obligations to third parties, you shall furnish such information and proper assistance to the Company or any Group Companies as it or they may reasonably require in connection with the Company's intellectual property (including without limitation applying for, defending, maintaining and protecting such intellectual property) and in connection with litigation in which it is or they are or may become a party. This obligation on you shall include, without limitation, meeting with the Company or any Group Companies' legal advisers, providing witness evidence, both in written and oral form, and providing such other assistance that the Company or any Group Companies' legal advisors in their reasonable opinion determine. The Company shall reimburse you for all reasonable out of pocket expenses incurred by you in furnishing such information and assistance and in the event you are no longer employed by the Company a reasonable daily rate (as agreed between you and the Company for such assistance). Such + +15 + + + + + +assistance shall not require you to provide assistance for more than 5 days in any calendar month. For the avoidance of doubt the obligations under this paragraph 16 shall continue notwithstanding the termination of your employment with the Company. + +17 COLLECTIVE AGREEMENTS + +There are no collective agreements which directly affect your terms and conditions of employment. + +18 DATA PROTECTION + +Processing of personal data and our policies + +18.1 Information relating to an individual (or from which an individual may be identified) is called "personal data". + +18.2 In processing personal data, we are required to comply with the law on data protection. To help us achieve this, we have produced a privacy notice ("Privacy Notice"). This may be found in the Employee Handbook. You must read this and comply with it in carrying out your work. + +Data protection principles + +18.3 In complying with the law on data protection, we are required to comply with what are known as data protection principles. These are summarised in our Privacy Notice. In performing your role and carrying out your responsibilities, you must do your best to ensure that we comply with these principles. + +18.4 A key element of the data protection principles is the duty to ensure that data is processed securely and protected against unauthorised or unlawful processing or loss. Key elements include the following: + +(a) You must ensure that laptops, memory sticks, phones and other mobile devices are password protected and encrypted. You must not take such devices outside the office without encryption. You must take care of them and keep them secure. + +(b) You must use strong passwords, changing them when asked and not sharing them with unauthorised colleagues. + +(c) You must not access other individuals' personal data unless in the course of your work. + +Data breach - and urgent notification + +18.5 If you discover a data breach, you must notify the Chairman or CFO immediately - and, if practicable, within one hour. Depending on context, you may then need to provide further information on the circumstances of the breach. + +18.6 A data breach occurs where there is destruction, loss, alteration or unauthorised disclosure of or access to personal data which is being held, stored, transmitted or processed in any way. For example, there is a data breach if our servers are hacked or if you lose a laptop or USB stick or send an email to the wrong person by mistake. + +16 + + + + + +18.7 Failure to notify a breach or to provide information as set out above will be treated seriously and disciplinary action may be taken. + +Why we process personal data + +18.8 For information on the nature of the data we process, why we process it, the legal basis for processing and related matters, please refer to our Privacy Notice. In summary: + +(a) We process personal data relating to you for the purposes of our business including management, administrative, employment and legal purposes. + +(b) We monitor our premises and the use of our communication facilities, including using CCTV cameras, monitoring compliance with our data and IT policies, and where non-compliance is suspected, looking in a more targeted way. + +18.9 The summary above is for information only. We do not, in general, rely on your consent as a legal basis for processing. Agreeing the terms of this Agreement will not constitute your giving consent to our processing of your data. + +18.10 We reserve the right to amend the documents referred to above from time to time. + +19 THIRD PARTY RIGHTS + +Save in respect of any rights conferred by this Agreement on any Group Company (which such Group Company shall be entitled to enforce), a person who is not a party to this Agreement may not under the Contracts (Rights of Third Parties) Act 1999 enforce any of the terms contained within this Agreement. + +20 DEFINITIONS + +In this Agreement: + +"Group Company" means a subsidiary or affiliate and any other company which is for the time being a holding company of the Company or another subsidiary or affiliate of any such holding company as defined by the Companies Act 2006 (as amended) and "Group Companies" will be interpreted accordingly. + +21 ENTIRE AGREEMENT + +These terms and conditions constitute the entire agreement between the parties and supersede any other agreement whether written or oral previously entered into. + +22 JURISDICTION AND CHOICE OF LAW + +This Agreement shall be governed by and interpreted in accordance with the laws of England and Wales and the parties to this Agreement submit to the exclusive jurisdiction of the Courts of England and Wales in relation to any claim, dispute or matter arising out of or relating to this Agreement. + +17 + + + + + +23 NOTICES + +Any notices with respect to this Agreement shall be in writing and shall be deemed given if delivered personally (upon receipt), sent by email or sent by first class post addressed, in the case of the Company, to the Company Secretary at its registered office and in your case, addressed to your address last known to the Company. + +18 + + + + + +Schedule + +Definitions + +Change in Control: means and includes each of the following: + +(a) a Sale; or + +(b) a Takeover. + +The Compensation Committee shall have full and final authority, which shall be exercised in its sole discretion, to determine conclusively whether a Change in Control has occurred pursuant to the above definition, the date of the occurrence of such Change in Control and any incidental matters relating thereto; provided that any such Change in Control also qualifies as a "change in control event" as defined in Section 409A of the United States Internal Revenue Code of 1986, as amended and the regulations and other guidance thereunder and any state law of similar effect, and any exercise of authority in conjunction with a determination of whether a Change in Control is a "change in control event" is consistent with such regulation. + +Control: shall have the meaning given to that word by Section 719 of the UK Income Tax (Earnings and Pensions) Act 2003 and "Controlled" shall be construed accordingly. + +Sale: the sale of all or substantially all of the assets of BTL. + +Takeover: circumstances in which any person (or a group of persons acting in concert) (the "Acquiring Person"): + +(a) obtains Control of BTL as the result of making a general offer to:- + +i. acquire all of the issued ordinary share capital of BTL, which is made on a condition that, if it is satisfied, the Acquiring Person will have Control of BTL; or + +ii. acquire all of the shares in BTL; or + +(b) obtains Control of BTL as a result of a compromise or arrangement sanctioned by a court under Section 899 of the UK Companies Act 2006, or sanctioned under any other similar law of another jurisdiction; or + +(c) becomes bound or entitled under Sections 979 to 985 of the UK Companies Act 2006 (or similar law of another jurisdiction) to acquire shares in BTL; or + +(d) obtains Control of BTL in any other way, including but not limited to by way of a merger. + +19 + + + + + +THIS AGREEMENT has been executed and delivered as a deed by or on behalf of the parties on the date written at the top of page 1. + +Executed as a Deed by BICYCLETX LIMITED acting by a director: + +/s/ Kevin Lee (Director) in the presence of: /s/ Phil Jeffrey Witness Name: Phil Jeffrey Witness Address: + +20 + + + + + +Executed as a Deed by NIGEL CROCKETT: + +/s/ Nigel Crockett (Nigel Crockett) in the presence of: /s/ Paula Barnes Witness Name: Paula Barnes Witness Address: + +21 \ No newline at end of file diff --git a/full_contract_txt/BIOAMBERINC_04_10_2013-EX-10.34-DEVELOPMENT AGREEMENT (1).txt b/full_contract_txt/BIOAMBERINC_04_10_2013-EX-10.34-DEVELOPMENT AGREEMENT (1).txt new file mode 100644 index 0000000000000000000000000000000000000000..3ed020ea8a63d29196602017397498559db8be75 --- /dev/null +++ b/full_contract_txt/BIOAMBERINC_04_10_2013-EX-10.34-DEVELOPMENT AGREEMENT (1).txt @@ -0,0 +1,477 @@ +Exhibit 10.34 + +*** Text Omitted and Filed Separately Confidential Treatment Requested Under 17 C.F.R. §§ 200.80(b)(4) and 203.406 + +DEVELOPMENT AGREEMENT + +This Development Agreement ("Development Agreement") is entered into on April 15 , 2010 ("EffectiveDate") by and between Cargill, Incorporated through its Bio Technology Development Center, having its principal place of business at 15407 McGinty Road West, Wayzata, Minnesota 55391 USA ("Cargill") and Bioamber S.A.S., having a place of business at Route de Bazancourt, F-51110, Pomacle France ("Bioamber"). Bioamber and Cargill shall be referred to individually as "Party" and collectively as "Parties", as required by text. + +Background + + + + + +Cargill and Bioamber mutually agree as follows: + + + + + + + + Cargill Confidential - 1 - * Confidential treatment requested + + A. Cargill has developed a yeast strain designated CB1 ("CB1") for fermenting dextrose and/or mixed sugar streams and related research tools for modifying CB1,which are protected by Licensed Patents (as defined in Section 2.5 below). + + B. Bioamber desires to engage Cargill to further develop or modify CB1 with the goal of fermenting dextrose and/or mixed sugar streams to produce succinic acid and salts thereof. + + C. The Parties desire to grant each other certain rights to use the further developed or modified CB1 as well as other technology that is developed in the course of the work as provided in this Development Agreement for research purposes only. + +1. Scope of Work Plan 1.1 Cargill agrees to perform the services to develop or modify CB1 to produce succinic acid and salts thereof using dextrose (defined as glucose) and/or sucrose as the fermentation feedstock ("Work Plan"). The Work Plan is more fully described in Exhibit A, which is hereby incorporated by reference into this Development Agreement. CB1 that has been further developed or modified (or the like) under the Work Plan shall be referred to as "Modified CB1". Any changes to the Work Plan must be in writing and signed by both Cargill and Bioamber and may be subject to incremental fees depending on resource requirements. + +1.2 In agreeing to perform the Work Plan, Cargill represents and warrants that: + + 1.2.1 Cargill has the capability, experience, and means necessary to perform the Work Plan, and the Work Plan will be performed using personnel, equipment, and material qualified and suitable to perform the Work Plan requested; + +th + + + + + + + + + + + + + + + + + + Cargill Confidential - 2 - * Confidential treatment requested + + 1.2.2 Cargill will provide properly trained and informed personnel, and Cargill will be solely responsible for the negligent acts, errors and omissions of its employees, subcontractors, and agents and for any other person performing services under this Development Agreement at the direct request of Cargill; + + 1.2.3 Cargill will perform the Work Plan in a workmanlike manner with reasonable skill and care ordinarily exercised by members of the profession practicing under similar conditions and in accordance with accepted industry practices and professional guidelines; + + 1.2.4 Subject to Section 13.1, Cargill has in effect and will maintain in effect all permits, licenses and other authorizations necessary to perform the Work Plan; and + + + +1.2.5 No other party has rights to its services as described in the Work Plan, and that a work assignment from any third party shall not be accepted, or work by Cargill aloneshall not be conducted, to develop CB1 or other microorganisms that will be used to (a) directly produce succinic acid and salts thereof, or (b) indirectly produce succinic acid and salts thereof (for example, Cargill may develop microorganisms to produce precursors of succinic acid, such as fumaric acid and malic acid, so long as such precursors are not converted to succinic acid, such as by chemical modification), for the Term (as defined in Section 10.1) of this Development Agreement. For purposes of clarity, and as examples, Cargill may sell dextrose as fermentation feedstock to third parties, who may use such dextrose to produce succinic acid; also, Cargill may modify starches to make succinic acid starch derivatives. + +2. Fees and Milestones 2.1 Bioamber shall pay Cargill Two Hundred Fifty Thousand U.S. Dollars ($250,000.00) within thirty (30) days of the execution of this Development Agreement. + +2.2 In addition to the payment in Section 2.1, Bioamber shall pay Cargill a total of [***] U.S. Dollars ($[***] per year per full-time equivalent (FTE) person to perform the Work Plan, and Cargill will make available up to [***] FTE persons per year to perform the work as outlined in the Work Plan. Such total is subject to change based on an annual review of the needs and requirements of the Work Plan. The actual number of FTEs assigned at any given time will be a function of the Work Plan and will be subject to agreement amongst the Parties. In addition, Bioamber will pay for reasonable expenses incurred by Cargill, including travel. Cargill shall cover ordinary and customary [***]. Cargill shall submit to Bioamber a monthly invoice for costs owed by Bioamber, accompanied by a report summarizing Cargill's activities in relation to actual hours worked and expenses incurred. Bioamber will pay Cargill's costs within thirty (30) days of receipt of invoice and supporting documentation. Bioamber shall have the right to audit Cargill time sheets from time to time. Such audit shall occur once per year during reasonable business hours by an independent third party agreed to by both parties, who shall be under obligations of confidentiality. + + + + + + + + + + + + + + Cargill Confidential - 3 - * Confidential treatment requested + +2.3 Bioamber shall also pay Cargill within thirty (30) days of achieving each of the milestones summarized below and more fully described in the Work Plan found in Exhibit A. For purposes of clarity, payment is triggered [***]. Further, each of the Milestones and Target Dates may be changed according to the needs of the Work Plan and upon written agreement by the parties. + +Milestone Target Date Payment Milestone 1: Proof of Concept 12 months after Effective Date US $250,000.00 Milestone 2: CB1 Strain Development 30 months after Effective Date US $300,000.00 Milestone 3: CB1 Strain Optimization 42 months after Effective Date US $500,000.00 + +2.4 Missed Milestones. + + + +2.4.1 In the event Cargill does not achieve a given Milestone provided in Section 2.3 by the Target Date listed in Section 2.3 or modified Milestone and modified Target Date as agreed to by the Parties, and subsequently achieves such milestone as per the criteria described in Exhibit A, the payment for such missed milestone shall be due [***] and the amount due shall be [***] for every [***] beyond the Target Date. The Target Date for subsequent Milestones will be adjusted to reflect the date on which the Milestone was actually achieved. If a subsequent Milestone is achieved by the original Target Date listed in Section 2.3, Bioamber will pay Cargill the amount [***]. For purposes of clarity and as examples, if Milestones 1 and 2 were not delivered by the Target Dates, but Milestone 3 is delivered by or before the Target Date, then the total payments due to Cargill at that time would be [***] (a total payment of $[***]). Another example is if [***], the payment due at that time would be a total of $[***]. + + + +2.4.2 In the event Cargill does not achieve a given Milestone provided in Section 2.3 by the Target Date listed in Section 2.3 or modified Milestone and modified Target Date as agreed to by the Parties, and Bioamber decides to commercialize Modified CB1, any outstanding milestone payments shall immediately become due such that the total payment due Cargill under this Development Agreement equals One Million Fifty Thousand U.S. Dollars (US $1,050,000.00). + + + + + + + + + + Cargill Confidential - 4 - * Confidential treatment requested + + 2.4.3 Provided that Cargill has respected its undertakings set out in Section 1.2 of this Development Agreement, no other damages shall accrue to Cargill for not achieving a given Milestone other than provided in Sections 2.4.1, 2.4.2, and 2.5. + +2.5 Option to Research License. In the event Cargill (i) is unable to achieve a given milestone described in Section 2.3 by the Target Date, or (ii) terminates this Agreement pursuant to Section 10.2, Bioamber shall have the option to obtain a license during the term of this Development Agreement to the patent applications and patents listed in Exhibit B (including any continuations, continued prosecutions, continuations- in-part, reissues, reexaminations, divisions or substitutions thereof) (collectively "Licensed Patents"), the tool kit listed in Exhibit C ("Licensed Tool Kit"), and Cargill Improvements if any (as defined in Section 5.2 below), for research use only and for additional monetary consideration ("Research License"). Except for financial terms paid by third parties for [***], the Research License shall be offered to Bioamber at [***]. Such research use shall be for the development and optimization of CB1 for the production of succinic acid and salts thereof using dextrose or sucrose as the fermentation feedstock. The Research License shall be provided to Bioamber only, with no rights to sublicense and with no "have made" rights. Notwithstanding the preceding, Bioamber will be permitted to outsource development work as outlined in the Work Plan and according to the Research License to third parties that have been approved by Cargill, and such approval shall not be unreasonably withheld. In considering whether or not to outsource such development work to third parties, the Parties recognize that it is in their mutual interest to protect CB1, Modified CB1, Cargill Confidential Information (as defined in Section 4.1), and Know-How and Licensed Patents (as those terms are defined under the Commercial License Agreement) and, therefore, the Parties shall undertake joint evaluations of third parties who have been identified by Bioamber to perform such development work, including, for example and not by limitation, a risk assessment of the geography in which such development work will occur, and whether or not such third parties have similar guiding principles as Cargill (a copy of Cargill's Guiding Principles and Compliance Policy on Intellectual Property is attached as Exhibit F). Such development work shall not be conducted by such third parties in circumstances where Cargill's intellectual property is at an unacceptable risk as determined by Cargill based on the joint evaluations of such third parties. The terms and conditions of such Research License shall be negotiated between the Parties and shall include the terms described in this Section 2.5 and terms addressing ownership and rights to use of any intellectual property developed. Further, this Development Agreement shall serve as the framework for the Research License. + +2.6 Technology Transfer. In the event Milestone 3 is achieved, Cargill will provide up to [***] to assist in a successful transfer of the Modified CB1 technology to Bioamber in order to allow subsequent scale-up at the same FTE rate set forth in Section 2.2. For clarity, [***] per FTE per year equals US$[***] for this technology transfer). + + + + + + + + + + + + + + Cargill Confidential - 5 - * Confidential treatment requested + +2.7 Scale-Up. Following the successful technology transfer, upon request by Bioamber and subject to Cargill's availability of appropriate resources, Cargill will enter at its sole discretion into a services agreement with Bioamber to assist in the fermentation scale-up of using Modified CB1 obtained under Milestones 2 and 3 for producing succinic acid and salts thereof at a single Bioamber facility or a facility designated by Bioamber. Cargill shall invoice Bioamber [***] U.S. Dollars (US$[***]) per man-day provided, not inclusive of taxes or other governmental fees, and further adjusted for inflation at the time it goes into effect. Cargill shall have no obligation to perform scale-up work at Cargill facilities. + +3. Alternative Feedstock. Bioamber also desires the right to further develop CB1 to utilize cellulosic biomass as the fermentation feedstock. Cargill hereby grants Bioamber the option to modify or convert the Work Plan to include the development or modification of CB1 capable of fermenting such cellulosic feedstock ("Modified Work Plan"). If such option is exercised, (a) the terms and conditions of this Development Agreement shall apply to the Modified Work Plan except (i) new, additional up-front and milestone payments shall apply as provided below, and (ii) any development work performed under the Modified Work Plan will be at a FTE rate which will be equivalent to the FTE rate provided in Section 2.2 above and further adjusted for inflation at the time it goes into effect; and (b) the commercial license attached as Exhibit D shall be expanded to include the resulting strain developed out of the Modified Work Plan with no additional change in the financial terms. Additionally, the additional up-front fee [***]. + +Milestone using Alternative Feedstock Target Date Payment Up-front Payment TBD US $[***] Milestone 1: Proof of Concept TBD US $[***] Milestone 2: CB1 Strain Development TBD US $[***] Milestone 3: CB1 Strain Optimization TBD US $[***] + +4. Confidentiality. To carry out the Work Plan, Cargill may receive from, and provide to, Bioamber certain Confidential Information, as defined below. Such Confidential Information will be disclosed by one Party (the "Disclosing Party") to the other Party (the "Receiving Party") on the following terms and conditions: + +4.1 "Confidential Information" means all business, technical, and financial information related to the Work Plan, the terms and discussions relating to the Term Sheet executed by the parties on December 3, 2009 and December 4, 2009, and to any aspect of the business of each Party that is material to the Work Plan, including, without limitation, Licensed Tool Kit, products, product compositions, raw materials, specifications, formulae, equipment, business plans and strategies, customer lists, supplier lists, know-how, samples, drawings, pricing informationand other financial information, inventions, ideas, research information, packaging, manufacturing processes, and other information, or its potential use, that is owned by or in possession of either Party. For purposes of clarity, the parties shall not disclose to each other any Confidential Information that is not material to the Work Plan, such as, by way of example and without limitation, processes and other information relating to post-fermentation activities. Confidential Information shall not include information that: (a) is in the public domain prior to disclosure by Disclosing Party; (b) becomes part of the public domain, by publication or otherwise, through no unauthorized act or omission by the Receiving Party; (c) is lawfully in the Receiving Party's possession prior to disclosure by the Disclosing Party; or (d) is independently developed by an employee(s) of the Receiving Party with no access to the disclosed Confidential Information. + + + + + + + + + + + + Cargill Confidential - 6 - * Confidential treatment requested + +4.2 The Receiving Party agrees to take and maintain proper and appropriate steps to protect Confidential Information of the Disclosing Party. The Receiving Party agrees to disclose the Confidential Information of the Disclosing Party only to employees or agents of the Receiving Party who are directly involved with the Work Plan contemplated by this Development Agreement, and even then only to such extent as is necessary and essential to perform the Work Plan. The Receiving Party agrees to inform such employees and agents of the confidential nature of the information disclosed hereunder and to cause all such employees and agents to abide by the terms of this Development Agreement. + +4.3 The Receiving Party shall not disclose the Disclosing Party's Confidential Information to any unauthorized party without the Disclosing Party's prior express written consent or unless required by court order or order of a similar governmental entity. If a Party is required by court order or order of a similar governmental entity to disclose the other's Confidential Information, they shall give the other Party prompt notice of such requirement so that an appropriate protective order or other relief may be sought. + +4.4 The Receiving Party will use Confidential Information only in connection with the Work Plan. Both Parties have reserved all rights to their respective Confidential Information not expressly granted herein. All documents and/or tangible materials containing or comprising Confidential Information of the Disclosing Party will remain the property of the Disclosing Party. Upon the request of the Disclosing Party, the Receiving Party will destroy all Confidential Information of the Disclosing Party and any documents prepared by the Receiving Party using Confidential Information of the Disclosing Party and the Receiving Party agrees to provide confirmation of such destruction in writing. The Receiving Party may, however, keep one copy of any such document in the files of its legal department or outside counsel for record purposes only. + +4.5 Notwithstanding any other provision of this Development Agreement, each Receiving Party acknowledges that a breach of confidentiality and use as provided in this Section may result in irreparable harm and damages to the Disclosing Party in an amount difficult to ascertain and that cannot be adequately compensated by a monetary award. Accordingly, in addition to any other relief to which the Disclosing Party may be entitled at law or in equity, the Disclosing Party shall be entitled to seek a temporary and/or permanent injunctive relief from any breach or threatened breach by the Receiving Party. + + + + + + + + + + + + + + + + + + Cargill Confidential - 7 - * Confidential treatment requested + +4.6 The obligations imposed by this section, including but not limited to non-disclosure and non-use, however, will endure so long as the Confidential Information of the Disclosing Party does not become part of the public domain. + +4.7 The existence of and the terms of this Development Agreement, including its Exhibits, are confidential and are not to be disclosed without the prior written approval of Cargill. + +4.8 Neither Party may make any public announcement concerning this Development Agreement, its subject matter, and the activities and actions it contemplates without the other Party's express written consent. 4.9 This Section 4 supercedes and replaces the Mutual Confidentiality Agreement between the Parties, which was effective July 17, 2009. All Confidential Information that was subject to that Mutual Confidentiality Agreement is hereby made subject to the terms and conditions of this Section 4. + +5. Intellectual Property 5.1 Each party shall retain ownership of all intellectual property that it owned prior to the Effective Date. + +5.2 Improvements. Any invention or discovery relating to the Work Plan, in whole or in part, that is conceived during the term of this Development Agreement shall be an "Improvement". The scope for Improvements will be limited to the CB1 strain itself and the [***] (the "Field"), but shall exclude [***]. Bioamber will own any Improvement in the field of succinic acid and salts thereof and such Improvement shall be designated "Bioamber Improvements". Cargill will own any Improvement in all fields other than the field of succinic acid and salts thereof, subject to the rights provided in Section 5.2.1 below, and such Improvement shall be designated "Cargill Improvements". In the event it is not clear as to ownership of any Improvement as described in this Section 5.2, in other words, if it is not clear whether an invention or discovery is either a Bioamber Improvement or a Cargill Improvement, such Improvement shall be [***] and such Improvement shall be designated "Joint Improvements". For purposes of clarity, as examples, Cargill Improvements are those inventions relating to fumaric acid and malic acid. Additionally, where an Improvement has applications both in the Field and outside the Field, then such Improvement, as it applies to the Field, shall be a Bioamber Improvement and, as it applies outside the Field, such Improvement shall be a Cargill Improvement. + + + +5.2.1 Cargill hereby grants Bioamber, and Bioamber hereby accepts, an exclusive, royalty-free license to Cargill Improvements and Joint Improvements for use in the Field during the term of this Development Agreement with a reservation of right for Cargill to practice such Cargill Improvements and Joint Improvements for use in the field of succinic acid and salts thereof during the term of this Development Agreement. Such use shall be for research purposes only with no rights to sublicense and with no "have made" rights. Cargill shall also grant a commercial license to Bioamber for Cargill Improvements and Joint Improvements under the terms and conditions of Exhibit D. + + + + + + + + + + + + Cargill Confidential - 8 - * Confidential treatment requested + + 5.2.2 Bioamber hereby grants Cargill, and Cargill hereby accepts, an exclusive, worldwide, royalty-free license with an unlimited right to sublicense under and to Bioamber Improvements for use outside the Field during the term of this Development Agreement. Such use shall be for research purposes only. + + + +5.2.3 Cargill shall have the first option to prepare, file, prosecute, and maintain patent applications and issued/granted patents on Bioamber Improvements and Joint Improvements, which option may be waived in whole or in part. Cargill shall bear all costs incurred in connection with such preparation, filing, prosecution, and maintenance of U.S. and foreign application(s) and issued/granted patents directed to Bioamber Improvements and Joint Improvements. Cargill shall provide Bioamber a copy of any proposed patent application covering Bioamber Improvements and Joint Improvements in advance of the submission of the proposed patent application to any patent office. However, Cargill shall be entitled to file provisional patent applications without seeking Bioamber's approval. If Cargill waives its option, Bioamber shall have the option to prepare, file, prosecute, and maintain patent applications and issued patents on Bioamber Improvements and Joint Improvements. Cargill shall provide, when requested by Bioamber, all information in its possession, or true copies thereof, pertaining to Bioamber Improvements and Joint Improvements which may be necessary or useful in the preparation, filing, and prosecution of patent applications covering the Bioamber Improvements and Joint Improvements. Such information shall be treated as Confidential Information. + + + +5.2.4 If Cargill waives its option to prepare and prosecute a patent application in accordance with Section 5.2.3 and elects not to file such a patent application or elects to allow any such patent application or issued/granted patent to become abandoned or lapse, Cargill shall give Bioamber notice of such election promptly and at least two (2) months prior to the first date that action must be taken to avoid such abandonment or lapse. Bioamber shall have the right to take over at its sole expense the filing, prosecution or maintenance of any such patent application and Bioamber shall keep Cargill informed of Bioamber's filing, prosecution, and maintenance activities. All out-of-pocket expenses of Cargill shall be reimbursed by Bioamber. Bioamber shall have no liability to Cargill for Bioamber's acts or failure to act with respect to such patent application or issued/granted patent. + + + +5.2.5 Cargill shall have the sole power to bring and/or settle suits for infringement of any and all patent applications and/or patents on Improvements, regardless of ownership; provided, however, if required by law, Cargill shall join Bioamber, and Bioamber shall be joined, in such suits. Cargill shall control any such suits and shall bear all expenses related to any such suits. Bioamber shall provide any assistance reasonably requested in prosecuting and enforcing any and all patent applications and/or patents on Improvements. In the event Cargill elects not to initiate and prosecute suits for infringement of any patent application/and or patent onImprovement within the Field, then with sixty (60) days prior written notice to Cargill, Bioamber shall be entitled to initiate and prosecute such suits. For purposes of clarity, within such sixty (60) day period, Cargill shall be entitled to initiate and prosecute such suits. + + + + + + + + + + + + + + + + + + Cargill Confidential - 9 - * Confidential treatment requested + + 5.2.6 Cargill shall have the sole power to settle suits for infringement of the Licensed Patents. Cargill will in good faith consider enforcement requests from Bioamber. + + + +5.2.7 Improvements are to be considered Confidential Information of the owning Party subject to the terms and conditions of Section 4, provided that the Party authorized hereunder to file and prosecute patent applications for an Improvement may make disclosure of that Improvement to outside patent counsel and to relevant patent offices as reasonably necessary for filing and prosecution of a patent application. + +5.3 In consideration of the ownership rights granted to Bioamber under this Section 5, and the licenses granted to Bioamber under this Section 5 and the Commercial License attached as Exhibit D, Bioamber agrees to the payment terms and its other obligations contained in the attached Commercial License. + +6. WRF Patents. Washington Research Foundation (WRF) is the owner of several patents relating to the expression of polypeptides in yeast ("WRF Patents"). Prior to transferring CB1 or any other yeast strain to Bioamber, Bioamber shall provide to Cargill a letter from WRF stating that Bioamber has a license to the WRF Patents ("Bioamber-WRF License"). Upon receipt of such letter, Cargill will transfer CB1 to Bioamber for Bioamber's use of the strain commensurate with and in accordance with the Bioamber-WRF License. Cargill shall have no liability to Bioamber for Bioamber's acts or failure to act with respect to the WRF Patents. 7. Warranties. Except as provided in Section 1.2 of this Development Agreement, Cargill makes no representations or warranties, express or implied, with respect to the services provided under this Development Agreement and with respect to the subject matter of this Development Agreement. The services are provided "as is" and Bioamber acknowledges that it bears all responsibility and accountability for evaluating, approving, and implementing any of results resulting from this Development Agreement. + +8. Indemnification. Bioamber and Cargill agree to waive any and all claims against each other for consequential, punitive, incidental, special, or other forms of "exemplary" losses whether arising in contract, warranty, tort (including negligence), strict liability, or otherwise, including any losses relating to lost use, lost profits, lost business, damage to reputation, or lost or diminished financing unless such claims are based on a Party's gross negligence or willful misconduct. 9. Notices. All notices or other communication must be in writing and delivered by (a) personal delivery, (b) reputable overnight delivery service, or (c) facsimile or e-mail, confirmed under clause (a) or clause (b), and addressed in each case as set forth below: + + + + + + + + + + + + + + + + Cargill Confidential - 10 - * Confidential treatment requested + +If to Cargill: If to Bioamber: + +Cargill, Incorporated Bioamber S.A.S. Bio Technology Development Center 1250 Rene-Levesque West 15285 Minnetonka Blvd. Suite 4110 Minnetonka, Minnesota 55345 USA Montreal, Quebec Canada H3B 4W8 Fax: 952-742-0540 Fax: 514-844-1414 Attention: Pirkko Suominen Attention: Laurent Bernier + +With copy to: Cargill, Incorporated Law Department / Mailstop 24 15407 McGinty Road West Wayzata, Minnesota 55391 USA Fax: 952-742-6349 Attention: Bio TDC IP Lawyer + +With copy to: Boivin Desbiens Senécal, g.p. 2000-2000 McGill College Suite 2000 Montreal, QC, Canada H3A 3H3 Fax: 514-844-5836 Attention: Thomas Desbiens + +10. Term and Termination. + +10.1 This Development Agreement will begin on the Effective Date and continue for four (4) years unless earlier terminated pursuant to Section 10.2, or unless the parties extend the term by mutual written Development Agreement ("Term"). 10.2 Either Party may terminate this Development Agreement by giving written notice to the other Party, (a)in the event the other Party's bankruptcy, insolvency, or the filing of a petition therefore; and (b) the other Party materially defaults in the performance of its obligations hereunder. This Development Agreement shall also terminate upon mutual written agreement by the Parties. Further, in the event there is a dispute as to whether or not Cargill has missed a certain Milestone, then the Target Date for that Milestone shall be tolled until the Parties, acting in good faith, have settled such dispute in writing between themselves or through an independent expert. + +11. Independent Contractor. Nothing in this Development Agreement is to be construed to deem the relationship between the parties to be one of master/servant, principal/agent, or employer/employee. To the contrary, the relationship of Cargill to Bioamber is that of independent contractor, and Cargill will have no authority to (i) make any binding decision for, or on behalf of, Bioamber or (ii) commit Bioamber to any contract, obligation, debt, or other liability. None of Cargill's employees will be deemed to be employees of Bioamber. 12. Publicity. Any public statements related to work performed under this Development Agreement, including public statements related to the existence of this Development Agreement itself, will only be made after the prior written consent of both Parties concerning timing, content, and audience. + + + + + + + + + + + + + + + + + + + + + + + + Cargill Confidential - 11 - * Confidential treatment requested + +13. Miscellaneous. + +13.1 Third Party Patents. In addition to the WRF Patents as described more fully in Section 6, the CB1 Team of the Bio Technology Development Center of Cargill represents that, to the best of its knowledge as of the Effective Date, the patents and patent applications of third parties that could impact the Work Plan and the commercialization thereof are provided in Exhibit E ("Third Party Patents"). Cargill shall have no liability to Bioamber for Bioamber's acts or failure to act with respect to such Third Party Patents. The Parties shall meet regularly throughout the Term of this Development Agreement to determine whether or not licenses to Third Party Patents are needed to perform or continue to perform the Work Plan and the next steps if such licenses are needed. + +13.2 Governing Law. This Development Agreement shall be governed by and construed in accordance with the laws of the State of Minnesota, United States of America, disregarding its conflicts of law rules. + +13.3 Assignment. Neither Party shall assign this Development Agreement or the obligations contained herein without the express written consent of the other Party. + +13.4 Waiver. The failure of either Party to insist in any one or more instances upon performance of any terms or conditions of this Development Agreement, is not to be construed as a waiver of future performance of any such term, covenant, or condition, but the obligations of either Party with respect thereto will continue in full force and effect. No waiver will be effective unless in writing and signed by the waiving Party. + +13.5 Amendment. No amendment, modification, or waiver of the terms of this Development Agreement shall be binding unless placed in writing and duly executed by the Parties' authorized representatives. 13.6 Severability. All provisions contained herein are severable, and in the event any of them is held to be invalid by any competent court or arbitrator, this Development Agreement is to be interpreted as if such invalid provision were not contained herein. + +13.7 Survivability. Sections 4 (Confidentiality), 5 (Intellectual Property), 6 (WRF Patents), 7 (Warranties), 8 (Indemnification), 13.2 (Governing Law), and 13.7 (Survivability) will survive the expiration or earlier termination of this Development Agreement. + +13.8 Entire Agreement. This Development Agreement supersedes all previous understandings between Cargill and Bioamber concerning the subject matter of this Development Agreement, including but not limited to the Term Sheet executed by the Parties on December 3, 2009 and December 4, 2009, and the Mutual Confidentiality Agreement between the Parties which was effective July 17, 2009, and, together with its attachments, including the Commercial License Agreement attached hereto as Exhibit D executed concurrently with this Development Agreement, contains the entire agreement between the parties with respect to the subject matter hereof, and may not be amended, modified, or supplemented except in writing and signed by both Parties specifically referring to this Development Agreement and the Commercial License Agreement. + +13.9 Bioamber Non-Compete Commitment. Bioamber will not itself or with or through third parties engage in the development of biocatalysts other than E. coli for the production of succinic acid or salts thereof, except for the development activities under the terms and conditions of this Development Agreement. This obligation endures for the Term of this Development Agreement. Notwithstanding the above, Bioamber shall be permitted to evaluate other biocatalysts, but shall not undertake development of such biocatalysts. The purpose of such evaluations shall be to identify and eventually secure alternative technologies, in the event that the CB1 development program is not successful. As such, Bioamber shall cease within 30 days any further funding and development of a biocatalyst, including but not limited to the genetic modification or the optimization of fermentation conditions, when such biocatalyst has demonstrated the ability to produce succinic acid at a concentration above [***] grams per liter. This restriction shall apply to any succinic acid biocatalyst other than E. coli, be it a biocatalyst developed in-house, licensed-in, or under development at a third party lab that is funded by Bioamber or to which Bioamber has secured a future right or right of first refusal through direct payment, in kind contribution, grant, gift, differed payment or commitment to a future payment. + + + + + +The Parties, through their authorized representatives, hereby agree to the terms and conditions of this Development Agreement. + + Cargill Confidential - 12 - * Confidential treatment requested + +CARGILL, INCORPORATED Bio Technology Development Center BIOAMBER S.A.S. + +/s/ Jack Staboch /s/ Jean-François Huc Signature Signature + +VP BioTDC Director General Title Title + +4/16/10 April 15, 2010 Date Date + + + + + +Exhibit A Work Plan Milestones + +[***] + +MILESTONE 1 + +[***] Time to achieve: Month 12 + +MILESTONE 2 + +[***] Time to achieve: Month 30 + +MILESTONE 3 + +[***] Time to achieve: Month 42 Cargill Confidential - 13 - * Confidential treatment requested + + + + + +Exhibit B Cargill Patents and Patent Applications + + + + + + + + + + + + Cargill Confidential - 14 - * Confidential treatment requested + +Publication # Title Filing Date Expiration Date + +[***] + +Publication # Title Filing Date Expiration Date + +[***] + +Publication # Title Filing Date Expiration Date + +[***] + +Publication # Title Filing Date Expiration Date + +[***] + +Publication # Title Filing Date Expiration Date + +[***] + +Publication # Title Filing Date Expiration Date + +[***] + + + + + +Exhibit C Licensed Tool Kit + +Basic Package Content: + + + + + + + + + + + +Additional Fee Option Content: + + + + Cargill Confidential - 15 - * Confidential treatment requested + + • [***] • [***] • [***] • [***] • [***] + + • The price will be negotiated, but as of the Effective Date of this Agreement, the fair market value is base package price of US $[***] + + • Genome sequence of CB1, including assembly and annotations as is Cargill's state of the art at the time of the request. + + • The price will be negotiated, but as of the Effective Date of this Development Agreement, the fair market value is price of US $[***] + + + + + +EXHIBIT D + +COMMERCIAL LICENSE AGREEMENT Cargill Confidential - 16 - * Confidential treatment requested + + + + + +EXHIBIT E Third Party Patents relating to the Work Plan + +Third Party Patents relating to Modified Work Plan + + Cargill Confidential - 17 - * Confidential treatment requested + +Publication number and title Assignee [***] + +Publication number and title Assignee [***] + + + + + +EXHIBIT F Cargill's Guiding Principles + + + + + + + + + + + + + + + +Cargill's Compliance Policy on Intellectual Property + +[*** 2 pages omitted.] Cargill Confidential - 18 - * Confidential treatment requested + + • Cargill will comply with the laws of all countries to which it is subject. • Cargill will not knowingly assist any third party to violate any law of any country, by creating false documents or by any other means. • Cargill will not pay or receive bribes or participate in any other unethical, fraudulent, or corrupt practice. • Cargill will always honor all business obligations that it undertakes with absolute integrity. • Cargill will keep its business records in a manner that accurately reflects the true nature of its business transactions. + + • Cargill managers and supervisors will be responsible that employees, consultants and contract workers under their supervision are familiar with applicable laws and company policies and comply with them. Further, they will be responsible for preventing, detecting, and reporting any violations of law of Cargill policies. • Cargill employees will not become involved in situations that create a conflict of interest between the company and the employee. • Every year, all Cargill employees sign an agreement to live these principles. \ No newline at end of file diff --git a/full_contract_txt/BIOAMBERINC_04_10_2013-EX-10.34-DEVELOPMENT AGREEMENT - First Amendment.txt b/full_contract_txt/BIOAMBERINC_04_10_2013-EX-10.34-DEVELOPMENT AGREEMENT - First Amendment.txt new file mode 100644 index 0000000000000000000000000000000000000000..367f081e6622b04f6a3274494d1e10d8c66115f9 --- /dev/null +++ b/full_contract_txt/BIOAMBERINC_04_10_2013-EX-10.34-DEVELOPMENT AGREEMENT - First Amendment.txt @@ -0,0 +1,71 @@ +AMENDMENT 1 TO DEVELOPMENT AGREEMENT + +This is the First Amendment ("First Amendment") to the Development Agreement ("Development Agreement") entered into on April 15, 2010, by and between Cargill, Incorporated through its Bio Technology Development Center, having its principal place of business at 15407 McGinty Road West, Wayzata, Minnesota 55391 USA ("Cargill") and BioAmber S.A.S., having a place of business at Route de Bazancourt, F-51110, Pomacle France ("BioAmber"). This First Amendment will be effective as of July 5, 2011, upon the signature of both Cargill and BioAmber. + +Cargill and Bioamber mutually agree as follows: + + + +The Parties, through their authorized representatives, hereby agree to the terms and conditions of this First Amendment. + + Cargill Confidential * Confidential treatment requested + +1. Section 2.2 of the Development Agreement is hereby amended to allow Cargill at its sole discretion to apply [***] during the period of July 5, 2011, through September 30, 2011, to perform the Work Plan in addition to the [***] specified in the unamended Section 2.2. The terms for compensation and expenses for these additional FTEs will be as provided for the original FTEs in Section 2.2. + +2. Other than as expressly modified by this First Amendment, all terms and conditions of the Development Agreement continue without modification. + +CARGILL, INCORPORATED Bio Technology Development Center BIOAMBER S.A.S. + +/s/ Jack Staboch /s/ Jim Millis Signature Signature VP BioTDC CTO Title Title 7/14/11 7/18/11 + + + + + +AMENDMENTS TO COMMERCIAL LICENSE AGREEMENT AND DEVELOPMENT AGREEMENT + +WHEREAS, Cargill, Incorporated ("Cargill") and BioAmber S.A.S. ("Bioamber") entered into a Development Agreement having an Effective Date of April 15 , 2010, as amended on July 5 , 2011 (the "Development Agreement"); + +WHEREAS, Cargill and Bioamber entered into a Commercial License Agreement having an Effective Date of April 15, 2010 (the "Commercial License"); + +WHEREAS, Bioamber now desires to amend the Development Agreement to allow Bioamber to fund a research project being conducted by the Biotechnology Research Institute ("BRI"), which involves the molecular re-engineering of a Methylotroph owned by BRI and the development of a lab scale fermentation design for using the re-engineered Methylotroph to make succinic acid or salts thereof from a methanol feedstock (the "BRI Project"). The BRI Project will be co-funded by funds available from the Canadian National Research Council; + +WHEREAS, Bioamber further desires to scale-up the production of succinic acid using a Corynebacteria biocatalyst (MCC-17) available from Mitsubishi Chemical Corporation ("MCC") and to possibly produce succinic acid or salts using MCC-17 as an alternative to the E. coli BioAmber has licensed from the DOE at: (1) Bioamber's existing demonstration-scale succinic acid production facility located at Pomacle, France; and (2) a succinic acid production facility located at Sarnia, Ontario Canada having a maximum production capacity of 35,000 metric tons of succinic acid per year (the "Sarnia Plant"). Together these scale-up projects will be referred to as the "Scale-up and Production Project"; + +WHEREAS, Cargill is willing to allow Bioamber to fund the BRI Project and to conduct the Scale-up and Production Project, subject to the following terms and conditions. Now therefore the Parties agree: + +Amendment To the Development Agreement + +A. Section 13.9 of the Development Agreement is amended to add the following at the end of the Section: "Notwithstanding the above, Bioamber may fund the BRI Project up until the Methylotroph (or re-engineered Methylotroph) demonstrates the ability to produce succinic acid (or salts thereof) from any feedstock at a concentration of [***] grams/liter succinic acid (or salts thereof). Within thirty (30) days of the Methylotroph (or re-engineered Methylotroph) demonstrating such production levels of succinic acid, Bioamber will cease any further funding and/or other support for the BRI Project. Further Bioamber will require that any unexpended funds received from Bioamber be utilized for a project other than the BRI Project. B. New Section 13.10 is added to the Development Agreement as set forth below: "13.10 Notwithstanding the provisions of section 13.9, Bioamber may conduct the Scale-up and Production Project, subject to Bioamber hereby agreeing to convert the demonstration-scale Pomacle France succinic acid production facility and the Sarnia Plant to solely utilize CB1 as the biocatalyst for the production of succinic acid (and/or salts thereof). This conversion will be carried out according to the provisions of Section 5.9 of the Commercial License, it being understood that all economic obligations of item (iv) above will be relative to the E. coli strain technology, not the Mitsubishi strain technology. In order to enable such conversion, Bioamber will put in place agreements with the owners/operators of the Sarnia Plant that will enable Bioamber to require such conversion of the Sarnia Plant to solely use CB1 for the manufacture of succinic acid as described above." + +Amendment To the Commercial License + +A. Section 5.9 of the Commercial License is amended to add the following at the end of the Section: + +"Bioamber shall use best efforts to obtain regulatory approvals for the use of the CB1 Strain in all countries where Bioamber and/or a Bioamber licensee are using any strain other than the CB1 strain for the production of succinic acid and/or salts thereof. Additionally, Bioamber shall use best efforts to scale up the CB1 Strain and fermentation protocols utilizing the CB1 Strain." + +Nothing in these amendments will reduce Bioamber's obligations to replace MCC-17 and Bioamber's current E. coli strain with CB1 in all the existing and future succinic acid production facilities of Bioamber and Bioamber licensees, according to the provisions of Section 5.9 of the Commercial License. * Confidential treatment requested + +th th + + + + + + * Confidential treatment requested + +CARGILL, INCORPORATED + +By: /s/ Pirkko Suominen + + + +Name: Pirkko Suominen Title: Director, Bio Technology Development Center, Minneapolis Date: 10/19/2011 + +BIOAMBER, SAS + +By: /s/ Jean-François Huc + + + +Name: Jean-François Huc Title: President Date: October 15, 2011 \ No newline at end of file diff --git a/full_contract_txt/BIOCEPTINC_08_19_2013-EX-10-COLLABORATION AGREEMENT.txt b/full_contract_txt/BIOCEPTINC_08_19_2013-EX-10-COLLABORATION AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..bd9996064591f5e8a34afe3348ca9b42ceed8dba --- /dev/null +++ b/full_contract_txt/BIOCEPTINC_08_19_2013-EX-10-COLLABORATION AGREEMENT.txt @@ -0,0 +1,485 @@ +Exhibit 10.13 + +COLLABORATION AGREEMENT + +THIS COLLABORATION AGREEMENT (the "Agreement") is entered into as of November 2, 2012 (the "Effective Date") by and between BIOCEPT, INC., a California corporation having an address of 5810 Nancy Ridge Drive, Suite 150, San Diego, CA 92121 ("Biocept"), and LIFE TECHNOLOGIES CORPORATION, a Delaware corporation having an address of 5791 Van Allen Way, Carlsbad, California 92008 ("Life Technologies"). + +WHEREAS, Life Technologies, through its Medical Sciences Division, is engaged in the development and commercialization of diagnostic systems, tests and laboratory services, including in oncology; + +WHEREAS, Biocept has developed expertise and proprietary technology in enrichment, extraction and analysis of circulating tumor cells (CTCs) for use in laboratory developed tests used for the non-invasive and early stage detection and characterization of primary, metastatic or recurrent cancers; and + +WHEREAS, Life Technologies and Biocept desire to collaborate so that Biocept will develop and commercialize one or more Tests, as defined herein, for Non-Small Cell Lung Cancer (NSCLC), using their respective technologies and expertise, on the terms and subject to the conditions set forth herein. Life Technologies and Biocept will both promote the test and perform different components of the test, and Life Technologies will provide test results in the form of reports to physicians. + +NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants contained herein, and intending to be legally bound, the parties hereby agree as follows: 1. DEFINITIONS + +1.1 "Affiliate" shall mean any company or entity controlled by, controlling, or under common control with a party hereto and shall include any company more than 50% of whose voting stock or participating profit interest is owned or controlled, directly or indirectly, by a party, and any company which owns or controls, directly or indirectly, more than 50% of the voting stock of a party. + +1.2 "Assay" shall mean Biocept's OncoCEE-LU™ (and OncoCEE-LU™ with Mutation Analysis) laboratory developed assay for characterization and profiling of CTCs from NSCLC patients, which shall incorporate, as Phase 1, CTC enumeration by cytokeratin and CD45 (and CEE-Enhanced™ when available), EML4/Alk1 fusions and EGFR amplification by fluorescence in situ hybridization (determined by Biocept); and as Phase 2, the additional detection of mutations for relevant genes, e.g., K-RAS, EGFR and B-RAF, as agreed by the parties, on captured CTCs and/or cell-free circulating DNA, as agreed by the parties, and employing technologies that potentially may include Biocept's Selector technology, and any improvements or enhancements thereto, exclusive of new analytes (which are discussed in Section 3.5(f) under Collaboration Assays) or applications to primary screening. + + + + + +1.3 "Biocept Trademarks" shall mean Biocept, Inc., "OncoCEE-LU ", "OncoCEE™", "CEE-Sure ", CEE- Enhanced™", and/or such other trademarks and trade names owned or licensed, and used, by Biocept and/or its Affiliates in the Territory to identify the Tests, in each case, whether or not registered. + +1.4 "Life Technologies Trademarks," shall mean Life Technologies , Life Technologies Medical Sciences and/or such other trademarks and trade names owned or licensed and used by Life Technologies to identify the Tests, in each case, whether or not registered. + +1.5 "CLIA" shall mean the Clinical Laboratory Improvement Amendments of 1988, as it may be amended from time to time. + +1.6 "Collaboration" shall have the meaning provided Section 3.1. + +1.7 "Collaboration Assay(s)" shall have the meaning provided in Section 3.5(e). + +1.8 "CPT Code" shall mean the American Medical Association's ("AMA") "Current Procedural Terminology" as published in the AMA's CPT Process Manual, Fourth Edition and any such future editions, for procedures used in performance of the Assay, and amounts reimbursed by Medicare for such procedures for location 99, as modified annually. + +1.9 "Designated Executive Officer" shall mean the executive officers of each party designated in writing be each party as being responsible for resolving disputes related to the Collaboration, which shall initially be David Hale on behalf of Biocept and Ronnie Andrews on behalf of Life Technologies. + +1.10 "FDA" shall mean the United States Food and Drug Administration, or any successor federal agency thereto. + +1.11 "HIPAA" shall mean, collectively, the Health Insurance Portability and Accountability Act of 1996, as amended, and all regulations promulgated thereunder at 45 C.F.R. parts 160 through 164, and the Health Information Technology for Economic and Clinical Health Act of 2009 and related regulations and guidelines. + +1.12 "Intellectual Property Rights" means all now or hereafter existing patents, patent applications, copyrights, trademarks (including service marks), trade secrets, know-how, mask work rights and design rights, whether registered or unregistered, and all rights or forms of protection of a similar nature having equivalent or similar effect to any of the foregoing, which may subsist anywhere in the world. + +1.13 "Launch" shall mean formal commercial availability and offering to physicians of a Test, as mutually agreed upon by the parties. + +1.14 "Laws" shall mean all federal, state and local laws and regulations that apply to this Agreement including, without limitation, (i) the Bayh-Dole Act (ii) the + +2 + +TM TM + +TM + + + + + +Federal Food, Drug, and Cosmetic Act (21 U.S.C § 321 et seq.) (iii) the federal Anti-kickback Statute (42 U.S.C. § 1320a- 7b(b)) (iv) the Stark Law (42 U.S.C. § 1395nn) (v) the Anti-Inducement Law (42 U.S.C. § 1320a-7a(a)(5)) (vi) the civil False Claims Act (31 U.S.C. §§ 3729 et seq.) (vii) the administrative False Claims Law (42 U.S.C. § 1320a-7b(a)) (viii) the Health Insurance Portability and Accountability Act of 1996 (42 U.S.C. § 1320d et seq.), (ix) the exclusion laws (x) SSA § 1128 (42 U.S.C. § 1320a-7) (xi) Medicare (Title XVIII of the Social Security Act), (xii) Medicaid (Title XIX of the Social Security Act); (xiii) the Clinical Laboratory Improvements Act of 1988 (CLIA); and (xiv) data security, protection and privacy laws in the applicable jurisdictions. + +1.15 "Professional Component" shall mean the performance of the professional component of the steps of the Assay, which is the interpretation of results (generated in the Technical Component) of an Assay by a pathologist, and is covered by CPT codes from the Professional Fee Schedule with the modifier "26". + +1.16 "Technical Component" shall mean the performance of the technical component of the steps of the Assay, which is the physical performance of the Assay procedure up to the interpretation of results, and is covered by CPT codes from the Professional Fee Schedule without the modifier "26", and typically with a modifier "TC". + +1.17 "Term" shall have the meaning provided in Section 11.1. + +1.18 "Test(s)" shall mean the Assay, which is a laboratory developed test, and/or any Collaboration Assay which is added to this Agreement pursuant to Section 3.5(e), performed as a clinical reference laboratory test. + +1.19 "Territory" shall mean the United States of America, and other countries of the world, contingent in the latter case on the parties agreeing in writing on an appropriate strategy to access them in accordance with Section 3.2. + +1.20 "Third Party(ies)" shall mean any entity other than Biocept or Life Technologies or an Affiliate of Biocept or Life Technologies. 2. APPOINTMENT; LICENSES + +2.1 Appointment. Upon the terms and conditions set forth in this Agreement, Biocept hereby grants Life Technologies during the Term the non-exclusive right, as further defined in Section 2.3, to promote the Tests in the Territory and to perform the Professional Component of the Tests sold by the parties in the Territory, in accordance with the terms of this Agreement. + +2.2 Trademark Licenses. The parties hereby grant to each other non-exclusive, fully-paid, royalty-free licenses to utilize the other party's trademarks, as follows: + +(a) Biocept Trademarks. To facilitate the promotion and performance of Tests, during the Term Biocept hereby grants Life Technologies a non-exclusive, royalty-free, non-transferable license to use the Biocept Trademarks solely for + +3 + + + + + +use in connection with the promotion and performance of the Tests in the Territory. All materials associated with the Tests and used by Life Technologies in connection with the promotion of the Tests, including web-based, shall be co-branded with such Biocept Trademarks as approved by Biocept prior to distribution. All use of Biocept Trademarks by Life Technologies hereunder (including all goodwill arising as a result of such use) shall inure to the benefit of Biocept, and these rights, whether registered or not registered, at all times shall remain the sole property of Biocept. Biocept shall provide Life Technologies with copies of the Biocept Trademarks in an appropriate form for the uses contemplated in this Agreement. Life Technologies shall provide Biocept with samples of all proposed use of the Biocept Trademarks in advance of such proposed use and Biocept shall have the right to approve the appearance and placement of Biocept Trademarks by Life Technologies for the purpose of protecting and maintaining the standards of quality maintained by Biocept for products sold under the Biocept Trademarks and for use of the Biocept Trademarks. If Biocept at any time finds that Life Technologies is not in compliance with this Section, then Biocept may notify Life Technologies in writing of such deficiencies, and if Life Technologies fails to correct such deficiencies within thirty (30) days after receipt of such notice, Biocept may, at its election and in addition to any other remedies, terminate the license granted to Life Technologies with respect to the Biocept Trademarks. Life Technologies shall display the ™ or symbol, as directed by Biocept, in connection with Life Technologies' use of the Biocept Trademarks. + +(b) Life Technologies Trademarks. To facilitate the promotion and performance of Tests, during the Term Life Technologies hereby grants Biocept a non-exclusive, royalty-free, non-transferable license to use the Life Technologies Trademarks solely for use in connection with the promotion and performance of the Tests in the Territory. Materials associated with the Tests and used by Biocept in connection with the promotion of Tests, including web-based materials, may be co-branded with such Life Technologies Trademarks as approved by the parties prior to distribution. All use of Life Technologies Trademarks by Biocept hereunder including all goodwill arising as a result of such use) shall inure to the benefit of Life Technologies, and these rights, whether registered or not registered, at all times shall remain the sole property of Life Technologies. Life Technologies shall provide Biocept with copies of the Life Technologies Trademarks in an appropriate form for the uses contemplated in this Agreement. Biocept shall provide Life Technologies with samples of all proposed use of the Life Technologies Trademarks in advance of such proposed use and Life Technologies shall have the right to approve the appearance and placement of Life Technologies Trademarks by Biocept for the purpose of protecting and maintaining the standards of quality maintained by Life Technologies for products sold under the Life Technologies Trademarks and for use of the Life Technologies Trademarks. If Life Technologies at any time finds that Biocept is not in compliance with this Section, then Life Technologies may notify Biocept in writing of such deficiencies, and if Biocept fails to correct such deficiencies within thirty (30) days after receipt of such notice, Life Technologies may, at its election and in addition to any other remedies, terminate the license granted to Biocept with respect to the Life Technologies Trademarks. Biocept shall display the ™ or symbol, as directed by Life Technologies, in connection with Biocept's use of the Life Technologies Trademarks. + +4 + +® + +® + + + + + +2.3 Exclusivity. During the Term, the parties will promote and perform Tests for the clinical testing market on a non- exclusive basis in the Territory, except as otherwise provided for below. Biocept will have sole responsibility for performing the Technical Component of all Tests sold by the parties, until and unless Life Technologies obtains the right from Biocept to independently develop its own Tests in accordance with all applicable FDA regulatory requirements, as provided for in Section 7.1. Life Technologies will be authorized to perform the Professional Component of all Tests sold by the parties, although Biocept may engage other groups in promotion, marketing and performance arrangements for the Tests, at the discretion of Biocept. Biocept shall provide thirty (30) days written notice to Life Technologies before entering into any such promotion, marketing and performance arrangement. 3. COLLABORATION + +3.1 Purpose. During the Term, the parties agree to cooperate and collaborate to develop, promote and commercialize the Tests for the clinical testing market in the Territory and in accordance with the terms of this Agreement (the "Collaboration"). The principal objective of the parties hereunder is to maximize the commercialization of the Tests in the Territory. The parties shall deploy each of their respective sales forces in accordance with the terms of this Agreement in an effort to promote the Tests in the Territory in the manner as agreed to by the parties, under the direction of the Joint Steering Committee. + +3.2 Commercialization of Tests Outside the USA. At any time for up to two (2) years after the Effective Date, should Life Technologies desire to offer for sale any Test outside the USA, it shall first discuss with Biocept an appropriate strategy and plan for such effort. Such strategy and plan may involve the development of, and obtaining all applicable regulatory authorizations for, an in vitro diagnostic kit, instruments or similar systems, in collaboration with Biocept (with funding support, and more fully described in Section 7.2), such strategy and plan to be reduced to writing and approved by the parties. If such written plan is not approved by the parties within two (2) years of the Effective Date, the Territory shall revert to only the USA, unless otherwise agreed to by the parties. + +3.3 Life Technologies Responsibilities. Life Technologies shall use commercially reasonable efforts to promote the Tests in the Territory, in accordance with Section 3.2, using sales channels and methods, and adhering to substantially similar standards that it generally employs with respect to its laboratory developed tests. Without limiting the foregoing, Life Technologies' responsibilities with respect to marketing and promotion of the Tests in the Territory during the Term shall include the following: + +(a) Life Technologies Customers. Life Technologies shall use commercially reasonable efforts to promote the Tests to the appropriate healthcare professionals. + +5 + + + + + +(b) Test Performance. Life Technologies shall have the responsibility, subject to its capacity to support in its reasonable discretion (of which capacity Life Technologies shall notify Biocept in writing at least sixty (60) days before launch of the Assay, and use diligent efforts to notify Biocept at least thirty (30) days before discovery of any decreases or increases in such capacity), for performing the Professional Component of the Assays sold by either party in the Territory. In particular, the laboratory director of the Life Technologies CLIA laboratory will be responsible for issuing and signing off on the report. + +(c) Sales, Marketing and Customer Service. + +(i) Life Technologies shall, at its sole expense and in accordance with Section 2.2, develop and deliver to customers marketing materials for the Tests. Life Technologies shall use, as appropriate, Biocept's "OncoCEE-LU ", OncoCEE™", "CEE-Enhanced™" and "CEE-Sure" brand and the Biocept corporate name and logo, together with any Life Technologies branding, as part of the marketing materials for the marketing of the Tests and, where appropriate, in its other public presentations and disclosures concerning the Assay or Tests. Biocept shall have the right to review all such materials prior to their initial use. + +(ii) Life Technologies shall cause its sales force to use commercially reasonable efforts to promote the Tests. + +(iii) Life Technologies shall use commercially reasonable efforts to promote the sale of the Tests by including the Tests in its menu of services and by incorporating marketing materials regarding the Tests into its own marketing materials. + +(iv) Life Technologies shall keep Biocept reasonably informed of its planned marketing activities with respect to the Tests to allow Biocept to forecast its needs for reagents, equipment, laboratory space, personnel, computing, and testing reporting capabilities, including at each Joint Steering Committee meeting as indicated in Section 4, and will discuss and consider in good faith Biocept's suggestions for marketing the Tests. + +(v) Life Technologies will provide customer service and support for the Professional Component of the Tests using substantially similar methods and adhering to substantially similar standards that it generally employs with respect to its other products and tests. + +(d) Samples and Logistics. + +(i) Life Technologies will be responsible for the logistics associated with its marketing efforts and performance of the Professional Components of the Tests; provided, however, that Biocept will send the sample collection systems directly to customers identified by Life Technologies who order the Test, at Life Technologies' expense. Biocept will further work with Life Technologies to facilitate transport of collected samples from the customer to Biocept's CLIA laboratory. Life + +6 + +TM + +TM + + + + + +Technologies will work collaboratively with Biocept on patient referral, billing and collections in accordance with Section 3.5(c) (iii), reporting of results and reporting quality control, and insurance or patient reimbursement. + +(e) Demand Forecast. Within sixty (60) days of the Effective Date, Life Technologies will prepare a draft one-year rolling forecast of Life Technologies' expectation for physician requests for the Assay (the "Demand Forecast"), broken down into quarterly demand for the Assay (with respect to each quarter, the "Quarterly Forecast") which will be attached hereto as Exhibit A, and will be finalized three (3) months before Launch. Beginning on the first day of the second (2 ) full calendar quarter following the date of Launch, the Demand Forecast shall be updated on a quarterly basis. The Demand Forecast and Quarterly Forecasts shall be a good faith but non-binding forecast. In the event the parties develop a Collaboration Assay under the terms of this Agreement, demand for such Collaboration Assay shall be included in the Demand Forecast at all times following the Launch of such Collaboration Assay. A Performance Standard, mutually agreed to in accordance with Section 3.5(i), shall take effect beginning with the second (2 ) full calendar quarter after the launch of any Test. + +(f) Technical Developments. Life Technologies shall keep Biocept fully informed as to all discoveries and technical developments (including, without limitations, any inventions) made by Life Technologies during the Term related to the Assay or Tests. + +(g) Billing, Reporting, Auditing. + +(i) In all cases where Life Technologies performs the Professional Component of the Assay, Life Technologies shall be responsible for billing the patient, the provider and/or the payer for the Test, including both the Technical Component and the Professional Component of the Assay, and the collection of such amounts with respect to each Test performed. Biocept shall bill Life Technologies directly once a month for the Technical Component of each Assay (including the cost for sample collection in accordance with Section 3.5(b)), based on pricing and reimbursement as agreed by the parties through the Joint Steering Committee within sixty (60) days of the Effective Date, generally based on each applicable CPT Code actually used in the performance of such Technical Component, employing the Medicare rates for the applicable year as described on Exhibit B for the initial one (1) year period, and Life Technologies shall pay Biocept within sixty (60) days following the invoice date. The parties shall disclose actual reimbursement for each Test, and shall reconcile or "true-up" any differences between the amounts actually received by Life Technologies for each billing item or code and amounts paid to Biocept on a quarterly basis. If the allocation of reimbursement is ambiguous with respect to billing codes or a Technical Component/Professional Component split, amounts received by Life Technologies that differ from the amounts agreed by the parties, or Medicare rates, shall be shared by the parties on the same ratio as the Technical Component/Professional Component ratio for Medicare. The Medicare rates used by the parties as the basis for determining the amount Life Technologies will pay Biocept for the Technical Component of the Assay before the quarterly true-up will be adjusted annually at the beginning of the calendar year to reflect + +7 + +nd + +nd + + + + + +changes to such Medicare rates. Should Medicare change the basis for reimbursement of the Assay, the parties shall agree to negotiate a structure for revenue sharing that generally accomplishes the result achieved above. Both parties agree to strictly adhere to all applicable Laws with respect to billing practices. + +(ii) This Section 3.3(g) shall survive any termination or expiration of this Agreement for at least twelve (12) months following the effective date of such termination or expiration. + +3.4 Biocept Responsibilities. Biocept shall use commercially reasonable efforts to promote the sale of the Tests in the Territory, using at least the same sales channels and methods and adhering to at least the same standards that it generally employs with respect to its other clinical tests. Without limiting the foregoing, Biocept's responsibilities during the Term shall include the following: + +(a) Biocept Customers. Biocept shall use commercially reasonable efforts to promote the Tests to appropriate healthcare professionals. + +(b) Assay Performance. Biocept shall be responsible for performing all Technical Components of all Assays sold by either party unless and until the parties agree to enable Life Technologies to independently develop, validate and perform the Test at Life Technologies' CLIA laboratory, in accordance with all applicable FDA regulatory requirements and Section 7.1. Until such point of transfer, Biocept shall comply with all CLIA requirements, including validation of the Assay. + +(c) Sales, Marketing and Customer Service. + +(i) Biocept shall cause its sales force to promote the Assay. + +(ii) Biocept shall keep Life Technologies reasonably informed of its planned marketing activities with respect to the Assay to allow Life Technologies to forecast its needs for equipment, space, personnel, computing, and test reporting capabilities, including at each Joint Steering Committee meeting as indicated in Section 4, and will discuss and consider in good faith Life Technologies' suggestions for marketing the Assay. + +(iii) Biocept will provide customer service and support for the Assay using substantially similar methods and adhering to substantially similar standards that it generally employs with respect to its other tests. + +(d) Samples and Logistics. Biocept will be responsible for the logistics associated with its own marketing efforts and performance of the Technical Component of the Assay, including distribution of shipping materials and sample collection systems by its sales representatives, patient referral and customer service. + +8 + + + + + +(e) Training and Education. + +(i) Biocept shall provide sales and technical training and technical support, including assistance with customer education and customer consultations, to Life Technologies' personnel, with the frequency and content of the training to be determined by agreement between Biocept and Life Technologies. + +(ii) Biocept will share its service educational materials and scientific publications to utilize in patient education with Life Technologies, and hereby grants Life Technologies rights to use such materials as are reasonably necessary for Life Technologies to carry out its obligations under this Agreement. Life Technologies may not alter or revise these materials without the prior written consent of Biocept. + +(f) Regulatory Approval. Biocept has licenses enabling it to perform and obtain reimbursement for the Assay in all states in the Territory except New York, where it is currently seeking such license. Biocept will maintain all such licenses which are reasonably required to perform the Assay during the Term. For any Collaboration Assay, Biocept will use commercially reasonable efforts to obtain or maintain licenses enabling it to perform such Collaboration Assay and obtain reimbursement therefore, in accordance with each amendment to this Agreement entered in accordance with Section 3.5(f). Life Technologies will cooperate with Biocept so that Life Technologies' marketing and sales efforts are conducted only in those states or regions of the Territory in which Biocept has obtained any necessary regulatory licenses to provide Tests. + +(g) Technical Developments. Biocept shall keep Life Technologies fully informed as to all discoveries and technical developments (including, without limitations, any inventions) made by Biocept during the Term related to the Tests. + +3.5 Joint Responsibilities. The parties shall use commercially reasonable efforts to cooperate and collaborate to develop the market for the Tests in the Territory. Without limiting the generality of the foregoing, the parties shall collaborate to provide the following: + +(a) Test Development. The parties shall mutually agree on the content and composition of Phase II of the Assay, and any Collaboration Assays as defined in Section 3.5(f), including specific analytes to be included in the Assay. Consideration for selection of analytes shall include medical need, clinical utility, technical feasibility, costs, reimbursement, and intellectual property status, e.g., the need for Third Party licenses to specific analytes. The parties shall agree on the Phase II Assay content at least six (6) months before anticipated Launch. + +(b) Test Materials and Shipping. Subject to Section 3.3(c)(i), Life Technologies shall design and order all test materials, including test requisition forms, test reports and collateral sales and marketing (advertising and promotional) materials to be used by Life Technologies, which shall be approved by Biocept prior to use. Biocept shall design, order and provide to Life Technologies the collection systems to be used by Life Technologies, and Life Technologies shall pay for such collection systems used by + +9 + + + + + +its sales representatives under this Agreement at cost (direct materials and direct labor) plus ten percent (10%), as well as shipping costs of collection systems from ordering physicians to Biocept. + +(c) Performance of Tests. + +(i) The parties will work together to develop a plan to implement detailed operation protocols for the Test within ninety (90) days of the Effective Date for each aspect of sample logistics, including ordering, shipping, accessioning, sample handling, testing, data generation, data evaluation and reporting. These sample logistics shall be agreed upon by the parties through the Joint Steering Committee and, once agreed upon by the parties in writing, deemed to be attached hereto as Exhibit C without any additional action required on the part of either party. Information, data and images shall be transferred between the parties as indicated for this purpose, and the parties will seek to make their respective laboratory information management systems and data transfer capabilities compatible. Life Technologies' lab director at the CLIA lab will sign off on the reports for Tests. + +(ii) If Life Technologies desires to utilize the Tests in support of any clinical trial or research program for a pharmaceutical or biotechnology company(ies) in the Territory, Life Technologies shall notify Biocept in writing of such desired use. The terms and conditions (including pricing and revenue sharing) of each such use shall be covered by a separate written agreement which the parties agree to negotiate in good faith. + +(iii) Each party will use commercially reasonable efforts to support the other in the account to best meet the needs and expectations of each customer. + +(d) Communication Plan. Life Technologies and Biocept shall develop a communications plan through the Joint Steering Committee for the announcement and ongoing promotion of the Tests to customers, with all communication plan materials, including test requisition forms, being co-branded with Biocept and Life Technologies corporate names and logos in accordance with Sections 2.2 and 3.3(c)(i). + +(e) Data Sharing. Life Technologies and Biocept have entered into this Agreement to, among other things, establish individual databases of results from the Tests performed, which databases will include patient information such as demographic, disease characterization, treatment and outcome information. To that end, to the extent permitted by applicable law and as mutually agreed by the parties, where available each party will share all patient data, Test data and results, and corresponding tissue data with the other party, as well as any follow up or outcome data that may become available or provided by the physician or patient for Tests performed and will cooperate in good faith with the other party to agree upon procedures for sharing such information. Such information may be used only for longitudinal reporting, outcomes correlation and related research, shall be handled in accordance with all applicable Laws, including, without limitation, HIPAA, and applicable institutional review board guidelines, and shall not be used for the purpose of obtaining information about the other party's clients or customers. To the extent feasible, all such information will be properly de-identified. + +10 + + + + + +(f) Collaboration Assays. During the Term, Biocept shall keep Life Technologies reasonably apprised of its plans to add analytes to the Assay. In addition, Life Technologies may desire for Biocept to develop a specific new analytes for the Assay (for example, the inclusion of additional mutations to the mutation analysis component of the Assay), to be offered by the parties as an additional Test under this Agreement. In either case, the parties shall negotiate in good faith an amendment to this Agreement that will govern the development (as needed) and commercialization of such Tests with new analytes (each a "Collaboration Assay"), which amendment may include financial support, contributions of and access to each party's technology and/or clinical samples, milestones, timing of the development effort, exclusivity and ownership rights. Any such agreed upon Collaboration Assay development shall be performed by Biocept or jointly as the parties may agree. Once the parties have agreed upon a plan relating to the development of a particular Collaboration Assay, if development is needed (each, a "Project"), the parties shall reduce such agreement to writing, which shall include a project plan which will set forth each party's obligations with respect to the Project (each, a "Project Plan") and thereafter, such Collaboration Assay shall be deemed a Test for all purposes under this Agreement and shall be subject to the terms of this Agreement as amended. Each such Project Plan shall be attached as a part of Exhibit D to this Agreement following written acceptance thereof by both parties without any additional action required on the part of either party. Any amendments or revisions to a Project Plan shall be mutually agreed upon by the parties in writing. + +(g) Costs and Expenses. Unless otherwise specified herein or in a Project Plan attached hereto, each party shall perform its activities under this Agreement at its sole cost and expense. + +(h) Training and Education. + +(i) The parties shall work together to develop and implement a training program for client services and the sales and marketing representatives of each party to ensure that a clear and consistent message is delivered to all prospective customers. Following such implementation, each party agrees to train its client services and sales and marketing representatives in accordance with such training program. + +(ii) Representatives of each party, where deployed, shall each educate physicians, clinical and support personnel on the Tests, their applications and benefits, and the procedures for providing samples for the Tests. The Joint Steering Committee will approve all presentation and meeting materials. In addition, the parties will each be responsible for providing customer support related to test logistics, billing and reimbursement, and for establishing a call center to handle inquiries related to the Tests. For purposes of clarity, the parties acknowledge and agree that Life Technologies will not be required to establish a dedicated web portal, but all results of Tests will be made available through an existing Life Technologies portal solution, once commercially available for use, as determined by Life Technologies at its sole discretion. Technical or + +11 + + + + + +process questions regarding the Tests received by Life Technologies can be referred to Biocept. Each party will cover its own costs related to physician education, customer support, and any travel related thereto and comply with all federal and state regulations regarding the same. + +(i) Performance Standards. Each party shall conduct its activities under this Agreement and any Project Plan in a professional and workmanlike manner, and in compliance in all material respects with the requirements of applicable Laws and regulations, to attempt to achieve the objectives of this Agreement efficiently and expeditiously. Each party shall contribute such personnel and resources, and shall maintain such laboratories and other facilities, as are reasonably necessary to carry out the activities to be performed under this Agreement, including any Project Plans. In conformity with standard industry practices and the terms and conditions of this Agreement, each party shall prepare and maintain, or shall cause to be prepared and maintained, complete and accurate written records, accounts, notes, reports and data with respect to activities conducted by such party under this Agreement, including any Project Plans. In addition, the parties shall work together to establish minimum agreed upon performance standards with respect to the promotion, sales and performance of the Tests, including the Demand Forecast, and the timely supply, accuracy, reliability and reporting of the Tests, as well as responsiveness to customer inquiries related to the Tests throughout the Territory (collectively, "Performance Standards"). In the event that one or more Performance Standards are not met by a party, the parties will work quickly and efficiently to (i) identify the cause of the failure, (ii) develop a plan to remediate the issue, and (iii) implement the remediation plan. If the parties are unable to successfully resolve a Performance Standards issue by this procedure, such failure to maintain Performance Standards shall constitute a material breach by the party failing to maintain such Performance Standards, and the other party may terminate this Agreement in accordance with Section 11.2. + +(j) Bundling. Neither party shall bundle its assays (including the Tests) with any assays of the other party, without the prior written approval of that party. 4. JOINT STEERING COMMITTEE + +4.1 Purpose and Membership. Promptly following the Effective Date, Biocept and Life Technologies will create a Joint Steering Committee for the purpose of facilitating communications between the parties regarding, and providing direction and leadership to, the Collaboration. The Joint Steering Committee shall be composed of six (6) representatives, three (3) each from Biocept and Life Technologies, each of whom shall have appropriate experience, knowledge and authority within such party's organization to carry out the duties and obligations of the Joint Steering Committee. Each party will designate one of its representatives as the primary contact for that party with respect to Joint Steering Committee-related matters, and such representatives shall serve as co-chairpersons of the Joint Steering Committee. Each party may change its representatives to the Joint Steering Committee or its primary contact from time to time in its sole discretion, effective upon notice to the other party of such change. These representatives shall have appropriate technical credentials, experience and knowledge. A reasonable number of additional representatives of a party may attend meetings of the Joint Steering Committee in a non-voting capacity. + +12 + + + + + +4.2 Duties. The Joint Steering Committee shall meet in person or by teleconference or videoconference no less than monthly during the Term or as otherwise mutually agreed by the parties from time to time, with attendees other than Joint Steering Committee members permitted to participate in or observe the meetings. The Joint Steering Committee shall be responsible for (a) monitoring the progress of the Collaboration, including discussions relating to Collaboration Assays, (b) physician education with respect to the Tests, (c) marketing, sales and account coordination, (d) any regulatory inquiries or requirements and other issues that affect the availability of the Tests, and (e) reimbursement issues (including annual review of relevant CPT Codes and changes thereto), logistical considerations, and other topics as necessary. The Joint Steering Committee shall serve as the principal forum for each party to (i) keep the other party informed of the results of its Collaboration activities; (ii) to discuss Test commercialization strategies, and (iii) generally to encourage and facilitate ongoing cooperation between the parties with respect to the Collaboration, including the business relationship and/or any other matter relating to the Collaboration and resolving disputes between the parties with respect to Intellectual Property Rights; provided, however, that (A) nothing in this Agreement shall limit either party's right to seek immediate equitable or injunctive relief where appropriate without any obligation to first submit the dispute to the Joint Steering Committee; and (B) any decision concerning medical necessity and patient care with respect to Test sold by or performed on behalf of the parties shall be the responsibility of each party's Medical Director, with the two Medical Directors working together to coordinate efforts and address concerns. + +4.3 Decisions; Disputes. Decisions of the Joint Steering Committee shall be made by unanimous vote, with each party's representatives on the Joint Steering Committee collectively having one vote. In the event that the Joint Steering Committee cannot or does not, after good faith efforts, reach agreement on an issue, such issue shall first be referred to the Designated Executive Officers, who shall meet promptly thereafter and shall attempt in good faith to resolve such issue. In the event that the Designated Executive Officers cannot or do not, after good faith efforts, reach agreement on an issue, the issue shall be submitted to voluntary mediation. The Designated Executive Officers of each party shall select a mediator who is an expert with no less than seven years of experience in the subject matter to which the dispute relates. In the event that the Designated Executive Officers of the parties are unable to agree upon a mediator within twenty (20) days, then the Designated Executive Officers shall contact the San Diego County office of JAMS to select a mediator from the JAMS panel. If they are unable to agree, JAMS shall provide a list of three available mediators and each party may strike one. The remaining one will serve as the mediator. The mediation shall be conducted under JAMS rules. The parties agree that they shall share equally the cost of the mediation filing and hearing fees, and the cost of the mediators that constitute the panel. Each party shall bear its own attorneys' and expert fees and all associated costs and expenses. + +13 + + + + + +5. REGULATORY COMPLIANCE + +5.1 Compliance with Laws. Biocept and Life Technologies and their respective Affiliates each agree to perform their respective obligations under this Agreement in compliance with all applicable Laws, in the Territory, including but not limited to applicable regulations, rules, and policies of third party payers that pay for the Assay. + +5.2 Privacy. Biocept and Life Technologies and their respective Affiliates agree to protect the privacy and provide for the security of any information that relates to a patient's past, present, or future physical or mental health or condition in accordance with HIPAA, and any other applicable federal and state privacy laws and regulations in the Territory. Each party agrees to execute one or more Business Associate Agreements (as defined under HIPAA) as the other party, or its providers or payers, may from time to time request. + +5.3 Licenses and Certifications. Biocept and, to the extent applicable, Life Technologies shall have at all times during the Term, all necessary federal, state and local licenses, qualifications and certifications to operate a laboratory and perform their respective components of the Test(s), including, but not limited to, state laboratory licenses, CLIA certification, CAP (College of American Pathologists) certification, FDA registration, and any other licenses or certification required by state and/or federal law. All Assays performed by Biocept, and, to the extent applicable, Life Technologies, shall be in accordance with applicable state and federal testing requirements for clinical reference laboratories. 6. MATERIALS TRANSFER + +In order to facilitate the Collaboration, either party may provide to the other party certain biological materials or chemical compounds including, but not limited to, samples (collectively, "Materials") for use by the other party in furtherance of the Collaboration. Except as expressly provided under this Agreement, all such Materials delivered to the other party will remain the sole property of the supplying party, will be used only in furtherance of the Collaboration and solely under the control of the other party, will not be used or delivered to or for the benefit of any Third Party without the prior written consent of the supplying party, and will not be used in research or testing involving human subjects except as permitted by applicable law. The Materials supplied hereunder must be used with prudence and appropriate caution in any experimental work and in accordance with all applicable laws. 7. OPTIONS AND FUTURE DISCUSSIONS + +7.1 Option to License Assay. If Biocept does not obtain at least ten million dollars ($10,000,000) in equity financing by December 31, 2012, then Life Technologies shall have the non-exclusive option, exercisable by written notice to Biocept given no later than January 15, 2013, to negotiate with Biocept for a license (unless the parties mutually agree to a different transaction structure) to all necessary Intellectual Property + +14 + + + + + +Rights and know-how to independently commercialize the Assay in accordance with applicable Laws. Biocept will provide notice to Life Technologies on December 31, 2012 if the conditions for the option apply, and if Life Technologies delivers written notice of exercise of such right of negotiation to Biocept on or before January 15, 2013, the parties will negotiate in good faith to conclude a license agreement no later than February 28, 2013. If such license has not been entered into by the parties by February 28, 2013, there are no further obligations for either party under this Section 7.1. + +7.2 Option for System Development. The parties have discussed potential adaptation of the Assay to an in vitro diagnostic format, based on a "system" concept that could include specially manufactured equipment, consumables and reagents that would be sold to physicians and laboratories, and linked to the "informatics engine" that Life Technologies is developing. Such systems may be used to commercialize the Assay outside the USA. Biocept grants to Life Technologies a non-exclusive option, exercisable during the two (2) year period beginning on the Effective Date, to develop plans, and negotiate with Biocept, for the co-development with Biocept of such systems for the Assay, employing or based on Biocept technologies. Such agreement is expected to include some or all of the following components: an upfront license fee, R&D funding, development and commercial milestone payments, royalties and/or revenue sharing, and supply/sale to Life Technologies by Biocept of proprietary components and consumables. 8. INTELLECTUAL PROPERTY + +8.1 Existing Technology. Each party acknowledges that the other party owns certain technology and Intellectual Property Rights which have been independently developed by, or at the request of, such other party, whether prior to, during or subsequent to the Term. Except as expressly provided in this Agreement, neither this Agreement nor the activities performed hereunder, shall give either party any rights or interest in or to the technology or Intellectual Property Rights of the other party (or of any Materials provided by such party). Each party owns, and shall continue to own, all right, title and interest in and to its respective technology, including, without limitation, all Intellectual Property Rights relating thereto. Without limiting the generality of the foregoing, at all times during and after the Term, Biocept shall own all rights to its CEE™ technology, Selector technology (if utilized) and any improvements related thereto, generated during the performance of this Agreement. Biocept and Life Technologies shall promptly notify the other in writing upon becoming aware of any alleged or threatened third party infringement of any Intellectual Property Rights related to the Tests. Biocept shall have the right to bring and control any action or proceeding with respect to any such infringement at its own expense and by counsel of its own choice. If Biocept elects not to bring any such action or proceeding with respect to such infringement, it shall promptly notify Life Technologies of the same and agrees to consider, in good faith a request by Life Technologies to bring any such action or proceeding. Any agreement allowing Life Technologies to bring such action or proceeding on behalf of Biocept shall be set forth in a separate written agreement between the parties. Except as expressly provided above, the parties shall be under no obligation to enforce any of their Intellectual Property Rights against any actual or threatened Third Party infringements. + +15 + + + + + +8.2 Biocept Technology. Without limiting the generality of the foregoing, Biocept owns, and Life Technologies acknowledges Biocept's ownership of, (i) the Assay and the Selector technology, and (ii) all Intellectual Property Rights in the Assay and the Selector technology, and Life Technologies agrees that it shall not do or suffer to be done any act or thing or undertake any action anywhere that in any manner might infringe, or impair the validity, scope, or title of Biocept in the Assay, the Selector technology or Intellectual Property Rights owned by Biocept. Nothing herein shall limit Life Technologies' ability to prosecute fully any and all Intellectual Property Rights owned by Life Technologies with any patent office or related government agency or to respond fully to any government agency inquiry with respect to its Intellectual Property Rights, products, and services. + +8.3 New Technology. In the course of the activities conducted by the parties, Biocept and/or Life Technologies may conceive of inventions or discoveries or create works that constitute intellectual property and may be patentable or registerable as a copyright or other intellectual property right (all of the foregoing, including such intellectual property rights therein, collectively, "Developments"). Inventorship of all inventions and discoveries, whether or not patentable, will be determined in accordance with United States patent laws. Authorship of all copyrightable works will be determined in accordance with United States copyright laws. Subject to Section 8.2, as between the parties, Developments will be owned consistent with such determination of inventorship or authorship. To the extent any Development owned by Life Technologies relates directly to the practice of, or constitutes an improvement to, the Assay, Life Technologies hereby grants to Biocept, during the Term of this Agreement, and, except in the case of termination of this Agreement by Life Technologies for Biocept's uncured material breach, after expiration or termination of this Agreement, a non-exclusive, worldwide, royalty-free, fully-paid license, including the right to sublicense, under Life Technologies' Intellectual Property Rights in such Developments, solely to develop, make, have made, use, sell, have sold, offer for sale, import, perform and provide the Assay. To the extent any Development owned by Biocept relates directly to the practice of, or constitutes an improvement to, the Assay, Biocept hereby grants to Life Technologies, during the Term of this Agreement, a non-exclusive license under Biocept's Intellectual Property Rights in such Development, solely to promote the Assay in the Territory and to perform the Professional Component of the Assay sold by the parties in the Territory, in accordance with the terms of this Agreement. + +8.4 Technology Licenses. To the extent that any Third Party Intellectual Property Rights related to the capture and detection of CTCs must be licensed to perform the Assay, such royalty shall be paid by Biocept. To the extent that either party owns Intellectual Property Rights to specific biomarkers, targets, kits, dyes or technology utilized in the Assay other than for the capture and detection of CTCs, it will, to the extent it is able, grant during the Term of the Agreement, a non-exclusive license to the other party to practice these Intellectual Property Rights for the Assay. To the extent that either party has licensed or will license Intellectual Property Rights from Third Parties related to specific biomarkers, targets, kits, dyes or technology utilized in the Assay other than for the capture and detection of CTCs, it will, to the extent it is able, grant, during the Term of the Agreement, a non-exclusive license to the other party, or ensure that the + +16 + + + + + +other party is covered under its license, to practice these Intellectual Property Rights for the Assay. In the event of the foregoing, then, subject to Section 8.5, the parties agree to negotiate in good faith an allocation of expenses for such Third Party licenses directly associated with the Assay. + +8.5 Infringement. If any Third Party claims or brings an action alleging that performance of the Assay or Test by Biocept or Life Technologies or their Affiliates under this Agreement infringe (directly or indirectly) any of such Third Party's patent rights, Biocept shall use commercially reasonable efforts to address such claims. If Biocept determines to seek a license or otherwise obtain the right to use such Third Party intellectual property rights on behalf of Biocept and Life Technologies, then (i) if the Third Party intellectual property rights relate to the capture and detection of CTCs or the Phase I Assay analytes, then Biocept shall bear the costs of such licenses, including the payment of licensing fees, royalties or other payments, or (ii) if the Third Party intellectual property rights relate to specific biomarkers, targets, kits, dyes or technologies for the Phase II Assay, then the parties agree to negotiate in good faith an allocation of costs for such licenses, including payment of licensing fees, royalties or other payments that may be due to such Third Party, unless the parties agree otherwise in writing. If Biocept and Life Technologies determine to seek a license or otherwise obtain rights to use Third Party intellectual property rights for any Collaboration Assay(s), the parties similarly agree to negotiate in good faith an allocation of costs for such licenses, including payment of licensing fees, royalties or other payments that may be due to such Third Party, unless the parties agree otherwise in writing. + +8.6 Data and Results. All data and results from performance of a Test on samples provided by Life Technologies shall be used by the parties solely to the extent necessary to perform its obligations under this Agreement and in accordance with Section 3.5(d). + +8.7 Trademarks. + +(a) Biocept shall be responsible for and bear the expense of any filing, prosecution, maintenance and enforcement of the Biocept Trademarks as it may determine in its sole discretion, without obligation. Life Technologies shall not, during the Term or thereafter, use or seek to register the trademarks or any trademark or trade name similar to or confusing with the Biocept Trademarks, or any translation thereof, in any jurisdiction. Life Technologies agrees that, if Life Technologies at any time obtains, in any jurisdiction, any right, title or interest in any mark, symbol or phrase which shall be identical to, similar to or likely to be confused with any Biocept Trademark or any translation thereof, then Life Technologies shall have acted or shall act as an agent and for the benefit of Biocept for the limited purpose of obtaining such registrations and assigning such registration (and all right, title and interest in such mark, symbol or phrase) to Biocept. + +(b) Life Technologies shall be responsible for and bear the expense of any filing, prosecution, maintenance and enforcement of the Life Technologies Trademarks as it may determine in its sole discretion, without obligation. Biocept shall + +17 + + + + + +not, during the Term or thereafter, use or seek to register the trademarks or any trademark or trade name similar to or confusing with the Life Technologies Trademarks, or any translation thereof, in any jurisdiction. Biocept agrees that, if Biocept at any time obtains, in any jurisdiction, any right, title or interest in any mark, symbol or phrase which shall be identical to, similar to or likely to be confused with any Life Technologies Trademark or any translation thereof, then Biocept shall have acted or shall act as an agent and for the benefit of Life Technologies for the limited purpose of obtaining such registrations and assigning such registration (and all right, title and interest in such mark, symbol or phrase) to Life Technologies. 9. REPRESENTATIONS AND WARRANTIES + +9.1 Mutual Representations and Warranties. Each party represents and warrants to the other that: (a) it is duly organized and validly existing under the laws of its jurisdiction of incorporation or formation, and has full corporate power and authority to enter into this Agreement and to carry out the provisions hereof; (b) it is duly authorized to execute and deliver this Agreement and to perform its obligations hereunder, and the person or persons executing this Agreement on its behalf has been duly authorized to do so by all requisite corporate action; (c) this Agreement is legally binding upon it, enforceable in accordance with its terms; and (d) the execution, delivery and performance of this Agreement by it does not conflict with any agreement, instrument or understanding, oral or written, to which it is a party or by which it may be bound, nor violate any material law or regulation of any court, governmental body or administrative or other agency having jurisdiction over it. + +9.2 Biocept Warranties on Assay. + +(a) As of the Effective Date, the Assay employs Biocept's most current CTC-based technology, and will be validated for performing CTC enumeration and the detection of the indicated analytes in the Assay on a timeline as agreed by the parties within sixty (60) days of the Effective Date. + +(b) Biocept represents and warrants to Life Technologies that: (1) the Assay constitutes an original work of Biocept; and (2) except as previously disclosed to Life Technologies, Biocept is the lawful owner or licensee of all materials used in connection with the development of the Assay, and Biocept has the rights to make, use and sell the Assay, and to allow Life Technologies to use the results of the Technical Component of the Assay to perform the Professional Component of the Assay, and to sell the Assay. + +(c) Biocept has full power and authority and has obtained all Third Party consents, approvals, assignments and/or other authorizations required to enter into this Agreement and to carry out its obligations hereunder. + +(d) There are no existing contracts, agreements, commitments, proposals, offers, or rights with, to, or in any person to acquire any of the rights under the Assay which would prevent or materially and adversely alter the performance of the obligations hereunder. + +18 + + + + + +9.3 Third Party Infringement. In the event that the Tests, or any part thereof becomes the subject of any claim, suit or proceeding for infringement of the Intellectual Property Rights of any Third Party, or if the Test, or any part thereof, is held or otherwise determined to infringe any Intellectual Property Rights of any Third Party such that Biocept can no longer perform its obligations under this Agreement, Biocept shall in its sole discretion either: (1) secure for itself and Life Technologies the right to continue using the Test in accordance with Section 8.4; (2) replace or modify the Test to make it non-infringing without degrading its performance or utility; or (3) notify Life Technologies that it will perform neither (1) nor (2), in which case either party shall thereafter have the right to terminate this Agreement immediately upon written notice to the other party. Notwithstanding the foregoing, and subject to Section 8.5, the indemnification rights of Life Technologies with respect to the Tests as set forth in Section 12.2 shall survive such termination. + +9.4 Disclaimer. Except as expressly set forth herein, THE TECHNOLOGY, MATERIALS AND INTELLECTUAL PROPERTY RIGHTS PROVIDED BY EACH PARTY HEREUNDER ARE PROVIDED "AS IS," AND EACH PARTY EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING THE WARRANTIES OF DESIGN, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON- INFRINGEMENT OF THE INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES, OR ARISING FROM A COURSE OF DEALING, USAGE OR TRADE PRACTICES. + +9.5 Limitation of Liability. NEITHER PARTY SHALL BE ENTITLED TO RECOVER FROM THE OTHER PARTY ANY SPECIAL, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES IN CONNECTION WITH THIS AGREEMENT OR ANY LICENSE GRANTED HEREUNDER; provided, however, that this Section shall neither (a) apply to any liability for damages arising from breach of any obligations of confidentiality under Article 10, nor (b) limit the indemnification obligations of the parties arising under Article 12 of this Agreement. 10. CONFIDENTIALITY + +10.1 Confidential Information. Except to the extent expressly authorized by this Agreement or otherwise agreed in writing by the parties, each party agrees that, during the Term and for five (5) years thereafter, such party (the "Receiving Party") shall keep confidential and shall not publish or otherwise disclose and shall not use for any purpose, other than as expressly provided for in this Agreement, any information furnished to it by or on behalf of the other party (the "Disclosing Party") pursuant to this Agreement (collectively, "Confidential Information"). The Receiving Party may use such Confidential Information only to the extent required to accomplish the purposes of this Agreement. The Receiving Party will use at least the same standard of care as it uses to protect proprietary or confidential information of its own to ensure that its, and its Affiliates', employees, agents, consultants and other representatives do not disclose or make any unauthorized use of the Confidential Information. The Receiving Party will promptly notify the Disclosing Party upon discovery of any unauthorized use or disclosure of the Disclosing Party's Confidential Information. + +19 + + + + + +10.2 Exceptions. Confidential Information shall not include any information which the Receiving Party can prove by competent evidence: (a) is now, or hereafter becomes, through no act or failure to act on the part of the Receiving Party, generally known or available; (b) is known by the Receiving Party at the time of receiving such information, as evidenced by its written records; (c) is hereafter furnished to the Receiving Party by a Third Party, as a matter of right and without restriction on disclosure; or (d) is independently discovered or developed by the Receiving Party, without the use of Confidential Information of the Disclosing Party, as evidenced by the Receiving Party's written records maintained in the ordinary course of business. + +10.3 Authorized Disclosure. Each party may disclose Confidential Information of the other party as expressly permitted by this Agreement, or if and to the extent such disclosure is reasonably necessary in the following instances: + +(a) enforcing such party's rights under this Agreement; + +(b) prosecuting or defending litigation as permitted by this Agreement; + +(c) complying with applicable court orders or governmental regulations; + +(d) disclosure to Affiliates, contractors, employees and consultants who need to know such information for the development and commercialization of the Test in accordance with this Agreement, on the condition that any such Third Parties agree to be bound by confidentiality and non-use obligations that are no less stringent than the terms of this Agreement; and + +(e) disclosure to Third Parties in connection with due diligence or similar investigations by such Third Parties, and disclosure to potential Third Party investors in confidential financing documents, provided, in each case, that any such Third Party agrees to be bound by reasonable obligations of confidentiality and non-use. + +Notwithstanding the foregoing, in the event a party is required to make a disclosure of the other party's Confidential Information pursuant to Section 10.3(b) or Section 10.3(c), it will, except where impracticable, give reasonable advance notice to the other party of such disclosure and use efforts to secure confidential treatment of such information at least as diligent as such party would use to protect its own confidential information, but in no event less than reasonable efforts. In any event, the parties agree to take all reasonable action to avoid disclosure of Confidential Information hereunder. + +10.4 Confidentiality of this Agreement. Except as otherwise provided in this Section 10, each party agrees not to disclose to any Third Party the terms of this Agreement without the prior written consent of the other party hereto, except that each party may disclose the terms of this Agreement that are otherwise made public prior to the date of such disclosure or to the extent such disclosure is permitted under Section 10.3. + +20 + + + + + +10.5 Press Releases; Public Announcements. Neither party shall make a press release or public announcement that includes information relating to the Collaboration without the approval of the other party. At least five (5) days prior to any such press release or public announcement the party proposing to make such press release or public announcement (the "Releasing Party") shall provide to the other party a draft copy thereof for its review and approval. The Releasing Party may not distribute such press release or public announcement without obtaining the other party's prior written approval. In addition, the Releasing Party shall, at the other party's request, remove therefrom any Confidential Information of such other party. The contribution of each party shall be noted in all scientific publications or presentations by acknowledgment or co-authorship, whichever is appropriate. 11. TERM AND TERMINATION + +11.1 Term. The term of this Agreement will commence on the Effective Date and continue for a period of three (3) years after the Effective Date (the "Initial Term"). Thereafter, this Agreement can be renewed by mutual written agreement of the parties for successive one (1) year periods (each, a "Renewal Term" and together with the Initial Term, the "Term"). + +11.2 Termination. + +(a) Material Breach. Either party shall have the right to terminate this Agreement before the end of the Term upon written notice to the other party if such other party is in material breach of this Agreement and has not cured such breach within sixty (60) days (the "Cure Period") after notice from the terminating party requesting cure of the breach. Any such termination shall become effective at the end of such Cure Period unless the breaching party has cured such breach prior to the end of such Cure Period. Any right to terminate under this Section 11.2(a) shall be stayed and the Cure Period tolled in the event that, during any Cure Period, the party alleged to have been in material breach shall have initiated dispute resolution in accordance with Article 13 with respect to the alleged breach, which stay and tolling shall continue until such dispute resolution procedures have been completed in accordance with Article 13. Nothing herein is intended to prevent either party from seeking immediate equitable or injunctive relief. + +(b) Termination for Convenience. Both parties shall have the right to terminate this Agreement at any time, for any or for no reason, upon one hundred twenty (120) days written notice to the other party. In the event a party undergoes a Change of Control Event as defined in Section 14.5, the other party may terminate the Agreement upon thirty (30) days written notice to the party undergoing the Change of Control. + +21 + + + + + +11.3 Effect of Termination; Surviving Obligations. + +(a) Upon any termination or expiration of this Agreement, all licenses granted hereunder shall automatically terminate and revert to the granting party and all other rights and obligations of the parties under this Agreement shall terminate, except as provided in Sections 11.3(b) and 11.4. + +(b) Upon termination or expiration of this Agreement, each party will use their best efforts to return to the other party or destroy all tangible copies of the other party's Confidential Information in such party's possession or control and will erase from its computer systems all electronic copies thereof; provided, however, that each party may retain one archival copy of the other party's Confidential Information solely for purposes of monitoring compliance with its obligations under Article 10 hereof. + +11.4 Survival. Expiration or early termination of this Agreement shall not relieve either party of any obligation accruing prior to such expiration or termination. In addition, Sections 3.3(g), 4.3, 5.1, 5.2 (to the extent required by law) 9.1, 9.2, 9.3, 9.5, 11.3 and 11.4, and Articles 1, 8, 10, 12, 13 and 14 will survive any expiration or termination of this Agreement. 12. INDEMNIFICATION + +12.1 Indemnification by Life Technologies. Life Technologies hereby agrees to defend, indemnify and hold harmless Biocept, its Affiliates and their respective officers, directors, employees, consultants and agents (the "Biocept Indemnitees"), from and against any and all losses, damages, liabilities, expenses and costs, including reasonable legal expense and attorneys' fees resulting from any threat, claim, demand, action or other proceeding by any Third Party ("Losses") to the extent such Losses arise directly or indirectly out of: (a) the gross negligence or willful misconduct of any Life Technologies Indemnitee (defined below); (b) the material breach by Life Technologies of any warranty, representation, covenant or agreement made by it in this Agreement; or (c) the performance by Life Technologies of the Professional Component; except, in each case, to the extent such Losses result from the gross negligence or willful misconduct of any Biocept Indemnitee or the material breach by Biocept of any warranty, representation, covenant or agreement made by it in this Agreement. + +12.2 Indemnification by Biocept. Biocept hereby agrees to defend, indemnify and hold harmless Life Technologies, its Affiliates and their respective officers, directors, employees, consultants and agents (the "Life Technologies Indemnitees"), from and against any and all Losses to the extent such Losses arise directly or indirectly out of: (a) the gross negligence or willful misconduct of any Biocept Indemnitee; (b) the material breach by Biocept of any warranty, representation, covenant or agreement made by it in this Agreement; or (c) the performance by Biocept of the Technical Component of the Assay or Test; except, in each case, to the extent such Losses result from the gross negligence or willful misconduct of any Life Technologies Indemnitee or the material breach by Life Technologies of any warranty, representation, covenant or agreement made by it in this Agreement. + +22 + + + + + +12.3 Procedure. In the event a party seeks indemnification under Section 12.1 or 12.2, it shall inform the other party (the "Indemnifying Party") of a claim as soon as reasonably practicable after such party (the "Indemnified Party") receives notice of the claim (it being understood and agreed, however, that the failure by an Indemnified Party to give notice of a claim as provided in this Section 12.3 shall not relieve the Indemnifying Party of its indemnification obligation under this Agreement except and only to the extent that such Indemnifying Party is actually damaged as a result of such failure to give notice), shall permit the Indemnifying Party to assume direction and control of the defense of the claim (including the right to settle the claim solely for monetary consideration), and shall cooperate as requested (at the expense of the Indemnifying Party) in the defense of the claim. The Indemnified Party shall not agree to any settlement of such action, suit, proceeding or claim without the prior written consent of the Indemnifying Party. The Indemnifying Party shall not agree to any settlement of such action, suit, proceeding or claim or consent to any judgment in respect thereof that does not include a complete and unconditional release of the Indemnified Party from all liability with respect thereto, that imposes any liability or obligation on the Indemnified Party or that acknowledges fault by the Indemnified Party; in each case, without the prior written consent of the Indemnified Party. + +12.4 Insurance. Each party, at its own expense, shall maintain product liability and other appropriate insurance (or self- insure) in an amount consistent with industry standards during the Term and shall name the other party as an additional insured with respect to such insurance. Each party shall provide a certificate of insurance (or evidence of self-insurance) evidencing such coverage to the other party upon request. 13. DISPUTE RESOLUTION + +13.1 Dispute Resolution. The parties recognize that disputes as to certain matters may arise from time to time during the Term. The parties shall first submit the dispute to the Joint Steering Committee for resolution in accordance with Section 4.3 hereof. In the event that the Joint Steering Committee is unable to resolve the dispute, the parties shall be entitled to seek relief in a court of competent jurisdiction. Notwithstanding the foregoing, to the full extent allowed by law, either party may bring an action in any court of competent jurisdiction for injunctive relief (or any other provisional remedy) to protect the parties' rights or enforce the parties' obligations under this Agreement pending resolution of any claims related thereto by the Joint Steering Committee. 14. GENERAL PROVISIONS + +14.1 Governing Law. This Agreement and any disputes, claims, or actions related thereto shall be governed by and construed in accordance with the laws of the State of California, USA, without regard to the conflicts of law provisions thereof. + +14.2 Entire Agreement; Modification. This Agreement, including the Exhibits hereto, is both a final expression of the parties' agreement and a complete and exclusive statement with respect to all of its terms. This Agreement supersedes all prior + +23 + + + + + +and contemporaneous agreements and communications, whether oral, written or otherwise, concerning any and all matters contained herein. This Agreement may only be amended, modified or supplemented in a writing expressly stated for such purpose and signed by the parties to this Agreement. + +14.3 Relationship Between the Parties. The parties' relationship, as established by this Agreement, is solely that of independent contractors. This Agreement does not create any partnership, joint venture or similar business relationship between the parties. Neither party is a legal representative of the other party, and neither party can assume or create any obligation, representation, warranty or guarantee, express or implied, on behalf of the other party for any purpose whatsoever. + +14.4 Non-Waiver. The failure of a party to insist upon strict performance of any provision of this Agreement or to exercise any right arising out of this Agreement shall neither impair that provision or right nor constitute a waiver of that provision or right, in whole or in part, in that instance or in any other instance. Any waiver by a party of a particular provision or right shall be in writing, shall be as to a particular matter and, if applicable, for a particular period of time and shall be signed by such party. + +14.5 Assignment. Except as expressly provided hereunder, neither this Agreement nor any rights or obligations hereunder may be assigned or otherwise transferred by either party without the prior written consent of the other party (which consent shall not be unreasonably withheld); provided, however, that either party may assign this Agreement and its rights and obligations hereunder without the other party's consent in connection with the transfer or sale of all or substantially all of the business of such party to which this Agreement relates to a Third Party, whether by merger, sale of stock, sale of assets or otherwise (a "Change of Control Event"). The rights and obligations of the parties under this Agreement shall be binding upon and inure to the benefit of the successors and permitted assigns of the parties. Any assignment not in accordance with this Agreement shall be void. + +14.6 No Third Party Beneficiaries. This Agreement is neither expressly nor impliedly made for the benefit of any party other than those executing it. + +14.7 Severability. If, for any reason, any part of this Agreement is adjudicated invalid, unenforceable or illegal by a court of competent jurisdiction, such adjudication shall not affect or impair, in whole or in part, the validity, enforceability or legality of any remaining portions of this Agreement. All remaining portions shall remain in full force and effect as if the original Agreement had been executed without the invalidated, unenforceable or illegal part. + +14.8 Notices. Any notice to be given under this Agreement must be in writing and delivered either in person, by any method of mail (postage prepaid) requiring return receipt, or by overnight courier or facsimile confirmed thereafter by any of the foregoing, to the party to be notified at its address(es) given below, or at any address such party has previously designated by prior written notice to the other. Notice shall be deemed sufficiently given for all purposes upon the earlier of: (a) the date of actual receipt; or (b) if mailed, five calendar days after the date of postmark. + +24 + + + + + +If to Biocept, notices must be addressed to: + +Biocept, Inc. 5810 Nancy Ridge Drive, Suite 150 San Diego, CA 92121 Attention: David Hale Executive Chairman Telephone: (858) 320-8200 Facsimile: (858) 320-8225 + +If to Life Technologies, notices must be addressed to: + +Life Technologies Corp. 5791 Van Allen Way Carlsbad, CA 92008 Attention: David Daly Head of Oncology Telephone: (760) 268-5556 + +14.9 Force Majeure. Each party shall be excused from liability for the failure or delay in performance of any obligation under this Agreement by reason of any event beyond such party's reasonable control, including but not limited to, Acts of God, fire, flood, explosion, earthquake, or other natural forces, war, civil unrest, any strike or labor disturbance. Such excuse from liability shall be effective only to the extent and duration of the event(s) causing the failure or delay in performance and provided that the party has not caused such event(s) to occur. Notice of a party's failure or delay in performance due to force majeure must be given to the other party within five (5) calendar days after its occurrence. All delivery dates under this Agreement that have been affected by force majeure shall be tolled for the duration of such force majeure. In no event shall any party be required to prevent or settle any labor disturbance or dispute. In the event of a force majeure that persists for thirty (30) days or more, then either party may terminate this Agreement upon written notice to the other party. + +14.10 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original document, and all of which, together with this writing, shall be deemed one and the same instrument. + +25 + + + + + +IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized representatives as of the date first set forth above. + + BIOCEPT, INC. LIFE TECHNOLOGIES CORPORATION + +By: /s/ Michael J. Dunn By: /s/ David J. Daly + +Name: Michael Dunn Name: David J. Daly + +Title: Senior Vice President, Corp. Dev. Title: Head of Oncology + +26 \ No newline at end of file diff --git a/full_contract_txt/BIOFRONTERAAG_04_29_2019-EX-4.17-SUPPLY AGREEMENT.txt b/full_contract_txt/BIOFRONTERAAG_04_29_2019-EX-4.17-SUPPLY AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..e76a8be8b6fcefb8f07bd6447bfc5bc433bebb94 --- /dev/null +++ b/full_contract_txt/BIOFRONTERAAG_04_29_2019-EX-4.17-SUPPLY AGREEMENT.txt @@ -0,0 +1,139 @@ +Exhibit 4.17 EXECUTION COPY SUPPLY AGREEMENT FERRER INTERNACIONAL, S.A. AND CUTANEA LIFE SCIENCES, INC. [***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. + + + + + +SUPPLY AGREEMENT This Supply Agreement (the "Agreement") is made as of this ____ day of March, 2018 (the "Effective Date"), by and between Cutanea Life Sciences, Inc., a corporation duly organized and existing under the laws of the State of Delaware with its principal place of business at 1500 Liberty Ridge Drive, Suite 3000, Wayne, PA 19087 hereinafter referred to as "CUTANEA"), and Ferrer Internacional, S.A., a Spanish corporation with its principal place of business at Av. Diagonal, 549, 5t h floor, 08029 Barcelona (Spain) (hereinafter indistinctly referred to as "Ferrer" and/or "Supplier"). CUTANEA and Ferrer taken together hereinafter are referred to as "PARTIES". WITNESSETH: WHEREAS, CUTANEA is engaged in the distribution, promotion and sale of certain pharmaceutical, OTC and medical device products and in particular desires that Ferrer manufacture (directly and/or through a third party) and supply CUTANEA with the "Products" (as defined below); and WHEREAS, Ferrer and Medimetriks Pharmaceuticals, Inc. (hereinafter "Medimetriks") entered into a License and Supply Agreement dated March 10, 2014, as amended, (hereinafter referred as "LSA") pursuant to which among other things, Ferrer granted Medimetriks exclusive commercialization and distribution rights to the Product (as defined in the LSA) throughout the Territory (as defined in the LSA); and WHEREAS, with Ferrer's consent, CUTANEA has acquired and assumed the rights, duties and obligations of Medimetriks under the LSA; and WHEREAS, Ferrer desires to manufacture (directly and/or through a third party) and supply CUTANEA with such Products; NOW, THEREFORE, in consideration of the mutual covenants hereinafter expressed, the Parties, intending to be legally bound hereby, agree as follows: 1. DEFINITIONS 1.1 Act "Act" means the Federal Food, Drug and Cosmetic Act, as amended, and regulations promulgated hereunder. 1.2 Business Day "Business Day" means any day other than a Saturday, Sunday or other day on which banks in Philadelphia, Pennsylvania and/ or Barcelona, Spain are permitted or required to close by any applicable law. [***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. + + + + + +1.3 Confidential Information "Confidential Information" means, other than information described in Section 9.1.2, all business and technical information, including third party information, in whatever form or manner presented, which is: (a) disclosed by or on behalf of a party (the "Disclosing Party") to the other party (the "Receiving Party") or learned or observed by the Receiving Party before or during the term of this Agreement; and (b) disclosed during any discussions and proceedings relating to any of the foregoing information, whether disclosed in oral, electronic, visual, written or any other form. "Confidential Information" shall include all information of the Disclosing Party that the Disclosing Party would consider confidential or proprietary under the circumstances. The fact that the Disclosing Party may have marked or identified as confidential or proprietary any specific information shall be indicative that such Disclosing Party believes such information to be confidential or proprietary, but the failure to so mark information shall not determine that such information is or is not considered confidential information by such Disclosing Party. 1.4 FDA "FDA" means the United States Food and Drug Administration, or any successor entity thereto. 1.5 Forecasted Needs "Forecasted Needs" means CUTANEA's estimate of Products (including in trade/sample form) to be ordered from Supplier for the upcoming rolling [***] period. 1.6 Governmental or Regulatory Authority "Governmental or Regulatory Authority" means governments, regulatory authorities, governmental departments, agencies, agents, commissions, bureaus, officials, courts, bodies, boards, tribunals or dispute settlement panels or other law, rule or regulation-making organizations or entities (a) having or purporting to have jurisdiction on behalf of any nation, territory or state or any other geographic or political subdivision of any of them, or (b) exercising, or entitled or purporting to exercise any administrative, executive, judicial, legislative, policy, regulatory or taxing authority or power. 1.7 Manufacture "Manufacture" means all the activities relating to production of the Products including packaging and shipment preparation, quality control and release of Products. All the references contained in this Agreement regarding manufacturing activities shall be deemed rendered by Supplier, even if performed by its designee (whether in the form of a subcontractor, agent or otherwise). In consequence, all Manufacturing activities with respect to the Products to be Manufactured hereunder by Supplier shall be carried out by Supplier (or its designee) at the notified facility and utilizing equipment in the manner set forth in the Specifications, except to the extent that Supplier receives CUTANEA's advance written permission to alter the location or specified usage of the equipment that may be required under the Specifications or the NDA, as applicable. 3 [***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. + + + + + +1.8 Product(s) "Product(s)" means product(s) as listed from time to time in Schedule A Manufactured by the Supplier (directly or through a third person) to meet the Specifications (as hereinafter defined); except as otherwise set forth on Schedule A, the Product will be ready for re-sale by CUTANEA to its customers in finished, final packaged form bearing CUTANEA's labels, it being understood that, after generic competition of the Product enters the market in the United States of America including Puerto Rico and the U.S. Virgin Islands, CUTANEA will be permitted to place orders for Product under a generic label. The term "Generic" shall be interpreted as defined under Section 1.17 of the LSA. 1.9 Specifications "Specifications" means, with respect to the Products, the critical quality standards that include test attributes, analytical procedures, and appropriate acceptance criteria and Manufacturing procedures for which such Product should conform to be considered acceptable for its intended use and conform to quality standards approved by Governmental and Regulatory Authorities and as provided in the NDA for the Products, and required for the Manufacture and supply of such Product(s). 1.10 Supply Price "Supply Price" means the price to be charged to CUTANEA from time to time by Supplier for Products Manufactured and supplied hereunder, as set forth in Schedule A. 2. PRODUCT MANUFACTURE AND SUPPLY 2.1 Manufacture and Purchase. Subject to the terms and conditions of this Agreement, Supplier agrees that it will, on a non-exclusive basis (but exclusive for supply of the Product in the United States of America including Puerto Rico and the U.S. Virgin Islands), Manufacture (directly or through a designee) for and provide and supply to CUTANEA, and CUTANEA agrees that it will purchase exclusively from Supplier, all of its requirements of the Products as follows: Supplier shall supply Products in accordance with the Specifications and in sufficient quantity to meet CUTANEA's Forecasted Needs for the length of this Agreement. All deviations from the Specifications must be approved by CUTANEA, in writing, prior to Supplier Manufacturing the Product. 2.2 Raw Materials and Components. As between Supplier and CUTANEA, Supplier shall be responsible for the supply of all raw materials and components necessary for the Manufacture of Products at no additional cost to CUTANEA. Supplier (or its designee) shall order the initial components for each Product as soon as CUTANEA provides Supplier (or its designee) with the relevant artwork for the Product. 4 [***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. + + + + + +2.3 Quality Tests and Checks. In order to assure the conformity of the Products to the Specifications, the Supplier shall deliver or cause to be delivered to CUTANEA, at the time of shipment, a certificate of analysis and compliance or other batch documentation upon reasonable request (such as, deviations, investigations, batch records) with respect to each batch of Product supplied hereunder in the form required by the Quality Agreement. 2.4 Forecasting and Other Obligations. 2.4.1 As soon as practicable following execution of this Agreement, but in any event within ten (10) Business Days, CUTANEA agrees to provide Supplier with a best estimate, non-binding (except for the first six months) forecast of its Forecasted Needs for Products (including in trade/sample form) for the upcoming rolling 18-month period (the "Forecast"). Thereafter, CUTANEA will update this rolling [***] Forecast quarterly. 2.4.2 With regards to the FDA Fees, CUTANEA shall maintain the NDA for the Products and pay, from time to time, all required FDA filing and related Product fees. 2.4.3 CUTANEA shall notify Supplier within one Business Day, after it receives any materially adverse contact or communication from any Governmental or Regulatory Authority that relates to any Product. Supplier shall notify CUTANEA as soon as reasonably possible after it receives any materially adverse contact or communication from any Governmental or Regulatory Authority that relates to any Product and may reasonably be expected to affect patient safety. For matters that would not reasonably be expected to affect patient safety, Supplier shall notify CUTANEA of such communications in its discretion. 2.4.4 CUTANEA shall provide Supplier with copies of all communications received from or sent to any Governmental or Regulatory Authority with respect to any Product within three business days after receipt or sending of the communication, as the case may be (subject to confidentiality and privilege restrictions, if any). CUTANEA shall consult with Supplier regarding the response to any inquiry or observation from a Governmental or Regulatory Authority relating to a Product. CUTANEA shall consider all reasonable requests and comments by Supplier with respect to all contacts and communications with a Governmental or Regulatory Authority. 2.5 Purchase Orders. 2.5.1 CUTANEA agrees to purchase from Supplier all Products Manufactured for CUTANEA in accordance with valid CUTANEA Purchase Orders pursuant to the terms of this Agreement and provided that such Products meet the Specifications approved by CUTANEA. 5 [***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. + + + + + +2.5.2 During the term of this Agreement, CUTANEA will order Product(s) by issuing firm Purchase Orders not less than [***] business days before the requested delivery date(s) of such Product(s), and Supplier shall provide approval of the Purchase Order by the Supplier within five (5) business days following the Purchase Order reception, such approval signifying Supplier's commitment to deliver such Product(s) on the requested deliver date(s), it being understood that Supplier must accept a Purchase Order for delivery of Product not less than [***] business days before the requested delivery date when included in the first [***] of the Forecasted Needs. Each purchase order shall set forth the Product for which the purchase order is being issued, the quantity being ordered (in trade/sample form), the Supply Price for the Product(s) being ordered and the requested delivery date for the Product being ordered, and the locations to which such quantities shall be delivered. 2.5.3 Within ten (10) Business Days following this Agreement becoming effective and thereafter on or before the last day of each calendar quarter, CUTANEA shall provide Supplier with specific data as to its Forecasted Needs for such Product (including in trade/sample form) for the following rolling [***]. Supplier will use commercially reasonable efforts to deliver Product to CUTANEA with minimum expiry dating remaining of [***]% of the approved shelf-life. 2.5.4 CUTANEA's purchase orders shall designate the desired quantities of Products, delivery dates and destinations. Supplier shall fill and ship all orders of Products in accordance with CUTANEA's reasonable written instructions. CUTANEA'S purchase order may specify up to three (3) shipping destinations per batch of Product but will be in full pallet quantities. Additional destinations can be accommodated only upon CUTANEA payment of a shipping preparation fee to be negotiated by Supplier and CUTANEA. 2.6 Acceptance / Rejection of Products. 2.6.1 All Products shall be submitted to inspection and evaluation by or on behalf of CUTANEA to determine whether or not said Products meet the Specifications. CUTANEA will provide in good faith written acceptance of a batch of Product or written notification of any deficiencies within two (2) Business Days after receipt of the Certificate of Analysis for the Product batch. Written acceptance of a batch of the applicable Product is required as a condition to the delivery of Product to Cutanea's designated shipping agent in accordance with Section 3. If for any reason Supplier does not receive any such notification within such two (2) Business Day period, Supplier will promptly notify CUTANEA of such fact and CUTANEA will as soon as practicable and, in any event within another two (2) Business Days thereafter provide such written notice to Supplier and be responsible for any storage or similar charges that Supplier may incur for not delivering such Product. The lack of reception of such written acceptance within the second two (2) Business Day period shall be deemed as the batch is accepted. If, once the Product is delivered, CUTANEA determines that there is any deficiency with respect to any Product, CUTANEA will notify Ferrer of such claim within fifteen (15) Business Days of delivery of the Products. Each such notice of rejection to Supplier shall specify in reasonable detail the ways in which the Product batch failed to meet Specifications. CUTANEA shall grant to Supplier (or its designee) the right to inspect or test said Product batch and dispute CUTANEA rejection according to the provisions provided in this Section 2.6. In the event that Supplier disagrees with CUTANEA's defective Product claim, the issue shall be submitted to a mutually agreed upon independent third party laboratory, whose decision shall be final and binding upon the Parties. The costs arising from the laboratory's intervention and the costs of the replaced Products (including return and destruction costs of the defective Products) shall be borne by the Party whose results were mistaken. As to any such Product batch which is determined to fail the Specifications ("Rejected Product"), CUTANEA shall have no obligation to pay for such Rejected Product and Supplier shall replace such Rejected Product as soon as possible and no later than ninety (90) days thereafter. 6 [***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. + + + + + +2.6.2 In the event of a conflict between the test results of Supplier and the test results of CUTANEA with respect to any shipment of Product batch, within thirty (30) days following receipt by Supplier of CUTANEA's notice of rejection, sample of such Product batch shall be submitted by Supplier (and/or its nominee) to an independent laboratory designated by Supplier (and/or its nominee) and reasonably acceptable to CUTANEA, which shall perform an assessment and whose findings shall be conclusive. The cost of the assessment shall be borne by (i) CUTANEA if the findings indicate the Product met all Specifications or (ii) Supplier (or its nominee) if the findings indicate the Product failed to meet any Specifications. 2.7 Supply Price. The initial Supply Price for each Product (commercial trade and sample units) to be paid by CUTANEA to Supplier are listed in Schedule A. These Supply Prices are for finished forms of the Products [***] (except as otherwise set forth herein). 2.8 Quality Agreement. The Parties shall enter into a Quality Agreement for the Products. If there is any conflict between this Agreement and the Quality Agreement solely with respect to quality assurance matters, the Quality Agreement will prevail, and with respect to all other matters, this Agreement will prevail. 2.9 Pharmacovigilance Agreement. The Parties shall enter into a pharmacovigilance agreement with respect to the Products (the "Pharmacovigilance Agreement"). If there is any conflict between this Agreement and the Pharmacovigilance Agreement solely with respect to adverse events and patient safety, the Pharmacovigilance Agreement will prevail, and with respect to all other matters, this Agreement will prevail. 7 [***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. + + + + + +2.10 Failure to Supply. 2.10.1 Supplier will promptly notify CUTANEA in writing in the event that Supplier is unable or anticipates that it will be unable to supply compliant Products in accordance with the requirements of this Agreement (each a "Failure to Supply"). Supplier undertakes to implement appropriate methods to ensure consistency of supply of the Product for the Territory throughout the Term of the Agreement, including but not limited to using its commercially reasonable efforts to qualify an alternative site owned or operated by Supplier or its Affiliates to Manufacture the Product and obtain approval thereof from the FDA and, if necessary the possible qualification of alternate sources of supply by Supplier. CUTANEA shall be entitled to propose to Supplier such alternate sources of supply if Supplier has not taken any steps to qualify such alternate supplier before the Failure to Supply, and Supplier shall evaluate in good faith the proposal from CUTANEA. Should the Parties agree to such qualification as a remedy to a Failure to Supply, then Supplier will grant any necessary licenses and conducting technology transfer as reasonably necessary to enable such alternate supplier to Manufacture the Product during Supplier's Failure to Supply. 2.10.2 If Supplier fails to supply all or part of any shipment of Products ordered by CUTANEA on the delivery date specified on the applicable purchase order for such shipment, in addition to any other remedies the CUTANEA may have, CUTANEA at its sole discretion, may require Supplier to supply the undelivered Products at a future date agreed upon by CUTANEA and Supplier, but nonetheless such Products shall count toward any binding purchase obligation of CUTANEA, whether as part of the Forecast or otherwise. 3. SHIPMENT AND RISK OF LOSS Supplier shall ship the Products ordered by CUTANEA hereunder [***]. Title to, and risk of loss for, Product, shall transfer from Supplier to CUTANEA upon [***]. [***]. 4. TERM AND TERMINATION 4.1 Term. This Agreement comes into force as of the Effective Date and shall remain valid during the term of the LSA. In consequence, if the LSA to be signed by the Parties is terminated for any reason whatsoever, the present Agreement will automatically terminate and be extinguished. 4.2 Termination. This Agreement may be terminated at any time upon the occurrence of any of the following events: 4.2.1 The failure of either party to comply with its obligations herein, which failure is not remedied within forty-five (45) calendar days after receipt by the breaching party of written notice of such default. 8 [***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. + + + + + +4.2.2 Either party may terminate this Agreement immediately by giving the other party written notice thereof in the event such other party in the event of (a) a voluntary assignment by the other party for the benefit of creditors; (b) the institution of voluntary proceedings by the other party in bankruptcy, insolvency, moratorium or for a receivership, or for a winding-up or for the dissolution of the other party; or (c) the taking of any action by the other party under any statutory act for relief from creditors, to the extent permitted by applicable Law. 4.2.3 The LSA is terminated or expires for any reason. 4.3 Additional Rights and Remedies. Termination under this Section 4 shall be in addition to the other rights and remedies of the terminating party as specified herein. 4.4 Return of Materials. Upon the expiration or termination of this Agreement for any reason whatsoever, Confidential Information of either party delivered to the other pursuant to this Agreement, including all formulae for the Products, shall promptly be collected and returned in whatever form it may exist. Upon the effective date of expiration or termination of this Agreement for any reason whatsoever, Supplier shall deliver to CUTANEA all Products Manufactured hereunder under valid Purchase Orders and shall invoice CUTANEA for such Products. Subsequent to the expiration or termination of this Agreement, the Parties shall continue to be responsible for rejected Products in accordance with the terms of this Agreement. 4.5 Survival. Termination or expiration of this Agreement shall not relieve either party of obligations or liability for breaches of this Agreement incurred prior to or in connection with termination or expiration. Sections 4.3, 4.4, 5, 6, 8.4, 9, 10, and 12 hereof and this Section 4.5 shall survive the termination or cancellation of this Agreement for any reason along with Section 1 and any other section of this Agreement to the extent necessary to interpret the other surviving sections of this Agreement. 5. WARRANTIES 5.1 Conformity with Specifications. Supplier warrants that all Products sold pursuant to this Agreement will have been Manufactured in accordance with the Specifications for the release of the Product. 9 [***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. + + + + + +5.2 Compliance with the Act. Supplier shall bear sole responsibility for the validity of all test methods and appropriateness of all Specifications. In addition, Supplier shall bear sole responsibility for all regulatory approvals, filings, and registrations and adequacy of all validation, stability, and preservative efficacy studies including responsibility for adequacy of all validation, stability, and preservative effectiveness studies performed by Supplier on behalf of CUTANEA. Supplier warrants that it has obtained and shall maintain any and all necessary approvals, licenses and permits necessary to perform its obligations under this Agreement. CUTANEA warrants that it has obtained any and all necessary approvals from all applicable Governmental or Regulatory Authorities necessary to distribute all Products under this Agreement. 5.3 Conformity with FDA Regulations and cGMPs. Subject to CUTANEA's compliance with the provisions set forth in Section 5.2 and Section 5.4 hereof, Supplier warrants that all Products Manufactured, held for sale, sold and shipped pursuant to this Agreement shall have been Manufactured and shipped by Supplier in compliance with applicable FDA regulations and current Good Manufacturing Practices as that term is defined under the Act. 5.4 Compliance of Packaging and Labeling with Laws and Regulations. CUTANEA warrants that all labeling copy and other material developed or produced by CUTANEA for use in connection with the Products and artwork approved, designated or supplied by CUTANEA shall be in compliance with all applicable laws and governmental regulations. Compliance with all federal, state, and local laws and regulations concerning Specifications for packaging and labeling provided by CUTANEA shall be the sole responsibility of CUTANEA. Supplier warrants that all packaging and labeling services performed hereunder will be in accordance with CUTANEA's Specifications. CUTANEA hereby warrants to Supplier that, to CUTANEA's knowledge, all CUTANEA labeling and artwork related to the Product do not violate or infringe any patent, copyright or trademark laws, and agrees to indemnify Supplier, its employees, officers, directors and representatives for any claim, loss or damage including reasonable attorney's fees paid or incurred by any of them in connection therewith. 5.5 Access to Supplier's Facilities. 5.5.1 Access. Supplier shall use its commercially reasonable efforts to permit CUTANEA to have access to Supplier's (and its agents' and subcontractors') facilities upon reasonable notice, during normal business hours for any reasonable purpose, including compliance with current Good Manufacturing Practices and the Act. Such access shall in no way give CUTANEA the right to any of Supplier's confidential or proprietary information not related to this Agreement or used in the Manufacture of any Product. 10 [***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. + + + + + +5.5.2 Audit. Without limiting the generality of the foregoing, but subject to the Quality Agreement, Supplier shall use its commercially reasonable efforts to permit CUTANEA to conduct, once annually during the Term, one quality assurance and Manufacturing costs audit for any reasonable purpose, including access to those portions of Supplier's (and its agent's and subcontractor's) facilities where services are conducted under this Agreement, upon reasonable advance notice and at reasonable times during regular business hours (an "Annual Audit"). Supplier shall not charge CUTANEA for time and expenses incurred by Supplier (or its agents and subcontractors) in connection with an Annual Audit. For purposes of this subsection, CUTANEA shall ensure that its duly authorized agents and representatives involved in the audit have signed or are otherwise bound to maintain the confidentiality of Confidential Information learned as a result of the audit in accordance with Section 9 and CUTANEA shall be liable for any breach of such obligation by such agents or representatives. 5.6 Patent and Other Intellectual Property Rights. Supplier represents and warrants to CUTANEA that, as of the Effective Date, to the best of Supplier's knowledge, information and belief, Supplier is not infringing (and does not guarantee that under its knowledge is infringing) upon any Third Party patent or the intellectual property rights of any Third Party relating to the Products. In addition, Ferrer can make no representations or warranties regarding any possible future infringement of Supplier Patent by a Third Party nor guarantee that the Products do not infringe future patents and/or any intellectual property right of a Third Party. 5.7 Disclaimer. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, SUPPLIER MAKES NO REPRESENTATIONS AND EXTENDS NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING ANY EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, IN NO EVENT WILL EITHER PARTY BE LIABLE FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL, OR INCIDENTAL DAMAGES, INCLUDING LOST PROFITS, HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY, ARISING IN ANY WAY OUT OF THIS AGREEMENT. THIS LIMITATION OF LIABILITY WILL APPLY EVEN IF A PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, AND NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED REMEDY PROVIDED HEREIN. 5.8 Debarment. 5.8.1 Each of the parties, to the best of its knowledge, hereby represents, warrants, certifies and covenants that it is not debarred under Section 306 of the Act or similar local law. In the event that a party becomes debarred, the debarred party agrees to notify the other party immediately if the same affects Supplier's ability to lawfully supply the Products or CUTANEA's ability to lawfully purchase the Products. 11 [***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. + + + + + +5.8.2 Each of the parties represents, warrants, certifies and covenants that to the best of its knowledge it has not and will not use in any capacity the services of any individual, corporation, partnership, or association which has been convicted or debarred under Section 306 of the Act or similar local law. In the event that a party becomes aware of or receives notice of the conviction or debarment of any individual, corporation, partnership, or association providing services to such party, which relates to the execution or performance of this Agreement, Supplier agrees to notify CUTANEA immediately. 6. PRODUCT RECALLS 6.1 Initiating and Effecting Recall. Supplier, as the NDA holder for the Product, shall make all decisions with respect to any complaint or "adverse drug experience", or any recall, market withdrawal or any other corrective action related to any Product. Supplier shall be responsible for processing and submitting to the applicable authorities or agencies all reports of adverse drug experiences and Product complaints in accordance with applicable Acts. Supplier shall investigate all complaints associated with the Manufacture, safety or efficacy of the Product. CUTANEA shall notify Supplier in accordance with the terms of the Quality Agreement and the Pharmacovigilance Agreement of any complaints received by CUTANEA concerning any Products. 6.2 Implementation of Recall. Supplier shall implement recalls of Products from the market or other corrective actions related to the Product. CUTANEA shall assist Supplier, to the extent necessary or relevant, in implementing withdrawals or recalls of Products from the market or other corrective actions related to Products. Upon the receipt by either party of any direction to withdraw or recall any Product from the market from any Governmental or Regulatory Authority having jurisdiction, the receiving party shall notify the other party as soon as practicable in accordance with the terms of this Agreement and the Quality Agreement. With respect to notice to CUTANEA, it should be sent to [ ].com or via phone at [ ]. To the extent any seizure, withdrawal, recall (whether voluntary or involuntary), or corrective action with respect to any Product (collectively, "Product Action") results from the adulteration or contamination (other than any naturally occurring contamination that can be traced back to the Manufacturing process) of Product while in the care and custody of CUTANEA, CUTANEA shall be responsible for the costs of the Product Action. Otherwise, Supplier shall be responsible for all of the costs of the Product Action. 12 [***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. + + + + + +7. FORCE MAJEURE The occurrence of an event which materially interferes with the ability of a party to perform its obligations or duties hereunder which is not within the reasonable control of the party affected (or in the case of Supplier, any current manufacturer of the Product) not due to the affected party's malfeasance, and which could not with the exercise of reasonable due diligence have been avoided ("Force Majeure"), including, but not limited to, fire, accident, labor difficulty, strike, riot, terrorism, civil commotion, act of God, delay or errors by shipping companies or change in Law, Governmental or Regulatory Authority action or inaction, shall not excuse such party from the performance of its obligations or duties under this Agreement, but shall merely suspend such performance during the continuation of Force Majeure. The party prevented from performing its obligations or duties because of Force Majeure shall promptly notify the other party hereto (the "Other Party") of the occurrence and particulars of such Force Majeure and shall provide the Other Party, from time to time, with its best estimate of the duration of such Force Majeure and with notice of the termination thereof. The party so affected shall use its commercially reasonable efforts to avoid or remove such causes of nonperformance. Upon termination of Force Majeure, the performance of any suspended obligation or duty shall promptly recommence. Neither party shall be liable to the other party for any direct, indirect, consequential, incidental, special, punitive or exemplary damages arising out of or relating to the suspension or termination of any of its obligations or duties under this Agreement by reason of the occurrence of Force Majeure. 8. CHANGES 8.1 Changes by CUTANEA. Any changes to the Specifications requested by CUTANEA must be approved by Supplier (or its designee) in its reasonable discretion and shall be incorporated and all costs and expenses associated with such changes shall be borne by CUTANEA. 8.2 Changes by Supplier. Any changes to the Specifications requested by Supplier must be notified to CUTANEA in advance to its implementation, and shall be incorporated only after approval of Governmental or Regulatory Authorities. All costs and expenses associated with such changes shall be borne by Supplier. 8.3 Changes by Governmental or Regulatory Authorities. The costs and expenses of any changes to the Specifications requested by any Governmental or Regulatory Authority shall be borne by Supplier unless the change, in the opinion of the JSC (as that term is defined in the LSA), entails a benefit to CUTANEA, in which case the costs arising from the changes and its implementation shall be borne by CUTANEA. 8.4 Obsolete Inventory. Any CUTANEA-specific inventory including, but not limited to, raw materials, work-in-process, packaging and finished goods rendered obsolete as a result of Supplier's supplier minimum order quantities that exceed the binding quantities of Product of Forecasted Needs, formula, artwork or packaging changes not requested by CUTANEA or by changes required by any Governmental or Regulatory Authority shall be destroyed in accordance with all applicable laws and regulations and Supplier shall indemnify CUTANEA for any liability, costs or expenses, including attorney's fees and court costs, relating to Supplier's failure to dispose of such inventory in accordance with such laws and regulations. Supplier shall also provide CUTANEA with all manifests and other applicable evidence of proper destruction as may be requested by CUTANEA or required by applicable laws and regulations. Any other materials rendered obsolete that are not result of Supplier's supplier minimum order quantities that exceed the binding quantities of Product of Forecasted Needs, formula, artwork or packaging changes requested by CUTANEA shall be reimbursed to Supplier by CUTANEA. 13 [***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. + + + + + +9. CONFIDENTIAL INFORMATION: INTELLECTUAL PROPERTY RIGHTS 9.1 Confidential Information. 9.1.1 All Confidential Information furnished by the Disclosing Party during the term of this Agreement shall be kept confidential and not used by the Receiving Party, except for purposes authorized by this Agreement, and shall not be disclosed to any person or firm, unless previously authorized in writing to do so, during the term of this Agreement and for an indefinite period thereafter. The Receiving Party may, however, disclose the same to its responsible officers and employees who require said information in order to perform such party's obligations under this Agreement, provided that said officers and employees shall have assumed like obligations of confidentiality. 9.1.2 Any other provisions hereof to the contrary notwithstanding, it is expressly understood and agreed by the Parties hereto that the obligations of confidence and nonuse herein assumed shall not apply to any information which may be demonstrated by documented means of sufficient evidence that: (1) is at the time of disclosure or thereafter becomes a part of the public domain through no fault, omission or other act of the Receiving Party or any individual or entity receiving such information, directly or indirectly, from the Receiving Party; or (2) was otherwise in the Receiving Party's lawful possession with no obligation or duty to maintain the confidentiality thereof prior to disclosure as shown by its written record; or (3) is hereafter disclosed to the Receiving Party by a third party lawfully entitled to possession of such Confidential Information and under no obligation or duty of confidentiality; or (4) is released from a confidential status by Disclosing Party as evidence by an instrument or agreement duly executed by Disclosing Party; or (5) is required to be disclosed pursuant to regulatory or legal requirements, provided that the Receiving Party provides reasonable advance notice to the Disclosing Party and the Receiving Party reasonably cooperates with the Disclosing Party to obtain confidentiality protection of such information. 14 [***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. + + + + + +9.1.3 The Receiving Party agrees that money damages would not be a sufficient remedy for any breach of the confidentiality obligations hereunder and that, in addition to all other remedies, the Disclosing Party will be entitled to seek injunctive or other equitable relief as a remedy for any such breach by the Receiving Party without having to post a bond. The Receiving Party will notify the Disclosing Party in writing immediately upon the occurrence of any unauthorized release of Confidential Information or other breach of the confidentiality obligations hereunder of which it is or becomes aware. 9.2 Intellectual Property. Except as the Parties may otherwise expressly agree in writing, each party shall continue to own its existing patents, trademarks, copyrights, trade secrets and other intellectual property ("Intellectual Property"), without conferring any interests therein on the other party. Neither party shall acquire any right, title or interest in the other's Intellectual Property by virtue of this Agreement or otherwise, except to the extent expressly provided herein. 9.3 Publicity and SEC Filings. The Parties agree that, unless mutually agreed by the Parties in writing otherwise, no public announcement or press release regarding the execution of this Agreement shall be made. Notwithstanding anything to the contrary contained herein, each party agrees that it shall cooperate fully and in a timely manner with the other with respect to all disclosures required to be made to the SEC or any other Governmental or Regulatory Authority, including providing written notice to the other party and sufficient time to review and request confidential treatment of Confidential Information of either party included in any such disclosure. 10. INDEMNIFICATION 10.1 Indemnification by Supplier. Supplier shall indemnify, defend and hold CUTANEA harmless from any and all losses, damages, liabilities, costs, charges, expenses, including, without limitation, court fees and reasonable lawyers' fees and other legal expenses (collectively, "Losses") to which CUTANEA may become subject as a result of any claim, complaint, suit, demand, action or other proceeding by any Third Party (collectively "Claims"), to the extent such Losses arise out of or in connection with: (i) the development, use, Manufacturing, storage, handling or distribution of the Products by Supplier or any of its Affiliates or contract suppliers of Products; (ii) the negligence or willful misconduct of Supplier or any of its Affiliates or contract suppliers of Products; or (iii) a breach or non-fulfilment by Supplier of its obligations according to this Agreement and/or any law in force; or (iv) a breach by Supplier of any warranty, representation, covenant or agreement made by it in this Agreement; except, in each case, to the extent such Losses result from (a) the negligence or willful misconduct of CUTANEA or (b) the breach by CUTANEA of any warranty, representation, covenant or agreement made by it in this Agreement and to the extent that such negligence, willful misconduct or breach it is stated by a final court decision. Notwithstanding the foregoing, Supplier shall have no obligation to indemnify CUTANEA for reasonable lawyers' fees and other legal expenses incurred by CUTANEA after Supplier has taken over the defense of such claim, "Action or Proceeding" in accordance with Section 10.3 unless and then only to the extent otherwise agreed to in advance in writing by Supplier. 15 [***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. + + + + + +10.2 Indemnification by CUTANEA. CUTANEA shall indemnify, defend and hold Supplier harmless from any and all Losses, to which Supplier may become subject as a result of any Claim to the extent such Losses arise out of or in connection with: (i) the development, use, storage, handling, distribution, marketing or selling of the Products by CUTANEA and its Affiliates; (ii) the negligence or willful misconduct of CUTANEA and its Affiliates; (iii) the breach or non-fulfilment by CUTANEA of its obligations according to this Agreement and/or any law in force; or (iv) a breach by CUTANEA of any warranty, representation, covenant or agreement made by it in this Agreement; except, in each case, to the extent such Losses result from: (a) the negligence or willful misconduct of Supplier (b) the breach by Supplier of any warranty, representation, covenant or agreement made by it in this Agreement and to the extent that such negligence, willful misconduct or breach it is stated by a final court decision. Notwithstanding the foregoing, CUTANEA shall have no obligation to indemnify Supplier for reasonable lawyers' fees and other legal expenses incurred by Supplier after CUTANEA has taken over the defense of such claim, "Action or Proceeding" in accordance with Section 10.3 unless and then only to the extent otherwise agreed to in advance in writing by CUTANEA. 10.3 Assertion of Claim. In the event that any claim is asserted against any party hereto, or any party hereto is made a party defendant in any action or proceeding, and such claim, action or proceeding (which shall mean any action, claim, suit, proceeding, arbitration or Governmental or Regulatory Authority action, notification, investigation or audit, hereinafter referred to as an "Action or Proceeding") involves a matter which is subject to a claim for indemnification under this Section, then such party (an "Indemnified Party") shall promptly give written notice to the other party or parties (the "Indemnifying Party") of such claim, Action or Proceeding. If the Indemnifying Party agrees in writing to be bound by and to promptly pay the full amount of any final judgment from which no further appeal may be taken (or otherwise confirms its indemnification obligation responsibility to the satisfaction of the Indemnified Party) and if the Indemnified Party is reasonably assured of the Indemnifying Party's ability to satisfy such agreement, then such Indemnifying Party shall take over the defense of such claim, Action or Proceeding, except that, in such case, the Indemnified Party shall have the right to approve any attorney or counsel selected by the Indemnifying Party (which approval shall not be unreasonably delayed or withheld) and to join in the defense of said claim, Action or Proceeding at its own cost and expense. In no event shall the Indemnifying Party settle any such claim or potential claim, Action or Proceeding without the prior written consent of the Indemnified Party, which consent shall not be unreasonably withheld. 16 [***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. + + + + + +10.4 Insurance. 10.4.1 Each of Supplier and CUTANEA shall maintain and keep in force at its sole cost and expense throughout the Term of this Agreement and for three years following the effective date of expiration or termination hereof (if such policies are on a claims made basis), Commercial General Liability Insurance from carriers having an A. M. Best rating of A, including Product Recall, Bodily Injury and Property Damage Insurance, with a combined single limit of not less than $[***] per occurrence and $[***] in the aggregate annually (this limit can be secured via a combination of primary and excess/umbrella policies). In addition, each of the Parties shall maintain and keep in force at its sole cost and expense throughout the Term of this Agreement and for three years following the effective date of expiration or termination hereof (if such policies are on a claims made basis), Product Liability Insurance from carriers having an A.M. Best rating of A with a combined single limit of not less than $[***] per occurrence and in the aggregate annually. 10.4.2 Each party agrees to provide the other party with a Certificate of Insurance evidencing such coverage, naming the other party as an additional insured. Each party agrees to give the other party written notice, promptly, of any material change in or cancellation of coverages or limits. In addition, if and for so long as Supplier utilizes any subcontractor(s) or agents to provide services hereunder, Supplier will use its commercially reasonable efforts to cause each such subcontractor to hold, at least, the minimum insurance coverages listed above. 11. REPRESENTATIONS AND WARRANTIES 11.1 REPRESENTATIONS BY SUPPLIER. Supplier makes the following representations and warranties and agrees to notify CUTANEA immediately upon any future breach of these representations and warranties: 11.1.1 Organization of Supplier. Supplier is a Spanish corporation, duly organized, validly existing and in good standing under the laws of its jurisdiction of organization. 11.1.2 Enforceability of this Agreement. The execution and delivery of this Agreement has been authorized by all requisite corporate action on the part of Supplier. This Agreement is and will remain a valid and binding obligation of Supplier, enforceable in accordance with its terms, subject to laws of general application relating to bankruptcy, insolvency and the relief of debtors. 11.1.3 Absence of Other Contractual Restrictions. Supplier is under no contractual or other obligation or restriction that is inconsistent with Supplier's execution or performance of this Agreement. Supplier will not enter into any agreement, either written or oral, that would conflict with Supplier's responsibilities under this Agreement. 17 [***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. + + + + + +11.1.4 Qualifications of Supplier Personnel. Supplier has, and will engage, employees, subcontractors and/or consultants ("Supplier Personnel") with the proper skill, training and experience to provide the services under this Agreement. Supplier will be solely responsible for paying Supplier Personnel and providing any employee or other benefits that they are owed. 11.1.5 Legal Compliance. Supplier will comply, in all material respects, with all laws, regulations and orders applicable to its operations. Supplier has and at all times during the term of this Agreement shall maintain all permits, licenses and similar authorizations required for it to perform its obligations under this Agreement. 11.2 Representations by CUTANEA. CUTANEA makes the following representations and warranties and agrees to notify Supplier immediately upon any future breach of these representations and warranties: 11.2.1 Organization of CUTANEA. CUTANEA is a Delaware corporation, duly organized, validly existing and in good standing under the laws of Delaware. 11.2.2 Enforceability of this Agreement. The execution and delivery of this Agreement has been authorized by all requisite corporate action on the part of CUTANEA. This Agreement is and will remain a valid and binding obligation of CUTANEA, enforceable in accordance with its terms, subject to laws of general application relating to bankruptcy, insolvency and the relief of debtors. 11.2.3 Absence of Other Contractual Restrictions. CUTANEA is under no contractual or other obligation or restriction that is inconsistent with CUTANEA's execution or performance of this Agreement. CUTANEA will not enter into any agreement, either written or oral, that would conflict with CUTANEA's responsibilities under this Agreement. 11.2.4 Legal Compliance. CUTANEA will comply, in all material respects, with all laws, regulations and orders applicable to its operations. CUTANEA has and at all times during the term of this Agreement shall maintain all permits, licenses and similar authorizations required for it to perform its obligations under this Agreement. 18 [***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. + + + + + +11.3 Anti-Corruption Undertaking Both parties shall comply with, and will not cause any party and its Affiliates, associates, directors, officers, shareholders, employees, representatives, sublicensees or agents worldwide to be in violation with any applicable anti-corruption laws, rules and regulations including but not limited to the United States Foreign Corrupt Practices Act (the "FCPA") or U.K. Bribery Act 2010. Without limiting the foregoing, neither party will, directly or indirectly, pay any money to, or offer or give anything of value to, any Government Official, in order to obtain or retain business or to secure any commercial or financial advantage for the other party or for itself or any of their respective Affiliates. Each of the parties undertakes not to bribe Government Officials or any private companies or individuals, "bribes" having the following definition: Offering, promising, or giving a financial or other advantage to another person where it is intended to bring about the improper performance of a relevant function or activity, or to reward such improper performance; acceptance of the advantage offered, promised or given in itself constitutes improper performance of a relevant function or activity. "Improper Performance" means a breach of expectations that a person will act in good faith, impartially, or in accordance with a position of trust. Both parties must also (1) make and keep books, records and accounts, which, in reasonable detail, accurately and fairly reflect the transactions and dispositions of assets of the company, (2) devise and maintain a system of internal accounting controls, and (3) at any time a party so requests in writing, but no more than once a year, grant to the other party commercially reasonable access to said books, records, systems and accounts to verify compliance. Such inspection shall be undertaken by an independent public accountant or accounting firm appointed by the requesting party and about whom the other party does not express a legitimate concern. For the avoidance of doubt, this restricted annual audit shall not apply to for-cause audits, which may be conducted at any time. 19 [***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. + + + + + +12. GENERAL PROVISIONS 12.1 Notices. Except for invoices, which shall be sent in accordance with Schedule A, all notices required or permitted under this Agreement must be written and sent to the address or facsimile number identified in this Agreement or a subsequent notice. All notices must be given (a) by personal delivery, with receipt acknowledged, (b) by facsimile followed by hard copy delivered by the methods under (c) or (d), (c) by prepaid certified or registered mail, return receipt requested, or (d) by prepaid recognized next business day delivery service. Notices will be effective upon receipt or at such later time as stated in the notice. Notices shall be sent: If to Supplier: Ferrer Internacional, S.A. Attention: Legal Department Av. Diagonal, 549, 5t h Floor 08029 Barcelona, Spain If to CUTANEA: Cutanea Life Sciences, Inc. Attention: President and CEO 1500 Liberty Ridge Drive Suite 3000 Wayne, PA 19087 With a copy (which shall constitute notice) to: Cutanea Life Sciences, Inc. Attention: General Counsel 1500 Liberty Ridge Drive Suite 3000 Wayne, PA 19087 Fax: +1 484.652.0223 12.2 Entire Agreement; Amendment. The Parties hereto acknowledge that this Agreement, including the Quality Agreement and the Pharmacovigilance Agreement and any exhibits, schedules or other attachments hereto sets forth the entire agreement and understanding of the Parties and supersede all prior written or oral agreements or understandings with respect to the subject matter hereof. In the event of any conflict between this Agreement and the LSA, this Agreement will control with respect to issues of quality assurance, patient safety, Supply Unit Price and changes to it, and other terms and conditions customarily associated with supply agreements for commercial pharmaceutical products. Notwithstanding the precedent, in the event of any conflict between Quality Agreement and/or Pharmacovigilance Agreement and this Agreement, Quality Agreement or Pharmacovigilance Agreement shall prevail with respect to terms and conditions customarily associated with Quality or Pharmacovigilance as respectively applicable. No modification of any of the terms of this Agreement, or any amendments thereto, shall be deemed to be valid unless in writing and signed by the party against whom enforcement is sought. No course of dealing or usage of trade shall be used to modify the terms and conditions herein. 20 [***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. + + + + + +12.3 Waiver. No waiver by either party of any default shall be effective unless in writing, nor shall any such waiver operate as a waiver of any other default or of the same default on a future occasion. 12.4 Assignment. This Agreement shall be assignable or transferable by either party hereto only with the consent in writing of the other party, such consent not to be unreasonably withheld. However, Supplier shall be free to assign this Agreement along with the LSA in favor of any third party, provided that the succeeding entity assumes all of the obligations under this Agreement and the LSA, and further provided that Supplier provides CUTANEA with prior written notice of such assignment. Any assignments, including but not limited to, sale, transfer, or license of brand or Products, shall not release the original party hereto from their duties and obligations under this Agreement. For the purposes of this Agreement, the terms "subsidiaries" and "affiliates" shall mean any entity controlling, controlled by, or under common control with, either of the Parties hereto. 12.5 Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, without reference to any principles of conflicts of law thereof. Any suit or proceeding arising in respect of this Agreement will be tried exclusively in the United States District Court of the Southern District of the State of New York or, if that court declines to accept or does not have jurisdiction over a particular matter, any other State Court in the State of New York or Federal court of the United States of America located in the State of New York, and both parties irrevocably and unconditionally agree to submit to the exclusive jurisdiction of, and to venue in, such courts (and agree not to commence any action, suit, or proceeding relating thereto except in such courts). Both parties hereby irrevocably and unconditionally waive any objection to the laying of venue of any action, suit, or proceeding arising out of this Agreement in such court, and hereby further irrevocably and unconditionally waive and agree not to plead or claim in any such court that any such action, suit, or proceeding brought in any such court has been brought in an inconvenient forum. Both parties further agree that service of any process, summons, notice or document by U.S. registered mail to the respective addresses set forth below shall be effective service of process for any action, suit or proceeding brought against the parties in any such court. BOTH PARTIES HEREBY IRREVOCABLY WAIVE THE RIGHT TO A TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING REGARDING THE SUBJECT MATTER OF THIS AGREEMENT. 21 [***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. + + + + + +12.6 Severability. In the event that any term or provision of this Agreement shall violate any applicable statute, ordinance, or rule of law in any jurisdiction in which it is used, or otherwise be unenforceable, such provision shall be ineffective to the extent of such violation without invalidating any other provision hereof. 12.7 Headings, Interpretation. The headings used in this Agreement are for convenience only and are not a part of this Agreement. 12.8 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same original. 12.9 Independent Contractor. In performing its services hereunder, Supplier shall act as an independent contractor. [Signature page follows.] 22 [***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. + + + + + +IN WITNESS WHEREOF, the Parties hereto have each caused this Agreement to be executed by their duly authorized officers as of the date first above written. CUTANEA LIFE SCIENCES, INC. FERRER INTERNACIONAL, S.A. By: /s/ [***] By: /s/ [***] Its: [***] Its: [***] Date: Date: FERRER INTERNACIONAL, S.A. By: /s/ [***] Its: [***] Date: [***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. + + + + + +Schedule A Capitalized terms in this Exhibit A are defined in LSA. The initial purchase price for trade units of the Products shall be set at $[***] per [***] sample tube of the Product, $[***] per [***] trade unit of the Product, $[***] per [***] trade unit of the Product, and $[***] per [***] trade unit of the Product, FCA manufacturing site (the "Supply Unit Price"). Notwithstanding the foregoing, after December 31, 2018 and during the term of this Agreement, Ferrer may change its Supply Unit Price on any or all the Products from time to time, but no more than once annually, based on documented actual increases to Ferrer's direct manufacturing and labor (but specifically excluding overhead) costs (or those charged by its nominee), provided that Ferrer furnishes the Company with at least thirty (30) days prior written notice of any such change. The increase shall apply to any order received by Ferrer after the communication date of the increase. In the event that the new Supply Unit Price for the Products may make the business not feasible, the Parties, in good faith and through the Joint Steering Committee, agree to meet and negotiate in good faith an alternative solution. The purchase price for the Products shall be paid in US Dollars by the Company and such payment terms shall be [***] following the date that the Products are received and accepted (as per Article 4.4 of the LSA) by the Company, by wire transfer into an account designated by Ferrer. Invoices shall be generated upon shipment of Product from Supplier. Invoices should be sent by email to the following address: invoice@cutanea.com. Failure to send invoices to the email address provided herein may cause a delay in approval and payment. In the event that the Company does not fulfill such terms, Parties agree to discuss in good faith alternative payment conditions. In case there is not an agreement between the Parties after 30 days, Ferrer will accept an irrevocable and guaranteed letter of credit payable as term of payment. Additionally, Parties agree to share exchange EUR/ USD rate fluctuations covering the payment of royalties. More concretely, within the first 30 days after every calendar year, Ferrer will calculate the average annual EUR/USD rate based on the EUR/USD rates published in the Financial Times the last business day of every month. Such EUR/USD average rate will be compared with the rate applied in every invoice during the year. If, as a result of this reconciliation, there arises a difference above or under [***]%, Parties agree to share the resulting amount on an equitable basis (50%). Ferrer will report the reconciliation to the Company for its acceptance and, after 15 business days, issue an invoice which will be debited/credited in the next 30 days by wire transfer into the accounts designated by the Parties. [***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. \ No newline at end of file diff --git a/full_contract_txt/BIOPURECORP_06_30_1999-EX-10.13-AGENCY AGREEMENT.txt b/full_contract_txt/BIOPURECORP_06_30_1999-EX-10.13-AGENCY AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..34e021f9950d0d3506e9381a7d4b6748476d49c3 --- /dev/null +++ b/full_contract_txt/BIOPURECORP_06_30_1999-EX-10.13-AGENCY AGREEMENT.txt @@ -0,0 +1,323 @@ +1 EXHIBIT 10.13 + +2 + + BIOPURE CORPORATION AGENCY AGREEMENT + + This "Agency" Agreement is made as of March 29, 1999, by and between Biopure Corporation, a Delaware corporation (the "Company") and the Agent named on the signature page hereof (the "Agent"). + + WHEREAS, the Company is preparing to manufacture and sell Oxyglobin(R) brand veterinary products ("Products") enumerated on the Company's veterinary products agency price list (Exhibit A)(as such list may be changed by the Company from time to time, the "Price List"); and + + WHEREAS, the Agent and the Company wish to enter into an arrangement wherein the Agent would promote, sell, and collect payment for, such Products for the Company as a representative ("Agent") of the Company within the United States of America to duly licensed veterinarians (the "Customers") on the terms provided herein; + + NOW, THEREFORE, in consideration of the premises and of the mutual promises and covenants contained herein, the parties hereby agree as follows: + + 1. APPOINTMENT AND ACCEPTANCE. + + 1.1. Appointment. Subject to the terms and conditions of this Agreement, the Company hereby appoints the Agent, and the Agent hereby accepts appointment, as an authorized distributor agent within the Territory, (Territory as outlined in section 1.2), for the promotion, sale and collection of payment for, the Products to Customers. The Company has appointed a limited number of Agents; however, the Company retains the right to itself, and/or appoint others to, promote, sell, and collect payment for, and distribute, the Products to Customers in the Territory. + + 1.2. Territory. The Territory is defined as that geographical area in which said Agent is represented by a full time field sales representative, and of which assigned Distributor agrees to be responsible for mutually agreed upon quarterly and annual sales objectives as described in the "Business Plan". Compensation by the Company to the Agent will be limited to the area stated as follows: + + The 48 Continental United States (including DC) plus Alaska 3 + + -2- + +No compensation will be earned by the Agent for sales generated from customers in geographical areas not indicated in this section 1.2. + + 1.3. Business Plan. The Company and the Agent will jointly develop a written business plan for the promotion, distribution and sale of the Products to Customers in the Territory for each year (Nov 1 - Oct 31) during the term of this Agreement (a "Contract Year") and, on a nonbinding preliminary basis, for the next succeeding Contract Year (a "Business Plan"). Each Business Plan will include, among other things, sales and marketing strategies, advertising and promotion plans, financial projections (including projected sales, expenses and other customary items) and Agent performance criteria (including, but not limited to, market penetration, sales promotion execution, Product availability/accessibility and trade support). In the event of any conflict between this Agreement and a Business Plan, this Agreement will govern. The Business Plan relating to Contract Year ending Oct 31, 1999 will be agreed upon at least thirty (30) days after the Agent Launch Date (as defined below) or at a mutually agreed upon date and location. The Business Plan relating to all Contract Years thereafter will be agreed upon not less than sixty (60) days (or at a mutually agreed upon date and location) prior to the start of the Contract Year to which it relates. The Company and the Agent will negotiate the terms and conditions of each Business Plan in good faith, using their respective best efforts to agree upon such terms and conditions. The parties will review each then-current Business Plan quarterly and update such Business Plan from time to time as may be mutually agreed upon in writing. For purposes of this Agreement, "Agent Launch Date" means the date specified by the Company to the Agent in writing upon which the Agent is to begin promotion, sale, and collection of payment for, the Products to Customers in the Territory (which date is currently anticipated to be March 29, 1999). + + 1.4. Agent Obligations. Except as otherwise expressly provided in the Business Plan, the Agent will at its sole expense: + + (a) meet the Agent's performance criteria set forth in the Business Plan; + + (b) use its reasonable best efforts to market and promote the sale of the Products to Customers throughout those portions of the Territory in which the Agent has field sales representatives on and after the Agent Launch Date, through direct sales calls, advertising and other appropriate means (all such marketing and promotional activities to be in accordance with the Business Plan or as otherwise expressly proposed by the Agent and approved in writing by the Company); 4 + + + + + + -3- + + (c) immediately forward to the Company's Technical Service Department for response, in accordance with any procedures described in the Business Plan and in a mutually agreed upon format, (i) all complaints and inquiries relating to the Products (including, but not limited to, Product safety, quality and packaging, Customer satisfaction and Customer services) received by the Agent from Customers and consumers within the Territory except inquiries relating solely to Product availability, pricing, billing and/or delivery and (ii) all other inquiries relating to the Products received by the Agent from outside the Territory; + + (d) maintain a suitable staff in the Territory to enable the Agent for the proper promotion, sale, and merchandising of the Products and for seeking to assure Customer and consumer satisfaction with the Products; + + (e) not solicit or accept orders for the Products other than from Customers within the Territory after the Agent Launch Date; and not knowingly, or knowingly permit others to, distribute or resell Products outside the Territory or for end use by other than duly licensed veterinarians; + + (f) meet with the Company at least once each quarter (starting with the quarter in which the Agent Launch Date occurs), at a mutually agreeable time and place to discuss and review the Agent's activities hereunder, at which meeting the Agent will make available to the Company information concerning the Agent's sale and marketing of the Products in the Territory during the quarter and year-to-date, such information to include details of sales efforts, Product sales volume and such other information as may be mutually agreed upon in each Business Plan; + + (g) at least thirty (30) days prior to use or distribution of any sales, promotion or training materials relating to the Products (other than materials provided to the Agent by the Company for such purpose), submit such materials to the Company for review, give due consideration to any comments received from the Company with respect to such materials, and not use or distribute any such materials without the express prior written consent of the Company (which consent will not be unreasonably withheld or delayed); and + + (h) make all field sales personnel of the Agent available for at least four (4) hours, and telesales personnel available for at least one (1) hour, of initial Products sales and marketing training by the Company, and for such supplemental training by the Company as the Company may deem appropriate from time to time, in each case, at such times and locations as may be mutually agreed upon by the Company and the Agent. 5 + + -4- + + (i) make all field sales representatives of the Agent available to work with field sales representatives of the Company at least two (2) full business days per agreement year. + + (j) maintain sales and promotion of the Company's Products so as to meet or exceed the previous years annual sales within the same competitive environment. + + (k) cooperate and participate in any national or area promotional program offered by the company for any Products covered by this agreement. + + (l) follow the Company's credit policy (See Paragraph 2.3 Payment Terms) or program terms promptly in payment of goods shipped to the Customer. Product(s) shipped to the Customer will be billed to the Agent at the price stated on a current price list or according to the current price program minus a ten (10) percent discount as outlined in Paragraph 1.5(d). It is the responsibility of the Agent to evaluate the credit worthiness of the Customer. Upon transmitting an order for shipment to the Company, the Agent accepts full responsibility for payment of the product from the Customer. + + (m) transmit all orders, taken from the Customer for Product(s), a minimum of once daily basis, by either fax, electronic mail, or other agreed upon means of transmission so as to afford the Company time to process and ship said orders in an expediant manner. + + (n) sell products only at the Company's current stated list or promotional price. + + 1.5 Company Obligations. Except as otherwise expressly provided in the Business Plan, the Company will at its sole expense: + + (a) use its reasonable best efforts to fill and ship all accepted orders for Products received from the Agent on a daily basis so as to be shipped no later than the next business day. Orders received on Fridays or the day before holidays will not be shipped until the next business day unless special arrangements have been made at the customers expense. The Company will supply a list confirming such order shipments to the Agent by the end of the next business day. If orders exceed the available inventory levels, the Company will use reasonable efforts to inform the Agent and ship the remaining inventory in a manner that the Company deems as being fair and equitable. If product becomes available during a backorder, the Company will ship orders on a first-come, first-serve basis, but can, at its + + + + + +6 + + -5- + + own discretion, give partial shipments to large orders. In no event will the Company be obligated to provide Products to the Agent in excess of one hundred and twenty percent (120%) of any maximum quantity specified in the applicable Business Plan; + + (b) provide to the Agent's field sales personnel at least four (4) hours of initial Products sales and marketing training, and Agent telesales personnel at least one (1) hour of initial Product sales and marketing training, and such supplemental training, if any, as the Company may deem appropriate, in each case, at such times and locations as may be mutually agreed upon by the Company and the Agent. + + (c) supply such literature, ad reprints and other promotional aids and furnish Agent with other information that in the opinion of the Company may be helpful in the sale of listed Product(s). + + (d) compensate the Agent through a discount of eight (8) percent off of the current price of the Product times the total monthly units shipped at that price to the Customer in the Agent's Territory excluding any taxes, and/or shipping and handling charges incurred by the Company. The Company will compensate the Agent an additional two (2) percent through a discount off of the current price or promotional price of the Product times the total monthly units shipped at that price to the Customer excluding any taxes, and/or shipping and handling charges incurred by the Company, so as to compensate the Agent's sales representatives. Therefore, a total of ten (10) percent discount off of the current price list or promotional price times the total monthly units shipped at that price to the Customer will be applied as payment for services from the Agent including, but not limited to, the promotion, sales, and collection of payment from the Customer for Product shipped by the Company. In addition the Company will compensate the Agent quarterly an additional two (2) percent commission (incentive), exclusive of taxes, and /or shipping and handling charges incurred by the Company, based upon the attainment of mutually agreed upon quarterly goals. One (1) percent of this incentive is additional compensation for the Agent, and one (1) percent is for additional compensation of the Agency sales force. In the event the Agent fails to achieve these goals during any given quarter yet is able to achieve the overall annual goals, then the Agent will receive the incentive commission for that quarter at the conclusion of the fiscal year. These goals are outlined in exhibit B. + + (e) will replace, any unit of Product to the Customer which has outdated (provided the Product is not outdated more than ninety (90) days) with equal Product. 7 + + -6- + + 2. PRODUCTS PURCHASE AND SALE. + + 2.1. Orders. Each order for Products taken by the Agent from the Customer will be subject to acceptance by the Company and will not be binding upon the Company unless and until so accepted. The Company reserves the right, in its sole discretion, to accept or reject, in whole or in part, any Product order. All orders will be shipped to the Customer in minimum quantities of one box (two (2) bags). + + 2.2. Prices. Prices for the Products will be as set forth on the Price List. The current Price List is attached hereto as Exhibit A. Any deviation from current pricing as indicated by the Company is a violation of this contract. All prices are F.O.B. the Customer's facility and are exclusive of any federal, state or local sales, use, privilege, excise or similar taxes or duties levied upon any party. The Company will give the Agent at least ten (10) days prior written notice of any price change. In the event of a price change, orders will be invoiced at the prices in effect at the time of the Company's receipt of the order. + + 2.3. Payment Terms. Terms of payment by the Agent to the Company for Products shipped to the Customer will be net thirty (30) days from the date of statement unless the Agent chooses to pay the Company via electronic funds transfer in which case the terms of payment will be net forty-five (45) days. All payments will be made in United States Dollars without set-off or counterclaim, free and clear of (and without deduction for) any taxes, duties, charges, withholdings, restrictions or conditions of any nature imposed or levied by any political, taxing or other authority. + + 2.4. Taxes. The Customer will bear all taxes and duties which may be levied with respect to the purchase of the Products by the Agent (excluding any taxes on the Company's income therefrom), and the Company will bear all taxes and duties which shall be levied upon any of the Products if incidental to the Company's production of such Product or any component thereof. The Company will supply the Agent with such reasonable and necessary documents as may be required to carry out these provisions. + + 2.5. Claims. Any claim for shortage in Product delivery must be made within ten (10) business days after the Customer's receipt of shipment. See attachment "C", "General Information", for specific sales, shipping, and return policies. + + 2.6. Warranty. The Company hereby warrants that all Products sold to the + + + + + +Customer hereunder, at the time of shipment to the Customer, (a) will be merchantable and of generally commercially salable quality; and (b) will have a then remaining shelf life of at least twelve (12) months. The Company further 8 + + -7- + +warrants that the Products have been manufactured, labeled and packaged, and when in the Company's possession or under its control, have been handled, stored and shipped, in compliance with all applicable federal, state and local laws. The Customer's exclusive remedy for a breach of any of the foregoing warranties will be the replacement, at the delivery point thereof, freight prepaid, of any Product furnished hereunder that fails to meet the foregoing standards. In no event will the Company be liable for incidental or consequential damages. All claims by the Customer and/or Agent under this Paragraph 2.6 must be submitted in accordance with the Company's published bulletins concerning such claims, as such bulletins may be amended by the Company from time to time and furnished to the Agent. + + THE COMPANY MAKES NO WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR ANY OTHER WARRANTIES RELATING TO THE PRODUCTS, WHETHER EXPRESS OR IMPLIED, OTHER THAN THE WARRANTIES EXPRESSED IN THIS PARAGRAPH 2.6. ANY STATEMENTS MADE BY REPRESENTATIVES OF THE COMPANY WITH RESPECT TO THE PRODUCTS DO NOT CONSTITUTE WARRANTIES AND SHOULD NOT BE RELIED UPON BY THE AGENT. 9 + + -8- + + 3. COVENANTS. + + 3.1. Purchaser Guarantees, Instructions. The Agent will not furnish to any purchaser or user of the Products, or to any other third party, any guarantee or warranty with respect to the Products or any instructions for their use or maintenance, except as expressly approved in writing by the Company or as expressly stated on the Products' labeling and/or in materials provided by the Company to the Agent for such purpose. + + 3.2. Trademarks. The Agent will promote and sell the Products to Customers in the Territory only under such trademarks, copyrights, brand names and product names as the Company may have registered, or as the Company has otherwise requested be used on or in respect of Products sold within the Territory (together, the "Trademarks"). The Agent will use the Trademarks only in such fashion as has been expressly authorized by the Company in writing. Such use will not give the Agent any interest in the Trademarks, except the right to display the Trademarks as expressly provided herein. The Agent will not use any Trademark in connection with any products other than the Products. Upon the expiration or any termination of this Agreement, the Agent will immediately cease all use of the Trademarks. + + 3.3. Insurance. The Company and the Agent will each maintain, at their own expense, insurance with reputable insurers, such insurance to be in such form and amounts as are customary in the case of entities of established reputation engaged in the same or similar businesses and similarly situated, provided that such insurance will in any event include commercial general liability and umbrella liability insurance (including product liability coverage) for property damage, bodily injury and personal injury in an amount not less than Five Million Dollars ($5,000,000) combined single amount per occurrence and in the aggregate. Each such liability insurance policy of the Agent will name the Company (as its interest may appear) as an additional insured under the policy and provide for at least thirty (30) days prior written notice to the Company of any cancellation, modification or amendment of the policy. Each product liability insurance policy of the Company will name the Agent (as its interest may appear) as an additional insured under the policy and provide for at least thirty (30) days prior written notice to the Agent of any cancellation, modification, or amendment of this policy. Each party will furnish to the other upon request a Certificate of Insurance or other documentation reasonably satisfactory to the other evidencing compliance with this Paragraph 3.3. 10 + + -9- + + 3.4. Notice of Certain Events. The Agent will promptly notify the Company in the event the Agent becomes aware of any of the following events: alleged infringement of the Trademarks by any third party; alleged infringement of the trademark or proprietary rights of others in connection with actions taken hereunder; liability claims relating to the Products and any other event that may reasonably be expected to have a material adverse effect upon the sale or distribution of the Products in the Territory. + + 3.5. Indemnification. + + (a) Subject to Subparagraph (c) below, the Agent will indemnify the Company (and its officers, directors, employees, agents and affiliates) and hold it (and them) harmless from and against all loss, damage, liability, cost or expense of any nature whatsoever, including, without limitation, any and all reasonable attorneys fees and court costs (together, a "Loss"), arising out of or in connection with (i) the inaccuracy or breach of any representation, warranty or obligation of the Agent hereunder and/or (ii) the activities of the Agent in connection with the promotion, sale or collection of payment of the Products in violation of this Agreement, law or any other duty or obligation of the Agent. In no way should the Agent be liable for incidental or consequential damages. + + + + + + (b) Subject to Subparagraph (c) below, the Company will indemnify the Agent (and its officers, directors, employees, agents and affiliates) and hold it (and them) harmless from and against any Loss arising out of or in connection with the inaccuracy or breach of any representation, warranty or obligation of the Company hereunder. + + (c) Each party (the "Notifying Party") will promptly notify the other party (the "Indemnifying Party") of the existence of any third party claim, demand or other action giving rise to a claim for indemnification under this Paragraph 3.5 (a "Third Party Claim") and will give the Indemnifying Party a reasonable opportunity to defend the same at its own expense and with its own counsel provided that the Notifying Party will at all times have the right to participate in such defense at its own expense. If, within thirty (30) days after receipt of a notice of a Third Party Claim the Indemnifying Party fails to undertake to so defend, the Notifying Party will have the right, but not the obligation, to defend and to compromise or settle (exercising reasonable business judgment) the Third Party Claim for the account and at the risk and expense of the Indemnifying Party subject to the Indemnifying Party's prior written approval (such approval not to be unreasonably withheld or delayed). Each party will make available to the other, at the other's reasonable expense, such information and assistance as 11 + + -10- + + the other may reasonably request in connection with the defense of a Third Party Claim. + + 3.6. Assistance with Claims. Subject to Paragraph 3.5 hereof, each party will, at the request and expense of the other, furnish such reasonable assistance as may be required to enable the other party to defend itself against third party claims threatened or filed in connection with the manufacture, distribution, sale or use of the Products. + + 3.7. Confidential Information and Publicity. From time to time during the term of this Agreement either party may disclose or make available to the other Confidential Information (as defined below) in connection with activities contemplated hereunder. Except as may be required by law or as may be reasonably necessary to enforce rights hereunder, each party agrees that during the term of this Agreement and thereafter (a) it will use Confidential Information belonging to the other solely for the purpose(s) of this Agreement and (b) it will not disclose Confidential Information belonging to the other to any third party (other than its employees and/or consultants reasonably requiring such Confidential Information for purposes of this Agreement who are bound by obligations of nondisclosure and limited use at least as stringent as those contained herein) without the express prior written consent of the disclosing party. Each party further agrees that except as reasonably necessary for performance hereunder or otherwise expressly required by law, it will not publicly announce or otherwise disclose any of the terms and conditions of this Agreement without the express prior written consent of the other. Except as may be otherwise expressly provided in the Business Plan, or as may be required by law or reasonably necessary to enforce rights hereunder, neither party will use the name of the other in any advertising, promotional or sales materials relating to the Products, in any press release, or in any other manner whatsoever without the express prior written consent of the other. Each party will promptly return to the other upon request any Confidential Information of the other party then in its possession or under its control. The provisions of this Paragraph 3.7 will survive the expiration or any termination of this Agreement. For purposes of this Agreement, "Confidential Information" means, with respect to either party, any and all information (including, but not limited to, financial data and information concerning products, customers and business operations) in any form belonging to such party except information which at the relevant time is (a) known to the public through no act or omission in violation of this Agreement, (b) furnished to the receiving party by a third party having the lawful right to do so, (c) known to the receiving party prior to disclosure hereunder (as established by written documentation thereof) or (d) independently developed by the receiving party without reference to the Confidential Information. 12 + + -11- + + 4. TERM AND TERMINATION. + + 4.1. Term. This Agreement will become effective as of the date first written above and will continue in effect thereafter until terminated pursuant to Paragraph 4.2 below. + + 4.2. Termination. This Agreement may be terminated as follows: + + (a) In the event that either party fails in any material respect to observe or perform any of its obligations under this Agreement (with respect to the Agent, including but not limited to Agent performance criteria set forth in each Business Plan), which failure is not remedied within thirty (30) days (or, in the case of payments due, within five (5) business days), after receipt of written notice from the other party specifying such failure, this Agreement shall automatically terminate. + + (b) In the event of any material change in the organization, ownership, management or control of the business of the Agent, the Company may, at its option, terminate this Agreement upon giving written notice of termination to the Agent. The Agent will promptly advise the Company in writing of any event described in this Paragraph 4.2(b). + + + + + + (c) Either party may, at its option, terminate this Agreement without cause, effective at any time after January 31, 1999, upon giving at least ninety (90) days prior written notice of such termination to the other party. + + (d) If after exercise of good faith efforts, the parties fail to timely agree upon a Business Plan for any Contract Year before the start of such year (with respect to the Business Plan for Contract Year ending October 31, 1999, at least thirty (30) days or on a mutually agreed upon date after the Agent Launch Date), this Agreement may be terminated by either party upon giving at least thirty (30) days prior written notice of such termination to the other party. + + (e) In the event of any publicity concerning the Agent which the Company reasonably believes to have a material adverse affect upon the status or reputation of the Agent and/or the Products, the Company may, at its option, terminate this Agreement upon giving at least five (5) days prior written notice of such termination to the Agent. + + (f) In the event the Company terminates, sells or otherwise transfers its veterinary products business in its entirety, the Company may 13 + + -12- + + terminate this Agreement upon giving at least ninety (90) days prior written notice of such termination to the Agent. + + 4.3. Effect of Termination. Upon the termination of this Agreement for any reason: + + (a) the Agent will immediately discontinue making any representations regarding its status as an agent for the Company and will immediately cease conducting any activities with respect to the promotion, sale or distribution of the Products; + + (b) all amounts owed by either party to the other will become immediately due and payable as indicated in section 2.3; + + (c) any then unfulfilled Product orders hereunder may be completed by the Company or transferred to another Agent in the Company's discretion. Any termination of this Agreement will be without prejudice to the settlement of the rights created and obligations incurred hereunder prior to the time of such termination. In no event will either party be liable for special or consequential damages arising out of the breach or the termination of this Agreement. The provisions of this Paragraph 4.3 and of Paragraphs 3.5, 3.6, and 3.7 will survive the termination of this Agreement. + + 5. MISCELLANEOUS. + + 5.1. Notices. All notices and other communications between the parties given pursuant to this Agreement will be deemed to have been sufficiently given when delivered by personal service or sent by recognized overnight courier service, telecommunication or registered U.S. Mail to the recipient at the address indicated on the signature page hereof. All such communications will be deemed effective on the earlier of (a) actual receipt or (b) if sent by courier service, on the next business day following the date delivered to the courier service (the courier service's receipt being evidence of the date of such delivery), or (c) if sent by telecommunication on the next business date (subject to confirmation of receipt in complete readable form), or (d) if sent by registered U.S. Mail, five (5) business days after delivery to the U.S. Postal Service, postage prepaid. Either party may give to the other written notice of change of address, in which event any communication will thereafter be given to such party at such changed address. + + 5.2. Assignment. This Agreement will be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns. 14 + + -13- + +Neither party will not assign or otherwise transfer any of its rights or obligations under this Agreement without the express prior written consent of the other party. + + 5.3. Waivers. Any waiver by either party of any rights arising from a breach of any covenants or conditions of this Agreement must be in writing and will not be construed as a continuing waiver of other breaches of the same nature or other covenants or conditions of this Agreement. + + 5.4. Relationship of Parties This Agreement is not intended to create, nor should it be construed as creating, a joint venture, partnership or similar relationship between the parties. The Agent will act solely as an independent agent and will have no right to bind the Company in any way or to represent that the Company is in any way responsible for any acts or omissions of the Agent. + + 5.5. Force Majeure. Notwithstanding any other provision of this Agreement, if either the Company or the Agent is delayed in or prevented from fulfilling any of its obligations hereunder by reason of any cause beyond its reasonable control (including, but not limited to acts of God, fire, third party strike, + + + + + +flood, delay of transportation or inability to obtain necessary raw materials through normal commercial channels), then that party will not be liable under this Agreement for damages resulting from such delay or failure. Each party will promptly notify the other upon becoming aware of the occurrence of any such cause and will use its reasonable best efforts to minimize any resulting delay in or interference with the performance of its obligations hereunder. + + 5.6. Governing Law; Jurisdiction. This Agreement and all related business transactions will be governed by the laws of the Commonwealth of Massachusetts (without reference to principles of conflicts or choice of law which would cause the application of the internal laws of any other jurisdiction). The courts of or in the Commonwealth of Massachusetts will have nonexclusive jurisdiction over any disputes hereunder. Service of any action or proceeding in any such courts by either party may be made upon the other by registered mail, return receipt requested, at its address given herein. + + 5.7. Amendments. Neither this Agreement nor any provision hereof may be amended except by a writing duly signed on behalf of each party. + + 5.8. Remedies. All remedies available to either party for breach of this Agreement are cumulative and may be exercised concurrently or separately. The exercise of one remedy will not be deemed an election of such remedy to the exclusion of other remedies. + + 5.9. Severability. In the event any provision of this Agreement, in whole or in part, is invalid, unenforceable or in conflict with the applicable laws or 15 + + -14- + +regulations of any jurisdiction, such provision will be replaced, to the extent possible, with a provision which accomplishes the original business purposes of the provision in a valid and enforceable manner, and the remainder of this Agreement will remain unaffected and in full force provided, however, that if without such invalid or unenforceable provision the fundamental mutual objectives of the parties cannot be achieved, either party may terminate this Agreement without penalty by written notice to the other. + + 5.10. Interest. Any overdue amounts payable hereunder will bear interest, payable on demand (whether before or after judgment), from due date to date of payment, at an annual rate of two percent (2%) above the prime rate of Citibank, N.A. in effect on the due date or, if lower, the maximum rate permitted by applicable law. + + 5.11. Miscellaneous. Each party will bear its own expenses in connection with the negotiation, preparation and execution of this Agreement. The headings of the paragraphs and subparagraphs of this Agreement have been added for the convenience of the parties and are not be deemed a part hereof. This Agreement may be executed in any number of counterparts, all of which together constitute a single agreement. In proving this Agreement, it will not be necessary to produce or account for more than one counterpart signed by the party with respect to which proof is sought. This Agreement is the sole understanding and agreement of the parties with respect to its subject matter and supersedes all other such prior or contemporaneous oral and written agreements and understandings. + + Signed, sealed and delivered by a duly authorized representative of each party hereto as of the date first written above. + +THE BUTLER COMPANY BIOPURE CORPORATION + +By: By: -------------------------------- -------------------------------- Andrew W. Wright, Title: Vice President, Veterinary ----------------------------- Products + +Address: Address: 11 Hurley Street --------------------------- Cambridge, MA 02141 Telecopy No.: (617) 234-6507 --------------------------- + + --------------------------- 16 + + EXHIBIT A + + BIOPURE CORPORATION + + Oxyglobin(R) Brand Products Price List (Introductory Promotional Pricing*) + +Each Box contains two 125 ml bags of Oxyglobin(R) Brand Veterinary Product. + + Retail Price Retail Price Per Bag ------------ -------------------- 1 Box of 2 Bags $279.90 $139.95 2 Boxes of 2 Bags $499.80 $124.95 3 Boxes of 2 Bags $749.70 $124.95 4 Boxes of 2 Bags $999.60 $124.95 5 Boxes of 2 Bags $1099.50 $109.95 + + + + + +- ---------- + + *May be changed with 30 days written notice. + + Effective Date: January 5, 1999 17 + + EXHIBIT B + + OXYGLOBIN(R) BUSINESS PLAN FISCAL YEAR 1999 (Nov 1, 1998 through Oct 31, 1999) + +AGENT: THE BUTLER COMPANY FY: 1999 + + QUARTERLY GOALS + + 1st Quarter (Nov 1 - Jan 31): N/A units + +2nd Quarter (Feb 1 - Apr 30): 3,500 units + +3rd Quarter (May 1 - Jul 31): 7,000 units + +4th Quarter (Aug 1 - Oct 31): 8,400 units + +Fiscal Year Total: 18,900 units + + Unit = 1 Bag of Oxyglobin Solution 125 ml + + PROMOTIONAL ACTIVITIES + +Sales Meetings: Anticipated Dates ______________________________________________ + +________________________________________________________________________________ + +________________________________________________________________________________ + +Ride Withs (# Per Quarter) 1st Qtr ____________ + + 2nd Qtr ____________ + + 3rd Qtr ____________ + + 4th Qtr ____________ + + Total for Year ____________ 18 + +Conferences with Display of Biopure Product:____________________________________ + +________________________________________________________________________________ + +________________________________________________________________________________ + +________________________________________________________________________________ + +Agent Monthly Flyer, Catalog, Other ____________________________________________ + +________________________________________________________________________________ + +________________________________________________________________________________ + +________________________________________________________________________________ + +Other Activities (Dinner Meeting Support, Advertising, Mailings, etc)___________ + +________________________________________________________________________________ + +________________________________________________________________________________ + +________________________________________________________________________________ + +THE BUTLER COMPANY: BIOPURE CORPORATION: + +- ---------------------------- ---------------------------- Name Name + +- ---------------------------- ---------------------------- Title Title + +- ---------------------------- ---------------------------- Date Date \ No newline at end of file diff --git a/full_contract_txt/BLACKBOXSTOCKSINC_08_05_2014-EX-10.1-DISTRIBUTOR AGREEMENT.txt b/full_contract_txt/BLACKBOXSTOCKSINC_08_05_2014-EX-10.1-DISTRIBUTOR AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..fcaab39c2c6f6df97117ad5e3391409faed75080 --- /dev/null +++ b/full_contract_txt/BLACKBOXSTOCKSINC_08_05_2014-EX-10.1-DISTRIBUTOR AGREEMENT.txt @@ -0,0 +1,145 @@ +Exhibit 10.1 DISTRIBUTOR AGREEMENT + +THIS AGREEMENT is made this 1st day of August, 2013, (the "Effective Date"), by and between Snotarator LLC, a Texas limited liability company, with its principal place of business located at 2591 Dallas Parkway, Suite 102, Frisco, Texas 75034 (the "Company") and SMSA Ballinger Acquisition Corp., a Nevada corporation, with offices at 12890 Hilltop Road, Argyle, Texas 76226 (the "Distributor"). + +NOW, THEREFORE, in consideration of the promises hereinafter made by the parties hereto, it is agreed as follows: ARTICLE I APPOINTMENT OF DISTRIBUTORSHIP + +1.01. Distribution Right. The Company hereby appoints and grants Distributor the exclusive right to sell the products of the Company, including the Snotarator™ Nasal Aspirator, ("Products") listed in the current "Price List" (Exhibit "A" attached hereto). The distribution right shall be limited to all countries and all of their territories and possessions within the continent known as South America ("Territory") (Exhibit "B" attached hereto). Distributor agrees that the Products, including the name Snotarator ™ Nasal Aspirator (the "Brand") are the sole property of the Company and Distributor has no interest whatsoever in such Brand and Products, and Distributor shall use the Brand and Products only for so long as the rights granted hereby remains in full force and effect. Distributor shall not take any actions, or aid or assist any other party to take any actions that would infringe upon, harm or contest the proprietary rights of Company in and to the Brand and Products. Distributor shall not assign the rights granted in this Section 1.01 without the prior written consent of the Company. + +1.02 Prices. All prices stated are in United States dollars and FOB the Company's offices in Frisco, Texas. Prices do not include transportation costs which shall be borne by Distributor. + +1.03. Terms. Terms are net cash upon delivery. + +1.04. Competitive Products. Distributor agrees not to represent or sell other products which are deemed to be competitive with the Company's Products unless agreed to by the Company by written notice. + +ARTICLE II MARKETING AND SUPPORT + +2.01. Sales. Distributor shall use commercially reasonable efforts to market, distribute and promote the Brand and Products in the Territory at its own cost. + +ARTICLE III DELIVERY + +3.01. Purchase Orders. Distributor shall order Products by written notice to Company. Each order shall specify the number of units to be shipped, the type of units to be shipped (as identified by Company model number designations indicated in the Price List) including all optional features, the desired method of shipment. Company shall indicate its acceptance of such purchase order by returning a signed copy to Distributor. Company agrees to ship units to Distributor as close as possible to the delivery schedule set forth in each order as accepted by Company, unless Company otherwise indicates in writing + +3.02. Shipment. All shipments of Products shall be made FOB Company's office and liability for loss or damage in transit, or thereafter, shall pass to Distributor upon Company's delivery of Products to a common carrier for shipment. Shipping dates are approximate and are based, to a great extent, on prompt receipt by Company of all necessary ordering information from Distributor. Distributor shall bear all costs of transportation and insurance and will promptly reimburse Company if Company prepays or otherwise pays for such expenses. Company shall not be in default by reason of any failure in its performance under this Agreement if such failure results from, whether directly or indirectly, fire, explosion, strike, freight embargo, Act of God or of the public enemy, war, civil disturbance, act of any government, de jure or de facto, or agency or official thereof, material or labor shortage, transportation contingencies, unusually severe weather, default of any other manufacturer or a supplier or subcontractor, quarantine, restriction, epidemic, or catastrophe, lack of timely instructions or essential information from Distributor, or otherwise arisen out of causes beyond the control of the Company. Nor shall the Company at any time be liable for any incidental, special or consequential damages. + + + + + + + +3.03. Cancellation. Distributor may, at any time prior to the scheduled date of shipment, cancel any or all Products on order upon giving timely written notice. + +ARTICLE IV PATENT AND TRADEMARK INFRINGEMENT + +4.01 Patent Infringement. Company agrees, at its own expense, to indemnify, defend and hold harmless each Distributor and its customers from and against every expense, damage, cost and loss (including attorneys' fees incurred) and to satisfy all judgments and decrees resulting from a claim, suit or proceeding insofar as it is based upon an allegation that any Product or any part thereof furnished by Company or any process which is practiced in the customary use of the Product is or has been infringing upon any patent, copyright or proprietary right, if Company is notified promptly of such claim in writing and given authority, and full and proper information and assistance (at Company's expense) for the defense of same. In case any Product, or any part thereof, if such suit is held to constitute an infringement and the use of said Product or part is enjoined, Company shall, in its sole discretion and at its own expense, either procure for the indemnitee the right to continue using said Product or provide or procure for the Distributor a similar product. + +4.02 Trademark Infringement. The Company has registered the mark Snotarator ™ in the United States. Distributor agrees it will not at any time, either during the term of this Agreement or thereafter, use the Brand, Products or Snotarator™ mark in any manner that might infringe upon the Company's ownership rights to same directly or indirectly. Distributor shall indemnify and hold the Company and its affiliates harmless from and against any and all claims, judgments, costs, awards, expenses (including reasonable attorney fees) and liabilities of every kind arising from Distributor's fault or negligence in its use of the Snotarator ™ mark and in the marketing and distribution of the Products within the Territory. + +ARTICLE V WARRANTY + +5.01. Products Warranty. Company warrants that Distributor shall acquire Products purchased hereunder free and clear of all liens and encumbrances except for Company's purchase money security interest defined in Section 1.03, above. Company further warrants all Products to be free from defects in material or workmanship under normal use and service for a period of ninety (90) days from the date of delivery. Any defects must be replaced by the Company within sixty (60) days within this scope of the warranty and all charges for labor and material, will be borne by Company. If it is determined that either no fault exists in Company, or the damage was caused by negligence of Distributor, its agents, employees or customers, Distributor agrees to pay all charges associated with each such replacement. THIS CONSTITUTES THE SOLE WARRANTY MADE BY COMPANY EITHER EXPRESSED OR IMPLIED. THERE ARE NO OTHER WARRANTIES EXPRESSED OR IMPLIED WHICH EXTEND BEYOND THE FACE HEREOF, HEREIN, INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. IN NO EVENT SHALL COMPANY BE LIABLE FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES AND DISTRIBUTOR'S REMEDIES SHALL BE LIMITED TO REPAIR OR REPLACEMENT OF NONCONFORMING UNITS OR PARTS. 2 + + + + + + + +ARTICLE VI DURATION OF AGREEMENT + +6.01. Term. The term of this Agreement shall terminate on May 31, 2015, unless sooner terminated. Termination shall not relieve either party of obligations incurred prior thereto. The term of this Agreement may be extended for an additional two year period with the written consent of both parties. + +6.02. Termination. This Agreement may be terminated only: + +(a) By either party for substantial breach of any material provision of this Agreement by the other, provided due notice has been given to the other of the alleged breach and such other party has not cured the breach within (30) days] thereof; or + +(b) By the Company if: there is an unacceptable change in the control or management of the Distributor; if the Distributor makes an assignment for the benefit of creditors; if a petition in bankruptcy is filed by or against the Distributor, resulting in an adjudication of bankruptcy; or, if the Distributor fails to pay its debts as they become due and provided due notice has been given by the Company to the Distributor and the Distributor has not cured such breach within thirty (30) days thereof; or (c) By the written consent of both parties; + + (d) Upon termination of this Agreement all further rights and obligations of the parties shall cease, except that Distributor shall not be relieved of (i) its obligation to pay any monies due, or to become due, as of or after the date of termination, and (ii) any other obligation set forth in this Agreement which is to take effect after the date of termination. + +ARTICLE VII NOTICES + +7.01. Notice or Communication. Any notice or communication required or permitted hereunder shall be in writing and shall be sent by international courier or registered mail, return receipt requested, postage prepaid and addressed to the addresses set forth below or to such changed address as any party entitled to notice shall have communicated in writing to the other party. Purchase orders and other administrative notices may be sent by facsimile transmission or regular mail. Notices and communications to Company shall be sent to: + +Snotarator LLC 2591 Dallas Parkway Suite 102 Frisco, Texas 75034 + +Notices and communications to Distributor shall be sent to address shown on first page of this Agreement. Any notices or communications to either party hereunder shall be deemed to have been given when deposited in the mail, addressed to the then current address of such party. + +7.02 . Date of Effectiveness. Any such notice or communication so mailed shall be deemed delivered and effective seventy-two (72) hours after mailing thereof in the United States. + +ARTICLE VIII CONFIDENTIALITY 3 + + + + + + + +8.01 . Confidentiality. Each party agrees to maintain in confidence and not to use except for the purpose of this Agreement any information of a confidential nature such as technical information and data, commercial information and know-how, price structures, administrative and operational costs, or other information relating to each other's business operations or in the case of Distributor to the Brand and Products whether disclosed prior to the Effective Date or thereafter. Each party's obligation of confidentiality and limitation upon use shall not apply to any information to the extent that the receiving party can show that such information: + +a) is or became generally available to the public otherwise than by reason of breach by the receiving party of the provisions of this Agreement; + +b) was known to the receiving party prior to the date of the Agreement provided that documentary evidence of such knowledge is provided to the disclosing party on request; + +c) was subsequently disclosed to the receiving party without obligation of confidentiality by a third party owing no such obligations to the disclosing party in respect of such information; + +d) is required by laws to be disclosed but then only when, to the extent reasonably practicable, prompt notice of this requirement has been given to the original disclosing party so that it may seek appropriate relief to prevent or limit such disclosure. + +Except as required by applicable laws or court order or as otherwise permitted under this Agreement, all publicity, press releases and public announcements, in each case relating to the Brand and Products in the Territory and/or the transactions contemplated hereby shall be reviewed in advance by, and shall be subject to the written approval (such approval not to be unreasonably withhold) of both the Company and Distributor. The parties hereto may disclose the existence of this Agreement and the terms and conditions hereof, without the prior written consent of the other parties, as may be required by applicable laws, in which case the party seeking to disclose the information shall give the other parties reasonable advanced notice and review of any such disclosure and shall seek confidential treatment of such information to the extent possible under applicable law. + +ARTICLE IX GENERAL PROVISIONS + +9.01. Relationship of Parties. The relationship between the parties established by this Agreement shall be solely that of vendor and vendee and all rights and powers not expressly granted to the Distributor are expressly reserved to the Company. The Distributor shall have no right, power or authority in any way to bind the Company to the fulfillment of any condition not herein contained, or to any contract or obligation, expressed or implied. + +9.02. Independence of Parties. Nothing contained in this Agreement shall be construed to make the Distributor the agent for the Company for any purpose, and neither party hereto shall have any right whatsoever to incur any liabilities or obligations on behalf or binding upon the other party. The Distributor specifically agrees that it shall have no power or authority to represent the Company in any manner; that it will solicit orders for Products as an independent contractor in accordance with the terms of this Agreement; and that it will not at any time represent the Company in any manner; that it will solicit orders for Products as an independent contractor in accordance with the terms of this Agreement; and that it will not at any time represent orally or in writing to any person or corporation or other business entity that it has any right, power or authority not expressly granted by this Agreement. + +9.03. Indemnity. The Distributor agrees to hold the Company free and harmless from any and all claims, damages, and expenses of every kind or nature whatsoever (a) arising from acts of the Distributor; (b) as a direct or indirect consequence of termination of this Agreement in accordance with its terms; or (c) arising from acts of third parties in relation to Products sold to the Distributor under this Agreement, including, but not limited to execution of liens and security interests by third parties with respect to any such Products. 4 + + + + + + + +9.04. Entire Agreement. The entire Agreement between the Company and the Distributor covering the Products is set forth herein and any amendment or modification shall be in writing and shall be executed by duly authorized representatives in the same manner as this Agreement. The provisions of this Agreement are severable, and if any one or more such provisions are determined to be illegal or otherwise unenforceable, in whole or in part, under the laws of any jurisdiction, the remaining provisions or portions hereof shall, nevertheless, be binding on and enforceable by and between the parties hereto. Any provisions, terms or conditions of Distributor's purchaseoOrders which are, in any way contradicting of this Agreement, except those additional provisions specifying quantity and shipping instructions, shall not be binding upon Company and shall have no applicability to the sale of goods by Company to Distributor. + +9.05. Applicable Law. This Agreement shall be governed by the laws of the State of Texas. All payments hereunder shall be made at Company's offices at Frisco, Texas. Company's rights granted hereby are cumulative and in addition to any rights it may have at law or equity. + +9.06. Separate Provisions. If any provision of this Agreement shall be held to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall in no way be affected or impaired thereby. + +9.07. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and assigns. Distributor shall not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Company. + +IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized officers as of the date and year indicated above. + +SNOTARATOR LLC + +By:/s/ Orsolya Peresztegi Orsolya Peresztegi Title: President and Manager + +DISTRIBUTOR SMSA Ballinger Acquisition Corp. + +By:/s/ Timothy P. Halter Timothy P. Halter Title: President and Sole Director 5 + + + + + + EXHIBIT A + +SNOTARATOR PRICE LIST AS OF AUGUST 1, 2013 + +Description of Product + +Snotarator® Nasal Aspirator + +Price per Unit 1,000 to 5,000 Units* - $4.50 per unit 5,000 to 10,000 Units - $4.15 per unit Over 10,000 Units - $3.95 per unit + +____________________________________ *Minimum order of 1,000 Units + + + + + + EXHIBIT B DESCRIPTION OF THE TERRITORY + +The Territory which is subject to Section 1.01 of this Agreement includes all countries and all of their territories and possessions within the continent known as South America. \ No newline at end of file diff --git a/full_contract_txt/BLACKROCKMUNIHOLDINGSINVESTMENTQUALITYFUND_04_07_2020-EX-99.01-JOINT FILING AGREEMENT.txt b/full_contract_txt/BLACKROCKMUNIHOLDINGSINVESTMENTQUALITYFUND_04_07_2020-EX-99.01-JOINT FILING AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..b9681b4fdcebe58c3c82ed0efc47cf9a558371a2 --- /dev/null +++ b/full_contract_txt/BLACKROCKMUNIHOLDINGSINVESTMENTQUALITYFUND_04_07_2020-EX-99.01-JOINT FILING AGREEMENT.txt @@ -0,0 +1,13 @@ +JOINT FILING AGREEMENT + +Pursuant to and in accordance with the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the rules and regulations thereunder, each party hereto hereby agrees to the joint filing, on behalf of each of them, of any filing required by such party under Section 13 or Section 16 of the Exchange Act or any rule or regulation thereunder (including any amendment, restatement, supplement, and/or exhibit thereto) with the Securities and Exchange Commission (and, if such security is registered on a national securities exchange, also with the exchange), and further agrees to the filing, furnishing, and/or incorporation by reference of this agreement as an exhibit thereto. This agreement shall remain in full force and effect until revoked by any party hereto in a signed writing provided to each other party hereto, and then only with respect to such revoking party. + +IN WITNESS WHEREOF, each party hereto, being duly authorized, has caused this agreement to be executed and effective as of the date set forth below. + +Date: April 7, 2020 BANK OF AMERICA CORPORATION + +By: Ally Pecarro Name: Ally Pecarro Title: Attorney-in-fact + +BANC OF AMERICA PREFERRED FUNDING CORPORATION + +By: Michael Jentis Name: Michael Jentis Title: Authorized Signatory \ No newline at end of file diff --git a/full_contract_txt/BLACKSTONEGSOLONG-SHORTCREDITINCOMEFUND_05_11_2020-EX-99.(K)(1)-SERVICE AGREEMENT.txt b/full_contract_txt/BLACKSTONEGSOLONG-SHORTCREDITINCOMEFUND_05_11_2020-EX-99.(K)(1)-SERVICE AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..da5775363213219487751c6b4600ef748a9536a3 --- /dev/null +++ b/full_contract_txt/BLACKSTONEGSOLONG-SHORTCREDITINCOMEFUND_05_11_2020-EX-99.(K)(1)-SERVICE AGREEMENT.txt @@ -0,0 +1,377 @@ +Exhibit (k)(1) + +SERVICE AGREEMENT + +FOR + +TRANSFER AGENT SERVICES + +TO + +BLACKSTONE / GSO LONG-SHORT CREDIT INCOME FUND + +Rev. December 2009 + + + + + +THIS SERVICE AGREEMENT FOR TRANSFER AGENT SERVICES (this "Agreement") between Blackstone / GSO Long-Short Credit Income Fund, a Delaware statutory trust ("Client") and Mellon Investor Services LLC (operating with the service name BNY Mellon Shareowner Services), a New Jersey limited liability company ("Agent"), is dated as of January 26, 2011. + +1. Appointment. Client appoints Agent as its transfer agent, registrar and dividend disbursing agent and Agent accepts such appointment in accordance with and subject to the following terms and conditions for all authorized shares of each class of stock listed in Exhibit A hereto (the "Shares"). + +2. Term of Agreement. Agent's appointment hereunder shall commence on the next business day after the later of (i) the date hereof, or (ii) the date Agent has confirmed that Client's records have been converted to Agent's system (the "Effective Date"), and shall continue for three years thereafter (the "Initial Term"). Unless either party gives written notice of termination of this Agreement at least 60 days prior to the end of the Initial Term, or any successive three-year term, this Agreement shall automatically renew for successive additional three-year terms; provided, however, that this Agreement shall automatically terminate upon the dissolution of the client. + +3. Duties of Agent. Commencing on the Effective Date, Agent shall provide the services listed in Exhibit B hereto, in the performance of its duties hereunder. 4. Representations, Warranties and Covenants of Client. Client represents, warrants and covenants to Agent that: + +(a) it is a statutory trust duly organized and validly existing under the laws of its state of incorporation; + +(b) the Shares issued and outstanding on the date hereof have been duly authorized, validly issued and are fully paid and are non- assessable; and any Shares to be issued hereafter, when issued, shall have been duly authorized, validly issued and fully paid and will be non- assessable; + +(c) the Shares issued and outstanding will be duly registered under the Securities Act of 1933, as amended (the "Securities Act"), and such registration will have become effective, or are exempt from such registration; and will be duly registered under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or are exempt from such registration; + +(d) any Shares to be issued hereafter, when issued, shall have been duly registered under the Securities Act, and such registration shall have become effective, or shall be exempt from such registration; and shall have been duly registered under the Exchange Act, or shall be exempt from such registration; + + + + + +(e) Client has paid or caused to be paid all taxes, if any, that were payable upon or in respect of the original issuance of the Shares issued and outstanding on the date hereof; + +(f) the use of facsimile signatures by Agent in connection with the countersigning and registering of Share certificates of Client has been duly authorized by Client and is valid and effective; + +(g) the execution and delivery of this Agreement, and the issuance and any subsequent transfer of the Shares in accordance with this Agreement, do not and will not conflict with, violate, or result in a breach of, the terms, conditions or provisions of, or constitute a default under, the Amended and Restated Agreement Declaration of Trust or the by-laws of Client, any law or regulation, any order or decree of any court or public authority having jurisdiction, or any mortgage, indenture, contract, agreement or undertaking to which Client is a party or by which it is bound, except where such contravention does or would not have a material adverse effect on the Fund's ability to carry out its obligations hereunder. This Agreement has been duly authorized, executed and delivered by Client and is enforceable against Client in accordance with its terms, except as may be limited by bankruptcy, insolvency, moratorium, reorganization and other similar laws affecting the enforcement of creditors' rights generally; and + +(h) Client agrees to provide to Agent the documentation and notifications listed in Exhibit C hereto according to the requirements set forth therein. + +5. Representations, Warranties and Covenants of Agent. Agent represents, warrants and covenants to Client that: + +(a) Agent is a limited liability company duly organized and validly existing under the laws of its state of organization; + +(b) Agent is, and for the term of this Agreement shall remain, duly registered as a transfer agent under the Exchange Act; + +(c) subject to Section 7 hereof, during the term of this Agreement, Agent shall comply with its obligations as a transfer agent under the Exchange Act and the rules and regulations thereunder; and + +(d) assuming the accuracy of Client's representations and warranties and compliance by Client with its covenants hereunder, the execution and delivery of this Agreement, and the performance by Agent of its obligations in accordance with this Agreement, do not and will not conflict with, violate, or result in a breach of, the terms, conditions or provisions of, or constitute a default under, the organizational documents of Agent, any law or regulation, any order or decree of any court or public authority having jurisdiction, or any mortgage, indenture, contract, agreement or undertaking to which Agent is a party or by which it is bound. This Agreement has been duly authorized, executed and delivered by Agent and is enforceable against Agent in accordance with its terms, except as may be limited by bankruptcy, insolvency, moratorium, reorganization and other similar laws affecting the enforcement of creditors' rights generally. + + + + + +6. Scope of Agency. + +(a) Agent shall act solely as agent for Client under this Agreement and owes no duties hereunder to any other person. Agent undertakes to perform the duties and only the duties that are specifically set forth in this Agreement, and no implied covenants or obligations shall be read into this Agreement against Agent. + +(b) Agent may rely upon, and shall be protected in acting or refraining from acting in reliance upon, (i) any communication from Client, any predecessor Transfer Agent or co-Transfer Agent or any Registrar (other than Agent), predecessor Registrar or co-Registrar; (ii) any instruction, notice, request, direction, consent, report, certificate, opinion or other instrument, paper, document or electronic transmission believed by Agent to be genuine and to have been signed or given by the proper party or parties; (iii) any guaranty of signature by an "eligible guarantor institution" that is a member or participant in the Securities Transfer Agents Medallion Program or other comparable "signature guarantee program" or insurance program in addition to, or in substitution for, the foregoing; (iv) any instructions received through Direct Registration System/Profile; or (v) any law, act, regulation or any interpretation of the same even though such law, act, or regulation may thereafter have been altered, changed, amended or repealed. In addition, Agent is authorized to refuse to make any transfer that it determines in good faith not to be in good order. + +(c) In connection with any question of law arising in the course of Agent performing its duties hereunder, Agent may consult with legal counsel (including internal counsel) whose advice shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by Agent hereunder in good faith and in reasonable reliance thereon. + +(d) Any instructions given by Client to Agent orally shall be confirmed in writing by Client as soon as practicable. Agent shall not be liable or responsible and shall be fully authorized and protected for acting, or failing to act, in good faith reliance upon any oral instructions that do not conform with the written confirmation received in accordance with this Section 6(d). + +7. Indemnification. Client shall indemnify Agent for, and hold it harmless from and against, any loss, liability, claim (whether with or without basis in fact or law), demand, cost or expense (collectively, "Loss") arising out of or in connection with Agent's duties under this Agreement or this appointment, including the reasonable costs and expenses of defending itself against any Loss or enforcing this Agreement, except to the extent that such Loss shall have been determined by a court of competent jurisdiction to be a result of Agent's gross negligence, bad faith or willful misconduct. + +8. Limitation of Liability. + +(a) In the absence of gross negligence, bad faith or willful misconduct on its part, Agent shall not be liable for any action taken, suffered or omitted by it or for any error of judgment made by it in the performance of its duties under this Agreement. In no + + + + + +event will Agent be liable for special, indirect, incidental, consequential or punitive losses or damages of any kind whatsoever (including but not limited to lost profits), even if Agent has been advised of the possibility of such losses or damages and regardless of the form of action. Any liability of Agent will be limited in the aggregate to an amount equal to twenty four (24) times the monthly administrative fee to be paid by Client as set forth in Exhibit B hereto. + +(b) If any question or dispute arises with respect to the proper interpretation of this Agreement or Agent's duties hereunder, Agent shall not be required to act or be held liable or responsible for its failure or refusal to act until the question or dispute has been (i) judicially settled (and Agent may, if it deems it advisable, but shall not be obligated to, file a suit in interpleader or for a declaratory judgment for such purpose) by a final judgment of a court of competent jurisdiction that is binding on all parties interested in the matter and is no longer subject to review or appeal, or (ii) settled by a written document in form and substance satisfactory to Agent and executed by Client. For such purpose, Agent may, but shall not be obligated to, require the execution of such a document. + +9. Force Majeure. Agent shall not be liable for any failures, delays or losses, arising directly or indirectly out of conditions beyond its reasonable control, including, but not limited to, acts of government, exchange or market ruling, suspension of trading, work stoppages or labor disputes, civil disobedience, riots, rebellions, electrical or mechanical failure, computer hardware or software failure, communications facilities failures including telephone failure, war, terrorism, insurrection, fires, earthquakes, storms, floods, acts of God or similar occurrences. + +10. Market Data. Client acknowledges that Agent may provide real-time or delayed quotations and other market information and messages ("Market Data"), which Market Data is provided to Agent by certain national securities exchanges and associations who assert a proprietary interest in Market Data disseminated by them but do not guarantee the timeliness, sequence, accuracy or completeness thereof. Client agrees and acknowledges that Agent shall not be liable in any way for any loss or damage arising from or occasioned by any inaccuracy, error, delay in, omission of, or interruption in any Market Data or the transmission thereof. + +11. Termination. + +(a) Client may terminate this Agreement if (i) Agent defaults on any of its material obligations hereunder and such default remains uncured thirty (30) days after Agent's receipt of notice of such default from Client; or (ii) any proceeding in bankruptcy, reorganization, receivership or insolvency is commenced by or against Agent, Agent shall become insolvent or shall cease paying its obligations as they become due or makes any assignment for the benefit of its creditors. + +(b) Agent may suspend providing services hereunder or terminate this Agreement if (i) Client fails to pay amounts due hereunder or defaults on any of its material obligations hereunder and such failure or default remains uncured thirty (30) + + + + + +days after Client's receipt of notice of such failure or default from Agent; (ii) any proceeding in bankruptcy, reorganization, receivership or insolvency is commenced by or against Client, Client shall become insolvent, or shall cease paying its obligations as they become due or makes any assignment for the benefit of its creditors; or (iii) Client is acquired by or is merged with or into another entity where Client is not the surviving company. + +(c) Upon termination of this Agreement, all fees earned and expenses incurred by Agent up to and including the date of such termination shall be immediately due and payable to Agent on or before the effective date of such termination. In addition to the payments required in this section, if this Agreement is terminated by Client for any reason other than pursuant to Section 2 or Section 11(a) above or by Agent pursuant to Section 11(b) above, then Client shall pay a termination fee, due and payable to Agent on or before the effective date of such termination, calculated as follows: (i) if the termination occurs prior to the first anniversary of the commencement date of the current term (the "Commencement Date"), then the termination fee shall equal twelve (12) times the average monthly invoice charged to Client by Agent hereunder, (ii) if the termination occurs on or after the first anniversary of the Commencement Date but prior to the second anniversary of the Commencement Date, then the termination fee shall equal nine (9) times the average monthly invoice charged to Client by Agent hereunder, and (iii) if the termination occurs on or after the second anniversary of the Commencement Date, then the termination fee shall equal six (6) times the average monthly invoice charged to Client by Agent hereunder. For purposes of this paragraph, fees for non-recurring events shall be excluded when calculating the average monthly invoice charged to Client by Agent + +(d) Prior to termination of this Agreement, Client shall provide Agent with written instructions as to the disposition of records, as well as any additional documentation reasonably requested by Agent. Except as otherwise expressly provided in this Agreement, the respective rights and duties of Client and Agent under this Agreement shall cease upon termination of this Agreement. + +12. Lost Certificates. Agent shall not be obligated to issue a replacement share certificate for any share certificate reported to have been lost, destroyed or stolen unless Agent shall have received: (a) an affidavit of such loss, destruction or theft; (b) a bond of indemnity in form and substance satisfactory to Agent; and (c) payment of all applicable fees. Shareholders may obtain such a bond of indemnity from a surety company of the shareholder's choice, provided the surety company satisfies Agent's minimum requirements. + +13. Confidentiality. + +(a) In connection with Agent's appointment hereunder, each party shall obtain confidential information related to the other party or its stockholders that is not available to the general public ("Confidential Information"), which Confidential Information shall include the terms and conditions of this Agreement and the exhibits attached hereto. Each party agrees that the Confidential Information shall be held and treated by it, its + + + + + +directors, officers, employees, affiliates, agents, investment advisors, accountants and subcontractors (collectively, "Representatives") in confidence and, except as hereinafter provided, shall not be disclosed in any manner whatsoever except as otherwise required by law, regulation, subpoena or governmental authority. Confidential Information shall be used by each party and its Representatives only for the purposes for which provided and shall be disclosed by such party only to those Representatives who have a need to know in order to accomplish the business purpose in connection with which the Confidential Information has been provided. Confidential Information does not include information that (i) is now or subsequently becomes generally available to the public through no fault or breach on the part of the receiving party; (ii) the receiving party had rightfully in its possession prior to disclosure to it by the disclosing party; (iii) is independently developed by the receiving party without the use of or reference to any Confidential Information; (iv) the receiving party rightfully obtains on a non-confidential basis from a source other than the disclosing party who the receiving party has the reasonable belief has the right to transfer or disclose it or (v) required in any legal or regulatory proceeding, investigation, audit examination, subpoena, civil investigative demand or other similar process or required by operation of law or regulation. + +(b) In connection with the provision of services under this Agreement, Client may direct Agent to release information, including non-public personal information ("NPPI"), as defined in Title V of the Gramm Leach Bliley Act and the regulations issued thereunder (including but not limited to Regulation P of the Board of Governors of the Federal Reserve) to Client's agents or other third party service providers, including, without limitation, broker/dealers, custodians and depositories. In addition, Client consents to the release of information, including NPPI, (i) to any of Agent's Representatives in connection with the services provided hereunder and (ii) as required by law, regulation, subpoena or governmental authority. Agent shall not be liable for the release of information in accordance with the foregoing provisions. + +14. Publicity. Neither party will issue a news release, public announcement, advertisement, or other form of publicity concerning the existence of this Agreement or the Services to be provided hereunder without obtaining the prior written approval of the other party, which may be withheld in the other party's sole discretion; provided that Agent may use Client's name in its customer lists with the prior written approval of Client. 15. Lost Stockholders; In-Depth Stockholder Search. + +(a) Agent shall conduct such database searches to locate lost stockholders as are required by Rule 17Ad-17 under the Exchange Act, without charge to the stockholder. If a new address is so obtained in a database search for a lost stockholder, Agent shall conduct a verification mailing and update its records for such stockholder accordingly. + +(b) Agent may conduct a more in-depth search for the purpose of (i) locating lost stockholders for whom a new address is not obtained in accordance with clause (a) above, (ii) identifying stockholders who are deceased (or locating their next of kin) and + + + + + +(iii) locating stockholders whose accounts contain two or more consecutive uncashed checks, in each case using the services of a locating service provider selected by Agent. Such provider may compensate Agent for processing and other services that Agent provides in connection with such in-depth search. + +(c) Upon locating any stockholder (or next of kin) pursuant to clause (b) above, the locating service provider shall clearly identify to such stockholder (or next of kin) all assets held in such stockholder's account. Such provider shall inform any such located stockholders (or next of kin) that they may choose either (i) to contact Agent directly to obtain the assets in such account, at no charge other than any applicable fees to replace lost certificates, or (ii) to use the services of such provider for a fee, which may not exceed (A) 10% of the asset value of such stockholder's property where the registered stockholder is a living person or (B) 20% of the asset value of such stockholder's property where the registered stockholder is deceased or is not a natural person; provided that in no case shall such fee exceed the maximum statutory fee permitted by the applicable state jurisdiction. If Client selects a locating service provider other than one selected by Agent, then Agent shall not be responsible for the terms of any agreement with such provider and additional fees may apply. 16. Compensation and Expenses. + +(a) Commencing on the Effective Date, Client shall compensate Agent for its services hereunder in accordance with the fee schedules listed in Exhibit B hereto. + +(b) All amounts owed to Agent hereunder are due within thirty (30) days of the invoice date. Delinquent payments are subject to a late payment charge of one and one half percent (1.5%) per month commencing sixty (60) days from the invoice date. Client agrees to reimburse Agent for any attorney's fees and any other costs associated with collecting delinquent payments. + +(c) Client shall be charged for certain reasonable expenses advanced or incurred by Agent in connection with Agent's performance of its duties hereunder. Such charges include, but are not limited to, stationery and supplies, such as transfer sheets, dividend checks, envelopes, and paper stock, as well as any disbursements for telephone, mail insurance, electronic document creation and delivery, travel expenses for annual meetings, link-up charges from Automatic Data Processing Inc. and tape charges from The Depository Trust Company. While Agent endeavors to maintain such charges (both internal and external) at competitive rates, these charges will not, in all instances, reflect actual out-of-pocket costs, and in some instances may include handling charges to cover internal processing and use of Agent's billing systems. + +(d) With respect to any shareholder mailings processed by Agent, Client shall be charged postage as an out-of-pocket expense at postage rates that may not reflect all available or utilized postal discounts, such as presort or NCOA discounts. Client shall, at least one business day prior to mail date, provide immediately available funds sufficient to cover all postage due on such mailing. Any material shareholder mailing schedule + + + + + +changes, including, but not limited to, delays in delivering materials to Agent or changes in a mailing commencement date, may result in additional fees and/or expenses. + +17. Notices. All notices, demands and other communications given pursuant to this Agreement shall be in writing, shall be deemed effective on the date of receipt, and may be sent by overnight delivery service, or by certified or registered mail, return receipt requested to: If to Client: with an additional copy to: + +Blackstone/ Long-Short Credit Income Fund 280 Park Avenue, 11t h Floor New York, New York 10017 Attn: Marisa Beeney + +GSO/ Blackstone Debt Funds Management LLC 280 Park Avenue, 11t h Floor New York, New York 1001 + +If to Agent: with an additional copy to: + +Mellon Investor Services LLC 480 Washington Blvd Jersey City, NJ 07310 Attn: Kevin Shinkunas + +Mellon Investor Services LLC Newport Office Center VII 480 Washington Blvd. Jersey City, NJ 07310 Attn: Legal Department + +18. Submission to Jurisdiction; Foreign Law. + +(a) The parties irrevocably (i) submit to the non-exclusive jurisdiction of any New York State court sitting in New York City or the United States District Court for the Southern District of New York in any action or proceeding arising out of or relating to this Agreement, (ii) waive, to the fullest extent they may effectively do so, any defense based on inconvenient forum, improper venue or lack of jurisdiction to the maintenance of any such action or proceeding, and (iii) waive all right to trial by jury in any action, proceeding or counterclaim arising out of this Agreement or the transactions contemplated hereby. + +(b) Agent shall not be required hereunder to comply with the laws or regulations of any country other than the United States of America or any political subdivision thereof. Agent may consult with foreign counsel, at Client's expense, to resolve any foreign law issues that may arise as a result of Client or any other party being subject to the laws or regulations of any foreign jurisdiction. + + + + + +19. Miscellaneous. + +(a) Amendments. This Agreement may not be amended or modified in any manner except by a written agreement signed by both Client and Agent. + +(b) Governing Law. This Agreement shall be governed by, construed and interpreted in accordance with the laws of the State of New York, without regard to principles of conflicts of law. + +(c) Survival of Terms. Sections 7, 8, 13 and 16 hereof shall survive termination of this Agreement and Agent's appointment hereunder. + +(d) Assignment. This Agreement shall be binding upon the parties hereto and their respective successors and assigns; provided that this Agreement may not be assigned, or otherwise transferred, in whole or in part, by either party without the prior written consent of the other party, which the other party will not unreasonably withhold, condition or delay; and provided further that (i) consent is not required for an assignment to an affiliate of Agent and (ii) any reorganization, merger, consolidation, sale of assets or other form of business combination by Agent shall not be deemed to constitute an assignment of this Agreement. Any attempted assignment in violation of the foregoing will be void. The Agent agrees to provide notices of such successor Agent to the other party. + +(e) Headings. The headings contained in this Agreement are for the purposes of convenience only and are not intended to define or limit the contents of this Agreement. + +(f) Severability. Whenever possible, each provision of this Agreement will be interpreted in such a manner as to be effective and valid under applicable law, but if any provision of this Agreement is found to violate a law, it will be severed from the rest of the Agreement and ignored. + +(g) Counterparts. This Agreement may be executed manually in any number of counterparts, each of which such counterparts, when so executed and delivered, shall be deemed an original, and all such counterparts when taken together shall constitute one and the same original instrument. + +(h) Entire Agreement. This Agreement constitutes the entire understanding of the parties with respect to the subject matter hereof and supercedes all prior written or oral communications, understandings, and agreements with respect to the subject matter of this Agreement. The parties acknowledge that the Exhibits hereto are an integral part of this Agreement. + +(i) Benefits of this Agreement. Nothing in this Agreement shall be construed to give any person or entity other than Agent and Client any legal or equitable right, remedy or claim under this Agreement; but this Agreement shall be for the sole and exclusive benefit of Agent and Client. + + + + + +(j) Customer Identification Program. Client acknowledges that Agent is subject to the customer identification program ("Customer Identification Program") requirements under the USA PATRIOT Act and its implementing regulations, and that Agent must obtain, verify and record information that allows Agent to identify Client. Accordingly, prior to accepting an appointment hereunder, Agent may request information from Client that will help Agent to identify Client, including without limitation Client's physical address, tax identification number, organizational documents, certificate of good standing, license to do business, or any other information that Agent deems necessary. Client agrees that Agent cannot accept an appointment hereunder unless and until Agent verifies Client's identity in accordance with the Customer Identification Program requirements. + +(k) Contingency Facilities. In order to minimize the disruption of the services provided under this Agreement or any exhibit, schedule, appendix or annex hereto, theAgent shall implement and maintain directly or through third parties contingency facilities and procedures reasonably designed to provide for periodic back-up of the computer files and data with respect to the Client and emergency use of electronic data processing equipment to provide services under this Agreement. In the event of equipment failure, work stoppage, governmental action, communication disruption or other impossibility of performance beyond the Agent's control, the Agent shall, at no additional expense to the Client, take commercially reasonable steps to minimize service interruptions. + +[The remainder of this page has been intentionally left blank. Signature page follows.] + + + + + +IN WITNESS WHEREOF, the parties hereto have executed this Agreement by their duly authorized officers as of the day and year above written. + +BLACKSTONE/ GSO LONG-SHORT CREDIT INCOME FUND By: /s/ Marisa J. Beeney Name: Marisa J. Beeney Title: Authorized Signatory + +MELLON INVESTOR SERVICES LLC By: /s/ Kevin Shinkunas Name: Kevin Shinkunas Title: Vice President + + + + + +Exhibit A + +STOCK SUBJECT TO THE AGREEMENT + +Class of Stock + +Number of Authorized Shares + +Number of Authorized Shares Issued and Outstanding (including Treasury Shares) + +Number of Authorized Shares Reserved for Future Issuance Under Existing Agreements A-1 + + + + + +Exhibit B + +SERVICES TO BE PROVIDED AND SCHEDULE OF FEES Issues Covered: (additional issues are subject to additional fees.) Common (1) IPO Services Full Fast Closing (one-time)/Conversion $2,500.00 Administration & Account Maintenance Stock Transfer Administration (Annual Fee, payable monthly) $ 18,000.00 Account Maintenance Services Security Issuance Services Dividend Disbursement Services (Quarterly) Escheatment Services Direct Registration System/Profile Services Web Services and System Access Proxy and Annual Meeting Services (1 Common file) Investment Plan Services Per Separate Plan Agreement Out-of-Pocket Expenses Billed as Incurred Additional fees will apply if the annual allowances below are exceeded Account Administration Allowance Fee Number of active accounts maintained 1,000 $ 4.00 Number of inactive accounts maintained 1,000 $ 1.00 Number of Restricted transactions 500 $ 50.00 Number of Option transactions 500 $ 25.00 Number of electronic DWAC transactions + +N/A + +Charged to broker Number of mailings per year (including one enclosure) 4 See Below Number of reports or analyses 4 See Below Number of lists or labels 4 See Below B-1 + + + + + +Escheatment Services Annual Compliance Services Included SEC mandated electronic database and new address retrieval mailing $ ($ 3.75 per account 500.00 minimum) Each state mandated due diligence mailing $ ($ 3.50 per account 500.00 minimum) Direct Registration System / Profile Annual Surety Fee Waived upon Enrollment Customization of advices and statements (if requested) $500.00 Stock Distribution Event - full, full and fractional shares $3.50 DRS/Profile statement, Advices, Annual Account Statement $0.25 DRS/Profile investor originated reject fee, each occurrence Charged to broker Additional Lists & Mailings Upon Request Shareholder Lists and Analysis (Minimum charge for each of the below services) $500.00 Lists, per name listed $0.05 Labels, per label printed $0.05 Analysis, per name passed on database $0.02 Analysis, per name listed in report $0.05 Custom Lists or Analyses By Appraisal Standard Mailing Services (Minimum charge for each of the below services) $500.00 Addressing mailing medium, per name $0.05 Affixing labels, per label $0.05 Machine Inserting 1st Enclosure, per piece 2nd Enclosure, per piece Each Enclosure thereafter, per piece + +$0.05 $0.04 $0.03 Manual Inserting By Appraisal B-2 + + + + + +BNY Mellon Shareowner Services Notice & Access Pricing/Services Notice & Access Web Presentation—Event Fee Includes: •  Web site setup •  Conversion and formatting of documents into Web site format •  Presentation and maintenance of proxy materials on web site for 12 months •  Establishment and maintenance of Web site that does not track cookies or shareowner data •  Maintenance and support for Web hosting servers + +$5,000.00 + +Annual Account Administration Fee (for Notice recipients) Includes: •  Processing of requests for materials via phone or Internet •  Systems setup for fulfillment •  Storage of physical proxy compliance materials (for fulfillment purposes) •  Maintenance and storage of shareowner access preference flags •  File transmissions •  Mail processing of Notice & Access letter + +$1,500.00 (waived with web hosting) plus $0.20 per shareowner + +Notice Card OOP (Postage, Stationery, Imprinting) As incurred (estimated $0.68 each) + +Fulfillment Services Pick-and-Pack Fulfillment Services (hard copy compliance materials provided by client) Includes: pre-insertion of printed materials $1.70 per opt-out shareowner Fulfillment postage As incurred Proxy Card out-of-pocket expenses Includes: Stationery, Imprinting As incurred (est. $0.68 each) per opt-out shareowner + +Additional Web Hosting Services Included + +Additional Web hosting of materials for outside vendor (e.g. hosting of Web site for street shareowner base in lieu of using Broadridge's Web site) includes site setup, presentation, document conversion, maintenance of proxy materials on cookie-free Web site for 12 months; to be used in conjunction with the Web hosting for registered base. B-3 + + + + + +SERVICES TO BE PROVIDED + +Account Maintenance Functions • Opening new accounts • Posting debits and credits • Maintaining certificate history • Placing and releasing stop transfer notations • Consolidating accounts • Coding accounts requiring special handling (e.g. "bad address," "do not mail," "VIP," etc.) • Processing address changes • Responding to shareholder correspondence (includes address changes, coding changes, W8/W9 Inquiries, 1099 duplicate requests, statement inquiries, check replacements, and other routine transactions) • Providing a toll-free phone number for shareholder inquiries • Obtaining and posting Taxpayer Identification Number certifications pursuant to IDTCA regulations • Maintaining inactive accounts for the purpose of research and tax reporting • Closing (purging) inactive accounts that meet selected criteria • Maintaining shareholder consents to electronic delivery of materials • Review and reporting of information required by the Office of Foreign Asset Control + +Security Issuance Functions • Qualifying under the rules of the NYSE and NASDAQ/AMEX to act in the dual capacity as transfer agent and registrar • Maintaining mail and window facilities for the receipt of transfer requests • Maintaining and securing unissued certificate inventory and supporting documents • Establishing procedures designed to verify that surrendered certificates are genuine and have not been altered • Obtaining a legal opinion and/or other documentation to the effect that original issuances are properly authorized and have been registered under federal securities laws or are exempt from such registration • In connection with requests for transfer, verifying that Shares issued equal the number surrendered • Place and remove stop orders on Shares • Verifying that Agent has not received any active stop orders against Shares submitted for transfer • Issuing and registering new securities • Recording canceled and issued securities • Canceling surrendered certificates • Delivering completed transfers • Processing restricted and legal transfers upon presentment of appropriate supporting documentation • Providing online access to daily transfer or management summary journals • Providing delivery and receipt of DWAC transfers B-4 + + + + + +• Provide and process safekeeping requests • Replacing lost, destroyed or stolen certificates (charge imposed on shareholder) • Supporting custodial arrangements for selling stockholders or otherwise as requested by Client in connection with public offerings + +Dividend Disbursement Services • Preparing and mailing checks • ACH/Direct Deposit file transmission • Reconciling checks • Preparing payment register in list form • Withholding and filing taxes for non-resident aliens and others • Filing federal tax information returns • Processing "B" and "C" notices received from the IRS • Mailing required statements (Form 1099DIV or Form 1042) • Maintaining stop payment files and issuing replacement checks • Maintaining separate dividend addresses • Receiving, verifying and posting dividend payment funds + +Investment Plan Services (per separate Plan agreement) • Opening and maintaining participant accounts • Processing reinvestment and optional cash payments • Preparing participant statement of accounts, after each transaction, showing activity for current period • Processing liquidations and terminations according to plan specifications • Providing periodic investment reports to Client • Preparing Form 1099B to report sale proceeds • Issuing replacement checks • Mail authorization material as requested either separately or part of new account mailing + +Escheatment Functions • Assist in establishing compliance with the unclaimed property requirements of all jurisdictions that may have a claim on escheatable property held by Agent on behalf of Client. • Processing records and property subject to reporting based upon current state statutes, rules, and regulations • Identifying property that has become escheatable since the last filing date • Assist in reviewing state regulations to determine if there have been any changes in reporting procedures • Reporting and remitting property to states + +Proxy and Annual Meeting Functions • Assisting in Annual Meeting planning • Processing and mailing Annual Meeting materials • Provide eKit interactive Annual Meeting materials integrated with Internet Proxy Voting B-5 + + + + + +• Tabulating physical (both scanner and manual) proxies returned by shareholders • Soliciting registered shareholders for their consent to receive electronic meeting materials • Collecting, processing and archiving electronic consents and revocations • Tabulating telephone and Internet proxies returned by shareholders • Identifying shareholders who will attend the Annual Meeting • Providing Inspector(s) of Election for the Annual Meeting • Maintaining an automated link with (i) DTC to redistribute record date Cede & Co. share positions to participants and (ii) ADP to receive transmissions of broker votes • Providing certified list of record date holders • Processing omnibus proxies for respondent banks • Providing report of final vote • Providing remote access to proxy tabulation system + +Web Services and System Access • Providing Client access to Agent's mainframe inquiry and internet via Client ServiceDirect • Providing daily data on registered shareholders • Providing daily access to proxy tabulation file during proxy season • Providing Shareholder access to their account via Investor ServiceDirect • Providing on-line access to shareholder statements and tax forms via MLink B-6 + + + + + +OTHER SERVICES AND CHARGES + +Shareholder Plan Enrollment: If Client has appointed a banking affiliate of Agent to administer a direct stock purchase and/or dividend reinvestment plan, Agent (on behalf of such affiliate) shall accept requests by Client's shareholders to enroll Shares in such plan via paper enrollment form, in the case of certificated securities, and via paper enrollment form, Internet enrollment and telephonic enrollment, in the case of book-entry (i.e., Direct Registration System) securities. If Client has not appointed a banking affiliate of Agent to administer a direct stock purchase or dividend reinvestment plan, then Client hereby appoints and directs a banking affiliate of Agent to implement and administer a share selling program ("Program") pursuant to which shareholders may enroll book-entry Shares in the Program in order to liquidate them under the following terms and conditions. The Program transaction fee for each such sale shall be $15.00 plus $0.12 per Share. Under the Program, upon receipt of a sale request by a registered shareholder, Agent (on behalf of such banking affiliate) will process the request through an affiliated registered broker/dealer. Proceeds of each sale under the Program will be sent to the shareholder in the form of a check (less the transaction fee). Sale requests under the Program will typically be combined with other sale requests received from Client shareholders and Shares will be submitted in bulk to an affiliated registered broker/dealer for sale. Shares will be sold under the Program generally within one business day of Agent's receipt (on behalf of such banking affiliate) of the sale request, but in no event more than five business days (except where deferral is necessary under state or federal regulations). The price per Share received by the selling shareholder under the Program will equal the market price Agent (on behalf of such banking affiliate) receives for the Shares (or, if more than one bulk trade is executed on the day the Shares are sold, then the price per Share shall equal the weighted average market price received for all Shares sold that day). + +Prior Agent Out-of-Proof Conditions: If an out-of-proof condition exists on the Effective Date, and such condition is not resolved within 90 calendar days thereafter, Client agrees to provide Agent with funds or shares sufficient to resolve the out-of-proof condition promptly upon the expiration of such 90 day period. + +Lost Certificates: Agent shall charge shareholders an administrative fee for replacement of lost certificates, which shall be charged only once in instances where a single surety bond obtained covers multiple certificates. Agent may receive compensation from surety companies or surety agents for administrative services provided to them. + +Legal Expenses, System Modifications: Certain expenses may be incurred in resolving legal matters, including receiving and responding to routine subpoenas that arise in the course of performing services hereunder. This may result in a separate charge to cover Agent's expenses (including the cost of external or internal counsel) in resolving such matters; provided that any legal expenses charged to the Client shall be reasonable. + +In the event any federal, state or local laws, rules or regulations are enacted that require Agent to (i) make any adjustments and/or modifications to its current system, or (ii) B-7 + + + + + +provide additional services to Client for which Agent is not being compensated hereunder, then Client shall compensate Agent (a) on a pro rata basis proportionate to the Client's registered shareholder base, for the costs associated with making such required adjustments and/or modifications, or (b) according to Agent's standard fees established, in good faith, with respect to such additional services. + +Initial Compliance Escheatment Services: If, at the time escheat services are commenced for any asset type, Client is not in compliance with applicable state unclaimed property regulations with respect to that asset type, then Agent shall provide initial compliance services, which shall include working with one or more state unclaimed property clearinghouses to identify specific reportable records and property, and organizing and formatting such records and property for remittance to the applicable states, as required. Where applicable, in concert with state clearinghouses, Agent shall also attempt to obtain releases and indemnification agreements protecting Client from interest and penalties that may be assessable against Client by the states for prior non-compliance. If a release or indemnification agreement is not so obtained from a state, Client may be responsible for interest and/or penalties from such state for prior non-compliance. Agent may receive compensation from state clearinghouses for the processing and support services it provides to them in connection with initial compliance services. + +Cash Dividends and Distributions: For any dividend mailing, Client shall, no later than 10 am Eastern Time on the mail date for the dividend, provide to Agent immediately available funds sufficient to pay the aggregate amount of cash dividends to be paid. Upon receipt of any such funds, Agent shall (a) in the case of registered shareholders who are participants in a dividend reinvestment plan of Client as of the record date, reinvest such funds in accordance with the terms of such plan, and (b) in the case of registered shareholders who are not participants in any such plan as of the record date, make payment of such funds to such shareholders by mailing a check, payable to the registered shareholder, to the address of record or, if different, dividend mailing address. If Agent has not timely received sufficient funds to make payments of any dividend or distribution pursuant to subsections (a) and (b) above to all registered shareholders of Client as of the record date, Agent shall notify Client and withhold all payments until Client has provided sufficient funds to Agent. + +Other Services: Fees, out of pocket expenses and disbursements for any services, including, but not limited to, down posting for odd lots, provided to Client or any of its agents or representatives by or on behalf of Agent hereunder that are not set forth above will be based on Agent's standard fees at the time such services are provided or, if no standard fees have been established, an appraisal of the work to be performed. B-8 + + + + + +Exhibit C + +DOCUMENTS AND NOTIFICATIONS TO BE DELIVERED TO AGENT + +Prior to the Effective Date, to the extent not previously provided by Client to Agent, Client shall provide Agent with the following: 1. An adequate supply of Share certificates (including new Share certificates and specimens whenever the form thereof shall change), properly signed, by facsimile or otherwise, by officers of Client authorized by law or by Client's By-Laws to sign Share certificates, and, if required, bearing the corporate seal or a facsimile thereof. 2. A copy of the resolutions adopted by the Board of Directors of Client appointing or authorizing the appointment of Agent as Transfer Agent and/or Registrar and Dividend Disbursing Agent, as the case may be, duly certified by the Secretary or Assistant Secretary of Client under the corporate seal. 3. A copy of the Certificate of Incorporation of Client, and all amendments thereto, certified by the Secretary of State of the state of incorporation. 4. A copy of the By-laws of Client as amended to date, duly certified by the Secretary of Client under the corporate seal. 5. A certificate of the Secretary or an Assistant Secretary of Client, under its corporate seal, stating as follows: + +a) this Agreement has been executed and delivered pursuant to the authority of Client's Board of Directors; + +b) the attached specimen Share certificate(s) are in substantially the form submitted to and approved by Client's Board of Directors for current use, and the attached specimen Share certificates for each Class of Stock with issued and outstanding Shares are in the form previously submitted to and approved by Client's Board of Directors for past use; + +c) no shares have been reserved for future issuance except as set forth on the attached list of existing agreements pursuant to which Shares have been reserved for future issuance, which list specifies the number of reserved Shares subject to each such existing agreement and the substantive provisions thereof. + +d) each shareholder list provided to Agent is true and complete; or no Shares are outstanding; + +e) the name of each stock exchange upon which any of the Shares are listed and the number and identity of the Shares so listed; C-1 + + + + + +f) the name and address of each co-Transfer Agent, Registrar (other than Agent) or co-Registrar for any of the Shares and the extent of its appointment, or there are no co-Transfer Agents, Registrars (other than Agent) or co-Registrars for any of the Shares; and + +g) the officer(s) of Client, who executed this Agreement as well as any certificates or papers delivered to Agent pursuant to this Agreement (including without limitation any Share certificates, as such certificates may be amended from time to time), were validly elected or appointed to, and are the incumbents of, the offices they purported to hold at the time of such execution and delivery, are authorized to execute this Agreement as well as all other certificates or papers delivered hereunder, and that their signatures on all such documentation are genuine. + +Such Secretary's certificate shall contain a certificate of an officer of Client, other than the officer executing the Secretary's certificate, stating that the person executing the Secretary's certificate was validly elected to, and is the Secretary or an Assistant Secretary of Client and that his signature on the certificate is genuine. 6. A shareholder list, preferably in machine readable format, certified as true and complete by the person preparing the list, for the issued and outstanding Shares, setting forth as to each holder, his/her name and address, tax identification number certified by the shareholder pursuant to requirements of the Internal Revenue Code and applicable regulations, the number of Shares held, the Share certificate numbers and the existence of any stop orders or other transfer restrictions. 7. Opinion of counsel for Client, addressed to Agent, to the effect that: + +a) the Shares issued and outstanding on the date hereof have been duly authorized, validly issued and are fully paid and are non-assessable; + +b) the Shares issued and outstanding on the date hereof have been duly registered under the Securities Act of 1933, as amended, and such registration has become effective, or are exempt from such registration; and have been duly registered under the Securities Exchange Act of 1934, as amended, or are exempt from such registration; + +c) the use of facsimile signatures by Agent in connection with the countersigning and registering of Share certificates of Client has been duly authorized by Client and is valid and effective; and + +d) the execution and delivery of this Agreement do not and will not conflict with, violate, or result in a breach of, the terms, conditions or provisions of, or constitute a default under, the charter or the by-laws of Client, any law or regulation, any order or decree of any court or public authority having jurisdiction, or any mortgage, indenture, contract, agreement or undertaking to which Client is a party or by which it is bound and this Agreement is enforceable C-2 + + + + + +against Client in accordance with it terms, except as limited by bankruptcy, insolvency, moratorium, reorganization and other similar laws affecting the enforcement of creditors' rights generally. 8. A completed Internal Revenue Service Form 2678. 9. A completed Form W-8 or W-9, as applicable. + +Client further agrees to deliver an opinion of counsel as provided in this Exhibit C, Section 7(a) and (b) upon any future original issuance of Shares for which Agent will act as transfer agent hereunder. C-3 + + + + + +NOTIFICATION OF CHANGES + +Client shall promptly notify Agent of the following: 1. Any change in the name of Client, amendment of its certificate of incorporation or its by-laws; 2. Any change in the title of a Class of Stock from that set forth in the first column of Exhibit A; 3. Any change in the Number of Authorized Shares from that set forth in the second column of Exhibit A; 4. Any change in existing agreements or any entry into new agreements changing the Number of Authorized Shares Reserved for Future Issuance Under Existing Agreements from that listed in the fourth column of Exhibit A hereto; 5. Any change in the number of outstanding Shares subject to stop orders or other transfer limitations; 6. The listing or delisting of any Shares on any stock exchange; 7. The appointment after the date hereof of any co-Transfer Agent, Registrar (other than Agent) or any co-Registrar for any of the Shares; 8. The merger of Client into, or the consolidation of Client with, or the sale or other transfer of the assets of Client substantially as an entirety to, another person; or the merger or consolidation of another person into or with Client; and 9. Any other change in the affairs of Client of which Agent must have knowledge to perform properly its duties under this Agreement. C-4 \ No newline at end of file diff --git a/full_contract_txt/BLUEFLYINC_03_27_2002-EX-10.27-e-business Hosting Agreement.txt b/full_contract_txt/BLUEFLYINC_03_27_2002-EX-10.27-e-business Hosting Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..0f3b70bed0ab9271da10c2c86b39571f3fb4abd3 --- /dev/null +++ b/full_contract_txt/BLUEFLYINC_03_27_2002-EX-10.27-e-business Hosting Agreement.txt @@ -0,0 +1,473 @@ +Exhibit 10.27 + + e-business Hosting Agreement + + between + + Bluefly, Inc. + + and + + International Business Machines Corporation + + 1 + + e-business Hosting Agreement + +Under this e-business Hosting Agreement ("Agreement") between International Business Machines Corporation ("IBM") and Bluefly, Inc. ("Customer"), IBM will provide Web hosting and related services ("Services") to Customer. The Agreement includes these terms and conditions and the documents referenced herein ("Base Terms"), e-business hosting services order forms accepted by IBM ("Order Forms"), and the following attachments: + +a. Attachment A: Facilities Services; + +b. Service Option Attachment for Facilities Services; and + +c. all other applicable attachments referenced in the Order Forms for Services options selected by Customer ("Service Option Attachments"). + +In the event of a conflict between the Base Terms and an attachment, the Base Terms will govern, except where an attachment or a provision contained therein expressly states that it will govern over the Base Terms. The Base Terms and the attachments always govern over any inconsistent provision in an Order Form. + +-------------------------------------------------------------------------------- 1.0 Definitions + +a. "Acceptable Use Policy" means the Acceptable Use Policy for IBM e-business Services, located on the Internet at http://www.ibm.com/services/ e-business/aup.html, as of the Effective Date, and any subsequent modification in accordance with Section 13.2 below. + +b. "Affiliates" means entities that control, are controlled by, or are under common control with a party to this Agreement. + +c. "Base Components" means the hardware and software that IBM makes available, if any, as specified in Order Forms and associated Service Option Attachments. + +d. "Content" means information, software, and data that Customer provides, including, without limitation, any hypertext markup language files, scripts, programs, recordings, sound, music, graphics, images, applets or servlets that Customer or its Subcontractors or Services Recipients create, install, upload or transfer in or through the e-business Hosting Environment and/or Customer Components. + +e. "Content Administrator" means an employee or Subcontractor of Customer who is authorized by Customer to install, upload and/or maintain Content using a User Identification. + +f. "Customer Components" means the hardware, software and other products, data and Content that Customer provides, including those specified in Service Option Attachments. + +g. "e-business Hosting Environment" means the Base Components and the IBM provided Internet access bandwidth, collectively. + +h. "Enterprise" means any legal entity and the subsidiaries it owns by more than 50 percent. The term "Enterprise" applies only to the portion of the Enterprise physically located within the United States of America. + +i. "IBM e-business Hosting Center" means the facility used by IBM to provide the Services. + +j. "Internet" means the public worldwide network of TCP/IP-based networks. + +k. "Materials" means literary or other works of authorship (such as programs, program listings, programming tools, documentation, reports, drawings and similar works) that IBM may deliver to Customer. "Materials" does not include licensed program products available under their own license agreements or Base Components. + +l. "Required Consents" means any consents or approvals required to give IBM and its Subcontractors the right or license to access, use and/or modify in electronic form and in other forms, including derivative works, the Customer Components, without infringing the ownership or intellectual property rights of the providers, licensors, or owners of such Customer Components. + +m. "Service Option Ready Date" means the date that IBM has notified Customer that IBM has completed the implementation activities + + + + + + 2 + + specified in an applicable Service Option Attachment. + +n. "Services Recipients" means any entities or individuals receiving or using the Services, or the results or products of the Services. + +o. "Service Option Attachment Start Date" means the day after the date of the last signature on an Order Form authorizing the Services under an applicable Service Option Attachment. + +p. "Subcontractor" means a contractor, vendor, agent, or consultant selected and retained by IBM or Customer, respectively. + +q. "TCP/IP" means Transmission Control Protocol/Internet Protocol. + +r. "User Identification" or "ID" means a string of characters that uniquely identifies a Content Administrator. + +-------------------------------------------------------------------------------- 2.0 IBM Services Responsibilities + +IBM will perform the Services described in Attachment A and applicable Service Option Attachments. + +-------------------------------------------------------------------------------- 3.0 Term and Termination + +3.1 Term + +This Agreement will be effective beginning on 12:01 a.m., Eastern Time, on the day after the date of last signature to these Base Terms ("Effective Date") and ending on the expiration and/or termination of all Service Option Attachments, unless the Agreement is terminated earlier in accordance with the terms herein. The term of each Service Option Attachment is as specified on the applicable Order Form. + +3.2 Renewal + +Each Service Option Attachment will renew automatically for an additional term equal in duration to the previous term of the applicable Service Option Attachment unless either party notifies the other party in writing at least ninety (90) days prior to the end of the then-current term for the applicable Service Option Attachment that it has elected to terminate such Service Option Attachment. + +3.3 Termination for Cause + +Customer or IBM may terminate this Agreement for material breach of this Agreement by the other upon written notice containing the specific nature and dates of the material breach. The breaching party will have thirty (30) days from receipt of notice to cure such breach, except for nonpayment by Customer, which must be cured within seven (7) business days from receipt of notice. If such breach has not been timely cured, then the non-breaching party may immediately terminate this Agreement upon written notice; provided, however, it is understood that in the event IBM has so breached this Agreement IBM shall not be entitled to recover the early termination charges described in Section 3.4(b) below. + +3.4 Termination for Convenience + +Customer may terminate this Agreement (including all Service Option Attachments) or any Service Option Attachment (with the exception of any Service Option Attachment that is a prerequisite for the provision of Services under a non-terminated Service Option Attachment) for convenience at the end of any calendar month by: + +a. providing at least one month's prior written notice to IBM; and + +b. paying the applicable early termination charges, if any, specified in Attachment A and applicable Service Option Attachments. + +In the event that Customer exercises its rights under this Section 3.4, IBM shall continue to fulfill all of its duties and obligations following the notice date and until the final termination date. + +3.5 Effect of&sbsp;Termination + +Upon the date of termination, all Customer payment obligations accrued hereunder through the date of termination will become due and payable. The termination of selected Service Option Attachments will not affect Customer's obligation to pay charges under other Service Option Attachments. + +-------------------------------------------------------------------------------- 4.0 Charges and Payment + +4.1 Charges + +Charges for applicable Services will be specified in Service Option Attachments and Order Forms. Charges can be specified as one-time, installment, recurring, or usage. IBM will invoice such Charges when they begin or are due as set forth in Service Option Attachments. + + + + + +4.2 Payment + +IBM invoices will specify the amount due. Payment is due upon receipt and payable as specified in such invoice. Customer agrees to pay accordingly, including any late payment fees. Payment will be made in United States dollars. + +4.3 Taxes + + 3 + +Customer will pay or provide appropriate exemption documentation for all taxes, duties, levies, and any other fees (except for taxes based upon IBM's net income) related to the Services imposed by any governmental authorities. Charges specified herein (including in an Order Form) are exclusive of any such taxes, duties, levies or fees. + +-------------------------------------------------------------------------------- 5.0 Warranties and Disclaimers + +5.1 IBM Representations and Warranties + +IBM represents and warrants that: + +a. it will perform the Services using reasonable care and skill and in accordance with the applicable Service Option Attachments (which means the degree of knowledge, skill and judgment customarily exercised by members of the applicable profession with respect to work of a similar nature); and that it will provide Customer with competent, fully trained, fully qualified and responsible personnel to perform the Services; and + +b. it has the requisite corporate power and authority to execute, deliver and perform its obligations under this Agreement. + +IBM covenants that it will comply with the laws applicable to IBM's business. + +5.2 Exclusivity of Warranties + +THE WARRANTIES IN SECTION 5.1 ARE THE EXCLUSIVE WARRANTIES FROM IBM. THEY REPLACE ALL OTHER WARRANTIES, INCLUDING, WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY, SATISFACTORY QUALITY, AND FITNESS FOR A PARTICULAR PURPOSE. + +5.3 Security + +a. Customer acknowledges that IBM does not control the transfer of data over telecommunications facilities, including the Internet. + +b. Subject to the other disclaimers contained herein, IBM will implement the security features specified herein, including the IBM perform security obligations identified in Section 8.0 of the Facilities Services Service Option Attachment. However, IBM does not warrant secure operation of the Services or that it will be able to prevent third party disruptions of the e-business Hosting Environment or Customer Components. + +c. Customer acknowledges that IBM offers numerous security options, specified in Service Option Attachments. Customer is responsible for selecting on Order Forms the set of security options that it determines meet Customer's needs. + +d. Customer agrees that IBM shall have no liability for any provision of security-related services or advice that IBM may voluntarily provide outside the scope of selected Service Option Attachments. + +5.4 Other Disclaimers + +a. IBM does not warrant uninterrupted or error-free operation of any Service or that IBM will correct all defects. open + +b. IBM does not make any representation or warranty as to the capacity, performance or scalability of the Services, e-business Hosting Environment, or Customer Components. + +c. IBM PROVIDES ALL MATERIALS AND ALL NON-IBM SERVICES, PRODUCTS, DATA, APPARATUS AND SOFTWARE "AS IS", WITHOUT WARRANTY OF ANY KIND, INCLUDING, WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY, SATISFACTORY QUALITY, AND FITNESS FOR&sbsp;A PARTICULAR PURPOSE. Non-IBM suppliers may provide their own warranties to you. + +-------------------------------------------------------------------------------- 6.0 Confidentiality + +All information exchanged between the parties is non-confidential; provided, however if either or both parties require the exchange of confidential information, such information will be exchanged under the terms and conditions of the Agreement for Exchange of Confidential Information executed by IBM on August 3, 2001 (the "AECI") (it being further agreed as follows: (a) the AECI is hereby modified so that any information that is disclosed by a party hereto that a reasonable person would construe, based upon the nature of the information and the circumstances surrounding the disclosure, as intended to be confidential shalll be deemed to be confidential Information under the AECI and shall be accorded all protections of the AECI and (b) after the date hereof the parties hereto shall enter into a modification of the AECI whereby the provisions of (a) immediately above are documented and (c) the parties shall also amend the AECI so as to reflect the following agreement: in the event that a breach or + + + + + +threatened breach of a party's obligations hereunder shall cause irreparable harm wherein a remedy at law would + + 4 + +prove inadequate, the aggrieved party shall have the right to seek and obtain an injunction so as to prevent any further disclosure of the confidential Information. With respect to any confidential information contained in or traveling through the e-business Hosting Environment or Customer Components, the provisions of Sections 5, 9, and 10 herein will prevail to the extent of any inconsistent provisions in the confidentiality agreement. + +-------------------------------------------------------------------------------- 7.0 Materials + +a. IBM will specify Materials to be delivered to Customer. IBM will identify them as being "Type I Materials," "Type II Materials," or otherwise as Customer and IBM agree in writing. If not specified, Materials will be considered Type II Materials. + +b. Type I Materials are those, created during the Service performance period, in which Customer will have all right, title, and interest (including ownership of copyright). IBM will retain one copy of the Materials. Customer grants to IBM: + + 1. an irrevocable, nonexclusive, worldwide, paid-up license to use, execute, reproduce, display, perform, distribute (internally and externally) copies of, and prepare derivative works based on Type I Materials; and 2. the right to authorize others to do any of the same. + +c. Type II Materials are those, created during the Service performance period or otherwise (such as those that preexist the Service), in which IBM or third parties have all right, title, and interest (including ownership of copyright). IBM will deliver one copy of the specified Materials to Customer. IBM grants Customer an irrevocable, nonexclusive, worldwide, paid-up license to use, execute, reproduce, display, perform, and distribute, within Customer's Enterprise only, copies of Type II Materials. + +d. The parties agree to reproduce the copyright notice and any other legend of ownership on any copies made under the licenses granted in this Section 7. + +-------------------------------------------------------------------------------- 8.0 Indemnification + +8.1 Indemnification by IBM + +If a third party claims or threatens a claim that Materials or Base Components IBM provides to Customer or uses in connection with the performance of the Services infringe that party's patent, trademark, copyright, or trade secret, then IBM will indemnify, defend and hold harmless the Customer, its Enterprise and their respective employees, officers, agents and directors against that claim or threatened claim at IBM's expense and pay all costs, damages, penalties and reasonable attorneys' fees that a court finally awards in connection with that claim (or which IBM&sbsp;agrees in any final settlement) provided that Customer: + +a. promptly notifies IBM in writing of the claim; and + +b. allows IBM to control, and cooperates with IBM in, the defense and any related settlement negotiations (it being understood and agreed that if Customer incurs any costs in connection with such cooperation, over and above nominal costs, IBM shall reimburse Customer therefor, such costs to potentially include, without limitation, the costs incurred by Customer in connection with depositions, responses to interrogatories, or testimony at trial or any similar proceeding, and travel costs in connection therewith; provided, however, such obligation of IBM as set forth in this parenthetical is conditioned upon Customer first obtaining IBM's consent to the incurring of such costs, such consent to be reasonably granted). If such a claim is made or appears likely to be made, Customer agrees to permit IBM to enable Customer to continue to use the Materials or Base Components, or to modify them, or replace them with non-infringing Materials or Base Components that are at least functionally equivalent. If IBM determines that none of these alternatives is reasonably available, Customer agrees to return the Materials or Base Components (if in Customer's possession) to IBM on IBM's written request. IBM will give Customer a credit equal to the amount Customer paid IBM for the applicable Materials or for use of the applicable Base Components up to a maximum of twelve (12) months of applicable charges. This is IBM's entire obligation to Customer with regard to any claim of infringement. Notwithstanding the foregoing, IBM is not responsible for third party claims based on: + + 1. anything Customer provides which is incorporated into the Materials; + + 2. Customer's modification of the Materials; + + 5 + + 3. the combination, operation, or use of the Materials with any product, data, or apparatus that IBM did not provide; or + + + + + + 4. non-IBM hardware, software, or data, including those that may be in the Base Components. + +8.2 Indemnification by Customer + +a. Customer will defend IBM and its Enterprise and their employees, officers, and directors against any third party claim (and pay all damages that a court of competent jurisdiction awards, or which Customer agrees in any final settlement to such third party and any reasonable attorneys' fees and expenses of defense incurred by IBM): + + 1. that Content or Customer's use of the Services violates Customer's obligation in Section 11.2(b); + + 2. that Customer Components infringe that party's patent or copyright; + + 3. that is brought by a Services Recipient and is related, directly or indirectly, to the Services; or + + 4. arising out of or related to a mechanics' lien Customer is required to cancel and discharge pursuant to this Agreement. + +b. For indemnification under this Section 8.2, IBM will: + + 1. promptly notify Customer in writing of the claim; and + + 2. allow Customer to control, and will cooperate with Customer in, the defense and any related settlement negotiations. + +c. Notwithstanding anything else to the contrary contained herein, Customer shall be relieved of its indemnification duty or obligation to the extent that IBM's bad faith, willful misconduct or gross negligence. breach of its contractual obligations hereunder is a cause of the damages suffered by the Services Recipient. + +-------------------------------------------------------------------------------- 9.0 Limitation of Liability + +9.1 IBM's Limitation of Liability + +Circumstances may arise where, because of a default on IBM's part or other liability, Customer is entitled to recover damages from IBM. Regardless of the basis on which Customer is entitled to claim damages from IBM (including fundamental breach, negligence, misrepresentation, or other contract or tort claim), IBM is liable for no more than: + +a. indemnification payments as provided in Section 8.1; + +b. damages for bodily injury (including death) and damage to real property and tangible personal property; and + +c. the amount of any other actual direct damages, up to the greater of $100,000 or the charges paid by Customer to IBM for the Services in the twelve (12) months immediately preceding the accrual of the first claim related to the Services. The foregoing limit also applies to any of IBM's Affiliates and Subcontractors. It is the cumulative maximum for which IBM and its Affiliates and Subcontractors are collectively responsible. Under no circumstances is IBM, its Affiliates or its Subcontractors liable for any of the following: + + 1. third party claims against Customer for damages (other than those expressly provided in Subsections 9.1(a) and 9.1(b)); or + + 2. loss of, or damage to, Customer's or any other entity's records or data. + +9.2 Customer's Limitation of Liability + +Circumstances may arise where, because of a default on Customer's part or other liability, IBM is entitled to recover damages from Customer. Regardless of the basis on which IBM is entitled to claim damages from Customer (including fundamental breach, negligence, misrepresentation, or other contract or tort claim), Customer is liable for no more than: + +a. Indemnification payments as provided in Section 8.2; + +b. damages for bodily injury (including death) and damage to real property and tangible personal property; and + +(c) the amount of any other actual direct damages, up to the greater of $100,000 or the charges paid by Customer to IBM for the Services in the twelve (12) months immediately preceding the accrual of the first claim related to the Services. The foregoing limit also applies to any of Customer's Affiliates. It is the cumulative maximum for which Customer and its Affiliates are collectively responsible. Under no circumstances is Customer or its Affiliates liable for any third party claims against IBM for damages (other than those + + 6 + +expressly provided in Subsections 9.2(a) and 9.2(b)). + +-------------------------------------------------------------------------------- 10.0 Disclaimer of Consequential Damages + + + + + +a. In no event will either party be liable to the other for special, incidental, or indirect damages or for any consequential damages (including lost profits or savings), even if they are informed of the possibility; provided that this Section 10 does not apply to Customer's failure to pay any amounts owing to IBM under this Agreement (including amounts owing for Services that would have been rendered but for Customer's breach of this Agreement). + +-------------------------------------------------------------------------------- 11.0 Other Customer Obligations + +11.1 Services Support + +Customer will comply with its responsibilities to support the Services as specified in Attachment A and in applicable Service Option Attachments. Such obligations are to be performed at no charge to IBM. IBM's obligations are contingent on Customer meeting such support obligations. + +11.2 Representations and Warranties + +Customer represents and warrants that: + +a. it has the requisite corporate power and authority to execute, deliver and perform its obligations under this Agreement; Customer has no contractual or other obligation that (i) restricts or prohibits Customer's execution or performance of this Agreement, or (ii) Customer will breach in connection with the execution or performance of this Agreement; and + +b. its use of the Services and all Content will comply with the Acceptable Use Policy. + +11.3 Suspected Violations + +IBM reserves the right to investigate potential violations of the representations and warranties in Subsection 11.2(b). If IBM reasonably determines that a breach of any such warranty has occurred, then IBM may, in its sole and reasonable discretion: + +a. restrict Customer's access to the Services; + +b. remove or require removal of any offending Content; + +c. terminate this Agreement for cause; and/or + +d. exercise other rights and remedies, at law or in equity. + +Except in an emergency or as may otherwise be required by law, before undertaking the activities in Subsection 11.3(a) or 11.3(b), IBM will attempt to notify Customer by any reasonably practical means under the circumstances, such as, without limitation, by telephone or e-mail. + +Customer will promptly notify IBM of any event or circumstance related to this Agreement, Customer's use of the Services, or Content of which Customer becomes aware that could lead to a claim or demand against IBM, and Customer will provide all relevant information relating to such event or circumstance to IBM at IBM's request. + +11.4 Required Consents + +Customer will promptly obtain and upon request provide to IBM evidence of such Required Consents necessary for IBM to provide the Services. IBM will be relieved of its obligations to the extent that they are affected by Customer's failure to obtain and provide promptly to IBM any Required Consents. + +11.5 Capacity Planning + +Customer is responsible for determining whether the Base Components, IBM provided Internet access bandwidth, Customer Components and their combination will meet Customer's capacity or performance needs. Customer is responsible for planning for and requesting changes to the Base Components or IBM provided Internet access bandwidth, as determined by Customer, including any additional capacity required to support anticipated peaks in demand that may significantly increase Web site hits, transaction volumes, or otherwise increase system resource utilization. + +11.6 Content and Digital Certificates + +Customer is solely responsible for: + +a. all Content including, without limitation, its selection, licensing, accuracy, performance, maintenance, and support; and + +b. the selection, management and use of any public and private keys and digital certificates it may use with the Services. + +-------------------------------------------------------------------------------- 12.0 Base Components + +12.1 License + +IBM grants Customer a nonexclusive, revocable license to use the Base Components solely in connection with the Services as provided under this Agreement. Customer agrees not to download or otherwise copy, reverse assemble, reverse compile, or otherwise translate the software + + + + + + 7 + +portions of the Base Components, other than to make one copy for backup purposes. + +12.2 Maintenance of Base Components + +For Base Components provided hereunder, IBM will provide, at no additional cost to Customer, maintenance as reasonably determined by IBM and upon notice to Customer. Unless otherwise specified in an SOA, such maintenance excludes upgrades to Base Components. Call back response times for Base Component failures through issue resolution is designated in the relevant Service Option Attachment. + +12.3 No Sale or Lease of Goods + +As between Customer and IBM, IBM retains all right, title and interest in the Base Components. No goods are sold or leased by IBM under this Agreement. If Customer desires to purchase or to lease goods from IBM, such purchase or lease will be governed by a separate mutually acceptable written agreement between Customer and IBM or an IBM Affiliate. + +12.4 No Lease of Real Property + +This Agreement is a services agreement and not a lease of any real property. + +-------------------------------------------------------------------------------- 13.0 Changes + +13.1 Services + +IBM, in its reasonable discretion, may change the terms and conditions of Attachment A and/or Service Option Attachments, upon at least ninety (90) days prior notice to Customer. IBM may change the prices of Service Option Attachments after twelve (12) months following the applicable Service Option Attachment Start Date upon at least ninety (90) days prior written notice to Customer. Any such changes will not apply retroactively. If Customer disagrees with any such changes, Customer may in its sole discretion terminate this Agreement (or some or all of the affected Service Option Attachments) without the payment of termination charges upon notice to IBM at least thirty (30) days prior to the effective date of the applicable change. + +13.2 Acceptable Use Policy + +IBM, in its reasonable discretion, may modify the Acceptable Use Policy upon thirty (30) days' notice to Customer. + +13.3 Amendments + +Except for changes pursuant to Sections 13.1 and 13.2, this Agreement may be amended only by a writing signed by authorized representatives of both parties. + +-------------------------------------------------------------------------------- 14.0 General + +14.1 Headings + +The headings of the various sections of this Agreement have been inserted for convenience only and shall not affect the interpretation of this Agreement. + +14.2 Survival + +Any of these terms and conditions which by their nature extend beyond the Agreement termination or expiration remain in effect until fulfilled, including, without limitation, Sections 3.5, 4, 5, 6, 7, 8, 9, 10, 11.2, 11.3, 11.6, 12.2, 12.3, and 14, and apply to both Customer's and IBM's respective successors and assignees. + +14.3 Choice of Law + +This Agreement will be governed by the substantive laws of the State of New York, without regard for its conflict of laws provisions. + +14.4 Waiver of Jury Trial + +The parties waive any right to a jury trial in any proceeding arising out of or related to this Agreement. + +14.5 Severability + +If any provision of this Agreement shall be held by a court of competent jurisdiction to be invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining provisions of this Agreement shall in no way be affected or impaired thereby, so long as the remaining provisions of this Agreement still express the original intent of the parties. If the original intent of the parties can not be preserved, this Agreement shall either be renegotiated or terminated. + +14.6 Publicity and Trademarks + +Neither party grants the other the right to use its or any of its Affiliates' trademarks, trade names, or other designations in any promotion, publication, or Web site without prior written consent. Except as may be required by law or as may be required by IBM to perform the Services, neither party may disclose to any third party the terms and conditions of this Agreement, without prior + + + + + +written consent. + +14.7 No Third-Party Beneficiaries + +Except as expressly provided in Section 8, this Agreement does not create any intended third party beneficiary rights. + +14.8 Personnel + +Each party is responsible for the supervision, direction, and control of its respective personnel. IBM reserves the right to determine the assignment of its personnel. IBM may subcontract portions of + + 8 + +the Services to Subcontractors and Affiliates selected by IBM. + +14.9 No Agency + +This Agreement does not create an agency, joint venture, or partnership between the parties. + +14.10 Assignment + +Customer will not assign this Agreement or any of its rights hereunder without the prior written consent of IBM, such consent not to be unreasonably withheld. Notwithstanding the foregoing, Customer may assign this Agreement to a successor organization by merger, consolidation or acquisition. Any attempted assignment in violation of the foregoing will be void. In any permitted assignment, Customer will remain liable for its obligations hereunder. + +14.11 No Resale + +Customer shall not resell the Services, in whole or in part. + +14.12 Risk of Loss + +Risk of loss for all Base Components shall at all times remain with IBM. Risk of loss for all Customer Components shall at all times remain with Customer. + +14.13 Force Majeure + +Except for payment obligations hereunder, neither party is responsible to fulfill its obligations to the extent due to causes beyond its control. + +14.14 Actions Period + +Neither party will bring a legal action related to this Agreement more than two years after the cause of action accrued. + +14.15 Waiver + +The failure of one party to insist upon strict adherence to any term of this Agreement on any occasion shall not be considered a waiver, nor shall it deprive that party of the right to insist later on adherence thereto. Any waiver must be in writing and signed by an authorized representative of the waiving party. + +14.16 Freedom of Action + +Each party is free to enter into similar agreements with others. + +14.17 Limitation of Licenses + +Each of us grants only the licenses expressly specified herein. No other licenses or rights (including licenses or rights under patents) are granted. + +14.18 Data Protection + +You agree to allow International Business Machines Corporation and entities within its Enterprise to store and use your contact information, including names, phone numbers, and e-mail addresses, anywhere they do business. Such information will be processed and used in connection with our business relationship, and may be provided to contractors, Business Partners, and assignees of IBM Corp. and entities within its Enterprise for uses consistent with their collective business activities, including communicating with you (for example, for processing orders, for promotions, and for marketing research). For personal information processed by IBM on your behalf as part of the Services, IBM will act in accordance with your instructions by following such processing and security obligations as are contained in this Agreement. You also confirm that you are solely responsible for ensuring that any processing and security obligations comply with applicable data protection laws. Your contact information shall not be considered personal information processed on your behalf. + +14.19 Geographic Scope + +Although it is possible that Services Recipients outside of the United States of America may access Customer's Web site, IBM's delivery of the Services will only occur within the United States of America, and IBM's obligations hereunder are valid only in the United States of America. + +14.20 Notices + +Any notices required or permitted hereunder will be effective upon receipt and + + + + + +will be personally delivered; mailed via the postal service; sent by reliable overnight courier; or transmitted by confirmed facsimile. Except for notices under Section 11.3, all notices will be in writing and addressed to the applicable party's designated representative at the address specified in this Agreement. Except as to notices permitted or required under Sections 3 or 8, the parties agree that electronic mail messages sent between them using security procedures sufficient to reasonably authenticate them will be deemed writings. In addition, IBM may provide notice under Section 13.2 by a posting to the Web site identified in Section 1.0(a). + + 9 + +Customer and IBM agree that this Agreement, including the Base Terms and applicable attachments and Order Forms, is the complete agreement between the parties relating to the subject matter hereof. This Agreement replaces and supersedes any other prior or contemporaneous agreements or communications between the parties related to the subject matter hereof. + +Agreed and Accepted: + +Bluefly Inc. International Business Machines Corporation + +By: /s/ Patrick C. Barry By: /s/ Maura Lynch Gray ----------------------------- ---------------------------- Customer Authorized Signature Authorized Signature + +Patrick C. Barry 1/9/02 Maura Lynch Gray 1/14/02 ------------------------------- ------------------------------- Name (type or print) Date Name (type or print) Date + +Chief Financial Officer and Chief Operating Officer Business Unit Executive --------------------------------- ------------------------------- Title Title + +Customer number: Agreement number: Customer address: 42 West 39th Street 9th Floor NY,NY 10018 + + Engagement number: IBM contract representative: IBM Services identifier: FL + +After signing, please return a copy of this Agreement to the following address: + +IBM Global Services 3109 W. Dr. M. L. King, Jr. Blvd. Tampa, FL 33607 Attention: Order Fulfillment Services + + 10 \ No newline at end of file diff --git a/full_contract_txt/BLUEHILLSBANCORP,INC_05_20_2014-EX-1.1-AGENCY AGREEMENT.txt b/full_contract_txt/BLUEHILLSBANCORP,INC_05_20_2014-EX-1.1-AGENCY AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..868891dfed686840fc8ac7023f09145f48547d37 --- /dev/null +++ b/full_contract_txt/BLUEHILLSBANCORP,INC_05_20_2014-EX-1.1-AGENCY AGREEMENT.txt @@ -0,0 +1,553 @@ +Exhibit 1.1 + +Blue Hills Bancorp, Inc. up to 24,150,000 Shares (subject to increase up to 27,772,500 shares) + +SHARES ($0.01 Par Value) + +Subscription Price $10.00 Per Share + +AGENCY AGREEMENT + +May 14, 2014 + +Keefe, Bruyette & Woods, Inc. 10 South Wacker Drive Investment Banking, Suite 3400 Chicago, Illinois 60606 + +Ladies and Gentlemen: + +Blue Hills Bancorp, Inc. (the "Holding Company"), a newly formed Maryland corporation, Hyde Park Bancorp, MHC, a Massachusetts­ chartered mutual holding company (the "MHC"), Hyde Park Bancorp, Inc., a Massachusetts corporation (the "Mid­Tier"), and Blue Hills Bank, a Massachusetts­chartered stock savings bank (the "Bank" and together with the Holding Company, the MHC and the Mid­Tier, the "Blue Hills Parties"), hereby confirm their agreement with Keefe, Bruyette & Woods, Inc. (the "Agent") as follows: + +Section 1. The Offering. The MHC, in accordance with the plan of conversion as adopted by the Boards of Directors of each of the Blue Hills Parties (the "Plan"), intends to convert from the current mutual holding company form of organization to a stock holding company form of organization (the "Conversion"). Pursuant to the Plan, the Holding Company will offer and sell up to 24,150,000 shares (subject to increase up to 27,772,500 shares) of its common stock, $0.01 par value per share (the "Shares"), in a subscription offering (the "Subscription Offering") to (1) depositors of the Bank with Qualifying Deposits (as defined in the Plan) as of February 28, 2013 ("Eligible Account Holders"), (2) the Bank's tax­ qualified employee benefit plans, including the employee stock ownership plan established by the Bank (the "ESOP"), and (3) employees, officers, directors, trustees and corporators of the Bank, the Mid-Tier and the MHC who do not have a higher priority to purchase stock. Subject to the prior subscription rights of the above­listed parties, the Holding Company may offer for sale in a direct community offering (the "Community Offering" and when referred to together with or subsequent to the Subscription Offering, the "Subscription and Community Offering") the Shares not subscribed for or ordered in the Subscription Offering to members of the general public to whom a copy of the Prospectus (as hereinafter defined) is delivered with a preference given first to natural persons and trusts of natural persons residing in the local community as defined in the Plan, and thereafter to cover orders of other members of the general public. It is anticipated that Shares not subscribed for in the Subscription and Community Offering may be offered to certain members of the general public on a best efforts basis through a selected dealers agreement (the "Syndicated Community Offering") or to certain members of the general public in a firm commitment underwritten offering (the "Underwritten Offering") with the Agent acting as sole book­running manager (the Underwritten Offering, Subscription Offering, Community Offering and Syndicated Community Offering are collectively referred to as the "Offering"). It is acknowledged that the purchase of Shares in the Offering is subject to the maximum and minimum purchase limitations as described in the Plan and that the Holding Company may reject, in whole or in part, any order received in the Community Offering or Syndicated Community Offering. + + + + + +The Holding Company has filed with the Securities and Exchange Commission (the "Commission") a registration statement on Form S-1 (File No. 333­194486) (the "Registration Statement"), containing a prospectus relating to the Subscription and Community Offering, for the registration of the Shares under the Securities Act of 1933 (the "1933 Act"), and has filed such amendments thereof and such amended prospectuses as may have been required to the date hereof. The term "Registration Statement" shall include all financial schedules and exhibits thereto, as amended, including post-effective amendments. The prospectus, as amended, on file with the Commission at the time the Registration Statement initially became effective is hereinafter called the "Prospectus," except that if any prospectus is filed by the Holding Company pursuant to Rule 424(b) or (c) of the rules and regulations of the Commission under the 1933 Act (the "1933 Act Regulations") differing from the prospectus on file at the time the Registration Statement initially became effective, the term "Prospectus" shall refer to the prospectus filed pursuant to Rule 424(b) or (c) from and after the time said prospectus is filed with the Commission. + +In accordance with the Massachusetts General Laws and the rules and regulations governing the conversion of Massachusetts mutual holding companies to stock holding companies (including, without limitation, Chapter 167H of the Massachusetts General Laws and Chapter 33, Subpart D of the Code of Massachusetts Regulations), as from time to time amended or supplemented (the "Massachusetts Regulations"), the MHC has filed the Plan with the Massachusetts Division of Banks (the "Division") and has filed such amendments thereto and supplementary materials as may have been required to the date hereof (such application, as amended to date, if applicable, and as subsequently amended, if applicable, is hereinafter referred to as the "Massachusetts Conversion Application"), including copies of the MHC's Notice and Information Statement for a Special Meeting of its Corporators relating to the Conversion (the "Information Statement"), the Appraisal, and the Prospectus. + +In addition, the Holding Company has filed with the Board of Governors of the Federal Reserve System (the "FRB") an Application to Become a Bank Holding Company and/or Acquire an Additional Bank or Bank Holding Company on Form FR Y­3 (the "Holding Company Application") to become a bank holding company under Section 3 of the Bank Holding Company Act of 1956, as amended (the "BHCA"), as in effect at the time and the FRB has approved the Holding Company Application. The Massachusetts Conversion Application and the Holding Company Application are collectively referred to herein as the "Applications". + +Section 2. Retention of Agent; Compensation; Sale and Delivery of the Shares. Subject to the terms and conditions herein set forth, the Blue Hills Parties hereby appoint the Agent as their exclusive financial advisor and conversion agent (i) to utilize its best efforts to solicit subscriptions for Shares and to advise and assist the Holding Company and the Bank with respect to the sale of the Shares in the Offering and (ii) to participate in the Offering in the areas of market making and in syndicate formation or to act as sole book-running manager in the Underwritten Offering (if necessary). + +On the basis of the representations, warranties, and agreements herein contained, but subject to the terms and conditions herein set forth, the Agent accepts such appointment and agrees to consult with and advise the Blue Hills Parties as to the matters set forth in the letter agreements, dated October 7, 2013, among the MHC, the Mid-Tier, the Bank and the Agent (a copy of each of which is attached hereto as Exhibit A and Exhibit B). It is acknowledged by the Blue Hills Parties that the Agent shall not be required to purchase any Shares in the Subscription Offering, Community Offering, and Syndicated Community Offering or be obligated to take any action which is inconsistent with all applicable laws, regulations, decisions or orders. + +2 + + + + + +The obligations of the Agent pursuant to this Agreement shall terminate upon termination of the Offering, but in no event later than 45 days after the completion of the Subscription Offering, unless extended (the "End Date"). All fees or expenses due to the Agent but unpaid will be payable to the Agent in next day funds at the earlier of the Closing Date (as hereinafter defined) or the End Date. In the event the Offering is extended beyond the End Date, the Blue Hills Parties and the Agent may agree to renew this Agreement under mutually acceptable terms. + +In the event the Holding Company is unable to sell a minimum of 17,850,000 Shares within the period herein provided, this Agreement shall terminate and the Holding Company shall refund to any persons who have subscribed for any of the Shares the full amount which it may have received from them plus accrued interest, as set forth in the Prospectus; and none of the parties to this Agreement shall have any obligation to the other parties hereunder, except as set forth in this Section 2 and in Sections 7, 9 and 10 hereof. In the event the Offering is terminated for any reason not attributable to the action or inaction of the Agent, the Agent shall be paid the fees due to the date of such termination pursuant to subparagraphs (a) and (e) below. + +The Agent shall receive the following compensation for its services hereunder: + +(a) A management fee of $50,000 payable in four installments of $12,500 on the first day of October 2013, December 2013, March 2014 and June 2014. Such fees shall be deemed to have been earned when due. Should the Offering be terminated for any reason not attributable to the action or inaction of Agent, Agent shall have earned and be entitled to be paid fees accruing through the stage at which point the termination occurred. + +(b) A Success Fee of 0.85% shall be paid based on the aggregate purchase price of the Shares sold in the Subscription Offering and the Community Offering excluding shares purchased by the Blue Hills Parties' officers, directors, trustees or employees (or members of their immediate family) plus any ESOP, tax-qualified or stock based compensation plans or similar plan created by the Blue Hills Parties for some or all of their directors or employees or by the foundation (or any shares contributed to the foundation). The Management Fee described in Section 2(a) above will be credited against the Success Fee paid pursuant to this paragraph. + +(c) If any of the Shares remain available after the Subscription Offering and Community Offering, at the request of the Holding Company, Agent will seek to form a syndicate of registered broker-dealers to assist in the sale of Shares on a best efforts basis, subject to the terms and conditions set forth in a selected dealers agreement to be entered into between the Holding Company and Agent. Agent will endeavor to distribute the Shares among dealers in a fashion which best meets the distribution objectives of the Holding Company and the Plan. Agent will be paid a fee not to exceed 5.25% of the aggregate Purchase Price of the Shares sold in the Syndicated Community Offering. From this fee, Agent will pass onto selected broker-dealers, who assist in the Syndicated Community Offering, an amount competitive with gross underwriting discounts charged at such time for comparable amounts of stock sold at a comparable price per share in a similar market environment. Fees with respect to purchases affected with the assistance of a broker/dealer other than Agent shall be transmitted by Agent to such broker/dealer. The decision to utilize selected broker-dealers will be made by Agent upon consultation with the Holding Company. + +(d) The Holding Company may engage Agent to offer the Shares to certain members of the general public in the Underwritten Offering with Agent acting as sole book-running manager. In the event that Agent sells Shares in the Underwritten Offering, the underwriting discount will equal 5.25% of the aggregate Purchase Price of the Shares sold in the Underwritten Offering to Agent and to any other broker-dealer participating as an underwriter in the Underwritten Offering. + +3 + + + + + +(e) If, as a result of any resolicitation of subscribers undertaken by the Holding Company, the Agent reasonably determines that it is required or requested to provide significant services, the Agent will be entitled to additional compensation for such services, which additional compensation will not exceed $50,000. + +(f) The Holding Company shall reimburse the Agent for its reasonable out-of-pocket expenses, including costs of travel, meals and lodging, photocopying, telephone, facsimile and couriers, etc. not to exceed $25,000. In addition, the Holding Company will reimburse the Agent for fees and expenses of its counsel not to exceed $100,000. In the event of unusual circumstances or delays or a re-solicitation in connection with the Offering, including in the event of a material delay in the Offering that would require an update of the financial information in tabular form to reflect a period later than that set forth in the original filing of the Registration Statement, the Agent shall be reimbursed for its additional expenses up to a maximum of $10,000 in the case of additional out-of-pocket expenses of the Agent, and up to an additional $25,000 in the case of additional fees and expenses of the Agent's counsel. The Holding Company will bear the expenses of the Offering customarily borne by issuers including, without limitation, regulatory filing fees, SEC, Blue Sky and Financial Institution Regulatory Authority ("FINRA") filing and registration fees; the fees of the Holding Company's accountants, attorneys, appraiser, transfer agent and registrar, printing, mailing and marketing and syndicate expenses associated with the Conversion and Offering; and the fees set forth under this Section 2. + +Conversion Agent Services. The Agent shall also receive a fee of $50,000 for certain conversion agent services set forth in the letter agreement, dated October 7, 2013, among the MHC, the Mid-Tier, the Bank and the Agent (a copy of which is attached hereto as Exhibit B), $10,000 of which has already been paid to the Agent and is nonrefundable and the balance of which shall be payable to the Agent upon completion of the Offering. The Holding Company will reimburse the Agent, upon request made from time to time, for its reasonable out-of-pocket expenses incurred in connection with its conversion agent services not to exceed $25,000 without the consent of the Blue Hills Parties. However, in the event of unusual circumstances, delays or a re-solicitation in connection with the offering, the total fees paid to the Agent may be increased by an additional amount not to exceed $10,000. + +Section 3. Sale and Delivery of Shares. If all conditions precedent to the consummation of the Conversion, including without limitation, the sale of all Shares required by the Plan to be sold, are satisfied, the Holding Company agrees to issue, or have issued, the Shares sold in the Offering and to release for delivery certificates for such Shares on the Closing Date against payment to the Holding Company by any means authorized by the Plan; provided, however, that no funds shall be released to the Holding Company until the conditions specified in Section 8 hereof shall have been complied with to the reasonable satisfaction of the Agent or its counsel. The release of Shares against payment therefor shall be made on a date and at a place acceptable to the Blue Hills Parties and the Agent as set forth in Section 14. Certificates for shares shall be delivered directly to the purchasers in accordance with their directions as provided by the Holding Company to the Holding Company's registrar and transfer agent. The date upon which the Holding Company shall release or deliver the Shares sold in the Offering, in accordance with the terms herein, is called the "Closing Date." + +Section 4. Representations and Warranties of the Blue Hills Parties. The Blue Hills Parties, jointly and severally, represent and warrant to and agree with the Agent as follows: + +(a) The Registration Statement, which was prepared by the Blue Hills Parties and filed with the Commission, has been declared effective by the Commission, no stop order has been issued with respect thereto and no proceedings therefor have been initiated or, to the knowledge of the Blue Hills Parties, threatened by the Commission. At the time the Registration Statement, including the Prospectus contained therein (including any amendment or supplement), became effective, at the Applicable Time + +4 + + + + + +(as defined in Section 4(c) hereof) and at the Closing Date, the Registration Statement complied and will comply in all material respects with the requirements of the 1933 Act and the 1933 Act Regulations and the Registration Statement, including the Prospectus contained therein (including any amendment or supplement thereto), and any information regarding the Blue Hills Parties contained in Sales Information (as such term is defined in Section 9 hereof) authorized by the Blue Hills Parties for use in connection with the Offering, did not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and at the time any Rule 424(b) or (c) Prospectus is filed with the Commission and at the Closing Date referred to in Section 3 hereof, the Prospectus (including any amendment or supplement thereto) and any information regarding the Holding Company contained in Sales Information (as such term is defined in Section 9 hereof) authorized by the Holding Company for use in connection with the Offering contains all statements that are required to be stated therein in accordance with the 1933 Act and the 1933 Act Regulations and does not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; provided, however, that the representations and warranties in this Section 4(a) shall not apply to statements or omissions made in reliance upon and in conformity with written information furnished to the Holding Company by the Agent or its counsel expressly regarding the Agent for use in the Prospectus (the "Agent Information," which the Blue Hills Parties acknowledge appears only in the first sentence of the second paragraph under the caption "The Conversion; Plan of Distribution—Marketing and Distribution; Compensation" in the Prospectus). + +(b) None of the Blue Hills Parties has directly or indirectly distributed or otherwise used and will not directly or indirectly distribute or otherwise use any prospectus, any "free writing prospectus" (as defined in Rule 405 of the 1933 Act Regulations) or other offering material (including, without limitation, content on the Holding Company's website that may be deemed to be a prospectus, free writing prospectus or other offering material) in connection with the offering and sale of the Shares other than any Permitted Free Writing Prospectus or the Prospectus or other materials permitted by the 1933 Act and the 1933 Act Regulations distributed by the Holding Company and reviewed and approved in advance for distribution by the Agent. The Holding Company has not, directly or indirectly, prepared or used and will not directly or indirectly, prepare or use, any Permitted Free Writing Prospectus except in compliance with the filing and other requirements of Rules 164 and 433 of the 1933 Act Regulations; assuming that such Permitted Free Writing Prospectus is so sent or given after the Registration Statement was filed with the Commission (and after such Permitted Free Writing Prospectus was, if required pursuant to Rule 433(d) under the Act, filed with the Commission), the sending or giving, by the Agent, of any Permitted Free Writing Prospectus will satisfy the provisions of Rules 164 and 433 (without reliance on subsections (b), (c) and (d) for Rule 164); and the Holding Company is not an "ineligible issuer" (as defined in Rule 405 of the 1933 Act Regulations) as of the eligibility determination date for purposes of Rules 164 and 433 of the 1933 Act Regulations with respect to the offering of the Shares or otherwise precluded under Rule 164 from using free writing prospectuses in connection with the offering of the Shares. + +(c) As of the Applicable Time (as defined below), neither (i) the Issuer-Represented General Free Writing Prospectus(es) issued at or prior to the Applicable Time and the Statutory Prospectus, all considered together (collectively, the "General Disclosure Package"), nor (ii) any individual Issuer-Represented Limited-Use Free Writing Prospectus, when considered together with the General Disclosure Package, included any untrue statement of a material fact or omitted to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The preceding sentence does not apply to statements in or omissions from any Prospectus included in the Registration Statement relating to the offered Shares or any Issuer-Represented Free Writing Prospectus based upon and in conformity with written information furnished to the Holding Company by the Agent specifically for use therein. As used in this paragraph and elsewhere in this Agreement: + +1. "Applicable Time" means each and every date when a potential purchaser submitted a subscription or otherwise committed to purchase Shares. + +5 + + + + + +2. "Statutory Prospectus," as of any time, means the Prospectus relating to the offered Shares that is included in the Registration Statement relating to the offered Shares immediately prior to the Applicable Time, including any document incorporated by reference therein. + +3. "Issuer­Represented Free Writing Prospectus" means any "issuer free writing prospectus," as defined in Rule 433(h) of the 1933 Act Regulations, relating to the offered Shares in the form filed or required to be filed or, if not required to be filed, in the form retained in the Holding Company's records pursuant to Rule 433(g) under the 1933 Act Regulations. The term does not include any writing exempted from the definition of prospectus pursuant to clause (a) of Section 2(a)(10) of the 1933 Act, without regard to Rule 172 or Rule 173 of the 1933 Act Regulations. + +4. "Issuer­Represented General Free Writing Prospectus" means any Issuer­Represented Free Writing Prospectus that is intended for general distribution to prospective investors. + +5. "Issuer­Represented Limited­Use Free Writing Prospectus" means any Issuer­Represented Free Writing Prospectus that is not an Issuer-Represented General Free Writing Prospectus. The term Issuer-Represented Limited-Use Free Writing Prospectus also includes any "bona fide electronic road show," as defined in Rule 433 of the 1933 Act Regulations, that is made available without restriction pursuant to Rule 433(d)(8)(ii) of the 1933 Act Regulations or otherwise, even though not required to be filed with the Commission. + +6. "Permitted Free Writing Prospectus" means any free writing prospectus as defined in Rule 405 of the 1933 Act Regulations that is consented to by the Holding Company, the Bank and the Agent. + +(d) Each Issuer-Represented Free Writing Prospectus, as of its date of first use and at all subsequent times through the completion of the Offering and sale of the offered Shares or until any earlier date that the Holding Company notified or notifies the Agent (as described in the next sentence), did not, does not and will not include any information that conflicted, conflicts or will conflict with the information contained in the Registration Statement. If at any time following the date of first use of an Issuer-Represented Free Writing Prospectus there occurred or occurs an event or development as a result of which such Issuer-Represented Free Writing Prospectus conflicted or would conflict with the information contained in the Registration Statement relating to the offered Shares or included or would include an untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances prevailing at that subsequent time, not misleading, the Holding Company has notified or will notify promptly the Agent so that any use of such Issuer-Represented Free-Writing Prospectus may cease until it is amended or supplemented and the Holding Company has promptly amended or will promptly amend or supplement such Issuer-Represented Free Writing Prospectus to eliminate or correct such conflict, untrue statement or omission. The foregoing two sentences do not apply to statements in or omissions from any Issuer-Represented Free Writing Prospectus based upon and in conformity with written information furnished to the Holding Company by the Agent specifically for use therein. + +6 + + + + + +(e) The Holding Company has filed the Holding Company Application with the FRB and has published notice of such filing and the Holding Company Application is accurate and complete in all material respects. The Holding Company has received written notice from the FRB of its approval of the acquisition of the Bank, such approval remains in full force and effect and no order has been issued by the FRB suspending or revoking such approval and no proceedings therefor have been initiated or, to the knowledge of the Blue Hills Parties, threatened by the FRB or any other applicable regulator. At the date of such approval, the Holding Company Application complied in all material respects with the applicable provisions of the BHCA and the regulations promulgated thereunder, except as the FRB or any other applicable regulator has expressly waived such regulations in writing. + +(f) The MHC has filed the Massachusetts Conversion Application with the Division and the Massachusetts Conversion Application is accurate and complete in all material respects. The MHC has received written notice from the Division of its approval of the Prospectus, order form and marketing materials for use in the Offering, such approval remains in full force and effect and no order has been issued by the Division suspending or revoking such approval and no proceedings therefor have been initiated or, to the knowledge of the Blue Hills Parties, threatened by the Division. On the Closing Date, the MHC will have received written notice from the Division of its approval of the Conversion, and no order will have been issued by the Division suspending or revoking such approval and no proceedings therefor will have been initiated or, to the knowledge of the Blue Hills Parties, threatened by the Division. At the date of the applicable approval, the Prospectus, order form and marketing materials for use in the Offering and the Massachusetts Conversion Application complied in all material respects with the applicable provisions of the Massachusetts Regulations, except as the Division or any other applicable regulator has expressly waived such Massachusetts Regulations in writing. + +(g) The Blue Hills Parties have filed the Prospectus and any supplemental sales literature with the Commission, the FRB, the Division and any other applicable regulator. The Prospectus, the Information Statement and all supplemental sales literature, as of the date the Registration Statement became effective and on the Closing Date referred to in Section 3, complied and will comply in all material respects with the applicable requirements of the 1933 Act Regulations, the Massachusetts Regulations and, at or prior to the time of their first use, will have received all required authorizations of the Division and the Commission and any other applicable regulator for use in final form. No approval of any other regulatory or supervisory or other public authority is required in connection with the distribution of the Prospectus, the Information Statement and any supplemental sales literature that has not been obtained and a copy of which has been delivered to the Agent. The Holding Company and the Bank have not distributed any offering material in connection with the Offering except for the Prospectus, the Information Statement and any supplemental sales material that has been filed with the Registration Statement and the Applications and authorized for use by the Commission, the FRB and the Division, or any other applicable regulator. The information contained in the supplemental sales material filed as an exhibit to both the Registration Statement and the Applications does not conflict in any material respects with information contained in the Registration Statement and the Prospectus. + +(h) The Plan has been adopted by the Boards of Directors of the Blue Hills Parties, and the offer and sale of the Shares will have been conducted in all material respects in accordance with the Plan, the Massachusetts Regulations (except to the extent waived or otherwise approved by the Division) and all other applicable laws, regulations, decisions and orders, including all terms, conditions, requirements and provisions precedent to the Offering imposed upon the Blue Hills Parties by the Division, the Commission, or any other regulatory authority and in the manner described in the Prospectus. To the best knowledge of the Blue Hills Parties, no person has sought to obtain review of the final action of the Division or any other applicable regulator in approving the Conversion. + +7 + + + + + +(i) The Bank has been duly organized and validly existing as a Massachusetts-chartered stock savings bank and upon completion of the Conversion will continue to be a duly organized and validly existing Massachusetts-chartered savings bank in stock form, in both instances duly authorized to conduct its business and own its property as described in the Registration Statement and the Prospectus; the Bank has obtained all licenses, permits and other governmental authorizations currently required for the conduct of its business, except those that individually or in the aggregate would not have a material adverse effect on the conduct of the business, financial condition, results of operations, affairs or prospects of the Blue Hills Parties, taken as a whole (a "Material Adverse Effect"); all such licenses, permits and governmental authorizations are in full force and effect, and the Bank is in compliance with all laws, rules, regulations and orders applicable to the operation of its business, except where failure to be in compliance would not have a Material Adverse Effect; the Bank is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which its ownership of property or leasing of property or the conduct of its business requires such qualification, unless the failure to be so qualified in one or more of such jurisdictions would not have a Material Adverse Effect. The Bank does not own equity securities or any equity interest in any other business enterprise except as described in the Prospectus or as would not be material to the operations of the Blue Hills Parties, taken as a whole. Following completion of the Conversion and the Offering, the authorized capital stock of the Bank will consist of 10,000 shares of common stock, par value $1.00 per share (the "Bank Common Stock"), of which 5,000 shares of Bank Common Stock are issued and outstanding as of the date hereof; the issued and outstanding shares of Bank Common Stock have been duly authorized and validly issued and are fully paid and non-assessable and following completion of the Conversion, will be owned directly by the Holding Company free and clear of any security interest, mortgage, pledge, lien, encumbrances or legal or equitable claim; the terms and provisions of the Bank Common Stock conform to all statements thereto contained in the Prospectus. The Conversion will be effected in all material respects in accordance with all applicable statutes, regulations, decisions and orders; and, except with respect to the filing of certain post-sale, post- Conversion reports, and documents in compliance with the 1933 Act, the Massachusetts Regulations or letters of approval, at the Closing Date, all terms, conditions, requirements and provisions with respect to the Conversion imposed by the Commission, the FRB and the Division or any other applicable regulator, if any, will have been complied with by the Blue Hills Parties in all material respects or appropriate waivers will have been obtained and all applicable notice and waiting periods will have been satisfied, waived or elapsed. + +(j) The Holding Company is duly organized, validly existing and in good standing as a corporation under the laws of the State of Maryland with full corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Registration Statement and the Prospectus, and the Holding Company is, and at the Closing Date will be, qualified to do business as a foreign corporation in each jurisdiction in which the conduct of its business requires such qualification, except where the failure to so qualify would not have a Material Adverse Effect. The Holding Company has obtained all licenses, permits and other governmental authorizations currently required for the conduct of its business except those that individually or in the aggregate would not have a Material Adverse Effect; all such licenses, permits and governmental authorizations are in full force and effect, and the Holding Company is in all material respects complying therewith and with all laws, rules, regulations and orders applicable to the operation of its business. There are no outstanding warrants or options to purchase any securities of the Holding Company. + +(k) The MHC is duly organized, validly existing and in good standing as a mutual holding company organized under the laws of the Commonwealth of Massachusetts with full corporate power and authority to own and operate its properties and to conduct its business as described in the + +8 + + + + + +Registration Statement and the Prospectus and, at the Closing Date, the corporate existence of the MHC will cease to exist. The MHC has obtained all licenses, permits and other governmental authorizations currently required for the conduct of its business except those that individually or in the aggregate would not have a Material Adverse Effect; all such licenses, permits and governmental authorizations are in full force and effect, and the MHC is in all material respects complying therewith and with all laws, rules, regulations and orders applicable to the operations of its business. + +(l) The MHC has no capital stock. + +(m) The Mid-Tier is duly organized, validly existing and in good standing as a corporation organized under the laws of the Commonwealth of Massachusetts with full corporate power and authority to own and operate its properties and to conduct its business as described in the Registration Statement and the Prospectus and, at the Closing Date, the corporate existence of the Mid-Tier will cease to exist. The Mid-Tier has obtained all licenses, permits and other governmental authorizations currently required for the conduct of its business except those that individually or in the aggregate would not have a Material Adverse Effect; all such licenses, permits and governmental authorizations are in full force and effect, and the Mid-Tier is in all material respects complying therewith and with all laws, rules, regulations and orders applicable to the operations of its business. Immediately prior to the completion of the Conversion and the Offerings, the authorized capital stock of the Mid-Tier will consist solely of 275,000 shares of common stock, no par value, of which 1,000 shares will be issued and outstanding and held by the MHC, and 50,000 shares of preferred stock, no par value. As of the date hereof, 18,724 shares of Senior Non-Cumulative Perpetual Preferred Stock, Series A are issued and outstanding and held by The Secretary of the Treasury and no other shares of preferred stock will be issued or outstanding immediately prior to the completion of the Conversion and the Offerings. + +(n) Except as described in the Prospectus there are no contractual encumbrances or restrictions or requirements or legal restrictions or requirements required to be described therein, on the ability of any of the Blue Hills Parties, (A) to pay dividends or make any other distributions on its capital stock or to pay any indebtedness owed to another party, (B) to make any loans or advances to, or investments in, another party or (C) to transfer any of its property or assets to another party. Except as described in the Prospectus, there are no restrictions, encumbrances or requirements affecting the payment of dividends or the making of any other distributions on any of the capital stock of the Holding Company. + +(o) The Bank has properly administered all accounts for which it acts as a fiduciary, including but not limited to accounts for which it serves as a trustee, agent, custodian, personal representative, guardian, conservator or investment advisor, in accordance with the terms of the governing documents and applicable state and federal law and regulation, except where the failure to do so would not have a Material Adverse Effect. Neither the Bank, nor any of its respective directors, officers or employees has committed any material breach of trust with respect to any such fiduciary account, and the accountings for each such fiduciary account are true and correct in all material respects and accurately reflect the assets of such fiduciary account in all material respects. + +(p) The Bank is a member in good standing of the Federal Home Loan Bank of Boston ("FHLBB"). The deposit accounts of the Bank are insured by the FDIC up to the applicable limits, and upon consummation of the Conversion, the liquidation accounts for the benefit of Eligible Account Holders will be duly established in accordance with the requirements of the Massachusetts Regulations. No proceedings for the termination or revocation of such insurance are pending or, to the best knowledge of the Blue Hills Parties, threatened. + +9 + + + + + +(q) The Blue Hills Parties have good and marketable title to all real property and good title to all other assets material to the business of the Blue Hills Parties, taken as a whole, and to those properties and assets described in the Registration Statement and Prospectus as owned by them, free and clear of all liens, charges, encumbrances or restrictions, except such as are described in the Registration Statement and Prospectus or as are not material to the business of the Blue Hills Parties, taken as a whole; and all of the leases and subleases material to the business of the Blue Hills Parties, taken as a whole, under which the Blue Hills Parties hold properties, including those described in the Registration Statement and Prospectus, are in full force and effect. + +(r) The Holding Company has received an opinion of its special counsel, Luse Gorman Pomerenk & Schick, P.C. ("Luse Gorman"), with respect to the legality of the Shares to be issued and the federal income tax consequences of the Conversion and the opinion of Wolf & Co., P.C., with respect to the Massachusetts state income tax consequences of the Conversion, copies of which are filed as exhibits to the Registration Statement; all material aspects of such opinions are accurately summarized in the Registration Statement and the Prospectus. The facts upon which such opinions are based are truthful, accurate and complete in all material respects. None of Blue Hills Parties has taken or will take any action inconsistent therewith. + +(s) Each of the Blue Hills Parties has all such power, authority, authorizations, approvals and orders as may be required to enter into this Agreement, to carry out the provisions and conditions hereof and to issue and sell the Shares to be sold by the Holding Company as provided herein and as described in the Prospectus, subject to approval or confirmation by the Division or any other applicable regulator of the final Appraisal. The execution, delivery and performance of this Agreement and the consummation of the transactions herein contemplated have been duly and validly authorized by all necessary corporate action on the part of each of the Blue Hills Parties. This Agreement has been validly executed and delivered by each of the Blue Hills Parties and, assuming due execution and delivery by the Agent, is the valid, legal and binding agreement of each of the Blue Hills Parties enforceable in accordance with its terms (except as the enforceability thereof may be limited by bankruptcy, insolvency, moratorium, reorganization or similar laws relating to or affecting the enforcement of creditors' rights generally or the rights of creditors of bank holding companies, the accounts of whose subsidiaries are insured by the FDIC, or by general equity principles, regardless of whether such enforceability is considered in a proceeding in equity or at law, and except to the extent, if any, that the provisions of Sections 9 and 10 hereof may be unenforceable as against public policy or pursuant to applicable Federal law and the rules and regulations of the FRB). + +(t) None of the Blue Hills Parties is in violation of any directive received from the FRB, the Division or the FDIC to make any material change in the method of conducting its business so as to comply in all material respects with all applicable statutes and regulations (including, without limitation, regulations, decisions, directives and orders of the FRB, the Division or the FDIC) and, except as may be set forth in the Registration Statement, the General Disclosure Package and the Prospectus, there is no suit or proceeding or charge or action before or by any court, regulatory authority or governmental agency or body, pending or, to the knowledge of any of the Blue Hills Parties, threatened, which might materially and adversely affect the Offering, or which might result in any Material Adverse Effect. + +(u) The consolidated financial statements, schedules and notes related thereto which are included in the General Disclosure Package and the Prospectus fairly present the balance sheet, income statement, statement of changes in equity capital and statement of cash flows of the MHC on a consolidated basis at the respective dates indicated and for the respective periods covered thereby and comply as to form in all material respects with the applicable accounting requirements of the 1933 Act Regulations and Title 12 of the Code of Federal Regulations. Such consolidated financial statements, + +10 + + + + + +schedules and notes related thereto have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") consistently applied through the periods involved, present fairly in all material respects the information required to be stated therein and are consistent with the most recent financial statements and other reports filed by the Blue Hills Parties with the Division, the FDIC and the FRB, except that accounting principles employed in such regulatory filings conform to the requirements of the Division, the FDIC and the FRB and not necessarily to GAAP. The other financial, statistical and pro forma information and related notes included in the Prospectus present fairly the information shown therein on a basis consistent with the audited and unaudited consolidated financial statements of the Blue Hills Parties included in the Prospectus, and as to the pro forma adjustments, the adjustments made therein have been properly applied on the basis described therein. + +(v) The Blue Hills Parties carry, or are covered by, insurance in such amounts and covering such risks as is adequate for the conduct of their respective businesses and the value of their respective properties as is customary for companies engaged in a similar industry. + +(w) Since the respective dates as of which information is given in the Registration Statement including the Prospectus and except as disclosed in the General Disclosure Package and the Prospectus: (i) there has not been any material adverse change, financial or otherwise, in the condition of the Blue Hills Parties and their subsidiaries, considered as one enterprise, or in the earnings, capital, properties, business or prospects of the Blue Hills Parties and their subsidiaries considered as one enterprise, whether or not arising in the ordinary course of business; (ii) there has not been any material increase in the long­term debt of any of the Blue Hills Parties or in the principal amount of the Blue Hills Parties' consolidated assets which are classified by any of such entities as impaired, substandard, doubtful or loss or in loans past due 90 days or more or real estate acquired by foreclosure, by deed-in-lieu of foreclosure or deemed in-substance foreclosure or any material decrease in equity capital or total assets of any of the Blue Hills Parties; nor has any of the Blue Hills Parties issued any securities (other than in connection with the incorporation of the Holding Company) or incurred any liability or obligation for borrowing other than in the ordinary course of business; (iii) there have not been any material transactions entered into by the Blue Hills Parties; (iv) there has been no material adverse change in any of the Blue Hills Parties' relationship with its insurance carriers, including, without limitation, cancellation or other termination of any of the Blue Hills Parties' fidelity bond or any other type of insurance coverage; (v) there has been no material change in management of any of the Blue Hills Parties; (vi) none of the Blue Hills Parties has sustained any material loss or interference with its respective business or properties from fire, flood, windstorm, earthquake, accident or other calamity, whether or not covered by insurance; (vii) none of the Blue Hills Parties has defaulted in the payment of principal or interest on any outstanding debt obligations; (viii) the capitalization, liabilities, assets, properties and business of the Blue Hills Parties conform in all material respects to the descriptions thereof contained in the General Disclosure Package and the Prospectus; and (ix) none of the Blue Hills Parties has any material liabilities, contingent or otherwise, except as set forth in the Prospectus. + +(x) None of the Blue Hills Parties is (i) in violation of their respective articles, charters, organizational certificates or bylaws (and none of the Blue Hills Parties will be in violation of its articles of incorporation, charters, organizational certificates or bylaws upon completion of the Conversion), or (ii) in default (nor has any event occurred which, with notice or lapse of time or both, would constitute a defect) in the performance or observance of any obligation, agreement, covenant, or condition contained in any contract, lease, loan agreement, indenture, mortgage, or other instrument to which it is a party or by which it or any of its property may be bound, or to which any of the property or assets of the Blue Hills Parties is subject, except for defaults that would not, individually or in the aggregate, have a Material Adverse Effect, and there are no contracts or documents of the Blue Hills Parties that are required to be filed as exhibits to the Registration Statement or the Applications that have + +11 + + + + + +not been so filed. The execution and delivery of this Agreement and the consummation of the transactions herein contemplated will not: (i) conflict with or constitute a breach of, or default under, or result in the creation of any lien, charge or encumbrance upon any of the assets of any of the Blue Hills Parties pursuant to the respective articles of incorporation, charters or bylaws of the Blue Hills Parties or any contract, lease or other instrument in which the Blue Hills Parties has a beneficial interest, or any applicable law, rule, regulation or order; (ii) violate any authorization, approval, judgment, decree, order, statute, rule or regulation applicable to any of the Blue Hills Parties; or (iii) result in the creation of any material lien, charge or encumbrance upon any property of the Blue Hills Parties. + +(y) All documents made available or delivered by, or to be made available to or delivered by the Blue Hills Parties or their representatives in connection with the issuance and sale of the Shares, including records of account holders and depositors of the Bank, or in connection with the Agent's exercise of due diligence, except for those documents which were prepared by parties other than the Blue Hills Parties or their representatives, were on the dates on which they were delivered, or will be on the dates on which they are to be delivered, true, complete and correct in all material respects. + +(z) Upon consummation of the Conversion, the authorized, issued and outstanding equity capital of the Holding Company will be within the range set forth in the General Disclosure Package and the Prospectus under the caption "Capitalization," and no Shares have been or will be issued and outstanding prior to the Closing Date; the Shares will have been duly and validly authorized for issuance and, when issued and delivered by the Holding Company pursuant to the Plan against payment of the consideration calculated as set forth in the Plan and in the Prospectus, will be duly and validly issued, fully paid and non-assessable, except for shares purchased by the ESOP with funds borrowed from the Holding Company to the extent payment therefor in cash has not been received by the Holding Company; except to the extent that subscription rights and priorities pursuant thereto exist pursuant to the Plan, no preemptive rights exist with respect to the Shares; and the terms and provisions of the Shares will conform in all material respects to the description thereof contained in the Registration Statement and the Prospectus. On the Closing Date, the Shares will have been approved for listing on the Nasdaq Global Stock Market, subject to issuance. Upon the issuance of the Shares, good title to the Shares will be transferred from the Holding Company to the purchasers thereof against payment therefor, subject to such claims as may be asserted against the purchasers thereof by third-party claimants. + +(aa) No default exists, and no event has occurred which, with notice or lapse of time or both, would constitute a default on the part of any of the Blue Hills Parties in the due performance and observance of any term, covenant, agreement, obligation, representation, warranty or condition of any indenture, mortgage, deed of trust, note, bank loan or credit agreement, lease, license, permit or any other instrument or agreement to which the Blue Hills Parties is a party or by which any of them or any of their respective property is bound or affected which, in any such case, could have, individually or in the aggregate with other breaches, violations or defaults, a Material Adverse Effect; each of such agreements is in full force and effect and is the legal, valid and binding agreement of the applicable party and the other parties thereto, enforceable in accordance with its terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization or similar laws affecting the rights of creditors generally and subject to general principles of equity and no other party to any such agreement has instituted or, to the knowledge of the Blue Hills Parties, threatened any action or proceeding wherein any of the Blue Hills Parties or any subsidiary thereof would or might be alleged to be in default thereunder where such action or proceeding, if determined adversely to the Blue Hills Parties, would have a Material Adverse Effect. There are no contracts or documents that are required to be filed as exhibits to the Registration Statement or described in the Registration Statement, the Prospectus, or any Permitted Free Writing Prospectus which are not so filed or described as required, and such contracts and documents as are summarized in the Registration Statement, the Prospectus, and any Permitted Free Writing Prospectus are fairly summarized in all material respects. No party has sent or received any notice indicating the + +12 + + + + + +termination of or intention to terminate any of the contracts or agreements referred to or described in the Registration Statement, the Prospectus, or any Permitted Free Writing Prospectus, or filed as an exhibit to the Registration Statement, and, to the knowledge of the Blue Hills Parties, no such termination has been threatened by any party to any such contract or agreement. + +(bb) Subsequent to the date the Registration Statement is declared effective by the Commission and prior to the Closing Date, except as otherwise may be indicated or contemplated in the Registration Statement, none of the Blue Hills Parties has or will have issued any securities or incurred any liability or obligation, direct or contingent, for borrowed money, except borrowings from the same or similar sources indicated in the Prospectus in the ordinary course of its business. + +(cc) Except for the Savings Banks Employees Retirement Association Pension Plan and those plans set forth on Schedule 4(cc), none of the Blue Hills Parties maintains any "pension plan," as defined in the Employee Retirement Income Security Act of 1974, as amended ("ERISA"). In addition, (A) the employee benefit plans, including employee welfare benefit plans, of the Blue Hills Parties (the "Employee Plans") have been operated in compliance with the applicable provisions of ERISA, the Internal Revenue Code of 1986, as amended (the "Code"), all regulations, rulings and announcements promulgated or issued thereunder and all other applicable laws and governmental regulations, (B) no reportable event under Section 4043(c) of ERISA has occurred with respect to any Employee Plan of the Blue Hills Parties for which the reporting requirements have not been waived by the Pension Benefit Guaranty Corporation, (C) no prohibited transaction under Section 406 of ERISA, for which an exemption does not apply, has occurred with respect to any Employee Plan of the Blue Hills Parties and (D) all Employee Plans that are group health plans have been operated in compliance with the group health plan continuation coverage requirements of Section 4980B of the Code, except to the extent such noncompliance, reportable event or prohibited transaction would not have, individually or in the aggregate, a Material Adverse Effect. There are no pending or, to the knowledge of the Blue Hills Parties, threatened, claims by or on behalf of any Employee Plan, by any employee or beneficiary covered under any such Employee Plan or by any governmental authority, or otherwise involving such Employee Plans or any of their respective fiduciaries (other than for routine claims for benefits). + +(dd) No approval of any regulatory or supervisory or other public authority is required in connection with the execution and delivery of this Agreement or the issuance of the Shares, except for action by the Commission declaring the Registration Statement effective, and approval by the FRB, the Division and any necessary qualification, notification, registration or exemption under the securities or blue sky laws of the various states in which the Shares are to be offered, and except as may be required under the rules and regulations of the FINRA. + +(ee) Wolf & Co., P.C., which has certified the audited consolidated financial statements of the MHC included in the Prospectus, has advised the Blue Hills Parties in writing that they are, with respect to the Blue Hills Parties, independent registered public accountants within the applicable rules of the Public Company Accounting Oversight Board (United States). + +(ff) RP Financial LC, which has prepared the Appraisal, has advised the Blue Hills Parties in writing that it is independent of the Blue Hills Parties within the meaning of the Massachusetts Regulations and is believed by the Blue Hills Parties to be experienced and expert in the valuation and the appraisal of business entities, including savings banks, and the Blue Hills Parties believe that RP Financial LC has prepared the pricing information set forth in the Prospectus in accordance with the requirements of the Massachusetts Regulations. + +(gg) The Blue Hills Parties have timely filed or extended all required federal, state and local income and franchise tax returns required to be filed; the Blue Hills Parties have timely paid all + +13 + + + + + +taxes that have become due and payable in respect of such returns and no deficiency has been asserted with respect thereto by any taxing authority. The Blue Hills Parties have no knowledge of any tax deficiency which has been or might be assessed against them which, if subject to an unfavorable decision, ruling or finding, could have, individually or in the aggregate with other tax deficiencies, a Material Adverse Effect. All material tax liabilities have been adequately provided for in the financial statements of the Blue Hills Parties in accordance with GAAP. There are no transfer taxes or other similar fees or charges under Federal law or the laws of any state, or any political subdivision thereof, required to be paid in connection with the execution and delivery of this Agreement by the Holding Company or with the issuance or sale by the Holding Company of the Shares. + +(hh) Each of the Blue Hills Parties is in compliance in all material respects with the applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, and the regulations and rules thereunder. The Bank has established compliance programs and is in compliance in all material respects with the requirements of the USA PATRIOT Act and all applicable regulations promulgated thereunder, and, except as disclosed in the Prospectus, there is no charge, investigation, action, suit or proceeding before any court, regulatory authority or governmental entity or body pending or, to the knowledge of the Blue Hills Parties, threatened regarding the Bank's compliance with the USA PATRIOT Act or any regulations promulgated thereunder. + +(ii) All Sales Information (as defined in Section 9(a)) used by the Holding Company in connection with the Conversion that is required by the Division to be filed has been filed with and approved by the Division or any other applicable regulator. + +(jj) Except for the loan to the ESOP by the Holding Company or a subsidiary of the Holding Company, to the knowledge of the Blue Hills Parties, none of the Blue Hills Parties or the employees of the Blue Hills Parties has made any payment of funds as a loan for the purchase of the Shares or made any other payment of funds prohibited by law, and no funds have been set aside to be used for any payment prohibited by law. + +(kk) None of the Blue Hills Parties has: (i) issued any securities within the last 18 months (except for notes to evidence bank loans and reverse repurchase agreements or other liabilities in the ordinary course of business or as described in the Prospectus); (ii) had any material dealings within the 12 months prior to the date hereof with any member of the FINRA, or any person related to or associated with such member, other than discussions and meetings relating to the proposed Offering and routine purchases and sales of United States government and agency and other securities in the ordinary course of business; (iii) entered into a financial or management consulting agreement except as contemplated hereunder; and (iv) engaged any intermediary between the Agent and the Holding Company or the Bank in connection with the offering of the Shares, and no person is being compensated in any manner for such service. + +(ll) The Blue Hills Parties have not relied upon the Agent or its legal counsel for any legal, tax or accounting advice in connection with the Conversion. + +(mm) The records used by the Blue Hills Parties to determine the identities of Eligible Account Holders and employees, officers, directors, trustees and corporators of the Bank, the Mid-Tier and the MHC are accurate and complete in all material respects. + +(nn) None of the Blue Hills Parties is or intends to conduct business in a manner which would cause it to become an "investment company," an entity "controlled" by an "investment company" or an "investment adviser" within the meaning of the Investment Company Act of 1940, as amended, or the Investment Advisers Act of 1940, as amended. + +14 + + + + + +(oo) None of the Blue Hills Parties or any properties owned or operated by any of the Blue Hills Parties, is in violation of or liable under any Environmental Law (as defined below), except for such violations or liabilities that, individually or in the aggregate, would not have a Material Adverse Effect. There are no actions, suits or proceedings, or demands, claims, notices or investigations (including, without limitation, notices, demand letters or requests for information from any environmental agency) instituted or pending or, to the knowledge of the Blue Hills Parties, threatened relating to the liability of any property owned or operated by the Blue Hills Parties under any Environmental Law. To the knowledge of the Blue Hills Parties, there are no events or circumstances that could form the basis of an order for clean-up or remediation, or an action, suit or proceeding by any private party or governmental body or agency, against or affecting the Blue Hills Parties relating to any Environmental Law. For purposes of this subsection, the term "Environmental Law" means any federal, state, local or foreign law, statute, ordinance, rule, regulation, code, license, permit, authorization, approval, consent, order, judgment, decree, injunction or agreement with any regulatory authority relating to (i) the protection, preservation or restoration of the environment (including, without limitation, air, water, vapor, surface water, groundwater, drinking water supply, surface soil, subsurface soil, plant and animal life or any other natural resource), and/or (ii) the use, storage, recycling, treatment, generation, transportation, processing, handling, labeling, production, release or disposal of any substance presently listed, defined, designated or classified as hazardous, toxic, radioactive or dangerous, or otherwise regulated, whether by type or by quantity, including any material containing any such substance as a component. + +(pp) The Blue Hills Parties maintain a system of internal accounting controls sufficient to provide reasonable assurance that (A) transactions are executed in accordance with management's general or specific authorizations, (B) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain accountability for assets, (C) access to assets is permitted only in accordance with management's general or specific authorization, and (D) the recorded accounts or assets are compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any difference. The books, records and accounts and systems of internal accounting control of the Blue Hills Parties and its subsidiaries comply in all material respects with the requirements of Section 13(b)(2) of the Securities Exchange Act of 1934, as amended (the "1934 Act"). The Blue Hills Parties have established and maintain "disclosure controls and procedures" (as defined in Rule 13a­15(e) under the 1934 Act) that are effective in ensuring that the information the Holding Company will be required to disclose in the reports it files or submits under the 1934 Act is accumulated and communicated to the Holding Company's management (including its chief executive officer and chief financial officer) in a timely manner and recorded, processed, summarized and reported within the periods specified in the Commission's rules and forms. To the knowledge of the Blue Hills Parties, Wolf & Co., P.C. and the Audit Committee of the Board of Directors have been advised of: (A) any significant deficiency or material weakness in the design or operation of internal control over financial reporting which could adversely affect the Blue Hills Parties' ability to record, process, summarize, and report financial data; and (B) any fraud, whether or not material, that involves management or other employees who have a significant role in the Blue Hills Parties' internal accounting controls. + +(qq) All of the loans represented as assets of the Bank in the Prospectus meet or are exempt from all requirements of federal, state and local law pertaining to lending, including, without limitation, truth in lending (including the requirements of Regulation Z and 12 C.F.R. Part 226), real estate settlement procedures, consumer credit protection, equal credit opportunity and all disclosure laws applicable to such loans, except for violations which, if asserted, would not have a Material Adverse Effect. + +15 + + + + + +(rr) To the knowledge of the Blue Hills Parties, there are not and have not been any affiliations or associations (as such terms are defined by the FINRA) between any member of the FINRA and any of the Blue Hills Parties' officers, directors or 5% or greater security holders, except as set forth in the Registration Statement, filings with FINRA or the Prospectus. + +(ss) The Holding Company has taken all actions necessary to obtain at the Closing Date a blue sky memorandum from Luse Gorman. + +(tt) Any certificates signed by an officer of any of the Blue Hills Parties pursuant to the conditions of this Agreement and delivered to the Agent or their counsel that refers to this Agreement shall be deemed to be a representation and warranty by such Blue Hills Party to the Agent as to the matters covered thereby with the same effect as if such representation and warranty were set forth herein. + +(uu) The statistical and market related data contained in any Permitted Free Writing Prospectus, the Prospectus and the Registration Statement are based on or derived from sources which the Blue Hills Parties believe were reliable and accurate at the time they were filed with the Commission. No forward-looking statement (within the meaning of Section 27A of the 1933 Act and Section 21E of the 1934 Act) contained in the Registration Statement, the Prospectus, or any Permitted Free Writing Prospectus has been made or reaffirmed without a reasonable basis or has been disclosed other than in good faith. + +(vv) At or prior to the Closing, the Holding Company will have filed a Form 8-A with the Commission registering the Shares under Section 12(b) of the Exchange Act. + +Section 5. Representations and Warranties of the Agent. The Agent represents and warrants to the Blue Hills Parties as follows: + +(a) The Agent is a corporation and is validly existing in good standing under the laws of the State of New York with full power and authority to provide the services to be furnished to the Blue Hills Parties hereunder. + +(b) The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly and validly authorized by all necessary action on the part of the Agent, and this Agreement has been duly and validly executed and delivered by the Agent and is a legal, valid and binding agreement of the Agent, enforceable in accordance with its terms, except as the legality, validity, binding nature and enforceability thereof may be limited by (i) bankruptcy, insolvency, moratorium, reorganization, conservatorship, receivership or other similar laws relating to or affecting the enforcement of creditors' rights generally, and (ii) general equity principles regardless of whether such enforceability is considered in a proceeding in equity or at law. + +(c) Each of the Agent and its employees, agents and representatives who shall perform any of the services hereunder shall be duly authorized and empowered, and shall have all licenses, approvals and permits necessary to perform such services; and the Agent is a registered selling agent in each of the jurisdictions in which the Shares are to be offered by the Holding Company in reliance upon the Agent as a registered selling agent as set forth in the blue sky memorandum prepared with respect to the Offering. + +(d) The execution and delivery of this Agreement by the Agent, the consummation of the transactions contemplated hereby and compliance with the terms and provisions hereof will not conflict with, or result in a breach of, any of the terms, provisions or conditions of, or constitute a default (or an event which with notice or lapse of time or both would constitute a default) under, the articles of incorporation or bylaws of the Agent or any material agreement, indenture or other instrument to which the Agent is a party or by which it or its property is bound. + +16 + + + + + +(e) No approval of any regulatory or supervisory or other public authority is required in connection with the Agent's execution and delivery of this Agreement, except as may have been received. + +(f) There is no suit or proceeding or charge or action before or by any court, regulatory authority or government agency or body or, to the knowledge of the Agent, pending or threatened, which might materially adversely affect the Agent's performance under this Agreement. + +Section 6. Covenants of the Blue Hills Parties. The Blue Hills Parties hereby jointly and severally covenant and agree with the Agent as follows: + +(a) The Holding Company will not, at any time prior to or after the date the Registration Statement is declared effective, file any amendment or supplement to the Registration Statement without providing the Agent and its counsel an opportunity to review such amendment or supplement or file any amendment or supplement to which amendment or supplement the Agent and its counsel shall reasonably object. + +(b) If at any time following issuance of an Issuer-Represented Free Writing Prospectus there occurred or occurs an event or development as a result of which such Issuer Represented Free Writing Prospectus conflicted or would conflict with the information contained in the Registration Statement or included or would include an untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to make the statements therein, in light of the circumstances prevailing at the subsequent time, not misleading, the Holding Company has notified or will notify promptly the Agent so that any use of such Issuer-Represented Free Writing Prospectus may cease until it is amended or supplemented and the Holding Company has promptly amended or will promptly amend or supplement such Issuer-Represented Free Writing Prospectus to eliminate or correct such conflict, untrue statement or omission; provided, however, that this covenant shall not apply to any statement or omission made in reliance upon and in conformity with information furnished in writing to the Holding Company by the Agent expressly for use therein. + +(c) Each of the Blue Hills Parties represents and agrees that, unless it obtains the prior consent of the Agent, and the Agent represents and agrees that, unless it obtains the prior consent of the Blue Hills Parties, it has not made and will not make any offer relating to the offered Shares that would constitute an "issuer free writing prospectus" as defined in Rule 433 of the 1933 Act Regulations, or that would constitute a "free writing prospectus," as defined in Rule 405 of the 1933 Act Regulations, required to be filed with the Commission. The Holding Company represents that it has treated or agrees that it will treat each Permitted Free Writing Prospectus as an "issuer free writing prospectus," as defined in Rule 433 of the 1933 Act Regulations, and has complied and will comply in all material respects with the requirements of Rule 433 of the 1933 Act Regulations applicable to any Permitted Free Writing Prospectus, including timely Commission filing where required, legending and record keeping. The Blue Hills Parties need not treat any communication as a free writing prospectus if it is exempt from the definition of prospectus pursuant to clause (a) of Section 2(a)(10) of the 1933 Act without regard to Rule 172 or 173 of the 1933 Act Regulations. + +(d) The Holding Company will not, at any time prior to or after the Holding Company Application is approved by the FRB and any other applicable regulator, file any amendment or supplement to such Holding Company Application without providing the Agent and its counsel an opportunity to review such amendment or supplement or file any amendment or supplement to which amendment or supplement the Agent and its counsel shall reasonably object. + +17 + + + + + +(e) The Blue Hills Parties will not, at any time prior to or after the Massachusetts Conversion Application is approved by the Division, file any amendment or supplement to such Massachusetts Conversion Application without providing the Agent and its counsel an opportunity to review such amendment or supplement or file any amendment or supplement to which amendment or supplement the Agent and its counsel shall reasonably object. + +(f) The Blue Hills Parties will use their best efforts to cause any post-effective amendment to the Registration Statement to be declared effective by the Commission and any post-approval amendment to the Applications to be approved by the FRB, the Division or any other applicable regulator and will immediately upon receipt of any information concerning the events listed below notify the Agent: (i) when the Registration Statement, as amended, has become effective; (ii) when the Applications, as amended, have been approved by the FRB or the Division; (iii) of any comments from the Commission, the FRB, the Division or any other governmental entity with respect to the Conversion contemplated by this Agreement; (iv) of the request by the Commission, the FRB, the Division or any other governmental entity for any amendment or supplement to the Registration Statement, the Applications or for additional information; (v) of the issuance by the Commission, the FRB, the Division or any other governmental entity of any order or other action suspending the Conversion or the use of the Registration Statement or the Prospectus or any other filing of the Holding Company or the Bank under the BHCA, the Massachusetts Regulations or other applicable law, or the threat of any such action; (vi) of the issuance by the Commission, the FRB, the Division or any authority of any stop order suspending the effectiveness of the Registration Statement or of the initiation or threat of initiation or threat of any proceedings for that purpose; or (vii) of the occurrence of any event mentioned in paragraph (j) below. The Blue Hills Parties will make every reasonable effort (i) to prevent the issuance by the Commission, the FRB, the Division or any other federal or state authority of any such order and, (ii) if any such order shall at any time be issued, to obtain the lifting thereof at the earliest possible time. + +(g) The Blue Hills Parties will deliver to the Agent and to its counsel as many conformed copies of the Registration Statement or the Applications, as originally filed and of each amendment or supplement thereto, including all exhibits, as the Agent may reasonably request. + +(h) The Blue Hills Parties will furnish to the Agent, from time to time during the period when the Prospectus (or any later prospectus related to this offering) is required to be delivered under the 1933 Act or the 1934 Act, such number of copies of such Prospectus (as amended or supplemented) as the Agent may reasonably request for the purposes contemplated by the 1933 Act, the 1933 Act Regulations, the 1934 Act or the rules and regulations promulgated under the 1934 Act (the "1934 Act Regulations"). The Holding Company authorizes the Agent to use the Prospectus (as amended or supplemented, if amended or supplemented) in any lawful manner contemplated by the Plan in connection with the sale of the Shares by the Agent. + +(i) The Blue Hills Parties will comply with any and all terms, conditions, requirements and provisions with respect to the Offering imposed by the Commission, the Division or any other applicable regulator or the Massachusetts Regulations and by the 1933 Act, the 1933 Act Regulations, the 1934 Act and the 1934 Act Regulations to be complied with prior to or subsequent to the Closing Date and when the Prospectus is required to be delivered, and during such time period the Blue Hills Parties will comply, at their own expense, with all requirements imposed upon them by the Commission, the Division or any other applicable regulator or the Massachusetts Regulations, and by the 1933 Act, the 1933 Act Regulations, the 1934 Act and the 1934 Act Regulations, including, without limitation, Rule 10b-5 under the 1934 Act, in each case as from time to time in force, so far as necessary + +18 + + + + + +to permit the continuance of sales or dealing in the Shares during such period in accordance with the provisions hereof and the Prospectus. The Holding Company will comply with all undertakings contained in the Registration Statement. + +(j) If, at any time during the period when the Prospectus is required to be delivered, any event relating to or affecting any of the Blue Hills Parties shall occur, as a result of which it is necessary or appropriate, in the opinion of counsel for the Holding Company and in the reasonable opinion of the Agent's counsel, to amend or supplement the Registration Statement or Prospectus in order to make the Registration Statement or Prospectus not misleading in light of the circumstances existing at the time the Prospectus is delivered to a purchaser, the Holding Company will immediately so inform the Agent and prepare and file, at its own expense, with the Commission, the FRB and the Division or any other applicable regulator, and furnish to the Agent a reasonable number of copies, of an amendment or amendments of, or a supplement or supplements to, the Registration Statement or Prospectus (in form and substance reasonably satisfactory to the Agent and its counsel after a reasonable time for review) which will amend or supplement the Registration Statement or Prospectus so that as amended or supplemented it will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances existing at the time the Prospectus is delivered to a purchaser, not misleading. For the purpose of this Agreement, the Holding Company will timely furnish to the Agent such information with respect to the Blue Hills Parties as the Agent may from time to time reasonably request. + +(k) The Blue Hills Parties will take all necessary actions in cooperating with the Agent and furnish to whomever the Agent may direct such information as may be required to qualify or register the Shares for offering and sale by the Holding Company or to exempt such Shares from registration, or to exempt the Holding Company as a broker-dealer and its officers, directors and employees as broker-dealers or agents under the applicable securities or blue sky laws of such jurisdictions in which the Shares are required under the Massachusetts Regulations to be sold or as the Agent and the Holding Company may reasonably agree upon; provided, however, that the Holding Company shall not be obligated to file any general consent to service of process, to qualify to do business in any jurisdiction in which it is not so qualified, or to register its directors or officers as brokers, dealers, salesmen or agents in any jurisdiction. In each jurisdiction where any of the Shares shall have been qualified or registered as above provided, the Holding Company will make and file such statements and reports in each fiscal period as are or may be required by the laws of such jurisdiction. + +(l) The liquidation account for the benefit of Eligible Account Holders will be duly established and maintained in accordance with the requirements of the Plan, the Massachusetts Regulations, and such Eligible Account Holders who continue to maintain their savings accounts in the Bank will have an inchoate interest in their pro rata portion of the liquidation account, which shall have a priority superior to that of the holders of the Common Stock in the event of a complete liquidation of the Bank. + +(m) The Holding Company will not sell or issue, contract to sell or otherwise dispose of, for a period of 90 days after the Closing Date, without the Agent's prior written consent, any of its shares of common stock, other than the Shares or other than in connection with any plan or arrangement described in the Prospectus. + +(n) The Holding Company will register its common stock under Section 12(b) of the 1934 Act. The Holding Company shall maintain the effectiveness of such registration for not less than three years from the time of effectiveness or such shorter period as may be required by the Division or any other applicable regulator. + +19 + + + + + +(o) During the period during which the Shares are registered under the 1934 Act or for three years from the date hereof, whichever period is greater, the Holding Company will furnish to its shareholders as soon as practicable after the end of each fiscal year an annual report of the Holding Company (including a consolidated balance sheet and statements of consolidated income, shareholders' equity and cash flows of the Holding Company and its subsidiaries as at the end of and for such year, certified by independent registered public accountants in accordance with Regulation S-X under the 1933 Act and the 1934 Act) and make available as soon as practicable after the end of each of the first three quarters of each fiscal year (beginning with the first fiscal quarter ending after the effective time of the Registration Statement) financial information of the Holding Company and its subsidiaries for such quarter in reasonable detail. + +(p) During the period of three years from the date hereof, the Holding Company will furnish to the Agent: (i) as soon as practicable after such information is publicly available, a copy of each report of the Holding Company furnished to or filed with the Commission under the 1934 Act or any national securities exchange or system on which any class of securities of the Holding Company is listed or quoted (including, but not limited to, reports on Forms 10-K, 10-Q and 8-K and all proxy statements and annual reports to stockholders), provided that the filing of such documents through the Commission's EDGAR system shall be deemed to satisfy this obligation; (ii) a copy of each other non­confidential report of the Holding Company mailed to its shareholders or filed with the Commission, the FRB, the Division or any other supervisory or regulatory authority or any national securities exchange or system on which any class of securities of the Holding Company is listed or quoted, each press release and material news items and additional documents and information with respect to the Holding Company or the Bank as the Agent may reasonably request; and (iii) from time to time, such other nonconfidential information concerning the Holding Company or the Bank as the Agent may reasonably request. + +(q) The Holding Company and the Bank will use the net proceeds from the sale of the Shares in the manner set forth in the Prospectus under the caption "How We Intend to Use the Proceeds From the Offering." + +(r) The Holding Company will make generally available to its security holders as soon as practicable, but not later than 60 days after the close of the period covered thereby, an earnings statement (in form complying with the provisions of Rule 158 of the 1933 Act Regulations) covering a twelve­month period beginning not later than the first day of the Holding Company's fiscal quarter next following the effective date (as defined in such Rule 158) of the Registration Statement. + +(s) The Holding Company will use its best efforts to cooperate with the Agent to affect the trading of the Shares on the Nasdaq Global Market on or prior to the Closing Date. + +(t) The Holding Company will maintain appropriate arrangements for depositing all funds received from persons mailing or delivering subscriptions for or orders to purchase Shares in the Offering with the Bank, on an interest-bearing basis at the rate described in the Prospectus until the Closing Date and satisfaction of all conditions precedent to the release of Shares in the Offering in accordance with the Plan and as described in the Prospectus or until refunds of such funds have been made to the persons entitled thereto or withdrawal authorizations canceled in accordance with the Plan and as described in the Prospectus. The Holding Company will maintain such records of all funds received to permit the funds of each subscriber to be separately insured by the FDIC (to the maximum extent allowable) and to enable the Holding Company to make the appropriate refunds of such funds in the event that such refunds are required to be made in accordance with the Plan and as described in the Prospectus. + +20 + + + + + +(u) The Holding Company will report the use of proceeds of the Offering on its first periodic report filed pursuant to Sections 13(a) and 15(d) of the 1934 Act and on any subsequent periodic report as may be required pursuant to Rule 463 of the 1933 Act Regulations. + +(v) The Holding Company will promptly take all necessary action to register as a bank holding company under Section 3 of the BHCA. + +(w) The Holding Company and the Bank will take such actions and furnish such information as are reasonably requested by the Agent in order for the Agent to ensure compliance with FINRA Rule 5130. + +(x) None of the Blue Hills Parties will amend the Plan without the consent of the Agent, which consent shall not be unreasonably withheld. + +(y) The Holding Company shall assist the Agent, if necessary, in connection with the allocation of the Shares in the event of an oversubscription and shall provide the Agent with any information necessary to assist the Holding Company in allocating the Shares in such event and such information shall be accurate and reliable in all material respects. + +(z) Prior to the Closing Date, the Holding Company will inform the Agent of any event or circumstances of which it is aware as a result of which the Registration Statement and/or Prospectus, as then amended or supplemented, would contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein not misleading. + +(aa) The Holding Company will not deliver the Shares until the Blue Hills Parties have satisfied or caused to be satisfied each condition set forth in Section 8 hereof, unless such condition is waived in writing by the Agent. + +(bb) Subsequent to the date the Registration Statement is declared effective by the Commission and prior to the Closing Date, except as otherwise may be indicated or contemplated therein or set forth in an amendment or supplement thereto, none of the Blue Hills Parties will have: (i) issued any securities or incurred any liability or obligation, direct or contingent, for borrowed money, except borrowings from the same or similar sources indicated in the Prospectus in the ordinary course of its business, or (ii) entered into any transaction which is material in light of the business and properties of the Blue Hills Parties, taken as a whole. + +(cc) Until the Closing Date, the Blue Hills Parties will conduct their businesses in compliance in all material respects with all applicable federal and state laws, rules, regulations, decisions, directives and orders, including all decisions, directives and orders of the Commission, the FDIC, the FRB and the Division. + +(dd) The facts and representations provided to Luse Gorman and Nutter, McClennen & Fish, LLP ("Nutter") by the Blue Hills Parties and upon which each of Luse Gorman and Nutter will base their opinions under Sections 8(c) and (d), respectively, are and will be truthful, accurate and complete. + +(ee) The Blue Hills Parties will not distribute any offering material in connection with the Offering except for the Prospectus and any supplemental sales material that has been filed with the Registration Statement and the Applications and authorized for use by the Commission, the FRB and the Division or any other applicable regulator. The information contained in any supplemental sales material (in addition to the supplemental sales material filed as an exhibit to the Registration Statement and the Applications) shall not conflict with the information contained in the Registration Statement and the Prospectus. + +21 + + + + + +(ff) The Holding Company will comply with all applicable provisions of the Sarbanes-Oxley Act of 2002 and the Dodd-Frank Wall Street Reform and Consumer Protection Act and all applicable rules, regulations, guidelines and interpretations promulgated thereunder by the Commission. + +(gg) The Blue Hills Parties will not, prior to the Closing Time, incur any liability or obligation, direct or contingent, or enter into any material transaction, other than in the ordinary course of business consistent with past practice, except as contemplated by the Prospectus. + +(hh) The Blue Hills Parties will use all reasonable efforts to comply with, or cause to be complied with, the conditions precedent to the several obligations of the Agent specified in Section 8. + +Section 7. Payment of Expenses. Whether or not the Conversion is completed or the sale of the Shares by the Holding Company is consummated, the Blue Hills Parties jointly and severally agree to pay or reimburse the Agent for: (a) all filing fees in connection with all filings related to the Conversion with the FINRA; (b) any stock issue or transfer taxes which may be payable with respect to the sale of the Shares; (c) subject to Section 2(f), all expenses of the Conversion, including but not limited to the Agent's attorneys' fees and expenses, blue sky fees, transfer agent, registrar and other agent charges, fees relating to auditing and accounting or other advisors and costs of printing all documents necessary in connection with the Offering. In the event the Holding Company is unable to sell the minimum number of shares necessary to complete the Conversion or the Conversion is terminated or otherwise abandoned, the Blue Hills Parties shall promptly reimburse the Agent in accordance with Section 2(f) hereof. + +Section 8. Conditions to the Agent's Obligations. The obligations of the Agent hereunder, as to the Shares to be delivered at the Closing Date, are subject, to the extent not waived in writing by the Agent, to the condition that all representations and warranties of the Blue Hills Parties herein are, at and as of the commencement of the Offering and at and as of the Closing Date, true and correct in all material respects, the condition that the Blue Hills Parties shall have performed all of its obligations hereunder to be performed on or before such dates, and to the following further conditions: + +(a) At the Closing Date, the Blue Hills Parties shall have conducted the Conversion in all material respects in accordance with the Plan, the BHCA, the Massachusetts Regulations (except to the extent waived or otherwise approved by the FRB, the Division and any other applicable regulator), and all other applicable laws, regulations, decisions and orders, including all terms, conditions, requirements and provisions precedent to the Conversion imposed upon them by the FRB, the Division or any other applicable regulator. + +(b) The Registration Statement shall have been declared effective by the Commission and the Applications shall have been approved by the FRB and the Division not later than 5:30 p.m. on the date of this Agreement, or with the Agent's consent at a later time and date; and at the Closing Date, no stop order suspending the effectiveness of the Registration Statement shall have been issued under the 1933 Act or proceedings therefore initiated or, to the knowledge of the Blue Hills Parties, threatened by the Commission or any state authority, and no order or other action suspending the authorization of the Prospectus or the consummation of the Conversion shall have been issued or proceedings therefore initiated or, to the Blue Hills Parties' knowledge, threatened by the Commission, the FRB, the Division, or any other regulatory authority. + +22 + + + + + +(c) At the Closing Date, the Agent shall have received the favorable opinion, dated as of the Closing Date and addressed to the Agent and for its benefit, of Luse Gorman, special counsel for the Blue Hills Parties, in form and substance as attached hereto as Exhibit C. + +(d) At the Closing Date, the Agent shall have received the favorable opinion, dated as of the Closing Date and addressed to the Agent and for its benefit, of Nutter, special counsel for the Agent, in form and substance as attached hereto as Exhibit D. + +(e) Prior to the mailing of the Prospectus, a blue sky memorandum from Luse Gorman relating to the Offering, including Agent's participation therein, shall have been furnished to the Holding Company with a copy thereof addressed to Agent or upon which Luse Gorman shall state the Agent may rely. The blue sky memorandum will relate to the necessity of obtaining or confirming exemptions, qualifications or the registration of the Shares under applicable state securities law. + +(f) At the Closing Date, the Agent shall receive a certificate of the Chief Executive Officer and the Chief Financial Officer of each of the Blue Hills Parties in form and substance reasonably satisfactory to the Agent's Counsel, dated as of such Closing Date, to the effect that: (i) they have carefully examined the Prospectus and, in their opinion, at the time the Prospectus became authorized for final use, the Prospectus did not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; (ii) since the date the Prospectus became authorized for final use, no event has occurred which should have been set forth in an amendment or supplement to the Prospectus which has not been so set forth, including specifically, but without limitation, any material adverse change in the condition, financial or otherwise, or in the earnings, capital, properties or business of the Blue Hills Parties and the conditions set forth in this Section 8 have been satisfied; (iii) since the respective dates as of which information is given in the Registration Statement, the General Disclosure Package and the Prospectus, there has been no material adverse change in the condition, financial or otherwise, or in the earnings, capital, properties or business of the Blue Hills Parties independently, or of the Blue Hills Parties considered as one enterprise, whether or not arising in the ordinary course of business; (iv) the representations and warranties in Section 4 are true and correct with the same force and effect as though expressly made at and as of the Closing Date; (v) the Blue Hills Parties complied in all material respects with all agreements and satisfied all conditions on their part to be performed or satisfied at or prior to the Closing Date and will comply in all material respects with all obligations to be satisfied by them after the Closing Date; (vi) no stop order suspending the effectiveness of the Registration Statement has been initiated or, to the knowledge of the Blue Hills Parties, threatened by the Commission or any state authority; (vii) no order suspending the Conversion, the Offering or the use of the Prospectus has been issued and no proceedings for that purpose are pending or, to the knowledge of the Blue Hills Parties, threatened by the FRB, the Division, or any other regulatory authority; and (viii) to the best knowledge of the Blue Hills Parties, no person has sought to obtain review of the final action of the FRB, the Division or any other applicable regulator approving the Conversion. + +(g) None of the Blue Hills Parties shall have sustained, since the date of the latest financial statements included in the Registration Statement, the General Disclosure Package and Prospectus, any material loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth in the Registration Statement and the Prospectus, and since the respective dates as of which information is given in the Registration Statement and the Prospectus, there shall not have been any Material Adverse Effect that is in the Agent's reasonable judgment sufficiently material and adverse as to make it impracticable or inadvisable to proceed with the Offering or the delivery of the Shares on the terms and in the manner contemplated in the Prospectus. + +23 + + + + + +(h) Prior to and at the Closing Date: (i) in the reasonable opinion of the Agent, there shall have been no material adverse change in the financial condition, results of operations or business of the Blue Hills Parties considered as one enterprise, from that as of the latest dates as of which such condition is set forth in the Prospectus, other than transactions referred to or contemplated therein; (ii) none of the Blue Hills Parties shall have received from the FRB, the Division or the FDIC any direction (oral or written) to make any material change in the method of conducting their business with which it has not complied (which direction, if any, shall have been disclosed to the Agent) or which materially and adversely would affect the financial condition, results of operations or business of the Blue Hills Parties taken as a whole; (iii) none of the Blue Hills Parties shall have been in default (nor shall an event have occurred which, with notice or lapse of time or both, would constitute a default) under any provision of any agreement or instrument relating to any outstanding indebtedness; (iv) no action, suit or proceeding, at law or in equity or before or by any federal or state commission, board or other administrative agency, not disclosed in the Prospectus, shall be pending or, to the knowledge of the Blue Hills Parties, threatened against the any of the Blue Hills Parties or affecting any of their properties wherein an unfavorable decision, ruling or finding would materially and adversely affect the financial condition, results of operations or business of the Blue Hills Parties taken as a whole; and (v) the Shares shall have been qualified or registered for offering and sale or exempted therefrom under the securities or blue sky laws of the jurisdictions as the Agent shall have reasonably requested and as agreed to by the Blue Hills Parties. + +(i) Concurrently with the execution of this Agreement, the Agent shall receive a letter from Wolf & Co., P.C., dated as of the date hereof and addressed to the Agent: (i) confirming that Wolf & Co., P.C. is a firm of independent registered public accountants within the applicable rules of the Public Company Accounting Oversight Board (United States) and stating in effect that in its opinion the consolidated financial statements and related notes of the MHC as of December 31, 2013 and 2012, and covered by their opinion included in the Prospectus, and any other more recent unaudited financial statements included in the Prospectus, comply as to form in all material respects with the applicable accounting requirements and related published rules and regulations of the FRB and any other applicable regulator and the 1933 Act; (ii) stating in effect that, on the basis of certain agreed upon procedures (but not an audit in accordance with standards of the Public Company Accounting Oversight Board (United States)) consisting of a reading of the latest available consolidated financial statements of the MHC prepared by the MHC, a reading of the minutes of the meetings of the Boards of Directors of each of the Blue Hills Parties and consultations with officers of the MHC responsible for financial and accounting matters, nothing came to their attention which caused them to believe that: (A) the audited consolidated financial statements and any unaudited interim financial statements included in the Prospectus are not in conformity with the 1933 Act, applicable accounting requirements of the FRB, the Division and the FDIC and GAAP applied on a basis substantially consistent with that of the audited consolidated financial statements included in the Prospectus; or (B) during the period from the date of the latest consolidated financial statements included in the Prospectus to a specified date not more than three business days prior to the date of the Prospectus, except as has been described in the Prospectus, there was any increase in long-term debt of the MHC, other than normal deposit fluctuations for the Bank; or (C) there was any decrease in the total consolidated assets, total loans, the allowance for loan losses, total deposits or total equity of the MHC at the date of such letter as compared with amounts shown in the latest balance sheet included in the Prospectus, except as has been described in the Prospectus; and (iii) stating that, in addition to the audit referred to in their opinion included in the Prospectus and the performance of the procedures referred to in clause (ii) of this subsection (i), they have compared with the general accounting records of the MHC, which are subject to the internal controls of the MHC, the accounting system and other data prepared by the MHC, directly from such accounting records, to the extent specified in such letter, such amounts and/or percentages set forth in the Prospectus as the Agent may reasonably request; and they have found such amounts and percentages to be in agreement therewith (subject to rounding). + +24 + + + + + +(j) At the Closing Date, the Agent shall receive a letter dated the Closing Date, addressed to the Agent, confirming the statements made by Wolf & Co., P.C. in the letter delivered by it pursuant to subsection (i) of this Section 8, the "specified date" referred to in clause (ii) of subsection (i) to be a date specified in the letter required by this subsection (j) which for purposes of such letter shall not be more than three business days prior to the Closing Date. + +(k) At the Closing Date, the Holding Company shall receive a letter from RP Financial LC., dated the Closing Date (i) confirming that said firm is independent of the Blue Hills Parties and is experienced and expert in the area of corporate appraisals within the meaning of the Massachusetts Conversion Regulations, (ii) stating in effect that the Appraisal prepared by such firm complies in all material respects with 209 CMR 33.08(3)(a), and (iii) further stating that its opinion of the aggregate pro forma market value of the Holding Company including the Bank, as most recently updated, remains in effect. + +(l) At or prior to the Closing Date, the Agent shall receive: (i) a copy of the letter from the FRB approving the Holding Company Application; (ii) a copy of a letter from the Division approving the Massachusetts Conversion Application; (iii) confirmation that the Commission declared the Registration Statement effective; (iv) certificates from the Secretary of State of the Commonwealth of Massachusetts evidencing the valid existence and good standing of the MHC and the Mid-Tier; (v) a certificate from the Division evidencing the good standing of the Bank; (vi) a certificate from the FDIC evidencing the Bank's insurance of accounts; (vii) a certificate from the FHLBB evidencing the Bank's membership therein; (viii) a certificate from the Maryland Department of Assessments & Taxation evidencing the good standing of the Holding Company and (ix) such other documents and certificates as the Agent may reasonably request. + +(m) Subsequent to the date hereof, there shall not have occurred any of the following; (i) a suspension or limitation in trading in securities generally on the New York Stock Exchange (the "NYSE") or in the over­the­counter market, or quotations halted generally on the Nasdaq Stock Market, or minimum or maximum prices for trading have been fixed, or maximum ranges for prices for securities have been required by either of such exchanges or the Nasdaq Stock Market or by order of the Commission or any other governmental authority; (ii) a general moratorium on the operations of federal or state chartered depository institutions or a general moratorium on the withdrawal of deposits from federal or state chartered depository institutions declared by federal or state authorities; (iii) the engagement by the United States in hostilities which have resulted in the declaration, on or after the date hereof, of a national emergency or war or a material decline in the price of equity or debt securities, if the effect of such declaration or decline, in the Agent's reasonable judgment, makes it impracticable or inadvisable to proceed with the Offering or the delivery of the Shares on the terms and in the manner contemplated in the Registration Statement and the Prospectus. + +(n) At or prior to the Closing Date, counsel to the Agent shall have been furnished with such documents and opinions as they may reasonably require for the purpose of enabling them to pass upon the sale of the Shares as herein contemplated and related proceedings or in order to evidence the occurrence or completeness of any of the representations or warranties, or the fulfillment of any of the conditions, herein contained; and all proceedings taken by the Blue Hills Parties in connection with the sale of the Shares as herein contemplated shall be satisfactory in form and substance to the Agent or its counsel. + +(o) All such opinions, certificates, letters and documents will be in compliance with the provisions hereof only if they are reasonably satisfactory in form and substance to the Agent or to counsel for the Agent. Any certificate signed by an officer of any of the Blue Hills Parties and delivered to the Agent or to counsel for the Agent shall be deemed a representation and warranty by such Blue Hills Party to the Agent as to the statements made therein. + +25 + + + + + +Section 9. Indemnification. + +(a) Each of the Blue Hills Parties jointly and severally agrees to indemnify and hold harmless the Agent, its officers and directors, employees and agents, and each person, if any, who controls the Agent within the meaning of Section 15 of the 1933 Act or Section 20(a) of the 1934 Act, against any and all loss, liability, claim, damage or expense whatsoever (including, but not limited to, settlement expenses), joint or several, that the Agent or any of them may suffer or to which the Agent and any such persons may become subject under all applicable federal or state laws or otherwise, and to promptly reimburse the Agent and any such persons upon written demand for any reasonable expense (including all reasonable fees and disbursements of counsel) incurred by the Agent or any of them in connection with investigating, preparing or defending any actions, proceedings or claims (whether commenced or threatened) to the extent such losses, claims, damages, liabilities or actions: (i) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment or supplement thereto), the General Disclosure Package, any Issuer-Represented Limited-Use Free Writing Prospectus, any Issuer-Represented General Free Writing Prospectus, preliminary or final Prospectus (or any amendment or supplement thereto), the Applications (or any amendment or supplement thereto), or any instrument or document executed by the Blue Hills Parties or based upon written information supplied by the Holding Company filed in any state or jurisdiction to register or qualify any or all of the Shares or to claim an exemption therefrom or provided to any state or jurisdiction to exempt the Blue Hills Parties as a broker-dealer or its officers, directors and employees as broker-dealers or agents, under the securities laws thereof (collectively, the "Blue Sky Application"), or any document, advertisement, oral statement or communication ("Sales Information") prepared, made or executed by or on behalf of the Blue Hills Parties with its consent and based upon written or oral information furnished by or on behalf of the Blue Hills Parties, whether or not filed in any jurisdiction, in order to qualify or register the Shares or to claim an exemption therefrom under the securities laws thereof; (ii) arise out of or are based upon the omission or alleged omission to state in any of the foregoing documents or information a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; or (iii) arise from any theory of liability whatsoever relating to or arising from or based upon the Registration Statement (or any amendment or supplement thereto), preliminary or final Prospectus (or any amendment or supplement thereto), the General Disclosure Package, any Issuer­Represented Limited­Use Free Writing Prospectus, any Issuer-Represented General Free Writing Prospectus, the Applications (or any amendment or supplement thereto), any Blue Sky Application or Sales Information or other documentation distributed in connection with the Conversion; provided, however, that no indemnification is required under this paragraph (a) to the extent such losses, claims, damages, liabilities or actions arise out of or are based upon any untrue material statement or alleged untrue material statement in, or material omission or alleged material omission from, the Registration Statement (or any amendment or supplement thereto), preliminary or final Prospectus (or any amendment or supplement thereto), the General Disclosure Package, any Issuer-Represented Limited-Use Free Writing Prospectus, any Issuer-Represented General Free Writing Prospectus, the Applications, any Blue Sky Application or Sales Information made in reliance upon and in conformity with information furnished in writing to the Holding Company, by the Agent or its counsel regarding the Agent, and provided, that it is agreed and understood that the only information furnished in writing to the Holding Company, by the Agent regarding the Agent is set forth in the Prospectus in the first sentence of the second paragraph under the caption "The Conversion; Plan of Distribution—Marketing and Distribution; Compensation"; and, provided further, that such indemnification shall be limited to the extent prohibited by the Commission, the FDIC, the Division and the FRB. + +26 + + + + + +(b) The Agent agrees to indemnify and hold harmless the Blue Hills Parties, their directors and officers and each person, if any, who controls the Holding Company or the Bank within the meaning of Section 15 of the 1933 Act or Section 20(a) of the 1934 Act against any and all loss, liability, claim, damage or expense whatsoever (including but not limited to settlement expenses), joint or several, which they, or any of them, may suffer or to which they, or any of them may become subject under all applicable federal and state laws or otherwise, and to promptly reimburse the Blue Hills Parties, and any such persons upon written demand for any expenses (including reasonable fees and disbursements of counsel) incurred by them, or any of them, in connection with investigating, preparing or defending any actions, proceedings or claims (whether commenced or threatened) to the extent such losses, claims, damages, liabilities or actions: (i) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment or supplement thereto), the Applications (or any amendment or supplement thereto), the preliminary or final Prospectus (or any amendment or supplement thereto), any Blue Sky Application or Sales Information, (ii) are based upon the omission or alleged omission to state in any of the foregoing documents a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, or (iii) arise from any theory of liability whatsoever relating to or arising from or based upon the Registration Statement (or any amendment or supplement thereto), preliminary or final Prospectus (or any amendment or supplement thereto), the Applications (or any amendment or supplement thereto), or any Blue Sky Application or Sales Information or other documentation distributed in connection with the Offering; provided, however, that the Agent's obligations under this Section 9(b) shall exist only if and only to the extent that such untrue statement or alleged untrue statement was made in, or such material fact or alleged material fact was omitted from, the Registration Statement (or any amendment or supplement thereto), the preliminary or final Prospectus (or any amendment or supplement thereto), the Applications (or any amendment or supplement thereto), any Blue Sky Application or Sales Information in reliance upon and in conformity with information furnished in writing to the Holding Company or the Bank, by the Agent or its counsel regarding the Agent, and provided, that it is agreed and understood that the only information furnished in writing to the Holding Company or the Bank, by the Agent regarding the Agent is set forth in the Prospectus in the first sentence of the second paragraph under the caption "The Conversion; Plan of Distribution­Marketing and Distribution; Compensation." + +(c) Each indemnified party shall give prompt written notice to each indemnifying party of any action, proceeding, claim (whether commenced or threatened), or suit instituted against it in respect of which indemnity may be sought hereunder, but failure to so notify an indemnifying party shall not relieve it from any liability which it may have on account of this Section 9 or otherwise. An indemnifying party may participate at its own expense in the defense of such action. In addition, if it so elects within a reasonable time after receipt of such notice, an indemnifying party, jointly with any other indemnifying parties receiving such notice, may assume defense of such action with counsel chosen by it and approved by the indemnified parties that are defendants in such action, unless such indemnified parties reasonably object to such assumption on the ground that there may be legal defenses available to them that are different from or in addition to those available to such indemnifying party. If an indemnifying party assumes the defense of such action, the indemnifying parties shall not be liable for any fees and expenses of counsel for the indemnified parties incurred thereafter in connection with such action, proceeding or claim, other than reasonable costs of investigation. In no event shall the indemnifying parties be liable for the fees and expenses of more than one separate firm of attorneys (and any local counsel that said firm may retain) for each indemnified party in connection with any one action, proceeding or claim or separate but similar or related actions, proceedings or claims in the same jurisdiction arising out of the same general allegations or circumstances. + +Section 10. Contribution. In order to provide for just and equitable contribution in circumstances in which the indemnification provided for in Section 9 is due in accordance with its terms + +27 + + + + + +but is for any reason held by a court to be unavailable from the Blue Hills Parties or the Agent, the Blue Hills Parties and the Agent shall contribute to the aggregate losses, claims, damages and liabilities (including any investigation, legal and other expenses incurred in connection with, and any amount paid in settlement of, any action, suit or proceeding, but after deducting any contribution received by the Blue Hills Parties or the Agent from persons other than the other parties thereto, who may also be liable for contribution) in such proportion so that the Agent is responsible for that portion represented by the percentage that the fees paid to the Agent pursuant to Section 2 of this Agreement (not including expenses) bears to the gross proceeds received by the Holding Company from the sale of the Shares in the Offering, and the Blue Hills Parties shall be responsible for the balance. If, however, the allocation provided above is not permitted by applicable law, then each indemnifying party shall contribute to such amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative fault of the Blue Hills Parties on the one hand and the Agent on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions, proceedings or claims in respect thereto), but also the relative benefits received by the Blue Hills Parties on the one hand and the Agent on the other from the Offering (before deducting expenses). The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Blue Hills Parties on the one hand or the Agent on the other and the parties' relative intent, good faith, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Blue Hills Parties and the Agent agree that it would not be just and equitable if contribution pursuant to this Section 10 were determined by pro-rata allocation or by any other method of allocation which does not take into account the equitable considerations referred to above in this Section 10. The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions, proceedings or claims in respect thereof) referred to above in this Section 10 shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action, proceeding or claim. It is expressly agreed that the Agent shall not be liable for any loss, liability, claim, damage or expense or be required to contribute any amount pursuant to Section 9(b) or this Section 10 which in the aggregate exceeds the amount paid (excluding reimbursable expenses) to the Agent under this Agreement. It is understood that the above stated limitation on the Agent's liability is essential to the Agent and that the Agent would not have entered into this Agreement if such limitation had not been agreed to by the parties to this Agreement. No person found guilty of any fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not found guilty of such fraudulent misrepresentation. The obligations of the Blue Hills Parties under this Section 10 and under Section 9 shall be in addition to any liability which the Holding Company and the Agent may otherwise have. For purposes of this Section 10, each of the Agent's and the Blue Hills Parties' officers and directors and each person, if any, who controls the Agent or any of the Blue Hills Parties within the meaning of the 1933 Act and the 1934 Act shall have the same rights to contribution as the Agent on the one hand, or, the Blue Hills Parties on the other hand. Any party entitled to contribution, promptly after receipt of notice of commencement of any action, suit, claim or proceeding against such party in respect of which a claim for contribution may be made against another party under this Section 10, will notify such party from whom contribution may be sought, but the omission to so notify such party shall not relieve the party from whom contribution may be sought from any other obligation it may have hereunder or otherwise than under this Section 10 unless and to the extent the party has been materially prejudiced through the forfeiture by the other party of substantial rights and defenses. + +Section 11. Termination. The Agent may terminate this Agreement by giving the notice indicated below in Section 12 at any time after this Agreement becomes effective as follows: + +(a) If any domestic or international event or act or occurrence has materially disrupted the United States securities markets such as to make it, in the Agent's reasonable opinion, + +28 + + + + + +impracticable to proceed with the offering of the Shares; or if trading on the NYSE shall have suspended (except that this shall not apply to the imposition of NYSE trading collars imposed on program trading); or if the United States shall have become involved in a war or major hostilities or escalation thereof; or if a general banking moratorium has been declared by a state or federal authority which has a material effect on the Blue Hills Parties on a consolidated basis; or if a moratorium in foreign exchange trading by major international banks or persons has been declared; or if there shall have been a material adverse change in the financial condition, results of operations or business of any of the Blue Hills Parties, or if any of the Blue Hills Parties shall have sustained a material or substantial loss by fire, flood, accident, hurricane, earthquake, theft, sabotage or other calamity or malicious act, whether or not said loss shall have been insured; or, if there shall have been a material adverse change in the financial condition, results of operations or business of the Blue Hills Parties taken as a whole. + +(b) In the event the Holding Company fails to sell the required minimum number of the Shares by the date when such sales must be completed, in accordance with the provisions of the Plan or as required by the Massachusetts Regulations and applicable law, this Agreement shall terminate upon refund by the Holding Company to each person who has subscribed for or ordered any of the Shares the full amount which it may have received from such person, together with interest as provided in the Prospectus, and no party to this Agreement shall have any obligation to the other hereunder, except as set forth in Sections 2(a), 2(e), 7, 9 and 10 hereof. + +(c) If any of the conditions specified in Section 8 shall not have been fulfilled when and as required by this Agreement, unless waived in writing, or by the Closing Date, this Agreement and all of the Agent's obligations hereunder may be cancelled by the Agent by notifying the Holding Company of such cancellation in writing or by electronic mail at any time at or prior to the Closing Date, and any such cancellation shall be without liability of any party to any other party except as otherwise provided in Sections 2(a), 2(e), 7, 9 and 10 hereof. + +(d) If the Agent elects to terminate this Agreement as provided in this Section, the Blue Hills Parties shall be notified promptly by telephone or electronic mail, confirmed by letter. + +Any of the Blue Hills Parties may terminate this Agreement in the event the Agent is in material breach of the representations and warranties or covenants contained in Sections 5 or 6(c) and such breach has not been cured within a reasonable time period after the Blue Hills Party has provided the Agent with notice of such breach. + +This Agreement may also be terminated by mutual written consent of the parties hereto. + +Section 12. Notices. All communications hereunder, except as herein otherwise specifically provided, shall be mailed in writing and if sent to the Agent shall be mailed, delivered or telegraphed and confirmed to Keefe, Bruyette & Woods, Inc., 10 South Wacker Drive, Investment Banking Suite 3400, Chicago, Illinois 60606, Attention: Pat McJoynt (with a copy to Nutter, McClennen & Fish LLP, Attention: Michael Krebs) and, if sent to the Blue Hills Parties, shall be mailed, delivered or telegraphed and confirmed to the Bank at Blue Hills Bank, 320 Norwood Park South, Norwood, MA 02062, Attention: William Parent (with a copy to Luse Gorman Pomerenk & Schick, P.C., Attention: Larry Spaccasi). + +Section 13. Parties. The Blue Hills Parties shall be entitled to act and rely on any request, notice, consent, waiver or agreement purportedly given on behalf of the Agent when the same shall have been given by the undersigned. The Agent shall be entitled to act and rely on any request, notice, consent, waiver or agreement purportedly given on behalf of the Blue Hills Parties, when the same shall have been given by the undersigned or any other officer of any of the Blue Hills Parties. This Agreement + +29 + + + + + +shall inure solely to the benefit of, and shall be binding upon, the Agent, the Blue Hills Parties and their respective successors and assigns, and no other person shall have or be construed to have any legal or equitable right, remedy or claim under or in respect of or by virtue of this Agreement or any provision herein contained. + +Section 14. Closing. The closing for the sale of the Shares (the "Closing") shall take place on the Closing Date at such location as mutually agreed upon by the Agent and the Holding Company and the Bank. At the Closing, the Blue Hills Parties shall deliver to the Agent in next day funds the commissions, fees and expenses due and owing to the Agent as set forth in Sections 2 and 7 hereof and the opinions and certificates required hereby and other documents deemed reasonably necessary by the Agent shall be executed and delivered to effect the sale of the Shares as contemplated hereby and pursuant to the terms of the Prospectus. + +Section 15. Partial Invalidity. In the event that any term, provision or covenant herein or the application thereof to any circumstance or situation shall be invalid or unenforceable, in whole or in part, the remainder hereof and the application of said term, provision or covenant to any other circumstances or situation shall not be affected thereby, and each term, provision or covenant herein shall be valid and enforceable to the full extent permitted by law. + +Section 16. Governing Law and Construction. This Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard to principles of conflicts of law. + +Section 17. Counterparts; Facsimile Delivery. This Agreement may be executed in separate counterparts and by facsimile or electronic signatures, each of which so executed and delivered shall be an original, but all of which together shall constitute but one and the same instrument. The exchange of copies of this Agreement and of signature pages by facsimile transmission or in pdf format shall constitute effective execution and delivery of this Agreement as to the parties and may be used in lieu of the original Agreement for all purposes. Signatures of the parties transmitted by facsimile or in pdf format shall be deemed to be their original signatures for all purposes. + +Section 18. Entire Agreement. This Agreement, including schedules and exhibits hereto, which are integral parts hereof and incorporated as though set forth in full, constitutes the entire agreement between the parties pertaining to the subject matter hereof superseding any and all prior or contemporaneous oral or prior written agreements, proposals, letters of intent and understandings, and cannot be modified, changed, waived or terminated except by a writing which expressly states that it is an amendment, modification or waiver, refers to this Agreement and is signed by the party to be charged. No course of conduct or dealing shall be construed to modify, amend or otherwise affect any of the provisions hereof. + +Section 19. Survival. The respective indemnities, agreements, representations, warranties and other statements of the Blue Hills Parties and the Agent, as set forth in this Agreement, shall remain in full force and effect, regardless of any termination or cancellation of this Agreement or any investigation (or any statement as to the results thereof) made by or on behalf of the Agent or any of the Agent's officers or directors or any person controlling the Agent, or the Blue Hills Parties, or any of their respective officers or directors or any person controlling the Blue Hills Parties, and shall survive termination of this Agreement and receipt or delivery of any payment for the Shares. + +Section 20. Waiver of Trial by Jury. Each of the Agent and the Blue Hills Parties waives all right to trial by jury in any action, proceeding, claim or counterclaim (whether based on contract, tort or otherwise) related to or arising out of this Agreement. + +30 + + + + + +This agreement is made solely for the benefit of and will be binding upon the parties hereto and their respective successors and the directors, officer and controlling persons and no other person will have any right or obligation hereunder. + +[Remainder of page intentionally blank] + +31 + + + + + +If the foregoing correctly sets forth the arrangement among the Blue Hills Parties and the Agent, please indicate acceptance thereof in the space provided below for that purpose, whereupon this letter and the Agent's acceptance shall constitute a binding agreement. + +Very truly yours, + + Blue Hills Bank Blue Hills Bancorp, Inc. + +By Its Authorized Representative: By Its Authorized Representative: + +/s/ William M. Parent /s/ William M. Parent William M. Parent William M. Parent President and Chief Executive Officer President and Chief Executive Officer + +Hyde Park Bancorp, MHC Hyde Park Bancorp, Inc. + +By Its Authorized Representative: By Its Authorized Representative: + +/s/ William M. Parent /s/ William M. Parent William M. Parent William M. Parent President and Chief Executive Officer President and Chief Executive Officer + +Accepted as of the date first above written + + KEEFE, BRUYETTE & WOODS, INC. + +By its Authorized Representative + +/s/ Pat McJoynt Pat McJoynt Managing Director \ No newline at end of file diff --git a/full_contract_txt/BLUEROCKRESIDENTIALGROWTHREIT,INC_06_01_2016-EX-1.1-AGENCY AGREEMENT.txt b/full_contract_txt/BLUEROCKRESIDENTIALGROWTHREIT,INC_06_01_2016-EX-1.1-AGENCY AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..8e7fe408099a091d03e642691e608e71b60839c3 --- /dev/null +++ b/full_contract_txt/BLUEROCKRESIDENTIALGROWTHREIT,INC_06_01_2016-EX-1.1-AGENCY AGREEMENT.txt @@ -0,0 +1,461 @@ +Exhibit 1.1 400,000 Shares BLUEROCK RESIDENTIAL GROWTH REIT, INC. 8.250% Series A Cumulative Redeemable Preferred Stock AGENCY AGREEMENT May 25, 2016 Compass Point Research & Trading, LLC 1055 Thomas Jefferson Street N.W. Suite 303 Washington, DC 20007 As Sales Agent Dear Ladies and Gentlemen: Bluerock Residential Growth REIT, Inc., a Maryland corporation (the "Company"), together with Bluerock Residential Holdings, L.P., a Delaware limited partnership for which the Company is the sole general partner (the "Operating Partnership" and together with the Company, the "Transaction Entities") and BRG Manager, LLC, a Delaware limited liability company (the "Manager"), agrees that it may issue and sell through Compass Point Research & Trading, LLC, acting as agent (the "Agent"), up to a total of 400,000 shares (the "Offered Shares") of its 8.250% Series A Cumulative Redeemable Preferred Stock, par value $0.01 per share (the "Series A Preferred Stock") as set forth below. Notwithstanding anything to the contrary contained herein, the parties hereto agree that compliance with the limitation set forth in this paragraph on the number of Offered Shares issued and sold under this Agreement shall be the sole responsibility of the Company, and the Agent shall have no obligation in connection with such compliance. Pursuant to the Second Amended and Restated Agreement of Limited Partnership of the Operating Partnership (the "OP Agreement"), as amended by that First Amendment to the Second Amended and Restated Agreement of Limited Partnership of the Operating Partnership, as further amended by that Second Amendment to the Second Amended and Restated Agreement of Limited Partnership of the Operating Partnership, as further amended by that Third Amendment to the Second Amended and Restated Agreement of Limited Partnership of the Operating Partnership and as further amended by the Fourth Amendment to the Second Amended and Restated Agreement of Limited Partnership of the Operating Partnership, upon receipt of the net proceeds of the sale of the Offered Shares on the Settlement Date (as defined below), the Company, through its wholly-owned subsidiary, Bluerock REIT Holdings, LLC, a Delaware limited liability company ("Holdings LLC"), will contribute such net proceeds to the Operating Partnership in exchange for a number of 8.250% Series A Cumulative Redeemable Preferred Units of partnership interest in the Operating Partnership (the "Series A Preferred OP Units") that is equivalent to the number of Offered Shares to be sold (the "Company Preferred OP Units"). + + + + + + + + + + 1. Representations and Warranties of the Transaction Entities. (a) Representations and Warranties. The Transaction Entities, jointly and severally, represent and warrant to, and agree with, the Agent that: (i) Filing and Effectiveness of Registration Statement; Certain Defined Terms. The Company has filed with the Commission a registration statement on Form S-3 (No. 333-208956) covering the registration of the Offered Shares under the Act, including a base prospectus (the "Base Prospectus"). Such registration statement, as amended, including the financial statements, exhibits and schedules thereto, in the form in which it became effective under the Act, including all documents incorporated or deemed to be incorporated by reference therein and any information deemed to be a part thereof at the time of effectiveness pursuant to Rule 430B under the Act, shall be referred to as the "Registration Statement." Any registration statement filed by the Company pursuant to Rule 462(b) under the Act in connection with the offer and sale of the Offered Shares is called the "Rule 462(b) Registration Statement," and from and after the date and time of filing of any such Rule 462(b) Registration Statement the term "Registration Statement" shall include the Rule 462(b) Registration Statement. As used herein, the term "Prospectus" shall mean the final prospectus supplement to the Base Prospectus dated the date hereof that describes the Offered Shares and the offering thereof (the "Final Prospectus Supplement"), together with the Base Prospectus, in the form first used by the Agent to meet requests of purchasers pursuant to Rule 173 under the Act. References herein to the Prospectus shall refer to both the prospectus supplement and the Base Prospectus components of such prospectus, including all documents incorporated or deemed to be incorporated by reference therein. The Registration Statement has been declared effective under the Act. The Offered Shares all have been duly registered under the Act pursuant to the Registration Statement. The Company has complied, to the Commission's satisfaction, with all requests of the Commission for additional or supplemental information, if any. No stop order suspending the effectiveness of or use of the Registration Statement has been issued under the Act, and no order preventing or suspending the use of the Prospectus has been issued and no proceedings for any such purposes have been instituted and are pending or, to the knowledge of the Company, are contemplated by the Commission, and any request on the part of the Commission for additional information from the Company in connection with the Registration Statement has been complied with. The Company meets the requirements for use of Form S-3 under the Act. The documents incorporated or deemed to be incorporated by reference in the Registration Statement, the General Disclosure Package (as defined below) and the Prospectus, at the time they were or hereafter are filed with the Commission, or became effective under the Exchange Act, as the case may be, complied and will comply (as applicable) in all material respects with the requirements of the Exchange Act. + + 2 + + + + + + + + For purposes of this Agreement: "430B Information," with respect to any registration statement, means information included in a prospectus and retroactively deemed to be a part of such registration statement pursuant to Rule 430B(b). "Act" means the Securities Act of 1933, as amended. "Applicable Time" means of the time of the sale of the Offered Shares pursuant to this Agreement. "Settlement Date" has the meaning defined in Section 3 hereof. "Commission" means the Securities and Exchange Commission. "Effective Time" with respect to the Registration Statement, means the date and time as of which such Registration Statement was declared effective by the Commission. "Environmental Law" means any federal, state or local law, statute, ordinance, rule, regulation, order, decree, judgment, injunction, permit, license, authorization or other binding requirement, or common law, relating to health, safety or the protection, cleanup or restoration of the environment or natural resources, including those relating to the distribution, processing, generation, treatment, storage, disposal, transportation, other handling or release or threatened release of Hazardous Materials. "Exchange Act" means the Securities Exchange Act of 1934, as amended. "General Disclosure Package" means the Prospectus, together with the information and free writing prospectuses, if any, identified in Schedule A hereto. "General Use Issuer Free Writing Prospectus" means any Issuer Free Writing Prospectus that is intended for general distribution to prospective investors (other than a "bona fide electronic road show", defined in Rule 433 (the "Bona Fide Electronic Road Show")), as evidenced by its being so specified in Schedule A to this Agreement. "Hazardous Materials " means any material (including, without limitation, pollutants, contaminants, hazardous or toxic substances or wastes), the presence of which in the environment is prohibited, regulated or serves as the basis of liability as defined, listed or regulated by any Environmental Law. + + 3 + + + + + + + + "Issuer Free Writing Prospectus" means any "issuer free writing prospectus," as defined in Rule 433, relating to the Offered Shares, including, without limitation, any "free writing prospectus" (as defined in Rule 405) relating to the Offered Shares that is (i) required to be filed with the Commission by the Company, (ii) a road show that is a written communication within the meaning of Rule 433(d)(8)(i), whether or not required to be filed with the Commission, or (iii) exempt from filing with the Commission pursuant to Rule 433(d)(5)(i) because it contains a description of the Offered Shares or of the offering of the Offered Shares that does not reflect the final terms, in each case in the form filed or required to be filed with the Commission or, if not required to be filed, in the form retained in the Company's records pursuant to Rule 433(g). "Limited Use Issuer Free Writing Prospectus" means any Issuer Free Writing Prospectus that is not a General Use Issuer Free Writing Prospectus. A "Registration Statement" without reference to a time means such Registration Statement as of its Effective Time. For purposes of the foregoing definitions, 430B Information with respect to a Registration Statement shall be considered to be included in such Registration Statement as of the time specified in Rule 430B. "LTIP Units" means the special units of partnership interest of the Operating Partnership having the rights, preferences and other privileges designated in Section 4.04 and elsewhere in the OP Agreement. "Rules and Regulations" means the rules and regulations of the Commission. "Securities Laws" means, collectively, the Sarbanes-Oxley Act of 2002 ("Sarbanes-Oxley"), the Act, the Exchange Act, the Rules and Regulations, the auditing principles, rules, standards and practices applicable to auditors of "issuers" (as defined in Sarbanes-Oxley) promulgated or approved by the Public Company Accounting Oversight Board and, as applicable, the rules of the NYSE MKT, LLC (the "NYSE MKT") ("Exchange Rules"). "Statutory Prospectus" means the Base Prospectus, as amended and supplemented immediately prior to the Applicable Time, including any document incorporated by reference therein and any prospectus supplement deemed to be a part thereof. For purposes of this definition, Rule 430B Information contained in a form of prospectus that is deemed retroactively to be a part of the Registration Statement shall be considered to be included in the Statutory Prospectus as of the actual time that such form of prospectus is filed with the Commission pursuant to Rule 424(b) under the Act. + + 4 + + + + + + + + "Subsidiary" or "Subsidiaries" means each of the entities listed on Schedule A, which i) comprise all of the subsidiaries of the Transaction Entities, including the entities in which the Operating Partnership owns, directly or indirectly, all of the membership interests; ii) hold assets and iii) such omitted entities are considered in the aggregate as a single subsidiary, would not constitute a "significant subsidiary" within the meaning of Rule 1-02(w) of Regulation S-X. Unless otherwise specified, a reference to a "rule" or "Rule" is to the indicated rule under the Act. (ii) Compliance with Securities Act Requirements. (A) (1) At the Effective Time, (2) on the date of this Agreement and (3) on the Settlement Date, the Registration Statement or any post-effective amendment thereto complied and will comply in all respects to the requirements of the Act and the Rules and Regulations thereunder, and did not, does not and will not include any untrue statement of a material fact or omitted, omits or will omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; and (B) the Prospectus and each amendment or supplement thereto, as of their respective issue dates, complied and will comply in all material respects with the Act and the Rules and Regulations thereunder, and neither the Prospectus nor any amendment or supplement thereto (including any prospectus wrapper), as of its issue date, at the time of any filing with the Commission pursuant to Rule 424(b) and at the Settlement Date, included, includes or will include an untrue statement of a material fact or omitted, omits or will omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The representations and warranties contained herein do not apply to statements in or omissions from any document discussed herein based upon written information furnished to the Company by the Agent specifically for use therein, it being understood and agreed that such information is only that described as such in Section 8(b) hereof (collectively, the "Agent Information"). (iii) General Disclosure Package. As of the Applicable Time and on the Settlement Date, none of (A) the General Disclosure Package, (B) any individual Limited Use Issuer Free Writing Prospectus, when considered together with the General Disclosure Package and/or (C) each road show, if any, when considered together with, and as may be corrected by, the General Disclosure Package, included, includes or will include any untrue statement of a material fact or omitted, omits or will omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The preceding sentence does not apply to statements in or omissions from any Statutory Prospectus, Issuer Free Writing Prospectus or road show made in reliance upon and in conformity with the Agent Information. + + 5 + + + + + + + + (iv) Issuer Free Writing Prospectuses. Each Issuer Free Writing Prospectus, as of its issue date and, to the extent not superseded or modified, at all subsequent times through the completion of the offer and sale of the Offered Shares did not, does not and will not include any information that conflicted, conflicts or will conflict with the information then contained in the Registration Statement or the Prospectus. Each Issuer Free Writing Prospectus conformed, conforms or will conform in all respects to the requirements of the Act and the Rules and Regulations thereunder. The Company has not made any offer relating to the Offered Shares that would constitute an Issuer Free Writing Prospectus without the prior written consent of the Agent; provided that such consent is deemed to have been given with respect to each Issuer Free Writing Prospectus identified on Schedule A to this Agreement. The Company (A) has filed or will file each Issuer Free Writing Prospectus required to be filed with the Commission pursuant to the Act and the Rules and Regulations thereunder in accordance therewith and/or (B) has retained or will retain in accordance with the Act and the Rules and Regulations thereunder all Issuer Free Writing Prospectuses that were not required to be filed pursuant to the Act and the Rules and Regulations thereunder. The Company has made any Bona Fide Electronic Road Show in compliance with Rule 433(d)(8)(i) such that no filing of any road show (as defined in Rule 433(h)) is required in connection with the offering of the Series A Preferred Stock. (v) Ineligible Issuer Status. As of the determination date referenced in Rule 164(h) under the Act, the Company was not, is not or will not be (as applicable) an "ineligible issuer" in connection with the offering of the Offered Shares pursuant to Rules 164, 405 and 433, including (x) the Company or its subsidiaries in the preceding three years not having been convicted of a felony or misdemeanor or having been made the subject of a judicial or administrative decree or order as described in Rule 405 and (y) the Company or its subsidiaries in the preceding three years not having been the subject of a bankruptcy petition or insolvency or similar proceeding, not having had a registration statement be the subject of a proceeding or examination under Section 8 of the Act and not being the subject of a pending proceeding under Section 8A of the Act in connection with an offering, all as described in Rule 405. (vi) Good Standing of the Transaction Entities. The Company has been duly incorporated and is validly existing as a corporation under the laws of the State of Maryland and is in good standing with the State Department of Assessments and Taxation of Maryland, with the full corporate power and authority to own its properties and conduct its business as described in the Registration Statement, the General Disclosure Package and the Prospectus and to enter into and perform its obligations under this Agreement to which it is a party; and the Company is duly qualified to do business as a foreign corporation in good standing in all other jurisdictions in which its ownership or lease of property or the conduct of its business requires such qualification, except where the failure to be so qualified would not, individually or in the aggregate, result in a material adverse effect on the condition (financial or otherwise), results of operations, earnings, business, properties or prospects of the Transaction Entities and each of their respective Subsidiaries, taken as a whole (a "Material Adverse Effect"). The Operating Partnership has been duly formed and is validly existing as a limited partnership in good standing under the laws of the State of Delaware, with power and authority to own its properties and conduct its business as described in the Registration Statement, the General Disclosure Package and the Prospectus and to enter into and perform its obligations under this Agreement to which it is a party; and the Operating Partnership is duly qualified to do business as a foreign organization in good standing in all other jurisdictions in which its ownership or lease of property or the conduct of its business requires such qualification, except where the failure to be so qualified would not, individually or in the aggregate, result in a Material Adverse Effect. + + 6 + + + + + + + + (vii) Subsidiaries. Each Subsidiary (including, without limitation, Holdings LLC) has been duly incorporated or organized and is validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with power and authority (corporate or other) to own its properties and conduct its business as described in the Registration Statement, the General Disclosure Package and the Prospectus; and each Subsidiary is duly qualified to do business as a foreign corporation or organization in good standing in all other jurisdictions in which its ownership or lease of property or the conduct of its business requires such qualification, except where the failure to be so qualified would not, individually or in the aggregate, result in a Material Adverse Effect; all of the issued and outstanding capital stock, partnership interests or membership interests of each Subsidiary, including the outstanding LTIP Units of the Operating Partnership, has been duly authorized and validly issued and is fully paid and nonassessable (except with respect to future contributions as provided in the operating agreement or limited partnership agreement (or similar organizational document) of the applicable Subsidiary made subsequent to the date hereof); and the capital stock, membership interest, limited partnership interest or other equity interest of each Subsidiary held by the Transaction Entities or a Subsidiary, as applicable, is held as set forth on Schedule C hereto. The Transaction Entities, directly or indirectly through their respective Subsidiaries, hold good and marketable title to their equity interests in their respective Subsidiaries, in each case free and clear of any lien, encumbrance or security interest, except as described in the Registration Statement, the General Disclosure Package and the Prospectus, subject only to restrictions on transfer imposed under applicable U.S. federal and state securities laws and the limited liability company agreement, limited partnership agreement or other organizational document of each Subsidiary; and have not conveyed, transferred, assigned, pledged or hypothecated any of their respective equity interests in their Subsidiaries, in whole or in part, or granted any rights, options or rights of first refusal or first offer to purchase any of such interests or any portion thereof. + + 7 + + + + + + + + (viii) Subsidiaries of Transaction Entities. The Transaction Entities do not own or control, directly or indirectly, any corporation, association or other entity other than (i) the subsidiaries listed in Exhibit 21 to the Registration Statement, (ii) the subsidiaries not listed on Exhibit 21 but listed on Schedule A hereto, and (ii) such other entities omitted from Exhibit 21 which, when such omitted entities are considered in the aggregate as a single subsidiary, would not constitute a "significant subsidiary" within the meaning of Rule 1-02(w) of Regulation S-X. (ix) Authorization of the Agreement. This Agreement has been duly authorized, executed and delivered by each of the Transaction Entities and is enforceable against each Transaction Entity in accordance with the applicable terms contained herein. (x) Shares. The Offered Shares and all outstanding shares of capital stock of the Company have been duly authorized; the authorized equity capitalization of the Company is as set forth in the Registration Statement, the General Disclosure Package and the Prospectus under the caption "Capitalization", all outstanding shares of capital stock of the Company are, and when the Offered Shares have been delivered and paid for in accordance with this Agreement on the Settlement Date as set forth in the Registration Statement, the General Disclosure Package and the Prospectus, such Offered Shares will be, validly issued, fully paid and nonassessable, will conform to the information in the Registration Statement, the General Disclosure Package and the Prospectus and to the description of such Offered Shares contained therein; the stockholders of the Company have no preemptive rights with respect to the Offered Shares; none of the outstanding shares of capital stock have been issued in violation of any preemptive or similar rights of any security holder; any forms of certificates used to represent the Offered Shares comply in all material respects with all applicable statutory requirements and with any applicable requirements of the Organizational Documents of the Company, and with any requirements of the NYSE MKT. Except as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus, there are no outstanding (a) securities of the Company reserved for any purpose (other than certain outstanding common units of partnership interest in the Operating Partnership (the "OP Units") and LTIP Units disclosed in the General Disclosure Package and the Prospectus), (b) securities or obligations of the Company convertible into or exchangeable for any shares of common stock, $0.01 par value per share, of the Company (the "Common Stock"), Series A Preferred Stock or shares of Series B Redeemable Preferred Stock outstanding, par value $0.01 per share (the "Series B Preferred Stock"), (c) warrants, rights or options to subscribe for or purchase from the Company any such shares of Common Stock, Series A Preferred Stock or Series B Preferred Stock or any such convertible or exchangeable securities or obligations or (d) obligations of the Company to issue or sell any shares of Common Stock, Series A Preferred Stock or Series B Preferred Stock, any such convertible or exchangeable securities or obligations, or any such warrants, rights or options. At the Settlement Date, should the maximum number of Offered Shares be sold, there will be 19,565,106 shares of Common Stock outstanding, 5,721,460 shares of Series A Preferred Stock outstanding, 1,169,881 LTIP Units outstanding, 5,721,460 Series A Preferred OP Units outstanding, warrants to purchase approximately 25,720 shares of Common Stock outstanding, approximately 1,286 shares of Series B Preferred Stock, approximately 1,286 Series B Preferred Units of partnership interest in the Operating Partnership (the "Series B Preferred OP Units") and 19,870,674 OP Units outstanding, and each such class of securities conforms to the description set out in the Registration Statement, the General Disclosure Package and the Prospectus. + + 8 + + + + + + + + (xi) No Equity Awards. Except for grants (including those subject to issuance under the Management Agreement) disclosed in the Registration Statement, the General Disclosure Package and the Prospectus, the Company has not granted, to any person or entity a stock option or other equity-based award of or to purchase Common Stock, Series A Preferred Stock or Series B Preferred Stock pursuant to an equity-based compensation plan or otherwise. (xii) OP Units and Preferred OP Units. (1) OP Units. All outstanding OP Units have been duly authorized; all outstanding OP Units are validly issued and will conform to the information in the Registration Statement, the General Disclosure Package and the Prospectus and to the description of such OP Units contained therein; the holders of the outstanding OP Units have no preemptive rights with respect to the outstanding OP Units; none of the outstanding OP Units have been issued in violation of any preemptive or similar rights of any security holder; all outstanding OP Units have been issued and sold in compliance with all applicable federal and state securities laws. Except as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus, there are no outstanding (a) securities of the Operating Partnership reserved for any purpose, (b) securities or obligations of the Operating Partnership convertible into or exchangeable or redeemable for any partnership interests of the Operating Partnership, (c) warrants, rights or options to subscribe for or purchase from the Operating Partnership any such partnership interests or any such convertible or exchangeable securities or obligations or (d) obligations of the Operating Partnership to issue or sell any partnership interests, any such convertible or exchangeable securities or obligations, or any such warrants, rights or options. There are 19,870,674 OP Units outstanding, of which the Company owns, directly or indirectly, 19,565,106 OP Units. + + 9 + + + + + + + + (2) Series A Preferred OP Units. All outstanding Series A Preferred OP Units have been duly authorized; all outstanding Series A Preferred OP Units are validly issued and will conform to the information in the Registration Statement, the General Disclosure Package and the Prospectus and to the description of such Series A Preferred OP Units contained therein; the holders of the outstanding OP Units have no preemptive rights with respect to the outstanding Series A Preferred OP Units; none of the outstanding Series A Preferred OP Units have been issued in violation of any preemptive or similar rights of any security holder; all outstanding Series A Preferred OP Units have been issued and sold in compliance with all applicable federal and state securities laws. The Company Preferred OP Units have been duly authorized; when the Company Preferred OP Units have been delivered and paid for in accordance with the OP Agreement, the Company Preferred OP Units will be validly issued and will conform to the information in the Registration Statement, the General Disclosure Package and the Prospectus and to the description of such Company Preferred OP Units contained therein; there are no outstanding preemptive rights with respect to the Company Preferred OP Units; none of the outstanding Company Preferred OP Units have been issued in violation of any preemptive or similar rights of any security holder; all Company Preferred OP Units have been and will be, issued and sold in compliance with all applicable federal and state securities laws. There are 5,321,460 Series A Preferred OP Units outstanding, and at the Settlement Date, should all Offered Shares be sold pursuant to this Agreement, there will be 5,721,460 Series A Preferred OP Units outstanding, of which the Company will own, directly or indirectly, 100% of such Series A Preferred OP Units. (3) Series B Preferred OP Units. All outstanding Series B Preferred OP Units have been duly authorized; all outstanding Series B Preferred OP Units are validly issued and will conform to the information in the Registration Statement, the General Disclosure Package and the Prospectus and to the description of such Series B Preferred OP Units contained therein; the holders of the outstanding OP Units have no preemptive rights with respect to the outstanding Series B Preferred OP Units; none of the outstanding Series B Preferred OP Units have been issued in violation of any preemptive or similar rights of any security holder; all outstanding Series B Preferred OP Units have been issued and sold in compliance with all applicable federal and state securities laws. Except as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus, there are no outstanding (a) securities of the Operating Partnership reserved for any purpose, (b) securities or obligations of the Operating Partnership convertible into or exchangeable or redeemable for any partnership interests of the Operating Partnership, (c) warrants, rights or options to subscribe for or purchase from the Operating Partnership any such partnership interests or any such convertible or exchangeable securities or obligations or (d) obligations of the Operating Partnership to issue or sell any partnership interests, any such convertible or exchangeable securities or obligations, or any such warrants, rights or options. As of the Settlement Date there are approximately 1,286 Series B Preferred OP Units outstanding, of which the Company owns, directly or indirectly, 100% of Series B Preferred OP Units. + + 10 + + + + + + + + (xiii) No Finder's Fee. Except for the Agent's discounts and commissions payable by the Company to the Agent in connection with the Offered Shares contemplated herein or as otherwise disclosed in the Registration Statement, the General Disclosure Package and the Prospectus, there are no contracts, agreements or understandings that would give rise to a valid claim against the Company or the Agent for a brokerage commission, finder's fee or other like payment in connection with this offering. (xiv) Registration Rights. Except as described in the Registration Statement, General Disclosure Package and the Prospectus, there are no contracts, agreements or understandings by either of the Transaction Entities or their respective Subsidiaries, on the one hand, and any person, on the other hand, granting such person the right to require either of the Transaction Entities or such Subsidiaries to file a registration statement under the Act with respect to any securities of either of the Transaction Entities or their respective Subsidiaries owned or to be owned by such person or to require either of the Transaction Entities or such Subsidiaries to include such securities in the securities registered pursuant to a Registration Statement or in any securities being registered pursuant to any other registration statement filed by either of the Transaction Entities or such Subsidiaries under the Act (collectively, "Registration Rights"). (xv) Articles Supplementary. The articles supplementary of the Company designating the rights and preferences of the Offered Shares (the "Articles Supplementary"), comply with all applicable requirements under the Maryland General Corporation Law (the "MGCL"). + + 11 + + + + + + + + (xvi) Listing. The Offered Shares are registered under Section 12(b) of the Exchange Act, which registration will be maintained pursuant to Section 12(b) of the Exchange Act as of the Settlement Date; and the Company has applied for approval for the listing of the Offered Shares on the NYSE MKT and will receive such approval prior to the Settlement Date. (xvii) Absence of Further Requirements. No consent, approval, authorization, or order of, or filing or registration with, any governmental agency or body or any court is required for the consummation of the transactions contemplated by this Agreement, the OP Agreement or any other agreements in connection with the offering, issuance and sale of the Offered Shares by the Company or the issuance and sale of the Company Preferred OP Units by the Operating Partnership or the performance of obligations hereunder or pursuant to the terms of the Offered Shares, except the filing of the Prospectus under the Act and a Form 8-K under the Exchange Act and except such as have been already obtained or as may be required under state securities laws, FINRA or the NYSE MKT. (xviii) Title to Property. (1) The Transaction Entities hold, directly or indirectly through their respective Subsidiaries, good and marketable fee simple title to all of the real property described in the Registration Statement, the General Disclosure Package and the Prospectus and the improvements (exclusive of improvements owned by tenants, if applicable) located thereon (individually, a "Property" and collectively, the "Properties"), in each case, free and clear of all liens, encumbrances, claims, security interests, restrictions and defects, except such as are disclosed in the Registration Statement, the General Disclosure Package and the Prospectus, or do not materially affect the value of such Properties as a whole and do not materially interfere with the use made and proposed to be made of such Properties as a whole by the Company; (2) except as set forth in the Registration Statement, the General Disclosure Package and the Prospectus, none of the Transaction Entities or any of their respective Subsidiaries owns any real property other than the Properties; (3) except as set forth in the Registration Statement, the General Disclosure Package and the Prospectus, the mortgages or deeds of trust that encumber certain of the Properties are not convertible into debt or equity securities of the Transaction Entities and their respective Subsidiaries and such mortgages and deeds of trust are not cross-defaulted with any loan not made to, or cross-collateralized to any property not owned directly or indirectly by, the Transaction Entities or their respective Subsidiaries; (4) each of the Properties complies with all applicable codes, laws and regulations (including without limitation, building and zoning codes, laws and regulations and laws relating to access to the Properties), except as would not individually or in the aggregate materially affect the value of the Properties or interfere in any material respect with the use made and proposed to be made of the Properties by the Transaction Entities; (5) except as set forth in the Registration Statement, the General Disclosure Package and the Prospectus, neither of the Transaction Entities nor their respective Subsidiaries has received from any governmental authority any written notice of any condemnation of or zoning change affecting the Properties or any part thereof which if consummated would reasonably be expected to have a Material Adverse Effect on the Transaction Entities and their respective Subsidiaries, taken as a whole, and none of the Transaction Entities and their respective Subsidiaries know of any such condemnation or zoning change which is threatened and, in each case, which if consummated would reasonably be expected to have a Material Adverse Effect on the Transaction Entities and their respective Subsidiaries, taken as a whole, whether or not arising from transactions in the ordinary course of business; (6) no third party has an option or a right of first refusal to purchase any Property or any portion thereof or direct interest therein, except as such is set forth in the Registration Statement, the General Disclosure Package and the Prospectus; and (7) each of the Transaction Entities or one of its respective Subsidiaries has obtained an owner's title insurance policy, from a title insurance company licensed to issue such policy, on each Property that insures the Transaction Entities', the respective Subsidiary's fee interest in such Property. + + 12 + + + + + + + + (xix) Leases. (1) Each of the Transaction Entities or one of its Subsidiaries holds the lessor's interest under the applicable leases with any tenants occupying each Property (collectively, the "Leases"); (2) other than the Leases, none of the Transaction Entities or their respective Subsidiaries has entered into any agreements that would materially affect the value of the Properties as a whole or would materially interfere with the use made and proposed to be made of such Properties as a whole by the Transaction Entities; (3) none of the Transaction Entities, their respective Subsidiaries, or, to the Transaction Entities' knowledge, any other party to any Lease, is or, upon consummation of the transaction contemplated by this Agreement, will be in breach or default of any such Lease, except as to any such breach or default as would not have a Material Adverse Effect on the Transaction Entities and their respective Subsidiaries, taken as a whole; (4) no event has occurred or, to the Transaction Entities' knowledge, has been threatened in writing, which with or without the passage of time or the giving of notice, or both, would, individually or together with all such other events, constitute a default under any Lease, or would, permit termination, modification or acceleration under such Lease, except as to any such default as would not have a Material Adverse Effect on the Transaction Entities and their respective Subsidiaries, taken as a whole; (5) each of the Leases is valid and binding and in full force and effect, subject to applicable bankruptcy, insolvency, moratorium or other similar laws relating to creditors' rights and general principles of equity, except as would not have a Material Adverse Effect on the Transaction Entities or their respective Subsidiaries; and (6) none of the Transaction Entities, their respective Subsidiaries, or, to the Transaction Entities' knowledge, any other party to any Lease, is a party to any ground lease, sublease or operating sublease relating to any of their Properties. + + 13 + + + + + + + + (xx) Utilities. To the knowledge of the Transaction Entities and their respective Subsidiaries, water, stormwater, sanitary sewer, electricity and telephone service are all available at the property lines of each Property over duly dedicated streets or perpetual easements of record benefiting the applicable Property. (xxi) Absence of Defaults and Conflicts Resulting from Transaction. The execution, delivery and performance of this Agreement, and the issuance and sale of the Offered Shares by the Company (including the issuance of the Conversion Shares (as defined below)) and the issuance and sale of the Company Preferred OP Units by the Operating Partnership, and the use of net proceeds therefrom as contemplated by the Registration Statement, the General Disclosure Package and the Prospectus, will not result in a breach or violation of any of the terms or provisions of, or constitute a default or, to the extent applicable, a Debt Repayment Triggering Event (as defined below) under or result in the imposition of any lien, charge or encumbrance upon any property or assets of the Transaction Entities or any of their respective Subsidiaries pursuant to (A) the Organizational Documents (as defined below) of the Transaction Entities or any of their respective Subsidiaries, (B) any statute, rule, regulation or order of any governmental agency or body or any court, domestic or foreign, having jurisdiction over the Transaction Entities or any of their respective Subsidiaries or any of their Properties, or (C) any agreement, lease, contract, indenture or other agreement or instrument to which the Transaction Entities or any of their respective Subsidiaries is a party or by which the Transaction Entities or any of their respective Subsidiaries is bound or to which any of the Properties of the Transaction Entities or any of their respective Subsidiaries is subject, and except in case of clause (B) only, for such defaults, violations, liens, charges or encumbrances that would not, individually or in the aggregate, result in a Material Adverse Effect. A "Debt Repayment Triggering Event" means any event or condition that gives, or with the giving of notice or lapse of time would give, the holder of any guarantee, note, debenture or other evidence of indebtedness (or any person acting on such holder's behalf) the right to require the satisfaction, repurchase, redemption or repayment of all or a portion of such indebtedness by the Transaction Entities or any of their respective Subsidiaries. The term "Organizational Documents" as used herein means (a) in the case of a trust, its declaration of trust and bylaws; (b) in the case of a corporation, its charter and bylaws; (c) in the case of a limited or general partnership, its partnership certificate, certificate of formation or similar organizational documents and its partnership agreement; (d) in the case of a limited liability company, its articles of organization, certificate of formation or similar organizational documents and its operating agreement, limited liability company agreement, membership agreement or other similar agreement; and (e) in the case of any other entity, the organizational and governing documents of such entity. + + 14 + + + + + + + + (xxii) Absence of Existing Defaults and Conflicts. Neither of the Transaction Entities nor any of their respective Subsidiaries is (A) in violation of its respective Organizational Documents; (B) in default (or with the giving of notice or lapse of time would be in default) under any existing obligation, agreement, covenant or condition contained in any indenture, loan, contract, note, agreement, mortgage, lease or other agreement or instrument to which any of them is a party or by which any of them is bound or to which any of the properties of any of them is subject; or (C) in violation of any law or statute or any judgment, order, rule or regulation of any court or arbitrator or governmental or regulatory authority, except in the case of clauses (B) and (C) above, for any such default or violation that would not, individually or in the aggregate, have a Material Adverse Effect. (xxiii) Absence of Dividend Restriction. Except as set forth in the Registration Statement, the General Disclosure Package and the Prospectus, (i) neither of the Transaction Entities nor any of their respective Subsidiaries is currently prohibited, restricted or limited in its respective ability to pay, directly or indirectly, distributions or dividends to its equity holders, limited partners, general partners or members, as applicable, (ii) no Subsidiary is prohibited, directly or indirectly, from repaying to the Transaction Entities any loans or advances to such Subsidiary from the Transaction Entities or from transferring any of such Subsidiary's property or assets to the Transaction Entities or any other Subsidiary and (iii) the Operating Partnership is not prohibited, directly or indirectly, from repaying to the Company any loans or advances to the Operating Partnership from the Company or from transferring any of the Operating Partnership's property or assets to the Company. (xxiv) Possession of Licenses and Permits. The Transaction Entities and each of their respective Subsidiaries possess, and are in compliance with the terms of, all adequate certificates, authorizations, franchises, licenses and permits ("Licenses") necessary or material to the conduct of the business now conducted or proposed in the Registration Statement, the General Disclosure Package and the Prospectus to be conducted by them and have not received any notice of proceedings relating to the revocation or modification of any Licenses that, if determined adversely to the Transaction Entities or any of their respective Subsidiaries, would, individually or in the aggregate, have a Material Adverse Effect. + + 15 + + + + + + + + (xxv) Absence of Labor Dispute. No labor dispute with the employees of the Transaction Entities or their respective Subsidiaries exists, except as described in the Registration Statement, General Disclosure Package or Prospectus, or, to the knowledge of the Transaction Entities, is imminent, which, in any such case, would, singly or in the aggregate, result in a Material Adverse Effect. (xxvi) Possession of Intellectual Property. The Transaction Entities and their respective Subsidiaries have access to, adequate patents, patent rights, licenses, inventions, copyrights, know how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures), trademarks, service marks, trade names or other intellectual property necessary to conduct the business now operated by them; and neither the Transaction Entities nor their respective Subsidiaries have received any notice of infringement of or conflict with asserted rights of others with respect to any of the foregoing which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would have a Material Adverse Effect on the Transaction Entities and their respective Subsidiaries, taken as a whole. (xxvii) Environmental Laws. Except as described in the Registration Statement, General Disclosure Package and the Prospectus and except as would not reasonably be expected to result, singly or in the aggregate, in a Material Adverse Effect, neither of the Transaction Entities nor any of their respective Subsidiaries (and, to the knowledge of the Transaction Entities, no tenant or subtenant of any Property or portion thereof owned or leased by the Transaction Entities or their respective Subsidiaries) is in violation of any Environmental Law, including relating to the release of Hazardous Materials, and there are no pending or, to the knowledge of the Transaction Entities, threatened administrative, regulatory or judicial actions, suits, demands, claims, liens, notices of noncompliance, investigations or proceedings relating to any such violation or alleged violation. There are no past or present events, conditions, circumstances, activities, practices, actions, omissions or plans that could reasonably be expected to give rise to any costs or liabilities to the Transaction Entities or any of their respective Subsidiaries under, or to interfere with or prevent compliance by the Transaction Entities or any of their respective Subsidiaries with, Environmental Laws, except as such would not have a Material Adverse Effect and would not have a material adverse effect on a Property or a prospective acquisition property described in the Prospectus, or any of their respective operations, financial results or value. There are no costs or liabilities associated with Environmental Laws (including, without limitation, any capital or operating expenditures required for clean-up, closure of properties or compliance with Environmental Laws or any permit, license or approval, any related constraints on operating activities and any potential liabilities to third parties) that would, singly or in the aggregate, have a Material Adverse Effect. + + 16 + + + + + + + + (xxviii) Accurate Disclosure. The statements in the Registration Statement, the General Disclosure Package and the Prospectus under the captions "Prospectus Supplement Summary, "Additional Material Federal Income Tax Considerations," "Bluerock Residential Growth REIT, Inc.," "Description of the Securities We May Offer," "Description of Capital Stock," "Description of Depositary Shares," "Description of Debt Securities," "Description of Warrants," "Description of Units," "Book Entry Procedures and Settlement," "Important Provisions of Maryland Corporate Law and Our Charter and Bylaws," "Material Federal Income Tax Considerations," and "Plan of Distribution," insofar as such statements summarize legal matters, agreements, documents or proceedings discussed therein, are accurate and fair summaries of such legal matters, agreements, documents or proceedings and present the information required to be shown. (xxix) Absence of Manipulation. None of the Transaction Entities, any of their respective Subsidiaries or any affiliates of the Transaction Entities, has taken, directly or indirectly, any action that is designed to or that has constituted or that would cause or result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Offered Shares. (xxx) Statistical and Market-Related Data. Any third-party statistical and market-related data included in the Registration Statement, the General Disclosure Package and the Prospectus are based on or derived from sources that the Transaction Entities believe to be reliable and accurate and, to the extent required, they have obtained written consent to use such data from such sources. (xxxi) Compliance with the Sarbanes-Oxley Act. There is and has been no failure on the part of the Company or any of the Company's directors or officers, in their capacities as such, to comply in all material respects with any applicable provision of the Sarbanes-Oxley Act and the rules and regulations promulgated in connection therewith, including Section 402 related to loans and Sections 302 and 906 related to certifications. (xxxii) Internal Controls. The Transaction Entities and each of their respective subsidiaries maintain (A) effective internal controls over financial reporting (as defined under Rule 13a-15 and Rule 15d-15 under the Exchange Act) and (B) a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management's general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with U.S. generally accepted accounting principles ("GAAP") and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management's general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. Except as described in the Registration Statement, the General Disclosure Package and the Prospectus, since the end of the Company's most recent audited fiscal year, there has been (i) no material weakness in the Company's internal control over financial reporting (whether or not remediated) and (ii) no change in the Company's internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting. Other than as set forth in the Registration Statement, the General Disclosure Package and the Prospectus, since the date of the most recent balance sheet of the Company reviewed or audited by the Company's accountants, (i) the Audit Committee of the Board of Directors of the Company (the "Board") has not been advised of (A) any significant deficiencies in the design or operation of internal controls that could adversely affect the ability of the Company to record, process, summarize and report financial data, or any material weaknesses in internal controls and (B) any fraud, whether or not material, that involves management or other employees who have a significant role in the internal controls of the Company, and (ii) there have been no significant changes in internal controls over financial reporting that has materially affected the Company's internal controls over financial reporting, including any corrective actions with regard to significant deficiencies and material weaknesses. + + 17 + + + + + + + + (xxxiii) Disclosure Controls. The Company and its subsidiaries maintain an effective system of "disclosure controls and procedures" (as defined in Rule 13a-15(e) and Rule 15d-15 under the Exchange Act) that complies with the requirements of the Exchange Act and that has been designed to provide reasonable assurances that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Commission's rules and forms, including controls and procedures designed to ensure that such information is accumulated and communicated to the Company's management as appropriate to allow timely decisions regarding required disclosure, and such disclosure controls and procedures are effective in all material respects to perform the functions for which they were established. (xxxiv) XBRL. The interactive data in extensible Business Reporting Language included in the Registration Statement fairly presents the information called for in all material respects and has been prepared in accordance with the Commission's rules and guidelines applicable thereto. + + 18 + + + + + + + + (xxxv) Litigation. Other than as described in the Registration Statement, General Disclosure Package and Prospectus, there are no pending actions, suits or proceedings (including any inquiries or investigations by any court or governmental agency or body, domestic or foreign) against or affecting the Transaction Entities or any of their respective Subsidiaries or Properties that, if determined adversely to the Transaction Entities or any of their respective Subsidiaries or Properties, would materially and adversely affect the ability of the Transaction Entities to perform their respective obligations under this Agreement, or which are otherwise material in the context of the sale of the Offered Shares; and no such actions, suits or proceedings (including any inquiries or investigations by any court or governmental agency or body, domestic or foreign) are threatened or, to the Transaction Entities' knowledge, contemplated against their respective Subsidiaries or the Properties. (xxxvi) Financial Statements; Non-GAAP Financial Measures. The financial statements of the Company and its consolidated subsidiaries included in the Registration Statement, the General Disclosure Package and the Prospectus, together with the related schedules and notes, present fairly in all material respects the financial position of the Company and its consolidated subsidiaries as of the dates indicated, and the balance sheet, statements of operations, changes in members' equity and cash flows of the Company and its consolidated subsidiaries for the periods specified; said financial statements have been prepared in conformity with GAAP applied on a consistent basis throughout the periods involved and comply with the Commission's rules and guidelines with respect thereto. The supporting schedules included in the Registration Statement, the General Disclosure Package and the Prospectus relating to the Company and its consolidated subsidiaries present fairly in accordance with GAAP the information required to be stated therein. The combined statements of revenue and certain expenses included in the Registration Statement, the General Disclosure Package and the Prospectus, together with the related notes, comply with Rule 8-06 of Regulation S-X and present fairly in all material respects the revenue and certain expenses of the applicable Property for the periods specified; said financial statements have been prepared in conformity with GAAP applied on a consistent basis throughout the periods involved and comply with the Commission's rules and guidelines with respect thereto. The selected financial data and the summary financial information included in the Registration Statement, the General Disclosure Package and the Prospectus present fairly the information shown therein and have been compiled on a basis consistent with that of the audited, or unaudited as applicable, financial statements of the Company and its consolidated Subsidiaries included therein and comply with the Commission's rules and guidelines with respect thereto. The pro forma financial statements, if any, and the related notes thereto included in the Registration Statement, the General Disclosure Package and the Prospectus present fairly in all material respects the information shown therein, comply with the Commission's rules and guidelines with respect to pro forma financial statements and have been properly compiled on the bases described therein, and the assumptions used in the preparation thereof are reasonable and the adjustments used therein are appropriate to give effect to the transactions and circumstances referred to therein. Except as included therein, no historical or pro forma financial statements or supporting schedules are required to be included in the Registration Statement, the General Disclosure Package or the Prospectus under the Act or Rules and Regulations thereunder. All disclosures contained in the Registration Statement, the General Disclosure Package or the Prospectus regarding "non- GAAP financial measures" (as such term is defined by the Rules and Regulations ) comply with Regulation G of the Exchange Act and Item 10 of Regulation S-K of the Act to the extent applicable. + + 19 + + + + + + + + (xxxvii) No Material Adverse Change in Business. Except as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus, since the end of the period covered by the latest audited financial statements included therein (A) there has been no change, nor any development or event involving a prospective change, in the condition (financial or otherwise), results of operations, business, earnings, properties or prospects of the Transaction Entities and their respective subsidiaries, taken as a whole, that is material and adverse, (B) there has been no dividend or distribution of any kind declared, paid or made by the Transaction Entities and the Subsidiaries, on any class of the capital stock, membership interest or other equity interest, as applicable, except as would not have been required to be disclosed pursuant to the Exchange Act or the Exchange Act Regulations, (C) there has been no material change in the capital shares of stock, short-term indebtedness, long-term indebtedness, net current assets or net assets of the Transaction Entities or any of their respective Subsidiaries, (D) there has not been any material transaction entered into or any material transaction that is probable of being entered into by the Transaction Entities and their respective Subsidiaries, other than transactions in the ordinary course of business and changes and transactions disclosed or described in the Registration Statement, the General Disclosure Package and the Prospectus, (E) there has not been any obligation, direct or contingent, which is material to the Transaction Entities and their respective Subsidiaries, taken as a whole, incurred by the Transaction Entities and their respective Subsidiaries, except obligations incurred in the ordinary course of business and changes and transactions disclosed or described in the Registration Statement, the General Disclosure Package and the Prospectus, and (F) none of the Transaction Entities or any of their subsidiaries has sustained any loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor disturbance or dispute or any action, order or decree of any court or arbitrator or governmental or regulatory authority that would, singly or in the aggregate, have a Material Adverse Effect. + + 20 + + + + + + + + (xxxviii) Investment Company Act. Neither of the Transaction Entities are, nor after giving effect to the offering and sale of the Offered Shares and the application of the proceeds thereof as described in the Registration Statement, the General Disclosure Package and the Prospectus, will be required to register as an "investment company" as defined in the Investment Company Act of 1940, as amended (the "Investment Company Act"). (xxxix) Indebtedness. Neither the Transaction Entities nor any of their respective Subsidiaries has any indebtedness as of the date of this Agreement, and neither the Transaction Entities nor any of their respective Subsidiaries will have any indebtedness immediately prior to the sale of the Offered Shares on the Settlement Date, in each case except as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus. (xl) Insurance. The Transaction Entities and each of their respective Subsidiaries are insured by insurers with appropriately rated claims paying abilities against such losses and risks and in such amounts as are prudent and customary for the businesses in which they are engaged; all policies of insurance and fidelity or surety bonds insuring the Transaction Entities, their respective Subsidiaries or their respective businesses, assets, employees, officers and directors are in full force and effect; neither of the Transaction Entities nor any of their respective Subsidiaries has been refused any insurance coverage sought or applied for; neither of the Transaction Entities nor any of their respective Subsidiaries has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a similar cost as currently paid, except as set forth in or contemplated in the Registration Statement, the General Disclosure Package and the Prospectus; and the Company has obtained or will obtain directors' and officers' insurance in such amounts as is customary for companies engaged in the type of business conducted by the Company. (xli) Tax Law Compliance. Each of the Transaction Entities and the Subsidiaries has timely filed all federal, state and local tax returns that are required to be filed or has timely requested extensions thereof ("Returns"), except for any failures to file that, individually or collectively, would not result in a Material Adverse Effect, and has paid all taxes required to be paid by it and any other assessment, fine or penalty levied against it, to the extent that any of the foregoing is due and payable, except for any such assessments, fines or penalties that are currently being contested in good faith or that, individually or collectively, would not result in a Material Adverse Effect. No audits or other administrative proceedings or court proceedings are presently pending against any of the Transaction Entities or the Subsidiaries with regard to any Returns, and no taxing authority has notified any of the Transaction Entities or the Subsidiaries that it intends to investigate its tax affairs, except for any such audits or investigations that, individually or collectively, would not result in the assessment of material taxes. + + 21 + + + + + + + + (xlii) Real Estate Investment Trust. The Company has been organized and has operated in conformity with the requirements for qualification and taxation as a real estate investment trust (a "REIT") under the Internal Revenue Code of 1986, as amended (the "Code"), for its taxable years ended December 31, 2010 through December 31, 2015, and the Company's organization and method of operation (as described in the Registration Statement, the General Disclosure Package and the Prospectus) will enable the Company to continue to meet the requirements for qualification and taxation as a REIT under the Code for its taxable year ending December 31, 2016 and thereafter. All statements regarding the Company's qualification and taxation as a REIT set forth in the Registration Statement, the General Disclosure Package and the Prospectus are correct in all material respects. (xliii) Accuracy of Exhibits. There are no contracts or other documents that are required to be described in the Registration Statement, the General Disclosure Package or the Prospectus or to be filed as exhibits to the Registration Statement that are not described or filed as required by Item 601 of Regulation S-K or otherwise under the Rules and Regulations. (xliv) No Restriction on Subsidiaries. No Subsidiary of the Company is currently prohibited, directly or indirectly, under any agreement or other instrument to which it is a party or is subject, from paying any dividends to the Company, from making any other distribution on such Subsidiary's capital stock or membership interest, from repaying to the Company any loans or advances to such Subsidiary from the Company or from transferring any of such Subsidiary's properties or assets to the Company or any other Subsidiary of the Company, except as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus. (xlv) No Unlawful Payments. None of the Transaction Entities, any of their respective Subsidiaries, any director or officer or, to the knowledge of the Transaction Entities, any agent, employee or other person associated with or acting on behalf of the Transaction Entities or any of their respective Subsidiaries, has (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; (ii) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; (iii) violated or is in violation of any provision of the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder; or (iv) made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment. + + 22 + + + + + + + + (xlvi) Compliance with Anti-Money Laundering Laws. The operations of the Transaction Entities and their respective Subsidiaries are and have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the applicable anti-money laundering statutes of all jurisdictions in which the Transaction Entities and their respective Subsidiaries conduct business or whose Anti-Money Laundering Laws (as defined below) apply to the Transaction Entities, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the "Anti-Money Laundering Laws") and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Transaction Entities or any of their respective Subsidiaries with respect to the Anti-Money Laundering Laws is pending or, to the knowledge of the Transaction Entities, threatened. (xlvii) Compliance with OFAC. None of the Transaction Entities, any of their respective subsidiaries or, to the knowledge of either of the Transaction Entities, any director, officer, agent, employee or affiliate thereof is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury ("OFAC"); and the Company will not, directly or indirectly, use the proceeds of the offering of the Series A Preferred Stock hereunder, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity, for the purpose of financing the activities of any person currently subject to any U.S. sanctions administered or enforced by OFAC. (xlviii) Prior Sales of Series A Preferred Stock, Series B Preferred Stock, Series A Preferred OP Units, Series B Preferred OP Units, Series A OP Units or LTIP Units. Except as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus, the Company has not sold, issued or distributed any Series A Preferred Stock and Series B Preferred Stock, and the Operating Partnership has not issued, sold or distributed any Series A Preferred OP Units, Series B Preferred OP Units, Series A OP Units or LTIP Units during the six-month period preceding the date hereof. (xlix) Fourth Amendment to the OP Agreement. The terms of the Fourth Amendment to the OP Agreement provide for a sufficient number of Series A Preferred OP Units, the terms of which are substantially similar to the terms of the Series A Preferred Stock. + + 23 + + + + + + + + (l) Compliance with Laws. Each of the OP Agreement, the First Amendment to the OP Agreement, the Second Amendment to the OP Agreement, the Third Amendment and the Fourth Amendment to the OP Agreement comply with all applicable laws and each of the aforementioned amendments to the OP Agreement have been adopted in accordance with the OP Agreement. (li) Independent Accountants. BDO USA, LLP and Plante & Moran, PLLC, who have certified the financial statements and supporting schedules included in the Registration Statement, the General Disclosure Package and the Prospectus are independent public accountants as required by the Act, the Rules and Regulations and the Public Company Accounting Oversight Board. (lii) ERISA Matters. The Transaction Entities and each of their Subsidiaries is in compliance in all material respects with all presently applicable provisions of the Employee Retirement Income Security Act of 1974, as amended, including the regulations and published interpretations thereunder ("ERISA"); no "reportable event" (as defined in ERISA) has occurred with respect to any "pension plan" (as defined in ERISA) for which the Transaction Entities and each Subsidiary would have any liability; the Transaction Entities and each Subsidiary has not incurred and does not expect to incur liability under (i) Title IV of ERISA with respect to termination of, or withdrawal from, any "pension plan" or (ii) Sections 412, 403, 431, 432 or 4971 of the Code; and each "pension plan" for which the Transaction Entities or any Subsidiary would have any liability that is intended to be qualified under Section 401(a) of the Code is so qualified in all material respects and nothing has occurred, whether by action or by failure to act, which would cause the loss of such qualification. (liii) Enforceability of Management Agreement. The Management Agreement by and among the Transaction Entities and the Manager (the "Management Agreement"), has been duly authorized by the Transaction Entities and constitutes a valid and binding agreement of the Transaction Entities enforceable in accordance with its terms, except to the extent limited by applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws relating to or affecting creditors' rights and remedies generally, and subject, as to enforceability, to general principles of equity and, with respect to equitable relief, the discretion of the court before which any proceeding therefor may be brought (regardless of whether enforcement is sought in a proceeding at law or in equity). (liv) Subsidiary Partnership Tax Classification. Each of the Operating Partnership and each Subsidiary that is a partnership or a limited liability company under state law has been at all relevant times properly classified as a partnership or a disregarded entity, and not as a corporation or an association taxable as a corporation, for federal income tax purposes. + + 24 + + + + + + + + (lv) Related-Party Transactions. There are no relationships, whether direct or indirect, or related-party transactions involving the Transaction Entities or any of their respective Subsidiaries or any other person required to be described in the Registration Statement, the General Disclosure Package or the Prospectus that have not been described as required by the Act. (b) Certificates of Officers. Any certificate signed by any officer of either Transaction Entity, as applicable, and delivered to the Agent or its counsel in connection with the offering of the Offered Shares shall be deemed a representation and warranty by each Transaction Entity, as applicable, as to matters covered thereby, to the Agent. 2. Representations and Warranties Regarding the Manager. (a) Representations and Warranties. The Manager represents and warrants to the Agent and agrees with the Agent that: (i) Good Standing of the Manager. The Manager has been duly organized and is validly existing as a limited liability company in good standing under the laws of the State of Delaware and has full power and authority to own, lease and operate its properties and to conduct its business as described in the Registration Statement, the General Disclosure Package and the Prospectus and to enter into and perform its obligations under this Agreement; and the Manager and each of its subsidiaries is duly qualified as a foreign entity to transact business and is in good standing in each other jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure so to qualify or to be in good standing would not result in a Material Adverse Effect. (ii) Authorization of Agreement. This Agreement has been duly authorized, executed and delivered by the Manager. (iii) Absence of Further Requirements. No consent, approval, authorization, or order of, or filing or registration with, any court or governmental authority or agency is necessary or required for the performance by the Manager of its obligations under this Agreement and the Management Agreement, except such as have been already obtained or as may be required under the Act, Exchange Act Regulations, state securities laws, FINRA or the NYSE MKT. (iv) Absence of Defaults and Conflicts. The Manager is not in violation of its organizational documents or in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, deed of trust, loan or credit agreement, note, lease or other agreement or instrument to which the Manager is a party or will be a party in connection with this Agreement (including the Management Agreement) or by which it may be bound, or to which any of the property or assets of the Manager is subject (collectively, "Manager's Agreements and Instruments"), except for such violations or defaults that would not result in a Material Adverse Effect; and the execution, delivery and performance of this Agreement do not and will not, and in the case of the performance of the Management Agreement, will not, whether with or without the giving of notice or passage of time or both, conflict with or constitute a breach of, or default or repayment event under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Manager pursuant to, the Manager's Agreements and Instruments (except for such conflicts, breaches, defaults or repayment events or liens, charges or encumbrances that would not result in a Material Adverse Effect), nor will such action result in any violation of (A) the provisions of the Organizational Documents of the Manager or (B) any statute, law, rule, regulation, or order of any government agency or body or any court, domestic or foreign, having jurisdiction over the Manager or any of its assets, properties or operations, except in the case of clause (B) only, for any such violation that would not result in a Material Adverse Effect. + + 25 + + + + + + + + (v) Possession of Licenses and Permits. The Manager possesses, and is in compliance with the terms of, all Licenses necessary or material to the conduct of the business of the Manager now conducted or proposed in the Registration Statement, the General Disclosure Package and the Prospectus to be conducted by the Manager, except where the failure to possess such Licenses would not, singly or in the aggregate, result in a Material Adverse Effect, and has not received any notice of proceedings relating to the revocation or modification of any Licenses that, if determined adversely to the Manager would, individually or in the aggregate, have a Material Adverse Effect. (vi) Employment; Noncompetition; Nondisclosure. The Manager has not been notified that any of its executive officers or key employees named in the Registration Statement, the General Disclosure Package and the Prospectus (each, a "Company-Focused Professional") plans to terminate his or her employment with the Manager. Neither the Manager nor, to the knowledge of the Manager, any Company-Focused Professional is subject to any noncompete, nondisclosure, confidentiality, employment, consulting or similar agreement that would be violated by the present or proposed business activities of the Company or the Manager as described in the Registration Statement, the General Disclosure Package and the Prospectus. (vii) Accurate Disclosure. The statements regarding the Manager in the Registration Statement, the General Disclosure Package and the Prospectus under the captions "Prospectus Supplement Summary," "Risk Factors," "Description of Capital Stock—Distributions" and "Bluerock Residential Growth REIT, Inc.," are true and correct in all material respects. + + 26 + + + + + + + + (viii) Absence of Manipulation. The Manager has not taken, and will not take, directly or indirectly, any action that is designed to or that has constituted or that would be expected to cause or result in stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Offered Shares. (ix) Absence of Proceedings. There are no actions, suits or proceedings (including any inquiries or investigations by any court or governmental agency or body, domestic or foreign) now pending, or, to the knowledge of the Manager, threatened against or affecting the Manager that, if determined adversely to the Manager, would, individually or in the aggregate, have a Material Adverse Effect. (x) Investment Advisers Act. The Manager is not prohibited by the Investment Advisers Act of 1940, as amended, or the rules and regulations thereunder, from performing its obligations under the Management Agreement as described in the Registration Statement, the General Disclosure Package and the Prospectus. (xi) Enforceability of Management Agreement. The Management Agreement has been duly authorized by all necessary action and constitutes a valid and binding agreement of the Manager enforceable in accordance with its terms, except to the extent limited by applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws relating to or affecting creditors' rights and remedies generally, and subject, as to enforceability, to general principles of equity and, with respect to equitable relief, the discretion of the court before which any proceeding therefor may be brought (regardless of whether enforcement is sought in a proceeding at law or in equity). (xii) Internal Controls. The Manager operates under the Company's system of internal accounting controls in order to provide reasonable assurances that (A) transactions effectuated by it on behalf of the Company pursuant to its duties set forth in the Management Agreement are executed in accordance with management's general or specific authorization; and (B) access to the Company's assets is permitted only in accordance with management's general or specific authorization. (xiii) Resources. The Manager has the financial and other resources available to it necessary for the performance of its services and obligations as contemplated hereby and in the Management Agreement, the Registration Statement, the General Disclosure Package and the Prospectus. + + 27 + + + + + + + + (b) Certificates of Officers. Any certificate signed by any officer of the Manager and delivered to the Agent or its counsel shall be deemed a representation and warranty by the Manager as to matters covered thereby, to the Agent. 3. Sale and Delivery of Offered Shares. On the basis of the representations, warranties and agreements and subject to the terms and conditions set forth herein, the Agent will use commercially reasonable efforts on behalf of the Company in connection with the Agent's services hereunder. No offers or sales of the Offered Shares shall be made to any person without the prior approval of such person by the Company, such approval to be at the reasonable discretion of the Company. The Agent's aggregate fee for its services hereunder will be an amount equal to 3.15% of the gross proceeds from the sale of the Offered Shares sold to Purchasers that are not affiliates of the Agent (such fee payable by the Company at and subject to the consummation of Settlement). The Company, upon consultation with the Agent, may establish in the Company's sole discretion an aggregate amount of Shares to be sold in the offering contemplated hereby, which aggregate amount shall be reflected in the Prospectus. The Company acknowledges and agrees that (i) there can be no assurance that the Agent will be successful in selling the Offered Shares, and (ii) the Agent will incur no liability or obligation to the Company or any other person or entity if it does not sell the Offered Shares for any reason other than a failure by the Agent to use its commercially reasonable efforts consistent with its normal trading and sales practices to sell such Offered Shares as required herein. The Company will deliver the Offered Shares to or as directed by the Agent in a form reasonably acceptable to the Agent at or before 11:30 A.M., New York time, on May 26, 2016, or at such other time not later than seven (7) full business days thereafter as the Agent and the Company mutually determine, in the sole discretion of each, such time being herein referred to as the "Settlement Date". Immediately and only upon receipt of funds equal to the gross offering price of the Offered Shares, the Agent will then facilitate payment of the proceeds net of the Agent's fees specified herein, to the Company in Federal (same day) funds by wire transfer to an account at a bank acceptable to the Agent drawn to the order of the Company at the office of Bass, Berry & Sims PLC ("BBS"), no later than 5:30 P.M., New York time, on May 26, 2016. If, as of 5 P.M., New York time, on the Settlement Date, the settlement of the Offered Shares has not been fully consummated, including without limitation, receipt of the net offering proceeds by the Company, then Agent shall use its best efforts to promptly deliver any of the Offered Shares that have been transferred by the Company to the credit of the Agent's or its designee's account to the Company's designated account through coordination with the Company and its transfer agent. For purposes of Rule 15c6-1 under the Exchange Act, the Settlement Date (if later than the otherwise applicable settlement date) shall be the settlement date for payment of funds and delivery of securities for all the Offered Shares sold pursuant to the offering. The Offered Shares so to be delivered or evidence of their issuance will be made available for review at the above office of BBS at least 24 hours prior to the Settlement Date. + + 28 + + + + + + + + 4. Reserved. 5. Certain Agreements of the Transaction Entities and the Manager. (a) The Transaction Entities agree with the Agent that: (i) Additional Filings. Unless filed pursuant to Rule 462(b) as part of the Rule 462(b) Registration Statement in accordance with the last sentence, the Company will file the Prospectus, in a form approved by the Agent, with the Commission pursuant to and in accordance with Rule 424(b) and Rule 430B and during the time period specified by Rule 424(b) and Rule 430B. The Company will advise the Agent promptly of any such filing pursuant to Rule 424(b) and provide satisfactory evidence to the Agent of such timely filing. (ii) Filing of Amendments; Response to Commission Requests. The Company, subject to Section 5(a)(iii) hereof, will comply with the requirements of Rule 430B and will promptly advise the Agent of any proposal to amend or supplement at any time the Registration Statement or any Statutory Prospectus and will not affect such amendment or supplementation without the Agent's consent; and the Company will also advise the Agent promptly of (A) any amendment or supplementation of a Registration Statement or any Statutory Prospectus, (B) any request by the Commission or its staff for any amendment to any Registration Statement, for any supplement to any Statutory Prospectus or for any additional information, (C) the institution by the Commission of any stop order proceedings in respect of a Registration Statement or, to the Company's knowledge, the threatening of any proceeding for that purpose, and (D) the receipt by the Company of any notification with respect to the suspension of the qualification of the Offered Shares in any jurisdiction or the institution or, to the Company's knowledge, the threatening of any proceedings for such purpose. The Company will use its best efforts to prevent the issuance of any such stop order or the suspension of any such qualification and, if issued, to obtain as soon as possible the withdrawal thereof. (iii) Reserved. + + 29 + + + + + + + + (iv) Continued Compliance with Securities Laws. To comply with the Act and the Rules and Regulations thereunder so as to permit the completion of the distribution of the Offered Shares as contemplated in this Agreement and in the General Disclosure Package and the Prospectus. If, during such period after the first date of the placement of the Offered Shares as in the opinion of counsel for the Agent the Prospectus (or in lieu thereof the notice referred to in Rule 173(a)) is (or, but for the exception afforded by Rule 172, would be) required by law to be delivered in connection with sales by an Agent or dealer, any event shall occur or condition exist as a result of which it is necessary, in the opinion of counsel for the Agent or for the Company, to (i) amend the Registration Statement in order that the Registration Statement will not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) amend or supplement the General Disclosure Package or the Prospectus in order that the General Disclosure Package or the Prospectus, as the case may be, will not include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein not misleading in the light of the circumstances existing at the time it is delivered to a purchaser or (iii) amend the Registration Statement or amend or supplement the General Disclosure Package or the Prospectus, as the case may be, in order to comply with the requirements of the Act or the Rules and Regulations thereunder, the Company will promptly (A) notify the Agent of such event, (B) prepare any amendment or supplement as may be necessary to correct such statement or omission or to make the Registration Statement, the General Disclosure Package or the Prospectus comply with such requirements and, a reasonable amount of time prior to any proposed filing or use, furnish the Agent with copies of any such amendment or supplement and (C) file with the Commission any such amendment or supplement; provided, that the Company shall not file or use any such amendment or supplement to which the Agent or its counsel shall reasonably object. The Company will give the Agent notice of its intention to make any filings pursuant to the Exchange Act or Rules and Regulations thereunder from the date of this Agreement to the Settlement Date and will furnish the Agent with copies of any such documents a reasonable amount of time prior to such proposed filing, as the case may be, and will not file or use any such document to which the Agent or its counsel shall reasonably object, other than such filings as are required to be made pursuant to the Exchange Act or the Rules and Regulations thereunder. (v) Rule 158. The Company will timely file such reports pursuant to the Exchange Act as are necessary in order to make generally available to its stockholders as soon as practicable an earnings statement for the purposes of, and to provide to the Agent the benefits contemplated by, the last paragraph of Section 11(a) of the Act. (vi) Furnishing of Registration Statements and Prospectuses. The Company will furnish to the Agent signed copies of each Registration Statement (including all exhibits thereto), each related Statutory Prospectus, and, so long as a prospectus relating to the Offered Shares is (or but for the exemption in Rule 172 would be) required to be delivered under the Act, the Prospectus and all amendments and supplements to such documents, in each case in such quantities as the Agent requests. The Prospectus shall be so furnished on or prior to 9:00 A.M., New York time, on the business day following the execution and delivery of this Agreement, or at such time as otherwise agreed to by the Agent. All other documents shall be so furnished as soon as available. The Company will pay the expenses of printing and distributing to the Agent all such documents. + + 30 + + + + + + + + (vii) Blue Sky Qualifications. The Company will arrange for the qualification of the Offered Shares for sale under the laws of such jurisdictions as the Agent designate and will continue such qualifications in effect so long as required for the distribution but in no event longer than one year. (viii) Reporting Requirements. The Company, during the period when a prospectus relating to the Offered Shares is (or, but for the exception afforded by Rule 172, would be) required to be delivered under the Act, will file all documents required to be filed with the Commission pursuant to the Exchange Act within the time periods required by the Exchange Act and Rules and Regulations related thereto. (ix) Payment of Expenses. The Transaction Entities will pay all expenses incident to the performance of their obligations under this Agreement and all the costs and expenses in connection with the offering of the Offered Shares including but not limited to (A) any filing fees and other expenses incurred in connection with qualification of the Offered Shares for sale under the laws of such jurisdictions as the Agent designate and the preparation and printing of blue sky surveys or legal investment surveys relating thereto, (B) costs and expenses related to the review by the Financial Industry Regulatory Authority, Inc. ("FINRA") of the Offered Shares (including filing fees and the fees and expenses of counsel for the Agent relating to such review), (C) costs and expenses of legal counsel for the Agent incurred in connection with this Agreement and the offering of the Offered Shares not to exceed $35,000, (D) costs and expenses of the Company relating to investor presentations and any road show in connection with the offering and sale of the Offered Shares, if any, including, without limitation, (1) any travel expenses of the Company's officers and employees and (2) any other expenses of the Company, including all actually and reasonably incurred costs and expenses of the Agent advanced on behalf of the Company relating to the investor presentations and any roadshow in connection with the offering and sale of the Offered Shares, (E) the fees and expenses incident to listing the Offered Shares and Conversion Shares on the NYSE MKT, (F) expenses incurred in distributing the Prospectus (including any amendments and supplements thereto) to the Agent, (G) expenses incurred for preparing, printing and distributing any Issuer Free Writing Prospectuses to investors or prospective investors, (H) stamp duties, similar taxes or duties or other similar fees or charges, if any, incurred by the Agent in connection with the offering and sale of the Offered Shares; provided, however that the Transaction Entities shall have no obligation to pay any costs and expenses of the Agent relating to the investor presentations and any roadshow in connection with the offering and sale of the Offered Shares, other than costs and expenses advanced on behalf of the Company in accordance with (D) above. + + 31 + + + + + + + + (x) Use of Proceeds. The Company will use the net proceeds received in connection with the offering and sale of the Offered Shares and will cause the Operating Partnership to use the net proceeds received in connection with the issuance and sale of the Company Preferred OP Units in the manner described in the "Use of Proceeds" section of the Registration Statement, the General Disclosure Package and the Prospectus, and, except as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus, the Company does not intend to use any of the proceeds from the sale of the Offered Shares hereunder to repay any outstanding debt owed to any affiliate of the Agent. (xi) Absence of Manipulation. The Transaction Entities will not, and will cause each of its subsidiaries and controlled affiliates not to, take, directly or indirectly, any action designed to or that would constitute or that might cause or result in, stabilization or manipulation of the price of any securities of the Company to facilitate the sale or resale of the Offered Shares. (xii) Listing. The Company will maintain the registration of the Offered Shares pursuant to Section 12(b) of the Exchange Act as of the Settlement Date; and the Company will cause the Offered Shares to be listed on the NYSE MKT on or prior to the Settlement Date. (xiii) Maryland Law. The Company will use its best efforts to comply with all applicable requirements under the MGCL with respect to the Offered Shares. (xiv) Sarbanes-Oxley Act. The Company will use its reasonable best efforts to comply with all applicable provisions of the Sarbanes-Oxley Act. (xv) Reserved. (xvi) Qualification and Taxation as a REIT. The Company will use its best efforts to qualify for taxation as a REIT under the Code for its taxable year ending December 31, 2016 and thereafter, unless the Board determines that it is no longer in the best interests of the Company to continue to qualify as REIT. (xvii) Market Value. The aggregate market value of the Company's outstanding voting and nonvoting common equity computed pursuant to General Instruction I.B.1 of Form S-3 equaled or exceeded $75 million as of a date within 60 days prior to the date of filing of the Registration Statement. (xviii) Conversion Shares. (i) Following issuance and delivery of the Series A Preferred Stock in accordance with this Agreement, the Series A Preferred Stock will be redeemable at the option of holders of the Series A Preferred Stock beginning October 21, 2022 as provided in Articles Supplementary, and any such redemption by a holder may be settled at the option of the Company in cash, shares of Common Stock (the "Conversion Shares"), or a combination of cash and shares of Common Stock in accordance with the Articles Supplementary; upon approval of the issuance of the Conversion Shares by the Board, the Conversion Shares will be duly authorized and reserved for issuance upon such conversion by all necessary corporate action and such Conversion Shares, when issued upon such redemption in accordance with the Articles Supplementary, will be validly issued and will be fully paid and non-assessable, and will conform to the description of the Common Stock contained in the General Disclosure Package and the Prospectus; (ii) no holder of the Conversion Shares will be subject to personal liability by reason of being such a holder; (iii) the issuance of such Conversion Shares upon such redemption will not be subject to the preemptive or other similar rights of any security holder of the Company; (iv) the Board will make any and all determinations concerning the future issuance of the Conversion Shares; (v) the Company will not issue Conversion Shares unless the issuance thereof will comply with all applicable laws and rules and regulations of the NYSE MKT or any exchange on which the Common Stock or Series A Preferred Stock of the Company is listed; (vi) the Company will not issue Conversion Shares, unless upon such issuance the Conversion Shares will be free of transfer restrictions under applicable law and freely tradable by non-affiliates; and (vii) the Conversion Shares will be listed, pursuant to a supplemental listing application or otherwise, on the market or exchange where the Common Stock is then registered. + + 32 + + + + + + + + (xix) Amendment of Company Organizational Documents. To the extent necessary for the holders of Series A Preferred Stock to exercise their voting rights as described in the Articles Supplementary, the Company will make all necessary amendments to its Bylaws in order to effectuate such voting rights. (xx) Investment Company. The Company will not, and the Operating Partnership will not, be or become, at any time prior to the expiration of three years after the date of this Agreement, an "investment company," as such term is defined in the Investment Company Act; provided, however, that this provision shall not be applicable and shall have no legal force or effect in the event that the Company becomes deemed an "investment company" solely as a result of the Commission amending, revising, rescinding or otherwise modifying the Investment Company Act, the rules and regulations promulgated thereunder or the Commission's interpretations and guidance relating thereto after the Settlement Date. (b) The Manager agrees with the Agent that: (i) Reporting of Material Events. The Manager agrees that, during the period when the Prospectus is required to be delivered under the Act or the Exchange Act, it shall notify the Agent and the Transaction Entities of the occurrence of any material events respecting its activities or condition, financial or otherwise, and the Manager will forthwith supply such information to the Transaction Entities as shall be necessary in the opinion of counsel to the Transaction Entities and the Agent for the Transaction Entities to prepare any necessary amendment or supplement to the Prospectus so that, as so amended or supplemented, the Prospectus will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing at the time it is delivered to a purchaser, not misleading. + + 33 + + + + + + + + (ii) No Stabilization or Manipulation. Not to take, directly or indirectly, any action designed to or that could reasonably be expected to cause or result in any stabilization or manipulation of the price of any securities of the Company to facilitate the sale or resale of the Offered Shares. (iii) Investment Adviser. The Manager will not be or become, at any time prior to the expiration of three years after the date of this Agreement, an "investment adviser," as such term is defined in the Investment Advisers Act of 1940, as amended (the "Investment Advisers Act"). 6. Free Writing Prospectuses. The Company represents and agrees that, unless it obtains the prior consent of the Agent, and the Agent represents and agrees that, unless it obtains the prior consent of the Company, it has not made and will not make any offer relating to the Offered Shares that would constitute an Issuer Free Writing Prospectus, or that would otherwise constitute a "free writing prospectus," as defined in Rule 405, required to be filed with the Commission; provided, that such consent is deemed to have been given with respect to each Issuer Free Writing Prospectus identified on Schedule A hereto and any "road show that is a written communication" within the meaning of Rule 433(d)(8)(i) that has been reviewed and approved by the Agent. Any such free writing prospectus consented to by the Company and the Agent is hereinafter referred to as a "Permitted Free Writing Prospectus." The Company represents that it has treated and agrees that it will treat each Permitted Free Writing Prospectus as an "issuer free writing prospectus," as defined in Rule 433, and has complied and will comply with the requirements of Rules 164 and 433 applicable to any Permitted Free Writing Prospectus, including timely Commission filing where required, legending and record keeping. The Company represents that it has satisfied and agrees that it will satisfy the conditions in Rule 433 to avoid a requirement to file with the Commission any Bona Fide Electronic Road Show. If at any time following the issuance of a Permitted Free Writing Prospectus there occurred or occurs an event or development as a result of which such Permitted Free Writing Prospectus conflicted or would conflict with the information contained in the Registration Statement, the General Disclosure Package or the Prospectus, or included or would include an untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing at that subsequent time, not misleading, the Company will promptly notify the Agent and will promptly amend or supplement, at its own expense, such Permitted Free Writing Prospectus to eliminate or correct such conflict, untrue statement or omission + + 34 + + + + + + + + 7. Conditions of the Obligations of the Agent. The obligations of the Agent with respect to the consummation of the transactions contemplated hereby will be subject to the accuracy of the representations and warranties of the Transaction Entities and the Manager herein (as though made on the Settlement Date), to the accuracy of the statements of the Transaction Entities and the Manager made pursuant to the provisions hereof, to the performance by the Transaction Entities and the Manager of their obligations hereunder, to all contingencies and conditions described in this Agreement having been met and to the following additional conditions precedent: (a) Accountants' Comfort Letters and CAO Certificates. (i) The Agent shall have received letters, dated, respectively, the date hereof and the Settlement Date, of BDO USA, LLP in a form approved by the Agent and/or Bass, Berry & Sims PLC, confirming that they are a registered public accounting firm and independent public accountants within the meaning of the Securities Laws and in form and substance satisfactory to the Agent, containing statements and information of the type ordinarily included in accountants' "comfort letters" with respect to financial statements and certain financial information of the Company contained in the Registration Statement, the General Disclosure Package and the Prospectus (except that, in any letter dated the Settlement Date, the specified date referred to in the letter shall be a date no more than three (3) days prior to the Settlement Date). (ii) Should the Agent deem appropriate, the Agent shall have received a certificate, dated the date hereof, of Christopher J. Vohs, in his capacity as the Chief Accounting Officer and Principal Financial Officer of the Company, substantially in the form of Annex I-A hereto. (b) Effectiveness of Registration Statement. If the Effective Time of an additional Registration Statement (if any) is not prior to the execution and delivery of this Agreement, such Effective Time shall have occurred not later than 5:00 P.M., New York time, on the date of this Agreement or, if earlier, the time the Prospectus is finalized and distributed to the Agent, or shall have occurred at such later time as shall have been consented to by the Agent. The Prospectus shall have been filed with the Commission in accordance with Rule 424(b) under the Act and Section 5(a) hereof. Prior to the Settlement Date, no stop order suspending the effectiveness of a Registration Statement, Statutory Prospectus or the Prospectus shall have been issued and no proceedings for that purpose shall have been instituted or, to the knowledge of the Company or the Agent, shall be contemplated by the Commission. + + 35 + + + + + + + + (c) No Material Adverse Change. Subsequent to the execution and delivery of this Agreement, there shall not have occurred (i) any change, or any development or event involving a prospective change, in the condition (financial or otherwise), results of operations, business, earnings, properties or prospects of the Transaction Entities and their respective Subsidiaries, taken as a whole, that, in the sole judgment of the Agent, is material and adverse and makes it impractical or inadvisable to market the Offered Shares; (ii) any change in either U.S. or international financial, political or economic conditions or currency exchange rates or exchange controls the effect of which is such as to make it, in the judgment of the Agent, impractical to market or to enforce contracts for the sale of the Offered Shares, whether in the primary market or in respect of dealings in the secondary market; (iii) any suspension or material limitation of trading in securities generally on the NYSE MKT, or any setting of minimum or maximum prices for trading on such exchange; (iv) or any suspension of trading of any securities of the Company on any national securities exchange or in the over-the-counter market; (v) any banking moratorium declared by any U.S. federal or New York authorities; (vi) any major disruption of settlements of securities, payment, or clearance services in the United States or any other country where such securities are listed; or (vii) any attack on, outbreak or escalation of hostilities or act of terrorism involving the United States, any declaration of war by Congress or any other national or international calamity or emergency if, in the judgment of the Agent, the effect of any such attack, outbreak, escalation, act, declaration, calamity or emergency is such as to make it impractical or inadvisable to market the Offered Shares or to enforce contracts for the sale of the Offered Shares. (d) Opinion of Counsel for the Transaction Entities. The Agent shall have received an opinion, dated the Settlement Date, of Kaplan, Voekler, Cunningham & Frank, PLC, counsel for the Transaction Entities, substantially in the form attached hereto as Annex III-A and a letter substantially in the form attached hereto as Annex III-B. (e) Opinion of Maryland Counsel for Company. The Agent shall have received an opinion, dated the Settlement Date, of Venable LLP, Maryland counsel for the Company, substantially in the form attached hereto as Annex IV. (f) Tax Opinion. The Agent shall have received a tax opinion, dated the Settlement Date, of Vinson & Elkins, LLP, counsel for the Company, substantially in the form attached hereto as Annex V. (g) Opinion of Counsel for Agent. The Agent shall have received from Bass, Berry & Sims PLC, counsel for the Agent, such opinion or opinions, dated the Settlement Date, with respect to such matters as the Agent may require. In rendering such opinion, Bass, Berry & Sims PLC, may (i) rely as to matters of fact (but not as to legal conclusions), to the extent they deem proper, on certificates of responsible officers of the Transaction Entities, their respective Subsidiaries, the Manager and of public officials and (ii) rely as to matters involving the application of the laws of the state of Maryland upon the opinion of Venable LLP. + + 36 + + + + + + + + (h) Company Officers' Certificate. The Agent shall have received a certificate, dated the Settlement Date, of the Chief Executive Officer of the Company and the Chief Accounting Officer of the Company, in his capacity as the Principal Financial Officer of the Company, in which such officers shall state that: the representations and warranties of the Transaction Entities in this Agreement are true and correct as of such date; each of the Transaction Entities has complied with all agreements and satisfied all conditions on its part to be performed or satisfied hereunder at or prior to the Settlement Date; no stop order suspending the effectiveness of any Registration Statement has been issued and no proceedings for that purpose have been instituted or, to the best of their knowledge and after reasonable investigation, are contemplated by the Commission; the 462(b) Registration Statement (if any) satisfying the requirements of subparagraphs (1) and (3) of Rule 462(b) was timely filed pursuant to Rule 462(b), including payment of the applicable filing fee in accordance with the applicable Rules and Regulations; and, subsequent to the date of the most recent financial statements in the Registration Statement, the General Disclosure Package and the Prospectus, there has been no change, nor any development or event involving a prospective change, in the condition (financial or otherwise), results of operations, earnings, business, properties or prospects of the Transaction Entities and their respective Subsidiaries, taken as a whole, that is material and adverse, except as set forth in the Registration Statement, the General Disclosure Package and the Prospectus or as described in such certificate. (i) Manager Officer's Certificate. The Agent shall have received a certificate, dated the Settlement Date, of the Chief Executive Officer of the Manager in which such officer shall state that: the representations and warranties of the Manager in this Agreement are true and correct as of such date and that the Manager has complied with all agreements and satisfied all conditions on its part to be performed or satisfied hereunder at or prior to the Settlement Date. (j) Reserved. (k) Rule 462(b) Registration Statement. In the event that a Rule 462(b) Registration Statement is filed in connection with the offering contemplated by this Agreement, such Rule 462(b) Registration Statement shall have been filed with the Commission and shall have become effective automatically upon such filing. (l) Company Good Standing. The Agent shall have received a certificate of good standing of the Company certified by the Maryland State Department of Assessments and Taxation as of a date within five (5) business days of the Settlement Date. (m) Operating Partnership Good Standing. The Agent shall have received a certificate of good standing of the Operating Partnership certified by the Secretary of State of the State of Delaware as of a date within five (5) business days of the Settlement Date. + + 37 + + + + + + + + (n) Manager Good Standing. The Agent shall have received a certificate of good standing of the Manager certified by the Secretary of State of the State of Delaware as of a date within five (5) business days of the Settlement Date. (o) Subsidiary Good Standings. The Agent shall have received a certificate of good standing certified by the Secretary of State (or equivalent governmental authority) of the state of incorporation or formation as of a date no earlier than April 15, 2016, for each entity listed on Schedule B hereto. (p) Secretary's Certificate of the Company. The Agent shall have received a certificate of the secretary of the Company certifying resolutions of the board of directors of the Company approving the Agreement and the transactions contemplated thereby. (q) Secretary's Certificate of the Manager. The Agent shall have received a certificate of the secretary of the Manager certifying resolutions of the Manager's managing member approving the Agreement and the transactions contemplated thereby. (r) General Partner Certificate of the Operating Partnership. The Agent shall have received a certificate of the general partner of the Operating Partnership certifying resolutions of the Operating Partnership approving the Agreement and the transactions contemplated thereby. (s) FINRA Approval. The Agent shall have received any required clearance letter from the Corporate Finance Department of FINRA with respect to the offering. (t) Listing. An application for the listing of the Offered Shares shall have been approved for listing to the NYSE MKT prior to the Settlement Date. (u) Amendment to OP Agreement. The Fourth Amendment to the OP Agreement shall be in full force and effect as of the Settlement Date. The Transaction Entities will furnish the Agent with such conformed copies of such opinions, certificates, letters and documents as the Agent reasonably request. The Agent may in its sole discretion waive compliance with any conditions to the obligations of the Agent hereunder. + + 38 + + + + + + + + 8. Indemnification and Contribution. (a) Indemnification of Agent by the Transaction Entities. Each of the Transaction Entities will, jointly and severally, indemnify and hold harmless the Agent, its partners, members, directors, officers, employees, agents, affiliates and each person, if any, who controls the Agent within the meaning of Section 15 of the Act or Section 20 of the Exchange Act (each, an "Indemnified Party"), against any and all losses, claims, damages or liabilities, joint or several, to which such Indemnified Party may become subject, under the Act, the Exchange Act, other Federal or state statutory law or regulation or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in any part of any Registration Statement at any time, any Statutory Prospectus as of any time, the Prospectus or any Issuer Free Writing Prospectus, or arise out of or are based upon the omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse each Indemnified Party for any legal or other expenses reasonably incurred by such Indemnified Party in connection with investigating or defending against any loss, claim, damage, liability, action, litigation, investigation or proceeding whatsoever (whether or not such Indemnified Party is a party thereto), whether threatened or commenced, and in connection with the enforcement of this provision with respect to any of the above as such expenses are incurred; provided, however, that neither of the Transaction Entities will be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement in or omission or alleged omission from any of such documents in reliance upon and in conformity with written information furnished to the Company by the Agent specifically for use therein, it being understood and agreed that such information furnished by the Agent consists only of the information described as such in Section 8(b) below. (b) Indemnification of Company, Directors and Officers. The Agent will indemnify and hold harmless each of the Transaction Entities, their directors and each of their officers who signs a Registration Statement and each person, if any, who controls either of the Transaction Entities within the meaning of Section 15 of the Act or Section 20 of the Exchange Act (each, an "Agent Indemnified Party"), against any losses, claims, damages or liabilities to which such Agent Indemnified Party may become subject, under the Act, the Exchange Act, other Federal or state statutory law or regulation or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in any part of any Registration Statement at any time, any Statutory Prospectus as of any time, the Prospectus or any Issuer Free Writing Prospectus, or arise out of or are based upon the omission or the alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written information furnished to either of the Transaction Entities by the Agent specifically for use therein, and will reimburse any legal or other expenses reasonably incurred by such Agent Indemnified Party in connection with investigating or defending against any such loss, claim, damage, liability, action, litigation, investigation or proceeding whatsoever (whether or not such Agent Indemnified Party is a party thereto), whether threatened or commenced, based upon any such untrue statement or omission, or any such alleged untrue statement or omission as such expenses are incurred, it being understood and agreed that the only such information furnished by the Agent consists of the following information in the Prospectus furnished on behalf of the Agent: the thirteenth full paragraph under the caption "Plan of Distribution" in the Final Prospectus Supplement and under the caption "Other Relationships," in each case, only to the extent that such statements relate only to the Agent. + + 39 + + + + + + + + (c) Actions against Parties; Notification. Promptly after receipt by an indemnified party of notice of the commencement of any action against such indemnified party, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under subsections (a), (b) or (c) above, notify the indemnifying party of the commencement thereof; but the failure to notify the indemnifying party shall not relieve it from any liability that it may have under subsections (a), (b) or (c) above except to the extent that it has been materially prejudiced (through the forfeiture of substantive rights or defenses) by such failure; and provided further that the failure to notify the indemnifying party shall not relieve it from any liability that it may have to an indemnified party otherwise than under subsections (a), (b) or (c) above. In case any such action is brought against any indemnified party and it notifies the indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein and, to the extent that it may wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party will not be liable to such indemnified party under this Section 8(c) for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation. In any such proceeding, any indemnified party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such indemnified party unless (i) the indemnifying party and the indemnified party shall have mutually agreed to the contrary; (ii) the indemnifying party has failed within a reasonable time to retain counsel reasonably satisfactory to the indemnified party; (iii) the indemnified party shall have reasonably concluded that there may be legal defenses available to it that are different from or in addition to those available to the indemnifying party; or (iv) the named parties in any such proceeding (including any impleaded parties) include both the indemnifying party and the indemnified party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interest between them. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened action in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party unless such settlement (i) includes an unconditional release of such indemnified party from all liability on any claims that are the subject matter of such action and (ii) does not include a statement as to, or an admission of, fault, culpability or a failure to act by or on behalf of an indemnified party. (d) Contribution. If the indemnification provided for in this Section 8 is unavailable or insufficient to hold harmless an indemnified party under subsections (a), (b) or (c) above, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of the losses, claims, damages or liabilities referred to in subsections (a), (b) or (c) above (i) in such proportion as is appropriate to reflect the relative benefits received by the Transaction Entities on the one hand and by the Agent on the other hand from the offering of the Offered Shares or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company, on the one hand, and the Agent, on the other, in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities as well as any other relevant equitable considerations. The relative benefits received by the Transaction Entities on the one hand and by the Agent on the other hand shall be deemed to be in the same proportion as the total net proceeds from the offering (before deducting expenses) received by the Company bear to the total underwriting discounts and commissions received by the Agent. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or the Agent and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. The amount paid by an indemnified party as a result of the losses, claims, damages or liabilities referred to in the first sentence of this Section 8(d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any action or claim which is the subject of this Section 8(d). Notwithstanding the provisions of this Section 8(d), the Agent shall not be required to contribute any amount in excess of the amount by which the total price at which the Series A Preferred Stock sold pursuant to this Agreement exceeds the amount of any damages which the Agent has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. + + 40 + + + + + + + + 9. Termination of Agency. If the Offered Shares are not sold by May 26, 2016, this Agreement will terminate without liability on the part of the Company and the Agent, except as provided in Section 10 hereof. As used in this Agreement, the term "Agent" includes any person substituted for the Agent under this Section 9. 10. Survival of Certain Representations and Obligations. The respective indemnities, agreements, representations, warranties and other statements of the Transaction Entities, the Manager or their respective officers and of the Agent set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation, or statement as to the results thereof, made by or on behalf of the Agent, the Transaction Entities, the Manager or any of their respective representatives, officers or directors or any controlling person, and will survive delivery of and payment for the Offered Shares. If the settlement of the Offered Shares by the Agent is not consummated for any reason other than solely because of the termination of this Agreement pursuant to Section 9 hereof, the Company will reimburse the Agent for all out-of-pocket expenses (including fees and disbursements of counsel) reasonably incurred by them in connection with the placement of the Offered Shares, and the respective obligations of the Transaction Entities and the Manager, on the one hand, and the Agent, on the other hand, pursuant to Section 8 hereof shall remain in effect. In addition, if the Offered Shares have been settled pursuant to the terms of the Agreement, the representations and warranties in Sections 2 through 3 and all obligations under Section 5 shall also remain in effect. + + 41 + + + + + + + + 11. Notices. All communications hereunder will be in writing and, if sent to the Agent, will be mailed or delivered and confirmed to the Agent, with a copy to Bass, Berry & Sims PLC, 150 Third Avenue South, Suite 2800, Nashville, TN 37201, Attention: Lori B. Morgan, or, if sent to the Transaction Entities or the Manager, will be mailed or delivered and confirmed to it at c/o Bluerock Residential Growth REIT, Inc., 712 Fifth Avenue, 9th Floor, New York, NY 10019, Attention: Michael L. Konig, with a copy to Kaplan, Voekler, Cunningham & Frank, PLC, 1401 East Cary Street, Richmond, Virginia 23239, Attention: Richard P. Cunningham, Jr. 12. Successors. This Agreement will inure to the benefit of and be binding upon the parties hereto and their respective successors and the officers, directors and controlling persons referred to in Section 9, and no other person will have any right or obligation hereunder. 13. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same Agreement. 14. Headings. The headings herein are inserted for convenience of reference only and are not intended to be part of, or to affect the meaning or interpretation of, this Agreement. 15. Entire Agreement. This Agreement represents the entire agreement between the Transaction Entities and the Manager, on the one hand, and the Agent, on the other, with respect to the preparation of any Registration Statement, the General Disclosure Package, the Prospectus, the conduct of the offering, and the placement and sale of the Offered Shares. 16. Absence of Fiduciary Relationship. The Transaction Entities and the Manager each acknowledge and agree that: (a) No Other Relationship. The Agent has been retained solely to act as a placement agent in connection with the sale of Offered Shares and that no fiduciary, advisory or agency relationship between the Transaction Entities and the Manager on the one hand, and the Agent on the other has been created in respect of any of the transactions contemplated by this Agreement or the Prospectus, irrespective of whether the Agent has advised or is advising either of the Transaction Entities or the Manager on other matters; (b) Arms' Length Negotiations. The price of the Offered Shares set forth in this Agreement was established by the Company following discussions and arms' length negotiations with the Agent, and the Transaction Entities and Manager are capable of evaluating and understanding and understands and accepts the terms, risks and conditions of the transactions contemplated by this Agreement; + + 42 + + + + + + + + (c) Absence of Obligation to Disclose. The Transaction Entities and the Manager have been advised that the Agent and its affiliates are engaged in a broad range of transactions which may involve interests that differ from those of the Transaction Entities and the Manager, and that the Agent has no obligation to disclose such interests and transactions to Transaction Entities and the Manager by virtue of any fiduciary, advisory or agency relationship; and (d) Waiver. Each of the Transaction Entities and the Manager waives, to the fullest extent permitted by law, any claims they may have against the Agent for breach of fiduciary duty or alleged breach of fiduciary duty and agree that the Agent shall have no liability (whether direct or indirect) to either of the Transaction Entities or the Manager in respect of such a fiduciary duty claim or to any person asserting a fiduciary duty claim on behalf of or in right of the Transaction Entities or the Manager, including stockholders, holders of membership interests, employees or creditors of the Transaction Entities or the Manager. 17. Trial by Jury. Each of the Transaction Entities and the Manager (on its behalf and, to the extent permitted by applicable law, on behalf of its stockholders and affiliates) and the Agent hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby. 18. Applicable Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York. 19. Jurisdiction. Each of the Transaction Entities and the Manager hereby submits to the non-exclusive jurisdiction of the Federal and state courts in the Borough of Manhattan in The City of New York in any suit or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby. Each of the Transaction Entities and the Manager irrevocably and unconditionally waives any objection to the laying of venue of any suit or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby in Federal and state courts in the Borough of Manhattan in The City of New York and irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such suit or proceeding in any such court has been brought in an inconvenient forum. 20. Termination. Until the Settlement Date, this Agreement may be terminated by the Agent by giving notice (in the manner prescribed by Section 9 hereof) to the Company, if (i) the Company shall have failed, refused or been unable, at or prior to the Settlement Date, to perform any agreement on its part to be performed hereunder unless the failure to perform any agreement is due to the default or omission by the Agent; (ii) any other condition of the obligations of the Agent hereunder is not fulfilled; (iii) trading in securities generally on the NYSE, NYSE MKT, or Nasdaq shall have been suspended or minimum or maximum prices shall have been established on either of such exchanges or such market by the Commission or by such exchange or other regulatory body or governmental authority having jurisdiction; (iv) trading or quotation in any of the Company's securities shall have been suspended or materially limited by the Commission or by the NYSE MKT, NYSE or Nasdaq or other regulatory body of governmental authority having jurisdiction; (v) a general banking moratorium has been declared by Federal or New York authorities; (vi) a material disruption in securities settlement, payment or clearance services in the United States shall have occurred; (vii) there shall have been any material adverse change in general economic, political or financial conditions in the United States or in international conditions on the financial markets in the United States, in each case, the effect of which is such as to make it, in the Agent's reasonable judgment, inadvisable to proceed with the delivery of the Securities; or (viii) any attack on, outbreak or escalation of hostilities, declaration of war or act of terrorism involving the United States or any other national or international calamity or emergency has occurred if, in the Agent's reasonable judgment, the effect of any such attack, outbreak, escalation, declaration, act, calamity or emergency makes it impractical or inadvisable to proceed with the completion of the placement or the delivery of the Securities. Any termination of this Agreement pursuant to this Section 21 shall be without liability on the part of the Company or the Agent, except as otherwise provided in Sections 5(a), 7, 8 and 9 hereof. + + 43 + + + + + + + + If the foregoing is in accordance with the Agent's understanding of our agreement, kindly sign and return to the Company one of the counterparts hereof, whereupon it will become a binding agreement among the Transaction Entities, the Manager and the Agent in accordance with its terms. [Signature Page Follows] + + 44 + + + + + + + + Very truly yours, BLUEROCK RESIDENTIAL GROWTH REIT, INC. By: /s/ R. Ramin Kamfar Name: R. Ramin Kamfar Title: Chief Executive Officer BLUEROCK RESIDENTIAL HOLDINGS, L.P. By: Bluerock Residential Growth REIT, Inc. Its: General Partner By: /s/ R. Ramin Kamfar Name: R. Ramin Kamfar Title: Chief Executive Officer BRG MANAGER, LLC By: Bluerock Real Estate, L.L.C. Its: Sole Member By: /s/ R. Ramin Kamfar Name: R. Ramin Kamfar Title: Chief Executive Officer [Signature Page to Agreement] + + 45 + + + + + + + + The foregoing Agreement is hereby confirmed and accepted as of the date first above written. Acting on behalf of itself as the Agent COMPASS POINT RESEARCH & TRADING, LLC By: /s/ Christopher A. Nealon Name: Christopher A. NealonTitle: President and Chief Operating Officer [Signature Page to Agreement] + + 46 + + + + + + + + SCHEDULE A None \ No newline at end of file diff --git a/full_contract_txt/BNCMORTGAGEINC_05_17_1999-EX-10.4-LICENSING AND WEB SITE HOSTING AGREEMENT.txt b/full_contract_txt/BNCMORTGAGEINC_05_17_1999-EX-10.4-LICENSING AND WEB SITE HOSTING AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..7fb5fbc58443688a5e60c733895d278fc0a66c3d --- /dev/null +++ b/full_contract_txt/BNCMORTGAGEINC_05_17_1999-EX-10.4-LICENSING AND WEB SITE HOSTING AGREEMENT.txt @@ -0,0 +1,241 @@ +1 + + EXHIBIT 10.4 + + LICENSING AND WEB SITE HOSTING AGREEMENT + + This Agreement is entered into on February 26, 1999, (the "Effective Date") by and between Mortgage Logic.com, Inc. ("Client"), with an address at Two Venture Plaza, 2 Venture, Irvine, California 92618 and TrueLink, Inc. ("TrueLink"), with an address at 3026 South Higuera, San Luis Obispo, California 93401. + + WHEREAS, TrueLink is in the business of (i) developing and licensing interface software (the "Interface") to third parties; (ii) providing access to credit bureau information to third parties through the Interface; and (iii) providing certain technical support and programming customization services to users of the Interface substantially similar to those specifically enumerated herein (collectively "Support Services"); and + + WHEREAS, TrueLink is licensed (or will be licensed) to provide access through the Interface to automated underwriting systems made available by certain third party investors or mortgage insurers (each such system is referred to hereafter as a "System", and all systems for which TrueLink is licensed to provide access are collectively referred to hereafter as the "Systems"); and + + WHEREAS, Client desires to obtain access (for itself and for certain of Client's correspondent broker customers) for communications with, and use of, the Interface, including credit bureau information, by transmitting information and data to and receiving information and data from the Interface and such Support Services as Client may from time-to-time specify; and + + WHEREAS, TrueLink is willing to provide to Client and to certain of Client's correspondent broker customers access to the Interface and various Support Services, subject to the terms and conditions of this Agreement. + + NOW, THEREFORE, in consideration of the mutual promises herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: + + 1. DEFINITIONS. + + a. Browser. The term "Browser" refers to a program used to provide interactive, graphical access to sites on the World Wide Web. + + b. Client Content. The term "Client Content" means all text, words, names, likenesses, trademarks, logos, artwork, graphics, video, audio, HTML, JAVA or other coding, domain names, image maps, links, software applications, or other content that appear on, or are provided to TrueLink by or on behalf of Client for uploading to or downloading from, the Web Site. + + c. Client's Intellectual Property. The term "Client Intellectual Property" means, client's designs, customer lists, formulas, procedures, methods, apparatus, ideas, creations, improvements, works of authorship, materials, processes, inventions, techniques, data, know-how, + +2 + +show-how, algorithms, programs, subroutines, tools, patents and patentable materials, copyrights and copyrightable materials and trade secrets. + + d. Credit Data. The term "Credit Data" means data of any borrower or loan applicant of Client or BNC Mortgage, Inc., or any of their affiliates, or any of their customers or brokers, provided that such data (i) consists only of raw credit data regarding the creditworthiness of such a borrower or loan applicant provided by third party credit repositories which currently consists of TransUnion Credit Information Services, Equifax Credit Information Services or Experien Information Services that is submitted, transmitted or in any way sent through the Interface and is the later of (I) the later of 31 days old from that date of receipt thereof by TrueLink or that date on which such data is "archived" pursuant to TrueLink's internal operating procedures consistently applied or (II) such date as may be agreed to between Client and Keith Guy provided that the parties acknowledge that such parties will discuss a date on which such data is similarly "archived" third party credit repositories as referred in this subparagraph (d) and (ii) is not combined, compared with or against, integrated or presented in any way with any Client Proprietary Information. + + e. Credit Reporting Agreement. The term "Credit Reporting Agreement" means the various agreements between TrueLink and each of TransUnion Credit Information Services, Experien Information Services and Equifax Credit Information Services pursuant to which TrueLink is provided raw credit data from time to time. + + f. TrueLink's Intellectual Property. The term "TrueLink Intellectual Property" means any or its intellectual property associated with the Interface, including, without limitation, designs, formulas, procedures, methods, apparatus, ideas, creations, improvements, works of authorship, materials, processes, inventions, techniques, data, know-how, show-how, algorithms, programs, subroutines, tools, patents and patentable materials, copyrights and copyrightable materials and trade secrets. + + + + + + g. Internet. The term "Internet" refers to the global network of computers using the TCP/IP protocol for communication. + + h. Web Site. The term "Web Site" refers to the World Wide Web site on which Client Content will appear. + + i. System Agreements. The term "System Agreements" means any agreement pursuant to which TrueLink is licensed to provide access to a System. + + 2. LICENSE. + + a. Grant. TrueLink hereby grants to Client a non-exclusive license to use the Interface in the ordinary course of its business of the origination, underwriting, processing and funding of consumer finance receivables in accordance with this Agreement. Notwithstanding the foregoing, Client is not obligated to utilize the License and is free to acquire, develop, license or otherwise utilize any other hardware, software system, design, formula, procedure or trade secret to provide software and services similar to the ones provided by TrueLink hereunder, so long as such + + -2- 3 + +software or services do not infringe upon any of TrueLink's Intellectual Property. Nothing in the foregoing sentence is meant to affect in any way Client's confidentiality obligations pursuant to Section 10 herein. + + b. Scope. The license granted to Client pursuant to section 2(a) consists of the following rights: + + i. Use and execution of the Interface on a compatible software platform (as such compatibility specifications may be issued by TrueLink from time to time); and + + ii. Access to the Interface from multiple computer located at those sites listed on Exhibit "A." Client may amend Exhibit "A" by giving TrueLink written notice of the new sites. + + c. Term. The license shall last until this Agreement is terminated in accordance with section 12. + + d. Ownership. Notwithstanding the license granted under section 2.1, TrueLink retains all of its ownership and license rights in the Interface. + + 3. HOSTING SERVICES. TrueLink will provide the following services to Client (the "Hosting Services"): + + a. Storage. ___ megabytes (MB) of disk space on TrueLink's servers will be used for storage of the Web Site and any data files associated with the Web Site. + + b. Response Time. TrueLink agrees to use reasonable commercial efforts, consistent with efforts provided to its other Clients to ensure reasonable response times for users accessing the Web Site. Reasonable response times shall be measured as follows: at a mutually agreed to time Client will conduct three tests of the time that it takes to load the home page of the Web Site from an IBM compatible computer (with a 16550 UART chip and an Intel 80586 300 MHZ processor running Windows 98 or NT and Microsoft Internet Explorer (with the cache turned off) accessing the Web Site over a phone line using a 28.8K baud modem (the results of these tests will be reported to TrueLink upon completion); reasonable response times means that at all times the time it takes to load the home page of the Web Site using a properly configured IBM compatible computer (as set forth above) accessing the Web Site over a phone line using a 28.8K baud modem shall in no event exceed twice the average of the three test response times. + + c. Bandwidth. ___ MB of monthly bandwidth (data transfer). In the event that the response time is not reasonable as determined under section 3.1 hereof, upon written notice from Client, TrueLink will, within a reasonable period of time, use reasonable commercial efforts to increase the bandwidth as necessary to make the response time reasonable. + + d. Availability. The Web Site will be available Client's to Internet users approximately 24 hours a day, seven days a week, normal maintenance and unforeseen hardware or communications problems excepted. To minimize server downtime during peak usage periods, + + -3- 4 + +TrueLink will take all reasonable actions to attempt to schedule routine maintenance between the hours of 8:00 p.m. to 5:00 a.m. pacific standard time. + + e. Access. Client will have access to Interface usage statistics and raw log files in real time via the Interface. + + f. Backups. TrueLink will backup the Interface and all data files associated with it at least once each day and will store the backup materials in a safe, secure location, suitable for magnetic media, and not at + + + + + +the same location as TrueLink's server. + + g. Internet Connection. TrueLink will maintain redundant connections to the Internet on diverse backbones. + + h. Domain Names. TrueLink shall provide assistance to Client in securing one or more domain names, sub-domain names or URL's associated therewith; provided that prior to TrueLink providing such assistance, Client shall engage in an appropriate trademark search reasonably satisfactory to TrueLink in order to establish that no domain name proposed by Client shall infringe upon the trademark, service mark, name, or logo of any third party. TrueLink will not be responsible for, or have any liability in connection with, the operation of the Web Site with respect to online commercial transactions, or for the transmission accuracy or completeness of any data or information to or from the Web Site or through the Interface by Client or Client's customers. + + i. Credit Bureau Information. TrueLink shall transmit such credit data to Client through the Interface as may be permitted under the Credit Repository Agreements and applicable law, each as in affect from time to tome, and in accordance with the certain Credit Bureau Agreement between TrueLink and Client dated of even date herewith. Subject to the foregoing, Client shall order TrueLink a credit report on each borrower for which an underwriting approval is requested through a System using the Interface. TrueLink makes no representation or warranty, and shall have no liability for the truth or completeness of any data so transmitted. + + 4. SUPPORT SERVICES. For a period of not less than ____ months, TrueLink will make available to Client the services of at least one programmer identified by TrueLink and reasonably acceptable to Client to provide such Support Services as Client may reasonably request to TrueLink in writing for purposes of permitting Client to use the Interface in accordance with the License granted under Section 2 hereof and the other terms and conditions of this Agreement. + + 5. COMPENSATION. + + a. Client will pay TrueLink's fees for requested Hosting Services and Support Services pursuant to the schedule of charges set forth on Exhibits "A" and "B" attached hereto, (but not less than $____ per month for the Hosting Services and $____ per month for Support Services). For any other services agreed to between the parties, Client will pay TrueLink fees which will be determined by the parties and will vary depending on the services utilized. TrueLink will provide Client with an invoice for the requested Hosting Services and Support Services and any other agreed-upon services on a monthly basis. Invoices will be paid within 15 days of receipt. + + -4- 5 + + 6. DOCUMENTATION AND DISPUTES. Client will be provided upon request with documentation supporting the amount charged (other than the minimum monthly fees listed in Section 4) and will be entitled to contest any charge (other than the minimum monthly fees listed in Section 4), provided that Client timely pays all contested amounts. TrueLink agrees that the costs for any Hosting Services will not increase for a period of one year from the date of this Agreement and that rates charged for Hosting Services will not exceed that charged by TrueLink to any other party. + + 7. UNSOLICITED COMMERCIAL E-MAIL. + + Client shall not engage in the practice commonly known as "spamming" pursuant to the rights granted hereunder. This includes but is not limited to, the following: posting an article or advertisement to more than ten (10) news groups, forums, e-mail mailings lists or other similar groups or lists; or sending unsolicited mass e-mailings to more than twenty-five (25) e-mail users, if such unsolicited e-mailings provoke complaint. + + 8. COVENANTS AND WARRANTIES OF CLIENT + + a. Compliance with Laws. Client will comply in all material respects with applicable state and federal consumer credit reporting, privacy and similar laws in connection with its use of the Interface. + + b. Notification. Client shall not represent that loan underwriting decisions related to loans originated by using the Interface are in any way made by TrueLink in communicating all loan approvals or denials in accordance with the foregoing. + + c. Limitation on Access. Client will use reasonable commercial efforts consistent with the protection of Client Proprietary Information to restrict access to the Interface to its officers, employees, and agents as may be approved by Client. + + d. Use of Credit Data during the term of this Agreement. Client hereby grants to TrueLink the nonexclusive worldwide right and license to use, distribute, disseminate, license, resell, exploit, upload, display, copy and store Credit Data subject to the limitations set forth in and in accordance with the Non-Competition Agreement. + + e. Representations of Client. Client represents and warrants: (a) Client is the owner, valid licensee, or authorized user of the Client Content, (b) to Client's actual knowledge the use of the Client Content shall not infringe the copyright, trade secret, trademark or other proprietary or intellectual property right of any third party, or constitute a definition, + + + + + +invasion of privacy, or violation of any right of publicity or other third party right, (c) the Client Content complies in all material respects with applicable federal and state laws regarding posting or transmitting data which is threatening, obscene, indecent, defamatory or in violation of report control was, and (d) to Client's actual knowledge Client Content shall be free at the time provided to TrueLink from viruses, worms, Trojan horses, and any other malicious code. + + -5- 6 + + f. Spamming. TrueLink reserves the right at any time to implement technical mechanisms to prevent Client engaging in illegal or obscene activity or in "spamming," TrueLink reserves all legal and equitable rights in enforcing this policy. + + 9. TRUELINK WARRANTIES. TrueLink represents and warrants that the Interface and all related software (i) is designed to be used before, on and after January l, 2000; (ii) will operate before, on and after January 1, 2000, in the processing of dates, including without limitation calculating, comparing, indexing and sequencing; and (iii) will successfully transition from December 31, 1999, to January 1, 2000, without human intervention. At Client's request, TrueLink will provide sufficient evidence to demonstrate adequate testing of the Interface and all related software to meet the foregoing requirements. Client will provide reasonable access to TrueLink make any repairs necessary to comply with this section and make any upgrades specified by TrueLink to so comply, all at TrueLink's sole cost and expense, to the extent such upgrades were not previously requested by Client pursuant to previously requested Hosting Services or Support Services as set forth herein. + + 10. CONFIDENTIALITY. + + a. Client acknowledges its responsibility to preserve the confidentiality of certain technology, information, and documentation embedded in the Interface and agrees to respect the confidential nature of the Interface. Notwithstanding anything to the contrary contained in this Agreement, it is understood and agreed that Client's confidentiality obligations relating to any System and any data, documentation, or other output from such System shall include those specified in any agreements between Client and the licensor of the System. + + b. TrueLink acknowledges its responsibilities to preserve the confidentiality of all results of the Support Services, Client's Intellectual Property, and subject to Section 8(d) herein Client Confidential Information. + + c. The parties hereto recognize that certain of the information and documentation previously provided or that may in the future be provided by a party to the other related to the matters covered by this Agreement includes privileged, confidential and proprietary information belonging to such party (a party's "Proprietary Information") which, if disclosed, could result in substantial and irreparable harm to such party. For information and documentation to qualify as a party's Proprietary Information, such information must either be marked "Confidential" or otherwise identified in writing as confidential at or prior to the time of its delivery to the other hereunder. Notwithstanding the foregoing, the following matters will automatically be deemed TrueLink Proprietary Information, whether or not specifically marked or designated as such: (i) any implementation information or user's guides for the Interface, (ii) any advance releases of TrueLink promotional material, (iii) information concerning TrueLink's business plans and strategies, and (iv) TrueLink's customer list. Notwithstanding the foregoing, the following matters will be automatically deemed Client Proprietary Information: Client's Intellectual Property, all results of the Hosting and Support Services, including any information or materials of any type or nature, tangible or intangible, disclosed by Client as a result of the TrueLink's relationship with Client relating to the business, products or technology or potential business, products or technology of Client, business plans, financial information, borrower and loan data technical specifications, design concepts, + + -6- 7 technical information, customer lists, pricing information, marketing plans and other similar information pertaining to Client. Each agrees to treat all of the other Proprietary Information and all materials as strictly confidential, except to the extent otherwise agreed by the other in writing. Except to the extent otherwise agreed by both parties in writing, party further agrees to treat all of the other Proprietary Information and all materials which it prepares using or based on the other's Proprietary information or any portion thereof (the "Derivative Documentation") as strictly confidential, including, without limitation, any notes made and all reports prepared in connection with this Agreement. + + d. Notwithstanding the foregoing, the restrictions on disclosure and other obligations set forth above with respect to Proprietary Information or Derivative Documentation shall not apply when, and to the extent that such Proprietary Information or Derivative Documentation: (i) is or becomes generally available to the public through no fault of the receiving party; (ii) was previously known to the receiving party free of any obligation to keep it confidential; (iii) is subsequently disclosed to the receiving party by a third party who may transfer and disclose such information without restriction and free of any obligation to keep it confidential; (iv) is independently developed by the receiving party or a third party without reference to or any use of the + + + + + +disclosing party's proprietary information; or (v) is required to be disclosed by the receiving party as a matter of law, provided that the receiving party uses all reasonable efforts to provide the disclosing party with at least ten days' prior notice of such disclosure. + + 11. STANDARD OF CARE. TrueLink shall perform the Hosting and Support Services and any other agreed-upon services for Client with the same degree of care, skill and prudence customarily exercised by it for its own operations. + + 12. INDEMNITY. + + a. Client shall indemnify and hold TrueLink, its affiliates, directors, officers, employees, agents and licensors harmless from and against all claims, actions, expenses, losses, and liabilities, including reasonable attorneys' fees, arising from or relating to the following: (i) any claim arising out of any breach by Client of this Agreement, (ii) any claim or demand resulting from any act or omission by Client or any customer of Client granted access to the Interface by Client which constitutes a breach of or default by TrueLink under any System Agreement or Credit Repository Agreement, which breach or default has either not been cured or cannot be cured within the applicable cure period and the consequences of which is that TrueLink will lose material rights it has pursuant to said Agreements or a violation of any state or federal law, rule or regulation (iii) any claim arising out of or relating to the Web Site or Client Content (including, but not limited to, any claim resulting from any content posted to the Web Site by Client or Client's employees, agent or any customer of Client granted access to the Interface by Client), without regard to any knowledge limitation or qualification that may be contained in this Agreement, and (iv) injury or damage to person or property caused by a product, service, or information, whether or not defective, that is sold, distributed or transmitted from the Web Site. + + b. TrueLink shall indemnify and hold Client harmless, its affiliates, directors, officers, employees, agents and licensors harmless from and against all claims, actions, expenses, losses, and liabilities, including reasonable attorneys' fees, arising from or relating to any + + -7- 8 + +claim arising out of any breach by TrueLink of this Agreement or any failure by TrueLink in the performance of any of its obligations or agreements hereunder. + + EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, TRUELINK DISCLAIMS ANY AND ALL EXPENSES WARRANTIES, WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE AND IMPLIED WARRANTIES OF MERCHANTABILITY OR FOR ANY MATTER RELATING TO THE ACCURACY OR COMPLETENESS, OR TIMING OF TRANSMISSION OF ANY DATA SUBMITTED THROUGH THE INTERFACE OR TO OR FROM THE WEB SITE. + + IN NO EVENT SHALL TRUELINK'S LIABILITY FOR ANY MATTER ARISING UNDER OR RELATED TO SECTION 3, 4, 7 AND 11 THIS AGREEMENT (OTHER THAN DUE TO A BREACH RESULTING FROM TRUELINK'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT) EXCEED THE TOTAL COMPENSATION PAID FOR HOSTING AND SUPPORT SERVICES OVER THE IMMEDIATELY PRECEDING 12 MONTHS PERIOD. + + 13. TERM OF AGREEMENT. This Agreement will take effect on the Effective Date and remain in effect for a period of 1 year; provided, that Sections 2 and 3 level shall terminate promptly upon (a) any action or omission by Client or any of its customers which constitutes a breach of or default by TrueLink under any System Agreement or Credit Repository Agreement, which breach or default has either not been cured or cannot be cured within the applicable cure period and the consequences of which is that TrueLink will lose material rights it had pursuant to said Agreements or (b) any violations or breach by Client of Sections 8a - 8c. This Agreement shall renew automatically thereafter for successive one year periods until terminated pursuant to Section 12 herein or unless either Client or TrueLink deliver to the other written notice of intent not to renew no later than thirty (30) days prior to the end of said year. If Client decides to discontinue its Hosting Service, Client is responsible for arranging for a new name server within 30 days. In case of discontinued Service, Client shall retain full ownership of all domains associated with Client and Client Content. If Client decides to discontinue Hosting Service, Client is responsible for arranging for a new hosting environment within 60 days. + + 14. TERMINATION. Subject to Section 4 hereof, TrueLink will continue to provide the requested Hosting Services and Support Services until the last day of the month following the month in which Client provides TrueLink with a written notice of its election to terminate this Agreement. + + 15. ASSIGNMENT OR TRANSFER. Neither party shall assign or transfer any of its rights under this Agreement without the prior written approval of the other party, except no such approval shall be required for an assignment to a financially responsible affiliate. + + 16. MODIFICATIONS. This Agreement may be amended at any time and from time to time, but any amendment must be in writing and signed by the party to be charged. + + 17. WAIVER. No waiver of any provision of this Agreement will be valid unless it is in writing and signed by the party against whom it is sought to be enforced. No waiver at any time of any provision of this Agreement will be deemed a waiver of any other provision of this + + + + + + -8- 9 Agreement at that time or a waiver of that or any other provision of this Agreement at any other time. + + 18. UNDEFINED TERMS. Terms that are not specifically defined in this Agreement are used as set forth in the California Uniform Commercial Code. + + 19. POWER AND AUTHORITY. Each party represents to the other that it has all necessary power and authority to enter into and perform its obligations under this Agreement. The individuals executing this Agreement on behalf of each party represent that they have authority to do so. + + 20. NOTICES. All notices required or permitted to be sent under this Agreement shall be in writing and shall be sent to the parties at the addresses set forth in the preamble of this Agreement, or to such other addresses and to such other individuals of which either party may notify the other in a notice which complies with the provisions of this subsection. All notices will be deemed given (i) when delivered by hand, (ii) one (l) day after delivery to a reputable overnight carrier, or (iii) three (3) days after placement in first-class mail, postage prepaid, return receipt requested. + + 21. CUMULATIVE RIGHTS. The rights and remedies of the parties hereunder are cumulative and are in addition to, and not in lieu of, all rights and remedies available at law and in equity. + + 22. CAPTIONS. The captions in this Agreement are included for convenience of reference only and will not be construed to define or limit any of the provisions contained herein. + + 23. JOINT DRAFTING AND NEUTRAL CONSTRUCTION. This Agreement is a negotiated document and shall be deemed to have been drafted jointly by the Parties, and no rule of construction or interpretation shall apply against any particular party based on a contention that the Agreement was drafted by one of the Parties including, but not limited to California Civil Code section 1654, the provisions of which are hereby waived. This Agreement shall be construed and interpreted in a neutral manner. + + 24. VALIDITY OF AGREEMENT. If any term, provision, covenant, or condition of this Agreement is held by a court of competent jurisdiction to be invalid or unenforceable, the rest of the Agreement shall remain in full force and effect and shall in no way be affected or invalidated. The provisions of Sections 1 and 5 through 30 this Agreement will survive the expiration or termination of this Agreement. + + 25. ENTIRE AGREEMENT. This Agreement, including all Exhibits, contains the entire agreement of the Parties relating to the rights granted and obligations assumed herein. Any oral representations or modifications concerning this instrument shall be of no force or effect unless contained in a subsequent written modification signed by the party to be charged. + + -9- 10 + + 26. APPLICABLE LAW. This Agreement shall be governed, construed and interpreted in accordance with the laws of the State of California (without respect to principles of conflicts of law). + + 27. VENUE. Any and all disputes between the parties that cannot be settled by mutual agreement shall be resolved solely and exclusively in the state or federal courts located within San Luis Obispo County, California, and each party consents to the jurisdiction of such courts and irrevocably waives any objections thereto, including without limitation, on the basis of improper venue or forum non conveniens. + + 28. ATTORNEY FEES AND COSTS. In any action brought under this Agreement, the prevailing party shall be entitled to recover its actual costs and attorney fees pursuant to California Civil Code section 1717 and all other litigation costs, including expert witness fees, and all actual attorney fees and litigation costs incurred in connection with the enforcement of a judgment arising from such action or proceeding. The provisions of the preceding sentence shall be severable from the provisions of this Agreement and shall survive the entry of any such judgment. + + 29. NO PARTNERSHIP OR JOINT VENTURE. The parties hereto understand and agree that TrueLink is furnishing its services and the Interface to Client on its own behalf and not on behalf of the System providers. Client understands and agrees that authorization to use the System must be obtained from the System providers. In no event will TrueLink offer the Systems without such authorization from the System providers. Nothing contained herein will be construed to create any association, partnership, joint venture or any agency relationship between the parties hereto. + + 30. FORCE MAJEURE. TrueLink will be excused from delays in performing or from failing to perform its obligations under this Agreement to the extent the delays or failures result from causes beyond the reasonable control or TrueLink. However, to be excused from delay or failure to perform, TrueLink must act diligently to remedy the cause of the delay or failure. + +Dated: TRUELINK, INC. + + + + + + -------------------------- + + By ------------------------------------- Title: + +Dated: MORTGAGE LOGIC.COM, INC. -------------------------- + + By ------------------------------------- Title: + + -10- 11 + + Exhibit "A" + + Charges for Hosting Services + + [To be agreed to by and between TrueLink and Client prior to the Closing] + + -11- 12 + + Exhibit "B" + + Charges for Support Services + + [To be agreed to by and between TrueLink and client prior to the Closing] + + -12- \ No newline at end of file diff --git a/full_contract_txt/BNLFINANCIALCORP_03_30_2007-EX-10.8-OUTSOURCING AGREEMENT.txt b/full_contract_txt/BNLFINANCIALCORP_03_30_2007-EX-10.8-OUTSOURCING AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..c0a0213ff552aaac56c0c4540e1645528974362d --- /dev/null +++ b/full_contract_txt/BNLFINANCIALCORP_03_30_2007-EX-10.8-OUTSOURCING AGREEMENT.txt @@ -0,0 +1,167 @@ +VIRTUAL ITEM PROCESSING SYSTEMS, INC. 2525 Northwest Expressway, #105 Oklahoma City, Oklahoma 73112 + +OUTSOURCING AGREEMENT BETWEEN VIRTUAL ITEM PROCESSING SYSTEMS, INC. And BROKERS NATIONAL LIFE ASSURANCE COMPANY + +E - 4 + + + + + + + +OUTSOURCING AGREEMENT This Outsourcing Agreement (" Agreement") is executed as of this 1 st day of May 2006, by and between Virtual Item Processing Systems, Inc. ("VIP"), with its principal place of office at 2525 NW Expressway, Suite 105 Oklahoma City, Oklahoma 73112, and Brokers National Life Assurance Company ("BNL"), with its principal place of office at 7010 Hwy. 71 W., Suite 100, Austin, Texas 78735. WHEREAS, VIP is engaged in the business of providing Electronic Data Processing services ("EDP Services") and related consultation and services to insurance companies pursuant to computer software systems developed and owned by VIP , (the "VIP System"); WHEREAS, BNL is an insurance company domiciled in the State of Arkansas and licensed to do business in numerous additional states; and WHEREAS, VIP desires to provide EDP Services to BNL; and WHEREAS, BNL desires to obtain EDP services from VIP for the processing and administration of its insurance policies; NOW, THEREFORE, in consideration of the above premises and in consideration of other good and valuable consideration, the receipt and sufficiency is hereby acknowledged, the parties agree as follows: 1. PURCHASE OF EQUIPMENT. BNL at its expense shall obtain, install, maintain and upgrade as necessary any and all hardware, software, data and telephone lines, other communications equipment and any other equipment (hereinafter collectively referred to as the "Equipment") which it determines is necessary to allow it to use and access the VIP System pursuant to the terms of this Agreement. Such Equipment shall be fully compatible with the VIP System. VIP will provide BNL such information as is reasonably necessary to allow BNL to acquire all such Equipment which meets the requirements of this paragraph. If requested by BNL and at BNL's expense, VIP shall inspect all such Equipment and acknowledge its compatibility in writing prior to its use with the VIP System. 2. VIP's EQUIPMENT AND SERVICES. A. During the term of this Agreement, VIP shall provide BNL such access as necessary to the VIP System to allow BNL to attach one data communication line and up to seventy (70) addressable data communications devices to said VIP System. Should BNL desire to attach additional communication lines or additional communication devices to the VIP System, BNL shall pay to VIP the additional fees set forth in paragraph 5(F) of this Agreement. B. VIP, at its sole discretion and expense, may, but is not obligated to, make appropriate enhancements to the VIP System. Any such enhancements shall be deemed to be included in the EDP Services and VIP System to be provided to BNL, whether developed by VIP before or during the time when services are to be provided by VIP pursuant to this Agreement. During the term of this Agreement, VIP shall be responsible at its expense for the proper maintenance and documentation of the VIP System. 3 .SCHEDULED AND UNSCHEDULED DOWN TIME. BNL acknowledges that there will be scheduled downtime for the routine preventive maintenance of VIP's System performed by either VIP or its vendors. VIP shall give BNL reasonable advance notice of all such scheduled downtime. BNL further acknowledges that there will also be unscheduled down-time that might occur as a result of electrical power failures and equipment failures and other acts outside of the control of VIP as contemplated in paragraph 16(J). In the event that any such down-time extends for more than two (2) consecutive working days, VIP, at its expense, will make available to BNL access to a backup facility designated by VIP for the continued processing of BNL's business. To ensure that a backup facility will be available in + +E - 5 + + + + + + + + case of such a failure, VIP will maintain disaster and/or business interruption insurance adequate to establish alternate site processing, as provided for in paragraph 12(A) of this Agreement. 4. INCLUDED SERVICES IN THE VIP SYSTEM. It is agreed and understood by BNL that: A. It has reviewed and inspected the VIP System existing as of the Effective Date of this Agreement, which VIP System includes (i) a New Business System, (ii) a Policy Administration System, (iii) an Agency Administration System, (iv) a Financial Administration System. (v) a Claims System, (vi) a Vendor Provider System, (vii) a Transaction Tracking System and (viii) a Mail Tracking System; B. Such VIP System as identified in paragraph 4(A) is adequate to meet the needs of BNL; C. VIP shall provide EDP Services to BNL for such Initial Policies and policies identical thereto and renewals thereof by the use of such VIP System existing as of the Effective Date of this Agreement, except as such VIP System may be modified from time to time by VIP , at the discretion of VIP; D. BNL has reviewed the security system (Security System") included in the VIP System existing as of the Effective Date of this Agreement; E. BNL acknowledges and agrees that such Security System is adequate to protect the confidential information and data of BNL processed by the VIP System; F. BNL, throughout the term of this Agreement, shall be solely responsible for choosing, implementing and utilizing any or all of such of the security measures and protections offered by said Security System for the use of or access to the VIP System by any of its officers, directors, shareholders, employees and agents; G. VIP shall not have any duty to either monitor or enforce such security measures and protections chosen, implemented or utilized by BNL; H. + +E - 6 + + + + + + + +BNL shall be solely responsible for any acts or omissions of any of its officers, directors, shareholders, employees and agents; I. Notwithstanding anything to the contrary in this Agreement, VIP at any time during the term of this Agreement may change the platform upon which the VIP System is operated and through which the EDP Services are provided to BNL by VIP under this Agreement. Before VIP shall make such platform change VIP shall give BNL prior reasonable written notice of such change, and VIP's warranties under this Agreement shall continue notwithstanding such change and VIP agrees to pay any cost created for or imposed on BNL for equipment, training or similar matters arising from such change. 5. PAYMENTS TO VIP. A. For EDP Services provided pursuant to this Agreement, BNL will pay to VIP the charges set forth in the Payment Schedule attached hereto as Schedule B: provided however and notwithstanding anything to the contrary herein. The minimum monthly fee shall not be less than five thousand dollars ($5,000) per month (as applicable, "Minimum Fee"). B. For any additional VIP Services provided hereunder, BNL will pay to VIP the charges set charges set forth in the Payment Schedule attached hereto as Schedule A. C. The fees due hereunder are subject to the following provisions: 1. The fee for each new policy submitted into the VIP System is set forth in Schedule B. 2. VIP will process all policies that have thirteen (13) or more months expired from their original policy date at the annual rates set forth in Schedule B. with a separate fee for each renewal base policy and each rider, for each plan, prorated to the actual number of months each policy is represented to be in force on the VIP System. Such representation of "policy status" includes the "grace period" and "Late payment offer" that each policy may enjoy and in which case exceeds a time frame not bound by each policy's actual paid for period. The payment amount for each group of policies in a rate category will be calculated by determining the actual number of policies and riders in force that are included in the rate category, as set forth in Schedule B at the end of each calendar month and then multiplying the number of policies by the base policy renewal amount and the number of riders by the rider renewal amount then adding the totals together and dividing the resulting amount by twelve (12). The amounts calculated for all rate categories are added together and this amount is the fee payable in advance at the beginning of the month. 3. VIP shall not be obligated to process any amended policies or new products that + +E - 7 + + + + + + + +are written or acquired by BNL unless and until the parties hereto have mutually executed a written addendum to this Agreement modifying Schedule B to include the fees for any such products. D. Any sum due VIP hereunder for which a time for payment is not otherwise specified will be due and payable within ten (10) days after the date of the postmark for an invoice therefor from VIP. If BNL fails to pay any amount due within ten (10) days from the date of the postmark for the invoice, late charges of 1-1/2% per month, or the maximum amount allowable by law, whichever is less, shall also become payable by BNL to VIP. E. In addition to the communication line and devices which BNL is authorized to attach to the VIP System pursuant to paragraph 2 of this Agreement, BNL may, for the monthly fee(s) hereinafter set forth, attach additional communication lines or the following devices to the VIP System. The monthly fee(s) for such additional lines) or devices is as follows: 1. each communication line and adapter $200, 2. each visual station whether CRT, PC or similar device $25, 3. each addressable printer under 299 lines per minute ("LPM") $25 4. each addressable printer over 299 LPM $150. F. There are certain other expenses which are directly related to VIP's performance of this Agreement that are directly billable by VIP and payable by BNL. The purpose and intent of this provision is not to describe all contemplated charges covered by this provision, but rather to identify some of the charges that may fall into this category . Such charges include but are not limited to the following: 1. Cost of all business forms, continuous or non-continuous used by BNL; 2. All telephone calls initiated on behalf of BNL business and operations; 3. All travel, food and lodging expenses incurred by VIP personnel related to the performance of this Agreement, subject to BNL's prior written approval; 4. All postage and shipping expenses for materials used by BNL; 5. All expenses incurred for computer output micro-film "COM" which is contracted by VIP with a service bureau independent of VIP , subject to BNL' s prior written approval; 6. Any other charges directly related to BNL ' use or benefit of the VIP System pursuant to this Agreement is subject to BNL ' prior written approval. G. All sums due under this Agreement are payable in U.S. dollars. 6. PROPRIETARY AND RELATED RIGHTS. + +A. CLIENT DATA. Any original documents or files provided to VIP hereunder by BNL ("BNL Data") are and shall remain BNL's property and, upon the termination of this Agreement for any reason, such BNL Data will be returned to BNL by VIP, subject to + +E - 8 + + + + + + + +the terms hereof. Subject to paragraphs 4(F) and (G), VIP agrees to make the same effort to safeguard such BNL Data as it does in protecting its own proprietary information. BNL Data will not be utilized by VIP for any purpose other than those purposes related to rendering EDP Services to BNL under this Agreement, nor will BNL Data or any part thereof be disclosed to third parties by VIP , its employees or agents except for purposes related to VIP's rendering ofEDP Services to BNL under this Agreement or as required by law, regulation, or order of a court or regulatory agency or other authority having jurisdiction thereover. Notwithstanding the foregoing, VIP shall have the right to retain in its possession all work papers and files prepared by it in performance of EDP Services hereunder which may include necessary copies of BNL Data. VIP shall have access to BNL Data, at reasonable times, during the term of this Agreement and thereafter for purposes related to VIP's 'rendering of EDP Services to BNL pursuant to this Agreement, or as required by law, regulation or order of a court or regulatory agency or other authority having jurisdiction thereover. Notwithstanding the foregoing, the confidentiality obligations set forth in this paragraph will not apply to any information which (i) is or becomes publicly available without breach of this Agreement, (ii) is independently developed by VIP outside the scope of this Agreement and without reference to the confidential information received under this Agreement, or (iii) is rightfully obtained by VIP from third parties which are not obligated to protect its confidentiality. 7. TERMINATION FOR CAUSE. This Agreement may be terminated by the non- breaching party upon any of the following events: A. In the event that BNL fails to pay any sums of money due to VIP hereunder and does not cure such default within thirty (30) days after receipt of written notice of such nonpayment from VIP , provided that if BNL notifies VIP in writing that BNL disputes a billing and BNL pays any undisputed portion of such billing VIP shall not institute formal proceedings by arbitration or judicial review or terminate this Agreement with respect to such disputed billing until after VIP has afforded BNL an opportunity for a meeting to discuss such dispute. B. In the event that a party hereto breaches any of the material terms, covenants or conditions of this Agreement (other than a breach under paragraph (A) above) and fails to cure the same within thirty (30) days after receipt of written notice of such breach from the non-breaching party. C. In the event that a party hereto becomes or is declared insolvent or bankrupt, is the subject of any proceedings relating to its liquidation, insolvency or for the appointment of a receiver or similar officer for it, makes an assignment for the benefit of all or substantially all of its creditors, or enters into an agreement for the composition, extension, or readjustment of all or substantially all of its obligations or admits of its general inability to pay its debts as they become due. D. In the event of termination under this section, VIP will give BNL, at its request and + +E - 9 + + + + + + + +direction, such copies of BNL data maintained on the VIIP system in a format and in a manner as designated by BNL. BNL shall pay a fee to VIP for preparing such data. Such fee shall be $100 per hour for programming time and $150 per hour computer processing time. 8. INDEMNIFICATION. A. BNL agrees to indemnify, defend and hold VIP and its officers, directors, stockholders, employees, agents and representatives harmless from any and all claims, actions, damages, liabilities, costs and expenses reasonable attorneys' fees and expenses arising out of or relating to (i) any acts or omissions of BNL pertaining to the EDP Services, including without limitation any breach of this Agreement by BNL or (ii) any information provided by or on behalf of, or any instruction, approval or decision by, BNL pertaining to the EDP Services relied upon by VIP . B. VIP shall indemnify, defend and hold BNL and its officers, directors, stockholders, employees, agents and representatives harmless from any and all claims, actions, damages, liabilities, costs and expenses, including reasonable attorneys' fees and expenses, arising out of any third party claims of infringement of any United States patents, or a trade secret, or any copyright, trademark, service mark, trade name or similar proprietary rights alleged to have occurred related to VIP's providing of EDP Services pursuant to this Agreement or relating to the VIP System used in providing such EDP Services. C. Subject to the limitations set forth in paragraphs 9(E), 9(F) and 9(G) of this Agreement and not including the claims covered by paragraph 8(B) of this Agreement, VIP shall indemnify, defend and hold BNL and its officers, directors, stockholders, employees, agents and representatives harmless from any and all claims, actions, damages, liabilities, costs and expenses, including reasonable attorneys' fees and expenses, arising out of or relating to (i) any acts or omissions of VIP pertaining to the EDP Services, including without limitation any breach of this Agreement by VIP , or (ii) any information provided by or on behalf of, or any instruction, approval or decision by, VIP pertaining to the EDP Services relied upon by BNL. D. The provisions of this paragraph 8 shall survive the termination of this Agreement. 9. VIP REPRESENTATIONS AND WARRANTIES: DISCLAIMER: LIMITATIONS. In addition to the other obligations of VIP under this Agreement VIP represents, warrants and covenants to BNL both at the execution of this Agreement and at all times during the term of this Agreement that: A. VIP is and will remain duly organized and validly existing as an Oklahoma corporation (or another state) authorized to engage in the business of providing EDP Services to its customers; + +E - 10 + + + + + + + +B. VIP is not a party to or otherwise subject to any note, debenture, shareholder agreement or other contractual arrangement, Order, Judgment Decree or Adjudication which prohibits any act or conduct of VIP contemplated by this Agreement or which would cause VIP to be in violation of or default respect thereto; C. VIP owns all necessary rights and interests in and to the VIP System and related programs to fulfill its obligations under this Agreement. The VIP System does not infringe on any United States patent or any trade secret, copyright, trademark, service mark, trade name or similar third party proprietary right; and D. VIP warrants that all EDP Services shall be performed in a prompt and workmanlike manner. Furthermore, the VIP System contains no programming condition which will limit the VIP System's use after a period of time elapses (such as a fixed calendar limit) and thus thereafter prevent BNL ' s use of the VIP System without further maintenance. E. Except as set forth in paragraphs 9(a) through 9(d) inclusive of this agreement, with respect to its EDP services or other work provided under this agreement, VIP makes no warranties, express or implied, including, but not limited to, implied warranties of merchantability and fitness for a particular purpose except as set forth in paragraphs 9(a) through 9(d) inclusive of this agreement, VIP does not warrant that the services shall meet BNL's requirements or that the services shall be uninterrupted or error-free. F. Limitation of liability. VIP shall have no liability with respect to its obligations under this agreement or otherwise for consequential, exemplary, special, indirect, incidental or punitive damages even if it has been advised of the possibility of such damages in any event, other than claims covered by paragraph 8(b) or paragraph 6(a) of this agreement (which claims are excluded from this paragraph 9(f) limitation), the liability of VIP to BNL for any reason and upon any cause of action or claim in contract, tort or otherwise shall be limited to the amount paid by BNL to VIP in the twelve (12) month period prior to the accrual of the action or claim for the specific service which is the subject of the action or claim (or, if such accrual occurs during the first twelve (12) months of the initial term, then the liability shall be limited to the minimum fees payable by BNL to VIP during the first twelve (12) months of the initial term). except for the claims excluded by the preceding sentence, this limitation applies to all causes of action or claims in the aggregate including without limitation breach of contract, breach of warranty, negligence, strict liability, misrepresentation and other torts. BNL and VIP acknowledge and agree that the limitations and exclusions contained herein represent the parties' agreement as to the allocation of risk between the parties in connection with VIP's obligations under this agreement. the payments payable to VIP in connection herewith reflect this allocation of risk and the exclusion of consequential damages in this agreement. G. Notwithstanding anything to the contrary in this Agreement, VIP shall not be liable in + +E - 11 + +any manner to BNL for any costs, expenses, injury or damages of any kind or nature which are caused by any of the following: 1. The failure of computer hardware which are not covered by the standard warranties and indemnification's of such manufacturers; 2. Software designated and supplied by the computer hardware supplier; or by software designed and implemented by other parties at BNL' request for which the integrity of said software is BNL' sole responsibility; 3. Erroneous data input or otherwise provided by BNL and/or failure of BNL to monitor and for the failure of BNL to respond to the auditing controls of the system; 4. A breach by BNL of any of the terms, covenants, representations or conditions of this Agreement; 5. The failure by BNL to report to VIP in writing an error within a reasonable time after BNL discovers or reasonably should have discovered such error. 10. COVENANTS AND REPRESENTATIONS OF BNL. In addition to the other obligations of BNL under this Agreement BNL covenants and warrants to VIP both at the execution of this Agreement and at all times during the term of this Agreement that: A. It is and will remain a duly organized and validly existing corporation and insurance company under the laws of the State of Arkansas (or another state) and is otherwise authorized to do business in the State of Arkansas; B. It holds and will continue to hold all permits, licenses and other governmental authorization necessary for it to conduct its insurance business; and C. It is not a party to or otherwise subject to any note, debenture, shareholder agreement or other contractual arrangement, Order, Judgment, Decree of Adjudication which prohibits any act or conduct of BNL contemplated by this Agreement or which would cause it to be in violation of or default with respect thereto. BNL acknowledges that BNL, and not VIP, has the responsibility for compliance with the maintenance and environmental standards for the operation of the on-site user Equipment specified in paragraph 1. + + + + + +11. BNL LIMITATION OF LIABILITY. BNL shall have no liability with respect to its obligations under this agreement or otherwise for consequential, exemplary, special, indirect, incidental or punitive damages even if it has been advised of the possibility + +E - 12 + + + + + + + +of such damages. in any event, other than claims covered by the next sentence, the liability of BNL to VIP for any reason and upon any cause of action and claim in contract, tort or otherwise shall be limited to the amounts paid by BNL to VIP in the twelve (12) month period prior to the accrual of the action or claim for the specific service which is the subject of the action or claim (or, if such accrual occurs during the first twelve (12) months of the initial term, then the liability shall be limited to the minimum fees payable by BNL to VIP during the first twelve (12) months of the initial term) claims by VIP for the minimum fees and other fees and expenses owing by BNL under paragraphs 5, 15(a) and 15(c), or for a breach by BNL of VIP's proprietary rights as set forth in paragraph 13 are excluded from this paragraph II limitation except for the claims excluded by the preceding sentence, this limitation applies to all causes of action or claims in the aggregate including without limitation breach of contract, breach of warranty, negligence, strict liability, misrepresentation and other torts. VIP and BNL expressly acknowledge and agree that the limitations and exclusions contained herein represent the parties' agreement as to the allocation of risk between the parties in connection with BNL's obligations under this agreement the payments payable to VIP in connection herewith reflect this allocation of risk and the exclusion of consequential damages in this agreement. 12. VIP OBLIGATION. During the term of this Agreement, in addition to its other obligations set forth in this Agreement, VIP shall: A. Maintain property insurance in an amount sufficient to replace or reconstruct the hardware, software, data and facilities necessary for VIP to operate the VIP System and otherwise provide the EDP Services set forth in this Agreement and, upon written request, shall provide BNL with evidence of the coverage, including all applicable limits and conditions, and, upon written request, shall provide BNL with evidence of all renewals, cancellations, expirations or modifications of the coverage; B. Update on a daily basis, sets of back-up data files for the BNL Data in the VIP System at an off-site location and/or fire-proof safe that provides for its safety from destruction or theft. BNL will pay its prorata share based upon the number of the total users of the VIP System of the cost of storage and/or transportation of back-up data files to and from the storage facility; C. At BNL' s option and sole expense, micro-film, all reports or other records as so designated by BNL and store the same in a safe facility on or off the operational location of VIP; D. Except in instances beyond VIP's reasonable control under paragraph 16(J) or as provided in paragraph 3, ensure the availability of the VIP system for BNL ' use at least during the hours of7:00 a.m. through 5:00 p.m. (central time) each day Monday through Friday. 13. OWNERSHIP OF THE VIP SYSTEM. The VIP System and related programs + +E - 13 + + + + + + + +(including software in connection herewith), are and shall at all times remain the sole and exclusive property of VIP. During the term of this Agreement or any extension thereof, BNL shall have a non-exclusive license to use the VIP System on-line as designated by VIP. BNL shall not use the VIP System except as authorized by this Agreement Upon the expiration or earlier termination of this Agreement, neither BNL nor any third party shall have any further right to use the VIP System after the retrieval of the BNL data pursuant to paragraph 6(A) of this Agreement. 14. ADDITIONAL SERVICES. A. Subject to the terms of paragraph 14(C), and for the sums set forth in paragraph 14(B) hereof, VIP , during the term of this Agreement, agrees to provide the following added services to BNL upon request: 1. All consultation, systems development, conversion services, programming, debugging and testing of software, hardware, and for other services other than the VIP System and which are unique to BNL products and/or method of doing business; 2. All machine time used in connection with systems development, conversion services, programming, debugging and testing of software, hardware and other vendor services which are unique to BNL products and/or method of doing business; 3. Assistance of VIP in connection with the termination of either parties of its services under this Agreement and the implementation of EDP service by BNL with another data processing company; 4. Additional processing resulting from changes in regulatory requirements; 5. Special, unscheduled, and/or non-standard system application processing; 6. Bank draft processing. B. VIP will provide BNL the above enumerated additional services at the hourly rates set forth in Schedule A Schedule of Charges and Fees for Additional Services, for the initial twelve (12) months of this Agreement. After the initial twelve months of this Agreement, VIP may adjust the rates in Schedule A to VIP's then current standard rates for such services, provided that it provides BNL with notice of any such adjustment not less ~han thirty (30) days prior to any such adjustment and that such rates shall not increase by more than ten ( 10% ) percent per year . C. VIP performance of such additional services for BNL is subject to availability of resources and the development of a schedule for delivery of such services which is agreeable to both parties. VIP agrees to make a best effort attempt to develop the required schedules with BNL. + +E - 14 + + + + + + + +15. TERM. A. The initial term ("Initial Term") of this Agreement shall be for one year commencing on the 1st day of May, 2006 ("Effective Date"). Payments under this Agreement by BNL shall commence as provided in paragraph 5(A) hereof. B. Unless either party gives written notice to terminate this Agreement at least six (6) months prior to the end of said Initial Term, this Agreement shall continue on a year to year basis ("Extended Term(s)") until terminated by either party by giving written notice of termination thereof to the other party at least six (6) months prior to the end of the then current Extended Term. C. However, if, after the Initial Term, BNL terminates this Agreement during an Extended Term by giving less than six (6) months notice, in addition to any other sums due VIP under this Agreement, BNL shall pay to VIP a cancellation fee equal to the greater of (i) the Minimum Fee multiplied by the remaining number of months in the then current term, (ii) the average of the monthly billings for the six (6) month period immediately preceding the date upon which the notice of termination is received by VIP from BNL multiplied by the remaining number of months in the then current term or (iii) thirty thousand dollars ($30, 000). E. From and after notice of termination is received by VIP, any new reports or other services provided by VIP other than routine processing services which have been done for BNL under this Agreement shall be deemed to be additional services and shall be performed by VIP at VIP's then current rates for such termination services as specified on Schedule A. F. Upon termination or expiration of this Agreement, BNL shall return all software and related manuals, if any, provided by VIP to BNL during the term of this Agreement. 16. MISCELLANEOUS. A. ADVERTISING. During the term of this Agreement BNL consents to the use of the name of BNL by VIP in identifying BNL as a client, in advertising, publicity, or similar materials distributed to prospective clients. Except as set forth in this paragraph 16(A), the terms of this Agreement shall be kept confidential. B. AMENDMENTS. No amendment, change, waiver, or discharge hereof shall be valid unless in writing and signed by an authorized representative of the party against which such amendment, change, waiver, or discharge is sought to be enforced. Any provision of BNL' purchase' order or other request for services shall not bind VIP. VIP's failure to object to any such provision shall not be construed as a waiver of the terms and conditions of this Agreement nor as acceptance of any such other provision(s). + +E - 15 + + + + + + + +C. ARBITRATION. Any controversy or claim arising out of or relating to this Agreement, or its breach, or its validity or interpretation, except claims for injunctive relief and claims involving necessary third parties who refuse to participate, shall be settled by binding arbitration in accordance with the then current Commercial Arbitration Rules of the American Arbitration Association (" AAA") subject, however, to the following: 1. The location for the arbitration shall be at such location reasonably designated by the arbitrators. 2. Such arbitration shall be heard and determined by a panel of three (3) arbitrators in accordance with the then current rules or regulations of the AAA relating to commercial disputes. One arbitrator shall be appointed by each party to serve on the panel. One neutral arbitrator shall be appointed by the AAA and shall serve as chairperson of the three arbitrator panel. Such neutral arbitrator shall be an attorney with experience in handling disputes relating to the providing of out sourced electronic data processing services. 3. The arbitration award shall be binding on the parties and may be enforced in any court of competent jurisdiction. 4. The prevailing party in such arbitration shall be entitled to recover its reasonable attorneys' fees and costs incurred in such arbitration proceeding. D. ASSIGNMENT. Neither party to this Agreement shall assign, subcontract, or otherwise conveyor delegate its rights or duties hereunder to any third party without the prior written consent of the other party hereto, such consent not to be unreasonably withheld. E. ATTORNEY FEES. In the event that litigation is instituted between the parties in connection with any controversy or dispute arising out of or relating to this Agreement, the prevailing party in such litigation shall be entitled to recover its reasonable attorney fees and costs. F. BINDING. This Agreement is binding on, and shall inure to the benefit of VIP, BNL and their respective successors and assigns. G. CHOICE OF LAW. This Agreement and performance hereunder shall be governed by the laws of the State of Oklahoma without regard to conflict of laws. Subject to the requirement for arbitration under paragraph 16(C), VIP and BNL hereby agree on behalf of themselves and any person claiming by or through them that jurisdiction and venue for any litigation arising from or relating to this Agreement shall be in the appropriate federal or state court located in Austin, Texas, or in Oklahoma City, Oklahoma, and that any arbitration shall be conducted in the location selected pursuant to paragraph 16(C)(1). + +E - 16 + + + + + + + +H. COUNTERPARTS. This Agreement may be executed in several counterparts, all of which taken together shall constitute one single agreement between the parties hereto. I. ENTIRE AGREEMENT. This Agreement, including any Schedules referred to herein or attached hereto, each of which is incorporated herein for all purposes, constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and no prior or contemporaneous representations, inducements, promises, or agreements, oral or otherwise, between VIP and BNL with reference thereto shall be of any force or effect. J. FORCE MAJEURE. Notwithstanding anything to the contrary in this Agreement, but except to the extent provided in paragraph 2, VIP shall not be liable to BNL for any delay or failure to perform any of the EDP Services or other obligations set forth in this Agreement due to cause(s) beyond its reasonable control, including, without limiting the generality of the foregoing, (i) accidents, (ii) acts of God, (iii) labor disputes, (iv) BNL's failure to submit data or information in the prescribed form or in accordance with the agreed upon schedules; (v) special requests, outside the VIP Systems' functions routinely utilized by BNL, by BNL or any governmental agency authorized to regulate or supervise BNL or any authority having jurisdiction over BNL; (vi) BNL's failure to provide any equipment, software, facility or performance called for by this Agreement, and the same is necessary for VIP's performance hereunder, (vii) BNL's material breach of any of the terms, covenants, or representations set forth in this Agreement or (viii) the actions of any government agency or common carrier or other third party over whom VIP has no control. Performance times shall be considered extended for a period of time equivalent to the time lost because of such delay. K. HEADINGS. The paragraph headings used herein are for reference and convenience only and shall not enter into the interpretation hereof. L. INDEPENDENT CONTRACTOR. VIP and BNL are strictly independent contractors. Neither party has the right to bind the other in any manner, and nothing in this Agreement shall be interpreted to make either party the agent or legal representative of the other or to make the parties joint venturers or partners. M. LIMIT A TIONS OF ACTIONS. Any claim of action of any kind which one party to this Agreement may have against the other party relating to or arising out of this Agreement must be commenced within two (2) years from the date such claim or cause of action shall have first accrued. N. NOTICES. Any notice provided pursuant to this Agreement, if specified to be in writing, shall be in writing and shall be deemed given (i) if by hand delivery, upon receipt thereof (ii) if mailed, three (2) days after deposit in the United States mails, postage prepaid, certified mail return receipt requested, or (iii) if by next day delivery service, upon such delivery .All notices shall be addressed to a party at the address first set forth above or at such other address as either party may in the future specify in writing to the other . + +E - 17 + + + + + + + +0. SERVICES FOR OTHERS. BNL understands and agrees that VIP may perform for third. parties similar services using the same personnel, subject to VIP's confidentiality obligations hereunder, and that VIP may utilize such personnel for rendering services for BNL hereunder. P. SEVERABILITY. If any provision of this Agreement shall be invalid or unenforceable, the remaining provisions of this Agreement shall not be affected thereby and each remaining provision shall be valid and enforceable to the fullest extent permitted by law. Q. SURVIVAL. All provisions of this Agreement relating to confidentiality and indemnity shall survive the termination of this Agreement. R. NO THIRD PARTY BENEFICIARY. No third party is intended to be nor shall any such third party be deemed to be a third party beneficiary of this Agreement nor shall any third party acquire any rights or remedies under or through this Agreement. S. WAIVER, Any waiver by a party of any breach of any provision of this Agreement shall not be construed as a waiver of any continuing or succeeding breach of such provision, a waiver of that provision itself or a waiver of any other right(s) under this Agreement. The parties agree and acknowledge that they have read this Agreement. The persons signing below on behalf of the respective parties represent and warrant that they have the authority to bind the party on which behalf they have executed this Agreement. This Agreement is executed on the dates shown below and effective as of the Effective Date identified above. VIRTUAL ITEM PROCESSING SYSTEMS INC. BROKERS NATIONAL LIFE ASSURANCE COMPANY + + /s/ David A. Siekman /s/ Barry N. Shamas By: _____________________________________ By: _________________________________ David A. Siekman Barry N. Shamas President Executive Vice President May 17, 2006 May 18, 2006 Date: ___________________________________ Date: _______________________________ + +E - 18 + + + + + + + +SCHEDULE A SCHEDULE OF CHARGES AND FEES FOR ADDITIONAL SERVICES SYSTEMS AND PROGRAMMING SERVICES HOURLY RATE 1. CONSULTATION $100.00 2. SYSTEMS DEVELOPMENT 100.00 3. SYSTEMS REQUIREMENTS DEFINITION 100.00 4. SYSTEMS ANALYSIS 100.00 5. COMPUTER PROGRAMMING: SENIOR ANALYST 100.00 JUNIONANALYST 85.00 COMPUTER TIME FOR SYSTEM DEVELOPMENT 6. COMPUTER CHARGED TIME $150.00 TERMINATION SERVICES 7. CONSULTATION $100.00 8. PROGRAMMING $185.00 9. COMPUTER CHARGED TIME $250.00 ADDITIONAL REGULATORY PROCESSING 10. COMPUTER CHARGED TIME $150.00 SPECIAL OR NON-STANDARD APPLICATION PROCESSING 11. COMPUTER CHARGED TIME $150.00 EDUCATION AND HELP 12. EDUCATION: IN VIP OFFICES $ 50.00 13. EDUCATION: ON-SlTE 90.00 14. PROCEDURAL HELP VIA TELEPHONE 50.00 BANK DRAFTS UNIT RATE 15. BANK DRAFT PROCESSING (PER DRAFT) $ .06 + +E - 19 + + + + + + + + SCHEDULE B SCHEDULE OF PROCESSING FEES PLAN NAME OF CATEGORY All BNL Plans Fee = $.305/per policy per month \ No newline at end of file diff --git a/full_contract_txt/BOLIVARMININGCORP_05_23_2003-EX-2.1-VISP WEB SITE BUILDING AND HOSTING AGREEMENT.txt b/full_contract_txt/BOLIVARMININGCORP_05_23_2003-EX-2.1-VISP WEB SITE BUILDING AND HOSTING AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..34a8e1c87af2fac7e3d1046e3634bb6226d36a52 --- /dev/null +++ b/full_contract_txt/BOLIVARMININGCORP_05_23_2003-EX-2.1-VISP WEB SITE BUILDING AND HOSTING AGREEMENT.txt @@ -0,0 +1,95 @@ +VISP WEB SITE BUILDING AND HOSTING AGREEMENT + +This Agreement is made on this 12th day of May 2003 by and between YourNetPlus.com, Inc., a New York Corporation; with its principle office located at 501 Route 208, Monroe, NY 10950 ("Provider") and Kingdom Connect, Inc., a Corporation with its principle office located at 1045 Stephanie Way, Minden, NV 89423 ("KCI"). + +Whereas, Provider is in the business of providing websites and internet connectivity which may be Private Labeled or offered as same service. + +Whereas KCI wishes to purchase the services of Provider on behalf of KCI's customers. + +Whereas, Provider agrees to provide VISP setup, maintenance, and technical support services for five thousand (5,000) websites for KCI's customers over the next five years. + +Be it agreed on this day that the following agreement will govern the relationship between our two companies. + +1 TERM + +This agreement shall be for a term of five years from the date of this document. This agreement shall renew automatically each year thereafter, unless either party serves written notice of its intention not to renew, on the other at least 90 days prior to the expiration of the then current term of this agreement. + +2 PROVIDER'S REPRESENTATIONS + +Yournetplus, one of the largest private label internet service providers in the United States agrees to allow us to prepay for our customers all set up, development, maintenance, and service fees associated with five thousand VISP websites for the customers of KCI at no charge to the customer (churches). Provider represents that these fees normally are charged to the customer according to the following schedule: + +$299.00 one time start-up and developmental fee due at contract signing + +$29.95 monthly maintenance and service fee + +24/7 "800" Number Customer Service / Tech Support $25.00 per month for private labeled service and Free for the first 90 days for generic service. If the ISP does not have 250 users within the first 90 days we will charge $25.00 each month thereafter. + +3 PROVIDER'S RESPONSIBILITIES + +Provider agrees to provide KCI with VISP Private labeled website building and maintenance capabilities. Deliverables shall include: Sales collateral materials including brochures and flyers to help KCI sign customers to the service. A fully staffed back end including; Billing, real time credit card transactions, administrative reports, Customer and technical support, Online Customer Account Maintenance, Private labeled E-Mail Server, Administrative E-Mail Addresses, vacation e-mail, Web based and POP Access, Online Interfaces, a private labeled Internet portal for KCI and include an affiliate program. + +KCI's Customers will receive an initial VISP web site setup including 5Mbs of storage space, maintenance of the site, technical support, and any services necessary for use of the site for no charge. + +4 KCI'S RESPONSIBILITIES + +To market Private Labeled Service to retail and wholesale clients of KCI. + +KCI, its officers, directors, employees and any authorized sub-licensee will (I) conduct their business in an honest, professional and ethical manner and (ii) not commit any action or omission to act which could adversely affect PROVIDER, its name, reputation or ability to conduct its business. KCI shall promptly and fully cooperate with Provider to address and resolve all issues, problems, administrative procedures, End User complaints, regulatory investigations or inquiries or any other circumstances arising from KCI's use of Provider's services. + +5 PROPRIETARY INFORMATION + +The parties understand and agree that the terms and conditions of this Agreement, all documents and invoices and all communications between the parties regarding this Agreement or the Service to be provided as well as such information relevant to any other agreement between the parties (collectively "Confidential Information"), are strictly confidential between KCI and Provider. For purposes of this Agreement, "Confidential Information" shall mean information in written or other tangible form specifically labeled as such when disclosed by a Party. Confidential Information shall remain the property of the disclosing Party. A Party receiving Confidential Information shall: (1) use or reproduce such information only when necessary to perform this Agreement; (2) provide at the least the same care to avoid disclosure or unauthorized use of such information as it provides to protect it's own Confidential Information and; (3) limit access to such information to it's employees or agents who need + + + + + +such information to perform this agreement. Not withstanding anything to the contrary contained herein, a Party shall be allowed to disclose Confidential Information pursuant to judicial or governmental order or if otherwise required to do so by law. + +KCI pledges that it will not circumvent the relationships among venders, providers and clients developed by Provider either directly or indirectly, during the contract period and for a period of up to 2 (two) years following termination of this contract + +7 CONSIDERATION TO PROVIDER + +Seven hundred fifty thousand (750,000) shares of Kingdom Connect, Inc. Series A Preferred Stock. Such stock issued assuming ten million (10,000,000) shares total issued and outstanding and to be adjusted accordingly to represent the same percentage should a different number be outstanding. Once the common stock has been registered, or, after the one year period applicable under Rule 144, whichever occurs first, the Company at its sole cost and expense have its attorney issue an opinion letter for removal of the legend and release all stock transfer instructions on the common stock, except as maybe required under Rule 144. In the event the Company fails to have its attorney issue the required opinion letter within 20 days of a written request from YourNetPlus.com or its nominee, the Company shall be liable for liquidated damages in the amount of 10% interest per 30 days on the value of the shares based on the closing bid price of the Company's common stock on the 20th business day following the date it receives written notice from YourNetPlus.com or their nominee. The damages shall accrue until the transfer agent receives the opinion letter + +8 ASSIGNMENT + +This Agreement shall be binding upon the parties and their respective successors and assigns; provided, however, that no rights or obligations hereunder, including but not limited to Licensee's Subscriber accounts, shall be assigned or transferred, in whole or in part, by either of the parties hereto to any person, firm or corporation without prior written consent by the other party, which consent shall not be unreasonably withheld or delayed. + +Notwithstanding the foregoing, either party may assign this Agreement, without the prior consent of the other party, to any person, partnership, firm or corporation affiliated by common ownership with the assigning party, acquiring all or substantially all of such party's assets or, in the case of PROVIDER, acquiring any assets of PROVIDER associated with its wholesale Internet access and services business. + +9 ENTIRE AGREEMENT + +The parties have read this Agreement and all of its Schedules, Exhibits and attachments and agree to be bound by its terms, and further agree that it constitutes the complete statement of the Agreement between them which supersedes all other agreements, covenants, representations or proposals, oral or written, and all other communications between them relating to the subject matter of this Agreement. In the event of a conflict between the terms and conditions of this Agreement and any Amendments to this Agreement, the terms and conditions of the Amendment(s) shall prevail. In the event of a conflict between the terms and conditions of this Agreement and any Schedules to this Agreement, the terms and conditions of this Agreement shall prevail. + +10 SEVERABILITY + +Should any part of this Agreement for any reason be declared invalid by order of any court or regulatory agency, such order shall not affect the validity of any remaining portion, which shall remain in force and effect as if this Agreement had been executed with the invalid portion eliminated, and it is hereby declared the intention of the parties that they would have executed the remaining portion of this Agreement without including therein any such part or portion which may, for any reason, be hereafter declared invalid. + +11 CONTROLLING LAW AND ARBITRATION + +All questions regarding the validity, interpretation, performance and enforcement of the provisions of this Agreement shall be governed by the laws of the state of New York. Any controversy or claim arising out of, relating to or in connection with this Agreement that has not been resolved through the informal mediation of the parties shall be resolved through arbitration pursuant to the Commercial Arbitration Rules of the American Arbitration Association then in effect, as modified by the terms set forth below: (a) the arbitration shall be conducted in New York state; (b) the arbitration shall be conducted by a single arbitrator selected by the parties; (c) the parties shall act in a commercially reasonable manner and speedily select and then conduct the arbitration within 45 days with the expenditure of minimal discovery efforts and expense which shall be determined, if necessary, by the arbitrator. The agreement to arbitrate shall be specifically enforceable under prevailing New York law. Any award rendered by the arbitrator shall be binding and enforceable by any party to the arbitration and judgment shall be rendered upon it in a court of competent subject matter jurisdiction located in New York. + +12 REGULATION FD + +Regulation FD's public disclosure requirements include that material information must be disclosed to all shareholders at the same time. Both companies recognize that the signing of this Agreement creates a relationship that may be considered material news to both companies' shareholders. For full compliance with Reg. FD, an issuance of a news release may be required. By signing this agreement, both parties authorize a nationally recognized wire service to + + + + + +distribute a release regarding this agreement, drafted by Kingdom Ventures. Yournetplus shall have the opportunity to review and approve any press release before it is distributed. + +13 KCI AUTHORIZATION KCI represents that the person executing this Agreement has been duly authorized by KCI to execute KCI to the terms and conditions contained herein. KCI, with full knowledge of all terms and conditions herein, are not in conflict with any law or the terms of any charter or bylaw or any agreement to which KCI is a party or by which it is bound or affected. + +IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed on behalf of each other by a person with full power and authority to bind such party. + + Kingdom Connect, Inc. YourNetPlus.com + +"KCI" "PROVIDER" + +By: /s/ Gene Jackson By /s/ Vince Dim ------------------------------- ------------------------------- Print Name: Gene Jackson Print Name: Vince Dima + +Title: CEO Title: President ---------------------------- + +Date: 5/12/03 Date: 5/12/03 ----------------------------- ----------------------------- \ No newline at end of file diff --git a/full_contract_txt/BONTONSTORESINC_04_20_2018-EX-99.3-AGENCY AGREEMENT.txt b/full_contract_txt/BONTONSTORESINC_04_20_2018-EX-99.3-AGENCY AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..ae4a246fd7eff0f523abe98e40cc717064ff778f --- /dev/null +++ b/full_contract_txt/BONTONSTORESINC_04_20_2018-EX-99.3-AGENCY AGREEMENT.txt @@ -0,0 +1,1267 @@ +EXHIBIT 99.3 Case 18-10248- MFW Doc 632-1 Filed 04/18/18 Page 2 of 60 + +AGENCY AGREEMENT This Agency Agreement ("Agreement") is made as of April 18, 2018, by and between The Bon-Ton Stores, Inc. and its associated chapter 11 debtors in possession (collectively, "Merchant"),1 on the one hand, and (a) a contractual joint venture comprised of GA Retail, Inc. ("GA") and Tiger Capital Group, LLC ("Tiger" and collectively with GA, the "Agent") and (b) Wilmington Savings Fund Society, FSB, as the indenture agent and collateral trustee for the 8.00% second-lien senior secured notes due 2021 (the "Second-Lien Notes") issued by BTDS, on the other hand (in such capacities, the "Notes Trustee" and collectively with Agent, "Purchaser"). Purchaser and Merchant are collectively the "Parties." + +Section 1. Recitals + +WHEREAS, on February 4, 2018, the entities comprising Merchant commenced ten voluntary chapter 11 bankruptcy cases (the "Bankruptcy Cases") in the United States Bankruptcy Court for the District of Delaware (the "Bankruptcy Court"). + +WHEREAS, pursuant to an order of the Bankruptcy Court entered on February 6, 2018 [D.I. 105], the Bankruptcy Cases are being jointly administered under the caption In re The Bon-Ton Stores, Inc., et al., Lead Case No. 18-10248-MFW (Bankr. D. Del.). + +WHEREAS, on March 12, 2018, the Bankruptcy Court entered an order (the "Bidding Procedures Order") [D.I. 348] that, among other relief, approved bidding procedures (the "Bidding Procedures") for and scheduled a hearing (the "Sale Approval Hearing") on the approval of the sale of all or substantially of Merchant's assets. + +WHEREAS, on March 12, 2018, the Bankruptcy Court entered an order (the "Final DIP Order") [D.I. 352] authorizing Merchant to obtain postpetition secured debtor-in-possession financing on a final basis. + +WHEREAS, an ad hoc group of holders of $251,325,000 in principal amount of the Second-Lien Notes (the "Second Lien Noteholders") has issued a direction to the Notes Trustee to credit bid (the "Credit Bid") $125,000,000 of its claims under the indenture governing the Second-Lien Notes (the "Notes Claims") as consideration under this Agreement and the Notes Trustee has made the Credit Bid. + +WHEREAS, Merchant operates retail stores and desires that the Agent act as Merchant's exclusive agent for the purposes of: + +(a) selling all of the Merchandise (as hereinafter defined) from Merchant's retail store locations identified on Exhibit 1(a)(1) attached hereto (each a "Store" and collectively the "Stores") and distribution centers (including e-commerce + +1 Merchant consists of The Bon-Ton Stores, Inc.; The Bon-Ton Department Stores, Inc. ("BTDS"); The Bon-Ton Giftco, LLC; Carson Pirie Scott II, Inc.; Bon- Ton Distribution, LLC; McRIL, LLC; Bonstores Holdings One, LLC; Bonstores Realty One, LLC; Bonstores Holdings Two, LLC; and Bonstores Realty Two, LLC. + + + + + +Case 18-10248- MFW Doc 632-1 Filed 04/18/18 Page 3 of 60 + +facilities) identified on Exhibit 1(a)(2) attached hereto (each a "Distribution Center" and collectively, the "Distribution Centers") by means of a "going out of business," "store closing," "sale on everything," "everything must go," or similar sale as described further below (the "GOB Sale"), with the nature and manner of advertising the GOB Sale being in Agent's sole discretion, subject to the terms and conditions of this Agreement and the Sale Guidelines and Approval Order (each as defined below); + +(b) marketing and selling, or otherwise designating the purchasers of, the furniture, furnishings, trade fixtures, machinery, equipment, office supplies, Supplies (as defined below), conveyor systems, racking, rolling stock, and other tangible personal property (collectively, "FF&E") owned by Merchant, wherever located ("Owned FF&E"); + +(c) designating the assignees of any or all of Merchant's unexpired leases of non-residential real property (together with all amendments, extensions, modifications, and other material documents related thereto, each a "Lease" and all such Leases collectively, the "Leases") and executory contracts (together with all amendments, extensions, modifications, and other material documents related thereto, each a "Contract" and all such Contracts collectively, the "Contracts"), in each case excluding any Leases or Contracts that may be rejected as permitted and in accordance with the procedures under the Approval Order (defined below) and subject to the assumption and assignment procedures to be incorporated into the Approval Order; + +(d) marketing and selling, and/or otherwise designating the purchasers and/or assignees of any or all real property owned by Merchant (the "Owned Real Estate"), including but not limited to the real property identified on Exhibit 1(d) annexed hereto; + +(e) marketing and selling, and/or otherwise designating the purchasers, assignees, and/or licensees of any or all intellectual property owned by Merchant (the "Intellectual Property"), including but not limited to the intellectual property identified on Exhibit 1(e) annexed hereto, provided that, the disposition of any Intellectual Property that would result in the sale or lease of personally identifiable information (as such term is defined in section 101(41A) of the Bankruptcy Code) shall be subject to a determination made by a consumer privacy ombudsman appointed in Merchant's chapter 11 cases; and + +(f) marketing and selling, and/or otherwise designating the purchasers, licensees, and/or assignees of any or all of Merchant's other real and tangible and intangible personal property (the "Other Assets" and, collectively with the Merchandise, the Owned FF&E, all Leases, all Contracts, the Owned Real Estate, and the Intellectual Property, the "Assets"). For the avoidance of doubt, the Other Assets include but are not limited to all cash on hand and in the Debtors' retail store locations, cash in transit, cash in bank accounts, Merchant's interest in and rights with respect to cash posted as collateral for letters of credit, receivables (including + +2 + + + + + +Case 18-10248- MFW Doc 632-1 Filed 04/18/18 Page 4 of 60 credit card receivables), deposits, security deposits, credit card processing float, proceeds of retail sales in all of the Debtors' retail store locations from and after the date of this Agreement to the extent not used to pay down the DIP Obligations (as defined in the Final DIP Order), claims and causes of action arising under chapter 5 of the Bankruptcy Code and similar state law ("Avoidance Actions"), and all other claims and causes of action, including but not limited to commercial tort claims, based on facts and circumstances existing as of the Closing, whether or not theretofore discovered or asserted ("Other Causes of Action"). Notwithstanding the foregoing, the Assets shall not include (a) the Consulting Agreement by and between Merchant and a joint venture comprised of Hilco Merchant Resources, LLC and Gordon Brothers Retail Partners, LLC (the "Phase 1 Consultant"), dated January 29, 2018 (the "Phase 1 Liquidation Agreement"), which shall not be subject to the Lease/Contract Designation Rights (as defined below) or otherwise assumed by Purchaser or (b) the proceeds from the sale of Additional Agent Goods (as defined in the Phase 1 Liquidation Agreement) pursuant to the Phase 1 Liquidation Agreement, other than the "Additional Agent Goods Fee" due to Merchant under the Phase 1 Liquidation Agreement. Merchant shall not reject or amend the Phase 1 Liquidation Agreement without the express written consent of Purchaser. For the avoidance of doubt, all Net Proceeds, less the Consulting Fee, plus the Additional Agent Goods Fee (each as defined in the Phase 1 Liquidation Agreement) shall constitute Assets under this Agreement and shall be remitted to Purchaser pursuant to the terms hereof. + +WHEREAS, the Official Committee of Unsecured Creditors appointed in the Bankruptcy Cases (the "Committee") filed an adversary proceeding (the "Adversary Proceeding") on March 29, 2018 seeking, among other relief, to avoid certain liens securing the Notes Claims. + +NOW, THEREFORE, in consideration of the Purchase Price (defined below) and the mutual covenants and agreements set forth in this Agreement, the Parties hereby agree as follows: + +Section 2. Appointment of Agent/Approval Order. Consistent with the Bidding Procedures and as soon as practicable after full execution of this Agreement, Merchant shall file in the Bankruptcy Cases a proposed form of order (the "Approval Order") in a form reasonably satisfactory to Merchant and Purchaser. At the Sale Approval Hearing, Merchant shall seek entry of the Approval Order as the "Sale Order," as that term is used in the Bidding Procedures Order. The Approval Order shall, among other things: + +(a) find that: + +(i) this Agreement is in the best interest of Merchant, its estate and creditors, and other parties in interest + +(ii) the Parties entered into this Agreement in good faith pursuant to Section 363(m) of the Bankruptcy Code and without collusion as described in Section 363(n) of the Bankruptcy Code; + +3 + + + + + +Case 18-10248- MFW Doc 632-1 Filed 04/18/18 Page 5 of 60 + +(iii) time is of the essence in effectuating this Agreement and proceeding with the GOB Sale at the Stores uninterrupted; + +(iv) Merchant's decisions to (a) enter into this Agreement and (b) perform its obligations under this Agreement are a reasonable exercise of Merchant's sound business judgment consistent with its fiduciary duties and is in the best interests of Merchant, its estate, its creditors, and other parties in interest; and + +(v) this Agreement was negotiated in good faith and at arms' length and Purchaser is entitled to the protection of section 363(m) and 364(e) of the Bankruptcy Code; and + +(b) order, adjudge, and decree that: + +(i) this Agreement and all of the transactions contemplated hereby are approved in their entirety; + +(ii) the Parties are authorized to continue to take any and all actions as may be necessary or desirable to implement this Agreement and each of the transactions contemplated hereby; + +(iii) following the occurrence of the closing under this Agreement, which shall occur no later than April 19, 2018 (the "Closing"), subject to payment of the Cash Purchase Price (as defined below) and Purchaser's compliance with its other obligations hereunder, Agent shall have the exclusive right to market and sell, and/or otherwise designate the purchasers, licensees, and/or assignees of, any or all of the Assets free and clear of all liens, claims, and encumbrances thereon without further order of the Bankruptcy Court; + +(iv) the sale, license, transfer, or other conveyance of any Assets (other than the Assets being sold pursuant to the GOB Sale, as to which no further notice shall be required) reflected in notices filed in the Bankruptcy Cases from time to time by the Agent, substantially in the form annexed hereto as Exhibit 2(b)(iv) (each an "Asset Designation Notice"), shall be automatically effective on the date reflected in the applicable Asset Designation Notice and subject to the satisfaction of any closing conditions reflected therein, and the sale or other conveyance of such Assets shall be free and clear of all liens, claims, and encumbrances without further order of the Bankruptcy Court, provided, however, that nothing in the Approval Order shall inhibit the ability of Agent to seek other or further orders of the Court in connection with the sale or other disposition of any Assets; + +(v) the form of Asset Designation Notice is approved; + +4 + + + + + +Case 18-10248- MFW Doc 632-1 Filed 04/18/18 Page 6 of 60 + +(vi) subject to Agent's compliance with its payment obligations under this Agreement and the Approval Order, Agent is authorized to execute, in the name of and as agent for Merchant, any and all deeds, bills of sale, and other instruments or documents necessary to effectuate the sale, transfer, or other conveyance of any of the Assets; + +(vii) following the payment of the Cash Purchase Price but subject to Agent's obligation to pay Expenses and fund the Wind-Down Payment pursuant to the Wind-Down Budget (as defined below), all proceeds (cash or otherwise) of any of the Assets except as otherwise set forth in this Agreement ("Proceeds"), including but not limited to all Proceeds arising from the sale, lease, licensing, assignment, or other disposition of any of the Assets, shall be the sole property of Purchaser, and Purchaser shall be entitled to retain all Proceeds for its own account, subject to further distribution among the entities comprising Purchaser pursuant to any agreements between the entities comprising Purchaser and the Second Lien Noteholders; + +(viii) the Wind-Down / Expense Advance shall be deemed held in escrow for the exclusive purpose of paying (1) Expenses (as defined below) and (2) administrative expenses and other amounts pursuant to and solely as reflected in the Wind-Down Budget (provided that such payments may be made from the Wind-Down / Expense Advance as and when due without further order of the Court or action by any Party), and shall not be used for any other purpose without the express written consent of Agent in its sole discretion; + +(ix) following the occurrence of the Closing, subject to Agent's obligation to pay Expenses and fund the Wind-Down Payment, Merchant and any trustee appointed in the Bankruptcy Cases or any successor cases thereto shall hold the Assets (other than the Assets being sold through the GOB Sale and the Wind-Down / Expense Advance) strictly in trust for the benefit of Purchaser and, as such, the Assets shall not constitute property of Merchant's bankruptcy estate pursuant to and consistent with 11 U.S.C. § 541(b)(1) at any time following the Closing; + +(x) following the payment of the Cash Purchase Price but subject to Agent's obligation to pay Expenses and fund the Wind-Down Payment, any Proceeds received by, or otherwise in the possession of, Merchant at any time shall be segregated and held strictly in trust for the benefit of Purchaser, shall not be commingled with Merchant's own assets, and, as such, shall not become property of Merchant's bankruptcy estate pursuant to and consistent with 11 U.S.C. §541(b)(1), and shall be paid over to Purchaser immediately; + +(xi) upon the payment of the Cash Purchase Price, and solely to the extent that any Assets or Proceeds are, notwithstanding the Approval Order, + +5 + + + + + +Case 18-10248- MFW Doc 632-1 Filed 04/18/18 Page 7 of 60 + +subsequently determined to constitute property of Merchant's estate, but subject to Agent's obligation to pay Expenses and fund the Wind-Down Payment, Purchaser shall have a senior lien on such Assets and all Proceeds thereof, which lien is deemed automatically perfected, provided that nothing in the Approval Order shall inhibit Purchaser's ability, and the Approval Order shall expressly authorize Purchaser, to take any action Purchaser deems appropriate to perfect and enforce such lien; + +(xii) upon the payment of the Cash Purchase Price and subject to Agent's obligation to pay Expenses and fund the Wind-Down Payment, until all Assets have been sold or otherwise disposed of, and solely to the extent that any Assets or Proceeds are, notwithstanding the Approval Order, subsequently determined to constitute property of Merchant's estate, Purchaser shall have a superpriority administrative expense claim against Merchant to the extent of any amounts owing from Merchant to Purchaser in connection with this Agreement, including as a result of any breach of this Agreement and/or as a result of any Proceeds being in Merchant's possession; + +(xiii) the Lease/Contract Designation Rights are approved, and Purchaser is authorized to designate the assignees of any or all of the Contracts and Leases pursuant thereto; + +(xiv) at any time (i) with respect to any unexpired real estate Lease under which Merchant is lessee, prior to the earlier to occur of (1) September 2, 2018 and (2) expiration of such Lease by its terms or the rejection thereof, and (ii) with respect to all other Contracts and Leases, prior to the earlier to occur of (1) December 31, 2018, and (2) rejection thereof (the shortest of the foregoing periods applicable to a particular Contract or Lease is the "Designation Rights Period" applicable to that Contract or Lease), Purchaser shall have the exclusive right, which right may be exercised at any time and from time to time, to file a notice in the Bankruptcy Cases (each such notice, a "Lease/Contract Assumption Notice") substantially in the form annexed hereto as Exhibit 2(b)(xiii) designating the assignee of any one or more Leases and/or Contracts and setting forth the proposed cure amount due pursuant to section 365 of the Bankruptcy Code (each a "Cure Amount"); + +(xv) the counterparties to the Leases or Contracts identified in any Lease/Contract Assumption Notice shall have twenty-one days to object to the proposed assumption and assignment; + +(xvi) if no objection to the proposed assumption and assignment of a Lease or Contract is timely received, such Lease or Contract shall, upon payment of the applicable cure payment, if any, to the applicable + +6 + + + + + +Case 18-10248- MFW Doc 632-1 Filed 04/18/18 Page 8 of 60 + +counterparty, automatically be deemed assigned to and assumed by the assignee identified in the Lease/Contract Assumption Notice pursuant to section 365 of the Bankruptcy Code, without further order of the Bankruptcy Court or further action by any person or entity; + +(xvii) if an objection to the proposed assumption and assignment of a Lease or Contract is timely received, such Lease or Contract shall not be assumed or assigned until such objection is resolved by agreement of the applicable counterparty or order of the Bankruptcy Court; + +(xviii) the designee under any Lease/Contract Assumption Notice shall be required, if requested by the applicable counterparty, to provide adequate assurance of future performance with respect to such Lease or Contract if the applicable counterparty so requests; + +(xix) pursuant to section 365(k) of the Bankruptcy Code, neither Merchant nor any other Party shall have any further obligation under any Lease or Contract after assumption and assignment thereof pursuant to the Lease/Contract Designation Rights; + +(xx) in addition to the Lease/Contract Designation Rights, Purchaser shall have the right, upon written notice to Merchant and as reflected in notices filed in the Bankruptcy Cases from time to time, direct Merchant to reject any Lease or Contract as specified by Purchaser; + +(xxi) at the Closing, all funds held in escrow by Wilmington Trust, National Association ("WT") pursuant to that certain Escrow Agreement dated as of March 5, 2018 by and among the members of Agent, the Second Lien Noteholders, and WT shall be released at the Closing for application to the Cash Purchase Price; + +(xxii) Agent shall have the exclusive right to use the Stores and all other Assets for the purpose of conducting the GOB Sale, free of any interference from any entity or person, subject to compliance with the Sale Guidelines (as defined below) and Approval Order; + +(xxiii) Agent, as the exclusive agent for Merchant, is authorized to conduct, advertise, post signs, utilize sign-walkers, and otherwise promote the GOB Sale as a "going out of business", "store closing", "sale on everything", "everything must go", or similar themed sale, in accordance with the Sale Guidelines (as the same may be modified and approved by the Bankruptcy Court), subject to compliance with the Sale Guidelines, the Approval Order, and all applicable federal, state, and local laws, regulations and ordinances, including, without limitation, all laws and regulations relating to advertising, privacy, consumer protection, occupational health and safety and the environment, together with all applicable statutes, rules, regulations and + +7 + + + + + +Case 18-10248- MFW Doc 632-1 Filed 04/18/18 Page 9 of 60 orders of, and applicable restrictions imposed by, governmental authorities (collectively, the "Applicable General Laws"), other than all applicable laws, rules and regulations in respect of "going out of business", "store closing" or similar-themed sales and permitting (collectively, the "Liquidation Sale Laws"); + +(xxiv) Agent is authorized to conduct the GOB Sale notwithstanding any Liquidation Sale Laws; + +(xxv) so long as the GOB Sale is conducted in accordance with the Sale Guidelines and the Approval Order and in a safe and professional manner, Purchaser shall be deemed to be in compliance with any Applicable General Laws; + +(xxvi) Agent is granted a limited license and right to use all Intellectual Property for purposes of conducting the GOB Sale and otherwise marketing any or all of the Assets; + +(xxvii) unless otherwise ordered by the Bankruptcy Court, all newspapers and other advertising media in which the GOB Sale is advertised shall be directed to accept the Approval Order as binding and to allow the Parties to consummate the transactions provided for in this Agreement, including, without limitation, conducting and advertising the GOB Sale in the manner contemplated by this Agreement; + +(xxviii) unless otherwise ordered by the Bankruptcy Court, all utilities, landlords, creditors, and other interested parties and all persons acting for or on their behalf shall not interfere with or otherwise impede the conduct of the GOB Sale, or institute any action in any forum other than the Bankruptcy Court that in any way directly or indirectly interferes with or obstructs or impedes the conduct of the GOB Sale; + +(xxix) the Bankruptcy Court retains exclusive jurisdiction over the enforcement and interpretation of, and over and all matters arising from, this Agreement; + +(xxx) Merchant is directed to provide weekly reporting to Agent of all amounts expended for Expenses and pursuant to the Wind-Down Budget; + +(xxxi) Merchant shall make its books and records available to Purchaser at all times; + +(xxxii) Purchaser shall not be liable for any claims against Merchant except as expressly provided for in this Agreement; + +8 + + + + + +Case 18-10248- MFW Doc 632-1 Filed 04/18/18 Page 10 of 60 + +(xxxiii) all payments made by Merchant from the Wind-Down Payment shall be made pursuant to, and solely in accordance with, the Wind-Down Budget; + +(xxxiv) Purchaser shall neither have nor incur any obligation to advance or fund any amounts to or for Merchant except as set forth in this Agreement and the Wind-Down Budget; + +(xxxv) any amendment to or other modification of the Wind-Down Budget shall only be effective upon approval by Purchaser in its sole discretion; + +(xxxvi) Agent is authorized to sell the Additional Agent Merchandise on the terms set forth herein, subject to the Sale Guidelines; + +(xxxvii) following the occurrence of the Closing, the Adversary Proceeding is deemed dismissed with prejudice; + +(xxxviii) following the occurrence of the Closing, neither the Debtor nor any other entity acting on its behalf or as its successor (including but not limited to the Committee and any chapter 7 or 11 trustee) may recover from the Notes Trustee or any holders of Second- Lien Notes any costs or expenses of preserving, or disposing of, any of the collateral securing Merchant's obligations under the Indenture and the Second-Lien Notes pursuant to section 506(c) of the Bankruptcy Code; + +(xxxix) Purchaser and its designees are granted derivative standing to pursue the Avoidance Actions (subject to section 11.2(f) below) and Other Causes of Action in the name of and/or on behalf of Merchant; + +(xl) in the event any of the provisions of the Approval Order are modified, amended or vacated by a subsequent order of the Bankruptcy Court or any other court, Purchaser shall be entitled to the protections provided in Bankruptcy Code sections 363(m) and 364(e) and, no such appeal, modification, amendment or vacatur shall affect the validity and enforceability of the GOB Sale or the liens or priority authorized or created under this Agreement or the Approval Order; + +(xli) neither Purchaser nor any entity comprising Purchaser is or shall be a mere continuation of Merchant or otherwise subject to successor liability in connection with any of the Assets; + +(xlii) upon receipt by the DIP Administrative Agent (as defined in the Final DIP Order) and certain other persons as directed in the Payoff Letter (as defined below) of the DIP Payoff (as defined below) pursuant to Section 3.1(a) of this Agreement, all ongoing commitments under the DIP Credit Agreement (as defined in the Final DIP Order) shall be canceled and terminated; + +9 + + + + + +Case 18-10248- MFW Doc 632-1 Filed 04/18/18 Page 11 of 60 + +(xliii) to the extent Purchaser has not designated the purchaser or other assignee of any Assets (the "Residual Assets") as of December 31, 2018 (as may be extended by written agreement of the Parties, the "Designation Rights Termination Date"), (1) ownership of all cash (on hand, in the bank, in transit, or otherwise), credit card processing float, accounts receivable, notes receivable, credit card receivables, other receivables, deposits, security deposits, proceeds of retail sales in all of the Debtors' retail store locations, rights to refunds, other rights to payment, and Intellectual Property comprising Residual Assets shall vest in Purchaser or its nominee and (2) ownership of all other Residual Assets shall revert to the Debtors' estates, each on the Designation Rights Termination Date; and + +(xliv) this Agreement, the Approval Order, and all provisions hereof and thereof are binding on any successor to Merchant, including but not limited to any chapter 7 or chapter 11 trustee, and subject to Agent's obligation to pay Expenses and fund the Wind- Down Payment, any such successor shall continue to hold all Assets and Proceeds strictly in trust for the benefit of Purchaser. + +Section 3. Consideration to Merchant and Agent. + +3.1 Purchase Price. The aggregate consideration being provided to Merchant in exchange for Purchaser's rights and Merchant's obligations under this Agreement is as follows (collectively, the "Purchase Price), which shall be allocated among the Assets in accordance with Purchaser's bid letter dated April 4, 2018: + +(a) Cash Purchase Price. At the Closing and subject to the receipt of a payoff letter (the "Payoff Letter") in form and substance satisfactory to the DIP Administrative Agent, Agent shall (i) pay to the DIP Administrative Agent, for the benefit of the DIP Lenders, and certain other persons as directed in the Payoff Letter, the amount in cash (the "DIP Payoff") necessary to (1) indefeasibly pay the Pay-Off Amount (plus any Per Diem Interest) (as each such term is defined in the Payoff Letter), which amount shall include all DIP Obligations, including, without limitation, all outstanding principal, accrued interest, fees (including, without limitation, the outstanding Pre-Petition Tranche A Prepayment Premium and the Pre-Petition Specified Tranche A-1 Prepayment Premium (as each such term is defined in the DIP Credit Agreement)), costs and expenses (including, without limitation, all attorneys' fees, costs and expenses), (2) cash collateralize outstanding letters of credit in accordance with the DIP Credit Agreement, and (3) fund the DIP Indemnity Account in accordance with Paragraph 36 of the Final DIP Order, (ii) fund the Carve Out Account in the amount of $15,800,000 in accordance with the last two sentences of Paragraph 39(c) of the Final DIP Order to be held in escrow in the trust account of Young Conaway Stargatt & Taylor LLP, all as set forth in the Payoff Letter, and (iii) pay $3,000,000 to Merchant to provide liquidity for outstanding checks. Together, items (i), (ii), and (iii) are the "Cash Purchase Price." The Payoff Letter shall contain a release from each of the Merchant, the Agent and the Prepetition Second Lien Parties in favor of the DIP Lenders. Each capitalized term used but not defined in this Section 3.1(a) shall have the meaning set forth in the Final DIP Order. + +10 + + + + + +Case 18-10248-MFW Doc 632-1 Filed 04/18/18 Page 12 of 60 + +(b) Credit Bid. At the Closing, pursuant to the Credit Bid and as provided in the Approval Order, $125,000,000 of Notes Claims shall be deemed offset and exchanged for Purchaser's rights and Merchant's obligations under this Agreement. + +(c) Wind-Down Funding. Subject to the occurrence of the Closing, in addition to the Cash Purchase Price and the Credit Bid, Agent shall pay cash from the Proceeds of the Assets (or, solely to the extent the Proceeds are not available, funds provided by Agent) to Merchant from time to time after the Closing (the "Wind-Down Payment"), in the amount of $93,800,000 (the "Wind-Down Cap") for the purpose of paying certain administrative expenses of Merchant's bankruptcy estate as set forth in the Wind-Down Budget (as defined below). Payments from the Wind-Down Payment for Wind-Down Services are subject to and to be used solely as set forth in the budget and schedule attached as Exhibit 3.1(c) hereto (as may be amended from time to time by agreement of the Parties, subject to approval by Purchaser in its sole discretion and, solely with respect to compensation of the Committee's professionals, 503(b)(9) Claims, and Stub Rent Claims (each as defined below), subject to approval by the Committee, the "Wind-Down Budget"). Merchant shall provide Purchaser with a register of all checks and ACH/wire transfers Merchant intends to issue pursuant to the Wind-Down Budget at least one business day before issuance, which register shall identify the payees, amounts, and expense categories of such payments. If so requested by Purchaser, Merchant shall, to the extent commercially feasible, (i) establish separate bank accounts for specific categories of expenses identified in the Wind-Down Budget (the "Wind-Down Accounts"), (ii) deposit the portions of the Wind-Down Payment allocable to categories for which Wind-Down Accounts have been established into such accounts, and (iii) not pay from any Wind-Down Account any amounts other than the administrative expenses reflected in the Wind-Down Budget for the applicable category. Any portion of the Wind-Down Payment that has not been expended by Merchant as of the Designation Rights Termination Date shall revert and be returned to Purchaser upon the dismissal or conversion of Merchant's chapter 11 bankruptcy cases or the effective date of a plan of liquidation of Merchant. Any costs incurred by Merchant in connection with providing the Wind-Down Services (as defined below) shall be subject to the Wind-Down Budget and subject to the Wind-Down Cap and Merchant shall have no obligation to provide such Wind-Down Services unless the cost to do so is included in the Wind-Down Budget or provided for as an Expense. + +(d) Wind-Down / Expense Advance. As necessary from time to time on or before April 28, 2018, Agent shall advance (including through retention of Proceeds by Merchant) to Merchant the aggregate sum of $50,000,000 (the "Wind-Down / Expense Advance") solely for payment of (i) Expenses (as defined below) and (ii) administrative expenses reflected in the Wind-Down Budget, as and when due. Any payment from the Wind-Down / Expense Advance (a) of expenses reflected in the Wind-Down Budget shall be credited against the Wind-Down Payment and (b) of Expenses shall constitute a payment of Expenses by Agent. The Wind-Down / Expense Advance shall, to the extent commercially feasible, be held in a segregated account and shall not be used for payment of any amounts other than as set forth in this paragraph 3.1(d). + +(e) Expenses. After the Closing, Agent shall be responsible for the payment of all Expenses pursuant to Section 4.1 below. + +(f) Assumption of Certain Claims. + +11 + + + + + +Case 18-10248- MFW Doc 632-1 Filed 04/18/18 Page 13 of 60 + +(i) Upon the occurrence of the Closing, Agent shall assume the obligation to pay (a) $2,000,000 (the "503(b)(9) Cap") on account of claims against Merchant under section 503(b)(9) of the Bankruptcy Code ("503(b)(9) Claims") and (b) $8,000,000 (the "Stub Rent Cap") on account of claims against Merchant on account of stub rent ("Stub Rent"). An amount equal to the sum of the 503(b)(9) Cap and the Stub Rent Cap shall be placed into a segregated account established by Agent to be held in trust for the benefit of holders of 503(b)(9) Claims and Stub Rent Claims. To the extent the sum of all allowed Stub Rent Claims or 503(b)(9) Claims, as the case may be, exceeds the Stub Rent Cap or the 503(b)(9) Cap, as applicable, such claims shall be paid pro rata up to, and subject to, the Stub Rent Cap or the 503(b)(9) Cap, as applicable. All payments by Agent on account of Stub Rent Claims and 503(b)(9) Claims shall be paid directly to the applicable claimants and shall be credited against the Wind-Down Payment. + +(ii) Within ten days after entry of the Approval Order, Merchant shall file and serve upon each known trade creditor and landlord identified in Merchant's books and records as holding a 503(b)(9) Claim and/or a Stub Rent Claim a notice identifying such entity's respective 503(b)(9) Claim or Stub Rent Claim (the "Creditor Notice"). Each recipient of a Creditor Notice shall have twenty days to file with the Bankruptcy Court and serve upon Merchant, Purchaser, and the Committee a response to such Creditor Notice identifying with specificity any dispute regarding such entity's 503(b)(9) Claim and/or Stub Rent Claim. If no response is timely filed by a recipient of a Creditor Notice, the amount and priority of the 503(b)(9) Claim and/or Stub Rent Claim identified on such Creditor Notice shall be binding and conclusive upon the holder thereof, and such holder shall thereafter be barred from objecting to such amount and priority. If a recipient of a Creditor Notice timely files a response thereto, Merchant and Agent, in consultation with the Committee, shall use best efforts to resolve the dispute asserted therein, provided that disputes that cannot be resolved within ten days shall be resolved by the Bankruptcy Court at the next scheduled omnibus hearing thereafter. The actual out-of-pocket costs of preparing, filing, and serving the Creditor Notice shall be paid by Agent as an Expense. Within sixty days after the entry of the Approval Order, Merchant shall provide Agent with a reconciliation of all of the allowed 503(b)(9) Claims and allowed Stub Rent Claims. Purchaser shall have no obligation to investigate, assess, object to, or contest the merits of any 503(b)(9) Claims or Stub Rent Claims and is entitled to rely on the amounts included on such reconciliation. + +(iii) This paragraph 3.1(f) shall survive termination of this Agreement for any reason. + +3.2 Consideration to Purchaser. + +(a) Proceeds. Upon the payment of the Cash Purchase Price but subject to Agent's obligations to pay the Expenses and the Wind-Down Payment, all Proceeds shall be the exclusive property of Purchaser, subject to further distribution among the entities comprising Purchaser pursuant to any agreements between the entities comprising Purchaser and the Second Lien Noteholders. + +(b) Assets and Proceeds Held in Trust. Subject to Section 3.2(a), Merchant shall hold all of the Assets in trust for the benefit of Purchaser. Subject to Section 3.2(a), any + +12 + + + + + +Case 18-10248- MFW Doc 632-1 Filed 04/18/18 Page 14 of 60 + +Proceeds received by, or otherwise in the possession of, Merchant at any time shall be segregated and held strictly in trust for the benefit of Purchaser, shall not be commingled with Merchant's own assets, shall not become property of Merchant's bankruptcy estate, and shall be paid over to Purchaser immediately. For the avoidance of doubt, the costs associated with maintaining the Assets available for sale pursuant to this Agreement shall be borne by Purchaser either as Expenses (as defined below) or through the Wind-Down Payment. + +(c) Merchant and Purchaser further agree that if at any time, Merchant holds any amounts due to Purchaser under this Agreement, Merchant may, in its discretion, offset such amounts being held by Merchant against any undisputed amounts due and owing by, or required to be paid by, Purchaser or Agent hereunder. + +(d) Remaining Merchandise. To the extent that there is Merchandise remaining at the Sale Termination Date (the "Remaining Merchandise"), such Remaining Merchandise shall be deemed automatically transferred to Agent free and clear of all liens, claims, and encumbrances. Agent and its affiliates shall be authorized to sell or otherwise dispose of the Remaining Merchandise with all logos, brand names, and other Intellectual Property intact, and shall be authorized to advertise the sale of the Remaining Merchandise using the Intellectual Property. + +3.3 Proceeds of GOB Sales. + +(a) Following the payment of the Cash Purchase Price but subject to Agent's obligation to pay Expenses and fund the Wind-Down Payment, Agent may (but shall not be required to) establish its own accounts (including without limitation credit card accounts and systems), dedicated solely for the deposit of the Proceeds of the GOB Sales (the "GOB Sale Proceeds") and the disbursement of amounts payable to Agent in connection with the GOB Sales (the "Agency Accounts"), and Merchant shall promptly, upon Agent's reasonable request, execute and deliver all necessary documents to open and maintain the Agency Accounts; provided, however, Agent shall have the right, in its sole and absolute discretion, to continue to use Merchant's Designated Deposit Accounts (as defined below) as the Agency Accounts in which case Merchant's Designated Deposit Accounts shall be deemed to be Agency Accounts. Agent shall exercise sole signatory authority and control with respect to the Agency Accounts. The Agency Accounts shall be dedicated solely to the deposit of GOB Sale Proceeds and other amounts contemplated by this Agreement in connection with the GOB Sale and the distribution of amounts payable hereunder in connection with the GOB Sale. Merchant shall not be responsible for, and Agent shall pay as an Expense hereunder, all bank fees and charges, including wire transfer charges, related to the GOB Sale and the Agency Accounts. Upon Agent's notice to Merchant of Agent's designation of the Agency Accounts (other than Merchant's Designated Deposit Accounts), all GOB Sale Proceeds (including credit card GOB Sale Proceeds) shall be deposited into the Agency Accounts. + +(b) Agent shall have the right to use Merchant's credit card facilities, including Merchant's credit card terminals and processor(s), credit card processor coding, Merchant's identification number(s) and existing bank accounts for credit card transactions relating solely to the GOB Sale. In the event that Agent elects to use Merchant's credit card facilities, Merchant shall process credit card transactions on behalf of Agent and for Agent's account, applying + +13 + + + + + +Case 18-10248- MFW Doc 632-1 Filed 04/18/18 Page 15 of 60 + +customary practices and procedures. Without limiting the foregoing, Merchant shall cooperate with Agent to download data from all credit card terminals each day during the Sale Term to effect settlement with Merchant's credit card processor(s), and shall take such other actions necessary to process credit card transactions on behalf of Agent under Merchant's identification number(s). At Agent's request, Merchant shall cooperate with Agent to establish Merchant's identification numbers under Agent's name to enable Agent to process all such credit card GOB Sale Proceeds for Agent's account. Merchant shall not be responsible for, and Agent shall pay as an Expense hereunder, all credit card fees, charges, and chargebacks related to the GOB Sale, whether received during or after the Sale Term. Agent shall not be responsible for, as an Expense or otherwise, any credit card fees, charges, or chargebacks relating to periods prior to the Closing. + +(c) Unless and until Agent establishes its own Agency Accounts (other than Merchant's Designated Deposit Accounts), all GOB Sale Proceeds and other amounts contemplated by this Agreement (including credit card GOB Sale Proceeds), shall be collected by Merchant and deposited on a daily basis into depository accounts designated by, and owned and in the name of, Merchant for the Stores, which accounts shall be designated solely for the deposit of GOB Sale Proceeds and other amounts contemplated by this Agreement (including credit card GOB Sale Proceeds), and the disbursement of amounts payable to or by Agent hereunder (the "Designated Deposit Accounts"). All funds in the Designated Deposit Accounts shall at all times be held in trust for the benefit of Purchaser, subject to Agent's obligation to pay Expenses and fund the Wind-Down Payment. The Designated Deposit Accounts shall be cash collateral accounts, with all cash, credit card payments, checks and similar items of payment, deposits and any other amounts in such accounts being GOB Sale Proceeds or other amounts contemplated hereunder, and Merchant hereby grants to Purchaser, subject to Agent's obligation hereunder to fund the Wind-Down Payment and Expenses, a first priority senior security interest in each Designated Deposit Account and all funds on deposit in such accounts from and after the Closing. + +(d) Merchant shall take all actions necessary to designate Agent as an authorized signer on all Designated Deposit Accounts and to grant Agent the ability to initiate wire transfers from such Designated Deposit Accounts, provided that Purchaser's interest in the Designated Deposit Accounts shall be subject to Agent's obligation to pay Expenses and fund the Wind-Down Payment. + +(e) On each business day to the extent practicable, Merchant shall promptly pay to Agent by wire funds transfer all funds in the Designated Deposit Accounts (including, without limitation, GOB Sale Proceeds, GOB Sale Proceeds from credit card sales, and all other amounts) deposited into the Designated Deposit Accounts for the prior day(s), subject to Section 3.2(c) above. + +Section 4. Expenses. + +4.1 Subject to and only upon entry of the Approval Order, in addition to and not subject to the Wind-Down Payment or Wind-Down Cap, Agent shall be unconditionally responsible for all "Expenses," which shall be paid by Agent in accordance with Section 4.2 + +14 + + + + + +Case 18-10248- MFW Doc 632-1 Filed 04/18/18 Page 16 of 60 + +below. As used herein, "Expenses" shall mean the Store-level operating expenses that arise during the Sale Term, limited to the following: + +(a) actual payroll with respect to all Retained Employees used in connection with conducting the GOB Sale for actual days/hours worked at a Store during the Sale Term as well as payroll for any temporary labor engaged for the GOB Sale during the Sale Term; + +(b) any amounts payable by Merchant for benefits for Retained Employees (including FICA, unemployment taxes, workers' compensation and healthcare insurance, but excluding Excluded Payroll Benefits) for Retained Employees used in the GOB Sale, in an amount not to exceed 23% of the base payroll for all Retained Employees (the "Payroll Benefits Cap"); + +(c) subject to Section 6.1, the actual Occupancy Expenses categorized on Exhibit 4.1(c) in all cases limited on a per Store, per diem basis not to exceed the respective aggregate monthly amounts shown on Exhibit 4.1(c); + +(d) Retention Bonuses for Retained Employees, as provided for in Section 9.4 below; + +(e) advertising and direct mailings relating to the GOB Sale, Store interior and exterior signage and banners, and sign-walkers, in each case relating to the GOB Sale, including the amounts set forth in section 15.1; + +(f) credit card fees, bank card fees, and chargebacks and credit/bank card discounts with respect to Merchandise sold in the GOB Sale; + +(g) bank service charges (for Store, corporate accounts, and Agency Accounts), check guarantee fees, and bad check expenses to the extent attributable to the GOB Sale; + +(h) costs for additional Supplies at the Stores necessary to conduct the GOB Sale as and to the extent requested by Agent; + +(i) all fees and charges required to comply with applicable laws in connection with the GOB Sale as and to the extent agreed to by Agent; + +(j) Store cash theft and other store cash shortfalls in the registers; + +(k) all actual costs and expenses associated with Agent's on-site supervision of the Stores and Distribution Centers, including (but not limited to) any and all fees, wages, taxes, third party payroll costs and expenses, and deferred compensation of Agent's field personnel, travel to, from or between the Stores and Distribution Centers, and out-of-pocket and commercially reasonable expenses relating thereto (including reasonable and documented corporate travel to monitor and manage the GOB Sale); + +(l) postage, courier and overnight mail charges requested by Agent to the extent relating to the GOB Sale; + +15 + + + + + +Case 18-10248- MFW Doc 632-1 Filed 04/18/18 Page 17 of 60 + +(m) third party payroll processing expenses associated with the GOB Sale; + +(n) costs of transfers initiated by Agent of Merchandise and Additional Agent Merchandise between and among the Stores and Distribution Centers during the Sale Term, including delivery and freight costs, it being understood that Agent shall be responsible for coordinating such transfer of Merchandise; + +(o) retention payments for Merchant's corporate employees in an amount not to exceed $300,000 in the aggregate, subject to agreement of Merchant and Purchaser in their respective discretion; + +(p) to the extent Agent elects to use Merchant's e-commerce site and related sales platform ("E-Commerce Platform"), costs of operating the E- Commerce Platform equal to (i) actual expenses to operate the E-Commerce Platform in an amount equal to $300,000 per week (prorated for partial weeks), plus (ii) the actual costs of shipping Online Merchandise to customers who purchase such Online Merchandise through the E-Commerce Platform from the Sale Commencement Date through and including the date that is seven (7) days after Agent provides Merchant with notice of Agent's intention to discontinue using the E-Commerce Platform as a sales platform to fulfill customer orders, plus (iii) actual marketing expenses related to the E-Commerce Platform specifically requested by Agent in writing (including by email) such as, but not limited to, paid search and external advertising; and + +(q) compensation of a consumer privacy ombudsman, if one is appointed by the United States Trustee, subject to approval of such compensation by the Bankruptcy Court. + +Notwithstanding anything herein to the contrary, to the extent that any Expense category listed in section 4.1 is also included on Exhibit 4.1(c), Exhibit 4.1(c) shall control and such Expenses shall not be double counted. There will be no double counting or payment of Expenses to the extent that Expenses appear or are contained in more than one Expense category. + +As used herein, the following terms have the following respective meanings: + +(i) "Central Service Expenses" means costs and expenses for Merchant's central administrative services necessary for the GOB Sale, including, but not limited to, internal payroll processing, MIS services, cash and inventory reconciliation, data processing and reporting, information technology updates, functionality, and maintenance, and accounting (collectively, "Central Services"). + +(ii) "Excluded Payroll Benefits" means (i) the following benefits arising, accruing or attributable to the period prior to, during, or after the Sale Term: (w) vacation days or vacation pay, (x) sick days or sick leave or any other form of paid time off, (y) maternity leave or other leaves of absence and (z) ERISA coverage and similar contributions and/or (ii) any other benefits in excess of the Payroll Benefits Cap, including, without limitation, any payments due under the WARN Act. + +(iii) "Occupancy Expenses" means, with respect to the Stores, base rent, percentage rent, HVAC, utilities, CAM, storage costs, real estate and use taxes, Merchant's association dues and expenses, utilities expenses, cash register maintenance, routine repairs, + +16 + + + + + +Case 18-10248- MFW Doc 632-1 Filed 04/18/18 Page 18 of 60 + +building maintenance, trash and snow removal, housekeeping and cleaning expenses, local and long-distance telephone and internet/wifi expenses, security (including, without limitation, security systems, courier and guard service, building alarm service and alarm service maintenance), and rental for furniture, fixtures and equipment. + +(iv) "Third Party" means, with reference to any Expenses to be paid to a Third Party, a party which is not affiliated with or related to Merchant. + +(v) Notwithstanding any other provision of this Agreement to the contrary, "Expenses" shall not include: (i) Excluded Payroll Benefits; (ii) Central Service Expenses, (iii) Occupancy Expenses or any occupancy-related expenses of any kind or nature in excess of the respective per Store occupancy- related amounts expressly provided for as an Expense under Section 4.1(c) above; (iv) any expenses of any kind relating to or arising from Merchant's home office, and/or (v) any other costs, expenses or liabilities payable by Merchant not provided for herein, all of which shall be paid solely by Merchant (including from the Wind-Down Payment, to the extent provided in the Wind-Down Budget). + +4.2 Payment of Expenses. + +Subject to and only upon entry of the Approval Order, Agent shall be responsible for the payment of all Expenses out of Proceeds (or from Agent's own accounts if and to the extent there are insufficient Proceeds). All Expenses incurred during each week of the GOB Sale (i.e. Sunday through Saturday) shall be paid by Agent to or on behalf of Merchant, or paid by Merchant and thereafter reimbursed by Agent as provided for herein; provided, however, in the event that the actual amount of an Expense is unavailable on the date of the reconciliation (such as payroll), Merchant and Agent shall agree to an estimate of such amounts, which amounts will be reconciled once the actual amount of such Expense becomes available. Agent and/or Merchant may review or audit the Expenses at any time. + +4.3 Distribution Center Expenses + +Agent shall be responsible for allocating and designating the shipment of Merchandise from Merchant's Distribution Centers to the Stores. All costs and expenses of operating the Distribution Centers, including, but not limited to, use and occupancy expenses, Distribution Center employee payroll and other obligations, and/or processing, transferring, consolidating, shipping, and/or delivering goods within or from the Distribution Centers (the "Distribution Center Expenses"), shall be borne by Agent as an Expense except to the extent provided for in the Wind-Down Budget. + +Section 5. Merchandise. + +5.1 Merchandise Subject to This Agreement. + +(a) "Excluded Goods" means all (1) goods that are not owned by Merchant, including but not limited to goods that belong to sublessees, licensees, department lessees, or concessionaires of Merchant and (2) goods held by Merchant on memo, on consignment (except to the extent otherwise agreed by the applicable consignor), or as bailee. Merchant shall be + +17 + + + + + +Case 18-10248-MFW Doc 632-1 Filed 04/18/18 Page 19 of 60 + +solely responsible for the disposition and/or abandonment of all Excluded Goods and all costs, expenses, and obligations associated therewith. Purchaser shall incur no cost, expense, or obligation in connection with any Excluded Goods. + +(b) "Merchandise" means all goods owned by Merchant for resale as of the occurrence of the Closing, other than Excluded Goods. + +(c) "On-line Merchandise" means all inventory that is both (i) designated for sale through the E-Commerce Platform as of the Sale Commencement Date and (ii) located in Merchant's West Jefferson Distribution Center as of the Sale Commencement Date. + +5.2 Distribution Center Allocation. Allocation and designation of Merchandise located in the Distribution Centers to the Stores shall be in Agent's sole discretion, subject to the Wind-Down Budget. + +Section 6. Sale Term. + +6.1 Term. Subject to satisfaction of the conditions precedent set forth in Section 10 hereof, the GOB Sale shall commence at each Store on a date determined by Agent in its sole discretion after the occurrence of the Closing (the "Sale Commencement Date") and shall end at each Store no later than August 31, 2018 (the "Sale Termination Date", and the period from the Sale Commencement Date to the Sale Termination Date as to each Store being the "Sale Term"), provided that the Sale Commencement Date shall occur no later than April 19, 2018. Agent may, in its discretion, earlier terminate the GOB Sale on a Store-by- Store basis upon not less than seven (7) days' prior written notice (a "Vacate Notice") to Merchant (the "Vacate Date"), provided, that it being understood that Agent's obligations to pay all Expenses, including Occupancy Expenses, for each Store subject to a Vacate Notice shall continue until the applicable Vacate Date, provided, however, that, with respect to Occupancy Expenses, Agent's obligations to pay all Occupancy Expenses for each Store shall continue until the last day of the calendar month in which the Vacate Date occurs for such Store. + +6.2 Vacating the Stores. At the conclusion of the GOB Sale, Agent agrees to leave each Store in "broom clean" condition, ordinary wear and tear excepted, except for unsold items of Owned FF&E which may be abandoned by Agent in place in a neat and orderly manner pursuant to Section 7 below. Agent shall vacate each Store on or before the Sale Termination Date as provided for herein, at which time Agent shall surrender and deliver the Store premises, and Store keys, to Merchant unless the applicable Lease is being conveyed pursuant to the Lease/Contract Designation Rights. Agent's obligations to pay all Expenses for the Stores shall continue as provided for in Section 6.1. + +Section 7. FF&E. + +7.1 Abandonment of FF&E. Agent shall be authorized to abandon any and all FF&E, whether owned or not by Merchant, in place without any cost or liability to Agent. For the avoidance of doubt, Agent shall have no responsibility whatsoever with respect to FF&E that is not owned by Merchant, provided that nothing in this Section 7 shall limit Agent's rights with + +18 + + + + + +Case 18-10248- MFW Doc 632-1 Filed 04/18/18 Page 20 of 60 + +respect to Owned FF&E under the Asset Designation Rights or with respect to leased FF&E under the Lease/Contract Designation Rights. + +Section 8. Conduct of the GOB Sale. + +8.1 Rights of Agent. Subject to entry of the Approval Order, in addition to any other rights granted to Agent elsewhere in this Agreement, Agent shall be permitted to conduct the GOB Sale as a "going out of business", "store closing", "sale on everything", "everything must go", or similar themed sale throughout the Sale Term without compliance with any Liquidation Sale Laws. The Agent shall conduct the GOB Sale in the name of and on behalf of Merchant in a commercially reasonable manner and in compliance with the terms of this Agreement and subject to the Approval Order. Agent shall conduct the GOB Sale in accordance with the sale guidelines attached hereto as Exhibit 8.1(the "Sale Guidelines"). In addition to any other rights granted to Agent hereunder in conducting the GOB Sale the Agent, in the exercise of its reasonable discretion shall have the right: + +(a) to establish Sale prices and discounts and Store hours; + +(b) except as otherwise expressly included as an Expense, to use without charge during the Sale Term all FF&E, computer hardware and software, existing Supplies, intangible assets (including Merchant's name, logo and tax identification numbers), Store keys, case keys, security codes and safe and lock combinations required to gain access to and operate the Stores, and any other assets of Merchant located at the Stores (whether owned, leased, or licensed); + +(c) (i) consistent with the Wind-Down Budget, to be provided by Merchant with central office facilities, central administrative services and personnel to process and perform Central Services and provide other central office services reasonably necessary for the GOB Sale; (ii) to use reasonably sized offices located at Merchant's central office facility to effect the GOB Sale; and (iii) to use all customer lists, mailing lists, email lists, and web and social networking sites utilized by Merchant in connection with its business (to the extent such items can be segregated to the Stores and solely in connection with the GOB Sale and pursuant to such reasonable restrictions requested by Merchant in order for Merchant to comply with its privacy policy and applicable laws governing the use and dissemination of confidential consumer personal data); + +(d) to establish and implement advertising, signage and promotion programs consistent with the "going out of business", "store closing", "sale on everything", "everything must go", or similar themed sale, including without limitation by means of media advertising, and similar interior and exterior signs and banners, and the use of sign walkers, each at Agent's expense; and + +(e) to transfer Merchandise between and among the Stores and Distribution Centers at Agent's expense. + +8.2 Terms of Sales to Customers; Final/As Is Sales. All sales of Merchandise will be "final sales" and "as is," and appropriate signage and sales receipts will reflect the same. Agent + +19 + + + + + +Case 18-10248- MFW Doc 632-1 Filed 04/18/18 Page 21 of 60 + +shall not warrant the Merchandise in any manner, but will, to the extent legally permissible, pass on all manufacturers' warranties to customers. All sales will be made only for cash or nationally recognized bank credit cards. Upon entry of the Approval Order, Agent shall not accept or honor coupons during the Sale Term. The Agent shall clearly mark all receipts for the Merchandise sold at the Stores during the Sale Term so as to distinguish such Merchandise from the goods sold prior to the Sale Commencement Date. Unless otherwise agreed between Agent and the issuer of Merchant's private-label credit cards ("PLCCs"), Agent shall not accept PLCCs as a form of payment during the Sale. + +8.3 Sales Taxes. + +(a) During the Sale Term, all sales, excise, gross receipts and other taxes attributable to sales of Merchandise and Additional Agent Merchandise, as indicated on Merchant's point of sale equipment (other than taxes on income) payable to any taxing authority having jurisdiction (collectively, "Sales Taxes") shall be added to the sales price of Merchandise and Additional Agent Merchandise and collected by Agent, on Merchant's behalf, at the time of sale. All Sales Taxes shall be deposited into a segregated account designated by Merchant and Agent solely for the deposit of such Sales Taxes (the "Sales Taxes Account"). Merchant shall prepare and file all applicable reports and documents required by the applicable taxing authorities, and Merchant shall promptly pay all Sales Taxes from the Sales Taxes Account. Merchant will be given access to the computation of gross receipts for verification of all such tax collections. Provided that Agent performs its responsibilities in accordance with this Section 8.3, Agent shall have no further obligation to Merchant, any taxing authority, or any other party, and Merchant shall indemnify and hold harmless Agent from and against any and all costs, including, but not limited to, reasonable attorneys' fees, assessments, fines or penalties which Agent sustains or incurs as a result or consequence of the failure by Merchant to promptly pay such taxes to the proper taxing authorities and/or the failure by Merchant to promptly file with such taxing authorities all reports and other documents required by applicable law to be filed with or delivered to such taxing authorities. If Agent fails to perform its responsibilities in accordance with this Section 8.3, and provided Merchant complies with its obligations hereunder, Agent shall indemnify and hold harmless Merchant from and against any and all costs, including, but not limited to, reasonable attorneys' fees, assessments, fines or penalties which Merchant sustains or incurs as a result or consequence of the failure by Agent to collect Sales Taxes and/or the failure by Agent to promptly deliver any and all reports and other documents required to enable Merchant to file any requisite returns with such taxing authorities. + +(b) Without limiting the generality of Section 8.3(a) hereof, it is hereby agreed that, as Agent is conducting the GOB Sale solely as agent for Merchant, various payments that this Agreement contemplates that one party may make to the other party (including the payment by Agent of the Guaranteed Amount) do not represent the sale of tangible personal property and, accordingly, are not subject to Sales Taxes. + +8.4 Supplies. Agent shall have the right to use, without charge, all existing supplies located at the Stores, Distribution Centers and corporate office(s), including, without limitation, boxes, bags, paper, twine and similar sales materials (collectively, "Supplies"). In the event that additional Supplies are required in any of the Stores during the GOB Sale, Merchant agrees to + +20 + + + + + +Case 18-10248- MFW Doc 632-1 Filed 04/18/18 Page 22 of 60 + +promptly provide the same to Agent, if available, for which Agent shall reimburse Merchant at Merchant's cost therefor. + +8.5 Returns of Merchandise. Agent shall accept returns of goods sold by Merchant prior to the Closing for a period of ten days from and including the Sale Commencement Date. Thereafter, Agent shall have no obligation to accept returns of goods sold by Merchant prior to the Closing. Agent's acceptance of returns shall not impact the Wind-Down Budget or the Wind-Down Cap. + +8.6 Gift Certificates & Credits. Agent shall accept Merchant's gift certificates, gift cards, store credits, return credits, or similar merchandise credits issued by Merchant (collectively, "Gift Certificates") for a period of ten days from and including the Sale Commencement Date. Thereafter, Agent shall have no obligation to accept Gift Certificates. Agent's acceptance of Gift Certificates shall not impact the Wind-Down Budget or the Wind-Down Cap. + +8.7 Right to Monitor. Merchant shall have the right to monitor the GOB Sale and activities attendant thereto and to be present in the Stores during the hours when the Stores are open for business; provided that Merchant's presence does not unreasonably disrupt the conduct of the Sale. Merchant shall also have a right of access to the Stores at any time in the event of an emergency situation and shall promptly notify Agent of such emergency. + +8.8 Sale Reconciliation. On each Wednesday during the Sale Term, Agent and Merchant shall cooperate to reconcile Expenses, make payments/setoffs on account of the GOB Sale Proceeds and reconcile such other GOB Sale-related items as either party shall reasonably request, in each case for the prior week or partial week (i.e. Sunday through Saturday), all pursuant to procedures agreed upon by Merchant and Agent (the "Weekly Sale Reconciliation"). Within thirty (30) days after the end of the Sale Term, or as soon as practicable thereafter, Agent and Merchant shall complete a final reconciliation of the Sale (the "Final Reconciliation"), the written results of which shall be certified by representatives of each of the Merchant and Purchaser as a final settlement of accounts between the Merchant and Purchaser with respect to the GOB Sale. Within five (5) days after the completion of the Final Reconciliation and execution of a settlement letter including an appropriate mutual release for the benefit of Merchant and Purchaser, Agent shall pay to Merchant, or Merchant shall pay to Agent, as the case may be, any and all amounts due the other pursuant to the Final Reconciliation. The Approval Order shall provide that the Final Reconciliation, once agreed to by Merchant and Purchaser, shall be automatically deemed approved pursuant to Bankruptcy Code section 105(a) and Rule 9019 of the Federal Rules of Bankruptcy Procedure without further order of the Bankruptcy Court or action by any party. During the Sale Term, and thereafter until all of Merchant's and Purchaser's and Agent's obligations under this Agreement have been satisfied, Merchant and Purchaser shall have reasonable access to Merchant's and Purchaser's records with respect to the GOB Sale (including, but not limited to Merchandise, GOB Sale Proceeds, and Expenses) to review and audit such records. + +21 + + + + + +Case 18-10248- MFW Doc 632-1 Filed 04/18/18 Page 23 of 60 + +8.9 Additional Agent Merchandise. + +(a) Agent shall be entitled to include in the Sale additional merchandise procured by Agent which is of like kind as, and no lesser quality to, the Merchandise located in the Stores ("Additional Agent Merchandise"). Agent shall be responsible for payment of all costs associated with any Additional Agent Merchandise. All proceeds of the sale of Additional Agent Merchandise shall remain the exclusive property of Agent. + +(b) The Additional Agent Merchandise shall be at all times subject to the control of Agent. If requested by Agent, Merchant shall, at Agent's expense, insure the Additional Agent Merchandise and, if required, promptly file any proofs of loss with regard to same with Merchant's insurers. + +(c) Any transactions relating to the Additional Agent Merchandise are, and shall be construed as, a true consignment from Agent to Merchant. Merchant acknowledges, and the Approval Order (as and when applicable) shall provide, that the Additional Agent Merchandise shall be consigned to Merchant as a true consignment under Article 9 of the Uniform Commercial Code in effect in the State of Delaware (the "UCC"). Agent is hereby, and shall be through the Approval Order, granted a first priority security interest in (i) the Additional Agent Merchandise and (ii) the Additional Agent Merchandise Proceeds, which security interest shall be deemed perfected pursuant to the Approval Order without the requirement of filing UCC financing statements or providing notifications to any prior secured parties (provided that Agent is hereby authorized to deliver any notices and file any financing statements and amendments thereof under the applicable UCC identifying Agent's interest in the Additional Agent Merchandise and any proceeds from the sale thereof as consigned goods thereunder and Merchant as the consignee therefor, and Agent's security interest in such Additional Agent Merchandise and Additional Agent Merchandise proceeds. + +(d) Agent shall provide signage in the Stores notifying customers that the Additional Agent Merchandise has been included in the Sale. + +8.10 E-Commerce Platform. Subject to the Wind-Down Budget and payment of Expenses, Agent shall use the E-Commerce Platform in connection with the GOB Sale to fulfill customer orders made during the GOB Sale Term and otherwise promote the GOB Sale (in Agent's capacity as Agent hereunder), provided that Agent shall have the option, in its sole discretion, to terminate the use of the E-Commerce Platform at any time after four weeks of use. During the use of the E-Commerce Platform, and consistent with the Wind-Down Budget (i) Merchant shall continue to provide for the operation and maintenance of the E-Commerce Platform, including information technology and E-Commerce Platform updates, and provide Agent with all assistance with respect to the functionality of the E-Commerce Platform, fulfillment of orders, and promotion of the GOB Sale and (ii) Agent shall pay as an Expense those amounts reflected in Section 4.1(p) through and including the date that is seven (7) days after Agent provides Merchant with notice of Agent's intention to discontinue using the E-Commerce Platform as a sales platform to fulfill customer orders (the "LDOB Date"); provided, however, that, if Agent continues the Sale at the Stores after the LDOB Date, Merchant shall, as a Central Service and at no cost or expense to Agent (other than as provided in the Wind-Down Budget), maintain the E-Commerce Platform with limited functionality for the limited purposes + +22 + + + + + +Case 18-10248- MFW Doc 632-1 Filed 04/18/18 Page 24 of 60 + +of advertising and promoting the Sale at the Stores, periodically updating such advertising and promotions, and maintaining and updating the Store locator function at no cost or expense to Agent. With respect to the E-Commerce Platform, (i) Agent shall be authorized to sell Additional Agent Goods through the E- Commerce Platform and (ii) the Parties may implement such other processes, procedures, and agreements as may be necessary or appropriate for the efficient and continued operation of the E-Commerce Platform. In the event Agent elects to discontinue using the E-Commerce Platform as a sales platform to fulfill customer orders, Merchant agrees that neither Merchant nor any other person or entity shall complete any sale of goods for Merchant's or any other person's or entity's account utilizing the E-Commerce Platform during the GOB Sale Term, Merchant shall otherwise comply with Merchant's obligations under this Agreement in respect of the E-Commerce Platform, and Merchant shall, as a Central Service and at no cost or expense to Agent (other than as provided in the Wind-Down Budget), maintain the E-Commerce Platform with limited functionality for the limited purposes of advertising and promoting the GOB Sale at the Stores, periodically updating such advertising and promotions, and maintaining and updating the Store locator function. As part of the Allocation Schedule, Merchant and Agent shall mutually agree upon an allocation of certain On-line Merchandise to be promptly delivered to the Stores and not sold through the E-Commerce Platform (the "Designated On-line Merchandise"). In the event Agent ceases using the E-Commerce Platform as a sales platform prior to the Sale Termination Date, Merchant shall be responsible for processing and ticketing all Merchandise not sold through the E-Commerce Platform for sale in the Stores and delivering any remaining On-line Merchandise (the "Remaining On-line Merchandise") to the Stores according to a mutually agreed upon allocation schedule. + +Section 9. Employee Matters. + +9.1 Merchant's Employees. Subject to the Wind-Down Budget and payment of Expenses, Agent may use Merchant's employees in the conduct of the Sale to the extent Agent deems necessary for the Sale, and Agent may select and schedule the number and type of Merchant's employees required for the Sale. Agent shall identify any such employees to be used in connection with the Sale (each such employee, a "Retained Employee"). Notwithstanding the foregoing, Merchant's employees shall at all times remain employees of Merchant. Agent's selection and scheduling of Merchant's employees shall at all times comply with all applicable laws and regulations. Merchant and Agent agree that, except to the extent that wages and benefits of Retained Employees constitute Expenses hereunder, nothing contained in this Agreement and none of Agent's actions taken in respect of the Sale shall be deemed to constitute an assumption by Agent of any of Merchant's obligations relating to any of Merchant's employees including, without limitation, Excluded Payroll Benefits, Worker Adjustment Retraining Notification Act ("WARN Act") claims and other termination type claims and obligations, or any other amounts required to be paid by statute or law; nor shall Agent become liable under any employment agreement, collective bargaining agreement, or be deemed a joint or successor employer with respect to such employees. For the avoidance of doubt, Merchant shall be responsible for providing any required notice under the WARN Act with respect to its employees and otherwise comply with the WARN Act with respect to any "plant closing" or "mass layoff' (as defined in the WARN Act) or group termination or similar event affecting the employees, whether before or after the date of this Agreement. Merchant shall not, without the prior consent of Agent, raise the salary or wages or increase the benefits for, or pay any bonuses + +23 + + + + + +Case 18-10248- MFW Doc 632-1 Filed 04/18/18 Page 25 of 60 + +or other extraordinary payments to, any Store or Distribution Center employees prior to the Sale Termination Date. Merchant shall not transfer any employee in anticipation of the Sale nor any Retained Employee during the Sale Term, in each case without Agent's prior consent. To the extent reasonably requested by Agent, and at Agent's expense, Merchant shall use commercially reasonable efforts to hire additional temporary employees to facilitate the GOB Sale, which employees shall constitute Retained Employees for purposes of this Agreement. + +9.2 Termination of Employees. Agent may in its discretion stop using any Retained Employee at any time during the Sale, subject to the conditions provided for herein. In the event that Agent desires to cease using any Retained Employee, Agent shall notify Merchant at least seven (7) days prior thereto; provided, however, that, in the event that Agent determines to cease using an employee "for cause" (such as dishonesty, fraud or breach of employee duties), the seven (7) day notice period shall not apply; provided, further, however, that Agent shall immediately notify Merchant of the basis for such "cause." From and after the date of this Agreement and until the Sale Termination Date, Merchant shall not transfer or dismiss employees of the Stores or Distribution Centers except "for cause" without Agent's prior consent. Notwithstanding the foregoing, Agent shall not have the right to terminate the actual employment of any employee, but rather may only cease using such employee in the Sale and paying any Expenses with respect to such employee (and all decisions relating to the termination or non-termination of such employees shall at all times rest solely with Merchant). + +9.3 Payroll Matters. During the Sale Term, Merchant shall process the payroll for all Retained Employees and any former employees and temporary labor engaged for the Sale. Each Wednesday (or such other date as may be reasonably requested by Merchant to permit the funding of the payroll accounts before such payroll is due and payable) during the Sale Term, Agent shall transfer to Merchant's payroll accounts an amount equal to the base payroll for Retained Employees plus related payroll taxes, workers' compensation and benefits for such week, to the extent such amount constitutes Expenses hereunder. + +9.4 Employee Retention Bonuses. Subject to approval by the Bankruptcy Court, Agent may pay, as an Expense, retention bonuses and/or severance pay ("Retention Bonuses") (which bonuses shall be inclusive of payroll taxes, but as to which no benefits shall be payable), up to a maximum of $7,400,000 in the aggregate, to such Retained Employees who do not voluntarily leave employment, are not otherwise entitled to receive severance pay, and are not terminated "for cause," as Agent may determine in its discretion. Subject to approval by the Bankruptcy Court, the amount of such Retention Bonuses shall be in an amount to be determined by Agent, in its discretion, and shall be payable within thirty (30) days after the Sale Termination Date, and shall be processed through Merchant's payroll system. + +Section 10. Conditions Precedent and Subsequent. + +(a) The willingness of Purchaser to enter into the transactions contemplated under this Agreement, and the occurrence of the Closing, are directly conditioned upon the satisfaction of the following conditions at the time or during the time periods indicated, unless specifically waived in writing by Purchaser in its sole discretion: + +24 + + + + + +Case 18-10248- MFW Doc 632-1 Filed 04/18/18 Page 26 of 60 + +(i) Entry of the Approval Order shall have occurred no later than April 18, 2018; + +(ii) All representations and warranties of Merchant hereunder shall be true and correct in all material respects as of the Closing, and Merchant shall have in all material respects performed the obligations and complied with the covenants required by this Agreement to be performed or complied with by it prior to the Closing; and + +(iii) All of the Parties shall have executed this Agreement. + +(b) The willingness of Merchant to enter into the transactions contemplated under this Agreement, and the occurrence of the Closing, are directly conditioned upon the satisfaction of the following conditions at the time or during the time periods indicated, unless specifically waived in writing by Merchant: + +(i) The Bankruptcy Court shall have entered the Approval Order no later than April 18, 2018; + +(ii) All representations and warranties of Purchaser hereunder shall be true and correct in all material respects as of the Closing, and Purchaser shall have in all material respects performed the obligations and complied with the covenants required by this Agreement to be performed or complied with by it prior to the Closing; and + +(iii) All of the Parties shall have executed this Agreement. + +Section 11. Representations, Warranties and Covenants. + +11.1 Merchant's Representations, Warranties and Covenants. Merchant hereby represents, warrants and covenants in favor of Purchaser as follows: + +(a) As of the date of this Agreement and at the Closing, Merchant (i) is duly organized, validly existing and in good standing under the laws of State of Delaware; (ii) has all requisite corporate power and authority to own, lease and operate the Assets and to carry on its business as presently conducted; (iii) is, and during the Sale Term will continue to be, duly authorized and qualified to do business and in good standing in each jurisdiction where the nature of its business or properties requires such qualification, including all jurisdictions in which the Stores are located, except, in each case, to the extent that the failure to be in good standing or so qualified could not reasonably be expected to have a material adverse effect on the ability of Merchant to execute and deliver this Agreement and perform fully its obligations hereunder; and (iv) has paid when due, and until the sale or other disposition of all of the Assets, will continue to pay when due, all United States Trustee fees. + +(b) Subject only to entry of the Approval Order, Merchant, as of the date of this Agreement and at the Closing, has the right, power and authority to execute and deliver this Agreement and each other document and agreement contemplated hereby (collectively, together with this Agreement, the "Agency Documents") and to perform fully its obligations thereunder. Merchant has taken all necessary actions required to authorize the execution, delivery and performance of the Agency Documents, and no further consent or approval is required for + +25 + + + + + +Case 18-10248- MFW Doc 632-1 Filed 04/18/18 Page 27 of 60 + +Merchant to enter into and deliver the Agency Documents, to perform its obligations thereunder and to consummate the Sale, except for any such consent the failure of which to be obtained could not reasonably be expected to prevent or materially delay or impair the ability of Merchant to execute and deliver this Agreement and perform fully its obligations hereunder. Each of the Agency Documents has been duly executed and delivered by Merchant and, upon the due authorization, counter-execution, and delivery of this Agreement by Purchaser, constitutes the legal, valid and binding obligation of Merchant enforceable in accordance with its terms. + +(c) The Cash Purchase Price determined pursuant to Section 3.1(a) above shall not exceed $574,831,000 as of April 19, 2018. + +(d) Merchant, as of the date of this Agreement and at the Closing, owns good and marketable title to all of the Assets, free and clear of all security interests, liens, claims and encumbrances of any nature other than the security interests securing the DIP Obligations (as defined in the Final DIP Order) and the Second-Lien Notes. Merchant shall not create, incur, assume or suffer to exist any security interest, lien or other charge or encumbrance upon or with respect to any of the Assets. From and after the Closing, subject to the Wind-Down Budget, Merchant shall perform such tasks and services as are necessary to maintain all of the Assets in salable condition, to preserve the Assets and the economic value thereof, and to maintain good, clear, and marketable title to all of the Assets at all times until all Assets have been sold or otherwise disposed of, and such tasks and services as Purchaser may otherwise reasonably request in connection with the Assets, including but not limited to paying all ad valorem taxes and utilities when due, performing all routine maintenance, cooperating with Purchaser to obtain the refund of all deposits and security deposits, and renewing all necessary licenses and registrations (collectively, all of the foregoing are the "Wind-Down Services"). + +(e) Merchant has maintained its pricing files in the ordinary course of business, and prices charged to the public for goods are the same in all material respects as set forth in such pricing files for the periods indicated therein, all pricing files and records are true and accurate in all material respects as to the actual cost to Merchant for purchasing the goods referred to therein and as to the selling price to the public for such goods without consideration of any point of sale discounts, as of the dates and for the periods indicated therein. Merchant represents that (i) the ticketed prices of all items of Merchandise do not and shall not include any Sales Taxes and (ii) all registers located at the Stores are programmed to correctly compute all Sales Taxes required to be paid by the customer under applicable law, as such calculations have been identified to Merchant by its retained service provider. + +(f) Through the Sale Commencement Date, Merchant has ticketed or marked, and shall continue to ticket or mark, all items of inventory received at the Stores in a manner consistent with similar Merchandise located at the Stores, and in accordance with Merchant's ordinary course past practices and policies relative to pricing and marking inventory. + +(g) Since March 1, 2018, Merchant has not, and through the Sale Commencement Date Merchant shall not, purchase for or transfer to or from the Stores any merchandise or goods outside the ordinary course. + +26 + + + + + +Case 18-10248- MFW Doc 632-1 Filed 04/18/18 Page 28 of 60 + +(h) To Merchant's knowledge after reasonable inquiry, all Merchandise is in compliance with all applicable federal, state and local product safety laws, rules and standards. Merchant shall provide Agent with its historic policies and practices, if any, regarding product recalls prior to the Sale Commencement Date. + +(i) Subject to the Wind-Down Budget, Merchant shall, throughout the Sale Term, maintain in good working order, condition, and repair all cash registers, heating systems, air conditioning systems, elevators, escalators and all other mechanical devices necessary or appropriate for the conduct of the Sale at the Stores. Except as otherwise restricted by the Bankruptcy Code upon filing of the Bankruptcy Case or the Wind-Down Budget, and absent a bona fide dispute, throughout the Sale Term, Merchant shall remain current on all expenses and payables necessary or appropriate for the conduct of the GOB Sale. + +(j) Subject the Wind-Down Budget, payment of Expenses by Agent, and approval by the Bankruptcy Court, Merchant has paid, and will continue to pay throughout the Sale Term, all self-insured or Merchant-funded employee benefit programs for Store employees, including health and medical benefits and insurance and all proper claims made or to be made in accordance with such programs. + +(k) Since March 1, 2018, Merchant has not taken, and shall not throughout the Sale Term take, any actions with the intent of increasing the Expenses of the Sale, including without limitation increasing salaries or other amounts payable to employees; except to the extent an employee was due an annual raise in the ordinary course. + +(l) Prior to the execution of this Agreement, Merchant has provided Agent reasonable access to all pricing and cost files, computer hardware, software and data files, inter-Stores transfer logs, markdown schedules, invoices, style runs and all other documents relative to the price, mix and quantities of inventory located at the Stores and the Distribution Centers or on order or in transit. + +(m) To Merchant's knowledge after reasonable inquiry, all documents, information and supplements provided by Merchant to Agent in connection with Agent's due diligence and the negotiation of this Agreement were true and accurate in all material respects at the time provided. + +(n) Other than filing the Bankruptcy Case, no action, arbitration, suit, notice, or legal, administrative or other proceeding before any court or governmental body has been instituted by or against Merchant, or has been settled or resolved, or to Merchant's knowledge, is threatened against or affects Merchant, relative to Merchant's business or properties, or which questions the validity of this Agreement, or that if adversely determined, would adversely affect the conduct of the Sale. + +The representations set forth in Sections 11.1(e), (f), (g), and (h) shall not survive the Closing. + +11.2 Purchaser's Representations, Warranties and Covenants. Purchaser hereby represents, warrants and covenants in favor of Merchant as follows: + +27 + + + + + +Case 18-10248- MFW Doc 632-1 Filed 04/18/18 Page 29 of 60 + +(a) Each member comprising Purchaser: (i) is duly and validly existing and in good standing under the laws of the State of its organization; (ii) has all requisite power and authority to carry on its business as presently conducted and to consummate the transactions contemplated hereby; (iii) is duly authorized and qualified to do business and in good standing in each jurisdiction where the nature of its business or properties requires such qualification, including, in the case of the entities comprising Agent, all jurisdictions in which the Stores are located, except, in each case, to the extent that the failure to be in good standing or so qualified could not reasonably be expected to have a material adverse effect on the ability of such member to execute and deliver this Agreement and perform fully its obligations hereunder. + +(b) To the extent permitted and authorized under the Indenture, (i) each member comprising Purchaser has the right, power and authority to execute and deliver each of the Agency Documents to which it is a party and to perform fully its obligations thereunder; (ii) each member comprising Purchaser has taken all necessary actions required to authorize the execution, delivery and performance of the Agency Documents, and no further consent or approval is required on the part of such member for such member to enter into and deliver the Agency Documents, to perform its obligations thereunder and to consummate the transactions contemplated thereby, and (iii) each of the Agency Documents has been duly executed and delivered by the members of Purchaser party thereto and, assuming the due authorization, execution, and delivery of this Agreement by Merchant, constitutes the legal, valid and binding obligation of such member enforceable in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium, and similar laws affecting the rights of creditors generally and by general principles of equity. No court order or decree of any federal, state or local governmental authority or regulatory body is in effect that would prevent or impair, or is required for, Purchaser's consummation of the transactions contemplated by this Agreement, and no consent of any third party which has not been obtained is required therefor, other than as provided herein. No contract or other agreement to which Purchaser is a party or by which Purchaser is otherwise bound will prevent or impair the consummation of the transactions contemplated by this Agreement. + +(c) No action, arbitration, suit, notice or legal administrative or other proceeding before any court or governmental body has been instituted by or against Purchaser, or has been settled or resolved or, to Purchaser's knowledge, has been threatened against or affects Purchaser, which questions the validity of this Agreement or any action taken or to be taken by Purchaser in connection with this Agreement or which, if adversely determined, would have a material adverse effect upon Purchaser's ability to perform its obligations under this Agreement. + +(d) The GOB Sale shall be conducted in compliance with all applicable state and local laws, rules and regulations and Merchant's leases and other agreements, except as otherwise provided for in the Sale Guidelines and Approval Order. + +(e) Absent prior consent by Merchant, Purchaser will not cause any non-emergency repairs or maintenance (emergency repairs are repairs necessary to preserve the security of a Store premise or to ensure customer safety) to be conducted at the Stores. + +(f) Purchaser shall not prosecute, or otherwise use offensively or defensively, Avoidance Actions against any of Merchant's (1) non-insider trade vendors or landlords, + +28 + + + + + +Case 18-10248-MFW Doc 632-1 Filed 04/18/18 Page 30 of 60 + +(2) employees and officers with respect to retention payments received pursuant to Retention Agreements in 2017, or (3) directors with respect to directors' fees received, and such Avoidance Actions shall be released as of the Closing. This paragraph 11.2(f) shall survive any termination of this Agreement for any reason. + +Section 12. Insurance. + +12.1 Merchant's Liability Insurance. Until the Designation Rights Termination Date or as otherwise directed by Purchaser or set forth in this Agreement, Merchant shall continue to maintain, subject to the Wind-Down Budget and the Wind-Down Cap, in such amounts as it currently has in effect, all of its liability insurance policies, including but not limited to commercial general liability, products liability, comprehensive public liability, auto liability and umbrella liability insurance, covering injuries to persons and property in, or in connection with, the Assets and/or Merchant's operation of its business and the Store and Distribution Centers; and Merchant shall cause Purchaser to be named as an additional named insured (as its interest may appear) with respect to all such policies. Merchant shall deliver to Purchaser certificates evidencing such insurance setting forth the duration thereof and naming Purchaser as an additional named insured, in form reasonably satisfactory to Purchaser. All such policies shall require at least thirty (30) days' prior notice to Purchaser of cancellation, non- renewal or material change. In the event of a claim under any such policies, Merchant shall be responsible for the payment of all deductibles, retentions or self- insured amounts thereunder (which may be reimbursed as an Expense and/or pursuant to the Wind-Down Payment, subject to the Wind-Down Budget and the Wind-Down Cap), unless it is determined that liability arose by reason of the willful misconduct or grossly negligent acts or omissions of Purchaser, or Purchaser's employees, independent contractors or agents. Merchant shall not make any change in the amount of any deductibles or self-insurance amounts on or after the date of this Agreement without Purchaser's prior written consent. + +12.2 Merchant's Casualty Insurance. Until the Designation Rights Termination Date or as otherwise directed by Purchaser or set forth in this Agreement, Merchant shall continue to maintain, subject to the Wind-Down Budget and the Wind-Down Cap, all of its presently existing property casualty coverage related to the Assets (including but not limited to fire, flood, wind, hail, natural disaster, theft, and extended coverage casualty insurance) until the sale or other disposition of all Assets covered by such policies. From and after the date of this Agreement, all such policies will also name Purchaser as an additional named insured or loss payee, as applicable (as its interest may appear). In the event of a loss to the Assets on or after the date of this Agreement, all proceeds of such insurance shall constitute Proceeds hereunder. Merchant shall deliver to Purchaser certificates evidencing such insurance, setting forth the duration thereof and naming Purchaser as an additional insured or loss payee, as applicable, in form and substance reasonably satisfactory to Purchaser. All such policies shall require at least thirty (30) days' prior notice to Purchaser of cancellation, non-renewal or material change. Merchant shall not make any change in the amount of any deductibles or self-insurance amounts on or after the date of this Agreement without Purchaser's prior written consent. Upon the sale, conveyance, or other disposition of any Asset specifically identified in any of Merchant's casualty insurance policies, Merchant, if reasonably requested by Purchaser, shall cancel the casualty coverage specifically applicable to such Asset. + +29 + + + + + +Case 18-10248- MFW Doc 632-1 Filed 04/18/18 Page 31 of 60 + +12.3 Agent's Insurance. Agent shall maintain, at Agent's cost (as an Expense) and in such amounts as Agent currently has in effect, commercial general liability policies covering injuries to persons and property in or in connection with Agent's agency at the Stores and shall cause Merchant to be named as an additional insured with respect to such policies. Agent shall deliver to Merchant certificates evidencing such insurance policies setting forth the duration thereof and naming Merchant as an additional insured, in form and substance reasonably satisfactory to Merchant. In the event of a claim under any such policies, Agent shall be responsible for the payment of all deductibles, retentions or self-insured amounts thereunder, unless it is determined that liability arose by reason of the willful misconduct or grossly negligent acts or omissions of Merchant or Merchant's employees, independent contractors or agents (other than Agent or Agent's employees, agents or independent contractors). Agent shall not make any change in the amount of any deductibles or self-insurance amounts prior to the Sale Termination Date without Merchant's prior written consent. + +12.4 Worker's Compensation Insurance. Merchant shall, at all times while any employees are in its employ, maintain in full force and effect workers' compensation insurance (including employer liability insurance) in compliance with all statutory requirements. + +Section 13. Purchaser's Security Interest. + +Subject to Agent's obligation to pay Expenses and fund the Wind-Down Payment: + +(a) Upon the occurrence of the Closing, and solely to the extent that any Assets or Proceeds are, notwithstanding the Approval Order, subsequently determined to constitute property of Merchant's estate, Purchaser shall have a senior lien on all Assets and Proceeds, which lien shall be deemed by the Approval Order to be automatically perfected. The Approval Order shall grant Purchaser relief from the automatic stay, and nothing in the Approval Order shall inhibit Purchaser's ability, to take any action Purchaser deems appropriate to perfect such lien. + +(b) Upon the occurrence of the Closing and until all Assets have been sold or otherwise disposed of, and solely to the extent that any Assets or Proceeds are, notwithstanding the Approval Order, subsequently determined to constitute property of Merchant's estate, Purchaser shall have a superpriority administrative expense claim against Merchant to the extent of any amounts owing from Merchant to Purchaser in connection with this Agreement, including as a result of any breach of this Agreement. + +Section 14. Designation Rights. + +14.1 Lease/Contract Designation Rights. + +(a) Upon the occurrence of the Closing and until the earlier to occur of (i) the end of the Designation Rights Period applicable to a particular Lease or Contract and (ii) the Designation Rights Termination Date, Purchaser shall have the exclusive right to designate the assignees of Merchant's right, title, and interest in and to any or all of the Leases and Contracts (the "Lease/Contract Designation Rights") upon the terms and conditions agreed upon between Purchaser and such designee. + +30 + + + + + +Case 18-10248- MFW Doc 632-1 Filed 04/18/18 Page 32 of 60 + +(b) Merchant shall cooperate reasonably with Purchaser to arrange for the sale and assignment of the Leases and Contracts, with such sale and assignment to be on such terms as Purchaser deems acceptable in its sole and absolute discretion. Without limiting the generality of the foregoing, Merchant agrees (1) to provide Purchaser with all due diligence materials and information as Purchaser shall reasonably request in connection with its efforts to market and attempt to sell the Leases and Contracts (including complete copies thereof and any abstracts prepared with respect thereto, and all communications with the counterparties thereunder, all property surveys, all environmental reports and tax and utility records), with Purchaser to bear all reasonable third party out-of- pocket costs and expenses relating thereto, in all cases to the extent reasonably available to Merchant, and (2) to cooperate with Purchaser, its agents, and any potential purchasers of any of the Leases and/or Contracts. + +(c) Solely to the extent requested by Purchaser, Merchant shall exercise renewal and/or extension options under the Leases and Contracts. + +(d) At any time prior to the earlier to occur of (i) the end of the Designation Rights Period applicable to a particular Lease or Contract and (ii) the Designation Rights Termination Date, Purchaser shall have the right, which right may be exercised at any time and from time to time, to file a Lease/Contract Assumption Notice in the Bankruptcy Cases designating the assignee (which may in certain circumstances be Purchaser, any of the entities comprising Purchaser, any of their respective affiliates, and/or a new entity created by any of the foregoing) of one or more Leases and/or Contracts (which may occur without further order of the Bankruptcy Court pursuant to the Approval Order) and setting forth the proposed cure amount due pursuant to section 365 of the Bankruptcy Code. The Approval Order shall provide that (a) the counterparties to the Leases or Contracts identified in any Lease/Contract Assumption Notice shall have twenty-one days to object to the proposed assumption and assignment, (b) if no objection to the proposed assumption and assignment of a Lease or Contract is timely received, such Lease or Contract shall, upon payment of the applicable cure payment, if any, to the applicable counterparty, automatically be deemed assumed by Merchant and assigned to the assignee identified in the Lease/Contract Assumption Notice pursuant to section 365 of the Bankruptcy Code, without further order of the Bankruptcy Court or further action by any person or entity, and (c) if an objection to the proposed assumption and assignment of a Lease or Contract is timely received, such Lease or Contract shall not be assumed or assigned until such objection is resolved by agreement of the applicable counterparty or order of the Bankruptcy Court. + +(e) The designee under any Lease/Contract Assumption Notice shall be required, if requested by the applicable counterparty, to provide adequate assurance of future performance with respect to such Lease or Contract if the applicable counterparty so requests. + +(f) Merchant shall have no responsibility for any cure amounts with respect to any Lease or Contract assumption and assignment. + +14.2 Asset Designation Rights. + +(a) Upon the occurrence of the Closing, Agent shall have the exclusive right to market and sell, and/or otherwise designate the purchasers, licensees, transferees, and/or + +31 + + + + + +Case 18-10248- MFW Doc 632-1 Filed 04/18/18 Page 33 of 60 + +assignees of (which may in certain circumstances be Purchaser, any of the entities comprising Purchaser, any of their respective affiliates, and/or a new entity created by any of the foregoing), any or all of the Assets free and clear of all liens, claims, and encumbrances thereon, without further order of the Bankruptcy Court (the "Asset Designation Rights"). Subject to Agent's payment obligations hereunder, Agent is authorized to execute, in the name of and as agent for Merchant, any and all deeds, bills of sale, and other instruments or documents necessary to effectuate the sale, transfer, or other conveyance of any of the Assets. + +(b) Pursuant to the Approval Order, the sale or other conveyance of any Assets reflected in Asset Designation Notices filed in the Bankruptcy Cases from time to time by the Agent shall be automatically effective on the date reflected in the applicable Asset Designation Notice and subject to the satisfaction of any closing conditions reflected therein, and the sale, license, transfer, or other conveyance of such Assets shall be free and clear of all liens, claims, and encumbrances without further order of the Bankruptcy Court, provided, however, that nothing in the Approval Order shall inhibit the ability of Agent to seek other or further orders of the Court in connection with the sale or other disposition of any Assets. + +(c) Except to the extent provided for by the Wind-Down Budget, the costs of maintaining the Assets available for marketing and sale shall constitute Expenses. All costs of effectuating assumption and assignment shall be deemed an Expense hereunder. + +Section 15. Miscellaneous. + +15.1 Signage. On April 5, 2018, the Merchant purchased the signage, exclusive of freight, required for the Sale as set forth on Exhibit 15 directly from the sign vendor. The signage shall be delivered to the Stores so as to be received in accordance with Agent's instructions on or before the Sale Commencement Date. Upon entry of the Approval Order and simultaneous with the funding of the Cash Purchase Price, the Agent shall reimburse Merchant for one hundred percent (100%) of Merchant's actual (without mark-up or lift) documented out of pocket costs in an amount not to exceed $3,000,000 and shall directly pay as an Expense the freight costs associated with shipping such signage to the Stores. + +15.2 Notices. All notices and communications provided for pursuant to this Agreement shall be in writing and sent by electronic mail, as follows: + +If to Merchant: The Bon-Ton Stores, Inc. 2801 East Market Street York, PA 17402 Attention: + +With copies (which shall not constitute notice) to: + +Malfitano Partners Joseph A. Malfitano, PLLC 747 Third Ave., 2nd Floor + +32 + + + + + +Case 18-10248- MFW Doc 632-1 Filed 04/18/18 Page 34 of 60 + +New York, NY 10017 Attn: Joseph A. Malfitano (jm@malfitanopartners.com) If to Purchaser: GA Retail, Inc. Attn: Scott Carpenter (scarpenter@greatamerican.com) Alan Forman (aforman@brileyfin.com) and Tiger Capital Group, LLC Attn: Christopher Huber (chuber@tigergroup.com) Mark Naughton (mnaughton@tigergroup.com) and Wilmington Savings Fund Society, FSB Attn: Patrick J. Healy (phealy@wsfsbank.com) With copies (which shall not constitute notice) to: Lowenstein Sandler LLP Counsel to Great American Group WF LLC Attn: Kenneth A. Rosen (krosen@lowenstein.com) Andrew Behlmann (abehlmann@lowenstein.com) and Kilpatrick Townsend & Stockton LLP Counsel to WSFS Attn: David Posner (dposner@kilpatricktownsend.com) and Jones Day Counsel to Second Lien Noteholders Attn: Sidney P. Levinson (slevinson@jonesday.com) Joshua M. Mester (jmester@jonesday.com) John Kane (jkkane@jonesday.com) + +15.3 Governing Law/Exclusive Jurisdiction. This Agreement shall be governed by and interpreted in accordance with the laws of the State of Delaware without reference to any conflict of laws provisions thereof, except where governed by the Bankruptcy Code. Each of the Parties irrevocably and unconditionally submits, for itself and its properties, to the exclusive jurisdiction of the Bankruptcy Court, in any action or proceeding arising out of or relating to this Agreement. + +33 + + + + + +Case 18-10248- MFW Doc 632-1 Filed 04/18/18 Page 35 of 60 + +15.4 Amendments. This Agreement may not be modified except in a written instrument executed by all of the Parties, provided that any amendment or modification to Section 3.1(f) or 11.2(f) shall require the consent of the Committee. + +15.5 No Waiver. No consent or waiver by any Party, express or implied, to or of any breach or default by the other in the performance of its obligations hereunder shall be deemed or construed to be a consent or waiver to or of any other breach or default in the performance by such other Party of the same or any other obligation of such Party. Failure on the part of any Party to complain of any act or failure to act by the other Party or to declare the other Party in default, irrespective of how long such failure continues, shall not constitute a waiver by such Party of its rights hereunder. + +15.6 Currency. All reference to dollars in this Agreement and all schedules, exhibits, and ancillary documents related to this Agreement shall refer to U.S. dollars. + +15.7 Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the Parties and their respective successors and assigns, including, but not limited to, any chapter 11 or chapter 7 trustee; provided, however, that this Agreement may not be assigned by any of the Parties without the prior written consent of the other, provided further that notwithstanding the foregoing, GA and Tiger may each collaterally assign this Agreement and their rights thereunder to their respective lenders. + +15.8 Execution in Counterparts. This Agreement may be executed in one or more counterparts. Each such counterpart shall be deemed an original but all such counterparts together shall constitute one and the same agreement. This Agreement, to the extent signed and delivered by means of a facsimile machine, electronic mail, or other electronic transmission in which the actual signature is evident, shall be treated in all manner and respects as an original agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. At the request of any Party, each other Party shall re-execute original forms hereof and deliver them to all other Parties. No Party shall raise the use of a facsimile machine, electronic mail, or other electronic transmission in which the actual signature is evident to deliver a signature or the fact that any signature or agreement or instrument was transmitted or communicated through the use of a facsimile machine, electronic mail or other electronic transmission in which the actual signature is evident as a defense to the formation of a contract and each Party forever waives such defense. In proving this Agreement, it shall not be necessary to produce or account for more than one such counterpart signed by the Party against which enforcement is sought. + +15.9 Section Headings. The headings of sections of this Agreement are inserted for convenience only and shall not be considered for the purpose of determining the meaning or legal effect of any provisions hereof. + +15.10 Wiring of Funds. All amounts required to be paid under any provision of this Agreement shall be made by wire transfer of immediately available funds no later as 2:00 p.m. (Eastern Time) on the date that such payment is due, so long as all information necessary to complete the wire transfer has been received by the payor by 10:00 a.m. (Eastern Time) on the + +34 + + + + + +Case 18- 10248-MFW Doc 632-1 Filed 04/18/18 Page 36 of 60 + +date that such payment is due. In the event that the date on which any such payment is due is not a business day, then such payment shall be made by wire transfer on the next business day. + +15.11 Deposit. Pursuant to the Bidding Procedures, Agent has provided a cash deposit in the amount of $32,700,000 (the "Deposit"), which is being held in escrow by co-counsel to Merchant, Young Conaway Stargatt & Taylor, LLP (the "Escrow Agent"). At the closing, the Deposit shall be released from escrow by the Escrow Agent and applied to the Cash Purchase Price. In the event the Closing fails to occur, then, only upon entry of a final and non-appealable order of the Bankruptcy Court determining that such failure was the result of Purchaser's sole, material, non-excusable breach of this Agreement, then Merchant shall be entitled to retain the Deposit as liquidated damages as Merchant's sole remedy for such breach. + +15.12 Nature of Remedies. No failure to exercise and no delay in exercising, on the part of the Agent, any right, remedy, power, privilege or adjustment hereunder, shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power, privilege, or adjustment hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power, privilege, or adjustment. + +15.13 Entire Agreement. This Agreement contains the entire agreement between the Parties with respect to the transactions contemplated hereby and supersedes and cancels all prior agreements, including, but not limited to, all proposals, letters of intent or representations, written or oral, with respect thereto + +15.14 Agent/Purchaser. Each party hereto acknowledges and agrees that any payment obligation of Purchaser and Agent hereunder is binding upon both the Agent and Purchaser and they shall be jointly and severally responsible therefor. Any action permitted under this Agreement to be taken by Purchaser may be undertaken by Agent on behalf of all entities comprising Purchaser, subject to any agreements between or among the entities comprising Purchaser, the Second Lien Noteholders, or any of them. + +[ signature page follows ] + +35 + + + + + +Case 18-10248- MFW Doc 632-1 Filed 04/18/18 Page 37 of 60 + +IN WITNESS WHEREOF, the Parties hereby execute this Agreement by their respective duly authorized representatives as a sealed instrument as of the day and year first written above. + +GA RETAIL, INC. By: Name: Its: + +TIGER CAPITAL GROUP, LLC By: Name: Its: + +WILMINGTON SAVINGS FUND SOCIETY, FSB As Successor Trustee and Collateral Agent for the Second-Lien Notes By: Name: Its: + +THE BON-TON STORES, INC., on behalf of itself and the other entities comprising Merchant By: Name: Its: + + + + + +Case 18-10248- MFW Doc 632-1 Filed 04/18/18 Page 38 of 60 List of Exhibits + +Exhibit 1(a)(1) Stores Exhibit 1(a)(2) Distribution Centers Exhibit 1(d) Owned Real Estate Exhibit 1(e) Intellectual Property Exhibit 2(b)(iv) Form of Asset Designation Notice Exhibit 2(b)(xiii) Form of Lease/Contract Assumption Notice Exhibit 3.1(c) Wind-Down Budget Exhibit 4.1(c) Per Store, Per Diem Occupancy Expenses. Exhibit 8.1 Sale Guidelines + + + + + +Case 18-10248- MFW Doc 632-1 Filed 04/18/18 Page 39 of 60 + +The Bon-Ton Stores, Inc. Exhibit 1 (a) (1) Full Company Liquidation Stores Closing List + +Store List Store # Store Name Address City State Zip Selling Sq Ft 2 Hanover 400 Eisenhower Drive Hanover PA 17331 71,636 4 Lewistown 111 East Market Street Lewistown PA 17044 46,660 5 Martinsburg 800 Foxcroft Avenue Martinsburg WV 25401 65,780 6 Chambersburg 100 Chambersburg Mall Chambersburg PA 17201 55,621 7 Park City Furn 870 Plaza Boulevard Lancaster PA 17601 32,000 8 Park City 600 Park City Center Lancaster PA 17601 178,967 12 Cumberland 1262 Vocke Rd LaVale MD 21502 75,134 14 Galleria 2899 Wh teford Road, Ste 282 York PA 17402 131,915 15 Uniontown 1800 Mall Run Road Uniontown PA 15401 80,511 17 Indiana 2334 Oakland Avenue Suite 35 Indiana PA 15701 60,465 18 Warren 4000 Market Street Warren PA 16365 50,070 19 Wilton 3065 Route 50 Saratoga Springs NY 12866 71,740 21 Oil C ty 6945 US 322 Cranberry PA 16319 45,168 22 Br ck 80 Brick Plaza Brick NJ 08723 53,500 25 Binghamton 601-635 Harry L Dr. Johnson City NY 13790 81,112 27 Williamsport 300 Lycoming Mall Circle Pennsdale PA 17756 60,952 28 Bloomsburg 225 Columbia Mall Drive Bloomsburg PA 17815 46,060 29 Queensgate 2081 Springwood Road York PA 17403 114,608 31 Camp Hill 3525 Gettysburg Road Camp Hill PA 17011 145,200 32 Colonial Park 4600 Jonestown Road Harrisburg PA 17109 136,540 35 Reading 1665 State Hill Road Wyomissing PA 19610 159,368 36 Greensburg 5256 Rt 30 Greensburg PA 15601 100,003 37 Washington 1500 W. Chestnut Street Washington PA 15301 78,129 38 Midway 1066 Wyoming Avenue Wyoming PA 18644 66,026 39 Wilkes-Barre 14 Wyoming Valley Mall Wilkes-Barre PA 18702 159,454 43 Newburgh 1401 Route 300 Ste 139 Newburgh NY 12550 61,785 44 Ithaca 40 Catherwood Road Ithaca NY 14850 62,225 46 Jamestown 318 E. Fairmount Avenue Lakewood NY 14750 59,860 48 Westfield 443 E. Main Street Westfield MA 01085 74,939 62 Eastern Hills 4545 Transit Road Williamsville NY 14221 151,208 63 Sheridan 1706 Sheridan Drive Buffalo NY 14223 124,284 64 Southgate 1090 Union Road West Seneca NY 14224 100,500 65 McKinley 3701 McKinley Parkway Blasdell NY 14219 97,204 67 Lockport 5737 S. Transit Road Lockport NY 14094 82,000 68 Olean 402 N. Union Street Olean NY 14760 73,017 69 Niagara 6929 Williams Road Niagara Falls NY 14303 88,128 72 Bethlehem 2524 Schoenersville Road Bethlehem PA 18017 108,650 73 S. Allentown 3300 Lehigh Street Allentown PA 18103 101,841 76 Easton 146 Palmer Park Mall Easton PA 18045 115,062 78 Quakertown 751 SW End Blvd. Quakertown PA 18951 88,126 81 Doylestown 456 North Main Street Doylestown PA 18901 61,915 84 Elmira 3300 Chambers Road South, Ste. 50 Horseheads NY 14845 74,752 94 Camillus 5301 W. Genesee Street Camillus NY 13031 64,700 101 Dayton Mall 2700 St. Rt. 725 Dayton OH 45459 212,000 107 Huber Heights 8221 Old Troy Pike Huber Heights OH 45424 101,840 115 Beavercreek 2727 Fairfield Commons Beavercreek OH 45431 151,740 117 Piqua 987 E. Ash Street Piqua OH 45356 60,000 118 Athens 1004 E. State Street Athens OH 45701 42,253 119 New Philadelphia 400 Mill Avenue, Ste. C3 New Philadelphia OH 44663 73,310 121 Kettering 2050 E. Dorothy Lane Dayton OH 45420 87,317 125 Lancaster 1730 River Valley Circle S. Lancaster OH 43130 52,725 126 Heath 771 S. 30th Street Newark OH 43056 73,185 128 Zanesville 3575 Maple Avenue Zanesville OH 43701 70,847 129 Marion 1475 Marion Waldo Road Marion OH 43302 75,673 130 Chillicothe 1080 N. Br dge Street Chillicothe OH 45601 55,940 132 Richmond 601 East Main St. R chmond IN 47374 100,000 137 Sandusky 4314 Milan Road Sandusky OH 44870 80,398 + + + + + +Case 18-10248- MFW Doc 632-1 Filed 04/18/18 Page 40 of 60 The Bon-Ton Stores, Inc. Exhibit 1 (a) (1) Full Company Liquidation Stores Closing List + +Store List Store # Store Name Address City State Zip Selling Sq Ft 138 Plover 1780 Plover Road Plover WI 54467 54,564 140 Kohler 4030 Hwy #28 Sheboygan Falls WI 53085 54,541 142 West Bend 1291 W. Paradise Road West Bend WI 53095 61,011 143 Coldwater 373 N. Willowbrook Rd. Suite Z Coldwater MI 49036 54,146 144 Alliance Carnation Mall, 2500 W. State Street Alliance OH 44601 55,552 147 Wooster 4095 Burbank Road Wooster OH 44691 53,446 148 Morgantown 9550 Mall Road Morgantown WV 26501 71,032 150 Warsaw 2856 Frontage Road Warsaw IN 46580 80,320 151 Frankfort 202 Limestone Drive Frankfort KY 40601 53,954 152 Findlay 1800 Tiffin Avenue Findlay OH 45840 74,841 153 Bowling Green 1234 N Main Street Bowling Green OH 43402 40,000 154 Howell 3599 E. Grand River Avenue Howell MI 48843 72,873 155 Westgate 3311 Secor Road Toledo OH 43606 154,000 159 Monroe 2121 Monroe Street Monroe MI 48161 99,363 161 Midland 6830 Eastman Avenue M dland MI 48642 64,141 163 Jackson 1826 W. Michigan Avenue Jackson MI 49202 70,425 173 Muscatine 1903 Park Avenue Muscatine IA 52761 43,906 175 Mattoon 700 Broadway Avenue E Mattoon IL 61938 54,266 178 Jasper 3875 Newton Street Jasper IN 47546 55,238 179 Terre Haute 3401 US Hwy 41 S Terre Haute IN 47802 70,380 182 Muncie 3501 N. Granville Avenue Muncie IN 47303 80,000 184 Kokomo 1156 South 17th Street Kokomo IN 46902 60,135 186 Green Bay Furn 201 Bay Park Square Green Bay WI 54304 53,265 189 Southtown 2400 State Route 725 Dayton OH 45459 54,848 199 Fort Wayne 4201 Coldwater Road Fort Wayne IN 46805 122,000 203 Clarksburg 2700 Meadowbrook Mall Bridgeport WV 26330 124,285 205 Ashland 10699 US Route 60 Ashland KY 41102 70,000 206 Kanawha 5700 MacCorkle Avenue SE Charleston WV 25304 80,000 209 Winfield 200 Liberty Sq. Shopping Center Hurricane WV 25526 70,476 310 St Cloud 600 W St. Germain St. St. Cloud MN 56301 93,900 311 Virginia 1440 S 12th Avenue Virginia MN 55792 66,582 312 Rice Lake 2900 South Main R ce Lake WI 54868 54,661 313 Fergus Falls 2001 West Lincoln Avenue Ste. 2 Fergus Falls MN 56537 39,536 314 New Ulm 110 N Minnesota Street New Ulm MN 56073 47,277 315 Watertown 1300 9th Avenue SE Watertown SD 57201 40,320 316 Alexandria 3015 Hwy 29 S Ste. 4037 Alexandria MN 56308 70,314 317 Havre 1753 Highway 2 NW Havre M T 59501 47,161 318 LaCrosse 4000 State Road 16 LaCrosse WI 54601 41,344 319 Albert Lea 2440 Bridge Avenue Albert Lea MN 56007 64,436 320 Moorhead 420 Center Ave, Ste. 1 Moorhead MN 56560 106,150 321 Bismarck 641 Kirkwood Mall Bismarck ND 58506 92,500 323 Brainerd 14136 Baxter Drive Ste. 1 Baxter MN 56425 82,879 325 Billings 300 S 24th Street W, Ste. E100 Billlings M T 59102 60,224 326 Ottumwa 1110 Quincy Ave Ottumwa IA 52501 55,282 327 Great Falls 1200 10th Avenue South Great Falls M T 59405 70,000 328 Rap d City 2200 N Maple Avenue Rapid C ty SD 57701 88,977 329 Rock Springs 2445 Foothill Blvd. Rock Springs WY 82901 60,018 330 Dickinson Prairie Hills Mall Dickinson ND 58601 42,980 331 Minot 2400 10th Street SW Minot ND 58701 52,468 332 Willmar 1605 S. 1st. Street Willmar MN 56201 88,701 334 Norfolk 1700 Market Lane Norfolk NE 68701 77,365 335 Hastings 3001 W 12th Ste. 4 Hastings NE 68901 52,950 336 North Platte 1100 South Dewey North Platte NE 69101 43,500 338 Kearney 4915 2nd Avenue Kearney NE 68847 87,500 339 Scottsbluff 2302 Frontage Road Box 29 Scottsbluff NE 69361 72,699 340 Kalispell 20 North Main Kalispell M T 59901 80,000 341 Blaine 301 Northtown Dr. Blaine MN 55434 130,722 + + + + + +Case 18-10248- MFW Doc 632-1 Filed 04/18/18 Page 41 of 60 The Bon-Ton Stores, Inc. Exhibit 1 (a) (1) Full Company Liquidation Stores Closing List + +Store List Store # Store Name Address City State Zip Selling Sq Ft 342 Stillwater 2001 Washington Avenue Stillwater MN 55082 95,360 343 Aberdeen 3315 6th Avenue Southeast Ste. 2 Aberdeen SD 57401 79,668 344 Grand Junction 2424 US Highway 6 & 50 Grand Junct on CO 81505 72,279 345 Mankato 1850 Adams Street Mankato MN 56001 71,046 348 Bemidji 1401 Paul Bunyan Drive NW Bemidji MN 56601 56,392 349 Butte 3100 Harrison Avenue Ste. 5 Butte M T 59701 65,000 351 Missoula 2901 Brooks Avenue Missoula M T 59801 45,167 352 Fargo 3902 13th Avenue South Fargo ND 58103 103,200 353 Rosedale 1675 West Highway 36 Roseville MN 55113 149,908 354 Midway 1400 University Avenue West St. Paul MN 55104 124,136 355 Southtown 7831 Southtown Center Bloomington MN 55431 133,103 356 Edina 300 Southdale Center Edina MN 55435 143,608 357 Rochester 1201 SW 12th Street Rochester MN 55902 78,130 401 Ames 2801 N Grand Ave Ames IA 50010 49,888 402 Mason C ty 102 S Delaware Avenue Mason City IA 50401 59,500 403 Fort Dodge 217 S. 25th St., Ste 33 Fort Dodge IA 50501 54,179 404 Marshalltown 2500 S Center Street Marshalltown IA 50158 42,142 406 Oak View 3201 S 144th Street Omaha NE 68144 149,326 408 Waterloo 2060 Crossroads Blvd. Waterloo IA 50702 86,781 409 Austin 1405 18th Avenue NW Austin MN 55912 45,277 410 Merle Hay 3800 Merle Hay Road Ste. 100 Des Moines IA 50310 165,000 412 Coralville 1421 Coral Ridge Avenue Coralville IA 52241 98,458 413 Lindale Plaza 4444 1st Avenue NE Cedar Rapids IA 52404 100,000 414 Jordan Creek 101 Jordan Creek Parkway, #6000 West Des Moines IA 50265 159,673 418 Dubuque 555 John F. Kennedy Road Dubuque IA 52002 126,839 419 Westroads 707 N 102nd Omaha NE 68114 171,800 421 Davenport 320 W Kimberly Road Davenport IA 52806 104,913 422 Moline 4600 16th Street Moline IL 61265 107,145 423 Southridge 1111 E Army Post Road, Ste. 2003 Des Moines IA 50315 105,183 424 Sioux Falls 3500 W Empire Mall Sioux Falls SD 57106 105,292 429 Southern Hills 4380 Sergeant Road Sioux C ty IA 51106 92,695 430 West Burlington 550 S Gear Avenue West Burlington IA 52655 66,705 432 Eau Claire 4850 Golf Road Eau Claire WI 54701 102,000 437 Valley West 1551 Valley West Drive Ste. 200 West Des Moines IA 50266 205,248 438 Muskegon 5580 Harvey Street Muskegon MI 49444 106,131 439 Sturgeon Bay 58 N 3rd Avenue Sturgeon Bay WI 54235 60,000 440 Grandville 3668 Rivertown Parkway Grandville MI 49418 150,081 443 Traverse City 1776 Garfield Road Traverse C ty MI 49684 49,666 445 Lansing 5220 W Saginaw Highway Lansing MI 48917 103,000 447 Lincoln 3 Gateway Mall Lincoln NE 68505 100,000 448 Marshfield 503 E Ives Street Marshfield WI 54449 48,295 449 Duluth 1600 Miller Trunk Highway Duluth MN 55811 140,999 451 Grand Island 3404 W 13th Street Grand Island NE 68801 60,081 457 Bay Park 101 Bay Park Square Green Bay WI 54304 145,672 463 Holland 12331 James Street Holland MI 49424 69,148 464 Okemos 1982 W Grand River Avenue Okemos MI 48864 168,757 465 Port Huron 4450 24th Avenue Fort Gratiot MI 48060 70,536 475 Bay City 4131 E Wilder Road Bay C ty MI 48706 110,536 501 Bloomington 1601 Empire St. Bloomington IL 61701 131,606 502 LaSalle Peru 3940 Route 251 Ste 01 Peru IL 61354 87,500 503 Pekin 3536 Court St. Pekin IL 61554 82,100 504 Champaign 2000 North Neil St. Champaign IL 61820 154,302 505 Galesburg 1150 W. Carl Sandburg Dr. Galesburg IL 61401 84,894 507 Quincy 3347 Broadway Quincy IL 62301 106,400 508 Forsyth 1005 Hickory Point Mall Forsyth IL 62535 125,455 510 Janesville 2500 Milton Avenue Janesville WI 53545 96,000 511 Sterling 2900 E. Lincolnway Sterling IL 61081 60,000 + + + + + +Case 18-10248- MFW Doc 632-1 Filed 04/18/18 Page 42 of 60 The Bon-Ton Stores, Inc. Exhibit 1 (a) (1) Full Company Liquidation Stores Closing List + +Store List Store # Store Name Address City State Zip Selling Sq Ft 512 Cherryvale 7200 Harrison Avenue Rockford IL 61112 128,330 515 Joliet 3340 Mall Loop Drive Joliet IL 60435 128,000 516 Spring Hill 4000 Spring Hill Ring Rd Dundee IL 60118 128,000 517 Randhurst 1025 Center Dr. Mount Prospect IL 60056 205,056 518 White Oaks 2501 W. Wabash Springfield IL 62704 125,000 519 Milwaukee Grand Ave 331 W Wisconsin Avenue Milwaukee WI 53203 124,055 520 Bayshore 5701 N Lydell Avenue Glendale WI 53217 167,606 521 Racine 5500 Durand Avenue Racine WI 53406 106,157 522 Brookfield 15875 W Bluemound Road Brookfield WI 53005 218,705 523 Southridge 5300 S 76th Street Greendale WI 53129 221,000 526 East Towne 53 East Towne Mall Madison WI 53704 138,755 527 Mayfair 2400 N Mayfair Road Wauwatosa WI 53226 210,713 528 West Towne 36 West Towne Mall Madison WI 53719 139,580 529 Brookfield Furniture 18615 W Bluemound Road Brookfield WI 53045 55,000 530 Evergreen 9700 S Western Ave Evergreen Park IL 60805 120,000 531 Yorktown 230 Yorktown Shopping Center Lombard IL 60148 217,887 532 Woodmar 6600 Indianapolis Blvd. Hammond IN 46320 111,080 533 Edens Plaza 3200 Lake Avenue Wilmette IL 60091 160,578 535 Stratford Square 4 Stratford Square Bloomingdale IL 60108 147,116 538 Chicago Ridge 9800 S Ridgeland Ave Ch cago Ridge IL 60415 154,241 539 Harlem Irving 4200 N Harlem Avenue Norridge IL 60706 168,058 541 North Riverside 7505 W Cermak Road North Riverside IL 60546 180,550 542 Southlake 1995 Southlake Mall Merrillville IN 46410 144,123 543 Orland Square 4 Orland Square Orland Park IL 60462 163,370 546 Yorktown Furniture 2 Yorktown Mall Drive Lombard IL 60148 45,708 547 Edens Furniture 3232 Lake Avenue Wilmette IL 60091 34,830 548 Schaumburg Furn ture 830 E Golf Road Schaumburg IL 60173 58,525 549 Michigan City 305 W US Highway 20 M chigan City IN 46360 81,420 550 Hawthorn 3 Hawthorne Center Vernon Hills IL 60061 112,121 551 Ford City 7601 S Cicero Avenue Ch cago IL 60652 155,513 552 Lincolnwood 3333 Touhy Avenue Lincolnwood IL 60712 122,650 553 Bradley 1602 N State IL- 50 Bourbonnais IL 60914 142,200 554 St Charles 3850 E Main Street St. Charles IL 60174 141,808 555 Hawthorn Furniture 480 East Ring Road Vernon Hills IL 60540 46,290 556 Fox Valley 3 Fox Valley Center Aurora IL 60505 131,267 561 Orland Park Furniture 66 Orland Square Drive Orland Park IL 60462 71,783 563 Grand Prairie 5203 W. War Memorial Drive Peoria IL 61615 181,238 571 Laurel Park 17624 Newburgh Rd Livonia MI 48152 148,800 572 Rochester Hills 400 N.Adams St. Rochester Hills MI 48309 121,380 573 Partridge Creek 17480 Hall Rd. Clinton Township MI 48038 116,254 579 Naperville Frn Clear. 1835 W. Jefferson Naperville IL 60540 30,000 Count: 212 + + + + + +Case 18-10248- MFW Doc 632-1 Filed 04/18/18 Page 43 of 60 + +The Bon-Ton Stores, Inc. Exhibit 1 (a) (2) Distribution Centers + +Store List Store # Store Name Address City State Zip Selling Sq Ft 50 Whitehall - DC 3585 South Church St Whitehall PA 18052 n/a 198 Fairborn - DC 1340 E Dayton Yellow Springs Rd Fairborn OH 45324 n/a 460 West Jefferson - DC 115 Enterprise Parkway West Jefferson OH 43162 n/a 950 Rockford - DC 4650 Shepherd Trail Rockford IL 61103 n/a Count: 4 + + + + + +Case 18-10248- MFW Doc 632-1 Filed 04/18/18 Page 44 of 60 + +The Bon-Ton Stores, Inc. Exhibit 1 (d) Owned Real Estate + +Store List + +Store # Banner Store Name Address City State Zip Selling Sq Ft 4 Bon-Ton Lewistown 111 East Market Street Lewistown PA 17044 50,000 31 Bon-Ton Camp Hill 3525 Gettysburg Road Camp Hill PA 17011 145,375 36 Bon-Ton Greensburg Westmoreland Mall, 5256 Route 30 Greensburg PA 15601 99,800 67 Bon-Ton Lockport 5737 South Transit Road Lockport NY 14094 81,431 128 Elder-Beerman Zanesville 3575 Maple Avenue Zanesville OH 43701 70,847 132 Elder-Beerman Richmond 601 East Main Street Richmond IN 47301 111,350 310 Herberger's St. Cloud 600 West Saint Germain Street St. Cloud MN 56301 168,755 327 Herberger's Great Falls 1200 10th Avenue South Great Falls M T 59405 81,969 354 Herberger's Midway 1400 University Avenue St. Paul MN 55104 124,136 410 Younkers Merle Hay 3800 Merle Hay Road, Su te 100 Des Moines IA 50310 165,000 412 Younkers Coralville 1421 Coral Ridge Avenue Coralville IA 52241 98,458 432 Younkers Eau Claire 4850 Golf Road Eau Claire WI 54701 102,000 438 Younkers Muskegon 5580 Harvey Street Muskegon MI 49444 106,131 440 Younkers Grandville 3668 Rivertown Parkway Grandville MI 49418 150,081 449 Younkers Duluth 1600 Miller Trunk Highway Duluth MN 55811 140,999 501 Bergner's Bloomington 1601 Empire Street Bloomington IL 61701 131,616 503 Bergner's Pekin 3500 Court Street Pekin IL 61553 82,100 508 Bergner's Forsyth 1005 Hickory Point Mall Forsyth IL 62535 126,056 514 Carson's Aurora Northgate 970 North Lake Street Aurora IL 60506 119,000 516 Carson's Spring Hill 4000 Spring Hill Mall Dundee IL 60118 128,000 518 Bergner's Wh te Oaks 2501 West Wabash Springfield IL 62704 125,000 521 Boston Store Racine 5500 Durand Avenue Racine WI 53406 106,157 533 Carson's Edens Plaza 3200 Lake Avenue Wilmette IL 60091 155,000 549 Carson's Michigan City 305 West US Highway 20 Michigan C ty IN 46360 76,121 550 Carson's Hawthorn 3 Hawthorne Center Vernon Hills IL 60061 112,121 556 Carson's Fox Valley 3 Fox Valley Center Drive Aurora IL 60504 120,000 572 Carson's Rochester Hills 400 North Adams Road Rochester Hills MI 48309 61,233 573 Carson's Partridge Creek 17480 Hall Road Clinton MI 48038 120,000 590 Carson's Rockford D.C. 4650 Shepherd Trail Rockford -Owned IL 61103 520,000 "Quincy Property" Quincy IL Count: 30 + + + + + +Case 18-10248- MFW Doc 632-1 Filed 04/18/18 Page 45 of 60 + +The Bon-Ton Stores, Inc. Exhibit 1 (e) Intellectual Property + +BON TON ENTITIES TRADEMARKS Reg Number Serial Number Name Mark 966580 72435362 BRECKENRIDGE 1143734 73159353 CARSON PIRIE SCOTT 1395289 73471798 CARSONS 1332638 73495705 ELDER-BEERMAN 1392446 73543142 BON-TON STORES, INC., THE STUART HUGHES 1397712 73543145 THE BON-TON DEPARTMENT STORES, INC. SUSQUEHANNA TRAIL OUTFITTERS + +1526191 73663359 PIZZA STRADA 1680687 74078995 THE BON-TON 1661242 74097054 THE BON-TON 1795407 74340081 YOUNKERS 1869666 74355074 CEZANI 2006730 74552885 Bon-Ton Trade Corp., The ANDREA VICCARO 2006731 74552975 JENNY BUCHANAN 2001829 74553100 CUDDLE BEAR 1935197 74580597 CARSON PIRIE SCOTT II, INC. (F/K/A MCRAE'S, INC.) MCRAE'S + +2021357 74638895 COME TO THE RIGHT PLACE 2217957 75023572 CARSON PIRIE SCOTT II, INC. (F/K/A MCRAE'S, INC.) NATIONAL BANK OF THE GREAT LAKES + +2015874 75045762 JENNY BUCHANAN 2635572 75348627 (RELATIVITY) 2385966 75348885 LIVING QUARTERS 2278878 75410193 HERBERGER'S 2278879 75410395 THE BON-TON DEPARTMENT STORES, INC. HERBERGER'S + +2407600 75441794 STUDIO WORKS 2493154 75654658 LIVING QUARTERS 2412363 75857375 CHARGE AGAINST BREAST CANCER 2384258 75979374 RELATIVITY 2363348 75979521 CONSENSUS 76232809 BON-TON DEPARTMENT STORES, INC. MADISON & MAX 3447275 76467824 CARSON PIRIE SCOTT II, INC. (F/K/A MCRAE'S, INC.) SHE SHE LA LÀ + +2856632 76975745 THE BON-TON DEPARTMENT STORES, INC. MADISON & MAX + +3292860 77035952 PARADISE COLLECTION 3436925 77055123 KENNETH ROBERTS PLATINUM 3483180 77183901 INTIMATE ESSENTIALS 3528518 77227149 EXERTEK 3709384 77359862 LITTLE MISS ATTITUDE 77364016 THE BON-TON DEPARTMENT STORES, INC. AUTHENTIC U + +3632950 77520071 CELEBRATIONS REGISTRY FOR VERY SPECIAL OCCASIONS 3628605 77520170 CELEBRATIONS REGISTRY FOR VERY SPECIAL OCCASIONS 3570064 77553578 STUDIO WORKS 3666012 77577377 BOSTON STORE 3848434 77630455 MISS ATTITUDE 3842899 77814203 BT JEWELED 3881265 77836970 KENNETH ROBERTS 3909131 77881965 LIVING QUARTERS 3892546 77969650 CARSON PIRIE SCOTT II, INC. BERGNER'S 2765740 78116121 CARSON PIRIE SCOTT II, INC. (RELATIVITY) DESIGN LAB 2934000 78191055 MISS ATTITUDE 78292100 CARSON PIRIE SCOTT II, INC. (F/K/A MCRAE'S, INC.) + +PERFECT PIMA + +78560181 MARKET STREET EAST 3217597 78867113 THE BON-TON TRADE, LLC SUSQUEHANNA TRAIL OUTFITTERS 3022152 78976395 BRECKENRIDGE 3069447 78976644 CHANTEUSE 85108157 THE BON-TON DEPARTMENT STORES, INC. CUSTOMER FIRST + +4143662 85194375 4139987 85225140 KENNETH ROBERTS 4143891 85247954 JB 85476397 THE BON-TON STORES, INC. AFFINITY + + + + + +4259055 85495083 THE BON-TON DEPARTMENT STORES, INC. ZOE&BELLA@BT + +4552374 85715679 THE BON-TON DEPARTMENT STORES, INC. CUDDLE BEAR + +4357088 85733613 ZOE&BELLA @BT 4361044 85772207 CARSON PIRIE SCOTT II, INC. PARADISE COLLECTION 4507524 85850871 STYLE ON THE STREET 4998553 85920357 DESIGN DISTRICT 4496279 85929876 TRENDÉVOUS 4532638 86044801 4626285 86144251 BEAUTY STATION 4736593 86261094 4991097 86433458 BEAUTY STATION 5191722 86532617 CHEF'S QUARTERS 5396972 86898865 ZOE&BELLA @BT 5005143 86979074 CHEF'S QUARTERS 5135982 87019592 SANTA'S PANTRY 87063073 LOVESTYLEREWARDS 87063086 THE BON-TON DEPARTMENT STORES INC. STYLEREWARDS + +87368531 YULETIDE FARMS 87416731 DRESSOBSESSED 87418738 CLOSE TO HOME 87471882 THE BIG GRILL 87488334 MEYEWEAR 87492351 MEYEWEAR 87495174 FASHION TO GO 87495186 STYLE TO GO 87497118 STYLE 2 GO 87498911 FASHION 2 GO 87498969 TRAVEL QUARTERS 87505353 CUDDLE BEAR 87528193 LIVING QUARTERS 87535628 BETTER BRANDS. BIGGER SAVINGS. 87537827 ZOE&BELLA@BT 87626265 ZOE&BELLA@BT + + + + + +Case 18-10248- MFW Doc 632-1 Filed 04/18/18 Page 46 of 60 + +Reg Number Serial Number Name Mark 87667636 EO 87697689 BUZZWORX 87706897 ZOE&BELLA@BT 87748141 MATTI & MAX 87762369 MATTI & MAX + +BON TON ENTITIES COPYRIGHTS Registration Number Title Type TX4880277 Doing a good business: 100 years at the Bon-Ton Literary Work + +TX1896055 Elder-Beerman Stores Corporation: a tradition of success Literary Work TX5900922 A tale from Flurryville: the Berg's big surprise Literary Work TX5744198 Wow! what a cow: a tale from funky Literary Work TX5638101 A tale from Flurryville: Arctic Bart finds his happy heart Literary Work TX5658257 Holiday celebrations with recipes from Younkers Literary Work TX6497902 Baxter shares his bear Literary Work TX2217381 Parisian celebrating a century of service Literary Work TX3196448 Presentation - a manual of standards and guidelines Literary Work VA239074 Riverchase Galleria Parisian grand opening Visual Arts VA81949 Made in Wisconsin Visual Arts VA6480 Cratchits' Christmas dinner Visual Arts + + + + + +Case 18-10248- MFW Doc 632-1 Filed 04/18/18 Page 47 of 60 + +Exhibit 2(b)(iv) Form of Asset Designation Notice + +IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE + +In re: THE BON-TON STORES, INC., et al.,1 Debtor. + +Chapter 11 Case No. 18-10248 (MFW) Jointly Administered + +NOTICE OF DESIGNATION OF ASSET PURCHASER + +PLEASE TAKE NOTICE that pursuant to the Order Approving Debtors' Entry Into Agency Agreement and Consummation of the Transactions Contemplated Thereby (the "Approval Order") [D.I. ____],2 Purchaser hereby designates the entity identified on Schedule A ("Designee") annexed hereto as the assignee of the Assets identified on Schedule A (the "Designated Assets") pursuant to the agreement between Purchaser, as agent for the Debtors, and Designee, an abstract of which is annexed hereto as Exhibit A (the "Purchase Agreement"). PLEASE TAKE FURTHER NOTICE that pursuant to the Approval Order, upon the closing of the transaction pursuant to the Purchase Agreement, the Designated Assets shall be deemed conveyed to Designee by the Debtors free and clear of all liens, claims, encumbrances, and other interests of any kind. + +1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor's federal tax identification number, are: The Bon-Ton Stores, Inc. (5229); The Bon-Ton Department Stores, Inc. (9309); The Bon-Ton Giftco, LLC (2805); Carson Pirie Scott II, Inc. (2140); Bon-Ton Distribution, LLC (5855); McRIL, LLC (5548); Bonstores Holdings One, LLC (8574); Bonstores Realty One, LLC (8931); Bonstores Holdings Two, LLC (8775); and Bonstores Realty Two, LLC (9075). The headquarters for the above-captioned Debtors is 2801 East Market Street, Bldg. E, York, Pennsylvania 17402. 2 Capitalized terms used but not defined in this Notice have the meanings given thereto in the Approval Order. + + + + + +Case 18-10248- MFW Doc 632-1 Filed 04/18/18 Page 48 of 60 Dated: [_], 2018 [COUNSEL TO PURCHASER] Wilmington, Delaware + +_____________________________ + + + + + +Case 18-10248- MFW Doc 632-1 Filed 04/18/18 Page 49 of 60 Exhibit 2(b)(iv) Form of Asset Designation Notice Schedule A + +Designated Assets Designee + + + + + +Case 18-10248- MFW Doc 632-1 Filed 04/18/18 Page 50 of 60 Exhibit 2(b)(xiii) Form of Lease/Contract Assumption Notice + +IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE + +In re: THE BON-TON STORES, INC., et al.,1 Debtor. + +Chapter 11 Case No. 18-10248 (MFW) Jointly Administered + +NOTICE OF ASSUMPTION AND ASSIGNMENT OF [LEASES] / [CONTRACTS] + +PLEASE TAKE NOTICE that pursuant to the Order Approving Debtors' Entry Into Agency Agreement and Consummation of the Transactions Contemplated Thereby (the "Approval Order") [D.I.___],2 Purchaser hereby designates the entities identified on Schedule A annexed hereto as the assignees of the corresponding Leases and/or Contracts. PLEASE TAKE FURTHER NOTICE that the cure amounts for the Leases and/or Contracts to be assigned pursuant to this Notice and the Approval Order are set forth on Schedule A. PLEASE TAKE FURTHER NOTICE that objections, if any, to the assumption and assignment of any Lease or Contract must be filed with the Bankruptcy Court and served on counsel for Purchaser at the addresses (including e-mail addresses) set forth in the signature block of this Notice on or before [_], 2018.3 If no timely objection to the assumption and assignment of a Lease or Contract is received, the assumption and assignment of such Lease or Contract will become effective automatically pursuant to the Approval Order on the date + +1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor's federal tax identification number, are: The Bon-Ton Stores, Inc. (5229); The Bon-Ton Department Stores, Inc. (9309); The Bon-Ton Giftco, LLC (2805); Carson Pirie Scott II, Inc. (2140); Bon-Ton Distribution, LLC (5855); McRIL, LLC (5548); Bonstores Holdings One, LLC (8574); Bonstores Realty One, LLC (8931); Bonstores Holdings Two, LLC (8775); and Bonstores Realty Two, LLC (9075). The headquarters for the above-captioned Debtors is 2801 East Market Street, Bldg. E, York, Pennsylvania 17402. 2 Capitalized terms used but not defined in this Notice have the meanings given thereto in the Approval Order. 3 [First business day that is at least 15 days from notice date] + + + + + +Case 18-10248- MFW Doc 632-1 Filed 04/18/18 Page 51 of 60 + +identified on Schedule A. If a timely objection to the assumption and assignment of a Lease or Contract is timely filed and served by an entity with appropriate standing, such assignment shall not become effective until agreed to by the parties or ordered by the Court. Dated: [_], 2018 [COUNSEL TO PURCHASER] Wilmington, Delaware + +_____________________________ + + + + + +Case 18-10248- MFW Doc 632-1 Filed 04/18/18 Page 52 of 60 Exhibit 2(b)(xiii) Form of Lease/Contract Assumption Notice + +Schedule A + +Description Counterparty Name and Address Assignee Name and Address Cure Amount Effective Date of Assignment + + + + + +Case 18-10248- MFW Doc 632-1 Filed 04/18/18 Page 53 of 60 Exhibit 3.1(c) Wind Down Payment Budget + +Budget Expense Vendors $ 16.2 Payroll 35.5 Severance 3.4 Retention - IBNR 4.0 Sales Tax 7.91 Interest - Professional Fees 15.82 Contingency 1.0 Stub Rent & Free Rent 8.0 503(b)(9) 2.0 Other - Total $ 93.8 Plus: Severance and Retention in Agent's Expenses 5.7 Total After Severance and Retention in Agent's Expenses $ 99.5 + +1 Reduced to account for the fact that $6 million of sales taxes are already included in the DIP Obligations per email from J. Guglielmo dated April 17, 2018. 2 For the avoidance of doubt, the Professional Fees shall be paid, without duplication, either as part of the payoff of the DIP Obligations or as part of the Wind Down Payment. + + + + + +Case 18-10248- MFW Doc 632-1 Filed 04/18/18 Page 54 of 60 + +The Bon-Ton Stores, Inc. Exhibit 4.1(c) - Occupancy - Per Diem Full Company Liquidation Store Closing List Excludes Distribution Centers + +TOTAL - PER DIEM + +Store # Store Name Base Rent + +Common Area Maintenance / LL Property Insurance + +Real Estate Taxes Insurance + +Building Repair & Maint. Occupancy Other Security Communications Utilities Supplies Equip. Leases Eqiup. Maint Other Taxes Total 2 Hanover 1,162 89 362 27 117 20 11 54 194 42 5 4 - 2,087 4 Lewistown - - 62 23 78 21 11 41 133 42 5 4 - 419 5 Martinsburg 458 75 - 35 102 22 18 40 172 52 6 4 131 1,115 6 Chambersburg 581 92 95 22 80 18 10 48 194 43 6 4 - 1,193 7 Park City Furn 941 142 138 12 62 545 14 42 95 31 2 4 - 2,027 8 Park City 749 123 1,597 128 385 34 28 52 2,023 275 15 4 - 5,412 12 Cumberland 767 65 142 31 114 23 20 39 228 74 26 4 36 1,568 14 Galleria 2,918 146 171 69 279 108 19 54 390 105 12 4 35 4,308 15 Uniontown 893 111 170 35 121 46 11 44 384 87 10 4 29 1,944 17 Indiana 499 - 84 15 100 19 6 42 155 56 8 4 - 986 18 Warren 305 - - 21 111 21 10 42 158 37 6 4 - 714 19 Wilton 722 120 227 27 129 39 28 38 409 74 12 4 - 1,829 21 Oil City 693 38 23 24 113 20 7 50 142 41 6 4 - 1,162 22 Brick 2,118 651 507 33 159 59 34 42 254 67 8 4 - 3,936 25 Binghamton 776 - 1,222 32 126 21 14 41 247 59 7 4 - 2,550 27 Williamsport 606 101 151 24 95 18 8 44 196 41 5 4 - 1,294 28 Bloomsburg 455 - - 19 86 18 26 39 152 44 5 4 - 849 29 Queensgate 1,877 310 450 39 165 166 30 42 320 79 11 4 19 3,513 31 Camp Hill - - 415 62 461 206 15 52 513 130 10 6 2 1,872 32 Colonial Park 384 388 295 54 354 110 13 46 443 78 7 4 - 2,176 35 Reading 902 162 985 91 302 205 15 44 510 131 11 4 52 3,415 36 Greensburg - 126 401 42 262 20 20 50 320 79 9 4 11 1,344 37 Washington 319 - - 21 119 16 17 43 219 50 6 4 20 832 38 Midway 700 212 225 30 119 27 11 40 194 60 6 4 - 1,629 39 Wilkes-Barre 747 79 505 55 295 133 13 43 521 106 9 4 39 2,549 43 Newburgh 939 52 359 27 102 23 35 39 291 63 6 4 - 1,939 44 Ithaca 1,085 147 301 320 138 24 15 53 244 57 6 4 - 2,393 46 Jamestown 793 67 19 32 95 22 19 43 220 74 14 4 - 1,401 48 Westfield 1,832 534 801 57 128 48 16 44 397 94 13 4 5 3,973 62 Eastern Hills 1,320 54 - 53 336 269 26 38 319 99 10 4 - 2,528 63 Sheridan 715 104 78 47 197 235 38 43 300 85 7 4 - 1,851 64 Southgate 1,066 223 242 40 166 190 19 41 249 80 8 4 - 2,328 65 McKinley 1,038 177 95 41 145 143 23 44 203 82 6 4 - 2,000 67 Lockport - - 343 115 340 19 26 47 212 92 9 4 - 1,205 68 Olean 522 51 57 27 108 20 12 42 166 71 12 4 - 1,092 69 Niagara 772 314 - 31 139 118 19 37 262 64 7 4 - 1,766 72 Bethlehem 1,407 70 381 182 223 185 17 42 490 121 25 4 47 3,194 73 S. Allentown 1,191 300 317 61 186 27 14 40 535 98 12 4 47 2,830 76 Easton 560 42 299 45 162 68 13 44 400 88 10 4 26 1,759 78 Quakertown 420 349 296 41 116 164 12 46 324 89 10 4 1 1,873 81 Doylestown 1,668 234 139 52 125 23 30 43 230 174 17 4 1 2,739 84 Elmira 531 105 209 24 102 65 25 50 343 73 10 4 - 1,539 94 Camillus 674 100 375 31 109 21 15 39 172 71 6 4 - 1,618 101 Dayton Mall 9,393 343 605 116 320 35 29 48 692 206 17 4 - 11,808 107 Huber Heights 1,255 143 619 62 178 61 28 39 332 101 12 4 - 2,832 115 Beavercreek 2,496 232 838 165 276 168 31 107 559 140 18 4 - 5,034 117 Piqua 370 126 60 29 94 18 8 40 210 52 8 4 - 1,020 118 Athens 518 52 49 235 86 27 10 44 161 37 10 4 - 1,234 119 New Philadelphia 718 81 289 34 106 198 21 46 380 65 8 4 1 1,952 + +121 Kettering 622 122 423 51 182 24 40 36 358 82 9 4 - 1,955 125 Lancaster 420 58 241 29 83 19 10 41 311 51 5 4 - 1,272 126 Heath 990 82 240 33 103 134 18 39 285 57 7 4 - 1,992 128 Zanesville - 89 111 25 141 17 10 39 284 45 7 4 - 771 129 Marion 1,014 138 28 27 94 18 12 41 251 35 6 4 - 1,667 130 Chillicothe 936 125 189 34 102 22 17 59 426 61 7 4 - 1,983 132 Richmond - - 199 38 141 96 15 40 357 53 7 4 67 1,017 + + + + + +Case 18-10248- MFW Doc 632-1 Filed 04/18/18 Page 55 of 60 + +The Bon-Ton Stores, Inc. Exhibit 4.1(c) - Occupancy - Per Diem Full Company Liquidation Store Closing List Excludes Distribution Centers + +TOTAL - PER DIEM + +Store # Store Name Base Rent + +Common Area Maintenance / LL Property Insurance + +Real Estate Taxes Insurance + +Building Repair & Maint. Occupancy Other Security Communications Utilities Supplies Equip. Leases Eqiup. Maint Other Taxes Total 137 Sandusky 817 632 80 22 142 29 13 36 508 54 7 4 2 2,346 + +138 Plover 1,439 185 320 35 91 28 12 43 181 71 19 4 17 2,443 140 Kohler 1,430 231 275 28 90 22 12 59 212 57 11 7 21 2,456 142 West Bend 1,451 151 286 31 101 33 19 48 270 72 18 4 29 2,512 + +143 Coldwater 1,375 84 156 24 107 18 9 41 204 60 5 9 26 2,116 + +144 Alliance 1,261 136 52 59 92 19 15 38 197 54 6 4 - 1,934 147 Wooster 1,042 179 262 32 114 21 17 57 227 53 5 4 - 2,013 + +148 Morgantown 900 80 170 31 117 27 9 40 261 58 13 4 189 1,899 + +150 Warsaw 1,541 - 182 42 150 79 12 56 366 83 12 4 51 2,580 151 Frankfort 1,326 48 162 27 88 23 14 37 228 62 11 4 76 2,105 + +152 Findlay 992 83 122 36 142 18 11 38 278 51 7 4 - 1,782 153 Bowling Green 505 84 13 21 85 18 8 43 186 46 8 4 - 1,022 + +154 Howell 1,430 199 226 36 129 28 24 53 265 84 7 4 18 2,503 155 Westgate 1,075 - 325 74 367 293 35 46 1,008 130 9 6 - 3,368 + +159 Monroe 1,654 379 302 38 106 380 24 46 431 69 6 4 41 3,482 161 Midland 640 63 510 46 140 29 21 46 316 73 9 4 43 1,939 163 Jackson 838 258 247 40 118 20 23 47 390 75 8 4 44 2,113 173 Muscatine 699 - - 21 80 19 13 45 159 40 5 4 - 1,085 + +175 Mattoon 524 76 14 22 94 26 9 47 194 34 14 4 - 1,059 + +178 Jasper 1,167 136 157 32 108 25 17 47 232 72 10 4 49 2,056 179 Terre Haute 725 147 249 42 111 23 23 40 356 50 6 4 71 1,847 + +182 Muncie 986 78 284 40 125 79 17 44 259 56 7 4 67 2,045 184 Kokomo 1,607 95 40 29 111 24 14 48 204 63 9 4 29 2,278 + +186 Green Bay Furn 665 - - 22 81 591 20 32 126 37 6 4 5 1,589 + +189 Southtown 443 - 417 34 126 623 32 112 311 23 4 4 - 2,129 + +199 Fort Wayne 2,338 171 491 47 166 106 17 46 585 117 7 3 158 4,251 + +203 Clarksburg 1,556 923 410 34 174 272 31 47 412 80 6 4 186 4,134 + +205 Ashland 832 98 39 26 104 15 10 50 301 50 7 4 62 1,598 206 Kanawha 1,144 78 169 35 113 23 26 47 303 66 12 4 188 2,209 + +209 Winfield 1,747 - 94 105 131 23 16 46 211 87 7 4 83 2,554 + +310 St Cloud 100 - 188 57 276 31 17 63 386 78 12 3 0 1,214 311 Virginia 908 251 109 43 129 35 19 48 381 100 8 3 1 2,033 312 Rice Lake 534 212 89 25 137 22 10 45 133 49 6 3 17 1,282 + +313 Fergus Falls 491 - - 23 93 19 3 43 158 49 5 3 1 888 + +314 New Ulm 592 - 79 27 159 19 17 44 181 45 6 3 1 1,172 + +315 Watertown 337 143 29 52 109 27 14 37 191 43 7 3 - 992 + +316 Alexandria 946 426 293 56 140 23 13 52 192 106 23 3 1 2,274 + +317 Havre 472 66 19 29 88 31 7 38 156 36 10 3 12 967 318 LaCrosse 1,085 93 172 31 200 114 31 51 216 123 9 3 25 2,153 + +319 Albert Lea 770 133 155 26 115 38 6 38 216 53 8 3 - 1,559 + +320 Moorhead 1,713 34 227 67 194 67 19 42 303 123 10 3 1 2,803 + +321 Bismarck 1,122 117 243 119 171 35 16 45 348 108 11 3 - 2,339 + +323 Brainerd 1,332 12 245 49 140 26 18 60 312 104 8 3 1 2,309 + +325 Billings 765 368 196 32 182 23 13 61 36 57 22 4 43 1,801 326 Ottumwa 613 176 55 24 126 25 7 43 226 59 6 3 - 1,362 + +327 Great Falls - - 169 48 114 21 9 40 227 68 7 3 45 751 + +328 Rapid City 1,576 137 270 56 153 22 14 44 534 76 9 3 - 2,894 + +329 Rock Springs 1,330 76 81 31 92 40 46 36 187 52 5 3 11 1,991 + +330 375 108 103 31 109 19 5 42 147 51 6 3 - 999 + + + + + +Dickinson 331 Minot 651 73 289 33 118 19 11 50 175 65 6 3 - 1,494 332 Willmar 1,496 261 226 51 178 33 13 66 335 94 9 3 1 2,766 334 Norfolk 1,116 281 163 35 126 24 17 39 239 50 5 3 5 2,103 335 Hastings 469 52 21 27 91 20 8 55 182 43 7 3 5 983 + +336 North Platte 598 294 108 25 85 18 5 40 145 44 7 3 3 1,375 + +338 Kearney 1,138 77 186 56 190 33 14 51 349 123 32 3 16 2,268 + +339 Scottsbluff 1,084 102 94 36 151 22 18 48 214 70 8 3 8 1,857 + + + + + +Case 18-10248- MFW Doc 632-1 Filed 04/18/18 Page 56 of 60 + +The Bon-Ton Stores, Inc. Exhibit 4.1(c) - Occupancy - Per Diem Full Company Liquidation Store Closing List Excludes Distribution Centers + +TOTAL - PER DIEM + +Store# Store Name Base Rent + +Common Area Maintenance / LL Property Insurance + +Real Estate Taxes Insurance + +Building Repair & Maint. Occupancy Other Security Communications Utilities Supplies Equip. Leases Eqiup. Maint Other Taxes Total 340 Kalispell 1,177 151 31 64 122 43 20 44 173 84 7 3 19 1,937 341 Blaine 1,515 183 250 76 315 75 22 47 493 155 14 4 1 3,148 342 Stillwater 1,941 - 508 86 267 47 23 46 436 137 54 3 1 3,549 343 Aberdeen 990 167 117 80 107 28 9 43 225 83 7 3 - 1,861 344 Grand Junction 1,117 134 211 51 129 26 21 46 286 122 14 3 38 2,199 345 Mankato 1,004 119 313 48 146 28 27 47 256 94 14 3 1 2,101 348 Bemidji 722 79 96 35 122 24 10 48 202 59 8 3 1 1,410 349 Butte 808 100 134 55 102 26 13 43 203 68 5 3 15 1,576 351 Missoula 1,000 221 333 25 166 30 12 39 236 49 12 3 20 2,148 352 Fargo 1,698 952 247 78 262 87 31 58 707 153 10 4 - 4,286 353 Rosedale 1,795 1,023 708 112 375 136 36 51 722 219 28 3 - 5,207 354 Midway - 355 908 56 219 39 38 44 507 99 9 3 0 2,278 355 Southtown 2,298 1,038 1,707 83 312 104 17 62 552 202 19 3 2 6,399 356 Edina 2,514 152 613 62 324 33 22 39 791 129 9 3 1 4,692 357 Rochester 1,018 1 - 66 131 44 27 53 709 106 34 3 1 2,192 401 Ames 254 84 211 24 102 34 8 50 167 62 10 3 - 1,007 402 Mason City 708 196 23 31 144 31 19 70 266 64 6 3 - 1,560 403 Fort Dodge 600 54 20 27 108 41 12 72 170 76 10 3 - 1,195 404 Marshalltown 373 60 17 41 99 21 8 60 195 58 6 3 - 940 406 Oak View 1,926 192 476 81 199 36 16 79 650 198 11 4 22 3,890 408 Waterloo 646 36 122 35 174 21 14 44 292 84 8 4 5 1,483 409 Austin 255 45 - 24 116 17 9 45 389 43 6 3 1 953 410 Merle Hay - 231 496 62 252 329 19 53 266 111 7 3 - 1,828 412 Coralville - 142 604 59 361 44 17 49 275 141 8 3 - 1,704 413 Lindale Plaza 868 182 732 53 228 37 19 44 416 131 8 3 - 2,722 414 Jordan Creek 2,117 192 760 98 290 75 32 50 516 169 16 3 - 4,318 418 Dubuque 721 242 319 54 161 195 46 57 525 116 8 3 - 2,447 419 Westroads 118 1,064 520 129 330 56 45 77 689 263 18 3 45 3,356 421 Davenport 669 263 292 35 152 121 17 45 270 77 7 4 7 1,960 422 Moline 1,188 56 264 92 199 174 23 52 315 82 8 3 2 2,457 423 Southridge 539 - - 30 148 132 14 48 367 64 7 3 - 1,352 424 Sioux Falls 1,223 295 325 94 241 144 13 44 469 160 12 3 - 3,022 429 Southern Hills 1,012 270 667 114 241 63 23 51 284 113 10 3 - 2,853 430 West Burlington 779 168 101 27 97 42 26 65 300 56 10 3 - 1,674 432 Eau Claire - 187 396 53 173 309 21 52 372 94 10 3 38 1,707 437 Valley West 981 193 1,512 410 364 151 26 74 519 278 27 12 - 4,546 438 Muskegon - 196 305 69 124 27 20 32 550 154 27 3 49 1,558 439 Sturgeon Bay 452 - 102 29 148 197 19 146 184 43 6 3 13 1,343 440 Grandville - 275 589 95 249 44 40 62 775 185 28 3 85 2,431 443 Traverse City 524 116 - 35 86 21 10 48 385 49 10 3 14 1,301 445 Lansing 1,555 176 286 52 168 224 8 48 473 89 8 3 73 3,163 447 Lincoln 930 210 277 59 255 32 31 57 377 110 9 3 11 2,362 448 Marshfield 308 16 - 21 83 50 13 58 171 88 6 3 14 830 449 Duluth - 124 600 203 311 51 20 51 767 278 11 3 1 2,421 451 Grand Island 467 59 85 29 106 30 8 42 217 69 6 3 8 1,129 457 Bay Park 2,556 78 717 92 198 166 31 72 406 135 13 4 51 4,521 463 Holland 399 152 49 44 91 52 10 47 254 79 8 3 31 1,219 464 Okemos 4,083 293 943 74 238 329 29 42 826 172 9 3 82 7,120 465 Port Huron 791 - - 30 96 40 15 51 308 68 8 4 25 1,438 475 Bay City 1,836 170 101 57 136 390 23 50 481 138 8 3 20 3,414 501 Bloomington 287 885 377 65 264 122 25 63 412 147 11 3 - 2,661 502 LaSalle Peru 616 86 95 59 157 136 24 53 378 80 9 3 - 1,695 503 Pekin 384 115 144 37 139 19 33 49 241 73 8 3 - 1,244 504 Champaign 1,351 546 143 66 208 140 26 73 699 146 11 3 - 3,410 505 Galesburg 493 95 49 34 117 24 27 58 311 47 6 3 - 1,262 507 Quincy 112 226 232 63 150 92 41 123 365 91 11 4 - 1,511 + + + + + +Case 18-10248- MFW Doc 632-1 Filed 04/18/18 Page 57 of 60 + +The Bon-Ton Stores, Inc. Exhibit 4.1(c) - Occupancy - Per Diem Full Company Liquidation Store Closing List Excludes Distribution Centers + +TOTAL - PER DIEM + +Store # Store Name Base Rent + +Common Area Maintenance / LL Property Insurance Real Estate Taxes Insurance + +Building Repair & Maint. Occupancy Other Security Communications Utilities Supplies Equip. Leases Eqiup. Maint Other Taxes Total 508 Forsyth 92 280 251 42 185 112 24 58 298 74 7 3 - 1,427 510 Janesville 573 75 284 80 157 36 18 106 315 97 10 4 22 1,778 511 Sterling 837 168 10 27 107 21 17 116 206 63 7 3 - 1,582 512 Cherryvale 1,060 180 490 89 206 46 65 46 483 153 11 3 - 2,833 + +515 Joliet 1,895 108 229 71 185 96 29 113 589 153 12 4 6 3,487 516 Spring Hill - 207 325 68 178 32 21 135 416 127 11 4 0 1,523 517 Randhurst 1,385 352 2,216 119 312 99 41 68 511 288 28 3 2 5,423 518 White Oaks 324 41 390 65 210 138 23 59 673 123 11 3 - 2,059 + +519 Milwaukee Grand Ave 18 128 276 28 294 104 185 73 988 99 6 3 0 2,204 + +520 Bayshore 1,230 182 571 113 477 65 38 76 843 245 38 4 165 4,045 521 Racine 1 178 494 61 256 32 14 99 501 134 11 4 71 1,855 522 Brookfield 4,254 24 847 209 550 122 25 50 1,447 346 49 5 151 8,078 523 Southridge 3,575 682 901 113 451 234 33 87 927 222 23 4 195 7,446 526 East Towne 1,526 194 321 78 165 204 20 63 630 144 10 3 63 3,422 + +527 Mayfair 3,897 241 1,335 142 571 225 77 87 1,286 306 50 3 243 8,463 528 West Towne 3,016 195 420 105 281 96 21 73 558 212 34 4 103 5,119 + +529 Brookfield Furniture 2,334 - 270 43 157 1,223 8 65 171 41 10 3 8 4,333 + +530 Evergreen 2,395 93 92 106 356 122 44 119 635 204 34 4 2 4,206 531 Yorktown 2,358 519 755 175 561 123 48 147 736 365 20 4 - 5,810 532 Woodmar 629 258 1 53 299 64 20 108 399 147 10 3 94 2,084 533 Edens Plaza - 615 1,729 92 273 58 33 97 590 290 22 3 1 3,802 + +535 Stratford Square 1,347 369 342 69 237 95 33 69 381 135 11 3 7 3,099 + +538 Chicago Ridge 2,233 86 2,236 126 331 52 44 82 616 293 28 3 8 6,140 + +539 Harlem Irving 2,308 2,678 1,211 232 435 84 69 64 698 320 32 3 13 8,148 + +541 North Riverside 1,447 505 1,372 112 692 205 58 68 679 208 15 5 5 5,372 + +542 Southlake 1,068 194 624 93 266 51 29 58 783 207 11 4 111 3,498 543 Orland Square 1,603 68 1,960 170 356 73 40 82 650 448 51 3 2 5,506 + +546 Yorktown Furniture 1,542 205 505 35 74 996 18 72 119 29 5 3 - 3,602 + +547 Edens Furniture 2,007 59 911 29 81 915 18 53 106 34 5 3 1 4,221 + +548 Schaumburg Furniture + +1,663 158 1,011 36 87 807 23 49 118 32 5 3 1 3,994 + +549 Michigan City 53 170 - 44 127 21 19 74 366 80 7 3 61 1,026 + +550 Hawthorn 450 378 207 64 212 41 39 91 583 146 8 3 2 2,223 551 Ford City 539 218 686 82 204 185 64 60 1,404 203 11 3 - 3,658 552 Lincolnwood 2,696 - 2,025 90 281 61 40 62 823 207 18 3 2 6,309 + +553 Bradley 2,311 63 430 63 161 147 67 67 431 120 10 3 2 3,873 554 St Charles 1,176 - - 49 194 119 43 67 740 130 10 3 - 2,532 555 Hawthorn Furniture Gallery + +1,563 175 - - 72 462 11 - - - - 3 - 2,287 + +556 Fox Valley 660 387 349 163 436 29 35 66 676 125 8 4 - 2,938 561 Orland Park Furniture 2,186 72 - 57 81 1,267 15 52 155 36 4 4 1 3,929 + +563 Grand Prairie 2,588 257 835 122 276 33 29 66 503 232 15 4 0 4,961 + +571 Laurel Park 4,792 - 543 135 402 67 42 123 1,005 360 16 4 108 7,597 + +572 Rochester Hills 13 219 390 103 357 38 31 56 651 230 19 4 97 2,209 + +573 Partridge Creek 2,237 179 421 157 196 33 16 43 697 200 10 4 53 4,247 + +579 Naperville Frn Clear. 242 - 62 11 86 259 9 1 619 39 1 1 - 1,331 + +212 Total 230,444 39,426 73,743 12,953 39,000 22,497 4,725 11,540 82,672 22,322 2,419 779 4,513 547,032 + + + + + +Case 18-10248- MFW Doc 632-1 Filed 04/18/18 Page 58 of 60 EXHIBIT 8.1 SALE GUIDELINES + +A. The Sale shall be conducted so that the Stores in which sales are to occur will remain open no longer than during the normal hours of operation provided for in the respective leases for the Stores. + +B. The Sale shall be conducted in accordance with applicable state and local "Blue Laws", where applicable, so that no Sale shall be conducted on Sunday unless the Merchant had been operating such Store on a Sunday. + +C. On "shopping center" property, Agent shall not distribute handbills, leaflets or other written materials to customers outside of any Stores' premises, unless permitted by the lease or, if distribution is customary in the "shopping center" in which such Store is located; provided that Agent may solicit customers in the Stores themselves. On "shopping center" property, Agent shall not use any flashing lights or amplified sound to advertise the Sale or solicit customers, except as permitted under the applicable lease or agreed to by the landlord. + +D. At the conclusion of the Sale or the Designation Rights Period, as applicable, Agent shall vacate the Stores in broom clean condition; provided that Agent may abandon any FF&E not sold in the Sale at the Stores, the Distribution Centers, the Headquarters, or Merchant's other corporate offices at the conclusion of the Sale or the Designation Rights Period, as applicable, without cost or liability of any kind to Agent. Any abandoned FF&E left in a Store or Distribution Center, the Headquarters, or Merchant's other corporate offices after a lease is rejected shall be deemed abandoned to the landlord having a right to dispose of the same as the landlord chooses without any liability whatsoever on the part of the landlord to any party and without waiver of any damage claims against the Merchant. For the avoidance of doubt, as of the Sale Termination Date or termination of the Designation Rights Period, as applicable, Agent may abandon, in place and without further responsibility or liability of any kind, any FF&E located at a Store or, Distribution Center, the Headquarters, or Merchant's other corporate offices. + +E. Following, and subject to, the entry of the Approval Order, Agent may advertise the Sale as a "store closing", "sale on everything", "everything must go" or similar-themed sale, as dictated by the Approval Order. + +F. Agent shall be permitted to utilize display, hanging signs, and interior banners in connection with the Sale; provided, however, that such display, hanging signs, and interior banners shall be professionally produced and hung in a professional manner. The Merchant and Agent shall not use neon or day-glo on its display, hanging signs, or interior banners. Furthermore, with respect to enclosed mall locations, no exterior signs or signs in common areas of a mall shall be used unless otherwise expressly permitted in these Sale Guidelines. In addition, the Merchant and Agent shall be permitted to utilize exterior banners at (i) non- enclosed mall Stores and (ii) enclosed mall Stores to the extent the entrance to the applicable Store does not require entry into the enclosed mall common area; provided, however, that such banners shall be located or hung so as to make clear that the Sale is being conducted only at the affected Store, shall not be wider than the storefront of the Store, and shall not be larger than 4 feet x 40 feet. In addition, the Merchant and Agent shall be permitted to utilize sign walkers in a safe and professional manner and in accordance with the terms of the Approval Order. Nothing contained in these Sale Guidelines shall be construed to create or impose upon Agent any additional restrictions not contained in the applicable lease agreement. + + + + + +Case 18-10248- MFW Doc 632-1 Filed 04/18/18 Page 59 of 60 + +F. Conspicuous signs shall be posted in the cash register areas of each of the affected Stores to effect that "all sales are final." + +G. Except with respect to the hanging of exterior banners, Agent shall not make any alterations to the storefront or exterior walls of any Stores. + +H. Agent shall not make any alterations to interior or exterior Store lighting. No property of the landlord of a Store shall be removed or sold during the Sale. The hanging of exterior banners or in- Store signage and banners shall not constitute an alteration to a Store. + +I. Agent shall keep Store premises and surrounding areas clear and orderly consistent with present practices. + +J. Subject to the provisions of the Agreement, Agent shall have the right to sell all Owned FF&E at the Closing Stores and the Distribution Centers, the Headquarters and (subject to any side letter between JV Agent and Purchaser, which shall not in any way affect Merchant's rights under the Agreement) and Purchaser shall have the right to sell all Owned FF&E at the Designation Rights Stores and the Nebraska Distribution Center. JV Agent may advertise the sale of the Owned FF&E in a manner consistent with these guidelines at the Closing Stores and the Indiana Distribution Center and Purchaser may advertise the sale of the Owned FF&E in a manner consistent with these guidelines at the Designation Rights Stores and the Nebraska Distribution Center. The purchasers of any Owned FF&E sold during the sale shall be permitted to remove the Owned FF&E either through the back shipping areas at any time, or through other areas after applicable business hours. For the avoidance of doubt, as of the Sale Termination Date or the termination of the Designation Rights Period, as applicable, Agent may abandon, in place and without further responsibility, any FF&E at the Stores, the Distribution Centers, the Headquarters, and Merchant's other corporate offices. + +K. Agent shall be entitled to include Additional Agent Merchandise in the Sale in accordance with the terms of the Approval Order and the Agreement. + +L. At the conclusion of the Sale at each Store, pending assumption or rejection of applicable leases, the landlords of the Stores shall have reasonable access to the Stores' premises as set forth in the applicable leases. The Merchant, Agent and their agents and representatives shall continue to have access to the Stores as provided for in the Agreement. + +M. Post-petition rents shall be paid by the Merchant as required by the Bankruptcy Code until the rejection or assumption and assignment of each lease. Agent shall have no responsibility to the landlords therefor. + +N. The rights of landlords against Merchant for any damages to a Store shall be reserved in accordance with the provisions of the applicable lease. + +O. If and to the extent that the landlord of any Store affected hereby contends that Agent or Merchant is in breach of or default under these Sale Guidelines, such landlord shall email or deliver written notice by overnight delivery on the Merchant, JV Agent and Purchaser as follows: + +If to Agent: + +Great American Group, LLC Attn: Scott Carpenter (scarpenter@greatamerican.com) + + + + + +Case 18-10248- MFW Doc 632-1 Filed 04/18/18 Page 60 of 60 Alan Forman (aforman@brileyfin.com) + +and + +Tiger Capital Group, LLC Attn: Christopher Huber (chuber@tigergroup.com) Mark Naughton (mnaughton@tigergroup.com) + +and + +Wilmington Savings Fund Society, FSB Attn: [_] + +With copies (which shall not constitute notice) to: + +Lowenstein Sandler LLP Counsel to Great American Group LLC Attn: Kenneth A. Rosen (krosen@lowenstein.com) Andrew Behlmann (abehlmann@lowenstein.com) + +and + +Kilpatrick Townsend & Stockton LLP Counsel to WSFS Attn: David Posner (dposner@kilpatricktownsend.com) + +and + +Jones Day Counsel to Second Lien Noteholders Attn: Sidney P. Levinson (slevinson@jonesday.com) Joshua M. Mester (jmester@jonesday.com) John Kane (jkkane@jonesday.com) + +If to Merchant: with a copy (which shall not constitute notice) to: \ No newline at end of file diff --git a/full_contract_txt/BORROWMONEYCOM,INC_06_11_2020-EX-10.1-JOINT VENTURE AGREEMENT.txt b/full_contract_txt/BORROWMONEYCOM,INC_06_11_2020-EX-10.1-JOINT VENTURE AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..2b767b806835c59e7c14377f24163724968e76b5 --- /dev/null +++ b/full_contract_txt/BORROWMONEYCOM,INC_06_11_2020-EX-10.1-JOINT VENTURE AGREEMENT.txt @@ -0,0 +1,97 @@ +Exhibit 10.1 + +JOINT VENTURE AGREEMENT THIS JOINT VENTURE AGREEMENT (the "Agreement") made and entered into this 20th day of Friday, March 2020 (the "Execution Date"), BETWEEN: BorrowMoney.com, inc of 512 Bayshore DR, suite 201 Fort Lauderdale FL 33304, and JVLS, LLC dba Vaccines 2Go of 4060 Johns Creek Parkway Suite H Suwanee, GA 30024 (individually the "Member" and collectively the "Members"). BACKGROUND: A. The Members wish to enter into an association of mutual benefit and agree to jointly invest and set up a joint venture enterprise. B. This Agreement sets out the terms and conditions governing this association. IN CONSIDERATION OF and as a condition of the Members entering into this Agreement and other valuable consideration, the receipt and sufficiency of which consideration is acknowledged, the Members agree as follows: Formation 1. By this Agreement the Members enter into a joint venture (the "Venture") in accordance with the laws of the State of Florida. The rights and obligations of the Members will be as stated in the applicable legislation of the State of Florida (the "Act") except as otherwise provided here. Name 2. The business name of the Venture will be BM&V2GO. Page 1 of 13 + + + + + +Purpose 3. The exclusive purpose of the Venture (the "Purpose") will be IT Development. internet Back office Maintenance And Deployment of medical Service. Term 4. The duration of this Venture (the "Term") will begin on March 1, 2020 and continue in full force and effect until February 28, 2025 or as otherwise provided in this Agreement. 5. The Term may be extended with the unanimous consent of all Members. Place of Business 6. The principal office of the business of the Venture will be located at 512 Bayshore Drive Suite 201 Fort Lauderdale, FL 33304 or such other place as the Members may from time to time designate. Business Management 7. The following managers (the "Managers") have been appointed by the Members to manage the Venture: ● Aaldo PIscitello ● Jody Stewart 8. Except as otherwise provided in this Agreement, the individual Managers may be appointed, replaced, or removed upon unanimous consent of the Members. 9. The Managers will have a primary duty to the best interest of the Venture and not directly to any individual Member. 10. Within the limits of the Purpose of the Venture and the terms of this Agreement, the Managers, acting jointly, will have full authority to bind the Members in all matters relating to the direction, control and management of the Venture. Conduct and actions of the Managers will be dictated by policy and procedure established by the Members. Authority to bind the Venture in contract or in any third party business relation lies exclusively with the Managers, acting jointly. 11. The Managers will jointly decide major issues concerning the Venture. Where Managers are unable to reach agreement in deciding major issues, approval by a majority vote of the Members at a regular or special meeting will be required. Page 2 of 13 + + + + + +Management Duties 12. Except as otherwise specified in this agreement, the duties and obligations of the Managers in relation to the Venture will include the following: a. managing the day to day business of the Venture; b. monitoring, controlling and directing the financial, business and operational affairs of the Venture; c. proper maintenance of books of account and financial records according to accepted accounting practices; d. monitoring, analyzing and acting on all issues over which it would have express or implied authority according to this Agreement; and e. all responsibilities attached to hiring of production and administration staff including any required labor negotiations, and all responsibilities attached to hiring of third party contractors. Member Duties 13. Each Member will be responsible for its respective duties as follows: + +Page 3 of 13 + + + + + +Member Duties Description + +BorrowMoney.com, inc + +*HTML code, build, deploy and maintain all technical aspect requirements including a database for medical dispatch personal & product service as needed, including activity information, data storage and backup. provided by three qualified assigned Borrowmoney.com, inc. employees/personal + +JVLS, LLC dba Vaccines 2Go + +$60,000.00 USD From Monthly Government , City And State, And Or Private Awarded Contracts. Plus (10%) Of Any Generated Gross Revenue From Awarded Contract, In Addition to The Total Contributions. 14. Duties of Members may be amended, from time to time, by decision of the Members, provided that the Members' interests are not affected except with the unanimous consent of the Members. Capital Contributions 15. Each of the Members has contributed to the capital of the Venture, in cash or property in agreed upon value, as follows (the "Capital Contribution"): Member Contribution Description Agreed Value + +BorrowMoney.com, inc 1, 500 square feet of Leased/rent office Space Includingspecified Description of duty* $3,500,000.00 USD + +JVLS, LLC dba Vaccines 2Go + +$60,000.00 USD From Monthly Government , City And State, And Or Private Awarded Contracts. Plus (10%) Of Any Generated Gross Revenue, In Add i t i on to The To ta l Contributions. + +$3,500,000.00 USD + +16. All Members will contribute their respective Capital Contributions fully and on time. + +Page 4 of 13 + + + + + +Withdrawal of Capital 17. No Member will have the right to demand or withdraw any portion of their capital contribution without the express written consent of the remaining Members. 18. The Members will not be personally liable for the return of all or part of the Capital Contributions of a Member, except as otherwise provided in this Agreement. Additional Capital 19. Capital Contributions may be amended from time to time, according to the requirements of the Venture, by decision of the Members as recommended by the Managers. Where Members' interests are affected, additional capital contributions (the "Additional Capital Contributions") must have the unanimous consent of the Members. 20. Any advance of money to the Venture by any Member in excess of the amounts provided for in this Agreement or subsequently agreed to as an Additional Capital Contribution will be deemed a debt due from the Venture rather than an increase in Capital Contribution of the Member. This liability will be repaid with interest at such rates and times to be determined by a majority of the Members. This liability will not entitle the lending Member to a greater voting power. Such debts may have preference or priority over any other payments to Members as may be determined by a majority of the Members. Capital Accounts 21. An individual capital account will be maintained for each Member and their initial Capital Contribution will be credited to this account. Any additional, approved contributions to the Venture's capital made by a Member will be credited to that Member's individual Capital Account. Interest on Capital 22. No borrowing charge or loan interest will be due or payable to any Member on any Capital Contribution or on their Capital Account despite any disproportion that may from time to time arise among the Capital Accounts of the Members. Page 5 of 13 + + + + + +Books of Account 23. Accurate and complete books of account of the transactions of the Venture will be kept in accordance with generally accepted accounting principles (GAAP) and at all reasonable times will be available and open to inspection and examination by any Member. The books and records of the Venture will reflect all the Venture's transactions and will be appropriate and adequate for the business conducted by the Venture. Banking and Venture Funds 24. The funds of the Venture will be placed in such investments and banking accounts as will be designated by the Members. Venture funds will be held in the name of the Venture and will not be commingled with those of any other person or entity. Member Meetings 25. Regular Member meetings will be held quarterly. Minutes of the meetings will be maintained on file. 26. Any Member can call a special meeting to resolve urgent issues that require a vote and that cannot wait for the next regularly scheduled meeting. When calling a special meeting, all Members must be provided with reasonable notice. Where a special meeting has been called, the meeting will be restricted to the specific purpose for which the meeting was called. 27. All meetings will be held at a time and in a location that is reasonable, convenient and practical considering the situation of all Members. 28. Any vote required by the Members will be determined such that each Member receives one vote carrying equal weight. Amendments 29. This Agreement may be amended only with the unanimous consent of all Members. Admitting a new Member 30. New Members may be admitted into the Venture only with the unanimous consent of the existing Members. The new Member agrees to be bound by all the covenants, terms, and conditions of this Agreement, inclusive of all current and future amendments. Further, a new Member will execute such documents as are needed or required for this admission. Any new Member will receive a business interest in the Venture as determined by all other Members. Page 6 of 13 + + + + + +Dissociation of a Member 31. Where a Member is in breach of this Agreement and that Member has not remedied the breach on notice from the Venture and after a reasonable period then the remaining Members will have the right to terminate this Agreement with regard to that individual defaulting Member (an "Involuntary Withdrawal") and take whatever action necessary to protect the interests of the Venture. 32. If the Venture is harmed as the result of an individual Member's action or failure to act, then that individual Member will be liable for that harm. If more than one Member is at fault then they will be jointly and severally liable for that harm. 33. Each Member will indemnify the remaining Members against all losses, costs and claims that may arise in the event of the Venture being terminated as a result of breach of the Agreement by that Member. 34. If a Member is placed in bankruptcy, or withdraws voluntarily from the Venture, or if there is an Operation of Law against a Member, the other Members will be entitled to proceed as if the Member had breached this Agreement. 35. Distribution of any amount owing to a dissociated Member will be made according to the percentage of ownership as described in the Valuation of Interest or as otherwise may be agreed in writing. Dissolution of the Joint Venture 36. The Venture will be dissolved and its assets liquidated in the event of any of the following: a. the Term expires and is not extended; b. a unanimous vote by the Members to dissolve the Venture; c. on satisfaction of the Purpose; d. loss or incapacity through any means of substantially all of the Venture's assets; or e. where only one Member remains. Page 7 of 13 + + + + + +Liquidation 37. On dissolution, the Venture will be liquidated promptly and within a reasonable time. 38. On the liquidation of the Venture assets, distribution of any amounts to Members will be made in proportion to their respective capital accounts or as otherwise may be agreed in writing. Valuation of Interest 39. In the absence of a written agreement setting a value, the value of the Venture will be determined based on the fair market value appraisal of all Venture assets (less liabilities) in accordance with generally accepted accounting principles (GAAP) by an independent accounting firm agreed to by all Members. An appraiser will be appointed within a reasonable period of the date of withdrawal or dissolution. The results of the appraisal will be binding on all Members. A withdrawing Member's interest will be based on the proportion of their respective capital account less any outstanding liabilities a Member may have to the Venture. The intent of this section is to ensure the survival of the Venture despite the withdrawal of any individual Member. 40. No allowance will be made for goodwill, trade name, patents or other intangible assets, except where those assets have been reflected on the Venture books immediately prior to valuation. Transfer of Member Interest 41. A Member may assign their proprietary assets and their rights in distribution interest in the Venture. Such assignment will only include that Member's economic rights and interests and will not include any other rights of that Member nor will it include an automatic admission as a Member of the Venture or the right to exercise any management or voting interests. A Member who assigns any or all of their Venture interest to any third party will relinquish their status as Member including all management and voting rights. Assignment of Member status, under this clause, including any management and voting interests, will require the consent of all the remaining Members. Page 8 of 13 + + + + + +Management Voting 42. Any management vote required will be determined such that each Manager receives one vote carrying equal weight. Force Majeure 43. A Member will be free of liability to the Venture where the Member is prevented from executing their obligations under this Agreement in whole or in part due to force majeure where the Member has communicated the circumstance of that event to any and all other Members and taken any and all appropriate action to mitigate that event. Force majeure will include, but not be limited to, earthquake, typhoon, flood, fire, and war or any other unforeseen and uncontrollable event. Duty of Loyalty 44. Provided a Member has the consent of the majority of the other Members, the Members to this Agreement and their respective affiliates may have interests in businesses other than the Venture. Neither the Venture nor any other Member will have any rights to the assets, income or profits of any such business, venture or transaction. Any and all businesses, ventures or transactions with any appearance of conflict of interest must be fully disclosed to all other Members. Failure to disclose any potential conflicts of interest will be deemed an Involuntary Withdrawal by the offending Member and may be treated accordingly by the remaining Members. Confidentiality 45. All matters relating to this Agreement and the Venture will be treated by the Members as confidential and no Member will disclose or allow to be disclosed any Venture matter or matters, directly or indirectly, to any third party without the prior written approval of all Members except where the information properly comes into the public domain. 46. This section will survive for one year after the expiration or termination of this Agreement or dissolution of the Venture. Language 47. The Members expressly state that the English language is to be the language of choice for this Agreement and all other notices and agreements required by the Venture. Page 9 of 13 + + + + + +Insurance 48. The Venture will insure all its assets against loss where reasonable and standard practice in the industry. Indemnification 49. Each Member will be indemnified and held harmless by the Venture from any and all harm or damages of any nature relating to the Member's participation in Venture affairs except where such harm or damages results from gross negligence or willful misconduct on the part of the Member. Liability 50. No Member will be liable to the Venture or to any other Member for any error in judgment or any act or failure to act where made in good faith. The Member will be liable for any and all acts or failures to act resulting from gross negligence or willful misconduct. Liability Insurance 51. The Venture may acquire insurance on behalf of any Member, employee, agent or other person engaged in the business interest of the Venture against any liability asserted against them or incurred by them while acting in good faith on behalf of the Venture. Covenant of Good Faith 52. Members will use their best efforts, fairly and in good faith to facilitate the success of the Venture. Joint Venture Property 53. Where allowed by statute, title to all Venture property, including intellectual property, will remain in the name of the Venture. Where joint ventures are not recognized by statute as separate legal entities, Venture property, including intellectual property, will be held in the name of one or more Members. In all cases Venture property will be applied by the Members exclusively for the benefit and purposes of the Venture and in accordance with this Agreement. Jurisdiction 54. The Members submit to the jurisdiction of the courts of the State of Florida for the enforcement of this Agreement and for any arbitration award or decision arising from this Agreement. Page 10 of 13 + + + + + +Mediation and Arbitration 55. In the event a dispute arises out of, or in connection with, this Agreement, the Members will attempt to resolve the dispute through friendly consultation. 56. If the dispute is not resolved within a reasonable period then any or all outstanding issues may be submitted to mediation in accordance with any statutory rules of mediation. If mediation is not successful in resolving the entire dispute or is unavailable, any outstanding issues will be submitted to final and binding arbitration in accordance with the laws of the State of Florida. The arbitrator's award will be final, and judgment may be entered upon it by any court having jurisdiction within the State of Florida. Warranties 57. All Members represent and warrant that they have all authority, licenses and permits to execute and perform this Agreement and their obligations under this Agreement and that the representative of each Member has been fully authorized to execute this Agreement. 58. Each Member represents and warrants that this Agreement is not in violation of any and all agreements and constitutional documents of the individual Member. Definitions 59. For the purpose of this Agreement, the following terms are defined as follows: a. "Capital Contributions" The capital contribution to the Venture actually made by the Members, including property, cash and any additional capital contributions made. b. "Majority Vote" A Majority Vote is any amount greater than one-half of the authorized votes. c. "Operation of Law" The Operation of Law means rights or duties that are cast upon a party by the law, without any act or agreement on the part of the individual including but not limited to an assignment for the benefit of creditors, a divorce, or a bankruptcy. Page 11 of 13 + + + + + +Miscellaneous 60. This Venture is termed a contractual joint venture and will not constitute a partnership. Members will provide services to one another on an arms' length basis while remaining independent business entities. There will be no pooling of profits and losses. Each Member is responsible only for its own actions and no Member is an agent for any other Member. Members will not be jointly or severally liable for the actions of the other Members. 61. Time is of the essence in this Agreement. 62. This Agreement may be executed in counterparts. Facsimile signatures are binding and are considered to be original signatures. 63. Headings are inserted for the convenience of the Members only and are not to be considered when interpreting this Agreement. Words in the singular mean and include the plural and vice versa. Words in the masculine gender include the feminine gender and vice versa. Words in the neuter gender include the masculine gender and the feminine gender and vice versa. 64. If any term, covenant, condition or provision of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, it is the Members' intent that such provision be reduced in scope by the court only to the extent deemed necessary by that court to render the provision reasonable and enforceable and the remainder of the provisions of this Agreement will in no way be affected, impaired or invalidated as a result. 65. This Agreement contains the entire agreement between the Members. All negotiations and understandings have been included in this Agreement. Statements or representations which may have been made by any Member in the negotiation stages of this Agreement may in some way be inconsistent with this final written Agreement. All such statements are declared to be of no value in this Agreement. Only the written terms of this Agreement will bind the Members. 66. This Agreement and the terms and conditions contained in this Agreement apply to and are binding upon the Member's successors, assigns, executors, administrators, beneficiaries, and representatives. 67. Any notices or delivery required here will be deemed completed when hand-delivered, delivered by agent, or seven (7) days after being placed in the post, postage prepaid, to the Members at the addresses contained in this Agreement or as the Members may later designate in writing. Page 12 of 13 + + + + + +68. All of the rights, remedies and benefits provided by this Agreement will be cumulative and will not be exclusive of any other such rights, remedies and benefits allowed by law. IN WITNESS WHEREOF the Members have duly affixed their signatures under hand and seal on this 20th day of March 2020. BorrowMoney.com, inc (Member) Per: /s/ Aldo Piscitello (SEAL) Aldo Piscitello President JVLS, LLC dba Vaccines 2Go (Member) Per: /s/ Jody Stewart Jody Stewart (Mar 20, 2020) (SEAL) Jody Stewart Page 13 of 13 \ No newline at end of file diff --git a/full_contract_txt/BUFFALOWILDWINGSINC_06_05_1998-EX-10.3-FRANCHISE AGREEMENT.txt b/full_contract_txt/BUFFALOWILDWINGSINC_06_05_1998-EX-10.3-FRANCHISE AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..3f5e7469ad8d8ab2fc775c77d0249f4efc739277 --- /dev/null +++ b/full_contract_txt/BUFFALOWILDWINGSINC_06_05_1998-EX-10.3-FRANCHISE AGREEMENT.txt @@ -0,0 +1,1011 @@ +BW-3 FRANCHISE SYSTEMS, INC. FRANCHISE AGREEMENT + + TABLE OF CONTENTS + +ARTICLE PAGE - ------- ---- I. APPOINTMENT AND FRANCHISE FEE. . . . . . . . . . . . . . . . . . . . .1 II. TERM AND RENEWAL . . . . . . . . . . . . . . . . . . . . . . . . . . .3 III. RESTAURANT AND LOCATION. . . . . . . . . . . . . . . . . . . . . . . .4 IV. TRAINING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5 V. PROPRIETARY MARKS. . . . . . . . . . . . . . . . . . . . . . . . . . .6 VI. CONFIDENTIAL MANUALS . . . . . . . . . . . . . . . . . . . . . . . . .7 VII. CONFIDENTIAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . .7 VIII. MODIFICATION OF THE SYSTEM . . . . . . . . . . . . . . . . . . . . . .8 IX. ADVERTISING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8 X. CONTINUING FEE . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 XI. ACCOUNTING AND RECORDS . . . . . . . . . . . . . . . . . . . . . . . 12 XII. STANDARDS OF QUALITY AND PERFORMANCE . . . . . . . . . . . . . . . . 13 XIII. OPERATIONS ASSISTANCE. . . . . . . . . . . . . . . . . . . . . . . . 17 XIV. INSURANCE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 XV. COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 XVI. DEFAULT AND TERMINATION. . . . . . . . . . . . . . . . . . . . . . . 20 XVII. RIGHTS AND DUTIES OF PARTIES UPON EXPIRATION OR TERMINATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 XVIII. TRANSFERABILITY OF INTEREST. . . . . . . . . . . . . . . . . . . . . 24 XIX. YOUR DEATH OR INCAPACITY . . . . . . . . . . . . . . . . . . . . . . 26 XX. RIGHT OF FIRST REFUSAL . . . . . . . . . . . . . . . . . . . . . . . 26 XXI. OPERATION IN THE EVENT OF ABSENCE, DISABILITY OR DEATH . . . . . . . 26 XXII. INDEPENDENT CONTRACTOR AND INDEMNIFICATION . . . . . . . . . . . . . 27 XXIII. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 XXIV. APPLICABLE LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 XXV. DISPUTE RESOLUTION . . . . . . . . . . . . . . . . . . . . . . . . . 29 XXVI. OWNER AGREEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . 31 XXVII. ACKNOWLEDGEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . 31 + +EXHIBITS: + +A. OWNER AGREEMENT B. DESCRIPTION OF DESIGNATED AREA C. LEASE ADDENDUM + + i + + bw-3 FRANCHISE SYSTEMS, INC. + + FRANCHISE AGREEMENT + + This Franchise Agreement ("Agreement") made this _____ day of ________, 19____, by and between bw-3 FRANCHISE SYSTEMS, INC. an Ohio corporation which has its principal place of business at 1919 Interchange Tower, 600 South Highway 169, Minneapolis, Minnesota 55426 ("we" or "us"), and __________________________ ________________________________________________________________________________ ________________________________________________________________________________ _______________ ("you"). If you are a corporation, partnership or limited liability company, certain provisions of the Agreement also apply to your owners and will be noted. + + BACKGROUND: + + A. Our parent company has developed a unique system ("System") for establishing and operating restaurants which use the service mark "BUFFALO WILD WINGS" and which feature chicken wings, sandwiches, and other products and beverages, which are all prepared according to specified recipes and procedures ("Menu Items"), some of which use proprietary mixes ("Trade Secret Food Products"), and has granted to us the right to sublicense the System to others. + + B. The distinguishing characteristics of the System include, without limitation, distinctive exterior and interior layout, design and color scheme, signage, decorations, furnishings and materials, special recipes, formulae, menus and food and beverage designations, Confidential Manuals, food and beverage storage, preparation service and delivery procedures and techniques, operating procedures for sanitation and maintenance, and methods and techniques for inventory and cost controls, record keeping and reporting, purchasing, sales promotion and advertising, Trade Secret Food Products, all of which may be + + + + + +changed, improved and further developed from time to time. + + C. Our parent company is the owner of the trade names, service marks and trademarks "BUFFALO WILD WINGS", "bw-3" and other logos and commercial symbols, and such other trade names, service marks, and trademarks as are now designated (and may later be designated by us in writing) as part of the System ("Marks"). + + D. We grant franchises to qualified candidates for the operation of "Buffalo Wild Wings" Restaurants offering the Menu Items and utilizing the System and Marks. You desire to operate a Buffalo Wild Wings Restaurant using the System and Marks and have applied for a franchise, which application has been approved by us in reliance upon all of the representations you have made. + + E. You understand and acknowledge the importance of our high and uniform standards of quality and service and the necessity of operating the Buffalo Wild Wings business in conformity with our standards and specifications. + + AGREEMENTS: + + We and you agree as follows: + +I. APPOINTMENT AND FRANCHISE FEE + + A. Subject to the provisions stated below, we hereby grant you a license to use the "Buffalo Wild Wings" Marks and System, and you undertake the obligation to operate a Buffalo Wild Wings restaurant facility featuring the Menu Items and providing sit-down, carry-out and other restaurant services ("Franchised + + 1 + +Restaurant"), and to use the Marks solely in connection with the System, as it is currently established, and as it may be changed, improved and further developed from time to time, at one (1) location only, such location to be: 1) ____________________________________________________________________________ ___________________________________________________________________________, or 2) at a location to be designated, as provided in Paragraph III within the area described on EXHIBIT B. When a location has been designated and approved by you and us, it will become part of Paragraph I.A.1., as if originally incorporated in that Paragraph. You shall not relocate your Franchised Restaurant without our prior written approval. + + B. You receive a Designated Area within which we and our affiliates shall not operate or grant to anyone else a franchise to operate a Buffalo Wild Wings or bw-3 Restaurant so long as this Agreement is in force and effect. The Designated Area is described in writing and on a map attached to the Agreement as EXHIBIT B and is made a part of the Agreement. You do not have any right to sublicense or subfranchise others within or outside of the Designated Area and do not have the right to operate more than one (1) Franchised Restaurant within the Designated Area. + + C. You acknowledge and agree that we have the right, in our sole discretion, to grant other franchises outside of the Designated Area as we deem appropriate. Although we will not operate a Buffalo Wild Wings or bw-3 business within the Designated Area, we reserve the right, both within and outside of the Designated Area, to offer and sell at special events (at our option, if you elect not to participate in such events) or at wholesale, through channels of distribution distinct from those of a Franchised Restaurant, products and services which comprise, or may in the future comprise a part of the System, which products may be resold at retail to the general public by such entities. Further, you acknowledge that certain locations within the Designated Area are by their nature unique and separate in character from sites generally developed as Franchised Restaurants. As a result, you agree that the following locations ("Special Sites") are excluded from the Designated Area and we shall have the right to develop (by direct ownership or franchising) such locations: 1) public transportation facilities, including airports, train stations and bus stations; 2) military bases; 3) sports facilities, including race tracks; and 4) amusement and/or theme parks. + + D. We and our affiliated companies shall not engage in catering and delivery services and activities in the Designated Area. You shall not engage in catering and delivery services and activities outside of the Designated Area. We shall have no obligation to enforce similar covenants against any other System franchisee. Other System franchisees shall be deemed third party beneficiaries of such. You shall not offer for sale any Menu Items or Proprietary Products by means of Internet/World Wide Web programming or advertising. We reserve the right to market and sell Menu Items and Trade Secret Food Products on the Internet/World Wide Web. + + E. You pay us a nonrefundable Initial Franchise Fee of ________________ _______________________ Dollars ($________) which is payable in full on the date of this Agreement. The Initial Franchise Fee has been fully earned upon receipt and is nonrefundable in consideration of the expenses incurred by us in granting this franchise and for the lost or deferred opportunity to franchise others. + + F. You acknowledge that because complete and detailed uniformity under many varying conditions may not be possible or practical, we specifically reserve the right, at our sole discretion, to vary standards for any System franchisee based upon the peculiarities of the particular site or circumstance, density of population, business potential, population of trade area, existing business practices or any other condition which we deem to be of importance to the successful operation of such franchisee's business. You shall not be entitled to require us to grant to you a like or similar variation. + + + + + + G. In consideration of our agreement not to grant another franchise in the area described in Paragraph I.C., you at all times shall use your best efforts to promote and increase the sales and service of Menu + + 2 + +Items and to effect the widest and best possible distribution throughout the Designated Area, soliciting and servicing all potential customers and accounts for Buffalo Wild Wings food products and services. + +II. TERM AND RENEWAL + + A. The term of this Agreement is for ten (10) years commencing on the date of this Agreement, unless terminated as provided by this Agreement. + + B. You have the right to renew the franchise for two (2) successive terms equal to five (5) years each, providing you meet all of the following conditions: + + 1. You have, during the entire term, complied with all the provisions of the Agreement; + + 2. The premises of the Franchised Restaurant meet our then-current standards for Buffalo Wild Wings restaurants and you are able to maintain possession of the Franchised Restaurant. Before the expiration date of this Agreement you must bring the Franchised Restaurant into full compliance with the specifications and standards then applicable for new or renewing Buffalo Wild Wings businesses and present us with evidence satisfactory that you have the right to remain in possession of the Franchised Restaurant premises for the duration of the renewal term. In the event you are unable to maintain possession of the premises of the Franchised Restaurant or if the premises do not meet our then-current standards, you may secure substitute premises approved by us and provided that you have furnished, stocked and equipped such premises to bring the Franchised Restaurant at its substituted premises into full compliance with the then-current specifications and standards before the expiration date of this Agreement; + + 3. You have given us written notice of your desire to renew at least six (6) months but not more than twelve (12) months prior to the end of the term; + + 4. You have satisfied all of your monetary obligations to us and our affiliates and have timely met these obligations throughout the term of this Agreement; + + 5. You have executed for the renewal term our then-current form of Franchise Agreement (with appropriate modifications to reflect the fact that the agreement relates to the grant of a renewal franchise), which shall supersede in all respects this Agreement, and the terms of which may differ from the terms of this Agreement, including, without limitation, a different percentage Continuing Fee and advertising contribution; provided, however, that the percentage Continuing Fee shall not exceed seven percent (7%) during any renewal period. You will not be required to pay the then-current initial franchise fee or its equivalent; + + 6. You have complied with our then-current qualification and training requirements; and + + 7. You have executed a general release, in a form prescribed by us, of all claims against us and our affiliates, and respective officers, directors, agents, shareholders and employees. + + C. Within ninety (90) days of our receipt of your notice to renew, we will furnish you with written notice of: (i) reasons which could cause us not to grant a renewal to you including but not limited to any deficiencies which require correction and a schedule for correction by you; and (ii) our then-current requirements relating to the image, appearance, decoration, furnishing, equipping and stocking of Buffalo Wild Wings businesses, and a schedule for effecting upgrading or modifications in order to bring the Franchised Restaurant in compliance, as a condition of renewal. Renewal of the franchise shall be conditioned upon your compliance with such requirements and continued compliance with all the terms and conditions of this Agreement up to the date of termination of the initial term. + + 3 + + D. We shall give you written notice of our election not to renew the franchise at least three (3) months prior to the expiration of the initial or first renewal term of this Agreement. + +III. RESTAURANT AND LOCATION + + A. You shall operate the Franchised Restaurant only at the location specified in Paragraph I of this Agreement. If the lease for the site of the Franchised Restaurant expires or terminates for reasons other than your breach, or if the site is destroyed, condemned or otherwise rendered unusable, or as otherwise may be agreed upon in writing by us and you, we will grant permission for relocation of the Franchised Restaurant within your Designated Area at a location and site acceptable to us. Any such relocation shall be at your sole expense and we shall have the right to charge you for any and all reasonable costs incurred by us, and a reasonable fee for our services, in connection with any such relocation of the Franchised Restaurant. + + + + + + B. You shall be responsible for purchasing or leasing a suitable site for the Franchised Restaurant. Prior to the acquisition by lease or purchase of any site for the premises of the Franchised Restaurant, you shall submit a description of the proposed site to us, together with a letter of intent or other evidence satisfactory to us which confirms your favorable prospects for obtaining the proposed site. We shall provide you written notice of approval or disapproval of the proposed site within fifteen (15) business days after receiving your written proposal. Our approval is not a determination or warranty that the proposed site will be a profitable location for the Franchised Restaurant. + + C. After receiving our written approval of the location of the Franchised Restaurant as provided in Paragraph III.B. above, you shall, subject to our prior approval of terms, execute a lease (if the premises are to be leased) or a binding agreement to purchase the site. All leases pertaining to the Franchised Restaurant premises must contain an Addendum in the form of EXHIBIT C attached hereto, or contain terms and conditions substantially similar to those contained in EXHIBIT C that we approve. You shall provide us with a copy of the executed lease for the Franchised Restaurant within five (5) days of its execution, and prior to its execution, provide us with a copy for our approval. A copy of the executed Addendum must also be provided to us. + + D. You shall promptly after obtaining possession of the site for the Franchised Restaurant: (i) retain the services of an architect and a contractor each of whom has been approved by us; (ii) have prepared and submitted for our approval a site survey and basic architectural plans and specifications (not for construction) consistent with our general atmosphere, image, color scheme and ambience requirements as set forth from time to time in the Manuals for a Buffalo Wild Wings restaurant (including requirements for dimensions, exterior design, materials, interior design and layout, equipment, fixtures, furniture, signs and decorating); (iii) obtain all required zoning changes, building, utility, health, sanitation, liquor and sign permits and licenses and any other required permits and licenses; (iv) purchase or lease equipment, fixtures, furniture and signs as provided herein; (v) complete the construction and/or remodeling, equipment, fixtures, furniture and sign installation and decorating of the Franchised Restaurant in full and strict compliance with plans and specifications therefore approved by us and all applicable ordinances, building codes and permit requirements; (vi) obtain all customary contractors' sworn statements and partial and final waivers of lien for construction, remodeling, decorating and installation services; and (vii) otherwise complete development of and have the Franchised Restaurant ready to open and commence the conduct of its business in accordance with Paragraph XII of this Agreement. Our approval of your site survey and architectural plans is not a representation or warranty of any type. + + E. You shall be required to periodically make reasonable capital expenditures to remodel, modernize and redecorate the premises of the Franchised Restaurant so that the Franchised Restaurant will reflect the then-image intended to be portrayed by Buffalo Wild Wings businesses. All remodeling, modernization, or redecoration of the premises of the Franchised Restaurant must be done in accordance with the standards and specifications as prescribed by us from time to time and with our prior written approval. All replacements must + + 4 + +conform to our then-current quality standards and specifications and must be approved in writing. Your total expenditures during the term of the Franchise Agreement for such remodeling, modernizing and redecorating will not exceed ONE HUNDRED THOUSAND Dollars ($100,000.00) adjusted for inflation from the date of this Agreement. Maintenance of the premises of the Franchised Restaurant and modifying or replacing equipment may exceed this amount, and maintenance costs and equipment costs may not be credited to remodeling, modernization or redecoration expenditures. + +IV. TRAINING + + A. Before you commence operations, we shall make initial training available to you. At least three (3) persons designated by you and approved by us must attend and successfully complete the training to our satisfaction. The training will be at least three (3) weeks in duration and will be conducted at either our Cincinnati, or Columbus, Ohio training facilities or at such other place as we may designate. The training program covers material aspects of the operation of a Buffalo Wild Wings business, including financial controls, general bookkeeping procedures, food preparation, service and operational techniques, familiarization with recipes and cooking procedures, marketing and advertising techniques, sanitation and maintenance procedures, deployment of labor, and maintenance of quality standards. We reserve the right to provide less training if you have one or more Franchised Restaurants in operation. All expenses incurred by you and your employees in attending the program, including without limitation, travel costs, room and board expenses, and the employee compensation shall be your sole responsibility. + + B. We will, from time to time upon your written request, make available, at your expense, training for additional managers designated by you and approved by us. Such training shall take place at our Cincinnati, or Columbus, Ohio training facilities or such other place as we may designate. You acknowledge that the time period within which we provide additional training will be subject to available openings in our regular training program with preference being given to initial training for new franchisees. + + C. We will schedule the opening of your Franchised Restaurant. For one (1) week prior to and one (1) week concurrent with the commencement of operations of the Franchised Restaurant, we will furnish to you, at your + + + + + +Restaurant and at our expense, one (1) or more of our representatives for the purpose of training your employees and management team in the operation of a Franchised Restaurant. During this period, the representatives will assist in establishing and standardizing procedures and techniques essential to the operation of a Buffalo Wild Wings business. If you request additional assistance from us in order to facilitate the opening of the Franchised Restaurant, and if, we, in our discretion, deem it necessary, feasible and appropriate to comply with the request, you will reimburse us for our expenses in providing such additional assistance, which may include our then-current service fee. You agree that during the week preceding the opening, you will have four (4) full days during which the Restaurant is fully operational and will host two (2) opening parties. + + D. If we determine, in our sole discretion, that you or your manager is unable to satisfactorily complete the required training program, you will have thirty (30) days to provide an alternate person to complete the training program at your sole expense. At least three (3) persons actively involved in the management and operation of the Franchised Restaurant must successfully complete the training program. If you fail to provide three (3) persons who can complete the training program, we will have the right to terminate this Agreement and you will not be entitled to a refund of any portion of the franchise fees paid. + + E. From time to time we may provide and if we do, may require that previously-trained and experienced franchisees, their managers and/or employees attend and successfully complete refresher training programs or seminars to be conducted at our training facility or at such other place as we shall designate. Attendance at such refresher training programs or seminars will be at your sole expense, provided, however, that attendance will not be required at more than two (2) such programs in any calendar year. + + 5 + +V. PROPRIETARY MARKS + + A. You acknowledge that our parent company is the owner of all right, title and interest together with all the goodwill of the Marks and has licensed the use of such Marks to us with the right to sublicense others. You further acknowledge that your right to use the Marks is derived solely from this Agreement and is limited to the conduct of business by you pursuant to and in compliance with this Agreement and all applicable standards, specifications, and operating procedures prescribed by us from time to time during the term of the Agreement. Any unauthorized use of the Marks by you is a breach of this Agreement and an infringement of the rights of us in and to the Marks. You acknowledge that your usage of the Marks and any goodwill established by your use of the Marks shall inure to the exclusive benefit of us and our affiliate, and that this Agreement does not confer any goodwill or other interests in the Marks upon you. Any developments and improvements by you relating to the Marks or the System shall be our sole property. You will not, at any time during the term of this Agreement or after its termination or expiration, contest the validity or ownership of any of the Marks or assist any other person in contesting the validity or ownership of the Marks. All provisions of this Agreement applicable to the Marks apply to any and all additional trademarks, service marks, and commercial symbols authorized for use by and licensed to you by us after the date of this Agreement. + + B. You will not use any Mark or portion of any Mark as part of a corporate or trade name, or with any prefix, suffix, or other modifying words, terms, designs, or symbols, or in any modified form. You will not use any Mark in connection with the sale of any unauthorized product or service or in any other manner not expressly authorized in writing by us. You shall give such notices of trademark and service mark registrations as we specify and to obtain such fictitious or assumed name registrations as may be required under applicable law. Your use of any of the Marks on the Internet/World Wide Web (including any Home Page) or any other medium must have our prior written approval. We reserve the right to prohibit your use of the Marks on the Internet. + + C. You will promptly notify us of any claim, demand or cause of action based upon or arising from any attempt by any other person, firm or corporation to use the Marks or any colorable imitation of the Marks. You shall also notify us of any action, claim or demand against you relating to the Marks within ten (10) days after you receive notice of said action, claim or demand. Upon receipt of timely notice of an action, claim or demand against you relating to the Marks, we and our affiliate shall have the sole right and duty to defend any such action. We and our affiliate will have the exclusive right to contest or bring action against any third party regarding the third party's use of any of the Marks and will exercise such right in our and our affiliate's sole discretion. In any defense or prosecution of any litigation relating to the Marks or components of the System undertaken by us, you shall cooperate in all respects with us and our affiliate and execute any and all documents and take all actions as may be desirable or necessary in the opinion of our counsel, to carry out such defense or prosecution. Both parties shall make every effort consistent with the foregoing to protect, maintain, and promote the Marks as identifying the System and only the System. + + D. If, in our sole discretion, it becomes advisable at any time, for us to modify or discontinue use of any Mark, and/or use one or more additional or substitute trade names, trademarks, service marks, or other commercial symbols, either systemwide or with respect to use by any selected franchisee, you will comply with our directions within a reasonable time after notice to you. We will have no liability or obligation whatsoever with respect to your modification or discontinuance of any Mark. + + E. In order to preserve the validity and integrity of the Marks and + + + + + +copyrighted material licensed to you and to assure that you are properly employing the same in the operation of your Franchised Restaurant, we and our agents have the right of entry and inspection of your premises and operating procedures at all reasonable times. We will have the right to observe the manner in which you are rendering your services and conducting your operations, to confer with your employees and customers, and to select Menu Items, ingredients, food and + + 6 + +non-food products, beverages, and other items, products, delivery vehicles, products and supplies for test of content and evaluation purposes to make certain that the Menu Items, ingredients, food and non-food products, beverages and other items, products, delivery vehicles, materials and supplies are satisfactory and meet our quality control provisions and performance standards. + +VI. CONFIDENTIAL MANUALS + + A. We will loan to you during the term of the franchise one (1) copy of our Confidential Operations Manual and other confidential manuals and written materials (all of which are collectively referred to herein as the "Manuals") containing reasonable, mandatory and suggested specifications, standards, operating procedures and rules prescribed from time to time by us for Buffalo Wild Wings businesses and information relative to your other obligations. You will not at any time, without our prior written consent, copy, duplicate, record or otherwise reproduce the Manuals in whole or in part or otherwise make the same available to any person. Any authorized duplication or copying of any of the Manuals shall be performed by us at your expense. We have the right to add to and otherwise modify, combine, or replace the Manuals from time to time to reflect changes in the specifications, standards, operating procedures and rules prescribed by us for Buffalo Wild Wings businesses, provided that no such addition or modification shall alter your fundamental status and rights under this Franchise Agreement. + + B. The Manuals shall at all times remain our sole property and shall promptly be returned upon the expiration or termination of this Agreement. + + C. The Manuals contain our proprietary information which you shall keep confidential both during the term of the franchise and subsequent to the expiration and/or termination of the franchise. You will at all times insure that your copy of the Manuals are available at the Franchised Restaurant premises in a current and up-to-date manner. At all times that the Manuals are not in use by authorized personnel, you will maintain the Manuals in a locked receptacle at the premises of the Franchised Restaurant, and will only grant authorized personnel, as defined in the Manuals, access to the key or lock combination of such receptacle. In the event of any dispute as to the contents of the Manuals, the terms of the master copy of the Manuals maintained by us at our home office will be controlling. + +VII. CONFIDENTIAL INFORMATION + + A. You acknowledge that your entire knowledge of the operation of a Buffalo Wild Wings business, including, without limitation, the method of preparation of Menu Items and other food products, and other specifications, recipes, standards and operating procedures of a Buffalo Wild Wings business is derived from information disclosed to you by us and that such information is proprietary, confidential and our trade secret. You will maintain the absolute confidentiality of all such information during and after the term of the franchise and you will not use any such information in any other business or in any manner not specifically authorized or approved in writing by us. + + B. You will divulge such confidential information only to the extent and only to such of your employees as must have access to it in order to operate the Franchised Restaurant. Any and all information, knowledge and know-how, including, without limitation, drawings, materials, equipment, techniques, restaurant systems, product formulae, recipes and other data which we designate as confidential will be deemed confidential for purposes of this Agreement, except information: 1) which you can demonstrate lawfully came to your attention prior to disclosure thereof by us, or 2) which, at the time of disclosure by us to you, had lawfully become a part of the public domain, through publication or communication by others, or 3) which, after disclosure to you by us, lawfully becomes a part of the public domain, through publication or communication by others. + + 7 + + C. Due to the special and unique nature of our confidential information, Marks and Manuals, you acknowledge that we will be entitled to immediate equitable remedies, including but not limited to, restraining orders and injunctive relief in order to safeguard our proprietary, confidential, unique, and special information and you acknowledge that money damages alone would be an insufficient remedy with which to compensate us for any breach of the terms of Paragraph V, VI and VII of this Agreement. All of your employees having access to our confidential and proprietary information and all of your shareholders, directors, officers, partners and/or members will be required to execute non-disclosure agreements in the form acceptable to us. + +VIII. MODIFICATION OF THE SYSTEM + + You acknowledge that from time to time we may change or modify the System presently identified by the Marks, including, without limitation, the adoption and use of new or modified trade names, trademarks, service marks or copyrighted + + + + + +materials, new Menu Items, new products, new equipment or new techniques. You will accept, use and display for the purpose of this Agreement any such changes in the System, as if they were part of this Agreement at the time of execution. You will make such expenditures as are reasonably required by such changes or modifications in the System. Except as directed by us, you will not change, modify or alter the System in any way. + +IX. ADVERTISING + + Recognizing the value of advertising and the importance of the standardization of advertising and promotion to the furtherance of the goodwill and the public image of Buffalo Wild Wings businesses, you agree: + + A. Before using any promotional and advertising materials, you will submit to us or our designated agency, for our prior approval, all information pertaining to promotional materials and advertising initiated by you, including, but not limited to, newspapers, radio and television advertising, Internet or any other medium, specialty and novelty items, signs, boxes, napkins, bags and wrapping papers. In the event written disapproval of any such advertising and promotional material has not been given by us to you within twenty (20) days from the date such information has been received by us, the materials will be deemed approved. Your failure to conform with these provisions and subsequent nonaction by us to require you to cure or remedy any such failure and default will not be deemed a waiver of future or additional failures and defaults by you under this provision and/or any other provision of this Agreement. The submission of advertising information to us for our approval will not affect your right to determine the prices at which you sell your products and/or services. + + B. You will contribute to the Buffalo Wild Wings Advertising and Development Fund ("Fund") (which may be one of several regional Funds, if we elect to establish separate Funds to serve various regions in which multiple franchisees are located) an amount equal to three percent (3%) of your Gross Sales, as defined in Paragraph X. Your required payments to the Fund will be made on or before the fifteenth day of the month for the preceding month. These contributions may be withdrawn from your bank account as provided in Paragraph X. We will use such funds to conduct local, regional or national advertising. Such payments shall be made in addition to and exclusive of any sums that you may be required to spend on system or grand opening advertising and promotion. The Fund shall be maintained and administered by us or our designee, as follows: + + 1. We will oversee all advertising programs and have sole discretion over the creative concepts, materials and media used in such programs including the placement and allocation. We will use the Fund to conduct national advertising, and/or, if regional Funds are developed, to conduct regional or local advertising on your behalf, at our sole discretion. We may also use such funds to conduct advertising in your local advertising market. However, we cannot and do not ensure that any particular franchisee will benefit directly or pro rata from the placement of advertising. + + 8 + + 2. For each of our company-owned and affiliate-owned Restaurants (except Special Sites identified in Paragraph I.C.) offering products and services similar to the Franchised Restaurant we will make contributions to the Fund or to regional Funds equivalent to the contributions required of Franchised Restaurants within the System or, if applicable, region in which the company-owned or affiliate-owned store is located. + + 3. We will administer and control the Fund and we will have the absolute and unilateral right to determine how, when and where the monies in the Fund will be spent. This includes the right to use Fund monies for (1) the creation, development and production of advertising and promotional materials, (2) any marketing or related research and development, and (3) advertising and marketing expenses, including without limitation, the absolute right to purchase and pay for product and food research and development, advertising materials, production costs, brochures, ad slicks, radio, film and television commercials, videotapes, newspaper, magazine and other print advertising, direct mail pieces, photographer costs, photographs, pictures, designs, services provided by advertising agencies, public relations firms or other marketing, research or consulting firms or agencies, market research and marketing surveys, menu design and graphics, customer incentive programs, sponsorships, marketing meetings and sales incentives, development of Home Pages on the Internet, Internet access provider costs, Internet/World Wide Web programming and advertising, subscriptions to industry newsletters or magazines, marketing or industry studies, books and research materials, administrative costs and salaries for marketing support personnel. All sums paid by you to the Fund will be maintained in a separate account from our other funds and shall not be used to defray any of our general operating expenses, except for such reasonable administrative costs and overhead, if any, as we may incur in activities reasonably related to the administration or direction of the Fund and advertising programs including, without limitation, costs incurred in collecting and accounting for assessments for the Fund. + + 4. It is our intent that all contributions to the Fund will be expended for advertising and promotional purposes during our fiscal year within which contributions are made. Any monies not expended in the fiscal year in which they were contributed will be applied and used for Fund expenses in the following year. + + 5. Although we intend the Fund to be of perpetual duration, we have the right to terminate the Fund. We will not terminate the Fund, however, until all monies in the Fund have been expended for advertising and promotional purposes. + + + + + + 6. An unaudited accounting of Fund contributions and expenditures will be prepared annually and will be made available to you upon request. At our option, any such annual accounting may include an audit of the contributions and expenditures of the Fund prepared by an independent certified public accountant selected by us and prepared at the expense of the Fund. + + 7. Once you make contributions to the Fund, all such monies will be used as required by this Paragraph IX and will not be returned to you. C. In addition to your contributions to the Fund, you may be required to spend up to two percent (2%) of your Gross Sales on approved local advertising. We may direct that your local advertising expenditures be made either individually or to a local advertising group as described below. + + 1. We shall have the right to designate local advertising markets and you will participate in cooperative advertising and marketing programs in your designated local advertising market as described in this Paragraph. Each Buffalo Wild Wings and bw-3 Restaurant (except Special Sites identified in Paragraph I.C.) within the designated local advertising area shall be a member of the local advertising group and each member shall have one vote on all matters requiring a vote. We reserve the right to designate the Bylaws which will govern the operation of local advertising groups. + + 9 + + 2. If we direct you to spend your advertising funds locally, all such expenditures will be made directly by you or the local advertising group, subject to approval and direction by us or our designated advertising agency. You acknowledge that we may direct local advertising to be spent according to a seasonally adjusted schedule; however, such expenditures shall not exceed two percent (2%) of your annual Gross Sales. You shall furnish to us an accurate accounting of all expenditures on local advertising and promotion. + + 3. You will submit documentation of your advertising expenditures at such times and in such form as we designate. If you fail to make any required advertising expenditures, we have the right to require you to contribute the amount of any deficiency to the Fund to be used by us for general advertising and promotion. + + D. We may require you to expend up to FIVE THOUSAND Dollars ($5,000) on newspaper, direct mail or advertising through other media prior to your opening and during your initial ninety (90) days of operation of the Franchised Restaurant. We retain the right to collect such funds directly from you and expend the funds on your behalf. Such advertising and promotion will be designated as "Grand Opening" advertising and promotion and will be conducted in accordance with the specifications set forth in the Manuals. + + E. You must carry and offer for sale to your customers a representative supply of trademarked clothing. We may, from time to time, develop and market special promotional items which will be made available to you at our cost plus a reasonable mark up and you will maintain a representative inventory of such promotional items to meet public demand. You will have the right to purchase alternative promotional items provided that such alternative goods conform to the specifications and quality standards established by us. You will, on an annual basis, participate in a minimum of fifty percent (50%) of the promotional programs introduced by us from time to time. You will participate in the specific promotional programs designated by us. + + F. You will maintain a business phone and advertise continuously in the classified or Yellow Pages of a local telephone directory approved by us or such other directories under the listing "Restaurant", or such other listings as deemed appropriate by us using mats of the type and size approved in advance by us. We reserve the right to require you to advertise in more than one local telephone directory. When more than one (1) Buffalo Wild Wings and/or bw-3 restaurant serves a metropolitan area, classified advertisements shall list all such restaurants operating within the distribution area of the classified directories, and you shall contribute your equal share in the cost of such advertisement. + + G. You will not use in advertising or any other form of promotion, or in any manner any of the marks without the appropriate -Registered Trademark- registration mark or the designations TM or SM where applicable. + +X. CONTINUING FEE + + A. You will pay us without offset, credit or deduction of any nature, so long as this Agreement is in effect, a monthly Continuing Fee equal to five percent (5%) of the Gross Sales derived from the Franchised Restaurant. The Continuing Fee will be paid monthly in the manner specified below or as otherwise prescribed in the Manuals. + + 1. We must receive from you within five (5) days after the end of each month, a correct statement of your Gross Sales for the preceding fiscal month as determined by us on a form approved by us and signed by you. Each monthly statement of Gross Sales shall be accompanied by the Continuing Fee payment based on the Gross Sales reported in the statement so submitted. You will make available to us all original books and records that we may deem necessary to ascertain your Gross Sales for reasonable inspection at reasonable times. + + 10 + + 2. The term "Gross Sales", as used in this Agreement, means and + + + + + +includes the total amount of all revenue from the sale of services, products and merchandise and all income of every kind and nature related to the Franchised Restaurant whether or not sold or performed at or from the Franchised Restaurant and the proceeds from all games, cover charges, service, license, use and similar fees collected by the Franchised Restaurant. Gross sales do not include any sales tax, use tax, or service taxes collected and paid to the appropriate taxing authority. + + B. Prior to the opening of your Restaurant (and thereafter as requested by us), you shall execute and deliver to us, our bank(s) and your bank, as necessary, all forms and documents that we may request to permit us to debit your account, either by check, via electronic funds transfer or other means or such alternative methods as we may designate ("Payment Methods"). You must comply with all procedures specified by us from time to time to take such actions as we may request to assist in utilizing any of the Payment Methods. We may use the Payment Methods to collect the amount of each month's Continuing Fee, Advertising Contributions, and any other amounts due to us or our affiliates under this Agreement or otherwise. The Continuing Fee shall be withdrawn from your designated bank account by electronic fund transfer on the fifth of each month for the previous month, or if the fifth falls on a weekend or bank holiday, then on the next business day. Advertising Contributions will be withdrawn on the fifteenth of each month or on the next business day. Payments for commissary purchases will be debited one business day after products are delivered to the Restaurant. We will determine your Gross Sales by means of the approved information system, or if we are unable to do so, you shall report your Gross Sales in writing on or before the fifth day of the month for the preceding month. You shall notify us at least twenty (20) days before closing or changing the account against which such debits are to be made. If such account is closed or ceases to be used, you shall immediately provide all documents and information necessary to permit us to debit the amounts due from an alternative account. You acknowledge that these requirements are only a method to facilitate prompt and timely payment of amounts due and shall not affect any obligation or liability for amounts owed. If for any reason your account cannot be electronically debited, you shall submit payments by check (certified or cashier's check if requested by us) on or before the dates when due. You shall indemnify, defend and hold us harmless from and against all claims, damages, losses, costs and expenses resulting from any dishonored debit against your account, regardless whether resulting from the act or omission of you or your bank; provided that you shall not be obligated to indemnify us for any dishonored debit caused by our negligence or mistake. + + C. All Continuing Fees, Advertising Contributions, amounts due for purchases by you from us and our affiliates, and other amounts which you owe us or our affiliates shall bear interest after due date at the highest applicable legal rate for open account business credit, not to exceed one and one-half percent (1.5%) per month. You acknowledge that this Paragraph does not constitute agreement by us or our affiliates to accept such payments after same are due or a commitment by us to extend credit to, or otherwise finance your operation of, the Franchised Restaurant. Further, you acknowledge that your failure to pay all amounts when due shall constitute grounds for termination of this Agreement, as provided in Paragraph XVI hereof, notwithstanding the provisions of this Paragraph. + + D. Notwithstanding any designation by you, we have the sole discretion to apply any payments by you to any past due indebtedness of yours for Continuing Fees, Advertising Contributions, purchases from us and our affiliates, interest or any other indebtedness. Further, if you are delinquent in the payment of any fees or indebtedness we have the right to require you to prepay estimated Continuing Fees and Advertising Contributions. + +XI. ACCOUNTING AND RECORDS + + A. You will maintain during the term of this Agreement, and preserve for the time period specified by us, full, complete, and accurate books, records, and accounts in accordance with the standard accounting + + 11 + +system prescribed by us from time to time in writing. You will retain for a period of three (3) years all books and records related to the Franchised Restaurant, including without limitation, sales checks, purchase orders, invoices, payroll records, customer lists, check stubs, sales tax records and returns, cash receipts and disbursement journals and general ledgers. If a computerized accounting system is developed by us for use throughout the franchise System, you will at your expense implement and utilize such a system according to the standards and procedures established by us. + + B. You will supply to us on or before the twenty-eighth (28th) day after the end of each fiscal quarter, in the form approved by us, an activity report and a detailed profit and loss statement, balance sheet and statement of cash flow for the last preceding fiscal quarter. Additionally, you will, at your expense, submit to us within ninety (90) days after the end of each fiscal year during the term of this Agreement, a detailed profit and loss statement and statement of cash flow for such fiscal year and a balance sheet as of the last day of such fiscal year, prepared on an accrual basis including all adjustments necessary for fair presentation of the financial statements. Such financial statements must be certified to be true and correct by you and be reviewed by an independent certified public account. + + C. You will submit to us such other periodic reports, forms and records as specified, and in the manner and at the time as specified in the Manuals or as we otherwise require in writing from time to time. + + D. You will record all sales on electronic cash registers approved by + + + + + +us or on such other types of cash registers as may be designated by us in the Manuals or otherwise in writing. We reserve the right to designate the information system used in your Franchised Restaurant including the computer hardware, software, other equipment and enhancements. At such time as we designate the approved information system, you will have one hundred eighty (180) days in which to install and commence using the approved information system. In connection with the approved information system, you agree to the following: + + 1. You understand that you will be required to acquire the right to use the information system, obtain peripheral equipment and accessories and arrange for required maintenance and support services, all at your cost. + + 2. We shall have the right at all times to access the information system and to retrieve, analyze, download and use all software, data and files stored or used on the information system. We may access the information system in the Franchised Restaurant or from other locations. You shall store all data and information on the information system that we designate from time to time. + + 3. All modifications and enhancements made to the approved information system shall be our property (or the appropriate vendor if we so designate), without regard to the source of the modification or enhancement. You agree to execute any documents, in the form provided by us, that we determine are necessary to reflect such ownership. + + 4. Upon expiration or termination of this Agreement, you shall allow our employees or agents to remove the required software from the information system, shall immediately return to us the software, each component thereof, any data generated by the use thereof, all documentation for the software and other materials or information that relate to or reveal the software and its operation. You shall immediately destroy any and all back-up or other copies of the software or parts thereof, and any data generated by the use of the software (other than financial information relating solely to you). + + 5. You acknowledge and agree that there will be fees payable by you in connection with the installation, use, support, maintenance, and periodic enhancements of the approved information system. These fees will include but are not necessarily limited to an on-site installation and support fee, + + 12 + +software support fees and software maintenance fees. These fees will be payable to us or a vendor designated by us and may be increased from time to time. + + 6. You will be required to execute a software license agreement setting forth in more detail your rights and obligations in connection with your use of the approved information system. + +You agree that we have the right to use your data as part of our earnings claim in our Franchise Offering Circular. + + E. We or our designated agents have the right at all reasonable times to examine and copy, at our expense, your books, records, and tax returns. We also have the right, at any time, to have an independent audit made of your books and records at our expense. If an inspection reveals that any payments due to us have been understated in any report to us, then you will immediately pay to us the amount understated upon demand, in addition to interest from the date such amount was due until paid, at the maximum rate permitted by law not to exceed one and half percent (1.5%) per month. If an inspection discloses an understatement in any report of two percent (2%) or more, you will also reimburse us for any and all costs and expenses connected with the inspection (including, without limitation, reasonable accounting and attorneys' fees), and we will thereafter have the right to require you to submit annual financial statements, prepared in accordance with generally accepted accounting principles, audited by an independent certified public accountant. The foregoing remedies shall be in addition to any other remedies we may have. + + F. You acknowledge that nothing contained in this Agreement constitutes our agreement to accept any payments after they are due or a commitment by us to extend credit to or otherwise finance your operation of the Franchised Restaurant. Further, you acknowledge that your failure to pay all amounts when due constitutes a material default of, and grounds for, termination of this Agreement. + +XII. STANDARDS OF QUALITY AND PERFORMANCE + + In order to promote and protect the value of the Marks and the System, and to insure optimum quality control as to products and services provided and sold in Franchised Restaurants, you acknowledge and agree that substantial uniformity must be maintained in the quality, type and standard of Franchised Restaurant, and in their facilities, products, services and operations. Therefore, you will comply with all requirements described in this Agreement, the Manuals and other written policies supplied by us. Mandatory specifications, standards, operating procedures and rules prescribed from time to time by us in the Manuals or otherwise communicated to you in writing, shall constitute provisions of this Agreement as if fully set forth herein. All references herein to this Agreement shall include all such mandatory specifications, standards and operating procedures and rules. + + A. You will commence operation of your Franchised Restaurant within nine (9) months of the execution of this Agreement or as otherwise required or approved in writing by us. Before opening, you will have procured all necessary licenses, permits, and approvals, including, but not limited to, liquor and construction permits; hired and trained personnel, made all leasehold + + + + + +improvements, and acquired initial inventory. At the time of opening you must have a minimum of Fifty Thousand Dollars ($50,000) in immediately accessible working capital funds to be used solely to defray the costs of operating the Restaurant for the initial several months. If for any reason you fail to commence operation within the nine (9) month period, we may terminate this Agreement immediately upon delivery of written notice of termination to you. + +B. You will maintain the condition and appearance of the premises of the Franchised Restaurant consistent with our quality controls and standards. You will effect reasonable maintenance of the Franchised Restaurant as is from time to time required to maintain or improve the appearance and efficient operation of the Franchised Restaurant, including but not limited to replacement of worn out or obsolete fixtures and signs, repair of the exterior and interior of the premises of the Franchised Restaurant, and purchasing and installation of new or + + 13 + +modified equipment. If at any time in our judgment the general state of repair or the appearance of the premises of the Franchised Restaurant or its equipment, fixtures, signs or decor does not meet our quality control and standards therefor, we will notify you, specifying the action to be taken by you to correct such deficiency. If you fail or refuse to initiate a bona fide program to complete any required maintenance, within thirty (30) days after receipt of such notice, we will have the right, but not the obligation, in addition to all other remedies, to enter upon the premises of the Franchised Restaurant and effect such repairs, painting, maintenance or replacements of equipment, fixtures or signs on your behalf and you shall pay the entire costs thereof on demand. + + C. You will not make any material alterations to the premises of the Franchised Restaurant make any material replacements of or alterations to the equipment, fixtures or signs of the Franchised Restaurant without our prior written approval. + + D. The Franchised Restaurant may be used solely for the purpose of conducting a Buffalo Wild Wings Franchised Restaurant. The operating entity (corporation, partnership or limited liability company) will be dedicated solely to the operation of your Franchised Restaurant(s) and will not hold any interest in, operate or manage any other business of any kind without our prior written approval. + + E. We have developed and own proprietary sauces for use in preparing chicken wings, the weck kaiser roll and other menu items and specially prepared pocket pizza mix and "Buffalo Breath Chili" mix ("Trade Secret Food Products"). In order to protect our trade secrets and to monitor the manufacture, packaging, processing and sale of Trade Secret Food Products, we will (i) manufacture, supply, and sell Trade Secret Food Products to our franchisees; (ii) disclose the formulae for and methods for preparation of the Trade Secret Food Products to a limited number of suppliers who may be authorized by us to manufacture Trade Secret Food Products to our precise specifications and sell Trade Secret Food Products to our franchisees; and/or (iii) disclose the formulae for and methods for preparation of the pocket pizza mix and the Buffalo Breath Chili mix to you who will be authorized by us to manufacture them to our precise specifications for sale only at the location of the Franchised Restaurant specified herein, unless otherwise approved by us. Under no circumstances will we disclose the formulae for and methods of preparation of any of our proprietary sauces to you. You acknowledge that you may be required to purchase Trade Secret Food Products (and other products whose consistency and quality is key to the success of the System) from us or a limited number of suppliers so authorized by us and will be required to use Trade Secret Food Products as designated by us. + + F. You will offer for sale and sell at the Franchised Restaurant all Menu Items, other food and beverage products and other products that we from time to time require and shall not offer for sale or sell at the Franchised Restaurant or the premises which you occupy any unapproved products or menu items or use such premises for any purpose other than the operation of a Franchised Restaurant in full compliance with this Agreement. You will offer all Menu Items on a menu specified by us. + + G. In order to ensure that all Menu Items produced by you meet our high standards of taste, texture, appearance and freshness, and in order to protect our goodwill and Marks, all Menu Items and other food products shall be prepared only by properly trained personnel strictly in accordance with our recipes, cooking techniques and processes, and the Manuals, and shall be sold only at retail to customers in conformity with our marketing plan and concept. You acknowledge that such recipes, cooking techniques and processes are integral to the System and failure to adhere to such recipes, cooking techniques and processes shall be detrimental to the System and Marks. + + H. From time to time, we will provide you with a list of approved manufacturers, suppliers and distributors ("Approved Suppliers List") and approved inventory products, fixtures, furniture, equipment, signs, stationery, supplies, and other items or services necessary to operate the Franchised Restaurant ("Approved Supplies List"). The list will specify the manufacturer, supplier and distributor and the inventory products, + + 14 + +fixtures, furniture, equipment, signs, stationery, supplies and services which we have approved to be carried or used in the System. We may revise the Approved Suppliers List and Approved Supplies List from time to time in our sole + + + + + +discretion and such lists shall be submitted to you as we deem advisable. If you propose to offer for sale at the Franchised Restaurant any brand of product, or to use in the operation of the Franchised Restaurant any brand of food ingredient or other material or supply which is not then approved by us as meeting its minimum specifications and quality standards, or to purchase any product from a supplier that is not then designated by us as an approved supplier, you must first notify us and shall upon our request submit samples and such other information as we require for examination and/or testing or to otherwise determine whether such product, material or supply, or such proposed supplier meets its specifications and quality standards. We may charge you a fee in connection with such examination and/or testing which will not exceed the reasonable cost of the inspection and evaluation and the actual cost of the test. In some cases we may refuse to consider an alternate supplier of certain items. We reserve the right to re-inspect the facilities and products of any supplier of an approved item and to revoke its approval of any item or supplier which fails to continue to meet any of our criteria. + + I. All inventory, products and materials, and other items and supplies used in the operation of the Franchised Restaurant which are not specifically required to be purchased in accordance with our Approved Supplies List and Approved Suppliers List must conform to the specifications and quality standards established by us from time to time. + + J. You will fully comply with all mandatory specifications, standards, operating procedures and rules as in effect from time to time relating to: + + 1. The safety, maintenance, cleanliness, sanitation, function and appearance of the Franchised Restaurant premises and its equipment, fixtures, decor and signs and maintenance and service agreements therefor; + + 2. Training, dress, general appearance and demeanor of Franchised Restaurant employees; + + 3. Type, quality, taste, portion control and uniformity, and manner of preparation, packaging, displays and sale of all Menu Items, beverages and other food items sold by the Franchised Restaurant and of all food, beverages and other products used in the preparation and packaging thereof; + + 4. The promotion and sale of novelty items bearing the Marks, such as cups, T-shirts and related merchandise and accessories; + + 5. Hours during which the Franchised Restaurant will be open for business; + + 6. Advertising and promotional programs; + + 7. Use and retention of standard forms; + + 8. Our recipes; + + 9. Use and illumination of signs, posters, displays, menu boards and similar items; + + 10. Your identification as the owner of the Franchised Restaurant; + + 11. The handling of customer complaints; and + + 12. Any other standard, specification or procedure designated by us. + + 15 + + K. You will secure and maintain in force all required licenses, including liquor licenses, permits and certificates relating to the operation of the Franchised Restaurant and will operate the Franchised Restaurant in full compliance with all applicable laws, ordinances and regulations, including without limitation all government regulations relating to occupational hazards and health, dispensing of food products, consumer protection, trade regulation, worker's compensation, unemployment insurance and withholding and payment of Federal and State income taxes and social security taxes and sales, use and property taxes. + + L. You will refrain from any merchandising, advertising or promotional practice which is unethical or may be injurious to our business and/or the business of other Franchised Restaurants or to the goodwill associated with the Marks or System. + + M. In the operation of the Franchised Restaurant you will use only displays, trays, boxes, bags, wrapping paper, labels, forms and other paper and plastic products imprinted with the Marks and colors as prescribed from time to time by us. + + N. You acknowledge that the Franchised Restaurant shall at all times maintain an inventory of ingredients, food and beverage products and other products, materials and supplies that will permit operation of the Franchised Restaurant at maximum capacity. + + O. The Franchised Restaurant shall at all times be under your direct, on-premises supervision, unless, upon sixty (60) days prior written notice and approval by us you designate a trained and competent employee to act as full-time general manager. Your designation of a general manager shall be subject to our prior written approval, and shall further be subject to the designated general manager successfully completing our training course. All costs for the attendance of the designated general manager at our training + + + + + +course shall be at your cost, except as set forth in Section IV(A). We will have the right at any time to revoke our approval of a designated manager. The use of a general manager will in no way relieve you of your obligations to observe, perform and comply with this Agreement and the Manuals and to insure that the Franchised Restaurant is properly managed and operated or the responsibility for the on-site, day to day operation of the Franchised Restaurant. You will employ a sufficient number of competent and trained employees to insure efficient service to your customers. + + P. You will not install or maintain on the premises of the Franchised Restaurant any newspaper racks, video games, jukeboxes, gaming machines, gum machines, games, rides, vending machines, pool tables, automated teller machines, or other similar devices without our written approval. The income derived from any approved machines will be included in gross sales for purposes of your Continuing Fee and advertising contribution. + + Q. You will timely pay all of your obligations and liabilities due to us, our parent, bw-3, Inc., our affiliates and other suppliers, lessors and creditors. + + R. You will notify us in writing within five (5) days of the commencement of any action, suit, or proceeding, and of the issuance of any order, writ, injunction, award or decree of any court, agency, or other governmental instrumentality, which may adversely affect the operation or financial condition of the Franchised Restaurant. + + S. We reserve the right to require you to offer delivery service to customers located within a reasonable radius of the Franchised Restaurant. As of the date of this Agreement, such delivery service is at your option. If the Franchised Restaurant offers delivery service to customers located within its Designated Area, in order to maintain the quality of all food products, the Franchised Restaurant will not offer delivery service to any customer whose order cannot be delivered within a reasonable time from when such order is placed, in + + 16 + +accordance with our standards. You will charge the same price for products offered by the Franchised Restaurant whether delivered or sold over the counter in the Franchised Restaurant, plus a reasonable delivery charge. + +XIII. OPERATIONS ASSISTANCE + + A. We may from time to time advise or offer guidance to you relative to prices for the food and other products offered for sale by the Franchised Restaurant that in our judgment constitute good business practice. Such guidance will be based on our experience in operating and franchising Restaurants and an analysis of the costs of such products and prices charged for competitive products. You will not be obligated to accept any such advice or guidance and shall have the sole right to determine the prices to be charged from time to time by the Franchised Restaurant and no such advice or guidance shall be deemed or construed to impose upon you any obligation to charge any fixed, minimum or maximum prices for any product offered for sale by the Franchised Restaurant. We may from time to time establish promotional practices which you are required to follow such as "free refill," "buy one and get one free" or similar practices. + + B. Before the opening of the Franchised Restaurant we will provide you with the following: + + 1. A comprehensive list of established sources of equipment, foods, supplies and containers necessary for the operation of the Franchised Restaurant and provide specifications for such products; + + 2. Coordination of product distribution for local, regional and national suppliers; and + + 3. Regulation of quality standards and products in conformance throughout the network of Franchised Restaurants. + + C. We may furnish you with such assistance in connection with the operation of the Franchised Restaurant as we reasonably determined to be necessary from time to time. Operations assistance may consist of advice and guidance with respect to: + + 1. Proper utilization of procedures to be utilized by the Franchised Restaurant regarding the service and sale of all Menu Items and other food and beverage items, and related items and materials as approved by us; + + 2. Additional products and services authorized for sale by Franchised Restaurants; + + 3. Purchase of ingredients and other food and beverage items, materials and supplies; + + 4. The institution of proper administrative, bookkeeping, accounting, inventory control, supervisory and general operating procedures for the effective operation of the Franchised Restaurant; and + + 5. Advertising and promotional programs. + + D. We will make periodic visits to the Franchised Restaurant for the purposes of consultation, assistance, and guidance in all aspects of the operation and management of the Franchised Restaurant as we reasonably determine + + + + + +to be necessary from time to time. We or our representatives who visit the Franchised Restaurant will prepare, for the benefit of both us and you, written reports with respect to such visits outlining any suggested changes or improvements in the operations of the Franchised Restaurant and detailing any defaults in such operations which become evident as a result of any such visit, and a copy of each such written report shall be provided to both us and you. We will advise you of problems arising out of the operation of the Franchised + + 17 + +Restaurant as disclosed by reports submitted to us by you or by inspections conducted by us of the Franchised Restaurant. + + E. We will provide to you the specifications, Approved Suppliers Lists, Approved Supplies Lists, training and Manuals at various times between the execution of this Agreement and the opening of the Franchised Restaurant. + + F. In the event you request additional operational assistance or services, we have the right to condition the rendering of such services upon the payment of a per diem fee and all of our expenses incurred in rendering the services. + +XIV. INSURANCE + + A. You will procure at your expense and maintain in full force and effect during the term of this Agreement, an insurance policy or policies protecting you, us and our designated affiliates, and their officers, directors, partners and employees against any loss, liability, personal injury, death, or property damage or expense whatsoever arising or occurring upon or in connection with the Franchised Restaurant, as we may reasonably require for our own and your protection. We will be named an additional insured in such policy or policies. + + B. The policy or policies shall be written by an insurance company satisfactory to us in accordance with standards and specifications set forth in the Manuals or otherwise in writing, and shall include, at a minimum (except as different coverages and policy limits may reasonably be specified for all franchisees from time to time by us in the Manuals or otherwise in writing) the following: + + 1. All risks coverage insurance on the Franchised Restaurant and all fixtures, equipment, supplies and other property used in the operation of the Franchised Restaurant, for full repair and replacement value of the machinery, equipment, improvements and betterments, without any applicable co-insurance clause, except that an appropriate deductible clause shall be permitted. + + 2. Worker's compensation and employer's liability insurance as well as such other insurance as may be required by statute or rule of the state in which the Franchised Restaurant is located and operated. + + 3. Comprehensive general liability insurance and product liability insurance with minimum limits of ONE MILLION Dollars ($1,000,000) combined single limit including the following coverages: contractual liability; personal injury; products/completed operation; and tenant's fire legal liability; insuring against all claims, suits, obligations, liabilities and damages, including attorneys' fees, based upon or arising out of actual or alleged personal injuries or property damage resulting from, or occurring in the course of, or on or about or otherwise relating to the Franchised Restaurant, provided that the required amounts herein may be modified from time to time by us to reflect inflation or future experience with claims. + + 4. If you offer delivery service or utilize motor vehicles for any other purpose in the operation of the Franchised Restaurant, automobile liability insurance, including owned, hired and non-owned vehicle coverage, with a combined single limit of at least ONE MILLION Dollars ($1,000,000). + + 5. Such insurance and types of coverage as may be required by the terms of any lease for the Franchised Restaurant, or as may be required from time to time by us. + + 6. Liquor liability coverage in a minimum amount of ONE MILLION Dollars ($1,000,000) or such other amount as may be specified by us. + + 18 + + C. The insurance afforded by the policy or policies respecting liability shall not be limited in any way by reason of any insurance which may be maintained by us. The insurance coverage must commence as of the date the location of the Franchised Restaurant has been secured. You agree to deliver to us prior to opening and periodically at any time upon our request, proper certificate evidencing the existence of the insurance coverage which names us as a named insured. Such certificate shall state that said policy or policies will not be canceled or altered without at least twenty (20) days prior written notice to us and shall reflect proof of payment of premiums. Maintenance of such insurance and the performance by you of the obligations under this Paragraph will not relieve you of liability under the indemnity provision set forth in this Agreement. Minimum limits as required above may be modified from time to time, as conditions require, by written notice to you and we may require you to provide periodic proof of payment of premiums. + + D. If you, for any reason, do not procure and maintain such insurance + + + + + +coverage as required by this Agreement, we have the right and authority (without, however, any obligation to do so) immediately to procure such insurance coverage and to charge same to you, which charges, together with a reasonable fee for expenses incurred by us in connection with such procurement, shall be payable by you immediately upon notice. + +XV. COVENANTS + + A. Unless otherwise specified, the term "you" as used in this Paragraph XV shall include, collectively and individually, all officers, directors, managers, and holders of a beneficial interest of your securities, and of any corporation directly or indirectly controlling you, if you are a corporation, the general and limited partners (including any corporation and the officers, directors, and holders of a beneficial interest of your securities, of a corporation which controls, directly or indirectly, any general or limited partner), if you are a partnership, and all members if you are a limited liability company. + + B. You covenant that during the term of this Agreement, except as otherwise approved in writing by us, you (if you are an individual), a shareholder of a beneficial interest of ten percent (10%) or more of your securities (if you are a corporation), a general partner of yours (if you are a partnership), a member (if you are a limited liability company) or your full-time manager approved by us shall devote full time, energy and best efforts to the management and operation of the Franchised Restaurant. At all times during the term of this Agreement, the on-site day to day management and operation of the Franchised Restaurant shall be conducted by someone who has been approved by us and who has satisfactorily completed our training program. + + C. You covenant that during the term of this Agreement, except as otherwise approved in writing by us, you will not, either directly or indirectly, for yourself, or through, on behalf of, or in conjunction with any person, persons, partnership, corporation or company: + + 1. Divert or attempt to divert any business or customer of the Franchised Restaurant to any competitor, by direct or indirect inducement or otherwise, or do or perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated with the Marks or the System. + + 2. Employ or seek to employ any person who is at that time employed by us, our affiliates, or by any other franchisee of ours, or otherwise directly or indirectly induce or seek to induce such person to leave his or her employment thereat. + + 3. Directly or indirectly, for yourself or through, on behalf of, or in conjunction with any person or entity, own, manage, operate, maintain, engage in, consult with or have any interest in: a) any restaurant business, b) any prepared food business, or c) any other business which sells or offers to dispense prepared food products the same as or similar to the type sold in the System. + + 19 + + D. You specifically acknowledge that, pursuant to this Agreement, you will receive valuable training and confidential information, including, without limitation, information regarding our promotional, operational, sales and marketing methods and techniques and the System. Accordingly, you covenant that, except as otherwise approved in writing by us, you will not, for a period of two (2) years after the expiration or termination of this Agreement, regardless of the cause of termination, or within two (2) years of the sale of the Franchised Restaurant or any interest in you, either directly or indirectly, for yourself, or through, on behalf of, or in conjunction with any person or entity, own, manage, operate, maintain, engage in, consult with or have any interest in: i) any restaurant business, ii) any prepared food business, or iii) any other business which sells or offers to dispense prepared food products the same as or similar to the type sold in the System: + + 1. At the premises of the former Franchised Restaurant; + + 2. Within a radius of ten (10) miles of the former Franchised Restaurant; or + + 3. Within a radius of ten (10) miles of the location of any other business using the System, whether franchised or owned by us or our affiliates. + + E. You will not, at any time during or after the term of this Agreement, divulge to any person, partnership, corporation or any other entity any information, trade secrets, the ingredients, recipes, cooking techniques and processes, used in the Trade Secret Food Products, and other food and beverage products and Menu Items used in the System or any information stated in the Manuals. + + F. The parties agree that each of the foregoing covenants shall be construed as independent of any other covenant or provision of this Agreement. If all or any portion of a covenant in this Paragraph XV is held unreasonable or unenforceable by a court or agency having valid jurisdiction in an unappealed final decision to which we are a party, you will be bound by any lesser covenant subsumed within the terms of such covenant that imposes the maximum duty permitted by law, as if the resulting covenant were separately stated in and made a part of this Paragraph XV. + + G. You understand and acknowledge that we have the right, in our sole discretion, to reduce the scope of any covenant set forth in Paragraphs XV.C. and XV.D. in this Agreement, or any portion thereof, without your consent, + + + + + +effective immediately upon receipt by you of written notice thereof, and you shall comply forthwith with any covenant as so modified, which shall be fully enforceable notwithstanding the provisions of Paragraph XXVI hereof. + + H. We have the right to require all of your current and future shareholders, directors, officers, partners, members, managers and all personnel performing managerial or supervisory functions and all personnel receiving training from us to execute similar covenants in a form satisfactory to us. + +XVI. DEFAULT AND TERMINATION + + A. If you are in substantial compliance with this Agreement and we materially breach this Agreement and fail to cure such breach within a reasonable time after written notice thereof is delivered to us, you may terminate this Agreement. "Reasonable time," as used herein, shall be construed as allowing us at least thirty (30) days within which to commence curing any such material breach. Such termination shall be effective thirty (30) days after delivery to us of written notice that such breach has not been cured and you elect to terminate this Agreement. An attempted termination of this Agreement by you except as provided in this Paragraph shall be deemed a termination without cause and a breach of this Agreement. + + 20 + + B. This Agreement shall terminate automatically upon delivery of written notice of termination to you, if you or any shareholder, officer, partner, member or manager: + + 1. Fails to satisfactorily complete the training program, including the opportunity to provide an alternate manager, as provided in Paragraph IV of this Agreement; + + 2. Has made any material misrepresentation or omission in your application for the franchise; + + 3. Is convicted of or pleads no contest to a felony or other crime or offense that is likely to adversely affect your reputation, the Franchised Restaurant, or the goodwill associated with the Marks or System; + + 4. Makes any unauthorized use, disclosure or duplication of any portion of the Manuals or duplicates or discloses or makes any unauthorized use of any trade secret or confidential information provided to you by us; + + 5. Abandons or fails or refuses to actively operate the Franchised Restaurant for more than five (5) days in any twelve (12) month period or for more than two (2) consecutive business days in any twelve (12) month period, unless the Franchised Restaurant has been closed for a purpose approved by us or due to force majeure, or fails to relocate to approved premises within an approved period of time following expiration or termination of the lease for the premises of the Franchised Restaurant; + + 6. Surrenders or transfers control of the operation of the Franchised Restaurant, makes an unauthorized direct or indirect assignment of the franchise or an ownership interest in you or fails or refuses to assign the franchise or the interest in you of a deceased or disabled controlling owner thereof as herein required; + + 7. Submits to us on five (5) or more separate occasions at any time during the term of this Agreement or on two (2) or more separate occasions during any twelve (12) month period any reports or other data, information or supporting records which understate by more than two percent (2%) the Continuing Fees for any period of, or periods aggregating, three (3) or more months, and you are unable to demonstrate that such understatements resulted from inadvertent error; + + 8. Commits any affirmative act of insolvency, or files any petition or action of insolvency, or for appointment of a receiver or trustee, or makes any assignment for the benefit of creditors, or fails to vacate or dismiss within sixty (60) days after filing any such proceedings commenced against you by a third party; + + 9. Materially misuses or makes an unauthorized use of any Marks or commits any act which can reasonably be expected to materially impair the goodwill associated with any Marks; + + 10. Materially misuses or makes an unauthorized use of our Proprietary Software Program; + + 11. Fails on three (3) or more separate occasions within any period of twelve (12) consecutive months or eight (8) or more separate occasions at any time during the term of this Agreement to submit when due reports or other information or supporting records, to pay when due the Continuing Fees, advertising contributions, amounts due for purchases from us and our affiliates or other payments due to us and our affiliates, or otherwise fails to comply with this Agreement, whether or not such failures to comply are corrected; + + 21 + + 12. Continues after written notice from us and/or any governmental authority to violate any health, safety or sanitation law, ordinance or regulation or operates the Franchised Restaurant in a manner that presents a health or safety hazard to your customers or the public; + + + + + + 13. Fails to commence operations within nine (9) months after execution of this Agreement, or as otherwise required or approved in writing by us; or + + 14. Defaults under the lease, if any, for the Franchised Restaurant. + + C. This Agreement shall terminate at our sole option without further action by us or notice to you if you or your owner: + + 1. Fails or refuses to make payments of any amounts due to us or our affiliates for Continuing Fees, advertising contributions, purchases from us or our affiliates or any other amounts due to us or our affiliates, and does not correct such failure or refusal within ten (10) days after written notice of such failure is delivered to you; + + 2. Fails or refuses to comply with any other provision of this Agreement, or any mandatory specification, standard or operating procedure prescribed in the Manuals or otherwise in writing, and does not correct such failure within thirty (30) days (or provide proof acceptable to us that you have made all reasonable efforts to correct such failure and will continue to make all reasonable efforts to cure until a cure is effected if such failure cannot reasonably be corrected within thirty (30) days) after written notice of such failure to comply is delivered to you. + + 3. Fails to devote your best efforts to adequately represent the Franchised Restaurant in your Designated Area through your sales and service efforts and does not correct such failure within thirty (30) days (or provide proof acceptable to us that you have made all reasonable efforts to correct such failure and will continue to make all reasonable efforts to cure until a cure is effected if such failure cannot reasonably be corrected within thirty (30) days) after written notice of such failure to comply is delivered to you. + + D. To the extent that the provisions of this Agreement provide for periods of notice less than those required by applicable law, or provide for termination, cancellation, non-renewal or the like other than in accordance with applicable law, such provisions shall, to the extent such are not in accordance with applicable law, not be effective, and we will comply with applicable law in connection with each of these matters. + + E. In addition to our right to terminate this Agreement, and not in lieu of such right or any other rights against you, we, in the event that you have not cured a default under this Agreement within the twenty (20) days after receipt of a written notice to cure from us, may, at our option, enter upon the premises of the Franchised Restaurant and exercise complete authority with respect to the operation of the Franchised Restaurant until such time as we determine that your default has been cured and that there is compliance with the requirements of this Agreement. You specifically acknowledge that our designated representative may take over, control, and operate the Franchised Restaurant, and that you will pay us a service fee of not less than TWO HUNDRED Dollars ($200) per day plus all travel expenses, room and board and other expenses reasonably incurred by such representative so long as it shall be required by the representative to enforce compliance herewith. You further acknowledge that if, as herein provided, we temporarily operate for you the Franchised Restaurant, you will indemnify, defend and hold us harmless and any representative of ours who may act hereunder, from any and all claims arising from the operation of the Franchised Restaurant, including without limitation, acts and omissions of us or our representatives. + + 22 + +XVII. RIGHTS AND DUTIES OF PARTIES UPON EXPIRATION OR TERMINATION + +Upon termination or expiration, this Agreement and all rights granted hereunder to you will forthwith terminate, and: + + A. You will immediately cease to operate the Franchised Restaurant under this Agreement, and shall not thereafter, directly or indirectly, represent to the public or hold yourself out as a present or former franchisee of ours. + + B. Upon our demand, you will assign to us your interest in any lease then in effect for the Franchised Restaurant premises. + + C. You will immediately and permanently cease to use, by advertising or in any manner whatsoever, any confidential methods, procedures, and techniques associated with the System; the Marks and distinctive forms, slogans, signs, symbols, logos, or devices associated with the System. In particular, you will cease to use, without limitation, all signs, advertising materials, stationery, forms, and any other articles which display the Marks associated with the System. + + D. You will take such action as may be necessary to cancel or assign to us or our designee, at our option, any assumed name rights or equivalent registration filed with state, city, or county authorities which contains the name "Buffalo Wild Wings," "bw-3" or any Mark, and you will furnish us with evidence satisfactory to us of compliance with this obligation within thirty (30) days after termination or expiration of this Agreement. + + E. You will, in the event you continue to operate or subsequently begin to operate any other business, not use any reproduction, counterfeit, copy or colorable imitation of the Marks either in connection with such other business or the promotion thereof, which is likely to cause confusion, mistake or deception, or which is likely to dilute our exclusive rights in and to the Marks + + + + + +and will not utilize any designation of origin or description or representation which falsely suggests or represents an association or connection with us so as to constitute unfair competition. You will make such modifications or alterations to the premises of the Franchised Restaurant (including, without limitation, the changing of the telephone number) immediately upon termination or expiration of this Agreement as may be necessary to prevent any association between us or the System and any business thereon subsequently operated by you or others, and will make such specific additional changes thereto as we may reasonably request for that purpose, including, without limitation, removal of all distinctive physical and structural features identifying the System. In the event you fail or refuse to comply with the requirements of this Paragraph XVII, we have the right to enter upon the premises where your Franchised Restaurant was conducted, without being guilty of trespass or any other tort, for the purpose of making or causing to be made such changes as may be required at your expense, which expense you will pay upon demand. + + F. You will promptly pay all sums owing to us and our affiliates. In the event of termination for any default, such sums will include all damages, costs, and expenses, including reasonable attorneys' fees, incurred by us as a result of the default. + + G. You will pay to us all damages, costs and expenses, including reasonable attorneys' fees, incurred by us in obtaining injunctive or other relief for the enforcement of any provisions of this Agreement. + + H. You will immediately return to us at your cost all Manuals, our Proprietary Software Program, customer lists, records, files, instructions, brochures, agreements, disclosure statements, and any and all other materials provided by us to you relating to the operation of the Franchised Restaurant (all of which are acknowledged to be our property). + + 23 + + I. We will have the right, title and interest to any sign or sign faces bearing the Marks. You hereby acknowledge our right to access the premises of the Franchised Restaurant if we elect to take possession of any sign or sign faces bearing the Marks. + + J. You hereby acknowledge that all telephone numbers used in the operation of the Franchised Restaurant constitute assets of the Franchised Restaurant; and upon termination or expiration of this Agreement you will assign to us or our designee, all right, title, and interest in and to your telephone numbers and will notify the telephone company and all listing agencies of the termination or expiration of your right to use any telephone number and any regular, classified or other telephone directory listing associated with the Marks and to authorize a transfer of same to or at our direction. + + K. We will have the right (but not the duty), to be exercised by notice of intent to do so within sixty (60) days after termination or expiration, to purchase for cash any or all assets of the Franchised Restaurant, including leasehold improvements, equipment, supplies, and other inventory, advertising materials, and all items bearing the Marks, at your cost or fair market value, whichever is less. You acknowledge that, pursuant to Paragraph XVII.I. of this Agreement, all signs and sign faces bearing the Marks are specifically excluded from this provision as such signs and sign faces are deemed to be our property. If the parties cannot agree on fair market value within a reasonable time, the determination of fair market value shall be determined by an appraiser selected by us and you. If you and we cannot agree on a single appraiser, each party shall select one appraiser, who together will select a third appraiser and the fair market value will be the average of the three (3) independent appraisers. Each party will pay their own appraiser and the cost of the third appraiser will be shared equally by the parties. If we elect to exercise any option to purchase as herein provided, we have the right to set off all amounts due from you under this Agreement, if any, against any payment therefor. + + L. You will comply with the covenants contained in Paragraph XV of this Agreement. + +XVIII. TRANSFERABILITY OF INTEREST + + A. This Agreement and all rights hereunder can be assigned and transferred by us and, if so, shall be binding upon and inure to the benefit of our successors and assigns. + + B. This Agreement, and your rights and obligations under it, are and shall remain personal to you. The term "Transfer" shall mean any sale, assignment, gift, pledge, mortgage or any other encumbrance, transfer by bankruptcy, transfer by judicial order, merger, consolidation, share exchange, transfer by operation of law or otherwise, whether direct or indirect, voluntary or involuntary, of this Agreement or any interest in it, or any rights or obligations arising under it, or of any material portion of your assets, or of any interest in you. You (and your shareholders, partners and members) will not directly or indirectly make a Transfer without our prior written consent. We will not withhold our consent to a Transfer, subject to all of the following conditions being satisfied: + + 1. You are in full compliance with this Agreement, you have no uncured defaults, all your fees, debts and financial obligations to us, our affiliates and the Fund are current, and you are current in your required local advertising expenditures; + + 2. You execute a written agreement in a form satisfactory to us in which you and your owners covenant to observe all applicable post-term obligations and covenants contained in this Agreement; + + + + + + 3. The proposed transferee enters into a written agreement in a form satisfactory to us assuming and agreeing to discharge all of your obligations and covenants under this Agreement for the remainder of its term or, at our option, execute our then-current standard form of franchise agreement (which + + 24 + +may provide for different fees, advertising requirements, duration, and other rights and obligations from those provided in this Agreement); + + 4. The proposed transferee agrees in writing to perform such maintenance, remodeling and re-equipping of the Restaurant that we determine necessary to bring the Restaurant in compliance with our then-current standards; + + 5. Prior to the date of the proposed Transfer, the proposed transferee's management team successfully completes such training and instruction as we deem necessary; + + 6. We are satisfied that the proposed transferee (and if the proposed transferee is an entity, all holders of any interest in such entity) meets all of the requirements for our new franchisees applicable on the date we receive notice of the proposed transfer and including, but not limited to, good reputation and character, business experience, restaurant management experience, and financial strength and liquidity; + + 7. You and all holders of an interest in you execute a general release, in the form prescribed by us, releasing, to the fullest extent permitted by law, all claims that you or any of your investors may have against us and our affiliates, including our and their respective shareholders, officers, directors and employees, in both their individual and corporate capacities; + + 8. You pay us a transfer fee equal to one-half (1/2) of the then-current Initial Franchise Fee; and + + 9. We waive our right of first refusal under Paragraph XX. + + C. Application for our consent to a transfer and tender of the right of first refusal provided for in Paragraph XX, will be accompanied by the documents (including a copy of the proposed purchase or other transfer agreement) or other information required by us. Any agreement used in connection with a transfer including a lease or management agreement, shall be subject to our prior written approval. + + D. In the event you are a corporation, partnership, limited liability company or other entity, any transfer of stock (or other form of ownership interest) constituting a controlling interest in you will be subject to the consent, right of first refusal, transfer fee and all other applicable provisions of this Agreement. For purposes of this Paragraph XVIII, any change in the percentage you owned, directly or indirectly, by any person or entity who directly or indirectly owns an interest in you (including any addition or deletion of any such person or entity) which results in a change in forty-nine percent (49%) or more of your ownership or any series of changes in the percentage you owned, directly or indirectly, by any such person or entity (including any addition or deletion of any such person or entity) which results within a period of three (3) years in any change in forty-nine percent (49%) or more of your ownership shall be deemed a transfer of a controlling interest in you. Any individual transfer of an interest less than a controlling interest in you or the Franchised Restaurant must have our prior written consent, which will not be unreasonably withheld, but will not be subject to our right of first refusal or the payment of the transfer fee. You will however, reimburse us for its out-of-pocket expenses incurred in approving the transfers including our attorneys' fees. Any person who acquires any interest in you, this Agreement or the Franchised Restaurant must execute the Owner Agreement attached as EXHIBIT A to this Agreement. + + E. You will not, without our prior written consent, place in, on or upon the location of the Franchised Restaurant, or in any communication media, any form of advertising, or list with any business, real estate broker, agent, or attorney any information relating to the sale of the Franchised Restaurant or the rights granted hereunder. + + 25 + +XIX. YOUR DEATH OR INCAPACITY + + A. In the event of your death or incapacity, or the death or incapacity of any partner, any shareholder owning fifty percent (50%) or more of your capital stock, or any Member who owns a majority interest in a limited liability company, the heirs, beneficiaries, devisees, or legal representatives of said individual, partner or shareholders shall, within one hundred eighty (180) days of such event: + + 1. Apply to us for the right to continue to operate the franchise for the duration of the term of this Agreement and any renewals hereof, which right shall be granted upon the fulfillment of all of the conditions set forth in Paragraph XVIII. of this Agreement (except that no transfer fee shall be required); or + + 2. Sell, assign, transfer, or convey your interest in compliance with the provisions of Paragraphs XVIII and XX of this Agreement; provided, + + + + + +however, in the event a proper and timely application for the right to continue to operate has been made and rejected, the one hundred eighty (180) days to sell, assign, transfer or convey shall be computed from the date of said rejection. For purposes of this Paragraph, our silence on an application made pursuant to Paragraph XIX.A.1. through the one hundred and eighty (180) days following the event of death or incapacity shall be deemed a rejection made on the last day of such period. + + B. In the event of the death or incapacity of an individual franchisee, or any partner or shareholder of you which is a partnership or corporation, where the aforesaid provisions of Paragraph XVIII have not been fulfilled within the time provided, all rights licensed to you under this Agreement shall, at our option, terminate forthwith and we will have the option to purchase the assets of the Franchised Restaurant in accordance with Paragraph XVII.K. herein. + +XX. RIGHT OF FIRST REFUSAL + + If you or your owners propose to sell the Franchised Restaurant (or its assets) or a controlling interest in the ownership of you as defined in Paragraph XVIII, you or your owners will obtain and deliver a bona fide, executed written offer to purchase same to us, which shall, for a period of thirty (30) days from the date of delivery of such offer to us, have the right, exercisable by written notice to you or your owners, to purchase the Franchised Restaurant, (its assets) or an ownership interest in you for the price and on the terms and conditions contained in such offer, provided that we may substitute cash for any form of payment proposed in such offer. If we do not exercise this right of first refusal, you may accept the offer, subject to our prior written approval, as provided in Paragraph XVIII hereof, provided that if such offer is not so accepted within six (6) months of the date thereof, we will again have the right of first refusal herein described. + +XXI. OPERATION IN THE EVENT OF ABSENCE, DISABILITY OR DEATH + + In order to prevent any interruption of the Franchised Restaurant which would cause harm to the Franchised Restaurant and thereby depreciate the value thereof, you authorize us, in the event that you are absent or incapacitated by reason of illness or death and are not, therefore, in our sole judgment, able to operate the Franchised Restaurant, to operate the Franchised Restaurant for so long as we deem necessary and practical, and without waiver of any other rights or remedies we may have under this Agreement. Provided, however, that we shall not be obligated to so operate the Franchised Restaurant. All monies from the operation of the business during such period of operation by us shall be kept in a separate account and the expenses of the Franchised Restaurant, including reasonable compensation and expenses for our representative, shall be charged to said account. If, as herein provided, we temporarily operate for you the Franchised Restaurant, you will indemnify and hold us harmless and any representative of ours who may act hereunder, from any and all claims arising from + + 26 + +the operation of the Franchised Restaurant, including, without limitation, our acts and omissions and acts and omissions of our representatives. + +XXII. INDEPENDENT CONTRACTOR AND INDEMNIFICATION + + A. This Agreement does not make, appoint or constitute you as our agent, legal representative, joint venturer, partner, employee, or servant for any purpose whatsoever. You cannot represent to third parties that you are our agent and it is understood between the parties that you will be an independent contractor who is in no way authorized to make any contract, agreement, warranty or representation on our behalf, or to create any obligation, express or implied, on our behalf. As an independent entrepreneur, you are solely responsible for the control, management and day-to-day operation of the Franchised Restaurant, including but not limited to, such matters as determining the prices at which you will offer and sell approved products and services, hiring and discharging your employees and setting and paying wages and benefits of your employees and that we will have no power, responsibility or liability with respect to such pricing, hiring, discharging, setting and paying of wages or related matters. All standards of quality and performance, including those listed in Paragraph XII, are established to promote and protect the value of the Marks and the System and to insure optimum quality control as to products and services. You alone are responsible for the food production and preparation at the Franchised Restaurant. + + B. You will prominently display, by posting of a sign within public view, on or in the premises of the Franchised Restaurant, a statement that clearly indicates that the Franchised Restaurant is independently owned and operated by you as a franchisee and not as an agent. + + C. You agree to indemnify, defend and hold us and our affiliates harmless from and against any and all claims, losses, damages and liabilities, however caused, arising directly or indirectly from, as a result of, or in connection with, the use and operation of the Franchised Restaurant, as well as the costs, including attorneys' fees, of defending against them (hereinafter are "Franchise Claims"). Franchise Claims include, but are not limited to, those arising from any death, personal injury or property damage (whether caused wholly or in part through our active or passive negligence), latent, or other defects in the Franchised Restaurant, or your employment practices. In the event a Franchise Claim is made against us, we reserve the right in our sole discretion to select our own legal counsel to represent our interests and you will reimburse us for our attorneys' fees immediately upon our request as they are incurred. + + + + + +XXIII. MISCELLANEOUS + + A. Our failure to exercise any power reserved to us hereunder, or to insist upon strict compliance by you with any obligation or condition hereunder, and any custom or practice of the parties in variance with the terms hereof, shall not constitute a waiver of our right to demand exact compliance with the terms hereof. Our waiver of any default by you shall not be binding unless in writing and executed by us and shall not affect or impair our right with respect to any subsequent default of the same or of a different nature. + + B. Any and all notices required or permitted under this Agreement shall be in writing and shall be personally delivered, mailed by certified mail, return receipt requested, or sent overnight courier to the respective parties at the following addresses unless and until a different address has been designated by written notice to the other party: + +Notices to Us: bw-3 FRANCHISE SYSTEMS, INC. 1919 Interchange Tower 600 South Highway 169 Minneapolis, Minnesota 55426 + + 27 + +Copy to Mary Beth Brody, Esq. Fredrikson & Byron, P.A. 1100 International Centre 900 Second Avenue South Minneapolis, MN 55402 + +Notices to You: At the address specified on Page 1 of this Agreement. + +Copy to: ------------------------------- + + ------------------------------- + + ------------------------------- + +Any notice by certified mail shall be deemed to have been given at the date and time of mailing. If you fail to provide us with written notice of alleged breach of this Agreement or any other legal claims within one (1) year from the date that you have knowledge of or becomes aware of such breach or grounds for claim, then the alleged breach or claim shall be deemed waived. + + C. In the event either party brings an action to enforce the terms of this Agreement or to enjoin the violation of any of its terms and prevails, such party shall be entitled to recover all litigation costs including attorneys' fees. + + D. This Agreement and the Exhibits attached shall be construed together and constitute the entire, full and complete agreement between the parties concerning the subject matter hereof, and supersede all prior agreements. No other representation has induced you to execute this Agreement, and there are no representations, inducements, promises, or agreements, oral or otherwise, between the parties not embodied herein, which are of any force or effect with reference to this Agreement or otherwise. No amendment, change or variance from this Agreement shall be binding on either party unless executed in writing, signed by both parties. + + E. Each Paragraph, part, term and/or provision of this Agreement shall be considered severable, and if, for any reason, any Paragraph, part, term and/or provision herein is determined to be invalid and contrary to, or in conflict with any existing or future law or regulation, such shall not impair the operation of or affect the remaining portions, sections, parts, terms and/or provisions of this Agreement, and the latter will continue to be given full force and effect and bind the parties hereto; and said invalid sections, parts, terms and/or provisions shall be reformed to most nearly implement the intentions of the parties hereto or, if reformation is not possible, be deemed not part of this Agreement; provided, however, that if we determine that said finding of illegality adversely affects the basic consideration of this Agreement, we may, at our option, terminate this Agreement. Anything to the contrary herein notwithstanding, nothing in this Agreement is intended, nor shall be deemed, to confer upon any person or legal entity other than you and us and such of their respective successors and assigns as may be contemplated by this Agreement, any rights or remedies under or by reason of this Agreement. + +XXIV. APPLICABLE LAW + + A. THIS AGREEMENT TAKES EFFECT UPON ITS ACCEPTANCE AND EXECUTION BY US, AND SHALL BE INTERPRETED AND CONSTRUED UNDER THE LAWS OF THE STATE IN WHICH THE FRANCHISED RESTAURANT IS LOCATED, EXCEPT TO THE EXTENT GOVERNED BY THE UNITED STATES TRADEMARK ACT OF 1946 (LANHAM ACT, 15, U.S.C. SECTIONS 1051 ET SEQ). YOU AGREE THAT ANY DISPUTES BETWEEN YOU AND US, bw-3, INC. OR OUR OTHER AFFILIATES SHALL ALSO BE CONSTRUED UNDER THE LAWS OF THE STATE IN WHICH THE FRANCHISED RESTAURANT IS LOCATED. + + 28 + + B. ANY ACTION SOUGHT TO BE BROUGHT BY EITHER PARTY OR ANY ACTION BROUGHT BY YOU AGAINST OUR PARENT OR OTHER AFFILIATE, SHALL BE BROUGHT IN THE UNITED STATES DISTRICT COURT OR THE STATE DISTRICT COURT IN THE STATE IN WHICH + + + + + +OUR COMPANY HEADQUARTERS ARE LOCATED. AS OF THE DATE OF THIS AGREEMENT, THE LOCATION IS HENNEPIN COUNTY, MINNESOTA. THE PARTIES DO HEREBY WAIVE ALL QUESTIONS OF PERSONAL JURISDICTION OR VENUE FOR THE PURPOSES OF CARRYING OUT THIS PROVISION. + + C. NO RIGHT OR REMEDY CONFERRED UPON OR RESERVED TO US OR YOU BY THIS AGREEMENT IS INTENDED TO BE, NOR SHALL BE DEEMED, EXCLUSIVE OF ANY OTHER RIGHT OR REMEDY HEREIN OR BY LAW OR EQUITY PROVIDED OR PERMITTED, BUT EACH SHALL BE CUMULATIVE OF EVERY OTHER RIGHT OR REMEDY. + + D. NOTHING HEREIN CONTAINED SHALL BAR OUR RIGHT TO OBTAIN INJUNCTIVE RELIEF AGAINST THREATENED CONDUCT THAT WILL CAUSE US LOSS OR DAMAGES, UNDER THE USUAL EQUITY RULES, INCLUDING THE APPLICABLE RULES FOR OBTAINING RESTRAINING ORDERS AND PRELIMINARY INJUNCTIONS. + +XXV. DISPUTE RESOLUTION + + A. The parties have entered into this Agreement in good faith and in the belief that it is mutually advantageous to them. It is with that same spirit of cooperation that they pledge to attempt to resolve any dispute amicably without the necessity of litigation. Accordingly, they agree that except as set forth below, if any dispute arises between them relating to this Agreement that prior to the commencement of any legal action to interpret or enforce this Agreement, they will first use the procedures specified in this Section. + + B. The party seeking to initiate the procedure shall give written notice to the other party, describing in general terms the nature of the dispute, the claim for relief and identifying one or more individuals with authority to settle the dispute on such party's behalf. The party receiving such notice shall have ten (10) business days within which to designate by written notice one or more individuals with authority to settle the dispute on such party's behalf. + + C. The authorized individuals shall be entitled to make such investigation of the dispute as they deem appropriate, but agree to meet promptly, and in no event later than thirty (30) days from the date of the initial written notice, to discuss resolution of the dispute. The authorized individuals shall meet at such times and places and with such frequency as they may agree. If the dispute has not been resolved within thirty (30) days from the date of their initial meeting, the parties shall cease direct negotiations and shall submit the dispute to mediation in accordance with the following procedure. + + D. The authorized individuals shall have five (5) business days from the date they cease direct negotiations to submit to each other a written list of acceptable qualified mediators not affiliated with any of the parties. Within five (5) days from the date of receipt of such list, the authorized individuals shall rank the mediators in numerical order of preference and exchange such rankings. If one or more names are on both lists, the highest ranking person shall be designated as the mediator. If no mediator has been selected under this procedure, the parties agree jointly to request the local administrative judge of the County in which our corporate headquarters are situated to supply within ten (10) business days a list of potential qualified mediators. Within five (5) business days of receipt of the list, the parties shall again rank the proposed mediators in numerical order of preference and shall simultaneously exchange such lists and shall select as the mediator the individual + + 29 + +receiving the highest combined ranking. If such mediator is not available to serve, they shall proceed to contact the mediator who was next highest in ranking until they are able to select a mediator. + + E. In consultation with the mediator selected, the parties shall promptly designate a mutually convenient time and place for the mediation, and unless circumstances require otherwise, such time is to be not later than forty-five (45) days after selection of the mediator. In the event any party to this Agreement has substantial need for information in the possession of another party to this Agreement in order to prepare for the mediation, all parties shall attempt in good faith to agree on procedures for the expeditious exchange of such information, with the help of the mediator if required. At least seven (7) days prior to the first scheduled session of the mediation, each party shall deliver to the mediator and to the other party a concise written summary of its views on the matter in dispute, and such other matters required by the mediator. The mediator may also request that a confidential issue paper be submitted to him by each party. + + F. In the mediation, each party shall be represented by an authorized individual and may be represented by counsel. In addition, each party may, with permission of the mediator, bring such additional persons as are needed to respond to questions, contribute information and participate in the negotiations. + + G. The mediator shall determine the format for the meetings, designed to assure that both the mediator and the authorized individuals have an opportunity to hear an oral presentation of each party's views on the matter in dispute, and that the authorized parties attempt to negotiate a resolution of the matter in dispute, with or without the assistance of counsel or others, but with the assistance of the mediator. To this end, the mediator is authorized to conduct both joint meetings and separate private caucuses with the parties. The mediation session shall be private. The mediator will keep confidential all information learned in private caucus with any party unless specifically + + + + + +authorized by such party to make disclosure of the information to the other party. The parties agree to sign a document agreeing that the mediator shall be governed by the provisions of the local Rules of Civil Procedure and such other rules as the mediator shall prescribe. The parties commit to participate in the proceedings in good faith with the intention of resolving the dispute, if at all possible. + + H. The parties agree to participate in the mediation procedure to its conclusion. The mediation shall be terminated (i) by the execution of a settlement agreement by the parties, (ii) by a declaration of the mediator that the mediation is terminated, or (iii) by a written declaration of a party to the effect that the mediation process is terminated at the conclusion of one full day's mediation session. Even if the mediation is terminated without a resolution of the dispute, the parties agree not to terminate negotiations and not to commence any legal action or seek other remedies prior to the expiration of five (5) days following the mediation. The fees and expenses of the mediator shall be shared equally by the parties. The mediator shall be disqualified as a witness, consultant, expert or counsel for any party with respect to the dispute and any related matters. + + I. Mediation is a compromise negotiation for purposes of the Federal and State Rules of Evidence and constitutes privileged communication. The entire mediation process is confidential, and no stenographic, visual or audio record shall be made. All conduct, statements, promises, offers, views and opinions, whether oral or written, made in the course of the mediation by any party, by their agents, employees, representatives or other invitees and by the mediator are confidential and shall, in addition and where appropriate, be deemed to be privileged. Such conduct, statements, promises, offers, views and opinions shall not be discoverable or admissible for any purposes, including impeachment, in any litigation or other proceeding involving the parties, and shall not be disclosed to anyone not an agent, employee, expert, witness, or representative of any of the parties; provided however, that evidence otherwise discoverable or admissible is not excluded from discovery or admission as a result of its use in the mediation. + + 30 + + J. Nothing herein contained shall bar our right to seek and obtain temporary injunctive relief from a court of competent jurisdiction in accordance with applicable law against any conduct or threatened conduct by you which could impair the goodwill associated with the Marks. + + K. The parties (and their respective owners) agree to waive, to the fullest extent permitted by law, the right to or claim for any punitive or exemplary damages against the other and agree that in the event of a dispute between them, each will be limited to the recovery of actual damages sustained. + +XXVI. OWNER AGREEMENT + + The franchisee ("you") includes all persons who succeed to the interest of the original franchisee by permitted transfer or operation of law and shall be deemed to include not only the individual or entity described in the introductory paragraph of this Agreement but shall also include all partners if you are a partnership, all shareholders if you are a corporation and all members if you are a limited liability company. By their signatures hereto, all of your officers, partners, members and managers acknowledge and accept the duties and obligations imposed upon each of them, individually, by the terms of this Agreement. All partners, all shareholders, or all members, as the case may be, and your restaurant manager must execute the Owner Agreement attached as EXHIBIT A and made a part hereof. + +XXVII. ACKNOWLEDGEMENTS + + A. You acknowledge that the success of the business venture contemplated to be undertaken by you by virtue of this Agreement is speculative and depends, to a large extent, upon your ability as an independent businessperson, and your participation in the daily affairs of the business as well as other factors. We do not make any representation or warranty, express or implied, as to the potential success of the business venture contemplated hereby. + + B. You acknowledge that other of our franchisees have been or will be granted franchises at different times and in different situations, and further acknowledges that the provisions of such franchises may vary substantially from those contained in this Agreement. + + C. You represent and acknowledge that you have received, read and understood this Agreement and our Uniform Franchise Offering Circular, and that we have fully and adequately explained the provisions of each to your satisfaction, and that we have accorded you ample time and opportunity to consult with advisors of your own choosing about the potential benefits and risks of entering into this Agreement. + + D. You and each agent signing on your behalf acknowledge that the officers, partners, members and/or managers who are signing this Agreement on your behalf are authorized to execute the Agreement and bind you to its terms. + + 31 + + E. It is contemplated that the parties may execute this Agreement on different dates. The date of execution and the commencement of the term of this Agreement shall take place on the date this Agreement is executed by us. + + + + + + IN WITNESS WHEREOF, the parties hereto, intending to be legally bound hereby, have duly executed and delivered this Agreement in duplicate the day and year first above written. + + FRANCHISOR: + +ATTEST: BW-3 FRANCHISE SYSTEMS, INC. + + By - ------------------------------ ------------------------------------------ Witness Its ---------------------------------------- + + FRANCHISEE: + +ATTEST: -------------------------------------------- + + By - ------------------------------ ------------------------------------------ Witness Its ---------------------------------------- + +ATTEST: + + By - ------------------------------ ------------------------------------------ Witness Its ---------------------------------------- + + 32 + + EXHIBIT A + + BUFFALO WILD WINGS OWNER AGREEMENT + + As a condition to the granting by bw-3 Franchise Systems, Inc. ("we" or "us") of an Area Development Agreement and/or one or more Franchise Agreements executed (collectively the "Agreements") providing certain rights relating to Buffalo Wild Wings Restaurants (the "Restaurants") to ________________________ ________________ ("Franchisee"), each of the undersigned individuals ("you"), who constitute each beneficial holder of an interest in the Franchisee, covenants and agrees to be bound by the terms and restrictions of this Agreement ("Agreement"): + + 1. ACKNOWLEDGMENTS. Each of you, jointly and severally, represents and warrants to us: + + A. That you are the holders of all equity, voting and other interests in Franchisee and/or all options, warrants and rights to acquire an interest in Franchisee and that the address and telephone number set forth next to your name below are accurate and complete and you will immediately advise us of any change in the information and we may use or distribute the same as required by law, including in our Uniform Franchise Offering Circular; + + B. That Franchisee is a corporation, limited liability company or partnership, duly organized, validly existing and in good standing under the laws of the State of ____________________, and that Franchisee is qualified to do business in the state where the Restaurant(s) are to be located; + + C. It is a condition to the granting of the franchise to Franchisee that you enter into this Agreement and we have entered into the Agreements in reliance upon your agreement to do so, and will continue to do so; + + D. That, as Franchisee's owners, you have received adequate consideration to support your execution of this Agreement. + + 2. CONFIDENTIALITY AND NON-COMPETITION AGREEMENTS. + + A. IN TERM COVENANT NOT-TO-COMPETE. Each of you agrees that during the period Franchisee operates any Buffalo Wild Wings and/or bw-3 Restaurants, or has any beneficial interest therein, or holds any rights to develop one or more such Restaurants (including all renewal periods) you shall not directly or indirectly on your own account or as an employee, consultant, partner, officer, director, shareholder or member of any person, firm, entity, partnership, corporation or company, own, operate, lease franchise, engage in, be connected with, have any interest in, or assist any person or entity engaged in: 1) any restaurant business, 2) any prepared food business, or 3) any other business which sells prepared food products the same or similar as the type sold in our System. + + B. POST TERM COVENANT NOT-TO-COMPETE. Each of you agrees that + + + + + +for a two-year period after Franchisee ceases to have any interest in any Restaurants or any rights to develop Restaurants, regardless of the reasons such interest ceases or terminates, you will not directly or indirectly on your own account or as an employee, consultant, partner, officer, director, shareholder or member of any person, firm, entity, partnership, corporation or company, own operate, lease franchise, engage in, be connected with, have any interest in, or assist any person or entity engaged in: 1) any restaurant business, 2) any prepared food business, or 3) any other business which sells prepared food products the same or similar as the type sold in our System; which is located at or within a ten (10) mile radius of your former Franchised Restaurant or any Buffalo Wild Wings or bw-3 Restaurant. + + 33 + + C. APPROPRIATION AND DISCLOSURE OF INFORMATION. Except as permitted under the Agreements, you will not at any time use, copy or duplicate the System or any aspect thereof, or any of our trade secrets, recipes, methods of operation, processes, formulas, advertising, marketing, designs, plans, software, programs, know-how or other proprietary ideas or information, nor will you convey, divulge, make available or communicate such information to any third party or assist others in using, copying or duplicating any of the foregoing. + + D. INFRINGEMENT; VALIDITY OF MARKS AND COPYRIGHTS; REGISTRATIONS. You will not at any time commit any act that would infringe upon or impair the value of the System or the Marks, nor will you engage in any business or market any product or service under a name, mark, or design that is confusingly or deceptively similar to any of the Marks. You agree that you will not, at any time directly or indirectly challenge or contest the validity of, or take any action to jeopardize our rights in or ownership of, any of the Marks or any registration of a Mark or any copyrighted work. If you violate this provision, we shall be entitled to all equitable, monetary, punitive and any other relief that may be available under applicable law, as well as the recovery of all costs, expenses and attorneys' fees incurred by us as a result of such violation. + + E. SOLICITATION OF EMPLOYEES. You agree that from and after the date hereof, you will not solicit, entice, induce to leave employment or hire directly or indirectly, any person who has been employed by us or by our affiliates or franchisees within the previous twelve (12) month period. + + F. TRADE SECRETS AND CONFIDENTIAL INFORMATION. You understand and agree that we have disclosed or may disclose to you certain confidential or proprietary information and trade secrets. Except as necessary in connection with the operation of the Restaurant and as approved by us, you shall not, at any time (during or after term), regardless of the cause of termination, directly or indirectly, use for your own benefit or communicate or divulge to, or use for the benefit of any other person or entity, any trade secrets, confidential information, knowledge or know-how concerning the recipes, food products, advertising, marketing, designs, plans, software, programs or methods of operation of the Restaurant or the System. You shall disclose to your employees only such confidential, proprietary or trade secret information as is necessary to operate your business hereunder and then only while this Agreement is in effect. Any and all information, knowledge, or know-how, including without limitation, drawings, materials, equipment, marketing, recipes and other data, that we designate under the Agreements as secret or confidential shall be deemed secret and confidential for purposes of this Agreement. + + G. REASONABLENESS OF SCOPE AND DURATION. You agree that the covenants and agreements contained in Section 2 are, taken as a whole, reasonable with respect to the activities covered and their geographic scope and duration, and no party shall raise any issue of the reasonableness of the areas, activities or duration of any such covenants in any proceeding to enforce any such covenants. Each of you acknowledge and agree that you have other skills and resources and that the restrictions contained in this Section will not hinder your activities or ability to make a living either under the Agreement or in general. + + H. ENFORCEABILITY. Each of you agree that we may not be adequately compensated by damages for a breach of any of the covenants and agreements contained herein, and that we shall, in addition to all other remedies, be entitled to injunctive relief and specific performance. The covenants and agreements contained in this Section 2 shall be construed as separate covenants and agreements, and if any court shall finally determine that the restraints provided for in any such covenants and agreements are too broad as to the area, activity or time covered, said area, activity or time covered may be reduced to whatever extent the court deems reasonable, and such covenants and agreements shall be enforced as to such reduced area, activity or time. To the extent required by the laws of the state in which the Restaurant is located, the duration or the geographic areas included within the foregoing covenants, or both, shall be deemed amended in accordance with Section 2. + + 34 + + 3. GUARANTY. + + A. GUARANTY. Each of you personally and unconditionally guaranty to us and to our parent and other affiliates, as well as any of their successors or assigns, the punctual payment when due of all sums, indebtedness and liabilities of every kind and nature that Franchisee may now or in the future owe to any of us (including interest, and all attorneys' fees, costs and expenses incurred by any of us in collection). + + + + + + B. COVENANTS AND ACKNOWLEDGMENTS. Each of you covenant and agree that: (1) liability under this guaranty shall be joint and several; (2) that this is a guaranty of payment and not of collection and you shall render any payment required under the Agreements or this guaranty upon demand; (3) this guaranty shall extend to all amounts you may now or in the future owe to any of us, whether pursuant to the Agreements, another agreement with us or otherwise; (4) your liability under this guaranty shall not be contingent or conditioned upon pursuit by us of any remedies against Franchisee or any of you; (5) your liability hereunder shall not be diminished, relieved, or otherwise affected by any extension of time, credit, or other indulgence or waiver that we may from time to time grant to Franchisee or to any of you, including, without limitation, the acceptance of partial payment or performance, the compromise or release of any claims, the release of any other guarantor, or our consent to any transfer or assignment of the franchise or any interest therein and expressly reserve all rights that we may have against you. + + C. TERM OF GUARANTY. This guaranty and your obligations under it shall continue in effect so long as you operate any Buffalo Wild Wing Restaurant or hold any beneficial interest therein and for a one (1) year period thereafter. Further, this guaranty shall be extended during any period in which (1) any of us is involved in any judicial or administrative process with Franchisee or any of you (i) to collect any amounts owed us by you, or (ii) to enforce the terms of this guaranty, or (2) any bankruptcy or similar proceeding involving Franchisee or any of you. Your obligations under this guaranty shall remain in full force and effect without regard to, and shall not be released, discharged or in any way modified or affected by, any circumstance or condition of Franchisee (whether or not you shall have any knowledge or notice thereof), including, without limitation, bankruptcy, insolvency, reorganization, composition, liquidation or similar proceeding or any action taken by any trustee or receiver or by any court in any such proceeding. + + D. WAIVERS. Each of you waives notice of demand, notice of protest, nonpayment or default, and all other notices to which Franchisee or you may be entitled, and all suretyship and guarantor's defenses generally and any and all other notices and legal or equitable defenses to which you may be entitled. You waive all exemptions to which you may now or hereafter be entitled under the laws of this or any other state or of the United States. You waive any right that you may have to require that an action be brought against Franchisee or any other payments and claims for reimbursement or subrogation that you may have against Franchisee arising as a result of your execution and performance of this guaranty. + + E. ASSIGNMENT. This guaranty is personal to you and the obligations and duties imposed in it may not be delegated or assigned; provided, this guaranty shall be binding upon your successors, assigns, estates and personal representatives. This guaranty shall inure to our benefit, and the benefit of our affiliates, successors and assigns. + + F. ENFORCEMENT. If any one or more provisions in this guaranty shall for any reason be held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision hereof and this guaranty shall be construed to bind you to the maximum extent permitted by law that is subsumed within the terms of such provision as though it were separately articulated herein. + + 35 + + 4. COVENANT NOT TO TRANSFER INTERESTS. The Agreements, and your rights and obligations under them, are and shall remain personal to you. Any proposed transfer by you (regardless of the form of transfer) shall be subject to the same terms and conditions contained in the Franchise Agreement. As used herein, the term "Transfer" shall mean any sale, assignment, gift, pledge, mortgage or any other encumbrance, transfer by bankruptcy, transfer by judicial order, merger, consolidation, share exchange, transfer by operation of law or otherwise, whether direct or indirect, voluntary or involuntary, of the Agreements or any interest in any of them or any rights or obligations arising under them, or of any material portion of the business assets, or of any interest in the Franchisee. Each of you agree and covenant that you will not at any time during which Franchisee is a Buffalo Wild Wings/bw-3 franchisee and/or developer, directly or indirectly, voluntarily or involuntarily, make any Transfer, unless you first obtain our written approval in compliance with the same provisions applicable to a transfer by you as set forth in the Agreements. You shall cause all stock certificates (or other documents evidencing an interest or right to acquire an interest) issued by Franchisee to bear a legend indicating that such stock (or other documents) is subject to the restrictions provided for in the applicable Agreement. + + 5. MISCELLANEOUS. + + A. CAPITALIZED TERMS. For purposes of this Agreement, all capitalized terms shall have the same meaning as those terms are defined in the Franchise Agreement. + + B. DISPUTES. Disputes under this Agreement shall be resolved in the same manner as provided under the Franchise Agreement. You expressly acknowledge that the provisions of the Franchise Agreement pertaining to mediation, venue, applicable law, time periods and limitations govern any disputes between us and you. + + IN WITNESS WHEREOF, each of you have signed this Agreement on the date set forth opposite your signature. + +Signature: Date: -------------------------- ------------------- + + + + + +Name: ------------------------------- Address: ---------------------------- + +- ------------------------------------ + +- ------------------------------------ Percentage Interest: ---------- + +Signature: Date: -------------------------- ------------------- Name: ------------------------------- Address: ---------------------------- + +- ------------------------------------ + +- ------------------------------------ Percentage Interest: ---------- + +Signature: Date: -------------------------- ------------------- Name: ------------------------------- Address: ---------------------------- + +- ------------------------------------ + +- ------------------------------------ Percentage Interest: ---------- Signature: Date: -------------------------- ------------------- + + 36 + +Name: ------------------------------- Address: ---------------------------- + +- ------------------------------------ + +- ------------------------------------ Percentage Interest: ---------- + +Signature: Date: -------------------------- ------------------- Name: ------------------------------- Address: ---------------------------- + +- ------------------------------------ + +- ------------------------------------ Percentage Interest: ---------- + +TO BE COMPLETED IF MANAGER IS NOT AN OWNER. + +I represent and acknowledge that I am the Manager of a Restaurant and that I agree to be bound by the provisions of Section 2 of this Agreement. + +MANAGER + +Signature: Date: -------------------------- ------------------- Name: ------------------------------- Address: ---------------------------- + +- ------------------------------------ + +- ------------------------------------ + + 37 + + EXHIBIT B + + + + + + DESCRIPTION OF DESIGNATED AREA + +FRANCHISOR: FRANCHISEE: + +BW-3 FRANCHISE SYSTEMS, INC. ------------------------------------ + +By By ---------------------------------- ---------------------------------- + + Its Its ----------------------------- ------------------------------ + + By ---------------------------------- + + Its ------------------------------ + + 38 + + EXHIBIT C ADDENDUM TO LEASE + + THIS ADDENDUM TO LEASE, dated ______________, 199__, is entered into by and between _______________________("Lessor"), and __________________________ ("Lessee"). + + RECITALS: + + A. The parties hereto have entered into a certain Lease Agreement, dated _____________, 199__, and pertaining to the premises located at _________ __________________________________ (the "Lease"). + + B. Lessor acknowledges that Lessee intends to operate a Restaurant from the leased premises (the "Premises") pursuant to a Franchise Agreement (the "Franchise Agreement") with bw-3 Franchise Systems, Inc. ("bw-3") under the name "Buffalo Wild Wings" or other name designated by bw-3 ("Franchised Restaurant"). + + C. The parties now desire to amend the Lease in accordance with the terms and conditions contained herein. + + AGREEMENT: + + NOW, THEREFORE, it is hereby mutually covenanted and agreed between Lessor and Lessee as follows: + + 1. REMODELING AND DECOR. Lessor agrees that Lessee shall have the right to remodel, equip, paint and decorate the interior of the Premises and to display such proprietary marks and signs on the interior and exterior of the Premises as Lessee is reasonably required to do pursuant to the Franchise Agreement and any successor Franchise Agreement under which Lessee may operate a Franchised Restaurant on the Premises. + + 2. ASSIGNMENT. Lessee shall have the right to assign all of its right, title and interest in the Lease to bw-3 or any affiliate of bw-3 at any time during the term of the Lease, including any extensions or renewals thereof, without first obtaining Lessor's consent. However, no assignment shall be effective until such time as bw-3 or its designated affiliate gives Lessor written notice of its acceptance of such assignment, and nothing contained herein or in any other document shall constitute bw-3 or its designated affiliate a party to the Lease, or guarantor thereof, and shall not create any liability or obligation of bw-3 or any affiliate of bw-3 unless and until the Lease is assigned to, and accepted in writing by, bw-3 or its designated affiliate. In the event of an assignment, Lessee shall remain liable under the terms of the Lease. + + 3. DEFAULT AND NOTICE. + + (a) In the event there is a default or violation by Lessee under the terms of the Lease, Lessor shall give Lessee and bw-3 written notice of such default or violation within a reasonable time after Lessor receives knowledge of its occurrence. bw-3 will notify Lessor whether it intends to cure the default and take an automatic assignment of Lessee's interest as provided in Paragraph 4(a). bw-3 will have an additional fifteen (15) days in which to cure the default or violation. + + (b) All notices to bw-3 shall be sent by registered or certified mail, postage prepaid, to the following address: + + bw-3 Franchise Systems, Inc. 1919 Interchange Tower 600 South Highway 169 Minneapolis, MN 55426 + + + + + + 39 + + Attention: Chief Financial Officer bw-3 may change its address for receiving notices by giving Lessor written notice of such new address. Lessor agrees that it will notify both Lessee and bw-3 of any change in Lessor's mailing address to which notices should be sent. + + 4. TERMINATION OR EXPIRATION. + + (a) Upon the expiration or termination of either the Lease or the Franchise Agreement, bw-3 will, at its option, have the right (but not the requirement) to take an automatic assignment of Lessee's interest. + + (b) Upon the expiration or termination of either the Lease or the Franchise Agreement, Landlord will cooperate with and assist us in gaining possession of premises and if bw-3 does not elect to take an assignment of the Lessee's interest, Lessor will allow bw-3 to enter the Premises, without being guilty of trespass and without incurring any liability to Lessor, to remove all signs, awnings, and all other items identifying the Premises as a Franchised Restaurant and to make such other modifications (such as repainting) as are reasonably necessary to protect the bw-3 marks and system, and to distinguish the Premises from Franchised Restaurants. In the event bw-3 exercises its option to purchase assets of Lessee, Lessor shall permit bw-3 to remove all such assets being purchased by bw-3. + + 5. CONSIDERATION; NO LIABILITY. + + (a) Lessor hereby acknowledges that the provisions of this Addendum to Lease are required pursuant to the Franchise Agreement under which Lessee plans to operate its business and the Lessee would not lease the Premises without this Addendum. + + (b) Lessor further acknowledges that Lessee is not an agent or employee of bw-3 and the Lessee has no authority or power to act for, or to create any liability on behalf of, or to in any way bind bw-3 or any affiliate of bw-3, and that Lessor has entered into this Addendum to Lease with full understanding that it creates no duties, obligations or liabilities of or against bw-3 or any affiliate of bw-3. + + 6. SALES REPORTS. If requested by bw-3, Lessor will provide bw-3 with whatever information Lessor has regarding Lessee's sales from the Restaurant. + + 7. AMENDMENTS. No amendment or variation of the terms of this Addendum to the Lease shall be valid unless made in writing and signed by the parties hereto. + + 8. REAFFIRMATION OF LEASE. Except as amended or modified herein, all of the terms, conditions and covenants of the Lease shall remain in full force and effect and are incorporated herein by reference and made a part hereof as though copied herein in full. + + 9. BENEFICIARY. Lessor and Lessee expressly agree that bw-3 is a third party beneficiary of this Addendum. + + 40 + + IN TESTIMONY WHEREOF, witness the signatures of the parties hereto as of the day, month and year first written above. + + ------------------------------------------ + + By: ----------------------------------- Title: ----------------------------------- ("Lessor") + + ------------------------------------------ + + By: ----------------------------------- Title: ----------------------------------- ("Lessee") + + 41 \ No newline at end of file diff --git a/full_contract_txt/BellringBrandsInc_20190920_S-1_EX-10.12_11817081_EX-10.12_Manufacturing Agreement1.txt b/full_contract_txt/BellringBrandsInc_20190920_S-1_EX-10.12_11817081_EX-10.12_Manufacturing Agreement1.txt new file mode 100644 index 0000000000000000000000000000000000000000..6f5b617940b57fb430730ce743118a9262d7688c --- /dev/null +++ b/full_contract_txt/BellringBrandsInc_20190920_S-1_EX-10.12_11817081_EX-10.12_Manufacturing Agreement1.txt @@ -0,0 +1,299 @@ +Exhibit 10.12 + +CERTAIN IDENTIFIED INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY [***], HAS BEEN OMITTED BECAUSE IT IS BOTH (1) NOT MATERIAL AND (2) WOULD LIKELY CAUSE COMPETITIVE HARM TO THE COMPANY IF PUBLICLY DISCLOSED. + +STREMICK HERITAGE FOODS, LLC and PREMIER NUTRITION CORPORATION MANUFACTURING AGREEMENT + +THIS MANUFACTURING AGREEMENT (the "Agreement") is made this first day of July, 2017 (the "Effective Date") between Stremicks Heritage Foods, LLC ("Heritage"), a Delaware limited liability company with an address of 4002 Westminster Avenue, Santa Ana, CA 92703 and PREMIER NUTRITION CORPORATION ("Premier"), a Delaware corporation with a principal place of business at 5905 Christie Avenue, Emeryville, California 94608 (each a "Party", collectively, the "Parties"). + +WHEREAS, Heritage is engaged in the business of producing food products on a contract basis and desires to produce Products (as defined below) for Premier at its facilities in [***] as well as at its majority-owned subsidiary, Jasper Products, L.L.C. ("Jasper") in [***]; + +WHEREAS, Premier is the owner of certain proprietary formulations, manufacturing processes and techniques and wishes to have Product manufactured and packaged by Heritage in accordance with the terms and conditions set forth herein; + +NOW, THEREFORE, in consideration of the mutual covenants contained herein and intending to be legally bound, the Parties agree as follows: 1. BASIC TERMS + +(a) This Section contains the basic terms of this Agreement between Heritage and Premier. All other provisions of this Agreement are to be read in accordance with the provisions herein contained. (i) Commencement Date July 1, 2017 + +(ii) Termination Date December 31, 2022 + +(iii) Product Descriptions Schedule A (2(a)) + +(iv) Records Schedule B (2(i), 3(e)) + +(v) Ingredients/Materials/Packaging Purchased by Premier Schedule C (3(b)) + +(vi) Ingredient/Materials/Packaging Purchased by Heritage Schedule C (3(c)) + +(vii) Material loss allowance Schedule C + +(viii) Pricing and terms Schedule C, 3(d) + +(ix) Premier Contacts Schedule D + +(x) Post Holdings' Quality Expectations Manual Schedule E 1 + +Source: BELLRING BRANDS, INC., S-1, 9/20/2019 + + + + + +(b) The term of this Agreement will commence on the Commencement Date and will continue through December 31, 2022 or until this Agreement is otherwise terminated in accordance with its provisions ("Term"). 2. PRODUCTION OF PRODUCT + +(a) Heritage shall produce the products described on Schedule A attached hereto, as may be amended by the Parties hereafter from time to time (the "Products"), for Premier at [***] Heritage's or Heritage's wholly owned subsidiary, Jasper's, [***] (the "Facilities"). [***] For the purposes of this paragraph, [***] facilities located at [***] are considered one Facility. Any facility that Heritage wishes to use, other than [***] to manufacture the Products must be approved by Premier in writing, in advance. For the avoidance of doubt, Heritage's [***] facility must be approved by Premier before it may be used to manufacture the Products. Such facility approvals shall not be unreasonably withheld or delayed. Premier's facility approval will be based, in part, on the successful completion of a trial production run that is sufficient in meeting finished product specifications, and an evaluation of the stability and specifications of trial production product within [***] of the trial production run. + +(b) Heritage and Premier agree that all Products subject to this Agreement, and their current and subsequently modified respective formulas are confidential and proprietary, and the sole property of Premier unless otherwise agreed in writing by both Parties. + +(c) Minimum Annual Order Volume. During the Term of this Agreement, Premier shall be required to purchase a Minimum Annual Order Volume ("MAOV") of [***] ("Units") for each twelve-month period commencing July 1, 2017, and for the six-month period commencing July 1, 2022 and ending December 31, 2022, Premier will be required to purchase [***] Units (the twelve-month periods and the six month period are each a "Contract Period"). + +(d) During the Term, Premier shall have the right (but not the obligation) to order from Heritage quantities of Products in excess of [***] and provided Heritage has the capacity and the ability to produce such additional quantities of Products, Heritage agrees to produce such additional quantities per the pricing and terms on Schedule C. + +(e) [***] + +(f) [***] + +(g) Within [***] of each calendar month during the Term, Premier shall provide to Heritage a [***] rolling production forecast which shall set forth Premier's non-binding good faith estimated purchases (each, a "Forecast") for the [***] period commencing on the date thereof (the "Forecast Delivery Date"). Each Forecast shall also designate which Facility shall manufacture the Products set forth in such Forecast (i.e. Heritage's [***] Facility, Jasper's [***] Facility, or some other facility agreed to by the Parties). Heritage shall notify Premier, in writing (or email), within [***] of each Forecast Delivery Date, if Heritage's or Jasper's Facilities will not be able to fulfill Premier's estimated purchases as set out in the [***] of such Forecast. For the avoidance of doubt, the [***] are 2 + +Source: BELLRING BRANDS, INC., S-1, 9/20/2019 + + + + + +the [***] immediately following the Forecast Delivery Date. If Heritage notifies Premier that it can fulfill Premier's Forecast for this [***] period, or if it fails to notify Premier that it cannot fulfill that portion of the Forecast, Heritage shall be obligated to fulfill, or cause Jasper to fulfill as applicable, if ordered through POs, the full amount of Product set forth for purchase during [***] ("Firm Forecast"). + +(h) Within the [***] of each calendar month during the Term, Heritage shall provide to Premier a [***] rolling production forecast which shall set forth Heritage's good faith estimated maximum monthly unit volume ("Maximum Volume") for each Facility during such [***] period. Modifications to the Maximum Volume shall be negotiated in good faith and agreed upon by both Parties in writing or email by the [***] of the calendar month. + +(i) Premier shall provide Heritage with Purchase Orders (or "POs") [***] in advance of the date referred to as the "Due Date" in such POs. The POs, at a minimum, will give the Products and quantities ordered, the Due Date requested, and designate which Facility will manufacture the Products. "Due Date" shall mean the production start date requested by Premier. + +(j) Within [***] of receipt of a PO, Heritage shall (i) provide to Premier email confirmation of acceptance of the PO, a schedule of production and an estimated production completion date (the "Estimated Completion Date"), or (ii) notify Premier if any term of the PO cannot be met. Heritage's failure to notify Premier, within the time specified herein, of an inability to meet a term of the PO shall constitute acceptance of such PO in its entirety. If Heritage notifies Premier that it or Jasper cannot meet the Due Date, the Parties shall discuss an acceptable alternate date on which production will commence (the "Production Date"). Once a Due Date is accepted or a Production Date is mutually agreed upon, Heritage shall, or shall cause Jasper to, use all commercially reasonable efforts to start production on or before the Due Date (or Production Date, as applicable), but in no case more than [***] earlier or later than the Due Date (or Production Date, as applicable) unless mutually agreed otherwise by Premier. + +(k) If PREMIER requests that Products be produced at the Heritage Facility, Heritage may either produce such Products at the Heritage Facility or cause Jasper to produce such Products at the Jasper Facility, in which case Heritage shall be responsible for all shipping costs of transporting the Products to the Heritage Facility. If Premier requests that Products be produced at the Jasper Facility, Heritage may either cause Jasper to produce such Products at the Jasper Facility or produce such Products at the Heritage Facility, in which case Heritage shall be responsible for all shipping costs of transporting the Products to the Jasper Facility. + +(l) If a PO is accepted by Heritage as described in Section 2(j) above but such PO is not filled in accordance with its terms, or if Heritage or Jasper, as applicable, fails to complete production of the Products [***], Premier shall have the right to use an alternate co-packer for the Products specified in the PO and Heritage shall, or shall cause Jasper to, provide Premier with Premier owned packaging needed to support such production by an alternate co-packer. + +(m) Purchase Orders will be Premier's best estimate of its current requirements, but may be amended up or down or canceled in their entirety by Premier to reflect changing demand for Products. The final Unit quantities on Premier's Purchase Orders will count towards the MAOV. However, if (i) any increase or decrease in Unit volume under a particular PO is greater than [***] of the initial PO quantity and (ii) Premier requests such change or cancellation within the [***] period prior to the Due Date (or Production Date, as applicable) (the "[***] Period"), Heritage in its sole discretion, may charge Premier [***]. In no event shall Premier pay [***] if (i) it cancels or modifies any PO prior to the commencement of the [***] Period (i.e.; prior to the commencement of the [***] period preceding the Due Date (or Production Date, as applicable), (ii) Heritage or Jasper fails to timely start production in the [***] period before or after the Due Date (or Production Date, as applicable), or (iii) the basis for Premier's cancellation is a breach by Heritage of its obligations, representations or warranties hereunder. 3 + +Source: BELLRING BRANDS, INC., S-1, 9/20/2019 + + + + + +(n) Heritage shall within [***] after the end of the production run, notify Premier via email of the final estimated production quantity and the estimated quantity, including losses, of all Premier-supplied materials used. If the final production quantity for any accepted PO is less than [***] of the PO quantity ordered, or if the quantity of production released for shipment within [***] from the last day of production is less than [***] of the PO quantity, upon request by Premier, Heritage shall take all commercially reasonable steps to produce or replace the shortfall within [***]. The final production quantity by Heritage and Jasper will count towards the MAOV requirements. + +(o) Heritage represents and warrants that: + +(i) All Products manufactured, packaged and delivered by Heritage or Jasper under the terms of this Agreement shall conform to the specifications supplied to Heritage by Premier as listed on Schedule A, which Schedule may from time to time be modified by Premier in writing (the "Specifications"), shall conform to Post Holdings' Quality Expectations Manual attached hereto as Schedule E, and shall conform in all material respects to samples previously supplied to Premier by Heritage. No change in Specifications shall be binding on Heritage until Premier has provided written Specifications for each SKU, and each Specification is signed and dated by the Parties. Any additional net cost increases or decreases associated with any modifications to Premier's Specifications shall be borne by or credited to Premier. + +(ii) Heritage and Jasper will comply with all laws and regulations applicable to production of the Products, including without limitation, the laws and regulations of the United States Food and Drug Administration ("FDA"), United States Public Health Service ("PHS"), and any and all other applicable federal, state and local laws and regulations. Heritage warrants that the Products shall be released free from defects in workmanship and shall be manufactured in accordance with this Agreement and 21 C.F.R. Part 110 which is entitled "Current Good Manufacturing Practice in Manufacturing, Packing or Holding Human Food" and as it may be amended from time-to-time. + +(iii) The Products, when delivered to Premier in accordance with this Agreement, shall be free of contaminants, merchantable, fit for intended use and shall not be adulterated within the meaning of the Federal Food, Drug and Cosmetic Act. + +(iv) Heritage and Jasper hold all permits and licenses required for Heritage and/or Jasper to manufacture the Products under the Agreement. Heritage will obtain, and shall ensure that Jasper obtains, all ingredients and packaging materials from suppliers that are approved by Premier in writing. + +(p) Upon reasonable notice, and during normal operating hours, Heritage shall permit Premier or its representatives reasonable access to portions of the Heritage Facilities, the Jasper Facility or any other Facility used to produce the Products for the purpose of ascertaining Heritage's and Jasper's compliance with good manufacturing practices and Premier's Specifications and Post Holdings' Quality Expectations. Heritage agrees to disclose to Premier and provide a list, upon request, of any material violations or deficiencies noted during any inspection by the FDA, United States Department of Agriculture, PHS, or any other federal, state or local health or food regulatory agency of the Heritage Facilities, Jasper Facility or any other Facility used to produce the Products, which have a material adverse effect on the manufacture or packaging of the Products. Heritage agrees to provide to Premier each FDA Form 483 and any related Establishment Inspection Report ("EIR") that is received from the FDA by Heritage or Jasper, along with any response provided to the regulatory authority by Heritage or Jasper, as long as this Agreement is in effect. Heritage agrees to do so within [***] of Heritage or Jasper receiving the Report or of sending the response as appropriate. If Heritage wishes to redact any material from any EIR, it shall indicate that deletion by use of the following note where each redaction occurs: "REDACTED MATERIAL". Heritage agrees that it will not redact any information on an EIR that directly relates to any aspect of its manufacturing of Products for Premier. 4 + +Source: BELLRING BRANDS, INC., S-1, 9/20/2019 + + + + + +(q) Heritage will keep, and will ensure that Jasper keeps [***] complete and accurate records in connection with each unique production lot of Products with respect to manufacturing practices, quality assurance measures, analytical procedures and their resultant data. Such records shall include at least those listed on attached Schedule B. Upon reasonable notice, Heritage shall allow, and Heritage shall ensure that Japer allows, Premier access to such records during normal working hours. 3. DELIVERY, PRICING, BILLING AND PAYMENT + +(a) Heritage and Jasper shall coordinate shipments to meet scheduled delivery dates of the Products with Premier designated transportation providers. All shipments of the Products shall be by common carrier, F.O.B. the Heritage [***] Facility or the Jasper Facility, as indicated by Premier in the Purchase Order. + +(b) Heritage shall purchase all ingredients and packaging materials identified in Schedule C to be used in connection with the manufacture of the Products. Heritage shall invoice Premier through the [***] billing as identified on Schedule C. + +(c) Heritage shall charge Premier [***] as set forth in Schedule C. + +(d) For Product produced at Jasper facilities, Jasper shall invoice Premier on the date Jasper issues a Certificate of Analysis (COA) for those Products. Payment terms for these Product invoices shall be [***]. For Product produced at Heritage facilities, Heritage shall invoice Premier on the date the Products are loaded onto Premier's carrier. Payment terms for all these Product invoices shall be [***]. Failure by Premier to meet payment terms of any invoice shall result in interest being imposed on any unpaid balance at the rate of [***] per month, pro rata on a daily basis for partial months, accrued from its due date or in the event such rate exceeds that permitted to be charged by law, the maximum rate permitted by law. + +(e) Heritage will maintain accurate and complete books of account and records covering all its operations and transactions relating to this Agreement, including detailed purchasing and accounting records, master manufacturing, batching, & quality control records, pertaining to the manufacture of the Products, including records relating to the procurement and cost of all raw materials, packaging materials, equipment, and any other cost associated with the manufacture of the Products until [***]. Premier, shall have the right, directly or through its representative, to inspect, copy, and audit all such records upon reasonable request and during normal business hours, acknowledging that access to accounting and purchasing records will be limited to those supporting pass-through materials costs and purchases of Premier specified equipment if any. 4. STORAGE, SHIPPING AND INVENTORY + +(a) During the term of this Agreement, Heritage agrees to handle and store reasonable amounts of raw materials based upon the level of production expected [***]. With regard to finished Products, Heritage agrees during the Term to store finished Products at no cost to Premier for a period not to exceed [***] from the date of Heritage's issuance of a Certificate of Analysis ("COA"). Commencing on [***] after the date the COA is delivered to Premier, a warehouse fee will be imposed that will equal $[***], until such Products are delivered to Premier's carrier. [***] Capability of a corrugated shipping case to withstand double stacking shall be mutually determined and agreed by both Parties. + +(b) Premier agrees to issue shipping instructions in full pallet increments of [***] and Heritage agrees to make the Products available for shipping within [***]. Heritage shall ship oldest Products first, unless otherwise directed in writing by Premier. Release of Products shall only be from inventory that has completed any required incubation period and Heritage quality control release protocols. 5 + +Source: BELLRING BRANDS, INC., S-1, 9/20/2019 + + + + + +(c) Heritage shall perform, and shall ensure Jasper performs, a documented inspection of all trailers before loading to confirm they are free of any visible contamination or odors and fit for use with food products. When products are properly palletized and loaded by Heritage or Jasper, Premier shall be responsible for physical, in-transit damage loss of finished Products upon Heritage or Jasper completing loading of the designated container or trailer, and sealing the same. + +(d) Heritage shall notify Premier via email within [***] that Products are available for shipment. + +(e) The following series of standard, regular, required reports and scorecard shall be provided by Heritage to Premier at the indicated frequency: + +1. Weekly Production Report. + +2. Monthly Inventory Reports at Supplier's end of fiscal month to include + +a. Inventory on hand, + +b. Inventory on hold, and + +c. Inventory adjusted. + +3. Monthly Purchase Order receipt report - at the end of Supplier's fiscal month 5. TRADEMARKS + +Premier represents and warrants that it owns or otherwise has the right to use all trademarks (the "Trademarks") and copyrighted material (the "Copyrights") provided by Premier to Heritage, which are provided solely for use in connection with the manufacture or packaging of the Products. Heritage will not, and will ensure that Jasper does not, use any of the Trademarks or any marks that are confusingly similar to, or likely to cause confusion with regard to, the Trademarks or Copyrights owned or licensed by Premier for any other purpose without the prior written consent of Premier in each instance. Provided, however, that the foregoing covenant shall not be construed to restrict or prohibit Heritage from using any trademark, trade name, trade dress, labeling or packaging that Heritage is using in commerce as of the date of this Agreement. Nothing contained in this Section 5 is intended to or does preclude Premier from enforcing any of its intellectual property rights, including without limitation, its trademark rights. 6. QUALITY CONTROL + +(a) Heritage agrees to perform, at its expense, sampling and testing procedures for the Products in accordance with Schedule B, attached hereto, and all applicable governmental regulations. If additional testing, not identified in Schedule B, is required by Premier, a reasonable additional fee will be agreed upon between Heritage and Premier to cover the associated incremental cost. Other quality control items to be performed under this Agreement are as follows: + +(i) Normal production runs shall require Premier to provide at least two (2) non-work hour phone numbers for Premier employees who can be contacted in the event a problem occurs during a production run not being conducted during normal business hours. Said contacts and contact information shall be listed in Schedule D. + +(ii) Heritage shall keep retention samples in accordance with Schedule B. + +(iii) Heritage shall not modify any processing instructions or Specifications without obtaining Premier's prior written consent. + +(iv) Heritage shall evaluate Products on a regular schedule at a sufficient frequency to confirm that Products meet the Specifications, including the Post Holdings Quality Expectations Manual. Any Products not conforming to the Specifications shall not be released for shipment. 6 + +Source: BELLRING BRANDS, INC., S-1, 9/20/2019 + + + + + +7. INDEMNITY + +(a) Premier shall indemnify, defend and hold Heritage harmless from and against any and all loss, cost, expense, claim, suit, damage or liability (including reasonable attorneys' fees and court costs) (collectively "Losses") arising out of or relating to an infringement or alleged infringement of any Trademarks or Copyrights in connection with the Products to the extent Heritage follows Premier's instructions with regard to the proper display and use of the Trademarks and Copyrights. In addition, Premier shall indemnify, defend and hold Heritage harmless from and against any and all Losses arising out of or relating to: (i) Heritage's adherence to the Product Specifications, identified in Schedule A, or written orders or instructions given by Premier to Heritage relating to the manufacture or packaging of Products; (ii) Premier's breach of any of its obligations contained herein; and (iii) the storage, sale, marketing, distribution and consumption of the Products, other than any Losses which would be covered under Section 7(b) hereof. + +(b) Heritage shall indemnify, defend and hold Premier harmless from and against any Losses arising out of or relating to (i) Heritage's or Jasper's negligence or willful misconduct, (ii) the manufacturing, packaging, storing and consumption of the Products (except to the extent resulting from Heritage's compliance with Premier's Specifications), (iii) any breach of the Agreement by Heritage or (iv) ingredients or packaging materials purchased by Heritage or Jasper. Heritage shall not be responsible for any Losses arising out of or attributable to Heritage's manufacturing of the Products in adherence with the Product Specifications, this Agreement, or any written orders or instruction(s) from Premier regarding the manufacture or packaging of the Products, as set forth in Section 7(a) above. + +(c) The Party seeking indemnification shall promptly notify the other Party hereto in writing of any suit, claim, or damage for which such Party has notice and to which these provisions may apply. In the event suit is commenced, the indemnifying Party shall have the right to control the defense of any such suit at its own cost. The appearance of the indemnifying Party in such proceeding shall not be construed as an admission of liability and shall not constitute a waiver of any of its rights, including, but not limited to, the indemnifying Party's right to hire its own counsel. 8. RISK OF LOSS AND INSURANCE + +(a) Title to the Products shall be in and remain with Premier from the date Products are delivered to a carrier pursuant to Premier's instructions for delivery to Premier. Heritage shall bear the risk of loss to the Products until the Products are delivered to such carrier for delivery to Premier as set forth herein. Risk of loss to the Products shall also be with Heritage during shipment between the Heritage Facilities pursuant to Section 2. + +(b) Heritage and Jasper shall maintain insurance of the following kinds and in the following amounts during the Term of this Agreement: i. Commercial General Liability Insurance with a limit of $[***] each occurrence and $[***] in the aggregate, including Contractual, Completed-Operations and Product-Liability Coverage with a limit of $[***] for each occurrence, covering both bodily injury and property damage liability. ii. Umbrella/Excess Liability with a limit of $[***]. 7 + +Source: BELLRING BRANDS, INC., S-1, 9/20/2019 + + + + + +iii. Workers' Compensation Coverage plus Occupational Disease Insurance if Occupational Disease coverage is required by the laws of the state where the Facility is located or work is to be performed. Employers Liability $[***] each accident; $[***] disease, each employee; $[***] disease, policy limit iv. Auto Liability $[***] combined single limit v. Product Recall Insurance coverage for Products determined to be in violation of laws administered by the authorized government entity who classifies the Products as unfit for intended use with limits of $[***] per policy year. + +Heritage and Jasper shall have Premier named as an additional insured on its insurance policies in subparts i, ii and iv above. Heritage and Jasper shall furnish Premier with a certificate from its insurer verifying that it has the above insurance in effect during the duration of this Agreement and that insurer acknowledges (a) the contractual liability assumed by Heritage and Jasper in this Agreement and (b) that Premier is an additional insured on such policies and (c) Heritage's and Jasper's CGL policies are primary and Premier's CGL policy is non-contributory and (d) a waiver of subrogation shall be provided in favor of Premier on the CGL, Workers' Compensation and Auto policies. Said certificate of insurance shall require Heritage's and Jasper's insurance carrier to give Premier [***] written notice of any cancellation or change in coverage. Failure to provide such certificate within [***] shall constitute a breach of this Agreement. + +Certificate of Insurance: + +Certificate holder language must read: + +Premier Nutrition Corporation 5905 Christie Avenue Emeryville, CA 94608 + +Please send certificates to: [***] 9. CONFIDENTIALITY + +Each Party recognizes that in the performance of this Agreement, it may acquire, directly or indirectly from the other Party, proprietary, confidential, trade secret, or information that is not otherwise available to the general public ("Confidential Information"). Each Party shall maintain control of all Confidential Information it receives and not disclose it or use it for any other purpose other than to perform its obligations under this Agreement. Each Party shall return the Confidential Information, along with all materials derived therefrom, to the disclosing Party upon demand or, destroy them and provide verification of destruction upon the termination of this Agreement at the request of the disclosing Party. Each Party acknowledges that the value of the other Party's Confidential Information is unique and substantial, and it may be impractical or difficult to assess its value in monetary terms. Accordingly, in the event of an actual or potential violation of this paragraph, the violating Party expressly consents to the enforcement of this Agreement by injunctive relief or specific performance in addition to any and all other remedies available to them. The Parties also agree to treat the terms and conditions of this Agreement as Confidential Information. + +The term Confidential Information shall not apply to portions of the Confidential Information that Party receiving it can show: (i) are or become generally available to the public other than as a result of a disclosure by the receiving Party; (ii) are in the receiving Party's possession from a source (other than the furnishing Party) that is not prohibited from disclosing such information, (iii) was known to the receiving Party prior to disclosure thereof by the furnishing Party; or (iv) are independently developed by the receiving Party without the use of any non-public, confidential or proprietary information received from the furnishing Party. A Party shall be entitled to disclose the 8 + +Source: BELLRING BRANDS, INC., S-1, 9/20/2019 + + + + + +other Party's Confidential Information as required pursuant to judicial action, governmental regulations or investigation, or other requirements. Such Party shall, to the extent allowed or permitted by the applicable judicial action, governmental regulation or investigation or other requirements, promptly notify the Party that furnished the Confidential Information prior to any such disclosure, and reasonably cooperate (at the request and expense of the furnishing Party) with the furnishing Party to contest or limit such disclosure. 10. FORCE MAJEURE + +In the event that either Party shall be totally or partially unable to fulfill one or more of its obligations hereunder as a result of acts or occurrences beyond the control of the Party affected, such as, but not limited to, actions, omissions or impositions by local, state or federal governmental authorities, fire, flood, earthquake or other natural disasters, acts of God, revolution, strikes or fuel shortages, the Party so affected shall be totally or partially relieved from fulfilling its obligations under this Agreement during the period of such force majeure; provided, however, that the affected Party shall notify the other Party of the circumstances as soon as reasonably possible; and further provided that if such period of force majeure shall continue for a period of [***] or more, the Party not affected shall be entitled to terminate this Agreement by giving notice to take effect immediately. The foregoing shall not relieve either Party of any obligation to make payments required pursuant to this Agreement in accordance with the terms hereof. Notwithstanding the foregoing, in the event there is a force majeure at either Heritage production facility, then the non-force majeure facility shall not be required to produce the total production quantities agreed upon for both facilities. However, the non-force majeure facility shall use commercially reasonable efforts to produce as much Product as possible for Premier during the force majeure period. Heritage shall not be responsible for any excess freight expense on Product incurred by Premier due to the force majeure. 11. TERMINATION + +(a) This Agreement shall commence on the Effective Date and shall terminate automatically without notice on December 31, 2022, unless the Parties agree in writing to extend the term of the Agreement (the initial term and any renewal terms are referred to collectively herein as the "Term"). Either Party may terminate this Agreement immediately without notice should the other Party fail to cure, within [***] after receipt of written notice thereof, any material breach of its obligations or duties hereunder, provided, however that in the event of a material breach that cannot be cured within [***], a Party shall not be deemed in default if it commences curing such default within the [***] period, notifies the other Party of that commencement by e-mail, and thereafter cures such default within [***] of the original written notice thereof. The following provisions shall survive termination or expiration of this Agreement: + +2(o) (warranties); + +2(p)(q), 3(e) audit rights/access; + +Schedule B (records); + +7 (Indemnification); and + +Section 8 (Risk of Loss and Insurance) + +Section 9 (Confidentiality). + +and Premier shall remain as an additional insured on the Heritage's policies, for [***]. If either Party shall file a voluntary petition in bankruptcy, be declared bankrupt, make an assignment for the benefit 9 + +Source: BELLRING BRANDS, INC., S-1, 9/20/2019 + + + + + +of the creditors, or suffer the appointment of a receiver or a trustee of its assets, that Party shall be in breach of this Agreement and the other Party shall have the right to terminate this Agreement by giving written notice to take effect immediately. + +(b) So long as Premier has satisfied its payment obligations to Heritage pursuant to Section 3, upon termination or expiration of this Agreement, any releasable Product in Heritage's possession shall be promptly delivered to Premier within [***]. In addition, Premier shall purchase all Products and ingredients, packaging and material Heritage has on hand and not previously billed to Premier at the time of the termination that are used solely for the production of the Products, if any exist. The ingredients, packaging, and materials used solely for Premier shall be so identified in Schedule C and shall not exceed a [***] supply as calculated based on the previous [***] usage for the material in question. If the vendor's minimum order quantity for a particular material exceeds a [***] supply, then Heritage shall obtain permission from Premier to order such quantity. If Premier grants permission to order the quantity greater than a [***] supply, then Heritage shall not be liable for the excess inventory of this particular material. The cost of all ingredients and packaging material to be purchased by Premier shall be [***]. In the event that Premier has defaulted in its payment obligations hereunder, and failed to cure such default following notice as set forth in Section 11(a), Heritage shall have no obligation to deliver such releasable Product to Premier. In no event, however, shall Heritage have the right to resell or otherwise use the releasable Product held in its custody. 12. GOVERNING LAW + +Venue for any litigation arising out of this Agreement shall be in any court of competent jurisdiction located in San Francisco, California. The Parties hereby submit to the jurisdiction of that state for such purposes. All matters relating to this Agreement, the rights of the Parties hereunder and the construction of the terms hereof shall be governed by the laws of the State of California, without regard to conflicts of laws principles. 13. NOTICES + +Except as otherwise expressly set forth in this Agreement, all consents, authorizations, agreements, approvals, notices, demands and other communications to be given or delivered under or by reason of the provisions of this Agreement shall be in writing and shall be deemed to have been given when delivered personally or by documented overnight delivery services, or sent by facsimile or other electronic transmission service provided they are sent in a manner that provides confirmation of their receipt. Notices, demands, and communications to the respective Parties shall, unless another address is specified in writing, be sent to the address indicated below: + +Notice to PREMIER: + +VP Operations Premier Nutrition Corporation 188 Spear Street, Suite 600 San Francisco, CA 94608 Email: [***] + +With a copy to General Counsel: Email: [***] 10 + +Source: BELLRING BRANDS, INC., S-1, 9/20/2019 + + + + + +Notice to JASPER/HERITAGE: + +Chief Financial Officer Stremicks Heritage Foods, LLC 4002 Westminster Avenue Santa Ana, CA 92703-1310 Email: [***] + +With a copy to: President of Jasper Products, L.L.C. Email: [***] 14. CONFLICTING TERMS + +The terms of this Agreement shall supersede and take precedent over any conflicting terms found in any purchase order issued by Premier or any invoice issued by Heritage. 15. NO WAIVER + +The failure of either Party to assert a right hereunder or to insist upon compliance with any terms or condition of this Agreement shall not constitute a waiver of that right or excuse the subsequent performance or non-performance of any such term or condition by the other Party. 16. ENTIRE AGREEMENT AND HEADINGS + +This Agreement, schedules or addenda attached hereto and incorporated herein, as amended from time to time, constitute the entire agreement of the Parties relating to the manufacture, packaging, storage, and shipping of the Products, and any prior or contemporaneous agreements or understandings relating thereto are superseded hereby. This Agreement may not be amended except by an instrument in writing duly executed on behalf of the Party against whom such amendment is sought to be enforced. All headings utilized herein are inserted for reference only and shall have no effect on the meaning or construction of any terms of this Agreement. Notwithstanding the above, Premier shall have the right to supplement, modify or amend, from time to time, the Specifications set forth on Schedule A attached hereto; provided, however, that no such modification or amendment shall become part of this Agreement until the same is delivered in writing to Heritage. All such modified products and their formulations are and shall remain the proprietary and sole property of Premier unless otherwise specified. 17. BINDING EFFECT + +This Agreement, schedules or addenda attached hereto and incorporated herein, shall be binding upon and shall inure to the benefit of the Parties hereto and their respective assignees and successors in interest. This Agreement is not assignable or transferable by either Party, in whole or in part, without the prior written consent of the other Party; provided, however that Premier may assign this Agreement in the event that Premier is sold, merged into or with another entity, or undergoes a "change in control". "Change in control" shall include without limitation (i) the cumulative sale, assignment or other transfer of voting or beneficial equity securities of Premier representing more than fifty percent (50%) of its voting or beneficial equity securities; (ii) Premier being a constituent party to a merger, reorganization or similar transaction; or (iii) a sale, assignment or other transfer of substantially all of Premier s assets or business. 18. NON-EXCLUSIVITY AND NON-COMPETITION + +(a) Nothing herein shall be construed to create a requirements contract or to require Premier to purchase any Products, other than the Minimum Annual Order Volume as specified in 2 (c). Premier reserves the right to buy Products or similar product from other co-packers, manufacturers, or third-parties. 11 + +Source: BELLRING BRANDS, INC., S-1, 9/20/2019 + + + + + +(b) [***] 19. ATTORNEY FEES + +Should either Heritage or Premier be required to institute legal action to enforce any of its rights set forth in this Agreement, then the prevailing Party shall be entitled to reimbursement for all reasonable attorneys' fees and costs incurred as determined by the court in any such action. If Heritage or Premier become engaged in litigation (i) that is in any way connected with this Agreement and (ii) in which either or both of the Parties assert and file one or more claims against the other, the prevailing Party shall be entitled to an award of reasonable attorneys' fees, court costs and out-of-pocket expenses, as determined by the trial court. 20. INDEPENDENT CONTRACTOR + +The relationship of Heritage to Premier under this Agreement shall be that of an independent contractor and no agency or employment relationship shall be implied by this Agreement. Accordingly, Heritage shall be responsible for payment of all taxes including federal, state and local taxes arising out of Heritage's activities under this Agreement, including, but not limited to, federal and state income tax, social security tax, unemployment insurance tax, and any other taxes or business license fees as required. 21. PRODUCT RECALLS + +Premier shall have the sole right, exercisable in its discretion, to initiate and direct the content and scope of a recall, market withdrawal, stock recovery, product correction and/or advisory safety communication (any one or more referred to as a "Recall Action") regarding the Products. At Premier's option, Premier can direct Heritage to, and upon such direction Heritage shall, conduct such Recall Action (and Heritage shall ensure Jasper's cooperation). Premier shall determine, in its sole discretion, the manner, text and timing of any publicity to be given such matters upon prior consultation with Heritage. In the event a Recall Action is initiated or directed by Premier, Heritage agrees to fully cooperate and take all such steps as are reasonably requested to implement the Recall Action in a timely and complete manner. Any and all action to be taken in connection with a Recall Action shall be in accordance with FDA policies and other applicable laws and regulations. Heritage shall bear all costs, fees and out-of-pocket expenses associated with any Recall Action which results from (i) Heritage's or Jasper's negligence or willful misconduct, (ii) Heritage's or Jasper's failure to comply with Product Specifications or the Post Holdings Quality Expectations Manual set forth on Schedule A, (iii) any breach of this Agreement by Heritage or (iv) ingredients or packaging materials purchased by Heritage or Jasper. In all other cases, Premier shall bear all costs associated with any Recall Action. + +[Signature Page Next Following] 12 + +Source: BELLRING BRANDS, INC., S-1, 9/20/2019 + + + + + +IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by a duly authorized officer on the day and year first above written. PREMIER NUTRITION CORPORATION STREMICKS HERITAGE FOODS, LLC + +BY: /s/ Darcy Davenport BY: /s/ Sam Stremick NAME (print): Darcy Davenport NAME (print): Sam Stremick TITLE: President TITLE: President DATE: 1/8/18 DATE: 1/8/18 13 + +Source: BELLRING BRANDS, INC., S-1, 9/20/2019 + + + + + +[The schedules described below have been omitted pursuant to Item 601(a)(5) of Registration S-K.] + +Schedules: A. Products Processing and Analytical Requirements B. HERITAGE Records C. Ingredients & Materials to be supplied by HERITAGE and PREMIER, waste allowance, pricing schedule and all other terms and conditions of sale. D. Premier Nutrition Contacts E. Post Holdings Quality Expectations Manual + +Source: BELLRING BRANDS, INC., S-1, 9/20/2019 \ No newline at end of file diff --git a/full_contract_txt/BellringBrandsInc_20190920_S-1_EX-10.12_11817081_EX-10.12_Manufacturing Agreement2.txt b/full_contract_txt/BellringBrandsInc_20190920_S-1_EX-10.12_11817081_EX-10.12_Manufacturing Agreement2.txt new file mode 100644 index 0000000000000000000000000000000000000000..216cc2a618f43d668528beedfb81406c88abf7e6 --- /dev/null +++ b/full_contract_txt/BellringBrandsInc_20190920_S-1_EX-10.12_11817081_EX-10.12_Manufacturing Agreement2.txt @@ -0,0 +1,21 @@ +AMENDMENT NO. 1 TO STREMICK'S HERITAGE FOODS, LLC and PREMIER NUTRITION CORPORATION MANUFACTURING AGREEMENT + +This Amendment No. 1 (the "Amendment"), entered into by and between Stremick's Heritage Foods, LLC ("Heritage") Premier Nutrition Corporation ("Premier") is effective as of June 11, 2018 ("Amendment Effective Date") and amends that certain Manufacturing Agreement between Heritage and Premier dated July 1, 2017 ("Agreement"). Heritage and Premier are each referred to herein as a "Party" and collectively as the "Parties." + +WHEREAS, Heritage and Premier entered into the Agreement; + +WHEREAS, the Parties wish to amend the Agreement in accordance with the terms and conditions set forth herein. + +NOW, THEREFORE, in consideration of the promises and of the mutual covenants, representations and warranties contained in the Agreement and set forth herein, the Parties hereby agree that the following changes shall be made to the Agreement: + +1. The Parties hereby agree to remove Section 2(c) in its entirety and replace it with the following: + +During the Term of this Agreement, Premier shall be required to purchase a Minimum Annual Order Volume ("MAOV") of [***] ("Units") for the twelve-month period commencing July 1, 2018 and ending June 30, 2019. The MAOV [***] Units for each twelve-month period commencing July 1, 2019 through the end of the Term, contingent upon commercial aseptic production at Heritage's [***] facility and approval of that facility by Premier by January 1, 2019. For the avoidance of doubt, the six-month period commencing July 1, 2022 and ending December 31, 2022, Premier will be required to purchase [***] (the twelve-month periods and the six-month period are each a "Contract Period"). + +2. Except as otherwise specified above in this Amendment, all other terms, conditions and covenants of the Agreement shall remain in full force and effect. + +IN WITNESS WHEREOF, the Parties have caused this Amendment to be signed by their respective duly authorized representatives as of the Amendment Effective Date. Premier Nutrition Corporation Stremick's Heritage Foods, LLC. + +By: /s/ Darcy Davenport By: /s/ Sam Stremick Name: Darcy Davenport Name: Sam Stremick Title: President Title: President + +Source: BELLRING BRANDS, INC., S-1, 9/20/2019 \ No newline at end of file diff --git a/full_contract_txt/BellringBrandsInc_20190920_S-1_EX-10.12_11817081_EX-10.12_Manufacturing Agreement3.txt b/full_contract_txt/BellringBrandsInc_20190920_S-1_EX-10.12_11817081_EX-10.12_Manufacturing Agreement3.txt new file mode 100644 index 0000000000000000000000000000000000000000..9fdd07bf380da9143c1b7499f8edadc88b95f4a0 --- /dev/null +++ b/full_contract_txt/BellringBrandsInc_20190920_S-1_EX-10.12_11817081_EX-10.12_Manufacturing Agreement3.txt @@ -0,0 +1,135 @@ +AMENDMENT NO. 2 TO STREMICK'S HERITAGE FOODS, LLC and PREMIER NUTRITION CORPORATION MANUFACTURING AGREEMENT + +This Second Amendment ("Second Amendment"), entered into by and between Stremick's Heritage Foods, LLC, ("Heritage"), Premier Nutrition Corporation ("Premier") is effective as of October 1, 2018 ("Second Amendment Effective Date") and amends that certain Manufacturing Agreement between Heritage and Premier dated July 1, 2017 ("Agreement"). Heritage and Premier are each referred to herein as a "Party" and collectively as the "Parties". + +WHEREAS, PREMIER and HERITAGE entered into the Agreement; + +WHEREAS, the Parties wish to extend and amend the Agreement in accordance with the terms and conditions set forth herein; and + +WHEREAS, HERITAGE [***] desires to produce Products packaged in aseptic plastic bottles ("Bottled Products") for PREMIER in accordance with the terms and conditions set forth in the Agreement, as well as those set forth herein, [***]; and + +NOW, THEREFORE, in consideration of the promises and of the mutual covenants, representations and warranties, contained in the Agreement and set forth herein, the Parties hereby agree that the following changes be made to the Agreement: 1. Term. This Second Amendment shall be effective from The Second Amendment Effective Date and shall expire on December 31, 2021. Upon expiration, this Second Amendment shall be of no further force or effect, and the terms and conditions of the Agreement shall as they were before the Second Amendment Effective Date. Notwithstanding anything herein to the contrary, a Party's right to enforce the terms and conditions of this Second Amendment shall survive the Second Amendment's expiration. 2. 1 BASIC TERMS. Section 1, of the Agreement is amended as follows: + +a. Section 1(a)(viii) is removed in its entirety and replaced with: + +"(viii) Pricing and Terms for Tetra 325 ml Dreamcaps ........................ Schedule C" + +b. A new section, Section 1(a)(xi), is inserted to read + +"(xi) Pricing and Terms for Aseptic Plastic Bottles ........................... Schedule C-1" 3. PRODUCTION OF PRODUCT. + +a. Section 2(a) of the Agreement is amended so that the first sentence that previously read: + +"Heritage shall produce the products described on Schedule A attached hereto, as may be amended by the Parties hereafter from time to time (the "Products"), for Premier at [***] Heritage's or Heritage's wholly owned subsidiary, Jasper's facilities (the "Facilities"). [***]" + +Source: BELLRING BRANDS, INC., S-1, 9/20/2019 + + + + + +now reads: + +"Heritage shall produce the products described on Schedule A and Schedule A-1 attached hereto, as may be amended by the Parties hereafter from time to time (the "Products," each individual unit of Product "Unit"), for Premier at [***] Heritage's or Heritage's wholly owned subsidiary, Jasper's facilities (the "Facilities"). [***], except that, notwithstanding anything herein to the contrary, [***]." + +b. Section 2(c) of the Agreement is amended so that the term "Units" as defined therein is now referred to as "Tetra Units". + +c. Section 2(d) of the Agreement is amended so that whereas it previously read: + +"During the Term, Premier shall have the right (but not the obligation) to order from Heritage quantities of Products in excess of [***] and provided Heritage has the capacity and the ability to produce such additional quantities of Products, Heritage agrees to produce such additional quantities per the pricing and terms on Schedule C." + +it now reads: + +"During the Term, Premier shall have the right (but not the obligation) to order from Heritage quantities of Products in in excess of [***] and provided Heritage has the capacity and the ability to produce such additional quantities of Products, Heritage agrees to produce such additional quantities per the pricing and terms on Schedule C." + +d. Section 2(e) of the Agreement is amended so that whereas it previously read: + +[***] + +it now reads: + +[***] + +e. Section 2(f) of the Agreement is amended so that whereas it previously read: + +[***] + +it now reads: + +[***] + +f. Section 2(m) of the Agreement is amended so that the term "Units" appearing in the second complete sentence is replaced with the term "Tetra Units". + +g. Section 2(n) of the Agreement is amended so that the last sentence that previously read: + +"The final production quantity by Heritage and Jasper will count towards the MAOV requirements" 2 + +Source: BELLRING BRANDS, INC., S-1, 9/20/2019 + + + + + +now reads: + +"The final production quantity of Tetra Units by Heritage and Jasper will count toward the MAOV requirements for Tetra Units." + +h. Section 2(o)(i) of the Agreement is amended so that the first sentence that previously read: + +"All Products manufactured, packaged and delivered to Heritage or Jasper under the terms of this Agreement shall conform to the specifications supplied to Heritage by Premier as listed on Schedule A, which Schedule may from time to time be modified by Premier in writing (the "Specifications"), shall conform to Post Holding's Quality Expectations Manual attached hereto as Schedule E, and shall conform in all material respects to samples previously supplied to Premier by Heritage." + +now reads: + +"All Products manufactured, packaged and delivered by Heritage or Jasper under the terms of this Agreement shall conform to the specifications supplied to Heritage by Premier as listed on Schedule A and/or Schedule A-1, which Schedules may from time to time be modified by Premier in writing (the "Specifications"), shall conform to Post Holding's Quality Expectations Manual attached hereto as Schedule E, and shall conform in all material respects to samples previously supplied to Premier by Heritage." 4. Section 3 DELIVER, PRICING, BILLING AND PAYMENT + +a. Section 3(b) of the Agreement is amended so that whereas it previously read: + +"Heritage shall purchase all ingredients and packaging materials identified in Schedule C to be used in connection with the manufacturer of the Products. Heritage shall invoice Premier through the [***] billing as identified on Schedule C." + +now reads: + +"Heritage shall purchase all ingredients and packaging materials identified in the relevant Schedule C or Schedule C-l to be used in connection with the manufacturer of the Products. Heritage shall invoice Premier through the [***] billing as identified on the relevant Schedule C or Schedule C-l. Heritage shall not, however, purchase ingredients or packaging materials in excess of those required [***]." + +b. Section 3(c) of the Agreement is amended so that whereas it previously read: + +"Heritage shall charge Premier [***] as set forth in Schedule C." + +it now reads: + +"Heritage shall charge Premier [***] as set forth in the relevant Schedule C or Schedule C-1." 5. Schedule A-l. The following is attached to and incorporated into the Agreement as Schedule A-l: + +Schedule A-1 ([***]) + +[***] + +[***] 3 + +Source: BELLRING BRANDS, INC., S-1, 9/20/2019 + + + + + +6. Section 13 NOTICES is amended such that whereas Notice to PREMIER was required to: + +"VP Operations Premier Nutrition Corporation 188 Spear Street, Suite 600 San Francisco, CA 94608 Email:[***] + +With a Copy to General Counsel: Email [***]" + +it is now required to: + +"Premier Nutrition Corporation VP Operations 1222 67th Street, Suite 210 Emeryville, CA 94608 Email: [***] + +With a Copy to General Counsel: Email [***]" 7. Schedule C-l. The following is attached to and incorporated into the Agreement as Schedule C-l: + +Schedule C-1 ([***]) + +[***] + +8. Except as otherwise specified above in this Amendment, all other terms, conditions, and covenants of the Agreement shall remain in full force and effect. + +IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by a duly authorized officer on the day and year first above written. PREMIER NUTRITION CORPORATION STREMICKS HERITAGE FOODS, LLC And as and for Jasper Products, LLC + +BY: /s/ Darcy Davenport BY: /s/ Sam Stremick ITS: President ITS: President 4 + +Source: BELLRING BRANDS, INC., S-1, 9/20/2019 \ No newline at end of file diff --git a/full_contract_txt/BellringBrandsInc_20190920_S-1_EX-10.12_11817081_EX-10.12_Manufacturing Agreement4.txt b/full_contract_txt/BellringBrandsInc_20190920_S-1_EX-10.12_11817081_EX-10.12_Manufacturing Agreement4.txt new file mode 100644 index 0000000000000000000000000000000000000000..feafae5a2067233df46a54e94141e1d7b9adaab2 --- /dev/null +++ b/full_contract_txt/BellringBrandsInc_20190920_S-1_EX-10.12_11817081_EX-10.12_Manufacturing Agreement4.txt @@ -0,0 +1,25 @@ +AMENDMENT NO. 3 TO STREMICK'S HERITAGE FOODS, LLC and PREMIER NUTRITION CORPORATION MANUFACTURING AGREEMENT + +This Amendment No. 3 (the "Third Amendment"), entered into by and between Stremicks Heritage Foods, LLC ("Heritage") Premier Nutrition Corporation ("Premier") is effective as of July 3, 2019 ("Third Amendment Effective Date") and amends that certain Manufacturing Agreement between Heritage and Premier dated July 1, 2017 as amended ("Agreement"). Heritage and Premier are each referred to herein as a "Party" and collectively as the "Parties." + +WHEREAS, Heritage and Premier entered into the Agreement; + +WHEREAS, the Parties wish to amend the Agreement in accordance with the terms and conditions set forth herein. + +NOW, THEREFORE, in consideration of the promises and of the mutual covenants, representations and warranties contained in the Agreement and set forth herein, the Parties hereby agree that the following changes shall be made to the Agreement: + +1. The Parties hereby agree to remove Schedule C-1 in its entirety and replace it with the following: + +Schedule C-1. The following is attached to an incorporated into the Agreement as Schedule C-1: + +Schedule C-1([***]) + +[***] + +2. Except as otherwise specified above in this Amendment, all other terms, conditions and covenants of the Agreement shall remain in full force and effect. + +IN WITNESS WHEREOF, the Parties have caused this Amendment to be signed by their respective duly authorized representatives as of the Amendment Effective Date. Premier Nutrition Corporation Stremick's Heritage Foods, LLC. + +By: /s/ Darcy Davenport By: /s/ Sam Stremick Name: Darcy Davenport Name: Sam Stremick Title: President Title: President + +Source: BELLRING BRANDS, INC., S-1, 9/20/2019 \ No newline at end of file diff --git a/full_contract_txt/BerkshireHillsBancorpInc_20120809_10-Q_EX-10.16_7708169_EX-10.16_Endorsement Agreement.txt b/full_contract_txt/BerkshireHillsBancorpInc_20120809_10-Q_EX-10.16_7708169_EX-10.16_Endorsement Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..cdf5347555a6b292d50d0d8271812bdd11ba28a6 --- /dev/null +++ b/full_contract_txt/BerkshireHillsBancorpInc_20120809_10-Q_EX-10.16_7708169_EX-10.16_Endorsement Agreement.txt @@ -0,0 +1,109 @@ +Exhibit 10.16 ENDORSEMENT AGREEMENT THIS ENDORSEMENT AGREEMENT ("Agreement") by and between GENO AURIEMMA ("Auriemma") and BERKSHIRE BANK, a Massachusetts savings bank with its principal place of business at 24 North Street, Pittsfield, MA 01210 ("Berkshire")(Each or both of which shall hereinafter be referred to as the "PARTY" or "PARTIES," respectively). RECITALS: Berkshire desires to obtain the right to use the name, likeness, and endorsement services of Auriemma in connection with the advertisement and promotion of Berkshire's Financial Services (as defined below). The endorsement by Auriemma of Berkshire is of commercial value. Berkshire and Auriemma wish to enter into an agreement to cooperate and coordinate the marketing of Auriemma's endorsement with Berkshire's banking services. NOW, THEREFORE for and in consideration of the foregoing, and the mutual covenants and agreements set forth herein, the Parties hereby agree as follows: 1. DEFINITIONS. The following terms shall be defined in the Agreement as follows: a) "CONTRACT PERIOD" means that period of time commencing upon the full execution of this Agreement by both Parties and terminating on May 31, 2016 unless sooner terminated under this Agreement. b) "SERVICES PERIOD" means that period of time commencing upon the full execution of this Agreement by both Parties and terminating on May 31, 2014 unless sooner terminated under this Agreement. b) "CONTRACT TERRITORY" shall be any State in which Berkshire currently, or at any time during the Contract Period, offers Banking Services. c) "FINANCIAL SERVICES" shall mean banking, lending, financial and wealth management products and services offered by Berkshire and insurance products and services offered by Berkshire's affiliate Berkshire Insurance Group, Inc. d) "AURIEMMA IDENTIFICATION" shall mean any words, symbols, photographic or graphic representations, statements by Auriemma or any combination thereof which identify Auriemma such as, for example, Auriemma's name, voice, nickname, likeness, and anything else that identifies Auriemma. The Auriemma + +Source: BERKSHIRE HILLS BANCORP INC, 10-Q, 8/9/2012 + + + + + + Identification shall not include any reference to the University of Connecticut, UConn, the use of the University of Connecticut logos or trademarks, Auriemma's position as head women's basketball coach for the University of Connecticut. If during the Contract Period Berkshire desires to make reference to University of Connecticut, UConn, or to use of the University of Connecticut logos or trademarks, or to refer to Auriemma's position as head women's basketball coach for the University of Connecticut, Auriemma agrees to use reasonable efforts to obtain the necessary consents from the State of Connecticut and the University of Connecticut in order to permit Berkshire to do so, it being understood by Berkshire that Auriemma makes no representation or warrantees that he will be able to obtain such consents and that the time required to obtain such consents is wholly outside of the control of Auriemma. e) "RIGHTS" shall mean all of the endorsement rights, services and other rights and benefits granted to Berkshire in this Agreement. g) "BERKSHIRE COMPETITOR" is any person or entity that in any way competes with Berkshire's financial services. h) "BERKSHIRE PARTIES" is Berkshire, and any affiliates of Berkshire, as defined herein. For purposes of this Agreement, "AFFILIATES" means any other person or entity that directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with, Berkshire. i) "$" shall mean the lawful currency of the United States of America unless otherwise specified. 2. ENDORSEMENT AND GRANT OF RIGHTS. During the Contract Period: a) Subject to the terms of Paragraph 6 below, Auriemma will make the appearances and provide to Berkshire during the Services Period the services, initiatives and programs described in Schedule A attached hereto (the "Endorsement Services"); and b) Auriemma grants to Berkshire the exclusive right and license (the "License Rights") to use the Auriemma Identification during the Contract Period and throughout the Contract Territory solely in connection with the advertisement and promotion of Berkshire and the Financial Services; c) The License Rights are exclusive to Berkshire and may not be assigned or in any way conveyed by Berkshire without Auriemma's express written consent, except in the event of a merger by Berkshire with another entity offering Banking Services. + +Source: BERKSHIRE HILLS BANCORP INC, 10-Q, 8/9/2012 + + + + + + 3. EXCLUSIVITY. Auriemma expressly agrees and undertakes that: a) The right to use the Auriemma Identification has not been previously granted nor will it be granted to anyone other than Berkshire for use during the Contract Period within the Contract Territory in connection with the advertisement, promotion and sale of products and services which are the same as or similar to any of the Financial Services; b) Auriemma will not enter into any arrangement or agreement, which enables any Berkshire Competitor to be endorsed by Auriemma (whether by using the Auriemma Identification, Auriemma providing services similar to the Endorsement Services, or otherwise) during the Contract Period within the Contract Territory. Notwithstanding the foregoing, it is understood that Auriemma has no control or influence over any decisions by the University of Connecticut to enter into any arrangement or agreement with any Berkshire Competitor. c) Anything herein to the contrary notwithstanding, Berkshire shall not have the right to utilize the Auriemma Identification except to the extent specifically authorized by this Agreement. d) Nothing herein shall grant Auriemma any rights to use any of Berkshire's trademarks, names, services marks, logos or any copyrightable materials with Berkshire's prior written consent. 4. COMPENSATION. (a) In consideration of the rights and benefits granted to Berkshire hereunder, Berkshire shall pay to Auriemma the sum of Four Hundred Eighty Thousand and 00/100 Dollars ($480,000.00), as set forth in Paragraph 4 (b)-(c) below. (b) Berkshire will make four (4) equal cash payments to Auriemma in the amount of Ninety Thousand and 00/100 Dollars ($90,000.00) on June 1, 2012, June 1, 2013, June 1, 2014, and June 1, 2015. (c) Berkshire will cause to be issued to Auriemma on June 1, 2012, June 1, 2013, June 1, 2014, and June 1, 2015, (each an "issuance date") four (4) blocks of shares of unrestricted common stock of Berkshire's parent corporation, Berkshire Hills Bancorp, Inc. (BHLB), each of which as of its respective issuance date shall have a value of Thirty Thousand and 00/100 Dollars ($30,000.00), based upon the closing price of BHLB common shares at the end of the last trading day immediately preceding the issuance date. 5. PAYMENTS. Auriemma may elect to have cash payments due Auriemma hereunder made by check, wire transfer, or bank transfer. Unless such election is made in writing, all cash payments shall be made by check, drawn to the order of Auriemma or its designated entity or entities and delivered to the address first stated above. Past due cash payments (i.e., payments due more than thirty (30) days after Berkshire's receipt of the applicable invoice) shall bear interest at the rate of one (1%) percent per month. + +Source: BERKSHIRE HILLS BANCORP INC, 10-Q, 8/9/2012 + + + + + + 6. AURIEMMA'S ENDORSEMENT SERVICES AND APPEARANCES. (a) Berkshire acknowledges that Auriemma's primary obligations are those associated with his position as the head coach of the University of Connecticut women's basketball team. Further, Berkshire acknowledges that Auriemma has certain obligations related to his position as the head coach for the United States Women's Olympic basketball team. Subject to Auriemma's obligations as the head coach for the University of Connecticut women's basketball team the United States Women's Olympic basketball team, Auriemma shall make himself available for those appearances set forth on Schedule A. (b) Berkshire shall reimburse Auriemma for all reasonable out-of-pocket expenses incurred by Auriemma in attending any requested appearances including any travel days. Without limitation to the foregoing, Berkshire will reimburse Auriemma for his air travel expenses if necessary for Auriemma to be in attendance at a requested appearance. In addition, if necessary Auriemma shall be provided with superior hotel suite accommodations and reimbursed for all reasonable dining expenses incurred while traveling to and attending any appearances or events. (c) Berkshire shall give Auriemma as much advanced notice as possible for any requested appearances, but in no event shall Berkshire give Auriemma less than fifteen (15) days' notice of the time and place Berkshire desires Auriemma to appear. (d) Unless otherwise agreed to in advance, no appearance shall exceed a total of two (2) hours in duration. (e) Any apparel that Auriemma is requested by Berkshire to wear during any appearance or any photo shoot session must be approved by Auriemma at least forty-eight (48) hours in advance and must be Nike branded apparel. 7. AURIEMMA'S APPROVAL. a) Berkshire shall use the Auriemma Identification only in such a form and manner as is specifically approved by Auriemma and, upon the reasonable request by Auriemma, shall use any reasonable legends, markings, and notices of trademark rights or registration reasonably specified by Auriemma, or any other notice of Auriemma's ownership, including copyright. b) Berkshire agrees that all use of the Auriemma Identification in connection with advertising, displays, and other materials and all advertising shall not be made unless and until finished samples of such proposed use have been provided to Auriemma and such use has been approved by Auriemma or Auriemma's authorized representative. Auriemma agrees that any use of the Auriemma Identification submitted for approval as provided herein will be deemed to have been approved by Auriemma if the same is not disapproved in writing within ten (10) business days after receipt + +Source: BERKSHIRE HILLS BANCORP INC, 10-Q, 8/9/2012 + + + + + + thereof. If any use of the Auriemma Identification submitted for approval as provided herein is disapproved, Berkshire shall be advised of the specific grounds for disapproval. Subject to this Agreement, Berkshire agrees to follow Auriemma's reasonable instructions and guidelines regarding proper usage of the Auriemma Identification in all respects as may have been reasonably and timely provided to Berkshire by the Auriemma. 8. PROTECTION OF THE AURIEMMA IDENTIFICATION. Berkshire and Auriemma agree that they will take all necessary steps during the Contract Period and thereafter to protect the Auriemma Identification in connection with the Endorsement Services. 9. CONFIDENTIALITY. Except as required by federal securities laws, or federal or state banking laws, each party agrees: (i) that it will not disclose to any third party or use any Confidential Information, as defined herein, disclosed to it by the other party except as expressly permitted in this Agreement; and (ii) that it will take all reasonable measures to maintain the confidentiality of all Confidential Information of the other party in its possession or control, which will in no event be less than the measures it uses to maintain the confidentiality of its own information of similar importance. For the purpose of this Agreement, Confidential Information shall mean all information, materials and data, in any form, format or medium, disclosed, or revealed to either party in any way relating to the other party's business including but not limited to its finances, customers, operations, products, services, plans, pricing, suppliers, business strategies or any other similar information. Confidential Information may be contained in written material, verbal or electronic communications. 10. TERMINATION AND DEFAULT. a) TERMINATION FOR BREACH. Either Party shall have the right, without prejudice to any other rights it may have, to terminate this Agreement if the other Party materially breaches its obligation hereunder and such breach remains uncured. A material breach occurs if either Party (i) fails to make any payment, or (ii) fails to observe or perform any of the covenants, agreements, or obligations (other than payments of money). Upon the breach of either of the above conditions, the non-defaulting party may terminate this Agreement as follows: (A) as to a default under clause (i) above, if payment is not made within ten (10) days after the defaulting party shall have received written notice of such failure to make payment; or (B) as to a default under clause (ii) above, if such default is not cured within thirty (30) days after the defaulting party shall have received written notice specifying in reasonable detail the nature of such default and such action the defaulting party must take in order to cure each such item of default. b) TERMINATION DUE TO INSOLVENCY. If either Party (the "Bankrupt Party"), (i) commences or becomes the subject of any case or proceeding under the + +Source: BERKSHIRE HILLS BANCORP INC, 10-Q, 8/9/2012 + + + + + + bankruptcy or insolvency laws; (ii) has appointed for it or for any substantial part of its property a court-appointed receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official; (iii) makes an assignment or the benefit of its credits; (iv) fails generally to pay its debts as they become due; or (v) takes corporate action in furtherance of any of the foregoing (collectively, herein referred to as "Events of Insolvency"), then, in each case, the Bankrupt Party shall immediately give notice of such event to the other Party. Whether or not such notice is given, the other Party shall have the right, to the fullest extent permitted under applicable law, following the occurrence of any Event of Insolvency and without prejudice to any other rights it may have, at any time thereafter to terminate this Agreement, effective immediately upon giving notice to the Bankrupt Party. c) EFFECT OF TERMINATION. Upon the expiration or termination of this Agreement for any reason (i) all payments that have accrued prior to the termination or expiration of this Agreement will be payable in full within thirty (30) days thereof, but any obligations to make further payments due, or that may have come due, under this Agreement shall become null and void; (ii) except as otherwise provided herein, the Services Period and the Contract Period shall end immediately and Berkshire shall promptly cease all use of the Auriemma Identification including any displays, documents, artwork, symbols, logos trademarks, trade names, photographic or graphic representations, depictions and/or other materials (including, but not limited to, advertising and/or promotional materials), which in any way or form (hard copy, electronic or otherwise) use the Auriemma Identification (collectively, "Materials"), except as otherwise set forth herein; and (iii) except as otherwise provided herein, Berkshire shall promptly remove all links and references to Auriemma and Materials from its website. Notwithstanding the foregoing, if the Agreement is terminated for any reason other than Berkshire's material breach, then for thirty (30) days following such termination, Berkshire may continue to use any printed material already produced under this Agreement. At the conclusion of this period, Berkshire's use of the printed material will cease. 11. TERMINATION BY BERKSHIRE. Berkshire may terminate this Agreement immediately by giving Auriemma notice if (i) Auriemma dies or is prevented by injury or illness from satisfactorily performing the obligations required by this Agreement; (ii) Auriemma is convicted of a felony or criminal offense involving dishonesty or fraud; or (iii) Auriemma publicly disparages Berkshire and/ or its products. 12. OTHER REMEDIES AND RIGHTS. The termination rights set forth herein shall not constitute the exclusive remedy of the non-defaulting party. Termination in accordance with the above provisions shall be without prejudice to any rights or claims, which the terminating party may otherwise have against the defaulting party. In the event of any arbitration or litigation, including breach, enforcement or interpretation, arising out of this Agreement, the prevailing party + +Source: BERKSHIRE HILLS BANCORP INC, 10-Q, 8/9/2012 + + + + + + of such litigation shall be entitled to recover reasonable attorney's fees, costs, and expenses, including pre-litigation and appellate attorneys' fees and costs. 13. MISCELLANEOUS PROVISIONS. If any provision(s) of this Agreement shall be determined to be void, ambiguous, or unenforceable, the same shall be stricken from this Agreement and in no way shall affect other provisions of, or the validity or enforceability of this Agreement. The Parties understand that the contents of this Agreement are confidential, and that disclosure of same to any third party could be detrimental to the interests of one or both Parties. Therefore, the Parties agree not to disclose the terms of this Agreement, without the prior written permission of the other party, other than to business advisors, legal and financial representatives, except as required by federal securities laws, or federal or state banking laws. 14. NOTICES. All notices required hereunder shall be sent by overnight mail or first class mail, or by confirmed electronic mail to the parties at the following addresses, or such other addresses as the parties may designate in writing to each other from time to time: If to Auriemma: Geno Auriemma With a copy to: Kahan, Kerensky & Capossela, LLP Attn: Sol Kerensky & Justin L. Murphy 45 Hartford Turnpike Vernon, CT 06066 If to Berkshire: Berkshire Bank Attn:Sean A. Gray, EVP — Retail Banking 24 North Street P.O. Box 1308 Pittsfield, MA 01202-1308 With a copy to: Berkshire Bank Attn: Wm. Gordon Prescott, VP and General Counsel 24 North Street P.O. Box 1308 Pittsfield, MA 01202-1308 + +Source: BERKSHIRE HILLS BANCORP INC, 10-Q, 8/9/2012 + + + + + + 15. FORCE MAJEUR. Notwithstanding anything else contained in this Agreement, neither Party will be liable for any delay in the performance of any of its obligations if such delay is caused by any reason wholly outside the control of the Party so delaying (a "Force Majeur Event") subject to the obligation of the Party so delaying promptly notifying the other Party in writing of the reasons for the delay and the likely duration of the delay. The performance of such Party's obligations will be suspended during the period that the Force Majeur Event persists and such Party will be granted an extension of time for performance equal to the period of the delay. If the delay referred to above exceeds sixty (60) days (or such other reasonable period taking into consideration the nature and cause of the delay), either Party may forthwith terminate this Agreement whereupon the Parties shall cease to be bound by their respective obligations under this Agreement in respect granted under this Agreement shall cease. 16. ENTIRE AGREEMENT. This Agreement is the entire agreement of the parties and cannot be altered or modified except by an agreement in writing signed by both parties. Upon its execution, this Agreement shall supersede all prior negotiations, understandings and agreements, whether oral or written, and such prior agreements shall thereupon be null and void and without further legal effect. 17. GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of the State of Connecticut. 18. RELATIONSHIP BETWEEN THE PARTIES. Nothing contained in this Agreement shall be construed as establishing an employer/employee relationship between Auriemma and Berkshire. Accordingly, there shall be no withholding for tax purposes from any payments due Auriemma hereunder and Auriemma shall be responsible for any and all income and other tax payments required by Auriemma. Nothing contained in this Agreement shall be construed to place the parties in the relationship of legal representatives, partners or joint ventures. Neither Party shall have any power to bind the other in any manner whatsoever, other than as otherwise stated in this Agreement. This paragraph shall survive termination of this Agreement. 19. REPRESENTATIONS AND WARRANTIES. a) Auriemma represents and warrants to Berkshire that: (i) Auriemma has full authority to enter into and perform under this Agreement subject only to approval by the University of Connecticut department of athletics and consulting office; + +Source: BERKSHIRE HILLS BANCORP INC, 10-Q, 8/9/2012 + + + + + + (ii) by entering into and performing under this Agreement, Auriemma is not, and shall not be in conflict with any prior obligations to third parties; (iii) that Auriemma will not assign or transfer any of the License Rights described in Paragraph 2. b) Berkshire represents and warrants to Auriemma that: (i) it has full authority to enter into and perform under this Agreement; (ii) by entering into and performing under this Agreement, it is not, and shall not be in conflict with any prior obligations to third parties. 20. INDEMNITY AND INSURANCE. Berkshire shall indemnify and hold Auriemma harmless from and against any and all claims, actions, suits, proceedings, losses, damages and expenses (including, without limitation, reasonable attorneys', consultants' and experts' fees) (collectively, "Claims") arising out of or relating to any inaccuracy or breach of Berkshire's representations, warranties, covenants or any claim or other cause of action arising out of or in connection with this Agreement, including actions based upon gross negligence of Berkshire under this Agreement, provided that Berkshire shall be given prompt notice of any such action or claim. 21. WAIVER. The failure of Auriemma or Berkshire at any time or times to demand strict performance by the other of any of the terms, covenants or conditions set forth herein shall not be construed as a continuing waiver or relinquishment thereof and either may at any time demand strict and complete performance by the other of said terms, covenants and conditions. 22. ASSIGNMENT. This Agreement shall bind and inure to the benefit of Auriemma and his successors and permitted assigns. Nothing herein shall prevent Auriemma from assigning the monetary benefits (but not the obligations) of this Agreement, as he may so desire. Berkshire may not assign this Agreement, in whole or in part, without Auriemma's written consent. In the case of reorganization, merger, consolidation, or sale of all or substantially all of its assets, any attempt to assign this Agreement other than as permitted above will be null and void. 23. SIGNIFICANCE OF HEADINGS. Paragraph headings contained in this Agreement are solely for the purpose of aiding speedy location of subject matter and are not in any sense to be given weight in the construction of this Agreement. Accordingly, in case of any question with respect to the + +Source: BERKSHIRE HILLS BANCORP INC, 10-Q, 8/9/2012 + + + + + + construction of this Agreement, it is to be construed as though such paragraph headings had been omitted. 24. INVALIDITY. If any term, covenant, condition or provision of this Agreement or the application thereof to any person or circumstance, shall to any extent be held to be invalid, illegal, or unenforceable in any respect, the remainder of this Agreement, or application of such term or provision to a person or circumstance other than to those as to which it is held invalid, illegal, or unenforceable, shall not be affected thereby, and each term, covenant, condition or provision of this Agreement shall be valid and shall be enforced to the fullest extent provided by law. 25. COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of which will constitute together a single document. 26. CONSTRUCTION. The Parties acknowledge that this Agreement was negotiated between them and shall not be construed against either Party on the grounds of authorship. 27. ARBITRATION. Any dispute or difference between the parties hereto arising out of or relating to this Agreement shall be settled by arbitration in accordance with the Commercial Rules of the American Arbitration Association by a panel of three qualified arbitrators. Berkshire and Auriemma shall each choose an arbitrator and the two (2) arbitrators so chosen shall choose the third. If either BERKSHIRE or Auriemma fails to choose an arbitrator within 30 days after notice of commencement of arbitration or if the two arbitrators fail to choose a third arbitrator within thirty (30) days after their appointment, the American Arbitration Association shall, upon the request of any party to the dispute or difference, appoint the arbitrator or arbitrators to constitute or complete the panel as the case may be. Arbitration proceedings hereunder may be initiated by either BERKSHIRE or Auriemma making a written request to the American Arbitration Association, together with any appropriate filing fee, at the office of the American Arbitration Association in the county in which proceedings are to be held pursuant to the terms of the following sentence. All arbitration proceedings or litigation (to the extent the remedy requested is not, by law, available through arbitration [e.g., injunctive relief]) relating to any claims or disputes arising under or relating to this Agreement shall be brought in the county in which the principal executive office of the party not initiating such action or proceeding defendant or responding party) is located. The parties irrevocably submit and consent to the exercise of subject matter jurisdiction and personal jurisdiction over each of the parties by the federal and/or state courts in such jurisdiction (the "Selected Jurisdiction"). The parties hereby irrevocably waive any and all objections that any party + +Source: BERKSHIRE HILLS BANCORP INC, 10-Q, 8/9/2012 + + + + + + may now or hereafter have to the exercise of personal and subject matter jurisdiction in the Selected Jurisdiction and to the laying of venue of any such proceeding or action brought in the Selected Jurisdiction. Any order or determination of the arbitral tribunal upon the parties to the arbitration and may be entered in any court having jurisdiction. IN WITNESS WHEREOF, the Parties execute this Agreement intending to be legally bound. + + + + /s/ Geno Auriemma + + 5/17/12 GENO AURIEMMA + + Date BERKSHIRE BANK + + + + By: /s/ Sean A. Gray + + 5/14/12 Sean A. Gray + + Date Executive Vice President — Retail Banking + + + +Source: BERKSHIRE HILLS BANCORP INC, 10-Q, 8/9/2012 + + + + + + SCHEDULE A 1. Auriemma will act as the spokesperson for Berkshire and its Affiliates. 2. Auriemma will participate in one (1) recording session annually during the Services Period of not more than two (2) hours, not including travel time, to record a radio advertising spot at a date and location to be mutually agreed upon; 3. Auriemma will participate in one (1) production session annually during the Services Period of not more than three (3) hours, not including travel time, to record a television advertising spot at a date and location to be mutually agreed upon; 4. Auriemma will participate in one (1) photo session annually during the Services Period of not more than two (2) hours, not including travel time, at a date and location to be mutually agreed upon; 5. Auriemma will be available for two (2) appearances annually during the Services Period within the Contract Territory, the date and location to be mutually agreed upon, each not more than one (1) hour in duration, where Auriemma will meet, greet and pose for photos. 6. Auriemma will be available one (1) time per calendar quarter during the Services Period to meet and address Berkshire's small business customer groups. 7. Auriemma will sign 100 items per year during the Services Period for Berkshire provided all items are to be obtained at Berkshire's cost, provided, however, that Berkshire shall not sell any items autographed by Auriemma and Auriemma will not be required to sign any item that is manufactured by a competitor of Nike and subject to Nike's right to disapprove any items. 8. Auriemma will permit Berkshire to place a link on its website (Berkshirebank.com) throughout the Contract Period, directing website viewers to a landing page promoting Berkshire's product or brand containing the Auriemma Identification. 9. Berkshire may utilize Auriemma and the Auriemma Identification throughout the Contract Period in all approved materials including billboards, subway/bus ads, direct mail, stand-ups, counter cards, posters, etc. + +Source: BERKSHIRE HILLS BANCORP INC, 10-Q, 8/9/2012 \ No newline at end of file diff --git a/full_contract_txt/BizzingoInc_20120322_8-K_EX-10.17_7504499_EX-10.17_Endorsement Agreement.txt b/full_contract_txt/BizzingoInc_20120322_8-K_EX-10.17_7504499_EX-10.17_Endorsement Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..19cdbb3ab8e0be7e821fa53cc10fdc0196ec2d75 --- /dev/null +++ b/full_contract_txt/BizzingoInc_20120322_8-K_EX-10.17_7504499_EX-10.17_Endorsement Agreement.txt @@ -0,0 +1,157 @@ +CELEBRITY ENDORSEMENT AGREEMENT THIS AGREEMENT is made as of this March 14, 2012 but effective as of March 1, 2012 ("Effective Date") by and between Bizzingo, Inc., a Nevada corporation with offices at 63 Main Street, Suite 202, Flemington, NJ 08822 ("Bizzingo") and Joseph Theismann, an individual whose address is 21495 Ridgetop Circle, Suite 304A, Sterling Virginia 20166 ("Theismann") (collectively the "Parties"). WITNESSETH: WHEREAS, Theismann is recognized and widely known throughout the world as a retired, hall of fame professional athlete, and sports celebrity; and WHEREAS, Theismann's name, by virtue of his ability and experience, has acquired a meaning in the mind of the purchasing public important to the advertising, promotion, and sale of services and merchandise; and WHEREAS, Bizzingo has developed a B2B interactive platform which engages in business social media including mobile and Internet applications ("Network"); and WHEREAS, Bizzingo is desirous of acquiring the rights to utilize Theismann's name in connection with the advertisement, promotion, and sale of the Network as provided herein and Theismann is willing to grant such right NOW, THEREFORE, in consideration of the mutual covenants set forth herein and for other good and valuable consideration, it is agreed as follows: 1. GRANT OF RIGHTS. Subject to the terms and conditions set forth herein, Theismann hereby grants to Bizzingo and its affiliates the unlimited right and privilege during the Term (as defined herein) and within the Territory to use the Property (as defined herein) in connection with the advertisement, promotion, and sale of the Network in the Territory whether through film, television, radio, print and Internet media, including the right to use the Property in or on the Network. It being understood and agreed that Bizzingo shall have the right to exhibit commercials, infomercials, advertisements and otherwise make use of all Property on a worldwide basis and that Bizzingo and its affiliates shall be the sole owner of all commercials, promotional materials and other items produced or created hereunder and all related rights worldwide, including, without limitation, copyright, trademark and intellectual property rights, subject however to the terms and conditions herein. Theismann agrees to cooperate with Bizzzingo's promotional efforts in this regard. In addition, as reasonably requested by Bizzingo, Theismann agrees to provide Bizzingo with such signatures, photographs and the like in order to fulfill his obligations hereunder. + +1 + +Source: BIZZINGO, INC., 8-K, 3/22/2012 + + + + + + Bizzingo agrees that any use of the Property for advertising, promotional or sale purposes will be approved in advance by Theismann. Theismann agrees that such material, submitted for approval as provided herein may be deemed by Bizzingo to have been approved hereunder if the same is not disapproved by the Theismann in writing within fourteen (14) days after Theismann's receipt thereof. Theismann agrees that any material submitted hereunder will not be unreasonably disapproved and, if it is disapproved, that Theismann shall advise Bizzingo in writing of the specific grounds therefor at the time of disapproval and provide Bizzingo with specific changes or alterations to such materials. Bizzingo thereafter shall have the right and privileged to use such Property as provided in this Agreement subject to such changes or alterations. Except as stated herein, no other rights or privileges are granted to Bizzingo by Theismann. "Property" as stated herein shall mean Theismann's name (including "Joe Theismann", "Theismann" "J. Theismann"), nicknames, initials, autograph, facsimile signature, photograph, image, likeness, voice, video portrayals, biographical data, character, symbols, and/or other endorsement, and any variations or deviations thereof. "Territory" as stated herein shall mean worldwide. 2. TERM. Unless sooner terminated under the provisions hereof, this Agreement shall commence on the Effective Date and continue for a period of one (1) year ("Term"). provided however, that the Parties may extend the Term for an additional year period by entering into an written addendum of the Agreement extending such term. 3. COMPENSATION. + + + + + +a. In consideration for the rights granted hereunder and for the promotional appearances provided herein, Bizzingo, subject to the other terms and conditions herein, agrees to pay to Theismann during the Term the royalty recited in Schedule A (the "Royalty"). In addition, concurrent with the execution hereof, Bizzingo will pay Theismann the Initial Bonus described in Schedule A. b. The Royalty owed Theismann shall be calculated on a quarterly calendar basis ("Royalty Period") commencing on the first (1st) day of June, September, December, and March, except that the first and last calendar quarters may be "short" depending on the effective date of this Agreement. Payment of the Royalty shall be made no later than 45 days after the termination of the preceding full calendar quarter. The foregoing notwithstanding, if this Agreement is terminated in accordance with the provisions herein during a Royalty Period, the Royalty shall be calculated up to and including the Termination Date and payment of the Royalty shall be made as provided herein. c. For each Royalty Period, Bizzingo shall provide Theismann with a written royalty statement in a form acceptable to Theismann certified by a duly authorized officer of Bizzingo. d. Theismann shall be responsible for all federal, state and local taxes related to the Royalty. + +2 + +Source: BIZZINGO, INC., 8-K, 3/22/2012 + + + + + + 4. PROMOTIONAL APPEARANCES. In addition to the other terms and conditions herein, during the Term, Theismann also will; + + Bizzingo recognizes that Theismann's schedule and will not schedule any such session or appearance at a time that would conflict with Theismann's current obligations. Following the execution of this Agreement, Theismann will provide Bizzingo with an availability schedule indicating black out and/or available dates and from time to time will endeavor to update such schedule. In this regard, Bizzingo agrees to provide Joseph Theismann with at least thirty (30) days' written notice of any photographic sessions or public appearances to permit Theismann to properly schedule the session or appearance. Bizzingo will pay all reasonable out of pocket expenses incurred by Theismann in connection with such session or appearance which expenses shall not exceed One Thousand Dollars ($1,000) per day unless Theismann receives prior written approval from Bizzingo. For any travel incurred by Theismann as part of his appearances, Bizzingo will provide first class air travel and hotel accommodations. 5. NOTICES AND PAYMENTS. Any notice, request, demand or other communication required or permitted hereunder shall be in writing and shall be deemed properly given when actually received or within fourteen (14) days of mailing by certified or registered mail, return receipt requested, postage prepaid, whichever first occurs, + + + + + +a. Make himself available for four (4) sessions for production of photographs, or radio, television, video or other multi-media programming for use in Bizzingo's advertising or promotional materials, with each such session not exceeding eight (8) hours. b. Make four (4) public appearance for the purpose of promoting the Network, which may include autograph sessions, dinner appearances, and/or other appearances not described in 4(a) above, with each such session not exceeding two (2) hours. + +to Theismann at: JRT Associates, Inc. 21495 Ridgetop Circle, Suite 304A Sterling, Virginia 20166 With a copy to: Eric V. Zimmerman, Esquire Miller Zimmerman, PLC 50 Catoctin Circle, Suite 201 Leesburg, Virginia 20176 to Bizzingo at: 63 Main Street Suite 202 Flemington, NJ 08822 + +3 + +Source: BIZZINGO, INC., 8-K, 3/22/2012 + + + + + + + + Either party may change its address for the purpose of this Agreement by giving notice to the other party in accordance herewith. 6. INSPECTION AND AUDIT. Theismann or his representatives, at his cost and expense, shall have the right, upon reasonable notice and during normal business hours, to inspect Bizzingo's books and records and all other documents and material in Bizzingo's possession or control with respect to the determination of Royalties payable hereunder. Theismann shall have free and full access thereto for such purposes and may make copies thereof. All books and records relative to Bizzingo's obligations hereunder shall be maintained and made accessible to Theismann for inspection at a location in the United States for at least one year after termination of this Agreement. 7. RESERVATION OF RIGHTS. (a). Except as stated herein, Theismann shall retain all rights in and to his name, his right of publicity, and the endorsement whether during the Term or any extension thereof. Notwithstanding the foregoing, during the term and for a period of one (1) year thereafter, Theismann shall not use, permit the use of, or license to others the Property in connection with the advertisement, promotion, and sale of any network or Internet service, including but limited to all computer/video games, CD-ROMs, and/or interactive video of any form, except for a pre-existing license by Theismann. Bizzingo and Theismann agree that they shall take all necessary steps during the Term to protect the endorsement in connection with the advertisement, promotion, and sale of the Network. (b). It is understood and agreed that Theismann shall retain all right, title, and interest in his likeness, name, and/or trademarks, where applicable, except as rights granted hereunder. (c). The parties agree to execute any documents reasonably requested by the other party to effect any of the above provisions. 8. RESTRICTED STOCK, RISK OF INVESTMENT, AND INVESTMENT INTENT. (a). Theismann acknowledges that the Royalty Warrant and Bonus Warrant and the shares of common stock of Bizzingo underlying such warrants are "restricted securities" as that term is defined under federal securities laws. In addition, any stock certificate representing such shares shall contain the restrictive legend set for on Schedule A may not be sold, transferred or hypothecated unless such transfer is pursuant to an effective registration statement or an exemption from such registration as verified by an opinion of counsel acceptable to Bizzingo. + + + + With a copy to: Daniel H. Luciano, Esq. 242A West Valley Brook Road Califon,NJ 07830 + +4 + +Source: BIZZINGO, INC., 8-K, 3/22/2012 + + + + + + (b). Theismann acknowledges and agrees that any investment in Bizzingo warrants and common stock involves substantial risks and that Theismann or his representative has had the opportunity to review fully the books, records and financial statements of Bizzingo along with the Quarterly, Annual and Periodic filings of Bizzingo on the Securities and Exchange Commission's EDGAR website (http://sec.gov/edgar/searchedgar/companvsearch.html) and has determined that Bizzingo common stock is a suitable investment and he can bear the risk associated with such investment. (c). Theismann represents and warrants to Bizzingo that he is acquiring such shares of Bizzingo common stock for investment purposes and not with a view towards distribution. 9. REPRESENTATIONS, WARRANTIES AND INDEMNITY. + + + + + +a. Theismann represents and warrants that, except as otherwise disclosed herein, he has not granted nor will he grant during the Term and for a period of one (1) year thereafter to any other party any right, permission, or license to use the Property in connection with the advertisement, sale, or promotion of the Network or in connection with networks that are identical or substantially similar to the Network. b. Theismann further represents and warrants to Bizzingo that he is the owner free and clear of the rights granted herein, and has the full right. power, legal capacity and authority to grant the rights herein. c. Theismann further represents and warrants that he has not misrepresented or concealed anything with respect to his or her background that may have a prejudicial effect on the value of the endorsement, that he is in good health and does not plan to retire during the Term of this Agreement, and that he or she has not engaged nor will he or she engage during the Term of this Agreement in any activity (criminal or otherwise) that could potentially have a negative impact on the Network. d. Bizzingo agrees to defend, indemnify, and hold Theismann harmless against all costs, expenses, and losses (including reasonable attorney fees and costs) incurred through claims of third parties against Theismann based on the manufacture or sale of the Network including, but not limited to, actions founded on network liability. In this regarding, within thirty (30) days from the execution of this Agreement, Bizzingo will secure an insurance policy with limits of $5,000,000 per event and $ 5,000,000 umbrella, naming Theismann as an additional insured, covering the losses and claims stated in this sub-paragraph d. e. Theismann agrees to defend, indemnify, and hold Bizzingo, and its officers, directors, agents, and employees, harmless against all costs, expenses, and losses (including reasonable attorney fees and costs) incurred through claims of third parties against Bizzingo based on a breach by Theismann of any representation and/or warranty made in this Agreement or with respect to any third-party claims for infringement involving the use of the Property by Bizzingo. + +5 + +Source: BIZZINGO, INC., 8-K, 3/22/2012 + + + + + + 10. TERMINATION. + + Upon termination of this Agreement as provided in this Section 10 (each a "Termination Date") or upon the expiration of the Term, Bizzingo shall cease using the Property in any way, and Theismann shall not be entitled to the Royalty, in each case from and after the Termination Date. 11. RELATIONSHIP OF THE PARTIES. Theismann's performance of services for Bizzingo hereunder is in his or her capacity as an independent contractor. Accordingly, nothing contained in this Agreement shall be construed as establishing an employer/employee, a partnership, or a joint venture relationship between Theismann and Bizzingo. + + + +a. Theismann shall have the right to terminate this Agreement upon thirty (30) days prior written notice to Bizzingo upon the occurrence of any of the following: i. Bizzingo is adjudicated insolvent, declares bankruptcy, or ii. Bizzingo fails to continue its business of selling the Network; provided, however, that nothing contained in this Agreement shall obligate Bizzingo to sell any specific quantities of Network during the Term; iii. Bizzingo fails to make payment to Theismann of any Royalties due pursuant to this Agreement within thirty (30) days after such due date; iv. Bizzingo fails to maintain the liability insurance as herein provided. b. Bizzingo shall have the right to terminate this Agreement upon thirty (30) days prior written notice to Theismann or his or her legal representative upon the occurrence of any of the following: i. Theismann engages in illegal, immoral, or criminal conduct resulting in a felony conviction; misrepresents or conceals anything in his or her background that could be detrimental to the value of the endorsement being made; engages in conduct contrary to the best interests of Bizzingo; engages in conduct that offends the sensitivities of a significant portion of the population; or engages in conduct that could bring Theismann into public disrepute; ii. Totally retires from the entertainment or sports industry; or iii. Upon Theismann's death. c. In addition to as stated in (a) or (b) above, either party may terminate this Agreement in the event of a breach of any provision of this Agreement by the other by providing thirty (30) days* prior written notice to the breaching party, provided that, during the 30- day period, the breaching party fails to cure such breach. d. Theismann shall have the right to terminate this Agreement at any time upon thirty (30) days' written notice to Bizzingo, such termination to become effective at the conclusion of such 30-day period. + +6 + +Source: BIZZINGO, INC., 8-K, 3/22/2012 + + + + + + 12. FORCE MAJEURE. Neither party will be liable for, or will be considered to be in breach of or default under this Agreement on account of, any delay or failure to perform as required by this Agreement as a result of any causes or conditions that are beyond such Party's reasonable control and that such Party is unable to overcome through the exercise of commercially reasonable diligence. If any force majeure event occurs, the affected Party will give prompt written notice to the other Party and will use commercially reasonable efforts to minimize the impact of the event. 13. JURISDICTION/DISPUTES. The Parties hereby agree that all disputes related to this Agreement shall be settled by arbitration pursuant to the rules and regulations of the American Arbitration Association. Parties all consent to the jurisdiction of such courts, agree to accept service of process by mail, and hereby waive any jurisdictional or venue defenses otherwise available to it 14. AGREEMENT BINDING ON SUCCESSORS. The provisions of the Agreement shall be binding upon and shall inure to the benefit of the Parties hereto, their heirs, administrators, successors and assigns. 15. ASSIGNABILITY. Neither party may assign this Agreement or the rights and obligations thereunder to any third party without the prior express written approval of the other party which shall not be unreasonably withheld. 16. WAIVER. No waiver by either party of any default shall be deemed as a waiver of prior or subsequent default of the same of other provisions of this Agreement. 17. SEVERABILITY. If any term, clause or provision hereof is held invalid or unenforceable by a court of competent jurisdiction, such invalidity shall not affect the validity or operation of any other term, clause or provision and such invalid term, clause or provision shall be deemed to be severed from the Agreement. 18. INTEGRATION. This Agreement constitutes the entire understanding of the Parties, and revokes and supersedes all prior agreements between the Parties and is intended as a final expression of their Agreement. It shall not be modified or amended except in writing signed by the Parties hereto and specifically referring to this Agreement. This Agreement shall take precedence over any other documents which may conflict with this Agreement. 19. CONFIDENTIALITY AND NON-DISPARAGEMENT AGREEMENT. Concurrent with the execution of this agreement, the parties will execute a mutually acceptable Confidentiality and Non-Disparagement Agreement. IN WITNESS WHEREOF, the Parties hereto, intending to be legally bound hereby, have each caused to be affixed hereto its or his/her hand on the day indicated above. + + + +7 + +Source: BIZZINGO, INC., 8-K, 3/22/2012 + + + + + + Theismann + + Bizzingo, Inc. + + + + + +Joseph Theismann + +Douglas Toth President + +8 + +Source: BIZZINGO, INC., 8-K, 3/22/2012 + + + + + + SCHEDULE A (Attached to and made a part of the Celebrity Endorsement Agreement dated March 14, 2012 by and between Bizzingo, Inc. and Joseph Theismann) I Background Bizzingo expects to populate its Network with Activated Users (as defined herein) through two distinct methods. Method 1. (a). Bizzingo will acquire basic business information for a prospective user of the Network, which will include all or part of the following; business name and address, telephone number, email address or website. This basic business information will be acquired through (i) arrangements with specific groups, clubs, networks, or associations, such as Chambers of Commerce, Universities, or trade organization, to acquire member information, or (ii) through purchase or license arrangements with content providers. In either case, once Bizzingo obtains information for a specific user, it will use that information to create or seed a separate user profile in its database for that prospective user ("Seeded Profile"). As of the date of this Agreement, Bizzingo has arrangements with content providers and associations to provide the basic business information for over 6,000,000 prospective users which will be seeded by Bizzingo. For clarification purposes, at this point in the process, a Seeded Profile is not an "Activated User." (b). In order to activate a Seeded Profile, Bizzingo will contact a prospective user informing them of the existence of their Seeded Profile on the Network, and the prospective user is then required to: (i) search and locate the Bizzingo database for its Seeded Profile and (ii) claim the Seeded Profile by editing or adding content to the Seeded Profile. Once the steps set forth in the immediately preceding sentence has been completed by a user, that user will be deemed to be an "Activated User" and the Network will identify that user as an Activated User. Method 2. A prospective user independently (from Method 1) may create its own user profile on the Network. This user will be deemed an Activated User and the Network will identify that user as an "Activated User." II Royalty and Initial Bonus 1. Royalty. The Royalty payable under the Agreement shall be in the form of one (1) common stock purchase warrant of Bizzingo (as further described herein) for each Activated User (as defined above) that occurs during a Royalty Period determined on the last day of each Royalty Period during the Term. It being the intent of the parties that no more than one (1) common stock purchase warrant shall be issued per Activated User, and by way of example, if on the last day of the first and second Royalty Periods, the Network has 500,000 and 1,500,000 Activated Users, respectively, Theismann shall receive 500,000 common stock purchase warrants for the first Royalty Period and an additional 1,000,000 common stock purchase warrants for the second Royalty Period. Each common stock purchase warrant shall enable Theismann to acquire one (1) share of common stock of Bizzingo at an exercise price of $0.15 per share during a term of five (5) years from the end of the applicable Royalty Period. The form of the warrant is attached hereto as Schedule A-l and shall be referred to as the "Royalty Warrant." + + + +9 + +Source: BIZZINGO, INC., 8-K, 3/22/2012 + + + + + + 2. Initial Bonus. Concurrent with the execution hereof, Bizzingo will issue Theismann, as a one time bonus, a common stock purchase warrant to purchase 1,000,000 shares of common stock of Bizzingo at a purchase price of $0.15 per share during a term of five (5) years. The form of warrant is attached hereto as Schedule A-II and shall be referred to as the "Bonus Warrant." 3. Restrictive Legend. The restricted legend for purposes of any certificate representing the Royalty Warrant and Bonus Warrant, and the stock certificate for shares underlying the Royalty Warrant or Bonus Warrant is as follows: + + + +The securities represented by this certificate have not been registered under the United States Securities Act of 1933, as amended (the "Act") or any state securities law. These shares have been acquired for investment and may not be offered for sale, hypothecated, sold or transferred, nor will any assignee or transferee thereof be recognized by the Company as having any interest in such shares, in the absence of(i) an effective registration statement with respect to the shares under the Act, and any other applicable state law, or (ii) an opinion of counsel satisfactory to the Company that such shares will be offered for sale, hypothecated, sold or transferred only in a transaction which is exempt under or is otherwise in compliance with the applicable securities laws. *** + +10 + +Source: BIZZINGO, INC., 8-K, 3/22/2012 + + + + + + + + + +Source: BIZZINGO, INC., 8-K, 3/22/2012 \ No newline at end of file diff --git a/full_contract_txt/BloomEnergyCorp_20180321_DRSA (on S-1)_EX-10_11240356_EX-10_Maintenance Agreement.txt b/full_contract_txt/BloomEnergyCorp_20180321_DRSA (on S-1)_EX-10_11240356_EX-10_Maintenance Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..cbfc49e2a1fb07b9d5a28f672e31a92eb4b8c2db --- /dev/null +++ b/full_contract_txt/BloomEnergyCorp_20180321_DRSA (on S-1)_EX-10_11240356_EX-10_Maintenance Agreement.txt @@ -0,0 +1,1105 @@ +Exhibit 10.14 + +EXECUTION VERSION + +[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + +MASTER OPERATION AND MAINTENANCE AGREEMENT + +by and between + +DIAMOND STATE GENERATION PARTNERS, LLC + +and + +BLOOM ENERGY CORPORATION + +dated as of April 13, 2012 + +Source: BLOOM ENERGY CORP, DRS/A (on S-1), 3/21/2018 + + + + + +TABLE OF CONTENTS Page + +ARTICLE 1 DEFINITIONS 2 + +Section 1.1 Definitions 2 Section 1.2 Other Definitional Provisions 11 + +ARTICLE 2 SYSTEM SERVICES 12 + +Section 2.1 In General 12 Section 2.2 Operation and Maintenance Services 12 Section 2.3 Service Fees 13 Section 2.4 System Services Warranty 13 Section 2.5 System Service Warranty Claims 13 Section 2.6 Performance Warranty 14 Section 2.7 Efficiency Warranty 14 Section 2.8 Gas Payment Shortfall 15 Section 2.9 Exclusions 15 Section 2.10 No Duplication of Terms 16 Section 2.11 Title 16 Section 2.12 Record-Keeping Documentation 16 Section 2.13 Remote Monitoring 17 Section 2.14 Permits 17 Section 2.15 Intentionally deleted 17 Section 2.16 Performance Standards 17 Section 2.17 Rights to Deliverables 18 Section 2.18 Appointment of Service Provider 18 Section 2.19 Operating Budget 18 + +ARTICLE 3 TERM 18 + +Section 3.1 Term 18 + +ARTICLE 4 TERMINATION 19 + +Section 4.1 Default 19 Section 4.2 Termination of Warranties 20 Section 4.3 Replacement of Agreement 20 + +ARTICLE 5 DATA ACCESS 21 + +Section 5.1 Access to Data and Meters 21 i + +Source: BLOOM ENERGY CORP, DRS/A (on S-1), 3/21/2018 + + + + + +ARTICLE 6 INDEMNITY 21 + +Section 6.1 Indemnification of Operator by Owner 21 Section 6.2 Indemnification of Owner by Operator 21 Section 6.3 Indemnity Claims Procedure 22 Section 6.4 No Duplication of Claims 22 + +ARTICLE 7 LIMITATIONS ON LIABILITY 22 + +Section 7.1 Aggregate Limit of Liability 22 Section 7.2 No Duplication of Claims 23 + +ARTICLE 8 REPRESENTATIONS AND WARRANTIES 24 + +Section 8.1 Representations and Warranties of Owner 24 Section 8.2 Representations and Warranties of Operator 25 + +ARTICLE 9 MISCELLANEOUS 26 + +Section 9.1 Amendment and Modification 26 Section 9.2 Waiver of Compliance; Consents 26 Section 9.3 Notices 27 Section 9.4 Assignment 27 Section 9.5 Dispute Resolution; Governing Law 27 Section 9.6 Governing Law, Jurisdiction, Venue 27 Section 9.7 Counterparts 28 Section 9.8 Interpretation 28 Section 9.9 Appendices and Exhibits 28 Section 9.10 Entire Agreement 28 Section 9.11 Construction of Agreement 28 Section 9.12 Severability 29 Section 9.13 Attorneys' Fees 29 Section 9.14 Further Assurances 29 Section 9.15 Independent Contractors 29 Section 9.16 No Contract for the Sale of Goods 29 Section 9.17 Time of Essence 29 Section 9.18 Confidentiality 29 Section 9.19 Force Majeure 31 Section 9.20 Right of Offset 31 Section 9.21 No Liens 31 Section 9.22 Insurance 31 + +Exhibit A Service Fees Exhibit B Efficiency Bank Operation Example Calculation ii + +Source: BLOOM ENERGY CORP, DRS/A (on S-1), 3/21/2018 + + + + + +Appendix A [Intentionally Omitted] Appendix B Minimum Power Product Example Calculation Appendix C Facilities Appendix D Power Performance Warranty Claim Example Calculation Appendix E Efficiency Warranty Claim Example Calculation Appendix F Gas Payment Shortfall Claim Example Calculation iii + +Source: BLOOM ENERGY CORP, DRS/A (on S-1), 3/21/2018 + + + + + +MASTER OPERATION AND MAINTENANCE AGREEMENT + +This MASTER OPERATION AND MAINTENANCE AGREEMENT (this "Agreement"), dated as of April 13, 2012, between BLOOM ENERGY CORPORATION, a Delaware corporation ("BE" or, in its capacity as operator hereunder, "Operator"), and DIAMOND STATE GENERATION PARTNERS, LLC, a Delaware limited liability company ("Owner") (each, a "Party", and together, the "Parties"), covers (i) the Portfolio of on-site solid oxide fuel cell power generating systems capable of being powered by renewable fuels, having an aggregate Nameplate Capacity of up to 30 MW (each a "Bloom System", and together the "Bloom Systems") and (ii) the BOF installed by BE pursuant to the MESPA, in each case to the extent set forth herein. + +WHEREAS, Owner is a company formed at the direction of BE for the purpose of purchasing and owning Bloom Systems for the generation of electricity and sale of electricity and capacity generated by the Bloom Systems into the PJM Grid; + +WHEREAS, the customer base of Delmarva Power & Light Company ("DPL"), an investor owned utility company regulated by the Delaware Public Service Commission ("DPSC"), will be subject to a charge to be collected on behalf of Owner by DPL under the REPS Act and the Tariffs, and DPL has agreed to provide natural gas service and to serve as the collection and disbursement agent of Owner pursuant to the Tariffs and the DPL Agreements; + +WHEREAS in 2011, Owner purchased from Operator pursuant to the December 30 Bill of Sale certain Bloom Systems and other parts and equipment to be incorporated into the Bloom Systems, and Owner presently owns such Bloom Systems and other parts and equipment; + +WHEREAS, Operator has entered into that certain Master Energy Server Purchase Agreement dated as of the date hereof (the "MESPA") with Owner, under the terms of which Owner will purchase additional Bloom Systems and the BOF from BE in order for Owner to provide electricity and capacity generated by the Bloom Systems into the PJM Grid; + +WHEREAS, pursuant to REPS Act Section 352(16), BE will be a "Qualified Fuel Cell Provider" ("QFCP"), and pursuant to the QFCP-RC Tariff, Owner will be a "QFCP Generator" ("QFCP Generator"), and pursuant to REPS Act Section 352(17) the Facilities shall constitute a "Qualified Fuel Cell Provider Project" ("Qualified Fuel Cell Provider Project"); and + +WHEREAS, Operator has agreed to provide certain operation and maintenance services to Owner subject to the conditions of this Agreement. + +Source: BLOOM ENERGY CORP, DRS/A (on S-1), 3/21/2018 + + + + + +NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows: + +AGREEMENT + +ARTICLE 1 DEFINITIONS + +Section 1.1 Definitions. As used in this Agreement, capitalized terms not otherwise defined shall have the meanings set forth below: + +"Actual kWh" means the actual energy output in kWh produced by each Bloom System and aggregated together. + +"Administrative Services Agreement" means the Administrative Services Agreement dated as of April 13, 2012 among BE, Owner and Diamond State Generation Holdings, LLC. + +"Affiliate" of any Person means a Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the Person specified. + +"Agreement" means this agreement. + +"Annual Reports" is defined in Section 2.12. + +"Base Case Model" is defined in the ECCA. + +"BE" is defined in the recitals. + +"Bloom System" or "Bloom Systems" is defined in the introductory paragraph hereof. + +"BOF" means, for each Site, the Electrical Interconnection Facilities, the natural gas supply facilities, the water supply facilities, the data communications facilities, the foundations for the Bloom Systems, and any other ancillary facilities and equipment installed in connection with the Facility at each Site. + +"BOF Work" is defined in the MESPA. + +"Business Day" means a day other than a Saturday, Sunday or other day on which banks in New York, New York, or San Francisco, California, are authorized or required to close. + +"Claiming Party" is defined in Section 9.19. + +"Code" means the Internal Revenue Code of 1986, as amended. + +"Commencement of Operations" means, with respect to any Bloom System, the completion and the performance of all of the following activities: + +(a) such Bloom System has been Placed in Service; 2 + +Source: BLOOM ENERGY CORP, DRS/A (on S-1), 3/21/2018 + + + + + +(b) such Bloom System (i) has been attached to the load at the Site and (ii) is performing at the Warranty Specifications (measured over a 24 hour period and not over the Look Back Period or on a Portfolio basis as referenced in the definition of Warranty Specifications; provided that for this purpose the percentage in "Minimum Power Product" shall be deemed to be 100% rather than 85%); + +(c) such Bloom System has satisfied the conditions precedent for "Facility Commercial Operation Date" and the "Initial Delivery Date" (each as defined in the QFCP-RC Tariff) and Operator has performed and successfully completed all necessary acts under the Interconnection Agreements (including performance testing) and has obtained written permission from the applicable Person granting Owner permission to interconnect with the PJM Grid pursuant thereto; + +(d) Operator shall have furnished a written certification from Operator addressed to Owner certifying, without any qualification, that Operator has installed such Bloom System in accordance with Performance Standards; and + +(e) Operator shall have furnished a written certification from the Independent Engineer addressed to Owner certifying, without any qualification, that (i) such Bloom System's commissioning has been successfully completed and (ii) such Bloom System has achieved commercial operation (and if such Bloom System is the first Bloom System installed at such Facility then the Independent Engineer must also certify, without qualification, that Operator has installed all BOF Work necessary for the operation of that Facility). + +"Company LLC Agreement" means the Amended and Restated Limited Liability Company Agreement of Diamond State Generation Holdings, LLC, dated as of April 13, 2012, between Clean Technologies II, LLC and Mehetia Inc. + +"Confidential Information" is defined in Section 9.18(a). + +"Credit Agreement" has the meaning set forth in the ECCA. + +"Credit Documents" has the meaning set forth in the ECCA. + +"DDOT" means the Delaware Department of Transportation. + +"DDOT Site Lease" means the Lease Agreement between DDOT and Owner dated as of July, 2011, as it may be amended to extend the term or otherwise. + +"December 30 Bill of Sale" means the Bill of Sale and Agreement, effective as of December 30, 2011, between BE and Owner pursuant to which Safe Harbor Systems and Safe Harbor Equipment were sold by BE to Owner for purposes of meeting the 5% safe harbor for Grant eligibility under the Guidance. 3 + +Source: BLOOM ENERGY CORP, DRS/A (on S-1), 3/21/2018 + + + + + +"Delivery Date" has the meaning provided in the MESPA. + +"DPL" has the meaning provided in the recitals. + +"DPL Agreements" means the service applications between Owner and DPL with respect to the REPS Act and the Tariffs, whereby DPL shall (a) serve as the agent for collection of amounts due from Owner (if any) and for disbursement of amounts due to Owner under the QFCP-RC Tariff and (b) sell to Owner natural gas under the Gas Tariff. + +"DPL Site Lease" means the Lease Agreement between DPL and Owner dated as of February 10, 2012. + +"DPSC" has the meaning provided in the recitals. + +"ECCA" means the Equity Capital Contribution Agreement with respect to Diamond State Generation Holdings, LLC, among Clean Technologies II, LLC, Diamond State Generation Holdings, LLC, Owner and Mehetia Inc., dated as of March 16, 2012. + +"Efficiency" means the quotient of E/F, where E = the electricity produced by the Portfolio, measured in BTUs (British Thermal Units) at a conversion rate of 3,412 BTUs per kWh, and F = the fuel consumed by the Portfolio, measured in BTUs on a Lower Heating Value basis. + +"Efficiency Bank" means "banked" volumes of natural gas which the Owner is permitted to accrue in a tracking account under the QFCP-RC Tariff Section C.(5) and which are available to offset any Efficiency Warranty shortfall. An example of the operation of the Efficiency Bank is attached as Exhibit B. + +"Efficiency Warranty" has the meaning provided in Section 2.7. + +"Efficiency Warranty Period" has the meaning provided in Section 2.7. + +"Electrical Interconnection Facilities" means the equipment and facilities required to safely and reliably interconnect a Facility to the PJM Grid or the transmission system of another Transmitting Utility in whose territory the Facility is located, as applicable, including the collection system between each Bloom System, transformers and all switching, metering, communications, control and safety equipment, including the facilities described in any applicable Interconnection Agreement. + +"Energy" means three-phase, 60-cycle alternating current electric energy constituting the Actual kWh. + +"Facility" means the Bloom Systems and the BOF at a Site. + +"Facility Meter" means the revenue quality electricity generation meter to be located at the metering point (the proposed location of which is to be identified in the Interconnection Agreement), which Facility Meter shall register all Energy produced by a Facility and delivered to the Interconnection Point. 4 + +Source: BLOOM ENERGY CORP, DRS/A (on S-1), 3/21/2018 + + + + + +"Facility Service Warranty" is defined in Section 2.4. + +"Facility Services" is defined in Section 2.1. + +"FERC" means the Federal Energy Regulatory Commission and any successor. + +"Force Majeure Event" means any event or circumstance that (a) prevents a Party from performing its obligations under this Agreement; (b) was not foreseeable by such Party; (c) was not within the reasonable control of, or the result of the negligence of such Party; and (d) such Party is unable to reasonably mitigate, avoid or cause to be avoided with the exercise of due diligence. It shall include failure or interruption of performance due to: an act of God, civil or military authority, war, civil disturbances, terrorist activities, fire, explosions, the elements, the gas supplier's failure to comply with gas delivery, quality or pressure requirements, the external power delivery system (a/k/a the grid) being out of the required specifications or total failure (a/k/a brownout or blackout), PJM or other electric grid curtailment, or failure of equipment not utilized by or under the control of the Party claiming the Force Majeure Event (or any Affiliate or subcontractor of such Party). Force Majeure Event does not include the lack of economic resources of a Party or Operator's failure to design and construct the Bloom Systems and the BOF so as to meet the respective warranties hereunder. + +"Gas Payment Shortfall" means the cost of natural gas, in any billing period under the QFCP-RC Tariff, for the quantity of natural gas used by the Owner that exceeds the quantity of natural gas that would have been utilized at the Target Heat Rate (as defined in the QFCP-RC Tariff) and the Efficiency Bank does not have a positive balance available to offset such excess. + +"Gas Tariff" means DPL's Service Classification "LVG-QFCP-RC" filed for gas service applicable to REPS Qualified Fuel Cell Provider Projects and approved by the DPSC in Order no. 8062 dated October 18, 2011, as adopted and supplemented by DPSC's Findings, Opinion and Order No. 8079, dated December 1, 2011. + +"Governmental Approvals" means (a) any authorizations, consents, approvals, licenses, rulings, permits, tariffs, rates, certifications, variances, orders, judgments, decrees by or with a relevant Governmental Authority and (b) any required notice to, any declaration of, or with, or any registration or filing by, or with, any relevant Governmental Authority. + +"Governmental Authority" means any foreign, federal, state, local or other governmental, regulatory or administrative agency, court, commission, department, board, or other governmental subdivision, legislature, rulemaking board, court, tribunal, arbitrating body or other governmental authority. + +"Grant" is defined in the Company LLC Agreement. 5 + +Source: BLOOM ENERGY CORP, DRS/A (on S-1), 3/21/2018 + + + + + +"Guidance" is defined in the ECCA. + +"Indemnifiable Loss" means any claim, demand, suit, loss, liability, damage, obligation, payment, cost or expense (including the cost and expense of any action, suit, proceeding, assessment, judgment, settlement or compromise relating thereto and reasonable attorneys' fees and reasonable disbursements in connection therewith). + +"Indemnified Party" is defined in Section 6.3. + +"Indemnifying Party" is defined in Section 6.3. + +"Independent Engineer" is defined in the MESPA. + +"Interconnection Agreement" means an agreement among Owner, DPL and/or PJM regarding interconnection of the Facility to the transmission or distribution system of the Transmitting Utility. + +"Interconnection Point" is defined in the QFCP-RC Tariff. + +"kW" means kilowatt. + +"kWh" means kilowatt-hour. + +"Legal Requirement" means any law, statute, act, decree, ordinance, rule, directive (to the extent having the force of law), tariff (including the Tariffs), order, treaty, code or regulation or any interpretation of any of the foregoing, as enacted, issued or promulgated by any Governmental Authority, including all amendments, modifications, extensions, replacements or re-enactments thereof, in each case applicable to or binding upon such Person or any of its properties or to which such Person or any of its property is subject. + +"Letter Agreement" means that certain Letter Agreement dated October 10, 2011 between Operator and the State of Delaware, as may be amended from time to time. + +"Liens" means any lien, security interest, mortgage, hypothecation, encumbrance or other restriction on title or property interest. + +"Look Back Period" means each calendar year following the Commencement of Operations for a Bloom System (or, in the case of the calendar year in which the Delivery Date for a Bloom System has occurred, the portion of such calendar year commencing on the date such Bloom System achieved Commencement of Operations), but excluding with respect to each relevant Bloom System any period during such calendar year when such Bloom System was (a) subject to a Force Majeure Event, (b) not delivering Energy to the PJM Grid because of a failure to perform by DPL under the DPL Agreements or PJM under the PJM Agreements, or (c) required to be disconnected from the PJM Grid or otherwise required not to deliver Energy to the PJM Grid as the result of a Legal Requirement or action by or a directive from the applicable electric utility or PJM with respect to such Bloom System (e.g., due to a grid event). 6 + +Source: BLOOM ENERGY CORP, DRS/A (on S-1), 3/21/2018 + + + + + +"Material Adverse Change" means a fact, event or circumstance that, alone or when taken with other events or conditions occurring or existing concurrently with such event or condition, (a) has or is reasonably expected to have a material adverse effect on the business, operations, condition (financial or otherwise), assets, liabilities, prospects, or properties of a Person; (b) has or is reasonably expected to have any material adverse effect on the validity or enforceability of this Agreement; (c) materially impairs or is reasonably expected to materially impair the ability of a Person to meet or perform its obligations under this Agreement; or (d) has or is reasonably expected to have any material adverse effect on a Person's rights under this Agreement. + +"Maximum Liability" means, with respect to Operator, the aggregate Residual Value of the Portfolio as of such date, and with respect to Owner, One Million Dollars ($1,000,000); provided that a reduction in the Maximum Liability of Operator shall never result in a requirement for Owner or any Owner Indemnitee to return any money to Operator. Maximum Liability will be determined on an aggregate basis between this Agreement and the MESPA. + +"MESPA" is defined in the Recitals to this Agreement. + +"Minimum Efficiency Level" means fifty percent (50%) Efficiency while a Bloom System is operating at Nameplate Capacity, measured over the Efficiency Warranty Period. + +"Minimum kWh" means the product of (x) the number of hours in the applicable Power Performance Warranty Period minus the number of hours for each Bloom System in the Portfolio as of the last day of the applicable Power Performance Warranty Period when each such Bloom System (i) was subject to a Force Majeure Event, (ii) was not delivering Energy to the PJM Grid because of a failure to perform by DPL under the DPL Agreements or PJM under the PJM Agreements, or (iii) was required to be disconnected from the grid or otherwise required not to deliver Energy to the PJM Grid as the result of a Legal Requirement or action by or a directive from the applicable electric utility or PJM with respect to such Bloom System (e.g., due to a grid event), and (y) the Minimum Power Product for the applicable Power Performance Warranty Period. + +"Minimum Power Product" means the aggregate Nameplate Capacity of the Bloom Systems in the Portfolio in kW for the applicable Power Performance Warranty Period multiplied by (1) eighty-five percent (85%) when this term is used for the One-Month Power Performance Warranty or (2) ninety-five percent (95%) when this term is used for the One-Year Power Performance Warranty. An example of a calculation of the Minimum Power Product is set forth in Appendix B. + +"MW" means megawatt. + +"MWh" means megawatt-hour. 7 + +Source: BLOOM ENERGY CORP, DRS/A (on S-1), 3/21/2018 + + + + + +"Nameplate Capacity" means the maximum rated output of a generator, prime mover, or other electric power production equipment under specific conditions designated by the manufacturer. + +"One-Month Power Performance Warranty Period" is defined in Section 2.6. + +"One-Year Power Performance Warranty Period" is defined in Section 2.6. + +"Operator" is defined in the introductory paragraph hereof. + +"Operator Indemnitee" is defined in Section 6.1. + +"Owner" is defined in the introductory paragraph hereof. + +"Owner Indemnitee" is defined in Section 6.2. + +"Owner's Lender" means any Person providing senior or subordinated construction, debt or equity financing or refinancing for or in connection with the development, construction, purchase, or installation of the Facility or any part thereof, including any equity and tax investor providing financing or refinancing in connection therewith, and any trustee or agent acting on their behalf, and any Person providing interest rate protection agreements to hedge any of the foregoing debt obligations. + +"Party" or "Parties" is defined in the introductory paragraph hereof. + +"Performance Standards" is defined in Section 2.16. + +"Permits" means all Governmental Approvals that are necessary under applicable Legal Requirements, this Agreement, or the MESPA to have been obtained at such time in light of the stage of development of the Portfolio to site, construct, test, operate, maintain, repair, lease, own or use each Facility as contemplated in this Agreement, the MESPA, or the ECCA, to sell electricity from the Portfolio or for a Party to enter into this Agreement or to consummate any transaction contemplated hereby, in each case in accordance with all applicable Legal Requirements. + +"Person" means any individual, partnership, limited liability company, joint venture, corporation, trust, unincorporated organization, or governmental entity or any department or agency thereof. + +"PJM" means PJM Interconnection, LLC, a regional transmission organization. + +"PJM Agreements" is defined in the QFCP-RC Tariff. + +"PJM Grid" means the system of transmission lines, distribution lines, and associated facilities that have been placed under PJM's operational control. 8 + +Source: BLOOM ENERGY CORP, DRS/A (on S-1), 3/21/2018 + + + + + +"Placed in Service" means, with respect to any Bloom System, the completion and performance of all of the following activities: (1) obtaining the necessary licenses and permits for the operation of such Bloom System and the sale of power generated by the Bloom System, (2) completion of critical tests necessary for the proper operation of such Bloom System, (3) synchronization of such Bloom System onto the electric distribution and transmission system of the relevant local utility and/or the PJM Grid and (4) the commencement of daily operation of such Bloom System. + +"Portfolio" means, on an aggregate basis, all Bloom Systems owned by Owner that were purchased pursuant to the MESPA or the December 30 Bill of Sale and that have achieved Commencement of Operations. + +"Portfolio Warranty" means the warranty provided for under Section 8.1 of the MESPA. + +"Power Performance Warranty" is defined in Section 2.6. + +"Power Performance Warranty Period" is defined in Section 2.6. + +"Prudent Electrical Practices" means those practices, methods, equipment, specifications and standards of safety and performance, as the same may change from time to time, as are commonly used by a significant portion of the grid-tied electrical generation industry operating in the United States as good, safe and prudent engineering practices in connection with the design, construction, operation, maintenance, repair and use of electrical and other equipment, facilities and improvements of such electrical generating facility, including any applicable practices, methods, acts, guidelines, standards and criteria of FERC, PJM, and all applicable Legal Requirements. + +"Purchase Order" is defined in the MESPA. + +"Purchase Price" is defined in the MESPA. + +"QFCP" is defined in the recitals. + +"QFCP Generator" is defined in the recitals. + +"QFCP-RC Tariff' means DPL's Service Classification "QFCP-RC" for REPS Qualified Fuel Cell Provider Projects as approved by the DPSC in Order no. 8062 dated October 18, 2011, as adopted and supplemented by DPSC's Findings, Opinion and Order No. 8079, dated December 1, 2011. + +"Qualified Fuel Cell Provider Project" is defined in the recitals. + +"Representatives" of a Party means such Party's authorized representatives, including its professional and financial advisors. 9 + +Source: BLOOM ENERGY CORP, DRS/A (on S-1), 3/21/2018 + + + + + +"REPS Act" means the Renewable Energy Portfolio Standards Act, as amended by S.B. 124, enacted July 10, 2011 (Title 26, Chap. 1, section 351 et seq. of the Code of the State of Delaware). + +"Residual Value" means, for any Bloom System, [***] of the Purchase Price for such Bloom System until [***], declining by [***] [***] on each anniversary of such date thereafter. (For example, on the fifth anniversary of Commencement of Operations, the Residual Value will be [***] of the Purchase Price). + +"Safe Harbor Equipment" means all parts and equipment to be used in Bloom Systems sold by BE to Owner pursuant to the December 30 Bill of Sale. + +"Safe Harbor Systems" means all Bloom Systems sold by BE to Owner pursuant to the December 30 Bill of Sale. + +"SCADA" means the supervisory control and data acquisition systems. + +"Section 8.2(b) Warranty" is defined in the MESPA. + +"Service Fees" is defined in Section 2.3. + +"Service Provider" means an operation and maintenance contractor appointed by Operator and approved by Owner pursuant to Section 2.18. + +"Service Technicians" is defined in Section 2.2(c). + +"Site" means, as applicable, (a) the parcel of land leased from DPL to Owner under the DPL Site Lease and all easements appurtenant, easements in gross, license agreements and other rights running in favor of Owner which provide access to the applicable Facility, or (b) the parcel of land leased from the DDOT to Owner under the DDOT Site Lease and all easements appurtenant, easements in gross, license agreements and other rights running in favor of Owner which provide access to the applicable Facility, in each case on which BE shall install a Facility pursuant to the MESPA. + +"Site Leases" means, collectively, the DPL Site Lease and the DDOT Site Lease. + +"Tariffs" means the QFCP-RC Tariff and the Gas Tariff. + +"Term" is defined in Section 3.1. + +"Third Party Claim" means any claim, action, or proceeding made or brought by any Person who is not (a) a Party to this Agreement, (b) an Affiliate of a Party to this Agreement or (c) Mehetia Inc. or an Affiliate of Mehetia Inc. (and that is not a claim based on breach by the Indemnified Party of its obligations under this Agreement). [***] Confidential Treatment Requested 10 + +Source: BLOOM ENERGY CORP, DRS/A (on S-1), 3/21/2018 + + + + + +"Training Materials" is defined in Section 2.17. + +"Transaction Documents" means this Agreement, the Company LLC Agreement, the ECCA, the MESPA and the Administrative Services Agreement. + +"Transmitting Utility" has the meaning set forth in the QFCP-RC Tariff. + +"Warranty Period" means, (i) for each Bloom System, the period beginning on the day following the date that the "Warranty Period" for such Bloom System under and as defined in the MESPA has expired and ending on the twenty-first (21st) anniversary of the date of Commencement of Operations for such Bloom System and (ii) for the BOF, the period beginning on the day following the date that the Section 8.2(b) Warranty for such BOF has expired and ending on the twenty-first (21st) anniversary of such starting date. + +"Warranty Specifications" means (a) that the Portfolio has (i) achieved the Minimum kWh as provided in Section 2.6 and (ii) performed at no less than the Minimum Efficiency Level as provided in Section 2.7 and (b) that Operator is in compliance with Section 2.8. + +Section 1.2 Other Definitional Provisions. + +(a) As used in this Agreement and in any certificate or other documents made or delivered pursuant hereto or thereto, financial and accounting terms not defined in this Agreement or in any such certificate or other document, and financial and accounting terms partly defined in this Agreement or in any such certificate or other document to the extent not defined, will have the respective meanings given to them under GAAP. To the extent that the definitions of financial and accounting terms in this Agreement or in any such certificate or other document are inconsistent with the meanings of such terms under GAAP, the definitions contained in this Agreement or in any such certificate or other document will control. + +(b) The words "hereof', "herein", "hereunder", and words of similar import when used in this Agreement will refer to this Agreement as a whole and not to any particular provision of this Agreement. Section references contained in this Agreement are references to Sections in this Agreement unless otherwise specified. The term "including" will mean "including without limitation". + +(c) The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such terms. + +(d) Any agreement, instrument or statute defined or referred to herein or in any instrument or certificate delivered in connection herewith means (unless otherwise indicated herein) such agreement, instrument or statute as from time to time amended, modified or supplemented and includes (in the case of agreements or instruments) references to all attachments thereto and instruments incorporated therein. + +(e) Any references to a Person are also to its permitted successors and assigns. 11 + +Source: BLOOM ENERGY CORP, DRS/A (on S-1), 3/21/2018 + + + + + +ARTICLE 2 FACILITY SERVICES + +Section 2.1 In General. During the Warranty Period, Operator shall provide services to Owner so that the Portfolio meets the Warranty Specifications and so that the BOF will not cause the Portfolio to fail to perform in accordance with the Warranty Specifications, as more fully set forth in this Article 2 (such services, collectively, the "Facility Services"). The Facilities covered under this Agreement are set forth in Appendix C hereto, which may be amended from time to time by written agreement between the Parties. + +Section 2.2 Operation and Maintenance Services. Operator is hereby granted the right and authority (and, to the extent necessary to carry out its functions hereunder, a limited power of attorney) and agrees, for the benefit of Owner, to operate safely and reliably the Facilities and to maintain during the Warranty Period in accordance with the terms of this Agreement each Facility in good condition and repair in accordance with the Warranty Specifications and Prudent Electrical Practices. During the Warranty Period, the specific responsibilities of Operator under this Agreement shall include the following: + +(a) Facility Operations. Operator shall ensure that all Facility components are operated and maintained in a manner designed to meet the Efficiency Warranty and the Power Performance Warranty with a goal of achieving the performance levels assumed in the Base Case Model (as defined in the Company LLC Agreement). + +(b) Facility Maintenance. Operator shall perform, or cause to be performed, all scheduled and unscheduled maintenance required on each Facility in order to meet the Warranty Specifications. In that regard, Operator's responsibilities hereunder shall include, without limitation, promptly correcting any Bloom System or BOF malfunctions, either by (i) recalibrating or resetting the malfunctioning Bloom System or BOF, or (ii) repairing or replacing Bloom System or BOF components which are defective, damaged, worn or otherwise in need of replacement. + +(c) Personnel. Operator shall ensure that all operations and maintenance functions contemplated by this Section are performed by technically competent and qualified personnel (the "Service Technicians"). Operator shall ensure that all Service Technicians: (i) participate in a maintenance training program and receive confirmation of having achieved the requisite level of proficiency for the tasks they are assigned to perform, and (ii) attend periodic "refresher" training programs. The Operator shall at all times retain an operations manager who shall be dedicated to the overall supervision and management of performance of its obligations under this Agreement. + +(d) Spare Parts. Operator shall establish and maintain an adequate spare parts inventory, to be located at one or both Sites to serve exclusively the Facilities. 12 + +Source: BLOOM ENERGY CORP, DRS/A (on S-1), 3/21/2018 + + + + + +(e) Programs and Procedures. Prior to the date of the Commencement of Operations for the first Bloom System in the Portfolio, Operator shall have adopted and implemented programs and procedures intended to ensure safe and reliable operation of the Facilities. + +The rights and obligations in this Section 2.2 are without duplication of the rights and obligations of Owner and Operator as Buyer and Seller under, and as defined in, the MESPA. + +Section 2.3 Service Fees. + +(a) Owner shall compensate Operator for the Facility Services for each Facility, on an annual basis at the rate specified in Exhibit A hereto (the "Service Fees"). With respect to each year of such Facility's Warranty Period, the Service Fees shall be invoiced not later than thirty (30) days prior to the end of the calendar month in which the anniversary of the date of Commencement of Operations for such Bloom System occurred, and shall be payable within thirty (30) days of invoice. Interest shall accrue daily on the Service Fees not paid when due, at the lesser of the monthly rate of one and five-tenths percent (1.5%) or the highest rate permissible by law on such unpaid balance. Operator shall be under no obligation to provide or perform services hereunder for any Bloom System whose Service Fee has not been paid in full for the then-current warranty year. + +(b) In connection with Facility Services for the BOF, Operator shall provide all required labor but shall charge Owner for, and Owner shall reimburse Operator for, the cost of all required spare parts. Billing for such spare parts shall be done in the same manner as Services Fees, as set forth in Section 2.3(a). + +Section 2.4 Facility Services Warranty. During the Warranty Period, Operator shall perform the services to the Bloom Systems and the BOF necessary for the Portfolio to perform to the Warranty Specifications (the "System Service Warranty"). In the event that Owner desires Operator to service the Bloom Systems and the BOF beyond the Warranty Period, the rate for such time-based services will be quoted by Operator to Owner quarterly for the following quarter, and materials will be invoiced at the retail prices for such materials. + +Section 2.5 Facility Service Warranty Claims. + +(a) If Owner desires to make a Facility Service Warranty claim during the Warranty Period, Owner must notify Operator of the defect or other basis for the claim in writing. + +(b) In the case of a claim relating to the Power Performance Warranty for a One-Month Power Performance Period or the Efficiency Warranty, upon receipt of such notice and verification by Operator that such One-Month Power Performance Warranty or Efficiency Warranty is applicable, Operator (or its designated subcontractor) or the Service Provider (or its designated subcontractor) will promptly repair or replace, at Operator's sole option and discretion, any Bloom System whose repair or replacement is required in order for the Portfolio to perform consistent with the Power Performance Warranty or the Efficiency Warranty, as applicable. Owner is hereby notified that refurbished parts may be used in repair or replacement, 13 + +Source: BLOOM ENERGY CORP, DRS/A (on S-1), 3/21/2018 + + + + + +but any such refurbished parts will have passed the same inspections and tests performed by Operator on its new parts of the same type before such refurbished parts are used in any repair. If such repair or replacement is not possible (as determined at Operator's sole option and discretion), Operator will refund the Purchase Price of any such Bloom System to Owner notwithstanding Section 7.1. in which case Operator shall be deemed to have taken title to such Bloom System, and such Bloom System shall be deemed to no longer constitute a portion of the Portfolio. Operator shall make such determination as promptly as practicable, but in any event within 90 days of Operator's receipt of notice of the claim unless the specific nature of the problem requires a longer period in which to make such determination. If it is determined that a Bloom System will be removed pursuant to this Section 2.5. Operator shall at its sole cost and expense remove the Bloom System and any other ancillary equipment (including the concrete pad and any other improvements to the Site to extent required under the Site Lease) from the Site, restoring the Site to its condition before the installation, including closing all utility connections in the manner required by all applicable Legal Requirement and Site Lease. + +(c) In the case of a claim relating to the Power Performance Warranty for a One-Year Power Performance Warranty Period, upon receipt of such notice and verification that such One-Year Power Performance Warranty is applicable, Operator shall make a payment to Owner in an amount to be calculated pursuant to Section 2.6; provided that the cumulative aggregate amount of Operator's liability for all claims under this Section 2.5(c) shall not exceed [***] of the aggregate Purchase Price of all Bloom Systems in the Portfolio during the applicable period and the purchase price under the December 30 Bill of Sale (inclusive of any amounts paid or for which a pending claim has been made under the Power Performance Warranty or the Section 8.2(b) Warranty, as applicable, under the MESPA). + +Section 2.6 Power Performance Warranty. During the Warranty Period, Operator shall determine (i) for each full calendar month (the "One- Month Power Performance Warranty Period") within five (5) Business Days after the end of such month and (ii) for the most recent Look Back Period (the "One-Year Power Performance Warranty Period", and, together with the One-Month Power Performance Warranty Period, each a "Power Performance Warranty Period"), whether the Bloom Systems in the Portfolio during such Power Performance Warranty Period have delivered to the Interconnection Point the Minimum kWh during such Power Performance Warranty Period (the "Power Performance Warranty"). If such Power Performance Warranty calculation indicates that the Actual kWh of the Bloom Systems was less than the Minimum kWh during such Power Performance Warranty Period, then Operator shall so notify Owner in writing of the basis of its determination and Owner may make a claim under Section 2.5. An example of a Power Performance Warranty calculation for purposes of a Section 2.5 claim is attached as Appendix D. + +Section 2.7 Efficiency Warranty. During the Warranty Period, Operator shall determine for each full calendar month (the "Efficiency Warranty Period") within five (5) Business Days after the end of such month whether the Portfolio has performed at the Minimum Efficiency Level (the "Efficiency Warranty"); provided that the Efficiency Bank shall be utilized to the extent necessary to meet the Efficiency Warranty. If the Minimum Efficiency Level has [***] Confidential Treatment Requested 14 + +Source: BLOOM ENERGY CORP, DRS/A (on S-1), 3/21/2018 + + + + + +not been met during such Efficiency Warranty Period, then Operator shall so notify Owner in writing of the basis of its determination and Owner may make a claim under Section 2.5. An example of an Efficiency Warranty calculation for purposes of a Section 2.5 claim is attached as Appendix E. + +Section 2.8 Gas Payment Shortfall. During the Warranty Period, Operator shall perform such services on the Bloom Systems as shall cause the Efficiency Bank to maintain a positive balance at all times. If the Efficiency Bank reaches a balance of less than zero during the Warranty Period, Operator shall reimburse Owner for any Gas Payment Shortfall that Owner incurs within ten (10) days after Owner provides notice to Operator of such shortfall amount; provided that Operator's cumulative aggregate liability under this Section 2.8 plus any payments required to be made by Operator under Section 2.5(c) shall not exceed an amount equal to (i) one hundred percent (100%) of the aggregate Purchase Price of all Bloom Systems in the Portfolio during the applicable period and the purchase price under the December 30 Bill of Sale (inclusive of any amounts paid or for which a pending claim has been made for under the Gas Payment Shortfall under the MESPA), less (ii) the aggregate of all amounts paid by Operator (or claimed against Operator in the case of any claims that are pending at the time of such calculation) with respect to claims under Section 2.5(c) hereunder or Sections 8.2(b) and 8.3(c) of the MESPA. An example of a Gas Payment Shortfall calculation for purposes of a Section 2.8 claim is attached as Appendix F. + +Section 2.9 Exclusions. The Facility Service Warranty shall not cover any obligations on the part of Operator caused by or arising from (a) Owner's (as opposed to Operator, Operator's Affiliate, the Service Provider or subcontractor acting as operator under this Agreement) failure to properly protect the Bloom Systems from vandalism or other third-party's actions or omissions, (b) Owner's (as opposed to Operator, Operator's Affiliate, the Service Provider or subcontractor acting as operator under this Agreement) failure to use the specified input fuel; (c) Owner's (as opposed to Operator, Operator's Affiliate, the Service Provider or subcontractor acting as operator under this Agreement) removal of any safety devices, (d) any conditions caused by unforeseeable movement in the environment in which the Bloom Systems are installed, (e) accidents, abuse, neglect, improper third party testing, vandalism, Force Majeure Events or acts of third parties, (f) DPL's failure to comply with Operator's gas delivery, quality or pressure requirements, (g) installation, operation, repair or modification of the Bloom Systems by anyone other than Operator or (h) any defect in construction materials or workmanship of the BOF or any deficiency in design of the BOF by BE, provided that the exclusions in this clause (h) shall not extend to any Portfolio Warranty claim to the extent caused by or arising from (A) any defect in construction materials or workmanship of the BOF or (B) any deficiency in design of the BOF by BE, in each case during the period while either the Section 8.2(b) Warranty or the warranty under Section 2.5(c) is in effect. OPERATOR SHALL HAVE NO OBLIGATION UNDER THE FACILITY SERVICE WARRANTY AND MAKES NO REPRESENTATION AS TO FACILITIES WHICH HAVE BEEN OPENED OR MODIFIED BY OWNER OR ANYONE OTHER THAN OPERATOR, OPERATOR'S AFFILIATE, THE SERVICE PROVIDER OR SUBCONTRACTOR, ACTING AS OPERATOR UNDER THIS AGREEMENT, ANY PERSON ACTING AS AN OPERATOR UNDER THIS AGREEMENT (OR ANY SUCCESSOR AGREEMENT TO THIS AGREEMENT) OR ANY OF SUCH PERSON'S REPRESENTATIVES. 15 + +Source: BLOOM ENERGY CORP, DRS/A (on S-1), 3/21/2018 + + + + + +Section 2.10 No Duplication of Terms. Notwithstanding anything to the contrary in this Agreement, to the extent that all or any portion of the Facility Service Warranty, a Gas Payment Shortfall payment or any other warranty, guarantee or indemnification provision set forth herein is duplicative of any warranty, guarantee or indemnification coverage provided under the MESPA, the Parties acknowledge and agree that Owner shall be entitled to make only a single claim under either this Agreement or the MESPA, as applicable, and that limitations of liability set forth in each such agreement are to be calculated on an aggregate basis taking into account all claims for indemnification, warranty or otherwise (if any) made under this Agreement and the MESPA. + +Section 2.11 Title. Title to all items, parts, materials and equipment supplied under or pursuant to this Agreement to Owner shall transfer to Owner upon installation or inclusion in a Facility. + +Section 2.12 Record-Keeping Documentation. + +(a) Operator shall ensure that operation, service and maintenance records concerning Operator's activities hereunder are properly created and maintained at all times. Such records shall include, but not be limited to, the following: + +(i) a separate "Maintenance Specification Log" for each Bloom System in a paper or electronic format (with entries made for each inspection, including any discrepancies found during such inspection), a copy of which shall be submitted, in paper or electronic format, to Owner along with the corresponding Annual Reports; + +(ii) a Site service report completed in respect of each inspection, repair, replacement, service or other activity or observation made by Operator in connection with its responsibilities hereunder, detailing the nature of the problems detected and the specifics of the problem resolution and submitted to Owner within ten (10) Business Days of the date when a service technician is dispatched to the site in response to a Bloom System or BOF fault or routine inspection or service; + +(iii) an annual report submitted to Owner within forty-five (45) Business Days after the end of each calendar year ("Annual Report") containing sufficient information, detail and documentation as may be requested by Owner relating to the operating performance of the Bloom System for the preceding calendar year; and + +(iv) all records and data that must be timely produced and turned over to (A) DPL pursuant the QFCP-RC Tariff (including without limitation, the Heat Rate calculations as set forth in QFCP-RC Tariff Section C., and monthly documentation of PJM Revenues as set forth in QFCP-RC Tariff Section H.) and the DPL Agreements, (B) PJM pursuant to the PJM Agreements or (C) the Owner's Lender pursuant to the Credit Documents; and 16 + +Source: BLOOM ENERGY CORP, DRS/A (on S-1), 3/21/2018 + + + + + +(v) such other reports and/or documentation prepared by Operator concerning its activities hereunder as may be reasonably required of an "Operator" of a Qualified Fuel Cell Project under the REPS Act and the QFCP-RC Tariff or as requested by Owner from time to time. + +(b) All such records required to be created and maintained pursuant to Section 2.12(a) shall be kept available at the Operator's office and made available for the Owner's inspection upon request at all reasonable times. Any documentation prepared by Operator during the Term for the purposes of this Agreement, excluding the Training Materials, shall be directly prepared for Owner's benefit and immediately become Owner's property. Any such documentation shall be stored by Operator on behalf of Owner until its final delivery to Owner. Operator may retain a copy of all records related to each Facility for future analysis. + +Section 2.13 Remote Monitoring. For purposes of determining when repair services are necessary, Operator shall monitor and evaluate the information gathered through remote monitoring of each Facility as well as the maintenance and inspection Site visits. + +Section 2.14 Permits. + +(a) Operator shall be responsible, at its sole cost and expense, for maintaining and complying with all Permits required to perform the Facility Services under this Agreement; + +(b) Owner agrees to cooperate with and assist Operator in obtaining all Permits. + +Section 2.15 Intentionally deleted. + +Section 2.16 Performance Standards. For the purpose of this Agreement, the Operator shall perform under this Agreement in accordance and consistent with each of the following (unless the context requires otherwise): (A) permitted plans and specifications applicable to each Facility; (B) the manufacturer's recommendations with respect to all equipment and all maintenance and operating manuals or service agreements, whenever furnished or entered into, including any subsequent amendments or replacements thereof, issued by the manufacturer, provided they are consistent with generally accepted practices in the fuel cell industry; (C) the requirements of all applicable insurance policies; (D) preserving all rights to any incentive payments, warranties, indemnities or other rights or remedies, and enforcing or assisting with the enforcement of the applicable warranties, making or assisting in making all claims with respect to all insurance policies; (E) all Legal Requirements and Permits/Governmental Approvals, (F) the PJM Agreements and the DPL Agreements; (G) any applicable provisions of the Site Leases, including any landlord rules and regulations, and (H) Prudent Electrical Practices (collectively, the "Performance Standards"); provided, however, that meeting these requirements shall not relieve Operator of its other obligations under this Agreement. 17 + +Source: BLOOM ENERGY CORP, DRS/A (on S-1), 3/21/2018 + + + + + +Section 2.17 Rights to Deliverables. Owner agrees that Operator shall retain all rights, title and interest, including intellectual property rights, in any Training Materials in connection with the services performed hereunder. Operator grants to Owner the limited right to use any Training Materials which are provided under this Agreement, and Owner agrees that upon termination of this Agreement for any reason, Owner shall return all Training Materials, including any copies, to Operator. Owner will not make copies nor will it permit its employees, contractors, affiliates, or representatives to make copies of any Training Materials without Operator's prior written consent. "Training Materials" means any and all materials, documentation, notebooks, forms, diagrams, manuals and other written materials and tangible objects, describing how to maintain the Facilities, including any corrections, improvements and enhancements thereto to the Bloom Systems which are delivered by Operator to Owner, but excluding any data and reports delivered to Owner. + +Section 2.18 Appointment of Service Provider. Operator may appoint an unrelated third party, who is appropriately qualified, licensed, and financially responsible, to operate and maintain the Facilities throughout the Term (a "Service Provider"). Operator shall submit such appointment of any Service Provider to Owner for its prior written approval, which approval shall not be unreasonably withheld or delayed, and if applicable, to PJM and/or DPL. No such appointment nor the approval thereof by Owner, however, shall relieve Operator of any liability, obligation, or responsibility resulting from a breach of this Agreement. + +Section 2.19 Operating Budget. Operator shall operate and maintain the Portfolio, or cause the Portfolio to be operated and maintained, within amounts for (a) any Operating Budget Category (as defined in the Credit Documents) that is applicable to the Facility Services not to exceed 110% (on a year-to-date basis) and (b) for all Operating Budget Categories (or such Operating Budget Categories applicable to the Facility Services) not to exceed 105% (on a year- to-date basis), in each case of the amounts budgeted therefor as set forth in the then-current Annual Operating Budget (as defined in the Credit Documents). + +ARTICLE 3 TERM + +Section 3.1 Term. The term of this Agreement (the "Term") (a) shall commence on the first day of the Warranty Period for the first Bloom System to achieve Commencement of Operation and (b) shall, unless terminated earlier under Section 4.1 of this Agreement or unless extended by mutual agreement of the Parties, terminate on the date that is the last day of the Warranty Period for the last Bloom System to achieve Commencement of Operation. 18 + +Source: BLOOM ENERGY CORP, DRS/A (on S-1), 3/21/2018 + + + + + +ARTICLE 4 TERMINATION + +Section 4.1 Default. + +(a) Operator Default. Any of the following shall constitute an "Operator Default": + +(i) If Operator: (a) admits in writing its inability to pay its debts generally as they become due; (b) files a petition or answer seeking reorganization or arrangement under the federal bankruptcy laws or any other applicable law or statute of the United States of America or any State, district or territory thereof; (c) makes an assignment for the benefit of creditors; (d) consents to the appointment of a receiver of the whole or any substantial part of its assets; (e) has a petition in bankruptcy filed against it, and such petition is not dismissed within ninety (90) days after the filing thereof; or if (f) a court of competent jurisdiction enters an order, judgment, or decree appointing a receiver of the whole or any substantial part of Operator's assets, and such order, judgment or decree is not vacated or set aside or stayed within ninety (90) days from the date of entry thereof; or (g) under the provisions of any other law for the relief or aid of debtors, any court of competent jurisdiction shall assume custody or control of the whole or any substantial part of Operator's assets and such custody or control is not terminated or stayed within ninety (90) days from the date of assumption of such custody or control; + +(ii) unless due to a Force Majeure Event, the failure of Operator to perform or cause to be performed any other obligation required to be performed by Operator under this Agreement, or the failure of any representation and warranty set forth herein to be true and correct in all material respects as and when made; provided, however, that if such failure by its nature can be cured, then Operator shall have a period of thirty (30) days after receipt of written notice of such failure to cure the same and a Operator Default shall not be deemed to exist during such period; provided, further, that if Operator commences to cure such failure during such period and is diligently and in good faith attempting to effect such cure, said period shall be extended for sixty (60) additional days; or + +(iii) a Force Majeure Event occurs which prevents Operator from performing its material obligations under this Agreement for a continuous period of at least one hundred eighty (180) days and Owner reasonably concludes such prevention is not reasonably likely to be remedied within a further period of one hundred eighty (180) days. + +(b) Owner Default. Any of the following shall constitute an "Owner Default": + +(i) The failure of Owner to pay any amounts owing to Operator on or before the day following the date on which such amounts are due and payable under the terms of this Agreement and Owner's failure to cure each such failure within ten (10) days after Owner receives written notice from Operator of each such failure; or + +(ii) unless due to a Force Majeure Event, the failure of Owner to perform or cause to be performed any other obligation required to be performed by Owner under this Agreement, or the failure of any representation and warranty set forth herein to be true and correct in all material respects as and when made; provided, however, that if such failure by its nature can be cured, then Owner shall have a period of thirty (30) days after receipt of written notice of such failure to cure the same and an Owner Default shall not 19 + +Source: BLOOM ENERGY CORP, DRS/A (on S-1), 3/21/2018 + + + + + +be deemed to exist during such period; provided, further, that if Owner commences to cure such failure during such period and is diligently and in good faith attempting to effect such cure, said period shall be extended for sixty (60) additional days. + +(c) Owner's Remedies Upon Occurrence of a Operator Default. If an Operator Default has occurred under Section 4.1(a)(i) or (a)(iii), Owner may terminate this Agreement by written notice, and assert all rights and remedies available to Owner under Legal Requirements subject to the limitations of liability set forth in Section 7.1. If an Operator Default has occurred under Section 4.1(a)(ii), Owner may terminate this Agreement only with respect to those Bloom Systems for which such Operator Default occurred (unless such Operator Default relates to ten (10) or more Bloom Systems, in which case Owner may terminate this Agreement with respect to all Bloom Systems) by written notice, and assert all rights and remedies available to Owner under Legal Requirements (other than the termination or suspension of this Agreement in its entirety, except where ten (10) or more Bloom Systems are involved), subject to the limitations of liability set forth in Section 7.1. + +(d) Operator's Remedies Upon Owner Default. + +(i) If an Owner Default has occurred under Section 4.1(b)(i) or (b)(ii), Operator may terminate this Agreement only with respect to those Bloom Systems for which such Owner Default occurred (unless such Owner Default relates to ten (10) or more Bloom Systems, in which case Operator may terminate this Agreement with respect to all Bloom Systems) by written notice, and assert all rights and remedies available to Operator under Legal Requirements (other than the termination or suspension of this Agreement in its entirety, except where ten (10) of more Bloom Systems are involved), subject to the limitations of liability set forth in Section 7.1. + +(e) Preservation of Rights. Termination of this Agreement shall not affect any rights or obligations as between the Parties which may have accrued prior to such termination or which expressly or by implication are intended to survive termination whether resulting from the event giving rise to termination or otherwise. + +Section 4.2 Termination of Warranties. Notwithstanding anything to the contrary in this Agreement or the MESPA, each of the Facility Service Warranty, the Efficiency Warranty, and the Power Performance Warranty shall terminate with respect to a Bloom System immediately upon termination of the Warranty Period for such Bloom System; provided that any claims under this Agreement that accrued before such termination shall survive such termination until the resolution of those claims. Operator shall be under no obligation for any Facility Service Warranty, Efficiency Warranty or Power Performance Warranty for a Bloom System during any period for which such Bloom System's Service Fees have not been paid in full. + +Section 4.3 Replacement of Agreement. Notwithstanding anything to the contrary in this Agreement and in furtherance of continuing qualification under the QFCP-RC Tariff, in the event of the early termination of this Agreement pursuant to Article 4 hereof, BE and Operator agree to use commercially reasonable efforts to cooperate with Owner to facilitate Owner 20 + +Source: BLOOM ENERGY CORP, DRS/A (on S-1), 3/21/2018 + + + + + +entering into a new agreement with a third party operator governing operation and maintenance services to be provided to Owner on terms substantially similar to the terms of this Agreement, so that such replacement Operator shall be deemed a QFCP. + +ARTICLE 5 DATA ACCESS + +Section 5.1 Access to Data and Meters. Throughout the Term, and thereafter to the extent relevant to calculations necessary for periods prior to the end of the Term and subject to any confidentiality obligation owed to any third party and/or any restrictions on the disclosure of information which may be subject to intellectual property rights restricting disclosure: + +(a) Owner shall grant Operator access to all data relating to the electricity production of each Bloom System, it being understood that it is Operator's responsibility to determine the performance of the Bloom System, and any other calculations as required under this Agreement, and that it is Owner's responsibility to handle all accounting and invoicing activities; and + +(b) Owner shall allow Operator access to all data from all Facility Meters. + +Operator shall be entitled to use the foregoing data for its internal purposes and make such data available to third parties for analysis. + +ARTICLE 6 INDEMNITY + +Section 6.1 Indemnification of Operator by Owner. Owner shall indemnify, defend and hold harmless Operator, its officers, directors, employees, shareholders, Affiliates and agents (each, a "Operator Indemnitee") from and against any and all Indemnifiable Losses asserted against or suffered by any Operator Indemnitee arising out of any Third Party Claims against a Operator Indemnitee to the extent arising out of or in connection with (i) Owner's breach of its representations, warranties or covenants in this Agreement, (ii) the negligent or intentional acts or omissions of Owner or its subcontractors, agents or employees or others under Owner's control or (iii) a breach by Owner of its obligations hereunder, provided that Owner shall have no obligation to indemnify Operator for any negligence, fraud or willful misconduct of any Operator Indemnitee or the breach by Operator of any Operator Indemnitee of its covenants and warranties under this Agreement or any other Transaction Document. + +Section 6.2 Indemnification of Owner by Operator. Operator shall indemnify, defend and hold harmless Owner, its members, managers, officers, directors, employees, Affiliates and agents (each, an "Owner Indemnitee") from and against any and all Indemnifiable Losses asserted against or suffered by any Owner Indemnitee arising out of any Third Party Claims against an Owner Indemnitee to the extent arising out of or in connection with (i) Operator's breach of its representations, warranties or covenants in this Agreement, (ii) the negligent or intentional acts or omissions of Operator or its subcontractors, agents or employees or others under Operator's control or (iii) a breach by Operator of its obligations hereunder; provided that 21 + +Source: BLOOM ENERGY CORP, DRS/A (on S-1), 3/21/2018 + + + + + +Operator shall have no obligation to indemnify Owner for any negligence, fraud or willful misconduct of any Owner Indemnitee, the breach by Owner of its covenants and warranties under this Agreement or the inability to utilize any tax benefits (for the avoidance of doubt, the Grant is not considered a tax benefit). + +Section 6.3 Indemnity Claims Procedure. If any indemnifiable claim is brought against a Party (the "Indemnified Party"), then the other Party (the "Indemnifying Party") shall be entitled to participate in, and, unless in the opinion of counsel for the Indemnifying Party a conflict of interest between the Parties may exist with respect to such claim, assume the defense of such claim, with counsel reasonably acceptable to the Indemnifying Party. If the Indemnifying Party does not assume the defense of the Indemnified Party, or if a conflict precludes the Indemnifying Party from assuming the defense, then the Indemnifying Party shall reimburse the Indemnified Party on a monthly basis for the Indemnified Party's defense through separate counsel of the Indemnified Party's choice. Even if the Indemnifying Party assumes the defense of the Indemnified Party with acceptable counsel, the Indemnifying Party, at its sole option, may participate in the defense, at its own expense, with counsel of its own choice without relieving the Indemnifying Party of any of its obligations hereunder. + +Section 6.4 No Duplication of Claims. Notwithstanding anything to the contrary in this Agreement, the Parties acknowledge and agree that no claiming or indemnified party shall be entitled to a double recovery under the indemnification provisions of this Agreement and the indemnification provisions of the MESPA. + +ARTICLE 7 LIMITATIONS ON LIABILITY + +Section 7.1 Aggregate Limit of Liability. + +(a) Notwithstanding anything to the contrary in this Agreement, in no event shall a Party be liable to the other Party for an aggregate amount in excess of the Maximum Liability; provided that such limitation of liability shall not apply to any liability that is the result of (i) gross negligence, fraud or willful misconduct of a Party, (ii) a Third Party Claim, (iii) the failure to pay the Service Fees (which amount shall not be included in calculating Owner's Maximum Liability), (iv) a claim of Owner against BE or Operator in the event of any breach, default or misrepresentation of any representation and warranty or covenant set forth in Section 8.2(e) or (v) a claim of Owner against BE or Operator under Section 2.8. Subject always to the Maximum Liability limitations set forth in the preceding sentence, except for damages specifically provided for in this Agreement or in connection with the indemnification for damages awarded to a third party under a Third Party Claim, damages hereunder are limited to direct damages, and in no event shall a Party be liable to the other Party, and the Parties hereby waive claims, for (a) indirect, punitive, special or consequential damages or loss of profits; provided, however, that the loss of profits language set forth in this Section 7.1 shall not be interpreted to exclude from Indemnifiable Losses any claim, demand, suit, loss, liability, damage, obligation, payment, cost or expense (including the cost and expense of any action, suit, proceeding, assessment, judgment, settlement or compromise relating thereto and reasonable attorneys' fees and reasonable 22 + +Source: BLOOM ENERGY CORP, DRS/A (on S-1), 3/21/2018 + + + + + +disbursements in connection therewith) that would otherwise be included in the definition of Indemnifiable Losses because they result from a reduction in the profits of Owner, Diamond State Generation Holdings, LLC, or both, and (b) losses or liabilities incurred by the officers, directors, members, managers, partners, shareholders or Affiliates of such Party (unless on behalf of Owner). + +(b) Notwithstanding anything to the contrary provided herein, in no event shall Operator be liable under this Agreement (including with respect to its obligations related to the Facility Service Warranty, the Power Performance Warranty or Warranty Specification) for (i) any failure of or damage to the Bloom System or (ii) any obligations on the part of Operator (including internal rate of return or other financial metrics or any obligations to deliver power to Owner or service the Bloom System) caused by or arising from (A) Owner's (as opposed to Operator or Operator's Affiliate or subcontractor acting as operator under this Agreement) failure to properly protect the Bloom Systems from vandalism or other third- party's actions or omissions, (B) Owner's (as opposed to Operator or Operator's Affiliate or subcontractor acting as operator under this Agreement) failure to use the specified input fuel; (C) Owner's (as opposed to Operator or Operator's Affiliate or subcontractor acting as operator under this Agreement) removal of any safety devices, (D) Force Majeure Events, (E) installation, operation, repair or modification of the Bloom Systems by anyone other than Operator or Operator's authorized agents or Owner's operator acting pursuant to a operating and maintenance agreement provided such operator is acting in accordance with Prudent Electrical Practices and information or materials supplied by Operator or its Affiliates, or (F) any defect in construction materials or workmanship of the BOF or any deficiency in design of the BOF by BE, provided that the exclusions in this clause (F) shall not extend to any warranty claim to the extent caused by or arising from (1) any defect in construction materials or workmanship of the BOF or (2) any deficiency in design of the BOF by BE, in each case during the period while the MESPA Section 8.2(b) Warranty is in effect. OPERATOR SHALL NOT BE RESPONSIBLE FOR DAMAGE TO BLOOM SYSTEMS OR THEIR COMPONENTS DUE TO THEIR OPENING OR MODIFICATION BY OWNER OR ANYONE OTHER THAN OPERATOR, OPERATOR'S AFFILIATE, THE SERVICE PROVIDER OR SUBCONTRACTOR, ACTING AS OPERATOR UNDER THIS AGREEMENT, ANY PERSON ACTING AS AN OPERATOR UNDER THIS AGREEMENT (OR ANY SUCCESSOR AGREEMENT TO THIS AGREEMENT) OR ANY OF SUCH PERSON'S REPRESENTATIVES. Except for Owner's payment of money to Operator, and subject to Section 9.19 hereof, neither Party shall be liable under any circumstance, nor be deemed to be in breach of this Agreement, for any delay or failure in performance or interruption of service resulting from any Force Majeure Event, or any other cause or causes which are beyond such Party's reasonable control. + +Section 7.2 No Duplication of Claims. Notwithstanding anything to the contrary in this Agreement, the Parties acknowledge and agree that the limitations of liability set forth in this Agreement and the MESPA are to be calculated on an aggregate basis taking into account all claims (if any) made under this Agreement and the MESPA. 23 + +Source: BLOOM ENERGY CORP, DRS/A (on S-1), 3/21/2018 + + + + + +ARTICLE 8 REPRESENTATIONS AND WARRANTIES + +Section 8.1 Representations and Warranties of Owner. Owner represents and warrants to Operator as follows: + +(a) Organization. Owner is a limited liability company duly formed, validly existing and in good standing under the laws of the State of Delaware and has all requisite limited liability company power and authority to own, lease, and operate its business as currently conducted. + +(b) Authority. Owner has full limited liability company power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. The execution and delivery by Owner of this Agreement and the consummation by Owner of the transactions contemplated hereby have been duly and validly authorized by all necessary limited liability company action required on the part of Owner and this Agreement has been duly and validly executed and delivered by Owner. This Agreement constitutes the legal, valid and binding agreement of Owner, enforceable against Owner in accordance with its terms, except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors' rights generally and by general principles of equity (regardless of whether considered in a proceeding in equity or at law). + +(c) Consents and Approvals: No Violation. Neither the execution, delivery and performance by Owner of this Agreement nor the consummation by Owner of the transactions contemplated hereby will (i) conflict with or result in any breach of any provision of the Certificate of Formation or the limited liability company agreement of Owner, or (ii) result in a default (or give rise to any right of termination, cancellation or acceleration) under any of the terms, conditions or provisions of any note, bond, mortgage, indenture, material agreement or other instrument or obligation to which Owner is a party or by which any of its assets are bound, except for such defaults (or rights of termination, cancellation or acceleration) as to which requisite waivers or consents have been obtained or (iii) constitute violations of any law, regulation, order, judgment or decree applicable to Owner. + +(d) Legal Proceedings. There are no pending or, to Owner's knowledge, threatened claims, disputes, governmental investigations, suits, actions (including non-judicial real or personal property foreclosure actions), arbitrations, legal, administrative or other proceedings of any nature, domestic or foreign, criminal or civil, at law or in equity, by or against or otherwise affecting Owner which challenges the enforceability of this Agreement or the ability of Owner to consummate the transactions contemplated hereby. + +(e) DISCLAIMERS. EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS SECTION 8.1 AND THE OTHER TRANSACTION DOCUMENTS, OWNER EXPRESSLY DISCLAIMS ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND OR NATURE, EXPRESS OR IMPLIED, AS TO THE TRANSACTIONS CONTEMPLATED UNDER THIS AGREEMENT. 24 + +Source: BLOOM ENERGY CORP, DRS/A (on S-1), 3/21/2018 + + + + + +Section 8.2 Representations and Warranties of Operator. Operator represents and warrants to Owner as follows: + +(a) Incorporation; Qualification. Operator is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware and has all requisite corporate power and authority to own, lease, and operate its business as currently conducted. Operator is duly qualified to do business as a foreign corporation and is in good standing under the laws of each jurisdiction that its business, as currently being conducted, shall require it to be so qualified, except where the failure to be so qualified would not have a material adverse effect on Operator's ability to perform its obligations under this Agreement. + +(b) Authority. Operator has full corporate power and authority to execute and deliver this Agreement and to consummate the transactions contemplated thereby. The execution and delivery by Operator of this Agreement and the consummation by Operator of the transactions contemplated thereby have been duly and validly authorized by all necessary corporate action required on the part of Operator and this Agreement have been duly and validly executed and delivered by Operator. This Agreement constitutes the legal, valid and binding agreement of Operator, enforceable against Operator in accordance with its terms, except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors' rights generally and by general principles of equity (regardless of whether considered in a proceeding in equity or at law). + +(c) Consents and Approvals; No Violation. Neither the execution, delivery and performance of this Agreement nor the consummation by Operator of the transactions contemplated thereby will (i) conflict with or result in any breach of any provision of the certificate of incorporation or bylaws of Operator, (ii) with or without the giving of notice or lapse of time or both, conflict with, result in any violation or breach of, constitute a default under, result in any right to accelerate, result in the creation of any Lien on Operator's assets, or create any right of termination under the conditions or provisions of any note, bond, mortgage, indenture, material agreement or other instrument or obligation to which Operator is a party or by which it, or any material part of its assets may be bound, in each case that would individually or in the aggregate result in a Material Adverse Change with respect to Operator; or (iii) constitute violations of any law, regulation, order, judgment or decree applicable to Operator, which violations, individually or in the aggregate, would result in a Material Adverse Change with respect to Operator. + +(d) Legal Proceedings. There are no pending or, to Operator's knowledge, threatened claims, disputes, governmental investigations, suits, actions (including non-judicial real or personal property foreclosure actions), arbitrations, legal, administrative or other proceedings of any nature, domestic or foreign, criminal or civil, at law or in equity, by or against or otherwise affecting Operator which challenges the enforceability of this Agreement or the ability of Operator to consummate the transactions contemplated thereby. 25 + +Source: BLOOM ENERGY CORP, DRS/A (on S-1), 3/21/2018 + + + + + +(e) QFCP Tariff. Operator represents and warrants to Owner that, during the Term, the Portfolio shall not fail to receive full payment and service under the Tariffs for any of the following reasons: + +(i) Operator shall not remain a Qualified Fuel Cell Provider throughout the original term of the QFCP Tariff. + +(ii) Operator shall take any action which causes or is likely to cause: (i) Owner not to qualify (or lose qualification) for service under the QFCP Tariff or (ii) the Portfolio not to qualify (or lose qualification) as a Qualified Fuel Cell Project. + +(iii) Operator shall have not complied with any of its obligations under the Letter Agreement (including, if so required by the State of Delaware, posting the security referred to in the Letter Agreement upon or prior to the Commencement of Operation of the first Bloom System). + +(f) DISCLAIMERS. EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS SECTION 8.2 AND THE OTHER TRANSACTION DOCUMENTS, OPERATOR EXPRESSLY DISCLAIMS ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND OR NATURE, EXPRESS OR IMPLIED, AS TO THE TRANSACTIONS CONTEMPLATED UNDER THIS AGREEMENT. + +ARTICLE 9 MISCELLANEOUS + +Section 9.1 Amendment and Modification. This Agreement may be amended, modified or supplemented only by written agreement of Owner and Operator. To the extent that this Agreement must be modified in order to maintain service under the Tariffs, the Parties shall exercise their commercially reasonable efforts to amend the Agreement to continue such service. + +Section 9.2 Waiver of Compliance; Consents. Except as otherwise provided in this Agreement, any failure of any of the Parties to comply with any obligation, covenant, agreement or condition herein may be waived by the Party entitled to the benefits thereof only by a written instrument signed by the Party granting such waiver, but any such waiver of such obligation, covenant, agreement or condition shall not operate as a waiver of, or estoppel with respect to, any subsequent failure to comply therewith. 26 + +Source: BLOOM ENERGY CORP, DRS/A (on S-1), 3/21/2018 + + + + + +Section 9.3 Notices. All notices and other communications hereunder shall be in writing and shall be deemed given when received if delivered personally or by facsimile transmission with completed transmission acknowledgment, or when delivered or when delivery is refused if mailed by overnight delivery via a nationally recognized courier or registered or certified first class mail (return receipt requested), postage prepaid, to the recipient Party at its below address (or at such other address or facsimile number for a Party as shall be specified by like notice; provided; however, that notices of a change of address shall be effective only upon receipt thereof): To Operator: Bloom Energy Corporation 1299 Orleans Drive Sunnyvale, CA 94089-1137 Attention: [***] Telephone: [***] Fax: [***] Email: [***] + +To Owner: Diamond State Generation Partners, LLC c/o Bloom Energy Corporation 1299 Orleans Drive Sunnyvale, CA 94089-1137 Attention: [***] Telephone: [***] Fax: [***] + +Section 9.4 Assignment. This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns (including by operation of law), but neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any Party, whether by operation of law or otherwise, without the prior written consent of the other Party; provided that either Party may collaterally assign its rights under this Agreement to any party providing debt or equity financing to such Party without the consent of the other Party. Notwithstanding the foregoing sentence, Operator shall be entitled to assign its right, title and interest in and to this Agreement to an Affiliate under common ownership with Operator; provided that such assignment will not disqualify or otherwise impair either the Owner or the Portfolio from receiving service under the QFCP-RC Tariff. + +Section 9.5 Dispute Resolution: Governing Law. In the event a dispute, controversy or claim arises hereunder, including any claim whether in contract, tort (including negligence), strict product liability or otherwise, the aggrieved Party will promptly provide written notification of the dispute to the other Party within ten (10) days after such dispute arises. Thereafter, a meeting shall be held promptly between the Parties, attended by representatives of the Parties with decision-making authority regarding the dispute, to attempt in good faith to negotiate a resolution of the dispute. If the Parties are not successful in resolving a dispute within twenty-one (21) days, then, subject to the limitations on remedies set forth in Section 4.1 and Article 7, either Party may pursue whatever rights it has available under this Agreement, at law or in equity. + +Section 9.6 Governing Law, Jurisdiction, Venue. THIS AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES (OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW). THE PARTIES HEREBY IRREVOCABLY SUBMIT TO THE EXCLUSIVE JURISDICTION + +[***] Confidential Treatment Requested 27 + +Source: BLOOM ENERGY CORP, DRS/A (on S-1), 3/21/2018 + + + + + +OF ANY STATE OR FEDERAL COURT IN NEW YORK COUNTY, NEW YORK WITH RESPECT TO ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT. EACH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING RELATING TO A DISPUTE AND FOR ANY COUNTERCLAIM WITH RESPECT THERETO. + +Section 9.7 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Signatures delivered by facsimile will be considered original signatures, and each Party shall thereafter promptly deliver original signatures to the other Party. + +Section 9.8 Interpretation. The articles, section and schedule headings contained in this Agreement are solely for the purpose of reference, are not part of the agreement of the Parties and shall not in any way affect the meaning or interpretation of this Agreement. + +Section 9.9 Appendices and Exhibits. Except as otherwise provided in this Agreement, all exhibits and appendices referred to herein are intended to be and hereby are specifically made a part of this Agreement. + +Section 9.10 Entire Agreement. + +(a) This Agreement, the MESPA and the exhibits, schedules, documents, certificates and instruments referred to herein and therein, embody the entire agreement and understanding of the Parties in respect of the transactions contemplated by this Agreement. + +(b) Each Party acknowledges that, in agreeing to enter into this Agreement, it has not relied on any representation, warranty, collateral contract or other assurance (except those repeated in this Agreement and any other agreement entered into on the date of this Agreement between the Parties) made by or on behalf of any other Party at any time before the signature of this Agreement. Each Party waives all rights and remedies which, but for this clause (b), might otherwise be available to it in respect of any such representation, warranty, collateral contract or other assurance. + +Section 9.11 Construction of Agreement. The terms and provisions of this Agreement represent the results of negotiations between Owner and Operator, each of which has been represented by counsel of its own choosing, and neither of which has acted under duress or compulsion, whether legal, economic or otherwise. Accordingly, the terms and provisions of this Agreement shall be interpreted and construed in accordance with their usual and customary meanings, and Owner and Operator hereby waive the application in connection with the interpretation and construction of this Agreement of any rule of law to the effect that ambiguous or conflicting terms or provisions contained in this Agreement shall be interpreted or construed against the Party whose attorney prepared the executed draft or any earlier draft of this Agreement. 28 + +Source: BLOOM ENERGY CORP, DRS/A (on S-1), 3/21/2018 + + + + + +Section 9.12 Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any Party. + +Section 9.13 Attorneys' Fees. If any action or proceeding to enforce this Agreement or any provision hereof is brought by any Party, the prevailing Party shall be entitled to recover from the non prevailing Party its attorneys' fees and its costs and expenses of suit, including actual attorneys' and consultants' fees. In the event that any Party secures a judgment in any proceeding brought to enforce or interpret this Agreement, then any cost of expense incurred in enforcing or in successfully appealing from such judgment, including actual attorneys' fees shall be paid by the Party against whom such judgment has been rendered or against whom an appeal is won, and shall be recoverable separately from and in addition to any other amount included in such judgment. + +Section 9.14 Further Assurances. Each Party agrees to execute and deliver such additional documents and instruments and to perform such additional acts as may be necessary or appropriate to effectuate, carry out and perform all of the terms, provisions, and conditions of this Agreement and the transactions contemplated by this Agreement. + +Section 9.15 Independent Contractors. The Parties acknowledge that, save as expressly set out in this Agreement to the contrary, each Party is entering into this Agreement as an independent contractor and nothing in this Agreement shall be interpreted or applied so as to make the relationship of any of the Parties that of partners, joint ventures or anything other than independent contractors. + +Section 9.16 No Contract for the Sale of Goods. Both Parties agree that this Agreement relates predominantly to the rendition of services accompanied only by the incidental sale of parts for the Bloom Systems; and therefore, this Agreement is not subject to the Delaware Uniform Commercial Code or any other commercial code for the sale of goods. The Parties expressly disclaim, to the extent permitted under applicable law, any and all provisions of the Uniform Commercial Code of any state or other applicable law relating to the commercial sale of goods. + +Section 9.17 Time of Essence. Time is of the essence with respect to all matters contained in this Agreement. + +Section 9.18 Confidentiality. + +(a) Confidential Information. Subject to the other terms of this Section 9.18. the Parties shall, and shall cause their Affiliates and their respective stockholders, members, Subsidiaries and Representatives to, hold confidential all information they may have or obtain concerning Operator and Owner and their respective assets, business, operations or prospects or this Agreement (the "Confidential Information"), including, but not limited to, all software, 29 + +Source: BLOOM ENERGY CORP, DRS/A (on S-1), 3/21/2018 + + + + + +documentation, financial, marketing and nonpublic PJM Grid data and other business information, all data related to the internal design and performance of the Bloom Systems and any other material or information that is either marked as confidential or disclosed under circumstances that one would reasonably expect it to be confidential. Furthermore, Owner agrees that the Bloom Systems and services performed hereunder contain Operator's valuable trade secrets, and further, Owner agrees to maintain the secrecy of and not disclose without the express written permission of Operator any trade secrets which Owner may have received from Operator; provided, however, that Confidential Information shall not include information that (A) is or becomes generally available to the public other than as a result of a disclosure by a Party or any of its Representatives or (B) is or becomes available to a Party or any of its Representatives on a nonconfidential basis prior to its disclosure by the other Party or its Representatives. + +(b) Legally Compelled Disclosure. Confidential Information may be disclosed (A) as required or requested to be disclosed by a Party or any of its Affiliates or their respective stockholders, members, subsidiaries or Representatives as a result of any applicable Legal Requirement or rule or regulation of any stock exchange, the Financial Industry Regulatory Authority, Inc. or other regulatory authority or self-regulatory authority having jurisdiction over such Party, (B) as required or requested by the IRS, the Department of Justice or the Office of the Inspector General in connection with a Grant, or tax credits relating thereto, including in connection with a request for any private letter ruling, any determination letter or any audit, or (C) as reasonably required by the DPL Agreements, the PJM Agreements or the Tariffs. If a Party becomes compelled by legal or administrative process to disclose any Confidential Information, such Party shall, to the extent permitted by Legal Requirements, provide the other Party with prompt notice so that the other Party may seek a protective order or other appropriate remedy or waive compliance with the non-disclosure provisions of this Section 9.18(b) with respect to the information required to be disclosed. If such protective order or other remedy is not obtained, or such other Party waive compliance with the non-disclosure provisions of this Section 9.18(b) with respect to the information required to be disclosed, the first Party shall furnish only that portion of such information that it is advised, by opinion of counsel, is legally required to be furnished and shall exercise reasonable efforts, at the expense of the Party whose Confidential Information is being disclosed, to obtain reliable assurance that confidential treatment will be accorded such information, including, in the case of disclosures to the IRS described in clause (B) above, to obtain reliable assurance that, to the maximum extent permitted by applicable Legal Requirements, such information will not be made available for public inspection pursuant to Section 6110 of the Code. + +(c) Disclosure to Representatives. Notwithstanding the foregoing, a Party may disclose Confidential Information received by it to its actual or potential financing parties and its and their employees, consultants, legal counsel or agents who have a need to know such information; provided that such Party informs each such Person who has access to the Confidential Information of the confidential nature of such Confidential Information, the terms of this Agreement, and that such terms apply to them. The Parties shall use commercially reasonable efforts to ensure that each such Person complies with the terms of this Agreement and that any Confidential Information received by such Person is kept confidential. 30 + +Source: BLOOM ENERGY CORP, DRS/A (on S-1), 3/21/2018 + + + + + +(d) Other Permitted Disclosures. Nothing herein shall be construed as prohibiting a Party from using such Confidential Information in connection with (i) any claim against another Party and (ii) any exercise by a Party of any of its rights hereunder, (iii) a financing or proposed financing by Operator or Owner or their Affiliates; (iv) a disposition or proposed disposition by Operator or any Affiliate of Operator of all or a portion of such Person's direct or indirect equity interest in Operator and (v) a disposition or proposed disposition by any direct or indirect Affiliate of Owner of all or a portion of such Person's equity interests in Owner; provided that, in the case of items (iii), (iv) and (v), the potential purchaser has entered into a confidentiality agreement with respect to Confidential Information on customary terms used in confidentiality agreements in connection with corporate acquisitions before any such information may be disclosed and such confidentiality agreement has been provided to the non-disclosing Party. + +Section 9.19 Force Majeure. If either Party is rendered wholly or partially unable to perform any of its obligations under this Agreement by reason of a Force Majeure Event, that Party (the "Claiming Party") will be excused from whatever performance is affected by the Force Majeure Event to the extent so affected; provided, however, that: (i) the Claiming Party, within a reasonable time after the occurrence of such Force Majeure Event gives the other Party notice describing the particulars of the occurrence; (ii) the suspension of performance shall be of no greater scope and of no longer duration than is reasonably required by the Force Majeure Event; (iii) no liability of either Party for an event that arose before the occurrence of the Force Majeure Event shall be excused as a result of the Force Majeure Event; (iv) the Claiming Party shall exercise commercially reasonable efforts to correct or cure the event or condition excusing performance and resume performance of all its obligations; and (v) when the Claiming Party is able to resume performance of its obligations under this Agreement, the Claiming Party shall promptly give the other Party notice to that effect and shall promptly resume performance. + +Section 9.20 Right of Offset. Owner at its sole option is hereby authorized to setoff any amounts owed Owner under the MESPA or this Agreement, as applicable, against any amounts owed by Owner to Operator under the MESPA or this Agreement. The rights provided by this paragraph are in addition to and not in limitation of any other right or remedy (including any right to set-off, counterclaim, or otherwise withhold payment) to which a Owner may be entitled (whether by operation of law, contract or otherwise). + +Section 9.21 No Liens. To the extent that Operator has actual knowledge that any of its subcontractors has placed any Lien on a Bloom System or the Site for such Bloom System, then Operator shall promptly cause such Liens to be removed or bonded over in a manner reasonably satisfactory to Owner. + +Section 9.22 Insurance. At all times during the Term without cost to Owner, Operator shall maintain in force the following insurance, which insurance shall not be subject to cancellation, termination or other material adverse changes unless the insurer delivers to Owner 31 + +Source: BLOOM ENERGY CORP, DRS/A (on S-1), 3/21/2018 + + + + + +written notice of the cancellation, termination or change at least thirty (30) days in advance of the effective date of the cancellation, termination or material adverse change: + +(a) Worker's Compensation Insurance as required by the laws of the state where Operator's facilities are located; + +(b) Employer's liability insurance with limits not less than One Million Dollars ($1,000,000); and + +(c) Commercial General Liability Insurance, including bodily injury and property damage liability including premises operations, contractual liability endorsements, products liability and completed operations with limits not less than Five Million Dollars ($5,000,000). + +Operator shall cause Owner (and such additional parties as Owner designates in writing) to be named additional insured(s), must be written as primary policy not contributing to or in excess of any policies carried by the Owner, and each contain a waiver of subrogation endorsement, in form and substance reasonably satisfactory to the Owner, in favor of the Owner. + +[Signatures follow on next page] 32 + +Source: BLOOM ENERGY CORP, DRS/A (on S-1), 3/21/2018 + + + + + +IN WITNESS WHEREOF, the Parties have executed this Master Operation and Maintenance Agreement as of the date first above written. + +BLOOM ENERGY CORPORATION + +By: Name: Title: + +[Signature Page to the Master Operation and Maintenance Agreement] + +Source: BLOOM ENERGY CORP, DRS/A (on S-1), 3/21/2018 + + + + + +DIAMOND STATE GENERATION PARTNERS, LLC + +By: Name: William E Brockenborough Title: Vice President + +[Signature Page to the Master Operation and Maintenance Agreement] + +Source: BLOOM ENERGY CORP, DRS/A (on S-1), 3/21/2018 + + + + + +EXHIBIT A to + +MASTER OPERATION AND MAINTENANCE AGREEMENT + +SERVICE FEES + +Exhibit A-1 + +Source: BLOOM ENERGY CORP, DRS/A (on S-1), 3/21/2018 + + + + + +MOMA + +Exhibit A + +Service Fees + +Period + +Rate Per kW (nameplate) Per Year + +Equivalent Rate Per kWh Year 1 [***] [***] Year 2 [***] [***] Year 3 [***] [***] Year 4 [***] [***] Year 5 [***] [***] Year 6 [***] [***] Year 7 [***] [***] Year 8 [***] [***] Year 9 [***] [***] Year 10 [***] [***] Year 11 [***] [***] Year 12 [***] [***] Year 13 [***] [***] Year 14 [***] [***] Year 15 [***] [***] Year 16 [***] [***] Year 17 [***] [***] Year 18 [***] [***] Year 19 [***] [***] Year 20 [***] [***] Year 21 [***] [***] [***] Confidential Treatment Requested + +Source: BLOOM ENERGY CORP, DRS/A (on S-1), 3/21/2018 + + + + + +EXHIBIT B to + +MASTER OPERATION AND MAINTENANCE AGREEMENT + +EFFICIENCY BANK OPERATION EXAMPLE CALCULATION + +Exhibit B-1 + +Source: BLOOM ENERGY CORP, DRS/A (on S-1), 3/21/2018 + + + + + +Efficiency Bank -MOMA + +Exhibit B + +Efficiency Bank Operation Example Calculation 2014 Assumptions Number of active Systems 150 Nameplate capacity 200 Hours in the year 8760 Look back period 30 Days BTUs/kWh 3,412 LHV to HHV conversion 1.107 Actual power performance 96% + +One-Month Efficiency analysis One-Month Efficiency Warranty 50% Actual system efficiency 56% + +Maximum MMbtu 156,643 Actual MMbtu 139,860 MMbtu to be drawn from Efficiency Bank — MMbtu to be deposited into Efficiency Bank 16,783 + +Efficiency Bank beginning balance 104,429 Change 16,783 Efficiency Bank ending balance [***] [***] Confidential Treatment Requested + +Source: BLOOM ENERGY CORP, DRS/A (on S-1), 3/21/2018 + + + + + +APPENDIX A to + +MASTER OPERATION AND MAINTENANCE AGREEMENT BLOOM SYSTEMS + +[Intentionally Omitted] Appendix A-1 + +Source: BLOOM ENERGY CORP, DRS/A (on S-1), 3/21/2018 + + + + + +APPENDIX B to + +MASTER OPERATION AND MAINTENANCE AGREEMENT + +Minimum Power Product Example Calculation Appendix B-1 + +Source: BLOOM ENERGY CORP, DRS/A (on S-1), 3/21/2018 + + + + + +Minimum Power Product - MOMA + +MOMA + +Appendix B + +Sample One-Month Minimum Power Product Example Calculation 2014 Assumptions Number of active Systems 150 Nameplate capacity 200kW One-Month Power Performance Warranty 85% + +Minimum Power Product Analysis + +Minimum Power Product 25,500kW + +Source: BLOOM ENERGY CORP, DRS/A (on S-1), 3/21/2018 + + + + + +Minimum Power Product - MOMA + +MOMA + +Appendix B + +Sample One-Year Minimum Power Product Example Calculation 2014 Assumptions Number of active Systems 150 Nameplate capacity 200kW One-Year Power Performance Warranty 95% + +One-Year Minimum Power Product Analysis + +Minimum Power Product 28,500kW + +Source: BLOOM ENERGY CORP, DRS/A (on S-1), 3/21/2018 + + + + + +APPENDIX C to + +MASTER OPERATION AND MAINTENANCE AGREEMENT + +Facilities1 + +All Bloom Systems now or hereafter purchased under the MESPA from and after the date such Bloom Systems are purchased, and including without limitation those Bloom Systems detailed in the chart below from time to time, together with the BOF installed in connection with each such Bloom System at each Site. Serial No. Site Location Bloom System Capacity Brookside 3MW Total IOM-5700-00076 0.2MW PWM-5700-00416-SH PWM-5700-00417-SH PWM-5700-00418-SH PWM-5700-00419-SH PWM-5700-00420-SH PWM-5700-00421-SH IOM-5700-00077 0.2MW PWM-5700-00422-SH PWM-5700-00423-SH PWM-5700-00424-SH PWM-5700-00425-SH PWM-5700-00426-SH PWM-5700-00427-SH IOM-5700-00078 0.2MW PWM-5700-00428-SH PWM-5700-00429-SH PWM-5700-00430-SH 1 Includes Safe Harbor Systems, Bloom Systems to be ordered and delivered in Q2 2012. + +Source: BLOOM ENERGY CORP, DRS/A (on S-1), 3/21/2018 + + + + + +PWM-5700-00431-SH PWM-5700-00432-SH PWM-5700-00433-SH TBD - Brookside 4 0.2MW TBD - Brookside 5 0.2MW TBD - Brookside 6 0.2MW TBD - Brookside 7 0.2MW TBD - Brookside 8 0.2MW TBD - Brookside 9 0.2MW TBD - Brookside 10 0.2MW TBD - Brookside 11 0.2MW TBD - Brookside 12 0.2MW TBD - Brookside 13 0.2MW TBD - Brookside 14 0.2MW TBD - Brookside 15 0.2MW + +Red Lion 5.8MW Total IOM-5700-00079 0.2MW PWM-5700-00434-SH PWM-5700-00435-SH PWM-5700-00436-SH PWM-5700-00437-SH PWM-5700-00438-SH PWM-5700-00439-SH IOM-5700-00080 0.2MW PWM-5700-00440-SH PWM-5700-00441-SH PWM-5700-00442-SH PWM-5700-00443-SH PWM-5700-00444-SH PWM-5700-00445-SH Delaware001 0.2MW + +Red Lion 2.8MW Total Delaware002 0.2MW 2 + +Source: BLOOM ENERGY CORP, DRS/A (on S-1), 3/21/2018 + + + + + +Red Lion 7.2MW Total Delaware003 0.2MW Delaware004 0.2MW + +Red Lion 11.2MW Total Delaware005 0.2MW Delaware006 0.2MW Delaware007 0.2MW 3 + +Source: BLOOM ENERGY CORP, DRS/A (on S-1), 3/21/2018 + + + + + +APPENDIX D to + +OPERATION AND MAINTENANCE AGREEMENT + +Power Performance Warranty Claim Example Calculation Appendix D-1 + +Source: BLOOM ENERGY CORP, DRS/A (on S-1), 3/21/2018 + + + + + +Performance - MOMA + +MOMA + +Appendix D + +Sample One-Month Power Performance Warranty Claim Example Calculation 2014 Assumptions Number of active Systems 150 Nameplate capacity 200 Hours in the year 8760 Look back period 30 Days + +One-Month Power Performance Warranty analysis One-Month Power Performance Warranty 85% Actual system output 80% + +Minimum kWh 18,360,000 Actual kWh 17,280,000 Underperformance (kWh) 1,080,000 + +Source: BLOOM ENERGY CORP, DRS/A (on S-1), 3/21/2018 + + + + + +Performance - MOMA + +Appendix D + +Sample One-Year Power Performance Warranty Claim Example Calculation 2015 Assumptions Number of active Systems 150 Nameplate capacity 200 Hours in the year 8760 Look back period 365 Days Project COE - Applicable QFCP-RC Tariff disbursement rate $ [***] /kWh + +One-Year Power Performance Warranty analysis One-Year Power Performance Warranty 95% Actual system output 80% + +Minimum kWh 249,660,000 Actual kWh 210,240,000 Underperformance (kWh) 39,420,000 + +Power Performance Warranty Payment $ [***] [***] Confidential Treatment Requested + +Source: BLOOM ENERGY CORP, DRS/A (on S-1), 3/21/2018 + + + + + +APPENDIX E to + +OPERATION AND MAINTENANCE AGREEMENT + +Efficiency Warranty Claim Example Calculation Appendix E-1 + +Source: BLOOM ENERGY CORP, DRS/A (on S-1), 3/21/2018 + + + + + +Efficiency - MOMA MOMA + +Appendix E + +Sample One-Month Efficiency Warranty Claim Example Calculation 2014 Assumptions Number of active Systems 150 Nameplate capacity 200 Hours in the year 8760 Look back period 30 Days BTUs/kWh 3,412 LHV to HHV conversion 1.107 Actual power performance 96% + +One-Month Efficiency analysis One-Month Efficiency Warranty 50% Actual system efficiency 48% + +Maximum MMbtu 156,643 Actual MMbtu 163,170 MMbtu to be drawn from Efficiency Bank (6,527) MMbtu to be deposited into Efficiency Bank — + +Efficiency Bank beginning balance 104,429 Change (6,527) Efficiency Bank ending balance [***] [***] Confidential Treatment Requested + +Source: BLOOM ENERGY CORP, DRS/A (on S-1), 3/21/2018 + + + + + +APPENDIX F to + +OPERATION AND MAINTENANCE AGREEMENT + +Gas Payment Shortfall Claim Example Calculation Appendix F-1 + +Source: BLOOM ENERGY CORP, DRS/A (on S-1), 3/21/2018 + + + + + +Gas Payment - MOMA + +Appendix F + +Sample Gas Payment Shortfall Claim Example Calculation 2015 Assumptions Number of active Systems 150 Nameplate capacity 200 Hours in the year 8760 Look back period 30 Days BTUs/kWh 3,412 LHV to HHV conversion 1.107 Actual power performance 96% Cost of gas - Price charged under Gas Tariff for relevant period $ [***] /MMbtu + +Gas Shortfall analysis One-Month Efficiency Warranty 50% Actual system efficiency 40% + +Maximum MMbtu 156,643 Actual MMbtu 195,804 MMbtu to be drawn from Efficiency Bank (39,161) MMbtu to be deposited into Efficiency Bank — + +Efficiency Bank beginning balance 30,000 Change (39,161) Efficiency Bank shortfall (9,161) + +Gas Shortfall payment $ [***] [***] Confidential Treatment Requested + +Source: BLOOM ENERGY CORP, DRS/A (on S-1), 3/21/2018 \ No newline at end of file diff --git a/full_contract_txt/BravatekSolutionsInc_20170418_8-K_EX-10.1_10205739_EX-10.1_Reseller Agreement.txt b/full_contract_txt/BravatekSolutionsInc_20170418_8-K_EX-10.1_10205739_EX-10.1_Reseller Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..5812bb3ebedea6a37c21882c6b73905b3d5729e8 --- /dev/null +++ b/full_contract_txt/BravatekSolutionsInc_20170418_8-K_EX-10.1_10205739_EX-10.1_Reseller Agreement.txt @@ -0,0 +1,79 @@ +EXHIBIT 10.1 RESELLER AGREEMENT THIS RESELLER AGREEMENT (this "Agreement") is made and entered into effect the 7th day of April, 2017 ("Effective Date"), by and between i3 Integrative Creative Solutions, LLC ("i3 ICS"), a Virginia limited liability company, having its offices at 6564 Loisdale Court Suite 1010B, Springfield, VA 22150 ("Reseller") and the company set forth below ("Company") (each, individually, a "party" and collectively, "parties"): Company: Bravatek Solutions, Inc. (BVTK) Telephone: 1-866-490-8590 + +Address:2028 E. Ben White Blvd., Suite 240-2835 Fax: N/A + +Austin, Texas 78741 E-mail: tom.cellucci@bravatek.com + +Territory: US Federal Government Civilian and Military Agencies/Customers in the U.S. Agreement Term: 1 Year + +Company Products: cybersecurity email software/telecom services Other Terms (not applicable if blank): + +Pricing: Reseller will obtain pricing quote from Company for each opportunity. Contract is renewable for 1 year extension by amendment to this agreement. Either Party may terminate this agreement for non-cause with a sixty (60) written notice. The parties agree as follows: 1. Definitions. a. "Company" shall have the meaning assigned in the preamble. b. "Company Products" shall have the meaning assigned in the preamble. c. "Effective Date" shall have the meaning assigned in the preamble. d. "Marks" shall have the meaning assigned in Section 7. e. "Net Revenue" shall mean gross receipts collected by Company or Reseller from the distribution of Company Products, [less third party commissions, equipment sales, delivery costs, taxes, refunds, and credits. f. "Proprietary Information" shall have the meaning assigned in Section 11. g. "Registered Referral" shall mean a Named Account (i) for which "Reseller" identifies & creates the opportunity, provides Sales Assistance (as defined below), and (ii) which leads to a direct sale with the "Company". Registered Referrals may fall into two categories: Sales executed by the "Company", and via a third party's prime contract. h. "Sales Assistance" shall mean (i) introductions to and scheduling meetings with key executives at the Named Account (e.g., CxO, Vice President of Infrastructure and Vice President of Application Development), and (ii) generating and delivering proposals and providing other marketing and sales support necessary to close the opportunity and obtain an order from the Named Account. 1 + +Source: BRAVATEK SOLUTIONS, INC., 8-K, 4/18/2017 + + + + + + i. "Registered Opportunity" shall mean a Named Account (i) for which "Reseller" identifies & creates the opportunity, and (ii) the "Reseller" purchases directly from the "Company" at a discount and sells to the customer. j. "Fulfillment Transaction" shall mean a sale through the Reseller's contract vehicle to a Federal Agency entity that is not a Registered Referral or Registered Opportunity k. "Referral Fee" shall have the meaning assigned in Exhibit B. l. "Reseller" shall have the meaning assigned in the preamble. m. "Territory" shall have the meaning assigned in the preamble. 2. General Scope. Company develops or provides Company Products and desires that Reseller promote and solicit commitments to buy Company Products in the Territory. 3. Reseller Activity. Reseller shall have the right to solicit orders for Company Products within the Territory. In its activities under this Agreement, Reseller shall use the then-current names for the Company Products and any sales or marketing documentation or forms provided by Company. 4. Company Obligations. Company shall provide Reseller with the support described in Exhibit B. Company shall comply with good business practices and all applicable laws and regulations. During the term of this Agreement, Company shall notify reseller of any changes, modifications or the discontinuation of any of the Company Products within thirty (30) days. Company shall make reasonable accommodations for any ongoing sales or existing sales. 5. Exclusivity on Registered Referrals and Opportunities. During the Term hereof and for a period of six (6) months following the termination of this Agreement or the discontinuation of any of the Company Products, (i) the Reseller shall have the exclusive right to commission for any Registered Referrals, (ii) the Company shall not market, promote, sell, or distribute Company Products or solicit or procure orders for the Company Products, or for any product(s) or service(s) similar to the Company Products, in the Territory other than through the Reseller and pursuant to this Agreement, except with the prior written consent of the Reseller, and (iii) without limitation to the foregoing, the Company shall not, directly or through other parties (whether agents, representatives, intermediaries, resellers or other parties), market, promote, sell, distribute, solicit or procure orders to any existing or prospective customer of the Reseller. 6. Compensation. In the event that Reseller (i) refers a Registered Referral to Company, through delivery to Company of the lead form attached hereto as Exhibit A, and (ii) such Registered Referral executes an agreement to purchase any of such Company Products or services, then Company shall pay Reseller a Referral Fee, as specified in Exhibit B attached hereto. Referral Fees will be paid within thirty (30) days of the collection of receivables from the Registered Referral. In the event an opportunity is requested and the government elects to use a different contract vehicle as described in 1g, reseller will still receive Referral Fee outlined in exhibit B. 2 + +Source: BRAVATEK SOLUTIONS, INC., 8-K, 4/18/2017 + + + + + + 7. Trademarks, Trade Names and Other Designations. Subject to the terms of this Agreement, Company grants Reseller the right to use and display the Company trademarks, tradenames and other designations of source, and proprietary notices, slogans, designs and distinct advertising as may appear on any documentation or other material with respect to Product ("Marks") with prior approval, that will not be unreasonable withheld. 8. Warranty Disclaimer. RESELLER SHALL MAKE NO REPRESENTATION, GUARANTEE, OR WARRANTY CONCERNING THE COMPANY PRODUCT EXCEPT AS EXPRESSLY AUTHORIZED IN ADVANCE BY COMPANY IN WRITING. TO THE EXTENT THE RESELLER HAS COMPLIED WITH THE OBLIGATIONS SET FORTH IN THIS SECTION, THE COMPANY SHALL INDEMNIFY AND HOLD HARMLESS THE RESELLER FOR ANY AND ALL LOSSES SUFFERED BY THE RESELLER OR ITS AFFILIATES (WHETHER DIRECTLY OR IN CONNECTION WITH A CLAIM BY A THIRD PARTY) AS A RESULT OF OR IN CONNECTION WITH THE COMPANY PRODUCTS. ADDITIONALLY, THE RESELLER SHALL INDEMNIFY AND HOLD HARMLESS THE COMPANY FOR ANY AND ALL LOSSES SUFFERED BY THE COMPANY OR ITS AFFILIATES (WHETHER DIRECTLY OR IN CONNECTION WITH A CLAIM BY A THIRD PARTY) AS A RESULT OF OR IN CONNECTION WITH THE RESELLER'S ACTIVITIES. 9. Relationship of Parties. The parties hereto expressly understand and agree that each party is an independent contractor in the performance of each and every part of this Agreement. 10. Termination. a. Unless terminated earlier as provided herein, this Agreement shall have the Term set forth above (which commences on the Effective Date). b. This Agreement may be terminated by Reseller for cause immediately upon the occurrence of any of the following events: (i) if the use or sale of Company Products are enjoined due to any claim of infringement of any U.S. patent or copyright or of any misappropriation of trade secrets; (ii) if Company ceases to do business, or otherwise terminates its business operations; or (iii) if Company breaches any provision of this Agreement and fails to fully cure such breach within fifteen (15) business days of written notice from Reseller describing the breach. c. This Agreement may be terminated by Company for cause immediately upon the occurrence of any of the following events: (i) if Reseller ceases to do business, or otherwise terminates its business operations; or (ii) if Reseller breaches any provision of this Agreement and fails to fully cure such breach within fifteen (15) business days of written notice from Company describing the breach. d. Neither party shall incur any liability whatsoever for any damage, loss or expenses of any kind suffered or incurred by the other party arising from or incident to any termination of this Agreement, which complies with the terms of the Agreement, whether or not the terminating party is aware of any such damage, loss or expenses. 3 + +Source: BRAVATEK SOLUTIONS, INC., 8-K, 4/18/2017 + + + + + + e. Upon termination or expiration of this Agreement, other than with respect to customers of the Reseller existing at any time prior to the termination or expiration and with respect to ongoing sales or prospective sales, Reseller (i) shall immediately discontinue any use of the name, logotype, Marks or slogans of Company, (ii) shall immediately discontinue all representations or statements from which it might be inferred that any relationship exists between the parties, (iii) will cease to promote, solicit orders for or procure orders for the Product, (iv) will immediately return to Company all Proprietary Information (as defined below) and any other information or materials of Company in its possession, custody or control in whatever form held (including copies or embodiments thereof relating thereto). Notwithstanding the foregoing, the right to payments accruing prior to the termination or expiration shall survive termination or expiration of this Agreement. 11. Proprietary Rights. Each party acknowledges that, in the course of performing its duties under this Agreement, it may obtain from the other party, certain business, technical or financial information, all of which is confidential and proprietary ("Proprietary Information"). The parties shall, at all times, both during the term of this Agreement and after its termination, keep in trust and confidence all such Proprietary Information of the other party, and shall not use such Proprietary Information other than in the course of its duties as expressly provided in this Agreement; nor shall a party or its employees disclose any such Proprietary Information of the other to any person without such other party's prior written consent. Neither party shall be bound by this Section with respect to information it can document has entered or later enters the public domain as a result of no act or omission of the receiving party, or is lawfully received by such party from third parties without restriction and without breach of any duty of nondisclosure by any such third party. 12. Liability Limitation. EXCEPT FOR IN THE EVENT OF WILLFUL MISCONDUCT OR GROSS NEGLIGENCE, THE RESELLER AND ITS AFFILIATES SHALL NOT BE LIABLE TO THE COMPANY, AND SHALL HAVE NO OBLIGATION TO INDEMNIFY OR HOLD HARMLESS THE COMPANY, WITH RESPECT TO OR IN CONNECTION WITH ANY LOSS RESULTING FROM OR CAUSED BY THE COMPANY PRODUCTS. 13. Indemnification. Company shall indemnify, defend and hold Reseller and its officers, directors, employees, shareholders, agents, successors and assigns, harmless from and against any claim, demand lawsuit, cause of action or losses of any nature whatsoever, including reasonable attorneys' fees, suffered or incurred by Reseller or any of them, arising out of, (i) any claim that the Company Products infringe any U.S. patent or copyright or that the Company Products incorporate any misappropriated trade secrets or (ii) any claim for injury or other loss to any person arising from the use of Company Products. Additionally, Reseller shall indemnify, defend and hold Company and its officers, directors, employees, shareholders, agents, successors and assigns, harmless from and against any claim, demand lawsuit, cause of action or losses of any nature whatsoever, including reasonable attorneys' fees, suffered or incurred by Company or any of them, arising out of, (i) any claim that the Reseller's Activities infringe any U.S. Business law or that the Reseller's Activities violate any U.S. government process, procedure or requirement or (ii) any claim for injury or other loss to any person arising from the use of Reseller's Activities. 4 + +Source: BRAVATEK SOLUTIONS, INC., 8-K, 4/18/2017 + + + + + + 14. Miscellaneous. If any provision of this Agreement is held to be illegal or unenforceable, that provision shall be limited or eliminated to the minimum extent necessary so that this Agreement shall otherwise remain in full force and effect and enforceable. Except as otherwise expressly provided herein, any provision of this Agreement may be amended or waived only with the written consent of both parties. This Agreement may be executed in separate counterparts, each of which so executed and delivered (including by emailed PDF) shall constitute an original, but all such counterparts shall together constitute one and the same instrument. This Agreement shall be governed by and construed under the laws of the Commonwealth of Virginia without regard to the conflicts of law provisions thereof. This Agreement supersedes all prior agreements or discussions between the parties with respect to the subject matter hereof. RESELLER Bravatek Solutions, Inc. I3 ICS, LLC By: /s/ Philip A. Oakley By: /s/ Thomas A. Cellucci Name:Philip A. Oakley Name:Thomas A. Cellucci Title: President Title: Chairman & CEO Date: April 17, 2017 Date: April 17, 2017 5 + +Source: BRAVATEK SOLUTIONS, INC., 8-K, 4/18/2017 + + + + + + EXHIBIT A LEAD FORM Customer Info: Date: + +Company Products: Purchase Price (in U.S. dollars): Total License Fee: + +Term: Evaluation Term: [YES OR NO] 6 + +Source: BRAVATEK SOLUTIONS, INC., 8-K, 4/18/2017 + + + + + + EXHIBIT B RESELLER COMPENSATION Earned Commission: Reseller will be compensated for Registered Referrals and Registered Opportunities (as defined in Section 1g, 1i.) based on the following schedule: Registered Referral: + + · 25% of Net Revenue (as defined in Section 1e.) with a COMPANY-RESELLER AGREED UPON SALE PRICE in writing, the case of COMPANY's software products. The Company's Telecom Services will be agreed upon on a case-by-case basis in writing. Registered Opportunity: + + · "Reseller" will purchase directly from the "Company" at a 25% discount off the COMPANY-RESELLER AGREED UPONsale price. + + · If sale is made through SEWP, there will be an additional 4% discount off the sale price to cover the Prime contractusage fee (typically 7-10%) off the COMPANY-RESELLAR AGREED UPON SALE PRICE. Fulfillment Transaction Discount (as defined in Section 1j): · "Reseller" will purchase directly from the "Company" at a 7-10% discount off the sale price. Payment Terms: For a registered referral where the customer purchases directly from Company or another channel/contract vehicle other than Reseller, earned commissions are payable within thirty (30)days of when such amounts are collected by Company. For a Registered Opportunity where the customer purchases from Reseller, payment will be made by Reseller to Company within 5 days of receipt of payment (paid when paid). Expense Reimbursement: Reimbursement will be provided ONLY for expenses PRE-APPROVED in writing by Company. Marketing Expense: As may be agreed to by the parties in writing. 7 + +Source: BRAVATEK SOLUTIONS, INC., 8-K, 4/18/2017 + + + + + + COMPANY SUPPORT OBLIGATIONS Product Training: Training on the Company products as needed. Marketing Materials: Electronic and print copies of existing marketing material as needed. Company Personnel Resources: · Access to technical resources for demonstrations and meetings · Access to Company Customer Support Services 8 + +Source: BRAVATEK SOLUTIONS, INC., 8-K, 4/18/2017 \ No newline at end of file diff --git a/full_contract_txt/CANOPETROLEUM,INC_12_13_2007-EX-10.1-Sponsorship Agreement.txt b/full_contract_txt/CANOPETROLEUM,INC_12_13_2007-EX-10.1-Sponsorship Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..7f5d3ab9aa6564d513ef2ae589aaf0a25cf85c3d --- /dev/null +++ b/full_contract_txt/CANOPETROLEUM,INC_12_13_2007-EX-10.1-Sponsorship Agreement.txt @@ -0,0 +1,89 @@ +QuickLinks -- Click here to rapidly navigate through this document + + EXHIBIT 10.1 + +Sponsorship Agreement + +THIS AGREEMENT made this 5th day of December, 2007, between R. C. Boyd Enterprises, LLC, a Texas limited liability company, whose principal place of business is located at 2003 Navasota Cove, Westlake, Texas, referred to in this Agreement as "Company" or "Boyd", and Cano Petroleum, Inc., a Delaware corporation qualified to transact business in Texas, whose principal place of business is located at 801 Cherry Street, Suite 3200, Fort Worth, Texas 76102, referred to in this agreement as "Sponsor" or "Cano". + +WHEREAS, the Company is the owner of the rights to the television production known as Honey Hole (hereinafter "Honey Hole" or "Show"); + +WHEREAS, Sponsor desires to acquire the exclusive right to be the lead sponsor of the Show at an agreed price and under specified terms and conditions; + +NOW, THEREFORE, for and in consideration of the premises and the mutual promises, covenants, and agreements set forth in this Agreement, the Company and Cano agree as follows: + +1. Required Production. The Company shall produce no less than forty (40) original episodes of the Show per year; + +2. Lead Sponsorship. The Company agrees that Cano shall be identified as the lead sponsor, by having a thirty second lead-in promotion at the beginning of each episode; a thirty second trailer promotion at the end of each episode; and two thirty second commercials during each episode. + +3. Signage at Public Appearances. The Company agrees that Cano shall be entitled to place signage, up to 6 feet × 10 feet at each public appearance made by Honey Hole, including four (4) "Kids Corner" children's benefits during the term of this Agreement. + +4. Use of Logo. The Company agrees that the Cano logo and slogan shall appear on the primary boat and vehicle used in each episode. Cano recognizes and agrees that it does not and will not have exclusive rights and that other sponsor's logos may appear on the primary boat and vehicle. The Company agrees that Cano's logo shall be substantially the same size as other such sponsors; + +5. Featured Guests. The Company agrees to feature not less than two (2) persons designated by Cano as guests on not less than six (6) separate episodes per year. + +6. Provision of Lead in Trailer and Commercials. Cano has already provided the Company with voice over lead-in(s), 30 second commercials and trailers of a quality satisfactory to the Company and content that meets the Company's minimum standards. The Company shall utilize the already produced lead-in, commercials and trailers. + +7. Sales and Other Taxes. The Company will add sales, excise and any other tax or surcharge to its invoices which it is obligated to collect and remit under the laws of the State of Texas, the United States or any other jurisdiction. + +8. Notice. Any notice provided for under the terms of this Agreement by either party to the other shall be in writing and may be effected by personal delivery in writing or registered or certified mail, return receipt requested. Notice to Boyd shall be sufficient if made or addressed to 2003 Navasota Cove, Westlake, Texas 76092. Notice to Cano shall be sufficient if made or addressed to Cano Petroleum, Inc., 801 Cherry Street, Suite 3200, Fort Worth, Texas 76102. Each party may change the address at which notice may be sent to that party by giving notice of such change to the other party in accordance with the provisions of this Paragraph. + +9. Term and Renewal. The term of this Agreement shall be one (1) year, commencing January 1, 2008 and ending on December 31, 2008. + + + + + + + + 10. Force Majeure. In the event that either party shall be prevented from performing any of its obligations due under the terms of this Agreement by an act of God, by acts of war, riot, or civil commotion, by an act of State, by strikes, fire, flood, or by the occurrence of any other event beyond the control of the parties hereto, that party shall be excused from any further performance of the obligations and undertakings set forth under the terms of this Agreement. + +11. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Texas and venue for any legal action brought in State Court shall lie exclusively in Tarrant County, Texas and venue for any action brought in federal court shall lie exclusively in the Northern District of Texas, Fort Worth Division. + +12. Rights Cumulative. The rights and remedies granted in this agreement to Cano in the event of default are cumulative, and the exercise of such rights shall be without prejudice to the enforcement of any other right or remedy authorized by law or this agreement. + +13. Attorneys' Fees. If any legal action is brought by either of the parties hereto, it is expressly agreed that the prevailing party in such legal action shall be entitled to recover from the other party reasonable attorney's fees in addition to any other relief that may be awarded. For the purposes of this clause, the prevailing party is the party in whose favor final judgment is entered. In the event that declaratory or injunctive relief alone is granted, the court may determine which, if either, of the parties shall be considered to be the prevailing party. The amount of reasonable attorney's fees shall be determined by the court, in the trial of such action or in a separate action brought for that purpose. Attorney's fees awarded under the provisions of this paragraph shall be in addition to any other relief that may be awarded. + +14. Multiple Counterparts. This Agreement is executed in duplicate copies, each of which shall be considered a true and original copy of this Agreement. + +15. Payment of Money. In consideration of the services to be rendered under this Agreement as set forth above, the Company shall be entitled to compensation in the amount of $150,000.00 (One Hundred Fifty Thousand Dollars), to be paid in equal installments of $37,500.00 (Thirty Seven Thousand Five Hundred Dollars) on January 1, 2008, April 1, 2008, July 1, 2008 and October 1, 2008. If Cano fails to make any payment when required by this Agreement, the Company shall have the option of canceling this Agreement following the passage of ten (10) days after having given Cano written notice of its default. While the Company shall have no further obligation to Cano following cancellation of the Agreement, Cano shall remain liable for all unpaid installments for the then current term of the Agreement, which installments shall be immediately due and payable. + +16. Exculpatory Clause. The parties agree that Cano will not be liable to the Company or any third party for any injury sustained by the Company, its employees, independent contractors, invitees or any other third party while preparing for, filming or working on post production of any episode. + +17. Place of Performance. All sums payable under this Agreement shall be paid to the Company at Southlake, Tarrant County, Texas. + +18. Assignment. This Agreement may not be assigned by either party without the prior written consent of the other party. + +19. Other Agreements. This Agreement supersedes any and all other agreements, either oral or in writing, between the parties with respect to the subject matter of this contract, and contains all of the covenants and agreements between the parties with respect to the subject matter. Each party to this contract acknowledges that no representations, inducements, promises, or agreements, orally or otherwise, have been made by any party, or anyone acting on behalf of any party, that are + +2 + + + + + + + + not set forth in this contract, and that no agreement, statement, or promise not contained in this contract shall be valid or binding. + +20. Partial Invalidity. If any term or provision of this Agreement is held by a court of competent jurisdiction to be invalid, void, or unenforceable, the remainder of the provisions of this agreement shall remain in full force and effect and shall in no way be affected, impaired, or invalidated. + +21. Government Regulation. This Agreement is subject to all applicable federal, state and municipal laws, regulations and ordinances, whether existing or enacted hereafter, including the rules and regulations of all governmental agencies or commissions having jurisdiction in matters covered by this Agreement or either of the parties hereto. + +This Agreement is executed in duplicate on the 5th day of December, 2007, in Fort Worth, Tarrant County, Texas, to be effective January 1, 2008. + +3 + + R. C. BOYD ENTERPRISES, LLC By: /s/ R.C. Boyd + +Printed Name: R.C. Boyd Title: President CANO PETROLEUM, INC. By: /s/ Jeff Johnson + +Printed name: Jeff Johnson Title: CEO + + + + + + QuickLinks + +EXHIBIT 10.1 \ No newline at end of file diff --git a/full_contract_txt/CARDAX,INC_08_19_2014-EX-10.1-COLLABORATION AGREEMENT.txt b/full_contract_txt/CARDAX,INC_08_19_2014-EX-10.1-COLLABORATION AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..52f84f5e7820eab0a583106e79e5b4a1a08df700 --- /dev/null +++ b/full_contract_txt/CARDAX,INC_08_19_2014-EX-10.1-COLLABORATION AGREEMENT.txt @@ -0,0 +1,155 @@ +Exhibit 10.1 COLLABORATION AGREEMENT THIS COLLABORATION AGREEMENT ("Agreement") is made as of this 18t h day of August 2014 (the "Effective Date"), by and between Capsugel US, LLC and its Affiliates with an address at 412 Mt. Kemble Ave, Suite 200C, Morristown, NJ 07960 ( "CAPSUGEL") and Cardax, Inc., and its Affiliates, with a corporate address at 2800 Woodlawn Dr., Suite 129, Honolulu, HI 96822 ("CARDAX"). CARDAX and CAPSUGEL are each a "Party" and together constitute the "Parties" RECITALS WHEREAS, CAPSUGEL is experienced in formulating, developing, manufacturing, testing and packaging of health and nutrition products; and WHEREAS, CARDAX is experienced in developing products that are based on its astaxanthin technologies; and WHEREAS, CAPSUGEL and CARDAX desire to enter into an arrangement under which the Product (as defined below) will be formulated and developed for the purpose of identifying a marketing partner(s) ("Marketer") for Marketer's onward sale of the Product in the Territory. NOW, THEREFORE, the Parties hereto agree to the following: SECTION 1 DEFINITIONS The following terms for the purpose of this Agreement shall have the following respective meanings: 1.1 "Active Ingredient" shall mean the synthetic Astaxanthin and/or esters thereof that will be formulated in the Product as the active ingredient of the Product. 1.2 "Adjusted Net Sales" shall mean [***]. 1.3 "Administrative Cost" shall mean [***]. 1.4 "Affiliate" shall mean, with respect to either Party, all entities which, directly or indirectly, are controlled by, control or are under common control with such Party. For purposes of this Agreement, the word "control" shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of an entity, including through ownership of more than fifty percent (50%) of the voting shares or interest of an entity; provided, however, with respect to CAPSUGEL, the term "Affiliate" shall be limited to entities who directly or indirectly through one or more intermediaries are controlled by the parent of CAPSUGEL's direct parent entity and with respect to CARDAX the term "Affiliate" shall not include Cardax Pharmaceuticals, Inc. CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. 1 + + + + + + 1.5 "Applicable Laws" shall mean all applicable laws, statutes, ordinances, codes, rules and regulations applicable to the formulation, development and/or manufacture, marketing, distribution sale, and disposal of the Product or any aspect thereof and the obligations of CAPSUGEL or CARDAX, as the context requires under this Agreement. 1.6 "Annual Period" shall mean the twelve (12) month period beginning on the first day in which the Launch Date occurs and each twelve (12) month period beginning on the anniversary of such day thereafter. 1.7 "Commercially Reasonable Efforts" means a Party's reasonable efforts and diligence, consistent with professional business standards generally practiced in the health and nutrition industry, applied in accordance with the Party's commercially reasonable business, legal, medical and scientific judgment, including the efforts and resources the Party would use for a product owned by it or to which it has rights, which is of similar market potential at a similar stage in its product life, taking into account the competitiveness of the marketplace, the proprietary position of the compound, the Applicable Laws, the profitability of the applicable products, and other relevant factors including, without limitation, technical, legal, scientific or medical factors. 1.8 "Development Plan" shall have the meaning set forth in Section 2.1. 1.9 "Disclosing Party" shall have the meaning set forth in the Confidentiality Agreement. 1.10 "Formulation" means a specific combination of excipient(s) that can formulate the Active Ingredient, as well as compounds other than the Active Ingredient, developed as a result of the work conducted under the Development Plan. 1.11 "Force Majeure" shall have the meaning set forth in Section 10.5. 1.12 "Indemnified Party" shall have the meaning set forth in Section 8.3. 1.13 "Indemnifying Party" shall have the meaning set forth in Section 8.3. 1.14 "Intellectual Property Rights" means a composition of matter, formula, process, method of use, invention, improvement, business name, domain name or database right to the extent any of the foregoing is protected in a utility model, trademark, service mark, trade name or business name, copyright, registered design, design right, patent, know-how, trade secret, rights in or to confidential information all goodwill related thereto and any other intellectual property right of any nature whatsoever throughout the world (whether registered or unregistered and including all applications and rights to apply for the same). CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. 2 + + + + + + 1.15 "Launch Date" shall mean the date [***]. 1.16 "Loss or Losses" shall mean any and all damages, fines, fees, settlements, payments, obligations, penalties, deficiencies, losses, costs and expenses, including, without limitation, environmental losses, interest, court costs, reasonable fees of attorneys, accountants and other experts and other reasonable expenses of litigation or other proceedings or of any claim, default or assessment. 1.17 "Manufacturing Facility" shall mean those areas of CAPSUGEL or CAPSUGEL's subcontractors manufacturing, packaging, laboratory and warehousing facilities utilized in the formulation, manufacture, packaging, storage, testing, shipping or receiving of the Product. 1.18 "Materials" mean all excipient(s) and inactive raw materials used in the formulation of the Product. For the avoidance of doubt, "Materials" does not include any Active Ingredient or work in process or finished goods inventory. 1.19 "Net Sales" means [***]. 1.20 "Product" shall mean Active Ingredient Formulated in CAPSUGEL's proprietary Lipid Multi-Particulate Technology, including any improvements or derivatives of such technology. 1.21 "Receiving Party" shall have the meaning set forth in the Confidentiality Agreement. 1.22 "Regulatory Approvals" means any and all approvals, licenses, registrations, or authorizations of the relevant Regulatory Authority, necessary for the development, manufacture, use, storage, import, transport, export or commercialization of the Product in a particular country or jurisdiction. 1.23 "Regulatory Authority (ies)" means any governmental regulatory authority within a Territory involved in regulating any aspect of the development, manufacture, testing, market approval, sale, distribution, packaging or use of the Product. 1.24 "Regulatory Filings" shall mean the registrations, permits, licenses, authorizations, presentations, notifications, filings and/or approvals (together with all applications therefore and all related documents required by the FDA and all other laws for the development, manufacture, use, importation, export, marketing, sale and distribution of the Product within the Territory. CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. 3 + + + + + + 1.25 "Royalty Payment" shall have the meaning set forth in Section 5.1. 1.26 "Specifications" shall mean the Product description and attributes agreed upon between the Parties upon conclusion of the Development Plan and appended to this Agreement as Exhibit B that will be attached hereto and, when attached, will be a part hereof, prior to commercialization of the Product. 1.27 "Territory" shall mean worldwide. Section 2 Product Development, Manufacture and Commercialization 2.1 Governance Process Among the Parties . Both CARDAX and CAPSUGEL will agree upon a development plan, which shall be in writing and attached hereto as Exhibit A (the "Development Plan"), which shall describe various parameters including each Party's duties, obligations, time schedule and deliverables schedule. The activities performed under the Development Plan (the "Development Activities") shall be administered by a joint project team ("JPT"), which shall review/update/amend the Development Plan for the Product in the Territory and coordinate the Formulation, development, manufacturing and commercialization of the Product, including identifying and selecting one or more Marketers as contemplated under Section 2.4. Each Party shall appoint a project manager to oversee that Party's performance of its obligations under this Agreement and shall notify the other Party of the name and full contact details of its appointed project manager. The JPT shall comply with this Agreement for decisions specifically assigned to a Party pursuant to this Agreement. Meetings shall take place by telephone or in person and the JPT will operate by consensus. If consensus cannot be reached, the matter will be submitted to the Head of Dosage Form Solutions of CAPSUGEL and the President and CEO of CARDAX for resolution. If such matter is not resolved, then the Parties may attempt to mediate such issue under the JAMS mediation rules. No member or any Affiliate of any member of the JPT shall have any liability under this Agreement and shall be exculpated to the fullest extent not prohibited by law from any liability to any Party that such member is not an employee, officer, consultant or acting in any similar capacity. 2.2 CAPSUGEL Responsibilities. With respect to the Product, CAPSUGEL, [***] shall [***] perform the development work necessary to formulate, analytically develop and take all other developmental actions necessary or required to develop the Product and manufacture pre- clinical and clinical batches (collectively, the "CAPSUGEL Development Activities" ). For purposes of further clarification, CAPSUGEL Development Activities shall include, without limitation, each of the following performed with all due diligence, care and skill and in accordance with all other Applicable Laws: + +CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. 4 + + + + + + + + (a) Formulation Development. Formulation shall mean a specific combination of Materials that formulate the Active Ingredient, as well as compounds other than the Active Ingredient, developed as a result of the work conducted under the Development Plan. The development of the Formulation of the Product, includes without limitation, all stability tests and other studies as applicable, providing CARDAX reports of such stability tests, using Commercially Reasonable Efforts to modify the Formulation as necessary and develop processes capable of scale-up and commercialization in accordance with Applicable Laws. (b) Analytical Methods. Developing and validating analytical methods including but not limited to dissolution, assay, and stability as agreed upon by the Parties. (c) Manufacture of Study Batches. The manufacture [***] of batches of Product in amounts specified on or about the dates determined a s reasonably necessary for conducting all required for CAPSUGEL/CARDAX funded studies. Any other batches required or reasonably required by the Marketer for applying for and all actions related to additional Regulatory Approvals and Regulatory Filings of the Product and any related communications, studies or support for the FDA or any other Regulatory Authority (ies), which may include human and animal studies, shall be paid for by the Marketer, unless the Parties agree otherwise. (d) Manufacturing Development. Development of manufacturing processes and systems in conformance with cGMP requirements of FDA to manufacture pilot batches, exhibit batches and commercial batches of Product. (e) Reporting. CAPSUGEL shall, throughout the performance of the Development Plan studies, consult with CARDAX on matters including technical, intellectual property and regulatory aspects and keep the other apprised of all developments. (f) Commercial Manufacturing. CAPSUGEL shall manufacture the Product for each Marketer unless otherwise agreed by the Parties and the applicable Marketer. + +2.3 CARDAX Responsibilities. + + (a) CARDAX shall be responsible for [***] the Active Ingredient [***], subject to reasonable notice and delivery schedules and reasonable amounts required by CAPSUGEL for it to perform its obligations under this Agreement or as otherwise agreed by CARDAX. (b) [***] CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. 5 + + + + + + 2.4 Joint Responsibilities. + +[***] The marketing of the Product shall be carried out by one or more mutually identified Marketer(s) by the JPT or otherwise in accordance with Section 2.1. CAPSUGEL and CARDAX will jointly control identification, decision rights, and terms for a Marketer as determined by the JPT or otherwise in accordance with Section 2.1. If a Marketer is not identified, or the terms are not determined, by the JPT or otherwise in accordance with Section 2.1, then the Marketer (and such terms) may be designated by either Party, subject to the reasonable approval of the other Party. Any additional costs/activities required from a Marketer will be subject to agreement of the JPT or otherwise as provided in Section 2.1, including but not limited to pre-launch out-of-pocket expenses and the funding of such costs and expenses. These costs will be shared [***]. 2.5 Ownership of Application. CARDAX shall own and control all information and rights in, to and under all Regulatory Approvals in the Territory (including all associated contents and correspondences) and applications therefore related to the Product and any other marketing authorizations within the Territory, unless otherwise mutually agreed upon by the Parties. + +Section 3 Intellectual Property Matters 3.1 Background IP. This Agreement shall not change, modify or otherwise affect any rights to any confidential information, inventions, patents, patent applications or other Intellectual Property Rights owned or developed by either Party before the Effective Date or developed by a Party after the Effective Date other than under the terms of this Agreement ("Background IP"). This Agreement shall not confer on either Party any rights in and/or to any Background IP of the other party, except as otherwise provided in this Agreement. 3 .2 CAPSUGEL Property. CARDAX acknowledges that CAPSUGEL possesses certain inventions, processes, know-how, trade secrets, improvements, other intellectual properties and other assets, including but not limited to formulation recipes, processing details, laboratory analyses, analytical methods, procedures and techniques, computer technical expertise and software, which have been independently developed by CAPSUGEL, including but not limited to, the Background IP of CAPSUGEL (collectively "Capsugel Property"). CARDAX and CAPSUGEL agree that any Capsugel Property or improvements thereto which are used, improved, modified or developed by CAPSUGEL under or during the term of this Agreement are the product of CAPSGUEL's technical expertise possessed and developed by CAPSUGEL prior to the Effective Date and are the sole and exclusive property of CAPSUGEL. CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. 6 + + + + + + 3 . 3 CARDAX Property. CAPSUGEL acknowledges that CARDAX possesses certain inventions, processes, know-how, trade secrets, improvements, other intellectual properties and other assets, which have been independently developed by CARDAX, including but not limited to, the Background IP of CARDAX (collectively "CARDAX Property"). CAPSUGEL and CARDAX agree that any CARDAX Property or improvements thereto which are used, improved, modified or developed by CARDAX under or during the term of this Agreement are the product of CARDAX's technical expertise possessed and developed by CARDAX prior to the Effective Date and are the sole and exclusive property of CARDAX. 3.4 Use of Confidential Information. CARDAX may use the confidential information of CAPSUGEL generated under this Agreement, except for CAPSUGEL's internal technical protocols and Background IP, to the extent necessary (i) in connection with seeking regulatory approval for a Compound Formulation or the Product and/or (ii) filing a patent application. "Compound Formulation" means any specific combination of excipient(s) and the Active Ingredient developed as a result of the work conducted under this Agreement. CARDAX may use and disclose CAPSUGEL's internal technical protocols and Background IP, to the extent necessary for Regulatory Approvals as contemplated by Section 2.3(b) to the extent reasonably determined by CAPSUGEL after notice and consultation with CAPSUGEL by CARDAX. 3.5 Inventions. Each Party will own all of its inventions and other Intellectual Property Rights made under this Agreement, including any patents, patent applications and other Intellectual Property Rights related to such inventions, if any, made solely by its employees or independent contractors or employees or independent contractors of its Affiliates, unless otherwise expressly set forth herein. 3.6 Joint Inventions. The Parties will jointly own all inventions and other Intellectual Property Rights jointly made under this Agreement that are directly resulting from work conducted under this Agreement in accordance with the Development Plan and related specifically to the Product or the Compound Formulation, including any patents, patent applications and other Intellectual Property Rights related to such inventions, if any, unless otherwise expressly set forth herein. During the Term, each Party hereby provides a worldwide, exclusive, royalty free, perpetual license of such Intellectual Property Rights for use by each licensee in its business in connection with the development and marketing and commercialization of the Product. For avoidance of doubt, no Party or any of its Affiliates shall have any rights to the Background IP of the other Party nor shall any Party have rights to any trademarks, service marks, trade names, business names or product names developed by the other Party. All decisions regarding the protection and exploitation of joint investments and other Intellectual Property Rights shall be determined by the JPT or otherwise in accordance with Section 2.1. 3.7 [reserved] CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. 7 + + + + + + 3.8 Freedom to Operate. CARDAX acknowledges that it shall be solely and fully responsible to use its Commercially Reasonable Efforts for doing any and all freedom to operate assessments regarding possible infringement of third party intellectual property rights for the Product in the part of the Territory that the Parties reasonably determine require such protection; provided, however, each Party shall be solely and fully responsible for doing any and all freedom to operate assessments regarding possible infringement of third party intellectual property rights for any and all of its Intellectual Property Rights. Section 4 Exclusivity [***] Section 5 Consideration 5.1 Royalty Payments. CAPSUGEL shall pay to CARDAX a royalty equal to [***] of the Adjusted Net Sales ("Royalty Payment") within [***] after the end of [***]. 5.2 Mode of Payment. CAPSUGEL will endeavor to contract with Marketer to receive profit sharing payments in U.S. dollars and CAPSUGEL will in turn pay CARDAX its share in U.S. dollars. Should Marketer require that local currency based payments be made to CAPSUGEL then CAPSUGEL will pay CARDAX its share in such local currency unless otherwise agreed. For instances in which Marketer sells the product in a local currency other than U.S. dollars but agrees to pay CAPSUGEL in U.S. dollars, the conversion of local currency to USD will be a mutually agreeable methodology with such Marketer (e.g., using the Marketer's standard accounting methodology such as its average daily rate for its accounting month). 5.3 Taxes. All federal, national, regional, district, local or other governmental income tax or similar tax that is imposed on either Party as a result of income, shall be the responsibility of such Party. All amounts payable by CAPSUGEL to CARDAX under this Agreement shall be paid free and clear of all deductions or withholdings whatsoever, except as may be required by law. If any deductions or withholdings are required by law to be made from any of the amounts payable by CAPSUGEL to CARDAX, the amount of any such withholding may be treated as part of the Royalty Payment, depending on the timing and the applicable legal requirements and CAPSUGEL shall provide CARDAX a receipt of any such withholdings. CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. 8 + + + + + + Section 6 Regulatory Requirements 6.1 Regulatory Contacts. [***] CAPSUGEL shall notify CARDAX immediately, and in no event, no later than three (3) business day(s), after it receives any contact or communication from any governmental or regulatory authority, including without limitation the FDA, that in any way relates to or may have an impact on a Product or the CAPSUGEL Development Activities. 6.2 Regulatory Inspections. Throughout the Term of this Agreement, CAPSUGEL agrees to cooperate with any governmental or regulatory body, particularly the FDA, which requests a general GMP inspection or audit or any inspection or audit relative to the manufacture, storage, handling, or shipment of Product manufactured, stored, handled, or shipped by CAPSUGEL. In addition, CAPSUGEL shall use its Commercially Reasonable Efforts to meet all reasonable U.S. FDA and other appropriate regulatory demands. 6.3 CARDAX Inspection. CARDAX shall have the right to audit CAPSUGEL's facilities, quality systems and records from time to time upon reasonable notice and CARDAX shall have the right to have a third party accounting firm, subject to a non-disclosure agreement, audit CAPSUGEL's financials as they relate to Net Sales and Adjusted Net Sales. In the event that the amount of the Royalty Payment for any quarter is 10% or more than the amount reported by CAPSUGEL, then CAPSUGEL will pay the costs and expenses of the audit or investigation. 6.4 Regulatory Notices. CAPSUGEL shall provide prompt written notice to CARDAX of the occurrence of, and the results of any regulatory notices including inspections as referenced in this Section 6 relating to the manufacture of Product. 6.5 Recordkeeping. CAPSUGEL shall keep true, accurate, and complete books, records, reports, and accounts (hereinafter "Records") of all business or activities in connection with or relating to the manufacture, storage, handling, and shipment, including all validations, qualification, and validation protocols, of Product and this Agreement. CARDAX has the right, upon reasonable prior notice and during normal business hours, to inspect and examine such Records. CAPSUGEL agrees to retain all such Records for a period of five (5) years after the expiration of the Term or after termination of this Agreement. CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. 9 + + + + + + 6.6 Recall. In the event that either Party believes it may be necessary to conduct a recall, field correction, market withdrawal, stock recovery, or other similar action with respect to any Product which was sold under this Agreement (a "Recall"), CARDAX and CAPSUGEL shall promptly consult with each other in good faith as to how best to proceed, it being understood and agreed that the final decision as to any Recall of any Product sold by Marketer(s) shall be made jointly; provided, however, that neither Party shall be prohibited hereunder from taking any action that it is required to take by Applicable Law or taking Commercially Reasonable Efforts to mitigate the loss from any Recall or seizure or to protect the public. Each of CAPSUGEL and CARDAX shall make a permanent, complete and accurate record of all costs incurred by it in connection with any Product Recall or seizure. With respect to any Recall or seizure of any Product caused by the negligence, mistake or omission of CAPSUGEL, CAPSUGEL shall (i) reimburse CARDAX for all out-of-pocket costs and expenses reasonably incurred by CARDAX in connection with the Recall or seizure, including, without limitation, replacing the Product subject to the Recall or seizure in accordance with this Agreement; and (ii) as provided in Section 8.1, indemnify and save CARDAX and its Affiliates harmless from and against any and all damages to or claims by third parties associated (or Affiliated) with or resulting from any such Recall or seizure. With respect to any Recall or seizure caused by the negligence, mistake or omission of CARDAX (including but not limited to failure of the Active Ingredient to meet the Specifications), CARDAX shall: (i) reimburse CAPSUGEL for all out-of-pocket costs and expenses reasonably incurred by CAPSUGEL in connection with the Recall or seizure; and (ii) as provided in Section 8.2, indemnify and save CAPSUGEL and its Affiliates harmless from and against any and all damages to or claims by third parties associated with or resulting from any such Recall or seizure. With respect to any Recall or seizure of a Product not caused by the negligence, mistake or omission of either Party, each Party shall bear [***] of the aggregate costs of any and all out-of-pocket costs, expenses and losses reasonably incurred by either Party in connection with the Recall or seizure. If CAPSUGEL and CARDAX cannot agree which party is at fault or whether a Recall or seizure was reasonably beyond the control of the Parties, then an independent technical expert, acceptable to both Parties, shall be designated to make such determination. The designated technical expert shall not be an employee, consultant, officer, director or shareholder of, or otherwise associated with, CAPSUGEL, CARDAX or their respective Affiliates. The technical expert's determination will be, in the absence of fraud or manifest error, binding and conclusive upon the Parties. Each Party shall keep the other fully informed of any notification or other information, whether received directly or indirectly, which might affect the marketability, safety or effectiveness of a Product, or which might result in liability issues or otherwise necessitate action on the part of either party, or which might result in Recall or seizure of the Product. Prior to any reimbursement pursuant to this Section 6 the Party claiming reimbursement shall provide the other Party with all available documentation of all reimbursable costs and expenses. CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. 10 + + + + + + Section 7 Representations and Warranties 7.1 Representations and Warranties of CAPSUGEL. CAPSUGEL hereby represents and warrants to CARDAX as follows: (a) CAPSUGEL is a corporation in good standing under the laws of the jurisdiction of its organization and authorized to do business wherever necessary to fulfill the terms and conditions of this Agreement; (b) CAPSUGEL has the full power and authority to execute and deliver this Agreement and perform its covenants, duties and obligations described in this Agreement; (c) This Agreement is the valid, legal and binding obligation of CAPSUGEL, enforceable in accordance with its terms; (d) Neither the execution and delivery of this Agreement nor the performance of CAPSUGEL's covenants, duties and obligations described in this Agreement constitute or will constitute a default under or conflict with any judgment, decree or order of any court or other governmental body to which CAPSUGEL is subject and will not conflict or be inconsistent with or result in the termination, modification, breach or default under the terms of any contract, commitment, covenant, agreement, instrument, document or understanding to which CAPSUGEL is a party; (e) CAPSUGEL is not a party to, nor to CAPSUGEL's knowledge is CAPSUGEL as of the Effective Date threatened with, any legal or equitable action or proceeding before any court, arbitrator, administrative agency or other tribunal which is reasonably likely to adversely affect its ability to execute and deliver this Agreement or fully and timely perform its covenants, duties and obligations described in this Agreement; (f) CAPSUGEL has obtained and continuously maintained all permits, authorizations and licenses issued by all federal, state and local governmental agencies and authorities necessary for the conduct of CAPSUGEL's businesses as of the Effective Date; (g) CAPSUGEL has and shall continue to follow, comply with and adhere to all Applicable Laws necessary for the conduct of CAPSUGEL's businesses; + +CAPSUGEL shall during the performance of the CAPSUGEL Development Activities ensure that, at all times, its employees, contractors, consultants, sub-contractors carry out their duties with all reasonable skill and care customary for the type of scientific research and development work covered by this Agreement and shall at all times comply with all applicable laws and regulations; record experimental data and all other material information relating to the CAPSUGEL Development Activities in individual notebooks or other appropriate formats and treat the same as Confidential Information; ensure that, at all times, its employees, contractors, consultants and sub-contractors are fully aware of and comply with the confidentiality provisions of their respective contracts which, for the avoidance of doubt, are comparable to the confidentiality provisions set out in this Agreement; keep CARDAX informed of the progress of the CAPSUGEL Development Activities by providing bi-weekly written reports and such other interim reports or updates as CARDAX may reasonably request. CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. 11 + + + + + + 7.2 Representations and Warranties of CARDAX. CARDAX hereby represents and warrants to CAPSUGEL as follows: (a) CARDAX is a corporation in good standing under the laws of the jurisdiction of its organization and authorized to do business wherever necessary to fulfill the terms and conditions of this Agreement; (b) CARDAX has the full power and authority to execute and deliver this Agreement and perform its covenants, duties and obligations described in this Agreement; (c) This Agreement is the valid, legal and binding obligation of CARDAX, enforceable in accordance with its terms; (d) Neither the execution and delivery of this Agreement nor the performance of CARDAX's covenants, duties and obligations described in this Agreement constitute or will constitute a default under or conflict with any judgment, decree or order of any court or other governmental body to which CARDAX is subject and will not conflict or be inconsistent with or result in the termination, modification, breach or default under the terms of any contract, commitment, covenant, agreement, instrument, document or understanding to which CARDAX is a party; (e) CARDAX is not a party to, nor to CARDAX's knowledge is CARDAX as of the Effective Date threatened with, any legal or equitable action or proceeding before any court, arbitrator, administrative agency or other tribunal which is reasonably likely to adversely affect its ability to execute and deliver this Agreement or fully and timely perform its covenants, duties and obligations described in this Agreement; and (f) CARDAX has obtained and continuously maintains all permits, authorizations and licenses issued by all federal, state and local governmental agencies and authorities necessary for the conduct of CARDAX's businesses as of the Effective Date. + +Disclaimer. THE REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS AGREEMENT ARE THE PARTIES' ONLY WARRANTIES AND NO OTHER WARRANTY, EXPRESS, IMPLIED OR STATUTORY, WILL APPLY. EACH PARTY EXPRESSLY DISCLAIMS ALL OTHER WARRANTIES, WHETHER EXPRESS, IMPLIED OR STATUTORY, INCLUDING WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. FOR THE AVOIDANCE OF DOUBT, EACH PARTY EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES OF NON-INFRINGEMENT THAT ARE NOT EXPRESSLY SET FORTH IN THIS AGREEMENT. CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. 12 + + + + + + Section 8 Indemnification 8.1 CAPSUGEL's Indemnification of CARDAX. CAPSUGEL shall indemnify, defend and hold CARDAX, its Affiliates and their respective officers, directors, employees and agents harmless from and against any and all third party Losses suffered, incurred or sustained by CARDAX or to which CARDAX becomes subject at any time, to the extent arising out of or resulting, directly or indirectly, from: (a) any breach of CAPSUGEL's representations, warranties or obligations under this Agreement; (b) any personal injury, death or property damage caused by the possession, use, or consumption by any person of any Product that does not comply with the Specification in any way or is the result of actions or inactions of CAPSUGEL in its manufacturing or is alleged to result from any inherent risk of the Formulation or a defect in the Formulation; and (c) any other negligent act or omission on the part of CAPSUGEL, its Affiliates or their respective employees or agents except, in each case, to the extent such claims are attributable to the gross negligence or willful misconduct of CARDAX. 8.2 CARDAX's Indemnification of CAPSUGEL. CARDAX shall indemnify, defend and hold CAPSUGEL, its Affiliates and their respective officers, directors, employees and agents harmless from and against any and all third party Losses suffered, incurred or sustained by CAPSUGEL or to which CAPSUGEL becomes subject at any time, to the extent arising out of or resulting, directly or indirectly, from (a) any breach of CARDAX's representations, warranties or obligations under this Agreement; (b) any personal injury, death or property damage caused by the possession, use or consumption by any person of any Product supplied by CAPSUGEL under this Agreement that does not comply with the Specifications as a result of actions or inactions of CARDAX or is alleged to result from any inherent risk of the Product or a defect in the Active Ingredient; and (c) any other negligent act or omission on the part of CARDAX, its Affiliates or their respective employees or agents except, in each case, to the extent such claims are attributable to the gross negligence or willful misconduct of CAPSUGEL. CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. 13 + + + + + + 8.3 Indemnification Process. If CARDAX, Affiliates or their respective employees, servants or agents, or CAPSUGEL, its Affiliates or their respective employees, servants or agents (in each case an "Indemnified Party"), receive any written claim which such Indemnified Party believes is the subject of indemnity hereunder by the other Party hereto (an "Indemnifying Party"), the Indemnified Party shall, as soon as reasonably practicable after forming such belief, give notice thereof to the Indemnifying Party, provided that the failure to give timely notice to the Indemnifying Party as contemplated hereby shall not release the Indemnifying Party from any liability to the Indemnified Party unless the Indemnifying Party demonstrates that the defense of such claim is prejudiced by such failure. The Indemnifying Party shall have the right, by prompt notice to the Indemnified Party to assume the defense of such claim at its cost, with counsel reasonably satisfactory to the Indemnified Party. If the Indemnifying Party does not so assume the defense of such claim or, having done so, does not diligently pursue such defense, the Indemnified Party may assume the defense, with counsel of its choice, but at the cost of the Indemnifying Party. If the Indemnifying Party so assumes the defense, it shall have absolute control of the litigation; the Indemnified Party may, nevertheless, participate therein through counsel of its choice and at its cost. The Party not assuming the defense of any such claim shall render all reasonable assistance to the Party assuming such defense, and out-of-pocket costs of such assistance shall be for the account of the Indemnifying Party. No such claim shall be settled other than by the Party defending the same, and then only with the consent of the other Party, which consent shall not be unreasonably withheld; provided that the Indemnified Party shall have no obligation to consent to any settlement of any such claim which (i) imposes on the Indemnified Party any liability or obligation which cannot be assumed or performed in full by the Indemnifying Party, (ii) does not unconditionally release the Indemnified Party, (iii) does require a statement as to or an admission of fault, culpability or failure to act by or on behalf of Indemnified Party or any of its Affiliates or (iv) does impose any restrictions on the conduct of business by the Indemnified Party or its Affiliates. 8.4 Limitation of Damages. IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY CONSEQUENTIAL, SPECIAL OR PUNITIVE DAMAGES OR LOST PROFITS ARISING UNDER OR RELATING TO THIS AGREEMENT. Except in the event of (i) a Party's gross negligence or willful misconduct and/or (ii) a Party's breach of its confidentiality obligation, the total liability of one Party to the other Party (and its Affiliates) arising out of or in connection with this Agreement or the Products, whether in contract, tort (including negligence), statute or otherwise, shall, to the maximum extent permitted by Applicable Law, be limited to the amount of revenues it receives under this Agreement. 8.5 Insurance. During the Term and for a period of two (2) years after the termination of the Agreement or the expiry date of the last batch manufactured whichever is later, thereafter, each Party shall obtain and maintain, at its sole expense adequate product liability insurance for the Product as it reasonably deems necessary and appropriate. Evidence of coverage, in the form of certificates of insurance, shall be provided promptly upon registration of the Product in given countries and as reasonably requested thereafter. CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. 14 + + + + + + Section 9 Confidentiality and Publicity Confidentiality. The Parties agree that the terms of the Confidentiality Agreement entered into between the parties dated Nov 19, 2013 shall govern this Agreement. Section 10 Term and Termination 10.1 Term and Renewal. [***] In addition, any contract entered into by the Parties with a Marketer for the Product shall survive termination of this Agreement in accordance with its terms, including any renewal rights provided therein. 10.2 Termination for Breach . A material breach that is subject to cure that is not cured within [***] of written notice of breach shall be cause for termination, provided that if the breaching party is diligently pursuing in good faith the remedy of the breach at the expiration of such [***] cure period, then such [***] cure period shall be extended for a reasonable period to effect the cure. Upon any breach by CAPSUGEL, CARDAX shall be permitted to use all Intellectual Property of CAPSUGEL used in the Formulation and the Product to the extent necessary for the development and marketing of the Product. Upon any breach by CARDAX, CAPSUGEL shall be permitted to use all Intellectual Property of CARDAX used in the Active Ingredient and the Product to the extent necessary for the development and marketing of the Product in accordance with the terms of this Agreement as of the date of such termination. 10.3 Termination for Bankruptcy . This Agreement may be terminated by either Party, forthwith, or at any time thereafter by notice to the other if the other becomes bankrupt or insolvent, or enters into liquidation whether compulsorily or voluntarily, or convenes a meeting of its creditors, or has a receiver appointed over all or part of its assets, or ceases for any reason to carry on business. 10.4 Development or Commercial Non-Viability. In the event that CAPSUGEL reasonably determines that the development of the Compound Formulation is not feasible with Commercially Reasonable Efforts in accordance with the Development Plan, with such changes as reasonably requested by CAPSUGEL, then CAPSUGEL may discontinue the development of the Compound Formulation and Product and terminate this Agreement, in which case, CARDAX shall have the right to license the Intellectual Property Rights as provided in Section 4. CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. 15 + + + + + + In the event that CARDAX reasonably determines that, with Commercially Reasonable Efforts by the Parties, the development of a Product is not feasible due to any legal, or technical developments with respect to the Product, including but not limited to conflicts of Intellectual Property Rights; withdrawal of a Product by a major regulatory agency for safety or efficacy reasons; or inability of the Parties to produce a Product that passes FDA required biostudies, in which such developments make the Product nonviable or that the Product is not acceptable to any applicable Marketer, then, CARDAX may elect to discontinue the development of the Product and terminate this Agreement. 10.5 Termination for Force Majeure. Neither Party shall be liable to the other for default or delay in the performance of any of its obligations under this Agreement if such default or delay shall be caused directly or indirectly by accident, fire, flood, riot, war, terrorism, act of God, embargo, strike, failure or delay of normal source of supply of materials, or delay of carriers, equipment failure or complete or partial shutdown of plant by any of the foregoing causes or other causes beyond its reasonable control, including FDA action ("Force Majeure"). 10.6 No Waiver. The failure of either Party to terminate this Agreement by reason of the breach of any of its provisions by the other Party shall not be construed as a waiver of the rights or remedies available for any subsequent breach of the terms and provisions of this Agreement. 10.7 Property. In the event of termination of this Agreement for whatever cause, in addition to the other obligations of the Parties hereunder, each Party shall return to the other Party or to the other Party's designee no later than thirty (30) days after the effective date of termination all of such other Party's property, including all proprietary information, in its possession, except to the extent required to be retained by law or to comply with such Party's continuing obligations hereunder. 10.8 Survival. The provisions of Sections 3.6, 4, 6, 8, 9 and 11 shall survive any termination of this Agreement. Section 11 Miscellaneous 11.1 Dispute Resolution. This Agreement shall be governed by and interpreted in accordance under the laws of the State of New York. Any dispute, controversy or claim arising out of this Agreement, or the breach, termination or invalidity thereof, shall be discussed between the senior management of the Parties who will attempt to resolve the matter amicably. Any disputes which cannot be resolved in this way within sixty (60) days of one Party notifying the other of the existence of a dispute shall be finally settled before JAMS in accordance with the expedited arbitration procedures of JAMS. The arbitration shall be conducted in English in New York, New York, USA. The costs of the arbitration payable to JAMS shall be funded equally by the parties, provided that the prevailing party shall be reimbursed for such costs and expenses and its own actual out of pocket costs CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. 16 + + + + + + 11.2 Integration and Amendment . This Agreement, the Exhibits hereto contain the complete agreement between the Parties with respect to the subject matter hereof. All previous and collateral agreements, representations, warranties, promises and conditions relating to the subject matter of this Agreement are superseded by this Agreement. This Agreement may only be amended by a written instrument duly executed by the Parties hereto. 11.3 Assignment. Neither Party may assign this Agreement without the prior written consent of the other Party; provided, however that either Party may assign in connection with a merger or sale of all or substantially all of its stock or assets, provided the assignee agrees to be bound by all of the terms and conditions of this Agreement. 11.4 Waiver. No waiver of any default by either Party shall be deemed to constitute a waiver of any subsequent default with respect to the same or any other provision hereof. No waiver shall be effective unless made in writing with specific reference to this Agreement and signed by a duly authorized representative of the Party granting the waiver. 11.5 Notice. Any notice or request expressly provided for or permitted under this Agreement shall be in writing, delivered manually or by mail, e- mail, or facsimile and shall be deemed sufficiently given if and when received by the Party to be notified at its address first set forth below, or if and when mailed by registered mail or certified mail, postage prepaid, addressed to such Party at such address, or upon delivery confirmation. Either Party, by notice to the other, may change its address for receiving such notices. If to CAPSUGEL: CAPSUGEL US, LLC 412 Mt. Kemble Ave. Suite 200C Morristown, NJ 07960 USA Attn: President, Dosage Form Solutions Telephone: [***] Facsimile: [***] E-mail: [***] With a copy to CAPSUGEL US, LLC 412 Mt. Kemble Ave. Suite 200C Morristown, NJ 07960 USA Attn: General Counsel Telephone: [***] Facsimile: [***] E-mail: [***] CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. 17 + + + + + + If to CARDAX: CARDAX, Inc. 2800 Woodlawn Dr., Suite 129 Honolulu, HI 96822 Attn: President and CEO Telephone: [***] Facsimile: [***] E-mail: [***] With a copy to Herrick, Feinstein LLP 2 Park Avenue New York, NY 10016 Attn: Richard M. Morris Telephone: [***] Facsimile: [***] E-mail: [***] 11.6 Severability of Provisions. Each provision of this Agreement shall be treated as a separate and independent clause, and the unenforceability of any one clause shall in no way impair the enforceability of any of the other clauses herein. Moreover, if one or more of the provisions contained in this Agreement shall for any reason be held to be excessively broad as to scope, activity, subject or otherwise so as to be unenforceable at law, such provision or provisions shall be construed by the appropriate judicial body or arbitration panel by limiting or reducing such provision or provisions, so as to be enforceable to the maximum extent allowable under the applicable law as such law shall then be. 11.7 Independent Contractors. Each Party hereto shall be an independent contractor of the other. Neither Party shall be the legal agent of the other for any purpose whatsoever and therefore has no right or authority to make or underwrite any promise, warranty or representation, to execute any contract or otherwise to assume any obligation or responsibility in the name of or on behalf of the other Party, except to the extent specifically authorized in writing by the other Party. Neither Party shall be bound by or liable to any third persons for acts or obligations or debts incurred by the other toward such third party, except to the extent specifically agreed to in writing by the Party to be so bound. This Agreement shall not create a partnership or other similar arrangement. 11.8 Announcement. The Parties agree to coordinate external communications (e.g. joint press release) regarding this collaboration. CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. 18 + + + + + + 11.9 Headings; Interpretation. The section headings contained in this Agreement are for convenience of reference only, do not form a part of this Agreement and shall not affect in any way the meaning or interpretation of this Agreement. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words "include," "includes" and "including" shall be deemed to be followed by the phrase "but not limited to." All references herein to Sections, Sections and Exhibits shall be deemed references to Sections and Sections of, and Exhibits to, this Agreement unless the context shall otherwise require. All Exhibits attached to this Agreement shall be deemed incorporated herein by reference as if fully set forth herein. Words such as "herein," "hereof," "hereto," "hereby" and "hereunder" refer to this Agreement and to the Exhibits, taken as a whole. Except as otherwise expressly provided herein: (a) any reference in this Agreement to any agreement shall mean such agreement as amended, restated, supplemented or otherwise modified from time to time; (b) any reference in this Agreement to any law shall include corresponding provisions of any successor law and any regulations and rules promulgated pursuant to such law or such successor law; and (c) all terms of an accounting or financial nature shall be construed in accordance with generally accepted accounting principles, as in effect in the United States from time to time. 11.10 Counterparts. This Agreement may be executed by the Parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original and all of which counterparts taken together shall constitute but one and the same instrument. * * * Signature Page Follows * * * CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. 19 + + + + + + IN WITNESS WHEREOF, the Parties have caused this this Agreement to be executed by their respective duly authorized representatives as of the day and year first above written. CAPSUGEL US, LLC By: /s/ Amit Patel Name: Amit Patel Title: President, Dosage Form Solutions CARDAX, INC. By: /s/ David G. Watumull Name: David G. Watumull Title: President and CEO CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. 20 + + + + + + EXHIBIT A DEVELOPMENT PLAN [***] CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. 21 + + + + + + EXHIBIT B SPECIFICATIONS As provided in Section 1.26, to be provided upon conclusion of the Development Plan CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. 22 + + + + + + EXHIBIT C [***] CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. 23 + + + + + + EXHIBIT D MASS MARKET CHANNELS [***] CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. 24 \ No newline at end of file diff --git a/full_contract_txt/CCAINDUSTRIESINC_04_14_2014-EX-10.1-OUTSOURCING AGREEMENT.txt b/full_contract_txt/CCAINDUSTRIESINC_04_14_2014-EX-10.1-OUTSOURCING AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..e90104f463c82738d10ab0f8d8e6bae8e0d5cdbe --- /dev/null +++ b/full_contract_txt/CCAINDUSTRIESINC_04_14_2014-EX-10.1-OUTSOURCING AGREEMENT.txt @@ -0,0 +1,361 @@ +Exhibit 10.1 + +CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS EXHIBIT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. + +SERVICES OUTSOURCING AGREEMENT + +Between + +CCA INDUSTRIES, INC. ("Company") + +And + +EMERSON HEALTHCARE, LLC ("Contractor") + +DATED AS OF January 20, 2014 + + + + + +CONFIDENTIAL TREATMENT REQUESTED + +This Services Outsourcing Agreement (this "Agreement") is made as of January 20, 2014 (Date), between CCA Industries, Inc. ("Company"), and Emerson HealthCare, LLC, a Pennsylvania limited liability company ("Contractor"). + +RECITALS + +WHEREAS, the Company will own, develop, manufacture or have manufactured, market and sell the products set forth on Exhibit A attached hereto, as the same may be amended from time to time in accordance with the terms hereof (the "Products"), and desires to outsource certain logistical and administrative services with respect to the Products; and + +WHEREAS, the Company desires to engage Contractor to provide certain logistical and administrative services with respect to the Products and Contractor is willing to provide such services in connection therewith, on the terms and conditions set forth in this Agreement. + +NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and Contractor agree as follows: + +ARTICLE I + +GENERAL TERMS + +1.01 Certain Defined Terms. For the purposes of this Agreement, the following capitalized terms shall have the meanings set forth below. + +(a) "Accounts Receivable" shall mean all accounts receivable, notes receivable and other indebtedness due and owed by any Customer and arising or held in connection with the sale of any of the Products. + +(b) "Agreement" shall mean this Agreement, including all Exhibits attached hereto, as the same may be amended, modified or supplemented from time to time in accordance with the terms hereof. + +(c) "Claim" shall have the meaning set forth in Section 7.01. + +(d) "Company" shall have the meaning set forth in the Preamble to this Agreement. + +(e) "Confidential Information" shall have the meaning set forth in Section 5.04. + +(f) "Contractor" shall have the meaning set forth in the Preamble to this Agreement. + +(g) "Customer" means any current or prospective customer of the Company with respect to the Products. + +(h) "Disclosing Party" shall have the meaning set forth in Section 5.04. + +1 + + + + + +CONFIDENTIAL TREATMENT REQUESTED + +(i) "Effective Date" shall have the meaning set forth in Section 2.01. + +(j) "Files and Work Papers" shall have the meaning set forth in Section 5.05. + +(k) "Force Majeure Event" shall have the meaning set forth in Section 8.03. + +(l) "Governmental Authority' means any supranational, national, federal, provincial, state or local judicial, legislative, executive or regulatory authority, body or instrumentality. + +(m) "Gross Invoiced Sales" means the gross selling price (before the application of any non-cash discounts, rebates, credits, allowances or similar deductions or adjustments) less any cash discounts, of all Products that are invoiced to and paid by Customers. + +(n) "Intellectual Property" means all intellectual property rights, including all rights in patents, patent applications, formulae, trademarks, trademark applications, trade names, confidential information, trade secrets, inventions, copyright, industrial designs and know-how. + +(o) "Notice Period" shall mean the period between the termination date of this Agreement and the date that is six (6) months after the date on which the Company provides Contractor with written notice of its election to terminate this Agreement. + +(p) "OHL" means Ozbum-Hessey Logistics, LLC and its Affiliates. + +(q) "Person" means an individual, a limited liability company, a joint venture, a corporation, a partnership, an association, a trust, a division or an operating group of any of the foregoing or any other entity or organization. + +(r) "Products" shall have the meaning set forth in the Recitals to this Agreement. + +(s) "Receiving Party" shall have the meaning set forth in Section 5.04. + +(t) "Sales Representation Agreement" means the sales representation agreement, dated as of the date hereof, between Company and Contractor. + +(u) "Service Fees" shall have the meaning set forth in Section 4.01. + +(v) "Services" means any of the services to be provided by or on behalf of Contractor to the Company under this Agreement and set forth on Exhibit B. + +(w) "Term" shall have the meaning set forth in Section 2.01. + +(x) "Termination Fee" shall mean an amount equal to the average Service Fees per day over the 180 day period immediately preceding the date written notice of termination is provided pursuant to Section 8.01(d) and (e) multiplied by number of days by which the Notice Period will be less than 180. + +(y) "Territory" means the United States, excluding its territories and possessions. + +2 + + + + + +CONFIDENTIAL TREATMENT REQUESTED + +1.02 Interpretation. The words "hereof," "herein," "hereto" and "hereunder" and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The terms defined in the singular shall have a comparable meaning when used in the plural and vice versa. The term "including" shall mean "including, without limitation." When a reference is made in this Agreement to an Article, a Section or an Exhibit, such reference shall be to an Article or a Section of, or an Exhibit to, this Agreement unless otherwise indicated. + +ARTICLE I1 + +TERM: EFFECTIVE DATE + +2.01 Term. This agreement shall commence on January 20, 2014 (the "Effective Date") and shall continue in effect for six (6) months (the "Initial Term"). This agreement shall automatically renew for successive six (6) month periods unless written notice is provided of either party's intent not to renew at least six (6) months before the end of the then-current term. + +2.02 Effective Date. This Agreement shall have no force or effect unless and until the Effective Date. If the Effective Date does not occur, then this Agreement shall be void ab initio and shall have no force or effect. + +ARTICLE III + +OBLIGATIONS OF CONTRACTOR + +3.01 Contractor Services. Contractor shall perform during the Term of this Agreement the Services set forth on Exhibit B in respect of the Products in the Territory. + +3.02 Meetings. Contractor shall meet with the Company on at least a monthly basis, or more often to the extent reasonably requested by the Company, to review historical sales results by Product SKU, forward-looking sales forecasts by Product SKU, current inventories of the Products on hand, production scheduled and to be scheduled of the Products, and any other matters as the parties shall determine. Such meetings shall take place at the offices of the Company (or, at the election of the Company, by video or telephone conference) no later than the fifteenth (15th) day of each calendar month during the Term of this Agreement or at such other time as the parties shall mutually agree. + +3.03 Access. From time to time during the Term of this Agreement, upon reasonable advance notice, Contractor shall permit the Company and its agents, representatives, auditors and designees to visit, inspect and have full access, during normal business hours, to properties, assets, books, records, agreements, documents, data, files and personnel of Contractor. + +3.04 Ownership of Accounts Receivable & Inventory. Contractor acknowledges and agrees that it is acting solely as a collection agent on behalf of the Company with respect to all Accounts + +3 + + + + + +CONFIDENTIAL TREATMENT REQUESTED + +Receivable collected from Customers, and such Accounts Receivable and the proceeds therefrom are and shall remain at all times property of the Company. Contractor further acknowledges and agrees that it has no ownership interest whatsoever in any of the Company's Inventory. + +ARTICLE IV + +PAYMENT + +4.01 Service Fees. In consideration of providing the Services set forth in Exhibit B, the Company agrees to pay to Contractor [ ** ] percent ([ *∗ ]%]) of Company's Gross Invoiced Sales (the "Service Fees"). Company agrees to have Fesnak & Associates, LLP pay the Service Fees directly to Contractor. Service Fees shall be paid to Contractor within five (5) days after the end of each month. + +4.02 Remittance. Contractor shall deposit into bank accounts designated by the Company an amount equal to the following: all amounts received from any Customer that are related to Accounts Receivable, less each of the following that is applicable to any such Accounts Receivable (and has not already been applied to reduce any Accounts Receivable): (i) Service Fees, (ii) commissions pursuant to the Sales Representation Agreement, (iii) returns, (iv) quantity and cash discounts, (v) trade allowances or markdowns granted on account of unsalable or discontinued Products, (vi) all sales or use taxes, tariffs, duties or similar charges of any Governmental Authority paid by or for the benefit of the Company, (vii) freight, warehousing (storage and labor) and other charges associated with the distribution of the Products using Contractor's warehouse, logistics terminal and shipping facility (see Exhibit "C"), (viii) the Company's pro rata portion of product liability insurance (approximately $800 per million dollars of sales) purchased by the Contractor in connection with performance of the Services, and (ix) any other deductions, rebates, credits, allowances or adjustments, in each case, which has been specifically identified by such Customer as being applicable to any such Accounts Receivable. Contractor shall use its best efforts to deposit the foregoing amounts within five (5) business days, following the receipt thereof. + +4.03 Retention of Monies. During the Term of this agreement, and for a period of twenty four (24)months after Termination (the "Withholding Period"), Contractor may retain monies (collections in Accounts Receivable) against any reasonable anticipated deductions for product recalls, unsalables, rebates, allowances or any audits or other adjustments it deems necessary. The retention of monies shall only be to the extent that the reasonable anticipated deductions exceed the anticipated accounts receivables. At the end of the Withholding Period, Contractor shall remit to the Company the retained monies less any deductions charged by Customers against Company's Products. After the Withholding Period, Company will remain liable to Contractor for any additional audits, deductions, rebates, credits, allowances or other adjustments taken by the Customers against the Company's Products. + +4 + + + + + +CONFIDENTIAL TREATMENT REQUESTED + +4.04 Expenses. Other than as specifically provided herein, each party shall be responsible for its own expenses incurred in connection with the performance of its obligations under this Agreement; provided, that the Company shall reimburse Contractor for reasonable documented out-of-pocket travel expenses associated with any meeting specifically requested by the Company and not otherwise contemplated by this Agreement. + +ARTICLE V + +ADDITIONAL AGREEMENTS + +5.01 New Products. The Company may amend Exhibit A to add new products to the scope of this Agreement, including line extensions of the then-existing Products and new brands acquired by the Company that are sold into the same classes of trade as the then-existing Products. + +5.02 Intellectual Property. All rights to either party's Intellectual Property, including all rights in patents, patent applications, formulae, trademarks, trademark applications, trade names, confidential information, trade secrets, inventions, copyright, industrial designs and know-how, ("Intellectual Property") shall remain that party's absolute property during and after the Term of this Agreement. The Products and any Intellectual Property owned by the Company in connection therewith shall be the absolute property of the Company during and after the Term of this Agreement. Neither party shall apply for registration of any trademarks, trade names, or brand names of the other party and each party hereby renounces all rights that it may acquire to such trademarks, trade names or brand names according to law or customs because of this Agreement or because of its use of such trademarks, trade names, or brand names under this Agreement. + +5.03 Grant of Sublicense. Solely to the extent necessary to enable Contractor to provide the Services in accordance with the terms herein, the Company hereby grants Contractor a royalty-free, non-exclusive sublicense, without the right to grant further sublicenses, under any and all applicable trademarks and other Intellectual Property owned or controlled by or licensed to the Company or any of its Affiliates to provide, during the Term of this Agreement, the Services in respect of the Products in the Territory. Nothing contained herein shall give Contractor any right to use any of the Company's Intellectual Property used in connection with the Products or trademarks or trade names that may appear on the labeling for the Products, except for providing the Services in accordance with the terms herein. Except as provided in this Section 5.03, Contractor shall not obtain any right, title or interest in any of the Company's Intellectual Property or trademark or any other trademark designation or trade name by virtue of this Agreement or Contractor's performance of its obligations hereunder. + +5.04 Confidentiality. In performing its obligations under this Agreement, each party may receive information (the "Receiving Party") of a confidential and proprietary nature regarding the other party, including information about such party's intellectual property and its operations, research, + +5 + + + + + +CONFIDENTIAL TREATMENT REQUESTED + +marketing plans, strategies and customer lists (collectively, "Confidential Information"). The Receiving Party shall hold the other party's Confidential Information in strict confidence, shall not use such Confidential Information, except as permitted hereunder, and shall not disclose such Confidential Information to any third party without the prior written consent of the disclosing party (the "Disclosing Party"). Each party shall use the same degree of care to protect the Disclosing Party's Confidential Information as it uses to protect its own Confidential Information of like nature, but in no circumstances less than a commercially reasonable level of care. The Receiving Party shall ensure that its employees and agents are bound to the same obligations of confidentiality as the Receiving Party. Confidential Information shall not be deemed to include: (a) information which is known to the Receiving Party prior to the date of receipt and not obtained or derived in any manner related to this Agreement, (b) information which is or becomes part of the public domain through no fault of the Receiving Party, or (c) information which is obtained from a third party that lawfully possesses such Confidential Information and is under no obligation to keep such Confidential Information confidential. The Receiving Party may disclose Confidential Information of the Disclosing Party in response to a valid court order, law, rule, regulation or other governmental action, provided that the Disclosing Party is notified in writing prior to disclosure of such Confidential Information to permit the Disclosing Party to oppose such disclosure by appropriate legal action. Upon the termination or expiration of this Agreement or upon the earlier request of the Disclosing Party, the Receiving Party shall (i) promptly return to the Disclosing Party all Confidential Information, or (ii) upon written request by the Disclosing Party, destroy all Confidential Information and provide the Disclosing Party with written certification of such destruction. Upon the termination or expiration of this Agreement, the Receiving Party shall cease all further use of any Confidential Information, whether in tangible or intangible form. + +5.05 Records Management. All paper or electronic records, files, documents, work papers and other information in any form, whether marked "confidential" or not, provided by the Company, its employees, agents or Affiliates or generated pursuant to this Agreement shall remain the exclusive property of the Company (collectively, "Files and Work Papers"). During the Term of this Agreement and for a reasonable transitional period thereafter, Contractor shall maintain adequate levels of information technology system redundancy, security and emergency back-up as the Company may reasonably require to protect the Files and Work Papers of the Company. + +5.06 Vendors. Contractor shall retain Fesnak & Associates, LLP to provide accounting services in connection with Contractor's performance of the Services and shall not engage a different accountant to provide such services without the Company's prior written consent (not to be unreasonably withheld). Contractor and the Company are arranging for OHL to provide certain warehousing, shipping and other logistical services related to the Products, as mutually agreed by the parties, and Contractor shall not engage a different vendor with respect to such services without the Company's prior written consent (not to be unreasonably withheld). + +6 + + + + + +CONFIDENTIAL TREATMENT REQUESTED + +ARTICLE VI + +REPRESENTATIONS AND WARRANTIES + +6.01 Representations and Warranties of Contractor. As of the date hereof, Contractor hereby represents and Warrants to the Company that the execution and delivery of this Agreement, and the performance of Contractor's obligations hereunder, do not and will not conflict with, violate or breach, or constitute a default or require any consent under, any contractual obligation or court or administrative order by which Contractor is bound. + +6.02 Representations and Warranties Company. As of the date hereof, the Company hereby represents and warrants to Contractor that the execution and delivery of this Agreement, and the performance of the Company's obligations hereunder, do not and will not conflict with, violate or breach, or constitute a default or require any consent under, any contractual obligation or court or administrative order by which the Company is bound. + +ARTICLE VII + +INDEMNIFICATION AND INSURANCE + +7.01 Indemnification by the Company. The Company hereby agrees to indemnify and hold Contractor, including its Affiliates and its and their respective officers, directors, partners, members, employees and agents, harmless from and against any and all claims, actions, suits, losses, demands, damages, costs and expenses (including reasonable attorneys' fees) of every kind, nature, or description (each, a "Claim") brought in connection with, arising out of or related to the Products or the Company's breach of its representations, warranties or covenants hereunder, except those Claims arising out of Contractor's or its Affiliates' fraud, willful misconduct, negligence or material breach of this Agreement or any other agreement with the Company. + +7.02 Indemnification by Contractor. Contractor hereby agrees to indemnify and hold the Company, including its Affiliates and its and their respective officers, directors, partners, members, employees and agents, harmless from and against any and all Claims brought in connection with or arising out of or related to Contractor's or its Affiliates' fraud, willful misconduct, negligence or material breach of this Agreement. + +7.03 Insurance. Company shall maintain Products Liability Insurance and in an amount satisfactory to Contractor, under which Contractor is named as an additional insured. All insurance coverages are to be placed with insurers which have a Best's rating of no less than "A." Such insurance requirements shall be maintained during the Term and shall continue for a minimum of three years following termination of this Agreement. Failure to comply with the insurance requirements shall place Company in material breach of this Agreement. + +ARTICLE VIII + +7 + + + + + +CONFIDENTIAL TREATMENT REQUESTED + +TERMINATION + +8.01 Termination. This Agreement shall be terminable as follows: + +(a) In the event that a party hereto commits a material breach of any of the terms or conditions of this Agreement the other party may terminate this Agreement (i) if such breach may be cured, upon written notice if the breaching party fails to cure such breach within thirty (30) days after its receipt of written notice thereof, or (ii) if such breach is incapable of cure, upon written notice to the other party thereof (it being understood that any breach of Section 5.04 would be incapable of cure); + +(b) Notwithstanding the provisions of Section 8.01, in the event that a party hereto fails to pay any amounts payable hereunder when due, the other party may terminate this Agreement (i) if such breach may be cured, upon written notice if the breaching party fails to cure such breach within three (3) business days after its receipt of written notice thereof; or, (ii) if such breach is incapable of cure, upon written notice to the other party thereof; + +(c) In accordance with the provisions of Section 8.03; or, + +(d) Either party hereto may terminate this Agreement after the Initial Period upon at least six (6) months' prior written notice to the other party thereof. The Company may terminate this Agreement in accordance with the immediately preceding sentence but with less than six (6) months' prior written notice to Contractor; provided, that in such event, the Company shall pay Contractor an amount equal to the Termination Fee. + +8.02 Effect of Termination. Subject to Section 4.03, upon termination or expiration of this Agreement, other than with respect to any amounts then the subject of a good faith dispute, the Company shall pay to Contractor and Contractor shall pay to the Company all monies due in respect of the Services provided. + +8.03 Force Majeure. If either party is prevented from or delayed in performing any of its obligations hereunder due to any cause which is beyond the nonperforming party's reasonable control, including, without limitation, fire, explosion, flood, or other acts of God; acts, regulations, or laws of any Governmental Authority; war or civil commotion; acts of terrorism, strike, lock-out or labor disturbances; or failure of public utilities or common carriers (a "Force Majeure Event"), such non-performing party shall not be liable for breach of this Agreement with respect to such non-performance or delay to the extent any such non-performance or delay is due to a Force Majeure Event; provided, that the non-performing party gives immediate written notice to the other party of the Force Majeure Event. If a Force Majeure Event asserted as the basis of a party's non-performance continues to prevent performance for more than one (1) month, the other party may terminate this Agreement by giving written notice to the nonperforming party before the non-performing party resumes performance. Notwithstanding anything contained in this Section 8.03, + +8 + + + + + +CONFIDENTIAL TREATMENT REQUESTED + +such non-performing party shall exercise commercially reasonable efforts to eliminate the Force Majeure Event and to resume timely performance of its affected obligations as soon as practicable. + +ARTICLE IX + +MISCELLANEOUS + +9.01 Relationship of the Parties. The relationship of the Company and Contractor established by this Agreement is that of independent contractors, and nothing contained herein shall be construed to (a) give either party any right or authority to create or assume any obligation or incur any expense of any kind on behalf of the other without the other party's prior written approval, or (b) constitute the parties as partners, joint venturers, co-owners, employer and employee or otherwise as participants in a joint or common undertaking. + +9.02 Notices. All notices and other communications shall be in writing and shall be deemed to have been duly given when: (a) delivered personally, or (b) transmitted by facsimile (with receipt confirmed), or (c) if mailed, five (5) days after being deposited in the United States mail, postage prepaid, or by certified or registered mail, return receipt requested, postage prepaid, or (d) if sent by overnight courier for delivery on the next day, the day following deposit of the notice with Federal Express or another nationally recognized overnight courier service (billed to sender), to the parties at the following addresses: + +If to Contractor: Emerson HealthCare, LLC Attention: Scott Emerson 407 East Lancaster Avenue Wayne, Pennsylvania 19087 Telephone: (610) 971-9600 Facsimile: (610) 971-9616 With a copy to: Steven L. Gershman, Esq. The Navy Yard Corporate Center One Crescent Drive Suite 400 Philadelphia, PA 19112 Telephone (215) 271-6102 Facsimile: (215) 218-2039 If to the Company: CCA Industries, Inc. Attention: Chief Executive Officer 200 Murray Hill Parkway East Rutherford, NJ 07073 + +9 + + + + + +CONFIDENTIAL TREATMENT REQUESTED + +Telephone (201) 935-3232 Facsimile: (201) 842-6049 + +With a copy to: CCA Industries, Inc. Attention: Chief Financial Officer 200 Murray Hill Parkway East Rutherford, NJ 07073 Telephone (201) 935-3232 Facsimile: (201) 842-6049 9.03 Failure to Exercise. The failure of either party to enforce at any time for any period any provision hereof shall not be construed to be a waiver of such provision or of the right of such party thereafter to enforce each such provision, nor shall any single or partial exercise of any right or remedy hereunder preclude any other or further exercise thereof or the exercise of any other right or remedy. Remedies provided herein are cumulative and not exclusive of any remedies provided at law. + +9.04 Assignment. This Agreement may not be assigned by either party without the prior written consent of the other party, except that, without such consent, (i) Company may make an assignment of this Agreement as collateral security in favor of its lenders, and (ii) the Company may assign this Agreement to a purchaser of all or substantially all of the assets of the Company's business related to the Products. Subject to the foregoing sentence, this Agreement shall bind and inure to the benefit of the parties hereto and their respective successors and assigns. + +9.05 No Third Party Beneficiaries. Nothing in this Agreement, express or implied, is intended to confer upon any Person other than the Company and Contractor, or their successors or permitted assigns, any rights or remedies under or by reason of this Agreement. + +10 + + + + + +CONFIDENTIAL TREATMENT REQUESTED + +9.06 Severability. Any term or provision of this Agreement that is deemed invalid or unenforceable in any jurisdiction shall, to the extent the economic benefits conferred by such Agreement to both parties remain substantially unimpaired, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions of this Agreement or affecting the validity or enforceability of any of the terms or provisions of this Agreement in any other jurisdiction. + +9.07 Governing Law. This Agreement shall be deemed to have been entered into in the State of New Jersey, and shall be construed and interpreted in accordance with the laws of that State applicable to agreements made and to be performed in the State of New Jersey. Any and all disputes, controversies and claims arising out of or relating to this Agreement, or with respect to the interpretation of this Agreement, or the rights or obligations of the parties and their successors and permitted assigns, whether by operation of law or otherwise, shall be settled and determined by arbitration in New Jersey pursuant to the then existing rules of the American Arbitration Association for commercial arbitration. The arbitrators shall have the power to award specific performance, rescission or injunctive relief in addition to damages or other monetary awards, but shall not have the power to modify, alter, enlarge upon or otherwise change any of the provisions or terms and conditions of this Agreement. The arbitration shall be final and binding upon the parties and judgment there on may be entered in the courts of the State of New Jersey and the United States federal courts in said State, and the parties hereby consent to the jurisdiction of such courts for such purposes. Service of any notice, process, motion or other document in connection with any arbitration proceeding, any arbitration award or any other action or proceeding, maybe by personal service or by certified or registered mail return receipt requested, addressed to the party intended at its address for the receipt of notices as herein set forth. + +9.08 Headings. The headings used herein have been inserted for convenience only and shall not affect the interpretation of this Agreement. + +9.09 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, and together shall constitute one and the same agreement and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other party, it being understood that both parties need not sign the same counterpart. + +9.10 Entire Agreement. NO VARIATIONS OR MODIFICATIONS OF THIS AGREEMENT SHALL BE DEEMED VALID UNLESS REDUCED TO WRITING AND SIGNED BY THE PARTIES HERETO. THIS AGREEMENT CONTAINS THE ENTIRE AGREEMENT AMONG THE PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF AND SUPERSEDES ALL PRIOR AGREEMENTS AND UNDERSTANDINGS, ORAL OR WRITTEN, WITH RESPECT TO SUCH MATTERS, EXCEPT FOR ANY WRITTEN AGREEMENT OF THE PARTIES THAT EXPRESSLY PROVIDES THAT IT IS NOT SUPERSEDED BY THIS AGREEMENT. ANY PROVISION OF THIS AGREEMENT MAY BE AMENDED OR WAIVED + +11 + + + + + +CONFIDENTIAL TREATMENT REQUESTED + +IF, AND ONLY IF, SUCH AMENDMENT OR WAIVER IS IN WRITING AND SIGNED (I) IN THE CASE OF AN AMENDMENT, BY THE COMPANY AND CONTRACTOR AND (II) IN THE CASE OF A WAIVER, BY THE PARTY AGAINST WHOM THE WAIVER IS TO BE EFFECTIVE. + +9.11 Survival. Sections 5.02, 5.04, 5.05 and 8.02, and Articles Article IV, Article VII and Article IX shall survive the expiration or termination of this Agreement in accordance with the respective terms thereof. + +IN WITNESS WHEREOF, the parties have executed or caused this Agreement to be executed as of the date first written above. + +EMERSON HEALTHCATE, LLC "Contractor" + +By: /s/s Scott Emerson Scott Emerson + +and + +CCA INDUSTRIES, INC. "Company" + +By: /s/ Richard Kornhauser Richard Kornhauser, President & CEO + +12 + + + + + +CONFIDENTIAL TREATMENT REQUESTED + +EXHIBIT A TO SERVICES OUTSOURCING AGREEMENT + +List of Products: + +List to be furnished by CCA + +13 + + + + + +CONFIDENTIAL TREATMENT REQUESTED + +EXHIBIT B TO SERVICES OUTSOURCING AGREEMENT + +SEE-ATTACHED FLOW CHARTS + + + +14 + + + + + +CONFIDENTIAL TREATMENT REQUESTED + +EXHIBIT C - LOGISTIC EXPENSES + +• Outbound freight costs - average out to be approximately [ ** ] cents per lb. + +• Warehouse labor [ ** ] cents per case. + +• There is no charge for unloading and putting away inbound product as long as product arrives on standardized configured pallets. The labor charge only occurs when the product is shipped outbound to customers/retailers. + +• Storage cost of [ ** ] cents per month per case - First [ ** ] days for each case no charge - If case sits longer than [ *∗ ] days the monthly charge applies going forward. + +• For International Sales the above warehouse labor and storage costs apply. There will be no Service Fee paid for international sales, but Company understands that Contractor will not be performing any services. It is assumed buyer will be paying for freight for International Sales. + +15 \ No newline at end of file diff --git a/full_contract_txt/CENTRACKINTERNATIONALINC_10_29_1999-EX-10.3-WEB SITE HOSTING AGREEMENT.txt b/full_contract_txt/CENTRACKINTERNATIONALINC_10_29_1999-EX-10.3-WEB SITE HOSTING AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..3f74194b95562806978b1850854aa098d4a7412f --- /dev/null +++ b/full_contract_txt/CENTRACKINTERNATIONALINC_10_29_1999-EX-10.3-WEB SITE HOSTING AGREEMENT.txt @@ -0,0 +1,139 @@ +1 Exhibit 10.3 + +I-on. (LOGO) www.i-on.com 561.394.9484 o 561.394-9773 fax 1733 avenida del sol, boca raton, florida, 33432 + +WEB SITE HOSTING AGREEMENT + +This WEB SITE HOSTING AGREEMENT ("this Agreement") is entered into this 6th day of April, 1999 by and between Centrack International, a Florida corporation ("the Customer"), and i-on interactive, a Florida corporation ("i-on"). + +DEFINITIONS + +As used in this Agreement, the term "Web site" shall mean a computer system intended to be accessed through the World Wide Web segment of the Internet, including software and content intended to be viewed and/or operated upon by persons accessing the computer system via the Internet. A Web site may exist on a single computer system with other Web sites. + +The term "Hosted Site" shall mean the Web site of the Customer that is hosted by i-on under the terms and conditions of this Agreement. + +The term "Hosting Computer" shall mean the computer system and related equipment on which the Hosted Site exists. + +SERVICES PROVIDED TO THE CUSTOMER + +i-on will maintain the operation of the Hosted Site continuously, twenty-four (24) hours per day, seven (7) days per week, including holidays, with the exception of reasonable hardware and software maintenance that must be performed on the Hosting Computer and/or the Hosted Site. i-on will use best efforts to schedule and perform such maintenance between the hours of 8pm and 8am Eastern Standard Time on weekdays, or during weekends. + +Under this Agreement, i-on will provide the following limited services for the Hosted Site: + + 1. connectivity to the Internet via a T1 (that may be shared by other Web sites) to a leading Internet backbone access provider such as UUNET, and reasonable efforts to maintain such connectivity with the phone company and the Internet backbone access provider; + + 2. use of the Hosting Computer (that may be shared by other Web sites) as described in this Agreement and maintenance required to keep such Hosting Computer in good working order; + + 3. physical space for the Hosting Computer at a facility that maintains proper environmental conditions in the area(s) where the Hosting Computer is located and maintains reasonable efforts to prevent unauthorized access to the physical location of the Hosting Computer; + + 4. an emergency electrical power backup system for the Hosting Computer; + + 5. up to 150 MB of mirrored computer storage on the Hosting Computer; + + 6. archival backups of such mirrored computer storage on a weekly basis; 2 7. off-site storage of such backups at separate facility than the location of the Hosting Computer; + + 8. use of the Microsoft Windows NT Server 4.0 or higher operating system software for the Hosting Computer and the Hosted Site; + + 9. use of the Microsoft Internet Information Service (IIS) 3.0 or higher Web server software for the Hosted Site (providing support for the HTTP Web protocol); + + 10. use of the Microsoft SQL Server 6.5 or higher database server software for the Hosted Site, within the boundaries of allocated computer storage, per #5 above; + + 11. access to the Hosted Site via the ftp protocol to an administrative account designated by the Customer for the Customer to maintain the Hosted Site's static content (such as HTML Web pages and computer graphics); + + 12. up to 10 mailboxes accessible via the POP3 mail protocol that are mapped to the Hosted Site's Internet address; + + 13. up to 1 hour per month of Web site administration services at no additional charge, limited to: + + requests for changes to ftp/e-mail users and passwords; requests for e-mail configuration changes; modification of mail aliases; changes to server MIME types; files restored from backup; + + + + + + answering questions about server-side scripts; ftp configuration changes; log file configuration changes; importing or exporting of database records; and consultation on site operation and administration. + + Additional Web site administration services will be billed at $200 per hour. + + 14. a monthly report of user activity on the Hosted Site. + +RESPONSIBILITIES OF THE CUSTOMER + +The Customer is responsible for paying i-on the recurring monthly fee in the amount of $450. The Customer is responsible for paying the recurring monthly fees by the 5th day of each month beginning in April 1, 1999. The Customer acknowledges that failure to pay such fees in a timely manner will result in the interruption or discontinuation of services for the Hosted Site. + +The Customer is solely responsible for all content on the Hosted Site, including but not limited to, HTML pages, graphics, sounds, animations, video clips, Java applets, client-site scripts such as JavaScript and VBScript features, ActiveX controls, and other files and/or executable components for use or download by the users of the Hosted Site, as well as the accuracy and validity of any information or data contained within, as well as the overall look-and-feel of the Hosted Site from a user's perspective. The Customer is solely responsible for the ongoing maintenance of such content. The Customer acknowledges that this Agreement is explicitly not an agreement for i-on to provide content creation or maintenance services for the Hosted Site. + +The Customer is solely responsible for all customer support required by users of Hosted Site. In the case of a problem with the Hosted Site that is the responsibility of i-on according to this Agreement, the Customer shall directly notify i-on, which shall report the resolution of such problem directly to the Customer. If the problem of which i-on is notified is not a problem that is the responsibility of i-on according to this Agreement, the time spent by i-on relating to the incident will count towards the Customer's monthly allocation of Web administration services, and any additional time + +3 exceeding such allocation will be billed to the Customer at the rate set forth for such services. At no time will i-on take responsibility for directly interacting with the Customer's users. The Customer acknowledges that this Agreement is explicitly not an agreement for i-on to provide "help desk" services to the users of the Hosted Site. + +The Customer is solely responsible for all marketing and promotion of the Hosted Site and is solely responsible for generating traffic to the Hosted Site. + +The Customer is solely responsible for the security of its administrator account(s) and respective password(s) for the Hosted Site, and is solely responsible for any loss of data or damage to the Hosted Site that arises out of any breach of such security. + +The Customer is solely responsible for any and all advertising on the Hosted Site. + +The Customer is responsible for any and all software programs, server-side scripts, and/or executable components that are installed on the Hosting Computer for the purpose of providing interactive applications or dynamic content on the Hosted Site. Any such programs, scripts, or components that might affect the stability of the Hosting Computer or interfere with other Web sites on the Hosting Computer must be approved by i-on before being installed on the Hosted Site, i-on reserves the right to deny the Customer permission to install any such programs, scripts, or components, to require additional fees for the installation and/or ongoing operation of any such programs, scripts, or components, or to remove any such programs, scripts, or components, if in i-on's sole discretion they will interfere with the operation of the Hosting Computer or exceed the Customer's monthly allocation of Web administration services. + +CONDITIONS OF SERVICE + +The Customer acknowledges that the Internet is an unreliable, unsecured, and error-prone network and agrees to hold i-on harmless for any interruptions in service to the Hosted Site or inability for users to reach or effectively use the Hosted Site that arises outside the scope of i-on's responsibilities as explicitly described in this Agreement. + +The Customer acknowledges that data loss is a possibility, even with mirrored computer storage and archival backup of such storage as provided by i-on per this Agreement, and agrees to hold i-on harmless for any such data loss for the Hosted Site, provided that i-on maintains reasonable steps as described in this Agreement to protect against such data loss. + +The Customer shall use i-on's resources in a manner that is clearly consistent with the purposes of the products and services offered. The Customer shall comply with applicable laws, standards, policies, and procedures. The Customer incurs the responsibility to determine what restrictions apply and to review the policies and procedures that will be updated continually. The customer is responsible to use the resources with sensitivity to the rights of others. Any conduct by the Customer that in i-on's sole discretion restricts or inhibits any other user, whether a customer of i-on or a user of any other system, from using and enjoying any of i-on's services is strictly prohibited. This includes, but is not limited to, the posting or transmitting on or through any of i-on's + + + + + +services, any information that is, in i-on's sole discretion, unlawful, obscene, threatening, abusive, libelous, or harmful, or encourages conduct that would constitute a criminal offense, give rise to civil liability, or otherwise violate any local, state, national, or International law. + +The Customer expressly agrees to use all of i-on's services only for lawful purposes. Transmission or storage of any information, data, or material in violation of United States or state regulation or law is prohibited, including but not limited to, material protected by copyright, trademark, trade secret, or any other statute. + +TERM AND TERMINATION + +The term of this Agreement for the Hosted Site shall commence upon April 1, 1999 and shall continue for a period of six (6) months, unless earlier terminated in accordance with provisions hereof. This Agreement shall automatically be renewed for one (1) or more one (1) month periods unless either the Customer or i-on gives notice to the other party of its intention not to renew the + +4 Agreement, which notice must be given not less than fifteen (15) days before the end of the respective initial or renewal term. + +Either party may terminate this Agreement without cause at any time effective upon thirty (30) days' written notice. Notwithstanding anything to the contrary contained in this Agreement, no termination of this Agreement for any reason whatsoever shall relieve the Customer of the obligation to pay all amounts due to i-on and to make such payments on a timely basis. + +LIMITATION OF LIABILITY + +i-on will not be liable under any circumstances for any lost profits or other consequential damages, even if i-on has been advised as to the possibility of such damages. i-on's liability for damages to the Customer for any cause whatsoever, regardless of the form of action, and whether in contract or in tort, including negligence, shall be limited to one (1) month's fees and the remaining portion of any prepaid fees. + +INDEMNIFICATION + +The Customer agrees to indemnify and hold harmless i-on, against any lawsuits, claims, damages, or liabilities (or actions or proceedings in respect thereof) to which i-on may become subject related to or arising out of Customer's use of i-on's services, and will reimburse i-on for all legal and other expenses, including attorney's fees, incurred in connection with investigating, defending, or settling any such loss, claim, damage, liability, action, or proceeding whether or not in connection with pending or threatened litigation in which i-on is a party. The provisions of this Agreement relating to indemnification shall survive termination of the Customer's Hosted Site. + +THIRD-PARTY SOFTWARE + +i-on expressly assumes no responsibility of the proper operation or maintenance of any of the Centrack site software that we authored by Imaginet and/or other third parties. + +MISCELLANEOUS + +This Agreement constitutes the entire understanding and agreement between the parties hereto and supersedes any and all prior or contemporaneous representations, understandings, and agreements between the Customer and i-on with respect to the subject matter hereof, all of which are merged herein. The parties understand that work i-on does in the development and maintenance of Web content and applications for Centrack International is governed by separate agreement(s). + +Nothing contained herein shall be deemed or construed to create a joint venture or partnership between the Customer and i-on. Neither party is, by virtue of this Agreement or otherwise, authorized as an agent or legal representative of the other party. Neither party is granted any such right or authority to assume or to create any obligation or responsibility, express or implied, on behalf of or in the name of the other party or to bind such other party in any manner. + +No waiver of any provision of this Agreement or any rights or obligations of either party hereunder shall be effective, except pursuant to a written instrument signed by the party or parties waiving compliance, and any such waiver shall be effective only in the specific instance and for the specific purpose stated in such writing. + +In the event that any provision hereof is found invalid or unenforceable pursuant to judicial decree or decision, the remainder of this Agreement shall remain valid and enforceable according to its terms. + +This Agreement was entered into in the State of Florida, and its validity, construction, interpretation, and legal effect shall be governed by the laws and judicial decisions of the State of Florida applicable to contracts entered into and performed entirely within the State of Florida. + +Neither the Customer nor i-on shall be deemed in default if its performance or obligations hereunder are delayed or become impossible or impractical by reason of any act of God, war, + +5 fire, earthquake, labor dispute, sickness, accident, civil commotion, epidemic, act of government or government agency or offices, or any other cause beyond + + + + + +such party's control. + +IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first set forth above. + +CENTRACK INTERNATIONAL, INC. I-ON INTERACTIVE, INC. + +By: /s/ JOHN J. LOFQUIST By: /s/ ANNA TALERICO ------------------------- ----------------------------- Name: John J. Lofquist Name: Anna Talerico Title: President & CEO Title: Vice President \ No newline at end of file diff --git a/full_contract_txt/CERES,INC_01_25_2012-EX-10.20-Collaboration Agreement.txt b/full_contract_txt/CERES,INC_01_25_2012-EX-10.20-Collaboration Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..3db1145190cc5cb2fd2a4594948f3fc2fa580c10 --- /dev/null +++ b/full_contract_txt/CERES,INC_01_25_2012-EX-10.20-Collaboration Agreement.txt @@ -0,0 +1,6298 @@ +Exhibit 10.20 + +Pages where confidential treatment has been requested are stamped 'Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission,' and the confidential section has been marked as follows: [***]. + +Collaboration Agreement + +between + +Institute of Grassland and Environmental Research + +and + +Ceres, Inc. CERES-IGER Collaboration Agreement Page 1 of 75 + + + + + + + +TABLE OF CONTENTS 1. RESEARCH PROJECTS 3 2. MANAGEMENT COMMITTEE 7 3. EXCLUSIVITY 8 4. INTELLECTUAL PROPERTY 11 5. USE AND COMMERCIALIZATION RIGHTS 14 6. ENFORCEMENT OF JOINT INTELLECTUAL PROPERTY RIGHTS 16 7. CONFIDENTIALITY 16 8. PUBLICATIONS 18 9. PUBLICITY 18 10. RECORDS AND AUDITS 19 11. INDEPENDENT CONTRACTOR 19 12. CONVENTION ON BIOLOGICAL DIVERSITY 19 13. WARRANTIES 20 14. TERM AND TERMINATION 23 15. DISPUTE RESOLUTION AND APPLICABLE LAW 25 16. NOTICES 26 17. GENERAL 27 18. SPECIAL CONDITIONS IN CONNECTION WITH DEFRA AGREEMENT NF 0426 28 EXHIBIT A 30 DEFINITION OF COLLABORATION CROPS 30 EXHIBIT B 31 PREFERRED FORM OF RECEIPT FORM 31 EXHIBIT C 32 PREFERRED FORMS OF VARIETY EVALUATION AGREEMENT 32 EXHIBIT D 50 EXTERNAL FUNDING EXHIBIT E 50 51 + +EXISTING AGREEMENTS 51 EXHIBIT F 56 PRODUCTION AND COMMERCIALIZATION ACTIVITIES 56 EXHIBIT G 57 MODEL LICENSE AGREEMENT FOR NON-TRANSGENIC VARIETIES / NON-UK 57 EXHIBIT H 74 CERTAIN REMUNERATION PRINCIPLES 74 CERES-IGER Collaboration Agreement Page 2 of 75 + + + + + + + +COLLABORATION AGREEMENT + +THIS AGREEMENT is made this 1st day of April, 2007 ("Effective Date"), by and between INSTITUTE OF GRASSLAND AND ENVIRONMENTAL RESEARCH ("IGER"), a company limited by guarantee, registered in England No. 473456 and a registered Charity No. 272150, having an office at Plas Gogerddan, Aberystwyth, Ceredigion, SY23 3EB, United Kingdom and CERES, INC. ("CERES"), a Delaware corporation, having an office at 1535 Rancho Conejo Blvd., Thousand Oaks, California 91320, United States of America. + +WHEREAS, the Parties wish to establish a research program for undertaking specific, collaborative projects after the Effective Date, to further the scientific research and commercial objectives of CERES as well as the scientific research objectives of IGER; + +WHEREAS, the research programs contemplated by this Agreement and its schedules are consistent with and in furtherance of IGER research programs; + +WHEREAS, CERES and IGER recognize that rights to intellectual property conceived or reduced to practice in the performance of the Parties' collaboration can be a strong incentive for CERES to risk money and other resources needed to develop proprietary products for wide commercialization; + +NOW THEREFORE, in consideration of the premises and of the mutual covenants and agreements contained herein and of other good and valuable consideration, the Parties have agreed and do hereby agree as follows: + +1.1 CERES and IGER anticipate that from time to time they may undertake and conduct certain joint and collaborative research projects (individually a "RESEARCH PROJECT" and collectively "RESEARCH PROJECTS"). The Parties acknowledge and agree that the RESEARCH PROJECTS will involve the contributions, whether financial or otherwise, of both Parties. The specific terms and respective obligations of the Parties for each RESEARCH PROJECT will be negotiated by the Parties and reflected in a schedule ("SCHEDULE") signed by authorized representatives of both Parties. Any such fully executed SCHEDULE shall become a part of this Agreement and subject to the terms of this Agreement. Each Party shall diligently perform its activities in any given RESEARCH PROJECT. + +1.2 All rights in property, tangible or intangible, used in the RESEARCH PROJECTS shall remain with the Party providing such property, unless otherwise agreed between the Parties in this Agreement, a SCHEDULE or a separate agreement. + +1.3 RESEARCH PROJECTS will relate to crop species defined in EXHIBIT A to this Agreement ("COLLABORATION CROPS"). + +1.4 Each SCHEDULE will at least contain the following: + +1. RESEARCH PROJECTS. + + • research activities to be performed by each Party in detail CERES-IGER Collaboration Agreement Page 3 of 75 + + + + + + + +1.5 Unless a SCHEDULE provides for more frequent formal reporting, each Party shall provide to the other Party a detailed, written annual report on its activities in each RESEARCH PROJECT, as described in each SCHEDULE. In addition, upon the request of either Party at any time, the Parties will discuss the RESEARCH PROJECTS, their status, the progress and results achieved, and they will make available each RESEARCH PROJECT principal investigator (and other employees as needed, in the discretion of the respective RESEARCH PROJECT principal investigators) at mutually agreeable times, as needed, for such discussions; provided however, such contacts and discussions shall be reasonable in frequency and duration so as not to be disruptive to the respective research activities of each Party or the research activities of the RESEARCH PROJECTS. Each Party will also voluntarily provide data, information and material generated in the RESEARCH PROJECT to the other Party as required to further the Parties' mutual goals defined in each RESEARCH PROJECT or in any other agreement between the Parties. Each Party will have the right, upon reasonable notice to the other Party, to visit any location where RESEARCH PROJECT activities are conducted for the purposes of evaluating RESEARCH PROJECT progress and outcomes, and particularly to make observations of any plants in growth chambers, greenhouses or fields that are a part of a RESEARCH + + • timelines of such activities + + • goals, expected results and deliverables + + • milestones and "go" and "no-go" decision points + + • all reports to be delivered to the MANAGEMENT COMMITTEE (Article 2) and the required delivery dates for the same + + • additional information on RESEARCH PROJECT activities: breeding records and biological or other material generated in such activities to be provided to the other Party, including delivery method and time + + • location of activities + + • identity of RESEARCH PROJECT principal investigators for CERES and IGER + + • identity and location of any SUBCONTRACTORS (Article 1.13) to be used for the RESEARCH PROJECT activities + + • number of FTE's made available by each Party for the RESEARCH PROJECT, including names of any IGER PhD-level employees + + • other inputs and resources made available by each Party for the RESEARCH PROJECT + + • financial contributions of each Party to the RESEARCH PROJECT + + • provisions on intellectual property, including lists of BACKGROUND INTELLECTUAL PROPERTY and any provisions which are different from those set forth in this Agreement + + • provisions on use and commercialization rights which are different from those set forth in this Agreement + + • provisions on expiration and early termination + + CERES-IGER Collaboration Agreement Page 4 of 75 + + + + + + + +PROJECT. Each Party will comply with any reasonable safety and security measures which may be imposed by the other Party when visiting such other Party's location. + +1.6 Any transfer of information or material pursuant to this Agreement or any SCHEDULE will be governed by the provisions of this Agreement on CONFIDENTIALITY (Article 7) and PUBLICATIONS (Article 8). Any transfer of material shall be accompanied by a receipt form in the preferred format attached as EXHIBIT B to this Agreement. Such receipt forms shall be signed by representatives of both the sending and receiving Parties. + +1.7 Unless otherwise specified in a SCHEDULE, each Party shall bear its own costs and pay its own SUBCONTRACTORS, with respect to its RESEARCH PROJECT activities. + +1.8 Where a SCHEDULE provides that CERES will make a financial contribution to certain RESEARCH PROJECT activities performed by IGER, unless agreed otherwise in the appropriate SCHEDULE, IGER will submit invoices after the end of each calendar quarter for the work performed during that quarter. Each such invoice shall reflect only those costs that have been incurred in performance of the RESEARCH PROJECT and shall provide a breakdown of costs similar to the detail set forth in the budget of the related SCHEDULE. CERES will pay all such invoices within thirty (30) days after the invoice date. Payments shall be remitted to: + +Institute Secretary Institute of Grassland and Environmental Research Plas Gogerddan Aberystwyth Ceredigion SY23 3EB United Kingdom + +1.9 Each Party will conduct RESEARCH PROJECT activities exclusively in laboratories, greenhouses or fields under full control of that Party or of its SUBCONTRACTORS authorized by this Agreement. Each Party will take all reasonable precautions to prevent damage to, or unintentional destruction of or release of any germplasm created in the RESEARCH ACTIVITIES. + +1.10 Each Party shall be responsible for its compliance with all applicable laws, rules and regulations, including, without limitation, those relating to genetically modified organisms (to the extent RESEARCH PROJECTS involve such organisms). Each Party shall obtain any and all permits or authorizations or proceed to any notifications which may be required by such laws, rules and regulations. + +1.11 Each Party will require any and all of its employees or students who will perform activities in RESEARCH PROJECTS to be bound by a written agreement(s) that commits their inventions, discoveries and other intellectual property to the Party-employer and requires confidential treatment of Party and third-party confidential information. + +1.12 The RESEARCH PROJECT principal investigators named in each SCHEDULE shall be charged with leading the RESEARCH PROJECT described therein. CERES-IGER Collaboration Agreement Page 5 of 75 + + + + + + + +1.12.1 RESEARCH PROJECT principal investigators may not vary the SCHEDULE of delivery, amount, method of payment or any provision of a SCHEDULE. No such change shall be effective unless and until it is reduced to writing in the form of an amendment to such SCHEDULE in accordance with Article 17.1. + +1.12.2 Substitution by IGER of a RESEARCH PROJECT (a) principal investigator or (b) a CERES-funded, PhD-level, IGER employee named or filling a defined position listed in a SCHEDULE shall be subject to CERES' prior written approval, which will not unreasonably be withheld or delayed. IGER will notify CERES, in writing, of any substitution by IGER of a non-CERES-funded, PhD-level employee named or who filled a defined position listed in a SCHEDULE. CERES will notify IGER, in writing, of any substitution by CERES of a RESEARCH PROJECT principal investigator or a PhD-level CERES employee named or who filled a defined position listed in a SCHEDULE. + +1.13 Each Party may subcontract certain parts of its RESEARCH PROJECT activities to third parties, or use third party consultants in connection with RESEARCH PROJECT activities, but only if the subcontract or consultancy agreement is in writing and complies with the terms and conditions set forth hereinafter. Such third parties with whom such a subcontract or consultancy agreement is executed will be referred to as "SUBCONTRACTORS". + +1.13.1 Any intended agreement with a SUBCONTRACTOR shall be identified in a SCHEDULE if known at the time the SCHEDULE is executed by the Parties. IGER will obtain CERES' prior written consent before entering into any agreement with a SUBCONTRACTOR which is not listed in a SCHEDULE. + +1.13.2 The following terms and conditions shall apply to IGER's SUBCONTRACTORS: (a) the SUBCONTRACTOR shall perform defined activities on behalf and for the benefit of IGER in exchange for a fee or other tangible consideration; (b) the SUBCONTRACTOR shall deliver all the results of the SUBCONTRACTOR'S activities under the subcontract to IGER only, and assign ownership of or exclusively license any inventions made during the performance of the subcontracting activities to IGER, without any further remuneration and (c) the SUBCONTRACTOR shall not have the right to use any results, whether information or material, for any purpose whatsoever other than the performance of the subcontract; provided however, not-for-profit research institution SUBCONTRACTORS may be granted the right to use certain information generated pursuant to the subcontract for their internal academic research and educational purposes (i.e., not in collaboration with or for the benefit of any third party). IGER will provide to CERES a draft copy of any subcontract IGER is planning to conclude at least fifteen (15) days before the scheduled signature date and will provide a true copy of any subcontract to CERES within thirty (30) days of its execution. + +1.13.3 It is anticipated that any agreements with commercial SUBCONTRACTORS will be entered into by CERES. At CERES' request, IGER will assist CERES in identifying SUBCONTRACTORS for any field activities. The following conditions shall apply to CERES SUBCONTRACTORS: CERES will inform IGER, in writing, of any SUBCONTRACTORS used by CERES for the performance of RESEARCH PROJECT activities. CERES-IGER Collaboration Agreement Page 6 of 75 + + + + + + + +1.13.4 All SUBCONTRACTORS shall be bound by confidentiality obligations consistent with the terms and obligations of this Agreement. All SUBCONTRACTORS shall be responsible for their respective compliance with all laws, rules and regulations that govern their activities. + +1.13.5 For variety evaluation and performance testing using not-for-profit research institution SUBCONTRACTORS, the Parties agree that each transfer of plant material shall be governed by a written agreement consistent with the preferred forms set forth in EXHIBIT C to this Agreement. + +1.14 The Parties mutually agree that any applications for extramural funding for a RESEARCH PROJECT, from governmental authorities or other public sources, will be subject to the prior, written agreement, neither unreasonably withheld or delayed, by both Parties; provided however, the Parties acknowledge that CERES and/or IGER has or has applied for certain government, extramural funding prior to the Effective Date (EXHIBIT D to this Agreement), and such funding (or possible funding, if awarded) shall not be construed as a breach of the obligations of this Article. + +1.15 IGER agrees not to accept research funding from for-profit entities to perform any RESEARCH PROJECT, whether in whole or in part, initiated under this Agreement without the prior written consent of CERES. + +1.16 The Parties acknowledge and agree that certain RESEARCH PROJECT activities may be covered by government funding set forth in EXHIBIT D and corresponding agreements set forth in EXHIBIT E, as indicated in the relevant SCHEDULE(S). In particular, the Parties acknowledge and agree that IGER will comply with its obligations under the DEFRA project NF 0426 "The generic improvement of miscanthus for biomass" ("DEFRA agreement NF 0426"), including without limitation its obligation to meet the objectives set forth in such project and to report to DEFRA on its results relating to such activities. The Parties further agree that such compliance will not affect any provisions of this Agreement nor of any SCHEDULE, except if explicitly provided otherwise, including without limitation the provisions on INTELLECTUAL PROPERTY in Article 4 and on USE AND COMMERCIALIZATION RIGHTS in Article 5. + +2.1 The Parties will establish a MANAGEMENT COMMITTEE to supervise the implementation, execution and progress of this Agreement and its RESEARCH PROJECTS. The MANAGEMENT COMMITTEE will consist of four (4) members, two (2) to be appointed by each Party and will meet at least once every calendar quarter, in person or by telephone, on dates and at locations to be mutually agreed. The representatives of each Party may invite other employees of that Party to meeting on an as-needed basis, subject to prior notification of the other Party. + +2.2 Decisions of the MANAGEMENT COMMITTEE shall be made by unanimous agreement and recorded in a manner prescribed by the MANAGEMENT COMMITTEE as a true record of the decisions. If the MANAGEMENT COMMITTEE cannot come to a unanimous agreement on any matter then the status quo shall apply. + +2.3 The responsibilities of the MANAGEMENT COMMITTEE shall be as follows: + +2. MANAGEMENT COMMITTEE. + + CERES-IGER Collaboration Agreement Page 7 of 75 + + + + + + + +3.1 In consideration of CERES' development of new markets for the COLLABORATION CROPS and the significant activities associated with the development of this market, IGER agrees to grant CERES exclusive access to IGER's plant improvement activities specifically involving the COLLABORATION CROPS, whether through plant breeding, transformation, propagation methods or otherwise, subject however to the exceptions expressly set forth in this Agreement. + +3.2 During the term of this Agreement, subject to the provisions of this Agreement on subcontracting (Article 1.13 and its related subsections) and subject to the agreements entered into by IGER prior to the Effective Date and defined in EXHIBIT E to this Agreement, as such agreements exist on the Effective Date ("EXISTING AGREEMENTS"), IGER agrees to comply with the obligations set forth hereinafter: + +3.2.1 for-profit third parties. + +IGER will not collaborate with or perform any activities for the benefit of or grant any rights to any for-profit third party in the field of the COLLABORATION CROPS without the prior written consent of CERES. + + - supervise and review the implementation of the RESEARCH PROJECTS; + + - approve principal investigators and project teams for RESEARCH PROJECTS; + + - determine the resources necessary to achieve the goals of each RESEARCH PROJECT, within the limits of the RESEARCH PROJECT budget provided in the relevant SCHEDULE; + + - adjust the research activities defined in a RESEARCH PROJECT, subject to the overall budget for that RESEARCH PROJECT in a given year; + + - review achievement of goals and timelines; propose adjustments of goals or timelines to the Parties; + + - review achievement of agreed annual milestones for overhead payment purposes and make recommendations relating to milestones to the Parties; + + - review proposed publications and formulate recommendations to the Parties on publications; + + - review intellectual property matters relating to the implementation of this Agreement and formulate recommendations to the Parties regarding such matters; + + - review subcontracting matters and formulate recommendations to the Parties regarding such matters; + + - review reports to be provided pursuant to SCHEDULES; + + - such other responsibilities as the Parties jointly may explicitly grant to the MANAGEMENT COMMITTEE. + +3. EXCLUSIVITY. + + CERES-IGER Collaboration Agreement Page 8 of 75 + + + + + + + +a. CERES will not unreasonably withhold its consent for collaborations with small companies (less than fifty (50) employees including world-wide affiliates) established in the United Kingdom ("UK COMPANIES"), with respect to research programs involving COLLABORATION CROPS in the field of environmental impact, carbon sequestration, climate change mitigation, agronomy, or compositional or conversion analysis, provided that (i) IGER will receive the exclusive right (subject to Articles 5.1.2(a) and 5.2) to use and exploit commercially the results of such research programs for GERMPLASM IMPROVEMENT (as defined hereinafter) of the COLLABORATION CROPS, (ii) CERES will have access to the results of such research programs to the extent allowed by the relevant agreement between IGER and the third party and IGER will use reasonable efforts to obtain such right for CERES, and (iii) there is no conflict with CERES' commercial interests. + +b. CERES recognizes that IGER may receive requests from third parties to make available germplasm of CERTAIN MISCANTHUS ACCESSIONS. IGER will have the right to make available germplasm of CERTAIN MISCANTHUS ACCESSIONS to third parties for research purposes (including breeding), subject to the terms and conditions under which IGER holds such accessions. "CERTAIN MISCANTHUS ACCESSIONS" shall mean the Miscanthus accessions collected by IGER in 2006 from China, Taiwan and Japan, as originally collected by IGER. + +3.2.2 not-for-profit third parties. + +a. "GERMPLASM IMPROVEMENT" shall mean any activities to improve a crop, including without limitation selection, breeding, transgenic improvement, markers, propagation systems: + +IGER will not collaborate with or perform any activities for the benefit of or grant any rights to any not-for-profit third party with respect to GERMPLASM IMPROVEMENT of COLLABORATION CROPS without the prior written consent of CERES. CERES will not unreasonably withhold its consent for research programs with respect to GERMPLASM IMPROVEMENT of COLLABORATION CROPS with academic institutions in the European Union under United Kingdom government or European Union funding, provided that (i) IGER will have the exclusive right to use and exploit commercially the results of such research programs obtained by IGER, (ii) no COLLABORATION CROP germplasm will be made available by IGER to any third party for selection, breeding or propagation work, or for genetic transformation of such germplasm, except that IGER may make available germplasm of CERTAIN MISCANTHUS ACCESSIONS for research purposes (including breeding), subject to the terms and conditions under which IGER holds such accessions, and (iii) if requested by CERES, IGER will use reasonable efforts to obtain commercialization rights for CERES on results CERES-IGER Collaboration Agreement Page 9 of 75 + + + + + + + +obtained by third parties in such collaborative research programs or breeding activities. + +b. environmental impact, carbon sequestration, climate change or agronomy studies, and compositional or conversion analysis: + +if IGER would enter into any agreement (or amendment of an existing agreement including without limitation EXISTING AGREEMENTS) after the Effective Date with a not-for-profit third party with respect to research in the field of environmental impact, carbon sequestration, climate change mitigation, agronomy, or compositional or conversion analysis relating to COLLABORATION CROPS, such agreement must provide that (i) IGER will receive the exclusive right (subject to Articles 5.1.2(a) and 5.2) to use and exploit commercially the results obtained pursuant to such agreement for GERMPLASM IMPROVEMENT of COLLABORATION CROPS and (ii) CERES will have access to the results of such research programs to the extent allowed by the relevant agreement between IGER and the third party and IGER will use reasonable efforts to obtain such right for CERES. + +3.2.3 IGER will provide a draft of any agreement intended to cover an activity referred to in Article 3.2.1 a. or b. or 3.2.2 a. or b. to CERES, together with its written request for consent where such consent needs to be obtained. CERES will respond in writing within thirty (30) days or such other period of time as the Parties may agree in writing. In exceptional urgent cases, when asked by IGER, CERES will respond as soon as reasonably possible. Further, where Articles 3.2.1 or 3.2.2 refer to Ceres' access to results or right to use and commercially exploit such results, IGER will report such results to CERES in compliance with the terms hereof. + +3.2.4 Whenever rights are granted to IGER pursuant to agreements referred to in Articles 3.2.1 or 3.2.2 ("Third Party Agreement Rights"), the provisions of this Agreement about the grant of rights by IGER to CERES will apply and such Third Party Agreement Rights shall be treated as IGER INTELLECTUAL PROPERTY (unless they qualify as JOINT INTELLECTUAL PROPERTY under the circumstances). + +3.3 During the term of this Agreement, IGER will notify CERES, in writing, of any contemplated internal (i.e. not involving third parties but including government-funded) research activities (i.e., non-RESEARCH PROJECTS) that specifically involve the COLLABORATION CROPS, except research activities that relate solely to environmental impact, carbon sequestration, climate change or agronomy studies. If CERES so requests, the Parties will negotiate in good faith to agree on a new RESEARCH PROJECT and accompanying SCHEDULE or an amendment to an existing SCHEDULE on the basis of such research proposal. If CERES does not request such negotiations, or if the Parties fail to reach agreement on a new SCHEDULE (or amendment to an existing SCHEDULE) within thirty (30) days (or such other time period as the Parties may agree) from IGER's notice, IGER will have the right, subject to Articles 3.2 and 5.3, to proceed to such internal research, and IGER will provide a written report to CERES on the results of such research. CERES is hereby granted a first option, to be exercised by written notice within thirty (30) days from CERES-IGER Collaboration Agreement Page 10 of 75 + + + + + + + +IGER's aforementioned written report or such other time period as the Parties may agree to be granted the same right as set forth in Article 5.3 to commercialize any results of such activities. + +3.3.1 If CERES exercises its option to commercialize under Article 3.3, CERES and IGER shall negotiate the terms of a commercialization agreement that covers the reported result with reference to any commercialization agreement then in existence between the Parties or the model license agreement or remuneration principles included herein (as applicable). If, despite the Parties' good faith efforts, CERES and IGER are unable to agree upon the terms and conditions of such agreement within one hundred and eighty (180) days after commencing good faith negotiations, CERES shall have the right to start the dispute resolution procedure in Article 15 for any outstanding unresolved issues. + +3.3.2 If CERES declines to exercise the option under Article 3.3 or fails to respond within thirty (30) days of IGER's notice under Article 3.3, then IGER shall then be free to commercially exploit the results or offer rights in such results to third parties in any and all crops. + +3.3.3 IGER will have no restrictions to undertake internal (i.e. not involving third parties but including government-funded) research activities that involve COLLABORATION CROPS but relate solely to environmental impact, carbon sequestration, climate change or agronomy studies. IGER will use all reasonable efforts to inform CERES of the results of any such activities. + +4.1 "JOINT INTELLECTUAL PROPERTY" shall mean (a) all patentable inventions conceived, discovered, developed and/or reduced to practice (i) jointly by one or more employees, agents, or students of CERES and by one or more employees, agents, or students of IGER in the performance of any RESEARCH PROJECT(S) or (ii) by one or more employees, agents or students of IGER in the performance of any RESEARCH PROJECT(S) to the extent CERES provides a financial contribution for such RESEARCH PROJECT, which is not less than twenty-five percent (25%) of either the overall cost of such RESEARCH PROJECT or of the activity during which the invention was made, unless expressly provided otherwise in a SCHEDULE; (b) patents, patent applications, plant variety rights, plant variety right applications, reissues, continuations, continuations-in-part and divisionals claiming such patentable inventions in any country of the world; (c) all trade secrets and copyrighted works created jointly by one or more employees, agents, or students of CERES and by one or more employees, agents, or students of IGER in the performance of any RESEARCH PROJECT(S); and (d) all germplasm and plant varieties created in the performance of plant breeding activities in the performance of any RESEARCH PROJECT(S). + +4.2 "CERES INTELLECTUAL PROPERTY" shall mean (a) all patentable inventions conceived, discovered, developed, and/or reduced to practice by one or more employees, agents, or students of CERES in the performance of any RESEARCH PROJECT(S), except as set forth in Article 4.1; (b) patents, patent applications, plant variety rights, plant variety right applications, reissues, continuations, continuations-in-part, and divisionals claiming such patentable inventions in any country of the world; and (c) all trade secrets and copyrighted works created by one or more employees, agents, or students of CERES in the performance of any RESEARCH PROJECT(S) . + +4. INTELLECTUAL PROPERTY. + + CERES-IGER Collaboration Agreement Page 11 of 75 + + + + + + + +4.3 "IGER INTELLECTUAL PROPERTY" shall mean (a) all patentable inventions conceived, discovered, developed, and/or reduced to practice by one or more employees, agents, or students of IGER in the performance of RESEARCH PROJECT(S), except as set forth in Article 4.1; (b) patents, patent applications, plant variety rights, plant variety right applications, reissues, continuations, continuations-in-part, and divisionals claiming such patentable inventions in any country of the world; and (c) all trade secrets and copyrighted works created by one or more employees, agents, or students of IGER in the performance of RESEARCH PROJECT(S). + +4.4 "OTHER RESEARCH RESULTS" shall mean all data, information, procedures, techniques and know-how generated in the performance of RESEARCH PROJECT(S), but expressly excludes JOINT INTELLECTUAL PROPERTY, CERES INTELLECTUAL PROPERTY, and IGER INTELLECTUAL PROPERTY. + +4.5 "BACKGROUND INTELLECTUAL PROPERTY" shall mean (i) inventions, discoveries, materials, data and information, whether patentable or not; including related know-how; (ii) patents, patent applications, plant variety rights, plant variety right applications, reissues, continuations, continuations-in-part and divisionals in any country of the world; and (iii) trade secrets or copyrighted works, which are individually or collectively created, developed, made, acquired or licensed in by CERES or IGER independent of the activities performed pursuant to this Agreement, including its SCHEDULES. + +4.5.1 Any Party asserting that certain intellectual property is BACKGROUND INTELLECTUAL PROPERTY shall have the burden of substantiating such claim, if necessary, with tangible evidence, including but not limited to paper or electronic records. + +4.5.2 The Parties acknowledge and agree that all relevant BACKGROUND INTELLECTUAL PROPERTY for a RESEARCH PROJECT should be set forth within the corresponding SCHEDULE. With respect to each element of BACKGROUND INTELLECTUAL PROPERTY listed in a SCHEDULE, the listing Party shall include the following: ownership or licensed rights (exclusive or non-exclusive) held by the listing Party (if no ownership) with respect to the COLLABORATION CROPS. Notwithstanding, subject to Article 4.5.1, failure to specifically set forth such BACKGROUND INTELLECTUAL PROPERTY in a SCHEDULE will not foreclose a later claim that certain intellectual property is BACKGROUND INTELLECTUAL PROPERTY. + +4.6 CERES and IGER shall have an undivided interest in JOINT INTELLECTUAL PROPERTY. Consequently, any and all patent applications or plant variety rights applications that cover JOINT INTELLECTUAL PROPERTY shall be assigned jointly to CERES and IGER as soon as practicable. + +4.6.1 All rights and title to CERES INTELLECTUAL PROPERTY and CERES BACKGROUND INTELLECTUAL PROPERTY shall belong to CERES, and IGER shall not acquire any interest in the same by its performance under this Agreement. + +4.6.2 All rights and title to IGER INTELLECTUAL PROPERTY and IGER BACKGROUND INTELLECTUAL PROPERTY shall belong to IGER, and CERES shall not CERES-IGER Collaboration Agreement Page 12 of 75 + + + + + + + +acquire any interest in the same by its performance under this Agreement, except as expressly provided in this Agreement. + +4.7 Each Party will notify the other Party, in writing ("INVENTION NOTICE"), within thirty (30) days of reduction to practice or knowledge of conception or discovery of JOINT INTELLECTUAL PROPERTY, and each INVENTION NOTICE will describe the JOINT INTELLECTUAL PROPERTY with sufficient specificity to allow assessment by the other Party. + +4.8 The Parties shall consult as soon as possible but in any case within twenty (20) days of receiving an INVENTION NOTICE whether to proceed to obtain intellectual property protection on the disclosed JOINT INTELLECTUAL PROPERTY or whether to protect the same through other methods. CERES shall have the first option to pursue such protection in its best judgment in the joint names of both Parties. If CERES so elects by written notice within sixty (60) days of such initial consultation, CERES shall be the "ADMINISTERING PARTY" for the purposes of this Agreement. + +4.8.1 The ADMINISTERING PARTY shall be responsible for retaining counsel, overseeing the process of securing intellectual property protection (i.e., the preparation, filing and prosecution of patent or plant variety rights application(s)) and maintaining intellectual property protection for the mutual benefit of the Parties, in its best judgment, for that which it has prosecution responsibility. In addition to other reporting responsibilities provided below, the ADMINISTERING PARTY shall promptly notify the other Party following retention of counsel. The Parties will provide, and cause their respective employees, agents and students to provide, all reasonable assistance which may be required in connection with the filing and prosecution of such intellectual property rights, including without limitation the signing of documents. + +4.8.2 The ADMINISTERING PARTY shall keep the non-administering Party advised as to all developments with respect to all patent and plant variety rights application(s) and issued patents and plant variety rights covering jointly owned JOINT INTELLECTUAL PROPERTY, which includes supplying copies of all papers received and filed in connection with such applications and patents in sufficient time for the non- administering Party to comment thereon. + +4.9 CERES agrees to bear all legal expenses incurred by CERES as an ADMINISTERING PARTY in obtaining and maintaining patents and plant variety rights, U.S. and other, covering JOINT INTELLECTUAL PROPERTY. + +4.10 If CERES does not elect to file an application for a patent or plant variety rights or continue maintenance of a patent or plant variety rights in a particular country, consistent with the consultation of Article 4.8, IGER may file such application, continue such prosecution, or maintain such patent or plant variety rights at its own expense; provided however, that prior to filing any such application IGER will not take any action or proceed to any filing which would lead to the possible disclosure of information which CERES wishes to keep confidential, as notified by CERES to IGER in writing. For any such application, patent or plant variety rights, IGER shall serve as the ADMINISTERING PARTY. CERES shall have non- exclusive rights under the specific patent application(s), plant variety right application(s), patent(s) and/or plant variety right(s) in the country(ies) in which CERES declined to initiate or continue its participation, subject to paying IGER CERES-IGER Collaboration Agreement Page 13 of 75 + + + + + + + +reasonable remuneration (whether as a royalty or in some other form as the Parties may agree) to be negotiated in good faith, and in any case CERES shall remain free to use and practice the JOINT INTELLECTUAL PROPERTY covered by such specific patent application(s)/patent(s) or plant variety rights application(s)/plant variety right(s) for research and evaluation purposes. + +4.11 At each quarterly meeting of the MANAGEMENT COMMITTEE, CERES will report CERES INTELLECTUAL PROPERTY on which patent applications were filed in the preceding quarter and the general subject matter of patent applications reasonably anticipated to be filed in the near term, and IGER will report IGER INTELLECTUAL PROPERTY on which patent applications were filed in the preceding quarter and the general subject matter of patent applications reasonably anticipated to be filed in the near term. In addition, the Parties may exchange information regarding their respective INTELLECTUAL PROPERTY at other times as they deem fit. + +4.12 The provisions of this Article 4 and specifically but without limitation the definitions in Articles 4.1 through 4.4 and Articles 4.6 and 4.7 shall apply to any results obtained in RESEARCH PROJECTS, including results of activities covered by EXISTING AGREEMENTS, except if expressly provided otherwise in a SCHEDULE or in Article 18. + +5.1.1 Through the express grant of such rights in any SCHEDULE, CERES may grant IGER the right to use CERES INTELLECTUAL PROPERTY to the extent required for, and for the sole purpose of, the performance by IGER (or its SUBCONTRACTORS) of RESEARCH PROJECTS. SCHEDULES may specify that similar rights are granted with respect to defined elements of CERES BACKGROUND INTELLECTUAL PROPERTY. + +5.1.2 IGER shall have the right to use JOINT INTELLECTUAL PROPERTY and OTHER RESEARCH RESULTS (a) for the purpose of the implementation of RESEARCH PROJECTS; (b) subject to Article 3 and CERES' prior written approval, for internal research purposes and research under United Kingdom government or European Union funding in collaboration with academic institutions in the European Union, provided that CERES' approval may be conditional upon (i) CERES receiving the exclusive right (subject to Articles 5.1.2(a) and 5.2) to use and exploit commercially the results of such research in COLLABORATION CROPS, (ii) adequate safeguards to prevent unauthorized use or disclosure of JOINT INTELLECTUAL PROPERTY, OTHER RESEARCH RESULTS or results directly or indirectly based on any of the foregoing and (iii) CERES reviewing and approving the terms and conditions of any agreement governing such research activities. + +5.2.1 "RELEASED VARIETY" shall mean any variety of a COLLABORATION CROP which constitutes JOINT INTELLECTUAL PROPERTY and which is released for commercialization pursuant to a SCHEDULE. IGER shall have the non-exclusive right to exploit commercially RELEASED VARIETIES in the United Kingdom. + +5. USE AND COMMERCIALIZATION RIGHTS. + + 5.1 IGER Research Rights. + + 5.2 Commercialization Rights of IGER in the United Kingdom. + + CERES-IGER Collaboration Agreement Page 14 of 75 + + + + + + + +5.2.2 If the commercial exploitation of a RELEASED VARIETY in the United Kingdom by IGER requires a license on CERES INTELLECTUAL PROPERTY or BACKGROUND INTELLECTUAL PROPERTY of CERES, CERES shall negotiate in good faith with IGER or a designee of IGER about the grant of such a license, provided however that CERES shall have no obligation to grant any license on transgenes or transgenic technologies. + +5.2.3 Unless otherwise agreed by the Parties, IGER shall pay royalties to CERES under its non-exclusive right set forth in Article 5.2.1 at a rate equal to one half of the royalty rate in CERES' exclusive license agreement for the same RELEASED VARIETY, and CERES shall pay royalties at the same rate to IGER for sales by CERES, its AFFILIATED COMPANIES or licensees in the United Kingdom. + +5.3.1 Subject to Articles 5.1 and 5.2, the Parties acknowledge and agree that CERES shall have the exclusive right, with the right to grant sublicenses to this right, to use and commercially exploit JOINT INTELLECTUAL PROPERTY (including but not limited to RELEASED VARIETIES) and OTHER RESEARCH RESULTS for any and all uses and fields, including, but not limited to, use in the COLLABORATION CROPS and crops other than the COLLABORATION CROPS. Any commercialization (including, but not limited to, the grant of commercialization licenses) of JOINT INTELLECTUAL PROPERTY and/or OTHER RESEARCH RESULTS shall result in CERES paying IGER a reasonable remuneration (whether as a royalty or in some other form as the Parties may agree) to be negotiated in good faith. The terms for remuneration will be specified, with respect to specific RESEARCH PROJECTS, JOINT INTELLECTUAL PROPERTY and/or OTHER RESEARCH RESULTS, either in the respective SCHEDULES or in other agreements to be executed by the Parties. + +5.3.2 Subject to Articles 5.1 and 5.2, IGER grants CERES an exclusive, world-wide license, with the right to grant sublicenses, to use and exploit commercially (a) IGER's interest in any JOINT INTELLECTUAL PROPERTY (including but not limited to RELEASED VARIETIES) and OTHER RESEARCH RESULTS; (b) IGER INTELLECTUAL PROPERTY and (c) when and only to the extent necessary for the commercialization or use of JOINT INTELLECTUAL PROPERTY and/or OTHER RESEARCH RESULTS and/or IGER INTELLECTUAL PROPERTY for the COLLABORATION CROPS, IGER BACKGROUND INTELLECTUAL PROPERTY, subject to paying IGER reasonable remuneration (whether as a royalty or in some other form as the Parties may agree) to be negotiated in good faith. Such license grants will be further specified in SCHEDULES to this Agreement and/or other agreements to be executed by the Parties. Unless otherwise agreed by both Parties, license agreements for non-transgenic RELEASED VARIETIES will be based on the Model License Agreement for Non-transgenic Varieties in EXHIBIT G or such other model license agreements as the Parties may agree upon. Certain remuneration principles to be included in other license agreements, unless the Parties agree otherwise, are set forth in EXHIBIT H. + + 5.3 Commercialization Rights — Other. + + CERES-IGER Collaboration Agreement Page 15 of 75 + + + + + + + +6.1 CERES will have the right, at its own discretion and expense, to take any action to enforce and to initiate and prosecute suits for infringement of jointly owned intellectual property rights covering JOINT INTELLECTUAL PROPERTY. CERES and IGER will consult with each other upon a course of action and enforcement strategy. CERES will be responsible for the conduct of any such enforcement action, and IGER will reasonably cooperate with CERES to effect the enforcement action, and if appropriate, determine a settlement position. CERES shall be responsible for retaining counsel and shall promptly notify IGER following retention of counsel, and IGER agrees to be represented by such counsel as may be required for any enforcement action or settlement. For purposes of settlement, CERES shall be the contact with the Parties' counsel as well as the opposing Party(ies) and shall have the right to enter into settlements. CERES shall keep IGER advised as to all developments with respect to the enforcement action and settlement discussions, which includes supplying to IGER copies of all papers received and filed in sufficient time for IGER to comment thereon. IGER may attend any and all meetings with the Parties' counsel and the opposing side for settlement purposes. IGER agrees to join voluntarily in any action brought by CERES as a Party plaintiff/defendant, if necessary, at the expense of CERES. If necessary, IGER agrees to enter into a joint defense agreement. + +6.2 In situations where a substantial commercial interest of IGER in the United Kingdom is harmed by infringement, and CERES elects not to pursue any action to enforce and to initiate and prosecute suits for infringement, IGER shall have the right to pursue any such action and CERES will reasonably cooperate with IGER, if necessary, to permit IGER to properly enforce its rights. IGER will be responsible for the conduct of any such enforcement action. IGER shall be responsible for retaining counsel and shall promptly notify CERES following retention of counsel, and CERES agrees to be represented by such counsel as may be required for any enforcement action or settlement. For purposes of settlement, IGER shall be the contact with the Parties' counsel as well as the opposing Party(ies) and shall have the right to enter into settlements. IGER shall keep CERES advised as to all developments with respect to the enforcement action and settlement discussions, which includes supplying to CERES copies of all papers received and filed in sufficient time for CERES to comment thereon. CERES may attend any and all meetings with the Parties' counsel and the opposing side for settlement purposes. CERES agrees to join voluntarily in any action brought by IGER as a Party plaintiff/defendant, if necessary, at the expense of IGER. If necessary, CERES agrees to enter into a joint defense agreement. + +6.3 Any damages received by a Party as a result of an enforcement action of rights to JOINT INTELLECTUAL PROPERTY, after deduction of all enforcement related costs incurred by such Party, shall be considered as revenues for the purpose of remuneration payments to the other Party, as set forth in any applicable license/commercialization agreement between the Parties. In the absence of any such license/commercialization agreement, the Parties will share such damages after deduction of all enforcement related costs incurred by the Party receiving the damages, in proportion to their relative financial contributions to the creation (i.e., research and development) of such JOINT INTELLECTUAL PROPERTY. + +7.1 As used in this Agreement, the term "Confidential Information" shall mean (a) all non-public information and material received by one Party from the other in furtherance of the + +6. ENFORCEMENT OF JOINT INTELLECTUAL PROPERTY RIGHTS. + +7. CONFIDENTIALITY. + + CERES-IGER Collaboration Agreement Page 16 of 75 + + + + + + + +collaboration contemplated by this Agreement and (b) any and all information, results including material and observations generated in the performance of any RESEARCH PROJECT including, without limitation, CERES INTELLECTUAL PROPERTY, IGER INTELLECTUAL PROPERTY, JOINT INTELLECTUAL PROPERTY and OTHER RESEARCH RESULTS. Confidential Information can include, but is not limited to, information concerning the disclosing Party's operations, research, processes, techniques, data and non-public materials. + +7.2 Subject to Article 7.3, for a period of five (5) years after the termination of the related RESEARCH PROJECT, the receiving Party shall not use, except (a) for the benefit of the Parties' collaboration or (b) such use as is expressly allowed by this Agreement and/or disclose any Confidential Information to any third party (i) without the prior written consent of the disclosing Party if the Confidential Information was received from the other Party, or (ii) the prior written consent of both Parties if the Confidential Information was generated during a RESEARCH PROJECT, provided however that CERES shall have no restrictions regarding CERES INTELLECTUAL PROPERTY or regarding any information of material resulting from RESEARCH PROJECT activities in which IGER does not participate. Confidential Information shall only be made accessible to each Party's employees or students on a need-to-know basis and not to any third party, subject to Articles 7.3 and 7.4. Manuscripts and papers published in scientific journals and presentations made at public meetings that include Confidential Information are exempt from the confidentiality obligations of this Article, provided the Parties followed the procedure set forth in Article 8. + +7.3 The receiving Party shall have no obligations of confidentiality for information that: can be established through written evidence to be in the possession of the receiving Party prior to the disclosure by the disclosing Party; is or becomes public knowledge through no fault of the disclosing Party; and/or is acquired from others not under an obligation of confidentiality to the disclosing Party. In addition, the Parties, pursuant to the express terms of this Agreement or any SCHEDULE or other agreement between the Parties, shall have the right to proceed to disclosures of Confidential Information (a) as required to file for intellectual property protection or registration or deregulation or approval of genetically modified organisms; (b) as required to exercise commercialization rights granted in or on the basis of this Agreement and for related marketing activities; (c) as required by laws, rules or regulation or court ordering such as, without limitation, SEC regulations and IRS regulations; or (d) in CERES' reasonable judgment for the limited purpose of (potential) investors and business partners, but only with respect to the Confidential Information defined in Article 7.1 (b) and not other Confidential Information of IGER. + +7.4 The Parties acknowledge and agree that IGER will comply with its reporting obligations to DEFRA as required by the DEFRA agreement NF 0426 referred to in EXHIBIT E, provided that IGER shall (i) not disclose any CERES BACKGROUND INTELLECTUAL PROPERTY, CERES INTELLECTUAL PROPERTY or OTHER RESEARCH RESULTS obtained by CERES, (ii) use all reasonable efforts to ensure that the confidentiality of all other results of RESEARCH PROJECTS is maintained to the extent allowed by the applicable regulations, and (iii) provide a draft of any such report to CERES at least thirty (30) days before the submission date and take CERES' comments, if any, into account. CERES-IGER Collaboration Agreement Page 17 of 75 + + + + + + + +8. PUBLICATIONS. + +8.1 The Parties agree that the researchers involved in the RESEARCH PROJECTS are permitted to present methods and/or results of the RESEARCH PROJECTS at symposia and professional meetings and to publish the same in journals or the like; provided however, the disclosing Party must furnish copies of any proposed publication, presentation or disclosure (collectively "Disclosure") to the other Party at least thirty (30) days in advance of the specific submission, presentation or other disclosure. + +8.2 The non-disclosing Party shall have the thirty (30) day notice period to object, in writing, to such proposed Disclosure because it contains (a) potentially patentable subject matter that needs protection or (b) BACKGROUND INTELLECTUAL PROPERTY or JOINT INTELLECTUAL PROPERTY or INTELLECTUAL PROPERTY of the non-disclosing Party or OTHER RESEARCH RESULTS which need to be kept confidential for compelling business reasons in the non-disclosing Party's reasonable judgment. In the event that the non-disclosing Party makes such objection, the disclosing Party will (x) if applicable, elect to cooperate with the non-disclosing Party to obtain proper protection in accordance with the provisions of Article 4 herein or (y) remove the objectionable subject matter from the Disclosure. No delay caused by the non-disclosing Party under this Article shall extend beyond three (3) months, wherein upon such delay, the disclosing Party shall be permitted to proceed without being in breach of this Article. + +8.3 CERES and IGER shall use reasonable efforts to avoid any action that might jeopardize the ability of the Parties, individually or jointly as the case may be, to obtain or retain valid/enforceable intellectual rights in JOINT INTELLECTUAL PROPERTY, IGER INTELLECTUAL PROPERTY or CERES INTELLECTUAL PROPERTY. + +8.4 Nothing in this Article 8 shall restrict disclosures that are allowed under Article 7. + +8.5 Upon recommendation of the MANAGEMENT COMMITTEE, the Parties may adopt alternative review processes, in particular for information to be presented at symposia or professional meetings or for activities directed towards legislative and regulatory bodies. + +9.1 CERES will not identify IGER in any products, publicity, promotion, promotional advertising or other promotional materials to be disseminated to the public, or use any trademark, service mark, trade name, logo or symbol that is representative of IGER or its entities, whether registered or not, or use the name, title, likeness or statement of any IGER faculty member, employee or student, without IGER's prior written consent. Any use of IGER's name shall be limited to statements of fact and shall not imply endorsement by IGER of CERES' research, products or services. + +9.2 IGER will not identify CERES in any products, publicity, promotion, promotional advertising or other promotional materials to be disseminated to the public, or use any trademark, service mark, trade name, logo or symbol that is representative of CERES or its entities, whether registered or not, or use the name, title, likeness or statement of any CERES employee or student, without CERES' prior written consent. Any use of CERES' name shall be limited to statements of fact and shall not imply endorsement by CERES of IGER's research, products or services. + +9. PUBLICITY. + + CERES-IGER Collaboration Agreement Page 18 of 75 + + + + + + + +9.3 Notwithstanding any provision of this Article, either of the Parties can disclose or otherwise acknowledge, without restriction, the existence of this Agreement as well as the collaborative relationship between the Parties without the prior consent of the other Party. Notwithstanding the unilateral disclosure rights provided for in this Article, if the disclosure or acknowledgement takes the form of a written release by the disclosing Party, the disclosing Party shall provide the other Party a copy of any such unilateral disclosure prior to its release so as to allow the other Party to comment and shall take such comments reasonably into account. However, no advance copy needs to be provided of any releases referred to in Article 9.4(a) or 9.4(b) or of any releases which are identical to previous releases. + +9.4 The Parties intend to issue joint press releases regarding their collaboration. Any such press release and any press release by either Party will be subject to the prior written approval of both Parties; provided however, that (a) CERES shall have the right to otherwise disclose information as may be required in CERES' judgment to comply with SEC or IRS regulations or other laws, rules or regulations governing disclosure of information and (b) IGER shall have the right to otherwise disclose information as may be required in IGER's judgment to comply with laws, rules or regulations governing disclosure of information. Notwithstanding the unilateral disclosure rights provided for in this Article, the disclosing Party shall provide the other Party a copy of any such unilateral disclosure preferably prior to its release. + +10. RECORDS AND AUDITS. + +IGER shall keep accurate and detailed records in accordance with good accounting practices of all expenses and extramural income, if any, relating to the RESEARCH PROJECTS. All such records shall be subject to inspection by an independent auditor designated by CERES and reasonably acceptable to IGER within normal business hours with at least fourteen (14) days notice. Such inspection rights shall terminate, with respect to each RESEARCH PROJECT, on the third anniversary of the expiration or termination of such RESEARCH PROJECT. + +11. INDEPENDENT CONTRACTOR. + +The relationship of the Parties is that of independent contractors. Nothing herein is intended or will be construed to establish any agency, partnerships or joint ventures. Neither Party is authorized or empowered to act as an agent for the other Party for any purpose, nor shall either Party be bound by the acts or conduct of the other Party. + +12. CONVENTION ON BIOLOGICAL DIVERSITY. + +12.1 The Parties agree that they shall at all times comply with the Convention on Biological Diversity signed in 1992 at the Rio Earth Summit ("CBD") in the implementation of this Agreement, to the extent the CBD is applicable. + +12.2 Any germplasm of COLLABORATION CROPS made available by IGER for a RESEARCH PROJECT will be identified in detail in the relevant SCHEDULE. The origin of the material, date of collection and references to any agreements governing such material and/or the collection thereof will be included. Reference to any such agreements existing on the Effective Date is included in EXHIBIT E or in Article 13.2.1.8. CERES-IGER Collaboration Agreement Page 19 of 75 + + + + + + + +12.3 With respect to any germplasm made available by IGER for a RESEARCH PROJECT which is covered by the CBD, CERES, in collaboration with IGER who will provide all required assistance, will use reasonable efforts to obtain commercialization rights from the relevant competent authorities in the countries where the germplasm was collected, allowing the grant of rights to CERES as provided in this Agreement. + +13. WARRANTIES. + +13.1 Representations and Warranties of CERES. + +"To the Knowledge of CERES" as used in this Article 13.1 shall mean: to the actual knowledge, as of the Effective Date, of any member of the Board of Directors or any officer of CERES or any employee of CERES who has actively participated in the negotiation of the transactions contemplated by this Agreement. + +13.1.1 CERES represents and warrants to IGER that: + +13.1.1.1 CERES (a) is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware; (b) has all requisite power and authority to conduct the business in which it is currently, or is currently proposed to be, engaged; (c) has the corporate power and authority to execute and deliver this Agreement; and (d) has the corporate power and authority to perform its obligations under this Agreement; + +13.1.1.2 the execution, delivery, and performance by CERES of this Agreement have been duly authorized by all necessary corporate action of CERES; + +13.1.1.3 this Agreement has been duly executed and delivered by CERES, and constitutes the legal, valid and binding obligations of CERES enforceable against CERES in accordance with its terms; + +13.1.1.4 as of the Effective Date, CERES has not received notice of, and is not in default under, or with respect to, any contractual obligation, which, individually or together with all such defaults, would have a material adverse effect on the ability of CERES to perform its obligations under this Agreement; + +13.1.1.5 to the Knowledge of CERES, no approval, consent, compliance, exemption, authorization or other action by, or notice to, or filing with, any governmental agency or other person and no lapse of a waiting period is necessary or required in connection with the execution, delivery or performance by, or enforcement against, CERES of this Agreement or the transactions contemplated hereby; + +13.1.1.6 to the Knowledge of CERES, CERES has the right to make the conveyances and grants in accordance with the Articles hereof, including, without limitation, the license grants in this Agreement, and no such conveyance or grant violates or constitutes an event that is or would be with the passage of time, in any CERES-IGER Collaboration Agreement Page 20 of 75 + + + + + + + +material way, a violation, breach or default of, any material agreement or material obligation to which CERES is a party or by which it is bound; and + +13.1.1.7 all former and current employees of CERES have executed written agreements with CERES that assign to CERES all rights to any inventions, improvements, discoveries or information relating to CERES' business, subject however to Section 2870 of the California Labor Code. To the Knowledge of CERES, no employee of CERES has entered into any agreement with a former employer that would be violated by his or her employment with CERES. + +13.2 Representations and Warranties of IGER. + +"To the Knowledge of IGER" as used in this Article 13.2 shall mean: to the actual knowledge, as of the Effective Date, of any member of the Executive Committee of IGER or of any employee of IGER who has actively participated in the negotiation of the transactions contemplated by this Agreement. + +13.2.1 IGER represents and warrants to CERES that: + +13.2.1.1 IGER (a) is a company limited by guarantee, registered in England No. 473456 and a registered Charity No. 272150, duly incorporated, validly existing and in good standing under the laws of England and Wales; (b) has all requisite power and authority to conduct the business in which it is currently, or is currently proposed to be, engaged; (c) has the corporate power and authority to execute and deliver this Agreement; and (d) has the corporate power and authority to perform its obligations under this Agreement; + +13.2.1.2 the execution, delivery, and performance by IGER of this Agreement have been duly authorized by all necessary corporate action of IGER; + +13.2.1.3 this Agreement has been duly executed and delivered by IGER, and constitutes the legal, valid and binding obligations of IGER enforceable against IGER in accordance with its terms; + +13.2.1.4 as of the Effective Date, IGER has not received notice of, and is not in default under, or with respect to, any contractual obligation, which, individually or together with all such defaults, would have a material adverse effect on the ability of IGER to perform its obligations under this Agreement; + +13.2.1.5 to the Knowledge of IGER, no approval, consent, compliance, exemption, authorization or other action by, or notice to, or filing with, any governmental agency or other person and no lapse of a waiting period is necessary or required in connection with the execution, delivery or performance by, or enforcement against, IGER of this Agreement or the transactions contemplated hereby; + +13.2.1.6 to the Knowledge of IGER, and subject to the Assignment/License referred to in Article 14.1 (e) (v), IGER has the right to make the conveyances and grants in accordance with the Articles hereof, including, without CERES-IGER Collaboration Agreement Page 21 of 75 + + + + + + + +limitation, the license grants, and no such conveyance or grant violates or constitutes an event that is or would be with the passage of time, in any material way, a violation, breach or default of, any material agreement or material obligation to which IGER or any such Affiliate of IGER is a party or by which it is bound; + +13.2.1.7 all former and current employees of IGER have executed written agreements with IGER that assign to IGER all rights to any inventions, improvements, discoveries or information relating to IGER's business. To the Knowledge of IGER, no employee of IGER has entered into any agreement with a former employer that would be violated by his or her employment with IGER; and + +13.2.1.8 EXHIBIT E sets forth an exhaustive list of all agreements and commitments in existence on the Effective Date to which IGER is a party, or that contain obligations or restrictions affecting IGER, in connection with the COLLABORATION CROPS, except for the following agreements which are not included in EXHIBIT E: + +13.3 EXCEPT AS PROVIDED IN ARTICLES 13.1 AND 13.2, THE PARTIES ACKNOWLEDGE AND AGREE THAT NEITHER PARTY HAS MADE ANY REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. IN NO EVENT SHALL EITHER PARTY BE HELD RESPONSIBLE FOR ANY SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES OR LOSS OF PROFIT ARISING OUT OF THE USE OF ANY JOINT INTELLECTUAL PROPERTY, CERES INTELLECTUAL PROPERTY, IGER INTELLECTUAL PROPERTY, OTHER RESEARCH RESULTS OR BACKGROUND INTELLECTUAL PROPERTY COVERED BY THIS AGREEMENT OR ANY SCHEDULE OR ARISING OUT OF THE IMPLEMENTATION OF THIS AGREEMENT, EVEN IF SUCH PARTY IS ADVISED IN ADVANCE OF THE POSSIBILITY OF SUCH DAMAGES. + +13.4 Nothing in this Agreement is or shall be construed as: + +(a) a warranty or representation by either Party as to the validity or scope of any patent rights or plant variety rights; + +(b) a warranty or representation by either Party that anything made, used, sold or otherwise disposed of pursuant to any license granted under this Agreement is or will be free from infringement of patents, copyrights or other rights of third parties; + +(c) any obligations by either Party to bring or prosecute actions or suits against third + +Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission + + 1. Agreement of July 12, 2004 between Bio-Renewables Limited, IGER and Plant Research International B.V.; + + 2. Agreement dated the 23rd of June 2005 between [***] and IGER; and + + 3. Agreement dated October 18, 2006 between [***] and IGER. + + CERES-IGER Collaboration Agreement Page 22 of 75 + + + + + + + +parties for patent infringement; or parties for patent infringement, or + +a grant by implication, estoppel or otherwise of any licenses under patent applications, patents, plant variety rights applications and/or plant variety rights of CERES and/or IGER or other person other than as provided in the express provisions of this Agreement or a SCHEDULE on this Agreement. + +14.1 The term of this Agreement shall be fifteen (15) years from the Effective Date, unless sooner terminated in accordance with the following provisions of this Article: + +(a) mutual, written agreement of the Parties; + +(b) failure of one Party to satisfy its material obligations under this Agreement, and such Party subsequently fails to cure such failure(s) within (i) thirty (30) days for failures to remit payment for amounts due under this Agreement and (ii) ninety (90) days for all other obligations in each case after receipt of written notice from the non-breaching Party specifying such failure(s); + +(c) one (1) year's written notice of termination by either CERES or IGER to the other Party in case either the terminating Party or the other Party ceases substantially all activities in the COLLABORATION CROPS; + +(d) IGER will have the right to terminate this Agreement unilaterally with thirty (30) days' written notice to CERES, (i) if CERES seeks protection under any bankruptcy, insolvency, receivership, trust, deed, creditors arrangement or comparable proceeding or if any such proceeding is instituted against CERES (and not dismissed within one hundred twenty (120) days); (ii) in case of dissolution or winding up of CERES (excluding any situation where all or substantially all of CERES' assets, stock or business to which this Agreement relates are acquired by a third party (whether by sale, acquisition, merger, operation of law or otherwise)); or (iii) with written notice to CERES, if CERES has failed in a substantial manner, three (3) years after either Party or the Parties jointly have developed a propagation method for Miscanthus that results in the crop being commercially competitive in the United States or in Europe as compared to other energy crops being grown at that time in the relevant geography, to implement the activities set forth in EXHIBIT F, and does not remedy such failure or offer a remediation plan which is reasonably acceptable to IGER within ninety (90) days after receipt of a written notice from IGER specifying such failure; + +(e) CERES will have the right to terminate this Agreement unilaterally: (i) with thirty (30) days' written notice to IGER if John Clifton-Brown or Iain Donnison cease(s) to be associated with IGER and the RESEARCH PROJECTS contemplated by this Agreement, and IGER has not replaced such person(s) within one hundred twenty (120) days by (a) person(s) reasonably acceptable to CERES; (ii) with ninety (90) days' written notice to IGER, if the institutional mission, purpose, structure or funding of IGER would change substantially and adversely affect IGER's ability to satisfy its obligations hereunder; (iii) with one (1) years' written notice to IGER, if CERES has a documented compelling business reason to cease the collaboration, (for example, without limitation, lack of sufficient processing capacity for COLLABORATION CROPS within the expected timeframe in the United States; COLLABORATION CROPS are non-competitive with other biomass sources); (iv) with three (3) months' prior written notice to IGER, such notice to be given no earlier than eighteen (18) + +14. TERM AND TERMINATION. + + CERES-IGER Collaboration Agreement Page 23 of 75 + + + + + + + +months after the Effective Date, if no rights to commercialize (including determination of the compensation due upon commercialization) COLLABORATION CROPS germplasm provided by IGER which is included in a RESEARCH PROJECT have been secured to CERES' reasonable satisfaction in compliance with the CBD; or (v) with thirty (30) days' written notice to IGER if Defra has not assigned to IGER, or granted to IGER an exclusive license reasonably satisfactory to CERES on, the Intellectual Property vested in Defra or the Crown or the Secretary of State pursuant to the DEFRA agreement NF 0426 within sixty (60) days from the Effective Date (the "Assignment/License"). + +(f) either Party will have the right to terminate this Agreement if no active RESEARCH PROJECTS exist for more than two (2) years, provided that on or after the second anniversary of the expiration or termination of the last SCHEDULE to expire or terminate, the Parties have not agreed on any new SCHEDULE despite (i) negotiations in good faith by both Parties or (ii) diligent, documented attempts by the terminating Party to conduct negotiations in good faith with respect to one or more new SCHEDULES, to which attempts the other Party has not been responsive. + +14.2 Promptly upon the delivery of a notice of termination of this Agreement, the Parties will meet to discuss the ongoing RESEARCH PROJECTS, and each Party will provide to the other Party any data, information and germplasm that constitutes or is covered by JOINT INTELLECTUAL PROPERTY and which has not been provided prior to the notice of termination, without prejudice to additional on-going delivery obligations set forth in any SCHEDULES. + +14.3 Termination of this Agreement shall not affect the rights and obligations of the Parties accrued prior to termination hereof nor any license grants then in existence, nor either Party's non-exclusive rights to commercialize then existing RELEASED VARIETIES in the United Kingdom, subject to payment of remuneration as set forth in any relevant license/commercialization agreements. Further, the provisions set forth hereinafter shall apply. + +14.3.1 In case of termination on the basis of Article 14.1 (b) if CERES is the breaching Party, Article 14.1 (c) if CERES ceases substantially all activities in the COLLABORATION CROPS, Article 14.1 (d) (i), (ii) or (iii) or Article 14.1. (e) (iii), at or about the effective date of termination, the Parties will negotiate in good faith to reach agreement as to the rights to use and commercially exploit JOINT INTELLECTUAL PROPERTY not covered by any relevant license/commercialization agreement between the Parties, which rights will be addressed in one or more written agreements. If the Parties fail to reach agreement within ninety (90) days after the start of such negotiations, which shall be evidenced by written notice from one Party to the other initiating such negotiations, each Party shall have the non-exclusive right to use and commercially exploit JOINT INTELLECTUAL PROPERTY for any and all purposes, with the right to grant sublicenses, subject to the obligations of the first sentence of Article 14.3, provided that no licenses on any transgenes or transgenic technologies of the other Party shall be included or implied. + +14.3.2 In case of termination on the basis of Article 14.1 (b) if IGER is the breaching Party, Article 14.1 (c) if IGER ceases substantially all activities in the COLLABORATION CROPS, Article 14.1 (e) (i) or (ii) or Article 14.1 (f), subject to the obligations of the first sentence of Article 14.3, CERES shall have the exclusive right to use and commercially exploit any JOINT INTELLECTUAL PROPERTY to the extent such JOINT CERES-IGER Collaboration Agreement Page 24 of 75 + + + + + + + +INTELLECTUAL PROPERTY is not covered by any relevant license/commercialization agreement between the Parties. At or about the effective date of termination, the Parties will negotiate in good faith to reach agreement as to reasonable remuneration (whether as a royalty or in some other form as the Parties may agree), which will be addressed in one or more written agreements. If the Parties fail to reach agreement within ninety (90) days after the start of such negotiations, which shall be evidenced by written notice from one Party to the other initiating such negotiations, the remuneration shall be settled in accordance with the dispute resolution procedure in Article 15. + +14.4 Termination of this Agreement for any reason will not relieve either Party of any obligation or liability accrued under this Agreement before termination or rescind any payments made or due before termination. Articles 4, 5 (subject to Article 14.3), 6, 7, 8, 9.1, 9.2, 10, 12.3, 13, 14.2, 14.3, 14.4, 14.5, 15, 16 and 18 will survive any termination of this Agreement. + +14.5 Termination of this Agreement shall not automatically terminate any existing RESEARCH PROJECT, which can only be terminated according to the specific terms of the related SCHEDULE. The terms and provisions of this Agreement shall continue to apply to the activities and outcomes of any such RESEARCH PROJECTS, notwithstanding the termination of this Agreement, unless provided otherwise in the relevant SCHEDULE or by written agreement of the Parties upon termination. + +15.1 All disputes, differences or questions arising out of or in connection with this Agreement or its SCHEDULES, or related to the alleged breach, termination, validity, interpretation or violation thereof, shall be submitted to the MANAGEMENT COMMITTEE for resolution, which shall convene, whether in person or otherwise, to resolve such dispute in a timely manner. Either Party may initiate a resolution procedure by providing written notice ("Dispute Notice") to the other Party, and any such Dispute Notice must set forth the subject matter of the dispute, difference or question. If after sixty (60) days the dispute remains unresolved, the Chief Scientific Officer of CERES and the Director of IGER shall seek to resolve the dispute through negotiation. The Parties agree that at least eight (8) cumulative hours of negotiations will be undertaken. If the dispute still remains unresolved ninety (90) days after the Dispute Notice, either Party may initiate proceedings pursuant to Article 15.2. + +15.2 Dispute Resolution and Arbitration. + +In the event of any dispute arising out of or in connection with this Agreement, the Parties agree to submit the matter to settlement proceedings under the ICC ADR Rules. If the dispute has not been settled pursuant to the said Rules within forty-five (45) days following the filing of a Request for ADR or within such other period as the Parties may agree in writing, such dispute shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by three (3) arbitrators appointed in accordance with the said Rules of Arbitration. The provisions set forth hereinafter shall apply to the arbitration procedures, without prejudice to the ICC Rules of Arbitration. + +15.2.1 Qualifications of Arbitrators. + +15. DISPUTE RESOLUTION AND APPLICABLE LAW. + + CERES-IGER Collaboration Agreement Page 25 of 75 + + + + + + + +Each arbitrator appointed shall have a reputation as being experienced in the legal and technical matters related to the dispute, shall be required to disclose, among other disclosures, any prior involvement with the legal and technical matters related to the dispute and any involvement with a competitor of any Party, and shall not be presently nor in the past have been affiliated with any Party or a competitor of any Party. Notwithstanding the method of their appointment, each arbitrator shall be required to meet the standards contained in the Rules with respect to independence. + +15.2.2 Location of the Arbitration. + +The seat of arbitration shall be Paris, France. The arbitrators may hold hearings at such other locations as the arbitrators shall determine, after consultation with the Parties. + +15.2.3 Language of Arbitration. + +The arbitral proceedings and all pleadings and written evidence shall be in the English language. Any written evidence originally in a language other than English shall be submitted in English translation accompanied by the original or true copy thereof + +15.2.4 Limitation on Remedies. + +The arbitrators are precluded from awarding punitive or exemplary damages. In no event shall the arbitrators have the powers of an amiable compositeur. + +15.3 Applicable law. + +This Agreement shall be governed by, and construed and interpreted in accordance with, the laws of the State of New York, United States of America, without regard to the principles of conflicts of law thereof. + +Any notices required to be given or which shall be given under this Agreement shall be in writing and delivered by overnight (trackable) courier addressed to the Parties as follows: + +Vice President of Product Development cc: Legal Department Ceres, Inc. 1535 Ranch Conejo Blvd. Thousand Oaks, California 91320 United States of America + +Institute Business Manager OR for legal or financial notices: Institute Secretary Institute of Grassland and Environmental Research + +16. NOTICES. + + CERES-IGER Collaboration Agreement Page 26 of 75 + + + + + + + +Plas Gogerddan Aberystwyth Ceredigion SY23 3EB United Kingdom + +Notices under this Agreement sent by overnight courier by one Party to the other Party at its above address, shall be deemed to have been given or made as of the date following the date so mailed. + +17. GENERAL. + +17.1 Entire Agreement/Modifications. + +This Agreement constitutes the entire agreement between the Parties hereto with respect to the subject matter hereof, and there are no representations, warranties, covenants or obligations except as set forth herein. This Agreement supersedes all prior and contemporaneous agreements, understandings, negotiations and discussions, written or oral, of the Parties hereto relating to the subject matter hereof. This Agreement and its SCHEDULES may only be amended, modified or superseded by a writing executed by the authorized representatives of the Parties hereto. It is anticipated that SCHEDULES will be attached to and become part of this Agreement as new RESEARCH PROJECTS are undertaken, as described in Article 1.1. + +17.2 Severability. + +This Agreement, to the greatest extent possible, shall be construed so as to give validity to all of the provisions hereof. If any provision of this Agreement is or becomes invalid, is ruled illegal by a court of competent jurisdiction or is deemed unenforceable under the current applicable law from time to time in effect during the term of this Agreement, the remainder of this Agreement will not be affected or impaired thereby and will continue to be construed to the maximum extent permitted by law. In lieu of each provision which is invalid, illegal or unenforceable, there will be substituted or added as part of this Agreement by mutual written agreement of the Parties, a provision which will be as similar as possible, in economic and business objectives as intended by the Parties to such invalid, illegal or unenforceable provision, but will be valid, legal and enforceable. + +17.3 Waiver. + +No failure or delay by either Party in exercising any right or remedy under this Agreement will waive any provision of this Agreement. Nor will any single or partial exercise by either Party of any right or remedy under this Agreement preclude it from otherwise or further exercising any rights or remedies which it may have, or any other rights or remedies granted by any law or any related document. + +17.4 Enforcement. + +In the event an action is commenced by either Party against the other to enforce any of the provisions of this Agreement, the prevailing Party shall be entitled to recover from the other Party reasonable attorneys' fees, court costs and necessary disbursements incurred in connection with such action. CERES-IGER Collaboration Agreement Page 27 of 75 + + + + + + + +17.5 Assignablility. + +This Agreement binds and enures to the benefit of the Parties, their successor or assigns, but may not be assigned by either Party without the prior written consent of the other Party; provided however, CERES shall have the right to assign its rights and obligations under this Agreement to any Affiliated Company without such prior consent. Each Party shall have the right to assign its rights and obligations under this Agreement to a third party in conjunction with the transfer to such third party of substantially all of the assets of such Party associated with performance under this Agreement without such prior consent. "Affiliated Company" defined as any company owned or controlled by, under common control with or controlling CERES, "control" meaning in this context the direct or indirect ownership of fifty percent (50%) or more of the voting stock/shares of a company, or the power to nominate at least half of the directors. + +17.6 Force Majeure. + +No Party shall be responsible to the other Party for delay or failure in performance of any the obligations imposed by this Agreement, provided such failure shall be occasioned by fire, flood, explosion, lightning, wind storm, hailstorm, earthquake, subsidence of soil, failure of machinery or equipment or supply of materials, discontinuity in the supply of power, court order or governmental interference, terrorist attacks, civil commotion, riot, war, strikes, labor disturbances, transportation difficulties, labor shortage, natural genetic variation of any living matter or by any other cause of like or unlike nature beyond the reasonable control and without fault or negligence of such Party. + +18. SPECIAL CONDITIONS IN CONNECTION WITH DEFRA AGREEMENT NF 0426. + +The Parties acknowledge that Defra is expected to assign or license exclusively to IGER any rights in Intellectual Property which would vest in Defra or the Crown or the Secretary of State pursuant to the DEFRA agreement NF 0426. If IGER receives an exclusive license from Defra rather than an assignment of rights, the following will apply. + +18.1 To the extent the license grant to CERES on IGER BACKGROUND INTELLECTUAL PROPERTY in Article 5.3.2 relates to IGER BACKGROUND INTELLECTUAL PROPERTY that constitutes Intellectual Property to which rights vest in Defra or the Crown or the Secretary of State, the word "license" will be read as "sublicense" and all other terms of such Article will remain unchanged. + +18.2 To the extent that IGER INTELLECTUAL PROPERTY or JOINT INTELLECTUAL PROPERTY created in a RESEARCH PROJECT constitutes or includes Intellectual Property to which rights vest in Defra or the Crown or the Secretary of State, any conveyance or grant of rights or licenses by IGER to CERES in this Agreement with respect to such IGER INTELLECTUAL PROPERTY or JOINT INTELLECTUAL PROPERTY, will be read as the grant of an exclusive sublicense under IGER's exclusive license from Defra. CERES-IGER Collaboration Agreement Page 28 of 75 + + + + + + + +IN WITNESS WHEREOF, IGER and CERES have caused this Agreement to be duly executed as indicated below. INSTITUTE OF GRASSLAND AND ENVIRONMENTAL RESEARCH CERES, INC. + + By: /s/ MERVYN HUMPHREYS By: /s/ RICHARD FLAVELL Name: + +Professor Mervyn Humphreys Name: + +Richard Flavell, CBE, FRS Title: Director Title: Chief Scientific Officer By: /s/ RICHARD HAMILTON Name: + +Richard Hamilton Title: President and Chief Executive Officer CERES-IGER Collaboration Agreement Page 29 of 75 + + + + + + + +EXHIBIT A + +to the Collaboration Agreement between IGER and CERES + +DEFINITION OF COLLABORATION CROPS + +Miscanthus and interbreeding species, including without limitation Saccharum and Erianthus species. CERES-IGER Collaboration Agreement Page 30 of 75 + + + + + + + +EXHIBIT B + +to the Collaboration Agreement between IGER and CERES + +PREFERRED FORM OF RECEIPT FORM + +Packing Slip and Receipt Form for material transferred pursuant to the Collaboration Agreement dated [x] between INSTITUTE OF GRASSLAND AND ENVIRONMENTAL RESEARCH and CERES, INC. and SCHEDULES to such Agreement. + +Material transferred pursuant to SCHEDULE [x] dated [...] + +The undersigned [IGER/CERES] signatory certifies that the material and related information set forth hereinafter are included in the shipment with which this form is enclosed. + +The undersigned [IGER/CERES] signatory acknowledges having received in good order the material and related information set forth hereinafter. The signature does not constitute an acceptance of the receiving party's qualification of the intellectual property (IP) status of the material transferred, such IP status being defined in the Parties' Collaboration Agreement. + +[Include description of material and related information with indication of IP status (e.g. Background, Joint IP) and any restrictions on transfer to subcontractors.] + +THIS MATERIAL AND RELATED INFORMATION ARE TRANSFERRED ONLY FOR USE IN COMPLIANCE WITH THE ABOVE MENTIONED COLLABORATION AGREEMENT AND SCHEDULE. CONFIDENTIALITY OBLIGATIONS APPLY. For sending/receipt, For receipt/sending, Signature: Signature: + + + + Date: Date: + + Name: Walter E. Nelson Name: + + Title: Product Development Manager CERES, INC. + + + +Title: INSTITUTE OF GRASSLAND AND ENVIRONMENTAL RESEARCH + + + + CERES-IGER Collaboration Agreement Page 31 of 75 + + + + + + + +EXHIBIT C + +to the Collaboration Agreement between IGER and CERES + +PREFERRED FORMS OF VARIETY EVALUATION AGREEMENT + +(to be used for field evaluation) + +FIELD TRIAL AGREEMENT (Non transgenic. Fee for service. Academic.) + +and + +FIELD TRIAL AGREEMENT (Non transgenic. No payment. Academic.) + +PREFERRED FORM OF MATERIAL TRANSFER AGREEMENT (to be used for transfer of material for other purposes than field evaluation) CERES-IGER Collaboration Agreement Page 32 of 75 + + + + + + + +FIELD TRIAL AGREEMENT (Non transgenic. Fee for service. Academic.) + +1. THE PARTIES + + This Agreement is made effective on [date] ("Effective Date") by and between [Ceres, Inc., a Delaware corporation with principal offices at 1535 Rancho Conejo Blvd., Thousand Oaks, CA 91320, United States of America] or [Institute of Grassland and Environmental Research, a company limited by guarantee, registered in England No. 473456 and a registered Charity No. 272150, having an office at Plas Gogerddan, Aberystwyth, Ceredigion, SY23 3EB, United Kingdom] hereinafter "[CERES/IGER]," and [Party information to be completed], hereinafter "[Party]." + + THE PARTIES HERETO COVENANT AND AGREE AS FOLLOWS: + +2. FIELD TRIAL PROGRAM + + 2.1 [CERES/IGER] will deliver to [Party] seeds or other propagating material as described in ANNEX I and related information (jointly referred to as the "CERES/IGER Plant Material"). The delivery conditions are set forth in ANNEX I. Promptly upon receipt of the CERES/IGER Plant Material, Party will sign and return the Receipt Form, in the preferred format attached as ANNEX II to this Agreement, to [CERES/IGER] (attn: [responsible person at CERES/IGER]). + + 2.2 [Party] agrees to perform the activities defined in ANNEX I which shall be referred to hereinafter as the "Program." With reasonable notice [CERES/IGER] may change the activities to be performed in the Program. If such changes do not result in additional work to be performed by [Party], but consist for example of changes in experimental design or in observations to be made or in information to be included in reports, they shall be set forth in a written document provided by [CERES/IGER] to [Party] which will be attached to ANNEX I and form part of it. If such changes result in additional work to be performed by [Party] and require an adaptation of the remuneration, they shall be set forth in an amendment to this Agreement signed by both Parties. [CERES/IGER] will consider any suggestions for changes in the Program which [Party] may suggest. + + 2.3 In performing the Program activities [Party] undertakes to comply with the work plan and time schedule set forth in ANNEX I. + + 2.4 [Party] undertakes only to use the CERES/IGER Plant Material or any part, progeny or seeds thereof for performing the Program activities to be carried out under the Program and not for any other purpose. Specifically, but without limitation, [Party] shall not use the Plant Material or any progeny, plants, parts of plants, plant material, seeds or products derived therefrom in any form of reselection, breeding, sexual crossing, seed production, back crossing, tissue culturing, mutagenesis, genetic transformation or any biotechnological process, except as specifically approved in this Agreement. CERES-IGER Collaboration Agreement Page 33 of 75 + + + + + + + + 2.5 The CERES/IGER Plant Material will be used only on fields and at premises under the control of [Party] and identified in ANNEX I. + + 2.6 Upon termination of the Program, [Party] will, at the option of [CERES/IGER], (i) allow [CERES/IGER] to remove any Plant Material and any progeny, plants, plant material, seeds or products obtained in the Program or (ii) destroy any remaining CERES/IGER Plant Material and any plants, plant material and seeds obtained under the Program within fifteen (15) days from [CERES/IGER]'s request to destroy, and will send [CERES/IGER] forthwith an attestation of such destruction. + + 2.7 Subject to giving at least one day's prior written notice in writing or by email to [Party], [CERES/IGER] and [CERES/IGER] invitees will have the right to visit the fields where Program activities are being conducted at any time, to make observations and to collect samples. + +3. REPORTS + + 3.1 [Party] shall send [CERES/IGER] detailed written reports on the implementation of the Program activities and the observations made and results obtained during the implementation of the Program. The frequency of the reports and the type of information to be included in same is set forth in ANNEX I. + + 3.2 During the entire Program, [Party] will promptly communicate to [CERES/IGER] any information on the Program activities or the results obtained or observed that [CERES/IGER] may ask. Between reports, [Party] will also spontaneously communicate to [CERES/IGER] any unexpected observations or results. + +4. REMUNERATION. PAYMENT + + 4.1 [CERES/IGER] will pay [Party] a remuneration as set forth in ANNEX I for the implementation of the Program, in accordance with the payment schedule set forth in such annex. Overhead costs included in the remuneration shall not exceed [x] percent (x%). + + 4.2 The payments will be made on the dates set forth in the payment schedule in ANNEX I provided that [CERES/IGER] has received a corresponding invoice from [Party] at least thirty (30) days in advance, by bank transfer to [Party's] account mentioned in its invoice. + +5. OWNERSHIP. INTELLECTUAL PROPERTY RIGHTS. EXPLOITATION + + 5.1 This Agreement does not bring any change to the ownership and intellectual property rights relating to the CERES/IGER Plant Material. [Party] acknowledges that the CERES/IGER Plant Material may be covered by patents or patent applications of [CERES/IGER]. + + 5.2 [CERES/IGER] will exclusively own any plants, parts of plants, plant material, seeds, information, data, technology, or other findings or inventions resulting from the CERES-IGER Collaboration Agreement Page 34 of 75 + + + + + + + + Program that relate to the CERES/IGER Plant Material (hereinafter "Results"). [CERES/IGER] will have the exclusive rights to protect any of the Results through patents or plant variety protection rights or similar protection, and any intellectual property rights arising therefrom will belong exclusively to [CERES/IGER]. In case [Party] has made or contributed to any invention forming part of the Results, [Party] shall promptly inform [CERES/IGER] thereof in writing and shall assign its rights and cause its employees and staff members to assign their rights in any such invention to [CERES/IGER]. [Party] shall render such assistance as may be required for assigning any rights [Party] inventors may have in such invention to [CERES/IGER] or [CERES/IGER]'s designee and for protecting such invention, including but not limited to the signing of documents. Any inventor of [Party] will be recognized in patent applications on an invention which is part of the Results in accordance with [U.S./U.K. patent law]. + + 5.3 [CERES/IGER] will have the exclusive right to commercialize any of the Results. + +6. CONFIDENTIALITY. PUBLICATIONS. + + 6.1 [Party] will treat any and all information and material communicated or transferred to it by [CERES/IGER] pursuant to this Agreement (including but not limited to the CERES/IGER Plant Material) and any Results (including without limitation any progeny, plants, seeds, parts of plants, plant material, or products obtained directly or indirectly from the Plant Material) as strictly confidential and will not use the same for any purpose other than as expressly allowed by this Agreement nor disclose or transfer the same to any third party other than its employees or staff members necessary to carry out the Program and bound by appropriate secrecy and non-use undertakings consistent with [Party's] obligations under this Agreement. + + 6.2 [Party] shall take all precautions to prevent theft or pilferage of the Plant Material and any progeny, plants, seeds, parts of plants or plant material obtained directly or indirectly from the Plant Material. + + 6.3 [Party] will not grant access to any field where Plant Material or any progeny, plants, seeds, parts of plants or plant material obtained directly or indirectly from the Plant Material can be viewed to any third party except with the prior written permission of [CERES/IGER]. + + 6.4 "Publication" and "Publish" shall include any discussion with or presentation to a third party, other than parties referred to in Article 6.1. Examples of Publications include, without limitation: presentation at a conference, submission for publication to a journal, submission of joint proposals, posting information on a website, posters, abstracts, Ph.D. dissertations, and informal oral discussions. Subject to [CERES/IGER]'s prior written approval, which will not unreasonably be withheld, [Party] may proceed to Publication of selected Results provided that: (i) no confidential information of [CERES/IGER] is revealed thereby, (ii) [Party] shall take into account any suggestions which may be formulated by [CERES/IGER], and (iii) at least thirty (30) days prior to the submission to a publisher or presentation to any third party, [Party] CERES-IGER Collaboration Agreement Page 35 of 75 + + + + + + + + delivers copies of the proposed Publication to [CERES/IGER] for review. At [CERES/IGER]'s request, [Party] shall, for a reasonable period up to ninety (90) days from initial delivery to [CERES/IGER], delay revealing any patentable subject matter in the disclosure in order to permit the filing of patent applications. In any Publication, the Parties shall consider joint authorship and acknowledge the contributions and publications of the other as scientifically appropriate. + +7. WARRANTIES. LIMITED LIABILITY + + 7.1 [Party] acknowledges that the CERES/IGER Plant Material is of an experimental nature and will take all reasonable precautions to prevent any damage or injury by the CERES/IGER Plant Material and any progeny, plants, parts of plants, plant material, seeds or products derived therefrom. + + 7.2 [Party] warrants that the CERES/IGER Plant Material will exclusively and restrictedly be used under suitable containment conditions, and in accordance with all applicable regulations, and it will not be used on human subjects. In addition, [Party] will strictly comply with any planting distance, isolation and similar requirements set forth in ANNEX I. [Party] will obtain any authorizations or permits or proceed to any notifications which may be required for the Program activities, [Party] will inform [CERES/IGER] in writing, within thirty (30) days from the Effective Date, of any such requirements and certify its compliance with same. + + 7.3 [CERES/IGER] declines any liability for any damage which may be caused by the CERES/IGER Plant Material or the Program activities or Results to [Party] or any third party. + + 7.4 Neither Party shall be liable for indirect, special, remote, incidental or consequential damages or loss of profit in connection with this Agreement or its implementation. + +8. GENERAL CONDITIONS + + 8.1 Amendments: This Agreement, including its annexes, may only be amended by a written document signed by duly authorized representatives of the Parties. + + 8.2 Ambiguities: In case of ambiguity between this Agreement and its annexes, the contents of the agreement shall prevail. + + 8.3 Number of copies: This Agreement including its annexes is being made in two (2) copies, one for each Party. + + 8.4 Assignment / Subcontracts: [CERES/IGER] has concluded this Agreement with [Party] in view of [Party]'s specific qualifications and [Party] shall not have the right to assign any of its rights or obligations under this Agreement nor to sub-contract any part of the Program activities to any third party, except with the prior written approval of [CERES/IGER]. [CERES/IGER] has the right to assign its rights and obligations under this Agreement to any third party. Further, [CERES/IGER] has the right to CERES-IGER Collaboration Agreement Page 36 of 75 + + + + + + + +Made in two (2) copies. + + entrust the implementation of all or part of its obligations under this Agreement to any of its affiliates. + + 8.5 Equitable Remedies: It is understood and agreed that money damages would not be a sufficient remedy for any breach of this Agreement by [Party] and that [CERES/IGER] is entitled to equitable relief, including injunction and specific performance, as a remedy for any such breach. Such remedies shall not be deemed to be the exclusive remedies for a breach by [Party] of this Agreement but shall be in addition to all other remedies available at law or equity to [CERES/IGER]. + + 8.6 Governing Law / Jurisdiction: [to be completed] + +9. DURATION + + 9.1 This Agreement will enter into force on the Effective Date and will remain in full force and effect until the latest of the following dates: (i) the [third] anniversary of the Effective Date, (ii) the date of delivery by [Party] of the last report provided for in this Agreement, or (iii) the dates on which the last payment due by [CERES/IGER] pursuant to this Agreement is made. + + 9.2 Notwithstanding Article 9.3., [CERES/IGER] will have the right to terminate this Agreement including the Program at any time with [three (3)] months' prior written notice. In case of such early termination, [CERES/IGER] will pay the remuneration provided in this Agreement up to the effective date of termination, and all costs relating to the implementation of this Agreement which [Party] irrevocably committed to prior to receipt of the notice of termination. + + 9.3 Either Party will have the rights to terminate this Agreement unilaterally by registered letter addressed to the other Party in case such other Party has committed a breach of any of its obligations under this Agreement and has failed to remedy such breach within thirty (30) days from the receipt of a registered letter specifying the breach. + + 9.4 The provisions of Articles 2.6, 5, 6, 7.3, 7.4, 8.5 and 8.6 will survive the expiration or termination of this Agreement. + + [Party] [Institute of Grassland and Environmental Research] or [Ceres, Inc.] By: By: + +Name: Name: + +Title: Title: + + By: By: + +Name: Name: + +Title: Title: + + CERES-IGER Collaboration Agreement Page 37 of 75 + + + + + + + +ANNEX I + +to the Field Trial Agreement between [CERES/IGER] and [Party] + +PLANTING / MANAGEMENT PLAN FOR [CERES/IGER] MISCANTHUS EVALUATION TRIAL — [Party] + +Trial Scope and Purpose: + +1. Planting Material + +2. Program Activities + +3. Content and timing of reports CERES-IGER Collaboration Agreement Page 38 of 75 + + + + + + + +ANNEX II + +to the Field Trial Agreement between [CERES/IGER] and [Party] + +FORM OF RECEIPT FORM + +Packing Slip and Receipt Form for material transferred pursuant to the Field Trial Agreement dated [x] between [CERES/IGER] and [Party]. + +The undersigned [Party/[CERES/IGER]] signatory certifies that the material and related information set forth hereinafter are included in the shipment with which this form is enclosed. + +The undersigned [Party/[CERES/IGER]] signatory acknowledges having received in good order the material and related information set forth hereinafter. + +[Include description of material and related information.] + +THIS MATERIAL AND RELATED INFORMATION ARE TRANSFERRED ONLY FOR USE IN COMPLIANCE WITH THE ABOVE MENTIONED FIELD TRIAL AGREEMENT. CONFIDENTIALITY OBLIGATIONS APPLY. For sending/receipt, For receipt/sending, Signature: Signature: + + Date: Date: + + Name: Name: Title: Title: [CERES/IGER] [Party] CERES-IGER Collaboration Agreement Page 39 of 75 + + + + + + + +FIELD TRIAL AGREEMENT (Non transgenic. No payment. Academic.) + +1. THE PARTIES + + This Agreement is made effective on [date] ("Effective Date") by and between [Ceres, Inc., a Delaware corporation with principal offices at 1535 Rancho Conejo Blvd., Thousand Oaks, CA 91320, United States of America] or [Institute of Grassland and Environmental Research, a company limited by guarantee, registered in England No. 473456 and a registered Charity No. 272150, having an office at Plas Gogerddan, Aberystwyth, Ceredigion, SY23 3EB, United Kingdom] hereinafter "[CERES/IGER]," and [Party information to be completed], hereinafter "[Party]." + + WHEREAS, [CERES/IGER] wishes to obtain information from field trialing certain CERES/IGER plant material; + + WHEREAS, [Party] wishes to include CERES/IGER's plant material in field trials in consideration of its scientific interest in the observations to be made in such trials and the right to publish certain observations, all subject to the terms and conditions of this Agreement; + + [or other introduction as appropriate] + + NOW THEREFORE, for and in consideration of the covenants, conditions and undertakings hereinafter set forth, [CERES/IGER] and [Party] hereby agree as follows: + +2. FIELD TRIAL PROGRAM + + 2.1 [CERES/IGER] will deliver to [Party] seeds or other propagating material as described in ANNEX I and related information (jointly referred to as the "CERES/IGER Plant Material"). The delivery conditions are set forth in ANNEX I. Promptly upon receipt of the CERES/IGER Plant Material, Party will sign and return the Receipt Form, in the preferred format attached as ANNEX II to this Agreement, to [CERES/IGER] (attn: [responsible person at CERES/IGER]). + + 2.2 [Party] agrees to perform the activities defined in ANNEX I which shall be referred to hereinafter as the "Program." With reasonable notice [CERES/IGER] may change the activities to be performed in the Program. If such changes do not result in additional work to be performed by [Party], but consist for example of changes in experimental design or in observations to be made or in information to be included in reports, they shall be set forth in a written document provided by [CERES/IGER] to [Party] which will be attached to ANNEX I and form part of it. If such changes result in additional work to be performed by [Party], they shall be set forth in an amendment to this Agreement signed by both Parties. [CERES/IGER] will consider any suggestions for changes in the Program which [Party] may suggest. + + 2.3 In performing the Program activities [Party] undertakes to comply with the work plan and time schedule set forth in ANNEX I. CERES-IGER Collaboration Agreement Page 40 of 75 + + + + + + + + 2.4 [Party] undertakes only to use the CERES/IGER Plant Material or any part, progeny or seeds thereof for performing the Program activities to be carried out under the Program and not for any other purpose. Specifically, but without limitation, [Party] shall not use the Plant Material or any progeny, plants, parts of plants, plant material, seeds or products derived therefrom in any form of reselection, breeding, sexual crossing, seed production, back crossing, tissue culturing, mutagenesis, genetic transformation or any biotechnological process, except as specifically approved in this Agreement. + + 2.5 The CERES/IGER Plant Material will be used only on fields and at premises under the control of [Party] and identified in ANNEX I. + + 2.6 Upon termination of the Program, [Party] will, at the option of [CERES/IGER], (i) allow [CERES/IGER] to remove any Plant Material and any progeny, plants, plant material, seeds or products obtained in the Program or (ii) destroy any remaining CERES/IGER Plant Material and any plants, plant material and seeds obtained under the Program within fifteen (15) days from [CERES/IGER]'s request to destroy, and will send [CERES/IGER] forthwith an attestation of such destruction. + + 2.7 Subject to giving at least one day's prior written notice in writing or by email to [Party], [CERES/IGER] and [CERES/IGER] invitees will have the right to visit the fields where Program activities are being conducted at any time, to make observations and to collect samples. + +3. REPORTS + + 3.1 [Party] shall send [CERES/IGER] detailed written reports on the implementation of the Program activities and the observations made and results obtained during the implementation of the Program. The frequency of the reports and the type of information to be included in same is set forth in ANNEX I. + + 3.2 During the entire Program, [Party] will promptly communicate to [CERES/IGER] any information on the Program activities or the results obtained or observed that [CERES/IGER] may ask. Between reports, [Party] will also spontaneously communicate to [CERES/IGER] any unexpected observations or results. + +4. REMUNERATION. PAYMENT + + No remuneration will be due. + +5. OWNERSHIP. INTELLECTUAL PROPERTY RIGHTS. EXPLOITATION + + 5.1 This Agreement does not bring any change to the ownership and intellectual property rights relating to the CERES/IGER Plant Material. [Party] acknowledges that the CERES/IGER Plant Material may be covered by patents or patent applications of [CERES/IGER]. + + 5.2 [CERES/IGER] will exclusively own any plants, parts of plants, plant material, seeds, information, data, technology, or other findings or inventions resulting from the CERES-IGER Collaboration Agreement Page 41 of 75 + + + + + + + + Program that relate to the CERES/IGER Plant Material (hereinafter "Results"). [CERES/IGER] will have the exclusive rights to protect any of the Results through patents or plant variety protection rights or similar protection, and any intellectual property rights arising therefrom will belong exclusively to [CERES/IGER]. In case [Party] has made or contributed to any invention forming part of the Results, [Party] shall promptly inform [CERES/IGER] thereof in writing and shall assign its rights and cause its employees and staff members to assign their rights in any such invention to [CERES/IGER]. [Party] shall render such assistance as may be required for assigning any rights [Party] inventors may have in such invention to [CERES/IGER] or [CERES/IGER]'s designee and for protecting such invention, including but not limited to the signing of documents. Any inventor of [Party] will be recognized in patent applications on an invention which is part of the Results in accordance with [U.S./U.K. patent law]. + + 5.3 [CERES/IGER] will have the exclusive right to commercialize any of the Results. + +6. CONFIDENTIALITY. PUBLICATIONS. + + 6.1 [Party] will treat any and all information and material communicated or transferred to it by [CERES/IGER] pursuant to this Agreement (including but not limited to the CERES/IGER Plant Material) and any Results (including without limitation any progeny, plants, seeds, parts of plants, plant material, or products obtained directly or indirectly from the Plant Material) as strictly confidential and will not use the same for any purpose other than as expressly allowed by this Agreement nor disclose or transfer the same to any third party other than its employees or staff members necessary to carry out the Program and bound by appropriate secrecy and non-use undertakings consistent with [Party's] obligations under this Agreement. + + 6.2 [Party] shall take all precautions to prevent theft or pilferage of the Plant Material and any progeny, plants, seeds, parts of plants or plant material obtained directly or indirectly from the Plant Material. + + 6.3 [Party] will not grant access to any field where Plant Material or any progeny, plants, seeds, parts of plants or plant material obtained directly or indirectly from the Plant Material can be viewed to any third party except with the prior written permission of [CERES/IGER]. + + 6.4 "Publication" and "Publish" shall include any discussion with or presentation to a third party, other than parties referred to in Article 6.1. Examples of Publications include, without limitation: presentation at a conference, submission for publication to a journal, submission of joint proposals, posting information on a website, posters, abstracts, Ph.D. dissertations, and informal oral discussions. Subject to [CERES/IGER]'s prior written approval, which will not unreasonably be withheld, [Party] may proceed to Publication of selected Results provided that: (i) no confidential information of [CERES/IGER] is revealed thereby, (ii) [Party] shall take into account any suggestions which may be formulated by [CERES/IGER], and (iii) at least thirty (30) days prior to the submission to a publisher or presentation to any third party, [Party] CERES-IGER Collaboration Agreement Page 42 of 75 + + + + + + + + delivers copies of the proposed Publication to [CERES/IGER] for review. At [CERES/IGER]'s request, [Party] shall, for a reasonable period up to ninety (90) days from initial delivery to [CERES/IGER], delay revealing any patentable subject matter in the disclosure in order to permit the filing of patent applications. In any Publication, the Parties shall consider joint authorship and acknowledge the contributions and publications of the other as scientifically appropriate. + +7. WARRANTIES. LIMITED LIABILITY + + 7.1 [Party] acknowledges that the CERES/IGER Plant Material is of an experimental nature and will take all reasonable precautions to prevent any damage or injury by the CERES/IGER Plant Material and any progeny, plants, parts of plants, plant material, seeds or products derived therefrom. + + 7.2 [Party] warrants that the CERES/IGER Plant Material will exclusively and restrictedly be used under suitable containment conditions, and in accordance with all applicable regulations, and it will not be used on human subjects. In addition, [Party] will strictly comply with any planting distance, isolation and similar requirements set forth in ANNEX I. [Party] will obtain any authorizations or permits or proceed to any notifications which may be required for the Program activities, [Party] will inform [CERES/IGER] in writing, within thirty (30) days from the Effective Date, of any such requirements and certify its compliance with same. + + 7.3 [CERES/IGER] declines any liability for any damage which may be caused by the CERES/IGER Plant Material or the Program activities or Results to [Party] or any third party. + + 7.4 Neither Party shall be liable for indirect, special, remote, incidental or consequential damages or loss of profit in connection with this Agreement or its implementation. + +8. GENERAL CONDITIONS + + 8.1 Amendments: This Agreement, including its annexes, may only be amended by a written document signed by duly authorized representatives of the Parties. + + 8.2 Ambiguities: In case of ambiguity between this Agreement and its annexes, the contents of the agreement shall prevail. + + 8.3 Number of copies: This Agreement including its annexes is being made in two (2) copies, one for each Party. + + 8.4 Assignment / Subcontracts: [CERES/IGER] has concluded this Agreement with [Party] in view of [Party]'s specific qualifications and [Party] shall not have the right to assign any of its rights or obligations under this Agreement nor to sub-contract any part of the Program activities to any third party, except with the prior written approval of [CERES/IGER]. [CERES/IGER] has the right to assign its rights and obligations under this Agreement to any third party. Further, [CERES/IGER] has the right to CERES-IGER Collaboration Agreement Page 43 of 75 + + + + + + + +Made in two (2) copies. + + entrust the implementation of all or part of its obligations under this Agreement to any of its affiliates. + + 8.5 Equitable Remedies: It is understood and agreed that money damages would not be a sufficient remedy for any breach of this Agreement by [Party] and that [CERES/IGER] is entitled to equitable relief, including injunction and specific performance, as a remedy for any such breach. Such remedies shall not be deemed to be the exclusive remedies for a breach by [Party] of this Agreement but shall be in addition to all other remedies available at law or equity to [CERES/IGER]. + + 8.6 Governing Law / Jurisdiction: [to be completed] + +9. DURATION + + 9.1 This Agreement will enter into force on the Effective Date and will remain in full force and effect until the latest of the following dates: (i) the [third] anniversary of the Effective Date, (ii) the date of delivery by [Party] of the last report provided for in this Agreement, or (iii) the dates on which the last payment due by [CERES/IGER] pursuant to this Agreement is made. + + 9.2 Notwithstanding Article 9.3., [CERES/IGER] will have the right to terminate this Agreement including the Program at any time with [three (3)] months' prior written notice. + + 9.3 Either Party will have the rights to terminate this Agreement unilaterally by registered letter addressed to the other Party in case such other Party has committed a breach of any of its obligations under this Agreement and has failed to remedy such breach within thirty (30) days from the receipt of a registered letter specifying the breach. + + 9.4 The provisions of Articles 2.6, 5, 6, 7.3, 7.4, 8.5 and 8.6 will survive the expiration or termination of this Agreement. + + [Party] [Institute of Grassland and Environmental Research] or [Ceres, Inc.] By: By: + +Name: Name: + +Title: Title: + + By: By: + +Name: Name: + +Title: Title: + + CERES-IGER Collaboration Agreement Page 44 of 75 + + + + + + + +ANNEX I + +to the Field Trial Agreement between [CERES/IGER] and [Party] + +PLANTING / MANAGEMENT PLAN FOR [CERES/IGER] MISCANTHUS EVALUATION TRIAL — [Party] + +Trial Scope and Purpose: + +1. Planting Material + +2. Program Activities + +3. Content and timing of reports CERES-IGER Collaboration Agreement Page 45 of 75 + + + + + + + +ANNEX II + +to the Field Trial Agreement between [CERES/IGER] and [Party] + +FORM OF RECEIPT FORM + +Packing Slip and Receipt Form for material transferred pursuant to the Field Trial Agreement dated [x] between [CERES/IGER] and [Party]. + +The undersigned [Party/[CERES/IGER]] signatory certifies that the material and related information set forth hereinafter are included in the shipment with which this form is enclosed. + +The undersigned [Party/[CERES/IGER]] signatory acknowledges having received in good order the material and related information set forth hereinafter. + +[Include description of material and related information.] + +THIS MATERIAL AND RELATED INFORMATION ARE TRANSFERRED ONLY FOR USE IN COMPLIANCE WITH THE ABOVE MENTIONED FIELD TRIAL AGREEMENT. CONFIDENTIALITY OBLIGATIONS APPLY. For sending/receipt, For receipt/sending, Signature: Signature: + + Date: Date: + + Name: Name: Title: Title: [CERES/IGER] [Party] CERES-IGER Collaboration Agreement Page 46 of 75 + + + + + + + +Material Transfer Agreement — Biological Material for Research Purposes + +You have requested that the Institute of Grassland & Environmental Research (IGER) provides you with the Biological Material listed in the Schedule. In consideration of providing the Biological Material, IGER asks you, and you agree, to observe the following conditions, for a period of ten years from the date hereof: + + To: Name: (the "Recipient") Organisation: ("the Recipient Institution") Address: + +1. To use the Biological Material only for the purpose of academic research at the laboratories of the Recipient and not in any collaboration with a third party. More specifically the Biological Material will only be used for the following purpose: + + [to be completed] + + The Recipient will specifically but without limitation not use the Biological Material for the following purposes: + + Generation of plants for use in seed production to increase the volume of seed available; generation of plants for use in any breeding or back crossing experiments; any tissue culture, mutagenesis, genetic transformation or any biotechnological process, except if expressly defined as the purpose of this Agreement. + + The Biological Material will not be used for production of a commercial product, or for patent purposes or for applications for plant variety rights. + +2. Not to provide samples of the Biological Material or samples of material extracted from or derived from the Biological Material or any technical information relating thereto, to third parties without specific written permission from IGER. Samples may only be provided to members of your immediate research team, who undertake to respect these conditions. + +3. Not without IGER's prior written permission (which shall not be unreasonably refused) to disclose to any third party or publish details of the Biological Material, its manufacture or use, or details of any other material that could not have been made but for the Biological Material, or information on results obtained through the use of the Biological Material and to acknowledge the source of the Biological Material in any such publication for which permission is granted. The Recipient must provide IGER any proposed publication at least thirty (30) days prior to submission. IGER will review such proposed publication for the need of intellectual property protection and/or to identify any inadvertent disclosure of proprietary information. If necessary, the Recipient agrees to (i) delay publication by no more than sixty (60) days to enable the filing of an application for intellectual property protection and/or (ii) remove any proprietary information identified by IGER. CERES-IGER Collaboration Agreement Page 47 of 75 + + + + + + + +The Schedule + +[to be completed] + +4. The Recipient acknowledges that the Biological Material and any material or information obtained through the use thereof shall always remain the property of IGER. Upon completion of the research activities defined herein, the Recipient shall, at the option of IGER, (i) return to IGER all unused Biological Material supplied by IGER and all materials, regardless of type, produced from the Biological Material or (ii) destroy all unused Biological Material supplied by IGER and all materials, regardless of type, produced from the Biological Material. + +5. The Recipient will not obtain, and will not attempt to obtain patent coverage on the Biological Material or on any use of the Biological Material or on any other material or information that could not have been made or obtained but for the Biological Material. + +6. The Recipient agrees promptly to disclose to IGER all information relating to research performed using the Biological Material and all information relating to any modifications or improvements of the Biological Material or any material derived from the Biological Material. [specific reporting obligations to be included] + +7. The Recipient and Recipient Institution will use the Biological Material in compliance with all applicable laws and regulations including current health and safety guidelines for work with recombinant DNA (if applicable) and for transport of materials and protection of the environment. The Recipient and Recipient Institution agree to waive all claims against IGER and to defend and Indemnify IGER from all claims and damages asserted by third parties arising from the use, storage, handling and disposal of the Biological material by the Recipient. + +8. The Biological Material is experimental in nature and is provided without any warranties express or implied, including any warranties of merchantability or fitness for any purpose. + +9. IGER makes no representation that the use of the Biological Material will not infringe any patent or other intellectual property right and the Recipient hereby indemnifies IGER from and against all actions, claims, proceedings or demands which may be brought against IGER by third parties in respect of the infringement of any intellectual property right arising out of the Recipient's' exercising of its rights under this Agreement. + +10. The Recipient shall ensure that its employees, officers and agents comply with the obligations imposed upon the Recipient by this Agreement as if personally bound by such obligations. + + CERES-IGER Collaboration Agreement Page 48 of 75 + + + + + + + +Signed for and on behalf of IGER: + +Signature: + +Name: P.A. Fentem + +Title: Institute Business Manager + +Date: + + + +Recipient Institution: Recipient: + +Signature: Signature: + +Name: Name: + +Position: Date: + +Date: + + CERES-IGER Collaboration Agreement Page 49 of 75 + + + + + + + +EXHIBIT D + +to the Collaboration Agreement between IGER and CERES + +EXTERNAL FUNDING + +• Defra project NF0426 The genetic improvement of miscanthus for Biomass + + 1 April 2004 — 31 March 2009 — see EXHIBIT E + +• Energy crops in the Atlantic space: Possibilities for large scale implementation Interreg IIIB Atlantic Area + + 1 January 2004 — 31 December 2007 — see EXHIBIT E + +• Supergen — Biomass, Biofuels and Energy Crops Consortium + + 1 April 2003 — 31 March 2007 — see EXHIBIT E + +• BBSRC project: Optimising the development of the energy grass Miscanthus through manipulation of flowering time + + 1 April 2007 — 31 March 2011 — see EXHIBIT E CERES-IGER Collaboration Agreement Page 50 of 75 + + + + + + + +EXHIBIT E + +to the Collaboration Agreement between IGER and CERES + +EXISTING AGREEMENTS + +Title: Defra project NF 0426 'The genetic improvement of miscanthus for biomass' + +Duration: 1/4/04 — 31/3/09 + +Partners: PRI + +Scope and roles of partners + +Material and information provided and to be provided by IGER: Provision of reports on results to Defra. + +Rights of IGER and PRI on results: IP owned by Defra but now being assigned to IGER. Rights to use of results by PRI not specified in contract. + +Rights of third parties on any IGER background material/information + +IGER materials from China subject to rights of GAGE in royalty sharing and in access for research purposes. + +Any exclusivity/non competition + +No + +Any rights of third parties on results obtained by IGER + +Rights of Tinplant with respect to materials developed using their germplasm. NOTE: any future use of Tinplant germplasm for breeding purposes will be subject to mutual agreement of IGER and CERES. + + 1. Assessment of genetic resources available in UK and elsewhere for yield, canopy development, flowering time (IGER) overwintering and combustion quality (PRI) + + 2. Hybridisation and selection based on general and specific combining ability of diploid accessions (IGER, PRI) + + 3. Hybridisation of diploid and tetraploid accessions to produce new sterile triploid hybrids (IGER) + + 4. Improvement of breeding efficiency based on early morpho-physiological prediction of productivity and persistence and indirect measurement of chemical composition (IGER) + + 5. The production of large trait mapping populations and identification of a realistic cost effective road map to more efficient breeding through the development of marker-assisted selection (IGER,PRI) + + 6. Identification with Defra of the exploitation route in UK and Europe taking into account expertise in large scale production and marketing (IGER,PRI) + + CERES-IGER Collaboration Agreement Page 51 of 75 + + + + + + + +Title: Energy crops in the Atlantic space: Possibilities for large scale implementation Interreg IIIB Atlantic Area + +Duration: 1/1/04 — 31/12/07 + +Partners and roles: + +Instituto Superior de Agronomia (Portugal) Agronomy and harvesting of Cynara, Arundo, Sorghum + +Associacao de Prudutores Florestias (Portugal) Agronomy, harvesting and conversion of Cynara, Arundo and Sorghum + +Universidade de Evora (Portugal) Agronomy, harvesting of Cynara, Sorghum + +Instituto Nacional de Engenharia, Tecnologia e Invacao (Portugal) Gasification and combustion of Cynara, Arunda, Sorghum + +Associacao Florestal da Galizia (Spain) Agronomy, combustion analysis and alcohol production from Cynara, Arunda, Sorghum + +Mid-South Roscommon Rural Development Company Ltd (Ireland) Identify and monitor farm performance of biomass crops including miscanthus, reed canary grass, and willow. + +IGER (UK) Agronomy and chemical composition analysis of miscanthus. Hybrid miscanthus trials. + +Scope: Analysis of technical and economic aspects of installation of Cynara cardunculus, Arundo donax, Sorghum bicolor and miscanthus in different regions. Conversion of biomass by burning and through conversion to alcohol + +Material and information provided and to be provided by IGER + +Agronomy data, hybrid trial data, chemical composition data. + +Rights of parties to results + +All project results to be left 'free of all rights' + +Rights of third parties on any Background + +None + +Any exclusivity/non competition + +None + +Rights of third parties on results obtained by IGR outside of agreement activities + +None CERES-IGER Collaboration Agreement Page 52 of 75 + + + + + + + +Title: Supergen — Biomass, Biofuels and Energy Crops Consortium + +Duration: 1/4/03 — 31.3.07 + +Scope: Feedstock options and meeting criteria of fuel quality for willow, miscanthus, reed canary grass and switch grass. + +Conversion and energy generation — pyrrolysis and combustion Economics and market issues Integration of fuel production, conversion and end use Environmental issues + +Partners and roles + +University of Leeds Combustion behaviour of buiomass + +Aston University Mass pyrrolysis for biooil + +University of Sheffield Modelling combustion processes + +University of Ulster Techno-economics of combustion and pyrrolysis + +Cranfield University Corrosion in combustion + +University of Manchester Socio-economic analysis + +Rothamsted Research Agronomy (fertilizer requirements) of reed canary grass, switch grass and miscanthus + +Alston Power Ltd Combustion + +Bical Ltd Miscanthus agronomy + +E.ON UK Ltd Combustion + +Rural Regeneration Ltd Environmental impact CERES-IGER Collaboration Agreement Page 53 of 75 + + + + + + + +IGER + +Materials and information provided by IGER + +Lolium, Dactylis and Festuca material. NIRS calibrations for lignin, ADF and NDF for miscanthus (material sourced from European Miscanthus Initiative) + +Rights of IGER and other parties on results + +All parties own their own Resulting IP. Partners must make their Resulting IP available to other partners for research purposes Subject to agreement on commercial terms partners grant each other non-exclusive license to use their IP for commercial purposes A partner can not unreasonably refuse access on reasonable terms to a second partner to its IP if access is necessary for that second partner to commercialise its own IP + +Rights to IGER Background + +Partners may use IGER's Background for purposes of project and for internal research purposes IGER's Background may be made available to another partner for commercial purposes subject to commercial terms IGER's Background to be licensed on fair and reasonable terms when necessary for another partner to commercially exploit its own Resulting IP. + +Exclusivity/non competition + +Should partners wish to exploit their own resulting IP with a third party (outside consortium) during the duration of the project, that party must notify the other partners. + +Ay rights of third parties/partners on results obtained outside of agreement activities + +None CERES-IGER Collaboration Agreement Page 54 of 75 + + + + + + + +Title: BBSRC project: Optimising the development of the energy grass Miscanthus through manipulation of flowering time + +Duration: 1/4/07 — 31/3/11 + +Scope: Identification of genes involved in flowering time of the two parents of Miscanthus X giganteus + +Roles of partners: + +Materials and information provided and to be provided by IGER: + +A range of miscanthus genotypes from Japan, China and Taiwan to be characterised at field sites at IGER and Rothamsted. M siniensis mapping family will also be assessed at IGER and Rothamsted. IGER mapping data will be made publicly available through a database which is part of the BBSRC cross institute programme on monocot genetics. + +Rights of parties to results + +Each party owns the IP on the results it produces + +Rights of third parties to any background + +Rights of GAGE to collection covered in GAGE agreement + +Exclusivity/non competition + +None + +Rights of third parties on IGER results outside of agreement activities + +None + + IGER — Assessment of flowering time of miscanthus populations in the Field. Association of flowering time and senescence QTL with miscanthus Genes. Identify miscanthus genes which are homologues of Arabidopsis, maize and rice flowering genes. Build genetic maps around these genes and map flowering time QTL + +Rothamsted — Assessment of flowering times of miscanthus populations in the field + + CERES-IGER Collaboration Agreement Page 55 of 75 + + + + + + + +EXHIBIT F + +to the Collaboration Agreement between IGER and CERES + +PRODUCTION AND COMMERCIALIZATION ACTIVITIES + +CERES will: + +CERES shall provide to IGER a detailed, written annual report on its activities in furtherance of the obligations of this EXHIBIT, such report shall be due at or about March 31 of each year. In addition, upon the request of IGER at any time, CERES will discuss the progress and results achieved in regard to such activities; provided however, such contacts and discussions shall be reasonable in frequency and duration so as not to be disruptive to the respective operations of either Party. + + 1. Identify growers and establish grower contracts + + 2. Lease, build or buy production facility + + 3. Establish quality testing capability + + 4. Establish a sales force and distribution network and/or distribution through existing distribution systems and/or establish any other commercialization system. + + CERES-IGER Collaboration Agreement Page 56 of 75 + + + + + + + +EXHIBIT G + +to the Collaboration Agreement between IGER and CERES + +MODEL LICENSE AGREEMENT FOR NON-TRANSGENIC VARIETIES / NON-UK + +EXCLUSIVE LICENSE AGREEMENT FOR [VARIETY X] + +THIS AGREEMENT is made this ___ day of _________, 20— ("Effective Date"), by and between INSTITUTE OF GRASSLAND AND ENVIRONMENTAL RESEARCH ("IGER"), a company limited by guarantee, registered in England No. 473456 and a registered Charity No. 272150, having an office at Plas Gogerddan, Aberystwyth, Ceredigion, SY23 3EB, United Kingdom and CERES, INC. ("CERES"), a Delaware corporation, having an office at 1535 Rancho Conejo Blvd., Thousand Oaks, California 91320, United States of America. + +WHEREAS, CERES and IGER entered into a COLLABORATION AGREEMENT, ("CA"), that contemplates a long-term research relationship by and between the Parties for the enhancement and improvement of COLLABORATION CROPS (as defined in the CA) for biomass crops; + +WHEREAS, CERES and IGER have jointly developed and jointly own a new MISCANTHUS variety [X] pursuant to SCHEDULE [1] to the CA; + +WHEREAS, CERES wishes to commercialize MISCANTHUS variety [X]; + +WHEREAS, CERES has the ability to assume production of and to commercialize MISCANTHUS variety [X] and wishes to receive an exclusive, world-wide license (except in the United Kingdom) to produce, use, sell and commercially exploit MISCANTHUS variety [X]; + +WHEREAS, in accordance with the provisions of the CA concerning the commercialization of MISCANTHUS varieties jointly developed and jointly owned by the Parties under the CA, the Parties have developed this Agreement and its terms in accordance with the terms and obligations set forth in the CA; + +WHEREAS, CERES and IGER recognize that the rights intended to be granted hereunder can be a strong incentive for CERES to risk money and other resources needed to produce, use, sell and commercially exploit MISCANTHUS for wide public enjoyment; + +NOW THEREFORE, in consideration of the premises and of the mutual covenants and agreements contained herein and of other good and valuable consideration, the Parties have agreed and do hereby agree as follows: + +1.1 "MISCANTHUS" is defined as "COLLABORATION CROPS" in the CA, and such definition is incorporated by reference herein. + +1. DEFINITIONS. + + CERES-IGER Collaboration Agreement Page 57 of 75 + + + + + + + +1.2 "LICENSED VARIETY" shall mean the [NAME] MISCANTHUS variety jointly developed by the Parties pursuant to SCHEDULE [1] to the CA and released, jointly by IGER and CERES, pursuant to the terms of SCHEDULE [1]. + +1.3 "VARIETY RELEASE DATE" shall mean the date the LICENSED VARIETY was released pursuant to the terms of SCHEDULE [1]. + +1.4 "TERRITORY" shall mean all countries of the world except the United Kingdom. + +1.5 "COMMERCIAL PROPAGULE" shall mean [propagules — seed — reproductive material] of MISCANTHUS that is sold for purposes other than the production of propagating material. + +1.6 "INTELLECTUAL PROPERTY RIGHTS" shall mean all rights in any plant variety, patent, plant breeders rights, registration or equivalent intellectual property protection, or any applications thereof, for the LICENSED VARIETY, which may be filed in any jurisdiction in the TERRITORY, with the exception of TRADEMARKS. INTELLECTUAL PROPERTY RIGHTS, when applied for or granted, will be set forth in ANNEX I. + +1.7 "JOINT INTELLECTUAL PROPERTY" is defined in the CA, and such definition is incorporated by reference herein. Any and all JOINT INTELLECTUAL PROPERTY licensed under this Agreement shall be set forth in ANNEX I. + +1.8 "IGER INTELLECTUAL PROPERTY" is defined in the CA, and such definition is incorporated by reference herein. Any and all IGER INTELLECTUAL PROPERTY licensed under this Agreement shall be set forth in ANNEX I. + +1.9 "OTHER RESEARCH RESULTS" is defined in the CA, and such definition is incorporated by reference herein. + +1.10 "BACKGROUND INTELLECTUAL PROPERTY" is defined in the CA, and such definition is incorporated by reference herein. Any and all IGER BACKGROUND INTELLECTUAL PROPERTY licensed under this Agreement shall be set forth in ANNEX I. + +1.11 "TRADEMARK" shall mean any trademark, trade name or logo owned by CERES and intended for use with a LICENSED VARIETY. + +1.12 "COMMERCIAL NAME" shall mean the complete, preferred name of a LICENSED VARIETY under which a specific LICENSED VARIETY will be marketed and sold. + +1.13 "NET SALES" shall mean the actual wholesale price for COMMERCIAL PROPAGULES of the LICENSED VARIETY received by CERES or any AFFILIATED COMPANY for the sale of such propagules, excluding propagating material for further production of propagating material, less any (a) customary trade, quantity, or cash discounts; (b) amounts repaid or credited by reason of rejection or return; (c) any sales, use, tariff, customs duties, V.A.T. and/or other taxes, duties and similar governmental assessments (except taxes based on income); (d) outbound transportation, shipping, packing, costs of insurance in transit paid by CERES or an AFFILIATED COMPANY; and (e) cost of any coating materials that may have been applied to the COMMERCIAL PROPAGULES. CERES-IGER Collaboration Agreement Page 58 of 75 + + + + + + + +Where there is no identifiable sale price or when a LICENSED VARIETY is sold to other than bona fide, arms length customers of CERES or any AFFILIATED COMPANY, CERES or the AFFILIATED COMPANY shall be deemed to have received an amount of NET SALES calculated based on the final sale of the COMMERCIAL PROPAGULES (wholesale level) to an independent third party, usually referred to as net wholesale price payable by dealers. If no such current price is available, a hypothetical fair market value price will be determined by the Parties jointly in good faith for the purpose of calculating NET SALES. Further, TRAIT FEES, if any, shall be added to NET SALES. + +1.14 "TRAIT FEE" shall mean any upfront or annual fee collected by CERES or any AFFILIATED COMPANY in conjunction with NET SALES as an additional remuneration for the sale of COMMERCIAL PROPAGULES that have a particular valuable non-transgenic trait or characteristic. + +1.15 "LICENSE INCOME" shall mean the amount actually received by either CERES or any AFFILIATED COMPANY in consideration for the grant of SUBLICENSES to SUBLICENSEES that are not AFFILIATED COMPANIES to produce and sell COMMERCIAL PROPAGULES of the LICENSED VARIETY, including up-front fees, lump sum payments and any running royalties on a product-by-product and jurisdiction-by- jurisdiction basis. + +*NOTE: definitions of NET SALES and LICENSE INCOME may vary in function of the business models that may be developed + +1.16 "AFFILIATED COMPANY" shall mean any company owned or controlled by, under common control with or controlling CERES, "control" meaning in this context the direct or indirect ownership of more than fifty percent (50%) of the voting stock/shares of a company, or the power to nominate at least half of the directors. + +1.17 "SUBLICENSE" shall mean any sublicense granted (a) by CERES to an AFFILIATED COMPANY or (b) by CERES or an AFFILIATED COMPANY to any third party ("SUBLICENSEE"), as authorized by this Agreement, to produce and sell a LICENSED VARIETY (or LICENSED VARIETIES). + +1.18 "MARKETING PLAN" shall mean a detailed written plan for production, distribution, sale and promotion of the LICENSED VARIETY prepared by or on behalf of CERES and submitted to IGER. Each MARKETING PLAN shall include at least the information outlined in ANNEX II. Actual, adopted MARKETING PLANS shall be attached as further annexes to this Agreement as adopted. + +2. GRANT OF LICENSE. +2.1 IGER hereby grants CERES under IGER'S interest in any JOINT INTELLECTUAL PROPERTY and OTHER RESEARCH RESULTS, the IGER INTELLECTUAL PROPERTY set forth in ANNEX I, and the IGER BACKGROUND INTELLECTUAL PROPERTY set forth in ANNEX I: + + (a) the exclusive right and license to produce COMMERCIAL PROPAGULES of the LICENSED VARIETY in the TERRITORY, including intermediate propagation material; and CERES-IGER Collaboration Agreement Page 59 of 75 + (b) the exclusive right and license to use, sell and commercially exploit the COMMERCIAL PROPAGULES of the LICENSED VARIETY in the TERRITORY. + + + + + + +2.2 Sublicenses. CERES shall have the right to grant SUBLICENSES within the TERRITORY provided that: + +(a) The terms and obligations of any such SUBLICENSE shall be consistent with the terms and obligations of this Agreement; + +(b) CERES shall deliver to IGER (under an obligation of confidentiality) a written summary of each SUBLICENSE agreement, which shall include the name and address of the SUBLICENSEE, scope of the SUBLICENSE, exclusive/non-exclusive status, territory, remuneration, reporting and diligence obligations, if any. This summary shall be provided within thirty (30) days after execution, modification or termination of the summarized agreement; and + +(c) CERES will use commercially reasonable efforts to collect any and all amounts due to CERES under any SUBLICENSE for the sale of COMMERCIAL PROPAGULES of the LICENSED VARIETY. + +2.3 Nothing in this Agreement shall be construed as conferring by implication, estoppel, or otherwise any license or rights under any INTELLECTUAL PROPERTY RIGHTS, whether owned by IGER or licensed to IGER, other than the one(s) expressly set forth in this Agreement. + + + + + + +3. INTELLECTUAL PROPERTY RIGHTS. + + + + + 3.1 CERES will prepare and file, in accordance with its best judgment, any and all applications for plant variety rights or other forms of intellectual property protection or variety registration for the LICENSED VARIETY in the United States and/or Europe. Applications for plant variety rights shall be filed in the joint names of CERES and IGER. At CERES' discretion, plant variety rights and/or other forms of intellectual property protection may be filed in any other jurisdiction in the TERRITORY. + + 3.2 If CERES intends to abandon any plant variety rights, pending or granted in any jurisdiction, CERES shall first give sufficient written notice to IGER to permit IGER the opportunity to assume such filing, examination and/or maintenance. + + 3.3 CERES and IGER will consult with regard to INTELLECTUAL PROPERTY RIGHTS. + + 3.4 The obligations of this Article 3.4 shall not apply to any jurisdictions in which CERES has elected not to apply for intellectual property protection. CERES and IGER shall avoid carrying out any act that would prejudice the grant of INTELLECTUAL PROPERTY RIGHTS. Without limitation, neither Party shall make available reproductive material of the LICENSED VARIETY at a date or in a manner that might jeopardize the right to seek INTELLECTUAL PROPERTY RIGHTS protection for the LICENSED VARIETY. CERES, whether directly or through any SUBLICENSEE, shall not sell any propagules of the LICENSED VARIETY until such time as the requirements for INTELLECTUAL PROPERTY RIGHTS have been established. + CERES-IGER Collaboration Agreement Page 60 of 75 +3.5 CERES shall use all reasonable endeavors to ensure in any sales jurisdiction of the TERRITORY in which INTELLECTUAL PROPERTY RIGHTS exist that all bags or containers supplied by CERES and any SUBLICENSEE containing only propagules of such LICENSED VARIETY are clearly labeled to show that the LICENSED VARIETY is protected by INTELLECTUAL PROPERTY RIGHTS. + +4.1 In partial consideration for the rights granted in this Agreement, CERES shall be responsible for any and all fees and expenses incurred in filing, examining, certifying and maintaining any INTELLECTUAL PROPERTY RIGHTS for the LICENSED VARIETY, subject to the provisions of Article 3. + +4.2 In partial consideration for the rights granted in this Agreement, CERES agrees to pay to IGER, on behalf of CERES and any AFFILIATED COMPANY, for the LICENSED VARIETY, a royalty of: + +Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission + +4. LICENSED VARIETY CONSIDERATION. + + 4.2.1 on NET SALES + + (a) [***] percent ([***]%) of NET SALES if the LICENSED VARIETY constitutes IGER INTELLECTUAL PROPERTY, where the genotype exists before the Effective Date of the CA, no further breeding or selection is required after the Effective Date of the CA, and the LICENSED VARIETY is propagated by rhizomes; + + (b) [***] percent ([***]%) of NET SALES if the LICENSED VARIETY constitutes IGER INTELLECTUAL PROPERTY, in all cases not included in Article 4.2.1 (a); or + + (c) [***] percent ([***]%) of NET SALES if the LICENSED VARIETY constitutes JOINT INTELLECTUAL PROPERTY. + + 4.2.2 on LICENSE INCOME + + (a) [x percentage to be determined in function of the business model] of LICENSE INCOME if the LICENSED VARIETY constitutes IGER INTELLECTUAL PROPERTY, where the genotype exists before the Effective Date of the CA, no further breeding or selection is required after the Effective Date of the CA, and the LICENSED VARIETY is propagated by rhizomes; + + (b) [[***] x%] of LICENSE INCOME if the LICENSED VARIETY constitutes IGER INTELLECTUAL PROPERTY, in all cases not included in Article 4.2.2 (a); or + + (c) [[***] x%] of LICENSE INCOME if the LICENSED VARIETY constitutes JOINT INTELLECTUAL PROPERTY. CERES-IGER Collaboration Agreement Page 61 of 75 + + + + + + + +4.3 In addition to the royalty provided in Article 4.2, CERES agrees to pay a royalty on NET SALES of the LICENSED VARIETY equal to the royalty due, on the basis of the Convention on Biological Diversity, by IGER to the country or countries where the material on which the LICENSED VARIETY is based has been collected, up to a maximum of [***] percent ([***]%) of NET SALES, and an equivalent additional royalty on LICENSE INCOME to be determined. + +4.4 Where any royalty payments are subject to a withholding tax, CERES shall pay the net royalty and shall provide to IGER proper certificates for such withholding tax. + +4.5 All sums payable by CERES to IGER under this Agreement shall be payable in United States dollars. Royalties shall be payable by March 31 of each year with respect to the NET SALES and LICENSE INCOME received by CERES and any AFFILIATED COMPANIES in the preceding calendar year. Payments shall be made by check to the following address: + +Institute Secretary Institute of Grassland and Environmental Research Plas Gogerddan Aberystwyth Ceredigion SY23 3EB United Kingdom + +Such payments shall be accompanied by a written report setting forth the production volumes and sales by CERES, and each SUBLICENSEE, of COMMERCIAL PROPAGULES during the calendar year, permitted exclusions, NET SALES, LICENSE INCOME and the royalties due. + +4.6 Payments required under this Agreement shall, if overdue, bear interest at a per annum rate of one percent (1%) above the prime interest rate in effect on the due date, as reported in the Wall Street Journal, from the date the payment is due until it is received. + +5.1 The Parties acknowledge that the denomination for the subject variety is established as: [X]. + +5.2 CERES shall use the denomination of the LICENSED VARIETY to identify that variety. + +5.3 CERES will determine a COMMERCIAL NAME for the LICENSED VARIETY under which the COMMERCIAL PROPAGULES of the LICENSED VARIETY will be marketed and sold. + +5.4 CERES may determine TRADEMARK(s) associated or intended for use with a LICENSED VARIETY. CERES shall be the owner of all rights in any such TRADEMARK, chosen, applied to, used or registered in association with the LICENSED VARIETY. + +Confidential Treatment Requested and the Redacted Material has been filed separately field with the Commission + +5. DENOMINATIONS, VARIETY NAMES, TRADE MARKS. + + CERES-IGER Collaboration Agreement Page 62 of 75 + + + + + + + +6.1 CERES shall be responsible for multiplying propagating material of the LICENSED VARIETY within the TERRITORY and using commercially reasonable efforts to produce, market and sell the resultant COMMERCIAL PROPAGULES so as to ensure that COMMERCIAL PROPAGULES of the LICENSED VARIETY are commercially available in the United States and/or Europe in reasonable quantities and at a reasonable price no later than [X years — depends on propagation] from the Effective Date. + +6.2 CERES shall meet its own cost of promotion, trials and listing of the LICENSED VARIETY in the TERRITORY. + +6.3 CERES shall use reasonable endeavors to ensure that all COMMERCIAL PROPAGULES of the LICENSED VARIETY offered for sale by CERES, any AFFILIATED COMPANY or SUBLICENSEE shall meet the normally accepted standards of the propagule trade or certifying authorities relating to propagule quality within the relevant jurisdiction of the TERRITORY. + +6.4 CERES shall at all times comply with and abide by any governing law, rules, regulations, plant variety rights legislation or the like and/or requirements relating to the quality and sale of COMMERCIAL PROPAGULES of the LICENSED VARIETY in the relevant jurisdictions of the TERRITORY and shall use all reasonable commercial endeavors to obtain any necessary regulatory approvals for the LICENSED VARIETY. + +7.1 CERES will use commercially reasonable efforts to actively market the LICENSED VARIETY in the United States, and in CERES' discretion, in other jurisdictions in the TERRITORY, wherein such efforts shall be appropriately reflected in the MARKETING PLAN. + +7.2 This provision shall apply after the third (3rd) anniversary of the market introduction of the LICENSED VARIETY in the United States propagated by a method that results in the LICENSED VARIETY being commercially competitive as compared to other energy crops being grown at that time in the United States. If IGER identifies a bona fide third party who presents a sound commercialization plan for the LICENSED VARIETY in a country or countries of the TERRITORY where the LICENSED VARIETY is not commercially developed by or through CERES, or an AFFILIATED COMPANY ("COUNTRY"), IGER will refer such opportunity to CERES by written notification and CERES will diligently investigate such opportunity. No later than one (1) year after the aforementioned notification from IGER, CERES will inform IGER in writing whether or not CERES wishes to commercialize the LICENSED VARIETY, directly or indirectly, in the COUNTRY. If CERES declines the opportunity entirely, without REASONABLE GROUNDS, IGER will be granted a non-exclusive license with the right to grant sublicenses to test, produce and sell the LICENSED VARIETY in the COUNTRY. If CERES informs IGER in writing that CERES is planning to commercialize the LICENSED VARIETY in all or part of the COUNTRY, directly or indirectly (whether or not through the third party identified by IGER), and CERES has not taken reasonable steps towards the implementation of such commercialization within two (2) years after so informing IGER, unless CERES informs IGER of REASONABLE GROUNDS for its failure or delay + +6. QUALITY AND PERFORMANCE REGULATIONS. + +7. DILIGENCE. + + CERES-IGER Collaboration Agreement Page 63 of 75 + + + + + + + +to implement commercialization plans, IGER will be granted a non-exclusive license with the right to grant sublicenses to test, produce and sell the LICENSED VARIETY in the COUNTRY. + +"REASONABLE GROUNDS" shall mean any factors that a reasonable business person would view as too negative to justify the market opportunity in the light of usual legal business practices in the United States or Europe, including without limitation factors such as the risk that products will be sold below a normal market price, the risk that dumping will occur, the risk of cannibalization of other markets for the LICENSED VARIETY or of other products sold directly or indirectly by CERES, poor intellectual property protection or enforcement, no propagation method which allows the LICENSED VARIETY to be commercially competitive in that country, etc. + +7.3 CERES shall submit to IGER with its annual report under Article 4.5 a report of progress made by CERES (and any AFFILIATED COMPANY), directly or through its SUBLICENSEES, in achieving marketing goals of previous years and meeting the objectives of the MARKETING PLAN submitted and agreed upon for the TERRITORY. From time to time, but at least annually, CERES shall submit an amended and updated MARKETING PLAN. + +8.1 CERES shall keep and shall cause any SUBLICENSEE to keep accurate records of all production and sales of COMMERCIAL PROPAGULES of the LICENSED VARIETY in each country of the TERRITORY where such sales are made. These records will include, at least, the number of acres of LICENSED VARIETY COMMERCIAL PROPAGULES under production, the physical location of the LICENSED VARIETY production field owned or controlled by CERES, any AFFILIATED COMPANY or any SUBLICENSEE, the total amount of LICENSED VARIETY COMMERCIAL PROPAGULES produced, the total amount of LICENSED VARIETY COMMERCIAL PROPAGULES sold and all invoices or shipping documents relating to such sales. + +8.2 CERES shall allow an independent auditor, reasonably acceptable to CERES, appointed by and paid for by IGER to inspect the records of CERES and any AFFILIATED COMPANY pertaining to the LICENSED VARIETY for the exclusive purpose of verifying the accuracy of the reports provided. Any such audit shall occur no more frequently than annually. Any such inspection shall occur during normal business hours and after IGER has provided written notice at least ten business days prior to the date of the intended inspection. IGER agrees that it and its representatives will hold the information obtained from the inspection in confidence, and not use it for any purpose other than verification of the royalties required to be paid hereunder. + +9.1 Each Party shall notify the other of any suspected infringement of any INTELLECTUAL PROPERTY RIGHTS covering the LICENSED VARIETY. CERES will have the exclusive right, but no obligation, at its own discretion and expense, to take any action to enforce and to initiate and prosecute suits for infringement of the INTELLECTUAL PROPERTY RIGHTS. CERES and IGER will consult with each other upon a course of action and enforcement strategy. CERES will be responsible for the conduct of any such enforcement action, and IGER will reasonably cooperate with CERES to effect the enforcement action, and if appropriate, determine a settlement position. CERES shall be responsible for retaining counsel and shall promptly notify IGER following + +8. BOOKS, RECORDS AND RIGHT OF AUDIT. + +9. ABATEMENT OF INFRINGEMENT. + + CERES-IGER Collaboration Agreement Page 64 of 75 + + + + + + + +retention of counsel, and IGER agrees to be represented by such counsel as may be required for any enforcement action or settlement. For purposes of settlement, CERES shall be the contact with the parties' counsel as well as the opposing party(ies) and shall have the right to enter into settlements. CERES shall keep IGER advised as to all developments with respect to the enforcement action and settlement discussions, which includes supplying to IGER copies of all papers received and filed in sufficient time for IGER to comment thereon. IGER may attend any and all meetings with the parties' counsel and the opposing side for settlement purposes. IGER agrees to voluntarily join in any action brought by CERES as a party plaintiff/defendant, if necessary, at the expense of CERES. If necessary, IGER agrees to enter into a joint defense agreement. + +9.2 Any damages received by the CERES as a result of an enforcement action of the INTELLECTUAL PROPERTY RIGHTS, after deduction of all enforcement related costs incurred by CERES, shall be considered as either NET SALES or LICENSE INCOME for the purpose of remuneration payments to IGER, to whichever the damages are reasonably deemed equivalent. + +10.1 As used in this Agreement, the term "Confidential Information" shall mean all non-public-information received by one Party from the other in the framework of this Agreement. Confidential Information can include, but is not limited to, information concerning the disclosing Party's operations, research, processes, techniques, data, sales, marketing, promotion and other activities. + +10.2 From receipt to five (5) years after the disclosure of the relevant CONFIDENTIAL INFORMATION, the receiving Party shall not use, except (a) for the benefit of the Parties' collaboration, or (b) such use as is expressly allowed by this Agreement, and/or disclose any Confidential Information to any third party without the prior written consent of the disclosing Party if the Confidential Information was received from the other Party, or the prior written consent of both Parties if the Confidential Information was generated during the performance of this Agreement, excepting that information described in Article 10.3. Confidential Information shall only be made accessible to each Party's employees on a need- to-know basis. + +10.3 The receiving Party shall have no obligations of confidentiality for information that: can be established through written evidence to be in the possession of the receiving Party prior to the disclosure by the disclosing Party; is or becomes public knowledge through no fault of the disclosing Party; is acquired from others not under an obligation of confidentiality to the disclosing Party. In addition, CERES shall have the right to proceed to disclosures of Confidential Information (a) as required to file for INTELLECTUAL PROPERTY RIGHTS or registration, (b) as required to exercise its commercialization rights granted in or on the basis of this Agreement and for related marketing activities, (c) as required by laws, rules or regulation or court ordering such as, without limitation, SEC regulations, or (d) in CERES' reasonable judgment, to (potential) investors and business partners. + +Any notices required to be given or which shall be given under this Agreement shall be in writing and delivered by overnight (trackable) courier addressed to the Parties as follows: + +10. CONFIDENTIALITY. + +11. NOTICES. + + CERES-IGER Collaboration Agreement Page 65 of 75 + + + + + + + +Vice President of Product Development cc: Legal Department Ceres, Inc. 1535 Ranch Conejo Blvd. Thousand Oaks, California 91320 United States of America + +Institute Business Manager OR for legal or financial notices: Institute Secretary Institute of Grassland and Environmental Research Plas Gogerddan Aberystwyth Ceredigion SY23 3EB United Kingdom + +Notices under this Agreement sent by overnight courier by one Party to the other Party at its above address shall be deemed to have been given or made as of the date following the date so mailed. + +12.1 THE PARTIES ACKNOWLEDGE AND AGREE THAT NEITHER PARTY HAS MADE ANY REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. + +12.2 IN NO EVENT SHALL EITHER PARTY BE HELD RESPONSIBLE FOR ANY SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES OR LOSS OF PROFIT ARISING OUT OF THE USE OF ANY INTELLECTUAL PROPERTY RIGHTS COVERED BY THIS AGREEMENT, OR THE IMPLEMENTATION OF THIS AGREEMENT, EVEN IF SUCH PARTY IS ADVISED IN ADVANCE OF THE POSSIBILITY OF SUCH DAMAGES. + +12.3 Nothing in this Agreement shall be construed as: + +12. DISCLAIMERS. + + (a) a warranty or representation by either Party as to the validity or scope of any INTELLECTUAL PROPERTY RIGHTS, patent rights or plant variety rights; + + (b) a warranty or representation by either Party that anything made, used, sold or otherwise disposed of pursuant to any license granted under this Agreement is or will be free from infringement of patents of third parties; + + (c) any obligations by either Party to bring or prosecute actions or suits against third parties for patent infringement; and + + (d) a grant by implication, estoppel, or otherwise of any licenses under any intellectual property rights of IGER or other persons other than as provided in Article 2.1 hereof. CERES-IGER Collaboration Agreement Page 66 of 75 + + + + + + + +Excluding those acts directly attributable to the negligence or willful misconduct of IGER, CERES agrees to indemnify, hold harmless and defend IGER, its trustees, officers, employees and agents and the breeders (as named in the INTELLECTUAL PROPERTY RIGHTS, if any) against any and all liability and/or damages with respect to any claims, suits, demands, judgments or causes arising out of (a) the production, development, storage, sale or any other use of the LICENSED VARIETY propagules and/or exercise of rights granted hereunder by CERES, its SUBLICENSEES, distributors, agents, representatives or AFFILIATED COMPANIES; (b) the use by end-users and other third parties of LICENSED VARIETY propagules; and/or (c) any representation, warranty or statement by CERES, its SUBLICENSEES, distributors, agents, representatives or AFFILIATED COMPANIES, concerning IGER, LICENSED VARIETY propagules or any INTELLECTUAL PROPERTY RIGHTS. In the event any such claims, demands or actions are made, CERES shall defend IGER at CERES' sole expense by counsel selected by CERES and reasonably acceptable to IGER. IGER shall promptly notify CERES, in writing, of any such claims, suits or demands upon discovery and shall cooperate with CERES in the defense, provided that CERES shall have the right to lead the defense including entering into any settlement. CERES will keep IGER informed about the conduct of the defense and consult IGER regarding any settlement proposals. + +14.1 Neither Party shall publicize or disclose the terms of this Agreement without the prior written approval of the other Party, subject to the same exceptions as set forth in Article 10.3(a) through (d). + +14.2 The Parties intend to issue joint press releases regarding this collaboration. Any such press release and any press release by either Party will be subject to the prior written approval of both Parties; provided however, that (i) CERES shall have the right to otherwise disclose information as may be required in CERES' judgment to comply with SEC regulations or other laws, rules or regulations governing disclosure of information and (ii) IGER shall have the right to otherwise disclose information as may be required in IGER's judgment to comply with applicable regulations or other laws, rules or regulations governing disclosure of information. Notwithstanding the unilateral disclosure rights provided for in this article, the disclosing Party shall provide the other Party a copy of any such unilateral disclosure preferably prior to its release. + +15.1 All disputes, differences or questions arising out of or in connection with this Agreement, or related to the alleged breach, termination, validity, interpretation or violation thereof, shall be submitted for resolution to the Chief Executive Officer of CERES and the Director of IGER, who shall convene, whether in person or otherwise, to resolve such dispute through negotiation in a timely manner. Either Party may initiate a resolution procedure by providing written notice ("Dispute Notice") to the other Party, and any such Dispute Notice must set forth the subject matter of the dispute, difference or question. If the dispute remains unresolved sixty (60) days after the Dispute Notice, either Party may initiate proceedings pursuant to Article 15.2. + +13. INDEMNIFICATION. + +14. PUBLICITY AND USE OF NAMES. + +15. DISPUTE RESOLUTION AND APPLICABLE LAW. + + CERES-IGER Collaboration Agreement Page 67 of 75 + + + + + + + +15.2 Dispute Resolution and Arbitration. In the event of any dispute arising out of or in connection with this Agreement, the Parties agree to submit the matter to settlement proceedings under the ICC ADR Rules. If the dispute has not been settled pursuant to the said Rules within forty- five (45) days following the filing of a Request for ADR or within such other period as the Parties may agree in writing, such dispute shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by three (3) arbitrators appointed in accordance with the said Rules of Arbitration. The provisions set forth hereinafter shall apply to the arbitration procedures, without prejudice to the ICC Rules of Arbitration. + +15.2.1 Qualifications of Arbitrators. Each arbitrator appointed shall have a reputation as being experienced in the legal and technical matters related to the dispute, shall be required to disclose, among other disclosures, any prior involvement with the legal and technical matters related to the dispute and any involvement with a competitor of any Party, and shall not be presently nor in the past have been affiliated with any Party or a competitor of any Party. Notwithstanding the method of their appointment, each arbitrator shall be required to meet the standards contained in the Rules with respect to independence. + +15.2.2 Location of the Arbitration. The seat of arbitration shall be Paris, France. The arbitrators may hold hearings at such other locations as the arbitrators shall determine, after consultation with the Parties. + +15.2.3 Language of Arbitration. The arbitral proceedings and all pleadings and written evidence shall be in the English language. Any written evidence originally in a language other than English shall be submitted in English translation accompanied by the original or true copy thereof + +15.2.4 Limitation on Remedies. The arbitrators are precluded from awarding punitive or exemplary damages. In no event shall the arbitrators have the powers of an amiable compositeur. + +15.3 Applicable law. This Agreement shall be governed by, and construed and interpreted in accordance with, the laws of the State of New York without regard to the principles of conflicts of law thereof. + +16.1 Subject to any other rights of termination under this Article, this Agreement shall remain in full force and effect until: + +16. TERM AND TERMINATION. + + (a) on a jurisdiction-by-jurisdiction basis, the expiration of the INTELLECTUAL PROPERTY RIGHTS in the respective jurisdiction covering the LICENSED VARIETY; or + + (b) in those jurisdictions in which the LICENSED VARIETY is sold but no INTELLECTUAL PROPERTY RIGHTS are obtained, the tenth (10th) anniversary of the date of the first sale of a LICENSED VARIETY in such jurisdiction. CERES-IGER Collaboration Agreement Page 68 of 75 + + + + + + + +16.2 Each Party shall have the right to terminate this Agreement unilaterally by giving written notice of termination to the other Party if such other Party fails to satisfy its material obligations, which shall include but are not limited to, making required reports and making required payments, under this Agreement, and such Party subsequently fails to cure such failure(s) within (a) thirty (30) days for failures to remit payment for amounts due under this Agreement and (b) ninety (90) days for all other obligations after receipt of written notice from the non-breaching Party specifying such failure. + +16.3 IGER will have the right to terminate this Agreement unilaterally with thirty (30) days' written notice to CERES, (a) if CERES seeks protection under any bankruptcy, insolvency, receivership, trust, deed, creditors arrangement or comparable proceeding or if any such proceeding is instituted against CERES (and not dismissed within one hundred twenty (120) days) or (b) in case of dissolution or winding up of CERES (excluding any situation where all or substantially all of CERES' assets, stock or business to which this Agreement relates are acquired by a third party (whether by sale, acquisition, merger, operation of law or otherwise)). + +16.4 CERES may after consultation with IGER terminate this Agreement by written notice if in the commercially reasonable opinion of CERES the markets for the LICENSED VARIETY change or do not develop as anticipated, so as to render the production, promotion and sale of the LICENSED VARIETY uneconomical or impractical or if CERES decides to cease substantially all activities in MISCANTHUS. + +16.5 The Parties may terminate this Agreement at any time by mutual, written agreement. + +16.6 Termination of this Agreement for any reason will not relieve either Party of any obligation or liability accrued under this Agreement before termination or rescind any payments made or due before termination. Articles 8, 10, 11, 12, 13, 14, 15, and 17 will survive any termination of this Agreement. + +16.7 Termination of this Agreement shall not affect the rights and obligations of the Parties accrued prior to termination hereof. + +16.8 Upon termination of this Agreement, no existing SUBLICENSES granted by CERES or AFFILIATED COMPANIES to third parties shall be affected by such termination, and all such sublicenses shall remain in effect according to their terms, pursuant to the election of each SUBLICENSEE. IGER shall continue to be entitled to payments relating to such SUBLICENSES pursuant to this Agreement and such SUBLICENSES. + +16.9 Termination of this Agreement shall not prevent: + + (a) IGER from recovering any royalties due as of termination; and + + (b) either Party from obtaining a remedy for any breach of the provisions of this Agreement. CERES-IGER Collaboration Agreement Page 69 of 75 + + + + + + + +17.1 Entire Agreement/Modifications. This Agreement constitutes the entire agreement between the Parties hereto with respect to the subject matter hereof, and there are no representations, warranties, covenants or obligations except as set forth herein. This Agreement supersedes all prior and contemporaneous agreements, understandings, negotiations and discussions, written or oral, of the Parties hereto relating to the subject matter hereof. This Agreement may only be amended, modified or superseded by a writing executed by the authorized representative of the Parties hereto. + +17.2 Severability. This Agreement, to the greatest extent possible, shall be construed so as to give validity to all of the provisions hereof. If any provision of this Agreement is or becomes invalid, is ruled illegal by a court of competent jurisdiction or is deemed unenforceable under the current applicable law from time to time in effect during the term of this Agreement, the remainder of this Agreement will not be affected or impaired thereby and will continue to be construed to the maximum extent permitted by law. In lieu of each provision which is invalid, illegal or unenforceable, there will be substituted or added as part of this Agreement by mutual written agreement of the Parties, a provision which will be as similar as possible, in economic and business objectives as intended by the Parties to such invalid, illegal or unenforceable provision, but will be valid, legal and enforceable. + +17.3 Waiver. No failure or delay by either Party in exercising any right or remedy under this Agreement will waive any provision of this Agreement. Nor will any single or partial exercise by either Party of any right or remedy under this Agreement preclude it from otherwise or further exercising any rights or remedies which it may have, or any other rights or remedies granted by any law or any related document. + +17.4 Enforcement. In the event an action is commenced by either Party against the other to enforce any of the provisions of this Agreement, the prevailing Party shall be entitled to recover from the other Party reasonable attorneys' fees, court costs and necessary disbursements incurred in connection with such action. + +17.5 Licensor-Licensee Relationship. The relationship of the Parties is that of independent contractors and licensor-licensee. Nothing herein is intended or will be construed to establish any agency, partnerships, or joint ventures. Neither Party has any authority to act for and/or to bind the other Party in any way or to represent that either is in any way responsible for the acts of the other, except as may be explicitly provided for herein or authorized by the non-acting Party in writing. Neither Party is authorized or empowered to act as an agent for the other Party for any purpose, nor shall either Party be bound by the acts or conduct of the other Party. + +17.6 Assignablility. This Agreement binds and enures to the benefit of the Parties, their successor or assigns, but may not be assigned by either Party without the prior written consent of the other Party; provided however, CERES shall have the right to assign its rights and obligations under this Agreement to any AFFILIATED COMPANY without such prior consent. Each Party shall have the right to assign its rights and obligations under this Agreement to a third party in conjunction with the transfer to such third party of substantially all of the assets of such Party associated with performance under this Agreement without such prior consent. + +17. GENERAL. + + CERES-IGER Collaboration Agreement Page 70 of 75 + + + + + + + +17.7 Force Majeure. No Party shall be responsible to the other Party for delay or failure in performance of any the obligations imposed by this Agreement, provided such failure shall be occasioned by fire, flood, explosion, lightning, wind storm, hailstorm, earthquake, subsidence of soil, failure of machinery or equipment or supply of materials, discontinuity in the supply of power, court order or governmental interference, terrorist attacks, civil commotion, riot, war, strikes, labor disturbances, transportation difficulties, labor shortage, natural genetic variation of any living matter or by any other cause of like or unlike nature beyond the reasonable control and without fault or negligence of such Party. + +IN WITNESS WHEREOF, IGER and CERES have caused this Agreement to be duly executed as indicated below. INSTITUTE OF GRASSLAND AND ENVIRONMENTAL RESEARCH CERES, INC. + + By: By: + +Name: Name: + +Title: Title: + +Date: Date: + + By: By: + +Name: Name: + +Title: Title: + +Date: Date: + + CERES-IGER Collaboration Agreement Page 71 of 75 + + + + + + + +ANNEX I INTELLECTUAL PROPERTY + +INTELLECTUAL PROPERTY RIGHTS for the LICENSED VARIETY + +JOINT INTELLECTUAL PROPERTY + +IGER INTELLECTUAL PROPERTY + +IGER BACKGROUND INTELLECTUAL PROPERTY CERES-IGER Collaboration Agreement Page 72 of 75 + + + + + + + +ANNEX II MARKETING PLAN (Article 1.18) + +1. TIMING + + The MARKETING PLAN is to cover a five year period and shall be reviewed annually with adjustments made for further five year periods in line with market conditions (or projections of the same) and the agronomic performance of the LICENSED VARIETY. + +2. POSITIONING + + An assessment of the potential of the LICENSED VARIETY in an identified market. + +3. PROMOTION + + Details of all project promotional activities, plus anticipated, related expenditures, that are intended to the LICENSED VARIETY achieves its maximum market potential. + +4. DISTRIBUTION + + Details of the proposed distribution network and activities for supporting the distributor or retailer plus anticipated promotion activities of the distributor/retailer. NOTE: If the anticipated distribution network includes the creation of a new COMMERCIAL PROPAGULES company, details regarding this important component should be included here. + +5. EVALUATION + + Details of planned evaluation and demonstration, if any. + +6. PROTECTION + + Anticipated intellectual property protection requirements. + +7. COMMERCIAL PROPAGULES SALES + + Estimated sales including grade of COMMERCIAL PROPAGULES, volume and price and country of destination. + +8. ROYALTY INCOME + + a. Estimated royalty payments; and + + b. Commencement date of payment. + +9. COMMERCIAL PROPAGULES PRODUCTION + + Estimated production, including grade of COMMERCIAL PROPAGULES, land area to be sown, estimated production and harvest date. CERES-IGER Collaboration Agreement Page 73 of 75 + + + + + + + +EXHIBIT H + +to the Collaboration Agreement between IGER and CERES + +CERTAIN REMUNERATION PRINCIPLES + +1. If CERES uses germplasm that is IGER INTELLECTUAL PROPERTY or IGER BACKGROUND INTELLECTUAL PROPERTY or JOINT INTELLECTUAL PROPERTY to develop varieties of the COLLABORATION CROP outside the RESEARCH PROJECTS, the following guiding principles will apply to determine the remuneration due to IGER by CERES upon commercialization of such varieties: + +1.1 Royalty on NET SALES (defined as in EXHIBIT H) of varieties resulting from crosses of IGER INTELLECTUAL PROPERTY or IGER BACKGROUND INTELLECTUAL PROPERTY germplasm with CERES or third party or public germplasm: + +1.1.1 if the variety contains equal to or less than one hundred percent (100%) but more than seventy-five percent (75%) of IGER INTELLECTUAL PROPERTY or IGER BACKGROUND INTELLECTUAL PROPERTY germplasm where said germplasm's genotype exists before the Effective Date of the CA, no further breeding or selection is done in any RESEARCH PROJECT and the variety is commercialized by rhizomes: [***] percent ([***]%) + +1.1.2 if the variety contains equal to or less than one hundred percent (100%) but more than seventy-five percent (75%) of IGER INTELLECTUAL PROPERTY or IGER BACKGROUND INTELLECTUAL PROPERTY germplasm in all cases not included in 1.1.1: [***] percent ([***]%) + +1.1.3 if the variety contains equal to or less than one hundred percent (100%) but more than seventy-five percent (75%) of JOINT INTELLECTUAL PROPERTY germplasm: [***] percent ([***]%) + +1.1.4 if the variety contains equal to or less than seventy-five percent (75%) but more than twenty-five percent (25%) of IGER INTELLECTUAL PROPERTY or IGER BACKGROUND INTELLECTUAL PROPERTY germplasm: [***] percent ([***]%) + +1.1.5 if the variety contains equal to or less than seventy-five percent (75%) but more than twenty-five percent (25%) of JOINT INTELLECTUAL PROPERTY germplasm: [***] percent ([***]%) + +1.1.6 if the variety contains twenty-five percent (25%) or less IGER INTELLECTUAL PROPERTY or IGER BACKGROUND INTELLECTUAL PROPERTY or JOINT INTELLECTUAL PROPERTY germplasm, but contains one (1) TRAIT that has been introduced through crossing from such germplasm: [***] percent ([***]%); if two (2) or more TRAITS introduced through crossing from such germplasm: [***] percent ([***]%) + +Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission + + CERES-IGER Collaboration Agreement Page 74 of 75 + + + + + + + +1.1.7 in cases other than 1.1.1 through 1.1.6 no remuneration will be due (except if clause 2 hereinafter applies). + +2. If CERES uses IGER INTELLECTUAL PROPERTY or JOINT INTELLECTUAL PROPERTY other than germplasm to develop a product, a fair and reasonable remuneration will be due by CERES to IGER, taking into account the relative contributions of the Parties to the research, development, production, marketing and sales of the product. Upon CERES' request, the Parties will negotiate diligently and in good faith to determine such remuneration for one or more particular inventions or products. + +3. Duration of royalty payments will be similar to what is provided in the model license agreement for non-transgenic varieties (non-UK) in EXHIBIT G. + + "TRAIT" shall mean a valuable characteristic of a plant selected by CERES (e.g. drought tolerance, specific flowering time) where at least seventy percent (70%) of such characteristic is associated with no more than two (2) identified markers. + + 1.2 Royalty on LICENSE INCOME (defined as in EXHIBIT H) — to be determined in function of business model. + + CERES-IGER Collaboration Agreement Page 75 of 75 + + + + + + + +AMENDMENT I + +to the Collaboration Agreement effective as of April 1, 2007 between Institute of Grassland and Environmental Research ("IGER") and Ceres, Inc. ("CERES") (the "Agreement"). + +Made in two (2) copies. + +Page 1 of 1 + + 1. The Parties agree to replace "sixty (60) days" by "two hundred ten (210) days" in Article 14.1 (e) (v) of the Agreement. + + 2. The Parties agree that this Amendment I is effective as of June 1, 2007. + + 3. For the remainder, the Agreement remains unchanged and this Amendment I shall form an integral part thereof. + + INSTITUTE OF GRASSLAND AND ENVIRONMENTAL RESEARCH CERES, INC. By: /s/ MERVYN HUMPHREYS By: /s/ RICHARD FLAVELL Name: + +Professor Mervyn Humphreys Name: + +Richard Flavell, CBE, FRS Title: Director Title: Chief Scientific Officer By: /s/ RICHARD HAMILTON Name: + +Richard Hamilton Title: President and Chief Executive Officer + + + + + + + +AMENDMENT II + +to the Collaboration Agreement effective as of April 1, 2007 between the Institute of Grassland and Environmental Research ("IGER") and Ceres, Inc. ("CERES"), as amended (the "Agreement") and to SCHEDULE 1 between the Institute of Grassland and Environmental Research ("IGER") and Ceres, Inc. ("CERES") and dated April 1, 2007, as amended ("Schedule 1"). + +WHEREAS, the Institute of Grassland and Environmental Research ("IGER") and CERES entered into the Agreement and Schedule 1 on April 1, 2007; + +WHEREAS, on April 1, 2008 IGER merged with Aberystwyth University Institutes of Biological Sciences and Rural Sciences to form the new Institute of Biological, Environmental and Rural Sciences of Aberystwyth University ("AU"); + +WHEREAS, as a consequence of such merger, the Parties wish to substitute AU in place of IGER as a contract party to the Agreement; + +WHEREAS, AU and CERES wish to amend the Agreement, as set forth hereinafter. + +NOW THEREFORE, in consideration of the premises and of the mutual covenants and agreements contained herein and of other good and valuable consideration, the Parties have agreed and do hereby agree as follows: + +Page 1 of 2 + +Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission + + 1. The Parties agree that Aberystwyth University, a Higher Education Establishment registered in the United Kingdom No. RC000641, having an office at Old College, King Street, Aberystwyth SY23 2AX ("AU") should be substituted as a contract party to the Agreement in place of IGER. + + 2. The Parties agree to amend Article 14.1 (e) (v) of the Agreement so as to read as follows: + + "(v) with thirty (30) days' written notice to AU if Defra has not assigned to AU, or granted to AU a license reasonably satisfactory to CERES on, the Intellectual Property vested in Defra or the Crown or the Secretary of State pursuant to the DEFRA agreement NF 0426 within three (3) years from the Effective Date (the "Assignment/License"); provided however that Ceres will not unreasonably refuse to extend such three (3) year term by six (6) months if so requested by AU by December 31, 2009." + + 3. The Parties agree to add the following clause in Article 6 of Schedule 1: + + "As long as the assignment or license grant by Defra to AU, and the corresponding grant of a license or sublicense to CERES in compliance with the Agreement, has not occurred, CERES will have the right to withhold [***] + + + + + + + +Made in two (2) copies. + +Page 2 of 2 + +Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission + + percent ([***]%) of the funding payable by CERES to AU pursuant to Attachment B — Budget, attached to Schedule 1 (as this may be amended from time to time). CERES' rights to withhold such payments will terminate: + + (i) with respect to [***] percent ([***]%) of the funding, as of the date CERES effectively receives a license or sublicense satisfactory to CERES on CERTAIN MISCANTHUS ACCESSIONS (defined in Article 3.2.1 b. of the Agreement) and related information. + + (ii) with respect to [***] percent ([***]%) of the funding as of the date CERES effectively receives a license or sublicense satisfactory to CERES on the Intellectual Property vested in Defra or the Crown or the Secretary of State pursuant to the Defra agreement NF0426." + + 4. The Parties agree that this Amendment II is deemed to have become effective as of May 1, 2008. + + 5. For the remainder, the Agreement and Schedule 1 remain unchanged and this Amendment II shall form an integral part thereof. + + ABERYSTWYTH UNIVERSITY CERES, INC. By: Name: /s/ S.G.A. DURBIN + +S.G.A. Durbin By: Name: /s/ RICHARD FLAVELL + +Richard Flavell, CBE, FRS + +Title: Director, Risk & Research Finance Title: Chief Scientific Officer + + By: Name: /s/ RICHARD HAMILTON + +Richard Hamilton + + Title: President and Chief Executive Officer + + + + + + + +Pages where confidential treatment has been requested are stamped 'Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission,' and the confidential section has been marked as follows: [***]. + +SCHEDULE 1—Plant Breeding, Markers, Composition, Agronomy and Propagation + +THIS SCHEDULE is made this 1st day of April, 2007. + +WHEREAS, CERES and IGER have entered into a Collaboration Agreement ("CA"), dated April 1, 2007, which allows for the undertaking of RESEARCH PROJECTS pursuant to SCHEDULES, these terms being defined in the CA; and + +THEREFORE, the Parties have agreed to undertake the following RESEARCH PROJECT as defined herein on the following terms and conditions: + +GENERAL + +RESEARCH PROJECT TITLE: Developing Miscanthus Cultivars for Use in Bioenergy Production + +Development of Miscanthus Species for Energy Crops — Scientific Overview + +Miscanthus species are capable of producing large quantities of biomass with minimal inputs over a wide geographic range. CERES and IGER aim to develop commercial biomass crops from leading Miscanthus lines via a collaboration with 2 major foci: I) propagation; and II) breeding. These are described in turn below. + +I. Propagation. + +The major barrier to profitable Miscanthus cropping is efficient and inexpensive propagation. In the UK, subsidy support makes [***] of Miscanthus x giganteus an economically viable planting method. This is not the case in [***], where there is no government support for the crop and initial [***] from which to generate planting material is extremely limited. + +It is not commercially feasible to produce Miscanthus on a large scale in [***] from traditional [***] schemes. Success of Miscanthus crops for large markets will be determined by development of + +CERES-IGER SCHEDULE 1 + +Page 1 of 10 + +Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission + + BETWEEN CERES, INC. ("CERES"), a Delaware corporation, having its principal place of business at 1535 Rancho Conejo Blvd., Thousand Oaks, CA 91320, United States of America, and + + + +INSTITUTE OF GRASSLAND AND ENVIRONMENTAL RESEARCH ("IGER"), a company limited by guarantee, registered in England No. 473456 and a registered Charity No. 272150, having an office at Plas Gogerddan, Aberystwyth, Ceredigion, SY23 3EB, United Kingdom + +A. Unless otherwise specified herein, the terms of the CA shall apply to this SCHEDULE. + +B. In the event of any difference between the terms of this SCHEDULE and the CA, then the terms of this SCHEDULE shall prevail. + +I.A. Rationale: + + + + + + + +cost-effective propagation technology, and the magnitude of success depends on the speed with which this technology can be developed. + +All other lines of crop development research in this collaboration will be dependent on success with propagation. + +To be successful, Miscanthus must be planted from small, homogenous propagules that can be cheaply and rapidly produced, flow-ably transported, stored for months and consistently emerge after planting. In theory, the best propagule for Miscanthus production is seed. However, propagation of Miscanthus from seed is complicated and difficult. Development of [***] Miscanthus varieties will be a [***] of the [***] of this collaboration. + +An alternative approach to seed in the short term is to [***] Miscanthus from [***] as is common in [***]. [***] is more feasible with decreasing [***] and has not been thoroughly explored in Europe. The potential of [***] should be investigated from both an applied and basic perspective. It was agreed that while the approach is more likely to work in [***], it should also include x [***] and at least initially [***]. + +Development of [***] and [***] techniques for [***] Miscanthus cropping systems will utilize a combination of theoretical and applied methods in the lab, glasshouse and field. + +CERES-IGER SCHEDULE 1 + +Page 2 of 10 + +Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission + +I.B. Goal: Applied methods for effective [***] of Miscanthus hybrids. + + I.B.i. Objective 1: Identify [***] techniques and optimize them with existing hybrids. + + Methods: Screen [***], x [***] and other species at least initially for [***] ability with multiple techniques in a broad range of factorial field and glasshouse experiments. Glasshouse experiments can be conducted year-round at IGER and at CERES in Thousand Oaks, CA. Additional experiments may be conducted at other CERES locations added at a later date. Field experiments will be conducted [***] at IGER and begin in multiple locations in [***] during the three (3) year period of this SCHEDULE. + + I.B.ii. Objective 2: More basic genetic and physiological work aimed at characterising and understanding [***]. + + Methods: A series of experiments into the [***] of [***] with a focus on inducing plant growth from [***] ([***] and [***]) [***]. Work should explore [***] cues ([***], [***], [***]) as well as [***] ([***]). Explore [***] and score in [***] if possible, to locate [***]. Evaluate candidate [***] (from Arabidopsis, [***] if possible and other species) promoting [***] frequency. + +I.C. Goal: Applied methods for effective [***] of Miscanthus hybrids. + + I.C.i. Objective 1: Demonstrate potential of [***] and create protocols. + + Methods: Check [***] of [***] and [***] of a wide range of [***] in response to [***] and [***] with a combination of [***], glasshouse and finally field experiments. Interpret results in context of [***] range, genotype and [***] conditions under which the [***] was [***]. Produce guidelines for effective [***] and [***]. + +I.D. Goal: [***] based systems for rapid [***] of germplasm and plants to be used in [***]. + + + + + + + +II. Breeding + +Miscanthus is an unimproved plant species with great potential as an energy crop. [***] has not yet been fully collected and characterized. Miscanthus species are capable of crossing with [***] — a characteristic that has long been exploited in [***] where Miscanthus germplasm is used to [***]. The use of Miscanthus for biomass is a relatively new area, thus initial collection and evaluation of germplasm may discover lines already suited to the commercial market, and will certainly provide the base for the breeding needed to develop [***] into dedicated bioenergy crops. This breeding programme will employ traditional methodology to [***] and [***] for traits of interest. Molecular markers will be developed to assist identification of traits and expedite development of elite lines. Major traits of interest include increased biomass production, altered composition for improved conversion to fuel, [***] tolerance and seed suitable to produce [***] ([***]) [***]. + +As lines with commercial potential are identified they will be selected for direct field trialing at IGER and/or at CERES locations in [***] to speed up commercial variety development. + +CERES-IGER SCHEDULE 1 + +Page 3 of 10 + +Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission + + I.D.i. Objective 1: Provide plants for [***] based [***]. + + Methods: [***] plants using clean systems for shipment to [***] in accordance with international regulations. + + I.D.ii. Objective 2: Investigate [***] in [***] of lines potentially useful in breeding, including hybrids. + + Methods: Evaluate the [***] capacity of breeding line candidates in response to standard or improved [***] techniques. + + I.D.iii. Objective 3: Develop estimates of time and cost required to [***] plants in [***] based systems. + + Methods: Conduct a desk study to compare the costs/benefits and barriers associated with large scale [***] methodology including [***]. + +I.E. Goal: Proof of Concept field trials of research findings in target locations. + + I.E.i. Objective 1: Evaluate and optimize propagation techniques under commercially relevant conditions. + + Methods: Use IGER and CERES infrastructure for field trialing methods in the UK and at multiple locations in [***] and elsewhere. These should expand on research performed at IGER and test genotype by environment interactions, with a focus on potentially commercial genotypes. + + I.E.ii. Objective 2: Evaluate and optimize germplasm performance in the UK and in multiple [***]. + + Methods: Use IGER and CERES infrastructure for field trialing at multiple locations in the UK, [***] and elsewhere. These should expand on research performed at IGER and test genotype by environment interactions with a focus on potentially commercial genotypes. + +II.A. Rationale: + +II. B. Goal: A complete and documented Miscanthus [***]. + + + + + + + +CERES-IGER SCHEDULE 1 + +Page 4 of 10 + +Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission + + II.B.i. Objective 1: [***] to [***] in [***]. + + Methods: In accordance with international conventions, e.g., the Convention on Biodiversity (CBD), [***] Miscanthus [***] from the [***] of [***]. Document the phenotype and growing [***], using [***] to accurately record the [***]. [***] to [***] for [***] and subsequent phenotype documentation. + + II B.ii. Objective 2: Characterize full [***]. + + Methods: Document the morphological, physiological and [***] of interest in the [***] using consistent phenotyping nomenclature and [***] compositional analysis. Develop molecular markers associated with phenotypic traits. + + II.B.iii. Objective 3: Assess relatedness of plants identified as useful parents for hybrids. + + Methods: Use molecular markers developed for traits of interest in combination with germplasm characterization data, particularly [***], to select parents with desired traits that are also likely to present [***]. + + II.B.iv. Objective 4: Develop a dynamic warehouse to store data and develop systems to analyse data and support multidisciplinary collaborative research. + + Methods: IGER and CERES to consider best options for developing the database. Populate the database with the [***] and [***] information [***]. As germplasm is characterized, integrate phenotype and marker data and use to facilitate choice of promising [***] lines as well as inform the preparation needed to ensure [***] (e.g. [***]). As data become available from other components of the collaborative research, such as field trialing and conversion analysis, it will be added to the database to allow PIs to synergistically design next step experiments. + +II.C. Goal: Improved Miscanthus hybrids for commercial use. + + II.C.i. Objective: Select improved parents. + + Methods: [***] within [***] using information from molecular markers and composition analysis to shorten and streamline the selection of parents. Cross between [***] and evaluate hybrids to identify improved parents. + + II.C.ii. Objective: Make crosses of selected [***] lines. + + Methods: Appropriate germplasm will be selected for crossing using the database decision tool. Plants will be [***] to [***] in glasshouses and [***] made both in the glasshouse and outdoors at IGER, depending on time of year. Improve efficiency of [***] and, for [***], [***]. Determine [***] — and [***]. Send seed of [***] candidates and [***] to CERES locations for trialing. + + II.C. iii Objective: Selection of superior [***]. + + Methods: [***] will be transplanted to field. Important morpho-physiological traits will be recorded over [***] years after which the best genotypes will be selected, [***] and [***] into rhizomes. The value of early prediction of traits will be assessed. A mass selection reservoir (MSR) will be maintained as a safety net and to contain interesting genotypes that do not justify commercial development. + + + + + + + +CERES-IGER SCHEDULE 1 + +Page 5 of 10 + +Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission + + II.C.iv. Objective: Field evaluation of hybrids. + + Methods: From rhizomes taken in iii, replicated trials will be established. After [***] (or [***]) years, the best genotypes will be provided to CERES to test at diverse locations for commercially relevant evaluation. + + II D. Goal: Improved Miscanthus Varieties. + + II.D.i. Objective: Explore new methods of breeding. + + Methods: Set up and test [***] in terms of [***] and [***]. Set up and test [***] in terms of [***] and [***] to determine whether [***] will be acceptable. The results will guide applications for the setting up of Plant Breeders' Rights schemes. + +3. RESEARCH AND DEVELOPMENT PLAN + + The RESEARCH AND DEVELOPMENT PLAN (Attachment A to this SCHEDULE) contains: + + • Research and evaluation activities to be performed by each Party in detail, including locations for such activities + + • Timelines of such activities + + • Goals, expected results and deliverables + + • Milestones and go/no-go decision points, if applicable + + • FTEs + +4. LOCATION OF WORK: + + IGER Work: + + IGER laboratory and glasshouse facilities and properties at its Welsh location and potential subcontractor locations. + + CERES Work: + + Thousand Oaks, CA and potential subcontractor locations. + +5. PHD LEVEL SCIENTIFIC STAFF: + + Dr. John Clifton-Brown (IGER) Dr. Iain Donnison (IGER) + + Dr. Richard Flavell (CERES) Dr. Bonnie Hames (CERES) Dr. Emily Heaton (CERES) Dr. Peter Mascia (CERES) Dr. Steve Thomas (CERES) + + The Parties agree to complete this list within three (3) months from the commencement date of this SCHEDULE. + + + + + + + +CERES-IGER SCHEDULE 1 + +Page 6 of 10 + +Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission + +6. FUNDING APPROVED: + + See attached Budget (Attachment B). + +7. REPORTS: + + All reports shall be delivered to the MANAGEMENT COMMITTEE on or before the required delivery dates for the same. + + IGER and CERES will deliver at each quarterly MANAGEMENT COMMITTEE meeting (or annual meeting, as the case may be): + + • Quarterly status update and FTE breakout based on attached planning document. + + • Actual spending relative to budget. + + • INTELLECTUAL PROPERTY generated during the period. + + • Copies of slide presentations summarizing research progress (template attached as Attachment C to this SCHEDULE). + + • Annual Report (compilation of slide presentations and quarterly minutes) (annual meeting). + + Additional information, if not specifically included in the delivered information (above), shall be delivered (or later provided, wherein the delivering Party shall indicate the delivery method and time) as supporting information at the related quarterly meeting, if available: + + • Breeding records. + + • Copies of field or glasshouse books and records. + + • Copies of raw field trial data. + + • Biological material, including [***] lines from crosses and/or [***]. + +8. REPORT DATES: + + Annual report: Due at annual meeting in January. + + Quarterly reports and information: Due at quarterly meetings of the MANAGEMENT COMMITTEE per the CA (e.g., April, July, October, January). + +9. SUBCONTRACTORS AND LOCATIONS: + + Actual locations and work at the locations will be decided by the MANAGEMENT COMMITTEE at the quarterly meetings. + +10. MAJOR CONSUMABLES TO BE PURCHASED: + + None designated at the commencement date of this SCHEDULE. + +11. ASSETS: + + + + + + + +CERES-IGER SCHEDULE 1 + +Page 7 of 10 + +Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission + + Not applicable. + +12. INSURANCE: + + Not applicable. + +13. INTELLECTUAL PROPERTY RIGHTS: + +13.1 IGER Background Intellectual Property: + + See Attachment D. The Parties agree that Attachment D will be worked out in more detail and completed within thirty (30) days of the commencement date of this SCHEDULE. + + 13.2. CERES Background Intellectual Property: + + • Molecular markers + + • Genome sequence information + + • [***] + + • [***] information + + • Proprietary software + +14. USE AND COMMERCIALIZATION RIGHTS: + + Controlled by CA. License agreements for non-transgenic varieties developed pursuant to this SCHEDULE 1 will be based on the Model License Agreement for Non-transgenic Varieties in EXHIBIT G to the CA. + +15. CONFIDENTIALITY/PUBLICATION: + + Controlled by CA. + +16. COMMENCEMENT/TERM: + + Commencement: April 1, 2007 + + Term: Three (3) years provided however, at least one (1) year before the end of the term of this SCHEDULE, the Parties shall decide whether to extend it for one (1) or more years, with appropriate updates to the RESEARCH AND DEVELOPMENT PLAN (Attachment A), and FUNDING (Article 6 of this SCHEDULE). + +17. PROVISIONS FOR EARLY TERMINATION: + + This SCHEDULE does not terminate automatically upon termination of the CA. + + + + + + + +CERES-IGER SCHEDULE 1 + +Page 8 of 10 + +Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission + + This SCHEDULE shall expire pursuant to the terms set forth in this SCHEDULE, unless extended by the mutual agreement of the Parties, or unless sooner terminated in accordance with the following provisions of this Article: + + (a) mutual, written agreement of the Parties; + + (b) failure of one Party to satisfy its material obligations under this SCHEDULE, and such Party subsequently fails to cure such failure(s) within (i) thirty (30) days for failures to remit payment for amounts due under this SCHEDULE and (ii) ninety (90) days for all other obligations in each case after receipt of written notice from the non-breaching Party specifying such failure(s); + + (c) one (1) year's written notice of termination by either CERES or IGER to the other Party in case either the terminating Party or the other Party ceases substantially all activities in the COLLABORATION CROPS; + + (d) IGER will have the right to terminate this SCHEDULE unilaterally with thirty (30) days' written notice to CERES, (i) if CERES seeks protection under any bankruptcy, insolvency, receivership, trust, deed, creditors arrangement or comparable proceeding or if any such proceeding is instituted against CERES (and not dismissed within one hundred twenty (120) days); (ii) in case of dissolution or winding up of CERES (excluding any situation where all or substantially all of CERES' assets, stock or business to which the CA relates are acquired by a third party (whether by sale, acquisition, merger, operation of law or otherwise)); (iii) with written notice to CERES, if CERES has failed in a substantial manner, three (3) years after either Party or the Parties jointly have developed a [***] method for Miscanthus that results in the crop being commercially competitive in the United States or in Europe as compared to other energy crops being grown at that time in the relevant geography, to implement the activities set forth in EXHIBIT F to the CA, and does not remedy such failure or offer a remediation plan which is reasonably acceptable to IGER within ninety (90) days after receipt of a written notice from IGER specifying such failure; + + (e) CERES will have the right to terminate this SCHEDULE unilaterally: (i) with thirty (30) days' written notice to IGER if John Clifton-Brown or Iain Donnison cease(s) to be associated with IGER and the research activities associated with this SCHEDULE, and IGER has not replaced such person(s) within one hundred twenty (120) days by (a) person(s) reasonably acceptable to CERES; (ii) with ninety (90) days' written notice to IGER, if the institutional mission, purpose, structure or funding of IGER would change substantially and adversely affect IGER's ability to satisfy its obligations hereunder; (iii) with one (1) years' written notice to IGER, if CERES has a documented compelling business reason to cease the collaboration, (for example, without limitation, lack of sufficient processing capacity for COLLABORATION CROPS within the expected timeframe in the United States; COLLABORATION CROPS are non-competitive with other biomass sources); (iv) with three (3) months' prior written notice to IGER, such notice to be given no earlier than eighteen (18) months after the Effective Date of the CA, if no rights to commercialize (including determination of the compensation due upon commercialization) COLLABORATION CROPS germplasm provided by IGER which is included in the RESEARCH PROJECT covered by this SCHEDULE have been + + + + + + + +CERES-IGER SCHEDULE 1 + +Page 9 of 10 + +Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission + + secured to CERES' reasonable satisfaction in compliance with the CBD; or (v) with thirty (30) days' written notice to IGER if Defra has not assigned to IGER, or granted to IGER an exclusive license reasonably satisfactory to CERES on, the Intellectual Property vested in Defra or the Crown or the Secretary of State pursuant to the DEFRA agreement NF 0426 within sixty (60) days from the Effective Date (the "Assignment/License"), provided however that such termination may be for the entirety of this SCHEDULE or only for certain parts of the RESEARCH PROJECT covered by this SCHEDULE. + +18. SPECIAL CONDITIONS: + + 18.1 VARIETY RELEASE + + 18.1.1 "RELEASE DATE" shall mean the date that CERES determines that a variety developed, tested and evaluated pursuant to the terms of this SCHEDULE is ready for release, wherein upon such decision, such variety will be formally released by IGER and CERES jointly (if the variety constitutes JOINT INTELLECTUAL PROPERTY) or by IGER (if the variety constitutes IGER INTELLECTUAL PROPERTY) or by CERES (if the variety constitutes CERES INTELLECTUAL PROPERTY). + + 18.1.2 For the purposes of this SCHEDULE, CERES, on advice of the breeder(s) of each variety via the MANAGEMENT COMMITTEE, shall establish, in its sole discretion, an appropriate RELEASE DATE for such varieties. + + 18.1.3 At or about the RELEASE DATE for a variety, CERES will determine a COMMERCIAL NAME for such variety under which the seed of the same will be marketed and sold. "COMMERCIAL NAME" means the complete, preferred name of a released variety under which it will be marketed and sold. + + 18.1.4 The Parties agree that the development of new varieties will not always result in varieties that are commercially acceptable or releasable. Provided all Parties execute their respective obligations under this SCHEDULE in an appropriate and reasonable manner, no one Party shall be liable to the other for any refund or other recompense because no commercially acceptable new variety is produced. + + 18.2 BBSRC project: Optimizing the development of the energy grass Miscanthus through manipulation of the flowering time. + + Reference to this project ("BBSRC grant") is included in EXHIBIT E to the CA. + + The RESEARCH AND DEVELOPMENT PLAN in Attachment A hereto refers to certain activities to be conducted by IGER pursuant to the BBSRC grant. The Parties expressly acknowledge and agree that: + + + + + + + +IN WITNESS THEREOF this SCHEDULE has been executed on the date hereinbefore entered. + +CERES-IGER SCHEDULE 1 + +Page 10 of 10 + + (i) the results of such activities shall constitute IGER INTELLECTUAL PROPERTY, and + + (ii) IGER may make certain data resulting from such activities publicly available in compliance with the BBSRC grant. + + INSTITUTE OF GRASSLAND AND ENVIRONMENTAL RESEARCH CERES, INC. By: /s/ M. Humphreys By: /s/ Richard Flavell + +Name: Professor Mervyn Humphreys Name: Richard Flavell, CBE, FRS Title: Director Title: Chief Scientific Officer By: /s/ Richard Hamilton + + Name: Richard Hamilton Title: President and Chief Executive Officer + + + + + + + + Attachment A - RESEARCH AND DEVELOPMENT PLAN Breeding Project Plan A B C D E F G H I J K L M N O P Q R S T U V W X Y Z AA AB AC AD AE AF AG Ah 1 IGER Task Objective Comments year 1 year 2 year 3 2 Ceres FTE Ceres [***] IGER [***] FTE Ceres [***] IGER [***] FTE Ceres [***] 3 CIGER 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 4 1 [***] 5 IGER [***] 6 + + + +A + + + +IGER + + + +[***] + + + +To capture important [***] to improve productivity and [***] (re [***] for climate change). Particular [***] are geographical including [***] where [***]. [***] can demonstrate Google map showing [***] + +The earliest this could be done in Oct/Nov 20 [***]. It may be possible to continue to work with our [***] of 20 [***]. Target countries are [***] (incl [***], [***] and [***]. EH would also like to know about ethnobiology. + +This needs to be included in the budget at £30- 40K. + + 7 + + + +B + + + +IGER + + + +[***] + + + +Ensure these can be used without importation of disease outside [***] + + + +[***] will be inspected in Sept [***] by DEFRA. I have contacted DEFRA about [***] import and await a reply. [***] could be [***] in [***] to 1) fulfil [***] requirements 2) make a modest level of multiplication so that [***] can be compared on different sides of the [***]. 8 + + + +IGER + + + +Sample leaf material + +Detailed genetic analysis + + from 1 rep, extract DNA, using markers send to Ceres 9 Ceres SNPmarker analysis Evaluate material for + + markers, send results to IGER [***] [***] [***] 10 + + + +C + + + +IGER + + + +[***] and send subset of about [***] to [***] for further evaluation. Decide which lines Nov 20[***]. Also see [***] sheet. + + + +Characterise morphological and physiological [***] relevant [***] in [***] + + + +This obviously would link to the Trials worksheet. It is practical to start identifying key material in 20[***] - which perhaps should be put [***]. 11 Ceres Evaluate [***] in [***]. 12 + + + +IGER + + + +Identify G X E + + + +Analyse if G has a [***] + +Completion may be beyond + + interactions and effect in [***] [***] year workplan + + identify climatic zones 13 IGER Develop supporting I guess we mean the + + + +techniques for phenotype + +protocols, which I suggest + + + +trials + + + +we base on EMI. These can be + + + +drawn up with statistical + + advice ro test 30 genotypes + + + +well in advance of the [***] + + multiplication stage 14 C IGER [***] 15 IGER Dig samples of [***] key Test [***] to [***] + + Miscanthus genotypes + + from EMI plots, [***] and transfer to + + + + + +Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission + + [***] 16 Ceres [***] in [***] Test [***] and [***] in [***] 17 + + + +D + + + +CIGER JCB + + + +WvA and + + + +Obtain Commecialization Rights + + + +Freedom to commercialize [***] developed in program 18 2 Characterise A) existing and B) new [***] at + + IGER C) selected [***] in [***] 19 + + + +A + + + +IGER + + + +Assess phenotype trial (planted at IGER in April [***]) for morphological and physiological [***] relevant [***]. Include [***], [***] status etc in [***]. + + + +Record important morphometric characters including winter [***], spring [***], [***] to [***] spring [***] and summer [***] (incl [***]), [***]/ [***], [***] and intensity, [***] and [***], [***], [***], [***] and [***], visual assessment of [***] + +Scoring systems need to be transferable. Bar code reading needs to be investigated. + + + +This is the [***] year following [***] so the mature phenotype is ready for the 20 [***] season. It should be repeated in 20[***] to check the impact of [***] in [***] + + + + CERES-IGER SCHEDULE 1 April 1, 2007 + + + + + + + + Attachment A - RESEARCH AND DEVELOPMENT PLAN Breeding Project Plan A B C D E F G H I J K L M N O P Q R S T U V W X Y Z AA AB AC AD AE AF AG Ah AI AJ Ak Al AM AN AO 20 IGER Sample leaf material from 1 rep, extract DNA, send to Ceres + + Detailed genetic analysis using markers + + NB One sacc was received as four plants and may not be a clone + + [***] [***] [***] + +21 Ceres SNPmarker analysis Evaluate material for markers, send results to IGER + + + +22 B IGER New phenotype trial to be [***] 20 [***] based on [***].NB [***] material will consist of [***] plants per [***] derived from [***]. + + Characterise morphological and physiological [***] relevant [***] + + We plan to follow the design of Phenotype Trial [***] above with the [***] at IGER. If [***] through [***] works (we have started this), we may get this trial started in June [***]. However, it is also likely planting will be delayed until May [***]. We could then include the [***] which should have cleared [***]. + + + +23 3 [***] for [***] + +24 CIGER Set [***] protocols for [***] analysis + + Method harmonization for future [***] analysis + + + +25 IGER Sample whole plant material harvested at [***], analyze using [***], send [***] to Ceres + + More detailed [***] characterisation will reveal important [***] + + Samples to be taken for 20 [***] spring harvest from [***] and [***] (this is earlier than ideal - and should be repeated in 20 [***]) + + SuperGen funds work on [***] phenotype trial for [***], [***] and [***]. CERES will provide added value to this (eg [***], [***], [***], [***], [***]) + + + +26 Ceres Obtain [***] and/or [***] Enable review of IGER [***] + +27 Ceres Review [***] phenotype trial [***] and choose samples to analyze for [***] set + + Choose subset of samples to analyze with [***] from [***] x [***] reps = ~ [***] + + IGER will review as well as part of Supergen project. SuperGen will concentrate on combustion and gasification. + + + +28 IGER Send selected samples to Ceres for [***] analysis + + Develop [***] sets at Ceres and IGER to harmonise [***] analysis + + + +29 CIGER [***] analysis of samples for [***] of [***] models + + Develop models of biomass [***] to harmonise Ceres/IGER [***] analysis + + + +30 CIGER [***] analytical methods + + Protocol development and harmonisation so that [***] data sent to Ceres can be translated to [***] data as collected by Ceres. + + IGER can perform some [***] based assays for which [***] already exist ([***], [***], and [***] for calculation of [***] and [***]) or those being developed ([***] and [***]) however Ceres may wish to perform additional analyses and there will be a need to standardise protocols and equipment between sites at Aberystwyth and Thousand Oaks + + [***] [***] [***] + +31 Ceres send [***] results from [***] set to IGER + + includes [***] results of the [***] set, the validation data for the [***] and the [***] of the [***] samples in 05 phenotype trial (total [***] x [***]) + + Joint publication? + +32 sample whole plant material, analyze using [***], send [***] to Ceres + + More detailed [***] characterisation will reveal important [***] + + + +33 Ceres Use developed model to determine [***] from [***]. Send results to IGER + + Provide timely detailed information on [***] of phenotype trial [***] + + May need additional samples to ensure accuracy/expand [***] set + + + +34 CIGER Develop database and analytical tools to assist in making [***] + + To assist [***] and recording of [***] data + + We are currently developing the tools to integrate different types of datasets and to query them. + + CERES and IGER to share inforamtion on this using both IT + + + + + + + +Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission + +decisions parties. 35 4 [***] 36 a IGER Plan [***] programme according phenotypic, genotypic and [***] data + + Make useful [***] Use preliminary database as a decision support tool. + +37 IGER Plant maintenance and + + We prototyped large + + set up including containers in 20[***]. These + + staggering of plant lead to plants with more + + development [***] - improving the [***]. + + CERES-IGER SCHEDULE 1 April 1, 2007 + + + + + + + + Attachment A - RESEARCH AND DEVELOPMENT PLAN Breeding Project Plan A B C D E F G H I J K L M N O P Q R S T U V W X Y Z AA AB AC AD AE AF AG AH AI AJ AK AL AM AN AO + +38 IGER Carry out the [***] - a) + +[***] additional [***] for CERES ([***]) Sub-samples of [***] (if available) protected by agreement to be sent to Ceres to inform IGER selection. (Material from + + [***] glasshouses + +CIGER shall not be + + used to create + + CERES material.) + +39 IGER b) [***] (outside) + +40 IGER c) [***] (inside) + +41 IGER Development of [***] a) [***] of [***]. With M. [***] this is easier. With M. [***] we have now modified the [***] on the glass house to follow the [***] - [***]. 42 IGER b) detached [***] 43 IGER c) optimising [***] incl. [***] and [***] 44 IGER d) [***] with [***] + +45 b IGER Carry out and optimise [***] Increase [***] of [***] from [***] Optimise media and [***]. + +46 IGER Make [***] x [***] Make [***] [***] with [***] and [***] (JML to help?) + +47 IGER [***] from [***]. Obtain [***] for selection + + phase. Determine [***]- and + + [***] relationships [***] [***] [***] + +48 5 IGER + +Test alternative [***] A step in [***] + + systems as proof of principle 49 IGER Plan [***] Produce [***] Make [***] in 20[***] using database for [***] etc. Include [***] if possible in 20[***]. + +50 IGER Carry out [***] in The emphasis would be on + + [***] chambers [***] genotypes but we would test several [***] of [***], [***] and [***]. + +51 CIGER Test [***], [***] and see [***] tab for methodology + + [***] characteristics + +52 CIGER [***] and/or [***] from Evaluate [***] in IGER and [***] + + relevant [***] to [***] + +53 CIGER Assess [***] in field Determine if [***] is Field scale phenotypic acceptable assessments for above [***]. + +54 d IGER Create [***] Develop methods for large + + scale [***] with [***] advantages 55 IGER Harvest [***] + +56 CIGER [***] of [***] to [***] Evaluate [***] in IGER and [***] + +57 CIGER + +Assess phenotype in field Record important + + + +morphometric characters as described in 2A i. + +58 CIGER Evaluate [***] relative Determine levels of [***], + + to [***] in field [***] of [***] + +59 6 Selection from [***] To identify superior genotypes + +60 IGER + +Raise plants from [***] in Glasshouse Select best on basis of [***] + +61 IGER Sample, extract DNA, Use marker analysis to aid [***]-[***] samples x + + send to Ceres for marker selection [***]-[***] markers. analysis Throughput of [***] needs to be confirmed. Include [***] trial, [***] x [***] material and [***] of all [***]. See marker section. + +62 Ceres SNP marker analysis evaluate material for + + markers, send results to IGER + +63 IGER Transplant to field + +64 IGER Raise plants from [***]. Select [***]. [***] MORE [***] TO BE [***]. + + + + + +Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission + + Also [***] to [***]. + +65 CIGER Assess phenotype Recaord important + + morphometric characters + + including winter [***], + + spring [***], [***] to [***] + + spring [***] and summer + + [***] (incl [***]), [***]/ + + [***], [***] and intensity, + + [***] and [***], [***], + + [***], [***] and [***], + + visual assessment of [***] [***] [***] [***] + + CERES-IGER SCHEDULE 1 April 1, 2007 + + + + + + + +Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission + + Attachment A - RESEARCH AND DEVELOPMENT PLAN Breeding Project Plan A B C D E F G H I J K L M N O P Q R S T U V W X Y Z AA AB AC AD AE AF AG AH AI AJ AK AL AM AN AO 66 IGER Sample whole plant More detailed [***] + + material, analyze using characterisation will reveal [***], send [***] to important [***] Ceres 67 IGER Select, [***] and [***] (or [***] This depends on the success of the early morphometirc + + best genotypes for replicated trials. selection. If selections Interesting plants not after year [***] are quite making the grade reliable reflection of the will be transferred to a mature phenotype, then we mass selection could start this in 20[***] reservoir to continue - making plots. montoring for [***]. 68 Ceres Use developed model to Provide timely detailed determine [***] from information on [***] [***]. Send results to of [***]. IGER 69 7 [***] Trials NEED TO DETERMINE WHAT IS + + DONE OUTSIDE [***] PROGRAM Small plot yield assessments in replicated ([***] or [***]) single or multiple rows ([***]) of [***] or [***] plants Promising lines to be [***]. per row, depending on To test [***] on an area Connects to [***] and 70 IGER [***] on [***]. basis and scale up Trialling project schedules 71 IGER After [***] years, the I suspect we will need help best genotypes will be from [***] to multiply provided to [***] and promising plants for + + UK for testing at [***] agronomic trials since [***] locations as part of is [***] only about [***] [***] relevant [***] after [***] growing evaluation. seasons. [***] [***] [***] 72 IGER Evaluate green cut of Miscanthus in terms of [***], [***] and [***] 73 IGER To investigate [***] Several suitable [***] were not tested in 20[***] application. 74 IGER To investigate methods This is practical issue and of preventing [***] at may be sorted by [***] or field borders (applies more likely by [***] to M. [***]) 75 8 Project Management Telemeetings would be fine every quarter - with an 76 Telemeetings annual visit. 77 Face to face meetings + +78 Reporting based on these project plans [***] [***] [***] + + CERES-IGER SCHEDULE 1 April 1, 2007 + + + + + + + +Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission + + Attachment A - RESEARCH AND DEVELOPMENT PLAN Marker Project Plan IGER CERES year 1 year 2 year 3 CIGER FTE Ceres [***] IGER [***] FTE FTE Ceres [***] IGER [***] FTE Ceres [***] IGER [***] 1 Marker Development ( Year 1-) Objectives Notes 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 A + + + +Identify target [***] for mapping including [***], [***], [***], [***], [***], [***], [***], [***] + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + B + + + +Compare and share candidate gene sequences. Use [***] and proprietary gene databases to predict Miscanthus variants of genes of interest. + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + C + + + +Agree on joint list and determine long-term strategy including complementation of BBSRC funded work + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + D + + + +Grow plants of [***] and mapping [***]. Take samples from [***]. DNA extractions to be made at IGER using Autogen and sent to Ceres + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + a) [***] Planted April [***]; grow out in field [***] + + [***] + + [***] + + + + [***] planted April [***]; sample, extract, send DNA to Ceres + + + + + +b) ~[***] in November [***], timing dependent on [***]; grow plants in field + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + +~[***] in November [***], timing dependent on [***]; sample, extract, send DNA to Ceres + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + c) [***] mapping [***] individuals, for [***]; grow plants in field + + + + + +[***] mapping [***] individuals; sample, extract, send DNA to Ceres + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + d) [***] ([***]), for [***], [***], + +[***] and [***]; grow plants in field + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + [***] ([***]; [***] + [***] plants); + +sample, extract, send DNA to Ceres + + e) [***] ([***]), for [***], [***]; + +grow plants in field + + [***] ([***]; [***]); sample, extract, send DNA to Ceres + + E + + + +DNA to be used at IGER for AFLP analysis (a and b above) + + + +determine [***] diversity and [***] structure + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + CERES-IGER SCHEDULE 1 April 1, 2007 + + + + + + + +Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission + + Attachment A - RESEARCH AND DEVELOPMENT PLAN Marker Project Plan IGER CERES year 1 year 2 year 3 CIGER FTE Ceres [***] IGER [***] FTE FTE Ceres [***] IGER [***] FTE Ceres [***] IGER [***] F + + + +Define primers [[***] to be tested] for "[***]" carefully selected and agreed genes such that PCR [***] can be sequenced and results unequivocally interpreted. + +Develop markers for consensus genes + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + G + + + +Evaluate polymorphisms in selected [***]. Assay ~[***] DNA samples from [***] in a) c) d) and e) supplied by IGER to search for SNP polymorphisms in [***] genes using primers, PCR and Sequencing. Define additional [***] (?)primers for genes that show insufficient polymorphisms in key materials + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + +Evaluate polymorphisms in selected [***]. Assay ~[***] DNA samples from [***] in [***] supplied by IGER to search for SNP polymorphisms in [***] genes using primers, PCR and Sequencing. + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + H Compare and share strategies for association mapping + + I + + + +Conduct association mapping with field phenotype data for a) Conduct association mapping with [***] and field phenotype data for b) + + + + + + + + + +[***] + + + + + + + +[***] + + + + + + + + + + + +[***] + + + + + + + + + + + + + + J + + + +DNA to be used at IGER for SSR analysis using primers from [***], [***] and [***] (BBSRC [***] grant) ([***] and [***] from [***] and [***]) + +integration of [***] maps + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + K + + + +Construct private and public [***] maps and associate marker polymorphisms with [***] in [***] and mapping [***]. [***] + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + L + + + +Review results, write-up in confidential reports and non- confidential papers and devise strategies for implentation + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + 2 Marker validation and implementation (Year 2-) + + A + + + +Phenotype mapping [***] for the target [***] selected in 1A (start in year [***] to enable early morphometric analyses) and grown in 1D + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + B + + + +Map [***] and relate to markers particularly those derived from candidate genes + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + CERES-IGER SCHEDULE 1 April 1, 2007 + + + + + + + +Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission + + Attachment A - RESEARCH AND DEVELOPMENT PLAN Marker Project Plan IGER CERES year 1 year 2 year 3 CIGER FTE Ceres [***] IGER [***] FTE FTE Ceres [***] IGER [***] FTE Ceres [***] IGER [***] 3 Develop new mapping [***] of > [***] plants + + A Agree on [***] for new mapping [***] + + B Assess results of [***] for target [***] + + C Grow and phenotype new mapping [***] for agreed [***] + + D make maps from new [***] from mapping [***] d) and e) + + 4 Use markers 'routinely' in the [***] programme + + A + + + +Assess relatedness of plants as useful [***] in [***] program based on correlations with [***], conclusions from Items 1-3 and [***] data and [***] in field + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + B IGER to extract DNA from [***] of [***] for marker analysis [***] + + [***] + + [***] + + + + C + + + +Assay all [***] from all [***] for a subset of markers ( [***]) based on results from Items1-3, [***] required and [***] of plants in field. Aim is to discover if we can [***] many of the [***] early on from marker work. + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + D + + + +Compare performance of using markers on [***] of [***] from the [***] programme with [***] where no markers are used + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + 5 + + + +Functional analysis of target genes which map to [***] (from association or QTL mapping) + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + A Q -PCR using a range of [***] from selected genotypes + + B [***] of Miscanthus with selected target genes which map to [***] + + 6 + + + +Development of BAC libraries (BBSRC) + + + +Identification of [***] gene sequences and generation of a physical map + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + CERES-IGER SCHEDULE 1 April 1, 2007 + + + + + + + + Attachment A - RESEARCH AND DEVELOPMENT PLAN Propagation Project Plan IGER Consultant year 1 year 2 year 3 Ceres CIGER FTE Ceres [***] IGER [***] FTE Ceres [***] IGER [***] FTE Ceres [***] Task Objective Comment 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 1 [***] A Assess [***] for [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] + + + +Quantify [***] number and size by [***] individual [***] from + + + +Assessing [***] and [***] in [***] + + + +Investigate [***] conditions to dicipher G x E impacts on [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] + + + +a) in the 20[***] [***] Trial at IGER + +Existing range of [***] in [***], [***] + +Mature 20 [***] + + [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] + + + +b) 20[***] [***] as [***] + +new range of [***] in [***], [***] + + + + [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] + + + +c) from 20[***] [***] in field / glasshouse at IGER + +new range + + + + + + [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] + + + +d) on [***] ([***] and [***] from [***] to [***]) + +[***] + + + + + + [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] + + + +[***] to [***] number of [***] plants + + + +Increase the identified promising genotypes for [***] + + + + [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] B + + + +A series of field relevant experiments to guide Best Management Practices + +Demonstrate potential of [***] and create protocols. Find [***] associated with [***] + + + + [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] + + [***] from all [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] + + + +Typically [***] from each [***] which are [***] in trays for raising [***] for field selection will be monitored. We intend to datalog [***] (order for equipment in progress) + +To screen all [***] for [***] and rate of [***] under monitored [***] + + + +Year 1 data will be less detailed than in later years. + + [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] + + + +Greenhouse /CE experiments to investigate [***] best practice + +to determine [***] in [***] under controlled [***] and optimise [***] + +depends on a PhD student + + [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] + + + +Test [***] on [***] of selected genotypes + + + +Characteristaion of [***] conditions to stimulate [***] in different genotypes. This provides information about [***] where [***] could be considereds (based on [***]). + + + +One can test [***] over [***] days of [***] genotypes (each in one lane) at [***] different [***] ([***] has [***] wells). [***] per [***] therefore we can only do this with genotypes that produce > [***]. [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] + + + +Field bed preparation ([***]) at [***] (use [***] as a control) + +scale up to real conditions including effect of [***] & [***] + + + + + + [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] + + + +Record [***] & [***] + + + +relate laboratory tests to field conditions + + + + [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] + + + +Monitoring [***] + winter [***] + +ensure proper quantification of conditions + + + + [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] + + CERES-IGER SCHEDULE 1 April 1, 2007 + + + + + +Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission + + + + + + + + Attachment A - RESEARCH AND DEVELOPMENT PLAN Propagation Project Plan IGER Consultant year 1 year 2 year 3 Ceres CIGER FTE Ceres [***] IGER [***] FTE Ceres [***] IGER [***] FTE Ceres [***] + + + +Development of [***] techniques + + + +Precision [***] considerations. Optimising [***] and [***] at field scale. + + + + [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] 2 [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] + + + +Establish [***] capacity of certain genotypes and protocols + +Identify [***] amenable lines. + + + + + + [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] + + + +Send lines to external contractor for [***]. + +[***] promising [***] lines + + + + [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] + + + +Send [***] to Ceres + + + +Provide [***] successfully produced in [***] program for additional + +dependent on [***] success + + [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] 3 + + + +[***] + + + +Demonstrate potential of [***] and create protocols. Explore timing of basic research to inform applied work. + + + + [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] A Applied [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] + + + +visit global [***] experts + + + +benefit from expertise and tie into the project ([***]) + +done during [***] trip to [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] + + + +[***] global experts visit IGER + +benefit from expertise ([***]) + + + + [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] + + + +Expert Consultancy ([***]) + + + +provide guidance for [***] projects, possibly advise student + + + + [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] + + + +gather information to develop field and glasshouse protocols + + + + + + + + [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] + + + +assess [***] in Miscanthus [***] characteristics of [***] and [***] + + + +optimise [***], inform [***] + + + +20[***] assessment will be include [***]. 20 [***]+ [***] will be [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] + + + +treatments to [***], e.g. [***] + +optimise [***] + + + + + + [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] + + + +Glasshouse tests of [***] growth conditions + +to predict conditions in which [***] can be used + + + + [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] + + + +Field tests of [***] + + + +survivorship of [***] plants and G by E interactions + + + + [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] + + + +Iterative field testing of [***] techniques + +Evaluate field suitability of [***] techniques + + + + [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] B Basic [***] Research [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] + + + +Assess [***] leading to [***] growth + + + +develop articicial [***] of [***] growth and [***] + + + + [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] + + + +Assess [***] cues leading to [***] growth. + + + +develop articicial [***] of [***] growth and [***] + + + + [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] 4 [***]/[***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] A [***] Lines, [***] lines [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] + + + +Desk study of state of art in industry + + + + + + + + [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] Discuss with PM what could + + + + + + + +Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission + + + +be done quickly to demonstrate feasibility [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] + + CERES-IGER SCHEDULE 1 April 1, 2007 + + + + + + + +Attachment B - Budget + +* See page 2 + +Page 1 + +Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission + + 2007/8 2008/9 2009/10 No of Months 12.00 12.00 12.00 SALARY [***] [***] [***] NI [***]% [***] [***] [***] super [***]% [***] [***] [***] PAY COSTS [***] [***] [***] OTHER RECURRENT CONSUMABLES [***] [***] [***] CONSUMABLES MOLECULAR BIO [***] [***] [***] CASUAL & OVERTIME [***] [***] [***] TRAVEL & SUBSISTENCE [***] [***] [***] STUDENTSHIP (PhD) [***] [***] [***] SUB- TOTAL [***] [***] [***] OTHER COSTS ESTATES COST [***] [***] [***] RECRUITMENT [***] [***] [***] ANALYTICAL CHEMISTRY [***] [***] [***] CONTROLLED ENVIRONMENT [***] [***] [***] BIOINFORMATICS [***] [***] [***] ULTRASTRUCTURE & IMMUNOLOGY [***] [***] [***] MASS SPECTOMETRY [***] [***] [***] SEQUENCING [***] [***] [***] EXTENSION TECHNOLOGIES [***] [***] [***] TRANSFORMATION TECHNOLOGIES [***] [***] [***] SEED STORE [***] [***] [***] ROAD VEHICLES [***] [***] [***] AGRI VEHICLES [***] [***] [***] FARM [***] [***] [***] GLASSHOUSE [***] [***] [***] SUB CONT [***] [***] [***] TOTAL OTHER COSTS [***] [***] [***] OVERHEAD COSTS* ESTABLISHMENT SERVICES [***] [***] [***] ADMIN SERVICES [***] [***] [***] INSTITUTE & SITE MANAGEMENT [***] [***] [***] FEC NOTIONAL INSURANCE [***] [***] [***] CAPITAL CHARGE [***] [***] [***] DEPARTMENT [***] [***] [***] TOTAL OVERHEAD COSTS [***] [***] [***] TOTAL [***] [***] [***] CERES payment for reasonable perf [***] [***] [***] CERES payment for full completion [***] [***] [***] TOTAL paid by CERES [***] [***] [***] SURPLUS OVER TOC [***] [***] [***] + + + + CERES-IGER SCHEDULE 1 April 1, 2007 + + + + + + + +Attachment B — Budget + +This Budget is agreed upon for contract years 1 through 3. A contract year ("Year") is April 1 — March 31, starting April 1, 2007. CERES agrees to provide funding for IGER's RESEARCH PROJECT activities covered by this SCHEDULE in accordance with Article 1.8 of the CA as set forth in the Budget in page 1 of this Attachment B, taking into account what is provided hereinafter. Pay Costs, Other Recurrent and Other Costs are as in the Budget. Overhead Costs will be payable as follows: + +Page 2 + +Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission + + - Each contract year CERES will pay [***]% of the overheads asked, (e.g. of the [***] pounds in Year 1), for the expected reasonable performance in the various aspects of the program Year by Year and especially for all the items listed in the attached document. This [***]% amounts to [***] pounds in contract Year 1. + + - Furthermore, CERES will pay for Year 1 an additional [***]% of the asked overhead ( i.e.[***]% in total of the asked overhead) for full completion of the Year 1 items A and B listed hereinafter. This additional [***]% equals [***] pounds. + + - For Year 2 CERES will pay an additional [***]% of the overhead costs asked for full and successful completion of Year 2 items A and C hereinafter. + + - For Year 3 CERES will pay an additional [***]% of the overhead costs asked for full and successful completion of Year 3 items A, B, C and D listed hereinafter. + + - The MANAGEMENT COMMITTEE will bring forth recommendations to the Parties at the beginning of each Year for the items that IGER should satisfy to obtain extra overheads, outlined in the framework above. + + - Assessment on achievements of the nominated items will be made at the end of each Year by the MANAGEMENT COMMITTEE and recommendations made to the Parties. Upon agreement, CERES will respond to an invoice from IGER as agreed. Should some items in a section not be achieved then the amount paid will be reduced on a pro-rata basis on the number of items in the section. CERES-IGER SCHEDULE 1 April 1, 2007 + + + + + + + +Attachment B — Budget + +Suggested milestones, for discussion, for full overhead payments + +The Parties agree to finalize this document within thirty (30) days from the commencement date of this SCHEDULE. + +Year 1 (April 1 to March 31): + +A. [***] research to create an economically viable business + +1. [***] and [***] variation affecting [***] amongst available (numbers?) [***] and their behaviour through the season/[***] reported; any clear winners [***] + +2. [***] and [***] variation affecting [***] (numbers?) [***] and early [***] across different [***] and [***] reported; any clear leaders [***] and sent to Ceres + +3. XXX [***] of Miscanthus [***] ([***]?) (good [***]) with Miscanthus [***] made and followed by [***] where necessary. [***] of [***] sent to Ceres by early 20[***]. + +4. First [***] of [***] x [***] made based on results from 20[***] field [***] and [***] + +B. [***] to Ceres to help [***] in [***] as early as possible + +1. [***] of latest [***] of [***] from [***] via [***] (how many?) sent into [***] in 20[***] when requested by Ceres + +2. Selected set of promising [***] including [***] lines and [***] trialled to date sent to Ceres in [***] in 20[***] for trial in [***] + +3. Samples of [***] of Year 1 [***] sent to Ceres, including a sample of [***] (Numbers of [***]?) + +4. Approximately [***] from [***] (how many?) occurring in the field in 20[***] believed to be [***]x x [***]x sent to Ceres + +C. Advancing the [***] assisted [***] program as early as possible + +1. DNA from about [***] plant [***] phenotyped in the field since 20[***] and first [***] delivered to Ceres in 20[***]. + +2. DNA from about new [***] plant [***] in [***] in 20[***], other [***] and other selected [***] delivered to Ceres in 20[***] + +D. Advancing the [***] program + +1. xxx new [***] of [***] x [***] made based on phenotypes and presumed [***] + +2. xxx [***] of M [***] x other made + +Page 3 + +Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission + + CERES-IGER SCHEDULE 1 April 1, 2007 + + + + + + + +Attachment B — Budget + +3. [***] phenotype/[***] assessments of material in [***] since 20[***] reported and correlations made with assessments in years 1 and 2 and with [***] + +E. Advancing [***] research + +1. Samples (how many?) and [***] (how many?) sent to Ceres + +F. Enhancing [***] + +1. Additional [***] made and materials brought into [***] in IGER to fill in specific [***] needed for likely commercialization locations + +Year 2 (April 1 to March 31): + +A. [***] research to create an economically viable business + +1. [***]/[***] variation affecting [***] amongst large range of [***] (numbers?) and their behaviour through the season/[***] reported; any clear winners [***] + +2. [***]/[***] variation affecting [***] (numbers?) [***] and early growth across different [***] and [***] reported; any clear leaders [***] and sent to Ceres + +3. XXX [***] of Miscanthus [***] ([***]) (good [***]) with Miscanthus [***] made and followed by [***] where necessary. [***] of [***] sent to Ceres by early 20[***]. + +4. Next [***] of [***] x [***] made based on results from 20[***] field [***] and [***] + +5. Synthesis of best practice for [***] of miscanthus based on [***] and [***], [***] and other methods to meet market costs and commercialization in different geographies + +B. [***] to Ceres to help [***] in [***] as early as possible + +1. Approximately [***] from [***] occurring in the field in 20[***] believed to be [***]x x [***]x sent to Ceres + +2. Samples of [***] of Year 2 [***] (numbers?) sent to Ceres, including a sample of [***] + +3. Promising selected genotypes from [***]/[***]/[***] program [***] in [***] and sent to Ceres + +C. Advancing the [***] assisted [***] program as early as possible + +1. DNA from relevant [***] from [***] program, [***] etc delivered to Ceres in 20[***] + +2. Preliminary phenotyping of [***] in field and preliminary [***] made with Ceres + +3. [***] and [***] aligned with [***] and [***] and [***] + +Page 4 + +Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission + + CERES-IGER SCHEDULE 1 April 1, 2007 + + + + + + + +Attachment B — Budget + +D. Advancing the [***] program + +1. xxx new [***] of [***] x [***] made based on phenotypes, presumed [***], [***] and other characters + +2. xxx new [***] of M [***] x other made + +3. [***] phenotype/[***] assessments of material in [***] since 20[***] reported and correlations made with assessments in previous years and with [***] + +4. Selection and [***] of genotypes for further trialing for potential commercialization based on geography, [***] and [***] + +5. Report on methods to [***] large scale [***] with commercial advantages + +Year 3 (April 1 to March 31): + +A. [***] research to create an economically viable business + +1. [***]/[***] variation affecting [***] amongst available [***] (how many?) and their behaviour through the season/[***] reported; any clear winners [***] + +2. [***]/[***] variation affecting [***] ( how many?) [***] and early [***] across different [***] and [***] reported; any clear leaders [***] and sent to Ceres. + +3. Synthesis of best practice for [***] of miscanthus based on [***] and [***], [***] and other methods to meet market costs and commercialization in different geographies. + +4. XXX [***] of Miscanthus [***] ([***]) (good [***]) with Miscanthus [***] made and followed by [***] where necessary. [***] of [***] sent to Ceres by early 20[***]. + +5. Next [***] of [***] x [***] made based on results from 20[***] field [***] and [***] + +B. [***] to Ceres to help [***] in [***] as early as possible + +1. Approximately [***] from [***] occurring in the field in 20[***] believed to be [***]x x [***]x sent to Ceres + +2. Samples of [***] of Year 3 [***] (how many?) sent to Ceres, including a sample of [***] + +3. Promising selected genotypes from [***]/[***] program [***] in [***] and sent to Ceres + +C. Advancing the [***] assisted [***] program as early as possible + +1. DNA from relevant [***] from [***] program, [***] etc delivered to Ceres in 20[***] + +2. Advanced phenotyping of [***] in field and [***] made with Ceres + +D. Advancing the [***] program + +Page 5 + +Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission + + CERES-IGER SCHEDULE 1 April 1, 2007 + + + + + + + +Attachment B — Budget + +1. xxx new [***] of [***] x [***] made based on phenotypes and presumed [***], [***] and [***] and [***] samples transferred to Ceres + +2. xxx new [***] of M [***] x other made and [***] samples transferred to Ceres + +4. Initial evaluation of [***] in field; report on [***], and commercial feasibility of [***] + +5. Selection and [***] of promising genotypes from all [***] to date for further trialing for potential commercialization based on geography, [***] and [***] and selections transferred to Ceres + +6. Establishment of multisite trial of promising genotypes + +Page 6 + +Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission + + CERES-IGER SCHEDULE 1 April 1, 2007 + + + + + + + + + +Attachment C CERES-IGER SCHEDULE 1 April 1, 2007 + + + +Quarterly Report Format + +Prepared by Date + +1 + + Confidential Project # and name + + + + + + + + + +Concept and Goals + +2 + +• Concept + +• Goals + + Confidential Project # and name + + + + + + + + + +FTEs and Budget Projected vs. Actual + +Dollars + + + +FTEs + + + +3 + +• People and activities + + Confidential Project # and name + + + + + + + + + +Action Items and Deliverables for the Period + +4 + + Expected Actual Action Item or Deliverable Finish Finish Confidential Project # and name + + + + + + + + + +Key Milestones or Deliverables for the Period + +5 + +• Progress on Key Milestones and Deliverables + +• Are we on, ahead or behind schedule Confidential Project # and name + + + + + + + + + +Technical Highlights + +6 + +• 1 or 2 slides covering technical highlights Confidential Project # and name + + + + + + + + + +Results + +7 + +• Several slides summarizing results (if applicable) Confidential Project # and name + + + + + + + + + +What's Ahead: Key Milestones and Deliverables Next 4 Quarters + +8 + +• Quarter 1 + +• Quarter 2 + +• Quarter 3 + +• Quarter 4 Confidential Project # and name + + + + + + + + + +Research Plan + +9 + +• Goal + + — Impact + + — Tasks + + — Milestones + + — Deliverables + +• Duplicate this slide as needed to cover each goal for the next period Confidential Project # and name + + + + + + + + + +Timeline Summary + + + +10 + +T i m e t o a c h i e v e M i l e s t o n e 1 2 3 4 5 6 7 8 9 1 0 1 1 1 2 M i l e s t o n e 1 M i l e s t o n e 2 M i l e s t o n e 3 E t c + +• Assumptions and risk factors + +• Use additional slide if necessary + +• Use red if behind schedule until completed or otherwise resolved + +• Should be indicated in red as soon as the delay is identified + +• See issue resolution if behind schedule Confidential Project # and name + + + + + + + + + +IP + +11 + +• Filings during the period + +• Applications in progress + + Confidential Project # and name + + + + + + + + + +SOPs + +12 + +• List SOPS for all Key processes Confidential Project # and name + + + + + + + + + +Issue Resolution and Decision Making Slides + +These can be used to address new issues or implement corrective action or assist in decision making such as variety release, etc. + +13 + + Confidential Project # and name + + + + + + + + + +Issue Resolution and Decision Making + + + + + +14 + +• Issue (e.g. milestone 3 behind schedule) + + Confidential Project # and name + + + + Actual + +• What is happening + + Expected + +• What should be happening + + + + + + + +Issue Resolution and Decision Making + +15 + +• Issue (e.g. milestone 3 behind schedule) + +• Possible alternative slide to address new issues + + Confidential Project # and name + + + +Needs Wants + + + + + + + +Decision + +16 + +• Summary of decision to be made Confidential Project # and name + + + + + + + + + +Options + +17 + +• Summary of options Confidential Project # and name + + + + + + + + + +Recommendations + +18 + +• What do we need to do to get back on track or address new issue Confidential Project # and name + + + + + + + + + +Resources Required + +19 + + Confidential Project # and name + + + + + + + + + +Plan and Schedule + +20 + + Action Items Who When Confidential Project # and name + + + + + + + + + +Attachment D + +IGER BACKGROUND INTELLECTUAL PROPERTY + +Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission + + Miscanthus accessions from the following sources: Number IGER collection from [***] ([***]), [***] and [***] in 20[***] approx. [***] Kew/ADAS (BRL agreement) -see attached list [***] -see attached list [***] -see attached list Other European sources -see attached list CERES-IGER SCHEDULE 1 April 1, 2007 + + + + + + + +List of Donated Accessions AccID Accession Species SuppliedBy PreviousID Restrictions [***] Type [***] Comments 1 Mb 1 Miscanthus [***] [***] [***] under MTA [***] [***] [***] + +2 Mb 2 Miscanthus [***] [***] [***] under MTA [***] [***] [***] + +3 Mb 3 Miscanthus [***] [***] [***] under MTA [***] [***] [***] + +4 Mb 4 Miscanthus [***] [***] [***] under MTA [***] [***] [***] + +5 Mb 5 Miscanthus [***] [***] [***] under MTA [***] [***] [***] + +6 Mb 6 Miscanthus [***] [***] [***] under MTA [***] [***] [***] + +7 Mb 7 Miscanthus [***] [***] [***] under MTA [***] [***] [***] + +8 Mb 8 Miscanthus [***] [***] [***] under MTA [***] [***] [***] + +9 Mb 9 Miscanthus [***] [***] [***] under MTA [***] [***] [***] + +10 Mb 10 Miscanthus [***] [***] [***] under MTA [***] [***] [***] + +11 Mb 11 Miscanthus [***] [***] [***] under MTA [***] [***] [***] + +12 Mb 12 Miscanthus [***] [***] [***] under MTA [***] [***] [***] + +13 Mb 13 Miscanthus [***] [***] [***] under MTA [***] [***] [***] + +14 Mb 14 Miscanthus [***] [***] [***] under MTA [***] [***] [***] + +15 Mb 15 Miscanthus [***] [***] [***] under MTA [***] [***] [***] + +16 Mb 16 Miscanthus [***] [***] [***] under MTA [***] [***] [***] + +17 Mb 17 Miscanthus [***] [***] [***] under MTA [***] [***] [***] + +18 Mb 18 Miscanthus [***] [***] [***] under MTA [***] [***] [***] + +19 Mb 19 Miscanthus [***] [***] [***] under MTA [***] [***] [***] + +20 Mb 20 Miscanthus [***] [***] [***] under MTA [***] [***] [***] + +21 Mb 21 Miscanthus [***] [***] [***] under MTA [***] [***] [***] + +22 Mb 22 Miscanthus [***] [***] [***] under MTA [***] [***] [***] No longer retained. + +23 Mb 23 Miscanthus [***] [***] [***] under MTA [***] [***] [***] + +24 Mb 24 Miscanthus [***] [***] [***] under MTA [***] [***] [***] + +25 Mb 25 Miscanthus [***] [***] [***] under MTA [***] [***] [***] + +26 Mb 26 Miscanthus [***] [***] [***] under MTA [***] [***] [***] + +27 Mb 27 Miscanthus [***] [***] [***] under MTA [***] [***] [***] + +28 Mb 28 Miscanthus [***] [***] [***] under MTA [***] [***] [***] + +29 Mb 29 Miscanthus [***] [***] [***] under MTA [***] [***] [***] + +30 Mb 30 Miscanthus [***] [***] [***] under MTA [***] [***] [***] + +31 Mb 31 Miscanthus [***] [***] [***] under MTA [***] [***] [***] + +32 Mb 32 Miscanthus [***] [***] [***] under MTA [***] [***] [***] + +33 Mb 33 Miscanthus [***] [***] [***] under MTA [***] [***] [***] + +34 Mb 34 Miscanthus [***] [***] [***] under MTA [***] [***] [***] + +35 Mb 35 Miscanthus [***] [***] [***] under MTA [***] [***] [***] + +36 Mb 36 Miscanthus [***] [***] [***] under MTA [***] [***] [***] + +37 Mb 37 Miscanthus [***] [***] under MTA [***] [***] [***] + + + + + + [***] 38 Mb 38 Miscanthus [***] [***] [***] under MTA [***] [***] [***] + +39 Mb 39 Miscanthus [***] [***] [***] under MTA [***] [***] [***] + +40 Mb 40 Miscanthus [***] [***] [***] under MTA [***] [***] [***] + +41 Mb 41 Miscanthus [***] [***] [***] under MTA [***] [***] [***] + +42 Mb 42 Miscanthus [***] [***] [***] under MTA [***] [***] [***] + +43 Mb 43 Miscanthus [***] [***] [***] under MTA [***] [***] [***] No longer retained. + +44 Mb 44 Miscanthus [***] [***] [***] under MTA [***] [***] [***] + +45 Mb 45 Miscanthus [***] [***] [***] under MTA [***] [***] [***] No longer retained. + +46 Mb 46 Miscanthus [***] [***] [***] under MTA [***] [***] [***] + +47 Mb 47 Miscanthus [***] [***] [***] under MTA [***] [***] + +48 Mb 48 Miscanthus [***] [***] [***] under MTA [***] [***] + +49 Mb 49 Miscanthus [***] [***] [***] under MTA [***] [***] + +50 Mb 50 Miscanthus [***] [***] [***] under MTA [***] [***] + +51 Mb 51 Miscanthus [***] [***] [***] under MTA [***] [***] + +52 Mb 52 Miscanthus [***] [***] [***] under MTA [***] [***] + +53 Mb 53 Miscanthus [***] [***] [***] under MTA [***] [***] + +54 Mb 54 Miscanthus [***] [***] [***] under MTA [***] [***] + +55 Mb 55 Miscanthus [***] [***] [***] under MTA [***] [***] + +56 Mb 56 Miscanthus [***] [***] [***] under MTA [***] [***] + +57 Mb 57 Miscanthus [***] [***] [***] under MTA [***] [***] + +58 Mb 58 Miscanthus [***] [***] [***] under MTA [***] [***] + +59 Mb 59 Miscanthus [***] [***] [***] under MTA [***] [***] + +60 Mb 60 Miscanthus [***] [***] [***] under MTA [***] [***] + +61 Mb 61 Miscanthus [***] [***] [***] under MTA [***] [***] + +62 Mb 62 Miscanthus [***] [***] [***] under MTA [***] [***] No longer retained. + +63 Mb 63 Miscanthus [***] [***] [***] under MTA [***] [***] + +64 Mb 64 Miscanthus [***] [***] [***] under MTA [***] [***] + +65 Mb 65 Miscanthus [***] [***] [***] under MTA [***] [***] + +66 Mb 66 Miscanthus [***] [***] [***] under MTA [***] [***] + +67 Mb 67 Miscanthus [***] [***] [***] under MTA [***] [***] + +68 Mb 68 Miscanthus [***] [***] [***] under MTA [***] [***] + +69 Mb 69 Miscanthus [***] [***] [***] under MTA [***] [***] + +70 Mb 70 Miscanthus [***] [***] [***] under MTA [***] [***] + +71 Mb 71 Miscanthus [***] [***] [***] under MTA [***] [***] + +72 Mb 72 Miscanthus [***] [***] [***] under MTA [***] [***] + +73 Mb 73 Miscanthus [***] [***] [***] under MTA [***] [***] + +74 Mb 74 Miscanthus [***] [***] [***] under MTA [***] [***] + +75 Mb 75 Miscanthus [***] [***] [***] under MTA [***] [***] + +76 Mb 76 Miscanthus [***] [***] under MTA [***] [***] + + + + + +Page 1 + +Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission + + [***] 77 Mb 77 Miscanthus [***] [***] [***] under MTA [***] [***] + +78 Mb 78 Miscanthus [***] [***] [***] under MTA [***] [***] + +79 Mb 79 Miscanthus [***] [***] [***] under MTA [***] [***] + +80 Mb 80 Miscanthus [***] [***] [***] under MTA [***] [***] + +81 Mb 81 Miscanthus [***] [***] [***] under MTA [***] [***] + +82 Mb 82 Miscanthus [***] [***] [***] under MTA [***] [***] + +83 Mb 83 Miscanthus [***] [***] [***] under MTA [***] [***] + +84 Mb 84 Miscanthus [***] [***] [***] under MTA [***] [***] + +85 Mb 85 Miscanthus [***] [***] [***] under MTA [***] [***] + +86 Mb 86 Miscanthus [***] [***] [***] under MTA [***] [***] + +87 Mb 87 Miscanthus [***] [***] [***] under MTA [***] [***] + +88 Mb 88 Miscanthus [***] [***] [***] under MTA [***] [***] + +89 Mb 89 Miscanthus [***] [***] [***] under MTA [***] [***] + +90 Mb 90 Miscanthus [***] [***] [***] under MTA [***] [***] + +91 Mb 91 Miscanthus [***] [***] [***] under MTA [***] [***] + +92 Mb 92 Miscanthus [***] [***] [***] under MTA [***] [***] + +93 Mb 93 Miscanthus [***] [***] [***] under MTA [***] [***] + +94 Mb 94 Miscanthus [***] [***] [***] under MTA [***] [***] + +95 Mb 95 Miscanthus [***] [***] [***] under MTA [***] [***] + +96 Mb 96 Miscanthus [***] [***] [***] under MTA [***] [***] + +97 Mb 97 Miscanthus [***] [***] [***] under MTA [***] [***] + + + + + + + +List of Donated Accessions 98 Mb 98 Miscanthus [***] [***] [***] under MTA [***] [***] + +99 Mb 99 Miscanthus [***] [***] [***] under MTA [***] [***] + +100 Mb 100 Miscanthus [***] [***] [***] under MTA [***] [***] + +101 Mb 101 Miscanthus [***] [***] [***] under MTA [***] [***] + +102 Mb 102 Miscanthus [***] [***] [***] under MTA [***] [***] + +103 Mb 103 Miscanthus [***] [***] [***] under MTA [***] [***] + +104 Mb 104 Miscanthus [***] [***] [***] under MTA [***] [***] + +105 Mb 105 Miscanthus [***] [***] [***] under MTA [***] [***] + +106 Mb 106 Miscanthus [***] [***] [***] under MTA [***] [***] + +107 Mb 107 Miscanthus [***] [***] [***] under MTA [***] [***] + +108 Mb 108 Miscanthus [***] [***] [***] none [***] [***] + +109 Mb 109 Miscanthus [***] [***] [***] none [***] [***] + +110 Mb 110 Miscanthus [***] [***] [***] none [***] [***] + +111 Mb 111 Miscanthus [***] [***] [***] none [***] [***] + +112 Mb 112 Miscanthus [***] [***] [***] none [***] [***] + +113 Mb 113 Miscanthus [***] [***] [***] none [***] [***] + +114 Mb 114 Miscanthus [***] [***] [***] none [***] [***] + +115 Mb 115 Miscanthus [***] [***] [***] none [***] [***] + +116 Mb 116 Miscanthus [***] [***] [***] unclear [***] [***] + +117 Mb 117 Miscanthus [***] [***] [***] unclear [***] [***] + +118 Mb 118 Miscanthus [***] [***] [***] unclear [***] [***] + +119 Mb 119 Miscanthus [***] [***] [***] unclear [***] [***] + +120 Mb 120 Miscanthus [***] [***] [***] unclear [***] [***] + +121 Mb 121 Miscanthus [***] [***] [***] unclear [***] [***] No longer retained. + +122 Mb 122 Miscanthus [***] [***] [***] unclear [***] [***] No longer retained. + +123 Mb 123 Miscanthus [***] [***] [***] unclear [***] [***] + +124 Mb 124 Miscanthus [***] [***] [***] unclear [***] [***] + +125 Mb 125 Miscanthus [***] [***] [***] unclear [***] [***] + +126 Mb 126 Miscanthus [***] [***] [***] unclear [***] [***] + +127 Mb 127 Miscanthus [***] [***] [***] unclear [***] [***] + +128 Mb 128 Miscanthus [***] [***] [***] unclear [***] [***] + +129 Mb 129 Miscanthus [***] [***] [***] unclear [***] [***] + +130 Mb 130 Miscanthus [***] [***] [***] unclear [***] [***] + +131 Mb 131 Miscanthus [***] [***] [***] unclear [***] [***] + +132 Mb 132 Miscanthus [***] [***] [***] unclear [***] [***] + +133 Mb 133 Miscanthus [***] [***] [***] unclear [***] [***] + +134 Mb 134 Miscanthus [***] [***] [***] unclear [***] [***] + + + + + +135 Mb 135 Miscanthus [***] [***] [***] none [***] [***] + +136 Mb 136 Miscanthus [***] [***] [***] none [***] [***] + +137 Mb 137 Miscanthus [***] [***] [***] none [***] [***] + +138 Mb 138 Miscanthus [***] [***] [***] none [***] [***] + +139 Mb 139 Miscanthus [***] [***] [***] none [***] [***] [***] + +140 Mb 140 Miscanthus [***] [***] [***] under MTA [***] [***] [***] + +141 Mb 141 Miscanthus [***] [***] [***] under MTA [***] [***] + +142 Mb 142 Miscanthus [***] [***] [***] under MTA [***] [***] [***] + +143 Mb 143 Miscanthus [***] [***] [***] under MTA [***] [***] [***] + +144 Mb 144 Miscanthus [***] [***] [***] under MTA [***] [***] [***] + +145 Mb 145 Miscanthus [***] [***] [***] none [***] [***] [***] + +146 Mb 146 Miscanthus [***] [***] [***] none [***] [***] [***] + +147 Mb 147 Miscanthus [***] [***] [***] none [***] [***] [***] + +148 Mb 148 Miscanthus [***] [***] [***] none [***] [***] [***] + +149 Mb 149 Miscanthus [***] [***] [***] none [***] [***] + +150 Mb 150 Miscanthus [***] [***] [***] none [***] [***] No longer retained. + +151 Mb 151 Miscanthus [***] [***] [***] under MTA [***] [***] + +152 Mb 152 Miscanthus [***] [***] [***] under MTA [***] [***] + +153 Mb 153 Miscanthus [***] [***] [***] under MTA [***] [***] + +154 Mb 154 Miscanthus [***] [***] [***] none [***] [***] No longer retained. + +155 Mb 155 Miscanthus [***] [***] [***] none [***] [***] + +156 Mb 156 Miscanthus [***] [***] [***] none [***] [***] + +157 Mb 157 Miscanthus [***] [***] [***] none [***] [***] No longer retained. + +158 Mb 158 Miscanthus [***] [***] [***] under MTA [***] [***] + +159 Mb 159 Miscanthus [***] [***] [***] under MTA [***] [***] + +160 Mb 160 Miscanthus [***] [***] [***] under MTA [***] [***] + +161 Mb 161 Miscanthus [***] [***] [***] under MTA [***] [***] + +162 Mb 162 Miscanthus [***] [***] [***] under MTA [***] [***] + +163 Mb 163 Miscanthus [***] [***] [***] under MTA [***] [***] + +164 Mb 164 Miscanthus [***] [***] [***] under MTA [***] [***] + +165 Mb 165 Miscanthus [***] [***] [***] under MTA [***] [***] + +166 Mb 166 Miscanthus [***] [***] [***] under MTA [***] [***] + +167 Mb 167 Miscanthus [***] [***] [***] under MTA [***] [***] + +168 Mb 168 Miscanthus [***] [***] [***] under MTA [***] [***] + +169 Mb 169 Miscanthus [***] [***] [***] under MTA [***] [***] + +170 Mb 170 Miscanthus [***] [***] [***] under MTA [***] [***] + +171 Mb 171 Miscanthus [***] [***] [***] under MTA [***] [***] + +172 Mb 172 Miscanthus [***] [***] [***] under MTA [***] [***] + +173 Mb 173 Miscanthus [***] [***] [***] under MTA [***] [***] + + + + + +Page 2 + +Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission + +174 Mb 174 Miscanthus [***] [***] [***] under MTA [***] [***] + +175 Mb 175 Miscanthus [***] [***] [***] under MTA [***] [***] + +176 Mb 176 Miscanthus [***] [***] [***] no MTA [***] [***] + +177 Mb 177 Miscanthus [***] [***] [***] no MTA [***] [***] + +178 Mb 178 Miscanthus [***] [***] [***] no MTA [***] [***] + +179 Mb 179 Miscanthus [***] [***] [***] no MTA [***] [***] + +180 Mb 180 Miscanthus [***] [***] [***] no MTA [***] [***] + +181 Mb 181 Miscanthus [***] [***] [***] no MTA [***] [***] + +182 Mb 182 Miscanthus [***] [***] [***] no MTA [***] [***] + +183 Mb 183 Miscanthus [***] [***] [***] no MTA [***] [***] + +184 Mb 184 Miscanthus [***] [***] [***] no MTA [***] [***] No longer retained. + +185 Mb 185 Miscanthus [***] [***] [***] none [***] [***] + +186 Mb 186 Miscanthus [***] [***] [***] none [***] [***] + +187 Mb 187 Miscanthus [***] [***] [***] none [***] [***] + +188 Mb 188 Miscanthus [***] [***] [***] none [***] [***] + +189 Mb 189 Miscanthus [***] [***] [***] under MTA [***] [***] + +190 Mb 190 Miscanthus [***] [***] [***] under MTA [***] [***] + +191 Mb 191 Miscanthus [***] [***] [***] none [***] [***] [***] + +192 Mb 192 Miscanthus [***] [***] [***] none [***] [***] [***] + +193 Mb 193 Miscanthus [***] [***] [***] none [***] [***] [***] + +194 Mb 194 Miscanthus [***] [***] [***] none [***] [***] [***] + +195 Mb 195 Miscanthus [***] [***] [***] none [***] [***] [***] + + + + + + + +List of Donated Accessions 196 Mb 196 Miscanthus [***] [***] [***] none [***] [***] [***] + +197 Mb 197 Miscanthus [***] [***] [***] none [***] [***] [***] + +198 Mb 198 Miscanthus [***] [***] [***] none [***] [***] [***] + +199 Mb 199 Miscanthus [***] [***] [***] none [***] [***] [***] + +200 Mb 200 Miscanthus [***] [***] [***] none [***] [***] [***] + +201 Mb 201 Miscanthus [***] [***] [***] none [***] [***] [***] + +202 Mb 202 Miscanthus [***] [***] [***] none [***] [***] [***] + +203 Mb 203 Miscanthus [***] [***] [***] none [***] [***] [***] + +204 Mb 204 Miscanthus [***] [***] [***] none [***] [***] [***] + +205 Mb 205 Miscanthus [***] [***] [***] none [***] [***] [***] + +206 Mb 206 Miscanthus [***] [***] [***] none [***] [***] [***] + +207 Mb 207 Miscanthus [***] [***] [***] none [***] [***] [***] + +208 Mb 208 Miscanthus [***] [***] [***] none [***] [***] [***] + +209 Mb 209 Miscanthus [***] [***] [***] none [***] [***] [***] + +210 Mb 210 Miscanthus [***] [***] [***] none [***] [***] [***] + +211 Mb 211 Miscanthus [***] [***] [***] none [***] [***] [***] + +212 Mb 212 Miscanthus [***] [***] [***] none [***] [***] [***] + +213 Mb 213 Miscanthus [***] [***] [***] none [***] [***] [***] + +214 Mb 214 Miscanthus [***] [***] [***] none [***] [***] [***] + +215 Mb 215 Miscanthus [***] [***] [***] none [***] [***] [***] + +216 Mb 216 Miscanthus [***] [***] [***] none [***] [***] [***] + +217 Mb 217 Miscanthus [***] [***] [***] none [***] [***] [***] + +218 Mb 218 Miscanthus [***] [***] [***] none [***] [***] [***] + +219 Mb 219 Miscanthus [***] [***] [***] none [***] [***] [***] + +220 Mb 220 Miscanthus [***] [***] [***] none [***] [***] [***] + +221 Mb 221 Miscanthus [***] [***] [***] under MTA [***] [***] [***] + +222 Mb 222 Miscanthus [***] [***] [***] under MTA [***] [***] [***] + +223 Mb 223 Miscanthus [***] [***] [***] under MTA [***] [***] [***] + +224 Mb 224 Miscanthus [***] [***] [***] under MTA [***] [***] [***] + +225 Mb 225 Miscanthus [***] [***] [***] under MTA [***] [***] [***] + +226 Mb 226 Miscanthus [***] [***] [***] under MTA [***] [***] [***] + +227 Mb 227 Miscanthus [***] [***] [***] under MTA [***] [***] [***] No longer retained. + +228 Mb 228 Miscanthus [***] [***] [***] under MTA [***] [***] [***] + +229 Mb 229 Miscanthus [***] [***] [***] under MTA [***] [***] [***] + +230 Mb 230 Miscanthus [***] [***] [***] under MTA [***] [***] [***] + +231 Mb 231 Miscanthus [***] [***] [***] under MTA [***] [***] [***] + +232 Mb 232 Miscanthus [***] [***] [***] under MTA [***] [***] [***] + + + + + +233 Mb 233 Miscanthus [***] [***] [***] under MTA [***] [***] [***] + +234 Mb 234 Miscanthus [***] [***] [***] under MTA [***] [***] [***] No longer retained. + +235 Mb 235 Miscanthus [***] [***] [***] under MTA [***] [***] [***] + +236 Mb 236 Miscanthus [***] [***] [***] under MTA [***] [***] [***] + +237 Mb 237 Miscanthus [***] [***] [***] under MTA [***] [***] [***] + +238 Mb 238 Miscanthus [***] [***] [***] under MTA [***] [***] [***] + +239 Mb 239 Miscanthus [***] [***] [***] under MTA [***] [***] [***] + +240 Mb 240 Miscanthus [***] [***] [***] under MTA [***] [***] [***] + +241 Mb 241 Miscanthus [***] [***] [***] under MTA [***] [***] [***] + +242 Mb 242 Miscanthus [***] [***] [***] under MTA [***] [***] [***] + +243 Mb 243 Miscanthus [***] [***] [***] under MTA [***] [***] + +244 Mb 244 Miscanthus [***] [***] [***] none [***] [***] + +245 Mb 245 Miscanthus [***] [***] [***] none [***] [***] + +246 Mb 246 Miscanthus [***] [***] [***] none [***] [***] + +247 Mb 247 Miscanthus [***] [***] [***] none [***] [***] [***] + +248 Mb 248 Miscanthus [***] [***] [***] none [***] [***] [***] + +249 Mb 249 Miscanthus [***] [***] [***] none [***] [***] [***] + +250 Mb 250 Miscanthus [***] [***] [***] none [***] [***] [***] + +251 Mb 251 Miscanthus [***] [***] [***] none [***] [***] [***] + +252 Mb 252 Miscanthus [***] [***] [***] none [***] [***] [***] + +253 Mb 253 Miscanthus [***] [***] [***] none [***] [***] [***] + +254 Mb 254 Miscanthus [***] [***] [***] none [***] [***] [***] + +255 Mb 255 Miscanthus [***] [***] [***] none [***] [***] [***] + +256 Mb 256 Miscanthus [***] [***] [***] none [***] [***] [***] + +257 Mb 257 Miscanthus [***] [***] [***] none [***] [***] [***] + +258 Mb 258 Miscanthus [***] [***] [***] none [***] [***] [***] + +259 Mb 259 Miscanthus [***] [***] [***] none [***] [***] [***] + +260 Mb 260 Miscanthus [***] [***] [***] none [***] [***] [***] + +261 Mb 261 Miscanthus [***] [***] [***] none [***] [***] [***] + +262 Mb 262 Miscanthus [***] [***] [***] none [***] [***] + +263 Mb 263 Miscanthus [***] [***] [***] none [***] [***] + +264 Mb 264 Miscanthus [***] [***] [***] under MTA [***] [***] [***] + +265 Mb 265 Miscanthus [***] [***] [***] under MTA [***] [***] + +266 Mb 266 Miscanthus [***] [***] [***] under MTA [***] [***] [***] + +267 Mb 267 Miscanthus [***] [***] [***] under MTA [***] [***] + +268 Mb 268 Miscanthus [***] [***] [***] under MTA [***] [***] + +269 Mb 269 Miscanthus [***] [***] [***] under MTA [***] [***] [***] + +270 Mb 270 Miscanthus [***] [***] [***] under MTA [***] [***] [***] + +271 Mb 271 Miscanthus [***] [***] [***] under MTA [***] [***] [***] + + + + + +Page 3 + +Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission + +272 Mb 272 Miscanthus [***] [***] [***] under MTA [***] [***] [***] + +273 Mb 273 Miscanthus [***] [***] [***] no MTA [***] [***] + +274 Mb 274 Miscanthus [***] [***] [***] no MTA [***] [***] + +275 Mb 275 Miscanthus [***] [***] [***] no MTA [***] [***] No longer retained. + +276 Mb 276 Miscanthus [***] [***] [***] no MTA [***] [***] No longer retained. + +277 Mb 277 Miscanthus [***] [***] [***] no MTA [***] [***] No longer retained. + +278 Mb 278 Miscanthus [***] [***] [***] no MTA [***] [***] + +279 Mb 279 Miscanthus [***] [***] [***] no MTA [***] [***] + +280 Mb 280 Miscanthus [***] [***] [***] no MTA [***] [***] + +281 Mb 281 Miscanthus [***] [***] [***] no MTA [***] [***] No longer retained. + +282 Mb 282 Miscanthus [***] [***] [***] no MTA [***] [***] + +283 Mb 283 Miscanthus [***] [***] [***] no MTA [***] [***] No longer retained. + +284 Mb 284 Miscanthus [***] [***] [***] no MTA [***] [***] + +285 Mb 285 Miscanthus [***] [***] [***] no MTA [***] [***] No longer retained. + +286 Mb 286 Miscanthus [***] [***] [***] no MTA [***] [***] No longer retained. + +287 Mb 287 Miscanthus [***] [***] [***] no MTA [***] [***] No longer retained. + +288 Mb 288 Miscanthus [***] [***] [***] no MTA [***] [***] No longer retained. + +289 Mb 289 Miscanthus [***] [***] [***] no MTA [***] [***] No longer retained. + +290 Mb 290 Miscanthus [***] [***] [***] no MTA [***] [***] + +291 Mb 291 Miscanthus [***] [***] [***] no MTA [***] [***] + +292 Mb 292 Miscanthus [***] [***] [***] no MTA [***] [***] No longer retained. + +293 Mb 293 Miscanthus [***] [***] [***] unclear [***] [***] + + + + + + + +List of Donated Accessions 294 Mb 294 Miscanthus [***] [***] [***] unclear [***] [***] + +295 Mb 295 Miscanthus [***] [***] [***] unclear [***] [***] + +296 Mb 296 Miscanthus [***] [***] [***] none [***] [***] [***] + +297 Mb 297 Miscanthus [***] [***] [***] none [***] [***] [***] + +298 Mb 298 Miscanthus [***] [***] [***] none [***] [***] + +299 Mb 299 Miscanthus [***] [***] [***] none [***] [***] + +300 Mb 300 Miscanthus [***] [***] [***] none [***] [***] + +301 Mb 301 Miscanthus [***] [***] [***] none [***] [***] + +302 Mb 302 Miscanthus [***] [***] [***] none [***] [***] + +303 Mb 303 Miscanthus [***] [***] [***] none [***] [***] + +304 Mb 304 Miscanthus [***] [***] [***] none [***] [***] No longer retained. + +305 Mb 305 Miscanthus [***] [***] [***] no MTA [***] [***] Mix of accessions + +306 Mb 306 Miscanthus [***] [***] [***] no MTA [***] [***] Mix of accessions + +307 Mb 307 Miscanthus [***] [***] [***] under MTA [***] [***] + +308 Mb 308 Miscanthus [***] [***] [***] under MTA [***] [***] + +309 Mb 309 Miscanthus [***] [***] [***] under MTA [***] [***] + +310 Mb 310 Miscanthus [***] [***] [***] under MTA [***] [***] + +311 Mb 311 Miscanthus [***] [***] [***] no MTA [***] [***] + +312 Mb 312 Miscanthus [***] [***] [***] none [***] [***] [***] + +313 Mb 313 Miscanthus [***] [***] [***] none [***] [***] [***] + +314 Mb 314 Miscanthus [***] [***] [***] none [***] [***] + +315 Mb 315 Miscanthus [***] [***] [***] none [***] [***] + +316 Mb 316 Miscanthus [***] [***] [***] none [***] [***] + +317 Mb 317 Miscanthus [***] [***] [***] none [***] [***] [***] + +318 Mb 318 Miscanthus [***] [***] [***] none [***] [***] [***] + +319 Mb 319 Miscanthus [***] [***] [***] none [***] [***] + +320 Mb 320 Miscanthus [***] [***] [***] under MTA [***] [***] + +321 Mb 321 Miscanthus [***] [***] [***] none [***] [***] No longer retained. + +322 Mb 322 Miscanthus [***] [***] [***] under MTA [***] [***] No longer retained. + +323 Mb 323 Miscanthus [***] [***] [***] under MTA [***] [***] + +324 Mb 324 Miscanthus [***] [***] [***] under MTA [***] [***] + +325 Mb 325 Miscanthus [***] [***] [***] no MTA [***] [***] [***] + +326 Mb 326 Miscanthus [***] [***] [***] no MTA [***] [***] [***] + +327 Mb 327 Miscanthus [***] [***] [***] no MTA [***] [***] [***] + +328 Mb 328 Miscanthus [***] [***] [***] no MTA [***] [***] [***] + +329 Mb 329 Miscanthus [***] [***] [***] no MTA [***] [***] [***] + +330 Mb 330 Miscanthus [***] [***] [***] no MTA [***] [***] [***] No longer retained. + + + + + +Page 4 + +Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission + +331 Mb 331 Miscanthus [***] [***] [***] none [***] [***] + +332 Mb 332 Miscanthus [***] [***] [***] none [***] [***] + +333 Mb 333 Miscanthus [***] [***] [***] none [***] [***] + +334 Mb 334 Miscanthus [***] [***] [***] none [***] [***] + +335 Mb 335 Miscanthus [***] [***] [***] none [***] [***] + + + + + + + +Pages where confidential treatment has been requested are stamped 'Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission,' and the confidential section has been marked as follows: [***]. + +AMENDMENT I + +to SCHEDULE 1 between CERES, INC. and INSTITUTE OF GRASSLAND AND ENVIRONMENTAL RESEARCH dated April 1, 2007 (the "Schedule"). + +Made in two (2) copies. + +Page 1 of 3 + + 1. The Parties agree to replace the suggested Year 1 (April 1 to March 31) milestones in Attachment B of the Schedule in their entirety by the Ceres-IGER Milestones — Year 1, as attached hereto. For clarity, no change is made to pages 1 and 2 of such Attachment B. Any changes to the suggested Year 2 and Year 3 milestones will be addressed in separate amendments to the Schedule. + + 2. The Parties agree that this Amendment I is effective as of January 1, 2008. + + 3. For the remainder, the Schedule remains unchanged and this Amendment I shall form an integral part thereof. + + INSTITUTE OF GRASSLAND AND ENVIRONMENTAL RESEARCH CERES, INC. + + By: /s/ M Humphreys By: /s/ Peter Mascia + +Name: Professor Mervyn Humphreys + +Name: Peter Mascia Title: Director Title: Vice President of Product Development By: /s/ Richard Flavell + +Name: Richard Flavell, CBE, FRS Title: Chief Scientific Officer + + + + + + + +Ceres-IGER Milestones — Year 1 + +Page 2 of 3 + +Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission + + Contract Year (April 1 - March 31) Schedule Milestone See key Year 1 Agronomy Characterise [***] in the potential for [***] amongst [***] from the [***] A + + Year 1 Agronomy Survey of [***] capacity of [***] genotypes taken from the [***] trial during July 20[***]. A Year 1 Agronomy Understand [***] affecting [***] across different [***] of [***] different [***]. A Year 1 [***] [***] of [***] controlled [***] of Miscanthus [***] ([***]) with Miscanthus [***]. [***] of [***] or [***] to [***] by early 20[***]. A + + Year 1 Agronomy [***] of [***] (additional to [***] required by DEFRA) [***] of [***] x [***] made based on staggered [***]. D + + Year 1 [***] [***] of [***] x [***] will be made based on results from 20[***] field [***] and [***]. A Year 1 + + + +[***] + + + +[***] based on outstanding phenotype and [***] geography at [***] from [***] put into [***]. In [***] or [***] or [***] (multiples per [***]) available to put into [***] in 20[***] when requested by Ceres + +B + + Year 1 [***] [***] promising [***] including [***] lines and [***] trialed to date [***] to [***] in [***] or [***] or [***] for trial in [***] when requested. B + + Year 1 [***] Samples of [***] from Year 1 [***] and [***] sent to Ceres. At a minimum [***] + [***] = [***]; more if possible from [***] of [***] x [***] and [***] x [***] and [***] of [***] x [***] ([***]). B + + Year 1 [***] [***] to Ceres from M. [***] ([***]) x M. [***] ([***]) in the field in 20[***]; believed to be [***] . B + + Year 1 Markers [***]/DNA from [***] plant [***] phenotyped in the field since 20[***] and first [***] delivered to Ceres in 20[***]. C + + Year 1 + + + +Markers + + + +[***]/DNA from plant [***] in [***] in 20[***] where material is available, plus other [***] individuals (numbers defined in Marker schedule) and other selected genotypes where material is available delivered to Ceres in 20[***] + +C + + Year 1 [***] Year 2 and [***] phenotype/[***] assessments of material in [***] trials reported for Ceres to make correlations between assessments and markers D + + Year 1 Markers [***] sent to Ceres, samples as requested by Ceres for [***]. E Year 1 [***] [***] made in 20[***] and materials brought into [***] in IGER to fill in specific [***] needed for likely [***]. F + + + + + + + +KEY + +Page 3 of 3 + +Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission + +A [***] research to create an economically viable business + +B [***] to Ceres to help [***] in [***] as early as possible + +C Advancing the marker assisted [***] program as early as possible + +D Advancing the [***] program + +E Advancing [***] research + +F Enhancing [***] + + + + + + + +Pages where confidential treatment has been requested are stamped 'Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission,' and the confidential section has been marked as follows: [***]. + +AMENDMENT II + +to the Collaboration Agreement effective as of April 1, 2007 between the Institute of Grassland and Environmental Research ("IGER") and Ceres, Inc. ("CERES"), as amended (the "Agreement") and to SCHEDULE 1 between the Institute of Grassland and Environmental Research ("IGER") and Ceres, Inc. ("CERES") and dated April 1, 2007, as amended ("Schedule 1"). + +WHEREAS, the Institute of Grassland and Environmental Research ("IGER") and CERES entered into the Agreement and Schedule 1 on April 1, 2007; + +WHEREAS, on April 1, 2008 IGER merged with Aberystwyth University Institutes of Biological Sciences and Rural Sciences to form the new Institute of Biological, Environmental and Rural Sciences of Aberystwyth University ("AU"); + +WHEREAS, as a consequence of such merger, the Parties wish to substitute AU in place of IGER as a contract party to the Agreement; + +WHEREAS, AU and CERES wish to amend the Agreement, as set forth hereinafter. + +NOW THEREFORE, in consideration of the premises and of the mutual covenants and agreements contained herein and of other good and valuable consideration, the Parties have agreed and do hereby agree as follows: + +Page 1 of 2 + + 1. The Parties agree that Aberystwyth University, a Higher Education Establishment registered in the United Kingdom No. RC000641, having an office at Old College, King Street, Aberystwyth SY23 2AX ("AU") should be substituted as a contract party to the Agreement in place of IGER. + + 2. The Parties agree to amend Article 14.1 (e) (v) of the Agreement so as to read as follows: + + "(v) with thirty (30) days' written notice to AU if Defra has not assigned to AU, or granted to AU a license reasonably satisfactory to CERES on, the Intellectual Property vested in Defra or the Crown or the Secretary of State pursuant to the DEFRA agreement NF 0426 within three (3) years from the Effective Date (the "Assignment/License"); provided however that Ceres will not unreasonably refuse to extend such three (3) year term by six (6) months if so requested by AU by December 31, 2009." + + 3. The Parties agree to add the following clause in Article 6 of Schedule 1: + + + + + + + +Made in two (2) copies. + +Page 2 of 2 + +Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission + + "As long as the assignment or license grant by Defra to AU, and the corresponding grant of a license or sublicense to CERES in compliance with the Agreement, has not occurred, CERES will have the right to withhold [***] percent ([***]%) of the funding payable by CERES to AU pursuant to Attachment B — Budget, attached to Schedule 1 (as this may be amended from time to time). CERES' rights to withhold such payments will terminate: + + (i) with respect to [***] percent ([***]%) of the funding, as of the date CERES effectively receives a license or sublicense satisfactory to CERES on CERTAIN MISCANTHUS ACCESSIONS (defined in Article 3.2.1 b. of the Agreement) and related information. + + (ii) with respect to [***] percent ([***]%) of the funding as of the date CERES effectively receives a license or sublicense satisfactory to CERES on the Intellectual Property vested in Defra or the Crown or the Secretary of State pursuant to the Defra agreement NF0426." + + 4. The Parties agree that this Amendment II is deemed to have become effective as of May 1, 2008. + + 5. For the remainder, the Agreement and Schedule 1 remain unchanged and this Amendment II shall form an integral part thereof. + + ABERYSTWYTH UNIVERSITY CERES, INC. By: /s/ S.G.A. Durbin By: /s/ Richard Flavell Name: S.G.A. Durbin Name: Richard Flavell, CBE, FRS Title: Director, Risk & Research Finance Title: Chief Scientific Officer By: /s/ Richard Hamilton Name: Richard Hamilton Title: President and Chief Executive Officer + + + + + + + +Pages where confidential treatment has been requested are stamped 'Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission,' and the confidential section has been marked as follows: [***]. + +CONFIDENTIAL + +AMENDMENT III + +to the SCHEDULE 1 between the Institute of Biological, Environmental and Rural Sciences ("IBERS") of Aberystwyth University and Ceres, Inc. ("CERES") and dated April 1, 2007, as amended ("Schedule 1"). + +WHEREAS, IBERS and CERES entered into Schedule 1 on April 1, 2007; + +WHEREAS, the initial term of Schedule 1 was for three (3) years; + +WHEREAS, the Parties wish to extend the term of Schedule 1 to cover additional research and development activities; + +WHEREAS, IBERS and CERES further wish to amend Schedule 1, as set forth hereinafter. + +NOW THEREFORE, in consideration of the premises and of the mutual covenants and agreements contained herein and of other good and valuable consideration, the Parties have agreed and do hereby agree as follows: + +Richard Flavell (CERES) Jeff Gwyn (CERES) Charlie Rodgers (CERES) Timothy Swaller (CERES) + +Page 1 of 9 + + 1. The Parties agree to substitute the RESEARCH AND DEVELOPMENT PLAN referred to in Article 3 of Schedule 1 and attached as Attachment A to Schedule 1 by a new Attachment A/2010 revision, as attached to this Amendment III. + + 2. The Parties agree to amend Article 5 PHD LEVEL SCIENTIFIC STAFF for CERES staff so as to read as follows: + + 3. The Parties agree to substitute the Budget referred to in Article 6 of Schedule 1 and attached as Attachment B to Schedule 1 by a new Attachment B/2010 revision, as attached to this Amendment III. + + 4. The Parties agree to amend Article 16 Term of Schedule 1 so as to read as follows: + + "Term: Five (5) years provided however, at least one (1) year before the end of the term of this SCHEDULE, the Parties shall decide whether to extend it for one (1) or more years, with appropriate updates to the RESEARCH AND DEVELOPMENT + + + + + + + +Made in two (2) copies. + +Page 2 of 9 + + PLAN (Attachment A/2010 revision), and FUNDING (Article 6 of this SCHEDULE)." + + 5. The Parties agree that this Amendment III is deemed to have become effective as of March 31, 2010. + + 6. For the remainder, Schedule 1 remains unchanged and this Amendment III shall form an integral part thereof. + + ABERYSTWYTH UNIVERSITY CERES, INC. By: /s/ E. Reynolds By: /s/ Jefferson Gwyn Name: Emyr Reynolds Name: Jefferson Gwyn Title: Head of Research Grants Title: Vice President of Breeding & Genomics By: /s/ Richard Flavell Name: Richard Flavell, CBE, FRS Title: Chief Scientific Officer + + + + + + + +Attachment A/2010 revision + +RESEARCH AND DEVELOPMENT PLAN + +April 1, 2010 — March 31, 2011 workplan + +Page 3 of 9 + +Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission + + Action proposed Dates Performed Summary of action taken 1. Supply [***] from the [***] best [***] to CERES partners in [***] + +April 2010 + + + +Supplied [***], [***] checked [***] to [***] company as directed by CERES + + 2. Supply plants for [***] observation and miniplot trials + + + +April to July 2010 + + + +Supplied [***] for the establishment of the following trials [***] 4 ON ([***]) [***] 5 MP (best lines — [***] and [***]) [***] 1 ON (best lines — [***] and [***]) [***] 4 ON [***] 13 MP (best [***] from [***], JKI etc.) [***] A9 ON ([***] survivors, [***], [***]) [***] A 10 ([***] survivors, [***], [***]) [***] A11 RP (small plots of [***]) 3. Gather phenotyping data from [***] trials to identify the most promising [***] to be used in [***] + + + +July to November + + + +Best [***] was identified based on autumn [***] scores. [***] 'Generic high [***] found in [***] at [***] and [***]. Technical enabling A new [***] field nomenclature was developed to ensure clear communication so that each plant or plot in the [***] trials was identified by a UID. Photographs and data loaded to MSCAN and discussed at the January 2011 quarterly. Development of the controlled vocabularies for phenotyping fields is ongoing. [***] data was recorded in [***] and [***] on the [***] [***] data in Feb 2011 gathered but needs developed of the controlled vocabularies before this can be loaded to MSCAN and analysed. + + + + + + + + + + + +Page 4 of 9 + +Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission + + Action proposed Dates Performed Summary of action taken 4. Send [***] of the best selections from [***] and [***] to [***] identified by June 2010 + +October + + + +[***] Miscanthus samples for [***] under [***] on behalf of Dr. Charlie Rodgers. The Miscanthus [***] in this package are provided under a research agreement between IBERS and CERES and are restricted to release only to CERES, Inc. They are not [***]. + + 6. Develop knowledge of [***] for [***] in a wide range of [***] in order to [***] + +April — Oct + + + +[***] experiments were run in 2010. Discovery of the [***] effect when plants were grown under simulated [***] conditions. + +5. Create [***] based on a knowledge of [***] available All year and ongoing Table shows number of [***] attempted by [***] types. + +Restricted: a form of [***] where [***] within a [***] has occurred and the plants have been [***] to [***]. The potential [***] contributors can be short listed from the [***] monitoring data. [***]: [***] wise [***] produce two [***] records since [***] contain both [***] and [***] parts. [***]: single [***] [***]: Here the [***] from [***] are registered as [***] ops. + +In 2010 encumbrances ([***] and [***]) stopped us going down the route of [***] M. [***] with the well characterized [***] from [***]. + + [***] Type Number % [***] Produced >[***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] Total [***] [***] [***] + + + + + + + +April 1, 2011 — March 31, 2012 workplan + +Page 5 of 9 + +Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission + + Action proposed Dates Performed Summary of action taken 7. [***] experiments April to Oct A small trial revealed the value of [***] in [***] of [***] M. [***] from [***]. 8. Leaf samples from DNA to develop the [***] Oct Freeze dried samples sent to CERES from [***] + + 9. [***] from 2010 [***] raised for planting in [***] trials Jan — March [***] tests identified successful [***]. A tray of each [***] was raised where possible (1 tray = [***] plants) 10. [***] from 2010 [***] sent to CERES April 2011 From these [***] from [***] with interesting [***] were sent to Charlie. + + 11. Reporting + + + + + + + +Powerpoints of July 13 meeting sent Powerpoints of August 28 meeting sent Powerpoints of 1 and 2 Nov meeting sent Document on forward plans (Nov 2010) Powerpoints of meeting 20-21 Jan 2011 + + milestone Projected Dates Summary of planned actions 1. Characterise [***] from the [***] to inform development tracks 1 to 4 + +Ongoing + + + +For [***] from the [***] we will perform measurements to collect: + + [***] (when plants are [***] ([***] years from planting) [***] status in autumn [***] (scores and measurements) 2. Development of [***]/ [***] with desirable characters + +Ongoing + + + +Attempt >[***] exploratory [***] between [***] in [***] of the [***] Perform at least [***] with best [***] identified in [***] using the [***] and [***] in 2010 From these [***] of [***] and [***] with interesting [***] to be sent to Charlie. + + + + + + + +Page 6 of 9 + +Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission + + milestone Projected Dates Summary of planned actions 3. Development of [***] (CERES, IBERS) + + + + + + + +Organize [***] phenotype data for use by CERES in collaboration with [***] (on a BBSRC funded flowering grant) and [***] (on the [***]). Monitor [***] planted in 20[***] through collaboration with [***] and the [***]. Supply of further leaf samples as requested for [***] analysis. + + + + + + + +Page 7 of 9 + +Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission + + milestone Projected Dates Summary of planned actions 4. Initiate field evaluation of selected potential new Miscanthus [***] and [***], measure [***] and other key [***]. + +April to Aug 2011 + + + +Notes [***] and [***] for [***] selections + + + +Putative Trial name [***] 6 ST + + plus [***] controls [***] 7 MP [***] blocks based on best [***] [***] 5 CB [***] blocks based on best [***] [***] 6 CB [***] blocks based on best [***] [***] 7 CB [***] blocks based on best [***] [***] 8 CB [***] testing [***] 9 ON miniplots, sue's choices [***] 3 MP miniplots, sue's choices [***] 25 MP [***] from 2010 [***] [***] 26 ST [***] [***] 27 CB [***] [***] 28 CB [***] which are now in [***]' [***] 29 ON Library of [***] used in [***] (E.G. #1 To 5'S) [***] 30 ON Selected lines into [***] [***] 3 ON Sue's MP selections [***] 1 MP + + + + + + + +Page 8 of 9 + +Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission + + milestone Projected Dates Summary of planned actions 5. [***] and [***] + + + +Ongoing + + + +[***] of [***] currently being raised from use in [***] will be supplied to [***]. [***] screens on [***] to be performed and added to MSCAN. 6. [***] experiments Field experiments with direct sowing using [***]. 7. Reporting Minutes and powerpoints from meetings + + + + + + + +Attachment B/2010 revision + +Budget + +CERES shall pay IBERS £[***] (GBP) per year for the implementation of the RESEARCH AND DEVELOPMENT PLAN set forth in Attachment A/2010 revision. Annual payments from CERES to IBERS shall not exceed £[***] (GBP). + +Payment details shall be as set forth in Article 1.8 of the Collaboration Agreement. + +"1.8 Where a SCHEDULE provides that CERES will make a financial contribution to certain RESEARCH PROJECT activities performed by IBERS, unless agreed otherwise in the appropriate SCHEDULE, IBERS will submit invoices after the end of each calendar quarter for the work performed during that quarter. Each such invoice shall reflect only those costs that have been incurred in performance of the RESEARCH PROJECT and shall provide a breakdown of costs similar to the detail set forth in the budget of the related SCHEDULE. CERES will pay all such invoices within thirty (30) days after the invoice date. Payments shall be remitted to: + +Institute of Biological, Environmental and Rural Sciences ("IBERS") of Aberystwyth University Plas Gogerddan Aberystwyth Ceredigion SY23 3EB United Kingdom" + +Page 9 of 9 Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission. \ No newline at end of file diff --git a/full_contract_txt/CHANGEPOINTCORP_03_08_2000-EX-10.6-LICENSE AND HOSTING AGREEMENT.txt b/full_contract_txt/CHANGEPOINTCORP_03_08_2000-EX-10.6-LICENSE AND HOSTING AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..bd77bd2a51181b61115c50a58ffc62face177875 --- /dev/null +++ b/full_contract_txt/CHANGEPOINTCORP_03_08_2000-EX-10.6-LICENSE AND HOSTING AGREEMENT.txt @@ -0,0 +1,1001 @@ +CONFIDENTIAL TREATMENT - REDACTED VERSION + + CORIO INC. + + LICENSE AND HOSTING AGREEMENT + + This License and Hosting Agreement (the "AGREEMENT") is made and entered into as of December 13, 1999 ("EFFECTIVE DATE") by and between Corio Inc., a Delaware corporation, having its principal place of business at 700 Bay Road, Suite 210, Redwood City, CA 94063 ("CORIO") and Changepoint, Inc., a Delaware corporation having a place of business at 1595 Sixteenth Ave., Suite 700, Richmond Hill, Ontario, Canada L4B 3N9 ("CHANGEPOINT"). + + BACKGROUND + +A. Changepoint is the owner or has the right to license certain proprietary software products (the "SOFTWARE" as further defined below); and + +B. Corio wishes to obtain a license to use and host the Software on the terms and conditions set forth herein in connection with the hosting services that Corio will provide to its Customers (as defined below) and Changepoint wishes to grant Corio such a license on such terms; + +C. The parties further wish to jointly market and promote the other party's software and/or services as well as provide support services to Corio and its Customers in accordance with this Agreement. + + NOW, THEREFORE, for good and valuable consideration, the parties hereby agree as follows: + +1. DEFINITIONS. + +The following terms shall have the following meanings: + +1.1 "SOFTWARE USER" means a named user of the Corio Services worldwide to whom a user identification number and password has been assigned, which permits that user to access and use the Software on a designated Corio Server. The identification number and password used by a Software User is reusable and reassignable and may be used and transferred by Corio, in accordance with the licenses granted below, between Customers as one Customer discontinues the Corio Services and another Customer subscribes. + +1.2 "ASP" means Application Service Provider. + +1.3 "APPLICATION MANAGEMENT REVENUE" means all revenue Corio receives from Customers for use of the Software and basic support of the Software provided at no additional charge to Customers (Level 1 and Level 2 support as defined in Exhibit C hereto), operational support of the Software and basic infrastructure support (hardware, database and operating system) for the Software, less taxes, freight, insurance, refunds or credits and other non-product items. + +1.4 "CORIO SERVERS" means the unlimited number of computer servers owned or operated by or for Corio in North America which will contain the installed Software (as defined below) for access by Customers in connection with the Corio Services. + +1.5 "CORIO SERVICES" means the hosting services offered by Corio to its Customers in which Corio allows Customers to access the Corio Servers. + + 1 + +1.6 "CUSTOMER(S)" means one or more customers of the Corio Services having its principal executive offices in North America who obtains a sublicense from Corio to use the Software by accessing one or more Corio Servers. + +1.7 "DEMONSTRATION SOFTWARE" means copies of the Software which are for demonstration purposes only and which contain sample data and transactions. + +1.8 "DOCUMENTATION" means any on-line help files or written instruction manuals regarding the use of the Software. + +1.9 "RELATIONSHIP MANAGERS" means the appointed employee of each party, as set forth on EXHIBIT A attached hereto and made a part hereof, who shall be the primary contact for implementing and administering the terms and conditions of this Agreement. + +1.10 "SOFTWARE" means Changepoint's proprietary software described in EXHIBIT A attached hereto and made a part hereof, in object code form only, and any Updates or Upgrades (as defined below) thereto. The Software shall also include any Application Programming Interfaces ("API") provided by Changepoint to Corio, but such API intellectual property shall not be sublicenseable to Customers. + +1.11 "TERRITORY" means throughout the world. + + + + + +1.12 "UPDATE(S)" means any error corrections, bug fixes, modifications or enhancements to the Software made generally available by Changepoint to its licensees, which are indicated by a change in the numeric identifier to the Software in the digit to the right of the decimal, or any error corrections, bug fixes, modifications or enhancements of the Software. + +1.13 "UPGRADE(S)" means a release, function or version of the Software designated as such by Changepoint which contains new features or significant functional enhancements to the Software, which are indicated by a change in the numeric identifier for the Software in the digit to the left of the decimal, which Upgrade is provided to Changepoint's installed customer base for the Software. For the purposes of this Agreement, "Software Support and Maintenance" means those services listed in Section 5.3 of this Agreement and EXHIBIT C and the provision of Updates and Upgrades as called for by this Agreement. + +1.14 "PSA APPLICATION" means a commercially available suite or collection of integrated proprietary software applications marketed as a suite or a combination of software products which offer substantially the following functionality specifically designed for information technology professional services users : (i) time and expense, which allows users to enter and modify time and expenses associated with a project/task for a time period, approve time and expenses entered, and determine who has submitted time and expense reports, (ii) project accounting and billing, which allows users to apply cost and billing rates to time entered for projects, generate client invoices based on terms and conditions of engagement, track amounts billed and earned for each project, feed invoice data to an accounts receivables system, and feed cost and billing accounting entries to a general ledger system, (iii) project management, which allows users to create work breakdown structure, schedule dates and resource assignments for project, record project and task status, and create reports to monitor project progress, (iv) resource management, which allows users to assign resources to projects based on skills and availability, and create reports to monitor and manage resource utilization, (v) engagement management, which allows users to create billing terms and conditions for a client, and create reports to monitor and manage engagement billing, (vi) opportunity management, which allows users to track + + 2 + + customers/prospects, sales opportunities and sales activities, and forecast sales by various criteria, and (vii) marketing campaign management, which allows users to create marketing campaigns, track campaign effectiveness, and manage marketing lists. + +2. GRANT OF RIGHTS. + +2.1 HOSTING SOFTWARE LICENSE. Subject to the terms and conditions of this Agreement, Changepoint hereby grants to Corio a fee-bearing, irrevocable, nonexclusive, nontransferable (except in accordance with Section 14.1 of this Agreement) license in the Territory to (i) reproduce the Software in machine executable object code format only for installation on the Corio Servers; (ii) install multiple copies of the Software on Corio's Servers which will be made remotely accessible to Corio's Customers for their internal business purposes, (iii) permit limited access to and use of the Software by Customers through Corio Servers solely for such Customer's internal business purposes; (iv) sublicense an unlimited number of Customers to access and use the Software only through the installation on Corio Servers solely for such Customer's internal business purposes; and (v) use Changepoint's tools and utilities, if any, subject to any restrictions placed on the Changepoint by third party software providers and payment of any applicable fees required by such third parties, to configure, integrate and manage the Software. Corio shall not authorize Customers to download or reproduce the Software for use except as necessary in connection with the Corio Services. Except as specifically authorized by this Agreement, no license is granted under this Agreement to Corio to distribute the Software to its Customers or for use other than as part of the Corio Services. + +2.2 INTERNAL USE LICENSE FOR PRODUCTION, TESTING, DEVELOPMENT, UPGRADE, REPORTING AND TRAINING. Subject to the terms and conditions of this Agreement, Changepoint grants to Corio a nonexclusive, nontransferable (except in accordance with Section 14.1 of this Agreement), royalty-free, fully paid up license in the Territory to reproduce, install and use additional copies of the Software, Documentation, and Software tools and utilities if any, subject to any restrictions placed on the Changepoint by third party software providers and payment of any applicable fees required by such third parties, in machine executable object code for production, testing, development, upgrade, reporting and training for the purpose of allowing the Software to be made available to Customers as part of the Corio Services. This license includes the right to integrate the Software with Corio's system software and other hosted applications in connection with providing the Software to Customers as part of the Corio Services. + +2.3 INTERNAL USE LICENSE FOR CORIO'S INTERNAL BUSINESS OPERATIONS. + + Changepoint grants to Corio a nonexclusive, nontransferable (except in accordance with Section 14.1 of this Agreement), royalty-free, fully + + + + + + paid-up license to install and use the Software, Documentation, and Software tools and utilities if any, for an unlimited number of Corio users, subject to any restrictions placed on the Changepoint by third party software providers and payment of any applicable fees required by such third parties, in machine executable object code for Corio's internal business purposes. Corio's internal use license under this Section 2.3 is subject to and shall be in accordance with the terms and conditions of Changepoint's standard License Agreement, a copy of which is attached hereto as EXHIBIT G and made a part hereof. The provisions of EXHIBIT G shall apply only to the internal use license granted in this Section 2.3 and not to any other licenses granted to Corio in this + + 3 + + CONFIDENTIAL TREATMENT + + Agreement. Any conflict or inconsistency between the terms of this Agreement and the terms of the license set forth in EXHIBIT G with respect to the internal use license granted in this Section 2.3 shall be controlled by the terms of this Agreement. Notwithstanding anything to the contrary in Section 11 of this Agreement, the internal use license in this Section 2.3 shall remain in effect during the term of this Agreement and for a period of nine (9) months after termination or expiration of this Agreement. + +2.4 DEMONSTRATION LICENSE. Subject to the terms and conditions of this Agreement, Changepoint hereby grants to Corio a nonexclusive, nontransferable (except in accordance with Section 14.1 of this Agreement) royalty-free, fully paid up right and license in the Territory, on Corio Servers, to make a reasonable number of copies of the Demonstration Software solely for demonstration purposes to potential Customers. Demonstration Software shall be made available to Corio's sales personnel and the parties agree to cooperate to make the Changepoint demonstration database available to Corio sales personnel on an ongoing basis. Corio shall not distribute any demonstration copies of the Software. Corio shall not demonstrate the Software to any one Customer for more than sixty (60) days from the start of that Customer demonstration, and Corio shall not demonstrate the Software to more than ten (10) Software Users at any one time. Further, the demonstration copies shall not permit the entry of additional data. + +2.5 DISTRIBUTION LICENSE: Corio shall have the right to resell licenses for the Software to any Corio Customer according to the terms and conditions of Changepoint's standard Distribution Agreement ("Changepoint's Distribution Agreement"). Corio and Changepoint shall enter into Changepoint's Distribution Agreement within sixty (60) days following the Effective Date, the terms of which shall be in substantial accordance with the copy of Changepoint's Distribution Agreement provided to Corio. Any conflict or inconsistency between the terms of this Agreement and the terms of Changepoint's distribution license with respect to the distribution license granted in this Section 2.5 shall be controlled by the terms of this Agreement. Under Changepoint's Distribution Agreement, Changepoint shall give a *** discount from the then-current Changepoint list price for such Software licenses to Corio for the first Two Million Dollars ($2,000,000U.S.) of such cumulative calendar year sales based on Changepoint's list price, and a *** discount based on Changepoint's then-current list price thereafter. This pricing formula shall apply for each calendar year during the term of this Agreement which Corio has distribution rights under this Section 2.5. For those Corio Customers who purchase Changepoint Software licenses from Corio pursuant to this Section 2.5 and Changepoint's Distribution Agreement, Corio shall pay to Changepoint a Software Support and Maintenance fee equal to *** of Changepoint's standard support and maintenance services for the Software Support and Maintenance services provided by Changepoint as specified in Section 5.3 of this Agreement and EXHIBIT C attached hereto and made a part hereof, and for Updates and Upgrades. Subject to Corio's payment of the Software support and maintenance fee as set forth in this Section 2.5, Changepoint's Software Support and Maintenance obligation with respect to Software distributed by Corio pursuant to this Section 2.5 shall continue after termination or expiration of this Agreement with respect to all Software Users granted access to the Software prior to termination or expiration of this Agreement, for the remaining duration of each such Software Users' rights to use the Software pursuant to agreements between Corio and its Customers. Under no circumstances shall Changepoint contact Corio Customers regarding a non-hosting license sale, unless requested to do so by Corio. Further, if a Corio Customer contacts Changepoint to purchase the Software license independent of the Corio Services, Changepoint shall immediately refer that Customer to + + *** The omitted material has been filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment. + + 4 + + Corio. Changepoint shall not be entitled to share in any Application + + + + + + Management Revenue received by Corio related to or arising from hosting services provided to Customers which obtain a license to the Software from Changepoint pursuant to this Section 2.5. Corio's right to collect fees from Customers under the Changepoint licenses under this Section 2.5 will expire upon termination of the Corio contracts with its Customers for such Software. + +2.6 LICENSE AGREEMENTS. Corio shall make the Software on the Corio Servers remotely accessible to Customers under the then-current terms of its standard Customer license agreement. Each such Customer license shall, at a minimum, contain the provisions set forth in EXHIBIT E attached hereto and made a part hereof ("CUSTOMER LICENSE AGREEMENT TERMS"), or the substantial equivalent thereof. As to each Software User who is provided access to the Software, Corio or its Customers shall secure the Software User's consent to an end user agreement with terms at least equivalent to those in EXHIBIT E hereto. + +2.7 RESTRICTIONS. Corio may not copy, distribute, reproduce, use or allow access to the Software except as explicitly permitted under this Agreement, and Corio shall not, nor will it permit any third party to, modify, adapt, translate, prepare derivative works from, decompile, reverse engineer, disassemble or otherwise attempt to derive source code from the Software or any internal data files generated by the Software. + +2.8 OWNERSHIP. Changepoint and its licensors hereby retain all of their right, title, and interest in and to the Software and Documentation, including all copyrights, patents, trade secret rights, trademarks and other intellectual property rights therein. All rights not expressly granted hereunder are reserved to Changepoint and its licensors. The Software and Documentation and all copies thereof are licensed, not sold, to Corio. All changes, modifications and enhancements or derivative works made to the Software or Documentation by Corio or Changepoint, or jointly by the parties, shall be owned by Changepoint, including all copyrights, patents, trade secret rights, trademarks and other intellectual property rights therein. Any works, inventions and developments, including but not limited to interface code, created by Corio or its contractors which enables the Software to work with and in conjunction with Corio's system software or Corio's other hosted applications, including all copyrights, patents, trade secret rights, trademarks and other intellectual property rights therein shall be owned by Corio. Ownership of any works to be created jointly by the parties, including all copyrights, patents, trade secret rights, trademarks and other intellectual property rights therein, shall be decided by the parties at the commencement of such joint efforts. Each of the parties shall, from time to time, execute and deliver all documents and other instruments reasonably requested by the other party to perfect such other party's ownership of the interests set forth in this Section 2.8. + +2.9 NEW PRODUCTS. Updates and Upgrades to the Software are subject to the terms of this Agreement and are included in the applicable Software Support and Maintenance fees payable by Corio. Changepoint and Corio may, in the future, agree that new products and solutions offered by Changepoint may be added to this Agreement according to the license fees and other terms and conditions as the parties may agree. + +2.10 PREFERRED RELATIONSHIP. During the one (1) year period commencing on the Effective Date (i) Changepoint and its affiliates, to the extent they publicly promote, market or advertise hosting services for the Software, will Publicly Promote Corio as its preferred hosting supplier and partner for the Software and will, in any non-public marketing or promotion of the Software, treat Corio as its preferred partner and supplier of hosting services for the Software, and (ii) Corio and its affiliates, to the extent they publicly promote, market or + + 5 + + CONFIDENTIAL TREATMENT + + advertise the use of a PSA Application in conjunction with the Corio Services, will Publicly Promote the Software as their preferred PSA Application and will, in any non-public marketing or promotion of the hosting services offered by Corio, treat Changepoint as their preferred supplier and partner for PSA Applications. In this Section 2.10, the term "Publicly Promote" means any marketing, promotion or solicitation of business made by any means in public or intended for reception by the public including, without limitation, in published sales, advertising and marketing materials, materials or statements posted on websites, public announcements and press releases, but does not include sales and marketing materials intended for reception by a specific customer or prospective customer, any confidential solicitation of business from a specific customer, nor any referral from a third party to solicit a specific customer. Should either party be in violation of the terms of the Preferred Relationship set forth in this Section 2.10, both parties agree that the sole and exclusive remedy for such breach is for the accused party to diligently use best commercial efforts to cease the activities in violation of this Section 2.10 and to correct the violation and, as soon as reasonably possible, cease to distribute or publish and destroy "Offensive Materials" after receiving written notice from the other party, and to provide such other party with commercially reasonable evidence that it has done so. "Offensive Materials", for purposes of this provision, means published sales, + + + + + + advertising and marketing brochures and collateral, statements posted on websites and public announcements and press releases or any other promotional materials, all intended for viewing by the public and published by or with the concurrence of the accused party. + +2.11. MARKET DEFINITION. During the term of this Agreement, Corio agrees not to provide the Software in connection with Corio Services or distribute the Software under Section 2.5 of this Agreement to the following companies or their subsidiaries: ***. Corio and Changepoint agree that on an semi-annual basis, this list of companies will be reviewed by the parties and each party agrees that its consent to the other party's request for changes to this list (additions and deletions) will not be unreasonably withheld or delayed. + +3. DELIVERY OF SOFTWARE. + +3.1 DELIVERY AND ACCEPTANCE. Changepoint shall issue to Corio, via electronic means of delivery, as soon as practicable, one (1) machine-readable copy of the Software, along with one (1) copy of the on-line Documentation. Changepoint will provide Corio with five (5) written copies of the Documentation at no cost, and any additional written copies at Changepoint's standard charges. Corio acknowledges that no copy of the source code of the Software will be provided to Corio. Within one hundred twenty (120) days after delivery of the Software, Corio shall test the Software for conformance with the Documentation ("Acceptance Test"). If the Software performs in substantial accordance with the Documentation, then Corio shall notify Changepoint in writing of its acceptance of the Software. In the event Corio finds material errors or defects with the Software, Corio shall notify Changepoint in writing of such errors or defects and provide adequate detail to facilitate Changepoint replicating the error or defect. Upon receipt of written notice, Changepoint shall have fifteen (15) days to correct the defect, reinstall the Software at the Corio site and re-perform the Acceptance Test. If Corio does not accept the Software after the second Acceptance Test, a third Acceptance Test will be performed. If after the third + + *** The omitted material has been filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment. + + 6 + + Acceptance Test Corio does not accept the Software, Corio may, at its sole option, elect to (i) repeat the Acceptance Test in accordance with the provisions of this Section 3.1 as many times as Corio chooses or (ii) terminate the Agreement and receive a refund of any fees paid to Changepoint as of such date. Termination of this Agreement by Corio for non conformance of the Software to the Documentation under this Section 3.1 shall, upon a refund of all fees paid to Changepoint, be Corio's sole and exclusive remedy against Changepoint for any nonconformance of the Software with the Documentation. Both parties acknowledge that any professional services provided to Corio subsequent to the installation and acceptance of the Software are non-essential for the purpose of the acceptance of the Software. + +3.2 NEW VERSIONS. Changepoint shall use commercially reasonable efforts to provide Corio with any pre-release versions of relevant Updates or Upgrades of the Software. Changepoint shall make these versions available to Corio to preview at the earliest possible date. Changepoint shall provide all such Updates and Upgrades to Corio free of additional charge and Corio shall provide any such Updates and/or Upgrades to its Customers within twenty four (24) months after their release to Corio. Changepoint agrees to make changes to the Software such that all functionality currently available in the Software will be one hundred percent (100%) thin client and browser-based as set forth in the schedule attached hereto as EXHIBIT F and made a part hereof. Changepoint agrees to promptly provide existing APIs for the Software to Corio and use commercially reasonable efforts to develop and provide applicable APIs for the web-enabled version of the Software. + +3.3 ADDITIONAL MATERIALS. Changepoint shall use all commercially reasonable efforts to promptly provide Corio with, at a minimum, the following: (i) release notes; (ii) beta releases; (iii) contacts at beta customers, when requested by Corio and subject to the approval of the Changepoint; (iv) proactive bug notification; (v) Software patches; (vi) release documentation including technical reference manuals and &sbsp; user guides; and (vii) all applicable set-up data, data structures and other files relevant to installing and integrating the Software, but not including source code. These materials shall be provided at no cost to Corio. + +4 FEES. + +4.1 LICENSE FEES. In consideration for the licenses granted to Corio pursuant to Section 2 (except Section 2.5) of this Agreement, Corio shall pay the revenue sharing fees specified in EXHIBIT B hereto. Payment terms of such revenue sharing fees shall be as set forth in EXHIBIT B hereto. + +4.2 SOFTWARE SUPPORT AND MAINTENANCE FEES. Except with respect to Software Support and Maintenance under the distribution license granted to Corio pursuant to Section 2.5 of this Agreement, Corio shall pay to + + + + + + Changepoint a Software Support and Maintenance fee for the support services to be provided by Changepoint specified in Section 5.3 of this Agreement and EXHIBIT C attached hereto and made a part hereof, and Updates and Upgrades, according to the fees set forth in EXHIBIT B hereto. Payment terms of Software Support and Maintenance fees shall be as set forth in EXHIBIT B hereto. Software Support and Maintenance shall automatically continue during the term of this Agreement and thereafter for the remaining term of any contracts Corio has with its Customers to continue providing the Corio Services, provided that Corio continues to pay the revenue sharing fees as provided in EXHIBIT B hereto. + + 7 + + CONFIDENTIAL TREATMENT + +4.3 TAXES. All fees are exclusive of any sales taxes, Goods and Services use taxes, other use taxes and any other taxes and charges of any kind imposed by any federal, state, provincial or local governmental entity for products and services provided under this Agreement, and Corio is responsible for payment of all taxes concerning the Corio Services, excluding taxes based solely upon Changepoint's income or revenue. + +4.4 AUDIT RIGHTS. Corio shall keep true and accurate books of accounts and records for determining the amounts payable to Changepoint under this Agreement. Such books and records shall be kept for at least three (3) years following the end of the calendar month to which they pertain, and shall be open for inspection by an independent certified public accountant reasonably acceptable to Corio, and made subject to Corio's standard non-disclosure agreement, for the sole purpose of verifying the amounts payable to Changepoint under this Agreement. Such inspections may be made no more than once each calendar year, at reasonable times and upon reasonable notice. Changepoint shall bear all costs and expenses of such inspection. If any such inspection discloses a shortfall or an overpayment, the appropriate party shall promptly pay the amount of such shortfall or refund such overpayment. In addition, if any such inspection reveals an underpayment of more than five percent (5%) for the period under audit, Corio shall reimburse Changepoint for the reasonable cost of the examination. + +4.5 REPORTING. Within thirty (30) days following the end of each calendar month, Corio will submit to Changepoint a report in a form reasonably acceptable to both parties setting forth the number of Customers and Software Users which have been licensed to use the Software during the preceding month, as well as the Application Management Revenue received by Corio during the preceding month. The report shall also set forth all amounts collected by Corio pursuant to the Distribution License granted under Section 2.5 of this Agreement during the preceding month, and a calculation of all amounts due to Changepoint for such distributions by Corio during the preceding month. + +4.6 INTEREST. In the event any payment by Corio under this Agreement is not made within thirty (30) calendar days of its due date, interest on any such unpaid amount shall accrue at a rate of eighteen percent (18%) per annum, or the maximum amount permitted by law, whichever is less. + +4.7 FEE EXCEPTIONS. Changepoint agrees that for all Software Users of the Corio Services that Corio must use software products from *** . + +5 INSTALLATION SUPPORT, MAINTENANCE AND TRAINING. + +5.1 INSTALLATION. Changepoint shall provide Corio with access to full-time operations personnel at no charge to Corio as part of the installation project as described in the "Corio, Inc. + + *** The omitted material has been filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment. + + 8 + + CONFIDENTIAL TREATMENT + + Statement of Work", dated December 9, 1999 ("Statement of Work") incorporated herein by reference. + +5.2 IMPLEMENTATION. Changepoint shall provide Corio with sufficient access to Changepoint's professional services organization during the first four (4) implementations of the Software (Corio's internal implementation as defined in Section 2.3 of this Agreement plus implementation by three (3) Corio Customers) conducted by Corio and its Customers subject to the payment by Corio of Changepoint's standard professional services fee at a *** discount. Additionally, during the term of this Agreement the parties shall meet periodically to discuss Updates and Upgrades to the Software to better support Corio's and its Customers' specific application requirements, to be provided at no charge to Corio. Changepoint agrees to share its consulting implementation methodologies with Corio. Corio acknowledges that such consulting methodologies are confidential information of Changepoint and shall be used by Corio solely in connection with the + + + + + + Software when offered as part of the Corio Services. Changepoint agrees to provide Corio with proposal development materials. + +5.3 SOFTWARE SUPPORT AND MAINTENANCE. Changepoint shall provide Corio with support described in EXHIBIT C hereto, and maintenance in the form of Updates and Upgrades, subject to Corio's payment of the fees set forth in EXHIBIT B hereto. Corio shall be responsible for providing its Customers with routine technical support of the Software (Levels 1 and 2) as described in the schedule set forth in EXHIBIT C hereto. Changepoint agrees to provide Level 2 support and maintenance to Corio for the first four (4) months after the first Customer commences using the Software in connection with the Corio Services. Corio shall escalate any technical support questions or problems it is unable to answer or resolve directly to Changepoint for Changepoint to resolve as described in the schedule set forth in EXHIBIT C hereto. The support described in this Section 5.3 and EXHIBIT C hereto shall be provided to Corio, but Changepoint shall have no obligation to provide any Software Support or Maintenance services to other third parties. Subject to Corio's payment of the Software revenue sharing fees as set forth in EXHIBIT B hereto and the Software Support and Maintenance fee as provided in Section 2.5 of this Agreement, Changepoint's Software Support and Maintenance obligation shall continue after termination or expiration of this Agreement with respect to all Software Users granted access to the Software prior to termination or expiration of this Agreement for the remaining duration of each such Software Users' rights to use the Software pursuant to agreements between Corio and its Customers. Corio shall assign up to five (5) trained persons to contact Changepoint on Software Support and Maintenance matters within the scope of Changepoint's responsibility under EXHIBIT C. + +5.4 MANAGEMENT MEETINGS. The parties agree to meet either in person or via teleconference on no less than a quarterly basis to discuss, without limitation, engineering, feature-functionality and architecture-related issues as they pertain to the Software. The specific topics of the meetings will be determined on a meeting-by-meeting basis. Each party shall appoint a product manager to coordinate these meetings. Changepoint may, where appropriate, provide Corio with information relevant to future Software development efforts, including product and service roadmap, rollout strategy, and plans for future development efforts. The product managers shall be those persons set forth on EXHIBIT A hereto or as subsequently agreed by the parties. The parties also agree to discuss the amount of Application Management Revenue received by Corio for Corio Services related to the Software and, at the end of eighteen (18) months after the Effective Date, the parties agree to + + *** The omitted material has been filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment. + + 9 + + CONFIDENTIAL TREATMENT + + discuss the license fee structure set forth in EXHIBIT B attached hereto. Corio agrees to use commercially reasonable efforts to maximize Application Management Revenue received from Customers for the Corio Services. + +5.5 TRAINING. Changepoint shall provide Corio with training as reasonably requested by Corio to train Corio's technical and support personnel regarding implementation, use and operation of the Software at no charge to Corio as set forth in the Statement of Work. Upon completion of the Statement of Work, during the first year of this Agreement, Changepoint shall provide training to Corio employees at Corio's request subject to payment of Changepoint's standard training fees at a *** discount. Corio Customers may receive training directly from Changepoint at Changepoint's normal training fees. Corio shall otherwise be responsible for training its Customers regarding the Software. Throughout the term of this Agreement, Changepoint shall provide Corio with training materials and instruction manuals and the right to re-distribute these training materials and instruction manuals to its Customers of the Software solely in connection with the Corio Services. Further, the parties shall work together and cooperate to train Corio's sales force and product consultants on the Software and the alliance contemplated by this Agreement, including without limitation, how to position, sell and demonstrate the Software to potential customers. + +5.6 OTHER SERVICES. Upon Corio's request, Changepoint shall provide certain professional services, including without limitation, consulting services, to Corio or its Customers, subject to the mutual written agreement on the scope of such services, pricing and other terms and conditions. + +5.7 SALES AND MARKETING EFFORTS. The parties shall engage in joint marketing and sales activities as set forth in EXHIBIT D attached hereto and made a part hereof. Additionally, Changepoint agrees to provide Corio with marketing and sales presentation materials. During the term of this Agreement, Corio agrees to use commercially reasonable efforts to develop joint customer references or testimonials. Corio and Changepoint agree that they will promote each other as a leading PSA Application vendor and a leading Enterprise ASP, respectively, as long as the preferred relationship between the parties continues in effect + + + + + + as set forth in Section 2.10 of this Agreement. + +6 TRADEMARKS. + +6.1 RIGHT TO DISPLAY. During the term of this Agreement, each party authorizes the other party to display and use the other's trademarks, trade names and logos (collectively, the "TRADEMARKS") in connection with that party's sale, advertisement, service and promotion of the Corio Services or the Software. Each party shall indicate in all product, service, publicity and printed materials relating to the Corio Services or the Software that such trademarks are the property of the originating party. Upon termination of this Agreement, each party shall cease all display, advertising and use of all Trademarks of the other party and shall not thereafter use, advertise or display any trademark, trade name or logo which is, or any part of which is, confusingly similar to any such designation association with Corio or the Corio Services or Changepoint or any Changepoint product. + +6.2 PROMOTION MATERIALS AND ACTIVITIES. All representations of the other party's Trademarks that a party intends to use shall be exact copies of those used by the other party and shall first be submitted to the originating party for approval of design, color and use, including use &bbsp; in conjunction with advertisement, service and promotional materials, which consent shall not be unreasonably withheld or delayed. To ensure trademark quality, each party shall fully + + *** The omitted material has been filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment. + + 10 + + comply with all written guidelines provided by the other party concerning the use of the originating party's Trademarks. Each party agrees to change or correct any material or activity that the originating party determines to be inaccurate, objectionable, misleading or a misuse of the originating party's Trademarks. + +6.3 GOODWILL AND TRADEMARKS. Each party acknowledges that the other has and will have substantial goodwill in its Trademarks used in conjunction with this Agreement, and agrees it shall not do anything that could injure, diminish or depreciate the value of the goodwill associated with the Trademarks or business of the other. All goodwill associated with the use of each party's Trademarks shall enure exclusively to the owner of such Trademarks. + +6.4 CONDUCT OF BUSINESS. Each party shall conduct its business of marketing each other's products and services pursuant to this Agreement in a manner that will reflect favorably on the good name and reputation of the other party. Each party shall comply with all laws, regulations and ordinances in dealing with each other and with third parties, and in performing their respective obligations under this Agreement. Each party shall refrain from engaging in any unfair or deceptive trade practice or unethical business practice that could unfavorably reflect upon the other party and its products or services. + +7 WARRANTIES AND DISCLAIMER. + +7.1 NO CONFLICT. Each party represents and warrants to the other party that it is under no current obligation or restriction, nor will it knowingly assume any such obligation or restriction that does or would in any way interfere or conflict with, or that does or would present a conflict of interest concerning the performance to be rendered hereunder or the rights and licenses granted herein. + +7.2 INTELLECTUAL PROPERTY WARRANTY. Changepoint represents and warrants to Corio that (a) Changepoint is the sole and exclusive owner of the Software or is a licensee of the Software; (b) Changepoint has full and sufficient right, title and authority to grant the rights and/or licenses granted to Corio under this Agreement; (c) the Software does not contain any materials developed by a third party used by Changepoint except pursuant to a license agreement; and (d) the Software does not, to the best of Changepoint's knowledge and belief, infringe any patent, copyright, trade secret, trademark or other intellectual property rights of a third party. + +7.3 PRODUCT WARRANTY. Changepoint warrants that the Software will perform in substantial accordance with the Documentation, and the media on which the Software is distributed will be free from defects in materials and workmanship under normal use, for a period of one hundred twenty (120) days after delivery of the Software to Corio for Acceptance Testing (the "Warranty Period"). In addition, Changepoint warrants that during the Warranty Period the Software is free of any willfully introduced computer virus, or any other similar harmful, malicious or hidden program or data, which is designed to disable, erase, or alter the Software, or any other files, data, or software. If, during the Warranty Period, the Software does not perform in substantial compliance with the Documentation, Changepoint shall take all commercially reasonable efforts to correct the Software, or if correction of the Software is reasonably not possible, at Changepoint's option, replace such Software free of charge. Changepoint will replace any defective media returned to Changepoint during the Warranty Period. In the event any such breach of warranty can not be reasonably corrected at Changepoint's sole expense, Corio has the right to + + + + + + terminate this Agreement and receive a + + 11 + + refund of all prepaid fees, if any. The foregoing are Corio's sole and exclusive remedies for breach of the foregoing product warranty. The warranty set forth above is made to and for the benefit of Corio only. This product warranty shall not apply if: + + (a) the Software has been not properly installed and used at all times and in accordance with the Documentation; and + + (b) Corio has requested modifications, alterations or additions to the Software that cause it to deviate from the Documentation. + +7.4 PRODUCT WARRANTY - YEAR 2000 COMPLIANCE. Changepoint warrants that the Software, when used in accordance with the Documentation, is in all material respects capable upon installation of accurately processing, providing and/or receiving date data from, into and between the twentieth and twenty-first centuries, including the years 1999 and 2000, and leap year calculations; provided that all licensee and third party equipment, systems, hardware, software and firmware used in combination with the Software properly exchange date data with the Software and accurately process, provide and/or receive date data from, into and between the twentieth and twenty-first centuries, including the years 1999 and 2000, and leap year calculations. Changepoint's sole liability under this Section 7.4 is limited to use of reasonable efforts to correct or replace the defective Software with conforming Software, and if neither of the foregoing are commercially practicable, as determined by Changepoint in its reasonable discretion, Changepoint may, at its option, terminate this Agreement and refund all prepaid fees, if any. The foregoing are Corio's sole and exclusive remedies for breach of this Year 2000 warranty and Changepoint's sole obligation. + +7.5 CORIO WARRANTIES. Corio represents and warrants that (i) it has the right and power to enter into and fully perform this Agreement, (ii) in entering into this Agreement, Corio is not, to the best of its knowledge and belief, in breach of any contractual&sbsp;or other obligation to any third party, (iii) it will comply with the terms of its agreements with its Customers who purchase the right to use the Software in connection with the Corio Services; (iv) it shall not make any representations about the Software to third parties, including Customers, which it is not authorized by Changepoint in writing to make, or which are not set forth in the Documentation or other written sales, marketing and training materials provided by Changepoint intended for distribution to customers, and (v) it shall not make any representations and warranties on behalf of Changepoint unless expressly authorized by Changepoint in writing. + +7.6 DISCLAIMER. Except as expressly provided herein, CHANGEPOINT LICENSES THE SOFTWARE TO CORIO ON AN "AS IS" BASIS. NEITHER PARTY MAKES ANY OTHER WARRANTY OF ANY KIND, WHETHER EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, INCLUDING WITHOUT LIMITATION THE IMPLIED WARRANTIES OR CONDITIONS OF MERCHANTABILITY, MERCHANTABLE QUALITY, NONINFRINGEMENT AND FITNESS FOR A PARTICULAR PURPOSE. + +8 INDEMNIFICATION. + +8.1 BY CHANGEPOINT. Changepoint shall indemnify, defend and hold harmless Corio and its Customers from any and all damages, liabilities, costs and expenses (including reasonable attorneys' fees) awarded by a court against Corio or its Customers, and from settlements approved in writing by Changepoint, arising out of any claim that the Software infringes any patent, copyright, trademark or trade right secret of a third party; provided that Corio or its Customer promptly notifies Changepoint in writing of any such claim and promptly tenders + + 12 + + the control and the defense and settlement of any such claim to Changepoint at Changepoint's expense and with Changepoint's choice of counsel. Nothing in this provision shall limit Changepoint's immediate duty to defend Corio and its Customers against any such claims. Corio or its Customer shall cooperate with Changepoint, at Changepoint's expense, in defending or settling such claims and Corio or its Customer may join in defense with counsel of its choice at its own expense. If the Software is, or in the opinion of Changepoint may become, the subject of any claim of infringement or if it is adjudicatively determined that the Software infringes, then Changepoint may, at its sole option and expense, either (i) procure for Corio the right from such third party to use the Software, (ii) replace or modify the Software with other suitable and substantially equivalent products so that the Software becomes noninfringing, or if (i) and (ii) are not practicable after Changepoint has exhausted all reasonable efforts, (iii) terminate this Agreement. + +8.2 LIMITATIONS. Changepoint shall have no liability for any infringement based on (i) the use of the Software other than as set forth in the Documentation; (ii) the modification of the Software by a party other than Changepoint, when such infringement would not have occurred but for such modification, (iii) the combination of the Software with any other hardware or software product or service when such infringement + + + + + + would not have occurred using the Software by itself or (iv) Corio's copying, distribution or use of the Software after receiving Changepoint's written notice to Corio of a third party claim of infringement applicable to the Software. + + 8.3 BY CORIO. Corio shall indemnify, defend and hold harmless Changepoint and its affiliated companies from any and all damages, liabilities, costs and expenses (including reasonable attorneys' fees) awarded by a court against Changepoint and its affiliated companies, and from settlements approved in writing by Corio, for infringement of any patent, copyright, trademark or trade right secret of a third party arising out (i) use of the Software by Corio other than as set forth in the Documentation or as authorized by this Agreement; (ii) modification of the Software by Corio except as authorized by Changepoint or by this Agreement, when such infringement would not have occurred but for such unauthorized modification, (iii) Corio's copying, distribution or use of the Software after receiving Changepoint's written notice to Corio of a third party claim of infringement applicable to the Software, or (iv) a combination of the Software with other hardware or software product or service, if such infringement would not have occurred using the Software alone. Corio's obligation to indemnify Changepoint is subject to Changepoint providing Corio with prompt written notice of any such claim and promptly tendering the control and the defense and settlement of any such claim to Corio at Corio's expense and with Corio's choice of counsel. Nothing in this provision shall limit Corio's immediate duty to defend Changepoint against any such claims. Changepoint shall cooperate with Corio, at Corio's expense, in defending or settling any such claims and Changepoint may join in defense with counsel of its choice at its own expense. + +9 LIMITATION OF LIABILITY. + + EXCEPT FOR LIABILITY ARISING UNDER SECTIONS 2.7, 8, 10 AND 12.3 OF THIS AGREEMENT, IN NO EVENT SHALL EITHER PARTY'S LIABILITY ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE USE OR PERFORMANCE OF THE SOFTWARE EXCEED THE TOTAL AMOUNT ACTUALLY PAID BY CORIO HEREUNDER FOR THE TRANSACTION WHICH THE LIABILITY RELATES TO DURING THE TWELVE (12) MONTHS IMMEDIATELY PRIOR TO THE CAUSE OF + + 13 + + ACTION FIRST ARISING, EVEN IF IT IS A CONTINUOUS ONE, OR IN THE AGGREGATE, WITH RESPECT OF ALL CLAIMS ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE TOTAL AMOUNT ACTUALLY PAID BY CORIO UNDER THIS AGREEMENT TO CHANGEPOINT. EXCEPT FOR LIABILITY ARISING UNDER SECTIONS 2.7, 8, 10 AND 12.3 OF THIS AGREEMENT, IN NO EVENT SHALL EITHER PARTY HAVE ANY LIABILITY TO THE OTHER PARTY FOR ANY LOST PROFITS OR COSTS OF PROCUREMENT OF SUBSTITUTE GOODS OR SERVICES, OR FOR ANY INDIRECT, INCIDENTIAL, SPECIAL OR CONSEQUENTIAL DAMAGES HOWEVER CAUSED AND UNDER ANY THEORY OF LIABILITY AND WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE. THE PARTIES AGREE THAT THIS SECTION 9 REPRESENTS A REASONABLE ALLOCATION OF RISK. + +10 CONFIDENTIALITY. + + Each party hereby agrees that it shall not use any Confidential Information received from the other party other than as expressly permitted under the terms of the non-disclosure agreement in effect between the parties dated October 29, 1999, which is incorporated herein by reference and made a part hereof. For purposes of this Agreement, "Confidential Information" means the definition given to that term in such non-disclosure agreement. The parties agree that Changepoint's Software and Documentation (except that Documentation which this Agreement contemplates will be provided to Customers) shall be deemed Confidential Information subject to that non-disclosure agreement. The terms and conditions of this Agreement shall also be deemed Confidential Information subject to that non-disclosure agreement, but the terms of this Agreement may be disclosed by a party in connection with a significant transaction involving the merger or sale of all or a substantial part of the assets of the receiving party. Further, each party represents and warrants that their respective employees, agents, contractors or consultants that will be provided the other party's confidential information have or will have signed agreements with customary terms containing confidentiality provisions and assignment of inventions ("EMPLOYEE NDA/INVENTION AGREEMENT"). Each party covenants that during the term of this Agreement, it will continue to require all of such employees, agents, contractors or consultants to sign an Employee NDA/Invention Agreement. + +11 TERM AND TERMINATION. + +11.1 TERM. The term of this Agreement shall commence on the Effective Date and, subject to the provisions of this Agreement, shall continue in full force and effect for an initial period of five (5) years. Thereafter, this Agreement shall automatically renew for subsequent one (1) year periods unless either party provides the other party with written notification at least thirty (30) days prior to the expiration of the initial five (5) year term or any one (1) year renewal thereof of its intention to terminate this Agreement. + +11.2 TERMINATION. If either party breaches any material term or condition of this Agreement and fails to cure such breach within sixty (60) days after receiving written notice of the breach, the nonbreaching party + + + + + + may terminate this Agreement on written notice at any time following the end of such sixty (60) day period. Notwithstanding the foregoing, Corio shall have thirty (30) calendar days after receipt of written notice from Changepoint to cure any nonpayment. Compliance by the Software with the Software's Documentation after expiration of the Warranty Period shall be deemed a material condition of this Agreement. To the extent permitted by applicable law, either party may terminate this Agreement by + + 14 + + notice in writing to the other party in the event that (i) a receiver, trustee, liquidator, administrator or administrative receiver should be appointed for either party or its property, (ii) either party should become insolvent or unable to pay its debts as they mature or cease to pay its debts as they mature in the ordinary course of business, or makes an assignment for the benefit of creditors or makes a proposal to its creditors or files a notice of intention to do so, (iii) any proceedings should be commenced against either party under any bankruptcy, insolvency or debtor's relief law, and such proceedings are not vacated or set aside within fifteen (15) days from the date of commencement thereof, or (iv) either party is liquidated or dissolved (except as part of an assignment permitted under Section 14.1 of this Agreement). + +11.3 EFFECT OF TERMINATION OR EXPIRATION. The following Sections shall survive the termination or expiration of this Agreement according to the provisions of this Section 11.3: 2.1, 2,2, 2.3, 4.2, 4,5, 4.6, 4.7, 5.3, 7, 8, 9, 10, 12, 14 and Exhibits B and C. Corio's right to allow its then-existing Customers and their Software Users to use and access the Software in accordance with Sections 2.1 and 2.5 of this Agreement and all payment obligations related thereto shall survive any termination or expiration of this Agreement only for the remaining term of any contracts Corio has with its Customers to continue providing the Corio Services. Changepoint's obligation to provide Software Support and Maintenance to Corio and its Customers shall survive any termination or expiration of this Agreement for the remaining term of any contracts Corio has with such Customers to continue providing the Corio Services, provided Corio continues to make its revenue share fee payments (and Software Support and Maintenance payments under Section 2.5 of this Agreement with respect to those licenses) to Changepoint as specified in this Agreement. Notwithstanding the foregoing, the license grants in Sections 2.1 and 2.2 of this Agreement, and Changepoint's continuing obligation to provide Software Support and Maintenance under Sections 4.2 and 5.3 of this Agreement shall terminate if Changepoint terminates this Agreement for Corio's non-payment or other material breach according to the provisions of Section 11.2 of this Agreement. Sections 7, 8, 9, 10, 12 and 14 of this Agreement shall survive termination or expiration of this Agreement for any reason. Upon termination or expiration of this Agreement, each party shall otherwise return or destroy any Confidential Information of the other party provided, however, Corio may retain such Confidential Information as is necessary for Corio to continue supporting it's then-existing Customers according to the provisions of this Section 11.3. Upon termination or expiration of this Agreement, all outstanding and unpaid amounts owed by Corio to Changepoint under this Agreement shall become immediately due and payable. Section 2.3 of this Agreement shall survive for the time period provided in such section. + +12 SOURCE CODE ESCROW. + +12.1 ESCROW ACCOUNT. Within sixty (60) days of the Effective Date, Changepoint agrees to execute an escrow agreement by and among Corio, Changepoint and a mutually acceptable escrow agent (the "ESCROW AGENT"). The Escrow Agent shall require Changepoint to place in an escrow account in Toronto a copy of the source code of the Software including all Updates and Upgrades thereto, documentation and similar materials (the "SOURCE CODE"). The escrow agreement shall contain, at a minimum, the terms and conditions set forth in this Section 12. Corio shall bear all fees, expenses and other charges to open and maintain such escrow account. If a Release Condition (as defined in Section 12.2 of this Agreement) occurs and the Escrow Agent provides the Source Code to Corio under the escrow agreement, Corio agrees to hold the Source Code in strict confidence, and not to use the Source Code for any purpose other than those purposes set forth under Section 12.3 of this Agreement. This + + 15 + + source code escrow shall survive any termination or expiration of this Agreement for the remaining term of any contracts Corio has with such Customers to continue providing the Corio Services. + +12.2 RELEASE. Corio shall notify Changepoint in writing if it believes that one of the following events (the "RELEASE CONDITIONS") has occurred and that it intends to seek release of the Source Code from the escrow account: (i) Changepoint's dissolution or ceasing to do business in the normal course, except as a result or a merger, amalgamation or sale of all or a substantial part of the assets of Changepoint, or (ii) Changepoint's repeated and material breach of Changepoint's Software Support and Maintenance obligations defined under Section 5 of this Agreement and EXHIBIT C pertaining to the correction of programming + + + + + + errors and such breach is not cured within sixty (60) days of receipt of written notice thereof from Corio. If Changepoint notifies Corio in writing that it disputes whether any such event has occurred, officers of each of the parties shall negotiate for a period of ten (10) business days to attempt to resolve the dispute. At the end of such ten (10) business day period, if the parties have not resolved the dispute, the matter shall be referred to dispute resolution in the manner set forth in the escrow agreement and there shall be no release until the dispute is resolved. + +12.3 LICENSE. Upon the release of the Source Code to Corio pursuant to Section 12.2 of this Agreement, Corio shall have a royalty-free, nonexclusive, nontransferable, right and license at its head office to use and modify the Source Code to support and maintain the Software until the expiration or termination of Corio's Customers' License Agreements for the Corio Services. The object code derived from the Source Code so modified shall be subject to the same rights and restrictions on use, reproduction and disclosure that are contained in this Agreement with respect to the Software. Corio shall not distribute, sell or sublicense the Source Code or use the Source Code to develop new products or for commercial purposes other than to support Customers of the Corio Services. Subject to the licenses expressly granted in this Agreement, Changepoint shall retain all right, title and interest in and to the Source Code. Corio may disclose the Source Code to a contractor(s) for the purposes set forth in this Section 12.3 provided that such contractor is not a direct or indirect competitor of Changepoint of any affiliate of Changepoint, and provided further that such contractor(s) agrees to maintain the Source Code in strict confidence and to use the Source Code only as expressly permitted under this Section 12. Access to the Source Code shall be on a need to know only basis and shall be retained by contractors only for so long as reasonably required for the purposes set forth in this Section 12. + +13 SHARED RESOURCES. + +13.1 OPERATIONS. To the extent not provided for within the Statement of Work, Changepoint shall provide Corio with access to Changepoint operations personnel as reasonably requested by Corio, subject to availability of such personnel and payment by Corio of Changepoint's standard fees at a twenty percent (20%) discount along with payment by Corio of reasonable travel and living expenses. These Changepoint operations personnel shall work together with Corio personnel to optimize the architecture and performance of the Software in a hosted environment as well as to help Corio address changes Changepoint has made to the Software as part of an Update or Upgrade that affect Corio's ability to host the Software. Changepoint and Corio shall only commit personnel with expertise in installations, operating environments and networking functionality. + + 16 + +13.2 CONSULTING. To the extent not provided for within the Statement of Work, Changepoint shall provide Corio with access to Changepoint consulting personnel as reasonably requested by Corio, subject to availability of such personnel and payment by Corio of Changepoint's standard professional services fees at a twenty percent (20%) discount along with payment by Corio of reasonable travel and living expenses. These Changepoint consulting personnel shall initially work together with Corio personnel to develop implementation templates. + +13.3 ENGINEERING. Subject to availability of such personnel, Changepoint shall, on a case by base basis, provide Corio with reasonable access to Changepoint engineering personnel at no additional cost to Corio. Such joint engineering work may include product development, including without limitation, technical and functional application development and integration. + +13.4 OTHER. Any other services not provided for under this Agreement shall be subject to the terms of a separate agreement between the parties at a cost to Corio of twenty percent (20%) off Changepoint's standard fees for the applicable services. + +14 MISCELLANEOUS. + +14.1 ASSIGNMENT. Neither party may assign this Agreement or any rights or obligations hereunder, whether by operation of law or otherwise, without the prior written consent of the other party. Notwithstanding the foregoing, either party shall have the right to assign this Agreement in connection with the merger or acquisition of such party or the sale of all or substantially all of its assets related to this &bbsp; Agreement without such consent, except in the case where such transaction involves a direct competitor of the other party where consent of the other party will be required. Subject to the foregoing, this Agreement will bind and inure to the benefit of the parties, their respective successors and permitted assigns. Any assignment in violation of this Section 14.1 shall be null and void. + +14.2 WAIVER AND AMENDMENT. No modification, amendment or waiver of any provision of this Agreement shall be effective unless in writing and signed by the party to be charged. No failure or delay by either party in exercising any right, power, or remedy under this Agreement, except as specifically provided herein, shall operate as a waiver of any such right, power or remedy. + + + + + +14.3 CHOICE OF LAW; ARBITRATION; VENUE. This Agreement shall be governed by the laws of the State of California, USA, excluding conflict of laws provisions and excluding the 1980 United Nations Convention on Contracts for the International Sale of Goods. Any disputes arising out of this Agreement shall be resolved by binding arbitration in accordance with the then-current commercial arbitration rules of the American Arbitration Association ("RULES"). The arbitration shall be conducted by one (1) arbitrator appointed in accordance with the Rules in San Francisco County, California. A judgment upon the award may be entered in any court having jurisdiction of the parties, including without limitation the courts in San Francisco, California. The non-prevailing party in the arbitration shall pay all fees and charges of the American Arbitration Association; each party, however, shall be responsible for the payment of all fees and expenses connected with the presentation of its respective case. + +14.4 NOTICES. All notices, demands or consents required or permitted under this Agreement shall be in writing. Notice shall be considered delivered and effective on the earlier of actual receipt or when (a) personally delivered; (b) the day following transmission if sent by facsimile followed by written confirmation by registered overnight carrier or certified United + + 17 + + States or Canadian mail; or (c) one (1) day after posting when sent by registered private overnight carrier (e.g., DHL, Federal Express, etc.); or (d) five (5) days after posting when sent by certified United States or Canadian mail. Notice shall be sent to the parties at the addresses set forth on the first page of this Agreement or at such other address as shall be specified by either party to the other in writing. + +14.5 INDEPENDENT CONTRACTORS. The parties are independent contractors with respect to each other. Each party is not and shall not be deemed to be an employee, agent, partner or legal representative of the other for any purpose and shall not have any right, power or authority to create any obligation or responsibility on behalf of the other. + +14.6 SEVERABILITY. If any provision of this Agreement is held by a court of competent jurisdiction to be contrary to law, such provision shall be &sbsp; changed and interpreted so as to best accomplish the objectives of the original provision to the fullest extent allowed by law and the remaining provisions of this Agreement shall remain in full force and effect. + +14.7 FORCE MAJEURE. Neither party shall be deemed to be in breach of this agreement for any failure or delay in performance caused by reasons beyond its reasonable control, including but not limited to acts of God, earthquakes, strikes or shortages of materials. + +14.8 SUBCONTRACT. Changepoint understands and agrees that Corio shall solely direct the provision of Corio Services and may subcontract certain portions of the operations of the Corio Services to third parties at any time during the term of the Agreement. Corio shall not sublicense its distribution license rights under Section 2.5. + +14.9 BANKRUPTCY. The parties hereto agree that Corio, as a licensee of Changepoint's intellectual property, shall be afforded all of the protections afforded to a licensee under Section 365(n) of the United States Bankruptcy Code, as amended from time to time (the "CODE") so that the Trustee or Debtor in Possession, as defined in the Code, will not interfere with Corio's license with respect to the Software as provided in this Agreement, as set forth in Section 365(n) of the Code. The equivalent provisions of Canadian bankruptcy law shall also apply to Corio's rights under this Agreement. + +14.10 COMPLETE UNDERSTANDING. This Agreement including all Exhibits, the non disclosure agreement between the parties incorporated herein pursuant to Section 10 of this Agreement and the Statement of Work referenced in this Agreement and incorporated by reference herein, constitutes the final, complete and exclusive agreement between the parties with respect to the subject matter hereof, and supersedes any prior or contemporaneous agreement. + +14.11 EXPORT CONTROLS AND U.S. GOVERNMENT TRANSACTIONS. Corio agrees that it shall not export or reexport the Software or Documentation outside the United States and Canada without first obtaining permission from applicable authorities in the United States and Canada. Changepoint agrees to reasonably assist Corio in obtaining any required export permissions at no additional cost to Corio. Corio agrees not to provide the Corio Services involving the Software to the United States government without the prior written consent of Changepoint as to the form and substance of the restricted rights legends to be applied to the Software. + +14.12 COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and which, if taken together, shall be deemed to constitute one and the same instrument. + + 18 + + + + + +14.13 CONSTRUCTION. The fact that one party drafted some or all of this Agreement shall not be held against such party in any dispute regarding construction or interpretation of this Agreement or any part of this Agreement. + +IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective Date. + +CORIO, INC. CHANGEPOINT, INC. + +By: _______________________________ By: _____________________________ + +Name: _____________________________ Name: ___________________________ + +Title: ____________________________ Title: __________________________ + +Date: _____________________________ Date: ___________________________ + + 19 + + EXHIBIT A + + SOFTWARE + +1. SOFTWARE. Changepoint v 5.1 + +2. DEMONSTRATION SOFTWARE. Changepoint v 5.1 + +3. RELATIONSHIP MANAGERS. The Corio Relationship Manager shall be: ____________. The Changepoint Relationship Manager shall be: _____________. + +4. PRODUCT MANAGERS. For purposes of Section 5.4 of this Agreement, the Corio product manager shall be: _______________. The Changepoint product manager shall be:______________________. + + 20 + + CONFIDENTIAL TREATMENT + + EXHIBIT B + + PRICING + +SOFTWARE: Changepoint v 5.1 + +REVENUE SHARING FEES: + +1. Corio Customer Application Management Revenue: + + Corio to pay Changepoint *** of all Application Management Revenue from Corio Customers for use of Changepoint Software subject to the following limitations. + + A. The Corio invoice amounts used to calculate the revenues subject to this revenue share shall not include Professional Service fees or Network access fees. + + B. These Application Management Revenue fees shall begin accruing when the Corio Customer first commences making payments to Corio for the Corio Services. + + Software support and maintenance fees are included in the 10% Revenue Sharing Fee. + +PAYMENT TERMS + +Revenue Sharing Fees: Quarterly payments shall be due to receiving party, net 30 days after quarter close. Implementation or Professional Service Fees: Net 30 days from date of Changepoint invoice, which shall be issued only after successful completion of each agreed upon milestone. + +*** The omitted material has been filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment. + + 21 + + EXHIBIT C + + CUSTOMER SERVICE OUTLINE + +CORIO RESPONSIBILITIES: + +Corio will provide "Level 1 Support" and "Level 2 Support" directly to Customers and Software Users. + + + + + +Level 1 Support means the service provided in response to the initial phone call placed by a Customer or Software User which identifies and documents an error in the Software. This includes problem source identification assistance, problem analysis, problem resolution, installation planning information and preventative and corrective service information. + +Level 2 Support means the service provided to analyze or reproduce the error or to determine that the error is not reproducible. This includes problem recreation and in-depth technical analysis. + +Corio shall use all commercially reasonable efforts to promptly provide Changepoint with notification of "bugs" encountered in the Software. + +CHANGEPOINT RESPONSIBILITIES: + +Changepoint will provide "Level 3 Support" to Corio for problems that have been escalated beyond Level 2 Support. + +Changepoint will provide Level 3 Support to Corio according to the following problem priority level definitions and respective schedules: + +- - "Priority One Problems" are those in which the Software fails to perform major functions on a system-wide basis resulting in a critical business impact. Changepoint will allocate resources to address the problem within two (2) business hours. + +- - "Priority Two Problems" are those in which the functionality of the Software is substantially restricted or the problem is restricted to individual workstations. Changepoint will allocate resources to address the problem within eight (8) business hours. + +- - "Priority Three Problems" are those in which the functionality of the Software is slightly restricted. Changepoint will allocate resources to address the problem within two (2) business days. + +- - "Priority Four Problems" are minor errors that do not affect the functionality of the Software. Changepoint will allocate resources to address the problem within five (5) business days. + +Beginning February 15, 2000, Changepoint, as part of Level 3 Support will provide access 24 hours per day, 7 days per week telephone or pager support for Priority One Problems. + +Corio shall use all commercially reasonable efforts to promptly provide Changepoint with notification of "bugs" encountered in the Software. + + 22 + + EXHIBIT D + + SALES AND MARKETING COOPERATION + +The parties agree to the following non-binding sales and marketing cooperation efforts: + +1. RELATIONSHIP MANAGERS. The parties' Relationship Managers would attempt to meet at mutually agreeable times no less than every quarter to review and coordinate sales efforts and review customer response to the Software and the Corio Services, and address other topics related to this Agreement. + +2. JOINT MARKETING PLANS. During the term of this Agreement the parties agree to develop, review and submit to each other new and continuing marketing plans with respect to the Corio Services and the Software, respectively. + +3. MARKETING FUND. Within six (6) months after the Effective Date of the Agreement, Corio and Changepoint each would contribute to a marketing fund to be jointly managed by the parties to promote the sale and marketing of the Corio Services and the Software. Each party's initial amount of contribution is Fifty Thousand dollars ($50,000U.S.). + +4. PERSONNEL. Each party agrees to assign sufficient sales or marketing personnel to assist in the sales and marketing promotional activity set forth in this Exhibit D. + +5. COOPERATION AND PUBLICITY. Upon mutual agreement, Corio and Changepoint may engage in the following activities: joint publicity releases, joint marketing materials, joint marketing calls, joint conference and trade show efforts, and strategy coordination concerned with promoting the Software and the Corio Services in the commercial marketplace. + +6. INITIAL CUSTOMERS. Within sixty (60) days after the Effective Date of the Agreement, Corio agrees to use commercially reasonable efforts to obtain orders from two (2) Customers for the Corio Services which include access to the Software. + +7. SALES INCENTIVES. During the period of their preferred relationship, the parties will provide their internal and external sales personnel sufficient incentives designed to actively promote and encourage cross selling of the Corio Services and the Software, respectively. + + 23 + + + + + + EXHIBIT E + + CUSTOMER LICENSE TERMS AND CONDITIONS + +1. THIRD-PARTY BENEFICIARY. Changepoint, Inc. ("Changepoint") shall be a direct and intended third-party beneficiary to this Agreement. + +2. AUDIT. Changepoint's independent certified auditors will have the right, exercisable not more than once every twelve (12) months, to inspect upon reasonable notice and during End User's regular business hours, End User's relevant records to verify End User's compliance with the terms of this Agreement and/or Changepoint's compliance with its obligations to Changepoint. + +3. NO ADDITIONAL WARRANTY. CORIO MAY PROVIDE THE SOFTWARE TO END USERS WITH ONLY THOSE WARRANTIES GIVEN BY CHANGEPOINT TO CORIO IN THE ATTACHED AGREEMENT. ALL OTHER CONDITIONS OR WARRANTIES, WHETHER EXPRESS, IMPLIED, OR STATUTORY, ARE DISCLAIMED, INCLUDING WITHOUT LIMITATION, ALL IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NONINFRINGEMENT. CORIO SHALL BE SOLELY RESPONSIBLE FOR ANY WARRANTIES IT MAY GIVE TO END USERS WHICH ARE IN ADDITION TO OR OTHERWISE DIFFERENT FROM THOSE WARRANTIES GIVEN BY CHANGEPOINT TO CORIO IN THE ATTACHED AGREEMENT. + +4. LIMITATION OF LIABILITY. IN NO EVENT WILL CHANGEPOINT BE LIABLE UNDER SUCH AGREEMENT FOR ANY LOSS OF PROFITS, LOSS OF USE, BUSINESS INTERRUPTION, LOSS OF DATA, COST OF COVER OR INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY KIND IN CONNECTION WITH OR ARISING OUT OF THE FURNISHING, PERFORMANCE OR USE OF THE SOFTWARE OR SERVICES PERFORMED HEREUNDER, WHETHER ALLEGED AS A BREACH OF CONTRACT OR TORTIOUS CONDUCT, INCLUDING NEGLIGENCE, EVEN IF CHANGEPOINT HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. IN ADDITION, CHANGEPOINT WILL NOT BE LIABLE FOR ANY DAMAGES CAUSED BY DELAY IN DELIVERY OR FURNISHING THE SOFTWARE OR SAID SERVICES. CHANGEPOINT'S, LIABILITY UNDER SUCH AGREEMENT FOR DIRECT, INDIRECT, SPECIAL, INCIDENTAL AND/OR CONSEQUENTIAL DAMAGES OF ANY KIND, INCLUDING, WITHOUT LIMITATION, RESTITUTION, WILL NOT, IN ANY EVENT, EXCEED THE FEE PAID BY END USER TO CHANGEPOINT UNDER SUCH AGREEMENT. + +5. SOFTWARE USER LIMITS. The Software may only be used by the number of Software Users licensed under Customer agreements with Corio for the Software as part of the Corio Services. + +6. RESTRICTIONS ON END USE. Software Users shall not reverse engineer the Software and shall maintain the Software in confidence. + + 24 + + CONFIDENTIAL TREATMENT + + EXHIBIT F + + SCHEDULE FOR WEB-ENABLED SOFTWARE + +LEGEND + + [CLOCK] Feature shall exist in v5.2 of the "Software" (shipping approximately Dec 15, 1999) + + Q1/Q2 Feature planned for Q1 or Q2 calendar year 2000 + +- ------------------------------------------------------------------------------------ FEATURE DESCRIPTION BROWSER CLIENT - ------------------- -------------- - ------------------------------------------------------------------------------------ MY FAVOURITES - ------------- - ------------------------------------------------------------------------------------ Home Page - ------------------------------------------------------------------------------------ Reminders *** - ------------------------------------------------------------------------------------ Workflow *** - ------------------------------------------------------------------------------------ Approve/Reject Time *** - ------------------------------------------------------------------------------------ Approve/Reject Expense Reports *** - ------------------------------------------------------------------------------------ Approve/Reject Invoices *** - ------------------------------------------------------------------------------------ Scheduled Activities *** - ------------------------------------------------------------------------------------ Pipeline Report *** - ------------------------------------------------------------------------------------ My Contacts - ------------------------------------------------------------------------------------ View *** - ------------------------------------------------------------------------------------ Maintain List *** - ------------------------------------------------------------------------------------ Projects - ------------------------------------------------------------------------------------ View *** - ------------------------------------------------------------------------------------ + + + + + + Create *** - ------------------------------------------------------------------------------------ Edit *** - ------------------------------------------------------------------------------------ Delete *** - ------------------------------------------------------------------------------------ Create Attachment *** - ------------------------------------------------------------------------------------ View Attachment *** - ------------------------------------------------------------------------------------ Delete Attachment &bbsp; *** - ------------------------------------------------------------------------------------ Change Status *** - ------------------------------------------------------------------------------------ Gantt Planning Tool *** - ------------------------------------------------------------------------------------ Reassign Project *** - ------------------------------------------------------------------------------------ Project Rollup *** - ------------------------------------------------------------------------------------ MSP Integration *** - ------------------------------------------------------------------------------------ Tasks - ------------------------------------------------------------------------------------ View *** - ------------------------------------------------------------------------------------ + +*** The omitted material has been filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment. + + CONFIDENTIAL TREATMENT + + Create *** - ------------------------------------------------------------------------------------ Edit *** - ------------------------------------------------------------------------------------ Delete *** - ------------------------------------------------------------------------------------ Reorder *** - ------------------------------------------------------------------------------------ Create Attachment *** - ------------------------------------------------------------------------------------ View Attachment *** - ------------------------------------------------------------------------------------ Delete Attachment *** - ------------------------------------------------------------------------------------ Update Billing Role *** - ------------------------------------------------------------------------------------ Status Task *** - ------------------------------------------------------------------------------------ Baseline *** - ------------------------------------------------------------------------------------ Create Sub-Project *** - ------------------------------------------------------------------------------------ Timesheet - ------------------------------------------------------------------------------------ View Time *** - ------------------------------------------------------------------------------------ Book Time *** - ------------------------------------------------------------------------------------ Status Tasks *** - ------------------------------------------------------------------------------------ Central Time Booking *** - ------------------------------------------------------------------------------------ Expense sheet - ------------------------------------------------------------------------------------ View Expenses *** - ------------------------------------------------------------------------------------ + +*** The omitted material has been filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment. + + 25 + + CONFIDENTIAL TREATMENT + +- ------------------------------------------------------------------------------------ Enter Expenses *** - ------------------------------------------------------------------------------------ Create Expense Report *** - ------------------------------------------------------------------------------------ Central Expense Submission *** - ------------------------------------------------------------------------------------ Team Folders - ------------------------------------------------------------------------------------ View *** - ------------------------------------------------------------------------------------ Create New Items *** - ------------------------------------------------------------------------------------ Edit Items *** + + + + + +- ------------------------------------------------------------------------------------ Create New Team Folders *** - ------------------------------------------------------------------------------------ Availability - ------------------------------------------------------------------------------------ View Calendar *** - ------------------------------------------------------------------------------------ Update Calendar *** - ------------------------------------------------------------------------------------ DIRECTORY - --------- - ------------------------------------------------------------------------------------ Companies - ------------------------------------------------------------------------------------ View *** - ------------------------------------------------------------------------------------ Create *** - ------------------------------------------------------------------------------------ Edit *** - ------------------------------------------------------------------------------------ Delete *** - ------------------------------------------------------------------------------------ Create Attachment *** - ------------------------------------------------------------------------------------ View Attachment *** - ------------------------------------------------------------------------------------ Delete Attachment *** - ------------------------------------------------------------------------------------ Contacts - ------------------------------------------------------------------------------------ View *** - ------------------------------------------------------------------------------------ Create *** - ------------------------------------------------------------------------------------ Edit *** - ------------------------------------------------------------------------------------ Delete *** - ------------------------------------------------------------------------------------ Resource - ------------------------------------------------------------------------------------ View *** - ------------------------------------------------------------------------------------ Group Homepages *** - ------------------------------------------------------------------------------------ Personal Options *** - ------------------------------------------------------------------------------------ Product - ------------------------------------------------------------------------------------ View *** - ------------------------------------------------------------------------------------ Create *** - ------------------------------------------------------------------------------------ Edit *** - ------------------------------------------------------------------------------------ Delete *** - ------------------------------------------------------------------------------------ + +*** The omitted material has been filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment. + + CONFIDENTIAL TREATMENT + +MARKETING - --------- - ------------------------------------------------------------------------------------ Prospects - ------------------------------------------------------------------------------------ View *** - ------------------------------------------------------------------------------------ Create *** - ------------------------------------------------------------------------------------ Edit *** - ------------------------------------------------------------------------------------ Import from file *** - ------------------------------------------------------------------------------------ Delete *** - ------------------------------------------------------------------------------------ Leads - ------------------------------------------------------------------------------------ View *** - ------------------------------------------------------------------------------------ Create *** - ------------------------------------------------------------------------------------ Edit *** - ------------------------------------------------------------------------------------ Delete *** - ------------------------------------------------------------------------------------ Campaigns - ------------------------------------------------------------------------------------ View *** - ------------------------------------------------------------------------------------ Create &bbsp; *** - ------------------------------------------------------------------------------------ Edit *** + + + + + +- ------------------------------------------------------------------------------------ Delete *** - ------------------------------------------------------------------------------------ Competition - ------------------------------------------------------------------------------------ View *** - ------------------------------------------------------------------------------------ Create *** - ------------------------------------------------------------------------------------ + +*** The omitted material has been filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment. + + 26 + + CONFIDENTIAL TREATMENT + +- ------------------------------------------------------------------------------------ Edit *** - ------------------------------------------------------------------------------------ Delete *** - ------------------------------------------------------------------------------------ Corporate News - ------------------------------------------------------------------------------------ View *** - ------------------------------------------------------------------------------------ Create *** - ------------------------------------------------------------------------------------ Edit *** - ------------------------------------------------------------------------------------ Delete *** - ------------------------------------------------------------------------------------ SALES - ----- - ------------------------------------------------------------------------------------ Opportunities - ------------------------------------------------------------------------------------ View *** - ------------------------------------------------------------------------------------ Create *** - ------------------------------------------------------------------------------------ Edit &sbsp; *** - ------------------------------------------------------------------------------------ Delete *** - ------------------------------------------------------------------------------------ Create Attachment *** - ------------------------------------------------------------------------------------ View Attachment *** - ------------------------------------------------------------------------------------ Delete Attachment *** - ------------------------------------------------------------------------------------ Activities - ------------------------------------------------------------------------------------ View *** - ------------------------------------------------------------------------------------ Create *** - ------------------------------------------------------------------------------------ Edit *** - ------------------------------------------------------------------------------------ Delete *** - ------------------------------------------------------------------------------------ Print *** - ------------------------------------------------------------------------------------ Mark Complete *** - ------------------------------------------------------------------------------------ Customize *** - ------------------------------------------------------------------------------------ Sales Management - ------------------------------------------------------------------------------------ CLIENT SERVICES - --------------- - ------------------------------------------------------------------------------------ Engagements - ------------------------------------------------------------------------------------ View *** - ------------------------------------------------------------------------------------ Create *** - ------------------------------------------------------------------------------------ Edit *** - ------------------------------------------------------------------------------------ Delete *** - ------------------------------------------------------------------------------------ Create Attachment &bbsp; *** - ------------------------------------------------------------------------------------ View Attachment *** - ------------------------------------------------------------------------------------ Delete Attachment *** - ------------------------------------------------------------------------------------ + +*** The omitted material has been filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment. + + + + + + CONFIDENTIAL TREATEMNT + + Resource Scheduling *** - ------------------------------------------------------------------------------------ Resource Search *** - ------------------------------------------------------------------------------------ Skill Search *** - ------------------------------------------------------------------------------------ SUPPORT DESK - ------------ - ------------------------------------------------------------------------------------ Support Customers - ------------------------------------------------------------------------------------ View *** - ------------------------------------------------------------------------------------ Calls - ------------------------------------------------------------------------------------ View *** - ------------------------------------------------------------------------------------ Create *** - ------------------------------------------------------------------------------------ Edit *** - ------------------------------------------------------------------------------------ Book Time *** - ------------------------------------------------------------------------------------ Knowledge Base - ------------------------------------------------------------------------------------ View *** - ------------------------------------------------------------------------------------ Create *** - ------------------------------------------------------------------------------------ Edit *** - ------------------------------------------------------------------------------------ Search *** - ------------------------------------------------------------------------------------ Assets - ------------------------------------------------------------------------------------ View *** - ------------------------------------------------------------------------------------ Create *** - ------------------------------------------------------------------------------------ Edit *** - ------------------------------------------------------------------------------------ + +*** The omitted material has been filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment. + + 27 + + CONFIDENTIAL TREATMENT + +- ------------------------------------------------------------------------------------ FINANCE - ------- - ------------------------------------------------------------------------------------ Invoices - ------------------------------------------------------------------------------------ View *** - ------------------------------------------------------------------------------------ Create *** - ------------------------------------------------------------------------------------ Edit *** - ------------------------------------------------------------------------------------ Delete *** - ------------------------------------------------------------------------------------ Submit for Approval *** - ------------------------------------------------------------------------------------ Print *** - ------------------------------------------------------------------------------------ Approve/Reject Invoice *** - ------------------------------------------------------------------------------------ Create Credit Note *** - ------------------------------------------------------------------------------------ Edit Credit Note *** - ------------------------------------------------------------------------------------ Record Payment *** - ------------------------------------------------------------------------------------ Archive Invoice *** - ------------------------------------------------------------------------------------ Expense Advance - ------------------------------------------------------------------------------------ Create *** - ------------------------------------------------------------------------------------ Delete *** - ------------------------------------------------------------------------------------ Currency Exchange - ------------------------------------------------------------------------------------ Add Exchange Rate *** + + + + + +- ------------------------------------------------------------------------------------ Modify Exchange Rate *** - ------------------------------------------------------------------------------------ Time - ------------------------------------------------------------------------------------ De-Submit Time *** - ------------------------------------------------------------------------------------ Transfer Time/Expense *** - ------------------------------------------------------------------------------------ REPORTING - --------- - ------------------------------------------------------------------------------------ Report Viewing *** - ------------------------------------------------------------------------------------ Report Favorites *** - ------------------------------------------------------------------------------------ OLAP Analysis Tools *** - ------------------------------------------------------------------------------------ + +*** The omitted material has been filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment. + + 28 + + EXHIBIT G + + CHANGEPOINT SOFTWARE + + LICENSE AND MAINTENANCE AGREEMENT (U.S.A. SS) + + Between: and: ------------------------------------------------------------------------------------- CHANGEPOINT INC. CORIO, INC. + + 1595 Sixteenth Avenue 700 Bay Road Suite 700 Suite 210 Richmond Hill, Ontario Redwood City, CA 94063 Canada U.S.A. L4B 3N9 ------------------------------------------------------------------------------------- (hereinafter referred to as "Changepoint") (hereinafter referred to as "Customer") + +Contract No. _______________ + +This Agreement sets out the terms pursuant to which Customer may use the Licensed Materials (as that term is hereinafter defined). This Agreement also sets out the terms pursuant to which Changepoint will provide Implementation Services and Maintenance Services to Customer. + +The "CHANGEPOINT Software License and Maintenance Agreement - Terms and Conditions" on the following pages of this document and the attached Appendix A form an integral part of this Agreement. + +The parties by their authorized representatives and intending to be legally bound have entered into this Agreement as of the ___ day of _____, 1999 (the "Effective Date"). + +CHANGEPOINT INC. CORIO, INC. + +Signature ________________________ Signature _____________________ + +Name _____________________________ Name __________________________ + +Title ____________________________ Title _________________________ + + 29 + + CHANGEPOINT SOFTWARE + + LICENSE AND MAINTENANCE AGREEMENT - + + TERMS AND CONDITIONS + + ARTICLE 1 - INTERPRETATION + +1.1 DEFINITIONS + + In this Agreement and in Appendix A the following terms shall have the respective meanings ascribed to them as follows: + +(A) "AFFILIATE" means with respect to any person, any other person directly or indirectly controlling, controlled by, or under common control of such person. "Control" as used here means the legal, beneficial or equitable ownership, directly or indirectly, of more than 50% of the aggregate of all voting interests in such entity. + +(B) "BUSINESS DAYS" means Monday through Friday excluding any day which is + + + + + + a nationally observed holiday in both the United States of America and Canada. + +(C) "BUSINESS HOURS" means 8:00 a.m. - 7:00 p.m. Eastern Time on Business Days. + +(D) "CLIENT ACCESS LICENSE" means a Software License which authorizes Customer to install a Component of the Licensed Software on a single client device (e.g. - computer workstation). + +(E) "COMPONENTS" mean the components of the CHANGEPOINT Software referred to in Appendix A. + +(F) "CONFIDENTIAL INFORMATION" means (i) all information of either party or its affiliates or of third persons to whom a party owes a duty of confidence that is marked confidential, restricted or proprietary or that may reasonably be considered as confidential from its nature or from the circumstances surrounding its disclosure; and (ii) the Licensed Materials. + +(G) "DOCUMENTATION" means in relation to the Licensed Software, the user documentation made generally available by Changepoint to customers which have been granted a license from Changepoint to use the Licensed Software. + +(H) "INSTALLATION FEES" has the meaning given to it in Section 4.2. + +(I) "INSTALLATION SERVICES" has the meaning given to it in Section 3.2. + +(J) "INTELLECTUAL PROPERTY RIGHTS" includes all worldwide intellectual and industrial property rights including all rights in each country to copyrights, trademarks, service marks, patents, inventions, industrial designs, trade secrets, trade dress and all other proprietary rights. + +(K) "LICENSE" means Customer's license to use the Licensed Materials described in Article 2 and in Appendix A. + +(L) "LICENSE FEES" means the license fees to be paid by Customer to Changepoint which are described in Section 4.1. + +(M) "LICENSED MATERIALS" means the Licensed Software and Documentation and includes Maintenance Releases and Enable Codes which Changepoint may from time to time provide to Customer hereunder. + +(N) "LICENSED SOFTWARE" means the Components of the CHANGEPOINT Software in object code format licensed to Customer hereunder and described in Appendix A and such additional Components of the CHANGEPOINT Software which Customer and Changepoint hereinafter agree shall be added to Appendix A. + +(O) "MAINTENANCE" has the meaning given to it in Section 4.2. + +(P) "MAINTENANCE FEES" has the meaning given to it in Section 4.2. + +(Q) "MAINTENANCE RELEASE" means new versions and releases of the Licensed Software which Changepoint makes generally available to its customers who have contracted with it to receive Maintenance Service for the Licensed Software. + +(R) "MAINTENANCE SERVICES" means the services described in Section 7.2. + +(S) "SOFTWARE LICENSES" means the utilization licenses and associated restrictions with respect to the Licensed Software granted to Customer hereunder which are set forth in Appendix A. + +(T) "WARRANTY PERIOD" means the period as set out in Appendix A. + +(U) "WARRANTY SUPPORT" means the warranty support set forth in Section 6.1(a). + + ARTICLE 2 - LICENSE + +2.1 LICENSE + +(a) Subject to the provisions of this Agreement including the provisions of Article 8, Changepoint hereby grants to Customer and Customer hereby accepts from Changepoint the perpetual, personal, non-transferable and non-exclusive Software Licenses to use the Licensed Software for Customer's internal business purposes. Customer may also make a reasonable number of back-up copies, but not to exceed two (2) copies, of the Licensed Software for use as part of Customer's disaster recovery plan. + +(b) The Licensed Materials may be used only as set out in this Agreement and Customer agrees not to make any copies (whether in electronic or any other form) or use thereof other than as expressly permitted herein or by Changepoint in writing in advance, even if it is technically feasible to do so. Without limiting the generality of the foregoing, Customer agrees to use the Licensed Software only to the extent authorized by the Software Licenses. + +(c) Customer's License to use the Licensed Materials shall commence on the Effective Date. + +2.2 DOCUMENTATION + + 30 + + + + + + The Documentation may be used by Customer at Customer sites for the purpose of assisting Customer in using the Licensed Software for the internal business purposes of Customer. Changepoint agrees to deliver one copy of the Documentation to Customer in either printed or electronic form. Documentation provided in machine readable form may be printed and used solely for the internal business purposes of Customer. No other reproduction or use of the Documentation is permitted. + +2.3 THIRD PARTY USERS + + For the purpose of operating Customer's business, the parties intend that certain unrelated third parties with whom Customer has a business relationship such as a supplier or customer and the employees of such third person (hereunder "Business Third Parties"), will have limited right to use certain Components of the Licensed Software solely for the purpose of providing services to Customer. All such persons must execute an agreement in writing with Customer to maintain the Confidential Information in confidence and to use the Licensed Materials only as permitted. Customer agrees to strictly enforce the provisions of such non-disclosure agreements set forth in this Section 2.3 and all other provisions of this Agreement as applicable to any and all uses of the Licensed Materials. + + ARTICLE 3 - DELIVERY AND INSTALLATION + +3.1 DELIVERY OF LICENSED MATERIALS + + Changepoint agrees to deliver to Customer one (1) copy of the most current release and version of the Licensed Materials. The Documentation will be provided solely in the English language. + +3.2 INSTALLATION SERVICES + + Changepoint agrees to provide the installation services (the "Installation Services") described in Appendix A. + +3.3 ENABLE CODES + + To enable Customer to install the Licensed Software, Changepoint will provide Customer with information or data which are intended to enable the Licensed Software to be used ( the "Enable Codes"). The Enable Codes are designed to enable Customer to use the Licensed Software in accordance with the number of Software Licenses acquired hereunder. Customer acknowledges and agrees that additional Enable Codes will need to be obtained from Changepoint if Customer acquires one or more additional Software Licenses from Changepoint. Customer agrees not to, and shall cause all users not to, modify, adapt or create derivative works of any Enable Codes provided, develop or have developed any Enable Codes, or use any Enable Codes other than those provided by Changepoint. + + ARTICLE 4 - PRICE AND PAYMENT TERMS + +4.1 LICENSE FEES + + Customer shall pay to Changepoint the license fees described in Appendix A (the "License Fees"). The License Fees shall be due and paid as provided for in Appendix A. + +4.2 MAINTENANCE AND INSTALLATION FEES + + Customer agrees to pay to Changepoint the Maintenance Fees and the Installation Fees set out in Appendix A. + +4.3 TAXES AND INTEREST + +(a) Customer shall pay (and Changepoint shall have no liability for), any taxes, tariffs, duties and other charges or assessments imposed or levied by any government or governmental agency in connection with this Agreement, including, without limitation, any federal, provincial, state and local sales, use, goods and services, value-added and personal property taxes on any payments due Changepoint in connection with the Licensed Materials and/or Maintenance Services and other services provided hereunder, excluding only income taxes payable by Changepoint. + +(b) All overdue payments shall bear interest at a rate of 12% per annum on the amounts outstanding from the time such amounts become due until payment is received by Changepoint. + + ARTICLE 5 - PROPRIETARY RIGHTS AND CONFIDENTIAL INFORMATION + +5.1 TITLE TO LICENSED MATERIALS + + Customer acknowledges and agrees that Changepoint or licensors of Changepoint shall retain all right, title and interest in and to the Licensed Materials and all copies thereof, including, without limitation, the Intellectual Property Rights therein, and that nothing herein transfers or conveys to Customer any ownership right, title or interest in or to the Licensed Materials or to any copy thereof or any license right with respect to same not expressly granted herein, including, without limitation, with respect to the Intellectual Property Rights therein. + +5.2 CONFIDENTIAL INFORMATION + +(a) Each party agrees to maintain the confidentiality of the Confidential Information of the other party and to use same only as expressly authorized herein. Each party shall safeguard and maintain the other party's Confidential + + + + + +Information in strict confidence and shall not disclose, provide, or make the Confidential Information or any part thereof available in any form or medium to any person except to such party's employees, and to contractors and consultants of + + 31 + +such party who have executed an agreement in writing to protect such Confidential Information and who have a need to access such Confidential Information hereunder. + +(b) The provisions of Section 5.2(a) shall not apply to any information which: (i) was at the time of disclosure to a party, in the public domain, (ii) after disclosure to a party becomes part of the public domain through no fault of the receiving party, (iii) was in the possession of the receiving party prior to the time of disclosure to it without any obligation of confidence or any breach of confidence, (iv) was received after disclosure to a party from a third party who had a lawful right to disclose such information to it, (v) was independently developed by a party without reference to the confidential information of the other party or (vi) was ordered to be disclosed by a court, administrative agency, or other governmental body with jurisdiction over the parties hereto, provided that the ordered party will first have provided the disclosing party with prompt written notice of such required disclosure and will take reasonable steps to allow the disclosing party to seek a protective order with respect to the confidentiality of the information required to be disclosed. Further, the ordered party will promptly cooperate with and assist the disclosing party in connection with obtaining such protective order. + +5.3 PROTECTION OF PROPRIETARY RIGHTS + +(a) Customer shall not remove any proprietary, copyright, patent, trade mark, design right, trade secret, or any other proprietary rights legends from the Licensed Materials. + +(b) Customer agrees not to disassemble, decompile, translate or convert into human readable form or into another computer language, reconstruct or decrypt, or reverse engineer, all or any part of the Licensed Materials in accordance with law. Further, Customer shall not write or develop any derivative works or computer programs based upon any part of the Licensed Materials. + +5.4 EXPORT OF SOFTWARE + + Customer will not export or re-export the Licensed Materials or any copies thereof, either directly or indirectly, outside of the country in which such materials are delivered to Customer except in compliance with all applicable laws, ordinances and regulations. Customer shall have the exclusive obligation to ensure that any export of the Licensed Materials is in compliance with all applicable export laws and the laws of any foreign country. + + ARTICLE 6 - WARRANTIES OF CHANGEPOINT + +6.1 WARRANTY AND DISCLAIMERS + +(a) Changepoint warrants that during the Warranty Period: (i) the Licensed Software will conform substantially to the description thereof in the Documentation, and (ii) the media upon which the Licensed Software and Documentation are provided will be free from defects in materials and workmanship. + +(b) Changepoint warrants that the Licensed Software shall be able to accurately process date data (including but not limited to, calculating, comparing, and sequencing) from, into and between the 20th and 21st century (the "Y2K Warranty"). However, such warranty does not apply to any failures to process date data that result from any software other than the Licensed Software or hardware or which relate to accepting data from any system not supplied by Changepoint. For greater clarity the Y2K Warranty shall only apply if Customer uses the Software in accordance with the Documentation. + +(c) Customer's exclusive remedy and Changepoint's sole obligation with respect to the breach of any of the foregoing warranties is for Changepoint to (i) make commercially reasonable efforts to correct or provide Customer with a workaround for the failure of the Licensed Software to conform substantially to the description thereof in the Documentation or to comply with the Y2K Warranty, as the case may be, or, at Changepoint's sole option, provide Customer with a refund for the License Fees paid with respect to such Licensed Software, and (ii) provide Customer with replacement media in the event there are defects in materials or workmanship in the media upon which the Licensed Software and Documentation are provided if the media is returned to Changepoint within the Warranty Period. + +(d) OTHER THAN THE WARRANTIES EXPRESSLY SET FORTH IN SECTION 6.1(A) AND 6.1(B), CHANGEPOINT EXPRESSLY DISCLAIMS ANY AND ALL REPRESENTATIONS, WARRANTIES AND CONDITIONS OF ANY KIND OR NATURE, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION, REPRESENTATIONS, WARRANTIES AND CONDITIONS OF QUALITY, PERFORMANCE, RESULTS, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE, AND THOSE ARISING BY STATUTE OR OTHERWISE IN LAW OR FROM A COURSE OF DEALING OR USE OF TRADE. CHANGEPOINT DOES NOT REPRESENT OR WARRANT THAT (I) THE LICENSED MATERIALS WILL MEET CUSTOMER'S BUSINESS REQUIREMENTS, (II) THE OPERATION OF THE LICENSED SOFTWARE WILL BE ERROR-FREE OR UNINTERRUPTED OR (III) THAT ALL PROGRAMMING ERRORS CAN BE CORRECTED. + +(e) Customer is responsible for taking precautionary measures to prevent the loss or destruction of customer data and databases such as, for example, making regular backups and verifying the results obtained from using the + + + + + +Licensed Materials, and Changepoint shall have no obligations or liability whatsoever with respect to any such loss or destruction. + +6.2 LIMIT OF LIABILITY + +(a) FOR ANY BREACH OR DEFAULT BY CHANGEPOINT OF ANY OF THE PROVISIONS OF THIS AGREEMENT, OR WITH RESPECT TO ANY CLAIM ARISING HEREFROM OR RELATED HERETO, EXCEPT FOR ANY CLAIM FOR BREACH OF SECTION 5.2 (UNAUTHORIZED DISCLOSURE OF CONFIDENTIAL INFORMATION), OR FOR BREACH OF SECTION 6.4(A) (INTELLECTUAL PROPERTY INDEMNITY), CHANGEPOINT'S ENTIRE LIABILITY, REGARDLESS OF THE FORM OF ACTION, WHETHER BASED ON CONTRACT OR TORT, INCLUDING + + 32 + +NEGLIGENCE, SHALL IN NO EVENT EXCEED (I) THE AMOUNT PAID BY CUSTOMER HEREUNDER FOR THE LICENSED MATERIALS, (II) THE AMOUNT PAID BY CUSTOMER FOR THE MAINTENANCE SERVICE THAT IS THE SUBJECT OF THE CLAIM IF THE CLAIM RELATES TO A BREACH OR DEFAULT BY CHANGEPOINT OF THE PROVISIONS OF ARTICLE 7, (III) THE AMOUNT PAID BY CUSTOMER FOR THE INSTALLATION SERVICE THAT IS THE SUBJECT OF THE CLAIM IF THE CLAIM RELATES TO A BREACH OR DEFAULT BY CHANGEPOINT OF THE PROVISIONS OF THIS AGREEMENT PERTAINING TO INSTALLATION SERVICE, OR (IV) IN THE AGGREGATE WITH RESPECT TO ALL CLAIMS UNDER OR RELATED TO THIS AGREEMENT, THE AMOUNT PAID BY CUSTOMER UNDER THIS AGREEMENT. + +(b) IN NO EVENT WILL CHANGEPOINT BE LIABLE FOR SPECIAL, INCIDENTAL, INDIRECT, OR CONSEQUENTIAL LOSS OR DAMAGE, LOST BUSINESS REVENUE, LOSS OF PROFITS, LOSS OF DATA, FAILURE TO REALIZE EXPECTED PROFITS OR SAVINGS OR ANY CLAIM AGAINST CUSTOMER BY ANY OTHER PERSON (EVEN IF CHANGEPOINT HAS BEEN ADVISED OF THE POSSIBILITY OF ANY SUCH LOSS OR DAMAGE). + +(c) CHANGEPOINT SHALL BE LIABLE TO CUSTOMER AS EXPRESSLY PROVIDED IN THIS AGREEMENT BUT SHALL HAVE NO OTHER OBLIGATION, DUTY, OR LIABILITY WHATSOEVER IN CONTRACT, TORT OR OTHERWISE TO CUSTOMER INCLUDING ANY LIABILITY FOR NEGLIGENCE. THE LIMITATIONS, EXCLUSIONS AND DISCLAIMERS IN THIS AGREEMENT SHALL APPLY IRRESPECTIVE OF THE NATURE OF THE CAUSE OF ACTION, DEMAND, OR ACTION BY CUSTOMER, INCLUDING BUT NOT LIMITED TO BREACH OF CONTRACT, NEGLIGENCE, TORT, OR ANY OTHER LEGAL THEORY AND SHALL SURVIVE A FUNDAMENTAL BREACH OR BREACHES OR THE FAILURE OF THE ESSENTIAL PURPOSE OF THIS AGREEMENT OR OF ANY REMEDY CONTAINED HEREIN. + +6.3 LIMITATION PERIOD + + Neither party may bring an action, regardless of form, arising out of or related to this Agreement (other than to recover License Fees or Maintenance Fees) more than two (2) years after the cause of action has arisen or the date of discovery of such cause, whichever is later. + +6.4 INTELLECTUAL PROPERTY CLAIMS + +(a) Changepoint will defend or (at its option) settle, any claim or action brought against Customer to the extent that it is based on a claim that the Licensed Materials infringe any copyright, patent, trade secret or trademark enforceable in the United States of America of any third person (an "Infringement Claim") and will indemnify Customer against damages and costs awarded against Customer by a court of competent jurisdiction by final order from which no appeal is taken or the time for appealing has expired, provided that Customer notifies Changepoint promptly in writing of same, and provided further that Customer permits Changepoint to control the litigation and to defend, compromise or settle the claim and provides all available information, assistance and authority to enable Changepoint to do so. Changepoint shall not be liable to reimburse Customer for any compromise or settlement made by Customer without Changepoint's prior written consent, or for any legal fees or expenses incurred by Customer in connection with such claim. Customer shall have no authority to settle any claim on behalf of Changepoint. + +(b) Should the Licensed Materials or any of them become, or in Changepoint's sole opinion be likely to become, the subject of a claim of infringement, misappropriation, or violation of an Intellectual Property Right (an "Infringement Claim") Changepoint may (i) procure for Customer, at no cost to Customer the right to continue to use the Licensed Materials which are the subject of the Infringement Claim (ii) replace or modify the Licensed Materials or part thereof subject to such Infringement Claim with software or documentation of at least comparable functionality, at no cost to Customer, or (iii) if neither of the forgoing alternatives are reasonably practical in Changepoint's sole judgement, remove the component that is the subject of the Infringement Claim or any or all other parts of the Licensed Materials and refund to Customer the License Fees paid by Customer for the part removed as depreciated on a straight line five (5) year basis from the date of delivery of the part to Customer. + +(c) Notwithstanding the foregoing, Changepoint shall have no liability for any claim that is based on (i) the use of other than the latest release and version of the Licensed Materials, if such infringement could have been avoided by the use of the latest version and release and such version or release had been made available to Customer, (ii) the use or combination of the Licensed Materials with software, hardware or any other product not provided by Changepoint, or (iii) any modification to the Licensed Materials or use of the Licensed Materials other than as expressly authorized herein or as expressly described or recommended in writing by Changepoint. + +(d) This Section 6.4 states the entire liability of Changepoint and Customer's sole remedies with respect to any Infringement Claim. + + ARTICLE 7 - MAINTENANCE AND ENHANCED MAINTENANCE SERVICE + + + + + +7.1 TERM + +(a) Following the expiry of the Warranty Period, Changepoint shall provide Customer with Maintenance Services during successive annual maintenance terms (each such term is referred to here as a "Maintenance Term") provided that Customer pays to Changepoint the Maintenance Fees for each Maintenance Term as and when due hereunder. + +(b) Customer or Changepoint may terminate Maintenance Services at the end of a Maintenance Term by providing the other with no less than thirty (30) days prior written notice before the end of the Maintenance Term. + + 33 + +7.2 MAINTENANCE SERVICE + +(a) During the Warranty Period and each Maintenance Term, Changepoint will provide Maintenance Releases to Customer. Changepoint will also during Business Hours provide telephone assistance to Customer with respect to initial error diagnosis and support regarding the functionality of the Licensed Software. Maintenance Service shall be provided by Changepoint to up to three (3) customer support staff who are trained and knowledgeable in the use of the Licensed Materials and who have been designated from time to time by Customer to request and receive such service. + +(b) As part of Maintenance Service and Warranty Support, Customer will have access to Changepoint's CHANGEPOINT Knowledge Base technical database which contains technical information concerning the use of the Licensed Software. Customer acknowledges that information in this database may not have been verified by Changepoint. Accordingly, Changepoint shall have no responsibility hereunder with respect to any inaccurate or incomplete information contained in the CHANGEPOINT Knowledge Base or the use thereof by Customer. + +7.3 SERVICES NOT INCLUDED + +(a) Maintenance Services and Warranty Support does not include or apply to any of the following: (i) making modifications to the Licensed Materials for Customer, (ii) user training, (iii) consultation for new programs or equipment, (iv) hardware problems including any malfunction of hardware, or to any external causes affecting the Licensed Materials including the media upon which the Licensed Materials are provided such as accident, disaster, electrostatic discharge, fire, flood, lightning, water or wind, or (v) correction of errors attributable to software other than the&bbsp;Licensed Software. Changepoint may charge Customer at its then applicable list price for providing such services. Changepoint may also charge Customer at its then applicable list price for analysis or removal of errors which are caused by improper operation or handling of the Licensed Materials or caused by circumstances unrelated to Changepoint. Payment for these services shall be made by Customer within 30 days of invoicing by Changepoint. + +(b) The obligation to provide Maintenance Services is subject to the following: (i) Maintenance Services are only provided for the Licensed Software provided under this Agreement, (ii) if Customer ceases to pay for and receive Maintenance Services and later requests Maintenance Services, Customer will be required to pay to Changepoint the Maintenance Fees not paid during the period in which the service was discontinued, and (iii) Maintenance Services need not be provided by Changepoint if Customer is not using the most current or an immediately previous release of the Licensed Materials, or if Customer has made any modifications to the Licensed Materials and (iv) Changepoint has no obligation to provide Customer with any Maintenance Services unless Customer has paid for the Maintenance Services in advance as required hereunder. + + ARTICLE 8 - TERM AND TERMINATION + +8.1 TERM + + This Agreement shall be effective on the Effective Date and shall terminate in accordance with this Article. + +8.2 TERMINATION + + Either party may by notice in writing terminate this Agreement if (i) the other party breaches or fails to observe or perform any of its obligations set out in this Agreement, including failure to pay any License Fees due and owing, and fails to cure such breach or failure within thirty (30) days after written notice; or (ii) either party becomes insolvent, or makes an assignment for the general benefit of creditors, or any proceedings are commenced by or against either party under any bankruptcy or insolvency laws or if proceedings for the appointment of a trustee, custodian, receiver, or receiver manager for either party are commenced, or if either party ceases or threatens to cease to carry on business. + +8.3 RETURNING LICENSED MATERIALS + + Within fifteen (15) days after termination or expiration of this Agreement for any reason, Customer shall return to Changepoint the original and all copies of the Licensed Materials in the possession or control of Customer (including any copies in the possession or control of Business Third Parties or other Users) and shall certify to Changepoint in writing that all such copies have been so returned and/or deleted from all computer records. Customer shall also cease to use the Licensed Materials and ensure that all Business Third Parties to whom Customer has given access to the Licensed Software also cease to use the Licensed Materials. + + + + + +8.4 SURVIVAL + + The parties hereto agree that the provisions of Sections 3.3 (the last sentence), 4.3, 6.2, 6.3 and 8.3, 9.9 and 9.10 and Article 5 shall survive and remain in full force and effect after the termination of the License or this Agreement for any reason. + + ARTICLE 9 - GENERAL + +9.1 HEADINGS + + The division of this Agreement into Articles and Sections and the insertion of headings are for convenience of reference only and shall not affect the construction or interpretation of the Agreement, as the case may be. The terms "this Agreement", "hereof", "hereunder" and similar expressions in this Agreement refer to this Agreement and not to any particular Article, Section or other portion and include any Agreement supplemental hereto. Unless something in the subject matter or context is inconsistent therewith, references herein to Articles and Sections are to Articles and Sections of this Agreement. + + 34 + +9.2 EXTENDED MEANINGS + + In this Agreement words importing the singular number only shall include the plural and VICE VERSA, and words importing persons shall include individuals, partnerships, associations, trusts, unincorporated organizations and corporations. The terms "provision" and "provisions" in this Agreement refer to terms, conditions, provisions, covenants, obligations, undertakings, warranties and representations in this Agreement. + +9.3 NOTICES + + For the purposes of this Agreement, and for all notices and correspondence hereunder, the addresses of the respective parties have been set out at the beginning of this Agreement and no change of address shall be binding upon the other party hereto until written notice thereof is received by such party at the address shown herein. All notices shall be effective upon receipt if delivered personally or sent by facsimile and seven (7) days after mailing if sent by registered mail. + +9.4 CURRENCY + + All references to currency are deemed to mean lawful money of the United States of America unless expressed to be in some other currency. + +9.5 FORCE MAJEURE + + If the performance of this Agreement, or any obligation thereunder except the making of payments hereunder is prevented, restricted, or interfered with by reason of: fire, flood, earthquake, explosion or other casualty or accident or act of God; strikes or labour disputes; inability to procure or obtain delivery of parts, supplies, power, equipment or software from suppliers, war or other violence; any law, order, regulation, ordinance, demand or requirement of any governmental authority; or any other act or condition whatsoever beyond the reasonable control of the affected party, the party so affected, upon giving prompt notice to the other party, shall be excused from such performance to the extent of such prevention, restriction or interference; provided, however, that the party so affected shall take all reasonable steps to avoid or remove such cause of non-performance and shall resume performance hereunder with dispatch whenever such causes are removed. + +9.6 SEVERABILITY + + The parties agree that it is the intention of each party not to violate any public policy, statutory or common law or government regulation. To the extent that any provision, portion or extent of this Agreement is deemed to be invalid, illegal or unenforceable, such provision, portion or extent shall be severed and deleted herefrom or limited so as to give effect to the intent of the parties insofar as possible and the parties will use their best efforts to substitute a new provision of like economic intent and effect for the illegal, invalid or unenforceable provisions and each remaining provision so remaining shall be enforced. + +9.7 ASSIGNMENT + + Customer may assign this Agreement without Changepoint's consent (i) to an Affiliate of Customer; or (ii) to a purchaser of all or substantially all of Customer's assets. Otherwise, neither this Agreement nor any rights granted hereby may be transferred or assigned by Customer to any other person without Changepoint's prior written consent, (such consent shall not be unreasonably withheld), and any such attempted assignment shall be null and void. In the event Customer assigns this Agreement to a third person as permitted by this Section 9.7 or with consent from Changepoint, Customer shall cease all use of the Licensed Materials and destroy or cause to be destroyed all copies thereof within its possession or control and the third party assignee shall agree in writing with Changepoint to assume all of Customer's obligations hereunder. Customer shall also certify in writing to Changepoint that the foregoing has been accomplished. This Agreement shall enure to the benefit of and be binding upon any successor or assign of Changepoint or, any permitted successor or assign of Customer. The parties agree that Changepoint may delegate to affiliates of Changepoint and to agents, suppliers, contractors and resellers of Changepoint any of the obligations herein imposed upon Changepoint and + + + + + +Changepoint may disclose to any such persons any information required by them to perform the duties so delegated to them, but such delegation shall not relieve Changepoint of its performance obligations hereunder. + +9.8 WAIVER + + &sbsp; No modification, addition to or waiver of any rights, obligations or defaults shall be effective unless in writing and signed by the party against whom the same is sought to be enforced. One or more waivers of any right, obligation or default shall not be construed as a waiver of any subsequent right, obligation or default. No delay or failure of either party in exercising any right hereunder and no partial or single exercise thereof shall be deemed of itself to constitute a waiver of such right or any other rights hereunder. + +9.9 GOVERNING LAW + + This Agreement shall be governed by and construed in accordance with the laws of the State of New York without reference to its conflict or choice of law rules or principles. Customer hereby submits to the non-exclusive jurisdiction of the courts of the State of New York for any legal action arising out of this Agreement or the performance of the obligations hereunder or thereunder. This Agreement shall be deemed to be made in the State of New York, and Customer agrees not to commence any action, suit or proceeding against Changepoint or any affiliate of Changepoint or any of their employees, officers or directors in any jurisdiction other than the State of New York. + + 35 + +9.10 DISPUTE RESOLUTION AND ARBITRATION + + In the event that any dispute or disagreement between Customer and Changepoint with respect to the interpretation of any provision of this Agreement, the performance of Changepoint or Customer under this Agreement, or any other matter that is in dispute between the parties related to this Agreement, upon the written request of either party, the parties will meet for the purpose of resolving such dispute. The parties agree to discuss the problem and negotiate in good faith without the necessity of any formal proceedings related thereto. No formal proceedings for the resolution of such dispute may be commenced until either party concludes in good faith that the applicable resolution through continued negotiation of the matter in issue does not appear likely. The parties further agree that all disputes hereunder which cannot be settled in the manner hereinbefore described (any such dispute is referred to here as a "Dispute") will be settled by final and binding arbitration conducted in accordance with the American Arbitration Association (or any successor thereto), as amended from time to time. Judgment upon the award rendered in any such arbitration may be entered in any court having jurisdiction thereof, or application may be made to such court for a judicial acceptance of the award and an enforcement, as the law of such jurisdiction may require or allow. + + Notwithstanding the foregoing, disputes with respect to any Infringement Claim including without limitation any claim based on the infringement, violation or misappropriation of any Intellectual Property Right shall not be settled by arbitration, without the prior written consent of the parties. + + The arbitration panel will be composed of one person appointed by the party requesting the arbitration (the "Applicant"), one person appointed by the other party (the "Respondent") and a third person to act as chairperson, chosen by the two arbitrators, or, if both parties agree, the arbitration panel will consist of a sole arbitrator. No person may be appointed as an arbitrator unless he or she is independent of the Applicant and Respondent, is skilled in the subject matter of the Dispute and is not directly or indirectly carrying on or involved in a business being carried on in competition with the business of the parties. The decision of the arbitration panel shall be made by a majority vote or by the sole arbitrator, as the case may be. In the event of the failure of the arbitration panel to reach a majority decision, the decision of the chairperson shall constitute the decision of the arbitration panel. The venue for the arbitration shall be at the City of New York, New York unless otherwise agreed to by the parties in writing. + + 36 + + CONFIDENTIAL TREATMENT + +Corio/Changepoint Rev. 12/13/99 + + + + + +Confidential/Draft + + APPENDIX A + +The Components which are the subject of the License, the Software Licenses granted to Customer and the fees payable to Changepoint hereunder are as follows: + +1. LICENSED SOFTWARE + + The Components of the CHANGEPOINT Software which are licensed to Customer hereunder are the following: CHANGEPOINT, SQL edition, version 5.2, for an unlimited number of users, including the following modules: - Service Delivery Management - Project and Resource Management - Customer Relationship Management - Support Management. + +2. SOFTWARE LICENSES + + The utilization rights of Customer are as follows: + + (a) Customer is granted an unlimited number of Client Access Licenses. Each Client Access License entitles Customer to receive one (1) Enable Code from Changepoint which will enable Customer to have one (1) user use the Licensed Materials. + + (b) Customer may install Licensed Software on one or more computer servers as it desires. + +3. LICENSE FEES + + The License Fee is ***. + +4. WARRANTY PERIOD + + The Warranty Period for the Licensed Software shall mean the period commencing on the Effective Date and ending ninety (90) days thereafter. + +5. MAINTENANCE FEES + + (a) Customer will pay Changepoint for each Maintenance Term an annual maintenance fee (the "Annual Maintenance Fee"). The Annual Maintenance Fee is 18% of the undiscounted License Fees due to Changepoint hereunder and is payable annually in advance. The first Annual Maintenance Fee is due upon the expiration of the Warranty Period and is ***. Subsequent Annual Maintenance Fees are due on the anniversary of the date the first Annual Maintenance Fee is due. Additional Maintenance Fees that result from the acquisition of additional Software Licenses shall become due when the additional Software Licenses are given to Customer and shall be prorated to the end of the Maintenance Term. + + (b) The Maintenance Fees may be increased annually by Changepoint by providing Customer with notice of not less than thirty (30) days prior to the end of a Maintenance Term. Changepoint agrees not to increase its Maintenance Fees annually by more than six percent (6%) from the fees charged in the previous Maintenance Term. + +6. INSTALLATION SERVICES TO BE PROVIDED BY CHANGEPOINT + + (a) Changepoint agrees to provide the following services ("Installation Services") to Customer: + + Executive Expectations Review *** Project Management *** Infrastructure Support *** + +*** The omitted material has been filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment. + + 1 + + CONFIDENTIAL TREATMENT + +Corio/Changepoint Rev. 12/13/99 Confidential/Draft + + Systems Configuration & Installation *** Implementation Support *** Administrator Training *** Train-the-Trainer Training *** + + (b) Customer agrees to pay Changepoint for any Installation Services requested by Customer and provided by Changepoint at the daily rates listed in 6(a) above. + + (c) Changepoint does not guarantee that all services will be provided for the above-mentioned fees. The fees may be higher or lower depending on the actual services requested by Customer. + + (d) Customer shall reimburse Changepoint for reasonable travel expenses, and reasonable incidental expenses relating to Installation Service and Maintenance Service at Changepoint's then + + + + + + current prices then in effect. Changepoint shall invoice Customer for such fees and expenses on a monthly basis. Customer shall not be liable for the aforesaid expenses unless Customer has given Changepoint approval to incur them. + +CHANGEPOINT INC. CORIO, INC. + +Signature ________________________ Signature _____________________ + +Name _____________________________ Name __________________________ + +Title ____________________________ Title _________________________ + +*** The omitted material has been filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment. + + 2 \ No newline at end of file diff --git a/full_contract_txt/CHAPARRALRESOURCESINC_03_30_2000-EX-10.66-TRANSPORTATION CONTRACT.txt b/full_contract_txt/CHAPARRALRESOURCESINC_03_30_2000-EX-10.66-TRANSPORTATION CONTRACT.txt new file mode 100644 index 0000000000000000000000000000000000000000..320a4bdc67b19e2e004dbe9c79652bb82fce44e0 --- /dev/null +++ b/full_contract_txt/CHAPARRALRESOURCESINC_03_30_2000-EX-10.66-TRANSPORTATION CONTRACT.txt @@ -0,0 +1,317 @@ +Exhibit 10.66 + + TRANSPORTATION CONTRACT + + Astana January 31, 2000 + + PREAMBLE + +JSC NOC KazakhOil, hereinafter referred to as the "Company", in the person of Executive Marketing Director Ms. A. M. Rakhimbekov, acting on the basis of the Power of Attorney (1) 1-13 dated January 3, 2000, on the one side and JSC Karakudukmunay, hereinafter referred to as the "Principal" in the person of General Director Mr. N. D. Klinchev and Financial Director Mr. R. Moore, acting on the basis of the Charter, on the other side, collectively referred to as the "Parties", have entered into this Transportation Contract (the "Contract") and hereby agree as follows: + + 1. SUBJECT OF THE CONTRACT + +1.1 The Company, at the expense and on the instructions of the Principal, shall arrange transportation for export in batches to the far abroad of crude oil ("Commodity") belonging to the Principal and shall provide such other services in connection therewith as are provided in this Contract. + +1.2 The volume of a batch of Commodity transported hereunder shall be determined in accordance with the monthly schedules of transit and distribution of Kazakhstany oil. + + 2. DEFINITIONS AND INTERPRETATION + +2.1 As used in the Contract, the following terms have the meanings indicated: + +"Buyer" means STASCO in its capacity as Buyer under the Offtake Agreement and any other person in its capacity as buyer under any Other Agreement. + +"Commodity" is defined in item 1.1. + +"Company" is defined in the Preamble to this Contract. + +"Contract" is defined in the Preamble to this Contract. + +"CPC Blend" means the blend of crude oil generally available at the CPC Terminal that complies with minimum specifications agreed by the Principal and STASCO pursuant to the Offtake Agreement. + +"CPC Pipeline" means the pipeline being constructed by the Caspian Pipeline Consortium from the Tengiz field to Novorossiysk. + +"CPC Pipeline Operational Date" means the last day of the month in which (i) the CPC Pipeline is completed, (ii) the Karakuduk Field is so connected with the CPC Pipeline (via pipeline, rail link, or otherwise) that Karakuduk Crude Oil can and will be evacuated to the CPC Terminal via the CPC Pipeline, (iii) the CPC Pipeline commences pumping commercial quantities of crude oil as determined by the Principal and STASCO pursuant to the Offtake Agreement, and (iv) if the CPC Pipeline is only transporting Commodity on a blend (as opposed to batch) basis, the Principal and STASCO have agreed on the specifications for CPC Blend pursuant to the Offtake Agreement. + +"CPC Terminal" means the single buoy-mooring terminal being built by the Caspian Pipeline Consortium near Novorossiysk. + +"DAF" has the meaning given to "delivered at frontier" in the Incoterms 1990. + +"Delivery Basis" means (i) during the "Principal Period", delivery of Commodity on terms of DAF Adamovo, DAF Fenyeshlitke, DAF Budkovce, FOB sea-port Odessa, FOB sea-port Novorossiysk, or FOB sea-port Ventspils, as applicable, and (ii) during the "Secondary Period", delivery of Commodity on terms of FOB CPC Terminal, in each case in accordance with the route indicated in the monthly delivery schedules of the Company. + +"Delivery Date" for a batch of Commodity means the date of execution of the last acceptance-delivery act/bill of lading for that batch of Commodity in accordance with item 4.1.vii. + +"Delivery Month" means the period for delivery under the Offtake Agreement or the Other Agreement, as applicable. + +"Effective Date" means the date of actual execution of this Contract by the Parties. + +"FOB" has the meaning given to "free on board" in the Incoterms 1990. + +"Initial Term" means the period commencing on the Effective Date and concluding on the last day of the month in which the fifth anniversary of the Offtake Agreement Effective Date falls. + + + + + +"Karakuduk Crude Oil" means Commodity produced from the Karakuduk Field or from such other field as the Principal and the Company may agree. + +"Karakuduk Field" means the Karakuduk oil field in the Mangistau Oblast of the Republic of Kazakhstan as more particularly described in the Petroleum Contract and the License. + +"Offtake Agreement" means that certain Crude Oil Sale and Purchase Agreement between the Principal and STASCO dated 1 November 1999. + +"Offtake Agreement Effective Date" means the "effective date" of and as defined in the Offtake Agreement. + +"Other Agreement" means any agreement other than the Offtake Agreement pursuant to which the Principal sells Karakuduk Crude Oil. + +"Parties" is defined in the Preamble to this Contract. + +"Petroleum Contract" means that certain Agreement for Exploration, Development and Production of Oil in Karakuduk Oil Field in Mangistau Oblast of the Republic of Kazakhstan between the Ministry of Oil and Gas Industries of the Republic of Kazakhstan for and on behalf of the Government of the Republic of Kazakhstan and the Principal. + +"License" means License No. MG#249 (Oil) dated 25 June 1995 (as subsequently amended) granted to the Principal by the Government of the Republic of Kazakhstan. + +"Principal" is defined in the Preamble to this Contract. + +"Principal Period" means the period from the Effective Date to the CPC Pipeline Operational Date. + +"REBCO" means Commodity that satisfies the specifications of TU-39-1623-93 "Russian oil delivered for export; Specifications" for export to the far abroad. + + 2 + +"Secondary Period" means the period from the CPC Pipeline Operational Date to the date of termination of this Contract (inclusive). + +"STASCO" means Shell Trading International Limited acting through its agent Shell International Trading and Shipping Company Limited. + +"Tenge" means official currency of the Republic of Kazakhstan. + +2.2 In this Contract, unless the context otherwise requires: + +i. Headings are used for convenience only and do not affect the interpretation of this Contract; + +ii. any expression, which means individual, includes any company, Partnership, trust, joint venture, association, corporation, or other corporate organization and vice versa; + +iii. references to Articles and Sections, unless otherwise expressly provided in this Contract, are references to articles and sections of this Contract; + +iv. except as otherwise expressly provided, any reference to a document includes an amendment or supplement to, or replacement or renovation of, that document; + +v. a reference to any Party to this Agreement and to any other document includes that Party's legal successors and assigns; + +vi. words, which mean the singular, also include the plural and vice versa; + +vii. the word "including" means "including without limitation"; + +viii. a "business day" means a day (other than a Saturday or a Sunday) on which banks are open for ordinary banking business in London; + +ix. "tonne" is a metric ton; and + +x. a "year" means a calendar year, a "quarter" means a calendar quarter, and a "month" means a calendar month. + + 3. QUALITY + +3.1 Unless otherwise agreed by the Parties, the Principal shall at all times deliver to the Company Karakuduk Commodity pursuant to this Contract. The Company shall ensure that (i) during the Principal Period, the quality of Commodity delivered at the relevant delivery point shall be REBCO, and (ii) during the Secondary Period, the quality of Commodity delivered at the CPC Terminal shall be Karakuduk Commodity for segregated batch deliveries or shall be CPC Blend for deliveries for which segregated batch delivery is not available. + +4. OBLIGATIONS OF THE PARTIES + +4.1 At all times during the term of this Contract, the Company shall: + + + + + +(i) Assist in obtaining required&sbsp;official export permissions (certificate of origin of the Commodity at place the load output, customs declaration on Commodity output) for release of the batch of Commodity being delivered from the customs territory of the Republic of Kazakhstan; + + 3 + +(ii) accept Karakuduk Commodity from the Principal at Metering Point 719 (PSP Samara of the Western branch office of KazTransOil) and arrange its transportation for export in accordance with the Delivery Basis; + +(iii) execute all customs formalities to carry out transit transportation of the batch of Commodity through the territory of Russian Federation and the countries of the C.I.S.; + +(iv) procure sending of a route telegram to AK Transneft; + +(v) procure delivery of the indicated Commodity to the Buyer on the Delivery Basis, less operating losses in transportation of the Commodity, that are charged to the Principal's account; + +(vi) procure berthing for the Buyer's tanker and delivery of the batch of Commodity to such tanker through the Company's agents in the relevant port; + +(vii) timely present to the Principal the Acts of acceptance-delivery of the Commodity (oil)/Bills of Lading executed at the Delivery Basis. (During the Principal Period, Acts of acceptance-delivery executed on the DAF basis (Adamovo, Fenyeshlitke or Budkovce) shall be presented in one copy, Bills of Lading and sets of shipping documents attached to them executed on the FOB basis (Odessa, Novorossiysk or Ventspils) shall be presented in the number of copies specified in the Buyer's instructions, and during the Secondary Period, such documents as may be required at that time executed on the FOB CPC Terminal basis shall be presented according to the list and in the number of copies as it would be agreed between Principal, Company and CPC; + +(viii) provide the Principal with information on the status of execution of this Contract; + +(ix) on the Principal's request, prepare analyses of the Buyer's calculations of prices; + +(x) cooperate with the Principal, to render, if possible, such assistance that can prove necessary for the Principal to perform its obligations under the Offtake Agreement or any other contract with the Buyer regarding Commodity; and + +(xi) during the term of this Contract, observe all provisions of this Contract and other terms and conditions agreed upon with the Principal. + +4.2 At all times during the term of this Contract, the Principal shall: + +(i) Deliver Karakuduk Commodity to the Company at Metering Point 719 (PSP Samara of the Western branch office of KazTransOil) in the amount determined in accordance with item 1.2 of this Agreement; + +(ii) independently conclude contracts with the Buyer on selling Crude Oil for export and submit a copy of each such contract with the Buyer to the Company 5 days before the beginning of the relevant Delivery Month; + +(iii) obtain, at its own expense, required official export permissions (certificate of origin of the Commodity at place of the load output, customs declaration on Commodity output) for release of the batch of Commodity being delivered from the customs territory of the Republic of Kazakstan and deliver them before the 5th day of the Delivery Month; + +(iv) if the Delivery Basis is DAF, provide the Company before the 5th day of the Delivery Month with a copy of confirmation from AK Transneft on its readiness to accept the agreed batch of Commodity from coordinators at the relevant directions; + + 4 + +(v) if the Delivery Basis is FOB, to provide the Company and the Company's agent in the relevant port 5 days before the agreed upon loading&bbsp;period (Laycan) with the Buyer's instructions on filling in the shipping documents, including name of the vessel, its characteristics, loading period (Laycan), lay time and other necessary data; + +(vi) make a 100% pre-payment for transportation of the batch of Commodity through the territory of Russian Federation and the CIS countries, in accordance with the Payment Order of AK Transneft; + +(vii) pay the additional expenses if the transport tariffs are increased, providing the Company presents the appropriate documents; + +(viii) reimburse the Company for the cost of execution of the customs declaration at the Energy customs office of the RF in accordance with the Company's invoice; + + + + + +(ix) reimburse the Company for all expenses reasonably incurred in connection with the performance by the Company of its obligations under this Contract within 30 (thirty) days of delivery to the Principal of proper invoices and other supporting documents for such expenses; + +(x) pay the Company's fee for the services rendered under Article 5 hereof, in accordance with the invoice and tax invoice; + +(xi) provide copies of all payment documents; + +(xii) pay all transportation and other expense of KazTransOil on the territory of Kazakhstan under its contract with KazTransOil; + +(xiii) to make all necessary payments to the budget of the Republic of Kazakhstan related to excise taxes, VAT and other obligatory payments to the budget in accordance with the tax legislation + +(xiv) during the term of this Contract, observe all provisions of this Contract and other terms and conditions agreed upon with the Company. + + 5. COMPANY'S FEE AND PAYMENT TERMS + +5.1 The Principal shall pay the Company a fee of $1.00 (one dollar), inclusive of VAT, per one net tonne of Commodity shipped pursuant to this Contract. + +5.2 The Principal shall pay the commission fee for each delivered batch of Commodity to the Company's account within 30 (thirty) banking days after the Delivery Date. + +5.3 The payment shall be made in accordance with the invoice presented by the Company and the tax invoice (original or a fax copy) in Tenge at the official exchange rate of the National Bank of the Republic of Kazakhstan effective on the Delivery Date in accordance with item 4.1.vii. + + 6. PERIOD AND TERMS OF LOADING + +6.1 Commodity will be shipped by the Company in batches during the period from the Effective Date through the term of this Contract subject to (i) the Principal having the requisite supplies of Commodity and (ii) the Principal having entered into the Offtake Agreement or another Agreement with the Buyer. + + 5 + +6.2 The Company shall have a right to deliver Commodity to the Buyer with a permissible +/-5% deviation from the number of batches of Commodity. + + 7. OWNERSHIP RIGHT AND RISK OF ACCIDENTAL LOSS + +7.1 Ownership right and risk of loss with respect to all Commodity transported under this Contract, shall remain with the Principal at all times prior to transfer of the ownership right and risk of loss with respect to such Commodity to the Buyer in accordance with the Delivery Basis. At no time shall the Company have the ownership right to any Commodity transported under this Contract. + +7.2 At any time in accordance with reasonable requirements of the Principal, the Company shall confirm the Principal's ownership rights to Commodity, transported under this Contract. + +7.3 At any time the Principal may insure this Contract at his own expense, and the Company shall render feasible assistance to the Principal in this case. + + 8. LIABILITY; INDEMNITY + +8.1 The Parties shall be liable for non-execution and/or improper execution of their obligations under this Agreement in accordance with the legislation of the Republic of Kazakstan. + +8.2 In case if the Principal violates the conditions of this Contract, and such violation entails infringement of the Off-take Agreement conditions by the Principal, then the Principal shall be solely liable in front of the Purchaser for such violations. In addition, the Company shall not be liable in front of the Principal or the Purchaser hereunder. + +8.3 In case if violation by the Principal of the Off-take Agreement conditions takes place due to infringement by the Company of its liabilities in front of the Principal under this Contract, the Company shall be soley liable in front of the Principal for such losses resulting from such violation , evidenced and supported by confirming documents .. + + 9. TERM OF THE CONTRACT + +9.1 In accordance with items 9.3, 9.4, and 10.3, this Contract shall come into force on the Effective Date, remain effective throughout the Initial Term, and be prolonged, or further extended automatically for a period of 12 + + + + + + months, each such extension commencing at the end of the last day of the Initial Term or the relevant anniversary thereof, unless either Party serves written notice of termination on the other Party at least 65 days prior to the end of the Initial Term, or any subsequent extension. + +9.2 Any notice of termination served by any Party with violation of the period of notice required by item 9.1 shall be invalid and of no effect whatsoever. + +9.3 If the Company fails to perform within 30 days upon notice from the Principal on nonperformance by the Company of any of its obligations under this Contract, and keeps non-performing it, then the Principal may upon expiry of the indicated 30 day period, terminate this Contract, with obligatory accounts settling. + + 6 + +9.4 If the Principal fails to perform within 30 days upon notice from the Company on nonperformance by the Principal of any of its obligations under this Contract, and keeps non-performing it, then the Company is entitled, upon expiry of such 30 day period, to terminate this Contract, with obligatory accounts settling. + + 10. FORCE-MAJEURE + +10.1 Except for the obligations to make any payment, required by this Contract (which shall not be subject to relief under this item), a Party shall not be in breach of this Contract and liable to the other Party for any failure to fulfil any obligation under this Contract to the extent any fulfillment has been interfered with, hindered, delayed, or prevented by any circumstance whatsoever, which is not reasonably within the control of and is unforeseeable by such Party and if such Party exercised due diligence, including acts of God, fire, flood, freezing, landslides, lightning, earthquakes, fire, storm, floods, washouts, and other natural disasters, wars (declared or undeclared), insurrections, riots, civil disturbances, epidemics, quarantine restrictions, blockade, embargo, strike, lockouts, labor disputes, or restrictions imposed by any government. + +10.2 The Party affected by the indicated circumstances shall be excused from performance or accurate performance, as the case may be, of such obligation for so long as such circumstance continues to exist. The Party affected shall promptly, at any rate, within twenty-four (24) hours from the receipt of information about the occurrence of such event must notify the other Party on the occurrence of such circumstances and on the obligations affected. + +10.3 If performance of the obligations by any Party under this Contract have been delayed for a period of 3 months, the other Party shall be entitled to terminate this Contract thereafter by giving notice to that effect to the Party claiming relief under Section 10, with obligatory accounts settling. + +10.4 No circumstance described in item 10.1 shall result in prolongation of the validity term of this Contract. + + 11. SETTLEMENT OF DISPUTES AND APPLICABLE LAW + +11.1 In the event of any disputes arousal under this Contract, the Parties shall exercise all reasonable efforts to resolve them by negotiations. + +11.2 In the event that resolution of the disputes by negotiations is impossible, they shall be subject to court consideration at the defendant's location. + +11.3 Effective legislation of the Republic of Kazakhstan shall apply to any relations of the Parties arising out of this Contract. + + 12. MISCELLANEOUS TERMS AND CONDITIONS + +12.1 Neither Party shall be entitled to assign any of its rights or duties hereunder to any third parties without a written consent of the other Party thereto. + + 7 + +12.2 Any amendments or alterations to this Contract shall be considered valid only if executed in writing and signed by the authorized representatives of the Company and the Principal. Usage of facsimile communication for signing the above mentioned amendments and alterations shall be acceptable. + +12.3 From and after the Effective Date, all prior negotiations and correspondence pertinent to the Contract shall have no legal force. + +12.4 In all other matters not stipulated in this Contract, relations of the Parties shall be governed by the legislation of the Republic of Kazakhstan in force. + +12.5 The Parties shall guarantee observance of confidentiality in respect to any information and documentation received hereunder; provided, that nothing in + + + + + + this item shall restrict either Party from disclosing details of or relating to this Contract information (i) to any shareholder of such Party, (ii) to any creditor to such Party, (iii) to any person considering to become a shareholder of or creditor to such Party, (iv) to the extent necessary to comply with any laws or regulations applicable to such Party. + +12.6 Any attachments to this Contract shall be an integral part hereof. + +12.7 This Contract has been executed in 2 (two) original copies in both the Russian language and the English language, one copy in each language for each of the Parties, in addition, the Russian text of the Contract has priority. + + 13. REPRESENTATIONS + +13.1 Each Party represents to the other Party that: + +i. It is duly organized and validly existing under the laws of the jurisdiction of its incorporation or registration and, if provided under such laws, in good standing; + +ii. it has the power to sign and deliver this Contract and has undertaken all necessary measures to authorize such signing, delivery and execution; + +iii. such signing and delivery do not violate or conflict with any law applicable to it, any provisions of its constitutional documents, any orders or judgements of any court or another agency of government applicable to it or any of its assets or any contractual restrictions binding on or affecting it or any of its assets; + +iv. all governmental and other permits which are required to have been obtained by it with respect to this Contract, have been obtained and have full legal force; and all conditions of any such permits have been complied with; and + +v obligations of such Party under this Contract constitute its legal, valid and binding obligations, enforceable in accordance with its respective terms (subject to applicable bankruptcy, re-organization, insolvency, moratorium or similar laws affecting creditors' rights generally and subject, as to the enforceability, to equitable principles of general application (regardless of whether enforcement on execution of this Contract is sought in a proceeding in equity or under law)). + + 8 + + 14. MISCELLANEOUS + +14.1 This Contract constitutes the entire agreement of the Parties with respect to the subject matter of this Contract and the Parties acknowledge that they do not enter into this Contract regardless of any previous contacts between the Parties or their affiliates. + +14.2 Any amendments or alterations to any of the terms of this Contract shall be effective unless they are registered in writing and signed by or on behalf of each of the Parties; no waiver of any provision hereof shall be effective unless it is in writing and signed by the Party, against which such waiver is sought to be enforced. + +14.3 Except as expressly provided herein, the rights, authorities and remedies, provided in this Contract, are cumulative and not exclusive of any rights, authorities and remedies provided by the law. + +14.4 Except as expressly provided herein no delay or omission on the part of either Party in exercising any rights, authorities or remedies, provided by law or under this Contract, nor any indulgence granted by any Party to another Party, shall impair such rights, authorities or remedies, or be construed as a waiver thereof; moreover, no single or partial exercise of any right, power or remedy provided by law or under this Contract shall hinder other or further exercise thereof, as well as exercise of any other right, power or remedy. + +14.5 This Contract does not confer rights or remedies upon any person other than the Principal and the Company. + + 15. LEGAL ADDRESSES AND PROPS OF THE PARTIES + + COMPANY: PRINCIPAL + +JSC NOC KazakhOil JSC Karakudukmunay 473000, Republic of Kazakhstan, Astana, 466200, Aktau, Mangistau oblast 60, Republic avenue District 3, Building 82 Tel.: (3172) 280609, fax 327724 Tel.: (3292) 513795, fax 518336 TRN 600700150675 TRN 430600001175 + +Bank props: Bank props: Tenge account (1) 000467052 AB Neftebank, Aktau in Akmola affiliate of Tenge account (1) 609614 JSC "Almaty trade and finance bank", Astana IAT 195301730 IAT 192901705 + +/s/ Amangeldy Tlegenov &bbsp; /s/ Nikolai D. Klinchev + + + + + +- -------------------------------------------- ------------------------------- A.M. Rakhimbekov Nikolai Klinchev + + /s/ Richard J. Moore ------------------------------- Richard Moore + + 9 \ No newline at end of file diff --git a/full_contract_txt/CHEETAHMOBILEINC_04_22_2014-EX-10.43-Cooperation Agreement.txt b/full_contract_txt/CHEETAHMOBILEINC_04_22_2014-EX-10.43-Cooperation Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..cf156284fe2e177b6725172c5351e0d0e081edbe --- /dev/null +++ b/full_contract_txt/CHEETAHMOBILEINC_04_22_2014-EX-10.43-Cooperation Agreement.txt @@ -0,0 +1,699 @@ +Exhibit 10.43 + +This is a translation of the original Chinese text + +Contract No.: 151315UD0081 + +Cooperation Agreement + +Party A: Beike Internet (Beijing) Security Technology Co., Ltd. + +Party B: Baidu Online Network Technology (Beijing) Co., Ltd. + +April 2013 1 + + + + + +This Cooperation Agreement is executed by and between the parties below in Haidian District, Beijing, the People's Republic of China (hereinafter referred to as "PRC"): + +Party A: Beike Internet Security Technology Co., Ltd. + +Address: Room 2101, 12/F, Fuxing International Center, No.237, North Chaoyang Road, Chaoyang District, Beijing. + +Attention: + +Tel: + +E-mail: + +Postcode: + +Bank account: + +Account No.: + +Party B: Baidu Online Network Technology (Beijing) Co., Ltd. + +Address: No.10, Shangdi Shi Jie, Haidian District, Beijing + +Attention: + +Tel: + +E-mail: + +Postcode: + +Whereas, + +1. Party A owns the Kingsoft internet site navigation website and the Cheetah Brower software (hereinafter referred to as Party A's Product). Website: 123.duba.net and www.duba.com. Party A has opened an account with Baidu Union website (http://union.baidu.com) and the account name is (translation: "Kingsoft Cheetah") and ksbrowser and is willing to comply with the terms of Baidu Union Membership Registration Agreement (http://union.baidu.com/regAgreement.html). + +2. Party B is a leading network technology company in the field of search engine. + +3. The parties wish to collaborate with each other leveraging their respective strengths. + +Therefore, the parties agree: 2 + + + + + +Chapter 1 Definitions and Interpretations + +1.1 Definitions + +Except as otherwise defined in the context hereof, the terms shall have the following designated meanings: + + 1.1.1 PRC Laws: means any present and future promulgated laws, regulations, decrees and binding policies in PRC. + + 1.1.2 Trade Secrets: means any technology, financial, business or any other information owned by either party and / or its subsidiary oraffiliate and protected as trade secrets. + + 1.1.3 Effective Date: means the date on which this agreement is executed. + + + +1.1.4 Force Majeure: means any event which is not reasonably controllable, foreseeable or avoidable even if foreseeable by the parties, which makes it impossible for either party to perform the whole or part of its obligations pursuant to this Agreement. Such event includes without limitation governmental actions, earthquakes, typhoon, flood, fire or any other natural disaster, wars or any other similar event. In respect of the special nature of the internet, Force Majeure also includes the following events which influence the normal operation of the internet: 1) hacker attacks; 2) material influence of the technical adjustments of the telecommunications department except for losses of one party resulting from its own mismanagement; 3) temporary suspension caused by governmental control, except for the governmental control on one party resulting from its own misconduct; 4) virus attacks. + + 1.1.5 Baidu website: means www.baidu.com. + + 1.1.6 Cooperation Term: means the term set forth in Chapter 3 hereof. + + 1.1.7 Actual revenues: means the revenues payable by Party B to Party A based on the amount of search traffic generated by Party A's website for Party B, less Party B's related costs and legal taxes and charges. The search traffic generated by Party A for Party B, which forms the basis for calculating the actual revenues, shall be determined by Party B based on its statistical data. + +1.2 Interpretations + +1.2.1 The date hereof shall mean the calendar day, the business day hereof shall mean the work day other than public holidays in PRC, and the month hereof shall mean the calendar month. 3 + + + + + +1.2.2 The headings hereof is for inference only and shall not otherwise affect the meaning and construction of any other part of this Agreement. + +1.2.3 If needed in the context, use of plurals shall include its singulars, and vice versa. + +1.2.4 All references to chapters, provisions and paragraphs shall mean the chapters, provisions and paragraphs herein. + +Chapter 2 Representations and Warranties + +2.1 Legal Status + +Either party represents and warrants from the date hereof: + +2.1.1 It has the qualification to conduct the transaction hereunder and such transaction is in compliance with the business scope; + +2.1.2 It is eligible to enter into this Agreement and perform the obligations hereunder. + +2.1.3 Its authorized representative has adequate authorization to execute this Agreement on its behalf (a copy of the authorization letter shall be delivered to the other party for record). + +2.1.4 To its knowledge, it has disclosed all documents which may have a material adverse impact on its performance of obligations hereunder which are issued by the governmental agencies in the registered place or business place and known to it; and it is not the subject of any insolvency, dissolution or bankruptcy procedures. + +2.2 Legal Effect + +2.2.1 From the Effective Date, this Agreement is legally binding on each party. + +2.2.2 Either Party warrants that the execution and performance hereof as well as the business transactions contemplated hereof will not violate any PRC Laws in any respects. + +Chapter 3 Cooperation Term + +3.1 Cooperation Term + +The Cooperation Term of the parties shall be two years from May 1, 2013 to April 30, 2015. One month prior to the expiry of the Cooperation Term, the parties may further negotiate the cooperation forms, if fails, this Agreement will be terminated upon expiry. + + 3.1.1 This Agreement is effective on the day of May 1, 2013 and the effective term is the same as the Cooperation Term. The contracts of which the Parry A contract No. are KIS-Y-BJ120195 and KIS-Y-BJ120196 (Party B contract No. are 151215UD0118, 151215UD0119) are terminated on April 30, 2013. 4 + + + + + +Chapter 4 Liabilities of the Parties + +4.1 Details of Cooperation + +The parties use their respective strengths to cooperate on internet searches, and during the effective Cooperation Term, the parties are collaborative partners. The parties have complementary advantages in the aspects of information usage, promotion, marketing, technical support and services, and now form a strategic alliance to develop their respective businesses. + +4.2 Party A's Obligations + + + +4.2.1 Party A imports the search results provided by Party B to the search function in the Party A's Product by connecting its Product to the technical port provided by Party B. Party A shall also cooperate with Party B to market Baidu promotion services through the use of search engine. In other words, it is a technical service in which Party B displays the website of Party B's clients on the relevant page of Baidu website and/or on the pages and / or interfaces of any other Baidu union members. + + + +4.2.2 Party A will display Party B's "search engine box" in the first screen of the homepage of "Kingsoft Navigation" website, and imports the search results provided by Party B to the search function in the Party A's Product by connecting its Product to the technical port provided by Party B. Party A shall also cooperate with Party B to market Baidu promotion services through the use of search engine. In other words, it is a technical service in which Party B displays the website of Party B's clients on the relevant page of Baidu website and/or on the pages and/or interfaces of any other Baidu union members. The form of "search engine box" is attached as Annex 2. Without Party B's confirmation in writing or via email, Party A shall not change the form, or otherwise Party A will be deemed to breach this Agreement. + + + +4.2.3 Party A shall not put the Party B's search engine service on any other website, or change the codes which are used to import the search engine service of Party B. Party A's website(s) that correspond to Party B's codes are set forth in Annex 2. If Party A needs to add any website(s) or change the codes, it shall obtain the confirmation from Party B in writing or via email, or otherwise Party A will be deemed to breach this Agreement. + + 4.2.4 When Party A promotes websites by means of software installation, Party A needs to determine the homepage of the software users' browsers. In the event that the homepage of the software users' browsers is *.baidu.com or *.hao123.com, Party A shall not change the homepage of the users' browsers by means of the software being installed. 5 + + + + + + 4.2.5 During the cooperation between the parties, Party A agrees not to enter into any form of cooperation with Qihoo 360, unless PartyA needs such cooperation with Qihoo 360 for business or technology and Party B has provided its prior consent. + + + +4.2.6 Party A covenants that during the Cooperation Term, it will list Party B's search engine service as one of its search engine services, of which "Cheetah Browser" will list Party B's search engine service as the default search engine service. In the event that Party A breaches this covenant, Party B shall have the right to terminate this Agreement at any time and shall not pay any share of profits to Party A. + + 4.2.7 During the cooperation, Party A shall form a team composed of specialized personnel to carry out the related work so as to ensurethe smooth cooperation between the parties. + + 4.2.8 Party A shall not change the related functions and contents inherent to Party B's search engine box. If a change is necessray,consent shall first be obtained from Party B. + + 4.2.9 Party A shall not assign to any third party the functions and contents used in the website column(s) that are made the subject matter of this cooperation agreement. In addition, Party A shall not use the functions and information provided by Party B to carry out any commercial activities. + + + +4.2.10 Party A undertakes to comply with the Business Cooperation Standard of Baidu Union published in http://union.baidu.com/regAgreement.html (see Annex 3), or otherwise Party A will be deemed to breach this Agreement. Party A also agrees to participate in the "Blue Sky 365" Action Plan and comply with Blue Sky 365 Action Plan Regulations (see Annex 4). + + + +4.2.11 Party A warrants that it legally owns or otherwise holds the valid license to the intellectual property relating to the services or products provided pursuant to this agreement. Any disputes resulting from the Party A's technology or intellectual property shall be handled by Party A; any losses and costs of Party B resulting from the deficiency of Party A's services or products shall be borne by Party A. Party B has the discretion to terminate this Agreement from time to time in the event that (i) Party A has no legal right in respect of the services or products provided or, (ii) the services or products provided by Party A lead to any legal dispute or proceedings with third parties. 6 + + + + + +4.3 Party B's Obligations + + 4.3.1 Upon the effectiveness of this Agreement, Party B shall form a team composed of specialized personnel to carry out for the relatedwork so as to ensure the smooth cooperation between the parties. + + 4.3.2 Party B shall not publish any contents other than agreed hereof in the Party A's website column(s) that are made the subject matter of this cooperation agreement. In the event that Party B breaches this covenant, Party A has the right to terminate this Agreement at any time and require Party B to pay 30% of Party A's share of revenues as liquidated damages. + + + +4.3.3 Party B will provide to Party A an account which will timely return the visiting traffic data for Party A's easy inquiry. At the same time, Party B ensures the completion, accuracy and truth of the visiting traffic data. If Party A finds the visiting traffic data abnormal, Party B shall issue a written explanation, and the actual revenues generated from the questionable traffic shall not be settled until there was a final confirmation. + + + +4.3.4 Party B warrants that it legally owns or otherwise holds a valid license to the intellectual property relating to the services or products provided pursuant to this agreement. Any disputes resulting from the Party B's technology or intellectual property shall be handled by Party B; any losses and costs of Party A resulting from the deficiency of Party B's services or products shall be borne by Party B. + + + +4.3.5 Party B has the right to penalize any acts of Party A , in whatever form, carried out in contravention with Party B's union cooperation policies. The penalties may include =the immediate suspension of Party A's account, termination of this Agreement, and taking any applicable civil or criminal remedial actions against fraud and any other legal causes. Party B shall have the right to final interpretation of this provision. + + + +4.3.6 Party B retains the right to adjust the public price of the service and the service content, including but not limited to adding or reducing the service items, and raising or lowering the prices. In the event that Party B wishes to carry on such adjustment, it shall notify Party A in writing two weeks in advance. If Party A objects to such adjustment, it has the right to notify Party B to terminate this Agreement in writing within 2 weeks upon receipt of the notification. Within 3 working days upon termination of this Agreement, Party B shall settle with Party A. Failure to exercise such termination right is deemed that Party A agrees the adjustment of Party B. + + 4.3.7 With respect to the cooperation hereof, Party B has the discretion to assign to its affiliates all or part of its obligations hereunder without breaching this agreement. Party B's affiliates mean Party B's parent companies at different levels as well as the companies, owned or controlled, directly or indirectly, by the Party B's parent companies at different levels. 7 + + + + + +4.4 Exemption of Liabilities With Respect to the Search Engine (by Party B) + +See Annex 1. The Parties agree that the exemption of liabilities in the annex is applicable to the transactions hereunder. Within the scope of exemption clause, Party B and its affiliates are not liable for any compensation or any other liabilities. + +Chapter 5 Information Content Cooperation + +5.1 The parties shall arrange an employee to be responsible for the coordination work so as to ensure the regular update and maintenance. + +5.2 Fees + + 5.2.1 The parties will not charge each other any fees for the shared information content. Unless otherwise agreed hereof, the feesincurred shall be borne by each party respectively. + + 5.2.2 The Actual Revenues of the parties arising from the Baidu promotion services in the search results pages shall be dividedproportionately, and Party A shall bear the taxes payable on its own share of revenues: + + (1) The address bar, search bar, homepage/blank page of Cheetah Browser shall use Baidu Search as default search engineservice; + + (2) The default traffic shall mean the default traffic of the website address site and the traffic of the Cheetah Browser; + + (3) The monthly average daily non-default traffic shall not exceed the default traffic. If it does, then the traffic in excess willnot form part of the basis for calculating the share of revenues; + + (4) If the default traffic is lower than ***, the share of revenues for the non-default traffic is ***%, and the share of revenuesfor the default traffic is ***%; + + (5) If the default traffic is more than ***, the share of revenues for the non-default traffic is ***%, and the share of revenuesfor the default traffic is ***%; + + (6) If the default traffic is more than ***, the share of revenues for the non-default traffic is ***%, and the share of revenuesfor the default traffic is ***%; 8 + + + + + + (7) If the default traffic is more than ***, the share of revenues for the non-default traffic is ***%, and the share of revenuesfor the default traffic is ***%; + + (8) If the default traffic is more than ***, the share of revenues for the non-default traffic is ***%, and the share of revenuesfor the default traffic is ***%; and + + (9) If the default traffic is more than ***, the share of revenues for the non-default traffic is ***%, and the share of revenuesfor the default traffic is ***%. + +If Party A objects to the Party B's revenue-sharing policy, it may terminate this Agreement. In the event that Party A continues to receive its share of revenues, it shall be deemed that Party A agrees with Party B's revenue-sharing. Party A shall bear the taxes payable on its own share of revenues. + + + +5.2.3 Party B confirms the share of revenues of the preceding month payable to Party A on the first day of each calendar month (hereinafter referred to as (the "Reference Date," and postponed in the event of public holidays) according to the above Article 5.2.2. Upon the confirmation of the share of revenues of such month, it shall not be adjusted, unless there is sufficient proof evidencing the statistics is not correct. + + 5.2.4 The financial settlement between the parties will be carried out monthly. + +Party A provides the invoice of the share of revenues in the preceding month within the first 5 working days in each month in advance, Party B warrants to pay the share of revenues to Party A prior to the 20t h day of each month (postponed in the event of public holidays) according to Article 4.1 hereof. In the event that Party A objects the payment from Party B, it shall propose within the first 5 working days in each month in writing, or it will be deemed as no objection. Party B shall review within three working days upon receipt of Party A's written objection and notify the results thereof to Party A. + + 5.2.5 After the effectiveness of this Agreement, in the event that the share of revenues payable to Party A in the preceding month is less than RMB 100, then it will be carried forward to the next month automatically and settled together according to the preceding provisions. + +Chapter 6 License + +6.1 The search results provided by Party B and the intellectual property of any related technology shall be owned by Party B, without authorization, Party A shall not amend, deduct, split or reverse Party B's technologies and programs. Party A shall not obtain the source codes of the programs of Party B with any methods. Without authorization, Party A shall not apply the service provided by Party B for other usage. + +6.2 "baidu" and are all registered trademarks of Party B. During the cooperation, if Party A has to use Party B's trademarks, it shall obtain Party B's prior written consent. Nevertheless, if this Agreement is terminated or either party rescinds this Agreement, Party A shall no longer use "baidu", and any other registered trademarks of Party B in its product page and promotions of all kinds. 9 + + + + + +Chapter 7 Confidentiality + +7.1 Any and all information acquired by the parties and their employees due to the execution or performance of this Agreement, including without limitation the scientific, business or internal information relating to technology, finance, marketing or management shall be the confidential information of the parties and their proprietary properties. + +7.2 The parties mutually covenant that they will keep each other's confidential information in strict confidence, and will use only for the purpose of this Agreement, shall not use or permit others to use the confidential information or disclose such to any third parties except the following events: + + 7.2.1 Upon the written consent of the other party; + + 7.2.2 As according to the orders or requirements of the competent courts, any governmental agencies or administrative agencies; + + 7.2.3 Such information becomes known to the public not for any deliberation, recklessness or negligence of either party or its agents,officers or employees; + +7.3 The parties are obliged to disclose the confidential information only to the employees necessary to know it and instruct such employees to be responsible for the confidential liability hereunder and be liable to the violation of the confidential liability of the employees. + +Chapter 8 Breach + +8.1 General Breach + +In the event either party breaches its obligations hereunder, the breach party shall immediately suspend its breach upon the receipt of the non-breach party's written notice requiring it to rectify its breach, and pay all the losses to the non-breaching party arising from such breach within ten (10) days. If the breach party continue to carry on the breaching conduct or does not perform its obligations, the non- breaching party shall have the right to terminate this Agreement in addition to the compensation for the breach. 10 + + + + + +8.2 Breach Liabilities + +If fault on both parties, they shall bear their respective liabilities according to their actual degree of fault. + +Chapter 9 Termination + +9.1 Termination Events + +This Agreement will be terminated upon any of the following events: + + 9.1.1 The Cooperation Term is expired and the parties determine not to renew; + + 9.1.2 The non-breaching party terminates this Agreement according to Article 8.1 hereof; + + 9.1.3 Either party is under bankruptcy or enters into liquidation or dissolution procedures; + + 9.1.4 If the Force Majeure lasts consecutively for thirty (30) days and above, either party may terminate this Agreement by awritten notice according to Article 11.7 and terminate this Agreement on the receipt date as defined herein. + +9.2 Matters after the Termination + + 9.2.1 Within fifteen (15) days upon the termination of this Agreement, the parties shall delete the links between their websites. + + 9.2.2 The termination of this Agreement shall not affect the unsettled payment hereunder or either party's payment obligation andother obligations or rights incurred before the termination. + + 9.2.3 Notwithstanding the termination of this Agreement, the obligations set forth in Chapter 7 and Chapter 10 are binding to bothparties. + +Chapter 10 Governing Laws and Dispute Resolution + +10.1 Governing Laws + +The execution, validity, construction, enforcement and the settlement of any disputes herefrom shall be governed by PRC Laws. + +10.2 Negotiation and Proceedings + + 10.2.1 Any dispute arising from the construction and enforcement of this Agreement shall be settled through friendly consultation ormediation by a neutral third party first. + + 10.2.2 If the dispute fails to be resolved within thirty (30) days by such method set forth above, either party shall submit to the court inthe location of Party B. 11 + + + + + +Chapter 11 Miscellaneous + +11.1 Waiver + +If either party fails to exercise or timely exercise its rights, power or preemptive rights hereunder, it shall not be deemed as a waiver; otherwise, any individual exercise or partially exercise any of its rights, power or preemptive rights shall not prejudice its exercise of such rights, power or preemptive rights thereafter. + +11.2 Amendment + +This Agreement may only be amended by mutual written agreement by the parties. + +11.3 Marketing Supports + +On the basis of the parties' acknowledgment, the parties will make and carry on necessary marketing measures to expand the reputation and influence of the parties cooperation. + +11.4 Entire Agreement + +This Agreement constitutes the entire agreement between the parties and supersedes all previous discussions, negotiations and agreements. + +11.5 Notice + + 11.5.1 Any material notices or written letters between the parties shall be in Chinese and delivered by facsimile, in person(includingcourier) or by registered mail. + + 11.5.2 All the notices and letters shall be sent to the address in the preamble hereof unless otherwise notified in writing in advance; + + + +11.5.3 If the notices and letters are sent by facsimile, then the delivery time shall be subject to the actual time displayed in the facsimile record, except that the sending time is after 17:00 pm of such date, or the time of the receiver's location is not a Business Day, then the delivery time shall be the following Business Day of the receiver's time; if sent via e-mail, the delivery time shall be subject to the time when the email enters into the email system designated by the receiver; if sent in person (including courier), it shall be subject to date the receiver's signing for receipt; if sent by registered letter, it shall be subject to the receipt issued by the post office and five (5) Business Days from the date of sending. 12 + + + + + +11.6 Successor + +This Agreement is made for the benefit of and equally binding upon the parties and their respective successors and assignees. + +11.7 Force Majeure + + 11.7.1 In the event of Force Majeure, the affected party shall notify the other party in respect of the nature, incurring date, anticipated lasting time and related details as fastest as reasonably possible and the degree of such event hindering the performance of its obligations of the notifying party hereunder. + + 11.7.2 During the consecutive period of the Force Majeure, the affected party shall regularly and timely keep the other party informed of the current status of the Force Majeure, in the event that the Force Majeure ends, it shall notify the other party in writing timely and continue to perform the obligations hereunder. + + 11.7.3 The party affected by the Force Majeure may temporarily suspend the performance hereunder until the influence of the Force Majeure is removed after it performs its obligations pursuant to Item 1 and 2 of this Article and need not to bear any breach liabilities; however, it shall use best efforts to conquer such event and minimize its adverse influence. + +11.8 Language + +This Agreement is made in Chinese and there are two originals which have the same legal effect and each party has one original. + +11.9 Unmentioned Matters + +Any other matters unmentioned hereof shall be subject to PRC Laws. + +11.10 Other Matters + +This Agreement is effective from the date of its date of signature and chop, and any other agreement between the parties regarding to matters which are similar to the cooperation contents hereunder shall be terminated automatically. Annexes are integral parts of this Agreement and have the same legal effect as the text hereof. 13 + + + + + +Party A: Beike Internet (Beijing) Security Technology Co., Ltd. + +Authorized signatory: /s/ common seal + +Title: + +Date: + +Party B: Baidu Online Network Technology (Beijing) Co., Ltd. + +Authorized signatory: /s/ Guolin Ma /s/ common seal + +Title: + +Date: 14 + + + + + +Annex 1 + +Search Engine Exemption Clause + +1. In addition to service clause indicated by Baidu, Baidu is not responsible for any other accident, negligence, breach, defamation, infringement to copyright or other intellectual property right and the loss occurred thereby (including by virus through download) arising from using search engine and will not undertake any legal liability. + +2. Baidu is not responsible for the legality of link and information, product and service obtained from webpages through search engine which are searched automatically in accordance with users' search order, and will not undertake any legal liability. + +3. All content of search engine does not represent Baidu's opinion. + +4. User shall undertake the risk of using search engine by itself and Baidu will not guarantee in any form, including the result meeting users' requirement, service continuity, safety, accuracy, timeliness and legality of search result. Baidu will not undertake any legal liability for user's failure to normally use Baidu for technology reason such as internet status, communication line and etc. + +5. Baidu respects and protects all search service users' personal privacy and their personal information such as registered user name and email address, etc., which will not be disclosed to the third party without user's consent or compulsorily required by law. The keywords used by users in search engine will not be regarded as personal privacy information. + +6. Any website shall report to service website or Baidu, or add refusal mark to the webpage in accordance with the Robots Exclusion Protocol, if it does not want to be included by Baidu, otherwise it will be deemed as willing to be included. + +7. Any unit or person shall report to Baidu or service website in written timely and provide ID card, ownership certificate and detailed violation evidence if it considers the content through Baidu search service or search link may be suspected of violating its legal right. Baidu will remove such suspected search service or search link as soon as possible after its receipt of legal documents above. 15 + + + + + +Annex 2 + +1. Display Format + +2. Table of Fee-charging Code and Corresponding Website Fee-charging item Channel Display location Search box on the first page 16 + + + + + +Annex 3 + +Business Cooperation Standard of Baidu Union + +In order to standardize the business cooperation of Baidu Union (hereinafter "Union") and maintain the fair and honest order, it is provided for the business cooperation of Union as follows and member of the Union shall comply with this standard strictly to maintain the smooth and healthy development of business cooperation. + +[General Rules] + +All act which may damage the right of user of Baidu promotion, damage user experience, disturb market cooperation order of the Union, adversely affect Baidu product and business reputation of Baidu, constitute unfair competition against Baidu or violate legal right of Baidu are forbidden by the Union, including but not limited to: + +1. Click by itself + +Repeat manual search, click by itself, incite others to search or click. + +2. Compel to click + +Compel user to click to get resource in return; or pop-up window of search result endlessly. + +3. Program click + +Simulate user's click through program or script, automatically click and search tool, the third party's click or search (such as paid click, auto- browse, clicker, IP click by agent servicer, fault IP click, mutual click and auto-refresh). + +4. Illegal promotion + +Promote by irregular means such as virus, compulsory first page, compulsory kidnap address bar, search engine cheating, exaggerate times. 17 + + + + + +5. Breach of exclusivity clause + +Breach the exclusivity agreement with Baidu to engage in competing business. + +6. Mix of competing business + +Amend the pattern of the Union product or competing business to mislead users. + +7. Other breach + +Other act Baidu thought has damaged or may damage the right of user of Baidu, user experience, Baidu brand or business reputation of Baidu, constitutes unfair competition against Baidu or violates other legal right of Baidu. + +[Search Promotion Cooperation] + +8. Determine keyword + +Determine keyword in search frame or direct link to search result page. + +9. Amend search result page + +9.1 Edit, amend or filtrate any promotion content or information contained in search result or amend the order by any means, or delete, hide or minimize any promotion content or search result, or add any other content to Baidu search result page of browser through software. + +9.2 Re-direct the final user from any promotion page or search result page to others, or the promotion page or search result page provided is not the same version with that got by final user through directly visited. + +9.3 Beyond the range permitted by this standard, directly or indirectly visit, launch and/or start promotion content or search result through any software, other website or any form other than member website, or combine promotion content or search result into it by other means. + +9.4 Store or cache any or part of, copy of, derivative of information of search result through "capture", "spider", index or any other non-temporary ways. 18 + + + + + +10. Directly use of search result + +Directly use any webpage of search result of final user through frame linked or other ways. + +11. Breach of release page + +11.1 Present business code on any wrong page, register page or "thanks" page (such as thanks page after user registers on relevant website) or any email, or any webpage or website with any pornographic content, hate mongering content or violence content. + +11.2 Release code in non-configured domain name. + +12. Induce to click + +12.1 Introduce the search result with word such as "excellent recommendation", "relevant link" or "welcome to click". + +12.2 Put graph of arrow, download instruction or other leading graph to the search result. + +12.3 Award user's click. + +13. Breach of release number + +Release more than three search frames per page. + +14. Flow kidnap + +14.1 Falsify the charge index by software, plug-in or other ways, kidnap Baidu, hao123 and other Union member's flow. + +14.2 Falsify other Union member's first page through any promotion way damaging user experience and other unfair competition. 19 + + + + + +14.3 Amend the first page of Baidu (www.baidu.com) or hao123 (www.hao123.com) set by user in any ways. + +14.4 Amend the page of Baidu or hao123 in any ways. + +15. Breach of binding with Baidu software + +Binding with Baidu software without any indication, install compulsory; add functions other than that of Baidu software or delete original function, re-bind other software without any indication, misleading the act of other software as that of Baidu; set obstacle for user installed Baidu software through member website to uninstall. + +[Union Promotion Cooperation] + +16. Determine keyword + +Stack keywords in webpage content, source code to affect normal theme matching. + +17. Amend promotion content + +17.1 Re-direct the promotion page clicked by user to others, which is not the same with that got by final user through directly visited. + +17.2 Store or cache any part of, copy of, derivative of promotion content through "capture", "spider", index or any other non-temporary ways. + +18. Breach of release page + +18.1 Present promotion content on any wrong page, register page or "thanks" page (such as thanks page after user registers on relevant website) or any email, or popup window, or webpage or website with any pornographic content, hate mongering content or violence content. + +18.2 Release theme promotion business on rubbish page with no essence for the purpose of presenting theme. + +18.3 Release promotion content in non-configured domain name or software. 20 + + + + + +19. Induce to click + +19.1 Introduce the promotion content with word such as "excellent recommendation", "relevant link" or "welcome to click". + +19.2 Put graph of arrow, download instruction or other or misleading graph to the promotion content. + +19.3 Award user's click of promotion content. + +19.4 Promotion content is too close to the text or click zone (such as turn-page button, navigation button, video window and etc.) causing void click (recommending not to put the promotion content above or below the turn-page button). + +19.5 Pretend the promotion content as the text of page which mix the promotion content with page content. + +19.6 Hide or auto-block the window through js or other ways, causing user's failure to see the promotion after click. + +19.7 Release code of special zone besides "patch promotion", amend code without authorization or patch through special ways. + +19.8 Cover, hide any part of theme promotion zone or overlap page content with promotion content. + +19.9 Float the promotion content or present in other ways. + +20. Breach of release number + +20.1 Release more than three product codes of "theme description" and "theme link" accumulatively per page. (not include the "patch promotion") + +20.2 Release more than one code of "theme suspension" per page besides "theme description" and "theme link", release more than one form of "theme suspension" (side bar/button/window) per page. + +20.3 Release more than one code of "patch promotion" per playing window, several playing windows on one webpage, more than three codes of "patch promotion" available. 21 + + + + + +21. Breach of using iframe + +Use through amending code or other ways without authorization. + +21.1 Use Union's "theme suspension" product through iframe. + +21.2 Use "theme description", "theme link" and "patch promotion" product through iframe in illegal ways: + +21.2.1 Release code of Union promotion business to more than two (including) layers of iframe; + +21.2.2 Use more than two (include) business codes through iframe for one time; + +21.2.3 Inset more than one iframe unit in one page; + +21.2.4 Module presented by iframe is smaller than that used through iframe; + +21.2.5 Present promotion content on charged website through non-charged website iframe. + +[New Business Cooperation] + +22. Breach of release page + +Present promotion content on any wrong page, register page or "thanks" page (such as thanks page after user registers on relevant website) or any email, or webpage or website with any pornographic content, hate mongering content or violence content. + +23. Induce + +23.1 Introduce the cooperation promotion content with word such as "excellent recommendation", "relevant link" or "welcome to click". 22 + + + + + +23.2 Put graph of arrow, download instruction or other leading graph to the cooperation promotion content. + +23.3 Put pornographic picture close to cooperation promotion content. + +23.4 Award use's install, register, purchase and other act. + +23.5 Simulate official website of cooperation promotion client. + +24. Breach of release number + +Present or release more than three cooperation promotion units per page. + +25. Self-lead + +Repeat manual install, register, purchase and etc., incite others to install, register, purchase and etc. + +If any Union member does any illegal act above, Baidu has the power to punish. Baidu's data for investigating and punishing the Union member's illegal act shall prevail, including but not limited to void click data and flow kidnap data. + +Appendix: Process method + +Baidu may take one or more measures as follows to process the illegal act: + +1. Deduct credit index + +2. Deduct accumulated credit + +3. Deduct share of revenues + +4. Block illegal business + +5. Stop sub-account authority + +6. Limit register information + +7. Expose illegal case 23 + + + + + +Baidu has the right of final explanation for this Business Cooperation Standard of Baidu Union. Baidu may update this Business Cooperation Standard of Baidu Union from time to time and all Baidu Union members are urged to pay continued attention to relevant content to learn and timely comply with the latest regulation. 24 + + + + + +Annex 4 + +Rules of "Blue Sky 365" Plan + +Honesty is the basis for long-standing business. We could only make more profit, grow faster with stronger cooperation based on honesty. + +Honesty is not only a promise but also an act. Hereby, Baidu Alliance, together with partner, build an alliance circle of honesty and health, a cooperation environment of self-discipline, fairness and honesty and comply with rules as follows strictly: + +1. Agree that honesty is the base of alliance development; + +2. Cooperate in line with the Business Cooperation Standard of Baidu Alliance strictly; + +3. Dose not launch or engage in any illegal act such as click fraud, flow kidnap; + +4. Report the illegal information actively and protect honesty; + +5. Accept supervision and willing to undertake liability and result of illegal act. + +The rules above shall be reflected every day. Let us build the "Blue Sky 365" of alliance circle together. 25 \ No newline at end of file diff --git a/full_contract_txt/CHERRYHILLMORTGAGEINVESTMENTCORP_09_26_2013-EX-10.1-Strategic Alliance Agreement.txt b/full_contract_txt/CHERRYHILLMORTGAGEINVESTMENTCORP_09_26_2013-EX-10.1-Strategic Alliance Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..6ca4947a0b361c0970164603622639939eda60a7 --- /dev/null +++ b/full_contract_txt/CHERRYHILLMORTGAGEINVESTMENTCORP_09_26_2013-EX-10.1-Strategic Alliance Agreement.txt @@ -0,0 +1,251 @@ +Exhibit 10.1 + +Strategic Alliance Agreement + +AGREEMENT made as of , 2013, between Freedom Mortgage Corporation, a New Jersey corporation ("Freedom Mortgage"), and Cherry Hill Mortgage Investment Corp., a Maryland corporation ("Cherry Hill"). + +WITNESSETH: + +WHEREAS, Freedom Mortgage is a privately held, national mortgage bank that originates and services mortgage loans secured by liens on one- to four-family properties; and + +WHEREAS, Cherry Hill is a newly formed affiliate of Freedom Mortgage that intends to elect and qualify as a Real Estate Investment Trust under the Internal Revenue Code of 1986, as amended; and + +WHEREAS, Cherry Hill will have access to capital, including capital raised through one or more offerings of its securities; and + +WHEREAS, Cherry Hill will seek to benefit from having a consistent and predictable source of real estate assets from Freedom Mortgage, and Freedom Mortgage will seek to benefit from the liquidity available to Cherry Hill; and + +WHEREAS, the parties desire to set forth the terms of a strategic alliance that is expected to benefit them both; + +NOW, THEREFORE, in consideration of the foregoing, and of other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties here to agree as follows. + +Section 1. Definitions. + +(a) The following terms shall have the meanings specified wherever used in this Agreement. + +Acknowledgement Agreement: The Acknowledgement Agreement to be entered into by Freedom Mortgage, as Issuer, Cherry Hill, as Secured Party, and the Government National Mortgage Association. + +Action: Any civil, criminal, investigative or administrative claim, demand, action, suit, charge, citation, complaint, notice of violation, proceeding (public or private), litigation, prosecution, arbitration or inquiry by or before any Governmental Entity whether at law, in equity or otherwise. + +Agreement: This Strategic Alliance Agreement as the same may be amended in accordance with the terms hereof. + +1 + + + + + +Ancillary Agreements: The Acknowledgement Agreement, the Purchase Agreement and the Flow Agreement. + +Base Servicing Fee: As to any Mortgage Loan and any Collection Period, an amount equal to the product of the Base Servicing Fee Rate, the UPB of that Mortgage Loan as of the related Measurement Date and 1/12 or, for the first Collection Period, the number of days in such Collection Period divided by 360; provided, however, that payment of the Base Servicing Fee for any delinquent Mortgage Loan shall be suspended unless and until Freedom Mortgage recovers the amount thereof from payments in respect thereof from the related mortgagor or the amount thereof is otherwise recovered from liquidation of the related property. + +Base Servicing Fee Rate: As to any Mortgage Loan, the per annum rate specified to be payable to Freedom Mortgage to cover the actual costs of servicing. For example, the Base Servicing Fee Rate for the Mortgage Loans in the initial pool will be eight (8) basis points. + +Business Day: Any day other than a Saturday or Sunday or a day on which banks in New Jersey and New York are authorized or obligated by law to close. + +Closing: The closing of the initial public offering of the common stock of Cherry Hill. + +Closing Date: The date of the Closing. + +Collection Period: The period beginning on the Closing Date and ending on the last day of the calendar month in which the Closing Date occurs and each calendar month thereafter. + +Excess MSR: As to any Mortgage Loan, the portion of the servicing fee for that Mortgage Loan that exceeds the Base Servicing Fee. + +Flow Agreement : The Flow and Bulk Purchase Agreement to be entered into between Cherry Hill, as purchaser, and Freedom Mortgage, as seller, substantially in the form of Exhibit B attached hereto. + +GAAP: Generally accepted accounting principles in the United States as in effect from time to time as set forth in the statements, pronouncements and opinions of the Accounting Principles Board and the American Institute of Certified Public Accountants. + +Ginnie Mae: The Government National Mortgage Association, a corporation within the United States Department of Housing and Urban Development. + +Governmental Entity: Any federal, state or local governmental authority, agency, commission or court or self-regulatory authority or commission. + +Guide: The Ginnie Mae Mortgage Backed Securities Guide. + +Law: Any law, statute, ordinance, rule, regulation, code, Permit, Order, or decree of any Governmental Entity. + +2 + + + + + +Lien: Any lien, pledge, security interest, mortgage, deed of trust, claim, encumbrance, easement, servitude, encroachment, covenant, charge or similar right of any other Person of any kind or nature whatsoever. + +Material Adverse Effect: Any effect, event, circumstance, development or change that, individually or in the aggregate, has or is reasonably likely to have a material adverse effect on the ability of the named Party to consummate the Transactions or perform its material obligations hereunder. + +Measurement Date: As to any Collection Period, the first day of such Collection Period. + +Mortgage Loan: A loan originated and serviced by Freedom Mortgage and secured by a first lien on a one- to four- family residential property. + +MSR: The compensation owing to a servicer of a Mortgage Loan for servicing such loan. + +Order: Any applicable order, judgment, ruling, injunction, assessment, award, decree, writ, temporary restraining order, or any other order of any nature enacted, issued, promulgated, enforced or entered by a Governmental Entity. + +Party: Either Freedom Mortgage or Cherry Hill, as the context may require. + +Permit: Any license, permit, authorization, approval or consent issued by a Governmental Entity. + +Person: Any individual, corporation (including any non-profit corporation), general or limited partnership, limited liability company, limited liability partnership, joint venture, estate, trust, unincorporated organization, association, organization or other entity or form of business enterprise or Governmental Entity. + +Purchase Agreement: The Excess MSR Acquisition and Recapture Agreement to be entered into by Cherry Hill, as purchaser, and Freedom Mortgage, as seller, substantially in the form of Exhibit A attached hereto. + +Standby Trigger Event: The existence of any of the following: (i) Freedom Mortgage's Tangible Net Worth is less than the sum of $40,000,000 plus the required net worth determined in accordance with HUD's regulations; (ii) the percentage of the loans serviced for Ginnie Mae that are more than 90 days delinquent, determined as provided in the Ginnie Mae guide, exceeds 4.25% as of any date such delinquency percentage is reported to Ginnie Mae in accordance with that guide; (iii) the existence of a default, an event of default or an event which with the giving of notice or the passage of time or both, will become a default or an event of default under any warehouse agreement of Freedom Mortgage; or (iv) Freedom Mortgage's cash and cash equivalents are less than $50,000,000. + +3 + + + + + +Tangible Net Worth: The net worth of Seller determined in accordance with GAAP, minus all intangibles determined in accordance with GAAP (including goodwill, capitalized financing costs and capitalized administration costs but excluding originated and purchased mortgage servicing rights or retained residual securities) and any and all advances to, investments in and receivables held from affiliates; provided, however, that the non­cash effect (gain or loss) of any mark­to­market adjustments made directly to stockholders' equity for fluctuation of the value of financial instruments as mandated under the Statement of Financial Accounting Standards No. 133 (or any successor statement) shall be excluded from the calculation of Tangible Net Worth. + +Transactions: The execution, delivery and performance of this Agreement and the Ancillary Agreements and the performance of the other obligations set forth herein and therein. + +UPB: As to any Mortgage Loan and any date of determination, the unpaid principal balance of such Mortgage Loan as of such date. + +(b) When a reference is made in this Agreement to Sections or Exhibits, such reference shall be to a Section of or Exhibit to this Agreement unless otherwise indicated. Whenever the words "herein" or "hereunder" are used in this Agreement, they will be deemed to refer to this Agreement as a whole and not to any specific Section. References to Sections include subsections which are part of the related Section. Any Law defined herein will mean such Law as amended and will include any successor Law. The table of contents, index and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Whenever the words "include", "includes" or "including" are used in this Agreement, they shall be deemed to be followed by the words "without limitation". Any singular term in this Agreement will be deemed to include the plural, and any plural term the singular. All pronouns and variations of pronouns will be deemed to refer to the feminine, masculine or neuter, singular or plural, as the identity of the person referred to may require. The phrases "the date of this Agreement", "the date hereof' and terms of similar import, unless the context otherwise requires, shall be deemed to refer to the date set forth in the preamble to this Agreement. Whenever a dollar figure ($) is used in this Agreement, it will mean United States dollars unless otherwise specified. + +Section 2. The Acknowledgement Agreement + +(a) Prior to the purchase and sale of Excess MSRs as contemplated by the Purchase Agreement, Freedom Mortgage and Cherry Hill shall execute the Acknowledgement Agreement with Ginnie Mae. + +(b) Freedom Mortgage agrees that if a Standby Issuer (as defined in the Acknowledgement Agreement) has not yet been appointed, upon the occurrence of a Standby Trigger Event, it shall designate a Standby Issuer reasonably satisfactory to Cherry Hill and shall use its commercially reasonable efforts to cause such Standby Issuer to agree to act as such and to be accepted by Ginnie Mae as the Standby Issuer referred to in the Acknowledgement Agreement. Any costs or expenses incurred in connection with such designation, agreement and/or approval shall be paid by Freedom Mortgage. + +(c) Cherry Hill agrees that upon the request of Freedom Mortgage, Cherry Hill shall cooperate with Freedom Mortgage's efforts to cause the Acknowledgement Agreement to be revised or replaced with an alternative arrangement proposed by Freedom Mortgage that is acceptable to Ginnie Mae and that will provide Cherry Hill with benefits, rights and remedies that are, in the reasonable judgment of Cherry Hill, not materially less favorable than those provided under the Acknowledgement Agreement. + +4 + + + + + +(d) The Purchase Agreement will provide that Freedom Mortgage will indemnify Cherry Hill against, and hold it harmless from, any loss, cost or expense incurred by Cherry Hill as a result of Ginnie Mae's termination for cause of Freedom Mortgage as an issuer. + +Section 3. Ancillary Agreements. + +On or prior to the Closing Date, Cherry Hill and Freedom Mortgage shall enter into the Purchase Agreement and the Flow Agreement. + +Section 4. Representations and Warranties. + +(a) Freedom Mortgage represents and warrants to Cherry Hill that the statements contained in this Section 4(a) are true and correct in all material respects as of the date of this Agreement (or, if made as of a different specified date, as of such date) and will be true and correct in all material respects as of the Closing Date (as though made then and as though the Closing Date were substituted for the date of this Agreement throughout this Section 4(a)). + +(i) Freedom Mortgage is duly organized and validly existing and in good standing under the laws of the jurisdiction of its organization. Freedom Mortgage has all requisite corporate power and authority to own, lease and operate its assets and carry on its business as now conducted. Freedom Mortgage is duly licensed or qualified to do business in each jurisdiction where its ownership or leasing of assets or the conduct of its business requires such qualification, except where the failure to obtain such license or qualification would not reasonably be expected to have a Material Adverse Effect. + +(ii) Freedom Mortgage has full corporate power and authority to execute and deliver this Agreement and the Ancillary Agreements and to consummate the Transactions. The execution and delivery of this Agreement by Freedom Mortgage and the completion by Freedom Mortgage of the Transactions have been duly and validly authorized by all necessary corporate action of Freedom Mortgage. This Agreement has been duly and validly executed and delivered by Freedom Mortgage and constitutes the valid and binding obligation of Freedom Mortgage, enforceable against Freedom Mortgage in accordance with its terms, subject to applicable bankruptcy, insolvency and similar Laws affecting creditors' rights generally, and subject, as to enforceability, to general principles of equity, whether applied in a court of law or a court of equity. + +(iii) The execution and delivery of this Agreement and the consummation of the Transactions and compliance by Freedom Mortgage with any of the terms or provisions hereof will not: (i) conflict with or result in a breach or violation of or a default under any provision of the organizational documents of Freedom Mortgage; (ii) violate any Law applicable to Freedom Mortgage or any of its material properties or assets or enable any Person to enjoin the Transactions; or (iii) violate, conflict with, result + +5 + + + + + +in a breach of any provisions of, constitute a default (or an event which, with notice or lapse of time, or both, would constitute a default) under, result in the termination of, accelerate the performance required by, or result in a right of termination or acceleration or the creation of any Lien upon any of the properties or assets of Freedom Mortgage under any of the terms, conditions or provisions of any material contract to which Freedom Mortgage is a party, or by which it or any of its properties or assets may be bound or affected. + +(iv) No consents, waivers or approvals of, or filings or registrations with, any Governmental Entity are necessary, and no consents, waivers or approvals of, or filings or registrations by Freedom Mortgage with, any other third parties are necessary, in connection with the execution and delivery of this Agreement by Freedom Mortgage, and the completion by Freedom Mortgage of the Transactions. + +(v) Freedom Mortgage has all Permits of, and has made all filings, applications and registrations with, all Governmental Entities that are required in order for it to consummate the Transactions; all such Permits are in full force and effect and, to the knowledge of Freedom Mortgage, no suspension or cancellation of any such Permit is threatened or will result from the consummation of the Transactions. + +(vi) Freedom Mortgage is not a party to any, nor are there pending, or to Freedom Mortgage's knowledge, threatened Actions (i) challenging the validity or propriety of any of the Transactions or (ii) which could materially and adversely affect the ability of Freedom Mortgage to perform under this Agreement or any Ancillary Agreement. + +(b) Cherry Hill represents and warrants to Freedom Mortgage that the statements contained in this Section 4(b) are true and correct in all material respects as of the date of this Agreement (or, if made as of a different specified date, as of such date) and will be true and correct in all material respects as of the Closing Date (as though made then and as though the Closing Date were substituted for the date of this Agreement throughout this Section 4(b)) and as of the date of any purchase and sale of Excess MSRs as contemplated hereby. + +(i) Cherry Hill is duly organized and validly existing and in good standing under the laws of the jurisdiction of its organization. Cherry Hill has all requisite corporate power and authority to own, lease and operate its assets and carry on its business as now conducted. Cherry Hill is duly licensed or qualified to do business in each jurisdiction where its ownership or leasing of assets or the conduct of its business requires such qualification, except where the failure to obtain such license or qualification would not reasonably be expected to have a Material Adverse Effect. + +(ii) Cherry Hill has full corporate power and authority to execute and deliver this Agreement and the Ancillary Agreements and to consummate the Transactions. The execution and delivery of this Agreement by Cherry Hill and the completion by Cherry Hill of the Transactions have been duly and validly authorized by all necessary corporate action of Cherry Hill. This Agreement has been duly and validly executed and delivered by Cherry Hill and constitutes the valid and binding obligation of Cherry Hill, enforceable against Cherry Hill in accordance with its terms, subject to applicable bankruptcy, insolvency and similar Laws affecting creditors' rights generally, and subject, as to enforceability, to general principles of equity, whether applied in a court of law or a court of equity. + +6 + + + + + +(iii) The execution and delivery of this Agreement and the consummation of the Transactions and compliance by Cherry Hill with any of the terms or provisions hereof will not: (i) conflict with or result in a breach or violation of or a default under any provision of the organizational documents of Cherry Hill; (ii) violate any Law applicable to Cherry Hill or any of its material properties or assets or enable any Person to enjoin the Transactions; or (iii) violate, conflict with, result in a breach of any provisions of, constitute a default (or an event which, with notice or lapse of time, or both, would constitute a default) under, result in the termination of, accelerate the performance required by, or result in a right of termination or acceleration or the creation of any Lien upon any of the properties or assets of Cherry Hill under any of the terms, conditions or provisions of any material contract to which Cherry Hill is a party, or by which it or any of its properties or assets may be bound or affected. + +(iv) No consents, waivers or approvals of, or filings or registrations with, any Governmental Entity are necessary, and no consents, waivers or approvals of, or filings or registrations by Cherry Hill with, any other third parties are necessary, in connection with the execution and delivery of this Agreement by Cherry Hill, and the completion by Cherry Hill of the Transactions. + +(v) Cherry Hill has all Permits of, and has made all filings, applications and registrations with, all Governmental Entities that are required in order for it to consummate the Transactions; all such Permits are in full force and effect and, to the knowledge of Cherry Hill, no suspension or cancellation of any such Permit is threatened or will result from the consummation of the Transactions. + +(vi) Cherry Hill is not a party to any, nor are there pending, or to Cherry Hill's knowledge, threatened Actions (i) challenging the validity or propriety of any of the Transactions or (ii) which could materially and adversely affect the ability of Cherry Hill to perform under this Agreement. + +Section 5. Term and Termination. + +(a) Unless earlier terminated as provided below, this Agreement shall remain in effect until the later to occur of the date that is (x) three (3) years from the date hereof and (y) the date on which an affiliate of Freedom Mortgage is not acting as the external manager of Cherry Hill. + +(b) In the event that a party materially breaches any representation or covenant herein, the other party may give written notice of the breach requiring the same to be remedied within 30 days of receipt of such notice. If the breaching party fails to remedy the material breach in such time period, the non-breaching party may terminate this Agreement by delivery of a written termination notice to the breaching party. Any such termination shall not relieve the breaching party from any obligation or liability arising prior to such termination. + +7 + + + + + +Section 6. Miscellaneous. + +(a) All notices or other communications hereunder shall be in writing and shall be deemed given if delivered by receipted hand delivery or mailed by prepaid registered or certified mail (return receipt requested) or by recognized overnight courier addressed as follows: + +If to Freedom Mortgage to: + + + +Freedom Mortgage Company 907 Pleasant Valley Ave., Suite 3 Mount Laurel, New Jersey 08054 Attention: Chief Corporate Counsel + +If to Cherry Hill to: + + + +Cherry Hill Mortgage Investment Corp. 301 Harper Drive Moorestown, New Jersey 08057 Attention: Chief Financial Officer + +or such other address as shall be furnished in writing by any Party. Any such notice or communication shall be deemed to have been given: (i) as of the date delivered by hand; (ii) three (3) Business Days after being delivered to the U.S. mail, postage prepaid; or (iii) one (1) Business Day after being delivered to the overnight courier. + +(b) This Agreement shall be binding upon and shall inure to the benefit of the Parties and their respective successors and permitted assigns; provided, however, that neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any Party without the prior written consent of the other Party. Nothing in this Agreement is intended to confer upon any other Person any rights or remedies under or by reason of this Agreement. + +(c) This Agreement, including the Exhibits and Schedules hereto and the documents and other writings referred to herein or therein or delivered pursuant hereto, contains the entire agreement and understanding of the Parties with respect to its subject matter. There are no restrictions, agreements, promises, warranties, covenants or undertakings between the Parties other than those expressly set forth herein or therein. This Agreement supersedes all prior agreements and understandings between the Parties, both written and oral, with respect to its subject matter. + +(d) This Agreement may be executed in two or more counterparts, including by facsimile or electronic transmission, each of which shall be deemed an original but all of such counterparts together shall be deemed to be one and the same agreement. + +(e) In the event that any one or more provisions of this Agreement shall for any reason be held invalid, illegal or unenforceable in any respect, by any court of competent jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provisions of this Agreement and the Parties shall use their reasonable efforts to substitute a valid, legal and enforceable provision which, insofar as practical, implements the purposes and intents of this Agreement. + +8 + + + + + +(f) The Parties may (i) amend this Agreement, (ii) extend the time for the performance of any of the obligations or other acts of any other Party, (iii) waive any inaccuracies in the representations and warranties contained herein or in any document delivered pursuant hereto, or (iv) waive compliance with any of the agreements or conditions contained herein. This Agreement may not be amended except by an instrument in writing signed on behalf of each of the Parties. Any agreement on the part of a Party to any extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such Party, but such waiver or failure to insist on strict compliance with such obligation, covenant, agreement or condition shall not operate as a waiver of, or estoppel with respect to, any subsequent or other failure. + +(g) This Agreement shall be governed by the laws of the State of New York, without giving effect to its principles of conflicts of laws, other than Section 5-1401 of the New York General Obligations Law. + +(h) Each Party irrevocably submits to the jurisdiction, including the personal jurisdiction, of (i) any New York State court sitting in New York County, and (ii) any Federal court of the United States sitting in New York County in the State of New York, solely for the purposes of any suit, action or other proceeding between any of the Parties arising out of this Agreement or the Transactions. Each Party agrees to commence any suit, action or proceeding relating hereto only in any Federal court of the United States sitting in New York County in the State of New York or, if such suit, action or other proceeding may not be brought in such court for reasons of subject matter jurisdiction, in any New York State court sitting in New York County. Each Party irrevocably and unconditionally waives any objection to the laying of venue of any suit, action or proceeding between any of the Parties arising out of this Agreement or the Transactions in (i) any New York State court sitting in New York County, and (ii) any Federal court of the United States sitting in New York County in the State of New York, and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. Each Party irrevocably agrees to request that the applicable court adjudicate any covered claim on an expedited basis and to cooperate with each other to assure that an expedited resolution of any such dispute is achieved. Each Party irrevocably agrees to abide by the rules or procedure applied by the Federal courts or New York State courts (as the case may be) (including but not limited to procedures for expedited pre-trial discovery) and waive any objection to any such procedure on the ground that such procedure would not be permitted in the courts of some other jurisdiction or would be contrary to the laws of some other jurisdiction. Each Party further irrevocably consents to the service of process out of any of the aforementioned courts in any such suit, action or other proceeding by the mailing of copies thereof by registered mail to such Party at its address set forth in this Agreement, such service of process to be effective upon acknowledgment of receipt of such registered mail; provided, that nothing in this Section 6(h) shall affect the right of any Party to serve legal process in any other manner permitted by Law. + +(i) The Parties agree that irreparable damage would occur in the event that the provisions contained in this Agreement were not performed in accordance with its specific terms or were otherwise breached. It is accordingly agreed that the Parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof in any court of the United States or any state having jurisdiction, this being in addition to any other remedy to which they are entitled at law or in equity. + +9 + + + + + +(j) FREEDOM MORTGAGE AND CHERRY HILL HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. + +[The remainder of this page left blank intentionally] + +10 + + + + + +IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above-written. + + FREEDOM MORTGAGE CORPORATION + +By: + + Name: Title: + +CHERRY HILL MORTGAGE INVESTMENT CORP. + +By: + + Name: Title: \ No newline at end of file diff --git a/full_contract_txt/CHINARECYCLINGENERGYCORP_11_14_2013-EX-10.6-Cooperation Agreement.txt b/full_contract_txt/CHINARECYCLINGENERGYCORP_11_14_2013-EX-10.6-Cooperation Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..7a0de0651a4ac4411fd3c35e07c6b7b980b5dac2 --- /dev/null +++ b/full_contract_txt/CHINARECYCLINGENERGYCORP_11_14_2013-EX-10.6-Cooperation Agreement.txt @@ -0,0 +1,99 @@ +Xi'an Zhonghong New Energy Technology Co., Ltd. Boxing County Chengli Gas Supply Co., Ltd. + +Project Cooperation Agreement July 2013 + + + + + + + + + + + +Cooperation Agreement Coke Dry Quenching (CDQ) and CDQ Waste Heat Power Generation Project Party A: Xi'an Zhonghong New Energy Technology Co., Ltd. Legal Representative: Ku Guohua Xi'an Zhonghong New Energy Technology Co., Ltd. is a subsidiary of Xi'an TCH Energy Technology Co. and is also the third tire subsidiary of China Recycling Energy Corporation, and it engages in the project operations in China. China Recycling Energy Corporation (the "Company") is a NASDAQ listing company. Its stock trading symbol is CREG and is a leading industrial waste-to-energy solution provider in China. The Company is the first in the recycling energy industry with the most completed projects and the widest ranges in the industry. As the direct investor, the Company provides recycling energy integrated solution covering technology, investment, and operation. Party B: Boxing County Chengli Gas Supply Co., Ltd. Legal Representative: Li Shuxun Boxing County Chengli Gas Supply Co., Ltd. is located in the Industrial Park, Chunhua Town, Boxing County, Shandong Province, which is mainly engaged in coal coke production and coal chemical industry. After friendly negotiation between two parties, based on the principle of equality and autonomy, Party A and Party B reached following items with respect to the coke dry quenching (CDQ) and CDQ waste heat power generation project. Item One, Investment Construction Projects 1. Construction of CDQ and CDQ recycling economic projects Construct CDQ system and CDQ waste heat power generation station as a part of of tamping coke oven with 2 x 60 holes, 5.5 meters and JNDK55-07 of model at Boxing County Chengli Gas Supply Co., Ltd. The designed total capacity is 25 MW. 2. Under the premise of consistent with the CDQ main equipment and main parameter descriptions, Party A will be in charge of layout, technical performance index and technical specifications of CDQ system and CDQ waste heat power generation system; if there is any difference between CDQ main equipment and main parameters description, Party B will make the decision. Major equipment and design will be implemented after Party A obtains Party B's consent. All requirements, statistics should be scientific, reasonable, and operable. + + + + + + + + + + + +3. Party A is responsible for the investment in the construction and operation of CDQ system and CDQ waste heat power generation system project, including design of the project, equipment selection, equipment procurement and manufacturing, construction, engineering, installation, formal power generation. Item Two, Operation of Recycling Project 1. After complete of the project construction, Party A shall be responsible for the operation, maintenance and management of the recycling project. Party A shall charge Party B energy saving service fee according to the income from CDQ waste heat power generation station. 2. Both Parties jointly determine the territorial boundary line of power transmission pursing to technical appendix. 3. The operation of CDQ system and CDQ waste heat power generation system includes but is not limited to: equipment maintenance, repair, and update; Party A will not be responsible for the quality and quantity of the coal coke of CDQ. Item Three, Cost and Operation Target Party B shall pay Party A energy saving service fee after the construction of CDQ system and CDQ waste heat power generation system are completed (upon passing evaluation of the ability of connection to the grid for power generation). 1. The energy saving service fee is paid in the form of electricity fee. The calculation basis of energy saving service fee is as follows: average operational time is 8,000 hours per annually; if the annual average operational time was less than 8,000 hours due to the reasons of Party B, the operational time is calculated as 8,000 hours per year; if the annual average operational time was less than 8,000 hours due to the reasons by Party A, the operational time is calculated based on the actual operational hours. 2. If the grid-connected electricity price is adjusted since the execution of this agreement, the fee shall be calculated as the energy saving service fee (stipulated in section 1 of Item III ) plus 85% of the price change/adjustment from the original grid-connected electricity price. The starting day for the change will be from the date of adjustment by Shandong Provincial Price Department. 3. The amount of power generated shall be calculated based on the indicator of electricity meter in the power station. 4. The settlement date is the first day of the next month. Deducting the dues of Party A, Party B should pay Party A the energy saving service fee of the last month before the 15t h of each month. + + + + + + + + + + + +5. Payment method: Wire or transfer. 6. The policy rebate, award, and preferential treatment shall be shared by both Parties. Each party shares 50% of the policy rebate, award, and preferential treatment. Both Parties share the expenses incurred in the process of the application for the policy rebate, award, and preferential treatment. Item Four Starting and End Date for Recycling Project and Term 1. The date when Party A completes the construction and installation of CDQ system and CDQ waste heat power generation system and the power generating system has been in operation and meets the requirements of the design standard for 72 hours. The Parties agree that date after the recycling project meets the evaluation requirement as the starting date for the recycling project. From that date, Party B shall pay the service fees monthly according to the power generated and Party B shall also pay for the power generated during the 72 hours testing run period. 2. The cooperation model is BO model. The expected total project cost is 176 million RMB. For the amount of electricity generated up to 800 million KWH after the project is put into operation, it shall be charged of the energy saving service fee at 0.40 RMB/KWH. After 800 million KWH, it shall be charged energy saving service fee with the rate of 0.20 RMB/KWH. The term of the agreement is 20 years, during which if any main equipment of any Party stops operation due to technical problem or at the end of its life cycle, the agreement shall be automatically terminated. In case of that happens, the Party B will have the full rights to dispose the system of Party A. Item Five Construction and Construction Period of CDQ System and CDQ waste heat power generation system 1. The construction period of the project is 12 months from the execution of technology agreement. If the project was delayed due to Party A, Party B has right to dispose the equipment on the construction site after two month past due date. 2. If the project is stalled due to Party B's reason (including but not limited its activities that affect daily construction, installation, testing and safety), the construction period shall be extended accordingly. 3. If any party delays the construction without a good reason, which results the construction of the whole project or part of the project cannot be completed on schedule, the other party has right to terminate wholly or part of the agreement and incurred loss will be assumed by the breaching party. + + + + + + + + + + + +Item Six Raw Material Consumption of the project of CDQ system and CDQ waste heat power generation system 1. All raw materials such as water, electricity consumed in the operation of the project shall be settled based on the party B's local price. Party A makes monthly payment. Party B provides pipeline up to designated boundary line on the construction site and then Party A will connect water lines and electricity lines into the site and assumes related expenses. 2. The Parties agree that Party B shall provide steady qualified coal coke production according to the technology agreement which will be used for CDQ system. Party A guarantees the steady operation of the CDQ and CDQ waste heat power generating systems. 3. Party B shall provide effective assistance to the construction and operation management of the recycling project. 4. The land for CDQ and CDQ waste heat power generation project shall be provided by Party B to Party A with no charge. Item Seven Meter Confirmation, Management and Maintenance 1. The power generation system of Party A has electricity meters. If Party B wants to separately conduct electricity measurement, the meters shall be provided by Party B and be responsible for the its maintenance and expenses. 2. The selection and maintenance of meters shall not affect the normal operation of CDQ and CDQ waste heat power generation project. 3. Both Parties have right to examine and verify the electricity meters so as to make sure their accuracy. Item Eight Ownership and Intellectual Property of the Recycling Project 1. During the contact period, Party A has the ownership of the CDQ and CDQ waste heat power generation systems. After the termination of the contact, Party B has the disposition right to the project. 2. The intellectual property of the project belongs to Party A. Without written consent of Party A, Party B is not allowed to disclose the intellectual property to the other third party. + + + + + + + + + + + +Item Nine Quality Assurance 1. Party A is responsible for the equipment quality, technical performance, and construction quality. Party B is responsible for the technical specifications and energy media quality. 2. For the CDQ system and waste heat power generation of CDQ system of Party A, Party B shall keep the coking and CDQ process functional, and provide necessary guidance and assistance. Parties shall fully cooperate to ensure the quality of the project. Item Ten Warrants of Party A Besides responsibilities in this agreement, Party A shall also: 1. Keep the power station operating properly and ensure that the electricity supplied to Party B complies with national safety standards. 2. Ensure the safety of its employees during construction and operation. 3. Provide reliable technical support and guarantee for the project. 4. Responsible for the operation of CDQ system and waste heat power generation from CDQ system, and bear operation costs. 5. Responsible for the design, equipment procurement, construction, installation, and test and adjustment. Item Eleven Warrants of Party B Besides responsibilities in this agreement, Party B shall also: 1. Provide Performance Guarantee Letter to state that Party B will purchase all electricity generated from the project. 2. Responsible for the permits and approvals for operation of the project. Party A is responsible for the permits, inspection and acceptance of the construction and Party B provides assistance. 3. Purchase all generated electricity from the project. 4. Cooperate with Party A's due diligence and provide required documents, and ensure that provided documents are true and authentic. 5. Provide leveled construction site. For details, refer to the Technology Attachment. + + + + + + + + + + + +Item Twelve Promises 1. Party A and B agree to have long-term cooperation for current and further recycling energy projects. Party A has priority to develop further recycling energy projects for Party B. 2. If the change or update of industrial process or facility of Party B forces Party A to change its system, Party A will use new system cost and loss for replacement as the new system cost to calculate numbers according to Item Three to continue execute the project. 3. From the starting day of the project, Party B must ensure that the coking system works properly and working hours of the CDQ system must be no less than 8,000 hours/year. Party A must ensure the waste heat power generation system of CDQ working hours no less than 7,200 hours/year. Item Thirteen Liability for Breach of Agreements 1. Unless otherwise agreed, either party cannot change or terminate the agreement without written consent of the other party except for force majeure. Equipment of both parties must work properly. 2. Party B shall pay Party A the energy saving service fee at the stipulated time, otherwise: 2.1 If Party B fails to pay Party A the energy saving service fee by 15t h of the month and the delay is within 60 days, the daily penalty is 0.05% of the overdue payment. 2.2 If the delay is over 60 days, it is regarded that Party B has no ability to perform its payment obligation. Party A can enforce the Performance Guarantee by Party B to take all project assets. Party B shall pay the actual energy saving service fees at once and pay Party A losses. 3. If any event affects the ability to its continue operation of the Party A or Party B, such as bankruptcy, going out of business, merging, transferring, separation or being dissolution, such party must give the other party a written notice within 30 days and provide documentary evidences. If such party cannot perform the contractual obligation, the other party suffered from loss could claim for compensation. 4. If the power plant cannot operate properly due to the shutdown of furnaces, facilities, or valves of Party B and such failure cannot be corrected upon a written notice from Party A to Party B within two days of occurrence of such event, Party B shall compensate the actual loss of Party A. + + + + + + + + + + + +5. If the facilities and power plant cannot operate properly because of the equipment or human errors of Party A, then upon three consecutive months of the power generation system cannot reach 65% of its designed capacity, Party A shall compensate actual loss of Party B. 6. Party A shall adjust its maintenance time based on the production schedule of Party B. If Party A affects the production of Party B, Party A shall compensate for the loss. 7. Party A cannot transfer or mortgage the CDQ and CDQ power generation systems without the consent of Party B, otherwise it shall be responsible for the losses. 8. The CDQ and CDQ power generation systems shall comply with the national environmental protection standards. If the environment is polluted during the operation of the power plant, Party A shall bear the liability. 9. If the power generation causes upper level power network, each party shall bear their own liabilities based on the determination of the upper level power network operator. Term Fourteen Force Majeure If the project cannot be completed on schedule or supply power normally due to force majeure, such as war, flood, and earthquake, both parties shall be partially or fully exempt from their liabilities based on the effects of force majeure. If any party cannot perform the agreement due to force majeure, the party shall notify the other party immediately, provide the proof within 15 days, and keep the loss to a minimum with reasonable efforts. Term Fifteen Settlement of Disputes Both parties shall settle all disputes through amicable negotiations. If negotiations fail, either party could take a legal action to the local people's court where Party A is located. Term Sixteen Agreement, Appendix, and Others 1. This agreement shall be signed and sealed by legal representatives or authorized representatives of both parties and take effect from the effective date. + + + + + + + + + + + +2. After the agreement is signed, Party A shall complete its due diligence and provide Party B with the letter of confirmation. Parties shall sign Technical Appendix within 90 days after the agreement is signed. 3. The Technical Appendix and Performance Guarantee are an integral part of the agreement and have the same legal effect of the agreement. 4. The agreement can only be terminated after negotiation and agreement by Party A and B in writing. When the agreement is terminated, Party A has rights to dispose all assets of the recycling project. 5. As for matters not mentioned herein, Party A and Party B shall sign a supplemental agreement through negotiation. The supplemental agreement has same effect to the agreement. If there is any conflicts, the latest supplemental agreement prevails. The agreement is made in quadruplicate. Each party holds two copies and they have the same legal effect. Party A: Xi'an Zhonghong New Energy Technology Co., Ltd. (Seal) Representative: Party B: Boxing Cheng Li Gas Supply Co., Ltd. (Seal) Representative: \ No newline at end of file diff --git a/full_contract_txt/CHIPMOSTECHNOLOGIESBERMUDALTD_04_18_2016-EX-4.72-Strategic Alliance Agreement.txt b/full_contract_txt/CHIPMOSTECHNOLOGIESBERMUDALTD_04_18_2016-EX-4.72-Strategic Alliance Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..1da37c761a7102cb897d88c60d13bc2493ece227 --- /dev/null +++ b/full_contract_txt/CHIPMOSTECHNOLOGIESBERMUDALTD_04_18_2016-EX-4.72-Strategic Alliance Agreement.txt @@ -0,0 +1,129 @@ +Exhibit 4.72 + +Confidential + +(Translation, for reference only) + +Strategic Alliance Agreement + +This Strategic Alliance Agreement ("Agreement") is executed on this 11th day of December, 2015 ("Execution Date") by and between ChipMOS TECHNOLOGIES INC., a company incorporated under the laws of Taiwan ("ChipMOS"), and Tsinghua Unigroup Ltd. ("Tsinghua Unigroup"), a company incorporated under the laws of the People's Republic of China ("PRC"). ChipMOS and Tsinghua Unigroup shall collectively be referred to as the "Parties." + +WHEREAS, Tsinghua Unigroup actively searches for investment targets which are leading companies in upstream, midstream, or downstream semiconductor industries, provides abundant funds to build strategic cooperation, and jointly shares the growing business opportunities of the semiconductor market in Mainland China; ChipMOS is a leading company engaged in the assembly and testing services of LCD drivers and wafer bumping process technologies. + +WHEREAS, ChipMOS and Tsinghua Unigroup will also, on the Execution Date, enter into the Share Subscription Agreement ("Share Subscription Agreement"). ChipMOS agrees, according to the terms and conditions of the Share Subscription Agreement, to increase its capital and issue 299,252,000 common shares through private placement ("Private Placement Shares") and the Private Placement Shares will be subscribed to by a company over which Tsinghua Unigroup has de facto control ("Subscriber"); Tsinghua Unigroup also agrees that such Private Placement Shares be subscribed to by the Subscriber from ChipMOS ("Transaction"). + +WHEREAS, ChipMOS and Tsinghua Unigroup, in order to strengthen their relationship, are going to form a strategic alliance, establish a long-term cooperative relationship, share resources and networks, support each other in the semiconductor industry, and strive for expansion and growth. NOW, THEREFORE, the Parties hereby agree as follows: + + Article 1 Strategic Alliance + +1.1 Content of Strategic Alliance and Expected Benefits After the Closing Date (as defined in the Share Subscription Agreement), Tsinghua Unigroup and ChipMOS shall cooperate, expand, strengthen and stabilize the relationship with the related upstream, midstream, and downstream industries engaged in the assembly and testing services of LCD drivers, microelectromechanical systems (MEMS), the Internet of Things (IoT) and Radio Frequency Integrated Circuits (RFIC) and/or wafer bumping services in Mainland China. Tsinghua Unigroup shall also introduce other potential suppliers, customers and business partners in Mainland China to ChipMOS. - 1 - + + + + + +Confidential + +(Translation, for reference only) 1.2 Covenants of Parties + +(1) Tsinghua Unigroup covenants to follow the Share Subscription Agreement to subscribe for, via the Subscriber, in compliance with the requirements of Taiwan's laws and regulations relating to securities transactions and PRC investment in Taiwan, at the Subscription Price per Share (as defined in the Share Subscription Agreement), 299,252,000 common shares through private placement from ChipMOS, and Tsinghua Unigroup shall comply with, and shall cause the Subscriber to comply with the content of the Share Subscription Agreement, Taiwan's laws and regulations concerning securities transactions and PRC investments in Taiwan so that ChipMOS may make use of the Total Subscription Price (as defined in the Share Subscription Agreement) to replenish operating capital, recruit talents, and upgrade its technologies related to the semiconductor assembly and testing services, to create profits for each of the Parties and its shareholders. + +(2) ChipMOS covenants that part or all of the Total Subscription Price shall be used: + + (a) To strengthen research and development, and technologies, and expand production capacity in Taiwan in order to strengthen itsroots in Taiwan, and increase job opportunities. + + + +(b) To increase the capital of ChipMOS TECHNOLOGIES (Shanghai) LTD. ("ChipMOS Shanghai"), and replenish the operating capital of ChipMOS Shanghai, in order to expand ChipMOS and its affiliates' business scale in LCD driver and Specialty Memory IC assembly and testing services and/or wafer bumping services markets, and thus increase ChipMOS' global market share. + + (c) As funds for the merger with ChipMOS TECHNOLOGIES (Bermuda) LTD. + + (d) As funds for the merger and acquisition by ChipMOS of other appropriate targets in the semiconductor industry in Taiwanwhich have similar ideals, share a common goal, and are industrially complimentary. - 2 - + + + + + +Confidential + +(Translation, for reference only) 1.3 Implementation of Strategic Alliance Each of the Parties covenants to, after the Closing Date, designate related staff to hold regular meetings to propose a specific plan and schedule in connection with Sections 1.1 and 1.2 herein, perform the specific plan together and review the implementation status. Each Party shall use its reasonable best efforts to provide immediate assistance to, and actively cooperate with, the other Party, to implement this Agreement. + + Article 2 Term of Agreement + +2.1 Term of Agreement Except as otherwise provided herein, the term of this Agreement is three (3) years from the Execution Date ("Cooperation Period"). The Parties may negotiate for an extension of this Agreement six (6) months before the expiration of the Cooperation Period. + +2.2 Early Termination This Agreement may be terminated as follows: + +(1) Tsinghua Unigroup and ChipMOS Taiwan terminate this Agreement by mutual agreement in writing; + +(2) In the event that Tsinghua Unigroup or ChipMOS materially breaches this Agreement and such breach is incurable, the other Party may immediately terminate this Agreement by giving written notice to the breaching Party; if such breach is curable, this Agreement will be terminated automatically after ten (10) days from the date on which the breaching Party received the written notice given by the other Party, if the breaching Party fails to cure such breach; or + +(3) This Agreement shall be simultaneously terminated, rescinded or become invalid upon the termination, rescission, or invalidation of the Share Subscription Agreement. + +2.3 Effects of Termination This Agreement shall immediately become void and of no further force and effect after expiration, pursuant to Section 2.1, or termination, pursuant to Section 2.2; provided, however, that Sections 2.2, 2.3, 3.1 and 3.9 shall survive after the termination of this Agreement. - 3 - + + + + + +Confidential + +(Translation, for reference only) Article 3 Miscellaneous + +3.1 Governing Law and Jurisdiction This Agreement shall be governed by, and construed in accordance with the laws of Taiwan. The Parties shall first seek to solve any dispute arising out of or related to this Agreement through negotiation. If the Parties fail to solve such dispute through negotiation, each Party shall have the right to issue notice ("Dispute Notice") to the other Party, and such Dispute Notice shall include the content of the dispute. If the Parties fail to resolve such dispute amicably through negotiation within sixty (60) days from the date on which a Party issues its Dispute Notice to the other Party, each Party shall have the right to submit such dispute to the Hong Kong International Arbitration Center, and proceed with the arbitration procedures in accordance with the Rules of the International Chamber of Commerce with three (3) arbitrators. Each Party shall each select one (1) arbitrator, and the third arbitrator shall be appointed by the two (2) arbitrators so selected. All language used in such proceedings shall be Mandarin Chinese. The Parties agree to keep the content of the dispute and the proceeding of the arbitration confidential. The arbitration award shall be final and binding on the Parties. The losing Party in such arbitration shall bear all of the costs and expenses related to the arbitration as determined by the arbitrators in such dispute (including attorney's fees). + +3.2 Assignment of Rights and Obligations Neither Party shall assign any rights or obligations provided herein without the prior written consent of the other Party. + +3.3 Entire Agreement; Amendment This Agreement constitutes the entire agreement between the Parties, and supersedes all prior documents and agreements in connection with the Transaction. Such documents or agreements shall be null and void immediately and cease to be applied. Except as otherwise provided herein, both Parties' consent in writing is necessary to amend, waive, rescind or terminate the Agreement or any terms and conditions. + +3.4 Notice All notices and other expression of intent hereunder shall be issued in writing and shall be deemed duly given by registered mail or express delivery or personal delivery to the following address: + + (1) if to ChipMOS: + +ChipMOS TECHNOLOGIES INC. Representative: Shih-Jye Cheng Address: No. 1, Yanfa 1st Rd., Hsinchu Science Park, Hsinchu, Taiwan - 4 - + + + + + +Confidential + +(Translation, for reference only) (2) if to Tsinghua Unigroup: + +Tsinghua Unigroup Ltd. Representative: Weiguo Zhao Address: F10 Unis Plaza, Tsinghua Science Park, Haidian District, Beijing, PRC + +The delivery may also be made to another address provided by a Party to the other Party in writing. The notices and other expressions of intent for the purpose of this Agreement shall be deemed received: when delivered by express delivery or personal delivery, at the actual time of receipt; when delivered by mail, at the actual time of receipt or 72 hours after mailing (whichever is earlier). + +3.5 No Waiver No omission or delay of either Party to exercise any right, power or remedy herein shall prevent such Party from exercising such right, power or remedy in the future. Any right, power and remedy that either Party enjoys pursuant to this Agreement shall survive, unless the Party expressly waives such right, power or remedy in writing. All rights, powers or remedies which each Party of this Agreement may claim, pursuant to the laws and this Agreement, shall not preclude other rights, powers or remedies that such Party may claim pursuant to the laws or this Agreement. + +3.6 Expenses Regarding the expenses arising from this Agreement and the Transaction, each Party shall bear the expenses occurred by it pursuant to the nature of such expenses and the relevant provisions. + +3.7 Severability If any provision of this Agreement is held to be illegal, unenforceable or invalid by the judgment or ruling of the court, other provisions herein shall remain in full force and effect. + +3.8 Headings and Subheadings The headings and subheadings herein are solely for ease of reference by the Parties, and shall not be used to interpret this Agreement. - 5 - + + + + + +Confidential + +(Translation, for reference only) 3.9 Confidentiality The Parties agree that the Parties will not disclose information in connection with the execution, existence, content, and performance of this Agreement to any third party before the Parties have made an announcement to the public pursuant to Section 3.11 of this Agreement. However, the foregoing restriction shall not apply to disclosure made to the board of the directors, management team, and relevant employees who need to know such information, attorneys, accountants, financial counsel, and competent authorities for the purposes of performing this Agreement. + +3.10 Actual Performance The Parties acknowledge and agree that if any of the provisions provided herein are not performed in accordance with the specific terms and conditions or are otherwise violated, this will cause irreparable damages for which monetary compensation would not be an adequate remedy. Therefore, the Parties agrees that, in addition to any other remedies available in common law or equity, each Party shall be entitled to seek injunction and other equitable remedies, including the actual performance of the terms and conditions provided herein, and it is not necessary to post any bond or other security. + +3.11 Announcement The Parties shall not make an announcement to the public without the consent of the Parties regarding the execution and content of this Agreement and information in connection with the performance of this Agreement, which includes, but is not limited to the disclosure of material information, pursuant to the laws and the content thereof. The Parties shall negotiate and determine whether to make the announcement by press release, press conference or any other method and the content of the announcement. However, in the event that a Party discloses the above-mentioned information pursuant to the laws or requests made in judicial proceedings, and the disclosing Party could not obtain the consent of the other Party in time or the other Party refused to provide its consent without proper reasons after the disclosing Party notified the other Party of such situation, then the disclosing Party may disclose the above-mentioned information. + +3.12 Counterparts This Agreement shall be executed in four (4) originals. ChipMOS and Tsinghua Unigroup shall hold two (2) originals each. + +[Signature page follows] - 6 - + + + + + +Confidential + +(Translation, for reference only) This is the signature page for the "STRATEGIC ALLIANCE AGREEMENT." ChipMOS TECHNOLOGIES INC. Tsinghua Unigroup Ltd. + +By: /s/ Shih-Jye Cheng By: /s/ Weiguo Zhao Name: Shih-Jye Cheng Name: Weiguo Zhao Title: Chairman Title: Chairman - 7 - \ No newline at end of file diff --git a/full_contract_txt/COOLTECHNOLOGIES,INC_10_25_2017-EX-10.71-Strategic Alliance Agreement.txt b/full_contract_txt/COOLTECHNOLOGIES,INC_10_25_2017-EX-10.71-Strategic Alliance Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..047e7264b29319ebc6cdb5042599aae7fb01ad32 --- /dev/null +++ b/full_contract_txt/COOLTECHNOLOGIES,INC_10_25_2017-EX-10.71-Strategic Alliance Agreement.txt @@ -0,0 +1,33 @@ +EXHIBIT 10.71 + +May 04, 2017 Strategic Alliance Agreement This Strategic Alliance Agreement (this "Agreement") is entered into as of the 26t h day of May, 2017 (hereinafter referred to as the effective date of the Agreement), by and between Cool Technologies Inc.., a Nevada corporation (hereinafter referred to as "COOL TECH"), and VETERAN TECHNOLOGY GROUP, LLC, a Missouri corporation (hereinafter referred to as "VET TECH"). WITNESSETH: WHEREAS, COOL TECH and VET TECH wish to enter into a strategic alliance to market and perform certain complementary business consulting services; NOW, THEREFORE, in consideration of the foregoing and of the mutual premises hereinafter expressed, the parties hereto do mutually agree as follows: ARTICLE I. SCOPE OF STRATEGIC ALLIANCE. A. COOL TECH shall, in a professional manner, take all steps necessary to market and produce its Mobile Generation Program and its other services (collectively the "COOL TECH Services") for clients referred to COOL TECH by VET TECH. Any engagement to perform COOL TECH Services shall be on such terms and conditions as COOL TECH may approve at its sole discretion. COOL TECH will perform, schedule, staff and manage all COOL TECH Services or with COOL TECH/VET TECH approved team. Notwithstanding the foregoing, VET TECH may, at its election, bill the client directly for COOL TECH Services and under such circumstances COOL TECH shall bill VET TECH the pre-agreed amount for the engagement as adjusted by any client-approved change orders. For any Government Sales brought by VET TECH COOL TECH agrees to be held to the same billing and payment terms as is dictated under the Federal Acquisition Regulation (FAR) guidelines and requirements; otherwise, COOL TECH will bill the client directly. VET TECH agrees to include reference to COOL TECH in each contract and proposal involving COOL TECH Services. COOL TECH's Mobile Generation ("MG"), and other proprietary information and associated products, copyrights, trademarks, trade names and logos developed by COOL TECH shall remain the property of COOL TECH and reference to COOL TECH's rights shall be made in all uses of such materials in at least 12 point type. 1 + + + + + +B. VET TECH shall, in a professional manner, take all steps necessary to market and perform its business management consulting, GAIT Software and other AI services (collectively the "VET TECH Services") for clients referred to VET TECH by COOL TECH. Any engagement to perform VET TECH Services shall be on such terms and conditions as VET TECH may approve in its sole discretion. VET TECH will perform, schedule, staff and manage all VET TECH Services or a joint VET TECH/COOL TECH team. VET TECH will perform, schedule, staff and manage all VET TECH Services or with VET TECH/COOL TECH approved team. Notwithstanding the foregoing, COOL TECH may, at its election, bill the client directly for VET TECH Services and under such circumstances VET TECH shall bill COOL TECH the pre-agreed amount for the engagement as adjusted by any client-approved change orders; otherwise, VET TECH will bill the client directly. COOL TECH agrees to include reference to VET TECH in each contract and proposal involving VET TECH Services. VET TECH's GAIT Software and other AI services (collectively the "VET TECH Services"), and other proprietary information and associated products, copyrights, trademarks, trade names and logos developed by VET TECH shall remain the property of VET TECH and reference to VET TECH's rights shall be made in all uses of such materials in at least 12 point type. ARTICLE II. PERIOD OF PERFORMANCE. This Agreement shall be effective as of the date first set forth above and, shall expire on the later of (i) five (5) years from the date hereof, or (ii) with respect to any projects identified in any contract for which VET TECH is billing the client directly, upon the completion of COOL TECH's Services and receipt of payment by COOL TECH from VET TECH for said services. This Agreement shall be automatically renewed for successive one year periods unless either party gives written notice of termination to the other party at least thirty (30) days prior to the date of expiration. Notwithstanding the foregoing, this Agreement shall be earlier terminated (x) by mutual agreement of the parties, or (y) at any time upon sixty (60) days advance written notice to the other party. Time is of the essence in this Agreement. 2 + + + + + +ARTICLE III. MANAGEMENT. Each party shall designate a partner, officer or other senior person to be responsible for the overall administration of this Agreement. VET TECH shall have ultimate responsibility for client relationships for those clients that it elects to bill directly for COOL TECH Services and COOL TECH will respond to VET TECH's direction. ARTICLE IV. CONFIDENTIAL INFORMATION. The parties acknowledge and agree that in the course of the performance of the VET TECH Services and the COOL TECH Services (collectively, the "Services") or additional services pursuant to this Agreement, that each may be given access to, or come into possession of, confidential information of the other party which information may contain trade secrets, proprietary data or other confidential material of that party. Therefore the parties have executed a Non-Disclosure Agreement which is attached hereto as Exhibit A, and incorporated by reference as if fully set forth herein. Materials used in any engagement undertaken pursuant to this Agreement shall not be altered or changed without the consent of both parties. ARTICLE V. NO PARTNERSHIP. Nothing herein contained shall be construed to imply a joint venture, partnership or principal- agent relationship between VET TECH and COOL TECH, and neither party shall have the right, power or authority to obligate or bind the other in any manner whatsoever, except as otherwise agreed to in writing. The parties do not contemplate a sharing of profits relating to the VET TECH Services or the COOL TECH Services so as to create a separate taxable entity under Section 761 of the Internal Revenue Code of 1986, as amended, nor co-ownership of a business or property so as to create a separate partnership under the law of any jurisdiction, including, without limitation, MISSOURI or NEVADA. Accordingly, for tax, property and liability purposes VET TECH will provide the VET TECH Services, and COOL TECH will perform the COOL TECH Services, each on a professional basis and as an independent contractor of the other. JOINT SERVICES WILL BE DEFINED IN ADDENDUM XX. Revenues and expenses relating to the Services and any additional services shall be reported separately by the parties for tax purposes. During the performance of the any of the Services, VET TECH's employees will not be considered employees of COOL TECH, and vice versa, within the meaning or the applications of any federal, state or local laws or regulations including, but not limited to, laws or regulations covering unemployment insurance, old age benefits, worker's compensation, industrial accident, labor or taxes of any kind. VET TECH's personnel who are to perform the VET TECH Services or additional services to be provided by VET TECH hereunder shall be under the employment, and ultimate control, management and supervision of VET TECH. COOL TECH's personnel who are to perform the COOL TECH Services or additional services to be provided by COOL TECH hereunder shall be under the employment, and ultimate control, management and supervision of COOL TECH. It is understood and agreed that COOL TECH's employees shall not be considered VET TECH's employees within the meaning or application of VET TECH's employee fringe benefit programs for the purpose of vacations, holidays, pension, group life insurance, accidental death, medical, hospitalization, and surgical benefits, and vice versa. 3 + + + + + +ARTICLE VI. TRADEMARK, TRADE NAME AND COPYRIGHTS. Except as expressly provided herein, this Agreement does not give either party any ownership rights or interest in the other party's trade name, trademarks or copyrights. ARTICLE VII. INDEMNIFICATION. Each of VET TECH and COOL TECH, at its own expense, shall indemnify, defend and hold the other, its partners, shareholders, directors, officers, employees, and agents harmless from and against any and all third-party suits, actions, investigations and proceedings, and related costs and expenses (including reasonable attorney's fees) resulting solely and directly from the indemnifying party's negligence or willful misconduct. Neither VET TECH nor COOL TECH shall be required hereunder to defend, indemnify or hold harmless the other and/or its partners, shareholders, directors, officers, directors, employees and agents, or any of them, from any liability resulting from the negligence or wrongful acts of the party seeking indemnification or of any third- party. Each of VET TECH and COOL TECH agrees to give the other prompt written notice of any claim or other matter as to which it believes this indemnification provision is applicable. The indemnifying party shall have the right to defend against any such claim with counsel of its own choosing and to settle and/or compromise such claim as it deems appropriate. Each party further agrees to cooperate with the other in the defense of any such claim or other matter. ARTICLE VIII. NON-SOLICITATION OF PERSONNEL. COOL TECH and VET TECH agree not to engage in any attempt whatsoever, to hire, or to engage as independent contractors, the other's employees or independent contractors during the term of this Agreement and for a period of six (6) months following expiration or termination of this Agreement except as may be mutually agreed in writing. ARTICLE IX. INTELLECTUAL PROPERTY Work performed on engagements pursuant to this Agreement by either VET TECH and/or COOL TECH and information, materials, products and deliverables developed in connection with engagements pursuant to this Agreement shall be the property of the respective parties performing the work or creating the information. All underlying methodology utilized by COOL TECH and VET TECH respectively which was created and/or developed by either prior to the date of this Agreement and utilized in the course of performing engagements pursuant to this Agreement shall not become the property of the other. Each party's rights, titles and interests are described in the Non-Disclosure Agreement attached hereto as Exhibit A. 4 + + + + + +ARTICLE X. GENERAL PROVISIONS. A. Entire Agreement: This Agreement together with all documents incorporated by reference herein, constitutes the entire and sole agreement between the parties with respect to the subject matter hereof and supersedes any prior agreements, negotiations, understandings, or other matters, whether oral or written, with respect to the subject matter hereof. This Agreement cannot be modified, changed or amended, except for in writing signed by a duly authorized representative of each of the parties. B. Conflict: In the event of any conflict, ambiguity or inconsistency between this Agreement and any other document which may be annexed hereto, the terms of this Agreement shall govern. C. Assignment and Delegation: Neither party shall assign or delegate this Agreement or any rights, duties or obligations hereunder to any other person and/or entity without prior express written approval of the other party. D. Notices: Any notice required or permitted to be given under this Agreement shall be in writing, by hand delivery, commercial overnight courier or registered or certified U.S. Mail, to the address stated below for COOL TECH or to the address stated below for VET TECH, and shall be deemed duly given upon receipt, or if by registered or certified mail three (3) business days following deposit in the U.S. Mail. The parties hereto may from time to time designate in writing other addresses expressly for the purpose of receipt of notice hereunder. If to VET TECH: If to COOL TECH: E. Severability: If any provision of this Agreement is declared invalid or unenforceable, such provision shall be deemed modified to the extent necessary and possible to render it valid and enforceable. In any event, the unenforceability or invalidity of any provision shall not affect any other provision of this Agreement, and this Agreement shall continue in full force and effect, and be construed and enforced, as if such provision had not been included, or had been modified as above provided, as the case may be. F. Governing Law: This Agreement shall be governed by and construed in accordance with the laws of the State of Missouri. Without giving effect to its choice of law principles. 5 + + + + + +G. Paragraph Headings: The paragraph headings set forth in this Agreement are for the convenience of the parties, and in no way define, limit, or describe the scope or intent of this Agreement and are to be given no legal effect. H. Counterparts: This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. I. Exhibits: The Exhibits attached hereto are made a part of this Agreement as if fully set forth herein. IN WITNESS WHEREOF, the parties, by their duly authorized representatives, have caused this Agreement to be executed as of the date first written above. Veteran Technology Group, LLC Cool Technologies Inc. By: Name: /s/ Michael Grimes___ /s/ Timothy Hassett___ By: Name: _Michael Grimes ____ ___Timothy Hassett__ 6 \ No newline at end of file diff --git a/full_contract_txt/CORALGOLDRESOURCES,LTD_05_28_2020-EX-4.1-CONSULTING AGREEMENT.txt b/full_contract_txt/CORALGOLDRESOURCES,LTD_05_28_2020-EX-4.1-CONSULTING AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..fff8fcb81111d925cfe283fd5a572d73a6bb3f94 --- /dev/null +++ b/full_contract_txt/CORALGOLDRESOURCES,LTD_05_28_2020-EX-4.1-CONSULTING AGREEMENT.txt @@ -0,0 +1,261 @@ +EXHIBIT 4.1 CONSULTING AGREEMENT THIS AGREEMENT is dated for reference the 1st day of February, 2020 (the "Effective Date"). BETWEEN: CORAL GOLD RESOURCES LTD., a company duly incorporated pursuant to the laws of the Province of British Columbia and having its head office at Suite 900 - 570 Granville Street, Vancouver, British Columbia V6C 3Pl (the "Company") AND: INTERMARK CAPITAL CORP., a company duly incorporated pursuant to the laws of the Province of British Columbia and having an office at Suite 900 - 570 Granville Street, Vancouver, British Columbia V6C 3PI (the "Consultant") WHEREAS: A. The Company is a mining and exploration company, whose common shares are listed on the TSX Venture Exchange and OTCQX; + +B. The Consultant provides management and financial consulting services to exploration and development companies, and the principal shareholder of the Consultant, David Wolfin (the "Principal"), has been the President and Chief Executive Officer and a director of the Company; and + +C. The Company wishes to engage the management and financial services of the Consultant, and the Consultant wishes to be engaged by the Company, to perform the functions of a management consultant to the Company as set forth herein below. NOW THEREFORE, in consideration of the premises and the covenants and agreements of the parties hereto as hereinafter set forth, and for other good and reliable consideration, the sufficiency of which is hereby acknowledged by the parties, the parties hereto covenant and agree as follows: 1. ENGAGEMENT OF CONSULTANT + +1.1 The Company hereby appoints and engages the Consultant as a consultant with respect to the Services (as defined below) and the Consultant hereby accepts such appointment and engagement by the Company, all upon and subject to the terms and conditions of this Agreement. + +2. SERVICES OF CONSULTANT + +2.1 During the Term (as defined below), the Consultant shall provide to the Company advisory and consulting services as more particularly set forth in Schedule "A" or as the Company may request from time to time (collectively, the "Services"). + +-1- + + + + + +2.2 The Consultant shall at all times and in all respects do its utmost to enhance and develop the business interests and welfareof the Company. + +2.3 The Consultant shall be subject to such supervision as may be imposed by the Company in its sole discretion, and the Consultant shall furnish regular reports and any other data and information relating to the Services as may, from time to time, be requested by the Company. + +2.4 The Consultant shall provide its services to the Company. + +3. FEES + +3.1 The Company will pay the Consultant basic remuneration for its services in the sum of $10,000 per month (the "Consulting Fee") commencing on the 1st day of February, 2020, and payable on the last day of each month thereafter up to and including the 31st day of January, 2025, together with any such increments thereto as the Compensation Committee of the Board of Directors of the Company may from time to time determine. In addition, the Company will pay to the Consultant all reasonable expenses of the Consultant as agreed to from time to time which are incurred by the Consultant in delivery of the Services, based on monthly invoices submitted to the Company, including copies of all paid receipts; plus harmonized sales taxes or goods and services taxes, as the case may be, in addition to the Consulting Fees, which taxes will be remitted by the Consultant to the Canada Revenue Agency. + +4. TERM AND RENEWAL + +4.1 During the term of this Agreement, the Consultant shall provide its Services to the Company through its Principal, and the Consultant shall ensure that the Principal will be available to provide such Services to the Company in a timely manner. + +4.2 The term of this Agreement is for a period of five (5) years (the "Term") commencing on the Effective Date and, unless terminated earlier in accordance with the termination provisions of this Agreement, ending on January 31, 2025. + +5. TERMINATION + +5.1 This Agreement can be terminated at any time prior to the expiry of the Term, as follows: (a) by the Consultant electing to give the Company not less than 3 months prior notice of such termination; + +(b) by the Company electing to give the Consultant 3 months prior notice of such termination along with a termination payment equal to the annual Consulting Fee; + +(c) by the Consultant electing to give the Company notice, in the event that there occurs a Change of Control (as defined below) within six (6) months of the effective date of such Change of Control, and if the Consultant so elects to terminate this Agreement, then the Consultant will be immediately entitled to a termination payment equal to CDN$750,000; and + +-2- + + + + + +(d) For the purpose of this clause, a Change of Control shall be deemed to have occurred when: (i) any person, entity or group becomes the beneficial owner of 20% or more of the combined voting power of the Company's then outstanding voting securities entitled to vote generally in the election of directors, and such person, entity or group uses such effective voting control to change a majority of the Board of Directors of the Company, either all at once or through any series of elections and appointments when considered together; or + +(ii) completion of the sale or other disposition by the Company of all or substantially all of the Company's assets or a reorganization or merger or consolidation of the Company with any other entity or corporation, other than: (A) a reorganization or merger or consolidation that would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent, either by remaining outstanding or by being converted into voting securities of another entity, more than 50.1 % of the combined voting power of the voting securities of the Company or such other entity outstanding immediately after such reorganization or merger or consolidation; or + +(B) a reorganization or merger or consolidation effected to implement a recapitalization or reincorporation of the Company (or similar transaction) that does not result in a material change in beneficial ownership of the voting securities of the Company or its successor. 5.2 On any termination of this Agreement under Section 5.l (a), (b), or (c) all outstanding stock options granted to the Consultant shall be exercisable in accordance with the terms of the option agreements covering such grants. If there is any inconsistency between the terms of this Agreement and the terms of any stock option agreement governing the grant of any stock options to the Consultant or the Principal, then the terms of such stock option agreement shall prevail. + +5.3 This Agreement and the Term shall terminate automatically, without any prior notice or any payment to the Consultant, inthe event that: a. the five year Term expires on January 31, 2025; + +b. the Consultant should no longer be able to provide the Services through the Principal for any reason; + +c. upon the death or permanent incapacity of the Principal; or + +d. The Consultant commits any material breach of this Agreement which breach is not remedied within 30 days after notice to the Consultant of such breach. 6. CONFIDENTIALITY + +6.1 The Consultant acknowledges and agrees that in the performance of its obligations under this Agreement, it may obtain knowledge of Confidential Information (as defined below) relating to the business or affairs of the Company or its affiliated companies (the "Affiliated Companies"). + +-3- + + + + + +The Consultant and the Principal shall not, without the prior written consent of the Company, either during the Term or at any time thereafter: (a) use or disclose any Confidential Information outside of the Company or the Affiliated Companies; + +(b) except in undertaking the Services, remove or aid in the removal from the premises of the Company or any of the Affiliated Companies any Confidential Information or any property or material relating thereto; or + +(c) use the Confidential Information for any purpose other than in performing the Services. 6.2 The Consultant shall exercise a reasonable degree of care in safeguarding the aforementioned Confidential Information against loss, theft, or other inadvertent disclosure, and further agrees to take all reasonable steps necessary to ensure the maintenance of confidentiality. + +6.3 Upon the termination of this Agreement, or upon the Company's earlier request, the Consultant and the Principal shall promptly deliver to the Company all of the Confidential Information that the Consultant and the Principal may have in their possession or control. + +6.4 In this Agreement, "Confidential Information" shall mean any information or knowledge including, without limitation, any document, materials, know how, discovery, strategy, method, idea, client list, marketing strategy or employee compensation, or copies or adaptations thereof, that relates to the business or affairs of the Company and I or the Affiliated Companies; and is private or confidential in that it is not generally known or available to the public. Without limiting the generality of the forgoing "Confidential Information" will include: (a) information regarding the Company and the Affiliated Companies' business operations, methods and practices, including marketing strategies, product pricing, margins and hourly rates for staff, costs and all information regarding the financial affairs of the Company and the Affiliated Companies; + +(b) all information related to the mineral exploration interests of the Company and the Affiliated Companies including maps, data, records, reports, technical studies, drill hole logs, calculations, opinions, charts, drawings, sketches, plans, documents, summaries, memoranda, analysis and all geological or technical information; + +(c) all information related to the properties, projects, facilities, equipment and other assets used in the business of the Company and the Affiliated Companies, and all information related to the exploration or development of (or potential exploration or development of) the Company and the Affiliated Companies' properties or projects, including without limitation any properties or projects in respect of which the Company has made any application or is in any negotiations for the acquisition of an ownership, leasehold or other interest in; + +(d) terms of the Company and the Affiliated Companies' relationship with, its investors, (if not otherwise publically available), partners, clients, suppliers of products or services, and the Company and the Affiliated Companies' referral sources; + +(e) all information concerning exploration, financing or other business opportunities of the Company and the Affiliated Companies, including all projects, ventures or joint ventures considered by the Company and the Affiliated Companies, whether or not pursued; and + +-4- + + + + + +(f) all trade secrets or other confidential or proprietary information of the Company and the Affiliated Companies including, business plans, concepts, techniques, processes, designs, data, software programs, formula, development or experimental work, work in process or other know-how. + +(g) Confidential Information shall specifically not include anything that: + +(h) is in or enters lawfully into the public domain other than as a result of a disclosure by the Consultant or the Principal; + +(i) becomes available to the Consultant on a non-confidential basis from a source other than the Company or the affiliated Companies, or any of its representatives, and that source was not under any obligation of confidentiality; or + +(j) the Consultant is required to disclose pursuant to an order of a court of competent jurisdiction or by the operation of law; provided that, the Consultant provides prompt prior written notice to the Company of such required disclosure and of the action which is proposed to be taken in response. In such an event, and only after the Consultant shall have made a reasonable effort to obtain a protective order or other reliable assurance affording such information confidential treatment, the Consultant shall furnish only that portion of the Confidential Information which it is required to disclose. 7. NON-SOLICITATION + +7.1 The Consultant covenants, undertakes and agrees with the Company that during the Term and for a period of one year from the date of expiration or termination of this Agreement for any reason whatsoever, it shall not, on its own behalf or on behalf of any person, whether directly or indirectly, in any capacity whatsoever, offer employment to or solicit the employment of or otherwise entice away from the employment of the Company or any of the Affiliated Companies, any individual who is employed or engaged by the Company or any of the Affiliated Companies at the date of expiration or termination of this Agreement or who was employed or engaged by the Company or any of the Affiliated Companies, within the one year period immediately preceding the date of expiration or termination of this Agreement, as applicable. + +7.2 The Consultant acknowledges and agrees that the above restriction on non-solicitation is reasonable and necessary for the proper protection of the businesses, property and goodwill of the Company and the Affiliated Companies. + +8. DISCLOSURE AND ASSIGNMENT OF PROJECTS AND WORKS + +8.1 The Consultant agrees that all discoveries, maps, technical studies, plans, spreadsheets, documents, inventions, copyright, software, improvements, know-how or other intellectual property, whether or not patentable or copyrightable, created by the Consultant during the Term of this Agreement pertaining to any service, matter, thing, process or method related to this Agreement (the "Works") will be the sole and absolute property of the Company. The Consultant will keep and maintain adequate and current written records of all Works made, which records will be available at all times to the Company and will remain the sole property of the Company. + +8.2 The Consultant will assist the Company in obtaining and enforcing, for the Company's own benefit, patents, copyrights and any other protections in any and all countries for any and all Works made by the Consultant (in whole or in part) the rights to which belong to or have been assigned to the Company. The Consultant agrees, upon request, to execute all applications, assignments, instruments and papers and perform all acts that the Company or its counsel may deem necessary or desirable to obtain any and all patents, copyrights or other protection in such Works and otherwise to protect the interests of the Company therein. + +-5- + + + + + +9. COMPLIANCE WITH LAWS + +9.1 The Services undertaken by the Consultant under this Agreement shall be in full compliance with all applicable laws andconsistent with a high degree of business ethics. + +10. INDEMNIFICATION + +10.1 The Consultant shall indemnify and save harmless the Company for any demonstrated losses, damages, costs or other amounts, including without limitation reasonable legal fees, suffered or incurred by the Company arising out of third party claims relating to the presence or activities of the Consultant or its representatives in performing the Services to the extent that such losses, damages, costs or other amounts are caused by: (a) any breach of the Consultant's obligation in Section 9 herein; and + +(b) any negligence, willful misconduct or fraud on the part of the Consultant in performing the Services. 10.2 Subject to the Consultant's obligation to indemnify the Company under this Section 10, and provided that the Consultant has not breached Section 9, the Company shall indemnify and save harmless the Consultant for any demonstrated losses, damages, costs or other amounts, including without limitation reasonable legal fees, suffered or incurred by the Consultant arising out of third party claims relating to the presence or activities of the Consultant and/or its representatives in performing the Services to the extent that such losses, damages, costs or other amounts are caused by the negligence, willful misconduct or fraud on the part of the Company. + +10.3 Neither the Company nor the Consultant shall be liable for any consequential loss, including but not limited to, claims for loss of profit, revenue or capital, loss of use of utilities, equipment or facilities, down-time cost, service interruption, cost of money, injury or damage of any character whatsoever. + +11. REMEDIES + +11.1 The Consultant acknowledges and agrees that any breach of this Agreement by it could cause irreparable damage to the Company and I or the Affiliated Companies and that in the event of a breach by the Consultant, the Company shall have in addition to any and all other remedies at law or in equity, the right to an injunction, specific performance or other equitable relief to prevent any violation by the Consultant of any of the provisions of this Agreement. In the event of any such dispute, the Consultant agrees that the Company shall be entitled, without showing actual damages, to a temporary or permanent injunction restraining conduct of the Consultant pending a determination of such dispute and that no bond or other security shall be required from the Company in connection therewith. The Consultant acknowledges and agrees that the remedies of the Company specified in this Agreement are in addition to and not in substitution for any other rights and remedies of the Company at law or in equity and that all such rights and remedies are cumulative and not alternative or exclusive of any other rights or remedies and that the Company may have recourse to any one or more of its available rights and remedies as it shall see fit. + +-6- + + + + + +12. RELATIONSHIP + +12.1 The Company and Consultant each acknowledge and agree that the only relationship of the Consultant to the Company created by this Agreement shall for all purposes be that of a contractor, and all persons employed or engaged by the Consultant, including David Wolfin in connection herewith shall for all purposes be considered to be employed or engaged, as applicable, by the Consultant and not by the Company. The Company shall have no obligation whatsoever to pay or compensate the Consultant and/or any representative of the Consultant including David Wolfin, for taxes of any kind whatsoever that arise out of or with respect to any Consulting Fee, or any other fee, remuneration or compensation provided to the Consultant under this Agreement. + +12.2 The Consultant shall fully indemnify and hold harmless the Company from and against all assessments, claims, liabilities, costs, expenses and damages that the Company and I or any of the Affiliated Companies may suffer or incur with respect to any such taxes or benefits. For greater clarity, the Consultant is solely responsible for the deduction and remissions of income tax, pension and employment insurance in respect of any employees retained by the Consultant to perform the services under this Agreement. Furthermore, if these amounts are not remitted, the Consultant will, in addition to any other provision under this Agreement, indemnify and hold harmless the Company, its subsidiaries, affiliates and their respective directors and officers from and against any claim for taxes, penalties and for withholding of funds by the applicable tax, worker's compensation, employment standards and insurance agencies or any other government agency with respect to any amount found to be payable by the Company to such agency or commission in respect of the Consultant's provision of services under this Agreement, including any legal fees incurred by the Company in defending such claims. + +13. SURVIVAL OF TERMS + +13.l Sections 6 through 12, inclusive, and this Section 13, shall survive and remain in force notwithstanding the expiration or other termination of this Agreement for any reason whatsoever. Any expiration or termination of this Agreement shall be without prejudice to any rights and obligations of the parties hereto arising or existing up to the effective date of such expiration or termination, or any remedies of the parties with respect thereto. + +14. LIMITED AUTHORITY AS AGENT + +14.1 Unless otherwise agreed to in writing by the parties, the Consultant may not act as an agent of the Company; however, this does not and is not intended to restrict the powers of the Principal to act as President and Chief Executive Officer of the Company in any way. Without limiting the generality of the foregoing, the Consultant shall not commit or be entitled to commit the Company to any obligation whatsoever nor shall the Consultant incur or be entitled to incur any debt or liability whatsoever on behalf of the Company, except as otherwise agreed to by the Company. + +15. NO ASSIGNMENT + +15.1 Neither this Agreement nor any of the rights of any of the parties under this Agreement shall be assigned without thewritten consent of all the parties. + +-7- + + + + + +16. SUCCESSORS AND ASSIGNS + +16.1 The Agreement shall enure to the benefit of and be binding upon the parties and their respective heirs, executors,administrators, successors and permitted assigns, as the case may be. + +17. WAIVER + +17.1 Any waiver of any breach or default under this Agreement shall only be effective if in writing signed by the party against whom the waiver is sought to be enforced, and no waiver shall be implied by indulgence, delay or other act, omission or conduct. Any waiver shall only apply to the specific matter waived and only in the specific instance i n which it is waived. + +18. GOVERNING LAWS + +18.1 Unless otherwise agreed to in writing by the parties, the Agreement shall be governed by and construed in accordance with the laws of the Province of British Columbia and the federal laws of Canada applicable therein, and the parties hereto submit and attorn to the jurisdiction of the courts of the Province of British Columbia. + +19. FURTHER ASSURANCES + +19.1 Each of the parties shall, on request by the other party, execute and deliver or cause to be executed and delivered all such further documents and instruments and do all such further acts and things as the other party may reasonably require to evidence, carry out and give full effect to the terms, conditions, intent and meaning of this Agreement and to ensure the completion of the transactions contemplated hereby. + +20. NOTICES + +20.1 All notices required or permitted under this Agreement shall be in writing and shall be given by delivering such notice or mailing such notice by pre-paid registered mail, by facsimile transmission or electronic mail to the addresses provided under the names of each party on the first page to this Agreement. Any such notice or other communication shall, if delivered, be deemed to have been given or made and received on the date delivered (or the next business day if the day of delivery is not a business day), and if mailed, shall be deemed to have been given or made and received on the fifth business day following the day on which it was so mailed and if faxed (with confirmation received) shall be deemed to have been given or made and received on the day on which it was so faxed (or the next business day if the day of sending is not a business day). The parties may give from time to time written notice of change of address in the manner aforesaid. + +21. CONSTRUCTION + +21.1 In this Agreement, unless otherwise indicated: (a) "Agreement" means this Consulting Agreement; + +(b) the words "include", "including" or "in particular", when following any general term or statement, shall not be construed as limiting the general term or statement to the specific items or matters set forth or to similar items or matters, but rather as permitting the general term or statement to refer to all other items or matters that could reasonably fall within the broadest possible scope of the general term or statement; + +-8- + + + + + +(c) "herein", "hereby", "hereunder", "hereof', "hereto" and words of similar import, refer to this Agreement as a whole and not to any particular Section of this Agreement; + +(d) a reference to a statute means that statute, as amended and in effect as of the date hereof, and includes each and every regulation and rule made thereunder and in effect as of the date hereof, and includes all amendments thereof given effect from time to time; + +(e) a reference to a Section means, unless the context otherwise requires, that specific Section in Agreement; + +(f) a reference to a "consent", "notice" or "agreement" means a consent, notice or agreement, as the case may be, by an authorized representative of the party or parties thereto; + +(g) where a word, term or phrase is defined herein, its derivatives or other grammatical forms have a corresponding meaning; + +(h) all words, other than defined terms, used in this Agreement, regardless of the number and gender in which they are used, shall be deemed and construed to include the singular or the plural and the masculine, feminine or body corporate, as the context may require; + +(i) time is of the essence; + +(j) in the event that any date on which any action is required to be taken hereunder by any of the parties hereto is not a business day, such action shall be required to be taken on the next succeeding day which is a business day; + +(k) references to a "party" or "parties" are references to a party or parties to this Agreement; + +(l) the headings in this Agreement form no part of this Agreement and shall be deemed to have been inserted for convenience only; + +(m) unless otherwise agreed to in writing by the parties, all dollar amount referred to herein are expressed in Canadian dollars; and + +(n) the Effective Date of this Agreement shall be February 1, 2020, despite the actual date of execution of this Agreement. 22. SEVERABILITY + +22.1 If any provision of this Agreement is held by a court of competent jurisdiction to be invalid, illegal or unenforceable, then tothe fullest extent permitted by law: (a) all other provisions of this Agreement shall remain in full force and effect in such jurisdiction and shall be liberally construed in order to carry out the intentions of the parties as nearly as may be possible; and + +(b) such invalidity, illegality or unenforceability shall not affect the validity, legality or enforceability of such provision in any other jurisdiction. 23. COUNTERPARTS AND FACSIMILE + +23.l This Agreement may be executed in one or more counterparts and delivered by facsimile, each of which when so executed shall constitute an original and all of which together shall constitute one and the same agreement. + +24. INDEPENDENT LEGAL ADVICE + +24.1 The Company has recommended to the Consultant that it obtain independent legal advice prior to signing this Agreement. The Consultant acknowledges that it has received independent legal advice or have waived the opportunity to do so and have elected to proceed without benefit of same. + +-9- + + + + + +IN WITNESS WHEREOF this Agreement has been executed as of the Effective Date. CORAL GOLD RESOURCES LTD. Per: "Ronald Andrews" Authorized Signatory INTERMARK CAPITAL CORP. Per: "David Wolfin" Authorized Signatory + +-10- + + + + + +THIS IS SCHEDULE "A" TO THE CONSULTING AGREEMENT BETWEEN CORAL GOLD RESOURCES LTD. AND lNTERMARK CAPlTAL CORP. Description of Consulting Services: The Consultant shall provide management and financial consulting services, including the supervision of the senior management, all staff, and all field personnel of the Company, whether employees or consultants, strategic planning and property acquisitions, strategic financial planning and annual budget reviews, as well as the implementation and monitoring of the Company's compliance with continuous reporting requirements, internal controls over accounting systems and financial reporting to the Company. Duties and Responsibilities: The Executive shall serve the Company as an executive officer in the position of President and Chief Executive Officer. The Executive shall report to the Board and shall undertake and perform the following duties and responsibilities: · actively engage with the Board to ensure that the initiatives of the management team are aligned with the strategic direction and objectives for the Company that have been established by the Board; + +· provide overall direction for the Company in order for it to implement agreed strategies in order to meet Company goals and objectives; + +· provide shareholder and investor communication and manage key investment banking and institutional relationships; + +· make decisions in line with organizational goals, leading to desired results, and will be responsible and accountable for results; + +· create and sustain the organizational culture and environment needed to achieve objectives and results and recruit and retain a high-performance operating team; + +· oversee the implementation and monitoring of internal controls, reporting compliance obligations, sign off on CEO Certificates for the interim and annual financial statements and setting environmental protection policies; and + +· such other duties and responsibilities as may be assigned or vested in him by the Board from time to time and which are consistent with the duties and responsibilities of a President and Chief Executive Officer. The Executive agrees, during the continuance of his employment, to devote sufficient working time, services, skill and ability to such employment and to serve at all times with loyalty and honesty in the best interests of the Company. The Executive acknowledges that the position of President and CEO will involve significant travel for business development and for investor relations. + +-11- \ No newline at end of file diff --git a/full_contract_txt/CORIOINC_07_20_2000-EX-10.5-LICENSE AND HOSTING AGREEMENT.txt b/full_contract_txt/CORIOINC_07_20_2000-EX-10.5-LICENSE AND HOSTING AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..fdeff7b1aa223c668576f4f8549b8ccb95fb8c5a --- /dev/null +++ b/full_contract_txt/CORIOINC_07_20_2000-EX-10.5-LICENSE AND HOSTING AGREEMENT.txt @@ -0,0 +1,451 @@ +1 EXHIBIT 10.5 + + CORIO INC. LICENSE AND HOSTING AGREEMENT + + This License and Hosting Agreement (the "AGREEMENT") is made and entered into as of October 29, 1999 ("EFFECTIVE DATE") by and between Corio Inc., a Delaware corporation, having its principal place of business at 700 Bay Road, Suite 210, Redwood City, CA 94063 ("CORIO") and Commerce One, Inc., a Delaware corporation having its principal place of business at 1600 Rivera Avenue, Walnut Creek, CA 94596 ("COMMERCE ONE"). + + BACKGROUND + +A. Commerce One is the owner of certain proprietary software products (the "SOFTWARE" as further defined below); and + +B. Corio wishes to obtain a license to use and host the Software on the terms and conditions set forth herein in connection with the hosting services that Corio will provide to its Customers (as defined below) and Commerce One wishes to grant Corio such a license on such terms; + +C. The parties further wish to jointly market and promote the other party's software and/or services as well as provide support and professional services to Corio and its Customers in accordance with this Agreement. + + NOW, THEREFORE, for good and valuable consideration, the parties hereby agree as follows: + +1. DEFINITIONS. + +The following terms shall have the following meanings: + +1.1 "SOFTWARE USER" means a named user of the Corio Services worldwide to whom a user identification number and password has been assigned, which permits that user to access and use the Software on a designated Corio Server. The identification number and password used by a Software User is reusable and reassignable and may be used and transferred by Corio, in accordance with the licenses granted below, between Customers as one Customer discontinues the Corio Services and another Customer subscribes. + +1.2 "ASP" means Application Service Provider. + +1.2.5 "APPLICATION MANAGEMENT REVENUE" means net revenue Corio receives from Customers for Tier One support of the Software and MarketSite Service, operational support of the Software and MarketSite Service and basic infrastructure support (hardware, database and operating system) for the Software and MarketSite Service. Net revenue means all revenue received by Corio from Customers for the Software and MarketSite Service, less taxes, freight, insurance, refunds or credits and other non-product items. + +1.3 "CORIO MARKET SEGMENT" means those customers with annual sales revenues of less than $1,000,000,000. For the purposes of this definition the sales revenue shall apply to either the + +[*] Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions. + + 1 + +2 entire corporate entity or any separately reporting division. Corio shall have the right to continue to support Corio Customers that have annual sales revenues greater than $1,000,000,000 by way of either sales growth or merger or acquisition of the Corio Customer. Corio and Commerce One further agree that should Corio desire to sell Corio Services to a parent company of a then current Corio Customer that is above this sales revenue threshold, each such sales opportunity shall be discussed as it arises. + +1.4 "CORIO SERVERS" means the unlimited number of computer servers owned or operated by or for Corio which will contain the installed Software (as defined below) for access by Customers in connection with the Corio Services. + +1.5 "CORIO SERVICES" means the hosting services offered by Corio to its Customers in which Corio allows Customers to access the Corio Servers. + +1.6 "CUSTOMER(S)" means one or more customers of the Corio Services having its principal executive offices in the Territory who obtains a sublicense from Corio to use the Software or MarketSite.net Service, in the Corio Market Segment. + +1.7 "DEMONSTRATION SOFTWARE" means copies of the Software which are for demonstration purposes only and which contain sample data and transactions. + + + + + +1.8 "DOCUMENTATION" means any on-line help files or written instruction manuals regarding the use of the Software or MarketSite.net Service. + +1.9 "RELATIONSHIP MANAGERS" means the appointed employee of each party, as set forth on EXHIBIT A attached hereto and made a part hereof, who shall be the primary contact for implementing and administering the terms and conditions of this Agreement. + +1.10 "SOFTWARE" means Commerce One's proprietary software described in EXHIBIT A attached hereto and made a part hereof, in object code form only, and any Updates or Upgrades (as defined below) thereto. + +1.11 "TERRITORY" means the area in which the licenses granted herein are applicable, currently limited to the geographic area of North America. + +1.12 "UPDATE(S)" means any error corrections, bug fixes, modifications or enhancements to the Software, which are indicated by a change in the numeric identifier to the Software in the digit to the right of the decimal, or any error corrections, bug fixes, modifications or enhancements of the Software and MarketSite software used to operate the MarketSite.net Service. + +1.13 "UPGRADE(S)" means a release, function or version of the Software designated as such by Commerce One which contains new features or significant functional enhancements to the Software, which are indicated by a change in the numeric identifier for the Software in the digit to the left of the decimal, or a new release, function or version of the MarketSite.net Service, which Upgrade is provided to Commerce One's installed customer base for the Software and MarketSite software used to operate the MarketSite.net Service. For the purposes of this Agreement, "Maintenance and Support" means those services listed in EXHIBIT C and the provision of Updates and Upgrades as called for by this Agreement + +[*] Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions. + + 2 + +3 2. GRANT OF RIGHTS. + +2.1 Hosting Software License. Subject to the terms and conditions of this Agreement, Commerce One hereby grants to Corio a fee-bearing, perpetual and irrevocable, nonexclusive, nontransferable (except in accordance with Section 14.1 of this Agreement), right and license in the Territory to (i) reproduce the Software in machine executable object code format only for installation on the Corio Servers; (ii) install multiple copies of the Software on Corio's Servers which will be made remotely accessible to Corio's Customers for their subsequent use, (iii) permit limited access to and use of the Software and MarketSite.net Service by Customers through Corio Servers; (iv) sublicense an unlimited number of Customers to access and use the Software and MarketSite.net Service only through the installation on Corio servers; and (v) use Commerce One's tools and utilities, subject to any restrictions placed on the Commerce One by third party software providers, to modify and manage the Software. Except as specifically authorized by this Agreement, no license is granted under this Agreement to Corio to distribute the Software to its Customers or for use other than as part of the Corio Services. + +2.2 Internal Use License. Subject to the terms and conditions of this Agreement, Commerce One grants to Corio a nonexclusive, nontransferable (except in accordance with Section 14.1 of this Agreement), royalty-free, fully paid up, perpetual right and license in the Territory to reproduce, install and use additional copies of the Software and Software tools and utilities, subject to any restrictions placed on the Commerce One by third party software providers, in machine executable object code for (i) Corio's internal business operations and (ii) production, testing, development, upgrade, reporting and training. + +2.3 Demonstration License. Subject to the terms and conditions of this Agreement, Commerce One hereby grants to Corio a nonexclusive, nontransferable (except in accordance with Section 14.1 of this Agreement) royalty-free, fully paid up right and license in the Territory, on Corio Servers, to make a reasonable number of copies of the Demonstration Software solely for demonstration purposes to potential Customers. Demonstration Software shall be made available to Corio's sales personnel and the parties agree to cooperate to make the Commerce One demonstration database available to Corio sales personnel on an ongoing basis. + +2.4 Distribution License: Corio shall have the right to resell licenses for Commerce One software, including Hosted BuySite, to any Corio Customer in the Territory, [*]. Subject to the terms and conditions of this Agreement, Commerce One hereby grants to Corio a nonexclusive, nontransferable (except in accordance with Section 14.1 of this Agreement), right and license in the Territory to sell and distribute such software licenses to Customers pursuant to this Section 2.4. Under no circumstances shall Commerce One contact Corio Customers regarding a non-ASP license sale, unless requested to do so by Corio. Further, if a Corio Customer contacts Commerce One to purchase the Software license + + + + + + independent of the Corio Services, Commerce One shall immediately refer that Customer to Corio. + +2.5 Software User License Agreements. Corio shall make the Software and the MarketSite.net Service on the Corio Servers remotely accessible to Customers under the then current terms of its end user license agreement. As to each Software User who is provided access to the Software, Corio + +[*] Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions. + + 3 + +4 shall secure the Software User's consent to an end user agreement, which provides that the Software User may access and/or use the Software and MarketSite.net Service only under terms and conditions which include, at a minimum, those set forth on EXHIBIT E ("END USER LICENSE AGREEMENT") and made a part hereof. + +2.6 Access to MarketSite.net Service. For the fee set forth in Exhibit B attached hereto and made a part hereof, Corio and its Customers shall have unlimited access to Commerce One's MarketSite electronic catalogue service, as available to Commerce One customers at the URL: Marketsite.net, including without limitation, MarketSite.net Business Transaction Services, MarketPack of Premium Supplier Catalogs, and MarketSite Community Services ("MarketSite.net Service") in accordance with Commerce One's standard access procedures for its customers. In addition, the parties shall share certain revenues related to purchases made by Customers utilizing Commerce One's MarketSite.net Service, as set forth in EXHIBIT B hereto. + +2.7 Restrictions. Corio may not copy, distribute, reproduce, use or allow access to the Software or the MarketSite.net Service except as explicitly permitted under this Agreement, and Corio shall not, nor will it permit any third party to, modify, adapt, translate, prepare derivative works from, decompile, reverse engineer, disassemble or otherwise attempt to derive source code from the Software or any internal data files generated by the Software except as required by law. + +2.8 Ownership. Commerce One hereby retains all of its right, title, and interest in and to the Software, including all copyrights, patents, trade secret rights, trademarks and other intellectual property rights therein. All rights not expressly granted hereunder are reserved to Commerce One. The Software and all copies thereof are licensed, not sold, to Corio. + +2.9 New Products. Updates and Upgrades to the Software and the MarketSite.net Service and software are subject to the terms of this Agreement and are included in the Maintenance and Support fees payable by Corio. Commerce One agrees to license Corio to use future products and solutions offered by Commerce One according to the license fees and other terms and conditions as the parties may agree. These products and solutions may include, but are not limited to the following: e-commerce, and marketing and sales force automation solutions. + +2.10 Expansion of Geographical Scope. The parties agree Corio may seek permission to expand the scope of the licenses granted under this Section 2 worldwide, at no additional cost to Corio, and maintaining the revenue sharing provisions contained herein, and Commerce One shall not unreasonably withhold its permission to expand all such licenses worldwide at no additional cost to Corio. If and when localized versions of the Software become available, these versions shall be made available under the maintenance and support provisions of this Agreement. + +3. DELIVERY OF SOFTWARE. + +3.1 Delivery and Acceptance. Commerce One shall issue to Corio, via electronic means of delivery, as soon as practicable, one (1) machine-readable copy of the Software, along with one (1) copy of the on-line Documentation. Commerce One will provide Corio with one written copy of the Documentation at no cost, and any additional written copies at Commerce One's standard charges. Corio acknowledges that no copy of the source code of the Software will be provided to + + 4 + +5 Corio. Within thirty (30) days of delivery of the Software, but in no event later than December 1, 1999, Corio shall test the Software for conformance with the Documentation ("Acceptance Test"). If the Software performs in substantial accordance with the Documentation, then Corio shall notify Commerce One in writing of its acceptance of the Software. In the event Corio finds material errors or defects with the Software, Corio shall notify Commerce One in writing of such errors or defects and provide adequate detail to facilitate Commerce One replicating the error or defect. Upon receipt of written notice, Commerce One shall have fifteen (15) days to correct the defect, reinstall the Software at the + + + + + + Corio site and re-perform the Acceptance Test. If Corio does not accept the Software after the second Acceptance Test, a third Acceptance Test will be performed. Notwithstanding the foregoing, all Acceptance Testing shall be complete by December 30, 1999, and Corio shall notify Commerce One in writing of it's acceptance or rejection of the Software no later than December 31, 1999. If after the third Acceptance Test Corio does not accept the Software, Corio may, at its sole option, elect to (i) repeat the Acceptance Test or (ii) terminate the Agreement and receive a refund of any fees paid to Commerce One as of such date. Both parties acknowledge that any professional services provided to Corio subsequent to the installation and acceptance of the Software are non-essential for the purpose of the acceptance of the Software. + +3.2 New Versions. Commerce One shall provide Corio with any pre-release versions of relevant Updates or Upgrades of the Software. Commerce One shall make these versions available to Corio to preview at the earliest possible date. Commerce One shall provide all such Updates and Upgrades to Corio free of additional charge and Corio shall, in its sole discretion determine when, and if, to offer any such Updates and/or Upgrades to its Customers. + +3.3 Additional Materials. Commerce One shall use all commercially reasonable efforts to promptly provide Corio with, at a minimum, the following: (i) release notes; (ii) beta releases; (iii) contacts at beta customers, when requested by Corio and subject to the approval of the Commerce One; (iv) proactive bug notification; (v) software patches; (vi) release documentation including technical reference manuals and user guides; and (vii) all applicable data objects relevant to the Software. These materials shall be provided at no cost to Corio. + +4 FEES. + +4.1 License Fees. In consideration for the licenses granted to Corio pursuant to Section 2 of this Agreement, Corio shall pay the license fees specified in EXHIBIT B hereto. Payment terms of such license fees shall be as set forth in EXHIBIT B hereto. + +4.2 Software Support and Maintenance Fees. Corio shall pay to Commerce One an annual Software Maintenance and Support fee for the support services to be provided by Commerce One specified in Exhibit C attached hereto and made a part hereof, and Updates and Upgrades, according to the fees set forth in Exhibit B hereto. Payment terms of annual Software Maintenance and Support fees shall be as set forth in Exhibit B hereto. Maintenance and Support shall automatically continue during the term of this Agreement and thereafter, provided that Corio continues to pay the annual Maintenance and Support fees contained in Exhibit B, attached hereto. + +4.3 Taxes. All fees are exclusive of any sales taxes, use taxes and any other taxes and charges of any kind imposed by any federal, state or local governmental entity for products and services + + 5 + +6 provided under this Agreement, and Corio is responsible for payment of all taxes concerning the Corio Services, excluding taxes based solely upon Commerce One's income. + +4.4 Audit Rights. Corio shall keep true and accurate books of accounts and records for determining the amounts payable to Commerce One under this Agreement. Such books and records shall be kept for at least three (3) years following the end of the calendar month to which they pertain, and shall be open for inspection by an independent certified public accountant reasonably acceptable to Corio for the purpose of verifying the amounts payable to Commerce One under this Agreement. Such inspections may be made no more than once each calendar year, at reasonable times and upon reasonable notice. Commerce One shall bear all costs and expenses of such inspection. If any such inspection discloses a shortfall or an overpayment, the appropriate party shall promptly pay the amount of such shortfall or refund such overpayment. In addition, if any such inspection reveals an underpayment of more than five percent (5%) for the period under audit, Corio shall reimburse Commerce One for the reasonable cost of the examination. + +5 INSTALLATION SUPPORT, MAINTENANCE AND TRAINING. + +5.1 Installation. Commerce One shall provide Corio with access to one (1) full-time operations consultant for one (1) week at no charge to Corio as part of the installation project as described in the Corio Statement of Work - Hosted BuySite ASP, dated October 28, 1999 ("Statement of Work") incorporated herein by reference. + +5.2 Implementation. Commerce One shall provide Corio with sufficient access to Commerce One's professional services organization during the first three (3) implementations of the Software conducted by Corio and its Customers, in accordance with the Statement of Work incorporated herein by reference, subject to the payment by Corio of the professional services fee set forth in Exhibit B hereto ("IMPLEMENTATION FEE"). Additionally, during the term of the Agreement the parties shall meet periodically to discuss Updates and Upgrades to the Software and MarketSite.net Service to better support Corio's and its Customers' specific application requirements, to be provided at no charge to Corio. + + + + + +5.3 Support and Maintenance. Commerce One shall provide Corio with support described in EXHIBIT C hereto, and maintenance in the form of Updates and Upgrades. Corio shall be responsible for providing its Customers with routine technical support of the Software and MarketSite.net Service. Corio shall escalate any technical support questions or problems it is unable to answer or resolve directly to Commerce One for Commerce One's immediate attention and resolution under the schedule set forth in EXHIBIT C hereto. The support described in this Section 5.3 and EXHIBIT C hereto shall be provided to Corio but Commerce One shall have no obligation to provide any maintenance or support services to other third parties. Subject to Corio's payment of the annual support and maintenance fee, Commerce One's support and maintenance obligation of the Software and MarketSite.net Service shall continue after termination or expiration of this Agreement with respect to all Software Users granted access to the Software and MarketSite.net Service prior to termination or expiration of this Agreement. + +5.4 Product Management Meetings. The parties agree to meet either in person or via teleconference on no less than a quarterly basis to discuss, without limitation, engineering, feature-functionality and architecture-related issues as they pertain to the Software and MarketSite.net Service. The specific topics of the meetings will be determined on a meeting-by-meeting basis. Each party + + 6 + +7 shall appoint a product manager to coordinate these meetings. Commerce One shall provide Corio with information relevant to future Software and MarketSite.net Service development efforts, including product and service roadmap, rollout strategy, and plans for future development efforts. The product managers shall be those persons set forth on EXHIBIT A hereto. + +5.5 Training. Commerce One shall provide Corio with training as reasonably requested by Corio to train Corio's technical and support personnel regarding implementation, use and operation of the Software and MarketSite.net Service as part of the Implementation Fee. Thereafter, throughout the term of the Agreement and at Corio's request, Commerce One shall provide additional training to Corio subject to payment of Commerce One's standard training fees at a [*]. Corio shall be responsible for training its Customers regarding proper use of the Software and MarketSite.net Service. Further, the parties shall work together and cooperate to train Corio's sales force and product consultants on the Software and MarketSite.net Service and the alliance contemplated by this Agreement, including without limitation, how to position, sell and demonstrate the Software and MarketSite.net Service to potential customers. + +5.6 Other Services. Upon Corio's request, Commerce One shall provide certain professional services, including without limitation, consulting services, to Corio or its Customers, subject to the mutual written agreement on the scope of such services, pricing and other terms and conditions. + +5.7 Sales and Marketing Efforts. The parties shall engage in joint marketing and sales activities as set forth in EXHIBIT D attached hereto and made a part hereof. + +6 TRADEMARKS. + +6.1 Right to Display. During the term of this Agreement, each party authorizes the other party to display and use the other's trademarks, trade names and logos (collectively, the TRADEMARKS) in connection with that party's sale, advertisement, service and promotion of the Corio Services or the Software and MarketSite.net Service. Each party shall indicate in all product, service, publicity and printed materials relating to the Corio Services or the Software and MarketSite.net Service that such trademarks are the property of the originating party. Upon termination of this Agreement, each party shall cease all display, advertising and use of all Trademarks of the other party and shall not thereafter use, advertise or display any trademark, trade name or logo which is, or any part of which is, confusingly similar to any such designation association with Corio or the Corio Services or Commerce One or any Commerce One product. + +6.2 Promotion Materials and Activities. All representations of the other party's Trademarks that a party intends to use shall be exact copies of those used by the other party and shall first be submitted to the originating party for approval of design, color and other details, which consent shall not be unreasonably withheld or delayed. To ensure trademark quality, each party shall fully comply with all written guidelines provided by the other party concerning the use of the originating party's Trademarks. Each party agrees to change or correct any material or activity that the originating party determines to be inaccurate, objectionable, misleading or a misuse of the originating party's Trademarks. + +[*] Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions. + + 7 + + + + + +8 7 WARRANTIES AND DISCLAIMER. + +7.1 No Conflict. Each party represents and warrants to the other party that it is under no current obligation or restriction, nor will it knowingly assume any such obligation or restriction that does or would in any way interfere or conflict with, or that does or would present a conflict of interest concerning the performance to be rendered hereunder or the rights and licenses granted herein. + +7.2 Intellectual Property Warranty. Commerce One represents and warrants to Corio that (a) Commerce One is the sole and exclusive owner of the Software; (b) Commerce One has full and sufficient right, title and authority to grant the rights and/or licenses granted to Corio under this Agreement; (c) the Software does not contain any materials developed by a third party used by Commerce One except pursuant to a license agreement; and (d) the Software does not infringe any patent, copyright, trade secret, trademark or other intellectual property rights of a third party. + +7.3 Product Warranty. Commerce One warrants that the Software and MarketSite.net Service will perform in substantial accordance with the Documentation, and the media on which the Software is distributed will be free from defects in materials and workmanship under normal use, for a period of sixty (60) days from the Effective Date, but in no event not later than December 31, 1999 (the "Warranty Period"). In addition, Commerce One warrants that during the Warranty Period the Software and MarketSite.net Service is free of any willfully introduced computer virus, or any other similar harmful, malicious or hidden program or data, which is designed to disable, erase, or alter the Software, or any other files, data, or software. If during the Warranty Period the Software and MarketSite.net Service does not perform in substantial compliance with the Documentation, Commerce One shall take all commercially reasonable efforts to correct the Software and MarketSite.net Service, or if correction of the Software and MarketSite.net Service is reasonably not possible, replace such Software and MarketSite.net Service free of charge. Commerce One will replace any defective media returned to Commerce One during the Warranty Period. In the event any such breach of warranty can not be reasonably corrected at Commerce One's sole expense, Corio has the right to terminate this Agreement and receive a refund of all prepaid fees. The foregoing are Corio's sole and exclusive remedies for breach of product warranty. The warranty set forth above is made to and for the benefit of Corio only. The warranty shall not apply only if: + + (a) the Software and MarketSite.net Service has been not properly installed and used at all times and in accordance with the Documentation; and + + (b) Corio has requested modifications, alterations or additions to the Software and MarketSite.net Service that cause it to deviate from the Documentation. + +7.4 Product Warranty - Year 2000 Compliance. Commerce One warrants that the Software and MarketSite.net Service, when used in accordance with its associated documentation, is in all material respects capable upon installation of accurately processing, providing and/or receiving date data from, into and between the twentieth and twenty-first centuries, including the years 1999 and 2000, and leap year calculations; provided that all licensee and third party equipment, systems, hardware, software and firmware used in combination with the Software and MarketSite.net Service properly exchange date data with the Software and MarketSite.net Service + + 8 + +9 OTHERWISE, INCLUDING WITHOUT LIMITATION THE IMPLIED WARRANTIES OF MERCHANTABILITY, NONINFRINGEMENT AND FITNESS FOR A PARTICULAR PURPOSE. + +8 INDEMNIFICATION. + +8.1 By Commerce One. Commerce One shall indemnify, defend and hold harmless Corio and its Customers from any and all damages, liabilities, costs and expenses (including reasonable attorneys' fees) incurred by Corio or its Customers arising out of any claim that the Software infringes any patent, copyright, trademark or trade right secret of a third party; provided that Corio or its Customer promptly notifies Commerce One in writing of any such claim and promptly tenders the control and the defense and settlement of any such claim to Commerce One at Commerce One's expense and with Commerce One's choice of counsel. Corio or its Customer shall cooperate with Commerce One, at Commerce One's expense, in defending or settling such claim and Corio or its Customer may join in defense with counsel of its choice at its own expense. If the Software is, or in the opinion of Commerce One may become, the subject of any claim of infringement or if it is adjudicatively determined that the Software infringes, then Commerce One may, at its sole option and expense, either (i) procure for Corio the right from such third party to use the Software, (ii) replace or modify the Software with other suitable and substantially equivalent products so that the Software becomes noninfringing, or if (i) and (ii) are not practicable after Commerce One has exhausted all diligent efforts, (iii) terminate this + + + + + + Agreement and refund to Corio a pro-rated portion of the fees paid hereunder. + +8.2 Limitations. Commerce One shall have no liability for any infringement based on (i) the use of the Software other than as set forth in the Documentation; or (ii) the modification of the Software by a party other than Commerce One, when such infringement would not have occurred but for such modification. + +9 LIMITATION OF LIABILITY. + + EXCEPT FOR LIABILITY ARISING UNDER SECTION 8 OF THIS AGREEMENT, IN NO EVENT SHALL EITHER PARTY'S LIABILITY ARISING OUT OF THIS AGREEMENT OR THE USE OR PERFORMANCE OF THE SOFTWARE EXCEED THE TOTAL AMOUNT ACTUALLY PAID BY CORIO HEREUNDER FOR THE TRANSACTION WHICH THE LIABILITY RELATES TO DURING THE TWELVE (12) MONTHS IMMEDIATELY PRIOR TO THE FILING OF THE CAUSE OF ACTION TO WHICH THE LIABILITY RELATES. EXCEPT FOR LIABILITY ARISING UNDER SECTION 8 OF THIS AGREEMENT, IN NO EVENT SHALL EITHER PARTY HAVE ANY LIABILITY TO THE OTHER PARTY FOR ANY LOST PROFITS OR COSTS OF PROCUREMENT OF SUBSTITUTE GOODS OR SERVICES, OR FOR ANY INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES HOWEVER CAUSED AND UNDER ANY THEORY OF LIABILITY AND WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE. THE PARTIES AGREE THAT THIS SECTION 9 REPRESENTS A REASONABLE ALLOCATION OF RISK. + + 9 + +10 LIABILITY RELATES. EXCEPT FOR LIABILITY ARISING UNDER SECTION 8 OF THIS AGREEMENT, IN NO EVENT SHALL EITHER PARTY HAVE ANY LIABILITY TO THE OTHER PARTY FOR ANY LOST PROFITS OR COSTS OF PROCUREMENT OF SUBSTITUTE GOODS OR SERVICES, OR FOR ANY INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES HOWEVER CAUSED AND UNDER ANY THEORY OF LIABILITY AND WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE. THE PARTIES AGREE THAT THIS SECTION 9 REPRESENTS A REASONABLE ALLOCATION OF RISK. + +10 CONFIDENTIALITY. + + Each party hereby agrees that it shall not use any Confidential Information received from the other party other than as expressly permitted under the terms of a non-disclosure agreement to be concurrently executed with this Agreement. + +11 TERM AND TERMINATION. + +11.1 Term. The term of this Agreement shall commence on the Effective Date and shall continue in full force and effect for an initial period of five (5) years. Thereafter, this Agreement shall automatically renew for subsequent one (1) year periods unless either party provides the other party with written notification at least thirty (30) days prior to the expiration of the initial five (5) year term or any one (1) year renewal thereof of its intention to terminate this Agreement. + +11.2 Termination. If either party materially breaches any term or condition of this Agreement and fails to cure such breach within-thirty (30) days after receiving written notice of the breach, the nonbreaching party may terminate this Agreement on written notice at any time following the end of such-thirty (30) day period. This Agreement shall terminate immediately upon notice if either party becomes insolvent (i.e., becomes unable to pay its debts in the ordinary course of business as they come due) or makes an assignment for the benefit of creditors. Compliance by the Software with the Software's specifications after expiration of the Warranty Period shall be deemed a material condition of this Agreement. + +11.3 Effect of Termination. The following Sections shall survive the termination or expiration of this Agreement for any reason: 4.2, 5.3, 7, 8, 9, 10, 12 and 14. Corio's right to allow its then-existing Customers and their Software Users to use and access the Software in accordance with Section 2 of this Agreement and all payment obligations related thereto shall survive any termination or expiration of this Agreement. Commerce One's obligation to provide Software support and maintenance to Corio and its Customers shall survive any termination or expiration of this Agreement, provided Corio continues to make its annual support and maintenance payments as specified in this Agreement. Upon termination or expiration of this Agreement, each party shall otherwise return or destroy any Confidential Information of the other party provided, however, Corio may retain any Confidential Information necessary for Corio to continue supporting it's then-existing Customers. + +12 SOURCE CODE ESCROW. + +12.1 Escrow Account. Within sixty (60) days of the Effective Date, Commerce One agrees to execute an escrow agreement by and among Corio, Commerce One and a mutually acceptable escrow agent (the "ESCROW AGENT"). The Escrow Agent shall require Commerce One to place in an + + 10 + +11 escrow account in California a copy of the source code of the Software + + + + + + including all Updates and Upgrades thereto, documentation and similar materials (the SOURCE CODE). The escrow agreement shall contain, at a minimum, the terms and conditions set forth in this Section 12. Corio shall bear all fees, expenses and other charges to open and maintain such escrow account. If a Release Condition (as defined in Section 12.2 of this Agreement) occurs and the Escrow Agent provides the Source Code to Corio under the escrow agreement, Corio agrees to hold the Source Code in confidence pursuant to the provisions contained in Section 10 of this Agreement, and not to use them for any purpose other than those purposes contemplated under Section 12.3 of this Agreement. + +12.2 Release. Corio shall notify Commerce One in writing if it believes that one of the following events (the "RELEASE CONDITIONS") has occurred and that it intends to seek release of the Source Code from the escrow account: (i) Commerce One's dissolution or ceasing to do business in the normal course, or (ii) Commerce One's repeated and material breach of its support and maintenance obligations under Section 5 of this Agreement and such breach is not cured within sixty (60) days of receipt of written notice thereof from Corio. If Commerce One notifies Corio in writing that it disputes whether any such event has occurred, officers of each of the parties shall negotiate for a period of ten (10) business days to attempt to resolve the dispute. At the end of such ten (10) business day period, if the parties have not resolved the dispute, the matter shall be referred to arbitration in the manner provided in Section 14.3 of this Agreement. + +12.3 License. Upon the release of the Source Code to Corio pursuant to Section 12.2 of this Agreement, Corio shall have a royalty-free, nonexclusive, nontransferable, right and license in the Territory to use and modify the Source Code to support and maintain the Software until the expiration or termination of Corio's Customers' End User License Agreements. The object code derived from the Source Code so modified shall be subject to the same rights and restrictions on use, reproduction and disclosure that are contained in this Agreement with respect to the Software. Corio shall not distribute, sell or sublicense the Source Code. Subject to the licenses expressly granted in this Agreement, Commerce One shall retain all right, title and interest in and to the Source Code. This license shall be deemed to extend worldwide in scope if Corio, at the time one or more Release Conditions has occurred, has been granted worldwide license rights by Commerce One under Section 2 of this Agreement. + +13 SHARED RESOURCES. + +13.1 Operations. To the extent not provided for within the Statement of Work covered by the Implementation Fee, Commerce One shall provide Corio with access to Commerce One operations personnel as reasonably requested by Corio, subject to payment by Corio of Commerce One's standard fees [*]. These Commerce One operations personnel shall work together with Corio personnel to optimize the architecture and performance of the Software and MarketSite.net Service in a hosted environment. Commerce One shall only commit personnel with expertise in installations, operating environments and networking functionality. + +13.2 Consulting. To the extent not provided for within the Statement of Work covered by the Implementation Fee, Commerce One shall provide Corio with access to Commerce One consulting personnel as reasonably requested by Corio, subject to payment by Corio of Commerce One's standard fees [*]. These Commerce One + +[*] Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions. + + 11 + +12 consulting personnel shall initially work together with Corio personnel to develop implementation templates. Commerce One may, in its sole but reasonable discretion, elect to assign resources from a third party systems integrator subject to advance notification to Corio of such election. + +13.3 Engineering. Commerce One shall provide Corio with reasonable access to Commerce One engineering personnel at no additional cost to Corio. Joint engineering work may include product development, including without limitation, technical and functional application development and integration. + +13.4 Other. All services provided hereunder, in addition to services subsequently requested by Corio (e.g. customization of the Software) shall be subject to the terms of a separate agreement between the parties. + +13.5 Ownership. Subject to Commerce One's pre-existing ownership of any materials or technology provided to Corio, the results of all such development efforts set forth in this Section 13, including all intellectual property rights in any software interface coding or programs created solely by Corio during the term of this Agreement to enable the Software to operated within the Corio Servers' hosted environment ("DEVELOPMENTS"), shall be owned by Corio, unless such Developments are supported on an ongoing basis by Commerce One in which case Commerce One will retain all ownership rights, including + + + + + + intellectual property rights in the Developments. To the extent that Commerce One would otherwise have a claim of ownership in such Developments, Commerce One hereby assigns all rights in and to such Developments to Corio. Further, Commerce One represents and warrants that all Commerce One employees, agents, contractors or consultants that will be provided to work together with Corio have or will have signed agreements with customary terms containing confidentiality provisions and assignment of inventions ("EMPLOYEE NDA/INVENTION AGREEMENT"). Corio covenants and warrants that it will not disclose to Commerce One or its officers, directors, employees, agents, contractors or consultants any proprietary information, including without limitation any technical information related to Developments created solely by Corio under this Agreement, except upon the written authorization to do so by a Corporate Officer of Commerce One. Commerce One covenants that during the term of this Agreement, it will continue to require all Commerce One employees, agents, contractors or consultants to sign an Employee NDA/Invention Agreement and that Commerce One will furnish to Corio copies of such signed agreements upon Corio's request. Ownership of intellectual property rights to any enhancements, modifications or derivative works to the Software itself which may be developed jointly by the parties or solely by Corio shall be negotiated by the parties prior to the start of any such development work. + +13.6 Independent Development: Covenant not to Sue. Nothing in this Agreement will be construed to prohibit either parties' right to independently develop the Developments contemplated above. Each party covenants that it shall not, under any circumstances, sue the other party (or its officers, directors, successors and assigns) or any of that parties' licensees, customers, or distributors ("Protected Entities") for patent infringment under any future patents or future patent rights relating to said Developments, that either party owns or controls, so long as that Protected Entity has a license from Commerce One or Corio to the Software, or to a product that is a modification of, derivative work based on, or replacement for the Software. The foregoing covenant is binding on Corio's permitted successors and assigns, and inures to the benefit of any + + 12 + +13 of Commerce One's successors and assigns, and is binding on Commerce One's permitted successors and assigns, and inures to the benefit of any of Corio's successors and assigns. + +14 MISCELLANEOUS. + +14.1 Assignment. Neither party may assign this Agreement or any rights or obligations hereunder, whether by operation of law or otherwise, without the prior written consent of the other party. Notwithstanding the foregoing, either party shall have the right to assign this Agreement in connection with the merger or acquisition of such party or the sale of all or substantially all of its assets related to this Agreement without such consent, except in the case where such transaction involves a direct competitor of the other party where consent of the other party will be required. Subject to the foregoing, this Agreement will bind and inure to the benefit of the parties, their respective successors and permitted assigns. Any assignment in violation of this Section 14.1 shall be null and void. + +14.2 Waiver and Amendment. No modification, amendment or waiver of any provision of this Agreement shall be effective unless in writing and signed by the party to be charged. No failure or delay by either party in exercising any right, power, or remedy under this Agreement, except as specifically provided herein, shall operate as a waiver of any such right, power or remedy. + +14.3 Choice of Law; Arbitration; Venue. This Agreement shall be governed by the laws of the State of California, USA, excluding conflict of laws provisions and excluding the 1980 United Nations Convention on Contracts for the International Sale of Goods. Any disputes arising out of this Agreement shall be resolved by binding arbitration in accordance with the then-current commercial arbitration rules of the American Arbitration Association ("RULES"). The arbitration shall be conducted by one (1) arbitrator appointed in accordance with the Rules in San Francisco County, California. A judgment upon the award may be entered in any court having jurisdiction of the parties, including without limitation the courts in San Francisco, California. The non-prevailing party in the arbitration shall pay all fees and charges of the American Arbitration Association; each party, however, shall be responsible for the payment of all fees and expenses connected with the presentation of its respective case. + +14.4 Notices. All notices, demands or consents required or permitted under this Agreement shall be in writing. Notice shall be considered delivered and effective on the earlier of actual receipt or when (a) personally delivered; (b) the day following transmission if sent by telex, telegram or facsimile followed by written confirmation by registered overnight carrier or certified United States mail; or (c) one (1) day after posting when sent by registered private overnight carrier (e.g., DHL, Federal Express, etc.); or (d) five (5) days after posting when sent by certified United States mail. Notice shall be sent to the parties at the addresses set forth on the first page of this Agreement or at such other address as shall be specified by either party to the other in writing. + + + + + +14.5 Independent Contractors. The parties are independent contractors with respect to each other. Each party is not and shall not be deemed to be an employee, agent, partner or legal representative of the other for any purpose and shall not have any right, power or authority to create any obligation or responsibility on behalf of the other. + +14.6 Severability. If any provision of this Agreement is held by a court of competent jurisdiction to be contrary to law, such provision shall be changed and interpreted so as to best accomplish the + + 13 + +14 objectives of the original provision to the fullest extent allowed by law and the remaining provisions of this Agreement shall remain in full force and effect. + +14.7 Force Majeure. Neither party shall be deemed to be in breach of this agreement for any failure or delay in performance caused by reasons beyond its reasonable control, including but not limited to acts of God, earthquakes, strikes or shortages of materials. + +14.8 Subcontract. Commerce One understands and agrees that Corio shall solely direct the provision of Corio Services and may subcontract certain portions of the Corio Services to third parties at any time during the term of the Agreement. + +14.9 Bankruptcy. The parties hereto agree that Corio, as a licensee of Commerce One's intellectual property, shall be afforded all of the protections afforded to a licensee under Section 365(n) of the United States Bankruptcy Code, as amended from time to time (the "CODE") so that the Trustee or Debtor in Possession, as defined in the Code, will not interfere with Corio's license with respect to the Software as provided in this Agreement, as set forth in Section 365(n) of the Code. + +14.10 Complete Understanding. This Agreement including all Exhibits, and the Non Disclosure Agreement and the Statement of Work referenced in this Agreement and incorporated by reference herein, constitutes the final, complete and exclusive agreement between the parties with respect to the subject matter hereof, and supersedes any prior or contemporaneous agreement. IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective Date. + +CORIO, INC. COMMERCE ONE, INC. + +By: /s/ Signature Illegible By: /s/ Signature Illegible -------------------------------- Name: GEORGE KADIFA Name: MARK S. BIESTMAN --------------------------- ------------------------------ + +Title: CEO Title: V.P. WORLDWIDE SALES -------------------------- ------------------------------ + +Date: 11/5/99 Date: -------------------------- ------------------------------ + + 14 + +15 EXHIBIT A + + SOFTWARE + +1. SOFTWARE. Hosted BuySite v 6.0 + +2. DEMONSTRATION SOFTWARE. Hosted BuySite v 6.0 + +3. RELATIONSHIP MANAGERS. The Corio Relationship Manager shall be: __________. The Commerce One Relationship Manager shall be: ________. + +4. PRODUCT MANAGERS. For purposes of Section 5.4 of this Agreement, the Corio product manager shall be: _________. + + The Commerce One product manager shall be: _______________. + + 15 + +16 EXHIBIT B + + PRICING + +SOFTWARE: BuySite Hosted Edition version 6.0 + + + + + +MarketSite.net Service access + +SOFTWARE USERS: BuySite Hosted Edition: Unlimited + +LICENSE FEES: BuySite Hosted Edition: [*] + +MARKETSITE.NET SERVICE FEES: MarketSite.net Service Access: Year 1 [*] Year 2-5, and beyond: [*] + +MAINTENANCE AND SUPPORT FEES: Year 1 [*] Year 2-5, and beyond: [*] + +REVENUE SHARING FEES: + +1. MarketSite Transaction Revenue: Commerce One to pay Corio [*] of all transaction fees from Corio Customer transactions on MarketSite. + +2. Corio Customer Application Management Revenue: Corio to pay Commerce One [*] of all Application Management Revenue from Corio Customers for use of Commerce One Software or MarketSite.net Service Access subject to the following limitations. + + A. No Application Management Revenue shall be due for any Corio Customer subscriptions utilizing the initial 3000 Software User licenses granted herein, subject to a minimum limitation of 40 Authorized Software Users per Customer + + B. The Corio invoice amounts used to calculate the revenues subject to this revenue share shall not include Professional Service fees, or Network access fees. + + C. These Application Management Revenue fees shall begin accruing when the Corio Customer begins live operations. + +IMPLEMENTATION FEES: Time and Materials Basis Billed at [*] in accordance with The Statement of Work as agreed between the parties, not to exceed [*]. + +* Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions. + + 16 + +17 PAYMENT TERMS + +License Fees: Due upon Software Acceptance. + +Maintenance and Support Fees: Net 30 of Software acceptance anniversary date, and each year thereafter. Revenue Sharing Fees: Quarterly payments shall be due to receiving party, net 30 days after quarter close. + +Implementation or Professional Service Fees: Net 30 days from date of Commerce One invoice, which shall be issued only after successful completion of each agreed upon milestone. + +MarketSite.net Access Fee: Due upon Software Acceptance, and on each annual anniversary of Software Acceptance thereafter. + + 17 + +18 EXHIBIT C + + CUSTOMER SERVICE OUTLINE + +1. CONTACTING SUPPORT: + +EMAIL: csc@commerceone.com + +FAX: (925) 941-6060 + +SUPPORT HOTLINE: (925) 941-5959 + +WWW: http://commerceone.com/solutions/osupport.htm + +Our web access allows you to submit new incidents and be notified in real time by the support team, who will provide suggestions and technical support to resolve your issue. Such support will include clarification of the functions and features of the Software, clarification of the documentation, guidance in the operations of the Software, and error correction analysis and verification to the extent possible remotely. + + + + + +2. SERVICE HOURS: Staffed Monday - Friday, 7 am to 7 pm PST (except holidays). After hours support available 24x7 for Priority 1 technical issues only. + +3. PRIORITY DEFINITION: + + COMMERCE ONE RESPONSIBILITIES: + + * Priority 1: The software and/or the hosted physical infrastructure is not operational and no workaround exists. Customer's production/business is seriously affected. + + * Priority 2: Software and/or the hosted physical infrastructure functionality is impaired, does not work like proposed, but it is operational + + CORIO RESPONSIBILITIES: + + * Priority 3: Minor software and/or the hosted physical infrastructure problems or functionality questions. + + * Priority 4: Enhancement request or cosmetic problems. + +4. RESPONSE TIME: (Commitment to customers) Commence One will make every attempt to contact our customers within 30 minutes of the report of a critical incident, and to notify and work with any third party vendors providing ancillary services that may be affected by the incident. However, for providing specific action plans for resolutions, we are committed to the following schedule: + + * Priority 1 incidents: 2 hours + + * Priority 2 incidents: 4 hours + +For resolution of incidents, we are committed to the following schedule: + + * Priority 1 incidents: we will respond as provided above and continue resolution efforts on a 24 x 7 basis until the incident has been resolved + + * Priority 2 incidents: we will respond as provided above and continue resolution efforts during business hours until the incident has been resolved + + 18 + +19 5. SUPPORT CONTACTS: + +Up to 5 individuals can be designated as "Registered Customers" to contact Commerce One for Support services. Upon written notice, customers may change their designated contacts. [Additional contacts can be purchased at additional cost as mutually agreed. Specify the 5 contacts on the Customer Profile form. + + 19 + +20 EXHIBIT D + + SALES AND MARKETING COOPERATION + +The parties agree to the following non-binding sales and marketing cooperation efforts: + +1. RELATIONSHIP MANAGERS. The parties' Relationship Managers would attempt to meet at mutually agreeable times no less than every quarter to review and coordinate sales efforts and review customer response to the Software, the MarketSite.net Services and the Corio Services, and address other topics related to this Agreement. + +2. SALES COMPENSATION. The parties agree to provide their internal and external sales and marketing personnel sufficient compensation incentives designed to actively promote and encourage cross-selling of the Corio Services, and the Software and the MarketSite.net Services, respectively. + +3. JOINT MARKETING PLANS. During the term of this Agreement the parties agree to develop, review and submit to each other new and continuing marketing plans with respect to the Corio Services and the Software and MarketSite.net Services, respectively. + +4. MARKETING FUND. Within six (6) months after the Effective Date of the Agreement, Corio and Commerce One each would contribute to a marketing fund to be jointly managed by the parties to promote the sale and marketing of the Corio Services, the Software and the MarketSite.net Services. + +5. PERSONNEL. Each party agrees to assign one (1) existing sales or marketing employee primarily dedicated to assist in the sales and marketing promotional activity set forth in this Exhibit D. + + + + + +6. COOPERATION AND PUBLICITY. Upon mutual agreement, Corio and Commerce One may engage in the following activities: joint publicity releases, joint marketing materials, joint marketing calls, joint conference and trade show efforts, and strategy coordination concerned with promoting the Software, the MarketSite.net Services and the Corio Services in the commercial marketplace. + +7. INITIAL CUSTOMERS. Within sixty (60) days after the Effective Date of the Agreement, Corio agrees to use commercially reasonable efforts to obtain orders from two (2) Customers for the Corio Services which include access to the Software and MarketSite.net Services. + + 20 \ No newline at end of file diff --git a/full_contract_txt/CURAEGISTECHNOLOGIES,INC_05_26_2010-EX-1-CORPORATE SPONSORSHIP AGREEMENT.txt b/full_contract_txt/CURAEGISTECHNOLOGIES,INC_05_26_2010-EX-1-CORPORATE SPONSORSHIP AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..a09fa4b3093d9a6f3b717dcefdd64a8f75975ea2 --- /dev/null +++ b/full_contract_txt/CURAEGISTECHNOLOGIES,INC_05_26_2010-EX-1-CORPORATE SPONSORSHIP AGREEMENT.txt @@ -0,0 +1,157 @@ +CORPORATE SPONSORSHIP AGREEMENT + +This agreement (the "Agreement") is entered into as of May 18, 2010, (the "Effective Date") by and between Phoenix Performance, LLC, 481 Schuylkill Road, Phoenixville, PA 19460 ("Vendor") and Torvec Inc.., a New York corporation with its principal place of business located at 1999 Mt Read Blvd, Building 3, Rochester, NY. 14615 (Torvec). + +RECITALS + +WHEREAS, the parties desire to enter into an agreement regarding promotional, marketing and sponsorship activities designed to be of mutual benefit as described herein; and + +NOW, THEREFORE, for and in consideration of the mutual covenants, rights and obligations set forth in this Agreement, the parties agree as follows: + +1. Term + +The term of this Agreement (the "Term") shall commence on the Effective Date and conclude on October 31, 2010, unless renewed by agreement or sooner terminated in accordance with this Agreement. + +2. Termination + +(a) Either party may terminate this Agreement immediately if the other party (i) files a petition commencing a voluntary case under the Bankruptcy Code; (ii) makes a general assignment for the benefit of creditors; (iii) admits in writing its inability to pay its debts as they become due; (iv) seeks, consents to or acquiesces in the appointment of any trustee, receiver or liquidator of it or any part of its property; or (v) has commenced against it an involuntary case under the Bankruptcy Code or a proceeding under any receivership, composition, readjustment, liquidation, insolvency, dissolution or like law or statute, which case or proceeding is not dismissed or vacated within sixty (60) days. + +(b) Upon termination of this Agreement, NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY CONSEQUENTIAL, EXEMPLARY, SPECIAL, INCIDENTAL OR PUNITIVE DAMAGES, EVEN IF IT HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, WHICH ARE RELATED TO THE AGREEMENT OR ITS BREACH. + +Preparation, maintenance and running of one (1) T-1 C5 Corvette race vehicle to race in: + +a. 1 round of the World Challenge series in the GTS class (Mosport Double); + +b. 4 rounds of SCCA National Racing (events to be finalized but at this time expected to be NJMP, Road America, Watkins Glen Double); + +c. the SCCA runoffs at Road America. + +. + +5. Payment and Other Consideration + +As consideration for the benefits it receives under this Agreement, Torvec shall provide the following to Vendor: + +See Exhibit A + +The schedule set forth in Exhibit A will constitute invoicing for the events. Notwithstanding the above, Torvec may, in its sole discretion, cancel its participation in any of the above-referenced events by notifying Vendor of such cancellation not later than two weeks prior to the due date(s) for payment hereunder. All checks shall be made payabe to: Phoenix Performance, LLC and mailed to 481, Schuylkill Rd, Phoenixville, Pa. 19460. + +(b) Equipment + + 3. Responsibilities and Benefits + + Vendor shall be responsible for the following in 2010: + + 4. Torvec Benefits + + During the Term of this Agreement, Torvec shall be entitled to the following sponsorship benefits: + + a) Primary sponsorship rights to all of Vendor's participation efforts in the above race events. + + b) The right to specify and approve all team sponsorship identification markings, logos, graphics, etc. for vehicle livery, team equipment and uniforms. + + c) Sole right to disapprove any driver selected by Vendor for any reason. The driver for these events will be John Heinricy. + + (a) Payment Schedule + + + + + +Torvec will provide to Vendor the use of up to 2 Differential units to be used in the T-1 C5 Corvette for testing, evaluation and racing purposes.. + +6. Grant of License + +Each party shall have a non-exclusive, royalty free, non-transferable license to use the name, logo, any item used in connection with that name or logo, and the registered symbols and trademarks of the other party (the "Trademarks") only for the purposes set forth in this Agreement. Neither party will use the other's Trademarks without obtaining the prior approval of the other party. Any materials using Trademarks which are submitted to one party by the other are deemed to be approved if the receiving party has not disapproved the material in writing within ten (10) business days after it receives a request for approval. The parties shall not unreasonably disapprove any material. If any material is disapproved by one party, it will advise the other of the specific reasons for the disapproval. Once materials are approved by one party, the other party may make multiple uses of those approved materials and any images, likenesses, and photographs contained therein in the same or substantially similar media without seeking the other party's further approval. + +The approval by a party to use its registered symbols or trademarks does not convey any rights, title or interest to the other party in and to such registered symbols and trademarks. The party receiving permission to use a registered symbol or trademark will (i) follow all reasonable instructions from the + +owner regarding that symbol or trademark; and (ii) take all reasonable steps to protect it, including, when appropriate, using the symbols "®" or "™". The rights granted under this Section 6 cease upon the expiration or termination of this Agreement. + +7. Confidentiality + +It is recognized that Torvec is a public company and as such, will file this Agreement with the United States Securities and Exchange Commission in accordance with rules and regulations promulgated by the Commission. It is also recognized that Torvec is entering into this Agreement in order to promote the aftermarket sale of its IsoTorque differential and to that end, either party may issue press and other informational releases, announcements, promotional programs, packages and materials relating to the subject matter of this Agreement without the other party's approval, provided that both parties shall have the right to comment upon and offer suggestions with respect to such releases, + +programs, etc. prior to their actual release. + +8. Insurance + +Vendor shall maintain insurance for not less than the following limits and coverage with duly licensed insurance companies having an A.M. Best rating of A-, X or better. In addition to covering all of the normal operations of Vendor, this insurance shall cover all of the activities and events described under this Agreement. + +9. Representations + +Vendor represents and warrants to Torvec the following: (i) it has the authority to enter into this Agreement and to perform hereunder in accordance with its provisions; (ii) no other person or entity has the right to be the exclusive automotive sponsor of the activities and the events set forth in this Agreement; and (iii) it will perform its obligations under this Agreement in compliance with all applicable laws, rules and regulations. + +10. Notices + +All notices provided herein shall be in writing and are effective upon receipt if hand delivered, sent by overnight courier (with ability to confirm receipt), by fax or by registered or certified mail, return receipt requested, addressed to the respective parties hereto as follows: + +Either party may change its address for notice by giving written notice to the other party. + +11. Amendments + +This Agreement shall not be altered or amended, nor any rights hereunder waived, except by written agreement between both parties. No waiver of any term, provision or condition of this Agreement, in any one or more instances, shall be deemed to be or construed as a further or continuing waiver of any other term, provision or condition. + +12. Assignment + +Neither party may assign its rights or powers under this Agreement without the express written consent of the other, which consent shall + + • General Liability: Vendor shall maintain commercial general liability (CGL) insurance with a limit of not less than $1 million each occurrence. CGL coverages shall be written on ISO occurrence form CG 00 01 or a substitute form providing equivalent coverage and shall cover liabilities arising from events, premises, operations, independent contractors, products-completed operations, personal injury and advertising injury, and liability assumed under an insured contract. Subaru of America, Inc., its parent and subsidiaries shall be included as additional insureds under the CGL using ISO additional insured endorsement CG 20 10 or a substitute providing equivalent coverage. + + If to Vendor(s): If to Torvec: Phoenix Performance, LLC Torvec, Inc.. 481 Schuylkill Road 1999 Mt Read Blvd Phoenixville, PA 19460 Building 3 ATTN: JOE AQUILANTE Rochester, NY. 14615 Fax: 610.482.0142 + + + + + +not be unreasonably withheld. Any attempt to assign without the other party's consent will be null and void and will afford the non-assigning party the right to immediately cancel and terminate this Agreement. + +13. No Joint Venture + +This Agreement does not constitute and may not be construed as constituting a partnership or joint venture between the parties. Neither party may obligate or bind the other in any manner whatsoever, and nothing in this Agreement gives any rights to any third person. At all times, the parties are independent contractors. + +14. Survival + +Those provisions of this Agreement which by their nature extend beyond termination or expiration of this Agreement will survive such termination or expiration. + +15. Waiver + +No waiver of a breach of any provision of this Agreement is effective unless approved in writing by the waiving party. If a party at any time fails to demand strict performance by the other of any of the terms, covenants or conditions set forth in this Agreement, that waiver does not constitute a waiver of any prior, concurrent, or subsequent breach of the same or any other provision of this Agreement. + +16. Other Instruments + +The parties will execute and deliver such other and further instruments and documents as are or may become necessary to effectuate and carry out the rights, responsibilities, and obligations created by this Agreement. + +17. Paragraph Headings + +Paragraph headings in this Agreement are for convenience only. They form no part of this Agreement and shall not affect its interpretation. + +18. Governing Law, Jurisdiction and Venue + +This Agreement is to be governed and construed according to the laws of the State of New York without regard to conflicts of law. The parties agree that each of them hereby submits to the jurisdiction of the New York State and federal courts for the purpose of resolving any dispute arising under this Agreement and that the exclusive venue for resolution of such disputes shall be state or federal courts located in Monroe County, New York. + +20. Entire Agreement + +This Agreement contains the entire agreement between the parties with respect to the subject matter herein and supercedes all prior understandings, written or oral, between the parties with respect to this subject matter. No variations, modifications, or changes in this Agreement are binding upon any party to the Agreement unless set forth in a document duly executed by or on behalf of such parties. + +21. Force Majeure + +Neither party will hold the other liable for failure to comply with any of the terms or conditions of this Agreement when such failure to comply has been caused by fire, weather, labor dispute, strike, war, insurrection, terrorism, government restriction or acts of God beyond the reasonable control of the parties, provided the party failing to comply uses all reasonable diligence to remedy such failure as promptly as practicable. + +22. Severability + +If for any reason one or more provisions of this Agreement are held to be invalid, illegal or unenforceable in any respect, such provision will be deemed deleted, and the deletion will not affect the validity of other provisions of this Agreement. + +23. Construction + +The rule of construction to the effect that any drafting ambiguities are to be resolved against the drafting party will not be employed in the interpretation of this Agreement or any amendments or exhibits thereto. + +IN WITNESS WHEREOF, and intending to be legally bound hereby, the parties have caused this Agreement to be executed and delivered by their proper and duly authorized officers or representatives as of the date first above written. + +Signature Signature + + FOR VENDOR: FOR TORVEC.: + + Joseph F. Aquilante, President Print Name and Title of person above + +Keith E. Gleasman, President Print Name and Title of person above \ No newline at end of file diff --git a/full_contract_txt/CUROGROUPHOLDINGSCORP_05_04_2020-EX-10.3-SERVICING AGREEMENT.txt b/full_contract_txt/CUROGROUPHOLDINGSCORP_05_04_2020-EX-10.3-SERVICING AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..4a9a3d8ba13ef4cf5daa34775fd5571dcc11ddc0 --- /dev/null +++ b/full_contract_txt/CUROGROUPHOLDINGSCORP_05_04_2020-EX-10.3-SERVICING AGREEMENT.txt @@ -0,0 +1,289 @@ +Ex 10.3 + +SERVICING AGREEMENT + +between + +CURO RECEIVABLES FINANCE II, LLC, as Owner + +and + +CURO MANAGEMENT, LLC, as Servicer + +Dated as of April 8, 2020 + +This SERVICING AGREEMENT (this "Agreement") is entered into as of April 8, 2020, by and between CURO RECEIVABLES FINANCE II, LLC, a Delaware limited liability company (the "Owner"), and CURO MANAGEMENT, LLC, a Delaware limited liability company, as servicer (the "Servicer"). + +Capitalized terms used but not defined herein shall have the meanings set forth in Annex A attached hereto. + +W I T N E S S E T H: + +WHEREAS, the Owner desires to have the Servicer to master service the Serviced Assets, to perform certain of the duties of the Owner, and to provide such additional services consistent with the terms of this Agreement and the Loan Documents as the Owner may from time to time request; and + +WHEREAS, the Servicer has the capacity to provide the respective services required hereby and is willing to perform such services for the Owner on the terms set forth herein. + +NOW, THEREFORE, in consideration of the mutual covenants contained herein, and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties agree as follows: + +Section 1. Servicing Duties of the Servicer. + +(a) The Owner authorizes Curo Management, LLC, to act, and Curo Management, LLC, agrees to act, as an independent contractor, as the Servicer effective upon the date hereof. + +(b) From and after the date on which a Receivable or Participation Interest, as applicable, is sold to the Owner, the Servicer shall service and administer each related Serviced Asset for the benefit of the Owner and shall extend, amend or otherwise modify such Serviced Asset, by complying in all material respects with the following (collectively, the "Servicing Standard"): (A) reasonable care, using that degree of skill and attention that the Servicer exercises with respect to comparable receivables that it services for itself or others, and (B) Applicable Law. + +(c) The Servicer shall have full power and authority, acting alone or through any party properly designated by it hereunder, + + + + + +including any Sub-Servicer, to do any and all things in connection with such servicing and administration which it may deem necessary or desirable, consistent with the terms of this Servicing Agreement and the Servicing Standard. Without limiting the generality of the foregoing, unless such power is revoked by the Owner on account of the occurrence of a Servicer Default, the Servicer shall have full power and authority (i) to make withdrawals from the applicable servicer collection account permitted by the terms of this Servicing Agreement, the Loan Agreement or any other Loan Document and (ii) to execute and deliver, on behalf of the Owner, any and all instruments of satisfaction or cancellation, or of partial or full release or discharge, and all other comparable instruments, with respect to the Receivables and, after the delinquency of any Receivable and to the extent permitted under and in compliance with applicable Servicing Standard and the Loan Agreement, to commence collection proceedings with respect to such Receivables. The Owner shall furnish the Servicer with any documents reasonably requested by the Servicer, including powers of attorney, as necessary or appropriate to enable the Servicer (or any Sub-Servicer on its behalf) to carry out its servicing and administrative duties hereunder. + +(d) The Servicer shall collect and process all collections on the Serviced Assets in accordance with the terms and conditions set forth in Section 2.3 of the Loan Agreement and the Servicing Multi-Party Agreement. + +Section 2. Administrative Duties of the Servicer. + +(a) The Servicer agrees to perform all of the duties assigned to it in the Loan Agreement, and shall take all appropriate action with respect to the following matters under the Loan Agreement: + +(i) upon written request of the Owner, executing and delivering such further instruments and do further acts as may be reasonably necessary or proper to carry out more effectively the purpose of the Loan Agreement; + +(ii) preparing officer's certificates with respect to the Loan Agreement; + +(iii) preparing, executing and filing any reports or other information which are required to be prepared or filed by the Owner in order to comply with federal, state or foreign securities laws, or exemptions thereunder; and + +(iv) any other duties expressly required to be performed by the Servicer under the Loan Agreement or any other Loan Document. + +(b) In carrying out the foregoing duties or any of its other obligations under this Agreement, the Servicer may enter into transactions with or otherwise deal with any of its Affiliates; provided, however, that the terms of any such transactions or dealings shall be no less favorable to the Owner than would be available from unaffiliated parties, that Owner shall have no responsibility or liability for any fees payable to such Affiliates to perform such obligations as contemplated by this Agreement and that the Owner shall not be deemed pursuant to this Section 2(b) to enter into any contractual obligations with such Affiliates. + +(c) To the fullest extent permitted by law, the Owner shall indemnify, defend and hold harmless the Servicer and its successors, assigns, directors, officers, agents, employees and servants (collectively, the "Servicer Indemnified Parties") from and against, any and all liabilities, obligations, losses, damages, taxes, claims, actions and suits, and any and all reasonable out-of-pocket costs, expenses and disbursements (including reasonable legal fees and expenses) of any kind and nature whatsoever (collectively, "Liabilities") which may at any time be imposed on, incurred by, or asserted against the Servicer or any Servicer Indemnified Party in any way relating to or arising out of this Agreement or any other Loan Document, the Serviced Assets or any action or inaction of the Owner or any other Person; provided, that the Owner shall not be liable for or required to indemnify a Servicer Indemnified Party from and against expenses arising or resulting from such Servicer Indemnified Party's own willful misconduct, bad faith or gross negligence. The indemnities contained in this Section 2(c) shall survive the resignation and removal of the Servicer or the termination of this Agreement. + +(d) Subject to Sections 4 and 5, the Servicer shall administer, perform or supervise the performance of such other activities in connection with the Serviced Assets (including the Loan Documents) as are not covered by any of the foregoing provisions and are reasonably within the capability of the Servicer. In no case may Servicer use any identifiable information, including consumers' nonpublic personal information and related account performance and status information, for any purpose other than as provided in this Agreement; provided, however, that Servicer is permitted to use nonidentifiable, aggregated consumer information obtained in connection with its activities undertaken pursuant to this Agreement. + +(e) Notwithstanding anything to the contrary in this Agreement, the Servicer shall not be obligated to, and shall not, take any action that the Owner directs the Servicer not to take or which could reasonably be expected to result in a violation or breach of the Owner's covenants, agreements or obligations under any of the Loan Documents. + +(f) The Servicer shall maintain appropriate books of account and records relating to services performed hereunder, which books of account and records shall be accessible for inspection by the Owner at any time during normal business hours. + +Section 3. Reports and Information. + + + + + +(a) At the times and in the manner required by Section 6.1 of the Loan Agreement, the Servicer shall deliver to the Owner and the Agent the reports described therein. + +(b) The Servicer shall furnish in writing to the Owner and the Agent from time to time such additional information regarding the Serviced Assets as the Owner or the Agent shall reasonably request. + +Section 4. Independence of the Servicer. For all purposes of this Agreement, the Servicer shall be an independent contractor and shall not be subject to the supervision of the Owner with respect to the manner in which it accomplishes the performance of its obligations hereunder; provided, however, Servicer shall be subject to the Owner's third-party vendor management program. Unless expressly authorized by the Owner in this Agreement or otherwise, the Servicer shall have no authority to act for or represent the Owner in any way and shall not otherwise be deemed an agent of the Owner. + +Section 5. No Joint Venture. Nothing contained in this Agreement (i) shall constitute the Servicer and the Owner as members of any partnership, joint venture, association, syndicate, unincorporated business or other separate entity, (ii) shall be construed to impose any liability as such on any of them or (iii) shall be deemed to confer on any of them any express, implied or apparent authority to incur any obligation or liability on behalf of the others. + +Section 6. Other Activities of Servicer. Nothing herein shall prevent the Servicer or its respective Affiliates from engaging in other businesses or, in its sole discretion, from acting in a similar capacity for any other person or entity even though such person or entity may engage in business activities similar to those of the Owner. + +Section 7. Term of Agreement; Resignation and Removal of Servicer. + +(a) This Agreement shall continue in force until the earlier to occur of (i) the Owner no longer owns any Receivables or Participation Interests, and (ii) subject to Section 7(d), the delivery of written notice of termination by the Owner to the Servicer pursuant to Section 7(c), in each case upon which event this Agreement shall automatically terminate unless otherwise agreed in writing between the Servicer and the Owner. + +(b) Subject to Section 7(d), the Servicer may resign its duties hereunder by providing the Owner with at least 60 days' prior written notice. + +(c) Subject to Section 7(d), and subject to the prior written consent of the Agent so long as the Loan Agreement remains outstanding, the Owner may remove the Servicer immediately upon written notice of termination from the Owner to the Servicer if any of the following events shall occur (each, a "Servicer Termination Right - Owner"): + +(i) the Servicer shall default in the performance of any of its duties under this Agreement and, after notice of such default, shall not cure such default within 30 days (or, if such default cannot be cured in such time, shall not give within 30 days such assurance of cure as shall be reasonably satisfactory to the Owner); or + +(ii) the Servicer files or consents to the filing of any petition, either voluntary or involuntary, to take advantage of any applicable insolvency, bankruptcy, liquidation or reorganization statute, or makes an assignment for the benefit of creditors; or + +(iii) the Servicer fails to maintain, in any material respect, all necessary licenses and approvals in each jurisdiction in which it is performing the primary servicing function for any of the Serviced Assets under this Agreement. + +The Servicer agrees that if any of the events specified in clause (ii) of this Section 7(c) shall occur, it shall give written notice thereof to the Owner within seven (7) days after the occurrence of such event. + +(d) No termination, resignation or removal of the Servicer pursuant to this Section shall be effective until (i) a successor Servicer shall have been appointed by or on behalf of the Owner with the prior written consent of the Agent so long as the Loan Agreement remains outstanding, and (ii) such successor Servicer shall have agreed in writing to be bound by the terms of this Agreement in the same manner as the Servicer is bound hereunder. + +(e) Agent may terminate this Agreement upon the occurrence and continuance of an Event of Default under the Loan Agreement by delivery of written notice of termination from Agent to Owner and Servicer (a "Servicer Termination Right - Agent" and, together with the Servicer Termination Right - Owner, each a "Servicer Termination Right"): + +If a successor Servicer does not take office within 60 days after the retiring Servicer resigns or is removed, the resigning or removed Servicer or the Owner may petition any court of competent jurisdiction for the appointment of a successor Servicer. + +In the event that the Servicer resigns or is terminated hereunder, the Servicer shall use its commercially reasonable efforts to and shall cooperate with the Owner and take other reasonable steps requested by the Owner to assist in the orderly and efficient transfer of the administration of the Serviced Assets to the successor Servicer. + + + + + +Section 8. Action upon Termination, Resignation or Removal of the Servicer. Promptly upon the effective date of termination of this Agreement or the resignation or removal of the Servicer pursuant to Section 7, the Servicer shall be entitled to be paid all fees and reimbursable expenses, including any reasonable out-of-pocket attorneys' fees, accruing to it to the date of such termination, resignation or removal. The Servicer shall forthwith upon such termination pursuant to Section 7 deliver to the successor Servicer all property and documents of or relating to the Serviced Assets then in the custody of the Servicer, or if this Agreement has been terminated, to the Owner. In the event of the resignation or removal of the Servicer pursuant to Section 7, the Servicer shall cooperate with the Owner and take all reasonable steps requested to assist the Owner in making an orderly transfer of the duties of the Servicer. + +Section 9. Compensation. The Servicer will be entitled to receive the Servicing Fee for the performance of the duties and provision of the services called for in this Agreement in accordance with, and subject to, the Loan Agreement. The Servicing Fee shall be payable on each Payment Date for the immediately prior Servicing Period in accordance with Section 2.4 of the Loan Agreement. Any opinion, filing or other services performed by the Servicer hereunder that generates additional costs shall be at the expense of the Owner. + +Section 10. Sub-Servicers; Collection Agents. + +(a) The Servicer may appoint one or more Persons (including any Affiliate) as a sub-servicer (each a "Sub-Servicer") with respect to some or all of the Serviced Assets to perform any of the Servicer's obligations hereunder from time to time in its sole discretion; provided, however, that such servicing arrangement and the term of the related subservicing agreement (if any) must provide for the servicing of the Serviced Assets in a manner equivalent or greater than the Servicing Standard; provided, further, that the Servicer shall remain obligated and be liable to the Owner for the servicing and administering of the Serviced Assets in accordance with the provisions hereof without diminution of such obligation and liability by virtue of the appointment of such Sub-Servicer and to the same extent and under the same terms and conditions as if the Servicer alone were servicing and administering the Serviced Assets. + +(b) The Servicer shall be entitled to terminate the subservicing of the Serviced Assets by any Sub-Servicer so appointed at any time in its sole discretion, provided, that any subservicing agreement entered into by Servicer with any such Sub-Servicer shall terminate by its terms no later than thirty (30) days after the Servicer is terminated as the servicer under this Agreement. + +(c) Each Sub-Servicer shall be entitled to compensation for its services as a Sub-Servicer as agreed to by the Servicer and such Sub-Servicer provided that any sub-servicing fees payable to the Sub-Servicer in respect of its servicing activities shall be payable out of the Servicing Fee. + +(d) Any subservicing arrangement that may be entered into and any other transactions or services relating to the Serviced Assets involving a Sub-Servicer in its capacity as such shall be deemed to be solely between the Sub-Servicer and the Servicer alone, and the Owner shall not be deemed party thereto and shall have no claims, rights, obligations, duties, or liabilities with respect to the Sub-Servicer in such capacity. + +(e) The Owner may, from time to time, enter into Collection Agency Agreements with Collection Agents for the collection of delinquent or defaulted accounts. Any such Collection Agent shall not be deemed a "Sub-Servicer" hereunder and the Servicer shall have no liability with respect to the acts or omissions of any such Collection Agent. Any Collection Fees shall be paid directly by the Owner in accordance with the Loan Agreement. Notwithstanding the foregoing, the Servicer shall cooperate with the Owner and provide such assistance as is reasonably necessary to transfer servicing of applicable Serviced Assets to the related Collection Agent. + +Section 11. Representations and Warranties of the Servicer. The Servicer hereunder hereby makes the following representations and warranties as of the date hereof, and as of the date of the delivery of each Monthly Servicing Report, on which representations and warranties the Owner shall be deemed to rely in entering into this Agreement: + +(a) Organization. It is an organization validly existing and in good standing under the laws of, and is duly qualified to do business in, the jurisdiction of its incorporation or organization and has, in all material respects, full power and authority to own its properties and conduct its business as presently owned or conducted, and to execute, deliver and perform its obligations under this Agreement and each other Loan Document to which it is a party. + +(b) Due Qualification. It is in good standing and duly qualified to do business (or is exempt from such requirements) and (i) the Servicer has obtained all necessary licenses and approvals in each jurisdiction in which it is performing the primary servicing function for any of the Serviced Assets under this Agreement (or has determined that such licenses are not required) or (ii) each Sub-Servicer has represented and warranted to the Servicer that such Sub-Servicer has obtained all necessary licenses and approvals in each jurisdiction in which such Sub-Servicer is performing the primary servicing function for any of the Serviced Assets under this Agreement, except where the failure to so qualify or obtain licenses or approvals would not have a material adverse effect on its ability to execute and deliver, or perform under, this Agreement or any other Loan Document to which it is a party. + + + + + +(c) Due Authorization. The execution, delivery, and performance by it of this Agreement and the other agreements and instruments executed and delivered by it as contemplated hereby, have been duly authorized it by all necessary action on the part of such party. + +(d) Binding Obligation. This Agreement and each other Loan Document to which it is a party constitutes a legal, valid and binding obligation of such party, enforceable in accordance with its terms, except as such enforceability may be limited by applicable Debtor Relief Laws or by general principles of equity (whether considered in a proceeding at law or in equity). + +(e) No Conflict. The execution and delivery of this Agreement and each Loan Document to which it is a party by it, and the performance by it of the transactions contemplated by this Agreement and the fulfillment by it of the terms hereof and thereof applicable to such party, will not conflict with, violate or result in any breach of any of the terms and provisions of, or constitute (with or without notice or lapse of time or both) a default under, any material indenture, contract, agreement, mortgage, deed of trust or other instrument to which it is a party or by which it or its properties are bound. + +(f) No Violation. The execution and delivery by it of this Agreement and each other Loan Document to which it is a party, the performance by it of the transactions contemplated by this Agreement and each other Loan Document to which it is a party and the fulfillment by it of the terms hereof and thereof applicable to such party will not conflict with or violate any Applicable Law applicable to such party. + +(g) No Proceedings. Servicer is not a party to any material pending or threatened action, suit, proceeding or investigation related to its respective business, (ii) there is no pending or, to the knowledge of Servicer, threatened action, suit, proceeding or investigation involving Servicer or its respective business that could reasonably be expected to prevent or materially delay the consummation by Servicer of the transactions contemplated herein, (iii) Servicer has not had any reason to believe that any material action, suit, proceeding or investigation may be brought or threatened against its business, (iv) Servicer is not a party or subject to any order, writ, injunction, judgment or decree of any Governmental Authority, (v) there is no action, suit, proceeding or investigation initiated by Servicer currently pending and (vi) Servicer has not had any existing accrued and/or unpaid indebtedness or similar obligations to any Governmental Authority or any other governmental payor. + +(h) Compliance with Laws. Servicer (i) is in compliance with all Applicable Law, and (ii) is not in violation of any order of any Governmental Authority or other board or tribunal, except, in the case of both (i) and (ii), where noncompliance or violation could not reasonably be expected to be, have or result in a material adverse effect on its ability to execute and deliver, or perform under, this Agreement or any other Loan Document to which it is a party. Servicer has not received any notice that Servicer is not in material compliance in any respect with any of the requirements of any of the foregoing. Servicer has maintained in all material respects all records required to be maintained by any applicable Governmental Authority. + +(i) Foreign Assets Control Regulations and Anti-Money Laundering. Servicer is in compliance in all material respects with all applicable U.S. economic sanctions laws, Executive Orders and implementing regulations as promulgated by the U.S. Department of the Treasury Office of Foreign Assets Control ("OFAC"), and all applicable anti-money laundering and counter-terrorism financing provisions of the Bank Secrecy Act and all regulations issued pursuant to it. Servicer is not (i) a Person designated by the U.S. government on OFAC's list of Specially Designated Nationals and Blocked Persons (the "SDN List"), (ii) a Person who is otherwise the target of U.S. economic sanctions laws such that a U.S. Person cannot deal or otherwise engage in business transactions with such Person or (iii) controlled by (including by virtue of such Person being a director or owning voting shares or interests), or acts, directly or indirectly, for or on behalf of, any Person on the SDN List or a foreign government that is the target of U.S. economic sanctions prohibitions such that the entry into, or performance under, this Agreement or any other Loan Document would be prohibited under U.S. law. + +(j) USA PATRIOT Act. Servicer is in compliance in all material respects with (a) the Trading with the Enemy Act, and each of OFAC's foreign assets control regulations and any other enabling legislation or executive order relating thereto, (b) the USA PATRIOT Act and (c) other federal or state laws relating to "know your customer" and anti-money laundering rules and regulations. No part of the proceeds of any Loan (as defined in the Loan Agreement) will be used directly or indirectly for any payments to any government official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977. + +Section 12. Notices. Any notice, report or other communication given hereunder shall be in writing, delivered by mail, overnight courier, electronic communication or facsimile and addressed as follows: + +(a) if to the Owner, to: + +CURO Receivables Finance II, LLC c/o CURO Management LLC 3527 North Ridge Road Wichita, KS 67205 Attention: Don Gayhardt + + + + + +E-Mail: don.gayhardt@curo.com + +With a copy to: + +CURO Financial Technologies Corp. 3527 North Ridge Road Wichita, KS 67205 Attention: Vin Thomas E-Mail: vinthomas@curo.com + +With a copy to the Servicer, at the address provided below. + +(b) if to the Servicer, to: + +CURO Management LLC 3527 North Ridge Road Wichita, KS 67205 Attention: Don Gayhardt E-Mail: don.gayhardt@curo.com + +With a copy to: + +CURO Financial Technologies Corp. 3527 North Ridge Road Wichita, KS 67205 Attention: Vin Thomas E-Mail: vinthomas@curo.com + +or to such other address as any party shall have provided to the other parties in writing. Any notice required to be delivered hereunder shall be deemed given if such notice is mailed by certified mail, postage prepaid, hand delivered or faxed to the address of such party as provided above. + +Section 13. Limitation of Liability; Indemnification. + +(a) Except as provided in Section 13(b), neither the Servicer nor any of the directors, officers, partners, members, managers, employees, or agents of the Servicer in its capacity as Servicer shall be under any liability to the Owner or any other Person for any action taken or for refraining from the taking of any action in good faith in its capacity as Servicer in accordance with this Agreement; provided, however, that this provision shall not protect the Servicer or any such Person against contractual liability under this Agreement for any breach of warranties or representations made herein, or any failure to perform any express contractual duties set forth herein, or any liability which would otherwise be imposed by reason of willful misfeasance, bad faith or negligence in the performance of its duties hereunder. The Servicer and any director, officer, employee, partner, member or manager or agent of the Servicer may rely in good faith on any document of any kind prima facie properly executed and submitted by any Person (other than the Servicer) respecting any matters arising hereunder. The Servicer shall not be under any obligation to appear in, prosecute or defend any legal action which is not incidental to its duties as Servicer in accordance with this Agreement and which in its reasonable judgment may involve it in any material expense or liability. In furtherance of its obligations hereunder, the Servicer may, in its sole discretion, undertake any such legal action which it may deem necessary or desirable for the benefit of the Owner with respect to this Agreement and the rights and duties of the parties hereto and the interests of the Owner hereunder. + +(b) Subject to Section 13(a), the Servicer shall indemnify and hold harmless the Owner, the Agent, each Lender and their respective directors, officers, employees, partners, members or managers and agents (each, an "Indemnified Person") from and against any and all loss, liability, claim, action, suit, cost, expense, damage or injury, of any kind and nature whatsoever, including any judgment, award, settlement, fines, reasonable attorneys' fees and other costs or expenses incurred in connection with the defense of any action, Proceeding, investigation or claim (any of the foregoing, "Losses") suffered or sustained by any of them by reason of any acts or omissions of the Servicer which are in breach of this Agreement or which arise by reason of willful misfeasance, bad faith or negligence in the Servicer's performance of its duties hereunder; provided that the Servicer shall not be obligated to indemnify any such Indemnified Person for any Losses that arise from the negligence or willful misconduct of such Indemnified Person or its affiliates, directors, officers, employees, partners, members, managers or agents. + +Section 14. Amendments. This Agreement may be amended from time to time by a writing signed by the Servicer and the Owner, with the prior written consent of the Agent so long as the Loan Agreement remains outstanding. + +Section 15. Successors and Assigns. This Agreement shall be binding on the parties' successors and assigns. + + + + + +Section 16. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS (OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. + +Section 17. Headings. The section headings hereof have been inserted for convenience of reference only and shall not be construed to affect the meaning, construction or effect of this Agreement. + +Section 18. Counterparts. This Agreement and any waiver or amendment hereto may be executed in counterparts and by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument. This Agreement and each of the other Loan Documents may be executed and delivered by facsimile, portable document format (.pdf), or other Electronic Transmission all with the same force and effect as if the same was a fully executed and delivered original manual counterpart. Delivery of an executed electronic signature page of this Agreement and each of the other Loan Documents by facsimile, portable document format (.pdf), or Electronic Transmission shall be as effective as delivery of a manually executed counterpart hereof and each party to this Agreement and each of the other Loan Documents agrees that it will be bound by its own signature and that it accepts the facsimile, portable document format (.pdf), or other electronic signature of each other party to this Agreement and each of the other Loan Documents. For the avoidance of doubt, the authorization under this paragraph may include, without limitation, use or acceptance by the Administrative Agent of a manually signed paper Agreement or any Loan Document which has been converted into electronic form (such as scanned portable format (.pdf)), or an electronically signed Agreement or any Loan Document converted into another format, for transmission, delivery and/or retention. The Administrative Agent may, at its option, create one or more copies of such Agreement in an electronic form ("Electronic Copy"), which shall be deemed created in the ordinary course of the Administrative Agent's business, and destroy the original paper document. Administrative Agent may also require that any such documents and signatures be confirmed by a manually signed original thereof; provided, however, that the failure to request or deliver the same shall not limit the effectiveness of any facsimile, portable document format (.pdf), or other Electronic Transmission document or signature. The words "execution," "executed," "signed," "signature," and words of like import in this paragraph shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act. + +"Electronic Transmission" means each document, instruction, authorization, file, information and any other communication transmitted, posted or otherwise made or communicated by electronic mail ("e-mail") or E-Fax, or otherwise to or from an electronic system or other equivalent service. + +Section 19. Severability. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. + +Section 20. Non-Petition. Notwithstanding any prior termination of the Owner or this Agreement, the Servicer shall not at any time with respect to the Owner, acquiesce, petition or otherwise invoke or cause the Owner to invoke the process of any court or governmental authority for the purpose of commencing or sustaining a case against the Owner under any federal or state bankruptcy, insolvency or similar law or appointing a receiver, conservator, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Owner or any substantial part of its property, or ordering the winding up or liquidation of the affairs of the Owner. + +Section 21. Third-Party Beneficiary. Notwithstanding anything to the contrary in this Agreement, both the Owner and Servicer agree that the Agent shall be deemed to be a third-party beneficiary of this Agreement and has the authority to enforce the provisions hereof. + +[Signature page follows.] + +1 + +123012898v2 123012898v4 + + + + + +IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and delivered as of the day and year first above written. + +CURO RECEIVABLES FINANCE II, LLC, a Delaware limited liability company + +By: /s/Don Gayhardt Name: Donald F. Gayhardt Jr. Title: President & Chief Executive Officer + +CURO MANAGEMENT, LLC, as Servicer + +By: /s/Don Gayhardt Name: Donald F. Gayhardt Jr. Title: President & Chief Executive Officer + + + + + +ANNEX A-- DEFINITIONS + +"Affiliate" has the meaning set forth in the Loan Agreement. + +"Agent" means Midtown Madison Management LLC, as agent under the Loan Agreement. + +"Applicable Law" has the meaning set forth in the Loan Agreement. + +"Bank Receivable" has the meaning set forth in the Loan Agreement. + +"Business Day" has the meaning set forth in the Loan Agreement. + +"Collection Agency Agreement" means a written agreement between the Owner and a Collection Agent. + +"Collection Agent" means any collection agent retained by the Owner from time to time. + +"Collection Fees" means any fees, expenses, reimbursements and other compensation payable to a Collection Agent by the Owner pursuant to a Collection Agency Agreement. + +"Collections" has the meaning set forth in the Loan Agreement. + +"Governmental Authority" has the meaning set forth in the Loan Agreement. + +"Lender" has the meaning set forth in the Loan Agreement. + +"Liabilities" is defined in Section 2(c). + +"Loan Agreement" means the Loan and Security Agreement, dated as of April 8, 2020, by and among the Owner, the Lenders and the Agent. + +"Loan Document" has the meaning set forth in the Loan Agreement. + +"Monthly Servicing Report" has the meaning set forth in the Loan Agreement. + +"OFAC" is defined in Section 11(i). "Owner" is defined in the preamble of this Agreement. "Participation Interest" has the meaning set forth in the Loan Agreement. + +"Payment Date" has the meaning set forth in the Loan Agreement. + +"Person" has the meaning set forth in the Loan Agreement. + + + + + +"Proceeding" shall mean any suit in equity, action at law or other judicial or administrative proceeding. + +"Receivable" has the meaning set forth in the Loan Agreement. + +"SDN" is defined in Section 11(i). + +"Serviced Asset" means (a) each Receivable owned by the Borrower, (b) each Participation Interest owned by the Borrower and (c) each Bank Partner Receivable related to a Participation Interest owned by the Borrower. + +"Servicer" is defined in the preamble of this Agreement. "Servicer Indemnified Parties" is defined in Section 2(c). + +"Servicing Fee" means, for any Servicing Period, an amount equal to the product of (a) 2.00%, (b) the daily average Receivable Balance of all Receivables serviced hereunder during such Servicing Period, and (c) a fraction, the numerator of which is the number of calendar days during such Servicing Period and the denominator of which is 360. + +"Servicing Period" means a calendar month. + +"Servicing Standard" is defined in Section 1(b). + +"Sub-Servicer" is defined in Section 10(a). \ No newline at end of file diff --git a/full_contract_txt/CYBERIANOUTPOSTINC_07_09_1998-EX-10.13-PROMOTION AGREEMENT.txt b/full_contract_txt/CYBERIANOUTPOSTINC_07_09_1998-EX-10.13-PROMOTION AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..805be254cd11d0ccddf0ad928f60a0462c517cbb --- /dev/null +++ b/full_contract_txt/CYBERIANOUTPOSTINC_07_09_1998-EX-10.13-PROMOTION AGREEMENT.txt @@ -0,0 +1,147 @@ +EXHIBIT 10.13 Cyberian Outpost, Inc. has omitted from this Exhibit 10.13 portions of the Agreement for which Cyberian Outpost, Inc. has requested confidential treatment from the Securities and Exchange Commission. The portions of the Agreement for which confidential treatment has been requested are marked with X's in brackets and such confidential portions have been filed separately with the Securities and Exchange Commission. + + PROMOTION AGREEMENT + +This Promotion Agreement (the "Agreement") is dated as of January 26, 1998 between CNET, Inc. ("CNET") and Cyberian Outpost, Inc. (the "Company"). Pursuant to this Agreement, CNET will provide various links and other online and television promotions (collectively, the "Promotions") to the Company to assist the Company in promoting its products and services and facilitating the sale of products to potential buyers through its Internet site. CNET will be compensated by the Company for providing the Promotions. Accordingly, the parties hereby agree as follows: + +1. Background. + + 1.1 The Company. The Company operates an electronic retailing operation through its Internet sites located at www.cyberianoutpost.com or www.outpost.com (together with any successors to such sites, the "Company Site"). Through the Company Site, the Company sells or facilitates the sale of various products and services, either directly or as an agent for third party vendors. All products and services offered for sale through the Company Site are referred to as the "Products." + + 1.2 CNET. CNET produces television programs and operates a network of Internet sites on the world wide web. For purposes of this Agreement, the "CNET Sites" refer to any Internet sites operated by CNET or its subsidiaries, including without limitation the sites referenced in Section 2.5 and Exhibit A. + +2. CNET's Obligations. + + 2.1 TV Promotions. CNET will provide the Company one 15 second "spot" for Promotions on its syndicated weekly TV program, TV.COM. Promotions will run on each weekly episode of TV.COM during the Term; provided that TV.COM remains on the air throughout such period. Should TV.COM not be run on the air during a portion of the Term, CNET will run two download.com banner advertising programs per month during such portion of the Term in lieu of the foregoing TV.COM Promotions. + + 2.2 Banner Promotions. CNET will provide advertising banners to the Company during the Term as described in Exhibit A. + + 2.3 Retail Promotions. + + 2.3.1 CNET will provide for various retail Promotions across the CNET Sites, which may include text/HTML links, buttons, portals and other fixed Promotions that include embedded links to the Company Site (the "Retail Promotions" and, together with the advertising banners contemplated in the preceding paragraph, the "Online Promotions"). + + 2.3.2 Subject to Section 4 below, CNET will provide the Company with a total of at least (a) [XXXXXX] Retail Impressions during the first three months of the Term, (b) [XXXXXX] Retail Impressions during the second three months of the Term, (c) [XXXXXX] Retail Impressions during the third three months of the Term, and (d) [XXXXXX] Retail Impressions during the fourth three months of the Term. For such purposes, a "Retail Impression" means the display of one page of a CNET Site that contains at least one Retail Promotion. If CNET fails to provide the Retail Impressions required by the preceding sentence during the Term, then CNET will continue to display Retail Impressions in accordance with this Agreement following the Term (notwithstanding the termination or expiration of the Term) until the required number of Retail Impressions has been delivered. + + 2.4 Placement of Retail Promotions. CNET will determine the location and type of each Retail Promotion displayed throughout the CNET Sites and may phase in certain types of Retail Promotions as they are developed. CNET currently intends to display Retail Promotions consisting of text/HTML links, pre-filled with an appropriate query string or link ("Pre-Filled Links"), as set forth in this Section. The Retail Promotions contemplated by this Section will be displayed above the fold where the graphical layout of the page reasonably permits such positioning (as determined by CNET), and in other cases the Retail Promotions will be prominently positioned below the fold. For the purposes of clarity, the "fold" is defined as the visible portion of the screen on a standard 640 x 480 screen size. + + 2.4.1 On SEARCH.COM, CNET intends to display a Pre-Filled Link on the + + + + + + search query page related to Shopping and on every search results page served by CNET. + + 2.4.2 On CNET.COM, CNET intends to display a Pre-Filled Link on pages within the site except the Front Door and except for pages within the Personalities and Community sections. + + 2.4.3 On BUILDER.COM, CNET intends to display a Pre-Filled Link on pages within the site except the Front Door and the "Builder Buzz" section. + + 2.4.4 On GAMECENTER.COM, NEWS.COM, DOWNLOAD.COM and SHAREWARE.COM, CNET will display a Pre-Filled Link on pages within the site except the Front Door. + + 2.4.5 Other pages of the CNET Sites, CNET will display additional Retail Promotions as appropriate and as mutually agreed upon. + + 2.5 Design and Production of Online Promotions. The Company will design any graphics required for the Online Promotions and provide pre-filled query strings or links for all of the Pre-Filled Links, with reasonable assistance from CNET, and the Company will supply digital copies of such graphics and other materials to CNET. CNET will be responsible for incorporating the Online Promotions into the CNET Sites and for ensuring that the Online Promotions are accessible to users of the CNET Sites ("Users"). + + 2.6 Reporting. Within 30 days after the end of each month during the Term, CNET will provide a report to the Company indicating the number of Retail Promotions displayed on the CNET Sites during such month and the number of times that a User clicked on a Retail Promotion during such month. CNET will also provide standard reporting for banner advertisements and television Promotions. + +3. The Company's Obligations: + + 3.1 Operation of Company Site. The Company will be responsible for ensuring that each link embedded within an Online Promotion takes the User to the appropriate area within the Company Site, and that the Company Site functions with reasonable reliability and in a commercially reasonable manner throughout the Term. In particular, the Company agrees that the Company Site will comply with the performance standards set forth in Exhibit B throughout the Term. Any failure by the Company to comply with this paragraph will be deemed to be a material breach of this Agreement. + + 3.2 Reporting. Within 30 days after the end of each month during the Term, the Company will provide a report to CNET indicating the aggregate number of referrals from the CNET Sites to the Company Site during such month, the resulting number of buyers, the aggregate behavior (including orders and sales volume) of those buyers, and the total revenue attributable to the Online Promotions minus applicable sales tax, shipping costs, returns and cancellations (the "CNET Sales"). The "CNET Sales" will be counted as sales by the Company to each User who accesses the Company Site through a link from an Online Promotion for a period of 4 hours from the referral, CNET and The Company will agree on technical procedures to allow the easy and accurate reporting of CNET Sales. The Company will make this information available in a manner which + + allows CNET and the Company to understand the performance of the various Online Promotions. + + 3.3 Cash Consideration. + + 3.3.1 For each month during the Term, the Company will pay CNET a minimum of [XXXX] in cash, plus [XXX] of CNET Sales. Payments under this paragraph will be based on the reports prepared by the Company under Section 3.2 (although CNET may challenge such reports as contemplated by Section 9.5) and will be due within 30 days after the end of each month of the Term. + + 3.3.2 Payments under this Section 3.3 will be made by wire transfer of immediately available funds and are nonrefundable once paid. + + 3.4 User Information. At least once each calendar quarter, the Company will deliver to CNET all aggregate data collected as a result of the CNET Sales, including but not limited to, demographic data, buying behavior as measured by conversion to sale, frequency of purchasing, average order size, and a comparison to the respective average for the Company. + + 3.5 Reciprocal Marketing. For the duration of the Term, the Company will place a link within the Beta Report Newsletter, the Cyberian Express Newsletter, the Gamer's Express newsletter, or any newsletter to which users can subscribe to which is provided by the Company to its users (expressly excluded from this obligation are emails that are sent by the Company for product announcements, or personalized emails sent to users upon product purchase. This link will be a text phrase or series of text phrases encouraging the users to sign up for CNET's free email newsletters for technology News, CNET Dispatch, and Software & Hardware Services. CNET will provide all entry forms and operate the production and sending of the newsletter. CNET agrees not to specifically target these subscribers separately from the general + + + + + + database of subscribers to CNET's various newsletters. Should the Company provide a persistent link or series of links (as distinguished from occasional and ad hoc links to product reviews either on the Company Site or in any communication by the Company to its customers) to a "Technology Content Provider", CNET shall be given at least equal prominence to any other Technology Content Provider provided that CNET offers comparable editorial content. A Technology Content Provider is defined as a company providing news product information or reviews about technology products that is not a manufacturer of those products. + +4. Term and Termination. The term of this Agreement (the "Term") will begin on February 1, 1998 and end on the first anniversary of the date of this Agreement; provided that (a) either party may terminate this Agreement, effective at any time after the first three + + months of the Term, by giving 30 days' written notice of termination to the other party, and (b) either party may terminate this Agreement at any time by giving written notice of termination to the other party, if the other party commits a material breach of its obligations hereunder that is not cured within 30 days after notice thereof from the non-breaching party. If this Agreement is terminated during any of the three month periods referenced in Section 2.3.2, then the required number of Retail Impressions applicable thereunder to such three month period will be pro rated accordingly. + +5. Exclusivity. For purposes of this agreement "Competing Computer Products Retailer" means any company other than the Company that is engaged in the retail sale of computer products, with the exception of CNET Direct, which operates BuyDirect.com. During the Term, CNET will not enter into more than two other agreements under which CNET receives consideration from a Competing Computer Products Retailer for displaying permanent links to or other fixed promotions for such Competing Computer Products Retailer on any CNET Site; provided that the foregoing will not restrict the display of(a) standard advertisements for any Competing Computer Products Retailer or its products or (b) any promotions within COMPUTERS.COM or within CNET's Snap! Online service (which are expressly excluded from this provision). The parties acknowledge that the foregoing will not prevent CNET from displaying text links and other references to Competing Computer Products Retailers as reasonably necessary to provide appropriate editorial and search related services on the CNET Sites. The Retail Promotions granted to the Company shall be placed in such a way as to provide no more or less prominence to the Company than is provided to any other Competing Computer Retailer signing an agreement with CNET. + +6. Trademark Licenses. + + 6.1 The Company hereby grants to CNET a non-exclusive, royalty-free license, effective throughout the Term, to use, display and publish any of the Company trademarks, tradenames, service marks and logos that may be delivered by the Company to CNET expressly for inclusion in the Promotions, solely for use in connection with the Promotions. Any use of the Company Marks by CNET must comply with any reasonable usage guidelines communicated by the Company to CNET from time to time. Nothing contained in this Agreement will give CNET any right, title or interest in or to the Company Marks or the goodwill associated therewith, except for the limited usage rights expressly provided above. CNET acknowledges and agrees that, as between the Company and CNET, the Company is the sole owner of all rights in and to the Company Marks. + + 6.2 The Company hereby represents and warrants to CNET that the Company has, and will have throughout the Term, all necessary rights in and to the Company Marks to grant CNET the licenses and usage rights contemplated by this Agreement without violating the rights of any third party. + + 7. Responsibility for the Company Products. The Company acknowledges and agrees that, as between the Company and CNET, the Company will be solely responsible for any claims or other losses associated with or resulting from the marketing or operation of the Company Site or the offer or sale of any Products by the Company or through the Company Site. CNET is not authorized to make, and agrees not to make, any representations or warranties concerning the Products, except to the extent (if any) contained within Promotions delivered to CNET by the Company. + +8. Mutual Indemnification. + + 8.1 Indemnification by CNET. CNET shall indemnify and hold the Company harmless from and against any costs, losses, liabilities and expenses, including all court costs, reasonable expenses and reasonable attorney's fees (collectively, "Losses") that the Company may suffer, incur or be subjected to by reason of any legal action, proceeding, arbitration or other claim by a third party, whether commenced or threatened, arising out of or as a result of (a) any breach or alleged breach by CNET of its representations, warranties or covenants hereunder; or (b) the operation of the CNET Sites (except in cases where the Company is required to indemnify CNET under the following paragraph), including claims of infringement or misappropriation of intellectual property rights. + + 8.2 Indemnification by the Company. The Company shall indemnify and hold CNET harmless from and against any Losses that CNET may suffer, incur or be subjected to by reason of any legal action, proceeding, + + + + + + arbitration or other claim by a third party, whether commenced or threatened, arising out of or as a result of (a) any breach or alleged breach by the Company of its representations, warranties or covenants hereunder; (b) the use by CNET of the Company Marks or any content provided by the Company to CNET expressly for display in connection with or as part of the Promotions, including claims of infringement or misappropriation of intellectual property rights; or (c) the operation of the Company Site or the offer or sale of the Products by the Company or through the Company Site. + + 8.3 Indemnification Procedures. If any party entitled to indemnification under this section (an "Indemnified Party") makes an indemnification request to the other, the Indemnified Party shall permit the other party (the "Indemnifying Party") to control the defense, disposition or settlement of the matter at its own expense; provided that the Indemnifying Party shall not, without the consent of the Indemnified Party enter into any settlement or agree to any disposition that imposes an obligation on the Indemnified Party that is not wholly discharged or dischargeable by the Indemnifying Party, or imposes any conditions or obligations on the Indemnified Party other than the payment of monies that are readily measurable for purposes of determining the monetary indemnification or reimbursement obligations of Indemnifying Party. The Indemnified Party shall + + notify Indemnifying Party promptly of any claim for which Indemnifying Party is responsible and shall cooperate with Indemnifying Party in every commercially reasonable way to facilitate defense of any such claim; provided that the Indemnified Party's failure to notify Indemnifying Party shall not diminish Indemnifying Party's obligations under this Section except to the extent that Indemnifying Party is materially prejudiced as a result of such failure. An Indemnified Party shall at all times have the option to participate in any matter or litigation through counsel of its own selection and at its own expense. + +9. Miscellaneous. + + 9.1 LIMITATION OF DAMAGES. NEITHER PARTY WILL BE LIABLE FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL OR INCIDENTAL DAMAGES ARISING OUT OF OR RELATED TO THIS AGREEMENT, HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY (INCLUDING NEGLIGENCE), AND EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. + + 9.2 Assignment. This Agreement may not be assigned by either party, except (a) to the transferee of substantially all of the business operations of such party (whether by asset sale, stock sale, merger or otherwise) or (b) to any entity that controls, is controlled by or is under common control with such party. + + 9.3 Relationship of Parties. This Agreement will not be construed to create a joint venture, partnership or the relationship of principal and agent between the parties hereto, nor to impose upon either party any obligations for any losses, debts or other obligations incurred by the other party except as expressly set forth herein. + + 9.4 Entire Agreement. This Agreement constitutes and contains the entire agreement between the parties with respect to the subject matter hereof and supersedes any prior oral or written agreements. This Agreement may not be amended except in writing signed by both parties. Each party acknowledges and agrees that the other has not made any representations, warranties or agreements of any kind, except as expressly set forth herein. + + 9.5 Audit Rights. Each party will have the right to engage an independent third party to audit the books and records of the other party relevant to the calculation of Retail Impressions or CNET Sales, upon reasonable notice and during normal business hours, and the other party will provide reasonable cooperation in connection with any such audit. The party requesting the audit will pay all expenses of the auditor unless the audit reveals an underpayment by the other party of more than 5%, in which case the other party will reimburse all reasonable expenses of the auditor. + + 9.6 Applicable Law. This Agreement will be construed in accordance with and governed by the laws of the State of California, without regard to principles of conflicts of law. + + 9.7. Confidentiality. The material terms of this agreement and any information exchanged in connection herewith shall be covered by the Non-Disclosure Agreement between CNET and the Company dated December 5, 1997 (the "NDA"). Notwithstanding the foregoing the following information will not be considered "Confidential Information" for purposes of the NDA provided that such information is not publicly identified as belonging to or coming from the Company: (a) information contained in the reports described in Section 3.2, (b) the names and e-mail addresses referenced in Section 3.4 and (c) any information obtained by CNET from Users who affirmatively request to be added to an e-mail newsletter pursuant to Section 3.5. + + 9.8 Press Release. Each party may issue a press release concerning the business relationship contemplated by this Agreement, and each party will provide an appropriate quote from one of its senior executive officers for use in the other party's release. The Company agrees that CNET's press release may disclose the total consideration payable + + + + + + to CNET hereunder. Each Party will provide the other with a reasonable opportunity to review and comment on its press release. + +IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized representatives as of the date first written above. + +CNET, INC. Cyberian Outpost + +By: /s/ By: /s/ Darryl Peck ------------------------------ --------------------------- Title: Director, Business Development Title: President and CEO ------------------------------ ---------------------- + + EXHIBIT A + + ADVERTISING BANNERS + +For each of the first 12 calendar months of the Term, CNET will provide the Company with one advertising banner "program" (which has a retail value of $20,000) on each of the following CNET Sites: + +1. CNET.COM ([XXXXX] impressions per month) 2. SEARCH.COM ([XXXXX]impressions per month) 3. GAMECENTER.COM ([XXXXX] impressions per month) (two programs per month) 4. SHAREWARE.COM/DOWNLOAD.COM ([XXXXX] impressions per month; this is a single unit, which may be satisfied by delivering banners on either site) + + EXHIBIT B + + PERFORMANCE STANDARDS + +The Company Site and the Company's related operations must comply with the following performance standards throughout the Term + +1. The Company Site will be operational and fully functional in all material respects (i.e. capable of displaying information, receiving purchases and conducting transactions as contemplated in the ordinary course of business) at least 97% of the time during any 30 day period. + +2. Without limiting the effect of 1, the Company shall provide to users coming to the Company Site from the Retail Promotions at least the same level of service as is offered to users coming directly to the Company Site or from agreements with other distribution partners. \ No newline at end of file diff --git a/full_contract_txt/CardlyticsInc_20180112_S-1_EX-10.16_11002987_EX-10.16_Maintenance Agreement1.txt b/full_contract_txt/CardlyticsInc_20180112_S-1_EX-10.16_11002987_EX-10.16_Maintenance Agreement1.txt new file mode 100644 index 0000000000000000000000000000000000000000..631fd135a2ff8e9202c3af7de3ccd4cbf0f3b676 --- /dev/null +++ b/full_contract_txt/CardlyticsInc_20180112_S-1_EX-10.16_11002987_EX-10.16_Maintenance Agreement1.txt @@ -0,0 +1,1211 @@ +Exhibit 10.16 + +[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED. + + Software License, Customization and Maintenance Agreement Agreement Number: CW251207 + +Effective Date: 11/4/10 + +Company Name: Cardlytics, Inc. + +Company Address: 621 North Avenue NE Suite C-30 Atlanta, GA 30308 + +Company Telephone: 888.798.5802 This SOFTWARE LICENSE, CUSTOMIZATION AND MAINTENANCE AGREEMENT ("Agreement") is entered into as of the Effective Date by and between Bank of America, N.A. ("Bank of America"), a national banking association, and the above-named Supplier, a corporation, and consists of this signature page and the attached Terms and Conditions, Schedules, and all other documents attached hereto, which are incorporated in full by this reference. ("Supplier") Bank of America, N.A. + +By: /s/ Scott Grime By: /s/ Chandra Torrence Name: Scott Grime Name: Chandra Torrence Title: Chief Executive Officer Title: V.P., Sourcing Manager Date: 11/8/10 Date: 11/4/10 + +Address for Notices: + +Cardlytics, Inc. 621 North Ave NE Suite C-30 Atlanta, GA 30030 ATTN: Scott Grimes Telephone: 888.798.5802 Email: [***] + + + +Address for Notices: (Supply Chain Management Contact) Mailcode NC1-023-09-01 Bank of America 625 N Tryon St Charlotte, NC 28255 ATTN: Chandra Torrence Telephone: [***] Email: [***] + +With a copy to: + +Bank of America Legal Department 101 S. Tryon Street Charlotte, NC 28255 Proprietary to Bank of America vTIP2010 + +Source: CARDLYTICS, INC., S-1, 1/12/2018 + + + + + + Software License, Customization and Maintenance Agreement Table of Contents Page 1.0 DEFINITIONS 1 2.0 LICENSE 4 3.0 RELATIONSHIP MANAGER 6 4.0 TERM 7 5.0 TERMINATION 7 6.0 ORDERING, DELIVERY AND INSTALLATION 8 7.0 CUSTOMIZATIONS 9 8.0 SOURCE CODE CUSTODY 10 9.0 DOCUMENTATION 11 10 ACCEPTANCE 11 11.0 MAINTENANCE SERVICES 12 12.0 UPGRADES 12 13.0 NON-MAINTENANCE SERVICES SUPPORT 12 14.0 TRAINING 12 15.0 PRICING/FEES 13 16.0 INVOICES TAXES/PAYMENT 13 17.0 EXPORT LAWS 15 18.0 MUTUAL REPRESENTATIONS AND WARRANTIES 15 19.0 REPRESENTATIONS AND WARRANTIES OF SUPPLIER 15 20.0 DELETION OF FUNCTIONS 17 21.0 DISABLEMENT OF SOFTWARE AND HARDWARE 17 22.0 FINANCIAL RESPONSIBILITY 17 23.0 BUSINESS CONTINUITY 17 24.0 RELATIONSHIP OF THE PARTIES 18 25.0 SUPPLIER PERSONNEL 18 26.0 INSURANCE 19 27.0 CONFIDENTIALITY AND INFORMATION PROTECTION 20 28.0 INDEMNITY 23 29.0 LIMITATION OF LIABILITY 24 30.0 DAMAGE TO BANK OF AMERICA SYSTEMS 24 31.0 SUPPLIER DIVERSITY 25 32.0 ENVIRONMENTAL INITIATIVE 26 33.0 AUDIT 26 34.0 NON-ASSIGNMENT 27 35.0 GOVERNING LAW 27 37.0 MEDIATION/ARBITRATION 28 38.0 NON-EXCLUSIVE NATURE OF AGREEMENT 29 39.0 OWNERSHIP OF WORK PRODUCT 29 40.0 MISCELLANEOUS 30 41.0 ENTIRE AGREEMENT 32 SCHEDULE A PRODUCT LICENSE SCHEDULE TEMPLATE SCHEDULE B CUSTOMIZATION SCHEDULE SCHEDULE C CHANGE ORDER REQUEST FORM SCHEDULE D MAINTENANCE SERVICES SCHEDULE E INFORMATION SECURITY SCHEDULE F BACKGROUND CHECKS SCHEDULE G RECOVERY Proprietary to Bank of America ii vTIP2010 + +Source: CARDLYTICS, INC., S-1, 1/12/2018 + + + + + +1.0 DEFINITIONS + +1.1 All defined terms In this Agreement not otherwise defined in this Section shall have the meanings assigned in the part of this Agreement in which they are defined. + +1.2 Acceptance Date - the first Business Day after the day Bank of America accepts the Software or it is deemed accepted pursuant to the Section entitled "Acceptance." + +1.3 Acceptance Period - the period commencing on the Installation Date and continuing for the number of days specified in each Product License Schedule, as such period may be extended pursuant to the Section entitled "Acceptance." + +1.4 Affiliate - a business entity now or hereafter controlled by, controlling or under common control with a Party. Control exists when an entity owns or controls directly or indirectly 50% or more of the outstanding equity representing the right to vote for the election of directors or other managing authority of another entity. + +1.5 Associate Information - any non-public information about a Bank of America Representative, whether in paper, electronic, or other form that is maintained by or on behalf of Bank of America for a business purpose. + +1.6 Bank of America Customizations - Customizations listed on a Customization Schedule, which shall be owned by Bank of America and subject to the Marketing Restrictions outlined in the Section entitled "Customizations." + +1.7 Bank Security Requirements- all bank security requirements as described in SCHEDULE E and the Bank of America Service Provider Security Requirements document provided separately. + +1.8 Business Continuity Plan - the policies and procedures that describe contingency plans, recovery plans, and proper risk controls to ensure Supplier's continued performance under this Agreement. + +1.9 Business Day - Monday through Friday, excluding days on which Bank of America is not open for business in the United States of America. + +1.10 Consumer Information - any record about an individual, whether in paper. electronic. or other form, that is a consumer report as such term is defined in the Fair Credit Reporting Act (15 USC 1681 et seq.) or is derived from a consumer report and that is maintained or otherwise possessed by or on behalf of Bank of America for a business purpose. Consumer Information also means a compilation of such records. The term does not include any record that does not identify an individual. + +1.11 Correction - a modification to Software to resolve one (1) or more Errors. + +1.12 Customer Information - any record containing information about a customer, its usage of Bank of America's services, or about a customer's accounts, whether in paper, electronic, or other form that is maintained by or on behalf of Bank of America for a business purpose. + +1.13 Customizations - modifications to the Licensed Programs and new coding made at the request or Bank of America. + +1.14 Customization Schedule - a document substantially In the form of SCHEDULE B attached hereto. + +1.15 Customization Status Report - a written report prepared by Supplier that describes the status of the development and implementation, describes problems and the steps underway to resolve them, provides a report of hours expended to date for each Customization, and reports all other information necessary or desirable for Bank of America management to understand the status of the project to develop Customizations. Proprietary to Bank of America Page 1 vTIP2010 + +Source: CARDLYTICS, INC., S-1, 1/12/2018 + + + + + +1.16 Delivery Date - the date on which Bank of America actually receives the Software from Supplier. + +1.17 Documentation - any and all: (i) materials created by or on behalf of Supplier that describe or relate to the functional, operational or performance capabilities of the Software, regardless of format; (ii) user, operator, system administration, technical, support and other manuals, including but not limited to functional specifications, help files, flow charts, logic diagrams, programming comments, acceptance plan, if any, and portions of licensor's web site that in any way describe the Software; (iii) responses and other materials submitted by Supplier in response to any Bank of America Request for Information ("RFI"), Request for Proposal ("RFP") or Request for Quotation ("RFQ"); and (iv) updates, changes and corrections to any of the forgoing that may be made during the Term of this Agreement. + +1.18 Effective Date - the date set forth on the signature page on which this Agreement takes effect. + +1.19 Error - an instance of failure of Software to be Operative. An Error is a Class 1 Error if it renders the Software unusable for its intended purpose. An Error is a Class 2 Error if the Software is still usable for its intended purpose, but such use is seriously inconvenient and the value to Bank of America of the use of the Software is substantially reduced. All other Errors are Class 3 Errors. + +1.20 Information Security Program - the documents that describe how Supplier will provide services to Bank of America in a manner that complies with the confidentiality and information security requirements of this Agreement and all pertinent Schedules and Exhibits hereto. Such information security program must be approved by Supplier's board of directors or equivalent executive management prior to the Effective Date thereof and annually thereafter. It must describe Supplier's network infrastructure and security procedures and controls that protect Confidential Information on a basis that meets or exceeds the Bank Security Requirements. + +1.21 Installation Date - the date the Software has been properly installed. + +1.22 Installation Site - the building or complex of buildings at which Bank of America installs the Software. + +1.23 Intellectual Property Rights - all intellectual property rights throughout the world, including copyrights, patents, mask works, trademarks, service marks, trade secrets, inventions (whether or not patentable), know how, authors' rights, rights of attribution, and other proprietary rights and all applications and rights to apply for registration or protection of such rights. + +1.24 Licensed Programs - the computer programs and all Documentation for such computer programs described in each Product License Schedule (including Source Code for such computer programs unless expressly stated otherwise in such Product License Schedule). + +1.25 Maintenance Fees - the fees for Maintenance Services set forth in each Product License Schedule. + +1.26 Maintenance Period - unless otherwise specified in a Product License Schedule, the Maintenance Period shall be twenty-four (24) hours per day, seven (7) per week, including Bank of America holidays. + +1.27 Maintenance Services - the services described in SCHEDULE D or in any Product License Schedule or Order with respect to any Licensed Program including telephone consultation, online and on-site technical support, Error correction and the provision of Updates. Proprietary to Bank of America Page 2 vTIP2010 + +Source: CARDLYTICS, INC., S-1, 1/12/2018 + + + + + +1.28 Object Code - machine-readable computer instructions that can be executed by a computer. + +1.29 Operative - conforming in all material respects to performance levels and functional specifications described in the Program Materials and in this Agreement. + +1.30 Order - Product License Schedule, purchase order, work order, Customization Schedule or other written instrument executed, or electronic transmissions originated by, an authorized officer of Bank of America Supply Chain Management directing Supplier in the provision of services substantially conforming to a form provided to Supplier by Bank of America. Unless otherwise provided in writing, the business terms in each Order relating to description of the Licensed Program, pricing, and performance standards shall apply only to such Order. + +1.31 Party - Bank of America or Supplier. + +1.32 Platform - the computer equipment and operating system which can execute the Object Code. + +1.33 Product or Products equipment, Software, firmware, system designs, Program Materials, Customizations, Maintenance Services, Documentation, training and any other goods or services this Agreement calls for Supplier to furnish or Supplier furnishes. Unless expressly otherwise provided, Product or Products shall also mean any separate portion or part of the Product or Products that Supplier furnishes. + +1.34 Product License Schedule - a document substantially in the form of SCHEDULE A attached hereto. + +1.35 Production Installation Date - the fifth consecutive Business Day upon which the Software has been used successfully to process Bank of America's work commercially in production. + +1.36 Program Materials - Supplier's proposals to Bank of America, Documentation, specifications and any other Documentation delivered in connection with the Software, including without limitation materials described in each Product License Schedule. + +1.37 Records - documentation of facts that include normal and customary documentation of facts or events for an industry, specific deliverables as designated, emails determined to be "records" because of the business or litigation purpose, any records documenting legal, regulatory, fiscal or administrative requirements. + +1.38 Relationship Manager(s) -the employee designated by a Party to act on its behalf with regard to matters arising under this Agreement who shall be the person the other Party shall contact in writing regarding matters concerning this Agreement. + +1.39 Repair Period - the time period commencing when Bank of America reports an Error to Supplier and continuing for four (4) hours or such other period as may be specified In a Product License Schedule. + +1.40 Representative an employee, officer, director, or agent of a Party. + +1.41 Software - the Licensed Programs and Object Code licensed by Supplier pursuant to a Product License Schedule that produces the results described in the Program Materials, together with the Documentation, all Corrections, Customizations and Updates and any Upgrades acquired by Bank of America pursuant to this Agreement, and, if licensed to Bank of America in this Agreement, the Source Code or other software programs offered by Supplier to the public on Supplier's Web site and used by Bank of America, notwithstanding any associated EULA, GPL or other license terms, any Updates thereto, and any related user manuals or Documentation. Proprietary to Bank of America Page 3 vTIP2010 + +Source: CARDLYTICS, INC., S-1, 1/12/2018 + + + + + +1.42 Source Code - the human-readable code from which a computer can compile or assemble the Object Code of a computer program, together with a description of the procedure for generating the Object Code. + +1.43 Subcontractor - a third party to whom Supplier has delegated or subcontracted any portion of its obligations set forth herein. + +1.44 Supplier Customizations - Customizations listed on a Customization Schedule, which Supplier shall own and license to Bank of America under the terms of this Agreement. + +1.45 Supplier Security Controls those controls implemented by Supplier as part of its Information Security Program that address each of the Bank Security Requirements, as modified from time to time. + +1.46 Term - the initial term of the Agreement or any renewal or extension. + +1.47 Time and Materials Rates - the rates specified in each Product License Schedule [or Order] that Supplier may charge for services provided under this Agreement which are not covered by the Maintenance Fee, or if not so specified, supplier's standard rates for such services. + +1.48 Update - a set of procedures or new program code that Supplier implements to correct Errors and which may include modifications to improve performance or a revised version or release of the Software which may incidentally improve its functionality, together with related Documentation. + +1.49 Upgrade - a new version or release of computer programs licensed hereunder which Supplier makes generally available to its customers to improve the functionality of, or add functional capabilities to such computer programs, together with related Documentation. Upgrades shall include new programs which replace, or contain functionality similar to, the Software already licensed to Bank of America hereunder. + +1.50 Warranty Period - the time period specified in each Product License Schedule commencing on the Acceptance Date of the applicable Software component as extended pursuant to the Section entitled "Acceptance." + +1.51 Work in Progress - all plans, systems designs, Documentation, working materials, specifications, flow charts source code, documented test results and other Work Product prepared by Supplier pursuant to this Agreement or during development of the Customizations. + +1.52 Work Product all information, data. materials, discoveries, inventions, drawings, works of authorship, documents, documentation, models, software, computer programs, software (including source code and object code), firmware, designs, specifications, processes, procedures, techniques, algorithms, diagrams, methods, and all tangible embodiments of each of the foregoing (in whatever form and media) conceived, created, reduced to practice or prepared by or for Supplier at the request of Bank of America within the scope of services provided under this Agreement, whether or not prepared on Bank of America's premises and all Intellectual Property Rights therein. + + 2.0 LICENSE + +2.1 Supplier hereby grants Bank of America a nonexclusive, worldwide, irrevocable, perpetual license to install, use, execute and copy the Software described in each Product License Schedule as necessary to conduct Bank of America business in accordance with the terms and restrictions of this Section and any special terms and restrictions stated on the applicable Product License Schedule. Proprietary to Bank of America Page 4 vTIP2010 + +Source: CARDLYTICS, INC., S-1, 1/12/2018 + + + + + +2.2 In addition, Bank of America may, at no additional charge other than the Software license fees specified in each Product License Schedule, (i) install, use, execute and copy the Software for any backup, archival and emergency purposes and any internal, non-production Bank of America purpose including for test, development, and training; (ii) allow a third party outsourcer or service provider to install, use, execute and copy the Software solely in connection with its provision of services to Bank of America, provided that such use does not extend to providing services to others; and (iii) transfer the Software to any other Platform or Installation Site replacing that on which it was previously installed. + +2.3 Bank of America may transfer the Software to other server operating systems or database platforms, whether or not in existence as of the effective date of this Agreement, but on which the Software is subsequently certified to operate, and Supplier shall provide Bank of America with any generally available versions of the Software, including required passwords or keys, that are reasonably necessary to accomplish such transfer, all at no additional charge. + +2.4 Bank of America may for a reasonable period of time after the sale of a Affiliate of Bank of America or a division of Bank of America, provide to such divested entity, processing services and/or similar activities which are or become incidental to Bank of America's business, at no additional charge or fee. All restrictions set forth in this Agreement on Bank of America's use of the Software shall be deemed also to apply to any divested entity's use of the Software. + +2.5 The license is subject to the following restrictions: (a) Title to and ownership of the Software (except the Bank of America Customizations) shall remain with Supplier or its licensors; (b) Bank of America shall not reverse engineer, reverse compile or disassemble any part of the Software without the prior written consent of Supplier: and (c) Bank of America shall not remove, obscure or deface any proprietary legend relating to the Software and shall include in each copy all proprietary notices contained in the Software. + +2.6 The licenses set forth above shall include the right to install, use, execute and copy the Source Code for test and development purposes. to modify it, to compile it into Object Code and to prepare from it derivative works for internal use only. Bank of America must keep the Source Code at the Source Code Installation Site named in SCHEDULE A. Bank of America may transfer Source Code to an alternate source code installation site if Supplier is notified promptly after such relocation. Other copies may be made for backup and archival purposes and may be transferred to Bank of America's off-site backup storage and contingency operations sites only. Any additional charge for the Source Code Is specified in SCHEDULE A. + +2.7 If Bank of America is not in default of its obligations under this Agreement or the General Services Agreement of even date between Supplier and Bank of America, then at Bank of America's request, Supplier shall deliver the then existing compiled and Source Code Software for the Cardlytics Software and any Improvements of thereto subject to the payment schedule to Supplier as outlined in Schedule A, Section B. Upon delivery, Bank of America will have all license right outlined in Section 2.7.1: + +2.7.1 Supplier hereby grants Bank of America a nonexclusive, worldwide, irrevocable, perpetual license to: (a) any patents related to or necessary or desirable to use the Software to the extent such patents are now held, licensed to or hereafter acquired by Supplier, for the purpose of allowing Bank of America and its Affiliates and permitted assigns to install, copy, use, execute, modify, distribute (as necessary or useful for Bank of America and its Affiliates and permitted assigns to enjoy their rights as set forth in the Agreement), make, have made, enhance, improve and alter the Software (both in Object Code and Source Code form) as necessary to conduct Bank of America business in accordance with the terms and restrictions or this Section; (b) any Copyrights now held, licensed to or hereafter acquired by Supplier in the Software for the purpose of allowing Bank of America and its Affiliates an permitted assigns to install, copy, use, execute, modify, distribute (as necessary or useful for Bank of America and its Affiliates and permitted assigns to enjoy their fights as set forth In the Agreement, produce derivative works from and Proprietary to Bank of America Page 5 vTIP2010 + +Source: CARDLYTICS, INC., S-1, 1/12/2018 + + + + + + + +display such Software (both in Object Code and Source Code for ); any (c) other Intellectual Property Rights or Supplier in the Software as are necessary or useful for Bank of America, its Affiliates and permitted assigns to install, copy, use, execute, modify, distribute, enhance, improve and alter and copy the Software (both in Object Code and Source Code form) for the purpose of conducting Bank of America business in accordance with the terms and restrictions of this Section. Without limiting the foregoing, but subject to the restrictions set forth in Section 2.5 hereof, Bank of America may: (x) sublicense its rights granted herein to its third party contractors for the purpose of their performing services for Bank of America and its Affiliates (which services may include, without limitation, altering, modifying, enhancing and improving the Software and creating derivatives to the Software), provided that such third party contractors have entered into a written agreement containing commercially standard confidentiality provisions requiring them to maintain the Source Code to the Licensed Programs securely and in confidence (subject to commercially standard exceptions), prior to having access to the Source Code for the Software: (y) sublicense its rights in the Software excluding any rights in the Source Code, to its end user customers as necessary for Bank of America to provide services to such end user customers; and (z) host the Software on its systems (or allow a third party to host the Software on its behalf) and make the Software available for use by its end user customers through the internet or other similar means. Any derivative works of or alterations, enhancements, modifications, or improvements to the Software created by Bank of America, its Representatives and Affiliates or their third party contractors shall be owned, and be freely assignable, by Bank of America, and Supplier shall have no rights therein (subject to Supplier's ownership of the underlying software). Without limiting the foregoing, Bank of America may freely transfer such Software to any other Platform or Installation Site replacing that on which it was previously installed. + +2.8 Supplier expressly acknowledges and agrees that the rights of Bank of America set forth in this Agreement shall inure to all Bank of America Affiliates, provided that Bank of America shall be responsible for the obligations of its Affiliates under this Agreement. Such Affiliates may execute Orders and purchase Licensed Programs hereunder. + +2.9 No Shrink Wrap Licenses. Supplier and Bank of America agree that no so-called "shrink wrap" or "click wrap" license terms shall apply to any Licensed Programs licensed to Bank of America hereunder. In the event that licenses or versions of the Licensed Programs that are packaged with any such "shrink wrap" or "click wrap" license are delivered to Bank of America hereunder. the terms and conditions of this Agreement and the applicable Order shall apply and not the terms of the "shrink wrap" or "click wrap" license. + + 3.0 RELATIONSHIP MANAGER + +3.1 Each Party shall designate an employee Relationship Manager(s) to act on its behalf with regard to matters arising under this Agreement and shall notify the other Party in writing of the name of its Relationship Manager; however, the Relationship Manager shall have no authority to alter or amend any term, condition, or provision of this Agreement. Either Party may change its Relationship Manager(s) by providing the other Party prior written notice. The Relationship Manager must be identified in a writing delivered to the other Party at least one (1) week prior to the commencement of any work under this Agreement. + +3.2 The Relationship Manager(s) shall meet via conference call with such frequency as Bank of America's Relationship Manager shall reasonably request. Bank of America may require meetings in person at a site designated by Bank of America. + +3.3 Supplier shall provide the Bank of America Relationship Manager a Customization Status Report by the first and fifteenth day of each month until all Customizations are accepted. Proprietary to Bank of America Page 6 vTIP2010 + +Source: CARDLYTICS, INC., S-1, 1/12/2018 + + + + + +4.0 TERM + +4.1 This Agreement shall apply and remain in effect from the Effective Date and perpetually thereafter unless terminated pursuant to the Section entitled "Termination." + + 5.0 TERMINATION + +5.1 Bank of America may terminate this Agreement, an Order and/or any Customization Schedule(s) for its convenience, without cause, at any time without further charge or expense upon at least forty-five (45) calendar days prior written notice to Supplier. Termination of one Order shall not cause a termination of this Agreement or any other Order, unless otherwise specified by Bank of America. + +5.2 In addition to any other remedies available to either Party, upon the occurrence of a Termination Event (as defined below) with respect to either Party, the other Party may immediately terminate this Agreement, the applicable Order or any Customization Schedule that is subject of the Termination Event by providing written notice of termination. A Termination Event shall have occurred if: (a) a Party materially breaches its obligations under this Agreement, an Order or any Customization Schedule under this Agreement and the breach is not cured within thirty (30) calendar days after written notice of the breach and intent to terminate is provided by the other Party; (b) a Party becomes insolvent (generally unable to pay its debts as they became due) or the subject of a bankruptcy, conservatorship, receivership or similar proceeding, or makes a general assignment for the benefit of its creditors; (c) Supplier either: (i) merges with another entity, (ii) suffers a transfer involving fifty (50%) percent or more of any class of its voting securities or (iii) transfers all, or substantially all, of its assets; (d) in providing services hereunder, Supplier violates any law or regulation governing the financial services Industry, or causes Bank of America to be in material violation of any law or regulation governing the financial services industry; (e) Bank of America has the right to terminate under the Section entitled "Pricing/Fees"; or (f) a Party attempts to assign this Agreement in breach of the Section entitled "Non-Assignment." In the event of a Termination Event described in item (a) above with respect to an Order, only the applicable Order shall be subject to termination. Breach of one Order shall not constitute a default of any other Order, unless otherwise agreed in writing between the Parties. + +5.3 In addition to the Termination Events above, if the Services Schedule A of the General Services Agreement of even date between the parties to this Agreement expires, does not renew or terminates for any reason within the initial term and the Parties have not reached agreement on the delivery of the Software herein, then Cardlytics may terminate this Software License, Customization and Maintenance Agreement, including without limitation the Term License, shall terminate at the same time. + +5.4 The Parties agree that all Software delivered pursuant to this Agreement and the documentation therefore constitute "intellectual property" under Section 101(35A) of the Code (11 U.S.C. section 101(35A)). Supplier agrees that if it, as a debtor-in-possession, or if a trustee in bankruptcy for Supplier, in a case under the Code, rejects this Agreement, Bank of America may elect to retain its rights under this Agreement as provided in Section 365(n) of the Code. Bank of America, and any Intellectual Property Rights, licenses or assignments from Supplier of which Bank of America may have the benefit, shall receive the full protection granted to Bank of America by applicable bankruptcy law. + +5.5 The licenses granted in this Agreement with respect to any Licensed Program shall not terminate for any reason unless Supplier terminates the applicable Product License Schedule pursuant to Section 5.2 after Bank of America fails to pay in full the undisputed portion of license fees payable with respect to such Licensed Program under such Product License Schedule. + +5.6 In addition to the rights of Bank of America set forth in this Section, (a) If Bank of America terminates any Product License Schedule for material default by Supplier prior to the Acceptance Date of the Software, Bank of America shall be entitled to a full refund, within thirty (30) calendar days after notice of termination, of all license fees, Maintenance Fees and other fees paid Proprietary to Bank of America Page 7 vTIP2010 + +Source: CARDLYTICS, INC., S-1, 1/12/2018 + + + + + + + +hereunder; and (b) Bank of America may terminate Maintenance Services under any Product License Schedule or Order for convenience at any time, and Bank of America shall then have no obligation to pay any additional Maintenance Fees, other than for Maintenance Services performed through the date of termination. Bank of America may terminate the Maintenance Services under any Product License Schedule or Order for material default by Supplier, upon Bank of America's termination of such Maintenance Services for default, Bank of America shall be entitled to a pro rata refund of all prepaid Maintenance Fees for the period after the date of termination. + +5.7 Supplier shall deliver all Work in Progress relating to Bank of America Customizations to Bank of America within five (5) calendar days after the effective date of termination under Sections 5.1, 5.2, and 5.3 above. All right, title and interest in such Work in Progress relating to Bank of America Customizations (including copyright) shall be deemed assigned to and vested in Bank of America. + +5.8 In the event of expiration or termination of this Agreement, an Order or of Maintenance Services under this Agreement, Supplier agrees that upon the request of Bank of America, Supplier will, at no additional cost to Bank of America and through the period of paid up Maintenance Services, continue uninterrupted operations, conclude and cooperate with Bank of America in the transition of the business at Bank of America's direction and in a manner that causes no material disruption to Bank of America business and operations. The fees associated with such transition shall be in accordance with the fees in effect at the expiration or termination of this Agreement. In no event shall the transition exceed one hundred eighty [180] calendar days from the date of termination unless the Parties otherwise agree in writing. For the avoidance of doubt, Bank of America agrees to pay Supplier all undisputed fees for Maintenance Services rendered up to the date of termination or expiration pursuant to the related terms hereunder. Reimbursement of all extraordinary costs and expenses incurred outside of the Agreement terms and conditions will be agreed upon by Supplier and Bank of America in writing prior to their incurrence. + +5.9 The rights and obligations of the Parties which by their nature must survive termination or expiration of this Agreement in order to achieve its fundamental purposes including, without limitation, the provisions of the following Sections, "AUDIT, "CONFIDENTIALITY AND INFORMATION PROTECTION," "INDEMNITY," "LICENSE,'' "LIMITATION OF LIABILITY. "MEDIATION/ARBITRATION," "OWNERSHIP OF WORK PRODUCT" and "MISCELLANEOUS" shall survive in perpetuity any termination of this Agreement. + + 6.0 ORDERING, DELIVERY AND INSTALLATION + +6.1 To order Product(s), Bank of America or any of its Affiliates shall Issue Supplier an Order or other written authorization delivered in hard copy, via facsimile or other form of electronic communication referring to this Agreement. Bank of America shall not be obligated to pay for Product in the absence of such an Order. Supplier shall not deliver software not licensed to Bank of America. + +6.2 Supplier shall, at Bank of America's election, either (i) electronically deliver the Software and Documentation to Bank of America premises from a remote location via electronic transmission, such as over telecommunications networks (e.g., file transfer protocol), by granting Bank of America downloading access through a secured web site, without Bank of America receiving or retaining possession of the Software and Documentation in the form of tangible personal property, such as tapes, disks or printed materials ("Electronic Delivery"), or (ii) deliver to and install the Software and Documentation at a Bank of America facility and depart the facility with all storage devices and resources used to deliver and install the Software and Documentation ("Load and Leave"). If the Software and Documentation are received through Electronic Delivery or through a Load and Leave exchange, no tangible personal property will transfer to or come into the possession of Bank of America from Supplier in fulfillment of Bank of America's entitlements to the Software and Documentation. Shipment and delivery of the Software shall be deemed Proprietary to Bank of America Page 8 vTIP2010 + +Source: CARDLYTICS, INC., S-1, 1/12/2018 + + + + + + + +complete upon Supplier transmitting the Software to Bank of America or Supplier making it accessible by Bank of America for downloading, whichever Is applicable. Any other delivery method shall be by exception only and shall be clearly documented in the applicable Product License Schedule. If there is not a preference to delivery in such Product License Schedule, then ii is assumed that all Software and all Updates are by Electronic Delivery or by Load and Leave delivery to Bank of America. + +6.3 Supplier shall be responsible for and shall bear any and all risk of loss or disclosure of, or damage to, Software until delivery to the Installation Site. + +6.4 After delivery of Software, Bank of America shall attempt diligently to install it on the Platform using adequate numbers of technically skilled personnel, and shall notify Supplier promptly after the Software has been properly installed. Alternatively, Bank of America may request Supplier in writing to install the Software at the Time and Material Rates, unless otherwise expressly agreed in an Order. + +6.5 Supplier shall provide at, no additional charge, installation Documentation and reasonable telephonic off site consultation and assistance as necessary for Bank of America to install the Software, together with the installation support, if any, described in an Order. + + 7.0 CUSTOMIZATIONS + +7.1 Supplier shall provide Bank of America, within twenty-one (21) calendar days after receipt of the Bank of America's request setting forth the relevant requirements, with a written estimate of the cost of the Customizations. Bank of America may direct Supplier to provide such written estimate on a time and materials basis or a fixed price basis, and Supplier shall comply with such direction. Supplier's response shall set forth the Delivery Target Date for such Customizations. + +7.2 Bank of America may submit to Supplier an Order or other written authorization for Customizations, stating Bank of America's preferred Delivery Target Date for Customizations and the terms for the Customizations, as proposed by Supplier pursuant to the preceding paragraph. Unless Supplier notifies Bank of America of its rejection of Bank of America's written order within five (5) Business Days after its receipt, it shall be deemed accepted. Bank of America shall not be obligated to pay for Customizations or time and materials supplied in the absence of an Order or written authorization. The parties shall execute a Customization Schedule for each Customization. + +7.3 Bank of America and Supplier shall agree in writing on the functional, technical and performance specifications of any Customizations. The specifications for each customization shall be described in a Customization Schedule. Such specifications shall be subject to the Section entitled "Acceptance" and Supplier shall make such reasonable changes to the specifications or such preliminary documents as Bank of America may request. In accordance with Section 7.4, if applicable, at Bank of America's written request, accompanied by an Order or other written authorization. Supplier shall prepare functional. technical and performance specifications for Customizations prior to undertaking Customizations. Supplier shall deliver to Bank of America the Source Code and Object Code for Bank of America Customizations. + + 7.4 Change Orders; + + + +A. If Bank of America requests a material change in the Customization specifications prior to acceptance of the Customizations, Supplier shall prepare revised specifications within fifteen (15) calendar days reflecting the price effect of Bank of America's request. Bank of America shall accept or reject Supplier's proposal within fifteen (15) calendar days after receipt thereof. The Parties shall make any appropriate amendment to the Customization Schedule. Proprietary to Bank of America Page 9 vTIP2010 + +Source: CARDLYTICS, INC., S-1, 1/12/2018 + + + + + + + +B. Unless otherwise directed by Bank of America, Supplier shall continue to develop the Customizations using the Customization specifications in effect at the time Bank of America requests the change. Supplier may amend Customization specifications at no charge at its option, provided that Supplier shall obtain Bank of America's written consent to such amendment. At Supplier's option, Supplier may use the Change Order form to obtain Bank of America's consent. + +7.5 Supplier shall provide Bank of America sufficient access to the development site and Supplier personnel so that Bank of America may have a reasonable opportunity to evaluate the status of any Customizations. Suppler shall notify Bank of America of, and Bank of America may at its request participate in, alpha, beta and quality assurance tests for the Customizations. + +7.6 Commencing upon the Customization Delivery Date, Bank of America shall perform acceptance tests on the Customizations, following the procedure set forth in the Section entitled "Acceptance." If Bank of America rejects Customizations in accordance with the procedure set forth in the Section entitled "Acceptance," Bank of America has no further obligation to pay Supplier for them and shall receive a full refund of all amounts previously paid for that Customization. + +7.7 Marketing Restrictions. Unless specified in the applicable customization Schedule or otherwise agreed, all Customizations shall be deemed Bank of America Customizations. Bank of America shall own all right, title, and interest in and to the Bank of America Customizations as Work Product in accordance with Section 39.0. Supplier shall not provide a Bank of America Customization to any third party. In the event that any Bank of America Customization is furnished or plan, design or specification for producing the same has been specifically designed, developed or modified for or by Bank of America, then no such Bank of America Customization, plan, design or specification shall be duplicated or furnished to others by Supplier without the prior written consent of Bank of America. + + 8.0 SOURCE CODE CUSTODY + +8.1 The provisions of this Section shall apply only to the Source Code for the Licensed Programs. The Source Code for the Bank of America Customizations may be use by Bank of America without any of the restrictions set forth in this Section. + +8.2 With each delivery of Software to Bank of America hereunder, Supplier shall deliver to Bank of America the Source Code for all Software and for all Updates, Upgrades and new releases of the Software. Until a Release Condition (as defined in Section 8.6) occurs and the conditions of Section 8.7 have been satisfied, Bank of America shall not permit access to or use of the Source Code, except as expressly provided herein. + +8.3 Bank of America shall establish a secure receptacle in which it shall place the Source Code and shall put the receptacle under supervision of one or more of its officers, whose identity shall be available to Supplier at all times. Bank of America shall exercise the degree of care in carrying out its obligations hereunder that Bank of America then exercises with respect to Bank of America proprietary data of a similar nature, but not less than reasonable care. Bank of America acknowledges that the Source Code is proprietary data, and Bank of America shall have an obligation to preserve and protect the confidentiality of the Source Code. + +8.4 Supplier grants Bank of America the right to duplicate the Source Code only as necessary to preserve and safely store the Source Code and as expressly permitted in this Section. Bank of America shall reproduce in all copies of the Source Code made by Bank of America any proprietary or confidentiality notices contained in the Source Code when originally delivered by Supplier. Proprietary to Bank of America Page 10 vTIP2010 + +Source: CARDLYTICS, INC., S-1, 1/12/2018 + + + + + +8.5 Upon delivery of the Source Code to Bank of America by Supplier, including in connection with any Upgrade, Update or new release, Bank of America shall have the right to verify the Source Code for accuracy, completeness and sufficiency, and to confirm that it compiles to the pertinent object code of the Software. Bank of America shall notify Supplier of the dates on which any such verification will be conducted, and the results thereof. Bank of America may temporarily release the Source Code for this purpose only, but all copies of the Source Code shall be returned to the designated storage location as soon as the verification is completed. Supplier may elect to observe the verification process at its own expense. + +8.6 Any or the following events shall be Release Conditions for purposes of this Section: (a) Supplier defaults on any of its maintenance obligations herein; (b) Supplier ceases to provide maintenance for the Software; (c) Supplier ceases doing business in the ordinary course, files or has filed against it a petition under bankruptcy Code, becomes insolvent or has a receiver appointed for all or a substantial part of its business; or (d) Bank of America terminates this Agreement for cause pursuant to the terms hereof. + +8.7 If a Release Condition has occurred, Bank of America may immediately release the Source Code for the purposes described in Section 8.8, following the issuance of a written statement to Supplier by Bank of America's executive management, stating that a Release Condition has occurred. + +8.8 Supplier hereby grants to Bank of America a nonexclusive, fully paid, irrevocable, royalty-free, world-wide license to use, modify, copy, produce derivative works from, display, disclose to persons who have entered into a written agreement containing substantially the same confidentiality provisions as in this Agreement for the purpose of maintaining the Software for Bank of America, and otherwise to utilize the Software and the Source Code and other materials necessary to maintain and improve the Software for use by Bank of America, subject always to the limitations In this Agreement on reproduction and use of the Software. + + 9.0 DOCUMENTATION + +9.1 At no additional charge and in accordance with the delivery method specified in each Product License Schedule, Supplier shall deliver a complete set of Documentation for the Software at the same time as the Software is delivered and for every Customization and Upgrade delivered to Bank of America. The Documentation shall describe fully the proper procedure for using the Software and provide sufficient information to enable Bank of America to operate all features and functionality of the Software on the Platform. Supplier shall deliver reasonable Documentation to allow Bank of America to install and use each Update. Except as otherwise provided in Section 39.0, "Ownership of Work Product", Bank of America may use and reproduce for internal purposes all Documentation furnished by Supplier, including displaying the Documentation on Bank of America's intranet or other internal electronic distribution system, in part or in whole. Documentation for Customizations, Updates and Upgrades shall meet or exceed the level of quality, form and completeness of the Documentation for the Licensed Programs. + +9.2 Supplier shall, in accordance with the delivery method specified in each Product License Schedule, deliver updated Documentation to Bank of America concurrently with delivery of any Upgrades or Customizations or any other occasion of issuance of updated Documentation. + + 10.0 ACCEPTANCE + +10.1 During the Acceptance Period, Bank of America shall perform whatever acceptance tests on the Software it may wish to confirm that the Software is Operative. If Bank of America discovers during the Acceptance Period that any Software is not Operative, Bank of America shall notify Supplier of the deficiencies. Supplier, at its own expense, shall modify, repair, adjust or replace the Software to make it Operative within fifteen (15) calendar days after the date of Bank of America's deficiency notice. Bank of America may perform additional acceptance tests during a Proprietary to Bank of America Page 11 vTIP2010 + +Source: CARDLYTICS, INC., S-1, 1/12/2018 + + + + + + + +period commencing when Supplier has delivered revised Software correcting all the deficiencies Bank of America has noted. This restarted Acceptance Period shall have a duration equal to that of the initial Acceptance Period, unless Bank of America earlier accepts the Software in writing. If the Software, at the end of the Acceptance Period as so extended, still is not Operative in Bank of America's judgment after consultation with Supplier, Bank of America may reject the Software and terminate this Agreement for material breach or, at its option, repeat the procedure of this paragraph as often as it determines is necessary. If Bank of America does not notify Supplier of acceptance or rejection of the Software, it shall be deemed accepted at the end of the Acceptance Period extended pursuant to this paragraph. If not previously accepted, the Software shall also be deemed accepted upon the Production Installation Date. + +10.2 Bank of America shall use the procedure in this Section to determine acceptance of Customizations and Upgrades. If Bank of America finds an Upgrade not to be Operative and rejects it, Bank of America shall have no obligation to pay for such Upgrade if Supplier provided the Upgrade to Bank of America for an additional charge above Maintenance Services, and Supplier shall continue to support the version or release of the Software that Bank of America has installed. + + 11.0 MAINTENANCE SERVICES + +11.1 Supplier shall provide the Maintenance Services attached hereto as SCHEDULE D. + + 12.0 UPGRADES + +12.1 Supplier shall offer Upgrades to Bank of America whenever Supplier makes Upgrades generally available to its other customers. Unless otherwise agreed to in a Product License Schedule, Supplier shall deliver by Electronic Delivery or by Load and Leave delivery each Upgrade to Bank of America at no additional charge as part of Maintenance Services. + +12.2 Supplier shall notify Bank of America as far in advance as reasonably possible, but in no event less than six (6) months prior to release, of all Upgrades and Software replacements/ phase-outs, and shall provide Bank of America all relevant release notes and other Documentation as soon as possible after notification. + +12.3 Supplier shall continue to provide Maintenance Services on the terms and conditions of this Agreement for the version of Software Bank of America has installed for at least twenty-four (24) months after Supplier makes an Upgrade generally available to its customers. + + 13.0 NON-MAINTENANCE SERVICES SUPPORT + +13.1 If Supplier agrees to perform non-Maintenance Services support services at Bank of America's request in connection with the implementation of the Software, such services shall be performed in a workmanlike and professional manner by qualified personnel at the Time and Materials Rates set forth in SCHEDULE A. + + 14.0 TRAINING + +14.1 Supplier shall provide, at the rates and fees specified in an Order, if any, the training classes called for in an Order in use, operation and maintenance of the Software for Bank of America personnel on Bank of America premises on dates to be specified by Bank of America. Supplier shall provide training Documentation for each attendee at any classes Supplier conducts. Prices for additional classes, if any, shall be specified in an Order. If Supplier agrees to allow Bank of America to train Bank of America personnel, Supplier shall provide Bank of America, at the rates and fees specified in an Order, if any, all trainer/class leadership materials Supplier has available or used in connection with the classes conducted for Bank of America. Bank of America may duplicate these materials for Bank of America's use exclusively and use them to conduct other classes at Bank of America's convenience. Proprietary to Bank of America Page 12 vTIP2010 + +Source: CARDLYTICS, INC., S-1, 1/12/2018 + + + + + +15.0 PRICING/FEES + +15.1 Software license fees, Maintenance Fees and the method of payment shall be set forth in each Order or the applicable Order. Fees for additional services not listed on an Order shall be as mutually agreed in writing between Bank of America and Supplier prior to performance. + +15.2 If the Order is for Customizations, fees and the method of payment are set forth in the applicable Customization Schedule. + +15.3 Fees for services, other than Maintenance Services listed in SCHEDULE A, B and D or an Order are subject to the standard of measurement or evaluation applicable to the commercial production and sale of similar Products and services provided by Supplier under this Agreement ("Industry Benchmarking") at any time at Bank of America's option, and may be reduced based on the results. Bank of America shall give notice to Supplier of any proposed fee reduction including the effective date of such fee reduction. Supplier shall notify Bank of America of its acceptance or rejection of the proposed fee reduction within fifteen (15) calendar days of Supplier's receipt of notice. If Supplier does not give notice to Bank of America, such fee reduction shall be deemed accepted and invoices shall be adjusted accordingly. If Supplier rejects a proposed fee reduction, Bank of America may terminate the services engagement with no further liability. + + 16.0 INVOICES TAXES/PAYMENT + +16.1 Supplier shall submit invoices, in accordance with the timeframes specified in SCHEDULE A, to the address set forth in SCHEDULE A or the applicable Order. Bank of America requires Suppliers to accept payment through electronic media in one of the following agreed upon methods; credit card using the Bank of America ePayables process, ACH, or electronic check. In the event that the agreed upon method of payment is through the Bank of America ePayables process using purchase cards, the Supplier shall, at no additional cost to Bank of America, ensure Supplier has the capability to process purchasing cards, prior to submitting invoices to Bank of America. Supplier shall electronically invoice Bank of America using the Bank of America designated e-Procurement tool. Each invoice shall specify the amount for each item on the invoice and include the following: (i) the slate where Supplier will electronically deliver the Software and Documentation to Bank of America, (ii) the method of electronic delivery, (iii) the state where services are to be performed, (iv) the Agreement reference number as Indicated on the signature page of this Agreement), and (v) the Order number if applicable. + +16.2 The items listed on Supplier's invoice must appear in the same sequence as listed on the Order. + +16.3 Invoices that omit the state of Electronic Delivery. the method of Electronic Delivery, the state where services are to be performed, the Agreement reference number and Order number of applicable, or that fail to list Products and services separately, or that are incorrect, incomplete or list Products or services that were not requested in writing by Bank of America will not be paid. The Relationship Manager for Bank of America will contact the Supplier Relationship Manager to address the situation informally prior to initiating the dispute resolution process under this Agreement. + +16.4 Bank of America shall pay Supplier for all services and applicable taxes invoiced In arrears in accordance with the terms of this Agreement, within sixty (60) calendar days of the date of receipt of a valid and correct invoice by Bank of America. Bank of America reserves the right to pay prior to the expiration of the sixty (60) day period. If Bank of America pays within thirty (30) calendar days of receipt of a valid invoice by Bank of America, a discount of two percent (2%) will be subtracted from the total invoice amount for Services. Proprietary to Bank of America Page 13 vTIP2010 + +Source: CARDLYTICS, INC., S-1, 1/12/2018 + + + + + +16.5 Unless otherwise agreed upon by Bank of America, (i) all charges for Maintenance Services shall be invoiced in accordance. with the terms specified in the applicable Order, (ii) charges for Software shall be invoiced on the Acceptance Date, and (iii) all other charges shall be invoiced when incurred. Invoices shall contain such detail as Bank of America may reasonably require from time to time. Amounts not invoiced by Supplier to Bank of America within three (3) months after such amounts could first be invoiced under this Agreement may not thereafter be invoiced, and Bank of America shall not be required to pay such amounts. + +16.6 Invoices shall include and list all applicable sales, use, or excise taxes that are a statutory obligation of Bank of America as separate line items identifying each separate tax category and taxing authority. Bank of America will reimburse Supplier for all sales, use or excise taxes levied on amounts payable by Bank of America to Supplier pursuant to this Agreement, however, Bank of America shall not be responsible for remittance of such taxes to applicable tax authorities. + +16.7 Bank of America shall not be responsible for any ad valorem, income, gross receipts, franchise, privilege, value added or occupational taxes of Supplier. Bank of America and Supplier shall each bear sole responsibility for all taxes, assessments and other real or personal property- related levies on its owned or leased real or personal property. + +16.8 Supplier shall be responsible for the payment of all taxes, interest and penalties related to any assessment by a taxing authority as contemplated by Section 16.6 to the extent that Supplier fails to accurately and timely invoice Bank of America for such taxes and remit such taxes directly to the applicable taxing authority. In the event that a taxing authority performs a sample and projection audit on Bank of America, then Supplier shall be responsible for the payment of all projected tax amounts including all interest and penalties on any projected taxes assessed resulting from taxing errors identified by such taxing authority on Supplier's Invoices, provided however, that Supplier shall receive timely notice that such invoice is included In a tax authority's audit and Supplier has the right to produce documentation to support that the tax was satisfied. In the event Supplier voluntarily registers to collect sales tax at some future date, and wishes to remit historical taxes Supplier deems due, Bank of America will only be responsible for the taxes due for the time period that Bank of America is statutorily obligated to the tax authorities in each state. + +16.9 Supplier shall fully cooperate with Bank of America's efforts to identify taxable and nontaxable portions of amounts payable pursuant to this Agreement (including segregation of such portions on invoices) and to obtain refunds of taxes paid, where appropriate. Bank of America may furnish Supplier with certificates or other evidence supporting applicable exemptions from sales, use or excise taxation. If Bank of America pays or reimburses Supplier under this Section, Supplier hereby assigns and transfers to Bank of America all of its right, title and interest in and to any refund for taxes paid. Any claim for refund of taxes against the assessing authority may be made in the name of Bank of America or Supplier, or both, at Bank of America's option. Bank of America may initiate and manage litigation brought in the name of Bank of America or Supplier, or both, to obtain refunds of amounts paid under this Section. Supplier shalt cooperate fully with Bank of America in pursuing any refund claims, including any related litigation or administrative procedures. + +16.10 Supplier shall keep and maintain complete and accurate accounting Records in accordance with generally accepted accounting principles consistently applied to support and document all amounts becoming payable to Supplier hereunder. Upon request from Bank of America, Supplier shall provide to Bank of America (or a Representative designated by Bank of America) access to such Records for the purpose of auditing such Records during normal business hours. Supplier shall retain all Records required under this Section in accordance with the Section entitled "Audit" of this Agreement, after the amounts documented In such Records become due. Supplier shall Proprietary to Bank of America Page 14 vTIP2010 + +Source: CARDLYTICS, INC., S-1, 1/12/2018 + + + + + + + +cooperate fully with Bank of America and any taxing authority involving any audit of sales, use or excise taxes. Upon request from Bank of America, Supplier will provide copies of invoices in electronic form that have been selected for review by any taxing authority, together with documents supporting the identification of taxable and nontaxable portions of amounts reflected on such invoices as contemplated by Section 16.9.. + + 17.0 EXPORT LAWS + +17.1 Export of Software. To the extent the Software contains any cryptographic functionality that would subject it to the provisions of the United States Export Administration Regulations (the "EAR"), Supplier hereby represents and warrants that: (a) the Export Control Classification Number ("ECCN") for such Software is set forth on the applicable Product License Schedule; and (b) Supplier has obtained all necessary licenses, if any, and submitted all necessary prior notifications and review requests (without receipt of any objection) to the Bureau of Industry and Security ("BIS'') and the National Security Agency (the "NSA), which are required to be made under the EAR in order for Bank of America to be able to use such Software as contemplated hereunder and in accordance with (and subject to) the provisions of the Agreement and the applicable Product License Schedule, outside of the United States, subject to the following: (i) Bank of America may not export such Software to any countries (or the nationals thereof) in Country Group E:1 on Supplement No. 1 to Part 740 of the EAR (as such provision may be hereafter amended); (ii) Bank of America may not export such Software in violation of any prohibitions of EAR Parts 744 and 746 (as such provisions may be amended from time to time); and (iii) Bank of America may have obligations to make periodic reports to BIS and/or the NSA (unless such exports are made to Bank of America Affiliates which are classified as "U.S. Subsidiaries" under Part 772 of the EAR), and to the extent such reports are required, Supplier has provided, or will provide, a brief summary of such requirements, as given to the best of its knowledge, on the applicable Product License Schedule. Supplier will hereafter communicate to Bank of America any additional laws and regulations relevant to Bank of America's export, reexport, sale or other disposition of Product pursuant to this Agreement + + 18.0 MUTUAL REPRESENTATIONS AND WARRANTIES + +18.1 Each Party represents and warrants the following: (a) the Party's execution, delivery and performance of this Agreement (i) have been authorized by all necessary corporate action, (ii) do not violate the terms of any law, regulation, or court order to which such Party is subject or the terms of any material agreement to which the Party or any of its assets may be subject and (iii) are not subject to the consent or approval of any third party; (b) this Agreement is the valid and binding obligation of the representing Party, enforceable against such Party in accordance with its terms; and (c) such Party is not subject to any pending or threatened litigation or governmental action which could interfere with such Party's performance of its obligations hereunder. + + 19.0 REPRESENTATIONS AND WARRANTIES OF SUPPLIER + +19.1 In rendering its obligations under this Agreement, without limiting other applicable performance warranties, Supplier represents and warrants to Bank of America as follows: (a) Supplier is in good standing in the state of its incorporation and is qualified to do business as a foreign corporation in each of the other states in which it is providing Products or services hereunder; (b) Supplier shall secure or has secured all permits, licenses, regulatory approvals and registrations required to deliver Products or render services set forth herein, including without limitation, registration with the appropriate taxing authorities for remittance of taxes; and (c) Supplier shall, and shall be responsible for ensuring that Supplier's Representatives and Subcontractors shall, perform all obligations of Supplier under this Agreement in compliance with all laws, rules, regulations and other legal requirements. Proprietary to Bank of America Page 15 vTIP2010 + +Source: CARDLYTICS, INC., S-1, 1/12/2018 + + + + + +19.2 Supplier represents and warrants that it shall perform the Maintenance Services in a timely and professional manner using competent personnel having expertise suitable to their assignments. Supplier represents and warrants that the services shall conform to or exceed, in all material respects, the specifications described herein, as well as the standards generally observed in the industry for similar services. Supplier represents and warrants that neither performance nor functionality of the services, Products or systems is or will be affected by dates prior to, during and after the year 2000. Supplier represents and warrants that services supplied hereunder shall be reasonably free of defects in workmanship, design and material. Supplier represents and warrants that sale, licensing or use of any Product, Work Product and service furnished under this Agreement, including but not limited to Software, system design, equipment or Documentation, do not and shall not infringe, misappropriate or otherwise violate any Intellectual Property Rights or any other rights of any third party. + +19.3 As of the Effective Date, there are no actions, suits or proceedings pending, or to the knowledge of Supplier threatened, against Supplier, Supplier's Representatives and Subcontractors alleging infringement, misappropriation or other violation of any Intellectual Property Rights related to any product, Work Product or Service contemplated by this Agreement. + +19.4 Supplier warrants that it shall develop any Customizations in a professional workmanlike manner, using qualified personnel familiar with the Software and its operation. + +19.5 Supplier hereby represents and warrants that the Software shall be and shall remain Operative, from the Delivery Date through the end of the Warranty Period. Following expiration of the Warranty Period and for so long as Bank of America has contracted Supplier to provide Maintenance Services, Supplier represents and warrants that the Software shall remain Operative. If the Software is not Operative at the expiration of the initial Warranty Period, the Warranty Period shall be extended until Supplier makes the Software Operative. This warranty shall not be affected by Bank of America's modification of the Software so long as Supplier can discharge its warranty obligations notwithstanding such modifications or following their removal by Bank of America. + +19.6 Supplier warrants that during the term of this Agreement, Bank of America may use Product without disturbance, subject only to Bank of America's obligations to make the payments required by this Agreement. Supplier represents that this Agreement, the Products and the Intellectual Property Rights in the Products are not subject or subordinate to any right of Supplier's creditors, or if such subordination exists, the agreement or instrument creating it provides for non-disturbance of Bank of America. + +19.7 Supplier represents and warrants that it is familiar with all applicable domestic and foreign antibribery or anticorruption laws, including those prohibiting Supplier, and, if applicable, its officers, employees, agents and others working on its behalf, from taking corrupt actions in furtherance of an offer, payment, promise to pay or authorization of the payment of anything of value, including but not limited to cash, checks, wire transfers, tangible and Intangible gifts, favors, services, and those entertainment and travel expenses that go beyond what is reasonable and customary and of modest value, to: (i) an executive, official, employee or agent of a governmental department, agency or instrumentality, (ii) a director, officer, employee or agent of a wholly or partially government-owned or -controlled company or business, (iii) a political party or official thereof, or candidate for political office, or (iv) an executive, official, employee or agent of a public international organization (e.g., the International Monetary Fund or the World Bank) ("Government Official'); while knowing or having a reasonable belief that all or some portion will be used for the purpose of: (a) influencing any act, decision or failure to act by a Government Official In his or her official capacity, (b) inducing a Government Official to use his or her influence with a government or instrumentality to affect any act or decision of such government or entity, or (c) securing an Improper advantage; in order to obtain, retain, or direct business. + +19.8 Supplier represents and warrants that it would now be in compliance with all applicable domestic or foreign antibribery or anticorruption laws, including those prohibiting the bribery of Government Officials, and will remain in compliance with all applicable laws; that it will not authorize, offer or Proprietary to Bank of America Page 16 vTIP2010 + +Source: CARDLYTICS, INC., S-1, 1/12/2018 + + + + + + make payments directly or indirectly to any Government Official; and that no part of the payments received by it from Bank of America willbe used for any purpose that could constitute a violation of any applicable laws. + +19.9 THE WARRANTIES CONTAINED IN THIS AGREEMENT ARE IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO THOSE OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. + + 20.0 DELETION OF FUNCTIONS + +20.1 In the event that Supplier deletes functions from the Software and transfers or offers those functions in other or new products (whether directly or Indirectly or through an agreement with a third party), the portion of those other or new products that contain the functions in question, or the entire product, if the functions cannot be separated out, shall be provided to Bank of America under the terms of this Agreement, at no additional charge and shall be covered under Maintenance Services for such Software. + + 21.0 DISABLEMENT OF SOFTWARE AND HARDWARE + +21.1 Except during and in conjunction with maintenance or any other authorized servicing or support, in no event shall Supplier, its Representatives or Subcontractors or anyone acting on its behalf, disable (or permit or cause any embedded mechanism to disable) the Software or hardware owned or utilized by Bank of America without the prior written permission of an officer of Bank of America. Disablement shall also apply to all instances of Software installed, used, and executed in support of disaster recovery activities or the non-emergency tests of such activities. + + 22.0 FINANCIAL RESPONSIBILITY + +22.1 Upon Bank of America's request, Supplier shall promptly furnish its financial statements as prepared by or for Supplier in the ordinary course of its business. If Supplier is subject to laws and regulations of the U.S. Securities & Exchange Commission (SEC), the financial reporting and notification requirements contained herein shall be limited to all information that can be provided and in accordance with timelines which are legally permitted. Financial information provided hereunder shall be used by Bank of America solely for the purpose of determining Supplier's ability to perform its obligations under this Agreement. To the extent any such financial information ls not otherwise publicly available, it shall be deemed Confidential Information (as defined in Section 27.1) of Supplier. If Bank of America's review of financial statements causes Bank of America to question Supplier's ability to perform its duties hereunder, Bank of America may request, and Supplier shall provide to Bank of America, reasonable assurances of Supplier's ability to perform its duties hereunder. Failure by Supplier to provide such reasonable assurances to Bank of America shall be deemed a material breach of this Agreement. Furthermore, Supplier shall notify Bank of America immediately In the event there is a change of control or material adverse change in Supplier's business or financial condition. + + 23.0 BUSINESS CONTINUITY + +23.1 Supplier agrees to establish, maintain and implement per the terms thereof, a Business Continuity Plan. The Business Continuity Plan must be in place and delivered to Bank of America within forty-five (45) calendar days after the Effective Date of this Agreement. The Business Continuity Plan shall be delivered annually thereafter and shall include, but not be limited to, the items called for in SCHEDULE G entitled "Recovery," as applicable. If Bank of America objects in writing to any provision of such plans and controls, Supplier shall respond in writing within thirty (30) calendar days, explaining, among other matters Supplier wishes to include in its response, the actions Supplier intends to take to cure Bank of America's objection. Proprietary to Bank of America Page 17 vTIP2010 + +Source: CARDLYTICS, INC., S-1, 1/12/2018 + + + + + +24.0 RELATIONSHIP OF THE PARTIES + +24.1 The Parties are independent contractors. Nothing in this Agreement or in the activities contemplated by the Parties hereunder shall be deemed to create an agency, partnership, employment or joint venture relationship between the Parties or any of their Subcontractors or Representatives. + + 25.0 SUPPLIER PERSONNEL + +25.1 Bank of America shall provide Supplier, if necessary and at a mutually agreed upon time, reasonable access to Bank of America to provide its services, subject to the existing security regulations at Bank of America. + +25.2 Supplier's personnel are not eligible to participate in any of the employee benefit or similar programs of Bank of America. Supplier shall inform all of its personnel providing services pursuant to this Agreement that they will not be considered employees of Bank of America for any purpose, and that Bank of America shall not be liable to any of them as an employer for any claims or causes of action arising out of or relating to their assignment. + +25.3 Upon the request of Bank of America, Supplier shall immediately remove any of Supplier's Representatives or Subcontractors performing services under this Agreement and replace such Representative or Subcontractor as soon as practicable. Upon the request of Bank of America, Supplier shall promptly, and after consultation with Bank of America, address any concerns or issues raised by Bank of America regarding any of Supplier's Representatives or Subcontractors performing services under this Agreement which may include, as appropriate, replacing such Representative or Subcontractor from the Bank of America account. + +25.4 The engagement of a Subcontractor by Supplier shall be subject to Bank of America's prior written consent, which shall not be unreasonably withheld, and shall not relieve Supplier of any of its obligations under this Agreement. Supplier shall be responsible for the performance or nonperformance of its Subcontractors as if such performance or nonperformance were that of Supplier. Supplier shall require all Subcontractors, as a condition to their engagement, to agree to be bound by provisions substantially the same as those included in this Agreement particularly the Sections entitled "Supplier Personnel," "Insurance," "Confidentiality and Information Protection," "Audit" and "Business Continuity." + +25.5 Supplier shall comply and shall cause its Representatives and Subcontractors to comply with all personnel, facility, safety and security policies, rules and regulations and other instructions of Bank of America, when performing work at a Bank of America facility or accessing any Bank of America systems or data, and shall conduct its work at Bank of America facilities or on Bank of America systems in such a manner as to avoid endangering the safety, or interfering with the convenience of, Bank of America Representatives or customers. Supplier understands that Bank of America operates under various laws and regulations that are unique to the security-sensitive banking industry. As such, persons engaged by Supplier to provide services under this Agreement are held to a higher standard of conduct and scrutiny than in other industries or business enterprises. Supplier agrees that its Representatives and Subcontractors providing services hereunder shall possess appropriate character, disposition and honesty. Supplier shall, to the extent permitted by law, exercise reasonable and prudent efforts to comply with the security provisions of this Agreement. + +25.6 Supplier shall not knowingly permit a Representative or Subcontractor to have access to the Confidential Information, premises, records or data of Bank of America when such Representative or Subcontractor: (a) has been convicted of a crime or has agreed to or entered into a pretrial diversion or similar program in connection with: (i) a dishonest act or a breach of trust, as set forth in Section 19 of the Federal Deposit Insurance Act, 12 U.S.C. 1829(a); or (ii) a felony: or (b) uses illegal drugs. Notwithstanding anything in this Agreement to the contrary, Proprietary to Bank of America Page 18 vTIP2010 + +Source: CARDLYTICS, INC., S-1, 1/12/2018 + + + + + + + +Supplier shall conduct at its expense background checks on its employees and those of its Subcontractors who will have access (whether physical, remote, or otherwise and whether on or off Bank of America premises) to Bank of America facilities, equipment, systems or data and such background checks shall comply with Bank of America procedures and requirements as set forth in SCHEDULE F to this Agreement and updated in writing delivered to Supplier from time to time. Supplier shall report to Bank of America on background checks done, in accordance with the requirements of SCHEDULE F and prior to such employee being granted such access. + +25.7 Supplier represents that it maintains comprehensive hiring policies and procedures which include, among other things, a background check for criminal convictions, and if requested by Bank of America, drug testing, all to the extent permitted by law. Supplier further represents that through its hiring policies and procedures including background checks, it endeavors to hire the best candidates with appropriate character, disposition, and honesty. In the event that supplier employs non-U.S. citizens to provide services hereunder, Supplier shall ensure that all such persons have and maintain appropriate visas to enable them to provide the services. + +25.8 Bank or America shall notify Supplier of any act of dishonesty or breach of trust committed against Bank of America. which may involve a Supplier Representative, or Subcontractor of which Bank of America becomes aware, and Supplier shall notify Bank of America if it becomes aware of any such offense. Following such notice, at the request of Bank of America and to the extent permitted by law, Supplier shall cooperate with investigations conducted by or on behalf of Bank of America. + + 26.0 INSURANCE + +26.1 Supplier shall at its own expense secure and continuously maintain, and shall require its Subcontractors to secure and continuously maintain, throughout the Term, the following insurance with companies qualified to do business in the jurisdiction in which the services will be performed and rating A-VII or better in the current Best's Insurance Reports published by A M. Best Company and shall, upon Bank of America's request, be furnished to Bank of America certificates and required endorsements evidencing such insurance. Bank of America shall be named as an ''Additional Insured" to the coverages described in Sections 26.2.3, 26.2.4, and 26.2.5 below for the purpose of protecting Bank of America from any expense and/or liability arising out of, alleged to arise out of, related to or connected with the Products provided by Supplier and/or its Subcontractors. The certificates shall state the amount of all deductibles and self-insured retentions and shall contain evidence that the policy or policies shall not be canceled or materially altered without at least thirty (30) calendar days prior written notice to Bank of America. Supplier and its Subcontractors shalt pay any and all costs which are incurred by Bank of America as a result of any such deductibles or self-insured retentions to the extent that Bank of America is named as an "Additional Insured," and to the same extent as if the policies contained no deductibles or self-insured retention. The insurance coverages and limits required to be maintained by Supplier and its Subcontractors shall be primary and non-contributory to insurance coverage, if any, maintained by Bank of America. Supplier and Proprietary to Bank of America its Subcontractors and their underwriters shall waive subrogation against Bank of America and shall cause their insurer(s) to waive subrogation against Bank of America. + +26.2 Insurance Coverages + +26.2.1 Worker's Compensation Insurance which shall fully comply with the statutory requirements of all applicable state and federal laws. + +26.2.2 Employers' Liability Insurance which limit shall be $1,000,000 per accident for Bodily injury and $1,000,000 per employee/aggregate for disease. Proprietary to Bank of America Page 19 vTIP2010 + +Source: CARDLYTICS, INC., S-1, 1/12/2018 + + + + + +26.2.3 Commercial General Liability Insurance with a minimum combined single limit of liability of $1,000,000 per occurrence and $2,000,000 aggregate for bodily Injury, death, property damage and personal injury, and specifically covering infringement of Intellectual Property Rights. This policy shall include products/completed operations coverage and shall also include contractual liability coverage. + +26.2.4 Business Automobile Liability Insurance covering all owned, hired and non-owned vehicles and equipment used by Supplier with a minimum combined single limit of liability of $1,000,000 for injury and/or death and/or property damage. + +26.2.5 Excess coverage with respect to Sections 26.2.2, 26.2.3 and 26.2.4 above with a per occurrence limit of $5,000,000. The limits of liability required In subsections 26.2.2, 26.2.3 and 26.2.4 may be satisfied by a combination of those policies with an Umbrella/Excess Liability policy. + +26.2.6 Technology Errors and Omissions Insurance with minimum limits of not less than $5,000,000, covering liabilities arising from errors, omission, etc., in rendering computer or information technology services including but not limited to (1) systems analysis (2) systems programming (3) data processing (4) systems integration (5) outsourcing including outsourcing development and design (6) systems design, consulting, development and modification (7) training services relating to computer software or hardware (8) management, repair and maintenance of computer products, networks and systems (9) marketing, selling, servicing, distributing, installing and maintaining computer hardware or software (10) data entry, modification, verification, maintenance, storage, retrieval or preparation of data output. + +26.2.7 Supplier shall be responsible for loss to bank property and customer property, directly or indirectly, and shall maintain Fidelity Bond or Crime coverage for the dishonest acts of its employees in a minimum amount of $5,000,000. Supplier shall endorse such policy to include a "Client Coverage" or "Joint Payee Coverage" endorsement Bank of America shall be named as "Loss Payee, As Their Interest May Appear'' in such Fidelity Bond. + +26.3 The failure of Bank of America to obtain certificates, endorsements, or other forms of insurance evidence from Supplier and its Subcontractors is not a waiver by Bank of America of any requirements for the Supplier and its Subcontractors to secure and continuously maintain the specified coverages. Supplier shall notify and shall advise its Subcontractors to notify insurers of the coverages required hereunder. Bank of America's acceptance of certificates and/or endorsements that in any respect do not comply with the requirements of this Section does not release the Supplier and its Subcontractors from compliance herewith. Should Supplier and/or its Subcontractors fail to secure and continuously maintain the insurance coverage required under this Agreement, Supplier shall itself be responsible to Bank of America for all the benefits and protections that would have been provided by such coverage, including without limitation, the defense and indemnification protections. + + 27.0 CONFIDENTIALITY AND INFORMATION PROTECTION + +27.1 The term "Confidential Information" shall mean this Agreement and all data, trade secrets, business information and other information of any kind whatsoever that a Party ("Discloser'') discloses, in writing, orally, visually or in any other medium, to the other Party ("Recipient") or to which Recipient obtains access and that relates to Discloser or, in the case of Supplier, to Bank of America or its Representatives, customers, third-party vendors or licensors. Confidential Information includes Associate Information, Customer information and Consumer information, as defined in the Section entitled ''Definitions." A "writing" shall include an electronic transfer of information by e-mail, over the internet or otherwise. + +27.2 Supplier acknowledges that Bank of America has a responsibility to its customers and other consumers using Its services to keep Associate Information, Customer Information and Consumer Information strictly confidential. Each of the Parties, as Recipient, hereby agrees that it will not, and will cause its Representatives, consultants, Affiliates and independent contractors not to disclose Confidential Information of the other Party, including Associate Information, Proprietary to Bank of America Page 20 vTIP2010 + +Source: CARDLYTICS, INC., S-1, 1/12/2018 + + + + + + + +Customer Information and Consumer Information, during or after the Term of this Agreement, other than on a "need to know" basis and then only to: (a) Affiliates of Bank of America; (b) Recipient's employees or officers; (c) Affiliates of Recipient, its independent contractors at any level, agents and consultants, provided that all such persons are subject to a written confidentiality agreement that shall be no less restrictive than the provisions of this Section; (d) pursuant to the exceptions set forth in 15 U.S.C 6802(e) and accompanying regulations, which disclosures are made in the ordinary course of business and (e) as required by law or as otherwise expressly permitted by this Agreement. Recipient shall not use or disclose Confidential Information of the other Party for any purpose other than to carry out this Agreement. Recipient shall treat Confidential Information of the other Party with no less care than it employs for its own Confidential Information of a similar nature that it does not wish to disclose, publish or disseminate, but not less than a reasonable level of care. Upon expiration or termination of this Agreement for any reason or at the written request of Bank of America during the Term of this Agreement. Supplier shall promptly return to Bank of America or destroy according to the Information Destruction Requirements described within SCHEDULE E, "Information Security . at Bank of America's election, all Bank of America Confidential Information in the possession of Supplier or Supplier's Subcontractors, subject to and in accordance with the terms and provisions of this Agreement. + +27.3 To the extent legally permitted, Recipient shall notify Discloser of any actual or threatened requirement of law to disclose Confidential Information promptly upon receiving actual knowledge thereof and shall cooperate with Discloser's reasonable, lawful efforts to resist, limit or delay disclosure. Nothing in this Section shall require any notice or other action by Bank of America in connection with requests or demands for Confidential Information by bank examiners. + +27.4 Supplier shall not remove or download from Bank of America's premises or systems, the original or any reproduction of any notes, memoranda, files, records, or other documents, whether in tangible or electronic form, containing Bank of America's Confidential Information or any document prepared by or on behalf of Supplier that contains or is based on Bank of America's Confidential Information, without the prior written consent of an authorized Representative of Bank of America. Any document or media provided by an authorized Bank of America Representative or notes taken to document discussions with Bank of America Representatives pertaining to the Products provided hereunder will be deemed to fall outside this consent requirement unless otherwise stated by the Bank of America Representative. + +27.5 With the exception of Associate Information, Customer Information and Consumer Information, the obligations of confidentiality in this Section shall not apply to any information that (i) Recipient rightfully has in its possession when disclosed to it, free of obligation to Discloser to maintain its confidentiality; (ii) Recipient independently develops without access to Discloser's Confidential Information; (iii) is or becomes known to the public other than by breach of this Section or (iv) is rightfully received by Recipient from a third party without the obligation of confidentiality. Any combination of Confidential Information disclosed with information not so classified shall not be deemed to be within one of the foregoing exclusions merely because individual portions of such combination are free of any confidentiality obligation or are separately known in the public domain. + +27.6 Bank of America may disclose Confidential Information of Supplier to independent contractors for the purpose of further handling, processing, modifying and adapting the Products for use by or for Bank of America, provided that such independent contractors have agreed to observe in substance the obligations of Bank of America set forth in this Section. + +27.7 All Confidential Information disclosed by Bank of America and any results of processing such Confidential Information or derived in any way therefrom shall at all times remain the property of Bank of America. Supplier shall have the responsibility for and bear all risk of loss or damage to Confidential Information and damages resulting from improper or inaccurate processing of such data arising from the negligence or willful misconduct of Supplier, its Representatives or Subcontractors. Proprietary to Bank of America Page 21 vTIP2010 + +Source: CARDLYTICS, INC., S-1, 1/12/2018 + + + + + +27.8 Supplier acknowledges that Bank of America is required to comply with the information security standards required by the Gramm-Leach- Bliley Act (15 U.S.C. 6801, 6805(b)(1)) and the regulations issued thereunder (12 C.F.R. Part 40), the Fair and Accurate Credit Transactions Act (15 U.S.C. 1681, 1681w) and the regulations issued thereunder (12 C.F.R. Parts 30 and 41) and with other statutory, legal and regulatory requirements (collectively, "Privacy Laws'') If applicable, Supplier shall make commercial best efforts to assist Bank of America to so comply and shall comply and conform with applicable Privacy Laws, as amended from time to time, and with the Bank of America policies for information protection as modified by Bank of America from time to time. + +27.9 Bank of America may, in its sole discretion and at any time during the Term of this Agreement, suspend, revoke or terminate Supplier's right to receive Confidential Information upon written notice to Supplier. Upon receipt of that notice, Supplier shall (i) immediately stop accessing and/or accepting Confidential Information and (ii) promptly return to Bank of America or destroy according to the Information Destruction Requirements described within SCHEDULE E, "Information Security," at Bank of America's election, all Bank of America Confidential Information in the possession of Supplier or Suppliers Subcontractors, subject to and in accordance with the terms and provisions of this Agreement. + +27.10 As a condition of access to the Confidential Information of Bank of America, Supplier shall make available to Bank of America a copy of its written Information Security Program for evaluation. The program shall be designed to: + + A. Ensure the security, integrity and confidentiality of Confidential Information; + + B. Protect against any anticipated threats or hazards to the security or integrity of such Confidential Information; + + C. Protect against unauthorized access to or use of such Confidential Information that could result in substantial harm orinconvenience to the person or entity that is the subject of such Confidential Information; and + + D. Ensure the proper disposal of such Confidential Information. + +27.11 At the request of Bank of America, Supplier shall make commercially reasonable modifications to its Information Security Program or to the procedures and practices thereunder to conform at least to the Bank Security Requirements. Supplier shall require any Subcontractors and other persons or entities who provide services to Supplier for delivery to Bank of America directly or indirectly or who hold Confidential Information to implement and administer an information protection program and plan that complies with Bank Security Requirements. Supplier shall include or shall cause to be included in written agreements with such Subcontractors or other persons or entities substantially the terms of this Section and the provisions of SCHEDULE E. + +27.12 One aspect of the determination of Supplier compliance with Bank Security Requirements is a review of Supplier Security Controls. As a condition precedent to performance under this Agreement, Supplier agrees to satisfy the following validation requirements: + + A. Participation in Bank of America's Supplier testing and assessment process including the completion of online and/or on-siteassessment(s), as appropriate, and remediation of any findings; Proprietary to Bank of America Page 22 vTIP2010 + +Source: CARDLYTICS, INC., S-1, 1/12/2018 + + + + + + B. Periodic discussions between Bank of America personnel and Supplier Information Technology security personnel to reviewSupplier Security Controls; and + + C. Delivery to Bank of America of network diagrams depicting Supplier perimeter controls and security policies and processes relevant to the protection of Confidential Information. Examples of these policies include, but are not limited to, access control, physical security, patch management. password standards, encryption standards, and change control. + +27.13 During the course of performance under this Agreement, Supplier shall ensure the following: + + A. Adequate governance and risk assessment processes are in place to maintain controls over Confidential Information. A security awareness program must be in place or implemented that communicates security policies to all Supplier (and Supplier Subcontractor(s)) personnel having access to Confidential Information. + + + +B. Notification to Bank of America of changes that may impact the security of Confidential Information. Such changes requiring notification include, by way of example and not limitation, outsourcing of computer networking, data storage, management and processing or other information technology functions or facilities and the implementation of external web-enabled (internet) access to Confidential Information. + + C. Use of strong, industry-standard encryption of Confidential Information transmitted over public networks (e.g. internet,non-dedicated leased lines) and backup tapes residing at off-site storage facilities. + +27.14 Bank of America reserves the right to monitor Supplier-maintained platforms that reside on the Bank of America network. The Supplier may be required, at the expense of Bank of America, to assist with installation, support and problem resolution of Bank of America owned equipment or processes, or to provide an information feed from the Supplier Platform to the Bank of America monitoring processes. + +27.15 Supplier shall deliver an updated information Security Program or confirm that no changes have been made to the Information Security Program annually. + +27.16 Supplier understands and acknowledges its obligation to adhere to the Payment Card Industry Data Security Standards (PCI DSS) for the protection of cardholder data throughout the Term of the contract and any Renewal Terms. The PCI DSS may be found at www.pcisecuritystandards.org. Supplier further understands that it is responsible for the security of cardholder data In its possession or control or in the possession or control of any Subcontractors that it engages to perform under this contract. Such Subcontractors must be identified to and approved by Bank of America in writing prior to sharing cardholder data with the Subcontractor. In support of this obligation, Supplier shall provide appropriate documentation to demonstrate compliance with PCI DSS standards by Supplier and all identified Subcontractors. Failure to discharge this obligation may be considered by Bank of America to be a Termination Event under (a) of subsection 5.2. + + 28.0 INDEMNITY + +28.1 Supplier shall indemnify, defend, and hold harmless Bank of America and its Representatives, successors, permitted assigns and customers from and against any and all claims or legal actions of whatever kind or nature that are made or threatened by any third party and an related losses, expenses, damages, costs and liabilities, including reasonable attorneys' fees and expenses incurred in investigation, defense or settlement ("Damages"), which arise out of, are alleged to arise out of, or relate to the following: (a) any negligent act or omission or willful misconduct by Proprietary to Bank of America Page 23 vTIP2010 + +Source: CARDLYTICS, INC., S-1, 1/12/2018 + + + + + + Supplier, its Representatives or any Subcontractor engaged by Supplier in the performance of Supplier's obligations under this Agreement;or (b) any breach in a representation, covenant or obligation of Supplier contained in this Agreement + +28.2 Supplier shall defend or settle at its expense any threat, claim, suit or proceeding arising from or alleging infringement, misappropriation or other violation of any Intellectual Property Rights or any other rights of any third party by Products, Work Product or services furnished under this Agreement Supplier shall indemnify and hold Bank of America, its Affiliates and each of their Representatives, successors, permitted assigns and customers harmless from and against and pay any Damages. including royalties and license fees attributable to such threat, claim, suit or proceeding. + + + +A. If any Product, Work Product or service furnished under this Agreement, including, without limitation, software, system design, equipment or Documentation, becomes, or in Bank of America's or Supplier's reasonable opinion is likely to become, the subject of any claim, suit, or proceeding arising from or alleging facts that if true would constitute infringement, misappropriation or other violation of, or in the event of any adjudication that such Work Product or Product infringes, misappropriates or otherwise violates any Intellectual Property Rights or any other rights of a third party, Supplier shall promptly notify Bank of America and, at Supplier's expense, Supplier shall take the following actions in the listed order of preference: (i) secure for Bank of America the right to continue using the Work Product or Product; or if commercially reasonable efforts are unavailing, (ii) replace or modify the Work Product or Product to make it noninfringing; provided, however, that such modification or replacement shall not degrade the operation or performance of the Work Product or Product. + + B. The indemnity in the preceding provision shall not extend to any claim of infringement resulting solely from Bank of America'sunauthorized modification or use of the Work Product or Product. + +28.3 Bank of America shall give Supplier notice of, and the Parties shall cooperate in, the defense of any such claim, suit or proceeding, including appeals, negotiations and any settlement or compromise thereof, provided that Bank of America must approve the terms of any settlement or compromise that may impose any unindemnified or nonmonetary liability on Bank of America. + + 29.0 LIMITATION OF LIABILITY + +29.1 Neither Party shall be liable to the other for any special, indirect, incidental, consequential, punitive or exemplary damages, including, but not limited to, lost profits, even if such Party alleged to be liable has knowledge of the possibility of such damages, provided, however, that the limitations set forth in this Section shall not apply to or in any way limit the obligations of the Section entitled "Indemnity," the Section entitled "Confidentiality and Information Protection," or Supplier's gross negligence or willful misconduct. + + 30.0 DAMAGE TO BANK OF AMERICA SYSTEMS + +30.1 Supplier represents and warrants that the Product and any media used to distribute it contain no computer instructions, circuitry or other technological means ("Harmful Code") whose purpose is to disrupt, damage or interfere with Bank of America's use of its computer and telecommunications facilities for their commercial, test or research purposes. Harmful Code shall include, without limitation, any automatic restraint, time-bomb, trap-door, virus, worm, Trojan horse or other harmful code or instrumentality that will cause the Products or any other Bank of America software, hardware or system to cease to operate or to fail to conform to its specifications. Supplier shall indemnify Bank of America and hold Bank of America harmless from all claims, losses, damages and expenses, including attorneys' fees, arising from the presence of Harmful Code in or with the Product or contained on media delivered by Supplier. Supplier further represents and warrants that it will not introduce any Harmful Code, into any computer or electronic data storage system used by Bank of America. Proprietary to Bank of America Page 24 vTIP2010 + +Source: CARDLYTICS, INC., S-1, 1/12/2018 + + + + + +31.0 SUPPLIER DIVERSITY + +31.1 Supplier acknowledges and supports the Bank of America Supplier Diversity efforts supporting minority, woman and disabled-owned business enterprises and its commitment to the participation of minority, woman and disabled-owned business enterprises in its procurement of goods and services. + +31.2 Definitions: For purposes of this Agreement, the following are the definitions of "Minority-Owned Business Enterprise," "Minority Group," "Woman-Owned Business Enterprise," "Disabled-Veteran-Owned Business Enterprise" and "Disabled-Owned Business Enterprise." + + A. "Minority-Owned Business Enterprise" is recognized as a "for profit" enterprise, regardless of size, physically located in the United States or its trust territories, which is at least fifty-one (51%) percent owned, operated and controlled, by one or more member(s) of a Minority Group who maintain United States citizenship. + + B. "Minority Group" means African Americans, Hispanic Americans, Native Americans (American Indians, Eskimos, Aleuts, and native Hawaiians), Asian-Pacific Americans, and other minority group as recognized by the United States Small Business Administration Office of Minority Small Business and Capital ownership Development. + + C. "Woman-Owned Business Enterprise" is recognized as a "for profit" enterprise, regardless of size, located in the United States or itstrust territories, which is at least fifty-one (51%) percent owned, operated and controlled by a female of United States citizenship. + + + +D. "Disabled Veteran-Owned Business Enterprise" is recognized as a "for profit" enterprise, regardless of size, located In the United States or its trust territories, which is at least fifty-one (51%) percent owned, operated, and controlled by a disabled veteran. The disabled veteran's ownership and control shall be real and continuing and not created solely to take advantage of special or set aside programs aimed at supplier diversity. The Association of Service Disabled Veterans, www.asdv.org provides certification for this category of business owners throughout the United States. + + + +E. "Disabled-Owned Business Enterprise" is recognized as a "for profit" enterprise, regardless of size, located in the United States or its trust territories, which is at least fifty-one (51%) percent owned, operated and controlled, by an individual of United States citizenship with a permanent mental or physical impairment that substantially limits one or more of the major life activities and which has a significant negative impact upon the company's ability to successfully compete. The ownership and control shall be real and continuing and not created solely to take advantage of special or set aside programs aimed at supplier diversity. Due to the absence of a certifying agency for this category of business owners, the Disabled-Owned Business Enterprise must complete an affidavit and provide supporting documentation to be eligible for consideration towards diverse supplier participation. + +31.3 In addition to the above criteria to qualify as a Minority, Woman or Disabled-Owned Business Enterprise under this Agreement, the diverse supplier must be certified by an agency acceptable to Bank of America. + +31.4 Participation Representation: Supplier represents it is not a Minority-, Woman-, Disabled- or Veteran- Disabled Owned Business Enterprise. Proprietary to Bank of America Page 25 vTIP2010 + +Source: CARDLYTICS, INC., S-1, 1/12/2018 + + + + + +32.0 ENVIRONMENTAL INITIATIVE + +32.1 Supplier acknowledges that Bank of America encourages each supplier with which it enters into an agreement for the provision of goods or services to use, consistent with the efficient performance of such agreements, recycled paper goods and other environmentally preferable products, and to implement and adhere to other environmentally beneficial policies and practices. Supplier represents and warrants that Supplier uses environmentally beneficial practices specific to its industry that meet at least the minimum standard recommended for its industry. Upon Bank of America's request, Supplier will provide written information on its environmental policies and procedures. + + 33.0 AUDIT + +33.1 Supplier shall maintain at no additional cost to Bank of America, in a reasonably accessible location, all Records pertaining to its Products and services provided to Bank of America under this Agreement for a period of seven (7) years or as required by law, if longer. Such Supplier Records referenced above may be inspected, audited and copied by Bank of America, its Representatives or by federal or state agencies having jurisdiction over Bank of America, during normal business hours and at such reasonable times as Bank of America and Supplier may determine. Records available for review shall exclude any records pertaining to Supplier's other customers deemed proprietary and confidential and Supplier confidential and proprietary records not associated with the Products and services provided under this Agreement. Supplier will give prior notice to Bank of America of requests by federal or state authorities to examine Supplier's Bank of America Records. At Bank of America's written request, Supplier shall reasonably cooperate with Bank of America in seeking a protective order with respect to such Records. + +33.2 Supplier shall provide at its expense on an annual basis, a copy of the latest SAS70 (Statement on Auditing Standards No. 70, Service Organizations) Type II independent audit firm report for facilities not managed by Bank of America that are used to provide Products under this Agreement. If not available, Supplier, at its sole cost and expense, will engage a nationally recognized certified public accounting firm to conduct the audit and prepare applicable reports. Each report will cover a minimum six (6) calendar month period each calendar year during the Term. Bank of America reserves the right to expand the scope of the controls to be covered in any SAS70-Type II audit report prepared during the Term. Supplier shall provide Bank of America with the scope of the audit and a complete copy of each report prepared in connection with each such audit within thirty (30) calendar days after it receives such report. + +33.3 Supplier shall provide a copy of the latest operational audit for facilities not managed by Bank of America that are used to provide services under this Agreement. If necessary, Supplier, at its sole cost and expense, will engage a nationally recognized certified public accounting firm to conduct the audit and prepare applicable reports. Each report will cover a minimum six (6) calendar month period each calendar year during the Term. Such audits may be on a rotating site basis where operations and procedures of Supplier services provided to Bank of America are in multiple locations in order to confirm that Supplier is in compliance in all aspects of the Agreement Supplier shall provide Bank of America with a copy of each report prepared in connection with each such audit within thirty (30) calendar days after it receives such report. + +33.4 During regular business hours but no more frequently than once a year, Bank of America may, at Its sole expense, perform a confidential audit of Supplier's operations as they pertain to the Products or services provided under this Agreement. Such audits shall be conducted on a mutually agreed upon date (which shall be no more than ten (10) Business Days after Bank of America's written notice of time, location and duration), subject to reasonable postponement by Supplier upon Supplier's reasonable request, provided, however, that no such postponement shall exceed twenty (20) Business Days. Bank of America will provide Supplier a summary of the findings from each report prepared in connection with any such audit and discuss results, including remediation plans. If audit results find Supplier Is not in substantial compliance with the Proprietary to Bank of America Page 26 vTIP2010 + +Source: CARDLYTICS, INC., S-1, 1/12/2018 + + + + + + + +requirements of this Agreement, then Bank of America shall be entitled, at Supplier's expense, to perform up to two (2) additional such audits in that year in accordance with the procedure set forth in this Section. Supplier agrees to promptly take action at Its expense to correct those matters or items identified in any such audit that require correction. Failure to correct such matters shall be considered a material breach of this Agreement. + +33.5 Supplier will provide reasonable access to Bank of America's federal and state governmental regulators (at a minimum, to the extent required by law), at Bank of America's expense, to Bank of America's Records held by Supplier and to the procedures and facilities of Supplier relating to the Products and services provided under this Agreement Pursuant to 12 U.S.C. 1867(c), the performance of such services will be subject to regulation and examination by the appropriate federal banking agency to the same extent as if the services were being performed by Bank of America itself. Supplier acknowledges and agrees that regulatory agencies may audit Supplier's performance at any time during normal business hours and that such audits may include both methods and results under this Agreement. + +33.6 Upon prior written notice and at a mutually acceptable time, Bank of America personnel or its Representatives (e.g., external audit consultants) may audit, test or inspect Supplier's Information Security Program and its facilities to assure Bank of America's data and Confidential Information are adequately protected. This right to audit is in addition to the other audit rights or assessments granted herein. Bank of America will determine the scope of such audits, tests or inspections, which may extend to Supplier's Subcontractors and other Supplier resources (other systems, environmental support, recovery processes, etc.) used to support the systems and handling of Confidential Information. Supplier will inform Bank of America of any internal auditing capability it possesses and permit Bank of America's personnel to consult on a confidential basis with such auditors at all reasonable times. Bank of America may provide Supplier a summary of the findings from each report prepared in connection with any such audit and discuss results, including any remediation plans. Without limiting any other rights of Bank of America herein, if Supplier is In breach or otherwise not compliant with any of the provisions set forth in the Section of this Agreement entitled "Confidentiality and Information Protection" and/or SCHEDULE E, then Bank of America may conduct additional audits. + +33.7 In addition to the requirements under this Section 33.0 and upon Bank of America's request, Supplier shall deliver to Bank of America, within thirty (30) calendar days after its receipt by its board of directors or senior management. a copy of any preliminary or final report of audit of Supplier by any third-party auditors retained by Supplier, including any management letter such auditors submit, and on any other audit or inspection upon which Bank of America and Supplier may mutually agree. + + 34.0 NON-ASSIGNMENT + +34.1 Neither Party may assign this Agreement or any of the rights hereunder or delegate any of its obligations hereunder, without the prior written consent of the other Party, and any such attempted assignment shall be void, except that Bank of America or any permitted Bank of America assignee may assign any of its rights and obligations under this Agreement (including, without limitation, any individual Order) to any Bank of America Affiliate, the surviving corporation with or into which Bank of America or such assignee may merge or consolidate or an entity to which Bank of America or such assignee transfers all, or substantially all, of its business and assets. Bank of America may not unreasonably withhold its consent of assignment in the event the supplier merges or consolidates with another entity. + + 35.0 GOVERNING LAW + +35.1 This Agreement shall be governed by the internal laws, and not by the laws regarding conflicts of laws, of the State of North Carolina. Each Party hereby submits to the exclusive jurisdiction of the courts of such state, and waives any objection to venue with respect to actions brought in such courts. This provision shall not be construed to conflict with the provisions of the Section entitled "Mediation/Arbitration." Proprietary to Bank of America Page 27 vTIP2010 + +Source: CARDLYTICS, INC., S-1, 1/12/2018 + + + + + +36.0 DISPUTE RESOLUTION + +36.1 The following procedure will be adhered to in all disputes arising under this Agreement which the Parties cannot resolve informally through their Relationship Managers. The aggrieved Party shall notify the other Party in writing of the nature of the dispute with as much detail as possible about the deficient performance of the other Party. The Relationship Managers shall meet (in person or by telephone) within seven (7) calendar days (or other mutually agreed upon date) after the date of the written notification to reach an agreement about the nature of the deficiency and the corrective action to be taken by the respective Parties. If the Relationship Managers do not meet or are unable to agree on corrective action, senior managers of the Parties having authority to resolve the dispute without the further consent of any other person ("Management") shall meet or otherwise act to facilitate an agreement within fourteen (14) calendar days (or other mutually agreed upon date) of the date of the written notification. If Management do not meet or cannot resolve the dispute or agree upon a written plan of corrective action to do so within seven (7) calendar days (or other mutually agreed upon date) after their initial meeting or other action, or if the agreed-upon completion dates in the written plan of corrective action are exceeded, either Party may request mediation and/or arbitration as provided for in this Agreement. Except as otherwise specifically provided, neither Party shall initiate arbitration, mediation or litigation unless and until this dispute resolution procedure has been substantially compiled with or waived. Failure of a Party to fulfill its obligations in this Section, including failure to meet timely upon the other Party's notice, shall be deemed such a waiver. + + 37.0 MEDIATION/ARBITRATION + +37.1 If the Parties are unable to resolve a dispute arising out of or relating to this Agreement in accordance with the Section entitled "Dispute Resolution," the Parties will in good faith attempt to resolve such dispute through non-binding mediation. The mediation shall be conducted before a mediator acceptable to both sides, who shall be an attorney or retired judge practicing in the areas of banking and/or information technology law. The mediation shall be held In Charlotte, N.C., provided, however, a dispute relating to infringement of Intellectual Property Rights or the Section entitled "Confidentiality and Information Protection" shall not be subject to this Section entitled "Mediation/Arbitration." + +37.2 Any controversy or claim, other than those specifically excluded, between or among the Parties not resolved through mediation under the preceding provision, shall at the request of a Party be determined by arbitration. The arbitration shall be conducted by one independent arbitrator who shall be an attorney or retired judge practicing in the areas of banking and/or Information technology law. The arbitration shall be held in Charlotte, N.C. in accordance with the United States Arbitration Act (9 U.S.C. 1 et seq.), notwithstanding any choice of law provision in this Agreement, and under the auspices and the Commercial Arbitration Rules of the American Arbitration Association. + +37.3 Consistent with the expedited nature of arbitration, each Party will, upon the written request of the other Party, promptly provide the other with copies of documents relevant to the issues raised by any claim or counterclaim on which the producing Party may rely in support of or in opposition to any claim or defense. At the request of a Party, the arbitrator shall have the discretion to order examination by deposition of witnesses to the extent the arbitrator deems such additional discovery relevant and appropriate. Depositions shall be limited to a maximum of three (3) per Party and shall be held within thirty (30) calendar days of the making of a request. Additional depositions may be scheduled only with the permission of the arbitrator, and for good cause shown. Each deposition shall be limited to a maximum of three (3) hours duration. All objections are reserved for the arbitration hearing except for objections based on privilege and proprietary or confidential information. Any dispute regarding discovery, or the relevance or scope thereof, shall be determined by the arbitrator, which determination shall be conclusive. All discovery shall be completed within sixty (60) calendar days following the appointment of the arbitrator. Proprietary to Bank of America Page 28 vTIP2010 + +Source: CARDLYTICS, INC., S-1, 1/12/2018 + + + + + +37.4 The arbitrator shall give effect to statutes of limitation in determining any claim, and any controversy concerning whether an issue is arbitrable shall be determined by the arbitrator. The arbitrator shall follow the law in reaching a reasoned decision and shall deliver a written opinion setting forth findings of fact, conclusions of law and the rationale for the decision. The arbitrator shall reconsider the decision once upon the motion and at the expense of a Party. The Section of this Agreement entitled "Confidentiality and Information Protection" shall apply to the arbitration proceeding, all evidence taken, and the arbitrator's opinion, which shall be Confidential Information of both Parties. Judgment upon the decision rendered by the arbitrator may be entered in any court having jurisdiction. + +37.5 No provision of this Section shall limit the right of a Party to obtain provisional or ancillary remedies from a court of competent jurisdiction before, after, or during the pendency of any arbitration. The exercise of a remedy does not waive the right of either Party to resort to arbitration. The institution and maintenance of an action for judicial relief or pursuit of a provisional or ancillary remedy shall not constitute a waiver of the right of either Party to submit the controversy or claim to arbitration if the other Party contests such action for judicial relief. + + 38.0 NON-EXCLUSIVE NATURE OF AGREEMENT + +38.1 Supplier agrees that it shall not be considered Bank of America's exclusive provider of any goods or services provided hereunder. Bank of America retains the unconditional right to utilize other vendors in the provision of services and products whether or not similar to the services and Products described in this Agreement. + + 39.0 OWNERSHIP OF WORK PRODUCT + +39.1 Bank of America will own exclusively all Work Product and Supplier hereby assigns to Bank of America all right, title and interest (including all Intellectual Property Rights) in the Work Product. Work Product, to the extent permitted by law, shall be deemed "works made for hire" (as that term is defined in the United States Copyright Act). Supplier shall provide Bank of America upon request with all assistance reasonably required to register, perfect or enforce such right, title and interest, including providing pertinent information and, executing all applications, specifications, oaths, assignments and all other instruments that Bank of America shall deem necessary. Supplier shall enter into agreements with all of its Representatives and Subcontractors necessary to establish Bank of America's sole ownership in the Work Product. Bank of America acknowledges Supplier's and its licensors' claims of proprietary rights in preexisting works of authorship and other intellectual property ("Pre-existing IP") Supplier uses in its work pursuant to this Agreement. Bank of America does not claim any right not expressly granted by this Agreement in such Pre-existing IP, which shall not be deemed Work Product, even if incorporated with Work Product in the Product Supplier delivers to Bank of America. Unless otherwise agreed in an Order, Supplier grants Bank of America a perpetual, worldwide, irrevocable, nonexclusive royalty free license to any Pre-existing IP embedded in the Work Product, which shall permit Bank of America and any transferee or sublicensee of Bank of America, subject to the restrictions in this Agreement, to make, use, import, reproduce, display, distribute, make derivative works and modify such Pre-existing IP as necessary or desirable for the use of the Work Product. + +39.2 Supplier shall promptly notify Bank of America in writing, of any threat, or the filing of any action, suit or proceeding, against Supplier, its Affiliates, Subcontractors or Representatives, (i) alleging infringement, misappropriation or other violation of any Intellectual Property Right related to any Product, Work Product or service furnished under this Agreement, or (ii) in which an adverse decision would reasonably be expected to have a material adverse effect on the Supplier or the use by Bank of America of the Products, Work Product or services furnished under this Agreement. Proprietary to Bank of America Page 29 vTIP2010 + +Source: CARDLYTICS, INC., S-1, 1/12/2018 + + + + + +39.3 At all times during the Term, upon request from Bank of America and upon termination of this Agreement for any reason, Supplier shall provide immediately to Bank of America the then-current version of any Work Product in Supplier's possession. + +39.4 Supplier understands and acknowledges that Bank of America may (i) manage, modify, maintain and update pre-existing data and information, and (ii) generate, manage, modify, maintain and update additional data and information (collectively, "Bank of America Data") using the Software. Bank of America Data will be treated as Bank of America Confidential Information and Bank of America shall retain all right, title and interest in and to all Bank of America Data. + +39.5 Bank of America shall have the right to interface the Software and to use it in conjunction with other software, programs, routines and subroutines developed or acquired by Bank of America. Supplier shall have no ownership interest in any other software, program, routine or subroutine developed by Bank of America or acquired by Bank of America from a third party by virtue of its having been interfaced with or used in conjunction with any Software. + + 40.0 MISCELLANEOUS + +40.1 Bank of America and Supplier represent that they are equal opportunity employers and do not discriminate in employment of persons or awarding of subcontracts because of a person's race, sex, age, religion, national origin, veteran or handicap status. Supplier is aware of and fully informed of Supplier's responsibilities and agrees to the provisions under the following: (a) Executive Order 11246, as amended or superseded in whole or in part, and as contained in Section 202 of the Executive Order as found at 41 C.F.R. § 60-1.4(a)(1-7); (b) Section 503 of the Rehabilitation Act of 1973 as contained in 41 C.F. R. § 60- 741.4; and (c) The Vietnam Era Veterans' Readjustment Assistance Act of 1974 as contained in 41 C.F.R. § 60-250.4. + +40.2 Section headings are included for convenience or reference only and are not intended to define or limit the scope of any provision of this Agreement and should not be used to construe or interpret this Agreement. + +40.3 No delay, failure or waiver of either Party's exercise or partial exercise of any right or remedy under this Agreement shall operate to limit, impair, preclude, cancel, waive or otherwise affect such right or remedy. Any waiver by either Party of any provision of this Agreement shall not imply a subsequent waiver of that or any other provision of this Agreement. + +40.4 If any provision of this Agreement is held invalid, illegal or unenforceable, the validity, legality or enforceability of the remaining provisions shall in no way be affected or impaired thereby. + +40.5 No amendments of any provision of this Agreement shall be valid unless made by an instrument in writing signed by both Parties specifically referencing this Agreement. Notwithstanding anything therein to the contrary, the terms of any Order to this Agreement shall supplement and not replace or amend the terms or provisions of this Agreement and the terms and provisions of this Agreement shall control in the event of any conflict between such terms thereof and the terms and provisions of this Agreement and such conflict shall be resolved in favor of the express terms and provisions of this Agreement. The terms and provisions of this Agreement shall be incorporated by reference into any Order to this Agreement. + +40.6 Anything in this Agreement to the contrary notwithstanding, the Parties hereby agree that thirty (30) calendar days after written notice by Bank of America of any amendment to this Agreement for compliance with a change in federal law, rule or regulation affecting financial services companies or the suppliers of financial services companies, this Agreement shall be amended by such notice and the amendment contained therein and without need for further action of the Parties, and the Agreement as amended thereby, shall be enforceable against the Parties, their successors and assigns. The notice provided hereunder shall set forth such change and provide Proprietary to Bank of America Page 30 vTIP2010 + +Source: CARDLYTICS, INC., S-1, 1/12/2018 + + + + + + the relevant amendment to the Agreement. Bank of America shall have the right to terminate immediately the Agreement, without furtherliability to Supplier, in the event of Supplier's failure to comply with the terms and conditions of any such amendment to the Agreement. + +40.7 This Agreement may be executed by the Parties in one or more counterparts, and each of which when so executed shall be an original but all such counterparts shall constitute one and the same instrument. + +40.8 The remedies under this Agreement shall be cumulative and are not exclusive. Election of one remedy shall not preclude pursuit of other remedies available under this Agreement or at law or in equity. In arbitration a Party may seek any remedy generally available under the governing law. + +40.9 To the maximum extent permitted by the governing law, this Agreement and the transactions called for herein shall not be governed or affected by any version of the Uniform Computer Information Transactions Act enacted in any jurisdiction. + +40.10 Notwithstanding the general rules of construction, both Bank of America and Supplier acknowledge that both Parties were given an equal opportunity to negotiate the terms and conditions contained in this Agreement, and agree that the identity of the drafter of this Agreement is not relevant to any interpretation of the terms and conditions of this Agreement. + +40.11 All notices or other communications required under this Agreement shall be given to the Parties in writing to the applicable addresses set forth on the signature page, or to such other addresses as the Parties may substitute by written notice given in the manner prescribed in this Section as follows: (a) by first class, registered or certified United States mail, return receipt requested and postage prepaid, (b) over-night express courier or (c) by hand delivery to such addresses, Such notices shall be deemed to have been duly given (i) five (5) Business Days after the date of mailing as described above, (ii) one (1) Business Day after being received by an express courier during business hours, or (iii) the same day if by hand delivery. + +40.12 Wherever this Agreement requires either Party's approval or consent such approval or consent shall not be unreasonably withheld or delayed. + +40.13 Unless the Parties otherwise agree in writing, all services to be provided hereunder shall be processed and/or provided, whether in part or in whole, by Supplier, its employees, Representatives and/or Subcontractors on and from a location or locations in one (1) or more of the fifty (50) states of the United States of America only, all subject to applicable laws and regulations. + +40.14 This Agreement shall be binding upon, and inure to the benefit of, the Parties and their respective permitted successors and assigns. Except as expressly set forth in this Agreement and with the exception of the Affiliates of Bank of America, the Parties do not intend the benefits of this Agreement to inure to any third party, and nothing contained herein shall be construed as creating any right, claim or cause of action in favor of any such other third party, against either of the Parties hereto. + +40.15 Neither Party shall issue any media releases, public announcements and public disclosures, relating to this Agreement or use the name or logo of the other Party, including, without limitation, in promotional or marketing material or on a list of customers, provided that nothing in this paragraph shall restrict any disclosure required by legal, accounting or regulatory requirements beyond the reasonable control of the releasing Party. Proprietary to Bank of America Page 31 vTIP2010 + +Source: CARDLYTICS, INC., S-1, 1/12/2018 + + + + + +41.0 ENTIRE AGREEMENT + +41.1 This Agreement, the Schedules, and other documents Incorporated herein by reference, is the final, full and exclusive expression of the agreement of the Parties and supersedes all prior agreements, understandings, writings, proposals, representations and communications, oral or written, of either Party with respect to the subject matter hereof and the transactions contemplated hereby. The Parties agree to accept a digital image of this Agreement, as executed, as a true and correct original and admissible as best evidence to the extent permitted by a court with proper jurisdiction. Proprietary to Bank of America Page 32 vTIP2010 + +Source: CARDLYTICS, INC., S-1, 1/12/2018 + + + + + +Software License, Customization and Maintenance Agreement + +SCHEDULE C + +Bank of America Change Order Request Form Bank of America - Change number: Project + +Software and Hardware Change Order Request and Authorization + + + +Requested by: (please print) Date of request: Name: Date required: Dept. #: Priority: Phone #: ○ Low ○ Medium ○ High + +Description of change: - - + + + + See Attachment ○ Response: ○ Bank of America or ○ Supplier Enhancement See Attachment ○ Estimated effort (to be filled in by Systems Analyst) Estimate for CO Request Only ○ + + Function Hours required Estimated Cost Target date Comments Analysis/Design Programming Testing Implementation + + Estimated by: Date: Approved by: + + Bank of America Project Manager Date + + + + Supplier Project Manager Date + + + + Proprietary to Bank of America C-1 vTIP2010 + +Source: CARDLYTICS, INC., S-1, 1/12/2018 + + + + + +Change Control Procedures + +The procedure steps In Table 1 shall be employed to achieve the desired objectives for this Change Order. + +Table 1 Change Control Procedure Steps + +Step Individual Sub- step Action 1) Originator a) Fills out Change Order Request & Authorization Form b) Submits form to Bank of America Project Administrator + +2) Bank of America Project Administrator a) Assign unique Change number to form log. + + b) Logs from into CO log. c) Make one copy of form and attachments. d) File copy in "In Process-Review" CO file. e) Deliver form (with attachments, if any) to Supplier Project Manager + +3) Supplier Project Manager a) Reviews form b) Arranges for Analyst to review form + +4) + + + +Analyst + + + +a) + + + +Reviews form and analyzes changes required. If time to evaluate CO is more than four hours, returns form to Supplier Project Manager with estimate of number of hours required (including expected additional participants and their respective hours) to evaluate the CO Request. Check "Estimate for CO Request Only" box on form. (Supplier Project Manager will get prior approval for Bank of America funding cost of CO Request evaluation, before Systems Analyst begins actual review.) b) Fills out "Responses" section of form including "Estimated effort" c) Returns form to Supplier Project Manager. + +5) Supplier Project Manager a) Review form for completeness of response, evaluates available resources. b) Signs & dates form at bottom signifying approval. c) Returns form to Project Administrator. Proprietary to Bank of America C-2 vTIP2010 + +Source: CARDLYTICS, INC., S-1, 1/12/2018 + + + + + +6) Bank of America Project Administrator a) Makes two copies of CO form + + + +b) c) d) e) + +Files one copy in CO "Returned" file. Removes and destroys "In Process" copy. Returns a copy to Supplier Project Manager. Returns originals CO form to Originator. + +7) Bank of America Project Manager a) Evaluates CO Response. + + b) Negotiates with Supplier any differences regarding licensing status of deliverables. + + c) Signs & dates form at bottom signifying approval. If declined, writes "Cancelled" in "Bank of America Project Manager" signature area of form. d) Makes appropriate copies for Bank of America use (to TAM, etc.) e) Returns original signed copy to Project Administrator. + +8) Project Administrator a) If CO approved, makes two copies: one to Supplier Project Manager, one for person to be assigned. Delivers both to Supplier Project Manager. Updates log. + + b) If CO cancelled, original from is filed in CO "Cancelled" file, updates log, removes copy from "Returned to Bank of America" file. + +9) Supplier Project Manager a) b) Reviews form, arranges for Supplier to assign Systems Analyst Updates project plan (may be done by Implementation Manager) + +10) Supplier's Analyst When CO completed, form is returned to Supplier Project Manager + +11) Supplier Project Manager a) Reviews the results of the CO (deliverables, activities …) and concurs that CO was completed. Signs form. b) Returns form to Project Administrator. + +12) + + + +Project Administrator + + + +a) b) c) d) e) + +Makes two copies of completed form. Sends one copy to Supplier Accounting. Files one copy in "CO Completed" file. Sends original back to Bank of America Project Manager. Updates log. + +13) + + + +Bank of America Project Manager + +a) + +b) + +Reviews form and results. + +Files in Bank of America's "CO Completed" file. Proprietary to Bank of America C-3 vTIP2010 + +Source: CARDLYTICS, INC., S-1, 1/12/2018 + + + + + +SCHEDULE D Maintenance Services + +MAINTENANCE SERVICES + +A. During the Warranty Period, Supplier shall provide Bank of America Maintenance Services at no additional charge, provided that if a Customization is not Operative at the end of the applicable Warranty Period, Maintenance Services shall continue to be provided without additional charge until the Customization is Operative. + +B. Supplier shall provide the Maintenance Services described in this for Software, Updates and Upgrades provided to Bank of America pursuant to this Agreement. + +C. As part of Maintenance Services, Supplier shall provide the following: + + (1) help desk support available twenty-four (24) hours a day, seven (7) days a week via toll-free telephone number with help desk technicians sufficiently trained and experienced to identify or resolve most support issues and who shall respond to all Bank of America requests for support within fifteen (15) minutes after receiving a request for assistance; + + (2) a current list of persons and telephone numbers. including pager numbers, (the "Calling List") for Bank of America to contact to enable Bank of America to escalate its support requests for issues that cannot be resolved by a help desk technician or for circumstances where a help desk technician does not respond within the time specified. + +D. Supplier shall deliver to Bank of America and keep current a list of persons and telephone numbers ("Calling List") for Bank of America to contact in order to obtain answers to questions about the Equipment or to obtain Corrections. The Calling List shall include (1) the first person to contact if a question arises or problem occurs and (2) the persons in successively more responsible or qualified positions to provide the answer or assistance desired. If Supplier does not respond promptly to any request by Bank of America for telephone consultative service, then Bank of America may attempt to contact the next more responsible or qualified person on the Calling List until contact is made and a designated person responds to the call. + +ERROR CORRECTION + +A. Supplier shall make reasonable efforts to respond within two (2) hours to Bank of America's initial request for assistance in correcting or creating a workaround for an Error. Supplier's response shall include assigning fully-qualified technicians to work with Bank of America to diagnose and correct or create a workaround for the Error and notifying the Bank of America Representative making the initial request for assistance of Supplier's efforts, plans for resolution of the Error, and estimated time required to resolve the Error. Supplier shall correct Errors caused by the Object Code by modifying Source Code and distributing the modified Software to Bank of America on the schedule called for in this Section. + +B. For Class 1 Errors, Supplier shall provide a Correction or workaround reasonable in Bank of America's judgment within the Repair Period after Bank of America reports the Error, or within four (4) hours after Bank of America first reports the Error if no other Repair Period is specified. These steps shall include assigning fully-qualified technicians to work with Bank of America without interruption or additional charge, twenty-four (24) hours per day, until Supplier provides a Correction or workaround reasonable in Bank of America's judgment. + +C. For Class 2 Errors, Supplier shall take reasonable steps to provide a Correction or a workaround reasonable in Bank of America's judgment by the opening of business on the second Business Day after Bank of America reports the Error. These steps shall include assigning fully- qualified Proprietary to Bank of America D-4 vTIP2010 + +Source: CARDLYTICS, INC., S-1, 1/12/2018 + + + + + + + +technicians to work with Bank of America during Bank of America's regular business hours until Supplier provides a workaround reasonable in Bank of America's judgment or a Correction or Bank of America determines after consultation with Supplier that such a workaround or Correction cannot be produced by Supplier's technicians. Supplier shall provide a Correction within thirty (30) calendar days after Bank of America's report of the Error. + +D. For Class 3 Errors, Supplier shall correct the Errors by all reasonable means. Supplier shall correct the Errors and distribute the modified Software to Bank of America no later than the next Update, unless Supplier has scheduled release of such Update less than thirty (30) calendar days after Bank of America's notice, in which case Supplier shall correct the Error no later than the following Update. + +E. Without limiting Supplier's obligations under this Section, if Supplier does not deliver a Correction for an Error within the times allowed by this Section (whether Supplier has delivered a reasonable workaround or not), Supplier shall provide a written analysis of the problem and a written plan to supply Bank of America with a Correction. + +PRODUCTION ERRORS + +Notwithstanding the previous Section, "Error Correction," if an Error prevents Bank of America from making productive use of the Software, Supplier shall use its best efforts to provide an effective workaround or a Correction by the time Bank of America opens for business on the Business Day after the Business Day on which Bank of America first reports the Error. + +REMEDIES + +A. Without limitation of Supplier's obligations above, Bank of America may fall back, at its option, to any previous version or release of the Software in which a Class 1 or Class 2 Error does not occur or can be worked around, and Supplier shall provide Maintenance Services at no charge, with respect to that version until Supplier provides a Correction. + +DIAGNOSTIC INFORMATION + +Bank of America shall submit to Supplier a listing of output and such other data as Supplier reasonably may request in order to reproduce operating conditions similar to those present when Bank of America detected the Error. + +BANK OF AMERICA MODIFIED SOFTWARE + +If Bank of America modifies the Software under the terms hereof, any additional maintenance costs or expenses to Supplier which result directly from such modification may be billed to Bank of America at the Time and Materials Rates. + +UPDATES + +Supplier shall provide all Updates to Bank of America at no additional charge when Updates are made generally available to Supplier's other customers. + +Supplier will complete two (2) dedicated releases/year for Bank of America during the initial Term. The parties will work together every 6 months during the Term to define and agree upon the timelines and features for the next dedicated release. During the Term, six (6) weeks prior to each release. Cardlytics will provide Bank of America with code release notes or other technical documentation (describing features and functionality). Proprietary to Bank of America D-5 vTIP2010 + +Source: CARDLYTICS, INC., S-1, 1/12/2018 + + + + + +Supplier's TMS provides marketing services across multiple financial Institutions in addition to Bank of America. For the TMS service to function properly, the OPS system must be upgraded periodically. The supplier will provide no more than two major code releases of OPS during a calendar year without Bank of America's consent. Bank of America may implement these releases when appropriate and convenient for Bank of America. However, The TMS will support the current and previous release of OPS. If Bank of America does not upgrade to the current or previous release of OPS, some or all of TMS functionality may be impacted. Proprietary to Bank of America D-6 vTIP2010 + +Source: CARDLYTICS, INC., S-1, 1/12/2018 + + + + + +SCHEDULE E Information Security + +INFORMATION SECURITY PROGRAM + +Bank of America shall have the opportunity to evaluate the Supplier's Information Security Program and Supplier Security Controls to ensure Supplier's Compliance with the Section entitled "Confidentiality and Information Protection." The Supplier's Information Security Program (the "Program") shall address the Bank Security Requirements described below. This Program shall, at a minimum, prescribe the architecture of Supplier's system, Confidential Information placement within the system, the security controls in place (e.g. firewalls, web page security, intrusion detection, incident response process, etc.) and contain the information called for in the Subsection entitled "Security Program Features" below. The Program shall also describe physical security measures in place to protect Confidential Information received or processed by Supplier, including those that will protect Confidential Information that has been printed or otherwise displayed in forms perceptible with or without the aid of equipment. Bank of America shall provide Supplier with the Service Provider Security Requirements document outlining such Bank Security Requirements and Supplier Security Controls which shall be deemed a part of Bank of America's Confidential Information under this Agreement Supplier acknowledges that upon request in order to be allowed continued access to Confidential Information, it will make modifications to its Information Security Program to add additional measures necessary to retain Information Security standards consistent with the Bank Security Requirements. + +PRIVACY POLICY + +With respect to Confidential Information and the services provided to or on behalf of Bank of America, Supplier promptly shall conform its publicly available privacy and security policies, in Bank of America's reasonable judgment, to those of Bank of America, as they may exist from time to time. + +PROTECTION + +Supplier shall install and use a reasonable change control process to ensure that access to its systems and to Confidential Information is controlled and recorded. Supplier shall notify Bank of America of any planned system configuration changes or other changes affecting the Program applicable to Confidential Information, setting forth how such change will impact the security and protection of Confidential Information. No such change, which could reasonably be expected by Bank of America to have a material adverse impact on the security and protection of Confidential Information, may be implemented without the prior written consent of a Bank of America security representative. Bank of America may approve these types of changes prior to their becoming effective, such approval not to be unreasonably withheld or delayed. + +Supplier shall permit Bank of America, at the election of Bank of America, to conduct security vulnerability (penetration) testing on those portions of the Supplier network, and any application servers that Supplier hosts on behalf of Bank of America, on which Confidential Information is stored or processed. Such vulnerability testing shall be conducted in a non-production environment with production equivalent security controls and with prior notice to Supplier. Supplier also agrees to make available to Bank of America the results of any vulnerability testing conducted by Supplier or a qualified third party provider of this service. + +Supplier shall permit Bank of America to inspect the physical system equipment, operational environment, and Confidential Information handling procedures. Supplier's agreement with any independent contractor to provide services to Bank of America in support of this Agreement shall likewise permit Bank of America to conduct the same inspections. Proprietary to Bank of America E-1 vTIP2010 + +Source: CARDLYTICS, INC., S-1, 1/12/2018 + + + + + +Subject to the terms of this Agreement and the Schedules attached hereto, Supplier will take commercial best measures to prevent the unintended or malicious loss, destruction or alteration of Bank of America's files, Confidential Information, software and other property received and held by Supplier. Supplier shall maintain back-up files (including off-site back-up copies) thereof and of resultant output to facilitate their reconstruction in the case of such loss, destruction or alteration, in order to ensure uninterrupted services in accordance with the terms of this Agreement, its Schedules, Bank of America's written policies and Supplier's disaster recovery plans. + +DETECTION AND RESPONSE + +Supplier shall notify Bank of America immediately (within 24 hours or as soon thereafter as practicable) following discovery of any suspected breach or compromise of the security, confidentiality, or integrity of nonpublic personal information of any current or former Bank of America employee or customer (''Affected Persons") or otherwise provided to Supplier by Bank of America under this agreement through the defined security escalation channel of Bank of America, the Bank of America Incident Response Team ("InfoSafe") by calling (800) 207-2322, option 1. Callers will be asked to identify themselves as Supplier. Such notification to Bank of America shall precede notifications to any other party. Supplier shall cooperate fully with all Bank of America security investigation activities consistent with the lnfoSafe guidelines for escalation and control of significant security incidents. + +Bank of America reserves the right in its sole discretion to make appropriate privacy breach notifications to Affected Persons and regulators pursuant to federal or state guidelines, including but not limited to the Interagency Guidance on Response Programs for Unauthorized Access to Customer Information and Customer Notice. To assist Bank of America in such notifications, Supplier shall include a brief summary of the available facts, the status of any investigation, and, if known, the potential number of Affected Persons. Supplier agrees to provide at no charge, to Affected Persons appropriate credit monitoring services for two years. All costs associated with any security breach, including but not limited to, the costs of the notices to, and credit monitoring for, Affected Persons shall be the sole responsibility of Supplier. Supplier agrees that it shall not communicate with any third party, including, but not limited to the media, vendors, consumers. and Affected Persons regarding any security breach without the express written consent of Bank of America. + +Supplier shall maintain for a mutually agreed-upon length of time, and afford Bank of America reasonable access to, all records and logs of that portion of Supplier's network that stores or processes Confidential Information. Bank of America may review and Inspect any record of system activity or Confidential Information handling upon reasonable prior notice. Supplier acknowledges and agrees that records of system activity and of Confidential Information handling may be evidence (subject to appropriate chain of custody procedures) in the event of a Security Breach or other inappropriate activity. Upon the Bank of America, Supplier shall deliver the original copies of such records to Bank of America for use in any legal, investigatory or regulatory proceeding. + +Supplier shall monitor industry-standard information channels (bugtraq, CERT, OEMs, etc.) for newly identified system vulnerabilities regarding the technologies and services provided to Bank of America and fix or patch any identified security problem in an adequate and timely manner. Unless otherwise expressly agreed in writing, "timely" shall mean that Supplier shall Introduce such fix or patch as soon as commercially reasonable after Supplier becomes aware of the security problem. This obligation extends to all devices that comprise Supplier's system, e.g., application software, databases, servers, firewalls, routers and switches, hubs, etc., and to all of Supplier's other Confidential Information handling practices. + +Bank of America may perform vulnerability testing of Supplier's system to test the remediation measures implemented after a security incident or event to protect Confidential Information. + +SECURITY PROGRAM FEATURES + +At the request of Bank of America, Supplier shall meet with the Bank of America information security team to discuss information security issues In much greater detail at mutually agreeable times and locations. Proprietary to Bank of America E-2 vTIP2010 + +Source: CARDLYTICS, INC., S-1, 1/12/2018 + + + + + +Bank of America acknowledges and agrees that the information Supplier so provides is Supplier's Confidential Information, as defined In this Agreement, and is valuable proprietary information of Supplier. Supplier shall provide detailed information including, but not limited to, the following topics, which also shall be addressed in Supplier's Program. + + + +1. Diagrams. The diagrams shall show the detail of the system architecture including, without limitation, the logical topology of routers, switches, internet firewalls, management or monitoring firewalls, servers (web, application and database), intrusion detection systems, network and platform redundancy. The diagrams shall include all hosting environments including those provided by Supplier's Subcontractors. + + 2. Firewalls. Slate the specifications of the firewalls in use and who manages them. Specify the services, tools and connectivity requiredto manage the firewalls. + + 3. Intrusion Detection Systems. Describe the intrusion detection system ("lDS") environment and the Security Breach and event escalation process. Indicate who manages the IDS environment. Specify the services, tools and connectivity required to manage the IDS environment, and if the IDS network is host based. + + 4. Change Management. Describe the change management process for automated systems used to provide services. Describe theprocess for information handling policies and practices. + + 5. Business Continuity. Describe the business and technical disaster recovery management process. + + + +6. System Administration Access Control. Describe the positions that perform administration functions on servers, firewalls or other devices within the application and network infrastructure. Detail level of access needed to perform functions. Explain the access control mechanisms. Describe the process by which recurring access of the system(s) is conducted to ensure permissions are granted on a "need to know" basis. Detail access reports generated and when reports are reviewed periodically. Describe methods used to track/log the usage of each account. + + + +7. Customer Access Control. Describe each logon process to be followed by Bank of America Customers (including Bank of America employees) to obtain access to services Supplier provides to Bank of America. Describe the initial enrollment process for such Customers. Describe the password policies and procedures Supplier's system enforces, including, without limitation, password expiration, length of password, password revocation, invalid logon attempt threshold, etc. Describe methods used to track/log the usage of each account Supplier shall demonstrate how a customer or end user authenticates to each application. + + 8. Access to Confidential Information in Human-Perceptible Forms. Describe policies, procedures and controls used to protect Confidential Information when it is printed or in other perceptible forms; how and how often these policies and procedures are reviewed and tested; and what methods are used to ensure destruction of Confidential Information on hard copy. + + 9. Operating System Baselines. Describe Supplier's operating system security controls and configurations. Examples: Operating system services that have been removed because not required by Supplier's services to Bank of America. Identify and provide current operating system fixes that have not been applied, if any. Proprietary to Bank of America E-3 vTIP2010 + +Source: CARDLYTICS, INC., S-1, 1/12/2018 + + + + + + 10. Encryption. Describe in detail the technology and usage of encryption for protecting Confidential Information, including passwordsand authentication information, during transit and in all forms and locations where it may be stored. + + 11. Application and Network Management. Specify the services, tools and connectivity required to manage the application and networkenvironments: who carries out the management functions; and what level of physical security applies to managed devices. + + 12. Physical Security. For each location where Confidential Information will be processed or stored or services for Bank of Americaproduced by Supplier, describe in detail the arrangements in place for physical security. + + 13. Privacy: Describe Supplier's privacy and security policies; indicate if they are in writing; and whether they are compatible with Bankof America's policies. + + 14. Location of Servers. Are web servers on a separate segment of the network from the application and database servers? If not, explainthe reason this has not been done. At Bank of America's request, Supplier shall make reasonable efforts to create this separation. + + 15. Portable Media and Devices. Bank of America's Confidential Information shall not be stored on any portable media or devices to include notebook/laptop computers, USB storage devices, approved by Bank of America and security precautions such as encryption of data and remote network connectivity will be addressed in the Supplier's Information Security Program. Proprietary to Bank of America E-4 vTIP2010 + +Source: CARDLYTICS, INC., S-1, 1/12/2018 + + + + + +INFORMATION DESTRUCTION REQUIREMENTS + +Overall Requirements + +At Bank of America's direction, Supplier shall destroy all Confidential Information at all locations where it is stored after it is no longer needed for performance under this Agreement or to satisfy regulatory requirements. Supplier must have in place or develop information destruction schedules and processes that meet Bank of America standards and that must be used in all cases when Confidential Information is no Longer needed. These information destruction requirements are to be applied to paper, microfiche, disks, disk drives, tape and other destroyable electronic or digital media containing Confidential Information. + +Paper and Other Shreddable Media + +Paper and other shreddable media includes paper, microfiche, microfilm, compact disks (CDs) and any other media that can be shredded. This media must be shredded using shredding techniques or machines such that Confidential Information in this media is completely destroyed as set forth herein when Supplier is finished with the Confidential Information contained thereon and it is no longer needed. This media may be shredded immediately or temporarily stored In a highly secured, locked container. The media may be shredded at a location other than Supplier's facilities; however it must be transferred in a highly secured. locked container. Supplier is responsible for supervising the shredding regardless of where the shredding activity occurs and by whom the shredding is performed. Confidential Information In this media must be completely destroyed by shredding such that the results are not readable or useable for any purpose. + +Electronic Media + +Electronic media includes, but Is not limited to, disk drives, diskettes. tapes, universal serial bus (USB) and other media that is used for electronic recording and storage. This media is to be wiped or degaussed using a Bank of America approved wipe or degaussing tool. Wiping uses a program that repeatedly writes data to the media and thereby destroys the original content. Degaussing produces an electronic field that electronically eliminates the original data and clears the media. These techniques must meet Bank of America standards and baselines. The resulting media must be free from any machine or computer content readable for any purpose. + +Certification + +These processes must be documented as a procedure by Supplier and should outline the techniques and methods to be used. The procedure must also indicate when and where Confidential Information is to be destroyed. Supplier shall keep records of all Confidential Information destruction completed and provide such records to Bank of America upon demand. Proprietary to Bank of America E-5 vTIP2010 + +Source: CARDLYTICS, INC., S-1, 1/12/2018 + + + + + +SCHEDULE F Background Checks + +BACKGROUND SCREENING GUIDELINES + +In accordance with and subject to the terms and conditions of this Agreement, prior to any person being assigned and beginning work for Bank of America under this Agreement, the following background screening guidelines must be administered and successfully passed by that person ("Contract Person"): + + 1. Search of the Contract Person's social security number to verify the accuracy of the individual's identity and current and previousaddresses. + + 2. A criminal background search of all court records in each venue of the Contract Person's current and previous addresses over thepast ten (10) years. + + 3. A minimum of at least two (2) confirmed work references prior to assignment at Bank of America. + + 4. Verification of any post high school education or degrees, i.e. B.A.. B.S., Associate, or professional certifications. + + 5. Validate authorization to work in the United States in compliance with I-9 requirements.6. Where required by state and/or federal law. enroll in and participate in a federal work authorization program and process employee information according to all applicable E-Verify rules and procedures. + +Supplier shall keep copies of background screening documentation and provide certification of their completion to Bank of America when requested. Proprietary to Bank of America F-1 vTIP2010 + +Source: CARDLYTICS, INC., S-1, 1/12/2018 + + + + + +SCHEDULE G Recovery + +1. Supplier shall establish, maintain and implement per the terms thereof, a Business Continuity Plan. The Business Continuity Plan must be in place within forty-five (45) calendar days after the assumption of Service and shall include, but not be limited to, recovery strategy, loss of critical personnel, documented recovery plans covering all areas of operations necessary to delivering Supplier's services pursuant to this Agreement, vital records protection and testing plans. The plans shall provide, without limitation, for off-site backup of critical data files, Confidential Information, software, documentation, forms and supplies as well as alternative means of transmitting and processing Confidential Information. + +2. The recovery strategy shall provide for recovery after both short and long term disruptions in facilities, environmental support, workforce availability, and data processing equipment. Although short term outages can be protected with redundant resources and network diversity, the long term strategy must allow for total destruction of Supplier's business operations for a period of six (6) months or longer and set forth a recovery strategy. + +3. Supplier's recovery objectives shall not exceed the following during any recovery period: + + A. Time to Full Restoration from time of disruption event: 4 hours + + B. Maximum Data Loss (stated in hours) from time of disruption event: 24 hours + + C. Percentage Reduction of Service levels: 50% during the 24 hour recovery period + +In the event of a change, Bank of America agrees to work with Supplier to determine a mutually agreeable date for Supplier to match the new objectives if necessary. + +4. Supplier shall continue to provide service to Bank of America if Bank of America activates its contingency plan or moves to an interim site to conduct its business, including during tests of Bank of America's contingency operations plans. + +5. Supplier shall furnish contingency recovery plans, contingency exercise and testing schedules annually or upon request. Supplier shall provide to Bank of America, annually, or upon request, copies of all contingency exercise final reports and shall Include, but not be limited to, disaster scenario description, exercise scope and objectives, detailed tasks, exercise issues list and remediation, and exercise results. If requested, Supplier shall allow Bank of America, at its own expense, to observe a contingency test. + +6. If Supplier provides electronic interchange of data with Bank of America, Supplier shall participate, if requested, in the recovery exercise of Bank of America to validate recovery capability. + +7. Supplier must provide evidence of capability to meet any applicable regulatory requirements concerning business continuity. + +8. Supplier shall be required to participate, if requested by Bank of America, in recovery testing of a mutually agreed upon scope and frequency. Proprietary to Bank of America G-1 vTIP2010 + +Source: CARDLYTICS, INC., S-1, 1/12/2018 \ No newline at end of file diff --git a/full_contract_txt/CardlyticsInc_20180112_S-1_EX-10.16_11002987_EX-10.16_Maintenance Agreement2.txt b/full_contract_txt/CardlyticsInc_20180112_S-1_EX-10.16_11002987_EX-10.16_Maintenance Agreement2.txt new file mode 100644 index 0000000000000000000000000000000000000000..5ca988ce27ba075a4fce80c9201b905c8ffb9047 --- /dev/null +++ b/full_contract_txt/CardlyticsInc_20180112_S-1_EX-10.16_11002987_EX-10.16_Maintenance Agreement2.txt @@ -0,0 +1,85 @@ +SCHEDULE B + +Customization Schedule + +This Customization Schedule is attached to the Software License, Customization and Maintenance Agreement (the "Agreement") executed by and between Bank of America, N.A. ("Bank of America") and <> ("Supplier"). The Customizations identified hereunder shall be subject to the terms and conditions of that Software License, Customization and Maintenance Agreement referenced above. + +Bank of America wishes to obtain the Customizations herein defined, and Supplier wishes to delivery those Customizations, on the terms and conditions of the Agreement and this Customization Schedule. + +1. The Customizations shall fulfill or exceed all of the functional, performance and other specifications described in the Program Materials and the documents prepared either by Bank of America or Supplier pursuant to this Agreement. as indicated below. + +No later than <>, Supplier shall deliver to Bank of America the documents described below for this Customization. The detailed specifications so delivered shall be incorporated herein when approved by Bank of America. + +System Solution + +Functional Specifications + +System Design Specifications + + Test Specifications + + + + + +Supplier acknowledges receipt of the following documents from Bank of America: + + Detailed Requirements + + + + + +2. Bank of America Customizations: + + + + + +3. Supplier Customizations: + + + + Proprietary to Bank of America B-1 vTIP2010 + +Source: CARDLYTICS, INC., S-1, 1/12/2018 + + + + + +4. Fees for Customizations: + +[SPECIFY TIME AND MATERIALS RATES ([Indicate any "not to exceed" limit on T&M Customization costs) OR FIXED PRICE] + +If the proposed price Is Increased by Supplier upon delivery to Bank of America of detailed specifications or at any other time hereafter, Bank of America may terminate this Schedule and shall receive a refund of all amounts previously paid hereunder. + +5. Unless otherwise specified herein, the environment for this Customization Is the same as described on Product License Schedule A to this Agreement. + +6 The Delivery and Installation Schedule for this Customization is: + +Delivery Date: + +Installation Date: + +[Insert any other Schedule Information pertaining to the Delivery or Installation of the Product] + +7. [Add any special items. e.g., special payment Schedule, for this Schedule.] + +8. Project Personnel: + + Bank of America Project Administrator: Supplier Project Administrator: + + + + Bank of America Project Manager: Supplier Project Manager: + + + + THE FOREGOING IS UNDERSTOOD AND AGREED TO BY: + +<> ("Supplier") Bank of America, N.A. ("Bank of America") By: By: + +Name: Name: Title: Title: Date: Date: Proprietary to Bank of America B-2 vTIP2010 + +Source: CARDLYTICS, INC., S-1, 1/12/2018 \ No newline at end of file diff --git a/full_contract_txt/CardlyticsInc_20180112_S-1_EX-10.16_11002987_EX-10.16_Maintenance Agreement3.txt b/full_contract_txt/CardlyticsInc_20180112_S-1_EX-10.16_11002987_EX-10.16_Maintenance Agreement3.txt new file mode 100644 index 0000000000000000000000000000000000000000..f5438e7e84be1d5b4349de24f2cc9a9d0eb130fc --- /dev/null +++ b/full_contract_txt/CardlyticsInc_20180112_S-1_EX-10.16_11002987_EX-10.16_Maintenance Agreement3.txt @@ -0,0 +1,37 @@ +SCHEDULE TO Software License, Customization and Maintenance Agreement Supplier Name: Cardlytics, Inc. Agreement Number: CW251207 + +Supplier Address: + + + +621 North Avenue NE Suite C-30 Atlanta, GA 30308 + +Addendum Number: + + + +CW255039 + +Supplier Telephone: 888.798.5802 Addendum Effective Date March 3, 2011 + +This Schedule ("Schedule") is made as of the effective date set forth above to that Software License, Customization, and Maintenance Agreement, by and between Cardlytics, Inc. ("Supplier") and Bank of America, N. A, ("Bank of America"), dated November 5, 2010, as amended ("SLCMA"). Each capitalized term used but not defined herein shall have the meaning assigned in the SLCMA. + +WHEREAS, Bank of America and Supplier entered into the SLCMA in order to set forth the terms and conditions pursuant to which Supplier provides certain Software to Bank of America, + +WHEREAS, the parties desire to add to the SLCMA the Supplier Offer Placement System Software; + +NOW THEREFORE, in consideration of the promises and accords made herein, and the exchange of such good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Bank of America and Supplier agree as follows: + +The attached Schedule [A] is hereby incorporated into the SLCMA describing the Offer Placement System Software for use by Bank of America. + +THE FOREGOING IS UNDERSTOOD AND AGREED TO BY: Cardlytics, Inc. ("Supplier") Bank of America, N.A. ("Bank of America") + +By: /s/ Scott Grimes By: /s/ Chandra Torrence + +Name: Scott Grimes Name: Chandra Torrence + +Title: Chief Executive Officer Title: V.P., Sourcing Manager + +Date: 3/4/11 Date: 3/3/11 1. + +Source: CARDLYTICS, INC., S-1, 1/12/2018 \ No newline at end of file diff --git a/full_contract_txt/CardlyticsInc_20180112_S-1_EX-10.16_11002987_EX-10.16_Maintenance Agreement4.txt b/full_contract_txt/CardlyticsInc_20180112_S-1_EX-10.16_11002987_EX-10.16_Maintenance Agreement4.txt new file mode 100644 index 0000000000000000000000000000000000000000..62cb98b94935ba8d2fcc023bac74cd3f2fc1f0a0 --- /dev/null +++ b/full_contract_txt/CardlyticsInc_20180112_S-1_EX-10.16_11002987_EX-10.16_Maintenance Agreement4.txt @@ -0,0 +1,135 @@ +[***] = CONFIDENTIAL TREATMENT REQUESTED + +SCHEDULE A Product License Schedule FORM This Product License Schedule is issued pursuant to the Software License, Customization and Maintenance Agreement (the "Agreement") executed by and between Bank of America, N.A. ("Bank of America") and Cardlytics, ("Supplier") and incorporates by reference all of the terms and conditions of the Agreement. + + TERM FOR ORDERING + +A. Software + +This Schedule constitutes an Order in accordance with the terms of the Agreement. + + B. Payment Schedule for Source Code delivery as outlined in Section 2.7 + + • Beginning three (3) years after the General Services Agreement Effective Date, the Supplier Software version in place one (1) yearfollowing the Service reaching 10,000,000 Users $[***] + + • The latest commercially available version, or earlier versions at Bank of America's option, of the Supplier Software: + + • Beginning 3 years after the General Services Agreement Effective Date or one (1) year following the Service reaching 10,000,000 Users, whichever is later, if Supplier has failed to meet either of the Performance Adjustments as outlined in Schedule B of the General Services Agreement for six (6) consecutive months. $[***] + + • Beginning 3 years after the General Services Agreement Effective Date and one (1) year following the National Launch date and Supplier has met both of the Performance Adjustments as outlined in Schedule B of the General Services Agreement. Bank of America Total Revenue Share minus Supplier Total Revenue share for the preceding twelve (12) months + + • At any time if Supplier materially breaches either Agreement $[***] + + C. Maintenance Services + +No-charge Maintenance Services shall be provided from the Delivery Date through the Warranty Period. The first paid (Initial) Maintenance Term shall commence upon expiration of the Warranty Period and shall continue for twelve (12) months thereafter. Thereafter, the Maintenance Term shall automatically renew for successive period, 12 months, on the terms and conditions of this Agreement unless Bank of America terminates Maintenance Services pursuant to this Agreement. Bank of America may terminate Maintenance Services for convenience at any time in accordance with the Section entitled "Termination" of the Agreement. If Bank of America terminates the Maintenance Services, Bank of America shall have the right to reinstate the Maintenance Services without paying any reinstatement fee. During the initial Maintenance Term and any renewal term, Maintenance Fees shall be paid in the increments described below under "Payment Terms." Proprietary to Bank of America Page A-2 vTIP2010 + +Source: CARDLYTICS, INC., S-1, 1/12/2018 + + + + + +PRODUCTS LICENSED PROGRAMS: PROGRAM MATERIALS: PLATFORM: + +The Software consists of the following: The Program Materials include the following: The Platform consists of the following: + +Cardlytics OPS (Offer Placement System) Version 3.0 + + + +Installation Guides Operational Guides + + + +Computer: database servers, application servers and web servers + +Operating System: Microsoft.net and SQL 2008 + +Other Required Components Client side ad serving technology + + PAYMENT TERMS + +The Software License and Maintenance will be provided at no charge. Proprietary to Bank of America Page A-3 vTIP2010 + +Source: CARDLYTICS, INC., S-1, 1/12/2018 + + + + + +[***] = CONFIDENTIAL TREATMENT REQUESTED + +PAYMENT TERMS + +DELIVERY/INSTALLATION DATES ACCEPTANCE PERIOD MAINTENANCE PERIOD + +WARRANTY PERIOD DURATION + +Delivery Date: + +TBD + +Installation Date: + +TBD + +The period commencing on the Installation Date and continuing for the number of days specified: + +120 days + + + +Notwithstanding anything set forth elsewhere in this Agreement (or below), the Maintenance Period shall be twenty- four (24) hours per day, seven (7) days per week, including Bank of America holidays. + +120 days + +METHOD OF DELIVERY AND STATE WHERE SOFTWARE AND DOCUMENTATION ARE RECEIVED + +The method of delivery and name of the State where Supplier shall deliver and Bank of America shall receive Software and Documentation: + +TBD + +TRAINING + +Supplier shall provide the following training classes pursuant to this Agreement in connection with installation of the first copy of the Software. + +Date: + +INSTALLATION SUPPORT + +In addition to the installation support provided pursuant to the Section entitled "Ordering, Delivery and Installation," Supplier shall provide Bank of America the following installation services: + +Installation Support will be handled in a separate agreement + +NON-MAINTENANCE SERVICES SUPPORT + +Support services shall be provided at the Time and Materials rates set forth in the Price List. + +RELATIONSHIP MANAGERS + +The following shall be the Relationship Managers for the parties: Bank of America: Cardlytics: Brian Woodward Jason Brooks Address: [***] [***] Proprietary to Bank of America Page A-4 vTIP2010 + +Source: CARDLYTICS, INC., S-1, 1/12/2018 + + + + + +SOURCE CODE INSTALLATION SITE + +Bank of America shall maintain its copy of the Source Code on the terms of this Agreement at the following address: Address: TBD + +INSTALLATION SITE + + Address: TBD + +INVOICE ADDRESS(ES) + +Licenses: + + N/A Maintenance: + + N/A Proprietary to Bank of America Page A-5 vTIP2010 + +Source: CARDLYTICS, INC., S-1, 1/12/2018 \ No newline at end of file diff --git a/full_contract_txt/CcRealEstateIncomeFundadv_20181205_POS 8C_EX-99.(H)(3)_11447739_EX-99.(H)(3)_Marketing Agreement.txt b/full_contract_txt/CcRealEstateIncomeFundadv_20181205_POS 8C_EX-99.(H)(3)_11447739_EX-99.(H)(3)_Marketing Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..83698f616a574131cc0cc16a7192fa4efbde0b3f --- /dev/null +++ b/full_contract_txt/CcRealEstateIncomeFundadv_20181205_POS 8C_EX-99.(H)(3)_11447739_EX-99.(H)(3)_Marketing Agreement.txt @@ -0,0 +1,131 @@ +Exhibit 99(h)(3) WHOLESALE MARKETING AGREEMENT THIS AGREEMENT is entered into effective as of the 24t h day of August 2018, by and among ALPS Distributors, Inc., a Colorado corporation (the "Distributor") and S2K Financial LLC, a Delaware limited liability company ("S2K"). WITNESSETH: WHEREAS, the Distributor has entered into a Distribution Agreement with each fund set forth in Exhibit A hereto, each a Delaware statutory trust and each of which is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as a closed-end management investment company (each a "Fund" and collectively referred to as the "Funds"); WHEREAS, the Distributor is the distributor of each Fund and enters into broker-dealer selling agreements ("Selling Agreements") with respect to each such Fund; WHEREAS, the Funds' shares may be sold by broker-dealers registered with the Securities and Exchange Commission (the "SEC") and the Financial Industry Regulatory Authority ("FINRA"); and WHEREAS, the Distributor wishes to retain S2K, through registered representatives of S2K ("Authorized S2K Representatives"), to introduce the Funds to registered representatives of broker-dealers and registered investment advisers located at the financial institutions (each, an "Intermediary" and collectively, "Intermediaries") that may have customers interested in investing in a Fund. NOW, THEREFORE, in consideration of these premises and of the mutual covenants and agreements hereinafter contained, the sufficiency of which is hereby acknowledged by the parties, the parties hereto agree as follows: 1. Services Provided by S2K. S2K agrees, subject to the provisions of this Agreement, through its Authorized S2K Representatives, to use its reasonable best efforts to market the Funds to the Intermediaries, and to identify, refer and/or introduce Intermediaries to the Funds. In connection therewith, S2K may (i) engage in seminars, conferences and media interviews for financial intermediaries; (ii) distribute sales literature and other communications (including electronic media) regarding the Funds, subject to review and approval of such material by the Distributor; and (iii) perform other services reasonably contemplated in writing by S2K and the Distributor. S2K shall not act as an underwriter in connection with S2K's wholesale activities relating to shares of the Funds where S2K receives all or substantially all of the sales load, as set forth in each Fund's then-current prospectus ("Prospectus"). S2K will market the Funds to Intermediaries that: (a) are registered as "broker-dealers" with the SEC, FINRA, and any other applicable jurisdiction in which they operate and are required to be so registered by law; + +Source: CC REAL ESTATE INCOME FUND-ADV, POS 8C, 12/5/2018 + + + + + +(b) will enter into a Selling Agreement agreed to by Distributor and such "broker-dealers," or in such other form of Intermediary agreement (which shall include, without limitation, broker/dealer Selling Agreements, platform agreements and wirehouse agreements) as required by an Intermediary with the Distributor to sell shares of the Funds to investors (copies of which shall be made available to S2K); and (c) will sell shares of the Funds through representatives in accordance with the then-current applicable Prospectus and in accordance with the provisions of the Selling Agreement. 2. Services Provided by the Distributor. (a) The Distributor will coordinate the completion and execution of Selling Agreements with broker-dealers and/or Intermediaries. (b) Advertising and Sales Literature Review (i) The Distributor shall provide review of broker-dealer related advertising and sales literature pieces ("marketing pieces") submitted to Distributor by S2K. Documentation (which shall include electronic correspondence) not defined as "marketing pieces," which shall include, but is not limited to, correspondence and materials provided directly in response to due diligence requests, shall be principally reviewed and approved by S2K. (ii) Distributor's services are based on the understanding that S2K will utilize current systems and expertise owned by Distributor, specifically the AdLit Advertising Review System ("AdLit"), and that Distributor will base its reviews on: (i) the guidelines contained within Distributor's Sales and Advertising Guide and Distributor's Written Supervisory Procedures; (ii) rules and guidance issued by FINRA and the SEC related to communications with the public and/or communications to institutional investors, as those terms are defined in FINRA Rules 2210 and 2211 and in various other FINRA and SEC rules and interpretive material; and (iii) Distributor's submission guidelines with respect to the use of trademarked and/or copyright materials, to the extent applicable. All material submitted to Distributor will be provided by Distributor to S2K with comments or approval no later than three business days after receipt in AdLit. (iii) Each marketing piece submitted to Distributor for review will be subject to the following process: a) Each piece will undergo review at Distributor by a FINRA-licensed registered principal possessing the required expertise and appropriate license to review the marketing piece submitted to Distributor; b) Distributor's comments shall consist of (i) recommendations for changes that, in the opinion of the Distributor reviewer, will be consistent with the guidelines specified by Distributor in Section 2(b)(ii) above, or (ii) in the form of an acknowledgement that the submitted material is consistent with such guidelines with no additional changes. In the event of the latter, the item will be approved by the registered principal and filed with the applicable regulatory body if necessary; + +- 2 - + +Source: CC REAL ESTATE INCOME FUND-ADV, POS 8C, 12/5/2018 + + + + + +c) Distributor will provide system training and ongoing consulting with respect to advertising review guidelines and rules for each marketing piece submitted via the process described herein; and d) Distributor will make all required FINRA filings of marketing materials which have been approved by Distributor. (iv) If S2K wishes Distributor to perform an expedited review of marketing pieces within one business day of Distributor' receipt of such marketing pieces, the expedited review will be performed subject to and in accordance with the following: a) A charge of $250 will apply to each request for expedited review, in addition to FINRA filing fees. b) The marketing piece must be 30 pages or less in actual length in order to be considered for expedited review. Web pages and other marketing pieces over 30 pages require a more in-depth review; therefore, Distributor cannot guarantee a one business day review for these items. c) The marketing piece must be submitted via Distributor's AdLit system by no later than 3:00 P.M. Mountain Time (2:00 P.M. PT/5:00 P.M. ET) on a business day in order to ensure that the Distributor has a full one business day to review and provide S2K with comments within such one business day timeframe. d) S2K must check the box on the AdLit coversheet whereby S2K requests and accepts the terms and fee(s) associated with expedited review in order to ensure that Distributor is notified of the expedited request. e) Distributor cannot guarantee that a marketing piece will be APPROVED within one business day of being received via AdLit. Distributor will review and submit comments to S2K within this timeframe. If Distributor fails to provide S2K with comments within one business day, the $250 expedited review charge will not apply. 3. Performance Requirements. S2K shall devote sufficient staff and expenditures to the performance of its services as shall be consistent with industry standards for the marketing of shares of the Fund. S2K shall perform these services in a professional and competent manner and shall provide such office space and equipment, telephone facilities and personnel as it determines may be reasonably necessary or beneficial in order to provide such services at no cost to the Distributor. 4. Duration and Termination. The term of this Agreement shall commence on the Effective Date and shall end on the 60th day following a written notice from one party to the other of its decision to terminate this Agreement at the end of such 60-day period or upon termination of the applicable Distribution Agreement with respect to a Fund. Termination of this Agreement as to a Fund shall not terminate this Agreement with respect to any other Fund so long as such other Fund's (or Funds', as the case may be) Distribution Agreement is effective. If this Agreement is terminated by one party, it shall terminate the entire Agreement. + +- 3 - + +Source: CC REAL ESTATE INCOME FUND-ADV, POS 8C, 12/5/2018 + + + + + +5. Compensation; Expenses (a) As described in the Fund's Prospectus, the Fund may impose a sales charge "load" in connection with the purchase of shares of the Fund, a portion of which will be paid to S2K pursuant to the terms and conditions of the Prospectus. (b) In consideration of the marketing, sales and other related activities provided by S2K, the Distributor may compensate S2K for such services on each Fund's behalf and at the direction of each such Fund. The amount of compensation payable by the Distributor to S2K hereunder shall be determined on a class by class basis. At the direction of each Fund, ALPS or its designated agent will facilitate the payment of the applicable dealer reallowance fee to S2K in the amounts set forth in Exhibit B hereto. S2K shall perform such distribution-related activities for which such payments are appropriate under all applicable rules and regulations and shall make such occasional certification as required by the Distributor to such effect. (c) No compensation with respect to a Fund shall be due and owing hereunder until the Distributor actually receives payments from such Fund, to the extent applicable. (d) Notwithstanding anything to the contrary herein, in no event shall S2K be entitled to receive fees or compensation that would cause a Fund's sales charges to exceed the maximum amount allowed under FINRA rules or applicable law. (e) S2K shall reimburse Distributor for all reasonable out-of-pocket expenses, including but not limited to: FINRA advertising/filing fees (including additional fees for expedited reviews as set forth in Section 2(b) herein). 6. Representations. (a) S2K hereby represents and warrants to the Distributor that: (i) It is a limited liability company duly organized and existing and in good standing under the laws of the State of Delaware; (ii) It and all requisite personnel have or shall obtain and each shall use their best efforts to maintain all approvals and licenses necessary for the performance of the Services including proper registration and licensing with the SEC and or FINRA, as applicable; (iii) It is and will use its best efforts to remain duly licensed or registered with the SEC, applicable state securities regulators and FINRA, as applicable; (iv) It is empowered under applicable laws and by its limited liability company agreement to enter into and perform this Agreement; + +- 4 - + +Source: CC REAL ESTATE INCOME FUND-ADV, POS 8C, 12/5/2018 + + + + + +(v) No consent, approval, authorization or other order of governmental authority is required in connection with the execution or delivery by S2K of this Agreement; (vi) There are no actions, suits or proceedings pending, or to the knowledge of S2K, threatened against S2K at law or in equity or before or by any federal or state commission, regulatory body or administrative agency or other governmental body, domestic or foreign, which would be reasonably expected to have a material adverse effect on the business or property of S2K; (vii) The execution and delivery of this Agreement, the consummation of the transactions herein contemplated and compliance with the terms of this Agreement by S2K will not conflict with or constitute a default under any charter, bylaw, indenture, mortgage, deed of trust, lease, rule, regulation, writ, injunction or decree of any government, governmental instrumentality or court, domestic or foreign, having jurisdiction over a Fund, except for such conflicts or defaults that would not reasonably be expected to have a material adverse effect on the business or property of S2K; (viii) It will make no representations concerning a Fund other than those contained in the applicable Prospectus or in any promotional materials or sales literature furnished to S2K by the Distributor or prepared by S2K and approved for use by the Distributor, except as otherwise noted in this Agreement; (ix) While it is authorized by the Distributor to solicit purchases of Fund shares, it is understood that it will not open or maintain customer accounts or handle orders for a Fund; (x) All requisite corporate actions have been taken to authorize it to enter into and perform this Agreement; (xi) It and Authorized S2K Representatives are and will use best efforts to remain properly registered with and licensed by the SEC and are and will use best efforts to remain members in good standing of FINRA or any relevant subsidiary thereof, as applicable; (xii) The Authorized S2K Representatives will be registered representatives of S2K and subject to S2K's supervisory oversight in accordance with all applicable laws, rules and regulations in connection with the services provided hereunder; and (xiii) S2K understands and agrees that this Agreement does not relieve S2K of any obligation to which S2K may be subject under any applicable federal or state law. (b) The Distributor represents and warrants to S2K that: (i) It is a corporation duly organized and existing and in good standing under the laws of the State of Colorado; + +- 5 - + +Source: CC REAL ESTATE INCOME FUND-ADV, POS 8C, 12/5/2018 + + + + + +(ii) It is a member of FINRA and it and its employees and representatives have all required licenses and registrations required by the SEC, FINRA or any other governing body to act under this Agreement; (iii) It is empowered under applicable laws and by its Articles of Incorporation and By-laws to enter into and perform this Agreement; (iv) All requisite corporate proceedings have been taken to authorize it to enter into and perform this Agreement; (v) No consent, approval, authorization or other order of governmental authority is required in connection with the execution or delivery by the Distributor of this Agreement; (vi) There are no actions, suits or proceedings pending or to the knowledge of the Distributor, threatened against the Distributor at law or in equity or before or by any federal or state commission, regulatory body or administrative agency or other governmental body, domestic or foreign, which would be reasonably expected to have a material adverse effect on the business or property of the Distributor; (vii) The execution and delivery of this Agreement, the consummation of the transactions herein contemplated and compliance with the terms of this Agreement by the Distributor will not conflict with or constitute a default under any charter, bylaw, indenture, mortgage, deed of trust, lease, rule, regulation, writ, injunction or decree of any government, governmental instrumentality or court, domestic or foreign, having jurisdiction over a Fund, except for such conflicts or defaults that would not reasonably be expected to have a material adverse effect on the business or property of the Distributor; (viii) It has and will continue to have access to the necessary facilities, equipment and personnel to perform its duties and obligations under this Agreement in accordance with industry standards; (ix) Each Fund has filed a registration statement (a "Registration Statement") with the SEC relating to its shares under the Securities Act of 1933, as amended (the "1933 Act"), on Form N-2 which includes a Prospectus. The Registration Statement (including the Prospectus) conforms in all material respects to the requirements of the 1933 Act, the 1940 Act and the rules thereunder; and (x) To the extent required by applicable law, the Funds are registered and their shares are qualified for sale in the jurisdictions listed on Exhibit C unless S2K is notified in writing to the contrary. S2K may rely solely on such representation to the extent that S2K will only market a Fund in those jurisdictions where such Fund is registered. The Distributor otherwise assumes no responsibility or obligation as to S2K's right to market a Fund in any jurisdiction. + +- 6 - + +Source: CC REAL ESTATE INCOME FUND-ADV, POS 8C, 12/5/2018 + + + + + +7. Indemnification. (a) S2K shall indemnify and hold harmless the Distributor and each of its affiliates, officers, directors, employees, agents and control persons (as defined in Section 15 of the 1933 Act or Section 20 of the Securities Exchange Act of 1934, as amended (the "1934 Act")), from and against any loss, liability, claim, damage or expense (including the reasonable cost of investigating or defending any alleged loss, liability, claim, damage or expense and reasonable counsel fees incurred in connection therewith), as incurred, arising in connection with (i) S2K's violation of any of the provisions of this Agreement or (ii) S2K's violation of any applicable law, rule or regulation with respect to its conduct under the Agreement; provided, however, that in no case is the foregoing indemnity to be deemed to protect the Distributor or any of its affiliates, officers, directors, employees, agents or control persons (as defined in Section 15 of the 1933 Act or Section 20 of the 1934 Act) against any liability to which the Distributor or any such person would otherwise be subject by reason of its willful misfeasance, bad faith or gross negligence or by reason of the Distributor's reckless disregard of its obligations and duties under this Agreement. (b) The Distributor shall indemnify and hold harmless S2K and each of its affiliates, directors, officers, employees, agents and control persons (as defined in Section 15 of the 1933 Act or Section 20 of the 1934 Act), from and against any loss, liability, claim, damage or expense (including the reasonable cost of investigating or defending any alleged loss, liability, claim, damage or expense and reasonable counsel fees incurred in connection therewith), as incurred, arising in connection with (i) the Distributor's violation of any of the provisions of this Agreement, (ii) the Distributor's violation of any applicable law, rule or regulation with respect to its conduct under the Agreement, or (iii) any untrue statement of a material fact or any omission of a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading in any advertising or promotional material published or provided by the Distributor to S2K; provided, however, that in no case is the foregoing indemnity to be deemed to protect S2K and its affiliates, directors, officers, employees, agents and control persons (as defined in Section 15 of the 1933 Act or Section 20 of the 1934 Act), against any liability to which S2K or any such person would otherwise be subject by reason of its willful misfeasance, bad faith or gross negligence or by reason of the reckless disregard of S2K's obligations and duties under this Agreement. (c) Any and all claims, losses, cost or expenses shall be limited to actual and direct costs. In no event shall any party be responsible to the other for indirect, special or consequential damages. 8. Confidentiality. (a) Each party to this Agreement shall safeguard and hold confidential from disclosure to unauthorized parties all Confidential Information (as defined below) of the other party or parties. For purposes of this Section 8, the term "Confidential Information" shall mean any and all information which is in any way connected with, derived from or related to the business of a party, including without limitation, any business and financial records, any retail or institutional customer information, computer programs, technical data, investment information, lists, compilations, compositions, programs, plans, devices, descriptions, drawings, methods, techniques, processes, designs, theories concepts or ideas, and any information relating to the pricing or marketing policies, suppliers or customers of a party. + +- 7 - + +Source: CC REAL ESTATE INCOME FUND-ADV, POS 8C, 12/5/2018 + + + + + +(b) Confidential Information shall not include information to the extent such information is (i) already known to the receiving party free of any restriction at the time obtained, including information in the public domain; (ii) subsequently learned from an independent third party free of restriction; (iii) known through no wrongful act of any party; or (iv) independently developed by one party without reference to information which is confidential. (c) For purposes of this Section 8, only the officers, directors and employees and agents of the parties, including their respective accountants, auditors and attorneys, shall be authorized parties, provided those individuals have a "need to know" the Confidential Information that is consistent with their respective positions and legal obligations and responsibilities. In the event that one party (the "Disclosing Party") is requested or required by a court of competent jurisdiction or by any regulatory body which regulates the conduct of the Disclosing Party to disclose any Confidential Information of another party (the "Non-Disclosing Party"), the Disclosing Party shall provide the Non-Disclosing Party with prompt notice of any such request or requirement so that the Non-Disclosing Party may seek a protective order or other appropriate remedy and/or waive compliance with the provisions of this Agreement. If, in the absence of a protective order or other remedy or the receipt of a waiver by the Non-Disclosing Party, the Disclosing Party is nonetheless, in the opinion of counsel, required to disclose Confidential Information, the Disclosing Party may, without liability hereunder, disclose only that portion of the Confidential Information which such counsel advises the Disclosing Party is required to be disclosed, provided that the Disclosing Party attempt to preserve the confidentiality of the Confidential Information, including, without limitation, by cooperating with the Non-Disclosing Party, at the Non-Disclosing Party's expense, to obtain an appropriate protective order or other reliable assurance that confidential treatment will be accorded the Confidential Information. (d) Each party further acknowledges and agrees that, in the event of a breach by it of the provisions of this Section 8, the other party or parties will suffer irreparable harm and damages and, accordingly, shall be entitled to seek injunctive or other equitable relief in a court of competent jurisdiction. (e) The provisions of this Section 8 shall survive any termination of this Agreement. 9. Fund Materials. S2K shall be entitled to produce materials ("Fund Materials") for use in marketing a Fund as described herein, so long as the Fund Materials are produced, reviewed, principally approved, used and filed, where necessary, in accordance with FINRA and SEC regulations and those of any jurisdiction in which a Fund is solicited through use of the Fund Materials. All expenses and costs attributable to the foregoing provision shall be borne by S2K in accordance with Section 2 and Section 5 herein. S2K shall remain liable for any representations made by it or contained in materials produced and approved by S2K for use in marketing the Funds. 10. Relationship of the Parties. In carrying out the provisions of this Agreement, S2K is, for all purposes, an independent contractor and none of S2K's offices, directors, employees or representatives is an employee of the Distributor. As an independent contractor, S2K has no authority, express or implied, to speak for, act for or bind the Distributor in any manner whatsoever. + +- 8 - + +Source: CC REAL ESTATE INCOME FUND-ADV, POS 8C, 12/5/2018 + + + + + +11. Regulatory Issues. (a) It is understood and agreed that in performing S2K's duties under this Agreement, S2K hereby undertakes to, and will use commercially reasonable efforts to cause each of its representatives, officers, directors or employees who perform services under this Agreement to act in a manner consistent with written instructions received from the Distributor. (b) Each party hereto agrees that any "Nonpublic Personal Information," as the term is defined in Regulation S-P (17 CFR 248.1 - 248.30) ("Reg S-P"), may be disclosed by a party hereunder only for the specific purpose of permitting the other party or parties to perform services set forth in this Agreement. Each party agrees that with respect to such information, it will comply with Reg S-P and any other applicable Federal or state regulations and that it will not disclose any Nonpublic Personal Information received in connection with this Agreement to any party except to the extent required to carry out the services set forth in this Agreement or as required by applicable law. 12. Use of Names; Marketing Materials. Each party to this Agreement shall obtain the other party's prior written consent before using any marketing or sales literature related to the consenting party, and shall not use the other party's names in any marketing or advertising materials without prior written consent from the consenting party. 13. Miscellaneous Provisions. (a) Notices. All notices and other communications hereunder shall be in writing, shall be deemed to have been given when received or when sent by telex or facsimile, and shall be given to the following addresses (or such other addresses as to which notice is given): To Distributor: ALPS Distributors, Inc. 1290 Broadway, Suite 1100 Denver, Colorado 80203 Attn: Jeremy O. May, President Fax: (303) 623-7850 To S2K: 777 Third Avenue 28t h Floor New York, New York 10017 Attn: Steven Kantor + +- 9 - + +Source: CC REAL ESTATE INCOME FUND-ADV, POS 8C, 12/5/2018 + + + + + +(b) Entire Agreement. This Agreement contains the entire agreement between the parties hereto concerning the transaction contemplated herein and supersedes all prior agreements or understandings between the parties hereto relating to the subject matter hereof. No oral representation, agreement or understanding made by any party hereto shall be valid or binding upon such party or any other party hereto. (c) Amendments. Except as otherwise provided herein, no provision of this Agreement may be amended other than by a writing signed by the Distributor and S2K. (d) Severability; Assignment. Each provision of this Agreement is intended to be severable. If any provision of this Agreement shall be held illegal or made invalid by court decision, statute, rule or otherwise, such illegality or invalidity shall not affect the validity or enforceability of the remainder of this Agreement. No party to this Agreement has the right to assign any of its rights or obligations hereunder, except as already set forth under this Agreement. (e) Headings. The headings in this Agreement are inserted for convenience and identification only and are in no way intended to describe, interpret, define or limit the size, extent or intent of this Agreement or any provision hereof. (f) Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same agreement. (g) Application of Law; Consent to Jurisdiction. This Agreement and the application and interpretation hereof shall be governed exclusively by the laws of the State of Colorado. The parties to this Agreement agree that any appropriate state or any Federal Court located in Denver, Colorado shall have exclusive jurisdiction of any case or controversy arising under or in connection with this Agreement and shall be a proper forum in which to adjudicate such case of controversy. The parties hereto consent to the jurisdiction of such courts. (Signature page follows) + +- 10 - + +Source: CC REAL ESTATE INCOME FUND-ADV, POS 8C, 12/5/2018 + + + + + +IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written. "Distributor" ALPS DISTRIBUTORS, INC. By: Name: Steven B. Price Its: Senior Vice President and Director of Distribution Services S2K FINANCIAL LLC By: Name: Steven Kantor Its: Chief Executive Officer [Signature Page to Wholesale Marketing Agreement] + +Source: CC REAL ESTATE INCOME FUND-ADV, POS 8C, 12/5/2018 + + + + + +Exhibit A NorthStar Real Estate Capital Income Fund NorthStar Real Estate Capital Income Fund-T NorthStar Real Estate Capital Income Fund-ADV NorthStar Real Estate Capital Income Fund-C + +Exhibit A + +Source: CC REAL ESTATE INCOME FUND-ADV, POS 8C, 12/5/2018 + + + + + +Exhibit B Fee Schedule At the direction of each Fund set forth in Exhibit A to this Agreement, ALPS or its designated agent will facilitate the payment of the applicable dealer reallowance fee to S2K (as a percentage of the offering price) in the amounts set forth in each such Fund's then-current Prospectus. Note: The following applies to all Funds set forth in Exhibit A to this Agreement with the exception of the NorthStar/Townsend Institutional Real Estate Fund Inc.: In no event will a Fund's aggregate selling commissions, dealer manager fees and distribution and servicing fees, if applicable, exceed 8.0% of the aggregate gross proceeds raised in the Fund's offering. Therefore, the Distributor's facilitation of the dealer reallowance payments set forth in each Fund's then-current Prospectus shall cease with respect to the applicable Fund as of the date such 8.0% threshold has been reached with respect to such Fund. + +Exhibit B + +Source: CC REAL ESTATE INCOME FUND-ADV, POS 8C, 12/5/2018 + + + + + +Exhibit C Jurisdictions [List of jurisdictions where the Funds are registered for sale] + +Exhibit C + +Source: CC REAL ESTATE INCOME FUND-ADV, POS 8C, 12/5/2018 \ No newline at end of file diff --git a/full_contract_txt/CerenceInc_20191002_8-K_EX-10.4_11827494_EX-10.4_Intellectual Property Agreement.txt b/full_contract_txt/CerenceInc_20191002_8-K_EX-10.4_11827494_EX-10.4_Intellectual Property Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..7a750e53471b42d78b325993657c524c75fc826c --- /dev/null +++ b/full_contract_txt/CerenceInc_20191002_8-K_EX-10.4_11827494_EX-10.4_Intellectual Property Agreement.txt @@ -0,0 +1,513 @@ +Exhibit 10.4 + +INTELLECTUAL PROPERTY AGREEMENT + +by and between + +Nuance Communications, Inc. + +and + +Cerence Inc. + +Dated as of September 30, 2019 + +Source: CERENCE INC., 8-K, 10/2/2019 + + + + + +TABLE OF CONTENTS Page ARTICLE I DEFINITIONS + +Section 1.01. Definitions 1 + +ARTICLE II RECORDATION OF INTELLECTUAL PROPERTY RIGHTS ASSIGNMENT AGREEMENTS + +Section 2.01. Intellectual Property Assignment Agreements 5 Section 2.02. Recordation 5 Section 2.03. Security Interests 5 + +ARTICLE III LICENSES AND COVENANTS FROM NUANCE TO SPINCO + +Section 3.01. License Grants 6 Section 3.02. Other Covenants 7 + +ARTICLE IV LICENSES AND COVENANTS FROM SPINCO TO NUANCE + +Section 4.01. License Grants 8 Section 4.02. Other Covenants 9 + +ARTICLE V ADDITIONAL INTELLECTUAL PROPERTY RELATED MATTERS + +Section 5.01. Ownership 10 Section 5.02. Assignments and Licenses 10 Section 5.03. No Implied Rights 10 Section 5.04. No Obligation To Prosecute or Maintain Patents 10 Section 5.05. No Technical Assistance 10 Section 5.06. Group Members 10 + +ARTICLE VI CONFIDENTIAL INFORMATION + +Section 6.01. Confidentiality 10 Section 6.02. Disclosure of Confidential Technical Information 11 Section 6.03. Compulsory Disclosure of Confidential Technical Information 11 + +ARTICLE VII LIMITATION OF LIABILITY AND WARRANTY DISCLAIMER i + +Source: CERENCE INC., 8-K, 10/2/2019 + + + + + +Section 7.01. Limitation on Liability 11 Section 7.02. Disclaimer of Representations and Warranties 11 + +ARTICLE VIII TRANSFERABILITY AND ASSIGNMENT + +Section 8.01. No Assignment or Transfer Without Consent 12 Section 8.02. Divested Businesses 12 + +ARTICLE IX TERMINATION + +Section 9.01. Termination by Both Parties 13 Section 9.02. Termination prior to the Distribution 13 Section 9.03. Effect of Termination; Survival 13 + +ARTICLE X FURTHER ASSURANCES + +Section 10.01. Further Assurances 13 + +ARTICLE XI MISCELLANEOUS + +Section 11.01. Counterparts; Entire Agreement; Corporate Power 14 Section 11.02. Dispute Resolution 14 Section 11.03. Governing Law; Jurisdiction 15 Section 11.04. Waiver of Jury Trial 15 Section 11.05. Court-Ordered Interim Relief 15 Section 11.06. Specific Performance 16 Section 11.07. Third-Party Beneficiaries 16 Section 11.08. Notices 16 Section 11.09. Import and Export Control 17 Section 11.10. Bankruptcy 17 Section 11.11. Severability 18 Section 11.12. Expenses 18 Section 11.13. Headings 18 Section 11.14. Survival of Covenants 18 Section 11.15. Waivers of Default 18 Section 11.16. Amendments 18 Section 11.17. Interpretation 19 SCHEDULE A - Fields of Use SCHEDULE B - Nuance Data SCHEDULE C - SpinCo Data SCHEDULE D - SpinCo Patents SCHEDULE E - SpinCo IDs SCHEDULE F - SpinCo Trademarks ii + +Source: CERENCE INC., 8-K, 10/2/2019 + + + + + +SCHEDULE G - SpinCo Domain Names SCHEDULE H - Technology Assets SCHEDULE I - OEM Technology + +EXHIBIT A1 - Patent Assignment Agreement EXHIBIT A2 - Trademark Assignment Agreement EXHIBIT A3 - Domain Name Assignment Agreement EXHIBIT A4 - Invention Disclosure Assignment Agreement iii + +Source: CERENCE INC., 8-K, 10/2/2019 + + + + + +INTELLECTUAL PROPERTY AGREEMENT, dated as of September 30, 2019 (this "Agreement"), by and between NUANCE COMMUNICATIONS, INC., a Delaware corporation ("Nuance"), and CERENCE INC., a Delaware corporation ("SpinCo"). + +RECITALS + +WHEREAS, in connection with the contemplated Spin-Off of SpinCo and concurrently with the execution of this Agreement, Nuance and SpinCo are entering into a Separation and Distribution Agreement (the "Separation Agreement"); + +WHEREAS, pursuant to the Separation Agreement and the other Ancillary Agreements, as of the Distribution Date, the Nuance IP has been allocated to the Nuance Group and the SpinCo IP has been allocated to the SpinCo Group; + +WHEREAS, the Parties wish to record the transfers of any registrations or applications of Nuance IP and SpinCo IP, as applicable, to the extent the ownership thereof has transferred from a member of the Nuance Group to a member of the SpinCo Group, or vice versa, pursuant to the Separation Agreement or any other Ancillary Agreement; + +WHEREAS, pursuant to the Separation Agreement and the other Ancillary Agreements, as of the Distribution Date, the Nuance IP allocated to the Nuance Group includes the Nuance Patents, the Nuance Shared Technology Assets and the Nuance Data, and the SpinCo IP allocated to the SpinCo Group includes the SpinCo Patents, the SpinCo Shared Technology Assets and the SpinCo Data; + +WHEREAS, it is the intent of the Parties that Nuance grant a license to SpinCo under the Nuance Patents and the Nuance Shared Technology Assets, and provide certain rights or services to the SpinCo Group with respect to the Nuance Data, in each case for the SpinCo Field of Use, subject to the terms and conditions set forth in this Agreement; and + +WHEREAS, it is the intent of the Parties that SpinCo grant a license to Nuance under the SpinCo Patents and the SpinCo Shared Technology Assets, and provide certain rights or services to the Nuance Group with respect to certain of the SpinCo Data, in each case for the Nuance Field of Use, subject to the terms and conditions set forth in this Agreement. + +NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained in this Agreement, the Parties, intending to be legally bound, hereby agree as follows: + +ARTICLE I DEFINITIONS + +Section 1.01. Definitions. As used in this Agreement, the following terms have the meanings set forth below and herein, and the terms defined in Schedules shall have the meanings set forth therein. Capitalized terms used, but not defined in this Agreement shall have the meanings ascribed to such terms in the Separation Agreement or any other Ancillary Agreement, as applicable. + +Source: CERENCE INC., 8-K, 10/2/2019 + + + + + +"Bankruptcy Code" has the meaning set forth in Section 11.10. + +"Confidential Technical Information" means, with respect to each Disclosing Party, any confidential Data, Trade Secrets or Technology source code within the Nuance IP or SpinCo IP, as applicable, that is in the Receiving Party's possession or that the Receiving Party obtains pursuant to the terms of this Agreement, together with any tangible or electronic expressions or embodiments thereof; provided, that "Confidential Technical Information" shall not include information that is or was (i) publicly known at the time of disclosure or thereafter without any breach of this Agreement by the Receiving Party or its Group or (ii) subsequently made known to the Receiving Party or its Group from a source unconnected with either Party or its Group. + +"Copyrights" means copyrights, works of authorship (including all translations, adaptations, derivations and combinations thereof), mask works, designs and database rights, including, in each case, any registrations and applications therefor. + +"Data" means all data, databases and collections and compilations of data, in any form or medium. + +"Disclosing Party" means each Party in its capacity as the discloser of Confidential Technical Information, as applicable. + +"Divested Entity" has the meaning set forth in Section 8.02. + +"Domain Name Assignment Agreement" has the meaning set forth in Section 2.01. + +"Domain Names" means Internet domain names, including top level domain names and global top level domain names, URLs, social media identifiers, handles and tags. + +"Intellectual Property Assignment Agreements" has the meaning set forth in Section 2.01. + +"Intellectual Property Rights" or "IPR" means any and all intellectual property rights existing anywhere in the world associated with any and all (i) Patents, (ii) Trademarks, (iii) Copyrights, (iv) Domain Names, (v) rights in Technology, (vi) rights in Trade Secrets, (vii) rights in Data, (viii) all tangible embodiments of the foregoing in whatever form or medium and (ix) any other legal protections and rights related to any of the foregoing. "Intellectual Property Rights" specifically excludes contractual rights (including license grants from third parties). + +"Invention Disclosure Assignment Agreement" has the meaning set forth in Section 2.01. + +"Nuance Data" means any Data that is (i) owned by a Third Party and licensed to the Nuance Group as of immediately prior to the Distribution pursuant to a Nuance Data Agreement or (ii) owned by the Nuance Group as of immediately prior to the Distribution but subject to a Nuance Data Agreement, in each case (i) and (ii), which Data is used in the SpinCo Business as of immediately prior to the Distribution. 2 + +Source: CERENCE INC., 8-K, 10/2/2019 + + + + + +"Nuance Data Agreement" means each Contract identified in Schedule B. + +"Nuance Field of Use" has the meaning set forth in Schedule A. + +"Nuance IP" means all Intellectual Property Rights owned by the Nuance Group or the SpinCo Group as of immediately prior to the Distribution, other than the SpinCo IP. + +"Nuance Patents" means all Patents included within the Nuance IP. + +"Nuance Shared Technology Assets" means (i) the Nuance Technology Assets identified on Schedule H-2 and (ii) any other Nuance Technology Assets not identified on Schedule H-2 that are used in the SpinCo Business as of immediately prior to the Distribution; provided that the "Nuance Shared Technology Assets" exclude any OEM Technology. + +"Nuance Technology Assets" means all of the Technology owned by the Nuance Group or the SpinCo Group as of immediately prior to the Distribution, excluding the SpinCo Technology Assets. For the avoidance of doubt, the "Nuance Technology Assets" include the Technology identified on Schedule H-1. + +"Nuance Trademarks" means the Trademarks included in the Nuance IP. + +"OEM Technology" means the Technology identified on Schedule I, each of which shall be subject to a separate agreement. + +"Party" means either party hereto, and "Parties" means both parties hereto. + +"Patent Assignment Agreement" has the meaning set forth in Section 2.01. + +"Patents" means patents (including all reissues, divisionals, continuations, continuations-in-part, reexaminations, supplemental examinations, inter partes review, post-grant oppositions, covered business methods reviews, substitutions and extensions thereof), patent registrations and applications, including provisional applications, statutory invention registrations, invention disclosures and inventions. + +"Permitted Recipients" has the meaning set forth in Section 6.02. + +"Receiving Party" means each Party in its capacity as the recipient of Confidential Technical Information, as applicable. + +"Software" means any and all (i) computer programs and applications, including any and all software implementations of algorithms, models and methodologies, whether in source code, object code, human readable form or other form, including operating software, network software, firmware, middleware, design software, design tools, ASP, HTML, DHTML, SHTML and XML files, cgi and other scripts, APIs and web widgets, (ii) descriptions, flow charts and other work product used to design, plan, organize and develop any of the foregoing, screens, user interfaces, report formats, firmware, development tools, templates, menus, buttons and icons, (iii) all documentation including user manuals and other training documentation related to any of the foregoing and (iv) all tangible embodiments of the foregoing in whatever 3 + +Source: CERENCE INC., 8-K, 10/2/2019 + + + + + +form or medium now known or yet to be created, including all disks, diskettes and tapes; provided, that "Software" does not include Data. + +"SpinCo Copyrights" means unregistered Copyrights that are owned by the Nuance Group or the SpinCo Group and exclusively related to the SpinCo Business as of immediately prior to the Distribution; provided, that the "SpinCo Copyrights" do not include any Technology or SpinCo Data. + +"SpinCo Data" means any Data that is (i) owned by a Third Party and licensed to the Nuance Group or SpinCo Group as of immediately prior to the Distribution pursuant to a SpinCo Data Agreement or (ii) owned by the Nuance Group or SpinCo Group as of immediately prior to the Distribution but subject to a SpinCo Data Agreement and (iii) Data owned by the Nuance Group or SpinCo Group and exclusively related to the SpinCo Business as of immediately prior to the Distribution. + +"SpinCo Data Agreement" means each Contract identified in Schedule C. + +"SpinCo Domain Names" means the Domain Names identified on Schedule G, in each case excluding any Trademarks containing "Nuance" or any transliteration or translation thereof or any version of the "Nuance and Design" logo. + +"SpinCo Field of Use" has the meaning set forth in Schedule A. + +"SpinCo IDs" means the invention disclosures identified on Schedule E. + +"SpinCo IP" means (i) the SpinCo Patents, (ii) the SpinCo Copyrights, (iii) the SpinCo Domain Names, (iv) the SpinCo Trade Secrets, (v) the SpinCo Trademarks, (vi) the SpinCo IDs, (vii) the SpinCo Technology Assets and (viii) the SpinCo Data. + +"SpinCo Patents" means the Patents identified on Schedule D. + +"SpinCo Shared Technology Assets" means the SpinCo Technology Assets identified on Schedule H-4. For the avoidance of doubt, the "SpinCo Shared Technology Assets" exclude any OEM Technology. + +"SpinCo Technology Assets" means the Technology identified on Schedule H-3. + +"SpinCo Trade Secrets" means the Trade Secrets known to the Parties that are owned by the Nuance Group or SpinCo Group and exclusively related to the SpinCo Business as of immediately prior to the Distribution; provided, that the "SpinCo Trade Secrets" do not include any Technology or SpinCo Data. + +"SpinCo Trademarks" means the Trademarks identified on Schedule F. + +"Technology" means Software, technical documentation, specifications, schematics, designs, user interfaces, test reports, bills of material, build instructions, lab notebooks, prototypes, samples, programs, routines, subroutines, tools, materials, apparatus, and all recordings, graphs, drawings, reports, analyses, other writings, disks, diskettes and tapes, 4 + +Source: CERENCE INC., 8-K, 10/2/2019 + + + + + +together with all Intellectual Property Rights (other than Patents and Trademarks) in the foregoing. + +"Third Party" means any Person (including any Governmental Authority) who is not a member of the Nuance Group or the SpinCo Group. + +"Trade Secrets" means all information, in any form or medium, to the extent that the owner thereof has taken reasonable measures to keep such information secret and the information derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable through proper means by, the public. + +"Trademark Assignment Agreement" has the meaning set forth in Section 2.01. + +"Trademarks" means trademarks, service marks, trade names, logos, slogans, trade dress or other source identifiers, including any registration or any application for registration therefor, together with all goodwill associated therewith. + +ARTICLE II RECORDATION OF INTELLECTUAL PROPERTY RIGHTS ASSIGNMENT AGREEMENTS + +Section 2.01. Intellectual Property Assignment Agreements. In order to carry out the intent of the Parties with respect to the recordation of the transfers of any registrations or applications of Nuance IP or SpinCo IP, as applicable, to the extent the ownership thereof has transferred from a member of the Nuance Group to a member of the SpinCo Group, or vice versa, pursuant to the Separation Agreement or any other Ancillary Agreement, the Parties shall execute intellectual property assignments in a form substantially similar to that attached as Exhibit A1 (the "Patent Assignment Agreement"), Exhibit A2 (the "Trademark Assignment Agreement"), Exhibit A3 (the "Domain Name Assignment Agreement") and Exhibit A4 (the "Invention Disclosure Assignment Agreement") as well as such additional case specific assignments as deemed appropriate or necessary under applicable Laws (collectively, the "Intellectual Property Assignment Agreements") for recordation with the appropriate Governmental Authority. + +Section 2.02. Recordation. The relevant assignee Party shall have the sole responsibility, at its sole cost and expense, to file the Intellectual Property Assignment Agreements and any other forms or documents with the appropriate Governmental Authorities as required to record the transfer of any registrations or applications of Nuance IP or SpinCo IP that is allocated under the Separation Agreement, as applicable, and the relevant assignor Party hereby consents to such recordation. + +Section 2.03. Security Interests. Prior to, on and after the Distribution Date, each Party shall cooperate with the other Party, without any further consideration and at no expense to the other Party, to obtain, cause to be obtained or properly record the release of any outstanding Security Interest attached to any Nuance IP or SpinCo IP that is subject to assignment from one Party or its Group to the other Party or its Group hereunder, as applicable, and to take, or cause to be taken, all actions as the other Party may reasonably be requested to take in order to obtain, cause to be obtained or properly record such release. 5 + +Source: CERENCE INC., 8-K, 10/2/2019 + + + + + +ARTICLE III LICENSES AND COVENANTS FROM NUANCE TO SPINCO + +Section 3.01. License Grants. + +(a) Patents. Subject to the terms and conditions of this Agreement, as of the Distribution Date, Nuance hereby grants to SpinCo and the members of the SpinCo Group a worldwide, non-exclusive, fully paid-up, perpetual and irrevocable, transferable (subject to ARTICLE VIII), sublicensable (subject to Section 3.01(g)) license under the Nuance Patents, solely to the extent that claims of the Nuance Patents cover products or services of the SpinCo Business in the SpinCo Field of Use, together with natural extensions and evolutions thereof, in each case to make, have made, use, sell, offer for sale, import and otherwise exploit such products and services, together with natural extensions and evolutions thereof. + +(b) Technology. Subject to the terms and conditions of this Agreement, as of the Distribution Date, Nuance hereby grants to SpinCo and the members of the SpinCo Group a worldwide, non-exclusive, fully paid-up, perpetual and irrevocable, transferable (subject to ARTICLE VIII), sublicensable (subject to Section 3.01(g)) license to install, access, use, reproduce, perform, display, modify (including the right to create improvements and derivative works), further develop, sell, manufacture, distribute and market products and services based on, using or incorporating the Nuance Shared Technology Assets within the SpinCo Field of Use, together with natural extensions and evolutions thereof. + +(c) Other Nuance Shared IP. Subject to the terms and conditions of this Agreement, as of the Distribution Date, Nuance hereby grants to SpinCo and the members of the SpinCo Group a worldwide, non-exclusive, fully paid-up, perpetual and irrevocable, transferable (subject to ARTICLE VIII), sublicensable (subject to Section 3.01(g)) license to continue to use any Nuance IP (other than Nuance Patents, Nuance Technology Assets, Nuance Trademarks and Nuance Data), in each case solely as and to the extent that it is used by the SpinCo Group in connection with products and services of the SpinCo Business within the SpinCo Field of Use, together with natural extensions and evolutions thereof. + +(d) Trademarks. The Parties acknowledge and agree that no rights are granted to the SpinCo Group in this Agreement with respect to any Trademarks or Domain Names, provided that certain rights and obligations with respect to the use by the SpinCo Group of certain Nuance Trademarks and related Domain Names shall be set forth in the Transitional Trademark License Agreement. To the extent there is a conflict between the terms of this Agreement and the Transitional Trademark License Agreement, the terms of the Transitional Trademark License Agreement shall control. + +(e) Nuance Data. The Parties acknowledge and agree that certain rights and obligations with respect to the use or benefit by the SpinCo Group of certain Nuance Data shall be as provided in Schedule B. + +(f) OEM Technology. Notwithstanding the foregoing, the Parties acknowledge and agree that this Section 3.01 does not grant any rights or licenses to any OEM Technology, which is subject to certain separate agreements between the Parties, and to the 6 + +Source: CERENCE INC., 8-K, 10/2/2019 + + + + + +extent there is a conflict between this Agreement and such separate agreements, such separate agreements shall control. + +(g) Sublicenses. The licenses granted in Sections 3.01(a), (b) and (c) to the SpinCo Group include the right to grant sublicenses within the scope of such licenses only to members of the SpinCo Group and, without any further right to sublicense, to their respective (i) contractors, distributors, manufacturers and resellers, in each case solely for the benefit of the SpinCo Business, and (ii) end users and customers, in each case solely in connection with the use of products and services of the SpinCo Business. Notwithstanding the forgoing, subject to Section 3.02(b) and ARTICLE VI, members of the SpinCo Group may only sublicense the Nuance Shared Technology Assets pursuant to terms and conditions as protective as those under which it licenses its own Technology of a similar nature and value, and in any event terms and conditions that provide for commercially reasonable protection for the source code, structure and other confidential and proprietary elements of the Nuance Shared Technology Assets. The SpinCo Group shall remain liable for any breach or default of the applicable terms and conditions of this Agreement by any of its sublicensees. + +Section 3.02. Other Covenants. + +(a) SpinCo hereby acknowledges Nuance's right, title and interest in and to the Nuance IP. SpinCo agrees that it will not (i) oppose, challenge, petition to cancel, contest or threaten in any way, or assist another party in opposing, challenging, petitioning to cancel, contesting or threatening in any way, any application or registration by Nuance or its Affiliates or their respective licensees for any Nuance IP, (ii) engage in any act, or purposefully omit to perform any act, that impairs or adversely affects the rights of Nuance or any member of the Nuance Group in and to any Nuance IP or (iii) apply for any registration (including federal, state and national registrations) with respect to the Nuance IP. + +(b) With respect to the Nuance Shared Technology Assets, SpinCo agrees that it will not (i) engage in any act, or purposefully omit to perform any act, that impairs or adversely affects the rights of Nuance or any member of the Nuance Group in and to any Nuance Shared Technology Assets, (ii) use the Nuance Shared Technology Assets on a service bureau, time sharing or similar basis, or for the benefit of any other Person, (iii) remove any proprietary markings in the Nuance Shared Technology Assets, (iv) incorporate or otherwise combine or integrate any open source software with or into the Nuance Shared Technology Assets such that the Nuance Shared Technology Assets, or any part thereof, becomes subject to any "open source," "copyleft" or similar type of license terms (including, without limitation, any license that is or was recognized as an open source software license by the Open Source Initiative), (v) reverse engineer, reverse assemble or decompile the Nuance Shared Technology Assets or any software component of the Nuance Shared Technology Assets or (vi) disclose, distribute or otherwise provide or permit access to source code of any Nuance Shared 7 + +Source: CERENCE INC., 8-K, 10/2/2019 + + + + + +Technology Assets other than to commercial source code escrow providers who are only permitted to make such source code available to third parties that have entered into an escrow agreement with a member of the SpinCo Group and escrow provider. + +ARTICLE IV LICENSES AND COVENANTS FROM SPINCO TO NUANCE + +Section 4.01. License Grants. + +(a) Patents. Subject to the terms and conditions of this Agreement, as of the Distribution Date, SpinCo hereby grants to Nuance and the members of the Nuance Group a worldwide, non-exclusive, fully paid-up, perpetual and irrevocable, transferable (subject to ARTICLE VIII), sublicensable (subject to Section 4.01(g)) license under the SpinCo Patents, solely to the extent that claims of the SpinCo Patents cover products or services of the Nuance Business in the Nuance Field of Use, together with natural extensions and evolutions thereof, in each case to make, have made use, sell, offer for sale, import and otherwise exploit such products and services, together with natural extensions and evolutions thereof. + +(b) Technology. Subject to the terms and conditions of this Agreement, as of the Distribution Date, SpinCo hereby grants to Nuance and the members of the Nuance Group a worldwide, non-exclusive, fully paid-up, perpetual and irrevocable, transferable (subject to ARTICLE VIII), sublicensable (subject to Section 4.01(g)) license to install, access, use, reproduce, perform, display, modify (including the right to create improvements and derivative works), further develop, sell, manufacture, distribute and market products and services based on, using or incorporating the SpinCo Shared Technology Assets within the Nuance Field of Use, together with natural extensions and evolutions thereof. + +(c) Other SpinCo Shared IP. Subject to the terms and conditions of this Agreement, as of the Distribution Date, SpinCo hereby grants to Nuance and the members of the Nuance Group a worldwide, non-exclusive, fully paid-up, perpetual and irrevocable, transferable (subject to ARTICLE VIII), sublicensable (subject to Section 4.01(g)) license to continue to use any SpinCo IP (other than SpinCo Patents, SpinCo Technology Assets, SpinCo Trademarks, SpinCo Domain Names and SpinCo Data), in each case solely as and to the extent that it is used by the Nuance Group in connection with products and services of the Nuance Business within the Nuance Field of Use, together with natural extensions and evolutions thereof. + +(d) Trademarks. The Parties acknowledge and agree that no rights are granted to the Nuance Group in this Agreement with respect to any Trademarks or Domain Names. + +(e) SpinCo Data. The Parties acknowledge and agree that certain rights and obligations with respect to the use or benefit of the Nuance Group of certain SpinCo Data shall be as provided in Schedule C. + +(f) OEM Technology. Notwithstanding the foregoing, the Parties acknowledge and agree that this Section 4.01 does not grant any rights or licenses to any OEM Technology, which is subject to certain separate agreements between the Parties, and to the 8 + +Source: CERENCE INC., 8-K, 10/2/2019 + + + + + +extent there is a conflict between this Agreement and such separate agreements, such separate agreements shall control. + +(g) Sublicenses. The licenses granted in Sections 4.01(a), (b) and (c) to the Nuance Group include the right to grant sublicenses within the scope of such licenses only to members of the Nuance Group and, without any further right to sublicense, to their respective (i) contractors, distributors, manufacturers and resellers, in each case solely for the benefit of the Nuance Business and (ii) end users and customers, in each case solely in connection with the use of products and services of the Nuance Business. Notwithstanding the forgoing, subject to Section 4.02(b) and ARTICLE VI, members of the Nuance Group may only sublicense the SpinCo Shared Technology Assets pursuant to terms and conditions as protective as those under which it licenses its own Technology of a similar nature and value, and in any event terms and conditions that provide for commercially reasonable protection for the source code, structure and other confidential and proprietary elements of the SpinCo Shared Technology Assets. The Nuance Group shall remain liable for any breach or default of the applicable terms and conditions of this Agreement by any of its sublicensees. + +Section 4.02. Other Covenants. + +(a) Nuance hereby acknowledges SpinCo's right, title and interest in and to the SpinCo IP. Nuance agrees that it will not (i) oppose, challenge, petition to cancel, contest or threaten in any way, or assist another party in opposing, challenging, petitioning to cancel, contesting or threatening in any way, any application or registration by SpinCo or its Affiliates or their respective licensees for any SpinCo IP, (ii) engage in any act, or purposefully omit to perform any act, that impairs or adversely affects the rights of SpinCo or any member of the SpinCo Group in and to any SpinCo IP or (iii) apply for any registration (including federal, state and national registrations) with respect to the SpinCo IP. + +(b) With respect to the SpinCo Shared Technology Assets, Nuance agrees that it will not (i) engage in any act, or purposefully omit to perform any act, that impairs or adversely affects the rights of SpinCo or any member of the SpinCo Group in and to any SpinCo Shared Technology Assets, (ii) use the SpinCo Shared Technology Assets on a service bureau, time sharing or similar basis, or for the benefit of any other Person, (iii) remove any proprietary markings in the SpinCo Shared Technology Assets, (iv) incorporate or otherwise combine or integrate any open source software with or into the SpinCo Shared Technology Assets such that the SpinCo Shared Technology Assets, or any part thereof, becomes subject to any "open source," "copyleft" or similar type of license terms (including, without limitation, any license that is or was recognized as an open source software license by the Open Source Initiative), (v) reverse engineer, reverse assemble or decompile the SpinCo Shared Technology Assets or any software component of the SpinCo Shared Technology Assets or (vi) disclose, distribute or otherwise provide or permit access to source code of any SpinCo Shared 9 + +Source: CERENCE INC., 8-K, 10/2/2019 + + + + + +Technology Assets other than to commercial source code escrow providers who are only permitted to make such source code available to third parties that have entered into an escrow agreement with a member of the Nuance Group and escrow provider. + +ARTICLE V ADDITIONAL INTELLECTUAL PROPERTY RELATED MATTERS + +Section 5.01. Ownership. The Party receiving the license hereunder acknowledges and agrees that the Party (or the applicable member of its Group) granting the license is the sole and exclusive owner of the Intellectual Property Rights so licensed. + +Section 5.02. Assignments and Licenses. Any assignment, other transfer or license by either Party or any member of its Group of any Intellectual Property Rights licensed to the other Party or any member of its Group pursuant to ARTICLE III or ARTICLE IV, respectively, shall be subject to the applicable licenses, covenants and restrictions set forth herein. + +Section 5.03. No Implied Rights. Nothing contained in this Agreement shall be construed as conferring any rights (including the right to sublicense) by implication, estoppel or otherwise, under any Intellectual Property Rights, other than as expressly granted in this Agreement, and all other rights under any Intellectual Property Rights licensed to a Party or the members of its Group hereunder are expressly reserved by the Party granting the license. + +Section 5.04. No Obligation To Prosecute or Maintain Patents. Except as expressly set forth in this Agreement, no Party or any member of its Group shall have any obligation to seek, perfect or maintain any protection for any of its Intellectual Property Rights. Without limiting the generality of the foregoing, except as expressly set forth in this Agreement, no Party or any member of its Group shall have any obligation to file any Patent application, to prosecute any Patent, or secure any Patent rights or to maintain any Patent in force. + +Section 5.05. No Technical Assistance. Except as expressly set forth in this Agreement, in the Separation Agreement or any other mutually executed agreement between the Parties or any of the members of their respective Groups, no Party or any member of its Group shall be required to provide the other Party with any technical assistance or to furnish any other Party with, or obtain on their behalf, any Intellectual Property Rights-related documents, materials or other information or technology. + +Section 5.06. Group Members. Each Party shall cause the members of its Group to comply with all applicable provisions of this Agreement. + +ARTICLE VI CONFIDENTIAL INFORMATION + +Section 6.01. Confidentiality. Without limiting Section 6.02, all confidential information of a Party disclosed to the other Party under this Agreement shall be deemed confidential and proprietary information of the disclosing Party, shall be subject to the provisions of Section 7.09 of the Separation Agreement and may be used by the Receiving Party pursuant to this Agreement for the sole and express purpose of effecting the licenses granted herein. 10 + +Source: CERENCE INC., 8-K, 10/2/2019 + + + + + +Section 6.02. Disclosure of Confidential Technical Information. Except as expressly permitted by this Agreement, including in Section 3.02(b)(vi) or Section 4.02(b)(vi), the Receiving Party shall not, and shall not permit any other Person to, disclose any Confidential Technical Information to any Person without prior written consent of the Disclosing Party, except that the Receiving Party may disclose the Confidential Technical Information solely to those employees and contractors of the Receiving Party who have a need to know the Confidential Technical Information in connection with designing, developing, distributing, marketing, testing and supporting any products or services of the Receiving Party within the Nuance Field of Use or SpinCo Field of Use, as applicable (collectively, the "Permitted Recipients"); provided, that prior to such disclosure the Receiving Party shall notify each such Permitted Recipient in writing of the use and disclosure restrictions set forth in this Agreement and ensure that such Permitted Recipient is bound by confidentiality obligations with respect thereto. The Receiving Party shall take, at its sole expense, all reasonable measures to prevent any prohibited or unauthorized disclosure or use of any Confidential Technical Information, including by its Permitted Recipients, and shall be liable for any breaches of this Agreement by any of its Permitted Recipients, in each case, as if committed by the Receiving Party. + +Section 6.03. Compulsory Disclosure of Confidential Technical Information. If the Receiving Party receives a request to disclose any Confidential Technical Information pursuant to a subpoena or other order of a Governmental Authority: (i) the Receiving Party shall promptly notify in writing the Disclosing Party thereof and reasonably consult with and assist the Disclosing Party in seeking a protective order or other appropriate remedy to limit such disclosure, (ii) in the event that such protective order or remedy is not obtained, the Receiving Party shall disclose only that portion of the Confidential Technical Information which, in the written opinion of the Receiving Party's legal counsel, is legally required to be disclosed, and the Receiving Party shall use reasonable best efforts to ensure confidential treatment of any such disclosed Confidential Technical Information and (iii) the Disclosing Party shall be given an opportunity to review any such Confidential Technical Information prior to disclosure thereof. The Parties shall fully cooperate, to the extent permitted by Law, in any actions the Disclosing Party may take in seeking to prevent or limit such disclosure. Any Confidential Technical Information disclosed under this Section 6.03 shall continue to be deemed Confidential Technical Information for all purposes hereunder, notwithstanding such disclosure. + +ARTICLE VII LIMITATION OF LIABILITY AND WARRANTY DISCLAIMER + +Section 7.01. Limitation on Liability. Without limiting the terms set forth in Section 6.09 of the Separation Agreement, none of Nuance, SpinCo or any other member of either Group shall in any event have any Liability to the other or to any other member of the other's Group under this Agreement for any indirect, special, punitive or consequential damages, whether or not caused by or resulting from negligence or breach of obligations hereunder and whether or not informed of the possibility of the existence of such damages. + +Section 7.02. Disclaimer of Representations and Warranties. Each of Nuance (on behalf of itself and each other member of the Nuance Group) and SpinCo (on behalf of itself and each other member of the SpinCo Group) understands and agrees that, except as expressly set forth in this Agreement, no Party is representing or warranting in any way, including any 11 + +Source: CERENCE INC., 8-K, 10/2/2019 + + + + + +implied warranties of merchantability, fitness for a particular purpose, title, registerability, allowability, enforceability or non-infringement, as to any Intellectual Property Rights licensed hereunder, as to the sufficiency of the Intellectual Property Rights licensed hereunder for the conduct and operations of the SpinCo Business or the Nuance Business, as applicable, as to the value or freedom from any Security Interests of, or any other matter concerning, any Intellectual Property Rights licensed hereunder, or as to the absence of any defenses or rights of setoff or freedom from counterclaim with respect to any claim or other Intellectual Property Rights of any such Party, or as to the legal sufficiency of any assignment, document or instrument delivered hereunder to convey title to any Intellectual Property Rights or thing of value upon the execution, delivery and filing hereof or thereof. Except as may expressly be set forth herein, any such Intellectual Property Rights are being licensed on an "as is," "where is" basis and the respective licensees shall bear the economic and legal risks related to the use of the Nuance IP in the SpinCo Business or the SpinCo IP in the Nuance Business, as applicable. + +ARTICLE VIII TRANSFERABILITY AND ASSIGNMENT + +Section 8.01. No Assignment or Transfer Without Consent. Except as expressly set forth in this Agreement, neither this Agreement nor any of the rights, interests or obligations under this Agreement, including the licenses granted pursuant to this Agreement, shall be assigned, in whole or in part, by operation of Law or otherwise by either Party without the prior written consent of the other Party. Any purported assignment without such consent shall be void. Notwithstanding the foregoing, if any Party to this Agreement (or any of its successors or permitted assigns) (a) shall enter into a consolidation or merger transaction in which such Party is not the surviving entity and the surviving entity acquires or assumes all or substantially all of such Party's assets, (b) shall transfer all or substantially all of such Party's assets to any Person or (c) shall assign this Agreement to such Party's Affiliates, then, in each such case, the assigning Party (or its successors or permitted assigns, as applicable) shall ensure that the assignee or successor-in-interest expressly assumes in writing all of the obligations of the assigning Party under this Agreement, and the assigning Party shall not be required to seek consent, but shall provide written notice and evidence of such assignment, assumption or succession to the non-assigning Party. Subject to the preceding sentences, this Agreement will be binding upon, inure to the benefit of, and be enforceable by, the Parties and their respective successors and assigns. No assignment permitted by this Section 8.01 shall release the assigning Party from liability for the full performance of its obligations under this Agreement. For the avoidance of doubt, in no event will the licenses granted in this Agreement extend to products, services or other activities of the assignee existing on or before the date of the transaction described in clauses (a) or (b) of the preceding sentence, except to the extent that they were licensed under the terms of this Agreement prior to such transaction. + +Section 8.02. Divested Businesses. In the event a Party divests a line of business or line of products or services by (a) spinning off a member of its Group by its sale or other disposition to a Third Party, (b) reducing ownership or control in a member of its Group so that it no longer qualifiers as a member of its Group under this Agreement, (c) selling or otherwise transferring such line of business, products or services to a Third Party or (d) forming a joint venture with a Third Party with respect to such line of business, products or services (each such divested entity or line of business, products or services, a "Divested Entity"), the Divested Entity 12 + +Source: CERENCE INC., 8-K, 10/2/2019 + + + + + +shall retain those licenses granted to it under this Agreement, provided that the license shall be limited to the business, products or services (as applicable) of the Divested Entity as of the date of divestment and such natural development thereof within the Nuance Field of Use (where Nuance is the divesting Party) or SpinCo Field of Use (where SpinCo is the divesting party). The retention of any license grants are subject to the Divested Entity's and, in the event it is acquired by a Third Party, such Third Party's execution and delivery to the non-transferring Party, within 90 days of the effective date of such divestment, of a duly authorized, written undertaking, agreeing to be bound by the applicable terms of this Agreement. For the avoidance of doubt, (i) in no event will the licenses retained by a Divested Entity extend to products, services or other activities of a Third Party acquirer existing on or before the date of the divestment, except to the extent that they were licensed under the terms of this Agreement prior to such divestment, and (ii) in the event that a Divested Entity owns any Intellectual Property Rights licensed to the other Party under this Agreement, such Intellectual Property Rights may be transferred or assignment with such Divested Entity subject to the terms and conditions this Agreement. + +ARTICLE IX TERMINATION + +Section 9.01. Termination by Both Parties. Subject to Section 9.02, this Agreement may not be terminated except by an agreement in writing signed by a duly authorized officer of each of the Parties. + +Section 9.02. Termination prior to the Distribution. This Agreement may be terminated by Nuance at any time, in its sole discretion, prior to the Distribution; provided, however, that this Agreement shall automatically terminate upon the termination of the Separation Agreement in accordance with its terms. + +Section 9.03. Effect of Termination; Survival. In the event of any termination of this Agreement prior to the Distribution, neither Party (nor any member of their Group or any of their respective directors or officers) shall have any Liability or further obligation to the other Party or any member of its Group under this Agreement. Except with respect to termination of the Agreement under Section 9.02, notwithstanding anything in this Agreement to the contrary, ARTICLE I, ARTICLE VI, ARTICLE VII, this Section 9.03 and ARTICLE XI shall survive any termination of this Agreement. + +ARTICLE X FURTHER ASSURANCES + +Section 10.01. Further Assurances. + +(a) In addition to the actions specifically provided for elsewhere in this Agreement, each of the Parties shall use reasonable best efforts, prior to, on and after the Distribution Date, to take, or cause to be taken, all actions, and to do, or cause to be done, all things, reasonably necessary, proper or advisable under applicable Laws and agreements to consummate, and make effective, the transactions contemplated by this Agreement. + +(b) Without limiting the foregoing, prior to, on and after the Distribution Date, each Party shall cooperate with the other Party, without any further 13 + +Source: CERENCE INC., 8-K, 10/2/2019 + + + + + +consideration, but at the expense of the requesting Party: (i) to execute and deliver, or use reasonable best efforts to execute and deliver, or cause to be executed and delivered, all instruments, including any instruments of conveyance, assignment and transfer as such Party may reasonably be requested to execute and deliver by the other Party; (ii) to make, or cause to be made, all filings with, and to obtain, or cause to be obtained, all Consents of any Governmental Authority or any other Person under any permit, license, Contract, indenture or other instrument; and (iii) to take, or cause to be taken, all such other actions as such Party may reasonably be requested to take by the other Party from time to time, consistent with the terms of this Agreement, in order to effectuate the provisions and purposes of this Agreement and any transfers of Intellectual Property Rights or assignments and assumptions of Liabilities related thereto as set forth in the Separation Agreement. + +ARTICLE XI MISCELLANEOUS + +Section 11.01. Counterparts; Entire Agreement; Corporate Power. + +(a) This Agreement may be executed in one or more counterparts, all of which counterparts shall be considered one and the same agreement, and shall become effective when one or more counterparts have been signed by each Party and delivered to the other Party. This Agreement may be executed by facsimile or PDF signature and scanned and exchanged by electronic mail, and such facsimile or PDF signature or scanned and exchanged copies shall constitute an original for all purposes. + +(b) This Agreement and the Exhibits and Schedules hereto contain the entire agreement between the Parties with respect to the subject matter hereof and supersede all previous agreements, negotiations, discussions, writings, understandings, commitments and conversations with respect to such subject matter, and there are no agreements or understandings between the Parties with respect to the subject matter hereof other than those set forth or referred to herein or therein. In the event of conflict or inconsistency between the provisions of this Agreement or the Separation Agreement, the provisions of this Agreement shall prevail. + +(c) Nuance represents on behalf of itself and each other member of the Nuance Group, and SpinCo represents on behalf of itself and each other member of the SpinCo Group, as follows: + +(i) each such Person has the requisite corporate or other power and authority and has taken all corporate or other action necessary in order to execute, deliver and perform this Agreement and to consummate the transactions contemplated hereby; and + +(ii) this Agreement has been duly executed and delivered by it and constitutes, or will constitute, a valid and binding agreement of it enforceable in accordance with the terms thereof. + +Section 11.02. Dispute Resolution. In the event that either Party, acting reasonably, forms the view that another Party has caused a material breach of the terms of this Agreement, then the Party that forms such a view shall serve written notice of the alleged breach on the other Parties and the Parties shall work together in good faith to resolve any such alleged 14 + +Source: CERENCE INC., 8-K, 10/2/2019 + + + + + +breach within thirty (30) days of such notice (a "Dispute"). If any such alleged breach is not so resolved, then a senior executive of each Party shall, in good faith, attempt to resolve any such alleged breach within the following thirty (30) days of the referral of the matter to the senior executives. If no resolution is reached with respect to any such alleged breach in accordance with the procedures contained in this Section 11.02, then the Parties may seek to resolve such matter in accordance with Section 11.03, Section 11.04, Section 11.05 and Section 11.06 + +Section 11.03. Governing Law; Jurisdiction. Any disputes relating to, arising out of or resulting from this Agreement, including to its execution, performance, or enforcement, shall be governed by, and construed in accordance with, the Laws of the State of Delaware, regardless of the Laws that might otherwise govern under applicable principles of conflicts of Laws thereof. Each Party irrevocably consents to the exclusive jurisdiction, forum and venue of the Delaware Court of Chancery (and if the Delaware Court of Chancery shall be unavailable, any Delaware State court or the federal court sitting in the State of Delaware) over any and all claims, disputes, controversies or disagreements between the Parties or any of their respective Affiliates, successors and assigns under or related to this Agreement or any of the transactions contemplated hereby, including their execution, performance or enforcement, whether in contract, tort or otherwise. Each of the Parties hereby agrees that it shall not assert, and shall hereby waive, any claim or right or defense that it is not subject to the jurisdiction of such courts, that the venue is improper, that the forum is inconvenient or any similar objection, claim or argument. Each Party agrees that a final judgment in any legal proceeding resolved in accordance with this Section 11.03, Section 11.04, Section 11.05 and Section 11.06 shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by applicable Law. + +Section 11.04. Waiver of Jury Trial. EACH PARTY HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION RELATING TO, ARISING OUT OF OR RESULTING FROM THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, INCLUDING THEIR EXECUTION, PERFORMANCE OR ENFORCEMENT, WHETHER IN CONTRACT, TORT OR OTHERWISE. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING CONTRACT CLAIMS, TORT CLAIMS (INCLUDING NEGLIGENCE), BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. THIS SECTION HAS BEEN FULLY DISCUSSED BY EACH OF THE PARTIES AND THESE PROVISIONS WILL NOT BE SUBJECT TO ANY EXCEPTIONS. + +Section 11.05. Court-Ordered Interim Relief. In accordance with Section 11.03 and Section 11.04, at any time after giving notice of a Dispute, each Party shall be entitled to interim measures of protection duly granted by a court of competent jurisdiction: (1) to preserve the status quo pending resolution of the Dispute; (2) to prevent the destruction or loss of documents and other information or things relating to the Dispute; or (3) to prevent the transfer, disposition or hiding of assets. Any such interim measure (or a request therefor to a court of competent jurisdiction) shall not be deemed incompatible with the provisions of Section 11.02, Section 11.03 and Section 11.04. Until such Dispute is resolved in accordance with Section 11.02 or final judgment is rendered in accordance with Section 11.03 and Section 11.04, each 15 + +Source: CERENCE INC., 8-K, 10/2/2019 + + + + + +Party agrees that such Party shall continue to perform its obligations under this Agreement and that such obligations shall not be subject to any defense or setoff, counterclaim, recoupment or termination. + +Section 11.06. Specific Performance. Subject to Section 11.02 and Section 11.05, in the event of any actual or threatened default in, or breach of, any of the terms, conditions and provisions of this Agreement, the affected Party shall have the right to specific performance and injunctive or other equitable relief of its rights under this Agreement, in addition to any and all other rights and remedies at Law or in equity, and all such rights and remedies shall be cumulative. The other Party shall not oppose the granting of such relief on the basis that money damages are an adequate remedy. The Parties agree that the remedies at Law for any breach or threatened breach hereof, including monetary damages, are inadequate compensation for any loss and that any defense in any action for specific performance that a remedy at Law would be adequate is waived. Any requirements for the securing or posting of any bond or similar security with such remedy are waived. + +Section 11.07. Third-Party Beneficiaries. Except as otherwise expressly set forth herein or as otherwise may be provided in the Separation Agreement with respect to the rights of any Nuance Indemnitee or SpinCo Indemnitee, in his, her or its respective capacities as such, (a) the provisions of this Agreement are solely for the benefit of the Parties hereto and are not intended to confer upon any Person except the Parties hereto any rights or remedies hereunder and (b) there are no third-party beneficiaries of this Agreement and this Agreement shall not provide any third person with any remedy, claim, liability, reimbursement, cause of action or other right in excess of those existing without reference to this Agreement. + +Section 11.08. Notices. All notices or other communications under this Agreement shall be in writing and shall be deemed to be duly given (a) when delivered in person, (b) on the date received, if sent by a nationally recognized delivery or courier service, (c) upon written confirmation of receipt after transmittal by electronic mail or (d) upon the earlier of confirmed receipt or the fifth (5t h) business day following the date of mailing if sent by registered or certified mail, return receipt requested, postage prepaid and addressed as follows: + +If to Nuance, to: + +Nuance Communications, Inc. 1 Wayside Road, Burlington, MA 01803 Attn: Wendy Cassity, EVP and Chief Legal Officer email: Wendy.cassity@nuance.com with a copy to: David Garfinkel, SVP Corporate Development email: David.garfinkel@nuance.com + +and + +Paul, Weiss, Rifkind, Wharton & Garrison LLP 1285 Avenue of the Americas New York, NY 10019-6064 Attn: Scott A. Barshay Steven J. Williams 16 + +Source: CERENCE INC., 8-K, 10/2/2019 + + + + + +Michael E. Vogel email: sbarshay@paulweiss.com swilliams@paulweiss.com mvogel@paulweiss.com Facsimile: 212-492-0040 + +If to SpinCo, to: + +Cerence Inc. 15 Wayside Road, Burlington, MA 01803 Attn: Leanne Fitzgerald, General Counsel email: Leanne.Fitzgerald@cerence.com with a copy to: Mark Gallenberger, Chief Financial Officer email: Mark.Gallenberger@cerence.com + +Either Party may, by notice to the other Party, change the address and identity of the Person to which such notices and copies of such notices are to be given. Each Party agrees that nothing in this Agreement shall affect the other Party's right to serve process in any other manner permitted by Law (including pursuant to the rules for foreign service of process authorized by the Hague Convention). + +Section 11.09. Import and Export Control. Each Party agrees that it shall comply with all applicable national and international laws and regulations relating to import and/or export control in its country(ies), if any, involving any commodities, software, services or technology within the scope of this Agreement. + +Section 11.10. Bankruptcy. The Parties acknowledge and agree that all rights and licenses granted by the other under or pursuant to this Agreement are, and shall otherwise be deemed to be, for purposes of Section 365(n) of the United States Bankruptcy Code, as amended (the "Bankruptcy Code"), licenses of rights to "intellectual property" as defined under Section 101 of the Bankruptcy Code. The Parties agree that, notwithstanding anything else in this Agreement, Nuance and the members of the Nuance Group and SpinCo and the members of the SpinCo Group, as licensees of such intellectual property rights under this Agreement, shall retain and may fully exercise all of its rights and elections under the Bankruptcy Code (including Nuance's and the Nuance Group members' and SpinCo's and the SpinCo Group members' right 17 + +Source: CERENCE INC., 8-K, 10/2/2019 + + + + + +to the continued enjoyment of the rights and licenses respectively granted by under this Agreement). + +Section 11.11. Severability. If any provision of this Agreement or the application thereof to any Person or circumstance is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof, or the application of such provision to Persons or circumstances, or in jurisdictions other than those as to which it has been held invalid or unenforceable, shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereby, so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to either Party. Upon any such determination, any such provision, to the extent determined to be invalid, void or unenforceable, shall be deemed replaced by a provision that such court determines is valid and enforceable and that comes closest to expressing the intention of the invalid, void or unenforceable provision. + +Section 11.12. Expenses. Except as set forth on Schedule XXIV to the Separation Agreement, as otherwise expressly provided in this Agreement or the Separation Agreement, (i) all third-party fees, costs and expenses incurred by either the Nuance Group or the SpinCo Group in connection with effecting the Spin-Off prior to or on the Distribution Date, whether payable prior to, on or following the Distribution Date (but excluding, for the avoidance of doubt, any financing fees or interest payable in respect of any indebtedness incurred by SpinCo in connection with the Spin-Off), will be borne and paid by Nuance and (ii) all third-party fees, costs and expenses incurred by either the Nuance Group or the SpinCo Group in connection with effecting the Spin-Off following the Distribution Date, whether payable prior to, on or following the Distribution Date, will be borne and paid by the Party incurring such fee, cost or expense. For the avoidance of doubt, this Section 11.12 shall not affect each Party's responsibility to indemnify Nuance Liabilities or SpinCo Liabilities, as applicable, arising from the transactions contemplated by the Distribution. + +Section 11.13. Headings. The article, section and paragraph headings contained in this Agreement, including in the table of contents of this Agreement, are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. + +Section 11.14. Survival of Covenants. Except as expressly set forth in this Agreement, the covenants in this Agreement and the Liabilities for the breach of any obligations in this Agreement shall survive the Spin-Off and shall remain in full force and effect. + +Section 11.15. Waivers of Default. No failure or delay of any Party (or the applicable member of its Group) in exercising any right or remedy under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such right or power, or any course of conduct, preclude any other or further exercise thereof or the exercise of any other right or power. Waiver by any Party of any default by the other Party of any provision of this Agreement shall not be deemed a waiver by the waiving Party of any subsequent or other default. + +Section 11.16. Amendments. No provisions of this Agreement shall be deemed waived, amended, supplemented or modified by any Party, unless such waiver, amendment, 18 + +Source: CERENCE INC., 8-K, 10/2/2019 + + + + + +supplement or modification is in writing and signed by the authorized representative of each Party. + +Section 11.17. Interpretation. Words in the singular shall be held to include the plural and vice versa and words of one gender shall be held to include the other gender as the context requires. The terms "hereof," "herein," "herewith" and words of similar import, unless otherwise stated, shall be construed to refer to this Agreement as a whole (including all of the schedules hereto) and not to any particular provision of this Agreement. Article, Section or Schedule references are to the articles, sections and schedules of or to this Agreement unless otherwise specified. Any capitalized terms used in any Schedule to this Agreement but not otherwise defined therein shall have the meaning as defined in this Agreement. Any definition of or reference to any agreement, instrument or other document herein (including any reference herein to this Agreement) shall, unless otherwise stated, be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth therein, including in Section 11.16 above). The word "including" and words of similar import when used in this Agreement shall mean "including, without limitation," unless the context otherwise requires or unless otherwise specified. The word "or" shall not be exclusive. The word "extent" in the phrase "to the extent" shall mean the degree to which a subject or other thing extends, and such phrase shall not mean simply "if." All references to "$" or dollar amounts are to the lawful currency of the United States of America. In the event that an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties, and no presumption or burden of proof shall arise favoring or disfavoring either Party by virtue of the authorship of any provisions hereof. + +[SIGNATURE PAGES FOLLOW] 19 + +Source: CERENCE INC., 8-K, 10/2/2019 + + + + + +IN WITNESS WHEREOF, the Parties have caused this Intellectual Property Agreement to be executed by their duly authorized representatives. NUANCE COMMUNICATIONS, INC. + +By: /s/ Wendy Cassity Name: Wendy Cassity Title: Executive Vice President and Chief Legal Officer + +CERENCE INC. + +By: /s/ Leanne Fitzgerald Name: Leanne Fitzgerald Title: Vice President and Secretary [Signature page to the Intellectual Property Agreement] + +Source: CERENCE INC., 8-K, 10/2/2019 \ No newline at end of file diff --git a/full_contract_txt/Cerus Corporation - FIRST AMEND TO SUPPLY AND MANUFACTURING AGREEMENT.txt b/full_contract_txt/Cerus Corporation - FIRST AMEND TO SUPPLY AND MANUFACTURING AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..6b8a918ed4681fcfbacdfab6d5edc25206c8db1e --- /dev/null +++ b/full_contract_txt/Cerus Corporation - FIRST AMEND TO SUPPLY AND MANUFACTURING AGREEMENT.txt @@ -0,0 +1,91 @@ +[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. EXHIBIT 10.2 FIRST AMENDMENT TO SUPPLY AND MANUFACTURING AGREEMENT This First Amendment ("Amendment") to the Supply and Manufacturing Agreement dated April 1, 2017 between Cerus Corporation ("Cerus") and Porex Corporation ("Porex") (the "Agreement") is made this 22 day of June 2018. RECITALS A. Cerus and Porex have agreed to make certain changes to the raw material and process to develop Components and such changes have resulted in a change to the cost and expense structure originally contemplated by the Agreement; B. Pursuant to Section 3 of the Agreement, Cerus and Porex have mutually agreed to temporarily modify the pricing for Platelet Wafers set forth on Exhibit D and to proactively set a cost structure for non-production related work. NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged and accepted, the parties hereby agree to amend the Agreement as follows: 1. New Exhibits AA-1, AA-2, AA-3 and AA-4, as set forth in Schedule 1 to this Amendment, shall be attached to the Agreement (inserted between Exhibit A-5 and Exhibit B-1) and incorporated therein by reference. The parties acknowledge and agree that Exhibits AA-1, AA-2, AA-3 and AA-4 set forth the revised specifications for Platelet Wafers manufactured by Porex for Cerus (collectively, the "Revised Wafer Specifications"). Unless otherwise agreed in writing, Porex shall continue to manufacture and produce Platelet Wafers using the existing specifications for Platelet Wafers until Cerus gives written notice to Porex that Platelet Wafers shall be thereafter manufactured in accordance with the Revised Wafer Specifications. References in the Agreement to "Specifications" shall be interpreted to include the Revised Wafer Specifications, as applicable. 2. A new Exhibit D-1, as set forth in Schedule 2 to this Amendment, shall be attached to the Agreement and incorporated therein by reference. As of April 1, 2018 and continuing until Cerus determines, in its sole discretion, that the Protocol EPP-029-886 under which Porex is currently operating can be discontinued, the price for Platelet Wafers shall be the prices set forth in Exhibit D-1. Upon Cerus' determination that the Protocol EPP-029- 886 can be discontinued, Cerus shall provide written notice thereof to Porex, along with a new purchase order for Platelet Wafers (the "New Pricing PO"). On and after the date of such notice, the "Pricing" table for Platelet Wafers in Exhibit D, as of the date immediately preceding the date of this Amendment, shall be reinstated and apply to Platelet Wafers that are produced pursuant to the New Pricing PO and were also produced after the date of the written notice. References in Section 1.5.1 of the Agreement to "Exhibit D" shall be amended to include "Exhibit D-1," as applicable. 3. The penultimate sentence in Section 1.3 shall be deleted in its entirety and replaced with the following: "In no event shall any Purchase Order: require delivery of more than [*] units of [*] and [*] units of [*] in any [*] (the "Porex Capacity Limitations")." 4. A new Section 1.5.3 shall be added to the Agreement as follows: + + + + + +1.5.3 Porex will invoice Cerus monthly for Services performed by Porex during the prior month. Unless otherwise expressly provided in the applicable Statement of Work payment to Porex of undisputed fees shall be due [*] days following Cerus' receipt of the invoice submitted by Porex. Payment information, including Tax Identification Number will be included on each invoice. + +Cerus shall have the right to accept or reject the Services, or any portion thereof, in writing within [*] days from Porex's completion of the Services. Such acceptance or rejection shall be consistent with the criteria set forth in the Statement of Work, if any. If Cerus does not reject in writing within [*] days, the Services shall be considered accepted by Cerus. Within [*] days of any notice of rejection, Porex shall present a corrective plan of action to Cerus. Upon approval by Cerus of the corrective plan, Porex, at no additional expense to Cerus, shall then make the corrections and, where applicable, Porex shall resubmit the corrected Services to Cerus. For disputed invoices or the disputed portion of an invoice, Cerus shall use reasonable efforts to provide to Porex, in writing, within [*] days, a description of the disputed amounts. Cerus and Porex shall negotiate in a timely, good faith manner to resolve billing queries. Cerus will not have responsibility to pay for identified errors, incomplete or inaccurate items (collectively the "invoice errors") which result in increases to previously invoiced amounts if the aforementioned invoice errors are communicated to Cerus later than [*] days from the original invoice date. + +5. A new Section 3a shall be added to the Agreement as follows: "3a Non-Production Related Work. From time to time, Cerus may submit to Porex written work orders substantially in the form of Schedule 3 that specify development activities, engineering analysis, part, material and/or fixture design and development, or other services or activities that Cerus requests Porex to perform that are not activities or services that are necessary for the then-current manufacture and production of Components for Cerus under the Agreement (collectively, as defined in each work order, the "Services"). Each work order shall set forth the terms and conditions (including specifications (if applicable), delivery and performance schedules, and fees) pursuant to which Porex will perform the Services. Upon acceptance of a work order by Porex (in writing), such work order shall become a "Statement of Work." If Porex begins to perform services under a work order that has not been formally agreed in writing, then Porex shall bear the costs of any expenses incurred prior to formal written agreement of the Statement of Work. Cerus hereby consents to Porex's use of the Cerus Dedicated Space and Equipment, as specified in a Statement of Work, solely as necessary to perform the Services under that Statement of Work. Such consent shall automatically terminate upon the completion of the applicable Statement of Work and is limited by the terms of the Agreement. In the event of any conflict between the Agreement and a Statement of Work, the Agreement shall control unless the Statement of Work expressly refers to the Parties' intent to alter the terms of the Agreement with respect to that Statement of Work and shall not be construed as an amendment to the terms of the Agreement." 6. A new section titled "Pricing for Non-Production Related Work Orders from Cerus" is added to Exhibit D as set forth in Schedule 2 attached. Such pricing, upon mutual agreement of the Parties, shall apply to any Statement of Work mutually agreed by the Parties pursuant to Section 3a. 7. No other changes are made to the Agreement, including without limitation, the original Exhibit D, and the Agreement, the Plasma Disk pricing and related information as set forth in Exhibit D remain the same. Except as amended herein, the Agreement shall remain in full force and effect. Capitalized terms not otherwise defined herein shall have the same meanings as set forth in the Agreement. IN WITNESS WHEREOF, the undersigned have caused this First Amendment to be signed, all as of the date first written above. + +[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + + + + + +Porex: Porex Corporation By: /s/ Tore Wistedt Name: Tore Wistedt Title: SR VP Global Strategy Marketing + +Cerus: Cerus Corporation By: /s/ Kevin D. Green Name: Kevin D. Green Title: VP Finance and CFO + +[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + + + + + +Schedule 1 Exhibit AA-1 SPC 00562 {7 pages omitted} + +[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + + + + + +Exhibit AA-2 SPC 00628 {3 pages omitted} + +[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + + + + + +Exhibit AA-3 SPC 00628A {3 pages omitted} + +[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + + + + + +Exhibit AA-4 SPC 00628B {2 pages omitted} + +[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + + + + + +Schedule 2 Exhibit D-1 Pricing [*] Pricing [*] + +[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + + + + + +SCHEDULE 3 + +FORM STATEMENT OF WORK + +This Statement of Work is incorporated into the Amended and Restated Supply and Manufacturing Agreement dated April 1, 2017 by and between Cerus Corporation and Porex Corporation, as amended by First Amendment to Supply and Manufacturing Agreement, effective April 1, 2018 (for the purposes of this Statement of Work, the "Agreement"). This Statement of Work describes Services to be performed and provided by Porex pursuant to the Agreement. All capitalized terms used and not expressly defined in this Statement of Work will have the meanings given to them in the Agreement. Approach Deliverables Obligations of Cerus, if any Specifications Points of Contact For Cerus: Contact name Address Phone Email For Porex: Contact name Address Phone Email Budget Payment Schedule In full consideration for Porex's timely and satisfactory performance of the Services, Porex will be compensated as follows: Term + +[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + + + + + +The term of this Statement of Work will begin on ___________ and shall terminate on ____________. + +Cerus Corporation + +Signed: Name: Title: Dated: + +Porex Corporation + +Signed: Name: Title: Dated: + +[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. \ No newline at end of file diff --git a/full_contract_txt/ChinaRealEstateInformationCorp_20090929_F-1_EX-10.32_4771615_EX-10.32_Content License Agreement.txt b/full_contract_txt/ChinaRealEstateInformationCorp_20090929_F-1_EX-10.32_4771615_EX-10.32_Content License Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..9bff0262d83ab8b2c2a496cd1ba711c918fc03f8 --- /dev/null +++ b/full_contract_txt/ChinaRealEstateInformationCorp_20090929_F-1_EX-10.32_4771615_EX-10.32_Content License Agreement.txt @@ -0,0 +1,497 @@ +Exhibit 10.33 + +EXECUTION VERSION CONFIDENTIAL + +DOMAIN NAME AND CONTENT LICENSE AGREEMENT + +This Domain Name and Content License Agreement (the "Agreement") is made and entered into, by and between Beijing SINA Internet Information Service Co., Ltd. ( ), a limited liability company organized under the laws of the People's Republic of China (hereinafter "Licensor") and Beijing Yisheng Leju Information Services Co., Ltd., a limited liability company organized under the laws of the People's Republic of China ("Licensee" and together with Licensor, the "Parties" and each a "Party") and is made effective as of the Effective Date (defined below). + +RECITALS + +WHEREAS, SINA Corporation, a company organized under the laws of the Cayman Islands ("SINA"), and CRIC Holdings Limited, a company organized under the laws of the Cayman Islands ("CRIC"), entered into that certain Share Purchase Agreement dated July 23, 2009 (the "Share Purchase Agreement"), pursuant to which SINA subscribes from CRIC the Subscription Shares (as defined in the Share Purchase Agreement); + +WHEREAS, Licensor is the registrant of certain domain names as more particularly described below that are related to the Business which it desires to license to Licensee and Licensee desires to obtain a license from Licensor to such domain names to use in connection with its operation of the Business on the terms and conditions set forth herein; and + +WHEREAS, Licensor and Shanghai SINA Leju Information Technology Co. Ltd. ("SINA Leju") entered into that certain Domain Name License Agreement dated May 8, 2008 (the "Original Agreement") and (i) Licensor and SINA Leju desire to terminate the Original Agreement pursuant to the Mutual Termination Agreement attached hereto as Exhibit B and (ii) Licensee and Licensor desire to enter into this Agreement, on or prior to the consummation of the transactions contemplated by the Share Purchase Agreement. + +NOW, THEREFORE, for and in consideration of the mutual covenants and agreement of the Parties and the faithful performance thereof, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto agree as follows: + +ARTICLE I DEFINITIONS + +As used herein, the following terms shall have the meanings ascribed to them below. + +"Action" has the meaning set forth in Section 8.1. + +"Affiliate" means, when used with respect to any specified Person, a Person that directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such specified Person. For the purposes of this definition, "control" (including the terms "controlled by" and "under common control with") with respect to the + +Source: CHINA REAL ESTATE INFORMATION CORP, F-1, 9/29/2009 + + + + + + + +relationship between or among two or more Persons, means the possession, directly or indirectly or as trustee, personal representative or executor, of the power to direct or cause the direction of the affairs or management of a Person, whether through the ownership of voting securities, as trustee, personal representative or executor, by contract, credit arrangement or otherwise. + +"Agency Agreement" means that certain Advertising Sale Agency Agreement by and between SINA Corporation and China Online Housing Technology Corporation, dated as of the date hereof. + +"Business" means an online real estate media platform in the PRC that (i) provides information and updates related to real estate, home furnishing and construction in the PRC and provides real estate, home furnishing and construction advertising services, and (ii) operates a business-to- business and business-to-consumer Internet platform targeting participants in the PRC real estate industry, in each case, as currently conducted or contemplated to be conducted on the websites owned or operated by Licensee or any of Licensee's Affiliates in the PRC. + +"Business Day" means any day that is not a Saturday, a Sunday or other day on which banks are required or authorized by Law to be closed in Beijing. + +"Change of Control" means (i) the consummation of any acquisition or purchase, directly or indirectly, by any Person or related group of Persons, that results in a Competitor owning more ordinary shares in CRIC than E-House and SINA, and in each case, their respective controlled Affiliates, own in the aggregate or (ii) an event pursuant to which a Competitor acquires the right to nominate a member to the board of directors of CRIC. + +"Claimant" has the meaning set forth in Section 10.12. + +"Commission" has the meaning set forth in Section 10.12. + +"Competitor" means any Person whose business includes an online portal. + +"Confidential Information" has the meaning set forth in Section 9.1. + +"Content" means text, graphics, information and data and other content, whether supplied by Licensee, Licensor, end users or third party providers. + +"Dispute" has the meaning set forth in Section 10.12. + +"Effective Date" means the Closing Date as set forth in the Share Purchase Agreement. + +"E-House Licensed Data and Information" means the data and information licensed to CRIC Holdings Limited and its subsidiaries, for the operation of the CRIC system pursuant to the Master Transaction Agreement. + +2 + +Source: CHINA REAL ESTATE INFORMATION CORP, F-1, 9/29/2009 + + + + + + + +"Governmental Authority" means any federal, national, supranational, state, provincial, local or other government, governmental, regulatory or administrative authority, agency or commission or any court, tribunal, or judicial or arbitral body. + +"Initial Term" has the meaning set forth in Section 6.1. + +"Law" means any federal, national, supranational, state, provincial, local or similar statute, law or ordinance, regulation, rule, code, order, requirement or rule of law (including common law). + +"Licensed Content" shall mean all Content (i) whose copyright is owned by Licensor; or (ii) owned by a third party provider but is sublicensable by Licensor to Licensee without requiring the payment of any additional fee to any third party and without violating the terms of any agreement with such third party provider, together with all updates to and substitutions therefor as may be implemented by Licensor or such third party provider. + +"Licensed Domain Names" means the domain names listed on Exhibit A attached hereto. + +"Licensee Parties" has the meaning set forth in Section 8.1. + +"Licensor Parties" has the meaning set forth in Section 8.2. + +"Master Transaction Agreement" means the Master Transaction Agreement entered into by and between E-House (China) Holdings Limited and CRIC Holdings Limited, dated as of July 27, 2009. + +"Operating Content" has the meaning set forth in Section 2.2. + +"Person" means any individual, partnership, firm, corporation, limited liability company, association, trust, unincorporated organization or other entity, as well as any syndicate or group that would be deemed to be a person under Section 13(d)(3) of the Securities Exchange Act of 1934, as amended. + +"PRC" means the People's Republic of China, excluding Hong Kong, Macau and Taiwan. + +"Recipient" has the meaning set forth in Section 9.1. + +"Respondent" has the meaning set forth in Section 10.12. + +"Rules" has the meaning set forth in Section 10.12. + +"Software License Agreement" means that certain Software License and Support Services Agreement by and between Beijing SINA Internet Information Service Co., Ltd. and SINA Leju dated as of [ ]. + +"Term" has the meaning set forth in Section 6.1. + +3 + +Source: CHINA REAL ESTATE INFORMATION CORP, F-1, 9/29/2009 + + + + + + + +"Trademark License Agreement" means that certain Trademark License Agreement by and between Beijing SINA Internet Information Service Co., Ltd. and Licensee dated as of [ ]. + +ARTICLE II GRANT OF LICENSE + +2.1. Grant of Licenses. + +(a) Subject to the terms and conditions of this Agreement, Licensor hereby grants to Licensee, and Licensee hereby accepts from Licensor, an exclusive, non-transferable (except as set forth in Section 10.7) and non-sublicensable (except as provided in Section 2.1(c)) license to use the Licensed Domain Names in connection with the Business during the Term. Except as provided in Section 2.3, Licensee's use of the Licensed Domain Names under the terms of this Agreement shall be free of any fees. + +(b) Subject to the terms and conditions of this Agreement, Licensor hereby grants to Licensee, and Licensee hereby accepts from Licensor, an exclusive, non-transferable (except as set forth in Section 10.7) and non-sublicensable (except as provided in Section 2.1(c)) license to use the Licensed Content in connection with websites associated with the Licensed Domain Names until the earlier of (i) termination or expiration of this Agreement, or (ii) termination or expiration of the Agency Agreement, provided, however, that in the event the Agency Agreement is amended or restated, such amendment or restatement shall not be deemed a termination or expiration of the Agency Agreement. Except as provided in Section 2.3, Licensee's use of the Licensed Content under the terms of this Agreement shall be free of any fees. + +(c) Notwithstanding anything in this Agreement to the contrary, Licensee has no right to sublicense any rights granted hereunder to any third party, or otherwise permit any third party to use any Licensed Domain Names or Licensed Content; provided, however, that any rights granted to Licensee hereunder shall be sublicensable, without the prior written consent of Licensor, to SINA Leju and Licensee's Affiliates that are controlled by SINA Leju solely for the purpose of operating the Business during the Term. All rights in and to the Licensed Domain Names and Licensed Content not expressly granted herein are hereby reserved exclusively by Licensor. Licensee shall be responsible for the compliance of the terms and conditions of this Agreement by all of its sublicensees. Without limiting the foregoing, in the event any sublicensee undertakes any action (or inaction) that would be deemed a breach of this Agreement had Licensee taken such action (or inaction), such action (or inaction) shall be deemed a breach by Licensee under this Agreement. + +2.2. Other Content. Licensee may desire to use Content other than Licensed Content, from time to time, in connection with the websites associated with the Licensed Domain Names ("Operating Content"). Licensee may independently enter into an agreement with the owner of the Operating Content to secure Licensee's right to use such Operating Content, and shall be solely responsible for the cost and expense associated with procuring such Content. For the avoidance of doubt, Licensee shall be permitted to upload such Operating Content directly onto Licensee's websites or through use of the Licensor's software pursuant to the Software + +4 + +Source: CHINA REAL ESTATE INFORMATION CORP, F-1, 9/29/2009 + + + + + + + +License Agreement. If Licensee requests Licensor to enter into such an agreement on behalf of Licensee and to provide the Operating Content to Licensee, Licensor and Licensee shall discuss such request in good faith; provided, however, if Licensor agrees to procure and provide such Operating Content, Licensee shall reimburse Licensor for all reasonable, incremental costs that Licensor incurs which are attributable to Licensee's request. For example, if Licensor, prior to the Effective Date, employs ten (10) full time employees dedicated to obtaining Content and, as a result of Licensee's request for Operating Content pursuant to this Section 2.2, must hire an additional full time employee to handle Licensee's request, Licensee shall reimburse Licensor for the costs related to such full time employee, provided that, if such full time employee also engages in work on behalf of Licensor or its Affiliates, Licensee shall reimburse Licensor on a pro rata basis only for the time spent by such full time employee in handling Licensee's requests. Licensee further acknowledges that Licensor has no obligation to fulfill any request by Licensee to procure Operating Content under this Section 2.2. Unless otherwise agreed to by the Parties, any Operating Content obtained on Licensee's behalf by Licensor shall be for Licensee's use only and shall not be used by Licensor or its Affiliates or provided or made available to any third parties by Licensor. + +2.3. Fees. In the event E-House Research and Training Institute becomes entitled to charge, invoice, or otherwise receive from, Licensee any royalties, fees or other remuneration for use of the E-House Licensed Data and Information pursuant to amendments to the Master Transaction Agreement or through other means, Licensor and Licensee shall use good faith efforts to amend this Agreement such that Licensor becomes entitled to charge, invoice, or otherwise receive fees from Licensee to use the Licensed Domain Names and Licensed Content, such fees to be agreed upon by the Parties, provided that (i) such fees shall be commercially reasonable and (ii) such fees shall not exceed the fees charged by Licensor to unaffiliated third parties for use of the Licensed Content, taking into account any other consideration received by Licensor (including, but not limited to, discounted services offerings from the third party). + +ARTICLE III QUALITY CONTROL + +3.1. Licensee Control. Subject to the terms and conditions of this Agreement, Licensee shall be entitled to exercise exclusive control over all aspects of the websites and the Business associated with the Licensed Domain Names including, without limitation, the operation, the look-and- feel and the Content of such websites. + +3.2. Content Distribution. Licensor shall make available to Licensee the Licensed Content in substantially the same manner and with substantially the same speed and efficiency as such Licensed Content was made available to SINA Leju prior to the Effective Date, namely through Licensor's content database, but in no event with less speed, efficiency, or a lesser level of access than Licensor provides with respect to its own operations. Licensee agrees to use the Licensed Domain Names only in accordance with such content distribution policy that Licensor uses in connection with its own business, and as may be established by Licensor and communicated in writing in advance to Licensee from time to time or as may otherwise be agreed to by the Parties from time to time, provided that Licensee shall be afforded the same period of time to implement any such content distribution policy as is afforded to Licensor's Affiliates and other third parties. + +5 + +Source: CHINA REAL ESTATE INFORMATION CORP, F-1, 9/29/2009 + + + + + + + +3.3. Website Monitoring and Censoring. + +(a) Licensee Obligations. Licensee shall monitor and censor all Content on the websites associated with the Licensed Domain Names, including without limitation Content posted by end users. Licensor shall also have the right to monitor and censor Content of the websites associated with Licensed Domain Names. Licensee shall remove any offending Content, including, but not limited to, any illegal materials, pornographic, obscene or sexually explicit materials, materials of a violent nature, or politically sensitive materials, from such websites as soon as possible after it becomes aware of such offending Content but in no event later than the timeframe prescribed by the Governmental Authority after receipt of oral or written notice from Licensor or such Governmental Authority. Licensee's failure to comply with this Section 3.3(a) shall be deemed a material breach of this Agreement. Without limiting the foregoing obligations, Licensee acknowledges that Licensor shall have the right to remove such offending Content from the websites associated with Licensed Domain Names. + +(b) New Restrictions Imposed by Governmental Authority. In the event Licensor receives notice from any Governmental Authority that the websites associated with the Licensed Domain Names contain offending Content where (i) the basis or nature of such offense has not previously been identified by any Governmental Authority as offensive or inappropriate and (ii) Licensee has not also received notice from such Governmental Authority, Licensor shall promptly notify Licensee of Licensor's receipt thereof. Licensee shall then use best efforts to remove such Content as soon as possible in accordance with the instructions of such Governmental Authority. Notwithstanding the foregoing or anything in Section 8.2 to the contrary, in the event Licensor fails to notify Licensee of Licensor's receipt of such notice from a Governmental Authority, such that Licensee does not have sufficient time to remove such offending Content, Licensee shall not be liable for any fines or penalties imposed by a Governmental Authority in connection with such offending Content. + +3.4. Compliance with Laws. Licensee shall ensure that the Business complies with all applicable Laws in respect of operation, advertising and promotion of the Business and use of the Licensed Domain Names and Licensed Content in connection therewith. + +3.5. Restrictions. Except as expressly permitted under the Trademark License Agreement, Licensee shall not knowingly (a) use the Licensed Domain Names in any manner that tarnishes, degrades, disparages or reflects adversely on Licensor or Licensor's business or reputation, (b) in any jurisdiction, register or attempt to register any domain names that consist of, in whole or in part, or are confusingly similar to, the term "SINA", (c) contest, challenge or otherwise make any claim or take any action adverse to Licensor's interest in the Licensed Domain Names, (d) register any trademarks, trade names or company names that consist of, in whole or in part, or are confusingly similar to the term "SINA" in the name of Licensee or of any of its Affiliates, or (e) use the Licensed Content and other Content for any unlawful purpose, including but not limited to displaying or distributing any pornographic, obscene or sexually explicit material, materials of a violent nature, or politically sensitive materials. In the event that Licensor reasonably determines that any violation of the foregoing by Licensee poses an immediate harm to Licensor's business, reputation or goodwill, Licensee shall promptly, following receipt of notice from Licensor, cease and desist all such non-conforming uses. + +6 + +Source: CHINA REAL ESTATE INFORMATION CORP, F-1, 9/29/2009 + + + + + + + +ARTICLE IV OWNERSHIP + +4.1. Ownership. Licensee acknowledges that, as between the Parties, Licensor (or its third party providers) is the owner of all right, title and interest in and to the Licensed Domain Names and Licensed Content, and all such right, title and interest shall remain exclusively with Licensor (or its third party providers). + +4.2. Prosecution and Maintenance. As between Licensee and Licensor, Licensor shall have the sole and exclusive right and obligation to maintain and renew registrations for the Licensed Domain Names during the Term, and shall do so at its own cost and expense during the Term. Licensee shall not engage in the foregoing affairs, in particular, Licensee shall not change or apply for change of the domain name registration service agency for the Licensed Domain Names during the Term of this Agreement. + +ARTICLE V ENFORCEMENT + +5.1. Licensor Enforcement. + +(a) Licensor shall have the right, but not the obligation, to take action against third parties in the courts, administrative agencies or otherwise, at Licensor's cost and expense, to prevent or terminate misuse, infringement, dilution, misappropriation, imitation or illegal use by third parties of the Licensed Domain Names or Licensed Content. + +(b) Licensee shall reasonably cooperate with Licensor in any action, suit or proceeding that the Licensor may undertake under this Section 5.1 (including, without limitation, executing, filing and delivering all documents and evidence reasonably requested by the Licensor) and shall lend its name to such action, suit or proceeding if reasonably requested by the Licensor or required by applicable Law. All reasonable out-of-pocket expenses incurred by the Licensee in connection therewith shall be reimbursed by the Licensor. The Licensee shall have the right to participate and be represented in any such action, suit or proceeding by its own counsel at its own expense. + +(c) All damages or other compensation of any kind recovered in any action, suit or proceeding undertaken under this Article V, or from any settlement or compromise thereof, shall be for the benefit of the Licensor, provided, however, that any compensation granted or awarded in light of any losses incurred by Licensee shall be for the benefit of the Licensee after Licensor's reasonable expenses for taking such action, suit or proceeding have been paid. + +ARTICLE VI TERM AND TERMINATION + +6.1. Term. The initial term of this Agreement (the "Initial Term") shall commence on the Effective Date and shall continue for a period of ten (10) years thereafter. Beginning twelve (12) months prior to the expiration of the Initial Term, the Parties shall use + +7 + +Source: CHINA REAL ESTATE INFORMATION CORP, F-1, 9/29/2009 + + + + + + + +good faith efforts to negotiate an extension of the term of this Agreement (the Initial Term together with any applicable extension, the "Term"). + +6.2. Termination for Bankruptcy. Either Party may immediately terminate this Agreement in the event that the other Party (a) becomes insolvent or unable to pay its debts as they mature; (b) makes an assignment for the benefit of its creditors; (c) seeks relief, or if proceedings are commenced against such other Party or on its behalf, under any bankruptcy, insolvency or debtors' relief law and such proceedings have not been vacated or set aside within seven (7) days from the date of commencement thereof. + +6.3. Termination for Breach. + +(a) By Licensor. Licensor may terminate this Agreement at any time in the event that the Licensee is in material default or breach of any provision of this Agreement, and, if such default or breach is capable of cure, such default or breach continues uncured for a period of thirty (30) days after receipt of written notice thereof; provided, however, that in the event that the Licensee has in good faith commenced cure within such thirty (30) day period, but cannot practically complete such cure within such thirty (30) day period, the Parties shall negotiate a reasonable additional time to cure. + +(b) By Licensee. Licensee may terminate this Agreement at any time in the event that the Licensor is in material default or breach of any provision of this Agreement, and, if such default or breach is capable of cure, such default or breach continues uncured for a period of thirty (30) days after receipt of written notice thereof; provided, however, that in the event that the Licensor has in good faith commenced cure within such thirty (30) day period, but cannot practically complete such cure within such thirty (30) day period, the Parties shall negotiate a reasonable additional time to cure. + +6.4. Termination for a Change of Control. Licensor may terminate this Agreement by providing prior written notice to Licensee upon the occurrence of a Change of Control. + +6.5. Termination in the Event of Termination of Agency Agreement. In the event that the Agency Agreement is terminated pursuant to Section 9.02 (c)(iii) or 9.02(d)(i) thereof, this Agreement shall automatically be terminated as of the effective date of the termination of the Agency Agreement and shall thereafter be of no further force or effect except as set forth in Section 6.7. + +6.6. Effect of Termination. + +(a) Upon termination (but not expiration) of this Agreement for any reason, Licensee shall be entitled to use the Licensed Domain Names and Licensed Content for a limited period of time, not to exceed ninety (90) days, during which it shall diligently work to transition to another solution. Upon expiration of this Agreement or such 90-day period, (i) all rights granted to Licensee under this Agreement with respect to the Licensed Domain Names and Licensed Content shall immediately cease, and (ii) Licensee shall immediately discontinue all use of the Licensed Domain Names and Licensed Content. + +8 + +Source: CHINA REAL ESTATE INFORMATION CORP, F-1, 9/29/2009 + + + + + + + +(b) Upon termination or expiration of the Agency Agreement (other than as described in Section 6.5), Licensee's rights under Section 2.1(b) are terminated and Licensee shall immediately discontinue all use of the Licensed Content, provided, however that in the event the Agency Agreement is amended or restated, such amendment or restatement shall not be deemed a termination or expiration of the Agency Agreement. + +6.7. Survival. The duties and obligations of the Parties under Articles IV, VI, VIII, IX and X and Section 7.2 of this Agreement shall survive any termination or expiration of this Agreement. + +ARTICLE VII REPRESENTATIONS AND WARRANTIES + +7.1. Representations and Warranties. + +(a) By Each Party. Each of Licensee and Licensor represents and warrants to each other Party that: (a) it is a corporation duly incorporated, validly existing and in good standing under applicable Law; (b) the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby are within its corporate powers; (c) it has taken necessary steps to obtain authority and all necessary consents and approvals of any other third party or Governmental Authority to execute and perform this Agreement; (d) this Agreement has been duly executed and delivered by it and constitutes its valid and binding obligation, enforceable against it in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, or other laws affecting the rights of creditors' generally or by general principals of equity; and (e) the execution, delivery and performance of this Agreement will not conflict with or result in any breach of its charter or certificate of incorporation, bylaws, or other governing document, or any instrument, obligation, or contract to which it or its properties is bound. + +(b) By Licensor. Licensor represents and warrants that: + +i. It has the right to grant the licenses granted to Licensee hereunder; and + +ii. The Licensed Content and the Licensed Domain Names are, and the rights granted hereunder in connection with the Licensed Domain Names and Licensed Content are, substantially similar to the Licensed Content and the Licensed Domain Names and the rights that were granted to SINA Leju in connection therewith prior to the Effective Date. + +7.2. Disclaimer. LICENSEE HEREBY ACKNOWLEDGES AND AGREES THAT EXCEPT AS EXPRESSLY SET FORTH HEREIN OR IN THE SHARE PURCHASE AGREEMENT, THE LICENSED DOMAIN NAMES AND THE LICENSED CONTENT ARE PROVIDED WITHOUT WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY, VALIDITY, NONINFRINGEMENT, FITNESS FOR A PARTICULAR PURPOSE OR OTHER WARRANTIES, WHETHER EXPRESS OR IMPLIED, AND LICENSOR HEREBY DISCLAIMS ANY AND ALL SUCH WARRANTIES. + +9 + +Source: CHINA REAL ESTATE INFORMATION CORP, F-1, 9/29/2009 + + + + + + + +ARTICLE VIII INDEMNIFICATION + +8.1. Indemnification by Licensor. Licensor shall defend, indemnify and hold harmless Licensee and its Affiliates, and their respective officers, directors, employees, agents, shareholders, successors and assigns, (collectively, the "Licensee Parties") from and against any claim, suit, demand or action ("Action"), and any and all direct losses suffered or incurred by Licensee in connection with any third party claims arising out of or resulting from any breach by Licensor of any provision of this Agreement. Licensor's obligation to indemnify Licensee shall be conditioned on (a) Licensee's provision to Licensor of prompt notice of such an Action (except where any delay does not materially prejudice Licensor); (b) Licensee's reasonable cooperation with Licensor in the defense and settlement of such an Action at Licensor's cost; and (c) Licensor having exclusive control of the defense, settlement and/or compromise of such an Action (provided that Licensor may not settle any Action in a manner that adversely affects Licensee without Licensee's prior written consent, not to be unreasonably withheld or delayed). + +8.2. Indemnification by Licensee. Licensee shall defend, indemnify and hold harmless Licensor and its Affiliates, and their respective officers, directors, employees, agents, shareholders, successors and assigns, (collectively, the "Licensor Parties") from and against any Action, and any and all direct losses suffered or incurred by Licensor in connection with any third party claims (a) arising out of or resulting from any breach by Licensee of any provision of this Agreement, (b) regarding the Content (other than Licensed Content) of the websites associated with Licensed Domain Names, or (c) regarding any Content that was subject to a request for removal by a Governmental Authority, even if Licensee removes such Content within the time period proscribed by the Governmental Authority, provided that, in all cases, Licensee shall not be liable for any direct losses suffered or incurred by Licensor as a result of Licensor's failure to provide Licensee with a reasonable period of time to remove Content in cases where (i) the basis or nature of the offense has not previously been identified by any Governmental Authority as offensive or inappropriate and (ii) Licensee has not also received notice from the Governmental Authority. Licensee's obligation to indemnify Licensor shall be conditioned on (x) Licensor's provision to Licensee of prompt notice of such an Action (except where any delay does not materially prejudice Licensee); (y) Licensor's reasonable cooperation with Licensee in the defense and settlement of such an Action at Licensee's cost; and (z) Licensee having exclusive control of the defense, settlement and/or compromise of such an Action (provided that Licensee may not settle any Action in a manner that adversely affects Licensor without Licensor's prior written consent, not to be unreasonably withheld or delayed). + +ARTICLE IX CONFIDENTIALITY + +9.1. Confidential Information. In performing its obligations under this Agreement, either Party (the "Recipient") may obtain certain Confidential Information of the other Party. For purposes of this Agreement, "Confidential Information" shall mean information, documents and other tangible things, provided by either Party to the other, in whatever form, relating to such Party's business and marketing, including such Party's financial information, personal information, customer lists, product plans and marketing plans, whether alone or in its compiled form and whether marked as confidential or not. The Recipient shall maintain in + +10 + +Source: CHINA REAL ESTATE INFORMATION CORP, F-1, 9/29/2009 + + + + + + + +confidence all Confidential Information and shall not disclose such Confidential Information to any third party without the express written consent of the other Party except to those of its employees, subcontractors, consultants, representatives and agents as are necessary in connection with activities as contemplated by this Agreement. In maintaining the confidentiality of Confidential Information, the Recipient shall exercise the same degree of care that it exercises with its own confidential information, and in no event less than a reasonable degree of care. The Recipient shall ensure that each of its employees, subcontractors, consultants, representatives and agents holds in confidence and makes no use of the Confidential Information for any purpose other than those permitted under this Agreement or otherwise required by Law. Upon request by the other Party, the Recipient shall return, destroy or otherwise handle as instructed by the other Party, any documents or software containing such Confidential Information, and shall not continue to use such Confidential Information. + +9.2. Exceptions. The obligation of confidentiality contained in Section 9.1 shall not apply to the extent that (a) the Recipient is required to disclose information by order or regulation of a Governmental Authority or a court of competent jurisdiction; provided, however, that, to the extent permitted by applicable Law, the Recipient shall not make any such disclosure without first notifying the other Party and allowing the other Party a reasonable opportunity to seek injunctive relief from (or a protective order with respect to) the obligation to make such disclosure; or (b) the Recipient can demonstrate that (i) the disclosed information was at the time of such disclosure to the Recipient already in (or thereafter enters) the public domain other than as a result of actions of the Recipient, its directors, officers, employees or agents in violation hereof, (ii) the disclosed information was rightfully known to the Recipient prior to the date of disclosure (other than pursuant to disclosure by the other Party pursuant to other agreements in effect between the Parties), or (iii) the disclosed information was received by the Recipient on an unrestricted basis from a source unrelated to any Party and not under a duty of confidentiality to the other Party. + +ARTICLE X GENERAL PROVISIONS + +10.1. Taxes. Each Party shall be responsible for taxes that should be borne by it in accordance with applicable Law. If any Party pays any taxes that should have been borne by the other Party in accordance with Law, such other Party shall reimburse such Party within seven (7) days after its receipt of documentation evidencing such tax payment so incurred by such Party. + +10.2. Expenses. Except as otherwise specified in this Agreement, all costs and expenses, including, fees and disbursements of counsel, financial advisors and accountants, incurred in connection with this Agreement and the transactions contemplated by this Agreement shall be borne by the party incurring such costs and expenses, whether or not the Closing shall have occurred. + +10.3. Notices. All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be deemed duly given, made or received (i) on the date of delivery if delivered in person or by messenger service, (ii) on the date of confirmation of receipt of transmission by facsimile (or, the first (1s t) Business Day following such receipt if (a) such + +11 + +Source: CHINA REAL ESTATE INFORMATION CORP, F-1, 9/29/2009 + + + + + + + +date of confirmation is not a Business Day or (b) confirmation of receipt is given after 5:00 p.m., Beijing time) or (iii) on the date of confirmation of receipt if delivered by an internationally recognized overnight courier service or registered or certified mail (or, the first (1s t) Business Day following such receipt if (a) such date of confirmation is not a Business Day or (b) confirmation of receipt is given after 5:00 p.m., Beijing time) to the respective parties hereto at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 10.3): + +if to Licensor: + +SINA Corporation 20/F Beijing Ideal International Plaza No. 58 Northwest 4th Ring Road Haidian District, Beijing, 100090 People's Republic of China Facsimile: +86 10 8260 7166 Attention: Head of Legal Department (Xie Guomin) + +with a copy (which shall not constitute notice) to: + +Shearman & Sterling LLP 12th Floor East Tower, Twin Towers B-12 Jianguomenwai Dajie Beijing 100022 People's Republic of China Facsimile: +86 10 6563 6001 Attention: Lee Edwards, Esq. + +if to Licensee: + +Beijing Yisheng Leju Information Services Co., Ltd. c/o CRIC Holdings Limited No. 383 Guangyan Road Shanghai 200072 People's Republic of China Facsimile: + 86 (21) 6086 7111 Attention: President + +with a copy (which shall not constitute notice) to: + +Skadden, Arps, Slate, Meagher & Flom 42/F, Edinburgh Tower, The Landmark 12 Queen's Road Central, Hong Kong Facsimile: +852 3740 4727 Attention: Jonathan B. Stone, Esq. and Z. Julie Gao, Esq. + +10.4. Public Announcements. Other than (i) the filing with the SEC of the Form F-1, any amendments thereto and any other documents filed in connection with the Form F-1, + +12 + +Source: CHINA REAL ESTATE INFORMATION CORP, F-1, 9/29/2009 + + + + + + + +including the filing of this Agreement or (ii) any communications with the relevant stock exchange or regulators in connection with the IPO, in each case, as deemed necessary or desirable in the sole discretion of CRIC, neither party to this Agreement shall make, or cause to be made, any press release or public announcement in respect of this Agreement or the transactions contemplated by this Agreement or otherwise communicate with any news media without the prior written consent of the other party unless otherwise required by Law or applicable stock exchange regulation, and the parties to this Agreement shall cooperate as to the timing and contents of any such press release, public announcement or communication. + +10.5. Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any Law or public policy, all other terms and provisions of this Agreement shall nevertheless remain in full force and effect for so long as the economic or legal substance of the transactions contemplated by this Agreement is not affected in any manner materially adverse to either party hereto. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the transactions contemplated by this Agreement are consummated as originally contemplated to the greatest extent possible. + +10.6. Entire Agreement. This Agreement constitutes the entire agreement of the Parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, both written and oral, with respect to the subject matter hereof and thereto (including the Original Agreement). + +10.7. Assignment. This Agreement and any rights or authority granted hereunder shall not be assigned or transferred by either Party, including by operation of law, merger or otherwise, without the express written consent of the other Party, provided that Licensor may assign this Agreement without consent to any of its Affiliates and Licensee may assign this Agreement without consent to SINA Leju or an Affiliate of Licensee that is controlled by SINA Leju. + +10.8. Amendment. This Agreement may not be amended or modified except (a) by an instrument in writing signed by, or on behalf of, both Parties or (b) by a waiver in accordance with Section 10.9. + +10.9. Waiver. Either Party may (a) extend the time for the performance of any of the obligations or other acts of the other Party, (b) waive any inaccuracies in the representations and warranties of the other Party contained herein or in any document delivered by the other party pursuant hereto or (c) waive compliance with any of the agreements of the other Party or conditions to such Party's obligations contained herein. Any such extension or waiver shall be valid only if set forth in an instrument in writing signed by the Party to be bound thereby. No waiver of any representation, warranty, agreement, condition or obligation granted pursuant to this Section 10.9 or otherwise in accordance with this Agreement shall be construed as a waiver of any prior or subsequent breach of such representation, warranty, agreement, condition or obligation or any other representation, warranty, agreement, condition or obligation. The failure of either party hereto to assert any of its rights hereunder shall not constitute a waiver of any of such rights. + +13 + +Source: CHINA REAL ESTATE INFORMATION CORP, F-1, 9/29/2009 + + + + + + + +10.10. No Third Party Beneficiaries. Except for the provisions of Article VII relating to indemnified parties, this Agreement shall be binding upon and inure solely to the benefit of the Parties and their respective successors and permitted assigns and nothing herein, express or implied (including the provisions of Article VII relating to indemnified parties), is intended to or shall confer upon any other Person any legal or equitable right, benefit or remedy of any nature whatsoever, including any rights of employment for any specified period, under or by reason of this Agreement. + +10.11. Governing Law. This Agreement and any dispute or claim arising out of or in connection with it or its subject matter shall be governed by, and construed in accordance with, the laws of the People's Republic of China (without regard to its conflicts of laws rules that would mandate the application of the laws of another jurisdiction). + +10.12. Dispute Resolution. (a) Any dispute, controversy or claim arising out of or relating to this Agreement, or the breach, termination or invalidity thereof (each, a "Dispute"), shall to the extent possible be settled through friendly consultation among the Parties hereto. The claiming Party (the "Claimant") shall promptly notify the other Party (the "Respondent") in a dated written notice that a Dispute has arisen and describe the nature of the Dispute. Any Dispute which remains unresolved within sixty (60) days after the date of such written notice shall be submitted to the China International Economic and Trade Arbitration Commission (the "Commission") to be finally settled by arbitration in Beijing, PRC in accordance with the Commission's then effective rules (the "Rules") and this Section 10.12. The language of the arbitration shall be Mandarin Chinese. + +(b) The arbitration tribunal shall consist of three (3) arbitrators. The Claimant shall appoint one (1) arbitrator, the Respondent shall appoint one (1) arbitrator, and the two (2) arbitrators so appointed shall appoint a third arbitrator. If the Claimant and the Respondent fail to appoint one (1) arbitrator, or the two (2) arbitrators appointed fail to appoint the third arbitrator within the time periods set by the then effective Rules, the relevant appointment shall be made promptly by the Commission. + +(c) Any award of the arbitration tribunal established pursuant to this Section 10.12 shall be final and binding upon the Parties, and enforceable in any court of competent jurisdiction. The Parties shall use their best efforts to effect the prompt execution of any such award and shall render whatever assistance as may be necessary to this end. The prevailing Party (as determined by the arbitrators) shall be entitled to reimbursement of its costs and expenses, including reasonable attorney's fees, incurred in connection with the arbitration and any judicial enforcement, unless the arbitrators determine that it would be manifestly unfair to honor this agreement of the Parties and determine a different allocation of costs. + +(d) The foregoing provisions in this Section 10.12 shall not preclude any Party from seeking interim or conservatory remedies, including injunctive relief, from any court having jurisdiction to grant such relief. + +10.13. No Presumption. The Parties acknowledge that each has been represented by counsel in connection with this Agreement and the transactions contemplated by this Agreement. Accordingly, any applicable Law that would require interpretation of any claimed + +14 + +Source: CHINA REAL ESTATE INFORMATION CORP, F-1, 9/29/2009 + + + + + + + +ambiguities in this Agreement against the Party that drafted it has no application and is expressly waived. If any claim is made by a Party relating to any conflict, omission or ambiguity in the provisions of this Agreement, no presumption or burden of proof or persuasion will be implied because this Agreement was prepared by or at the request of any Party or its counsel. + +10.14. Specific Performance. The parties hereto acknowledge and agree that irreparable damage would occur if any of the provisions of this Agreement are not performed in accordance with their specific terms and that any breach of this Agreement could not be adequately compensated in all cases by monetary damages alone. Accordingly, in addition to any other right or remedy to which a party hereto may be entitled, at law or in equity, it shall be entitled to enforce any provision of this Agreement by a decree of specific performance and to temporary, preliminary and permanent injunctive relief to prevent breaches or threatened breaches of any of the provisions of this Agreement, without posting any bond or other undertaking. + +10.15. Force Majeure. Neither Party shall be liable for failure to perform any of its obligations under this Agreement during any period in which such Party cannot perform due to hacker attack, fire, flood or other natural disaster, war, embargo, riot or the intervention of any Governmental Authority, provided, however, that the Party so delayed immediately notifies the other Party of such delay. In no event shall such nonperformance by Licensee be excused due to any such event for longer than ninety (90) days. + +10.16. Counterparts. This Agreement may be executed and delivered (including by facsimile transmission) in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement. + +10.17. Termination of Original Agreement. Pursuant to the Mutual Termination Agreement set forth in Exhibit B attached hereto, the Original Agreement shall be terminated as of the Effective Date. Notwithstanding anything in this Agreement to the contrary, this Agreement shall not become effective unless and until the Mutual Termination Agreement set forth in Exhibit B is executed. + +[SIGNATURES ON NEXT PAGE] + +15 + +Source: CHINA REAL ESTATE INFORMATION CORP, F-1, 9/29/2009 + + + + + + + +IN WITNESS WHEREOF, each Party hereto has caused this Agreement to be executed by its duly authorized representatives on the date first set forth above. + +16 + + Beijing SINA Internet Information Service Co., Ltd. + + By:/s/ Charles Chao + + Name: Title: Beijing Yisheng Leju Information Services Co., Ltd. + + By:/s/ Fei Cao + + Name: Title: + +Source: CHINA REAL ESTATE INFORMATION CORP, F-1, 9/29/2009 + + + + + + + +EXHIBIT A + +LICENSED DOMAIN NAMES + +house.sina.com.cn + +jiaju.sina.com.cn + +construction.sina.com.cn + +17 + + + +Source: CHINA REAL ESTATE INFORMATION CORP, F-1, 9/29/2009 + + + + + + + +EXHIBIT B + +MUTUAL TERMINATION AGREEMENT + +THIS MUTUAL TERMINATION AGREEMENT ("Termination Agreement") is made and entered into this day of , 2009, by and between Beijing SINA Internet Information Service Co. ("Beijing SINA") and Shanghai SINA Leju Information Technology Co. Ltd. ("SINA Leju"). + +WITNESSETH: + +WHEREAS, Beijing SINA and SINA Leju entered into that certain Domain Name License Agreement dated May 8, 2008 (the "Original Agreement"); and + +WHEREAS, Beijing SINA and SINA Leju desire to mutually terminate the Original Agreement effective as of the date of this Termination Agreement. + +NOW, THEREFORE, in consideration of the mutual covenants and conditions contained herein, and other good and valuable consideration, receipt of which is hereby acknowledged by each of the parties hereto, the parties agree as follows: + +1. Beijing SINA and SINA Leju agree that, upon the date of execution of this Termination Agreement, the Agreement shall terminate and be of no further force or effect, and, for the avoidance of doubt, no provisions of the Original Agreement survive such termination. + +2. This Termination Agreement represents the complete, integrated, and entire agreement between the parties, and may not be modified except in writing signed by the parties. + +3. This Termination Agreement shall be governed by the laws of the PRC, without regard to conflicts of law principles. + +4. This Termination Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together will constitute one and the same instrument. + +5. This Termination Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. + +[SIGNATURES ON NEXT PAGE] + +18 + +Source: CHINA REAL ESTATE INFORMATION CORP, F-1, 9/29/2009 + + + + + + + +IN WITNESS WHEREOF, the undersigned have executed this Termination Agreement as of the date first set forth above. + +19 + + Beijing SINA Internet Information Service Co., Ltd. + + By: + + Name: Title: Shanghai SINA Leju Information Technology Co. Ltd. + + By: + + Name: Title: + +Source: CHINA REAL ESTATE INFORMATION CORP, F-1, 9/29/2009 \ No newline at end of file diff --git a/full_contract_txt/ClickstreamCorp_20200330_1-A_EX1A-6 MAT CTRCT_12089935_EX1A-6 MAT CTRCT_Development Agreement.txt b/full_contract_txt/ClickstreamCorp_20200330_1-A_EX1A-6 MAT CTRCT_12089935_EX1A-6 MAT CTRCT_Development Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..14a70270545882f9eb9d3058cb70440826ec7be8 --- /dev/null +++ b/full_contract_txt/ClickstreamCorp_20200330_1-A_EX1A-6 MAT CTRCT_12089935_EX1A-6 MAT CTRCT_Development Agreement.txt @@ -0,0 +1,105 @@ +Exhibit 6.1 + +APPLICATION DEVELOPMENT AGREEMENT This Application Development Agreement (the "Agreement") is entered into as of March 20, 2020, effective as of March 20, 2020 (the "Effective Date") by and between InfinixSoft Global LLC, a Florida Limited Liability Company, with its principal office located at 360 NE 75 St Miami, Suite #127, 33138, Miami, Florida (the "Developer") and Clickstream Corporation with its principal office located at 1801 Century Park East Suite 1201 Los Angeles, CA 90067 (the "Client") and together with the Developer ( the "Parties"). RECITALS WHEREAS, the Client is engaged in the business of developing and designing mobile software applications; and WHEREAS, the Developer is engaged in the business of developing and designing application solutions; and WHEREAS, the Client wishes to engage the Developer as an independent contractor for the Client for the purpose of designing the Client's application (the "Application") on the terms and conditions set forth below; and WHEREAS, the Developer wishes to design the Application and agrees to do so under the terms and conditions of this Agreement; and WHEREAS, each Party is duly authorized and capable of entering into this Agreement. NOW THEREFORE, in consideration of the above recitals and the mutual promises and benefits contained herein, the Parties hereby agree as follows: 1. PURPOSE. The Client hereby appoints and engages the Developer, and the Developer hereby accepts this appointment, to perform the services described in Exhibit A attached hereto and made a part hereof, in connection with the design of the Application (collectively, the "Services"). 2. COMPENSATION. The total compensation for the design of the app shall be as set forth in Exhibit A hereto. These payments shall be made in installments according to the schedule set forth in Exhibit A hereto. 3. TERM. This Agreement shall become effective as of the Effective Date and, unless otherwise terminated in accordance with the provisions of Section 4 of this Agreement, will continue until the expiration of the Warranty Period as defined in subsection 9(a) of this Agreement. 4. TERMINATION. (a) Types of Termination. This Agreement may be terminated: 1. By either Party on provision of seven (7) days written notice to the other Party in case of a Force Majeure Event. 2. Client has the unilateral right to cancel this agreement at any time within a 7-day notice period. Further, Developer can only cancel due to lack of payment. Client will have a 30 day right to cure before a cancelation can occur. 3. By either Party for a material breach of any provision of this Agreement by the other Party, if the other Party's material breach is not cured within three (3) days of receipt of written notice thereof. This shall include any delays to the timeline specified in Exhibit A. 4. By the Client at any time and without prior notice, if the Developer is convicted of any crime or offense, fails or refuses to comply with the written policies or reasonable directives of the Client, or is guilty of serious misconduct in connection with performance under this Agreement. + +1 │ Page + +Source: CLICKSTREAM CORP, 1-A, 3/30/2020 + + + + + +(b) Responsibilities after Termination. Following the termination of this Agreement for any reason, the Client shall promptly pay the Developer according to the terms of Exhibit A for Services rendered before the effective date of the termination (the "Termination Date"). The Developer acknowledges and agrees that no other compensation, of any nature or type, shall be payable hereunder following the termination of this Agreement. All intellectual property developed pursuant to this Agreement before the Termination Date shall be delivered to the Client within one day of the Termination Date. 5. RESPONSIBILITIES. (a) Of the Developer. The Developer agrees to do each of the following: 1. Create the Application System as detailed in Exhibit A to this Agreement and extend its best efforts to ensure that the design and functionality of the Application System meets the Client's specifications. 2. Devote as much productive time, energy, and ability to the performance of its duties hereunder as may be necessary to provide the required Services in a timely and productive manner and to the timeframe specified in this agreement. 3. Perform the Services in a workmanlike manner and with professional diligence and skill, as a fully trained, skilled, competent, and experienced personnel. 4. On completion of the Application System, assist the Client in installation of the Application System to its final location, which assistance will include helping the Client with its upload of the finished files to the Client's selected Web-hosting Client and submitting for approval on the Apple Store and Google Play Store. 5. Provide Services and an Application System that are satisfactory and acceptable to the Client and free of defects. 6. Communicate and show with the Client regarding progress it has made with respect to the milestones listed in this agreement. 7. Operate and Maintain the Application System through hosting of games including customer Support 8. Assist the Client in identification and acquisition of corporate sponsors 9. Include internal messaging system whereas users can communicate with each other (b) Of the Client. The Client agrees to do each of the following: 1. Engage the Developer as the creator of its Application System. 2. Provide all assistance and cooperation to the Developer in order to complete the Application System timely and efficiently. 3. Provide initial information and supply all content for the Application System. 4. Provide acceptance testing and certification within one week of deployment of final build + +2 │ Page + +Source: CLICKSTREAM CORP, 1-A, 3/30/2020 + + + + + +6. CONFIDENTIAL INFORMATION. The Developer agrees, during the Term and thereafter, to hold in strictest confidence, and not to use, except for the benefit of the Client, or to disclose to any person, firm, or corporation without the prior written authorization of the Client, any Confidential Information of the Client. "Confidential Information" means any of the Client's proprietary information, technical data, trade secrets, or know-how, including, but not limited to, business plans, research, product plans, products, services, customer lists, markets, software, developments, inventions, processes, formulas, technology, designs, drawings, engineering, hardware configuration information, marketing, finances, or other business information disclosed to the Developer by the Client either directly or indirectly. 7. PARTIES' REPRESENTATIONS AND WARRANTIES. (a) The Parties each represent and warrant as follows: 1. Each Party has full power, authority, and right to perform its obligations under the Agreement. 2. This Agreement is a legal, valid, and binding obligation of each Party, enforceable against it in accordance with its terms (except as may be limited by bankruptcy, insolvency, moratorium, or similar laws affecting creditors' rights generally and equitable remedies). 3. Entering into this Agreement will not violate the charter or bylaws of either Party or any material contract to which that Party is also a party. (b) The Developer hereby represents and warrants as follows: 1. The Developer has the right to control and direct the means, details, manner, and method by which the Services required by this Agreement will be performed. 2. The Developer has the experience and ability to perform the Services required by this Agreement. 3. The Developer has the right to perform the Services required by this Agreement at any place or location, and at such times as the Developer shall determine. 4. The Services shall be performed in accordance with and shall not violate any applicable laws, rules, or regulations, and the Developer shall obtain all permits or permissions required to comply with such laws, rules, or regulations. 5. The Services required by this Agreement shall be performed by the Developer, and the Client shall not be required to hire, supervise, or pay any assistants to help the Developer perform such services. 6. The Developer is responsible for paying all ordinary and necessary expenses of itself or its staff. 7. The Developer shall not develop, maintain or market a similar platform and will not compete with the Client directly or indirectly worldwide. 8. At the time cash online betting is implemented, incorporate and update the approximate 40 algorithms previously developed by Developer for Client. (c) The Client hereby represents and warrants as follows: 1. The Client will make timely payments of amounts earned by the Developer under this Agreement. 2. The Client shall notify the Developer of any changes to its procedures affecting the Developer's obligations under this Agreement at least three days prior to implementing such changes. 3. The Client shall provide such other assistance to the Developer as it deems reasonable and appropriate. 4. Because of the trade secret subject matter of Developer's business, Client agrees that, during the term of this Agreement and for a period of two (2) years thereafter, it will not solicit the services of any of Developer's employees, consultants or suppliers for Client's own benefit or for the benefit of any other person or entity. + +3 │ Page + +Source: CLICKSTREAM CORP, 1-A, 3/30/2020 + + + + + +8. APPLICATION REPRESENTATIONS AND WARRANTIES. (a) Performance. The Developer hereby warrants and represents that following delivery of the Application System to the Client (which shall be deeded to occur only on the date the Web Application is uploaded to the AWS for distribution) pursuant to Exhibit A (the "Support Period"), the Application will be free from programming errors and defects in workmanship and materials, and will conform to the specifications of Exhibit A. If programming errors or other defects are discovered during the Support Period, the Developer shall promptly remedy those errors or defects at its own expense. The developer will fix any bugs that may come up from the original contract after the 90 days warranty has passed. (b) No Disablement. The Developer hereby warrants and represents that the Application System, when delivered or accessed by the Client, will be free from material defects, and from viruses, logic locks, and other disabling devices or codes, and in particular will not contain any virus, Trojan horse, worm, drop-dead devices, trap doors, time bombs, or other software routines or other hardware component that could permit unauthorized access, disable, erase, or otherwise harm the Application System or any software, hardware, or data, cause the Application System or any software or hardware to perform any functions other than those specified in this Agreement, halt, disrupt, or degrade the operation of the Application System or any software or hardware, or perform any other such actions. 9. TIMING AND DELAYS. The Developer recognizes and agrees that failure to deliver the Application in accordance with the delivery schedule detailed in Exhibit A to this Agreement will result in expense and damage to the Client. The Developer shall inform the Client immediately of any anticipated delays in the delivery schedule and of any remedial actions being taken to ensure completion of the Application System according to such schedule. If a delivery date is missed, the Client may, in its sole discretion, declare such delay a material breach of the Agreement under subsection 4(a) and pursue all of its legal and equitable remedies. The Client may not declare a breach, and the Developer cannot be held in breach of this Agreement, of this section if such delay is caused by an action or failure of action of the Client. In such case, the Developer will provide the Client with written notice of the delay and work on the Application System will work until the reason for the delay has been resolved by the Client and written notice of that resolution has been provided to the Developer. 10. NATURE OF RELATIONSHIP. (a) Independent Contractor Status. The Developer agrees to perform the Services hereunder solely as an independent contractor. The Parties agree that nothing in this Agreement shall be construed as creating a joint venture, partnership, franchise, agency, employer/employee, or similar relationship between the Parties, or as authorizing either Party to act as the agent of the other. The Developer is and will remain an independent contractor in its relationship to the Client. The Client shall not be responsible for withholding taxes with respect to the Developer's compensation hereunder. The Developer shall have no claim against the Client hereunder or otherwise for vacation pay, sick leave, retirement benefits, social security, worker's compensation, health or disability benefits, unemployment insurance benefits, or employee benefits of any kind. Nothing in this Agreement shall create any obligation between either Party or a third party. (b) Indemnification of Client by Developer. The Client has entered into this Agreement in reliance on information provided by the Developer, including the Developer's express representation that it is an independent contractor and in compliance with all applicable laws related to work as an independent contractor. If any regulatory body or court of competent jurisdiction finds that the Developer is not an independent contractor and/or is not in compliance with applicable laws related to work as an independent contractor, based on the Developer's own actions, the Developer shall assume full responsibility and liability for all taxes, assessments, and penalties imposed against the Developer and/or the Client resulting from such contrary interpretation, including but not limited to taxes, assessments, and penalties that would have been deducted from the Developer's earnings had the Developer been on the Client's payroll and employed as an employee of the Client. + +4 │ Page + +Source: CLICKSTREAM CORP, 1-A, 3/30/2020 + + + + + +11. WORK FOR HIRE. (a) Work for Hire. The Developer expressly acknowledges and agrees that any all proprietary materials prepared by the Developer under this Agreement shall be considered "works for hire" and the exclusive property of the Client unless otherwise specified. These items shall include, but shall not be limited to, any and all deliverables resulting from the Developer's Services or contemplated by this Agreement, all tangible results and proceeds of the Services, works in progress, records, diagrams, notes, drawings, specifications, schematics, documents, designs, improvements, inventions, discoveries, developments, trademarks,, licenses, trade secrets, customer lists, databases, software, programs, middleware, applications, and solutions conceived, made, or discovered by the Developer, solely or in collaboration with others, during the Term of this Agreement relating in any manner to the Developer's Services. (b) Additional Action to Assign Interest. To the extent such work may not be deemed a "work for hire" under applicable law, the Developer hereby assigns to the Client all of its right, title, and interest in and to such work. The Developer shall execute and deliver to the Client any instruments of transfer and take such other action that the Client may reasonably request, including, without limitation, executing and filing, at the Client's expense, copyright applications, assignments, and other documents required for the protection of the Client's rights to such materials. (c) Notice of Incorporation of Existing Work. If the Developer intends to integrate or incorporate any work that it previously created into any work product to be created in furtherance of its performance of the Services, the Developer must obtain the Client's prior written approval of such integration or incorporation. If the Client, in its reasonable discretion, consents, the Client is hereby granted an exclusive, worldwide, royalty-free, perpetual, irrevocable license to use, distribute, modify, publish, and otherwise exploit the incorporated items in connection with the work product developed for the Client. 12. RETURN OF PROPERTY. Within three (3) days of the termination of this Agreement, whether by expiration or otherwise, the Developer agrees to return to the Client all Client products, samples, models, or other property and all documents, retaining no copies or notes, relating to the Client's business including, but not limited to, reports, abstracts, lists, correspondence, information, computer files, computer disks, and all other materials and all copies of such material obtained by the Developer during and in connection with its representation of the Client. All files, records, documents, blueprints, specifications, information, letters, notes, media lists, original artwork/creative, notebooks, and similar items relating to the Client's business, whether prepared by the Developer or otherwise coming into its possession, shall remain the Client's exclusive property. 13. INDEMNIFICATION. (a) Of Client by Developer. The Developer shall indemnify and hold harmless the Client and its officers, members, managers, employees, agents, contractors, sub licensees, affiliates, subsidiaries, successors and assigns from and against any and all damages, liabilities, costs, expenses, claims, and/or judgments, including, without limitation, reasonable attorneys' fees and disbursements (collectively, the "Claims") that any of them may suffer from or incur and that arise or result primarily from (i) any gross negligence or willful misconduct of the Developer arising from or connected with the Developer's carrying out of its duties under this Agreement, or (ii) the Developer's breach of any of its obligations, agreements, or duties under this Agreement. (b) Of Developer by Client. The Client shall indemnify and hold harmless the Developer from and against all Claims that it may suffer from or incur and that arise or result primarily from (i) the Client's operation of its business, (ii) the Client's breach or alleged breach of, or its failure or alleged failure to perform under, any agreement to which it is a party, or (iii) the Client's breach of any of its obligations, agreements, or duties under this Agreement; provided, however, none of the foregoing result from or arise out of the actions or inactions of the Developer. + +5 │ Page + +Source: CLICKSTREAM CORP, 1-A, 3/30/2020 + + + + + +14. INTELLECTUAL PROPERTY. (a) No Intellectual Property Infringement by Developer. The Developer hereby represents and warrants that the use and proposed use of the Application by the Client or any third party does not and shall not infringe, and the Developer has not received any notice, complaint, threat, or claim alleging infringement of, any trademark, copyright, patent, trade secrets, industrial design, or other rights of any third party in the Application, and the use of the Application will not include any activity that may constitute "passing off." To the extent the Application infringes on the rights of any such third party, the Developer shall obtain a license or consent from such third party permitting the use of the Application. It is hereby stated, the Application developed under this agreement is the exclusive worldwide sole property of Client. (b) No Intellectual Property Infringement by Client. The Client represents to the Developer and unconditionally guarantees that any elements of text, graphics, photos, designs, trademarks, or other artwork furnished to the Developer for inclusion in the Application are owned by the Client, or that the Client has permission from the rightful owner to use each of these elements, and will hold harmless, protect, indemnify, and defend the Developer and its subcontractors from any liability (including attorneys' fees and court costs), including any claim or suit, threatened or actual, arising from the use of such elements furnished by the Client. (c) Continuing Ownership of Existing Trademarks, Copyrights and Patents. The Developer recognizes the Client's right, title, and interest in and to all service marks, trademarks, trade names , Copyrights and Patents used by the Client and agrees not to engage in any activities or commit any acts, directly or indirectly, that may contest, dispute, or otherwise impair the Client's right, title, and interest therein, nor shall the Developer cause diminishment of value of said trademarks or trade names through any act or representation. The Developer shall not apply for, acquire, or claim any right, title, or interest in or to any such service marks, trademarks, trade names, Copyrights and Patents or others that may be confusingly similar to any of them, through advertising or otherwise. Effective as of the termination of this Agreement, the Developer shall cease to use all of the Client's trademarks, marks, and trade names. (d) The Developer recognizes that the complete Intellectual Property of the project belongs to the Client. The Developer will deliver to the Client all the source code, licenses and other assets used during the process as soon as the work described in this proposal is finished under client acceptation and after receiving the last payment. 15. AMENDMENTS. No amendment, change, or modification of this Agreement shall be valid unless in writing and signed by both Parties. 16. ASSIGNMENT. The Client may assign this Agreement freely, in whole or in part. The Developer may not, without the written consent of the Client, assign, subcontract, or delegate its obligations under this Agreement, except that the Developer may transfer the right to receive any amounts that may be payable to it for its Services under this Agreement, which transfer will be effective only after receipt by the Client of written notice of such assignment or transfer. 17. SUCCESSORS AND ASSIGNS. All references in this Agreement to the Parties shall be deemed to include, as applicable, a reference to their respective successors and assigns. The provisions of this Agreement shall be binding on and shall inure to the benefit of the successors and assigns of the Parties. 18. FORCE MAJEURE. A Party shall be not be considered in breach of or in default under this Agreement on account of, and shall not be liable to the other Party for, any delay or failure to perform its obligations hereunder by reason of fire, earthquake, flood, explosion, strike, riot, war, terrorism, or similar event beyond that Party's reasonable control (each a "Force Majeure Event"); provided, however, if a Force Majeure Event occurs, the affected Party shall, as soon as practicable: + +6 │ Page + +Source: CLICKSTREAM CORP, 1-A, 3/30/2020 + + + + + +(a) notify the other Party of the Force Majeure Event and its impact on performance under this Agreement; and (b) use reasonable efforts to resolve any issues resulting from the Force Majeure Event and perform its obligations hereunder. 19. NO IMPLIED WAIVER. The failure of either Party to insist on strict performance of any covenant or obligation under this Agreement, regardless of the length of time for which such failure continues, shall not be deemed a waiver of such Party's right to demand strict compliance in the future. No consent or waiver, express or implied, to or of any breach or default in the performance of any obligation under this Agreement shall constitute a consent or waiver to or of any other breach or default in the performance of the same or any other obligation. 20. NOTICE. Any notice or other communication provided for herein or given hereunder to a Party hereto shall be in writing and shall be given in person, by overnight courier, or by mail (registered or certified mail, postage prepaid, return-receipt requested) to the respective Parties as follows: If to the Client: Contact: Frank Magliochetti, CEO Company Name: Clickstream Corp. Main Address: 1801 Century Park East Suite 1201 Los Angeles, CA 90067 If to the Developer: Contact: Ivan Saroka, CEO Company Name: InfinixSoft Global LLC Main Address: 360 NE 75th St. Suite #127, 33138, Miami, Florida 21. GOVERNING LAW. This Agreement shall be governed by the laws of the state of Florida. If litigation results from or arises out of this Agreement or the performance thereof, each Party shall be responsible for its own attorneys' fees, court costs, and all other expenses, whether or not taxable by the court as costs. 22. COUNTERPARTS/ELECTRONIC SIGNATURES. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which shall constitute one and the same instrument. For purposes of this Agreement, use of a facsimile, e-mail, or other electronic medium shall have the same force and effect as an original signature. 23. SEVERABILITY. Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal, or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality, or unenforceability will not affect any other provision or any other jurisdiction, but this Agreement will be reformed, construed, and enforced in such jurisdiction as if such invalid, illegal, or unenforceable provisions had never been contained herein. 24. ENTIRE AGREEMENT. This Agreement constitutes the final, complete, and exclusive statement of the agreement of the Parties with respect to the subject matter hereof and supersedes any and all other prior and contemporaneous agreements and understandings, both written and oral, between the Parties. + +7 │ Page + +Source: CLICKSTREAM CORP, 1-A, 3/30/2020 + + + + + +25. HEADINGS. Headings used in this Agreement are provided for convenience only and shall not be used to construe meaning or intent. ********************************************************************************************** EXHIBIT A A. PURPOSE OF APPLICATION SYSTEM. To create a new iOS / Android Native app and a web responsive site to allow users to connect with each other inside a unique social betting platform. The Platform is social trivia, initially sports trivia and other trivia contests leading to peer to peer betting intended for the causal and non- professional betting market. A landing page to promote the product is included as well for desktop and mobile devices. Developer will publish the app in Apple Store / Google Play Store with developer accounts registered to the client. The responsive website will be uploaded and deployed into an AWS Environment also registered to the client. The applications and responsive website will be fed by a Ruby on Rails backend with the according API. The API will be open to be used in other sports betting platforms. The app will be developed under the following considerations: ● Native iOS Swift 5.0 Language with Xcode Development Environment. ● Native JAVA with Android Studio for Android Devices with OS 6.0+ ● Ruby On Rails Backend + PostgreSQL + Rest API ● HTML5 + CSS 3 + Bootstrap Core Platform The Core of Click Stream is a free to play gaming platform that caters untapped market of the causal users that will spend a few seconds to interact with a platform for free in order to win real money. Our primary target is not the sports betters or the fantasy players. We target a more general demographic that is much more general and includes more of the female population. Our games will initially be quick to play quiz type games that allows the user to get involved in around 20 seconds, and then receive results from push notifications. Game types are set up dynamically with live game shows with Hosts 2 - 4 times per month. Because the format doesn't change, we can run games nightly for NBA to NHL, NFL to individual events such as the Oscars, other awards shows, and new sporting events such as Soccer and Nascar. Games and events automated from the backend and launched automatically. Api's Are plugged in to track results in real time, and there is a manual option to allow customs events that can be run through the platform. Business model- What sets our platform apart from other platforms in this untapped casual industry is that we have winners win significant amounts of money via time breakers, timing of inputting answers etc. Competitor platforms pay out an average of a few dollars. Our winners are more top loaded and pay out around $2,500 per the top 5 and $1,000 per the top 10. Initially monetization is based upon sponsors paying out the pots. IE, a pot for a single game will be around $25,000 to the winners and Sponsors will pay around $30,000 to $35,000 to sponsor the event. In return they will get around 30,000-75,000 unique user hits and eyeballs to their product/company. + +8 │ Page + +Source: CLICKSTREAM CORP, 1-A, 3/30/2020 + + + + + +Eventually the platform will expand into affiliate sales of products and once the audience has grown large enough, peer to peer betting. Monetization We will initially fund the first month of pots in order to attract enough users to get sponsors. After the first month we will have enough users to begin having sponsors pay the pots. We will then expand to peer to peer betting and advertising. B. SERVICES. The Developer will develop the mobile application based on the Client's specifications, will assist the Client in acquiring corporate sponsors and will operate and maintain the Application System through hosting of games including customer support. The Client will provide The Developer with all necessary information to carry out the development process. C. SPECIFICATIONS. Features for Website & iOS / Android Mobile App for users include: ● Home Screen ● Users Sign in / Sign up ● Profile Creation / Edition with ● Social Networks links ● Add image / Videos ● In App Purchase by each platform convenient method + Stripe.com integration on website. ● Lineup Creation ● SMS/email alert system (when a lineup has to be changed). ● Monetization / Subscription Model ● Mirco social betting ● Peer to Peer betting ● Group betting ● Dynamic Quiz game Engine ● Other dynamic Game Engines ● Homepage with newsfeed, how to play screens, institutional information, Twitter feeds, promotions and other CTAs. ● Historical data with "How your lineup did" compared to winning lineups. ● Push Notification ● Pop up (Advertiser) ● Rate Us ● Chat ● Block / Delete ● Terms of Use / Privacy Policy ● Analytics integration Web Admin Dashboard features include: ● Statistics to see the data in real-time ● Resolve payment issues ● Users Main Administration ● Disable / Lock Users ● Homepage features administration. ● Confirm Signup ● Forgot Password ● Payment success / receipt ● Payment Failed ● Renew Reminder ● Renew Notice + +9 │ Page + +Source: CLICKSTREAM CORP, 1-A, 3/30/2020 + + + + + +Transactional emails ● Welcome Email ● Order Confirmation ● Forgot Password Notes ● UI / UX design is included in the proposal. ● The source code belongs to the client and will be delivered as soon as the project is fully finished. ● Confidentiality: The main concept and idea of the platform are not to be shared by Developer. D. COMPLETION SCHEDULE. The schedule for completion of the Application Development (the "Schedule") and the responsibilities under the Agreement is detailed as follows: Mobile / Web App development: 24 weeks + 4 weeks for QA & Details. E. MAINTENANCE AND SUPPORT. The Maintenance & Support is not included in this contract, but we suggest making a plan in the future that includes bug fixing, server monitoring and constant optimization of the apps. 90 days warranty (bugfixing) support is included. F. MILESTONES. ● Week 1 -> UI Design + Logo + Look & Feel ● Week 2-> UI Design - 40% of the UX flow completed ● Week 4 -> UI Design - 75% of the UX flow completed ● Week 6 -> Finished UI Design + Feedback / Technical Documentation ● Week 8 -> Final UI Design - Initial Dev. Process - Backend Development Started ● Week 10 -> Initial Dev. builds with 3 or more screens (hardcoded frontend) for iOS ● Week 12 -> Second Dev. builds with 6 or more screens (hardcoded frontend) for iOS ● Week 14 -> Third Dev. builds with all screens (hardcoded frontend) for iOS / Backend CMS in alpha stage ● Week 16 -> Registration process and Home APIs Integrated in Dev. builds. ● Week 18 ->Other APIs Integrated in Dev. builds. ● Week 20 -> Mobile Apps in Alpha Stage with 70% of the APIs Integrated ● Week 22 -> Mobile Apps in Alpha Stage with 90% of the APIs Integrated ● Week 23 -> Mobile Apps in Beta Stage of the APIs Integrated + Payment Gateway Integration ● Week 24 -> Final RC1 Build uploaded to stores + AWS Production Deployment subject to acceptance testing by client G. PAYMENT SCHEDULE. The total cost for the development of the project is $ 480,000. - Developer has accepted 4,122,394 shares of Clients common stock in exchange for $180,000 worth of services to be provided. The Shares were paid to INFX Development, LLC. (Certificate # 1054) and accepted by Developer as payment on December 30t h, 2019 Client will form subsidiary and register the new business if necessary. + +10 │ Page + +Source: CLICKSTREAM CORP, 1-A, 3/30/2020 + + + + + +The Client agrees to pay to the Developer for the development of the project as listed above, the amount of the other $300,000. - according to the following schedule: ● $30,000. - down payment. ● $30,000.- mid payment (Week 2). ● $30,000.- mid payment (Week 6). ● $30,000.- mid payment (Week 9). ● $30,000.- mid payment Week 12). ● $30,000.- mid payment (Week 16). ● $30,000.- mid payment (Week 20). ● $90,000.- following Client acceptance of the Application, and when RC1 version is delivered and uploaded to stores. By signing below, the Parties agree to comply with all of the requirements contained in this agreement. IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first above written Clickstream Corp. By: Frank Magliochetti, CLIENT CEO Name: Title: CEO InfinixSoft Global LLC DEVELOPER By: Name: Ivan Alejandro Saroka Title: CEO - Founding Partner 11 │ Page + +Source: CLICKSTREAM CORP, 1-A, 3/30/2020 \ No newline at end of file diff --git a/full_contract_txt/CnsPharmaceuticalsInc_20200326_8-K_EX-10.1_12079626_EX-10.1_Development Agreement.txt b/full_contract_txt/CnsPharmaceuticalsInc_20200326_8-K_EX-10.1_12079626_EX-10.1_Development Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..17fa931ceed54c037b6a62a2eefe4cba4d445d67 --- /dev/null +++ b/full_contract_txt/CnsPharmaceuticalsInc_20200326_8-K_EX-10.1_12079626_EX-10.1_Development Agreement.txt @@ -0,0 +1,47 @@ +Exhibit 10.1 Development Agreement This Development Agreement (the "Agreement") dated as of March 20, 2020 (the "Effective Date") is entered into by and between CNS Pharmaceuticals, Inc. ("CNS"), a Nevada corporation, having a business address of 2100 West Loop South, Suite 900, Houston, Texas 77027, and WPD Pharmaceuticals, ("WPD"), a Polish corporation, having a business address of ul. Żwirki i Wigury 101, 02-089 Warszawa. CNS and WPD are sometimes referred to herein individually as a "Party" and collectively as the "Parties." RECITALS WHEREAS, WPD is party to a sublicense agreement dated February 19, 2019 with Moleculin Biotech, Inc. ("MBI") (the "Sublicense Agreement") to research and develop, manufacture, have manufactured, use, export/import, offer to sell and/or sell certain products for use in certain territories; WHEREAS, WPD is developing certain anti-viral indications pursuant to the Sublicense Agreement; and WHEREAS, CNS has agreed to fund a portion of the development of such indications in exchange for certain economic rights. NOW, THEREFORE, in consideration of the covenants, conditions and agreements hereinafter set forth, and other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, WPD and CNS hereby agree as follows: ARTICLE 1 DEFINITIONS 1.1 "Approval Achievement Date" means the earlier of the: (i) date on which WPD receives marketing approval for a Development Product in one-half of the countries included in the Sublicensed Territory, as defined in the Sublicense Agreement; or (ii) the payment by WPD to CNS of Development Fees hereunder of $1.0 million. 1.2 "Business Day" means any day other than a day which is a Saturday, a Sunday or any other day on which banks are authorized or required to be closed in New York City, NY. 1.3 "Calendar Quarter" means the consecutive three month period ending on one of March 31, June 30, September 30, or December 31. 1.4 "Confidential Information" includes: (1) all information contained in documents marked "confidential" and disclosed by one Party (the "disclosing party") to the other Party (the "recipient party") pursuant to this Agreement; (2) orally disclosed information which is disclosed by the disclosing party to the recipient party pursuant to this Agreement, summarized in writing, identified as "confidential" and delivered to the recipient party; and (3) all proprietary technical information, business and financial information, and all other information which a reasonable person would treat confidentially that relates to the Development Products and disclosed from the disclosing party to the recipient party, whether or not the information is marked as "confidential." Notwithstanding anything to the contrary, CNS shall be permitted to make such disclosures as CNS determines, in its sole discretion, is required pursuant to the Securities Exchange Act of 1934, as amended, and the rules and regulations thereof. 1.5 "Development Fee" means 50% of the Net Sales for any Development Products in the Development Territory. 1.6 "Development Products" means: (i) Sublicensed Products, as defined in the Sublicense Agreement, in the field of pharmaceutical drug products for the treatment of any viral infection in humans; and (ii) any other drug or product in the field of pharmaceutical drug products for the treatment of any viral infection in humans that is licensed between WPD and MBI after this date. 1.7 "Development Territory" means (i) until the Approval Achievement Date, the Sublicensed Territory, as defined in the Sublicense Agreement; and (ii) after the Approval Achievement Date, the Sublicensed Territory, as defined in the Sublicense Agreement, other than Poland. + +1 + +Source: CNS PHARMACEUTICALS, INC., 8-K, 3/26/2020 + + + + + +1.8 "Net Sales" shall be defined in the same way as defined in Sections 6.1 (a)-(f) of the Sublicense Agreement, as applicable only to the relevant Development Products less any "pass-thru royalties" or "override royalty percentage" paid by WPD pursuant to the Sublicense Agreement. 1.9 "Phase II Milestone Payment" means the completion by WPD of a Phase II Study in one of the countries included within the Development Territory, which clinical trial meets all endpoints and is sufficient to form the basis of an application for approval of a Development Product in one Development Territory other than Poland. 1.10 "Sale", "Sells", "Sold" means the transfer or disposition of a Development Product, for value, to a person or entity for end use. ARTICLE 2 DEVELOPMENT AGREEMENT 2.1 Subject to the terms and conditions of this Agreement, WPD hereby agrees to use its commercially reasonable efforts in good faith to take, or cause to be taken, all actions, and to do or cause to be done, all things necessary, proper or desirable or advisable under applicable laws to develop and commercialize the Development Products, with a goal of eventual approval of Development Products in the Development Territory. In exchange for the payment by WPD of the Development Fee to CNS, CNS hereby agrees to pay WPD the following payments: (i) within thirty Business Days from the date of this Agreement, CNS will make an upfront payment of $225,000 to WPD; and (ii) within thirty days of the verified achievement of the Phase II Milestone, (such verification shall be conducted by an independent third party mutually acceptable to the parties hereto), CNS will make a payment of $775,000 to WPD. 2.2 If after three years from the Effective Date of this Development Agreement, WPD fails to use commercially reasonable efforts as set forth in section 2.1 above, CNS shall have the right to terminate this Agreement pursuant to the terms specified in Section 6.2 below, and CNS shall be entitled to the return of any payments made hereunder. For the purpose of this clause, if WPD has expended the funds provided by CNS pursuant to section 2.1 above on developing anti-viral indications (including all direct and indirect costs of such development), it will be deemed to have used commercially reasonable efforts in good faith. 2.3 The first Development Fees payment shall be due forty-five days after the end of the Calendar Quarter in which the first Sale of a Development Product took place. Thereafter, WPD shall furnish to CNS Development Fees no later than forty-five days after the end of each Calendar Quarter for the Sale of Development Products through the end of such Calendar Quarter and shall further furnish CNS with a written statement setting forth an accounting showing the calculation of the Development Fees. ARTICLE 3 INFORMATION AND USE 3.1 WPD shall furnish CNS with written reports summarizing the progress of the research and development conducted under the Sublicense Agreement related to the Development Products on a quarterly basis. 3.2 The Parties agree to a mutual exchange of any data, information or know-how resulting from the research and development of the Development Products. ARTICLE 4 OTHER COMPENSATION 4.1 If MBI exercises its right to terminate the Sublicense Agreement in whole, or to remove a portion of the sublicensed subject matter that relates to some or all of the Development Products, by paying to WPD the Buyback Consideration (as defined in the Sublicense Agreement), WPD agrees that CNS shall receive the greater of (i) 50% of the Buyback Consideration that is attributable to the field of anti-viral pharmaceutical drug products for humans (such attribution to be mutually agreed upon by the Parties), and (ii) the amounts actually provided to WPD pursuant to Section 2.1 of this Agreement. + +2 + +Source: CNS PHARMACEUTICALS, INC., 8-K, 3/26/2020 + + + + + +ARTICLE 5 CONFIDENTIALITY 5.1 During the term of this Agreement and for a period of five (5) years thereafter, the Parties each agree that Confidential Information of the disclosing party, which is disclosed to the recipient party pursuant to this Agreement: (i) shall be received and held in strict confidence, (ii) shall be used only for the purposes of this Agreement, and (iii) will not be disclosed by the recipient party (except as required by law, court order or regulation), its agents or employees without the prior written consent of the disclosing party, except to the extent that the recipient party can establish by competent written proof that particular Confidential Information: (i) was in the public domain at the time of disclosure to the recipient party; or later became part of the public domain through no act or omission of the recipient party, its employees, agents, successors or assigns; or (ii) was lawfully disclosed to the recipient party by a third party having the right to disclose it to the recipient party; or (iii) was already known by the recipient party at the time of disclosure; or (iv) was independently developed by the recipient party without use of the disclosing party's Confidential Information; or (iv) is required by law, court order or regulation to be disclosed, provided that the recipient party so obligated to disclose the Confidential Information shall promptly notify the disclosing party of such requirement and provide the disclosing party an opportunity to challenge or limit the disclosure requirement and to seek confidential treatment or protection order, and that the Confidential Information so disclosed shall remain otherwise subject to the confidentiality and non-use obligations set forth above in this section. Particular Confidential Information shall not be deemed to come under any of the above exceptions merely because it is embraced by more general information that is or becomes subject to any of the above exceptions. 5.2 Subject to full compliance with Section 5.3 below, either party may disclose the other party's Confidential Information to its employees, consultants and affiliates who have a need to know such information in order to satisfy such Parties obligations under this Agreement. Such employees, consultants and affiliates shall be required to agree to maintain the confidentiality of such information pursuant to terms no less restrictive that the ones set forth herein. 5.3 Each Party shall protect the other party's Confidential Information with at least the same degree of care as it uses to protect its own confidential information, but at no time less than a reasonable degree of care. This obligation will exist while this Agreement is in force and for a period of five (5) years thereafter. 5.4 Data Privacy and Security Laws. WPD and its subsidiaries (if any) will at all times during the Term be in material compliance with all applicable data privacy and security laws and regulations, and WPD and its subsidiaries (if any) have taken or will take commercially reasonable actions to comply with the European Union General Data Protection Regulation ("GDPR") (EU 2016/679) and all other applicable laws and regulations with respect to Personal Data (defined below) that have been announced as of the date hereof as becoming effective within 12 months after the date hereof, and for which any non-compliance with same would be reasonably likely to create a material liability (collectively, the "Privacy Laws"). To WPD's knowledge, WPD and its subsidiaries (if any) have been and currently are in material compliance with the GDPR. To ensure material compliance with the Privacy Laws, WPD and its subsidiaries (if any) have taken, and currently take, commercially reasonable steps reasonably designed to ensure compliance in all material respects with Privacy Laws relating to data privacy and security and the collection, storage, use, disclosure, handling, and analysis of Personal Data that WPD has collected, and collects, or is in WPD's possession or will be in WPD's possession during the Term. "Personal Data" means "personal data" as defined by GDPR. ARTICLE 6 TERM AND TERMINATION 6.1 The term of this Agreement will commence on the Effective Date and remain in full force and effect until the expiration of the Sublicense Agreement, unless earlier termination by pursuant to the terms of this Agreement ("Term"). 6.2 Subject to any rights herein which survive termination, this Agreement will earlier terminate in its entirety: (i) upon thirty (30) calendar days written notice from either party if the other party materially breaches this Agreement, unless before the end of such thirty (30) calendar day notice period, the breaching party has cured the material default or breach to the non-breaching party's reasonable satisfaction; or (ii) at any time by mutual written agreement between the Parties, subject to any terms herein which survive termination. + +3 + +Source: CNS PHARMACEUTICALS, INC., 8-K, 3/26/2020 + + + + + +ARTICLE 7 REPRESENTATIONS, WARRANTIES AND COVENANTS 7.1 Each Party represents and warrants that: 7.1.1 it is duly organized and validly existing under the laws of its state or country of incorporation, and has full corporate power and authority to enter into this Agreement and to carry out the provisions hereof; 7.1.2 it is duly authorized to execute and deliver this Agreement and to perform its obligations hereunder, and the person executing this Agreement on its behalf has been duly authorized to do so by all requisite corporate action; 7.1.3 this Agreement is legally binding upon it and enforceable in accordance with its terms; that the execution, delivery and performance of this Agreement by it does not conflict with any Agreement, instrument or understanding, oral or written, to which it is a party or by which it may be bound, nor violate any material law or regulation of any governmental entity having jurisdiction over it; and 7.1.4 it has not granted, and will not grant during the term of the Agreement, any right to any third party that would conflict with the rights granted to the other Party hereunder; 7.1.5 that it has (or will have at the time performance is due) maintained, and will maintain, and keep in full force and effect, all agreements, permits and licenses necessary to perform its obligations hereunder; and in complying with the terms and conditions of this Agreement and carrying out any obligations hereunder, it will comply (and it will ensure that its subcontractor's comply) with all applicable laws, regulations, ordinances, statutes, and decrees or proclamations of all governmental entities having jurisdiction over such Party. 7.2 U.S. FCPA Compliance. WPD hereby agrees to at all times comply with the U.S. Foreign Corrupt Practices Act of 1977, as amended (the "FCPA"), and WPD shall establish, institute and maintain policies and procedures designed to ensure that: 7.2.1 no agent, employee or affiliate of WPD, or any of its affiliates, takes any action, directly or indirectly, that would result in a violation by such person of the FCPA or any other anti-bribery or anti-corruption law, rule or regulation of similar purpose and scope, including, without limitation, making use of the U.S. mails or any means or instrumentality of interstate commerce in furtherance of an unlawful offer, payment, promise to pay or authorization of the unlawful payment of any money, or other property, gift, promise to give, or authorization of the giving of anything of value to any "foreign official" or any foreign political party or official thereof, of any candidate for any foreign office or any candidate for foreign political office, in contravention of the FCPA; 7.2.2 WPD, and its affiliates, shall at all times keep books, records and accounts which, in reasonable detail, accurately and fairly reflect the transactions and dispositions of their assets and maintain a system of internal accounting controls sufficient to provide reasonable assurances that transactions are properly authorized and recorded; 7.2.3 WPD shall, and shall cause its respective affiliates, to permit CNS and its respective designated representatives, at reasonable times and upon reasonable prior notice to such parties, to review the books and records of WPD and any of its affiliates and to discuss the affairs, finances and condition of such party and any of its affiliates with the officers of such entities and any of their affiliates in relation to their compliance with this section, as applicable. 7.2.4 WPD understands and agrees that CNS may terminate this Agreement immediately and without any early termination penalty in the event that WPD, or any of its affiliates, materially violates the FCPA or any other anti-bribery or anti-corruption law. WPD understands and agrees that, if WPD, or any of its affiliates, intends to use foreign subcontractors to provide any services pursuant to this Agreement, such party and each of its affiliates is prohibited from engaging or using subcontractors for performance of services under this Agreement without prior and express authorization, in writing, by CNS. If WPD, or any of its affiliates, is authorized to engage or use subcontractors for such work, such party and each of its affiliates so involved agrees to obtain a commitment from the subcontractor to comply with the FCPA and any other anti-bribery or anti-corruption law. + +4 + +Source: CNS PHARMACEUTICALS, INC., 8-K, 3/26/2020 + + + + + +ARTICLE 8 INDEMNIFICATION 8.1 WPD hereby agrees to hold harmless and indemnify CNS, its officers, affiliates, employees, and agents (the "CNS Indemnitees") from and against any and all third party claims, demands, causes of actions, costs of suit and reasonable and documented attorney's fees (collectively "Claims") caused by, arising out of, or resulting from WPD's, its employees, agents', affiliates', licensees', sublicensees' or subcontractors' (i) negligence or willful misconduct; (ii) breach of any warranty or representations set forth herein; (iii) breach or alleged breach of third party intellectual property rights; and (iv) use or sale of Development Products. ARTICLE 9 MISCELLANEOUS 9.1 The Parties shall execute and deliver any and all additional papers, documents, and other instruments and shall do any and all further acts and things reasonably necessary, if any, in connection with the performance of its obligation hereunder to carry out the intent of this Agreement. 9.2 This Agreement contains the entire understanding of the Parties, and supersedes all prior agreements and understandings between the Parties. This Agreement may be amended only by a written instrument signed by the Parties. 9.3 The waiver by any Party of any terms or condition of this Agreement, or any part hereof, shall not be deemed a waiver of any other term or condition of this Termination Agreement, or of any later breach of this Agreement. 9.4 Any notice required by this Agreement will be given by personal delivery (including delivery by reputable messenger services such as Federal Express) or by prepaid, first class, certified mail, return receipt requested, addressed to: If to WPD: If to CNS: WPD Pharmaceuticals sp. z o.o CNS Pharmaceuticals, Inc. Attention: CEO Attention: CEO ul. Żwirki i Wigury 101 2100 West Loop South, Suite 900 02-089 Warszawa, Poland Houston, TX 77027 9.5 The Article and Section captions in this Agreement have been inserted as a matter of convenience and are not part of this Termination Agreement. References to $ or "dollars" means United States dollars. 9.6 This Agreement may be executed in counterparts, all of which together shall constitute a single agreement. 9.7 If any provision of this Agreement or application thereof to anyone is adjudicated to be invalid or unenforceable, such invalidity or unenforceability shall not affect any provision or application of this Agreement which can be given effect without the invalid or unenforceable provision or application, and shall not invalidate or render unenforceable such provision or application. Further, the judicial or other competent authority making such determination shall have the power to limit, construe or reduce the duration, scope, activity and/or area of such provision, and/or delete specific words or phrases as necessary to render, such provision enforceable. 9.8 This Agreement will be governed by, construed and enforced in accordance with the laws of the State of Texas. Any dispute between the Parties regarding or related to this Agreement shall be litigated in the courts located in Houston, Texas, and WPD agrees not to challenge personal jurisdiction in that forum. IN WITNESS WHEREOF, the Parties hereto have executed this Agreement by their duly authorized representatives with full right, power and authority to enter into and perform under this Agreement. CNS Pharmaceuticals, Inc. By____/s/ John Climaco___________________ John Climaco, CEO + +WPD Pharmaceuticals SP. z o.o. By__/s/ Mariusz Olejniczak___________ Mariusz Olejniczak, President + +5 + +Source: CNS PHARMACEUTICALS, INC., 8-K, 3/26/2020 \ No newline at end of file diff --git a/full_contract_txt/CoherusBiosciencesInc_20200227_10-K_EX-10.29_12021376_EX-10.29_Development Agreement.txt b/full_contract_txt/CoherusBiosciencesInc_20200227_10-K_EX-10.29_12021376_EX-10.29_Development Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..03de4a1c11422a94fb24363d08cafddc46d034fb --- /dev/null +++ b/full_contract_txt/CoherusBiosciencesInc_20200227_10-K_EX-10.29_12021376_EX-10.29_Development Agreement.txt @@ -0,0 +1,1147 @@ +Exhibit 10.29 Confidential Execution Version [***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded information is not material and would likely cause competitive harm to the registrant if publicly disclosed. + +NOV 02, 2019 + +BIOEQ IP AG + +AND + +COHERUS BIOSCIENCES, INC. + +LICENSE AND DEVELOPMENT AGREEMENT + +Source: COHERUS BIOSCIENCES, INC., 10-K, 2/27/2020 + + + + + +Confidential Execution Version CONTENTS + +Clause Page + +1. DEFINITIONS AND INTERPRETATION1 + +2. LICENSE GRANT10 + +3. DEVELOPMENT11 + +4. REGULATORY ACTIVITIES14 + +5. MANUFACTURING AND SUPPLY17 + +6. COMMERCIALIZATION18 + +7. FINANCIAL PROVISIONS20 + +8. TAXATION23 + +9. INTELLECTUAL PROPERTY24 + +10. COVENANTS RELATING TO THE [***] AGREEMENT30 + +11. CONFIDENTIALITY30 + +12. REPRESENTATIONS, WARRANTIES AND COVENANTS32 + +13. INDEMNIFICATION AND LIMITATION OF LIABILITY34 + +14. GOVERNANCE35 + +15. TERM AND TERMINATION; NON-SOLICITATION37 + +16. GENERAL PROVISIONS43 + +Schedules + +Annex 1: [***] Agreement + +Annex 2: Term Sheet for Manufacturing and Supply Agreement + +Schedule 1.36: Licensed Patents + +Schedule 3.2: Initial Development & Manufacturing Plan + +Schedule 3.5.1: [***] + +Schedule 6.2(c): Initial Commercialization Commitments + +Schedule 6.3: Contents of Commercialization Plan for Planned Activities + +Schedule 16.5: Pre-Approved Subcontractors + +Source: COHERUS BIOSCIENCES, INC., 10-K, 2/27/2020 + + + + + +Confidential Execution Version LICENSE AND DEVELOPMENT AGREEMENT + +This LICENSE AND DEVELOPMENT AGREEMENT (this Agreement) is entered into effective as of Nov. 02, 2019 (the Effective Date) by and between Bioeq IP AG, having its place of business at [***] (Bioeq) and Coherus BioSciences, Inc., having its principal place of business at 333 Twin Dolphin Drive, Suite 600, Redwood City, CA, 94065, USA (Licensee). + +Bioeq and Licensee shall also each individually be referred to herein as a Party, and shall be referred to jointly as the Parties. + +RECITALS + +WHEREAS, Bioeq is a specialized biosimilar company; + +WHEREAS, Bioeq is the owner or exclusive licensee of all right, title and interest to certain products which are being developed as biosimilars to pharmaceutical products comprising the monoclonal antibody fragment Ranibizumab and currently marketed in the field of ophthalmology under the brand name Lucentis®; + +WHEREAS, Licensee is a company focused on the development and commercialization of biosimilar products; and + +WHEREAS, Licensee wishes to obtain an exclusive license from Bioeq for the commercialization of Ranibizumab biosimilar products being developed by Bioeq in the United States of America in consideration for upfront, milestone and royalty payments to Bioeq, and Bioeq is willing to grant such license subject to the terms and conditions of this Agreement. + +NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants set forth below, the Parties hereby agree as follows: + +1.DEFINITIONS AND INTERPRETATION + +For purposes of this Agreement, the capitalized terms used in this Agreement shall have the respective meanings set forth in this Section 1 below. + +1.1 Affiliate means with respect to any Party, (a) any legal entity of which the securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or more than 50% of the general partnership interest are, at the time such determination is being made, owned, controlled or held, directly or indirectly, by such legal entity; or (b) any legal entity which, at the time such determination is being made, is controlling or under common control with, such Party. As used in this definition, the term "control", whether used as a noun or verb, refers to the possession, directly or indirectly, of the power to direct, or cause the direction of, the management or policies of a legal entity, whether through the ownership of voting securities, by contract or otherwise. + +1.2 Agreement shall have the meaning ascribed to it in the introductory paragraph above. + +1.3 Applicable Law means any and all applicable federal, state, local and international laws, rules and regulations, including regulations of competent Regulatory Authorities and environmental laws, as amended from time to time, and the regulations promulgated thereunder, as amended from time to time. + +1.4 [***] + +Source: COHERUS BIOSCIENCES, INC., 10-K, 2/27/2020 + + + + + +Confidential Execution Version 1.5 Biologics License Application or BLA means a request for permission to introduce, or deliver for introduction, a biologic product into interstate commerce (21 CFR 601.2) to the FDA, including any supplements, addendums, or amendments thereto. For the avoidance of doubt, the term Biologics License Application or BLA shall include any Abbreviated Biologics License Application. + +1.6 Biologics License Application Approval means issuance of a Department of Health and Human Services U.S. License under 351(k) of the Public Health Services Act controlling the manufacture and sale of biologic products or any successor statutory provisions thereof. + +1.7 BPCIA means the Biologics Price Competition and Innovation Act of 2009, as amended. + +1.8 CMO means contract manufacturing organization. + +1.9 Commercially Reasonable Efforts means, with respect to the efforts to be used by a Party under this Agreement with respect to the Licensed Products, those efforts and resources normally used by a major pharmaceutical or a sufficiently financed biotechnology company for a product owned by it, or to which it has rights, which is of similar market potential at comparable stages of development, taking into account the competitiveness of the marketplace, the proprietary position of the product, the performance of other products that are of similar market potential and the likely timing of other product's entry into the market, the regulatory structure involved, the profitability of the applicable product, relevant Third Party intellectual property necessary to manufacture or Commercialize the Licensed Product and other relevant factors commonly considered in similar circumstances, including technical, legal, scientific or medical factors. + +1.10 Commercialization means the conduct of all activities undertaken before and after Regulatory Approval relating to the promotion, marketing, sale and distribution (including importing, exporting, transporting, customs clearance, warehousing, invoicing, handling and delivering products to customers) of pharmaceutical products, including: (a) sales force efforts, detailing, advertising, medical education, planning, marketing, sales force training and sales and distribution; and (b) scientific and medical affairs. For clarity, Commercialization does not include any Development activities, whether conducted before or after Regulatory Approval. "Commercialize" and "Commercializing" have correlative meanings. + +1.11 Competitive Product means (i) any product which contains Ranibizumab and is either a Reference Product or a biosimilar to a Reference Product, but excluding in any case the Licensed Products, (ii) [***] (but for clarity [***]) or (iii) [***] (but for clarity [***]). + +1.12 Competitor means any person or entity (other than the Parties and their Affiliates) which has initiated and is then-active in [***] the marketing, selling or distribution of a Competitive Product, [***] in the Territory, as well as any Affiliate of any such person or entity. + +1.13 Competitor Change of Control means any of the following events after the Effective Date: + +(a) any Competitor (i) becomes the beneficial owner, directly or indirectly, of shares of capital stock or other interests (including partnership interests) of the Licensee then outstanding and normally entitled (without regard to the occurrence of any contingency) to vote in the election of the directors, managers or similar supervisory positions (Voting Stock) of such Party representing more than fifty percent (50%) of the total voting power of all outstanding classes of Voting Stock of the Licensee or (ii) has the power, directly or indirectly, to appoint a majority of the Licensee's managing directors or to elect a majority of the members of the Licensee's board of directors, supervisory board or similar governing body (Board of Directors); or + +Source: COHERUS BIOSCIENCES, INC., 10-K, 2/27/2020 + + + + + +Confidential Execution Version (b) the Licensee enters into a merger, consolidation or similar transaction with a Competitor (whether or not such Party is the surviving entity) and as a result of such merger, consolidation or similar transaction (i) the managing directors or the members of the Board of Directors of the Licensee immediately prior to such transaction constitute less than a majority of the managing directors or the members of the Board of Directors of the Licensee or such surviving person immediately following such transaction or (ii) the persons that beneficially owned, directly or indirectly, the shares of Voting Stock of the Licensee immediately prior to such transaction cease to beneficially own, directly or indirectly, shares of Voting Stock of the Licensee representing a majority of the total voting power of all outstanding classes of Voting Stock of the surviving person in substantially the same proportions as their ownership of Voting Stock of the Licensee immediately prior to such transaction. + +1.14 Confidential Information means, with respect to a Party, all Know-How and all other proprietary information of such Party, including information on the business, affairs, research and development activities, results of non-clinical and clinical trials, national and multinational regulatory proceedings and affairs, finances, plans, contractual relationships and operations of such Party. Furthermore, the terms and conditions of this Agreement shall be considered Confidential Information of both Parties. For the avoidance of doubt, all Know-How and proprietary information relating to the Licensed Products generated by or on behalf of Bioeq and provided to Licensee hereunder shall be considered Confidential Information of Bioeq. + +1.15 Control (whether used as a noun or as a verb) or Controlled means, with respect to any Intellectual Property Right, Trademark or Know-How, the possession (whether by ownership or license, other than pursuant to this Agreement) by a Party of the ability to grant to the other Party access or a license as provided herein under such Intellectual Property Right, Trademark or Know-How without violating the terms of any agreement or other arrangements with any Third Party. + +1.16 Damages shall have the meaning ascribed to it in Section 9.4.3. + +1.17 Defend or Defense shall have the meaning ascribed to it in Section 9.4.2. + +1.18 Development means all non-clinical and clinical research and drug development activities as well as Manufacturing process development, upscaling of the Manufacturing process and chemistry, manufacturing and control development work conducted in respect of any pharmaceutical product, including those necessary to obtain Regulatory Approval for such pharmaceutical product. When used as a verb, Develop means to engage in Development. + +1.19 Disclosing Party shall have the meaning ascribed to it in Section 11.1. + +1.20 Effective Date shall have the meaning ascribed to it in the introductory paragraph above. + +1.21 Existing Reference Product shall have the meaning ascribed to it in Section 1.61. + +1.22 FDA means the United States Food and Drug Administration, and any successor agency thereto. + +1.23 Field means any human use of the Licensed Product in the field of ophthalmology and for any other approved labelled indication of such Licensed Products. + +1.24 First Commercial Sale means, with respect to any Licensed Product in the Territory, the first sale by Licensee or its Affiliates of such Licensed Product to a Third Party for use in the Field in the Territory, after such Licensed Product has been granted Regulatory Approval for use in the Field in the Territory. + +Source: COHERUS BIOSCIENCES, INC., 10-K, 2/27/2020 + + + + + +Confidential Execution Version 1.25 [***] means [***] + +1.26 [***] Agreement means the license agreement existing between Bioeq and [***] dated as of [***] and attached to this Agreement as Annex 1. + +1.27 Gross Margin means Net Sales for the sale of any Licensed Product less (a) [***] the supply price paid by Licensee or its Affiliates to Bioeq for the supply of such Licensed Product under the Manufacturing and Supply Agreement (including any Sales Tax thereon paid by Licensee to Bioeq and not refunded back to Licensee in accordance with Section 8.1) [***], (b) Damages, and (c) Qualifying IP Clearance Litigation Costs. Gross Margin will be calculated on a Licensed Product-by-Licensed Product and calendar quarter-by-calendar quarter basis in accordance with Section 7.3.3. + +1.28 Improvement means any Invention developed, conceived or reduced to practice by or on behalf of either Party in relation to any Licensed Product during the term of this Agreement, but for clarity excluding any New Products. + +1.29 Indemnified Party shall have the meaning ascribed to it in Section 13.3(a). + +1.30 Indemnifying Party shall have the meaning ascribed to it in Section 13.3(a). + +1.31 Infringement Claim shall have the meaning ascribed to it in Section 9.4.2. + +1.32 Insolvency Event means: + +1.32.1 In relation to Licensee: (a) the making by it of a general assignment for the benefit of creditors; (b) the commencement by it of any voluntary petition in bankruptcy or suffering by it of the filing of an involuntary petition of its creditors; (c) the suffering by it of the appointment of a receiver to take possession of all, or substantially all, of its assets; (d) the suffering by it of the attachment or other judicial seizure of all, or substantially all, of its assets; (e) the admission by it in writing of its inability to pay its debts as they come due; or (f) the making by it of an offer of settlement, extension or composition to its creditors generally. + +1.32.2 In relation to Bioeq: (a) its over-indebtedness (Überschuldung), (b) its inability to make payments as and when they fall due (Zahlungsunfähigkeit), (c) it ceasing to make payments on account of debts as and when they fall due (Zahlungseinstellung), (d) the commencement of negotiations with its creditors with a view to rescheduling its indebtedness, (e) the initiation by Bioeq of any proceedings for bankruptcy (Konkurs), the postponement of bankruptcy (Konkursaufschub) or the grant of a composition moratorium (Nachlassstundung), (f) the opening of proceedings for bankruptcy, the postponement of bankruptcy or the grant of a composition moratorium with respect to Bioeq upon request of a Third Party (g) the sequestration (Arrestierung), attachment or seizure of, or the appointment of a receiver or administrator with respect to, all or substantially all of its assets or (f) the occurrence of any event which is similar in its effect to (a) through (f) under any Applicable Laws. + +1.33 Intellectual Property Rights means, with respect to any technology, (a) all Patent Rights which claim or cover such technology, and (b) all other existing and future intellectual property rights (but not any Know-How) relating to such technology, including all legally protected trade secrets, copyrights and other intellectual property rights of any kind, but excluding any Trademark. + +1.34 In-Licensed Licensed Patents means all Licensed Patents which are exclusively in‑licensed by Bioeq, including those Patent Rights exclusively in-licensed by Bioeq from [***] pursuant to the [***] Agreement ([***]-Licensed Patents). + +Source: COHERUS BIOSCIENCES, INC., 10-K, 2/27/2020 + + + + + +Confidential Execution Version 1.35 Invention means any invention, technology, improvement, change, modification or enhancement developed, conceived or reduced to practice by or on behalf of either Party during the term of this Agreement. + +1.36 Know-How means all technical, scientific and other information, inventions, discoveries, trade secrets, knowledge, technology, means, methods, processes, practices, formulae, instructions, skills, techniques, procedures, expressed ideas, technical assistance, designs, drawings, assembly procedures, computer programs, apparatuses, specifications, Development information, results, non-clinical, clinical, safety, process and Manufacturing and quality control data and information (including trial designs and protocols), registration dossiers and assay and biological methodology, in each case, solely to the extent confidential and proprietary and in written, electronic or any other form now known or hereafter developed. + +1.37 Launch Readiness means with respect to a Licensed Product, the date on which all of the following requirements are fulfilled: (a) Regulatory Approval for that Licensed Product (i.e., either a Vial Product or a PFS Product) has been obtained in the Territory and (b) the Launch Order (as defined in Annex 2) of that Licensed Product have been released and made available for delivery by Bioeq (unless later rejected for nonconformity) by the agreed upon date of First Delivery (as defined in Annex 2) [***] + +1.38 Licensed Patents means all Patent Rights Controlled by Bioeq during the term of this Agreement that, but for the license granted by Bioeq to Licensee pursuant to Section 2.1 hereunder, would be infringed or misappropriated by Licensee's use, sale, offering for sale or import of the Licensed Products in the Territory in the Field. The Licensed Patents existing as of the Effective Date are listed in Schedule 1.38. + +1.39 Licensed Product means the finished dosage forms (including final packaging) of the biosimilars containing Ranibizumab which have been Developed and/or are being Developed by Bioeq to each of the Existing Reference Products ([***]). For clarity, Licensed Products include without limitation Vial Products and PFS Products, and shall extend to any New Products to the extent this Agreement is amended in accordance with Section 3.4 + +1.40 Licensed Technology means all Intellectual Property Rights and Know-How Controlled by Bioeq during the term of this Agreement that, but for the license granted by Bioeq to Licensee pursuant to Section 2.1 hereunder, would be infringed or misappropriated by Licensee's use, sale, offering for sale or import of the Licensed Products in the Territory in the Field. For clarity, the Licensed Technology includes the Licensed Patents. + +1.41 Licensee Cure Period shall have the meaning ascribed to it in Section 15.2.2. + +1.42 [***] shall [***] + +1.43 [***] means [***] + +1.44 [***] means [***] the company engaged by [***] and/or Bioeq for the Development of the Manufacturing process relating to the Licensed Products and related activities. + +1.45 Losses shall have the meaning ascribed to it in Section 13.1. + +1.46 Manufacture or Manufacturing means to process, prepare, make or have made and analyse one or more pharmaceutical products, including the recombinant production of Ranibizumab and the conversion of Ranibizumab into Licensed Products, and all subsequent packaging and labelling, sterilization, quality control and other testing steps. + +Source: COHERUS BIOSCIENCES, INC., 10-K, 2/27/2020 + + + + + +Confidential Execution Version 1.47 Manufacturing and Supply Agreement shall have the meaning assigned to it in Section 5.2. + +1.48 [***] + +1.49 Net Sales means the actual gross amount invoiced by Licensee or its Affiliates for any sale of any Licensed Product to a Third Party (including for clarity a wholesaler or distributor) in a bona fide arm's length transaction, in the Territory in a given period, less the following deductions to the extent actually allowed or specifically allocated to the Licensed Product by the selling party using GAAP (as defined below): + +(a) sales and excise taxes, value added taxes, and duties which fall due and are paid by the purchaser as a direct consequence of such sales and any other governmental charges imposed upon the importation, use or sale of such product, but only to the extent that such taxes and duties are (i) actually included and itemized in the gross amounts invoiced to and specifically paid by the purchaser over and above the usual selling price of such product, (ii) customarily included and itemized in the gross amounts invoiced to and specifically paid by the purchaser over and above the usual selling price of all comparable products in the relevant market and (iii) are not recovered or recoverable; + +(b) Third Party distribution fees and trade, quantity and cash discounts including prompt pay discounts, that are customary in the industry in the Territory and that are allowed on and specifically allocated to the Licensed Product; + +(c) a reasonable accrual for write-offs for bad debts, not to exceed [***] ([***])% of such gross amounts invoiced by Licensee or its Affiliates in a given calendar quarter (which accrual shall be trued up and reconciled in the ordinary course of business); + +(d) allowances or credits to customers on account of rejections, withdrawal, recall (only for the purchase price of such Licensed Product), or returns of Licensed Product or on account of retroactive price reductions, re-procurement charges, price protection and shelf stock adjustments, slotting allowances, allowances, discounts or inventory management fees, to the extent that such allowances, credits or charges are customary in the biosimilar pharmaceutical industry in the United States; affecting such Licensed Product; + +(e) rebates and chargebacks specifically related to such product on an accrual basis, which shall be trued up and reconciled in the ordinary course of business, including those granted to government agencies (i.e. payments made under the "Medicare Part D Coverage Gap Discount Program"); and + +(f) freight and insurance costs, if they are included in the selling price for the Licensed Product invoiced to Third Parties, to the extent that Licensee or an Affiliate is responsible for payment of such charges in the Territory; + +provided, however, where any such deduction (or similar adjustment to Net Sales) is based on sales of a bundled set of products in which a Licensed Product is included, the discount (or similar adjustment to Net Sales) shall be allocated to such Licensed Product on a pro rata basis based upon the sales value (i.e., the unit average selling price of a bundled set of products in which the Licensed Product is included multiplied by the unit volume of such Licensed Product within the bundled set of products) of such Licensed Product relative to the sales value contributed by the other constituent products in the bundled set, with respect to such sale. Net Sales are to be ascertained from books and records maintained by or on behalf of Licensee in accordance with generally accepted accounting principles, as consistently applied by it with respect to sales of all its drug products (GAAP). + +Source: COHERUS BIOSCIENCES, INC., 10-K, 2/27/2020 + + + + + +Confidential Execution Version 1.50 New Product means any finished dosage form of a biosimilar containing Ranibizumab to a Reference Product which is not an Existing Reference Product and which may in the future become approved (e.g. Reference Products of dosage strengths and presentations which are different from the dosage strengths and presentations comprising the Existing Reference Products) and for which the performance of clinical trials to obtain a Regulatory Approval is required. + +1.51 Patent Rights means any and all right, title, and interest in (a) issued patents, patent applications, and future patents issued from any such patent applications; (b) future patents issued from a patent application filed in any country worldwide which claims priority from a patent or patent application of (a); and (c) reissues, confirmations, renewals, extensions, counterparts, divisions, continuations, continuations-in part, supplemental protection certificates or utility models based on any patent or patent application of (a) or (b). + +1.52 Parties shall have the meaning ascribed to it in the introductory paragraph above. + +1.53 Paying Party shall have the meaning ascribed to it in Section 8.2. + +1.54 Payment Receiving Party shall have the meaning ascribed to it in Section 8.2. + +1.55 PFS Product means Licensed Product in the form of prefilled syringes. + +1.56 [***] means [***] + +1.57 [***] shall [***] + +1.58 Qualifying IP Clearance Litigation Costs means all documented out-of-pocket costs and expenses incurred by Licensee and its Affiliates in connection with activities undertaken and controlled by Licensee and its Affiliates in accordance with Section 9.4 [***] but excluding any and all Damages; provided further that the first [***] Euros (€[***]) of such costs and expenses paid or incurred by Licensee and its Affiliates in connection with activities undertaken under Section 9.4.1 and/or activities undertaken with respect to the Defense of an Infringement Claim initiated by the Reference Product sponsor pursuant to the BPCIA shall not be considered Qualifying IP Clearance Litigation Costs and shall instead be borne solely by Licensee. + +1.59 Ranibizumab means the recombinantly produced ranibizumab drug substance. + +1.60 Receiving Party shall have the meaning ascribed to it in Section 11.1. + +1.61 Reference Product means any biologic drug products of the innovator in the Territory, whether currently existing or hereinafter Developed, containing Ranibizumab drug substance and sold under the trademark Lucentis®, including: (a) single use vial for intravitreal injection containing [***] ml, (b) single use vial for intravitreal injection containing [***] ml, (c) prefilled syringe for intravitreal injection containing [***] ml, and (d) prefilled syringe for intravitreal injection containing [***] ((a)-(d) collectively, the Existing Reference Products). + +1.62 Regulatory Approval means, with respect to any country or jurisdiction, the authorizations, approvals or registrations of the competent Regulatory Authorities necessary for the Commercialization of a pharmaceutical product in such country or jurisdiction. For the avoidance of doubt, Regulatory Approval shall include a provisional approval provided and as long as it grants the right to Commercialize a pharmaceutical product in such country or jurisdiction. + +Source: COHERUS BIOSCIENCES, INC., 10-K, 2/27/2020 + + + + + +Confidential Execution Version 1.63 Regulatory Authority means any national, supra-national, regional, state or local agency, department, bureau, commission, council or other governmental entity having jurisdiction over the manufacture, market approval, sale, distribution, packaging or use of drug product, including Licensed Products. For clarity, the FDA shall be considered a Regulatory Authority in the Territory. + +1.64 Remedial Action means any recall, corrective action or other regulatory action with respect to the Licensed Products taken by virtue of Applicable Law. + +1.65 Repayment Amount shall have the meaning ascribed to it in Section 8.3. + +1.66 Sales Tax means any turnover, consumption, sales, use, goods and services tax, value added tax, import sales tax or similar tax (excluding, for the avoidance of doubt, any capital gains, income or similar tax). + +1.67 Saving shall have the meaning ascribed to it in Section 8.3. + +1.68 [***] shall [***] + +1.69 Territory shall mean the United States of America, including its territories and protectorates. + +1.70 Third Party shall mean any entity or person other than Bioeq or Licensee or their respective Affiliates. + +1.71 Third Party Claim shall have the meaning ascribed to it in Section 13.3(c). + +1.72 Trademark means any trademark, trade name, trade dress or domain name or any application to any of the above. + +1.73 Vial Product means Licensed Product in the form of single use vials. + +1.74 Interpretation. In this Agreement, unless the context otherwise requires: + +(a) headings do not affect the interpretation of this Agreement; the singular shall include the plural and vice versa; and references to one gender include all genders; + +(b) references to EUR or € are references to the lawful currency from time to time in the Eurozone; + +(c) words such as "herein," "hereof" and "hereunder" refer to this Agreement as a whole and not merely to a subdivision in which such words appear; + +(d) any phrase introduced by the terms "including", "include", "in particular" or any similar expression shall be construed as illustrative and shall not limit the sense of the words preceding those terms; + +(e) except as otherwise expressly provided in this Agreement, any express reference to an enactment (which includes any legislation in any jurisdiction) includes references to (i) that enactment as amended, consolidated or re-enacted by or under any other enactment before or after the date of this Agreement; (ii) any enactment which that enactment re-enacts (with or without modification); and (iii) any subordinate legislation (including regulations) made (before or after the date of this Agreement) under that enactment, as amended, consolidated or re-enacted as described in (i) or (ii) above; and + +Source: COHERUS BIOSCIENCES, INC., 10-K, 2/27/2020 + + + + + +Confidential Execution Version (f) the Annexes and Schedules comprise annexes and schedules to this Agreement and form part of this Agreement. Unless noted otherwise, capitalized terms used but not defined in the Annexes and Schedules have the meanings ascribed to such terms in this Agreement. + +2.LICENSE GRANT + +2.1 Technology License. + +2.1.1 Exclusive License Grant. Subject to the provisions of this Agreement, Bioeq hereby grants to Licensee an exclusive (even as to Bioeq), milestone- and royalty-bearing, non-transferable license (including the right to grant sublicenses only to the extent permitted by Section 2.1.2) under the Licensed Technology (including the Licensed Patents) to use, sell, have sold, import, have imported or otherwise Commercialize the Licensed Products in the Field in the Territory. + +2.1.2 Sublicensing to Affiliates Only. Licensee shall be entitled to grant sublicenses under its license pursuant to Section 2.1 to Affiliates only, provided that any sublicense granted by Licensee under this Section 2.1.2 shall be made through a written agreement in the English language and shall be consistent with the terms of this Agreement. Licensee shall promptly inform Bioeq in writing of any sublicenses granted hereunder and, upon Bioeq's request, shall make a copy of the relevant sublicense agreement available to Bioeq. Licensee may redact the [***] terms and conditions of such sublicense agreement in such copy. Licensee shall monitor compliance with and enforce any sublicense agreements against its sublicensees, and shall be liable for the operations, acts and omissions of any sublicensee as if such operations, acts or omissions were carried out by Licensee itself. For clarity, the Parties acknowledge and agree that Licensee shall be entitled to engage Third Party distributors and/or wholesalers in connection with the Commercialization of the Licensed Products in the Field in the Territory, and that such engagement of Third Party distributors and/or wholesalers is permitted under this Agreement and such arrangements shall not be considered sublicenses for which this Section 2.1.2 applies. + +2.2 [***] + +2.3 No Further Rights. Except as expressly provided in Sections 2.1 and 2.2, and except as set forth in Annex 2 and the Manufacturing and Supply Agreement, Bioeq will not be deemed to have granted to Licensee (by implication, estoppel or otherwise) any right, title, license or other interest in or with respect to any Patent Rights, Know-How, Trademark or other Intellectual Property Rights Controlled by Bioeq. In particular, the license granted pursuant to Section 2.1 does not include the right of Licensee to Develop or Manufacture any Licensed Product (provided that for clarity Licensee shall have the limited right to Manufacture the Licensed Product as set forth in Annex 2 and the Manufacturing and Supply Agreement [***]. + +3.DEVELOPMENT + +3.1 Development Rights and Obligations. Subject to the terms and conditions of this Agreement, Bioeq shall be solely responsible for the Development of Licensed Products and shall bear all costs and expenses relating thereto. + +3.2 Diligence Obligations. Bioeq shall use Commercially Reasonable Efforts to complete the ongoing Development of the Licensed Products in the Field in the Territory until receipt of Regulatory Approval for the Licensed Products in the Field in the Territory in accordance with and as set forth in a Development and Manufacturing plan (the Development & Manufacturing Plan). The initial Development & Manufacturing Plan is attached to this Agreement as Schedule 3.2. + +3.3 Information. + +Source: COHERUS BIOSCIENCES, INC., 10-K, 2/27/2020 + + + + + +Confidential Execution Version 3.3.1 [***] within [***] ([***]) [***] days following the end of each calendar quarter, (i) Bioeq [***] shall provide a written report to the Development and Manufacturing Committee setting forth in reasonable detail the status of its then-current Development activities in relation to the Licensed Products in the Field in the Territory and (ii) the Parties, through the Development and Manufacturing Committee, shall review and update the Development & Manufacturing Plan for Bioeq's planned Development activities for the Vial Products in the Field in the Territory. + +3.3.2 [***], Bioeq shall conduct the activities set forth in subsections (i) and (ii) of Section 3.3.1 with respect to the Licensed Products but only as and to the extent agreed upon by the Development and Manufacturing Committee. + +3.3.3 In addition to the above in Section 3.3.1 and Section 3.3.2, Bioeq [***] shall inform the Development and Manufacturing Committee without undue delay of any material Development results or activities proposed to be undertaken with respect to any Licensed Product including those that may (i) [***] or (ii) [***], and shall respond to the other Party's reasonable questions or requests for information relating thereto. + +3.4 New Products. During the term of this Agreement, neither Party shall, and shall not permit its Affiliates to, nor grant any rights to any Third Party to, directly or indirectly, Commercialize, or Develop any New Product for Commercialization in the Territory, except as permitted in accordance with this Section 3.4. If Bioeq wishes to Develop a New Product for Commercialization in the Territory, it shall notify Licensee thereof in writing. Upon such notification, the Parties shall discuss in good faith whether and on what terms such New Product shall he Developed be Bioeq under this Agreement and become part of the Licensed Products licensed to Licensee in the Territory hereunder. If the Parties agree that such New Product shall be Developed and become a Licensed Product under this Agreement, the Parties shall amend this Agreement to reflect their agreement in relation to such New Product (including the Parties' respective share of the Development costs for the Development of such New Product), such New Product shall become part of the Licensed Products, and the restrictions in this Section 3.4 shall cease to apply to such New Product. + +3.5 [***] + +4.REGULATORY ACTIVITIES + +4.1 Regulatory Filings. Subject to the terms and conditions of this Agreement, including Sections 3.5 and 4.4 herein, Bioeq shall be solely responsible for all regulatory activities necessary to obtain Regulatory Approval of the Licensed Products in the Field in the Territory, including filing Biologics License Applications for the Licensed Products in the Field in the Territory, and shall bear all costs and expenses relating thereto. + +4.1.1 First BLA for a Licensed Product. Within [***] ([***]) [***] following the Effective Date, Bioeq shall make available to Licensee the complete draft of the Biologics License Application that Bioeq has prepared and intends to file for the first Licensed Product with the FDA. Licensee shall use Commercially Reasonable Efforts to review such draft without delay and to notify Bioeq in writing of any concerns it may identify in relation to such draft within [***] ([***]) days of such draft being made available to Licensee by Bioeq. Subsequently, Licensee may notify Bioeq in writing of any concerns that it identifies in relation to such draft promptly after such identification. For clarity, nothing in this Section 4.1.1 shall restrict Bioeq's right to file the first Biologics License Application for a Licensed Product in the Field in the Territory at its sole discretion. + +Source: COHERUS BIOSCIENCES, INC., 10-K, 2/27/2020 + + + + + +Confidential Execution Version 4.2 Diligence Obligations. Bioeq shall use Commercially Reasonable Efforts to obtain Regulatory Approval for the Licensed Products in the Field in the Territory in accordance with and as set forth in the Development & Manufacturing Plan. + +4.3 Coordination of the Parties. Each Party shall reasonably coordinate its regulatory activities relating to the Licensed Products ([***]) with the other Party to the extent such activities relate to the Commercialization of the Licensed Products ([***]) in the Field in the Territory and shall keep the other Party reasonably informed about any material regulatory developments or activities proposed to be conducted with respect to the Licensed Products ([***]), including those (a) [***] or (b) [***] provided, however, that such coordination is [***] Without limiting the foregoing: + +4.3.1 Without limiting or modifying Section 4.1.1, each Party shall provide a copy of all Biologics License Applications and all other substantive written correspondence planned to be filed with or submitted to Regulatory Authorities for the Licensed Product ([***]) in the Field in the Territory (collectively, Material Regulatory Submissions) at reasonably in advance of the planned submission date therefor. The other Party shall have the right to review and comment on all such Material Regulatory Submissions and the submitting or filing Party shall take all of the other Party's comments received within a reasonable time period after the other Party receives such copy of such Material Regulatory Submission under good faith consideration. Additionally, each Party shall provide a copy of all written correspondence or feedback received from Regulatory Authorities in the Territory relevant to the Development or Commercialization of the Licensed Products ([***]) to the other Party promptly after receipt thereof, and the Parties shall discuss in good faith the impact of such information on, and potential changes to, the activities contemplated hereunder. + +4.3.2 Additionally, Bioeq will promptly, and in any event within [***] ([***]) days of receipt, forward to Licensee a copy of any communications received from Regulatory Authorities outside of the Territory in relation to the Licensed Products which would [***] impact the Development, the receipt or maintenance of Regulatory Approval for, or the Commercialization of the Licensed Products in the Field in the Territory, and the Parties shall discuss in good faith the impact of such information on, and potential changes to, the activities contemplated hereunder. + +4.4 Ownership and Transfer of Biologics License Application Approvals in the Territory. The Biologics License Applications for each Licensed Product in the Field in the Territory shall initially be filed and owned by Bioeq. Prior to the First Commercial Sale of any Licensed Product in the Territory, Bioeq shall transfer or cause to be transferred the applicable Regulatory Approvals and Biologics License Applications for such Licensed Product to Licensee, including by preparing and submitting a transfer letter notifying the FDA of the transfer of the applicable Regulatory Approvals and Biologics License Applications for such Licensed Product to Licensee. Following such transfer, Licensee shall have the sole right and shall use Commercially Reasonable Efforts to maintain such Regulatory Approvals for the Licensed Product in the Field in the Territory at Licensee's expense (subject to the remainder of this Section 4.4), and shall have the sole right to communicate and correspond with Regulatory Authorities in the Territory in connection therewith, in each case, in consultation with Bioeq. Licensee shall provide Bioeq with copies of any substantive submissions to any Regulatory Authority without undue delay. Upon request by Licensee, Bioeq shall, and shall use Commercially Reasonable Efforts to cause its Affiliates (including [***]), CMOs, licensors, and other relevant contractors (including, for the avoidance of doubt, [***] and [***],) to provide Licensee with copies of all relevant data and information (i) requested by Regulatory Authorities in the Territory for the Licensed Product in a timely fashion or (ii) which are required to be filed or submitted with such Regulatory Authorities [***] (e.g. [***]), in each case of (i) and (ii), in a timely fashion to allow Licensee to comply with relevant deadlines and Applicable Law. Such assistance as described in the preceding sentence shall be provided [***]. Additionally, upon request by Bioeq, Licensee shall without undue delay (a) [***] and (b) apply to Regulatory Authorities in the Territory for changes in + +Source: COHERUS BIOSCIENCES, INC., 10-K, 2/27/2020 + + + + + +Confidential Execution Version relation to the Manufacturing of such Licensed Product, in each case (a) and (b), based on the [***]. Bioeq shall, and shall use Commercially Reasonable Efforts to cause its Affiliates (including [***]), CMOs, licensors, and other relevant contractors (including, for the avoidance of doubt, [***], [***], and [***]) to provide Licensee with copies of all relevant data and information to support such applications. Such assistance as described in the preceding sentence shall be provided [***] + +4.5 Regulatory Meetings. + +4.5.1 Prior to the transfer of Biologics License Applications and Regulatory Approvals for the Licensed Products in the Territory pursuant to Section 4.4, Licensee shall have the right to attend meetings with Regulatory Authorities concerning Licensed Products in the Field in the Territory at its own costs. Without limiting the foregoing, [***] + +4.5.2 After transfer of Regulatory Approvals for the Licensed Products in the Field in the Territory pursuant to Section 4.4, (i) Bioeq shall have the right to attend meetings with Regulatory Authorities concerning Licensed Products ([***]) in the Fields in the Territory at its own costs and [***] and (ii) upon written request by Licensee, Bioeq shall be obliged to, and shall use Commercially Reasonable Efforts to cause its Affiliates and their employees, CMOs, licensors, and other relevant contractors, representatives and agents (including, for the avoidance of doubt, [***], [***], and [***]) to attend meetings with Regulatory Authorities concerning Licensed Products in the Field in the Territory upon Licensee's costs. + +4.6 Pharmacovigilance. At least [***] ([***]) [***] prior to the First Commercial Sale for any Licensed Product ([***]), the Parties shall define and finalize the actions that the Parties shall employ with respect to such Licensed Product ([***]) to protect patients and promote their well‑being in a written pharmacovigilance agreement (Pharmacovigilance Agreement), with Bioeq as the global safety database holder. These responsibilities set forth in the Pharmacovigilance Agreement shall include mutually acceptable guidelines and procedures for the receipt, investigation, recordation, communication and exchange (as between the Parties) of adverse event reports and any other information concerning the safety of the Licensed Products ([***]). Such guidelines and procedures shall be in accordance with, and enable the Parties to fulfil, local and national regulatory reporting obligations under Applicable Law and regulations. Each Party hereby agrees to comply with its respective obligations under such Pharmacovigilance Agreement and to cause its Affiliates to comply with such obligations. Bioeq will maintain its global safety databases pursuant to its own policies and as necessary to comply with Applicable Law governing adverse experiences. + +4.7 Product Inserts and Labeling; Promotional Materials. Following Regulatory Approval for a Licensed Product ([***]) in the Field in the Territory, Licensee shall be responsible for the text and regulatory compliance of all package labels, product inserts and other labeling used in connection with such Licensed Product ([***]) in the Territory, as well as for the promotional materials, if any, for use in connection with each of the Licensed Products ([***]) in the Territory; provided that any communication with or materials to be provided to a Regulatory Authority in the Territory with respect to a label for a Licensed Product ([***]) shall be subject to [***] + +5.MANUFACTURING AND SUPPLY + +5.1 Manufacturing. Subject to the terms and conditions of this Agreement (including Section 5.3 and Annex 2) and the Manufacturing and Supply Agreement, Bioeq shall have the sole responsibility for the Manufacturing and supply of the Licensed Products to Licensee for Commercialization in the Field in the Territory. + +Source: COHERUS BIOSCIENCES, INC., 10-K, 2/27/2020 + + + + + +Confidential Execution Version 5.2 Manufacturing and Supply Agreement. Within [***] ([***]) [***] following the Effective Date, the Parties shall negotiate in good faith and execute a written manufacturing and supply agreement (the Manufacturing and Supply Agreement) to govern the Manufacturing and supply of the Licensed Products ([***]) from Bioeq (or a CMO selected by Bioeq) to Licensee on the basis of the term sheet attached hereto as Annex 2; The terms of the Manufacturing and Supply Agreement shall be consistent with the terms set forth on Annex 2. Prior to the execution of the Manufacturing and Supply Agreement, the terms and conditions set forth on Annex 2 and Section 3 shall govern the rights and obligations of the Parties in relation to the Manufacture and supply of any Licensed Products. Following the execution of such Manufacturing and Supply Agreement, the terms and conditions of Annex 2 shall be superseded by the Manufacturing and Supply Agreement, and all rights and obligations of the Parties in relation to the Manufacture and supply of any Licensed Products shall be governed by such Manufacturing and Supply Agreement and Section 3. + +5.3 [***] + +6.COMMERCIALIZATION + +6.1 General. Subject to the terms and conditions of this Agreement, Licensee shall have the sole right and obligation to conduct the Commercialization of the Licensed Products in the Field in the Territory, including the sole right to conduct the following activities: (a) developing and executing a commercial launch and pre-launch plan; (b) set-up of distribution network in the Territory, negotiation of wholesaler contracts and negotiations with buyer groups (including group purchasing organizations) and key accounts; (c) negotiating with public and private health insurance companies and governmental authorities regarding the price and reimbursement status of the Licensed Products and obtaining and maintaining pricing and reimbursement approvals; (d) marketing, medical affairs, and promotion (including by entertaining a dedicated and sufficiently qualified sales staff, providing for appropriate incentive mechanisms for such sales staff, attending relevant conferences, interacting with key opinion leaders, etc.); (e) set-up of hub services including pre-authorization and reimbursement support and co-pay assist programs; (f) booking of sales and performance of related services; (g) handling all aspects of order processing, invoicing and collection, inventory and receivables; (h) providing customer support, including handling medical queries, and performing other related functions; and (i) dealing with any Remedial Actions in relation to the Licensed Products in the Field in the Territory. As between the Parties, Licensee shall be solely responsible for all costs and expenses in connection with the Commercialization of the Licensed Products in the Field in the Territory, unless otherwise agreed in relation to costs for Remedial Actions in the Territory under Annex 2 and/or the Manufacturing and Supply Agreement. + +6.2 Diligence Obligations. Licensee shall use Commercially Reasonable Efforts to Commercialize the Licensed Products in the Field in the Territory. In particular, Licensee commits to: + +(a) use Commercially Reasonable Efforts to Commercialize each Licensed Product promptly following First Commercial Sale of such Licensed Product in the Field in the Territory; + +(b) use Commercially Reasonable Efforts to perform the planned Commercialization activities as set forth in each Commercialization Plan (defined in Section 6.3 below); and + +(c) dedicate the minimum pre-launch and post-launch resources specified in Section B of Schedule 6.2(c) to its Commercialization of the Licensed Products in the Territory in accordance with the Commercialization Plan during each year ([***]) after the First Commercial Sale of any Licensed Product in the Field in the Territory until [***] (Commercialization Commitment Period); provided that if Licensee [***], then the commercialization commitments as set forth in Section B of Schedule 6.2(c) shall continue to apply except that the [***]. For clarity, after the expiration of the Commercialization Commitment Period, Licensee shall have no further obligation under this Section 6.2(c). + +Source: COHERUS BIOSCIENCES, INC., 10-K, 2/27/2020 + + + + + +Confidential Execution Version 6.3 Commercialization Plan & Reports. + +6.3.1 Commercialization Plan. Beginning [***] ([***]) calendar quarters prior to the anticipated First Commercial Sale of a Licensed Product in the Field in the Territory, Licensee shall provide a written plan to the Commercialization Committee for review and approval (the Commercialization Plan) setting forth in reasonable detail the planned Commercialization activities (or preparations for First Commercial Sale, as applicable) in relation to the Licensed Products planned for the four (4) calendar quarters following such quarter. Each Commercialization Plan shall include at least the information as set forth in Schedule 6.3 to this Agreement. Such Commercialization Plan shall be updated, reviewed, and approved by the Commercialization Committee [***] at least on an annual basis. + +6.3.2 Commercialization Reports. Beginning [***] ([***]) calendar quarters prior to the anticipated First Commercial Sale of a Licensed Product in the Field in the Territory, and every calendar quarter thereafter, Licensee shall report to Bioeq (a) the Commercialization activities (or preparations for First Commercial Sale, as applicable) performed in relation to the Licensed Products in the preceding four (4) calendar quarters, (b) the planned Commercialization activities (or preparations for First Commercial Sale, as applicable) in relation to the Licensed Products planned for the four (4) calendar quarters following such quarter, and (c) any significant changes in the market or of the competitive landscape. In addition, Licensee shall promptly respond to Bioeq's reasonable questions or requests for information relating to Licensee's and its Affiliates' Commercialization activities with respect to the Licensed Products in the Field in the Territory, including activities performed to prepare for the First Commercial Sale. + +6.4 First Commercial Sale. Notwithstanding any other provision of this Agreement, Licensee shall [***]. + +6.5 Trademarks. Licensee may, at its sole discretion, elect to use any Trademark which it owns or has exclusive rights to (Licensee-Controlled Trademark) in connection with its Commercialization of the Licensed Products in the Territory (provided that Licensee discusses the use of such Licensee‑Controlled Trademark with Bioeq and takes into account Bioeq's global branding strategy for the Licensed Products). + +7.FINANCIAL PROVISIONS + +7.1 Upfront Payment. In consideration for entering into this Agreement, activities undertaken with respect to organizing and managing of the product supply chain and the grant of the licenses by Bioeq to Licensee hereunder, Licensee shall pay to Bioeq a one-time, non-refundable, non-creditable upfront payment in the amount of EUR [***] (€ [***]), payable as follows: + +7.1.1 EUR five million (€ 5,000,000) within [***] ([***]) days of the Effective Date. + +7.1.2 EUR [***] (€ [***]) within [***] ([***]) days after [***]. + +7.2 Milestone Payments. In addition, in consideration of services performed by Bioeq to achieve the milestone events set forth below, Licensee shall pay to Bioeq the following one-time, non-refundable (except as provided in Section 15.3.6), non- creditable development milestone payments upon the first occurrence of any of the following milestone events; provided, that [***]: + +Milestone Event Payment 1.[***] EUR [***] (€[***]) + +2.[***] EUR [***] (€[***]) + +Source: COHERUS BIOSCIENCES, INC., 10-K, 2/27/2020 + + + + + +Confidential Execution Version Milestone Event Payment 3.[***] EUR[***](€[***]) + +4.[***] EUR [***] + +5.[***] EUR [***] (€[***]) + +6.[***] EUR [***](€[***]) + +7.[***] EUR [***] (€[***]) + +8.[***] EUR [***] (€[***]) + +9.[***] EUR [***] (€[***]) + +10.[***] EUR [***] (€[***]) + +Within [***] ([***]) days of the achievement of any such milestone, Bioeq shall invoice the relevant milestone amount to Licensee and Licensee shall remit payment to Bioeq within [***] ([***]) days upon receipt of Bioeq's invoice relating thereto. For the avoidance of doubt, any milestone payment made hereunder shall only be due once and shall not be due for any second or subsequent occurrence of the same milestone for the same or any other Licensed Product in the Field in the Territory. Additionally, for the avoidance of doubt, (X) [***], (Y) in no event will the total milestone payments to be paid to Bioeq hereunder exceed EUR [***] (€ [***]) ([***]), and (Z) [***]. + +7.3 Royalties on Gross Margins. + +7.3.1 Royalty Rate. In addition, Licensee shall pay to Bioeq the following royalties on Licensee's and its Affiliates' Gross Margins (calculated in accordance with Section 7.3.3) generated through the sale of Licensed Products in the Field in the Territory: + +(a) Prior to [***], Licensee shall pay to Bioeq royalties in the amount of [***] percent ([***]%) on Licensee's and its Affiliates' Gross Margins (calculated in accordance with Section 7.3.3) generated through the sale of Licensed Products in the Field in the Territory, payable on a Licensed Product-by-Licensed Product basis, and subject to Section 7.3.1(c) hereunder. + +(b) Starting [***], Licensee shall pay to Bioeq royalties in the amount of [***] percent ([***]%) on the Licensee's and its Affiliates' Gross Margins generated through the sale of Licensed Products in the Field in the Territory, payable on a Licensed Product‑by‑Licensed Product basis, and subject to Section 7.3.1(c) hereunder. + +(c) To the extent that the Gross Margin achieved for a given Licensed Product in a given calendar quarter is a negative amount, Licensee shall owe no royalty to Bioeq on Net Sales of such Licensed Product in such calendar quarter, and Licensee shall instead be entitled to carry forward such negative amount and deduct such amount (i) first from the calculation of Gross Margin with respect to Net Sales of any other Licensed Products sold in the Territory in such calendar quarter and (ii) if there are no other Licensed Products sold in the Territory in such calendar quarter, in calculating the Gross Margin with respect to Net Sales of such Licensed Product in future calendar quarters as set forth in Section 7.3.3(c) herein. + +7.3.2 Reporting. As of the First Commercial Sale of any Licensed Products in the Field in the Territory, within [***] ([***]) days after the end of each calendar quarter, Licensee shall deliver to Bioeq + +Source: COHERUS BIOSCIENCES, INC., 10-K, 2/27/2020 + + + + + +Confidential Execution Version a written report setting forth in reasonable detail, on a Licensed Product-by-Licensed Product basis, the calculation of (a) the aggregate Net Sales achieved for such Licensed Product in such calendar quarter (including a detailed description of invoiced gross sales prices and all deductions made pursuant to Section 1.49), (b) the aggregate Gross Margins achieved for such Licensed Product in such calendar quarter (including a detailed description of all deductions and calculations made pursuant to Section 7.3.3 in arriving at such Gross Margin calculation), and (c) the calculation of the royalties owing by Licensee to Bioeq pursuant to Section 7.3 for such calendar quarter. Notwithstanding the Parties' confidentiality obligations pursuant to Section 11, Bioeq shall have the right to report Licensee's Net Sales reporting to its licensors on a confidential basis to the extent required under the relevant agreements with such licensors. + +7.3.3 Calculation of Gross Margin from Net Sales. With respect to the calculation of aggregate Gross Margins achieved from the total amount of Net Sales of a Licensed Product in the Territory in a given calendar quarter (the Quarterly Net Sales Amount): + +(a) Licensee shall first deduct from the Quarterly Net Sales Amount [***] an amount equal to the supply price paid by Licensee to Bioeq (pursuant to the Manufacturing and Supply Agreement) for the supply of all such Licensed Product sold in the Territory for such calendar quarter [***]; + +(b) From such amount resulting after the application of Section 7.3.3(a) above, Licensee shall deduct (i) all Damages which have actually been paid by Licensee or its Affiliates to a non-Defendant Third Party, (ii) all Qualifying IP Clearance Litigation Costs which have actually been incurred by Licensee and (iii) [***], in each case of (i) - (iii), as of the end of such calendar quarter and which have not previously been deducted pursuant to this Section 7.3.3 either (a) in a prior calendar quarter or (b) against Net Sales of a different Licensed Product in the Territory in the same calendar quarter, + +(c) From such amount resulting after the application of Section 7.3.3(b) above, Licensee shall deduct all amounts it is entitled to carry forward from prior calendar quarters pursuant to Section 7.3.1(c) hereunder; + +(d) The amount resulting in Section 7.3.3(c) above shall reflect the Gross Margin achieved for such Licensed Product in such calendar quarter to be used for the purposes of calculating the royalty payable under Section 7.3.1. + +7.3.4 Payment Timing. Bioeq shall invoice Licensee for all royalties due per calendar quarter promptly after Bioeq receives Licensee's royalty report for such calendar quarter to be delivered pursuant to Section 7.3.2. All amounts of royalties shown to have accrued by each report provided pursuant to Section 7.3.2 above shall be due and payable within [***] ([***]) days from receipt by Licensee of Bioeq's invoice. + +7.3.5 Records. Licensee shall maintain, and shall ensure that its Affiliates maintain, records, in sufficient detail, which shall be complete and accurate and shall fully and properly reflect all Net Sales and Gross Margins indicated in the quarterly reports described in Section 7.3.2. For each quarterly report, Licensee shall maintain records reflecting the Net Sales and Gross Margins contained in such quarterly report for [***] ([***]) years following the date that such quarterly report is delivered to Bioeq. The provisions of this Section 7.3.5 shall survive the expiration or termination of this Agreement for [***] ([***]) years. + +7.3.6 Audit Rights. Upon reasonable written request of Bioeq, and no more than once during a given calendar year, Licensee shall make all records reasonably necessary to verify the accuracy of its quarterly reports pursuant to Section 7.3.2 available for inspection by an independent auditor of an internationally recognized auditing firm during Licensee's standard business hours. Such audit shall be for the purpose of ensuring Licensee's compliance with its payment obligations hereunder only. Bioeq shall + +Source: COHERUS BIOSCIENCES, INC., 10-K, 2/27/2020 + + + + + +Confidential Execution Version pay all audit expenses, provided, however, that in the event the audit reveals a greater than [***] percent ([***]%) payment shortfall in the amounts owed to Bioeq by Licensee during the relevant period, Licensee shall reimburse all audit expenses to Bioeq. Bioeq shall treat all financial information subject to review under this Section 7.3.6 as confidential, and shall cause its accounting firm to retain all such financial information in confidence under Section 11 below. The provisions of this Section 7.3.6 shall survive the expiration or termination of this Agreement for [***] ([***]) years. + +7.4 Late Payments. To the extent Licensee fails to make full payment to Bioeq hereunder on the due date for payment, without prejudice to any other right or remedy available to Bioeq, Bioeq shall be entitled to charge Licensee interest on such payments at a rate per annum equal to [***] ([***]) percentage points above the then-applicable 3-month EURIBOR rate (regardless of whether such rate is positive, negative, or zero), published at https://www.euribor-rates.eu/. + +7.5 Payment Exchange Rate. All payments to be made by Licensee to Bioeq under this Agreement shall be made in EURO by bank wire transfer without deduction for wire transfer fees in immediately available funds to such bank account designated in writing by Bioeq from time to time. In the event that any moneys which are part of the calculation of the Gross Margins are paid or received by Licensee or its Affiliates in any currency other than EURO, for purposes of calculating royalties payable hereunder, such moneys shall be converted into EURO at the rate of exchange of the European Central Bank published in the a f t e r n o o n o f t h e l a s t b u s i n e s s d a y i n t h e r e s p e c t i v e a c c o u n t i n g p e r i o d , p u b l i s h e d a t https://www.ecb.europa.eu/stats/policy_and_exchange_rates/euro_reference_exchange_rates/ html/eurofxref-graph-usd.en.html. + +7.6 No offset. Except as otherwise expressly permitted pursuant to this Agreement, the Parties shall not have any right to offset or otherwise withhold any amount owing to each other under this Agreement. + +8.TAXATION + +8.1 Sales Tax. All payments under this Agreement are expressed clear and free of all deductions and withholdings in respect of taxes and exclusive of Sales Tax. If and to the extent any Sales Tax is chargeable on any supply contemplated by this Agreement and owed to the competent tax authorities by the Party providing the supply, the Party receiving the supply shall pay an amount equal to such Sales Tax to the Party providing the supply against receipt of a proper invoice. The Party receiving the supply shall provide the Party providing the supply with documents required by Applicable Law in an effort to minimize Sales Tax. If at any time the Party providing the supply receives a refund (or credit or offset in lieu of a refund) of any Sales Taxes so paid by the Party receiving the supply, then the Party providing the supply receiving such refund or utilizing such credit or offset shall promptly pay over the amount of such refund, credit or offset to the Party receiving the supply, it being understood that the Party receiving the supply shall be liable for any subsequent disallowance of such refund, credit or offset. + +8.2 Withholding Taxes. If any deductions or withholdings are required by Applicable Law to be made from any of the amounts payable pursuant to this Agreement, then the payor (the Paying Party) shall pay to the recipient (the Payment Receiving Party) such amount as will, after the deduction or withholding has been made, leave the Payment Receiving Party with the same amount as it would have been entitled to receive in the absence of any such requirement to make a deduction or withholding. The Payment Receiving Party shall provide the Paying Party with documentation required by Applicable Law to minimize withholding on behalf of the Payment Receiving Party. + +8.3 Repayment Amount. To the extent that the Payment Receiving Party subsequently receives and is entitled to retain and utilise a cash-effective credit against or repayment of any of its taxes (any such credit referred to as a Saving) in respect of such additional amount to be paid by the Paying Party + +Source: COHERUS BIOSCIENCES, INC., 10-K, 2/27/2020 + + + + + +Confidential Execution Version under clause 8.2 or the payment to which such additional amount relates, the Payment Receiving Party shall pay within [***] ([***]) [***] of obtaining the Saving, pay an amount (the Repayment Amount) to the Paying Party which the Payment Receiving Party reasonably determines shall leave the Payment Receiving Party (after that Repayment Amount) in the same after-tax position as it would have been in but for its utilisation of the Saving. + +9.INTELLECTUAL PROPERTY + +9.1 Ownership. Each Party shall own or Control, and shall continue to own or Control all Intellectual Property Rights, Trademarks and Know-How owned or Controlled by such Party as of the Effective Date of this Agreement, subject to the licenses and other rights granted hereunder. With respect to the ownership of Inventions (including Improvements): + +9.1.1 As between the Parties, Bioeq shall own all Inventions (including Improvements) developed, conceived or reduced to practice during the term of this Agreement solely by or on behalf of Bioeq (such Inventions, Bioeq Inventions, and such Improvements, Bioeq Improvements), and all Intellectual Property Rights and Know-How therein. + +9.1.2 As between the Parties, Licensee shall own all Inventions (including Improvements) developed, conceived or reduced to practice during the term of this Agreement solely by or on behalf of Licensee (such Inventions, Licensee Inventions, and such Improvements, Licensee Improvements), and all Intellectual Property Rights and Know-How therein. + +9.1.3 As between the Parties, the Parties shall jointly own all Inventions (including Improvements) developed, conceived or reduced to practice jointly by or on behalf of both Bioeq and Licensee (such Inventions, Joint Inventions, and such Improvements, Joint Improvements), and all Intellectual Property Rights and Know-How therein. Each Party hereby assigns to the other Party a joint equal and undivided interest in and to all Joint Inventions (including Joint Improvements) to effect such joint ownership of such Joint Inventions (including Joint Improvements). Each Party shall have the right to disclose and exploit the Joint Inventions (and Joint Improvements) without a duty of consent or accounting to the other Party, subject to the terms and conditions of this Agreement and the licenses granted hereunder. For those countries where a specific license is required for a joint owner of a Joint Invention or Joint Improvement to practice such Joint Invention or Joint Improvement, in such country, each Party hereby grants to the other Party a perpetual, irrevocable, non-exclusive, worldwide, royalty-free, fully paid-up license, transferable and sublicensable, under such Party's right, title and interest in and to such Joint Invention or Joint Improvement to freely exploit such Joint Invention or Joint Improvement in such country, subject to the terms and conditions of this Agreement and the licenses granted hereunder. + +Notwithstanding Section 16.2, inventorship of Inventions (including Improvements) shall be determined by application of United States patent laws pertaining to inventorship, and ownership of Inventions (including Improvements) shall be determined by Inventorship. + +9.2 Licenses to Improvements + +9.2.1 Bioeq Improvements. Bioeq shall inform Licensee in writing of any Bioeq Improvements promptly after such Bioeq Improvements are developed or reduced to practice. For clarity, the exclusive license granted to Licensee pursuant to Section 2.1 shall extend to all Intellectual Property Rights and Know-How Controlled by Bioeq and embodied within, or claiming or covering the Bioeq Improvements. + +9.2.2 Licensee Improvements. Licensee shall promptly inform Bioeq in writing of any Licensee Improvements promptly after such Licensee Improvements are developed or reduced to practice. Licensee hereby grants to Bioeq during the term of this Agreement (and, subject to Section 15.3.4, after termination + +Source: COHERUS BIOSCIENCES, INC., 10-K, 2/27/2020 + + + + + +Confidential Execution Version or expiration of this Agreement) a non-exclusive, fully-paid, irrevocable license (including the right to grant sublicenses) under all Intellectual Property Rights and Know-How Controlled by Licensee and embodied within, or claiming or covering the Licensee Improvements, to Develop, Manufacture, sell, import, or otherwise Commercialize Licensed Products outside of the Territory. [***] + +9.2.3 Joint Improvements. The Parties' rights and obligations with respect to Joint Improvements shall be as set forth in Section 9.1.3. + +9.3 Prosecution and Maintenance of Licensed Patents. + +9.3.1 Patent Rights owned by Bioeq. The Parties are aware that Bioeq does not currently own any Patent Rights relating to the Licensed Products in the Field in the Territory. Should Bioeq own any Patent Rights relating to the Licensed Products in the Field in the Territory in the future, the Parties will discuss and agree in good faith appropriate procedures to coordinate the prosecution and maintenance of such Patent Rights among the Parties. + +9.3.2 In-Licensed Licensed Patents. To the extent Bioeq has been granted rights in relation to the prosecution, maintenance or enforcement of any In-Licensed Licensed Patent under the agreement concluded with the relevant Third Party licensor (including, with respect to the [***]-Licensed Patents, the [***] Agreement), Bioeq shall, to the extent permitted under the relevant agreement with the Third Party licensor, (i) [***] inform Licensee on any material developments with respect to the filing, prosecution, maintenance or enforcement of such In-Licensed Licensed Patent in the Territory, including by providing copies of all substantive communications or any other substantive documents and (ii) provide Licensee with [***]. + +9.3.3 Licensee Inventions. For clarity, Licensee shall have the sole right to control the filing, prosecution, and maintenance of Patent Rights claiming or covering the Licensee Inventions (including the Licensee Improvements). + +9.3.4 Joint Inventions. The Parties will discuss and agree in good faith on appropriate procedures to coordinate the prosecution and maintenance of Patent Rights claiming or covering the Joint Inventions (including the Joint Improvements) prior to taking any action to do the same. + +9.4 Patent Dance; Defense against Third Party Infringement Claims. + +9.4.1 BPCIA Proceedings. Notwithstanding the fact that the Parties acknowledge and agree that Bioeq will be the initial holder of the Biologics License Application filed for each Licensed Product in the Territory in Bioeq's own name, as between the Parties, with respect to each Licensed Product, Licensee shall have the sole right and shall use Commercially Reasonable Efforts to control the initiation and participation of Bioeq in the pre-litigation processes of the BPCIA generally set forth in 42 U.S.C. § 262(1), including the process commonly referred to as the "patent dance" and the "notice of commercial marketing" (collectively, the BPCIA Proceedings) with respect to each Licensed Product. Without limiting the foregoing: + +(a) Bioeq will notify Licensee within [***] ([***]) [***] of submitting a Biologics License Application for the Licensed Product in the Territory, and will notify Licensee on the same day that such Biologics License Application is accepted by the FDA. Bioeq shall, upon request from Licensee, provide the Reference Product sponsor with timely confidential access to such Biologics License Application for the Licensed Product as well as certain Licensed Product Manufacturing information as permitted under 42 U.S.C. § 262(l)(l)-(2) (referred to hereafter as Initiating Patent Dance Proceedings). Licensee shall have the right to control the scope of the disclosures of Licensed Product Manufacturing information to the Reference Product sponsor, provided that Licensee will take Bioeq's comments into good faith + +Source: COHERUS BIOSCIENCES, INC., 10-K, 2/27/2020 + + + + + +Confidential Execution Version consideration in connection therewith. For clarity, in no event will Bioeq Initiate Patent Dance Proceedings unless directed to do the same by Licensee, and, upon the request of Licensee, will negotiate with the Reference Product sponsor whether to utilize a different mechanism for information exchange other than that specified in 42 U.S.C. §261(1)(1). + +(b) After Initiating Patent Dance Proceedings, Bioeq will fully cooperate with Licensee in connection with "Paragraph 3" information exchange and "Paragraph 5" negotiation and resolution proceedings with the Reference Product sponsor pursuant to 42 U.S.C. §261(l)(3)-(5), including by keeping Licensee fully informed with respect to, and providing Licensee a copy of, all communications received from the Reference Product sponsor/its designee on the same day as receipt thereof. Licensee shall have final decision-making authority with respect to all communications and negotiations with the Reference Product sponsor in connection therewith, including [***], provided that Licensee will take Bioeq's comments into good faith consideration in connection therewith. For clarity, Licensee shall have the sole right to direct and control any negotiations regarding securing a license or other rights to Intellectual Property Rights, Know-How or Trademarks owned or controlled by the Reference Product sponsor during the course of and in connection with the BPCIA Proceedings. + +(c) Licensee, at its sole discretion, shall control the timing of providing notice of commercial marketing to the Reference Product sponsor under 42 U.S.C. §262(1)(8)(B), and shall have final decision-making authority with respect to all communications and negotiations with the Reference Product sponsor in connection therewith. Bioeq shall fully cooperate with Licensee in connection therewith and shall communicate and negotiate with the Reference Product sponsor solely as directed by Licensee. + +(d) Bioeq shall, and shall use Commercially Reasonable Efforts to cause its Affiliates (including [***]), CMOs, licensors, and other relevant contractors (including, for the avoidance of doubt, [***] and [***]) to fully cooperate with Licensee's requests and to be available for consultation in connection with the BPCIA Proceedings. Licensee shall have the right to select, approve and direct the primary outside counsel to be used by Bioeq in connection with the BPCIA Proceedings, and will be solely responsible for the costs of engaging such outside counsel for such purposes; provided that Bioeq shall have the right, at its sole cost and expense, to engage and consult secondary outside counsel in connection with such activities ([***]). + +(e) The support provided by Bioeq and its Affiliates (including [***]) under this Section 9.4.1 shall be provided free of charge to Licensee, except that Licensee shall reimburse [***] for their [***] costs incurred in connection with supporting the BPCIA Proceedings. + +(f) The costs of any support provided by Bioeq's CMOs, licensors, and other relevant contractors (including [***] and [***]) under this Section 9.4.1 shall be borne by Licensee and shall constitute Qualifying IP Clearance Litigation Costs. + +9.4.2 Defense of Infringement Claims. Additionally, and without limiting Section 9.4.1, each Party shall promptly notify, in writing, the other Party upon learning of any notice, allegation, suit, or other proceeding against either Party, or any of their respective Affiliates, subcontractors, suppliers, licensors, licensees or customers, of infringement, misappropriation or misuse of any Third Party Intellectual Property Rights or Know-How as a result of the actual or planned Commercialization of any Licensed Product in the Field in the Territory or the actual or planned Manufacturing of such Licensed Product for Commercialization in the Field in the Territory, including any infringement claim brought under the BPCIA (an Infringement Claim). As between the Parties, Licensee shall have the primary right and use Commercially Reasonable Efforts to control the defense against any such Infringement Claim (irrespective of whether such Infringement Claim was brought against Licensee, Bioeq or any of their respective Affiliates, subcontractors, suppliers, licensors, licensees or customers (collectively referred to as Defendants)), including directing all aspects, stages, motions and proceedings of litigation (including + +Source: COHERUS BIOSCIENCES, INC., 10-K, 2/27/2020 + + + + + +Confidential Execution Version motions or proceedings under the BPCIA) as well as bringing any counter-claims against the Infringement Claim, as well as electing to settle such Infringement Claim (subject to Section 9.4.2(h)) (collectively Defend or Defense). The Parties shall cooperate in relation to any such Defense as follows: + +(a) As between the Parties, Licensee shall have the sole right, and at its sole cost and expense, to select the primary outside counsel to jointly represent the Defendant(s) named in such Infringement Claim and to direct and control the Defense thereof ("Primary Outside Defense Counsel"). If Licensee is not a named Defendant in such Infringement Claim, Licensee may, at its sole discretion, join as a named Defendant in such Infringement Claim (to the extent permitted by Applicable Law). + +(b) Prior to undertaking any action of Defense, Licensee shall notify Bioeq in writing and shall, upon Bioeq's request, and in connection with Primary Outside Defense Counsel, disclose to, and discuss with, Bioeq in good faith (i) the [***], (ii) [***] and (iii) [***]. + +(c) Licensee shall give due consideration to Bioeq's comments with respect to items discussed between the Parties pursuant to this Section 9.4.2, but shall have the final decision-making authority on all aspects relating to the Defense of such Infringement Claim (including with respect to directing Primary Outside Defense Counsel with respect to actions taken in connection with the Defense). + +(d) Licensee shall, through Primary Outside Defense Counsel, keep Bioeq reasonably informed of all material developments in connection with any Defense of such Infringement Claim, including by providing Bioeq with copies of draft and filed filings, motions, pleadings and other material submissions and communications (including oral communications) with the relevant judicial authority relating to such Defense of such Infringement Claim, sufficiently in advance, where reasonably possible, for Bioeq to comment on such Defense of such Infringement Claim. Licensee shall give due consideration to Bioeq's comments. + +(e) Upon Licensee's request, Bioeq shall fully cooperate with Licensee in any such Defense, including in connection with the discussions between the Parties as set forth in Section 9.4.2(b), and, if requested by Licensee, by being joined as a party or allowing Licensee to be joined as a party (to the extent permitted by Applicable Law) to the relevant Infringement Claim. Without limiting the foregoing, Bioeq shall, and shall use Commercially Reasonable Efforts to cause its Affiliates and their employees, CMOs, licensors, and other relevant contractors, representatives and agents (including, for the avoidance of doubt, [***], [***], and [***]) to be available and cooperate fully with Licensee in such discussions, including by making relevant witnesses, documents and information available to Licensee and Primary Outside Defense Counsel in connection with the Defense of such Infringement Claim. + +(f) The support provided by Bioeq and its Affiliates (including [***]) under this Section 9.4.2 shall be free of charge to Licensee, except that Licensee shall reimburse [***] for their [***] costs incurred in connection with supporting the Defense of any Infringement Claim. + +(g) The costs of any support provided by Bioeq's CMOs, licensors, and other relevant contractors (including [***] and [***]) under this Section 9.4.2 shall be borne by Licensee and shall constitute Qualifying IP Clearance Litigation Costs. + +(h) Licensee shall not enter into a settlement without [***] and in any such settlement Licensee shall always take into consideration the interest of Bioeq. + +(i) Any recoveries obtained upon the final judgement or settlement of any Infringement Claim shall first be used to reimburse Licensee for its costs incurred in connection therewith. Any remaining recoveries shall be regarded as Gross Margin. + +Source: COHERUS BIOSCIENCES, INC., 10-K, 2/27/2020 + + + + + +Confidential Execution Version 9.4.3 Damages. + +(a) All amounts to be paid by the Defendants upon the final judgment or settlement in connection with the Defense of an Infringement Claim, or in securing a license or other rights to Intellectual Property Rights, Know-How, or Trademarks owned or controlled by the Reference Product sponsor during the course of and in connection with the BPCIA Proceedings, including [***] (collectively, Damages) shall be borne by Licensee (or its Affiliate), and [***]. + +(b) Licensee may deduct Damages from the calculation of Gross Margin to be paid pursuant to Section 7.3 on a per calendar quarter basis as set forth in Section 7.3.3. + +9.4.4 Qualifying IP Clearance Litigation Costs. Licensee may deduct Qualifying IP Clearance Litigation Costs from the calculation of Gross Margin to be paid pursuant to Section 7.3 on a per calendar quarter basis as set forth in Section 7.3.3. + +9.4.5 Secondary Bioeq Outside Counsel. Notwithstanding Section 9.4.2 above, Bioeq shall have the right to be represented in any Defense of an Infringement Claim by a secondary outside counsel at its own cost and expense; provided that for clarity Licensee, through Primary Outside Defense Counsel, shall have final decision-making authority with respect to the control of the Defense of such Infringement Claim. + +9.4.6 Notice and Cooperation. Without limiting Bioeq's obligations to cooperate with Licensee as set forth in this Section 9.4, Bioeq shall have the right to notify of and coordinate any Defense of an Infringement Claim with any of its Affiliates, subcontractors, suppliers, licensors or licensees in accordance with the terms of the agreements concluded with any such Affiliates, subcontractors, suppliers, licensors or licensees as they exist of the Effective Date. + +9.5 Enforcement of Licensed Patents. + +9.5.1 In the event that either Party becomes aware of a suspected infringement of any Licensed Patent as a result of the Development, Manufacture, or Commercialization, use, or importation of a Competitive Product in the Territory ("Competitive Infringement"), such Party shall notify the other Party promptly in writing, and following such notification, the Parties shall meet and confer. As between the Parties, and subject always to the terms and conditions of the relevant agreements pursuant to which such In- Licensed Licensed Patents are exclusively licensed to Bioeq (including, with respect to the [***]-Licensed Patents, the [***] Agreement): + +9.5.2 [***] shall have the first right, but not the obligation, to enforce the Licensed Patents against such Competitive Infringement at its own expense, in its own name, and under its own direction and control, including by settling any such action or proceeding. Notwithstanding the preceding sentence, [***] shall not enter into a settlement that imposes a financial obligation upon [***] or which limits any of [***] in any Licensed Patent without [***] prior written consent (such consent not to be unreasonably withheld or delayed), and in any such settlement [***] shall always take into consideration the interest of [***]. + +9.5.3 [***] shall reasonably assist [***] in connection with [***] enforcing the Licensed Patents against such Competitive Infringement if so requested, and shall be named in or join such action or proceeding if required for [***] to bring such action. [***] shall reimburse [***] for its reasonable out-of-pocket costs incurred in connection with such activities, except that [***] shall be responsible for any costs of engaging its own outside legal counsel which [***] has the right to engage in connection with such action or proceeding. + +Source: COHERUS BIOSCIENCES, INC., 10-K, 2/27/2020 + + + + + +Confidential Execution Version 9.5.4 If [***] elects not to exercise its rights under Section 9.5.2 within [***] ([***]) days of first becoming aware of such Competitive Infringement, then [***] shall have the right, but not the obligation, to enforce the Licensed Patents against such Competitive Infringement, and in such case (a) the first sentence of Section 9.5.2 and (b) Section 9.5.3 shall apply mutatis mutandis as if [***] were [***] and [***] were [***]. The Party exercising its enforcement rights under this Section 9.5 shall be referred to as the Enforcing Party. + +9.5.5 With respect to all recoveries obtained in connection with an enforcement action or proceeding undertaken pursuant to this Section 9.5, such recoveries shall first be used to reimburse the Enforcing Party for its costs incurred in connection therewith. Any remaining recoveries shall then be used to reimburse the other Party for its costs incurred in connection therewith. Any remaining recoveries shall (a) if [***] is the Enforcing Party, be retained 100% by [***] or (b) if [***] is the Enforcing Party, [***]. + +9.6 Common Interest Disclosures. With regard to any privileged or confidential information or opinions disclosed pursuant to this Agreement by a Party to the other Party regarding Patent Rights or other intellectual property or technology owned by the disclosing Party or a Third Party, the Parties agree that they may have a common legal interest in determining whether, and to what extent, such Patent Rights and other Intellectual Property Rights or Trademarks may affect any Licensed Product, and a further common legal interest in defending against any actual or prospective Third Party claims based on allegations of misuse or infringement of Patent Rights or other intellectual property rights relating to any Licensed Product. Accordingly, the Parties agree that all such information and materials obtained by the Parties from each other in which they have such a common legal interest may be subject to a separate common interest agreement mutually acceptable to the Parties (and any other parties which may be a party to such separate common interest agreement) that they may enter into with respect to such information and materials, upon the request of either Party. Such separate agreement would provide that: (a) [***]; (b) [***]; and (c) [***]. + +10.COVENANTS RELATING TO THE [***] AGREEMENT + +10.1 [***] Agreement. Licensee acknowledges that it is aware of the terms and conditions of the license granted to Bioeq under the [***] Agreement (to the extent such terms have not be redacted in Annex 1) and accepts and agrees that all obligations of Bioeq under this Agreement shall be subject to the terms and conditions of the [***] Agreement. + +10.2 Representations and Covenants in Relation to the Formycon Agreement. + +10.2.1 Consent of [***]. Bioeq hereby represents and warrants to Licensee that it has, as of the Effective Date, obtained [***]'s written consent to enter into this Agreement (as is required pursuant to the Formycon Agreement), and that a copy of such written consent of [***] has been provided to Licensee. + +10.2.2 Compliance with the Formycon Agreement. Bioeq shall maintain the [***] Agreement in full force and effect, shall not breach the [***] Agreement or the "Services Agreement" or the "Clinical Supply Agreement" (as such terms defined in the [***] Agreement) in any manner or take any other action that could result in [***] having the right to terminate the [***] Agreement and, in the event of any such breach, Bioeq shall use diligent efforts to expeditiously cure Bioeq's breach of the [***] Agreement. Bioeq shall promptly notify Licensee in writing if Bioeq sends or receives any notice of any breach of the [***] Agreement. + +10.2.3 Amendments to the [***] Agreement. Bioeq shall not amend or terminate the [***] Agreement in any manner that would negatively affect the rights and/or obligations of Licensee under this Agreement. + +Source: COHERUS BIOSCIENCES, INC., 10-K, 2/27/2020 + + + + + +Confidential Execution Version 10.2.4 Disputes. Bioeq shall promptly inform Licensee of any dispute under the [***] Agreement which may have a material effect on the Development or Commercialization of the Licensed Products in the Field in the Territory, and either Party shall reasonably cooperate with the other in the settlement of such dispute. + +11.CONFIDENTIALITY + +11.1 Obligation of Confidentiality. As of and after the Effective Date, all Confidential Information disclosed, revealed or otherwise made available to one Party (Receiving Party) by or on behalf of the other Party (Disclosing Party) under, or as a result of, this Agreement is made available to the Receiving Party solely to permit the Receiving Party to exercise its rights, and perform its obligations, under this Agreement. The Receiving Party shall not use any of the Disclosing Party's Confidential Information for any other purpose, and shall not disclose, reveal or otherwise make any of the Disclosing Party's Confidential Information available to any other person, firm, corporation or other entity, without the prior written authorization of the Disclosing Party, except as explicitly stated in this Agreement. An appropriate confidential disclosure agreement must be signed by any Third Party or Affiliate prior to receiving Confidential Information from either Party. + +11.2 Additional Obligations. In furtherance of the Receiving Party's obligations under Section 11.1 hereof, the Receiving Party shall take all appropriate steps and shall implement all appropriate safeguards, to prevent the unauthorized use or disclosure of any of the Disclosing Party's Confidential Information available to any Third Party, without the prior written authorization of the Disclosing Party. Without limiting the generality of this Section 11.2, the Receiving Party may disclose any of the Disclosing Party's Confidential Information without the Disclosing Party's prior written authorization only to those of the Receiving Party's officers, employees, agents, consultants, licensees, potential licensees and financial investors that have need to know the Disclosing Party's Confidential Information, in order for the Receiving Party to exercise its rights and perform its obligations under this Agreement, and only if such officers agents, consultants, licensees, potential licensees and financial investors have executed appropriate non‑disclosure agreements containing substantially similar terms regarding confidentiality, as those set out in this Agreement, or are otherwise bound by obligations of confidentiality effectively prohibiting the unauthorized use of the Disclosing Party's Confidential Information. In particular, Bioeq shall be entitled to disclose a [***] redacted copy of this Agreement to [***] (such redacted copy to be approved in writing by Licensee prior to provision to [***]) in order to obtain [***]'s approval to this Agreement, as required under the [***] Agreement. The Receiving Party shall furnish the Disclosing Party with immediate written notice of any unauthorized use or disclosure of any of the Disclosing Party's Confidential Information and shall take all actions that the Disclosing Party reasonably requests in order to prevent any further unauthorized use or disclosure of the Disclosing Party's Confidential Information. + +11.3 Limitations. The Receiving Party's obligations under Sections 11.1 and 11.2 shall not apply to information that the Receiving Party can prove by written evidence that: + +(a) passes into the public domain, or becomes generally available to the public through no fault of the Receiving Party; + +(b) is disclosed, revealed or otherwise made available to the Receiving Party by a Third Party that is under no obligation of non-disclosure and/or non-use to the Disclosing Party; + +(c) is required to be disclosed under Applicable Laws, rules of a securities exchange or by order of a court or arbitral tribunal; provided, however, that the Receiving Party shall furnish the Disclosing Party with prior written notice of such disclosure requirement as reasonably practicable, and shall use reasonable efforts to assist the Disclosing Party with obtaining confidential treatment with respect to or otherwise minimizing the required disclosure; or + +Source: COHERUS BIOSCIENCES, INC., 10-K, 2/27/2020 + + + + + +Confidential Execution Version (d) is independently developed by the Receiving Party without the use or benefit of Confidential Information of the Disclosing Party as evidenced by contemporaneous written records. + +11.4 Material. Any biological or chemical material which is transferred by or on behalf of a Party or its Affiliates to the other Party or its Affiliates under this Agreement shall be used only for purposes of this Agreement, and shall not be used for any other purpose, [***]. The Party or its Affiliate receiving such material shall keep the material secure and safe from loss damage, theft, misuse and unauthorized access and shall use the material in accordance with all Applicable Laws, regulations and guidelines. + +11.5 Return of Confidential Information. Upon termination of this Agreement for any reason whatsoever, the Receiving Party shall cease all use of and return to the Disclosing Party, or destroy, as the Disclosing Party shall specify in writing promptly upon such expiration or termination, all materials transferred pursuant to Section 11.4 and all copies of all documents and other materials that contain or embody any of the Disclosing Party's Confidential Information, except to the extent that the Receiving Party is required by Applicable Laws to retain such documents, and provided further that each Party may keep copies of all Confidential Information within its ordinary legal archives (including IT back-up systems). Within [***] ([***]) days after the date of expiration or termination of this Agreement, the Receiving Party shall furnish the Disclosing Party with a certificate, duly executed by an officer of the Receiving Party, confirming that the Receiving Party has complied with its obligations under this Section 11.4. + +11.6 Survival. All of the Receiving Party's obligations under Sections 11.1 and 11.2 hereof, with respect to the protection of the Disclosing Party's Confidential Information shall for a period of [***] ([***]) [***] survive the expiration or termination of this Agreement for any reason whatsoever. + +11.7 Public Announcements. Except as may be required by Applicable Laws or rules of a securities exchange, neither Party will originate any publicity, press or news release or other public announcement, written or oral, whether to the public press or otherwise, relating to the terms and conditions of this Agreement (Announcement) without the prior written approval of the other Party, such approval not to be unreasonably withheld. Notwithstanding the foregoing, the Parties agree that neither Party shall be restricted from disclosing in a subsequent Announcement any information which was previously disclosed in a prior Announcement or otherwise previously made publicly available pursuant to this Agreement. + +12.REPRESENTATIONS, WARRANTIES AND COVENANTS + +12.1 Mutual Representations. Each Party hereby represents and warrants to the other Party as of the Effective Date that (a) the person executing this Agreement is authorized to execute this Agreement; and (b) the execution, delivery and performance of this Agreement as well as the licenses granted hereunder do not conflict with any agreement, instrument or understanding, oral or written, to which such Party may be bound. + +12.2 Bioeq Representations, Warranties, and Covenants. Bioeq hereby represents and warrants to Licensee as of the Effective Date and covenants, as applicable, that: + +12.2.1 The [***] Agreement is in full force and effect and, to Bioeq's knowledge, there has been no material breach by either party to the [***] Agreement and there is no circumstance that would entitle [***] to terminate the [***] Agreement. + +12.2.2 Bioeq has the right to grant the licenses and rights it purports to grant pursuant to this Agreement. + +Source: COHERUS BIOSCIENCES, INC., 10-K, 2/27/2020 + + + + + +Confidential Execution Version 12.2.3 Bioeq is not aware of any pending or threatened litigation, nor has it received any written communications from Third Parties alleging that the Licensed Patents existing as of the Effective Date are invalid or unenforceable or that the exploitation of the Licensed Technology in the Field in the Territory will constitute an infringement or misappropriation of any rights of any Third Party. + +12.2.4 To Bioeq's knowledge, neither Bioeq nor its licensors, suppliers, and CMOs (including [***]) has misappropriated any trade secrets of any Third Party in Developing the Licensed Products. + +12.2.5 Bioeq has (and, to its knowledge, its licensors, suppliers and CMOs (including [***]) have) made Commercially Reasonable Efforts to protect information, inventions, and technology related to Licensed Products by designating information as confidential or as a trade secret and by taking reasonable steps to prevent disclosure of such confidential information and trade secrets. + +12.2.6 Bioeq has (and, to its knowledge, its licensors, suppliers and CMOs (including [***]) have) maintained and will maintain (and will Use Commercially Reasonable Efforts to cause its licensors, suppliers and CMOs (including [***]) to maintain) appropriate skilled personnel and facilities to carry out its obligations under this Agreement. + +12.2.7 To Bioeq's knowledge, the information contained within all submissions to, and filings, correspondence, and communications with Regulatory Authorities made by or on behalf of Bioeq or its Affiliates with respect to the Licensed Product is true and accurate in all material aspects and was generated in compliance with Applicable Law, and Bioeq will ensure that the information contained within all submissions to, and filings, correspondence, and communications with Regulatory Authorities to be made by or on behalf of Bioeq or its Affiliates with respect to the Licensed Product will be, to Bioeq's knowledge, true and accurate in all material aspects and will be generated in compliance with Applicable Law. + +12.2.8 Bioeq will not use any employees or other persons performing services on behalf of Bioeq in relation to the Development, Manufacture, or Commercialization of Licensed Products that have been debarred or excluded, or are the subject of debarment or exclusion proceedings; and if Bioeq becomes aware that a person performing on its behalf in relation to the Development, Manufacture, or Commercialization of Licensed Products has been debarred or excluded, or has become the subject of debarment or exclusion proceedings, Bioeq shall promptly notify Licensee and shall prohibit such person from performing such activities on its behalf under this Agreement. + +12.3 Licensee Representations, Warranties and Covenants. Licensee hereby represents and warrants to Bioeq as of the Effective Date and covenants, as applicable, that: + +12.3.1 Licensee has the right to grant the licenses and rights it purports to grant pursuant to this Agreement. + +12.3.2 [***] + +12.3.3 [***] + +12.3.4 [***] + +12.3.5 Licensee will maintain (and will use Commercially Reasonable Efforts to cause its suppliers and CMOs to maintain) appropriate skilled personnel and facilities to carry out its obligations under this Agreement. + +12.3.6 Licensee will ensure that the information contained within all submissions to, and filings, correspondence, and communications with Regulatory Authorities made by or on behalf of Licensee or its + +Source: COHERUS BIOSCIENCES, INC., 10-K, 2/27/2020 + + + + + +Confidential Execution Version Affiliates with respect to the Licensed Product ([***]) will be, to Licensee's knowledge, true and accurate in all material aspects and will be generated in compliance with Applicable Law. + +12.3.7 Licensee will not use any employees or other persons performing services on behalf of Licensee in relation to the Development, Manufacture, or Commercialization of Licensed Products that have been debarred or excluded, or are the subject of debarment or exclusion proceedings; and if Licensee becomes aware that a person performing on its behalf in relation to the Development, Manufacture, or Commercialization of Licensed Products has been debarred or excluded, or has become the subject of debarment or exclusion proceedings, Licensee shall promptly notify Bioeq and shall prohibit such person from performing such activities on its behalf under this Agreement. + +12.4 Disclaimer of Warranties. Except for those representations and warranties set forth in Sections 12.1 and 12.2 of this Agreement, neither Party makes any warranties, written, oral, express or implied, with respect to its performance under this Agreement or the results thereof. In particular, each Party disclaims all other warranties, express or implied, including warranties of merchantability, fitness for a particular purpose and non-infringement. [***] + +13.INDEMNIFICATION AND LIMITATION OF LIABILITY + +13.1 Indemnification by Bioeq. Subject to Section 13.4, Bioeq agrees to indemnify and hold Licensee harmless from and against all claims, suits, actions, proceedings brought by a Third Party (collectively Claims) for damages, loss or liability, costs or expenses (including reasonable attorney's fees, settlement payments or third party royalties) (collectively Losses) to the extent arising out of or related to: + +(a) Bioeq's breach of any representation, warranty, covenant or obligation under this Agreement; or + +(b) Bioeq's negligence, recklessness, or wilful, intentional or criminal wrongdoing; + +except, in each case of (a)-(b) hereunder, to the extent such Losses are due to the events described in Section 13.2(a)-(c) below. + +13.2 Indemnification by Licensee. Subject to Section 13.4 (and notwithstanding any other indemnification obligation assumed by Licensee under this Agreement), Licensee agrees to indemnify and hold Bioeq harmless from and against all Claims for Losses to the extent arising out of or related to: + +(a) Licensee's breach of any representation, warranty, covenant or obligation under this Agreement; + +(b) Licensee's Commercialization of the Licensed Products in the Field in the Territory; or + +(c) Licensee's negligence, recklessness, or wilful, intentional or criminal wrongdoing; + +except, in each case of (a)-(c) hereunder, to the extent such Losses are due to the events described in Section 13.1(a)-(b) above. + +13.3 Indemnification Procedure. With respect to any indemnification obligations of either Party under this Agreement, the following conditions must be met for such indemnification obligations to become applicable: + +(a) The Party requesting the indemnification (Indemnified Party) shall notify the other Party (Indemnifying Party) promptly in writing of any claim which may give rise to an obligation on the part of Indemnifying Party hereunder; + +Source: COHERUS BIOSCIENCES, INC., 10-K, 2/27/2020 + + + + + +Confidential Execution Version (b) The Indemnified Party shall use commercially reasonable efforts to avoid or mitigate any Losses which the Indemnified Party may suffer as a result of the Indemnifying Party's breach or wrongdoing; and + +(c) To the extent Losses are the result of a Third Party claim, suit, action or proceeding (Third Party Claim), (i) the Indemnified Party shall not without the prior consent in writing of the Indemnifying Party make any admission or otherwise do anything, which may prejudice the defense against such a Third Party Claim; (ii) Indemnifying Party shall be allowed to timely undertake the sole control of the defense of any such Third Party Claim, including all negotiations for the settlement, or compromise of such claim or action at its sole expense; and (iii) the Indemnified Party shall at its expense render reasonable assistance, information, co-operation and authority to permit Indemnifying Party to defend such Third Party Claim. + +13.4 Limitation of Liability. Except for a breach of Section 11 ("Confidentiality"), and without limiting a Party's indemnification obligations hereunder, in no event shall either Party be liable to the other Party in any manner for any special, non- compensatory, consequential, indirect, incidental, statutory or punitive damages of any kind, including lost profits and lost revenue, regardless of the form of action, whether in contract, tort, product liability or otherwise, even if informed of or aware of the possibility of any such damages in advance, except to the extent that such limitation of liability is contrary to the Applicable Law or any such special, non-compensatory, consequential, indirect, incidental, statutory or punitive damages have been awarded to a Third Party under a Third Party Claim. + +14.GOVERNANCE + +14.1 Committees. The Parties shall, within [***] ([***]) days following the Effective Date, establish (a) a Development and Manufacturing committee (Development and Manufacturing Committee) and (b) a Commercialization committee ("Commercialization Committee"). The Parties acknowledge and agree that the Development and Manufacturing Committee and the Commercialization Committee shall have no authority to amend or modify the terms and conditions of this Agreement or the Manufacturing and Supply Agreement + +14.2 Development and Manufacturing Committee. + +14.2.1 Composition of the Development and Manufacturing Committee. The Development and Manufacturing Committee shall have a total of at least [***] ([***]) members. At least [***] ([***]) of such members shall be appointed by Licensee, and at least [***] ([***]) of such members shall be appointed by Bioeq. Bioeq shall appoint one (1) of its members as chairman of the Development and Manufacturing Committee. Each Party may appoint substitutes or alternates for its Development and Manufacturing Committee members at any time by written notice to the other Party. + +14.2.2 Responsibilities of the Development and Manufacturing Committee. The Development and Manufacturing Committee shall be responsible for overseeing and reviewing the activities of the Parties under this Agreement with respect to Development (including Manufacturing) activities for the Licensed Products to be conducted by the Parties hereunder. The Development and Manufacturing Committee shall, in particular: + +(a) review and discuss the Development (including Manufacturing) activities of Bioeq to be conducted pursuant to Section 3; + +(b) review and approve each Development & Manufacturing Plan as set forth in Section 3.2; + +(c) approve all Development activities to be conducted by Bioeq which (i) [***] or (ii) [***] (X) [***] (Y) [***]; and + +Source: COHERUS BIOSCIENCES, INC., 10-K, 2/27/2020 + + + + + +Confidential Execution Version (d) review and discuss the regulatory activities to be conducted by the Parties pursuant to Article 4. + +14.2.3 Meetings of the Development and Manufacturing Committee. Until [***] is obtained, meetings of the Development and Manufacturing Committee shall be scheduled at least once per calendar quarter, and additional ad hoc meetings shall be scheduled if reasonably requested by either Party. After [***], meetings of the Development and Manufacturing Committee shall be scheduled as reasonably requested by either Party. All meetings shall be made by video conference, audio conference or in person, as agreed by the Development and Manufacturing members from time to time, provided that at least one (1) Development and Manufacturing Committee meeting per calendar year shall be made in person. All meetings of the Development and Manufacturing Committee shall be held in English language and all documents and reports to be exchanged or discussed in the Development and Manufacturing Committee shall be in the English language. The chairman of the Development and Manufacturing Committee shall prepare minutes of each Development and Manufacturing Committee meeting and submit such minutes to each Development and Manufacturing Committee member with [***] ([***]) days of each Development and Manufacturing Committee meeting for their review and approval. Such meetings of the Development and Manufacturing Committee shall be considered finalized only upon the unanimous consent of all Development and Manufacturing Committee members. Each Party will bear all expenses it incurs in regard to participating in all meetings of the Development and Manufacturing Committee, including all travel and living expenses. + +14.2.4 Decisions of the Development and Manufacturing Committee. Decisions of the Development and Manufacturing Committee for matters within its decision-making purview shall be made by unanimous consent and shall only be valid if at least one (1) Development and Manufacturing Committee member appointed by each Party is present at the relevant Development and Manufacturing Committee meeting. If the Development and Manufacturing Committee cannot agree on any particular topic within its decision-making purview within [***] ([***]) days after it has met and attempted to reach such decision, then either Party may, by written notice to the other, have such issue referred to resolution pursuant to Section 16.3.1 (except that the time-period for discussion by the senior executives of the Parties shall be [***] ([***]) days instead of [***] ([***]) days), and thereafter if such issue has still not been resolved, then [***]. The Parties acknowledge and agree, however, that with respect to [***], the relative rights and obligations of the Parties shall be as set forth in those relevant Sections of the Agreement and the Development and Manufacturing Committee shall serve solely as a forum for review and discussion in connection with such activities and shall have no decision-making authority with respect to such matters. + +14.3 Commercialization Committee. + +14.3.1 Composition of the Commercialization Committee. The Commercialization Committee shall have a total of at least [***] ([***]) members. At least [***] ([***]) of such members shall be appointed by Licensee, and at least [***] ([***]) of such members shall be appointed by Bioeq. Licensee shall appoint one (1) of its members as chairman of the Commercialization Committee. Each Party may appoint substitutes or alternates for its Commercialization Committee members at any time by written notice to the other Party. + +14.3.2 Responsibilities of the Commercialization Committee. The Commercialization Committee shall be responsible for overseeing and reviewing the activities of either Parties under this Agreement with respect to the Commercialization activities for the Licensed Products to be conducted by the Parties hereunder. The Commercialization Committee shall, in particular: + +(a) review and discuss the Commercialization activities (including activities to prepare for the First Commercial Sale, including matters regarding commercial supply of Licensed Product for sale in the + +Source: COHERUS BIOSCIENCES, INC., 10-K, 2/27/2020 + + + + + +Confidential Execution Version Territory pursuant to the Manufacturing and Supply Agreement) of Licensee to be conducted pursuant to Section 6; + +(b) review and approve each Commercialization Plan as set forth in Section 6; and + +(c) approve all Commercialization activities to be conducted by Licensee which [***]. + +14.3.3 Meetings of the Commercialization Committee. Starting [***] ([***]) calendar quarters prior to the anticipated First Commercial Sale of a Licensed Product in the Field in the Territory, meetings of the Commercialization Committee shall be scheduled at least once per calendar quarter, and additional ad hoc meetings shall be scheduled if reasonably requested by either Party. All meetings shall be made by video conference, audio conference or in person, as agreed by the Commercialization members from time to time, provided that at least one (1) Commercialization Committee meeting per calendar year shall be made in person. All meetings of the Commercialization Committee shall be held in English language and all documents and reports to be exchanged or discussed in the Commercialization Committee shall be in the English language. The chairman of the Commercialization Committee shall prepare minutes of each Commercialization Committee meeting and submit such minutes to each Commercialization Committee member with [***] ([***]) days of each Commercialization meeting for their review and approval. Such meetings of the Commercialization Committee shall be considered finalized only upon the unanimous consent of all Commercialization Committee members. Each Party will bear all expenses it incurs in regard to participating in all meetings of the Commercialization Committee, including all travel and living expenses. + +14.3.4 Decisions of the Commercialization Committee. Decisions of the Commercialization Committee for matters within its decision-making purview shall be made by unanimous consent and shall only be valid if at least one (1) Commercialization Committee member appointed by each Party is present at the relevant Development and Manufacturing meeting. If the Commercialization Committee cannot agree on any particular topic within its decision-making purview within [***] ([***]) days after it has met and attempted to reach such decision, then either Party may, by written notice to the other, have such issue referred to resolution pursuant to Section 16.3.1 (except that the time-period for discussion by the senior executives of the Parties shall be [***] ([***]) days instead of [***] ([***]) days), and thereafter if such issue has still not been resolved, then [***]. + +15.TERM AND TERMINATION; NON-SOLICITATION + +15.1 Term. Except as otherwise specified in this Agreement, the Parties' respective rights and obligations under this Agreement shall commence on the Effective Date and shall remain in full force for ten (10) years after the First Commercial Sale of the first Licensed Product, and shall thereafter automatically renew for an unlimited period of time unless otherwise terminated in accordance with Section 15.2. + +15.2 Termination. + +15.2.1 Termination for Breach. Either Party may terminate this Agreement upon material breach of any obligation under this Agreement by the other Party provided that such breach (if curable) is not cured within thirty (30) days following the receipt of written notice thereof by the non-breaching Party. If there is a dispute between the Parties as to whether a material breach has occurred or whether such breach was curable or has been cured by the other Party within the above cure period, notice of termination may only be given after the terminating Party has escalated the issue to the relevant senior executives pursuant to Section 16.3.1 and the senior executives have not been able to solve such dispute within thirty (30) days of such escalation. + +Source: COHERUS BIOSCIENCES, INC., 10-K, 2/27/2020 + + + + + +Confidential Execution Version 15.2.2 Termination by Bioeq for Underperformance. Subject to the second sentence of this Section 15.2.2, Bioeq may notify Licensee of its intent to terminate this Agreement anytime within thirty ([***]) days following the end of any [***] ([***]) month time period starting [***] ([***]) months after the First Commercial Sale of the first [***] Product in the Field in the Territory upon written notice to Licensee, if Licensee, with respect to its sales of Licensed Products in the Field in the Territory, has not achieved an average market share of at least [***] percent ([***]%) of the [***] (such market excluding for clarity in all cases [***]), calculated based on [***] in the Field in the Territory in the [***] ([***]) months prior to the end of such [***] ([***]) month time period (i.e., for example, in months [***] of the [***] after the First Commercial Sale of such [***] Product) (Minimum Market Share Requirement); upon Licensee's receipt of such notice from Bioeq, if Licensee does not achieve the Minimum Market Share Requirement, applied mutatis mutandis, during the subsequent [***] ([***]) months period following its receipt of such notice from Bioeq (Licensee Cure Period), Bioeq may terminate this Agreement upon written notice to Licensee; provided further, that the termination right described in this Section 15.2.2 shall apply only if [***], and provided further that such failure of Licensee to achieve the Minimum Market Share Requirement (i) is not due to any [***] (including [***]); (ii) not due to any [***] Bioeq's right to notify Licensee of its intent to terminate this Agreement in accordance with the first sentence of this Section 15.2.2 shall apply only until [***] ([***]) days after the [***] ([***]) anniversary of the First Commercial Sale of the first [***] Product in the Field in the Territory, after which Bioeq shall have no further rights under this Section 15.2.2. + +15.2.3 Termination by Bioeq for Development or Commercialization of a Competitive Product by Licensee. Bioeq may terminate this Agreement immediately upon written notice to Licensee, if Licensee conducts any clinical development of, markets, sells or distributes any Competitive Product in the Territory, whether directly or indirectly through the intermediary of a Third Party or its Affiliates (Restricted Activities); provided, that in the event that Restricted Activities are being or would be deemed to be conducted by Licensee solely in connection with a Competitor Change of Control, Bioeq may not terminate this Agreement in accordance with this Section 15.2.2 and instead may terminate this Agreement in accordance with Section 15.2.9. + +15.2.4 Termination by Bioeq for challenge of Patent Rights. Bioeq may terminate this Agreement immediately upon written notice to Licensee, if Licensee or any of its Affiliates or sublicensees directly or indirectly challenge the validity or enforceability of, or oppose any extension of or the grant of a supplementary protection certificate with respect to, any Licensed Patent in any legal, court, administrative or other governmental proceeding. + +15.2.5 Termination by Licensee for Convenience. Licensee may terminate this Agreement for convenience upon eighteen (18) months' advance written notice to Bioeq; provided, however, that any such termination for convenience shall not become effective prior to twelve (12) months after the First Commercial Sale of the first Licensed Product. In the event of any such termination for convenience by Licensee, [***] + +15.2.6 Termination by Licensee for Development Delay. + +(a) Licensee may terminate this Agreement immediately upon written notice sent to Bioeq any time between [***] and until the receipt of first Regulatory Approval of any Licensed Product in the Field in the Territory if (a) Bioeq has failed to obtain any Regulatory Approval for any Licensed Product in the Field in the Territory on or prior to [***], and (b) [***]. + +(b) Any time prior to [***], if [***], as reasonably determined based on the relevant facts and circumstances existing at such time, conclude that the first Regulatory Approval for any Licensed Product in the Field in the Territory could not reasonably be expected to be obtained by [***] (such relevant facts and circumstances to include the [***] for [***] in the Territory, the [***], and the [***] (e.g., [***], etc.), + +Source: COHERUS BIOSCIENCES, INC., 10-K, 2/27/2020 + + + + + +Confidential Execution Version Licensee may terminate this Agreement upon written notice to Bioeq. If [***] that the first Regulatory Approval for any Licensed Product in the Field in the Territory could not reasonably be expected to be obtained by [***], within [***] days of [***] notifying [***] in writing of its determination thereof, then the Parties shall negotiate in good faith and use reasonable efforts to settle such disagreement in accordance with Section 16.3.1 for the provided [***] ([***]) day period, provided, however, notwithstanding Section 16.3, either Party may initiate proceedings in relation to such disagreement at any time regardless of the expiration of such [***] ([***]) day period. Any such proceedings shall be finally and exclusively resolved by binding arbitration according to the [***], as applicable on the date of commencement of the arbitration proceedings, by [***] ([***]) [***] appointed mutually by the Parties within [***] ([***]) days of the commencement of arbitration, provided, however, if the Parties are unable to appoint such arbitrator within such [***] ([***]) day period, then the arbitrator shall be appointed by the [***]. The arbitrator shall be someone who has at least [***] ([***]) years of relevant background, experience, and expertise in the biopharmaceutical industry, and specifically as to the subject matter of the dispute to which such arbitrator is to opine on (e.g., [***]. The place of such arbitration shall be [***]. Exclusive language of the arbitration proceedings shall be English. The costs of the arbitration proceeding shall be [***]. The Parties agree that such judgment or award may be enforced in any court of competent jurisdiction. The Parties undertake to keep confidential all awards in their arbitration, together with all materials in the proceedings created for the purpose of the arbitration and all other documents produced by the other Party in the proceedings not otherwise in the public domain, save and to the extent that disclosure may be required by a Party by legal duty, to protect or pursue a legal right or to enforce or challenge an award in legal proceedings before a court or other judicial authority. The Parties shall complete any and all arbitrations subject to this Section 15.2.6 within [***] ([***]) days from the commencement of the arbitration. + +15.2.7 Termination by Licensee for Regulatory Reasons. Licensee may terminate this Agreement immediately upon written notice to Bioeq in the event that Bioeq receives [***], in each case, with respect to the first Biologics License Application for such Licensed Product filed by Bioeq with the FDA in accordance with Section 4.1.1 (Adverse Regulatory Event). Bioeq shall notify Licensee in writing immediately of any such Adverse Regulatory Event which may occur. + +15.2.8 Termination for Insolvency. Either Party may terminate this Agreement immediately if an Insolvency Event occurs (save as part of a bona fide reorganisation not involving insolvency) in respect of the other Party. + +(a) Effect of Bankruptcy. In the event of the rejection of this Agreement by or on behalf of a Party (Bankrupt Party) in the event of an Insolvency Event of such Party, all licenses and rights to licenses granted under or pursuant to this Agreement by the Bankrupt Party to the other Party (Non Bankrupt Party) are, and shall otherwise be deemed to be, for purposes of Section 365(n) of the United States Bankruptcy Code (Bankruptcy Code), licenses of rights to "intellectual property" as defined under Section 101(35 A) of the Bankruptcy Code. The Parties agree that the Non Bankrupt Party, as a licensee of such rights under this Agreement, shall retain and may fully exercise all of its rights and elections under the Bankruptcy Code, and that upon commencement of a bankruptcy proceeding by or against the Bankrupt Party under the Bankruptcy Code, the Non Bankrupt Party shall be entitled to a complete duplicate of, or complete access to (as the Non Bankrupt Party deems appropriate) any such intellectual property and all embodiments of such intellectual property. Such duplicates shall be promptly delivered, and such access shall promptly be provided, to the Non Bankrupt Party (i) upon any such commencement of a bankruptcy proceeding, upon written request therefor by the Non Bankrupt Party, unless the Bankrupt Party elects to continue to perform all of its obligations under this Agreement or (ii) if not delivered under (i) above, upon the rejection of this Agreement by or on behalf of the Bankrupt Party, upon written request therefor by the Non Bankrupt Party. The provisions of this Section 15.2.6(b)(a) are without prejudice to any rights the Non Bankrupt Party may have arising under the Bankruptcy Code or other Applicable Law. + +Source: COHERUS BIOSCIENCES, INC., 10-K, 2/27/2020 + + + + + +Confidential Execution Version 15.2.9 Termination for Competitor Change of Control. Licensee shall notify Bioeq in writing within [***] ([***]) days after entry by Licensee into a definitive agreement which would result in a Competitor Change of Control. During the period between when Licensee enters into a definitive agreement which would result in a Competitor Change of Control and when such definitive agreement is consummated, Licensee shall have the right to divest all such Competitive Products which would be acquired upon the consummation of the transaction giving rise to such Competitor Change of Control. Upon the consummation of such definitive agreement, if Licensee has not then divested all such Competitive Products such that a Competitor Change of Control has occurred, Bioeq may, upon sending written notice to Licensee within sixty (60) days thereafter, terminate this Agreement. + +15.2.10 Effect of Termination of the [***] Agreement. Without limiting Bioeq's obligations under Article 10, in the event that the [***] Agreement is terminated by [***], Bioeq will notify Licensee thereof immediately, and Licensee may terminate this Agreement upon written notice to Bioeq. + +15.2.11 Written Notice. Any termination shall only be valid if made in writing and delivered to the other Party under the address set forth in Section 16.1. + +15.3 Effect of Termination. In case of any termination or expiration of this Agreement, all rights and obligations of the Parties shall cease immediately, unless otherwise indicated in this Section below or elsewhere in this Agreement: + +15.3.1 Sale of Inventory. Licensee shall be permitted, at Bioeq's choice (if this Agreement is terminated by Bioeq pursuant to Sections 15.2.1, 15.2.2, 15.2.3, 15.2.4, 15.2.8 or 15.2.9, or by Licensee pursuant to Section 15.2.5) or at Licensee's choice (if this Agreement is terminated by Licensee pursuant to Sections 15.2.1, 15.2.6, 15.2.7 or 15.2.8), to cither (a) continue selling its and its Affiliates' inventory of Licensed Products existing on the termination effective date in accordance with this Agreement for a maximum period of [***] ([***]) days (in which case all terms and conditions of this Agreement, including Licensee's obligation to report and pay royalties, shall continue to apply to such continued sale) or (b) sell such inventory to Bioeq at the supply price paid by Licensee to Bioeq for such inventory in accordance with the Manufacturing and Supply Agreement. + +15.3.2 Transfer of Biologics License Application Approvals. Licensee shall, within [***] ([***]) days of the effective date of termination of the Agreement at the latest (and at no cost to Bioeq if this Agreement is terminated by Bioeq pursuant to Sections 15.2.1, 15.2.2, 15.2.3, 15.2.4, 15.2.8 or 15.2.9, or by Licensee pursuant to Section 15.2.5, or at Bioeq's cost and expense if this Agreement is terminated by Licensee pursuant to Sections 15.2.1, 15.2.6, 15.2.7 or 15.2.8, as applicable) transfer and assign to Bioeq or its designee all of Licensee's right, title and interest in and to any and all Biologics License Applications and Biologics License Application Approvals controlled by Licensee for the Licensed Products in the Field in the Territory as of the effective date of such termination, including any and all documentation pertaining to such filings and Biologics License Application Approvals (provided that the physical or electronic transfer of files and documentation in connection with such transfer and assignment of rights may occur after such [***] ([***]) day period without being deemed a breach of this Section 15.3.2 by Licensee). In addition, upon Bioeq's request, Licensee shall notify the competent Regulatory Authority of such transfer, supply Bioeq with all documents already prepared by Licensee or its Affiliates for the filing of applications in relation to the Licensed Products with any Regulatory Authority and/or apply for the closing of any such application. Notwithstanding any other rights Bioeq may have under this Agreement or Applicable Law; if Licensee does not transfer and assign to Bioeq or its designee its rights in any Biologics License Applications and Biologics License Application Approvals controlled by Licensee for the Licensed Products in the Field in the Territory within the above [***] ([***]) day time period (provided that the physical or electronic transfer of files and documentation in connection with such transfer and assignment + +Source: COHERUS BIOSCIENCES, INC., 10-K, 2/27/2020 + + + + + +Confidential Execution Version of rights may occur after such [***] ([***]) day period without being deemed a breach of this Section 15.3.2 by Licensee), [***]. + +15.3.3 Co-operation. Licensee shall (at no cost to Bioeq if this Agreement is terminated by Bioeq pursuant to Sections 15.2.1, 15.2.2, 15.2.3, 15.2.4, 15.2.8 or 15.2.9, or by Licensee pursuant to Section 15.2.5, or at Bioeq's cost and expense if this Agreement is terminated by Licensee pursuant to Sections 15.2.1, 15.2.6, 15.2.7 or 15.2.8, as applicable) use Commercially Reasonable Efforts to cooperate with Bioeq or its designee, and provide [***] reasonable assistance and support, to [***] Bioeq or its designee to take over the Commercialization of the Licensed Products in the Field in the Territory [***] following the effective date of such termination, including by (a) using Commercially Reasonable Efforts to provide [***], (b) disclosing and assigning (to the extent permitted under the relevant agreement) to Bioeq Licensee's existing agreements relating solely to the Commercialization of the Licensed Product in the Territory, including with [***], to the extent legally possible ([***]) and (c) transferring Licensed Product- specific marketing materials, including [***]. With respect to any such information, materials or agreements provided to Bioeq pursuant to this Section 15.3.3, Licensee may redact information relating to other products which are not Licensed Products as well as proprietary information of the relevant Third Party from such information, materials, or agreements prior to providing the same to Bioeq. Additionally, to the extent Licensee has agreements relating to the Commercialization of both the Licensed Products and other products in the Territory with wholesalers, distributors, pharmacies, hospitals, health insurances and other relevant parties, upon request from Bioeq, Licensee shall introduce Bioeq to such parties and [***]. + +15.3.4 Licensee Improvements. The license granted by Licensee pursuant to Section 9.2.2 shall be extended to also include the Development, Manufacture, sale, import or other Commercialization of Licensed Products in the Field in the Territory, and, unless this Agreement is terminated by Bioeq pursuant to pursuant to Sections 15.2.1, 15.2.2, 15.2.3, 15.2.4, 15.2.8 or 15.2.9, or by Licensee pursuant to Section 15.2.5 (in [***]), such license shall thereafter be royalty-bearing on Bioeq on Net Sales (applied mutatis mutandis as if Bioeq were Licensee, and additionally applying to sales by sublicensees of Bioeq) by Bioeq, its Affiliates, and its sublicensees of Licensed Products in the Field in the Territory which have [***] Licensee Improvement, at [***]. + +15.3.5 License to Licensee-Controlled Trademark. Solely in the event that this Agreement is terminated by Bioeq pursuant to Sections 15.2.1, 15.2.2, 15.2.3, 15.2.4, 15.2.8 or 15.2.9 or by Licensee pursuant to Section 15.2.5 , Licensee shall grant, and hereby grants to Bioeq an exclusive, royalty-free, fully paid, sublicenseable, license to use the Licensee-Controlled Trademarks which were actually used by Licensee to Commercialize the Licensed Products in the Territory in connection with Bioeq's Commercialization of the Licensed Products in the Territory. If this Agreement is terminated by Licensee pursuant to Sections 15.2.1, 15.2.6, 15.2.7 or 15.2.8, such license shall be royalty bearing on Bioeq at [***]. + +15.3.6 Reimbursement of Milestone Payments. Upon termination by Licensee for development delay pursuant to Section 15.2.6, Bioeq shall refund to Licensee all milestone payments pursuant to Section 7.2 received from Licensee during the term of this Agreement. + +15.3.7 Accrued Payment Claims. Termination of this Agreement for any reason whatsoever shall not relieve Licensee of its obligations to pay all amounts payable to Bioeq which have accrued prior to, but remain unpaid as of, the date of termination hereof, or which accrue thereafter. Upon termination of this Agreement any accrued payment obligations shall become immediately due and payable. + +15.3.8 Survival. Articles 1, 8, 11 (and with respect to Sections 11.1-11.2, in accordance with Section 11.6), and 13 (solely as to Claims for Losses arising during the term of the Agreement), and Sections 7.3.5, 7.3.6, 9.1, 9.2.2 (in accordance with and as modified by Section 15.3.4), 9.2.3, 9.2.4, 9.6, 15.3, 15.4 (as applicable) and 16 of this Agreement shall survive any termination or expiration of this Agreement. + +Source: COHERUS BIOSCIENCES, INC., 10-K, 2/27/2020 + + + + + +Confidential Execution Version 15.4 Non-Solicitation. Each Party agrees that, during the [***] ([***]) [***] period starting from the Effective Date, such Party will not, directly or indirectly, solicit for employment any employee of the other Party or its Affiliates or otherwise induce or attempt to induce such employees to terminate their employment with such other Party or such other Party's Affiliates; provided, however, that general public solicitations and advertisements not directed at employees of the other Party, and the extension of offers to persons who respond to such general solicitations and advertisements, will not be deemed violations of this provision. Upon breach of this non-solicitation obligation set forth in this Section 15.4, [***]. + +16.GENERAL PROVISIONS + +16.1 Notices. Any consent, notice or report required or permitted to be given or made under this Agreement by one of the Parties to the other shall be in writing by certified, overnight mail and addressed to such other Party at its address indicated below, or to such other address as the addressee shall have last furnished in writing to the addressor, and shall be effective upon receipt by the addressee. + +If to Bioeq: Bioeq IP AG [***] + +Attention: [***] + +If to Licensee : Coherus BioSciences, Inc. 333 Twin Dolphin Drive, Suite 600 Redwood City, CA, 94065, USA + +Attention: [***] + +16.2 Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of [***], without regard to the conflicts of law principles thereof, and [***]. + +16.3 Dispute Resolution. + +16.3.1 The Parties shall negotiate in good faith and use reasonable efforts to settle any dispute, controversy or claim arising from or related to this Agreement or the breach thereof. If the Parties cannot resolve such dispute, controversy or claim, either Party may escalate the matter further to the following senior executives of the Parties for final discussion and resolution within [***] ([***]) days: + +For Bioeq: [***] + +For Licensee: Chief [***] + +16.3.2 If the senior executives are not able to resolve the matter in dispute within the above [***] ([***]) [***] period, either Party may initiate proceedings in relation to such matter. Any such proceedings shall be finally resolved by binding arbitration according to the [***], as applicable on the date of commencement of the arbitration proceedings, by three (3) arbitrators appointed as follows: each Party shall select one (1) arbitrator, and the two arbitrators so selected by the Parties shall select the third and final arbitrator. If the arbitrators selected by the Parties are unable or fail to agree upon the third arbitrator within [***] ([***]) [***] after the Parties appoint the two arbitrators, then the [***] shall appoint the President of the Tribunal. All arbitrators selected shall have the requisite background, experience and expertise in the biopharmaceutical industry to assist with resolution of the dispute. Place of arbitration shall be [***]. Exclusive language of the arbitration proceedings shall be English. Each Party shall bear its own costs and + +Source: COHERUS BIOSCIENCES, INC., 10-K, 2/27/2020 + + + + + +Confidential Execution Version expenses and attorneys' fees in connection with such arbitration, and the Parties shall share equally all costs of engaging the three (3) arbitrators and using the [***] to arbitrate such matter (unless the arbitration results in a decision and judgment otherwise). The Parties agree that such judgment or award may be enforced in any court of competent jurisdiction. + +16.3.3 Notwithstanding anything to the contrary, a Party may seek preliminary measures, including a temporary restraining order or a preliminary injunction from any court of competent jurisdiction in order to prevent immediate and irreparable injury, loss, or damage on a provisional basis, pending the decision of the arbitral tribunal on the ultimate merits of any dispute + +16.3.4 The Parties undertake to keep confidential all awards in their arbitration, together with all materials in the proceedings created for the purpose of the arbitration and all other documents produced by the other Party in the proceedings not otherwise in the public domain, save and to the extent that disclosure may be required by a Party by legal duty, to protect or pursue a legal right or to enforce or challenge an award in legal proceedings before a court or other judicial authority. + +16.4 Assignment. Except as otherwise expressly provided under this Agreement, neither Party may assign or otherwise transfer this Agreement or any right or obligation hereunder (whether voluntarily, by operation of law or otherwise), without the prior express written consent of the other Party; except however, that either Party shall be permitted to effect such an assignment or transfer without the consent of the other Party to (a) any of its Affiliates or (b) in connection with a sale of all or substantially all of its assets to which this Agreement relates, whether by merger, acquisition, asset sale, stock purchase, or otherwise, but in any event subject to Bioeq's ability to terminate this Agreement in accordance with Section 15.2.9 (for the avoidance of doubt, such termination right pursuant to Section 15.2.9 shall apply mutatis mutandis in case of assignment of the Agreement to a Competitor in all cases listed under subsection (b) above). Any purported assignment or transfer in violation of this Section 16.4 shall be null and void. + +16.5 Subcontracting. Bioeq shall be entitled to subcontract any of its obligations under this Agreement only with the prior written consent of Licensee, except that such prior written consent of Licensee shall not be required for Bioeq to subcontract to (a) its Affiliates or (b) [***], [***] and [***] and the subcontractors listed in Schedule 16.5, provided that it shall remain liable for the performance of its obligations under this Agreement. Licensee shall be entitled to freely subcontract or delegate any of its rights or obligations under this Agreement to its Affiliates or to Third Parties, provided that (i) all sales of Licensed Products in the Field in the Territory continue to be made by Licensee or its Affiliates (or their wholesalers or distributors) and (ii) Licensee shall remain liable for the performance of its obligations under this Agreement. + +16.6 Construction. This Agreement will be fairly interpreted in accordance with its terms and without any strict construction in favour of or against any Party. The words "include", "includes", and "including", "such as", "for example", or any other words or phrases of enumerative meaning shall be deemed to be followed by the phrase "(but without limitation)". + +16.7 Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be valid and enforceable under Applicable Laws, but if any provision of this Agreement is held to be prohibited by or invalid or unenforceable under Applicable Laws, such provision shall be ineffective only to the extent of such prohibition, invalidity or unenforceability, without invalidating the remainder of such provisions or the remaining provisions of this Agreement, and shall be replaced by a valid and enforceable provisions which comes closest to the commercial intention of the replaced provision. + +16.8 Independent Contractors. Each Party hereby acknowledges that the Parties shall be independent contractors and that the relationship between the Parties shall not constitute a joint venture or + +Source: COHERUS BIOSCIENCES, INC., 10-K, 2/27/2020 + + + + + +Confidential Execution Version agency. Neither Party shall have the authority to make any statements, representations or commitments of any kind, or to take any action, which shall be binding on the other Party, without the prior consent of the other Party to do so. + +16.9 Waiver. The waiver by a Party of any right hereunder, or of any failure to perform or breach by the other Party hereunder, shall not be deemed a waiver of any other right hereunder or of any other breach or failure by the other Party hereunder whether of a similar nature or otherwise. + +16.10 Modification. This Agreement (including the attached Annexes) shall not be modified without the prior written consent of each Party. In the event that the terms of any Annex is inconsistent with the terms of this Agreement, this Agreement shall control, unless otherwise explicitly agreed to in writing by the Parties. + +16.11 Entire Agreement. This Agreement (including the attached Annexes and Schedules) together with the Manufacturing and Supply Agreement and the Pharmacovigilance Agreement described in Section 4.6 contains the entire understanding of the Parties with respect to the subject matter hereof. To the extent of any conflict between the terms and conditions of this Agreement and the terms and conditions of the Manufacturing and Supply Agreement or Pharmacovigilance Agreement, the terms and conditions of this Agreement shall control unless otherwise expressly set forth to the contrary in the Manufacturing and Supply Agreement or Pharmacovigilance Agreement. All other express or implied representations, agreements and understandings with respect to the subject matter hereof, either oral or written, heretofore made, are expressly superseded by this Agreement. + +16.12 Counterparts. This Agreement may be executed in counterparts, all of which together shall constitute one and the same instrument. + +(End of Agreement - Signatures on the following page) + +Source: COHERUS BIOSCIENCES, INC., 10-K, 2/27/2020 + + + + + +Confidential Execution Version IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date. + +Bioeq IP AG + +By: / s / H a n n e s T e i s s l / s / N i c o l a Mikulcik Date: November 02, 2019 + +Name: Hannes Teissl Nicola Mikulcik + +Title: Board Member Board Member + +Coherus BioSciences, Inc. + +By: / s / D e n n i s M . Lanfear Date: November 4, 2019 + +Name: Dennis M. Lanfear + +Title: Chairman & Chief Executive + +Source: COHERUS BIOSCIENCES, INC., 10-K, 2/27/2020 + + + + + +Confidential Execution Version Annex 1 + +[***] Agreement + +Omitted pursuant to Regulation S-K, Item 601(a)(5) + +Source: COHERUS BIOSCIENCES, INC., 10-K, 2/27/2020 + + + + + +Confidential Execution Version Annex 2 + +Term Sheet for Manufacturing Supply Agreement + +Omitted pursuant to Regulation S-K, Item 601(a)(5) + +Source: COHERUS BIOSCIENCES, INC., 10-K, 2/27/2020 + + + + + +Confidential Execution Version Schedule 1.38 + +Licensed Patents + +Omitted pursuant to Regulation S-K, Item 601(a)(5) + +Source: COHERUS BIOSCIENCES, INC., 10-K, 2/27/2020 + + + + + +Confidential Execution Version Schedule 3.2 + +Initial Development & Manufacturing Plan + +Omitted pursuant to Regulation S-K, Item 601(a)(5) + +Source: COHERUS BIOSCIENCES, INC., 10-K, 2/27/2020 + + + + + +Confidential Execution Version Schedule 3.5.1 + +[***] + +Omitted pursuant to Regulation S-K, Item 601(a)(5) + +Source: COHERUS BIOSCIENCES, INC., 10-K, 2/27/2020 + + + + + +Confidential Execution Version Schedule 6.2(c) + +Initial Commercialization Commitments + +Omitted pursuant to Regulation S-K, Item 601(a)(5) + +Source: COHERUS BIOSCIENCES, INC., 10-K, 2/27/2020 + + + + + +Confidential Execution Version Schedule 6.3 + +Contents of Commercialization Plan for Planned Activities + +Omitted pursuant to Regulation S-K, Item 601(a)(5) + +Source: COHERUS BIOSCIENCES, INC., 10-K, 2/27/2020 + + + + + +Confidential Execution Version Schedule 16.5 + +Pre-Approved Subcontractors + +Omitted pursuant to Regulation S-K, Item 601(a)(5) + +48 US-DOCS\112944285.3 + +Source: COHERUS BIOSCIENCES, INC., 10-K, 2/27/2020 \ No newline at end of file diff --git a/full_contract_txt/Columbia Laboratories, (Bermuda) Ltd. - AMEND NO. 2 TO MANUFACTURING AND SUPPLY AGREEMENT.txt b/full_contract_txt/Columbia Laboratories, (Bermuda) Ltd. - AMEND NO. 2 TO MANUFACTURING AND SUPPLY AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..e4ce7fe4714507cc38ec33753f249672fbc08826 --- /dev/null +++ b/full_contract_txt/Columbia Laboratories, (Bermuda) Ltd. - AMEND NO. 2 TO MANUFACTURING AND SUPPLY AGREEMENT.txt @@ -0,0 +1,313 @@ +Exhibit 10.1 CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH "[***]". A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. AMENDMENT NO. 2 TO MANUFACTURING AND SUPPLY AGREEMENT THIS AMENDMENT NO. 2 (this "Amendment") to the Manufacturing and Supply Agreement dated as of December 8, 2009 (as amended by an amendment agreement dated 31 December 2013) (the "Existing Agreement"), by and between Columbia Laboratories, (Bermuda) Ltd., a limited company existing and organised under the laws of Bermuda, having a place of business at Canon's Court, 22 Victoria Street, Hamilton HM12, Bermuda ("Columbia"), and Fleet Laboratories Limited, a limited private company existing and organised under the laws of England, having a place of business at 94 Rickmansworth Road, Watford Herts, WD18 7JJ, United Kingdom ("Fleet") is entered into on 2018 (the "Effective Date"). WHEREAS, Columbia and Fleet entered into the Existing Agreement pursuant to which Fleet has agreed to manufacture and supply to Columbia, and Columbia has agreed to purchase, certain Products; and WHEREAS, Columbia and Fleet wish to amend the Existing Agreement in accordance with the terms of this Amendment. NOW THEREFORE, in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Columbia and Fleet agree as follows: General Capitalised terms used but not defined in this Amendment shall have the same meanings ascribed to such terms in the Existing Agreement. The following amendments to the Existing Agreement shall have effect on and from the Effective Date. + +1. The following definitions shall be added to Section 1 of the Existing Agreement: + +""Ares Agreement" means the supply agreement entered into between Columbia and Ares Trading S.A. (a subsidiary of Merck Serono S.A.) dated 7 January 2018." + +"GDP" means the EU guidelines for current Good Distribution Practice guidelines 2013/C 343/01 as amended." + +2. The definition of "batch" in Section 1 of the Existing Agreement shall be deleted in its entirety and replaced with the following: + +""Batch" means a quantity of [***] kilograms of material (or such other quantity as the Parties may agree in writing from time to time) produced in a process or series of processes that is expected to be homogeneous within specified limits." + +3. The following shall be added to Section 2.1 of the Existing Agreement (Regulatory Requirements) as a new Section 2.1 (d): + +"2.1 (d) Subject to the prior written consent of Columbia (such consent not to be unreasonably withheld, delayed or conditioned), Fleet may subcontract all or part of the activities to be performed by it under this Agreement to any subcontractor provided that the subcontracting of any activities shall not relieve Fleet of, and Fleet shall remain solely liable for, its obligations under this Agreement. Columbia may subcontract all or any part of the activities performed by it under this Agreement to any subcontractor without the consent of Fleet." + +1 + + + + + +CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH "[***]". A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 4. The following new Sections 2.2 (b), 2.2 (c) and 2.2 (d) shall be added to Section 2.2 of the Existing Agreement (Regulatory Requirements): + +"2.2 (b) Compliance with Brazilian Regulatory Authorities Regulations. Fleet hereby warrants that the facilities where the Product is manufactured complies in full with the relevant standards stipulated by the Brazil National Health Surveillance Agency ("ANVISA") and undertakes to ensure the facilities will continue to do so throughout the Term. + +2.2 (c) Compliance with Regulatory Approvals. To the extent required for regulatory purposes, Fleet grants to Columbia the right to refer to, and to grant any purchasers of Columbia's products containing the Product the right to refer to Fleet's batch manufacturing records relating to the Product. Fleet undertakes to notify Columbia and to provide Columbia with specific details of any changes to be made to the batch manufacturing records and any other filings made by Fleet with the Regulatory Authorities to the extent that they relate to the Product. + +2.2 (d) Material Change in Manufacturing Process. Fleet shall provide reasonable notice to Columbia and shall consult with Columbia before Fleet makes any material change in any manufacturing process for the Product." + +5. Section 2.3 (c) of the Existing Agreement (Raw Materials) shall be deleted and replaced by the following: + +2.3 (c) Raw Materials. Fleet shall be responsible for ordering [***] Raw Materials other than [***] and the [***] (which shall be provided by Columbia), as required to support Fleet's obligations under this Agreement. All right, title and interest in and to the Raw Materials provided by Columbia (including but not limited to the [***] and the [***]) shall remain with Columbia at all times. Fleet shall ensure that all Raw Materials are released for use at least [***] prior to their use in manufacturing the Product. Fleet shall maintain sufficient stocks of Raw Materials to meet its manufacturing and supply obligations to, and as set out in any Production Schedule by, Columbia; provided however that Fleet shall have a retest date in accordance with the relevant supplier's written instructions (or where none, Fleet's SOPs, which Fleet shall provide to Columbia upon request) for Raw Materials. Raw Materials shall not be used beyond their expiration date as provided by the Raw Materials supplier. + +(i) [***] costs of Raw Materials shall be included in the Purchase Price. Fleet shall be responsible for [***] of Raw Materials hereunder which Fleet supplies. For the avoidance of doubt, Columbia shall be responsible for all such costs only in respect of [***] and [***] provided by Columbia to Fleet. Fleet shall not use any Raw Materials purchased directly by Columbia except for the manufacture of Product hereunder. Columbia will be responsible for all retesting costs associated with the Raw Materials supplied by Columbia. + +(ii) Fleet shall notify Columbia of any Raw Materials that do not meet the specifications of the Raw Materials, and shall provide Columbia with full details within twenty-four (24) hours of completion of the investigation, but not more than twenty (20) business days from identification of the non-conformity with the specifications. + +2 + + + + + +CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH "[***]". A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 6. A new Section 2.3 (n) shall be inserted into the Existing Agreement as follows: + +"2.3 (n) KPIs. As soon as practicable following the Effective Date the Parties shall agree in good faith key performance indicators the Supplier will agree to achieve when supplying the Products and such key performance indicators will be set out in an amendment agreed by the Parties to this Agreement." + +7. A new Section 3A shall be inserted into the Existing Agreement as follows: + +"3A Machinery and Equipment + +3A.1 Columbia has provided Fleet with the machinery, equipment and materials listed in Exhibit B, which Fleet uses to manufacture Products ("Columbia Equipment"). Any additional machinery, equipment and materials provided by Columbia to Fleet during the Term shall be Columbia Equipment unless otherwise agreed in writing by both Parties. During the Term, Columbia shall review and update Exhibit B in December of each year to include any additional machinery, equipment and materials provided to Fleet. + +3A.2 The Parties confirm that Columbia owns title to all Columbia Equipment and that Columbia shall be regarded as the owner of the Columbia Equipment notwithstanding that the Columbia Equipment shall be retained at Fleet's premises. Fleet shall not do or permit or cause anything to be done whereby Columbia's rights in and title to the Columbia Equipment are or may become prejudiced including, without limitation, by ensuring that Columbia Equipment are clearly marked as the property of Columbia. No item of Columbia Equipment may be moved from Fleet's premises without the prior written consent of Columbia. + +3A.3 Fleet shall not use the Columbia Equipment for any purpose other than supplying Columbia with the Product in accordance with the terms of this Agreement without Columbia's prior written consent. + +3A.4 Fleet will at all times ensure that the Columbia Equipment meets and is operated and maintained in accordance with Applicable Laws and cGMP and GDP. + +3A.5 Fleet shall maintain the Columbia Equipment, the reasonable costs of which shall be agreed by the Parties (acting reasonably) and paid by Columbia, and: + +(a) maintenance shall be carried out to at least the standards adopted in respect of Fleet's other machinery and equipment used by it at its premises and Fleet shall not prioritize the maintenance of its own equipment above that of the Columbia Equipment; + +(b) Fleet shall at all times ensure that it has sufficient trained and competent maintenance personnel available for such maintenance; + +(c) during the Term, on or before 1 January of each year, Fleet shall prepare and deliver to Columbia: + +(i) a maintenance plan setting out the maintenance activities to be performed by Fleet in respect of the Columbia Equipment for the following year; and + +3 + + + + + +CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH "[***]". A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. (ii) a maintenance report confirming that each of the maintenance activities set out in the previous year's maintenance plan have been carried out; + +(d) Columbia shall have the right to request a maintenance report in respect of any of the Columbia Equipment at any time during the Term which Fleet shall provide to Columbia within twenty-eight (28) days; + +(e) Fleet shall inform Columbia of the need for any overhauls, replacements and repairs and shall perform all such overhauls, replacements and repairs as reasonably instructed by Columbia (the reasonable agreed costs of which shall be borne by Columbia); and + +(f) if an overhaul of the Columbia Equipment is required, Fleet shall provide reasonable notice to Columbia and shall manufacture adequate stocks of Product in advance to ensure continuity of supply in accordance with orders placed by Columbia pursuant to the terms of this Agreement. + +3A.6 Fleet shall keep the Columbia Equipment safe and in good working order and shall take all reasonable steps to ensure that the Columbia Equipment does not become contaminated or corroded. + +3A.7 Fleet shall mark each individual unit of the Columbia Equipment in a conspicuous manner to indicate that such machinery and equipment is owned by Columbia. + +3A.8 Fleet shall keep the Columbia Equipment free and clear of any lien, charge or encumbrance and Fleet shall obtain and deliver to Columbia a waiver of any of the foregoing in a form reasonably acceptable to Columbia. + +3A.9 Columbia shall not be liable for any loss or damage due to the negligence or wilful misconduct of Fleet, its Affiliates, employees, contractors or representatives. In the event of any loss or damage of any item of the Columbia Equipment due to the negligence or wilful misconduct (including negligence or intentional misconduct in relation to the operation, inspection or maintenance of the Columbia Equipment) of Fleet, its Affiliates, employees, contractors or representatives, Fleet shall repair or replace such items of Columbia Equipment, at Fleet's sole cost and expense, promptly taking into account the quantities of stock held by Fleet at the time of such loss or damage." + +8. Section 3.1 of the Existing Agreement (Production Schedules) shall be deleted and replaced by the following: + +"3.1 Production Forecasts + +(a) Production Schedule. Each [***], before the [***], during the Term Columbia shall prepare and provide Fleet with a written Production Schedule of its requirements for Product (each, a "Production Schedule") for the following [***]. The amounts set forth for the [***] in each Production Schedule shall constitute a firm purchase order and shall be binding upon Columbia (each a "Purchase Order") unless otherwise agreed in writing by both parties. The amounts set forth for the following [***] shall constitute Columbia's non-binding, good faith estimate of the Product requirements of Columbia for such periods. Fleet shall manufacture, supply and deliver to + +4 + + + + + +CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH "[***]". A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. Columbia all quantities of Product as Columbia orders in accordance with this Section 3.1. All right, title and interest in and to the Product shall remain with Columbia at all times. Fleet shall ensure that it has sufficient experienced production staff available to meet the requirements set out in each Production Schedule and at a minimum, to meet the expected non-binding forecast set out below: + +[***] [***] [***] [***] [***] [***] + +N u m b e r o f batches [***] [***] [***] [***] [***] [***] + +(b) Non-Active Product Orders. From time to time during the Term, Columbia may provide Fleet with a purchase order for a batch of Product that does not contain any active pharmaceutical ingredient provided that such purchase order is received at least ninety (90) days prior to the required delivery date. The batch size for any Product ordered pursuant to this Section 3.1 (b) shall be set out in the relevant purchase order. All provisions of this Agreement that relate to Products shall apply equally to any Products that do not contain any active pharmaceutical ingredient." + +9. Section 3.3 (a) of the Existing Agreement (Delivery) shall be deleted and replaced by the following: + +"3.3 (a) Delivery. All Product supplied under this Agreement shall be delivered EXW Fleet's Watford, UK facility. All risk of loss in the Product shall pass to Columbia upon receipt of the Product at Fleet's facility by the carrier designated by Columbia. The weights, tariffs and tests affixed by Fleet's invoice shall govern unless established to be incorrect. Claims relating to quantity, weight and loss or damage to any Product sold under this Agreement shall be waived by Columbia unless made within [***] of receipt of Product by Columbia." + +10. Section 4.1 of the Existing Agreement (Audits) shall be deleted and replaced by the following: + +"4.1 Audits. Columbia QA, any other person appointed by Columbia, Columbia's customer, and/or any Regulatory Authority may conduct inspections and audits of Fleet's manufacturing facility, Columbia Equipment, quality control laboratories, and other quality systems relating to the manufacture and storage of the Product according to Columbia's reasonable procedures upon reasonable prior written notice, during normal business hours, provided, however, that Columbia QA, any other person appointed by Columbia and/or any Regulatory Authority may conduct a "For Cause" audit during normal business hours upon three (3) business days prior written notice to Fleet. Any such audit undertaken by Columbia QA or any other person appointed by Columbia shall be at Columbia's sole cost and expense. Columbia or any other person appointed by Columbia shall have the right, in connection with any such audit, to inspect and obtain copies of any records or other documents and materials associated with or related to the manufacture of the Product. Fleet shall promptly notify Columbia of any proposed inspections by any governmental authority of the facilities at which Product is manufactured in sufficient time for Columbia to attend such inspection." + +11. Sections 5.1 (Price) and 5.2 (Invoicing) of the Existing Agreement shall be deleted and replaced by the following: + +5 + + + + + +CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH "[***]". A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. "5.1 Price. During the Term, the purchase price for each Batch purchased by Columbia from Fleet in any [***] shall be determined in accordance with Part 1 of Exhibit A and the pricing model set out in Part 2 of Exhibit A attached hereto, as may be amended from time to time in accordance with the provisions of this Section 5.1. The Parties shall agree the applicable purchase price for each [***] in accordance with Part 1 of Exhibit A (as may be amended from time to time in accordance with this Section 5.1) and the production forecasts received by Fleet pursuant to Section 3.1. [***]. Any adjustments as set out in paragraphs (a), (b) and (c) below and any consequent adjustments to the volume discount model set out in Part 1 of Exhibit A and/or the pricing model set out in Part 2 of Exhibit A shall be agreed in writing by both Parties and shall take effect from 1 January the following calendar year. Exhibit A may be amended by the mutual written agreement of both parties as follows: + +(a) the [***] of Exhibit A shall only be amended to reflect the change in rate of the Consumer Price Index as published by the UK Office of National Statistics all item data series D7BT (the "CPI"). By way of example, if on 1 November in a calendar year during the Term, the CPI shows that there has been an increase in prices compared with the same index on 1 November the previous year [***], then [***] in the model as of 1 January in the following year [***] of the CPI increase as recorded on 1 November, [***]. + +(b) the [***] of Exhibit A shall only be amended to reflect [***] of the change in rate of the CPI. By way of example, if on 1 November in a calendar year during the Term, the CPI shows that there has been an increase in prices compared with the same index on 1 November the previous year [***], then [***] in the model as of 1 January in the following year [***] of the CPI increase as recorded on 1 November, i.e. by [***]. + +(c) the [***] of Exhibit A shall only be amended to reflect any [***] changes to the cost of any of the [***] set out in Part 4 of Exhibit A. If at any other time during a calendar year the [***] when compared with [***], Fleet shall have the right to amend the [***] for any future invoices by providing Columbia with at least three (3) months' prior written notice. + +Except as otherwise set out in Section 5.1 (c), the first period during which any adjustment set out in Section 5.1 (a), (b) or (c) above will be calculated shall be [***], with the adjusted costs to be applied to the pricing model in Exhibit A for the calendar year commencing [***]. Fleet shall provide Columbia with access to all books and records necessary to verify any changes to the purchase price. + +5.2 Invoicing. Upon delivery of Product to Columbia, Fleet shall submit invoices therefor to Columbia. Columbia shall pay each invoice in full within [***] after the date of receipt by Columbia of such invoice, which shall be issued no earlier than the date on which the Product is delivered to the carrier by Fleet. All payments shall be made in pounds sterling. In the event that any actual volume of Product purchased by Juniper in any calendar year means that a different purchase price should have applied to such volume of Product purchased in that calendar year (as calculated in accordance with the pricing model set out in Exhibit A), Fleet shall notify Juniper in writing of such pricing differential and shall apply a proportionate credit or debit (as applicable) to any invoices raised for the subsequent calendar year. Upon the expiration or earlier termination of this Agreement, + +6 + + + + + +CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH "[***]". A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. Fleet shall determine the applicable purchase price for that calendar year and shall notify Juniper in writing of any underpayment or overpayment within [***] of expiration or termination (as applicable). In the event of any underpayment by Juniper, Juniper shall pay to Fleet an amount equal to the amount of any such underpayment within [***] of receipt by Juniper of such written notice. In the event of any overpayment by Juniper, Fleet shall pay to Juniper an amount equal to the amount of any overpayment within [***] of receipt by Juniper of such written notice. Fleet shall provide Columbia with access to all books and records necessary to verify any changes to the purchase price and any underpayment or overpayment." + +12. Section 8 of the Existing Agreement (Insurance) shall be deleted and replaced by the following: + +"Fleet and Columbia shall maintain comprehensive general liability insurance, including product liability insurance against claims regarding the manufacture of Product under this Agreement and sufficient cover to meet its liabilities under this Agreement in respect of the Columbia Equipment, with insurers having an AM Best rating within the top 2 categories at the time (at the date of this Agreement known as "superior" or "excellent") or reasonably comparable coverage, in such amounts as it customarily maintains for similar products and activities, but in no event less than [***] per individual claim and [***] in the aggregate. Each party shall maintain such insurance during the Term and thereafter for so long as it customarily maintains insurance for itself for similar products and activities (but in no event less than [***] following termination or expiration)." + +13. Section 10.1 (a) of the Existing Agreement (Fleet's Indemnity Obligations) shall be deleted and replaced by the following: + +"10.1(a) Fleet's Indemnity Obligations. Fleet shall defend, indemnify and hold harmless Columbia, its Affiliates and their respective successors and permitted assigns (and the respective officers, directors, stockholders, partners and employees of each) from and against any and all losses liabilities, claims, actions, proceedings, damages and expenses (including, without limitation, reasonable attorneys' and professional fees and disbursements and expenses of litigation, arbitration or investigation) ("Damages") relating to or arising from (i) any breach by Fleet or its Affiliates of its representations, warranties, covenants, agreements or obligations under this Agreement, including without limitation, the failure of Fleet to timely deliver all Product ordered or the failure of the Product to meet the Fleet Warranty and/or Product Specifications or the failure of Fleet to manufacture or warehouse the Product in accordance with the Product Specifications and Applicable Law (including those relating to cGMP); and (ii) any claims of infringement or misappropriation with respect to the manufacture of the Product, except to the extent such claim of infringement relates to the use of the Intellectual Property; and (iii) any personal injury or property damage to the extent that the injury or damage is the direct result of a failure by Fleet or its Affiliates or subcontractors to manufacture, package, or label the Product in accordance with the Specifications, GMP or Applicable Law." + +14. Section 10.1 (b) of the Existing Agreement (Columbia's Indemnity Obligations) shall be deleted and replaced by the following: + +"10.1 (b) Columbia's Indemnity Obligations. Columbia shall defend, indemnify and hold harmless Fleet and its Affiliates, and their respective successors and permitted assigns (and the respective officers, directors, + +7 + + + + + +CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH "[***]". A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. stockholders, partners and employees of each) from and against any and all Damages arising out of (i) the handling, possession, use, marketing, distribution or sale of any Product and finished pharmaceutical product containing a Product by Columbia or any of its distributors or agents after Fleet's delivery of the Product to Columbia (except to the extent such claims arise out of the circumstances described in Section 10.1(a) or Fleet's negligence or wilful misconduct); (ii) product liability claims, including, wrongful death, resulting from the use of a finished pharmaceutical product containing a Product (except to the extent such claims arise out of the circumstances described in Section 10.1(a) or Fleet's negligence or wilful misconduct); (iii) any breach by Columbia of its representations, warranties, covenants, agreements or obligations under this Agreement (except to the extent any such breach is due to the negligence, breach or wilful misconduct of Fleet); and (iv) any claims of infringement or misappropriation relating to the Intellectual Property." + +15. Sections 11.1 to 11.3 of the Existing Agreement (Confidentiality and Public Disclosure) shall be deleted and replaced by the following: + +"11.1 Confidentiality. Each party will treat as confidential the Confidential Information of the other party and will take all necessary precautions to assure the confidentiality of such Confidential Information. Each party agrees to return to the other party upon the expiration or termination of this Agreement all Confidential Information acquired from such other party, except as to such information it may be required to retain under Applicable Law, and except for one copy of such information to be retained by such party's legal counsel. Neither party shall, during the period of this Agreement nor for five (5) years thereafter, without the other party's express prior written consent, other than as provided under this Agreement, use or disclose any such Confidential Information for any purpose other than to carry out its obligations hereunder. Each Party shall guard such Confidential Information using the same degree of care as it normally uses to guard its own confidential, proprietary information of like importance, but in any event no less than reasonable care. + +11.2 Permitted Disclosures. Notw i ths tand ing the ob l iga t ions o f confidentiality and non-use set out in Section 11.1, a Receiving Party may: + +(a) disclose Confidential Information to a regulatory authority as reasonably necessary to obtain registration in a particular jurisdiction; + +(b) disclose Confidential Information to the extent such disclosure is reasonably necessary to comply with the order of a court or is required to comply with any Applicable Law or other regulation, directive, instruction, direction or rule of any regulatory authority having jurisdiction over any activity under this Agreement, including to the extent such disclosure is required in publicly filed financial statements or other public statements under rules governing a stock exchange on which securities issued by either party may be listed; provided, to the extent possible, such party shall (i) notify the other party of the existence, terms and circumstances surrounding such a requirement; (ii) consult with the other party on the advisability of taking legally available steps to resist or narrow such requirement; (iii) provide the other party with a copy of the proposed text of such statements or disclosure ten (10) business days in advance of the date on which the disclosure is to be made to enable the other party to + +8 + + + + + +CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH "[***]". A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. review and provide comments, unless a shorter review time is agreed; and (iv) exercise its commercially reasonable efforts to obtain an order or other reliable assurance that confidential treatment will be accorded to such portion of the Confidential Information required to be disclosed; + +(c) disclose Confidential Information on a strict need to know basis to such Receiving Party's licensee's, employees, Affiliates, contractors (including clinical researchers), distributors, agents and consultants as such Receiving Party reasonably determines is necessary to receive the benefit of the licenses and rights granted or available to it under this Agreement or to fulfil its obligations pursuant to this Agreement; provided, however, any such person is bound in writing to observe confidentiality provisions at least as strict as those of this Agreement; + +(d) disclose Confidential Information: (i) to its actual or potential investment bankers; (ii) to existing and potential investors in connection with an offering or placement of securities for purposes of obtaining financing for its business and to actual and prospective lenders for the purpose of obtaining financing for its business; and (iii) to a bona fide potential acquirer or merger partner for the purposes of evaluating entering into a merger or acquisition, provided, however, any such persons must be obligated to substantially the same extent as set forth in Section 11.1 to hold in confidence and not make use of such Confidential Information for any purpose other than those permitted by this Agreement; and + +(e) disclose Confidential Information to its legal advisers for the purpose of seeking advice. + +11.3 Public Announcements. Except for such disclosure as is permitted under Section 11.2 or as required by Applicable Law or the requirements of a national securities exchange or another similar regulatory body, no announcement, news release, public statement, publication, or presentation relating to this Agreement, the subject matter hereof or either party's performance hereunder will be made without the other party's prior written approval. + +16. Section 12.1 of the Existing Agreement (Term) shall be deleted and replaced by the following: + +"12.1 Term. Unless terminated earlier pursuant to Section 12.2 below, the initial term of this Agreement shall expire on 31 December 2024 (the "Initial Term") unless the Parties mutually agree in writing any extension to the Initial Term. Upon termination of this Agreement, Fleet agrees to perform its obligations under this Agreement until the earlier of [***]." + +17. Section 12.2 (b) of the Existing Agreement, regarding termination of the Existing Agreement by Columbia, shall be deleted and replaced by the following: + +"12.2 (b) Columbia shall have the right to terminate this Agreement upon [***] notice to Fleet in the event: + +(i) Fleet fails to maintain its authorizations under Applicable law to manufacture the product, including without limitation those from MHRA; + +9 + + + + + +CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH "[***]". A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. (ii) a Change of Control Event with respect to Fleet occurs; + +(iii) Fleet cannot supply product at a Competitive Price; or + +(iv) the Ares Agreement is terminated." + +18. Section 12.3 (b) of the Existing Agreement (Effect of Expiration and Termination) shall be deleted and replaced by the following: + +"12.3 (b) Expiration or termination of this Agreement shall not relieve the parties of any obligation accruing prior to such expiration or termination. The provisions of Sections 1 (Definitions), 3A.2, 3A.3 and 3A.8 (Machinery and Equipment), 4.1 (Audits), 5.2 (Invoicing), 7 (Representations and Warranties), 8 (Insurance), 9 (Adverse Events; Recalls), 10 (Indemnification; Limitation of Liability), 11.1 (Confidentiality and Public Disclosure), 12 (Term and Termination) and 13 (General Provisions) shall survive any expiration or termination of this Agreement." + +19. Section 12.3 (c) of the Existing Agreement (Effect of Expiration and Termination) shall be deleted and replaced by the following: + +"12.3 (c) If Columbia terminates this Agreement under Section 12.2 (b)(ii) or (iii), Columbia shall reimburse Fleet for [***] purchased by Fleet under this Agreement in the period of [***] prior to the date of termination that are only used by Fleet in the manufacture of the Products." + +20. The following new Sections 12.3 (d) and 12.3 (e) shall be added to Section 12.3 of the Existing Agreement (Effect of Expiration and Termination): + +"12.3 (d) If Columbia terminates this Agreement under Section 12.2 (a)(i) in the case of Fleet's breach of this Agreement, under Section 12.2 (a)(ii) in the case of Fleet's insolvency or other financial difficulty under that section, or under Section 12.2 (b) or 12.2 (c), subject to the reimbursement of Fleet's reasonable costs and expenses, Fleet shall provide such assistance as Columbia may reasonably request to Columbia and, if relevant, any third party supplier, to ensure that Columbia (or any of its Affiliates) and, if relevant, any third party supplier has sufficient access to Fleet's facilities and equipment, and to the Columbia Equipment, in order to continue to manufacture the Product. Fleet shall continue to supply the Product under the then current terms and conditions of this Agreement for as long as is necessary to enable the transfer of the manufacture of the Product to Columbia or a third party supplier in accordance with Section 12.3 (e). + +12.3 (e) Fleet shall provide such assistance as Columbia may reasonably request to ensure the orderly transfer of the manufacture of the Product to any alternative manufacturer. If requested by Columbia, Fleet shall transfer to Columbia or the alternative manufacturer all technology and know-how necessary or useful to give Columbia or the alternative manufacturer the capability of manufacturing the Product. Fleet shall communicate such technology to Columbia or the alternative manufacturer promptly, effectively and economically, so that Columbia or the alternative manufacturer can undertake the manufacture of the Product and continue the sale of the Product without interruption. Columbia undertakes to reimburse Fleet for its reasonable costs of providing such assistance and to pay to Fleet an amount for all inventory of Raw Materials and work in progress of Products and part completed Products used to provide such assistance." + +10 + + + + + +CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH "[***]". A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 21. Section 13.1 of the Existing Agreement (Notices) shall be amended such that any notice sent to Columbia under this Agreement shall not be copied to Columbia Laboratories, Inc. at 4 Liberty Square Fourth Floor, Boston, MA 02109 but shall instead be copied to the following address: + +"Juniper Pharmaceuticals UK Limited 8 Orchard Place Nottingham Business Park Nottingham, England NG8 6PX + +Attention: Chief Operating Officer" + +22. Section 13.2 of the Existing Agreement (Assignment) shall be deleted and replaced by the following: + +"13.2 Assignment. Neither party shall, without the prior written consent (not to be unreasonably withheld or delayed) of the other party having been obtained, assign or transfer this Agreement to any person or entity, in whole or in part (and any attempt to do so shall be void), provided that, each party may assign or transfer this Agreement without such consent to any Affiliate or to any successor by merger of such party, or upon a sale or other transfer of all or substantially all of such party's assets or business to which the subject matter of this Agreement pertains, provided that the acquirer of the business confirms to the Supplier in writing its agreement to be bound by all of the terms and conditions of this Agreement and that the assignor shall remain liable for the obligations hereunder. Notwithstanding the foregoing, it shall not be deemed unreasonable for Columbia to withhold consent, to any proposed or attempted assignment (including by merger or sale) by Fleet to a party which is not an Affiliate, if Columbia is not reasonably satisfied that the assignee possesses the management, finances, personnel, capabilities and facilities to perform fully the obligations of Fleet hereunder. All of the terms and provisions of this Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors and permitted assigns." + +23. Section 13.12 of the Existing Agreement (Technical Agreement) shall be deleted and replaced by the following: + +"13.12 Technical Agreement. Columbia and Fleet are parties to a certain technical agreement dated 18 March 2015 (as such agreement may be amended in accordance with its terms from time to time) (the "Technical Agreement"), the terms of which outline the responsibilities of Columbia and Fleet with respect to assuring the quality of the Product. Columbia and Fleet acknowledge and agree that in the event the terms of this Agreement and the Technical Agreement conflict or are inconsistent, the terms of this Agreement shall prevail over the terms of the Technical Agreement; provided however, that to the extent possible, the terms of both the Technical Agreement and this Agreement shall be read and considered to effect the intent of the parties." + +24. The following new Section 13.13 shall be added to Section 13 of the Existing Agreement (General Provisions): + +"13.13 Anti-Bribery. + +(a) The parties agree: + +11 + + + + + +CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH "[***]". A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. (i) to comply with all Applicable Law, statutes and regulations relating to anti- bribery and anti-corruption including but not limited to the U.S. Foreign Corrupt Practices Act, US government health care compliance (HCC) policies, regulations and laws, US Export Administration Act of 1979 (50 App. U.S.C. §2401 et. seq.) and the UK Bribery Act, as amended, and the regulations promulgated thereunder and any applicable similar laws and regulations in any other country) (collectively, the "Relevant Laws"); + +(ii) to have and maintain in place throughout the term of this Agreement their own policies and procedures to ensure compliance with the Relevant Laws and will appropriately enforce those policies and procedures; and + +(iii) that no employee, contractor, supplier, agent, broker, or entity will offer or pay anything of value to a public or private official intending to influence or induce an official act or decision or to obtain an improper advantage. + +(b) A material breach of this Section 13.13 shall be deemed a material breach of this Agreement. In the event of a material breach of this Section 13.13, the party not in breach shall have the right to terminate this Agreement, without any liability to the party in breach, with immediate effect. + +(c) This Agreement is made subject to any restrictions concerning the export of products or technical information from the United Kingdom or other countries which may be imposed upon or related to Fleet or Columbia from time to time. Each party agrees that it shall not export, directly or indirectly, any technical information acquired from the other party under this Agreement or any products using such technical information to a location or in a manner that at the time of export requires an export licence or other governmental approval, without first obtaining the written consent to do so from the appropriate agency or other governmental entity." + +25. All other terms and conditions of the Existing Agreement remain in full force and effect. Except as expressly provided in this Amendment, the Existing Agreement shall remain unmodified and is hereby ratified and affirmed. The execution, delivery, and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power, or remedy of Columbia or Fleet under the Existing Agreement. + +26. This Amendment, together with the Existing Agreement, sets forth the entire agreement and understanding between the Parties as to the subject matter hereof and thereof and merges all prior discussions and negotiations between them, and neither of the parties shall be bound by any conditions, definitions, warranties, understandings or representations with respect to such subject matter other than as expressly provided herein and therein or as duly set forth on or subsequent to the date hereof in writing and signed by a proper and duly authorized officer or representative of the Party to be bound thereby. 27. This Amendment may be signed in counterparts, each and every one of which shall be deemed an original, notwithstanding variations in format or file designation which may result from the electronic transmission, storage and printing of copies of this Amendment from separate computers or printers. Executed signature pages to this Amendment may be + +12 + + + + + +CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH "[***]". A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. delivered by facsimile or a portable document format (PDF) copy (including copy(ies) sent by e-mail) and all such shall be deemed as if actual signature pages had been delivered. 28. This Amendment and and any dispute or claim (including non-contractual disputes or claims) arising out of or in connection with it or its subject matter or formation shall be governed by and construed in accordance with the laws of England. Each Party irrevocably agrees that the English courts shall have sole and exclusive jurisdiction to settle any dispute or claim (including non-contractual disputes or claims) arising out of or in connection with this Amendment or its subject matter or formation. + +IN WITNESS WHEREOF, the parties have duly executed this Amendment as of the Effective Date. + +COLUMBIA LABORATORIES (BERMUDA), LTD. By: /s/ Alicia Secor ____________________________ Name: Alicia Secor_______________________________ Title: Chief Executive Officer_______________________ FLEET LABORATORIES LIMITED By: /s/ Tom Horner______________________________________ Name: Tom Horner_________________________________________ Title: Managing Director____________________________________ + +13 + + + + + +CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH "[***]". A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. Exhibit A Part 1 - Volume adjusted purchase price [***] + +14 + + + + + +CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH "[***]". A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. Part 2 - Pricing Model [***] + +15 + + + + + +CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH "[***]". A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. Exhibit B Columbia Equipment [***] + +16 \ No newline at end of file diff --git a/full_contract_txt/ConformisInc_20191101_10-Q_EX-10.6_11861402_EX-10.6_Development Agreement.txt b/full_contract_txt/ConformisInc_20191101_10-Q_EX-10.6_11861402_EX-10.6_Development Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..40dbfe1d209bc3c18e4b342e0dde3ad0e378ee52 --- /dev/null +++ b/full_contract_txt/ConformisInc_20191101_10-Q_EX-10.6_11861402_EX-10.6_Development Agreement.txt @@ -0,0 +1,129 @@ +Execution Version Certain identified information has been excluded from the exhibit because it is both (i) not material and (ii) would likely cause competitive harm to the Company, if publicly disclosed. Double asterisks denote omissions. DEVELOPMENT AGREEMENT This Development Agreement ("this Agreement") is entered into and effective as of September 30, 2019 ("Effective Date") by and between Howmedica Osteonics Corp., a New Jersey corporation, also known as Stryker Orthopaedics ("Stryker"), and Conformis, Inc., a Delaware corporation having a principal place of business located at 600 Technology Park Drive, Billerica, MA 01821 ("Conformis"). Stryker and Conformis are collectively referred to herein as the "Parties" and individually as a "Party." WHEREAS, the Parties are concurrently entering into an asset purchase agreement for Stryker's purchase of certain Conformis assets concerning Patient-Specific Instrumentation ("Asset Purchase Agreement"), and a License Agreement, a Distribution Agreement and a Quality Agreement, as defined in and attached to the Asset Purchase Agreement (collectively, such agreements are referred to herein as the "Other Agreements"). WHEREAS, Stryker and its Affiliates have developed and commercialized an Off-The-Shelf Knee Implant offered under the trademark Triathlon. WHEREAS, Conformis currently offers Patient-Specific Instrumentation for use with its Patient-Specific Implants, including partial and total knee and hip arthroplasty. WHEREAS, Stryker desires that Conformis develop, in accordance with the R&D Program, certain Patient-Specific Instrumentation to be used with the current version of the Off-The-Shelf Knee Implant offered under the trademark Triathlon (such Patient-Specific Instrumentation as so developed, the "KIB Product"). THEREFORE, in consideration of the mutual representations, warranties and covenants herein and in the Other Agreements constituting good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereby agree as follows: ARTICLE I DEFINITIONS 1.1 Definitions. For purposes of this Agreement, the following terms shall have the following meanings, and to the extent not defined in this section or otherwise in this Agreement, a term shall have the meaning ascribed to it in any of the Other Agreements: Source: CONFORMIS INC, 10-Q, 11/1/2019 + + + +"Acceptance" and "Accept" have the meaning set forth in Article 3.4 of this Agreement. "Acceptance Criteria" has the meaning set forth in the R&D Work Plan. "Acceptance Notification Period" has the meaning set forth in Article 3.3 of this Agreement. "Affiliate" has the meaning set forth in the Asset Purchase Agreement. "Agents" means Third Parties who are acting under the direction or control of a Party. "Applicable Laws" means all applicable federal, state, local and foreign laws, ordinances, rules, regulations, orders, writs, injunctions and decrees of any kind. "Asset Purchase Agreement" has the meaning set forth in the recitals. "Change of Control" has the meaning set forth in the Asset Purchase Agreement. "Claims" has the meaning set forth in Article 7.3(a) of this Agreement. "Confidential Information" has the meaning set forth in the Asset Purchase Agreement. "Conformis Background IP" means any Invention, and all Intellectual Property rights underlying such Invention, that is, as of the Effective Date, owned or licensable by Conformis without causing a breach of, or incurring any obligation to, a third party, in each case to the extent necessary or reasonably useful to design, develop, manufacture, sell or otherwise exploit the KIB Product, and for the avoidance of doubt, excluding the Purchased Assets, Conformis Foreground IP, Stryker Background IP, Improved Stryker Background IP and Improved Conformis Background IP. 2 Source: CONFORMIS INC, 10-Q, 11/1/2019 + + + +"Conformis Foreground IP" means any Invention first developed by Conformis after the Closing Date other than in the performance of the R&D Program, and all Intellectual Property rights underlying such Invention (for the avoidance of doubt, excluding any Intellectual Property rights subsisting prior to the Closing Date or generated in the performance of the R&D Program). For the avoidance of doubt, Conformis Foreground IP shall not include any Inventions using Stryker Confidential Information (which shall not include the Purchased Assets for the purposes of the definition of Conformis Foreground IP) or Stryker Background IP. "Conformis Indemnified Parties" has the meaning set forth in Article 7.3(b) of this Agreement. "Conformis-Prosecuted Joint IP Rights" has the meaning set forth in Article 5.8 of this Agreement. "Court" has the meaning set forth in the Asset Purchase Agreement. "Deliverables" has the meaning set forth under the R&D Work Plan. "Disclosing Party" has the meaning set forth in the Asset Purchase Agreement. "Distribution Agreement" has the meaning set forth in the Asset Purchase Agreement. "Equipment" has the meaning set forth in Article 5.6(a) of this Agreement. "Failure Notice" has the meaning set forth in Article 3.4 of this Agreement. "Finally Rejects" has the meaning set forth in Article 3.4 of this Agreement. "Force Majeure Event" has the meaning set forth in Article 10.4(a) of this Agreement. 3 Source: CONFORMIS INC, 10-Q, 11/1/2019 + + + +"Improved Conformis Background IP" means any Invention to the extent first arising in the performance of the R&D Program, whether or not embodied in the KIB Product, that constitutes an improvement to Conformis Background IP, Conformis Confidential Information (which shall not include any Confidential Information owned or commonly owned by Stryker) or the Purchased Assets, and all Intellectual Property rights underlying such Invention (but expressly excluding all Transferred IP, Conformis Foreground IP, Conformis Background IP and Stryker Background IP, and, for the avoidance of doubt, excluding all Intellectual Property rights subsisting prior to the Closing Date). "Improved Stryker Background IP" means any Invention to the extent first arising in the performance of the R&D Program, whether or not embodied in the KIB Product, that constitutes an improvement to Stryker Background IP or any Stryker Confidential Information (which shall not include the Purchased Assets for the purposes of this definition), and all Intellectual Property rights underlying such Invention (but expressly excluding all Transferred IP, Conformis Foreground IP, Conformis Background IP and Stryker Background IP, and, for the avoidance of doubt, excluding all Intellectual Property rights subsisting prior to the Closing Date). "Insolvency Event" means, with respect to any Party, the occurrence of any one of the following events: (i) an involuntary proceeding is commenced against such Party under any applicable United States bankruptcy, insolvency, reorganization or other similar United States or foreign law now or hereafter in effect, or a proceeding is commenced seeking appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator (or other similar official) for such Party or for all or any substantial part of its property and such proceeding shall not be dismissed within [**] or an order for relief by a court of competent jurisdiction shall be entered in any such proceeding; or (ii) such Party shall commence a voluntary proceeding under any applicable United States or foreign bankruptcy, insolvency, reorganization or other similar law now or hereafter in effect, or shall consent to the entry of an order for relief in an involuntary case under any such law, or shall consent to the appointment of or taking possession by a receiver, liquidator, 4 Source: CONFORMIS INC, 10-Q, 11/1/2019 + + + +assignee, custodian, trustee, sequestrator (or other similar official) of such Party or of all or any substantial part of its property, or shall make an assignment for the benefit of creditors. "Intellectual Property" has the meaning set forth in the Asset Purchase Agreement. "Invention" means any idea, invention, discovery, know-how, data, work of authorship, information, improvement, technology, process, concept or material, whether or not patentable, copyrightable or protectable as a trade secret, and whether or not reduced to practice or memorialized in writing. "Joint CI" has the meaning set forth in the Asset Purchase Agreement. "Joint IP" has the meaning set forth in Article 5.1(c) of this Agreement. "Joint IP Rights" has the meaning set forth in Article 5.8 of this Agreement. "KIB Product" has the meaning set forth in the recitals. "KIB Product IP" means any Invention first arising in the performance of the R&D Program, whether or not embodied in the KIB Product, and all Intellectual Property rights underlying such Invention (but expressly excluding all Transferred IP, Conformis Background IP, Stryker Background IP, Improved Conformis Background IP and Improved Stryker Background IP, and, for the avoidance of doubt, excluding all Intellectual Property rights subsisting prior to the Closing Date). "License Agreement" has the meaning set forth in the Asset Purchase Agreement. "Off-The-Shelf Implant" has the meaning set forth in the Asset Purchase Agreement. 5 Source: CONFORMIS INC, 10-Q, 11/1/2019 + + + +"Off-The-Shelf Knee Implant" has the meaning set forth in the Asset Purchase Agreement. "Other Agreements" has the meaning set forth in the recitals. "Patents" has the meaning set forth in the Asset Purchase Agreement. "Patient-Specific Implants" has the meaning set forth in the Asset Purchase Agreement. "Patient-Specific Instrumentation" has the meaning set forth in the Asset Purchase Agreement. "Person" has the meaning set forth in the Asset Purchase Agreement. "Prior CDA" has the meaning set forth in the Asset Purchase Agreement. "Purchased Assets" has the meaning set forth in the Asset Purchase Agreement. "Receiving Party" has the meaning set forth in the Asset Purchase Agreement. "Redelivery Period" has the meaning set forth in Article 3.4 of this Agreement. "R&D Program" means work performed in the development of the KIB Product under this Agreement pursuant to the R&D Work Plan. "R&D Work Plan" means the research and development plan set forth in Exhibit 1. "Relevant Indemnified Parties" means (a) if Stryker is the indemnified Party, the Stryker Indemnified Parties and (b) if Conformis is the indemnified Party, the Conformis Indemnified Parties. 6 Source: CONFORMIS INC, 10-Q, 11/1/2019 + + + +"Representatives" has the meaning set forth in the Asset Purchase Agreement. "Stryker Background IP" means any Invention, and all Intellectual Property rights underlying such Invention, that is, as of the Effective Date owned or licensable by Stryker without causing a breach of, or incurring any obligation to, a third party, in each case to the extent each such Invention is (a) necessary or reasonably useful to design, develop, manufacture, sell and otherwise exploit the KIB Product and (b) provided to Conformis by or on behalf of Stryker in connection with Conformis' activities under this Agreement, and, for the avoidance of doubt, excluding the Transferred IP, Conformis Background IP, Improved Conformis Background IP and Improved Stryker Background IP. "Stryker Indemnified Parties" has the meaning set forth in Article 7.3(a) of this Agreement. "Stryker-Prosecuted Joint IP Rights" has the meaning set forth in Article 5.8 of this Agreement. "Termination Notice" means a written notice delivered by one Party to the other Party of its election to terminate this Agreement pursuant to Article VIII. "Third Party" has the meaning set forth in the Asset Purchase Agreement. "Trademarks" has the meaning set forth in the Asset Purchase Agreement. "Transferred IP" has the meaning set forth in the Asset Purchase Agreement. "Triathlon" has the meaning set forth in the Asset Purchase Agreement. "Wire Instructions" has the meaning set forth in the Asset Purchase Agreement. 7 Source: CONFORMIS INC, 10-Q, 11/1/2019 + + + +ARTICLE II RESEARCH AND DEVELOPMENT PROGRAM 2.1 R&D Work Plan. The Parties agree to conduct the R&D Program pursuant to the R&D Work Plan and to perform their respective obligations therein. To the extent Conformis' performance under the R&D Program is delayed due to Stryker's delay in performing any of its obligations in accordance with the timelines in the R&D Work Plan, the applicable timelines shall be deemed extended by a period of time corresponding to the length of such portion of the delay attributable to Stryker, on a day-by- day basis. The R&D Work Plan may be amended by mutual written agreement of the Parties from time to time. 2.2 Agents or Third Parties. To the extent working with Agents or other Third Parties is permitted under the R&D Work Plan, should a Party wish to engage an Agent or any other Third Party in connection with the R&D Work Plan or any other work under this Agreement, such Party must obtain in advance a written agreement by such Agent or other Third Party (i) to assign to the Party all Inventions conceived, created or generated by the Agent or other Third Party, and (ii) to maintain all Confidential Information in confidence as set forth in Section 5.2. ARTICLE III DELIVERABLES AND COMPLETION 3.1 Deliverables. Subject to the remedies set forth in Section 3.4, Conformis shall furnish Stryker with the Deliverables as defined in the R&D Work Plan, and Stryker shall have the opportunity to analyze and test each Deliverable for the purposes of determining Acceptance as set forth in the R&D Work Plan. Each Deliverable shall be deemed to be completed once such Deliverable has been Accepted (as defined below). 3.2 Free from Infringement. Without the consent of Stryker, Conformis shall not introduce any structure or methodology in the Deliverables (including a Deliverable within a Product or a Stryker Product) that (1) raise a colorable argument of patent infringement in the manufacture, use, sale, offer for sale or importation of the Deliverable as such Deliverable 8 Source: CONFORMIS INC, 10-Q, 11/1/2019 + + + +is intended to be exploited under the Other Agreements, (2) misappropriate any Confidential Information of any Third Party, or (3) otherwise violate any Intellectual Property rights of any Third Party. For clarity, disclosure of a matter on the Disclosure Schedules to the Asset Purchase Agreement shall not be deemed consent by Stryker under this Section 3.2. 3.3 Completion. After a Deliverable has been furnished to Stryker, Stryker (or its Agent designee) will be entitled to analyze and test the Deliverable to determine if it operates in accordance with and otherwise conforms to the applicable Acceptance Criteria set forth in R&D Work Plan. Conformis shall provide such assistance as Stryker may reasonably request in such determination. Stryker shall have [**] ("Acceptance Notification Period") following the date the Deliverable is received by Stryker to Accept or reject the Deliverable as described in Section 3.4. 3.4 Acceptance or Rejection. Respecting any Deliverable for Milestone #1 or Milestone #2, as set forth below, if Stryker determines that a Deliverable operates in accordance with and otherwise conforms to the applicable Acceptance Criteria pursuant to the R&D Work Plan, then Stryker will notify Conformis in writing that Stryker Accepts such Deliverable. If Stryker reasonably determines that a Deliverable does not operate in accordance with or otherwise conform to the applicable Acceptance Criteria, then Stryker will provide Conformis with a written notice of rejection within the Acceptance Notification Period describing the defect in view of the relevant Acceptance Criteria and including sufficient detail with respect to such Stryker testing and testing results as Conformis reasonably requests ("Failure Notice"). Conformis shall have [**] (or such longer period of time as may be agreed between the parties in good faith should the scope and complexity of the applicable Deliverable warrant some longer period of time) ("Redelivery Period") following the date it receives the Failure Notice to correct and redeliver the Deliverable. If Conformis timely delivers a corrected version of the Deliverable within the Redelivery Period, then Stryker will be 9 Source: CONFORMIS INC, 10-Q, 11/1/2019 + + + +entitled to repeat its acceptance analysis and testing process for the purposes of determining Acceptance as set forth in the R&D Work Plan until such Deliverable operates in accordance with or otherwise conforms to the applicable Acceptance Criteria; provided, however, that if Stryker properly rejects a particular Deliverable three (3) or more times in accordance with this Article III, or if Conformis fails to deliver a version or corrected version, as the case may be, of the Deliverable within any respective [**] period, Stryker may, terminate this Agreement in accordance with Section 8.2(c) (in the event of such three (3) rejections, Stryker "Finally Rejects" the Deliverable). Such termination, together with the provisions of Section 5.2 of the License Agreement, constitutes as Stryker's sole remedy and Conformis' exclusive liability in the event of any such rejection or failure by Conformis to deliver materially conforming Deliverables hereunder so long as such rejection or failure does not arise from Conformis' fraud, willful misconduct, gross negligence or bad faith. Stryker shall be deemed to have accepted a Deliverable timely furnished to it unless (a) the Deliverable fails to operate in accordance with and otherwise conform the applicable Acceptance Criteria, and (b) Stryker provides Conformis a written Failure Notice within the Acceptance Notification Period in accordance with this Section 3.4 (any acceptance or deemed acceptance, described in this Section 3.4, "Acceptance" or "Accept"). Acceptance of a Deliverable shall not constitute a waiver of any rights Stryker may have based on Conformis' warranties set forth in this Agreement. 3.5 Payment for Milestones. Stryker shall pay to Conformis the following milestone payments for the development work to be conducted hereunder if and when the following milestones are met, as follows: (a) Milestone #1 - Within thirty (30) days following the date on which Stryker receives the first prototype of the Patient- Specific Instrumentation delivered to it by Conformis in accordance with the R&D Work Plan, Stryker shall pay to Conformis a total of two million U.S. dollars ($2,000,000); and 10 Source: CONFORMIS INC, 10-Q, 11/1/2019 + + + +(b) Milestone #2 - Within thirty (30) days following the date on which there is a design freeze of the Patient-Specific Instrumentation for the KIB Product in accordance with the R&D Work Plan, Stryker shall pay to Conformis a total of three million U.S dollars ($3,000,000). 3.6 Payment. Stryker shall make all payments to Conformis required herein by wire transfer in accordance with the Wire Instructions. Such payments are non-refundable and non-creditable except as set forth in the Other Agreements. ARTICLE IV RESTRICTIVE COVENANT 4.1 Exclusivity. Except as specifically provided in the Distribution Agreement, Conformis shall be prohibited from developing or assisting another in developing, or causing another to develop, Patient-Specific Instrumentation for Off-The-Shelf Knee Implants for any Third Party in the field of orthopedics until January 1, 2032 (or earlier, to the extent set forth in Section 2.3.3.4 or Section 2.3.5 of the Distribution Agreement), with the exception that Conformis (including any entity involved in a Change of Control of Conformis, any such entity an "Acquirer"), may develop Patient-Specific Instrumentation for any Off-The- Shelf Implants of Conformis, an Acquirer or any of their Affiliates. For purposes of clarity, the foregoing does not prevent Conformis from granting any license, release, covenant not to sue or other immunity to any third party under any Patents, including any such immunity that would authorize manufacture, use or sale of Patient-Specific Instrumentation for Off-The-Shelf Knee Implants outside the Buyer Field. ARTICLE V INTELLECTUAL PROPERTY 5.1 Inventions. (a) Inventorship of all Inventions developed by either Party, or both Parties, in the performance of the R&D Program, shall be determined in accordance with the inventorship laws of the United States, even to the extent such Invention is not pursued in patent applications. (b) All right, title and interest in and to the Improved Stryker Background IP will vest solely in Stryker. Conformis agrees to assign and hereby assigns to Stryker all right, title and interest in and to all Improved Stryker Background IP in which ownership in same has vested in 11 Source: CONFORMIS INC, 10-Q, 11/1/2019 + + + +Conformis by operation of law or by assignment by its employees or consultants; and to facilitate such assignment to Stryker, Conformis agrees (i) to regularly ensure that its employees and consultants timely make any appropriate assignments to it of that which constitutes Improved Stryker Background IP, and (ii) at Stryker's reasonable request, to execute and have its employees and consultants execute, as necessary, all assignments and any other documentation necessary to perfect title in Stryker of such Improved Stryker Background IP. (c) All right, title and interest in and to the Improved Conformis Background IP and KIB Product IP ("Joint IP") shall be owned jointly by the Parties. Subject to the limitations set forth in this Agreement, the Joint IP may be used freely by either Party or its Affiliates and licensed to Third Parties by Conformis and its Affiliates, on the one hand, outside of the Buyer Field or by Stryker and its Affiliates, on the other hand, within the Buyer Field, in each case, without the consent of, or duty to account to or notify, the other Party, but, except with respect to external licenses of the Improved Conformis Background IP by Conformis or its Affiliates to Third Parties, any external Third Party license shall be governed in accordance with the last sentence of Section 4.3(c) of the APA. Each Party to whom ownership is to vest in Joint IP by operation of law or by assignment by its employees or Agents agrees to assign and hereby assigns to the other Party an undivided one-half right, title and interest in and to all Joint IP; and to facilitate such assignment, the Party possessing such ownership agrees (i) to regularly ensure that its employees and consultants timely make any appropriate assignments to it; and (ii) at the other Party's reasonable request, to execute and have its employees and consultants execute, as necessary, all assignments and any other documentation to perfect the undivided one-half right, title and interest in and to the other Party of such Joint IP. (d) Notwithstanding anything to the contrary, the foregoing does not constitute either (1) the grant by Conformis to Stryker of any license or immunity of any kind with respect to the Conformis Background IP or Conformis Foreground IP, regardless of the extent to which the Joint IP constitutes improvements to the Conformis Background IP or Conformis Foreground IP, (2) the grant by Stryker to Conformis of any license or immunity of any kind with respect to the Stryker Background IP, or (3) the grant by either Party of any license or immunity of any kind under any Intellectual Property rights owned by such Party, regardless of whether the exploitation of the Joint IP would infringe such Intellectual Property rights. Neither Party shall assign a partial interest in 12 Source: CONFORMIS INC, 10-Q, 11/1/2019 + + + +the Joint IP or Joint IP Rights to any Affiliate or Third Party (i.e., neither Party shall create any additional joint owners of the Joint IP), but each Party may assign all of its right, title and interest in and to the Joint IP and Joint IP Rights to an Affiliate or Third Party pursuant to and in accordance with Section 10.2. (e) Conformis shall promptly disclose to Stryker all (i) Improved Stryker Background IP, and (ii) Joint IP. Stryker shall promptly disclose to Conformis all Joint IP. (f) To the extent required and for the avoidance of doubt, Stryker hereby grants Conformis, and Conformis hereby accepts, a non-exclusive license to the Stryker Background IP and Improved Stryker Background IP solely for purposes of performing any obligations under this Agreement and the Distribution Agreement. 5.2 Confidential Information. The provisions of Sections 4.3(a)-(i) of Article 4 of the APA are incorporated herein as if fully set forth herein. 5.3 Maintenance of Records. Each Party shall prepare and maintain complete and accurate records concerning all Inventions for the purpose of documenting any possible Intellectual Property rights arising under this Agreement. 5.4 No Other Rights. (a) Conformis acknowledges and agrees that, as between the Parties, Stryker owns all right, title and interest, including all Intellectual Property rights, within the Stryker Background IP and Stryker's Confidential Information, including any Stryker Confidential Information underlying the Joint IP, and that, under this Agreement, except as expressly set forth herein, Conformis shall acquire no right, title, or interest in or to any of the foregoing, or any other Intellectual Property rights that are owned or controlled by Stryker, by implication, estoppel or otherwise. (b) Stryker acknowledges and agrees that, as between the Parties, Conformis owns all right, title and interest, including all Intellectual Property rights, in and to Conformis Background IP and Conformis' Confidential Information, including any Conformis Confidential Information underlying the Joint IP, and that, under this Agreement, Stryker shall acquire no right, title, or interest in or to any of the foregoing or any other Intellectual Property rights that are owned or controlled by Conformis, by implication, estoppel or otherwise. 5.5 Employees and Consultants. 13 Source: CONFORMIS INC, 10-Q, 11/1/2019 + + + +(a) Conformis shall ensure that all its employees, consultants, Agents or other Third Parties who perform any portion of Conformis' R&D Program obligations under this Agreement have entered into written agreements with Conformis whereby such employee, consultant, Agent or other Third Party assigns to Conformis all ownership rights in any Inventions made or developed by such employee, consultant, Agent or Third Party in the course of such R&D Program work under this Agreement. (b) Stryker shall ensure that all its Affiliates and its or their employees, consultants, Agents or other Third Parties who perform any portion of Stryker's R&D Program obligations under this Agreement have entered into written agreements with Stryker whereby such employee, consultant, Agent or Third Party assigns to Stryker all ownership rights in any Inventions made or developed by such employee, consultant, Agent or Third Party in the course of such R&D Program work under this Agreement. 5.6 Tangible Property. (a) All tooling, patterns, dies, gauges, jobs, fixtures, and all specifications, drawings, samples, designs, software, firmware, programs, formulae, and other tangible items ("Equipment") furnished by Stryker to Conformis in connection with this Agreement: (i) shall only be used in the performance of the R&D Program; (ii) shall remain the property of Stryker; and (iii) shall be disposed of or returned in good repair, normal wear and tear excepted, by Conformis to Stryker at Stryker's direction and expense upon Stryker's request. Conformis assumes risk of loss and damage to said items while in its possession or under its control, subject to normal wear and tear. Conformis shall notify Stryker promptly whenever any items of Stryker's tangible property are in need of repair or replacement. Stryker shall endeavor to mark its property as property of Stryker for 14 Source: CONFORMIS INC, 10-Q, 11/1/2019 + + + +use only under this Agreement. Conformis waives any right it may have in law or equity to withhold Stryker's property. (b) All Equipment furnished by Conformis to Stryker in connection with this Agreement: (i) shall only be used in the performance of the R&D Program; (ii) shall remain the property of Conformis; and (iii) shall be disposed of or returned in good repair, normal wear and tear excepted, by Stryker to Conformis at Conformis' direction and expense upon Conformis' request. Stryker assumes risk of loss and damage to said items while in its possession or under its control, subject to normal wear and tear. Stryker shall notify Conformis promptly whenever any items of Conformis' tangible property are in need of repair or replacement. Conformis shall endeavor to mark its property as property of Conformis for use only under this Agreement. Stryker waives any right it may have in law or equity to withhold Conformis' property. 5.7 Trademarks. Nothing in this Agreement shall confer to any Party any rights, whether by way of ownership, license or right to use, in any of the Trademarks of any other Party. Conformis shall not use the Trademarks of Stryker without Stryker's prior written consent and Stryker shall not use the Trademarks of Conformis without Conformis' prior written consent. 5.8 Prosecution of Patent Rights. Stryker shall be solely responsible, in its sole discretion, for preparing, filing, prosecuting and maintaining Patents arising from all Improved Stryker Background IP. Stryker shall be solely responsible for costs and expenses of preparing, filing, prosecuting and maintaining any such Patents. Stryker shall have the first right to prepare, file, prosecute and maintain Patents or copyrights arising from any Joint IP that is not Improved Conformis Background IP ("Stryker- Prosecuted Joint IP Rights"). Conformis shall have the first right to prepare, file, prosecute and maintain Patents or copyrights arising from any Improved Conformis Background IP ("Conformis-Prosecuted Joint IP Rights", and together with the Stryker- Prosecuted Joint IP Rights, "Joint IP Rights"). With respect to Joint IP Rights, the non-prosecuting Party will have the right, but not the obligation, to review and comment, and have the comments reasonably considered by the prosecuting Party, with regard to the filing, prosecution, 15 Source: CONFORMIS INC, 10-Q, 11/1/2019 + + + +and maintenance of the Joint IP Rights. In this regard, the prosecuting Party agrees to provide reasonable time for the non- prosecuting party to review and comment prior to any deadline associated with such Patent. Conformis and Stryker shall be equally responsible for costs and expenses of preparing, filing, prosecuting and maintaining any such Joint IP Rights. Notwithstanding the foregoing, in the event that the applicable Party decides not to file at all or not to file a continuing or other application to maintain the viability of the U.S part of a family of patents to which an application belongs, or decides to abandon or discontinue the prosecution or maintenance of any of the Joint IP Rights, such Party shall notify the other Party thereof, and such other Party may elect to continue the prosecution (including non-provisional application and PCT entry) or maintenance of such Joint IP Rights at its sole expense and in the name(s) of both Stryker and Conformis. The provisions of Sections 5.1(c) and 5.1(d) and this Section 5.8 shall run with the Joint IP, and each party shall ensure that any assignee of its interest in the Joint IP expressly assumes in writing such provisions. Any Party pursuing Patent applications in accordance with this Section 5.8 may disclose Confidential Information in patent applications to the extent necessary to provide requisite support for claims therein, provided however, the non-prosecuting Party will have the right, but not the obligation, to review and comment on the scope and content of the proposed disclosure, including the proposed disclosure of Confidential Information, prior to submission of the first disclosure of same in any such Patent applications, and have the comments reasonably considered by the prosecuting Party. In this regard, the prosecuting Party agrees to provide reasonable time for the non-prosecuting party to review and comment prior to any such submission associated with such Patent. 5.9 Infringement and Defense. (a) Each Party may in its sole discretion enforce the Patents or other intellectual property rights it solely owns pursuant to this Agreement, as well as to defend against any assertions of invalidity, unenforceability or ownership of such Patents. (b) The Parties shall confer and consult with respect to disputes with Third Parties respecting the infringement, validity, enforceability or ownership of any Joint IP, including the settlement thereof. Such consultation shall be for the purpose of determining the best approach within such actions and neither Party shall take any action to enforce or defend any Joint IP without the other Party's prior written consent. 16 Source: CONFORMIS INC, 10-Q, 11/1/2019 + + + +5.10 Publicity. Neither Party shall issue any press release or otherwise publicize this Agreement or the development work to be conducted hereunder, except in accordance with Section 4.2 of the APA. ARTICLE VI REPRESENTATIONS AND WARRANTIES 6.1 Representations, Warranties and Covenants. Each Party hereby represents and warrants to, and covenants with, each other Party that: (a) Due Organization. Good Standing and Power. It is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of organization and has the power and authority to own, lease and operate its assets and to conduct the business now being conducted by it. It has all requisite corporate power and authority to enter into this Agreement and to perform its obligations hereunder. (b) Authorization and Validity of Agreement. The execution, delivery and performance by it of this Agreement and the consummation by it of the transactions contemplated hereby have been duly authorized and approved by all necessary corporate or equivalent action on its part. This Agreement has been duly executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms, except as the same may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other Applicable Laws relating to or affecting creditors' rights generally and by general equity principles. (c) Absence of Conflicts. The execution, delivery and performance by it of this Agreement and the consummation by it of the transactions contemplated hereby do not and will not: (i) violate any Applicable Laws, regulations, orders, writs, injunctions or decrees of any governmental, judicial, legislative, executive, administrative or regulatory 17 Source: CONFORMIS INC, 10-Q, 11/1/2019 + + + +authority of the United States or any foreign country or of any state or local governmental authority; (ii) conflict with, or result in the breach of any provision of, its certificate or articles of incorporation, bylaws or equivalent organizational documents; (iii) result in the creation of any lien or encumbrance of any nature upon any property being transferred or licensed by it pursuant to this Agreement; or (iv) violate, conflict with, result in the breach or termination of or constitute a default under (or event which with notice, lapse of time or both would constitute a default under), any permit, contract or agreement to which it is a Party or by which any of its properties or businesses are bound. (d) Consents. No authorization, consent or approval of, or notice to or filing with, any governmental authority is required for the execution, delivery and performance by it of this Agreement, other than those associated with obtaining required regulatory approvals as contemplated hereby. (e) Employee and Consultant Obligations. Each of its employees, consultants and Agents who will engage in activities on behalf of a Party under the R&D Work Plan, or who will have access to Confidential Information, is contractually obligated, or will be contractually obligated prior to his/her participation or access, to (i) assign to the Party all Intellectual Property rights conceived, made or discovered by such employee or Agent, whether solely or in collaboration with others, in connection with such employee's, consultant's or Agent's work for the Party, and (ii) maintain the confidentiality of the Confidential Information. To the extent applicable, it is the intent of the Parties that ownership of all developments under this Agreement shall vest in the respective Party by operation of law or by assignment prior to assignment to the other Party pursuant to Article V. 18 Source: CONFORMIS INC, 10-Q, 11/1/2019 + + + +(f) Debarment. No employee, consultant or Agent who will engage in activities on behalf of such Party under the R&D Work Plan, or who will have access to Confidential Information of the other Party, has been the subject of a debarment proceeding under 21 U.S.C. § 335a, and has been excluded from participation in any Federal or State or other government health care program. 6.2 EXCEPT AS EXPRESSLY PROVIDED ELSEWHERE IN THIS AGREEMENT, INCLUDING THE REQUIREMENTS IN THE R&D WORK PLAN, CONFORMIS MAKES NO WARRANTY WITH RESPECT TO THE SERVICES OR DELIVERABLES FURNISHED HEREUNDER, AND NO WARRANTIES OF ANY KIND, WHETHER WRITTEN, ORAL, IMPLIED OR STATUTORY, INCLUDING WARRANTIES OF MERCHANTABILITY, NON- INFRINGEMENT OR FITNESS FOR A PARTICULAR PURPOSE, SHALL APPLY. ARTICLE VII LIMITATION ON LIABILITY AND INDEMNIFICATION 7.1 Responsibility and Control. Each Party shall be solely responsible for the safety of its own employees, Agents and subcontractors with respect to their activities related to this Agreement. 7.2 Limitation of Liability. EXCEPT FOR [**], IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR [**], EVEN IF SUCH PARTY WAS ADVISED OR AWARE OF THE POSSIBILITY OF SUCH DAMAGES. CONFORMIS' LIABILITY ON A PER OCCURRENCE BASIS UNDER SECTION 7.3(A)(IV) SHALL NOT EXCEED THE GREATER OF (I) $[**] AND (II) THE AMOUNT OF INSURANCE COVERAGE ACTUALLY PAID TO CONFORMIS UNDER THEN-CURRENT INSURANCE POLICIES OF CONFORMIS IN RESPECT OF SUCH DAMAGES. For the purposes of this Section 7.2, "per occurrence" means the occurrence of any claim or series of claims directly arising out of or resulting from the same act, omission or event. 7.3 Mutual Indemnification. (a) Indemnification by Conformis. Conformis shall indemnify and hold harmless Stryker, its directors, officers, employees, Agents and Affiliates and 19 Source: CONFORMIS INC, 10-Q, 11/1/2019 + + + +their respective successors, heirs and assigns (collectively the "Stryker Indemnified Parties") against any and all claims, suits, actions, and demands, wherever brought and however denominated, brought by a Third Party (all of the foregoing being referred to herein as "Claims") against the Stryker Indemnified Party including all damages, collateral damages and settlements arising therefrom and reasonable outside attorneys' fees and litigation expenses related thereto, to the extent arising from or related to (i) any breach of Conformis' representations, warranties or obligations under this Agreement, (ii) any alleged violation of any Applicable Laws by Conformis, (iii) the negligence (excluding any product liability Claim), gross negligence or intentionally wrongful acts or omissions of Conformis, its employees, consultants, Agents and Affiliates in their performance hereunder, and (iv) any portion of a Claim alleging personal injury on account of product liability attributable to a Deliverable (including a Deliverable within a Product or a Stryker Product). Conformis shall have no obligation or liability with respect to any Claim under Section 7.3(a)(iii) or Section 7.3(a)(iv) to the extent directly arising out of or relating to: (1) any use of the Products in any manner not in accordance with applicable documentation (e.g., instructions for use, package inserts, labels, surgical guides and other materials provided by or approved by Conformis) that is not a result of Conformis' conduct; (2) damage to the Products occurring after shipment that is not a result of Conformis' conduct; or (3) any modifications to the Products that are not contemplated by the instructions for use thereto by any Person other than Supplier and that is not a result of Conformis' conduct. Notwithstanding anything to the contrary, Stryker's sole remedy and Conformis' exclusive liability for breach of Section 3.2 with respect to a Product or a Stryker Product shall be as set forth in Section 10.1(i) of the Distribution Agreement. (b) Indemnification by Stryker. Stryker shall indemnify and hold harmless Conformis, its directors, officers, employees, Agents and 20 Source: CONFORMIS INC, 10-Q, 11/1/2019 + + + +Affiliates and their respective successors, heirs and assigns (collectively the "Conformis Indemnified Parties") against any and all Claims against the Conformis Indemnified Parties to the extent arising from or related to (i) any breach of Stryker's representations or warranties under this Agreement, (ii) any alleged violation of any Applicable Laws by Stryker, and (iii) the grossly negligent or intentionally wrongful acts or omissions of Stryker, its employees, consultants, Agents and Affiliates in their performance hereunder. (c) Joint Liability. To the extent that Stryker, on the one hand, and Conformis, on the other hand, each has indemnification obligations to the other in connection with a single Claim, they will contribute to the aggregate damages, liabilities, costs and expenses arising from such Claim in a proportion reflecting the relative and comparative responsibilities and determined liability of the Parties for such damages, liabilities, costs and expenses, as well as any other relevant equitable considerations. The amount paid or payable by a Party for purposes: of apportioning the aggregate damages, liabilities, costs and expenses shall be deemed to include all reasonable legal fees and expenses incurred by such Party in connection with investigating, preparing for or defending against such Claim. (d) Indemnification Procedures. Claims for indemnification under this Agreement shall be governed by the indemnification procedures set forth in Section 5.5 of the Asset Purchase Agreement. (e) Settlement. If the indemnifying Party assumes the defense of a Claim, no compromise or settlement of such claims may be effected by the indemnifying Party without the indemnified Party consent unless: (a) there is no finding or admission of any violation of Applicable Requirements or any violation of the rights of any Person by the indemnified Party and no effect on any other claims that may be made against the indemnified Party, (b) the sole relief provided is 21 Source: CONFORMIS INC, 10-Q, 11/1/2019 + + + +monetary damages that are paid in full by the indemnifying Party and (c) such settlement includes as an unconditional release of liability by such Third Party claimant in respect of all Indemnified Persons. ARTICLE VIII TERM AND TERMINATION 8.1 Term. The term of this Agreement shall begin as of the Effective Date and continue until Acceptance of all Deliverables for Milestones #1 and #2 pursuant to Section 3.4 and completion of Milestone #3, unless earlier terminated under Section 8.2, as provided for under the Other Agreements, or as mutually agreed by the Parties. 8.2 Termination. (a) Dissolution or Insolvency Event. Either Party may terminate this Agreement effective immediately upon delivery of a Termination Notice if the other Party is (A) dissolved or is seeking to dissolve itself under applicable corporate law other than as part of a corporate restructuring under which its assets were first transferred to an assignee under this Agreement in accordance with Section 10.2; or (B) (i) becomes subject to an Insolvency Event, provided that, no termination right shall exist in respect of an Insolvency Event that is a chapter 11 case under the Bankruptcy Code if the Party subject to such chapter 11 case (x) continues to perform all of its material obligations under this Agreement, (y) does not seek to reject this Agreement or take any action in such chapter 11 case to disavow or undermine the rights of the other Party under this Agreement, and (z) assumes this Agreement on or before any deadline in such chapter 11 case for such assumption; notwithstanding the foregoing, nothing herein shall limit or prevent the Party not subject to an Insolvency Event from objecting to assumption or assumption and assignment of this Agreement or requiring cure payments or adequate assurance 22 Source: CONFORMIS INC, 10-Q, 11/1/2019 + + + +of future performance as a condition of assumption or assumption and assignment. (b) Default. If any Party believes the other is in material breach of any of its material obligations under this Agreement in a manner other than as set forth in Article III to which this Section 8.2(b) does not apply, it may give notice of such material breach to the allegedly breaching Party, which Party shall have [**] (or such longer period of time as may be reasonably commensurate with the effort reasonably required to remedy such default) in which to remedy such default. If such alleged material breach is not remedied in the time period set forth above, the Party alleging material breach shall refer the matter to the chief executive officers of each Party, who shall meet and confer within [**] after notice from the non-breaching Party of its desire for such a meeting. If the Parties are unable to resolve any dispute in such meeting and no Action has been brought in accordance with Section 10.8 with respect to such dispute, the non-breaching Party may terminate this Agreement immediately upon delivery to the defaulting Party of a Termination Notice. The non-defaulting Party's right to terminate this Agreement in accordance with this Section 8.2(b) shall not be construed as an exclusive remedy. (c) If Stryker Finally Rejects any Deliverable for Milestone #1 or #2 in accordance with Article III, Stryker may terminate this Agreement, which termination shall be effective immediately upon delivery of a Termination Notice to Conformis. 8.3 Surviving Rights/Obligations. (a) The provisions of Articles V, VI, VII and IX and Sections 8.3, 8.4, 10.1, 10.2, 10.5 - 10.13 and 10.15, together with any provisions required for the interpretation or enforcement of any of the foregoing, shall survive the termination or expiration of this Agreement, provided, however that Section 7.3(a)(iv) shall survive the termination or expiration of this Agreement for only [**] thereafter. The termination of this Agreement shall not relieve any Party from obligations that are expressly indicated to survive termination of the Agreement. 23 Source: CONFORMIS INC, 10-Q, 11/1/2019 + + + +8.4 Return or Destruction of Confidential Information. Solely with respect to Confidential Information in which a Party has no ownership interest at all, owned or co-owned Confidential Information being exempt herefrom, upon termination of this Agreement, unless independently authorized to retain such of the Disclosing Party's Confidential Information under an Other Agreement, each Receiving Party shall, and shall direct its Representatives to, cease all use and make no further use of any Confidential Information of the Disclosing Party and shall, upon written request from the Disclosing Party, promptly return or destroy all Confidential Information of the Disclosing Party (including copies thereof) that is in tangible form (provided, however, that, with respect to electronic imaging of the Disclosing Party's Confidential Information, such materials shall be deleted and removed from access by an ordinary user from all computer hard drives, servers and similar media but shall not require any action to delete or erase such materials from any disaster recovery tapes or other back-up media or any record retention or computer storage system so long as the Receiving Party and its Representatives take such actions as are reasonably likely to prevent access to such materials by any person other than information technology and other administrative employees who are responsible for maintaining those disaster recovery tapes and other back-up media) and any documents created by the Receiving Party or any of its Representatives containing Confidential Information of the Disclosing Party. The Receiving Party shall provide to the Disclosing Party written certification of destroyed Confidential Information of the Disclosing Party promptly following the destruction thereof. Notwithstanding the foregoing, the Receiving Party and its Representatives may retain one copy of any Confidential Information of the Disclosing Party in a secure location in the Receiving Party's legal department for the purpose of establishing compliance with Applicable Laws (including professional standards) and for defending or maintaining any litigation (including any administrative proceeding) relating to this Agreement, the Other Agreement, the Prior CDA or the Confidential Information, provided that all such information shall continue to be kept confidential pursuant to the terms of this Agreement. 24 Source: CONFORMIS INC, 10-Q, 11/1/2019 + + + +ARTICLE IX RECORD-KEEPING AND AUDITS 9.1 Records Retention. Each of the Parties shall record in written or electronic form all material information with respect to the performance of its obligations relating to the R&D Program in accordance with standard industry practices. ARTICLE X MISCELLANEOUS 10.1 Agency. Neither this Agreement nor any of the Other Agreements creates any partnership, agency or other relationship among the Parties for any purpose, including for all tax purposes. No Party is granted any right or authority to assume or to create any obligation or responsibility on behalf or in the name of the other Party or to bind the other Party in any manner whatsoever. 10.2 Assignment and Change of Control. Except as otherwise provided herein, a Party shall not have the right to assign any of its rights or obligations under this Agreement (whether through a merger, sale of stock, or otherwise) without the prior written consent of the other Party; except that, either Party shall be permitted, without any need for the other Party's consent, to assign this Agreement (a) in whole or in part to an Affiliate (provided, however, that once such Person is no longer an Affiliate of the assigning Party, such former Affiliate shall assign this Agreement back to the assigning Party), provided that the assigning Party provides the other Party notice of any such assignment provided further that failure to provide such notice of such assignment shall not render such assignment void; or (b) to a Third Party in connection with sale or transfer of all or substantially all of the assigning Party's business or assets relating to the subject matter of this Agreement, whether by Change of Control, merger, sale of assets or otherwise; provided, however, that, with respect to clause (b), (i) any assignment of this Agreement shall be void and have no effect unless and until the assignee assumes the 25 Source: CONFORMIS INC, 10-Q, 11/1/2019 + + + +obligations of the assigning Party in a written instrument, a copy of which is provided to the other Party; and (ii) any assignment of this Agreement must be accompanied by a simultaneous assignment of the Other Agreements to the same assignee, and the assigning Party's interest in the Purchased Assets to the same assignee unless otherwise agreed by Conformis in advance, which agreement shall not be unreasonably withheld. Any assignment in whole or in part shall not relieve the assigning Party of its obligations hereunder. If and to the extent that a Party assigns any of its rights and/or obligations hereunder in accordance with this Section 10.2, then this Agreement shall be binding upon the assignee to the same extent as if it were a Party hereto. Any assignment not in accordance with this Section 10.2 shall be void. 10.3 Further Actions. Each Party agrees, subsequent to the execution and delivery of this Agreement and without any additional consideration, to execute, acknowledge and deliver such further documents and instruments, and to do all such other acts, as may be necessary or appropriate in order to carry out the purposes and intent of this Agreement. 10.4 Force Majeure. (a) In the event that either Party is unable to perform any of its obligations under this Agreement, or to enjoy any of its benefits because of fire, natural disaster, action or decrees of Governmental Entities or any other event not within such Party's reasonable control (a "Force Majeure Event"), the Party who has been so affected shall give written notice to the other Party as soon as practicable and shall do everything reasonably possible to resume performance. Upon receipt of such notice, all obligations under the Agreement shall be immediately suspended. If the period of nonperformance exceeds [**] from the receipt of notice of the Force Majeure Event, the Party whose ability to perform has not been so affected may, by giving written notice, terminate the Agreement. Any acceptance or warranty period affected by a Force Majeure Event shall likewise be extended for a period equal to the duration of such Force Majeure Event. As applied to this Section 10.4 26 Source: CONFORMIS INC, 10-Q, 11/1/2019 + + + +and to determine whether an event is reasonably beyond control of a Party, materials shortages, strikes, slowdowns, other labor related delays or events resulting from a Party's, its Affiliates or their respective agents' negligence, gross negligence, fraud or intentional misconduct are not Force Majeure Events. (b) Notwithstanding the provisions set forth in Section 10.4(a), above, a Force Majeure Event shall not include any governmental action of an enforcement nature that arises from or relates to either Party's failure to comply with any federal, national, state, provincial, international, or local law, statute, regulation or ordinance applicable to such Party's performance hereunder. 10.5 Notices. All notices, requests, demands, waivers, instructions, consents and other communications to be given pursuant to the terms of this Agreement will be in writing and will be deemed to have been duly given upon receipt if delivered by hand, sent by a nationally recognized overnight mail service, or mailed by registered or certified mail, return receipt requested, postage prepaid: If to Stryker, addressed to: Howmedica Osteonics Corp. c/o Stryker Corporation Attn: Legal Department, [**] 325 Corporate Drive Mahwah, NJ 07430 If to Conformis, addressed to: Conformis, Inc. Attn: Chief Executive Officer and General Counsel 600 Technology Park Drive Billerica, MA 01821 With a copy (which shall not constitute notice) to: 27 Source: CONFORMIS INC, 10-Q, 11/1/2019 + + + +WilmerHale Attn: Jason Kropp, Esq. 60 State Street Boston, MA 02109 Any Party may change its address, telephone number, or facsimile number by prior written notice to the other Party. 10.6 Amendments and Waivers. This Agreement may not be modified or amended except by an instrument or instruments in writing signed by the Party against whom enforcement of any such modification or amendment is sought. Conformis may waive compliance by Stryker or Stryker may waive compliance by Conformis with any term or provision of this Agreement on the part of such Party to be performed or complied with, but only by an instrument in writing. The waiver by any Party of a breach of any term or provision of this Agreement will not be construed as a waiver of any subsequent breach. 10.7 Governing Law. This Agreement shall be governed and construed in accordance with the laws of New York State (without regard to the conflict of laws provisions thereof). 10.8 Jurisdiction. Subject to Section 10.14, the federal and state Courts of New York State shall have exclusive jurisdiction to hear and decide any suit, Action or proceedings, and to settle any disputes, which may arise out of or in connection with this Agreement; provided, however, that each Party shall have the right to institute judicial proceedings in any court of competent jurisdiction against the other Party or anyone acting by, through or under the other Party, in order to enforce an Order entered by federal state courts of New York. Each Party shall cause its applicable permitted Third Party sublicensees and Affiliates receiving any rights or benefits (including the receipt of any Confidential Information) under this Agreement to be bound by this Section 10.8 prior to their exercise of any such rights or receipt of any such benefits. If such Party fails to comply with the foregoing sentence 28 Source: CONFORMIS INC, 10-Q, 11/1/2019 + + + +with respect to any such Third Party or Affiliate, the other Party shall have the right to seek relief in any court of competent jurisdiction in connection with any dispute involving such Third Party or Affiliate. 10.9 Severability. The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof. If any term or other provision of this Agreement, or the application thereof to any Person or any circumstance, is invalid, illegal or unenforceable by a Court of competent jurisdiction, (a) a suitable and equitable provision shall be substituted therefor in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid or unenforceable provision and (b) the remainder of this Agreement and the application of such provision to other Persons or circumstances shall not be affected by such invalidity, illegality or unenforceability, nor shall such invalidity, illegality or unenforceability affect the validity or enforceability of such provision, or the application thereof, in any other jurisdiction. 10.10 Entire Agreement and Third-Party Beneficiaries. This Agreement (including the Other Agreements) contains the entire agreement by and among the Parties with respect to the subject matter hereof and there are no agreements, understandings, representations or warranties between the Parties other than those set forth or referred to herein. This Agreement is not intended to confer upon any Person not a party (or their successors and assigns permitted by Section 10.2), and to the extent expressly provided, their Affiliates, Agents, employees and representatives, any rights or remedies hereunder, except that Section 7.3(a) and Section 7.3(b) hereof are intended to benefit, and to be enforceable by, any of the Relevant Indemnified Parties therein described. 10.11 Jointly Prepared. This Agreement has been prepared jointly and shall not be strictly construed against any Party. 29 Source: CONFORMIS INC, 10-Q, 11/1/2019 + + + +10.12 Expenses. Except as otherwise set forth in this Agreement and the Other Agreements, all legal and other costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby will be paid by the Party incurring such costs and expenses. 10.13 Counterparts and Electronic Transmission. This Agreement may be executed in one or more counterparts, all of which will be considered one and the same agreement, and will become effective when one or more counterparts have been signed by each of the Parties and delivered to the other Party. This Agreement may be executed and delivered by facsimile or e- mail transmission with the same effect as if a manually signed original was personally delivered. 10.14 Negotiation in Event of Dispute. In the event of any dispute or disagreement between any of the Parties as to the interpretation of any provision of this Agreement or any agreement incorporated herein, the performance of obligations hereunder or thereunder, or any other disputed matter relating hereto or thereto, such matter, upon the written request of any Party, will be referred to an executive of each Party. Such executives will promptly meet in good faith to resolve the dispute. If the executives do not agree upon a decision within thirty calendar days after the reference of the matter to them, any Party will be free to exercise any remedies available to it. 10.15 Rules of Construction. As used in this Agreement, the words "include", "includes" and "including" means "including without limitation", and no inferences or conclusions of any sort shall be drawn from the fact that in some instances in this Agreement the words "include", "includes" and "including" are actually followed by the phrase "without limitation" or the equivalent while in other instances they are not. Except where the context expressly requires otherwise, the use of any gender herein will be deemed to encompass references to any gender, and the use of the singular will be deemed to include the plural (and vice versa). 30 Source: CONFORMIS INC, 10-Q, 11/1/2019 + + + +[Signature Page Follows] 31 Source: CONFORMIS INC, 10-Q, 11/1/2019 + + + +IN WITNESS WHEREOF, the parties have caused this Development Agreement to be duly executed as of the respective dates written below. HOWMEDICA OSTEONICS CORP. CONFORMIS, INC. By: /s/ Spencer Stiles By: /s/ Mark A. Augusti Name: Spencer Stiles Name: Mark A. Augusti Title: President Title: President and CEO Date: September 26, 2019 Date: 9-30-2019 [Signature Page to Development Agreement] Source: CONFORMIS INC, 10-Q, 11/1/2019 + + + +Execution Version Certain identified information has been excluded from the exhibit because it is both (i) not material and (ii) would likely cause competitive harm to the Company, if publicly disclosed. Double asterisks denote omissions. Source: CONFORMIS INC, 10-Q, 11/1/2019 \ No newline at end of file diff --git a/full_contract_txt/CreditcardscomInc_20070810_S-1_EX-10.33_362297_EX-10.33_Affiliate Agreement.txt b/full_contract_txt/CreditcardscomInc_20070810_S-1_EX-10.33_362297_EX-10.33_Affiliate Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..7b89300089636d91710bcf1201f302baaeb97735 --- /dev/null +++ b/full_contract_txt/CreditcardscomInc_20070810_S-1_EX-10.33_362297_EX-10.33_Affiliate Agreement.txt @@ -0,0 +1,91 @@ +Exhibit 10.33 Last Updated: April 6, 2007 CHASE AFFILIATE AGREEMENT THIS AGREEMENT sets forth the terms and conditions agreed to between Chase Bank USA, N.A. (?Chase?) and you as an "Affiliate" in the Chase Affiliate Program (the "Affiliate Program"). Once accepted into the Affiliate Program, an Affiliate can establish links from the Affiliate's Website to [Chase.com]. Chase will pay Affiliate a fee for each approved credit card account that originates from a link in Affiliate's Website. THIS IS A LEGAL AND CONTRACTUALLY BINDING AGREEMENT BETWEEN AFFILIATE AND CHASE. TO APPLY TO THE AFFILIATE PROGRAM, YOU MUST COMPLETE AND SUBMIT THE AFFILIATE REGISTRATION FORM AND CLICK ON THE "AGREE" BUTTON BELOW TO INDICATE YOUR WILLINGNESS TO BE BOUND TO CHASE BY THIS AGREEMENT. THIS AGREEMENT WILL TAKE EFFECT IF AND WHEN CHASE REVIEWS AND ACCEPTS YOUR REGISTRATION FORM AND PROVIDES YOU NOTICE OF ACCEPTANCE. BY SUBMITTING YOUR REGISTRATION FORM, AFFILIATE CERTIFIES THAT YOU HAVE READ AND UNDERSTAND THE TERMS SET FORTH BELOW, AND THAT YOU ARE AUTHORIZED TO SUBMIT THIS REGISTRATION FORM BY THE NAMED AFFILIATE. In connection with your participation in the Affiliate Program, Affiliate and Chase agree as follows: 1. Enrollment in the Affiliate Program; Restricted Content To enroll in the Affiliate Program, you must submit a complete "Affiliate Registration Form" via the Chase Affiliate Website: For new affiliates: https://ssl.linksynergy.com/php-bin/reg/sregister.shtml?mid=2291 For existing affiliates: http://www.linkshare.com/joinprograms?oid=87909 Chase will evaluate your registration form and will notify you via e-mail of the acceptance or rejection of your registration form. Chase reserves, in its sole discretion, with or without reason, the right to accept or reject your registration into the Chase Affiliate Program, including but not limited to a determination that your site is unsuitable for or incompatible with the Affiliate Program based on the following criteria (collectively "Restricted Content"): • Incorporates images or content that is any way unlawful, offensive, profane, harmful, threatening, defamatory, obscene, harassing or racially, ethically or otherwise objectionable • Promote illegal activities, including gambling • Promotes or depicts sexually explicit, obscene or pornographic images • Promotes or depicts violence or hate speech • Promotes discrimination based on race, sex, religion, nationality, disability, sexual orientation or age + +Source: CREDITCARDS.COM, INC., S-1, 8/10/2007 + + + + + + • Incorporates any materials which infringe or assist others to infringe on any copyright, trademark or other intellectual property rights • Contains or promotes politically sensitive or controversial issues Chase also reserves the right to terminate this Agreement in the event that any Restricted Content is incorporated on Affiliate's site after acceptance of your registration form and the commencement of the term of this Agreement. Chase may also terminate this Agreement if your site is deemed unsuitable based on the criteria below: • Manipulates key word searches on portals • Misrepresents itself as a Chase Website by altering the visual "look and feel" of or text from Chase's site, and/or engage in "framing" the Chase Website • Engages in domain squatting • Engages in spamming or unsolicited commercial e-mail • Engages in unauthorized telemarketing or remarketing of Chase Credit Card offers via telephone • Uses Chase products and services in the domain name, URL or URI, including, but not limited to, any combination of the following words: • JP • MORGAN • CHASE • MANHATTAN • AARP • AMAZON.COM • BALL STATE UNIVERSITY • BORDERS • BRITISH AIRWAYS • CASH PLUS • CHASE FREEDOM • CENTRAL MICHIGAN UNIVERSITY • CONTINENTAL • CORNELL UNIVERSITY • DISNEY • DUKE UNIVERSITY • FLEXIBLE REWARDS • FREE CASH • HARVARD COOP • HESS • HOME IMPROVEMENT • LEHIGH UNIVERSITY • LOUISIANA STATE UNIVERSITY • MARATHON • MARRIOTT • MIAMI UNIVERSITY • OHIO UNIVERSITY • OVERSTOCK • PERFECT CARD • PRIORITY CLUB / HOLIDAY INN • SONY • SOUTHERN ILLINOIS UNIVERSITY • SPEEDWAY SUPER AMERICA + +Source: CREDITCARDS.COM, INC., S-1, 8/10/2007 + + + + + + • STARBUCKS • SUBARU • TEMPLE UNIVERSITY • TOYS "R" US • TRAVEL PLUS • TRUMP • ULTIMATE REWARDS • UNITED • UNIVERSAL • UNIVERSITY OF ARIZONA ATHLETICS • UNIVERSITY OF CHICAGO • UNIVERSITY OF FLORIDA • UNIVERSITY OF HOUSTON • UNIVERSITY OF IDAHO • UNIVERSITY OF KENTUCKY • UNIVERSITY OF MARYLAND • UNIVERSITY OF MEMPHIS • UNIVERSITY OF MINNESOTA ATHLETICS • UNIVERSITY OF NOTRE DAME • UNIVERSITY OF OKLAHOMA • UNIVERSITY OF OREGON • UNIVERSITY OF SOUTH CAROLINA • UNIVERSITY OF TENNESSEE • UNIVERSITY OF VIRGINIA • UTAH STATE UNIVERSITY • VALUE MILES • VIRGINIA TECH APPROVED ACCOUNT • VOLKSWAGEN • WESTERN ILLINOIS UNIVERSITY • YALE UNIVERSTIY • Uses a proxy server or redirector server to proxy Chase web pages or web sites through your website, URL or URI • Otherwise violates intellectual property rights, including, without limitation, "scraping" text or images from Chase's Website • Does not clearly state an online privacy policy to its visitors • Is based outside of the United States • Is otherwise considered offensive or inappropriate, at Chase's discretion 2. Affiliate Responsibilities: • Affiliate cannot use or implement creative that is not available through the LinkShare affiliate interface. • Affiliates may not harvest or collect personal information, or email addresses using the Chase brand without the written consent of Chase • If Affiliate manages a sub-affiliate network, upon Chase's request, Affiliate shall promptly provide Chase with a current, written list identifying the sub-affiliates or other third parties associated. • Chase reserves the right to review and approve all sub-affiliate partners. • Chase shall only use the list for the sole purpose of administering the program and monitoring proper usage, and will not poach or contact subaffiliates directly. • Affiliates will not use the following product keyword search terms. (See Appendix) + +Source: CREDITCARDS.COM, INC., S-1, 8/10/2007 + + + + + + • If Affiliate manages a sub-affiliate network, the Affiliate may not pay sub-affiliates or other partners higher referral fees than the lowest tier of the public offer ($55.00). • Affiliate is prohibited from (a) installing spyware on another person's computer, (b) causing spyware to be installed on another person's computer, or (c) using a context based triggering mechanism to display an advertisement that partially or wholly covers or obscures paid advertising or other content on an Internet website in a way that interferes with a user's ability to view the Internet website. 3. Referral Fee For each Approved Account (as defined in section 4 below) received through Affiliate's site, Affiliate will earn a referral fee calculated in accordance with the schedule set forth below ("Commission") paid monthly. • Tiered or flat commission based on private offer terms in the network. Chase reserves the right to alter above referral fees from time to time upon written notice to Affiliate of such change. 4. Approved Account For purposes of determining Affiliate's Commission, an "Approved Account" means any Chase credit card application that is: (i) submitted by any user who clicks on an e-mail, banner or any other advertising material from Affiliate's Website; (ii) is approved by Chase; and (iii) is reported as approved by Chase to Affiliate. 5.Term of this Agreement The term of this Agreement will commence on the date that the Affiliate Registration Form is approved by Chase and will end when terminated by either party. Either Affiliate or Chase may terminate this Agreement at any time, with or without cause, by giving the other party written or e-mail notice of termination. At the time of termination, any links to Chase's Website must be removed immediately. Affiliate will continue to receive Commission payments for all Approved Accounts placed during the term of this Agreement. Notwithstanding the foregoing, Chase may terminate this Agreement if Affiliate does not comply with the terms and conditions herein. 6. Links Affiliate agrees to place Chase's links provided by Linkshare NetworkTM which manages the Affiliate Program ("Links") on its Affiliate's website. Affiliate is responsible for obtaining prior written approval from the Chase Affiliate manager or Linkshare Network to link any or all other sites owned or managed by the Affiliate, other than the site that was approved at the time of original registration. Affiliate may select or remove Links, at any time without prior approval from Chase. Affiliate is also responsible for removing and/or informing Chase of potential inactive or misdirected Links. Affiliate agrees to cooperate with Chase in establishing and maintaining Links. + +Source: CREDITCARDS.COM, INC., S-1, 8/10/2007 + + + + + + 7. Order Processing Chase will be solely responsible for processing each order placed by a customer from Affiliate's Links. Customers may only use the Chase on-line application process to apply for a Chase credit card. "Customers" are defined herein as individuals who apply for Chase credit cards through a link in Affiliate's Web site. Chase shall be responsible for administering application forms and related customer service. All of the rules, operating procedures and policies of Chase regarding customer orders and accounts will apply to orders received through the Links. Chase reserves the right to reject any credit card application in its sole discretion. 8. Tracking of Sales Chase will be solely responsible for tracking Approved Accounts made to customers who follow Affiliate's Links. Affiliate will be solely responsible for ensuring that the Links are formatted properly and maintained in a manner, which allows Chase to track such Approved Accounts. No Commission shall be paid if the Approved Account cannot be tracked by Chase's system or if the customer accesses the Chase site through means other than the Links. Chase will provide Affiliate with statements of Approved Account activity at the time Commissions are paid. 9. Terms and Conditions of Credit Cards Chase is solely responsible for determining the terms and conditions of the credit cards. The credit card offers may vary from time to time and are subject to change. Affiliate may not specify details regarding the Chase credit card on their Websites without the prior approval of Chase. 10. Chase Customers Customers who apply for Chase credit cards through the Chase Affiliate Program are customers of Chase. Affiliate has no authority to make or accept any offer on behalf of Chase. All Chase policies regarding customer orders, including availability, pricing and problem resolution, will apply to these customers. Affiliate has no authority to make, and Chase is not responsible for, any representations made by Affiliate that contradict these policies. 11. Product Descriptions Affiliate will only use credit card descriptions provided or approved in writing by Chase. 12. Copyrighted Material Affiliate is solely responsible for ensuring that its reviews and articles obey all applicable copyright and other laws. Generally, Affiliate must have express permission to use another party's copyrighted or other proprietary material. Chase is not responsible for Affiliate's improper use of another party's copyrighted or proprietary material. + +Source: CREDITCARDS.COM, INC., S-1, 8/10/2007 + + + + + + 13. Commercial Use This program is intended for commercial use only. Commissions are payable for Approved Accounts to third parties who access the Chase URL's (marketing pages) through the Links located on Affiliate's sponsoring Web site. Affiliates who use this program to apply for credit cards for their own use are NOT in violation of this Agreement. 14. Trademarks All Chase trademarks, trade names and service marks (collectively, the "Marks") are the exclusive property of Chase. Notwithstanding anything set forth in this Agreement, Chase reserves full ownership of the Marks and the Licensed Materials (as defined below). All use of the Marks by Affiliate is limited solely to the use contemplated by this Agreement. All use of Chase Marks by Affiliate is subject to the prior written approval of Chase. 15. Licenses and Use of the Chase Logos and Trademarks Chase grants Affiliate a non-exclusive, nontransferable, revocable right to (a) access the Chase site through the links solely in accordance with the terms of this Agreement and (b) solely in connection with such links, to use Chase's logos, trade names, trademarks, and similar identifying material relating to Chase (collectively, the "Licensed Materials"), for the sole purpose of booking Chase products. Prior to using any of the Licensed Materials, Affiliate will submit to Chase for approval a draft of all proposed material that incorporates the Licensed Materials, together with a brief statement setting forth the proposed use of such materials and any other background or supporting material reasonably requested by Chase to allow Chase to make an informed judgment. All such materials shall be submitted to Chase at least seven (7) days prior to the date of first intended use. Chase will notify Affiliate of its approval or disapproval of such materials within five (5) business days of its receipt of all information required to be submitted. The approval or disapproval of such materials will be in Chase's sole discretion. Any materials not receiving Chase's specific written preliminary approval will be deemed disapproved. Affiliate may not alter, modify, or change the Licensed Materials in any way. Affiliate is only entitled to use the licensed materials to the extent that it is a member in good standing of the Chase Affiliate Program. Affiliate agrees not to use the Licensed Materials in any manner that is disparaging or that otherwise portrays Chase in a negative light. Chase may revoke Affiliate's license at any time. 16. Service Interruption Certain technical difficulties may, from time to time, result in service interruptions. Affiliate agrees not to hold Chase responsible for the consequences of such interruptions. 17. Indemnification + +Source: CREDITCARDS.COM, INC., S-1, 8/10/2007 + + + + + + Affiliate hereby agrees to indemnify, defend, and hold harmless Chase, its shareholders, officers, directors, employees, agents, affiliates and their respective directors, officers, employees and agents, successors and assigns, from and against any and all claims, demands, losses, liabilities, damages or expenses (including attorneys' fees and costs) of any nature whatsoever incurred or suffered by Chase (collectively the "losses"), in so far as such losses (or actions in respect thereof) arise out of, are related to, or are based on (i) the breach of any representation, warranty, or covenant made by Affiliate herein; or (ii) any claim related to Affiliate's site. 18. Confidentiality Except as otherwise provided in this Agreement or with the consent of the other party hereto, each of the parties hereto agrees that all information including, without limitation, the terms of this Agreement, business and financial information, customer and vendor lists, and pricing and sales information, concerning Chase, Customer or Affiliate shall remain strictly confidential and secret and shall not be utilized, directly or indirectly, by such party for its own business purposes or for any other purpose except and solely to the extent necessary to exercise rights and perform obligations under this Agreement. The foregoing restrictions will not apply to information to the extent it (i) was known to the receiving party at the time of disclosure; (ii) has become publicly known through no wrongful act of the receiving party; (iii) has been rightfully received from a third party under no obligation to the disclosing party; (iv) has been disclosed by court order or as otherwise required by law if the receiving party has given the disclosing party a reasonable opportunity to contest or limit the scope of such required disclosure. 19. Modification Chase reserves the right to change any and all of the terms and conditions in this Agreement, at any time and in its sole discretion, by posting a new agreement on its Website. Without limiting the generality of the foregoing, the amount of Commissions, the definition of Approved Accounts, and all other provisions of this Agreement are subject to change without notice other than posting such information on the Chase Website. IF ANY MODIFICATION IS UNACCEPTABLE TO AFFILIATE, THE ONLY RECOURSE IS TO TERMINATE THIS AGREEMENT. AFFILIATE'S CONTINUED PARTICIPATION IN THE AFFILIATE PROGRAM FOLLOWING CHASE'S POSTING OF A NEW AGREEMENT ON ITS WEB SITE WILL CONSTITUTE BINDING ACCEPTANCE OF THE CHANGE. 20. Warranty Disclaimer Chase makes no warranties, representations or conditions with regard to the Chase Affiliate Program or any services provided hereunder, whether express or implied, arising by law or otherwise, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR NONINFRINGEMENT OR ANY IMPLIED WARRANTY ARISING OUT OF COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE. + +Source: CREDITCARDS.COM, INC., S-1, 8/10/2007 + + + + + + 21. Limitation of Damages Chase shall have no liability for any indirect, incidental, special or consequential damages or any loss of revenue or profits arising under or with respect to this Agreement or the Affiliate Program, regardless of whether Chase has been advised of the possibility of such damages. Further, Chase's aggregate liability arising under or with respect to this Agreement or the Affiliate Program shall in no event exceed the total Commissions paid or payable by Chase to Affiliate under this Agreement. 22. Independent Investigation AFFILIATE ACKNOWLEDGES THAT IT HAS READ THIS AGREEMENT, HAS HAD AN OPPORTUNITY TO CONSULT WITH ITS OWN LEGAL ADVISERS IF IT SO DESIRED, AND AGREES TO ALL ITS TERMS AND CONDITIONS. AFFILIATE AGREES THAT, IN INTERPRETING THIS AGREEMENT, NO WEIGHT SHALL BE PLACED UPON THE FACT THAT THIS AGREEMENT HAS BEEN DRAFTED BY CHASE, AND IT SHALL NOT ASSERT THAT THIS AGREEMENT IS UNENFORCEABLE OR INVALID ON THE GROUNDS THAT IT IS A CONTRACT OF ADHESION, THAT IT IS UNCONSCIONABLE, OR ANY SIMILAR THEORY. AFFILIATE UNDERSTANDS THAT CHASE MAY AT ANY TIME (DIRECTLY OR INDIRECTLY) SOLICIT CUSTOMER REFERRALS ON TERMS THAT MAY DIFFER FROM THOSE CONTAINED IN THIS AGREEMENT. 23. Governing Law This Agreement will be governed in all respects by the laws of the State of Delaware, including its conflict with law provisions. Accept. Appendix List of Restricted Trademark Terms Partner Restricted Trademark Terms Chase Brand Add Chase as a negative Keyword to your Search strategy. In addition, the following terms are prohibited: Chase, Chase bank, www.chase.com, www.creditcardsatchase.com, www.chasecreditcard.com, chase.com, creditcardsatchase.com, chasecreditcard.com, chase credit card, chase credit cards, Chase Freedom, Freedom Card AARP AARP.org, AARP.com, AARP membership, AARPmagazine.com, AARPhealthcare.com, AARP foundation, AARP passport, www.travelocity.com/AARP, AARP Bulletin, American Association of Retired Persons, AARP Insurance, AARP partner, AARP providers, AARP advocacy, Segunda Juventud, AARP Hot Deals Amazon Amazon, Amazon.com, www.amazon.com, Amazon Books, Amazon DVD, Amazon Movies, Amazon Music Borders Borders, Borders Stores, Borders Books, www.borders.com, www.bordersbooks.com Waldenbooks, Waldenbooks Stores, www.waldenbooks.com, www.waldenbooksstores.com + +Source: CREDITCARDS.COM, INC., S-1, 8/10/2007 + + + + + + British Air British Airways, British Air, www.britishairways.com, www.ba.com, ba, Continental See Continental Tab Disney See "Disney" Tab Hess Hess, www.hess.com, Amerada Holiday Inn/Priority Club Holiday Inn, Holiday Inn Express, Priority Club, IHG, www.ichotelsgroup.com, InterContinental, InterContinental Hotels Group, Crowne Plaza, Hotel Indigo, Staybridge Suites, Candlewood Suites, Marathon Marathon, Marathon Oil, Marathon Petroleum Company, Speedway, Speedway SuperAmerica, SuperAmerica Marriott www.marriottrewards.com, www.marriott.com, Marriott, Marriott Rewards Overstock overstock.com, www.overstock.com, overstocked.com, overstock/com, overstock com, overstock com, overstockcom, overstock .com, overstock?com, overstock>com, overstock, overstocked.com, overstocks.com, over stock.com, overstock .com, overstockcom Sony Sony, www.sonystyle.com, ImageStation, My Sony, Vaio, EverQuest Speedway Speedway SuperAmerica, Speedway, SuperAmerica, Speedy Rewards, Marathon, Marathon Oil, Marathon Petroleum Company Starbucks Starbucks, Starbucks Coffee, Starbucks Foundation, Starbucks Coffee Company, Starbucks Corporation Subaru Subaru, My Subaru, Subaru World, Subaru of America Toys www.toysrus.com, Toysrus.com, Toys "R" Us, Toys "R" Us International, Kids"R"Us, Babies"R"Us, Babiesrus.com, Toyologist, Toysrus/Amazon, Babiesrus/Amazon, www.personalizedbyrus.com Trump Trump, www.trump.com, The Apprentice, Trumped, Trump University, Trump Taj Mahal, Trump Plaza, Trump Marina, Trump Indiana, Trump Club Privee, Trump National Golf Club, Trump Tower, Trump Park Avenue, Trump World Tower, Trump International Hotel & Tower, Trump Place, Trump Palace, Trump Parc & Trump Parc East, Trump Grande, Mar-a-Lago United See "United" Tab Universal Universal, Universal Studios, Universal Movies, Unviersal Entertainment, Universal Hollywood, www.universal.com, Universal movie tickets, universal movie ticket, universal theme parks, universal discount, universal discounts, universal ticket, universal tickets, universal vacation, universal vacations, universal travel, universal deals, universal offer, universal offers, universal park, universal parks, universal getaway, universal getaways, universal family getaway, universal family getaways, universal deal, universal deals Volkswagen Volkswagen, Volkswagen International, Volkswagen Group, Volkswagen AG, Audi Disney Restricted Key Words cheap disney vacation disney world vacations cheap disney vacations disneyland bargain child vacation disneyland bargains childrens vacations disneyland cheap discount disney travel disneyland discount discount disney vacation disneyland discounts discount disney vacations disneyland offer discount vacation disneyland offers discount vacations disneyland promotion + +Source: CREDITCARDS.COM, INC., S-1, 8/10/2007 + + + + + + disney disneyland promotions disney bargain disneyland save disney bargains disneyland save disney cheap disneyland savings disney cruise disneyland savings disney cruise vacations disneyland travel disney deal disneyland trip disney discount disneyland trips disney family vacation disneyland vacation disney family vacations disneyland vacations disney florida vacation disneyworld bargain disney florida vacations disneyworld bargains disney golf vacations disneyworld cheap disney honeymoon disneyworld offer disney honeymoon vacation disneyworld offers disney honeymoons disneyworld promotions disney offer disneyworld save disney offers disneyworld savings disney package disneyworld vacation disney package vacations disneyworld vacations disney promotion family vacation disney promotions family vacations disney resort kid vacation disney resort vacation kids vacations disney resort vacations magic kingdom disney resorts orlando disney vacations disney savings orlando rentals disney travel orlando vacations disney travel package special disney travel disney vacation special vacation packages disney vacation club walt disney bargain disney vacations walt disney bargains disney vacations florida walt disney cheap disney vacations orlando walt disney deal disney world bargain walt disney deals disney world bargains walt disney offer disney world cheap walt disney offers disney world discount walt disney resort vacations disney world offer walt disney save disney world offers walt disney savings disney world package walt disney vacation disney world save walt disney vacations disney world savings walt disney world vacation disney world vacation walt disney world vacations United Restricted Key Words united airlines united air fare united united airlines reservations online united air united airline fare united.com United Escapes united airline international united flights www.united.com untied air united flight united first class unitedairlines.com United Vacation + +Source: CREDITCARDS.COM, INC., S-1, 8/10/2007 + + + + + + UAL united travel united airlines.com united star alliance ual.com united airlines specials united air lines united discounts www.unitedairlines.com united trip united airlines schedule travel with united united airline travel united airlines discounts united reservation united airlines official website www.ual.com united business class united express united airlines airports united reservations united airlines star alliance www.united airlines.com united non-stop flights united fares united packages united airline flight international united travel united and airlines united airlines economy plus United Vacations united airports united airlines tickets united group travel united airlines flights United Escape united express airlines easy update united flights united air vacations unitedair united fare sale United airfare united last minute fares www.united airlines united efares untied airlines united getaways www.unitedairlines united low fares united airline.com united airlines bookings united air line cities united flies united airlines travel fly on united united airlines homepage united airlines group travel united airlines website united airlines travel certificates united destinations United Easy Update united airline flights united airlines business travel united airlines home page united special deals United airfares united business travel e-fares untiedair united airlines site united economy class united airlines fares united package deals www.unitedairline.com international united ticket united airlines home international united tickets united airlines vacations shop for united flights vacation travel United EasyUpdate united specials fly with united www.united airline.com united e fares unitied airlines united travel certificates united deals united air star alliance international united flight united fare search united airlines online United Escapes united e-fares international united flight united airlines cities united airlines online united air fare united e-fares united airlines reservations online united airlines cities united airline fare + +Source: CREDITCARDS.COM, INC., S-1, 8/10/2007 + + + + + + Continental Restricted Key Words Continental airlines Continental air fare Continental Continental airlines reservations online continental.com Continental airline fare continental airline international Continental flights www.continental.com Continental air continental flight Continental first class continental air lines Continental Vacation continental airlines schedule Continental travel continental airline travel Continental airlines specials continental reservation Continental discounts continental reservations Continental trip continental fares travel with Continental continental airline flight Continental airlines discounts continental and airlines Continental airlines official website Continental Vacations Continental business class continental airlines tickets Continental airlines airports continental airlines flights Continental non stop flights continental flights continental airlines Continental packages continental air line International Continental travel continental airlines travel Continental airports continental airlines homepage Continental group travel continental airlines website Continental air vacations continental destinations Continental fare sale continental airlines vacations Continental last minute fares continental air fare Continental getaways continental airlines reservations online Continental low fares continental airline fare Continental airlines bookings international continental flight cities Continental flies continental airlines online fly on Continental continental airlines cities Continental airlines group travel Continental economy class Continental airlines travel certificates Continental package deals Continental airlines business travel international Continental ticket Continental special deals international Continental tickets Continental business travel shop for Continental flights fly with Continental + +Source: CREDITCARDS.COM, INC., S-1, 8/10/2007 \ No newline at end of file diff --git a/full_contract_txt/CybergyHoldingsInc_20140520_10-Q_EX-10.27_8605784_EX-10.27_Affiliate Agreement.txt b/full_contract_txt/CybergyHoldingsInc_20140520_10-Q_EX-10.27_8605784_EX-10.27_Affiliate Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..e3a6a3d852b1128c1026ca2b6bed6ffd061d0705 --- /dev/null +++ b/full_contract_txt/CybergyHoldingsInc_20140520_10-Q_EX-10.27_8605784_EX-10.27_Affiliate Agreement.txt @@ -0,0 +1,632 @@ +Exhibit 10.27 + +MARKETING AFFILIATE AGREEMENT + +Between: + +Birch First Global Investments Inc. + +And + +Mount Knowledge Holdings Inc. + +Dated: May 8, 2014 + +1 + +Source: CYBERGY HOLDINGS, INC., 10-Q, 5/20/2014 + + + + + +1. + +2. + +2.1 + +2.2 + +This Marketing Affiliate Agreement (the "Agreement") is entered into this 8th day of May 2014, by and between BIRCH FIRST GLOBAL INVESTMENTS INC., a corporation incorporated in the U.S. Virgin Islands, with its main place of business located 9100 Havensight, Port of Sale, Ste. 15/16, St. Thomas, VI 0080 (referred to as "Company") and MOUNT KNOWLEDGE HOLDINGS INC. and/or assigns, a corporation incorporated in the State of Nevada, with its main place of business located at 228 Park Avenue S. #56101 New York, NY 10003­1502 (referred to as "Marketing Affiliate" or "MA"). + +WHEREAS, this Agreement is to set forth in a formal agreement the prior verbal understandings between the parties in place since December 31, 2012 pertaining to the business described hereinbelow; and + +WHEREAS, Company, the owner of certain distribution rights to the Technology, technology and content as set forth in Exhibit A and related technical documentation (hereafter collectively referred to as Technology, wishes to contract for the marketing and/or support of the Technology, and MA wishes to market and/or support the Technology. + +Accordingly, Company and MA agree as follows: + +Effective Date and Term. + +This agreement shall begin upon the date of its execution by MA and acceptance in writing by Company and shall remain in effect until the end of the current calendar year and shall be automatically renewed for successive one (1) year periods unless otherwise terminated according to the cancellation or termination provisions contained in paragraph 18 of this Agreement. Company and MA acknowledge that this Agreement is not a franchise as that term is defined under any and all applicable local, state and/or federal laws in U.S., as amended. + +Grant of Rights. + +General Rights. Subject to the terms and conditions of this Agreement, Company hereby grants to MA the right to advertise, market and sell to corporate users, government agencies and educational facilities ("Clients") for their own internal language learning, soft skills and communication purposes only, and not for remarketing or redistribution, and not for use in a data center environment for multiple users Clients, unless otherwise agreed to by Company prior in writing, the Technology listed in Schedule A of this Agreement, and to sell and/or bundle Technology Maintenance for the Technology and to provide first line technical support and implementation services for the Technology in the territories listed in Schedule A of this Agreement, providing MA meets the criteria required for delivering services according to Schedule A. + +Third Party Rights. Company and MA acknowledge that Company derives certain rights herein from third parties and that Company reserves the right to modify or amend this Agreement if mandated by such third parties. + +2 + +Source: CYBERGY HOLDINGS, INC., 10-Q, 5/20/2014 + + + + + +3. + +3.1 + +3.2 + +3.3 + +3.4 + +3.5 + +3.6 + +Duties of MA. + +Best Efforts. MA agrees to use its best efforts to market and license the Technology to Clients consistent with the terms of this Agreement. + +License Agreement. MA shall execute a Company License Agreement/Client Registration Form with Clients and present that License Agreement/Client Registration Form to Company after each purchase of the Technology. + +Upon the execution of this Agreement, Company shall provide copies of its end user license agreements to MA. MA shall promptly review such agreements and advise Company as to what revisions, if any, should be made to the end user license agreements for resale in the Territory set forth in Schedule A to ensure that the agreements comply with requirements of local law in the Territory, and that Company has protection concerning proprietary rights, warranty disclaimers and limitations of liability under such local and federal laws of the U.S. + +For purposes of this Agreement, the Technology means the electronic access to programs, content and documentation, and Company's end user license agreement as it may be modified by Company for use in the Territory. The relationship between the corporate user and Company and/or its Affiliates shall be as specified in the applicable Company end user license agreement. Notwithstanding the foregoing, as between Company and MA, MA shall be responsible as defined for providing customer and technical support to end users in the Territory. MA will notify Company immediately in the event that it is unable to respond effectively to any end users' requests. + +Copyrights and Trademarks. MA shall protect copyrights, tradenames, trademarks, service marks, trade secrets and other confidential proprietary rights and information of Company and its affiliates and report promptly any infringements or suspected infringements of which MA becomes aware and to cooperate fully with Company in its efforts to protect its copyrights, tradenames, trademarks, service marks, trade secrets and other confidential proprietary rights and information. + +No Alternations. MA agrees not to remove or alter in any manner any copyright, trademark or other proprietary notices contained in the Technology. + +Permits, Licenses and Compliance with Laws. MA shall be responsible and shall bear all costs for complying with local, state, provincial, federal, national, and international statutes, rules, regulations and ordinances of any kind which related to or affect MA's duties under this Agreement. + +Product Support. MA agrees, when specified, to provide Clients with the support necessary to meet the reasonable needs and requirements for installation and operation of the Technology. + +3 + +Source: CYBERGY HOLDINGS, INC., 10-Q, 5/20/2014 + + + + + +3.7 + +3.8 + +3.9 + +(a) (b) (c) (d) + +3.10 + +3.11 + +3.12 + +Sales Records. MA shall keep accurate records of the sales of the Technology and Maintenance, including Client Registration Cards and shall make these records available for review by a representative of Company within ten (10) business days following the end of each month. + +Sales and Technical Training . MA shall attend initial marketing, application, and technical training as required and provided by Company; provided, however, that Company shall not require MA to market or support Technology according to a marketing plan or system prescribed in substantial part by Company. The MA will however, be responsible to display and explain in detail the methods by which they plan to achieve the assigned quotas. + +Sales Reports. MA shall report periodically in writing, upon request to Company the status of the following: + +Leads provided by Company Marketing activities in progress Sales forecasts Implementations in progress + +MA shall appoint one of its employees to be responsible for such reporting and make the name of such employee available to Company. + +Marketing Plan. MA shall submit an annual marketing plan to Company outlining, among other things, activities and staffing directed at attaining mutually agreed upon annual sales quotas. The Annual Quota is defined in Schedule A of this Agreement. The annual marketing plan shall be devised solely by MA and MA shall not be required to follow an operating plan, standard procedure, training manual, or its substantial equivalent, published by Company. + +Business Practices. Company shall not specify the business practices of MA, nor regulate the manner in which MA shall operate its business, provided that MA (a) conducts business in a manner that reflects favorably at all times on the Technology sold and the good name, goodwill and reputation of Company and its affiliates; (b) avoid deceptive, misleading or unethical practices that are or might be detrimental to Company and/or its Affiliates, the Technology or the public, including but not limited to disparagement of Company or the Technology; (c) make no false or misleading representation with respect to Company or the Technology; and (d) make no representations with respect to Company or the Technology that are inconsistent with any applicable license agreement(s) for the Technology provided by Company, promotional materials and other literature distributed by Company pertaining specifically to the Technology, including all liability limitations and disclaimers contained in such materials. + +Support and Service Centers. MA may be required to establish and maintain Support Services in the Territory set forth in Schedule A to provide marketing, sales and service support of the Technology licensed from Company. + +4 + +Source: CYBERGY HOLDINGS, INC., 10-Q, 5/20/2014 + + + + + +4. + +4.1 + +4.2 + +(a) + +(b) + +(c) + +(d) + +(e) + +4.3 + +4.4 + +4.5 + +5. + +Duties of Company. + +Commitment. So long as MA is not in default hereunder, Company agrees to provide Technology to MA in accordance with the terms and conditions of this Agreement. + +Deliverables. Upon the request of MA, Company shall at prices or fees then in effect or mutually agreed upon by the parties: + +Provide Technology to MA at the discounted prices shown in Schedule A, subject to Company's right to change its prices or fees pursuant to paragraph 13 of this Agreement. + +Make available a reasonable marketing information, demonstrations and other sales/marketing aids available from Company relating to the Technology to MA shown in Schedule A. + +Make available marketing training and support to MA relating to the Technology in Schedule A. + +Make available technical training and support to MA relating to the Technology in Schedule A. + +Make available updates of the Technology to MA as they may become available for distribution. + +No Control. Company shall not require that MA be limited as to the type, quantity or quality of any product or service that MA sells or desires to sell. + +No Resale Limitations. Unless otherwise stated in this Agreement, Company shall not require that MA be limited to the persons or accounts to which it may market, distribute or sublicense any product or service that MA sells or desires to sell, including without limitation, the Technology, within the Territory as defined in Schedule A of this Agreement. + +No Procedures. Company shall not require procedures for which MA may deal with Clients however will require reasonable levels of satisfaction from the clients related to the services provided by the MA. + +Annual Quota. + +The Annual Quota for MA shall be defined in Schedule A of this Agreement. Company reserves the right to adjust or modify the Annual Quota upon renewal of this Agreement or from time to time by mutual agreement of the parties. + +5 + +Source: CYBERGY HOLDINGS, INC., 10-Q, 5/20/2014 + + + + + +6. + +7. + +7.1 + +7.2 + +7.3 + +7.4 + +7.5 + +7.6 + +8. + +8.1 + +8.2 + +Territory. + +The Territory for MA shall be defined in Schedule A of this Agreement. Company reserves the right to adjust or modify the Territory upon renewal of this Agreement or from time to time by mutual agreement of the parties. + +Payment and Deliveries. + +Payment Terms. When fees are not collected directly from the corporate user, MA agrees to pay Company, in the manner and at the time specified below, the fee(s) on Company's current price list in effect at the time an order is received by Company as set forth in Schedule A. + +Currency. All monies due Company shall be remitted in United States dollars. Amounts due to Company are to be calculated based upon the information contained in Schedule A of this agreement. + +Required Documents. MA shall make payment for all Technology according to the terms in Schedule A of this Agreement, and provide upon resale of any part of the Technology, two (2) signed copies of the Company License Agreement/Client Registration Card between Company and Client. + +Payment for Services, Training and Support. Services, training and support, when applicable and provided by Company, shall be paid for by MA according to agreed upon terms, and a monthly billing report will be created for MA by Company to show utilization of time and charges. A LATE PAYMENT CHARGE of one and one-half percent (1 ½%) or the maximum rate permitted by applicable law, whichever is less, of the outstanding balance due to Company per month will be imposed on all overdue accounts. + +Shipment and Delivery. Any materials shall be shipped FOB Company's place of business as set forth in Schedule A, and MA shall be responsible for any excise, sales and other taxes which may be levied on the license and shipment of such materials. + +Delays. In the event of any cause beyond the control of Company, Company shall not be liable for any delay in shipment or non-delivery of the Technology covered under this Agreement beyond any amounts received with an order. + +Modifications and Version Upgrades. + +Company shall supply MA access to all major published modifications or upgrades to the Technology, which add enhancements to or correct known errors in the Technology. + +Company shall provide Technology access to MA for each licensed customer so long as MA is not in default with any terms of this Agreement. + +6 + +Source: CYBERGY HOLDINGS, INC., 10-Q, 5/20/2014 + + + + + +8.3 + +8.4 + +9. + +10. + +MA shall notify Company in writing of any errors found by it in the Technology within thirty (30) days of such discovery. + +Company will undertake all reasonable efforts to provide technical assistance to MA under this Agreement when MA is unable to resolve certain technical issues and to rectify or provide solutions to problems where the Technology does not function as described in the Technology documentation, but Company does not guarantee that the problems will be solved or that any item will be error-free. This product support commitment is only applicable to Company's Technology running under the certified environments specified in the release notes of the end user licensing agreement for that Technology or Package. Company may from time to time, however, discontinue Technology or versions and stop supporting Technology or versions one year after discontinuance, or otherwise discontinue any support service. Company is not liable for incidental, special or consequential damages for any reason (including loss of data or other business or property damage), even if foreseeable or if MA or Customer has advised of such a claim. Company's liability shall not exceed the fees that MA has paid under this Agreement. MA agrees that the pricing for the services would be substantially higher but for these limitations. + +Trademarks and Service Marks. + +Any tradenames, trademarks or service marks, which Company may obtain with regard to the Technology, are the sole property of Company and/or its Affiliates. Company hereby grants MA, during the term of this Agreement, the right to use Company and/or Company trade names, trademarks or service marks on Technology or in advertising or promotion relating directly to these products. Any use of such tradenames, trademarks or service marks must reference that these tradenames, trademarks or service marks are proprietary to Company and/or its Affiliates. + +Title to the Technology. + +MA acknowledges that MA and its Clients receive no title to the Technology contained on the Technology. Title to the Technology and all copyrights in Technology shall remain with Company and/or its Affiliates. + +Company agrees to defend or, at its option, settle any claim or action against MA to the extent arising from a third party claim that a permitted use of the Technology by the end users infringes any U.S. patent or copyright, provided Company has control of such defense or settlement negotiations and MA gives Company prompt notice of any such claim and provides reasonable assistance in its defense. In the event of such a claim of infringement, Company, at its option, may provide MA with substitute Technology reasonably satisfactory to MA to replace those affected Technologies then in MA's inventory. Company will not be liable under this Section if the infringement arises out of MA's activities after Company has notified MA that Company believes in good faith that MA's activities will result in such infringement. The foregoing states the entire liability of Company with respect to infringement of intellectual property rights. + +7 + +Source: CYBERGY HOLDINGS, INC., 10-Q, 5/20/2014 + + + + + +11. + +12. + +12.1 + +12.2 + +12.3 + +13. + +14. + +Distribution by MA. + +MA agrees to distribute Technology only through the Company License Agreement/Client Registration Card between the Client and Company. MA acknowledges that the Company License Agreement/ Client Registration Card specifies the terms under which a Client receives, holds and uses the Package or Service. + +Trade Secrets and Source Code. + +MA recognizes that the Technology in source form (code or listing) is the exclusive property of Company and/or its Affiliates and is proprietary to and the trade secret of Company and/or its Affiliates. MA agrees that it shall not, by itself or in association with any other party, reproduce, duplicate, copy, decompile, disassemble or reverse engineer the Technology in source form (code or listing) in any media. + +MA shall further hold in confidence and shall not disclose any information, algorithms, methods, designs, specifications, and/or know-how in any way relating to the Technology in source form (code or listing) to any other person, firm or corporation whether during the term of this Agreement or after such Agreement has been terminated. + +MA shall not have the right to modify the source code to make adaptations to the Technology in conjunction with the sale of the Technology without the written consent of Company. In the event of modified source code, only the modified portion of the code becomes the property of MA, and MA shall treat the modified source code with the same care as with Company source code. + +Price Changes and Notification. + +Company reserves the right to change its process and/or fees, from time to time, in its sole and absolute discretion. In the event of a price and/or fee change for Technology, Company shall notify MA in writing ninety (90) days prior to the effective date of any such change. All other prices and/or fees may be adjusted without prior notice to MA. + +Relationship of the Parties. + +MA shall be deemed to be an independent contractor in its relationship with Company. MA shall not hold itself out as an employee or agent of Company other than for the limited purposes of marketing the Technology. No debts or obligations shall be incurred by either party in the other party's name, including execution of the Client Registration Agreements. MA shall have the right to perform certain services for its Clients, such as training, installation and non-contract support and bill its Clients directly for such services. MA specifically understand and agrees that it shall not be treated as an employee with respect to such services as are performed for any applicable tax purposes; and it is further agreed that this Agreement shall not bring MA under the provisions of any local, state, provincial, federal, national, and international regulation wherein coverage thereunder is based upon the relationship of employer and employee. + +8 + +Source: CYBERGY HOLDINGS, INC., 10-Q, 5/20/2014 + + + + + +15. + +16. + +16.1 + +16.2 + +16.3 + +16.4 + +16.5 + +Unauthorized Use. + +MA shall notify Company promptly of any misuse of unauthorized use of the Technology, which comes to the attention of MA, and shall notify its Clients upon the request of Company when Company believes such Technology are being misused. MA shall cooperate, at Company's reasonable expense, with Company in any action, including any legal action, which Company may feel is necessary in order to protect the Technology. + +Warranties by Company. + +EXCEPT AS EXCLUSIVELY SET FORTH IN THIS PARAGRAPH, COMPANY DOES NOT MAKE ANY EXPRESS OR IMPLIED WARRANTIES, INCLUDING BUT NOT RESTRICTED TO THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, WHICH WARRANTIES ARE HEREBY DISCLAIMED. + +COMPANY'S SOLE AND EXCLUSIVE LIABILITY FOR THE WARRANTY PROVIDED IN SUBPARAGRAH (A) HEREOF SHALL BE TO CORRECT THE TECHNOLOGY TO OPERATE IN SUBSTANTIAL ACCORDANCE WITH ITS THEN CURRENT SPECIFICATIONS OR REPLACE, AT ITS OPTION, THE TECHNOLOGY NOT IN COMPLIANCE WITH COMPANY'S AND COMPANY' PUBLISHED SPECIFICATIONS REGARDING THE TECHNOLOGY; PROVIDED, ANY CLAIM FOR BREACH OF WARRANTY UNDER SUBPARAGRAPH (A) HEREOF MUST BE MADE IN WRITING WITHIN (90) DAYS FROM DATE OF SHIPMENT. + +IN NO EVENT SHALL COMPANY BE LIABLE TO "MA", ITS CLIENTS, OR ANY THIRD PARTY FOR ANY TORT OR CONTRACT DAMAGES OR INDIRECT, SPECIAL, GENERAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, INCLUDING BUT NOT LIMITED TO, LOSS OF PROFITS OR ANTICIPATED PROFITS AND LOSS OF GOODWILL, ARISING IN CONNECTION WITH THE USE (OR INABILITY TO USE) OR DISTRIBUTION OF THE TECHNOLOGY FOR ANY PURPOSE WHATSOEVER. + +SOME STATES AND/OR COUNTRIES DO NOT ALLOW THE EXCLUSION OF IMPLIED WARRANTIES, SO THE ABOVE EXCLUSION MAY NOT APPLY TO YOU. THIS WARRANTY GIVES YOU SPECIFIC LEGAL RIGHTS, AND YOU MAY HAVE OTHER RIGHTS WIHICH MAY VARY FROM STATE TO STATE OR COUNTRY TO COUNTRY. + +SOME STATES AND/OR COUNTRIES DO NOT ALLOW THE EXCLUSION OR LIMITATION OF INCIDENTAL AND CONSEQUENTIAL DAMAGES, SO THE ABOVE LIMITATION MAY NOT APPLY TO YOU. + +9 + +Source: CYBERGY HOLDINGS, INC., 10-Q, 5/20/2014 + + + + + +17. + +18. + +18.1 + +18.2 + +(a) + +(b) + +(c) + +(d) + +18.3 + +(a) + +(b) + +Warranties by MA. + +MA agrees that any and all warranties made to Client shall be made only by MA. MA acknowledges and agrees that MA will make no representations to its Clients with respect to any warranty made by Company. MA hereby agrees to indemnify and hold Company harmless for any loss, damage, claim or action resulting from MA's failure to comply with any of MA's obligations under this Agreement. MA will be solely responsible for any claims, warranties or representations made by MA or MA's representatives or agents, which differ from the warranties, provided by Company in the applicable end user license agreement(s). Termination. + +This Agreement may be terminated by either party at the expiration of its term or any renewal term upon thirty (30) days written notice to the other party. Company acknowledges that this Agreement shall not be terminated for MA's failure to follow an operating plan, standard procedure, training manual, or substantial equivalent published in Paragraph 3 (k) of this Agreement, except that Company does reserve the right to terminate this Agreement for MA's failure to follow required procedures relating to the processing of sales contracts, invoices and billing related to Technology sold under this Agreement. + +Either party may cancel this Agreement upon the occurrence of any of the following: + +Material breach of any covenant, term, condition or other provisions of this Agreement, which breach is not remedied within ten (10) days after notice of such breach is received by the breaching party; + +Bankruptcy, reorganization, arrangement or insolvency proceedings being instituted by or against a party; + +An assignment by a party for the benefit of its creditors; + +Consenting to the appointment of a trustee or receiver by a party, or a trustee or receiver being appointed for a party or for a substantial part of its assets. + +Upon termination or cancellation of this Agreement for any reason: + +All obligations of the non-breaching party, should cancellation be due to breach, shall immediately cease; + +MA shall return any and all full and/or partial copies of material related to the Technology, including demonstrations of the Technology, in MA's possession or under its control to Company within ten (10) days following the termination or cancellation date of this Agreement; + +10 + +Source: CYBERGY HOLDINGS, INC., 10-Q, 5/20/2014 + + + + + +(c) + +(d) + +(e) + +(f) + +(g) + +19. + +19.1 + +MA shall not continue to use or employ any part of the Technology as part of any product which MA shall convey, assign, lease, license or transfer to any third parties; + +MA shall immediately cease advertising, marketing, promoting and distributing the Technology and shall cease using the trade names, trademarks, service marks and any other proprietary right of Company; + +Except as otherwise permitted in writing by Company, MA shall immediately cease selling Annual Technology Maintenance and providing application and technical support for the Technology to Clients; + +All outstanding invoices shall immediately become due and payable; and + +MA acknowledges and agrees that, in the event of a breach or threatened breach by MA, of the provisions of this Section 18, no adequate remedy at law in money damages will be available to Company that will fairly compensate it and therefore Company will be entitled to an injunction against any such breach or threatened breach by MA. + +Confidential Information. + +"Confidential Information" Defined. "Confidential Information" includes: (a) the Technology (b) any personally identifiable data or information regarding any end user; (c) any and all information disclosed by Company to MA, in whatever format, that is either identified as or would reasonably be understood to be confidential and/or proprietary; (d) any notes, extracts, analyses or materials prepared by MA which are copies of or derivative works of Confidential Information or from which Confidential Information can be inferred or otherwise understood; and (e) the terms and conditions of this Agreement. "Confidential Information" does not include information received from Company that MA can clearly establish by written evidence: (x) is or becomes known to MA from a third party without an obligation to maintain its confidentiality; (y) is or becomes generally known to the public through no act or omission of MA; or (z) is independently developed by MA without the use of Confidential Information. + +11 + +Source: CYBERGY HOLDINGS, INC., 10-Q, 5/20/2014 + + + + + +19.2 + +19.3 + +20. + +21. + +22. + +"MA"'s Obligations. MA will make no use of Confidential Information for any purpose except as expressly authorized by this Agreement. Except as expressly provided in this Agreement, MA will not disclose Confidential Information to any third party and will protect and treat all Confidential Information with the same degree of care as it uses to protect its own confidential information of like importance, but in no event with less than reasonable care. Except as expressly provided in this Agreement, MA will not use, make or have made any copies of Confidential Information, in whole or in part, without the prior written authorization of Company. In the event that MA is required to disclose Confidential Information pursuant to law, MA will notify Company of the required disclosure with sufficient time for Company to seek relief, will cooperate with Company in taking appropriate protective measures, and will make such disclosure in a fashion that maximizes protection of the Confidential Information from further disclosure. + +Privacy/Data Collection. MA will at all times during the term of this Agreement maintain appropriate technical and organizational measures to protect any end-user data that it collects, accesses or processes in connection with this Agreement against unauthorized or unlawful use, disclosure, processing or alteration. MA will act only on Company's instructions in relation to the collection, use, disclosure and processing of any such end-user data, but in all instances in accordance with all applicable laws, rules and regulations. + +Non-assignment. + +MA may not assign, sell, lease or otherwise transfer in whole or in party any of the rights granted pursuant to this Agreement without prior written approval of Company. + +Amendment. + +No amendment, change or variance from this Agreement shall be binding upon either party unless executed in writing and signed by an authorized representative of the party to be charged. + +Severability and Construction. + +Should any part of this Agreement, for any reason, be declared invalid by a court of competent jurisdiction, such determination shall be not affect the validity of any remaining portion, and such remaining portion shall remain in force and effect as if this Agreement had been executed with the invalid portion eliminated. + +12 + +Source: CYBERGY HOLDINGS, INC., 10-Q, 5/20/2014 + + + + + +23. + +24. + +25. + +26. + +Notices. + +Any notice required under this Agreement shall be deemed to have been given when hand- delivered or on the date of mailing when mailed by standard Mail, postage prepaid, and addressed to the party to receive such notice at the address designated below, or such other address as the party may from time to time direct in writing. + +Governing Law; Attorney's Fee. + +This Agreement is accepted by Company in the State of Nevada and shall be governed by and construed in accordance with the laws thereof, which laws shall prevail in the event of any conflict. For such limited purpose, MA hereby consents to the personal jurisdiction of any court of competent jurisdiction in the State of Nevada. If any legal action or proceeding is initiated, the prevailing party shall be entitled to all attorney fees, court costs, and expenses in addition to any other relief to which such prevailing party may be entitled. + +Equitable Relief. + +MA acknowledges that any breach or threatened breach of this Agreement involving an unauthorized use of Confidential Information or Company and/or its Affiliate's intellectual property will result in irreparable harm to Company and/or its Affiliate for which damages would not be an adequate remedy, and therefore, in addition to its rights and remedies otherwise available at law, Company and/or its Affiliate will be entitled to seek injunctive or other equitable relief, as appropriate, and MA hereby waives the right to require Company and/or its Affiliate to post a bond. If Company and/or its Affiliate seeks injunctive or other equitable relief in the event of a breach or threatened breach of this Agreement by MA involving an unauthorized use of Confidential Information or Company and/or its Affiliate intellectual property, MA agrees that it will not allege in any such proceeding that Company and/or its Affiliate remedy at law is adequate. If Company and/or its Affiliate seek any equitable remedies, it will not be precluded or prevented from seeking remedies at law, nor will Company and/or its Affiliate be deemed to have made an election of remedies. + +Entire Agreement. + +This Agreement contains the entire agreement between the parties, and no representations, statements or inducements, oral or written, not contained herein, shall be binding upon the parties. Company expressly disclaims the making of, and MA acknowledges that it has not received a warranty or guaranty, express or implied, as to the potential volume, profits or success of the business venture contemplated by this Agreement. + +13 + +Source: CYBERGY HOLDINGS, INC., 10-Q, 5/20/2014 + + + + + +COMPANY + +BIRCH FIRST INVESTMENTS INC. A US Virgin Islands corporation + +By: /s/ Pier S. Bjorklund Pier S. Bjorklund, President + +This Agreement was executed as of the date set forth above. + +MA + +MOUNT KNOWLEDGE HOLDINGS INC. A Nevada corporation + +By: /s/ James D. Beatty James D. Beatty, CEO and President + +14 + +Source: CYBERGY HOLDINGS, INC., 10-Q, 5/20/2014 + + + + + +1. + +Note 1: + +Note 2: + +Note 3: + +Note 4: + +Note 5: + +Note 6: + +2. + +(a) + +SCHEDULE A + +MARKETING AFFILIATE Technology PRICING AND TERMS + +Technology PRICING AND TERMS MATRIX. + +MA PURCHASE + +LEVEL1 + +MA QUOTA (UNITS OR + +Dollars)2 + +MA PURCHASE + +DISCOUNT3 + +III $1,000,001 and above 25% + +II $100,001 to $1,000,000 20% + +I $ 0 to $100,000 15% + +PURCHASE LEVEL - refers to level of purchased Technology on an annual basis, subject to annual review of the past twelve months following the anniversary date of this Agreement. + +PURCHASE QUOTA - refers to certain purchase amount levels in which MA may receive additional discounts, subject to additional terms and conditions. + +PURCHASE DISCOUNT - refers to the applicable discount available to MA purchases made from Company at Levels II and III with Level I being the original purchase price per Unit (or Package) amount for the Technology which MA pays Company. + +INITIAL ORDER COMMITMENT - MA commits to purchase a minimum of 100 Units in aggregate within the Territory within the first six months of term of this Agreement. + +SALES PERSONS - MA shall at all times have certified sales persons trained by Company on staff in accordance with certain minimums defined by each Purchase Level. + +SUPPORT PERSONS - MA shall at all times have certified support persons trained by Company on staff in accordance with certain minimums defined by each Purchase Level. + +Technology DESCRIPTION AND PRICING. + +The Products approved for sale in this Agreement shall be referred to as "ECO" related platform and content. ("Technology") referred to as: + +English Communications Online (ECO) ™ + +15 + +Source: CYBERGY HOLDINGS, INC., 10-Q, 5/20/2014 + + + + + +(a) + +3. + +4. + +5. + +(a) + +List Pricing for Technology shall be as follows: + +(Price List for products and or services) + +SERVICE FEE. + +Upon the execution of this Agreement, MA shall pay to Company a quarterly service fee (the "Service Fee") in the amount equal to US $15,000.00 on the first day of each quarter for the Term of this Agreement as set forth in Section 1 hereinabove, for each month that MA has no sales pursuant to this Schedule A, with the first payment due and payable on the date of execution of this Agreement. + +TERMS. + +Unless otherwise approved by Company, Level I, II and III terms for payment to Company are Net 30 days on Technology licensed from Company. + +TERRITORY. + +MA is authorized to resell Technology within the following territory according to the terms of the Agreement: + +Worldwide + +16 + +Source: CYBERGY HOLDINGS, INC., 10-Q, 5/20/2014 +Cc \ No newline at end of file diff --git a/full_contract_txt/CytodynInc_20200109_10-Q_EX-10.5_11941634_EX-10.5_License Agreement.txt b/full_contract_txt/CytodynInc_20200109_10-Q_EX-10.5_11941634_EX-10.5_License Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..16d88fa0ab2e1657179d1b5f7a19833d03569207 --- /dev/null +++ b/full_contract_txt/CytodynInc_20200109_10-Q_EX-10.5_11941634_EX-10.5_License Agreement.txt @@ -0,0 +1,873 @@ +Exhibit 10.5 + +Certain identified information has been excluded because it is both not material and would likely cause competitive harm if publicly disclosed. + +COMMERCIALIZATION AND LICENSE AGREEMENT + +This Commercialization and License Agreement (this "Agreement") is made effective as of December 17, 2019 (the "Effective Date") by and between Vyera Pharmaceuticals, LLC, a Delaware limited liability company ("Vyera"), and CytoDyn Inc., a Delaware corporation ("CytoDyn"). CytoDyn and Vyera are sometimes referred to herein individually as a "Party" and collectively as the "Parties." + +RECITALS + +WHEREAS, Vyera is a pharmaceutical company engaged in the commercialization of products useful in the amelioration, treatment or prevention of certain human diseases and conditions. + +WHEREAS, CytoDyn has developed leronlimab (PRO 140), an anti-CCR5 humanized monoclonal antibody and is pursuing the clinical development of its PRO 140 drug candidate for the treatment of multi-drug resistant Human Immunodeficiency Virus ("HIV") infection, as well as related HIV infection indications. + +WHEREAS, the Parties desire that, upon regulatory approval of PRO 140 for the Initial Indication (as defined below), Vyera will Commercialize (as defined below) Licensed Products (as defined below) in the Field (as defined below) in the Territory (as defined below), all in accordance with the terms and conditions of this Agreement. + +NOW, THEREFORE, in consideration of the foregoing and the premises and conditions set forth herein, the Parties agree as follows: + +ARTICLE 1 DEFINITIONS + +1.1 "AAA" has the meaning set forth in Section 12.3(a). + +1.2 "AAI Agreement" has the meaning set forth in Section 9.2(o). + +1.3 "Affiliate" means, with respect to a particular Party, a Person that controls, is controlled by or is under common control with such Party. For the purposes of this definition, the word "control" (including, with correlative meaning, the terms "controlled by" or "under the common control with") means the actual power, either directly or indirectly through one (1) or more intermediaries, to direct or cause the direction of the management and policies of such entity, whether by the ownership of fifty percent (50%) or more of the voting stock of such entity, by contract or otherwise. + +1.4 "AGC Agreement" has the meaning set forth in Section 9.2(o). + +1.5 "Agreement" has the meaning set forth in the introductory paragraph. + +1.6 "Alliance Manager" means, with respect to each Party, the person appointed by such Party from within its organization to coordinate and facilitate the communication, interaction and cooperation of the Parties pursuant to this Agreement. The Alliance Managers shall be the primary contacts between the Parties with respect to the activities conducted pursuant to this Agreement. + +1.7 "Annual WAC" means the annual wholesale acquisition cost for the Licensed Product. + +Source: CYTODYN INC., 10-Q, 1/9/2020 + + + + + +1.8 "API" means an active pharmaceutical ingredient, whether produced from a living organism or through synthetic process (i.e., any substance intended to be used in the manufacture of a drug product and that is intended to furnish pharmacological activity in the cure, treatment or prevention of disease). + +1.9 "Applicable Law" means all applicable statutes, ordinances, regulations, rules, or orders of any kind whatsoever of any Governmental Authority, including, without limitation, the FDCA, Prescription Drug Marketing Act, the Generic Drug Enforcement Act of 1992 (21 U.S.C. §335a et seq.), U.S. Patent Act (35 U.S.C. §1 et seq.), Federal Civil False Claims Act (31 U.S.C. §3729 et seq.), and Anti-Kickback Statute (42 U.S.C. §1320a-7b et seq.), all as amended from time to time, together with any rules, regulations, and compliance guidance promulgated thereunder. + +1.10 "Arbitration Request" has the meaning set forth in Section 12.3(b). + +1.11 "Bankruptcy Laws" has the meaning set forth in Section 11.6(b). + +1.12 "Biosimilar Competitor" means, with respect to the Licensed Product, a drug or biological product that has been determined by the FDA to be therapeutically equivalent to the Licensed Product, such that it may be substituted by a pharmacist for the Licensed Product in the Field in the Territory without the need for such pharmacist to seek authorization from the physician that prescribed the Licensed Product. + +1.13 "Biosimilar Entry Date" means the first day of the first Calendar Quarter that occurs after Biosimilar Competitor(s) have achieved at least [***] in the Field in the Territory. + +1.14 "BLA" means a Biologics License Application (as defined in the FDCA), including all supplements, amendments, variations, extensions and renewals thereof. + +1.15 "Breaching Party" has the meaning set forth in Section 11.4. + +1.16 "Business Day" means a day other than Saturday, Sunday or any other day on which commercial banks located in the State of New York or the State of Washington, U.S., are authorized or obligated by Applicable Law to close. + +1.17 "Calendar Quarter" means the respective periods of three (3) consecutive calendar months ending on March 31, June 30, September 30 and December 31; provided, however, that (a) the first Calendar Quarter of the Term shall extend from the Effective Date to the end of the first complete Calendar Quarter thereafter; and (b) the last Calendar Quarter of the Term shall end upon the expiration or termination of this Agreement. + +1.18 "Calendar Year" means the twelve-month period ending on December 31; provided, however, that (a) the first Calendar Year of the Term shall begin on the Effective Date and end on December 31, 2019; and (b) the last Calendar Year of the Term shall end on the effective date of expiration or termination of this Agreement. + +1.19 "Change of Control" means, with respect to Vyera, (a) the sale of all or substantially all of its assets; (b) any merger, consolidation or acquisition of Vyera, by or into another Person; and/or (c) any change in the ownership of more than fifty percent (50%) of the voting capital stock of Vyera or its direct or indirect parent entities, other than: (i) transactions involving solely Vyera (or an Affiliate, as applicable) and/or one or more Affiliates, on the one hand, and one or more of Vyera's (or an Affiliate's, as applicable) Affiliates, on the other hand, and/or (ii) transactions in which the stockholders of Vyera (or an Affiliate, as applicable) immediately prior to such transaction hold at least fifty percent (50%) of the voting power of the surviving company or ultimate parent company of the surviving company; in each of clauses (a)-(c), in one or more related transactions. + +Source: CYTODYN INC., 10-Q, 1/9/2020 + + + + + +1.20 "Claim" has the meaning set forth in Section 13.1. + +1.21 "Clinical Trial" means any human clinical study or trial of a Licensed Product in the Field in the Territory. + +1.22 "Combination Product" means a product that is Commercialized by Vyera and/or its Affiliates under this Agreement and that comprises, consists of, or incorporates two or more APIs (whether administered together or separately), which includes leronlimab as one of the APIs together with one or more additional APIs that: (a) are not leronlimab; and (b) are not proprietary to CytoDyn, regardless of the formulation or mode of administration of such Combination Product. For the sake of clarity, a Combination Product is a Licensed Product. + +1.23 "Commercial Failure" means that Vyera fails to achieve aggregate [***]. + +1.24 "Commercialization" means any and all pre-launch, launch and post-launch activities related to the marketing, promoting, distributing (to Third Parties), offering for sale and selling a Licensed Product in the Field in the Territory. For clarity, Commercialization does not include Development and/or Manufacturing of a Licensed Product. When used as a verb, "Commercialize" means to engage in Commercialization. + +1.25 "Commercialization Plan" has the meaning set forth in Section 5.2. + +1.26 "Commercially Reasonable Efforts" means: (a) with respect to the efforts to be expended, or considerations to be undertaken, by a Party or its Affiliate with respect to any objective, activity or decision to be undertaken hereunder, reasonable, good faith efforts to accomplish such objective, activity or decision as such Party would normally use to accomplish a similar objective, activity or decision under similar circumstances; and (b) with respect to Development and Commercialization of any Licensed Product for any indication by a Party, efforts and resources consistent with those efforts and resources commonly used by a similarly situated biotechnology company with respect to a product owned by it or to which it has similar rights, which product is at a similar stage in its development or product life and is of similar market potential taking into account (i) the patent and other proprietary position of the Licensed Product and (ii) the anticipated profitability of the Licensed Product. + +1.27 "Competitive Product" means any product for the treatment or prevention of [***], leronlimab that is not a Licensed Product. + +1.28 "Confidential Information" means, subject to Article 10, all non-public or proprietary information not otherwise included in Know-How disclosed by either Party to the other Party in connection with the activities contemplated by this Agreement, which may include ideas, inventions, discoveries, concepts, compounds, compositions, formulations, formulas, practices, procedures, processes, methods, knowledge, know-how, trade secrets, technology, inventories, machines, techniques, development, designs, drawings, computer programs, knowledge, skill, experience, documents, apparatus, results, clinical and regulatory strategies, Regulatory Documentation, and submissions pertaining to, or made in association with, filings with any Governmental Authority, data, including pharmacological, toxicological and clinical data, analytical and quality control data, manufacturing data and descriptions, patent and legal data, market data, financial data or descriptions, devices, assays, chemical formulations, specifications, material, product samples and other samples, physical, chemical and biological materials and compounds and information related to such materials and compounds, and any modifications, improvements, designs, and recipes without regard as to whether any of the foregoing is marked "confidential" or "proprietary," or disclosed in oral, written, graphic, or electronic form. Confidential Information shall include the terms and conditions of this Agreement. + +Source: CYTODYN INC., 10-Q, 1/9/2020 + + + + + +1.29 "Control" or "Controlled" means, with respect to any Know-How, Patent or other intellectual property right, possession (including ownership) by a Party, including its Affiliates, of the ability (without taking into account any rights granted by a Party to the other Party under the terms of this Agreement) to grant access, a license or a sublicense to such Know-How, Patent or other intellectual property right without violating the terms of any agreement or other arrangement with, or necessitating the consent of, any Third Party, at such time that the Party would be first required under this Agreement to grant the other Party such access, license or sublicense. + +1.30 "Cost of Goods" means the amount paid to CytoDyn by Vyera for the supply of Licensed Products under the Supply Agreement (net of any mark-up applied under the Supply Agreement). The Cost of Goods shall be the Cost of Manufacture of Licensed Products manufactured by CytoDyn (if applicable) or the amount actually paid by CytoDyn to a Third Party for the Manufacture and supply of such Licensed Products. + +1.31 "Cost of Manufacture" [***]. + +1.32 "Cover", "Covering" or "Covered" means, with respect to a product, technology, process or method, that, in the absence of ownership of, or a license granted under, a Valid Claim, the practice or Commercialization of such product, technology, process or method would infringe such Valid Claim (or, in the case of a Valid Claim that has not yet issued, would infringe such Valid Claim if it were to issue in its then current form or in a substantially similar version). + +1.33 "Cure Period" has the meaning set forth in Section 11.4. + +1.34 "CytoDyn" has the meaning set forth in the introductory paragraph. + +1.35 "CytoDyn Indemnitee" has the meaning set forth in Section 13.1. + +1.36 "CytoDyn Know-How" means any and all Know-How Controlled by CytoDyn either or both as of the Effective Date or during the Term that is necessary or useful to Commercialize any Licensed Product in the Field in the Territory. + +1.37 "CytoDyn Patents" means any and all Patents Controlled by CytoDyn either or both as of the Effective Date or during the Term that claim any CytoDyn Know-How or Inventions. The CytoDyn Patents as of the Effective Date include those set forth on Attachment A. CytoDyn may update Attachment A from time to time to remove reference to expired Patents and to include reference to additional Patents. + +1.38 "CytoDyn Reserved Dispute" has the meaning set forth in Section 12.4. + +1.39 "Develop" or "Development" means all research and non-clinical and clinical drug development activities, including toxicology, pharmacology, and other non-clinical efforts, statistical analysis, formulation development, delivery system development, the performance of Clinical Trials, including the Manufacturing, as applicable, of the Licensed Product for use in research and Clinical Trials, or other activities reasonably necessary in order to obtain and maintain Regulatory Approval of Licensed Products in the Field in the Territory. When used as a verb, "Develop" means to engage in Development activities. + +Source: CYTODYN INC., 10-Q, 1/9/2020 + + + + + +1.40 "Development Plan" means the Development Plan attached hereto as Attachment B, as it may be amended in accordance with Section 4.3. + +1.41 "Disclosing Party" has the meaning set forth in Section 10.1. + +1.42 "Disposition Period" has the meaning set forth in Section 2.6. + +1.43 "Dispute" has the meaning set forth in Section 12.1. + +1.44 "Effective Date" has the meaning set forth in the introductory paragraph. + +1.45 "Equity Investment" has the meaning set forth in Section 8.13. + +1.46 "Existing Licenses" has the meaning set forth in Section 9.2(b). + +1.47 "FDA" means the U.S. Food and Drug Administration and any successor agency(ies) or authority having substantially the same function. + +1.48 "FDCA" means the United States Federal Food, Drug and Cosmetic Act of 1938 (21 U.S.C. §301 et seq.) and applicable regulations promulgated thereunder, as amended from time to time. + +1.49 "Field" means the treatment of HIV in humans. + +1.50 "Financial Statements" means (a) the audited consolidated balance sheet of Vyera's parent company, Phoenixus AG and its subsidiaries, for the fiscal year ended December 31, 2018, and the related consolidated statement of operations, shareholders' equity and cash flows for the fiscal year then ended, and (b) the unaudited consolidated balance sheet of Phoenixus AG for the eight (8) months ended August 31, 2019, and the related consolidated profit and loss statements for the eight (8) months then ended. + +1.51 "First Commercial Sale" means, with respect to a Licensed Product, the first sale of such Licensed Product to a Third Party by Vyera or its Affiliates after Regulatory Approval of such Licensed Product has been obtained. Sales for test marketing, sampling and promotional uses, compassionate or similar use shall not constitute a First Commercial Sale unless such sale results in a Net Sale. + +1.52 [***]. + +1.53 "Force Majeure" means any event beyond the reasonable control of the affected Party that materially affects the Party's performance of its obligations, except payment obligations, under this Agreement, including embargoes; war or acts of war, including terrorism; insurrections, riots, or civil unrest; strikes, lockouts or other labor disturbances; epidemics, fire, floods, earthquakes, tsunamis, hurricanes or other acts of nature; or acts, omissions or delays in acting by any Governmental Authority (including the refusal of the competent Governmental Authorities to issue required Regulatory Approvals due to reasons other than the affected Party's negligence or willful misconduct or any other cause within the reasonable control of the affected Party) and failure of plant or machinery (provided that such event or failure could not have been prevented by the exercise of skill, diligence, and prudence that would be reasonably and ordinarily expected from a skilled and experienced person engaged in the same type of undertaking under the same or similar circumstances). + +1.54 "GAAP" means generally accepted accounting principles current in the U.S. + +Source: CYTODYN INC., 10-Q, 1/9/2020 + + + + + +1.55 "GCP" means the then-current standards, practices and procedures promulgated or endorsed by the FDA as set forth in the guideline adopted by the International Conference on Harmonization ("ICH"), titled "Guidance for Industry E6 Good Clinical Practice: Consolidated Guidance," (or any successor document) including related regulatory requirements imposed by the FDA, as they may be updated from time to time. + +1.56 "GLP" means the then-current standards, practices and procedures promulgated or endorsed by the FDA as set forth in 21 C.F.R. Part 58 (or any successor statute or regulation), including related regulatory requirements imposed by the FDA, as they may be updated from time to time, including applicable guidelines promulgated under the ICH. + +1.57 "GMP" means the then-current good manufacturing practices required by the FDA, as set forth in the FDCA, as amended, and the regulations promulgated thereunder, for the manufacture and testing of pharmaceutical materials. + +1.58 "Governmental Authority" means any multi-national, national, federal, state, local, municipal or other government authority of any nature (including any governmental division, subdivision, department, instrumentality, agency, bureau, branch, office, commission, council, court or other tribunal). + +1.59 "HIV" has the meaning set forth in the Recitals to this Agreement. + +1.60 "Indemnifying Party" has the meaning set forth in Section 13.3(a). + +1.61 "Indemnitee" has the meaning set forth in Section 13.3(a). + +1.62 "Initial Indication" means use in combination with other antiretroviral agents for treatment experienced HIV-1 patients infected exclusively by CCR5- tropic virus, who are failing their current regimen and have documented multi-antiretroviral class resistance to at least one ART drug within 3 drug classes (or within 2 drug classes with limited treatment options). + +1.63 "Inventions" means any and all inventions, discoveries and developments, whether or not patentable, which are conceived and reduced to practice relating to the Licensed Product in the Field after the Effective Date and arising in the course of activities under this Agreement: (a) solely by one or more employees or consultants of CytoDyn; (b) solely by one or more employees or consultants of Vyera; or (c) jointly by one or more employees or consultants of CytoDyn and one or more employees or consultants of Vyera. To be clear, Inventions, as defined here, does not include CytoDyn Patents that exist as of the Effective Date. + +1.64 "JC" has the meaning set forth in Section 3.1(a). + +1.65 "Know-How" means all non-public or proprietary information now known or hereafter developed and disclosed in connection with the activities contemplated by this Agreement, including information applicable to compounds, formulations, compositions, products or to their manufacture, development, registration, use or commercialization or methods of assaying or testing them or processes for their manufacture, formulations containing them, compositions incorporating or comprising them and including all biological, chemical, pharmacological, biochemical, toxicological, pharmaceutical, physical and analytical, safety, quality control, manufacturing, preclinical and clinical data, instructions, processes, formulae, expertise and information, regulatory filings and copies thereof, relevant to the development, manufacture, use or commercialization of and/or which may be useful in studying, testing, development, production or formulation of products, or intermediates for the synthesis thereof. + +Source: CYTODYN INC., 10-Q, 1/9/2020 + + + + + +1.66 "Knowledge" means, (a) with respect to CytoDyn, the actual knowledge (following due inquiry) of Nader Z. Pourhassan, Michael D. Mulholland, Nitya G. Ray, and Brendan Rae, and (b) with respect to Vyera, the actual knowledge (following due inquiry) of Averill L. Powers, Ruchin Patel, Nicholas J. Pelliccione and Anne K. Kirby. + +1.67 "[***]" has the meaning set forth in [***]. + +1.68 "[***]" has the meaning set forth in [***]. + +1.69 "Liability" or "Liabilities" means losses, damages, fees, costs and other liabilities incurred by a Party related to such Party's performance or conduct, or by virtue of being a "Party", under this Agreement. + +1.70 "Licensed Product" means any pharmaceutical product, including all forms, presentations, strengths, doses and formulations (including any method of delivery), that contains leronlimab (PRO-140) as defined by [***] that CytoDyn is currently evaluating in its clinical development program for the treatment of HIV infection that is Covered by one or more claims of a CytoDyn Patent or CytoDyn Know-How. + +1.71 "Licensed Product Infringement" has the meaning set forth in Section 2.4(a). + +1.72 "Losses" has the meaning set forth in Section 13.1. + +1.73 "Manufacture" means all activities and processes related to the manufacturing of a Licensed Product, or any ingredient thereof, including manufacturing of intermediate and finished Licensed Product for Development and Commercialization, labelling, packaging, handling, warehousing, in- process and finished Licensed Product testing, release of a Licensed Product or any component or ingredient thereof, validation, quality control and quality assurance activities related to manufacturing and release of a Licensed Product and ongoing stability tests and regulatory activities related to any of the foregoing. Where the context so requires, Manufacture shall also include obtaining a Licensed Product from contract manufacturers. When used as a verb, to "Manufacture" means to engage in Manufacturing activities. + +1.74 "Minimum Requirements" means the investments and activities identified as "Minimum Requirements" in a Commercialization Plan. + +1.75 "[***]" has the meaning set forth in [***]. + +1.76 "[***]" has the meaning set forth in [***]. + +1.77 "Net Sales" means, with respect to the Licensed Product, [***] + +Notwithstanding the foregoing, amounts received or invoiced by Vyera or its Affiliates for the sale of such Licensed Product among Vyera or its Affiliates for resale shall not be included in the computation of Net Sales hereunder; instead, the amounts invoiced or received by Vyera or its Affiliates, as applicable, on resale to a Third Party shall be included in the computation of Net Sales. In any event, any amounts received or invoiced by Vyera or its Affiliates shall be accounted for only once. For purposes of determining Net Sales, a Licensed Product shall be deemed to be sold when recorded as a sale by Vyera or its Affiliates in accordance with GAAP. For clarity, a particular deduction may only be accounted for once in the calculation of Net Sales. Net Sales shall exclude any samples of Licensed Product transferred or disposed of at no expense for promotional or educational purposes. + +Source: CYTODYN INC., 10-Q, 1/9/2020 + + + + + +In the event that a Licensed Product is sold as a Combination Product, Net Sales shall be determined as follows: + +(A) where all API(s) in such Combination Product are sold separately in the Territory, Net Sales shall be calculated by multiplying the Net Sales of the Combination Product by the fraction A/(A+B), where A is the weighted (by sales volume) average unit sale price of the Licensed Product, as sold separately in finished form in the Territory, where net sales is calculated in the same manner as Net Sales, and B is the sum of the weighted average unit sale price in the Territory (net sales being calculated in the same manner as Net Sales) of the other API(s) included in the Combination Product when sold separately in finished form at the same dosage levels, in each case during the applicable royalty reporting period, or, if sales of both the Licensed Product and the other API(s) did not occur in the same country in such period, then in the most recent royalty reporting period in which sales of both occurred, provided that such "recent royalty reporting period" shall not have been more than twenty-four (24) months earlier. + +(B) In the event that such weighted average sale price of the Licensed Product component of the Combination Product cannot be determined, but the weighted average sale price of the other API(s) in the Combination Product can be determined, Net Sales shall be calculated by multiplying the Net Sales of the Combination Product by the fraction (C-D)/C, where C is the weighted (by sales volume) average unit sale price of the Combination Product, and D is the sum of the weighted (by sales volume) average unit sales prices charged for the other API(s) in the Combination Product when sold separately in finished form. + +(C) In the event that such weighted average sale price of the other API(s) in the Combination Product cannot be determined, but the weighted average sale price of the Licensed Product component of the Combination Product can be determined, Net Sales shall be calculated by multiplying the Net Sales of the Combination Product by the fraction A/C, where A is the weighted (by sales volume) average unit sales price of such Licensed Product component as sold separately, and C is the weighted (by sales volume) average unit sales price of the Combination Product. + +(D) In the event that neither the weighted average sale price of the Licensed Product nor the weighted average sales price of the other API(s) in the Combination Product can be determined, the Net Sales of the Licensed Product shall be calculated by multiplying the Net Sales of the Combination Product (determined as provided above for Licensed Products) by the fraction D/D+E where D is the fair market value of the portion of the Combination Product that includes the Licensed Product and E is the fair market value of the portion of the Combination Product containing the other API(s) in such Combination Product, and all such fair market values shall be determined in good faith by the Parties. + +In the event either Party reasonably believes that the calculation set forth above does not fairly reflect the value of the Licensed Product, relative to the other API(s) in the Combination Product, the Parties shall negotiate, in good faith, other means of calculating Net Sales with respect to Combination Products to so reflect such value. + +The weighted average sale price for a Licensed Product, any other API(s) used in a Combination Product, or any Combination Product shall be calculated once each Calendar Year, at the beginning of such Calendar Year, and such price shall be used during all applicable royalty reporting periods for such entire Calendar Year. When determining the weighted average sale price of a Licensed Product, other API(s), or Combination Product, the weighted average sale price shall be calculated by dividing the sales dollar (translated into U.S. dollars) by the units of active ingredient sold during the preceding Calendar Year (or the number of months sold in a partial Calendar Year) for the respective Licensed Product, other API(s), or Combination Product. In the initial Calendar Year, a forecasted weighted average sale price will be used for the Licensed Product, other API(s) or Combination Product. + +Source: CYTODYN INC., 10-Q, 1/9/2020 + + + + + +1.78 "Non-Breaching Party" has the meaning set forth in Section 11.4. + +1.79 "Party(ies)" has the meaning set forth in the introductory paragraph. + +1.80 "Patents" means all: (a) patents, including any utility or design patent; (b) patent applications, including provisionals, substitutions, divisionals, continuations, continuations in-part or renewals; (c) patents of addition, restorations, extensions, supplementary protection certificates, registration or confirmation patents, patents resulting from post-grant proceedings, re-issues and re-examinations; (d) other patents or patent applications claiming priority directly or indirectly to: (i) any such specified patent or patent application specified in (a) through (c), or (ii) any patent or patent application from which a patent or patent application specified in (a) through (c) claim direct or indirect priority; (e) inventor's certificates; (f) other rights issued from a Governmental Authority similar to any of the foregoing; and (g) in each of (a) through (f), whether such patent, patent application or other right arises in the Territory. + +1.81 "Payments" has the meaning set forth in Section 8.10. + +1.82 "Person" means an individual, sole proprietorship, partnership, limited partnership, limited liability partnership, corporation, limited liability company, business trust, joint stock company, trust, incorporated association, joint venture or similar entity or organization, including a government or political subdivision, department or agency of a government. + +1.83 "Pharmacovigilance Agreement" means the safety data exchange agreement that the Parties will use their Commercially Reasonable Efforts to agree and enter into within ninety (90) days after the Effective Date. + +1.84 "Promotional Materials" means all training materials and all written, printed, graphic, electronic, audio or video matter, including journal advertisements, sales visual aids, leave items, formulary binders, reprints, direct mail, direct-to-consumer advertising, Internet postings and broadcast advertisements, in each case, created by Vyera or its Affiliates or on its behalf, and used or intended for use in connection with any promotion of the Licensed Product in the Field in the Territory under this Agreement. + +1.85 "Quality Agreement" has the meaning set forth in Section 6.3. + +1.86 "Receiving Party" has the meaning set forth in Section 10.1. + +1.87 "Regulatory Approval" means any and all approvals (including supplements, amendments, pre- and post-approvals), licenses, registrations or authorizations of any national, regional, state or local Regulatory Authority, department, bureau, commission, council or other governmental entity, that are necessary for the commercialization of a Licensed Product under this Agreement in the Field in the Territory. + +1.88 "Regulatory Authority" means: (a) any applicable Governmental Authority involved in granting Regulatory Approval in a country or jurisdiction in the Territory, including the FDA; and (b) any other applicable Governmental Authority having jurisdiction over a pharmaceutical Licensed Product. + +1.89 "Regulatory Documentation" means, with respect to each Licensed Product, all: (a) Regulatory Materials, including all data contained therein and all supporting documents created for, submitted to or received from an applicable governmental agency or Regulatory Authority relating to such Regulatory Materials; and (b) other documentation Controlled by a Party which is reasonably necessary in order to Commercialize Licensed Product in the Field in the Territory, including any registrations and licenses, regulatory drug lists, advertising and promotion documents shared with Regulatory Authorities, adverse event files, complaint files and Manufacturing records. + +Source: CYTODYN INC., 10-Q, 1/9/2020 + + + + + +1.90 "Regulatory Exclusivity" means, with respect to any Licensed Product in the Territory, any additional market protection, other than patent protection, granted by a Regulatory Authority in the Territory which confers an exclusive Commercialization period during which Vyera or its Affiliates have the exclusive right to market and sell such Licensed Product in the Field and in the Territory through a regulatory exclusivity right (e.g., new biologic entity exclusivity, new use or indication exclusivity, new formulation exclusivity, orphan drug exclusivity, pediatric exclusivity, or any applicable data exclusivity). + +1.91 "Regulatory Materials" means, with respect to the Licensed Product, all documentation, correspondence, submissions and notifications submitted to or received from a Regulatory Authority that are necessary or reasonably useful in order to Commercialize such Licensed Product in the Field in the Territory. For the avoidance of doubt, Regulatory Materials shall include, with respect to each Licensed Product, all Investigational New Drug applications (INDs), BLAs, Regulatory Approvals, and amendments and supplements for any of the foregoing, as well as the contents of any minutes from meetings (whether in person or by audio conference or videoconference) with a Regulatory Authority. + +1.92 "Required Third Party License" has the meaning set forth in Section 8.7. + +1.93 "Reserved Disputes" has the meaning set forth in Section 12.4. + +1.94 "Royalty Term" means the time period beginning with the First Commercial Sale of the Licensed Product in the Territory and continuing until the latest of (a) the expiration of the last Valid Claim Covering the Licensed Product and included in a CytoDyn Patent licensed to Vyera under this Agreement, (b) the date that is ten (10) years from the date of the First Commercial Sale, (c) the expiration of any Regulatory Exclusivity with respect to the Licensed Product and (d) the Biosimilar Entry Date. + +1.95 "SBL Agreement" has the meaning set forth in Section 9.2(o). + +1.96 "Serious Adverse Event" means any serious untoward medical occurrence in a patient or subject who is administered a Licensed Product, having reference to the provisions of 21 C.F.R 312.32(a), but only if and to the extent that such serious untoward medical occurrence is required under Applicable Laws to be reported to applicable Regulatory Authorities. + +1.97 "Sharp Agreement" has the meaning set forth in Section 9.2(o). + +1.98 "Side Letter" means that certain letter agreement, dated as of the date hereof, by and between CytoDyn and Vyera. + +1.99 "Step-Down Date" means the later of (a) the expiration of the last Valid Claim Covering the Licensed Product and included in a CytoDyn Patent licensed to Vyera under this Agreement and (b) the expiration of any Regulatory Exclusivity with respect to the Licensed Product. + +1.100 "Supply Agreement" has the meaning set forth in Section 6.2. + +1.101 "Supply Date" has the meaning set forth in Section 11.3(b). + +Source: CYTODYN INC., 10-Q, 1/9/2020 + + + + + +1.102 "Subsequent Indication" means each indication in the Field other than the Initial Indication, including the Monotherapy Indication; provided that Subsequent Indications must be distinct indications and broadening the use of a Licensed Product for a particular indication shall not be deemed a new indication. By way of illustration, extending the use of the Licensed Product to patients of different age parameters who have multi-drug resistant HIV infection shall not be deemed a new indication distinct from the Initial Indication. For clarity, indications outside of the Field, such as indications in connection with oncology are not included within the scope of this Agreement. + +1.103 "Term" has the meaning set forth in Section 11.1. + +1.104 "Territory" means the U.S. + +1.105 "Third Party" means any Person other than (a) Vyera, (b) CytoDyn or (c) an Affiliate of either of Vyera or CytoDyn. + +1.106 "Trademarks" has the meaning set forth in Section 5.4(a). + +1.107 "Transition Services" has the meaning set forth in Section 11.7(e)(ii). + +1.108 "Transition Services Agreement" has the meaning set forth in Section 11.7(e)(i). + +1.109 "U.S." means the United States of America, including its territories and possessions, including Puerto Rico. + +1.110 "Valid Claim" means a claim of an issued and unexpired Patent included within the CytoDyn Patents to the extent such claim has not been revoked, held invalid or unenforceable by a patent office, court or other governmental agency of competent jurisdiction in a final order, from which no further appeal can be taken, and which claim has not been disclaimed, denied or admitted to be invalid or unenforceable through reissue, re-examination or disclaimer or otherwise. + +1.111 "Vyera" has the meaning set forth in the introductory paragraph. + +1.112 "Vyera Indemnitee" has the meaning set forth in Section 13.2. + +1.113 "Vyera Reserved Dispute" has the meaning set forth in Section 12.4. + +ARTICLE 2 LICENSES; PROPRIETARY RIGHTS + +2.1 Grant of Licenses. (a) License to Vyera. CytoDyn hereby grants to Vyera, and Vyera hereby accepts, an exclusive royalty-bearing license (or sublicense, as the case may be), under the CytoDyn Patents, the CytoDyn Know-How and the Inventions (if any) solely to Commercialize, use, have used, offer for sale and sell Licensed Products in the Field in the Territory. (b) Sublicense Rights. The licenses granted to Vyera under this Agreement shall not be transferrable and/or sublicensable without CytoDyn's written consent, which it may grant, condition or withhold in its sole discretion. + +Source: CYTODYN INC., 10-Q, 1/9/2020 + + + + + +2.2 Proprietary Rights. (a) Title. This Agreement does not convey to Vyera any rights in any CytoDyn Patents, CytoDyn Know-How, Regulatory Approvals, Regulatory Materials, Regulatory Documentation, or Inventions by implication, estoppel or otherwise except for the rights expressly granted in Section 2.1(a). Title to the CytoDyn Patents, the CytoDyn Know-How, Regulatory Approvals, Regulatory Materials, Regulatory Documentation, and all Inventions shall at all times remain vested in CytoDyn. Except as otherwise provided in Section 2.2(b) with respect to Inventions, this Agreement does not convey to CytoDyn any rights in any Vyera Know-How or any Vyera Patents by implication, estoppel or otherwise. (b) Inventions. All right, title and interest in and to any and all Inventions that would be necessary or useful to Develop, Manufacture or Commercialize a Licensed Product (and/or an improvement, modification or line extension thereof) will be owned by CytoDyn. To the fullest extent permitted by law, Vyera shall, and hereby does, assign all of its right title and interest in and to any and all Inventions to CytoDyn. In the event that such assignment would be unlawful, Vyera shall, and hereby does, grant to CytoDyn an exclusive, irrevocable, worldwide, sublicensable (including through multiple tiers), transferrable (without consent) royalty free license to any and all right, title and/or interest that it may have in or to an Invention. Vyera will, upon reasonable request of CytoDyn, and at CytoDyn's expense, execute or cause to be executed, any assignments, filings, applications or other documents that CytoDyn may require to evidence its rights in the Inventions. + +2.3 Disclosure; Patent Prosecution. (a) Each of CytoDyn and Vyera shall promptly disclose to the other in writing reasonably detailed written reports describing any Invention that might, under the applicable U.S. patent laws, be patentable and constitute an Invention. (b) As between the Parties, CytoDyn shall be responsible, at its sole expense and in its sole discretion, for the preparation, filing, prosecution, and maintenance of any and all CytoDyn Patents (including, for clarity, any CytoDyn Patents that are the result of an Invention). CytoDyn will keep Vyera reasonably informed of the status of such efforts. + +2.4 Enforcement and Defense of Patents. (a) Each Party shall give the other Party notice, promptly after becoming aware, of any infringement of CytoDyn Patents, where such infringement concerns the Commercialization, manufacture, importation, use, offer for sale or sale of a Licensed Product in the Field in the Territory (a "Licensed Product Infringement"). CytoDyn shall have the sole right to initiate and prosecute any legal action at its sole expense in its name with respect to CytoDyn Patents, and to also control the defense of any declaratory judgment action relating to such Licensed Product Infringement; provided that no settlement, or consent judgment or other voluntary final disposition of the suit that relates to the Licensed Product in the Field in the Territory may be entered into without the consent of Vyera, which consent shall not be unreasonably withheld, conditioned or delayed. (b) For any action to terminate any Licensed Product Infringement, Vyera will provide reasonable cooperation and will provide CytoDyn with any information or assistance that CytoDyn may reasonably request, at the expense of CytoDyn. CytoDyn shall keep Vyera informed of developments in any such action or proceeding as such may relate to Commercialization, including, to the extent permissible by Applicable Law, the status of any settlement negotiations. + +Source: CYTODYN INC., 10-Q, 1/9/2020 + + + + + +(c) Any recovery obtained in connection with or as a result of any action to terminate any Licensed Product Infringement contemplated by this Section 2.4, whether by settlement or otherwise, shall be applied first in satisfaction of any costs and expenses incurred by CytoDyn in connection with the action; and next in satisfaction of any unreimbursed costs and expenses incurred by Vyera in connection with the action. The balance, if any remaining after the Parties have been compensated for such costs and expenses shall be allocated between the Parties with any recovery of ordinary damages based upon Licensed Product Infringement (whether awarded on a lost sales or lost profits basis) being deemed to be "Net Sales" and shared equally between the Parties and any recovery of special or punitive damages retained by CytoDyn. + +2.5 Field and Territory Restrictions. (a) Nothing in this Agreement is intended to, nor shall it, prevent CytoDyn from (i) Developing, Manufacturing and or Commercializing leronlimab inside or outside of the Territory for use outside of the Field or (ii) Developing or Manufacturing leronlimab inside or outside of the Territory for Commercialization within the Field outside of the Territory, in each case, to the extent such actions would not result in a breach of CytoDyn's obligations to use Commercially Reasonable Efforts to perform the activities set forth in the Development Plan. (b) Vyera shall not Commercialize nor shall it authorize the Commercialization of any Licensed Product outside of the Field or outside of the Territory. Vyera shall not, itself or through other Persons, directly or indirectly, solicit, advertise, sell, distribute, ship, consign, or otherwise transfer any Licensed Product outside of the Field or outside of the Territory. Vyera shall use Commercially Reasonable Efforts to ensure that Licensed Products sold in its Territory are not exported or used outside such Territory. Without limiting the generality of the foregoing, Vyera will not sell any Licensed Product to a purchaser if Vyera knows, or has reason to believe, that such purchaser intends to remove such Licensed Product from the Territory or otherwise intends to facilitate the use of such Licensed Product outside of the Field or outside of the Territory. Vyera shall use Commercially Reasonable Efforts to ensure that its permitted sublicensees, Affiliates, distributors, and wholesalers comply with all of the foregoing obligations. + +2.6 Competitive Products. Except as expressly required under this Agreement, Vyera hereby covenants not to Develop, Manufacture, Commercialize or otherwise exploit a Competitive Product in the Territory during the Royalty Term, including by means of an Affiliate. In the event that Vyera experiences a Change of Control with a Third Party that is actively engaged in the Development, Manufacture or Commercialization of a Competitive Product, then, Vyera shall either: (a) within ninety (90) days after the closing of such Change of Control, enter into a binding written agreement to sell, transfer, assign or divest all of Vyera's and/or its Affiliate's rights in and to such Competitive Product to a non-Affiliate Third Party and consummate such sale, transfer, assignment or divestiture of said rights not later than ninety (90) days following the date of the binding Agreement; or (b) within six (6) months after the closing of such Change of Control, terminate any and all Development, Manufacturing, Commercialization and/or other exploitation of such Competitive Product; or (c) terminate this Agreement in accordance with Section 11.2(c). For the avoidance of doubt, Vyera shall not be deemed to be in breach of this Section 2.6 (i) during the one hundred eighty (180) day period following a Change of Control described in this Section 2.6 (the "Disposition Period") so long as it has complied with its obligations under the immediately preceding clause (a), (b) or (c) prior to the end of the Disposition Period and (ii) during the pendency of the one hundred eighty (180)day notice period required pursuant to Section 11.2(c) elects to terminate this Agreement pursuant to the immediately preceding clause (c) prior to the end of the Disposition Period. + +Source: CYTODYN INC., 10-Q, 1/9/2020 + + + + + +ARTICLE 3 GOVERNANCE + +3.1 Joint Committee. (a) Within ten (10) days after the Effective Date, a Joint Committee ("JC") shall be established with the responsibilities and authority set forth in this Section 3.1. The JC shall consist of six (6) members, three (3) members to be appointed by each of CytoDyn and Vyera, and the Alliance Manager from each Party. Each Party may, with notice to the other, substitute any of its members serving on the JC and may invite ad hoc non-voting members as desired. The Parties may also, by mutual agreement, increase or (subject to Section 3.1(d)) decrease the number of members serving on the JC; provided that the number of members representing each Party remains equal. Prior to Regulatory Approval of a Licensed Product, CytoDyn will have the right to appoint one of its members to be the chairperson of the JC. Vyera and CytoDyn shall alternate appointing the chairperson of the JC in each year following Regulatory Approval. (b) The JC shall have the responsibility and authority to: (i) provide a forum for exchange of information related to the Development and Commercialization of Licensed Products in the Field in the Territory; (ii) review and discuss any proposed material amendments or updates to the Development Plan and present the results of such discussions to the management or boards of the Parties for approval; (iii) review and discuss the Commercialization Plan for the Licensed Products in the Field in the Territory and any proposed material amendments or updates thereto and present the results of such discussions to the management or the boards of the Parties for approval; (iv) oversee the implementation of the Development Plan and the Commercialization Plan; (v) monitor the progress of the Development Plan and the Commercialization Plan against the metrics agreed to by the Parties (such as timeline, costs, and revenue) and report on such progress to the management or boards of the Parties; and (vi) perform any other functions as the Parties may agree in writing. (c) The JC shall hold meetings as mutually agreed by the Parties, but in no event less than quarterly unless Vyera and CytoDyn mutually agree in writing (which may include email), no later than thirty (30) days in advance of any meeting following the initial meeting of the JC, that no new business has transpired that would require a meeting of the JC. The first meeting of the JC shall be held within forty-five (45) days of the Effective Date and shall be held in New York, NY. After the initial meeting, meetings may be held by telephone or video conference, provided that the Parties shall meet in person at least once per year, and such meetings shall alternate between New York, New York and Vancouver, Washington. Minutes of all meetings setting forth decisions of the JC shall be prepared by the chairperson and circulated to both Parties within thirty (30) days after each meeting, and shall not become official until approved by both Parties in writing; minutes shall be presented for approval as the first order of business at the subsequent JC meeting, or if it is necessary to approve the minutes prior to such subsequent meeting, then the Parties shall approve the minutes within thirty (30) days of receipt thereof. (d) The quorum for JC meetings shall be four (4) members, provided there are at least two (2) members from each of CytoDyn and Vyera present. The JC will render decisions by unanimous vote. The members of the JC shall act in good faith to cooperate with one another and to reach agreement with respect to issues to be decided by the JC. + +Source: CYTODYN INC., 10-Q, 1/9/2020 + + + + + +(e) Disagreements among the JC will be resolved via good-faith discussions; provided, that in the event of a disagreement that cannot be resolved within thirty (30) days after the date on which the disagreement arose, the matter shall be resolved pursuant to Section 12.2; and provided, further that if the Dispute cannot be resolved pursuant to Section 12.2, then if such Dispute is a Reserved Dispute, then such Reserved Dispute will be resolved in accordance with Section 12.4, and if such Dispute is not a Reserved Dispute, such dispute will be resolved in accordance with Section 12.3(a). (f) At each JC meeting, CytoDyn will keep the JC informed regarding the progress and results of Development activities with respect to Licensed Product in the Territory in the Field and Vyera will keep the JC informed regarding the progress and results of Commercialization activities with respect to Licensed Product in the Territory in the Field. + +3.2 Alliance Managers. Each Party shall appoint, within ten (10) days of the Effective Date, an Alliance Manager. The Alliance Managers shall have the right to attend all meetings of the JC, as non-voting participants and secretaries at such meetings, and may bring to the attention of the JC, any matters or issues either of them reasonably believes should be discussed and shall have such other responsibilities as the Parties may mutually agree in writing. Each Party may replace its Alliance Manager at any time upon notice to the other Party. + +3.3 Operating Principles; Expenses. The Parties hereby acknowledge and agree that the deliberations and decision-making of the JC, and any subcommittee established by the JC shall be in accordance with the following operating principles: (a) decisions should be made in a prompt manner; and (b) the Parties' mutual objective is to maximize the clinical and commercial success of the Licensed Products in the Field in the Territory, consistent with sound and ethical business and scientific practices. The Parties shall each bear all expenses of their respective representatives on the JC, Alliance Managers and any other subcommittee established under this Agreement and such costs shall not be included in any other category of expenses under this Agreement, nor will they be deducted from Net Sales. The JC, the Alliance Managers and any other committees established pursuant to this Agreement or as determined by the foregoing committees, will have only such powers as are specifically delegated to it in this Agreement, and will have no power to amend this Agreement or waive a Party's rights or obligations under this Agreement. Either Party may propose topics for inclusion in the agenda for a meeting of the JC; provided that that the chairperson of the JC shall have the authority to determine in which order such topics are discussed in the subject meeting. + +3.4 Information Disclosure. Information that otherwise falls under the definition of Confidential Information contained in reports made pursuant to Section 3.1 or otherwise communicated between the Parties will be subject to the confidentiality provisions of Section 10.1. Each Party shall have the right to use the Confidential Information disclosed by the other Party without charge, but only to the extent necessary to enable each Party to carry out its respective role defined in this Agreement or otherwise in exercise of rights granted to it pursuant to this Agreement. + +ARTICLE 4 DEVELOPMENT + +4.1 Development Plan and Development Activities. CytoDyn shall have sole responsibility for, and final decision-making authority with respect to, performance of Development of the Licensed Product for the Initial Indication and any Subsequent Indication. CytoDyn shall use Commercially Reasonable Efforts to execute and perform the activities set forth in the Development Plan. CytoDyn shall conduct the activities under the Development Plan, and shall ensure that its Affiliates and contractors conduct their activities under the Development Plan, in a good scientific manner and in material compliance with Applicable Law, including cGLP, cGCP, cGMP and applicable national and international guidelines. For clarity, the Development Plan will only include activities related to indications in the Field. + +Source: CYTODYN INC., 10-Q, 1/9/2020 + + + + + +4.2 Development Reporting. CytoDyn shall provide the JC no later than five (5) Business Days prior to each scheduled JC meeting, with written materials that summarize, in reasonable detail, material Development activities performed in the Field during the immediately preceding period since the last meeting of the JC, and compare such performance with the goals and timelines set forth in the Development Plan. CytoDyn shall also promptly provide the JC with notice of any material delay in Development when compared to the Development Plan. + +4.3 Amendments to the Development Plan. CytoDyn may decide from time to time to propose for approval by the JC updates to the Development Plan as necessary to reflect changes in the progress of Development for the Licensed Product for the Initial Indication or a Subsequent Indication in the Territory. Any proposed change to the Development Plan shall set forth all anticipated Development activities and timelines. The JC shall promptly review such proposed change and shall as soon as practicable but in any event within fifteen (15) days following submission either (a) approve it or (b) provide comments to CytoDyn for its consideration. CytoDyn shall consider such comments (if any) and revise the Development Plan to implement all such reasonable comments and provide such revised Development Plan to the JC. If Disputes remain with respect to such amendments to the Development Plan, then such dispute shall be referred to the JC for resolution thereof in accordance with Section 3.1(e). For the avoidance of doubt, the failure to agree on a proposed update to the Development Plan or any Development activities is a CytoDyn Reserved Dispute. + +ARTICLE 5 COMMERCIALIZATION + +5.1 General. Vyera shall have the exclusive right to implement, and subject to Section 5.5, final decision-making authority with respect to, Commercialization of all Licensed Products in the Field and the Territory. Vyera shall be solely and exclusively responsible for all costs and expenses associated with Commercialization of Licensed Products in the Field and the Territory. Vyera shall use Commercially Reasonable Efforts in connection with such Commercialization of Licensed Products in the Territory for each indication in the Field for which such Licensed Products have received Regulatory Approval, and shall conduct Commercialization activities in material compliance with Applicable Laws and shall ensure that its Third Party contractors conduct Commercialization activities in material compliance with Applicable Laws. Without limiting the foregoing, Vyera shall have the exclusive right and responsibility throughout the Territory for the following: (a) receiving and accepting orders for the Licensed Product from customers; (b) distributing the Licensed Product to customers; (c) controlling invoicing and collection of accounts receivable for Licensed Product sales; (d) recording Licensed Product sales in its books of account for sales (in accordance with Vyera's accounting standards consistently applied (currently GAAP)); (e) subject to Section 5.5, determining pricing for the Licensed Product and all aspects of the promotion (including promotional materials) to be used in Commercializing Licensed Products; (f) negotiating with Third Parties, including without limitation, payors, pharmacy benefit managers and distributors, with respect to sales and distribution of Licensed Product; and (g) paying all rebates, chargebacks and other amounts due to customers in respect of Licensed Products (it being understood that all such amounts shall be deducted in calculating Net Sales). Notwithstanding the foregoing, CytoDyn acknowledges and agrees that in the event Vyera delivers to CytoDyn a notice of termination pursuant to Sections 11.2(b) or (c), the use of Commercially Reasonable Efforts shall take into account Vyera's intent to cease its Commercialization activities as of the end of the applicable notice period and shall not require Vyera to take any action that is inconsistent with such intent. + +Source: CYTODYN INC., 10-Q, 1/9/2020 + + + + + +5.2 Commercialization Plan. Attached as Attachment C is a written commercialization plan setting forth anticipated material Commercialization activities to be performed for the Licensed Product in the Initial Indication in the Territory (the "Commercialization Plan"). Vyera shall conduct the Commercialization activities in accordance with the Commercialization Plan and in performing such activities will ensure that it meets or exceeds the Minimum Requirements. No later than three (3) months prior to the anticipated First Commercial Sale in the Territory based upon the then most recent Development Plan, Vyera shall update the Commercialization Plan, and shall thereafter update the Commercialization Plan on an annual basis by providing the JC with such updates no later than November 1 of each Calendar Year. In each case, the Commercialization Plan shall, at a minimum, include the activities, investments and allocations set forth in the Minimum Requirements. To the extent that CytoDyn files any BLA with a Regulatory Authority to cover a Subsequent Indication in the Field not included within the then current Licensed Product target label and the FDA accepts such BLA filing for review on or before September 1 of any Calendar Year, the updated Commercialization Plan shall include the Commercialization activities, if any, to be performed with respect to the Licensed Product in such Subsequent Indication. + +5.3 Commercialization Reports. With respect to Commercialization of Licensed Products in the Territory, Vyera shall keep the JC informed regarding the progress and results of such Commercialization. Such progress reports shall be provided at least quarterly and in a form reasonably acceptable to CytoDyn. Vyera shall also promptly provide the JC with any additional information regarding its Commercialization of the Licensed Product reasonably requested by the JC, including any material changes in any Commercialization Plan. Vyera shall inform the JC of any such material changes to a Commercialization Plan for the Licensed Product at the first JC meeting following such change. + +5.4 Licensed Product Trademarks. (a) CytoDyn shall be responsible for the selection, registration, defense and maintenance of the trademarks under which Vyera will market all Licensed Products in the Territory, as well as all expenses associated therewith (the "Trademarks"). CytoDyn shall own all Trademarks and any domain names incorporating such Trademarks used by Vyera in connection with the Commercialization of Licensed Products in the Field in the Territory under this Agreement and all goodwill associated therewith. Vyera shall not have, assert or acquire any right, title or interest in or to any of the Trademarks. If Vyera acquires any rights in the Trademarks, by operation of Applicable Law, or otherwise, such rights shall be deemed and are hereby irrevocably assigned to CytoDyn without further action by either Party. Vyera shall not grant or attempt to grant a security interest in, or otherwise encumber, the Trademarks or record any such security interest or encumbrance against any application or registration regarding the Trademarks. Vyera shall ensure that all Licensed Products sold in the Territory bear the Trademarks. (b) CytoDyn shall have the right to select all trade dress, logos, slogans, designs and copyrights used on and in connection with the Licensed Products in the Field in the Territory. CytoDyn will be the sole owner of all trade dress, logos, slogans, designs and copyrights specifically created by or on behalf of Vyera or used by Vyera on or in connection with the Licensed Products in the Territory. (c) Vyera shall be responsible, at its expense, for preparing and producing Promotional Materials subject to the review and comment of CytoDyn. Vyera shall make its core Promotional Materials available to CytoDyn for review and comment prior to use, such comments not to be unreasonably disregarded by Vyera. The Promotional Materials used by Vyera or its Affiliates or sublicensees in the Territory shall be consistent with the Regulatory Approval in the Territory and shall in any event comply in all material respects + +Source: CYTODYN INC., 10-Q, 1/9/2020 + + + + + +with Applicable Law. Vyera shall use and distribute the Promotional Materials in accordance with the terms of this Agreement, the Commercialization Plan and the direction of the JC. To the extent that CytoDyn disagrees with promotional message or tactics proposed by Vyera for a Licensed Product in the Territory, it may raise such issues with Vyera for discussion, but Vyera is ultimately responsible for all decisions related to promotional message and tactics related to the sale of Licensed Products in the Field in the Territory; provided that, in each instance, such promotional message and/or tactics are in accordance in all material respects with Applicable Law. Notwithstanding anything to the contrary herein, prior to incorporating the Trademarks into any Promotional Materials, Vyera shall provide CytoDyn with mock-ups of the proposed trademark style of usage (i.e., a style sheet) for its review and consent of the trademark usage, such consent not to be unreasonably withheld, delayed or denied. + +5.5 Decisions that are not Reserved. Notwithstanding anything to the contrary in this Article 5 or any other section of this Agreement: (a) the Minimum Requirements may not be modified, amended or otherwise changed without the written consent of CytoDyn, such consent not to be unreasonably withheld, conditioned or delayed; and [***]. + +ARTICLE 6 MANUFACTURE AND SUPPLY + +6.1 Supply of Licensed Product. Vyera shall purchase all of its requirements for supply of Licensed Product exclusively from CytoDyn in accordance with the terms and conditions of the Supply Agreement. For clarity, in the event of a termination of the Supply Agreement, this Section 6.1 shall no longer apply to either Party. + +6.2 Supply Agreement. The Parties shall enter into a Supply Agreement(s) for the commercial supply of Licensed Product on the Effective Date. The Supply Agreement(s) shall be in the form attached as Attachment D, with such changes (if any) mutually agreed by the Parties in writing. + +6.3 Quality Agreement. Within ninety (90) days of the Effective Date, the Parties shall negotiate in good faith and enter into a quality agreement (a "Quality Agreement") setting forth the responsibilities of the Parties with respect to quality assurance matters for the Licensed Product. The Parties acknowledge and agree that: (a) CytoDyn shall have primary responsibility for all quality assurance matters as the holder of the BLA for the Licensed Product; and (b) Vyera shall not be directly responsible for quality assurance matters with respect to the Licensed Product. + +ARTICLE 7 REGULATORY MATTERS + +7.1 Regulatory Filings; Approvals. CytoDyn shall be responsible for preparing and filing all Regulatory Materials for the Licensed Product in the Territory and outside of the Territory and shall be the owner of all Regulatory Approvals issuing therefrom. CytoDyn shall be responsible for answering any queries from Regulatory Authorities, including those related to Manufacture of the Licensed Product. CytoDyn shall provide Vyera with a copy (which may be wholly or partly in electronic form) of all Regulatory Materials with respect to Licensed Product in the Field in the Territory. CytoDyn shall provide Vyera with reasonable advance notice of any scheduled meeting with the FDA relating to Development and/or the BLA for the Licensed Product in the Field in the Territory, and Vyera shall have the right to silently observe (if and to the extent permitted by the FDA) and, if the Parties mutually agree in writing in advance, participate in any such meeting. CytoDyn shall promptly furnish Vyera with copies of all material correspondence or minutes of material meetings with the FDA in each case relating to the Licensed Product in the Field in the Territory. For clarity, CytoDyn shall have no obligation to share information regarding its development activities, its regulatory meetings or other activities with respect to PRO 140 outside of the Field and/or outside of the Territory. + +Source: CYTODYN INC., 10-Q, 1/9/2020 + + + + + +7.2 Inspections. To the extent permitted under Applicable Law and, if applicable, its relevant Third Party agreements, (a) CytoDyn shall provide Vyera with reasonable advance notice of any scheduled regulatory inspection of CytoDyn or Third Party Manufacturing facilities used for supply of the Licensed Product as contemplated by Article 6, and (b) Vyera shall be allowed to participate in any pre-approval readiness activities and audits for CytoDyn or its Third Party Manufacturing facilities. CytoDyn or its applicable Third Party manufacturer of Licensed Product shall control all interactions with Regulatory Authorities with respect to such inspection. To the extent permitted under Applicable Law and, if applicable, CytoDyn's relevant Third Party agreements, Vyera shall have the right to be present during such inspection. CytoDyn shall use its Commercially Reasonable Efforts to ensure that any applicable Third Party manufacturer of Licensed Product is obligated to provide such access to Vyera (to the extent that CytoDyn has such rights of access). So long as CytoDyn is supplying Vyera supplies of Licensed Products pursuant to the Supply Agreement, it shall use Commercially Reasonable Efforts to obtain and maintain such rights of access for Vyera. + +7.3 Adverse Event Reporting; Pharmacovigilance Agreement. CytoDyn shall be responsible for all adverse event reporting, including any and all Serious Adverse Events with respect to all Licensed Products for all indications in the Territory. CytoDyn shall maintain the unified worldwide adverse event database for the Licensed Products. Within ninety (90) days of the Effective Date the Parties will enter into the Pharmacovigilance Agreement, setting forth guidelines and procedures for the receipt, investigation, recording, review, post-marketing surveillance, communication, reporting and exchange between the Parties of adverse event reports, technical complaints and any other information concerning the safety of the Licensed Products. Vyera shall be responsible for promptly (and in any event in sufficient time to permit CytoDyn to comply with its legal and regulatory reporting obligations) providing to CytoDyn any and all information relating to adverse events, including, without limitation, Serious Adverse Events, that comes into its possession. + +7.4 Licensed Product Withdrawals and Recalls. In the event that either Party: (a) becomes aware of an event, incident or circumstance that has occurred which may result in the need for a recall or other removal of a Licensed Product or any lot or lots thereof from the market; (b) becomes aware that a Regulatory Authority is threatening or has initiated an action to remove a Licensed Product from the market; (c) is required by any Regulatory Authority to distribute a "Dear Doctor" letter or its equivalent, regarding use of Licensed Product; or (d) places a Clinical Trial for a Licensed Product in the Field on hold for clinical safety reasons, such Party shall promptly advise the other Party in writing with respect thereto, and shall provide to such other Party copies of all relevant correspondence, notices, and the like. CytoDyn shall have final authority to make all decisions relating to any recall, market withdrawal or other corrective action with respect to the Licensed Product in the Territory and shall be responsible for conducting any recalls or taking such other remedial action, and Vyera agrees, upon reasonable request by CytoDyn to assist with respect to such recalls or remedial actions. The costs of such recall or remedial action shall be apportioned as follows: (i) if the recall or remedial action is due to the nature of the Licensed Product and its specifications as documented in the approved BLA, then CytoDyn shall bear the cost of such recall, (ii) if such recall or remedial action is due to Vyera's Commercialization efforts (such as, without limitation, a false marketing claims triggering a "Dear Doctor" letter) then Vyera shall bear the costs of the recall. If the remedial action or recall is necessitated by a defect in the Manufacturing process for the applicable units of Licensed Product and CytoDyn (or its designee) is supplying the Licensed Product under the Supply Agreement, costs shall be borne as set forth in the Supply Agreement. + +Source: CYTODYN INC., 10-Q, 1/9/2020 + + + + + +7.5 Other Safety Issues. At the request of either Party, the JC shall establish a subcommittee to handle the discussion of specific safety issues, advise each Party concerning the collection and evaluation of safety data, and respond to any significant safety issues raised, or requests made, by Regulatory Authorities. + +7.6 Standards of Conduct. The Parties shall use Commercially Reasonable Efforts to perform, or shall use Commercially Reasonable Efforts to ensure that its Third Party contractors perform, all regulatory activities in good scientific manner and in compliance with Applicable Laws. + +ARTICLE 8 CONSIDERATION + +8.1 License Fee. Vyera shall pay CytoDyn a non-refundable, non-creditable license issue fee of $500,000 within three (3) Business Days following the date the Parties enter into this Agreement and the Supply Agreement. + +8.2 Development and Commercial Milestone Payments. Vyera shall pay each of the following non-refundable, non-creditable payments to CytoDyn upon achievement of each of the following events with respect to the Licensed Product. Each milestone payment by Vyera pursuant to this Section 8.2 shall be payable only one time. Milestone Payment + +Upon [***] [***] + +Upon the later of (i) [***] and (ii) the [***] [***] + +Upon [***] [***] + +Upon cumulative Net Sales for the Licensed Product equal to [***] [***] + +Upon cumulative Net Sales for the Licensed Product equal to [***] [***] + +Upon cumulative Net Sales for the Licensed Product equal to [***] [***] + +Upon cumulative Net Sales for the Licensed Product equal to [***] [***] + +Upon cumulative Net Sales for the Licensed Product equal to [***] [***] + +Upon cumulative Net Sales for the Licensed Product equal to [***] [***] + +Total [***] + +[***] + +Source: CYTODYN INC., 10-Q, 1/9/2020 + + + + + +CytoDyn shall promptly notify Vyera in writing following the achievement of the first two (2) milestone events described in this Section 8.2 and submit to Vyera an invoice for the corresponding milestone payment set forth in this Section 8.2. Within thirty (30) days of Vyera's receipt of any such invoice, Vyera shall remit the milestone payment to CytoDyn in immediately available funds. Vyera shall promptly notify CytoDyn in writing following the achievement of each remaining milestone event described in this Section 8.2, but in no event will such notice be given to CytoDyn later than (a) five (5) Business Days after First Commercial Sale of Licensed Product and (b) twenty (20) Business Days after Vyera becomes aware of the achievement of any milestone related to cumulative Net Sales. Thereafter, CytoDyn shall submit to Vyera an invoice for the corresponding milestone payment set forth in this Section 8.2. Within thirty (30) days of Vyera's receipt of any such invoice, Vyera shall remit the applicable milestone payment to CytoDyn. + +8.3 Milestone Payment for [***]. Vyera shall pay to CytoDyn [***] (the "[***] Milestone Payment") in the event that [***] (a "[***]") results in a [***]. Whether a [***] meets the criteria set forth in this Section 8.3 will be determined in good faith by the JC. The determination of whether a [***] results in [***] will not be a Reserved Dispute of either Party. In the event that the JC approves a proposed [***], the JC will discuss in good faith the details of the program that will be implemented to pursue the [***], including the budget, the timeline and any other items that the JC deems material. The proposed program will then be presented to the management of each Party for approval. In the event that the Parties agree to pursue a [***], CytoDyn shall promptly notify Vyera in writing following receipt of [***] and submit to Vyera an invoice for the [***]. Within thirty (30) days of Vyera's receipt of any such invoice, Vyera shall remit the [***] to CytoDyn. The [***] shall be non-refundable and non-creditable. Notwithstanding the foregoing, if the JC and/or the Parties are not able to come to agreement on a program to pursue a [***], the decision on whether to pursue a [***] shall be made by CytoDyn in its sole discretion provided, however, that such [***] will not be eligible for a [***]. + +8.4 Milestone Payment for [***]. If CytoDyn receives [***], then Vyera shall pay to CytoDyn [***] (the "[***]") in immediately available funds upon the receipt of [***]. CytoDyn shall promptly notify Vyera in writing following receipt of [***] and submit to Vyera an invoice for the corresponding milestone payment set forth in this Section 8.4. Within thirty (30) days of Vyera's receipt of any such invoice, Vyera shall remit the milestone payment to CytoDyn. The [***] shall be non-refundable and non-creditable. + +8.5 Milestone Payment for [***]. With respect to any [***] for the Licensed Product within the Field other than the [***], the JC shall determine in good faith (which determination, for the avoidance of doubt, shall not be a Reserved Dispute of either Party) the amount of the payment, if any, payable by Vyera to CytoDyn in the event [***] is received. Such payment as recommended by the JC shall be approved by the management of each Party. CytoDyn shall promptly notify Vyera in writing following receipt [***] for which payment has been agreed and approved and submit to Vyera an invoice for the corresponding milestone payment that the Parties have agreed upon pursuant to this Section 8.5. Within thirty (30) days of Vyera's receipt of any such invoice, Vyera shall remit the milestone payment to CytoDyn. Each milestone payment for a [***] shall be non-refundable and non-creditable. Notwithstanding the foregoing, in the event that the JC is unable to agree on whether to pursue a [***], the decision as to whether to pursue a [***] shall be made by CytoDyn in its sole discretion provided, however, that such [***] will not be eligible for a milestone payment pursuant to this Section 8.5. + +8.6 Royalty Obligation. Vyera shall pay to CytoDyn royalties equal to fifty percent (50%) of Net Sales of Licensed Products in the Territory during the Royalty Term; provided that, after the Step-Down Date, the royalty percentage will be reduced to [***] of Net Sales of Licensed Products in the Territory throughout the remaining period in the Royalty Term. Royalties shall be payable commencing upon the First Commercial Sale of the Licensed Product in the Territory until the expiration of the Royalty Term in the Territory. Following the expiration of the Royalty Term with respect to the Licensed Product, the licenses granted under Section 2.1 with respect to such Licensed Product in the Field and the Territory shall be non-exclusive, perpetual, irrevocable, fully-paid and royalty-free. + +Source: CYTODYN INC., 10-Q, 1/9/2020 + + + + + +8.7 Required Licenses. If either Party receives a notice from a Third Party indicating that the Commercialization of a Licensed Product in the Field in the Territory infringes a Third Party Patent, it will promptly notify the other Party. The Parties will thereafter discuss a response in good faith. If the Parties agree in good faith that it is reasonable to enter into a license with such Third Party to avoid infringement of such Third Party patent(s)by the sale, offer for sale or use of a Licensed Product in the Field in the Territory (each such license, a "Required Third Party License"), then CytoDyn shall have the right to negotiate the terms of such Required Third Party License and the amounts payable under such Required Third Party License shall be deducted from the royalties payable to CytoDyn. If either of the Parties agree in good faith that it is not reasonable to enter into a license with a Third Party to avoid infringement by the sale, offer for sale or use of a Licensed Product in the Field in the Territory, any fees, costs or expenses incurred by either Party, including, without limitation, damages as a result of an infringement claim, will be borne by CytoDyn in accordance with Section 13.2. If the Parties agree in good faith that it is appropriate to bring an opposition, action for declaratory judgment, nullity action, interference, declaration for non-infringement, re- examination or other attack upon the validity, title or enforceability of a patent owned or controlled by a Third Party based on its' potential adverse impact on the patent freedom-to-operate with respect to the Commercialization of a Licensed Product in the Field in the Territory, then CytoDyn shall control such action and shall be responsible for the costs of such action. CytoDyn shall provide Vyera with copies of any substantive documents related to such proceedings and reasonable notice of all such proceedings. Vyera may itself or through its counsel offer comments and suggestions with respect to the matters that are the subject of this Section 8.7 and CytoDyn shall consider such comments and suggestions in good faith. If the Parties disagree in good faith as to whether it is reasonable to enter into a license agreement with a Third Party to avoid infringement by the sale, offer for sale or use of a Licensed Product in the Field in the Territory and such Third Party subsequently brings an infringement action (or an infringement action is brought on its behalf) that is solely related to the sale, offer for sale or use of a Licensed Product in the Field in the Territory, then the Party that did not agree to pursuing the Required Third Party License will be responsible for all costs, fees and damages incurred in connection with such infringement action in the event and to the extent any such infringement action is solely related to the sale, offer for sale or use of a Licensed Product in the Field in the Territory, and the provisions of Section 13.2 shall not apply if Vyera is the Party that did not agree to pursue such Required Third Party License solely for the sale, offer for sale or use of a Licensed Product in the Field in the Territory. + +8.8 Royalty Report; Payment. Within forty-five (45) days following the end of each Calendar Quarter after the First Commercial Sale of each Licensed Product in the Territory, Vyera shall provide CytoDyn with a report in a form reasonably acceptable to CytoDyn containing the following information for the applicable Calendar Quarter for such Licensed Product: (a) the amount of gross sales of the Licensed Product in the Territory; (b) an itemized calculation of Net Sales in the Territory showing reasonably detailed deductions; provided for in the definition of "Net Sales"; (c) a reasonably detailed calculation of the royalty payment due on such sales; (d) an accounting of the number of units of the Licensed Product sold; and (e) the application of the reduction, if any, made in accordance with the terms of Section 8.7. Vyera shall pay all amounts due to CytoDyn with respect to Net Sales by Vyera or its Affiliates for such Calendar Quarter at the time of the submission of such quarterly report. + +8.9 Third Party Financial Obligations. CytoDyn will be solely responsible for, and shall indemnify Vyera for, the payment of any royalties, sublicense revenues, milestones or other payments due to Third Party(ies) under Existing Licenses arising with respect to the Commercialization, under the licenses granted under this Agreement, of the Licensed Product, in the Field in the Territory. + +Source: CYTODYN INC., 10-Q, 1/9/2020 + + + + + +8.10 Taxes. The amounts payable pursuant to this Agreement ("Payments") shall not be reduced on account of any taxes unless required by Applicable Law. Vyera shall deduct and withhold from the Payments any taxes that it is required by Applicable Law to deduct or withhold. Notwithstanding the foregoing, if CytoDyn is entitled under any applicable tax treaty to a reduction of rate of, or the elimination of, or recovery of, applicable withholding tax, it may deliver to Vyera or the appropriate Governmental Authority the prescribed forms necessary to reduce the applicable rate of withholding or to relieve Vyera of its obligation to withhold tax. In such case Vyera shall apply the reduced rate of withholding, or not withhold, as the case may be, provided that Vyera is in receipt of evidence, in a form reasonably satisfactory to Vyera, for example CytoDyn's delivery of all required documentation at least five (5) Business Days prior to the time that the Payments are due. If, in accordance with the foregoing, Vyera withholds any amount, it shall pay to CytoDyn the balance when due, make timely payment to the proper taxing authority of the withheld amount, and send CytoDyn proof of such payment within thirty (30) days following that payment. + +8.11 Audit. Vyera shall maintain, and shall cause its Affiliates to maintain, complete and accurate records in sufficient detail to permit CytoDyn to confirm the accuracy of the calculation of royalties and milestones due under this Agreement. Upon reasonable prior notice, but not more than once per Calendar Year, such records of Vyera and its Affiliates shall be available during Vyera's and its Affiliates regular business hours for a period of three (3) years from the end of the Calendar Year to which they pertain for examination at the expense of CytoDyn by an independent certified public accountant selected by CytoDyn and reasonably acceptable to Vyera, for the sole purpose of verifying the accuracy of the financial reports and correctness of the payments furnished by Vyera pursuant to this Agreement. Any such auditor shall not disclose Vyera's Confidential Information, except to the extent such disclosure is necessary to verify the accuracy of the financial reports furnished by Vyera or the amount of payments due by Vyera under this Agreement. Any amounts shown to be owed but unpaid shall be paid within thirty (30) days from the accountant's report, plus interest, as set forth in Section 8.12 from the original due date. Any amounts shown to have been overpaid shall be refunded within thirty (30) days from the accountant's report. CytoDyn shall bear the full cost of such audit unless such audit discloses an underpayment by Vyera of more than five percent (5%) of the amount due, in which case Vyera shall bear the full cost of such audit. The audit rights set forth in this Section 8.11 shall survive the Term for a period of three (3) years. + +8.12 Late Payment. All payments due to a Party under this Agreement shall be made in U.S. Dollars by wire transfer of immediately available funds into an account designated by the receiving Party. If a Party does not receive payment of any sum due to it on or before the due date, simple interest shall thereafter accrue on the sum due to such Party until the date of payment at the per annum rate of two percent (2%) over the then prime rate quoted by Citibank in New York City or the maximum rate allowable by Applicable Law, whichever is lower. + +8.13 Equity Investment. Within seven (7) days of the Effective Date, Vyera shall make an equity investment of $4,000,000 in CytoDyn (the "Equity Investment"), pursuant to that certain Subscription Agreement substantially in the form attached hereto as Attachment E and that certain Warrant Agreement substantially in the form attached hereto as Attachment F. + +Source: CYTODYN INC., 10-Q, 1/9/2020 + + + + + +ARTICLE 9 REPRESENTATIONS, WARRANTIES AND COVENANTS + +9.1 Mutual Representations, Warranties and Covenants. Each of the Parties hereby represents and warrants to the other Party as of the Effective Date and hereinafter, as set forth below, covenants that: (a) Organization. It is duly organized, validly existing, and in good standing under Applicable Law of the jurisdiction of its organization, and has all requisite power and authority, corporate or otherwise, to execute, deliver, and perform this Agreement. (b) Binding Agreement. This Agreement is a legal and valid obligation binding upon such Party and enforceable in accordance with its terms, subject to the effects of bankruptcy, insolvency, or other Applicable Law of general application affecting the enforcement of creditor rights, judicial principles affecting the availability of specific performance, and general principles of equity (whether enforceability is considered a proceeding at law or equity). (c) Authorization. The execution, delivery, and performance of this Agreement by such Party have been duly authorized by all necessary corporate action and do not conflict with any agreement, instrument, or understanding, oral or written, to which it is a party or by which it is bound, or violate any Applicable Law or any order, writ, judgment, injunction, decree, determination, or award of any court or governmental body, or administrative or other agency presently in effect applicable to such Party. (d) No Further Approval. It is not aware of any government authorization, consent, approval, license, exemption of or filing or registration with any court or governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, under any Applicable Law, currently in effect, necessary for, or in connection with, the transactions contemplated by this Agreement or any other agreement or instrument executed in connection herewith, or for the performance by it of its obligations under this Agreement and such other agreements (save for Regulatory Approvals and similar authorizations from Governmental Authorities necessary for the Commercialization of the Licensed Products in the Field as contemplated hereunder). (e) No Inconsistent Obligations. Neither Party is under any obligation, contractual or otherwise, to any Person that conflicts with or is inconsistent in any material respect with the terms of this Agreement, or that would impede the diligent and complete fulfillment of its obligations hereunder. (f) No Debarment. Neither Party nor any of its respective Affiliates has been debarred by the FDA, is not subject to any similar sanction of other Governmental Authorities in the Territory, and, to its Knowledge, neither Party nor any of its respective Affiliates has used, or will engage, in any capacity, in connection with this Agreement or any ancillary agreements (if any), any Person who either has been debarred by such a Regulatory Authority, or is the subject of a conviction described in Section 306 of the FDCA. Each Party shall inform the other Party in writing promptly if it or any Person engaged by it or any of its Affiliates who is performing services under this Agreement or an ancillary agreement (if any) is debarred or is the subject of a conviction described in Section 306 of the FDCA, or if any action, suit, claim, investigation or legal or administrative proceeding is pending or, to such Party's Knowledge, is threatened, relating to the debarment or conviction of such Party, any of its Affiliates or any such Person performing services hereunder or thereunder. (g) Transparency Reporting. Each Party shall be responsible for tracking and reporting transfers of value initiated and controlled by its and its Affiliates' employees, contractors, and agents pursuant to the requirements of the transparency laws of any Governmental Authority in the Territory, including Section 6002 of the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, as amended, commonly referred to as the "Sunshine Act." + +Source: CYTODYN INC., 10-Q, 1/9/2020 + + + + + +9.2 Additional Representations and Warranties of CytoDyn. CytoDyn represents and warrants as of the Effective Date, and hereinafter, as set forth below, covenants to Vyera that: (a) CytoDyn has all rights necessary to grant the licenses under the CytoDyn Know-How and the CytoDyn Patents that it grants to Vyera in this Agreement. As of the Effective Date and thereafter for the duration of the Term, CytoDyn shall not, and shall cause its Affiliates not to, grant to any Third Party rights that conflict with the rights granted to Vyera under this Agreement; provided that, Vyera acknowledges and agrees that CytoDyn shall have the right to license the CytoDyn Know-How, the CytoDyn Patents and the Inventions (a) outside of the Field anywhere in the world and (b) within the Field but outside of the Territory. (b) CytoDyn and its Affiliates have provided or made available to Vyera prior to the Effective Date, copies of all material and relevant information (including all material agreements) with respect to the CytoDyn Know-How and the CytoDyn Patents (other than information that is confidential information of a Third Party and subject to obligations of confidentiality) and such information is true, complete and correct. CytoDyn has provided to Vyera an accurate, current, copy of each of the agreements under which CytoDyn has licensed Patents or Know-How used in the Development of the Licensed Product (the "Existing Licenses"), including all amendments thereto. To CytoDyn's Knowledge, no material breach of any of the Existing Licenses exists as of the Effective Date which would give any party thereto the right to terminate the same. The Existing Licenses are identified on Schedule 9.2(b). (c) The Patents set forth on Attachment A represent all Patents that CytoDyn or any of its Affiliates Controls that Cover or that disclose any Invention necessary or useful for the Commercialization of the Licensed Product in the Territory in the Field as of the Effective Date. CytoDyn is the sole and exclusive owner of the entire right, title and interest in the CytoDyn Patents owned by CytoDyn free of any encumbrance, lien, or claim of ownership by any Third Party. With respect to CytoDyn Patents Controlled but not owned by CytoDyn, CytoDyn has the right to grant the license granted to Vyera under Section 2.1 on the terms set forth herein, and such license does not conflict with the terms of any of the Existing Licenses. (d) CytoDyn or one of its Affiliates Controls all CytoDyn Know-How which is necessary or useful for the Commercialization of the Licensed Product in the Territory in the Field. (e) To CytoDyn's Knowledge, there is no actual or threatened infringement or misappropriation of the CytoDyn Know-How or the CytoDyn Patents by any Person in the Territory in derogation of the rights granted to Vyera in this Agreement. (f) To CytoDyn's Knowledge as of the Effective Date and without any additional independent investigation by its outside patent counsel other than such freedom to operate analysis as have previously been performed and shared with CytoDyn, the Commercialization of the Licensed Product in the Field in the Territory will not infringe or misappropriate the Patents or other intellectual property or proprietary rights of any Third Party in the Territory. + +Source: CYTODYN INC., 10-Q, 1/9/2020 + + + + + +(g) The CytoDyn Patents that are owned by CytoDyn have been filed and maintained properly and correctly and are being diligently prosecuted in the U.S. Patent Office in accordance with Applicable Law. All applicable fees related to the filing or maintenance of the CytoDyn Patents have been paid on or before the due date for payment. (h) All current and former officers, employees, agents, advisors, consultants, contractors or other representatives of CytoDyn or any of its Affiliates who are inventors of or have otherwise contributed in a material manner to the creation or development of any CytoDyn Know- How or the CytoDyn Patents, that in each case, is owned by CytoDyn, have executed and delivered to CytoDyn or any such Affiliate an assignment or other agreement regarding the protection of proprietary Confidential Information and the assignment to CytoDyn or any such Affiliate of any CytoDyn Know-How and the CytoDyn Patents, the current form of which has been made available for review by Vyera. To CytoDyn's Knowledge, no current officer, employee, agent, advisor, consultant or other representative of CytoDyn or any of its Affiliates is in violation of any term of any assignment or other agreement regarding the protection of CytoDyn Patents or CytoDyn Know-How or of any employment contract or any other contractual obligation relating to the relationship of any such Person with CytoDyn or any such Affiliate. (i) CytoDyn has used Commercially Reasonable Efforts to maintain the confidentiality of the CytoDyn Know-How. To CytoDyn's Knowledge and without any additional independent investigation by CytoDyn, no breach of such confidentiality has been committed by any Third Party. (j) To the extent permissible under Applicable Law, all employees of CytoDyn or its Affiliates performing activities under this Agreement are and shall be under an obligation to assign all right, title and interest in and to their Inventions and other Know-How, whether or not patentable, and intellectual property rights therein, to CytoDyn or its Affiliate(s) as the sole owner thereof. Vyera shall have no obligation to contribute to any remuneration of any inventor employed or previously employed by CytoDyn or any of its Affiliates in respect of any such Inventions and other Know-How and intellectual property rights therein that are so assigned to CytoDyn or its Affiliate(s). CytoDyn will be responsible for any payments to all such remuneration due to such inventors with respect to such Inventions and other Know-How and intellectual property rights therein. (k) There are no material claims, judgments or settlements against, or material amounts with respect thereto owed by, CytoDyn, or any of its Affiliates relating to the CytoDyn Know-How and the CytoDyn Patents. No claim or litigation has been brought or, to CytoDyn's Knowledge, threatened by any Person alleging, and CytoDyn has no Knowledge of any claim, whether or not asserted, that (i) any of the CytoDyn Patents is invalid or unenforceable, or (ii) the CytoDyn Know-How and the CytoDyn Patents, or the disclosing, copying, making, assigning, or licensing of the CytoDyn Know-How and the CytoDyn Patents, violates, infringes, or otherwise conflicts or interferes with, or would violate, infringe, or otherwise conflict or interfere with, any intellectual property or proprietary right of any Person. (l) Neither CytoDyn nor any of its Affiliates has previously entered into any agreement, whether written or oral, with respect to, or otherwise assigned, transferred, licensed, conveyed, or otherwise encumbered its right, title, or interest in or to CytoDyn Know-How and the CytoDyn Patents (including by granting any covenant not to sue with respect thereto) or any Patent or other intellectual property or proprietary right that would be + +Source: CYTODYN INC., 10-Q, 1/9/2020 + + + + + +CytoDyn Know-How and the CytoDyn Patents but for such assignment, transfer, license, conveyance, or encumbrance, and it will not enter into any such agreements or grant any such right, title, or interest to any Person that is inconsistent with the rights and non-exclusive licenses granted to Vyera under this Agreement. (m) Neither CytoDyn nor any of its Affiliates, nor any of its or their respective officers, employees, agents, advisors, consultants or other representatives has made an untrue statement of material fact or fraudulent statement to the FDA or any other Regulatory Authority with respect to the Development or Commercialization of the Licensed Product, failed to disclose a material fact required to be disclosed to the FDA or any other Regulatory Authority with respect to the Development or Commercialization of the Licensed Product, or committed an act, made a statement, or failed to make a statement with respect to the Development or Commercialization of the Licensed Product that could reasonably be expected to provide a basis for the FDA to invoke its policy respecting "Fraud, Untrue Statements of Material Facts, Bribery, and Illegal Gratuities", set forth in 56 Fed. Reg. 46191 (September 10, 1991). (n) CytoDyn and its Affiliates have conducted, and their respective contractors and consultants have conducted prior to the Effective Date, and shall thereafter during the Term continue to conduct, all Development of the Licensed Product in material compliance with Applicable Law. CytoDyn has conducted, and has caused its contractors and consultants to conduct, any and all pre-clinical and clinical studies related to the Licensed Product in material compliance with Applicable Law (o) CytoDyn [***] (p) CytoDyn has not breached in any material respect any agreements with any Third Party relating to the Licensed Product. + +9.3 Additional Representations and Warranties of Vyera. Vyera represents and warrants as of the Effective Date and hereinafter covenants to CytoDyn that: (a) To the extent permissible under Applicable Law, all employees, agents, advisors, consultants or contractors of Vyera or its Affiliates performing activities under this Agreement are and shall be under an obligation to assign all right, title and interest in and to any Inventions, whether or not patentable, and intellectual property rights therein, to Vyera or its Affiliate(s) as the sole owner thereof. CytoDyn shall have no obligation to contribute to any remuneration of any inventor employed or previously employed by Vyera or any of its Affiliates in respect of any such Inventions, Know-How and intellectual property rights therein that are so assigned to Vyera or its Affiliate(s). Vyera will pay all such remuneration due to such inventors with respect to such Inventions. (b) Vyera has the financial capacity to meet its obligations under this Agreement, including, without limitation, the payment of the amounts due under Article 8 and the investments required under the Minimum Requirements. (c) Neither Vyera, nor any of its Affiliates shall directly or indirectly, challenge, or assist any Third Party to dispute or challenge, in a legal or administrative proceeding the patentability, enforceability or validity of any CytoDyn Patents. + +Source: CYTODYN INC., 10-Q, 1/9/2020 + + + + + +(d) Vyera will conduct all Commercialization activities in material compliance with all Applicable Laws. (e) There is no pending, completed or, to Vyera's Knowledge, threatened, action (including any lawsuit, arbitration, or legal or administrative or regulatory proceeding, charge, complaint, or investigation) against Vyera or any of its Affiliates that would reasonably be expected to have a material adverse effect on Vyera's ability to meet its obligations under this Agreement. None of Vyera or any of its Affiliates have received any notice, warning letter or other communication from the FDA or any other governmental entity, which (i) contests the premarket clearance, licensure, registration, or approval of, the uses of, the distribution of, the manufacturing or packaging of, the testing of, the sale of, or the labeling and promotion of any pharmaceutical product, (ii) enters or proposes to enter into a consent decree with Vyera or any of its Affiliates, (iii) enjoins or prohibits Vyera or any of its Affiliates from undertaking Commercialization activities, or (iv) otherwise alleges any material violation of any Applicable Laws by Vyera or any of its Affiliates. The properties, business and operations of Vyera have been and are being conducted in all material respects in accordance with all Applicable Laws. (f) Financial Statements. The Financial Statements provided by Vyera to CytoDyn were prepared in accordance with GAAP, applied on a consistent basis for all periods presented, unless listed otherwise in the notes to its Financial Statements. The Financial Statements accurately list and fairly present, in all material respects, the financial condition and operating results of Vyera's direct parent entity as of the date of the statements, and for the periods indicated in the statements, subject to normal year-end audit adjustments. As of October 21, 2019, Vyera had at least $23,613,459 in cash on hand. + +9.4 No Other Representations or Warranties. EXCEPT AS EXPRESSLY SET FORTH IN THIS ARTICLE 9 AND SECTION 2.6 AND SECTION 14.11, NEITHER PARTY MAKES ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND WHATSOEVER, EITHER EXPRESS OR IMPLIED, WRITTEN OR ORAL, EITHER IN FACT OR BY OPERATION OF LAW, BY STATUTE OR OTHERWISE, AND EACH PARTY SPECIFICALLY DISCLAIMS ANY OTHER WARRANTIES, INCLUDING ANY EXPRESS OR IMPLIED WARRANTY OF QUALITY, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR WARRANTY OF NON-INFRINGEMENT OR AS TO THE VALIDITY OF ANY PATENTS. + +ARTICLE 10 CONFIDENTIALITY + +10.1 Nondisclosure. Each Party agrees that, during the Term and for a period of ten (10) years thereafter, a Party (the "Receiving Party") receiving Confidential Information of the other Party (the "Disclosing Party") shall: (a) maintain in confidence such Confidential Information using not less than the efforts such Receiving Party uses to maintain in confidence its own confidential or proprietary information of similar kind and value; (b) not disclose such Confidential Information to any Third Party without the prior written consent of the Disclosing Party, except for disclosures expressly permitted below; and (c) not use such Confidential Information for any purpose except those permitted by this Agreement (it being understood that this Section 10.1 shall not create or imply any rights or licenses not expressly granted under this Agreement). Notwithstanding anything to the contrary in this Agreement, the obligations of confidentiality and non-use with respect to any Know-How or trade secret within such Confidential Information shall survive such ten (10) year period for so long as such Confidential Information remains Know-How and/or protected as a trade secret under Applicable Law. + +Source: CYTODYN INC., 10-Q, 1/9/2020 + + + + + +10.2 Exceptions. The obligations in Section 10.1 shall not apply with respect to any portion of the Confidential Information to the extent that the Receiving Party can show by competent evidence: (a) is publicly disclosed by the Disclosing Party, either before or after it is disclosed to the Receiving Party hereunder; (b) is known to the Receiving Party or any of its Affiliates, without any obligation to keep it confidential or any restriction on its use, prior to disclosure by the Disclosing Party; (c) is subsequently disclosed to the Receiving Party or any of its Affiliates on a non-confidential basis by a Third Party that, to the Receiving Party's knowledge, is not bound by a similar duty of confidentiality or restriction on its use; (d) is now, or hereafter becomes, through no act or failure to act on the part of the Receiving Party or any of its Affiliates, generally known or available, either before or after it is disclosed to the Receiving Party; (e) is independently discovered or developed by or on behalf of the Receiving Party or any of its Affiliates without the application or use of Confidential Information belonging to the Disclosing Party; or (f) is the subject of written permission to disclose provided by the Disclosing Party. + +10.3 Authorized Disclosure. The Receiving Party may disclose Confidential Information belonging to the Disclosing Party, provided that any such disclosure shall be made only to the extent such disclosure is reasonably necessary, and that, other than in the instances of clauses (c) and (d) below (and with respect to (c) and (d) below, only to the extent required as set forth in an opinion of counsel), such disclosure of Confidential Information by Vyera shall not include CytoDyn trade secrets, or non-public Regulatory Approval, Regulatory Documentation, and Regulatory Materials, or CytoDyn Know-How absent the advance express written approval from CytoDyn, and in the following instances: (a) filing or prosecuting Patents as permitted by this Agreement; however, CytoDyn may not disclose any Vyera Confidential Information as it relates to a Licensed Product; (b) preparing and submitting Regulatory Materials and obtaining and maintaining Regulatory Approvals for Licensed Products; (c) prosecuting or defending litigation, including responding to a subpoena in a Third Party litigation; (d) complying with Applicable Law or court or administrative orders; (e) in communications with existing or bona fide prospective acquirers, merger partners, lenders or investors, and consultants and advisors of the Receiving Party in connection with transactions or bona fide prospective transactions with the foregoing, in each case on a "need-to- know" basis and under appropriate confidentiality provisions substantially similar to those of this Agreement (provided that the term of such confidentiality obligations in such other agreement may only extend for five (5) years); and + +Source: CYTODYN INC., 10-Q, 1/9/2020 + + + + + +(f) to its Affiliates, (with respect to CytoDyn only) sublicensees or prospective sublicensees, subcontractors or prospective subcontractors, consultants, agents and advisors on a "need-to-know" basis in order for the Receiving Party to exercise its rights or fulfill its obligations under this Agreement, each of whom prior to disclosure must be bound by obligations of confidentiality and restrictions on use of such Confidential Information that are substantially similar to those set forth in this Article 10 (provided that the term of such confidentiality obligations in such other agreement may only extend for five (5) years); provided, however, that, the Receiving Party shall remain responsible for any failure by any Person who receives Confidential Information pursuant to Section 10.3(e) or this Section 10.3(f) to treat such Confidential Information as required under this Article 10. (g) If and whenever any Confidential Information is disclosed in accordance with this Section 10.3, such disclosure shall not cause any such information to cease to be Confidential Information except to the extent that such disclosure results in a public disclosure of such information (other than by breach of this Agreement). Notwithstanding the foregoing, in the event a Party is required to make a disclosure of the other Party's Confidential Information pursuant to clauses (a) through (e) of this Section 10.3, it will, except where impracticable or prohibited by Applicable Law, give reasonable advance notice to the other Party of such disclosure and use not less than the same efforts to secure confidential treatment of such information as it would to protect its own confidential information from disclosure. Each Receiving Party shall notify the Disclosing Party promptly on discovery of any unauthorized use or disclosure of the Disclosing Party's Confidential Information by the Receiving Party or any of its Affiliates, agents or representatives. + +10.4 Terms of this Agreement. The Parties acknowledge that this Agreement and all of the respective terms of this Agreement shall be treated as Confidential Information of both Parties subject to the provisions of Sections 10.3, 10.5 and 10.6. + +10.5 Publicity. Each Party agrees not to issue any press release or other public statement disclosing information relating to this Agreement or the transactions contemplated hereby that contains information not previously publicly disclosed in accordance with this Section 10.5 without the prior written consent of the other Party, such consent not to be unreasonably withheld, delayed or conditioned. + +10.6 Securities Filings. Notwithstanding anything to the contrary in this Article 10, in the event either Party proposes to file with the Securities and Exchange Commission or the securities regulators of any state or other jurisdiction a registration statement or any other disclosure document that describes or refers to the terms and conditions of this Agreement or any related agreements between the Parties, or requires the filing of this Agreement as an exhibit to such registration, statement or disclosure document, such Party shall notify the other Party of such intention and shall provide the other Party with a copy of relevant portions of the proposed filing at least ten (10) Business Days prior to such filing (and any revisions to such portions of the proposed filing at a reasonable time prior to the filing thereof), including any exhibits thereto that refer to the other Party or the terms and conditions of this Agreement or any related Agreements between the Parties. The Party making such filing shall cooperate in good faith with the other Party to obtain confidential treatment of the terms and conditions of this Agreement or any related Agreements between the Parties that the other Party reasonably requests be kept confidential or otherwise afforded confidential treatment, and shall only disclose Confidential Information that it is reasonably advised by outside counsel is legally required to be disclosed. Each Party acknowledges that the other Party may be required by securities regulators, including the Securities and Exchange Commission, or advised by such other Party's outside counsel that the financial terms, including the milestone amounts and/or royalty rates must be included in such filings. No such notice shall be required if the description of or reference to this Agreement or a related agreement between the Parties contained in the proposed filing has been included in any previous filing made by either Party in accordance with this Section 10.6 or otherwise approved by the other Party. + +Source: CYTODYN INC., 10-Q, 1/9/2020 + + + + + +10.7 Equitable Relief. Given the nature of the Confidential Information and the competitive damage that could result to a Party upon unauthorized disclosure, use or transfer of its Confidential Information to any Third Party, the Parties agree that monetary damages may not be a sufficient remedy for any breach of this Article 10. In addition to all other remedies, a Party shall be entitled to seek specific performance and injunctive and other equitable relief as a remedy for any breach or threatened breach of this Article 10. + +10.8 Publications. CytoDyn, in its sole discretion, may publish results of all non-clinical studies conducted with respect to any Licensed Product and in its reasonable discretion may publish Clinical Trials conducted with respect to any Licensed Product; provided that the results of CytoDyn's Phase III Clinical Trial with respect to the Licensed Product in the Initial Indication meets all legal and industry standards for publication, CytoDyn shall publish such results on the clinicaltrials.gov website and CytoDyn shall provide Vyera with notification of any such publications. Should Vyera propose to make any publication relating to the Licensed Product, CytoDyn shall have the right to review all proposed publications prior to submission of such publication. Vyera shall provide CytoDyn with a copy of the applicable proposed abstract, manuscript, or presentation no less than thirty (30) days (fifteen (15) days in the case of abstracts) prior to its intended submission for publication. CytoDyn shall respond in writing promptly and in no event later than thirty (30) days (fifteen (15) days in the case of abstracts) after receipt of the proposed material with any concerns regarding patentability or protection of any Confidential Information or other comments that it may have. In the event of concern over patent protection of any intellectual property right, Vyera agrees not to submit such publication or to make such presentation that contains such information until CytoDyn is given a reasonable period of time, and in no event more than sixty (60) days, to seek patent protection in accordance with the terms of this Agreement, for any material in such publication or presentation which it believes is patentable. Subject to Section 10.3, any Confidential Information shall, if requested by CytoDyn, be removed by Vyera. Vyera will reasonably consider other comments made by CytoDyn. + +ARTICLE 11 TERM AND TERMINATION + +11.1 Term. The term of this Agreement ("Term") shall commence upon the Effective Date and, unless earlier terminated pursuant to this Article 11, shall expire on the last day of the Royalty Term. Upon the expiration of the Royalty Term, the license granted to Vyera under Section 2.1 of this Agreement shall become non-exclusive, fully-paid, royalty free, perpetual and irrevocable. Notwithstanding the foregoing, if Vyera exercises the Continuation Right (as defined in the Supply Agreement), then Vyera shall continue to purchase Licensed Product from CytoDyn pursuant to the Supply Agreement and shall pay CytoDyn for such Licensed Product the price specified in the Supply Agreement and a royalty equal to [***], provided that after the exercise of the Continuation Right, CytoDyn will not be obligated to supply Licensed Product exclusively to Vyera in the Field in the Territory. + +11.2 Unilateral Termination by Vyera. Vyera shall have the right to terminate this Agreement in its entirety: (a) on or after the second (2nd) anniversary of the Effective Date, upon written notice to CytoDyn in the event the approval by the FDA of the BLA for the Licensed Product for the Manufacture and sale of the Licensed Product in the U.S. for the Initial Indication has not been received by such second (2nd) anniversary; provided, however, that in the event of a delay that would reasonably be expected to result in the receipt of BLA approval on or after such second (2nd) anniversary, then Vyera may terminate this Agreement pursuant to this Section 11.2(a) prior to the second (2nd) anniversary upon [***] notice to CytoDyn; + +Source: CYTODYN INC., 10-Q, 1/9/2020 + + + + + +(b) following the occurrence of a Commercial Failure, upon [***] written notice to CytoDyn; provided, however, that Vyera's right to terminate this Agreement pursuant to this Section 11.2(b) shall only be exercisable during the [***] period following the date when sales data with respect to a Commercial Failure becomes available to Vyera; and (c) at any time following the second (2nd) anniversary of the First Commercial Sale of the Licensed Product, for any reason or no reason, upon one hundred eighty (180) days' written notice to CytoDyn. + +11.3 Unilateral Termination by CytoDyn. CytoDyn shall have the right to terminate this Agreement in its entirety upon written notice to Vyera on the occurrence of any of the following: (a) Vyera or any of its Affiliates directly or indirectly, challenges, disputes, or assists any Third Party to dispute or challenge, in a legal or administrative proceeding the patentability, enforceability or validity of any CytoDyn Patents; (b) Vyera fails to make a First Commercial Sale within sixty (60) days following the later of (i) the date Regulatory Approval is obtained and (ii) the date CytoDyn supplies (or is ready to supply) Vyera with the Licensed Product for sale pursuant to the Supply Agreement (the "Supply Date"); (c) Vyera breaches its obligations or covenants under Section 2.6 (Competitive Products); (d) Upon [***] written notice, in the event Vyera fails to meet any of the Minimum Requirements and has not cured such failure, to the extent curable, within such notice period; or (e) Vyera fails to make the Equity Investment within seven (7) days of the Effective Date, as required by Section 8.13. + +CytoDyn's right to terminate this Agreement pursuant to this Section 11.3 must be exercised within [***] following the occurrence of the applicable event or circumstance under the immediately preceding clauses (a)-(d) giving rise to CytoDyn's right to terminate this Agreement. + +11.4 Termination for Material Breach. Either Party (the "Non-Breaching Party") may terminate this Agreement in the event the other Party (the "Breaching Party") commits a material breach of this Agreement, and such material breach (excluding breaches of payment obligations) has not been cured within [***] after receipt of written notice of such breach by the Breaching Party from the Non-Breaching Party (the "Cure Period"). The Cure Period shall be [***] after receipt of written notice of such breach by the Breaching Party from the Non-Breaching Party for breaches of payment obligations (except with respect to Section 8.13, which is covered by Section 11.3(d) above). The written notice describing the alleged material breach shall provide sufficient detail to put the Breaching Party on notice of such material breach. Any termination of this Agreement pursuant to this Section 11.4 shall become effective at the end of the Cure Period, unless the Breaching Party has cured any such material breach prior to the expiration of such Cure Period, or, if such material breach is not reasonably susceptible to cure within the Cure Period, then, the Non-Breaching Party's right of termination shall be suspended only if, and for so long as, the Breaching Party has provided to the Non-Breaching Party a written plan that is reasonably calculated to effect a cure of such material breach, such plan is accepted by the Non-Breaching Party (such acceptance not to be unreasonably withheld, delayed or conditioned), and the Breaching Party commits to and carries out such plan as provided to the Non-Breaching Party. The right of either Party to terminate this Agreement as provided in this Section 11.4 shall not be affected in any way by such Party's waiver of or failure to take action with respect to any previous breach under this Agreement. + +Source: CYTODYN INC., 10-Q, 1/9/2020 + + + + + +11.5 Termination for Safety Concerns. Either Party shall have the right to terminate this Agreement upon written notice to the other Party upon the occurrence of Serious Adverse Events related to the use of the Licensed Product that causes such Party to conclude based upon specific and verifiable information that the Licensed Product is unsafe for human use. + +11.6 Termination for Bankruptcy. (a) Either Party may terminate this Agreement in its entirety upon providing written notice to the other Party on or after the time that such other Party makes a general assignment for the benefit of creditors, files an insolvency petition in bankruptcy, petitions for or acquiesces in the appointment of any receiver, trustee or similar officer to liquidate or conserve its business or any substantial part of its assets, commences under the laws of any jurisdiction any proceeding involving its insolvency, bankruptcy, reorganization, adjustment of debt, dissolution, liquidation or any other similar proceeding for the release of financially distressed debtors, or becomes a party to any proceeding or action of the type described above, and such proceeding or action remains un-dismissed or un-stayed for a period of more than [***]. (b) All rights and licenses granted under or pursuant to this Agreement are, and shall otherwise be deemed to be, for purposes of Section 365(n) of Title 11 of the U.S. Code and other similar laws in any jurisdiction outside the U.S. (collectively, the "Bankruptcy Laws"), licenses of rights to "intellectual property" as defined under the Bankruptcy Laws. If a case is commenced during the Term by or against a Party under Bankruptcy Laws then, unless and until this Agreement is rejected as provided pursuant to such Bankruptcy Laws, such Party (in any capacity, including debtor-in-possession) and its successors and assigns (including a Title 11 trustee) shall perform all of the obligations in this Agreement intended to be performed by such Party. If a case is commenced during the Term by or against a Party under the Bankruptcy Laws, this Agreement is rejected as provided for under the Bankruptcy Laws, and the non-bankrupt Party elects to retain its rights hereunder as provided for under the Bankruptcy Laws, then the Party subject to such case under the Bankruptcy Laws (in any capacity, including debtor-in-possession) and its successors and assigns (including a Title 11 trustee), shall continue to provide whatever rights held by and granted to the non-bankrupt Party with respect to and as licensee of the Patents and Know How licensed hereunder as such rights existed hereunder immediately before the commencement of the case under the Bankruptcy Laws. All rights, powers and remedies of the non-bankrupt Party as provided herein are in addition to and not in substitution for any and all other rights, powers and remedies now or hereafter existing at law or in equity (including the Bankruptcy Laws) in the event of the commencement of a case by or against a Party under the Bankruptcy Laws. + +11.7 Effects of Termination. All of the following effects of termination are in addition to the other rights and remedies that may be available to either of the Parties under this Agreement and shall not be construed to limit any such rights or remedies. In the event of termination of this Agreement by either Party: (a) Without limiting the effect that such termination shall have on any provisions of this Agreement, other than those provisions that this Agreement expressly provides shall survive such termination, all rights and licenses granted herein with respect to the Licensed Product shall terminate, and Vyera shall cease any and all Commercialization activities + +Source: CYTODYN INC., 10-Q, 1/9/2020 + + + + + +with respect to the Licensed Product as soon as is reasonably practicable under Applicable Law; provided that such licenses shall continue as necessary for the Parties to complete the orderly wind-down of their activities under this Agreement in accordance with Applicable Law and on a schedule mutually agreed by the Parties; (b) All payment obligations hereunder with respect to the Licensed Product shall terminate, other than those that are accrued and unpaid as of the effective date of such termination and those due in respect of sales pursuant to Section 11.7(d); (c) each Receiving Party shall, in accordance with the Disclosing Party's request, either return to the Disclosing Party or certify in writing to the Disclosing Party that it has destroyed all documents and other tangible items containing the Confidential Information of the Disclosing Party; provided, that a Receiving Party shall be permitted to retain one copy of such materials in its legal files to be used to verify compliance with its obligations hereunder and as otherwise required to comply with Applicable Law or such Party's bona fide document retention policy; (d) Vyera shall have the right to sell or otherwise dispose of any inventory of any Licensed Product on hand at the time of such termination or in the process of manufacturing provided that, Vyera shall be responsible for the payment of all obligations under Article 8 with respect to any sales of Licensed Product that occur during the subject wind-down period (including, without limitation, all royalties and milestones that may be triggered); and (e) In the event of a termination by Vyera under Section 11.2, the following terms shall apply: (i) at CytoDyn's request, the Parties will negotiate in good faith a transition services agreement (the "Transition Services Agreement"), under which Vyera will provide certain Commercialization services to CytoDyn in connection with CytoDyn efforts to Commercialize the Licensed Product in the Field in the Territory; (ii) the services to be provided by Vyera pursuant to the Transition Services Agreement (the "Transition Services") will be negotiated in good faith taking into account (A) the activities undertaken by Vyera in connection with the Commercialization of Licensed Product during the Term and (B) Vyera's then-existing resources and capabilities (it being understood and agreed that Vyera shall not (x) be required to hire any new employees or enter into any new agreements with Third Parties in order to provide the Transition Services or (y) terminate any employee or agreement the primary purpose of which is to circumvent its obligations to provide the Transition Services); (iii) the Transition Services Agreement will require Vyera to provide Transition Services for a period of up to six (6) months from the effective date of termination; provided that CytoDyn will have the ability to terminate Transition Services on a service-by-service basis as they are transitioned; and (iv) Transition Services will be reimbursed at Vyera's actual cost plus ten percent (10%) by CytoDyn. (v) At CytoDyn's reasonable request and subject to the terms of the applicable agreement, Vyera will use its reasonable best efforts to assign to CytoDyn any Third Party agreements that relate to the Transition Services matters solely for Licensed Product in the Territory in the Field. + +Source: CYTODYN INC., 10-Q, 1/9/2020 + + + + + +(vi) Notwithstanding anything to the contrary set forth in this Section 11.7, neither Party shall be required to return Confidential Information or other tangible items or documents to the other which are useful to the performance or receipt of the Transition Services until after the expiration or termination of the Transition Services Agreement. + +11.8 Remedies. Notwithstanding anything to the contrary in this Agreement, except as otherwise explicitly set forth in this Agreement, termination or expiration of this Agreement shall not relieve the Parties of any Liability or obligation which accrued hereunder prior to the effective date of such termination or expiration, nor prejudice either Party's right to obtain performance of any obligation. Each Party shall be free, pursuant to Article 12, to seek, without restriction as to the number of times it may seek, damages, costs and remedies that may be available to it under Applicable Law or in equity and shall be entitled to offset the amount of any damages and costs obtained against the other Party in a final determination under Section 12.3, against any amounts otherwise due to such other Party under this Agreement. + +11.9 Survival. In the event of the expiration or termination of this Agreement (including the expiration of the Royalty Term under circumstances in which the Parties maintain a supply relationship in accordance with the Supply Agreement), in addition to the provisions of this Agreement that continue in effect in accordance with their terms, the following provisions of this Agreement shall survive: Article 1, 10, 12 and 13, and Sections 2.2, 2.3(a), 2.5(a), 3.4, 5.4(a), 8.6 (last sentence only), 8.8, 8.10, 8.11, 8.12, 9.4, 11.1 (last two sentences only), 11.6, 11.7, 11.8, 11.9, 14.1-14.2, 14.4-14.5, 14.7-14.8, and 14.10-14.13. + +ARTICLE 12 DISPUTE RESOLUTION + +12.1 Exclusive Dispute Resolution Mechanism. The Parties agree that the procedures set forth in this Article 12 shall be the exclusive mechanism for resolving any dispute, controversy, or claim between the Parties that may arise from time to time pursuant to this Agreement relating to either Party's rights or obligations hereunder (each, a "Dispute", and collectively, the "Disputes") that is not resolved through good faith negotiation between the Parties. + +12.2 Resolution by Executive Officers. Except as otherwise provided in this Section 12.2, in the event of any Dispute, regarding the construction or interpretation of this Agreement, or the rights, duties or Liabilities of either Party hereunder, the Parties shall first attempt in good faith to resolve such Dispute by negotiation and consultation between themselves. In the event that such Dispute is not resolved on an informal basis within ten (10) Business Days, either Party may, by written notice to the other Party, refer the Dispute to a senior executive officer (or his/her delegate) of the other Party for attempted resolution by good faith negotiation within thirty (30) days after such notice is received. Each Party may, in its sole discretion, seek resolution of any Dispute that are not resolved under this Section 12.2 in accordance with Section 12.3; provided that if the Dispute is a Reserved Dispute it shall be resolved in accordance with Section 12.4. + +12.3 Arbitration. (a) Any unresolved Dispute which was subject to Section 12.2 and is not a Reserved Dispute, shall be finally resolved by binding arbitration in accordance with the Commercial Arbitration Rules and Supplementary Procedures for Large Complex Disputes of the American Arbitration Association ("AAA") and otherwise as set forth in this Section 12.3, and judgment on the arbitration award may be entered in any court having jurisdiction thereof. + +Source: CYTODYN INC., 10-Q, 1/9/2020 + + + + + +(b) If a Party intends to begin an arbitration to resolve a dispute arising under this Agreement after the provisions of Section 12.2 have been exhausted, such Party shall provide written notice (the "Arbitration Request") to the other Party of such intention and the issues for resolution. From the date of the Arbitration Request and until such time as the dispute has become finally settled, the running of the time periods as to which a Party must cure a breach of this Agreement becomes suspended as to the subject matter of the dispute. Unless the Parties otherwise agree in writing, during the period of time that any arbitration proceeding is pending under this Agreement, the Parties shall continue to comply with all those terms and provisions of this Agreement that are not the subject of the pending arbitration proceeding. (c) Within ten (10) Business Days after the receipt of the Arbitration Request, the other Party may, by written notice, add additional issues for resolution; provided, that such issues have been subject to Section 12.2 and relate directly to the matter that is the subject of the applicable Arbitration Request. (d) The arbitration shall be conducted by one arbitrator selected in accordance with the AAA Commercial Arbitration Rules and Supplementary Procedures for Large Complex Disputes as modified below, unless the matter in dispute has a value of at least $50,000,000 and either Party wishes to have the arbitration conducted by a panel of three (3) arbitrators. The arbitrator(s) shall be experienced in the subject matter of the Arbitration Request as it applies to the biotechnology or pharmaceutical business. The Parties shall cooperate to attempt to select the arbitrator(s) by agreement within twenty (20) days of the initiation of arbitration. If agreement cannot be reached within such twenty (20) days, then that AAA will submit a list of twenty (20) qualified arbitrators from which each Party shall strike unacceptable entries; provided that each Party shall not strike more than thirty-five percent (35%) of the names without cause, and rank the remaining names. The AAA shall appoint the arbitrator(s) with the highest combined ranking(s). If these procedures fail to result in selection of the required number of arbitrators, the AAA shall appoint the arbitrator(s), allowing each side challenges for cause. The arbitration shall be held in New York, New York and all proceedings and communications shall be conducted in English. The Parties shall each use their best efforts to have the arbitration hearing held as soon as practicable and in any event within sixty (60) days after the selection of the arbitrator(s). At least five (5) Business Days prior to the arbitration hearing, each Party shall submit to the other Party and the arbitrator(s) a copy of all exhibits on which such Party intends to rely at the hearing, a pre-hearing brief (up to twenty (20) pages), and a proposed ruling (up to five (5) pages). The proposed ruling shall be limited to proposed rulings and remedies on each issue, and shall contain no argument on or analysis of the facts or issues. Within five (5) Business Days after close of the hearing, each Party may submit a post-hearing brief (up to five (5) pages) to the arbitrator(s). (e) Either Party may apply first to the arbitrator(s) for interim injunctive relief until the arbitration decision is rendered or the arbitration matter is otherwise resolved; provided, that if such Party determines that such injunctive relief cannot be awarded in a timeframe adequate to protect such Party's interests, then a Party may, without waiving any right or remedy under this Agreement, seek from any court having jurisdiction any injunctive or provisional relief necessary to protect the rights or property of that Party pending resolution of the arbitration matter pursuant to this Section 12.3. The arbitrators shall have no + +Source: CYTODYN INC., 10-Q, 1/9/2020 + + + + + +authority to award punitive or any other type of damages not measured by a Party's compensatory damages. The Parties further agree that the decision of the arbitrators shall be the sole, exclusive and binding remedy between them regarding determination of arbitration matters presented. (f) The Parties hereby agree that any disputed performance or suspended performance pending the resolution of an arbitration matter that the arbitrators determine to be required to be performed by a Party must be completed within a reasonable time period following the final decision of the arbitrators. (g) Each Party shall bear its own attorneys' fees, costs, and disbursements arising out of the arbitration, and shall pay an equal share of the fees and costs of the arbitrators; provided, however, that the arbitrators shall be authorized to determine whether a Party is the prevailing Party, and if so, to award to that prevailing Party reimbursement for its reasonable attorneys' fees, costs and disbursements (including, for example, expert witness fees and expenses, photocopy charges and travel expenses), and/or the fees and costs of the arbitrators. (h) Except to the extent necessary to confirm an award or decision or as may be required by Applicable Laws, neither a Party nor an arbitrator may disclose the existence, content, or results of an arbitration without the prior written consent of both Parties. (i) By agreeing to this binding arbitration provision, the Parties understand that they are waiving certain rights and protections which may otherwise be available if a dispute between the Parties were determined by litigation in court, including the right to seek or obtain certain types of damages precluded by this provision, the right to a jury trial, certain rights of appeal, and a right to invoke formal rules of procedure and evidence. + +12.4 Reserved Disputes. Certain disputes that are specifically defined below shall be finally decided by the executive officer of one of the Parties ("Reserved Disputes"). In such cases, the executive officer of that Party shall make his or her decision with regard to the Reserved Dispute within twenty (20) days of its referral and such decision shall be final and binding and shall not be subject to Section 12.3. Reserved Disputes shall not include disputes with respect to the interpretation, breach, termination or invalidity of this Agreement. [***] + +12.5 Preliminary Injunctions. Notwithstanding anything in this Agreement to the contrary, a Party may seek a temporary restraining order or a preliminary injunction from any court of competent jurisdiction in order to prevent immediate and irreparable injury, loss, or damage on a provisional basis. + +12.6 Patent and Trademark Disputes. Notwithstanding anything in this Article 12 or Section 14.2 of this Agreement to the contrary, as between the Parties, and pursuant to Section 9.3(c) (with respect to matters subject to Section 9.3(c)), any and all issues regarding the scope, construction, validity, and enforceability of any Patent or trademark relating to a Licensed Product that is the subject of this Agreement shall be determined in a court or other tribunal, as the case may be, of competent jurisdiction under applicable Federal patent or trademark laws. + +12.7 Tolling. During the pendency of any Dispute resolution proceeding between the Parties under this Article 12, the obligation to make any payment under this Agreement from one Party to the other Party, which payment is the subject, in whole or in part, of a proceeding under this Article 12, shall be tolled until the final outcome of such Dispute has been established. Any undisputed payment obligations (including undisputed portions of a payment obligation that is subject to a proceeding under this Article 12) shall not be tolled during such Dispute. + +Source: CYTODYN INC., 10-Q, 1/9/2020 + + + + + +12.8 Confidentiality. Any and all activities conducted under this Article 12, including any and all proceedings and decisions hereunder, shall be deemed Confidential Information of each of the Parties, and shall be subject to Article 10. + +12.9 WAIVER OF RIGHT TO JURY TRIAL. In connection with the Parties' rights under this Article 12, EACH PARTY, TO THE EXTENT PERMITTED BY LAW, KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVES ITS RIGHT TO A TRIAL BY JURY IN ANY ACTION OR OTHER LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE TRANSACTIONS IT CONTEMPLATES. THIS WAIVER APPLIES TO ANY ACTION OR LEGAL PROCEEDING, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE. + +ARTICLE 13 INDEMNIFICATION AND INSURANCE + +13.1 Indemnification by Vyera. Vyera hereby agrees to defend, indemnify and hold harmless CytoDyn and its Affiliates, and each of their respective directors, officers, employees, agents and representatives (each, a "CytoDyn Indemnitee") from and against any and all claims, suits, actions, demands, liabilities, expenses and/or losses, including reasonable legal expenses and attorneys' fees (collectively, the "Losses"), to which any CytoDyn Indemnitee may become subject as a result of any claim, demand, action or other proceeding by any Third Party (each, a "Claim") to the extent such Losses arise directly or indirectly out of: (a) the breach by Vyera of any warranty, representation, covenant or agreement made by Vyera in this Agreement; (b) Commercialization activities undertaken by or on behalf of Vyera or its Affiliates; (c) the negligence, gross negligence, illegal conduct or willful misconduct of Vyera or its Affiliate, or any officer, director, employee, agent or representative thereof; except, with respect to each of subsections (a), (b) and (c) above, to the extent such Losses arise directly or indirectly from the negligence, gross negligence, illegal conduct or willful misconduct of any CytoDyn Indemnitee or the breach by CytoDyn of any warranty, representation, covenant or agreement made by CytoDyn in this Agreement. + +13.2 Indemnification by CytoDyn. CytoDyn hereby agrees to defend, indemnify and hold harmless Vyera and its Affiliates and each of their respective directors, officers, employees, agents and representatives (each, a "Vyera Indemnitee") from and against any and all Losses to which any Vyera Indemnitee may become subject as a result of any Claim to the extent such Losses arise directly or indirectly out of: (a) the breach by CytoDyn of any warranty, representation, covenant or agreement made by CytoDyn in this Agreement; (b) the negligence, gross negligence, illegal conduct, or willful misconduct of CytoDyn or its Affiliate or its licensee (other than Vyera or its Affiliate), or any officer, director, employee, agent or representative thereof; or (c) subject to Section 8.7, the infringement of Third Party Patents or the misappropriation of Third Party Know-How by the sale, offer for sale or use of any Licensed Product in the Field in the Territory; except, with respect to each of subsections (a), (b) or (c) above, to the extent such Losses arise directly or indirectly from the negligence, gross negligence, illegal conduct or willful misconduct of any Vyera Indemnitee or the breach by Vyera of any warranty, representation, covenant or agreement made by Vyera in this Agreement. + +Source: CYTODYN INC., 10-Q, 1/9/2020 + + + + + +13.3 Indemnification Procedures. (a) Notice. Promptly after a CytoDyn Indemnitee or a Vyera Indemnitee (each, an "Indemnitee") receives notice of a pending or threatened Claim, such Indemnitee shall give written notice of the Claim to the Party from whom the Indemnitee is entitled to receive indemnification pursuant to Sections 13.1 or 13.2, as applicable (the "Indemnifying Party"). However, an Indemnitee's delay in providing or failure to provide such notice shall not relieve the Indemnifying Party of its indemnification obligations, except to the extent it can demonstrate actual prejudice due to the delay or lack of notice. (b) Defense. Upon receipt of notice under this Section 13.3 from the Indemnitee, the Indemnifying Party will have the duty to either compromise or defend, at its own expense and by counsel (reasonably satisfactory to Indemnitee) such Claim. The Indemnifying Party will promptly (and in any event not more than twenty (20) days after receipt of the Indemnitee's original notice) notify the Indemnitee in writing that it acknowledges its obligation to indemnify the Indemnitee with respect to the Claim pursuant to this Article 13 and of its intention either to compromise or defend such Claim. Once the Indemnifying Party gives such notice to the Indemnitee, the Indemnifying Party is not liable to the Indemnitee for the fees of other counsel or any other expenses subsequently incurred by the Indemnitee in connection with such defense, other than the Indemnitee's reasonable out of pocket Third Party expenses related to its investigation and cooperation, except as otherwise provided in the next sentence. As to all Claims as to which the Indemnifying Party has assumed control under this Section 13.3(b), the Indemnitee shall have the right to employ separate counsel and to participate in the defense of a Claim (as reasonably directed by the Indemnifying Party) at its own expense; provided, however, that if the Indemnitee shall have reasonably concluded, based upon a written opinion from outside legal counsel, that there is a conflict of interest between the Indemnifying Party and the Indemnitee in the defense of such Claim, in which case the Indemnifying Party shall pay the fees and expenses of one (1) law firm serving as counsel for the Indemnitee in relation to such Third Party Claim. (c) Cooperation. The Indemnitee shall reasonably cooperate with the Indemnifying Party and its legal representatives in the investigation and defense of any Claim. The Indemnifying Party shall keep the Indemnitee informed on a reasonable and timely basis as to the status of such Claim (to the extent the Indemnitee is not participating in the defense of such Claim) and conduct the defense of such Claim in a prudent manner. (d) Settlement. If an Indemnifying Party assumes the defense of a Claim, no compromise or settlement of such Claim may be effected by the Indemnifying Party without the Indemnitee's written consent (such consent not to be unreasonably withheld, delayed or conditioned). Notwithstanding the foregoing, the Indemnitee's consent shall not be required of a settlement where: (i) there is no finding or admission of any violation of law or any violation of the rights of any person and no effect on any other claims that may be made against the Indemnitee; (ii) the sole relief provided is monetary damages that are paid in full by the Indemnifying Party; (iii) the Indemnitee's rights under this Agreement are not adversely affected; and (iv) there is a full release of the Indemnitee from such Claim. If the Indemnifying Party fails to assume defense of a Claim within a reasonable time, the Indemnitee may settle such Claim on such terms as it deems appropriate with the consent of the Indemnifying Party (such consent not to be unreasonably withheld, delayed or conditioned), and the Indemnifying Party shall be obligated to indemnify the Indemnitee for such settlement as provided in this Article 13. It is understood that only Vyera and CytoDyn may claim indemnification under this Agreement (on its own behalf or on behalf of its Indemnitees), and other Indemnitees may not directly claim indemnity under this Agreement. + +Source: CYTODYN INC., 10-Q, 1/9/2020 + + + + + +13.4 Insurance. Each Party, at its own expense, shall maintain comprehensive general liability, product liability and other appropriate insurance for the activities such Party undertakes pursuant to this Agreement, from reputable and financially secure insurance carriers in a form and at levels consistent with sound business practice and adequate in light of its obligations under this Agreement. Each Party shall provide a certificate of insurance (or evidence of self-insurance) evidencing such coverage to the other Party upon request. Such insurance will not create a limit to a Party's liability with respect to its indemnification obligations under this Article 13 or otherwise. This Section 13.4 will survive expiration or termination of this Agreement for the period in which the Licensed Product is being Commercialized by or on behalf of Vyera plus six (6) years. Each Party shall provide the other Party with prompt written notice of any cancellation, non-renewal or material change in such insurance that could materially adversely affect the rights of the other Party hereunder, and shall provide such notice within thirty (30) days after any such cancellation, non-renewal or material change. + +13.5 Limitation of Liability. EXCEPT FOR A PARTY'S OBLIGATIONS SET FORTH IN THIS ARTICLE 13, AND ANY BREACH OF ARTICLE 10 (CONFIDENTIALITY), IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER PARTY (OR THE OTHER PARTY'S AFFILIATES OR SUBLICENSEES) IN CONNECTION WITH THIS AGREEMENT FOR LOST REVENUE, LOST PROFITS, LOST ROYALTIES, LOST SAVINGS, LOSS OF USE, DAMAGE TO GOODWILL, OR ANY CONSEQUENTIAL, INCIDENTAL, SPECIAL, EXEMPLARY, PUNITIVE OR INDIRECT DAMAGES IN CONNECTION WITH THIS AGREEMENT, HOWEVER CAUSED, UNDER ANY THEORY OF LIABILITY, INCLUDING CONTRACT, NEGLIGENCE, OR STRICT LIABILITY, EVEN IF THAT PARTY HAS BEEN PLACED ON NOTICE OF THE POSSIBILITY OF SUCH DAMAGES. FOR CLARITY AND NOTWITHSTANDING THE PROVISIONS OF THE FIRST SENTENCE OF THIS SECTION 13.5, ROYALTIES AND MILESTONES PAYABLE TO CYTODYN IN CONNECTION WITH VYERA'S COMMERCIALIZATION OF LICENSED PRODUCTS IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT COULD CONSTITUTE DIRECT DAMAGES TO THE EXTENT AWARDED IN ACCORDANCE WITH ARTICLE 12. + +ARTICLE 14 MISCELLANEOUS + +14.1 Notices. All notices and other communications given or made pursuant hereto shall be in writing and shall be deemed to have been duly given on the date delivered, if delivered personally, or on the next Business Day after being sent by reputable international overnight courier (with delivery tracking provided, signature required and delivery prepaid), in each case, to the Parties at the following addresses, each as may be specified below (or at such other address for a Party as shall be specified by notice given in accordance with this Section 14.1). + +If to Vyera: + +Vyera Pharmaceuticals, LLC 600 Third Avenue, 10t h Floor New York, NY 10016 Attention: Legal Department Email: [***] + +with a copy to: + +Morgan, Lewis & Bockius LLP 101 Park Avenue New York, NY 10178-0060 Attention: [***] Email: [***] + +Source: CYTODYN INC., 10-Q, 1/9/2020 + + + + + +If to CytoDyn: + +CytoDyn Inc. 1111 Main Street, Suite 660 Vancouver, WA 98660 Attention: Nader Pourhassan, CEO Email: [***] + +with a copy to: + +Lowenstein Sandler LLP One Lowenstein Drive Roseland, NJ 07068 Attention: [***] Email: [***] + +14.2 Governing Law. This Agreement and all disputes arising out of or related to this Agreement or any breach hereof shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to any choice of law principles that would result in the application of the laws of any other jurisdiction. The United Nations Convention on Contracts for the International Sale of Goods shall not apply to the transactions contemplated by this Agreement + +14.3 Designation of Affiliates. Each Party may discharge any obligation and exercise any right hereunder through delegation of its obligations or rights to any of its Affiliates. Each Party hereby guarantees the performance by its Affiliates of such Party's obligations under this Agreement, and shall cause its Affiliates to comply with the provisions of this Agreement in connection with such performance. Any breach by a Party's Affiliate of any of such Party's obligations under this Agreement shall be deemed a breach by such Party, and the other Party may proceed directly against such Party without any obligation to first proceed against such Party's Affiliate. + +14.4 Relationship of the Parties. It is expressly agreed that CytoDyn, on the one hand, and Vyera, on the other hand, shall be independent contractors and that the relationship between the two Parties shall not constitute a partnership, joint venture or agency, including for tax purposes. Neither CytoDyn nor Vyera shall have the authority to make any statements, representations or commitments of any kind, or to take any action which shall be binding on the other, without the prior written consent of the other Party to do so. All persons employed by a Party shall be employees of that Party and not of the other Party and all costs and obligations incurred by reason of such employment shall be at the expense of such Party. + +14.5 Force Majeure. Both Parties shall be excused from the performance of their obligations under this Agreement to the extent that such performance is prevented by Force Majeure and the nonperforming Party promptly provides notice of the prevention to the other Party. Such excuse shall be continued so long as the condition constituting Force Majeure continues and the nonperforming Party takes reasonable efforts to remove the condition. Notwithstanding the foregoing, a Party shall not be excused from making payments owed hereunder because of a Force Majeure affecting such Party. If a Force Majeure persists for more than [***], then the Parties shall discuss in good faith the modification of the Parties' obligations under this Agreement in order to mitigate the delays caused by such Force Majeure. + +Source: CYTODYN INC., 10-Q, 1/9/2020 + + + + + +14.6 Assignment. Vyera may not assign this Agreement, or any rights or obligations hereunder without the prior written consent of CytoDyn, not to be unreasonably withheld or delayed provided that Vyera may assign this Agreement without CytoDyn's consent to an Affiliate or to a successor to substantially all of the business of Vyera to which this Agreement relates. A Change of Control shall be deemed an assignment for purposes of this Agreement. Any permitted successor or assignee of rights and/or obligations permitted hereunder shall, in writing to the other Party, expressly assume performance of such rights and/or obligations. Any permitted assignment shall be binding on the successors of the assigning Party. Any assignment or attempted assignment by Vyera in violation of the terms of this Section 14.6 shall be null, void and of no legal effect. For clarity, nothing in this Agreement shall prohibit Vyera from undergoing any Change of Control, but if Vyera undergoes a Change of Control, it will be subject to Section 2.6. CytoDyn may assign this Agreement and its rights and obligations hereunder, in whole but not in part, to any Third Party not in a materially worse (financially and otherwise) of performing CytoDyn's obligations hereunder without the prior written consent of Vyera (it being understood that any other assignment of this Agreement or any rights or obligations hereunder shall require the prior written consent of Vyera, not to be unreasonably withheld or delayed). + +14.7 Severability. If any one (1) or more of the provisions of this Agreement is held to be invalid or unenforceable by any court of competent jurisdiction from which no appeal can be or is taken, the provision(s) shall be considered severed from this Agreement and shall not serve to invalidate any remaining provisions hereof. The Parties shall make a good faith effort to replace any invalid or unenforceable provision with a valid and enforceable provision such that the objectives contemplated by the Parties when entering this Agreement may be realized. + +14.8 Waiver and Non-Exclusion of Remedies. Any term or condition of this Agreement may be waived at any time by the Party that is entitled to the benefit thereof, but no such waiver shall be effective unless set forth in a written instrument duly executed by or on behalf of the Party waiving such term or condition. The waiver by either Party hereto of any right hereunder or of the failure to perform or of a breach by the other Party shall not be deemed a waiver of any other right hereunder or of any other breach or failure by such other Party whether of a similar nature or otherwise. The rights and remedies provided herein are cumulative and do not exclude any other right or remedy provided by Applicable Law or otherwise available except as expressly set forth herein. + +14.9 Further Assurance. Each Party shall duly execute and deliver, or cause to be duly executed and delivered, such further instruments and do and cause to be done such further acts and things, including the filing of such assignments, agreements, documents, and instruments, as may be necessary or as the other Party may reasonably request in connection with this Agreement or to carry out more effectively the provisions and purposes hereof. + +14.10 Headings. The headings of each Article and Section in this Agreement have been inserted for convenience of reference only and are not intended to limit or expand on the meaning of the language contained in the particular Article or Section. + +14.11 Construction. Except where the context otherwise requires, wherever used, the singular shall include the plural, the plural shall include the singular, and the use of any gender shall be applicable to all genders. Whenever this Agreement refers to a number of days without using a term otherwise defined herein, such number refers to calendar days. The terms "including," "include," "includes" or "for example" shall not limit the generality of any description preceding such term and, as used herein, shall have the same meaning as "including, but not limited to," and/or "including, without limitation." The language of this Agreement shall be deemed to be the language mutually chosen by the Parties and no rule of strict construction shall be applied against either Party hereto. Each Party represents that it has been represented by legal counsel in connection with this Agreement and acknowledges that it has participated in the drafting hereof. In interpreting and applying the terms and provisions of this Agreement, the Parties agree that no presumption will apply against the Party which drafted such terms and provision. + +Source: CYTODYN INC., 10-Q, 1/9/2020 + + + + + +14.12 Entire Agreement. This Agreement, including the Attachments hereto, sets forth the complete, final and exclusive agreement and all the covenants, promises, agreements, warranties, representations, conditions and understandings between the Parties hereto with respect to the subject matter hereof and supersedes, as of the Effective Date, all prior and contemporaneous agreements and understandings between the Parties with respect to the subject matter hereof; including the Mutual Confidential Disclosure Agreement between the Parties dated as of January 31, 2019. There are no covenants, promises, agreements, warranties, representations, conditions or understandings, either oral or written, between the Parties other than as are set forth herein and therein. No subsequent alteration, amendment, change or addition to this Agreement shall be binding upon the Parties unless reduced to writing and signed by an authorized officer of each Party. In the event of any inconsistency between the body of this Agreement and either any Attachments to this Agreement or any subsequent agreements ancillary to this Agreement, unless otherwise express stated to the contrary in such Attachment or ancillary agreement, the terms contained in this Agreement shall control. + +14.13 Counterparts. This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. This Agreement may be executed by .pdf or other electronically transmitted signatures and such signatures shall be deemed to bind each Party hereto as if they were the original signatures. + +[Remainder of this page intentionally left blank—signature page follows] + +Source: CYTODYN INC., 10-Q, 1/9/2020 + + + + + +IN WITNESS WHEREOF, the Parties have entered into this Agreement as of the Effective Date. CYTODYN INC. + +By: /s/ Nader Z. Pourhassan Name: Nader Z. Pourhassan, Ph.D. Title: President and Chief Executive Officer + +VYERA PHARMACEUTICALS, LLC + +By: /s/ Averill L. Powers Name: Averill L. Powers Title: Chief Strategy Officer and General Counsel + +[Signature Page to Commercialization and License Agreement] + +Source: CYTODYN INC., 10-Q, 1/9/2020 + + + + + +Attachment A + +CytoDyn Patents + +[See attached.] + +Source: CYTODYN INC., 10-Q, 1/9/2020 + + + + + +Attachment B + +Development Plan + +[See attached.] + +Source: CYTODYN INC., 10-Q, 1/9/2020 + + + + + +Attachment C + +Commercialization Plan + +[See attached.] + +Source: CYTODYN INC., 10-Q, 1/9/2020 + + + + + +Attachment D + +Form of Supply Agreement + +[See attached.] + +Source: CYTODYN INC., 10-Q, 1/9/2020 + + + + + +Attachment E + +Form of Subscription Agreement + +[See attached.] + +Source: CYTODYN INC., 10-Q, 1/9/2020 + + + + + +Attachment F + +Form of Warrant Agreement + +[See attached.] + +Source: CYTODYN INC., 10-Q, 1/9/2020 \ No newline at end of file diff --git a/full_contract_txt/DIVERSINETCORP_03_01_2012-EX-4-RESELLER AGREEMENT.txt b/full_contract_txt/DIVERSINETCORP_03_01_2012-EX-4-RESELLER AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..878c65d98985fd30dbf5ec156e70ef29ed701fc5 --- /dev/null +++ b/full_contract_txt/DIVERSINETCORP_03_01_2012-EX-4-RESELLER AGREEMENT.txt @@ -0,0 +1,209 @@ +RESELLER AGREEMENT This agreement ("Agreement") dated as of January 11, 2011 ("Effective Date") is between Diversinet Corp. ("Diversinet"), an Ontario corporation with its principal place of business located at 2235 Sheppard Avenue East, Suite 1700, Toronto, Ontario, Canada M2J 5B5, and 2205925 Ontario Limited, with its principal place of business located at 111 Main Street West, Suite 304, North Bay, Ontario P1B 2T6 (the "Reseller"). Diversinet and the Reseller are hereinafter referred to individually as a "Party" and, collectively, as the "Parties". The Schedules attached hereto shall form an integral part of this Agreement, and all references to this Agreement shall be deemed to include the Schedules. WHEREAS Diversinet is a provider of mobile device security and authentication solutions for the mobile data ecosystem, and is the owner of certain software products, user documentation and services and the related trade-marks; AND WHEREAS Reseller has represented that it is qualified and desires to act as a reseller of certain of Diversinet's products within a certain defined territory, and agrees to use its best efforts to market and sell such products in such territory; NOW THEREFORE, for and in consideration of the mutual promises and commitments contained hereafter and other considerations, the receipt and sufficiency of which is hereby acknowledged, the Parties have entered into this Agreement for the purpose of permitting Reseller to market and sell certain of Diversinet's products pursuant to the terms and conditions set out as follows. 1. Appointment Subject to payment of the Annual Minimum Commitment ("AMC" - defined herein), Diversinet hereby grants to Reseller an exclusive, non- transferable and non-assignable right to market, sell, and sub-license those Diversinet products listed in Schedule 2 (the "Products") within the territory listed in Schedule 3 (the "Territory") to Canadian headquartered companies, and governmental and broader public sector entities located in Canada. Reseller's customers (the "Customers") are defined as those organizations/enterprises that will market and manage the end-users of the Products (the "End-Users"). Reseller acknowledges and agrees that it does not have the right to assign sub-resellers under this Agreement outside of the Territory, except with the prior written consent of Diversinet. Furthermore, if Reseller terminates the AMC in the manner contemplated in Schedule 3, the exclusive license above shall revert to being a non- exclusive license. In either case, Reseller will have the non-exclusive right to contract in the rest of the world, excluding the United States. If Reseller identifies End- Users in the United States, with the prior written consent of Diversinet, Reseller may sell the Products to the End-Users. United Stated revenues will not be counted against the AMC however Reseller will be entitled to the discount rates as indicated in Schedule 3.. In addition, Diversinet hereby grants to Reseller the right to use those Diversinet trademarks and copyrighted materials with respect to the Products solely for the purpose of marketing and distribution of the Products as authorized hereunder. Reseller acknowledges that the use of such trademarks and copyrighted materials does not create in its favour any right, whether of ownership or otherwise, to such trade-marks and copyrighted materials, and that all rights arising from the use thereof by Reseller shall inure to the benefit of Diversinet. Reseller agrees that the rights granted to Reseller in this Section 1 are solely for the purpose of supplying the Products to Reseller, its Customers and End-Users located in the Territory. Any use outside of the rights granted herein shall require an additional license from Diversinet. 2. Ownership and Representations (a) Except as expressly granted herein, Diversinet does not grant any further rights, license or immunity to Reseller, and hereby retains and does not waive any rights it may have with respect to patents, trade-marks, copyrights, moral rights or other intellectual property or proprietary rights enforceable under the laws of any country. Reseller shall not authorize anyone to reverse engineer, decompile, alter, transfer, modify or create a derivative work from any of the Products, nor may Reseller itself engage in so doing. (b) Reseller shall not make any representations or warranties regarding the use or operation of the Products other than those included in any promotional materials provided by Diversinet and any Product documentation provided by Diversinet. 3. Term and Renewal The term of this Agreement shall begin on the Effective Date and continue in effect for a period of five (5) years (the "Initial Term"), unless sooner terminated in accordance with the provisions set out herein. Upon expiration of the Initial Term, this Agreement shall automatically renew for consecutive one (1) year periods, unless terminated by Reseller within sixty (60) days prior to the expiration of the Initial Term or any renewal term, as the case may be (the Initial Term and each renewal term, collectively, the "Term"). Any annual renewal would be subject to the payment, if applicable, of the AMC as agreed to by the parties, however such AMC will not be less than the previous year AMC times 115%, payable in applicable quarterly instalments. 4. Termination (a) Either Party may terminate this Agreement: (i) Upon thirty (30) days' written notice to Reseller if Reseller fails to make any AMC payment when due under this Agreement, or when an audit, as set out in Section 13, by Diversinet reveals any under-payment for any payment due, and it is not paid within the thirty (30) day written notice period; (ii) providing thirty (60) days' written notice to the other Party if the other Party breaches any material term or condition of this Agreement, and fails to cure such breach within the 60 day period; (iii) upon providing thirty (30) days' written notice to Reseller if Reseller terminates the provisions of the Annual Minimum Commitment and fails to meet the sales targets as set out in Schedule 3. (b) This Agreement shall terminate automatically without notice and without further action by Diversinet in the event that: + + + + + +(i) Reseller ceases carrying on its business, or if a petition shall be filed, an order shall be made or an effective resolution is passed for the winding-up, dissolution or liquidation of Reseller. (c) Termination under Subsection 4(a) shall trigger a phase-out period during which Reseller may continue to provide products and services to Customers. Such phase-out period shall be the longer of (i) the remaining term of the agreement between the Reseller and its Customers, and (ii) 18 months. (d) Upon the termination of this Agreement for any reason: (1) all rights granted to Reseller hereunder shall automatically come to an end and revert to Diversinet, including without limitation any right to use, operate and provide customer service or support for the Products; (2) Reseller shall immediately pay to Diversinet all amounts due and outstanding hereunder as of the date of such termination or expiration; and (3) within five (5) days of termination of this Agreement, for whatever reason, Reseller, must: (a) destroy all copies of the Products and any associated Products documentation in its possession or under its direct control; and (b) deliver to Diversinet a written certificate warranting that it has complied with the foregoing obligations. 1. Customer Orders (a) Customer Agreements. The Parties acknowledge and agree that Reseller's Customers will acquire the Products and related services under contract with Reseller, that Diversinet shall not have any contractual interest in Reseller's Customer relationships. Prior to Reseller committing to provide any Products to a Customer, Reseller shall cause Customer to enter into purchase agreement(s) with Reseller with respect to each of the Products purchased by Customer (each, a "Customer Agreement"). Reseller agrees that it shall include terms and conditions in its Customer Agreements that are sufficient to protect Diversinet's interests as reflected in this Agreement, including, but not limited to, those terms set out in Schedule 4 hereto. Such Customer Agreements shall be subject to Diversinet's approval, which approval shall not be unreasonably withheld. Reseller shall use commercially reasonable efforts to ensure that all Customers abide by the terms of the applicable Customer Agreement(s). Furthermore, Reseller shall enforce its Customer Agreements against Customer when requested to do so by Diversinet. For greater clarity, Diversinet expects that the Reseller will include all of the points covered in Section 4 in its end user agreement. When the Reseller receives a customer order they will fax both the end user agreement and the details of the order to Diversinet and if the end user agreement contains all of the points outlined in Section 4 then Diversinet will approve the order and ship the required products to the Reseller. (b) Ordering Process. Reseller shall submit all orders to Diversinet for the applicable Products. Reseller's submission of orders to Diversinet shall comply at all times with Diversinet's reasonable procedures and requirements and are subject to acceptance by Diversinet acting reasonably. Reseller shall be solely responsible for all sales activity culminating in and including the procurement of fully-executed Customer Agreements and purchase orders specifying the Products and Services ordered and the specific number of tokens. 1. Delivery (a) Subject to Reseller's compliance with the terms and procedures set forth in this Agreement, Diversinet shall provide to Reseller or to Customers the Products properly ordered by Reseller and accepted by Diversinet in material compliance with the applicable terms hereof, notwithstanding any inconsistent or additional terms which Reseller includes in any Customer agreement. (b) Unless otherwise agreed to by the Parties, delivery of the Products shall take place via electronic transmission or by courier, and will take place within two (2) Business Days of a written request or purchase order for software and within five (5) Business Days for a standard appliance. Custom built appliances or software are subject to evaluation and delivery date will be communicated after assessment. "Business Day" shall mean 9:00 a.m. to 5:00 p.m. (Eastern Standard Time), Monday through Friday, excluding all statutory holidays observed in the Province of Ontario in Canada. Delivery will be F.O.B. Diversinet's facility. Reseller shall have fifteen (15) calendar days after the later of (i) the delivery of any of the Products by Diversinet; or (ii) any applicable evaluation period; to inspect the Products and ensure their substantial compliance with the corresponding documentation. Unless Reseller notifies Diversinet within such fifteen (15) day period that any of the Products fail to substantially comply with the relevant documentation, such Products shall be deemed accepted. In the event Reseller rejects any of the Products, Reseller shall give Diversinet written notice of rejection, specifying in reasonable detail the basis for such rejection. Diversinet will use commercially reasonable efforts to correct any nonconformance and re-deliver such Products to Reseller. 1. Reseller Covenants (a) Manner of Performance. Reseller shall: (i) use commercially reasonable efforts to market and sell the Products and Services to Customers; (ii) conduct business in a competent and professional manner that reflects favorably at all times on the Products and the goodwill and reputation of Diversinet; (iii) avoid deceptive, misleading, or unethical practices that are or might be detrimental to Diversinet or the Products, or to the public in general; (iv) not make any false or misleading representations with regard to Diversinet or to the Products; (v) not publish or employ, or cooperate in the publication or employment of, any misleading or deceptive advertising material with regard to Diversinet or the Products or related services; (vi) not make any representation, warranties or guarantees to potential Customers or to the trade with respect to the specifications, features or capabilities of the Products that are inconsistent with published statements made by Diversinet; and (vii) comply with all applicable federal, state, region, and local laws and regulations related to the performance of its duties hereunder. (b) Reporting Requirements. Reseller shall, on a monthly basis, communicate to Diversinet information about Customers as reasonably requested by Diversinet including, but not limited to, Customer business, marketing, sales and technical information, installation, service delivery and on-going maintenance information. (c) Technical Expertise. Reseller and its staff shall be conversant with the technical language conventional to the Products and similar technologies in general, and will develop sufficient knowledge of the industry, of the Products and of products competitive with the Products (including specifications, features and benefits) in order to explain in detail to potential Customers and End Users the differences between the Products and competitive products and services. (d) Branding. Reseller may provide its own branding for the Products; however Reseller will include a "powered by Diversinet" tag or such similar identifiers as mutually agreed to by the Parties. Should Reseller require Diversinet to brand the Product, then such work will be done under a separate statement of work to be agreed upon in writing by the Parties. 1. Fees and Billing + + + + + +(a) Rates. For the Diversinet Products sold or distributed by Reseller, Reseller shall pay Diversinet the applicable list price, in U.S. dollars, for such Product, less the applicable discount for each Product, all as set out in Schedule 3. Any reference to any amounts or currency in this Agreement means United States dollars or U.S. dollars. (b) Billing. Diversinet will invoice Reseller for applicable one time Token Fees and the upfront annual Validation and Support Fee upon setting up a master account for each Customer and pre-loading it with MobiSecure tokens. Other fees and charges payable under this Agreement will be invoiced to Reseller according to terms set out in this Agreement or any applicable schedules or attachments hereto. Reseller shall be responsible for payment to Diversinet of all invoiced amounts for Products and services provided by Diversinet at Reseller's request to Reseller, its Customers and/or End-Users. (c) Payment Terms. Invoices are due and payable within 30 calendar days from the invoice date or from when the amount is due, whichever is later. (d) Late Charges and Taxes. All overdue amounts shall bear interest at the rate of 1% per month (12% per annum, simple interest), or the highest rate allowed by applicable law, whichever is less, until paid in full. Interest shall accrue on a daily basis. Fees do not include any sales, transfer, use, property, value added and other taxes, or any customs duties, tariffs or other governmental charges, all of which (if any are due and have been incurred within the Territory) are assumed and payable by Reseller (except for taxes imposed on Diversinet's net income). Providing proof of an exemption from any such duty, tax or charge is the responsibility of Reseller. Diversinet acknowledges and agrees that Reseller shall withhold any applicable non-resident withholding taxes from any amount owing hereunder and remit such taxes to the applicable federal taxing authority without provision for gross-up, if Diversinet becomes a non-resident of Canada or assigns the Agreement to a non-resident of Canada and if Diversinet does not provide Reseller with an appropriate exemption thereto. (e) Network Charges. The Customer or End User shall at all times be responsible for all mobile network data, roaming or airtime charges, SMS related charges, application certification charges or marketing costs and any other fees or levies related to the cellular or wireless network over which the Products are offered and/or provisioned, as well as Customer's own Internet access fees (collectively, the "Network Charges"). None of the fees chargeable hereunder include any Network Charges and Reseller shall ensure that Customer shall indemnify and hold harmless Diversinet and Reseller against any such Network Charges that may be levied against them for the operation of the Products. 1. Training and Consulting (a) Diversinet will arrange for the initial personal technical and sales instruction of up to three (3) Reseller personnel for up to five (5) days in learning the functions, installation, integration, operation and maintenance of the Products. Such instruction shall take place in Diversinet's corporate headquarters and expenses of the Reseller personnel incurred for attending such initial instruction shall be paid by Reseller. There will be no charge for this initial training. Thereafter, Diversinet will make available to Reseller standard Product training courses generally offered by Diversinet at the list price. (a) Upon Reseller's request, Diversinet will provide Reseller with pre-sales consulting and post-sales consulting at the Diversinet's standard rates. Post-sales consulting will be provided under a separate services agreement to be entered into by the Parties, which shall include specific statement(s) of work. (b) Statements of Work ("SOW"). Fees for any future development services shall be as agreed to by the Parties in an SOW. Reimbursable expenses agreed to by Reseller shall be paid by Reseller within thirty (30) days of Diversinet's documented invoice. Diversinet shall offer to perform such work at Diversinet's then standard daily rate (currently at $1,500 per day). Reseller hereby agrees and acknowledges that Diversinet shall own all code, documentation and modifications to the code or documentation, and all copyrights, trade secrets and other intellectual property rights with respect to any such code or documentation. Diversinet hereby agrees and acknowledges that Reseller owns any and all intellectual property rights with respect to any Reseller-specific private label associated with the software. 1. Support (a) Services. Diversinet may provide, upon written agreement between the parties, the server hardware, physical environment, including physical security, HVAC and power for the server hardware, all as required to provide the Products as described in Schedule 2. Diversinet may also provide internet connectivity, by being responsible for network operation and availability from the public Internet up to the termination cables at the network interface card on the server hardware. Diversinet shall use commercially reasonable efforts to maintain connectivity, through the public Internet, between the server hardware and the wireless network operators or other network on which an End User's device operates. Diversinet specifically excludes any responsibility for any connectivity between a network operator and a wireless device, including any SMS, SMTP, or other connectivity. The products, their related service objectives and each Party's related responsibilities in respect thereto are to be more fully described in a separate agreement. (b) Service Term. During the Term, and subject to Reseller's payment of the annual Support Fees, Diversinet will provide support for the Products in accordance with the terms set out in Schedule 5. Furthermore, Diversinet will support the existing Reseller trial including Apple App Store submission until December 31, 2010. Diversinet will support the Reseller certification with Canada Health Infoway, at no additional cost, until December 31, 2010. (c) Standard Support. Reseller's Customers will be responsible for first level support to End-Users. Reseller will be responsible for second level support to its Customer. Diversinet will provide third level support to Reseller. Diversinet will accept electronic mail messages via the Internet using SMTP compliant software ("E Mail") addressed to: support@diversinet.com, from Reseller with questions regarding the functions of the Products, as well as questions about how to make full use of the software ("Support Questions"). If second level support is not being provided by the Reseller, Diversinet may, at its sole discretion, provide additional support to Reseller. In these cases, Diversinet may charge the Reseller for support services or reduce the product price discount provided to Reseller. Reseller's Support Questions must be referred to Diversinet by a single person, designated initially as Primary Technical Support Contact ("Primary Contact") set out in Schedule 1, unless Diversinet is notified in writing of an alternate technical support contact ("Alternate Contact"). The names and e-mail addresses of up to four (4) Alternate Contacts (along with the name of the particular project or department) shall be designated in a list provided by the Primary Contact via E Mail at support@diversinet.com. All Primary Contacts and Alternate Contacts (collectively, "Contacts") must be members of the designated project or department. It is Reseller's responsibility to provide + + + + + +Diversinet with an initial list of Contacts and to keep that list current in order to receive timely service. (d) Updates. During the Term, Diversinet will provide updated versions of the Products ("Updates"). Updates shall be designated by a version number with a higher number to the right of the decimal point (e.g., version 1.4 is an Update to version 1.2), but do not include New Releases or Custom Releases (which are designated with a higher number to the left of the decimal point, or at the end with a letter, respectively). Prior to delivering any Updates, Diversinet may require Reseller to sign a revised schedule if any additional grants or licenses are required for an Update. (e) Internet Access. Diversinet may provide, at no additional cost, access to Diversinet's Internet-based Frequently Asked Questions (FAQ's) archives, a defect 'fix' list, or a private discussion forum available to all Products support customers, which will be moderated by Diversinet's engineers when available. (f) Beta Versions. Diversinet may provide Reseller with access to Beta Test versions of Updates to Products as described in paragraph (d) above. (g) Update Input. Diversinet will give special consideration to Reseller's feature requests for future versions of the Products. 1. ASP Sales The Reseller may sell the Products as an Application Service Provider ("ASP") sales model. Under an ASP model, the Reseller shall provide the Products through computer-based services to End Users over a network. The Reseller shall be responsible for providing, at the Reseller's sole cost and expense, the infrastructure, network, hosting environment, support and/or website. Reseller warrants and guarantees that Diversinet shall have no obligations, representations or guarantees to the End User for sales made by the Reseller under an ASP sale. 2. Confidential Information (a) Reseller agrees that all software, documentation and materials provided with the Products and all information contained therein is owned by Diversinet. The Parties agree that any other information of a confidential or proprietary nature provided by one Party to the other from time to time, whether marked as "Proprietary", "Confidential", "Secret" or any other designation implying confidentiality, is owned by the disclosing Party (all such information hereafter, collectively "Trade Secrets"). Both Parties shall treat the other Party's Trade Secrets with the same care as they treat their own confidential information of a like nature, but in no case shall the receiving Party use less care in handling the Trade Secrets than would be reasonable under the circumstances. The Parties agree not to make the other Party's Trade Secrets available in any form to any third party, or use the other Party's Trade Secrets for any purpose other than as set forth in this Agreement or as authorized by the other Party in writing. The Parties' obligations under this subsection shall survive the termination or expiration of this Agreement. (b) General Exclusions: The Parties' obligations set out in this section shall not apply to any information which is: (i) rightfully in a Party's possession before receipt from the other Party; (ii) independently developed by a Party without reference to the other Party's Trade Secrets; (iii) approved for release by written agreement with the other Party; (iv) rightfully in the public domain; (v) disclosed by requirement of a governmental agency or third party as expressly required by operation of law, regulation or court order. The disclosing Party shall promptly notify the other Party of the pending disclosure to allow the other Party to seek a protective order; or (vi) lawfully disclosed to a Party by a third party without an obligation of confidentiality to the Party. (c) It is expressly agreed that a violation of this section will cause irreparable harm to the owning Party and that a remedy at law would be inadequate. Therefore, in addition to any and all other remedies available at law, the owning Party shall be entitled to seek (without posting of a bond) preliminary, injunctive, emergency or equitable relief in the event of any actual or threatened violation of any or all of the provisions hereof. 3. Audit During the Term and for seven (7) years after the expiration or termination of this Agreement, or such longer period as required by applicable law, Reseller agrees to maintain complete books, records and accounts relevant to the computation of and accounting for the amounts payable under this Agreement. Reseller agrees to allow Diversinet or its agents and representatives the right to examine and audit such books, records and accounts during Reseller's normal business hours for no more than once per calendar quarter upon reasonable notice. If such examination reveals a deficiency in any amounts paid, Reseller agrees to pay any such deficiency forthwith upon demand, plus interest calculated in accordance with Section (Late Charges and Taxes) above and, if in excess of 5%, the cost of the audit incurred by Diversinet. 4. Limited Warranty EACH PARTY DOES NOT WARRANT TO THE OTHER THAT THE MATERIALS IT PROVIDES IN CONNECTION WITH THIS AGREEMENT WILL MEET THE REQUIREMENTS OF THE OTHER PARTY OR ITS CUSTOMERS, OR THAT THEIR OPERATION WILL BE UNINTERRUPTED OR ERROR FREE. Diversinet warrants as follows: (a) Each of the Products operates in substantial accordance with its documentation ("Operation Warranty"). With respect to the Operation Warranty, Reseller's sole remedy, and Diversinet's sole obligation, shall be to cause the Product to operate substantially in accordance with its documentation in a timely manner. All Products shall be virus-checked prior to delivery to Reseller. (b) The services provided under this Agreement shall be performed in a timely and professional manner by personnel ("Personnel") and in all material respects in accordance with the requirements set forth here in Schedule 5 (Service Level Agreement). Personnel shall be appropriately trained in the performance of such services under this Agreement and shall meet those standards generally observed by reputable and competent members of the same industry providing similar services. c) Diversinet shall ensure that there collectively is a sufficient number of employees and personnel assigned and available during the term to provide the services in accordance with the service levels and the standards and other terms and conditions of this Agreement. + + + + + + (d) Diversinet shall exercise professional and good judgement in carrying out and performing its obligations under this Agreement. (e) The Products do not contain any virus, Trojan horse, worm, trapdoor, backdoor, malicious code or other code or device designed to interfere with proper use of the Software or cause harm or injury. (h) As of the Effective Date, to the best of its knowledge, none of the Products infringes upon any third party's patent rights ("Limited Patent Warranty"). EXCEPT AS EXPRESSLY SET FORTH ABOVE, DIVERSINET PROVIDES THE PRODUCTS, DOCUMENTATION AND OTHER RELATED SERVICES (COLLECTIVELY, THE "BUNDLED PRODUCT") TO RESELLER "AS IS" WITHOUT WARRANTY, MAKES NO OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION ANY OTHER WARRANTIES OF PERFORMANCE, AND IMPLIED WARRANTIES OF NON INFRINGEMENT, MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, REGARDING THE BUNDLED PRODUCTS, EITHER AS A UNIT, OR AS INDIVIDUAL PARTS. EXCEPT AS ABOVE SET FORTH, DIVERSINET SHALL BEAR NO RISK AS TO THE PERFORMANCE OF THE BUNDLED PRODUCT, AND ALL RISK IS TO BE ALLOCATED BETWEEN RESELLER AND IT CUSTOMERS AND END-USERS, OR ANY OTHERS WHO USE THE BUNDLED PRODUCT ("USERS"). EXCEPT AS ABOVE SET FORTH, SHOULD THE BUNDLED PRODUCT PROVE DEFECTIVE, DIVERSINET SHALL NOT BEAR ANY COST WHATSOEVER FOR ANY SERVICE, REPAIR OR CORRECTION TO ANY PARTY. USERS SHALL BE SOLELY RESPONSIBLE FOR ADEQUATELY PROTECTING DATA USED IN CONNECTION WITH THE BUNDLED PRODUCT. EXCEPT AS ABOVE SET FORTH, DIVERSINET SHALL NOT BE RESPONSIBLE FOR LOST DATA, RERUN TIME, INACCURATE INPUT, WORK DELAYS OR LOST PROFITS, LOSS OF SECURITY FOR PROPRIETARY DATA OR ANY OTHER INJURIES OR DAMAGES RESULTING FROM USE OF THE BUNDLED PRODUCT. Neither Diversinet, nor its subsidiaries, nor their respective directors, officers, employees, agents, assignees, co-developers, servants and contractors, nor the Reseller has any right to make any other representation, warranty or promise of any kind with respect to any of the Products. This Agreement does not, in itself, grant any patent license or patent right of any manner or kind. Reseller will be solely responsible for determining which patent rights it may need to use the Products and for obtaining such licenses, where applicable. So long as the terms of this agreement are respected, Diversinet agrees that it will not bring any suit, claim or demand against Reseller, its Customers or End-Users for breach of Diversinet's patent rights in the Products, if any. 5. Limitation of Liability and Damages (a) EXCEPT TO THE EXTENT DIRECT FORESEEABLE DAMAGES, IN NO EVENT SHALL DIVERSINET BE LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING WITHOUT LIMITATION ANY COMMERCIAL DAMAGES OR LOSSES) AS A RESULT OF THE USE, SALE OR DISTRIBUTION OF THE BUNDLED PRODUCT, WHETHER BY WAY OF A LEGAL THEORY OF CONTRACT, TORT (INCLUDING NEGLIGENCE), PRODUCT LIABILITY, STRICT LIABILITY, OR ANY OTHER THEORY, EVEN IF DIVERSINET HAS BEEN INFORMED OF THE POSSIBILITY OF SUCH DAMAGES. (b) RESELLER WAIVES ANY RIGHT IT MAY HAVE TO RECEIVE ANY COMPENSATION OR REPARATIONS ON TERMINATION OR EXPIRATION OF THIS AGREEMENT UNDER THE LAW OF THE TERRITORY OR OTHERWISE, OTHER THAN AS EXPRESSLY PROVIDED IN THIS AGREEMENT. THE PARTIES ACKNOWLEDGE THAT THIS SECTION HAS BEEN INCLUDED AS A MATERIAL INDUCEMENT FOR DIVERSINET TO ENTER INTO THIS AGREEMENT AND THAT DIVERSINET WOULD NOT HAVE ENTERED INTO THIS AGREEMENT BUT FOR THE LIMITATIONS OF LIABILITY AS SET FORTH HEREIN. (c) The availability of the MobiSecure™ Strong Authentication service depends on many factors, including Customer's connection to the Internet, End Users' connection to the Internet, the availability of the Internet and the Internet backbone and equipment that, by its nature, is not fault tolerant. Diversinet does not and cannot control the flow of data to or from Diversinet's network and other portions of the Internet. Such flow depends in large part on the performance of Internet services provided or controlled by third parties. At times, actions or inaction of such third parties can impair or disrupt Customers' connections to the Internet (or portions thereof). Although Diversinet will use commercially reasonable efforts to take all actions it deems appropriate to remedy and avoid such events, Diversinet cannot guarantee that such events will not occur. Accordingly, Diversinet shall have no responsibility for any failure to meet the requirements hereunder, with respect to performance issues, including without limitation: (i) caused by factors outside of Diversinet's reasonable control; (ii) that result from any actions or omissions of Customers, End Users or any third parties; (iii) that result from Customers' equipment and/or third party equipment (not within the sole control of Diversinet); (iv) caused by any act or failure to act by Customer or as a result of any Third Party Software. (d) NOTWITHSTANDING THE ABOVE, IN NO EVENT SHALL DIVERSINET'S LIABILITY RELATING TO THIS AGREEMENT (OR THE BUNDLED PRODUCT) EXCEED ONE HUNDRED PERCENT (100%) OF THE AGGREGATE AMOUNT OF THE LICENSE FEES, ROYALTIES AND SUPPORT FEES PAID BY RESELLER IN THE TWELVE (12) MONTH PERIOD PRECEDING THE EVENT OR CIRCUMSTANCE GIVING RISE TO THE ALLEGED LIABILITY ON THE PART OF DIVERSINET. (e) The limitations set forth in Section 15(a), (b), (c), (d) and (e) shall not apply in respect of (i) breach of confidentiality obligations; (ii) breach of privacy provisions as detailed in Schedule 6; (iii) the intellectual property indemnity; (iv) any Abandonment committed by Diversinet; or (v) any willful gross misconduct (including fraud). "Abandonment" means Diversinet's cessation or suspension of, or refusal to perform, its obligations under this Agreement, and such cessation, suspension or refusal (i) was knowingly intended by Diversinet to cause harm to Reseller, and (ii) was not the result of a termination of this Agreement by Diversinet in accordance with Section 4 (Termination). 1. Indemnification (a) Reseller Indemnity. Reseller shall indemnify and hold harmless Diversinet and/or any of its directors, officers, agents, employees, contractors, parent companies, affiliates, and/or subsidiaries (collectively, the "Diversinet Parties") from and against any claim, suit or proceeding by a third party based on or arising out of (i) the acts or omissions of Reseller in connection with its performance or failure to perform any other obligations in this Agreement or any agreement with a Customer, and (ii) any unauthorized representation or any misrepresentation of fact to any third party with respect to one or more of the Diversinet Parties or Products made by Reseller or any director, officer, agent, or employee of Reseller, provided that: + + + + + +(i) Diversinet promptly notifies Reseller in writing of any such claim and Reseller has sole control of any related investigation, defense and settlement negotiations; and (ii) Diversinet fully cooperates with Reseller, at Reseller's expense, in defending or settling such claim. (b) Infringement Indemnity. Diversinet shall diligently defend, indemnify and hold Reseller harmless, at its own expense, any action, loss, cost or expense brought against Reseller to the extent that it is based upon a claim that Reseller's use of the unmodified Products as permitted herein infringes upon a third party's intellectual property rights, and will pay the resulting costs, damages and legal fees finally awarded against Reseller through settlement, judgment, arbitration, mediation or otherwise in such action that are attributable to such claim, provided that: (i) Reseller promptly notifies Diversinet in writing of any such claim under patent law and Diversinet has sole control of any related investigation, defense and settlement negotiations; and (ii) Reseller fully cooperates with Diversinet, at Diversinet's expense, in defending or settling such claim. (c) Should any of the Products become, or in Diversinet's sole opinion is likely to become, the subject of any third party intellectual property infringement claim, Reseller shall permit Diversinet, at Diversinet's sole option and expense, to: (i) procure for Reseller the right to continue to use such Product; or (ii) modify such Product so that it becomes non-infringing; (d) Diversinet shall have no liability for any claim based upon: (i) use of other than a current or the last prior release to the current unaltered version of the Products; or (ii) use, operation or combination of the Products with non-Diversinet programs, data, equipment or documentation in a manner not reasonably contemplated by this Agreement, if such infringement would have been avoided but for such uses, operation, or combination; or (iii) Reseller's or its agent's activities after Diversinet has notified Reseller that such use may result in infringement provided that the Reseller has been provided with access to an updated version that would not be infringing. (e) THE FOREGOING STATES OUT THE ENTIRE LIABILITY OF DIVERSINET, AND THE SOLE AND EXCLUSIVE REMEDY OF RESELLER AND END-USER, WITH RESPECT TO THE INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS BY THE PRODUCTS. 2. Escrow Agreement The Parties agree to execute an escrow agreement, within 90 days of the Effective Date, with a nationally recognized escrow agent with respect to the source code for the Products and name Reseller as a beneficiary. Diversinet will then immediately send a copy of the escrow agreement to Reseller for its counter-signature. Diversinet shall, at least annually, deposit the source code in the escrow account. Costs associated with the escrow agreement shall be borne by Reseller. Reseller will be provided with a copy of any deposit correspondence and escrow agent's acceptance thereof. The escrow agreement shall provide, among other terms, that the source code shall be released to Reseller if any of the following events (collectively the "Release Conditions") occurs: (i) Diversinet ceases to support services at levels as stated in Schedule 5 under this Agreement that is not remedied within sixty (60) days after receipt of written notice of such failure; (ii) Diversinet makes an assignment for the benefit of creditors, or becomes subject to direct control of a trustee, receiver or similar authority, or Diversinet becomes subject to any bankruptcy or insolvency proceeding under federal or state statutes; or (iii) Diversinet suspends or ceases to carry on its business and a receiver, trustee or assignee does not carry on the business. 3. Non-Solicitation During the Term, the Reseller agrees that it shall not induce any person employed by Diversinet to leave Diversinet's employ to become an employee of Reseller or its agents or contractors. 4. Relationship Nothing in this Agreement shall be construed so as to create a joint venture, partnership, employer/employee, franchisor/franchisee or principal/agent relationship between the Parties. Reseller and Diversinet are independent contracting parties. Neither Reseller nor its employees, consultants, contractors or agents have any authority to bind Diversinet by contract or otherwise to any obligation. 5. Choice of Forum This Agreement shall be governed by the laws of the province of Ontario, Canada, without regard to its conflict of laws principles. Any litigation or other dispute resolution between the Parties relating to this Agreement or its construction shall take place in the courts of Toronto, Ontario, Canada. The Parties consent to the personal jurisdiction of, and venue in, the provincial and federal courts therein. The Parties agree that the United Nations Convention on Contracts for the International Sale of Goods shall not apply to this Agreement. No action against Diversinet regardless of form, including negligence, arising out of any claimed breach of this Agreement or transactions under this Agreement may be brought by Reseller more than two years after the cause of action has accrued. 6. Assignment Without the express prior written consent of Diversinet (not to be unreasonably refused), Reseller may not assign this Agreement or its interest herein in whole or in part but Reseller shall continue to be responsible should the assignee fail to perform. Diversinet may assign this Agreement at any time and in such event, this Agreement shall continue in full force and effect as if the assignee were named as the licensor in the first instance but Diversinet shall continue to be responsible should the assignee fail to perform. This Agreement shall be binding upon and inure to the benefit of the successors and permitted assigns of the Parties. 7. Interpretation + + + + + +This Agreement, including all Schedules, attachments and addenda, is the entire agreement constituting the complete and exclusive statement of the terms and conditions between the Parties with respect to the subject matter hereof, and cancels and supersedes all previous negotiations, commitments, writings and agreements that the Parties may have entered into. The Parties acknowledge that they have read this Agreement, understand it and agree to be bound by its terms and conditions. Except for Diversinet's unilateral right to update certain Schedules as specifically set out in such Schedules, any subsequent waiver or modification of this Agreement or any part hereof shall only be effective if in writing and signed by both Parties. No delay or failure to enforce any right under this Agreement shall be considered a waiver of that Party's rights to thereafter enforce each and every right and provision of this Agreement. In addition, headings set out in this Agreement are an organizational aid, not a substantive part of this Agreement, and are not intended to limit or expand the language of each section. Any person signing this Agreement (or any later modifications or addenda) on behalf of Reseller warrants that he or she has the authority to bind Reseller. Time shall be of the essence of this Agreement. 8. Attorney Fees The prevailing Party (as determined by the finder of fact) in any law suit or other dispute resolution to enforce or interpret any part of this Agreement shall be entitled to recover, as a costs of suit, reasonable attorney's fees as determined by the finder of fact (including, but not limited to, costs, expenses and fees on appeal). 9. Severability If any part of this Agreement shall be found invalid or unenforceable by a court of competent jurisdiction, said portion shall be severed from the Agreement, and the remainder shall be interpreted so as to reasonably effect the intention of the Parties. Any limitation of liability, disclaimer of warranties and exclusion of damages set out in this Agreement are expressly intended to exist independently from, and to be severable from, this Agreement. 10. Force Majeure Neither Party shall in any circumstances be liable to the other for any loss of any kind whatsoever including, but not limited to, any damages or abatement of charges whether directly or indirectly caused to or incurred by the other Party by reason of any failure or delay in the performance of its obligations hereunder which is due to circumstances beyond the reasonable control of the affected Party, including, without limitation, acts of God, acts of terrorism, fire, flood, strike, labour disputes, civil, commercial sabotage, statute order or any regulation of any government public or local authority. 11. Compliance with Laws The Products include software ("Software") that is commercial computer software developed at private expense, and in all respects is proprietary data belonging solely to Diversinet or its suppliers. Reseller shall comply with all applicable export and import control and other relevant laws of any applicable jurisdiction. Determination of the applicable law is Reseller's responsibility. Reseller understands that the Products utilize cryptographic products that are highly regulated. 12. Publicity The Parties shall use commercially reasonable efforts to issue a joint press release concerning this Agreement after the execution hereof. Any further use of the other Party's name or logo in any publicity materials is prohibited without such other Party's prior written consent, which consent shall not be unreasonably withheld. 13. Notices Any notice, demand, or communication between the Parties shall be deemed given and received: (i) when personally delivered; (ii) when transmitted by facsimile with proof of transmittal; or (iii) five (5) days after deposit (properly addressed with postage prepaid) with the postal service for registered/certified mail. The addresses and contact information may be changed at any time by giving written notice as allowed under this section. Reseller's address and contact information are as set out in Schedule 1. Address and contact information for Diversinet are as follows: Diversinet Corp. Attention: Chief Financial Officer 2235 Sheppard Avenue East, Suite 1700 Toronto, Ontario, Canada M2J 5B5 Phone: 416-756-2324 Fax: 416-756-7346 14. Survival Any terms or conditions of this Agreement by which obligations of either Party are expressed to be applicable or which extend or may extend beyond termination of this Agreement shall survive the expiration or termination hereof. 15. Language This Agreement shall be interpreted consistent with its English linguistic construction, and all communications between the Parties shall be deemed to be conducted in the English language. Reseller will be responsible, at its own cost and expense, for any language and documentation localization for the Territory. 16. Counterparts This Agreement may be executed in two or more counterparts, by original or facsimile transmission, each of which so executed shall be deemed to be an original and such counterparts together shall constitute one and the same document. IN WITNESS WHEREOF the Parties have signed this Agreement, as of the date first written above, by their duly authorized representatives. 2205925 Ontario Limited DIVERSINET CORP. + + Signature:__________________________________ Signature:__________________________ + +Print Name: Dr. Wendy Graham Print Name: Albert Wahbe + +Title: President Title: CEO + + + + + + + +Schedule 1 Reseller Information + + # + +Date Signed_________________________________ Date Signed________________________ + +Name 2205925 Ontario Limited + +Street Address 111 Main Street West, Suite 304 + +City North Bay, ON + +Country Canada + +Zip/Postal Code P1B 2T6 + +Billing Address (if different from above) Shipping Address (if different from above) Telephone Facsimile Person Signing Contract Dr. Wendy Graham + +E-mail Address drgraham@vianet.ca + +Primary Technical Support Contact Address and Contact Information for Notice section in the Agreement + + + + + +Schedule 2 Products Unless otherwise agreed to by the Parties, the Products shall mean the following: 1. MobiSecure® Wallet and Vault MobiSecure® Vault server allows subscribers to securely store and manage their personal data and other information, select the information to be downloaded to their mobile devices and share it with others via email, fax or SMS messaging. The MobiSecure® Vault server is designed to host and manage a variety of different types of personal information e.g. financial, health, identities and passwords. It provides a framework for administrators to define and customize the information to be hosted and managed and supports a plug-in architecture and web service interfaces to allow for rapid integration with external information, payment and messaging systems. MobiSecure® Wallet application works in conjunction with the MobiSecure® vault server. It is designed to run on desktop computers and mobile platforms including Java based phones, RIM Blackberries®, Microsoft Windows Mobile®, iPhone, Android and BREW devices. The Wallet application provides offline and online access to personal information. Information is stored in the device for instant and offline access securely using a patented technique. The information is synchronized automatically or upon user's request with the vault server using a secure data synchronization protocol. Users may use the wallet application to access their information instantly when they are traveling, retrieve additional information from the vault server or send their information to others via email, SMS or fax. The wallet application includes an embedded software One-Time-Password (OTP) token to allow for secure and easy access to the vault server using dynamic password based authentication. The MobiSecure® Wallet SDK and MobiSecure® Vault API allows customers and third party developers to build secure mobile applications by leveraging Diversinet's Wallet secure container services. Applications features and benefits (utilizing Wallet and Vault) include: Patient Portal The Patient Portal is a set of web pages designed to permit patients to display, add, delete and update information pertaining to their demographics, attending physicians, chronic conditions, allergies, immunizations and messages received from registered doctors and clinical staff. The Physician's Tool This is a windows based application which permits doctors and authorized 'circle of care' workers to access patient records stored in the information repository. These users may add, delete or update the patient records and may also 'Validate' existing records. Validation consists of marking the records as 'Validated' and making them read only from that point to maintain record values that the physician has agreed to by validating the record. The Physician's Tool also can create and display secured messages to the patient which will be protected by the Diversinet MobiSecure® Health platform. The tool can also display a complete record of messages sent to the patient with associated time and date of acknowledgment from the patient. The administrator users of the tool can also add and delete doctors and other circle of care worker accounts in order to administer the operation of the clinical side of the Diversinet Platform. Message Manager The Message Manager is a tool used to collect and display incoming patient messages to the clinic and answer's to previously sent questions from the clinic. The Message Manager permits the user to prepare reply messages as well as automatically preparing an audit trail of all display and reply activities. Message Generator The Message Generator is an extension of the messaging tool in the Physician's Tool above, used to create user reminder messages based upon reminder criteria and the user records in the repository for recurring action requirements. Examples include recurring tests (i.e. PAP, colonoscopy, recurring blood work supporting medications), reminders about health and lifestyle choices, medication reminders.) 2. MobiSecure® Strong Authentication MobiSecure® Strong Authentication is a fully automated, OATH-standards based strong authentication server product. It is available as a fully configured appliance or a packaged software product and is designed to be easy to deploy and easy to use for high-volume Internet or wireless- based strong authentication. Its supported clients operate on mobile phones, personal computers, USB stick and can also be embedded into microchip or smart card technologies. The system supports Over-the-Air and Over-the-Web MobiSecure SoftToken delivery. The same system also supports the MobiSecure Validation Server for ongoing one-time password (OTP) validation for user authentication. MobiSecure Strong Authentication components are: The MobiSecure® Strong Authentication Platform contains the following components: 1. MobiSecure Provisioning Server 2. MobiSecure Validation Server 3. MobiSecure SMS Server 4. MobiSecure Registration/Administration Server 5. MobiSecure SoftToken Client MobiSecure® SoftToken: MobiSecure SoftToken is a client-side software token that is available as a Mobile SoftToken or as PCToken. It can be easily delivered, downloaded and embedded into a user's personal computer, PDA or mobile phone. It performs basic functions for managing and generating one-time password values. The client-side software token is easily delivered, downloaded and installed into a user's device. MobiSecure® SoftToken supports both time based and event based one-time passwords. Event based one-time passwords expire once they are used and are no longer valid. Time based one-time passwords expire once they are used or the valid time period elapses, whichever comes first. MobiSecure® SoftToken can be embedded into customer client applications using SDK's for mobile platforms and Windows PC. Key features of + + + + + +the MobiSecure® Strong Authentication Toolkit are listed below: 1. Lightweight library allows for a modular implementation- use only the components you need 2. Client API available in C and Java programming languages for software clients a. Allows organizations to develop their own clients or integrate with existing applications b. DLL provided for rapid development on Microsoft Windows platform 3. Server API a. SPML interface for integrating enterprise applications b. SPML Java client libraries for rapid integration c. Free Radius interface to OTP Validation Server 3. MobiSecure® SMS Messaging MobiSecure® SMS Messaging leverages the familiarity and popularity of SMS messaging to create a secure messaging solution that utilizes state of the art AES encryption technology to securely transmit and receive SMS messages. Messages can be both 1-Way (Push) based and 2-Way (Pull or Push-Pull) based between mobile users and backend server applications. Unlike traditional SMS service, MobiSecure® SMS Messaging subscribers will automatically receive message delivery and read confirmations on their mobile device. The MobiSecure® SMS Messaging solution offers a fully integrated secure gateway environment. This simplifies and eliminates extensive integration efforts with multiple gateways globally. High-level APIs, allow for the submission of text messages from a third party application or directly from the handset itself. + + + + + +Schedule 3 Territory, Sales Targets, Prices and Discount Annual Minimum Commitment ("Annual Minimum Commitment" or "AMC"). During the Term of the Agreement, Reseller shall pay to Diversinet an Annual Minimum Commitment, payable as follows: a) A total of four hundred thousand ($400,000) dollars shall be paid by Reseller to Diversinet as of the Effective Date. b) A total of seven hundred thousand ($700,000) dollars shall be paid by Reseller in quarterly instalments of $175,000 to Diversinet on each of December 1, 2011, March 1, 2012, June 1, 2012 and September 1, 2012. c) A total of one million ($1,000,000) dollars shall be paid by Reseller in quarterly instalments of $250,000 to Diversinet on each of December 1, 2012, March 1, 2013, June 1, 2013 and September 1, 2013. d) A total of one million three hundred thousand ($1,300,000) dollars shall be paid by Reseller in quarterly instalments of $325,000 to Diversinet on each of December 1, 2013, March 1, 2014, June 1, 2014 and September 1, 2014. e) A total of one million six hundred thousand ($1,600,000) dollars shall be paid by Reseller in quarterly instalments of $400,000 to Diversinet on each of December 1, 2014, March 1, 2015, June 1, 2015 and September 1, 2015. AMC Tokens. For each contract year that the AMC applies, Diversinet shall deliver to Reseller the number of End User licenses equal to the contract year AMC divided by twenty-four (24) in satisfaction of the AMC. For the first contract year, the applicable service license fees for the Mihealth pilot production shall be deducted from the AMC. There is no carryover of the AMC from one year to the next. AMC Termination. After the first year and upon 180 days written notice, Reseller may terminate the AMC. Termination of the AMC by Reseller shall eliminate any exclusivity of the Reseller in the Territory. Territory Assuming that the AMC amounts have been paid and the Reseller has not terminated the AMC, Reseller shall have the exclusive right to contract with Canadian head quartered companies and governmental and broader public sector entities located in Canada (the "Territory"). Furthermore, Reseller will have the non-exclusive right to contract in the rest of the world, excluding the United States. Sales Targets After AMC termination, Reseller shall generate at least the following amount of new sales of the Products in each contract year (for the purpose of this Schedule 3, a contract year shall be each 12-month period commencing after the termination by Reseller of the AMC). New sales are defined as the aggregate amount of all Product sales and Support Fees paid by Reseller pursuant to pricing set out below, inclusive of any applicable discounts and exclusive of applicable taxes. If Diversinet materially reduces Reseller's Territory, the Parties shall negotiate and, acting reasonably, adjust Reseller's sales targets. Contract Year 1: $750,000 (quarterly targets at ¼ of annual amount) Contract Year 2: $1,000,000 (quarterly targets at ¼ of annual amount) Contract Year 3: $1,250,000 (quarterly targets at ¼ of annual amount) Contract Year 4 onward: $1,500,000 (quarterly targets at ¼ of annual amount) Product Prices and Discount: Diversinet maintains a product price list that details the products available and the list price. The product price list is incorporated by reference to this Agreement. The Product List Price is subject to change by Diversinet upon provision of at least thirty (30) days' written notice to Reseller. Reseller shall be entitled to the following discount to the following Diversinet's standard pricing: Discount % For annual revenues < $1m 30% For annual revenues > $1m and <$2m 40% For annual revenues > $2m 50% Product Price List Terms and Conditions ÿ Price proposals are valid for 30 days and subject to change by Diversinet at its sole discretion ÿ All prices are expressed in United States dollars ÿ Prices do not include any applicable taxes ÿ Prices do not include shipping and additional charges ÿ Support and maintenance fees are 20% of the server license fee, payable annually in advance after the first year and include: patch, maintenance and major release updates, Diversinet online technical support and email/phone technical product support from Monday- Friday, 9:00a.m.-5:00p.m., excluding statutory holidays ÿ Optional maintenance and level 2 support and training is available at $1,500 per person day (excluding travel and out-of-expenses) ÿ Professional services are available at $1,500 per person day (excluding travel and out-of-expenses) SCHEDULE 4 + +CUSTOMER TERMS & CONDITIONS + +Reseller agrees to include terms and conditions in its Customer agreements that are reflective of the following: + +(a) the Customer is granted a non-exclusive, non-transferable and non-assignable right to use the Products solely for their intended use; (b) the Customer may not reverse engineer, decompile, alter, transfer, modify or create a derivative work of the Product; (c) no ownership rights to the Products and documentation are transferred to the Customer; (d) the Customer may not use the Products otherwise than as a part of the equipment, hardware or software in which any Product has been incorporated or for which it has been delivered; + + + + + + (e) the Customer may not remove any proprietary, copyrights, trade secret or warning legend from any Products or documentation or copies thereof; (f) the Customer may not furnish the Products or documentation into any country in violation of any export control laws or regulations. The Reseller's agreements with its Customers shall also contain disclaimers of warranties and limitations of liabilities with respect to the Products and documentation at least as restrictive as those set forth in this Agreement. SCHEDULE 5 Service Level Agreement 1. Overview. This Support Plan Schedule ("SLA") details the terms for technical support provided by Diversinet during the term of this Agreement to the Reseller's Technical Support team, provided however, Reseller is current with payment of all fees. The Reseller's Subscribers shall interface with the Reseller Technical Support only. The Reseller Technical Support shall escalate product issues of a certain severity and above to Diversinet Technical Support. This SLA specifically addresses: (i) the service levels definition, measurement and minimum service standard in effect for the product, and (ii) technical support definition, availability and response timeframes. 1.1 Reseller Technical Support Escalation Path Around Product Issues 1.a.1 Subscriber call arrives at the Reseller Level 1 Support: the Reseller Level 1 Support will open a trouble ticket and attempt to resolve the issue. If no resolution, trouble ticket escalates to the Reseller Level 2 Support. 1.a.2 Level 2 Support attempts to resolve the Subscriber trouble ticket utilizing documentation, tools and procedures provided with the product. If Level 2 Support can't resolve the problem, Level 2 shall make a judgment call as to whether this appears to be a Subscriber problem or a Diversinet product related problem. Level 2 will escalate the trouble ticket to the Reseller Engineering Maintenance and Escalations. (EME). 1.a.3 The Reseller's EME will investigate. If this is indeed a Subscriber related problem, EME will be responsible for resolution. If EME determines this is actually a Diversinet Software issue, EME will send the trouble ticket back to Level 2 for dispatch to Diversinet. Level 2 Support will escalate the trouble ticket to Diversinet for resolution. Level 2 Technical Support still owns the Subscriber relationship. Anyone in Reseller Level 2 Technical Support can escalate to Diversinet. 1. Diversinet Support Service Availability. Technical Support Availability. Diversinet Technical Support will be available to accept and respond to problem calls or email from Reseller's Technical Support from 9:00 am - 5:00 pm Eastern Standard Time (US), 5 days a week (Monday through Friday), 52 weeks a year, excluding United States and Canadian national holidays. During such hours, technical support calls or email will be answered immediately by the support staff. Diversinet will provide a phone option to speak directly to a trained technical support representative. Diversinet will make the reasonable commercial effort to answer promptly to calls. 2.1 Diversinet Contact information + + 2.2 Reseller Contact information + + 2.3 Response Time "Response Time" shall mean the time it takes to respond to a request specific to the Severity (defined below) of the incident as described below. In the event the response time is not met the incident shall be escalated as described below. Escalation of Incident: Definitions of Severity levels Severity 1 Problems. Severity 1 Problems generally include any events that have a significant impact on the operations of the system and have an impact on Subscribers' use of the Software, such as: ÿ + +Designation Name (if applicable) Direct Tel. No Cell Tel E-Mail + +Technical Support N/A 416 756 2324 x 300 N/A support@diversinet.com + +Technical Support & Escalation Manager Charles Blair 416 756 2324 x 234 416 562 1773 cblair@diversinet.com + +TS VP David Annan 416 756 2324 x 232 416 587 0108 dannan@diversinet.com + +Designation Name (if applicable) Direct Tel. No Cell Tel E-Mail + +Technical Support & Escalation Manager + +TS VP + +System or application is down or unavailable; transactions can't be processed. ÿ Any event that significantly disrupts or threatens to disrupt service levels of the Software due to errors in the software, tools or system configuration provided by Diversinet. ÿ Any online application outage that significantly impacts the online availability and service level of the Software. ÿ Consistent degradation of performance (response time or function) that significantly impairs the Software. ÿ Any repeating unresolved incidents that have significant impact on the operations of the Diversinet Based Service or Subscribers' use of the Software. + + + + + +ÿ Resolution may involve software changes, configuration modifications, operating procedure changes or 'workarounds'. Resolution shall be defined as a situation wherein the system is restored to a state wherein the effective outage is relieved. Severity 2 Problems. Severity 2 Problems generally includes any events (other than Severity 1 Problems) that adversely affect the operation of the Diversinet Based Service or the User Software, such as: ÿ An error that disables only certain non-essential functions of the User Software and may result in degraded operations, including without limitation, an error that results in computer transactions not processing properly. ÿ An error/event that disables only non-essential functions of the User Software, but also adversely affects the use of the User Software. ÿ Resolution may involve software changes, configuration modifications, operating procedure changes or 'workarounds'. Resolution shall be defined as a situation wherein the system is restored to a state wherein the effective outage is relieved. Severity 3 Problems: Severity 3 Problems generally includes minor events that do not have a significant impact or adverse effect on the operation or performance of the Diversinet Based Service or the User Software. Severity 4 Problems: Severity 4 Problems generally are potential Software enhancements or feature requests that Subscribers request of Reseller Technical Support. This is to help Diversinet track Reseller's requests and process them appropriately. Problem Isolation: Diversinet Technical Support will provide best efforts to mitigate all service affecting conditions which may arise. For each S1 - S3 incident Diversinet will produce an Incident Report provided to Reseller. Situations where there are unapproved variations made in the approved design, configuration, network or systems environments are not covered under this SLA. Furthermore, this SLA does not cover problems encountered by end users relating to hand held devices hardware, software and network problems that are outside the control of Diversinet or not supported by Diversinet. Diversinet will inform/publish to Reseller a quarterly list of mobile devices, related software and network operators and telecommunication companies that can support Diversinet software, products and services. Resolution Target: Diversinet will commit to provide a resolution to problems caused by its software, tools or procedures. Every effort will be made to prevent maintenance procedures during Scheduled Maintenance Times from affecting service availability. Table 1: Escalation Tiers and Initial Response Times + + # + +Priority Level Technical Support Initial Response (in Hours) Escalation to Manager (in Hours) Escalation to VP (in Hours) + +S1 1 2 3 + +S2 2 4 24 + +S3 4 8 48 + +S4 Next Business Day + + + + + +SCHEDULE 6 PERSONAL INFORMATION Definitions, Interpretation 1) In this Exhibit D: + +a) "Agreement" means the License Agreement between Diversinet Corp. ("Licensor") and 2205925 Ontario Limited ("Licensee") with effective date of January 10, 2011; + +b) "Personal Information" means information that is defined as "personal information" in PIPEDA, including without limitation personal health information, that is held, transmitted or stored on or by the Software licensed to Licensee under the Agreement; + +c) "PIPEDA" means the Personal Information Protection and Electronic Documents Act (Canada); and + +d) "Services" means the services provided by Licensor to Licensee under the Agreement including without limitation, the Support Services. + +2) Any capitalized term that is not defined in section 1 above has the meaning attributed thereto in the Agreement. + +3) The parties acknowledge and agree that: + +a) Licensee represents that it is an organization subject to PIPEDA and Licensor is a third party service provider to the Licensee in connection with the Services; + +b) Licensee's End Users shall interface with Licensee Technical Support only and in general, Licensor will not require access to Personal Information to provide the Services; + +c) notwithstanding subsection 3(b) above, Licensor may from time to time require access to Personal Information to provide the Services; + +d) Licensor shall only access Personal Information with the prior written consent of Licensee; + +e) Licensor shall not download, which for the purposes of this Privacy Exhibit includes copy, hold or otherwise save Personal Information, without the prior written consent of Licensee and for greater certainty, consent to access Personal Information does not constitute consent to download Personal Information; + +f) where Licensor receives consent to access, access and download or access and otherwise use Personal Information, the terms and conditions of this Privacy Exhibit shall apply to Licensor in relation to those activities; and + +g) where Confidential Information of the Licensee is also Personal Information, the provisions of this Privacy Exhibit take priority over section 7 of the Agreement in the event of any conflict. + +Ownership of Personal Information/ Prohibition on Disclosure 4) Nothing in this Privacy Exhibit shall be interpreted or construed to give Licensor any interest in or control of Personal Information and for greater certainty, as between Licensor and Licensee, Licensee owns and controls and shall continue to own and control Personal Information. + +5) Licensor shall not disclose Personal Information. For clarity, the use of Personal Information by employees, agents and representatives of Licensor in accordance with this Privacy Exhibit does not constitute the disclosure of Personal Information by Licensor to those employees, agents and representatives. + +Safeguards 6) Notwithstanding any provision to the contrary in the Agreement, Licensor shall not subcontract or assign any of the Services that may require access to or the downloading or other use of Personal Information except with the prior written consent of Licensee or as required to be disclosed by a governmental agency or third party as expressly required by operation of law, regulation or court order. + +7) Licensor shall use security safeguards that meet or exceed industry standards to protect Personal Information against such risks as loss and unauthorized access, collection, use, disclosure and destruction. + +8) Notwithstanding any provision to the contrary in the Agreement, Licensor shall not, except with the prior written consent of Licensee, access or use Personal Information from outside Canada or transmit Personal Information outside Canada. + +9) Where Licensor downloads Personal Information in accordance with this Privacy Exhibit, Licensor shall prohibit its employees, agents and representatives from downloading Personal Information onto any portable device, unless the information is encrypted in accordance with industry standards for strong encryption. + +10) Licensor shall segregate Personal Information from information of any person other than Licensee. + +11) Subject to a written direction from Licensee to securely destroy Personal Information, upon the expiry or termination of the Agreement and at any other time at the request of Licensee, Licensor shall promptly return to the Licensee Personal Information that Licensor downloaded in accordance with this Privacy Exhibit. + +Inspection and Audit 12) In addition to any other rights of inspection, review and audit Licensee may have, Licensee or a person appointed by Licensee may, at any reasonable time, on reasonable notice to Licensor, at Licensee's sole cost and expense, enter any location from or in which Licensor has accessed, used or downloaded Personal Information to inspect, review and audit the equipment, systems (including without limitation security systems), documents, processes and practices that are used in connection with the provision of the Services for the purpose of assessing Licensor's compliance with this Privacy Exhibit. Licensor shall provide all reasonable assistance to Licensee in relation to any such inspection, review and audit. + +13) Licensor shall track the access, downloading and use of Personal Information, in accordance with this Privacy Exhibit, by its employees, agents and representatives and maintain a record of such activities. Within twenty-four hours of a request, Licensor shall provide Licensee + + + + + +with a copy of any or all of the records created and maintained under this section 13. + +Licensor Employees, Agents, Representatives 14) Licensor shall ensure that it only permits access to Personal Information to those of its employees, agents and representatives who: (a) will need access to Personal Information to deliver the Services; (b) have received training in the protection of Personal Information; and (c) have agreed to comply with the provisions of sections (5), (8), (9), (10) and (12) of this Privacy Exhibit. + +Notice of Non-Compliance 15) If for any reason Licensor does not comply or anticipates that it shall be unable to comply with a provision of this Privacy Exhibit in any respect, Licensor shall promptly notify Licensee of the particulars of the non-compliance or anticipated non-compliance and of the steps it proposes to take to address or prevent the recurrence of the non-compliance or anticipated non-compliance. + +Default 16) Notwithstanding anything to the contrary in the Agreement, Licensor acknowledges and agrees that a breach of this Privacy Exhibit by Licensor which remains uncured for a period of sixty (60) days shall constitute a material breach and grounds for the termination on notice of the Agreement by Licensee without cost or liability to Licensee. Without limiting the foregoing, Licensor agrees that in addition to any other rights or remedies Licensee may have for material breach of the Agreement, Licensee has the right to an injunction or other equitable relief in any court of competent jurisdiction enjoining a threatened or actual breach of this Privacy Exhibit by Licensor. + +No Withholding 17) Licensor shall not, and hereby forever waives any and all right to, refuse to return Personal Information to enforce any alleged payment obligation or in connection with any dispute connected with the Agreement or any other matter between Licensor and Licensee. + +Survival 18) The obligations of Licensor under this Privacy Exhibit shall survive the termination of the Agreement. + + # \ No newline at end of file diff --git a/full_contract_txt/DOMINIADVISORTRUST_02_18_2005-EX-99.(H)(2)-SPONSORSHIP AGREEMENT.txt b/full_contract_txt/DOMINIADVISORTRUST_02_18_2005-EX-99.(H)(2)-SPONSORSHIP AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..2689bb31a971c70010cce8fbd1724fb9030c2495 --- /dev/null +++ b/full_contract_txt/DOMINIADVISORTRUST_02_18_2005-EX-99.(H)(2)-SPONSORSHIP AGREEMENT.txt @@ -0,0 +1,71 @@ +Exhibit h(2) SPONSORSHIP AGREEMENT + + SPONSORSHIP AGREEMENT, dated as of February 4, 2005, by and between Domini Advisor Trust, a Massachusetts business trust (the "Trust"), and Domini Social Investments LLC, a Massachusetts limited liability company ("Domini" or the "Sponsor"). + + W I T N E S S E T H: + + WHEREAS, the Trust is engaged in business as an open-end investment company registered under the Investment Company Act of 1940, as amended, and consists of one or more series; and + + WHEREAS, the Trust desires to enter into this Agreement with respect to its current and future series; and + + WHEREAS, the Trust wishes to engage Domini to provide certain oversight, administrative and management services, and Domini is willing to provide such oversight, administrative and management services to the Trust on the terms and conditions hereinafter set forth; + + NOW, THEREFORE, in consideration of the mutual covenants and agreements of the parties hereto as herein set forth, the parties covenant and agree as follows: + + 1. Duties of the Sponsor. Subject to the direction and control of the Board of Trustees of the Trust, the Sponsor shall perform such oversight, administrative and management services as may from time to time be reasonably requested by the Trust, which shall include without limitation: (a) maintaining office facilities (which may be in the office of Domini or an affiliate) and furnishing clerical services necessary for maintaining the organization of the Trust and for performing the oversight, administrative and management functions herein set forth; (b) arranging, if desired by the Trust, for directors, officers or employees of the Sponsor to serve as Trustees, officers or agents of the Trust if duly elected or appointed to such positions and subject to their individual consent and to any limitations imposed by law; (c) supervising the overall administration of the Trust, including the updating of corporate organizational documents, and the negotiation of contracts and fees with and the monitoring and coordinating of performance and billings of the Trust's transfer agent, shareholder servicing agents (if any), custodian, administrator, subadministrator (if any) and other independent contractors or agents; (d) overseeing (with advice of the Trust's counsel) the preparation of and, if applicable, filing all documents required for compliance by the Trust with applicable laws and regulations (including state "blue sky" laws and regulations), including registration statements on Form N-1A, prospectuses and statements of additional information, or similar forms, as applicable, semi-annual and annual reports to shareholders and proxy statements, and reviewing tax returns; (e) preparation of agendas and supporting documents for and minutes of meetings of Trustees, committees of Trustees and preparation of notices, proxy statements and minutes of meetings of shareholders; (f) arranging for maintenance of books and records of the Trust; (g) maintaining telephone coverage to respond to shareholder inquiries regarding matters to which this Agreement pertains to which the transfer agent is unable to respond; (h) providing + + + + + + + +reports and assistance regarding each series' compliance with securities and tax laws and each series' investment objectives; (i) arranging for dissemination of yield and other performance information to newspapers and tracking services; (j) arranging for and preparing annual renewals for fidelity bond and errors and omissions insurance coverage; (k) developing a budget for the Trust, establishing the rate of expense accruals and arranging for the payment of all fixed and management expenses; and (l) answering questions from the general public, the media and investors in the Trust regarding (i) the securities holdings of the Trust; (ii) any limits in which the Trust invests; (iii) the social investment philosophy of the Trust; and (iv) the proxy voting philosophy and shareholder activism philosophy of the Trust. Notwithstanding the foregoing, the Sponsor shall not be deemed to have assumed, pursuant to this Agreement, any duties with respect to, and shall not be responsible for, the management of the Trust's assets or the rendering of investment advice and supervision with respect thereto or the distribution of shares of any series, nor shall the Sponsor be deemed to have assumed or have any responsibility with respect to functions specifically assumed by any transfer agent, custodian, fund accounting pricing agent or shareholder servicing agent of the Trust. + + 2. Allocation of Charges and Expenses. Domini shall pay the entire salaries and wages of all of the Trust's Trustees, officers and agents who devote part or all of their time to the affairs of Domini or its affiliates, and the wages and salaries of such persons shall not be deemed to be expenses incurred by the Trust for purposes of this Section 2. The Trust shall pay all of its operating expenses, including but not limited to fees due the Sponsor under this Agreement, compensation of Trustees not affiliated with the Sponsor, governmental fees, including but not limited to Securities and Exchange Commission fees and state "blue sky" fees; interest charges; taxes and related charges; membership dues of the Trust in the Investment Company Institute and other professional or industry associations; fees and expenses of the Trust's independent auditors and accountants, of legal counsel and any transfer agent, distributor, shareholder servicing agent, recordkeeper, registrar or dividend disbursing agent of the Trust; expenses of distributing, issuing and redeeming shares and servicing shareholder accounts; expenses of preparing, printing and mailing prospectuses and statements of additional information, reports, notices, proxy statements and reports to shareholders and governmental officers and commissions; expenses connected with the execution, recording and settlement of portfolio security transactions; insurance premiums; fees and expenses of the Trust's custodian for all services to the Trust, including safekeeping of funds and securities and maintaining required books and accounts; expenses of calculating the net asset value of shares of the Trust; expenses of shareholder meetings; and expenses relating to the issuance, registration and qualification of shares of any series of the Trust. + + 3. Compensation of the Sponsor. For the services to be rendered and facilities to be provided by the Sponsor hereunder, the Trust shall pay Domini a fee accrued daily and payable monthly at an annual rate equal to 0.50% of the Trust's average daily net assets for the Trust's then current fiscal year. If Domini serves as the Sponsor for less than the whole of any period specified in this Section 3, the compensation to Domini, as Sponsor, shall be prorated. For purposes of computing the fees payable to the Sponsor hereunder, the value of the Trust's net assets shall be computed in the manner specified in the Trust's then-current prospectus and statement of additional information. + + 2 + + + + + + + + 4. Limitation of Liability of the Sponsor. The Sponsor shall not be liable for any error of judgment or mistake of law or for any act or omission in the oversight, administration or management of the Trust or the performance of its duties hereunder, except for willful misfeasance, bad faith or gross negligence in the performance of its duties, or by reason of the reckless disregard of its obligations and duties hereunder. As used in this Section 4, the term "Sponsor" shall include Domini and/or any of its affiliates and the directors, officers and employees of Domini and/or any of its affiliates. + + 5. Activities of the Sponsor. The services of the Sponsor to the Trust are not to be deemed to be exclusive, Domini being free to render oversight, administrative and/or other services to other parties. It is understood that Trustees, officers and shareholders of the Trust are or may become interested in the Sponsor and/or any of its affiliates as directors, officers, employees or otherwise and that directors, officers and employees of the Sponsor and/or any of its affiliates are or may become similarly interested in the Trust and that the Sponsor and/or any of its affiliates may be or become interested in the Trust as a shareholder or otherwise. + + 6. Duration, Termination and Amendments of this Agreement. This Agreement shall become effective as of the day and year first above written and shall govern the relations between the parties hereto thereafter, unless terminated as set forth in this Section 6. + + This Agreement may not be altered or amended, except by an instrument in writing and executed by both parties. This Agreement may be terminated at any time, without the payment of any penalty, with respect to any series or the Trust, by the Board of Trustees of the Trust, or by the Sponsor, in each case on not less than 60 days' written notice to the other party. + + 7. Subcontracting by Domini. Domini may subcontract for the performance of some or all of Domini's obligations hereunder with any one or more persons; provided, however, that Domini shall not enter into any such subcontract unless the Trustees of the Trust shall have found the subcontracting party to be qualified to perform the obligations sought to be subcontracted; and provided, further, that, unless the Trust otherwise expressly agrees in writing, Domini shall be as fully responsible to the Trust for the acts and omissions of any subcontractor as it would be for its own acts or omissions. + + 8. Severability. If any provision of this Agreement shall become or shall be found to be invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby. + + 9. Notice. Any notices under this Agreement shall be in writing addressed and delivered personally, by telecopy or mailed postage-paid to the other party at such address as such other party may designate in accordance with this Section 9 for the receipt of such notice. Until further notice to the other party, it is agreed that the address of the Trust shall be 536 Broadway, 7th Floor, New York, New York 10012, and the address of Domini shall be 536 Broadway, 7th Floor, New York, New York 10012. + + 3 + + + + + + + + 10. Miscellaneous. Each party agrees to perform such further actions and execute such further documents as are necessary to effectuate the purposes hereof. This Agreement shall be construed and enforced and interpreted in accordance with and governed by the laws of the Commonwealth of Massachusetts without reference to principles of conflicts of law. The captions in this Agreement are included for convenience only and in no way define or delimit any of the provisions hereof or otherwise affect their construction or effect. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but such counterparts shall, together, constitute only one instrument. + + IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered in their names and on their behalf by the undersigned, thereunto duly authorized, all as of the day and year first above written. The undersigned Trustee of the Trust has executed this Agreement not individually but as a Trustee under the Trust's Declaration of Trust, dated October 6, 2004, as amended, and the obligations of this Agreement are not binding upon any of the Trustees or shareholders of the Trust individually but bind only the Trust estate. + + DOMINI ADVISOR TRUST + + By: /s/ Amy L. Domini --------------------------------- Amy L. Domini Trustee + + DOMINI SOCIAL INVESTMENTS LLC + + By: /s/ Amy L. Domini --------------------------------- Amy L. Domini Chief Executive Officer + + 4 \ No newline at end of file diff --git a/full_contract_txt/DRAGONSYSTEMSINC_01_08_1999-EX-10.17-OUTSOURCING AGREEMENT.txt b/full_contract_txt/DRAGONSYSTEMSINC_01_08_1999-EX-10.17-OUTSOURCING AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..5f8a2962d90803cd56fb786e93401082e6bfb915 --- /dev/null +++ b/full_contract_txt/DRAGONSYSTEMSINC_01_08_1999-EX-10.17-OUTSOURCING AGREEMENT.txt @@ -0,0 +1,141 @@ +1 Exhibit 10.17 + + Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. + + OUTSOURCING AGREEMENT + + BETWEEN: + + MODUS MEDIA INTERNATIONAL LANDDROSTLAAN 51 7327 GM APELDOORN THE NETHERLANDS (HEREINAFTER "MMI") + + AND + + DRAGON SYSTEMS, INC. 320 NEVADA STREET NEWTON, MA 02160 U.S.A. (HEREAFTER "DRAGON SYSTEMS") + + EFFECTIVE AS OF (EFFECTIVE DATE) + +1. PURPOSE OF AGREEMENT Formalize the agreements made regarding services and products between Dragon Systems and MMI. + +2. SERVICES MMI will produce products for Dragon Systems on a Turnkey basis. Initially, services will cover 3 products, as per the attached price sheets. However, this may be extended. + +Specific services will be: + +- - Receipt and Management of master materials + +- - Supply base management + +- - Production (both components & finished goods) + +- - Delivery + +- - Inventory Management + +- - Financial Services + +Quality and Services Level Agreements will be based on mutual agreement. + +3. DELIVERY + +MMI shall deliver the Services in line with the agreed service levels to Dragon Systems. + + 2 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. + +4. ACCEPTANCE OF SERVICES + +Dragon Systems may reject the Services if they do not comply with the specification set out by Dragon \s\ JB. The Services are deemed to be accepted if MMI does not receive a notification within 60 days after delivery to Dragon Systems or its customers. + +5. PAYMENT AND PRICING + +Dragon Systems will compensate MMI for all Services rendered in accordance with the rates specified in the Annex "Prices." Unless otherwise agreed, prices shall exclude transport, insurance, VAT and Import duties (outside EC countries) to Dragon Systems' designated delivery address. + +For all materials in stock, older than 90 days, MMI will charge Dragon Systems with an Inventory Carriage Charge of [**] of its value per month. + +MMI will invoice Dragon Systems based on actual shipments that have been performed. + +Payments will be due in US dollars within 30 days after delivery, or when agreed after delivery of installments or the receipt of invoice by Dragon Systems, which ever is later. MMI shall invoice Dragon Systems indicating the performed services in US$ with reference to this Agreement. + +Dragon Systems shall be entitled to deduct from or set off against any sums which Dragon Systems may be liable to pay to MMI any amounts owed by MMI, its affiliated entities, subsidiaries or successors in interest. + +6. WARRANTY + +MMI warrants providing the Services with due diligence and care in accordance + + + + + +with the specifications set by Dragon Systems. Should MMI not supply the Services as agreed or should the Services become defective within 6 months from their delivery to Dragon Systems, Dragon Systems may at its option require MMI to complete or re-perform the Services within a reasonable period of time, rescind the contract or refuse payment of the compensation in part or in total, notwithstanding any damage claims. + +7. INDEMNITY + +MMI shall reimburse Dragon Systems and hold Dragon Systems harmless from any liabilities or obligations imposed upon Dragon Systems resulting directly or indirectly from MMI's or its employees or agents activities under this Agreement. + + -2- 3 8. LIABILITY + +Either party shall be liable for failure or delay in performance of its duties under this Agreement except for reasons beyond such party's reasonable control. MMI shall not be liable for indirect or consequential damages unless caused by intention or gross negligence. + +9. CONFIDENTIALITY + +Both parties shall take reasonable precautions to preserve in strict confidence any confidential or proprietary information obtained by them, their agents or employees concerning the business, products, equipment or services of the other party, including without limitation, trade secrets. Such reasonable precautions shall include exercising precautionary measures designed to preserve the secrecy of such information and to prevent its disclosure to third parties, except following prior consent of the other party, with such precautions being at least equivalent to those taken by each party with respect to its own confidential information. + +10. PATENTS AND COPYRIGHT + +MMI warrants that the Services supplied to Dragon Systems will not infringe any third parties' intellectual property rights. MMI will defend and indemnity Dragon Systems against a claim that the Services supplied hereunder infringe a patent or copyright and will pay resulting costs and damages provided that Dragon Systems (i) promptly informs MMI in writing of the claim and (ii) gives MMI sole control of the defense and all related settlement negotiations. MMI will either procure the right for Dragon Systems to continue using the Services or replace or modify them so that they become non-infringing or accept return of the Services for a credit equal to the price paid by Dragon Systems. + +11. COPYRIGHT AND COPYRIGHT LICENSE + +Dragon Systems hereby grants MMI the rights to copy in printed or electronic form the master materials according to the forecasted numbers given to MMI by Dragon Systems. + +12. TERM AND TERMINATION + +This Agreement shall be valid for an indefinite period. + +Both parties may terminate the Agreement with immediate effect + +- - of either party breaches a material term of the Agreement + +- - in case of a merger or change of key management or control + +- - in case of bankruptcy or similar. + +Dragon may terminate this agreement without cause by giving sixty (60) days written notice to MMI. + + -3- 4 13. GOVERNING LAW + +Any lawsuit relating to any matter arising under this Agreement may be initiated in a State or Federal Court located in the Commonwealth of Massachusetts or in any court in the Netherlands having jurisdiction over the matter. + +14. INSURANCE + +MMI shall at its own expense obtain and maintain with an insurer adequate insurance coverage in respect of any Dragon Systems property under the care, custody or control of MMI. MMI shall immediately notify Dragon Systems in writing of any theft, loss or damage to any Dragon Systems property and shall indemnify Dragon Systems in respect of the same. + +MMI + +\s\ John Dick General Manager - ------------------------------------------------------- 19 Jan. 1998 + +DRAGON SYSTEMS, INC. + + + + + +\s\ Janet M. Baker, President - ----------------------------------------------------- 12 Jan. 1998 + + -4- 5 NaturallySpeaking + + Part Number Description 1,000 units 2,500 units 5,000 units 10,000 units 25,000 units 50,000 units - ---------------------- ------------------- ------------- ------------ ------------ ------------- ------------ ------------- + + [**] + + -5- 6 Dictate Power + + Part Number Description 1,000 units 2,500 units 5,000 units 10,000 units 25,000 units 50,000 units - ---------------------- ------------------- ------------- ------------ ------------ ------------- ------------ ------------- + + [**] + + -6- 7 Dictate Classic + + Part Number Description 1,000 units 2,500 units 5,000 units 10,000 units 25,000 units 50,000 units - ---------------------- ------------------- ------------- ------------ ------------ ------------- ------------ ------------- + + [**] + + -7- \ No newline at end of file diff --git a/full_contract_txt/DRIVENDELIVERIES,INC_05_22_2020-EX-10.4-CONSULTING AGREEMENT.txt b/full_contract_txt/DRIVENDELIVERIES,INC_05_22_2020-EX-10.4-CONSULTING AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..27e18d799490a69fdfaec6ace49830928dda4c52 --- /dev/null +++ b/full_contract_txt/DRIVENDELIVERIES,INC_05_22_2020-EX-10.4-CONSULTING AGREEMENT.txt @@ -0,0 +1,49 @@ +Exhibit 10.4 CONSULTING AGREEMENT This Consulting Agreement ("Agreement") is made and entered into as of May 1, 2019 ("Effective Date") by and between Driven Deliveries, Inc. ("Company"), a Nevada corporation, and TruckThat LLC ("Consultant"). Company and Consultant shall sometimes be referred to herein singularly as a "Party" or collectively as the "Parties" to this Agreement. WHEREAS, the Company desires to retain Consultant as an independent contractor to perform consulting services for the Company, and Consultant is willing to perform such services on the terms set forth below. In consideration of the mutual promises contained here, the Parties hereby agree as follows: 1. Services and Compensation. 1.1. Services. Consultant shall perform the following services: - The Consultant will provide the Company services as a Strategic Marketing & Fundraising Consultant. - The Consultant shall be responsible for the strategic planning of business expansion, including Fundraising and Stock Promotion, of the Company and its subsidiaries. - These Services shall include Marketing guidance and support, not limited to: ○ Graphics ○ Web ○ Social ○ Brand - These Services will include updates to investor decks, customer sales decks and other marketing material available to the public - The Company will provide the Consultant with the appropriate level of resources and information to perform such duties, and the Consultant shall be reimbursed for fees and expenses approved by the Company. - The Consultant will report directly to the CEO of the and will keep the CEO informed of all matters concerning the Services as requested by the CEO from time to time. - The Consultant acknowledges that he may be required to travel in order to provide the Services. 1.2 Compensation. The Company shall pay Consultant a flat fee consulting rate of $18,000 per month. 1.3 Expenses. The Company shall reimburse Consultant, in accordance with Company policy, for all reasonable expenses incurred by Consultant in performing the Services pursuant to this Agreement, but only if Consultant receives written consent from an authorized agent of the Company prior to incurring such expenses and submits receipts for such expenses to the Company in accordance with the Company's general expense reimbursement policies. + +TruckThat LLC Consulting Agreement Page 1 of 7 + + + + + +2. Confidentiality. 2.1. Definition of Confidential Information. "Confidential Information" means any nonpublic information that relates to the actual or anticipated business and/or products, research or development of the Company, its affiliates or subsidiaries, or to the Company's, its affiliates' or subsidiaries' technical data, trade secrets, or know-how, including, but not limited to, research, product plans, or other information regarding the Company's, its affiliates' or subsidiaries' products or services and markets therefore, customer lists and customers (including, but not limited to, customers of the Company on whom Consultant called or with whom Consultant became acquainted during the term of this Agreement), software, developments, inventions, processes, formulas, technology, designs, drawings, engineering, hardware configuration information, marketing, finances, and other business information disclosed by the Company, its affiliates or subsidiaries, either directly or indirectly, in writing, orally or by drawings or inspection of premises, parts, equipment, or other property of Company, its affiliates or subsidiaries. Notwithstanding the foregoing, Confidential Information shall not include any such information which Consultant can establish (i) was publicly known or made generally available prior to the time of disclosure to Consultant; (ii) becomes publicly known or made generally available after disclosure to Consultant through no wrongful action or inaction of Consultant; or (iii) is in the rightful possession of Consultant, without confidentiality obligations, at the time of disclosure as shown by Consultant's then-contemporaneous written records. 2.2. Nonuse and Nondisclosure. During and after the term of this Agreement, Consultant will hold in the strictest confidence, and take all reasonable precautions to prevent any unauthorized use or disclosure of Confidential Information, and Consultant will not (i) use the Confidential Information for any purpose whatsoever other than as necessary for the performance of the Services on behalf of the Company, or (ii) disclose the Confidential Information to any third party without the prior written consent of an authorized representative of Company. Consultant shall not copy, transfer, or otherwise transmit Confidential Information to non-company electronic devices, including but not limited to computers, data storage devices, and disks. Consultant may disclose Confidential Information to the extent compelled by applicable law; provided however, prior to such disclosure, Consultant shall provide prior written notice to Company and seek a protective order or such similar confidential protection as may be available under applicable law at Company's expense. In any event, Consultant shall only disclose that Confidential Information required to be disclosed and shall maintain its confidentiality for all other purposes. Consultant agrees that no ownership of Confidential Information is conveyed to the Consultant. Without limiting the foregoing, Consultant shall not use or disclose any Company property, intellectual property rights, trade secrets or other proprietary know-how of the Company to invent, author, make, develop, design, or otherwise enable others to invent, author, make, develop, or design identical or substantially similar designs as those developed under this Agreement for any third party. Consultant agrees that Consultant's obligations under this Section 2.2 shall continue after the termination of this Agreement. 2.3. Other Client Confidential Information. Consultant agrees that Consultant will not improperly use, disclose, or induce the Company to use any proprietary information or trade secrets of any former or concurrent employer of Consultant or other person or entity with which Consultant has an obligation to keep in confidence. Consultant also agrees that Consultant will not bring onto the Company's premises or transfer onto the Company's technology systems any unpublished document, proprietary information, or trade secrets belonging to any third party unless disclosure to, and use by, the Company has been consented to in writing by such third party. 2.4. Third Party Confidential Information. Consultant recognizes that the Company has received, and in the future will receive, from third parties their confidential or proprietary information subject to a duty on the Company's part to maintain the confidentiality of such information and to use it only for certain limited purposes. Consultant agrees that at all times during the term of this Agreement and thereafter, Consultant owes the Company and such third parties a duty to hold all such confidential or proprietary information in the strictest confidence and not to use it or to disclose it to any person, firm, corporation, or other third party except as necessary in carrying out the Services for the Company consistent with the Company's agreement with such third party. 3. Ownership. 3.1. Assignment of Inventions. Consultant agrees that all right, title, and interest in and to any material, notes, records, drawings, designs, inventions, improvements, developments, discoveries and trade secrets conceived, discovered, authored, invented, developed or reduced to practice by Consultant, solely or in collaboration with others, whether or not patentable or copyrightable, during the term of this Agreement and arising out of, or in connection with, performing the Services under this Agreement and any copyrights, patents, trade secrets, mask work rights or other intellectual property rights relating to the foregoing (collectively, "Inventions"), are the sole property of the Company. Consultant also agrees to promptly make full written disclosure to the Company of any Inventions and to deliver and assign (or cause to be assigned) and irrevocably assigns fully to the Company all right, title and interest in and to the Inventions. Without limiting the foregoing, all Inventions shall be deemed Confidential Information of the Company. + +TruckThat LLC Consulting Agreement Page 2 of 7 + + + + + +3.2. Pre-Existing Materials. Subject to Section 3.1, Consultant agrees that if, in the course of performing the Services, Consultant incorporates into any Invention or utilizes in the performance of the Services any pre-existing invention, discovery, original works of authorship, development, improvements, trade secret, concept, or other proprietary information or intellectual property right owned by Consultant or in which Consultant has an interest ("Prior Inventions"), (i) Consultant will provide the Company with prior written notice and (ii) the Company is hereby granted a nonexclusive, royalty-free, perpetual, irrevocable, transferable, worldwide license (with the right to grant and authorize sublicenses) to make, have made, use, import, offer for sale, sell, reproduce, distribute, modify, adapt, prepare derivative works of, display, perform, and otherwise exploit such Prior Inventions, without restriction, including, without limitation, as part of or in connection with such Invention, and to practice any method related thereto. Consultant will not incorporate any invention, improvement, development, concept, discovery, work of authorship or other proprietary information owned by any third party into any Invention without Company's prior written permission, including without limitation any free software or open source software. 3.3. Moral Rights. Any assignment to the Company of Inventions includes all rights of attribution, paternity, integrity, modification, disclosure and withdrawal, and any other rights throughout the world that may be known as or referred to as "moral rights," "artist's rights," "droit moral," or the like (collectively, "Moral Rights"). To the extent that Moral Rights cannot be assigned under applicable law, Consultant hereby waives and agrees not to enforce any and all Moral Rights, including, without limitation, any limitation on subsequent modification, to the extent permitted under applicable law. 3.4. Maintenance of Records. Consultant agrees to keep and maintain adequate, current, accurate, and authentic written records of all Inventions made by Consultant (solely or jointly with others) during the term of this Agreement, and for a period of three (3) years thereafter. The records will be in the form of notes, sketches, drawings, electronic files, reports, or any other format that is customary in the industry and/or otherwise specified by the Company. Such records are and remain the sole property of the Company at all times and upon Company's request, Consultant shall deliver (or cause to be delivered) the same. 3.5. Further Assurances. Consultant agrees to assist Company, or its designee, at the Company's expense, in every proper way to secure the Company's rights in Inventions in any and all countries, including the disclosure to the Company of all pertinent information and data with respect thereto, the execution of all applications, specifications, oaths, assignments and all other instruments that the Company may deem necessary in order to apply for, register, obtain, maintain, defend, and enforce such rights, and in order to deliver, assign and convey to the Company, its successors, assigns and nominees the sole and exclusive right, title, and interest in and to all Inventions and testifying in a suit or other proceeding relating to such Inventions. Consultant further agrees that Consultant's obligations under this Section 3.5 shall continue after the termination of this Agreement. 3.6. Attorney-in-Fact. Consultant agrees that, if the Company is unable because of Consultant's unavailability, dissolution, mental or physical incapacity, or for any other reason, to secure Consultant's signature with respect to any Inventions, including, without limitation, for the purpose of applying for or pursuing any application for any United States or foreign patents or mask work or copyright registrations covering the Inventions assigned to the Company in Section 3.1, then Consultant hereby irrevocably designates and appoints the Company and its duly authorized officers and agents as Consultant's agent and attorney-in-fact, to act for and on Consultant's behalf to execute and file any papers and oaths and to do all other lawfully permitted acts with respect to such Inventions to further the prosecution and issuance of patents, copyright and mask work registrations with the same legal force and effect as if executed by Consultant. This power of attorney shall be deemed coupled with an interest, and shall be irrevocable. + +TruckThat LLC Consulting Agreement Page 3 of 7 + + + + + +4. Consultant Obligations. 4.1. Representations and Warranties. Consultant represents and warrants that: (a) Consultant has no agreements, relationships, or commitments to any other person or entity that conflict with the provisions of this Agreement, Consultant's obligations to the Company under this Agreement, and/or Consultant's ability to perform the Services and Consultant will not enter into any such conflicting agreement during the term of this Agreement; (b) In the course of performing the Services and providing the deliverables hereunder, neither it nor Consultant's employees or contractors will violate or infringe any proprietary rights of any third party, including, without limitation, confidential relationships, trade secrets, patents, trademarks or copyrights; (c) The Services provided shall be performed in a timely, professional and workmanlike manner of a high grade, nature, and quality, and in accordance with any deadlines agreed between Consultant and Company; and (d) Consultant has in place and/or will obtain written agreements with its employees and contractors sufficient to protect Company's Confidential Information in accordance with the terms of this Agreement and to allow Consultant to provide the assignments and licenses to intellectual property rights developed by such parties in connection with the performance of the Services. 4.2 Covenant Not to Compete. Consultant does not presently perform or intend to perform, during the term of this Agreement, consulting or other services for, or engage in or intend to engage in an employment relationship with, companies who businesses or proposed businesses in any way involve products or services which would be competitive with the Company's products or services, or those products or services proposed or in development by the Company during the term of this Agreement. 4.3 Non-Solicitation. Consultant expressly agrees that he will not, without the prior written consent of the Company, either directly or indirectly on his own behalf, or in the service or on behalf of others, solicit, divert or hire away, or attempt to solicit, divert or hire away any person employed by the Company for a period of five (5) years for any reason, and without limitation for the purpose of harming the Company or of obtaining and disseminating its trade secrets, or other proprietary and confidential information. Consultant also expressly agrees that he will not, without the prior written consent of the Company, either directly or indirectly on his own behalf, or in the service or on behalf of others, solicit, divert, or attempt to solicit or divert any customer, client, supplier or vendor of the Company for a period of five (5) years for any reason, and without limitation for the purpose of harming the Company or of obtaining and disseminating its trade secrets, or other proprietary and confidential information 4.4 Non-Circumvention. Consultant expressly agrees that he will not pursue or engage in any transaction to which he was first introduced through his consulting and/or any other business or employment relationship with the Company, or to contact directly or indirectly any party of interest related to such transactions, without the prior written consent of the Company. 5. Return of Company Materials. Upon the termination of this Agreement, or upon Company's earlier request, Consultant will immediately deliver to the Company, and will not keep in Consultant's possession, recreate, or deliver to anyone else, any and all Company property, including, but not limited to, Confidential Information, tangible embodiments of the Inventions, all devices and equipment belonging to the Company, all electronically-stored information and passwords to access such property, those records maintained pursuant to Section 3.4 and any reproductions of any of the foregoing items that Consultant may have in Consultant's possession or control. 6. Reports. Consultant agrees that Consultant will periodically keep the Company advised as to Consultant's progress in performing the Services under this Agreement. Consultant further agrees that Consultant will, as requested by the Company, prepare written reports with respect to such progress. The Company and Consultant agree that the reasonable time expended in preparing such written reports will be considered time devoted to the performance of the Services. + +TruckThat LLC Consulting Agreement Page 4 of 7 + + + + + +7. Term and Termination. 7.1. Term. The initial term of this Agreement shall be the sooner of six (6) months from the Effective Date, or replacement of this Agreement with a subsequent agreement between the Parties. 7.2. Termination. Either Party may terminate this Agreement, with or without cause, upon giving the other party thirty (30) days prior written notice of such termination pursuant to Section 12.7 of this Agreement. The Company may terminate this Agreement immediately and without prior notice if Consultant refuses to or is unable to perform the Services or is in breach of any material provision of this Agreement. 7.3. Survival. Upon any termination, all rights and duties of the Company and Consultant toward each other shall cease except: (a) The Company will pay, within thirty (30) days after the effective date of termination, all amounts owing to Consultant for Services completed and accepted by the Company prior to the termination date and related reimbursable expenses, if any, submitted in accordance with the Company's policies and in accordance with the provisions of Article 1 of this Agreement; and (b) Article 2 (Confidentiality), Article 3 (Ownership), Section 4.2 (Covenant Not to Compete), Section 4.3 (Non-Solicitation), Section 4.4 (Non-Circumvention), Article 5 (Return of Company Materials), Article 7 (Term and Termination), Article 8 (Independent Contractor Relationship), Article 9 (Indemnification), Article 10 (Limitation of Liability), Article 11 (Arbitration and Equitable Relief), and Article 12 (Miscellaneous) will survive termination or expiration of this Agreement in accordance with their terms. 8. Independent Contractor Relationship. It is the express intention of the Company and Consultant that Consultant will perform the Services as an independent contractor to the Company. Nothing in this Agreement shall in any way be construed to constitute Consultant as an agent, employee or representative of the Company. Without limiting the generality of the foregoing, Consultant is not authorized to bind the Company to any liability or obligation or to represent that Consultant has any such authority. Consultant agrees to furnish all tools and materials necessary to accomplish this Agreement and shall incur all expenses associated with performance. Consultant acknowledges and agrees that Consultant is obligated to report as income all compensation received by Consultant pursuant to this Agreement. 9. Indemnification. Consultant agrees to indemnify and hold harmless the Company and its affiliates and subsidiaries and their respective directors, officers and employees from and against all taxes, losses, damages, liabilities, costs and expenses, including attorneys' fees and other legal expenses, arising directly or indirectly from or in connection with (i) any negligent, reckless or intentionally wrongful act of Consultant or Consultant's assistants, employees, contractors or agents, (ii) performance of the Services or any breach by the Consultant or Consultant's assistants, employees, contractors or agents of any of the covenants contained in this Agreement, (iii) any failure of Consultant to perform the Services in accordance with all applicable laws, rules and regulations, (iv) any violation or claimed violation of a third party's rights resulting in whole or in part from the Company's use of the Inventions or other deliverables of Consultant under this Agreement, or (v) any amounts Company is required to pay by any court or governmental authority in any country based on a finding that Consultant's employees or contractors engaged in the performance of the Services are employees of Company or the failure of Consultant to file documents with respect to such employees or contractors or to pay any tax or similar fee or assessment in any country. + +TruckThat LLC Consulting Agreement Page 5 of 7 + + + + + +10. Limitation of Liability. IN NO EVENT SHALL COMPANY BE LIABLE TO CONSULTANT OR TO ANY OTHER PARTY FOR ANY INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES, OR DAMAGES FOR LOST PROFITS OR LOSS OF BUSINESS, HOWEVER CAUSED AND UNDER ANY THEORY OF LIABILITY, WHETHER BASED IN CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHER THEORY OF LIABILITY, REGARDLESS OF WHETHER COMPANY WAS ADVISED OF THE POSSIBILITY OF SUCH DAMAGES AND NOTWITHSTANDING THE FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED REMEDY. IN NO EVENT SHALL COMPANY'S AGGREGATE LIABILITY ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT EXCEED THE AMOUNTS PAID BY COMPANY TO CONSULTANT UNDER THIS AGREEMENT FOR THE SERVICES, DELIVERABLES OR INVENTION GIVING RISE TO SUCH LIABILITY. 11. Arbitration and Equitable Relief. 11.1. Arbitration. Except as described in Section 11.2 below, any dispute or controversy between Company and the Consultant and/or its employees or staff, including, but not limited to, those involving the construction or application of any of the terms, provisions or conditions of this Agreement or otherwise arising out of or relating to this Agreement, shall be settled by binding arbitration in accordance with the then-current commercial arbitration rules of the American Arbitration Association, and judgment on the award rendered by the arbitrator(s) may be entered by any court of competent jurisdiction. Company and the Consultant (or its employees as applicable) shall share the costs of the arbitrator equally but shall each bear their own costs and legal fees associated with the arbitration. The location of the arbitration shall be in the County of San Diego, California. 11.2. Availability of Injunctive Relief. Consultant acknowledges that any breach of its obligations under Articles 2 or 3 of this Agreement may result in irreparable injury for which Company shall have no adequate remedy at law. Accordingly, if Consultant breaches or threatens to breach Articles 2 or 3 of this Agreement, Company shall be entitled to seek, without proving or showing any actual damage sustained, a temporary restraining order, preliminary injunction, permanent injunction and/or order compelling specific performance to prevent or cease the breach of Articles 2 or 3 of this Agreement. Nothing in this Agreement shall be interpreted as prohibiting Company from obtaining any other remedies otherwise available to it for such breach or threatened breach, including the recovery of damages. 12. Miscellaneous. 12.1. Governing Law; Consent to Personal Jurisdiction. This Agreement shall be governed by the laws of the State of California, without regard to the conflicts of law provisions of any jurisdiction. To the extent that any lawsuit is permitted under this Agreement, the Parties hereby expressly consent to the personal and exclusive jurisdiction and venue of the state and federal courts located in the County of San Diego, California. 12.2. Assignability. This Agreement will be binding upon Consultant's assigns, administrators, and other legal representatives, and will be for the benefit of the Company, its successors, and its assigns. Except as may otherwise be provided in this Agreement, Consultant may not sell, assign or delegate any rights or obligations under this Agreement. Notwithstanding anything to the contrary herein, Company may assign this Agreement without Consultant's consent. 12.3. Entire Agreement. This Agreement constitutes the entire agreement and understanding between the Parties with respect to the subject matter herein and supersedes all prior written and oral agreements, discussions, or representations between the Parties. Consultant represents and warrants that it is not relying on any statement or representation not contained in this Agreement. To the extent any terms set forth in any exhibit or schedule conflict with the terms set forth in this Agreement, the terms of this Agreement shall control unless otherwise expressly agreed by the Parties in such exhibit or schedule. 12.4. Headings. Headings are used in this Agreement for reference only and shall not be considered when interpreting this Agreement. 12.5. Severability. If a court or other body of competent jurisdiction finds, or the Parties mutually believe, any provision of this Agreement, or portion thereof, to be invalid or unenforceable, such provision will be enforced to the maximum extent permissible so as to affect the intent of the Parties, and the remainder of this Agreement will continue in full force and effect. + +TruckThat LLC Consulting Agreement Page 6 of 7 + + + + + +12.6. Modification, Waiver. No modification of or amendment to this Agreement, nor any waiver of any rights under this Agreement, will be effective unless in a writing signed by the Parties. Waiver by the Company of a breach of any provision of this Agreement will not operate as a waiver of any other or subsequent breach. 12.7. Notices. Any notice or other communication required or permitted by this Agreement to be given to a Party shall be in writing and shall be deemed given (i) if delivered personally or by commercial messenger or courier service, (ii) when sent by confirmed facsimile, or (iii) if mailed by U.S. registered or certified mail (return receipt requested), to the Party at the Party's address written below or at such other address as the Party may have previously specified by like notice. If by mail, delivery shall be deemed effective three business days after mailing in accordance with this Section 12.7. If to Company: Driven Deliveries, Inc. 5710 Kearny Villa Road, Suite 205 San Diego, California 92123 If to Consultant: TruckThat LLC 1300 Oakside Circle Chanhassen, MN 55317 12.8. Attorneys' Fees. In any court action at law or equity that is brought by one of the Parties to this Agreement to enforce or interpret the provisions of this Agreement, the prevailing Party will be entitled to reasonable attorneys' fees, in addition to any other relief to which that Party may be entitled. 12.9. Signatures. This Agreement may be signed in two counterparts, each of which shall be deemed an original, with the same force and effectiveness as though executed in a single document. IN WITNESS, the Parties have executed this Consulting Agreement as of the date first-written above. "Company" DRIVEN DELIVERIES, INC. By: /s/ Brian Hayek BRIAN HAYEK, President "Consultant" TruckThat LLC By: /s/ Christian L. Schenk CHRISTIAN L. SCHENK EIN: 81-4992583 TruckThat LLC Consulting Agreement Page 7 of 7 \ No newline at end of file diff --git a/full_contract_txt/DRKOOPCOMINC_04_21_1999-EX-10.28-SPONSORSHIP AGREEMENT.txt b/full_contract_txt/DRKOOPCOMINC_04_21_1999-EX-10.28-SPONSORSHIP AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..b24eb29496d4d887b68cab3891662952f266c33b --- /dev/null +++ b/full_contract_txt/DRKOOPCOMINC_04_21_1999-EX-10.28-SPONSORSHIP AGREEMENT.txt @@ -0,0 +1,295 @@ +EXHIBIT 10.28 + + SPONSORSHIP AGREEMENT + + This Sponsorship Agreement (the "Agreement") is entered into as of the 11th day of March, 1999 by and between drkoop.com, inc., a Delaware corporation, located at 8920 Business Park Drive, Longhorn Suite, Austin, Texas 78759 ("drkoop.com"), and Vitamin Shoppe Industries, Inc., a New Jersey corporation, located at 4700 Westside Avenue, North Bergen, New Jersey 07047 ("Sponsor"). + + WHEREAS, drkoop.com develops, markets and maintains an integrated suite of Internet enabled, consumer oriented software applications and services, including but not limited to, drkoop.com. electronic data interchange services, and advertising and promotional services on the Internet at the website http://www.drkoop.com (together with any successor or replacement websites, the "drkoop.com Website"); + + WHEREAS, Sponsor markets and sells vitamins and nutritional supplements on the Internet at the website http://www.vitaminshoppe.com (together with any successor or replacement websites, the "Sponsor Website"; and together with the drkoop.com Website, the "Sites"); and + + WHEREAS, Sponsor desires to have certain * * * rights with respect to vitamins and nutritional supplements on the drkoop.com Website and to be the * * * vitamin and nutritional supplement tenant in the E-Commerce area of the drkoop.com Website and drkoop.com desires to promote Sponsor for vitamin and nutritional supplements and to make Sponsor its' * * * vitamin and nutritional supplement tenant pursuant to the terms and conditions contained in this Agreement. + + NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein and for other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows: + +____________________ Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as * * *. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission. + +* * * Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. + + ARTICLE I. * * * VITAMIN SPONSOR + + 1.1. * * * VITAMIN SPONSOR. Throughout the Term (as defined below), Sponsor shall be the * * * vitamin and supplement sponsor of, and the * * * vitamin and supplement advertiser on, the drkoop.com Website * * * + + 1.2. SPONSOR PLACEMENTS. During the Term, in no way limiting the foregoing in Section 1.1, Sponsor will receive the following sponsorship and promotional placements on the drkoop.com Website: + + (i) Sponsor shall be the * * * sponsor of the Nutrition Center on the drkoop.com Website and each area (other than the "Daily Special" area, the "Healthy Recipes" area and any other area which may be created in the future which specifically relates to cooking or food recipes (collectively, the "Excluded Areas")) within the Nutrition Center, including, the "Vitamins & Supplements" area, the "Vitamins and Minerals" area, the "Nutrition News" area, the "Nutrition for Healthy Living" area and the "Nutrition for your Condition" area (collectively, the "Sponsor Areas"). * * * + + (ii) * * * + + (iii) From time to time, drkoop.com shall create content which features vitamins and nutritional supplements. Sponsor's Advertising Content shall be displayed on such pages which host vitamins and nutritional supplement content to the same extent and subject to the same restrictions as such Sponsor Advertising Content is displayed in the Sponsor Areas. + + (iv) * * * Drkoop.com's obligations with respect to each area of the drkoop.com Website set forth in this Section 1.2 shall also apply to all areas which are successors or replacements to such areas and to all new vitamin and nutrition areas on the drkoop.com Website launched on the drkoop.com Website after the date of this Agreement. * * * Sponsor may promote the sale of vitamins and supplements in the Sponsor Areas. + + 1.3. IMPRESSIONS. Not including any permanent Sponsor links, banners or buttons pursuant to Section 1.2, drkoop.com shall, during the Initial Term (as defined below) provide * * * advertising banner and e-commerce tile impressions consisting of Sponsor Advertising Content* * * shall be delivered during each month of the Initial Term. If by the end of the Initial Term drkoop.com has not delivered the foregoing number of impressions, then, as Sponsor's sole remedy for such breach, the Term of this Agreement shall be extended until drkoop.com has satisfied its obligations under this Section. + +____________________ + + + + + +* * * Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. + + 2 + + 1.4. DR. KOOP HEALTH LINKS. In addition to the fees specified in Section 2.5.1, Sponsor shall pay * * * to drkoop.com and in exchange therefore shall have the right to use as many Dr. Koop Health Links as Sponsor, in its sole discretion, wishes to use, all in accordance with the terms of the drkoop.com Healthlinks Agreement, the form of which is attached hereto as Exhibit B. - --------- + + 1.5. * * * + + 1.6. MODIFICATIONS.. Each party reserves the right to modify the design, organization, structure, look and feel, navigation and other elements of its Site, provided, that drkoop.com may not, without the prior written consent of Sponsor, substantially alter, change or modify the look, feel or functionality of the Sponsor Areas of the drkoop.com Website* * *. + + ARTICLE II. SPONSORSHIP POLICY + + 2.1. CONTENT. For each of the placements described in Section 1, including all banner advertisements and e-commerce tiles, Sponsor shall provide drkoop.com with all content including all trademarks, logos or banners (the "Sponsor Advertising Content"), in accordance with the specifications set forth on Exhibit C attached hereto, which will be displayed on the drkoop.com Website and which will link, in Sponsor's discretion, to either the Sponsor Site or Vitamin Buzz. The parties hereto agree to cooperate and work together in the establishment of all links, buttons and banners placed pursuant to this Agreement. Links from one party's Site to the other party's Site shall in no way alter the look, feel or functionality of the linked Site. + + 2.2. CHANGES AND CANCELLATIONS. Any cancellations or change orders must be made in writing and acknowledged by drkoop.com. Sponsor shall not be required to change Sponsor Advertising Content more often than once per month. Sponsor shall provide drkoop.com with Sponsor Advertising Content artwork at least five business days in advance of the publication date. + + 2.3. STATISTICS. Drkoop.com shall provide Sponsor with Sponsor usage reports on a monthly basis. Sponsor shall have the right to use such data for its internal business purposes, but may not provide such data for use by third parties. Such reports shall contain substantially the same types of information delivered to other of drkoop.com's similarly situated partners, which reports will include information regarding impressions, clickthroughs and any information known about the users of such areas in aggregate form. + + 2.4. PUBLICATION ERROR. In the event of a publication error in the Sponsor Advertising Content arising exclusively from the fault of drkoop.com, Sponsor shall notify drkoop.com of such error and drkoop.com will use reasonable efforts to promptly correct the error. _____________________________ * * * Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. + + 3 + + 2.5. PAYMENT. + + 2.5.1. FEES. The fee for the placements and other rights provided under this Agreement for the Initial Term (as defined below) is * * * is payable within * * * of the date of this Agreement, with the balance of such fee payable by Sponsor in * * * consecutive equal installments of * * * payable by the * * * of the Initial Term commencing * * * following * * * the Launch Date (as defined below). + + 2.5.2. TAXES. Sponsor shall be responsible for the collection of any and all value added, consumption, sales, use or similar taxes and fees payable with respect to all sales made on the Sponsor Website. + + ARTICLE III. OWNERSHIP OF DATA + + 3.1. USER DATA. Drkoop.com requests its users ("Individual Users"), to provide personal information when they sign up for certain services including requesting information on a specific disease, chat rooms and forums ("User Data"). Such User Data is owned by each Individual User and drkoop.com does not use or disclose any such User Data without the consent of the Individual User. + + 3.2. DATA RELEASE TO SPONSOR. Drkoop.com shall provide to Sponsor any and all User Data for which the Individual User has specifically authorized release to Sponsor. In the event that an Individual User grants rights to Sponsor for use of his User Data, Sponsor shall use its best efforts to keep User Data confidential and shall only use such data in an ethical manner. Sponsor may use User Data for its owns purposes, but User Data may not be disclosed, sold, assigned, leased or otherwise disposed of to third parties by Sponsor. + + 3.3. DATA CONFIDENTIALITY. The User Data shall be drkoop.com Confidential Information under Article 5 and shall in addition be subject to the + + + + + +terms of this Article 3. Sponsor shall be liable for the conduct of its employees, agents and representatives who in any way breach this Amendment. Sponsor's obligations to treat the User Data as Confidential Information under Article 5 and this Article 3 shall continue in perpetuity following termination of this Amendment. + + 3.4. SPONSOR USER DATA. All users on the Sponsor Website, including, users linked to the Sponsor Website from the drkoop.com Website, will be deemed to be customers of Sponsor. Accordingly, all rules, policies and operating procedures of Sponsor concerning customer orders, customer service and sales will apply to those customers. Sponsor may change its policies and operating procedures at any time. Sponsor will determine the prices to be charged for products and other merchandise sold on the Sponsor Website in accordance with its own pricing policies. + +____________________ * * * Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. + + 4 + + Prices and availability on the Sponsor Website may vary from time to time. Notwithstanding Section 3.3, the parties hereto hereby agree that title to any user information of any users on the Sponsor Website, including but not limited to the name, address and e-mail address of users, obtained by Sponsor from such users shall be owned by the Sponsor. The parties hereto agree that pursuant to this Section 3 they may each collect and own similar information from and with respect to individuals who visit each of their Sites. + + ARTICLE IV. LICENSES + + 4.1. LICENSES. + + 4.1.1. Subject to the terms and conditions hereof, Sponsor hereby represents and warrants that it has the power and authority to grant, and does hereby grant to drkoop.com a non-exclusive, non-transferable, royalty-free, worldwide license to reproduce and display all logos, trademarks, trade names and similar identifying material relating to Sponsor (the "Sponsor Marks") solely in connection with the promotion, marketing and distribution of the parties and the Sites in accordance with the terms hereof, provided, however, that drkoop.com shall, other than as specifically provided for in this Agreement, not make any specific use of any Sponsor Mark without first submitting a sample of such use to Sponsor and obtaining its prior consent, which consent shall not be unreasonably withheld. The foregoing license shall terminate upon the effective date of the expiration or termination of this Agreement. + + 4.1.2. Subject to the terms and conditions hereof, drkoop.com hereby represents that it has the power and authority to grant, and does hereby grant to Sponsor a non-exclusive, non-transferable, royalty-free, worldwide license to reproduce and display all logos, trademarks, trade names and similar identifying material relating to drkoop.com and, solely as allowed pursuant to this Agreement, to the Dr. C. Everett Koop name (collectively, the "drkoop.com Marks") solely in connection with the promotion, marketing and distribution of the parties and the Sites in accordance with the terms hereof, provided, however, that Sponsor shall, other than as specifically provided for in Section 4.4 of this Agreement, not make any specific use of any drkoop.com Marks without first submitting a sample of such use to drkoop.com and obtaining its prior consent, which consent shall not be unreasonably withheld. The foregoing license shall terminate upon the effective date of the expiration or termination of this Agreement. + + 4.2. INTELLECTUAL PROPERTY OWNERSHIP. Each party shall retain all right, title, and interest (including all copyrights, patents, service marks, trademarks and other intellectual property rights) in its Site. Except for the license granted pursuant to this Agreement, neither party shall acquire any interest in the other party's Site or any other services or materials, or any copies or portions thereof, provided by such party pursuant to this Agreement. + + 4.3. REMOVAL OF MATERIALS. Each party reserves the right to reject or remove any content, information, data, logos, trademarks and other materials (collectively, "Materials") provided by the other from its servers at any time if, in its reasonable opinion, it believes that any such Materials infringe any third-party intellectual property right, are libelous or invade the privacy or violate other rights of any person, violate applicable laws or regulations, or jeopardize + + 5 + + the health or safety of any person. Each party will use reasonable efforts to contact the other prior to removing any of its Materials from its servers and will work with the other to resolve the issue as quickly as possible. + + 4.4. USE OF NAME AND LIKENESS. Sponsor shall not have any right to use the name and/or likeness of Dr. C. Everett Koop or to make any statements, whether written or oral, which state or otherwise imply, directly or indirectly, any endorsement from or affiliation with Dr. C. Everett Koop in any manner whatsoever without the prior written consent of drkoop.com, which consent may be withheld in drkoop.com's sole discretion. Notwithstanding the foregoing, Sponsor is hereby authorized during the Term to use the logo and tag lines set forth on Exhibit D, on its Site, in its catalogs and in its stores in connection with its marketing and promotion efforts, in each case in accordance with the terms of + + + + + +this Agreement and subject to the reasonable approval of drkoop.com. Sponsor is hereby authorized to place such logo and any one of such tag lines on its Site, in its stores and in its catalogs in accordance with the terms of this Agreement. + + ARTICLE V. CONFIDENTIALITY + + 5.1. CONFIDENTIALITY. For the purposes of this Agreement, "Confidential Information" means non-public information about the disclosing party's business or activities that is proprietary and confidential, which shall include, without limitation, all business, financial, technical and other information of a party marked or designated "confidential" or by its nature or the circumstances surrounding its disclosure should reasonably be regarded as confidential. Confidential Information includes not only written or other tangible information, but also information transferred orally, visually, electronically or by any other means. Confidential Information will not include information that (i) is in or enters the public domain without breach of this Agreement, (ii) the receiving party lawfully receives from a third party without restriction on disclosure and without breach of a nondisclosure obligation or (iii) the receiving party knew prior to receiving such information from the disclosing party or develops independently. + + 5.2. EXCLUSIONS. Each party agrees (i) that it will not disclose to any third party or use any Confidential Information disclosed to it by the other except as expressly permitted in this Agreement and (ii) that it will take all reasonable measures to maintain the confidentiality of all Confidential Information of the other party in its possession or control, which will in no event be less than the measures it uses to maintain the confidentiality of its own information of similar importance. + + 5.3. EXCEPTIONS. Notwithstanding the foregoing, each party may disclose Confidential Information (i) to the extent required by a court of competent jurisdiction or other governmental authority or otherwise as required by law, provided, however, that with respect to filing obligations under the securities laws, each party will, to the extent that it is required to file this Agreement, file this Agreement in redacted form reasonably approved by the other party prior to such filing or (ii) on a "need-to-know" basis under an obligation of confidentiality to its legal counsel, accountants, banks and other financing sources and their advisors. Except as set forth in + + 6 + + this Section 5.3, the terms and conditions of the Agreement will be deemed to be the Confidential Information of each party and will not be disclosed without the prior written consent of the other party. + + 5.4. SPONSOR ADVERTISING CONTENT. drkoop.com hereby confirms and agrees that during the Term Sponsor shall be able to serve up its own advertising using NetGravity software and tags, and that drkoop.com shall not do anything which would interfere or hamper such serving. Notwithstanding anything in this Agreement, all information regarding Sponsor Advertising Content (including Sponsor banner advertisements and e-commerce tiles), including all users viewing and clicking information with respect thereto, shall be deemed to be Confidential Information of Sponsor (collectively, "Sponsor Confidential Advertising Information"). To the extent that in connection with drkoop.com's advertising efforts, or otherwise, any third party may or will receive any Sponsor Confidential Advertising Information from or through drkoop.com, drkoop.com agrees that prior to such third party receiving any such information drkoop.com will enter into an agreement with such third party pursuant to which such third party will agree to keep any such Sponsor Confidential Advertising Information received by such third party confidential to the same extent as drkoop.com is required to keep such information confidential under the Agreement. To the extent that any third party breaches any such agreement of confidentiality with drkoop.com, drkoop.com hereby agrees to enforce its rights and pursue its remedies under such agreement to the fullest extent permitted by law, including seeking equitable relief, * * *. + + ARTICLE VI. REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION + + 6.1. SPONSOR WARRANTY. Sponsor represents and warrants for the benefit of drkoop.com that the Sponsor Advertising Content and Sponsor Marks are true and correct and do not and will not for the Term infringe upon or violate: (i) any intellectual property rights, including any copyright or trademark rights, of any third party and do not and will not constitute a defamation or invasion of the rights of privacy or publicity of any kind of any third party, (ii) any applicable law, regulation or non-proprietary third-party right. Sponsor further represents and warrants for the benefit of drkoop.com that the Sponsor Advertising Content does not contain any material which is unlawful, harmful, abusive, hateful, obscene, threatening or defamatory and Sponsor is not an entity or an affiliate of any entity which engages in the manufacture or wholesale distribution of tobacco or tobacco products (such activities are collectively referred to herein as "Tobacco Industry Affiliation"). + + 6.2. DRKOOP.COM WARRANTY. Drkoop.com represents and warrants for the benefit of Sponsor that the drkoop.com Marks are true and correct and do not and will not for the Term infringe upon or violate: (i) any intellectual property rights, including any copyright or + +____________________ * * * Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. + + + + + + 7 + + trademark rights, of any third party and do not and will not constitute a defamation or invasion of the rights of privacy or publicity of any kind of any third party, (ii) any applicable law, regulation or non-proprietary third-party right. Drkoop.com further represents and warrants for the benefit of Sponsor that the drkoop.com Marks do not contain any material which is unlawful, harmful, abusive, hateful, obscene, threatening or defamatory, and drkoop.com has the right to license the drkoop.com Marks, including the Dr. C. Everett Koop name (to the extent licensed under this Agreement), in accordance with the terms of this Agreement. + + 6.3. INDEMNIFICATION. Each party hereby agrees to indemnify and hold harmless the other party and its subsidiaries and affiliates, and their respective directors, officers, employees, agents, shareholders, partners, members and other owners, against any and all claims, actions, demands, liabilities, losses, damages, judgments, settlements, costs and expenses (including reasonable attorneys' fees) (any or all of the foregoing hereinafter referred to as "Losses") insofar as such Losses (or actions in respect thereof) arise out of or are based on (i) the breach of any representation or warranty set forth in Articles 4, 5 or 6, (ii) any breach by it of the licenses granted by it hereunder; (iii) the use by it of any trademarks or Content other than in accordance with the terms hereof; * * *. For purposes herein, "Content" shall mean, with respect to each party, the proprietary content delivered by such party to the other party pursuant to this Agreement, including, Sponsor Advertising Content, but only to the extent that such content is not altered by the receiving party, and the proprietary content contained on such party's Site, and shall include only that content created by such party, its employees or other persons contractually bound to such party to create such content. The foregoing obligations are contingent upon the indemnified party: (i) promptly notifying the indemnifying party of any claim, suit, or proceeding for which indemnity is claimed; (ii) cooperating reasonably with the indemnifying party at the latter's expense; and (iii) allowing the indemnifying party to control the defense or settlement thereof. The indemnified party will have the right to participate in any defense of a claim and/or to be represented by counsel of its own choosing at its own expense. + + ARTICLE VII. LIMITATION OF LIABILITY + + 7.1. WARRANTY. Drkoop.com will use commercially reasonable efforts to maintain the drkoop.com Website available and display the Sponsor Advertising Content twenty four hours per day each day during the term of the Agreement. Drkoop.com shall install and maintain a commercially acceptable system of collecting information about impressions and other data relating to the use of the Sponsor Advertising Content. Drkoop.com warrants to Sponsor that it will make reasonable effort to perform under this agreement in a competent manner. * * * + + 7.2. DISCLAIMER. Each party will be solely responsible for the development, operation and maintenance of its Site and for all materials that appear on its Site. Such + +____________________ * * * Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. + + 8 + + responsibilities include, but are not limited to: (i) the technical operation of its Site and all related equipment; (ii) the accuracy and appropriateness of materials posted on its Site; (iii) for ensuring that materials posted on its Site do not violate any law, rule or regulation, including all FDA requirements, or infringe upon the rights of any third party (including, for example, copyright, trademarks, privacy or other personal or proprietary rights); and (iv) for ensuring that materials posted on its Site are not libelous or otherwise illegal. Each party disclaims all liability for all such matters with respect to the other party's Site. Except for the foregoing, or as otherwise specifically set forth in this Agreement, neither party makes any representations, warranties or guarantees of any kind, either express or implied (including, without limitation, any warranties of merchantability or fitness for a particular purpose), with respect to their respective Sites, or the functionality, performance or results of use thereof, or otherwise in connection with this Agreement. + + 7.3. EXCLUSION OF WARRANTY. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, NEITHER PARTY MAKES ANY WARRANTY TO THE OTHER PARTY IN CONNECTION WITH THE SUBJECT MATTER OF THIS AGREEMENT AND EACH PARTY HEREBY DISCLAIMS ANY AND ALL WARRANTIES WITH REGARD TO ITS SITE AND SERVICES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION, ANY WARRANTY OF NONINFRINGEMENT AND THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. IN PARTICULAR, AND NOT BY WAY OF LIMITATION, NEITHER PARTY WARRANTS THAT ITS SITE WILL OPERATE ERROR-FREE OR WITHOUT INTERRUPTION. + + 7.4. DAMAGES. EXCEPT AS SET FORTH IN SECTION 6.3, IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY SPECIAL, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES ARISING OUT OF THIS AGREEMENT OR ITS TERMINATION, WHETHER LIABILITY IS ASSERTED IN CONTRACT, TORT (INCLUDING NEGLIGENCE) STRICT LIABILITY OR OTHERWISE AND IRRESPECTIVE OF WHETHER SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF ANY SUCH LOSS OR DAMAGE. * * * + + ARTICLE VIII. TERM AND TERMINATION + + + + + + 8.1. TERM; TERMINATION. + + 8.1.1. The initial term (the "Initial Term"; and together with all extensions and renewals, the "Term") will begin on the date set forth above * * * (the "Launch Date") on which: (i) each of the Sponsor Areas of the drkoop.com Website are operational in accordance with the terms of this Agreement (other than the e-commerce tile placements); and (ii) the links to the + +____________________ * * * Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. + + 9 + + Sponsor Website or Vitamin Buzz contained in the Sponsor logos or the Sponsor banner advertisements are established in accordance with the terms of this Agreement, subject to earlier termination as set forth in this Agreement. If the Launch Date has not occurred by August 31, 1999, Sponsor shall, in its sole discretion, be entitled to terminate this Agreement without any liability and receive a full refund of all amounts paid by Sponsor to drkoop.com pursuant to this Agreement prior to the date of such termination. + + * * * + + 8.2. TERMINATION FOR TOBACCO INDUSTRY AFFILIATION. Upon commencing any activities relating to Tobacco Industry Affiliation (as defined in Section 6.1), Sponsor shall promptly notify drkoop.com of its intent to undertake Tobacco Industry Affiliation. Upon receipt of such notice or upon learning of any such Tobacco Industry Affiliation from a third party, drkoop.com shall have the right to terminate this Agreement immediately on written notice to Sponsor without liability of any kind. + + 8.3. TERMINATION FOR GARNISHMENT. * * * Additionally, in the event that either party undertakes any action or fails to undertake any action, which the other party reasonably believes tarnishes the high quality of its name or trademarks, including, with respect to drkoop.com, the "Dr. Koop" name, the other party shall have the right to terminate this agreement upon ten (10) days' written notice to the other party, provided that such action or inaction is not cured to the reasonable satisfaction of the terminating party within such ten day period. + + 8.4. TERMINATION FOR CAUSE. Either party may terminate this Agreement upon thirty (30) days' written notice of a breach by the other party, provided such breach is not cured within such thirty-day period. + + 8.5. TERMINATION BY INSOLVENCY. Either party may terminate this Agreement by providing written notice to the other party if the other party ceases to function as a going concern, becomes insolvent, makes an assignment for the benefit of creditors, files a petition in bankruptcy, permits a petition in bankruptcy to be filed against it, or admits in writing its inability to pay its debts as they mature, or if a receiver is appointed for a substantial part of its assets. + + 8.6. SURVIVAL. The following Sections shall survive termination of this Agreement: Article 5 (Confidentiality), Article 6 (Representations, Warranties and Indemnification), Article 7 (Limitation of Liability), and Article 9 (General). + +____________________ * * * Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. + + 10 + + ARTICLE IX. GENERAL + + 9.1. PUBLICITY. Except as may be required by applicable laws and regulations or a court of competent jurisdiction, or as required to meet credit and financing arrangements, or as required or appropriate in the reasonable judgment of either party to satisfy the disclosure requirements of an applicable securities law or regulation or any applicable accounting standard, neither party shall make any public release respecting this Agreement and the terms hereof without the prior consent of the other party. + + 9.2. ARBITRATION. Any and all disputes, controversies and claims arising out of or relating to this Agreement or concerning the respective rights or obligations of the parties hereto shall be settled and determined by arbitration in the defending parties home forum before one (1) arbitrator pursuant to the Commercial Rules then in effect of the American Arbitration Association. Each party shall have no longer than three (3) days to present its position. Judgment upon the award rendered may be entered in any court having jurisdiction or application may be made to such court for a judicial acceptance of the award and an order of enforcement. The parties agree that the arbitrators shall have the power to award damages, injunctive relief and reasonable attorneys' fees and expenses to any party in such arbitration. + + 9.3. ASSIGNMENT. Neither party may assign this Agreement, in whole or in part, without the other party's written consent, which consent will not be unreasonably withheld, except that: (a) a party's rights and obligation hereunder may be transferred to a successor of all or substantially all of the + + + + + +business and assets of the party regardless of how the transaction or series of related transactions is structured, provided, that the successor party agrees to be bound by all of the terms and conditions of this Agreement; and (b) Sponsor may assign its rights and obligations under this Agreement to any entity (i) which operates the Sponsor Website and (ii) which agrees to bound by all of the terms and conditions of this Agreement. + + 9.4. GOVERNING LAW. This Agreement shall be construed and enforced in accordance with the laws of the State of Delaware, but without giving effect to its laws or rules relating to conflicts of laws. + + 9.5. NOTICE. All notices, statements and reports required or permitted by this Agreement shall be in writing and deemed to have been effectively given and received: (i) five (5) business days after the date of mailing if sent by registered or certified U.S. mail, postage prepaid, with return receipt requested; (ii) when transmitted if sent by facsimile, provided a confirmation of transmission is produced by the sending machine and a copy of such facsimile is promptly sent by another means specified in this section; or (iii) when delivered if delivered personally or sent by express courier service. Notices shall be addressed as follows: + + 11 + + For drkoop.com: For Sponsor: + + drkoop.com. Vitamin Shoppe Industries, Inc. Personal Medical Records, Inc. 4700 Westside Avenue 8920 Business Park Drive North Bergen, New Jersey 07047 Austin, TX 78759 Attn: Ms. Miriam Nesheiwat Attn: Chief Financial Officer Fax: 201-583-1834 Fax: 512-726-5130 Email: mnesh@vitaminshoppe.com Email: gsears@drkoop.com + + With a copy to: H. Leigh Feldman Robinson Silverman Pearce Aronsohn & Berman LLP 1290 Avenue of the Americas 32nd Floor New York, NY 10104 Fax: 212-541-1492 Email: feldman@rspab.com + +Either party may change its address for the purpose of this paragraph by notice given pursuant to this paragraph + + 9.6. NO AGENCY. The parties are independent contractors and will have no power or authority to assume or create any obligation or responsibility on behalf of each other. This Agreement will not be construed to create or imply any partnership, agency or joint venture. + + 9.7. SEVERABILITY. In the event that any of the provisions of this Agreement are held to be unenforceable by a court or arbitrator, the remaining portions of the Agreement will remain in full force and effect. + + 9.8. ENTIRE AGREEMENT. This Agreement is the complete and exclusive agreement between the parties with respect to the subject matter hereof, superseding any prior agreements and communications (both written and oral) regarding such subject matter. This Agreement may only be modified, or any rights under it waived, by a written document executed by both parties. + + 9.9. COUNTERPARTS. This Agreement may be signed in counterparts which, when signed, shall constitute one document. + + 12 + + IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and delivered as of the day and year first above written. + + drkoop.com, inc. + + By:______________________________ Name: Title: + + VITAMIN SHOPPE INDUSTRIES, INC. + + By:______________________________ Name: Title: + + 13 + + SCHEDULE 1.2(I) SCREEN SHOT MOCK-UPS + +[ATTACHED] + + EXHIBIT A DIRECT COMPETITORS + + + + + +* * * + +____________________ * * * Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. + + EXHIBIT B FORM OF HEALTHLINKS AGREEMENT + +[ATTACHED] + + EXHIBIT C ADVERTISING SPECIFICATIONS + +File Formats + +Naming Convention: (lowercase only, 8.3) + +Alternate Text: Use ALT tag; ten words or less + +Image Dimensions : + +Sponsor Banner: 468 pixels by 60 pixels, 234 pixels by 60 pixels, 120 pixels by 60 pixels + +Image File Format: [GIF/JPEG] + +Image File Size: 12 k maximum file size + +File Names:Use Sponsor name.: [Sponsor].gif] + +Delivery of GIFs + +Email - mbaehr@drkoop.com.com, cc: gsears@drkoop.com.com + +We accept [,CompactPro, zip, gzip, and UNIX tar or compress] format tiles. All formats must be mailed in [ASCII encoding(uuencode, mmencode)]. + + EXHIBIT D DRKOOP.COM CORPORATE LOGO + +[LOGO ATTACHED] + +"The Vitamin Shoppe is the proud exclusive vitamin sponsor of drkoop.com." + +"The Vitamin Shoppe is a proud sponsor of drkoop.com, the Trusted Health Network, led by Dr. C. Everett Koop." + +The Vitamin Shoppe is a proud sponsor of drkoop.com, the Trusted Health Network, led by Dr. C. Everett Koop." \ No newline at end of file diff --git a/full_contract_txt/DUOSTECHNOLOGIESGROUP,INC_04_21_2009-EX-10.1-STRATEGIC ALLIANCE AGREEMENT.txt b/full_contract_txt/DUOSTECHNOLOGIESGROUP,INC_04_21_2009-EX-10.1-STRATEGIC ALLIANCE AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..f0a8e0b3e8fb0bc5a9590791452854e7024a970b --- /dev/null +++ b/full_contract_txt/DUOSTECHNOLOGIESGROUP,INC_04_21_2009-EX-10.1-STRATEGIC ALLIANCE AGREEMENT.txt @@ -0,0 +1,43 @@ +Exhibit 10.1 STRATEGIC ALLIANCE AGREEMENT This Strategic Alliance Agreement (this "Agreement"), effective as of 15 April, 2009 (the "Effective Date"), is by and between Information System Associates, Inc., a Florida Corporation whose registered office is 1151 Southwest 30th Street, Suite E, Palm City FL, 34990 ("ISA") and Rubicon Software Group plc, a company registered under the laws of England and Wales (Registered Company No. 5701810) whose registered office is Rubicon House, Guildford Road, West End, Surrey GU24 9PW ("Rubicon"). Background WHEREAS, Rubicon desires to engage ISA as Rubicon's exclusive agent in the United States for the purposes of reselling Rubicon's software and services; WHEREAS, ISA desires to engage Rubicon as its software development partner and to provide various consulting services in Europe; and WHEREAS, ISA and Rubicon desire to enter into this Agreement for the purpose of granting ISA the right to distribute such products and services and Rubicon to supply such services. NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby agree as hereinafter set forth. 1. DEFINITIONS. 1.1 Confidential Information shall mean all non-public information of a Party, which is disclosed to the other Party hereunder, including, without limitation, trade secrets, technical information, business information, sales information, marketing information, customer-buying patterns, algorithms, customer and potential customer lists and identities, product sales plans, sublicense agreements, inventions, developments, discoveries, software, know-how, methods, techniques, formulae, data, processes and other trade secrets and proprietary ideas, whether or not protectable under patent, trademark, copyright or other areas of law, and any other information marked as "proprietary" or "confidential" at the time of disclosure. Notwithstanding the foregoing, "Confidential Information" shall not include any information that (a) was or has become publicly available without restriction through no fault of the receiving Party or its employees or agents; (b) is received without restriction from a third party that, to the best knowledge of the receiving Party, did not have an obligation of confidentiality to the disclosing Party; (c) was rightfully in possession of the receiving Party without restriction prior to its disclosure by the other Party; or (d) was independently developed by employees of the receiving Party that had no knowledge of or access to such information, as evidenced by written records of the receiving Party. 1.2 Contract Services shall mean various software development and implementation services to be provided by Rubicon as described in one or more Statement(s) of Work ("SOW") that reference this Agreement in a form substantially similar to that set forth in Exhibit A. 1.3 Day Rate shall mean the daily rate at which Rubicon will provide services to ISA or ISA Clients. The Day Rate for each type of service provided will be as per the rate card set out in Exhibit C, such rates to be subject to annual review by the Parties on the anniversary of this Agreement provided that such rates may be reviewed on an ad hoc basis at any time should the Parties become aware of specific information which impacts on the validity or feasibility of the Day Rate. 1.4 Commission Rate shall mean the commission rate which will be used to calculate any amount which Rubicon will pay to ISA after the provision of Rubicon Offerings to ISA Clients as set forth in Exhibit D, such rates to be subject to annual review by the Parties on the anniversary of this Agreement provided that such rates may be reviewed on an ad hoc basis at any time should the Parties become aware of specific information which impacts on the validity or feasibility of the Commission Rate. 1.5 Documentation shall mean the printed and/or electronic materials relating to the Rubicon Offerings, including, but not limited to, user's manuals and technical manuals as may be provided by Rubicon to ISA. 1.6 Due Diligence Services shall have the meaning set forth in Section 3.3, below. 1.7 End User shall mean a party that obtains a license to use the Rubicon Offerings from ISA or a customer of ISA under the terms and conditions set forth herein. 1.8 Intellectual Property shall mean any and all trade secrets, patents, copyrights, trademarks, service marks, trade names, domain names, trade dress, URLs, brand features, know-how and similar rights of any type under the laws of any applicable governmental authority, including, without limitation, all applications and registrations relating to any of the foregoing.. 1.9 ISA Client shall mean: (i) an entity to which Rubicon provides services pursuant to Section 3, below; and (ii) an entity that ISA has consulted with before or during the Term regarding the provision of goods or services. 1.10 Notice shall have the meaning ascribed thereto in Section 11.5. 1.11 Parties shall mean ISA and Rubicon. 1.12 Rubicon Offerings shall mean (i) the software programs described in Exhibit B, (as may be updated from time to time) in object code format, and including all corrections, updates, modifications and enhancements to such software that may be provided to ISA by Rubicon from time to time; and (ii) software development services. 1.13 Term shall have the meaning ascribed thereto in Section 6.1. 1.14 Share Subscription Agreement shall mean the agreement in the agreed form between ISA and Rubicon whereby ISA shall subscribe for shares in Rubicon. 2. ISA RESELLER SERVICES. + + + + + + 2.1 Rubicon hereby grants to ISA during the Term (as defined below) and subject to the exclusions described in 2.4 below an exclusive, non-transferable license in the United States to market, sell, use, display, perform, sublicense and distribute the Rubicon Offerings, the Documentation and, subject to Section 2.2, any upgrades thereto, subject to the conditions set forth in this Agreement. As used in this Section 2.1, the terms "market," "sale," "sell," "distribute," and "sublicense" shall mean the sale of a license having a term of at least one year to an End User pursuant to which the End User may use, perform and display the Rubicon Offerings and the Documentation. This license is granted to ISA for the marketing, sale and distribution of the Rubicon Offerings and the Documentation to End Users for their internal use only. 2.2 Rubicon hereby grants to ISA during the Term and subject to the exclusions described in 2.4 below an exclusive, non-transferable license in the United States to grant licenses to use, display, perform and distribute the Rubicon Offerings and the Documentation to other resellers, including, but not limited to, distributors, Original Equipment Manufacturers, system integrators and Value-Added Resellers, for further sale and distribution to End Users for their use as described above, subject to the conditions set forth in this Agreement. 2.3 The license grants described in Sections 2.1 and 2.2 shall include all upgrades to the Rubicon Offerings and the Documentation. Rubicon shall promptly notify ISA of each such upgrade to the Rubicon Offering and the Documentation which will be available to ISA under this Agreement. 2.4 The exclusive licenses described in Sections 2.1 and 2.2 shall not include customer agreements, sales of Rubicon Offerings and/or Documentation which arise through customer marketing and distribution arrangements which are in place between Rubicon and third parties at the date hereof. Rubicon agrees not to enter into any additional agreement to sell Rubicon Offerings or Documentation or additional distribution arrangements with third parties in the United States from the date hereof without the prior written approval of ISA, which approval shall not be unreasonably withheld. 3. RUBICON SERVICES. 3.1 Subject to the terms and conditions of this Agreement, Rubicon shall provide the Contract Services, as agreed between ISA to Rubicon in the relevant SOW, to ISA's reasonable satisfaction. The Contract Services shall be performed at the facilities and location reasonably designated by ISA (with appropriate agreements in place to ensure reasonable reimbursement to Rubicon of out-of-pocket expenses). Upon written request of ISA, Rubicon shall provide biweekly written reports describing the progress made in performing the Contract Services since the preceding report, and the progress expected to be made in the next succeeding period. 3.2 ISA may, at any time, request reasonable additions, deletions, or revisions in the Contract Services by delivering a change order to Rubicon. Upon receipt of a change order from ISA, Rubicon shall notify ISA of any price revisions which are associated with the change order and if ISA agree to the revised charges, the parties shall proceed with the Contract Services as revised. All such Contract Services shall be executed under the terms and conditions of this Agreement and the applicable SOW (as revised by the change order). If any change order causes an increase or decrease in the cost of the Services to be performed or scheduled completion date or expenses incurred or to be incurred by Rubicon, an equitable adjustment will be made by mutual agreement. 3.3 From time to time and as agreed between ISA and Rubicon, Rubicon shall provide due diligence services regarding the software and other technology issues of potential merger and acquisition, joint venture or other strategic partner companies (a "Target Company") that may be identified by ISA (the "Due Diligence Services"). In connection with any such Due Diligence Services, Rubicon agrees that it shall abide by the reasonable terms of any third party confidentiality agreement that may be entered into by ISA with any such Target Company on the same terms as are applicable to ISA. Rubicon's fees for such due diligence services (the "Due Diligence Fees") shall be at agreed upon rates which shall not exceed the Day Rate. ISA agrees to reimburse Rubicon upon provision of valid receipts for Rubicon's reasonable out-of-pocket expenses incurred in the provision of the Due Diligence Services. 4. COMMERCIAL TERMS. 4.1 ISA Fees. In consideration of the services set forth in Section 2, ISA will sell or market the Rubicon Offerings at pre agreed list prices, and shall receive a commission on the gross revenues paid for the Rubicon Offerings less VAT if applicable of the Commission Rate; provided, however, that in the event that Rubicon proposes to charge at other than the Day Rate for the software development the Parties shall use all reasonable endeavours to agree an equitable adjustment to the Commission Rate. 4.2 Rubicon Fees. 4.2.1 In consideration of the Contract Services, Rubicon will receive payment as set forth in an SOW of its undisputed invoices (or its pro rata share) that it has submitted to ISA immediately following receipt of payment by ISA from the ISA Client. 4.2.2 In consideration of the Due Diligence Services, ISA shall pay to Rubicon the Due Diligence Fees within 30 days of receipt from Rubicon of an invoice and any previously requested supporting documentation, including time charges. 4.2.3 In addition to the payments set forth in sections 4.2.1 and 4.2.2, above, ISA will pay Rubicon 30% of ISA's profits (defined as gross revenues less costs directly incurred in the generation of such revenues) on projects for which Rubicon has provided Contract Services after ISA has recouped any directly attributable start-up costs with respect to such project up to a cumulative maximum of £100,000 of such costs associated with all such projects from the date of this agreement. 4.3 Target Revenues. ISA confirms that its current intention is to try and procure that Rubicon's total gross revenues less VAT if applicable relating to the provision of services to ISA Clients or to clients referred to Rubicon by ISA will exceed £1million per annum. The Parties acknowledge that any failure by ISA to procure such revenues for Rubicon will not constitute a breach of this Agreement and ISA will have no liability for any such failure or otherwise in connection with this clause 4.3. 4.4 Payment terms. Each party shall account to the other on a monthly basis in respect of all sales and revenue received, and payments shall be made within 30 days of receipt of a properly valid invoice. 4.5 Audits. Each Party shall retain the financial records relating to all payments owed and/or paid under this Agreement for a period of six years from the date such payment obligation arose. 4.6 Purchase of Rubicon Shares. This Agreement is conditional upon ISA and Rubicon entering into the Share Subscription Agreement. + + + + + +5. INTELLECTUAL PROPERTY. 5.1 ISA's Intellectual Property. As between ISA and Rubicon, all right, title and interest in and to Intellectual Property which is created by or provided by ISA, including, without limitation, as they may be part of or incorporated into any Contract Service or otherwise used by Rubicon, all goodwill associated therewith and the copyright and all other Intellectual Property rights inherent in or appurtenant to the foregoing are and shall be and shall remain the sole property of ISA. Rubicon acknowledges that neither it nor any other persons or entities will by virtue of this Agreement acquire any ownership interest in the Intellectual Property of ISA, or the Intellectual Property rights inherent in or appurtenant to any of the foregoing, or any associated goodwill and that its rights thereunder are strictly limited to those specifically granted in this Agreement. Rubicon shall not contest ownership by ISA of any of the foregoing. No right, license, release or other right is granted by implication, estoppel or otherwise by ISA to Rubicon or any of Rubicon's affiliates except for the rights and licenses expressly granted under this Agreement. Except for the rights and licenses expressly granted under this Agreement, ISA reserves all rights to the Intellectual Property of ISA, including, without limitation, translation rights, rights of modification and rights to source code. 5.2 Works-for-hire. 5.2.1 As regards Intellectual Property created by Rubicon, Rubicon acknowledges and agrees that those Works, as defined below, shall belong exclusively to ISA subject to payment in accordance with clause 4.2. Works means, collectively, any work product (of any type), software, developments, processes, improvements, and all works of authorship, in whole or in part, whether patentable or not and whether copyrightable or not created as services provided directly to ISA or on behalf of ISA by Rubicon, which (i) are conceived or made by Rubicon, its employees, contractors, consultants or agents during the Term and relate directly to the business in which ISA and Rubicon(during the Term by ISA) are, had been or were proposing to be engaged in; or (ii) are conceived or made by Rubicon, its employees, contractors, consultants or agents during or after the Term and are made through the use of any ISA Confidential Information, or which result from any work performed by Rubicon, its employees, contractors, consultants or agents for ISA. It is agreed that the terms under which Rubicon agrees to work with ISA, including the Day Rate, reflect and will reflect any value or potential value of Intellectual Property created by Rubicon on behalf of ISA. 5.2.2 Rubicon shall make full and prompt disclosure to ISA of all Works as they are made (whether or not conceived or made jointly with others). To the extent copyrightable, all Works shall be deemed to be "works for hire" and ISA shall be deemed to be the author thereof under the U.S. Copyright Act. With respect to Works that do not constitute "works for hire," Rubicon, its employees, contractors, consultants and agents do hereby assign to ISA or its designee all of their respective right, title and interest in and to such Works and all related patents, patent applications, copyrights and copyright applications and does hereby agree that these obligations are binding upon their respective assigns, executors, administrators and other legal representatives. Rubicon, its employees, contractors, consultants and agents do hereby waive all claims to moral rights to the Works. During the Term and continuing thereafter, Rubicon does hereby agree to take all such further reasonable actions on its own behalf and with respect to its employees, contractors, consultants and agents, including without limitation, the execution and delivery of copyright applications, patent applications, declarations, oaths, formal assignments, assignments of priority rights, and powers of attorney, which ISA may deem necessary or desirable in order to protect its rights and interests in and to the Works. If ISA is unable, after reasonable effort, to secure any necessary signature on any such documents, any executive officer of ISA shall be entitled as agent and attorney-in-fact to execute such documents. 5.3 Rubicon's Intellectual Property. As between ISA and Rubicon, all right, title and interest in and to the Rubicon Offerings and, subject to the provisions of Section 5.2, any other Intellectual Property of Rubicon, including, without limitation, as used by Rubicon or ISA hereunder, all goodwill associated therewith and the copyright and all other Intellectual Property rights inherent in or appurtenant to the foregoing are and shall be the sole property of Rubicon. ISA acknowledges that, except as otherwise set forth herein, neither it nor any other persons or entities will by virtue of this Agreement acquire any ownership interest in such Intellectual Property, or the Intellectual Property rights inherent in or appurtenant to any of the foregoing, or any associated goodwill and that its rights thereunder are strictly limited to those specifically granted in this Agreement. ISA shall not contest ownership by Rubicon of any of the foregoing. No license, release or other right is granted by implication, estoppel or otherwise by Rubicon to ISA or any of ISA's affiliates except for the rights and licenses expressly granted under this Agreement. Except for the rights and licenses expressly granted herein, Rubicon reserves all rights to the Rubicon Service Offerings, including, without limitation, translation rights, rights of modification and rights to source code. 6. TERM AND TERMINATION; WITHDRAWAL. 6.1 Term. Unless terminated sooner, the term of this Agreement shall begin on the Effective Date and continue for three (3) years thereafter (the "Initial Term") and shall automatically renew for additional one (1) year terms on the terms and conditions set forth herein (each a "Renewal Term" and collectively, the "Term") unless either party gives the other Party Notice of its intention to terminate this Agreement ninety (90) days before the end of the Initial Term or Renewal Term, if any. 6.2 Termination. 6.2.1 For Cause. Either Party may serve Notice to the other Party to terminate this Agreement immediately in the event any material breach of a material provision of this Agreement by such other Party remains uncured 30 days in the case of a breach of a payment obligation, or 45 days for all other material breaches, after notice of such breach was received by such other Party. 6.2.2 For Bankruptcy. Either Party may terminate this Agreement immediately upon Notice to the other Party in the event the other Party (a) permanently ceases operations, (b) becomes or is declared insolvent or bankrupt, (c) is the subject of any proceeding related to its liquidation or insolvency (whether voluntary or involuntary) that is not dismissed within 90 calendar days or (d) makes an assignment for the benefit of creditors. 6.2.3 For Contesting Intellectual Property Rights. Either Party may terminate this Agreement upon ten Business Day's Notice to the other Party in the event the other Party contests or challenges to a material degree any of the other Party's Intellectual Property rights referred to in Sections 5.1, and 5.3, respectively. 7. NON-COMPETITION. 7.1 During the period beginning on the Effective Date and ending on the later of (i) the end of the Initial Term and (ii) the date falling two years after completion of the most recent services provided by Rubicon under clause 7 (the "Non-Competition Period") and in the ISA Geographic Area, as defined below, Rubicon agrees not to in any capacity, engage or have a financial interest in any ISA Competing Business, as defined below, or provide managerial, supervisory, administrative, or financial services relating to any ISA Competing Business, including making available any information or funding to any such ISA Competing Business. Further, during the Non-Competition Period, Rubicon shall not solicit any + + + + + +employee of ISA or any employee of any ISA Client. If a court determines that the foregoing restrictions are too broad or otherwise unreasonable under applicable law, including with respect to time or space, the court is hereby requested and authorized by the Parties to revise the foregoing restrictions to include the maximum restrictions allowable under applicable law. Rubicon acknowledges, however, that the Parties have negotiated this Section and that the time limitations, the limitation on activities and the geographic limitations are reasonable in light of the circumstances pertaining to ISA and this transaction. "ISA Competing Business" means any person or entity of any type whatsoever engaged in the business of providing data centre audit and data centre optimization services. "ISA Geographic Area" means worldwide. 7.2 During the period beginning on the Effective Date and ending on the later of (i) the end of the Initial Term and (ii) the date falling two years after completion of the most recent services provided by Rubicon under clause 7 (the "Non-Competition Period") and in the Rubicon Geographic Area, as defined below, ISA agrees not to in any capacity, engage or have a financial interest in any Rubicon Competing Business, as defined below, or provide managerial, supervisory, administrative, or financial services relating to any Rubicon Competing Business, including making available any information or funding to any such Rubicon Competing Business. Further, during the Non-Competition Period, ISA shall not solicit any employee of Rubicon or any employee of any Rubicon Client. If a court determines that the foregoing restrictions are too broad or otherwise unreasonable under applicable law, including with respect to time or space, the court is hereby requested and authorized by the Parties to revise the foregoing restrictions to include the maximum restrictions allowable under applicable law. ISA acknowledges, however, that the Parties have negotiated this Section and that the time limitations, the limitation on activities and the geographic limitations are reasonable in light of the circumstances pertaining to Rubicon and this transaction. "Rubicon Competing Business" means any person or entity of any type whatsoever engaged in the business of providing software development services for clients. "Rubicon Geographic Area" means Europe. 7.3 In the event that ISA wishes to carry out any software development work of any nature during the Non-Competition Period, it will notify Rubicon of the same and allow Rubicon the opportunity to pitch for such work. 8. CONFIDENTIALITY. 8.1 Confidentiality Obligations. Except as permitted elsewhere under this Agreement, each Party agrees (a) to take Reasonable Steps (as defined below) to receive and maintain the Confidential Information of the other Party in confidence, (b) to take Reasonable Steps (as defined below) not to disclose such Confidential Information to any third parties other than with the written consent of the disclosing Party and (c) to promptly notify the other Party upon learning of any law, rule, regulation or court order that purports to compel disclosure of any Confidential Information of the other Party and to reasonably cooperate with the other Party in the exercise of the other Party's right to protect the confidentiality of such Confidential Information, including, but not limited to, seeking to dispute the cause of such disclosure and/or to receive confidential treatment for the Confidential Information disclosed as a result of such cause. Neither Party shall use all or any part of the Confidential Information of the other Party for any purpose other than to perform its obligations, or the exercise of such Party's rights and licenses, under this Agreement. Each Party shall (i) limit access to any Confidential Information of the other Party received by it to its employees, contractors, consultants and agents who have a need-to-know in connection with the performance of such Party's obligations, or the exercise of such Party's rights, under this Agreement; and (ii) advise such employees, contractors, consultants and agents of the confidential nature thereof and of the obligations set forth in this Agreement and similarly bind them in writing. Each Party shall be responsible for any breaches of the obligations of confidentiality and restricted use set forth herein by any employee, contractor, consultant or agent to whom such Party disclosed any Confidential Information of the other Party. As used herein, "Reasonable Steps" means using at least the same degree of care that the receiving Party uses to protect its own Confidential Information, and, in any event, no less than reasonable care. 8.2 Exclusions. Nothing contained herein shall prevent a Party from disclosing Confidential Information pursuant to any applicable law or by a governmental order, decree, regulation, rule, process or court order; provided, however, that such Party complies with the notice provisions of Section 8.1(c) to the extent permissible under applicable laws, rules, regulations or court orders. Such disclosure shall not of itself alter the status of such information hereunder for all other purposes as Confidential Information. 8.3 Provisions of this Agreement. Each Party agrees that the provisions of this Agreement shall be treated as Confidential Information and that no reference shall be made thereto without the prior written consent of the other Party (which consent shall not be unreasonably withheld) except (a) to its accountants, banks, financing sources, lawyers and other professional advisors, provided that such parties undertake in writing (or are otherwise bound by rules of professional conduct) to keep such information strictly confidential, (b) in connection with the enforcement of this Agreement, (c) in connection with a merger, acquisition or proposed merger or acquisition, or (d) pursuant to joint press releases prepared in good faith or (e) as permitted under Section 8.2. The Parties will consult with each other, in advance, with regard to the terms of all proposed press releases, public announcements and other public statements with respect to the transactions contemplated hereby. 8.4 Termination. Upon termination of this Agreement, all Confidential Information shall be returned to the disclosing Party or destroyed unless otherwise specified or permitted elsewhere under this Agreement or as otherwise mutually agreed upon by the Parties. The confidentiality obligations contained in this Section 8 shall survive termination of this Agreement for a period of three years. 8.5 Injunction. Each Party acknowledges and agrees that the provisions of this Section 8 are reasonable and necessary to protect the other Party's interests in its Confidential Information, that any breach of the provisions of this Section 8 may result in irreparable harm to such other Party, and in such event the exact amount of damages is now and will be difficult to ascertain and the remedies at law for any such failure would not be reasonable or adequate. Accordingly, in the event of any breach or threatened breach of the provisions of this Section 8 by a Party hereto, the other Party, in addition to any other relief available to it at law, in equity or otherwise, shall be entitled to seek temporary and permanent injunctive relief restraining the breaching Party from engaging in and/or continuing such conduct, without the necessity of proving actual damages or posting a bond or other security. Further, the prevailing Party in any such injunctive action shall be entitled to payment from the other Party of the reasonable attorneys' fees and costs incurred in such proceeding. 9. REPRESENTATIONS AND WARRANTIES. 9.1 By ISA. ISA hereby represents, covenants and warrants to Rubicon that: 9.1.1 It has the corporate power to enter into this Agreement; 9.1.2 It has the right to perform its obligations this Agreement; 9.1.3 When executed and delivered by it, this Agreement will constitute a legal, valid and binding obligation of it, enforceable against it in accordance with this Agreement's provisions; + + + + + +9.1.4 ISA shall perform all services required to be performed by ISA under this Agreement in a professional manner and all ISA personnel assigned to provide such services shall be duly qualified to provide such services; and 9.1.5 While at Rubicon's facilities, all ISA employees, contractors, consultants and agents shall observe and follow Rubicon's reasonable work rules, policies and standards as the same are communicated to ISA or such persons in writing, including, without limitation, those rules, policies and standards of Rubicon relating to security of and access to its facilities and to its telephone systems, electronic mail systems and computer systems. ISA shall cooperate with Rubicon in promptly removing from the Rubicon premises any of such persons who violates any of the foregoing work rules, policies or standards of Rubicon. 9.2 By Rubicon. Rubicon hereby represents, covenants and warrants to ISA that: 9.2.1 It has the corporate power to enter into this Agreement; 9.2.2 It has the right to perform its obligations this Agreement; 9.2.3 When executed and delivered by it, this Agreement will constitute a legal, valid and binding obligation of it, enforceable against it in accordance with this Agreement's provisions; 9.2.4 Rubicon shall perform all services required to be performed by Rubicon under this Agreement in a professional manner and all Rubicon personnel assigned to provide such services shall be duly qualified to provide such services; and 9.2.5 While at ISA's facilities, all Rubicon employees, contractors, consultants and agents shall observe and follow ISA's reasonable work rules, policies and standards as the same are communicated to Rubicon or such persons in writing, including, without limitation, those rules, policies and standards of ISA relating to security of and access to its facilities and to its telephone systems, electronic mail systems and computer systems. Rubicon shall cooperate with ISA in promptly removing from the ISA premises any of such persons who violates any of the foregoing work rules, policies or standards of ISA. 10. DISCLAIMER OF WARRANTY, LIMITATION OF LIABILITY AND INDEMNIFICATION. 10.1 Disclaimer of Warranties. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, ISA AND RUBICON HEREBY DISCLAIM ALL WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, WITH RESPECT TO ANY AND ALL ISA AND RUBICON SERVICES RESPECTIVELY, INCLUDING BUT NOT LIMITED TO ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE AND NON-INFRINGEMENT. 10.2 Limitation of Liability. EXCEPT IN CONNECTION WITH A BREACH BY EITHER PARTY OF SECTION 8, NEITHER PARTY WILL BE LIABLE FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL, EXEMPLARY, PUNITIVE OR INCIDENTAL DAMAGES ARISING OUT OF OR RELATED TO THIS AGREEMENT, HOWEVER CAUSED AND UNDER ANY THEORY OF LIABILITY (INCLUDING NEGLIGENCE), EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. ISA SHALL NOT BE LIABLE FOR ANY LOSS OF DATA, OR ANY INTERRUPTION OF OR DELAY IN PROVIDING THE SERVICES. EXCEPT IN CONNECTION WITH A BREACH BY EITHER PARTY OF SECTION 8, EACH PARTY'S LIABILITY FOR DAMAGES HEREUNDER (OTHER THAN IN RESPECT OF ANY CLAIM FOR MONIES DUE) SHALL NOT EXCEED £200,000. 10.3 Indemnification by Rubicon. Rubicon shall indemnify and hold harmless ISA and its officers, directors, employees and agents from and against any and all losses, claims, damages, liabilities, obligations, judgments, awards, costs, expenses (including reasonable attorneys' fees) and disbursements, including without limitation, the costs, expenses and disbursements, as and when incurred, of preparing or defending any action, suit, proceeding or investigation asserted by a third party ("Losses"), caused by, based upon, arising out of or in connection with a claim by a third party that the Rubicon Offerings infringe a 3rd party's exiting intellectual property rights or due to the gross negligence, recklessness or intentional misconduct on the part of Rubicon or its affiliates or its officers, directors, employees, agents, consultants or users. 10.4 Indemnification by ISA. ISA shall indemnify and hold harmless Rubicon and its officers, directors, employees and agents from and against any and all losses, claims, damages, liabilities, obligations, judgments, awards, costs, expenses (including reasonable attorneys' fees) and disbursements, including without limitation, the costs, expenses and disbursements, as and when incurred, of preparing or defending any action, suit, proceeding or investigation asserted by a third party ("Losses"), caused by, based upon, arising out of or in connection with ISA's role in the provision of the Rubicon Offerings or the gross negligence, recklessness or intentional misconduct on the part of ISA or its affiliates or its officers, directors, employees, agents, consultants or users. 10.5 Indemnitee Obligations. Each person seeking to be reimbursed, indemnified, defended and/or held harmless under Sections 10.3 or 10.4 (each, an "Indemnitee") shall (a) provide the Party obliged to indemnify such Indemnitee with prompt written notice of any claim, suit, demand or other action for which such Indemnitee seeks to be reimbursed, indemnified, defended or held harmless (each, a "Claim"), which notice shall include a reasonable identification of the alleged facts giving rise to such Claim; (b) grant such Party reasonable authority and control over the defense and settlement of any such Claim; and (c) reasonably cooperate with such Party and its agents in defense of any such Claim, at such Party's cost. Each Indemnitee shall have the right to participate in the defense of any Claim for which such Indemnitee seeks to be reimbursed, indemnified, defended or held harmless, by using attorneys of such Indemnitee's choice, at such Indemnitee's expense. Notwithstanding anything to the contrary herein, any settlement of a Claim for which any Indemnitee seeks to be reimbursed, indemnified, defended or held harmless under this Section 10 shall be subject to the prior written approval of such Indemnitee, such approval not to be unreasonably withheld, conditioned or delayed. 10.6 Essential Part of Bargain. The Parties acknowledge that the disclaimers and limitations set forth in this Section 10 are an essential element of this Agreement between the Parties and that the Parties would not have entered into this Agreement without such disclaimers and limitations. 11. MISCELLANEOUS. 11.1 Governing Law and Jurisdiction. This Agreement shall be governed by and interpreted under the laws of the State of Florida, USA,. The state and federal courts in the jurisdiction in which Palm City, Florida is located shall have non- exclusive jurisdiction for the purposes of adjudicating any controversy or claim between the parties concerning any breach or alleged breach of this Agreement or performance or nonperformance of any obligation under this Agreement, save that the parties agree that any dispute or claim concerning either clause 8 Confidentiality or clause 5 Intellectual Property may be raised in any appropriate jurisdiction where the breach or alleged breach has occurred. + + + + + + 11.2 No Assignment. Neither Party shall transfer, assign or cede any rights or delegate any obligations hereunder, in whole or in part, whether voluntarily or by operation of law, without the prior written consent of the other Party, which consent may be withheld at the other Party's reasonable business discretion; provided, however, that in connection with a merger, sale or transfer of substantially all of the assets or stock of one of the Parties that Party may provide for the assignee to be bound by the terms hereof. This Agreement shall inure to the benefit of, and shall be binding upon, the Parties and their respective successors and permitted assigns. 11.3 Good Faith. The Parties undertake to act in good faith, consistent with their respective rights and obligations set forth in this Agreement. 11.4 Independent Contractors. In connection with this Agreement, each Party is an independent contractor. This Agreement does not, and shall not be construed to, create an employer-employee, agency, joint venture or partnership relationship between the Parties. Neither Party shall have any authority to act for or to bind the other Party in any way, to alter any of the provisions of any of the other Party's standard forms of invoices, sales agreements, warranties or otherwise, to warrant or to execute agreements on behalf of the other, or to represent that it is in any way responsible for the acts, debts, liabilities or omissions of the other Party. 11.5 Notices. All notices, reports, payments and other communications required or permitted to be given under this Agreement (each, a "Notice") shall be in writing and shall be given either by personal delivery against a signed receipt, by express delivery using an internationally recognized express courier, or by email (with confirmation of receipt). All Notices shall be properly addressed as follows, or to such other addresses as may be specified in a Notice given hereunder: If to ISA: with a copy to: Attn: Joseph Coschera Attn: Daniel J. Dugan, Esq. + +1151 SW 30th St., Spector Gadon & Rosen, P.C. + +Palm City, Florida 34990 1635 Market St., 7th Floor + +joe_coschera@isa-inc.net Phila., PA 19103 ddugan@lawsgr.com If to Rubicon: with a copy to: Attn: Alistair Hancock Attn: Andrew Kirby Rubicon House Rubicon House Guildford Road Guildford Road West End, Surrey GU24 9PW West End, Surrey, GU24 9PW A Notice shall be deemed to be effective upon personal delivery or, if sent via overnight delivery, upon receipt thereof. A Notice sent via email is deemed effective on the same day (or if such day is not a Business Day, then on the next succeeding Business Day) if the confirmation that such email was received by the other Party is received before 5:00 p.m. prevailing Eastern time and on the next day (or if such day is not a Business Day, then on the next succeeding Business Day) if the confirmation that such email was received by the other Party is received on or after 5:00 p.m. prevailing Eastern time. 11.6 Amendment or Modification. No subsequent amendment, modification or waiver of any of the provisions of this Agreement shall be effective unless in writing and signed by the Parties. 11.7 Entire Agreement. This Agreement sets out the entire agreement between the Parties with respect to the subject matter of this Agreement and supersedes all prior agreements, proposals, arrangements and communications, whether oral or written, with respect to the subject matter hereof. 11.8 Severability. If any provision of this Agreement is held by a tribunal of competent jurisdiction to be illegal, invalid, or otherwise unenforceable in any relevant jurisdiction, then to the fullest extent permitted by law (a) the same shall not affect the other provisions of this Agreement, (b) such provision shall be deemed modified to the extent necessary in the tribunal's opinion to render such provision enforceable, and the rights and obligations of the Parties shall be construed and enforced accordingly, preserving to the fullest extent the intent and agreements of the Parties set forth herein and (c) such finding of invalidity, illegality or unenforceability shall not affect the validity, legality or enforceability of such provision in any other relevant jurisdiction. 11.9 No Waiver. Failure to enforce any provision of this Agreement is not a waiver of future enforcement of that or any other provision. No provision of this Agreement will be deemed waived and no breach excused unless such waiver or excuse is in writing and signed by the Party against whom enforcement of such waiver or excuse is sought. 11.10 Survival. Sections 5, 7, 8, 10 and 11; any payment obligations of the Parties hereunder accrued prior to the date of termination; and any other provision herein expressly surviving termination or necessary to interpret the rights and obligations of the Parties in connection with the termination of this Agreement will survive the termination of this Agreement. 11.11 No Third Party Beneficiaries. Except as set forth in Sections 10.3 and 10.4, nothing in this Agreement is intended to confer benefits, rights or remedies unto any person or entity other than the Parties and their permitted successors and assigns. Without limiting the generality of the foregoing, the clients, customers, shareholders or End Users shall not be deemed to be third party beneficiaries of this Agreement or have any other contractual relationship with ISA by reason of this Agreement. 11.12 Captions and Construction. The headings appearing at the beginning of the Sections contained in this Agreement have been inserted for identification and reference purposes only and shall not be used to determine the construction or interpretation of this Agreement. The nomenclature of the defined terms in this Agreement shall only be used for the construction of this Agreement, and are not to be used for any other purpose, including, but not limited to, interpretation for accounting purposes. The parties acknowledge that both ISA and Rubicon participated in the drafting of this Agreement and agree that any rule of law or legal decision that may or would require interpretation of any alleged ambiguities in this Agreement against the party that drafted it has no application and is expressly waived. 11.13 Further Assurances. Each Party shall perform such acts, execute and deliver such instruments and documents, and do all such other things as may be reasonably necessary to accomplish the transactions contemplated in this Agreement. + + + + + + 11.14 Language. This Agreement is in the English language only, which language shall be controlling in all respects, and all versions hereof in any other language hereof shall be for accommodation only and shall not be binding upon the Parties. All communications and notices to be made or given pursuant to this Agreement shall be in the English language. All words used in this Agreement will be construed to be of such gender or number as the circumstances require. Unless otherwise expressly provided, the word "including" does not limit the preceding word or terms. 11.15 Force Majeure. Neither Party shall be held to be in breach of this Agreement by reason of a force majeure event, including, but not limited to, act of God, delay in transportation, fire, flood, earthquake, storm, war, act of a public enemy, civil commotion or any law, rule, regulation, order or other action by any public authority or any other matter reasonably beyond a Party's control (a "Force Majeure Event"). To the extent failure to perform is caused by such a force majeure event, such Party shall be excused from performance hereunder so long as such event continues to prevent such performance, and provided the non-performing Party takes all reasonable steps to resume full performance. 11.16 Compliance with Laws. Each Party shall comply with all prevailing laws, rules and regulations and obtain all necessary approvals, consents and permits required by the applicable agencies of the government of the jurisdictions that apply to its activities or obligations under this Agreement. 11.17 Public Announcements. Any public announcement or similar publicity with respect to this Agreement or the transactions contemplated hereby shall be issued only after consultation with the other party hereto regarding the content of any such announcement or publicity. The parties recognize that, as publicly traded companies, such consultations will be constrained by applicable requirements relating to the disclosure of material information on the part of such party under applicable securities laws. 11.18 Execution in Counterparts, Facsimiles. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. This Agreement shall become binding when any one or more counterparts hereof, individually or taken together, bear the signatures of both Parties hereto. For the purposes hereof, a facsimile copy of this Agreement, including the signature pages hereto, shall be deemed an original. IN WITNESS WHEREOF, the Parties to this Agreement by their duly authorized representatives have executed this Agreement as of the date first written above. Information Systems Associates, Inc. Rubicon Software Group plc By: /s/ Joseph P. Coschera By /s/ Alistair C. Hancock: Name: Joseph P. Coschera Name: Alistair C. Hancock Title: President and CEO Title: CEO \ No newline at end of file diff --git a/full_contract_txt/DYNAMEXINC_06_06_1996-EX-10.4-TRANSPORTATION SERVICES AGREEMENT.txt b/full_contract_txt/DYNAMEXINC_06_06_1996-EX-10.4-TRANSPORTATION SERVICES AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..1f8cc9f8725284c8d60cff43114d3b0b2b857f2e --- /dev/null +++ b/full_contract_txt/DYNAMEXINC_06_06_1996-EX-10.4-TRANSPORTATION SERVICES AGREEMENT.txt @@ -0,0 +1,481 @@ +1 EXHIBIT 10.4 + + MARKETING AND TRANSPORTATION SERVICES AGREEMENT + + THIS AGREEMENT made in duplicate this 20 day of November, 1995. + +B E T W E E N: + + PUROLATOR COURIER LTD. ("Purolator") - and - PARCELWAY COURIER SYSTEMS CANADA LTD. a subsidiary of Dynamex Inc. ("Dynamex") + + WHEREAS Purolator inter alia, is licensed to provide courier services for compensation across Canada and the United States of America; + + AND WHEREAS Dynamex inter alia, is licensed to provide courier services for compensation across Canada and the United States of America; + + AND WHEREAS Purolator's principal business activity is next day or multiple day service: + + AND WHEREAS Dynamex' principal business is sameday service; + + AND WHEREAS Purolator and Dynamex wish to cooperate, as independent contractors, in the marketing of their respective services and in the provision of those services to their respective customers; + + NOW THEREFORE in consideration of the mutual covenants contained in this Agreement, the Parties hereto agree as follows: + +1.0 DEFINITIONS + +1.1 The following words shall have the following meanings throughout this Agreement: a) "Agreement" means this Agreement and all Schedules annexed hereto, as amended from time to time by the Parties; + + b) "Freight" means any goods directed to one Party by the other for pick up and/or delivery; + + c) "Force Majeure" means + + i) An Act of God; + + ii) A strike, lock out or other labour disturbance; + +2 - 2 - + + iii) A war, revolution, insurrection, riot, blockade or any other unlawful act against public order authority; iv) A storm, fire, flood, explosion, lightening or other hazardous weather condition; v) Any Ministry of Transportation road closure or other acts of government or transport authorities which are beyond the control of the Parties; vi) Any air traffic control delays, cancellations, reroutes or other acts of government, airport or aviation authorities, which are beyond the control of the Parties; vii) Any loss, hijacking, government seizure or diversion. + +1.2 All references to currency in this Agreement shall be to Canadian currency, unless otherwise indicated. + +1.3 All references to days in this Agreement are references to calendar days unless the reference is to business days, in which case business days shall be interpreted as business days as designated in the Province of Ontario. + +2.0 TERM + +2.1 This Agreement shall be effective from the date first above written and shall continue indefinitely until terminated by either Party in accordance with the provisions of this Agreement. + +3.0 SCOPE OF SERVICES + +3.1 Subject to the terms and conditions hereinafter set out, Purolator agrees to do the following: + + i) Offer sameday courier services to its customers under the Purolator name and trade-mark; + + + + + + ii) Tender to Dynamex all sameday courier service requests that it receives; + + iii) In connection with such sameday service requests, Purolator will handle the customer request, will dispatch the pickup request to Dynamex, will be responsible for billing the customer for the service and collecting the revenue and provide such sales and marketing service, in conjunction with Dynamex, as may be necessary; + + iv) Will provide its next day and multiple day transportation services to Dynamex' customers as may be required from time to time, such services to be provided in accordance with the service standards set out in Schedule "A" attached hereto, which service standards may be amended from time to time; + +3 - 3 - + + v) In providing such next day or multiple day services, agrees to provide customer service, dispatch, pickup and delivery, tracing and tracking, together with joint sales and marketing efforts with Dynamex, and will invoice Dynamex for the services provided at the rates provided for herein. + +3.2 Subject to the terms and conditions hereinafter set out, Dynamex agrees to do the following: + + i) Offer overnight courier services to its customers under the Dynamex name and trade-mark; + + ii) Tender to Purolator all overnight courier service requests that it receives; + + iii) In connection with such overnight service requests, will handle the customer request, will dispatch the pickup request to Purolator, will be responsible for billing the customer for the service and collecting the revenue and provide such sales and marketing service, in conjunction with Purolator, as may be necessary; + + iv) Will provide its sameday transportation services to Purolator's customers as may be required from time to time, such services to be provided in accordance with the service standards set out in Schedule "B" attached hereto, which service standards may be amended from time to time; + + v) In providing such sameday services, agrees to provide customer service, dispatch, pickup and delivery, tracing and tracking, together with joint sales and marketing efforts with Purolator, and will invoice Purolator for the services provided, at the rates provided for herein. + +3.3 For greater certainty, it is understood and agreed that either Party, in providing the services referred in 3.1 and 3.2 above, may agree to a variation of the services to be provided, including but not limited to who shall provide pick up and delivery, tracking, tracing, dispatch or other services. + +3.4 Each Party agrees to provide the services outlined above at an on time performance level of no less than ninety percent (90%) of the scheduled delivery time, excluding delays caused by the other Party or events of Force Majeure. Monthly, the performance level shall be measured as set out above. Failure to provide services as set out herein constitutes a Monthly Service Failure. + +3.5 Except for the joint marketing efforts referred to in Section 3.1 (v) above, Purolator agrees not to directly or indirectly solicit next day or multiple day freight from existing sameday customers of Dynamex. 4 3.6 Except for the joint marketing efforts referred to in Section 3.1 (v) above, Dynamex agrees not to directly or indirectly solicit overnight freight from customers of Purolator. + +3.7 Purolator agrees to tender to Dynamex all sameday service requests that it receives. + +3.8 Dynamex agrees to tender to Purolator all next day and multiple day transportation requests to Purolator for delivery. + +3.9 Dynamex agrees not to provide sameday delivery services for any other provider of next day or multiple day courier services. It is understood and agreed that Dynamex, from time to time and upon request, may provide pick-up and/or delivery services for other next-day or multiple day courier service providers, as part of their next-day and multiple day service commitment, provided Dynamex' services will not result in the provision of same day service to the customer of the provider of next-day or multiple day courier service. + + + + + + Dynamex may continue to provide the same day service it currently provides to Alltours customers, provided revenue to Dynamex from this business does not exceed Five Thousand Dollars ($5,000.00) per month provided there is no change in control, direct or indirect, in Alltours. + +3.10 It is understood and agreed by the Parties that each Party presently offers a number of services which are complementary to those provided for herein, including but not limited to mail room management services and building distribution services. In that regard, Dynamex offers its services as Dynamex while Purolator offers its services under the name Distribution Management Services Inc. or DMS. It is understood and agreed that nothing in this Agreement shall prevent the Parties from continuing to provide such services or their continued development of such services/operations. + +3.11 The Parties covenant and agree that this Agreement shall cover their services throughout Canada and the United States of America. If either Party desires to enter into an agreement with another party providing for services similar to those provided for herein, in either Canada or the United States of America or both, or to provide services similar to those provided for herein without an agreement, then same can only be done with the prior written consent of the other Party. It is understood and agreed that Dynamex may enter into an Agreement with another party to provide its services as described herein in the United States, provided however that any such agreement shall not preclude or prevent Dynamex from providing such Services to Purolator in the United States. + +3.12 Attached hereto as Schedule "C" to this Agreement is the Operational Plan for this Agreement. The Operational Plan details the obligations and responsibilities of the Parties pursuant to this Agreement, including but not limited to details as to the handling of freight, the exchange of freight, customer service, billing, invoicing, track and + +5 tracing responsibilities. Monthly, the Parties shall conduct operational meetings to adjust co-ordination, operational planning and any other requirements determined by the Parties from time to time. + +4.0 RATES + +4.1 Subject to all other terms and conditions of this Agreement, Purolator shall pay to Dynamex the rates set forth in Schedule "D". + +4.2 Subject to all other terms and conditions of this Agreement, Dynamex shall pay to Purolator the rates set forth in Schedule "E". + +5.0 PAYMENT PROCEDURES + +5.1 Each Party shall invoice the other twice a month, effective the fifteenth (15th) day and the last day of the month for services rendered for the period since the last invoicing. + +5.2 Every invoice shall be accompanied by supporting documentation to substantiate same. Failure to provide such documentation shall result in payment of only the invoiced amount which is supported by the documentation. + + Any amounts invoiced which are not supported by documentation shall not be paid until such time as documentation is provided by the invoicing Party. + + It is understood and agreed that Bills of Lading will not be required as supporting documentation. + +5.3 Dynamex must forward all invoices in duplicate and required documentation pertaining to this Agreement, to the attention of: + + Purolator Courier Ltd. 5995 Avebury Road, Suite 500 Mississauga, Ontario L5R 3T8 + + Attention: Finance + +5.4 Purolator must forward all invoices in duplicate and required documentation pertaining to this Agreement, to the attention of: + + Dynamex Express 2630 Skymark Avenue Mississauga, Ontario L4W 5A4 + +5.5 Every invoice shall be reviewed by the invoiced Party and subject to paragraphs 5.2, shall pay the invoice net fifteen (15) days from the date of invoicing. Invoices shall be delivered to the invoiced Party within three (3) days of the date of invoicing. + + + + + +6 - 6 - + +5.6 Interest, at the prime rate then charged to commercial customers by the Canadian Imperil Bank of Commerce (Toronto Main Branch), shall be payable on all amounts overdue for thirty (30) days or more. + +5.7 Any discrepancy in an invoice which is discovered by either Party may result in the issuance of a debit note or credit note by the appropriate Party, and notwithstanding any prior payment, the same shall be accompanied by supporting documentation. Payment shall be made by the appropriate Party net fifteen (15) days from receipt and acceptance of the documentation. + +5.8 (a) The Parties acknowledge and agree that the Services to be provided hereunder constitute the supply of freight transportation services in the course of the continuous movement of freight, also referred to as interlining. Accordingly, the Services under this Agreement are zero-rated for the purposes of the Goods and Services Tax (hereinafter referred to as "GST") pursuant to Section 1 of Part VII of Schedule VI of the Excise Tax Act, R.S.C. 1985, Chapter E-15, as amended from time to time. + + (b) In the event that "GST" or any other value added or sales taxes are applicable at any time during the Term of this Agreement: + + (i) Either party shall be liable for the same, if applicable; + + (ii) Either Party shall identify such tax separately on each invoice; and + + (iii) Either Party's GST registration number shall appear on each invoice. + +6.0 LIABILITY FOR LOSS OR DAMAGE + +6.1 A Party shall be liable to the other for loss, damage or delay to Freight due to its acts or omissions, including its negligence, and those of its employees, agents and those for whom in law it is responsible and occurring while Freight is in its care, custody or control. For the purpose of this Agreement, Freight shall be considered in the care, custody or control of a Party from the time it is tendered to it by the other Party or the other Party's customer until the time of its delivery to the other Party or the consignee, as intended. For greater certainty, a Party shall not be liable hereunder if the Freight is damaged solely as a result of improper packing. + +6.2 A Party shall, in the event of loss, damage or delay to Freight while in its care, custody or control, immediately notify the other Party of the loss or damage, carry out an investigation of the incident to determine the cause of such loss, damage or delay and shall within + +7 thirty (30) days of the event of loss, damage or delay or knowledge of such incident of loss, damage or delay, whichever is later, as the case may be, report its findings to the other Party. All costs associated with such investigation shall be the responsibility of such Party if the loss, damage or delay was due to the acts or omissions or those of its employees, agents or those for whom in law its is responsible; otherwise, the costs shall be shared equally by the Parties hereto. + +6.3 A party shall, for any loss, damage or delay to Freight while in its care, custody or control, forthwith pay to the other Party the actual damages suffered by such other Party. Such liability shall not exceed the other Party's contractual liability to its customers. The Parties acknowledge that their contract of carriage with their customers provides that liability for loss, damage or delay, including liability for consequential loss, is limited to Four Dollars and Forty One Cents ($4.41) per kilogram or Two Dollars ($2.00) per pound unless a higher value has been declared for insurance purposes. + +7.0 SET-OFF + +7.1 A Party shall pay to the other the full amount of any paid claim, loss or damage for which it is liable within forty five (45) days following presentation of supporting documentation. If a Party fails to pay following presentation of supporting documentation then the other Party shall have the right to deduct the amount of such claim, loss or damage from any monies due or becoming due to the first Party by the second Party. + +8.0 INDEMNIFICATION + +8.1 Each Party shall at all times indemnify and hold harmless the other, its directors, officers, employees and any others for whom it may be responsible in law, from and against all claims, including claims made by the indemnifying Party's personnel under worker's compensation legislation, demands, awards, judgments, actions and proceedings by whomsoever made, brought or prosecuted in respect of loss of, damage to or destruction of property (including loss or damage sustained by the indemnifying party) or personal injury including death and from and against any and all loss or, damage to or destruction of property, expenses and costs (including legal fees and disbursements) suffered or incurred by the indemnifying Party, its directors, officers, employees + + + + + + and any others for whom it may be responsible in law, arising out of or in any way connected with the indemnifying Party, its directors, officers, employees and any others for whom it may be responsible in law, arising out of or in any way connected with the indemnifying Party provision of Services under this Agreement and whether or not caused by the indemnifying Party's negligence. Loss or damage sustained by the indemnifying Party shall also include loss as a result of loss of use. + +8 - 8 - + +8.2 Notwithstanding anything contained herein to the contrary, the indemnifying party's liability to the other hereunder shall not exceed the insurance coverage set out in Section 9.0. + +9.0 INSURANCE + +9.1 Each Party shall purchase and maintain, at its own expense, the following insurance coverages: + + (a) cargo liability insurance, subject to a combined single limit of not less than One Hundred Thousand dollars ($100,000.00) inclusive per occurrence. The other Party shall be named as an additional insured and the policy shall contain a cross liability clause; + + (b) automobile, non-owned automobile, fleet, comprehensive general, public and property liability insurance with a limit of not less than Two Million dollars ($2,000,000.00) inclusive of bodily injury and property damage for any one occurrence arising out of one (1) cause. The policy shall cover all non-air operations, non-owned automobile, contractual liability and liability specifically assumed under this Agreement. The other party shall be named as an additional insured and the policy shall contain a cross liability clause; + +9.2 Each Party shall deliver to the other, prior to commencing to provide the Services and thereafter, annually, a certificate or certificates of insurance evidencing that the required insurance coverages as provided for in paragraph 9.1 are in effect and that each Party shall be given thirty (30) days prior written notice of cancellation or expiry of or material change to such insurance coverages. + +9.3 The Policies set out in paragraph 9.1 shall contain a waiver of subrogation rights in favour of the other Party, its officers, directors, employees and any others for whom it may be responsible in law. + +9.4 Each Party shall maintain the insurance coverages provided for in paragraph 9.1 hereof, in full force and effect during the term of this Agreement and covenants that nothing shall be done whereby any policy will be cancelled and shall pay all renewal premiums thereon on or before the due date and shall forthwith furnish the other Party with copies of certificates of insurance of such renewals. + +9.5 The policies set out in paragraph 9.1 shall not limit the insurance required by municipal, provincial, federal or other law. It shall be the sole responsibility of each Party to determine what additional insurance coverages, if any, are necessary and advisable for its own protection + +9 - 9 - + + or to fulfil its obligations under this Agreement. Any such additional insurance shall be provided and maintained by that Party at its own expense. + +9.6 Each Party shall ensure that any subcontractor or other party with whom it contracts in providing the Services shall carry adequate insurance coverage, but not less than that provided in paragraph 9.1. + +10.1 COMPLIANCE WITH LAW + +10.1 (a) Each Party shall comply with all legislation directly or indirectly applicable to the performance of its obligations under this Agreement. + + (b) Each Party shall notify the other at least thirty (30) days or in any event as soon as possible, before any change is made in its licences or operating authorities which may affect in any way the performance of any of its obligations under this Agreement. + +11.0 PROTECTION OF FREIGHT + +11.1 Each Party shall take all reasonable measures to ensure that Freight in its care, custody or control is protected at all times from theft, weather and all other damage or danger, and without restricting the foregoing, shall ensure that: + + (a) Freight is not kept out-of-doors except for purposes of loading or off loading; and + + (b) If at any time Freight is not under its complete visual and physical control, it shall provide a secure storage area + + + + + + in a facility at its own cost. + +12.0 SECURITY + +12.1 Each Party shall ensure that all reasonable security and investigation measures are implemented including but not limited to the provisions set forth in Schedule "F" respecting the provision of Services. + +12.2 Each Party shall implement and put in place security and investigation procedures to ensure the protection and security of Freight. These procedures shall include spot checks, inspections, reporting, investigations and any other procedures to ensure not only that the Services required by the other Party are provided but that the Services are provided in accordance with industry standards. + +10 - 10 - + +13.0 DANGEROUS GOODS + +13.1 The Parties acknowledge that the Transportation of Dangerous Goods Act, S.C. 1992, c.34, as amended from time to time (hereinafter referred to as the "TDGA") prohibits transportation of any explosive, dangerous or destructive substance, or anything likely to injure or damage property or persons (hereinafter referred to as "Dangerous Goods") unless the requirements of the TDGA are met. The Parties agree that they only intend for Dangerous Goods to be carried pursuant to this Agreement if the requirements of the TDGA are met and both Parties are aware that such goods are being carried. Notwithstanding the foregoing, the Parties agree that neither Dynamex nor Purolator shall be under any obligation or duty whatsoever to open for prior inspection any Freight tendered to Dynamex pursuant to this Agreement. Neither Party shall be responsible for any losses or damage whatsoever that may be sustained by the other Party, its directors, officers, employees and any persons for whom it may become responsible in law, as a result of any Dangerous Goods contained in Freight unless such Party had actual prior knowledge of the presence of Dangerous Goods. In the event a Party had actual prior knowledge of the presence of Dangerous Goods, then it shall be liable for loss or damage to the other Party if it would otherwise be liable under this Agreement or at law. + +13.2 Each Party must comply with the placarding and all other regulations applicable to the handling of Dangerous Goods. The Parties agree to maintain at their own expense a current Dangerous Goods Training Certificate for both air and ground shipments for itself and its operators during the term of this Agreement and to provide the other Party with a copy of same upon execution of the Agreement and thereafter, as the Parties request, failure of which may result in the termination of this Agreement immediately by the other Party. + +13.3 The Parties agree to ensure that their respective Dangerous Goods Handling Procedures are compatible to ensure complete adherence with the Legislation and Regulations. Each Party agrees to promptly advise the other of any changes to its Dangerous Goods Handling Procedures. + +14.0 RECORDS AND REPORTS 14.1 Each Party shall maintain performance reports, comparing actual to scheduled departure and arrival times for Services provided. Such reports shall be made available for review by the other Party and in connection with same, a Party shall provide copies of all data and records relating thereto. + +11 - 11 - + +14.2 Each Party shall maintain complete maintenance and operational records. + +14.3 Each Party shall keep accurate books, accounts and records covering all transactions relating to this Agreement, including books of original entry, and upon request from the other Party, shall allow access to same. + +14.4 Either Party shall have the right to request the other to provide, through an auditor agreed to by the Parties, validation of the information and data referred to herein. + +15.0 CONTINGENCY PLANS + +15.1 In the event a Party is unable to provide the Services as a result of a strike or other labour disruption caused by its employees, it shall attempt to subcontract the Services to another operator or operators, acceptable to the other Party. Such Services shall be provided by such subcontractor/subcontractors on the same terms and conditions herein set out and will be continued to be provided during the period of any such strike or labour disruption, unless this Agreement is otherwise terminated pursuant to the provisions of this Agreement. It is understood and agreed that, if such Party provides the Services by subcontracting to another operator/operators, then it shall be deemed not to be in default pursuant to paragraph 17.1(c). Notwithstanding same, all other default provisions as set out in paragraph 17, continue to apply. + + + + + +16.0 SERVICE FAILURE REMEDIES + +16.1 In the event that Monthly Performance Failures occur more than three (3) times in any twelve (12) month period, an Event of Default shall have occurred. + +17.0 DEFAULT PROVISIONS + +17.1 For the purposes of this Agreement, the following shall constitute events of default by a Party (hereinafter referred to as "Events of Default"): + + (a) if a petition is filed against it under any applicable bankruptcy legislation and is not withdrawn or dismissed within sixty (60) days thereafter; + + (b) if a resolution is passed by it respecting the sale of all or substantially all of its assets, or an order for the winding up of its business is made, or it otherwise agrees to make a bulk sale of it's assets; + + (c) if it ceases or threatens to cease to carry on its business; + +12 - 12 - + + (d) if it commits or threatens to commit an act of bankruptcy, or if it becomes insolvent or bankrupt or makes an assignment or if a receiver or receiver manager is appointed in respect of its business and affairs of either by way of private instrument or through court proceedings; + + (e) if a judgment or order is entered with respect to it under the Company Creditors Arrangement Act R.S.C. 1985, Chapter C-36, as amended, or similar legislation, or it takes advantage of the provisions of any bankruptcy or insolvency legislation; + + (f) if any execution, or any other process of any court becomes enforceable against all or substantially all of it's property or if a distress or analogous process is levied against all or substantially all of its property; + + (g) if it is in default as per paragraph 16.1 hereof; or + + (h) if it otherwise neglects or fails to perform or observe any of its obligations under this Agreement and fails to cure the breach or default within thirty (30) days of written notice to the other Party. + +17.2 Upon the occurrence of an Event of Default and in addition to any rights or remedies available to it under this Agreement or at law or in equity, the Party not in default may exercise any or all of the following remedies: + + (a) terminate this Agreement, upon giving one hundred and twenty (120) days written notice, otherwise upon written notice with respect to 17.1 (g) and (h); + + (b) recover from the defaulting Party any and all monies then due and to become due; and + + (c) take possession, immediately, without demand or notice, without any court order or other process of law, any and all of its property (including bags and containers) and Freight received by the defaulting Party under this Agreement. + +17.3 Termination of this Agreement shall be without prejudice to any other rights of the Party not in default, including the right to claim damages, and to the rights of the Parties that have accrued prior to termination. + +17.4 In the event the Defaulting Party fails to pay any amount due pursuant to paragraph 17.2, then the other Party shall have the right to deduct same from any amount due or to become due to the defaulting Party. 13 - 13 - + +18.0 PERFORMANCE PENALTIES + +18.1 In the event a Party has, in any twelve (12) month period, more than three (3) Monthly Performance Failures, then the defaulting Party shall pay a penalty to the Party not in default, which the Parties acknowledge is a pre-estimation of damages suffered by the non-defaulting Party due to the current month's Monthly Performance Failure ("Default Month"). + + For each Default Month, the Party in default shall pay a penalty equal to five (5) times the Party not in default's corporate average yield during the Default Month for each shipment below the performance + + + + + + commitment. + + For example, if the defaulting Party, in a Default Month, provided services at an eighty five percent (85%) level and the average yield for the Default Month of the Party not in default is ten dollars ($10.00) and the total number of shipments handled by the defaulting Party pursuant to this Agreement is one hundred (100), then the penalty would be equal to 5 x[(Performance Commitment - Actual Performance Level) x # of shipments] x average yield or 5 x [(90-85) x 100] x 10 = $250.00. 100 19.0 TERMINATION WITHOUT CAUSE + +19.1 Either Party may terminate this Agreement, without cause, by giving two (2) years written notice. + +19.2 In the event of a change in control of a Party, the other Party shall have the right, upon written prior notice, to terminate this Agreement. + +20.0 NOTICE + +20.1 Any notice or other communication with respect to this Agreement shall be in writing and shall be effectively given if delivered, or sent (postage or other charges prepaid) by letter, facsimile or electronic means addressed: + + (a) in the case of Purolator to: Purolator Courier Ltd. 5995 Avebury Road, Suite 500 Mississauga, Ontario L5R 3T8 Attention: + + (b) in the case of Dynamex: + + Dynamex Inc. 2630 Skymark Avenue Suite 610 Mississauga, Ontario L4W 5A4 14 - 14 - + + or to any other address of which the Party in question advises to the other Party in writing. Any notice that is delivered shall be deemed to have been received on delivery; any notice sent by facsimile or electronic means shall be deemed to have been received when sent and receipt confirmed and any notice that is mailed shall be deemed to have been received five (5) business days after being mailed. In the event of a postal disruption, service to be effective must be delivered or sent by facsimile. + +21.0 REPRESENTATIONS AND WARRANTIES + +21.1 Dynamex represents and warrants that: + + (a) it has the capacity, power and lawful authority to enter into this Agreement and to fulfill any and all covenants set forth in this Agreement to be fulfilled by it; + + (b) the terms of this Agreement are not in breach of any law, regulation, by-law, agreement, charter document or covenant by which Dynamex is governed or bound; + + (c) all necessary licenses, permits, consents or approvals of, notices to or registrations with or the taking of any other action in respect of any governmental authority or agency required to be obtained or accomplished by Dynamex has been obtained or accomplished and are in good standing; and + + (d) there are no pending or threatened actions or proceedings to Dynamex is a Party, or which is before any court or administrative agency, which might materially adversely affect the financial or other condition, business, assets, liabilities or operations of Dynamex or the ability of Dynamex to perform its obligations under this Agreement; + +20.2 Purolator represents and warrants that: + + (a) it has the capacity, power and lawful authority to enter into this Agreement and to fulfill any and all covenants set forth in this Agreement to be fulfilled by it; + + (b) the terms of this Agreement are not in breach of any law, regulation, by-law, agreement, charter document or covenant by which Purolator is governed or bound; + + (c) all necessary licenses, permits, consents or approvals of, notices to or registrations with or the taking of any other action in respect of any 15 - 15 - governmental authority or agency required to be obtained or accomplished by Purolator has been obtained or accomplished + + + + + + and are in good standing; and + + (d) there are no pending or threatened actions or proceedings to which Purolator is a Party, or which is before any court or administrative agency, which might materially adversely affect the financial or other condition, business, assets, liabilities or operations of Purolator or the ability of Dynamex to perform its obligations under this Agreement; + +22.0 FORCE MAJEURE + +22.1 No Party hereto shall be in breach of this Agreement by reason of a delay in the performance of, or failure to perform, any of its obligations hereunder if such a delay or failure is a result of an event of Force Majeure. 22.2 Each of the Parties hereto shall minimize, to the extent reasonably practicable, the impact on either Party of any of the events of Force Majeure in its performance of its obligations under this Agreement. + +22.3 The Party invoking an event of Force Majeure shall immediately notify in writing the other Party of such occurrence, whereupon the other Party shall confirm in writing having received such notice of the occurrence of an event of Force Majeure. + +23.0 ASSIGNMENT + +23.1 Neither Party shall sell, assign, subcontract, transfer or dispose of this Agreement or any part thereof, without the prior written consent of the other Party or otherwise enter into an agreement with any other Party for Services contemplated herein. + +23.2 The terms and conditions of any such subcontract shall respect the terms and conditions of this Agreement and in all cases shall be of equivalent or higher standards. Neither Party shall reveal the contents of this Agreement; however a Party may enter into identical agreements with its connectors, and/or subcontractors, as the case may be, with respect to the terms and conditions of this Agreement, save and except rates. + +24.0 ENTIRE AGREEMENT + +24.1 This Agreement and all Schedules attached hereto, embody the entire agreement of the Parties hereto and no representation, understanding, or agreement, verbal or otherwise exists between the Parties except as herein expressly provided. 16 - 16 - + +24.2 The following order of precedence shall be given in the event of a conflict between the documents comprising the Agreement: + + (a) Agreement (b) Schedules, and (c) the operating plan and any amendments thereto. + +25.0 WAIVER + +25.1 Failure of any Party to enforce or insist upon compliance with any of the terms or conditions of this Agreement shall not constitute a general waiver or relinquishment of any such terms or conditions but the same shall be and remain at all times in full force and effect. + +26.0 HEADINGS AND CAPTIONS + +26.1 Headings and captions are inserted for each section of this Agreement for convenience only and in no way define, limit or describe the scope of intent of this Agreement, nor shall they have any effect in regard to its interpretation. + +27.0 AMENDMENTS + +27.1 Unless otherwise provided herein, this Agreement shall not in any manner be supplemented, amended or modified except by written instrument executed on behalf of both Parties by their duly authorized representatives. + +28.0 SINGULAR/PLURAL + +28.1 Whenever, in this Agreement, the context requires or permits the singular number shall be read as if plural were expressed. + +29.0 SEPARATE COUNTERPARTS + +29.1 This Agreement may be executed in several counterparts, each of which, when so executed, shall be deemed to be an original of this Agreement and such counterparts together shall constitute but one and the same instrument. + +30.0 TIME + +30.1 Time shall, in all respects, be of the essence in each and every of the terms, covenants, obligations and conditions in this Agreement. + +31.0 SEVERABILITY + + + + + +31.1 In the event that any provision of this Agreement is invalid, unenforceable or illegal, then such provision shall be severed from this Agreement and this Agreement shall be read as if such provision were not part of this Agreement and provided such severance does not 17 - 17 - + + substantially frustrate the intention of this Agreement, such invalidity or unenforceability or illegality shall not affect any other provision of this Agreement. + +32.0 BINDING EFFECT + +32.1 This Agreement shall enure to the benefit of and be binding upon the Parties hereto, successors and assigns. + +33.0 RELATIONSHIP OF THE PARTIES + +33.1 The Parties recognize that they operate as an independent business and declare that nothing in this Agreement shall be construed as creating a relationship of employment, joint venture, partnership or agency between Purolator and Dynamex, and no act or omission of either Party shall bind or obligate the other except as expressly set forth in this Agreement. The Parties agree that no representation will be made or acts undertaken by either of them which could establish or imply any apparent relationship of agency, partnership, joint venture or employment and neither Party shall be bound in any manner whatsoever by any agreements, warranties, representatives or actions of the other Party to such effect. + +34.0 CONFIDENTIAL INFORMATION + +34.1 The Parties recognize that this Agreement contains information which is commercially sensitive and agree to keep the entire contents of this Agreement confidential and not to make any disclosures to any third Parties (other than their professional and financial advisers who agree to be bound by this provision) unless required by law to do so or unless prior written consent is obtained from the other Party. 35.0 TRADE-MARKS + +35.1 Each Party's trade-marks, distinctive colours and designs used in connection with the Services shall remain at all times during the term of this Agreement and on the expiration or termination thereof, the exclusive property of each Party and any benefit associated with such use shall accrue solely to that Party. Each Party shall use the other Party's trade-mark, distinctive colours and designs only with the prior written consent of the other Party and only in connection with the services provided hereunder. + +36.0 LAW OF THE AGREEMENT + +36.1 This Agreement shall be governed and construed in accordance with the laws of the Province of Ontario. All legal proceedings arising out of this Agreement shall be brought in a court of competent jurisdiction in the Province of Ontario, and each of the Parties hereby attorn to the jurisdiction of such court with respect to such proceedings. 18 - 18 - + +37.0 REMEDIES + +37.1 All remedies herein are cumulative and are in addition to, not in lieu of, any remedies provided at law or in equity. + +38.0 PUBLIC ANNOUNCEMENT + +38.1 The content and timing of any public announcement, press release or publication of any kind regarding this Agreement shall be mutually agreed to by the Parties, except disclosures required by applicable law, in which case advance notice will be given to the other Party. + +39.0 ARBITRATION + +39.1 If at any time a dispute arises between the Parties hereto which cannot be resolved by agreement among the Parties, or if the Parties are unable to agree on any matter that requires their mutual agreement hereunder, the dispute or matter shall be submitted to arbitration as provided in this Article by any Party hereto giving written notice to the other Party (the "Notice to Arbitrate"). The Notice to Arbitrate shall contain a concise description of the matter submitted for arbitration. + +39.2 The Parties hereto shall within ten (10) business days of receipt of the Notice to Arbitrate jointly appoint a single arbitrator. If the Parties fail to appoint an arbitrator who shall jointly select a third arbitrator within ten (10) days, failing which same shall be designated by the President of the Arbitrators' Institute of Canada Inc. upon the request of either Party. + +39.3 The arbitration shall take place in the Municipality of Metropolitan Toronto and shall be governed by the provisions of the Arbitration Act. + +39.4 The determination of the arbitrator shall be in writing and shall be final and binding upon the Parties hereto. + +39.5 The cost of the arbitration shall be borne by the Parties hereto + + + + + + equally. + +39.6 Submission to the arbitration under this Article shall be a condition precedent to the bringing of any action with respect to this Agreement. + +40.1 LANGUAGE + +40.1 The Parties have expressly requested that this Agreement be written in the English language. + + Les Parties ont specifiquement requis que la presente entente soit redigee en langue anglaise. 19 - 19 - + +41.0 REPUTATION + +41.1 In the event a Party has committed or shall commit any material act, or has or does become involved in any material situation or occurrence bringing either Party into public disrepute, contempt, scandal or ridicule, or shocking, insulting or offending potential customers of either Party or any racial, religious or ethnic, age or gender group, or reflecting unfavourably on either Party's reputation or their products or services, then the other Party may terminate this Agreement upon giving such notice as it deems appropriate. The non-offending Party's decision on such matter arising hereunder shall be based on its judgment as to whether or not the act or involvement of the offending Party has materially harmed or may be materially harmful to the Parties, their products, services or trademarks, in any respect, acting bona fidely. + +42.0 NON-COMPETITION + +32.1 In the event this Agreement is terminated pursuant to the provisions of paragraph 17, then the Party in default shall not enter into an agreement with any other Party to provide services similar to those provided herein or to provide its services similar to those provided for herein without an agreement, for a period of six (6) months from the effective date of termination. + +42.2 In the event this Agreement is terminated pursuant to the provisions of paragraph 19.2, then the Party whose control has changed shall not enter into an agreement with any other Party to provide services similar to those provided herein or to provide its services similar to those provided for herein without an agreement, for a period of twelve (12) months from the effective date of termination. + +The Parties have executed this Agreement as of the day, month and year first above written by their proper officers duly authorized on that behalf. + + PARCELWAY COURIER SYSTEMS CANADA LTD. + + Per: (ILLEGIBLE) 11/20/95 c/s ----------------------------- + + Per: c/s ----------------------------- + + PUROLATOR COURIER LTD. + + Per: (ILLEGIBLE) c/s ----------------------------- + + Per: (ILLEGIBLE) -------------------------------- \ No newline at end of file diff --git a/full_contract_txt/DYNTEKINC_07_30_1999-EX-10-ONLINE HOSTING AGREEMENT.txt b/full_contract_txt/DYNTEKINC_07_30_1999-EX-10-ONLINE HOSTING AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..4e183911f8809fce972f37342043b43b7ba9b402 --- /dev/null +++ b/full_contract_txt/DYNTEKINC_07_30_1999-EX-10-ONLINE HOSTING AGREEMENT.txt @@ -0,0 +1,197 @@ +[FORM] + +ONLINE HOSTING AGREEMENT + +This Online Hosting Agreement (this "Agreement") is being entered into effective as of the 1st day of June, 1999 and is entered into by and between Diplomat Direct Marketing Corporation, a Delaware corporation ("Diplomat"), and Tadeo E-Commerce Corp., a Delaware corporation ("Tadeo"). + +R E C I T A L S + +A. Historically, Diplomat has been engaged directly in, among other things, the business of offering consumers the opportunity to place apparel orders directly with Diplomat through its toll free telephone number and its web site (the "Direct Access Business"). + +B. Recently, Tadeo was formed and Tadeo and Diplomat have entered into a Web Design and Consulting Agreement of even date herewith (the "Web Agreement") pursuant to which Tadeo has agreed to assist Diplomat in developing the technology, and providing other services necessary, to further Diplomat's Direct Access Business, including the hosting and maintenance of Diplomat's web site (the "Web Site"). + +C. In connection with Diplomat's operation of its Direct Access Business, Diplomat desires to obtain various online hosting services ("Services") from Tadeo, and Tadeo desires to provide such Services to Diplomat. + +THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS: + +Section 1. SERVICES. + +Tadeo shall provide, directly or through a third party vendor reasonably satisfactory to Diplomat, the Online Hosting Services described on EXHIBIT A hereto, at the cost specified and on the other terms and conditions as set forth on EXHIBIT A. + +Section 2. COMPENSATION. + +Diplomat will pay to Tadeo when due a fee for each of the Services equal to the amount described in EXHIBIT A hereto relating to each such Service; PROVIDED, that in the event Diplomat terminates this Agreement in accordance with Section 3 hereof, the fee for the provision of each + +- 2 - + +terminated Service shall cease to accrue on and after the effective date of such termination. In the event that Diplomat terminates this Agreement other than in accordance with Section 3, Diplomat shall be obligated to pay for the Services in accordance with the fee schedule contained on EXHIBIT A throughout the balance of the Period (as hereinafter defined) as though Tadeo continued to provide the terminated Services through the balance of the Period. Late payments shall accrue interest at a rate equal to fifteen (15%) percent per annum. + +Section 3. TERM. + +(a) The term of this Agreement shall begin on the date hereof (the "Effective Date") and shall continue for a period of 12 months thereafter (the "Period") in full force and effect until it is terminated in accordance with this Section 3. + +(b) Diplomat or Tadeo, if such party is not in default of the terms of this Agreement, may extend the term of this Agreement for an additional one year ("Additional Period"), provided the extending party gives the other party at least sixty (60) days advance written notice before the end of the Period. If either party elects to extend the Agreement for the Additional Period, all other terms and conditions of this Agreement shall continue during the Additional Period. + +(c) Tadeo shall have the right (but not the obligation) to terminate this Agreement and the rights granted to Diplomat hereunder if: + +(i) Diplomat is in material breach of any of its obligations hereunder, which breach is not cured within five days of receipt of written notice from Tadeo of such breach; + +(ii) The Web Agreement is terminated by any of Tadeo, Diplomat, or any other party thereto [in the event the rights and obligations of any party(ies) to such Web Agreement have been duly assigned to a third party(ies) under the terms thereof] in accordance with the terms of the Web Agreement, but not if the Web Agreement is terminated by Tadeo or its assignee(s) other than in accordance with the terms of the Web Agreement; + +(iii) Diplomat is the subject of a voluntary petition in bankruptcy or any voluntary proceeding relating to insolvency, receivership, liquidation or composition for the benefit of creditors, if such petition or proceeding is not dismissed within 60 days of filing, or becomes the subject of any involuntary petition in bankruptcy or any involuntary proceeding relating to insolvency, receivership, liquidation or composition for the benefit of creditors, if such petition or proceeding is not dismissed within 60 days of filing; + + + + + +(iv) Diplomat involuntarily dissolves or is dissolved; + +- 3 - + +(v) Diplomat is judicially adjudicated insolvent or generally is unable to pay its debts as they mature or makes an assignment for the benefit of its creditors; or + +(vi) Upon Tadeo giving Diplomat at least sixty (60) days advance written notice of termination of this Agreement. + +(d) Diplomat shall have the right (but not the obligation) to terminate this Agreement and the rights granted to Tadeo hereunder if: + +(i) Tadeo is in material breach of any of its obligations hereunder, which breach is not cured within five days of receipt of written notice from Diplomat of such breach; + +(ii) The Web Agreement is terminated by any of Tadeo, Diplomat, or any other party thereto [in the event the rights and obligations of any party(ies) to such Web Agreement have been duly assigned to a third party(ies) under the terms thereof] in accordance with the terms of the Web Agreement, but not if the Web Agreement is terminated by Diplomat or its assignee(s) other than in accordance with the terms of the Web Agreement; + +(iii) Tadeo is the subject of a voluntary petition in bankruptcy or any voluntary proceeding relating to insolvency, receivership, liquidation or composition for the benefit of creditors, if such petition or proceeding is not dismissed within 60 days of filing, or becomes the subject of any involuntary proceeding relating to insolvency, receivership, liquidation or composition for the benefit of creditors, if such petition or proceeding is not dismissed within 60 days of filing. + +(iv) Tadeo involuntarily dissolves or is dissolved; + +(v) Tadeo is judicially adjudicated insolvent or generally is unable to pay its debts as they mature or makes an assignment for the benefit of its creditors; or + +(vi) Upon Diplomat giving Tadeo at least sixty (60) days advance written notice of termination of this Agreement. + +(e) Tadeo will have the right (but not the obligation) to terminate this Agreement and the rights granted to Diplomat hereunder, upon 60 days written notice to Diplomat, following the acquisition of all or substantially all of the assets of Diplomat by any Permitted Assignee (as defined in Section 9(a) of this Agreement), or the acquisition of the beneficial ownership of at least 20% (the "Threshold") of the voting power represented by the voting securities of Diplomat, any successor thereto or any Permitted Assignee by any person or + +- 4 - + +"group" within the meaning of Sections 13(d)(3) and 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or any successor provision to either of the foregoing, including any group acting for the purpose of acquiring, holding or disposing of securities within the meaning of Rule 13d-5(b)(1) under the Exchange Act or any successor provision thereof (a "group") other than The Rubin Family Irrevocable Stock Trust U/A dated April 30, 1997, organized under the laws of the State of New York (the "Trust"), Robert M. Rubin ("Rubin"), or any affiliate of Rubin or the Trust. For purposes of this Agreement, (i) the term "beneficial ownership" shall have the meaning set forth in Rule 13d-3 of the Exchange Act or any successor provisions thereof, (ii) the term "voting securities' means the common Stock, par value $.0001 per share, of Diplomat and any other securities issued by Diplomat having the power to vote generally in the election of directors of Diplomat and (iii) the term "affiliate" means a person or entity directly or indirectly controlled by, controlling or under common control with another person. For purposes of this Section 3, an acquisition shall not include (A) the acquisition by a person of voting securities of Diplomat pursuant to an involuntary disposition through foreclosure or similar event, or (B) the acquisition by a person of voting securities of Diplomat pursuant to a dividend intended to be on a tax-free basis (a "Tax-Free Spin-Off") under the Internal Revenue Code of 1986, as amended from time to time, but shall include a subsequent acquisition of voting securities pursuant to a disposition by the person that acquired the voting securities in such involuntary disposition or such Tax-Free Spin-Off. In the event any person acquires beneficial ownership of voting power in excess of the Threshold as a result of a transaction described in the immediately preceding sentence, the Threshold with respect to such person shall be adjusted to an amount equal to the percentage of beneficial ownership held by such person immediately following such transaction. + +(f) A party may exercise its right to terminate pursuant to this Section 3 by sending appropriate written notice to the other party. No exercise by a party of its rights under this Section will limit its remedies by reason of the other party's default, the party's rights to exercise any other rights under this Section 3, or any of that party's other rights. + +Section 4. RECORDS AND ACCOUNTS. + + + + + +Tadeo will maintain accurate books, records and accounts of all transactions relating to the Services performed by it pursuant to this Agreement. Diplomat may, at its own expense, examine and copy those books and records as provided in this Section 4. Such books, records and accounts will be maintained in a manner that allows Diplomat to separate these matters from those relating to Tadeo's other operations. Such books, records and accounts will reflect such information as would normally be examined by an independent accountant in performing an audit pursuant to United States generally accepted auditing standards for the purpose of certifying financial statements, and to permit verification thereof by governmental agencies. Diplomat may make examinations pursuant hereto during Tadeo's usual business hours, and at the place in the continental United States where Tadeo regularly keeps these books and records. Diplomat will be required to notify Tadeo at least five business days before the date of planned examination. If Diplomat's examination is not completed within one month from commencement, Tadeo at any time may require Diplomat to terminate such examination on + +- 5 - + +seven days' notice to Diplomat; PROVIDED that Tadeo has cooperated with Diplomat in the examination of such books and records. + +Section 5. NO RESTRICTIONS. + +Nothing in this Agreement shall limit or restrict the right of any of Diplomat's directors, officers or employees or any of Tadeo's directors, officers or employees to engage directly or indirectly in the same or similar business activities or lines of business as Diplomat or, respectively, or limit or restrict the right of Diplomat or Tadeo as the case may be, to engage in any other business or to render or obtain, as the case may be, services of any kind to or from, as the case may be , any corporation, firm, individual, trust or association. + +Section 6. INDEPENDENT CONTRACTORS. + +Tadeo and Diplomat are independent contractors. There is no relationship of partnership, joint venture, employment, franchise or agency between Tadeo and Diplomat. Neither Tadeo nor Diplomat shall have the power to bind the other or incur obligations on the other's behalf without the other's prior written consent. When Tadeo's employees act under the terms of this Agreement, they shall be deemed at all times to be under the supervision and responsibility of Tadeo and no person employed by Tadeo and acting under the terms of this Agreement shall be deemed to be acting as agent or employee of Diplomat or any customer of Diplomat for any purpose whatsoever. + +Section 7. CONFIDENTIALITY. + +Tadeo and Diplomat each agree to hold in strict confidence, and to use reasonable efforts to cause each of their employees and representatives to hold in strict confidence, all confidential information concerning Tadeo or Diplomat, as the case may be, furnished to or obtained by the other party, in the course of performing the obligations provided for under this Agreement except to the extent that (a) such information has been in the public domain through no fault of Tadeo or Diplomat, as the case may be, (b) disclosure or release is compelled by judicial or administrative process, or (c) in the opinion of counsel to Tadeo or Diplomat, as the as may be, disclosure or release is necessary pursuant to requirements of law or the requirements of any governmental entity including, without limitation, disclosure requirements under the securities laws of the United States or similar laws of other jurisdictions applicable to Tadeo or Diplomat, as the case may be. + +Section 8. PROPRIETARY RIGHTS OF TADEO. + +All materials, including but not limited to any computer software (in object code and source code form), data or information developed or provided by Tadeo, or its suppliers under this Agreement, and any know-how, methodologies, equipment, or processes used by Tadeo to provide the Services to Diplomat, including, without limitation, all copy-rights, trademarks, + +- 6 - + +patents, trade secrets, and any other proprietary rights inherent therein and appurtenant thereto (collectively, "Host Materials") shall remain the sole and exclusive property of Tadeo or its suppliers. To the extent, if any, that ownership of the Hose Materials does not automatically vest in Tadeo by virtue of this Agreement or otherwise, Diplomat hereby transfers and assigns to Tadeo all rights, title and interest which Diplomat may have in and to the Host Materials. Diplomat acknowledges and agrees that Tadeo is in the business of designing and hosting Web sites, and that Tadeo shall have the right to provide to third parties services which are the same or similar to the Tadeo Services, and to use or otherwise exploit any Host Materials in providing such services. + +Section 9. DISPUTE RESOLUTION. + +(a) In the event that any party to this Agreement has any claim, right or cause of action against any other party to this Agreement, which the parties shall be unable to settle by agreement between themselves, such claim, right or cause of action, to the extent that the relief sought by such party is for monetary damages or awards, shall be determined by arbitration in accordance with the Rules of the American Arbitration Association ("AAA"), + + + + + +through the adjudication by a single arbitrator, in New York, New York, with the decision of such arbitrator to be final and binding upon all parties. The fees, costs and expenses of such arbitration, as submitted by the AAA, shall be borne equally by both Tadeo and Diplomat; PROVIDED, that each of Tadeo and Diplomat shall pay the fees, costs and expenses of its own counsel, accountants and other representatives in connection with such arbitration. The parameters of the AAA proceedings undertaken in accordance with this Section 8 shall be prescribed such that a decision shall be rendered within sixty (60) days following the initial written reference of the related dispute to AAA arbitration. + +(b) Notwithstanding any other provisions of this Section 8, in the event that a party against whom any claim, right or cause of action is asserted commences, or has commenced against it, bankruptcy, insolvency or similar proceedings, the party or parties asserting such claim, right or cause of action shall have no obligations under this Section 8 and may assert such claim, right or cause of action in the manner and forum it deems appropriate, subject to applicable laws. No determination or decision by the arbitrators pursuant to this Section 8 shall limit or restrict the ability of any party hereto to obtain or seek in any appropriate forum, any relief or remedy that is not a monetary award or money damages. + +Section 10. MISCELLANEOUS. + +(a) Neither party any assign this Agreement, or their respective rights and obligations hereunder, in whole or in part, without the other party's prior written consent; PROVIDED, HOWEVER, that Tadeo shall be entitled to assign all of its rights and obligations hereunder to any subsidiary or affiliated entity without the consent of Diplomat. Any attempt to assign this Agreement without such consent (if required) shall be void and of no effect AB INITIO. Notwithstanding the immediately preceding sentence, either party may assign this Agreement or all, but not less than all, of its rights and obligations hereunder to any entity that acquires it by + +- 7 - + +purchase of stock or by merger or otherwise, or by obtaining all or substantially all of its assets (a "Permitted Assignee"); PROVIDED, that any such Permitted Assignee thereafter succeeds to all of the rights and is subject to all of the obligations of the assignor under this Agreement; and PROVIDED, HOWEVER, that the provisions of this Section 9(a) shall in no way modify the provisions of Section 3(d). + +(b) This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York applicable to agreements made and to be performed entirely within such State, without regard to the conflicts of law principles of such State. Each party shall comply in all respects with all laws and regulations applicable to its activities under this Agreement. + +(c) Notwithstanding the provisions of Section 8, each party hereto irrevocably submits to the exclusive jurisdiction of (a) the courts of the State of New York, New York County, or (b) the Untied States District Court for the southern District of New York, for the purposes of any suit, action or other proceeding arising out of this Agreement or any transaction contemplated hereby or thereby. Each of Diplomat and Tadeo agrees to commence any such action, suit or proceeding either in the Untied States District Court for the Southern District of New York, or if such suit, action or other proceeding may not be brought in such court for jurisdictional reasons, in the courts of the State of New York County. Each of Diplomat and Tadeo further agrees that service of any process, summons, notice or documents by U.S. registered mail to such party's respective address set forth below shall be effective service of process for any action, suit or proceeding in New York with respect to any matters to which it has submitted to jurisdiction in this Section 9(c). Each of Diplomat and Tadeo irrevocably and unconditionally waives any objection to the laying of venue of any action, suit or proceeding arising out of this Agreement or the transactions contemplated hereby and thereby in (i) the courts of the State of New York County, or (ii) the United States District Court for the Southern District of New York, and hereby and thereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum. + +(d) If any provisions of this Agreement (or any portion thereof) or the application of any such provision (or any portion thereof) to any person or circumstance shall be held invalid, illegal or unenforceable in any respect by a court of competent jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision hereof (or the remaining portion thereof) or the application of such provision to any other persons or circumstances. + +(e) All notices or other communications required or permitted to be given hereunder shall be in writing and shall be delivered by hand, by facsimile (with confirmation back), or sent, postage prepaid, by registered, certified or express mail or nationally recognized overnight courier service and shall be deemed given when so delivered by hand, by facsimile (with confirmation back), or if mailed, three days after mailing (one business day in the case of express mail or overnight courier service), as follows: + +- 8 - + +(i) if to Tadeo: + + + + + +Tadeo E-Commerce Corp. 5 Hanover Square New York, New York 10004 Attention: Damon Testaverde, President + +(ii) if to Diplomat: + +Diplomat Direct Marketing Corporation 414 Alfred Avenue Teaneck, New Jersey 07666 Attention: Warren H. Golden, President + +(f) The provisions of Sections 7, 8 and 9 hereof shall survive any termination of this Agreement. + +(g) No failure to either party to exercise or enforce any of its rights under this Agreement shall act as a waiver of such right. + +(h) This Agreement, along with the Exhibit hereto, contains the entire agreement and understanding between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings relating to such subject matter. Neither party shall be liable or bound to any other party in any manner by any representations, warranties or convenants relating to such subject matter expect as specifically set forth herein. + +(i) This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement, and shall become effective when one or more such counterparts have been signed by each of the parties and delivered to each of the other parties. + +(j) This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties hereto. + +(k) This Agreement is for the sole benefit of the parties hereto and nothing herein expressed or implied shall give or be construed to give to any person, other than the parties hereto any legal or equitable rights hereunder. + +(l) The headings contained in this Agreement or in any Exhibit hereto are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. All Exhibits annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein. Any capitalized terms used in any Exhibit but not otherwise defined therein, shall have the meaning as defined in this Agreement. When a reference is made in this Agreement to a Section or an Exhibit, such reference shall be to a Section of, or an Exhibit to, this Agreement unless otherwise indicated. + +- 9 - + +IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of June 30, 1999. + + TADEO E-COMMERCE CORP. + + By: /s/ Damon Testaverde Damon Testaverde President + + DIPLOMAT DIRECT MARKETING CORP. + + By /s/ Warren H. Golden Warren H. Golden President + +EXHIBIT A + +ONLINE HOSTING SERVICES + +If requested by Diplomat, Tadeo will provide, by itself or through its subsidiaries or affiliates, the Services described below: + +(a) Scope and Description of Services. Tadeo will provide Diplomat with all online hosting services currently provided to Diplomat through third party contracts, including, without limitations, the development and maintenance for Diplomat's operating divisions and/or operating subsidiaries of Commerce Web Subsites (as defined below) within the www.______ web site on the Internet based on online Enrollment and Information Forms, completed by Diplomat, submitted in conformance with Tadeo's instructions. Notwithstanding anything herein to the contrary, Tadeo and Diplomat will confer, from time to time, with respect to the placement of the link to this information and the manner in which this link appears on the subject web site; PROVIDED, that if mutual agreement is not reached on such placement, the reasonable determination with respect thereto made by Tadeo shall be final and binding on both parties. If a consumer places an order directly on a Tadeo-operated Commerce Web Subsite for a Diplomat Direct Access Business product, Tadeo agrees to transmit such order to Diplomat's Direct Access Business network and Diplomat will convert that order to a message and direct the order for internally processed fulfillment, with Diplomat receiving 100% of the order's value subject to any processing charges (subject + + + + + +to the terms of the Web Agreement). For the purposes of this Agreement, the terms "Commerce Web Subsite" means a web site through which a consumer can place an order for Diplomat products. + +(b) Price. For the services described above, Diplomat will pay Tadeo a monthly fee of $____________ for each Commerce Web Subsite hosted by Tadeo in accordance with the Fee Schedule annexed as EXHIBIT A-1. + +(c) Payment and Accounting. Tadeo will invoice Diplomat within 15 days of the end of each month for Services rendered in such month. Diplomat will pay such invoice within 30 days of receipt. + +EXHIBIT A-1 + +[Omitted] \ No newline at end of file diff --git a/full_contract_txt/DataCallTechnologies_20060918_SB-2A_EX-10.9_944510_EX-10.9_Content License Agreement.txt b/full_contract_txt/DataCallTechnologies_20060918_SB-2A_EX-10.9_944510_EX-10.9_Content License Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..7670aacce700b254518fce379750ec8ac60eff69 --- /dev/null +++ b/full_contract_txt/DataCallTechnologies_20060918_SB-2A_EX-10.9_944510_EX-10.9_Content License Agreement.txt @@ -0,0 +1,225 @@ +Exhibit 10.9 + + CONTENT LICENSING AGREEMENT + + between + + Data Call Technologies, Inc. 600 Kenrick, Suite B-12 Houston, Texas 77060 + + hereinafter referred to as "Licensor" + + and + + PLAN_B MEDIA AG Schaafenstr. 25 50676 Cologne Germany hereinafter referred to as "plan_b" + +1 PURPOSE OF THE AGREEMENT + + 1.1 The purpose of this content distribution Agreement (hereinafter "Agreement") is to set forth the terms and conditions under which plan_b may use the Content ("Content" as set forth in APPENDIX 2) owned or licensed by LICENSOR for a commercial distribution to plan_b's End Users in the territory ("Territory" as set forth in APPENDIX 2). + + 1.2 End User means any third Party receiving Content on a mobile device for a payment in accordance with the terms and conditions of this Agreement for their own private and non- commercial use. + +2 OBLIGATIONS OF LICENSOR + + 2.1 LICENSOR shall make a first delivery of Content to plan_b within 14 days after the signing of this Agreement unless separately agreed between the Parties. + + 2.2 LICENSOR shall deliver Content according to the specifications (for example formats, file sizes) set by plan_b or to be agreed between the Parties in writing. + + 2.3 LICENSOR grants plan_b for the term of this Agreement the right to produce, market and distribute Content to End Users (in the territory specified in appendix 2) through its own and its partner's platform. + +3 OBLIGATIONS OF PLAN_B + + 3.1 plan_b will distribute Content to End Users in the Territory through its distribution channels. + + 3.2 plan_b shall use reasonable commercial efforts to market and stimulate interest in the Content with its customers. + + 3.3 plan_b shall provide LICENSOR with a detailed written record, which includes the number of End User downloads and each distribution channel. Such report shall be provided to LICENSOR in electronic format within 6 weeks of the end of a quarter. + + 3.4 LICENSOR shall have the right to use a certified public accountant to inspect and audit all the related records and books of plan_b to ensure plan_b's compliance with the terms of this Agreement. In the event that any such audit reveals that plan_b has underpaid fees to the value of ten (10) percent or more of the total amount of payments for the period covered by the audit, plan_b shall bear the cost of the audit and shall in any event immediately pay to LICENSOR + +Source: DATA CALL TECHNOLOGIES, SB-2/A, 9/18/2006 + + + + + + the full value of the underpaid or under-reported fees. Such audits shall normally be conducted during normal business hours at plan_b's premises. + +4 REVENUES + + 4.1 plan_b shall pay LICENSOR a share of its revenues as set forth in APPENDIX 2 ("REVENUES"). + + 4.2 All shares are net, plus the respective applying value added tax (if applicable). + +5 INTELLECTUAL PROPERTY RIGHTS + + 5.1 LICENSOR is the owner of all intellectual property rights, including without limitation, any and all patents, utility models, trade marks, rights in designs, trade, business or domain names, know-how, rights in databases and copyrights, rights in inventions, ideas, concepts, trade secrets and confidential information which have to be given to fulfill this contract. + + 5.2 In the alternative, if LICENSOR is not the sole and exclusive owner of all of the foregoing intellectual property rights to the Content, LICENSOR has been granted by the owner or rightful sub-licensee of the intellectual property of the Content the right to grant the rights provided by LICENSOR to plan_b under this Agreement. + + 5.3 LICENSOR grants to plan_b a license to produce, use, distribute, promote and publicly display the Content in any possible way for distribution and marketing purposes. Additionally, Licensee shall have the right to use the trademarks, trade names, or logos relating to Content (the "TRADEMARKS"). + + 5.4 LICENSOR warrants that Content does not infringe an intellectual property right enforceable in the agreed country of delivery or use. LICENSOR indemnifies and holds harmless plan_b against all claims that Content infringes any of the above mentioned rights of a third Party. LICENSOR shall pay all damages awarded in a trial to a third Party. + +6 CONFIDENTIALITY + + 6.1 Each Party shall keep in confidence all material and information, including without limitation Content, received from the other Party and marked as confidential or which should be understood to be confidential, and may not use such material or information for any other purposes than those set forth in this Agreement. The confidentiality obligation shall, however, not be applied to material and information, which as shown by the receiving Party, + + 6.1.1 is generally available or otherwise public; or + + 6.1.2 the receiving Party has received from a third party without any obligation of confidentiality; or + + 6.1.3 was in the possession of the receiving Party prior to receipt of the same from the other Party without any obligation of confidentiality related thereto; or + + 6.1.4 the receiving party has independently developed without using material or information received from the other Party. + + 6.2 Each Party shall promptly upon termination of this Agreement or when the Party no longer needs the material or information in question for the purpose stated in this Agreement cease using confidential material and information received from the other Party and, unless the Parties separately agree on destruction of such material, return the material in question (including all copies thereof). + + 6.3 The rights and responsibilities under this section shall survive any termination or cancellation of this Agreement for 2 years. + +7 TERM OF THE AGREEMENT AND TERMINATION + +Source: DATA CALL TECHNOLOGIES, SB-2/A, 9/18/2006 + + + + + + 7.1 Unless otherwise stated in the Appendix the term of this letter Agreement shall continue for twenty-four (24) months with the effective date unless terminated sooner or extended pursuant to the terms hereof ("Initial Term"). The Initial Term shall automatically be extended for an additional period of half a year unless either party provides the other party with written notification of termination of the letter Agreement at least 60 days prior to end of such period. + + 7.2 Either Party shall be entitled to cancel this Agreement if the other Party is materially in breach of the terms of this Agreement. If the breach of contract is capable of being remedied, this Agreement can be cancelled only provided that the Party in breach has not rectified its breach within thirty (30) days of the written notice by the other Party. + + 7.3 Either Party may cancel this Agreement already prior to the date of its fulfillment, if it becomes evident that the other Party will commit a breach of contract entitling to cancellation of this Agreement. + + 7.4 Upon termination or cancellation of this Agreement plan_b shall cease to use Content for any purpose and delete Content from any files and data storage. + + 7.5 After termination of this contract, there shall be a sell-off period (defined in APPENDIX 2) following the date of termination of this contract. + +8 MISCELLANEOUS + + 8.1 The Parties acknowledge that they act as independent contractors and this Agreement does not constitute any partnership, joint venture, agency relationship or other independent legal entity separate from the Parties. + + 8.2 Neither Party shall assign or transfer to any third party, without the prior written consent of the other Party, this Agreement or any rights granted herein. + + 8.3 Any amendments to this Agreement shall be in writing and shall have no effect before signed by the duly authorized representatives of the Parties. + + 8.4 All payments will be made to Licensor in United States dollars. + +9 SEVERABILITY + + 9.1 In the event that any provision in this Agreement will be subject to an interpretation under which it would be void or unenforceable, such provisions will be construed so as to constitute it a valid and enforceable provision to the fullest extent possible, and in the event that it cannot be so construed, it will, to that extent, be deemed deleted and separable from the other provisions of this Agreement, which will remain in full force and effect and will be construed to effectuate its purposes to the maximum legal extent. + +10 GOVERNING LAW AND VENUE + + 10.1 This Agreement shall be governed and construed in accordance with the laws of the United States of America. The courts of competent jurisdiction at New York City, New York, shall have the exclusive jurisdiction over any dispute arising out of or in connection with this Agreement. + + 10.2 This Agreement has been prepared in two (2) identical copies, one for each Party. + +PLAN_B MEDIA AG PLAN_B MEDIA AG + +Source: DATA CALL TECHNOLOGIES, SB-2/A, 9/18/2006 + + + + + +03/24/06 03/24/06 ______________________________ _____________________________ Date Date + +/s/ Heim Brecht /s/ Stefan Meyes-Sickenagel ______________________________ _____________________________ Signature Signature + +Heim Brecht Stefan Meyes-Sickenagel ______________________________ _____________________________ Name (Please print) Name (Please print) + +CIO COO ______________________________ _____________________________ Title/Position Title/Position + +LICENSOR LICENSOR + +3/23/06 ______________________________ _____________________________ Date Date + +/s/ James Ammons ______________________________ _____________________________ Signature Signature + +James Ammons ______________________________ _____________________________ Name (Please print) Name (Please print) + +President and CEO ______________________________ _____________________________ Title/Position Title/Position + +APPENDIX I + +1. CONTACT PLAN_B MEDIA AG + + Name: Matthias Hellmann + + Position: Head of Content + + Phone: XXXXXXXXXXXXX + + Email: XXXXXXXXXXXXXXX + +2 CONTACT LICENSOR + + Name: Jim Ammons + + Position: CEO / President + + Phone: 866-219-2025 + + Email: ammons@datacalltech.com + +3 CONTACT LICENSOR AGENT (IF APPLICABLE) + + Name: + + Position: + + Phone: + + Email: + +4 BANK ACCOUNT LICENSOR + + Bank name: Bank Of America + + Bank address: Dallas, Texas + +Source: DATA CALL TECHNOLOGIES, SB-2/A, 9/18/2006 + + + + + + Country: USA + +APPENDIX 2 + +1 CONTENT, SHARE & TERRITORY + + 1.1 Contract name (for internal plan_b-ware use): Data Call Technologies, Inc. + +CONTENT LICENSOR TERRITORY TERMINATION SHARE + +Top News Headlines Top Business Headlines Science/Health News Entertainment Headlines + +National Football League National Basketball Association National Hockey League Major League Baseball NCAA Football NCAA Men's Basketball Professional Golf Association NASCAR + +Latest Sports Lines 45% Worldwide 24 months Latest Sports Headlines Thought for Today Market Details World Financial Highlights Weather: Current Conditions 48-Hour Forecast 7-Day Forecast Weather Alerts Doppler Weather Radar + +2 TERMS + + 2.1 Contract start: 04-01-06 + + 2.2 Contract end: 04-01-08 + + 2.3 Commercial distribution possible from: + + 2.4 Sell-off period: 3 months after termination + +3 PAYMENTS AND REPORTS TO LICENSOR + + 3.1 Reporting: Quarterly; 30 days after end of quarter + + 3.2 Payment terms: 30 days after receipt of invoice + +4 EXCLUSIVITY COPYRIGHT + + 4.1 Content exclusive: [ ] Yes [ ] No + + 4.2 Copyright: + +Source: DATA CALL TECHNOLOGIES, SB-2/A, 9/18/2006 \ No newline at end of file diff --git a/full_contract_txt/DeltathreeInc_19991102_S-1A_EX-10.19_6227850_EX-10.19_Co-Branding Agreement_ Service Agreement.txt b/full_contract_txt/DeltathreeInc_19991102_S-1A_EX-10.19_6227850_EX-10.19_Co-Branding Agreement_ Service Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..7acc0883768c1cd07622447e37afedf5d3db6b80 --- /dev/null +++ b/full_contract_txt/DeltathreeInc_19991102_S-1A_EX-10.19_6227850_EX-10.19_Co-Branding Agreement_ Service Agreement.txt @@ -0,0 +1,221 @@ +Execution Copy + + CO-BRANDING AND SERVICES AGREEMENT + + Co-Branding and Services Agreement, effective as of October 1, 1999 (this "Agreement"), between RSL COM PrimeCall, Inc., a Delaware corporation ("PrimeCall"), and deltathree.com, Inc. (formerly known as Delta Three, Inc.), a Delaware corporation ("DeltaThree"). + + W I T N E S S E T H : + + WHEREAS, PrimeCall is a leading provider and distributor of prepaid calling cards; + + WHEREAS, DeltaThree is a leading on-line provider of Internet Protocol (IP) communications services and utilizes the Internet and networks based on IP to provide telecommunications products and services; + + WHEREAS, each of PrimeCall and DeltaThree desires to co-brand a DeltaThree prepaid IP telephony calling card (the "Calling Card"); + + WHEREAS, PrimeCall desires to begin selling and advertising its prepaid calling products on-line utilizing the Internet; + + WHEREAS, PrimeCall has agreed to provide to DeltaThree certain services in connection with the Calling Card and DeltaThree has agreed to provide certain services in connection with the development of an on-line business to PrimeCall. + + NOW, THEREFORE, in consideration of the foregoing premises and of the mutual covenants hereinafter contained, the parties hereto hereby agree as follows: + + ARTICLE I [Term] + + Term + + Section 1.01. Term. The term of this Agreement shall be effective as of the date first stated above and shall continue for a term of three (3) years, unless terminated earlier in accordance with the provisions of this Agreement (the "Term"); provided, however, that PrimeCall may elect to terminate this Agreement, upon thirty (30) days' written notice, at any time from and after the time that collectively RSL Communications, Ltd. and/or its Affiliates holds less than fifty percent (50%) of the voting control of DeltaThree's outstanding shares. "Affiliate" as used in this Agreement shall mean any person directly or indirectly controlling or controlled by or under direct or indirect common control with such person. + + ARTICLE II [Co-Branding of Calling Card and Joint Marketing] + + Co-Branding of Calling Card and Joint Marketing + + Section 2.01 [Calling Card]. Calling Card. PrimeCall and DeltaThree shall jointly develop a DeltaThree prepaid calling card product (or modify and improve an existing PrimeCall product) which bears the logos of each of DeltaThree and PrimeCall. In order to lower the cost structure and increase the competitiveness of the Calling Card, DeltaThree and PrimeCall shall each use their reasonable best efforts to increase the percentage of the traffic derived from the use of the Calling Card which will be carried via the DeltaThree Network. For purposes of this Agreement, the "DeltaThree Network" shall mean Internet Protocol (IP) communications services, which utilize the Internet and networks, based on IP to provide telecommunications products and services. It is fully understood that the Calling Card is a DeltaThree product and accordingly all revenues derived therefrom will inure to the benefit of DeltaThree. + + Section 2.02 [On-Line Marketing]. On-Line Marketing. Each of PrimeCall and DeltaThree agree to place, in a prominent location, a link on its home page website to the other's home page website. + + Section 2.03 [Limited License]. Limited License. Throughout the Term of this Agreement, the parties hereby agree to grant to each other a limited license to use each other's proprietary marks solely in connection with the sale, distribution, marketing and promotion of each party's calling cards by the other party. Both parties hereto shall exercise such license in compliance with the quality and other standards established by the party owning such marks. Except as set forth herein, neither party shall use the other party's proprietary marks without the prior, express, written consent of the other party. All rights to either party's proprietary marks shall remain with the owner of the marks. + + ARTICLE III [Services Provided by PrimeCall] + + Services Provided by PrimeCall + + Section 3.01 [Printing of Calling Cards]. Printing of Calling Cards. PrimeCall shall negotiate and + +Source: DELTATHREE INC, S-1/A, 11/2/1999 + + + + + +contract on behalf of DeltaThree for the printing of the Calling Cards. PrimeCall will afford DeltaThree with the benefit of any discount pricing it receives with respect to the printing of its own calling cards. All agreements with respect to the printing of the Calling Cards shall be approved in advance by DeltaThree. DeltaThree shall reimburse PrimeCall for all costs incurred by PrimeCall in connection with the manufacturing and printing of the Calling Cards. + + Section 3.02 [Toll-Free Access Number]. Toll-Free Access Number. PrimeCall shall procure on behalf of DeltaThree a unique toll-free "800" access number for users of the Calling Card. DeltaThree shall be responsible for all costs in connection therewith. + + Section 3.03 [Pricing and Marketing]. Pricing and Marketing. PrimeCall shall provide DeltaThree with pricing and marketing services in connection with the Calling Card, including without limitation, developing a cost structure for the sale of the Calling Cards, pricing specific routes and determining discount rates. DeltaThree shall be responsible for all costs in connection therewith. + + 2 + + Section 3.04 [Sales and Distribution]. Sales and Distribution. PrimeCall's sales force shall assist in selling the Calling Card and PrimeCall shall handle all aspects of the distribution of the Calling Card, including without limitation, the negotiation of agreements with distributors, inventory control, billing and collections. All such agreements shall be approved in advance by DeltaThree. DeltaThree shall be responsible for all costs in connection with such sales and distribution efforts. + + Section 3.05 [Customer Service]. Customer Service. PrimeCall shall negotiate and contract on behalf of DeltaThree to out-source customer service for users of the Calling Card. DeltaThree shall reimburse PrimeCall for all customer service expenses directly related to users of the Calling Card. Notwithstanding the foregoing, the level of customer service shall be subject to the approval of DeltaThree. + + Section 3.06 [Reporting]. Reporting. On or before the tenth day of each calendar month, PrimeCall shall prepare for DeltaThree a report detailing the total revenues and expenses associated with the sale and use of the Calling Cards in the previous month. In the event that DeltaThree disputes any amounts set forth on the report, DeltaThree shall provide PrimeCall with written notice of such dispute, which notice shall detail the reasons for the dispute, within seven (7) days of its receipt thereof. The parties shall negotiate in good faith to resolve any such disputes. + + Section 3.07 [Procedures]. Procedures. The services to be provided by PrimeCall in accordance with this Article III [Services Provided by PrimeCall] shall be provided to DeltaThree in accordance with reasonable procedures for operation and may be changed from time to time if agreed upon by each of PrimeCall and DeltaThree. + + ARTICLE IV [Services Provided by DeltaThree] + + Services Provided by DeltaThree + + Section 4.01 [Web Site Development and Services]. Web Site Development and Services. Within three (3) months of the date hereof, DeltaThree shall establish and administrate a PrimeCall web site (the "PrimeCall Web Site") in consultation with PrimeCall which will enable PrimeCall to market and sell its calling cards via the World Wide Web and provide on-line support for such sales. The PrimeCall Web Site shall be a fully functional e-commerce site, with all ordering and billing performed on-line. DeltaThree shall provide ongoing upgrades to the PrimeCall Web Site, shall develop a database for the PrimeCall Web Site, and shall oversee all billing, collections and fulfillment for on-line orders. PrimeCall shall establish its own merchant account with Citibank or another accredited United States banking institution and provide DeltaThree with all information pertaining to such account to enable DeltaThree to process all on-line credit card transactions for PrimeCall. PrimeCall shall be fully liable for all charge-backs, refunds and commission payments associated with the processing of PrimeCall's on-line credit card transactions by DeltaThree. DeltaThree shall establish for PrimeCall an on-line interactive center whereby PrimeCall shall be able to monitor the on-line sales of its calling cards. All calling card and pricing information shall be + + 3 + +provided by PrimeCall. DeltaThree shall be responsible for all costs and expenses in connection with the operation and maintenance of the PrimeCall Web Site and the services provided pursuant to this Section 4.01 [Web Site Development and Services] shall be provided at no additional cost to PrimeCall; provided, however, that PrimeCall shall be fully responsible for all costs associated with the purchase of hardware, software and domain names related to the PrimeCall website. PrimeCall agrees to cooperate and provide necessary support to assist DeltaThree in providing the services under this Section 4.01 [Web Site Development and Services] and shall be responsible for supplying DeltaThree with the content and graphics (look and feel) of the PrimeCall website. In addition, upon the execution of this Agreement, each party shall appoint an account manager to work directly on the implementation of this Agreement. + + Section 4.02 [Reporting]. Reporting. On or before the tenth day of each calendar month, DeltaThree shall prepare for PrimeCall a report detailing the total + +Source: DELTATHREE INC, S-1/A, 11/2/1999 + + + + + +revenues and expenses associated with the sale of PrimeCall's calling cards via the World Wide Web in the previous month. In the event that PrimeCall disputes any amounts set forth on the report, PrimeCall shall provide DeltaThree with written notice of such dispute, which notice shall detail the reasons for the dispute, within seven (7) days of its receipt thereof. The parties shall negotiate in good faith to resolve any such disputes. + + Section 4.03 [Advertising and Promotion]. Advertising and Promotion. In addition to the link provided pursuant to Section 2.02 [On-Line Marketing] hereof, DeltaThree shall develop internet advertisements for PrimeCall and shall provide 500,000 advertising impressions on the DeltaThree home page during each month of the Term of this Agreement in the form of banners, box ads, or the equivalent. DeltaThree shall also conduct certain mutually agreed to targeted e-mail promotions upon the request of PrimeCall. The services provided pursuant to this Section 4.03 [Advertising and Promotion] shall be provided at no additional cost to PrimeCall. + + ARTICLE V [Payments] + + Payments + + Section 5.01. Payment Terms. Any amounts due hereunder shall be calculated and paid in U.S. dollars on a monthly basis within twenty-five (25) business days following the receipt of the reports detailed in Sections 3.06 [Reporting] and 4.02 [Reporting] hereof or any other invoices provided for herein. All payments shall be made via wire transfer in accordance with written instructions from the parties. + + ARTICLE VI [Termination] + + Termination + + Section 6.01 [Termination for Cause]. Termination for Cause. In the event that either PrimeCall or DeltaThree materially breaches any of its duties or obligations hereunder, which breach shall not be cured within thirty (30) days after written notice is given to the breaching party specifying the breach, then either PrimeCall or DeltaThree, as the case may be, may, by giving written notice thereof to the other, terminate this Agreement as of a date specified in such notice of termination, which + + 4 + +date shall be no earlier than ten (10) days after the date of such notice. + + Section 6.02 [Termination for Bankruptcy]. Termination for Bankruptcy. In the event of the Bankruptcy (as hereinafter defined) of either PrimeCall or DeltaThree, then the non-bankrupt party may, by written notice thereof to the party in Bankruptcy, terminate this Agreement as of a date specified in such notice of termination, which date shall be no earlier than ten (10) days after the date of such notice. For the purposes of this Agreement, "Bankruptcy" shall mean the happening of any of the following: (i) the filing of an application for, or a consent to, the appointment of a trustee for all or substantially all of the relevant party's assets, (ii) the filing of a voluntary petition in bankruptcy, or the filing of a pleading in any court of record admitting in writing the relevant party's inability to pay its debts generally as they come due, (iii) the making of a general assignment for the benefit of creditors, (iv) the entry of an order, judgment or decree by any court of competent jurisdiction adjudicating the relevant party a bankrupt, or appointing a trustee of all or substantially all of such party's assets unless such order, judgment or decree is vacated or stayed on appeal within thirty (30) days or (v) the filing of an involuntary case or other proceeding against the relevant party seeking liquidation, reorganization or other relief under any bankruptcy, insolvency or other similar law, which case or proceeding shall not have been dismissed within sixty days after filing. + + Section 6.03 [Effect of Termination]. Effect of Termination. In the event of the termination of this Agreement, all rights and obligations of PrimeCall and DeltaThree shall terminate as of the effective date of such termination, except that (i) such termination shall not constitute a waiver of any rights that either PrimeCall or DeltaThree may have by reason of a breach of this Agreement, (ii) such termination shall not constitute a waiver of any right to receive payments that are due and owing pursuant to this Agreement and (iii) the provisions of Article VII [Limited Warranty] shall continue in full force and effect. + + ARTICLE VII [Limited Warranty] + + Limited Warranty + + Section 7.01 [Disclaimer of General Warranty by PrimeCall]. Disclaimer of General Warranty by PrimeCall. PRIMECALL MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, CONCERNING THE SERVICES PROVIDED HEREUNDER, INCLUDING ANY IMPLIED WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE, MERCHANTABILITY OR OTHERWISE. IN NO EVENT SHALL PRIMECALL BE LIABLE TO DELTATHREE FOR ANY SPECIAL, INCIDENTIAL OR CONSEQUENTIAL DAMAGES, INCLUDING, WITHOUT LIMITATION, LOSS OF PROFITS, REVENUES OR DATA WHETHER BASED ON BREACH OF CONTRACT, TORT OR OTHERWISE, WHETHER OR NOT DELTATHREE HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE. THE LIABILITY OF PRIMECALL FOR DAMAGES OR ALLEGED DAMAGES HEREUNDER, WHETHER IN CONTRACT, TORT OR ANY OTHER LEGAL THEORY, IS LIMITED TO, AND WILL NOT EXCEED, DELTATHREE'S DIRECT DAMAGES. + + 5 + +Source: DELTATHREE INC, S-1/A, 11/2/1999 + + + + + + Section 7.02 [Disclaimer of General Warranty by DeltaThree]. Disclaimer of General Warranty by DeltaThree. DELTATHREE MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, CONCERNING THE SERVICES PROVIDED HEREUNDER, INCLUDING ANY IMPLIED WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE, MERCHANTABILITY OR OTHERWISE. IN NO EVENT SHALL DELTATHREE BE LIABLE TO PRIMECALL FOR ANY SPECIAL, INCIDENTIAL OR CONSEQUENTIAL DAMAGES, INCLUDING, WITHOUT LIMITATION, LOSS OF PROFITS, REVENUES OR DATA WHETHER BASED ON BREACH OF CONTRACT, TORT OR OTHERWISE, WHETHER OR NOT PRIMECALL HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE. THE LIABILITY OF DELTATHREE FOR DAMAGES OR ALLEGED DAMAGES HEREUNDER, WHETHER IN CONTRACT, TORT OR ANY OTHER LEGAL THEORY, IS LIMITED TO, AND WILL NOT EXCEED, PRIMECALL'S DIRECT DAMAGES. + + Section 7.03 [General Network Disclaimer] General Network Disclaimer. NEITHER PARTY REPRESENTS OR WARRANTS THAT ITS NETWORK, GATEWAYS OR, THE SERVICES PROVIDED HEREUNDER ARE COMPLETELY ERROR FREE OR WILL OPERATE WITHOUT PACKET LOSS OR INTERRUPTION NOR DO THEY WARRANT ANY CONNECTION TO OR ANY TRANSMISSION OVER THE INTERNET. + + ARTICLE VIII [Confidentiality] + + Confidentiality + + Section 8.01 [Confidentiality]. Confidentiality. PrimeCall and DeltaThree each agree that for the longest period permitted by law each shall hold in strictest confidence and, without the prior written approval of the other party hereto, not to use for their own benefit or the benefit of any party other than the other party hereto, or disclose to any person, firm or corporation other than such party (other than as required by law) any confidential proprietary information concerning the business and affairs of the other party hereto; provided, however, that the foregoing limitations and restrictions shall not apply to information that (i) is or becomes generally available to the public other than as a result of a disclosure by the directors, officers, shareholders, partners, affiliates, employees, agents or advisors of PrimeCall or DeltaThree, as the case may be, or (ii) is or becomes available to PrimeCall or DeltaThree on a non-confidential basis from a source other than the other party hereto or any of its advisors, agents or affiliates, provided that such source is not known by PrimeCall or DeltaThree, as the case may be, to be bound by a confidentiality agreement with or other obligation of secrecy to the other party hereto. Each of PrimeCall and DeltaThree recognize that the absence of a time limitation in this Section 8.01 [Confidentiality] is reasonable and properly required for the protection of the other party hereto and in the event that the absence of such limitation is deemed to be unreasonable by a court of competent jurisdiction, PrimeCall and DeltaThree each agree and submit to the imposition of such a limitation as said court shall deem reasonable. + + Section 8.02 [Confidentiality]. Equitable Remedies PrimeCall and DeltaThree each specifically recognize that any breach of Section 8.01 [Confidentiality] will cause irreparable injury to the other party hereto and that actual damages may be difficult to ascertain, and in any event, may be inadequate. Accordingly + + 6 + +(and without limiting the availability of legal or equitable, including injunctive, remedies under any other provisions of this Agreement), each of PrimeCall and DeltaThree agrees that in the event of any such breach, the other party hereto shall be entitled to injunctive relief in addition to such other legal and equitable remedies that may be available. In addition, PrimeCall and DeltaThree each agree that the provisions of Section 8.01 [Confidentiality] shall be considered separate and apart from the remaining provisions of this Agreement and shall be enforced as such. + + ARTICLE IX [Miscellaneous] + + Miscellaneous + + Section 9.01 [Further Assurances]. Further Assurances. Each party will, at any time and from time to time after the date hereof, upon the request of the other, do, execute, acknowledge and deliver, or shall cause to be done, executed, acknowledged and delivered, all such other instruments as may be reasonably required in connection with the performance of this Agreement and each shall take all such further actions as may be reasonably required to carry out or further effect the transactions contemplated by this Agreement. Upon request, DeltaThree and PrimeCall will cooperate, and will use their respective best efforts to have their respective officers, directors and other employees cooperate, at the requesting parties' expense, during and after the Term in furnishing information, evidence, testimony and other assistance in connection with any actions, proceedings, arrangements or disputes involving DeltaThree and/or PrimeCall. + + Section 9.02 [Survival of Representations]. Survival of Representations. All statements, certifications, indemnifications, representations and warranties made by the parties to this Agreement in this Agreement or in any certificate or list delivered pursuant hereto, and their respective obligations to be performed pursuant to the terms hereof and thereof, shall survive the Term notwithstanding (a) any examination or audit by or on behalf of any party hereto and (b) any notice of a breach or of a failure to perform not waived in writing. + + Section 9.03 [Notices]. Notices. All notices or other communications required or permitted hereunder shall be in writing and shall be deemed given or delivered (i) when delivered personally or by private courier, (ii) when actually + +Source: DELTATHREE INC, S-1/A, 11/2/1999 + + + + + +delivered by registered or certified United States mail, return receipt requested and postage prepaid or (iii) when sent by telecopy (provided, that, it is simultaneously electronically confirmed), addressed as follows: + + If to DeltaThree: + + 430 Park Avenue, 5th Floor New York, NY 10022 Fax No.: 212-588-3674 Attention: Chief Financial Officer + + With a copy to: + + 7 + + 430 Park Avenue, 5th Floor New York, NY 10022 Fax No.: 212-588-3674 Attention: General Counsel + + If to PrimeCall: + + 430 Park Avenue, 5th Floor New York, NY 10022 Fax No.: (212) 588-3601 Attention: President + + With a copy to: + + 430 Park Avenue, 5th Floor New York, NY 10022 Fax No.: 212-588-3601 Attention: General Counsel + +or to such other address as such party may indicate by a notice delivered to the other party hereto pursuant to the terms hereof. + + Section 9.04 [Independent Contractors]. Independent Contractors. At all times the parties hereto shall be considered independent contractors and this Agreement shall not create any agency, partnership or employment relationship between the parties. Except as specifically set forth herein, neither party shall have the right to act for or on behalf of or in the name of the other party. + + Section 9.05 [No Modification Except in Writing]. No Modification Except in Writing. This Agreement shall not be changed, modified, or amended except by a writing signed by the party to be charged and this Agreement may not be discharged except by performance in accordance with its terms or by a writing signed by the party to be charged. + + Section 9.06 [Waivers]. Waivers. The waiver, express or implied, by a party hereto of any rights hereunder or of any failure to perform or breach hereof by the other party shall not constitute or be deemed a waiver of any other right hereunder or any other failure to perform or breach hereof by the other party, whether of a similar or dissimilar nature. + + Section 9.07 [Entire Agreement]. Entire Agreement. This Agreement and all other documents to be delivered in connection herewith set forth the entire agreement and understanding between the parties as to the subject matter hereof and merges and supersedes all prior discussions, agreements and understandings of every kind and nature between them. + + Section 9.08 [Severability]. Severability. If any provision of this Agreement or the application of any provision hereof to any person or circumstances is held invalid, the remainder of this Agreement and the application of such provision to other persons or circumstances shall not be affected unless the provision held invalid shall substantially impair the benefits of the remaining portions of this Agreement. + + 8 + + Section 9.09 [Assignment]. Assignment. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns. This Agreement may not be assigned by DeltaThree without the prior written consent of PrimeCall. PrimeCall may assign this Agreement to any affiliate of PrimeCall or in connection with a merger or consolidation of PrimeCall or a sale of all or substantially all of PrimeCall's business. Except as provided in the preceding sentence, this Agreement may not be assigned by PrimeCall without the prior written consent of DeltaThree. + + Section 9.10 [Publicity; Announcements]. Publicity; Announcements. Except to the extent required by law, all publicity related to the transactions contemplated hereby shall be subject to the mutual approval of the parties hereto and, except as otherwise may be required by law, no public announcement of any of the transactions contemplated hereby will be made by either party hereto without the prior written consent of the other party hereto, which consent shall not be unreasonably withheld. + + Section 9.11 [Governing Law]. Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, without giving effect to the conflict of laws principles thereof. For purposes of this + +Source: DELTATHREE INC, S-1/A, 11/2/1999 + + + + + +Agreement, each party hereby irrevocably submits to the nonexclusive jurisdiction of the courts of the State of New York, sitting in New York County, and the courts of the United States for the Southern District of New York. Each party irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of the venue of any such suit, action or proceeding brought in any such court, any claim that any such suit, action or proceeding brought in such a court has been brought in an inconvenient forum and the right to object, with respect to any such suit, action or proceeding brought in any such court, that such court does not have jurisdiction over such party. In any such suit, action or proceeding, each party waives, to the fullest extent it may effectively do so, personal service of any summons, complaint or other process and agrees that the service thereof may be made by certified or registered mail, addressed to such party at its address set forth in Section 9.03 [Notices]. Each party agrees that a final non-appealable judgment in any such suit, action or proceeding brought in such a court shall be conclusive and binding. + + Section 9.12 [Captions]. Captions. The captions appearing in this Agreement are inserted only as a matter of convenience and for reference and in no way define, limit or describe the scope and intent of this Agreement or any of the provisions hereof. + + Section 9.13 [Third Parties]. Third Parties. There are no intended third party beneficiaries to this Agreement. + + Section 9.14 [Counterparts]. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original. + + 9 + + IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. + + RSL COM PRIMECALL, INC. + + By --------------------------------- Name: Arnold Goodstein Title: President and CEO + + DELTATHREE.COM, INC. + + By --------------------------------- Name: Amos Sela Title: President and CEO + + 10 + +Source: DELTATHREE INC, S-1/A, 11/2/1999 \ No newline at end of file diff --git a/full_contract_txt/DigitalCinemaDestinationsCorp_20111220_S-1_EX-10.10_7346719_EX-10.10_Affiliate Agreement.txt b/full_contract_txt/DigitalCinemaDestinationsCorp_20111220_S-1_EX-10.10_7346719_EX-10.10_Affiliate Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..a0bae6472aec6eb6e34338b9dc18508cfbe5746a --- /dev/null +++ b/full_contract_txt/DigitalCinemaDestinationsCorp_20111220_S-1_EX-10.10_7346719_EX-10.10_Affiliate Agreement.txt @@ -0,0 +1,467 @@ +DIGITAL CINEMA DESTINATIONS CORP. NETWORK AFFILIATE AGREEMENT THIS NETWORK AFFILIATE AGREEMENT (this "Agreement") is made as of this 14th day of March, 2011 by and between National CineMedia, LLC, a Delaware limited liability company ("NCM"), and Digital Cinema Destinations Corp., a Delaware corporation ("Network Affiliate" and with NCM, each a "Party" and collectively, the "Parties"). BACKGROUND WHEREAS, NCM operates a "Digital Content Network" of proprietary and third-party hardware and software pursuant to which the Service may be digitally transmitted to equipment and facilities installed in, and displayed on movie screens, video display terminals and similar equipment located in, movie theatres or other high traffic retail establishments, as further described herein; WHEREAS, Network Affiliate owns and operates a theatre circuit with a patron base in excess of 400,000 patrons; and WHEREAS, both Network Affiliate and NCM want to expand NCM's advertising "footprint" in the markets served by Network Affiliate; and WHEREAS, NCM and Network Affiliate want to enter into a strategic alliance under which NCM will provide the Service to Network Affiliate, and Network Affiliate will accept and display the Service in its theatres, all on the terms set forth herein. NOW, THEREFORE, in consideration of the premises and mutual covenants in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby expressly acknowledged, and, intending to be legally bound hereby, the Parties agree as follows: ARTICLE I DEFINITIONS The following terms shall have the following meanings: "Advertising Revenue Share" has the meaning assigned to it in Section 7.1. "Advertising Services" means the advertising and promotional services (including the Digital Content Service, the Digital Carousel, the Traditional Content Program, Lobby Promotions and Event Sponsorships) as described in Part A of Exhibit A. "Base Amount" has the meaning assigned to it in Section 7.2. "Beverage Agreement" means that certain Beverage Agreement, Pepsi dated January 1, 2011. 1 + +Source: DIGITAL CINEMA DESTINATIONS CORP., S-1, 12/20/2011 + + + + + + "Branded Slots" has the meaning assigned to it in Section 3.6(b). "Change of Control" has the meaning assigned to it in Section 14.8. "Confidential Information" means any and all technical and non-technical information of or related to either Party, including, without limitation, proprietary information, know-how, the NCM Property and Derived Works, and information related to or regarding either Party's research and development, finances, suppliers, customers, business forecasts, and marketing plans, in whatever form disclosed or made available. Confidential Information does not include information which: (i) the recipient can demonstrate was already known to it at the time of its receipt hereunder; (ii) is or becomes generally available to the public other than by means of the recipient's breach of its obligations under this Agreement; (iii) is independently obtained from a third party whose disclosure violates no duty of confidentiality; or (iv) is independently developed by or on behalf of the recipient without use of or reliance on any Confidential Information furnished to it under this Agreement. "Costs" has the meaning assigned to it in Section 10.1. "Derived Works" has the meaning assigned to it in Section 12.2. "Digital Carousel" means a loop of slide advertising with minimal branding and entertainment content which (i) is displayed before the Pre-Feature Program in Digitized Theatres via the Digital Content Network and (ii) is displayed before the Traditional Content Program in Non- Digitized Theatres via a non-digital slide projector. "Digital Cinema Services" means services related to the digital playback and display of feature films at a level of quality commensurate with that of 35 mm film release prints that include high-resolution film scanners, digital image compression, high-speed data networking and storage, and advanced digital projections. "Digital Content Network" means a network of Equipment and third-party equipment and other facilities which provides for the electronic transmission of digital content, directly or indirectly, from a centrally-controlled location to Theatres, resulting in the "on-screen" exhibition of such content in such Theatres, either in Theatre auditoriums or on Lobby Screens. "Digital Content Service" means the Pre-Feature Program, Policy Trailer and the Video Display Program. "Digitized Theatres" means all Theatres that are connected to the Digital Content Network as of the Effective Date and all Theatres that subsequently connect to the Digital Content Network, as of the date such connection is established. "Dispositions" has the meaning assigned to it in Section 2.6. "Effective Date" has the meaning assigned to it in Section 3.1. "Equipment" means (a) the equipment and cabling which is necessary to schedule, distribute, play, reconcile and otherwise transmit and receive transmission of the Digital Cinema Service, known as "small d Equipment"; and (b) the equipment and cabling which is necessary to schedule, distribute, play, reconcile and otherwise transmit and receive transmission of the Digital Cinema Service, known as "Big D Equipment". + + + + 2 + +Source: DIGITAL CINEMA DESTINATIONS CORP., S-1, 12/20/2011 + + + + + + "Excluded Theatres" has the meaning assigned to it in Section 3.10(a). "Exclusivity Exceptions" has the meaning assigned to it in Section 6.1. "Flight" has the meaning assigned to it in Section 3.2(a). "IMAX Screens" has the meaning assigned to it in Section 3.10(b). "Infringement" has the meaning assigned to it in Section 11.2. "Initial Term" has the meaning assigned to it in Section 8.1. "Inventory" means any advertising or other content. "Lobby Screen" means a plasma, LED or other type of screen displaying digital or recorded content that is located inside a Theatre and outside the auditoriums, or any other type of visual display mechanism that replaces such a screen. "Lobby Promotions" has the meaning assigned to it in Part A of Exhibit A. "Marketing Materials" has the meaning assigned to it in Section 5.3(a). "Minimum Fee" has the meaning assigned to it in Section 7.2. "NCM" has the meaning assigned to it in the preamble of this Agreement. "NCM Equipment" has the meaning assigned to it in Section 2.3. "NCM Marks" means the trademarks, service marks, logos, slogans and/or designs of NCM, each as identified on Exhibit C, in any and all forms, formats, and styles. "NCM Property" has the meaning assigned to it in Section 12.1. "NCM Quality Standards" has the meaning assigned to it in Section 5.3(a). "Net Revenue" has the meaning assigned to it in Section 7.1(b). "Network Affiliate" has the meaning assigned to it in the preamble of this Agreement. "Network Affiliate Marks" means the trademarks, service marks, logos, slogans and/or designs of Network Affiliate, each as identified on Exhibit C, in and any and all forms, formats, and styles, and including the Brand. "Network Affiliate Quality Standards" has the meaning assigned to it in Section 5.4(c). + + + + 3 + +Source: DIGITAL CINEMA DESTINATIONS CORP., S-1, 12/20/2011 + + + + + + "Non-Digitized Theatres" means Theatres that are not Digitized Theatres. "Party" or "Parties" has the meaning assigned to it in the preamble of this Agreement. "Play List" has the meaning assigned to it in Section 3.2(a). "Policy Trailer" has the meaning assigned to it in Section 3.6(a). "Point-of-Sale Information" has the meaning assigned to it in Section 5.1. "Pre-Feature Program" means a program of digital content of between twenty (20) and thirty (30) minutes in length which is distributed by NCM through the Digital Content Network for exhibition in Digitized Theatres prior to Showtime, or distributed non-digitally by some other means, including DVD, for exhibition prior to Showtime in Non-Digitized Theatres. "Renewal Term" has the meaning assigned to it in Section 8.1. "Representatives" has the meaning assigned to it in Section 10.1. "Service" means the Advertising Services and the Video Display Program. "Showtime" means the advertised showtime for a feature film. "Software" means the proprietary software owned and/or licensed by NCM or its affiliates and which is installed on the Equipment and used in connection with delivery of the Service. "Term" has the meaning assigned to it in Section 8.1. "Territory" means the United States of America, its territories and possessions. "Theatre Advertising" means advertisement of one or more of the following activities associated with operation of the Theatres: (A) Network Affiliate's gift cards, loyalty programs and other items related to Network Affiliate's business in the Theatres (other than film related) and (B) events presented by Network Affiliate. Additionally, Theatre Advertising shall include advertising, marketing and promotion of a local radio station or stations (but with no mentions or promotions of any third party) with which Network Affiliate has entered into a barter transaction for advertising of one or more of the Theatres by the radio station(s) in exchange solely for advertising the radio station or stations in one or more of the Theatres, entered into for the purpose of generating increased attendance at the Theatres (the "Strategic Program"). Such advertising for the Strategic Program may be placed in the Branded Slots, in Network Affiliate's slides exhibited in the Digital Carousel and in that portion of the Video Display Program to which Network Affiliate has access for advertising (but for no more than one minute of time for every 30 minutes of Video Display Program advertising). Strategic Programs may not be made on an exclusive basis. No more than one Strategic Program may be run in any Theatre at any time. + + + + 4 + +Source: DIGITAL CINEMA DESTINATIONS CORP., S-1, 12/20/2011 + + + + + + "Theatres" means the individual Network Affiliate theatres listed on Exhibit B, as such list may be modified from time to time. "Traditional Content Program" means advertising and other promotional content which is displayed on 35 mm film before Showtime. "Trailer" means a promotion secured by Network Affiliate (which retains the exclusive rights to so secure for all of its Theatres) for a feature film that is distributed by the distributor of the feature film for exhibition in the Theatres after Showtime. "Video Display Program" means a program of digital content shown on Lobby Screens which is distributed by NCM through the Digital Content Network for exhibition in Digitized Theatres, and non-digitally by some other means, including DVD, for exhibition in Non-Digitized Theatres. ARTICLE II EQUIPMENT Section 2.1 Equipment Purchase. (a) Traditional. For those theatres listed on Exhibit B not equipped for Digital Content Service, NCM will promptly install a non- digital slide projector in each auditorium necessary to exhibit the Traditional Content Program. (b) small d. Not later than six (6) months after NCM shall first deliver the Service to the Theatres, NCM will acquire the small d Equipment and shall install such Equipment in the Network Affiliate Theatres indentified on Exhibit B, but NCM shall not be obligated to spend more than $9,000 per screen. The cost of such small d Equipment shall be paid 100 percent (100%) by NCM. The type of equipment and technology for such connectivity shall be at NCM's discretion. (c) Big D. Network Affiliate, may at any time in its sole and absolute discretion, convert any of the Theatres so that Digital Cinema Services can be provided, using technology commonly known Big D technology. Network Affiliate shall purchase or lease and shall install such Big D Equipment in the Network Affiliate Theatres. The cost of such Big D Equipment shall be paid 100 percent (100%) by Network Affiliate. The type of equipment and technology for such connectivity shall be subject to NCM's approval which shall not be unreasonably withheld, conditioned or delayed. Section 2.2 Operational Costs. All costs associated with Network Affiliate's use of the Equipment, including the cost of electricity, telephone lines and the like, will be borne exclusively by Network Affiliate. Section 2.3 Ownership of small d Equipment. NCM will own the small d Equipment it has purchased pursuant to Section 2.1(b) (the "NCM Equipment"). NCM shall depreciate the cost of the NCM Equipment on a calendar quarterly basis, provided that the method used will result in full depreciation at the end of the five-year period commencing on the Effective Date. Upon expiration or termination of the Agreement for any reason, Network Affiliate shall pay NCM the value of the NCM Equipment, if any, that remains on NCM's financial statements as of the time of such expiration or termination. Upon payment of such amount to NCM by Network Affiliate at the time of such expiration or termination, NCM's ownership interest in the NCM Equipment will transfer to Network Affiliate. + + + + 5 + +Source: DIGITAL CINEMA DESTINATIONS CORP., S-1, 12/20/2011 + + + + + + Section 2.4 Ownership of Big D Equipment. Network Affiliate will own the Big D Equipment it has purchased or leased pursuant to Section 2.1(c) (the "Network Affiliate Equipment") and NCM disclaims any ownership interest, rights or liens in the Network Affiliate Equipment. Section 2.5 Installation. Except as otherwise provided herein, NCM and/or its subcontractors shall be solely responsible for the installation of all Equipment purchased pursuant to Section 2.1(a) or 2.1(b), and any Equipment necessary for connectivity under Section 2.1(c), as well as for ancillary services such as software integration. The cost of such installation, including, without limitation, outside labor costs and out- of-pocket costs (whether payable to outside labor or incurred by employees and paid to third parties), shall be deemed capital investment costs and shall be paid for one hundred percent (100%) by NCM. NCM shall use commercially reasonable efforts to install the Equipment in a manner reasonably calculated not to disrupt Network Affiliate's operations, on such schedule as is reasonably determined by NCM from time to time and reasonably agreed to in advance by Network Affiliate. Network Affiliate shall be solely responsible for obtaining any consents required for the installation or use of any Equipment at any Theatre, including without limitation, governmental and landlord consents. Any relocation or repositioning of any Equipment installed in any Theatre shall be performed only upon prior consultation with NCM. NCM and its subcontractors shall at all times be provided reasonable access to the Theatres, as required to install the Equipment according to the installation rollout schedule, and otherwise as reasonably necessary to perform its obligations and/or enforce its rights under this Agreement. Network Affiliate shall use commercially reasonable efforts to ensure that all Equipment delivered to any Theatre or otherwise in the possession, custody or control of Network Affiliate is secure and not accessible by authorized third parties. Section 2.6 Dispositions and Additions of Theatres. (a) Dispositions. Network Affiliate shall use commercially reasonable efforts to provide NCM at least six (6) months advance written notice (or such lesser time for notice as may be practicable based upon the date of execution of the agreement for such disposition and the disposition date) of the sale or other disposition of a Theatre, the loss of any Theatre lease, or its desire to permanently discontinue delivery of the Service to a Theatre (collectively, a "Disposition"). Subject to the provisions of Section 2.3 with respect to transfer of title to NCM Equipment, at least thirty (30) days prior to any Disposition, NCM shall be permitted to enter the affected Theatre(s) and remove any NCM Property. Except in connection with a Disposition, Network Affiliate shall not be permitted to permanently discontinue Service to any Theatre without the prior written consent of NCM, which consent will not be unreasonably withheld, conditioned or delayed. The costs of removal of NCM Equipment from any Theatre to which Service has been permanently discontinued shall be borne by Network Affiliate. + + + + 6 + +Source: DIGITAL CINEMA DESTINATIONS CORP., S-1, 12/20/2011 + + + + + + (b) Acquisitions. Any Network Affiliate theatre built or acquired following the Effective Date shall, upon mutual agreement of the parties, become a Theatre, and the capital costs of equipping all such new Theatres to receive the Service shall be as mutually agreed. Section 2.7 Training. Network Affiliate agrees to permit NCM to provide training services to Network Affiliates' support staff and customer service and other employees and agents. Network Affiliate shall cause its employees to attend such training and to follow the instructions given by NCM in such training as well as in follow-up instructions, guidelines and manuals of any kind provided to Network Affiliate by NCM. ARTICLE III DELIVERY OF THE SERVICE Section 3.1 Transmission of the Service. On the Effective Date (the date on which NCM first provides the Service to the Theatres) NCM shall provide all aspects of the Service to Network Affiliate and Network Affiliate shall exhibit and otherwise participate in such aspects of the Service, on the terms and conditions set forth herein. During the Term, all Theatres will participate in the Service as either Digitized Theatres or Non-Digitized Theatres. The Parties contemplate that the Effective Date will be on or about __________________________. (a) Digitized Theatres. As of the Effective Date and during the Term, pursuant to the terms of Section 3.2, NCM will provide the following Services to the Digitized Theatres, and all Digitized Theatres will participate in (i) the Digital Carousel during the period beginning after the preceding feature film (or, in the case of the first feature film of the day, beginning after the opening of the auditorium doors for that film) until the beginning of the Pre-Feature Program, (ii) the Pre-Feature Program, (iii) the Policy Trailer and (iv) the Video Display Program. (b) Non-Digitized Theatres. As of the Effective Date and during the Term, pursuant to the terms of Section 3.2, NCM will provide the following Services to the Non-Digitized Theatres, and all Non-Digitized Theatres will participate in (i) the slide carousel during the period beginning after the preceding feature film (or, in the case of the first feature film of the day, beginning after the opening of the auditorium doors for that film) until the beginning of the Traditional Content Program, (ii) the Traditional Content Program, (iii) the Policy Trailer and (iv) the Video Display Program, but with respect to participation of Non-Digitized Theatre's participation in the Video Display Program, only to the extent that a Non-Digitized Theatre has at least one Lobby Screen and has the requisite equipment necessary to participate in the Video Display Program. No Non-Digitized Theatre will be obligated to participate in, nor will NCM be obligated to provide to any Non-Digitized Theatre, the Pre-Feature Program. (c) Lobby Promotions. NCM shall provide Lobby Promotions to Theatres and Theatres shall participate in Lobby Promotions as described in Section 3.3. (d) Conversion of Theatres. No Digitized Theatre shall become a Non-Digitized Theatre without the mutual agreement of Network Affiliate and NCM. + + + + 7 + +Source: DIGITAL CINEMA DESTINATIONS CORP., S-1, 12/20/2011 + + + + + + Section 3.2 Content and Distribution of the Digital Content Service and Traditional Content Program. (a) Distribution. On the Effective Date, NCM will commence distribution of the Digital Carousel, the Digital Content Service and the Traditional Content Program to the Digitized Theatres and Non-Digitized Theatres, all as set forth above in Section 3.1. With respect to Digitized Theatres, content shall be distributed through the Digital Content Network, via either NCM's satellite network or by NCM's or Network Affiliate's landline network. Each of the Pre-Feature Program and the Video Display Program shall consist of Inventory comprising a single play list ("Play List"). The Play List will be refreshed during the Term when and as determined by NCM but not less frequently than 12 times per year (each a "Flight"). (b) Pre-Feature Program. As of the Effective Date, the Pre-Feature Program shall consist of four (4) or more elements, including: (i) commercial advertising; (ii) promotions for the Network Affiliate brand (including the Branded Slots), Concessions sold and services used by Network Affiliate and other products and services in accordance with Section 3.6; (iii) interstitial content; and (iv) other entertainment programming content which, while promotional of businesses or products, shall be primarily entertaining, educational or informational in nature, rather than commercially inspired. (c) Video Display Program. The elements of the Video Display Program shall be, generally, the same as those for the Pre-Feature Program, and will include the Branded Slots. NCM specifically agrees that the Video Display Program will contain only material that has received, or had it been rated would have received, an MPAA "G" or "PG" rating. Lobby Screens displaying the Video Display Program shall be located in areas of Theatres of NCM's choosing (subject to Network Affiliate's reasonable consnent and operational constraints and provided relocation of existing Lobby Screens is not required). Network Affiliate is obligated to provide a location for at least one Lobby Screen per Digitized Theatre with ten or fewer screens, two Lobby Screens per Digitized Theatre with eleven to twenty screens and three Lobby Screens per Digitized Theatre with more than twenty screens; provided, however, that Network Affiliate shall have no obligation to increase the number of Lobby Screens in any Theatre that has at least one Lobby Screen that is capable of receiving the Video Display Program as of the Effective Date. Section 3.3 Delivery of Lobby Promotions. On the Effective Date, NCM will make available to the Theatres the Lobby Promotions, and Network Affiliate will accept such Lobby Promotions on the terms and conditions set forth herein. (i) The Inventory of Lobby Promotions for each Theatre that Network Affiliate agrees to display pursuant to this Agreement is set forth in Exhibit A-1. NCM may provide additional Lobby Promotions, subject to approval by Network Affiliate. NCM will take all other actions necessary and prudent to ensure the delivery of Lobby Promotions as required under the terms hereof. NCM will inform Network Affiliate of the length of time that Lobby Promotions and additional Lobby Promotions, if any, are to be displayed. + + + + 8 + +Source: DIGITAL CINEMA DESTINATIONS CORP., S-1, 12/20/2011 + + + + + + (ii) NCM covenants and agrees that Lobby Promotions provided pursuant to this Agreement will conform to all standards and specifications of which Network Affiliate provides NCM reasonable notice during the Term, including without limitation standards and specifications with respect to manufacturers and suppliers, sizing (e.g., cup and popcorn tub sizing), timing of delivery of concession supplies to Theatres, reimbursement of incremental costs (e.g., cups, floor mats, plates) and the like. Lobby Promotions (i) will contain only material that has received, or had it been rated would have received, an MPAA "G" or "PG" rating, (ii) that the only type of sampling that will be permitted is exit sampling, (iii) to refrain from distributing chewing gum as part of any Lobby Promotion, other than attended sampling as patrons are exiting the Theatre, (iv) not to permit a Lobby Promotion that would distribute or sample any item that is the same as or substantially similar to any item sold at the Theatre's concession stand and (v) not to permit a Lobby Promotion involving fund raising on Theatre property. (iii) NCM will be responsible for all costs and expenses associated with sourcing, production, delivery and execution of Lobby Promotions to the Theatres, including incremental costs actually incurred by the Theatres in connection with Lobby Promotions. In its discretion, Network Affiliate may make employees available to assist in Lobby Promotions requiring exit sampling; provided that NCM shall reimburse Network Affiliate for the employees' time used to conduct the exit sampling at their customary wage. Section 3.4 Content Standards. The Parties agree that (unless mutually agreed by the Parties with respect to clauses (i), (iii), (iv), (v) or (vi)) all content within the Service will not contain content or other material that: (i) has received, or had it been rated would have received, an MPAA "X" or "NC-17" rating (or the equivalent), (ii) promotes illegal activity, (iii) promotes the use of tobacco, sexual aids, birth control, firearms, weapons or similar products; (iv) promotes alcohol, except prior to "R"-rated films in the auditorium; (v) constitutes religious advertising (except on a local basis, exhibiting time and location for local church services); (vi) constitutes political advertising or promotes gambling; (vii) promotes theatres, theatre circuits or other entities that are competitive with Network Affiliate's theatre operating business or NCM; or (viii) otherwise reflects negatively on Network Affiliate or adversely affects Network Affiliate's attendance as determined in Network Affiliate's reasonable discretion. Additionally, the service will not contain any material that depicts or advertises products competitive to the Beverage Agreement (except as an incidental product placement in content not created by NCM). Network Affiliate may, without liability, breach or otherwise, prevent and/or take any other actions with respect to the use or distribution of content that violates the foregoing standards; provided, that with respect to this Section 3.4(viii), Network Affiliate may opt out of such advertising only with respect to Theatres in the geographic locations identified, which may include all of Network Affiliate's Theatres. If the Digital Content Service contains any content that violates the foregoing standards, NCM will use commercially reasonable efforts to remove such content as soon as reasonably practical. If NCM fails to remove such content within a reasonable time, Network Affiliate may discontinue the Digital Content Service in such auditoriums where such content is shown until the violating content is removed and shall have no liability for such discontinuation. If any other elements of the Service contain any content that violates the foregoing standards, NCM shall at Network Affiliate's request, or Network Affiliate acting on its own behalf may, upon giving written notice to NCM, remove such content immediately. + + + + 9 + +Source: DIGITAL CINEMA DESTINATIONS CORP., S-1, 12/20/2011 + + + + + + Section 3.5 Development of the Program. All operational costs associated with NCM's procurement, preparation and delivery of the Service (including Inventory and other promotional materials as provided herein) to the Theatres shall be borne exclusively by NCM. Except as provided herein, all in-Theatre operational costs associated with Network Affiliate's receipt and exhibition of the Service within the Theatres shall be borne exclusively by Network Affiliate. NCM will provide at its own expense all creative and post-production services necessary to ingest, encode and otherwise prepare for distribution all other on-screen Inventory as part of the Digital Content Service. All on-screen Inventory provided by Network Affiliate for inclusion in the Digital Content Service must (i) be submitted to NCM for review for compliance with (ii) and (iii) below as NCM may reasonably request, but in any event at least twenty (20) business days before scheduled exhibition (unless otherwise previously approved by NCM), (ii) satisfy the content restrictions enumerated in Section 3.4, and (iii) be fully produced in accordance with NCM's technical specifications as promulgated by NCM from time to time (all as provided in written or electronic form to Network Affiliate), ready for exhibition, as well as in accordance with applicable NCM commercial standards and operating policies, and all applicable federal, state and local laws and regulations. Any Inventory provided by Network Affiliate for review and approval by NCM need not, once approved by NCM, be resubmitted by Network Affiliate for approval in connection with any future use. Section 3.6 Policy Trailer; Branded Slots. (a) Policy Trailer. The policy trailer will be (i) up to 60 seconds, (ii) exhibited in the Theatres after Showtime, (iii) be customized to include the name of the Network Affiliates Theatre business and (iii) used to feature content relating to Theatre policy and operations, and may include (w) a policy service announcement that promotes appropriate theatre behavior, (x) promotions of Network Affiliate Concessions, (y) upon prior written approval of Network Affiliate, other promotional materials of third-party products for which NCM sells advertising and is paid a fee (the "Policy Trailer"). All costs associated with producing the Policy Trailer shall be borne by Network Affiliate. (b) Branded Slot. The Digital Content Service will feature (i) up to two (2) minutes for Theatre Advertising (the "Branded Slots") in each Play List. Each Branded Slot may only exhibit Theatre Advertising. NCM is required to include no less than forty-five (45) seconds of Branded Slots within the final fifteen (15) minutes of the Play List, fifteen (15) seconds of which shall be included within the final eleven (11) minutes of the Play List; provided, that NCM may begin these Branded Slots up to one minute earlier when NCM expands the amount of advertising units that follow these Branded Slots through the sale of additional advertising to third parties. (c) Restrictions. Other than as permitted in Sections 3.6(a) or (b), neither the Policy Trailer nor the Branded Slot will not include third-party advertising and/or third-party mentions for products and services, without NCM's prior written approval. Section 3.7 Cooperation and Assistance. The Parties agree that the effectiveness and quality of the Service as provided by NCM are dependent on the cooperation and operational support of both Parties. (a) Network Affiliate agrees that it (and each of the Theatres) shall at all times during the Term provide NCM, at Network Affiliate's own cost except as otherwise provided in this Agreement, with the following: + + + + 10 + +Source: DIGITAL CINEMA DESTINATIONS CORP., S-1, 12/20/2011 + + + + + + (i) internal resources and permissions as reasonably required to effectuate delivery of the Service, including without limitation projection and sound technicians and other employees to assist with NCM Equipment installation and Digital Content Service transmission; (ii) unless unavailable, 24 (hour) by 7 (day) "real time" access via Network Affiliate's network assets in conformity with Network Affiliate's network use and security policies (provided in advance to NCM and consistently applied with respect to other Network Affiliate service providers) to the in-Theatre software and hardware components of the Digital Content Network, so that NCM can monitor the distribution and playback of the Service and the Parties will reasonably cooperate to ensure that corrections or changes are made as required to deliver the Service; (iii) detailed playback information in a form, whether electronic or hard copy, and at such times as either Network Affiliate or NCM shall reasonably request; (iv) prompt notification of reception, playback or other technical problems associated with receipt of the Service; (v) the results of quality audits performed by Network Affiliate periodically during the Term upon NCM's request and at its direction to confirm playback compliance; (vi) adequate opportunities to train Network Affiliate personnel, as provided in Section 2.7; (vii) attendance data film-by-film, rating-by-rating and Theatre-by-Theatre for all Theatres, in an electronic form and in a format agreed by the Parties, at such times as are consistent with Network Affiliate's internal reporting systems but in any event at least weekly; (viii) at such times as NCM shall reasonably request but no more often than on a quarterly basis, a list of all Theatres, including (i) identification of which Theatres are Digitized Theatres, (ii) the number of screens at each Theatre, and (iii) identification of any Theatres that are not equipped with at least one Lobby Screen to display the Video Display Program; and (ix) such other information regarding the Services as NCM may reasonably request from time to time; (b) For the avoidance of doubt, information made available subject to this Section 3.7 shall be subject to the provisions of Section 13.1 (Confidential Treatment). Network Affiliate agrees to be included in any compliance reporting NCM provides to its advertisers and other content providers for proof of performance. (c) NCM and Network Affiliate shall use commercially reasonable efforts to ensure that the Digital Content Network will be integrated with any network for the delivery of Digital Cinema Services such that the Services can be delivered over such network. + + + + 11 + +Source: DIGITAL CINEMA DESTINATIONS CORP., S-1, 12/20/2011 + + + + + + Section 3.8 Trailers. Trailers that are exhibited in the Theatres shall not include the exhibition or display of any trademark, service mark, logo or other branding of a party other than the film studio(s), distributor(s), production company(ies); provided, however, Trailers may include incidental images of products or services which appear in the motion picture (e.g., product placements). Section 3.9 Customer Access to Pre-Feature Program. Network Affiliate shall use its reasonable efforts to provide audiences access to the Theatre auditorium for the Pre-Feature Program or Traditional Content Program, as applicable. Section 3.10 Excluded Theatres; IMAX Screens. (a) Excluded Theatres. Network Affiliate shall have the right to designate art house and draft house theatres that for purposes of this Agreement shall be "Excluded Theatres". The list of Excluded Theatres identified as of the Effective Date is set forth on Exhibit D. Network Affiliate shall provide written or electronic notice to NCM, in the form specified by NCM, each time there is a change in its list of Excluded Theatres. Excluded Theatres shall not be deemed Theatres for purposes of this Agreement. Excluded Theatres will not receive Advertising Services. Excluded Theatres will not be considered for purposes of the calculation of Advertising Revenue Share. Notwithstanding the foregoing, Excluded Theatres will be subject to the exclusivity obligations of Network Affiliate, as set forth in Section 6.1, to the same extent as a Theatre hereunder. With respect to any Theatre subsequently designated as an Excluded Theatre, the parties will negotiate in good faith terms for the discontinuation of delivery of the Service to such Excluded Theatre. (b) IMAX Screens. All Theatre screens dedicated to the exhibition of films using "IMAX" technology shall be deemed "IMAX Screens." IMAX Screens will not receive, and Network Affiliate will have no duty to exhibit on any IMAX Screen, the Digital Carousel, the Pre- Feature Program or the Traditional Content Program; provided however, that Network Affiliate may elect to exhibit the Digital Carousel, the Pre- Feature Program or the Traditional Content Program on its IMAX Screens in its sole discretion. Notwithstanding the foregoing, all IMAX Screens will be subject to the exclusivity obligations of Network Affiliate, as set forth in Section 6.1 to the same extent as a Theatre hereunder. Network Affiliate will provide NCM prompt written notice of any additions to or deletions from its list of IMAX Screens, which list appears on Exhibit D. Network Affiliate shall provide written or electronic notice to NCM, in the form specified by NCM, each time there is a change in its list of IMAX Screens. Section 3.11 Grand Openings; Employee Uniforms. Notwithstanding anything herein to the contrary, Network Affiliate shall not be prohibited from: (i) promoting the grand opening of a Theatre or an Excluded Theatre, provided such promotional activity (x) may occur only for the thirty (30) day period immediately preceding the opening of the theatre to the general public through the thirty (30) day period immediately following the opening of the theatre to the general public, and (y) includes local advertising of such opening in exchange for the advertising of local businesses only, provided any on-screen advertising related thereto shall be subject to availability of on-screen Inventory and limited to one (1) advertisement thirty (30) seconds in length; and (ii) allowing advertising for the supplier of Network Affiliate employee uniforms to appear on such uniforms, provided that not more than two individual instances of such advertising ,may appear on any such uniform at any one time. + + + + 12 + +Source: DIGITAL CINEMA DESTINATIONS CORP., S-1, 12/20/2011 + + + + + + Section 3.12 License. NCM hereby grants to Network Affiliate at no cost a limited, non-exclusive, non-transferable, non-sublicenseable, royalty-free license in the Territory during the Term only to receive, store, convert or otherwise manage, display and exhibit the Service on the Equipment at Theatres solely in connection with its performance of and subject to all of the terms and conditions of this Agreement. Network Affiliate may not materially alter the Service or otherwise exhibit the Service in a manner resulting in a material change in an average viewer's perception of the Service or any Service content, nor may Network Affiliate use or make the Service available for any purpose, at any location, or in any manner not specifically authorized by this Agreement, including without limitation recording, copying or duplicating the Service or any portion thereof. Network Affiliate shall at all times use the NCM Equipment and the Service in accordance with such policies and procedures of NCM as NCM may reasonably impose from time to time. Each party shall be solely responsible for obtaining and providing all rights, licenses, clearances and consents necessary for the use of any content it provides, or that is prepared or provided on its behalf, as contemplated herein, except as may otherwise be agreed by the parties in writing; provided, however, that, notwithstanding anything herein that might be construed to the contrary, NCM shall not be obligated to provide any right, license, clearance or consent necessary to permit the public exhibition of music in the Theatres (except with respect to background music provided by NCM or its affiliates). ARTICLE IV MAINTENANCE AND SUPPORT; MAKE GOODS Section 4.1 Maintenance Obligation. (a) At any time that NCM Equipment is installed in any Theatre, Network Affiliate shall use its reasonable efforts to ensure there is no loss or damage to such NCM Equipment as a result of the standard or foreseeable operations of the Theatres, and to prevent piracy or other theft of inventory exhibited through the use of the NCM Equipment or otherwise in its possession or control. Network Affiliate further agrees to keep all NCM Equipment, including without limitation video display terminals, clean, and to promptly notify NCM if any NCM Equipment is not functioning properly. For any NCM Equipment located in Theatres or otherwise in Network Affiliate's possession or control, Network Affiliate shall be responsible for any loss, theft or damage of or to NCM Equipment to the extent attributable to the negligence or wrongdoing of Network Affiliate. (b) Subject to the foregoing, NCM and/or its subcontractors shall keep and maintain Equipment installed in the Theatres in good condition and repair. Network Affiliate shall provide NCM and/or its subcontractor's access to the Equipment and such other support services as NCM and/or its subcontractors reasonably require to provide, or have provided, installation, maintenance and repair services as required hereunder. Network Affiliate further agrees to require Theatre operations personnel to perform, at NCM's direction, reasonable basic daily verification of on-screen performance (including written confirmation of on-screen image and audio clarity). More detailed quality audits may be performed by NCM personnel. NCM will provide Network Affiliate copies of all audit report reconciliations. + + + + 13 + +Source: DIGITAL CINEMA DESTINATIONS CORP., S-1, 12/20/2011 + + + + + + Section 4.2 Software Support. Provided that Network Affiliate is not in breach of this Agreement, NCM shall make available to Network Affiliate at no cost pursuant to the terms of the license in Section 5.1 below all Software updates and upgrades to the extent such updates and upgrades have been or are being made generally commercially available by NCM. Unless otherwise agreed to in writing by NCM, Network Affiliate shall not permit any third party to perform or provide any maintenance or support services with respect to the Digital Content Network or the Software. Section 4.3 Service Level Agreement. Network Affiliate agrees to take all actions during the Term that are within its control and reasonably necessary to permit delivery of the Service to the Theatres as contemplated by this Agreement. Section 4.4 Make Goods. In the event either Party fails to satisfy its obligation or other agreement to provide Inventory, the Inventory provided by either Party deviates from the standards imposed under this Agreement, or Inventory is not transmitted or exhibited as part of the Service due to the inadvertence, negligence or fault of either Party (as may result, for example, from the failure by either party to supply or maintain equipment or other technology necessary for transmission of the Service as required hereunder), then the Party not at fault may, as its sole and exclusive remedy therefor, require that the other Party, at its sole expense, deliver "make goods" sufficient to achieve the level of Inventory content impressions which would have occurred but for the inadvertence, negligence or fault of the other Party. The parties agree that this exclusive remedy is essential to the smooth operation of the Service and the consistent performance of the parties under this Agreement. The type and placement of make goods shall be as mutually agreed, it being the intent of the parties that the value of the make goods shall be substantially the same as that which the party not at fault would have ordinarily received under this Agreement. All make goods shall be provided in the Theatre in which the corresponding Inventory would have been exhibited. ARTICLE V INTELLECTUAL PROPERTY Section 5.1 Software License. Subject to the terms and conditions of this Agreement, NCM hereby grants to Network Affiliate, and Network Affiliate hereby accepts, a non-exclusive, non-transferable, non-sublicenseable, royalty-free limited license to the object code version of the Software on Equipment at Theatres solely for the limited purpose of performing this Agreement. The parties agree that, as part of the set-up services NCM will establish one or more connections between the Software and Network Affiliate's point-of-sale software and such other software of Network Affiliate as is required to deliver the Service. The parties agree that NCM will have "real-time" access through the connections to Network Affiliate's point-of-sale software to Network Affiliate's ratings, show-time, and attendance information, as shall be mutually determined by the parties (the "Point-of-Sale Information"). The Point-of-Sale Information shall be deemed the Confidential Information of Network Affiliate for all purposes of this Agreement. The parties will cooperate to ensure that NCM does not receive access through Network Affiliate's point-of- sale software to any information of Network Affiliate other than the Point-of-Sale Information. + + + + 14 + +Source: DIGITAL CINEMA DESTINATIONS CORP., S-1, 12/20/2011 + + + + + + Section 5.2 Software Restrictions. Network Affiliate acknowledges that the Software and any and all components thereof constitute valuable trade secrets of NCM or its affiliates or licensors. Accordingly, except as may be expressly permitted under this Agreement, Network Affiliate shall not, nor shall it permit, cause, or authorize any other person or entity to: (a) Use the Software for any purpose, at any location, or otherwise access the Software in any manner not specifically authorized by this Agreement; (b) Make or retain any copy of the Software, except as specifically authorized by this Agreement; (c) Re-engineer, reverse engineer, decompile, or disassemble the Software or create or recreate the source code for the Software; (d) Modify, adapt, translate, or create derivative works based upon the Software, or combine or merge any part of the Software with or into any other software or documentation; (e) Refer to or otherwise use the Software as part of any effort to develop a program having any functional attributes, visual expression, or other features similar to those of the Software or to compete with NCM or its affiliates; (f) Remove, erase, or tamper with any copyright or other proprietary notice printed or stamped on, affixed to, or encoded or recorded in the Software, or fail to preserve all copyright and other proprietary notices in any copy of the Software made by Network Affiliate to the extent copying is permitted by this Agreement; (g) Sell, market, license, sublicense, distribute, or otherwise grant to any person or entity any right to use the Software or Documentation; (h) Use the Software to conduct any type of service bureau or time-sharing operation or to provide remote processing, network processing, network telecommunications, or similar services to any person or entity, whether on a fee basis or otherwise; or (i) Attempt to do any of the foregoing. Section 5.3 License of the NCM Marks. (a) Subject to the terms and conditions of this Agreement and such other standards, trademark usage guidelines and specifications as are prescribed by NCM during the term of this Agreement (the "NCM Quality Standards"), NCM hereby grants to Network Affiliate, and Network Affiliate hereby accepts, a non-exclusive, non-transferable (except in connection with an assignment of this Agreement in accordance with Section 14.8 hereof), non-sublicenseable, limited license (i) to use the NCM Marks solely in connection with its receipt and exhibition of the Service, as approved by NCM in writing in advance, and (ii) to use the NCM Marks in marketing or advertising materials ("Marketing Materials") that have been approved by NCM pursuant to the terms hereof. Network Affiliate acknowledges that NCM is and shall remain the sole owner of the NCM Marks, including the goodwill of the business symbolized thereby. Network Affiliate recognizes the value of the goodwill associated with the NCM Marks and acknowledges and agrees that any goodwill arising out of the use of the NCM Marks or any of them by Network Affiliate shall inure to the sole benefit of NCM for all purposes hereof. + + + + 15 + +Source: DIGITAL CINEMA DESTINATIONS CORP., S-1, 12/20/2011 + + + + + + (b) Prior to using any Marketing Materials or depicting or presenting any NCM Mark in or on any Marketing Materials or otherwise, Network Affiliate shall submit a sample of such Marketing Materials or other material to NCM for approval. NCM shall exercise commercially reasonable efforts to approve or reject any such Marketing Materials or other material submitted to it for review within thirty (30) days from the date of receipt by NCM. Network Affiliate shall not use, publish, or distribute any Marketing Materials or other material unless and until NCM has approved it in writing. Upon receipt of such approval from NCM for a particular Marketing Materials or other material, Network Affiliate shall not be obligated to submit to NCM substantially similar material for approval; provided, however, Network Affiliate shall timely furnish samples of all such material to NCM. For the avoidance of doubt, nothing in this Subsection 5.3(b) shall limit or affect Network Affiliate's obligations set forth in any other subsection of this Section 5.3 or any other provision of this Agreement. (c) Any and all use or exercise of rights by Network Affiliate with respect to the NCM Marks shall be subject to and in accordance with the NCM Quality Standards, and, without limiting such standards, subject to and in accordance with standards of quality and specifications that conform to or exceed the highest quality standards and specifications achieved by NCM and its licensees in their use and exercise of rights with respect to the NCM Marks. NCM shall have the right to change the NCM Quality Standards from time to time upon notice to Network Affiliate. (d) Network Affiliate shall cause the appropriate designation "(TM)" or "(SM)" or the registration symbol "(R)" to be placed adjacent to the NCM Marks in connection with the use thereof and to indicate such additional or alternative information as NCM shall specify from time to time concerning the use by Network Affiliate of the NCM Marks. (e) Network Affiliate shall not use any NCM Mark in any manner that may reflect adversely on the image or quality symbolized by the NCM Mark, or that may be detrimental to or tarnish the image or reputation of NCM. Notwithstanding anything herein to the contrary, NCM shall have the right, at its sole option, to terminate or suspend the trademark license grant provided herein if NCM, in its sole discretion, determines that Network Affiliate's use of the NCM Marks or any of them is in violation of the terms of this Agreement or of the NCM Quality Standards, or is otherwise disparaging to NCM's image or reputation, and such use is not conformed to the terms of this Agreement of the NCM Quality Standards within ten (10) days of receipt of written notice thereof. NCM's obligation to provide any Services dependant upon the use of the NCM Marks will be suspended during the period of any such suspension or termination, and NCM will have no liability for any failure to perform such Services during such time period. (f) Network Affiliate agrees not to use or adopt (i) any trademark or service mark which is confusingly similar to, or a colorable imitation of, any NCM Mark or any part thereof, (ii) any trademark or service mark in combination with any NCM Mark, or (iii) any NCM Mark in connection with or for the benefit of any product or service of any other person or entity. Network Affiliate shall not engage in any conduct which may place NCM or any NCM Mark in a negative light or context, and shall not represent that it owns or has any interest in any NCM Mark other than as expressly granted herein, nor shall it contest or assist others in contesting the title or any rights of NCM (or any other owner) in and to any NCM Mark. + + + + 16 + +Source: DIGITAL CINEMA DESTINATIONS CORP., S-1, 12/20/2011 + + + + + + Section 5.4 License of the Network Affiliate Marks. (a) Subject to the terms and conditions of this Agreement, Network Affiliate hereby grants to NCM, and NCM hereby accepts, a non-exclusive, non-transferable (except in connection with an assignment of this Agreement in accordance with Section 14.8 hereof), non- sublicenseable, limited license (i) to use the Network Affiliate Marks solely in connection with its delivery of the Service, as approved by Network Affiliate in writing in advance, and (ii) to use the Network Affiliate Marks in Marketing Materials that have been approved by Network Affiliate pursuant to the terms hereof. NCM acknowledges that Network Affiliate is and shall remain the sole owner of the Network Affiliate Marks, including the goodwill of the business symbolized thereby. NCM recognizes the value of the goodwill associated with the Network Affiliate Marks and acknowledges and agrees that any goodwill arising out of the use of the Network Affiliate Marks by NCM shall inure to the sole benefit of Network Affiliate for all purposes hereof. (b) Prior to using any Marketing Material or depicting or presenting any Network Affiliate Mark in or on any marketing or advertising material or otherwise, NCM shall submit a sample of such Marketing Material or other material to Network Affiliate for approval. Network Affiliate shall exercise commercially reasonable efforts to approve or reject any such Marketing Material or other material submitted to it for review within thirty (30) days from the date of receipt by Network Affiliate. NCM shall not use, publish, or distribute any Marketing Material or other material unless and until Network Affiliate has approved it in writing. Upon receipt of such approval from Network Affiliate for a particular Marketing Material or other material, NCM shall not be obligated to submit to Network Affiliate substantially similar material for approval; provided, however, NCM shall timely furnish samples of all such material to Network Affiliate. For the avoidance of doubt, nothing in this Subsection 5.4(b) shall limit or affect NCM's obligations set forth in any other subsection of this Section 5.4 or any other provision of this Agreement. (c) Any and all use or exercise of rights by NCM with respect to the Network Affiliate Marks shall be in accordance with standards of quality and specifications that conform to or exceed the highest quality standards and specifications achieved by Network Affiliate and its licensees in their use and exercise of rights with respect to the Network Affiliate Marks, as well as, without limiting the foregoing, such other standards, trademark usage guidelines, and specifications as are prescribed by Network Affiliate (the "Network Affiliate Quality Standards"). Network Affiliate shall have the right to change the Network Affiliate Quality Standards from time to time upon notice to NCM. (d) NCM shall cause the appropriate designation "(TM)" or "(SM)" or the registration symbol "(R)" to be placed adjacent to the Network Affiliate Marks in connection with the use thereof and to indicate such additional or alternative information as Network Affiliate shall specify from time to time concerning the use by NCM of the Network Affiliate Marks. + + + + 17 + +Source: DIGITAL CINEMA DESTINATIONS CORP., S-1, 12/20/2011 + + + + + + (e) NCM shall not use any Network Affiliate Mark in any manner that may reflect adversely on the image or quality symbolized by the Network Affiliate Mark, or that may be detrimental to the image or reputation of Network Affiliate. Notwithstanding anything herein to the contrary, Network Affiliate shall have the right, at its sole option, to terminate or suspend the trademark license grant provided herein if it determines that NCM's use of the Network Affiliate Marks or any of them is in violation of its trademark usage guidelines or is otherwise disparaging to its image or reputation, and such use is not conformed to such guidelines and other reasonable requests of Network Affiliate within ten (10) days of receipt of written notice thereof. NCM's obligation to provide any Services dependant upon the use of the Network Affiliate Mark will be suspended during the period of any such suspension or termination, and NCM will have no liability for any failure to perform such Services during such time period. (f) NCM agrees not to use (i) any trademark or service mark which is confusingly similar to, or a colorable imitation of, any Network Affiliate Mark or any part thereof, (ii) any trademark or service mark in combination with any Network Affiliate Mark, or (iii) any Network Affiliate Mark in connection with or for the benefit of any product or service of any other person or entity. NCM shall not engage in any conduct which may place Network Affiliate or any Network Affiliate Mark in a negative light or context, and shall not represent that it owns or has any interest in any Network Affiliate Mark other than as expressly granted herein, nor shall it contest or assist others in contesting the title or any rights of Network Affiliate (or any other owner) in and to any Network Affiliate Mark. ARTICLE VI MANDATORY PARTICIPATION AND EXCLUSIVITY Section 6.1 Mandatory Participation and Exclusivity. During the Term, except as expressly provided in this Agreement, including Section 3.6 (Policy Trailer; Branded Slots); those provisions of Part A of Exhibit A that permit Network Affiliate to engage in certain Lobby Promotions; Section 3.11 (Grand Openings, Employee Uniforms), collectively, the "Exclusivity Exceptions", Network Affiliate shall subscribe for and NCM shall be the exclusive provider to the theatres of the services specifically set forth in the definition of the "Service." Except as permitted by the Exclusivity Exceptions, during the Term, Network Affiliate shall neither engage nor permit a third party (excluding third party designees of NCM as provided hereunder) to provide, or itself provide, to any of Network Affiliate's theatres any of the services specifically set forth in the definition of Service. Subject only to the Exclusivity Exceptions, NCM shall be Network Affiliate's exclusive representative with respect to the procurement of Inventory (including without limitation all on-screen advertising) for the Advertising Services. NCM shall be responsible, at its own expense, for the coordination and administration of Inventory placement, whether nationally, regionally or locally, including without limitation the acceptance of insertion orders, invoicing advertisers and other content providers, and the acceptance and collection of payments therefrom. Any Inventory which has not been sold as of the date for its scheduled exhibition shall be allocated to make goods, remnant advertising, and other revenue- generating advertising. Nothing in this Agreement shall limit or affect (i) NCM's ability to contract or enter into any relationship with any Person or entity for any product, service, or otherwise, whether or not similar to any products or services provided by NCM under this Agreement, or (ii) Network Affiliate's ability to contract or enter into any relationship with any Person or entity for any product, service, or otherwise, other than the services that will be provided exclusively by NCM as set forth in this Section 6.1 and meetings promoted and scheduled by Network Affiliate theatre personnel as previously referenced in this Section 6.1. All rights with respect to advertising and promotions not explicitly granted hereunder are reserved to Network Affiliate, including without limitation Network Affiliate's ability to offer and sell advertising to any third party on any website on the Internet, its telephone ticketing service or other alternative media sources used for ticketing. + + + + 18 + +Source: DIGITAL CINEMA DESTINATIONS CORP., S-1, 12/20/2011 + + + + + + ARTICLE VII FEES Section 7.1 Access Fee (a) Digital Screen Usage Fee. On or before sixty (60) days after the end of each month during the Term, NCM shall pay to Network Affiliate $30.00 per digitized screen (i.e., a screen connected to the Digital Content Network), provided Network Affiliate provides the required attendance and screen count information as such information time frames are established by NCM on a monthly basis. (b) Revenue Sharing. Each Party shall receive 50% of all Net Revenue derived from the sale of advertising Inventory that is exhibited in the Theatres (the "Advertising Revenue Share"). For purposes of this Agreement, "Net Revenue" shall mean gross revenues from the sale of advertising Inventory exhibited in the Theatres which is actually collected less refunds and any similar disbursements and any applicable taxes or governmental charges other than ordinary income tax. Net Revenue shall include any revenue received by Network Affiliate, directly or indirectly, through its use of or otherwise in connection with the Service and alternative or independent digital film distribution. Each party shall render an accounting to the other on a monthly basis substantiating the calculation of Net Revenue payable during such month pursuant to Section 8.3. Section 7.2 Minimum Fee. For each twelve-month period following the Effective Date during the Term, and as long as Network Affiliate's attendance base in the Theatres for the twelve (12) month period is equal to or greater than 400,000 patrons (the "Base Amount"), the amount paid by NCM pursuant to Section 7.1(b) shall be not less than $ .17 per Theatre patron during such period with such amount increasing by 5% on each anniversary of the Effective Date (the "Minimum Fee"). The Minimum Fee shall be prorated to account for (i) any periods during which Network Affiliate's annual attendance base in the Theatres is lower than the Base Amount, and (ii) reductions in revenue associated with Network Affiliate's rejection of content as permitted under Section 3.4. Any payments made in order to satisfy the "Minimum Fee" which can be characterized as an advance of amounts due from advertising clients which is "earned but not yet paid" shall be deducted from the following year's payments when such amounts have in fact been collected. Section 7.3 Payment. Except as otherwise specifically provided in this Agreement, all amounts due by one Party to the other under this Agreement, less any permitted deductions, shall be paid in full within sixty (60) days after the fiscal month in which such amounts were received by the paying Party, or the receipt by the paying Party of an invoice therefore, as applicable. + + + + 19 + +Source: DIGITAL CINEMA DESTINATIONS CORP., S-1, 12/20/2011 + + + + + + Section 7.4 Audit. Each Party shall keep and maintain accurate books and records of all matters relating to the performance of its obligations hereunder, including without limitation the sale of advertising, in accordance with generally accepted accounting principles. During the Term and for a period of three (3) years thereafter, each Party, at its sole expense, shall, upon reasonable advance notice from the other party, make such books and records available at its offices for inspection and audit by the other party, its employees and agents. Any audit with respect to amounts payable by either party to the other party under this Agreement shall be limited to an audit with respect to amounts to be paid in the current calendar year and immediately preceding calendar year only. Any period that has been audited pursuant to this Section shall not be subject to any further audit. In the event an audit of the books and records of a party reveals an underpayment to the other party, the audited party shall pay to the other party the amount of such underpayment. Any disputes between the Parties relating to the calculation of amounts owed shall be referred to a mutually satisfactory independent public accounting firm that has not been employed by either party for the two (2) year period immediately preceding the date of such referral. The determination of such firm shall be conclusive and binding on each party, and judgment upon any such determination can be entered in any court having jurisdiction over the matter. Each Party shall bear one-half of the fees of such firm. If the Parties cannot select such accounting firm, then the selection of such accounting firm shall be made by the American Arbitration Association located in Denver, Colorado. In addition to the foregoing audit rights of the parties, during the Term, NCM and its authorized agents shall have the right, upon reasonable advance notice, to inspect any Network Affiliate premises or facilities involved in the performance of this Agreement to confirm the performance and satisfaction of Network Affiliate's obligations hereunder. ARTICLE VIII TERM AND TERMINATION Section 8.1 Term. Unless earlier terminated as provided below, the term of this Agreement shall begin on the Effective Date and shall continue for a period of five (5) years from the Effective Date (the "Initial Term") after which this Agreement may be extended on mutual agreement of the parties (a "Renewal Term," and together with the Initial Term, the "Term"). If either party wishes to extend the Initial Term it shall provide notice to the other not later than 180 days, nor sooner than 270 days, before the end of the Initial Term. The parties shall then engage in discussions regarding renewal for a period of 30 days. If no agreement is reached during that 30-day period, then neither party shall have any obligation to extend this Agreement beyond the Initial Term. Section 8.2 Termination by Either Party. Either Party may terminate this Agreement, immediately, by giving written notice of termination to the other, and without prejudice to any other rights or remedies the terminating party may have, if: + + + + 20 + +Source: DIGITAL CINEMA DESTINATIONS CORP., S-1, 12/20/2011 + + + + + + (a) The other Party breaches any material provision of this Agreement, other than any provision of Section 14.8 or Articles V or XIII, and fails to cure such breach within thirty (30) days after receipt from the terminating party of written notice of the breach. (b) The other Party breaches any provision of Section or 14.8 or Articles V or XIII, and, to the extent such breach is susceptible to cure, fails to cure such breach within five (5) days after receipt from the terminating party of written notice of the breach. Notwithstanding anything else to the contrary herein, if the breach is not susceptible to cure, this Agreement will terminate immediately as of such breach, with or without any notice from the terminating party. (c) (i) A voluntary petition is commenced by the other Party under the United States Bankruptcy Code, as amended, 11 U.S.C. § 101 et seq., (ii) the other Party has an involuntary petition commenced against it under the Bankruptcy Code and such petition is not dismissed within sixty (60) days after filing, (iii) the other Party becomes insolvent, (iv) any substantial part of the other Party's property becomes subject to any levy, seizure, assignment, application, or sale for or by any creditor or governmental agency, or (v) the other Party liquidates or otherwise discontinues all or most of that portion of its business operations which are related to this Agreement. Section 8.3 Termination by NCM. NCM may terminate this Agreement upon thirty (30) days written notice to Network Affiliate in the event that distribution of the Service to all of the Theatres listed on Exhibit B is permanently discontinued. Section 8.4 Survival. Sections 2.3, 5.2, 5.3, 5.4, 8.4, 8.5, 11.1, 11.2, 11.3 and 11.6 and Articles VII, IX, X, XII, and XV shall survive any expiration or termination of this Agreement. Section 8.5 Effect of Termination. Upon termination or expiration of this Agreement, and upon reasonable prior notice to Network Affiliate, NCM shall be entitled to enter the Theatres upon reasonable prior written notice, and any other premises of Network Affiliate where any NCM Property may be located, and recover any and all NCM Property, unless Network Affiliate chooses to purchase such Property based on a straight line five year depreciated value. In addition, each Party shall promptly deliver to the other or, at the other Party's option, permit the other Party to enter its premises and recover any Equipment in the first Party's possession, custody or control which may be owned by the other Party pursuant to Section 2.3 hereof. Each Party shall fully cooperate in this effort. NCM shall be obligated to restore all premises from which it removes NCM Property or Equipment to its previous condition, reasonable wear and tear excepted. In addition, any and all licenses granted by either party to the other under this Agreement shall immediately terminate, and NCM shall be entitled to immediately discontinue the Service. Notwithstanding termination of this Agreement, each party shall pay to the other, within five (5) days after the effective date of such termination, any and all fees (including costs and expenses) owed hereunder as of such termination. Section 8.6 Suspension of Services. On the occurrence of any event which would permit NCM to terminate this Agreement, in addition to any and all other rights and remedies to which NCM may be entitled at law or in equity, NCM may, without terminating this Agreement, and in its sole discretion and without further notice to Network Affiliate, suspend performance of any or all of its obligations under this Agreement (including, without limitation, by activating internal controls in systems or software that are designed to deny Network Affiliate use of or access to NCM Property) until and unless NCM determines, in its sole discretion and upon whatever conditions NCM chooses to impose on Network Affiliate, to resume performance of some or all of the suspended obligations. + + + + 21 + +Source: DIGITAL CINEMA DESTINATIONS CORP., S-1, 12/20/2011 + + + + + + ARTICLE IX REPRESENTATIONS AND WARRANTIES Section 9.1 Representations and Warranties. Each party represents and warrants that: (a) It (i) is duly formed and organized, validly existing, and in good standing under the laws of the jurisdiction of its formation and incorporation and has the power and authority to carry on its business as carried on, and (ii) has the right to enter into this Agreement and to perform its obligations under this Agreement and has the power and authority to execute and deliver this Agreement. (b) Any registration, declaration, or filing with, or consent, approval, license, permit or other authorization or order by, any governmental or regulatory authority, domestic or foreign, that is required to be obtained by it in connection with the valid execution, delivery, acceptance and performance by it under this Agreement or the consummation by it of any transaction contemplated hereby has been completed, made, or obtained, as the case may be. (c) Each party is the exclusive owner of, or otherwise has or will have timely obtained all rights, licenses, clearances and consents necessary to make the grants of rights made or otherwise perform its obligations under this Agreement. (a) Neither party will at any time, except to the extent necessary to assert or defend its rights under this Agreement: (i) challenge or otherwise do anything inconsistent with the other party's right, title or interest in its property, (ii) do or cause to be done or omit to do anything, the doing, causing or omitting of which would contest or in any way impair or tend to impair the rights of the other party in its property, or (iii) assist or cause any person or entity to do any of the foregoing. Section 9.2 Disclaimers. (a) Equipment Disclaimer. EXCEPT AS EXPRESSLY AND EXPLICITLY SET FORTH IN THIS ARTICLE, INCLUDING, WITHOUT LIMITATION, ANY REPRESENTATIONS AND WARRANTIES SET FORTH IN SECTION 9.1(c), ANY AND ALL INFORMATION, PRODUCTS, AND SERVICES, INCLUDING, WITHOUT LIMITATION, THE NCM PROPERTY, IS PROVIDED "AS IS" AND "WITH ALL FAULTS" AND NCM MAKES NO REPRESENTATIONS OR WARRANTIES, AND DISCLAIMS ALL REPRESENTATIONS AND WARRANTIES, EXPRESS OR IMPLIED, WRITTEN OR ORAL, ARISING FROM COURSE OF DEALING, COURSE OF PERFORMANCE, USAGE OF TRADE, OR OTHERWISE INCLUDING, WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF TITLE, NON- INFRINGEMENT, MERCHANTABILITY, AND FITNESS FOR A PARTICULAR PURPOSE. NCM MAKES NO REPRESENTATION THAT THE SERVICE WILL BE UNINTERRUPTED OR ERROR-FREE. + + + + 22 + +Source: DIGITAL CINEMA DESTINATIONS CORP., S-1, 12/20/2011 + + + + + + (b) Services Disclaimer. NCM DISCLAIMS ALL REPRESENTATIONS AND WARRANTIES THAT THE SERVICE WILL BE UNINTERRUPTED OR ERROR-FREE AND DISCLAIMS ANY WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE WITH REGARD TO THE SERVICES. ARTICLE X INDEMNIFICATION Section 10.1 Network Affiliate Indemnification. Network Affiliate shall defend, indemnify, and hold harmless NCM and its officers, directors, shareholders, contractors, employees, representatives, agents, successors, and assigns (collectively, "Representatives") from and against any and all losses, obligations, risks, costs, liabilities, settlements, damages, judgments, awards, fines, penalties, and expenses (including, without limitation, reasonable attorneys' fees) (collectively, "Costs") suffered or incurred in connection with or as a result of, and from and against any and all third party claims, suits, actions, or proceedings actually or allegedly arising out of, based upon, or relating to, (i) any breach by Network Affiliate of Article IX, (ii) infringement by any information, content or other materials supplied by or on behalf of Network Affiliate hereunder (including the Brand) of any third party U.S. patent, trademark, or copyright right arising from NCM's use of such materials in accordance and compliance with this Agreement, provided such Costs have been finally awarded by a court of competent jurisdiction or approved by Network Affiliate as part of a settlement, (iii) any use of any NCM Property other than as authorized by this Agreement, or (iv) Network Affiliate's fraud, willful misconduct, or noncompliance with law. Section 10.2 NCM General Indemnification. NCM shall defend, indemnify, and hold harmless Network Affiliate and its Representatives from and against any and all Costs suffered or incurred in connection with or as a result of, and from and against any and all third party claims, suits, actions, or proceedings actually or allegedly arising out of, based upon, or relating to, (i) any breach by NCM of Article IX, or (ii) NCM's fraud, willful misconduct, or noncompliance with law. Section 10.3 NCM Infringement Indemnification. (a) Indemnifications Obligations. NCM shall defend, indemnify and hold harmless Network Affiliate and its Representatives from and against any and all Costs suffered or incurred arising from any and all third party claims, suits, actions, or proceedings to the extent actually or allegedly arising out of, based upon, or relating to any infringement by the NCM Property (but excluding any Equipment) of any third party U.S. trademark, copyright, or patent issued as of the Effective Date, arising from Network Affiliate's use of the NCM Property in accordance and compliance with this Agreement. + + + + 23 + +Source: DIGITAL CINEMA DESTINATIONS CORP., S-1, 12/20/2011 + + + + + + (b) Additional Remedies. In addition to, but not in limitation of, NCM's obligations under Section 10.3 (a) above, NCM may, at its sole option, in the event that any claim, suit, proceeding, or action is brought or threatened for which NCM may be obligated under Section 10.3 (a) to indemnify Network Affiliate: (i) replace or modify the NCM Property to render it non-infringing; (ii) secure for Network Affiliate the right to use the NCM Property; or (iii) terminate this Agreement under the provisions of Article X. In the event NCM chooses to terminate this Agreement under Article X hereof, NCM shall refund to Network Affiliate the portion (if any) of the total amount of license fees actually paid to NCM by Network Affiliate hereunder during the two-year period immediately preceding the date of the claim for indemnification, depreciated according to a five-year straight line depreciation. (c) Limitations of Obligations. NCM shall not have any liability to Network Affiliate under this Section 10.3 for any alleged infringement based in any part on: (i) any Service content or Confidential Information supplied by or on behalf of Network Affiliate; (ii) the combined use of the NCM Property with software or hardware products or other technology or materials not provided or owned by NCM; (iii) additions or modifications to the NCM Property not made by NCM; (iv) use or installation of the NCM Property in accordance with designs or specifications not provided by NCM; or (v) use of any legacy or superseded version of NCM Property if such infringement would have been avoided by use of a more recent version of the NCM Property made available to Network Affiliate. The obligations under this Section 10.3 state the entire liability of NCM and are Network Affiliate's sole and exclusive remedies, with respect to intellectual property infringement. Section 10.4 Defense of Action. A Party offering indemnification or defense under this Article X (each, an "Indemnitor") shall have the right to control the defense and settlement of any and all claims, suits, proceedings, and actions for which such Indemnitor is obligated to indemnify, hold harmless, and defend hereunder, but the Party or Representative of a Party receiving such indemnification or defense under this Article X (each, the "Indemnitee") shall have the right to participate in such claims, suits, proceedings, and actions at its own cost and expense. An Indemnitor shall have no liability under this Article unless the Indemnitee gives notice of such claim to the Indemnitor promptly after the Indemnitee learns of such claim so as to not prejudice the Indemnitor. Under no circumstance shall either party hereto settle or compromise or consent to the entry of any judgment with respect to any claim, suit, proceeding, or action that is the subject of indemnification hereunder without the prior written consent of the other party, which consent shall not be withheld or delayed unreasonably. Section 10.5 Limitations. (a) EXCEPT IN CONNECTION WITH A BREACH OF ARTICLE XIII OF THIS AGREEMENT AND WITH THE EXCEPTION OF THE INDEMNIFICATION OBLIGATIONS OF THE PARTIES UNDER ARTICLE X, IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY OR ANY OTHER PERSON OR ENTITY FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL, PUNITIVE, EXEMPLARY, OR EXTRA-CONTRACTUAL DAMAGES OF ANY KIND WHATSOEVER ARISING FROM OR CONNECTED WITH THIS AGREEMENT, INCLUDING, BUT NOT LIMITED TO, LOST PROFITS, LOST REVENUES, OR LOSS OF BUSINESS, REGARDLESS OF LEGAL THEORY, WHETHER OR NOT FORESEEABLE, EVEN IF EITHER PARTY HERETO HAS BEEN ADVISED OF THE POSSIBILITY OR PROBABILITY OF SUCH DAMAGES AND EVEN IF THE REMEDIES OTHERWISE PROVIDED BY THIS AGREEMENT FAIL OF THEIR ESSENTIAL PURPOSE. THE REMEDIES PROVIDED BY THIS AGREEMENT AND THE PROVISIONS OF THIS AGREEMENT ALLOCATE THE RISKS OF THIS AGREEMENT BETWEEN THE PARTIES, SOME OF WHICH MAY BE UNKNOWN OR UNDERMINABLE. THESE LIMITATIONS ARE A MATERIAL INDUCEMENT FOR THE PARTIES TO THIS AGREEMENT TO ENTER INTO THIS AGREEMENT, AND THE PARTIES TO THIS AGREEMENT HAVE RELIED UPON THESE PROVISIONS IN DETERMINING WHETHER OR NOT TO ENTER INTO THIS AGREEMENT. + + + + 24 + +Source: DIGITAL CINEMA DESTINATIONS CORP., S-1, 12/20/2011 + + + + + + (b) EXCEPT IN CONNECTION WITH A BREACH OF ARTICLE XIV HEREUNDER, AND WITH THE EXCEPTION OF THE INDEMNIFICATION OBLIGATIONS OF THE PARTIES UNDER ARTICLE X, THE AGGREGATE TOTAL LIABILITY OF EITHER PARTY TO THE OTHER PARTY AND TO ALL OTHER PERSONS AND ENTITIES UNDER THIS AGREEMENT SHALL UNDER NO CIRCUMSTANCES EXCEED THE AMOUNT OF THE NET REVENUE RECEIVED BY NCM PURSUANT TO SECTION 7.2 OF THIS AGREEMENT DURING THE FIVE (5) YEAR PERIOD PRECEDING SUCH LIABILITY, LESS IN ANY CASE THE AGGREGATE OF ANY AMOUNTS PAID BY NCM HEREUNDER ON ACCOUNT OF PREVIOUS EVENTS OF LIABILITY. ARTICLE XI ADDITIONAL RIGHTS AND OBLIGATIONS Section 11.1 Assistance. Each Party, upon the request of the other, shall perform any and all further acts and execute, acknowledge, and deliver any and all documents which the other party determines in its sole reasonable judgment may be necessary, appropriate, or desirable to carry out the intent and purposes of this Agreement, including without limitation to document, perfect, or enforce NCM's right, title, or interest in and to any NCM Property or Derived Works. Section 11.2 Infringement. Network Affiliate shall notify NCM promptly, in writing, of any alleged, actual or threatened infringement, violation, misappropriation, imitation, simulation, or misuse of or interference with ("Infringement") any NCM Property or Derived Work of which Network Affiliate knows or which Network Affiliate has reason to suspect. NCM has the sole and exclusive right to determine whether to take any action on or related to any such Infringements. NCM has the sole right to employ counsel of its choosing and to direct any litigation and settlement of Infringement actions. Any recoveries, damages and costs recovered through such proceedings, suits, or hearings shall belong exclusively to NCM. Section 11.3 Non-Competition and Non-Solicitation. (a) During the Term, except as otherwise provided in this Agreement, Network Affiliate and its affiliates agree not to engage or participate in any business, hold equity interests, directly or indirectly, in another entity, whether currently existing or hereafter created, or participate in any other joint venture that competes or would compete with any business that NCM is authorized to conduct in the Territory pursuant to this Agreement, whether or not NCM is actually conducting such business in a particular portion of the Territory. The foregoing restrictions shall not apply (i) in the event Network Affiliate or its affiliate acquires a competing business as an incidental part of an acquisition of any other business that is not prohibited by the foregoing, if Network Affiliate disposes of the portion of such business that is a competing business as soon as commercially reasonable, (ii) to any direct or indirect ownership or other equity investments by Network Affiliate or its affiliates in such other competing business that represents in the aggregate less than 10% of the voting power of all outstanding equity of such business, or (iii) in the event Network Affiliate enters into any agreement for the acquisition or installation of equipment or the provision of services on customary terms that does not violate the exclusivity of NCM hereunder with any entity that has other businesses and provides other services that may compete with NCM. + + + + 25 + +Source: DIGITAL CINEMA DESTINATIONS CORP., S-1, 12/20/2011 + + + + + + (b) During the Term and for a period of twelve (12) months thereafter Network Affiliate will not, without NCM's prior written consent, either alone or in concert with others directly or indirectly solicit, entice, induce, or encourage: (i) any employee, contractor or agent of NCM to terminate his or her employment, contractor or agency relationship with NCM, (ii) any client of NCM to discontinue using NCM's services or products, (iii) any client of NCM to refer prospective clients to one or more competitors of NCM or to discontinue referring prospective clients to NCM, (iv) any NCM employee, client, or prospective client to breach any agreement with NCM, or (v) any existing or proposed arrangement or other community or institutional affiliation to discontinue the affiliation or relationship with NCM. For purposes of this Section 11.3 the term NCM shall include NCM and its affiliates. Section 11.4 Theatre Passes. Network Affiliate shall provide to NCM during each month of the Term 25 complimentary Theatre passes that will not expire any earlier than 120 days from the date of issuance. The passes shall be provided to NCM at least 30 days prior to the month in which such passes first become valid. Section 11.5 Compliance with Law. Network Affiliate and NCM shall at all times operate and conduct its business, including, without limitation, exercising its rights under this Agreement, in compliance with all applicable international, national, state, and local laws, rules, and requirements. Section 11.6 Insurance. Network Affiliate shall maintain with financially sound and reputable insurance companies insurance on the Theatres and the Equipment in such amounts and against such perils as Network Affiliate deems adequate for its business. NCM shall maintain with financially sound and reputable insurance companies insurance for its business and Equipment in such amounts and against such perils as NCM deems adequate for its business, including the installation services set forth in Section 2.2 herein. Each Party will name the other Party (including its agents, officers, directors, employees and affiliates) as an additional insured on such policies of insurance. ARTICLE XII OWNERSHIP Section 12.1 NCM Property. As between NCM and Network Affiliate, NCM owns, solely and exclusively, any and all right, title, and interest in and to the Service (including all Service content supplied by or on behalf of NCM, but excluding any Service content supplied by or on behalf of Network Affiliate), the Marks, the Software, NCM's Confidential Information, the Digital Content Network, and any and all other data, information, equipment (excluding any rights to Equipment held by Network Affiliate pursuant to Article II), material, inventions, discoveries, processes, methods, technology, know-how, written works, software, works of visual art, audio works, and multimedia works provided, developed, created, reduced to practice, conceived, or made available by or on behalf of NCM to Network Affiliate or used by NCM to perform any of its obligations under or in connection with this Agreement, as well as any and all translations, improvements, adaptations, reproductions, look-and- feel attributes, and derivates thereof (collectively, the "NCM Property"), and, except as expressly and explicitly stated in this Agreement, reserves all such right, title, and interest. + + + + 26 + +Source: DIGITAL CINEMA DESTINATIONS CORP., S-1, 12/20/2011 + + + + + + Section 12.2 Derived Works. Any and all data, information, and material created, conceived, reduced to practice, or developed by or on behalf of either Party, whether alone, in connection with the other Party or any third party, including, without limitation, written works, processes, methods, inventions, discoveries, software, works of visual art, audio works, look-and-feel attributes, and multimedia works, based on, using, or derived from, in whole or in part, any NCM Property, whether or not done on NCM's facilities, with NCM's equipment, or by NCM personnel, and any and all right, title, and interest therein and thereto (including, but not limited to, the right to sue for past infringement) (collectively, "Derived Works"), shall be owned solely and exclusively by NCM, and Network Affiliate agrees to and hereby does assign, transfer, and convey to NCM (and will ensure than any third party acting with or on behalf of Network Affiliate assigns, transfers, and conveys to NCM any and all right, title, or interest in or to any Derived Work which it may at any time acquire by operation of law or otherwise. To the extent any Derived Works are included in the Service, NCM hereby grants to Network Affiliate during the Term a non-exclusive, non-transferable, non-sublicenseable license to such Derived Works solely for use in connection with the Service as expressly provided by this Agreement. The restrictions on use of the Software set forth in Section 5.2 shall apply with equal force to Network Affiliate's use of any Derived Works, and such restrictions are hereby incorporated in and made a part of this Section 12.2. Section 12.3 No Title. This Agreement is not an agreement of sale, and no title or ownership interest in or to any NCM Property is transferred to Network Affiliate as a result of or pursuant to this Agreement. Further, Network Affiliate acknowledges that its exercise of rights with respect to the NCM Property shall not create in Network Affiliate any right, title or interest in or to any NCM Property and that all exercise of rights with respect to the NCM Property and the goodwill symbolized thereby or connected therewith will inure solely to the benefit of NCM. ARTICLE XIII CONFIDENTIALITY Section 13.1 Confidential Treatment. Each party acknowledges that the other's Confidential Information contains valuable trade secret and proprietary information of that party. Each party agrees to permanently hold, and cause its personnel to hold, all Confidential Information of the other party in strict confidence, except that each party may: (i) disclose the Confidential Information of the other party that is required to be disclosed by governmental agencies, regulatory authorities, or pursuant to court order, but only to the extent such disclosure is required by law and only if such party provides prompt prior written notice to the other party of the disclosure, and (ii) subject to the terms and conditions of this Agreement, use the Confidential Information of the other party only to the extent necessary to perform its obligations under this Agreement. Except as specifically permitted by this Agreement, neither party shall duplicate or use, or permit the duplication or use of, any Confidential Information of the other party or disclose or permit the disclosure of such Confidential Information to any person or entity. Each party shall limit use, possession, and disclosure of, and shall limit access to, the Confidential Information of the other party only to those of its employees or representatives whose performance under this Agreement requires such use, possession, disclosure, or access and who have signed confidentiality and non-disclosure agreements protecting the confidentiality of the Confidential Information at least to the same extent as such information is protected under this Agreement. Any duplication, use, disclosure, or other act or omission by any person or entity that obtains access to or possession of Confidential Information through the receiving party that would be a breach of this Agreement if committed by the receiving party shall be a breach of this Agreement by the receiving party for which the receiving party shall be responsible. For the avoidance of doubt, neither party shall issue any press release or other public announcement concerning this Agreement, including without limitation its existence, without the prior written approval of the other party. It shall not be a violation of this XIII for a party to disclose to any person or entity the tax treatment and tax structure of the transactions contemplated under this Agreement and all materials of any kind (including without limitation opinions or other tax analyses) relating to such tax treatment or tax structure. + + + + 27 + +Source: DIGITAL CINEMA DESTINATIONS CORP., S-1, 12/20/2011 + + + + + + Section 13.2 Point-of-Sale Information. Due to the sensitive nature of the Point-of-Sale Information, NCM will establish a "Chinese Wall" around the Point-of-Sale Information to prevent the disclosure of the Point-of-Sale Information under any circumstances to any theatre operator that is a competitor of Network Affiliate, any employees or agents of any affiliate of NCM, including the board of directors thereof and employees thereof with operational responsibility, except to the extent such employees or agents have a need to know such information to permit NCM's performance under this Agreement. Notwithstanding the preceding sentence, but subject to the confidentiality restrictions of Section 13.1, NCM shall be permitted to disclose the Point-of-Sale Information in aggregate form. Section 13.3 Injunctive Relief. Due to the unique and proprietary nature of the NCM Property, the Derived Works and the Confidential Information, it is understood and agreed that each party's remedies at law for a breach of this Article XIII will be inadequate and that each party shall, in the event of any such breach or the threat of such breach, be entitled to equitable relief (including without limitation provisional and permanent injunctive relief and specific performance). In addition, Network Affiliate hereby expressly waives the right to a hearing prior to the issuance of any order by a court of competent jurisdiction granting possession of any NCM Property or Derived Work to NCM. The parties shall be entitled to the relief described in this Section 13.3 without the requirement of posting a bond. Nothing stated herein shall limit any other remedies provided under this Agreement or available to the parties at law. ARTICLE XIV MISCELLANEOUS Section 14.1 Notices. All notices, consents, and other communications between the parties under or regarding this Agreement shall be in writing and shall be sent to the recipient's address set forth in this section. Such communications shall be deemed to have been received on the date actually received. + + + + 28 + +Source: DIGITAL CINEMA DESTINATIONS CORP., S-1, 12/20/2011 + + + + + + + + + + Either party may change its address for notices by giving written notice of the new address to the other party in accordance with this section, but any element of such party's address that is not newly provided in such notice shall be deemed not to have changed. Section 14.2 Waiver; Remedies. The waiver or failure of either party to exercise any right provided hereunder shall not be deemed a waiver of such right in the future or a waiver of any other rights established under this Agreement. All remedies available to either party hereto for breach of this Agreement are cumulative and may be exercised concurrently or separately, and the exercise of any one remedy shall not be deemed an election of such remedy to the exclusion of other remedies. Section 14.3 Severability. Should any term or provision of this Agreement be held to any extent unenforceable, invalid, or prohibited under law, then such provision shall be deemed restated to reflect the original intention of the parties as nearly as possible in accordance with applicable law and the remainder of this Agreement. The application of any term or provision restated pursuant hereto to persons, property, or circumstances other than those as to which it is invalid, unenforceable, or prohibited, shall not be affected thereby, and each other term and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. Section 14.4 Integration; Headings. This Agreement and the exhibits hereto (each of which is made a part hereof and incorporated herein by this reference) constitute the complete and exclusive statement of the agreement between the parties with respect to the subject matter of this Agreement, and this Agreement supersedes any and all other prior or contemporaneous oral or written communications, proposals, representations, and agreements, express or implied. This Agreement may be amended only by mutual agreement expressed in writing and signed by both parties. Headings used in this Agreement are for reference only and shall not affect the interpretation of this Agreement. Section 14.5 Construction. The parties hereto have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement. Section 14.6 Non-Recourse. Notwithstanding anything contained in this Agreement to the contrary, it is expressly understood and agreed by the parties hereto that each and every representation, warranty, covenant, undertaking and agreement made in this Agreement was not made or intended to be made as a personal representation, undertaking, warranty, covenant, or agreement on the part of any individual or of any partner, stockholder, member or other equity holder of either party hereto, and any recourse, whether in common law, in equity, by statute or otherwise, against any such individual or entity is hereby forever waived and released. + + + + NCM: National CineMedia, LLC 9110 E. Nichols Ave., Suite 200 Centennial, CO 80112 Attention: Gene Hardy, Esq., EVP and General Counsel + + Network Affiliate: Digital Cinema Destinations Corp. 250 Broad Street Westfield, New Jersey 07090 Attention: Bud Mayo, Chairman/CEO + + 29 + +Source: DIGITAL CINEMA DESTINATIONS CORP., S-1, 12/20/2011 + + + + + + Section 14.7 Dispute Resolution. (a) Governing Law. This Agreement shall be binding on the Parties as of the date hereof and is to be construed in accordance with and governed by the internal laws of the State of Delaware without giving effect to any choice of law rule that would cause the application of the laws of any jurisdiction other than the internal laws of the State of Delaware to the rights and duties of the Parties. (b) Jurisdiction. Each Party hereto agrees that any legal action or other legal proceeding relating to this Agreement or the enforcement of any provision of this Agreement shall be brought or otherwise commenced exclusively in any state or federal court located in New York, New York. Subject to the preceding sentence, each Party hereto: (i) expressly and irrevocably consents and submits to the jurisdiction of each state and federal court located in New York, New York (and each appellate court located in the State of New York) in connection with any such legal proceeding, including to enforce any settlement, order or award; (ii) consents to service of process in any such proceeding in any manner permitted by the laws of the State of New York, and agrees that service of process by registered or certified mail, return receipt requested, at its address specified pursuant to Section 15.01 is reasonably calculated to give actual notice; (iii) agrees that each state and federal court located in New York, New York shall be deemed to be a convenient forum; (iv) waives and agrees not to assert (by way of motion, as a defense or otherwise), in any such legal proceeding commenced in any state or federal court located in New York, New York, any claim that such Party is not subject personally to the jurisdiction of such court, that such legal proceeding has been brought in an inconvenient forum, that the venue of such proceeding is improper or that this Agreement or the subject matter hereof or thereof may not be enforced in or by such court; and (v) agrees to the entry of an order to enforce any resolution, settlement, order or award made pursuant to this Section by the state and federal courts located in New York, New York and in connection therewith hereby waives, and agrees not to assert by way of motion, as a defense, or otherwise, any claim that such resolution, settlement, order or award is inconsistent with or violative of the laws or public policy of the laws of the State of New York or any other jurisdiction. (c) Costs and Expenses. In the event of any action or other proceeding relating to this Agreement or the enforcement of any provision of this Agreement, the prevailing party (as determined by the court) shall be entitled to payment by the non-prevailing party of all costs and expenses (including reasonable attorneys' fees) incurred by the prevailing party, including any costs and expenses incurred in connection with any challenge to the jurisdiction or the convenience or propriety of venue of proceedings before any state or federal court located in New York, New York. + + + + 30 + +Source: DIGITAL CINEMA DESTINATIONS CORP., S-1, 12/20/2011 + + + + + + Section 14.8 Assignment. Network Affiliate may not assign or transfer, by operation of law or otherwise, any of its rights under this Agreement or delegate any of its duties under this Agreement to any third party without NCM's prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed. For the purposes of this Agreement, any change of control, merger, consolidation, or acquisition of all or substantially all of the assets of Network Affiliate (collectively, a "Change of Control") shall be deemed an assignment. This Agreement shall not be assignable by either party unless the assignee expressly assumes in writing the obligations of the assignor hereunder. Any attempted assignment in violation of this section shall be void. Section 14.9 Force Majeure. Any delay in the performance of any duties or obligations of either party (except the payment of money owed) will not be considered a breach of this Agreement if such delay is caused by a labor dispute, shortage of materials, fire, earthquake, flood, or any other event beyond the control of such party, provided that such party uses reasonable efforts, under the circumstances, to notify the other party of the circumstances causing the delay and to resume performance as soon as possible. Section 14.10 Third Party Beneficiary. The parties hereto do not intend, nor shall any clause be interpreted, to create under this Agreement any obligations or benefits to, or rights in, any third party from either NCM or Network Affiliate. Neither party hereto is granted any right or authority to assume or create any obligation or responsibility, express or implied, on behalf of, or in the name of, the other party, or to bind the other party in any matter or thing whatever. No affiliate of NCM shall have any liability or obligation pursuant to this Agreement. NCM shall be solely responsible, and Network Affiliate agrees to look solely to NCM, for the satisfaction of NCM's obligations under this Agreement. Section 14.11 Export. Network Affiliate acknowledges that the Software and the Confidential Information of NCM are subject to the export controls of the United States. Network Affiliate acknowledges that it has no right to, and further agrees that it will not, export or otherwise transfer or permit the transfer of any Software or Confidential Information of NCM outside the United States. Network Affiliate will defend, indemnify, and hold harmless NCM from and against all fines, penalties, liabilities, damages, costs, and expenses incurred by NCM as a result of any failure to comply with the preceding sentence. Section 14.12 Independent Contractors. Network Affiliate's relationship to NCM is that of an independent contractor, and neither party is an agent or partner of the other. Network Affiliate will not have, and will not represent to any third party that it has, any authority to act on behalf of NCM. Section 14.13 Counterparts. This Agreement may be executed in any number of separate counterparts each of which when executed and delivered to the other party hereto shall be an original as against the party whose signature appears thereon, but all such counterparts shall together constitute one and the same instrument. + + + + 31 + +Source: DIGITAL CINEMA DESTINATIONS CORP., S-1, 12/20/2011 + + + + + + IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written. + + + + + + + + DIGITAL CINEMA DESTINATIONS CORP. By: /s/ A. Dale Mayo By: A. Dale Mayo Name: Title: + + NATIONAL CINEMEDIA, LLC By: /s/ Robert W. Brouillette Name: Robert W. Brouillette Title: Senior Vice President + + 32 + +Source: DIGITAL CINEMA DESTINATIONS CORP., S-1, 12/20/2011 + + + + + + EXHIBIT A Services + + + + All lobby promotions and other in-theatre promotional activities (excluding the Digital Content Service, the Traditional Content Program and other on-screen content), but specifically excluding the following promotional activities (which Network Affiliate shall retain the right to perform and have performed on its behalf): promotional activities arising under the Beverage Agreement with Pepsi dated January 1, 2011 . (1) poster case advertising and other lobby or in-theatre promotions for (w) film festivals or events organized by Network Affiliate (unless such poster cases have been sold by NCM), (x) fundraising programs conducted by Network Affiliate for any non-profit organizations, (y) full-length theatrical productions, and (z) Theatre Advertising; (2) logos for Network Affiliate, beverage and concession suppliers on digital menu boards at the concession stand or digital displays at the box office of manufacturers of such products; (3) advertising and/or signage pursuant to the IMAX agreement (if applicable); (4) any trademark, service mark, logo or other branding of Network Affiliate (or its theatre-operating Affiliates), film studio(s), distributors and production companies; and (5) advertising in the proposed "playbill type" Box Office magazine that may be distributed at the Theatres; provided, however, that Network Affiliate shall insure that the restrictions and standards, including, without limitations those such as are set forth in Article III of this Agreement, are imposed by Network Affiliate on or respect to any such advertising. + + The Digital Content Service (which includes the Pre-Feature Program, Policy Trailer and the Video Display Program), the Digital Carousel and the Traditional Content Program, and all other on-screen content which is exhibited in Theatre auditoriums prior to the feature film presentation, but specifically excluding Trailers. + + + +A. Advertising Services consist of the following: + + Lobby Promotions means as follows: + + Digital Content Service, Digital Carousel and Traditional Content Program + + A-1 + +Source: DIGITAL CINEMA DESTINATIONS CORP., S-1, 12/20/2011 + + + + + + EXHIBIT A-1 Network Affiliate Inventory For Lobby Promotions The Inventory of Lobby Promotions for each Theatre to which NCM has "pre-approved" access is as listed below. Per Flight (unless otherwise specified below), NCM may provide each Theatre with any combination of Lobby Promotions as described below. + + *Pre approved vehicle list theatres onl y **Background music optional + + + +Item Inventory per Flight Quantity Spec Box Office Handout 2 programs per Theatre Same 3"x5" 2-sided (1 handout per transaction) Exit Sampling 1 program per Theatre Same Poster Case 1 program per Theatre varies (below) 27"x40" Live Area 24"x38" (1-11 screens: 1 poster; 12 screens: 2 posters; 13-20 screens: 3 posters; 21+ screens: 4 posters) Tabling/Demo 1 program per Theatre 1 per client 4-6' table (No active "recruitment" of patrons) Vehicle/Motorcycle* 1 program per Theatre 1 per client Background Music** 1 program per Theatre N/A N/A Counter Cards 2 programs per Theatre 2-3 per client 13"x16.5"x4" Static Clings 1 program per Theatre 2-3 per client 4"x6" per quarter Lobby Display 2 programs per Theatre 1 per client 4'x6' Lobby Standee 2 programs per Theatre 1 per client 3'x5' Floor Mats 1 program per Theatre 1 per client 4"x6' per quarter + + A-1-1 + +Source: DIGITAL CINEMA DESTINATIONS CORP., S-1, 12/20/2011 + + + + + + EXHIBIT B Theatres Rialto Theater 250 East Broad Street Westfield, NJ 07090 Cranford Theater 25 North Avenue West Cranford, NJ 07016 Bloomfield 8 863 Park Avenue Bloomfield, CT 06002 + + + + B-1 + +Source: DIGITAL CINEMA DESTINATIONS CORP., S-1, 12/20/2011 + + + + + + EXHIBIT C Marks NCM Marks National CineMedia FirstLook NCM Network Affiliate Marks DIGITAL CINEMA DESTINATIONS CORP. Digiplex Destinations Cinema Reinvented + + + + C-1 + +Source: DIGITAL CINEMA DESTINATIONS CORP., S-1, 12/20/2011 + + + + + + EXHIBIT D Excluded Theatres and IMAX Screen None + + + +D-1 + +Source: DIGITAL CINEMA DESTINATIONS CORP., S-1, 12/20/2011 \ No newline at end of file diff --git a/full_contract_txt/DovaPharmaceuticalsInc_20181108_10-Q_EX-10.2_11414857_EX-10.2_Promotion Agreement.txt b/full_contract_txt/DovaPharmaceuticalsInc_20181108_10-Q_EX-10.2_11414857_EX-10.2_Promotion Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..eb5b6c005e45a9d4f95e512c024c04f2a42b4232 --- /dev/null +++ b/full_contract_txt/DovaPharmaceuticalsInc_20181108_10-Q_EX-10.2_11414857_EX-10.2_Promotion Agreement.txt @@ -0,0 +1,1335 @@ +Exhibit 10.2 + +______________________________________________________________________________ + +CO-PROMOTION AGREEMENT + +by and between + +DOVA PHARMACEUTICALS, INC. + +and + +VALEANT PHARMACEUTICALS NORTH AMERICA LLC + +September 26, 2018 + +______________________________________________________________________________ + +CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. + +Source: DOVA PHARMACEUTICALS INC., 10-Q, 11/8/2018 + + + + + +TABLE OF CONTENTS + +Page + +ARTICLE 1 DEFINITIONS 1 + +ARTICLE 2 RIGHTS AND OBLIGATIONS 8 + +2.1 Engagement; Grant of Rights. 8 + +2.2 Retention of Rights. 9 + +2.3 Non-Competition; Non-Solicitation. 9 + +2.4 Dova Trademarks and Copyrights. 10 + +ARTICLE 3 JOINT STEERING COMMITTEE 11 + +3.1 Formation of the JSC. 11 + +3.2 Meetings and Minutes. 11 + +3.3 Purpose of the JSC. 11 + +3.4 Decision Making. 13 + +3.5 Marketing Sub-Committee. 13 + +ARTICLE 4 VALEANT ACTIVITIES FOR THE PRODUCT 14 + +4.1 Valeant Activities. 14 + +4.2 Detailing. 15 + +4.3 Compliance with Applicable Law. 17 + +4.4 Field Force Personnel Training; Product Materials. 19 + +4.5 Provisions Related to Field Force Personnel. 21 + +4.6 Responsibility for Valeant Activity Costs and Expenses. 22 + +4.7 Data Sharing. 22 + +ARTICLE 5 REGULATORY, SAFETY AND SURVEILLANCE, COMMERCIAL MATTERS 23 + +5.1 Dova Responsibility. 23 + +5.2 Valeant Involvement. 23 + +5.3 Inspections. 23 + +5.4 Pharmacovigilance. 24 + +5.5 Unsolicited Requests for Medical Information. 24 + +5.6 Recalls and Market Withdrawals. 25 + +5.7 Certain Reporting Responsibilities. 25 + +5.8 Booking of Sales Revenues. 25 + +5.9 Returns. 25 + +Source: DOVA PHARMACEUTICALS INC., 10-Q, 11/8/2018 + + + + + +i + +CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. + +Source: DOVA PHARMACEUTICALS INC., 10-Q, 11/8/2018 + + + + + +TABLE OF CONTENTS (continued) + +5.10 Manufacturing; Distribution; Marketing. 25 + +ARTICLE 6 FINANCIAL PROVISIONS 26 + +6.1 Promotion Fee. 26 + +6.2 Milestone Payment. 27 + +6.3 Reports; Payments. 27 + +6.4 Taxes. 28 + +6.5 Determination of Specialty. 29 + +ARTICLE 7 AUDIT RIGHTS 30 + +7.1 Recordkeeping. 30 + +7.2 Valeant Rights. 30 + +7.3 Dova Rights. 31 + +ARTICLE 8 INTELLECTUAL PROPERTY 32 + +8.1 Ownership of Intellectual Property. 32 + +8.2 Title to Trademarks and Copyrights. 32 + +8.3 Protection of Trademarks and Copyrights. 32 + +8.4 Disclosure of Know-How. 33 + +ARTICLE 9 CONFIDENTIALITY 33 + +9.1 Confidential Information. 33 + +9.2 Public Announcements. 34 + +ARTICLE 10 REPRESENTATIONS AND WARRANTIES; ADDITIONAL COVENANTS 35 + +10.1 Representations and Warranties of Dova. 35 + +10.2 Representations and Warranties of Valeant. 37 + +10.3 Disclaimer of Warranty. 38 + +10.4 Additional Covenants. 39 + +ARTICLE 11 INDEMNIFICATION; LIMITATIONS ON LIABILITY 39 + +11.1 Indemnification by Dova. 39 + +11.2 Indemnification by Valeant. 39 + +11.3 Indemnification Procedures. 40 + +11.4 Limitation of Liability. 40 + +11.5 Insurance. 40 + +ARTICLE 12 TERM AND TERMINATION 41 + +12.1 Term. 41 + +12.2 Early Termination for Cause. 41 + +Source: DOVA PHARMACEUTICALS INC., 10-Q, 11/8/2018 + + + + + +12.3 Other Early Termination. 42 + +12.4 Effects of Termination. 42 + +12.5 Tail Period. 42 + +ii + +CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. + +Source: DOVA PHARMACEUTICALS INC., 10-Q, 11/8/2018 + + + + + +TABLE OF CONTENTS (continued) + +12.6 Survival. 43 + +ARTICLE 13 MISCELLANEOUS 43 + +13.1 Force Majeure. 43 + +13.2 Assignment. 43 + +13.3 Severability. 44 + +13.4 Notices. 44 + +13.5 Governing Law. 45 + +13.6 Dispute Resolution. 45 + +13.7 Waiver of Jury Trial. 45 + +13.8 Entire Agreement; Amendments. 46 + +13.9 Headings. 46 + +13.10 Independent Contractors. 46 + +13.11 Third Party Beneficiaries. 46 + +13.12 Waiver. 46 + +13.13 Cumulative Remedies. 46 + +13.14 Waiver of Rule of Construction. 46 + +13.15 Use of Names. 46 + +13.16 Further Actions and Documents. 47 + +13.17 Certain Conventions. 47 + +13.18 Counterparts. 47 + +iii + +CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. + +Source: DOVA PHARMACEUTICALS INC., 10-Q, 11/8/2018 + + + + + +CO-PROMOTION AGREEMENT + +This Co-Promotion Agreement (this "Agreement") is entered into and dated as of September 26, 2018 (the "Effective Date") by and between Dova Pharmaceuticals, Inc., a Delaware corporation ("Dova"), and Valeant Pharmaceuticals North America LLC, a Delaware limited liability company ("Valeant"). Dova and Valeant are each referred to individually as a "Party" and together as the "Parties". + +RECITALS + +WHEREAS, Dova has developed and has rights to market and sell the Product (as defined below) in the Territory; + +WHEREAS, the Parties believe that it would be mutually beneficial to collaborate on promotional activities for the Product and, accordingly, Dova desires that Valeant conduct certain promotional activities, and Valeant desires to conduct such activities, for the Product in the Territory; + +NOW, THEREFORE, in consideration of the following mutual promises and obligations, and for other good and valuable consideration the adequacy and sufficiency of which are hereby acknowledged, the Parties agree as follows: + +CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. + +Source: DOVA PHARMACEUTICALS INC., 10-Q, 11/8/2018 + + + + + +ARTICLE 1 DEFINITIONS + +1.1 "Act" shall mean the Federal Food, Drug and Cosmetic Act, 21 U.S.C. § 301 et seq., as it may be amended from time to time, and the regulations promulgated thereunder. + +1.2 "Adverse Event" shall mean any untoward medical occurrence in a patient or clinical investigation subject who is administered the Product, but which does not necessarily have a causal relationship with the treatment for which the Product is used. An "Adverse Event" can include any unfavorable and unintended sign (including an abnormal laboratory finding), symptom or disease temporally associated with the use of the Product, whether or not related to the Product. A pre-existing condition that worsened in severity after administration of the Product would be considered an "Adverse Event". + +1.3 "Affiliate" shall mean, with respect to any Person, any other Person that directly or indirectly controls, is controlled by or is under common control with such Person. A Person shall be deemed to control another Person if such Person possesses the power to direct or cause the direction of the management, business and policies of such Person, whether through the ownership of fifty percent (50%) or more (or such lesser percentage which is the maximum allowed to be owned by a foreign corporation in a particular jurisdiction) of the voting securities of such Person, by contract or otherwise. + +1.4 "Agreement" shall have the meaning set forth in the preamble to this Agreement. + +1.5 "Alliance Managers" shall have the meaning set forth in Section 4.1.4. + +1.6 "Alternate Product" shall mean a pharmaceutical product that is commercialized by Valeant or its Affiliates in the Territory and that is part of the Salix business segment of Valeant's parent company, Bausch Health Companies, Inc. (or, in the event that such business segments are restructured, that is part of the Salix business unit), and which product is complementary to the Product with regard to Target Professionals in the Specialty. + +1.7 "Applicable Laws" shall mean all applicable statutes, ordinances, regulations, codes, rules, or orders of any kind whatsoever of any Governmental Authority in the Territory pertaining to any of the activities and obligations contemplated by this Agreement, including, as applicable, the Act, the Generic Drug Enforcement Act of 1992 (21 U.S.C. § 335a et seq.), the Anti- Kickback Statute (42 U.S.C. § 1320a-7b et seq.), the Health Insurance Portability and Accountability Act of 1996, the Federal False Claims Act (31 U.S.C. §§ 3729-3733) (and applicable state false claims acts), the Physician Payments Sunshine Act, the Code, the Department of Health and Human Services Office of Inspector General Compliance Program Guidance for Pharmaceutical Manufacturers, released April 2003, the Antifraud and Abuse Amendment to the Social Security Act, the American Medical Association guidelines on gifts to physicians, generally accepted standards of good clinical practices adopted by current FDA regulations, as well as any state laws and regulations (i) impacting the promotion of pharmaceutical products, (ii) governing the provision of meals and other gifts to medical professionals, including pharmacists, or (iii) governing consumer + +2 + +CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. + +Source: DOVA PHARMACEUTICALS INC., 10-Q, 11/8/2018 + + + + + +protection and deceptive trade practices, including any state anti-kickback/fraud and abuse related laws, all as amended from time to time. + +1.8 "Business Day" means each day of the week, excluding Saturday, Sunday or a day on which banking institutions in New York, New York, USA are closed. + +1.9 "Calendar Quarter" shall mean each successive period of three (3) calendar months commencing on January 1, April 1, July 1 and October 1, except that the first Calendar Quarter of the Term shall commence on the Effective Date and end on the day immediately prior to the first to occur of January 1, April 1, July 1 or October 1 after the Effective Date, and the last Calendar Quarter shall end on the last day of the Term. + +1.10 "Calendar Year" shall mean each successive period of twelve (12) months commencing on January 1 and ending on December 31, except that the first Calendar Year of the Term shall commence on the Effective Date and end on December 31 of the year in which the Effective Date occurs, and the last Calendar Year of the Term shall commence on January 1 of the year in which the Term ends and end on the last day of the Term. + +1.11 "Claims" shall mean all charges, complaints, actions, suits, proceedings, hearings, investigations, claims, demands, judgments, orders, decrees, stipulations or injunctions, in each case of a Third Party (including any Governmental Authority). + +1.12 "Code" shall mean the Code on Interactions with Healthcare Professionals promulgated by the Pharmaceutical Research and Manufacturers of America (PhRMA)/BIO, as it may be amended. + +1.13 "Compensation Report" shall have the meaning set forth in Section 4.2.2(b). + +1.14 "Compliance Manager" shall have the meaning set forth in Section 4.3.9. + +1.15 "Compliance Report" shall have the meaning set forth in Section 4.2.2(c). + +1.16 "Confidential Information" shall mean all secret, confidential, non-public or proprietary Know-How, whether provided in written, oral, graphic, video, computer or other form, provided by or on behalf of one Party to the other Party pursuant to this Agreement, including information relating to the disclosing Party's existing or proposed research, development efforts, promotional efforts, regulatory matters, patent applications or business and any other materials that have not been made available by the disclosing Party to the general public. All such information related to this Agreement disclosed by or on behalf of a Party (or its Affiliate) to the other Party (or its Affiliate) pursuant to the Confidentiality Agreement shall be deemed to be such Party's Confidential Information disclosed hereunder. For purposes of clarity, (i) Dova's Confidential Information shall include all Product Materials unless and until made available by Dova to the general public (including through Valeant) and (ii) the terms of this Agreement shall be considered Confidential Information of both Parties. + +1.17 "Confidentiality Agreement" shall have the meaning set forth in Section 9.1.1. + +3 + +CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. + +Source: DOVA PHARMACEUTICALS INC., 10-Q, 11/8/2018 + + + + + +1.18 "Designated Product" shall mean a specific pharmaceutical product marketed by Valeant which is agreed to in writing by the Parties on or prior to the Effective Date. + +1.19 "Detail(s)" shall mean a Product presentation during a face-to-face sales call between a Target Professional and a Sales Representative, during which a presentation of the Product's attributes, benefits, prescribing information and safety information are orally presented, for use in the Field in the Territory. Neither e-details, nor presentations made at conventions, exhibit booths, a sample drop, educational programs or speaker meetings, or similar gatherings, shall constitute a Detail. + +1.20 "Detail Report" shall have the meaning set forth in Section 4.2.2. + +1.21 "Dispute" shall have the meaning set forth in Section 13.6.1. + +1.22 "Dollar" or "$" shall mean United States dollar. + +1.23 "Dova Trademarks and Copyrights" shall mean the logos, trade dress, slogans, domain names and housemarks of Dova or any of its Affiliates as may appear on any Product Materials or Product Labeling, in each case, as may be updated from time to time by Dova. + +1.24 "Dova's Third Party Data Source" shall mean [***] or such other data source as selected by Dova and with which Dova enters into an agreement, at its cost. + +1.25 "Effective Date" shall have the meaning set forth in the preamble to this Agreement. + +1.26 "FDA" shall mean the United States Food and Drug Administration or any successor agency performing comparable functions. + +1.27 "Field" shall mean the treatment of thrombocytopenia in adult patients with chronic liver disease who are scheduled to undergo a procedure and any and all additional indications for which the Product is approved in the Territory. + +1.28 "Field Force Personnel" shall mean collectively, the Sales Representatives, the members of the institutional account management team described in Section 4.1.5, if any, that are engaged in Detailing the Product and any other employees of Valeant engaged in the Valeant Activities. + +1.29 "GAAP" shall mean United States generally accepted accounting principles. + +1.30 "Governmental Authority" shall mean any court, agency, authority, department, regulatory body or other instrumentality of any government or country or of any national, federal, state, provincial, regional, county, city or other political subdivision of any such government or any supranational organization of which any such country is a member, which has competent and binding authority to decide, mandate, regulate, enforce, or otherwise control the activities of the Parties contemplated by this Agreement. + +4 + +CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. + +Source: DOVA PHARMACEUTICALS INC., 10-Q, 11/8/2018 + + + + + +1.31 "Gross to Net Fraction" shall mean, for each SKU of the Product, a fraction (i) the numerator of which is the net sales of the SKU of the Product in the Territory for an applicable period (based on the gross-to-net discounts for all sales of such SKU of the Product (i.e., sales attributable to the Specialty, as well as all other sales of such SKU of the Product), and (ii) the denominator of which is gross sales of such SKU of the Product in the Territory for an applicable period, in each case, as determined in accordance with Dova's revenue recognition policies, which is in accordance with GAAP (on a consistent basis), for quarterly financial reporting purposes, as reported in Dova's quarterly filings with the U.S. Securities Exchange Commission. + +1.32 "Indemnified Party" shall have the meaning set forth in Section 11.3. + +1.33 "Indemnifying Party" shall have the meaning set forth in Section 11.3. + +1.34 "Intellectual Property" shall have the meaning set forth in Section 8.1.2. + +1.35 "Intermediary" shall mean any wholesaler or distributor who sells Product to Retail Pharmacies and Non-Retail Institutions, but not patients, and with which Dova (or its Affiliates) has entered into an agreement or otherwise has arrangements. + +1.36 "Inventions" shall have the meaning set forth in Section 8.1.2. + +1.37 "JSC" shall have the meaning set forth in Section 3.1. + +1.38 "Know-How" shall mean information, whether or not in written form, including biological, chemical, pharmacological, toxicological, medical or clinical, analytical, quality, manufacturing, research, or sales and marketing information, including processes, methods, procedures, techniques, plans, programs and data. + +1.39 "Losses" shall mean any and all amounts paid or payable to Third Parties with respect to a Claim (including any and all losses, damages, obligations, liabilities, fines, fees, penalties, awards, judgments, interest), together with all documented out-of- pocket costs and expenses, including attorney's fees, reasonably incurred. + +1.40 "Net Sales" shall mean, for an applicable period, the aggregate amount, without duplication, equal to the Specialty Pharmacy Net Sales for each SKU, the Retail Net Sales for each SKU, if any, and the Non-Retail Net Sales for each SKU. + +1.41 "Non-Retail Institution" shall mean any institution (other than the Specialty Pharmacies, Retail Pharmacies and Intermediaries) to which Dova (or its Affiliates or its Intermediaries) sells and/or ships units of Product during the Term, which shall include group purchasing organizations (GPOs), hospitals, clinics, long term care facilities and any outlets that are a member of an Integrated Delivery Network (IDN), and with which Dova or its Affiliates do not have data agreements which enables Dova to track shipments of Product from such institution to patients based on the Target Professional prescribing such Product. + +1.42 "Non-Retail Net Sales" shall mean, for each SKU of the Product: + +5 + +CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. + +Source: DOVA PHARMACEUTICALS INC., 10-Q, 11/8/2018 + + + + + +(i) the number of units of such SKU of Products shipped by Dova (or its Affiliates or its Intermediaries) to the Non-Retail Institutions in the Territory during an applicable period (excluding any shipments in excess of one unit of either SKU shipped to such Non-Retail Institutions based on the initial orders from such Non-Retail Institutions): + +MULTIPLIED BY + +(ii) the applicable Specialty Fraction for such SKU of the Product for the applicable period, + +MULTIPLIED BY + +(iii) the applicable WAC for such SKU of the Product for the applicable period, + +MULTIPLIED BY + +(iv) the Gross to Net Fraction for such SKU of the Product for the applicable period. + +1.43 "Party" shall have the meaning set forth in the preamble to this Agreement. + +1.44 "Person" shall mean any individual, corporation, partnership, limited liability company, association, joint-stock company, trust, unincorporated organization or other entity, or government or political subdivision thereof. + +1.45 "Product" shall mean the product approved pursuant to New Drug Application (NDA) No. 210238, as such approval may be supplemented from time to time (including by way of supplemental new drug application (sNDA)), currently marketed as DOPTELET® (avatrombopag) in the Territory and shall include an authorized generic version of such Product. + +1.46 "Product Labeling" shall mean the labels and other written, printed or graphic matter upon (a) any container or wrapper utilized with the Product or (b) any written material accompanying the Product, including Product package inserts, in each case as approved by the FDA. + +1.47 "Product Materials" shall have the meaning set forth in Section 4.4.1(a). + +1.48 "Product Training Materials" shall have the meaning set forth in Section 4.4.1(a). + +1.49 "Quarterly Average Sales Force Size" shall have the meaning set forth in Section 4.2.2. + +1.50 "Quarterly Minimum Details" for an applicable Calendar Quarter shall mean [***]. + +1.51 "Regulatory Approval" shall mean any and all necessary approvals, licenses, registrations or authorizations from any Governmental Authority, in each case, necessary to commercialize the Product in the Territory. + +1.52 "Retail Pharmacy" shall mean an outlet which dispenses the Product directly to a patient in a retail setting or through mail order services. + +6 + +CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. + +Source: DOVA PHARMACEUTICALS INC., 10-Q, 11/8/2018 + + + + + +1.53 "Retail Net Sales" shall mean, for each SKU of the Product: + +(i) the number of units of such SKU of the Product shipped from Retail Pharmacies to patients based on prescriptions written by the Specialty in the Territory (as determined by data reported by data aggregator) or such other data source with which Dova enters into an agreement at its cost), + +MULTIPLIED BY + +(ii) the applicable WAC for such SKU of the Product for the applicable period, + +MULTIPLIED BY + +(iii) the Gross to Net Fraction for such SKU of the Product for the applicable period. + +1.54 "Sales Representative" shall mean an individual employed and compensated by Valeant as a full-time employee as part of its sales forces and who engages in Detailing of the Designated Product (or the Alternate Product, as the case may be) in the Territory, and who is also trained with respect to the Product in accordance with this Agreement (including the Product Labeling and the use of the Promotional Materials) to deliver Details for the Product in the Field in the Territory. + +1.55 "Senior Officer" shall mean, with respect to Dova, its President and Chief Executive Officer (or such officer's designee), and with respect to Valeant, its [***] (or such officer's designee). From time to time, each Party may change its Senior Officer by giving written notice to the other Party. + +1.56 "Specialty" shall mean (i) Target Professionals with a primary or secondary specialty designation of Gastroenterology, Colorectal Surgery or Proctology (excluding any such Target Professionals with a primary or secondary specialty designation of Hepatology (including Transplant Hepatology), in each case, as determined by data reported by Dova's Third Party Data Source, subject to any adjustments determined pursuant to the process set out in Section 6.5, and (ii) all healthcare professionals with Nurse or Physician Assistant specialty designations affiliated with the Target Professionals described in subsection (i), as adjusted. + +1.57 "Specialty Fraction" shall mean, for each SKU of the Product, a fraction (i) the numerator of which is the number of units of such SKU of the Product shipped from the Specialty Pharmacies or the Retail Pharmacies to patients based on prescriptions written by the Specialty in the Territory (as determined by data reported pursuant to agreements between Dova (or its Affiliates) and the Specialty Pharmacies or the data aggregators, applicable), and (ii) the denominator of which is the number of units of such SKU of the Product shipped from the Specialty Pharmacies or the Retail Pharmacies to all patients in the Territory (namely based on prescriptions written by the Specialty and outside the Specialty) (as determined by data reported pursuant to agreements between Dova (or its Affiliates) and the Specialty Pharmacies or the data aggregators, as applicable). + +1.58 "Specialty Pharmacy Net Sales" shall mean, for each SKU of the Product: + +7 + +CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. + +Source: DOVA PHARMACEUTICALS INC., 10-Q, 11/8/2018 + + + + + +(i) the number of units of such SKU of the Product shipped from the Specialty Pharmacies to all patients based on prescriptions written by the Specialty in the Territory during an applicable period (as determined by data reported pursuant to agreements between Dova (or its Affiliates) and the Specialty Pharmacies or the data aggregators, as applicable); and + +MULTIPLIED BY + +(ii) the applicable WAC for such SKU of the Product for the applicable period, + +MULTIPLIED BY + +(iii) the Gross to Net Fraction for such SKU of the Product for the applicable period. + +1.59 "Specialty Pharmacy" shall mean those specialty pharmacies to which Dova (or its Affiliates) sells and/or ships units of Product during the Term and for which Dova or its Affiliates have agreements with that include data provisions or provide for separate data agreements which enables Dova to track shipments of Product from such Specialty Pharmacy to patients based on the Target Professional prescribing such Product. + +1.60 "Tail Period" shall mean the period commencing on the day after the last day of the Term and ending on the earlier of (i) [***] and (ii) [***], unless terminated early pursuant to Section 2.3.1(a) of the Agreement. + +1.61 "Target Professionals" shall mean physicians, nurse practitioners, physician assistants and any other medical professionals in the Territory with prescribing authority (as authorized under Applicable Law) in the Territory for the Product. + +1.62 "Term" shall have the meaning set forth in Section 12.1. + +1.63 "Territory" shall mean the United States of America and its territories and possessions. + +1.64 "Third Party(ies)" shall mean any person or entity other than Dova and Valeant and their respective Affiliates. + +1.65 "Third Party Agreements" shall mean the agreements described on Schedule 1.65 hereto. + +1.66 "Valeant Activities" shall mean any and all promotional activities (including Detailing) conducted by Valeant to encourage the appropriate use of the Product in the Specialty in the Field in the Territory in accordance with the terms of this Agreement. + +1.67 "Valeant Property" shall have the meaning set forth in Section 8.1.1. + +1.68 "WAC" shall mean, for each SKU of the Product, Dova's list price for a unit of the SKU of the Product to wholesalers or direct purchasers in the Territory, as reported in wholesale price guides or other nationally recognized publications of drug pricing data. + +ARTICLE 2 RIGHTS AND OBLIGATIONS + +2.1 Engagement; Grant of Rights. During the Term, subject to the terms and conditions of this Agreement, Dova hereby grants to Valeant the right, on a co-exclusive basis (solely with Dova and its Affiliates), to Detail and promote the Product in the Specialty in the Territory in the Field, and to conduct the Valeant Activities and the activities of the institutional account management team (pursuant to and subject to the terms of Section 4.1.5) for the Product in the Territory in the Field in accordance with the terms and conditions of this Agreement. Notwithstanding the foregoing, Dova retains and reserves the right for Dova and its Affiliates to promote the Product in the Territory including in the Specialty. Valeant shall have no other rights relating to the Product, except as specifically set forth in this Agreement and, without limiting the foregoing, except as set out in Section 4.1.5, if agreed upon, Valeant shall have no right to, and shall not, conduct the Valeant Activities for the Product outside the Specialty or outside the Territory or for use outside the Field. Except to Affiliates of Valeant, Valeant's rights and obligations under this Section 2.1 are non-transferable, non-assignable, and non-delegable. Except to Affiliates of Valeant, Valeant shall not subcontract the Valeant Activities with any Third Party (including any contract sales force). Any obligation of Valeant under or pursuant to this Agreement may be satisfied, met or fulfilled, in whole or in part, at Valeant's sole and exclusive option, either by Valeant or its Affiliates. Valeant guarantees the performance of all actions, agreements and obligations to be performed by its Affiliates under the terms and conditions of this Agreement. For clarity, Valeant shall not have any license rights hereunder nor any rights to sublicense any rights hereunder. + +Source: DOVA PHARMACEUTICALS INC., 10-Q, 11/8/2018 + + + + + +2.2 Retention of Rights. Except with respect to the exclusive rights granted to Valeant to conduct the Valeant Activities for the Product in the Specialty in the Territory in the Field pursuant to Section 2.1 and, and if agreed upon, outside the Specialty in the Territory in the Field pursuant to Section 4.1.5, Dova retains all rights in and to the Product. Without limiting the generality of the foregoing (and without limiting Dova's retained rights set forth in Section 2.1), Dova specifically retains the following rights (and Valeant and its Affiliates shall have no rights to the following, except as set forth below in this Section 2.2): + +2.2.1 responsibility for promoting the Product outside the Specialty; + +2.2.2 responsibility for the manufacture and distribution of the Product, and any future development of the Product; + +2.2.3 responsibility for all decisions regarding regulatory submissions and, except as expressly set forth herein, for interactions with any Governmental Authority, including but not limited to FDA, with respect to the Product; + +2.2.4 responsibility for final approval of all Product Materials content (including submission of Promotional Materials to FDA's Office of Prescription Drug Promotion) with respect to the conduct of the Valeant Activities for Product, except as expressly set forth herein; + +2.2.5 selling and booking all sales of the Product; and + +2.2.6 responsibility for handling all safety related activities related to Product as set forth in ARTICLE 5 (including submitting all safety reports and interacting with Governmental Authorities with respect thereto) and initiating and managing any Product recalls. + +For clarity, except as provided in Sections 2.1 or 2.4, Valeant shall not acquire any license or other intellectual property interest, by implication or otherwise, in any technology, Know-How or other intellectual property owned or controlled by Dova or any of its Affiliates, and Dova is not providing any such technology, Know-How or other intellectual property, or any assistance related thereto, to Valeant for any use other than for the mutual benefit of the Parties as expressly contemplated hereby. + +2.3 Non-Competition; Non-Solicitation. + +2.3.1 Non-Competition. (a) [***], neither Valeant nor its Affiliates shall, directly or indirectly, [***] in the Territory other than the Product; provided that if the Agreement is terminated by Dova pursuant to [***], then any Tail Period shall be immediately terminated if either Valeant or any of its Affiliates, directly or indirectly, [***] in the Territory other than the Product during such Tail Period. Notwithstanding the foregoing, this Section 2.3.1(a) shall not apply to any products marketed, promoted, detailed, offered for sale, or sold by any business (or any portion thereof), other Person, or group of Persons, [***]. + +(a) [***], neither Dova nor is Affiliates shall, directly or indirectly, [***]. Notwithstanding the foregoing, this Section 2.3.1(b) shall not apply to any products marketed, promoted, detailed, offered for sale, or sold by any business (or any portion thereof), other Person, or group of Persons[***]. + +2.3.2 Non-Solicitation. [***], neither Valeant nor Dova (nor any of their respective Affiliates) shall directly or indirectly solicit for hire or employee as an employee, consultant or otherwise any of the other Party's professional personnel who have had direct involvement with the JSC, with the Valeant Activities under this Agreement (which, in the case of Valeant, includes the Field Force Personnel) or with Dova's commercialization activities for the Product, without the other Party's prior written consent. Notwithstanding anything to the contrary, in no event shall the restrictions set forth in this Section 2.3.2 apply to [***]. + +2.4 Dova Trademarks and Copyrights. + +2.4.1 Valeant shall have the non-exclusive right to use the Dova Trademarks and Copyrights solely on Product Materials in order to perform the Valeant Activities and solely in accordance with the terms and conditions of this Agreement. Dova shall promptly notify Valeant of any updates or changes to the Dova Trademarks and Copyrights on the Product Materials, and Valeant shall thereafter solely use such updated Product Materials in performing its obligations under this Agreement. Valeant shall promptly notify Dova upon becoming aware of any violation of this Section 2.4.1. + +2.4.2 Valeant shall follow all instructions and guidelines of Dova (of which Dova has provided Valeant copies) in connection with the use of any Dova Trademarks and Copyrights, and, if Dova reasonably objects to the manner in which any such Dova Trademarks and Copyrights are being used, Valeant shall cease the use of any such Dova Trademarks and Copyrights in such manner upon written notice from Dova thereof. Without limiting the foregoing, Valeant shall also adhere to at least the same quality control provisions as companies in the pharmaceutical industry adhere to for their own trademarks and copyrights. In all cases, Valeant shall use the Dova Trademarks and Copyrights with the necessary trademark (and copyright, as applicable) designations, and shall use the Dova Trademarks and Copyrights in a manner that does not derogate from Dova's rights in the Dova Trademarks and Copyrights. Valeant shall not at any time during the Term knowingly do or allow to be done any act or thing which will in any way impair or diminish the rights of Dova in or to the Dova Trademarks and Copyrights. All goodwill and + +Source: DOVA PHARMACEUTICALS INC., 10-Q, 11/8/2018 + + + + + +improved reputation generated by Valeant's use of the Dova Trademarks and Copyrights shall inure to the benefit of Dova, and any use of the Dova Trademarks and Copyrights by Valeant shall cease at the end of the Term. Valeant shall have no rights under this Agreement in or to the Dova Trademarks and Copyrights except as specifically provided herein. During the Term, Valeant will not contest the ownership of the Dova Trademarks and Copyrights, their validity, or the validity of any registration therefor. During the Term, Valeant will not knowingly register and/or use any marks (including in connection with any domain names) that are confusingly similar to the Dova Trademarks and Copyrights. + +ARTICLE 3 JOINT STEERING COMMITTEE + +3.1 Formation of the JSC. As soon as practicable, but no later than twenty (20) days after the Effective Date, the Parties shall form a joint steering committee ("JSC") whose responsibilities during the Term shall be to oversee the activities set forth in Section 3.3. The JSC shall consist of three (3) representatives from each Party, each with suitable seniority and relevant experience and expertise to enable such person to address matters falling within the purview of the JSC. From time to time, each Party may change any of its representatives on the JSC by giving written notice to the other Party. The meetings of the JSC will be chaired by a representative from Dova or Valeant, on an alternating basis. The JSC shall determine a meeting schedule; provided, that, in any event, meetings shall be conducted no less frequently than quarterly by teleconference or in person, or as otherwise agreed by the Parties. In person meetings shall occur at such places as mutually agreed by the Parties. Employees or consultants of either Party that are not representatives of the Parties on the JSC may attend meetings of the JSC; provided, that such attendees (i) shall not participate in the decision-making process of the JSC, and (ii) are bound by obligations of confidentiality and non-disclosure equivalent to those set forth in ARTICLE 9. + +3.2 Meetings and Minutes. Meetings of the JSC may be called by either Party on no less than thirty (30) days' notice during the Term. Each Party shall make all proposals for agenda items and shall provide all appropriate information with respect to such proposed items at least ten (10) days in advance to the applicable meeting; provided that under exigent circumstances requiring input by the JSC, a Party may provide its agenda items to the other Party within a shorter period of time in advance of the meeting, or may propose that there not be a specific agenda for that particular meeting, so long as the other Party consents to such later addition of such agenda items or the absence of a specific agenda for such meeting, such consent not to be unreasonably withheld. The chairperson shall prepare and circulate for review and approval of the Parties minutes of each meeting within thirty (30) days after the meeting. Each Party shall bear its own costs for its members to attend such meetings. + +3.3 Purpose of the JSC. The purposes of the JSC shall be to, subject to Section 3.4: + +3.3.1 provide a forum to discuss and coordinate the Parties' activities under this Agreement; + +3.3.2 provide a forum to discuss and coordinate the promotion of the Product in the Territory, including in and outside the Specialty; + +3.3.3 provide a forum to discuss Product Materials (it being understood that the JSC shall not have the right to approve such Product Materials); + +3.3.4 facilitate the flow of information and otherwise promote the communications and collaboration within and among the Parties relating to this Agreement and the promotion of the Product; + +3.3.5 discuss planning and implementation of all Valeant Activities, including but not limited to training of Sales Representatives and, if agreed upon, the activities of the institutional account management team referred to in Section 4.1.5; + +3.3.6 decide on the acceptable form of and review and discuss the Detail Reports and reports of Net Sales; + +3.3.7 decide on the acceptable form of and review and discuss the Compensation Reports and the incentive compensation matters described in Section 4.1.3, including any applicable adjustments to the Product-related sales goals and targets of the Sales Representatives; + +3.3.8 review and discuss any matters brought to its attention by either Party's Alliance Manager; + +3.3.9 review, discuss and decide on the Alternate Product described in Section 4.2.1(c) or any additional product that may be Detailed by Valeant described in Section 4.2.1(d); + +3.3.10 discuss the Promotional Materials matters described in Section 4.4.1(b); + +3.3.11 discuss supply or distribution issues relating to the Product, such as any supply shortages; + +3.3.12 discuss the pricing of the Product (provided that Dova shall have sole authority to determine pricing of the Product); Source: DOVA PHARMACEUTICALS INC., 10-Q, 11/8/2018 + + + + + +3.3.13 act as a first level escalation to address disagreements or disputes between the Parties; + +3.3.14 form and oversee any sub-committee or working group in furtherance of the activities contemplated by this Agreement; + +3.3.15 decide on the acceptable form of and review and discuss the Compliance Reports; and + +3.3.16 perform such other responsibilities as may be mutually agreed upon by the Parties in writing from time to time; provided, however, for clarity the JSC shall have no authority to amend or modify any provisions of this Agreement and no authority to waive or definitively interpret the provisions of this Agreement. + +3.4 Decision Making. Meetings of the JSC will occur only if at least one representative of each Party is present at the meeting. Each Party shall have one (1) vote. The JSC will use good faith efforts to reach consensus on all matters properly brought before it. If the JSC does not reach unanimous consensus on an issue at a meeting or within a period of [***] thereafter, then the JSC shall submit in writing the respective positions of the Parties to the Senior Officers of the Parties. Such Senior Officers shall use good faith efforts to resolve promptly such matter, which good faith efforts shall include at least one (1) teleconference between such Senior Officers within [***] after the JSC's submission of such matter to them. Any final decision mutually agreed to in writing by the Senior Officers shall be conclusive and binding on the Parties. If the Senior Officers are not able to agree on the resolution of any such issue within [***] after such issue was first referred to them, then (i) Valeant shall have the right to conclusively determine all matters related to Valeant Activities and Detailing of the Product, including matters relating to the institutional account manager team, the incentive compensation of the Sales Representatives and targeting for Details, provided that such determination and any related activities comply with the terms and conditions of this Agreement, and (ii) Dova shall have the right to conclusively determine all other matters; provided, however, for clarity any such determination shall not amend, modify or waive any provisions of this Agreement or definitively interpret the provisions of this Agreement. + +3.5 Marketing Sub-Committee. + +3.5.1 Promptly after the Effective Date, the JSC shall facilitate the formation of a Marketing Sub-Committee comprised of an equal number of representatives from each Party. Such sub-committee shall meet from time to time and discuss, among other things: + +(a) the number of speaker programs for the Product to be conducted by Dova in each Calendar Year; + +(b) the Promotional Materials and quantities thereof; + +(c) the annual brand plan; and + +(d) the annual conference strategy. + +3.5.2 [***] shall constitute the "Speaker Program Threshold". If Dova wishes to conduct speaker programs in any Calendar Year after 2018 in excess of the Speaker Program Threshold, then the Parties shall meet, through the Marketing Sub-Committee, to discuss such excess speaker programs and the costs thereof. If the Marketing Sub-Committee unanimously agrees that such excess speaker programs should be conducted, then the following costs and expenses will be shared equally by the Parties: (i) the costs and expenses associated with conducting the excess number of speaker programs and (ii) the additional incremental costs and expenses associated with training necessary to address the number of the speaker programs above and below the Speaker Program Threshold. In addition, if the Parties unanimously agree that such excess speaker programs should be conducted, then, as a condition of the payment by Valeant of its share of such costs, Valeant shall have the right to review and approve (acting reasonably and in good faith) any such excess speaker programs, including with respect to the number of speakers approved to speak on the Product as part of the speaker programs, the rates paid to speakers at such speaker programs and the rules regarding attendees who may attend such speaker programs (including frequency of attendance). For greater certainty, if Valeant does not agree to conduct speaker programs above the Speaker Program Threshold, then the costs described herein for any speaker programs conducted by Dova in excess of the Speaker Program Threshold shall not be shared by the Parties, but shall be borne solely by Dova. In the event that Dova incurs costs and expenses for which Valeant is responsible under this Section 3.5.2, Dova may deduct such amounts from the payments due under Section 6.3 and shall include a description thereof in the applicable report under Section 6.3. + +ARTICLE 4 VALEANT ACTIVITIES FOR THE PRODUCT + +4.1 Valeant Activities. + +4.1.1 General. Valeant shall conduct the Valeant Activities for the Product in the Specialty in the Field in the + +Source: DOVA PHARMACEUTICALS INC., 10-Q, 11/8/2018 + + + + + +Territory in accordance with this Agreement. + +4.1.2 Number of Sales Representatives. Without limiting the generality of the foregoing, [***]) and continuing throughout the remainder of the Term, Valeant shall maintain at least one hundred (100) Sales Representatives with responsibility to Detail the Product in the Specialty in the Territory. Notwithstanding the above, the sole remedy of Dova for breach of this Section 4.1.2 shall be (i) the adjustment to the promotion fee as set forth in Section 6.1.2 and (ii) the termination right set out in Section 12.2.2. + +4.1.3 Target Incentive Compensation. In addition, [***] and continuing throughout the remainder of the Term, Valeant shall ensure the incentive compensation package for each Sales Representatives requires that at least fifty percent (50%) of the target incentive compensation is derived from achieving target sales of the Product. On at least a quarterly basis, the Parties will meet, through the JSC, to review the target incentive compensation and the actual incentive compensation paid out to the Sales Representatives to discuss, in good faith, any appropriate adjustments to the sales targets and goals related to the Product (but not to the above-mentioned fifty percent (50%) threshold of the target incentive compensation), with the intent of achieving, on average, an actual payout to the Sales Representatives of 50% of their incentive compensation relating to sales of the Product. + +4.1.4 Alliance Managers. Each Party shall appoint a person who shall oversee interactions between the Parties for all matters related to this Agreement, and any related agreements between the Parties (each an "Alliance Manager"). The Alliance Managers shall endeavor to ensure clear and responsive communication between the Parties and the effective exchange of information, and shall serve as a single point of contact for all matters arising under this Agreement. The Alliance Managers shall have the right to attend all JSC meetings and if applicable, subcommittee meetings as non-voting participants and may bring to the attention of the JSC or, if applicable, subcommittee any matters or issues either of them reasonably believes should be discussed, and shall have such other responsibilities as the Parties may mutually agree in writing. Each Party may designate different Alliance Mangers by notice in writing to the other Party. + +4.1.5 Institutional Account Management Team. Upon prior mutual agreement of the Parties in writing, Valeant may maintain a team of institutional account managers who, among other products, promote the Product in the Territory at liver transplant centers and large academic institutions only, and for purposes of this Section 4.1.5 only, both inside and outside the Specialty. Prior to any promotion of the Product by any institutional account managers, the Parties will discuss in good faith (acting reasonably) the number of institutional account managers that will promote the Product in the Territory, the appropriate portion of such institutional account managers' target incentive compensation to be derived from sales of the Product and the liver transplant centers or large academic institutions such institutional account managers will be responsible for. Such institutional account managers shall not be counted for purposes of determining the Quarterly Average Sales Force Size or the Quarterly Minimum Details. The Parties agree that these institutional account managers shall not be required to achieve any minimum number of Details. The Parties agree that such team may be added or removed by the mutual written agreement of the Parties without the need to amend this Agreement in accordance with Section 13.8. + +4.2 Detailing. + +4.2.1 Detail Requirements. + +(a) Commencing promptly upon completion of training of the Field Force Personnel that are engaged in Detailing the Product as described in Section 4.4.1 (but on the condition that Promotional Materials have been approved and delivered), Valeant shall deploy its Field Force Personnel that are engaged in Detailing to Detail the Product in accordance with the terms of this Agreement. Subject to compliance with the terms of this Agreement, Valeant shall be responsible, in its discretion, acting reasonably, for determining the manner in which it allocates and prioritizes the Details, provided that, in so allocating the Details, Valeant shall take into consideration geographic territory, frequency of calls, prescribing levels and other reasonable considerations. Except as set forth in this Agreement, without the prior written consent of Dova (not to be unreasonably withheld, delayed or conditioned), Valeant shall not conduct any Valeant Activities, other than Detailing, with respect to the Product. + +(b) [***] + +(c) Beginning after [***], Valeant may initiate discussions with Dova, upon at least [***] notice to Dova (which notice shall specify the proposed Alternate Product), regarding the potential replacement of the Designated Product with an Alternate Product. Following such notice period the Parties shall meet, through the JSC, and discuss in good faith (acting reasonably), for a period of up to [***], the potential replacement of the Designated Product with the Alternate Product. If the Parties agree on an Alternate Product, then the Parties shall make such agreement in writing and thereafter such Alternate Product shall be the Designated Product for purposes of this Agreement. If the Parties cannot agree on the Alternate Product during such period, then Valeant may give to Dova a written notice (the "Alternate Product Notice") designating the proposed Alternate Product as the Alternate Product and, effective [***] after the Alternate Product Notice, such designated Alternate Product shall be the Designated Product for purposes of this Agreement; provided however that, notwithstanding the foregoing, Dova shall have the right to terminate this Agreement upon [***] written notice to Valeant after the Alternate Product Notice, provided further that if the Alternate Product is being proposed by Valeant as a result of an anticipated or the existence of a generic version of the + +Source: DOVA PHARMACEUTICALS INC., 10-Q, 11/8/2018 + + + + + +Designated Product, a decision, judgment, ruling or other requirement of a Government Authority, including the FDA relating to or impacting the Designated Product in the Territory, a material safety concern regarding the Designated Product or a mandatory recall or withdrawal of the Designated Product, then Dova shall have no right to terminate this Agreement pursuant to this Section 4.2.1(c). + +(d) [***] + +(e) Notwithstanding the terms of this Section 4.2.1, Valeant shall have the right, from time to time, during the Term, to include in the incentive compensation package of all or some of the Sales Representatives a spiff, spiv or other similar incentive bonus that is based on [***], provided that the actual, maximum payout from such incentive bonuses does not exceed, in the aggregate, an amount equal to [***] for each Sales Representative for each Calendar Quarter. Any such spiff, spiv or other similar incentive bonus shall not be included in the calculation of the applicable Sales Representatives incentive compensation package in determining Valeant's compliance with the terms of Section 4.1.3. + +4.2.2 Records and Reports. + +(a) Valeant shall keep accurate and complete records, consistent with pharmaceutical industry standards, of each Detail and its obligations hereunder in connection therewith. Such records shall be kept for the longer of (i) [***] after the end of the Calendar Year to which they relate and (ii) such period of time as required by Applicable Laws. Within [***] following the end of each Calendar Quarter during the Term, Valeant shall provide Dova with a written report (each a "Detail Report"), setting out (i) the quarterly average number of Sales Representatives during such Calendar Quarter (calculated by taking the sum of the number of Sales Representatives employed by Valeant (or its affiliates) that have incentive compensation packages that comply with the terms of Section 4.1.3 on each Business Day of the Calendar Quarter divided by the number of Business Days in such Calendar Quarter) (the "Quarterly Average Sales Force Size"), and (ii) the aggregate actual number of Details for the Product made by its Sales Representatives during such Calendar Quarter, and the number of Details broken down by the name of the Target Professionals,. Through the JSC, the Parties shall agree on a mutually acceptable form of Detail Report. + +(b) Within [***] following the end of each Calendar Quarter during the Term, Valeant shall provide Dova with a written report (each a "Compensation Report"), which describes (i) the details of the incentive compensation package of each Sales Representative as it relates to the Product and the Designated Product (or Alternate Product, as the case may be) (but, in the case of the Designated Product or Alternate Product, such details shall be limited to information regarding what portion of the Sales Representatives' target incentive compensation package is derived from achieving sales targets or goals of the Designated Product (or Alternate Product) , but shall not include any sales targets or goals for the Designated Product (or Alternate Product)), and (ii) the actual incentive compensation payouts for each Sales Representatives as described in Section 4.1.3. Through the JSC, the Parties shall agree on a mutually acceptable form of Compensation Report. + +(c) Within [***] following the end of each Calendar Quarter during the Term, Valeant shall provide Dova with a written report (each a "Compliance Report"), which sets out a summary of Valeant's compliance monitoring and auditing of the Field Force Personnel that are engaged in Detailing (as such monitoring is further described in Section 4.5.1(b)), a summary of any compliance-related disciplinary actions relating to any Field Force Personnel that are engaged in Detailing and any associated remedial actions, a summary of all compliance investigations conducted by Valeant of any of the Field Force Personnel that are engaged in Detailing and any associated outcome, and, for the fourth Calendar Quarter only, a summary of the compliance-related training (including a reasonable description of each training topic) received by each Field Force Personnel that are engaged in Detailing during the Calendar Year. Through the JSC, the Parties shall agree on a mutually acceptable form of Compliance Report. + +4.3 Compliance with Applicable Law. + +4.3.1 In conducting the Valeant Activities hereunder, Valeant shall, and shall require all Field Force Personnel to, comply in all respects with Applicable Laws. In addition, Dova shall, and shall require all of its sales representatives to, comply in all respects with Applicable Laws in connection with its promotion of the Product in the Territory. + +4.3.2 Neither Valeant nor Field Force Personnel shall offer, pay, solicit or receive any remuneration to or from Target Professionals, in order to induce referrals of or purchase of the Product. + +4.3.3 In performing the activities contemplated by this Agreement, neither Valeant nor Field Force Personnel shall make any payment, either directly or indirectly, of money or other assets to government or political party officials, officials of international public organizations, candidates for public office, or representatives of other businesses or persons acting on behalf of any of the foregoing where such payment would constitute violation of any Applicable Law. In addition, Valeant shall not make any payment either directly or indirectly to officials if such payment is for the purpose of unlawfully influencing decisions or actions with respect to the subject matter of this Agreement. + +4.3.4 No employee of Valeant or its Affiliates shall have authority to give any direction, either written or oral, + +Source: DOVA PHARMACEUTICALS INC., 10-Q, 11/8/2018 + + + + + +relating to the making of any commitment by Dova or its agents to any Third Party in violation of terms of this or any other provision of this Agreement + +4.3.5 Neither Valeant nor Dova shall undertake any activity under or in connection with this Agreement which violates any Applicable Law. + +4.3.6 Valeant's or Dova's material failure to abide by the provisions of this Section 4.3 shall be deemed a material breach of this Agreement by Valeant or Dova (as the case may be) and subject to the terms of Section 12.2 hereof. + +4.3.7 Dova shall ensure that any patient assistance program used in connection with the Product (and the services performed thereby in connection with the Product) shall be operated in accordance with Applicable Law. Notwithstanding the immediately preceding sentence, Dova shall have no liability with respect to any breach or non-compliance with Applicable Law relating to any patient assistance program used in connection with the Product to the extent caused by the act or omission of any Field Force Personnel, which act or omission is not in compliance with the terms of this Agreement, Applicable Law or instructions of Dova. + +4.3.8 Dova shall ensure that government-insured patients do not receive co-pay support from Dova with respect to the Product. + +4.3.9 Dova shall ensure that its donations to, and interactions with, any 501(c)(3) charitable foundation that provides co-pay assistance to government-insured patients with respect to the Product are in full compliance with all Applicable Laws. + +4.3.10 If, during the Term, Valeant becomes aware of a material violation or failure to comply with Applicable Law or the terms of this Agreement by a member of the Field Force Personnel that are engaged in Detailing, it shall promptly, but no later than two (2) Business Days after it becomes aware, notify Dova of such violation and, as promptly as possible thereafter, shall notify the steps it has taken or intends to take to remediate such violation. + +4.3.11 Compliance Managers. As soon as practicable, but no later than thirty (30) days after the Effective Date, each Party shall appoint a representative to act as its compliance manager under this Agreement, each of which is routinely responsible for advising such Party on compliance matters and has suitable seniority and other relevant experience and expertise (each, a "Compliance Manager"). From time to time, each Party may change its Compliance Manager by giving written notice to the other Party. The Compliance Managers shall serve as a key point of contact between the Parties for compliance-related matters. Each Compliance Manager shall facilitate the resolution of any compliance issue with the Compliance Manager of the other Party. The Compliance Managers will use good faith efforts to reach consensus on all compliance matters. If the Compliance Managers do not reach consensus on an issue promptly, then such issue shall be submitted to dispute resolution process described in Section 13.6. Upon the reasonable request of Dova from to time, Valeant shall deliver to Dova copies of Valeant's compliance program policies and compliance training materials which are applicable to the Field Force Personnel's promotion of the Product. Other than as expressly stated herein, Valeant shall not be required to modify its compliance policies or practices in connection with the compliance-related provisions herein. + +4.4 Field Force Personnel Training; Product Materials. + +4.4.1 Training, Training Materials and Promotional Materials. + +(a) Subject to the terms of this Section 4.4.1, Dova shall prepare and control the content of (i) all Product training materials for Field Force Personnel (the "Product Training Materials") and (ii) all Product marketing and educational materials (the "Promotional Materials") (the Product Training Materials and the Promotional Materials, collectively, the "Product Materials"). Dova shall be solely responsible for ensuring that the Product Materials prepared and approved by it are in compliance with the Regulatory Approval for the Product, the Product Labeling and Applicable Law. Once approved by Dova, the content of the Product Materials shall be provided by Dova to Valeant in advance of the Valeant Activates to allow for Valeant to review such content and provide verbal feedback to Dova in advance of use of the Product Materials. Within [***] of receipt of such Product Materials, Valeant shall verbally provide to Dova any comments and/or proposed revisions to such Product Materials, which comments and revisions Dova shall reasonably consider so long as Dova deems such suggestions are acceptable in the promotion of the Product; provided that in any event, to the extent that Dova reasonably believes that such changes are not in compliance with Applicable Law, the Regulatory Approval for the Product or the applicable Product Labeling, then Dova shall not be required to incorporate any such suggestions from Valeant in the Product Materials. In the event of any disagreement between the Parties regarding any feedback received from Valeant with respect to the Product Materials, Dova shall have the right to conclusively determine such matter. If Valeant has provided comments to Dova on the Product Materials and Dova accepts some or all of such comments, then, once revised, Dova shall provide to Valeant the revised versions of such Product Materials for further review by Valeant, in accordance with the terms and timelines of this Section 4.4.1(a) above. Valeant shall use only Product Materials approved by Dova in the performance of Valeant Activities under this Agreement; provided, however, that Valeant shall not be required to use any Product Materials that have not been approved by Valeant or which have not incorporated comments + +Source: DOVA PHARMACEUTICALS INC., 10-Q, 11/8/2018 + + + + + +provided by Valeant and nothing herein shall require Valeant to use all Product Materials created or prepared by Dova and Valeant reserves the right not to use certain Product Materials. The content of Product Materials shall not be modified or changed by Valeant or Field Force Personnel at any time without the prior written approval of Dova in each instance. Dova shall be responsible for the costs and expenses of creation and development of the Product Materials and Valeant shall be responsible for the costs and expense of reproduction, printing and delivery of the Product Materials to and for Valeant. The Parties will coordinate the production and delivery of Product Materials to allow sufficient internal and field force review time to accommodate scheduled training meetings and distribution to Field Force Personnel that are engaged in Detailing. In the event that Dova incurs costs and expenses for which Valeant is responsible under this Section 4.4.1, Dova may deduct such amounts from the payments due under Section 6.3 and shall include a description thereof in the applicable report under Section 6.3. Promptly after the Effective Date, the Parties will collaborate to finalize the Product Materials in accordance with this Section 4.4.1(a), as soon as reasonably practical. + +(b) Commencing with the Promotional Materials to be used for Calendar Year 2019 and for the remainder of the Term, Valeant and Dova shall meet to discuss the content of such Promotional Materials in order to ensure that such Promotional Materials appropriately address any messaging that may be desired for the Target Professionals in the Specialty. Such discussions may take place in the forum of the JSC. Dova shall in good faith reasonably consider all comments and suggestions of Valeant regarding the Promotional Materials. + +(c) Promptly after the Effective Date, the Parties will collaborate to plan and schedule training for the Sales Representatives at a mutually acceptable time(s) and date(s), including a launch meeting for the Sales Representatives at a mutually acceptable location. Dova will lead such initial training and Valeant shall cooperate with any reasonable requests of Dova in order to support such training. The costs and expenses of such launch meeting will be shared equally by the Parties, other than travel and lodging for the Sales Representatives which shall be the responsibility of Valeant. All other training costs and expenses shall be the responsibility of Valeant. After the initial training, the Parties will collaborate to provide additional training at such frequency, times and places as the circumstances warrant and the Parties mutually agree. Valeant shall have the right, but not the obligation, to conduct such additional training itself, provided that the Valeant trainers have been trained by Dova, and provided further that Dova shall have the right to attend such training upon reasonable notice by Valeant to Dova. Valeant will certify in writing to Dova that all Field Force Personnel have completed the training described in this Section 4.4.1(b). + +(d) Valeant and all Field Force Personnel that are engaged in Valeant Activities shall comply with the applicable provisions of the Code, and shall be trained on Valeant's compliance policies, including those that are consistent with the applicable provisions of Sec. 1128B(b) of the Social Security Act and the American Medical Association Ethical Guidelines for Gifts to Physicians from Industry (which such training may have been accomplished prior to the Term), prior to commencing any Valeant Activities. Valeant agrees that it shall train any employee or agent of Valeant who is involved in performing the activities contemplated by this Agreement on anti-corruption and anti-bribery at its own expense. + +(e) Field Force Personnel that are engaged in Detailing shall conduct the Valeant Activities only after having undergone the training described in this Section 4.4 and, without limiting the foregoing, no Field Force Personnel member shall Detail the Product without having undergone such training. Subject to the foregoing, Valeant shall have the responsibility for on- going training of its Field Force Personnel that are engaged in Detailing in accordance with customary practice in the pharmaceutical industry. + +4.4.2 Ownership of Product Materials. As between the Parties, Dova shall own all right, title and interest in and to any Product Materials (and all content contained therein) and any Product Labeling (and all content contained therein), including applicable copyrights and trademarks (other than any name, trademark, trade name or logo of Valeant or its Affiliates that may appear on such Product materials or Product Labeling), and to the extent Valeant (or any of its Affiliates) obtains or otherwise has a claim to any of the foregoing, Valeant hereby assigns (and shall cause any applicable Affiliate to assign) all of its right, title and interest in and to such Product Materials (and content) and Product Labeling (and content) (other than any name, trademark, trade name or logo of Valeant or its Affiliates that may appear on such Product materials or Product Labeling) to Dova and Valeant agrees to (and shall cause its applicable Affiliate to) execute all documents and take all actions as are reasonably requested by Dova to vest title to such Product Materials (and content) and Product Labeling (and content) in Dova (or its designated Affiliate). + +4.5 Provisions Related to Field Force Personnel. + +4.5.1 Activities of Field Force Personnel. Valeant hereby agrees and acknowledges that the following shall apply with respect to itself and the Field Force Personnel that are engaged in Detailing: + +(a) Valeant shall instruct and cause the Field Force Personnel that are engaged in Detailing to use only the Product Labeling and, subject to the terms of Section 4.4, Product Materials approved by Dova for the conduct of the Valeant Activities for the Product and consistent with Applicable Laws. Valeant shall instruct the Field Force Personnel that are engaged in Detailing to, and will monitor the Field Force Personnel that are engaged in Detailing to ensure that such Field Force Personnel, limit their claims of efficacy and safety for the Product to those claims which are consistent with and do not exceed the Product Labeling and any Promotional Materials. + +Source: DOVA PHARMACEUTICALS INC., 10-Q, 11/8/2018 + + + + + +(b) Valeant shall instruct the Field Force Personnel that are engaged in Detailing to conduct the Valeant Activities for the Product, and will monitor and audit (in accordance with Valeant's standard practice) the Field Force Personnel that are engaged in Detailing so that such personnel conduct the Valeant Activities for the Product in adherence in all respects with Applicable Laws. + +(c) Valeant shall instruct the Field Force Personnel that are engaged in Detailing regarding provisions of this Agreement applicable to Details of the Product, including Section 4.2 and this Section 4.5.1. + +(d) Valeant acknowledges and agrees that Dova will not maintain or procure any worker's compensation, healthcare, or other insurance for or on behalf of the Field Force Personnel, all of which shall be Valeant's sole responsibility. + +(e) Valeant acknowledges and agrees that all Field Force Personnel are employees of Valeant and are not, and are not intended to be treated as, employees of Dova or any of its Affiliates, and that such individuals are not, and are not intended to be, eligible to participate in any benefits programs or in any "employee benefit plans" (as such term is defined in section 3(3) of ERISA) that are sponsored by Dova or any of its Affiliates or that are offered from time to time by Dova or its Affiliates to their own employees. All matters of compensation, benefits and other terms of employment for any such Field Force Personnel shall be solely a matter between Valeant and such individual. Dova shall not be responsible to Valeant, or to the Field Force Personnel, for any compensation, expense reimbursements or benefits (including vacation and holiday remuneration, healthcare coverage or insurance, life insurance, severance or termination of employment benefits, pension or profit-sharing benefits and disability benefits), payroll-related taxes or withholdings, or any governmental charges or benefits (including unemployment and disability insurance contributions or benefits and workmen's compensation contributions or benefits) that may be imposed upon or be related to the performance by Valeant or such individuals of this Agreement, all of which shall be the sole responsibility of Valeant, even if it is subsequently determined by any Governmental Authority that any such individual may be an employee or a common law employee of Dova or any of its Affiliates or is otherwise entitled to such payments and benefits. + +(f) Valeant shall be solely responsible for the acts or omissions of the Field Force Personnel that are not in compliance with Applicable Law and the terms of this Agreement while performing any of the activities under this Agreement. Valeant shall be solely responsible and liable for all probationary and termination actions taken by it, as well as for the formulation, content and dissemination (including content) of all employment policies and rules (including written probationary and termination policies) applicable to its employees. + +4.5.2 Termination of Employment; Cessation of Valeant Activities. If any Field Force Personnel leaves the employ of Valeant (or any of its Affiliates), or otherwise ceases to conduct the Valeant Activities for the Product, Valeant shall, to the extent consistent with, and in a manner similar to, its practices with respect to departures of the sales representatives or other field force personnel, as applicable, promoting, marketing or detailing other products for Valeant, account for, and shall cause such departing Field Force Personnel to return to Valeant and delete from his/her computer files (to the extent such materials or information have been provided in, or converted into, electronic form) all materials relating to the Product that have been provided to such individual, including the Product Materials and account level information, including all copies of the foregoing. + +4.5.3 Discipline. If Dova has a reasonable basis for believing any member of the Field Force Personnel that are engaged in Detailing has violated any Applicable Laws, or failed to comply with this Agreement, then Dova shall notify Valeant of the alleged violation and Valeant shall promptly investigate the matter and, if the allegation turns out to be true, shall take the appropriate remedial action. Subject to the foregoing, Valeant shall be solely responsible for taking any disciplinary actions in connection with its Field Force Personnel that are engaged in Detailing. If, at any time, Dova has any other compliance-related concerns regarding any Field Force Personnel Detailing, Dova's Compliance Manager shall notify Valeant's Compliance Manager of such concerns in writing and the Compliance Managers will discuss and resolve such matters pursuant to Section 4.3.9. + +4.6 Responsibility for Valeant Activity Costs and Expenses. Other than as expressly set out herein, Valeant shall be solely responsible for any and all costs and expenses incurred by Valeant or any of its Affiliates in connection with the conduct of the Valeant Activities for the Product hereunder, including all costs and expenses in connection with Sales Representatives, including salaries, travel expenses and other expenses, credentialing, licensing, providing benefits, deducting federal, state and local payroll taxes, and paying workers' compensation premiums, unemployment insurance contributions and any other payments required by Applicable Laws to be made on behalf of employees. + +4.7 Data Sharing. Dova shall provide to Valeant certain information relating to the sale, commercialization, marketing and promotion of the Product, as may be mutually agreed by the Parties from time to time, for use by Valeant and the Field Force Personnel in connection with the Valeant Activities. Such information may include data from the applicable reimbursement HUB, specialty data aggregator, market research, and market access contracting and Third Party-provided brand performance data ([***]). The timing of the delivery of such information shall be mutually agreed upon by the Parties, acting reasonably. + +ARTICLE 5 REGULATORY, SAFETY AND SURVEILLANCE, COMMERCIAL MATTERS + +Source: DOVA PHARMACEUTICALS INC., 10-Q, 11/8/2018 + + + + + +5.1 Dova Responsibility. As between the Parties, except as expressly set out herein, all regulatory matters regarding the Product shall be the responsibility of Dova, including responsibility for all communications with Governmental Authorities, including but not limited to FDA, related to the Product, and Dova shall have sole responsibility to seek and/or obtain any necessary approvals of any Product Labeling and the Promotional Materials used in connection with the Product, and for determining whether the same requires approval. As between the Parties, Dova shall be responsible for any reporting of matters regarding the manufacture, sale or promotion of the Product (including Adverse Events) to or with the FDA and other relevant regulatory authorities, in accordance with Applicable Laws. Dova shall maintain, at its cost, the Regulatory Approvals for the Product and shall comply with all Applicable Law relevant to the conduct of Dova's business with respect to the Product or pursuant to this Agreement, including, without limitation, all applicable requirements under the Act. + +5.2 Valeant Involvement. Except as expressly permitted herein, Valeant shall not, without Dova's prior written consent, correspond or communicate with the FDA or with any other Governmental Authority concerning the Product, or otherwise take any action concerning any Regulatory Approval or other authorization under which the Product is marketed or sold. If not prohibited by any Government Authority or Applicable Law, Valeant shall provide to Dova, promptly upon receipt, copies of any communication from the FDA or other Governmental Authority related to the Product. If not prohibited by any Government Authority or Applicable Law, Dova has the right to review and comment on Valeant's draft responses to any Governmental Authorities relevant to Detail of the Product prior to Valeant's issuance of such response; and Valeant agrees to consider any comments or suggestions from Dova in good faith. + +5.3 Inspections. + +5.3.1 If not prohibited by any Government Authority or Applicable Law, Valeant shall notify Dova immediately upon receipt of any notice of inspection or investigation by any Governmental Authority related to or that Valeant reasonably believes may impact any aspect of the Valeant Activities. If not prohibited by any Government Authority or Applicable Law, Dova shall have the right to have a representative present at any such portion of the inspection involving any Valeant Activities. In such cases, Valeant shall (i) keep Dova fully informed of the progress and status of any such inspection or investigation, (ii) prior to undertaking any action pursuant to this Section 5.3.1, notify Dova of the inspection or investigation, and disclose to Dova in writing the Governmental Authorities' assertions, findings and related results of such inspection or investigation pertaining to the Valeant Activities, and (iii) provide full disclosure to Dova with respect to any action undertaken or proposed to be undertaken pursuant to this Section 5.3.1 prior to acting as it pertains to the Valeant Activities. In addition, if such findings or the Governmental Authority requests or suggests that Valeant should change any aspect of the Valeant Activities, the Parties will work together to make any such modification; provided, however, that notwithstanding anything to the contrary herein, Valeant will not be required to engage in any Valeant Activities to the extent any finding or Government Authority has requested or suggested that Valeant may not engage in such activity. + +5.3.2 If not prohibited by any Government Authority or Applicable Law, Dova shall notify Valeant immediately upon receipt of any notice of inspection or investigation by any Governmental Authority related to or that Dova reasonably believes may impact the Valeant Activities. In such cases, Dova shall (i) keep Valeant fully informed of the progress and status of any such inspection or investigation, (ii) disclose to Valeant in writing the Governmental Authorities' assertions, findings and related results of such inspection or investigation pertaining to the Product or its promotion, and (iii) provide full disclosure to Valeant with respect to any action undertaken or proposed to be undertaken pursuant to this Section 5.3.2 prior to acting as it pertains to the Valeant Activities. In addition, if such findings or the Governmental Authority requests or suggests that Valeant should change any aspect of the Valeant Activities, the Parties will work together to make any such modification; provided, however, that notwithstanding anything to the contrary herein, Valeant will not be required to engage in any Valeant Activities to the extent any finding or Government Authority has requested or suggested that Valeant may not engage in such activity. + +5.4 Pharmacovigilance. Subject to the terms of this Agreement, as soon as practicable following the Effective Date (but in no event later than [***]), Dova and Valeant (under the guidance of their respective pharmacovigilance departments, or equivalent thereof) shall identify and finalize the responsibilities the Parties shall employ to protect patients and promote their well- being in a separate safety data exchange agreement ("Pharmacovigilance Agreement"). These responsibilities shall include mutually acceptable guidelines and procedures for the receipt, investigation, recordation, communication and exchange (as between the Parties) of safety information such as Adverse Events, lack of efficacy, misuse/abuse, and any other information concerning the safety of the Product. Such guidelines and procedures will be in accordance with, and enable the Parties and their Affiliates to fulfill, regulatory reporting obligations to Governmental Authorities. The Pharmacovigilance Agreement shall provide that: (i) Dova shall be responsible for all pharmacovigilance activities regarding the Product, including signal detection, medical surveillance, risk management, medical literature review and monitoring, Adverse Event reporting and responses to Governmental Authority requests or enquiries, and shall provide information related thereto to Valeant, and (ii) in the event Valeant receives safety information regarding the Product, or information regarding any safety-related regulatory request or inquiry, Valeant shall notify Dova as soon as practicable, but, in any event, within the timelines set forth in the Pharmacovigilance Agreement. + +5.5 Unsolicited Requests for Medical Information. Valeant shall direct to Dova any unsolicited requests for off-label medical information from health care professionals with respect to the Product promptly following receipt by Valeant (but in no + +Source: DOVA PHARMACEUTICALS INC., 10-Q, 11/8/2018 + + + + + +event later than [***] after receipt). Dova shall, within [***] following receipt of any such request from Valeant, address any such requests directly. + +5.6 Recalls and Market Withdrawals. As between the Parties, Dova shall have the sole right to determine whether to implement, and to implement, a recall, field alert, withdrawal or other corrective action related to the Product. Dova shall bear the cost and expense of any such recall, field alert, withdrawal or other corrective action. Each Party shall promptly (but in any case, not later than [***]) notify the other Party in writing of any order, request or directive of a court or other Governmental Authority to recall or withdraw the Product. + +5.7 Certain Reporting Responsibilities. Notwithstanding the foregoing provisions of this ARTICLE 5, each Party shall be responsible for its own federal, state and local government pricing reporting and payment transparency reporting in the Territory arising from its Product promotional activities and related expenditures pursuant to Applicable Law. It is the intention of the Parties that any payments or transfer of value by a Party as it relates to the Product shall constitute transfers of value by that Party and such Party shall be responsible for the reporting described in the immediately preceding sentence. However, if a Party is deemed to have provided any payments or transfers of value to a Third Party on behalf of the other Party as it relates to the Product, then such Party shall provide to the other Party, in a format reasonably acceptable to such other Party, the data and other information on a timely basis (i.e., in the case of manual reporting of such data and other information, within [***] following the end of each Calendar Quarter, and, in the case of automated reporting of such data and other information, on a periodic basis during each Calendar Quarter as reasonably requested by such other Party) for such other Party's reporting under the Physician Payments Sunshine Act and other Applicable Laws. + +5.8 Booking of Sales Revenues. Dova shall retain ownership of the rights to the Product and record on its books all revenues from sales of the Product. Dova shall be exclusively responsible for accepting and filling purchase orders, billing, and returns with respect to the Product. If Valeant receives an order for the Product, it shall promptly transmit such order to Dova (or its designee) for acceptance or rejection. Dova shall have sole responsibility for shipping, distribution and warehousing of Product, and for the invoicing and billing of purchasers of the Product and for the collection of receivables resulting from the sales of the Product in the Territory. + +5.9 Returns. Valeant is not authorized to accept any Product returns. Valeant shall advise any customer who attempts to return any Product to Valeant (or its Affiliates) that such Product must be shipped by the customer to the facility designated by Dova from time to time (and in accordance with other instructions provided by Dova). Dova shall provide to Valeant written instructions as to how Valeant should handle any Product that is actually physically returned to Valeant. Valeant shall take no other actions with respect to such return without the prior written consent of Dova. + +5.10 Manufacturing; Distribution; Marketing. Dova shall have the sole authority, at its cost, to manufacture, package, label, warehouse, sell and distribute the Product in the Territory. Dova shall use commercially reasonable efforts to cause sufficient quantities of the Product to be available in inventory to promptly fill orders throughout the Territory and otherwise meet the forecasted demand for the Product in the Territory. If, despite such efforts, there is insufficient supply of Product to meet demand, then Dova shall use commercially reasonable efforts to promptly address such insufficiency. Dova shall contractually require (and shall use commercially reasonable efforts to enforce such contractual provisions) that all Product is manufactured, shipped, sold and distributed in accordance with all Product specifications and all Applicable Law and that its contract manufacturers and/or suppliers of Product operate their facilities in accordance with Applicable Law. Dova shall ensure that all Product Labeling complies with the applicable Regulatory Approval for the Product and Applicable Law. Other than as set forth in this Agreement, Dova shall be responsible for all marketing of the Product in the Territory, provided that Dova shall continue to invest in marketing that is targeted towards the Specialty. + +ARTICLE 6 FINANCIAL PROVISIONS + +6.1 Promotion Fee. + +6.1.1 Calculation of Promotion Fee. Commencing with the Calendar Quarter commencing on October 1, 2018, as consideration for the Valeant Activities performed by Valeant, Dova shall pay Valeant a promotion fee based on annual Net Sales during the Term, calculated as follows: + +(a) For any portion of Net Sales up to and equal [***] in a Calendar Year, an amount equal to [***] of such portion of Net Sales; + +(b) For any portion of Net Sales in excess of [***] and up to and equal [***] in a Calendar Year, an amount equal to [***] of such portion of Net Sales; and + +(c) For any portion of Net Sales in excess of [***] in a Calendar Year, [***] of such portion of Net Sales. + +Source: DOVA PHARMACEUTICALS INC., 10-Q, 11/8/2018 + + + + + +6.1.2 Adjustment of Promotion Fee. The percentages set forth in Section 6.1.1 [***] shall each be referred to as an "Applicable Percentage". + +(a) If the aggregate actual number of Details for the Product made by the Sales Representatives for a Calendar Quarter is less than the Quarterly Minimum Details for such Calendar Quarter, then in calculating the promotion fee due under Section 6.1.1, the Applicable Percentage for such Calendar Quarter shall be reduced to a new percentage equal to [***]. + +(b) If the Quarterly Average Sales Force Size is less than [***] Sales Representatives for an applicable Calendar Quarter, then in calculating the promotion fee due under Section 6.1.1, the Applicable Percentage for such Calendar Quarter shall be reduced to a new percentage equal to [***]. + +(c) In the event that subsections (a) above and (b) above are both applicable in an applicable Calendar Quarter, then the Applicable Percentage shall be reduced to a new percentage equal to the lower of the percentages calculated under subsections (a) and (b). + +6.2 Milestone Payment. In addition to the promotion fee above and as additional consideration for the performance of such Valeant Activities, Dova shall pay to Valeant a milestone payment in the amount of Two Million Five Hundred Thousand Dollars ($2,500,000) when aggregate Net Sales in a Calendar Year first reach [***], payable within [***] after the end of the Calendar Quarter in which such Net Sales are reached. For clarity, such payment shall be made only once during the Term. + +6.3 Reports; Payments. + +6.3.1 Quarterly Reports and Payments. Within [***] after the end of each Calendar Quarter during the Term, Dova shall provide to Valeant a written report setting forth in reasonable detail the calculation of the Net Sales for such Calendar Quarter and the promotion fee payable in respect of such Net Sales in accordance with Section 6.1, including (i) the number of units of the Product shipped from Specialty Pharmacies to patients in the Territory during such Calendar Quarter, together with an itemized list of such units by Target Professional writing the applicable prescription, (ii) the number of units of the Product shipped from Specialty Pharmacies to patients in the Territory based on prescriptions written by the Specialty only during such Calendar Quarter, together with an itemized list of such units by Target Professional in the Specialty writing the applicable prescription (iii) the number of units per shipment of Products (and the number of such shipments) sold by Dova (or its Affiliates or Intermediaries) to the Non-Retail Institutions during such Calendar Quarter, including details respecting which shipments are based on initial orders from such Non-Retail Institutions and which Non-Retail Institutions ordered the Product, (iv) the number of units of the Product shipped from Retail Pharmacies to patients in the Territory during such Calendar Quarter, together with an itemized list of such units by Target Professional writing the applicable prescription, (v) the number of units shipped from Retail Pharmacies to patients based on prescriptions written by the Specialty in the Territory during such Calendar Quarter, together with an itemized list of such units by Target Professional in the Specialty writing the applicable prescription, (vi) the applicable Specialty Fraction for such Calendar Quarter, (vii) the WAC applicable to each dispensable unit, (ix) the Gross to Net Fraction for the applicable period, together with the details respecting the calculation thereof (including details regarding each of the categories of the deductions to gross sales for such Calendar Quarter). Within sixty (60) days after the end of each Calendar Quarter during the Term, Dova shall pay to Valeant the undisputed portion of the promotion fee payable in respect of such Net Sales in accordance with Section 6.1. If this Agreement terminates or expires during a Calendar Quarter, the promotion fee payable to Valeant under Section 6.1 will be calculated only on the Net Sales that occurred during such Calendar Quarter prior to the effective date of such termination or expiration. + +6.3.2 Monthly Reports. Within fifteen (15) days of the end of each month within each Calendar Quarter, Dova shall provide to Valeant a written report setting forth Dova's good faith estimate of the Net Sales and the estimated promotion fee payable in respect of such Net Sales for each of such calendar month and the Calendar Quarter-to-date period, together with its good faith estimates of each of the items described in Section 6.3.1 above (assuming there will be no adjustments made to the promotion fee pursuant to Section 6.1.2). The Parties acknowledge and agree that the monthly reports will only set forth Dova's good faith estimates of the items contained therein and are being provided to Valeant for information purposes only and shall not be determinative of the any amounts due hereunder. + +6.3.3 Disputes. Promptly upon receipt of the quarterly or monthly reports described in this Section 6.3, Valeant shall review such reports and, in the event that Valeant disputes any of the items described in such report, Valeant shall promptly notify Dova of any such disputes. The Parties shall meet promptly thereafter to attempt to resolve such disputes. + +6.3.4 Data for Net Sales. During the Term, in the event Dova (or its Affiliates) enters into agreements with any specialty pharmacies (other than Non-Retail Institutions) in order to sell and/or ship units of the Product directly to such specialty pharmacies, Dova shall use commercially reasonable efforts to include in the agreements provisions relating to the supply of data by such specialty pharmacies to Dova that can be used to support the calculation of Net Sales or shall use commercially reasonable efforts to enter into separate data agreements with such specialty pharmacies that provide for the supply of data by such specialty pharmacies to Dova that can be used to support the calculation of Net Sales. + +6.3.5 Manner of Payment. All payments under this Agreement shall be made in US Dollars by wire transfer or + +Source: DOVA PHARMACEUTICALS INC., 10-Q, 11/8/2018 + + + + + +ACH to a bank account designated in writing by Valeant or Dova, as applicable, which shall be designated at least five (5) Business Days before such payment is due. + +6.3.6 Late Payments. If Valeant does not receive payment of any sum due to it on or before the due date, simple interest shall thereafter accrue on the sum due to Valeant from the due date until the date of payment at the Prime Rate plus [***] or the maximum rate allowable by Applicable Law, whichever is less; provided, however, if it is discovered that any payment is past due as of the result of any audit conduct by Valeant pursuant to Section 7.2, such interest shall not accrue until [***] after the completion of such audit and not at the time the payment was originally due. Notwithstanding the foregoing, if the reason for any late payment is resulting from or arising out of any act or omission on the part of Valeant, including but not limited to any delay providing the requisite reports in Section 4.2.2, or the payment instructions pursuant to Section 6.3.4, such interest shall not accrue. + +6.4 Taxes. To the extent Dova is required to deduct and withhold taxes from any payment to Valeant, Dova shall pay the amounts of such taxes to the proper Governmental Authority in a timely manner and promptly transmit to Valeant an official tax receipt or other evidence of timely payment sufficient to enable Valeant to claim the payment of such taxes as a deduction or tax credit. Valeant may provide to Dova any tax forms that may be reasonably necessary in order for Dova to not withhold tax and Dova shall dispense with withholding, as applicable. Dova shall provide Valeant with reasonable assistance to enable the recovery, as permitted by Applicable Laws, of withholding taxes. + +6.5 Determination of Specialty. + +6.5.1 No later than [***] (or in the case of the first full Calendar Quarter following the Effective Date, promptly following the Effective Date), Dova shall provide Valeant with a list of Target Professionals in the Territory, together with their primary and secondary specialty designation, as generated by Dova's Third Party Data Source. Promptly following receipt by Valeant of such list, but no later than [***] after receipt of the list of Target Professionals, Valeant may present to Dova a list of Target Professionals that, acting in good faith, it reasonably believes have a primary specialty designation of or otherwise currently practice in the specialty of Gastroenterology, Colorectal Surgery or Proctology. For greater certainty, this list may include, but not be limited to, Target Professionals with a primary specialty designation of Gastroenterology, Colorectal Surgery or Proctology and a secondary specialty designation of Hepatology, for which Valeant wishes to confirm the primary specialty. + +6.5.2 Promptly following receipt by Dova of such list from Valeant, the Parties shall meet and discuss, acting reasonably and in good faith, such list and their appropriate primary specialty. If the parties agree that the Target Professional included on such list has (or should have) a primary specialty designation of or otherwise currently practices in the specialty of Gastroenterology, Colorectal Surgery or Proctology, then Dova will submit an inquiry to Dova's Third Party Data Source for each such Target Professional, requesting that Dova's Third Party Data Source conduct an investigation to determine the primary specialty designation of each such Target Professional. In addition, if the Parties do not agree, but Valeant, acting reasonably and in good faith, still believes that the Target Professional has (or should have) a primary specialty designation of or otherwise currently practices in the specialty of Gastroenterology, Colorectal Surgery or Proctology, then Dova will submit an inquiry to Dova's Third Party Data Source for each such Target Professional, requesting that Dova's Third Party Data Source conduct an investigation to determine the primary specialty designation of each such Target Professional. The Parties shall equally share in the incremental costs to Dova of any such investigations by Dova's Third Party Data Source. For greater certainty, if, under Dova's agreement with Dova's Third Party Data Source, Dova is entitled to a certain number of investigations at no additional cost, and such investigations requested by Valeant causes Dova to incur additional costs that it would not have, but for such investigations requested by Valeant, then Valeant shall still be required to share in any costs of investigations (pursuant to Dova's Third Party Data Source's standard rates) that would otherwise be a no-cost investigations. In the event that Dova incurs costs for which Valeant is responsible under this Section 6.5, Dova may deduct such amounts from the payments due under Section 6.3 and shall include a description thereof in the applicable report under Section 6.3. + +6.5.3 In the event that Dova's Third Party Data Source agrees to conduct such investigation, and then based on the results of such investigation, Dova's Third Party Data Source changes the primary designation of the Target Professional to Gastroenterology, Colorectal Surgery or Proctology or, in the case of those Target Professionals with a primary specialty designation of Gastroenterology, Colorectal Surgery or Proctology and a secondary specialty designation of Hepatology, confirms that the primary specialty designation should remain Gastroenterology, Colorectal Surgery or Proctology, then, commencing with the Calendar Quarter in which such investigations were conducted, such Target Professionals shall be deemed to be in the Specialty (regardless of whether their secondary specialty designation remains or becomes Hepatology). In the event that, following such investigation, Dova's Third Party Data source does not change the primary specialty designation to Gastroenterology, Colorectal Surgery or Proctology or, in the case of those Target Professionals with a primary specialty designation of Gastroenterology, Colorectal Surgery or Proctology and a secondary specialty designation of Hepatology, changes the primary specialty designation to a specialty other than Gastroenterology, Colorectal Surgery or Proctology, then those Target Professionals shall be deemed not to be in the Specialty. For those Target Professionals that were not the subject of an inquiry to or an investigation by Dova's Third Party Data Source, then the specialty designations set out in the original list generated by Dova's Third Party Data Source shall apply for such Calendar Quarter, namely those Target Professionals that have either a + +Source: DOVA PHARMACEUTICALS INC., 10-Q, 11/8/2018 + + + + + +primary or a secondary specialty designation of Gastroenterology, Colorectal Surgery or Proctology and that do not have either a primary or a secondary specialty designation of Hepatology shall be deemed to be in the Specialty. + +6.5.4 The process described in this Section 6.5 shall be repeated for each Calendar Quarter of the Term; provided, however, that, pursuant to the process described above, if Dova's Third Party Data Source has confirmed that a Target Professional's primary specialty designation should be or should remain Gastroenterology, Colorectal Surgery or Proctology, it is not necessary for Valeant to seek this confirmation in subsequent Calendar Quarters; provided, further, that, if Dova's Third Party Data Source is subsequently updated (by Dova or any Third Party) to change the specialty designation (primary or secondary) of a Target Professional, pursuant to a request by Dova or a Third Party, then the process described in this Section 6.5 shall be repeated with respect to such Target Professional. + +ARTICLE 7 AUDIT RIGHTS + +7.1 Recordkeeping. Each Party shall maintain complete and accurate books and records in sufficient detail, in accordance with GAAP (to the extent applicable and in accordance with the Agreement) and all Applicable Law, to enable verification of the performance of such Party's obligations under this Agreement and any payments due to a Party under this Agreement. Unless otherwise specified herein, the books and records for a given Calendar Year of the Term shall be maintained for a period of [***] after the end of such Calendar Year or longer if required by Applicable Law. + +7.2 Valeant Rights. Valeant shall have the right, at its own expense, during normal business hours and upon reasonable prior notice, through certified public accounting firm or other auditor selected by Valeant and reasonably acceptable to Dova and upon execution of a confidentiality agreement reasonably satisfactory to Dova in form and substance, to inspect and audit the applicable records and books maintained by Dova for purposes of verifying Dova's payment obligations within this Agreement, including the applicable records and books of account maintained by Dova, or any Affiliate, as applicable, with respect to Net Sales in order to confirm the accuracy and completeness of such records and books of account and all payments hereunder; provided, however, that (i) such examination shall not take place more often than once per every twelve (12) months during the Term and once during the one (1) year period following the end of the Term, and (ii) such examination shall not cover a period of time that has previously been audited; provided that Valeant shall have the right to conduct additional "for cause" audits to the extent necessary to address significant problems relating to Dova's payment obligations hereunder. Dova shall reasonably cooperate in any such inspection or audit conducted by Valeant. Any undisputed adjustments required as a result of overpayments or underpayments identified through the exercise of audit rights shall be made by payment to the Party owed such adjustment within [***] after identification of such adjustment. Valeant shall bear the out-of-pocket costs and expenses incurred by the Parties in connection with any such inspection or audit, unless the audit shows an undisputed under-reporting or underpayment for that audited period in excess of [***] of the amounts properly determined, in which case, Dova shall reimburse Valeant for its audit fees and reasonable out-of-pocket expenses in connection with said audit, which reimbursement shall be due and payable within [***] of receiving appropriate invoices and other support for such audit-related costs. + +7.3 Dova Rights. Dova shall have the right, at its own expense, during normal business hours and upon reasonable prior notice, through a certified public accounting firm or other auditor selected by Dova and reasonably acceptable to Valeant and upon execution of a confidentiality agreement reasonably satisfactory to Valeant in form and substance, to inspect and audit the applicable records and books maintained by Valeant relating to the Valeant Activities for purposes of verifying Valeant's compliance with the terms of this Agreement, provided that (i) such examination shall not take place more often than once per every twelve (12) months during the Term and once during the one (1) year period following the end of the Term, and (ii) such examination shall not cover a period of time that has previously been audited; provided that Dova shall have the right to conduct additional "for cause" audits to the extent necessary to address significant compliance problems relating to Valeant's obligations hereunder or in response to any inquiry, inspection, investigation or other requirements of a Government Authority in the Territory relating to the Valeant Activities. For purposes of clarity, any such inspection or audit described in this Section 7.3 shall be limited to only those books and records of Valeant that are applicable to Valeant's performance of its obligations under this Agreement. Where necessary, on reasonable request, Dova's audit rights shall include interviewing Sales Representatives and other employees of Valeant. Valeant shall reasonably cooperate in any such inspection or audit conducted by Dova. Any undisputed adjustments required as a result of overreporting the aggregate actual number of Details for the Product made by the Sales Representatives for a Calendar Quarter or the Quarterly Average Sales Force Size identified through the exercise of audit rights shall be made by payment by Valeant to Dova within [***] after identification of such adjustment. Dova shall bear the out-of-pocket costs and expenses incurred by the Parties in connection with any such inspection or audit, unless the audit shows an undisputed over- payment for that audited period in excess of [***] of the amounts properly determined, in which case, Valeant shall reimburse Dova for its audit fees and reasonable out-of-pocket expenses in connection with said audit, which reimbursement shall be due and payable within [***] of receiving appropriate invoices and other support for such audit-related costs. + +ARTICLE 8 INTELLECTUAL PROPERTY + +8.1 Ownership of Intellectual Property. + +Source: DOVA PHARMACEUTICALS INC., 10-Q, 11/8/2018 + + + + + +8.1.1 Valeant Property. Dova acknowledges that Valeant owns or is licensed to use certain Know-How relating to the proprietary sales and marketing information, methods and plans that has been independently developed or licensed by Valeant (such Know-How, the "Valeant Property"). The Parties agree that any improvement, enhancement or modification made, discovered, conceived, or reduced to practice by Valeant to any Valeant Property in performing its activities pursuant to this Agreement which is not primarily related to the Product, or which is not otherwise derived from the Confidential Information of Dova, shall be deemed Valeant Property. [***], Valeant hereby grants to Dova a fully paid-up, royalty free, non-transferable, non- exclusive license (with a limited right to sub-license to its Affiliates) to any Valeant Property that appears on, embodied on or contained in the Product materials or Product Labeling solely for use in connection with Dova's promotion or other commercialization of the Product in the Territory. + +8.1.2 Dova Property. Subject to the terms of Section 8.1.1, Dova shall have and retain sole and exclusive right, title and interest in and to all inventions, developments, discoveries, writings, trade secrets, Know-How, methods, practices, procedures, designs, improvements and other technology, whether or not patentable or copyrightable, and any patent applications, patents, or copyrights based thereon (collectively, "Intellectual Property") relating to the Product that are (i) owned or controlled by Dova as of the Effective Date, (ii) made, discovered, conceived, reduced to practice or generated by Dova (or its employees or representatives) during the Term, or (iii) made, discovered, conceived, reduced to practice or generated by Valeant (or its employees or representatives) in performing its activities pursuant to this Agreement to the extent primarily related to the Product or which is otherwise derived from the Confidential Information of Dova ("Inventions"). Valeant agrees to assign, and hereby does assign, to Dova (and shall cause its Affiliates and its and their respective employees and other representatives to assign to Dova) any and all right, title and interest that Valeant (or any such Affiliates, employees or other representatives) may have in or to any Invention. For clarity, any and all Inventions and any information contained therein or related thereto shall constitute Confidential Information of Dova. + +8.2 Title to Trademarks and Copyrights. The ownership, and all goodwill from the use, of any Dova Trademarks and Copyrights shall at all times vest in and inure to the benefit of Dova, and Valeant shall assign, and hereby does assign, any rights it may have in the foregoing to Dova. + +8.3 Protection of Trademarks and Copyrights. As between the Parties, Dova shall have the sole right (but not the obligation), as determined by Dova in its sole discretion, to (i) maintain the Dova Trademarks and Copyrights and/or (ii) protect, enforce and defend the Dova Trademarks and Copyrights. Valeant shall give notice to Dova of any infringement of, or challenge to, the validity or enforceability of the Dova Trademarks and Copyrights promptly after learning of such infringement or challenge. If Dova institutes an action against Third Party infringers or takes action to defend the Dova Trademarks and Copyrights, Valeant shall reasonably cooperate with Dova, at Dova's cost and expense. Any recovery obtained by Dova as a result of such proceeding or other actions, whether obtained by settlement or otherwise, shall be retained by Dova. Valeant shall not have any right to institute any action to defend or enforce the Dova Trademarks and Copyrights. + +8.4 Disclosure of Know-How. For clarity, the Parties hereby agree and acknowledge that to the extent that either Party hereto has disclosed, or in the future discloses, to the other Party any Know-How or other intellectual property of such Party or its Affiliates pursuant to this Agreement, the other Party shall not acquire any ownership rights in such Know-How or other intellectual property by virtue of this Agreement or otherwise, and as between the Parties, all ownership rights therein shall remain with the disclosing Party (or its Affiliate). + +ARTICLE 9 CONFIDENTIALITY + +9.1 Confidential Information. + +9.1.1 Confidentiality and Non-Use. Each Party agrees that, during the Term and for a period of [***] thereafter, it shall keep confidential and shall not publish or otherwise disclose and shall not use for any purpose other than as provided for in this Agreement (which includes the exercise of its rights or performance of any obligations hereunder) any Confidential Information furnished to it by or on behalf of the other Party pursuant to this Agreement, except to the extent expressly authorized by this Agreement or otherwise agreed in writing by the Parties. Without limiting the foregoing, each Party will use at least the same standard of care as it uses to protect its own Confidential Information to ensure that its employees, agents, consultants and contractors do not disclose or make any unauthorized use of such Confidential Information. Each Party will promptly notify the other upon discovery of any unauthorized use or disclosure of the other's Confidential Information. Any and all information and materials disclosed by a Party pursuant to the Confidentiality Agreement between the Parties dated [***] (the "Confidentiality Agreement") shall be deemed Confidential Information disclosed pursuant to this Agreement. The foregoing confidentiality and non-use obligations shall not apply to any portion of the other Party's Confidential Information that the receiving Party can demonstrate by competent tangible evidence: + +(a) was already known to the receiving Party or its Affiliate, other than under an obligation of confidentiality, at the time of disclosure by the other Party; + +Source: DOVA PHARMACEUTICALS INC., 10-Q, 11/8/2018 + + + + + +(b) was generally available to the public or otherwise part of the public domain at the time of its disclosure to the receiving Party; + +(c) became generally available to the public or otherwise part of the public domain after its disclosure and other than through any act or omission of the receiving Party or its Affiliates in breach of this Agreement; + +(d) was disclosed to the receiving Party or its Affiliate by a Third Party who has a legal right to make such disclosure and who did not obtain such information directly or indirectly from the other Party (or its Affiliate); or + +(e) was independently discovered or developed by the receiving Party or its Affiliate without access to or aid, application, use of the other Party's Confidential Information, as evidenced by a contemporaneous writing. + +9.1.2 Authorized Disclosure. Notwithstanding the obligations set forth in Section 9.1.1, a Party may disclose the other Party's Confidential Information and the terms of this Agreement to the extent: + +(a) such disclosure is reasonably necessary (x) to comply with the requirements of Governmental Authorities; or (y) for the prosecuting or defending litigation as contemplated by this Agreement; + +(b) such disclosure is reasonably necessary to its Affiliates, employees, agents, consultants and contractors on a need-to-know basis for the sole purpose of performing its obligations or exercising its rights under this Agreement; provided that in each case, the disclosees are bound by obligations of confidentiality and non-use consistent with those contained in this Agreement and the disclosing Party shall be liable for any failures of such disclosees to abide by such obligations of confidentiality and non-use; or + +(c) such disclosure is reasonably necessary to comply with Applicable Laws, including regulations promulgated by applicable securities exchanges, court order, administrative subpoena or order. + +Notwithstanding the foregoing, in the event a Party is required to make a disclosure of the other Party's Confidential Information pursuant to Section 9.1.2(a) or 9.1.2(c), such Party shall, if permitted, promptly notify the other Party of such required disclosure and shall use reasonable efforts to assist the other Party (at the other Party's cost) in obtaining, a protective order preventing or limiting the required disclosure. + +9.2 Public Announcements. The press release announcing the execution of this Agreement shall be issued in the form attached hereto as Exhibit A. No public announcement or statements (including presentations to investor meetings and customer updates) concerning the existence of or terms of this Agreement or incorporating the marks of the other Party or their respective Affiliates shall be made, either directly or indirectly, by either Party or a Party's Affiliates, without first obtaining the written approval of the other Party and agreement upon the nature, text and timing of such announcement or disclosure. Either Party shall have the right to make any such public announcement or other disclosure required by Applicable Law after such Party has provided to the other Party a copy of such announcement or disclosure and an opportunity to comment thereon and the disclosing Party shall reasonably consider the other Party's comments. Each Party agrees that it shall cooperate fully with the other with respect to all disclosures regarding this Agreement to the Securities Exchange Commission and any other Governmental Authorities, including requests for confidential treatment of proprietary information of either Party included in any such disclosure. Once any written statement is approved for disclosure by the Parties or information is otherwise made public in accordance with this Section 9.2, either Party may make a subsequent public disclosure of the same contents of such statement in the same context as such statement without further approval of the other Party. Notwithstanding anything to the contrary contained herein, in no event shall either Party disclose any financial information of the other without the prior written consent of such other Party, unless such financial information already has been publicly disclosed by the Party owning the financial information or otherwise has been made part of the public domain by no breach of a Party of its obligations under this ARTICLE 9. + +8 + +CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. + +Source: DOVA PHARMACEUTICALS INC., 10-Q, 11/8/2018 + + + + + +ARTICLE 10 REPRESENTATIONS AND WARRANTIES; ADDITIONAL COVENANTS + +10.1 Representations and Warranties of Dova. Dova represents and warrants to Valeant as of the Effective Date that: + +10.1.1 it is a corporation duly organized and validly existing under the laws of the state or other jurisdiction of its incorporation; + +10.1.2 the execution, delivery and performance of this Agreement by it has been duly authorized by all requisite corporate action; + +10.1.3 it has the power and authority to execute and deliver this Agreement and to perform its obligations hereunder; + +10.1.4 this Agreement constitutes a legal, valid and binding obligation enforceable against it in accordance with its terms, subject to the effects of bankruptcy, insolvency or other laws of general application affecting the enforcement of creditor rights, judicial principles affecting the availability of specific performance and general principles of equity (whether enforceability is considered a proceeding at law or equity); + +10.1.5 the execution, delivery and performance of this Agreement by Dova does not require the consent of any Person (including under the Third Party Agreements) or the authorization of (by notice or otherwise) any Governmental Authority including the FDA; + +10.1.6 there is no action, suit or proceeding pending or, to the knowledge of Dova, threatened, against Dova or any of its Affiliates, or to the knowledge of Dova, any Third Party acting on their behalf, which would be reasonably expected to impair, restrict or prohibit the ability of Dova or Valeant to perform its obligations and enjoy the benefits of this Agreement; + +10.1.7 it is in compliance in all material respects with all Applicable Laws applicable to the subject matter of this Agreement, including its donations to, and interactions with, any 501(c)(3) charitable foundation that provides co-pay assistance to government-insured patients with respect to the Product have been in compliance with all Applicable Laws; + +10.1.8 it has the right to market and sell the Product in the Territory as contemplated herein and has all licenses, authorizations, permissions, consents or approvals from any applicable Governmental Authority including the FDA necessary to make, use, sell and offer to sell the Product in the Territory and all such licenses, authorizations, permissions, consents or approvals are in good standing; + +10.1.9 it has the exclusive right to promote the Product in the Territory to the Target Professionals in the Specialty and the rights granted by it to Valeant hereunder do not conflict with any rights granted by Dova to any Third Party; + +10.1.10 to the knowledge of Dova, all manufacturing, stability testing, labeling, packaging, storing, shipping and distribution operations conducted by or on behalf of Dova relating to the commercial supply of the Product have been conducted in compliance with Applicable Law and it has no knowledge of any information indicating that Dova would be unable to manufacture and supply (or have manufactured and supplied) the Product in sufficient quantities to meet the reasonable demands in the Territory; + +10.1.11 it has no knowledge of any information relating to the safety or efficacy of the Product or any communications with any Governmental Authority, which would reasonably be expected to materially impair, restrict, prohibit or affect Dova's ability to perform its obligations and enjoy the benefits of this Agreement; + +10.1.12 it is not a party to any agreement or arrangement with any Third Party or under any obligation or restriction agreement (including any outstanding order, judgment or decree of any court or administrative agency) which in any way limits or conflicts with its ability to execute and deliver this Agreement and to fulfill any of its obligations under this Agreement; + +10.1.13 each of the Third Party Agreements constitutes a valid and binding obligation of Dova or its Affiliate, as applicable, and is enforceable against Dova or its Affiliate, as applicable, and, to the knowledge of Dova, each of the Third Party Agreements constitutes a valid and binding obligation of the counterparty thereto and is enforceable against such counterparty, except in each case as may be limited by bankruptcy, insolvency, fraudulent transfer, moratorium, reorganization, preference or similar laws of general applicability relating to or affecting the rights of creditors generally and subject to general principles of equity (regardless of whether enforcement is sought in equity or at law). Dova or its Affiliate, as applicable, and to the knowledge of Dova, the applicable counterparty thereto, are not in material breach of or default under either of the Third Party Agreements. The + +Source: DOVA PHARMACEUTICALS INC., 10-Q, 11/8/2018 + + + + + +counterparty to each of the Third Party Agreements has not exercised or, to the knowledge of Dova, threatened in writing to exercise any termination right with respect to the applicable Third Party Agreement. + +10.1.14 neither Dova nor any of its personnel (i) have been debarred under the 21 U.S.C. § 335a, (ii) are excluded, debarred, suspended, or otherwise ineligible to participate in the Federal health care programs or in Federal procurement or nonprocurement programs, (iii) are convicted of a criminal offense that falls within the ambit of the Federal statute providing for mandatory exclusion from participation in Federal health care programs but has not yet been excluded, debarred, suspended, or otherwise declared ineligible to participate in those programs, (iv) are listed on the HHS/OIG List of Excluded Individuals/Entities (available through the Internet at http://oig.hhs.gov) or (v) are listed on the General Services Administration's List of Parties Excluded from Federal Programs (available through the Internet at hhtp://epls.arnet.gov). If, during the Term, Dova or any of its personnel becomes or is the subject of a proceeding that could lead to, as applicable, (i) debarment under 21 U.S.C. § 335a, (ii) exclusion, debarment, suspension or ineligibility to participate in the Federal health care programs or in Federal procurement or nonprocurement programs, (iii) convicted (or conviction) of a criminal offense that falls within the ambit of the Federal statute providing for mandatory exclusion from participation in Federal healthcare programs, (iv) listed (or listing) on the HHS/OIG List of Excluded Individuals/Entities (available through the Internet at http://oig.hhs.gov) or (v) listed (or listing) on the General Services Administration's List of Parties Excluded from Federal Programs (available through the Internet at hhtp://epls.arnet.gov), Dova shall immediately notify Valeant, and Valeant shall have the option to prohibit such Person from performing work relating to this Agreement or the Product; and + +10.1.15 any patient assistance program used in connection with the Product used in connection with the Product have each been operated in accordance with Applicable Law. + +10.2 Representations and Warranties of Valeant. Valeant represents and warrants to Dova as of the Effective Date that: + +10.2.1 it is a limited liability company duly organized and validly existing under the laws of the state or other jurisdiction of its incorporation; + +10.2.2 the execution, delivery and performance of this Agreement by it has been duly authorized by all requisite corporate action; + +10.2.3 it has the power and authority to execute and deliver this Agreement and to perform its obligations hereunder; + +10.2.4 this Agreement constitutes a legal, valid and binding obligation enforceable against it in accordance with its terms, subject to the effects of bankruptcy, insolvency or other laws of general application affecting the enforcement of creditor rights, judicial principles affecting the availability of specific performance and general principles of equity (whether enforceability is considered a proceeding at law or equity); + +10.2.5 the execution, delivery and performance of this Agreement by Valeant does not require the consent of any Person or the authorization of (by notice or otherwise) any Governmental Authority or the FDA; + +10.2.6 there is no action, suit or proceeding pending or, to the knowledge of Valeant, threatened, against Valeant or any of its Affiliates, or to the knowledge of Valeant, any Third Party acting on their behalf, which would be reasonably expected to impair, restrict or prohibit the ability of Dova or Valeant to perform its obligations and enjoy the benefits of this Agreement; + +10.2.7 it is in compliance in all material respects with all Applicable Laws applicable to the subject matter of this Agreement; + +10.2.8 it has the right to market and sell the Designated Product in the Territory as contemplated herein and has all licenses, authorizations, permissions, consents or approvals from any applicable Governmental Authority including the FDA necessary to make, use, sell and offer to sell the Product in the Territory and all such licenses, authorizations, permissions, consents or approvals are in good standing; + +10.2.9 it is not a party to any agreement or arrangement with any Third Party or under any obligation or restriction agreement (including any outstanding order, judgment or decree of any court or administrative agency) which in any way limits or conflicts with its ability to execute and deliver this Agreement and to fulfill any of its obligations under this Agreement; + +10.2.10 it has no knowledge of any information relating to any communications with any Governmental Authority, which would reasonably be expected to materially impair, restrict, prohibit or affect Valeant's ability to perform its obligations and enjoy the benefits of this Agreement; + +10.2.11 neither Valeant nor any of its personnel (i) have been debarred under the 21 U.S.C. § 335a, (ii) are + +Source: DOVA PHARMACEUTICALS INC., 10-Q, 11/8/2018 + + + + + +excluded, debarred, suspended, or otherwise ineligible to participate in the Federal health care programs or in Federal procurement or nonprocurement programs, (iii) are convicted of a criminal offense that falls within the ambit of the Federal statute providing for mandatory exclusion from participation in Federal health care programs but has not yet been excluded, debarred, suspended, or otherwise declared ineligible to participate in those programs, (iv) are listed on the HHS/OIG List of Excluded Individuals/Entities (available through the Internet at http://oig.hhs.gov) or (v) are listed on the General Services Administration's List of Parties Excluded from Federal Programs (available through the Internet at hhtp://epls.arnet.gov). If, during the Term, Valeant or any of its personnel become or are the subject of a proceeding that could lead to, as applicable, (i) debarment under 21 U.S.C. § 335a, (ii) exclusion, debarment, suspension or ineligibility to participate in the Federal health care programs or in Federal procurement or nonprocurement programs, (iii) convicted (or conviction) of a criminal offense that falls within the ambit of the Federal statute providing for mandatory exclusion from participation in Federal healthcare programs, (iv) listed (or listing) on the HHS/OIG List of Excluded Individuals/Entities (available through the Internet at http://oig.hhs.gov) or (v) listed (or listing) on the General Services Administration's List of Parties Excluded from Federal Programs (available through the Internet at hhtp://epls.arnet.gov), Valeant shall immediately notify Dova, and Dova shall have the option to prohibit such Person from performing work under this Agreement; and + +10.2.12 all Field Force Personnel that are engaged in Detailing are, and will be, licensed to the extent required and in accordance with all Applicable Laws. + +10.3 Disclaimer of Warranty. EXCEPT FOR THE EXPRESS WARRANTIES SET FORTH IN THIS AGREEMENT, DOVA (AND ITS AFFILIATES) AND VALEANT (AND ITS AFFILIATES) MAKE NO REPRESENTATIONS AND NO WARRANTIES, EXPRESS OR IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW, BY STATUTE OR OTHERWISE, AND DOVA (AND ITS AFFILIATES) AND VALEANT (AND ITS AFFILIATES) EACH SPECIFICALLY DISCLAIM ANY OTHER REPRESENTATIONS AND WARRANTIES, WHETHER WRITTEN OR ORAL, EXPRESS, STATUTORY OR IMPLIED, INCLUDING ANY WARRANTY OF QUALITY, MERCHANTABILITY OR FITNESS FOR A PARTICULAR USE OR PURPOSE OR ANY WARRANTY AS TO THE VALIDITY OF ANY INTELLECTUAL PROPERTY OR THE NON-INFRINGEMENT OF ANY INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES. + +10.4 Additional Covenants. + +10.4.1 Initial Orders to Non-Retail Institutions. For initial orders of Product from Dova (or its Affiliates or its Intermediaries) to the Non-Retail Institutions, Dova shall not engage in any "channel stuffing" or any similar program, activity or other action (including any rebate, discount, chargeback or refund policy or practice) that in each case is intended by Dova to result in purchases by the Non-Retail Institutions that are materially in excess of purchases in the ordinary course of business or that is intended to materially adversely impact Valeant's promotion fee pursuant to this Agreement; provided, however, this Section10.4.1 shall not be applicable to any activity or action taken by Dova which applies to all or substantially all customers for the Product, or any activity or action taken by Dova in good faith and consistent with customary sales and marketing practices in the pharmaceutical industry. + +10.4.2 Third Party Agreements. Dova shall remain solely responsible for the payment of royalty, milestone and other payment obligations, if any, due to Third Parties on (or in connection with) the sale of Product in the Territory, including under the Third Party Agreements. + +ARTICLE 11 INDEMNIFICATION; LIMITATIONS ON LIABILITY + +11.1 Indemnification by Dova. Dova shall defend, indemnify and hold harmless Valeant and its Affiliates and its and their respective officers, directors, employees, agents, representatives, successors and assigns from and against all Claims, and all associated Losses, to the extent incurred or suffered by any of them to the extent resulting from or arising out of (a) any misrepresentation or breach of any representations, warranties, agreements or covenants of Dova under this Agreement, (b) the negligence, willful misconduct or violation of Applicable Laws by Dova (or any of its Affiliates or its or their respective officers, directors, employees, agents or representatives), (c) the infringement of the intellectual property rights of any Third Party in connection with the Product, including from the use of the Dova Trademarks and Copyrights on Product Labeling or Product Materials in accordance with this Agreement, (d) death or personal injury to any person related to use of the Product, or (e) the failure to comply with Applicable Laws by the Specialty Pharmacies, applicable reimbursement hub or any 501(c)(3) charitable foundation used in connection with the Product; except in each case to the extent any such Claims, and all associated Losses, are caused by an item for which Valeant is obligated to indemnify Dova pursuant to Section 11.2. + +11.2 Indemnification by Valeant. Valeant shall defend, indemnify and hold harmless Dova and its Affiliates and its and their respective officers, directors, employees, agents, representatives, successors and assigns from and against all Claims and all associated Losses, to the extent incurred or suffered by any of them to the extent resulting from or arising out of (a) any misrepresentation or breach of any representations, warranties, agreements or covenants of Valeant under this Agreement, or (b) the negligence, willful misconduct, or violation of Applicable Laws by Valeant (or any of its Affiliates or its and their respective + +Source: DOVA PHARMACEUTICALS INC., 10-Q, 11/8/2018 + + + + + +officers, directors, employees, agents or representatives); except in each case to the extent any such Claims, and all associated Losses, are caused by an item for which Dova is obligated to indemnify Valeant pursuant to Section 11.1. + +11.3 Indemnification Procedures. The Party seeking indemnification under Section 11.1 or 11.2, as applicable (the "Indemnified Party") shall give prompt notice to the Party against whom indemnity is sought (the "Indemnifying Party") of the assertion or commencement of any Claim in respect of which indemnity may be sought under Section 11.1 or 11.2, as applicable, and will provide the Indemnifying Party such information with respect thereto that the Indemnifying Party may reasonably request. The failure to give such notice will relieve the Indemnifying Party of any liability hereunder only to the extent that the Indemnifying Party has suffered actual prejudice thereby. The Indemnifying Party shall assume and control the defense and settlement of any such action, suit or proceeding at its own expense. The Indemnified Party shall, if requested by the Indemnifying Party, cooperate in all reasonable respects in such defense, at the Indemnifying Party's expense. The Indemnified Party will be entitled at its own expense to participate in such defense and to employ separate counsel for such purpose. For so long as the Indemnifying Party is diligently defending any proceeding pursuant to this Section 11.3, the Indemnifying Party will not be liable under Section 11.1 or 11.2, as applicable, for any settlement effected without its consent. No Party shall enter into any compromise or settlement which commits the other Party to take, or to forbear to take, any action without the other Party's prior written consent (and unless such compromise or settlement includes no payments by the Indemnified Party, an unconditional release of, and no admission of liability by, the Indemnified Party from all liability in respect of such Claim). + +11.4 Limitation of Liability. NOTWITHSTANDING ANY OTHER PROVISION CONTAINED HEREIN (OTHER THAN AS SET FORTH IN THE SECOND SENTENCE OF THIS SECTION 11.4), IN NO EVENT SHALL DOVA (OR ITS AFFILIATES) OR VALEANT (OR ITS AFFILIATES) BE LIABLE TO THE OTHER OR ANY OF THE OTHER PARTY'S AFFILIATES FOR ANY CONSEQUENTIAL, INCIDENTAL, INDIRECT, SPECIAL, PUNITIVE OR EXEMPLARY DAMAGES (INCLUDING LOST PROFITS) SUFFERED OR INCURRED BY SUCH OTHER PARTY OR ITS AFFILIATES THAT ARISE OUT OF OR RELATE TO THIS AGREEMENT OR IN CONNECTION WITH A BREACH OR ALLEGED BREACH OF THIS AGREEMENT, WHETHER IN CONTRACT, TORT, STRICT LIABILITY OR OTHERWISE, AND REGARDLESS OF ANY NOTICE OF THE POSSIBILITY OF SUCH DAMAGES. THE FOREGOING SENTENCE SHALL NOT LIMIT (1) THE OBLIGATIONS OF EITHER PARTY TO INDEMNIFY THE OTHER PARTY FROM AND AGAINST THIRD PARTY CLAIMS UNDER SECTION 11.1 OR 11.2, AS APPLICABLE, OR (2) DAMAGES AVAILABLE FOR A PARTY'S BREACH OF THE CONFIDENTIALITY AND NON-USE OBLIGATIONS IN ARTICLE 9. + +11.5 Insurance. Each Party acknowledges and agrees that during the Term, it shall maintain, through purchase or self- insurance, adequate insurance, including products liability coverage and comprehensive general liability insurance, adequate to cover its obligations under this Agreement and which are consistent with normal business practices of prudent companies similarly situated. Each Party shall provide reasonable written proof of the existence of such insurance to the other Party upon request. Dova does not and will not maintain or procure any worker's compensation, healthcare, or other insurance for or on behalf of any Field Force Personnel, all of which shall be Valeant's sole responsibility. For clarity, the insurance requirements of this Section 11.5 shall not be construed to create a limit of either Party's liability with respect to its indemnification obligations under this ARTICLE 11. + +ARTICLE 12 TERM AND TERMINATION + +12.1 Term. This Agreement shall become effective as of the Effective Date and, unless earlier terminated as provided in this ARTICLE 12, shall extend until the four (4) year anniversary of the Effective Date (the "Term"). + +12.2 Early Termination for Cause. A Party shall have the right to terminate this Agreement before the end of the Term as follows: + +12.2.1 by a Party upon written notice to the other Party in the event of a material breach of this Agreement by such other Party where such breach is not cured (if able to be cured) within [***] following such other Party's receipt of written notice of such breach (and any such termination shall become effective at the end of such [***] period unless the breaching Party has cured such breach prior to the expiration of such [***] period); + +12.2.2 by Dova if the Quarterly Average Sales Force Size is less than [***] Sales Representatives for [***] consecutive Calendar Quarters, upon [***] written notice to Valeant, such notice to be delivered no less than [***] following the end of the last consecutive Calendar Quarter in which the Quarterly Average Sales Force Size is less than [***] Sales Representatives; + +12.2.3 by Dova if the aggregate actual number of Details for the Product made by the Sales Representatives for a Calendar Quarter is less than the Quarterly Minimum Details for [***] consecutive Calendar Quarters, upon [***] written notice to Valeant, such notice to be delivered no less than [***] following the end of the last consecutive Calendar Quarter in which the actual Details are less than the Quarterly Minimum Details; + +Source: DOVA PHARMACEUTICALS INC., 10-Q, 11/8/2018 + + + + + +12.2.4 by either Party upon [***] written notice to the other Party following the withdrawal of the Product from the market by Dova (or the decision by Dova to withdraw the Product from the market) due to (i) any decision, judgment, ruling or other requirement of the FDA, or (ii) material safety concern; + +12.2.5 by Dova upon [***] written notice to Valeant upon the cessation of marketing by Valeant of the Designated Product (or the Alternate Product in accordance with Section 4.2.1(c), as the case may be); + +12.2.6 by Dova pursuant to Section 4.2.1(c); and + +12.2.7 by a Party immediately upon written notice to the other Party upon the filing or institution of bankruptcy, reorganization, liquidation or receivership proceedings with respect to such other Party, or upon an assignment of a substantial portion of the assets for the benefit of creditors by such other Party, or in the event a receiver or custodian is appointed for such other Party's business or a substantial portion of such other Party's business is subject to attachment or similar process; provided, however, in the case of any involuntary bankruptcy proceeding such right to terminate shall only become effective if the party consents to the involuntary bankruptcy or such proceeding is not dismissed within [***] after the filing thereof. + +12.3 Other Early Termination. + +12.3.1 Either Party shall have the right to terminate this Agreement before the end of the Term for its convenience upon [***] written notice to the other Party (and any such termination shall become effective at the end of such [***]); [***]. + +12.3.2 Either Party shall have the right to terminate this Agreement before the end of the Term upon [***] written notice to the other Party delivered within [***] after the conclusion of any Calendar Quarter, beginning with the Calendar Quarter commencing on [***], in which the Net Sales in such Calendar Quarter are less [***] (and any such termination shall become effective at the end of such [***] period); provided that Valeant shall not have the right to terminate this Agreement pursuant to this Section 12.3.2 with respect to any Calendar Quarter for which the Quarterly Average Sales Force Size is less than [***] Sales Representatives. + +12.4 Effects of Termination. Upon the expiration or effective date of termination of this Agreement, (i) all rights and obligations of both Parties hereunder shall immediately terminate, subject to any survival as set forth in Sections 12.5 and 12.6, (ii) Valeant, at Dova's direction, shall immediately return to Dova or destroy in accordance with all Applicable Laws all Product Materials, reports and other tangible items provided by or on behalf of Dova to Valeant or otherwise developed or obtained by Valeant pursuant to the terms of this Agreement (other than Valeant Property) (and at the request of Dova, Valeant shall certify destruction of such materials if Valeant does not to return such materials to Dova), (iii) Valeant shall immediately cease all Valeant Activities with respect to the Product, and (iv) each of Dova and Valeant shall, at the other Party's direction, either return to such other Party or destroy all Confidential Information of such other Party. Notwithstanding the foregoing, each Party may retain archival copies of any Confidential Information to the extent required by law, regulation or professional standards or copies of Confidential Information created pursuant to the automatic backing-up of electronic files where the delivery or destruction of such files would cause undue hardship to the receiving Party, so long as any such archival or electronic file back-up copies are accessible only to its legal or IT personnel, provided that such Confidential Information will continue to be subject to the terms of this Agreement. + +12.5 Tail Period. Solely in the event that Dova has terminated this Agreement pursuant to Section 12.3.1 and notwithstanding anything else herein, in consideration of the promotion services performed by Valeant during the Term, with respect to the Tail Period, Dova shall make payments to Valeant in an amount equal to [***] of the amounts that would have been payable by Dova to Valeant with respect to such Tail Period pursuant to Section 6.1 had the Agreement not been so terminated. Such payments shall be made within [***] following the end of each calendar quarter in the Tail Period. Sections 6.3, 6.4 and 6.5 shall apply, mutatis mutandis, to such Tail Period payments. For clarity, no tail payment shall be due following any expiration or termination of this Agreement except as set forth in this Section 12.5. + +12.6 Survival. Termination or expiration of this Agreement shall be without prejudice to any rights that shall have accrued to the benefit of any Party prior to such termination or expiration. Notwithstanding any expiration or termination of this Agreement, such expiration or termination shall not relieve any Party from obligations which are expressly or by implication intended to survive expiration or termination, including Sections 2.3, , 4.4.2, 5.7, 5.9, 6.3.6, 6.3.5, 11.1, 11.2, 11.3, 11.4, 12.4, 12.5 and 12.6, Articles 7, 8, 9 and 13 (to the extent applicable to implementation of the survival of the preceding Sections and Articles) and, solely as it relates to the last Calendar Quarter, Sections 6.1, 6.2 and 6.3, which shall survive and be in full force and effect. + +ARTICLE 13 MISCELLANEOUS + +13.1 Force Majeure. Neither Party shall be held liable to the other Party nor be deemed to have defaulted under or breached this Agreement for failure or delay in performing any obligation under this Agreement to the extent such failure or delay is + +Source: DOVA PHARMACEUTICALS INC., 10-Q, 11/8/2018 + + + + + +caused by or results from causes beyond the reasonable control of the affected Party, potentially including, embargoes, war, acts of war (whether war be declared or not), acts of terrorism, insurrections, riots, civil commotions, strikes, lockouts or other labor disturbances, fire, floods, or other acts of God, or acts, omissions or delays in acting by any Governmental Authority. The affected Party shall notify the other Party of such force majeure circumstances as soon as reasonably practicable, and shall promptly undertake all reasonable efforts necessary to cure such force majeure circumstances and re-commence its performance hereunder as soon as practicable. + +13.2 Assignment. Except as provided in this Section 13.2, this Agreement may not be assigned or otherwise transferred, nor may any rights or obligations hereunder be assigned or transferred, by either Party, without the written consent of the other Party (such consent not to be unreasonably withheld); provided that a merger, sale of stock or comparable transaction shall not constitute an assignment. In the event either Party desires to make such an assignment or other transfer of this Agreement or any rights or obligations hereunder, such Party shall deliver a written notice to the other Party requesting the other Party's written consent in accordance with this Section 13.2, and the other Party shall provide such Party written notice of its determination whether to provide such written consent within [***] following its receipt of such written notice from such Party. Notwithstanding the foregoing, (a) either Party may, without the other Party's consent, assign this Agreement and its rights and obligations hereunder in whole or in part to an Affiliate; and (b) Dova may assign this Agreement to a successor in interest in connection with the sale or other transfer of all or substantially all of Dova's assets or rights relating to the Product; provided that such assignee shall remain subject to all of the terms and conditions hereof in all respects and shall assume all obligations of Dova hereunder whether accruing before or after such assignment. Any permitted assignee shall assume all assigned obligations of its assignor under this Agreement. Any attempted assignment not in accordance with this Section 13.2 shall be void. This Agreement shall be binding on, and inure to the benefit of, each Party, and its permitted successors and assigns. + +13.3 Severability. If any one or more of the provisions contained in this Agreement is held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby, unless the absence of the invalidated provision(s) adversely affects the substantive rights of the Parties. The Parties shall in such an instance use reasonable efforts to replace the invalid, illegal or unenforceable provision(s) with valid, legal and enforceable provision(s) which, insofar as practical, implement the purposes of this Agreement. + +13.4 Notices. All notices which are required or permitted hereunder shall be in writing and sufficient if delivered personally, sent by e-mail (and promptly confirmed by personal delivery, registered or certified mail or overnight courier), sent by nationally-recognized overnight courier, or sent by registered or certified mail, postage prepaid, return receipt requested, addressed as follows: + +if to Dova, to: Dova Pharmaceuticals, Inc. 240 Leigh Farm Road, Suite 245 Durham, NC 27707 Attention: Chief Executive Officer Email: asapir@dova.com + +With a copy to: Dova Pharmaceuticals, Inc. 240 Leigh Farm Road, Suite 245 Durham, NC 27707 Attention: General Counsel Email: mbanjak@dova.com + +if to Valeant, to: Valeant Pharmaceuticals North America LLC 400 Somerset Corporate Boulevard Bridgewater, NJ 08807 Attention: XXXXXXXXX Email: XXXXXXXX + +With a copy to: XXXXXXXX Attention: XXXXXXXX Fax: XXXXXXXX Email: XXXXXXXX + +or to such other address(es) as the Party to whom notice is to be given may have furnished to the other Party in writing in accordance herewith. Any such notice shall be deemed to have been given: (a) when delivered if personally delivered; (b) on the + +Source: DOVA PHARMACEUTICALS INC., 10-Q, 11/8/2018 + + + + + +Business Day after dispatch if sent by nationally-recognized overnight courier; or (c) on the fifth (5th) Business Day following the date of mailing, if sent by mail. + +13.5 Governing Law. This Agreement and any and all matters arising directly or indirectly herefrom shall be governed by and construed and enforced in accordance with the internal laws of the [***] applicable to agreements made and to be performed entirely in such state, including its statutes of limitation but without giving effect to the conflict of law principles thereof. + +13.6 Dispute Resolution. + +13.6.1 JSC; Escalation for Other Disputes. Except for disputes resolved by the procedures set forth in Section 3.4, if a dispute arises between the Parties in connection with or relating to this Agreement or any document or instrument delivered in connection herewith (a "Dispute"), then either Party shall have the right to refer such dispute to the Senior Officers who shall confer within [***] after such Dispute was first referred to them to attempt to resolve the Dispute by good faith negotiations. Any final decision mutually agreed to by the Senior Officers in writing shall be conclusive and binding on the Parties. If such Senior Officers do not agree on the resolution of an issue within [***] after such issue was first referred to them, either Party may, by written notice to the other Party, initiate arbitration for resolution of such Dispute pursuant to Section 13.6.2. + +13.6.2 Arbitration of Other Disputes. If a Dispute is not resolved by the Senior Officers pursuant to Section 13.6.1, such Dispute shall be submitted to and finally settled by [***] The Parties hereby submit to the exclusive jurisdiction of the federal and state courts located in [***] for the purposes of an order to compel arbitration, for preliminary relief in aid of arbitration and for a preliminary injunction to maintain the status quo or prevent irreparable harm prior to the appointment of the arbitrators and to the non-exclusive jurisdiction of such courts for the enforcement of any ward issued hereunder. + +13.7 Waiver of Jury Trial. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. + +13.8 Entire Agreement; Amendments. This Agreement, together with the Schedules and Exhibits hereto, contains the entire understanding of the Parties with respect to the subject matter hereof. Any other express or implied agreements and understandings, negotiations, writings and commitments, either oral or written, in respect to the subject matter hereof (including the Confidentiality Agreement, but solely with respect to information which is deemed Confidential Information hereunder) are superseded by the terms of this Agreement. The Exhibits to this Agreement are incorporated herein by reference and shall be deemed a part of this Agreement. This Agreement may be amended, or any term hereof modified, only by a written instrument duly executed by authorized representative(s) of both Parties hereto. + +13.9 Headings. The captions to the several Articles, Sections and subsections hereof are not a part of this Agreement, but are merely for convenience to assist in locating and reading the several Articles and Sections hereof. + +13.10 Independent Contractors. It is expressly agreed that Valeant and Dova shall be independent contractors and that the relationship between the two Parties shall not constitute a partnership, joint venture or agency. Neither Valeant nor Dova shall have the authority to make any statements, representations or commitments of any kind, or to take any action, which shall be binding on the other Party, without the prior written consent of the other Party. + +13.11 Third Party Beneficiaries. Except as set forth in ARTICLE 11, no Person other than Dova or Valeant (and their respective Affiliates and permitted successors and assignees hereunder) shall be deemed an intended beneficiary hereunder or have any right to enforce any obligation of this Agreement. + +13.12 Waiver. The waiver by either Party hereto of any right hereunder, or of any failure of the other Party to perform, or of any breach by the other Party, shall not be deemed a waiver of any other right hereunder or of any other breach by or failure of such other Party whether of a similar nature or otherwise. + +13.13 Cumulative Remedies. No remedy referred to in this Agreement is intended to be exclusive, but each shall be cumulative and in addition to any other remedy referred to in this Agreement or otherwise available under law. + +13.14 Waiver of Rule of Construction. Each Party has had the opportunity to consult with counsel in connection with the review, drafting and negotiation of this Agreement. Accordingly, the rule of construction that any ambiguity in this Agreement shall be construed against the drafting Party shall not apply. + +13.15 Use of Names. Except as otherwise provided herein, neither Party shall have any right, express or implied, to use in any manner the name or other designation of the other Party or any other trade name, trademark or logo of the other Party for any purpose in connection with the performance of this Agreement. + +13.16 Further Actions and Documents. Each Party agrees to execute, acknowledge and deliver all such further + +Source: DOVA PHARMACEUTICALS INC., 10-Q, 11/8/2018 + + + + + +instruments, and to do all such further acts, as may be reasonably necessary or appropriate to carry out the intent and purposes of this Agreement. + +13.17 Certain Conventions. Any reference in this Agreement to an Article, Section, subsection, paragraph, clause, or Exhibit shall be deemed to be a reference to an Article, Section, subsection, paragraph, clause, or Exhibit, of or to, as the case may be, this Agreement, unless otherwise indicated. Unless the context of this Agreement otherwise requires, (a) words of any gender include each other gender, (b) words such as "herein", "hereof", and "hereunder" refer to this Agreement as a whole and not merely to the particular provision in which such words appear, (c) words using the singular shall include the plural, and vice versa, (d) whenever any provision of this Agreement uses the term "including" (or "includes"), such term shall be deemed to mean "including without limitation" (or "includes without limitations"), and (e) references to any Articles or Sections include Sections and subsections that are part of the references' Article or Section (e.g., a section numbered "Section 2.2.1" would be part of "Section 2.2", and references to "ARTICLE 2" or "Section 2.2" would refer to material contained in the subsection described as "Section 2.2.1"). + +13.18 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be delivered via facsimile or electronic mail (including pdf) and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes and shall have the same force and effect as original signatures. + +[signature page follows] + +[Signature page to Co-Promotion Agreement] + +IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date. + +DOVA PHARMACEUTICALS, INC. + +By: __/s/ Alex C. Sapir______________________ + +Name: Alex C. Sapir + +Title: CEO + +VALEANT PHARMACEUTICALS NORTH AMERICA LLC + +By: ___/s/ Joseph C. Papa_______________ + +Name: Joseph C. Papa + +Title: Chief Executive Officer and President + +9 + +CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. + +Source: DOVA PHARMACEUTICALS INC., 10-Q, 11/8/2018 + + + + + +EXHIBIT A + +Joint Press Release + +DURHAM, N.C. and BRIDGEWATER, N.J., Sept. 27, 2018 (GLOBE NEWSWIRE) -- Dova Pharmaceuticals, Inc. ("Dova") (DOVA), a specialty pharmaceutical company focused on acquiring, developing, and commercializing drug candidates for diseases where there is a high unmet need, and Salix Pharmaceuticals ("Salix"), one of the largest specialty pharmaceutical companies in the world committed to the prevention and treatment of gastrointestinal diseases and its parent company, Bausch Health Companies Inc. (NYSE/TSX: BHC), today announced that they have entered into an exclusive agreement to co-promote Dova's DOPTELET (avatrombopag) in the United States (U.S.). The U.S. Food and Drug Administration ("FDA") approved DOPTELET on May 21, 2018 for the treatment of thrombocytopenia in adult patients with chronic liver disease (CLD) who are scheduled to undergo a procedure. DOPTELET represents the first thrombopoietin (TPO) receptor agonist approved in the United States for this indication. + +Thrombocytopenia, a condition in which patients have a low platelet count, is the most common hematological abnormality in patients with CLD that often worsens with the severity of liver disease. It is estimated that approximately 15 percent of the 7.5 million patients with CLD have some form of thrombocytopenia. In a study published in 2010, patients with severe thrombocytopenia (<75,000/µL) had a 31 percent incidence of procedure-related bleeding. As a result of the associated increased rate of bleeding, there is an increased risk for the CLD patient when undergoing common scheduled medical procedures such as liver biopsy, colonoscopy, endoscopy, and routine dental procedures. + +As part of the co-promotion arrangement, Salix intends to deploy approximately 100 sales specialists who will promote DOPTELET to gastroenterology healthcare professionals. The Salix sales force will begin selling DOPTELET in mid-October 2018. Dova will continue its commercial efforts targeting primarily hepatologists and interventional radiologists and certain other specialties. Pursuant to the agreement, Dova will pay Salix a quarterly fee based on net sales (as defined in the agreement) of DOPTELET prescribed by gastroenterologists in the U.S. + +"We are delighted to be working with Salix, a company considered by many to have the preeminent gastroenterology sales force in the United States," said Alex C. Sapir, president and chief executive officer, Dova Pharmaceuticals. "Given Salix's presence and strong reputation within large gastroenterology group practices coupled with the early interest we are seeing among the gastroenterology community, we are excited to see the impact this partnership will bring to DOPTELET and to patients." + +"Salix considers liver disease a strategic therapeutic area of focus, given our history and knowledge with XIFAXAN® (rifaximin), an innovative medicine indicated for the treatment of overt hepatic encephalopathy (HE), a condition that is often a consequence of chronic liver disease," said Mark McKenna, president, Salix Pharmaceuticals. "Adding DOPTELET to our portfolio will enable our sales force to promote yet another innovative product that addresses a true unmet need in the marketplace." + +CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. + +Source: DOVA PHARMACEUTICALS INC., 10-Q, 11/8/2018 + + + + + +About DOPTELET DOPTELET (avatrombopag) is a second generation, once daily, orally administered TPO receptor agonist approved for the treatment of thrombocytopenia in adult patients with CLD who are scheduled to undergo a procedure. DOPTELET is designed to mimic the effects of TPO, the primary regulator of normal platelet production. + +Two global Phase 3, double-blind, placebo-controlled trials (ADAPT-1 [N=231] and ADAPT-2 [N=204]), conducted in adults with thrombocytopenia (platelet count of less than 50,000/µL) and CLD, supported the FDA approval. Patients were assigned to either 40 mg or 60 mg of avatrombopag daily for five days based on their Baseline platelet counts (40 to <50,000/µmL or <40,000/µmL, respectively). Avatrombopag was shown to be superior to placebo in increasing the proportion of patients not requiring platelet transfusions or rescue procedures for bleeding up to seven days following a scheduled procedure in both trials in both the 40 mg (ADAPT-1, 88% vs. 38%, p <0.0001; ADAPT-2, 88% vs. 33%; p<0.0001), and 60 mg (ADAPT-1, 66% vs. 23%, p <0.0001; ADAPT-2, 69% vs. 35%; p=0.0006) treatment groups. Avatrombopag was also superior to placebo at the two secondary efficacy endpoints in each trial. In the avatrombopag treatment groups, there was an increased proportion of patients achieving the target platelet count of ≥50,000/µmL on procedure day, and a greater magnitude of the change in mean platelet count from baseline to procedure day; all treatment differences between the avatrombopag and placebo treatment groups for each secondary endpoint were highly statistically significant with p values <0.0001. The most common adverse reactions with avatrombopag included pyrexia, abdominal pain, nausea, headache, fatigue and edema peripheral. Portal vein thromboses have been reported in patients with CLD and in patients receiving TPO receptor agonists. One treatment-emergent event of portal vein thrombosis was reported in the ADAPT trials in an avatrombopag-treated patient. + +INDICATION + +DOPTELET (avatrombopag) is indicated for the treatment of thrombocytopenia in adult patients with chronic liver disease who are scheduled to undergo a procedure. + +IMPORTANT SAFETY INFORMATION + +WARNINGS AND PRECAUTIONS + +DOPTELET is a thrombopoietin (TPO) receptor agonist and TPO receptor agonists have been associated with thrombotic and thromboembolic complications in patients with chronic liver disease. Portal vein thrombosis has been reported in patients with chronic liver disease treated with TPO receptor agonists. In the ADAPT-1 and ADAPT-2 clinical trials, there was one treatment- emergent event of portal vein thrombosis in a patient (n=1/430) with chronic liver disease and thrombocytopenia treated with DOPTELET. + +Consider the potential increased thrombotic risk when administering DOPTELET to patients with known risk factors for thromboembolism, including genetic prothrombotic conditions (Factor V Leiden, Prothrombin 20210A, Antithrombin deficiency or Protein C or S deficiency). + +DOPTELET should not be administered to patients with chronic liver disease in an attempt to normalize platelet counts. + +CONTRAINDICATIONS: None + +CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. + +Source: DOVA PHARMACEUTICALS INC., 10-Q, 11/8/2018 + + + + + +ADVERSE REACTIONS + +Most common adverse reactions (≥ 3%) were: pyrexia, abdominal pain, nausea, headache, fatigue, and edema peripheral. + +Please see full Prescribing Information for DOPTELET (avatrombopag) www.doptelet.com + +About XIFAXAN XIFAXAN is a nonsystemic* antibiotic that slows the growth of bacteria in the gut that are believed to be linked to symptoms of overt hepatic encephalopathy (HE). It has been proven to reduce the risk of overt HE recurrence and HE-related hospitalizations in adults. + +*There is an increased systemic exposure in patients with severe (Child-Pugh Class C) hepatic impairment. Caution should be exercised when administering XIFAXAN to these patients. + +INDICATION XIFAXAN (rifaximin) 550 mg tablets are indicated for the reduction in risk of overt hepatic encephalopathy (HE) recurrence in adults and for the treatment of irritable bowel syndrome with diarrhea (IBS-D) in adults. + +IMPORTANT SAFETY INFORMATION + +•XIFAXAN is not for everyone. Do not take XIFAXAN if you have a known hypersensitivity to rifaximin, any of the rifamycin antimicrobial agents, or any of the components in XIFAXAN. + +•If you take antibiotics, like XIFAXAN, there is a chance you could experience diarrhea caused by an overgrowth of bacteria (C. difficile). This can cause symptoms ranging in severity from mild diarrhea to life-threatening colitis. Contact your healthcare provider if your diarrhea does not improve or worsens. + +•Talk to your healthcare provider before taking XIFAXAN if you have severe hepatic (liver) impairment, as this may cause increased effects of the medicine. + +•Tell your healthcare provider if you are taking drugs called P-glycoprotein and/or OATPs inhibitors (such as cyclosporine) because using these drugs with XIFAXAN may lead to an increase in the amount of XIFAXAN absorbed by your body. + +•In clinical studies, the most common side effects of XIFAXAN were: HE: Peripheral edema (swelling, usually in the ankles or lower limbs), nausea (feeling sick to your stomach), dizziness, fatigue (feeling tired), and ascites (a buildup of fluid in the abdomen) IBS-D: Nausea (feeling sick to your stomach) and an increase in liver enzymes + +•XIFAXAN may affect warfarin activity when taken together. Tell your healthcare provider if you are taking warfarin because the dose of warfarin may need to be adjusted to maintain proper blood-thinning effect. + +•If you are pregnant, planning to become pregnant, or nursing, talk to your healthcare provider before taking XIFAXAN because XIFAXAN may cause harm to an unborn baby or nursing infant. You are encouraged to report negative side effects of prescription drugs to the FDA. Visit www.fda.gov/medwatch or call 1-800- FDA-1088. + +CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. + +Source: DOVA PHARMACEUTICALS INC., 10-Q, 11/8/2018 + + + + + +For product information, adverse event reports, and product complaint reports, please contact: Salix Product Information Call Center Phone: 1-800-321-4576 Fax: 1-510-595-8183 Email: salixmc@dlss.com Please click here for full Prescribing Information. + +About Dova Pharmaceuticals, Inc. Dova is a pharmaceutical company focused on acquiring, developing, and commercializing drug candidates for rare diseases where there is a high unmet need, with an initial focus on addressing thrombocytopenia. Dova's proprietary pipeline includes one commercial product, DOPTELET, for the treatment of thrombocytopenia in adult patients with CLD scheduled to undergo a procedure. + +About Salix Salix is one of the largest specialty pharmaceutical companies in the world committed to the prevention and treatment of gastrointestinal diseases. For almost 30 years, Salix has licensed, developed, and marketed innovative products to improve patients' lives and arm health care providers with life-changing solutions for many chronic and debilitating conditions. Salix currently markets its product line to U.S. health care providers through an expanded sales force that focuses on gastroenterology, hepatology, pain specialists, and primary care. Salix is headquartered in Bridgewater, New Jersey. + +About Bausch Health Bausch Health Companies Inc. (NYSE/TSX: BHC) is a global company whose mission is to improve people's lives with our health care products. We develop, manufacture and market a range of pharmaceutical, medical device and over-the-counter products, primarily in the therapeutic areas of eye health, gastroenterology and dermatology. We are delivering on our commitments as we build an innovative company dedicated to advancing global health. More information can be found at www.bauschhealth.com. + +Dova Pharmaceuticals Cautionary Notes Regarding Forward-Looking Statements Any statements contained in this press release that do not describe historical facts may constitute forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. These statements may be identified by words such as "anticipated", "believe", "expect", "may", "plan", "potential", "will", and similar expressions, and are based on Dova's current beliefs and expectations. These forward-looking statements include the potential benefits of the collaboration, the timing of the Salix sales force beginning to sell DOPTELET and other information relating to the transaction between Dova and Salix. These statements involve risks and uncertainties that could cause actual results to differ materially from those reflected in such statements. Risks and uncertainties that may cause actual results to differ materially include uncertainties inherent in the conduct of clinical trials, increased regulatory requirements, Dova's reliance on third parties over which it may not always have full control, and other risks and uncertainties that are described in Dova's Annual Report on Form 10-K for the year ended December 31, 2017, filed with the U.S. Securities and Exchange Commission (SEC) on February 16, 2018, and Dova's other periodic reports filed with the SEC. Any forward-looking statements speak only as of the date of this press release and are based on information available to Dova as + +CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. + +Source: DOVA PHARMACEUTICALS INC., 10-Q, 11/8/2018 + + + + + +of the date of this release, and Dova assumes no obligation to, and does not intend to, update any forward-looking statements, whether as a result of new information, future events or otherwise. + +Bausch Health Forward-looking Statements This news release may contain forward-looking statements, which may generally be identified by the use of the words "anticipates," "expects," "intends," "plans," "should," "could," "would," "may," "will," "believes," "estimates," "potential," "target," or "continue" and variations or similar expressions. These statements are based upon the current expectations and beliefs of management and are subject to certain risks and uncertainties that could cause actual results to differ materially from those described in the forward- looking statements. These risks and uncertainties include, but are not limited to, risks and uncertainties discussed in the Bausch Health's most recent annual or quarterly report and detailed from time to time in Bausch Health's other filings with the Securities and Exchange Commission and the Canadian Securities Administrators, which factors are incorporated herein by reference. In addition, certain material factors and assumptions have been applied in making these forward-looking statements, including that the risks and uncertainties outlined above will not cause actual results or events to differ materially from those described in these forward-looking statements. Bausch Health believes that the material factors and assumptions reflected in these forward-looking statements are reasonable, but readers are cautioned not to place undue reliance on any of these forward-looking statements. These forward-looking statements speak only as of the date hereof. Bausch Health and Salix undertake no obligation to update any of these forward-looking statements to reflect events or circumstances after the date of this news release or to reflect actual outcomes, unless required by law. + +Dova Investor Contacts: Mark W. Hahn Chief Financial Officer mhahn@dova.com (919) 338-7936 + +Salix Investor Contact: Arthur Shannon Arthur.Shannon@bauschhealth.com 514-856-3855 877-281-6642 (toll free) + +Westwicke Partners John Woolford john.woolford@westwicke.com (443) 213-0506 + +Salix Media Contacts: Lainie Keller Lainie.Keller@bauschhealth.com 908-927-0617 + +Karen Paff + +CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. + +Source: DOVA PHARMACEUTICALS INC., 10-Q, 11/8/2018 + + + + + +Karen.Paff@salix.com 908-927-1190 + +AkaRx, Inc., a wholly owned subsidiary of Dova Pharmaceuticals, Inc., is the exclusive licensee and distributor of DOPTELET® in the United States and its territories. ©2018 DOPTELET® is a registered trademark of AkaRx, Inc. + +PM-US-DOP-0072 + +The Xifaxan 550 mg product and the Xifaxan trademark are licensed by Alfasigma S.p.A.to Salix Pharmaceuticals or its affiliates. + +SAL.0103.USA.18 + +CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. + +Source: DOVA PHARMACEUTICALS INC., 10-Q, 11/8/2018 + + + + + +Schedule 1.65 + +Third Party Agreements + +1. Stock Purchase Agreement dated March 29, 2016 (as amended) between PBM AKX Holdings, LLC and Eisai, Inc. + +2. License Agreement dated August 15, 2005 (as amended) between Astellas Pharma Inc. and AkaRx, Inc. + +CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. + +Source: DOVA PHARMACEUTICALS INC., 10-Q, 11/8/2018 \ No newline at end of file diff --git a/full_contract_txt/ELANDIAINTERNATIONALINC_04_25_2007-EX-10.21-Outsourcing Agreement.txt b/full_contract_txt/ELANDIAINTERNATIONALINC_04_25_2007-EX-10.21-Outsourcing Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..a55038e2b4fac242720d9fc56db47626aaa93632 --- /dev/null +++ b/full_contract_txt/ELANDIAINTERNATIONALINC_04_25_2007-EX-10.21-Outsourcing Agreement.txt @@ -0,0 +1,1785 @@ +Exhibit 10.21 + +Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission. + +Network Management Outsourcing Agreement + + + +Bank of South Pacific Ltd Network Management Outsourcing Agreement + + + + + + + +Datec Contact Details [*****] [*****] [*****] [*****] [*****] [*****] [*****] [*****] [*****] [*****] Commercial in Confidence Page 2 May 2004 + +Network Management Outsourcing Agreement ***** CONFIDENTIAL TREATMENT REQUESTED + + + + + +Bank Of South Pacific Ltd + +Document outline prepared by Des Kearse: Datec PNG Ltd May 2004 + + + +Document Distribution, Approval and Revision History + +Distribution + +This document has been distributed to Name Title-Company [*****] [*****] [*****] [*****] [*****] [*****] [*****] + +Approvals + +This document requires the following approvals. Signed approval forms are filed in the Quality section of the Bank of South Pacific Limited and Datec PNG LTD. Name Title + +Revision History Date of this revision: Date of Next revision: (date) Revision Number Revision Date Summary of Changes Changes marked Commercial in Confidence Page 3 May 2004 + +Network Management Outsourcing Agreement ***** CONFIDENTIAL TREATMENT REQUESTED + + + + + +Abbreviations Bank South Pacific Limited BSP + +Datec PNG Limited Datec + +Business Continuity Planning BCP + +Hardware, Maintenance, Support Services for designated Equipment Break Fix + +BSP Customer Business Manager CBM + +Disaster Recovery Plan DRP + +Financial Point of Sale FPOS + +Local Area Network LAN + +Managed Third Parties MTP + +Moves, Adds and Changes MACs + +Network Terminal Unit NTU + +Request for Service RFS + +Service Level Agreement SLA + +Single Point of Contact SPOC + +Wide Area Network WAN Commercial in Confidence Page 4 May 2004 + +Network Management Outsourcing Agreement + + + + + +Definitions + +"Agreement" means this agreement. The Network Management Outsourcing Agreement. + +"CPI" means an amount determined by reference to All Groups Indexes for Urban Areas being the figure relating to the weighted urban average for PNG contained in the Consumer Price Index published by the Papua New Guinea Bureau of Statistics each quarter in the Papua New Guinea Statistical Bulletin. + +"Help Desk" means a physical location within Datec's head office designated as an immediate contact point to provide service assistance to customers. + +"Material Breach" includes (but is not necessarily limited to) the occurrence of any or more of the following: + + (i) a breach, or series of breaches, of this agreement which causes a substantial disruption to the Services; or + + (ii) an accumulation of breaches which places unreasonable burdens on the BSP Personnel, or + + (iii) Datec commits a breach which at common law would justify termination of this agreement, or + + (iv) Datec commits multiple breaches of this agreement occurring within a 6 month period; or + + (v) Datec fails to comply with the Transition Plan. + +"Business Hours" means Monday to Friday 07.30 hours to 18.00 hours. Commercial in Confidence Page 5 May 2004 + +Network Management Outsourcing Agreement + + + + + +TABLE OF CONTENTS OVERVIEW 1.1 Introduction 10 1.2 Document Structure 10 1.3 Agreement Assumptions 10 1.4 Contract Term 10 1.5 Hours of Support 10 + +The Datec (PNG) LTD Deliverables 2.1 General Statements 11 2.2 Physical Boundaries And Demarcation Points 11 2.3 Network Operations Management 12 2.4 Systems And Technical Support 13 2.5 Network Virus Management 14 2.6 Internet Services 14 2.7 Management Tools 14 2.8 Document Management 15 2.9 Related Software Distribution 15 2.10 Technology (Equipment) Refresh Planning And Implementation Recommendations 16 2.11 Performance Management 16 2.12 Capacity Management 17 2.13 Managed Third Parties (MTP) 18 2.14 Moves, Adds And Changes (MACs) 18 2.15 Help Desk Services 19 2.16 Hardware, Software And Equipment Support 20 2.17 User Logon And Password Administration for Wide Area Network (WAN) 21 2.18 Project Services 21 2.19 Asset Management 22 2.20 Security Services 22 2.21 Business Continuity Planning (BCP) And Disaster Recovery Plan 23 2.22 Change Management 23 2.23 Backup Requirements 24 2.24 Designated Locations 24 + +Performance Standards 3.1 General Requirements 25 3.2 Measurement And Monitoring Tools 25 3.3 All Data And Supporting Information Confidential 26 + +Reports 4.1 Reporting 26 4.2 Types Of Reports 26 4.3 Structure Of Reports 27 Commercial in Confidence Page 6 May 2004 + +Network Management Outsourcing Agreement + + + + + +Personnel 5.1 Standards Of Datec Personnel 27 5.2 Replacement At BSP's Request 28 5.3 No Right To Require Termination 28 5.4 Restraints On Engagement Of BSP Personnel 28 5.5 Enforceable Restraint 28 5.6 Employer Obligations 28 5.7 Security And Occupational Health And Safety 29 + +Audits And Record Keeping 6.1 Record Keeping 29 6.2 Access To The Datec's And Subcontractors Premises And Material 29 6.3 Regular Audits For BSP Reporting 29 6.4 Assistance 29 + +Subcontractors 7.1 Approval 30 7.2 Terms 30 + +Pricing 8.1 General Principles 30 8.2 Base Fees 30 8.3 Price Inclusive 30 8.4 Pricing Criteria 31 8.5 Rebates 31 + +Pricing Adjustments 9.1 CPI Adjustments 31 9.2 Pass - Through Expenses 32 9.3 Service Level Reviews 32 + +Extraordinary Events 10.1 Extraordinary Events 32 + +Confidentiality 11.1 Confidentiality 32 Commercial in Confidence Page 7 May 2004 + +Network Management Outsourcing Agreement + + + + + +Returning Material, Data, Hardware, Software And Information 12.1 Datec's Obligations 33 12.2 BSP's Obligations 33 + +Compliance With Laws 13.1 Compliance 33 + +Termination 14.1 Termination By BSP for Cause 33 14.2 Termination For Change Of Control 33 14.3 Termination By BSP For Convenience 34 14.4 Termination By Datec For Convenience 34 14.5 Termination Fee 34 14.6 Sole Remedy 34 14.7 Mitigation 34 + +General Indemnities 15.1 Indemnity By Datec (PNG) LTD 35 15.2 Enforcement Of Indemnities 36 + +Personal Injury, Property Damage Indemnity 16.1 Datec Indemnifies BSP 36 16.2 BSP Indemnifies Datec 36 + +Risk Management 17.1 Insurance Coverage 36 17.2 Terms Of Insurance 37 + +General Conditions 18.1 Assignment By Datec 37 18.2 Assignment By BSP 37 18.3 Governing Law 37 + +Dispute Resolution 19.1 Notice 37 19.2 Escalation 37 19.3 Expert Determination Or Mediation 38 19.4 Expert Determination Criteria 38 19.5 Selection Of Expert Or Mediator 38 19.6 Procedure 38 Commercial in Confidence Page 8 May 2004 + +Network Management Outsourcing Agreement + + + + + +Disengagement 20.1 Planning 39 20.2 Implementation Of Plan 39 + +Schedules A: Equipment List - Asset Register 42 B: Service Level Agreement 45 C: Pricing Schedule 50 D: Sample Moves, Adds, and Changes Form - (MAC Form) 51 E: Sample Request for Service Form - (RFS Form) 55 Commercial in Confidence Page 9 May 2004 + +Network Management Outsourcing Agreement + + + + + +OVERVIEW + +1.1 Introduction + +This Network Management Outsourcing Agreement incorporates the terms and conditions for the provision of Network Outsourcing Services and Deliverables by Datec (PNG) LTD (Datec) to the Bank of South Pacific Limited (BSP). + +The parties further agree that they will provide best commercial efforts for the benefit of one another to ensure that neither the BSP nor Datec are disadvantaged throughout the fulfilment of this agreement. + +The parties will therefore provide full assistance to each other and agree to work proactively together to: + + • Improve and enhance the Services for the benefit of the BSP and + + • Perform their respective obligations for the benefit of the BSP 1.2 Document Structure + +This document is structured to capture the key conditions of the agreement in a logical order. It is understood that the agreement may be changed at any time by the mutual consent of both parties using the revision history and approval records contained in the Document Distribution, Approval and Revision History. 1.3 Agreement Assumptions + +The following assumptions apply to this agreement: + + • All tasks and the scope of work are covered by this agreement. + + • This agreement is for the provision of management services covering the BSP Wide Area Network (WAN) and provided by Datec. + + • The BSP existing WAN has been upgraded to the standard agreed to by Datec and the BSP as detailed in the Phase 3 Document dated 12th December 2003 entitled "Audit Review Recommendation Costs' and the Memorandum of Understanding dated 7th May 2004. + + • BSP is formally engaging Datec to be the network manager for the provision of service for the day-to-day operations of the wide area network (WAN) service. + + • BSP will retain ownership of all the assets as listed in the Asset Register and contained in Schedule A. 1.4 Contract Term + +The commencement date for this contract will be 16th June 2004. + +The initial term of the contracted agreement is 5 years from the commencement date. The BSP then have the option to renew the agreement for another 5 years subject to any restructuring of the agreement as required by the parties. + +Either party may advise the other of the impending expiry of the then current term, generally in accordance with section 14 . 1.5 Hours of Support + +The normal business hours for services under this agreement will be Monday - Friday 07.30 hours to 1800 hours. + +Twenty-Four Hour (24Hour) Help Desk will be provided Monday to Friday outside of normal business hours. Commercial in Confidence Page 10 May 2004 + +Network Management Outsourcing Agreement + + + + + +The Datec (PNG) LTD Deliverables + +2.1 General Statements + +Datec will: + + (a) provide operational support services for designated Equipment and Networks; + + (b) perform moves, adds and changes (MACs) for data services; + + (c) provide pricing and perform MACs for data services; + + (d) take over where agreed and/or manage existing third party contracts (MTP'S) as agreed with the BSP; + + (e) act as the local BSP representative in matters directly related to the BSP, in a cooperative manner, with other Managed Third Parties ("MTP") and take responsibility for the resolution of WAN related activity by acting as the vendor interface. + + (f) provide hardware maintenance support services for designated Equipment (break Fix) as defined in Schedule A, + +Datec will deliver the following project related Services: + + (a) perform Site Surveys, Stage and configure new Equipment, deliver the Equipment, install the Equipment, manage the installation of the Network Services, test, and accept the Network as required. 2.2 Physical Boundaries And Demarcation Points + +2.2.1 It is agreed that Datec will have operational responsibility on behalf of the BSP to manage the Wide Area Network (WAN), which is defined as "Hosting the HUB and PIX Firewall plus the management of the network to each and including the main branch switch, including all Financial Point of Sale (FPOS) links" owned by the BSP. + +2.2.2 BSP will have operational responsibility from the main branch switch onwards and any equipment that is connected to this. This is considered to be the Local Area Network (LAN). FPOS links are excluded. 2.2.3 Datec will be responsible for providing BSP with updated site information for existing Sites as necessary to satisfy BSP's business and operational requirements as they may change overtime. Whenever required to install a new Site on the Network, Datec will conduct a physical survey of that Site to determine Site features, implementation readiness, and specific installation needs for required standards. Site Survey information will be recorded in a database in the network management system. Site Survey information will include definitions and clarification of: + + (a) current Network Services; Commercial in Confidence Page 11 May 2004 + +Network Management Outsourcing Agreement + + + + + + (b) Telecommunications vendor point of entry; + + (c) boundaries of responsibility; + + (d) power/UPS requirements; + + (e) space requirements; + + (f) Equipment related special requirements; + + (g) cabling and wiring requirements; and + + (h) relevant environmental requirements. 2.2.3 Floor Space + +Certain hardware such as the Telikom Lease Line Circuits -NTU's (Network Terminal Units), Pix Firewall and content engine, plus and a number of routers and switches will need to be relocated to the Datec computer room. The computer room and the Datec building have been purposely built with a full disaster recovery management system in place with triple redundancies. The space that this equipment will occupy is based on the industry standards set for such equipment when placed in a computer room environment. 2.3 Network Operations Management + +Datec will: + +2.3.1 Maintain designated Equipment as listed in Schedule A, and any other equipment that may added from time to time within Papua New Guinea. + +(i) BSP will provide Datec with tine required authority to acquire spares parts in order to complete any repairs /replacement that may be required + +(ii) Datec will be responsible for the provision of any spare parts required to complete any repairs to the managed Network equipment. 2.3.2 Maintain a Single Point of Contact to interface with and coordinate problem determination and resolution with BSP's appropriate support personnel and third party service providers; 2.3.3 Perform Incident Management to closure. Datec will provide Level 1 support by: + +(a) entering problem information into a problem record; + +(b) performing incident source identification and severity impact level; + +(c) providing feedback to users; + +(d) invoking proper incident resolution resources; Commercial in Confidence Page 12 May 2004 + +Network Management Outsourcing Agreement + + + + + + (e) dispatching on site service resources, where applicable; + + (f) monitoring resolution status and document actions taken; + + (g) manage escalation or critical situation procedures; + + (h) compiling and maintain the incident resolution system; + + (i) confirming incident resolution with the end user prior to closure; + + (j) maintaining a second and third-level "contacts list" system including site access requirements for business and after hours site access; 2.3.4 Level 2 support responsibilities include: + + (a) performing problem analysis, trending and reporting; + + (b) accepting problems not completed by Level 1 support personnel; + + (c) investigating severe and recurring problems to determine the root cause, expediting problem resolution and, using historical data, to minimise the recurrence of duplicate or similar incidents; + + (d) working with vendors to resolve problems; + + (e) contacting other support groups and organisations; + + (f) interfacing with other systems, data networks and operating system environment personnel; + + (g) escalating delays in problem resolution; and + + (h) focusing on making fixes available to the first-level support team, to decrease resolution times. + +2.3.5 provide problem reports to BSP on a periodic basis, including required information on problems, owner, location, Service Level Agreement (SLA) commitments achieved and status of any problems, including their impact on the required service level. 2.4 Systems And Technical Support + +Datec Will: + + (a) be responsible for the installation support, management and control of the BSP WAN environment in Papua New Guinea. + + (b) be responsible for testing, certifying, configuring and deploying upgrades to any installed Software to the latest version available from the Software vendor as agreed with the BSP + + (c) work with BSP Personnel to communicate the effect and impact and compatibility of any changes to the Hardware and Software managed to ensure minimal business impact of such changes; Commercial in Confidence Page 13 May 2004 + +Network Management Outsourcing Agreement + + + + + + (d) advise BSP of new technologies that may provide BSP business benefit or improvements in efficiency. The BSP will assess benefits and risks and work with Datec to include on the approved lists as appropriate; + + (e) ensure that Datec staff are trained and skilled on all current and new technologies for the managed Hardware and Software. + + (f) centrally monitor performance of infrastructure components, where possible, to identify performance degradation, capacity and Hardware/Software problems and respond to identified performance tuning, problems and capacity needs; + + (g) tune infrastructure components to ensure optimum operating performance to meet Service Levels. + + (h) provide assistance and support to BSP Personnel as required; + + + +(i) provide in-depth (Level 1 and 2) technical support for operating systems, standard software (for Software problems or questions, defect and non-defect related). It includes problem tracking, problem source identification, problem impact (severity) determination, bypass and recovery support, problem resolution, management reporting and trend analysis and interfacing with other Suppliers on behalf of the BSP; + + (j) provide support, in accordance with the BSP, manufacturers and vendors procedures; + + (k) install, set up and maintain configurations, to deliver the required Services; + + (l) coordinate and recommend system upgrades to BSP, and work with them in recommending proper hardware configurations and upgrades based on performance and capacity planning guidelines; + + (m) schedule and coordinate testing of network systems Software changes with the BSP 2.5 Network Virus Management -WAN + +Datec will assist in detecting, fire-walling and blocking propagation of network viruses but are not responsible for virus detection or outbreaks that occur within the banks local area network. Datec will assist the BSP when requested to handle any virus issues that fall out side the scope of this agreement as per the terms of this agreement. 2.6 Internet Services + +Datec will provide in accordance with BSP requirements Internet Services and follow on support as currently provided to the BSP under Datec's customer ISP services policy. 2.7 Management Tools + +Datec will: + +2.7.1 Install, configure and test the selected management tools used to support problem management (e.g. to generate automatic alerts for critical outages) Commercial in Confidence Page 14 May 2004 + +Network Management Outsourcing Agreement + + + + + +2.7.2 Install, configure and test the selected management tools used to support performance and capacity management (e.g defining alert thresholds and performing notification) 2.8 Document Management + +Datec will: + +2.8.1 in a mutually agreed format provide documentation, configuration details or other data necessary for the BSP to perform their various business activities and functions; + +2.8.2 provide such information that may be necessary to enable the BSP to develop Strategy and Architecture policies and guidelines, undertake benchmarking of Services provided and perform applications development functions. 2.9 Related Software Distribution + +Datec will: + +2.9.1 upon request from the BSP, distribute and implement software upgrades, software patches to the distributed network equipment as necessary to meet BSP's business requirements + +2.9.2 ensure that software distribution windows are managed to ensure that minimal distribution impacts business operations and performance unless otherwise agreed with the BSP + +2.9.3 ensure that the software installed are appropriately licensed; + +2.9.4 ensure that all software distributions are reconciled to ensure completion; + +2.9.5 ensure that all software distributions are virus free; + +2.9.6 assist BSP End Users in performing any such upgrades that should be required. Such assistance will be provided via a Help Desk and may result in the dispatch of a support person to the End User location + +2.9.7 inform BSP and take corrective action, as appropriate, for failed software distributions and problems resulting from software distribution. + +2.9.8 take corrective action to overcome failed or problematic software or data distribution. Datec will fallback to previous (original) release of the affected software. + +2.9.9 de-install software, as directed by the BSP, and remove it and any associated documentation to an area designated by the BSP; and + +2.9.10provide verification of each completed software distribution, installation or de-installation, and update the asset management and software license management system(s) for that Software Supplier. Commercial in Confidence Page 15 May 2004 + +Network Management Outsourcing Agreement + + + + + +2.10 Technology (Equipment) Refresh Planning And Implementation + +Datec will be responsible for liaison with managed third parties (MTP's) in the procurement and management of installations, and deletion of and Tracking Network Services within the Network under instruction from BSP. Such responsibilities will include: + + (a) Management of the installation of Network Services; + + (b) Procurement of upgrades, changes or deletion of Network Services, as appropriate to accommodate BSP's changing requirements; + + (c) interfacing with the appropriate Network Services providers for problems related to Network Services; and + + (d) tracking relevant Network Service information . + +Datec will be responsible for supporting, administering, managing and performing provisioning of Equipment and Equipment Software comprising the Network. Unless specifically exempted, the equipment is to be supplied by Datec and invoiced for payment according to Datec's normal terms of trade. + +Datec will: + + (a) install Network Equipment and Equipment Software and monitor the fulfilment of each order for accuracy; + + (b) store, deliver and unpack all items of Equipment and remove and dispose of all packaging; + + (c) configure, install and test all Equipment and Equipment Software and transfer data and Equipment Software configurations as required prior to commissioning in the production environment + + (d) provide connectivity for the Equipment and Equipment Software at, or prior to, the time of installation; + + (e) remove BSP Equipment Software from displaced or retired Equipment to the extent required by BSP's security procedures; + + (f) remove displaced or retired Equipment and Equipment Software; and + + (g) ensure BSP is aware of all needs to promptly disconnect and end Network Services and remove related Equipment no longer needed by BSP upon termination of Services at a Site. Datec agrees to remove the applicable Equipment. 2.11 Performance Management + +Datec will: + +2.11.1monitor, measure, and report on the performance of the WAN environment; + +2.11.2 enhance and continuously improve its performance of the Services; Commercial in Confidence Page 16 May 2004 + +Network Management Outsourcing Agreement + + + + + +2.11.3 identify and recommend product and enhancement opportunities for improved performance; + +2.11.4monitor, measure, analyse and report actual systems performance; + +2.11.5 recommend changes to the Applications Software for BSP approval to improve system performance; + +2.11.6 investigate and correct reported or observed system performance degradation or malfunctions and record for each the downtime, hardware or Software involved, nature of the problem, causes, nature of the fix and product provider. Such fixes will be completed within agreed service windows; + +2.11.7monitor and report on capacity inadequacies; 2.12 Capacity Management + +Datec will: + + (a) provide additional capacity as required to meet moves, adds and change (MAC) requests; + + (b) provide capacity to meet project requirements as required in conjunction with the BSP + + (c) monitor WAN infrastructure capacity and plan and implement sufficient infrastructure capacity as agreed with the BSP to meet BSP requirements and applicable Service Levels. + + (d) on an ongoing basis, manage the capacity of the environment to meet its obligations under the Service Levels and respond to BSP's operational requirements as they evolve over time; + + (e) monitor and report on Equipment capacity utilisation as it relates to established capacity thresholds, on a continuing basis and upon request by the BSP + + (f) monitor and measure the physical capacity and performance of the environment and report to the BSP when requested; + + (g) upgrade, remove, or add capacity to the environment as necessary to meet BSP's requirements; and + + (h) participate in joint capacity planning reviews with the BSP + +Should it be determined that extra capacity is required this cost will be meet by the BSP working with Datec. Commercial in Confidence Page 17 May 2004 + +Network Management Outsourcing Agreement + + + + + +2.13 Managed Third Parties (MTP) + +In accordance with the Agreement, Datec will co-ordinate Managed Third Parties ("MTP) where agreed with the BSP. + +Datec will: + + (a) manage Third Parties, including monitoring operational day-to-day Network Service delivery, monitoring performance, escalating events for resolution, and maintaining technical support relationships; + + (b) work with BSP to establish and manage new and existing contractual relationships between BSP and MTP as needed to provide the Services; + + (c) escalate MTP performance failures to MTP management as necessary to achieve timely resolution as per the SLA; + + (d) monitor and Manage the MTP's efforts to remedy a failure; + + (e) communicate to designated personnel the status of MTP's efforts to remedy a failure. 2.14 Moves, Adds And Changes (MACs) + +As a component of the base fee Datec will perform any required MACs that fall within the scope of work contained in this agreement. + +Datec will also be required to provide MACs to the BSP with pricing and costs for tasks that fall outside the agreement such as project management or the acquisition of new equipment or upgrades but not just restricted to these items. + +On approval of any MAC Datec will be required to assist in the supervision, management and implementation of changes related to the Network and the Services as necessary to satisfy BSP's business and operational requirements. + +Datec will: + + (a) receive, log and track the completion of service requests and provide related information to the IBM Help Desk and billing system; + + (b) schedule the execution of the MAC; + + (c) for MACs, dispatch and manage the performance of appropriate technicians; + + (d) coordinate and communicate with designated personnel concerning scheduling and requirements, so as to eliminate the business impact on end users; + + (e) provide the necessary technical support to complete the MAC; + + (f) physically move Equipment, as required, and install any necessary in-scope cabling where appropriate; + + (g) notify the BSP contact person of completion of the MAC; Commercial in Confidence Page 18 May 2004 + +Network Management Outsourcing Agreement + + + + + + (h) confirm correct implementation of the MAC with the designated personnel and the BSP Help Desk, as appropriate; + + (i) track the completion of the MAC in a management system by updating relevant inventory and configuration information. 2.15 Help Desk Services + +Datec will + +2.15.1 + +provide a single-point-of-contact (SPOC) Help Desk. The Help Desk will support and have access to, and maintain, sufficient information that will facilitate knowledge of the BSP's business and technology environment; + +2.15.2 + +provide one primary Help Desk contact phone number and enable contact fax, e-mail and browser for all technology requests. This includes, but is not limited to, communication faults, Hardware and Software failures, and general enquiries by the BSP. + +2.15.3 record, analyse and report on a regular basis, as and when required by the BSP, on calls received by the Help Desk, including details of: + + • call volumes and duration; + + • problem trends; + + • call abandon rate and wait times; + + • Level 1 resolution rate; + + • problem resolution time; + + • provide Level 1 support for any end user IT problem; + + • resolve problems at the first level, to decrease resolution times; + +Provide Help Desk support, which includes: + + • recording all problem calls, inquiries and requests for service; + + • gathering the end user information; + + • obtaining resource status; + + • accessing on-line information; + + • responding to end user requests with accurate and appropriate information; + + • handling routine Hardware, Software, and usage problems; Commercial in Confidence Page 19 May 2004 + +Network Management Outsourcing Agreement + + + + + + • transferring calls to the appropriate support group, although coordination and ownership of the problem and escalation management remains with the Level 1 support; + + • opening the problem record and providing the end users with a unique problem identifier (e.g. number); + + • informing the end user of the status; + + • calling the end user for further information; + + • closing the call, with the end user's agreement and ensuring end user survey is completed; + + • escalating delays in problem resolution; + + • notify users of system unavailability (scheduled and non-scheduled); + + • report all suspected viruses to the BSP in a timely manner; and + + • assist the BSP in removing viruses 2.16 Hardware, Software And Equipment Support + +Datec will: + + (a) process warranty claims, as applicable; + + (b) coordinate and schedule maintenance activities with the BSP and third parties; + + (c) ensure that maintenance personnel follow documented recovery procedures; + + (d) maintain accurate documentation on the current location and status of Hardware and Equipment under repair; + + (e) update the problem management and asset management systems with relevant maintenance information; + + (f) diagnose and resolve complex network, operational and Software problems; + + (g) provide trouble shooting and problem resolution for all managed Hardware, Software, and Equipment; + + (h) provide Software and Equipment support including trouble shooting for problem determination; + + (i) resolve problems with long term fix or if problem cannot be resolved within an acceptable time frame, an alternative solution must be available in order to get the BSP working with the long term fix implemented at a later time; + + (j) identify and resolve user Hardware and Equipment problems including the management and execution of any Service Levels agreed in third party vendor maintenance agreements in place currently or in the future;d Commercial in Confidence Page 20 May 2004 + +Network Management Outsourcing Agreement + + + + + + (k) provide end user support and problem resolution for Software; + + (l) coordinate with other parties as necessary to resolve Hardware and Equipment problems; + + (m) order new Hardware and Equipment and schedule installation; + + (n) interface with Hardware and Equipment vendors for planning and problem resolution. 2.17 User Logon And Password Administration for Wide Area Network (WAN) + +2.17.1Datec will provide a central point for the generation of new user logons and passwords as agreed with the BSP. + +2.17.2Datec will reset passwords and perform logon ID administration in accordance with BSP's security guidelines. + +2.17.3User logon and password administration include providing access and administering passwords for firewalls and internet requirements. 2.18 Project Services + +Datec will provide project services as agreed with the BSP that fall outside the scope of this document. + +2.18.1Datec will execute Projects according to the following guidelines: All new projects, new Requests for Service (RFS), and work considered out- of-scope of day-to-day operations will be treated as competitive + +2.18.2BSP will ask Datec for a quote based on a Scope of Work + +2.18.3Datec is to provide a relevant quote to the BSP Customer Business Manager (CBM) + +2.18.4Quotes will be approved by the BSP CBM, who will then notify Datec. + +BSP Customer Business Manager (CBM) contact details: + +[*****] + +[*****] + +[*****] + +[*****] + +[*****] Commercial in Confidence Page 21 May 2004 + +Network Management Outsourcing Agreement ***** CONFIDENTIAL TREATMENT REQUESTED + + + + + +2.19 Asset Management + + 2.19.1 Datec will assist the BSP in the ongoing management of an inventory of Equipment, Equipment Software and Network Services comprising the Network. Such inventory will record, Site locations and Equipment configuration (including hardware components and operating system software) as applicable to the Equipment, Equipment Software and Network Services in an agreed format. + + 2.19.2 Datec will provide updates to the inventory that result from other processes including performance management, fault management, configuration and capacity planning. Updates from these processes will be tracked through work order activity. Datec will provide BSP with changes to the inventory in an agreed format. + +Datec will: + + (a) within 30 days from each Site Acceptance Date, provide the necessary information to populate the inventory management database with information regarding that Site; + + (b) provide updated inventory data on a weekly basis as a result of performance management, fault management, and MAC activity; and + + (c) manage an inventory of spares made available for the purpose of facilitating the maintenance of critical Service components. 2.20 Security Services + +As set forth below, Datec will manage physical security for the Network as necessary to satisfy BSP's business and operational requirements. Datec will be responsive to BSP changes in its physical Network security requirements as they may change over time. Datec will comply with relevant BSP information security policies, and government regulations. With respect to this responsibility, + +Datec will: + + 2.20.1 on an ongoing basis, identify Datec subcontractors and Personnel who are to be granted access to specific operations or BSP facilities related to the Services; + + 2.20.2 follow a standard equivalent to the BSP physical security standard for the Network. If Datec security standards provide a greater degree of security, Datec will follow Datec standards for the Network; + + 2.20.3 follow all security procedures in effect at the Installation Sites. BSP is responsible for site security at the Sites; Commercial in Confidence Page 22 May 2004 + +Network Management Outsourcing Agreement + + + + + + 2.20.4 immediately report breaches of security evident during site visits to BSP. Such breaches are to include all unauthorised attempts to use or obtain physical access to BSP Network resources and information; + + 2.20.5 for facilities under BSP's control, comply with BSP's physical security standards of which Datec receives reasonable advance written notice. 2.21 Business Continuity Planning (BCP) And Disaster Recovery Plan (DRP) + +Datec will adhere to the BSP's DRP policy and procedures and will assist wherever possible to further enhance these within the scope of this agreement. 2.22 Change Management + +Change management is both a communications process and a methodology that seeks to introduce change into any environment without adversely impacting service delivery and commitments and will usually be associated with a MAC document. + +Datec will perform the change management functions below: + + (a) accept and enter authorised change requests into an information system for the purpose of tracking changes to the environment in accordance with the BSP processes, procedures and methodologies; (b) for each change affecting the environment the Supplier will: + + (i) assess the necessity and impact of the proposed change on performance, connectivity and overall operation; + + (ii) in conjunction with BSP, develop acceptance test criteria and test the change; + + (iii) work with BSP to resolve acceptance test issues; + + (iv) schedule and manage testing and implementation of the change, including communication to and coordination with other affected functions in accordance with the change management procedures; + + (v) with BSP assistance, verify the successful implementation of the change. Notify the change requestor and customers of the outcomes following the change implementation; + + (vi) ensure diligence is applied in deciding upon time of day and day of week for implementation of change so that provision of service is continued; + + (vii) ensure all potential and/or actual business impacts expected as a consequence of the implementation of change are communicated to and understood by the BSP + + (viii) ensure potential conflicts between changes are identified and resolved in advance of implementation; and Commercial in Confidence Page 23 May 2004 + +Network Management Outsourcing Agreement + + + + + + (ix) ensure changes are bundled to ensure Services are not subject to more outages than are sensible or necessary. 2.23 Backup Requirements + +Datec Will: + + (a) ensure that network configurations and O/S are fully backed up so that they can be reinstalled without delay in an emergency. + + (b) assist with the installation and decommissioning of equipment and associated hardware and software; + + (c) assist with the facilitation of scheduled hardware maintenance; + + (d) assist with the physical placement and movement of hardware, cables, connectors and installations; + + (e) maintain and distribute configuration diagrams and associated documentation; + + (f) assist with testing the recovery procedures required to re-establish, in the event of a failure, the functionality of systems included in the agreement, in compliance with BSP's requirements; + + (g) prepare, test and document backup and recovery procedures for both Datec and BSP + + (h) maintain the physical environment, and all equipment, in a safe and clean manner and in accordance with equipment vendors specifications. + + (i) manage physical site security in accordance with Datec and BSP security policies; + + (j) implement recovery processes and procedures, as required to ensure timely recovery following any environmental failure; + + (k) ensure regular testing of Datec's environmental components (eg. fire alarms, generators, UPS, etc); and + + (l) keep all equipment in good operating condition in accordance with equipment specifications, and such other performance criteria as contained in this Agreement so as to be able to effectively perform to specification. 2.24 Designated Locations + +Datec will manage the BSP WAN operations from its Corporate Head Office located in Waigani Drive, Port Moresby. + +In order for this to occur certain routers/switches and associated network equipment will be located at Datec Commercial in Confidence Page 24 May 2004 + +Network Management Outsourcing Agreement + + + + + +The Current Router and Switch Locations that will be covered by this agreement are: [*****] [*****] [*****] [*****] [*****] [*****] [*****] [*****] [*****] [*****] [*****] [*****] [*****] [*****] [*****] + +Performance Standards + +3.1 General Requirements + +Throughout the term of the agreement Datec will: + + (a) meet or exceed the Service Levels identified within the service level agreement. + + (b) comply with industry standards; and + + (c) Datec will also maintain the BSP quality assurance procedures where applicable and agreed between the parties. 3.2 Measurement And Monitoring Tools + +Datec will: + + (a) perform all Service Level reporting, in a manner acceptable to the BSP Commercial in Confidence Page 25 May 2004 + +Network Management Outsourcing Agreement ***** CONFIDENTIAL TREATMENT REQUESTED + + + + + + (b) implement further automated measurement, monitoring tools and procedures as advised by the BSP to measure and report Datec's performance on a monthly basis should the existing tools be inadequate. The acquisition of new tools will be subject to a MAC and approval by the BSP for their acceptance of costs and purchase. 3.3 All Data And Supporting Information Confidential + +Detailed supporting information and reports relating to service levels and performance will be confidential between the two parties. + +Both parties will treat the terms of this agreement and any supporting documentation, such as emails, facsimiles and the like as confidential and may only disclose it: + + (a) to officers and employees who have signed a confidentiality agreement that imposes on that person confidentiality obligations and who: + + (i) have a need to know (and only to the extent that each has a need to know); and + + (ii) have been directed and have agreed to keep confidential the Confidential Information on terms consistent with this Statement of Work; or + + (b) to the extent, and to the persons, required by law. + +Reports + +4.1 Reporting + +Datec is to provide a range of reports and/or data required to develop such reports in an agreed format to the BSP or its nominee on daily, weekly, monthly and ad hoc basis as requested by BSP. + +Datec will undertake the following functions: + + 4.1.1 respond to user report enquiries + + 4.1.2 follow up errors with areas providing the source data + + 4.1.3 manage reporting platform 4.2 Types Of Reports + +Datec will make available to the BSP + + 4.2.1 the reports identified in this document and the Service Level Agreement Commercial in Confidence Page 26 May 2004 + +Network Management Outsourcing Agreement + + + + + + 4.2.2 the reports and documents which were provided by the BSP prior to the Commencement Date + + 4.2.3 each month such reports as are necessary to ensure and validate the Supplier's performance and commitments made under the Service Level Agreement and + + 4.2.4 such other reports as may be specified by the BSP from time to time. 4.3 Structure Of Reports + +Datec must structure performance reporting so that it can be readily communicated to the management or end-user, business areas and business system owners in a mutually agreed format. + +Personnel + +5.1 Standards Of Datec Personnel + +Datec will: + + (a) use an adequate number of Personnel to supply the Services outlined in this agreement + + (b) ensure all Personnel who perform Services are properly educated, trained and fully qualified for the Services they perform; + + (c) ensure that all Personnel comply with: + + (i) any protocols, codes of conduct or procedures specified by the BSP and advised by from time to time + + (ii) ensure any obligations under this agreement in respect of Confidential Information, Personal Information, data security and material + + (iii) all Laws; and + + (iv) any policies existing or introduced from time to time, including policies regarding occupational health and safety requirements, building access and physical security; (d) comply with any authorisation procedures specified in this agreement before: + + (i) assigning any person to supply Services; or + + (ii) permitting that person to enter any premises of Datec or BSP, to handle any material or become aware of any Confidential Information or Personal Information; and + + (iii) ensure that only Datec Personnel who are currently authorised are involved in supplying the Services or given access to any BSP Material, Confidential Information or Personal Information. Commercial in Confidence Page 27 May 2004 + +Network Management Outsourcing Agreement + + + + + +5.2 Replacement At BSP's Request + +BSP may by notice to Datec, require Datec to replace any of the Supplier Personnel for the reasons stated in the notice and: + + i. in the case of breaches of security or confidentiality requirements, Datec must immediately replace that person with another person of suitable ability and qualifications; or + + + +ii. in any other case, after receipt of that notice, Datec will have 48 hours in which to investigate the matters stated in the notice, discuss its findings with the BSP and resolve any problems with the person. If, following that period the BSP requests replacement of the person, Datec must replace that person, within 60 days with another person of suitable ability and qualifications. 5.3 No Right To Require Termination + +BSP does not have the right to require Datec to terminate any person's employment or contract with Datec. It is only intended to give the BSP the right to require that Datec discontinue using a particular person in the performance of Services for the BSP. 5.4 Restraints On Engagement Of Datec - BSP Personnel + +From the Commencement Date of the agreement both parties must ensure that they do not without mutual written consent solicit, entice or attempt to entice away any employee from either organisation during the Term and for 1 year after the termination date. 5.5 Enforceable Restraint + +Clause 5.5 will not in any way restrict either organisation from hiring any person who has responded to any published advertisement of position or who has otherwise approached either organisation for employment unsolicited or its agents or Related Corporations. 5.6 Employer Obligations + +Datec must ensure that it, and each of the approved subcontractors and employee's complies with all obligations relating to payment of tax instalment deduction, deductions from prescribed payments, fringe benefits tax, training guarantee levy, superannuation, payroll tax and any other taxes or levies imposed upon an employer which arise in respect of any amounts paid to the Datec under this agreement and that it complies with all requirements imposed on an employer under the relevant legislation to keep records, lodge returns and provide information in relation to such obligations. Commercial in Confidence Page 28 May 2004 + +Network Management Outsourcing Agreement + + + + + +5.7 Security And Occupational Health And Safety + +Datec must at all times comply with and ensure that its personnel and approved subcontractors comply with the laws and regulations on occupational health and safety. + +Audits And Record Keeping + +6.1 Record Keeping + +Datec must keep, and must require subcontractors to keep, adequate accounts, documents and records to the extent required by the BSP as advised and in sufficient detail to enable Datec's compliance with this agreement and the accuracy of its invoices to be determined. 6.2 Access To Datec's And Subcontractors Premises And Material + +Datec must give, and must ensure that its Subcontractors give, BSP and their Personnel, (including internal and external auditors and advisers) full access at all reasonable times and on reasonable notice to: + + (a) any premises at which or from which Datec supplies the Services + + (b) the Supplier Personnel; and + + (c) equipment, Software systems, data, accounts, documents and records relating to the Services provided both by Datec and by its Subcontractors, but excluding information relating to the Datec's internal costs and margins for the Services, + +in order to enable the BSP to audit Datec's compliance with this agreement and for operational risk reasons. 6.3 Regular Audits For BSP Reporting + +The BSP itself may also audit the Supplier's (and its subcontractors) records relevant to the supply of the Services for any reasonable purpose including processes, procedures and performance for operational risk assessment, regulatory requirements and annual reporting. 6.4 Assistance + +For the purpose of complying with this clause, Datec must promptly and efficiently give the BSP and their Personnel any assistance they reasonably require, including, if requested, installing and operating audit software. BSP and their Personnel will comply with Datec's reasonable security requirements. Commercial in Confidence Page 29 May 2004 + +Network Management Outsourcing Agreement + + + + + +Subcontractors + +Datec may only subcontract its obligations under this agreement as follows: 7.1 Approval + +Datec must obtain the BSP's approval for any subcontracts but may do so without its consent if: + + (a) it is in the ordinary course of business + + (b) Datec supplies BSP with advance notice + + (c) it does not result in a material change in the way Datec conducts its business + + (d) it does not adversely affect the BSP 7.2 Terms + +The terms of any subcontract must be consistent with this agreement, unless the BSP agrees otherwise, including: + + i. confidentiality and intellectual property obligations; + + ii. BSP's approval rights (which must apply directly to the subcontractor); + + iii. compliance with BSP's policies and directions; + + iv. indemnities that protect BSP + + v. termination and disengagement rights; and + + vi. key personnel. + +Pricing + +8.1 General Principles + +The BSP will pay Datec a base fee plus any other fees and charges that may be agreed too during the term of the agreement but excluding, travel, freight and tax related matters. + +BSP will be responsible for any freight and or related travel costs incurred by Datec in the execution of the services as defined in this agreement. Prior to undertaking or committing to any freight and or related travel costs Datec must first obtain approval from BSP. 8.2 Base Fee + +The base fee includes all things necessary to manage the WAN management services as provided for by the terms of this agreement. 8.3 Price Inclusive + +The base fee includes all costs, expenses, taxes (except for GST/VAT), duties, levies or imposts relating to the services and Datec's performance of its obligations under this agreement. Commercial in Confidence Page 30 May 2004 + +Network Management Outsourcing Agreement + + + + + +8.4 Pricing Criteria + +Each month Datec will provide the BSP with an invoice including: + + (a) 1/12 of the Base Charge for the service + + (b) pass through expenses for the month + + (c) the annual Base Charge/s once established may still be adjusted from time to time by agreement between the parties. 8.5 Rebates + + 1. Should Datec not achieve the agreed Service Levels contained in the Service Level Agreement as detailed in Schedule B, a monthly rebate will be applied as per the Rebate Table in Pricing Schedule C, + + 2. Rebates will apply to Severity Levels One (1) and Two (2) during the agreed business hours detailed in Schedule B. + + 3. The maximum rebate in any given month will be 50% of the monthly base fee. The rebate calculation will be completed before the 15th Day of the following month for the preceding month together with supporting monthly reports and provided to the BSP. + + 4. For the purposes of determining SLA achievement the "Time to Respond" measurement will be used. + +The following definition will apply: + +"Time to Respond" means, the time between the problem being logged and the customer being given a job number and the technician beginning the job" As this applies to Severity Levels One (1) and Two (2) this will also include the informing of Datec's senior operational management. + +Pricing Adjustments + +9.1 CPI Adjustments + +No later than 30 days after the end of each contract year the Base Fee must be increased or decreased in accordance with the increase or decrease in the CPI and such increases or decreases will be calculated by using the following formula: + +R2 = R1 x New CPI Old CPI + +Where: + +R2 = the Base Fee payable for the relevant 12 month period of the Term + +R1 = the Base Fee specified the previous year. + +New CPI means the last published CPI for a complete quarter ending prior to the date of commencement of the relevant 12-month period of the term. + +Old CPI means the last published CPI for a complete quarter ending prior to the date of this agreement. Commercial in Confidence Page 31 May 2004 + +Network Management Outsourcing Agreement + + + + + +Should the CPI increase exceed more than 10% in any given year the maximum amount applied will be 10% or which ever is lower. 9.2 Pass - Through Expenses + +These are expenses to be paid directly by the BSP with no margin or mark up added by Datec. Datec must provide the BSP with all information and material reasonably required to validate a pass through expense. 9.3 Service Level Reviews + +The BSP may conduct a service level review at least once per 12-month period or as required with the agreement of Datec. + +At least annually the parties will review the Service Levels to determine whether they still reflect the requirements of the BSP. Should the BSP decide that they do not, the BSP may: + + (a) conduct benchmarking on the relevant Services to establish appropriate service levels + + (b) require Datec to propose a means of improving performance. + +Extraordinary Events + +10.1 Extraordinary Events + +The BSP may notify Datec that an Extraordinary Event has occurred or is likely to occur and provide details of such Extraordinary Event. + +On receipt of such notice, Datec must promptly determine and report to the BSP the effect on: + + (a) the level of resources required to provide the Services ('Required Resources'); and + + (b) the Fees as a result of the Extraordinary Event. + +The parties must use their efforts to agree on the level of required resources and, having agreed, will adjust the agreement accordingly to reflect this change. This will include the adjustment of the base fee and a suitable implementation plan. + +Confidentiality + +11.1 Confidentiality + +All information exchanged between the parties under this agreement or during any negotiations undertaken at any time in respect of this agreement is confidential to those parties and must not be disclosed to any persons except: + + (a) as required by any law of the state of Papua New Guinea + + (b) to legal advisers, auditors, accountants and other consultants of either party requiring information for the purpose of this agreement + + (c) to directors and shareholders of the respective parties + + (d) with the consent of the party that supplied the information Commercial in Confidence Page 32 May 2004 + +Network Management Outsourcing Agreement + + + + + + (e) if the information is generally and publicly available other than as a result of the breach of confidence by the person receiving the information. + +Returning Material, Data, Hardware, Software And Information + +12.1 Datec's Obligations + +Upon request from the BSP or at the end of the disengagement period Datec must: + + (a) promptly return all BSP data, physical and written records, hardware, software or any other medium whatsoever + + (b) if requested by the BSP destroy any relevant information and certify in writing that it has done so. 12.2 BSP's Obligations + +At the end of the disengagement period the BSP will transfer any material, data, hardware, software and information from Datec to its chosen new location. Datec will assist where possible. The disengagement period will be as determined under Section 14 (Termination) of this agreement. + +Compliance With Laws + +13.1 Compliance + +This agreement will be constructed in accordance with the laws of Papua New Guinea and the parties submit to the non-exclusive jurisdiction of the National Court of Justice of Papua New Guinea. + +Termination + +14.1 Termination By BSP for Cause + +If so advised the BSP may terminate this agreement by giving written notice to Datec if: + + (a) Datec materially breaches the agreement and the breach ("Material Breach") cannot be, or is not, rectified within 30 days after a notice from the BSP, + + (b) an Insolvency Event occurs in relation to Datec + + (c) any other event specified in this agreement as giving rise to a right for the BSP to terminate immediately occurs; or + + (d) Datec commits a series of breaches that together constitute a Material Breach. 14.2 Termination For Change Of Control + +The BSP may after giving due consideration to all circumstances and not acting unreasonably, terminate this agreement by giving written notice to Datec if there is a change of control or major shareholding of Datec. Commercial in Confidence Page 33 May 2004 + +Network Management Outsourcing Agreement + + + + + +In the case of the BSP requiring termination under this clause, the BSP will use its best commercial efforts to ensure that it gives due consideration to all the circumstances and does not act unreasonably in demanding such termination. + +If the BSP gives such a notice of termination, then: + + (a) if the change of control: + + (i) results in a competitor of the BSP controlling Datec or + + (ii) is reasonably likely in the BSP's opinion, to have a detrimental effect on Datec's ability to provide the Services in accordance with the agreement, + +then the BSP will pay Datec according to Section 14 - "Termination" of this agreement and the Termination Table in Schedule C. 14.3 Termination By BSP For Convenience + +The BSP may terminate the whole or any part of this agreement for convenience at any time by giving Datec at least 6 months prior written notice. 14.4 Termination By Datec For Convenience + +Datec may terminate the whole or any part of this agreement for convenience at any time by giving the BSP at least 6 months prior written notice. 14.5 Termination Fee + +If the BSP terminates under clause 14.3 (Termination by BSP for Convenience) the BSP will pay Datec the Termination Fee calculated in accordance with Attachment C (Pricing). 14.6 Sole Remedy + +The amount payable by the BSP under clause 14.3 (Termination Fee) will be Datec's sole remedy for the BSP terminating for convenience. 14.7 Mitigation + +Datec must mitigate the cost of termination, including by using its best efforts to: + + i. redeploy personnel used to provide the Services + + ii. terminate contractors in accordance with the terms of their contracts so as to avoid any liability to pay compensation for early termination; and + + iii. redeploy any equipment used to provide the Services that is not acquired by the BSP Commercial in Confidence Page 34 May 2004 + +Network Management Outsourcing Agreement + + + + + +General Indemnities + +15.1 Indemnity By Datec PNG LTD + +Datec must indemnify, defend and hold harmless the BSP, their employees, agents, successors and assigns, from any and all Damages arising from, in connection with, or based on allegations of, any of the following: + + (a) Datec's breach of; + + (i) any representation and warranty specified in this agreement or + + (ii) its obligations with respect to BSP Confidential Information + + (b) any claim, demand, proceeding or other action ('Claim') arising out of or related to occurrences Datec is required to insure against (c) any Claim arising out of or in any way relating to: + + (i) Datec, + + (A) engaging a contractor; or + + (B) employing or terminating the employment of any person,; + + (ii) any fraudulent act or omission, or any fraudulent misrepresentation or deceit by Datec, its Personnel or subcontractors in connection with this agreement; or + + (iii) a decision by the BSP not to approve a subcontractor or to revoke its approval for an Approved Subcontractor under the agreement + + (d) any Claim whether or not the BSP is liable at law for the amount the subject of the Claim, which maybe made against the BSP by, or on behalf of: + + (i) the Tax Office in respect of any payroll tax or penalties that the office may seek to recover from the BSP in respect of any amounts paid to Datec under this agreement + + (ii) any revenue raising authority including the Commissioner of Taxation in respect of any other payment, liability, or penalty that the authority may seek to recover from the BSP in respect of any amounts paid to Datec under this agreement; (e) any Claim arising from: + + (i) the Acquired Assets or + + (ii) managed Third Party Agreements to which Datec is or becomes a party as a consequence of the operation of this agreement; and Commercial in Confidence Page 35 May 2004 + +Network Management Outsourcing Agreement + + + + + + (iii) any Claim arising from any breach by Datec of its obligations under this agreement. 15.2 Enforcement Of Indemnities + +It is not necessary for a party to incur expense or make payment before enforcing a right of indemnity conferred by this agreement. + +Personal Injury, Property Damage Indemnity + +16.1 Datec Indemnifies BSP + +Datec indemnifies the BSP against all Damages that the company may sustain or incur (including those sustained or incurred as a result of a claim by a third party against the BSP as a result of: + + (a) any injury to or death of any person arising out of or in any way relating to this agreement; or + + (b) damage to any real or tangible property, + +caused by an act or omission of Datec or its personnel 16.2 BSP Indemnifies Datec + +The BSP indemnifies Datec against all Damages that Datec may sustain or incur (including those sustained or incurred as a result of a claim by a third party against Datec or any related company as a result of: + + (a) any injury to or death of any person arising out of or in any way relating to this agreement; or + + (b) damage to any real or tangible property, + +caused by an act or omission of the BSP or its personnel. + +Risk Management + +17.1 Insurance Coverage + +The BSP will provide full comprehensive replacement insurance cover for all assets contained in the Asset Register (Schedule A). Commercial in Confidence Page 36 May 2004 + +Network Management Outsourcing Agreement + + + + + +17.2 Terms Of Insurance + +The BSP will provide documentary evidence to Datec that such insurance is in place for the term of the agreement. + +Datec will not be held liable for service level deficiencies related to insurance issues or an Act of God. Both parties agree to work together to resolve any such issues. + +General Conditions + +18.1 Assignment By Datec + +Datec must not assign this agreement or any right under this agreement unless Datec + + (a) is not in breach of this agreement; + + (b) obtains the prior written consent of the BSP + + (c) ensures that the assignee agrees to be bound by all of the Datec's obligations under this agreement; and + + (d) acknowledges that it remains bound by this agreement 18.2 Assignment By BSP + +BSP may: + + (a) assign all or part of this agreement to any person as part of a restructure; and + + (b) assign or novate all or part of the rights and obligations under this agreement to any of the BSP's Related Company's as part of a re- organisation of its business. 18.3 Governing Law + +This agreement will be construed in accordance with the laws of Papua New Guinea and the parties submit to the non-exclusive jurisdiction of the National Court of Papua New Guinea. + +Dispute Resolution + +19.1 Notice + +A party claiming that a dispute, difference or question arising out of this agreement (Dispute) has arisen must notify the other party in writing giving details of the dispute. 19.2 Escalation + +Senior executive managers of both companies must meet together to negotiate in good faith with a view to resolving the dispute. Commercial in Confidence Page 37 May 2004 + +Network Management Outsourcing Agreement + + + + + +19.3 Expert Determination Or Mediation + +If the parties cannot resolve the Dispute within 30 days after the Notification, the parties must refer the Dispute to: + + (a) Expert determination or + + (b) Mediation + +the cost of which will be at either parties own cost 19.4 Expert Determination Criteria + +If a Dispute is referred for expert determination the expert must make a determination by reference to what is reasonable in the context of the overall service delivery environment but taking into account best practice standards and relevant benchmarks in Papua New Guinea. + +Expert determination must be completed by a mutually acceptable independent expert such as an accountant, computer expert or other person/s as agreed between the parties to assist in the resolution of any such dispute with knowledge of the operating conditions within Papua New Guinea. + +But whose decision will not be binding on the parties. + +Neither party may terminate this agreement pending the decision of such expert, but either party may approach the court for urgent relief if it is though desirable 19.5 Selection Of Expert Or Mediator + +The parties will attempt to agree an appropriate expert or mediator. If they are unable to agree either party may at its own cost, request the president of the Law Society of Papua New Guinea to appoint a suitably qualified person to decide the dispute and determine the cause of action which best meets the objectives of the parties under or in the context of this agreement. + +That person will act as an expert and not as an arbitrator and the decision or determination must, so far as practicable, be made within 21 days of the request + +The expert may request either of the parties to appear before him or to provide a written explanation as to the reasons for the dispute and as to the party's reasons for following a certain course of action. 19.6 Procedure + +Each expert determination and mediation conducted in accordance with this clause will be conducted in accordance with the relevant sections of the this agreement and the appropriate laws of Papua New Guinea. + +The parties agree that a determination made by an expert will not be binding on either party. Once a determination has been made, the parties will recommence negotiation to resolve the Dispute and if they fail may initiate court proceedings. Commercial in Confidence Page 38 May 2004 + +Network Management Outsourcing Agreement + + + + + +Disengagement + +20.1 Planning + +The purpose of Disengagement is: + + (a) to enable the BSP or its nominee to perform the Disengaged Services from the end of the Disengagement Period; and + + (b) to eliminate or minimise any disruption to the Services (including the Disengaged Services) as a result of the handover of the Disengaged Services to the BSP or its nominee. + +Datec must upon request from the BSP work with them to formulate a disengagement plan. + + (a) as part of the Disengagement Plan: + + (i) BSP's right to use any Software continues following Disengagement + + (ii) there is no degradation of service levels or quality of service during Disengagement; + + (iii) there is no interruption to the Services during Disengagement; (b) the Disengagement Plan: + + (i) specifies the Datec Personnel and other resources that will provide Disengagement Assistance; + + (ii) specifies all things necessary to effect Disengagement as efficiently as possible as at the start of this Agreement to effect the transition to Datec; + + (iii) sets out a timetable and process for effecting Disengagement that will deal with each of the issues in this agreement and will enable the BSP to have completed Disengagement as quickly as possible without disrupting the quality of the Services; and + + (iv) contains all things necessary to ensure that Datec is able to comply with the clauses in this agreement. 20.2 Implementation Of Plan + +Datec must ensure that, at all times during the agreement, on 60 days notice it is able to deploy all necessary resources to complete Disengagement in accordance with the agreed Disengagement Plan. + + (a) Datec must ensure there is no degradation of quality of service during Disengagement; + + (b) Datec acknowledges all Service Levels apply during Disengagement but subject to agreement of the viability of the Disengagement Plan Commercial in Confidence Page 39 May 2004 + +Network Management Outsourcing Agreement + + + + + + (c) Datec use its best efforts to ensure that the Disengagement Period ends on the intended date of termination for the Disengaged Services, + + (d) the BSP will be permitted (on its own or on behalf of its nominated third party) without interference from Datec (including counter- offers), to make offers to any Datec employees or contractors who were used solely or primarily by Datec to provide the Disengaged Services during the 12 month period prior to the commencement of Disengagement; + + (e) The BSP or its nominee will be permitted to acquire all of Datec's right, title and interest in any Equipment owned or leased by Datec or its Subcontractor that is used in the performance of the Disengaged Services + + (f) If the BSP appoints a third party to assume the BSP role in relation to any or all of the Disengagement, Datec must provide Disengagement assistance to that third party. Commercial in Confidence Page 40 May 2004 + +Network Management Outsourcing Agreement + + + + + +EXECUTED as an agreement. + +SIGNED SEALED AND DELIVERED by BANK SOUTH PACIFIC LIMITED by Garth Mcllwain its duly constituted Attorney in the presence of: + +) + + + +BANK OF SOUTH PACIFIC LIMITED by its Attorney who hereby states that at the time of his executing this instrument he has no notice of the revocation of the Power of Attorney Registered No. S.25458 + +AND I certify that the person executing this instrument is personally known to me ) Under the authority of which he has executed this instrument ) ) + +/s/ Illegible ) /s/ Illegible Witness ) Illegible Name (printed) ) + +Signed for and on behalf of DATEC (PNG) LIMITED by the authority of the Directors and Management ) + +/s/ Illegible ) Signature of Authorised Officer ) + +Financial Controller ) Illegible Title ) Name of Authorised Officer (Please Print) + +/s/ Illegible ) Illegible Signature of Witness ) Name of Witness (Please Print) Commercial in Confidence Page 41 May 2004 + +Network Management Outsourcing Agreement + + + + + +Schedule A: + +Equipment List — Asset Register Illegible Illegible Illegible Illegible Daru 1721 Catalyst 1912 Fa/1 , E/1 and S/1 Klunga 1721 Catalyst 1912 E/2 Tabubil 1721 Catalyst 2950 E/1 and S/4 Kerema 1721 E/2 POM Admin 1 Cisco 3660 Catalyst 2912 Fa/2, S/10 and ATM/1 POM Admin 2 Cisco 3660 Catalyst 2912 Fa/2 and S/9 POM CC Cisco 1721 Catalyst 2912 E/1 and S/2 Boroko CC Cisco 3640 Catalyst 2950 E/2 and S/4 Ori Lavi Cisco 805 E/1 and S/1 Waigani Drive CC Catalyst 1912 E/1 and S/2 Security Base Cisco 805 Catalyst 1912 E/1 and S/1 Gordons CC Cisco 3662 Catalyst 2950 and Catalyst 1900 Fa/2 and S/12 Stores Cisco 1605 Catalyst 1912 E/2 and S/1 Bunker nsc_adm1 Cisco 3660 Cataryst 3550 Fa/2, S/27 and ATM/1 Bunker nsc_adm2 Cisco 3660 Catalyst 3550 E/2 and S/8 Bunker NCD Cisco 3640 Catalyst 3550 E/2 and S/16 Bunker EB Cisco 3640 Cataryst 3550 E/2 and S/8 User Suppt Cisco 1601 E/1 and S/1 Dev Suppt Cisco 1601 E/1 and S/1 Waigani Junction CC Catalyst 2924 Andersons Harbourside Cisco 2610 Catalyst 2950 E/1 and S/1 TST 4 Mlle Cisco 2610 E/1 and S1 Hitron Commercial in Confidence Page 42 May 2004 + +Network Management Outsourcing Agreement + + + + + +Boroko Foodworld Rainbow ATM Lobby Cisco 805 E/1 and S/1 Jacksons Cisco 805 E/1 and S/1 Alotau 1721 Catalyst 1912 E/1 and S/6 Popondetta 1721 Catalyst 1912 E/2 and S/2 Lae Town Cisco 3640 Catalyst 2950 E/2 and S/11 Lae Market 1721 Catalyst 2924 E/1 and S/4 Lae CC Cisco 2611 Catalyst 2950 E/2 and S/6 Lae - Vele Rumana Cisco 805 E/1 and S/1 Eriku ATM Lobby 1721 E/1 and S/1 Bulolo 1721 E/2 Madang 1721 Catalyst 2924 E/2 and S/4 Madang - Beckslea Plaza 1721 E/2 and S/1 Wewak Cisco 3640 Catalyst 1912 E/3 and S/4 Wewak ATM Lobby 1721 E/2 and S/1 Maprik Cisco 806 E/2 Aitape Cisco 806 E/2 Vanimo 1721 Catalyst 1912 E/2 and S/2 Kainantu 1721 Catalyst 1912 E/1 and S/2 Goroka Cisco 3640 Catalyst 2950 Fa/1. E/1 and S/6 Bird Of Paradaise Cisco 805 E/1 and S/1 Kundiawa 1721 Catalyst 1912 E/2 and S/2 Hagen Cisco 3640 Catalyst 2924 E/2 and S/9 Hagen CC Cisco 2611 Catalyst 1912 E/2 and S/10 Wabag CC Cisco 2611 Catalyst 1913 E/2 and S/2 Wabag Cisco 2611 Catalyst 2924 E/2 and S/2 Mendi Cisco 2611 Catalyst 1912 E/2 and S/2 Lorengau 1721 Catalyst 1912 E/1 and S/1 Commercial in Confidence Page 43 May 2004 + +Network Management Outsourcing Agreement + + + + + +Kimbe 1721 Catalyst 2950 E/1 and S/4 Bialla 1721 E/2 Kokopo Cisco 3640 Catalyst 2924 E/5 and S/B Kokopo IRO Cisco 2611 Catalyst 1912 E/2 and S/6 Rabaul 1721 Catalyst 1912 E/2 and S/1 Kavleng 1721 Catalyst 1912 E/2 and S/2 Namatanai 1721 Catalyst 1912 E/2 Lihir 1721 Catalyst 1912 E/2 and S/3 Buka 1721 catalyst 1912 Fa/2 and S/2 Commercial in Confidence Page 44 May 2004 + +Network Management Outsourcing Agreement + + + + + +Schedule B + +Datec Service Levels for BSP Networking Outsourcing Project + +Services to be performed are defined in the Network Management Outsourcing Agreement. These include Data services, network services and internet services. + +As referenced in Section 8.5 of this agreement, rebates will be applied as detailed in Pricing Schedule C, should Datec not achieve the agreed Service Levels. Rebates will apply to Severity Levels One (1) and Two (2) for all logged jobs during the agreed business hours contained in this agreement. A. Helpdesk / Service Calls + +1(a) During Business Hours (Monday to Friday 7.30 to 18.00) Severity Level Time to Respond Escalation Time Comments + +1 15 minutes 1 hour 2 30 minutes 2 hours 3 1 hour 4 hours 4 8 hours Next business day Commercial in Confidence Page 45 May 2004 + +Network Management Outsourcing Agreement + + + + + +After hours assistance Monday through Friday will be available via the Datec Help Desk: + +1(b). After Business Hours (Outside Business hours) Severity Level Time to Respond Escalation Time Comments + +1 2 hours 3 hours 2 3 hours 4 hours 3 Next business day Next business day 4 Next business day Next business day 1(c). Severity Definitions Severity Definitions Severity Level + +Illegible Illegible + +2 High Impact + +Required prompt corrective action. Product of service restricted. Business can operate at reduced capacity. Eg Less than 100 staff impacted, less than 10 branches / ATM's effected by the one event. + +Illegible Illegible Commercial in Confidence Page 46 May 2004 + +Network Management Outsourcing Agreement + + + + + +1.1.1 B. Reporting 1.1.2 Report + +1.1.3 Report Description 1.1.4 Frequency 1.1. 5 Delivery time 1.1.6 Distribution List + +1.1.7 + +Start of Day Network Status Summary Report 1.1.8 + +Daily + +1.1.9 + +08:00 + +1.1.10 + +1.1.11 Open / Closed Incident report 1.1.12 Daily 1.1.13 10:00 1.1.14 + +1.1.15 + +Network Utilisation Report + +1.1.16 + +Weekly + +1.1.17 + +17:00 (Friday) 1.1.18 + +1.1.19 + +Management Summary report + +1.1.20 + +Monthly + +1.1.21 + +17:00 (3rd Day of the month) 1.1.22 + +1.1.23 + +Details + +Start of Day Network Status Summary Report + +The report is to detail the status of all bank telecommunication circuits. For those circuits that are unavailable or service is impacted details of actions taken is to be included in the report. Commercial in Confidence Page 47 May 2004 + +Network Management Outsourcing Agreement + + + + + +Open / Closed Incident Report + +A summary of all calls logged to the Network Helpdesk, status and action taken. + +Network Utilisation Report + +The report is to provide graphical details of network utilisation statistics for all facets of the network inclusive of; + +Banking Traffic + +Internet Traffic + +Line / Network availability statistics + +Any anomalies are to be noted and appropriate commentary / recommendations made. + +Monthly Management Report. + +The report is detail in a summarised format Network and Operational performance for the month inclusive of; + +Statistics of Incident Reports logged + +Graphical presentation of Monthly Network Utilisation + +Monthly Line / Network Availability Summary + +SLA performance status + +Staff Report + +Management commentary. Commercial in Confidence Page 48 May 2004 + +Network Management Outsourcing Agreement + + + + + +2. Managed Third Parties (MTP) + +Datec will apply the appropriate severity level and take action as required with managed third party vendors when the resolution requires the involvement of a managed third party. + +In the first instance Datec will liase with the managed third party vendor directly keeping records of the action for reporting purposes. + +Should there be no successful resolution to this approach within the time durations within this SLA, Datec will escalate the matter directly to the BSP Customer Business Manager (CBM). In any event the CBM will be aware of the request to the MTP due to the daily reporting systems in place. + +Once escalated to the BSP CBM, the BSP undertakes to take control of the liaison with the MTP to help Datec resolve the issue. Commercial in Confidence Page 49 May 2004 + +Network Management Outsourcing Agreement + + + + + +Schedule C + +Pricing Schedule Annual Fees Annual Base Fee K3,524,322.00 + +Monthly Base Fee K293,693.50 SLA Rebate Table % Of SLA Achieved 100% 95% 90% 85% 80% 75% + +Monthly Rebate % applied 0% 10% 20% 30% 40% 50% + +• Measured Monthly using the actual Response and Escalation times for logged jobs verse the agreed service times contained in the SLA in Schedule B + +• Applies to Severity Levels 1 & 2 during normal business hours + +• Maximum rebate will be 50% of the monthly base fee Termination Fee Table + +Contract Term Completed 0-Yrl 1-Yr2 2-Yr3 3-Yr4 4-Yr5 5-Yr6 + +% of Annual Base Fee Payable 50% 40% 30% 20% 10% 0% + +Note: The Annual Base Fee will be adjusted in accordance with Section 9.1, "CPI Adjustments", of this agreement Commercial in Confidence Page 50 May 2004 + +Network Management Outsourcing Agreement + + + + + +Schedule D + +Change Control Form (For MAC's) + +Change Control Form + +This form must be created as soon as the owner is aware of the change but at least two weeks prior to the implementation date. This is to notify all involved parties of impending change and to help the scheduling of change into production. For urgent fixes the change process is followed but needs to be processed immediately. Full details may not be available at this point, however the minimum requirements to be completed are: + +Scheduled date and time of change: Date Time + +Change Control Number: CMS + +Equipment affected by the change: + +Equipment (Applies to one or more hardware, software changes or configuration changes to one or more networks). Equipment Details Domain Location Commercial in Confidence Page 51 May 2004 + +Network Management Outsourcing Agreement + + + + + +1. Change to be carried out: + +2. Reason for Change + +3. Is there any impact on other areas? + +4. Has agreement been obtained from the business? If so please give details. Commercial in Confidence Page 52 May 2004 + +Network Management Outsourcing Agreement + + + + + +5. Has Financial Approval been obtained for this change? If so please give details. + +6. Have representatives from both the client and the technical staff tested the software or hardware? Please give details. + +7. How will the change be carried out? + +8. Has any provision been made to back out the installation if necessary? Please give details. Commercial in Confidence Page 53 May 2004 + +Network Management Outsourcing Agreement + + + + + +9. Have the details and the implications of the change been explained to the client and areas that will be affected? Please give details. + +This change control must be reviewed and approved by at least one person from each of the following areas: Area Signatory Signature Date The Business Head of Relationship Banking + + Head of Technology + + Others + +Datec Outsourcing + + Delivery Manager + + + +Office Automation Manager Commercial in Confidence Page 54 May 2004 + +Network Management Outsourcing Agreement + + + + + +Schedule E + +REQUEST FOR SERVICE (RFS) + +Service Request Form Commercial in Confidence Page 55 May 2004 + +Network Management Outsourcing Agreement + + + + + +BSP: Service Request Form + +Compulsory section or fields are marked with: F + +F SR Number: (Completed by BSP) + +-RFS- + + F Date F Request Type (Cross) F Region (Cross) + + + +¨ POM + +¨ Other (Specify) + + + +¨ Project Request + +¨ Support Request + +¨ Other: Please Specify + +F 1.0 Request Details Service Request Title + +Project Name BSP Project Code + +Description + +Provide a brief outline of the project scope including high-level business requirements, technical impacts. Where appropriate, provide details of other areas impacted by this project including external parties Commercial in Confidence Page 56 May 2004 + +Network Management Outsourcing Agreement + + + + + +Background + +Provide any relevant information, which assists in defining the business imperatives for the project, (e.g. Business Requirements) List of Attachments supporting this Service Request Attachment / Filename (Content) + +2.0 Contract Reference + +The terms and conditions will be applied as per the Network Management Outsourcing Agreement dated May 2004 between the Bank of South Pacific Limited and Datec PNG LTD. F 3.0 Requestor Information + +Initiator of Request Name ( Mobile + + Position e-mail Fax Prime Contact + +(if different from Requestor) + +Name + + + +( + + + +Mobile + + Commercial in Confidence Page 57 May 2004 + +Network Management Outsourcing Agreement + + + + + + Position e-mail Fax + +Requesting Business Area + +Billing Cost Centre + +Project Manager1 Name ( Mobile F 4.0 Key Dates (attach Project Plan or relevant documents as appropriate) BSP Phase(s) + +Completion Date(s) + +/ / / / Datec Phases(s) + +Completion Date(s) + +/ / / / Priority: (Cross those applicable) ¨ Regulatory + +¨ Normal + + Commercial in Confidence Page 58 May 2004 + +Network Management Outsourcing Agreement + + + + + + ¨ Compliance ¨ Fastpath + +Implementation Date(s): User Acceptance Testing + + Production + + Other (specify) / / 5.0 BSP/Datec Purchase Order Details + +F Purchase Order No.2 F BSP/Datec + +Is this Request In-Scope or Out-of-Scope of the Services Agreement Provide details of components if "Out of Scope". + + Commercial in Confidence Page 59 May 2004 + +Network Management Outsourcing Agreement + + + + + +F 6.0 BSP Managerial Approval Authorised Approver Name: + + Title: + + Date: 7.0 BSP Executive Approval Approval Approval Approved / Not Approved for release to Datec PNG LTD on behalf of the Bank of South Pacific Limited by: Approved / Not Approved for release to Datec PNG LTD on behalf of the Bank of South Pacific Limited by: + + For and on behalf of the Bank South Pacific Limited For and on behalf of the Bank South Pacific Limited / / / / Explanation for Non -approval (if appropriate) Commercial in Confidence Page 60 May 2004 + +Network Management Outsourcing Agreement \ No newline at end of file diff --git a/full_contract_txt/ELECTRAMECCANICA VEHICLES CORP. - Manufacturing Agreement.txt b/full_contract_txt/ELECTRAMECCANICA VEHICLES CORP. - Manufacturing Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..21cf88d8dceed8e906ba29baa096f7fe565e847e --- /dev/null +++ b/full_contract_txt/ELECTRAMECCANICA VEHICLES CORP. - Manufacturing Agreement.txt @@ -0,0 +1,155 @@ +MANUFACTURING AGREEMENT This Manufacturing Agreement (the "Agreement") is effective February ____, 2017 (the "Effective Date"), BETWEEN: ELECTRAMECCANICA VEHICLES CORP., an entity incorporated under the laws of the Province of British Columbia, Canada, with an address of Suite 102 East 1st Avenue, Vancouver, British Columbia, Canada, V5T 1A4 ("EMV"); AND: CHONGQING ZONGSHEN AUTOMOBILE INDUSTRY CO., LTD., a company organized and existing under the laws of China, with its head office located at: Zongshen Industry Zone Banan District, Chongqing PC: 400054("Manufacturer") ELECTRAMECCANICA VEHICLES CORP., （ "EMV"），Suite 102 East 1st Avenue, Vancouver, British Columbia, Canada, V5T 1A4 Recitals: WHEREAS EMV has expended considerable time, effort, and resources in the business of designing, manufacturing and selling electronic vehicles; and EMV在设计、 WHEREAS the Manufacturer desires to manufacture the Products and represents to EMV that Manufacturer has sufficient expertise, resources, and personnel to perform its obligations under this Agreement; and WHEREAS EMV desires to have Manufacturer act as a manufacturer of the Products on the terms and conditions set forth herein. EMV。 Therefore, in consideration of the mutual covenants and promises contained herein, the parties hereto agree as follows: * Confidential treatment has been requested for certain portions of this Exhibit. The confidential portions of this Exhibit have been omitted and filed separately with the Securities and Exchange Commission. Such portions have been marked with "****" at the exact place where material has been omitted. 1 + + + + + + 1. DEFINITIONS "GAAP" means International Accounting Standards as promulgated by the International Accounting Standards Board consistently applied. "Lead-time" is defined as the amount of time between Manufacturer receiving an order and EMV receipt of the goods ordered. The ordering processes are listed in Section 4. "Products" shall mean the electric vehicle named Solo, together with any accompanying documentation, packaging, or other materials identified (if any). The parties may add or delete Products on mutual agreement. "Proprietary Rights" shall mean all rights of EMV and its licensors in the Products including, without limitation and whether registered or unregistered other than as required under this agreement, copyright, patent, design patent, trademark, trade dress, trade secret, and publicity rights, arising under applicable law and international conventions. "Purchase Order" means a written order submitted by EMV to purchase a specific quantity of a Product or Products in accordance with this Agreement. Each Purchase Order shall include the quantity and type of Products to be manufactured and purchased; the unit price; the Product revision level; scheduled delivery dates; and "sold to," "invoice to," and "ship to" address. "Specifications" means the functional, appearance, fit-and-finish and performance specifications (including，without limitation, bills of materials, schematic diagrams, and Product, component and assembly drawings) relating to the testing and manufacturing of each confirmed Product by both parties as provided in writing by EMV to the Manufacturer from time to time. "Territory" shall be defined as the People's Republic of China。 2. MANUFACTURING 2.1 Manufacturing License License to Specifications. Subject to the terms of this Agreement, subject to Manufacturer meeting EMV's requirements for quality, price and lead- time, EMV hereby grants Manufacturer an exclusive, non-transferable, license (without the right to sublicense) under EMV's Proprietary Rights in the Territory, during the term of this Agreement, to use the Specifications solely for the purpose of manufacturing the Products to fulfil Purchase Orders for EMV. * Confidential treatment has been requested for certain portions of this Exhibit. The confidential portions of this Exhibit have been omitted and filed separately with the Securities and Exchange Commission. Such portions have been marked with "****" at the exact place where material has been omitted. 2 + + + + + + License to EMV Firmware. Subject to the terms of this Agreement, subject to Manufacturer meeting EMV's requirements for quality, price and lead- time, EMV hereby grants Manufacturer an exclusive, non-transferable, license (without the right to sublicense) under EMV's Proprietary Rights in the Territory, during the term of this Agreement, to copy the EMV firmware as may be provided by EMV from time to time onto Product units in the manufacturing process at each EMV-approved Manufacturer manufacturing facility. Subject to the terms of this Agreement, EMV grants to Manufacturer and Manufacturer accepts, for the term of this Agreement, the right to manufacture the Products only in the Territory as necessary to fulfil Purchase Orders for Products made by EMV, provided that such manufacturing is at Manufacturer's own cost for the purchase of the components of each order as well as assembling cost for finished products and in accordance with this Agreement. 2.2 Specifications 2.2.1 Specification EMV shall provide the Manufacturer with the Specifications of the Product pursuant to the terms of this Agreement, including 2D drawing of the components (including material, surface treatment, quality standard and testing item etc.), 3D drawing (including detailed structure design), and the Manufacturer shall implement development and manufacturing of the Product only in accordance with the Specifications. In addition, EMV shall provide the Manufacturer with the performance testing criteria and items for the vehicle. 2.2.2 Manufacturer shall keep detailed manufacturing records for all units manufactured. Manufacturer's manufacturing records shall be available to EMV during spot checks and site inspections pursuant to Section 2.4, and upon request to allow EMV to provide such information to certification authorities as may be required. 2.2.3 Manufacturer agrees not to alter the Products from the Specifications (including without limitation their packaging) without EMV's prior written consent. EMV agrees not to alter the Products produced by Manufacturer (including, without limitation their packaging) without Manufacturer's prior written consent. * Confidential treatment has been requested for certain portions of this Exhibit. The confidential portions of this Exhibit have been omitted and filed separately with the Securities and Exchange Commission. Such portions have been marked with "****" at the exact place where material has been omitted. 3 + + + + + + 2.2.4 Manufacturer warrants to EMV that the Products assembled or manufactured by Manufacturer will (i) conform in all respects to their Specifications; (ii) will be merchantable, of good material and workmanship, with respect to such assembly or manufacture under normal use and service for three (3) years from the manufacture and assembly of the Products, not including the easily worn parts, list to be confirmed by both parties. 2.3 Preferred Vendors For the key components, including battery, motor, controller, the Manufacturer shall provide the optional vendors list to EMV according to the capability of the vendors in the Territory. EMV shall specify in writing the preferred vendors list for specific component parts for each of the Products, which may also differ by market based on required standards for such markets. Manufacturer shall acknowledge such preferred vendor component list in writing and warrants that for each component for which preferred vendors are specified such components shall only be sourced from the preferred vendors specified by EMV for each component. Upon an update of the preferred vendor component list by either party, EMV and the Manufacture will negotiate and agree to the updated vendor as well as price and lead time for the Product(s) based on any such sourcing changes. For the components which are not key components, by its sole discretion, the Manufacturer can determine the vendors list according to the capability of the vendors and warrant the vendors can meet the manufacturing standard of EMV. 2.4 Testing and Inspections Spot Testing. Upon prior written notice to Manufacturer, EMV or its authorized representative(s) may conduct spot functional tests of the Products at Manufacturer's facility at which Products are being manufactured during Manufacturer's normal business hours. The parties will mutually agree upon the timing of such investigations, which will be conducted in such a manner as not to unduly interfere with Manufacturer's operations. If any Products fail any part of the test procedure set forth on the Specifications, EMV may require such Products to be rejected, and Manufacturer will promptly take all steps necessary to correct such failures at its expense. Site Inspections. Upon prior written notice to Manufacturer, and subject to the confidentiality provisions herein, EMV will have the right to perform on-site inspections at Manufacturer's manufacturing facilities and Manufacturer will fully cooperate with EMV in that regard at mutually agreed upon times. If an inspection or test is made on Manufacturer's premises, Manufacturer will provide EMV's inspectors with reasonable assistance at no additional charge. In the event that any on-site inspection of the Products indicates that the Products do not conform to the requirements of this Agreement, Manufacturer will not ship such Products until such nonconformity has been cured and only Products meeting the conformance criteria may be shipped. * Confidential treatment has been requested for certain portions of this Exhibit. The confidential portions of this Exhibit have been omitted and filed separately with the Securities and Exchange Commission. Such portions have been marked with "****" at the exact place where material has been omitted. 4 + + + + + + 2.5 Quality Assurance Quality Plan. Manufacturer will establish, maintain and manage a quality assurance program for the Products that is reasonable for the industry and sufficient to achieve compliance with the Specifications. The parties will prepare a final product quality evaluation form, and the Products will not be shipped until the parties jointly inspect the quality and complete such forms. 2.6 Engineering Changes. ECOs. Either EMV or Manufacturer may, from time to time, submit written requests to the other, for engineering change orders ("ECOs") for changes to the Products. ECOs will include documentation of the change to effectively support an investigation of the impact of the engineering change. The Parties agree to discuss the ECO within one month following the request for the ECO. The parties agree that 1 month is a reasonable time period to permit Manufacturer to evaluate ECO impact regarding potential excess manufacturing costs and price, if any, and non-recurring costs, if any. No Changes. No changes will be made to the Products without EMV's prior written consent and no approved change will be made effective prior to the date approved by EMV in writing. Manufacturer will not change or modify the processes for the Products without EMV's prior written consent. Manufacturer will reimburse EMV for all expenses incurred by EMV to qualify changes to such materials or processes that are undertaken by Manufacturer without EMV's prior written consent. 2.7 Limitations Title to all Proprietary Rights shall at all times be and remain with EMV and its licensors. Except as expressly authorized by EMV in writing, Manufacturer will not, and will legally require its employees and agents not to: (i) modify, translate, reverse engineer, decompile, disassemble, create derivative works of or copy EMV Products or related documentation; (ii) remove, alter, or cover any copyright or trademark notices or other proprietary rights notices placed by EMV on or in the Products. 2.8 Exclusivity The manufacturing license granted in this Agreement is exclusive within the Territory. 2.9 Packaging, Advertising and Promotion Manufacturer shall include the information provided by EMV in the packaging in which the Products are sold and shall modify any of the packaging if requested by EMV. 2.10 Reserved Rights Except as expressly provided in this Agreement, EMV does not grant any right to Manufacturer to (a) use, copy, or display (except for promotional purposes) the Products; (b) assign, sublicense, or otherwise transfer its rights or delegate its obligations under this Agreement or any of the rights, licenses, Products, or materials to which it applies; or (c) modify, amend, alter or otherwise vary the Products. * Confidential treatment has been requested for certain portions of this Exhibit. The confidential portions of this Exhibit have been omitted and filed separately with the Securities and Exchange Commission. Such portions have been marked with "****" at the exact place where material has been omitted. 5 + + + + + + 3. SHARING OF INVESTMENT 投资的分摊 3.1 Each of EMV and Manufacturer shall be responsible for certain expenses, for the purposes of carrying out the development of Products, in the following manner: + +Activity Contribution (In Percentage) EMV Manufacturer Design and Development Costs ****% ****% + +Manufacturing equipment (including improvement on existing equipment) ****% + +Road Test and Laboratory Tests + +****% by EMV for all the road test & laboratory test during R&D stage before finalizing design of overall vehicle and parts by EMV + +****% by Manufacturer for all the road test & laboratory test during mass production stage to reach the technical standard after finalizing design of overall vehicle and parts by EMV. + +Homologation fees for vehicle and spare parts ****% for EMV's market. + + ****% for Manufacturer's market. Mould & tooling cost ****% ****% 3.2 The investment of production preparation The Manufacturer will review and consider the Specifications and the Products provided by EMV, and shall deliver to EMV a list and estimated expense of all necessary equipment, mould, tooling, and performance experiments. Manufacturer will not purchase or develop any such equipment, mould or tooling, and EMV shall bear no such related expense, until EMV has approved of such estimated expenses. * Confidential treatment has been requested for certain portions of this Exhibit. The confidential portions of this Exhibit have been omitted and filed separately with the Securities and Exchange Commission. Such portions have been marked with "****" at the exact place where material has been omitted. 6 + + + + + + 3.3 Both parties agree with the following timetable for the payment of the mould & tooling cost: Item Percentage to be paid by EMV When Manufacturer begins making mould & tooling 50 % of the total mould & tooling cost 50% When Manufacturer completes mould & tooling 40 % of the total mould & tooling cost Delivery of the 1s t serial production order 10% of the total mould & tooling cost 3.4 Target Purchase Volume Under this Agreement, subject to Manufacturer meeting EMV's requirements for quality, price and lead-time and being granted the manufacturing license hereunder, the minimum purchase volume of the Product (Solo) is 50,000 units within the period of three (3) years (calendar year of 2018, 2019, 2020). In case that EMV fails to reach the target volume within the specified period of the agreement, EMV shall reimburse the Manufacturer the investment of the equipment by the percentage of unachieved volume. In addition, during the valid period of this agreement, EMV guarantee the annual purchase volume will be not less than the purchase volume of the previous year. 4. FORECASTS AND PURCHASE ORDERS 4.1 Forecasts. On a periodic basis, EMV shall provide Manufacturer with a latest _6_month rolling forecast of Product requirements ("Forecast"), as currently anticipated pursuant to Exhibit A. * Confidential treatment has been requested for certain portions of this Exhibit. The confidential portions of this Exhibit have been omitted and filed separately with the Securities and Exchange Commission. Such portions have been marked with "****" at the exact place where material has been omitted. 7 + + + + + + 4.2 Purchase Orders. EMV will order Products by issuing Purchase Orders to Manufacturer. Each Purchase Order will include, at a minimum, quantities of Product required and the price and Lead-time/requested delivery dates. Manufacturer will confirm whether receipt of, and accept, all Purchase Orders conforming hereto within seven (_7_) business days of receipt for the orders started from the 2nd quarter of 2018. The Manufacturer may need more time to confirm the trial orders at the 1s t quarter of 2018. Manufacturer shall base such confirmations on its manufacturing capability and spare reasonable business efforts to satisfy all Purchase Orders that substantially conform with the most recent Forecast issued by EMV. For purposes of this Agreement, Purchase Orders must be submitted to Manufacturer, either via mail or electronic mail, to the following address: CHONGQING ZONGSHEN AUTOMOBILE INDUSTRY CO., LTD. Zongshen Industry Zone Ba'nan District, Chongqing CHINA 400054 Email: ● Phone: +86 ● Mobile: +86 ● Manufacturer will notify EMV for any change of the mailing address, email address and the sales coordinator. 4.3 Manufacturer Assessment Based on the Forecast, EMV and Manufacturer shall meet at least quarterly to set and update mutually agreeable key performance targets in a variety of areas including, without limitations, annual pricing, Lead-time, quality and on-time delivery. EMV shall evaluate Manufacturer's performance against such targets and the parties shall agree corrective actions. 4.4 Response Time. Manufacturer shall make commercially reasonable efforts to manufacture and deliver Products in accordance with the Purchase Orders issued by EMV. If Manufacturer is unable to meet the del ivery schedule set forth in a Purchase Order, Manufacturer shall notify EMV within_seven (_7_) business days following EMV's issuance of such Purchase Order. If Manufacturer subsequently becomes aware of circumstances that may lead to delays in delivery, Manufacturer shall notify EMV as soon as reasonably possible. The Manufacturer will make commercially reasonable efforts to deliver Products on or prior to the delivery date indicated on the Purchase Order (the "Delivery Target"). In order for a Product to be included as an on time delivery each Product needs to also meet all Specifications. The assessment of whether the Delivery Target has been achieved shall be calculated on a per shipment basis. * Confidential treatment has been requested for certain portions of this Exhibit. The confidential portions of this Exhibit have been omitted and filed separately with the Securities and Exchange Commission. Such portions have been marked with "****" at the exact place where material has been omitted. 8 + + + + + + 4.5 Order Adjustments. 4.5.1 Order Quantity Adjustment After Manufacturer's acceptance of Purchase Order, in case of order quantity adjustment within the lead time set forth in each Purchase Order, EMV shall inform Manufacturer in written form as soon as reasonably possible. Manufacturer will use commercially reasonable efforts to meet increases/decreases requested by EMV, and will quote any applicable charges resulting from changes in costs associated with such quantity adjustment following the issuance of a Purchaser Order. EMV shall bear such charges, subject to an updated Purchase Order being signed by both parties. 4.5.2 Order Specification Adjustment After Manufacturer's acceptance of Purchase Order, in case of order specification adjustment within the lead time set forth in each Purchase Order, EMV shall inform Manufacturer in written form as soon as reasonably possible. Manufacturer will use commercially reasonable efforts to meet changes requested by EMV, and will quote any applicable charges resulting from changes in costs and lead time associated with such specification adjustment. EMV shall bear such charges, subject to an updated Purchase Order being signed by both parties. In the event that any such specification adjustment results in Manufacturer accumulating stock, which is no longer suitable for use by Manufacturer in mass production, EMV shall reimburse the costs actually incurred by Manufacturer. 4.6 Rescheduling of Delivery Date EMV may reschedule the delivery of Products by sending Manufacturer a written change order pursuant to the schedule set forth in each Purchase Order. Manufacturer agrees to use commercially reasonable efforts to accommodate requests for rescheduling (acceleration and delay), and before accepting such rescheduling requests, will quote any applicable charges resulting from changes in costs associated with such rescheduling, which charges shall be the sole responsibility of EMV, subject to an updated Purchase Order being signed by both parties. 4.7 Cancellations In the event that EMV desires to cancel some quantity of Products ordered under a Purchase Order, Manufacturer shall, upon receipt of such written notice, stop work to the extent specified therein. EMV agrees to pay Manufacturer for completed work and work-in-process, under the same terms and conditions as set out in section 5 below, that cannot be used to fill other orders, including Manufacturer's costs for actual and reasonable labor and supplies incurred pursuant to Purchase Orders [up to the date of receipt of notice of cancellation]. * Confidential treatment has been requested for certain portions of this Exhibit. The confidential portions of this Exhibit have been omitted and filed separately with the Securities and Exchange Commission. Such portions have been marked with "****" at the exact place where material has been omitted. 9 + + + + + + 4.8 Cancellation Documentation Manufacturer will provide EMV with documentation adequate to support such claim for cancellation charges. Notwithstanding the foregoing, EMV shall have no obligation to pay cancellation charges where cancellations are the result of any failure of Manufacturer to perform its obligations under this Agreement. Upon payment of the cancellation charges, all Products, components, work-in-process, non-useable, and non- returnable/non-cancelable components in-house or on order shall become the property of EMV. Upon the request of EMV, all such Products, components, and work-in-process shall be shipped to EMV in accordance with the shipment terms below. The parties should use commercially reasonable efforts to resolve any disagreement for the cancellation charges or cancellation issues. 5. COMMERCIAL CLAUSE 5.1 Invoices and Payment 5.1.1 EMV shall pay 30% of total amount of a Purchase Order as a deposit after Manufacturer receives EMV's order, and then Manufacturer shall schedule the production. 5.1.2 Manufacturer will invoice EMV for Products net ten (10) days from when the parties sign the Quality Evaluation Form to confirm delivery of Products. 5.1.3 EMV shall pay 70% of total amount of a Purchase Order within ten (10) days of receipt of Manufacturer's invoice as provided in Section 5.1.2 above. 5.1.4 The product settlement shall be in Chinese Yuan. 5.2 Pricing The price of Products will be determined by both parties at the beginning of each calendar year. The Manufacturer shall have the right to make modifications to Product pricing during a given year when the prices of raw materials, within the order cycle, experience massive variations in prices (massive variations in prices refer to the monthly average price changes of five main raw materials: steel, aluminum, copper, composite materials, engineering plastics exceed 5% from window query of Chinese futures trading), upon providing EMV with not less than sixty (60) days' notice of such price change, provided that no such price changes will apply to any Purchase Order already submitted by EMV at such time, or within such sixty (60) day period. Subject to the above, if there is a change on export tax policy in China, the Manufacturer shall inform EMV in writing as soon as possible and both parties shall confirm any price changes and Purchase Orders which will be applied with new price prior to any change in price being effective. * Confidential treatment has been requested for certain portions of this Exhibit. The confidential portions of this Exhibit have been omitted and filed separately with the Securities and Exchange Commission. Such portions have been marked with "****" at the exact place where material has been omitted. 10 + + + + + + 5.3 Packaging and Shipping. Manufacturer shall package each Product in accordance with EMV's Specifications, or, if not specified by EMV, in accordance with generally accepted commercial standards. All shipments made by Manufacturer to EMV or to EMV' customers shall be in accordance with the shipping term stated in EMV's Purchase Order. Shipments will be made in accordance with EMV's specific routing instructions, including method of carrier to be used. EMV shall be responsible for all shipping costs resulting from the shipment of Products in accordance with its Purchase Orders. 5.4 Taxes. EMV shall be responsible for customs taxes or duties resulting from the sale or shipment of Products in accordance with its Purchase Orders. Manufacturer shall be responsible for value added, sales and use or similar taxes levied by the Peoples Republic of China resulting from the acquisition of components used in the manufacture of Products in accordance with the Purchase Orders. 5.5 Shipping Reports. Manufacturer shall provide written shipping reports to EMV for each delivery. Such reports shall include information concerning all shipments of Products on that day, including type of Products, quantities, and name/address of shipping destination. 5.6 Inspection and Claim EMV has the right to examine the goods on arrival and has Fifteen (15) business days to notify Manufacturer of any claim for damages on account of the condition, grade or quality of the goods, or non-conformity to the Specifications. The notice must set forth the basis of the claim in reasonable detail. EMV acknowledges that failure to notify Manufacturer of a claim within specified period in reasonable detail shall constitute acceptance of the goods. Within 15 working days upon receiving the Claim Notice from EMV, the Manufacturer shall analyze and respond to the Claim. The Manufacturer shall promptly replace or repair, at its sole expense, any defective Products arising from the assembly or manufacturing by the Manufacturer due to failure of the set Standard and Specification within the Product Warranty Period, including without limitations related shipping expenses. The replacement parts are preferred to be shipped by vessel together with the next shipment of mass production order. Shipment by air will be confirmed by both parties in emergency case. * Confidential treatment has been requested for certain portions of this Exhibit. The confidential portions of this Exhibit have been omitted and filed separately with the Securities and Exchange Commission. Such portions have been marked with "****" at the exact place where material has been omitted. 11 + + + + + + 6. MARKETING REGIONS 销售区域 EMV and the Manufacturer agree that the Manufacturer will be responsible for marketing of the Products in the region of Asia (India not included). Within Japan, the Manufacturer will supply the components to any assembler appointed by EMV, subject to any further agreement to be negotiated in good faith by both parties to specify details. 7. INTELLECTUAL PROPERTY 7.1 Ownership EMV represents and warrants to the Manufacturer that it has title and/or right to use and to license the Proprietary Rights to the Manufacturer hereunder. 7.2 EMV Liability EMV shall protect, defend, hold harmless, indemnify and reimburse Manufacturer from and against any liability, cost or expense arising from a claim that the Products constitute an infringement of any third party's intellectual property right or any other right. In the event that any suit, action involving any claim against Manufacturer based upon the use hereunder of drawings and technical information provided by EMV, Manufacturer shall notify EMV within ten( 10) business days in written form. EMV shall bear all costs, including, without limitations attorneys' fees, and damages finally awarded against Manufacturer or any amount paid in settlement which is attributable to any such allegation or claim. * Confidential treatment has been requested for certain portions of this Exhibit. The confidential portions of this Exhibit have been omitted and filed separately with the Securities and Exchange Commission. Such portions have been marked with "****" at the exact place where material has been omitted. 12 + + + + + + 8. TERMINATION 8.1 Term This Agreement shall have a term of four (4) years from the effective date first set forth above, and shall automatically renew for additional one year terms unless earlier terminated by either party. 8.2 Termination EMV may terminate this Agreement in the event the Manufacturer fails to achieve satisfactory assessments in two consecutive assessments conducted in accordance with section 4.3 and the Manufacturer has failed to take corrective action to substantially meet the performance targets agreed by EMV and the Manufacturer within180 days of the second assessment. Either party may terminate this Agreement in the event of a material breach of the Agreement provided such breach is not remedied within _sixty_ (_60_) calendar days following delivery of notice of such breach. 8.3 Automatic Termination This Agreement shall be terminated automatically, without notice, (i) upon the institution by or against either party of insolvency, receivership or bankruptcy proceedings, (ii) upon either parties making an assignment for the benefit of creditors, or (iii) upon either parties dissolution. 8.4 Effect of Termination Upon the termination of this Agreement by either party: (i) the rights and licenses granted to Manufacturer pursuant to this Agreement (including, without limitation the right to manufacture) will automatically cease; (ii) all payments owing from EMV to Manufacturer shall become immediately due and payable upon termination; (iii) all EMV trademarks, marks, trade names, patents, copyrights, designs, drawings, formulae or other data, photographs, samples, literature, and sales aids of every kind shall remain the property of EMV; and (iv) within sixty (_60_) business days after the termination of this Agreement, Manufacturer shall prepare all such items in its possession for shipment, as EMV may direct, at EMV's expense. Manufacturer shall not make or retain any copies of any confidential items or information which may have been entrusted to it. 8.5 Survival Provisions If this Agreement is terminated for any reason, those provisions which by their nature would survive such termination, including without limitations section 9 and section 10, will survive termination. Termination shall not affect any other rights which either party may have at law or in equity. 9. CONFIDENTIALITY 9.1 Definitions For purposes of this Agreement, "Confidential Information" of a party means information or materials disclosed or otherwise provided by such party ("Disclosing Party") to the other party ("Receiving Party") that are marked or otherwise identified as confidential or proprietary, or which are known or ought to be known to be their nature or the nature of disclosure to be confidential. Without limitation of the generality of the foregoing, and notwithstanding any exclusions described below, "Confidential Information" of EMV includes the EMV Proprietary Rights, including any portion thereof, modifications and derivatives thereof, and information or materials derived therefrom. * Confidential treatment has been requested for certain portions of this Exhibit. The confidential portions of this Exhibit have been omitted and filed separately with the Securities and Exchange Commission. Such portions have been marked with "****" at the exact place where material has been omitted. 13 + + + + + + 9.2 Use of Confidential Information The Receiving Party shall not use Confidential Information of the Disclosing Party for any purpose other than in furtherance of this Agreement and the activities described herein. The Receiving Party shall not disclose Confidential Information of the Disclosing Party to any third parties except as otherwise permitted hereunder. The Receiving Party may disclose Confidential Information of the Disclosing Party only to those employees, contractors or consultants who have a need to know such Confidential Information and who are bound to retain the confidentiality thereof under provisions (including, without limitation, provisions relating to non-use and nondisclosure) no less strict than those required by the Receiving Party for its own comparable Confidential Information. The Receiving Party shall maintain Confidential Information of the Disclosing Party with at least the same degree of care it uses to protect its own proprietary information of a similar nature or sensitivity, but no less than reasonable care under the circumstances. Any copies of the Disclosing Party's Confidential Information shall be identified as belonging to the Disclosing Party and prominently marked "Confidential." 9.3 Exemptions Notwithstanding the foregoing, the Receiving Party's confidentiality obligations will not apply to Confidential Information which (i) is already in the Receiving Party's possession at the time of disclosure to the Receiving Party, (ii) is or becomes part of public knowledge other than as a result of any action or inaction of the Receiving Party, (iii) is obtained by the Receiving Party from an unrelated third party without a duty of confidentiality, or (iv) is independently developed by the Receiving Party. 9.4 Judicial Action This Agreement will not prevent the Receiving Party from disclosing Confidential Information of the Disclosing Party to the extent required by a judicial order or other legal obligation, provided that, in such event, the Receiving Party shall promptly notify the Disclosing Party to allow intervention (and shall cooperate with the Disclosing Party) to contest or minimize the scope of the disclosure (including application for a protective order). Each party shall advise the other party in writing of any misappropriation or misuse of Confidential Information of the other party of which the notifying party becomes aware. 9.5 Remedies Each party (as Receiving Party) acknowledges that the Disclosing Party considers its Confidential Information to contain trade secrets of the Disclosing Party and that any unauthorized use or disclosure of such information would cause the Disclosing Party irreparable harm for which its remedies at law would be inadequate. Accordingly, each party (as Receiving Party) acknowledges and agrees that the Disclosing Party shall be entitled, in addition to any other remedies available to it at law or in equity, to the issuance of injunctive relief, without bond, enjoining any breach or threatened breach of the Receiving Party's obligations hereunder with respect to the Confidential Information of the Disclosing Party, and such further relief as any court of competent jurisdiction may deem just and proper. * Confidential treatment has been requested for certain portions of this Exhibit. The confidential portions of this Exhibit have been omitted and filed separately with the Securities and Exchange Commission. Such portions have been marked with "****" at the exact place where material has been omitted. 14 + + + + + + 9.6 Expiration of Agreement Upon (i) the expiration of this Agreement or termination of this Agreement by mutual agreement of the parties, or (ii) termination of the Manufacturer's rights under Section 8, above, each party (as Receiving Party) shall immediately return to the Disclosing Party all Confidential Information of the Disclosing Party embodied in tangible (including electronic) form, or, at the option of the Disclosing Party, certify in writing to the Disclosing Party that all such Confidential Information has been destroyed. 9.7 Exceptions Each party agrees that the terms and conditions of this Agreement shall be treated as Confidential Information of the other party; provided that each party may disclose the terms and conditions of this Agreement: (i) as required by judicial order or other legal obligation, provided that, in such event, the party subject to such obligation shall promptly notify the other party to allow intervention (and shall cooperate with the other party) to contest or minimize the scope of the disclosure (including application for a protective order); (ii) as required by the applicable securities laws, including, without limitation, requirements to file a copy of this Agreement (redacted to the extent reasonably permitted by applicable law) or to disclose information regarding the provisions hereof or performance hereunder; (iii) in confidence, to legal counsel; (iv) in confidence, to accountants, banks, and financing sources and their advisors; and (v) in confidence, in connection with the enforcement of this Agreement or any rights hereunder; and (vi) in confidence (on a counsel-only basis), to outside counsel for a third party which plans to acquire all or substantially all the equity or assets of, or to merge with, such party, in connection with a "due diligence" investigation for such a transaction. 9.8 Reverse Engineering The Manufacturer shall not disassemble, decompile or otherwise reverse engineer the Product unless for failure mode analysis investigation. 10. GENERAL TERMS 10.1 Non-assignability and Binding Effect Neither Party shall assign any of its rights or obligations under this Agreement to any third party directly or indirectly without the prior written consent of the other Party. Subject to the foregoing, this Agreement shall be binding upon and inure to the benefit of the parties hereto, their successors and assigns. * Confidential treatment has been requested for certain portions of this Exhibit. The confidential portions of this Exhibit have been omitted and filed separately with the Securities and Exchange Commission. Such portions have been marked with "****" at the exact place where material has been omitted. 15 + + + + + + 10.2 Notices Notices under this Agreement shall be sufficient only if personally delivered, delivered by a major commercial rapid delivery courier service, or E- mail and other digital communication system , with return receipt requested, to a party at its address first set forth above or as amended by notice pursuant to this subsection. If not received sooner, notice by any of these methods shall be deemed to occur _seven_(7) business days after deposit. 10.3 Compliance with Local Laws Manufacturer will comply with all applicable laws, restrictions and regulations in the Peoples Republic of China. EMV will comply with all applicable laws, restrictions and regulations in Canada. 10.4 Arbitration and Governing Law All disputes arising out of or in connection with this contract, or in respect of any defined legal relationship associated therewith or derived therefrom, shall be referred to and finally resolved by administered by the Hong Kong International Arbitration Centre (HKIAC) under the UNCITRAL Arbitration Rules in force when the Notice of Arbitration is submitted, as modified by the HKIAC Procedures for the Administration of International Arbitration. The place of arbitration shall be Hong Kong.This Agreement shall be governed by and construed under the laws of Hong Kong without regard to choice of laws principles. The language of arbitration shall be English 10.5 Partial Invalidity If any provision of this Agreement is held to be invalid, then the remaining provisions shall nevertheless remain in full force and effect, and the invalid or unenforceable provision shall be replaced by a term or provision that is valid and enforceable and that comes closest to expressing the intention of such invalid or unenforceable term or provision. 10.6 No Agency The parties hereto are independent contractors. Nothing contained herein or done in pursuance of this Agreement shall constitute either party the agent of the other party for any purpose or in any sense whatsoever, or constitute the parties as partners or joint venturers. 10.7 No Waiver No waiver of any term or condition of this Agreement shall be valid or binding on either party unless the same shall have been mutually assented to in writing by both parties. The failure of either party to enforce at any time any of the provisions of this Agreement, or the failure to require at any time performance by the other party of any of the provisions of this Agreement, shall in no way be construed to be a present or future waiver of such provisions, nor in any way effect the ability of either party to enforce each and every such provision thereafter. * Confidential treatment has been requested for certain portions of this Exhibit. The confidential portions of this Exhibit have been omitted and filed separately with the Securities and Exchange Commission. Such portions have been marked with "****" at the exact place where material has been omitted. 16 + + + + + + 10.8 No Publicity Either party, or any entity or representative acting on behalf of the Party, shall not refer to the other party, the Products and information furnished pursuant to the provisions of this contract in any press release or commercial advertising, or in connection with any news release or commercial advertising, without first obtaining explicit written consent to do so from the other party. The party, within 2 working days upon receiving the request for publicity from the other party, shall reply the other party. 10.9 Force Majeure Non-performance by either party shall be excused to the extent that performance is rendered impossible by strike, fire, flood, earthquake, or governmental acts, orders or restrictions; provided that the party unable to so perform uses commercially reasonable efforts to mitigate the impact of such non-performance. Notwithstanding any such efforts, any such non-performance shall be cause for termination of this Agreement by the other party if the non-performance continues for more than six (6) months. 10.10 Attorneys' Fees The prevailing party in any legal action brought by one party against the other and arising out of this Agreement shall be entitled, in addition to any other rights and remedies it may have, to reimbursement for its expenses, including costs and reasonable attorneys' fees. 10.11 Entire Agreement This Agreement sets forth the entire agreement and understanding of the parties relating to the subject matter herein and merges all prior discussions between them. No modification of or amendment to this Agreement, nor any waiver of any rights under this Agreement, shall be effective unless in writing signed by the parties. 10.12 Counterparts This Agreement may be executed in two or more counterparts and all counterparts so executed shall for all purposes constitute one agreement, binding on all parties hereto. 10.13 Language & Text This Agreement is made out in Chinese and English, both of which are of the same legal effect. Where any inconsistency occurs in account of the interpretation of these two texts, the English text shall be deemed superior. 10.14 Effectiveness This agreement shall come into effect immediately when it is signed by duly authoried representatives of both parties. [Signature Page Follows] * Confidential treatment has been requested for certain portions of this Exhibit. The confidential portions of this Exhibit have been omitted and filed separately with the Securities and Exchange Commission. Such portions have been marked with "****" at the exact place where material has been omitted. 17 + + + + + + IN WITNESS WHEREOF, each party to this agreement has caused it to be executed on the date indicated above. ELECTRAMECCANICA VEHICLES CORP. s/ Jerry Kroll Name: Jerry Kroll Title: CEO and General Manager CHONGQING ZONGSHEN AUTOMOBILE INDUSTRY CO., LTD. /s Liu Gang Name: LIU GANG Title: Authorized Signatory * Confidential treatment has been requested for certain portions of this Exhibit. The confidential portions of this Exhibit have been omitted and filed separately with the Securities and Exchange Commission. Such portions have been marked with "****" at the exact place where material has been omitted. 18 + + + + + + EXHIBIT A 3-YEAR PRODUCTION CAPACITY FORECAST Total 2018 5000 2019 20000 2020 50000 Total 75000 1. At the 1st stage, the facility & equipment is planned to be equipped according to 30,000 units/year as production capability. 2. Production capability can be adjusted to 50,000 units/year or even more according to market demand at the 2nd stage. 3. The investment on facility & equipment at the 1st stage will be discussed and confirmed according to the Development Timetable. * Confidential treatment has been requested for certain portions of this Exhibit. The confidential portions of this Exhibit have been omitted and filed separately with the Securities and Exchange Commission. Such portions have been marked with "****" at the exact place where material has been omitted. 19 + + + + + + Exhibit B SOLO DEVELOPMENT TIMETABLE Ref no. Key Activity Responsible party Output Target Finish Date Remarks + +1 Optimize design on 3D data ZS Evaluation report on 3D data **** + +2 Firs t round CAE analysis onoptimized 3D data ZS CAE analysis report **** + +3 Confirm suppliers ZS Suppliers list **** + +4 + +Calculation on cost, including v e h i c l e ' s c o m p o n e n t s c o s t , tool ing cos t , t es t ing cos t on vehicle and components + +ZS List of vehicle's components cost, toolings cost, vehicle and components test cost **** + +5 Improvement & modification on optimized 3D design and second round CAE analysis ZS 3D data, evaluation report andCAE analysis report **** + +6 Prototype and evaluation ZS & EMV 3 u n i t s o f p r o t o t y p e a n devaluation report **** EMV eng inee r a t ZS fo r evaluation & confirmation + +7 Molding Sample ZS Sample assembly and evaluationreport **** + +8 Performance testing and sampleimprovement & modification ZS Testing report & improvement plan **** + +9 Sample homologation EMV Certificate **** 10 Small batch samples & test ZS 1.sample, 2. Test report **** + +11 Improvement & modification onsmall batch samples ZS Complete technical data after improvement **** + +12 Small batch production ZS 10 units sample **** ****, 10 units for each month Notes：1. The timetable is based on the arrival date of the sample from EMV. 2. Each item shall be subject to the finish date of the previous item. 3. Both parties shall try best to find an optimized solution in case of any problems which may lead to delay of the project. * Confidential treatment has been requested for certain portions of this Exhibit. The confidential portions of this Exhibit have been omitted and filed separately with the Securities and Exchange Commission. Such portions have been marked with "****" at the exact place where material has been omitted. 20 \ No newline at end of file diff --git a/full_contract_txt/ELFBEAUTY,INC_07_02_2020-EX-10.1-COOPERATION AGREEMENT.txt b/full_contract_txt/ELFBEAUTY,INC_07_02_2020-EX-10.1-COOPERATION AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..484815ea30fc6a061cfb1b921d32dec764105709 --- /dev/null +++ b/full_contract_txt/ELFBEAUTY,INC_07_02_2020-EX-10.1-COOPERATION AGREEMENT.txt @@ -0,0 +1,295 @@ +Exhibit 10.1 + +COOPERATION AGREEMENT + +This Cooperation Agreement ("Agreement") is entered into as of July 1, 2020, by and between e.l.f. Beauty, Inc., a Delaware corporation (the "Company"), and Marathon Partners Equity Management, LLC ("Marathon Partners"), Marathon Partners L.P., Marathon Focus Fund L.P., Marathon Partners LUX Fund, L.P., Cibelli Research & Management, LLC and Mario Cibelli (collectively, the "Marathon Parties") (each of the Company, on the one hand, and the Marathon Parties, on the other hand, a "Party" to this Agreement, and collectively, the "Parties"). + +RECITALS + +WHEREAS, the Marathon Parties have voting power or sole dispositive power or otherwise have beneficial ownership of 2,585,000 shares of the common stock, par value $0.01 per share, of the Company (the "Common Stock") as of the date of this Agreement; + +WHEREAS, Marathon Partners submitted a letter to the Company on May 28, 2020 (the "Nomination Notice") nominating a slate of director candidates to be elected to the Board of Directors of the Company (the "Board") at the Company's 2020 Annual Meeting of Shareholders (the "2020 Annual Meeting"); and + +WHEREAS, as of the date of this Agreement, the Company and the Marathon Parties have determined to come to an agreement with respect to certain matters set forth below. + +NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the Parties to this Agreement, intending to be legally bound, agree as follows: + +1. Board Nomination; Certain Information; Other Board and Company Actions. + +(a) Lori Keith (the "New Director") has provided the Company with (i) fully completed and executed copies of the Company's standard director & officer questionnaire, representation and agreement letter, and other reasonable and customary director onboarding documentation, including (A) all information reasonably requested by the Company that is required to be disclosed for directors, candidates for directors, and their affiliates and representatives in a proxy statement or other filings under applicable law or regulation or stock exchange rules or listing standards, in each case, relating to their appointment, nomination or election as a director of the Company and (B) information reasonably requested by the Company in connection with assessing eligibility, independence and other criteria applicable to directors or satisfying compliance and legal or regulatory obligations, in each case, relating to their appointment, nomination or election as a director of the Company and required by the Company in connection with the appointment or election of new members of the Board, (ii) an executed consent of the New Director to be named in any proxy statement or other filings under applicable law or stock exchange rules or listing standards and to serve as a Class III Director and (iii) a written representation that the New Director, if elected as a director of the Company, would be in compliance, and will comply with, all applicable confidentiality, corporate governance, conflict of interest, Regulation FD, code of conduct and ethics, stock ownership and trading policies and guidelines, and other policies of the Company applicable to members of the Board (collectively, the "Information"), and has cooperated with a background check. + +(b) Based on the Information, the Nominating and Corporate Governance Committee (the "Nominating Committee") of the Board and the Board have determined that the New Director may serve as an "independent" director of the Company in accordance with the rules and listing standards of the New York Stock Exchange ("NYSE") and applicable rules and regulations of the U.S. Securities and Exchange Commission (the "SEC"). + +(c) As promptly as practicable, but in no event later than two business days following the execution of this Agreement, the Nominating Committee and the Board shall take all necessary action to (i) increase the size of the Board from eight to nine directors, with such new Board seat to be in Class III, (ii) appoint the New Director as a Class III director on the Board and (iii) appoint the New Director to the Nominating Committee. + + + + + +(d) Immediately following the execution of this Agreement by the Parties, the Marathon Parties shall send a letter to the Secretary of the Company irrevocably withdrawing (i) the Nomination Notice, and, accordingly, (ii) their nomination of Mario Cibelli, Dhiren Fonseca and Beth Birnbaum (the "Nominations") for election to the Board as Class I directors at the 2020 Annual Meeting and (iii) the Marathon Parties' demand letter pursuant to Section 220 of the Delaware General Corporation Law, dated April 12, 2019. + +(e) The Board shall take all necessary action to include in the proposals to be voted on at the 2020 Annual Meeting (i) a "say-on-pay" proposal of the Company and (ii) a vote as to the frequency at which "say-on-pay" proposals will be presented to and voted on by the stockholders at future annual meetings of the Company, which shall include a recommendation by the Board that stockholders vote "FOR" annual "say-on-pay" proposals. + +(f) The Board shall take all necessary action to amend Section 3.1(a) of the 2016 Equity Incentive Award Plan of the Company (the "2016 Incentive Plan") to reduce the maximum automatic annual percentage increase of shares of Common Stock reserved for issuance under the 2016 Incentive Plan from 4% to 2%. During the Support Period (as defined below), the Board shall not (i) adopt a new equity incentive award plan or otherwise seek to amend the 2016 Incentive Plan to increase the Share Limit (as defined in the 2016 Incentive Plan) or (ii) issue Awards (as defined in the 2016 Incentive Plan) in excess of the Share Limit (as defined in the 2016 Incentive Plan). + +(g) The New Director (or any Replacement (as defined below)), in addition to all current directors, will (A) comply with all policies, procedures, codes, rules, standards and guidelines applicable to members of the Board and (B) keep confidential all Company confidential information and not disclose to any third parties (including the Marathon Parties) discussions or matters considered in meetings of the Board or Board committees. + +(h) Annual grants of equity awards to executive officers of the Company in 2021 will take place during the open trading window following the Company's fourth quarter earnings call in 2021. The proxy statement for the 2020 Annual Meeting shall include language describing the obligation of the Company set forth in this Section 1(h). + +(i) Nothing in this Agreement shall be deemed to abridge or limit the fiduciary duties of any member of the Board under Delaware law. + +(j) The New Director (or any Replacement (as defined below)) may attend as a non-voting observer any meeting(s) of the Compensation Committee of the Board (the "Compensation Committee") held following the date of this Agreement and during the Support Period, and shall receive a copy of any materials disseminated to Compensation Committee members in connection with such meeting(s). + +2. Representations of the Marathon Parties. The Marathon Parties represent and warrant to the Company as of the date hereof as follows: + +(a) The Marathon Parties are the beneficial owners of 2,585,000 shares of Common Stock, such shares of Common Stock constitute all of the Common Stock beneficially owned by the Marathon Parties, and (i) the Marathon Parties' interests in the Common Stock and debt or other securities of the Company is as set forth on Exhibit A, (ii) except as set forth on Exhibit A, the Marathon Parties do not currently have, and do not currently have any right to acquire, any interest in any other securities of the Company (or any rights, options or other securities convertible into or exercisable or exchangeable (whether or not convertible, exercisable or exchangeable immediately or only after the passage of time or the occurrence of a specified event) for such securities or any obligations measured by the price or value of any securities of the Company or any of its controlled Affiliates, including any swaps, puts, calls, appreciation rights or other derivative arrangements designed to produce economic benefits and risks that correspond to the ownership of Common Stock, whether or not any of the foregoing would give rise to beneficial ownership, and whether or not to be settled by delivery of Common Stock, payment of cash or by other consideration, and without regard to any short position under any such contract or arrangement) (collectively, "Securities of the Company") and (iii) the Marathon Parties will not, directly or indirectly, compensate or agree to compensate the New Director for her service as a director of the Company with any cash, securities (including any rights or options convertible into or exercisable for or exchangeable into securities or any profit sharing agreement or arrangement), or other form of compensation. The terms + +2 + + + + + +"beneficially owns" and "beneficial ownership" for all purposes under this Agreement shall have the meanings set forth in Rule 13d-3 promulgated by the SEC under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). As used in this Agreement, the terms "Affiliate" and "Associate" shall have the respective meanings set forth in Rule 12b-2 promulgated by the SEC under the Exchange Act. + +(b) The Marathon Parties have no agreements, understandings or undertakings with any third party to share or delegate disposition or voting control over any of the securities set forth on Exhibit A, or to transfer, hypothecate or lend any of the securities set forth on Exhibit A. + +(c) Each of the Marathon Parties represents and warrants to the Company as of the date hereof that it has the power and authority to execute and deliver this Agreement. This Agreement (i) has been duly and validly authorized by each of the Marathon Parties, and constitutes a legal, valid and binding obligation of each of the Marathon Parties, enforceable against each of the Marathon Parties in accordance with its terms except as may be limited by bankruptcy, insolvency or similar laws affecting creditors' rights and general equitable principles, (ii) does not require the approval of any investor in or member of the Marathon Parties and (iii) does not violate any law, order of any court or any governmental agency or regulation or the charter or any organizational document of the Marathon Parties, or conflict with, result in a breach of or constitute a default under any agreement or instrument by which the Marathon Parties or any of their respective assets is bound. + +3. Representations of the Company. The Company represents and warrants to the Marathon Parties as of the date hereof that it has the corporate power and authority to execute and deliver this Agreement. This Agreement (i) has been duly and validly authorized by the Company and constitutes a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms except as may be limited by bankruptcy, insolvency or similar laws affecting creditors' rights and general equitable principles and (ii) does not violate any law, order of any court or any agency or regulation or the Company's Certificate of Incorporation or the Amended and Restated Bylaws of the Company (the "Bylaws"), or conflict with, result in a breach of or constitute a default under any agreement or instrument by which the Company or any of its assets or the assets of its subsidiaries are bound. The Company further represents and warrants to the Marathon Parties as of the date hereof that since March 2, 2019 it has not granted any performance equity awards to any named executive officers other than those disclosed or referenced by the Company in its Forms 4 filed with the SEC in June 2020. + +4. Support Period Covenants. + +(a) During the period commencing on the date hereof and ending at 11:59 pm New York Time on the date that is thirty (30) days prior to expiration of the advance notice period for the submission by stockholders of director nominations for consideration at the Company's 2021 Annual Meeting of Stockholders (the "2021 Annual Meeting") as determined by applicable law and set forth in the Bylaws (such period, as modified, if applicable, in Section 4(b) below, the "Support Period"), the Marathon Parties shall appear in person or by proxy for quorum purposes at the 2020 Annual Meeting and any other meeting of stockholders of the Company, including any adjournment or postponement thereof, to vote all of the shares of Common Stock beneficially owned by the Marathon Parties on the record date for such meeting (i) in favor of all persons nominated by the Board to serve as directors of the Company and against any stockholder nominated candidate not endorsed by the Board, (ii) to ratify the appointment of the Company's independent registered public accounting firm, (iii) in accordance with the Board's recommendation with respect to the Company's "say-on-pay" proposal and compensation plans and any amendments thereto and (iv) in favor of any other proposals recommended by the Board, provided, that with respect to any extraordinary matter, including any merger, acquisition, recapitalization, restructuring, financing, disposition, distribution, spin-off, asset sale, joint venture or other business combination involving the Company or its subsidiaries which requires a vote of the Company's stockholders, the Marathon Parties shall have the right to vote the shares of Common Stock beneficially owned by the Marathon Parties in their sole discretion. The Marathon Parties shall provide written evidence of such vote to the Company no later than ten (10) business days prior to the 2020 Annual Meeting. + +(b) Notwithstanding the foregoing, if either: + +3 + + + + + +(i) at any time between the date of this Agreement and the date that is thirty (30) days prior to the expiration of the advance notice period for the submission by stockholders of director nominations for consideration at the 2021 Annual Meeting as determined by applicable law and set forth in the Bylaws (such date, the "2021 Annual Meeting Nomination Window Date"), the Marathon Parties do not meet the Minimum Ownership Threshold (as defined below), or + +(ii) as of the 2021 Annual Meeting Nomination Window Date, all of the following conditions have been met: + +a. if the New Director or her Replacement is a director on the Board as of the 2021 Annual Meeting Nomination Window Date, the New Director or her Replacement (as applicable) is a member of the Nominating Committee as of such date, + +b. between the date of this Agreement and the 2021 Annual Meeting Nomination Window Date, Tarang Amin has not entered into a voting agreement or similar agreement that would subject any Securities of the Company beneficially owned by Mr. Amin to any arrangement or agreement with respect to the voting thereof with any other person that is a holder of any Securities of the Company and that is not affiliated with Mr. Amin or his estate planning, or that would give Mr. Amin the power to vote or direct the voting of any Securities of the Company beneficially owned by any other person that is not affiliated with Mr. Amin or his estate planning, + +c. between the date of this Agreement and the 2021 Annual Meeting Nomination Window Date, the Company has not issued shares of Common Stock (and/or Securities of the Company convertible into, or exercisable for, shares of Common Stock) in any transaction that represents more than 20% of the issued and outstanding shares of Common Stock (including any Securities of the Company convertible into, or exercisable for, shares of Common Stock) immediately prior to such issuance, + +d. the Company has confirmed that the proxy statement for the 2021 Annual Meeting shall include language describing the obligation of the Company set forth in Section 1(h) above as relates to annual grants of equity awards to executive officers of the Company in 2022, and + +e. the Company has confirmed that any director(s) or officer(s) of the Company who beneficially owned 3% or more of the issued and outstanding shares of Common Stock as of the record date for the 2020 Annual Meeting voted all such shares at the 2020 Annual Meeting in favor of annual "say-on-pay" proposal frequency at future annual meetings of the Company, + +then, for all purposes under this Agreement, the Support Period shall not expire on the 2021 Annual Meeting Nomination Window Date, and instead the Support Period shall automatically be extended until 11:59 pm New York Time on the date that is thirty (30) days prior to expiration of the advance notice period for the submission by stockholders of director nominations for consideration at the Company's 2022 Annual Meeting of Stockholders as determined by applicable law and set forth in the Bylaws for all purposes under this Agreement, and the Marathon Parties shall be required to (x) appear in person or by proxy at the 2021 Annual Meeting or any other meeting of stockholders of the Company held on or after the 2021 Annual Meeting Nomination Window Date and prior to the end of the Support Period, (y) vote any of the shares of Common Stock beneficially owned by the Marathon Parties in accordance with Section 4(a)(i), (ii), (iii) and (iv) at any meeting of stockholders of the Company held on or after the 2021 Annual Meeting Nomination Window Date and prior to the end of the Support Period, provided, however, that in the event that Institutional Shareholder Services Inc. ("ISS") recommends otherwise with respect to the Company's "say-on-pay" proposal or any proposal relating to any compensation plan submitted for shareholder approval at the 2021 Annual Meeting, including any amendments thereto, each of the Marathon Parties will be permitted to vote in accordance with the ISS + +4 + + + + + +recommendation in its discretion, and (z) provide written evidence of such vote by the Marathon Parties at any meeting of stockholders of the Company held on or after the 2021 Annual Meeting Nomination Window Date and prior to the end of the Support Period (including the 2021 Annual Meeting) no later than ten (10) business days prior to any such meeting (including the 2021 Annual Meeting). As used herein, the "Minimum Ownership Threshold" shall mean beneficial ownership equal to or greater than 2.0% of the issued and outstanding shares of Common Stock. The Marathon Parties shall provide notice to the Company within two business days following the date on which the Marathon Parties no longer meet the Minimum Ownership Threshold. + +(c) If at any time during the Support Period (x) the New Director is unable to serve out her term as a Class III Director on the Board for any reason, and (y) as of such time, the Marathon Parties have maintained since the date of this Agreement the Minimum Ownership Threshold and the Marathon Parties have provided evidence of such ownership, together with a certification of such ownership, to the Company, then the Marathon Parties and the Company shall negotiate in good faith to propose a mutually-agreed upon replacement director (the "Replacement") to be appointed to the Board to serve as her successor for the remainder of her current term as a Class III Director in accordance with the Bylaws, provided such Replacement (i) qualifies as "independent" pursuant to the rules and listing standards of the NYSE and applicable SEC rules and regulations, (ii) has provided the Company with the Information, (iii) has cooperated with a background check and (iv) has executed all documents required to be executed by directors of the Company. The Replacement shall be promptly appointed to the Board and at least one standing committee of the Board, subject to the approval by each of the Nominating Committee and the Board, after conducting a good faith customary due diligence process and consistent with the Board's fiduciary duties. + +5. Standstill Covenants. + +(a) Except as otherwise contemplated in Section 4 of this Agreement, at all times during the Support Period, the Marathon Parties shall not, and shall cause their Affiliates and Associates and their and such Affiliates' and Associates' respective equity owners (including members and limited partners), directors, officers, managers and employees not to, and will direct their consultants, agents, representatives, attorneys and advisors (to the extent directly or indirectly acting on behalf of the Marathon Parties) (collectively, the "Marathon Party Representatives") not to, directly or indirectly, in any manner, alone or in concert with others: + +(i) make, engage, solicit, or in any way participate in any "solicitation" of proxies (as such term under the Exchange Act) or consents to vote, or knowingly advise, encourage or influence any person or entity with respect to the voting of any Securities of the Company or become a "participant" in any contested "solicitation" for the election of directors with respect to the Company (as such terms are defined or used under the Exchange Act) (other than a "solicitation" or acting as a "participant" in support of all of the nominees recommended by the Board at any stockholder meeting); + +(ii) propose or otherwise solicit stockholders of the Company for the approval of one or more stockholder proposals (whether made pursuant to Rule 14a-8 under the Exchange Act or otherwise) or call, attempt to call or solicit consents to call a special meeting of stockholders of the Company; + +(iii) agree or propose to grant any proxies with respect to, or deposit any Securities of the Company in a voting trust or similar arrangement or subject any Securities of the Company to any arrangement or agreement with respect to the voting thereof, except as expressly set forth in Section 4 of this Agreement; + +(iv) take any action to form, join, encourage, influence or in any way participate in any partnership, limited partnership, syndicate or other group (as such term is contemplated in Rule 13d-5 promulgated under the Exchange Act) with respect to the Securities of the Company (other than a group formed with an Affiliate of the Marathon Parties) or otherwise act in concert with any person or entity for the purpose of circumventing the provisions or purposes of this Agreement; + +(v) purchase or otherwise acquire, or offer, seek, propose or agree to acquire, ownership (including beneficial ownership) of the Securities of the Company, any direct or indirect rights or options to + +5 + + + + + +acquire any such Securities of the Company, any derivative securities or contracts or instruments in any way related to the price of shares or value of Common Stock, any other securities of the Company, or any assets or liabilities of the Company, provided that the Marathon Parties and their Affiliates, in the aggregate, may acquire beneficial ownership of up to 12.5% of the Company's outstanding shares of Common Stock; + +(vi) other than in open-market transactions where the identity of the purchaser is not known and in underwritten widely dispersed public offerings, sell, offer or agree to sell, directly or indirectly, through swap or hedging transactions or otherwise, the Securities of the Company or any rights decoupled from the underlying Securities of the Company held by the Marathon Parties or any of their Affiliates or Associates to any person or entity not (A) a party to this Agreement, (B) a member of the Board or (C) an officer of the Company (any person or entity not set forth in clauses (A)-(C) shall be referred to as a "Third Party"), that would knowingly result in such Third Party, together with its Affiliates and Associates, owning, controlling or otherwise having any beneficial or other ownership interest in the aggregate of more than 4.9% of the shares of Common Stock outstanding at such time, other than Schedule 13G filers that are mutual funds, pension funds, index funds or investment fund managers with no known history of activism or known plans to engage in activism, except in a transaction approved in advance by the Board; + +(vii) effect or seek to effect, offer or propose to effect, cause or participate in, or knowingly assist or facilitate any other person or entity to effect or seek, offer or propose to effect or participate in, any tender or exchange offer, merger, consolidation, division, acquisition, scheme, arrangement, business combination, recapitalization, reorganization, sale or acquisition of material assets, liquidation, dissolution or other extraordinary transaction involving the Company or any of its subsidiaries or joint ventures or any of their respective securities (each, an "Extraordinary Transaction"), or make any public statement with respect to an Extraordinary Transaction; provided, however, that nothing in this Agreement shall prevent the Marathon Parties from making a public statement about how they intend to vote and the reasons therefor with respect to any Extraordinary Transaction to which any executive officer or director of the Company is a party (other than customary support agreements) and that requires a vote of the Company's stockholders; provided further, that this clause shall not preclude the tender by the Marathon Parties or any of their Affiliates or Associates of any Securities of the Company into any tender or exchange offer which has been approved and recommended to stockholders of the Company by the Board; + +(viii) (A) seek or solicit support for (whether publicly or privately) any written consent of stockholders of the Company, (B) seek representation on, or nominate any candidate to, the Board, except as set forth in Section 1 of this Agreement, (C) seek the removal of any member of the Board, (D) conduct a referendum of stockholders, (E) institute any litigation against the Company, its directors or its officers other than to (1) enforce the provisions of this Agreement and (2) make counterclaims with respect to any proceeding initiated by, or on behalf of, the Company against the Marathon Parties, or (F) make a request for any stockholder list or other Company books and records, whether pursuant to Section 220 of the Delaware General Corporation Law or otherwise; + +(ix) knowingly encourage, advise or influence any other person or assist any Third Party in so encouraging, assisting or influencing any person or entity with respect to the giving or withholding of any proxy vote at the 2020 Annual Meeting or the 2021 Annual Meeting (including any "vote no" or "withhold vote" or similar campaign); + +(x) take any action in support of or make any proposal or request that constitutes: (A) advising, controlling, changing or influencing the Board or management of the Company, including any plans or proposals to change the number or term of directors or to fill any vacancies on the Board or unfilled newly-created directorships; (B) any material change in the capitalization, stock repurchase programs and practices or dividend policy of the Company; (C) any other material change in the Company's management, business or corporate structure, including, without limitation, its capital allocation, expense structure, business operations or strategies or its management or other personnel; (D) seeking to have the Company waive or make amendments or modifications to the Company's Certificate of Incorporation or the Bylaws, or other actions that may impede or facilitate the acquisition of control of the Company by any person or entity; + +6 + + + + + +(E) causing a class of Securities of the Company to be delisted from, or to cease to be authorized to be quoted on, any securities exchange; or (F) causing a class of Securities of the Company to become eligible for termination of registration pursuant to Section 12(g)(4) of the Exchange Act; + +(xi) otherwise act in concert with any person or entity to seek to control or direct the management, Board (or any individual members thereof), stockholders or policies of the Company; + +(xii) take any action that would require the Marathon Parties or any of their Affiliates or Associates to file a statement of beneficial ownership report on Schedule 13D or any amendment thereto with the SEC, other than solely as a result of the purchase or sale by the Marathon Parties of Securities of the Company set forth on Exhibit A; + +(xiii) make any public disclosure, announcement or statement regarding any intent, purpose, plan or proposal with respect to the Board, the Company, its management, policies or affairs, any Securities of the Company or assets of the Company or this Agreement; + +(xiv) enter into substantive discussions, negotiations, agreements or understandings with any Third Party with respect to the foregoing, or solicit, assist, prompt, induce or attempt to induce any Third Party to take any action or make any statement with respect to any of the foregoing, or otherwise take or cause any action or make any statement inconsistent with any of the foregoing; or + +(xv) request, directly or indirectly, any amendment or waiver of this Section 5(a). + +(b) Notwithstanding anything contained in this Agreement to the contrary: + +(i) Nothing in this Section 5(a) shall prohibit or restrict the Marathon Parties from taking any action necessary to comply with any law, rule or regulation or any action required by any governmental or regulatory authority or stock exchange that has jurisdiction over the Marathon Parties or any of their Affiliates or Associates. The provisions of this Section 5(a) shall also not prevent the Marathon Parties from freely voting their Shares (except as otherwise provided in this Agreement) or taking any actions except as specifically contemplated in this Agreement. + +(ii) The Marathon Parties shall be responsible for any breach of this Section 5(a) by any of their Affiliates or Associates or any Marathon Party Representatives. + +6. Mutual Non-Disparagement; No Public Statements. + +(a) Subject to applicable law, the Company, on the one hand, and each of the Marathon Parties on the other hand, covenants and agrees that, during the Support Period or if earlier, until such time as the other Party or any of its or her officers, directors, employees, subsidiaries, Affiliates, Associates, agents, attorneys or other representatives (collectively, the "Representatives") shall have breached this section, neither it nor any of its respective Representatives acting, directly or indirectly, at its direction or on its behalf, shall in any way publicly (including by any communication with other investors or prospective investors in the Company where such communications could reasonably be expected to be made public or trigger a public disclosure obligation, with securities analysts or any member of traditional or digital media) criticize, disparage, call into disrepute or otherwise defame or slander the other Party or such other Party's Representatives (including any current officer or director of a Party or a Party's subsidiaries who no longer serves in such capacity at any time following the execution of this Agreement), or any of their businesses, products or services, in any manner that would reasonably be expected to damage the business or reputation of such other Party. + +(b) During the Support Period and except for the filing or amendment of a statement of beneficial ownership report on Schedule 13D in relation to the purchase or sale of Common Stock, neither the Marathon Parties nor any of their Representatives, acting at the direction of, or on behalf of, the Marathon Parties shall make any public statement relating to the Company nor take any action which would reasonably be expected to require any public filing + +7 + + + + + +related to the Company without prior written approval from the Company; provided, however, that nothing in this Agreement shall prevent the Marathon Parties from making a public statement about how they intend to vote and the reasons therefor with respect to any Extraordinary Transaction to which any executive officer or director of the Company is a party (other than customary support agreements) and that requires a vote of the Company's stockholders. + +(c) Each Party shall be responsible for any breach of this Section 6 by any of their respective Representatives. + +(d) During the Support Period, so long as the Marathon Parties have maintained since the date of this Agreement the Minimum Ownership Threshold, (i) management of the Company (together with the Company's Lead Independent Director, should such director elect to participate) will hold a customary investor conference call, for up to 45 minutes, with Mr. Cibelli and other representatives of the Marathon Parties following each of the Company's quarterly and annual earnings calls, and (ii) promptly following such call, the Lead Independent Director of the Company (together with any other independent directors of the Company selected by the Lead Independent Director to attend such meeting) will participate in a call with Mr. Cibelli and other representatives of the Marathon Parties without management of the Company present for up to 15 minutes (the calls in (i) and (ii), "Quarterly Investor Conference Calls"). The Marathon Parties shall provide the Company with a detailed agenda of discussion topics for the portion of the Quarterly Investor Conference Call with the Lead Independent Director no later than three business days prior to the date of such Quarterly Investor Conference Call. Should the Marathon Parties forgo a Quarterly Investor Conference Call, any unused minutes from such relinquished Quarterly Investor Conference Call shall carry over to the Quarterly Investor Conference Call being held the following quarter; provided, however, for the avoidance of doubt, any unused minutes from a Quarterly Investor Conference Call shall not carry over more than one successive quarter. + +(e) Between the date of this Agreement and the 2021 Annual Meeting Nomination Window Date, no Marathon Party or any of their Representatives will contact or communicate with the Company or any of its Representatives (including any member of the Board) in any way or through any media other than at a Quarterly Investor Conference Call, in connection with arranging any such Quarterly Investor Conference Call or in connection with the Marathon Party's specific rights and obligations under this Agreement. Any communications from any Marathon Party or any of their Representatives in connection with arranging any such Quarterly Investor Conference Call or in connection with the Marathon Party's rights and obligations under this Agreement must be directed to the Parties in accordance with the notice provisions in Section 8(l), and no Marathon Party or any of their Representatives will contact or communicate with the Company or any of its Representatives (including any member of the Board) in any other manner unless agreed to in writing by the Company. + +(f) In the event that the Support Period is automatically extended pursuant to Section 4(b), then, following the 2021 Annual Meeting Nomination Window Date, the Marathon Parties agree that any and all contacts and communications regarding the Company, as well as any request by any of the Marathon Parties or any of the Marathon Party Representatives to contact, communicate or meet with the Company or any of its Representatives (including any member of the Board), shall be directed solely to the Company's General Counsel. Any such communications from any of the Marathon Parties or any of the Marathon Party Representatives in connection with arranging any Quarterly Investor Conference Call or in connection with the Marathon Parties' rights and obligations under this Agreement shall be directed solely to the Company's General Counsel. + +7. Press Release. The Parties agree that the Company shall issue a press release (the "Press Release") in substantially the form attached hereto as Exhibit B promptly following the execution and delivery of this Agreement by the Parties. + +8. Miscellaneous. + +(a) Specific Enforcement; Special Remedy. Each of the Parties agrees that the other Party would be irreparably injured in the event that any provision of the Agreement is breached or not performed. Accordingly, it is agreed that each Party shall be entitled to temporary and permanent injunctive relief with respect to each and any breach or purported repudiation of this Agreement by the other and to specifically enforce strict adherence to this Agreement and the terms and provisions hereof against the other in any action instituted in a court of competent + +8 + + + + + +jurisdiction, in addition to any other remedy which such aggrieved Party may be entitled to obtain. Moreover, in the event of the breach of any of the provisions of this Agreement, timeliness in obtaining relief is of the essence. + +(b) Amendments; Waiver. Neither this Agreement nor any term hereof may be changed, waived, discharged or terminated orally or in writing, except that any term of this Agreement may be amended by a writing signed by the Parties, and the observance of any such term may be waived (either generally or in a particular instance and either retroactively or prospectively) solely in a writing signed by the Party against whom such waiver is to be asserted. No delay on the part of either Party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any waiver on the part of either Party of any right, power or privilege hereunder operate as a waiver of any other right, power or privilege hereunder, nor shall any single or partial exercise of any right, power or privilege hereunder, preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder. + +(c) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties. This Agreement may not be assigned without the prior written consent of the other Party hereto. + +(d) No Third-Party Beneficiaries. Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any person or entity, other than the Parties and their respective successors and assigns, any legal or equitable right, remedy or claim under or in respect of this Agreement and any conditions and provisions hereof being intended to be and being for the sole and exclusive benefit of the parties hereto and their respective successors and assigns, and for the benefit of no other person or entity. + +(e) Counterparts. This Agreement may be executed in any number of counterparts and by the Parties in separate counterparts (including by facsimile signature, Docusign or other form of electronic signature), each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. This Agreement may be executed and delivered by the Parties electronically, including by electronic mail, .pdf, Docusign, or other means of electronic delivery. + +(f) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. + +(g) Governing Law; Choice of Venue. + +(i) This Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware applicable to agreements made and to be performed within that state, without giving effect to any law or principals of law that would result in the application of the laws of any other jurisdiction. + +(ii) Each Party (A) consents to submit itself to the personal jurisdiction of the Court of Chancery or other federal or state courts of the State of Delaware in the event any dispute arises out of this Agreement or the transactions contemplated by this Agreement, (B) agrees that it shall not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court, (C) agrees that it shall not bring any action relating to this Agreement or the transactions contemplated by this Agreement in any court other than the Court of Chancery or other federal or state courts of the State of Delaware, and each Party irrevocably waives the right to trial by jury and (D) irrevocably consents to service of process by a reputable overnight mail delivery service, signature requested, to the address of such Party's principal place of business or as otherwise provided by applicable law. + +(h) Reimbursement. The Company shall reimburse the Marathon Parties for their reasonable out-of-pocket expenses, including the reasonable fees and expenses of counsel, incurred in connection with their engagement with the Company, the Nominations and the negotiation of, and all matters arising under this Agreement; provided, however, that such reimbursement shall not exceed $250,000. + +9 + + + + + +(i) Severability. If at any time subsequent to the date hereof, any provision of this Agreement shall be held by any court of competent jurisdiction to be illegal, void or unenforceable, such provision shall be of no force and effect, but the illegality or unenforceability of such provision shall have no effect upon the legality or enforceability of any other provision in this Agreement. + +(j) Interpretation and Construction. Each of the Parties acknowledges that it has been represented by counsel of its choice throughout all negotiations that have preceded the execution of this Agreement, and that it has executed the same with the advice of said independent counsel. Each Party and its counsel cooperated and participated in the drafting and preparation of this Agreement and the documents referred to herein, and any and all drafts relating thereto exchanged among the parties shall be deemed the work product of all of the parties and may not be construed against any Party by reason of its drafting or preparation. Accordingly, any rule of law or any legal decision that would require interpretation of any ambiguities in this Agreement against any Party that drafted or prepared it is of no application and is hereby expressly waived by each Party, and any controversy over interpretations of this Agreement shall be decided without regards to events of drafting or preparation. For purposes of this Agreement, the term "including" shall be deemed to be followed by the words "without limitation." + +(k) Entire Agreement. This Agreement contains the entire understanding of the Parties with respect to the subject matter hereof. + +(l) Notices. Any notices, consents, determinations, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by e-mail to the e-mail address for a Party set forth below; and (iii) one (1) business day after deposit with a nationally recognized overnight delivery service, in each case properly addressed to the Party to receive the same. The addresses for such communications shall be: + +If to the Company or the Board: + +e.l.f. Beauty, Inc. 570 10th Street Oakland, CA 94607 Attention: General Counsel Email: *** + +with a copy (which shall not constitute notice) to: + +Latham & Watkins LLP 140 Scott Drive Menlo Park, CA 94025 Attention: Tad Freese and Josh Dubofsky E-mail: Tad.Freese@lw.com and Josh.Dubofsky@lw.com + +If to the Marathon Parties: + +Marathon Partners Equity Management, LLC Attention: Mario Cibelli Email: *** + +with a copy (which shall not constitute notice) to: + +Olshan Frome Wolosky LLP 1325 Avenue of the Americas New York, NY 10019 Attention: Andrew Freedman E-mail: AFreedman@olshanlaw.com + +10 + + + + + +(m) Termination. Unless earlier terminated as provided in this Agreement, upon the expiration of the Support Period, this Agreement shall immediately and automatically terminate in its entirety and no Party shall have any further rights or obligations under this Agreement; provided, however, (i) that this Section 8 shall survive any such termination and (ii) no Party shall be released from any breach of this Agreement that occurred prior to the termination of this Agreement. + +[Signature Pages Follow] + +11 + + + + + +IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement, or caused the same to be executed by its duly authorized representative as of the date first above written. + +E.L.F. BEAUTY, INC. + +By: /s/ Scott Milsten Name: Scott Milsten Title: General Counsel + +[Signature Page to Cooperation Agreement] + + + + + +Marathon Partners Equity Management, LLC + +By: /s/ Mario D. Cibell Name: Mario D. Cibelli Title: Managing Member + +Marathon Partners L.P. + +By: Marathon Partners Equity Management, LLC, its General Partner + +By: /s/ Mario D. Cibell Name: Mario D. Cibelli Title: Managing Member + +Marathon Focus Fund L.P. + +By: Cibelli Research & Management, LLC, its General Partner + +By: /s/ Mario D. Cibell Name: Mario D. Cibelli Title: Managing Member + +Marathon Partners LUX Fund, L.P. + +By: Cibelli Research & Management, LLC, its General Partner + +By: /s/ Mario D. Cibell Name: Mario D. Cibelli Title: Managing Member + +Cibelli Research & Management, LLC + +By: /s/ Mario D. Cibell Name: Mario D. Cibelli Title: Managing Member + +By: /s/ Mario D. Cibell Name: Mario D. Cibelli + +[Signature Page to Cooperation Agreement] \ No newline at end of file diff --git a/full_contract_txt/EMERALDHEALTHTHERAPEUTICSINC_06_10_2020-EX-4.5-CONSULTING AGREEMENT - DR. GAETANO MORELLO N.D. INC..txt b/full_contract_txt/EMERALDHEALTHTHERAPEUTICSINC_06_10_2020-EX-4.5-CONSULTING AGREEMENT - DR. GAETANO MORELLO N.D. INC..txt new file mode 100644 index 0000000000000000000000000000000000000000..a7788eec16f66ac84700de5e1f9687e2bba72c9f --- /dev/null +++ b/full_contract_txt/EMERALDHEALTHTHERAPEUTICSINC_06_10_2020-EX-4.5-CONSULTING AGREEMENT - DR. GAETANO MORELLO N.D. INC..txt @@ -0,0 +1,147 @@ +Exhibit 4.5 + +CONSULTING AGREEMENT - DR. GAETANO MORELLO N.D. INC. + +THIS AGREEMENT made effective the 10 day of January 2019 (the "Effective Date"), + +BETWEEN: + +EMERALD HEALTH NATURALS, INC., a company having its registered and records office at 7860 Venture Street, Burnaby, BC V5A 1V3 + +("Emerald" or the "Company") + +AND: + +DR. GAETANO MORELLO N.D. INC., Businessperson, having an office at 2975 East 4th Avenue, Vancouver, B.C. V5M 1L1 + +(the "Contractor") + +WITNESSES THAT WHEREAS Emerald would like to engage the Contractor as an independent contractor of Emerald, and the Contractor would like to be engaged by Emerald as an independent contractor, on the terms and conditions contained herein; + +IN CONSIDERATION of the mutual agreements in this Agreement and subject to the terms and conditions specified in this Agreement, the parties agree as follows: + +1. Definitions + +1.1 In this Agreement, including the recitals and the schedules, the defined words and expressions have the meanings set out on Schedule "A" to this Agreement unless the context otherwise required. + +2. Scope of Engagement + +2.1 Position. The Company hereby engages the Contractor as an independent contractor and the Contractor hereby agrees to such engagement. + +2.2 Services. The Company engages the Contractor to fulfill the services (the "Services") as described on Schedule "B" on the terms and conditions of this Agreement. The Services may be replaced, amended, superseded, or supplemented from time to time by agreement between the Company and the Contractor. + +2.3 Reporting and Oversight Responsibility. The Contractor will report to and take instructions from Avtar Dhillon, President and Executive Chair. + +2.4 Commitment of the Contractor. The Contractor will devote sufficient time and attention to the business and affairs of Emerald to provide the Services, use his or her best efforts to promote the interests of Emerald, and will carry out his or her Services honestly, in good faith and in the best interests of Emerald. + +2.5 Not Employment. The parties acknowledge and agree that the relationship created by operation of this Agreement is not an employment relationship. + +3. Fees + +3.1 Fee. The Company will pay to the Contractor an annual fee (the "Fee") of $240,000. per year plus plus GST and applicable taxes, if any. + + + + + +3.2 Reimbursement of Expenses. Emerald will reimburse the Contractor for all reasonable expenses incurred in the performance of his or her Services, provided that the Contractor provides a written expense account in a form satisfactory to the Lead Director of the Company. + +3.3 Deductions and Remittances. Emerald shall not be obliged to deduct or retain from the Fees due to the Contractor, nor shall it be obliged to remit same to the required governmental authority, any amounts that may be required by law or regulation to be deducted, retained and remitted including, without limitation, Federal and Provincial or State Income Tax, Workers' Compensation and Pension Plan deductions and remittances. All such remittances and other payments are entirely the responsibility of the Contractor and the Contractor hereby indemnifies and saves Emerald and its Board members and officers harmless from any liability of any kind whatsoever that they may incur as a result of the Contractor's failure to make such remittances or payments. + +3.4 Other Boards, Charities and Business Activities. The Contractor's performance of personal, business or charitable activities or service on any boards of any private or public companies, shall be deemed not to be preventing the Contractor from meeting his or her obligations to Emerald hereunder, so long as same are not directly competitive with the business of the Company. Emerald acknowledges and agrees that the Contractor or Contractor may have other business involvements, business interests and sources of business income with parties that Emerald does or does not have a business relationship with. The Contractor is permitted to undertake such activities and retain all of the compensation received from such activities provided that such activities do not prevent, inhibit or impair the Contractor from meeting his or her obligations to Emerald hereunder. + +4. Secondment + +4.1 Although the Contractor is being hired as an independent contractor to Emerald, it is acknowledged and agreed that the Contractor will generally best promote the interests of Emerald by being seconded, or providing material advice and support, to one or more of Emerald's subsidiaries, Affiliates or associates (the "Portfolio Companies"). + +4.2 While the Contractor is seconded to Portfolio Company, the Contractor may be paid his or her Fee in whole or in part by such Portfolio Company, at the discretion of Emerald. + +5. Term and Termination + +5.1 Term. The term of this Agreement shall commence on January 10th, 2019 and shall expire on the day that is twenty-four (24) months from that date (the "Term of Engagement") unless terminated earlier in accordance with this Agreement. The parties may mutually agree to extend this Agreement in writing and all terms and conditions hereof shall remain in effect during any extension unless the parties agree otherwise. + +5.2 Contractor's Right to Terminate Agreement for any Reason. The Contractor may terminate this Agreement and his or her engagement for any reason at any time upon providing 30 days advance notice in writing to Emerald. Termination will be effective, at Emeralds' election, on a date which is no earlier than the date such notice is received and no later than the date which is 30 days following that date. + +5.3 Emeralds' Right to Terminate this Agreement for Cause. The Company may terminate this Agreement and the Contractor's engagement for Cause at any time on written notice to the Contractor. The date of termination will be the date specified in the written notice and may be, in the sole discretion of the Company, the same day the notice is given to the Contractor, or such later date as the Company may decide. + +5.4 Emeralds' Right to Terminate this Agreement without Cause. The Company may terminate this Agreement and the engagement of the Contractor without Cause at any time on 30 days prior written notice. The date of termination will be the date specified in the written notice and must be a date, which is not earlier than the required notice period. + +5.5 Consequences of Termination of Agreement. All obligations of the Company to the Contractor hereunder shall immediately terminate and cease as of the date of the termination of the Contractor's engagement. The Company shall only be obliged to pay the Fees agreed to but not yet paid as of the date of termination, with such payment to be made within 30 days of the date of termination. The Company may terminate all access of the Contractor to the Company's premises and property as of that date. + + + + + +5.6 Return of Property. On the termination of the Contractor's engagement, the Contractor shall return to Emerald all property belonging to Emerald in the Contractor's possession or control. Notwithstanding the foregoing, the Contractor will be entitled to keep and retain his or her laptop computer, office computer and smart phone. + +6. Confidential Information + +6.1 Prior Confidential Information. The Contractor represents and warrants to Emerald that he or she has not used or brought, and he or she will not use or bring, to Emerald any confidential information of any kind whatsoever of any prior party (the "Prior Business") with whom the Contractor was previously involved, whether such involvement was as an employee, director or officer of that Prior Business, an investor in that Prior Business, a employee in that Prior Business, a consultant to that Prior Business or other relationship to that Prior Business (the "Prior Involvement"). The parties acknowledge and agree that Emerald is not engaging the Contractor to obtain such confidential information, and the Contractor acknowledges that Emerald has advised the Contractor to comply with any legal obligations of any kind whatsoever the Contractor may have to such Prior Business. The Contractor will hold Emerald harmless from any and all claims and damages of any kind whatsoever that Emerald may suffer as a result of the Contractor breaching any of his or her obligations to such Prior Business in any regard. + +6.2 Confidentiality. "Confidential Information" means information disclosed to the Contractor as a consequence of or through its, his or her position as a director, officer, employee or consultant of Emerald, which information is not generally known in the industry in which Emerald operates. All Confidential Information will, during the Term of this Agreement and for a period of five years thereafter, be held by the Contractor in a fiduciary capacity for Emerald, in the strictest confidence, and will be used by the Contractor solely for the benefit of Emerald, and will not be used by the Contractor, directly or indirectly, for any purpose other than for the benefit of Emerald, nor will the Contractor divulge or communicate, directly or indirectly, such verbally, in writing or otherwise to any party. + +6.3 Copying and Delivery of Records. The Contractor will not, either during the Term of this Agreement or for a period of five years thereafter, directly or indirectly, cause or permit any Confidential Information to be copied or reproduced unless expressly authorized to do so by the Company. The Contractor will promptly return to Emerald all written and electronic information, disks, tapes, memory devices and all copies of any of Confidential Information forthwith upon Emerald request, at any time, to do so. + +7. Independent Legal Advice + +7.1 Each party to the Agreement acknowledges and agrees that the other party has given it, him or her the opportunity to seek and obtain independent legal advice, and has recommended that it, he or she seek and obtain independent legal advice, with respect to the subject matter of this Agreement and for the purpose of ensuring its, his or her rights and interests are protected. Each party to the Agreement represents to the other that it, he or she has sought independent legal advice or consciously chosen not to do so with full knowledge of the risks associated with not obtaining such independent legal advice. + +8. General + +8.1 Time. Time shall be of the essence in this Agreement. + +8.2 Assignment. This Agreement is not assignable by any party to the Agreement without the prior written consent of the other parties. This Agreement will endure to the benefit of and be binding on the parties and their respective heirs, executors, administrators, successors and permitted assigns. + +8.3 Currency. Unless otherwise specified herein, all references to currency are to CAN dollars. + +8.4 Governing Law and Attornment. This Agreement will be governed by and construed inaccordance with the laws of British Columbia and the federal laws of Canada applicable in British Columbia, and the parties irrevocably submit to and accept generally and unconditionally the exclusive jurisdiction of the courts and appellate courts of British Columbia in that regard. + +8.5 Entire Agreement. This Agreement represents the entire agreement between the parties in respect to the subject matter of this Agreement. + + + + + +8.6 Notice. Any notice, direction, request or other communication required or contemplated by any provision of this Agreement will be given in writing and will be given by delivering or emailing same to the parties to the contact points they provide to each other from time to time. + +IN WITNESS WHEREOF the parties have hereunto set their hands and seals effective as of the date first above written. + +EMERALD HEALTH NATURALS, INC. + + + +DR. GAETANO MORELLO N.D. INC. + + + + + + + +SCHEDULE "A" - DEFINITIONS + +In the Agreement to which this Schedule is attached, the following words and expressions have the following meanings unless the context otherwise requires: + +(a) "Affiliate" means any person or entity controlled by, controlling or under common control with the Company. For the purposes of this definition, the term "control" when used with respect to any person or entity means the power to direct the management and policies of such person or entity, directly or indirectly, whether as an officer or director, through the ownership of voting securities, by contract or otherwise. (b) "Board" means the Board of Directors of Emerald in place from time to time. (c) "Business" or "Business of Emerald" includes, without limitation, managing, financing or building companies involved in the medical or recreational cannabis industries. (d) "Cause" includes, without limitation, the following: (i) the Contractor's commission of any act of gross negligence or gross incompetence in the conduct of his or her Services, or in the performance of his or her obligations under this Agreement; (ii) a material breach or default of any term of this Agreement by the Contractor if such material breach or default has not been remedied within 60 days after written notice of the material breach or default has been delivered by the Company to the Contractor; (iii) the Contractor dying or becoming permanently disabled or disabled (which includes, without limitation, mental infirmary or mental illness, drug or alcohol abuse or impairment, or any other physical or mental impairment that materially interferes with the individual's ability to perform his or her Duties) for a period exceeding 180 consecutive days or 180 days calculated on a cumulative basis over any two-year period during the term of this Agreement; or (iv) the Contractor's fraud, dishonesty or other material misconduct, wilful or otherwise, including, without limitation, the Contractor being: (A) convicted of a criminal offence involving fraud or dishonesty; or (B) sanctioned by a corporate registry, stock exchange, securities commission or other similar regulatory organization in respect of a material breach of corporate, commercial or securities rules, policies, laws or regulations. For the purposes of this definition and without limitation, Cause does not include a reduction in the Contractor's Fees or Perks implemented by the Company acting in good faith to respond to adverse market conditions, or in response to adverse cash flow issues then being faced by the Company. (e) "Change of control" means: (i) a person other than the current control person or persons of the Company (as that term is defined in the Securities Act (British Columbia) or other applicable securities legislation) becomes a control person of the Company; or (ii) a majority of the directors elected at any annual or special general meeting of shareholders of Emerald, or by consent resolution, are not individuals nominated by the Company's then-incumbent board. + + + + + +(f) "Confidential Information" means information disclosed to the Contractor, known by the Contractor or developed by the Contractor (alone or with others) as a consequence of or through: (i) his or her position as a director, officer, employee or consultant of the Company or of an Affiliate of the Company; or (ii) his or her relationship with Emerald or an Affiliate of Emerald; which information is not generally known in the industry in which the Company or its Affiliates are or may operate, but only to the extent that such information relates to the Business of the Company including, without limitation, information relating to: (iii) technologies, services and products owned, licensed or developed by or for the Company or its Affiliates; (iv) Intellectual Property of Emerald and its Affiliates; (v) existing or potential suppliers, customers and strategic contractors of the Company and its Affiliates; (vi) business plans, strategic plans, research and development plans, marketing plans, financing plans, merger and acquisition plans, strategic partnering plans, human resource plans, investor relation plans or other corporate and business plans of any kind whatsoever of the Company and of its Affiliates; (vii) revenue models, pricing strategies, billing methods of the Company and of its Affiliates; and (viii) directors, officers, employees, consultants and professional advisors of the Company and of its Affiliates. (g) "Constructive Termination" means the termination of the Contractor without Cause which shall mean: (i) a material adverse change in the Services of the Contractor, imposed unilaterally by the Company or the Board, such that the Contractor's level of seniority with the Company is materially diminished without Cause; (ii) a reduction in the then current Fee paid to the Contractor by the Company without Cause, which, continues for a period of time longer than 12 months; or (iii) a material reduction in the Perks received by, or the Fees which may be earned by, the Contractor from the Company without Cause, which continues for a period of greater than 12 months; other than a reduction in the Contractor's Fee or Perks implemented by the Company acting in good faith to respond to adverse market conditions, or in response to adverse cash flow issues then being faced by the Company. (h) "Intellectual Property" is used in its broadest sense and means and includes any statutory, common law, equitable, contractual or proprietary interest, recognized currently or in future, in knowledge received or transmitted through investigation, observation, experience, study, instruction, discovery, creation, improvement, or publication, regardless of the form or medium in which the knowledge is embodied and whether or not patentable or copyrightable in respect of the Intellectual Property. The term Intellectual Property includes the following: (i) knowledge and its embodiments including: (A) technical information, including meeting and collaboration notes, contents of laboratory notebooks, data, formulae, drawings, diagrams, blueprints, know-how, + + + + + +concepts, processes, product plans, service plans, computer software, flowcharts, specifications, design documents, and models; and (B) business information including data, databases, business models, market research and forecasts; and customer lists; (ii) interests currently recognized including rights of confidence in information, ideas, concepts and know-how, patent rights in inventions, copyrights in artistic, literary, dramatic, musical, and neighbouring works, design rights in designs, and trademark rights in reputations, marks and domain names; (iii) copyrightable works of authorship including, without limitation, any technical descriptions for products, user guides, illustrations, advertising materials, computer programs (including the contents of read only memories) and any contribution to such materials; and (iv) all trademarks, trade names, business names, patents, inventions, know-how, copyrights, software, source code, object code, service marks, brand names, industrial designs and all other industrial or intellectual property and all applications therefore and all goodwill connected therewith, including, without limitation, all licenses, registered user agreements and all like rights of any kind whatsoever, that may be developed, owned or licensed by the Company or its Affiliates or otherwise relating to the business of the Company or any other business in which the Company or its Affiliates may become engaged. + + + + + +SCHEDULE "B" - DESCRIPTION OF SERVICES + +The Chief Executive Officer of Emerald Health Naturals will: + +Lead all aspects of the business in terms of strategic planning, product development and operational execution on its annual and long-term objectives. Will actively manage the companies P&L performance to ensure that its financial performance is in line with its budget projections and will enact any necessary changes to ensure that the business meets or exceeds such projections. Help to capture, analyze and report key performance metrics (customer satisfaction, quality, operating activities, etc.) and market feedback on a monthly, quarterly and annual basis. He/she will direct the processes that monitor, measure, evaluate and report on KPIs and budgets in order to assess and improve performance. Help build and ensure that the appropriate organizational structure and personnel are in place to achieve the company's objectives. Build strategic partnerships and foster customer relationships that can add value to company. Help to ensure that there is good understanding of the capabilities and unique aspects of the company's products, scientific knowledge and capabilities in the external market and with shareholders & investors. \ No newline at end of file diff --git a/full_contract_txt/ENERGOUSCORP_03_16_2017-EX-10.24-STRATEGIC ALLIANCE AGREEMENT.txt b/full_contract_txt/ENERGOUSCORP_03_16_2017-EX-10.24-STRATEGIC ALLIANCE AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..c0feee8f442a529697aacb78ca433be90b1f99de --- /dev/null +++ b/full_contract_txt/ENERGOUSCORP_03_16_2017-EX-10.24-STRATEGIC ALLIANCE AGREEMENT.txt @@ -0,0 +1,317 @@ +Exhibit 10.24 [***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. EXECUTION VERSION STRATEGIC ALLIANCE AGREEMENT + + THIS STRATEGIC ALLIANCE AGREEMENT ("Agreement") is made and entered into as of November 6, 2016 (the "Effective Date") by and between Dialog Semiconductor (UK) Ltd., a corporation organized under the laws of England and Wales, having its principal office at 100 Longwater Avenue, Green Park, Reading, RG2 6GP, United Kingdom ("DIALOG") and Energous Corporation, a Delaware corporation, having its principal office at 3590 North First Street, Suite 210, San Jose, CA 95134 ("ENERGOUS"). WHEREAS DIALOG is a supplier of mixed-signal semiconductor products; WHEREAS ENERGOUS is a supplier of uncoupled wirefree charging systems, including antennas, semiconductors, firmware, software, algorithms, and sensors; WHEREAS concurrently with their execution of this Agreement, DIALOG and ENERGOUS are entering into a separate Securities Purchase Agreement, pursuant to which DIALOG will make an investment in ENERGOUS, and ENERGOUS will issue to DIALOG shares of its common stock and a warrant to purchase its common stock on the terms set forth therein. WHEREAS DIALOG and ENERGOUS desire to enter into a strategic relationship to distribute to the marketplace certain ENERGOUS products and technology and to potentially collaborate on further initiatives pursuant to the terms and conditions of this Agreement. NOW, THEREFORE, in consideration for the premises and mutual covenants contained herein, DIALOG and ENERGOUS hereby agree as follows: 1. DEFINITIONS. All capitalized terms used in this Agreement will have the meaning set out below, or if not defined below, the meaning as defined elsewhere in the Agreement. 1.1 "Affiliate" means any person or entity that controls, is controlled by or is under common control with the specified person or entity, but only so long as such control exists. The term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of an entity, whether through ownership of voting securities, by contract or otherwise. 1.2 "Approved Production Specifications" means those materials, processes and workmanship specifications of Manufacturing Subcontractors as approved by ENERGOUS for the manufacture and production of the Products. 1.3 "Change of Control" means any transaction or series of transactions that results in (i) the consolidation or merger of the specified party ("Target") into or with any other corporation or corporations, (ii) the sale, conveyance or disposition of all or substantially all of the assets of the Target, (iii) the transfer of more than fifty percent (50%) of the voting power of the Target to any entity or entities not controlled by the Target, or (iv) any similar form of acquisition or any liquidation, dissolution or winding up of the Target or other transaction that results in the discontinuance of the Target's business; provided, however, that Change of Control will not include any transaction or series of transactions entered into primarily for equity financing purposes (including, without limitation, any private equity investment or any public offering of securities). + + + + + + + + + + 1.4 "Deposit Materials" means all chip level design databases, circuit schematics, test and characterization programs and associated documentation reasonably required to have Products manufactured, or to allow design bugs or Epidemic Defects to be fixed in the Product. 1.5 "Design-In Phase" means the phase in the sales cycle with a prospective customer for a Product that follows the customer's decision to move forward with the potential Product, during which chip samples are delivered to customer and the parties work together to design the evaluation board for in-system evaluation. 1.6 "Documentation" means all information that is necessary or useful to support DIALOG's authorized manufacture, testing, sale and support of the Products, including but not limited to Product Specifications, data sheets, application notes, application board gerber files/BOM, sales and marketing collateral, Product errata, test reports, characterization reports, software (e.g., firmware, GUI), test plans and yield data in connection with the manufacture and sale of Products, Approved Production Specifications, test and characterization programs and associated documentation reasonably required to have Products manufactured, assembled and tested, designs of all Tooling and all other items reasonably required for the manufacture of the Products. 1.7 "Epidemic Defects" means material defects of any Product resulting from a common root cause solely attributable to the Product Specifications or Approved Production Specifications and which results in returns (in accordance with the returns procedure mutually agreed between the parties in the Commercialization Plan) of more than [***] percent ([***]%) of the quantity of such Product manufactured in any [***] day period. Any number of material defects affecting any number of Products which result from a single common root cause or combination of causes and result in returns of more than [***] ([***]%) of such Products manufactured in any [***] day period will be treated as the occurrence of a single Epidemic Defect for purposes of this Agreement. 1.8 "Insolvency Event" means (a) without a successor, the specified party fails to function as a going concern or to operate in the ordinary course, or (b) other than in the case when the specified party is a debtor-in-possession and continuing to fulfill all its obligations under this Agreement, a receiver or trustee in bankruptcy is appointed for such party or its property, or such party makes a general assignment for the benefit of its creditors, or such party commences, or has commenced against it, proceedings under any bankruptcy, insolvency or debtor's relief law, in each case which proceedings are not dismissed within ninety (90) days. 1.9 "Intellectual Property Rights" means any and all Patent Rights, copyright rights, Marks rights (including all associated goodwill), mask work rights, trade secret rights and all other intellectual and industrial property rights of any sort throughout the world (including any application therefor). * Confidential Treatment Requested + + Page 2 + + + + + + + + 1.10 "Invention" means any idea, concept, discovery, invention, development, technology, work of authorship, trade secret, software, firmware, library, component, tool, mask work, process, method, technique, know-how, show-how, data, plan, formula, device, apparatus, specification, design, documentation or other material or information, tangible or intangible, whether or not it may be patented, copyrighted or otherwise protected (including all versions, modifications, enhancements and derivative works thereof). 1.11 "Manufacturing Subcontractors" means (a) [***] and/or its Affiliate that is the wafer foundry for the Products ("[***]"), (b) [***] and/or its Affiliate that is responsible for the assembly, packaging and testing of the Products, and (c) and other third party contractors DIALOG or ENERGOUS use, or may from time to time use, for the manufacturing, assembly, testing, or packaging of the Licensed Products or Licensed Product components. 1.12 "Marks" means trademarks, service marks, trade dress and trade names. 1.13 "Mask Set" means the mask set for fabrication of wafers at a foundry supplier. 1.14 "Mass Production Qualified Product" means a fully qualified Product which has completed 500 hour high temperature over lifetime (HTOL) testing and has been shipped in excess of [***] units for purposes of incorporation in customer products. 1.15 MCM means a multichip module, being a single package that includes multiple integrated circuit dies, including a Product die. 1.16 "Net Sales" means the invoiced amounts for the Sale of Products less: (a) amounts credited for return of any such Products; (b) amounts separately stated with respect to shipment of such Products for insurance, handling, duty, freight, and taxes; and (c) any discounts, credits or rebates in the relevant royalty or service fee period. 1.17 "New Product" means a product developed by or on behalf of ENERGOUS after the Effective Date that is not a Product Update; provided, however, that "New Products" exclude any product developed by a successor or acquirer of ENERGOUS. 1.18 "Patent" means any United States or foreign patent or patent application, including any provisional application, continuation, continuation-in-part, divisional, registration, confirmation, revalidation, reissue, PCT application, patent term extension, supplementary protection certificate, and utility model, as well as all foreign counterparts of any of the foregoing, and related extensions or restorations of terms thereof. 1.19 "Patent Rights" means rights under any Patent. 1.20 "Person" a human being or group of human beings, a company, corporation, a partnership or other legal entity (artificial or juristic person) recognized by law as having rights and duties. * Confidential Treatment Requested + + Page 3 + + + + + + + + 1.21 "Products" means the ENERGOUS products set forth in Exhibit A, as such Exhibit may be amended from time to time by mutual agreement between the parties, that have been released by ENERGOUS to production, including all Product Updates, which will be deemed to have been added to Exhibit A automatically, without any further action required by the parties, immediately following the release to production date. 1.22 "Product Die" means the silicon die incorporated within Products. 1.23 "Product IP" means (a) all Intellectual Property Rights in and to the Products, including all Product Updates, (b) any other Inventions and work products created or developed in connection with research and development or manufacturing efforts relating to the Products, including all Intellectual Property Rights therein and (c) all Intellectual Property Rights in and to the Mask Sets and Tooling, in each of the foregoing cases, that are owned or controlled by ENERGOUS, its Affiliates or any successor or assign. 1.24 "Product Specifications" means ENERGOUS' written technical specifications for the Products as referenced in datasheets and related documentation such as errata sheets. All Product Specifications are subject to change with at least one (1) months prior written notice to DIALOG, provided that with respect to any warranty for Products covered by this Agreement, the Product Specification in effect at the time of shipment of the relevant Product will apply for warranty purposes notwithstanding any subsequent change to the Product Specifications as provided herein. 1.25 "Product Updates" means any updates, improvements and other modifications to the Products made by or for ENERGOUS, including, without limitation: (a) any updates or modifications to the software (DSP code, firmware, GUI (graphical user interface) code); (b) modifications of silicon, including, without limitation; such modifications made solely for cost reduction purposes, and including only metal layer as well as all layer mask changes; (c) modifications which increase the distance over which wireless power is transmitted or received, subject to the limitations set out in Exhibit A; (d) modifications which increase the amount of power which is transmitted or received; (e) modifications to improve functionality or efficiency or add or improve features; and (f) modifications required to attain regulatory approvals, including, but not limited to, FCC approval; provided, however, that "Product Updates" will only include any of the foregoing developed by an acquirer or successor of ENERGOUS for a period of [***] after a Change of Control of ENERGOUS, and provided further that any Products incorporating Product Updates will be subject to separate terms and conditions to be agreed in good faith by the Parties, which terms and conditions will be no less favourable to DIALOG than those with respect to the Product to which the Product Update corresponds. 1.26 "Sale," "Sell" or "Sold" mean the sale, transfer, exchange or other disposition of Products, by DIALOG or any of its Affiliates to any customer or other third party, directly or indirectly through one or more tiers of distribution, for consideration that is recognized as revenue by DIALOG or its Affiliates according to applicable generally accepted accounting principles. 1.27 "Semiconductor Supplier" means any Person, other than DIALOG or its Affiliates, which primarily, or in its ordinary course of business, sells or distributes integrated circuits in packaged, die, multichip module or similar form. * Confidential Treatment Requested + + Page 4 + + + + + + + + 1.28 "Term" means the Initial Term and any and all Renewal Term(s) as set forth in Section 15.1 hereof. 1.29 "Third Party IP" means Intellectual Property Rights licensed from a third party relating to the Products. 1.30 "Tooling" means the physical Mask Sets, packaging fixtures, test fixtures, test programs, processes, software source code and any other physical tooling or program source code required for the manufacture, packaging, assembly and testing of the Products. 1.31 "Uncoupled Power Transfer Technology" means a family of wire-free technology defined by the AirFuel Alliance that provides power to devices at a distance, and that currently includes (i) RF, (ii) ultrasonic transduction, and (iii) Laser power beaming. Notwithstanding the foregoing, the meaning of Uncoupled Power Transfer Technology excludes technology which functions primarily for data transmission or direct- current-to-direct-current (DC-to-DC) power conversion. 2. LICENSE. 2.1 License Grant. Subject to the restrictions set out in Section 2.2, ENERGOUS hereby grants to DIALOG a non-exclusive (subject to Section 2.5), irrevocable, worldwide, sub-licensable (solely in accordance with Section 2.4), royalty-bearing license during the Term under all Product IP to: (a) repackage or have repackaged the Product Die into various package formats or layouts, and to integrate the Product Die into MCMs, which may incorporate DIALOG or third party intellectual property (such repackaged Product Die, MCMs and Products, are individually and/or collectively referred to as the "Licensed Products"); (b) have the Licensed Products manufactured, tested and packaged by Manufacturing Subcontractors; (c) Sell, offer for Sale, import, export and support the Licensed Products, including without limitation, providing system design, troubleshooting and failure analysis support for DIALOG's customers and their customers; (d) use and modify the Tooling and Documentation for the purposes of paragraphs (a) to (d) of this Section 2.1. 2.2 Excluded Applications. Until the earlier of (i) termination of ENERGOUS' exclusivity obligations to the Key Customer set forth in Exhibit F (the "Key Customer") existing as of the Effective Date with respect to the following applications, or (ii) [***] that incorporates ENERGOUS wireless charging technology, or (iii) [***] and subject to the exceptions set out in Section 2.3, DIALOG will not be permitted to Sell Licensed Products for use in the following applications (the "Excluded Applications"): (a) [***]; * Confidential Treatment Requested + + Page 5 + + + + + + + + (b) [***]; (c) [***]; (d) [***]; and (e) [***] designed for use with any of the applications in paragraphs (a) to (d) of this Section 2.2. For the avoidance of doubt, DIALOG will be permitted to Sell Licensed Products for use in any or all of the Excluded Applications (A) at any time on or after [***] or, if earlier, (B) [***] that incorporates ENERGOUS wireless charging technology, or (C) upon the termination of ENERGOUS' exclusivity obligations to the Key Customer existing as of the Effective Date with respect to the above applications. 2.3 Exceptions to Excluded Applications. The following applications are exceptions to and excluded from the Excluded Applications (the "Permitted Applications"): (a) [***]; (b) [***]; (c) [***]; (d) [***]; (e) [***]; (f) [***]; (g) [***]; (h) [***]; (i) [***]; and (j) [***]. The fact that a [***] has [***] does not automatically preclude such device from falling under paragraphs (b), (c) and (d) of this Section 2.3 2.4 Sublicenses. DIALOG may sublicense the foregoing license rights to any of its Affiliates. DIALOG will be responsible for the observance and performance by all such Affiliates of all of DIALOG's obligations pursuant to this Agreement. DIALOG may sublicense the foregoing license rights to Manufacturing Subcontractors solely to the extent necessary and appropriate for them to manufacture, assemble, test and provide support for the Products. DIALOG may not sublicense the foregoing license rights to any other third party without ENERGOUS' prior written consent. * Confidential Treatment Requested + + Page 6 + + + + + + + + 2.5 Exclusivity. (a) Subject to paragraph (b) of this Section 2.5, ENERGOUS will not, and will not enable any Semiconductor Supplier, to manufacture, have manufactured, offer for sale, sell, import or export the Products or Product Die in commercial volumes, except a Semiconductor Supplier to the Key Customer for use in the Excluded Applications. (b) ENERGOUS will use its diligent, good faith efforts to promote DIALOG as the preferred supplier of Products and Product Die. However, ENERGOUS is allowed to engage with a Semiconductor Supplier to supply comparable products or product die to a customer if either (i) the customer which has not been engaged with DIALOG with respect to such product or product die notifies ENERGOUS or DIALOG in writing by an authorized officer of the customer that it does not want to use DIALOG or a DIALOG Affiliate as a supplier of such product or product die; or (ii) if DIALOG has been engaged with the customer, the customer notifies ENERGOUS or DIALOG in writing prior to commencement of the Design-In Phase that it does not want to use DIALOG or a DIALOG Affiliate as a supplier of such product or product die. For clarity, ENERGOUS shall not intentionally supply Products, Product Die or comparable products or product die to customers directly or through distribution channels. 2.6 Branding. (a) Products Sold by DIALOG or its Affiliates may be branded as DIALOG products. All sales and marketing collateral, software tools and material for promotional activities relating to the Products will utilize ENERGOUS branding in a prominent basis as an equivalent partner with respect to such Products. (b) To the extent the parties engage in any co-branding activities, then, subject to the terms and conditions of this Agreement and during the Term, each party (in such capacity, "Licensor") hereby grants to the other party (in such capacity, "Licensee") a non-exclusive, non- transferable, worldwide right and license (without the right to sublicense), under Licensor's Intellectual Property Rights in Licensor's Marks, to use those Marks of Licensor set forth in Exhibit D solely in connection with the marketing, sale and distribution of such co-branded Products in accordance with this Agreement. (c) Use of Licensor's Marks will be subject to the following terms and conditions: (i) all goodwill generated by use of Licensor's Marks by Licensee will inure to the benefit of Licensor; (ii) Licensee will use Licensor's Marks only in such forms and with such graphics as authorized by Licensor; and (iii) Licensee will identify Licensor's Marks as being owned by Licensor and will (A) cause the symbol "®" to appear adjacent to and slightly above any registered Licensor Mark, or (B) alternatively, for any Licensor Marks that are not registered, the symbol "TM" or "SM", as applicable. 2.7 No Other Rights. Except for the rights and licenses expressly granted in this Agreement, no other right is granted, no other use is permitted and all other rights are expressly reserved. + + Page 7 + + + + + + + + 3. SOURCING. 3.1 Product Manufacture. Concurrent with or before execution of this Agreement, and substantially in the form attached as Exhibit C, ENERGOUS will provide written authorization to its Manufacturing Subcontractors to confirm DIALOG's and, if applicable, DIALOG's Affiliates' rights to procure the Licensed Products and related services directly from such Manufacturing Subcontractors utilizing ENERGOUS' Tooling and any associated manufacturing resources. DIALOG and its sublicensed Affiliates may directly contract with the Manufacturing Subcontractors for the manufacture and supply of Licensed Products under terms and conditions that DIALOG or such Affiliates may directly negotiate with such third parties. 3.2 Additional Manufacturing Subcontractors. DIALOG at its sole discretion may qualify and establish an alternative source to some or all of ENERGOUS' Manufacturing Subcontractors for the manufacturing of the Licensed Products and ENERGOUS will provide its written authorization thereof if requested by DIALOG. 3.3 Tooling. Subject to ENERGOUS' rights in the Product IP and any Third Party IP (including, without limitation, that of any Manufacturing Subcontractors), each party will own all right, title and interest in the physical Tooling procured or generated by that party for the manufacturing, testing and packaging of the Licensed Products. For the avoidance of doubt, as between the parties, ENERGOUS will also continue to own all right, title and interest in and to the firmware, DSP code and GUI software embedded in the Products, including all Intellectual Property Rights embodied therein. Upon the termination of DIALOG's right to manufacture the Licensed Products following any expiration or termination of the Agreement or any Wind Down Period or Continuing Obligation period, as applicable, then all right, title and interest in the Tooling will automatically transfer to ENERGOUS subject to any Third Party IP, and DIALOG will, at ENERGOUS' option, either sell any Tooling in its possession to ENERGOUS at cost or destroy the Tooling and certify in writing as to same. 4. PRODUCT COMMERCIALIZATION. 4.1 Commercialization Plan. (a) Exhibit E hereto sets out the plan for the commercialization of the Licensed Products (the "Commercialization Plan"). The Commercialization Plan sets forth the parties' respective rights and obligations with respect to commercial and technical activities to be performed to maximize potential Sales of Licensed Products. The Commercialization Plan will be reviewed and (if necessary) updated by the parties on a quarterly basis during the Term. (b) Each party will appoint (and notify the other party of the name of) a member of their management team who will serve as that party's primary contact for all matters related to this Agreement (each, a "Liaison"), including resolution of issues that may arise under this Agreement. Each party may replace its Liaison at any time by notice in writing to the other party. (c) The Commercialization Plan includes a go-to-market plan. ENERGOUS will provide commercially reasonable sales training, material and support to DIALOG's global application, sales and marketing teams and customers, including the support set out in Section 4.3. + + Page 8 + + + + + + + + (d) ENERGOUS will also support DIALOG with an operations and quality plan, which will set forth information relating to quality matters, including, but not limited to, testing, yield management, RMA process, failure analysis/corrective action procedure, ECN/PCN process and detailed agreement on mutual rights and responsibilities with respect to any quality issues or warranty claims (hereinafter "Quality Plan"). Both parties will work in good faith to finalize and implement the Quality Plan within 90 days after the Effective Date of this Agreement. DIALOG will be responsible for its own frontline quality function and corrective actions, with technical input from ENERGOUS as required. (e) The parties may promote the relationship with marketing initiatives and also agree to engage in joint marketing communication activities related to the relationship described in this Agreement or to the promotion of the Licensed Products, as set forth in the Commercialization Plan or otherwise mutually agreed between the parties from time to time. 4.2 Commercialization Meetings. The parties will meet regularly, but at least once each month during the Term, either in person or by telephone, video or internet conference call, to share technical and commercial information as reasonably required to facilitate the parties' exercise of their respective rights and performance of their respective obligations under this Agreement. The information shared by the parties will include, but is not limited to (a) market and competitive dynamic updates, (b) activities and progress updates at DIALOG's customers, (c) technical review and feedback from customers, (d) non-binding 12 month rolling Sales and Royalty and Service Fee forecasts for the Licensed Products, (e) initiatives to boost sales potential for the Licensed Products. Customer information shared will be within the limits allowed by any non-disclosure agreements DIALOG may have entered into with such customers. 4.3 Technical Support. ENERGOUS will support DIALOG's or its Affiliates' engineers and, in some cases and at DIALOG's request, the customer directly in providing standard design-in support (including antenna design support) for customers' products. If the customer requires unique or custom engineering services (i.e., support and services not limited to those with general application to Product customers), then ENERGOUS will contract directly with such customer for the provision of such services. ENERGOUS will provide DIALOG with any and all information that is necessary or useful to support its authorized manufacture, testing, marketing, Sale, troubleshooting, compatibility analysis, performance tuning, failure analysis, and other support of the Licensed Products, including the Documentation and any updates thereto or revisions thereof which are reasonably necessary or appropriate to provide technical support for the Products to DIALOG customers. ENERGOUS receives the Service Fee for providing the support described in this Section 4.3 to DIALOG and its customers during the Term. In the event the Technical Support provided by ENERGOUS falls below a mutually-agreed upon service level that is common to the semiconductor industry or reasonably requested by DIALOG's customers, and after failure by ENERGOUS to address such deficiency within a twenty (20) day notice period, DIALOG may suspend the payment of Service Fees until such service level is provided. Furthermore, in the event ENERGOUS fails to meet its obligations as set forth in the Quality Plan, and after failure by ENERGOUS to address such deficiency within a thirty (30) day notice period, DIALOG may suspend the payment of Service Fees until such obligations are met. + + Page 9 + + + + + + + + 5. PRODUCT DEVELOPMENT AND PRODUCT UPDATES. ENERGOUS will have control and authority over the design and development of the Products, including without limitation, developing and implementing all Product Updates. ENERGOUS reserves the right to implement Product Updates at any time in its sole discretion. The parties will consult each other on the perceived product needs of the market and DIALOG's customers and how best to respond to such needs. DIALOG may suggest Product Updates to ENERGOUS provided, but all the development of Product Updates will be at ENERGOUS' sole discretion. ENERGOUS will share its relevant product roadmaps from time to time to maximize collaboration opportunities. 6. INTELLECTUAL PROPERTY OWNERSHIP. 6.1 Product IP. ENERGOUS retains right, title and interest in and to the Product IP, ENERGOUS' Marks and ENERGOUS' Confidential Information, including all Intellectual Property Rights embodied therein. No transfer or grant is made hereunder by ENERGOUS of any of these rights or any of its other rights, whether by implication, estoppel or otherwise, other than the limited rights and licenses expressly granted by ENERGOUS in this Agreement, and all such other rights are hereby reserved. 6.2 DIALOG Intellectual Property. DIALOG retains rights, title and interest in and to DIALOG's Marks and DIALOG's Confidential Information, including all Intellectual Property Rights embodied therein. No transfer or grant is made hereunder by DIALOG of any of these rights or any of its other rights, whether by implication, estoppel or otherwise, other than the limited rights and licenses expressly granted by DIALOG in this Agreement and all such other rights are hereby reserved. 7. PRODUCT SALES. 7.1 Sales. Subject to the terms and conditions of this Agreement, and except as set forth in the Commercialization Plan or otherwise agreed in writing between the parties, DIALOG will market and Sell the Licensed Products as authorized under this Agreement. DIALOG will independently manage and process its own forecasting, operations and order management. 7.2 Discontinuation of Sale of Products. If DIALOG decides to discontinue Sales of any Product, it will notify ENERGOUS at least [***] prior to such discontinuance, and following such notification, the exclusivity rights, if any, associated with that Product will cease; provided, however, this provision will not apply in the event that DIALOG continues Sales of Product Updates, repackaged Product Dies or MCMs. 7.3 Supply of Products to ENERGOUS. DIALOG will provide 1000 samples of each Product free of charge to ENERGOUS for the purposes of evaluation and demonstration. For additional volumes required by ENERGOUS, DIALOG will sell to ENERGOUS on a reasonable cost plus basis for the purposes of evaluation and demonstration. These samples are provided as is, are not intended for resale by ENERGOUS, and no indemnification or other warranties from DIALOG will apply. * Confidential Treatment Requested + + Page 10 + + + + + + + + 8. OTHER PRODUCTS. 8.1 New Products. In the event that ENERGOUS develops New Product, ENERGOUS will provide DIALOG with written notice describing the New Product before marketing, selling or distributing the New Product with or to any third party. Upon receipt of such notice, DIALOG will have [***] to notify ENERGOUS in writing that it desires to add such New Product as Product under this Agreement. If DIALOG provides such a notice, for a period of [***] following ENERGOUS' receipt of such notice, ENERGOUS and DIALOG will negotiate in good faith the terms pursuant to which such New Product will be added as a Product to this Agreement. ENERGOUS may not negotiate with any third party the rights to market, sell or distribute any New Product until the earliest to occur of the following (a) DIALOG does not provide ENERGOUS with notice that it desires to add such New Product to this Agreement within the above-described [***] period, (b) ENERGOUS and DIALOG do not reach mutually agreeable terms for adding such New Product to this Agreement during the [***] negotiation period or (c) DIALOG provides ENERGOUS with written notice that it does not wish to negotiate with respect to such New Product. For clarity, after any of the events described in the foregoing subsections (a), (b) or (c) occurs, the New Product will not be covered under this Agreement, and ENERGOUS will be free to manufacture, market, sell, distribute and otherwise exploit such New Product as it deems fit in its sole discretion, including in collaboration with or through one or more third parties. 8.2 No Competing Products. (a) Until expiration or earlier termination of the Agreement, DIALOG agrees that it and its Affiliates will not, without ENERGOUS' written approval, intentionally sell, distribute or work with any third party to develop products incorporating any Uncoupled Power Transfer Technology other than Licensed Products; provided, however, that DIALOG shall not be under any such restrictions in relation to services or products it provides to the Key Customer in the event the Key Customer terminates its agreement with ENERGOUS. (b) In the event that ENERGOUS does not receive Federal Communications Commission approval of any Licensed Product for power transmission [***] by the [***], (i) ENERGOUS may provide written notice to DIALOG which references this Section 8.2(b) and indicates ENERGOUS' intention to enable one or more Semiconductor Suppliers to supply Products for [***]; and (ii) DIALOG may provide written notice to ENERGOUS which references this Section 8.2(b) and indicates DIALOG's intention to sell, distribute or work with one or more third parties to develop products incorporating Uncoupled Power Transfer Technology for [***]. [***] following the date such notice is given pursuant to Section 20.1, the restrictions in Section 8.2(a) shall no longer apply to DIALOG for Uncoupled Power Transfer Technology in [***] and the restrictions relating to enabling a Semiconductor Supplier in Section 2.5(a) shall no longer apply to ENERGOUS for Products or Product Die in [***]. (c) In the event that ENERGOUS does not receive Federal Communications Commission approval of any Licensed Product for power transmission in [***] by the [***], (i) ENERGOUS may provide written notice to DIALOG which references this Section 8.2(c) and indicates ENERGOUS' intention to enable one or more Semiconductor Suppliers to supply Products for [***]; and (ii) DIALOG may provide written notice to ENERGOUS which references this Section 8.2(c) and indicates DIALOG's intention to sell, distribute or work with one or more third parties to develop products incorporating Uncoupled Power Transfer Technology for [***]. [***] following the date such notice is given pursuant to Section 20.1, the restrictions in Section 8.2(a) shall no longer apply to DIALOG for Uncoupled Power Transfer Technology in [***] and the restrictions relating to enabling a Semiconductor Supplier in Section 2.5(a) shall no longer apply to ENERGOUS for Products or Product Die in [***]. * Confidential Treatment Requested + + Page 11 + + + + + + + + 9. ROYALTIES AND SERVICE FEES. 9.1 Royalties. DIALOG will pay ENERGOUS the Royalties set forth in Exhibit B. For clarity, DIALOG will be responsible for paying to ENERGOUS any Royalties payable hereunder as a result of its Affiliates' Licensed Product Sales. 9.2 Service Fee. Subject to Section 4.3, DIALOG will pay ENERGOUS the Service Fees set forth in Exhibit B. For clarity, subject to Section 4.3, DIALOG will be responsible for paying to ENERGOUS any Service Fees payable hereunder for services provided by ENERGOUS hereunder to DIALOG's Affiliates or any of DIALOG's or its Affiliates' customers. 9.3 Payment. Payments of Royalties and Service Fees will be due on a calendar quarterly basis, within [***] days after the end of the calendar quarter in which the applicable Licensed Products were Sold or services were rendered. From the date a payment is due, unless otherwise agreed, any late payment will accrue a late payment fee of [***] per month, or the highest interest rate permitted by law, whichever is less. 9.4 Reports. Each payment made hereunder will be accompanied by a report detailing (a) the total number of units, on a product-by- product basis, of the Licensed Products Sold during the previous calendar quarter, (b) DIALOG's and its Affiliates' Net Sales attributable to such Licensed Product units during such calendar quarter, and (c) reasonable details regarding the calculation of the quarterly Royalty payment and Service Fee. Such information will be maintained in strict confidence by ENERGOUS under Section 10 of this Agreement. 9.5 Books. With respect to its exercise of the rights and licenses granted in, and payment obligations under, this Agreement, DIALOG and its Affiliates will keep accurate books and other records, including but not limited to supporting documentation for the Royalties and Service Fees paid hereunder (the "Records"). These Records will be maintained for a period of at least three (3) years from the date of the related payment ("Record Retention Period"), notwithstanding any termination of expiration of this Agreement. 9.6 Audit Rights. During the Record Retention Period, ENERGOUS may appoint a mutually agreed independent, internationally recognized third-party certified auditor who will have the right to inspect and copy the Records upon reasonable prior notice, and DIALOG will (and will cause its Affiliates to) allow necessary access including, as applicable, to its premises where such Records are located. ENERGOUS may exercise such right to this independent-third party audit no more than one time per calendar year and each such audit will be conducted during normal business hours. Such audit may also not interfere with DIALOG's or its Affliates' quarterly closing of its books. In the event that such audit reveals an underpayment of Royalties or Service Fees owed by DIALOG, DIALOG will promptly pay ENERGOUS the amount of the underpayment. If such underpayment is in excess of [***] of the Royalties or Service Fee due for the period audited, DIALOG will also reimburse ENERGOUS for its reasonable, out-of-pocket cost of such audit. In the event that such audit reveals an overpayment of Royalties or Service Fees owed by DIALOG, ENERGOUS will promptly pay DIALOG the amount of the overpayment. * Confidential Treatment Requested + + Page 12 + + + + + + + + 9.7 Taxes. Each party will be responsible to collect, bear and pay any and all taxes levied or based upon the party's sale of the Products, Product Die or Licensed Products, including, all sales, use, value added, withholding or similar taxes. In the event that the government of a country imposes any income taxes on payments made by a party to the other hereunder and requires a party to withhold such tax from such payments, such party may deduct such tax from such payments. Each party will be responsible for its own banking costs relating to the receipt of payments of Royalties and Service Fees and any other monies payable to it in connection with this Agreement. 9.8 Payment Currency. All payments due under this Agreement will be payable in U.S. Dollars. With respect to Net Sales invoiced in a currency other than U.S. Dollars, the Net Sales will be expressed in the domestic currency of the entity making the Sale, together with the U.S. Dollar equivalent, calculated using the conversion rate existing in the United States (as reported in the Wall Street Journal) on the last working day of each month of the calendar quarter in which the Net Sales were made. Such payments will be without deduction of exchange, collection or other charges. 10. CONFIDENTIALITY. 10.1 Scope. The term "Confidential Information" means all financial, business and technical information disclosed by or on behalf of a party in relation to this Agreement (whether tangible or intangible, and including all copies, analyses and derivatives thereof), that is marked or otherwise identified as proprietary or confidential at the time of disclosure, or which by its nature would be understood by a reasonable person to be proprietary or confidential, including all copies, abstracts, summaries, analyses and derivatives thereof. Confidential Information does not include information the receiving party can demonstrate (a) was rightfully furnished to it without restriction by a third party without breach of any obligation to the disclosing party, (b) is generally available to the public without breach of this Agreement, (c) was available to or already in the possession or control of the receiving party on a non-confidential basis before receipt from the disclosing party or (d) is independently developed by it or its employees without reliance on such information. Information associated with DIALOG's quarterly Royalty or Service Fee disclosures is Confidential Information of DIALOG. 10.2 Non-Disclosure. The receiving party agrees (a) not to copy or use the disclosing party's Confidential Information except and only for the purposes contemplated by this Agreement, (b) to maintain it as confidential, and exercise reasonable precautions to prevent unauthorized access, use and disclosure, (c) not to disclose it to any third party other than the receiving party's employees and contractors who have a need to know for the permitted purpose and who are bound by obligations that are at least as protective as the restrictions in this Agreement and (d) not to export or re-export in violation of U.S. or other export control laws or regulations any such Confidential Information or product thereof. Each party will bear the responsibility for any breach of this Section 10 by its and its Affiliates' employees and contractors. Upon any termination of this Agreement or, in the event of any Wind Down Period or Continuing Obligation period, upon the expiration of such period, and within fifteen (15) days after request by the disclosing party, each receiving party will return the Confidential Information of the other or destroy such Confidential Information and all copies of it and all information, records and materials developed therefrom, except that the recipient may retain one copy for archival purposes to ensure compliance with the provisions of this Agreement, and nothing contained herein will require the erasure, deletion, alteration or destruction of any Confidential Information required to be retained for legal or regulatory purposes or stored on back-up tapes or other back-up media or archiving systems made in the ordinary course of business, subject in each case to the confidentiality obligations set forth herein. Each party may only disclose the general nature, but not the specific terms, of this Agreement without the prior consent of the other party; provided, however, either party may provide a copy of this Agreement or otherwise disclose its terms on a confidential basis in connection with any legal or regulatory requirement, financing transaction or due diligence inquiry. For clarity, in the event that use, disclosure or retention of any Confidential Information is required in order for DIALOG to exercise the license granted in Section 2, this Section 10 will not be deemed to prevent such use, disclosure or retention. + + Page 13 + + + + + + + + 10.3 Required Disclosure. Nothing herein will prevent a receiving party from disclosing all or part of the other's Confidential Information as necessary pursuant to court order, the lawful requirement of a governmental agency or when disclosure is required by operation of law (including disclosures pursuant to applicable securities laws or regulations thereunder); provided, that prior to any such disclosure, the receiving party will use reasonable efforts to (a) promptly notify the disclosing party in writing of such requirement to disclose, and (b) cooperate fully with the disclosing party in protecting against or minimizing any such disclosure or obtaining a protective order. 11. REPRESENTATIONS AND WARRANTIES; DISCLAIMERS. 11.1 Mutual Representations and Warranties. ENERGOUS and DIALOG hereby each represent and warrant to the other that as of the Effective Date: (a) it is a duly and validly organized and existing corporation in good standing under the laws of the state or country of its incorporation, as applicable, and that it is legally qualified to do business in each jurisdiction in which this Agreement may be performed and the performance of its activities hereunder requires such qualification; (b) the performance of this Agreement and the consummation of the transactions contemplated herein will not result in any breach or violation of any terms or provisions of, or constitute a default under, its certificate of incorporation or by-laws or other organizational documents, or any material agreement or instrument to which it is a party, by which it is bound, or to which any of its property is subject; (c) all requisite corporate action has been taken for the due authorization, execution, delivery and performance of this Agreement by it, and this Agreement constitutes a legally binding obligation, enforceable against such party in accordance with its terms, except insofar as enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting the rights of creditors generally; and + + Page 14 + + + + + + + + (d) it is not a party to any litigation relating to, or that could reasonably be expected to affect, its ability to perform its obligations under this Agreement. 11.2 Product Warranty. (a) ENERGOUS warrants that (i) when manufactured in accordance with the Approved Production Specifications, and as implemented in a suitable circuit application in accordance with the Product Specifications, the Products and Product Die will conform to the Product Specifications and will be free from defects that could have been avoided in their design; (ii) the Products, any constituent parts or functionality thereof, the Documentation and the Deposit Materials do not infringe any third party's Intellectual Property Rights; (iii) it did not misappropriate any third party's trade secrets in the development of the Products, any constituent parts or functionality thereof, the Documentation or the Deposit Materials; and (iv) when delivered (including any software updates if any), no Product will contain any viruses, "Trojan horses" or other harmful code. The above warranties are valid for a period of [***] from the date of shipment of any Licensed Product to any customer. (b) The warranty contained in Section 11.2(a) does not apply to the extent any Product is operated in a manner other than that specified by the Product Specifications, is treated with abuse, negligence or other improper treatment (including, without limitation, use outside the device maximum ratings, package MSL (moisture sensitivity level) guidelines or environmental limits as may be set forth in the Product Specifications), or is defective as a result of any materials or workmanship of the Manufacturing Subcontractors or failure of the Manufacturing Subcontractors to manufacture the Product according to Approved Production Specifications. As such, any warranty claims due to defects in build, materials or workmanship will be directed to the Manufacturing Subcontractors as part of that contract between DIALOG or, if applicable, its Affiliate and such parties. (c) With the exception of the warranties in Section 11.2(a)(ii) (third party IP infringement) and Section 11.2(a)(iii) (misappropriation of third party trade secrets) related to any Product Die, the warranties in this Section 11.2 do not apply to MCMs or repackaged Product Die developed by or for DIALOG or its Affiliates. (d) In the event any warranty claim is due to or arises from an Epidemic Defect, ENERGOUS will be responsible for all costs and expenses directly incurred by DIALOG or its Affiliates or their respective customers as a result of reasonable inspection, servicing, repairs, replacements, recall notices, recalls and responses with respect thereto, provided that ENERGOUS' aggregate liability to DIALOG and its Affiliates and their respective customers under this paragraph (d) will not exceed [***] per occurrence of an Epidemic Defect. Each party will immediately notify the other upon becoming aware of the circumstance that could reasonably be construed to be an indication of an Epidemic Defect, and, in any event, will notify the other party immediately upon becoming aware of the existence of an Epidemic Defect. ENERGOUS and DIALOG will expeditiously work together in good faith to determine a technical resolution of the Epidemic Failure. ENERGOUS agrees to make all commercially reasonable efforts to promptly diagnose the Epidemic Failure's root cause, provide DIALOG a report detailing the results of ENERGOUS' investigation and plan an effective workaround and a permanent solution. ENERGOUS will consult with DIALOG on any proposed workarounds and other solutions. * Confidential Treatment Requested + + Page 15 + + + + + + + + 11.3 Infringement of Intellectual Property Rights. If any of the Products, Product Die, Documentation or Deposit Materials is, or in ENERGOUS' or DIALOG's opinion is likely to become, the subject of an Intellectual Property Rights infringement claim, and as a result DIALOG or any of its Affiliates or their respective customers are enjoined, or in ENERGOUS' or DIALOG's opinion are likely to be enjoined, from using the Products, Product Die, Documentation or Deposit Materials, ENERGOUS will use its best efforts to: (a) procure for DIALOG and its Affiliates and their respective customers the right to continue to use the Products, Product Die, Documentation or Deposit Materials, as applicable; or, but only in the event that, despite ENERGOUS' best efforts to do so, ENERGOUS is unable to so procure such right, (b) replace or modify the Products, Product Die, Documentation or Deposit Materials, as applicable, to make them non-infringing, provided that the replaced or modified Products, Product Die, Documentation and Deposit Materials remain substantially similar in performance to the infringing Products, Product Die, Documentation and Deposit Materials. If none of the foregoing alternatives is available within a commercially reasonable time period, DIALOG may terminate this Agreement with immediate effect, provided that it will give ENERGOUS prompt prior written notice thereof. Nothing in this Section 11.3 is intended to limit DIALOG's rights to indemnification under Section 12 in connection with any such infringement claim. 11.4 Disclaimer. EXCEPT AS EXPRESSLY SET FORTH IN THIS SECTION 11, THE PRODUCTS, THE PRODUCT IP, TOOLING, DOCUMENTATION, DEPOSIT MATERIALS, CONFIDENTIAL INFORMATION AND ALL LICENSES, SERVICES AND OTHER ITEMS PROVIDED BY A PARTY TO THE OTHER PARTY HEREUNDER ARE PROVIDED "AS IS", WITHOUT WARRANTY OF ANY KIND. EXCEPT FOR THOSE WARRANTIES EXPRESSLY PROVIDED HEREIN, EACH PARTY SPECIFICALLY DISCLAIMS ALL WARRANTIES, WHETHER ORAL OR WRITTEN, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, WITH RESPECT TO ANY SUBJECT MATTER OF THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, ALL WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE AND ALL WARRANTIES ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE IN TRADE. 12. INDEMNIFICATION. 12.1 Indemnification by Energous. Subject to Section 12.2, ENERGOUS agrees to indemnify, hold harmless and, in the case of any third party claims, defend DIALOG and its Affiliates and each of their respective directors, officers, employees, contractors, agents, distributors and customers (collectively, "DIALOG Indemnitees") from and against and in respect of any and all alleged or actual demands, claims, actions, causes of action, suits or proceedings, assessments, awarded damages (including punitive damages), liabilities, interest and penalties, costs and expenses (including, without limitation, court costs and reasonable legal fees and disbursements in connection therewith) (each, a "Claim") to the extent resulting from, arising out of, relating to, or imposed upon or incurred by any DIALOG Indemnitees by reason of (a) death or bodily injury caused by or resulting from use of the Products, (b) any breach of any representation or warranty made by ENERGOUS hereunder or to any third party in relation to the Products or Product Die, (c) the infringement or misappropriation of any third party Intellectual Property Rights in relation to the Products or Product Die, (d) the infringement or misappropriation of any third party Intellectual Property Rights as a result of DIALOG's or its Affiliates' exercise of rights in accordance with the terms of this Agreement, including, but not limited to, the Manufacturing Subcontractors' manufacture of the Products on their behalf, provided that the Products are manufactured in strict compliance with the Product Specifications and Approved Production Specifications and only to the extent such Claims arise due to compliance with the Product Specifications and/or the Approved Production Specifications or use of the Tooling provided by ENERGOUS hereunder, (e) the infringement by DIALOG of any third party Marks rights as a result of its authorized use of the ENERGOUS Marks, (f) any failure by ENERGOUS to comply with applicable laws, regulations and standards, or (g) ENERGOUS' negligence, intentional misconduct or fraud. + + Page 16 + + + + + + + + 12.2 Exclusion. Notwithstanding the provisions of Section 12.1, ENERGOUS will not be liable to the extent any Claim results from (a) modification of the Products by DIALOG, its Affiliates and/or any third party (including the Manufacturing Subcontractors), or combination of the Products with other products, offered by DIALOG, its Affiliates and/or any third party, (b) acts or omissions of any Manufacturing Subcontractor (except to the extent such Claims are due to the infringement or misappropriation of third party Intellectual Property Rights arising from such Manufacturing Subcontractor's manufacturing of the Products on behalf of DIALOG in strict compliance with the Product Specifications, Approved Production Specifications and Tooling provided by ENERGOUS), (c) failure of any DIALOG Indemnitee to comply with applicable laws, regulations and standards, or (d) negligence, intentional misconduct or fraud of any DIALOG Indemnitee. For clarification, if any of the foregoing is not the cause, in whole or in part of the Claim, ENERGOUS is not relieved of its obligations under Section 12.1. 12.3 Conditions. DIALOG must notify ENERGOUS within thirty (30) business days after receipt of actual notice of any Claim by a third party for which it seeks indemnification; provided, however, any failure or delay in notice will not relieve ENERGOUS of its obligations hereunder except to the extent that ENERGOUS is actually prejudiced by such failure to notify. ENERGOUS will have control and authority with respect to the defense, litigation, compromise or settlement of such third party Claim (except to the extent that any settlement involves any commitments, responsibilities or obligations on the part of DIALOG, in which case such settlement will require the prior written consent of DIALOG, which consent will not be unreasonably delayed, conditioned or withheld). DIALOG will cooperate and provide assistance and information as may reasonably be required by ENERGOUS (but at ENERGOUS' expense) in connection therewith. DIALOG reserves the right to participate at its own cost in any third party proceedings with counsel of its own choosing. In the event that ENERGOUS does not respond to any third party Claim or does not sufficiently defend such third party Claim, DIALOG, acting reasonably, may step in and take over the defense of such Claim. Costs incurred in the settlement of any Claim, including, but not limited to, reasonable legal expenses, may be off set against future Royalties and Service Fees payable. + + Page 17 + + + + + + + + 12.4 Insurance. Each party will maintain, during the Term and for three (3) years thereafter, such comprehensive general liability insurance (including without limitation, products liability) as will adequately protect it against its potential liabilities under this Agreement, in amounts customary in the semiconductor industry for similar services and products. Each party will, at the other party's request, provide to the other party a certificate of insurance evidencing the foregoing insurance coverage. 13. LIMITATION OF LIABILITY. 13.1 EXCEPT IN THE CASE OF (a) ANY BREACH OF SECTION 10 (CONFIDENTIALITY), (b) THE PARTIES' OBLIGATIONS UNDER SECTION 12 (INDEMNIFICATION), (c) A PARTY'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, OR (d) LIABILITY ARISING FROM EPIDEMIC DEFECTS (WHICH WILL BE SUBJECT TO THE LIMITATION SET FORTH IN SECTION 11.2(d)), IN NO EVENT WILL EITHER PARTY BE LIABLE UNDER THIS AGREEMENT, REGARDLESS OF THE FORM OF ANY CLAIM OR ACTION (WHETHER IN CONTRACT, NEGLIGENCE, STRICT LIABILITY OR OTHERWISE), FOR ANY (i) INDIRECT, PUNITIVE, INCIDENTAL, RELIANCE, SPECIAL, EXEMPLARY OR CONSEQUENTIAL DAMAGES, INCLUDING, BUT NOT LIMITED TO, LOSS OF BUSINESS, REVENUES, PROFITS OR GOODWILL, OR (ii) AGGREGATE DAMAGES IN EXCESS OF [***]. IN ADDITION, ENERGOUS' LIABILITY WITH RESPECT TO ITS OBLIGATIONS UNDER SECTION 12.1(b) SHALL IN NO EVENT EXCEED [***]. THESE LIMITATIONS ARE INDEPENDENT FROM ALL OTHER PROVISIONS OF THIS AGREEMENT AND WILL APPLY NOTWITHSTANDING THE FAILURE OF ANY REMEDY PROVIDED HEREIN. 14. COMPLIANCE WITH LAWS. Each party will comply with all law and regulations applicable such party's performance under this Agreement, including but not limited to U.S. Export Administration laws and regulations and any other export, import and re-export control laws applicable to such party. The parties will refrain from exporting or re-exporting the Products or Product IP or any technical data or other materials received from each other, or the direct product of any of these, to any country, individual or organization proscribed by the United States government, unless properly authorized by the appropriate agencies of the United States government. Each party will provide all information under its control which is necessary or useful for the other party to ship or receive the Products, including, but not limited to, U.S. Export Control Classification Numbers (ECCNs), U.S. Customs Certificates of Delivery, Certificates of Origin and U.S. Federal Communications Commission identifier, if applicable. Each party agrees that it will not act in any fashion or take any action in violation of any applicable anti-bribery or anti-corruption legislation in any jurisdiction in which it does business, which prohibits the offering, giving or promising to offer or give, directly or indirectly, money or anything of value to any official of a government, political party or instrumentality to assist it in obtaining or retaining business, including the U.S. Foreign Corrupt Practices Act or any comparable legislation in another country. * Confidential Treatment Requested + + Page 18 + + + + + + + + 15. TERM AND TERMINATION. 15.1 Term. This Agreement is effective on the Effective Date. Unless earlier terminated as provided herein, this Agreement continues in effect for an initial term of seven (7) years ("Initial Term") and will automatically renew for one or more annual periods after the Initial Term (each a "Renewal Term") unless either party gives notice of non-renewal at least one hundred eighty (180) days prior to the beginning of any Renewal Term. 15.2 Termination. (a) Mutual Termination Rights. Either party may, in addition to any other remedies available to it under this Agreement or at law or in equity, terminate this Agreement (or, in the event this Agreement has been previously terminated, the Wind Down Period, if any) immediately upon the issuance of written notice to the other party in the event that (i) the other party materially breaches a material provision of this Agreement, and fails to cure such breach within thirty (30) days, or (ii) the other party undergoes an Insolvency Event. (b) Termination By ENERGOUS. (i) If ENERGOUS is acquired by a third party, ENERGOUS' acquirer will have the right, for a period of [***] following closing of such acquisition, to terminate this Agreement upon written notice to DIALOG. (ii) ENERGOUS will have the right to terminate this Agreement immediately upon the issuance of written notice to DIALOG (A) if DIALOG undergoes a Change of Control involving a competitor of ENERGOUS (as reasonably determined by ENERGOUS), or (B) if DIALOG or any of its Affiliates acquires, whether directly or indirectly through a sale of assets or a Change of Control transaction or otherwise, any competitor of ENERGOUS. DIALOG will provide ENERGOUS with notice of any such Change of Control or acquisition within [***] after the closing thereof and ENERGOUS' right to terminate the Agreement will expire [***] after receipt of such notice. (iii) ENERGOUS may, at any time after the third anniversary of the Effective Date, terminate this Agreement with or without cause upon not less than one hundred and eighty (180) days prior written notice to DIALOG. (iv) ENERGOUS will have the right to terminate this Agreement, upon not less than [***] prior written notice to DIALOG, in the event that, following termination by the [***] of its agreement with ENERGOUS, DIALOG participates in or indicates its intention to participate in the development, design or manufacture of products incorporating Uncoupled Power Transfer Technology not provided by ENERGOUS to [***]. (c) Termination by DIALOG. (i) If DIALOG is acquired by a third party, DIALOG's acquirer will have the right, for a period of [***] following closing of such acquisition, to terminate this Agreement upon written notice to ENERGOUS. * Confidential Treatment Requested + + Page 19 + + + + + + + + (ii) DIALOG may terminate this Agreement, immediately upon issuance of written notice to ENERGOUS in the event that: (A) DIALOG or its Affiliates fail to achieve a design-win pipeline with an annual projected sales value to DIALOG of at least [***] in the [***] after the availability of a Mass Production Qualified Product; or (B) the aggregate annual Net Sales of Products are below [***] by the [***] of the availability of a Mass Production Qualified Product, or below [***] by the [***] of the availability of a Mass Production Qualified Product, or below [***] by each [***] of the availability of a Mass Production Qualified Product during the remainder of the Term. (iii) DIALOG will have the right to terminate this Agreement immediately upon the issuance of written notice to ENERGOUS (A) if ENERGOUS undergoes a Change of Control involving a competitor of DIALOG, or (B) if ENERGOUS acquires, whether directly through a sale of assets or through a Change of Control transaction, any competitor of DIALOG (as reasonably determined by DIALOG). ENERGOUS will provide DIALOG with notice of any such Change of Control or acquisition within [***] after the closing thereof and DIALOG's right to terminate the Agreement will expire [***] after receipt of such notice. 15.3 Effect of Termination. Upon any termination or expiration of this Agreement, all rights, licenses (including any sublicenses granted by DIALOG) and obligations hereunder will cease, except that the provisions of Sections 6 (Intellectual Property Ownership), 9 (Royalties and Service Fees), 10 (Confidentiality), 11 (Representations and Warranties; Disclaimers), 12 (Indemnification), 13 (Limitation of Liability), 15.3 (Effect of Termination), 15.4 (Wind Down Period), 16 (Escrow), 18 (Non-Solicitation), 19 (Choice of Law and Dispute Resolution) and any provisions to give effect thereto, will survive such termination or expiration and remain in full force and effect in accordance with their terms. 15.4 Wind Down Period. (a) Notwithstanding any statement in Section 15.3 to the contrary, upon any termination or expiration of this Agreement and until the later to occur of (i) [***] from the Effective Date or (ii) [***] following the effective date of termination or expiration of this Agreement (the "Wind Down Period"), the parties' respective rights and obligations under Sections 2 (License), 3 (Sourcing), 7 (Product Sales), 9 (Royalties and Service Fees), 11 (Representations and Warranties; Disclaimers), 12 (Indemnification), 13 (Limitation of Liability), 14 (Compliance with Laws), 15.2 (Termination), 16 (Escrow) and all Exhibits hereto which are associated with any of the foregoing listed sections will remain in full force and effect as to (A) any Products or repackaged Product Die with respect to which DIALOG or any of its Affiliates has secured a design win at a customer prior to or within one (1) month after the start of the Wind Down Period, or (B) the sale of any MCMs which have been released for production at a foundry, provided, however, that DIALOG's license rights under Section 2.1 (including any sublicenses granted by DIALOG pursuant to Section 2.4) will be non-exclusive during the Wind Down Period. (b) If, at the time of notice of any termination of this Agreement, DIALOG or any of its Affiliates has a written supply contract with a customer that extends beyond the end of the Wind Down Period (a "Continuing Obligation"), DIALOG and/or its Affiliates may continue to Sell Licensed Products to such customer through the term of the Wind Down Period and for the remainder of the term of such Continuing Obligation, provided that in no event may DIALOG or its Affiliates Sell Licensed Products to such customer pursuant to this Section 15.4(b) for a period longer than [***] after the effective date of termination of this Agreement. In such event, the provisions of this Agreement that survive during the Wind Down Period will continue to survive for the remainder of the period of time that DIALOG is authorized to Sell Licensed Products to any customer in accordance with the foregoing sentence. The rights granted under this Section 15.4(b) will be conditioned upon DIALOG providing ENERGOUS a complete or redacted copy of the applicable supply contract demonstrating the existence of the Continuing Obligation as of the date of notice of termination or, if DIALOG or its Affiliate is prohibited from providing a copy of the contract by the confidentiality obligations set forth therein, a written certification from an officer of DIALOG attesting to the existence of the Continuing Obligation. * Confidential Treatment Requested + + Page 20 + + + + + + + + 16. ESCROW. 16.1 Escrow. ENERGOUS will at its expense, at DIALOG's written request during the Term and any Wind Down Period, enter into a three- party escrow deposit arrangement, in accordance with this Section 16, with a recognized escrow agent (the "Escrow Agent") of mutual agreement. ENERGOUS will keep the Deposit Materials in escrow and ensure on a quarterly basis that all the information relating to the Deposit Materials in escrow is current, including deposit of any Product Updates. 16.2 Release of Deposit Materials. In the event of any Insolvency Event and where the design files need to be accessed by DIALOG to fix an Epidemic Defect or other Product design or production issue impacting yield or quality ("Release Condition"), the Escrow Agent will, in accordance with the terms of the escrow agreement between the parties and the Escrow Agent (the "Escrow Agreement"), release the Deposit Materials to DIALOG. 16.3 License. ENERGOUS hereby grants DIALOG a non-exclusive, non-transferable (except as set forth in Section 2) license under the Product IP to use any of the Deposit Materials released from escrow for the purpose of fixing an Epidemic Defect or other Product design or production issue impacting yield or quality during the Term and, if applicable, any Wind Down Period or Continuing Obligation period, including, but not limited to, authorizing any third party subcontractor to manufacture and supply Products, provided, however, that DIALOG continues to make all Royalty payment owed to ENERGOUS (or the then-current owner of the Product IP) as provided in this Agreement. No Service Fees will be payable under this license. DIALOG agrees not to exercise such license until occurrence of a Release Condition, subject to the other restrictions set forth in this Section 16. Such license may be exercised by DIALOG only during the Term and any Wind Down Period or Continuing Obligation period and is subject to DIALOG's continued compliance with all of the other applicable terms and conditions of this Agreement during any such applicable period. All Deposit Materials will be deemed ENERGOUS' Confidential Information hereunder. DIALOG's license to possess and use the Deposit Materials does not include any right to disclose, market, sublicense or distribute the Deposit Materials to any third party other than its Affiliates and Manufacturing Subcontractors. 16.4 Rights in Bankruptcy. The licenses granted pursuant to this Agreement are license to rights in "intellectual property" (as that term is defined in Section 101 of the United States Bankruptcy Code) and governed by 11 USC Section 365(n). Accordingly, if a trustee in bankruptcy rejects the Escrow Agreement and/or this Agreement as executory contracts, then Company may elect to retain its rights under this Agreement in accordance with and subject to the provisions of 11 USC Section 365(n). + + Page 21 + + + + + + + + 17. PUBLICITY. 17.1 Publicity. Within 30 days of the Effective Date each party will issue a mutually agreed joint press release regarding the strategic cooperation for the supply of Products and the strategic cooperation between the parties. 18. NON-SOLICITATION. 18.1 Non-Solicitation. During the Term and for a [***], neither party will without the written consent of the other party (which may be granted or denied in its sole discretion) (a) directly or indirectly recruit or solicit for employment or for the provision of services any employee of the other party, (b) otherwise solicit, induce or influence any employee to leave their employment with the other party, or (c) attempt to do any of the foregoing; provided, however, that the foregoing will not apply to (y) any employee of the other party that responds to a public advertisement of employment opportunities or (z) any employee that was terminated without cause by the other party. ENERGOUS and DIALOG acknowledge and agree that the covenants in this Section 18 are reasonable and necessary to protect each of their trade secrets, Confidential Information and stable workforces. 19. CHOICE OF LAW AND DISPUTE RESOLUTION. 19.1 Applicable Law. This Agreement will be governed by and construed in accordance with the laws of the State of California, exclusive of conflict of laws principles. 19.2 Dispute Resolution; Jurisdiction. Any dispute or claim arising out of or relating to this Agreement (including any matters regarding its existence, scope, validity, breach or termination, or any non-contractual obligations arising out of or related to it) that is not able to be resolved through negotiations will be submitted to arbitration in San Francisco, California, administered by the International Chamber of Commerce under its Rules of Arbitration. There will be one arbitrator. The language of the arbitration will be English. The award will be in writing, state the reasons for the award and be final and binding. Judgment on the award may be enforced in any court of competent jurisdiction. Except as may be required by law, the parties will preserve the confidentiality of all aspects of the arbitration. The arbitration will be the sole and exclusive forum for final resolution of any such dispute or claim, provided, however, that, because each party will have access to and become acquainted with Confidential Information of the other party, the unauthorized use or disclosure of which may cause irreparable harm and significant injury which may be difficult to ascertain and which may not be compensable by damages alone, the parties agree that the damaged party will have the right to seek an injunction, specific performance or other equitable relief without prejudice to any other rights and remedies that it may have for such unauthorized use or disclosure. Each party irrevocably waives all rights to a jury trial in any judicial proceeding permitted hereunder. For the avoidance of doubt, the validity, construction, and enforceability of this Agreement and the resolution of disputes arising out of and relating to this Agreement, will be governed solely by this Section 19. * Confidential Treatment Requested + + Page 22 + + + + + + + + 20. MISCELLANEOUS PROVISIONS. 20.1 Notices. All notices required or permitted under this Agreement will be in writing, reference this Agreement and be deemed given: (a) when delivered personally; or (b) when sent by electronic mail with electronic confirmation of receipt, provided that such notice is immediately confirmed as provided in (c) or (d) below; or (c) seven (7) days after having been sent by registered or certified mail,; or (d) two (2) days after deposit with a commercial courier service, with written verification of receipt. All communications will be sent to the addresses set forth below. Either party may change its address by giving notice pursuant to, and specifically referring to, this Section 20. If to ENERGOUS: Energous Corporation 3590 North First Street Suite 210 San Jose, California 95134 U.S.A. Attn: Brian Sereda, CFO + +If to DIALOG: Dialog Semiconductor (UK) Ltd 100 Longwater Avenue Green Park Reading, RG2 6GP United Kingdom Attn: Legal Department 20.2 Relationship of Parties. ENERGOUS and DIALOG are independent business entities. Neither party nor its employees, consultants, contractors or agents are agents, employees, partners or joint venturers of the other party, nor do they have any authority to bind the other party by contract or otherwise to any obligation. The parties will not represent to the contrary, either expressly, implicitly, by appearance or otherwise. 20.3 Force Majeure. Except for obligations to pay amounts due under this Agreement, neither party will be liable for any failure or delay in its performance under this Agreement due to causes which are beyond its reasonable control, including, but not limited to, acts of God, acts of civil or military authority, fires, epidemics, floods, earthquakes, riots, wars, sabotage, labor shortages or disputes, and governmental actions; provided, however, that the affected party: (a) gives the other party written notice of such cause promptly, and in any event within fifteen (15) days of discovery thereof; and (b) uses its reasonable efforts to correct such failure or delay in its performance as soon as possible. The affected party's time for performance or cure under this Section 20.3 will be extended for a period equal to the duration of the cause. 20.4 Severability. If any provision of this Agreement is held to be invalid or unenforceable in any jurisdiction in which this Agreement is being performed, then: (a) such provision will be deleted from this Agreement in that jurisdiction to the extent of such invalidity or unenforceability without invalidating the remaining provisions of this Agreement, and any such unenforceability in that jurisdiction will not make that provision unenforceable in any other jurisdiction; and (b) the parties will agree on an alternative provision that best accomplishes the objectives of such provision, to the extent legally permissible in such jurisdiction. + + Page 23 + + + + + + + + 20.5 No Waiver. No waiver or consent in connection with or relating to this Agreement will bind either party unless in writing and signed by the party against which enforcement is sought. Waiver by either party of any default will not be deemed a waiver by such party of the same or any other default that may thereafter occur. 20.6 Counterparts. This Agreement may be executed in one or more counterparts, each of which will be an original, but taken together constituting one and the same instrument. Execution of a facsimile copy (including PDF) will have the same force and effect as execution of an original, and a facsimile/electronic signature will be deemed an original and valid signature. 20.7 Headings and References. The headings and captions used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement. 20.8 Construction. The parties and their respective counsel have negotiated this Agreement. This Agreement will be fairly interpreted in accordance with its terms and without any strict construction in favor of or against either party. 20.9 Complete Agreement. This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes and replaces all prior or contemporaneous understandings or agreements, written or oral, regarding such subject matter. No amendment to or modification of this Agreement will be binding unless in writing and signed by a duly authorized representative of both parties. 20.10 Assignment. This Agreement may not be assigned by either party without the express written consent of the other party, which approval will not be unreasonably withheld or delayed, except that either party may (without consent but with notice to the other party) assign this Agreement in its entirety to any successor in the event of a Change of Control of such party. 20.11 Notice of Merger or Acquisition. Until the date that this Agreement terminates or is terminated in accordance with Section 15 hereof, ENERGOUS agrees that, [***]. * Confidential Treatment Requested + + Page 24 + + + + + + + + IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized representatives as of the Effective Date. ENERGOUS CORPORATION DIALOG SEMICONDUCTOR (UK) LTD By: /s/ Stephen R. Rizzore By: /s Mark Tyndall Name: Stephen R. Rizzore Name: Mark Tyndall Title: President and Chief Executive Officer Title: SVP Corporate Development and Strategy + + Page 25 + + + + + + + + EXHIBIT A PRODUCTS Any ENERGOUS integrated circuit (IC) designed to receive power wirelessly and any ENERGOUS IC used in a wireless transmitter, including, but not limited to, the following Products (and any related Product Updates): [***] * Confidential Treatment Requested + + Page 26 + + + + + + + + EXHIBIT B ROYALTIES AND SERVICE FEES Royalties and Service Fees payable by DIALOG and/or its Affiliates to ENERGOUS hereunder will be calculated on a Product by Product basis as defined herein. Margin Split: Combined Royalties and Service Fees shall equal [***]. Dialog will retain the remaining [***]. [***]. [***]. Notwithstanding any provision of the Agreement, no Royalties or Service Fees will be payable to ENERGOUS hereunder in connection with any Sale to any customer of prototype or sample Licensed Products [***]. * Confidential Treatment Requested + + Page 27 + + + + + + + + EXHIBIT C Example of Letter of Authorization: Mask Set(s) Authorization for Third Party's Product(s) To whom it may concern Pursuant to a STRATEGIC ALLIANCE Agreement between Dialog Semiconductor (UK) Ltd and Energous Corporation dated November 6, 2016 (to which [Manufacturing Subcontractor] is not a party), we, Energous Corporation (Energous), hereby agree and authorize [Manufacturing Subcontractor], under the terms of this Letter of Authorization, to use the Mask Set(s) specified below for manufacturing products for the supply to the Third Party specified in paragraph 2 below only: 1. Mask Set(s) details: Mask Set(s) Product Type: Foundry Code: 2. Third Party details: Third Party's Name: Dialog Semiconductor [purchasing entity to be determined] Third Party's Address: Contact name of Third Party: 3. Volume of products The number of products to be manufactured with the Mask Set(s) will be unlimited, unless otherwise instructed by us below: Authorized Amount: [UNLIMITED] 4. Duration of Authorization The duration of this Letter of Authorization will be unlimited, unless otherwise instructed by us below: Duration of Authorization: [UNLIMITED] 5. Confidential Information Other than wafers for products specified under paragraph 1 above (which contain Energous designs), [Manufacturing Subcontractor] will not disclose to the Third Party any information which is proprietary or confidential to Energous. + + Page 28 + + + + + + + + 6. Reporting Upon Energous' request (but not more frequently than once per calendar year), [Manufacturing Subcontractor] will provide Energous with the accumulated wafer volumes ordered (and shipped) to the Third Party under this Letter of Authorization. By signing this Letter of Authorization, the Third Party authorizes [Manufacturing Subcontractor] to report to Energous accordingly. 8. Governing Law This Letter of Authorization will be governed by and construed in accordance with the laws of California, excluding its conflict of laws provisions, and be subject to the non-exclusive jurisdiction of the California courts. Very truly yours, Energous Incorporated Name: Title: Date: Agreed by Dialog Semiconductor (UK) Ltd Name: Title: Date: This Letter of Authorization is subject to the approval of the Manufacturing Subcontractors. + + Page 29 + + + + + + + + EXHIBIT D LICENSED MARKS DIALOG LICENSED MARKS: Dialog Dialog Semiconductor ENERGOUS LICENSED MARKS: Energous WattUp Unleash your power Pending: [***] * Confidential Treatment Requested + + Page 30 + + + + + + + + EXHIBIT E Commercialization plan Objective The Commercialization Plan sets forth the parties' respective rights and obligations with respect to commercial and technical activities to be performed to maximize potential Sales of Licensed Products. [***] Review O The Commercialization Plan will be reviewed and (if necessary) updated by the parties on a quarterly basis throughout the Term of the agreement. * Confidential Treatment Requested + + Page 31 + + + + + + + + EXHIBIT F CUSTOMER: [***] * Confidential Treatment Requested + + Page 32 \ No newline at end of file diff --git a/full_contract_txt/ENERGYXXILTD_05_08_2015-EX-10.13-Transportation AGREEMENT.txt b/full_contract_txt/ENERGYXXILTD_05_08_2015-EX-10.13-Transportation AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..c101181f60ce828221bdc8e2ed487029c8613491 --- /dev/null +++ b/full_contract_txt/ENERGYXXILTD_05_08_2015-EX-10.13-Transportation AGREEMENT.txt @@ -0,0 +1,253 @@ +Exhibit 10.13 TRANSPORTATION AGREEMENT BETWEEN ENERGY XXI GULF COAST, INC. AND ENERGY XXI USA, INC. DATED EFFECTIVE AS OF March 11, 2015 + + + + + + + + + + TRANSPORTATION AGREEMENT TABLE OF CONTENTS ARTICLE 1 DEFINITIONS AND INTERPRETATION 1 ARTICLE 2 NOMINATIONS AND TRANSPORTATION 3 ARTICLE 3 RATES AND CHARGES 4 ARTICLE 4 QUALITY AND PRESSURE SPECIFICATIONS 5 ARTICLE 5 OFFSHORE PLATFORM FACILITIES AND OPERATING PROCEDURES 6 ARTICLE 6 GRAVITY BANK 8 ARTICLE 7 MEASUREMENT AND TESTING 9 ARTICLE 8 TERM 11 ARTICLE 9 TITLE AND CUSTODY 11 ARTICLE 10 BILLING AND PAYMENT 11 ARTICLE 11 REMEDIES 12 ARTICLE 12 FORCE MAJEURE 13 ARTICLE 13 INDEMNIFICATION 14 ARTICLE 14 NOTICES 14 ARTICLE 15 ASSIGNMENT 15 ARTICLE 16 MISCELLANEOUS 15 + +i + + + + + + + + TRANSPORTATION AGREEMENT This Transportation Agreement (the "Agreement"), dated as of March 11, 2015 (the "Effective Date"), is by and between ENERGY XXI GULF COAST, INC., a Delaware corporation ("Shipper"), and ENERGY XXI USA, INC., a Delaware corporation ("Transporter"). Shipper and Transporter may be referred to herein individually as a "Party" or collectively as the "Parties". WITNESSETH: WHEREAS, Shipper desires to contract with Transporter for transportation service on Transporter's Gathering System; WHEREAS, Transporter is willing to transport Shipper's Crude Petroleum on the Gathering System for the compensation and subject to the terms and conditions set forth below; NOW, THEREFORE, in consideration of the mutual agreements, covenants and conditions herein contained, Transporter and Shipper hereby agree as follows: ARTICLE 1 DEFINITIONS AND INTERPRETATION 1.1 Definitions. In addition to terms defined elsewhere in this Agreement and in Annex I hereto, the following definitions shall apply hereunder: "Agreement" shall have the definition set forth in the preamble of this Agreement. "A.P.I." shall mean the American Petroleum Institute. "Barrel" or "Bbl" shall mean forty-two (42) United States gallons at a temperature of sixty degrees (60°) Fahrenheit. "BS&W" shall mean the basic sediment, water or other impurities found in a stream of Crude Petroleum. "Claiming Party" shall have the meaning set forth in the definition of Force Majeure below. "Crude Petroleum" shall mean the direct liquid products of oil wells, indirect petroleum products resulting either from distillate recovery equipment in gas and distillate fields, or a mixture of the direct product and indirect petroleum products. "Delivery Point" shall mean the point(s) of interconnection between the Gathering System and one or more oil pipelines downstream of the Gathering System where Transporter delivers Crude Petroleum to Shipper. The initial Delivery Point shall be located at Grand Isle. + +1 + + + + + + + + "Downstream Pipelines" shall mean any pipeline or other receiving facility downstream of the Delivery Point. "Effective Date" shall have the definition set forth in the preamble of this Agreement. "Force Majeure" shall mean an event which is not within the reasonable control of the Party claiming suspension (the "Claiming Party"), and which by the exercise of due diligence the Claiming Party is unable to overcome in a commercially reasonable manner. Force Majeure includes, to the extent such event satisfies the requirements of the preceding sentence: acts of God; wars (declared or undeclared); insurrections; hostilities; strikes; lockouts; riots; floods; fires; storms; storm warnings; named or numbered tropical disturbances and evacuations associated with the threat of the same; industrial disturbances; acts of the public enemy; sabotage; blockades; epidemics; landslides; lightning; earthquakes; washouts; arrests and restraints of rulers and peoples; civil disturbances; explosions; breakage or accidents to machinery or lines of pipe; hydrate obstruction or blockages of any kind of lines of pipe; adverse operating conditions on Shipper's facilities, Transporter's facilities, or the facilities of Downstream Pipelines; repairs, improvements, replacements or alterations to plants, lines of pipe or related facilities; inability of either Party to obtain necessary machinery, drilling or workover rigs, materials, permits, easements or rights-of-way on reasonable terms; freezing of delivery facility; and other events beyond the reasonable control of Shipper that affect production levels; action or restraint by court order or public or governmental authority (so long as the Claiming Party has not applied for or assisted in the application for, and has opposed where and to the extent reasonable, such government action); provided, however, that none of the loss of Shipper's or its Affiliates' markets, Shipper's or its Affiliates' inability to obtain adequate capacity (other than for reasons of force majeure affecting a Downstream Pipeline), nor Shipper's or its Affiliates' inability economically to use or resell Crude Petroleum transported hereunder shall constitute an event of Force Majeure. A force majeure event that occurs respecting one or more Downstream Pipelines for which there are no reasonable alternatives for a Claiming Party to utilize in order to meet its duties and obligations under this Agreement, regardless of whether such Downstream Pipeline declared such force majeure event, shall constitute Force Majeure for purposes of this Agreement, subject to the requirement of the first sentence of this definition. The failure of a Claiming Party to settle or prevent a strike or other labor dispute with employees shall not be considered to be a matter within such Claiming Party's control. "Gathering System" shall mean Transporter's Grand Isle Gathering System. "Month" shall mean a period of time beginning at 7:00 a.m. Central Clock Time on the first day of a calendar month and ending at 7:00 a.m. Central Clock Time on the first day of the next succeeding calendar month. "Psig" shall mean pounds per square inch gauge. "Receipt Point" shall mean the point(s) of interconnection between the Gathering System and one or more oil pipelines or other interconnecting facilities located upstream of the Gathering System where Shipper delivers Crude Petroleum to Transporter. The initial Receipt Points are identified on Exhibit A. + +2 + + + + + + + + "Shipper" shall have the definition set forth in the preamble of this Agreement. "Transporter" shall have the definition set forth in the preamble of this Agreement. 1.2 Other Terms. Other capitalized terms used in this Agreement and not defined in Section 1.1 above shall have the meanings ascribed to them throughout this Agreement. ARTICLE 2 NOMINATIONS, SCHEDULING AND TRANSPORTATION 2.1 Nomination. (a) Applications for the transportation of Crude Petroleum shall be submitted in writing on Transporter's prescribed nomination of shipment form. (b) Shipper desiring to nominate Crude Petroleum for transportation shall make such nomination to Carrier in writing on or before the twenty-fifth day of the month preceding the month during which the transportation under the nomination is to begin; except that, if space is available for current movement, a Shipper may nominate Crude Petroleum for transportation after the twenty-fifth day of the month preceding the month during which the transportation under the nomination is to begin. 2.2 Capacity Allocation. (a) When pursuant to nominations hereunder, there shall be offered to Transporter more Crude Petroleum than can be immediately gathered and/or transported, the gathering and/or transportation shall be apportioned among all Shippers by Transporter on a just and reasonable basis. 2.3 Transportation. (a) Subject to the provisions of this Agreement and all applicable Laws, Transporter shall accept and transport Shipper's Crude Petroleum and redeliver the quantity of Crude Petroleum received by Transporter, less applicable Losses as set forth in Section 7.3, at the Delivery Point. Transporter shall be under no obligation to deliver the identical Crude Petroleum received, and reserves the right to make delivery out of its common stock. 2.4 Transporter's Right to Shutdown Operations. (a) Transporter shall have absolute discretion and authority to partially or totally shutdown any and all operations and activities (and temporarily or permanently discontinue the services) contemplated hereunder at any time, if in Transporter's sole discretion, such shutdown is warranted to (i) ensure the safety of persons, property, or the environment; (ii) ensure the operational integrity of the Gathering System; or (iii) modify, inspect, maintain or repair the Gathering System. Transporter shall notify Shipper in writing in the event of any of the occurrences listed above. In such cases, Transporter shall not have any liability to Shipper for such shutdowns. + +3 + + + + + + + + (b) In the event interruption of service is required, Transporter's dispatcher will advise Shipper of an interruption as soon as practicable. (c) Nothing contained herein shall preclude Transporter from taking reasonable action(s) necessary to adjust receipts or deliveries hereunder in order to maintain the operational integrity of the Gathering System. 2.5 Line Fill and Tank Bottom Inventory. (a) Either prior to or after the acceptance of Crude Petroleum for transportation, Transporter will, upon reasonable notice, require Shipper to provide a pro rata part of the volume of Crude Petroleum necessary for pipeline fill, unavailable stocks below tank connections, and reasonable additional minimum quantities required for efficient operation or to safeguard Transporter's tankage during passage of a tropical storm or hurricane. Crude Petroleum provided by Shipper for this purpose may be withdrawn after reasonable written notice of Shipper's intention to discontinue shipment in the Gathering System. Transporter may require advance payment of final transportation charges and settlement of any unpaid accounts receivable before final delivery will be made. (b) In the event Shipper's inventory balance drops below its pro rata part of the volume of Crude Petroleum necessary for pipeline fill, unavailable stocks below tank connections, and reasonable additional minimum quantities required for the efficient operation of the system, then Transporter will require Shipper to provide the necessary volume to meet its pro rata part of such volume of Crude Petroleum. (c) In the event that Shipper maintains an inventory balance after Shipper ceases movements on the Gathering System or Shipper gives written notice of its intent to cease movements over the system and Shipper is unable to schedule appropriate shipments to clear the inactive inventory balance, Shipper will be required to settle the inactive inventory balance through Transporter. In the event no such Shipper notice is given, then Transporter may require either an adjustment in Shipper's inventory balance or settlement of Shipper's inventory balance at any time after Shipper has ceased making movements under this Agreement for a period of six months. Such settlement will be based upon the fair market value of the Crude Petroleum, as published by Platts, at the time Shipper provides written notice of termination of this Agreement or if no such written notice is given, then at such time as Transporter calls for the settlement of the Shipper's inventory balance. ARTICLE 3 RATES AND CHARGES 3.1 Transportation Charges. Crude Petroleum accepted for transportation by Transporter shall be subject to the transportation rates set forth on Exhibit A plus any other applicable charges specified in this Article 3. + +4 + + + + + + + + ARTICLE 4 QUALITY AND PRESSURE SPECIFICATIONS 4.1 Quality Specifications. Transporter reserves the right to reject any and all shipments of: (i) Crude Petroleum delivered by Shipper to Transporter whose gravity, viscosity, and/or other characteristics are such that it is not readily susceptible to transportation through the Transporter's existing facilities and it will damage the quality of other shipments or cause disadvantage to other shippers and/or the Transporter; (ii) Crude Petroleum containing water, sediment and other impurities totaling in excess of one per cent as determined by centrifugal test, or by such other tests as may be agreed upon by the Shipper and Transporter; or (iii) Crude Petroleum where Shipper has failed to comply with all applicable laws, rules, and regulations made by any governmental authorities regarding shipment of Crude Petroleum. 4.2 Contaminants. Transporter has the right, at its discretion, to reject crude oil containing contaminants. If Transporter determines that a Shipper has delivered to Transporter's facilities Crude Petroleum that has been contaminated by the existence of and or excess amounts of impure substances, including but not limited to chlorinated and/or oxygenated hydrocarbons, arsenic, lead and/or other metals which results in harm to other shippers, Downstream Pipelines, users of the contaminated Crude Petroleum or Transporter, such Shipper will be excluded from further entry into applicable segments of the pipeline system until such time as the quality of the Crude Petroleum is to the satisfaction of the Transporter. Transporter is not responsible for monitoring receipts or deliveries for contaminants. Further, Transporter reserves the right to dispose of any contaminated Crude Petroleum blocking its pipeline system. Disposal thereof may be made in any reasonable manner including but not limited to commercial sales, and any liability associated with the contamination or disposal of any Crude Petroleum shall be borne by the Shipper introducing the contaminated Crude Petroleum into Transporter's system. Shipper liability includes, but is not limited to, claims from other shippers, carriers, or users of the contaminated Crude Petroleum and the costs of any regulatory or judicial proceeding. 4.3 Periodic Samples. Transporter reserves the right to periodically sample and test the quality of the Crude Petroleum delivered by Shipper at any Receipt Point. Transporter shall be responsible for all costs attributable to such periodic sampling and testing. If at any time Shipper's Crude Petroleum triggers any of the rejection rights set forth in Section 4.1, Shipper shall pay for any tests performed thereafter to establish that such Crude Petroleum no longer triggers such provisions. 4.4 Pressure. The present maximum operating pressure at all reception points is 1440 psig. Shipper's injection pressure shall be maintained within this stated maximum limit and shall conform, as near as possible, to the hydraulic gradient. Transporter reserves the right to reduce the maximum operating pressure by written notice to Shipper. Shipper shall furnish, or cause the producer from which Crude Petroleum is purchased to furnish, install, calibrate, and maintain continuous pressure recording devices at or near injection points to monitor pipeline operating pressures. Copies of the recording charts taken from these recording devices shall be furnished to Transporter on a weekly basis by Shipper. Shipper shall also furnish Transporter copies of annual calibration certificates for recording devices. Transporter reserves the right to witness calibration of these devices, and Shipper shall notify Transporter at least 48 hours prior to the initiation of such calibration procedures. Circumstances may arise which in Transporter's judgment require the Gathering System, or any part thereof, be shut down. Following such shutdown periods, Shippers shall obtain authorization from Transporter prior to the resumption of injections. + +5 + + + + + + + + 4.5 Excess Water, Sediment and Other Impurities. If during any monthly accounting period, the weighted average of the BS&W on all meter tickets covering Crude Petroleum delivered to Transporter by Shipper reflects a water, sediment and other impurities content which exceeds 1%, Shipper shall pay to Transporter a handling charge as specified in the table in Exhibit A on such excess water, sediment, and other impurities to cover the treating, separation and other aspects of handling such excess water, sediment and other impurities delivered to Transporter. This explicitly excludes disposal. Transporter shall accept excess water for handling only when Shipper has made the necessary arrangements for disposal of such excess water. Shipper may dispose of its excess water by method acceptable to Transporter such as barging or trucking subject to a mutually agreed upon schedule for excess water removal by Shipper from Transporter's Grand Isle tankage. As an alternative, Shipper may request Transporter to dispose of Shipper's excess water by use of Transporter's onshore disposal wells. The fees for disposal are set forth in Exhibit A. In any event, Shipper must contact Transporter in advance at 713-351-3000 to schedule means by which BS&W will be disposed. Where no meter tickets are available or meter tickets are in Transporter's opinion unreliable, water, sediment and other impurities in the system in excess of that reported on acceptable meter tickets will be allocated in a fair and equitable manner by Transporter. Notwithstanding the fact that Transporter levies a handling charge covering excess water, sediment and other impurities content in a Crude Petroleum stream, Transporter reserves the right to reject any nomination of products other than Crude Petroleum which satisfies all quality standards, requirements and conditions set forth herein. ARTICLE 5 OFFSHORE PLATFORM FACILITIES AND OPERATING PROCEDURES 5.1 Transporter or its authorized representative shall have access to the platform from which shipments are received for the purpose of examining and checking meters and other installations utilized in connection with the handling of Crude Petroleum injected into the pipeline. 5.2 Shipper, upon request by Transporter, shall install, maintain and operate, or make arrangements with platform owners to install, maintain, and operate equipment to inject corrosion inhibitors, biocides, scale inhibitors, paraffin chemicals, or other chemicals as specified by Transporter. 5.3 Shipper shall provide or arrange with platform operator to furnish, operate, and maintain such pumping equipment as is necessary to inject the Crude Petroleum nominated by Shipper for shipment or will cause same to be done. Pumping equipment shall be controlled and operated so that the hourly rate at which Crude Petroleum is injected during each month shall not exceed 120% of the average hourly volume nominated and accepted for shipment during the current calendar month. If piston pumps are used, surge absorbers shall be installed, upon reasonable request of Transporter, to minimize pulsation. Transporter reserves the right, upon written notification to all Shippers to further limit the variation of Shipper's injection rates, if in Transporter's judgment proration is imminent. Reasonable exceptions to variations of injection rates for Shippers with newly discovered, expended production, and unusual production difficulties will be allowed by Transporter. + +6 + + + + + + + + 5.4 Physical and legal transfer of custody of Crude Petroleum to Transporter shall be at points where producer's or other delivering parties' lines are connected to Transporter's existing facilities, however, measurement of quantities received for the account of Shipper at such points shall be determined by measurement facilities installed on the production platforms where the Crude Petroleum is produced or to which it is moved for delivery into Transporter's existing facility. 5.5 The Transporter shall have the right to require uniform measurement and sampling equipment/procedures at all installations so that custody transfer measurements are made on a uniform basis. Transporter reserves the right to require Shipper to install or cause platform owners to install in accordance with applicable API and ASTM (American Society for Testing Materials) standards metering and meter proving equipment capable of continuous custody measurement, and devices for continuous proportional to-flow sampling of the Crude Petroleum. 5.6 If Crude Petroleum to be delivered to Transporter is produced at some distance from the Transporter's facilities and Transporter does not elect to provide a connection directly to the production platform where it is produced, Shipper may furnish, or cause to be furnished, free of cost to Transporter, the connecting pipeline required to deliver such Shipper's Crude Petroleum to the location designated by Transporter. If such location is on another producer's platform, all arrangement for installing the connecting pipeline or other required equipment or facilities on such platform shall be the sole responsibility of the Shipper. 5.7 At Transporter's request, Shipper will allow, or cause the platform owner(s) to allow, Transporter to place, operate, repair and maintain riser piping, scraper traps, valves, surveillance equipment, and any other equipment deemed by Transporter to be needed for the safe and efficient operation of the Gathering System. In the event Transporter should decide to transmit meter readings or other data from the platform from which Shipper's Crude Petroleum is run, Shipper will allow, or cause the platform owner(s) to allow, reasonable access to and use of communication facilities which may be available at the platform. 5.8 Where meter readings are available Transporter will prepare, as near as practicable to 7:00 a.m. on the first day of each month, a monthly pipeline run ticket for Shipper showing opening and closing meter readings and water, sediment, other impurities percentage on the basis of which Crude Petroleum and water, sediment, and other impurities volumes will be determined. If for any reason Transporter's representative fails to reach any receipt point on the first day of the month, Shipper's own representative, with prior authorization from Transporter, will obtain and make a record for Transporter's representative of the closing meter reading and will withdraw the sample material from the sampling equipment. The sample material thus withdrawn will be sealed in a special container and retained by Shipper's representative for Transporter's representative who will, during his next trip to that receipt point, determine the water, sediment, and other impurities percentage of the sample material in the special container and prepare the monthly pipeline run ticket. Where no meter readings are available, Crude Petroleum including water, sediment and other impurities will be determined by Transporter from the best available data. + +7 + + + + + + + + 5.9 It is recognized that from time to time producers inject acid into well formations containing Crude Petroleum in an attempt to stimulate production and fluids subsequently produced from such wells may contain unspent acid which must be neutralized to a pH of 4.5 or greater before the fluids (with which acid is produced) are delivered to Transporter. If such total fluids (Crude Petroleum plus unspent acid) is not so neutralized, the Gathering System may have to be shut down which in turn will require all connected producers to shut in their wells. To assist Transporter to anticipate the need and to prepare for possible corrective actions which may be required to void or minimize operating difficulties caused by any unneutralized acid, Shippers shall furnish, or cause the producer from which Crude Petroleum is purchased to furnish to Transporter, the following information at least 24 hours in advance of start of production from any well which has been acidized: (i) estimated time of first production from acidized well; (ii) estimated time that first production from acidized well, which has been neutralized to a pH equal to or greater than 4.5, will be injected into the Gathering System; and (iii) estimated time that produced fluids from previously acidized wells, which has been neutralized to a pH equal to or greater than 4.5, will be free of neutralized acids. Shipper shall assume full responsibility for and reimburse Transporter for all extra costs and expenses incurred by Transporter as the result of any unspent and/or unneutralized acids being present in the Crude Petroleum delivered to Transporter by Shipper. Shipper will be billed for all such extra costs and expenses for shutting down, purging of such unspent acids, and subsequent resuming operation of the Transporter's Gathering System. Transporter shall not be liable to any Shipper for any damage sustained by Shipper(s) as the result of unspent and/or unneutralized acids being received from other Shipper(s). 5.10 In the event that Shipper does not operate the wells from which the Crude Petroleum nominated for shipment is produced or does not operate the treating, measurement, or pumping equipment through which such Crude Petroleum is handled prior to its delivery to Transporter, then Shipper shall designate the party or parties responsible for the operation of such facilities and shall authorize and direct such party or parties to (1) comply with all provisions of this Agreement related to their operations and (2) furnish to Transporter such reasonably requested operational, technical, administrative, and analytical data as Transporter deems necessary to account for volumes being delivered to Transporter and assure safe, lawful, and efficient operations. ARTICLE 6 GRAVITY BANK 6.1 To assure that no shipper will be materially damaged or allowed to benefit by changes in gravity due to the intermixing of petroleum in the Gathering System, Shipper will be required, as a condition of tendering, to participate in a Gravity Bank. The table of gravity differential values per barrel as attached hereto as Exhibit B is incorporated herein and made a part of this Agreement. + +8 + + + + + + + + 6.2 Transporter shall administer the Gravity Bank providing adjustments for the value of crudes with different qualities in the manner specified below for both receipt and delivery volumes. Applicable barrels and gravities shall be the net barrels at 60 degrees Fahrenheit (with no deduction for Loss allowance) and the gravities recorded by the Operator at points where it customarily records gravities and quantities. The weighted average gravity differential value per barrel (for two or more gravities of petroleum), as hereinafter referred to, shall be obtained in the following manner: multiply the gravity differential values per barrel (from the attached table as same is from time to time revised) by the number of barrels to which such gravity differential values are applicable and then divide the total of the resultant gravity differential values in dollars and cents by the total of the applicable barrels. 6.3 Adjustments between shippers shall be computed as follows: (i) compute the weighted average gravity differential value per barrel of the barrels received from by each shipper and (ii) compute the weighted average gravity differential value per barrel of the composite common stream for receipts. 6.4 Calculation: (a) If the weighted average gravity differential value per barrel of a shipper as so determined under Section 6.3(i) above shall be greater than the weighted average gravity differential value per barrel of the aforementioned common stream petroleum as determined under Section 6.3(ii), the difference in cents per barrel shall be calculated and shipper shall be credited (receives) an amount calculated by multiplying said difference in gravity differential value per barrel by the applicable barrels. (b) If the weighted average gravity differential value per barrel of a shipper is less than the weighted average gravity differential value per barrel of the aforementioned common stream petroleum, the difference shall be calculated as above outlined and a shipper debited for such difference. (c) A sample calculation is attached as Exhibit C. 6.5 These calculations shall be made for each calendar month and the algebraic sum of the adjustments for the system shall be zero +/- One Dollar. If a shipper shall have a net debit balance in combining the two adjustments made above, the balance shall be remitted to the clearinghouse within fifteen (15) days from receipt of statement of such debit. If Shipper shall have a credit, the clearinghouse shall remit the amount thereof after receipt by the clearinghouse of the sums from those shippers having debits as calculated above. ARTICLE 7 MEASUREMENT AND TESTING 7.1 Crude Petroleum tendered to Transporter for transportation shall be measured and tested by a representative of Transporter prior to its receipt from Shipper. Shipper shall have the privilege of being present or represented at the measurement and testing. Quantities shall be measured by meters and calculated in accordance with applicable A.P.I. Manual of Petroleum Measurement Standards. All shipments of required specifications will be received and delivered as net standard volume, as the total volume excluding water, sediment and other impurities, corrected by the appropriate volume correction factor for the observed temperature and A.P.I. gravity, relative density, or density to a standard temperature of 60 degrees Fahrenheit and also corrected by the applicable pressure correction factor and meter factor. Where measurement and testing of shipments to determine water, sediment, and other impurities content is not performed, the Transporter shall determine the water, sediment, and other impurities content of shipments based on the best available data. Due to the complexity of the allocations of the non-metered receipt locations, any prior period volume adjustment of 500 barrels or less will be corrected by including the corrected prior Months' (positive or negative) volume in the current month allocation process. Any shipper request for volume or quality adjustments prior to the most previous twenty-four (24) Month time frame will not be considered. + +9 + + + + + + + + 7.2 Evidence of Receipts and Deliveries. Transporter shall account to Shipper for Crude Petroleum received and delivered. Crude Petroleum received from Shipper and Crude Petroleum delivered to Shipper shall, in each instance, be evidenced by tickets, showing opening and closing tank gauges or meter readings, as applicable, temperature, basic sediment and water, and any other data essential to the determination of quantity. Such tickets shall be jointly signed by representatives of Transporter and Shipper, and shall constitute full receipt for (a) the Crude Petroleum received and (b) the Crude Petroleum delivered. Where meter tickets are not available or in Transporter's opinion are unreliable, Transporter shall use the best available data to determine the quantity of Crude Petroleum received and delivered. For receipt locations where custody transfer measurement is by Lease Automatic Custody Transfer ("LACT") unit or by allocation process, a deduction of twenty-five hundredths of one percent (0.25%) will be made to cover evaporation, interface losses and normal losses during transportation. 7.3 Losses. (a) All shipments of Crude Petroleum of 50 degrees A.P.I. gravity or above shall be subject to a deduction to cover the shrinkage resulting from the mixture thereof, in the facilities of Transporter, with Crude Petroleum of A.P.I. gravity of 49.9 degrees or less according to the following table: A.P.I. Gravity (Degrees) Deduction 50 through 59.9 1% 60 through 74.9 2% 75 through 84.9 3% 85 through 94.9 4% 95 through 104.9 5% 105 through 120.9 6% (b) The quantity of Crude Petroleum deliverable shall be the net standard volume less shrinkage, evaporation, or any other losses in transit or due to leaks or pipeline breaks. All such shrinkage, evaporation, and gains or losses shall be assigned by Transporter to Shipper on a just and reasonable basis. + +10 + + + + + + + + ARTICLE 8 TERM 8.1 Term. Subject to the other provisions of this Agreement, the term of this Agreement shall commence on the Effective Date and shall remain in effect until terminated by either Party upon thirty (30) days' prior written notice. 8.2 Remedies Cumulative. Each Party shall have any and all remedies available to it under this Agreement, at law, or in equity for any breach by the other Party of the other Party's obligations under this Agreement. All such remedies are cumulative, not exclusive, and such Party may exercise any or all of such remedies in addition to or as an alternative to termination of the Term. No election of remedies shall be required or implied as the result of a Party's decision to avail itself of a remedy hereunder. ARTICLE 9 TITLE AND CUSTODY 9.1 Title. A nomination of Crude Petroleum shall be deemed a warranty of title to such Crude Petroleum by Shipper, or a warranty of the good right to deliver such Crude Petroleum for transportation hereunder. Transporter may, in the absence of adequate security, decline to receive any Crude Petroleum which is in litigation, or as to which a dispute over title may exist, or which is encumbered by any lien. By nominating Crude Petroleum, Shipper also agrees to be responsible for any and all losses resulting from disputes, encumbrances, or failure of title thereto. Neither acceptance for transportation, nor redelivery by Transporter at the Delivery Point shall be deemed a representation by Transporter as to title. 9.2 Custody. As among the Parties, Shipper shall be in custody, control and possession of the Crude Petroleum affected by this Agreement at all times prior to delivery to Transporter at the Receipt Point and after redelivery by Transporter at the Delivery Point and Transporter shall have custody and control of the Crude Petroleum affected by this Agreement at all times after delivery by Shipper at the Receipt Point and prior to redelivery by Transporter at the Delivery Point. ARTICLE 10 BILLING AND PAYMENT 10.1 Payment. All payments are due within 10 days of receipt of the invoice by ACH or wire transfer, unless the Transporter determines in a manner not unreasonably discriminatory that the financial condition of Shipper or Shipper's guarantor (if any) is or has become impaired or unsatisfactory or Transporter determines in a manner not unreasonably discriminatory it necessary to do so, in which case the payment due date shall be that specified in a written notice to the Shipper. Notwithstanding the foregoing, Shipper may withhold payment of amounts it disputes in good faith, provided that if any such amount is later determined to have been due Transporter Section 10.2 below shall apply to such amount. + +11 + + + + + + + + 10.2 Past-Due Interest. If any charge remains unpaid after the due date specified in Transporter's invoice, then such amount due may bear interest from the day after the due date until paid, calculated at an annual rate equivalent to the lesser of (1) 125% of the prime rate of interest, as of the date of Transporter's invoice, charged by the Citibank N.A. of New York, New York, for ninety (90) day loans made to substantial and responsible commercial borrowers or (2) the maximum rate allowed by law. In addition Shipper shall pay all documented costs incurred by Transporter to collect any unpaid amounts. 10.3 Setoff. In the event Shipper fails to pay any such undisputed charges when due, Transporter shall have the right to setoff such amounts owed and future amounts owed against those amounts Transporter owes Shipper. 10.4 In the event Transporter determines in a manner not unreasonably discriminatory that the financial condition of Shipper or Shipper's guarantor (if any) is or has become impaired or unsatisfactory or Transporter determines in a manner not unreasonably discriminatory it is necessary to obtain security from Shipper, Transporter, upon notice to Shipper, may require any of the following prior to Transporter's delivery of Shipper's Crude Petroleum in Transporter's possession or prior to Transporter's acceptance of Shipper's Crude Petroleum: (1) prepayment of all charges, (2) a letter of credit at Shipper's expense in favor of Transporter in an amount sufficient to ensure payment of all such charges and, in a form, and from an institution acceptable to Transporter, or (3) a guaranty in an amount sufficient to ensure payment of all such charges and in a form and from a third party acceptable to Transporter. In the event, Shipper fails to comply with any such requirement on or before the date supplied in Transporter's notice to Shipper, Transporter shall not be obligated to provide Shipper access to Transporter's facilities or provide services pursuant to this Agreement until such requirement is fully met. ARTICLE 11 REMEDIES 11.1 Lien/Auction. (a) Transporter shall have a lien on all Crude Petroleum delivered to Transporter to secure the payment of any and all transportation, or any other charges that are owed Transporter. Such lien shall survive delivery of Crude Petroleum to Shipper. Such lien shall extend to all Crude Petroleum in Transporter's possession beginning with Shipper's first receipt of transportation or other services from Transporter. The lien provided herein shall be in addition to any lien or security interest provided by statute or applicable law. Transporter may withhold delivery to Shipper of any of Shipper's Crude Petroleum in its possession and exercise any other rights and remedies granted under this Agreement or existing under applicable law until all such charges have been paid as provided above. (b) If Shipper fails to pay the undisputed portion of an invoice by the due date, in addition to any other remedies under this Agreement or under applicable law, Transporter shall have the right, either directly or through an agent, to sell at a private sale any and all Crude Petroleum of such Shipper in its custody at fair market value at the time of sale. The proceeds of any sale shall be applied to the following order: (i) to the reasonable expenses of holding, preparing for sale, selling, and to the extent allowed by law, reasonable attorney's fees and legal expenses incurred by Transporter; and (ii) to the satisfaction of the Shipper's indebtedness including interest herein provided from the date of payment is due. The balance of the proceeds of the sale remaining, if any, shall be paid to Shipper or, if there is a dispute or claim as to entitlement, held for whoever may be lawfully entitled thereto. + +12 + + + + + + + + 11.2 Suspension of Performance. In the event Shipper fails to pay charges when due, Transporter shall not be obligated to provide Shipper access to Transporter's facilities or provide services pursuant to this Agreement until such time as payment is received by Transporter. 11.3 Legality of Shipments. Transporter reserves the right to reject any and all Crude Petroleum nominated for shipment when Shipper fails or is unwilling or unable to comply with all applicable Laws, or fails to reasonably demonstrate to Transporter that the shipment would be in conformance with the provisions of this Agreement. 11.4 Claims. As a condition precedent to recovery for losses or delay to shipments, claims must be filed in writing with Transporter within one year and one day after delivery of the Crude Petroleum, or, in case of failure to make delivery, then within one year and one day after a reasonable time for delivery has elapsed; and suits arising out of such claims shall be instituted against the Transporter only within two years and one day from the date of delivery, or within two years and one day after a reasonable time for delivery has elapsed. Where claims are not filed or suits are not instituted thereon in accordance with the foregoing provisions, Transporter shall not be liable and such claims will not be paid. ARTICLE 12 FORCE MAJEURE 12.1 Force Majeure. If either Transporter or Shipper is rendered unable by an event of Force Majeure to carry out, in whole or part, its obligations hereunder and such Party gives notice and full details of the event to the other Party as soon as practicable after the occurrence of the event, then, pending such Force Majeure, but only during that period, the obligations of the Party affected by the event (other than the obligation to make payments then due or becoming due with respect to performance prior to the event) shall be canceled or suspended, as applicable, to the extent required; provided, however, that notwithstanding anything in the foregoing to the contrary, Shipper's obligation to pay the transportation charge set forth in Section 3.1 shall not be reduced, suspended or otherwise excused in any manner as the result of Force Majeure, regardless of which Party is affected. The Party affected by the Force Majeure shall use commercially reasonable efforts to remedy the Force Majeure condition with all reasonable dispatch, shall give written notice to the other Party of the termination of the Force Majeure, and shall resume performance of any suspended obligation promptly after termination of such Force Majeure; provided, that notwithstanding anything in the foregoing to the contrary, a Party may elect, in its sole discretion, whether or not to repair or replace its facilities following catastrophic destruction of all or substantially all of such facilities. + +13 + + + + + + + + ARTICLE 13 INDEMNIFICATION 13.1 Shipper shall release, indemnify, defend, and hold harmless Transporter and its affiliates, directors, officers, employees, agents, consultants, representatives, and invitees from and against all claims and losses arising out of or relating to (i) the operations of Shipper, (ii) any breach of this agreement by Shipper, except to the extent attributable to the negligence, willful misconduct or fault of Transporter, and (iii) operations or activities upstream or downstream of the Gathering System, except to the extent attributable to the negligence, willful misconduct or fault of Transporter. 13.2 Transporter shall release, indemnify, defend, and hold harmless Shipper and its Affiliates, directors, officers, employees, agents, consultants, representatives, and invitees from and against all claims and losses arising out of or relating to (i) the operations of Transporter and (ii) any breach of this agreement by Transporter, except to the extent attributable to the negligence, willful misconduct or fault of Shipper. ARTICLE 14 NOTICES 14.1 Notices. Unless otherwise provided herein, any notice, request, invoice, statement, or demand which either Party desires to serve upon the other regarding this Agreement shall be made in writing and shall be considered as delivered (i) when hand delivered, (ii) when delivery is confirmed by pre-paid delivery service (such as FedEx, UPS, DHL or a similar delivery service), (iii) if mailed by United States certified mail, postage prepaid, three (3) Business Days after mailing, (iv) if sent by facsimile transmission, when receipt is confirmed by the equipment of the transmitting Party, or (v) when sent, if sent by Email. Any notice shall be given to the other Party at the following address, or to such other address as either Party shall designate by written notice to the other: ENERGY XXI USA, INC. Attn: Phone: Fax: Email address: ENERGY XXI GULF COAST, INC. Attn: Phone: Fax: Email address: + +14 + + + + + + + + ARTICLE 15 ASSIGNMENT 15.1 Assignment. (a) Shipper shall have the right to assign, or transfer all, but not less than all, of its rights and obligations under this Agreement with the prior written consent of Transporter, which consent may be withheld in Transporter's sole discretion. (b) No assignment or transfer of this Agreement shall be effective as to Transporter unless and until Transporter has been provided written notice thereof. 15.2 Encumbrance. (a) Shipper shall not pledge, encumber or grant any security interest with respect to any portion of its interests or rights under this Agreement. (b) Transporter shall have the right to pledge, encumber or otherwise grant security interests in its interests or rights under this Agreement. 15.3 Nothing herein shall prevent or prohibit Shipper, without consent of Transporter, from engaging and using contractors and subcontractors to perform services, for the benefit of Shipper, in connection with the performance by Shipper of its obligations under this Agreement. ARTICLE 16 MISCELLANEOUS 16.1 Applicable Laws. This Agreement is subject to, and the Parties shall comply with, all valid present and future laws, regulations, rules and orders of Governmental Authorities now or hereafter having jurisdiction over the Parties, this Agreement, or the Services performed or the facilities utilized under this Agreement. 16.2 Authorizations. The Parties hereto represent that they have all requisite corporate and/or company authorizations necessary or proper to consummate this Agreement. 16.3 Entirety. This Agreement constitutes the entirety of the understanding between the Parties with respect to the subject matter dealt with herein, and replaces and supersedes all prior agreements, conditions, understandings, representations and warranties made between the Parties with respect to the subject matter hereof, whether written or oral. It is further agreed that no amendment, modification or change herein shall be enforceable, except as specifically provided for in this Agreement, unless reduced to writing and executed by both Parties. 16.4 Governing Law; Jurisdiction; Jury Waiver. (a) The validity, construction and performance of this Agreement shall be governed by the laws of the State of Texas, not including any of its conflicts of law rules that would direct or refer to the laws of another jurisdiction. The Parties have allocated liability risk pursuant to this Agreement and therefore intend that no anti-indemnity law, rule or regulation apply hereto. + +15 + + + + + + + + (b) The Parties agree that the appropriate, exclusive and convenient forum for any disputes between the Parties arising out of this Agreement or the transactions contemplated hereby shall be in any state or federal court in Harris County, Texas, and each of the Parties irrevocably submits to the jurisdiction of such courts solely in respect of any proceeding arising out of or related to this Agreement. The Parties further agree that the Parties shall not bring suit with respect to any disputes arising out of this Agreement or the transactions contemplated hereby in any court or jurisdiction other than the above specified courts. (c) EACH PARTY HERETO WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY DISPUTE ARISING FROM OR UNDER THIS AGREEMENT. 16.5 Non-Waiver. No waiver by either Party hereto of any one or more defaults by the other in the performance of any of the provisions of this Agreement shall be construed as a waiver of any other default or defaults whether of a like kind or different nature. Any delay, less than any applicable statutory period of limitations, in asserting or enforcing any rights under this Agreement, shall not be deemed a waiver of such rights. Failure of either Party to enforce any provision of this Agreement or to require performance by the other Party of any of the provisions hereof shall not be construed to affect the validity of this Agreement or any part thereof, or the right of either Party thereafter to enforce each and every provision hereof. 16.6 Severability. If any term or other provision or portion of a provision of this Agreement is determined to be invalid, illegal or incapable of being enforced by any rule of Law or public policy, all other terms and conditions of this Agreement shall nevertheless remain in full force and effect. 16.7 Amendments. This Agreement shall not be altered or amended, except by an agreement in writing executed by all parties to this Agreement in accordance with the limited partnership agreement of Transporter. 16.8 Confidentiality. (a) Confidentiality. Except as otherwise provided in this Section 16.8, each Party agrees that it shall maintain all terms and conditions of this Agreement, and all information disclosed to it by the other Party or obtained by it in the performance of this Agreement and relating to the other Party's business (including all data relating to the production of Shipper, including well data, production volumes, volumes gathered, transported, or compressed, and quality) (collectively, "Confidential Information") as confidential, and that it shall not cause or permit disclosure of this Agreement or its existence or any provisions contained herein without the express written consent of the other Party. + +16 + + + + + + + + (b) Permitted Disclosures. Notwithstanding Section 16.8(a), disclosures of any Confidential Information may be made by either Party (i) to the extent necessary for such Party to enforce its rights hereunder against the other Party; (ii) to the extent to which a Party is required to disclose all or part of this Agreement by a statute or by the order or rule of a Governmental Authority exercising jurisdiction over the subject matter hereof, by order, by regulations, or by other compulsory process (including deposition, subpoena, interrogatory, or request for production of documents in any administrative, judicial, or legislative proceedings); (iii) to the extent required by the applicable regulations of a securities or commodities exchange; (iv) to a third person in connection with a proposed sale or other transfer of all or any portion of a Party's assets and properties related to the subject matter of this Agreement, provided that such third person agrees in writing to be bound by the terms of this Section 16.8; (v) to its own directors, officers, employees, agents and representatives; (vi) to an Affiliate; (vii) to financial advisors, attorneys, and banks, provided that such Persons are subject to a confidentiality undertaking consistent with this Section 16.8(b); or (ix) any information which, through no fault of a Party, becomes a part of the public domain. (c) Notification. If either Party is or becomes aware of a fact, obligation, or circumstance that has resulted or may result in a disclosure of any of the terms and conditions of this Agreement authorized by Section 16.8(b)(ii) or (iii), it shall so notify in writing the other Party promptly and shall provide documentation or an explanation of such disclosure as soon as it is available. (d) Party Responsibility. Each Party shall be deemed solely responsible and liable for the actions of its directors, officers, employees, agents, representatives and Affiliates for maintaining the confidentiality commitments of this Section 16.8 (e) The provisions of this Section 16.8 shall survive any termination of this Agreement for a period of one (1) year. + +17 + + + + + + + + 16.9 Representations. Each Party declares, warrants, and represents on behalf of itself (i) that it has contributed to the drafting of this Agreement or has had it reviewed by legal counsel before executing it, (ii) that this Agreement has been purposefully drawn and correctly reflects such Party's understanding of the transaction that it contemplates as of the Effective Date hereof, (iii) that this Agreement has been validly executed and delivered; (iv) that this Agreement has been duly authorized by all action necessary for the authorization thereof, and (v) this Agreement constitutes a binding and enforceable obligation of the Party, enforceable in accordance with its terms. 16.10 Counterparts. This Agreement may be executed in any number of counterparts and if so signed in counterparts, all counterparts taken together shall have the same effect as if all parties had signed the same instrument. 16.11 No Partnership. This Agreement shall not constitute a partnership or joint venture between Transporter and Shipper. Transporter shall carry out its operations with respect to the Gathering System as an independent contractor and shall not (except as expressly set forth in this Agreement) be subject to the control of Shipper in doing so. 16.12 No Third Party Beneficiaries. This Agreement is for the sole and exclusive benefit of the Parties hereto. Except as expressly provided herein to the contrary, nothing herein is intended to benefit any other Person not a Party hereto, and no such Person shall have any legal or equitable right, remedy or claim under this Agreement. 16.13 Exhibits. All exhibits and the like contained in or attached to the Agreement are integrally related to this Agreement and are hereby made a part of the Agreement for all purposes. To the extent of any ambiguity, inconsistency or conflict between the body of this Agreement and any of the exhibits and the like attached to the Agreement, the terms of the body of the Agreement shall prevail. 16.14 Further Assurances. Each Party shall take such acts and execute and deliver such documents as may be reasonably required to effectuate the purposes of this Agreement. 16.15 Limitation of Liability. EXCEPT WITH REGARD TO OBLIGATIONS TO INDEMNIFY A PARTY FOR CLAIMS MADE BY THIRD PARTIES, NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY (OR ITS AFFILIATES) PURSUANT TO THIS AGREEMENT FOR ANY CONSEQUENTIAL, INCIDENTAL, INDIRECT, OR SPECIAL DAMAGES OR LOSSES OR ANY PUNITIVE, EXEMPLARY, TREBLE, OR SIMILAR DAMAGES ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE PERFORMANCE OF, OR FAILURE TO PERFORM, ITS OBLIGATIONS HEREUNDER, EVEN IF SUCH DAMAGES OR LOSSES ARE CAUSED BY THE SOLE, JOINT, OR CONCURRENT NEGLIGENCE, STRICT LIABILITY, OR OTHER FAULT OF THE PARTY WHOSE LIABILITY IS BEING WAIVED HEREBY. [Next page is signature page] + +18 + + + + + + + + IN WITNESS WHEREOF, the Parties hereto have executed this Agreement in duplicate originals to be effective as of the Execution Date. ENERGY XXI USA, INC. ENERGY XXI GULF COAST, INC. By: /S/ ANTONIO DE PINHO By: /S/ RICK FOX Name: ANTONIO DE PINHO Name: RICK FOX Title: PRESIDENT Title: CFO + +19 + + + + + + + + EXHIBIT A TABLE OF RATES FROM ESTABLISHED RECEPTION POINTS TO GRAND ISLE (JEFFERSON PARISH), LOUISIANA + +From Rate in Cents Per Barrel of 42 United States Gallons + +Reception Points Offshore Louisiana Crude Petroleum Transportation + +Excess Water, Sediment, and Other Impurities Handling Block 22, Grand Isle 16 38.58 29.76 Block 30, Grand Isle 33 57.91 29.76 Block 73, West Delta 73 122.78 29.76 Block 90, West Delta 90 122.78 29.76 Block 62, West Delta 62 152.28 60.88 Block 54, South Timbalier 54 166.65 60.88 Block 30, West Delta 30 172.71 60.88 Block 32, West Delta 30 172.71 60.88 Block 45, West Delta 45 172.68 60.88 Block 93, South Pass 89 177.11 60.88 Block 152, Mississippi Canyon 268 242.01 &bbsp; 60.88 Block 311, Mississippi Canyon 311 242.01 60.88 Block 397, Mississippi Canyon 397 282.87 60.88 Block 280, Mississippi Canyon 281 291.11 60.88 Disposal Fee: _______________________ + +A-1 + + + + + + + + EXHIBIT B ADJUSTMENT AUTHORIZATION TABLES OF DIFFERENTIALS FOR USE IN DETERMINING ADJUSTMENTS FOR DIFFERENCE IN GRAVITY OF CRUDE PETROLEUM API GRAV DIFF/BBL API GRAV DIFF/BBL API GRAV DIFF/BBL API GRAV DIFF/BBL API GRAV DIFF/BBL API GRAV DIFF/BBL 20 2.75 24.9 3.485 29.8 4.22 34.7 4.955 39.6 5.08 44.5 5.1 20.1 2.765 25 3.5 29.9 4.235 34.8 4.97 39.7 5.08 44.6 5.1 20.2 2.78 25.1 3.515 30 4.25 34.9 4.985 39.8 5.08 44.7 5.1 20.3 2.795 25.2 3.53 30.1 4.265 35 5 39.9 5.08 44.8 5.1 20.4 2.81 25.3 3.545 30.2 4.28 35.1 5 40 5.1 44.9 5.1 20.5 2.825 25.4 3.56 30.3 4.295 35.2 5 40.1 5.1 45 5.1 20.6 2.84 25.5 3.575 30.4 4.31 35.3 5 40.2 5.1 45.1 5.085 20.7 2.855 25.6 3.59 30.5 4.325 35.4 5 40.3 5.1 45.2 5.07 20.8 2.87 25.7 3.605 30.6 4.34 35.5 5 40.4 5.1 45.3 5.055 20.9 2.885 25.8 3.62 30.7 4.355 35.6 5 40.5 5.1 45.4 5.04 21 2.9 25.9 3.635 30.8 4.37 35.7 5 40.6 5.1 45.5 5.025 21.1 2.915 26 3.65 30.9 4.385 35.8 5 40.7 5.1 45.6 5.01 21.2 2.93 26.1 3.665 31 4.4 35.9 5 40.8 5.1 45.7 4.995 21.3 2.945 26.2 3.68 31.1 4.415 36 5.02 40.9 5.1 45.8 4.98 21.4 2.96 26.3 3.695 31.2 4.43 36.1 5.02 41 5.1 45.9 4.965 21.5 2.975 26.4 3.71 31.3 4.445 36.2 5.02 41.1 5.1 46 4.95 21.6 2.99 26.5 3.725 31.4 4.46 36.3 5.02 41.2 5.1 46.1 4.935 21.7 3.005 26.6 3.74 31.5 4.475 36.4 5.02 41.3 5.1 46.2 4.92 21.8 3.02 26.7 3.755 31.6 4.49 36.5 5.02 41.4 5.1 46.3 4.905 21.9 3.035 26.8 3.77 31.7 4.505 36.6 5.02 41.5 5.1 46.4 4.89 22 3.05 26.9 3.785 31.8 4.52 36.7 5.02 41.6 5.1 46.5 4.875 22.1 3.065 27 3.8 31.9 4.535 36.8 5.02 41.7 5.1 46.6 4.86 22.2 3.08 27.1 3.815 32 4.55 36.9 5.02 41.8 5.1 46.7 4.845 22.3 3.095 27.2 3.83 32.1 4.565 37 5.04 41.9 5.1 46.8 4.83 22.4 3.11 27.3 3.845 32.2 4.58 37.1 5.04 42 5.1 46.9 4.815 22.5 3.125 27.4 3.86 32.3 4.595 37.2 5.04 42.1 5.1 47 4.8 22.6 3.14 27.5 3.875 32.4 4.61 37.3 5.04 42.2 5.1 47.1 4.785 22.7 3.155 27.6 3.89 32.5 4.625 37.4 5.04 42.3 5.1 47.2 4.77 22.8 3.17 27.7 3.905 32.6 4.64 37.5 5.04 42.4 5.1 47.3 4.755 22.9 3.185 27.8 3.92 32.7 4.655 37.6 5.04 42.5 5.1 47.4 4.74 23 3.2 27.9 3.935 32.8 4.67 37.7 5.04 42.6 5.1 47.5 4.725 23.1 3.215 28 3.95 32.9 4.685 37.8 5.04 42.7 5.1 47.6 4.71 23.2 3.23 28.1 3.965 33 4.7 37.9 5.04 42.8 5.1 47.7 4.695 23.3 3.245 28.2 3.98 33.1 4.715 38 5.06 42.9 5.1 47.8 4.68 23.4 3.26 28.3 3.995 332 4.73 38.1 5.06 43 5.1 47.9 4.665 23.5 3.275 28.4 4.01 33.3 4.745 38.2 5.06 43.1 5.1 48 4.65 23.6 3.29 28.5 4.025 33.4 4.76 38.3 5.06 43.2 5.1 48.1 4.635 23.7 3.305 28.6 4.04 33.5 4.775 38.4 5.06 43.3 5.1 48.2 4.62 23.8 3.32 28.7 4.055 33.6 4.79 38.5 5.06 43.4 5.1 48.3 4.605 23.9 3.335 28.8 4.07 33.7 4.805 38.6 5.06 43.5 5.1 48.4 4.59 24 3.35 28.9 4.085 33.8 4.82 38.7 5.06 43.6 5.1 48.5 4.575 + +B-1 + + + + + + + + API GRAV DIFF/BBL API GRAV DIFF/BBL API GRAV DIFF/BBL API GRAV DIFF/BBL API GRAV DIFF/BBL API GRAV DIFF/BBL + +24.1 3.365 29 4.1 33.9 4.835 38.8 5.06 43.7 5.1 48.6 4.56 24.2 3.38 29.1 4.115 34 4.85 38.9 5.06 43.8 5.1 48.7 4.545 24.3 3.395 29.2 4.13 34.1 4.865 39 5.08 43.9 5.1 48.8 4.53 24.4 3.41 29.3 4.145 34.2 4.88 39.1 5.08 44 5.1 48.9 4.515 24.5 3.425 29.4 4.16 34.3 4.895 39.2 5.08 44.1 5.1 49 4.5 24.6 3.44 29.5 4.175 34.4 4.91 39.3 5.08 44.2 5.1 49.1 4.485 24.7 3.455 29.6 4.19 34.5 4.925 39.4 5.08 44.3 5.1 49.2 4.47 24.8 3.47 29.7 4.205 34.6 4.94 39.5 5.08 44.4 5.1 49.3 4.455 + +B-2 + + + + + + + + EXHIBIT C SAMPLE QUALITY BANK CALCULATION GRAND ISLE GATHERING SYSTEM COMMON STREAM HLS CRUDE Receipt Bank + +SHIPPER BBLS REC'D API GRAV FROM EXH. A GRAV DIFF BBLS REC'D X GRAV DIFF A 100.00 29.8 4.220 422.00 B 150.00 38.6 5.060 759.00 C 100.00 36.4 5.020 502.00 C 200.00 46.2 4.920 984.00 TOTAL 550.00 2667.00 Common stream weighted average GRAVITY value: 2667.00/550.0 = 4.84909091 Shipper A: Weighted average GRAVITY value: 422.00/100 = 4.220 Calculation: (4.84909091 - 4.220) x 100 = $ 62.909 Total Shipper A pays the bank: $ 62.91 Shipper B: Weighted average GRAVITY value: 759.00/150 = 5.060 Calculation: (4.84909091 - 5.060) x 150 = ($ 31.636) Total Shipper B pays the bank: ($ 31.64) Shipper C: Weighted average GRAVITY value: 1486.00/300 = 4.953 Calculation: (4.84909091 - 4.953) x 300 = ($ 31.273) Total Shipper B pays the bank: $ (31.27) NET $ 0.00 + +C-1 \ No newline at end of file diff --git a/full_contract_txt/ENTERPRISEPRODUCTSPARTNERSLP_07_08_1998-EX-10.3-TRANSPORTATION CONTRACT.txt b/full_contract_txt/ENTERPRISEPRODUCTSPARTNERSLP_07_08_1998-EX-10.3-TRANSPORTATION CONTRACT.txt new file mode 100644 index 0000000000000000000000000000000000000000..41df9cf3fbdf3cb96961ce4bc7305864edcfd916 --- /dev/null +++ b/full_contract_txt/ENTERPRISEPRODUCTSPARTNERSLP_07_08_1998-EX-10.3-TRANSPORTATION CONTRACT.txt @@ -0,0 +1,621 @@ +EXHIBIT 10.3 + + [ENTERPRISE LOGO APPEARS HERE] + +ENTERPRISE TRANSPORTATION COMPANY a division of Enterprise Products Company P.O. BOX 4324 . PHONE 713 / 880-6500 Contract No. 017 HOUSTON, TX 77210 ______ Date: June 1, 1998 + + TRANSPORTATION CONTRACT + + THIS CONTRACT is entered into by and between ENTERPRISE TRANSPORTATION COMPANY, a division of Enterprise Products Company, ("Carrier"), + +and ENTERPRISE PRODUCTS OPERATING L.P., a Delaware limited partnership - ------------------------------------------------------------------------------ + + P.O. Box 4324 Houston, TX 77210 ("Shipper"). - ------------------------------------------------------------------------------ (Address) (City) (State) + + Shipper is engaged in business as a manufacturer, distributor or dealer of chemicals or petroleum products ("COMMODITIES"), and Shipper requires transportation of Commodities in intrastate, interstate or foreign commerce; + +Carrier is authorized to provide transportation for Shipper as a motor contract carrier under authority issued by the U.S. Department of Transporation in Docket No. MC-121496. + + NOW, THEREFORE, in consideration of the mutual promises herein contained, the parties agree as follows: + + 1. Shipper shall tender commodities to Carrier for transportation by Carrier in a specialized service designed to meet the distinct needs of Shipper in interstate or foreign commerce between points in the United States. + + 2. Shipper shall tender to Carrier and Carrier shall transport in a series of shipments not less than 10,000 pounds of Commodities per year. + + 3. As compensation for the services provided by Carrier under this contract, Shipper shall pay Carrier in accordance with 1) Rate Appendices making reference to this contract which shall from time to time be agreed to between the parties and 2) Carrier's Contract Carriage Rules and Regulations attached as Exhibit A, which are incorporated in this contract by this reference for all purposes (collectively, the "Schedule"). + + 4. This contract shall be for a term of one year commencing on the date first above written; thereafter, it shall automatically continue until terminated by either party upon not less than thirty (30) days prior written notice to the other party. + +THIS CONTRACT IS SUBJECT TO THE TERMS AND CONDITIONS ON THE REVERSE SIDE. + +ENTERPRISE PRODUCTS OPERATING L.P. ENTERPRISE TRANSPORTATION COMPANY By Enterprise Products GP, LLC, its general partner (Shipper) + +By: /s/ A.W. Bell By: /s/ Gary Miller ---------------------------- -------------------------------------- Title: Executive Vice President Title: Executive Vice President ------------------------- ---------------------------------- + + TERMS AND CONDITIONS + + 1. For each shipment under this contract, Shipper shall designate the points of origin and destination and any point or points where stopoffs shall be made for partial loading or unloading. Shipper shall exert its best efforts to load each shipment to the lawful capacity of Carrier's vehicle. Each shipment shall be evidenced by a shipping document signed by Carrier, consignor and consignee, showing the kind and quantity of Commodities received and delivered by Carrier at the loading and unloading points, respectively; provided, however, the provisions of any shipping document, bill of lading or other instrument to the contrary notwithstanding, this contract and the Schedule shall exclusively govern the relationship of the parties with respect to the subject matter of this contract. + + 2. (a) Carrier shall invoice Shipper for the services provided under this contract promptly upon performance. All sums due under any invoice shall be payable without discount upon receipt of the invoice. Amounts more than 30 days past due shall bear interest from the due date to the date of payment at the lesser of 1) the rate of interest established by Chase Manhattan Bank, New York, NY, from time to time as its prime rate, plus two (2) percent, or 2) the maximum non-usurious interest rate which may be charged Shipper pursuant to applicable Texas law, Article 5069-1.04 Texas Rev. Civ. Stat., as amended. + + (b) All sums due under this contract are payable at Carrier's offices in Houston, Harris County, Texas. + + + + + + 3. (a) Carrier shall perform services under this contract as an independent contractor and shall have exclusive control and direction of its employees and exclusive responsibility to Shipper for any of Carrier's owner-operator contractors engaged in the performance of this contract. Carrier shall pay all wages, local, state, and federal payroll taxes or contributions or taxes for unemployment insurance, worker's compensation, pensions, social security and related protection with respect to its employees. + + (b) Carrier shall, at its sole cost and expense, furnish all vehicles, fuel, oil, tires, and other parts, maintenance, supplies, drivers and equipment necessary or required for the performance of the services to be provided under this contract. Carrier shall procure and maintain all licenses and permits required by local, state, or federal law and comply with all applicable laws, regulations and governmental orders with respect to the services to be provided under this contract. + + 4. (a) Carrier shall, at its sole cost and expense, procure and maintain liability insurance with a reputable and financially responsible insurance carrier or carriers properly insuring Carrier against liability and claims for injuries to persons (including injuries resulting in death) and for damage to property in amounts not less than the Minimum Levels of Financial Responsibility for Motor Carriers prescribed by the U. S. Department of Transportation (49 CFR (S)387 et seq.). + + (b) Subject to the limits of the insurance coverages specified in paragraph 4 (a) above, Carrier shall defend, indemnify and hold Shipper harmless from and against all loss, damage, expense, actions and claims for injury to persons (including injury resulting in death) and loss of or damage to property arising out of or in connection with Carrier's negligence in the performance of this contract; provided, however, Carrier shall not be liable for loss of or damage to Commodities transported to the extent such loss or damage was not caused by Carrier's negligence and was caused by an act of God, the public enemy, the act of Shipper or the inherent vice of the Commodities. Where personal injury or death or loss of or damage to property arises out of the joint negligence of Carrier and Shipper, Carrier's duty of indemnification shall be in proportion to its allocable share of such joint negligence. In no event shall Carrier be liable for any lost profits or special, indirect or consequential damages. + + 5. If either party is rendered unable, wholly or in part, by force majeure or any other cause of any kind not reasonably foreseeable or within its control to perform or comply with any obligation or condition of this contract, then upon giving notice and reasonably full particulars to the other party such obligation or condition shall be suspended during the continuance of the inability so caused, and such party shall be relieved of liability and shall suffer no prejudice for failure to perform during such period; provided, however, obligations to make payment for amounts then accrued or due under this contract shall not be suspended, and the cause of suspension (other than strikes or differences with workers) shall be remedied insofar as possible with reasonable dispatch. Settlement of strikes and differences with workers shall be wholly within the discretion of the party having the difficulty. The term "force majeure" shall include, without limitation, acts of God and the public enemy, the elements, fire, accidents, breakdown, strikes, and any other industrial, civil or public disturbance, inability to obtain materials, supplies. permits or labor, any laws, orders, rules, regulations, act or restraints of government or governmental body or authority, civil or military. + + 6. (a) if either party should make a general assignment for the benefit of creditors or if a receiver should be appointed on account of the insolvency of either party, the other party may, without prejudice to any other right or remedy, terminate this contract upon seven (7) days prior written notice. + + (b) Termination of this contract for any reason shall not release either party from any obligation that may have accrued before such termination, nor shall it preclude either party from exercising any remedies it might have in law or equity to enforce such obligations. + + 7. No waiver by Shipper or Carrier of any default of the other under this contract shall operate as a waiver of any future default, whether of like or different character. + + 8. Any notice in writing by one party under this contract shall be given by registered or certified mail, return receipt requested, to the other party at its address shown on the first page or to such other address as such party may from time to time specify by notice given according to this provision. A U.S. Postal Service receipt showing the delivery of such notice and the date thereof shall be prima facie evidence of the giving of such notice on the date of such receipt. + + 9. (a) This contract shall be binding upon and inure to the benefit of the parties and their respective successors and assigns. + + (b) This contract shall not be assigned in whole or in part by either party without the prior written consent of the other, except that a party may assign this contract to a successor entity as a result of a merger or consolidation or to another entity which acquires substantially all of the assets of that party. + + 10. The terms and conditions of this contract and all information concerning the business, customers, products, and processes of each party which may come into the possession of the other party during the course of the negotiation or performance of this contract are confidential and shall not be disclosed to any third party without the prior written consent of the other party; provided, however, either party may disclose information concerning this contract to any independent public accounting firm retained to perform an annual financial audit of that party. This obligation of confidentiality shall expire two (2) years from the date of the last shipment under this contract. + + + + + + 11. This contract contains the entire understanding between the parties and may not be changed, waived, or modified unless in writing signed by authorized representatives of the parties; provided, however, Rate Appendices making reference to this contract may be confirmed by telecopy or similar written record of electronic transmission between the parties. + + 12. This contract shall be governed by and construed in accordance with the laws of the State of Texas, excluding any binding conflict of laws rule which might refer such construction to the laws of another state. Any lawsuit related to or arising out of this contract shall be brought only in the United States District Court for the Southern District of Texas (Houston Division) or in the District Court of Harris County, Texas, to which venue and non-exclusive jurisdiction each party expressly consents for itself and in respect of its property for all purposes. + + EXHIBIT A + + ENTERPRISE TRANSPORTATION COMPANY + + CONTRACT CARRIAGE RULES AND REGULATIONS + + [ENTERPRISE LOGO APPEARS HERE] + + TABLE OF CONTENTS + +100 Charges Generally 110 Governing Publications 115 Reference to Tariffs, Schedules 120 Definitions 125 Terminals + +200 Application of Rates - From and To Places Within or Adjacent to Incorporated Municipalities or Unincorporated Communities. 215 Distances in Excess of Those Shown in Rate Scales 217 Distances - Method of Computing 220 Backhauls and Continuous Movements 230 Mixed Shipments - Truckload 235 Fractions 240 Pickup or Delivery Service 245 Holidays 250 Prepayment 260 Return Shipments - Tendered for Vehicles Enroute 263 Reconsignment or Diversion 265 Rejected, Undelivered Shipments 270 Shipments to and from Points in Canada and Mexico 280 Weighing and Weights 285 Weight 300 Shipment Documentation and Loading and Unloading Directions 305 Loading by Consignor - Unloading by Consignee 310 Cleaning 320 Delivery Schedules 330 Detour Routes 340 Impracticable Operations 350 Special Service 360 Stopoffs 370 Tender of Shipments 375 Tank Vehicle or Other Equipment Ordered by the Shipper for Loading + +400 Claims for Cargo Loss or Damage 410 Claims for Overcharge, Duplicate Payment or Overcollection 500 Allowance for Use of Shipper's Trailer 510 Setting Out Trailers and Tractors Used for Spotting 520 Waiting at Port of Entry 525 Detention of Vehicles 530 Expedited Service 535 C.O.D. Shipments 540 Hose - Charges for Furnishing 550 Loading and/or Unloading Service 560 Overnight Layovers 570 Heating in Transit 575 Steam Heating 580 Standby Equipment - Exclusive Use 590 Vehicle Furnished But Not Used + + ENTERPRISE TRANSPORTATION COMPANY CONTRACT CARRIAGE RULES AND REGULATIONS + +ITEM 100: CHARGES GENERALLY + + + + + +All charges provided by each Item herein shall be cumulative and in addition to all other applicable rates and charges unless expressly provided otherwise. + +ITEM 110: GOVERNING PUBLICATIONS + +The following described tariffs and supplements or loose-leaf page amendments thereto or successive issues thereof are incorporated herein by this reference and shall govern these Rules and Regulations: + + TARIFF ICC TARIFF ISSUING AGENT NUMBER NUMBER + +Explosives and Dangerous American Trucking Associations, 111-C ATA 111-C Articles Tariff Inc., Agent + +Mileage Guide Household Goods Carriers' 111-C HGB 100 Bureau, Agent + +ITEM 115: REFERENCE TO TARIFFS, SCHEDULES + +Where reference is made herein to a tariff, schedule, item, note, or page, such reference also will embrace amendments and supplements thereto, or successive issues of said tariff, schedule, item, note or page. + +ITEM 120: DEFINITIONS + + When used herein and in contracts making reference hereto, the following terms shall have the meanings set forth below: + + "Consignee" shall mean the person to whose facilities a shipment is destined. + + "Consignor" shall mean the person at whose facilities a shipment originates. + + "Freight Bill" shall mean any receipt, manifest, bill of lading form or other document used to identify a shipment and evidence Carrier's receipt and delivery thereof. + + "Month" shall mean a calendar month. + + "Normal Business Hours" shall mean 8:00 a.m. to 5 p.m. local time on weekdays (Monday through Friday), holidays excluded. + + "Shipment" shall mean a lot of freight tendered for transportation from one Consignor, at one point at one time for one Consignee at one destination and covered by one freight bill. Unless otherwise provided, charges will be assessed on each unit required to transport a Shipment at the applicable minimum weight or truckload minimum weight shown for each Unit used. + + "Tractor" shall mean a truck tractor. + + "Trailer" shall mean a tank semitrailer. + + "Unit" shall mean a truck tractor-semitrailer combination motor vehicle. + + "Vehicle" shall mean a Tractor or a Trailer. + +ITEM 125: TERMINALS + +"Terminal" as used herein shall mean a point within the following cities or municipalities: + + Arcadia, LA Keller (Dallas/Ft. Worth) TX Beaumont, TX Odessa, TX Breaux Bridge, LA Petal, MS Freeport, TX Port Allen, LA Baytown (Houston) TX Texas City, TX Pierce Junction (Houston) TX + +ITEM 200: APPLICATION OF RATES - FROM AND TO PLACES WITHIN OR ADJACENT TO INCORPORATED MUNICIPALITIES OR UNINCORPORATED COMMUNITIES + +1. Incorporated Municipalities: + + Carrier's rates, rules and regulations will apply from or to points named and points and places within the corporate limits of a given municipality and additionally to and from the following points, places and areas (if within the United States), as follows: + + (a) The municipality itself, hereinafter called the base municipality; + + (b) All municipalities which are contiguous to the base municipality; + + (c) All municipalities wholly surrounded, or so surrounded except for a water boundary, by the base municipality, by any municipality contiguous thereto. + +2. Unincorporated Communities: + + (a) Carrier's rates, rules and regulations will apply from and to points + + + + + + named and additionally to and from places and areas (if within the United States), as follows: (i) All points within 3 miles of the post office in a given unincorporated community if it has a population of less than 2,500; within 4 miles if it has a population of 2,500 but less than 25,000; and within 6 miles if it has a population of 25,000 or more; and + + (ii) At all points in any municipality any part of which is within the limits described in (a) above; and + + (iii) At points in any municipality wholly surrounded, or so surrounded except for a water boundary by any municipality included under the terms of paragraph (b) above. + + (b) When a specific rate is named from or to a specific point embraced within the commercial zone of a base municipality as herein described, the provisions of this Item will not apply. + + (c) If the population of a community is reported in the latest report of the United States Bureau of the Census, the population so reported will govern in applying this Item. If the community does not have a post office of the same name, distances will be measured from the generally recognized business center. + + When it becomes necessary to compute a rate for a distance in excess of that shown in the applicable rate scale, the rate shown in connection with the greatest distance in the applicable rate scale will be added to the rate under the same scale for the distance in excess of the greatest distance shown in said scale. The sum of the two rates thus determined will constitute the through rate from origin to destination. + +ITEM 217: DISTANCES - METHOD OF COMPUTING + +1. Except as otherwise provided, the governing mileage guide, shall be used in determining distances between origins and destinations, in computing local and joint distance commodity rates herein. + +2. If Carrier is required to detour a shipment as provided in Item 330 (Detour Routes), the rate will be based on the mileage published in the governing mileage guide via the route of movement. + +3. When at the request of Shipper a route more distant than the shortest distance between origins and destinations is used, the mileage published in the governing mileage guide, via the route of movement shall be used, except as otherwise provided in this Item. + +4. For rate making purposes, distances will be computed over the shortest route obtained from the governing mileage guide. + +5. In computing distances in connection with distance rates from and to the points shown in Column A below, the distance from or to the point descried opposite in Column B shall be applied. + + COLUMN A COLUMN B COMPUTING DISTANCES FROM OR TO APPLY DISTANCE FROM OR TO - ------------------------------------ ------------------------------ West Lake and West Lake Charles, LA Lake Charles, LA North Baton Rouge, LA Baton Rouge, LA Bossier City, LA Shreveport, LA Gretna, Harvey, Marrero, Westwego, LA New Orleans, LA Plaquemine, LA Baton Rouge, LA plus 15 miles Avondale and Oak Point, LA New Orleans, LA plus 6 miles Chalmette, LA New Orleans, LA plus 9 miles Belle Chase, LA New Orleans, LA plus 10 miles Meraux, LA New Orleans, LA plus 9 miles Chaison, Lucas Station and Herbert Station, TX Beaumont, TX West Port Arthur, TX Port Arthur, TX Deer Park, Pasadena, Galena Park, Green Bayou and South Houston, TX Houston, TX Bayport, Texas Baytown, TX plus 13 miles* Bayport, Texas Houston, TX plus 24 miles Channelview, TX Houston, TX plus 15 miles Dowling, TX Beaumont, TX plus 6 miles Smith Bluff, TX Beaumont, TX plus 9 miles Texas City, TX Houston, TX plus 40 miles Strang, TX Houston, TX plus 20 miles Texas City, TX Baytown, TX plus 32 miles* + + * This distance may be used only when the net weight of the shipment does not exceed 36,000 pounds and does not contain explosives, flammable liquids, oxidizing materials, corrosive materials, compressed gas or combustible liquid with a flash point at or below 95 degrees Farenheit. + +ITEM 220: BACKHAULS AND CONTINUOUS MOVEMENTS + +1. (a) Backhaul Rates. Backhaul rates shall apply only when shipments are part of a continuous movement in conjunction with an original outbound shipment. Carrier shall notify Shipper at the time of tender if equipment is available for loading and movement in backhaul service. If equipment is not available for backhaul service, such shipments shall be governed by the rates, rules and regulations otherwise applicable. + + + + + + (b) Continuous Movement Rates. Continuous movement rates apply only when a shipment is one of two or more separate consecutive shipments tendered by Shipper and/or one or more Consignors designated by it and transported to one or more Consignees; provided, that where such shipment is a backhaul shipment under Paragraph 1(a), above, the rates shall be those applicable to backhaul shipments. + +2. Charge applicable. In the event that Carrier agrees to provide, at the request of Shipper, transportation which constitutes a backhaul or a continuous movement under these provisions, the rate or charge otherwise applicable on said shipment(s) shall not be applied, and the applicable charge shall be that provided in accordance with the backhaul or continuous movement rates set forth in Rate Appendices hereto. Shipper shall be responsible for payment of all freight charges on backhaul or continuous movement shipments. + +3. Route applicable. + + (a) Mileage shall be computed based on the aggregate number of miles traversed in connection with a backhaul or continuous movement shipment, in accordance with the mileage determination provisions herein, commencing at the terminal from which Carrier's unit was initially dispatched and ending with return thereto, computed as follows: (i) the mileage traversed between Carrier's terminal and the point of origin of the initial shipment; plus (ii) the mileage traversed between the origin and destination of any shipment and the origin of the next consecutive shipment; plus (iv) the mileage traversed between the point of destination of the last shipment and the Carrier's terminal; plus (v) all additional mileage traversed incidental to any of the mileages specified in subparagraphs (i), (ii), (iii) and (iv) hereof, for purposes of internal cleaning of trailer, weighing, stop-off for partial loading and/or unloading, detour necessitated by highway restrictions or weight limitations, or by compliance with statutes or regulations of any governmental unit or agency thereof. + + (b) When the trailer of any unit used for a backhaul or continuous movement shipment is located at the point of origin of the initial shipment, and if tractor mileage charges and/or trailer rental charges are assessed in connection therewith pursuant to applicable provisions of these Rules and Regulations, the route of backhaul or continuous movement shall commence and end at the said point of origin. + + (c) Each freight bill in a backhaul or continuous movement must be cross-referenced to the freight bill covering the initial shipment. + +4. Cleaning. + + Shipper and/or Consignee of the return load shall, at its expense, have the interior of the tank cleaned so it can handle the return shipment satisfactorily; or Shipper may request Carrier to have the interior cleaned, and a cleaning charge of $125.00 shall apply. + +ITEM 230: MIXED SHIPMENT - TRUCKLOAD + +Two or more commodities taking the same or different rates may be shipped as a truckload at one time in a compartmented trailer. On such shipments, freight charges shall be computed on basis of the actual gallonage or weight of each commodity, as the case may be, at its respective rate, but not less than the charges that would accrue on basis of the highest rate and corresponding minimum gallonage and/or weight as provided in Item 285 (Weight) or in individual Items. + +ITEM 235: FRACTIONS + +In computing freight charges or mileage, all fractions must be retained at their full value until the final result is obtained, and then all remaining fractions will be disposed of in the following manner: Fractions of less than 1/2 cent, reduce to the next lowest cent. Fractions of 1/2 cent or more, increase to the next full cent. + + ITEM 240: PICKUP OR DELIVERY SERVICE + +Carrier's rates include, as to each shipment, one pick-up and one delivery at a place directly accessible to Carrier's unit at all points within the limits of the cities, towns, villages and other points from and to which the rates apply. + + The term "pick-up" as used herein means the service performed by Carrier in calling for and accepting a shipment. + + The term "delivery" as used herein means the service performed by Carrier in transporting and placing a unit as designated by the Consignee for unloading. + +ITEM 245: HOLIDAYS + +The following shall be deemed Holidays: + +New Year's Day Independence Day Thanksgiving Day Memorial Day Labor Day Christmas Day + +ITEM 250: PREPAYMENT + +Shipper shall prepay of all charges or provide satisfactory assurance of payment before Carrier accepts shipments. + + + + + +ITEM 260: RETURN SHIPMENTS - TENDERED FOR VEHICLES ENROUTE + +Subject to all other provisions herein, shipments on vehicles enroute under previous dispatch will be accepted subject to the following conditions: + +1. The rate to apply will be 80% of the otherwise applicable distance commodity rate, other than a rate under Item 220 (Backhauls and Continuous Movements), subject to the applicable minimum. + +2. Shipments may not originate in Louisiana or Texas, and must be destined to points in the United States in or east of Minnesota, Iowa, Kansas, Oklahoma and Texas. + +3. The provisions of this Item will only apply on distance commodity scales in excess of 400 miles. + +ITEM 263: RECONSIGNMENT OR DIVERSION + +1. The terms "diversion" or "reconsignment" mean: + + (a) A change in name of Consignor or Consignee. (b) A change in destination. (c) Any other instructions given by the Consignor, Consignee, or owner affecting routing, loading or delivery and requiring an addition to or change in billing or additional movement of the vehicle or both. And additional movement of a vehicle from one point to another point or points within the same loading or unloading facilities to finish loading or unloading, as the case may be, shall not be considered a diversion or reconsignment under the provisions of this Item. + +2. Shipments moving under the provisions of this Item must be prepaid. + +3. A request for diversion or reconsignment must be made or confirmed in writing. The original shipping documents must be surrendered to Carrier or proof of ownership by other means must be provided. + +4. The rate to be applied shall be the applicable rate from original point of origin to final destination based on the miles traveled via reconsigning or diversion point or, where more than one reconsignment is involved, via each successive reconsigning point. + +5. A charge of $30.00 will be made for each diversion or reconsignment. + +6. When a diversion or reconsignment order is received by Carrier, reasonable efforts will be made to locate the shipment and effect the change desired, but Carrier will not be responsible for failure to do so unless such failure is due to the gross negligence of its employees. + +ITEM 265: REJECTED, UNDELIVERED SHIPMENTS + +If, for reasons not attributable to Carrier, a shipment is rejected wholly or in part by Consignee at destination, it shall be returned at that time in the delivering unit to the point of origin unless reconsigned to another unloading point by Shipper. + +The rate for return movement of a rejected or undelivered shipment will be one-half of the rate on the outbound movement in effect on the date of the return movement. Charges will be based on the actual amount of commodities returned, subject to the outbound minimum. + +Time consumed waiting for orders, under this Item will be considered part of the unloading time, and detention charges will be assessed as provided in Item 525 (Detention of Vehicles). + +If the return movement is rated under Item 260 (Return Shipments - Tendered for Vehicles Enroute) or Item 220 (Backhauls and Continuous Movements), the rates applicable thereunder shall apply. + +ITEM 270: SHIPMENTS TO AND FROM POINTS IN CANADA AND MEXICO + +On shipments to and from points in Canada or to and from points in Mexico, the rates in schedules making reference hereto apply only as proportional rates to and from United States ports of entry at the United States-Mexican border. + +Shipper shall advise Carrier at time service is requested of the route and the United States port of entry to be used for movement beyond the United States border. If Shipper fails to advise or chooses not to advise the port of entry and/or route to be followed beyond the border, the Carrier shall do so. Upon selection of such route and/or port of entry by Carrier, the Consignor shall be deemed to accept such route and/or port of entry as its own routing without recourse to the Carrier. + +ITEM 280: WEIGHING AND WEIGHTS + +1. When a weighing service is performed by Carrier, either at the request of the Shipper or Consignee, or when weighing is required to determine assessment of freight charges, a weighing service charge of $7.50 will be assessed for each service; provided however, no charge will be assessed when weighing is accomplished on Consignor's or Consignee's plant scales, at the point of loading or unloading, at no cost to Carrier. + +2. If it is necessary to deviate from the shortest applicable route of movement in order to weigh enroute or comply with Shipper or Consignee request to weigh enroute, the freight rate will be based on distance from origin to destination via such weigh point. + + + + + + In the event out-of-line weighing is required of Carrier, commodity rates will become applicable, and mileage rates will be used to assess freight charges. + +3. If a shipment exceeds the maximum weight which can be legally transported in the unit loaded and it is necessary to return to origin or some other point designated for partial unloading, the freight rate will be based on the total distance from origin to destination via such weigh point and/or such point of partial unloading. Time consumed in effecting partial unloading due to overweight shall be considered part of the loading time and shall be subject to the charges and provisions of Item 525 (Detention of Vehicles). + + Commodity rates will become inapplicable in the event the provisions of this paragraph are applicable, and the mileage rates will be used to assess freight charges. + +4. Time consumed in (1) weighing vehicle before and after loading or before and after individual compartments are loaded and (2) weighing vehicle before and after unloading or before and after unloading individual compartments, shall be considered a part of the loading or unloading time, as the case may be, and shall be subject to Item 525 (Detention of Vehicles); provided, however, when Carrier is requested to arrive at Shipper's facility with a tare weight prior to loading or at Consignee's facility with a gross weight after loading or tare weight after unloading, without returning to the Shipper's or Consignee's facility, such weighing time shall not be subject to provisions of Item 525 (Detention of Vehicles). + + 5. Carrier will assess freight charges based on scale weights secured at either origin or destination in accordance with Shipper's instructions appearing on the freight bill. Carrier will not assume responsibility for differences in weights secured at origin and destination in accordance with Consignor or Consignee requests. + +6. The term "service" as used in this Item shall mean one weighing empty (or partial empty) and one weighing loaded (or partially loaded). The difference in the two weights shall be the weight of the entire shipment or a portion thereof. + +ITEM 285: WEIGHT + +Carrier's rates shall apply on actual weight transported subject to applicable minimum weights. The weight loaded shall not exceed the maximum weight which may lawfully be transported in Carrier's equipment; provided, however, when the weight of a shipment is less than the minimum weight specified for the applicable rate, and the rate provides that in no event will freight charges be based on less than the minimum weight specified, such minimum weight will apply for the purpose of computing freight charges. + +When a minimum load is based on 90% of the gallonage capacity of the vehicle, freight charges will be based on 90% of the gallonage capacity of the vehicle utilized. + +ITEM 300: SHIPMENT DOCUMENTATION AND LOADING AND UNLOADING DIRECTIONS + +1. Upon arrival of Carrier's unit at any Consignor's or Consignee's premises, Consignor or Consignee, as the case may be, shall be responsible for examining and validating the documentation connected with the shipment. In addition, Consignor or Consignee shall be responsible for directing the unit to the proper loading or unloading facilities and for connecting and disconnecting Carrier's hose to the loading or unloading facilities; Carrier shall only connect and disconnect Carrier's hose to Carrier's equipment. + +2. Each vehicle offered to the Consignor for loading of the commodity to be transported is subject to inspection by Consignor; the acceptance of such vehicles for loading by Consignor shall constitute notice to Carrier that said vehicle meets Consignor's requirements with respect to specifications, cleanliness, pumping equipment, hoses and connections. + +3. Consignor shall provide all placards required for each shipment in conformity with regulations of the U.S. Department of Transportation. + +ITEM 305: LOADING BY CONSIGNOR - UNLOADING BY CONSIGNEE + +Except as otherwise provided, Carrier's rates and charges do not include the service of the Carrier in loading or unloading. + +Carrier's driver will assist Consignor or Consignee in loading or unloading operations where the assistance is requested. This service will be rendered, however, only under the direction of Shipper, and Carrier will assume no responsibility for errors or omissions made in the course of such operations unless complete written instructions are supplied to Carrier's dispatchers before the shipment is dispatched and then only if such errors or omissions are due to the negligence of Carrier's employees; provided, however, that under no circumstances shall Carrier's employees connect or disconnect Carrier's hose to the loading or unloading facilities. + +ITEM 310: CLEANING + +Except as otherwise provided, Carrier shall be responsible for cleaning the trailer and disposal of all commodity heels and wash water following each shipment using Carrier's trailers, and no charges to Consignor or Consignee shall apply because of such cleaning or disposal. Shipper shall be responsible for cleaning any trailers owned or furnished by Shipper and used by Carrier. + + + + + +ITEM 320: DELIVERY SCHEDULES + +Carrier shall handle shipments tendered to it with reasonable dispatch and effect delivery of such shipments during Normal Business Hours, unless Carrier has been advised prior to the shipment being dispatched that the Consignee has extended its hours of business and/or days of operation. Under no circumstances shall Carrier be obligated to effect delivery of any shipment at a specified time or on a specified day. In consideration of the convenience of the Consignee, Carrier will accept orders calling for preferred delivery periods of either morning (a.m.) or afternoon (p.m.) and will make reasonable efforts to comply with such requests, subject to the understanding that failure to arrive during such preferred delivery period will not relieve the Consignee of the responsibility to accept delivery of the shipment tendered during its Normal Business Hours. + +ITEM 330: DETOUR ROUTES + +If due to floods, washouts, snow, ice, road construction or other conditions beyond the control of Carrier, any portion of the shortline route, from origin to destination, as determined from the governing mileage guide, cannot in Carrier's sole judgement safely be traversed by Carrier's vehicle, Carrier will detour the shipment over the most practical available route, and a notation will be placed on all shipping papers and freight bills indicating the route of movement. The applicable distance commodity rates will apply to the actual route of movement. + +ITEM 340: IMPRACTICABLE OPERATIONS + +1. Nothing herein shall be construed as requiring Carrier to transport commodities or furnish service for which, in Carrier's sole judgment, it does not have sufficient operational experience or suitable equipment nor to accept shipments when equipment is not available. + +2. Nothing herein shall require Carrier to pick up, transport or deliver shipments when, through no fault or neglect of Carrier, it is impractical or unsafe to do so. + +ITEM 350: SPECIAL SERVICE + +1. During the time the normal operations of Shipper's plant are interrupted by labor disturbances accompanied by violence or imminent threat thereof, Carrier may dispatch vehicles or units to pick up shipments. If Carrier is not permitted to enter the plant because of picketing or any other condition due to labor disputes accompanied by violence or imminent threat thereof, the order shall be considered to have been cancelled, and the provisions of Item 590 (Vehicle Furnished But Not Used) shall apply. 2. If Carrier is not permitted to enter the premises of a Consignee at the point of destination for delivery of a shipment due to labor disputes accompanied by violence or imminent threat thereof, the shipment shall be considered to have been refused or rejected, and the provisions of Item 265 (Returned, Undelivered Shipments - Rejected) shall apply. + +3. Upon request of Shipper, Carrier may furnish additional personnel, if available, to assist in the loading or unloading at a location which is involved in a labor dispute accompanied by violence or imminent threat thereof. The charge for furnishing personnel hereunder shall be $20.00 per person per hour, subject to a minimum charge of $80.00 per person. Time shall be computed from the time a person leaves the point of dispatch until his return. In addition, Shipper shall reimburse Carrier for all travel, lodging and other expenses incurred for such personnel during the time this charge applies. + +ITEM 360: STOPOFFS + +1. Except as otherwise provided, shipments moving at Carrier's distance commodity rates may be stopped in transit at not more than two points enroute between original point of origin and final point of destination to complete loading or to partially unload or both. Charges on such shipments must be prepaid. + +2. Shipments stopped in transit to partially unload may be delivered to two or more Consignees at two or more destinations or to two or more Consignees within the corporate limits of any one city or town. + + 3. Shipments loaded or unloaded, as the case may be, at two or more points within the corporate limits of the same city or town shall be considered as being stopped in transit for partial loading or unloading under the provisions of this Item. + +4. If Shipper wishes a shipment to be partially loaded at more than one place of loading and/or partially, discharged at more than one place of unloading, and if such places of loading are all included within the corporate limits of a single municipality, or if such places of unloading are all included within the corporate limits of a single municipality, a charge of $75.00 per stop will be made for each pick-up and/or delivery, exclusive of the original pick-up and the final delivery. + +5. If Shipper wishes a shipment partially loaded at more than one place of loading and/or partially discharged at more than one place of unloading, and if such places of loading are not included within the corporate limits of a single municipality, or if such places of unloading are not all included within the corporate limits of a single municipality, the applicable rate shall be based on the mileage from point of origin to final destination over + + + + + + the route of actual movement as per Shipper's instructions, computed in accordance with Item 217 (Distances-Method of Computing). A charge of $60.00 will be made for each stop to unload, or to partially unload, exclusive of the initial stop at origin and the final stop at destination. + +6. On stops for partial loading and/or unloading, as described above, one hour free time will be allowed at each loading or unloading point. Time consumed waiting for orders will be considered part of loading and/or unloading time. Total free time allowable under provisions of this paragraph shall be not less than that applicable under the provisions of Item 525 (Detention of Vehicles). + +7. Shipments consigned as stop-off for partial loading and/or unloading must be prepaid by Shipper. Prepayment will include responsibility by the Shipper for line-haul freight, demurrage, storage, stop-off, pumping, and other charges as provided herein, which may accrue at the origin, destination, stop-off points, designated border crossing, or transfer point. + +8. The first stop for partial unloading may not be made until all stops for partial loading have been completed and no further loading may take place after the first unloading stop. + +ITEM 370: TENDER OF SHIPMENTS + +Shipper shall make timely tender of a Shipment by placing an order for service with Carrier at least: (a) twelve (12) hours, or (b) three (3) hours plus one (1) hour for each forty-five (45) miles between Carrier's terminal from which the unit to transport the Shipment will be dispatched and Consignor's facilities, + +whichever is greater, prior to the requested loading time. + +ITEM 375: TANK VEHICLES OR OTHER EQUIPMENT ORDERED BY THE SHIPPER FOR LOADING + +Shipper, when placing order for equipment to be loaded, should furnish the following information: + +1. Type of tank vehicles required, if known, such as MC-300 through 305, MC-330, MC-331, carbon steel, stainless steel, aluminum, stainless steel, insulated, steam coiled, compartmented, rubber lined, or heater. + + If the type of equipment needed for loading the product is not known by the Shipper, the Carrier shall be furnished a complete description of the product to be loaded, such as, flash point, freezing point, weight per gallon, pressure, if any, toxicity, corrosiveness and other information that would be helpful in determining the type of equipment needed to safely transport the product in compliance with the provisions of the Explosives and Dangerous Articles Tariff described in Item 110 (Governing Publications). + +2. Pumping equipment required. + +3. Hose required--type and length. + +4. Fittings, pipe and hose connections required--size and type. + +5. A Material Safety Data Sheet for each commodity to be shipped. + +ITEM 400: CLAIMS FOR CARGO LOSS OR DAMAGE I. FILING OF CLAIMS + +(a) Claims in writing required. A claim for loss, damage, injury, or delay to cargo shall not be paid by Carrier unless filed with Carrier in writing, as provided in subparagraph (b) below. (b) Minimum filing requirements. A claim must be filed with Carrier within thirty (30) days from the date the shipment in question was delivered, and (i) contain facts sufficient to identify the shipment (or shipments) involved (ii) assert the grounds for Carrier's liability for alleged loss, damage, injury, or delay, and (iii) request payment of a specified or determinable amount of money. (c) Documents not constituting claims. Bad order reports, appraisal reports of damage, notations of shortage or damage, or both, on freight bills, delivery receipts, or other documents, or inspection reports issued by Carrier or inspection agencies, whether the extent of loss or damage is indicated in dollars and cents or otherwise, shall, standing alone, not be sufficient to comply with the requirements of subparagraph (b) above. (d) Claims filed for uncertain amounts. Whenever a claim is presented against Carrier for an uncertain amount, Carrier shall determine the conditions of the shipment involved at the time of delivery by it, if it was delivered, and shall ascertain as nearly as possible the extent, if any, of the loss or damage for which it may be responsible. It shall not, however, pay a claim under such circumstances unless and until a formal claim in writing for a specified or determinable amount of money shall have been filed in accordance with the provisions of subparagraph (b) above. (e) Other claims. If investigation of a claim reveals that one or more other carriers have been presented with a similar claim arising out of or relating to the same shipment, Carrier shall communicate with each such other Carrier, and prior to any agreement entered into between or among them as to the proper disposition of such claim or claims, shall notify all claimants of the receipt of conflicting or overlapping claims and shall require further substantiation, on the part of each claimant of its title to the involved commodity or rights with respect to such claim. + + II. ACKNOWLEDGMENT OF CLAIMS + +(a) Carrier shall, upon receipt in writing of a claim meeting the requirements + + + + + + of subparagraph (b) of Section I of this Item, acknowledge receipt of such claim in writing to the claimant within 30 days after the date of its receipt, unless Carrier shall have paid or declined such claim in writing within said period. + + (b) Carrier shall at the time each claim is received create a separate file and assign thereto a unique claim file number and note that number on all correspondence with respect to the claim. + + III. INVESTIGATION OF CLAIMS + +(b) Prompt investigation required. Each claim filed against a Carrier in the manner prescribed herein shall be promptly and thoroughly investigated if investigation has not already been made prior to receipt of the claim. (b) Supporting documents. When deemed by Carrier to be a necessary part of an investigation, a claimant shall furnish to Carrier the original freight bill, evidence of the freight charges, if any, and either the original or a photocopy of the invoices, or an extract made therefrom, certified by the claimant to be true and correct with respect to the property and value involved in the claim, or certification of prices or value, with trade or other discounts, allowance, or deductions of any nature whatsoever and the terms thereof, or depreciation reflected thereon. Provided, however, that where the property involved in a claim has not been invoiced to the Consignee shown on the freight bill or where an invoice does not show price or value, or where the property involved has not been sold, or where the property has been transferred at bookkeeping values only, the Carrier shall, before paying a claim thereon, require the claimant to establish the manufactured cost, the quantity shipped, transported or involved and to certify the correctness thereof in writing. (c) Verification of loss. No claim for loss of an entire package or an entire shipment shall be paid by Carrier without a statement in writing from the Consignee of the shipment involved certifying that the property for which the claim is filed has not been delivered by or received from any other source. + + IV. DISPOSITION OF CLAIMS + +(a) Carrier shall pay, decline, or make a firm compromise settlement offer in writing to the claimant within 120 days after receipt of the claim by Carrier. Provided, however, that, if the claim cannot be processed and disposed of within 120 days after receipt thereof, Carrier shall at that time and at the expiration of each succeeding 60 day period while the claim remains pending, advise the claimant in writing of the status of the claim and the reason for the delay in making final disposition thereof. + + V. PROCESSING OF SALVAGE + +(a) Whenever a shipment transported by Carrier is damaged or alleged to be damaged and is, as a consequence, not delivered or is rejected or refused upon tender to the owner, Consignee or the person entitled to receive such shipment, Carrier, after giving due notice, whenever practical to do so, to the owner and parties that may have an interest therein, and unless advised to the contrary after giving such notice, shall undertake to sell or dispose of such commodities directly or by the employment of a competent salvage agent. Shipper, if requested to do so by Carrier, shall make a good faith effort to assist Carrier in the disposal or salvage of any damaged, contaminated or defective shipment. Carrier shall only dispose of the property in a manner that will fairly and equally protect the best interests of all persons having an interest therein. Carrier shall make an itemized record sufficient to identify the commodities involved so as to be able to correlate that to the shipment or transportation involved, and claim, if any, filed thereon. Carrier also shall assign to each lot of such property a successive lot number and note that lot number on its record and shipment of claim, if any claim is filed thereon. (b) Upon receipt of a claim on a shipment on which salvage has been processed in the manner herein before prescribed, Carrier shall record in its claim file thereon the assigned, the amount of money recovered, if any, from the disposition of such property and the date of transmittal of such money to the person or persons lawfully entitled to receive the same. + +ITEM 410: CLAIMS FOR OVERCHARGE, DUPLICATE PAYMENT OR OVERCOLLECTION I. DEFINITIONS + +(a) "Overcharge" means an amount charged that exceeds the applicable rates and charges for services. It also includes duplicate payments as defined in paragraph (b) of this section and overcollections as defined in paragraph (c) of this section when a dispute exists between the parties concerning such charges. (b) "Duplicate payment" means two or more payments for the same service. Where one or more payment is not in the exact amount of the applicable rates and charges, refunds shall be made on the basis of the excess amount over the applicable rates and charges. (c) "Overcollection" means the receipt by Carrier of a payment in excess of the rates and charges applicable to the service in question. (d) "Unidentified payment" means a payment which Carrier has received for the performance of services but which Carrier is unable to match with its open accounts receivable or otherwise identify as being due. (e) "Claimant" means Shipper or any consignee, filing a request with Carrier for the refund of an overcharge, duplicate payment, or overcollection. + + II. FILING AND PROCESSING CLAIMS + +(a) A claim for overcharge, duplicate payment, or overcollection shall not be paid unless it is filed in writing with Carrier within nine (9) months from + + + + + + the date the shipment in question was delivered and unless all freight bills which are pertinent to the claim have been paid in full. (b) A single claim may include more than one shipment, provided the claim on each shipment involves the same issue under the Schedule or the Agreement between Carrier and Shipper or the same circumstances. + + III. DOCUMENTATION OF CLAIMS + +(a) Claims for overcharge, duplicate payment or overcollection shall be accompanied by sufficient information to allow Carrier to conduct an investigation and pay or decline the claim within the time limitations set forth in Section VII of this Item. Claims shall include the name of the claimant, its file number, if any, and the amount of the refund sought to be recovered. (b) Claims for overcharge shall be accompanied by: (1) The original freight bill. (2) The rate, classification, or commodity description or weight claimed to have been applicable and authority therefor. (3) Evidence showing that any freight bill which is pertinent to the claim has been paid in full. (4) Other documents or data which claimant believes to substantiate its claim. (c) Claims for duplicate payment and overcollection shall be accompanied by the original freight bill(s) for which charges were paid and by freight bill payment information. (d) Carrier may accept photocopies instead of original of documents required to be submitted by this Item if the claimant agrees to indemnify and hold Carrier harmless for subsequent duplicate claims which might be filed and supported by the original documents. + + IV. INVESTIGATION OF CLAIMS + +(a) Upon receipt of a claim, whether written or otherwise, Carrier shall promptly initiate an investigation and establish a file, as required by Section V of this item. (b) If Carrier discovers an overcharge, duplicate payment, or overcollection which has not been the subject of a claim, it shall promptly initiate an investigation and comply with the provisions of Section VIII of this item. (c) If in processing the claim, Carrier requires information or documents in addition to that submitted with the claim, Carrier shall promptly notify the claimant and request the information required. + + V. CLAIM RECORDS + +At the time a claim is received, Carrier shall create a separate file and assign it a unique claim file number and note that number on all correspondence with respect to the claim, including the written acknowledgement of receipt required under Section VI of this item. + + VI. ACKNOWLEDGEMENT OF CLAIMS + +Upon receipt of a written claim, Carrier shall acknowledge its receipt in writing to the claimant within 30 days after the date of receipt unless Carrier shall have paid or declined in writing within that period. + + VII. DISPOSITION OF CLAIMS + +Carrier shall pay, decline to pay, or settle each written claim within 60 days after its receipt by that Carrier, except where the claimant and Carrier agree in writing to a specific extension based upon extenuating circumstances. If the Carrier declines to pay a claim or makes settlement in an amount different from that sought, the Carrier shall notify the claimant, in writing, of the reason(s) for its action. + + VIII. DISPOSITION OF UNIDENTIFIED PAYMENTS, OVERCHARGES, DUPLICATE PAYMENTS AND OVERCOLLECTIONS NOT SUPPORTED BY CLAIMS + +If Carrier does not have sufficient information with which properly to apply an unidentified payment, Carrier shall notify the payor of the unidentified payment within 60 days of receipt of the payment and request information which will enable it to identify the payment. If Carrier does not receive the information request within 90 days from the date of the notice, Carrier may treat the unidentified payment as a payment in fact of freight charges owing it, subject to the regular claims procedure of this Item. + +ITEM 500: ALLOWANCE FOR USE OF SHIPPER'S TRAILER + +1. When Shipper furnishes its own trailer for transportation service by Carrier, an allowance of three cents (3 cents) per running mile will be made for the miles such vehicle is operated by Carrier. Running miles shall be computed as twice the rate-making miles for each shipment. + +2. The freight bill shall show the type of vehicle furnished, and the allowance for the use thereof will be shown on the invoice covering such shipment. + +ITEM 510: SETTING OUT TRAILERS AND TRACTORS USED FOR SPOTTING + +1. When for Shipper's convenience a trailer is set out at the facilities of the Consignor or Consignee or any other site designated, a charge of $10.00 per hour or fraction thereof will apply, subject to a maximum charge of $100.00 per trailer in any consecutive twenty-four (24) hour period. Time will run from when the trailer has arrived and is available to Consignor or Consignee until Carrier is notified that the trailer is ready to be picked up. + + + + + +2. When Carrier is requested by Shipper to deadhead tractors and/or trailers between Carrier's terminal and a place designated by the Consignor or Consignee, a charge of one hundred twenty-five cents (125 cents) per mile will apply for each mile traveled. Mileage will be computed in accordance with the provisions of Item 217 (Distances-Method of Computing) from the closest terminal where suitable equipment is domiciled for the service requested, subject to a minimum charge of $100.00 per vehicle or unit. + +3. When, at the request of Consignor or Consignee, a tractor is used for spotting or similar services, at a place designated by the Consignor or Consignee, a charge of $35.00 per hour, will be assessed, subject to a minimum charge of $140.00 per tractor. + +ITEM 520: WAITING AT PORT OF ENTRY + +A charge of $15.00 for each half hour or fraction thereof per vehicle will apply for all waiting time of Carrier at a port of entry when trailer is to be taken from the port of entry to a loading or unloading point in Canada or Mexico, loaded or unloaded and returned to Carrier at the port of entry. + +The time for which charges are applied pursuant to this Item shall not be subject to Item 525 (Detention of Vehicles), or Item 560 (Overnight Layovers). + +ITEM 525: DETENTION OF VEHICLES + +1. Except as otherwise provided in this Item, two (2) hours will be allowed for loading and three (3) hours will be allowed for unloading. A charge of $12.50 per half hour or fractional part thereof shall apply for all time consumed in excess of free time allowed for loading when due to delays caused by Shipper or Consignor and beyond Carrier's control. A charge of $50.00 per hour or fractional part thereof shall apply for all time consumed in excess of free time allowed for unloading when due to delays caused by Shipper or Consignee and beyond Carrier's control. + +2. Shipments moving in MC-330 or MC-331 trailers will be allowed one and one- half (1.5) hours for loading and unloading. A charge of $12.50 per half hour or fractional part thereof shall apply for all time consumed in excess of free time allowed when due to delay caused by Consignor or Consignee and beyond Carrier's control. + +3. Loading or unloading time shall be deemed to run from the time the unit arrives on the premises of a plant until all connections have been removed, necessary shipping papers have been executed and the unit is released from further assignment at that location. The exception to this computation of time shall be when, by mutual agreement of Carrier, Consignor and Consignee, an arrival period is accepted and not met by the Carrier. In this case, this time shall begin at the earliest hour of the agreed arrival period if the Carrier is early or at the time of actual hookup and beginning of unloading if the Carrier arrives later than the agreed arrival period. + +4. (a) Shipments requiring stops for partial loading will be allowed one and one-half (1.5) hours free time at each loading, including the initial loading. (b) Shipments requiring stops for partial unloading will be allowed one and one-half (1.5) hours free time at each unloading, including final delivery. + +5. Charges under this Item will not accrue when the provisions of Item 560 (Overnight Layovers) are applicable. + +ITEM 530: EXPEDITED SERVICE + +Shipments of less than nine hundred (900) miles shall be transported by Carrier in single-driver service; if Shipper requests expedited service on such shipments using a two (2)-driver team, a charge of $120.00 shall apply. + +ITEM 535: C.O.D. SHIPMENTS + +C.O.D. shipments must be freight prepaid and will be accepted under the following conditions: + +1. Shipping orders must be plainly endorsed "C.O.D. Shipment", with the amount to be collected clearly stated. + +2. Uncertified checks payable to Shipper will be accepted in payment of a C.O.D. shipment unless written instructions are issued to Carrier by the Shipper at the time of shipment requiring some other means of payment. + +3. The charges to Shipper for collection and forwarding of Consignee's payment for a C.O.D. shipment shall be $20.00 per shipment for C.O.D. amounts of $1,000.00 or less and an additional $2.00 per $100.00 or fraction thereof for C.O.D. amounts greater than $1,000.00. + +4. Carrier shall immediately upon collection of a C.O.D. payment and in no event later than ten days after delivery to Consignee, unless otherwise instructed by the Shipper, forwarding by mail to the Shipper all payments collected by it. + +5. Time consumed waiting for orders and collecting from Consignee under this item will be considered part of the unloading time, and detention charges will be assessed as provided in Item 525 (Detention of Vehicles). + + ITEM 540: HOSE--CHARGES FOR FURNISHING + +1. When hose of a type other than stainless steel, viton, LPG, Chem-Solv, or + + + + + + teflon hose is requested for use in loading or unloading shipments, the Carrier will furnish without charge for each such shipment, hose not to exceed 30 feet in length. When such hose in excess of 30 feet in length is requested by either Shipper or Consignee for loading or unloading a shipment, a charge for such additional hose will be made as follows: + + FEET CHARGE -------- ---------- 0 -- 15 $ 7.50 15 -- 30 20.00 30 -- 45 45.00 45 -- 60 80.00 over 60 1.50 per foot + +2. When Shipper or Consignee requests stainless steel, viton, LPG, Chem-Solv, or teflon hose to load or unload a shipment a charge for such hose furnished will be made as follows: + + FEET CHARGE -------- ---------- 0 -- 15 $ 20.00 15 -- 30 50.00 30 -- 45 90.00 45 -- 60 140.00 over 60 2.75 per foot + +3. If it is necessary to send a service truck to transport additional hose for the loading or unloading of a shipment, a service truck charge of $20.00 per hour or fractional part thereof will apply from the time the equipment leaves Carrier's terminal until it returns. This charge will be in addition to all other charges and will include service of the driver, if needed, in stringing, connecting and disconnecting at the trailer and picking up the hose. If extra hose is requested by either the Shipper or Consignee at time order is placed for Carrier's equipment to load, Carrier will make every reasonable effort to transport such extra hose on equipment ordered for loading. + +ITEM 550: LOADING AND/OR UNLOADING SERVICE + +Subject to the following provisions, and except as otherwise provided, Carrier's rates do not include the cost of loading or unloading from the transporting vehicle when the equipment used to load or unload is furnished by the Carrier. + +1. Unloading into bulk storage facilities. (a) For liquid bulk commodities, when loading or unloading service is performed by the Carrier's own equipment, a charge of five cents (5 cents) per 100 pounds when freight charges are in cents per 100 pounds or $.004 per gallon when freight charges are in cents per gallon, subject to a minimum charge of $24.00 per load, will be made for loading and/or stops to partially load and the same charges will be made for unloading and/or stops to partially unload. (b) For dry bulk commodities, when loading or unloading service is performed by the Carrier's own equipment, a charge of seven cents (7 cents) per 100 pounds, subject to a minimum charge or $35.00 per load will be made for loading and/or stops to partially load and the same charges will be made for unloading and/or stops to partially unload. + +2. Unloading into barrels or drums. (a) When, at the request of either Shipper or Consignee, Carrier unloads liquid commodities from Carrier's vehicle into containers of less than 100 gallons: Barreling charges shall be twelve cents (12 cents) per 100 pounds when freight charges are assessed on a per-100 pound basis. + + Barreling charges shall be $.009 per gallon when freight charges are assessed on a per-gallon basis. + + (b) A minimum charge of $47.00 per load shall apply. (c) Carrier will not barrel or drum by pressure any Class B poisons or corrosive liquids which require the use of MC-304, 307, 310, 311 or 312 trailers. + +3. Inlets and outlets of vehicles shall be sealed by the Shipper. + +4. Consignee or its agent shall designate the line to which the unloading hose shall be coupled, and the coupling and uncoupling shall be done by Consignee. + +5. In the loading or unloading of commodities, operation of the vehicle will be performed by Carrier. Equipment of storage facilities shall be operated by the Consignor or Consignee or its agent. + +6. When at the request of Shipper or Consignee, Carrier furnishes a Stainless Steel Pump, a charge of $50.00 shall apply. + +ITEM 560: OVERNIGHT LAYOVERS + +1. When Consignor or Consignee cannot complete loading or unloading, thereby causing Carrier's unit and drivers to remain at loading point, final destination, stop-off point, or vicinity thereof until the resumption of Consignor's or Consignee's Normal Business Hours to complete loading or unloading, the following charges shall apply: + + $160.00 for a single-driver operation or $240.00 for two-driver sleeper team operation over a weekday night. + + + + + + $650.00 for a single-driver operation and $1,050.00 for two-driver team operation over a weekend or holiday. + +2. The charges provided in this Item shall be applicable when, in compliance with Shipper's or Consignee's instructions, Carrier's vehicle arrives at loading or unloading, stop-off point and/or final destination at other than Normal Business Hours and a layover is required to commence or complete loading and/or unloading. + +3. Time consumed while a vehicle is actively engaged in loading or unloading will be considered as loading or unloading time, and detention charges therefor will be assessed as provided in Item 525 (Detention of Vehicles). + + ITEM 570: HEATING IN TRANSIT + +When equipment with a heater unit is required or is requested by Shipper or Consignee to apply heat to the commodity in transit, Carrier will furnish such heater service if the equipment is available. Charges will be assessed as follows: + + DISTANCE OF ONE-WAY HEATING SERVICE CHARGE (Loaded Miles) (Per Shipment) ------------------- ---------------------- 0 -- 500 $18.00 501 -- 1000 35.00 1001 -- 1500 53.00 1501 and over 71.00 + +ITEM 575: STEAM HEATING + +When Shipper or Consignee requires or requests steam heating to accomplish loading or unloading of commodities at temperatures requested by Shipper or Consignee, such steam heating will be furnished by the Shipper or Consignee. A charge of $12.50 for each 30 minutes or fraction thereof will apply for the time required to heat the commodity, including travel time between the loading or unloading plant and the steam heating facilities if outside the plant area. Time required for steam heating the commodity to accomplish unloading will not be considered detention of equipment for the purpose of assessing charges under Item 525 (Detention of Vehicles). + +ITEM 580: STANDBY EQUIPMENT -- EXCLUSIVE USE + +1. When, at the request of the Shipper, a trailer is assigned to its exclusive use for a period of not less than 90 days, the following charges, per vehicle, per day, shall apply for every day or portion thereof that the vehicle is not used in revenue producing service: + + TYPE OF EQUIPMENT DAILY CHARGE VEHICLE -------------------------------------- -------------------- Plain Aluminum Tank Trailer, Single or Multi - Compartment $ 60.00 Plain Stainless Steel Tank Trailer 60.00 Insulated Stainless Steel Tank Trailer 100.00 MC-330 or MC-331 Less than 250 lbs. 75.00 250 lbs. or greater 100.00 + +2. When Shipper orders exclusive use of a vehicle, it may at its own expense place thereon a removable sign or banner for the purpose of advertising. Such sign or banner is to be placed on the vehicle in such a manner that it will not obstruct or obliterate any information on the vehicle required by law. Upon termination of the exclusive use agreement, the cost of removing sign or banner shall be at the expense of the Shipper. + +3. A request for exclusive use in standby service shall be confirmed, in writing, to the Carrier, giving the date that such services shall commence. + +4. A day shall be defined as a twenty-four hour period commencing at 12:01 a.m. local time at the place the equipment is to be delivered. + +5. For the provisions of this Item to apply on Saturdays or Sundays, the party requesting this service must be notified that an estimated time of arrival falls on a Saturday or a Sunday. + +ITEM 590: VEHICLE FURNISHED BUT NOT USED + +1. When a vehicle or unit is ordered by a Shipper or Consignee after the vehicle or unit has been dispatched from Carrier's terminal, a charge of one hundred twenty-five cents (125 cents) per mile traveled, subject to a minimum charge of $125.00, will be made for the empty miles traveled in connection with the order which was cancelled. + +2. Time consumed waiting for orders under this Item will be considered part of the loading and/or unloading time, as the case may be, and detention charges will be assessed as provided in Item 525 (Detention of Vehicles), except that no free time will be allowed. + +3. If loading has commenced prior to cancellation of the order and recleaning of a vehicle is required in order to return the vehicle to the condition it was in when presented for loading, a charge of $125.00 will be assessed. + +4. When a vehicle ordered is cancelled, but such vehicle is used by the same Shipper or Consignee for the shipment of the same commodity to a different destination or is used in shipment of a different commodity to the same + + + + + + destination, the provisions of this Item shall not apply. \ No newline at end of file diff --git a/full_contract_txt/ENTERTAINMENTGAMINGASIAINC_02_15_2005-EX-10.5-DISTRIBUTOR AGREEMENT.txt b/full_contract_txt/ENTERTAINMENTGAMINGASIAINC_02_15_2005-EX-10.5-DISTRIBUTOR AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..a9419696d19fc864a1658924a2d67c64e726fd5e --- /dev/null +++ b/full_contract_txt/ENTERTAINMENTGAMINGASIAINC_02_15_2005-EX-10.5-DISTRIBUTOR AGREEMENT.txt @@ -0,0 +1,387 @@ +Exhibit 10.5 + +DISTRIBUTOR AGREEMENT + +This Agreement is entered into as of January 21, 2005 (the "Effective Date") by and among VendingData Corporation, a Nevada corporation ("Vendor"), and Technical Casino Supplies Ltd, an English company ("Distributor"). + +RECITALS + +WHEREAS, Vendor is the owner of patents, patents pending, trademarks, and other related intellectual property involving a full range of shuffling machine products for the casino industry (collectively, the "Products" and, individually, the "Product"); + +WHEREAS, Distributor is in the business of distributing products to the casino industry throughout the world and is a subsidiary of Victoria Holdings Ltd; and + +WHEREAS, Vendor desires to grant to Distributor an exclusive right to market, sell, rent, lease, service and maintain the Products subject to the terms and conditions as set forth herein. + +NOW, THEREFORE, in consideration of the several and mutual promises, agreements, covenants, understandings, undertakings, representations and warranties hereinafter set forth the receipt and sufficiency of which is hereby acknowledged, the parties to this Agreement agree that the aforementioned recitals are true and correct and by this reference incorporated herein as if fully set forth and the parties further covenant and agree as follows: + +1. TERM + +As provided for in this Section 1, the term of this Agreement shall be for a period of five (5) years, beginning on the Effective Date (the "Initial Term"); provided, however, the Initial Term shall be subject to automatic successive renewal terms of three (3) years each (the "Renewal Terms" and together with the Initial Term, the "Term"). + +1.1. Termination. This Agreement may be terminated subject to the following clauses: + + 1.1.1. By either Vendor or Distributor, upon written notice of termination of this Agreement no later than ninety (90) calendar days prior to the expiration of the relevant Term, then in effect; + + 1.1.2. By Vendor and Distributor, at any time, upon the mutual written agreement of Vendor and Distributor; + + 1.1.3. By either Vendor or Distributor, following a material or continuing breach of this Agreement (in the case of a breach which is capable of remedy) by the other party and the breaching party's failure to cure such breach within ninety (90) days of receiving written notice of such breach, where a breach shall be considered capable of remedy if the party in breach can comply with the provision in question in all respects other than as to the time of the performance (provided that the time of performance is not of the essence); or + + + + + + 1.1.4. Subject to Section 1.6, by Vendor (or successor to Vendor), upon written notice to Distributor of a change of control of Vendor and the election by Vendor (or successor to Vendor) to terminate this Agreement, where a "change of control" shall mean a change in ownership of the Vendor such that an unaffiliated third party acquires a majority of the voting power of Vendor; + + 1.1.5. Subject to Section 1.6, with respect to any shuffler line, by Vendor, upon written notice to Distributor of the transfer of ownership of the relevant shuffler line (i.e,, the PokerOne™ Shuffler, the Random Plus™ Shuffler, the Continuous Plus™ Shuffler and other future line of shuffler products offered by Vendor) to an unaffiliated third party and the election by the unaffiliated third party to terminate this Agreement with respect to the relevant shuffler line. + +1.2. No Responsibility. Upon termination of this Agreement in accordance with the terms of this Section 1, the terminating party shall not be responsible for any costs or damages incurred by the other party resulting from the termination, subject to Section 1.6 of this Agreement. + +1.3. Distributor Credit. Except when this Agreement is terminated due to the uncured breach of Distributor, Distributor shall have within one (1) month of termination of this Agreement the right to return the Products purchased by Distributor to Vendor provided that the Products are unopened upon receipt by Vendor. Distributor will receive a credit for the full price paid by Distributor for the Products. Under such circumstances, Vendor shall have the right to market and sell such returns to other customers that may be interested in acquiring the goods referred to herein. + +1.4. Delivery upon Termination. In the event of termination for whatever reason, Vendor and Distributor agree to complete the delivery of each order of the Product received by Distributor and each unfulfilled order for the Product prior to the termination date. + +1.5. Effect. In the event of the termination of this Agreement for any reason whatsoever, the exclusive distribution right and license granted to Distributor pursuant to this Agreement shall automatically revert to Vendor as Vendor's sole property. + +1.6. Monthly Compensation. In the event that this Agreement is terminated pursuant to either Section 1.1.4 or 1.1.5 of this Agreement, this shall not of itself be deemed a breach hereof but Distributor shall have the right to receive monthly compensation from Vendor, or successor to the Vendor, representing the amount of profit to Distributor lost as a result of the termination (the "Monthly Compensation"). + + 1.6.1. Calculation. The amount of the Monthly Compensation shall be determined by taking average gross profit related to the relevant Products for each of the monthly periods completed since the beginning of this Agreement, where "gross profit" shall mean the difference between the revenue generated by Distributor during the relevant period less any commissions paid by Distributor to third parties and less the Price paid by Distributor to Vendor for the relevant Products (exclusive of any taxes, charges, fees or impositions related to sales or delivery). + + 1.6.2. Payment. The Monthly Compensation shall be paid for the remaining monthly periods remaining in the Term, as if the termination of this Agreement had not occurred, or twenty four (24) calendar months, which ever period is less, where payment shall be made no later than thirty (30) calendar days after the end of the relevant monthly period. + +-2- + + + + + + 1.6.3. Reservation of Rights. For the avoidance of doubt, Distributor's right to compensation shall be without prejudice to its rights in respect of any breach by Vendor of this Agreement. + +2. GRANT OF DISTRIBUTION RIGHTS; LICENSE + +In consideration for the purchase of the Products by Distributor from Vendor, Vendor grants Distributor the exclusive right to market, sell, rent, lease, service and maintain the Products and all improvements thereon within the Territory (as defined herein) according to the terms and conditions as set forth herein. As part of the exclusive distribution right granted in this Section 2, Vendor hereby grants Distributor the non- exclusive, non-transferable right to use and display Vendor's trademarks, logos, Product photographs and images, Product advertising and promotional copy, including but not limited to the materials contained in Vendor's website, in connection with the promotion, advertising and distribution of the Products. + +2.1. Definition of "Territory." For the purposes of this Agreement, the "Territory" shall mean all countries and territories throughout the world with the exception of the United States of America, the Caribbean and cruise ships based from ports within the United States of America or the Caribbean. + +2.2. Limitations. Notwithstanding any other provision of this Agreement, the Distributor specifically agrees that any and all marks, logos, images and copy related to the Products are solely the property of Vendor. Distributor agrees not to use in any manner whatsoever the marks, logos, images and copy of Vendor following the expiration or termination of this Agreement, except as may be needed to sell any Products remaining in Distributor's inventory. + +2.3. Design and Specification. In its sole discretion and without any liability to Distributor, Vendor shall have final decision-making power with respect to, from time to time, alter the design or construction of any Products, add new and additional Products and discontinue any Products; provided, however, in the event of any such action on Vendor's part, Vendor shall give reasonable notice to Distributor. + +2.4. Prosecution of the Patent Applications. Vendor shall retain full and complete control over the prosecution of any patent applications and any related disclaimer proceedings. + +2.5. Ownership of Future Inventions and Improvements. Any and all future inventions and improvements related to the Products licensed pursuant to this Agreement shall be the property of Vendor. + +2.6. Commission to Vendor For Sales Lead to Distributor. Subject to the mutual agreement of Vendor and Distributor, in the event that Vendor provides a new sales lead to Distributor that results in the sale of the Products, Distributor shall pay to Vendor a commission equal to twenty-five percent (25%) of the gross profit for the Products, where gross profit shall mean the difference between the price paid by the customer (where Distributor will determine the customer price for the Products on a case by case basis) and the price paid by Distributor for the Products. Sales leads for rental contracts provided by Vendor to Distributor will be dealt with on a case by case basis by mutual agreement between Vendor and Distributor. Any repeat orders will be dealt with on a case by case basis by mutual agreement between Vendor and Distributor. + +-3- + + + + + + 2.6.1. Payment. Distributor hereby agrees to provide to Vendor payment of the commission no later than thirty (30) calendar days after the receipt of full payment from the customer. + +3. OBLIGATIONS OF DISTRIBUTOR + +In exchange for the exclusive distribution right and license provided in Section 2 of this Agreement, Distributor hereby agrees during the Term to use its best commercial efforts to promote, advertise and distribute the Products throughout the Territory, including, without limitation, the following: + +3.1. Distributor will purchase the Products from Vendor in accordance with the parameters set forth in Sections 5 and 6 of this Agreement; + +3.2. Distributor will be responsible for all marketing, selling and servicing efforts for the Products within the Territory; + +3.3. Distributor shall, in the event of any actual or alleged infringement of the Products comes to the attention of Distributor, promptly notify Vendor, in writing, of the actual or alleged infringement; + +3.4. Distributor shall not obtain, purchase, receive or source any other card shuffling machine from any third party or other source under any circumstance other than from Vendor with the exception of all Shuffle Master, Inc. shuffling machines which are held in stock at the Effective Date which Distributor is free to sell, rent purchase or lease until all of the said stock has been depleted. + +3.5. Distributor shall not sell or otherwise transfer any of the rights granted pursuant to this Agreement to any third party without the prior written consent of Vendor; provided, however, Distributor may enter into distribution arrangements with regional distributors within the Territory in its efforts to promote, advertise and distribute the Products in accordance with this Agreement; + +3.6. Distributor shall provide written updates to Vendor at the end of each calendar quarter of any distribution arrangements entered into by Distributor as permitted by Section 3.5 of this Agreement, where said notice shall contain the name and location of the regional distributor, and a brief statement on the experience and history of the regional distributor; + +3.7. Distributor shall not make any modifications to the Products without prior written consent of Vendor; + +3.8. Distributor shall provide to Vendor: (1) monthly sales figures no later than fifteen (15) calendar days after the end of the relevant monthly period that provides information with respect to sales for each Product; and (2) a non binding three (3) month forecast on a quarterly basis; + +3.9. Distributor shall demonstrate the Products at the following international gaming exhibitions, ICE (London), G2E (Las Vegas), SAGSE (Buenos Aires), EELEX (Moscow) and AGE (Sydney), or any successors or equivalents to the aforementioned exhibitions. Distributor may also demonstrate the products at other gaming exhibitions where Distributor decides to exhibit, subject to there being a good business case to do so; and + +3.10. Distributor shall be responsible for the retention, use and actions of any third parties used to distribute the Products, including any claims, liabilities or other damages associated with such third parties. + +-4- + + + + + +4. OBLIGATIONS OF VENDOR + +In exchange for the marketing and selling of the Products provided in Section 3, Vendor hereby agrees: + +4.1. To provide Distributor with the appropriate product brochures, and two (2) fully working and fit for purpose samples of each model of shuffling machine free of charge; + +4.2. To prominently display and advertise that Distributor is the sole and exclusive distributor of Vendor for the Products in the Territory; + +4.3. Subject to Section 2.6 of this Agreement, not to market, distribute, sell or supply the Products covered by this Agreement to any individual or entity in the Territory directly in response to a request from that person or entity without the prior written consent of Distributor; + +4.4. Subject to Section 4.5 of this Agreement, for a period of twenty-four (24) months after the Effective Date, not to develop, manufacture, market, distribute, sell or supply anywhere in the world to any individual or entity a gaming chip-sorting machine for use in a casino; and + +4.5. Notwithstanding Section 4.4 of this Agreement, use its best commercial efforts to enter into a separate agreement with Distributor for the manufacture of a gaming chip-sorting machine or the manufacture of components of a gaming chip-sorting machine for use by the casino industry, where a condition of the agreement will be that Vendor will not compete with Distributor in any way in relation to the manufacture, supply, sale and distribution of gaming chip-sorting machines. It is understood that if Vendor and Distributor fail to reach an agreement then the twenty-four (24) month restriction detailed in Section 4.4 above will remain in force.. + +The obligation detailed under Section 4.4 above will cease immediately if Distributor fails to complete its obligations under Section 5.1 below, where such failure is not a result of any default by Vendor, or if Distributor fails to provide payment for the Products within one hundred and eighty (180) days after the delivery of the same. + +5. PURCHASE; SHIPPING + +5.1. Purchase. In exchange for the exclusive distribution right and license granted to Distributor pursuant to this Agreement, during the Term, Distributor hereby agrees to purchase the Products from Vendor, where such Products are fit for purpose and ready for sale in the Territory, as determined by Distributor, as follows: + + 5.1.1. As of the Effective Date, one hundred (100) units of the PokerOne™ Shuffler at a price of Four Thousand Nine Hundred Dollars ($4,950.00 U.S.) per unit, where Vendor shall ship the units no later than the end of January 2005; + + 5.1.2. Upon the delivery of two (2) units of the Random Plus™ Shuffler to Distributor and the expiration of a review period ending thirty (30) calendar days after the receipt of delivery by Distributor,, where such review by Distributor determines that the Random Plus™ Shuffler is fit for purpose and ready for commercial sale in the Territory, one hundred (100) units of the Random Plus™ Shuffler at a price of Four Thousand Nine Hundred Fifty Dollars ($4,950.00 U.S.) per unit, where Vendor shall ship the units no later than 30 days after the review period; + +-5- + + + + + + 5.1.3. Upon the receipt of any necessary approvals or approval waivers and the expiration of a review period ending thirty (30) calendar days after the receipt of delivery by Distributor of two (2) units of the Continuous Plus™ Shuffler, where such review by Distributor determines that the Continuous Plus™ Shuffler is fit for purpose and ready for commercial sale in the Territory, one hundred (100) units of the Continuous Plus™ Shuffler at a price of Five Thousand Nine Hundred Fifty Dollars ($5,950.00 U.S.); + + 5.1.4. Within thirty (30) days of the one (1) year anniversary of the Effective Date, an additional two hundred (200) units of the Products comprising any mix of the shuffler products offered by Vendor; and + + 5.1.5. Any additional number of units of the Products as may be submitted by Distributor to Vendor pursuant to a Purchase Order (as defined herein). + +5.2. Purchase Order. Unless otherwise provided for in this Agreement, all orders for the purchase of the Products shall be made through the submission of a purchase order (a "Purchase Order"), where such Purchase Order shall set forth: (1) the relevant monthly period to which the Purchase Order relates; (2) the Products to be ordered; (3) the quantity of the Products ordered; (4) the relevant price for the Products ordered; (5) the requested shipping date and destination of the Products ordered; (6) the Purchase Order number; and (7) the name and authorized signature of Distributor. + +5.3. Shipping. Unless otherwise provided for in this Agreement, upon the acceptance of a Purchase Order by Vendor, Vendor shall, in the normal course of business, package, crate and insure the Products at its cost (including any applicable export duties and export taxes) and deliver the Products to Distributor F.O.B. Zhongshan City, China. Vendor will advise Distributor immediately of any delay but will use all reasonable means to dispatch the Products within four (4) weeks of an order being received. Vendor shall as soon as practicable inform Distributor of the delivery date for each quantity of Products shipped to Distributor or to an address nominated by Distributor. + +5.4. Partial Shipments; Pro Rata Allocation. Vendor reserves the right to supply against a Purchase Order by making partial shipments of the Products. In the event that Vendor is forced to allocate the distribution of the Products due to limited supply, Distributor shall be treated no less favorably than any other distributor and shall receive its pro rata allocation of the Products. + +5.5. Failure to Purchase. If Distributor fails to purchase or complete the purchase of the Products (or the payment thereof) in the quantities and the times specified in Section 5.1 of this Agreement, Vendor shall have the right to convert this Agreement from an exclusive grant of distribution rights to a non-exclusive grant of distribution rights by providing written notice to Distributor within fourteen (14) days of any date by which Distributor was obliged to purchase the specified quantity of Products as set in Section 5.1 of this Agreement. Upon providing notice to Distributor pursuant to this Section 5.5, Distributor shall no longer be required to purchase balance of the Products required to be purchased pursuant to Section 5.1 of this Agreement. Distributor shall not be liable for any losses or damages incurred by Vendor as a result of Distributor's failure to meet its obligations under Section 5.1 of this Agreement. + +6. PRICE; PAYMENT + +6.1. Price Changes. The prices stated in Section 5.1 of this Agreement are subject to change. For any price change to take effect ninety (90) days notice must be given in order for the price change to apply; provided, however, the proposed price change must also apply to the Products for sale by Vendor outside the Territory. In the event that there is a price change required by Vendor that does not fall within the ninety (90) day notice period, both parties agree to discuss the nature of the increase in order to reach a mutually acceptable understanding. All the aforementioned price changes will not exceed, on a percentage term basis, any increase in the US retail selling price. + +-6- + + + + + +6.2. Payment. Distributor agrees that all payments to Vendor for the Products shall be made by wire transfer in United States Dollars (U.S.$); provided, further, + + 6.2.1. For all Products to be delivered by Vendor directly to Distributor, the Price shall be paid by Distributor to Vendor within the earlier of: (1) one hundred eighty (180) calendar days from the date of delivery; or (2) thirty (30) calendar days after the sale or rental of the relevant Products by Distributor; and + + 6.2.2. For all Products to be delivered by Vendor directly to a third party purchaser of Distributor (as instructed pursuant to the relevant Purchase Order), the Price shall be paid by Distributor to Vendor within forty-five (45) days of Distributor's sale of the Products to the third party purchaser. + +6.3. Notice of Discount Structure and Promotions. Vendor and Distributor each agree to provide the other party with written notice of its intent to offer a discount structure, rebate program or other promotion with respect to the sale of the Products, including the relevant time frame applicable to such discount structure, rebate program or promotion. + +7. MARKETING MATERIALS + +7.1. Development of Marketing Materials. Vendor and Distributor hereby agree to share marketing materials that are developed by either party for the Products covered by this Agreement, including, without limitation, any information, marketing or promotional materials for the Products, where, upon request, such marketing materials shall be delivered to the other party in hard copy and digital form, if available. Upon receipt of such marketing materials, the party may, in its sole discretion, elect to reject, use or modify such marketing materials. + +7.2. Prior Approval of Product Claims. Distributor hereby agrees to obtain the prior written consent of Vendor prior to the use of any product claims with respect to the Products in its marketing materials. + +7.3. Cost Sharing. With respect to cost-intensive promotional materials, such as video productions, infomercials and website development and maintenance, Vendor and Distributor hereby agree to share equally in the cost and expenses related to the development and preparation of such promotional materials; provided, however, any and all expenditures related to the development and preparation of such promotional materials shall be approved in advance by Vendor and Distributor. + +8. PRODUCT RETURNS + +8.1. Procedure. Distributor may return Products to Vendor for credit or full reimbursement, as the case may be, only pursuant to this Section 8. + +8.2 Updated Products. Distributor may return to Vendor for credit against future purchases any Products for which a new version or upgrade has been produced and offered for sale; provided, however, the new version or upgrade must be of a material nature whereby the existing Products held by Distributor are considered obsolete. All Products must be returned undamaged, and all shipping charges + +-7- + + + + + +shall be paid by Distributor. This clause does not apply to any Products that have been in Distributor's inventory for more that one hundred and eighty (180) calendar days. + +8.3. Damaged Products. Promptly upon the receipt of a shipment of Products, Distributor shall inspect the Products for damage or shortage. Within ten (10) calendar days of receipt of the shipment, Distributor shall notify Vendor of any damage or shortage. As soon as commercially practical after receipt of notice, Vendor shall make complete any shipment in short supply. Any Products damaged in shipment shall be returned to Vendor along with documentation of the damage within thirty (30) calendar days of receipt by Distributor, and Vendor will reimburse Distributor for the costs of freight reasonably incurred by Distributor in returning the Products to Vendor. If Vendor finds any Products returned for damage to not be damaged, Distributor shall be subject to a restocking fee equal to fifteen percent (15%) original purchase price of the non-damaged Products. + +8.4. Defective Products. Distributor may, no later than one hundred and twenty (120) calendar days after a Product is sold by Distributor to a customer, return to Vendor, at Distributor's expense, any Product received by Distributor from Vendor during the 120-day period prior to such return, which Distributor or its customer believes to be defective. In the event that such Product is defective, i.e., the failure of a Product to operate in accordance with its published specifications, Vendor shall: + + 8.4.1. Reimburse Distributor for the costs of freight reasonably incurred by Distributor in returning the Product to Vendor; and + + 8.4.2. Issue Distributor a credit against future purchases in an amount equal to the purchase price paid by Distributor for the Product or, as requested by Distributor, full reimbursement for the defective Products. + +9. PRODUCT TESTING AND RESULTS + +Whereas Vendor has organized and received the results from product testing with respect to the Products, Vendor hereby agrees to make available to Distributor the results of such product testing and grants to Distributor the right to use such results in its promotional materials; provided, however, Distributor may only use such results if Distributor complies with the applicable terms of use as provided by the institution, organization or other person that organized and conducted the relevant product testing. Conversely, in the event that Distributor organizes and receives the results from product testing with respect to the Products, Distributor hereby agrees to make available to Vendor the results of such product testing and grants to Vendor the right to use such results in its promotional materials. + +10. REPRESENTATIONS AND WARRANTIES OF VENDOR + +Vendor represents and warrants to Distributor as follows: + +10.1. Existence. Vendor is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada. + +10.2. Authorization; Binding Agreement. This Agreement constitutes valid and legally binding obligations of Vendor, enforceable in accordance with its terms, except, in each case, as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, or other laws relating to or affecting the enforcement of creditors' rights generally in effect from time to time and by general principles of equity. Vendor has full corporate power and authority to enter into this Agreement. + +-8- + + + + + +10.3. Product Warranty. Vendor warrants to Distributor that the Products shall perform without manufacturing failure and are fit for purpose. Distributor, in cooperation with Vendor will remedy any defect in the Product in accordance with Section 8. + +10.4. Spare Products and Parts. Vendor will provide an initial supply of spare Products and parts as Distributor may reasonably required in accordance with Sections 8 and 10.3 to permit Distributor to offer a six-month warranty on the Products to customers and to enable Distributor to provide a warranty service to customers. The initial spare Products and parts to be provided pursuant to this Section 10.4 shall be at no additional charge to the Distributor; provided, however, any additional Products and parts unrelated to this Section 10.4 shall be purchased by Distributor. + +10.5. Litigation. Other than as disclosed in Vendor's filings made with the United States Securities and Exchange Commission, including without limitation the legal proceedings involving Shuffle Master, Inc., Vendor is not aware of any action, arbitration, suit, proceeding or investigation pending, or to the knowledge of Vendor, threatened against Vendor, that would have a material adverse effect on its ability to perform the terms of this Agreement. + +11. REPRESENTATIONS AND WARRANTIES OF DISTRIBUTOR + +Distributor represents and warrants to Vendor as follows: + +11.1. Existence. Distributor is a company duly organized, validly existing and in good standing under the laws of England. + +11.2. Authorization; Binding Agreement. This Agreement constitutes valid and legally binding obligations of Distributor, enforceable in accordance with its terms, except, in each case, as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, or other laws relating to or affecting the enforcement of creditors' rights generally in effect from time to time and by general principles of equity. Distributor has full corporate power and authority to enter into this Agreement. + +11.3. Litigation. Other than the legal proceedings involving Shuffle Master Inc, Distributor is not aware of any action, arbitration, suit, proceeding or investigation pending, or to the knowledge of Distributor, threatened against Distributor that would have a material adverse effect on its ability to perform the terms of this Agreement. + +12. LIMITATION OF WARRANTIES + +Vendor warrants that all Products are new and that, to its knowledge, all Vendor-supplied promotional materials comply in all respects with all applicable laws, rules and regulations. Although Vendor intends to provide a six-month limited warranty to the end user, Distributor shall make no warranties or representations with respect to the Products on behalf of Vendor. Distributor shall defend, indemnify and hold Vendor harmless from any and all claims, damages, costs or expenses, including attorney fees, incurred by Vendor in relation to any violation by Distributor of the foregoing sentence. + +13. INDEMNIFICATIONS + +Each party shall indemnify and hold harmless the other party, its affiliated companies, and its employees, officers, directors, attorneys, and agents and each of them, against any and all claims, liabilities, damages and costs, including reasonable attorneys' fees and settlement amounts, that the foregoing, or any of them, may incur by reason of any material breach of this Agreement. + +-9- + + + + + +Vendor shall indemnify and hold harmless Distributor, its affiliated companies, and its employees, officers, directors, attorneys, and agents and each of them, against any and all claims, liabilities, damages and costs, including reasonable attorneys' fees and settlement amounts, incurred by any claims of product liability, or any claims arising from any actual or alleged infringement of any patent, copyright, trademark or other intellectual property right by a Product supplied by Vendor pursuant to this Agreement. + +Each party's responsibilities under this Section 13 shall survive termination of this Agreement. + +14. COVENANT TO PROTECT CONFIDENTIAL INFORMATION + +14.1. Definition. "Confidential Information" means any proprietary, non-public information relating to Vendor and the Products, including, without limitation, any and all strategic or business plans, customer lists and information relating to customers, marketing plans and strategies, unique software and databases, lists of material providers of services and products, terms and provisions of existing contracts and agreements, details of negotiations with current partners and business associates, details of business opportunities or projects, information relating to financial statements, employees, manufacturing and servicing methods, equipment, programs, strategies, analyses, profit margins, or other proprietary, non- public information used by Vendor; provided, however, that Confidential Information shall not include any information that: (1) was publicly known and made generally available after disclosure by Vendor; (2) becomes publicly known and made generally available through no wrongful action or inaction of Distributor; (3) is already in the possession of Distributor at the time of disclosure, without confidentiality restrictions, as shown by Distributor's file and records immediately prior to the time of disclosure; (4) is obtained by Distributor without breach of Distributor's obligations of confidentiality; or (5) is independently developed by Distributor without use of or reference to the Confidential Information, as shown by documents and other competent evidence in Distributor's possession. + +14.2. Non-Use and Non-Disclosure. Distributor shall not, during the Term or anytime thereafter, without the express prior written consent of Vendor, use, divulge, publish or otherwise disclose to any other person any Confidential Information regarding Vendor, except as provided for in this Agreement or if required to do so pursuant to the order of a court having jurisdiction over the subject matter or a summons, subpoena or order in the nature thereof of any legislative body (including any committee thereof and any litigation or dispute resolution method against Vendor related to or arising out of this Agreement) or any governmental or administrative agency. In the event that Distributor or its directors, officers, employees, consultants or agents are requested or required by legal process to disclose any of the Confidential Information, Distributor shall give prompt notice so that Vendor may seek a protective order or other appropriate relief. In the event that such protective order is not obtained, Distributor shall disclose only that portion of the Confidential Information which its counsel advises that it is legally required to disclose. + +14.3. Maintenance of Confidentiality. Distributor agrees that it shall take all commercially reasonable measures to protect the secrecy of and avoid disclosure and unauthorized use of the Confidential Information. Without limiting the foregoing, Distributor shall take at least those measures that it takes to protect its own most highly confidential information and shall ensure that its employees who have access to Confidential Information have signed a non-use and non-disclosure agreement in content similar to the provisions hereof, prior to any disclosure of Confidential Information to such employees. Distributor shall not make any copies of the Confidential Information unless the same is previously approved in writing by Vendor. + +-10- + + + + + +14.4. Return of Materials. All documents and other tangible objects containing or representing Confidential Information which have been disclosed by Vendor to Distributor, and all copies thereof which are in the possession of Distributor, shall be and remain the property of Vendor and shall be promptly returned to Vendor upon Vendor's written request. + +14.5. Non-Solicitation by Distributor. Distributor agrees that, without the prior written consent of the Vendor, for a period beginning from the date of this Agreement and ending three (3) years after the termination of this Agreement, neither Distributor nor any of its affiliates or representatives will: (1) employ or solicit to employ any of the employees of Vendor; or (2) encourage of the employees of the Vendor or its subsidiaries to leave the employment of Vendor; provided, however, this Section shall not apply to any such employee who has been terminated by or left the employment of Vendor prior to the Effective Date or, if employed by Vendor as of the Effective Date, any employee who has not been employed by Vendor for at least one (1) year after the end of such employment. + +14.6. Non-Solicitation by Vendor. Vendor agrees that, without the prior written consent of the Distributor, for a period beginning from the date of this Agreement and ending three (3) years after the termination of this Agreement, neither Vendor nor any of its affiliates or representatives will: (1) employ or solicit to employ any of the employees of Distributor; or (2) encourage of the employees of the Distributor or its subsidiaries to leave the employment of Distributor; provided, however, this Section shall not apply to any such employee who has been terminated by or left the employment of Distributor prior to the Effective Date or, if employed by Distributor as of the Effective Date, any employee who has not been employed by Distributor for at least one (1) year after the end of such employment. + +14.7. Remedies. Each party agrees that any violation of this Section 14 may cause irreparable injury to the other party, entitling the other party to seek injunctive relief in addition to all legal remedies. Nothing herein contained is intended to waive or diminish any rights the other party may have at law or in equity at any time to protect and defend its legitimate property interests (including its business relationship with third parties), the foregoing provisions being intended to be in addition to and not in derogation or limitation of any other rights the other party may have at law or equity. + +15. OUTSIDE EVENTS + +15.1. Delay or Non-Performance. No party shall be liable to the other for delay in performance, or the non-performance, of any of its obligations under this Agreement to the extent that such delay or non-performance is due to any cause beyond the party's control, provided that: + + 15.1.1. the party affected shall forthwith notify the other parties thereof; and: + + 15.1.2. if the circumstances in question prevail for a continuous period in excess of two (2) calendar months, the parties shall enter into bona fide discussions with a view to alleviating the effects thereof or to agreeing upon such alternative arrangements as may be fair and reasonable in all the circumstances. + +15.2 Vendor Supply Limitation. Vendor shall not be responsible or liable for any loss, damage, detention or delay caused by fire, strike, civil or military authority, governmental restrictions or controls, insurrection or riot, railroad, act of terrorism, marine or air embargoes, lockout, tempest, accident, breakdown of machinery, yield problems, delay in delivery of materials by other parties, or any cause which is unavoidable or beyond its reasonable control, nor, in any event, for consequential damages. + +-11- + + + + + +16. LIMITATION OF LIABILITY + +Neither party shall be liable to the other for lost profits or indirect, special consequential or punitive damages of any kind arising in connection with the manufacture, sale and distribution of the products, even if such party has been advised of the possibility of such damages. + +17. FURTHER ASSURANCES + +The parties further covenant and agree to do, execute and deliver, or cause to be done, executed and delivered, and covenant and agree to use their best efforts to cause their successors and assigns to do, execute and deliver, or cause to be done, executed and delivered, all such further acts, transfers and assurances, for implementing the intention of the parties under this Agreement, as the parties reasonably shall request. The parties agree to execute any additional instruments or agreements necessary to affect the intent of this Agreement. + +18. RELATIONSHIP OF THE PARTIES + +This Agreement shall not create any joint venture or partnership between the parties. Nothing contained in this Agreement shall confer upon either party any proprietary interest in, or subject a party to any liability for or in respect of the business, assets, profits, losses or obligations of the other. Nothing herein contained shall be read or construed so as to make the parties a partnership, nor shall anything contained herein be read or construed in any way to restrict the freedom of either party to conduct any business or activity whatsoever without any accountability to the other party. Neither party shall be considered to be an agent or representative of the other party or have any authority or power to act for or undertake any obligation on behalf of the other party except as expressly authorized by the other party in writing. Any such unauthorized representation or action shall be considered a breach of this Agreement. + +19. ENTIRE AGREEMENT + +This Agreement constitutes the entire agreement between the Parties and supersedes any prior communications, representations or agreements of any kind, whether oral or written; provided, however, notwithstanding this Agreement, that certain Distribution Agreement by and between Vendor and TCS Aces Pty Limited dated September 19, 2004 shall remain in full force and effect. + +20. COUNTERPARTS + +This Agreement may be executed in counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument. + +21. MODIFICATION + +This Agreement may not be modified or rescinded except by express written agreement signed by both of the Parties. + +22. CONFLICTS + +If any term included in an invoice, purchase order, packing slip, or bill of lading contradicts or is otherwise at odds with any provision of this Agreement, the provisions of this Agreement shall prevail. + +-12- + + + + + +23. JURISDICTION + +Disputes under this Agreement shall be resolved through arbitration in Ontario, Canada by a single arbitrator to be appointed by agreement of the parties, or in default, by the President of the Law Society/Bar of Canada. The laws of Ontario, Canada shall govern the conduct of the arbitration and any appeal from the decision of the arbitrator. + +24. WAIVER + +Neither the inspection by Distributor, nor any payment for or acceptance of all or any part of the Products specified in this Agreement, nor any extension of time, nor any possession taken by Distributor or Distributor's employees, shall operate as a waiver of any provision of this Agreement, or any power in this Agreement reserved to Distributor, or any rights or damages provided for in this Agreement, nor shall any waiver of any breach in this Agreement be held to be a waiver of any other or subsequent breach. + +25. ASSIGNMENT OR DELEGATION + +No assignment by either Party of any rights, including rights to money due or to become due under this Agreement, or delegation of any duties under this Agreement or under any purchase orders subject to this Agreement, shall be binding on the nonassigning Party unless and until a written consent has been obtained from the nonassigning Party. + +26. SEVERABILITY + +Any term or provision of this Agreement that is invalid or unenforceable in any jurisdiction shall be ineffective only to the extent of such invalidity or unenforceability and only as to such jurisdiction without rendering invalid or unenforceable the remaining terms and provisions of this Agreement or affecting the validity or enforceability of any of these terms or provisions in any other jurisdiction. + +27. GOVERNING LAW + +This Agreement shall be governed by, construed in accordance with the laws of Ontario, Canada. + +-13- + + + + + +28. NOTICES + +Any notice, request, instruction, or other document required by the terms of this Agreement, or deemed by any of the parties hereto to be desirable, to be given to any other party hereto shall be in writing and shall be given by personal delivery, overnight delivery, facsimile (with confirmation of transmission) or mailed by registered or certified mail, postage prepaid, with return receipt requested, to the addresses of the Parties as follows: + +If to Distributor: Technical Casino Supplies Ltd Unit 9, Mulberry Business Centre, Quebec May, Rotherhithe, London, SE167LE Telephone: _____-_____-_____ Facsimile: _____-_____-_____ Attn: _____________ With a copy to: _________________ _________________ _________________ Telephone: _____-_____-_____ Facsimile: _____-_____-_____ Attn: ______________, Esq. If to Vendor: VendingData Corporation 6830 Spencer Street Las Vegas, Nevada 89119 Telephone: 702.733.7195 Facsimile: 702.733.7197 Attn: Steven J. Blad, President and CEO With a copy to: Kummer Kaempfer Bonner & Renshaw 3800 Howard Hughes Parkway, Seventh Floor Las Vegas, Nevada 89109 Telephone: 702.792.7000 Facsimile: 702.796.7181 Attn: Michael J. Bonner, Esq. + +-14- + + + + + +The persons and addresses set forth above may be changed from time to time by a notice sent as aforesaid. If notice is given by personal delivery or overnight delivery in accordance with the provisions of this Section, said notice shall be conclusively deemed given at the time of such delivery provided a receipt is obtained from the recipient. If notice is given by mail in accordance with the provisions of this Section, such notice shall be conclusively deemed given upon receipt and delivery or refusal. + +The Parties acknowledge that they have read this Agreement, understand it, and agree to be bound by its terms. + + VENDOR: + + VENDINGDATA CORPORATION, a Nevada corporation + + By: /s/ Steven J. Blad + + Its: Steven J. Blad CEO + + DISTRIBUTOR: + + TECHNICAL CASINO SUPPLIES LTD, an English company + + By: /s/ David K. Heap + + Its: David K. Heap Chief Executive Officer + +-15- \ No newline at end of file diff --git a/full_contract_txt/ENTRUSTINC_07_24_1998-EX-10.5-STRATEGIC ALLIANCE AGREEMENT.txt b/full_contract_txt/ENTRUSTINC_07_24_1998-EX-10.5-STRATEGIC ALLIANCE AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..d02fd21d24d12d386ebc8cade65dc6aa5a54b8e0 --- /dev/null +++ b/full_contract_txt/ENTRUSTINC_07_24_1998-EX-10.5-STRATEGIC ALLIANCE AGREEMENT.txt @@ -0,0 +1,339 @@ +Exhibit 10.5 + + STRATEGIC ALLIANCE AGREEMENT ---------------------------- + +THIS STRATEGIC ALLIANCE AGREEMENT (this "Agreement") is made as of 31 December, --------- 1996, between NORTHERN TELECOM LIMITED, a Canadian corporation ("NTL"), and --- ENTRUST TECHNOLOGIES INC., a Maryland corporation ("ETI"). --- + +WHEREAS, pursuant to an asset transfer agreement between NTL and Entrust Technologies Limited of even date (the "NTL Transfer Agreement") and an asset ---------------------- transfer agreement between Northern Telecom Inc. and ETI of even date, the Entrust Technology (as defined herein) has been transferred to ETI and ETI's Canadian subsidiary, Entrust Technologies Limited; and + +WHEREAS, NTL desires to license from Entrust on behalf of itself and the Nortel Subsidiaries (as defined herein) ongoing rights to the Entrust Technology, ETI desires to license from NTL on behalf of itself and its Subsidiaries some intellectual property rights associated with the Entrust Technology, and NTL and ETI desire to cooperate regarding contracting, patent cross-licensing and the exchange of information, all on the terms and subject to the conditions set forth herein; + +NOW THEREFORE, NTL and ETI, intending to be legally bound agree as follows: + + ARTICLE I DEFINITIONS ----------- + +Capitalized terms used in this Agreement are used as defined in this Article I or elsewhere in this Agreement. As used herein: + +"Agreement" has the meaning specified in the preamble hereof. --------- + +"Confidential Information" has the meaning specified in Section 8.02. ------------------------ + +"Entrust" shall mean ETI and all Subsidiaries thereof. ------- + +"Entrust Entity" shall mean either ETI or the applicable Entrust Subsidiary, as -------------- the context requires. + +"ETI" has the meaning specified in the preamble hereof. --- + +"Effective Date" means the close of business on the date specified in the -------------- preamble hereof. + +"Enterprise License" has the meaning specified in Section 3.01. ------------------ + + 1 + + "Entrust Patents" shall mean all Patents: (i) which are owned or controlled at --------------- any time during the Patent License Term by Entrust or any Entrust Subsidiary; or (ii) with respect to which, and to the extent to which, Entrust or any Entrust Subsidiary shall at any time during the Patent License Term have the right to grant the licenses and rights which are granted herein by Entrust. The Entrust Patents as of the Effective Date are set forth in Exhibit A of the NTL Transfer Agreement. + +"Entrust Products" has the meaning specified in the NTL Transfer Agreement. ---------------- + +"Entrust Technology" has the meaning specified in the NTL Transfer Agreement. ------------------ + +"Field of Activity" shall mean , in respect of each Party, the products and ----------------- services forming the business, at the Effective Date, of that Party or any of its Subsidiaries, including new products and services which normally evolve from such products and services. + +"Grantee" shall mean either Entrust or Nortel, as the case may be, to which ------- licenses are granted under the Patent License. + +"Grantor" shall mean the Party granting licenses under the Patent License, as ------- well as its Subsidiaries on behalf of which such licenses are granted. + + + + + +"Licensed Products" shall mean, in respect of each Party, any products which are ----------------- within its Field of Activity. + +"Licensed Services" shall mean, in respect of each Party, any services which are ----------------- within its Field of Activity. + +"NTL" has the meaning specified in the preamble hereof. --- + +"NTL Technology" has the meaning specified in Section 2.01 hereof. -------------- + +"Nortel" shall mean NTL and all Nortel Subsidiaries. ------ + +"Nortel Entity" shall mean either NTL or the applicable Nortel Subsidiary, as ------------- the context requires. + +"Nortel Patents" shall mean all Patents other than Patents included in NTL -------------- Technology: (i) which are owned or controlled at any time during the Patent License Term by Nortel or any Nortel Subsidiary; or (ii) with respect to which, and to the extent to which, Nortel or any Nortel Subsidiary shall at any time during the Patent License Term have the right to grant the licenses and rights which are herein granted by Nortel including through cross licenses or otherwise. + +"Nortel Subsidiary" shall mean a Subsidiary of Nortel, excluding ETI and Entrust ----------------- Technologies Limited. + + 2 + + "Patent" shall mean any patent (other than a design patent or a design ------ registration) and any utility model covering any invention for which a first application was filed in or for any country prior to the termination of the Patent License Term, and shall include any such application in or for a country for which rights under the law of the country are available for compensation for unauthorized use of the invention covered by such application. + +"Party" shall mean either NTL or the ETI, as the context requires except with ----- respect to Article VIII where "Party" shall refer either to Nortel or Entrust, as the context requires. + +"Patent License" has the meaning specified in Section 6.03. -------------- + +"Patent License Term" shall mean that period of time that ETI is a Subsidiary of ------------------- NTL. + +"Reseller Agreement" has the meaning specified in Section 4.01. ------------------ + +"Source Code License" has the meaning specified in Section 5.01. ------------------- + +"Subsidiary" shall mean: (i) a corporation, company or other entity, in which a ---------- Party now or hereafter, owns or controls, directly or indirectly, fifty percent (50%) or more of the outstanding shares or securities (representing the right to vote for the election of directors or other managing authority), provided, however, that such corporation, company, or other entity shall be deemed to be a Subsidiary only so long as such ownership or control exists; or (ii) an entity which does not have outstanding shares or securities, as may be the case in a partnership, joint venture or unincorporated association, but in which a Party now or hereafter, owns or controls, directly or indirectly, fifty percent (50%) or more of the ownership interest representing the right to make the decisions for such entity, provided, however, that such entity shall be deemed to be a Subsidiary only so long as such ownership or control exists. + + ARTICLE II NTL TECHNOLOGY -------------- Section 2.01 NTL Technology. Entrust shall be entitled to the benefit of the NTL -------------- intellectual property licenses specified in Exhibit A (the "NTL Technology") for -------------- so long as NTL effectively owns or controls more than fifty percent (50%) of the voting stock or interests in ETI. + +Section 2.02. NTL Obligations. NTL has, to the best of its knowledge, complied ---------------- in all material respects with the provisions of the licenses for NTL Technology. NTL + + 3 + + + + + + + +shall make all reasonable efforts to perform in all material respects the obligations required to maintain the licenses for the NTL Technology in good standing for their respective terms. NTL shall not make any material change to the licenses for Nortel Technology without the consent of ETI, which shall not be unreasonably withheld. NTL shall make commercially reasonable efforts to acquire for the benefit of Entrust any renewal or extension of NTL a license for Nortel Technology at Entrust's request provided Entrust agrees to pay all costs associated with obtaining such benefit for Entrust. If NTL renews or extends a license for NTL Technology, NTL may, but shall not be required to obtain rights thereunder for the renewal period or extension provisions for the benefit of Entrust. + +Section 2.03. ETI Obligations. Entrust shall comply in all material respects ---------------- with the obligations required of it under the licenses for the NTL Technology for so long as Entrust benefits from those licenses. ETI shall pay to NTL the portion of all fees and charges paid by Nortel to obtain continuing rights to the NTL Technology that are reasonably attributable to Entrust's actual use of the NTL Technology. + + ARTICLE III NORTEL USE OF ENTRUST PRODUCTS ------------------------------ + +Section 3.01 Right to Use. ETI, on behalf of Entrust, grants to NTL and its ------------ Affiliates (as defined in the Enterprise License) a non-exclusive, fully paid- up, worldwide, perpetual license to use an unlimited number of copies of the Entrust Products subject to the terms and conditions of an agreement to be concluded between NTL and ETI promptly after the Effective Date in substantially the form of the license set forth in Exhibit B (the "Enterprise License") save ------------------ as amended to comply with the provisions of this Article III. NTL represents as of the Effective Date that the terms of the Enterprise License are materially similar to the terms of an existing agreement with a third-party licensee of the Entrust Products, except for the terms relating to price and the provisions of Section 3.02 hereof + +Section 3.02 Support. NTL may contract for support services under the ------- Enterprise License. Payments to Entrust for the support services identified in the Enterprise License as of the Effective Date shall be three hundred thousand U.S. dollars (U.S. $300,000.00) for the calendar year 1997 and shall not increase by more than inflation as measured by the Canadian CPI for any one-year renewal period. + +Section 3.03 Indemnification. Notwithstanding any provision of the Enterprise ----------------- License: + +(a) ETI shall not be required to honour any product warranty or intellectual property indemnity set forth in the Enterprise License, to the extent that such breach of warranty or indemnity relates to a defect in any of the Entrust Products as of the Effective Date or the infringement or misappropriation of any third party rights as incorporated into the Entrust Products as of the Effective Date. + + 4 + + (b) ETI's liability to Nortel arising from or relating to the intellectual property indemnity set forth in the Enterprise License shall not exceed 50% (fifty percent) of the monies paid by Nortel thereunder to a maximum of U.S.$1,000,000 (one million U.S. dollars). + + ARTICLE IV NORTEL RESALE OF ENTRUST PRODUCTS --------------------------------- + +Section 4.01 Reseller Rights. At NTL's option and upon NTL's request, Entrust --------------- shall promptly enter into a non-exclusive reseller agreement with NTL, on behalf of Nortel, in substantially the form set forth in Exhibit C (the "Reseller -------- Agreement") save as amended to comply with the provisions of this Article IV. - --------- NTL represents as of the Effective Date that the terms of the Reseller Agreement are materially similar to the terms of an agreement recently concluded with a third-party reseller of the Entrust Products, except for the provisions of Section 4.02 hereof. Subject to early termination for material default, such Reseller Agreement shall expire either in three years or when ETI ceases to be a Subsidiary of NTL, whichever event occurs later. + +Section 4.02 Most Favoured Treatment. During the life of the Reseller Agreement, ----------------------- it is the intention of ETI that the terms of the Reseller Agreement shall be no less favourable to Nortel than the terms in effect with any of Entrust's resellers of Entrust Products at the time the Reseller Agreement is executed. + +Section 4.03 Indemnification. Notwithstanding any provision of the Reseller ---------------- Agreement, ETI shall not be required to honour intellectual property indemnity set forth in the Reseller Agreement, to the extent that such breach of representation, warranty, condition or indemnity relates to a defect in any of the Entrust Products as of the Effective Date or the infringement or misappropriation of any third party rights incorporated into the Entrust + + + + + +Products as of the Effective Date. + + ARTICLE V NORTEL RIGHTS FOR ENTRUST PRODUCT SOURCE CODE --------------------------------------------- + +Section 5.01 Source Code Access. At NTL's option and upon NTL's request, Entrust ------------------ shall promptly enter into a non-exclusive Entrust Products source code license with NTL, on behalf of Nortel, in substantially the form set forth in Exhibit D (the "Source Code License"). NTL represents as of the Effective Date that the ------------------- terms of the Source Code License are materially similar to the terms of an agreement recently concluded with a third-party licensee of the source code for the Entrust Products, except that NTL is not required to pay any lump sum royalty and for the provisions of Section 5.02 hereof. + + 5 + + Section 5.02 Most Favoured Treatment. For so long as ETI remains a Subsidiary ----------------------- of NTL, it is the intention of ETI that the terms of the Source Code License be no less favourable to Nortel than the terms then in effect with any of Entrust's source code licensees that receives substantially similar rights taking into account the relative size of the licensee and Entrust's potential benefits. + +Section 5.03 Indemnification. Notwithstanding any provision of the Source Code ----------------- License, ETI shall not be required to honour any product warranty or intellectual property indemnity set forth in the Source Code License, to the extent that such breach of warranty or indemnity relates to a defect in any of the Entrust Products as of the Effective Date or the infringement or misappropriation of any third party rights incorporated into the Entrust Products as of the Effective Date. + + ARTICLE VI PATENT CROSS LICENSING ---------------------- + +Section 6.01. ETI Benefit from Cross Licenses. Subject to the terms and -------------------------------- conditions of this Agreement, NTL, to the extent of its legal right to do so, hereby grants to Entrust under the Nortel Patents, a non-transferable, non- assignable, indivisible, non-exclusive, royalty-free, worldwide license for Licensed Products and Licensed Services. + +Section 6.02. Nortel Benefit from Cross Licenses. Subject to the terms and ----------------------------------- conditions of this Agreement, Entrust, to the extent of its legal right to do so, hereby grants to Nortel, under the Entrust Patents, an irrevocable, non- transferable, non-assignable, indivisible, non-exclusive, royalty-free, worldwide license for Licensed Products and Licensed Services. + +Section 6.03. Extent of Cross Licenses. The licenses granted pursuant to ------------------------- Sections 6.01 and 6.02 (each such license being a "Patent License") include the -------------- following rights: + +(a) to make, use, lease, sell or otherwise dispose of, maintain and repair, Licensed Products, to license the use of Licensed Products made by or for Grantee, to practice any process involved in the manufacture or use of Licensed Products, and to provide Licensed Services; + +(b) to have made Licensed Products by another manufacturer for the use, lease, sale, disposal or transfer by Grantee, but only when both of the following conditions are met: + + (i) the designs, specifications and working drawings for the manufacture of such Licensed Products are furnished by Grantee; and + + (ii) such designs, specifications and working drawings are in sufficient detail that no additional design by the manufacturer is required other than adaptation to the production processes and standards normally used by the manufacturer which change the characteristics of the products only to a negligible extent; + + 6 + + (c) to make and have made, to use and have used, and to maintain machines, tools, materials and other manufacturing instrumentalities, and to use and have used methods and processes, insofar as such machines, tools, materials, other manufacturing instrumentalities, methods and processes are involved in or incidental to the development, manufacture, installation, testing, maintenance or repair of Licensed Products, or to the training of personnel in the use of such Licensed Products; provided, however, that the rights granted in this Section 6.03(c) shall not serve to enlarge the scope of the rights granted in Section 6.03(b); + +Section 6.04. Limitations to Patent Licenses. Nothing contained in a Patent -------------------------------- License shall be construed as: + + (a) requiring the filing of any application for a Patent or utility model, + + + + + +or the prosecution, maintenance or defense of any such application; + + (b) the maintenance or defense of any Patent; + + (c) a warranty or representation by Grantor, or admission by Grantee, as to the validity or scope of any Patent; + + (d) a warranty or representation that any manufacture, sale, lease, use, or importation of a Licensed Product, or the provision of any Licensed Service, by Grantee shall be free from infringement of any intellectual property right of Grantor other than those Patents under which and to the extent to which licenses are in force under the Patent License; + + (e) an agreement to bring or prosecute actions or suits against third parties for infringement; + + (f) an obligation to provide any manufacturing or technical information or any support or technical assistance; + + (g) conferring any right to use, in advertising, publicity or otherwise, any name, trade name or trademark, or any contraction, abbreviation or simulation thereof, except as expressly provided herein; + + (h) conferring by implication, estoppel or otherwise upon Grantee any license or other right under any Patent or other intellectual property right, except the licenses and rights expressly granted herein; or + + 7 + + (i) an obligation upon grantor to make any determination as to the applicability of any Patent to any product, Licensed Product or Licensed Service of Grantee. + +Section 6.06 NTL Right to Cross-License. The licenses granted hereunder do not --------------------------- include for the Grantee the right to grant sublicenses to any third party except as expressly provide in Section 6.03. Notwithstanding the foregoing, NTL shall be entitled to sublicense the Entrust Patents to meet its obligations under its existing Patent cross license agreements. For so long as ETI is an NTL Subsidiary, NTL shall also be entitled, as part of its continuing Patent cross licensing program, to sublicense Entrust Patents under new Patent cross license agreements provided that the rights granted in the Entrust Patents pursuant to any such new Patent cross license agreements do not materially exceed those rights customarily granted under NTL's existing Patent cross license agreements (as of the Effective Date) and ETI obtains the benefit of all Nortel Patents involved. + +Section 6.07. Excluded Patents. ----------------- + +(a) Assigned Patents. It is recognized that Grantor may have entered into or ----------------- may hereafter enter into a contract with, or a subcontract directly for the benefit of, a third party to undertake development work partially or completely financed by such third party and that Grantor may be required under such contract or subcontract (either unconditionally or by reason of any action or inaction thereunder) to assign to such third party its rights to grant, or may now or hereafter be restrained by such third party from granting, licenses to Grantee under Patents arising out of such work or covered by such contract or subcontract. The resulting inability of Grantor to grant the licenses purported to be granted by it under such Patents shall not be considered to be a breach of the Patent License. In such case, upon request by the Grantee, Grantor shall make reasonable efforts to secure rights and licenses for the Grantee from the third-party equivalent to those provided in the Patent License. + +(b) Patents Subject to Exclusive Licenses. ETI acknowledges that NTL may have -------------------------------------- entered into exclusive license arrangements with other corporations or legal entities. The Patent License granted hereunder by NTL does not extend the scope of any such exclusive licenses (including any which NTL is negotiating as of the Effective Date). + +Section 6.08. Jointly Owned Patents. If the grant by Grantor of licenses and ---------------------- rights in accordance with the Patent License in respect of Patents made by its employees jointly with third parties is subject by contract or by operation of law to the consent of such third parties or their assignees, upon request of the Grantee, Grantor shall use reasonable efforts to either secure rights and licenses for the Grantee from such third-party equivalent to those provided in + + 8 + + the Patent License, or obtain consent from such third parties to grant rights and licenses equivalent to those provided in the Patent License; however, the inability of Grantor to secure such rights or to obtain such consent in spite of the use of reasonable efforts shall not be considered to be a breach of the Patent License. Notwithstanding that such rights or such consent may be subject to the payment of a royalty or other consideration to any such third party as provided for in Section 6.09, and notwithstanding other conditions agreed with the third party, the grant of such licenses and rights shall otherwise be in accordance with the terms and conditions of the Patent License. + +Section 6.09. Royalty Obligations. Licenses and rights, the grant of which by + + + + + + -------------------- Grantor or the exercise of which by Grantee would make Grantor liable to third parties for royalties or other payments, shall be granted only upon agreement in writing of the Grantee to pay an appropriate portion of such royalties or make such other payments. + +Section 6.10. Patent Information. Each Party shall, upon written request from ------------------- the other Party sufficiently identifying any Patent by country, number and date of issuance, inform such other Party of the extent to which any such Patent is available for licensing under the Patent License. If the license or rights under any such Patent are restricted in scope, or are subject to payments according to Section 6.09, a statement of the nature of any such restrictions or payments shall, on request, be provided within a reasonable time. + +Section 6.11. Duration of Cross Licenses. --------------------------- + +(a) The Patent License shall commence on the Effective Date hereof (except as provided in Section 6.12) and shall continue for the Patent License Term unless terminated as provided in Article X or Section 6.06. Notwithstanding the expiration of the Patent License Term, the rights and licenses granted hereunder shall continue for the entire terms that the Entrust Patents or the NTL Patents, as the case may be, are in force or for that part of such terms for which the Grantor has the right to grant such rights and licenses. Notwithstanding any other provision in this Agreement, the Patent License shall terminate immediately upon ETI ceasing to be a Subsidiary of NTL. + +(b) Subject to the other sections of this Article VI, any termination of the licenses and rights granted to one Party and its Subsidiaries under the Patent License shall not affect the licenses and rights granted to the other Party and its Subsidiaries. + +(c) Notwithstanding the foregoing provisions of this Section 6.11, the Patent Licenses shall, for the patents owned or by a party, terminate as provided for in Section 6.11(a) or ten years from the Effective Date, whichever is later. + + 9 + + Section 6.12. Changes to Subsidiaries. ------------------------ + +(a) New Subsidiaries. Any rights or license granted under this Article VI to a ----------------- corporation or other legal entity which becomes a Subsidiary of a Party at a date later than the Effective Date shall become effective as of the date upon which such corporation or other legal entity becomes a Subsidiary of such Party. + +(b) Former Subsidiary. When a Subsidiary of either ETI or NTL ceases to be a ------------------ Subsidiary and holds any Patent under which a Grantee is licensed pursuant to the Patent License, such Grantee shall be entitled to exercise such rights and licenses for the full term of the Patent (or for that part of the term that the Grantor has the right to grant such rights and licenses). When a Subsidiary of ETI or NTL ceases to be a Subsidiary of such Party, any license granted to such Subsidiary in or pursuant to the Patent License shall terminate on the date that such Subsidiary ceases to be a Subsidiary. + +Section 6.12. Restraint on Claims. Each Grantor undertakes not to assert any -------------------- claim for Patent infringement with respect to use and maintenance of Licensed Products against any end user, customer or distributor of Grantee, or any subsequent vendee, lessee, or transferee to the extent the Licensed Products have been acquired from Grantee after the Effective Date and are used for the purpose for which they predominantly have been made (without modification or amendment). + +Section 6.13. Patent License Limitations. Neither Party makes any -------------------------- representations, extends any conditions or warranties of any kind or assumes any responsibility whatever with respect to the Patent Licenses other than the licenses, rights and representations expressly granted in this Article VI; in particular, unless the Parties or their Subsidiaries have expressly agreed otherwise, neither Grantor warrants that Licensed Products made, used, sold, disposed of, leased or licensed for use by Grantee, or Licensed Services provided by Grantee, do not infringe Patents or other intellectual property rights of third parties. + + ARTICLE VII COORDINATION OF CONTRACTING --------------------------- + +Section 7.01 Compliance with Nortel Policies. For so long as ETI remains a -------------------------------- Subsidiary of NTL, Entrust shall not take any action or enter into any commitment or agreement which may reasonably be anticipated based on notice from Nortel to result, with or without notice and with or without lapse of time or otherwise, in a contravention or event of default by any Nortel Entity of (i) any provisions of applicable law or regulation, (ii) any provision of NTL's certificate of incorporation or bylaws, (iii) any credit agreement or other material instrument binding upon Nortel, or (iv) any judgment, order or decree of any governmental body, agency or court having jurisdiction over Nortel or any of its assets. + + + + + + 10 + + Section 7.02. Nortel Global Agreements. For so long as ETI remains a Subsidiary ------------------------ of NTL, Entrust may purchase goods and services under agreements concluded by Nortel for the benefit of Subsidiaries of NTL. Entrust shall comply in all material respects with the obligations required of it under such agreements for so long as Entrust benefits from those agreements. + + ARTICLE VIII INFORMATION EXCHANGES --------------------- + +Section 8.01. Information. Subject to applicable law and privileges, each Party ----------- shall, to the extent legally permitted, provide the other Party with all information regarding itself and transactions under this Agreement that the other Party reasonably believes are required: (a) for the other Party to obtain the benefits provided for herein, and (b) to comply with the provisions of Section 7.01 and all applicable federal, state, county and local laws, ordinances, regulations and codes, including, but not limited to, securities laws and regulations. + +Section 8.02. Confidential Information. Entrust and Nortel shall hold in trust ------------------------ and maintain confidential all Confidential Information relating to the other Party. "Confidential Information" shall mean all information disclosed by either ------------------------ Party to the other in connection with this Agreement whether orally, visually, in writing or in any other tangible form, and includes, but is not limited to, technical, scientific, economic and business data, business plans, and the like, but shall not include (i) information which becomes generally available other than by release in violation of the provisions of this Section 8.01, (ii) information which becomes available on a non-confidential basis to a Party from a source other than the other Party, provided the Party in question reasonably believes that such source is not or was not bound to hold such information confidential, (iii) information acquired or developed independently by a Party without violating this Section 8.02 or any other confidentiality agreement with the other Party and (iv) information that any Party reasonably believes it is required to disclose by law, provided that it first notifies the other Party of such requirement and allows such Party a reasonable opportunity to seek a protective order or other appropriate remedy to prevent such disclosure. Without prejudice to the rights and remedies of either Party, a Party disclosing any Confidential Information to the other Party in accordance with the provisions of this Agreement shall be entitled to equitable relief by way of an injunction if the other Party breaches or threatens to breach any provision of this Section 8.02. + +Section 8.03. Information Exchanges. The disclosing Party makes no ---------------------- representations, does not warrant, and shall have no liability whatsoever in respect of any information disclosed by it pursuant to this Agreement. + + 11 + + ARTICLE IX OTHER COOPERATION ----------------- + +Section 9.01. Cogent. NTL acknowledges that the agreement between NTL and -------- Nortel Limited dated 17 March 1995 as set forth in Exhibit E (the "Cogent Agreement") shall be terminated by NTL, without liability to Entrust, except that Entrust shall, for reasonable consideration from Nortel, make all commercially reasonable efforts to assist Nortel to perform, in accordance with the terms of the Cogent Agreement, any agreement made or any bid submitted pursuant to the Cogent Agreement prior to the Effective Date. + +Section 9.02. PDSO. Entrust acknowledges that NTL will be holding inventory of ----- PDSO as of the Effective Date. Entrust shall, to the extent it requires further PDSO equipment endeavor to acquire such equipment from NTL, subject to the negotiation in good faith of commercially reasonable terms and condition of supply. + + ARTICLE X TERM AND TERMINATION -------------------- + +Section 10.01. Term. Except as otherwise provided in this Agreement, this ---- Agreement shall terminate on the later of (i) the third anniversary of the Effective Date or (ii) the date on which ETI ceases to be a Subsidiary of NTL. + +Section 10.02. Termination. ----------- + +(a) Termination for Cause. In the event of any material breach of this ---------------------- Agreement by either Nortel or Entrust, the non-breaching Party may terminate this Agreement by giving sixty (60) days' prior written notice to the other Party; provided, however, that this Agreement shall not terminate if the other Party has cured the breach prior to the expiration of such 60-day period, or if such breach can not be cured within such sixty 60-day period, + + + + + + the other Party has initiated actions to cure such breach within such sixty 60-day period, and thereafter cures such breach as soon as reasonably practical. + +(b) Termination for Insolvency. Either Party may terminate this Agreement in -------------------------- the event the other Party: (i) admits in writing its inability to pay its debts generally as they become due; (ii) commits an act of bankruptcy, (iii) files a notice of intention to make a proposal under the Bankruptcy and Insolvency Act, commences proceedings under the Companies' Creditors Arrangement Act, or otherwise seeks a reorganization, adjustment or composition under applicable bankruptcy laws or any other similar law or statute of any relevant jurisdiction; (iv) enters into an assignment, arrangement or composition for the benefit of its creditors; or (v) consents to the appointment of a receiver or receiver-manger of itself or of the whole or any substantial part of its property. + + 12 + + Section 10.03. Effect of Termination. --------------------- + +When this Agreement expires or terminates, the following provisions shall remain in effect: + +(a) NTL Technology. the provisions of Article II shall survive until they --------------- expires in accordance with the provisions of Section 2.01 unless this Agreement is terminated for cause pursuant to Section 10.02 arising from breach of Article II; + +(b) Enterprise License, Reseller Agreement and Source Code License. the --------------------------------------------------------------- Enterprise License, Reseller Agreement and Source Code License shall survive for the term provided therein subject to any right of early termination provided therein; + +(c) Patent Licenses. the provisions of Article VI shall survive until ---------------- expiration in accordance with the provisions of Article VI, unless this Agreement is terminated for cause pursuant to Section 10.02 arising from breach of Article VI; and + +(d) Other Provisions. the provisions of Articles VIII, XI and XII shall ----------------- survive any termination. + + ARTICLE XI LIMITS OF LIABILITY ------------------- + +Section 11.01. Enterprise License, Reseller Agreement, Source Code License. The ------------------------------------------------------------ liability of either Party arising from breach of either the Enterprise License, the Reseller Agreement or the Source Code License shall be governed exclusively by the terms of the applicable agreement or license. + +Section 11.02. No Other Obligations. Neither Party makes any representations, -------------------- extends any conditions or warranties of any kind or assumes any responsibility whatever except as expressly provided herein. + +Section 11.03. Limitation on Types of Damages. Except for breach of Article ------------------------------- VIII and for Article XII, in no event shall either Party be liable to the other Party for any indirect, incidental and/or consequential damages resulting from a breach of this agreement, including without limitation lost business, lost savings, and lost profits even if the breaching Party has been advised of the possibility of the occurrence of such damages. In no event shall either Party be liable for any special or punitive damages arising from breach of this Agreement. + +Section 11.04. Monetary Limit. For any cause of action arising under this --------------- Agreement, Nortel's liability to Entrust, and Entrust's liability to Nortel shall not exceed U.S.$5,000,000. Notwithstanding the foregoing, each of Nortel's and Entrust's liability to the other Party for breach of Article II shall not exceed U.S.$10,000,000. + + 13 + + ARTICLE XII MISCELLANEOUS ------------- + +Section 12.01. Notices. All notices authorized or required to be given pursuant ------- to this Agreement shall be given in writing and either personally delivered to the Party to whom it is given or delivered by an established delivery service by which receipts are given or mailed by registered or certified mail, postage prepaid, or sent by electronic telecopier, addressed to the Party at the following addresses. Any Party may change its address for the receipt of notices at any time by giving notice thereof to the other Party, in which event this Agreement shall be amended accordingly. + + + + + +(a) If to NTL: Northern Telecom Limited 8200 Dixie Road, Suite 100 Brampton, Ontario L6T 5P6 Attention: Corporate Secretary + + Fax No.: 905 863 8425 + +(b) If to ETI: Entrust Technologies Inc. 2 Constellation Court Nepean, Ontario K2G 5J9 Attention: President copy: Secretary + +Section 12.02. Entire Agreement. This Agreement embodies the complete Agreement ------ --------- and understanding of Entrust and NTL with respect to the subject matter hereof. This Agreement supersedes all prior agreements and understandings among the Parties hereto with respect to the subject matter hereof. + +Section 12.03. Modification. No change or modification of this Agreement shall ------------- be of any force unless such change or modification is in writing and has been signed by the duly authorized representatives of the Parties hereto. + +Section 12.04. Waivers. No waiver of any breach of any of the terms of this -------- Agreement shall be effective unless such waiver is in writing and signed by the Party against which such waiver is claimed. No waiver of any breach shall be deemed to be a waiver of any other or subsequent breach. + + 14 + + Section 12.05. Severability. If any provision of this Agreement shall be held to ------------ be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. + +Section 12.06. Governing Law. This Agreement shall be governed by and be --------- ---- construed in accordance with the laws of the Province of Ontario, Canada. + +Section 12.07. Waiver of Jury Trial. THE PARTIES HERETO HEREBY IRREVOCABLY WAIVE ------ -- ---- ----- ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. + +Section 12.08. Limitation on Rights of Others. No person other than a Party ---------- -- ------ -- ------- shall have any legal or equitable right, remedy or claim under or in respect of this Agreement. + +Section 12.09. Assignment, etc. Each Party's rights under this Agreement are ---------------- personal to that Party and that Party shall not assign, sublet or otherwise transfer any right or interest under this Agreement to anyone, without the prior written consent of the other Party, which shall not be unreasonably withheld. Subject to the foregoing, this Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of, and be enforceable by, the Parties hereto and their respective heirs, administrators, executors, successors, and permitted assigns. + +IN WITNESS WHEREOF, the Parties have caused this Agreement to be signed by their authorized representatives. + +NORTHERN TELECOM LIMITED ENTRUST TECHNOLOGIES INC. By: /s/ Peter W. Currie By: /s/ John A. Ryan Name: Peter W. Currie Name: John A. Ryan Title: Senior Vice President and Title: President Chief Financial Officer + +By: /s/ David D. Archibald + +Name: David D. Archibald + +Title: Vice President and Deputy General Counsel + + 15 \ No newline at end of file diff --git a/full_contract_txt/ETELOS,INC_03_09_2004-EX-10.8-DISTRIBUTOR AGREEMENT.txt b/full_contract_txt/ETELOS,INC_03_09_2004-EX-10.8-DISTRIBUTOR AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..e013fd903ad805d4b7bcaf0fb9debeb1ddba0d84 --- /dev/null +++ b/full_contract_txt/ETELOS,INC_03_09_2004-EX-10.8-DISTRIBUTOR AGREEMENT.txt @@ -0,0 +1,303 @@ +EXHIBIT 10.8 + +DISTRIBUTOR AGREEMENT Tripath Technology, Inc. 3900 Freedom Circle Suite # 200 Santa Clara, CA 95054 Tel: (408) 567-3000 Fax: (408) 567-3003 + +This Agreement is effective 7/1/98 ("Effective Date") between Tripath Technology, Inc. ("Tripath"), and + +Uniquest Corporation 780 Montague Expressway Suite 406 Santa Jose, CA 95131 + +Tripath and Distributor intend to establish Distributor as a non-exclusive Distributor for Tripath products in the following designated Territory, subject to the terms and conditions of this Agreement. + +Korea + +1. Products + +1.1 "Products" means the Tripath semiconductor products identified by Tripath in writing from time to time. + +1.2 Tripath may discontinue manufacture or sale, or otherwise treat as obsolete, any or all of the Products covered by this Agreement upon thirty days written notice. + +2. Appointment and Term + +2.1 For the term of this Agreement, Tripath appoints Distributor as a non-exclusive distributor for the Products in the Territory, subject to Tripath's direct sales activities under Section 4. + +2.2 Distributor will use best efforts to develop the local market and promote the sales of Products within the Territory. Distributor will not sell outside the Territory without Tripath's prior written permission, which will not be unreasonably withheld. + +2.3 After one month's written notice, Tripath may in its discretion amend (i) the Products, and/or (ii) the Territory. + +2.4 Tripath reserves the right to appoint other distributors in or out of the Territory who may sell into the Territory. + +2.5 Distributor's appointment is for a term of one year from the Effective Date, renewable automatically unless terminated under Section 18 + +3. Distributor Responsibilities + +3.1 Distributor will maintain an adequately trained sales organization, capable of fulfilling its obligation under Subsection 2.2. + +3.2 Tripath will furnish technical and marketing information (such as sales aids and + + + + + + + +Distributor Agreement + +literature, data sheets, application notes, etc.) for the Products, and Distributor will maintain an organized and well stocked collection of such technical and marketing information for distribution to prospective customers. + +3.3 Distributor will employ sufficient trained personnel ("Application Engineers") to provide technical and marketing support for Tripath's Products. Distributor and Tripath will cooperate to ensure that the Application Engineers are and remain adequately trained and qualified. + +3.4 Distributor will maintain a reasonable number of Demonstration Products (customer samples), with appropriate technical and marketing literature, available for demonstration by knowledgeable Distributor personnel, provided that Distributor must obtain prior approval by Tripath before any customer receives demonstration Products (customer samples). + +3.5 Distributor has no authorization to make, and will not make, any guarantee or warranty with respect to any Product — all Product warranties are to be communicated to Customers directly by Tripath in writing. Distributor will make no representations as to quality, performance, capabilities, and the like except as are expressly authorized in writing by Tripath (such as in Tripath's standard, published specifications for a Product). + +4. Other Product Lines + +4.1 In appointing Distributor, Tripath is relying to a significant extent on Distributor's undertaking in Subsection 2.2. + +4.2 Distributor will not carry any competitive products without Tripath's consent, which shall not be unreasonable. + +5. Tripath Direct Sales Activity + +5.1 Tripath may in its sole discretion, immediately upon written notice to Distributor, make direct sales to certain accounts in the Territory ("Direct Sales Accounts"), including accounts to which Distributor has made sales. + +6. Pricing, credits, and allowances + +6.1 Prices for Products will be as set forth in the then effective distributor price list ("Distributor Price List") which will be furnished to Distributor from time to time. Any suggested resale prices shown in the Distributor Price List are to be considered as guidelines only. + +6.2 The Distributor Price List may be changed without prior notice, and will be effective as of the effective date indicated. The amount and timing of such change will be exclusively at Tripath's discretion. + +6.3 Orders for Products received and acknowledged by Tripath prior to a change in the Price List but shipped after the effective date of such change will be invoiced as follows: (a) in the case of a price decrease, the existing order backlog will be invoiced at the lower price, and (b) in the case of a price increase, the existing order backlog due for delivery within one month of the effective date of such change will be invoiced at the lower price. Outstanding written quotations will be held good for the same two-month period. + +6.4 Distributor's inventory of any Product will be price protected for reductions in the price of such Product as follows: the lesser of Distributor's (a) entire inventory of the Product, or (b) previous one month's shipments of the Product from Tripath. + +7. Purchase Orders and Payment + +7.1 Distributor will maintain sufficient inventory of Products (but not less than one month's inventory without Tripath's approval) to provide prompt delivery to Distributor's customers, in furtherance of Distributor's undertaking in Subsection 2.2. + +-2- + + + + + + + +Distributor Agreement + +7.2 Distributor will purchase Products for resale to its customers in accordance with Tripath's then effective terms and conditions of sale set forth in the Tripath sales order acknowledgment ("Sales Order Acknowledgment"), and the pricing terms of the then effective Distributor Price List (including minimum order quantities). The terms and conditions of sale in the Sales Order Acknowledgment may be changed without prior notice, exclusively at Tripath's discretion. + +7.3 No purchase order from Distributor is binding on Tripath until Tripath issues a Sales Order Acknowledgment to Distributor for such order, or makes a shipment against such order. Tripath will use commercially reasonable efforts to acknowledge Distributor purchase orders promptly. + +7.4 Tripath will invoice Distributor for Products when Tripath ships such Products. + +7.5 All credits will be handled as separate financial transactions from the original invoice, and will be evidenced by a written credit request submitted to Tripath. Distributor will not reduce any payment to Tripath to account for anticipated or unauthorized credits (except for short shipments and non-receipt of Products), either at the time of the payment of original invoice, or at the time of providing a credit request. Credit requests should be submitted by Distributor within one month after the date of Distributor's invoice for the related transactions. + +7.6 Any credit request will be based on the price shown on the then current Distributor Price List, or the actual net price paid by Distributor for the Product, whichever is lower. + +7.7 If Tripath notifies Distributor of any discrepancy in a credit request, Distributor has one month to resolve the discrepancy and pay the amount of the discrepancy. + +7.8 No purchase orders for which a Sales Order Acknowledgment has been issued may be canceled or rescheduled within one month of the scheduled shipment date without Tripath's approval. + +8. Special Pricing and Other Allowances + +8.1 The provisions of this Section 8 will be applicable only to transactions on DPA (distributor price authorization) basis in which Distributor first obtains a DPA confirmation from Tripath. + +8.2 Requests for special pricing and/or allowances will be submitted by Distributor to the appropriate Tripath sales office, and must be first approved in writing by that office. + +8.3 Quotes for special pricing are good for one month, and must be backed by a Tripath quote number. Distributor will supply supporting documentation showing Products listed by part number, date of transaction, end customer name and address, and the appropriate special pricing details, not later than two weeks after shipment to the associated customer. + +8.4 If Tripath has granted Distributor special pricing on a sale in which Distributor's customer has later returned the Product to Distributor, Distributor will reimburse Tripath for the amount of the DPA allowance within one month after such return. + +8.5 Any debit memo submitted by Distributor for a DPA allowance will be based on the price shown on the then current Distributor Price List, or the actual net price paid by Distributor for the Product, whichever is lower. + +9. Returns + +9.1 Distributor may return Products only after receiving written authorization from Tripath. All authorized returns will be shipped by Distributor freight prepaid. Unauthorized returns may be reshipped to Distributor, freight collect. + +-3- + + + + + + + +Distributor Agreement + +9.2 Distributor may request stock rotation return of slow moving Products, which will be authorized by Tripath provided that: (a) the Product is contained in Tripath's then current Distributor Price List, (b) the Product is packaged as it was originally shipped, and (c) a purchase order for equal value accompanies the request for return. Such stock rotation returns will not exceed five percent (5%) of the dollar value of Distributor's previous six (6) months net purchase orders from Tripath. + +9.3 Discontinued Product may be returned only with prior written authorization. + +9.4 Credit will be allowed for returned Products based on the price actually paid by Distributor, less any prior DPAs, credits and other allowances. + +9.5 If, in the reasonable opinion of Tripath, previously authorized returned Products have been used or damaged, a credit or replacement may be refused. Distributor will be notified within one month after receipt of Product by Tripath of any such Product Tripath is claiming to be used or damaged. + +10. Limited Warranty + +10.1 Tripath provides an end user limited warranty for retail Products, and one-year limited warranty for OEM products. The terms of the end user limited warranty are set forth in documentation provided with the retail Product. + +10.2 For OEM Products, Tripath warrants that the Products will be free of manufacturing and workmanship defects for one year from the date of shipment by Distributor to a customer, or eighteen months from the date of shipment to Distributor, whichever is sooner. + +10.3 If any OEM Products prove defective during this one year period as set forth in Section 10.2, Tripath will, at its option, either (a) repair or replace the Product with a new or reconditioned Product, (b) use reasonable efforts to provide Distributor with a correction of the defect, or (c) refund to Distributor the purchase price paid for the Product. Any Product replaced will become Tripath property. + +10.4 Distributor must return the defective OEM Product pursuant to a return material authorization under Section 9.1 in the original shipping carton (or an equivalent protective carton), and pay the shipping and insurance charges. Distributor assumes the risk of loss or damage during shipment. + +10.5 OEM Products that are defective as set forth in Section 10.2 as a result of improper handling, incorrect installation or other misuse, or as a result of accident, disaster, acts of God or other such events, as determined by Tripath in its reasonable discretion, are not covered by this limited warranty. + +10.6 For OEM Products, Tripath provides only the warranties set forth in this limited one year limited warranty. For retail Products, Tripath provides to the end user only the warranties set forth in the applicable end user warranty. Any and all other warranties, either express, implied or statutory, including, without limitation, warranties of fitness for a particular purpose, or of merchantability, are hereby expressly excluded and disclaimed by Tripath. + +11. Reports and Audits + +11.1 Distributor will submit reports as may be reasonably requested by Tripath, including, without limitation, monthly reports of inventory on hand and sales relating to the Products. Sales data will include, without limitation, Product part number, quantity, resale price, special pricing, distributor invoice number, and customer name. Distributor will submit these reports electronically on a timely basis each month and in no case later than two weeks after the beginning of the month. + +-4- + + + + + + + +Distributor Agreement + +11.2 Tripath may have an authorized Tripath representative, at Tripath's cost, audit Distributor's records relating to sales and inventories of Products, including, without limitation, records pertaining to any claims submitted by Distributor for price protection, stock rotation, returned Products, ship from stock and debit, DPA allowances, and credit requests. Upon prior written notice, Distributor will provide reasonable access to such records during normal business hours at Distributor's office. Distributor agrees to maintain all such records for a minimum of three years. + +12. Distributor's Financial Condition + +12.1 Tripath may withhold shipments because of Distributor's general financial condition and/or conditions of Distributor's account with Tripath. Such withholding will be not construed as a breach of this Agreement. + +12.2 Distributor will supply Tripath with credit data sufficient to establish Distributor's credit worthiness. + +13. Advertising and Sales Promotion + +13.1 Distributor's tradename may be used by Tripath in its advertisements, provided that such use is in proper form. + +13.2 Distributor will be eligible to participate in Tripath distributor cooperative advertising programs designated by Tripath for the Territory. However, prior approval must be obtained in writing from Tripath before any expenditures of funds by Distributor are eligible for reimbursement. + +14. Tripath Trademarks + +14.1 Tripath grants to Distributor a non-exclusive license to use Tripath's trademarks, trade names and service marks only in connection with the Products and in the performance of Distributor's obligations under this Agreement. All such uses are subject to Tripath's prior review and consent, which will not be unreasonably withheld or delayed. + +14.2 All use of Tripath trademarks and service marks will be in proper form, giving appropriate attribution to Tripath as the owner of the mark. Distributor will not undertake any use of a mark in a manner that might jeopardize Tripath's rights to use or register such mark, or Tripath's rights to prevent unauthorized use. Distributor will promptly notify Tripath of any acts of unfair competition or trade or service mark infringement, and reasonably cooperate with efforts to protect Tripath's rights. + +14.3 All use of Tripath trade marks and service marks by Distributor will inure to the benefit of Tripath, and Distributor will reasonably cooperate, at Tripath's expense with Tripath's efforts to register or otherwise secure rights in such marks. Upon termination of this Agreement, Distributor will immediately cease all further use of Tripath's trademarks, trade names or service marks except as may be required in the sale of Products in inventory. + +15. Relationship Between the Parties + +15.1 Both Distributor and Tripath are independent contractors, and no agency or other joint relationship is created. + +15.2 Neither party has any authority to act for and/or to bind the other in any way, or to represent that either is in any way responsible for the acts of the other. + +16. Confidentiality + +16.1 Confidential information ("Information") of Tripath and/or Distributor will mean information that the disclosing party desires to protect against unauthorized use or disclosure, and which is furnished under this Agreement as follows: (a) written or other tangible information clearly marked with a notice, such as + +-5- + + + + + + + +Distributor Agreement + +"CONFIDENTIAL"; and (b) oral information that is identified at the time of disclosure as being confidential. Confidential Information will not include information that: (a) enters the public domain without a breach of this Agreement, (b) is known to the recipient prior to the time of disclosure, or is independently developed by the recipient without using any Information, or (c) is obtained from another source that the receiving party has no reasonable cause to believe is under any obligation of confidentiality with respect to Information. + +16.2 The recipient of Information will treat it as proprietary and confidential, safeguarding the Information at least as carefully as it would its own confidential information, and will use all reasonable efforts to prevent any unauthorized use or disclosure, including restricting access to the Information within its organization and ensuring that its employees comply with this Agreement. A receiving party will not disclose any information to any third party without prior written consent. Either party learning of any unauthorized use or disclosure of any Information will promptly notify the other party, and will reasonably cooperate with efforts to protect such Information. + +16.3 The recipient of information will use it only in the furtherance of the business relationship established by this Agreement, and for no other purpose without prior written consent. All Information will remain the property of the disclosing party, and will be returned or destroyed upon written request. + +16.4 The confidentiality obligations in this Agreement will be binding during the Agreement and for a period of three years after any termination or non-renewal of the Agreement. + +16.5 Neither party will disclose the existence or terms of this Agreement without prior written consent. + +17. Export Control + +17.1 Distributor will not engage in exporting activities within the Territory without the prior written approval of Tripath, and the United States Government if such approval is necessary. Nothing in this Subsection is meant to authorize Distributor shipments outside the Territory. + +17.2 Distributor understands that the Products and Tripath confidential information are restricted by the United States Government from export to certain countries, and Distributor agrees that it will not sell or license Products or transfer Tripath confidential information in any way will violate any of the export control laws or regulations of the United States. + +18. Term and Termination + +18.1 The terms of this Agreement shall be one year from the effective date and will be automatically renewed on each anniversary of the effective date, for a renewal term of one year unless either party provides written notification of its intention not to renew this Agreement at least one month prior to the expiration of the initial or any renewal terms. Tripath will honor all orders acknowledged prior to the effective date of any such termination by nonrenewable. + +18.2 Tripath or Distributor may terminate this Agreement for any reason with thirty days written notice. + +18.3 Either party may terminate this Agreement immediately if the other party becomes insolvent, or takes any steps to make an arrangement with its creditors, or has a receiver appointed. + +18.4 If Tripath terminates pursuant to Subsection 18.1 or 18.2, or if Distributor terminates pursuant to Subsection 18.3, Tripath will purchase and Distributor will resell to Tripath Distributor's inventory of Products (excluding + +-6- + + + + + + + +Distributor Agreement + +discontinued and demonstration Products) which Tripath determines to be undamaged and in good condition (including, at Tripath's option on-site inspection). The price for such inventory will be the price actually paid by the Distributor, less any prior credit or allowances. + +18.5 If Distributor terminates pursuant to Subsection 18.1 or 18.2, or if Tripath terminates pursuant to Subsection 18.3, Tripath may, at its option, purchase and Distributor will resell to Tripath all or part of Distributor's inventory at the price set forth in Subsection 18.4, less a ten percent restocking charge. + +18.6 On termination of this Agreement for whatever cause, Distributor will immediately (a) cease to engage in marketing and distribution activities as Tripath's official distributor, and (b) cease representing in any manner that it is a distributor of Tripath Products in the Territory. + +18.7 All obligations of Distributor to make payments under this Agreement will survive any termination of this Agreement for whatever cause, along with the following provisions: Section 10 (Limited Warranty), Section 11 (Reports and Audits), Section 16 (Confidentiality), Section 17 (Export Control), Section 19 (Intellectual Property Indemnity), and Subsection 21.6 (Governing Law), and Subsection 21.7 (Arbitration). + +19. Intellectual property indemnity + +19.1 Indemnification. Distributor agrees that Tripath has the right to, and Tripath agrees that it will at its expense, defend or at its option settle any claim, suit, proceeding, or other action brought against Distributor or its customer for infringement of any United States copyright, trademark or other United States intellectual property right related to the Products or their use, subject to the limitations set forth in this Section. Tripath will have sole control of any such action or settlement negotiations (Tripath will not be liable for any costs or expenses incurred without its prior written authorization), and Tripath will pay any final judgment entered against Distributor or its customer based on such infringement. Tripath at its sole option will be relieved of the foregoing obligations unless Distributor or its customer notifies Tripath promptly in writing of such action and gives Tripath full information and assistance to settle and/or defend any such action. If it is adjudicated that a Product infringes, or if the sale or use of a Product is, as a result, enjoined, then Tripath will, at its option and expense either: (i) procure for Distributor and its customers the right to sell or use the Product; or (ii) replace the Product with other suitable Product; or (iii) suitably modify the Product to be noninfringing; or (iv) if none of the foregoing are commercially reasonable, as determined by Tripath, accept return of the affected Products and refund Distributor's aggregate payments for such Products, less a reasonable sum for use and/or damage, if any. + +19.2 Limitation. Notwithstanding the provisions of Section 19.1, Tripath assumes no liability for, and Distributor agrees to indemnify Tripath to the same extent as Tripath's indemnity under Section 19.1 for: (i) any infringements covering completed equipment or any assembly, circuit, combination, or method in which any of the Products may be used but not covering such Products standing alone; or (ii) any trademark infringements involving any marking or branding not applied by Tripath or involving any marking or branding applied at the request of Distributor; or (iii) any modification of the Products unless such modification was made by Tripath. + +19.3 Entire Liability. The foregoing provisions of this section 19 state the entire liability and obligations of Tripath and the exclusive remedy of Distributor and its customers, with respect to any actual or alleged intellectual property infringement by the Products. + +20. Limitation of Liability + +20.1 Neither Tripath nor Distributor will be liable for any incidental or consequential + +-7- + + + + + + + +Distributor Agreement + +damages (including, without limitation, damages for loss of business profits, business interruption, loss of business information, or other pecuniary loss) arising out of this Agreement, even if advised of the possibility of such damages. + +21. General + +21.1 Assignment. This Agreement is not assignable by Distributor without prior written consent of Tripath, which will not be unreasonably withheld. Tripath is free to assign this contract without Distributor's consent. + +21.2 Modifications. This Agreement may be modified only in writing signed by an officer of each party. + +21.3 Headings. The headings of the several Sections are inserted for convenience of reference only, and are not intended to be part of nor to affect the meaning or interpretation of this Agreement. + +21.4 Notices. All notices under this Agreement will be sent by receipted courier (e.g., U.P.S.). + +21.5 Non-Waiver. The failure of either party to enforce at any time any of the provisions of this Agreement will not be construed as a waiver of the right of such party to subsequently enforce any such provisions or a waiver of the provision itself. + +21.6 Governing Law. This Agreement will be governed by the laws of California, without reference to conflicts of laws. + +21.7 Arbitration. Any dispute or claim arising out of this Agreement will be referred to and resolved by the International Chamber of Commerce ("ICC") in accordance with the ICC Arbitration Rules. The venue for such arbitration will be Santa Clara County, California, USA. + +-8- + + + + + + + +Distributor Agreement + +This Agreement supersedes all proposals, oral or written, all negotiations, or discussions between or among the parties relating to this Agreement, and all past course of dealing or industry custom. This Agreement takes precedence over the terms of any Tripath or Distributor order or sales documentation, including the Tripath Sales Order Acknowledgment. + +TRIPATH CORPORATION DISTRIBUTOR By: /s/ EVERETT ROACH By: /s/ CHARLES LIM Name: Everett Roach Name: Charles Lim Title: Vice President, World Wide Sales Title: President Date: 7/1/98 Date: 7/7/98 + +-9- \ No newline at end of file diff --git a/full_contract_txt/EUROPEANMICROHOLDINGSINC_03_06_1998-EX-10.6-DISTRIBUTOR AGREEMENT.txt b/full_contract_txt/EUROPEANMICROHOLDINGSINC_03_06_1998-EX-10.6-DISTRIBUTOR AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..fed7d2a336d25207e6b4f38e10d0f55de3f35666 --- /dev/null +++ b/full_contract_txt/EUROPEANMICROHOLDINGSINC_03_06_1998-EX-10.6-DISTRIBUTOR AGREEMENT.txt @@ -0,0 +1,459 @@ +EXHIBIT 10.6 + + EXHIBIT 10.06 + + WATCHGUARD TECHNOLOGIES, INC. DISTRIBUTOR AGREEMENT + +This Agreement is made and entered into effective as of November 5, 1997 (the "effective Date), by and between WatchGuard Technologies, Inc., a Delaware corporation ("WGT"), and European Micro ("Distributor"). WGT and Distributor agree as follows: + +Section 1. Definitions + +"Add-On Software Modules" means those computer software programs that (a) provide additional functionality and may be integrated with the existing Hardware and other Software, (b) may be legally exported to the Territory without any export license and (c) WGT elects to include in Exhibit A at a mutually agreed discount percentage. + +"Distributor Cost" means the purchase price payable by Distributor for each Product at the discount from WGT's then current WatchGuard Price List, as such discount is set forth in Exhibit A. + +"Documentation" means any and all manuals, user guides, end-user license agreement, limited hardware warranty, on-line help files, on-line menus and other in program printed text regarding the Product prepared by or for WGT in connection with the Product. + +"Gross Purchases" means the gross purchase price Distributor pays WGT for the Product, excluding any taxes or pass through charges and net of any credits or returns. + +"Guaranteed Minimum Purchases" means the guaranteed minimum purchase amounts set forth in Exhibit A. + +"Hardware" means the hardware identified on Exhibit A, together with any Updates to such hardware. WGT reserves the right to add to or delete hardware from Exhibit A and to modify the hardware during the Term. + +"Product" means the combination of Hardware, Software and Documentation together as part of the same product package (including any Add-On Software Modules and any Updates thereto), in all cases carrying the "WatchGuard" Trademark. + +"Quarter" means any period of three (3) consecutive calendar months that begins on January 1, April 1, July 1 or October 1, during the Term. + +"Software" means the computer programs identified on Exhibit A, in object code only, together with any Updates to such programs. WGT reserves the right to add or delete Software from Exhibit A and to modify the Software during the Term. + +"Term" means the period of time determined in accordance with Section 5. + +"Territory" means the geographic area described in Exhibit A. + +"Trademarks" means the trademarks and trade names of WGT identified in Exhibit A. + +"Update" means any minor modification, minor upgrade or minor enhancement of the Product (excluding any new version of the Product) that WGT publishes and elects to make available to Distributor via BBS, FTP site or other reasonable means. WGT is not obligated to make or release any update. + +Section 2. Relationship of the Parties + +2.1 Appointment. Subject to and in accordance with the provisions of this Agreement, WGT hereby appoints Distributor, and Distributor hereby accepts WGT's appointment, as a nonexclusive distributor of the Product to resellers in the Territory during the Term, as long as Distributor makes the Guaranteed Minimum Purchases pursuant to Section 4. + +2.2 License Grant. Subject to the terms and conditions of this Agreement, WGT grants to Distributor a nontransferable license to do the following in the Territory during the Term: + +(a) market and distribute the Product to resellers; + +(b) demonstrate the Product to potential resellers; + +(c) use the Product internally for the sole purpose of providing this product support specified in paragraph 4.1(c); + +(d) use and display the Trademarks in connection with marketing and distributing the Product in the Territory pursuant to paragraphs (a) and (b) above. + +2.3 No Exclusivity. Distributor's appointment and the rights granted hereunder are nonexclusive. WGT may, at its sole option, appoint other distributors of the Product in the Territory at any time during the Term and expressly reserves the right to license the Product directly or indirectly to + + + + + + end-users, third party original equipment manufacturers or other hardware bundlers, value-added resellers or other resellers for sublicense or resale in the Territory. + +Section 3. Compensation + +3.1 Support services. As full compensation for the support services described in Exhibit C and provided during the Term, Distributor will pay WGT the Support Fee set forth in Exhibit A. Payment of the Support Fee is due and payable upon execution of this Agreement by wire transfer of immediately payable funds to the bank and account set forth in paragraph 3.4, and then annually by invoice from WGT on the anniversary of the execution of the Agreement. + + 2 + +3.2 Price. Distributor will pay WGT for each Product Distributor orders an amount equal to WGT's then current WatchGuard Price List in effect on the date of receipt by WGT of Distributor's order, subject to the applicable discount set forth in Exhibit A. WGT may, from time to time, change its WatchGuard Price List, provided that any such change will not be effective under this Agreement unless and until the expiration of forty-five (45) days after WGT gives Distributor written notices of the change. + +3.3 Guaranteed Minimum Purchases. During the Term, Distributor will make Gross Purchases in an amount at least equal to the cumulative Guaranteed Minimum Purchase amounts through committed orders placed pursuant to paragraph 3.5 and calling for shipment on or before the dates set forth in Exhibit A. + +3.4 Invoices. WGT will issue invoices for the Products ordered by Distributor and all other amounts payable to WGT under this Agreement. Distributor will pay WGT the full amount invoiced within thirty (30) days after the date of WGT's invoice, unless provided otherwise on the applicable invoice, in the lawful money of the United States of America to WGT by wire transfer of immediately available funds to WGT's bank account number 1141139, at the Commerce Bank of Washington, 601 Union Street, Suite 3600, Seattle, WA 98101, ABA routing number 125008013. + +3.5 Orders. Distributor will place orders for the Product from WGT by completing, signing and submitting to WGT a written order for the same, in a form acceptable to WGT, via facsimile, mail or other means. Distributor shall submit such order at least thirty (30) days in advance of the delivery date set forth in each order. All orders will be subject to acceptance by WGT through written acceptance or shipment of the Product subject to the order. + +Section 4. General Obligations of the Parties. + +4.1 Obligations of Distributor. Distributor will use its best efforts aggressively to develop sales of the Product in the Territory. In furtherance thereof, Distributor will: + +(a) keep on hand a reasonable inventory of the Product sufficient to allow for prompt delivery of the Product to resellers; + +(b) establish a program to market the Product, including, but not limited to, participating regularly in local and regional trade shows, conventions or like events in the Territory, and conducting regular local promotional and other marketing efforts for the Product; + +(c) provide quality product support to resellers, including, but not limited to, providing appropriate installation and application advice and prompt follow-up service and advice to resellers of the Product upon request; + + (d) provide a support center to resellers, including, but not limited to, a hotline service to answer reseller questions and to receive and track complaints and any reports of claimed errors in the Product; + + 3 + +(e) provide quality product technical and sales training to resellers; + +(f) respond promptly to sales leads or referrals furnished by WGT or by other distributors or dealers of WGT; + +(g) have a designated number of employees attend such technical and sales training programs as set forth in Exhibit C; + +(h) maintain and furnish periodically, as WGT may reasonably request, complete and accurate records of each sale or other distribution of each Product sold or distributed by Distributor (e.g., showing the date of sale, Zip code of the customer, the Product serial number and the applicable Product license key(s)) under this Agreement; + +(i) promptly advise WGT of each complaint that Distributor may receive or becomes aware of concerning the Product or any portion thereof (including, but not limited to, warranty claims). Distributor will promptly investigate all such complaints and will give immediate attention to and use its best efforts to promptly, courteously and equitably respond to, adjust and settle (without incurring any obligation or liability on behalf of WGT) all + + + + + + complaints received by Distributor from any customer, potential customer or anyone else arising out of or in connection with Distributor's sale of any Product, or the performance of any services. In handling any complaints, Distributor will use its best efforts to maintain and promote good public relations for WGT; + +(j) secure and maintain, in the name of WGT, any and all registrations, permits, licenses, approvals and other governmental actions required to import, handle, market, sell, demonstrate, use and distribute the Product in the Territory, provide to WGT quarterly progress reports on such action, and provide WGT copies of all registrations, permits, licenses, approvals, certificates, correspondence and other documentation related to such action; + +(k) hire, train, coordinate and maintain a qualified staff of sufficient size and with a level and mix of capabilities as are reasonably necessary to accomplish the goals contemplated under this Agreement; + +(l) avoid deceptive, misleading or unethical conduct which are or might be detrimental to WGT or its Product, and refrain from making any representation, warranty or guarantee to any reseller with respect to specifications, features or capabilities of the Product that is inconsistent with the literature distributed by WGT or this Agreement; + +(m) conduct its business in a manner under its own control, provided that Distributor will at all times comply with all applicable laws and regulations and will not engage in, or permit its employees or agents to engage in, any activities or practices which could reflect negatively upon the reputation or prospects of WGT or the Product or expose WGT to any liability of any nature whatsoever; and + +4.2 Obligations of WGT, WGT will: + + 4 + +(a) provide Distributor with sixty (60) days advance notice in the event that it discontinues production of any Product; + +(b) provide Distributor with the training and product support services described in Exhibit C; and + +(c) furnish Distributor with such demonstration Product, promotional literature, data, information and other items as WGT deems appropriate for Distributor's promotion, marketing and sale of the Product. WGT will use such items only for the purpose of performing its obligations under this Agreement. + +4.3 Forecasts. Distributor's forecast of Product purchases for the Term is set forth on Exhibit D. At least fifteen (15) days before the beginning of each Quarter during the Term, Distributor will furnish WGT with a rolling revised forecast of Product orders for the remainder of the Term. + +Section 5. Term and Termination. + +5.1 Term. The Term will commence on the Effective Date of this Agreement and will remain in effect, unless sooner terminated under paragraphs 5.2, 5.3, or 5.4, until the termination date specified in Exhibit A. + +The Term will automatically renew for successive additional periods of one (1) year each, provided that: (a) Distributor has made all Guaranteed Minimum Purchases and has complied with the marketing requirements under paragraph 4.1(b); (b) the parties have agreed in writing upon the Guaranteed Minimum Purchase amounts and Product price discounts for the next subsequent one (1) year renewal period; (c) neither party provided the other party with notice of such party's intention not to renew this Agreement at least thirty (30) days prior to any year's Expiration Date; and (d) neither party provided the other party with such notice as may be required pursuant to paragraphs 5.2, 5.3 or 5.4. + +5.2 Termination by WGT. Upon the occurrence of any of the following, WGT may terminate the Term by giving Distributor written notice of such termination for: + +(a) any failure of Distributor to comply with the marketing requirements under paragraph 4.1(b); + +(b) any material change in the general management, ownership or control of Distributor, including without limitation the sale, transfer or relinquishment by Distributor of any substantial interest in the ownership of the business to be carried on by Distributor under this Agreement, unless such change is approved in advance and in writing by an officer of WGT; + +(c) any assignment or attempted assignment of this Agreement by Distributor without the prior written consent of WGT; + +(d) any solicitation by Distributor for the sale of the Product to resellers located outside the Territory; + + 5 + + + + + +(e) the insolvency of Distributor, the filing of a petition in bankruptcy by or against Distributor, the appointment of a receiver for Distributor or Distributor's property, the execution of an assignment by Distributor of all or substantially all of its assets for the benefit of its creditors, or the conviction of Distributor or any principal or manager of Distributor for any crime tending to adversely affect the ownership or operation of Distributor's business; + +(f) any failure by Distributor to perform any of its other obligations under this Agreement where such failure continues for thirty (30) days after written notice thereof by WGT to Distributor; or + +(g) WGT giving Distributor ninety (90) days' advance written notice of termination at any time after the expiration of the Initial Term. + +5.3 Failure to Make Guaranteed Minimum Purchases. Upon any failure by Distributor to make Gross Purchases in sufficient amounts to meet or exceed the applicable cumulative Guaranteed Minimum Purchases, WGT may, at its sole option and effective upon notice to Distributor, terminate this Agreement. Distributor shall pay WGT fifty percent (50%) of the unpaid balance of cumulative Guaranteed Minimum Purchase amounts as liquidated damages. The parties acknowledge and agree that it would be difficult or impossible to calculate WGT's actual damages arising from Distributor's failure to timely pay all of the Guaranteed Minimum Purchases. Therefore, the parties have agreed upon the above payment of liquidated damages in lieu of WGT's claim for actual damages from such breach. + +5.4 Termination by Distributor. Upon the occurrence of any of the following, Distributor may terminate the Term by giving WGT written notice of such termination; + +(a) the insolvency of WGT, the filing of a petition by or against WGT, the appointment of a receiver for WGT or WGT's property, or the execution of an assignment by WGT of all or substantially all of its assets for the benefit of its creditors; + +(b) any failure by WGT to perform any of its obligations under this Agreement where such failure continues for thirty (30) days after written notice thereof by Distributor to WGT; or + +(c) for convenience whether or not extended beyond the Initial Term, provided Distributor gives WGT thirty (30) days' advance written notice and, within such thirty (30) day period, Distributor pays to WGT a lump-sum payment equal to fifty (50%) of the unpaid balance of cumulative Guaranteed Minimum Purchase amounts. + +5.5 Effect of Termination. Any termination pursuant to paragraphs 5.2, 5.3, or 5.4 will be without prejudice to any other right or remedy afforded to either party under this Agreement or any applicable law (e.g., in the case of any breach or default by the other party), and will not affect any rights or obligations which have arisen prior to the date of such termination. In the event of termination, Distributor will: + + 6 + +(a) immediately cease to demonstrate, market, sublicense and distribute the Product in the Territory; + +(b) cease use of all Trademarks of WGT; + +(c) return to WGT within twenty (20) days following the expiration or termination of the Term, any and all (i) demonstration Product provided to Distributor; (ii) Products not already paid for in full by Distributor; and (iii) promotional literature, data, information and other items received by Distributor under this Agreement; and + +(d) furnish WGT with such information relating to the marketing, sale or distribution of the Product in the Territory as WGT may reasonably request (including, but not limited to, information as to calls or the status of any negotiations for the sale of the Product, or any sales or service records). + +Upon the expiration or termination of the Term, the license granted under Section 2 of this Agreement will terminate. Any end-user licenses of the Software granted under the terms of this Agreement will survive the end of the Term in accordance with the terms of the applicable end-user license agreement. + +5.6 Acknowledgment. Any expiration or termination of the Term will be final and absolute. Except as expressly set forth in paragraphs 5.3 and 5.5(c), Distributor waives any right, either express or implied by applicable law or otherwise, to the renewal of this Agreement or to any damages or compensation for any expiration or termination of the Term in accordance with this Section 5. Each of the parties have considered the possibility of such expiration or termination and the possibility of loss and damage resulting therefrom in making expenditures pursuant to the performance of this Agreement. It is the express intent and agreement of the parties that neither will be liable to the other for damages, except as expressly set forth in paragraphs 5.3 and 5.5(c), or otherwise by reason of the expiration or termination of the Term as provided for herein. + +6.0 Force Majeure. Neither party will be liable for, or be considered to be in breach of or default under this Agreement on account of, any delay or + + + + + + failure to perform as required by this Agreement (other than for payment under Section 3), as a result of any cause or condition beyond such party's reasonable control. + +7.0 Entire Agreement. This Agreement is subject to the provisions of WGT's Standard Distributor Terms attached hereto as Exhibit B and by this reference incorporated into and as part of this Agreement. This Agreement is also subject to any additional terms or licenses executed by WGT and Distributor and attached as Exhibits, including any Special Terms and Conditions specified in Exhibit A. This Agreement sets forth the entire agreement, and supersedes any and all prior agreements, among the parties related to the Product. WGT will not be bound by, and specifically objects to, any term, condition, or other provision that is different from or in addition to the provisions of this Agreement (whether or not it would materially alter this Agreement) and that is proffered by Distributor or otherwise appears in any order, receipt, acceptance, confirmation, correspondence, or otherwise, unless WGT specifically agrees to such provision in a written instrument signed by WGT. No + + 7 + + modifications of any of the provisions of this Agreement will be valid unless set forth in a written instrument signed by both parties. Any remedy by WGT set forth in this Agreement is in addition to any other remedy afforded to WGT under any other contract, by law, or otherwise. + +IN WITNESS THEREOF, the parties have executed this Agreement as of the date first above written. + +Distributor: WatchGuard Technologies, Inc. + +By: /s/ LAURENCE GILBERT By: /s/ WATCHGUARD ------------------------- ------------------------------ + +Title: MANAGING DIRECTOR Title: VP/SALES + +Date Signed: NOVEMBER 5, 1997 Date Signed: NOVEMBER 3, 1997 + +Address: 20/24 Church Street Required Signature: Altrincham, Cheshire WA14 4DW, ENGLAND By: ------------------------------- Title: Executive Vice-President Sales + + Date Signed: --------------------- + + Address: 316 Occidental Avenue South Suite 300 Seattle, Washington 98104 + + 8 + + FULL SERVICE MASTER DISTRIBUTOR SCHEDULE EXHIBIT A + +PRODUCTS: + +Distributor will be entitled to order the following products (which includes hardware and software) at the following discounts of WGT's then current WatchGuard Price List: + +- ------------------------------------------------------------------------------- DISCOUNT FROM WGT'S PRODUCT THEN CURRENT WATCHGUARD PRICE LIST - ------------------------------------------------------------------------------- WatchGuard Security System 40% plus additional 10% on the remaining undiscounted amount, i.e., 46% + +- ------------------------------------------------------------------------------ + +EXCHANGE FEE: $10 per CD SUPPORT FEE: $25,000 per year + + CUMULATIVE GUARANTEED MINIMUM PURCHASES DATE OF ORDER (U.S. DOLLARS) - -------------------------------------------------- --------------------------- Upon contract signing $100,000.00 1st subsequent Quarter-end, Sept. 30, 1997 $100,000.00 2nd subsequent Quarter-end, Dec. 31, 1997 $167,000.00 3rd subsequent Quarter-end, Mar. 31, 1997 $234,000.00 4th subsequent Quarter-end, Jun 30, 1997 $300,000.00 + + + + + +TERMINATION DATE: September 30, 1997 TRADEMARKS: + +/bullet/ WatchGuard(TM) + +/bullet/ WatchGuard(TM) Technologies + +/bullet/ WatchGuard(TM) SchoolMate + +/bullet/ Firebox(TM) + +TERRITORY: + +/bullet/ Europe + +SPECIAL TERMS AND CONDITIONS + + 9 + +These Special Terms and Conditions are part of the Distributor Agreement between WatchGuard Technologies, Inc. ("WGT") and Distributor (collectively, the "Agreement"). Terms that are defined in the Distributor Agreement will have the same meaning when used in these Special Terms and Conditions. + +Section A.1 By joint agreement between WGT and Distributor, Distributor may engage in end user sales in the Territory. + +If it is agreed that Distributor may engage in end user sales, Distributor may distribute, license and sell up to 20% of the Product purchased from WGT directly to end-users in the Territory. Further, Distributor agrees that high end-users satisfaction is a condition of its continued authorization by WGT. To ensure high end-user satisfaction, Distributor shall: (a) provide quality first level support to its end-user customers; (b) promptly report to WGT all suspected and actual problems with any WGT product; (c) assist WGT in tracing WGT Products to particular end users to distribute critical WGT Product information, locate WGT Products for safety reasons, or to be discover unauthorized marketing or infringing acts; (d) avoid deceptive, misleading or unethical conduct which are or might be detrimental to WGT or its WGT product; and (e) refrain from marking any representation, warranty or guarantee to end users with respect to the specifications, features or capabilities of the WGT Product that is inconsistent with the literature distributed by WGT or this Agreement. + +Section A.2 Distributor is legally organized under the jurisdiction of a country belonging to the European Union. + +If Distributor is organized under the jurisdiction of the country belonging to the European Union, the following clause is hereby appended to Section 1(c) of the Standard Distributor Terms: + + "PROVIDED HOWEVER, the foregoing restriction is not intended to preclude Distributor from fulfilling, and Distributor may fulfill, unsolicited orders for Product received from outside the Territory but within the European Union (and Distributor shall provide WGT written notice of any such Sales);" + +Section A.3 As a Full Service Master Distributor, Distributor agrees to sign up a minimum of 10 new WatchGuard resellers in the Territory within the Initial Term of the Agreement. + +- -------------------------------------------- --------------------------------- Distributor: WatchGuard Technologies, Inc.: + +By: /s/ LAURENCE GILBERT By: /s/ WATCHGUARD -------------------------- ----------------------------- Title: MANAGING DIRECTOR Title: SENIOR VICE PRESIDENT/SALES Date Signed: NOVEMBER 5, 1997 Date Signed: NOVEMBER 3, 1997 -------------------------------------------- --------------------------------- + + 10 + + STANDARD DISTRIBUTOR TERMS EXHIBIT B + +These Standard Distributor Terms are part of the Distributor Agreement between WatchGuard Technologies, Inc. ("WGT") and Distributor (collectively, the "Agreement"). Terms that are defined in the Distributor Agreement will have the same meaning when used in these Standard Distributor Terms. + + 1. Reservation of Rights. The Software is licensed, not sold, to Distributor. PARAGRAPH 2.2 LICENSE GRANT of the Distributor Agreement sets forth the entirety of Distributor's rights to use, market, distribute, demonstrate and otherwise deal with the Product. All rights in and to the Product not expressly granted to Distributor under this Agreement are hereby expressly reserved to WGT without restriction. Without limiting the generality of the foregoing, Distributor will comply with the following: + +(a) Distributor will distribute the Product to resellers only pursuant to a reseller agreement that substantially conforms to the term of this + + + + + + Agreement; + +(b) Distributor will not market, demonstrate or distribute the Product outside the Territory and Distributor will not supply the Product to any reseller that Distributor knows or has reason to know (i) intends to distribute the Product outside the Territory or (ii) intends to use or install the Product outside the Territory; + +(c) Distributor will market, sell and distribute the Product only in its original, unopened package as received from WGT under the terms of the end-user license agreement and limited hardware warranty, as applicable, originally included in the Product package; + +(d) Distributor will not modify or make copies of the Product or translate or port the Software into any other computer or human language; + +(e) Distributor will not disassemble, reverse engineer, decompile or repackage all or any component of the Product or otherwise attempt to discover any portion of the source code or trade secrets related to the Product; + +(f) Distributor will not remove, alter, distort, cover or modify any notice of copyright, trademark or other proprietary right appearing in or on any item included with the Product or its packaging; and + +(g) Distributor will not register, attempt to register or assist anyone else to register, directly or indirectly, the Trademarks or any copyright or other proprietary rights associated with the Product in the Territory or elsewhere other than in the name of WGT, without WGT's prior written consent. + +2. Protection Against Unauthorized Use. Distributor will promptly notify WGT of any unauthorized use of the Product or the Trademarks which comes to Distributor's attention. In + + 11 + + the event of any such unauthorized use by Distributor's employees, agents or representatives, Distributor will use its best efforts to terminate such unauthorized use and to retrieve any copy of the Product in the possession or control of the person or entity engaging in such unauthorized use. Distributor will immediately notify WGT of any legal proceeding initiated by Distributor in connection with such unauthorized use. WGT may, at its option and expense, participate in any proceeding and, in such event, Distributor will provide such authority, information and assistance related to such proceeding as WGT may reasonably request to protect WGT's interests. + +3. Use of Trademarks. WGT reserves all rights in and to the Trademarks and all other trademarks and trade names used by WGT in connection with the Products, but WGT grants to Distributor the nonexclusive right to use and display the Trademarks during the Term to promote and identify the Product in the Territory in connection with this Agreement. Distributor will comply with the trademark guidelines and procedures established by WGT in Distributor's use of the Trademarks including without limitation use of the trademark and copyright symbols as specified by WGT from time to time. When using the Trademarks, Distributor will include a statement acknowledging that the Trademarks are owned by WGT. Distributor hereby acknowledges that the goodwill associated with its use of the Trademarks inures solely and exclusively to WGT and that Distributor does not acquire any rights in the Trademarks as a result of such use. Distributor will not use the Trademarks or any confusingly similar name, marks, logos, designs or artwork as part of Distributor's name, trade name, trademark or artwork without WGT's prior written consent. + + 4. Independent Contractor. Distributor is an independent contractor, not an employee, agent or franchisee of WGT. Distributor will not represent or hold itself out as an employee, agent or franchisee of WGT. Distributor does not have any authority to, and will not, create or assume any license, warranty or other obligation, express or implied, on behalf of WGT. This Agreement will not be interpreted or construed as creating or evidencing any association, joint venture or partnership between the parties or as imposing any partnership or franchisor obligation or liability on either party. + + 5. Delivery. WGT will deliver all Products ordered by Distributor F.O.B. carrier at WGT's shipping location as determined by WGT from time to time, on or before the delivery date set forth in each accepted order. Distributor will pay or reimburse WGT for all shipping charges, premiums for freight insurance, inspection fees, duties, import and export fees, assessments, transportation and other costs incurred by WGT to transport the Product to the shipping destination. + + 6. Resale. Distributor represents that all Products acquired under this Agreement are acquired solely for demonstration, licensing or sale (as applicable) and distribution to resellers or end-users in the Territory without intervening use by Distributor. Distributor acknowledges that the prices set forth in this Agreement have been established in reliance upon such representation and that different prices may apply to any Products acquired for any other purpose. Upon WGT's request, Distributor will furnish WGT evidence of such resale (including but not limited to satisfactory evidence of exemption from retail sales, use or similar taxes that may otherwise apply to transactions under this Agreement). + + + + + + 12 + +7. Software Update Exchange. Once each Quarter during the Term of this Agreement, Distributor shall have the right to exchange any prior version of the Software then in Distributor's inventory for an equivalent quantity of Software containing Updates, subject to Distributor paying WGT an "Exchange Fee" set forth in Exhibit A, for each copy of the Software exchanged hereunder. WGT will invoice Distributor for and Distributor shall pay all Exchange Fees as provided in Exhibit A. WGT will deliver all such exchanged Software Updates in accordance with paragraph 5. Distributor shall return to WGT the copies of the prior versions of the Software exchanged under this paragraph 7 at Distributor's expense. + +8. Records; Audit. During the Term and for twenty-four (24) months thereafter, Distributor will keep and maintain accurate accounts and records regarding the Products sold and Product license keys delivered to resellers and end-users under this Agreement. Upon WGT's request, Distributor will provide access to such records for examination, reproduction, and audit by WGT or its representatives. Any such audit will be conducted at such times and in such a manner so as not to unreasonably interfere with Distributor's normal operations. If any such audit discloses that Distributor is deficient in its compliance with the terms and conditions of this Agreement, Distributor will immediately pay to WGT any deficiency, plus interest at the rate of one and one-half percent (1.5%) per month running from the date originally due until the date paid. Acceptance of any payment by WGT will be without prejudice to WGT's rights to an audit under this paragraph 8 or any other rights or remedies afforded to WGT under any other provision of this Agreement or applicable law. + +9. Taxes. The Guaranteed Minimum Purchases and other amounts specified in this Agreement do not include sales, use or value added taxes, customs fees, duties or other governmental taxes or charges. Distributor will pay all such taxes and charges. In the event Distributor is required under any applicable law to withhold any taxes or duties from the amounts specified under this Agreement, payment of the amounts specified under this Agreement will be net of such withholding taxes or duties. Distributor will pay the amount of all such withholding taxes and duties and supply WGT with information concerning the amount and type of tax withheld and any certificates concerning payments of such withholding taxes. + +10. Interest. Any amount not paid when due will be subject to finance charges at the rate of one and one-half percent (1.5%) per month or the maximum rate permitted by applicable law; whichever is less, determined and compounded on a daily basis from the date due until the date paid. Payment of such finance charges will not excuse or cure Distributor's breach or default for late payment. If WGT retains a collection agency, attorney or other person or entity to collect overdue payments, all collection costs, including but not limited to reasonable attorney's fees, will be payable by Distributor. + +11. Confidentiality. Any information received by Distributor in performance of this Agreement relating to the business affairs, customers, markets, finances, methods, Product, technology, trade secrets or proprietary rights of WGT will be treated as confidential and proprietary information of WGT. Distributor will not disclose such information, unless the information is in the public domain at the time of disclosure through no fault of Distributor or WGT consents to the disclosure in writing. Distributor will disclose such information only to its + + 13 + + employees whose duties justify their need to know such information and who have agreed to copy with Distributor's confidentiality obligations hereunder. + +12. Ownership. The Product involves valuable patent, copyright, trade secret, trade name, trademark and other proprietary rights of WGT. No title to or ownership of such proprietary rights is transferred to Distributor under this Agreement or by use of any trademark, copyright or other proprietary right. WGT reserves all of its copyright, trade secret and other proprietary rights in the Product. Distributor will not infringe, violate or contest and will take appropriate steps and precautions for the protection of, such proprietary rights. + +13. Implementation. Distributor will take at WGT's expense, all action during or after the Term that is reasonably requested by WGT for the implementation of the ownership provisions of this Agreement or to evidence, perfect or protect WGT's ownership of this Product and the proprietary rights associated with ownership of the Product (including, without limitation, the execution, acknowledgment and delivery of instruments of conveyance, patent, copyright, trademark or other proprietary rights registration applications or other documents.) + +14. Warranty; Returns. WGT will permit Distributor and end-users purchasing through resellers to return any defective Product in accordance with the limited warranty contained in the applicable end-user license agreement or limited hardware warranty, as applicable, provided that the Distributor and end-user have compiled with the applicable warranty terms and conditions. In order to receive the remedy provided for hereunder, Distributor shall + + + + + + deliver to WGT a sample of the Product which Distributor finds to be defective in workmanship or materials, or damaged in shipment prior to Distributor assuming the risk of loss or damage , along with a written explanation of the alleged defect within thirty (30) days from the later of Distributor's initial receipt of such Product from WGT or from the delivery of such Product to an end-user. In the event WGT verifies a defect reported by Distributor and such defect affects more than one (1) Product, then at WGT's option, Distributor shall either certify destruction of all defective Products or return all Products which it alleges are defective to WGT. Distributor, reseller or the end user will be responsible for transportation charges for such Product units sent to WGT's facilities for service. Provided that WGT is able to verify the presence of the reported defect in such units, transportation charges, via a mode of transportation chosen by WGT, shall be borne by WGT to return the Product units from WGT's location to the Distributor, reseller or the end-user's location. Upon verification of a defect in one or more Products returned in accordance with the foregoing, or upon Distributor's certification that it has destroyed any defective Product in compliance with WGT's instructions, WGT will, at its option, either issue a credit to Distributor in the amount of the purchase price paid or payable for such Product by Distributor or replace the defective Product with an identical (non-defective) Product. Such remedy will be exclusive and in full satisfaction of Distributor's claims hereunder. WGT does not warrant that the Products are free form all bugs, errors, defects, design flaws or omissions. The warranties in this Agreement apply only to the latest version of each Product made available by WGT to Distributor. Such warranties will not apply to any Product which WGT determines has been subject to misuse, neglect, improper installation, repair, alteration or damage by Distributor, reseller or an end-user or any other individual or entity, or modification by any such individual or entity except with the prior express authorization of WGT. WGT's obligations + + 14 + + under this paragraph will not apply to the extent arising out of any use or combination of the Product with any other products, goods, services or other items furnished by Distributor or anyone other than WGT, or to any modification or change of the Product not made by WGT. The foregoing warranties and rights may be asserted by Distributor only and not by Distributor's resellers. + +15. Infringement. WGT will defend and indemnify Distributor against any judicial proceeding based upon infringement of any U.S. patent or US. copyright by the Product to the extent that such proceeding arises from or in connection with a component of the Product manufactured or developed by WGT and not any third party, provided that Distributor notifies WGT of such proceeding promptly after Distributor receives notice thereof, WGT has control over the defense and settlement of the proceeding, Distributor provides such assistance in the defense and settlement of the proceeding as WGT may reasonably request, and Distributor complies with any settlement or court order made in connection with such proceeding (e.g., as to the future use of any infringing Product). WGT's obligations under this paragraph will not apply to any infringement to the extent arising out of any use or combination of the Product with any other products, goods, services or other items furnished by Distributor or anyone other than WGT or to any modification or change of the Product not made by WGT. + +16. Disclaimer and Release. THE WARRANTIES OF WGT AND THE REMEDIES OF DISTRIBUTOR SET FORTH IN PARGRAPHS 14 AND 15 ARE EXCLUSIVE AND IN SUBSTITUTION FOR, AND DISTRIBUTOR HEREBY WAIVES, RELEASES AND DISCLAIMS. ALL OTHER WARRANTIES, OBLIGATIONS AND LIABILITIES OF WGT AND ALL OTHER RIGHTS, REMEDIES AND CLAIMS OF DISTRIBUTOR, EXPRESS OR IMPLIED, ARISING BY LAW OR OTHERWISE, WITH RESPECT TO ANY DEFECT, DEFICIENCY OR NONCONFORMITY IN ANY PRODUCT OR OTHER ITEM FURNISHED BY OR ON BEHALF OF WGT UNDER THIS AGREEMENT, INCLUDING, BUT NOT LIMITED TO, ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE; IMPLIED WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING OR USEAGE OF TRADE; ANY OBLIGATION, LIABLITY, RIGHT, REMEDY OR CLAIM IN TORT (INCLUDING NEGLIGENCE, WHETHER ACTIVE, PASSIVE OR IMPUTED), PRODUCT LIABLITY, STRICKT LIABILITY OR OTHER THEORY; AND CLAIM OF INFRINGEMENT. + +17. Representations. Distributor will be solely responsible for any representations or warranties Distributor may make to any reseller with respect to the Product or any products, goods, services or other items provided by Distributor. Except to the extent inconsistent with paragraph 15, Distributor releases and will defend, indemnify and hold harmless WGT and its officers, directors, employees, agents and representatives from any and all claims, losses, damages, liens, liabilities, costs and expenses (including, but not limited, reasonable attorneys' fees) incurred or asserted by any reseller or otherwise arising out of or in connection with (a) any misrepresentation, negligent or tortious act or omission, or breach of or default under this Agreement by Distributor or by anyone else acting for or on behalf of Distributor in connection with the promotion, distribution or other dealings with respect to the Product; (b) any reseller or end-user's use of the Product or any products or services of + + 15 + + + + + + Distributor; or (c) any representations and warranties made by Distributor that are inconsistent with or in addition to the warranties made in WGT's end-user license agreement or limited hardware warranty, as applicable, accompanying each copy of the Product. + +18. Limitations of Liability. EXCEPT AS PROVIDED IN PARAGRAPH 15, WGT'S LIABILITY(WHETHER IN CONTRACT, WARRANTY, TORT (INCLUDING NEGLIGENCE WHETHER ACTIVE, PASSIVE, IMPUTED), PRODUCT LIABILITY, STRICT LIABILITY OR OTHER THEORY) UNDER THIS AGREEMENT OR WITH REGARD TO ANY PRODUCT OR OTHER ITEMS FURNISHED UNDER THIS AGREEMENT WILL IN NO EVENT EXCEED THE COMPENSATION PAID TO WGT CONCERNING SUCH PRODUCT UNDER THIS AGREEMENT. + +19. Consequential Damages. IN NO EVENT WILL WGT BE LIABLE, WHETHER IN CONTRACT, WARRANTY, TORT (INCLUDING NEGLIGENCE (WHETHER ACTIVE, PASSIVE OR IMPUTED), PRODUCT LIABILITY, STRICT LIABILITY OR OTHER THEORY), TO DISTRIBUTOR OR TO ANY RESELLER OF DISTRIBUTOR, END-USER OR OTHER PERSON OR ENTITY FOR COST OF COVER OR FOR ANY INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES (INCLUDING WITHOUT LIMITATION DAMAGES FOR LOSS OF PROFIT, BUSINESS OR DATA) ARISING OUT OF ITS PERFORMANCE OR NONPERFORMANCE OF THIS AGREEMENT OR THE USE OF, INABIILTY TO USE OR RESULTS OF USE OF THE PRODUCT. + +20. Compliance with Laws. In performing this Agreement, Distributor will comply with all applicable laws, regulations and other requirements, now or hereafter in effect, of government authorities having jurisdiction. + +21. Export. Without limiting anything else herein, Distributor will not export or re-export, directly or indirectly, the WGT Product to any country to which export or re-export of such items is prohibited by the U.S. Export Administration Act, regulations of the U.S. Department of Commerce and other export controls of the U.S., as they may be amended without first obtaining an appropriate written authorization from the U.S. Office of Export Licensing or its successor. At the time of execution of this Agreement, Distributor is prohibited from exporting or re-exporting , directly or indirectly, the WGT Product to the following countries: Cuba, Libya, North Korea, Iran, Iraq, Ruwanda, Sudan, Syria and the Federal Republic of Yugoslavia (Serbia and Montenegro). Notwithstanding the foregoing list, Distributor is not relieved from its obligations to comply with the foregoing export control laws, as such laws may be amended from time to time. Distributor shall also comply with all other foreign or local governmental export and import control laws, regulations and rules. + +22. Government Approvals. Distributor will obtain at its expense all licenses, permits and other governmental approvals; will provide all notices; and will pay all duties, taxes and other charges required for the license, export, re-export and import of the Product distributed by the Distributor; the license of the Software distributed by Distributor; and the implementation of this Agreement. + + 16 + +23. Nonwaiver. The failure of either party to insist upon or enforce strict performance of any of the provisions of this Agreement or to exercise any rights or remedies under this Agreement will not be construed as a waiver or relinquishment to any extent of such party's right to assert or rely upon any such provisions, rights or remedies in that or any other instance; rather, the same will be and remain in full force and effect. + +24. Assignment. Distributor will not assign all or any part of this Agreement or any of its rights under this Agreement without the prior written consent of WGT. Subject to the foregoing, this Agreement will be fully binding upon, inure to the benefit of and be enforceable by the parties and their respective successors and assigns. + +25. Survival. Paragraphs 1, 2, 3, 13 through 23 and all accrued obligations to pay, together with all other provisions of this Agreement which may reasonably be interpreted or construed as surviving the expiration or termination of the Term, will survive the expiration or termination of the Term. + +26. Notices. Any notice or other communication under this Agreement given by either party to the other will be in writing and delivered either (a) in person or by first-class, registered or certified mail or a recognized overnight delivery service, return receipt requested, postage prepaid or (b) by facsimile and then acknowledged as received by return facsimile by the intended recipient. Notices will be deemed received only upon actual receipt. Notices will be directed to the intended recipient at the address specified below its signature on the signature page of this Agreement. Either party may change its address by giving the other party notice of such change in accordance with this paragraph. + +27. No Conflict. Distributor represents and warrants to WGT that Distributor is free to enter into and perform this Agreement without thereby being in breach of or default under the terms of any other contract, commitment or understanding. + +28. Interpretation. The English language of this Agreement will govern any interpretation of or dispute regarding the terms of this Agreement. Paragraph captions are for convenience of reference and do not alter or limit the terms of this Agreement. The parties hereto have expressly required that the present Agreement and its Exhibits be drawn up on the English language. / Les parties aux presentes ont expressement exige que la presente conventions et se Annexes solent redigees en la langue anglaise. + + + + + +29. Governing Law; Venue. This Agreement will be governed by and interpreted in accordance with the local laws of the State of Washington, U.S.A., without regard to its conflicts of law provisions and not including the provisions of the 1980 U.N. Convention in Contracts for the International Sale of Goods. Distributor irrevocably consents, and submits to the jurisdiction of the Federal and State courts of and located in King County, in the State of Washington, U.S.A. Distributor will not commence or prosecute any suit, claim, or proceeding arising under this Agreement other than in the courts identified in the preceding sentence. Any remedy of WGT set forth in this Agreement is in addition to any other remedy afforded to WGT under this Agreement, any other contract, by law or otherwise. + + 17 + + SUPPORT SERVICES AND PROCEDURES EXHIBIT C + +SUPPORT SERVICES: + +WGT will provide the following training and product support programs to Distributor: + +A. Training. + +Promptly after execution of this Agreement, WGT will conduct a one day technical and sales training program for three (3) of Distributor's employees. Such training will be held at Distributor's facilities. Distributor will be responsible for all costs and expenses incurred by Distributor's personnel in attending, receiving or securing training provided by WGT. + +B. Product Support Services. + +WGT will provide the following product support services to Distributor for the Term of the Agreement: + +1. Telephone Support. Reasonable telephone and electronic mail support for the Software will be available in response to a request from Distributor during WGT's normal business hours (6:00 a.m. to 5:00 p.m., Monday through Friday, Pacific Standard Time), excluding holidays that WGT recognizes. Only Distributor's designated, approved personnel will communicate with WGT's customer support specialists. + +2. Submitting a Service Request. To submit a request for service, Distributor has two service options: + +(a) over the phone, the Distributor will dial WGT's service number as supplied to Distributor by WGT. When a support specialist answers the phone, Distributor will be prepared to discuss the problem with the support specialist. + +(b) via electronic mail as supplied to Distributor by WGT, whereby a service request can be submitted to WGT's electronic mail system. + +In order to submit a service request, either telephonically or electronically, Distributor will employ the following procedures: + +(a) provide a clear description that fully explains what the problem is, and when the problem occurs; + +(b) provide a diagnostic trace, sample code or file of the failure symptom that has been recorded on the user's system; and + +(c) describe the steps taken to resolve the problem. + + 18 + +3. Priority. WGT will respond to problems with the Software in accordance with the following priority schedule: + +Priority One ("P-1") is reserved for critical and severe Software problems which cause the Software to fail or act in a manner which causes the Software to be unusable. + +Priority Two ("P-2") is reserved for Software problems which cause a major component of the Software to become unusable but the overall Software continues to function. + +Priority Three ("P-3") is reserved for Software problems which cause minimal disruption to normal operations of the Software and can be avoided with a simple work-around process. + +Priority Four ("P-4") is reserved for all other problems of lesser severity. + +4. Response Time: Upon receipt of a service request, a WGT customer support specialist will contact Distributor's designated, approved personnel within the following response times to discuss the problem: + +"P-1" - respond within two (2) hours (subject to WGT's normal business hours) of + + + + + +receipt of a P-1 problem and use all commercially reasonable and diligent efforts to create a fix or work-around as soon as practicable considering the nature of the problem. + +"P-2" - respond within four (4) hours (subject to WGT's normal business hours) of receipt of a P-2 problem and use all commercially reasonable and diligent efforts to create a fix or work-around as soon as practicable considering the nature of the problem. + +"P-3" - respond within twenty-four (24) hours (subject to WGT's normal business hours) of receipt of a P-3 problem and use all commercially reasonable efforts to create a fix or work-around which may be included in the next Update. + +"P-4" - respond within five (5) business days (subject to WGT's normal business hours) of receipt of a P-4 problem and target a fix in a future Update. + +WGT will make any corrections available to Distributor via BBS, FTP site or other reasonable means. + + 19 + + DISTRIBUTOR'S FORECAST EXHIBIT D + +Quarter 1: ____________, 19__ through ____________, 19__ $__________ + +Quarter 2: ____________, 19__ through ____________, 19__ $__________ + +Quarter 3: ____________, 19__ through ____________, 19__ $__________ + +Quarter 4: ____________, 19__ through ____________, 19__ $__________ + + 20 \ No newline at end of file diff --git a/full_contract_txt/EbixInc_20010515_10-Q_EX-10.3_4049767_EX-10.3_Co-Branding Agreement.txt b/full_contract_txt/EbixInc_20010515_10-Q_EX-10.3_4049767_EX-10.3_Co-Branding Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..e8989155dc5edd1de5e0559439971d9d35c8f692 --- /dev/null +++ b/full_contract_txt/EbixInc_20010515_10-Q_EX-10.3_4049767_EX-10.3_Co-Branding Agreement.txt @@ -0,0 +1,317 @@ +EXHIBIT 10.3 + + [ABOUT LOGO] + +CO-BRANDING AGREEMENT + +This Agreement (the "Agreement"), dated this 19th day of January, 2001 (the "Effective Date"), is by and between About.com, Inc. ("About"), a Delaware corporation, located at 1440 Broadway, 19th Floor, New York, NY 10018 and ebix.com, Inc. ("ebix"), a Delaware corporation, located at 1900 E.Golf Road, Schaumberg, IL 60173 + +W I T N E S S E T H: + +WHEREAS, About owns and operates an Internet service known as About.com, currently located at the URL HTTP://WWW.ABOUT.COM, at which users may access a variety of content channels and a network of highly-targeted, topic-specific Web sites, and includes any site owned, operated or under the control of About (the "About Network"); + +WHEREAS, ebix is the e-commerce portal for insurance on the Internet offering to consumers and insurance professionals a one-stop site, currently located at http://www.ebix.com for all kinds of insurance content ranging from consumer to business tools to broker to business tools as well as e-commerce functionality; + +WHEREAS, the parties desire to collaborate to create an independent co-branded channel on or accessible though the About Network at which visitors to the About Network may access insurance information, on the terms and conditions hereinafter set forth; + +WHEREAS, ebix desires to receive promotions on the About Network for the parties' Insurance Center and for the ebix Site (hereinafter defined). + +NOW, THEREFORE, in consideration of the agreements and obligations set forth herein and for other good and valuable consideration, the receipt and sufficiency of such is hereby acknowledged, the parties hereto hereby agree as follows: + + 1. DEFINITIONS + + "ABOUT CONTENT" means any and all textual, graphical, audio/visual or other materials created or provided on or behalf of About for use on the Insurance Center (other than the ebix Content), including but not limited to the About Wrapper and the About Look and Feel (hereinafter defined). + + "ABOUT CUSTOMER" means any individual or entity who has registered with ebix either (i) through the registration process on the Insurance Center or (ii) registers with ebix after accessing the ebix Site from a link on the About Network. + + "ABOUT CUSTOMER DATA" means information related specifically to About Customers, including but not limited to: (i) internet addresses and navigational information, including information disclosing the usage of Links within or available through the Insurance Channel; (ii) transactional information, including, but not limited to, names, addresses, billing information, information requested; and (iii) any other information that identifies an individual as an About Customer. + + "ABOUT LOOK AND FEEL" means the distinctive and particular elements of graphics (including the About Marks), design, organization, presentation, layout, user interface, navigation, trade dress and stylistic convention (including the digital implementations thereof) within the About Network and the + +** Confidential treatment has been requested for portions of this document. The redacted material has been filed with the commission pursuant to an application for confidential treatment. + + total appearance and impression substantially formed by the combination, coordination and interaction of these elements. + + "ABOUT MARKS" means the name, tradenames, trademarks, service marks, logos and other distinctive brand marks of About, adopted by About, or used in or relating to About's business from time to time, whether or not in connection with its performance of this Agreement, + + "ABOUT NETWORK"" means the About Site, all Web sites owned and operated solely by About, and those portions of third party Web sites in which About has a right to sell advertisements. + + "ABOUT SITE HOME PAGE" means, with respect to the US version of the About Site, the Web page that is displayed to the About User (hereinafter defined) when the URL WWW.ABOUT.COM (and any evolution thereof) is inputted in the user's browser, whether manually, or by means of a Link. + + "ABOUT GUIDE SITE" means an individual specific topical area within the About Site, which is accessible from within a Channel, as comprised from time to time. + + "ABOUT GUIDE SITE HOME PAGE" means, with respect to any About Guide Site, the Web page that is displayed to the About User when the URL [guidesitename].about.com (and any evolution thereof) is inputted in the user's browser, whether manually or by means of a Link. + +Source: EBIX INC, 10-Q, 5/15/2001 + + + + + + "About Guide Site Sub-Pages" means, with respect to any About Guide Site, all of the Web pages within an About Guide Site other than the About Guide Site Home Page. + + "ABOUT USER" means any individual or entity that accesses the About Network or any About Guide Site. + + "ABOUT USER DATA" means information related specifically to About Users, including but not limited to (i) Internet addresses and navigational information, including information disclosing the usage of Links within or available through an About Guide Site; (ii) transactional information, including names, addresses, billing information, information requested, method of payment; and (iii) any other information that identifies an individual or entity as an About User. + + "ABOUT WRAPPER" means a navigation bar designed by About, in its sole discretion, and approved by ebix, that may, as determined by About, contain the About Look and Feel, the About Marks, and standard About header, footer, tabs, navigational elements, copyright notice and other attributes set forth in EXHIBIT A that reflect the then current design of the About Guide Sites. + + "ADVERTISING IMPRESSION" means an Advertising Placement (hereinafter defined) having been served by About or About's third party advertising server for display on the About Network that redirects an About User to the Insurance Center. + + "ADVERTISING PLACEMENT" is any standard unit of advertising served and displayed by About (or its designated agent) on the About Network, whether or not e-Bix branded, pursuant to Section 5 that: (A) advertises or otherwise promotes (i)ebix, (ii) the Insurance Center, or any combination of the foregoing, and (B) Links to the Insurance Center or the ebix Site. Standard About.com advertising units include, but are not limited to: 468x60 pixel banners, 120x60 pixel buttons; "MarketPlace" text link, 18 characters; "SuperLink" text link, 2 lines at 20 characters per line or 1 wrapped line at 40 characters, plus one link for URL (250 character limit). + + "CONFIDENTIAL INFORMATION" means all non-public information concerning either party, its subsidiaries and affiliates, and their respective officers, agents, employees, consultants, licensors, suppliers and + +** Confidential treatment has been requested for portions of this document. The redacted material has been filed with the commission pursuant to an application for confidential treatment. + + 2 + + customers, including but not limited to business plans, systems configurations, technologies, data files, reports, projections, initiatives, user data and site usage data. + + "CHANNEL": means a collection of topic-specific Guide Sites (Example: Sports, Games) + + "AUTOS CHANNEL HOME PAGE" means the Web page that is displayed to the About user when the URL HTTP://HOME.ABOUT.COM/AUTOS/INDEX.HTM (and any evolution thereof) is inputted in the About Users browser, which is the area of the About Network currently dedicated to the promotion of automobiles generally, and contains Links to the Insurance Center. + + "FAMILY/PARENTING CHANNEL HOME PAGE" means the Web page that is displayed to the About User when the URL HTTP://HOME.ABOUT.COM/FAMILY/INDEX.HTM (and any evolution thereof) is inputted in the About Users browser, which is the area of the About Network dedicated to the promotion of family and parenting generally, and contains Links to the Insurance Center. + + "HEALTH CHANNEL HOME PAGE" means the Web page that is displayed to the About User when the URL HTTP://HOME.ABOUT.COM/HEALTH/INDEX.HTM (and any evolution thereof) is inputted in the About Users browser, which is the area of the About Network dedicated to the promotion of health issues generally, and contains Links to the Insurance Center. + + "MONEY CHANNEL HOME PAGE" means the Web page that is displayed to the About User when the URL HTTP://HOME.ABOUT.COM/MONEY/INDEX.HTM (and any evolution thereof) is inputted in the About Users browser, which is the area of the About Network dedicated to the promotion of money issues generally, and contains Links to the Insurance Center. + + "REAL ESTATE CHANNEL HOME PAGE" means the Web page that is displayed to the About User when the URL HTTP://HOME.ABOUT.COM/REALESTATE/INDEX.HTM (and any evolution thereof) is inputted in the About Users browser, which is the area of the About Network dedicated to the promotion of real estate issues generally, and contains Links to the Insurance Center. + + "EBIX CONTENT" means the Links and information available on the ebix Site and supplied to the Insurance Center pursuant to this Agreement, and any other textual, graphical, audio, visual or other materials created or provided by or on behalf of ebix for use in the Insurance Center. + + "EBIX MARKS" means the name, tradenames, trademarks, service marks, logos and other distinctive brand marks of ebix adopted by ebix or used in or relating to ebix business from time to time, whether or not in connection with its performance of this Agreement, including but not limited to those identified in EXHIBIT B attached hereto. + +Source: EBIX INC, 10-Q, 5/15/2001 + + + + + + "EBIX SITE" means the Internet-based Site maintained and operated by ebix at the URL HTTP://WWW.EBIX.COM. + + "FILLED APPLICATION FORM" means when an About User accesses an application form for buying insurance through a Link from the Insurance Center and completely fills out all fields of the form and clicks the "Submit" button. The sample format of the application form is enclosed in Exhibit J. If ebix wishes to increase the length of the Filled Application Form by more than 10% during the Term, About must approve such change. + + "INSURANCE CENTER" means a channel accessible from the About Site Home Page and other Links or Advertising Placements, created and maintained by ebix hereunder and on which (i) the About Marks and About Wrapper appear, and (ii) the ebix Content is displayed pursuant to this Agreement. + +** Confidential treatment has been requested for portions of this document. The redacted material has been filed with the commission pursuant to an application for confidential treatment. + + 3 + + "LAUNCH DATE" means the date on which the ebix Content is first displayed to the public on the Insurance Center. + + "LINK" means a hyperlink or so called "hot link" in graphical and/or textual format located on any Site which takes a user directly to another Site. + + "MARKS" means the About Marks and the ebix Marks collectively. + + "PARTNERSHIP BOX" means an area within an About Web page containing search functionality by which an About User shall have the ability to search for insurance information and access the Insurance Center , which shall appear in substantially the form and manner as set forth on EXHIBIT D. + + "PROMOTIONAL IMPRESSIONS" means an Advertising Placement having been served by About or About's third party advertising server for display on the About Network that redirects an About User to the Insurance Center + + "QUARTER" shall mean any increment of three (3) months. The first of these Quarters, which do not necessarily conform to calendar quarters, shall commence on the first day of the month following the Launch Date and are to be measured in consecutive three (3) month increments following thereafter. + + "SITE" means any interactive site or area, including by way of example and without limitation, a site on the World Wide Web portion of the Internet. + +2. TERM + +2.1 The term of this Agreement (the "Term") shall commence on the date hereof (the "Effective Date") and shall expire upon delivery of [**] to ebix, but in no way shall this Agreement extend any later than thirty (30) months from the Effective Date regardless of the number Filled Application Forms delivered to ebix. About will make commercially reasonable efforts to achieve that number in twelve (12) months or less from the Effective Date. + +3. DEVELOPMENT, OPERATION AND ADMINISTRATION OF INSURANCE CENTER; EXCLUSIVITY + +3.1 Pursuant to the terms and conditions of this Agreement, About shall, create and maintain Links within the About Network to the Insurance Center and to the ebix Site, which Links shall be accessible to About Users by means of (i) a Link on the About Site Home Page, substantially as depicted in EXHIBIT C, (ii) a Link on the Auto Channel Home Page, Family/Parenting Channel Home Page, Health Channel Home Page, Money Channel Home Page, and Real Estate Channel Home Page, substantially as depicted in EXHIBIT D; (iii) within fifty percent (50%) of the Partnership Box on each of the following About Guide Site Home Pages and all the subsequent Guide Sites Sub-Pages until the termination of this agreement as detailed in section 2.1: Personal Insurance, Senior Health, Retirement Planning, Consumer Information/Advocacy, Auto Repair, Vintage Cars, Motorcycles, 4 Wheel Drive/SUVs, Trucks, Cars, Power Boating, and Sailing for as long as such Guide Sites are in existence, substantially as depicted in EXHIBIT E, ; and (iv) Links from the Advertising Placements, as set forth in the greater detail in Section 4. Notwithstanding Section 7.1, all the above links on the About.com Home Page and Channels listed above, in addition to the Partnership Box integration on the Guide Site Home Pages and all the subsequent Guide Site Sub-Pages shall be maintained by about, until the termination of this agreement as detailed in Section 2.1 + +3.2 The Insurance Center shall be hosted solely by ebix and contained in an About Wrapper and ebix shall, during the Term, provide site maintenance services relative to the Insurance Center substantially as provided for the ebix Site from time to time, subject to the uptime requirements as set forth in Section 13.4 [TERMINATION AND SURVIVAL]. + +** Confidential treatment has been requested for portions of this document. The redacted material has been filed with the commission pursuant to an application for confidential treatment. + + 4 + +3.3 During the Term, ebix shall be the exclusive integrated online insurance provider in the Channels and Guide Sites listed in Section 3.1 [DEVELOPMENT, OPERATION AND ADMINISTRATIO...] above. [**] + + 4. ADVERTISING IMPRESSIONS; INTEGRATION IMPRESSIONS; APPLICATIONS + +Source: EBIX INC, 10-Q, 5/15/2001 + + + + + +4.1 Commencing on the Effective Date and continuing until March 15, 2001, About shall deliver to ebix [**] Advertising Impressions in the form and manner set forth on EXHIBIT G; About will not begin to deliver the Impressions as set forth in Exhibit G until the Insurance Center is live and fully functional. + +4.2 Commencing on or about March 20, 2001 and continuing throughout the Term, About shall deliver to ebix the greater of [**] Promotional Impressions, or the number of impressions as calculated according to the terms set forth in Section 4.5 [ADVERTISING IMPRESSIONS; INTEGRATION IMP...], in the form and manner as set forth on EXHIBIT H. + +4.3 If this Agreement is terminated by either party pursuant to Sections 13.1 [TERMINATION AND SURVIVAL], 13.2 [TERMINATION AND SURVIVAL] or 13.3 [TERMINATION AND SURVIVAL] prior to the expiration of the Term of this Agreement, About shall be obligated to deliver only a pro-rated number of impressions and Filled application forms to ebix + +4.4 Pursuant to section 2.1, About shall use commercially reasonable efforts to generate at least [**] during the Term and may use any and all advertising units in order to reach this goal. + +4.5 Additionally, About shall use commercially reasonable efforts to deliver [**] Filled Application Forms per Quarter. If, however, at the end of a Quarter, About has not generated the applicable Quarterly Filled Application goals as set forth on EXHIBIT I, About shall deliver additional advertising impressions, in the amounts also set forth on EXHIBIT I. + +4.6 Notwithstanding Section 7.1, pursuant to sections 2.1 and 3.1, commencing on or about February 15, 2001 and continuing through out the Term, About shall maintain all the Links and Partnership Box integration as set forth in section 3.1 + +5. PAYMENTS AND REPORTS + +5.1 ebix shall pay to About, [**] in consideration for the Advertising Impressions as set forth in Section 4.1 [ADVERTISING IMPRESSIONS; INTEGRATION IMP...], herein, no later than seven (7) business days from the Effective Date , which shall be paid to About via wire transfer, pursuant to the following instructions:[**] + +5.2 In addition, ebix agrees to pay to About a fee of [**] for [**] and [**] from [**] up to [**] (the "Application Fees"). The payment of the Application Fees are to be due within 30 days after the end of the month in which the Application Fees were generated. Such payments shall be accompanied by a report stating the number of Filled Application Forms generated during the previous month, as well as the amount due to About. Ebix will track the number of Filled Application Forms generated by About Customers. + +** Confidential treatment has been requested for portions of this document. The redacted material has been filed with the commission pursuant to an application for confidential treatment. + + 5 + +5.3 If any of the payments are not received on or before the appropriate dates as described above, About shall have the right to charge ebix interest on the overdue amount at the rate of 6% per year,, calculated from 30 days after the end of the month for which payment is made until the date of ebix's payment of such amount, which interest shall be in addition to such fees due and owing About. In addition, About shall be entitled to its reasonable costs and expenses (including attorneys' fees) in connection with any action to collect fees under or to otherwise enforce this Agreement. + +5.4 About shall have the right to examine, or to have examined by a representative of About, ebix's books and records to verify the accuracy of payments made to About for a maximum period of last 6 months preceding a written notice of About, pursuant to this Agreement. About shall provide ebix with at least thirty (30) days' prior notice of an audit and such audit shall be conducted at ebix's offices for a maximum period of two business days, during regular business hours, subject to ebix's cooperation. If the audit reveals that ebix has paid About less than the sum to which About is entitled, ebix agrees to pay About.com the additional sums due. If such sums exceed five percent (5%) of the total monies owed in connection with such audited amount to About ,ebix will pay for all costs reasonably incurred by About in connection with the audit. + +6. LICENSE TO USE MARKS + +6.1 Subject to the terms and conditions of this Agreement, ebix hereby grants to About a limited, non-transferable, fully-paid, worldwide, non-exclusive right and license to use, reproduce, adapt (but only to pursuant to its rights under this Agreement), incorporate, integrate and distribute the ebix Marks and ebix Content, during the Term, solely as necessary to perform its obligations under this Agreement. + + . 6.2 Each party retains all right, title and interest in and to its respective Marks and nothing contained herein shall confer in the other party any right, title or interest in or to such Marks. Any use by the party (the "Licensee") of the other party's (the "Licensor") Marks shall conform with any usage guidelines or instructions that the Licensor may provide from time to time, and Licensee shall promptly remedy any failure to conform with such guidelines as are communicated to it by Licensor. Anything contained herein to the contrary notwithstanding, the Licensee shall, prior to any use of Licensor's Marks pursuant to this Agreement, submit to Licensor a sample of the proposed use thereof and obtain from the Licensor + +Source: EBIX INC, 10-Q, 5/15/2001 + + + + + + approval of such sample. All goodwill associated with the use of Licensor's Marks shall inure to the benefit of such Licensor. + +7. RIGHT TO REDESIGN AND RE-INDEX + + 7.1 About may, at any time, revise the design, Look and Feel, and layout of the About Network. If, in About's reasonable opinion, any such revision would result in the need for ebix to modify its Links to and/or from the About Network or any of the Channels or Guide Sites mentioned herein, and as applicable, About shall provide ebix with a written notice stating the need for such revision, and ebix shall, within not more than thirty (30) days from the date of such notice, modify its Links. About shall have the right to approve in advance such modification. + +8. CREDIT + +8.1 eBix shall receive all page view, impression, reach duration and frequency credit resulting from About Users accessing the Insurance Center. + +9. OWNERSHIP + +9.1 eBix shall own and retain all right, title and interest in and to any About Customer data generated on the Insurance Center, and nothing in this Agreement shall confer in About any right, title or interest in + +** Confidential treatment has been requested for portions of this document. The redacted material has been filed with the commission pursuant to an application for confidential treatment. + + 6 + + the About Customer data (except to the extent that it is duplicative of About User data and as hereinafter provided). Upon request by About, ebix shall provide About with About Customer Data in the aggregated form, which aggregated form shall be jointly owned by ebix and About. During the Term and any time thereafter, eBix shall not sell, lease, transfer, disseminate, display or otherwise disclose any About User data to any third party or otherwise use the same for any reason other than as set forth herein. However, ebix shall not be prohibited from selling, leasing, transferring, disseminating, displaying or otherwise disclosing any About Customer Data, as defined in Section 1 above. + +9.2 About shall own and retain all right, title and interest in and to any About User data generated within the About Network (other than the Insurance Center), and nothing in this Agreement shall confer in eBix any right, title or interest in or to the About User Data (other than the Insurance Center and except to the extent that it is duplicative of About Customer Data). + +9.2 Other than set forth herein, all intellectual and proprietary information, supplied or developed by either party shall be and remain the sole and exclusive property of the party who supplied and developed same. + +10. REPRESENTATIONS, WARRANTIES AND COVENANTS + +10.1 eBix represents, warrants and covenants that (i) the execution, delivery and performance by ebix of this Agreement and the consummation by it of the transactions contemplated hereby will not conflict with or violate any provision of law, rule or regulation to which ebix is subject, or any agreement or other instrument applicable to ebix or binding upon ebix, its assets or properties; (ii)ebix is the sole and exclusive owner of the ebix Marks and the ebix Content and ebix has the unqualified right and power to render the performances and activities contemplated under the terms of this Agreement, included but not limited to the right to publish all materials, software, content, products or services appearing on and accessible to About Users linking from the Insurance Center to the About Network or provided by About for use on the Insurance Center; (iii) the ebix Marks and other content provided by ebix hereunder, including but not limited to the ebix Content, or appearing on and accessible to About Users linking from the Insurance Center to the About Network , will not infringe upon or violate the copyright, trademark, patent, or other intellectual property rights or interests of any third party or misappropriate the trade secrets of any third party, constitute false advertising, unfair competition, defamation, invasion of privacy or publicity rights, moral or otherwise, or violate any anti-discrimination law or regulation; (iv)ebix will take commercially reasonable precautions to insure that the Insurance Center and the ebix Site are and will continue to be free of any software disabling devices , including, but not limited to, time bombs, viruses or devices of a similar nature, or any defamatory, slanderous, libelous, illegal, pornographic or obscene material or services; and (v)ebix shall not (a) hold itself out as having any proprietary rights with respect to the About Marks or (b) make any claim to ownership rights in the About Marks or challenge the About Marks or the registration thereof, or (c) attempt to register or cause to be registered the About Marks or create or use or attempt to register or cause to be registered any marks or trade names that are confusingly similar to the About Marks, or (d) use the About Marks hereunder without About's approval of such use. + +10.2 About represents, warrants and covenants that (i) the execution, delivery and performance by About of this Agreement and the consummation by it of the transactions contemplated hereby will not conflict with or violate any provision of law, rule or regulation to which About is subject, or any agreement or other instrument applicable to About or binding upon About, its assets or properties; (ii) About is the sole and exclusive owner of the About Marks and About has the unqualified right and power to render the performances and activities contemplated under the terms of this Agreement, included but not limited to the right to publish all materials, software, content, products or services appearing on and accessible to + +Source: EBIX INC, 10-Q, 5/15/2001 + + + + + + About Users linking from the Insurance Center to the About Network + +** Confidential treatment has been requested for portions of this document. The redacted material has been filed with the commission pursuant to an application for confidential treatment. + + 7 + + or provided by About for use on the Insurance Center; (iii) the About Marks and other content provided by About hereunder, or appearing on and accessible to About Users linking from the Insurance Center to the About Network , will not infringe upon or violate the copyright, trademark, patent, or other intellectual property rights or interests of any third party or misappropriate the trade secrets of any third party, constitute false advertising, unfair competition, defamation, invasion of privacy or publicity rights, moral or otherwise, or violate any anti-discrimination law or regulation; (iv) About will take commercially reasonable precautions to insure that the About Network and the About Network are and will continue to be free of any software disabling devices , including, but not limited to, time bombs, viruses or devices of a similar nature; and (v) About shall not (a) hold itself out as having any proprietary rights with respect to the ebix Marks or (b) make any claim to ownership rights in the ebix Marks or challenge the ebix Marks or the registration thereof, or (c) attempt to register or cause to be registered the ebix Marks or create or use or attempt to register or cause to be registered any marks or trade names that are confusingly similar to the ebix Marks, or (d) use the ebix Marks hereunder without ebix's approval of such use. + +11. INDEMNIFICATION + +11.1 eBix will defend, indemnify and hold About, its officers, directors, agents, employees and consultants (collectively the "About Indemnified Parties") harmless from and against any third party claims against About for all liabilities, claims, actions, damages, losses, settlements, and costs, and expenses (including, without limitation reasonable attorneys' fees) relating to or arising out of ebix's breach of its warranties, representations, responsibilities or covenants hereunder. + +11.2 About will defend, indemnify and hold ebix, its officers, directors, agents, employees and consultants (collectively the "eBix Indemnified Parties") harmless from and against any third party claims against ebix for all liabilities, claims, actions, damages, losses, settlements, and costs, and expenses (including, without limitation reasonable attorneys' fees) relating to or arising out of About's breach of its warranties, representations, responsibilities or covenants hereunder. + +11.3 The indemnified party agrees to (i) provide prompt written notice (in accordance with Section 15.7 [MISCELLANEOUS] below) of any such claim to the indemnifying party, (ii) allow the indemnifying party to control and conduct the defense of the claim and settlement negotiations, including but not limited to, providing the indemnifying party with all reasonably available information, assistance, authority, and cooperation reasonably required to enable the indemnifying party to defend and settle the claim. No settlement or compromise hereunder shall be made which binds the indemnified party without the express written consent of the indemnified party. + +12.4 Each party shall promptly inform the other party of any event or circumstance, and provide all information pertaining thereto, related to or arising from this Agreement which could lead to a claim or demand against the other party by any third party with respect to any content supplied hereunder for use on the Insurance Center. + +12. CONFIDENTIALITY + +12.1 The parties may from time to time receive from one another certain information that is proprietary or confidential to the disclosing party, including the About Confidential Information and the ebix Confidential Information (collectively, the "Confidential Information"). The recipient of such Confidential Information shall hold such Confidential Information in confidence, shall not use it except to further its relationship with the other party under this Agreement, and shall not publish or disclose it to third parties unless authorized in writing by the disclosing party. These restrictions shall not apply to any Confidential Information: (i) after it has become generally available to the public without of breach of this Agreement by the receiving party; (ii) is rightfully in the receiving party's possession before disclosure to it by the disclosing party; (iii) is independently developed by the + +** Confidential treatment has been requested for portions of this document. The redacted material has been filed with the commission pursuant to an application for confidential treatment. + + 8 + + receiving party; (iv) rightfully received the receiving party from a third party without confidentiality; or (v) is required to be disclosed under operation of law or administrative process. Upon expiration or termination of this Agreement for any reason, each party will promptly and at the direction of the other party, either destroy or return to the disclosing party, and will not take or use, all items of any nature which belong to the disclosing party and all records (in any form, format or medium) containing or relating to Confidential Information. The parties' obligations under this Section 12 shall survive the termination or non-renewal of this Agreement. + +Source: EBIX INC, 10-Q, 5/15/2001 + + + + + +13. TERMINATION AND SURVIVAL + +13.1 eBix may terminate this Agreement, [**] upon [**] to About; provided, however, that the termination is no earlier than [**] of the Effective Date of this Agreement. + +13.2 Either party may terminate this Agreement if the other (i) fails to make any payment required to be made by it hereunder for more than twenty (20) business days after such party shall have received notice from the other party of the failure of payment thereof, or (ii) commits a material breach of this Agreement that is not cured within thirty (30) calendar days after receipt of written notice of the breach. + +13.3 Either party may terminate immediately upon written notice if the other party (i) ceases to function as a going concern or to conduct operations in the normal course of business; (ii) has a petition filed against it under any state or federal bankruptcy law which petition has not been dismissed or set aside within ninety (90) days of its filing, or if (a) About sells all or substantially all of the assets of such party or any event or series of event whereby any entity acquires beneficial ownership of the capital stock of such party representing fifty percent (50%) of the voting stock of such party provided however, that the acquisition of About by Primedia shall not be grounds for the termination of this Agreement; or (b) ebix becomes acquired by, merged into or is under the control of any of the following parties, About may terminate this Agreement immediately upon by providing ebix written notice: AOL; Yahoo; Lycos/Terra; NBC; CBS; Looksmart; InfoSpace; CMGI; AltaVista; Disney; Microsoft; CNET; Excite@Home; AskJeeves; GOTO; Doubleclick; or Lifeminders. + +13.4 The ebix Insurance Center shall be operational and fully functionally at least ninety nine percent (99.0%) of the time during the Term, without taking into account scheduled downtime and maintenance which shall not exceed in the aggregate, one (1) hour in any one (1) month period. In the event of any downtime and/or maintenance in excess of the aforementioned amount, such shall be deemed a material breach and ebix shall have twenty four (24) hours in which to cure such breach. If such breach is not cured to About's reasonable satisfaction, About may remove the ebix Links after informing either the President, CFO or CTO of ebix until About reasonably determines that the ebix Web Site is operational and fully functional. + +13.6 Upon termination of this Agreement, any and all licenses granted by one party to the other hereunder shall immediately terminate, and the parties shall immediately cease the use of the other party's Marks, material or content provided in connection with this Agreement, and shall remove all Links to and from one another's Sites, and About shall remove all Links between the About Network and the Insurance Center. Each party shall return the Confidential Information of the other party. + +13.7 The rights and obligations of the parties hereto under Sections 5.3 [PAYMENTS AND REPORTS], 5.4 [PAYMENTS AND REPORTS], 9, 10, 11, 12, 14, and 15 shall survive the expiration or termination of this Agreement and continue in full force and effect notwithstanding such expiration or termination. + +14. LIMITATION OF LIABILITY + +** Confidential treatment has been requested for portions of this document. The redacted material has been filed with the commission pursuant to an application for confidential treatment. + + 9 + +14.1 NEITHER PARTY SHALL HAVE ANY LIABILITY FOR ANY INDIRECT, SPECIAL, PUNITIVE OR CONSEQUENTIAL DAMAGES INCLUDING, WITHOUT THE LIMITATION, LOSS OF PROFIT OR BUSINESS OPPORTUNITIES, WHETHER OR NOT THE PARTY WAS ADVISED OF THE POSSIBILTY OF SUCH. EXCEPT AS EXPRESSLY SET FORTH HEREIN, NEITHER PARTY MAKES ANY, AND EACH PARTY HEREBY SPECIFICALLY DISCLAIMS ANY REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, REGARDING THE TOOLS AND SERVICES CONTEMPLATED BY THIS AGREEMENT, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTIBILITY OR FITNESS FOR A PARTICULAR PURPOSE AND IMPLIED WARRANTIES ARISING FROM COURSE OF DEALING OR COURSE OF PERFORMANCE. + +15. MISCELLANEOUS + +15.1 Each party is an independent contractor and not an employee of the other party. Each party understands and agrees that (i) its employees are not entitled to any benefits provided to any employee of the other party and (ii) it is solely responsible for reporting as income any compensation received hereunder. Each party is responsible for compliance with all federal, state and local laws, regulations and orders in connection with taxes, unemployment insurance, social security, worker's compensation, disability or like matters. + +15.2 This constitutes the entire agreement between the parties with respect to the subject matter hereof, and no statement, promise, or inducements made by either party or agent of either party that is not contained in this written Agreement shall be valid or binding. This Agreement may not be modified or altered except in writing signed by both parties. + +15.3 In the event any provision of this Agreement is held to be unenforceable, such provision will be reformed only to the extent necessary to make it enforceable, and the other provisions of this Agreement will remain in full force and effect. + +15.4 This Agreement will be governed by the laws of the state where a suit is properly filed under the terms of this paragraph, being either Illinois or New York, and without giving effect to conflict of law principles. Litigation initiated by ebix shall be filed in New York, whereas litigation initiated by About shall be filed in Illinois. Both parties submit to personal jurisdiction of Illinois or New York, to effectuate the terms of this paragraph, and further + +Source: EBIX INC, 10-Q, 5/15/2001 + + + + + +agree that any cause of action arising under this Agreement shall be brought in state or federal courts of the States of New York or Illinois, counties of New York or Cook, respectively. + +15.5 Neither party will be liable for, or will be considered to be in breach of or default under this Agreement on account of, any delay or failure to perform as required by this Agreement as a result of any causes or conditions that are beyond such party's reasonable control and that such party is unable to overcome through the exercise of commercially reasonable diligence (a "force majeure event"). If any force majeure event occurs, the affected party will give prompt written notice to the other party and will use commercially reasonable efforts to minimize the impact of the event. + +15.6 Neither party may assign the Agreement without the written consent of the other party, which consent shall not be unreasonably withheld or delayed, except that either party may assign the Agreement without obtaining the consent of the other party to an affiliate or successor by way of purchase, merger, consolidation or similar transaction, subject to the requirement that the Agreement shall be binding and enforceable against any successor or assign. + +15.7 Any notice under this Agreement will be in writing and delivered by personal delivery, overnight courier, or certified or registered mail, return receipt requested, and will be deemed given upon personal delivery, one (1) day after deposit with an overnight courier, three (3) days after deposit in the mail, or upon confirmation of receipt of facsimile. Notices sent to About at the address listed above will be addressed to President, Corporate Development and notices sent to ebix at the address listed will be addressed to Richard + +** Confidential treatment has been requested for portions of this document. The redacted material has been filed with the commission pursuant to an application for confidential treatment. + + 10 + +Baum, 1900 E.Golf Road, Suite 1200, Schuamberg, IL 60173 and each will be sent to the appropriate address set forth above or such other address as that party may specify in writing pursuant to this Section. + +Agreed and Accepted: + +EBIX.COM, INC. ABOUT.COM, INC. + +Name: Name: ------------------------------- ------------------------------- + +Title: Title: ------------------------------ ------------------------------ + +Signature: Signature: -------------------------- -------------------------- + +Date: Date: ------------------------------- ------------------------------- + +** Confidential treatment has been requested for portions of this document. The redacted material has been filed with the commission pursuant to an application for confidential treatment. + + 11 + +Source: EBIX INC, 10-Q, 5/15/2001 \ No newline at end of file diff --git a/full_contract_txt/EcoScienceSolutionsInc_20171117_8-K_EX-10.1_10956472_EX-10.1_Endorsement Agreement.txt b/full_contract_txt/EcoScienceSolutionsInc_20171117_8-K_EX-10.1_10956472_EX-10.1_Endorsement Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..fcdf908320478c1175437bc218d170714b099578 --- /dev/null +++ b/full_contract_txt/EcoScienceSolutionsInc_20171117_8-K_EX-10.1_10956472_EX-10.1_Endorsement Agreement.txt @@ -0,0 +1,169 @@ +ENDORSEMENT AGREEMENT + +THIS ENDORSEMENT AGREEMENT (the "Agreement") is dated as of this 14th day of November 2017 ("Effective Date"), by and between Eco Science Solutions, Inc. ("ESSI"), a Nevada corporation, and Stephen Marley ("Talent"), an individual. + +AGREEMENT + +1. Engagement. ESSI engages Talent and Talent hereby accepts the engagement to act as a Spokesperson for ESSI, and to provide his endorsement of all ESSI products and services, domestically and worldwide. + +2. Term of Agreement. The term of this Agreement shall be for one (1) year commencing on the Effective Date and automatically renewing annually thereafter, unless either party provides a thirty-day notice of written termination one to the other ("Term"). + +3. Grant. During the Term and subject to the limitations set forth in Paragraphs 9 and 10, ESSI shall have the right to use the name, image, likeness, characterization, visual and audio representation of Talent ("Talent Attributes") in connection with the ESSI product suite, in the venue(s) as follows: + +A. Promotional Territories ("Territories") shall include various online, outdoor, radio and television promotional spots (specific promotional spots and content specifics to be mutually agreed upon) promoting the ESSI product suite ("Commercial Placements") aired in various venues as determined to best suit the needed promotion of ESSI products; + +B. On ESSI's downloaded apps (UseHerbo, Herbo Wallet, FitRx) and websites (www.useherbo.com; www.eccossi.com) ("Websites"), of which new ESSI owns and operates downloadable apps and websites may be added to this list at the will of ESSI; and + +C. ESSI Natural Supplementation Products. + +D. In ESSI product-related press releases (of which only ESSI may produce and publish). + +In connection with any ESSI's usage of Talent Attributes as outlined above in Paragraphs 3(A)-(D) that are applicable to Dietary Supplements, ESSI will feature the following disclaimer in close proximity to said usage: "STEPHEN MARLEY IS NOT A MEDICAL AUTHORITY. THESE STATEMENTS HAVE NOT BEEN EVALUATED BY THE FOOD AND DRUG ADMINISTRATION. THIS PRODUCT IS NOT INTENDED TO DIAGNOSE, TREAT, CURE OR PREVENT ANY DISEASE." + +1 + +Source: ECO SCIENCE SOLUTIONS, INC., 8-K, 11/17/2017 + + + + + +4. Duties of Talent and Rights of ESSI. During the Term and subject to the limitations set forth in Paragraphs 9 and 10, Talent agrees to provide ESSI with the following: + +A. Upon request by ESSI, two (2) production sessions to be used for the production of the various medias to be used in Commercial placements ("Production Sessions"); the location, date and time of the Production Sessions shall be mutually agreed upon by Talent and ESSI. In the event any Production Session exceeds eight (8) hours in duration ESSI and Talent will negotiate in good faith additional compensation to Talent for time in excess of eight (8) hours. + +B. Talent will serve as a Special Advisor to ESSI, whose sole responsibility is to be listed as a brand ambassador on the Websites and/or ESSI related press releases. With respect to Talent's position as Special Advisory, Talent will not be responsible for any additional services such as attending meetings, corporate functions, etc. + +C. ESSI may request an additional production session(s), or a media tour or personal appearance(s) of Talent for an additional fee to be mutually agreed upon by the parties. + +5. Consideration. As consideration for Talent's services under this Agreement, ESSI agrees as follows: + +A. Equity Payment: ESSI will provide Talent with one-million (1,000,000) shares of restricted common stock issued within ten business days of execution of this Agreement. B. Cash Payments: + +(1) ESSI will provide monthly payment of Ten Thousand and NO/100 Dollars ($10,000) made payable to Talent for Talent's social communications with its followers on popular social media venues, including, but not limited to, Facebook, Instagram, Twitter and Snap Chat where Talent may communicate about the ESSI product suite ("Social Communication"). The monthly Social Communication schedule will be mutually agreed upon by Talent and ESSI one month in advance of the actual month of communications. Once the monthly Social Communication schedule is set, the volume of Posts, Tweets and Snaps will determine the total amount of monthly compensation available to Talent. ESSI's Social Media Manager will keep track of Talent's activity pursuant to ESSI's Company quarter to determine the amount of Cash Payment due for the quarter. + +(a) Payments shall be made to Talent in the following manner, and to the following address: + +6. Expenses. If applicable, ESSI agrees to provide and pay for the expenses related to Talent's services provided in Paragraph 4, which shall include but not be limited to the following: + +A. First-class airfare, first-class ground transportation, hotel accommodations, and meals for Talent; and + +2 + +Source: ECO SCIENCE SOLUTIONS, INC., 8-K, 11/17/2017 + + + + + +B. First-class airfare, ground transportation and hotel accommodations for one (1) representative. + +7. Union Dues and Fees. Talent represents that the services hereunder shall not be subject to SAG, AFTRA or any other entertainment guild contract of which Talent is now, has been, or will be in the future, bound to and that this Agreement is not in conflict with any contract Talent is bound. + +8. Exclusivity. Talent represents and warrants that during the Term and in the Territories, Talent will not endorse or make any appearances or advertisements on behalf of any other product which is directly competitive to ESSI's products. + +9.Review, Approval, and Ownership of Commercial Placements. All ESSI uses of Talent Attributes in connection with the Commercial Placements and/or press releases shall be subject to the prior written approval of Talent. Said written approval must be given within five (5) business days of Talent's receipt or said usage shall be deemed unapproved. Any such usage featuring Talent in the Commercial Placements and/or press releases shall be and remain the property of ESSI; however, ESSI shall have the right to use said Commercial Placements and/or press releases solely as outlined in Paragraph 3 and only during the Term. Talent may use said materials in whole or in part solely for the purpose of presenting Talent's work in Talent's personal portfolio, website or otherwise and/or on Talent's agent's website. Such usage may not be sold or transferred. + +9.1 Press Releases. Talent may not, at any time, individually, or through his agent, manager, family, friends, or associates publish a press release relative to ESSI without first obtaining the written consent and approval of ESSI's management and counsel. In the event Talent does publish any such press release, this Agreement shall be null and void and any outstanding balance owed to Talent shall be voided and the 1,000,000 Shares of ESSI common stock issued to Talent returned to the Company. + +10. Termination for Cause + +A. ESSI shall have the right to terminate this Agreement upon ten (10) days prior written notice to Talent in the event Talent fails to perform the duties set forth in Paragraph 4 hereof or breaches any other covenant or agreement set forth herein and fails to cure same (if curable) within seven (7) days of receipt of written notice. Such termination shall relieve ESSI of its obligation to provide any further consideration pursuant to this Agreement. B. Talent shall have the right to terminate this Agreement upon ten (10) days prior written notice to ESSI in the event of the occurrence of any of the following: (1) ESSI adjudicates as insolvent or declares bankruptcy; or (2) ESSI fails to provide consideration due pursuant to this Agreement, within ten (10) days following the date such consideration is due hereunder, provided that ESSI is notified in writing of such non-payment by Talent and such payment by ESSI is not made within three (3) days following such notification; or (3) ESSI breaches any representation, warranty, covenant or agreement set forth herein and fails to cure same (if curable) within seven (7) days of receipt of written notice. Furthermore, ESSI agrees that such termination shall not relieve it of its obligation to provide consideration as contemplated hereunder. Talent shall not have waived any of its rights at law or in equity by exercising any provision of this paragraph. + +C. ESSI's rights to the use of Talent and Talent's Attributes as set forth in Paragraphs 3 and 4 shall end immediately should this Agreement be terminated pursuant to Paragraph 10(A) or Paragraph 10(B) above. + +10. Notices. All notices provided for herein shall be given in writing by hand delivery, courier service, or by certified mail return receipt requested to the addresses of the parties set forth as follows (unless change of address by notice to the other party is given as provided in this paragraph 10): + +3 + +Source: ECO SCIENCE SOLUTIONS, INC., 8-K, 11/17/2017 + + + + + + If to Talent: + +Mr. Stephen Marley 16115 SW 117t h Ave Suite 21-A Miami, Florida 33177 If to ESSI: Mr. Jeffery Taylor, President 1135 Makawao Avenue, Suite 103-188 Makawao, Hawaii 96768 with a copy to: Sharon Mitchell, Corporate Counsel for ESSI + +Sharon D. Mitchell SD Mitchell & Associates, PLC 829 Harcourt Rd. Grosse Pointe Park, Michigan 48230 11. Licensing. Nothing contained herein shall be construed to convey to ESSI any right to use the names, trademarks, service marks, symbols, logos, emblems colors, etc. ("Marks"), of the Bob Marley Family Foundation, or any other organization with which the Talent is or has been associated. All rights to the use of such Marks must be acquired from the appropriate rights holder, and if such Marks are used by ESSI then, in such event ESSI (a) shall provide Talent in advance with satisfactory evidence of ESSI's right to use such Marks and (b) agree to indemnify, protect and hold Talent harmless from and against any and all claims, damages and/or losses which may arise from ESSI's use of such Marks. + +12. Representations and Warranties of ESSI. Talent relies upon ESSI's skill and judgment and also upon the following representations of ESSI which shall be in effect throughout the term of this Agreement: + +A. ESSI's products are, and will remain, merchantable and fit for the purpose for which they are intended, and + +B. ESSI's products do, and will, conform at all times to all applicable federal, state and local laws, rules, regulations, ordinances, and other enactments and industry standards, including, but not limited to, those relating to product safety. + +4 + +Source: ECO SCIENCE SOLUTIONS, INC., 8-K, 11/17/2017 + + + + + +13. Indemnity. ESSI shall be solely responsible for all liability arising out of production, distribution and sale of its product(s). ESSI hereby agrees to indemnify, defend and hold harmless Talent, his agents, representatives and employees (referred to collectively as "Talent Indemnities") from and against any and all claims, actions, causes of action, damages, injuries, expenses, liabilities (joint and several), penalties fines, attorney fees, court costs, and any other expenses incurred by Talent Indemnities arising out of (1) breach by ESSI of any of the terms, representations or warranties made by ESSI in this Agreement; or (2) ESSI product liability or trademark patent or other proprietary right infringement; or (3) errors, omissions, fraudulent or negligent acts by ESSI, its employees, agents or subcontractors in connection with (i) any advertising featuring Talent; (ii) with the performance of ESSI's duties and obligations under this Agreement; (iii) with the production, distribution, promotion, marketing and sales of products including related product packaging; and/or (iv) with the operation and management of its production and distribution facilities, however caused. + +13.1 ESSI shall not be obligated to indemnify Talent with respect to damages which are the result of the active negligence or willful misconduct of Talent. 14. Relationship of Parties. Nothing contained in this Agreement shall be deemed or construed to place the parties in the relationship of partners, joint venture participants, principal-agents, or employer-employee, it being understood that the parties hereto are and will remain independent contractors in all respects and neither party shall have any right to obligate or bind the other in any manner whatsoever. + +15. Assignment. Neither this Agreement nor any of the rights or obligations contained herein may be assigned or transferred by either party without the prior written consent of the other party. + +16. Authority to Contract. Each of the parties hereto represents and warrants that it has full right and power to enter into this Agreement, to perform all obligations to be performed by it hereunder, and to grant all rights hereunder granted without violating the legal or equitable rights of any other person or entity, and that the execution and performance of this Agreement will not conflict with or result in a breach of or default under any of the terms or conditions of any agreement to which either party has agreed, or is a party, or may be bound. + +17. Construction of Agreement. Each party acknowledges that it has participated in the negotiation of this Agreement and that no provision of this Agreement shall be construed against or he interpreted to the disadvantage of any party hereto by any court or other governmental or judicial authority by reason of such party having or deemed to have structured, dictated or drafted such provision. + +18. Modification. This Agreement constitutes the entire agreement with respect to the subject matter contained herein and supersedes all previous communications and agreements between the parties pertaining to the subject matter hereof, whether written or oral. The terms of this Agreement may not be modified, waived, amended, discharged, terminated, or supplemented, or otherwise changed, except by a written document executed by an authorized representative of each party. + +19. No Waiver. A waiver by either party of any of the terms or conditions of this Agreement in any instance shall not be deemed or construed to be a waiver of such term or condition for the future, or of any subsequent breach thereof, or any other term or condition of this Agreement. All remedies, rights, undertakings, obligations, and agreements contained in this Agreement shall be cumulative and none of them shall be in limitation of any other remedy, right, undertaking, obligation or agreement of either party. + +20. Severability. If any provision of this Agreement, as applied to either party or to any circumstance, shall be adjudged by a court of competent jurisdiction to be void or unenforceable, whether at law or in equity, then such determination shall in no way affect any other provision of this Agreement, or the validity or enforceability of this Agreement. + +21. Choice of Law. Regardless of the place of execution hereof, this Agreement, all amendments hereto, and any and all issues or controversies arising here from or related hereto, shall be governed by and construed exclusively in accordance with the laws and decisions of the State of Michigan. + +5 + +Source: ECO SCIENCE SOLUTIONS, INC., 8-K, 11/17/2017 + + + + + +22. Attorneys' Fees. If any action is necessary to enforce the provisions of this Agreement, including any claims or demands, or to interpret this Agreement, the prevailing party shall be entitled to reasonable attorneys' fees, costs and necessary disbursements in addition to any other relief to which it may otherwise he entitled. + +23. Captions: Structure. Section headings used in this Agreement are for convenience of reference only and shall not in any way affect the interpretation of any section of this Agreement or of the Agreement itself. + +24. Time is of the Essence. Time is of the essence with respect to the performance of the duties and obligations hereunder. + +25. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which when taken together shall be construed as a single instrument. This Agreement may be executed by facsimile or other electronic transmissions, and signatures on any facsimile or electronic transmission copy hereof shall be deemed authorized original signatures. + +26. No Third-Party Beneficiaries. This Agreement is not for the benefit of any third party and shall be deemed not to give any right or remedy to such third party, whether referred to herein or not. + +27. Recitals. The recitals contained in this Agreement are true and correct and are incorporated herein by reference. + +28. Confidentiality and Non-Disclosure + +A. Talent's endorsement and position of spokesperson of ESSI is for the sole purpose of the endorsement of the Company's products, and to offer information, based upon Talent's use and knowledge of ESSI's products. At no time whatsoever, in any manner whatsoever, is Talent authorized to discuss ESSI's financial condition, either in speculation or actual knowledge of such. + +B. Talent's position as a special advisor may provide Talent access to information that has not been made public and Talent agrees, to, at all times, keep in strict confidence any information he may come across that is not yet public, including, but not limited to, information about ESSI's stock, new products, acquisitions, and/or any other corporate action the Company may take, or has taken. Confidential treatment of this information extends to non-disclosure to Talent's friends, family, business associates, and any other person seeking information regarding the Company's financial information, stock, or corporate actions. + +6 + +Source: ECO SCIENCE SOLUTIONS, INC., 8-K, 11/17/2017 + + + + + +The parties hereto have caused this Agreement to be executed and delivered as of the date first above written. + +STEPHEN MARLEY + +By: /s/Stephen Marley Stephen Marley Talent + +ECO SCIENCES SOLUTIONS, INC. + +By: /s/Jeffery Taylor Jeffery Taylor CEO + +7 + +Source: ECO SCIENCE SOLUTIONS, INC., 8-K, 11/17/2017 \ No newline at end of file diff --git a/full_contract_txt/EcoScienceSolutionsInc_20180406_8-K_EX-10.1_11135398_EX-10.1_Sponsorship Agreement.txt b/full_contract_txt/EcoScienceSolutionsInc_20180406_8-K_EX-10.1_11135398_EX-10.1_Sponsorship Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..e4d0e387e7712ebc20a368abddc5317deac5d7d9 --- /dev/null +++ b/full_contract_txt/EcoScienceSolutionsInc_20180406_8-K_EX-10.1_11135398_EX-10.1_Sponsorship Agreement.txt @@ -0,0 +1,61 @@ +SPONSORSHIP AGREEMENT This agreement (the "Agreement") is made effective this 1st day of April, 2018 ("Effective Date") between Fruit of Life Productions LLC, ("Promoter") and Eco Science Solutions, Inc.,("Sponsor"), 1135 Makawao Avenue, Suite 103-188, Makawao, Hawaii, 96768. + +Contribution by Sponsor: In consideration for the right to sponsor the Kaya Fest and to be acknowledged by Fruit of Life Productions LLC., as a Promoter of the event during the term of this Agreement, Sponsor agrees to contract with Fruit of Life Productions LLC., for the amount of $250,000.00 to be paid in full upon signing of this agreement. + +Bank Wire Transformation Information See Attached Wire Instructions + +Sponsorship Benefits for Presenting Partner Sponsor: + +* Main Stage named after your brand * 4 10x10 on site vendor booths * 50 VIP Sponsor Passes / 50 GA tickets for both days * 4 Parking passes * Opportunity to participate in after party * Banner placement in venue (10) * Approved audio/video assets to be provided as promotional use for Herbo * Name and phrase called out on stage between performers set * Your logo and a link from our website to your website * Your logo on video wall * Your company name and logo as a presenting sponsor * Banner at main entrance of venue * On stage banner placement * Logo in Backstage/VIP area * Mention on social media * Logo on Step and Repeat * Logo on all promotional print + +Terms and Termination: The term of this agreement will begin on April 1, 2018 and continue until April 30, 2018 at 11:59pm. + +Relationship of Parties: The parties are independent contractors with respect to one another. Nothing in this Agreement shall create any association, joint venture, partnership or agency relationship of any kind between the parties. + +1 + +Source: ECO SCIENCE SOLUTIONS, INC., 8-K, 4/6/2018 + + + + + +Intellectual Property: Fruit of Life Productions LLC is the sole owner of all right, title and interest to all Kaya Fest information including Logo, tag lines, (Education before Recreation), Trademarks, trade names and copyrighted information. Sponsor agrees that it will not use Kaya Fest property in a manner that states or implies that Kaya Fest endorses Sponsor (or Sponsors products or services) without written approval from Fruit of Life Productions LLC. + +Idemnification: Sponsor shall indemnify and hold harmless, Fruit of Life Productions LLC, its related entities, partners, agents, officers, directors, employees, attorneys, heirs, successors, and assigns from against any and all claims, losses, damages, judgments, settlements, costs and expenses (including reasonable attorney's fees and expenses), and liabilities of every kind incurred as a result of: (i) any act or omission by Sponsor or its officers, directors, entities, employees, agents; (ii) any use of Sponsor's name, logo, Website, or other information, products, or service provided by Sponsor; and/or (iii) the inaccuracy or breach of any of the covenants, representations and warranties made by Sponsor in this Agreement. (iv) any changes in company value or brand value. The attendance and marketing reach estimates made in negotiations were made for the purposes of this agreement are mere estimate and not be interpreted as guaranties. . Confidentiality Confidential Information is all information that is marked such and all other information which a reasonable person would consider to be confidential. Confidential Information shall include, but is not limited to, information regarding the organization, its operations, programs, activities, financial condition, strategies, timelines, corporate/programming roadmap, surprise performers/guest appearances, event access information and membership or customer list. During the Term, each party shall use and reproduce the other party's Confidential Information only for purposes of this Agreement with written authorization by disclosing party, and only to the extent necessary for such purpose. Each party shall restrict disclosure of the other party's Confidential Information to its employees and agents with a reasonable need to know such Confidential Information, and shall not disclose the other party's Confidential Information to any third party without the prior written consent of the other party. + +Cancellation: Kaya Fest shall not be liable to any Sponsor for losses arising out of, or the inability to perform its obligations under the terms of this sponsorship proposal due to acts of God, which include, that are not limited to, fire, flood, tornados, hurricanes, severe increments weather, strikes, medical failure, or any other acts beyond the control of Kaya Fest. Exhibiting: Sponsors are bound by the same terms and conditions, if exhibiting, as all other vendors of event. Sponsors must have their own liability insurance with limits of one million dollars. + +Banners: Sponsors are responsible for creating their own banners. Banners placement will be determined by the Promoter. Sponsors are responsible for the hanging of their banners and removal after the event. Banners must be responsibility secured and not have any dangerous edges/sticks that may not cause harm if used inappropriately. + +General Provisions: Warranties: Each party covenants, warrants and represents that it shall comply with all laws and regulations applicable to this Agreement performance of its obligations, and that it shall exercise due care and act in good faith at all times in the performance of its obligations hereunder. The provisions of this section shall survive termination of this Agreement. This agreement is not an attempt to give legal advice or constraints as it relates to Florida law and Cannabis/Marijuana law in any jurisdiction. The Sponsor understands that they are free to seek legal advice on the content of this agreement and applicable law from independent counsel. Binding effect: This Agreement shall bind the parties, their respective heirs, personal representatives, successors and assigns. + +2 + +Source: ECO SCIENCE SOLUTIONS, INC., 8-K, 4/6/2018 + + + + + +Governing Law: This Agreement shall be governed by and interpreted in accordance with the laws of the State of Florida, without regard to its conflict-of-laws or choice-of law principles. In case of a dispute, the parties agree to pursue Arbitration as the preferred method to seek a remedy and the parties waive the right to a jury trial. Assignment: This Agreement, or the rights granted under it, may not be assigned transferred or sublicense by either party without the express prior written consent of the other party. Entire Agreement: This Agreement and its attachments constitute the entire agreement between the parties and supersede all prior agreements, oral or written, relating to the Sponsorship. This Agreement may only be admitted in a writing signed by both parties. The agreement is confidential, and the parties agree not to file or record in public records. Notice: All notices given under this Agreement shall be in writing, addressed to the parties at the addresses set forth below, and shall be deemed to have the duly given when delivered when sent by overnight courier, or certified mail (return receipt requested). + +Fruit of Life Productions LLC (Promoter) Address: 16115 SW 117t h Ave. Suite 21-A Miami, Florida 33177 + +EcoScience Solutions, Inc. (Sponsor) Address: 1135 Makawao Avenue, Suite 103-188 Makawao, Hawaii 96768 + +The Sponsor agrees that upon acceptance, this agreement shall be deemed to form and binding contract between the Sponsor and Promoter. The Sponsor agrees to abide by the terms set forth in the Terms and Conditions of Sponsorship agreement. + +All parties have executed this Agreement through their duly authorized representatives as of the first date written below. + +Sponsor: Eco Science Solutions, Inc. + +By: /s/Jeffery Taylor Name: Jeffery Taylor Title: CEO Date: 4/01/2018 + +Promoter: Fruit of Life Productions LLC: + +By:/s/Stella McLaughlan Name: Stella McLaughlan Title: Event Coordinator Date: 4/01/2018 + +3 + +Source: ECO SCIENCE SOLUTIONS, INC., 8-K, 4/6/2018 \ No newline at end of file diff --git a/full_contract_txt/EdietsComInc_20001030_10QSB_EX-10.4_2606646_EX-10.4_Co-Branding Agreement.txt b/full_contract_txt/EdietsComInc_20001030_10QSB_EX-10.4_2606646_EX-10.4_Co-Branding Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..b6903b0c67af9e27f370c09fb133e51fdf0df0ab --- /dev/null +++ b/full_contract_txt/EdietsComInc_20001030_10QSB_EX-10.4_2606646_EX-10.4_Co-Branding Agreement.txt @@ -0,0 +1,591 @@ +EXHIBIT 10.4 + + CO-BRANDING AGREEMENT + + THIS CO-BRANDING AGREEMENT (the "Agreement") is made as of May 22, 2000 (the "Effective Date"), by and between WOMEN.COM NETWORKS, INC., a Delaware corporation having a place of business at 1820 Gateway Drive Suite 150, San Mateo, CA 94404 ("Women.com"), and EDIETS.COM, INC., a Delaware corporation, having its principal place of business at 3467 West Hillsboro Boulevard, Suite 2, Deerfield Beach, Florida 33442 ("eDiets"). + + WHEREAS, eDiets maintains a site on the Internet, currently located at http://www.eDiets.com (the "eDiets Site"), that provides personalized diet and counseling on-line; + + WHEREAS, Women.com maintains sites on the Internet, currently located at http://www.women.com (the "Women.com Sites"), that provides an on-line portal for women, blending content, community, commerce and services; + + WHEREAS, eDiets and Women.com wish to establish and maintain a custom, category-exclusive, co-branded center containing repackaged content from the eDiets Site, including a free personal diet profile, which will be a part of the Women.com Sites, in order to promote the eDiets brand and drive traffic to the eDiets Site. + + NOW THEREFORE, in consideration of the mutual covenants, representations and warranties set forth herein, the parties hereby agree as follows: + +1. THE DIET CENTER. + + 1.1 Women.com will name an area, in which eDiets content will be published (such area, the "Diet Center"). Links (presented as Diet Center logos) to the Diet Center will be located on three Women.com channels (the Fitness Channel www.women.com/fitness; the Health Channel www.women.com/health; and the Food Channel www.women.com/food) and two subchannels within such channels to be determined in accordance with Exhibit B hereto. The first page of the Diet Center (the "Gateway Page") will have the look and feel of the Women.com Sites as specified in Exhibit A hereto. The Diet Center shall be branded with an icon that includes the eDiets logo. There will be no Women.com or eDiets registration required to enter and use the Gateway Page of the Diet Center. Women.com and eDiets will mutually agree upon the content and logo of the Gateway Page, including the display, appearance and placement of the Diet Center's logo, in accordance with the terms of this Agreement, including the specifications set forth on Exhibit A hereto, prior to the launch date of the Diet Center (the "Launch Date"). eDiets and Women.com shall work together in good faith in order to implement such design and development and the continued enhancement of the Diet Center. + + 1.2 Women.com shall store and maintain the Gateway Page on, and serve the Gateway Page from, server(s) located on Women.com's premises or the premises of Women.com's third party web host. eDiets shall store and maintain the Diet Center beneath the Gateway Page, and serve the Diet Center beneath the Gateway Page from, server(s) located on eDiets' premises or the premises of eDiets' third party web host. Effective one week from the + + 1 + +Launch Date, eDiets shall include a back button to the Women.com Site on all pages of the Diet Center beneath the Gateway Page. If at any time during the Term of this Agreement, eDiets reasonably believes that the inclusion of such back buttons has a material negative effect upon the rate at which users of the Diet Center register to become members of eDiets or convert into registered participants of the services offered by eDiets on the Diet Center (the "Negative Effect"), eDiets may conduct a one (1) month test of the effect of such back buttons which may include the exclusion of the back button. If such test verifies the Negative Effect of the back button(s) to the Women.com Site, eDiets may remove any such back buttons. + + 1.3 Except as set forth in Section 1.2 [Women], eDiets will have sole responsibility for providing and maintaining at its own expense the Diet Center beneath the Gateway Page. eDiets and Women.com will work together regarding the on-going design and maintenance of the Diet Center. + + 1.4 Each party shall bear its own expenses related to its responsibilities under this Section 1. + +2. EDIETS OBLIGATIONS. + + 2.1 Content License. eDiets hereby grants to Women.com, subject to the terms and conditions of this Agreement, a non-exclusive, nontransferable, worldwide, royalty-free license to use, copy, reproduce and display the editorial content and other data, branding and other identification provided by eDiets to Women.com in connection with this Agreement (the "eDiets Content") on the Women.com Sites: (i) for publication in the Diet Center and elsewhere throughout the Women.com Sites; (ii) for the promotion of eDiets and the Diet Center on the Women.com Sites and in collateral advertising materials; and (iii) for such other purposes as are consistent with or otherwise authorized under this Agreement. + + 2.2 Delivery of Content. eDiets agrees to deliver to Women.com, by no later than fifteen (15) days after the Effective Date, in a format specified by Women.com, the initial eDiets Content required by this Agreement, including any photos, text, data, illustrations, graphical elements, animation or banner ads. All eDiets Content delivered under this Agreement shall be consistent with the specifications for such eDiets Content (including specifications as to manner and media), and otherwise in accordance with, the terms of this Agreement, + +Source: EDIETS COM INC, 10QSB, 10/30/2000 + + + + + +including Exhibit D hereto, and any production schedules developed by the parties from time to time. eDiets agrees that it will respond in a timely manner to be agreed upon by the parties to all reasonable requests made by Women.com or its agents for updated eDiets Content and refreshing of eDiets Content for the Women.com Sites. + + 2.3 Format. eDiets will deliver the eDiets Content in such "camera-ready" or digital format, as agreed to by the parties. + + 2.4 Editorial Guidelines. eDiets shall ensure that the eDiets Content complies with Women.com's editorial guidelines. Women.com will provide eDiets with specific editorial guidelines for eDiets Content. Women.com reserves the right to reject any and all content that does not meet Women.com's editorial guidelines. eDiets will then be required to edit such + + 2 + +content until all content provided by eDiets complies with Women.com's editorial guidelines and standards. In the event that eDiets fails, within five (5) days after submission by Women.com, to provide Women.com with necessary revisions thereto, such failure shall be deemed to be approval of Women.com's edits. Women.com reserves the right, in its sole discretion, to require eDiets to eliminate, any banner, hypertext or other link from the Women.com Site to any web site containing content promoting or advertising tobacco, liquor, controlled substances, gambling, firearms or sexually explicit, offensive or degrading material. In addition to the foregoing and the content guidelines set forth in Section 5.2 [EXCLUSIVITY] hereof, eDiets may not directly link from the Gateway Page to any Women.com Competitive Company (as defined in Section 5.2 [EXCLUSIVITY]). + + 2.5 Facts. eDiets shall be solely responsible for ensuring the timeliness, accuracy, and correctness of all facts, data and information ("Facts") contained within the eDiet Content. eDiets shall indemnify, defend and hold harmless Women.com, its officers, directors, employees and agents from and against all damages, awards, costs, fees (including reasonable attorneys' fees), and expenses that such parties may incur as a result of third party claims arising from such third parties' reliance on Facts. Women.com retains the right, but not the obligation, to independently corroborate, or have corroborated, the timeliness, accuracy, and correctness of all Facts. + +3. ADVERTISING. + + 3.1 Advertising and Promotion. Advertising and Promotion. Women.com shall make available to eDiets and eDiets shall purchase from Women.com advertising and promotional inventory in the amounts and at the rates specified in Exhibit B hereto and in accordance with the terms specified in Exhibit D hereto. If Women.com does not deliver at least 80% of the Quarterly Impression Guarantee for Advertsing Promotions as set forth on Exhibit B (11,250,000 per quarter; 45,000,000 per year); 80% of the Quarterly Impression Guarantee for the Diet Center Logo as set forth on Exhibit B (3,250,000 per quarter; 13,000,000 per year); and 80% of the Quarterly Impression Guarantee for Other Campaigns as set forth on Exhibit B (3,000,000 per quarter; 12,000,000 per year) each quarter following the Launch Date, within sixty (60) days of the end of the applicable quarter, Women.com shall deliver an amount equal to the under-delivery within the same campaign elements, including newsletters, promotions, exclusive sponsorships, targeted rotations, ROS, channel and sub-channel center logo placements, or mutually agreed upon comparable elements. If Women.com does not deliver the shortfall within sixty (60) days of the end of the applicable quarter, eDiets may terminate this Agreement in its entirety immediately or authorize Women.com to deliver the shortfall within an extended number of days to be mutually agreed upon by the parties (the "Make Good Period"). Should eDiets elect to terminate this Agreement, Women.com shall reimburse eDiets within thirty (30) days of the date of such termination for all pre-paid impressions or other promotions not delivered as of the date of termination. Women.com agrees that if eDiets elects to extend the Agreement the monthly fee due and payable during the Make Good Period will be recalculated and reduced to reflect the changes in the revised delivery schedule. + + 3 + + 3.2 Women.com and eDiets agree that all media metrics (e.g. pageviews and impressions) with respect to the Gateway Page of the Diet Center shall be allocated to Women.com. + + 4. PUBLICITY. Neither party will make any public statement, press release or other announcement relating to the terms of or existence of this Agreement without the prior written consent of the other. Notwithstanding the foregoing, each party hereby grants to the other the right to issue an initial press release, the timing and wording of which will be subject to such party's reasonable approval, regarding the relationship between Women.com and eDiets and the launch of the Diet Center. This Section shall not in any way restrict either party from complying with any law, regulation or other governmental demand or request for information. + +5. EXCLUSIVITY. + + 5.1 During the Term, (a) Women.com will not buy, sell, display, distribute advertising from (including, but not limited to, banner ads, buttons, badges, text links, hyperlinks or editorial mentions) or otherwise promote a Competitive Company on any page of the Diet Center; (b) eDiets will be the exclusive third party provider of content and interactive tools for diets and diet counseling to Women.com within the Diet Center; (c) Women.com will not enter into a relationship with a Competitive Company that involves any of the following; (i) custom developed mini or micro web sites; (ii) content integration; (iii) discounts offered only to Women.com members on the Member Central page of the Women.com Sites; (iv) editorial endorsement (such as + +Source: EDIETS COM INC, 10QSB, 10/30/2000 + + + + + +"Brought to you by....") or fixed placement of 468x60 (top) and 125x365 (side) banners within eight (8) of the Content Features selected by eDiets; and (v) anchor sponsorship in any multi-sponsor Women.com promotion. Notwithstanding the foregoing, Women.com shall be entitled to (aa) provide mini and micro web sites and Women.com promotions and sponsorships to Jenny Craig; (bb) sell, display, or distribute advertisements, including banner advertisements, newsletter placements, internet radio, commerce placements and market research, or otherwise promote Competitive Companies on pages other than the Gateway Page of the Diet Center. For purposes of this Agreement, "Competitive Company" means any company that eDiets reasonably presents as, and Women.com reasonably agrees is, a direct competitor to eDiets by distributing on-line content principally relating to diets and diet counseling, including, but not limited to, Weight Watchers, Jenny Craig, NutriSystem, Nutrio, Asimba, DietSmart and uMagic. + +During the Term, Women.com agrees to give eDiets the right of first refusal to participate in all diet and diet-counseling related promotion opportunities created or otherwise made available by Women.com on channels or sub-channels created after the Effective Date of this Agreement, including sponsorships, anchor placements and any other content integration opportunities ("Diet Promos"). If Women.com proposes to create and make available Diet Promos after the Effective Date, it shall give eDiets written notice of its intention, describing the terms and conditions of participation in the Diet Promos. eDiets shall have fifteen (15) days from the giving of such notice to agree to participate in the applicable Diet Promo upon the terms and conditions specified in the notice by giving written notice of its agreement to Women.com. + + 4 + + 5.2 During the Term, eDiets will not buy, sell, display or distribute advertising from (including, but not limited to, banner ads, buttons, badges, text links, hyperlinks or editorial mentions) or otherwise promote any Women.com Compettive Company on any page of the eDiets Site that is within two clicks from the Gateway Page of the Diet Center. For purposes of this Agreement, "Women.com Competitive Company" means any company that Women.com reasonably presents as, and eDiets reasonably agrees is, a direct competitor to Women.com by providing an on-line portal for women, including, but not limited to, Oxygen Media and iVillage, + +6. PAYMENTS. + + 6.1 Payment Schedule. In consideration of Women.com's developing, maintaining and promoting the Diet Center pursuant to this Agreement, beginning on the tenth (10th) day after the execution of this Agreement and thereafter on the last day of each month during the Term of this Agreement, eDiets shall pay to Women.com a monthly fee in the amount set forth on Exhibit C unless adjusted as set forth in Section 3.1 [Advertising and Promotion]. Following the Initial Term, Women.com shall have the right, upon no fewer than sixty (60) days prior written notice to eDiets, to increase the amount of the Payment Schedule; provided, that (i) Women.com may not increase the Payment Schedule more than once in any period of twelve (12) consecutive months; and (ii) such increase may not exceed twenty percent (20%) of the then current Payment Schedule. + +7. REPORTING. + + 7.1 Women.com shall make advertising reports generated by NetGravity available to eDiets either online or in some other mutually agreed upon format. Such reports shall contain the number of impressions and other metrics attributable to each general category of advertising specified in Exhibit B hereto, as well as such other information as eDiets may reasonably request, to the extent reasonable commercial efforts and current technology permit. eDiets agrees to accept such advertising reports provided by Women.com as the official basis for measuring all services to be provided under this Agreement, provided, however, that if the traffic data contained in such reports materially differs (meaning a differential of 25% or more), from the data captured and reported by eDiets, the parties agree to either (a) identify the source of and remedy the difference or (b) equally split the difference between the traffic data reported by each party. If a technological malfunction causes the data reported by NetGravity to materially inflate the number of impressions provided eDiets by Women.com, Women.com shall deliver eDiets an amount of impressions equal to the overcount in accordance with the provisions for under-delivery set forth in Section 3.1 [Advertising and Promotion] hereof. + +8. OWNERSHIP. + + 8.1 eDiets Content. Nothing in this Agreement shall effect a transfer of ownership in the eDiets Content from eDiets to Women.com, and eDiets shall retain all rights of copyright, trademark or other intellectual property rights in such eDiets Content that it possessed prior to providing such eDiets Content to Women.com, subject only to the licenses expressly granted by eDiets to Women.com by this Agreement. eDiets retains all rights with respect to eDiets + + 5 + +Content that are not specifically granted to Women.com herein. Women.com acknowledges that eDiets owns all right, title and interest in and to the eDiets Content, and Women.com shall not now or in the future contest the validity of the eDiets' ownership rights in and to the eDiets Content. eDiets agrees to periodically include mention of Women.com, including a link to the Women.com Site if desired by eDiets, within the eDiets Newsletter (the "Mention"). eDiets shall determine in its sole discretion the placement, frequency and timing of such Mention, provided that eDiets submits each Mention to Women.com for approval and secures such approval prior to publication or distribution of such Mention. + + 8.2 Women.com Content. All content, including but not limited to all + +Source: EDIETS COM INC, 10QSB, 10/30/2000 + + + + + +photos, text, data, illustrations, graphical elements, animation and tools, appearing on the Women.com Sites (with the exception of the eDiets Content) or provided to eDiets pursuant to this Agreement by Women.com, including all software, methods of operation, interfaces, specifications and documentation in respect of the foregoing contained therein (collectively, "Women.com Content") is and shall remain the sole and exclusive property of Women.com or its third party licensors and eDiets acquires no right, title or interest therein or thereto. + + 8.3 Data Ownership. Women.com routinely collects data from Women.com visitors to the Women.com Sites. Women.com shall retain all ownership, right, title and interest in and to any data provided to Women.com by Women.com users while directly on the Women.com Site. eDiets shall retain all ownership, right, title and interest in and to any data collected within the eDiets Site including, but not limited to demographic information and email addresses submitted to eDiets by users of the eDiets Site. + + 8.4 Privacy. eDiets agrees to treat all consumer data collected from Women.com users on the Women.com Site in accordance with Women.com's privacy and security policies (the "Women.com Data"). Women.com reserves the right to change such policies in its sole discretion from time to time. In no event shall eDiets disclose or otherwise transfer to any person or entity any Women.com Data that individually or in the aggregate identifies the identity, habits or transactions of the Women.com users. + + 8.5 Tools. To the extent either party, directly or indirectly, utilizes any software, HTML and/or Java scripts, proprietary tools and/or methodologies (collectively the "Tools") in performing under this Agreement, such party and its licensors retain all right, title and interest in and to any such Tools. + +9. TRADEMARK OWNERSHIP AND LICENSE. + + 9.1 Women.com Marks. Women.com hereby grants eDiets a non-exclusive, non-transferable, royalty-free worldwide right and license without the right to sublicense to use the Women.com Marks during the Term solely in connection with (i) the fulfillment of eDiets' obligations under this Agreement, and (ii) in advertising and marketing collateral related to this Agreement. eDiets acknowledges and agrees that Women.com owns and otherwise has the exclusive right to use and to license the Women.com Marks and that Women.com, in each instance, shall have the right to review and approve or disapprove eDiets' use of the Women.com Marks, such approval not to be unnecessarily withheld or delayed. All uses of + + 6 + +Women.com Marks by eDiets, including all goodwill arising therefrom shall inure solely to the benefit of Women.com. Women.com retains all rights with respect to Women.com Marks that are not specifically granted to eDiets herein. Women.com, in its sole discretion, may withdraw specific or general permission to use the Women.com Marks upon seventy-two (72) hours written notice to eDiets. Upon expiration of such notice period, eDiets shall immediately discontinue use of the applicable Women.com Marks. As used herein, "Women.com Marks" means all trademarks, service marks and corporate and brand identification and indicia, including without limitation word marks, logos and other picture marks, phrases, jingles, composite marks, corporate, commercial and institutional images, product designations and identifications of Women.com, whether registered or not. + + 9.2 eDiets Marks. eDiets hereby grants Women.com a non-exclusive, non-transferable, royalty-free worldwide right and license without the right to sublicense to use the eDiets Marks during the Term solely in connection with (i) the fulfillment of Women.com's obligations under this Agreement, and (ii) in advertising and marketing collateral related to this Agreement. Women.com acknowledges and agrees that eDiets owns and otherwise has the exclusive right to use and to license the eDiets Marks and that eDiets shall have the right, in each instance, to review and approve or disapprove Women.com's use of the eDiets Marks, such approval not to be unnecessarily withheld or delayed. All uses of eDiets Marks by Women.com, including all goodwill arising therefrom shall inure solely to the benefit of eDiets. eDiets retains all rights with respect to eDiets Marks that are not specifically granted to Women.com herein. eDiets, in its sole discretion, may withdraw specific or general permission to use the eDiets Marks upon seventy-two (72) hours written notice to Women.com. Upon expiration of such notice period, Women.com shall immediately discontinue use of the applicable eDiets Marks. As used herein, "eDiets Marks" means all trademarks, service marks and corporate and brand identification and indicia, including without limitation word marks, logos and other picture marks, phrases, jingles, composite marks, corporate, commercial and institutional images, product designations and identifications of eDiets, whether registered or not. + + 9.3 Usage. All uses by one party of the other party's Marks shall be in accordance with such quality control standards as the licensing party may promulgate from time to time and each party agrees to refrain from all uses of the other party's Marks to which the other party objects. All promotional literature and other materials prepared by a party in connection with its promotional obligations hereunder shall bear appropriate copyright and/or trademark notices as prescribed by the other party, if the other party's content or branding is included therein. Each party agrees that it will not use, register or attempt to register in any jurisdiction, or otherwise appropriate or adopt any name, mark or logo that is confusingly similar to the other party's Marks. At no time during the term of the Agreement or thereafter shall eDiets attack, challenge or file any application with respect to any Women.com Mark. At no time during the term of the Agreement or thereafter shall Women.com attack, challenge or file any application with respect to any eDiets Mark. + + 9.4 Non-Alteration. In any identification of either party pursuant to this Agreement, one party shall not alter or otherwise impair the branding or other identification of the other party, nor alter or remove any copyright, + +Source: EDIETS COM INC, 10QSB, 10/30/2000 + + + + + +trademark or other protective notices of such other + + 7 + +party. Women.com agrees that, except as may be reasonably necessary, it shall not mask, frame, overlay, impair or otherwise materially alter or affect the images, information, perception, service quality or security obtained from a eDiets Site once the link or equivalent pathway is selected or initiated. + +10. TERM AND TERMINATION. + + 10.1 Initial Term. This Agreement will become effective as of the Effective Date and, unless sooner terminated pursuant to Sections 3.1 [Advertising and Promotion] or 10.2 [Termination for Breach], shall remain effective for two (2) years from and after the Effective Date (the "Initial Term"). This agreement shall automatically renew for additional successive terms of twelve (12) months each at the end of the Initial Term ("Renewal Terms"), unless either party notifies the other in writing at least sixty (60) days prior to the end of the Initial Term. As used in this agreement, "Term" shall mean the Initial Term and the Renewal Terms, if any. + + 10.2 Termination for Breach. In the event of a material breach of this Agreement by either party, the non-breaching party may terminate this Agreement if such breach is not cured within thirty (30) days from receipt of written notice of such breach sent to the address of the breaching party as specified herein. Such termination shall be in addition to any and all other actions or remedies the parties may seek at law or equity with respect to a breach of this Agreement. + + 10.3 Effect of Termination. Upon the termination, expiration or earlier termination of this Agreement in accordance with its terms (the "Termination Date"): + + (a) the rights and licenses granted by each party to the other pursuant to this Agreement shall automatically terminate; + + (b) where applicable, each party shall return to the other party, within thirty (30) days from such Termination Date, all intellectual property, technology or other property in its possession used in connection with this Agreement that is proprietary to the other party; + + (c) Confidential Information shall be returned in accordance with the terms of Section 11; + + (d) within sixty (60) days after such Termination Date, Women.com shall remove and cease to use all eDiets Content provided or made available for use or display on the Gateway Page pursuant to or in connection with this Agreement; + + (e) within sixty (60) days after such Termination Date, each party shall eliminate from their respective web sites and/or respective web pages any marks or branding related to the other party (i.e., the eDiets Marks and the Women.com Marks, respectively) used in connection with this Agreement; + + 8 + + (f) within sixty (60) days after such Termination Date, Women.com shall purge from its servers and systems all eDiets Content; + + (g) within sixty (60) days after such Termination Date, Women.com shall make-good to eDiets any and all payments made to Women.com under this Agreement for advertising inventory not yet delivered or run, provided that eDiets has paid for such inventory; and + + (h) within sixty (60) days after such Termination Date, eDiets shall pay to Woman.com any and all payment due under this Agreement for delivered advertising and promotions inventory in accordance with Sections 3.1 [Advertising and Promotion] and 6.1. + + 10.4 Survival. The provisions of Sections 4, 8, 10, 11, 12, 13, 14 and 15, as well as all defined terms, will survive any expiration or earlier termination of this Agreement for any reason. + +11. CONFIDENTIALITY. + + 11.1 The parties acknowledge that, in the course of performing duties under this Agreement, each party may obtain Confidential Information from the other party. For the purposes of this Section 11, the party disclosing Confidential Information shall be the "Disclosing Party" and the party receiving Confidential Information shall be the "Receiving Party." "Confidential Information" means any and all technical and non-technical information provided by the Disclosing Party to the Receiving Party and shall include, but not be limited to, all information regarding (a) patent and patent applications, (b) trade secrets, and (c) proprietary information, ideas, samples, media, techniques, sketches, drawings, works of authorship, models, inventions, know-how, processes, apparatuses, equipment, algorithms, software programs, software source documents, and formulae related to the current, future, and proposed products and services of the Company, and including, without limitation, the Company's information concerning research, experimental work, development, design details and specifications, engineering, financial information, procurement requirements, purchasing, manufacturing, customer lists, investors, employees, business and contractual relationships, business forecasts, sales and merchandising, marketing plans and information the Company provides regarding third parties. Confidential Information also includes proprietary or confidential information of any third party that may disclose such information to either party in the course of such party's business. + +Source: EDIETS COM INC, 10QSB, 10/30/2000 + + + + + +Confidential Information may be disclosed in writing, in other tangible form, orally or visually. + + 11.2 Confidential Information of the Disclosing Party will not include information that the Disclosing Party can demonstrate by reasonable evidence (a) is in or enters the public domain without breach of this Agreement, (b) the Receiving Party lawfully receives from a third party without restriction on disclosure and without breach of a nondisclosure obligation, (c) is approved for release by written authorization of the Disclosing Party, (d) the Receiving Party knew prior to receiving such information from the Disclosing Party or (e) is independently developed by the Receiving Party without reference to Confidential Information of the Disclosing Party. + + 9 + + 11.3 By virtue of this Agreement, each party hereto may disclose to the other any information that is Confidential Information. Such Confidential Information shall be governed by the terms of this Section 11. Each party agrees to use the Confidential Information of the other party solely to the extent necessary to fulfill its obligations or exercise its rights hereunder, and not for any other purpose. + + 11.4 Each party agrees (a) that it will disclose such Confidential Information only to its employees, agents and contractors with a need to know such Confidential Information and who have obligations of confidentiality not to use such Confidential Information for any purpose except as expressly permitted hereunder, (b) that it will not disclose to any third party or use any Confidential Information disclosed to it by the other except as expressly permitted in this Agreement, and (c) that it will take all reasonable measures to maintain the confidentiality of all Confidential Information of the other party in its possession or control, which will in no event be less than the measures it uses to maintain the confidentiality of its own information of similar importance. + + 11.5 Notwithstanding the foregoing, each party may disclose Confidential Information (a) to the extent required by a court of competent jurisdiction or other governmental authority or otherwise as required by law, provided that the Receiving Party uses reasonable efforts to provide the Disclosing Party with prior notice of such obligation in order to permit the Disclosing Party a reasonable opportunity to take legal action to prevent or limit the scope of such disclosure, or (b) on a "need-to-know" basis under an obligation of confidentiality to its legal counsel, accountants, banks and other financing sources and their advisors. + + 11.6 Within fifteen (15) days of receipt by Receiving Party of a written request from the Disclosing Party for the return of Confidential Information, all Disclosing Party's Confidential Information and all copies thereof in Receiving Party's possession or control shall be returned to Disclosing Party or destroyed by Receiving Party at Disclosing Party's instruction. Receiving Party shall then certify the same in writing and that no copies have been retained by Receiving Party, its employees, agents or contractors. + + 11.7 Each party acknowledges that unauthorized disclosure or use of the Confidential Information may cause irreparable harm to the other party for which recovery of money damages would be inadequate, and the other party shall therefore be entitled to seek timely injunctive relief to protect its rights under this Section 11, in addition to any and all other remedies available at law or in equity. + + 11.8 The terms and conditions of this Agreement will be deemed to be the Confidential Information of each party and will not be disclosed without the written consent of the other party. + +12. WARRANTY. + + 12.1 General. Each party represents and warrants to the other that: (a) such party has the full corporate right, power, and authority to enter into this Agreement and perform the acts required of it hereunder, (b) the execution of this Agreement by such party, and the performance + + 10 + +by such party of its obligations and duties hereunder, do not and will not violate any agreement to which such party is a party or by which it is bound, (c) when executed and delivered by such party, this Agreement will constitute the legal, valid and binding obligation of such party, enforceable against such party in accordance with its terms and (d) such party will perform its obligations hereunder in compliance with applicable law and regulations. + + 12.2 eDiets Warranties. eDiets hereby represents and warrants to and for the benefit of Women.com and its Affiliates that: + + (a) the eDiets Content may be used by Women.com as permitted by this Agreement without violating or infringing the rights of any person or entity, including, without limitation, rights of privacy or publicity, contractual rights, copyright, trademark, or other Intellectual Property rights; + + (b) publication of the eDiets Content by Women.com as permitted by this Agreement will not constitute defamation, product disparagement or trade libel; + + (c) the use of the eDiets Marks by Women.com as permitted by this Agreement will not infringe or violate the trademark, service mark or trade dress rights of any Person; and + +Source: EDIETS COM INC, 10QSB, 10/30/2000 + + + + + + (d) during the Term of this Agreement, the pages of the eDiets Site to which the Gateway Page provides links shall operate in accordance with the specifications set forth on Exhibit D. + + For the purposes of this Agreement, "Affiliate" shall mean another entity that controls, is controlled by or is under common control with such party; provided, however, that such entity is not a human being. For purposes of this definition, the terms "controls," "is controlled by," or "is under common control with," refer to the power to direct the policies and day-to-day operations of an entity, whether by virtue of ownership of a voting securities, contract, or otherwise. + + 12.3 Women.com Warranties. Women.com hereby represents and warrants to and for the benefit of eDiets and its Affiliates that: + + (e) that the Women.com Content, except to the extent of any eDiets Content incorporated therein, used in connection with this Agreement does not and will not violate or infringe the rights of any person or entity, including, without limitation, rights of privacy or publicity, contractual rights, copyright, trademark, or other intellectual property rights; + + (f) that publication of the Women.com Content will not constitute defamation, product disparagement or trade libel; + + 11 + + (g) that the use of the Women.com Marks by eDiets as permitted by this Agreement will not infringe or violate the trademark, service mark or trade dress rights of any person or entity. + + 12.4 Sole Remedy. Each party agrees that the sole and exclusive remedy for a breach of the warranties set forth in this Section 12 shall be the indemnification set forth in Section 13 below. + + 12.5 EXCEPT AS SPECIFIED IN THIS AGREEMENT, NEITHER PARTY MAKES ANY WARRANTY IN CONNECTION WITH THE SUBJECT MATTER OF THIS AGREEMENT AND HEREBY DISCLAIMS ANY AND ALL IMPLIED OR STATUTORY WARRANTIES, INCLUDING ALL IMPLIED WARRANTIES OF TITLE, MERCHANTABILITY, NONINFRINGEMENT AND FITNESS FOR A PARTICULAR USE OR PURPOSE REGARDING SUCH SUBJECT MATTER. NEITHER PARTY WARRANTS THAT ITS WEB SITE(S) OR THE CENTER WILL FUNCTION WITHOUT INTERRUPTION OR THAT THEY ARE ERROR FREE. To the extent that a party may not, as a matter of applicable law, disclaim any implied warranty, the scope and duration of such warranty shall be the minimum permitted under such law. + +13. INDEMNIFICATION. + + 13.1 Breach of Warranty. Subject to Section 13.3 [Indemnification Requirements and Procedures], eDiets and Women.com each agree to indemnify, defend and forever hold the other party, its present and former Affiliates, officers, members, stockholders, directors, employees, and agents, and successors and assigns (collectively, the "Indemnitees") harmless from and against any and all losses, liabilities, claims, costs, damages, fees and expenses (including, without limitation, fines, forfeitures, reasonable attorneys' fees, disbursements and administrative or court costs) (collectively, "Indemnifiable Sums") that the other party may incur as a result of third party claims arising from circumstances that constitute a breach or alleged breach of such party's warranties set forth in Section 12 or otherwise explicitly set forth in this Agreement. + + 13.2 Products, Services and Content. + + (a) Women.com Liability. Subject to Section 13.3 [Indemnification Requirements and Procedures], Women.com agrees to indemnify, defend and forever hold harmless the eDiets Indemnitees from and against all Indemnifiable Sums arising out of third party claims to the extent such claims are based upon: (a) content published on the Women.com Sites, other than eDiets Content; (b) the operation of the Women.com membership program; or (c) any product or service, other than a product or service provided by eDiets, sold, licensed or otherwise made available on the Women.com Sites. + + (b) eDiets Liability. Subject to Section 13.3 [Indemnification Requirements and Procedures], eDiets agrees to indemnify, defend and forever hold harmless the Women.com Indemnitees from and against all Indemnifiable Sums arising out of third party claims to the extent such claims are based upon: (a) content published on the eDiets Sites, other than Women.com Content; (b) tools used on or in connection with the eDiets Site, including, but not limited to the Diet Tool; (c) the operation of the eDiets membership program; (d) any product or service sold, licensed or otherwise made + + 12 + +available on any eDiets Site; or (e) any product or service sold, licensed or made available by eDiets on the Diet Center. + + 13.3 Indemnification Requirements and Procedures. Each party's obligation to indemnify the other pursuant to this Section 13, is predicated upon the indemnified party's (i) giving prompt written notice of any indemnifiable claim to the indemnifying party (provided that failure to give such notice shall not release the indemnifying party from its obligations hereunder except to the extent it is prejudiced thereby), (ii) giving the indemnifying party the opportunity to assume (by written notice to the Indemnitee) control over the defense and settlement of such claim, and (iii) providing, at the indemnifying party's expense, all relevant information, assistance and authority to enable to the indemnifying party to defend such claim. Each party, as Indemnitee, may participate, at its own cost, in the defense of any indemnifiable claim with counsel of its own choosing. Each party agrees not to settle any indemnifiable claim without the prior written consent of the other party, which consent shall not be unreasonably withheld or delayed. + +Source: EDIETS COM INC, 10QSB, 10/30/2000 + + + + + + 13.4 Limitations on Indemnification. Notwithstanding the terms of Sections 13.1 [Breach of Warranty] and 13.2 [Products, Services and Content], an indemnifying party shall have no liability for, nor shall it indemnify, defend or hold any Indemnitee harmless from or against any claim based on: (a) use of old, superseded content or Marks if such infringement would have been avoided by the use of the current version of such content or replacement Marks made available by the indemnifying party to the other party; (b) use of content or Marks not in accordance with the terms of this Agreement; (c) any modification of the indemnifying party's content or Marks not made or explicitly authorized by the indemnifying party if, in the absence of such modification, the content or Marks would not be infringing; or (d) a claimed act of infringement or misappropriation which act occurred after the other party received notice of such potential claim. + +14. LIMITATION OF LIABILITY. EXCEPT FOR BREACHES OF SECTION 11 OR BREACHES OF ANY LICENSE GRANT SET FORTH IN THIS AGREEMENT, IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY SPECIAL, INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES, WHETHER BASED ON BREACH OF CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE, WHETHER OR NOT THAT PARTY HAS BEEN ADVISED OF, KNEW, OR SHOULD HAVE KNOWN OF, THE POSSIBILITY OF SUCH DAMAGE AND NOTWITHSTANDING THE FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED REMEDY. THE LIMITATIONS ON LIABILITY FOR DAMAGES SET FORTH IN THIS AGREEMENT SHALL BE INAPPLICABLE TO EACH PARTY'S CONTRACTUAL OBLIGATION TO INDEMNIFY THE OTHER PARTY AS SET FORTH IN SECTIONS 2.6 AND 13. + +15. GENERAL. + + 15.1 Assignment. Neither party may assign this Agreement, in whole or in part, without the other party's written consent (which will not be unreasonably delayed or withheld), except that no such consent will be required in connection with an assignment or transfer of this Agreement to (a) a party's successor in connection with a Change in Control of such party, provided that such successor is not a competitor of the other party, or (b) to any entity that is + + 13 + +controlled by, under common control with, or controls a party. For purposes hereof, the terms "control", "controlled by" or "under common control with" refer to the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of an entity, whether through the ownership of voting securities, by contract or otherwise. Any attempt to assign this Agreement other than as permitted above will be null and void. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns. For purposes of this Agreement, "Change in Control" means a merger or consolidation of the party with, or any sale of all or substantially all of the assets of such party to, any other person, corporation or entity, unless as a result of such merger, consolidation or sale of assets the holders of such party's voting securities prior thereto hold at least fifty percent (50%) of the total voting power represented by the voting securities of the surviving or successor corporation after such transaction. + + 15.2 Jurisdiction and Venue. The parties agree that all lawsuits arising out of or related to this Agreement shall be brought in the state or federal courts located in the state of California, San Francisco County, and each party hereby referred consents to the exclusive personal jurisdiction of such courts for such purpose. + + 15.3 Governing Law. This Agreement shall be interpreted and enforced in accordance with the laws of the State of California as applied to agreements made, entered into and performed entirely in California by California residents, notwithstanding the actual residence of the parties, without giving effect to any choice of laws of California that would require the application of the laws of a state other than California. + + 15.4 Notice. Any notice under this Agreement will be in writing and delivered by personal delivery, express courier, confirmed facsimile, confirmed e-mail or certified or registered mail, return receipt requested, and will be deemed given upon personal delivery, one (1) day after deposit with express courier, upon confirmation of receipt of facsimile or e-mail or five (5) days after deposit in the mail. Notices will be sent to a party at its address set forth below or such other address as that party may specify in writing pursuant to this Section. + + 15.5 No Agency. The parties are independent contractors and will have no power or authority to assume or create any obligation or responsibility on behalf of each other. This Agreement will not be construed to create or imply any partnership, agency or joint venture. + + 15.6 Force Majeure. Any delay in or failure of performance by either party under this Agreement will not be considered a breach of this Agreement and will be excused to the extent caused by any occurrence beyond the reasonable control of such party including, but not limited to, acts of God, power outages and governmental restrictions. + + 15.7 Severability. In the event that any of the provisions of this Agreement are held to be unenforceable, the remaining portions of the Agreement will remain in full force and effect. + + 15.8 Entire Agreement. This Agreement is the complete and exclusive agreement between the parties with respect to the subject matter hereof, superseding that certain Letter of + + 14 + +Intent dated April 3, 2000, and any other agreements and communications (both + +Source: EDIETS COM INC, 10QSB, 10/30/2000 + + + + + +written and oral) regarding such subject matter. This Agreement may only be modified, or any rights under it waived, by a written document executed by both parties. + +WOMEN.COM NETWORKS, INC. EDIETS.COM, INC. + +By: /S/ Bud Ward By: /S/ David R. Humble + +Name: Bus Ward Name: David R. Humble + +Title: Vice President Eastern Ad Sales Title: CEO and Chairman + +1820 Gateway Drive, Suite 150 3467 West Hillsboro Boulevard, Suite 2 San Mateo, CA 94404 Deerfield Beach, FL 33442 Voice: (650) 378-6500 Voice: (954) 360-9022 Fax: (650) 378-6599 Fax: (954) 360-9095 + + 15 + + EXHIBIT A + + [GRAPHIC OMITTED] + + A-1 + + EXHIBIT B + +DIET CENTER LOGO + +eDiets will have the following Channel and Subchannel Center Logo Placements + +(1) Health Channel Home Page and Two Sub Channels of Choice http://www.women.com/health/ 2 Sub Channels: + +Health News http://www.prevention.com/healing/ Condition & Ailments http://www.prevention.com/healing/cond_ail/ Estimated Impressions per month- 160,000 Estimated Impressions for Year 1- 1,920,000 Estimated Impressions for Year 2- 1,920,000 + + Total Estimated Impressions: 3,840,000 + + OR + +(2) Food Channel Home Page and Two Sub Channels of Choice + +http://food.homearts.com/food/ 2 Sub Channels: Restaurants http://food.homearts.com/food/restaura/00rest17.htm Food For Thought http://food.homearts.com/food/thoughts/00thou17.htm + +Estimated Impressions Per month- 300,000 + + Estimated Impressions for Year 1- 3,600,000 Estimated Impressions for Year 2- 3,600,000 + + Total Estimated impressions: 7,200,000 + +(3) Fitness Channel Home Page and Two Sub Channels of Choice + +http://www.women.com/fitness/ + +2 Sub Channels + +Weight Loss http://www.prevention.com/weight/getstart.html + +Fitness News http://www.prevention.com/weight/ + + Estimated Impressions per month- 60,000 (before re-launch) Estimated Impressions for Year 1- 720,000 Estimated Impressions for Year 2- 720,000 Total Estimated impressions: 1,440,000 + + B-1 + +Upon committing to this partnership, eDiets will receive a two-week banner advertisement test in rotation across the channels set forth above in order to determine the most suitable fixed placements for the eDiets center logos. This test will consist of a total of 100,000 impressions, 20,000 per channel. Given that expectations for banner advertisement performance are not necessarily equivalent to that of a fixed center logo, eDiets understands and acknowledges that the results will be considered directional in nature and not used to determine ultimate performance of the eDiets center logos placed in the channels selected by eDiets. + +The parties may agree at a later date to add other channels to the above list of channels. In any event, eDiets may select from only three channels. + +Source: EDIETS COM INC, 10QSB, 10/30/2000 + + + + + +PROMOTION OF DIET CENTER ON WOMEN.COM SITES + +Relevant Feature Content Sponsorships + +Women.com will provide eDiets with a fixed top and 125x365 side banner on eight (8) of the content features set forth below. + +eDiets may select up to eight (8) of the content features set forth below: (1) Fat to Firm at 40+ (Estimated Impressions per Month- 7,000) http://www.prevention.com/weight/fattofirm/ + +(2) Nutrition News - If you make one change to your diet, what would it be? (This is an Expert piece) (Estimated Impressions per Month- 10,000) http://www.prevention.com/cooking/news/ + +(3) 71 Weight Loss Tips (Estimated Impressions per Month- 100,000) http://www.prevention.com/report/980610/ + +(4) Weight Loss Program - Working Out (Estimated Impressions per Month- 15,000) http://www.healthyideas.com/weight/workout.html + +(5) 45 Best and Worst Belly Flatteners (pull down menu to select scenarios with exercise tips) (Estimated Impressions per Month- 7,000) + +http://www.healthyideas.com/report/bellyflat/ + +(6) 8 Ways to Make Weight lifting fun (Estimated Impressions per Month- 16,000) http://www.prevention.com/weight/buzz/ + +(7) Gym Shorts (Q&A Michelle Staten, Fitness Editor, Prevention) (Estimated Impressions per Month- 10,000) http://www.prevention.com/weight/gym/ + +(8) Calorie Calculator (Tool) (Estimated Impressions per Month- 20,000) http://www.prevention.com/weight/bonfire/ + +(9) Weight Loss Program: Success Stories (Estimated Impressions per Month- 17,000) + + B-2 + +www.prevention.com/weight/success.html + +(10) Weight Quiz: What will you Weigh one Year from now? (Quiz) (Estimated Impressions per Month- 39,000) www.prevention.com/weight/what_will_you/ + +(11) Weight Loss Program Planner (Tool) (Estimated Impressions per Month- 50,000) www.prevention.com/weight/planner/ + +(12) A Choice of one top level sponsorship in the newly launched Fitness Channel scheduled for 3Q, 2000 + +eDiets.com will have the first right to substitute any of the following content features for any of the eight (8) content features selected above once inventory on such features becomes available. When the following content features become available, eDiets.com has the choice to switch sponsorships and not add to their overall sponsorships. + +(1) Weight Loss Program: Finding Support (Available 6/30/01) (Estimated Impressions per Month- 2,000) www.prevention.com/weight/support.html + +(2) Weight Loss Program: Eating Well (Available 6/30/01) (Estimated Impressions per Month- 2,000) www.prevention.com/weight/eatwell.html + +(3) Weight Loss Program: Getting Started (Available 6/30/01) (Estimated Impressions per Month- 7,000) www.prevention.com/weight/getstart.html ROS advertisement rotation on Women.com Sites + +The Following Advertising Impressions will include these campaign elements: + + -All Sponsorships -Targeted Banner Rotations (Targeted rotation includes Fitness, Entertainment, Wedding, Health, Fashion & Beauty, Food Channels, Redbook, Cosmopolitan, Prevention, Good Housekeeping, eHarlequin and Home and Garden and other relevant areas as they become available) -ROS + +Per Year + + o Impressions Guaranteed per month: 3,750,000 o Total Advertising Impressions Guaranteed: 45,000,000 (of which shall not include the top 468x60 nor the 120x240 banner located on the Gateway page of the Diet Center) 60% ROS and 40% Targeted and Sponsorship elements + + B-3 + + o Ad banners on the Diet Center will be co-branded with the Women.com and eDiets logos + +Women.com Special Membership Integration Opportunities: + +Women.com will provide eDiets with one (1) membership offer opportunity to Women.com users who have registered for membership on the Women.com Sites per + +Source: EDIETS COM INC, 10QSB, 10/30/2000 + + + + + +quarter after the Effective Date. These member offers will be promoted via membership newsletters as listed below, on the Membership Menu Page (http://women.com/membership/central.html) and on the Promotion Page (http://women.com/promotions/). The member offer provided by eDiets can not run anywhere other than Women.com for one month prior to or one month after the member promotion period without Women.com's written consent + +eDiets shall offer in any membership offer provided pursuant to this Agreement a minimum discount of 20% on the fair market value of any products or services. + +Placement within Women.com Newsletters: + +eDiets.com will have the opportunity to participate within the following newsletters, the placement, frequency and timing of such participation to be determined by Women.com in its sole discretion provided that Women.com uses its best efforts not to place reference to eDiets on the same page as content which may appear to be contrary to the basic foundation of the eDiets' philosophy. During the Term, eDiets.com will be guaranteed 12 million circulation per year from and after the Effective Date via newsletters, including but not limited to: >> Fashion & Beauty Newsletter: 300,000 subscribers per month >> Food News: 180,000 subscribers per month >> Prevention: 1,600,000 subscribers per month >> Internet Scopes: 2,400,000 subscribers per month >> Sex & Romance: 120,000 subscribers per month >> What's New: 1,100,000 subscribers per month >> Women.com Member Newsletter: 1,700,000 subscribers per month + +Guaranteed Circulation Per Year: 12,000,000 + +Anchor Tenancy Sponsorship of the Women.com Promotions/ Sweepstakes: + +Women.com will provide eDiets.com with three (3) Anchor Sponsorships and two (2) Premier Sponsorships of the following Women.com promotions. + +The "Anchor Sponsorship" includes the following elements: o Grand prize sweepstakes opportunity o Exclusive sponsorship of an editorial feature showcased within the promotion o Availability to ask two (2) demographic or brand research questions o Full database of names collected from the sweepstakes (estimated 30,000 to 60,000 names), the use of which is subject to all applicable Women.com privacy policy. o Network wide promotion of the sweepstakes, the placement, size, frequency and timing of such promotions to be determined by Women.com in its sole discretion. + + B-4 + +Included in a "Premier Sponsorship" are all of the following elements: o 1/st/ place sweepstakes opportunity o Co-sponsorship of an editorial feature showcased within the promotion o Full database of names collected from the sweepstakes (30,000 to 60,000 names) o Network wide promotion of the sweepstakes, the placement, size, frequency and timing of such promotions to be determined by Women.com in its sole discretion. + +Available Promotions for Participation: o Wedding Promotion (Year 2000) o Holiday Survival Guide (Year 2000) o Resolutions Promotion (Year 2001) o Valentine's Day Promotion (Year 2001) o Mother's Day Promotion (Year 2001) + +Total estimated impressions per promotion: 1,000,000 + +Women.com E Commerce Elements: + +Sports/Fitness Diet Center Homepage: http://www.women.com/shopping/webstoreguide/sports/ + +o Rotating "Featured Partner" Ad Button on the side of the page + +All Sub Categories: + +o Rotating "Featured Partner" Ad Button on the side of the page + +o Affiliate text link placement within all sub-sub categories + +- New category creation at a minimum of 3 weeks from receipt of all coded links, descriptions and images have been received from client. Note: if category requires the participation of more than one client, it will not be created until all material has been received from all participants. + +Impression Break-Out Per Year: + +Advertising Impressions: Estimated Guaranteed + + -Sponsorships and Targeted Rotations: 18,000,000 + + -ROS 27,000,000 + +Total Guaranteed Advertising Impressions: 45,000,000 + +QUARTERY IMPRESSION GUARANTEED 11,250,000 + +Diet Center, Channel & SubChannel + +Impressions: Estimated Guaranteed + +Source: EDIETS COM INC, 10QSB, 10/30/2000 + + + + + + "eDiets Diet Center" logo impressions: 30,000,000 + + B-5 + + "eDiets Diet Center" logo impressions: 13,000,000 + +Other Campaign Impressions: Estimated Guaranteed Newsletters 12,000,000 Promotions 500,000 Added Value Commerce Impressions: 3,600,000 Total Estimated Impressions: 79,100,000 Total Impressions Guaranteed: 70,000,000 + + B-6 + + EXHIBIT C + + PAYMENT SCHEDULE + +Pricing/Delivery: PRICING AS PART OF THIS PACKAGE ONLY Flight: 2 Year Deal Net Advertising CPM: $37.00 (Just Co-Branded Banners) Overall Net CPM $28.57 (With all other elements) Total Net Cost: $2,000,000 (Per Year)/$4,000,000 (Two Years) Total Guaranteed Impressions: 70,000,000 (Per Year)/140,000,000 (TwoYears) + +YEAR 1 + +10 days after Effective Date-Production $250,000 + +Last day of each of the 1st through 12/th/ months after the Launch Date $145,833 + + Media Component $138,750 + + Other (Promotions, production, etc) $7,083 + +YEAR 2 + +Last day of each of 13/th/ through 24/th/ months after the Launch Date $166,666 + + Media Component $138,750 + + Other (Promotions, production) $27,916.66 + +Total Payment to Women.com $4,000,000 + + [GRAPHIC OMITTED] + + C-1 + + EXHIBIT D + +GENERAL ADVERTISING & PRODUCTION GUIDELINES + +The following are the Women.com advertising and production guidelines. Any exceptions to these guidelines require prior written approval of Women.com. + +All impressions per section are estimated; however, Women.com shall extend every reasonable effort to deliver the estimated number of impressions per section as set forth in Exhibit B. Notwithstanding the foregoing, Women.com does guarantee a minimum of 13,000,000 impressions promoting eDiets per year on the Diet Center. + +BANNER CREATIVE & STANDARDS + +All campaigns must submit 468x60, 234x60, and 125x365 creative units. + +1. ACCEPTED BANNER SIZES + + o 234x60 half-banner (8k or less) o 468x60 banner (10k or less) o 125x365 sponsorship (12K or less) o 125x125 promo (8K or less; reserved for marketing and co-branded tagged tune-ins with management approval) + +2. BANNER CREATIVE FORMATS ACCEPTED + + o GIF (animated and non-animated) o JPEG o HTML o JAVASCRIPT + +3. THE FOLLOWING ADDITIONAL FORMATS CAN POTENTIALLY BE USED BUT REQUIRE ADDITIONAL PRODUCTION AND TESTING TIME TO ENSURE NETWORK COMPATIBILITY: + + o JAVA o ENLIVEN o UNICAST o FLASH + +Source: EDIETS COM INC, 10QSB, 10/30/2000 + + + + + +Please check with ad production regarding other formats. + + D-1 + +PRODUCTION LEAD TIME AND "SHIP TO" INFO + +Lead Times + +The following lead times should be considered standard. Additionally, more extensive campaigns/sponsorships and/or incorporating new technologies may take longer. o Banner campaigns require 5 business days from the time all advertiser materials/instructions are received. o Creative rotation changes/refreshes require 3 business days from the time all advertiser materials/instructions are received. + +"Ship To" Info + +All creative should be sent to ads@women.com. + +ADVERTISING/LINKS - CATEGORIES NOT ACCEPTED + +The following categories of advertising or links to such material are not accepted on Women.com: + + o Tobacco o Controlled substances o Liquor o Firearms o Gambling o Sexually explicit advertising and/or advertising that is degrading. o Women.com, specifically Prevention on-line (Healthy Ideas) cannot accept advertising that promotes: 1) a product deemed defective or unsafe by the FDA, 2) a product, therapy or service whose possible harm to the consumer outweighs it benefits, and 3) a health product for which there is no good evidence of benefit and no good reason to believe there is a benefit. + +THIRD PARTY AD SERVING + +Women.com accepts third party ad serving. However, third party serving relies on the third party's servers being fully operational. If Women.com determines that the servers are unreliable, the banners must be served from Women.com's site until such time the third party servers are fully operational. Also note that Women.com cannot track click-thrus in its NetGravity reports for rich media banners that are served remotely. + +Women.com must be notified in writing regarding the product categorizations of all creative rotations as well as any revisions, in order to maintain proper placement and competitive separation. Any changes made to creative rotations without prior notification to Women.com may result in the interruption or temporary discontinuation of ad delivery until all ad placements and competitive separation issues can be resolved. + +NETWORK DESIGN CONFIGURATION + + D-2 + +Women.com reserves the right to make design and configuration changes to all pages and features within the network. Women.com shall notify its advertisers of any changes that significantly impacts ad placements. + + D-3 + +Source: EDIETS COM INC, 10QSB, 10/30/2000 \ No newline at end of file diff --git a/full_contract_txt/EhaveInc_20190515_20-F_EX-4.44_11678816_EX-4.44_License Agreement_ Reseller Agreement.txt b/full_contract_txt/EhaveInc_20190515_20-F_EX-4.44_11678816_EX-4.44_License Agreement_ Reseller Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..fa4f794aabfbebc7f836c6da964beef26832ed8b --- /dev/null +++ b/full_contract_txt/EhaveInc_20190515_20-F_EX-4.44_11678816_EX-4.44_License Agreement_ Reseller Agreement.txt @@ -0,0 +1,263 @@ +Exhibit 4.44 THIS LICENSE AND RESELLER AGREEMENT dated as of the October 30, 2018 is made BETWEEN: EHAVE, INC., a company incorporated under the laws of the Province of Ontario, Canada ("Ehave"); - and - COMPANION HEALTHCARE TECHNOLOGIES CORP, a company incorporated under the laws of the Province of Ontario ("CHT") RECITALS: A. Ehave has developed a software platform that provides an end-to-end patient management solution to healthcare professionals and provides that platform to users as a service. B. CHT has developed a business model to bring a similar service that Ehave provides using the Ehave Platform for the domain of the animal market including companion animals (i.e. pets). C. The Parties desire to enter into this Agreement to enable CHT to pursue its business model whereby CHT will license and provide services in relation to companion and other animals using the Ehave Companion Solution under the terms and conditions contained herein. NOW THEREFORE, in consideration of the premises and the mutual agreements hereinafter set out herein and of other consideration (the receipt and sufficiency of which are acknowledged by each Party), the Parties covenant and agree as follows: 1. INTERPRETATION (a) Definitions In this Agreement and the schedules annexed hereto, the following terms shall have the respective meanings indicated below: "Acceptance Criteria" has the meaning ascribed to it in Section 3(d). "Acceptance Period" has the meaning ascribed to it in Section 3(d). "Acceptance Procedures" has the meaning ascribed to it in Section 3(d). "Agreement" means this license and reseller agreement and all Schedules, Appendixes and Exhibits attached hereto. "Applicable Laws" means any and all (i) laws, statutes, rules, regulations, by laws, codes, treaties, constitutions and ordinances, including Privacy Legislation ("Laws"), (ii) order, directive, judgment, decree, award or writ of any court (including a court of equity), arbitrator or arbitration panel, or any Governmental Authority or other body exercising adjudicative, regulatory, judicial or quasi-judicial powers, including any stock exchange ("Orders"), and (iii) policies, guidelines, standards, requirements, notices and protocols of any Governmental Authority ("Policies"); which are applicable to or govern CHT, Ehave or the transactions contemplated by this Agreement. + +Source: EHAVE, INC., 20-F, 5/15/2019 + + + + + +"Authentication ID" means a security mechanism by which an Authorized User identifies herself or himself to the Ehave Companion Solution and gains access thereto, which security mechanism may include user identification, passwords, digital certificates or any other similar process mechanism for authentication and recognition as determined by Ehave from time to time. "Authorized User" means an individual who an End User has authorized to access and use CHT's services, which includes the use of the Ehave Companion Solution. "Business Day" means any calendar day except for Saturday or Sunday or any statutory holiday observed in the Province of Ontario. "CHT Developments" has the meaning ascribed to it in Section 4(a). "CHT Indemnified Parties" has the meaning ascribed to it on Section 16(a). "CHT Marks" means the names, trademarks, trade names, service marks, designs and logos of CHT. "Claim" has the meaning ascribed to it in Section 16(a). "Competitive Transaction" has the meaning ascribed to it in Section 2(d). "Confidential Information" means this Agreement, the Ehave Companion Solution, End User Data and all ideas, designs, business models, databases, drawings, documents, diagrams, formulas, test data, marketing, financial or personnel data, sales information, customer or supplier information, including information provided by such customers or suppliers, or any other information already furnished and to be furnished or made available by one Party to the other, whether in oral, written, graphic or electronic form including any such information exchanged during informational sessions designated as confidential, including, without limitation, information concerning a Party's actual and potential customers and other Intellectual Property Rights of such Party, provided, however, that Confidential Information shall not include any data or information: (i) that, at the time of disclosure, is in or, after disclosure, becomes part of the public domain, through no act or failure on the part of the receiving Party, whether through breach of this Agreement or otherwise; (ii) that, prior to disclosure by the disclosing Party, was already in the possession of the receiving Party, as evidenced by written records kept by the receiving Party in the ordinary course of its business, or as evidenced by proof of actual prior use by the receiving Party; (iii) independently developed by the receiving Party, by Persons having no direct or indirect access to the disclosing Party's Confidential Information provided that the receiving Party provides clear and convincing evidence of such independent development; (iv) which, subsequent to disclosure, is obtained from a third Person: (A) who is lawfully in possession of such information; (B) who is not in violation of any contractual, legal, or fiduciary obligation to either Party, as applicable, with respect to such information; and (C) who does not prohibit either Party from disclosing such information to others; or (v) is further disclosed with the prior written consent of the disclosing Party, but only to the extent of such consent. "Effective Date" means the date first written above. "Ehave Companion Solution" means the Ehave Platform, as modified, adapted and customized, as provided herein, the specifications of which are set out in Schedule "1". + +2. + +Source: EHAVE, INC., 20-F, 5/15/2019 + + + + + +"Ehave Platform" means the Software, Ehave Server and such devices and peripherals physically located with the Ehave Server, including all computer hardware, software, network elements, and electrical and telecommunications infrastructure located behind the Point of Access. "Ehave Server" means that computer server located at Ehave's premises, or a third party provider of hosting and/or network services, that houses the Software. "End User" means CHT's customers who have entered into a subscription agreement with CHT for CHT services, which services include the use of the Ehave Companion Solution. "End User Data" means collectively any data, files, documentation or other information (including personal information) that an End User or any of its Authorized Users may: (i) upload to the Ehave Companion Solution; and/or (ii) have processed through the use of the Ehave Companion Solution, and includes any data or output resulting from or derived from such use. "Escrow Agent" has the meaning ascribed thereto in Section 12(a). "Escrow Agreement" has the meaning ascribed thereto in Section 12(a). "Field of Use" means indications and outcomes related to any companion and other animals. "Governmental Authority" means any domestic, foreign or supranational government, whether federal, provincial, state, territorial or municipal; and any governmental agency, ministry, department, tribunal, commission, bureau, board or other instrumentality, including international institutions, exercising or purporting to exercise legislative, judicial, regulatory or administrative functions of, or pertaining to, government. "Implementation Plan" has the meaning ascribed to it in Section 3(a). "Intellectual Property" means any property, tangible or intangible, that may be subject to Intellectual Property Rights, including without limitation, ideas, formulae, algorithms, concepts, techniques, processes, procedures, approaches, methodologies, plans, systems, research, information, documentation, data, data compilations, specifications, requirements, designs, diagrams, programs, inventions, technologies, software (including its source code), tools, products knowledge, know-how, including without limitation, trade secrets, and other materials or things. "Intellectual Property Rights" means (a) any and all proprietary rights anywhere in the world provided under (i) patent law; (ii) copyright law, including moral rights; (iii) trademark law; (iv) design patent or industrial design law; (v) semiconductor chip or mask work law; (vi) trade secret law; (vii) privacy law; or (viii) any other statutory provision or common law principle applicable to this Agreement which may provide a right in either (A) Intellectual Property; or (B) the expression or use of Intellectual Property; and (b) any and all applications, registrations, licenses, sub-licenses, franchises, agreements or any other evidence of a right in any of the foregoing. "Objectionable Content" means content that infringes any Applicable Laws or third party rights, and content which is obscene, indecent, pornographic, seditious, defamatory, threatening, liable to incite racial hatred, menacing, blasphemous, misleading, deceptive or in breach of any person's Intellectual Property Rights. "Party" means either Ehave or CHT; and "Parties" means both of them. "Person" means any individual, estate, sole proprietorship, firm, partnership, unincorporated association, unincorporated syndicate, unincorporated organization, limited liability company, corporation, body corporate, trustee, trust, Governmental Authority or other entity or organization and includes any successor to any of the foregoing. + +3. + +Source: EHAVE, INC., 20-F, 5/15/2019 + + + + + +"Point of Access" means Ehave's, or its subcontractor's, border router, which is used to establish connectivity from the Ehave Platform to Ehave's, or its subcontractor's, Internet provider, or the public Internet. "Royalties" means the fees, charges and other amounts to be paid by CHT to Ehave for the rights granted hereunder and which amounts are set out in Schedule "6". "Security Requirements" means those safeguards and controls set out in Schedule "5". "Software" means Ehave's proprietary patient and data management software and any related documentation, as modified for use in the animal (including companion animal) and veterinary industry. "Source Code" means the human-readable form of a computer instruction, including, but not limited to, related system documentation, flow charts, all comments and any procedural code and a description of the procedure for generating object code, all of a level sufficient to enable a programmer reasonably fluent in the programming language in which the Software was written to understand, build, operate, support, maintain and develop modifications, upgrades, updates, adaptations, enhancements, new versions, and other derivative works and improvements of, and to develop computer programs compatible with, the Software. "Specifications" has the meaning ascribed to it in Section 3(a)."Subscription Agreement" has the meaning ascribed to it in Section 5(b). "Term" has the meaning ascribed to it in Section 9. "Territory" means any jurisdiction in the World where the use of the Ehave Companion Solution for the intended purpose herein is permitted under Applicable Law. "Transition out Period" has the meaning ascribed to it in Section 10(f). "Transition-out Services" has the meaning ascribed to it in Section 10(f). "Virus" means a piece of code usually (but not necessarily) disguised as something else that causes some unexpected and, for the victim, usually undesirable, event and which is designed so that it may automatically spread to other computer users; the term 'Virus' will also be deemed to include worms, cancelbots, trojan horses, harmful contaminants (whether self-replicating or not) and nuisance causing or otherwise harmful applets. (b) Headings; Extended Meanings The division of this Agreement into articles, sections, schedules and other subdivisions, and the inclusion of headings are for convenience of reference only and shall not affect the construction or interpretation of this Agreement. The headings in the Agreement are not intended to be full or precise descriptions of the text to which they refer. Unless something in the subject matter or context is inconsistent therewith, references herein to Articles and Sections are to Articles and Sections of this Agreement. The word "including" or "include(s)" means "including without limitation" or "include(s) without limitation". (c) Currency Unless otherwise specified, all references to monetary amounts, including the symbol "$", are in respect of Canadian currency. + +4. + +Source: EHAVE, INC., 20-F, 5/15/2019 + + + + + +(d) Exhibits and Schedules The following Schedules are a part of and are integral to this Agreement: Schedule "1" - Ehave Companion Solution Specifications Schedule "2" - Development and Implementation Plan Schedule "3" - Support Procedures Schedule "4" - Service Level Commitments Schedule "5" - Security Requirements Schedule "6" - Royalties and Early Termination Fee Schedule "7" - Source Code Escrow (e) Entire Agreement This Agreement, together with any other documents to be delivered pursuant hereto, constitutes the entire agreement between the Parties pertaining to the subject matter hereof and supersedes all prior agreements, negotiations, discussions and understandings, written or oral, between the Parties. Except as expressly provided in this Agreement, there are no representations, warranties, conditions other agreements or acknowledgements, whether direct or collateral, express or implied, that form part of or affect this Agreement. The execution of this Agreement has not been induced by, nor do either of the Parties rely upon or regard as material, any representations, warranties, conditions, other agreements or acknowledgements not expressly made in this Agreement or in the other documents to be delivered pursuant hereto. (f) Governing Law: This Agreement shall be governed by, and construed and enforced in accordance with, the laws in force in the Province of Ontario (excluding any conflict of laws rule or principle which might refer such construction to the laws of another jurisdiction). The Parties hereto agree to submit to the exclusive jurisdiction of the courts of the Province of Ontario and waive any objection relating to improper venue or forum non conveniens to the conduct of any proceeding in any such court. (g) Severability: In the event that any provision (or any portion of a provision) of this Agreement shall for any reason be held by a court of competent jurisdiction to be invalid, illegal, or unenforceable for any reason, such invalidity, illegality or unenforceability shall not affect any other provision hereof and this Agreement shall be construed as if such invalid, illegal or unenforceable provision (or portion of a provision) had never been contained herein in regards to that particular jurisdiction. 2. APPOINTMENT AND LICENSE GRANT (a) Exclusive Appointment Ehave hereby appoints CHT, and CHT hereby accepts the appointment, to act as Ehave's reseller of the use of the Ehave Companion Solution within the Field of Use in the Territory for the duration of the Term solely in accordance with the terms and conditions of this Agreement. Subject to Section 2(e), the foregoing appointment is exclusive such that Ehave shall not appoint any other Person to, nor may Ehave itself, sell or resell the use of the Ehave Companion Solution within the Field of Use anywhere in the Territory. + +5. + +Source: EHAVE, INC., 20-F, 5/15/2019 + + + + + +(b) Grant by Ehave Subject to the terms and conditions of this Agreement commencing as of the Effective Date and for the duration of the Term and any Transition-out Period, Ehave hereby grants to CHT a non-transferable (except as permitted under Section 20(f)), right to: (i) sub-license the use of the Ehave Companion Solution within the Field of Use in the Territory to End Users and their respective Authorized Users, including in operation or by interfacing with other software, hardware, systems, networks and services, in accordance with and subject to the provisions of CHT's Subscription Agreement; and (ii) use the Ehave Companion Solution to support its licensed End Users. Subject to Section 2(e), the grant set out in Clause 2(b)(i) is exclusive such that Ehave shall not license any other Person to, nor may Ehave itself, license, sub-license the use of, or provide services similar to, the Ehave Companion Solution within the Field of Use anywhere in the Territory. (c) Restrictions on Use Any rights not granted herein are strictly reserved by Ehave. CHT shall not, and shall not permit others to, reverse engineer, decompile, disassemble or translate any software used by Ehave to provide the Ehave Companion Solution, or otherwise attempt to view, display or print such software, including its Source Code, except as permitted herein. (d) Prohibition on Competitive Solutions For so long as the appointment set out in Section 2(a) is exclusive, CHT shall not enter into an agreement (a "Competitive Transaction") with any other Person related to the license, sub-license, sale, resale or provide service, solutions, goods or products, that are substantially similar to or competitive with the Ehave Companion Solution. For clarity, a Competitive Transaction shall not include an agreement for use, integration or interfacing, or co-marketing, of the Ehave Companion Solution with other services, solutions, devices, goods or products, where such other services, solutions, devices, goods or products do not contain the same or similar functionality of the Ehave Companion Solution, but provides for a complementary solution. (e) Conversion to Non-Exclusive Notwithstanding anything to the contrary contained herein, the exclusive appointment and license set out in Sections 2(a) and 2(b) shall become non-exclusive if: (i) at any time during the Term hereof, CHT breaches Section 2(d) as determined by arbitration in accordance with Section 19(c) or by a final non-appealable judgment of a court of competent jurisdiction; or (ii) at any time after November 1, 2010 CHT fails to achieve annual revenues of $500,000. (f) No Franchise Agreement The Parties to this Agreement are independent contractors and nothing in this Agreement shall be deemed or constructed as creating a joint venture, partnership, agency relationship, or franchise between Ehave and CHT. Neither Party, by virtue of this Agreement, will have any right, power or authority to act or create an obligation, express or implied, on behalf of the other Party. Each Party assumes responsibility for the actions of their personnel under this Agreement and will be solely responsible for their supervision, daily direction and control, wage rates, withholding income taxes, Canada Pension Plan contributions, employment insurance premiums, disability benefits, or the manner and means through which the work under this Agreement will be accomplished. Except as provided otherwise in this Agreement, CHT has the sole discretion to determine CHT's methods of operation, CHT's accounting practices, the types and amounts of insurance CHT carries, CHT's personnel practices, CHT's advertising and promotion, CHT's customers and CHT's service areas and methods. The relationship created hereby between the parties is solely that of supplier and reseller, and licensor and licensee. + +6. + +Source: EHAVE, INC., 20-F, 5/15/2019 + + + + + +3. DEVELOPMENT AND IMPLEMENTATION OF THE COMPANION SOLUTION (a) Specifications and Implementation Attached hereto as Schedule "1" are the business requirements and technical specifications of the Ehave Companion Solution (the "Specifications"). Attached hereto as Schedule "2" is the development and implementation plan (the "Implementation Plan"), which sets out the procedures and obligations of each of the Parties and the key milestones and timelines in relation to the development and implementation of the Ehave Companion Solution. The Parties acknowledge that at the time of execution of this Agreement that the Specifications and Implementation Plan may not have been fully developed, but that the creation of the Specifications and development of the detailed Implementation Plan will be the first step in respect of the development and implementation of the Ehave Companion Solution, in which case, once approved by the Parties in writing, the Specifications and Implementation Plan so developed will be attached hereto and shall replace Schedules "1" and "2" respectively. Once finalized the Specifications and Implementation Plan may not be changed or modified by either Party, except in accordance with the procedures set out in Section 3(c). (b) Obligations Each of Ehave and CHT shall perform, at their own expense (or as otherwise set out in Schedule "6"), their respective obligations and responsibilities set out in the Implementation Plan as necessary to accomplish the development and implementation of the Ehave Companion Solution in accordance with the milestones and timelines set out therein. CHT acknowledges that the development and implementation of the Ehave Companion Solution requires decisions and input from CHT and for CHT to perform its obligations thereunder in a timely manner. In the event that CHT delays in providing such decisions, input or performance of its obligations, the development and implementation of the Ehave Companion Solution shall be correspondingly delayed. Subject to the foregoing, Ehave acknowledges that time is of the essence with respect to its obligations hereunder and that prompt and timely performance of all such obligations, including all development and implementation dates, timetables, project milestones and other requirements in this Agreement is strictly required. Once the implementation of the Ehave Companion Solution is completed, Ehave shall notify CHT of such completion and that the Ehave Companion Solution is ready for testing in accordance with Section 3(d). + +7. + +Source: EHAVE, INC., 20-F, 5/15/2019 + + + + + +(c) Change Control Process Either Party may request additions, deletions or amendments in respect of the development and implementation of the Ehave Companion Solution ("Change"). Changes shall be requested in writing signed by an authorized representative of the Party requesting the Change ("Change Request"). Ehave shall have no obligation to perform, and CHT shall have no obligation to pay for, services related to any proposed modification or change unless both Parties have agreed to the modifications or changes in writing in accordance with the procedures set forth herein. The Change Request shall include a reasonably detailed description of the scope and nature of the requested Change. If CHT desires a Change, Ehave shall evaluate the feasibility of such change as it relates to the proposed Field of Use. As soon as reasonably possible after receipt of CHT's request, Ehave agrees to provide CHT with a written estimate of the cost, if any, of and the timing to implement the requested Changes as well as any additional terms and conditions related to such Changes. The costs, if any, associated with the development of such estimate shall be borne by CHT. Upon CHT's approval in writing of the cost estimate and any additional terms and conditions related to such Changes, including delivery dates and payment terms provided by Ehave, the Parties shall revise the Specifications and Implementation Plan and shall replace the Specifications and Implementation Plan attached hereto as Schedules "1" and "2", and Ehave shall develop and implement the Change as so agreed. Changes shall be subject to acceptance testing by CHT prior to being deployed into production in accordance with procedures described in Section 3(d) or as otherwise agreed by the parties in writing. Ehave shall not refuse to accept a CHT Change request unless it is unable to make the Change requested using commercially reasonable efforts, in which event Ehave will provide an explanation to CHT; or Ehave and CHT fail to agree on the terms and conditions related to the performance of such Change, including the costs, if any. If a mutually acceptable resolution is not reached in respect of a CHT Change request, the Parties may submit the issue to mediation pursuant to Section 19(b). (d) Acceptance The criteria ("Acceptance Criteria") which the Ehave Companion Solution is to meet and the procedures by which such criteria are to be tested ("Acceptance Procedures") shall be set out in the Implementation Plan and shall follow the requirements set out in this Section 3(d). Once notified by Ehave that the Ehave Companion Solution is ready for acceptance testing, CHT shall perform the tests as set out in the Acceptance Procedures. Unless otherwise set out in the Acceptance Procedures, CHT shall have ten (10) Business Days to perform the acceptance tests as set out in the Acceptance Procedures and to provide Ehave written notice of acceptance or non-acceptance of the Ehave Companion Solution (the "Acceptance Period"). CHT shall not refuse to accept the Ehave Companion Solution unless all or one or more portions of the Solution fail to perform, in any material respect, in accordance with the Acceptance Criteria. Any notice of non- acceptance shall describe the material failure of the Ehave Companion Solution in reasonable detail and CHT shall provide Ehave with reasonably detailed documentation and explanations, together with underlying data, to substantiate the failure and to reasonably assist Ehave in its efforts to diagnose and correct the failure. If CHT gives notice to Ehave of non-acceptance of the Ehave Companion Solution then Ehave shall investigate the reported failure in good faith and correct same, and if the engagement is on a fixed fee basis at no additional cost to CHT, within fifteen (15) Business Days unless an extension is granted by CHT. If, within such fifteen (15) Business day period (or extended period, as applicable), Ehave corrects the failure, then Ehave shall give written notice to CHT certifying that the failure has been corrected, and another Acceptance Period of the same duration as the initial Acceptance Period shall begin and shall be governed by the provisions of this Section 3(d) upon delivery of the corrected Ehave Companion Solution to CHT. If the Acceptance Procedures were conducted three (3) times in respect of the initial implementation of the Ehave Companion Solution, and the eHAve Companion Solution failed to pass the Acceptance Criteria on the third (3rd) try, then, at the discretion of either Party, Ehave may continue to fix the problem, or terminate this Agreement in which case, CHT shall promptly return to Ehave all copies of the Ehave Companion Solution, including the Specifications and any other items delivered to CHT by Ehave thereunder and Ehave shall promptly refund to CHT any monies paid by CHT in respect of the initial development and implementation of the Ehave Companion Solution. If the Acceptance Procedures were conducted three (3) times in respect of a Change, and the Change failed to pass the Acceptance Criteria on the third (3rd) try, then, at the discretion of CHT, Ehave may continue to fix the problem, or terminate the performance of the development of the Change, in which case CHT shall promptly return to Ehave all copies of the Change, including the Specifications thereto and Ehave shall promptly refund to CHT any monies paid by CHT in respect of the development and implementation of the Change. + +8. + +Source: EHAVE, INC., 20-F, 5/15/2019 + + + + + +(e) Deployment Once CHT provides Ehave written notice of acceptance, Ehave will deploy the Ehave Companion Solution or Change, as applicable, by putting the Ehave Companion Solution or Change into production in accordance with, and within the timelines set out, in the Implementation Plan or Change Request, as the case may be. (f) Branding The Ehave Companion Solution may, in the sole discretion of CHT, be branded, marketed, advertised, promoted and sublicensed under CHT Marks. For such purpose, CHT hereby grants to Ehave a non-exclusive, royalty-free, revocable, limited license during the Term and Transition-out Period and within the Territory to use, reproduce, publish and display the CHT Marks solely in connection with the operation of the Ehave Companion Solution for and on behalf of CHT and End Users. Ehave agrees that its use of any CHT Marks will comply with CHT's branding guidelines to the extent made available by CHT to Ehave from time to time and will enure to the benefit of CHT. The CHT Marks are proprietary to CHT and nothing in this Agreement constitutes the grant of a general license for their use. Other than as expressly set forth herein, Ehave does not acquire any right, title or interest in or to any CHT Marks or the goodwill associated therewith. CHT reserves any and all rights in and to the CHT Marks not expressly granted herein. 4. CHT DEVELOPMENTS (a) Development From time to time, CHT may request Ehave to develop functionality that is separate from, but interfaces with the Ehave Companion Solution (the "CHT Developments"). Any such development effort shall be subject to a separate services agreement between the Parties which will set out the respective obligations of the Parties regarding the development and deployment of any CHT Developments, including without limitation assignment or transfer of any rights that Ehave may have in such CHT Developments. (b) APIs If CHT desires a third party to develop any CHT Developments, Ehave shall provide to CHT the specifications of the application program interfaces to permit CHT or such other third party to develop the CHT Developments so that it may inter-operate with the Ehave Companion Solution. (c) License If CHT requires Ehave to host the CHT Developments, then CHT hereby grants to Ehave a royalty-free, non-exclusive, non-transferable, limited right and licence during the Term hereof to use the CHT Developments solely for the purpose of enabling its operation for CHT and its End Users' purposes. 5. GENERAL PERFORMANCE OBLIGATIONS (a) Marketing CHT shall, in good faith and at its own expense: (i) market, advertise, promote and re-license the use of the Ehave Companion Solution to End Users located in the Territory consistent with good business practice, provided that CHT shall have full discretion as to where in the Territory it chooses to do so at any time and from time to time; + +9. + +Source: EHAVE, INC., 20-F, 5/15/2019 + + + + + +(ii) develop and execute a marketing plan sufficient to fulfil its obligations under this Agreement; (iii) have sufficient knowledge of the industry and solutions competitive with the Ehave Companion Solution (including specifications, features and benefits) so as to be able to explain in detail to the End Users: A. the material differences between the Ehave Companion Solution and competing solutions; and B. information on standard protocols and features of the Ehave Companion Solution; (iv) market, advertise, promote and provide the Ehave Companion Solution and conduct business in a manner that at all times reflects favourably on the Ehave Companion Solution and, subject to Section 3(f), the good name, goodwill and reputation of Ehave; and (v) maintain books, records and accounts of all transactions and activities covered by this Agreement and permit reasonable examination thereof by Ehave and its representatives in accordance with this Agreement. (b) Provision to End Users CHT shall require each End User to enter into and execute a subscription agreement in a form and substance satisfactory to Ehave and CHT, acting reasonably, and which contains provisions similar to Ehave's collaboration agreement for the use of the Ehave solution (the "Subscription Agreement"). Ehave shall be a third party beneficiary hereunder, but shall not have any obligations to the End User thereunder. (c) End User Data Pursuant to the Subscription Agreement, CHT shall obtain from each End User the right to and hereby grants, effective upon the execution and delivery of such End User's Subscription Agreement, to Ehave: (i) a royalty-free, non-exclusive, non-transferable, limited right and licence during the term of such Subscription Agreement to use, copy, store and display the End User Data solely for the purpose of enabling Ehave to operate the Ehave Companion Solution for such End User and as may be necessary for the purpose of enabling Ehave to provide support services in accordance with this Agreement; and (ii) a royalty-free, non-exclusive, limited, perpetual right and license to use, copy, store and display End User Data on an aggregated and anonymous basis and so as not to permit the identification of any End User or individual for the sole purpose of improving or developing enhancements to the Ehave Companion Solution , provided that Ehave shall not have any right to use, commercialize or exploit such End User Data in any other manner or for any other purpose. Except for the limited license expressly provided in Section 5(c), nothing contained in this Agreement shall be construed as granting to Ehave or any third party any right, title, or interest in or to any End User Data. Without limiting the foregoing, Ehave agrees that it shall not (i) modify, alter or commercially exploit any End User Data; or (ii) distribute or sell, rent, lease, license or otherwise make any End User Data available to any third party (other than the particular End User to whom the End User Data pertains and its Authorized Users). + +10. + +Source: EHAVE, INC., 20-F, 5/15/2019 + + + + + +(d) Authority to Perform Under this Agreement Each Party shall, at its own expense, obtain and maintain required certifications, credentials, licences and permits necessary to conduct business in accordance with this Agreement. CHT shall obtain all necessary licenses, permits, certifications and credentials to conduct its business. (e) End User Support On and after the launch of the Ehave Companion Solution, CHT shall, at its own expense, ensure that an adequate number of trained, capable and qualified technical personnel with sufficient knowledge of the Ehave Companion Solution are available to provide first line support to assist End Users. If CHT's support personnel are unable to resolve any trouble tickets from an End User, CHT may escalate the trouble ticket to Ehave in accordance with the support procedures set out in Schedule "3". On and after the launch of the Ehave Companion Solution, Ehave shall ensure that an adequate number of trained, capable and qualified technical personnel with sufficient knowledge of the Ehave Companion Solution are available to provide support in accordance with the support procedures set out in Schedule "3". (f) Government Approval If, at any time during the Term, any notification, registration or approval is required to give legal effect in any applicable jurisdiction to this Agreement or the transactions contemplated under this Agreement, CHT shall: (i) immediately take whatever steps may be necessary to properly notify, register or obtain approval; (ii) be responsible for any charges incurred in connection with notifying, registering or obtaining this approval; and (iii) keep Ehave currently informed of its efforts regarding this Section 5(f). Ehave is not obligated to provide access to the Ehave Companion Solution in a particular jurisdiction under this Agreement until CHT has provided Ehave with satisfactory evidence that: (i) this approval, notification or registration is not required or that (ii) it has been obtained. At CHT's cost and expense, Ehave shall provide reasonable assistance and cooperation to CHT as CHT may reasonably request in its efforts to obtain or provide any such approval, notification or registration, provided that, CHT shall at all times retain full discretion as to where in the Territory it chooses to market, promote, advertise and/or sublicense the Ehave Companion Solution. (g) Prohibited Acts Notwithstanding anything to the contrary in this Agreement, neither CHT nor CHT personnel shall: (i) make any representations, conditions, warranties, guarantees, indemnities, similar claims or other commitments: A. actually, apparently or ostensibly on behalf of Ehave, or B. to any End User regarding the Ehave Companion Solution, which representations, conditions, warranties, guarantees, indemnities, similar claims or other commitments are additional to or inconsistent with any then-existing representations, conditions, warranties, guarantees, indemnities, similar claims or other commitments in this Agreement or any written or electronic documentation provided by Ehave to CHT; or + +11. + +Source: EHAVE, INC., 20-F, 5/15/2019 + + + + + +(ii) engage in any unfair, competitive, misleading or deceptive practices respecting Ehave, Ehave's Trade-marks or the Ehave Companion Solution, including any product disparagement or "bait-and-switch" practices. 6. EHAVE COMPANION SOLUTION (a) Provision and Access to Ehave Companion Solution Once deployed, Ehave shall operate, support and maintain the Ehave Companion Solution in accordance with the terms of this Agreement, including the Support Procedures set out in Schedule "3", the Service Level Commitments set out in Schedule "4" and the Security Requirements set out in Schedule "5". Access to the Ehave Companion Solution may be through a secure connection with the public Internet. CHT acknowledges and agrees that Ehave is not responsible or liable for any communication over the public Internet. (b) Security Requirements Ehave shall implement and maintain those safeguards and controls set out in Schedule "5" to deter and for the detection, prevention and correction of any unauthorized intrusion, access or use of the Ehave Companion Solution, as well as to protect against any loss, theft or unauthorized access, use, disclosure, copying, or modification of End User Data. CHT acknowledges and agrees, and shall obtain such acknowledgement and agreement from its End Users, that notwithstanding the Security Requirements, such methods and procedures may not prevent unauthorized electronic intruders to access the Ehave Companion Solution through the Internet or through other form of electronic communication. If such unauthorized electronic intruders are able to bypass Ehave's security protocols, firewall and safeguards, such unauthorized electronic intruder may change, delete or otherwise corrupt the contents and data contained in the Ehave Server, including any End User Data. Except for the maintenance of appropriate firewall and safeguards in compliance with the Security Requirements, which are designed to frustrate access from unauthorized electronic intruders, Ehave shall not be liable to CHT or to any of its End users, and hereby disclaims responsibility, with respect to any action, destructive or otherwise, by any unauthorized electronic intruder. (c) Maintenance From time to time, it will be necessary for Ehave to perform maintenance on the Ehave Companion Solution. Such maintenance includes routine maintenance to ensure the continued provision of the Ehave Companion Solution or upgrading, updating or enhancing the Ehave Companion Solution. Ehave shall use its commercially reasonable efforts to perform such maintenance at such times within the designated maintenance windows set forth in Schedule "3" to minimize the impact of any downtime of the Ehave Platform to CHT and its End Users. To the extent Ehave is able, Ehave shall notify CHT at least 48 hours in advance of any scheduled maintenance by sending an email to the designated CHT Service Manager of the scheduled maintenance time and the anticipated duration of such maintenance. (d) Changes to Service Ehave may, at any time, with or without written notice (except in cases where such change may affect the manner in which the Services are delivered, in which case, Ehave shall use reasonable efforts to provide advance written notice, but in any event as soon as reasonably possible thereafter) to CHT (i) make changes to the Ehave Companion Solution that are necessary to comply with applicable safety, security or other statutory requirements or orders from applicable Governmental Authorities; (ii) supplement or make changes to its user documentation and to its rules of operations, access procedures, security and privacy procedures and policies, provided such changes do not materially adversely affect CHT or its End Users; and (iii) change the components, type and location of the Ehave Platform, provided that such changes do not adversely affect the performance, features, functionality or security of the Ehave Companion Solution. + +12. + +Source: EHAVE, INC., 20-F, 5/15/2019 + + + + + +(e) Authentication IDs CHT shall, and shall require its End Users to, control and maintain the security of all Authentication IDs. As between CHT and Ehave, CHT shall be solely responsible for all instructions, commitments and other actions or communications taken under any of CHT's Authentication IDs. CHT shall promptly report to Ehave any errors or irregularities in the Ehave Companion Solution or the Ehave Platform or any unauthorized use of any part thereof that come to CHT's attention and inform Ehave immediately if CHT becomes aware that any Authentication ID becomes known to any third person who is not authorized to possess such password. (f) End User Data CHT acknowledges and agrees that Ehave: (i) will not be responsible for the accuracy, completeness or adequacy of any End User Data or the results generated from any End User Data uploaded to and processed by the Ehave Companion Solution in accordance with the Specifications; (ii) has no control over any End User Data or the results therefrom; (iii) does not purport to monitor End User Data; and (iv) shall not be responsible to back up or maintain any back up of the End User Data or portion thereof. (g) Viruses If Ehave, in its absolute discretion, forms the view that any End User Data or any other information or files uploaded by CHT or any of its End User and their Authorized Users contains or includes a Virus or is reasonably considered Objectionable Content, Ehave may remove such End User Data, information or file from the Ehave Companion Solution and take such other action as Ehave deems necessary to protect the integrity and operation of the Ehave Companion Solution. Any reasonable costs associated with such removal may be charged by Ehave to CHT. Ehave shall notify CHT of its actions under this Section 6(g) as soon as reasonably possible. 7. ROYALTIES AND PAYMENT (a) Royalties The Royalties and payment terms are as set out in Schedule "6". The Royalties do not include applicable taxes. CHT agrees to pay the Royalties and applicable taxes in accordance with the payment terms as set out in Schedule "6". (b) Taxes: CHT shall pay any and all applicable taxes, however designated or incurred, which are payable by it pursuant to Applicable Law as a result of or otherwise in connection with the transactions contemplated in this Agreement including, without limitation, federal, provincial and local, excise, sales, use, goods and services, harmonized, value added and any similar taxes, except for any taxes based on Ehave's net income. (c) Interest on Late Payments: Where CHT fails to pay any amount in accordance with the payment terms set out in Schedule "6", Ehave shall have the right, in addition to any other rights or remedies available to it, to charge, and CHT shall pay, interest on such overdue amounts at the rate of 1% per month calculated daily, compounded monthly (12.68% per annum) both before and after any court judgement in respect of the same from the date such payment was due. + +13. + +Source: EHAVE, INC., 20-F, 5/15/2019 + + + + + +8. AUDIT RIGHTS (a) Ehave Right to Audit CHT will provide Ehave and its representatives, auditors and inspectors ("Auditors") upon ten (10) Business Days prior written notice with reasonable access, during business hours, to all facilities, systems and assets used by CHT, to CHT personnel and subcontractors and to all relevant CHT books and records, in each case, to the extent relevant to this Agreement, in order to conduct appropriate audits, examinations and inspections ("Audits") to: (i) verify compliance with the requirements set out in this Agreement; and (ii) verify the Royalty calculations. (b) Principles Regarding Audits CHT shall provide to Ehave and its Auditors any assistance they may reasonably require to conduct such Audits. Audits may be conducted once a calendar year, provided that the foregoing limit shall not apply where an audit discovered an overcharge of 5% or more, in which case, Ehave may conduct another audit sooner. No period shall be audited more than once. Costs incurred by Ehave in connection with any audit or inspection conducted shall be borne by Ehave. Notwithstanding the foregoing, if an Audit reveals that CHT underpaid Ehave for any Royalties hereunder, by more than five percent (5%) of the total Royalties paid during the period being audited, CHT shall promptly reimburse Ehave for all reasonable third party expenses incurred by Ehave in connection with such Audit. In all cases CHT shall promptly pay Ehave in full for any underpayments revealed by an Audit. All information obtained by Ehave and its Auditors during any such Audit shall be kept confidential and shall be considered CHT's Confidential Information. Ehave shall impose confidentiality obligations on its Auditors that are substantially similar to those under Section 13 and shall be responsible for any breach of confidentiality by its Auditors. (c) Records CHT shall keep detailed records and books of account with supporting vouchers, invoices and other documentation showing all expenditures, charges and related calculations of whatsoever nature made by it in the performance of its obligations under this Agreement. CHT shall retain such records for the greater of: (i) three (3) years; or (ii) the period required by Applicable Laws. (d) Security Audit On an annual basis, Ehave shall conduct and provide CHT the results of an audit conducted in accordance with the Statement on Standards for Attestation Engagements (SSAE) No. 18, Service Organization Control (SOC) 2 Report type audit or similar audits in respect of its operations. Ehave shall also provide CHT written notice and detail of any deficiencies that Ehave's auditors (whether internal or external) found through the conduct of such audits and the remediation efforts that Ehave shall undergo to rectify such deficiencies. Ehave shall promptly rectify any deficiencies identified that may materially and adversely impact the Ehave Companion Solution or End User Data, and shall provide CHT with such information as CHT may reasonably request from time to time with respect to its security controls including any remediation efforts undertaken to rectify any deficiencies. 9. TERM This term of this Agreement and the rights and obligations of the Parties hereto shall commence as of the Effective Date and shall continue in perpetuity (the "Term"), unless terminated earlier in accordance with the provisions contained herein. + +14. + +Source: EHAVE, INC., 20-F, 5/15/2019 + + + + + +10. SUSPENSION AND TERMINATION (a) Suspension of Services: Subject to the provisions of this Section, in the event that CHT does not pay the Royalties or any portion thereof, when due, Ehave may immediately suspend CHT's and each of its End Users' right to access and use the Ehave Companion Solution. However, Ehave shall not suspend CHT's or its End Users' right to access and use the Ehave Companion Solution or any End User Data by reason of CHT's good faith withholding of any payment or amount, or in the event of any payment dispute between the parties arising under or concerning this Agreement, in each case, unless and until such dispute is resolved pursuant to Section 19, provided that CHT shall have a period of five (5) Business Days to pay any amount agreed to in settlement or determined by arbitration pursuant to Section 19 to be payable by it. (b) CHT's Right to Terminate: Subject to Sections 10(e) and 10(g), CHT may terminate this Agreement and the rights granted hereunder, in whole or in part, without prejudice to enforcement of any other legal right or remedy (including any express termination right set forth elsewhere in this Agreement), immediately upon giving written notice of such termination if Ehave: (i) breaches any material provision of this Agreement and such breach continues for a period of twenty (20) Business Days after delivery of a written notice by CHT requiring Ehave to correct such failure; or (ii) becomes or is adjudicated insolvent or bankrupt, admits in writing its inability to pay its debts as they mature, or makes an assignment for the benefit of creditors; or Ehave applies for or consents to the appointment of any receiver, trustee or similar officer for it or for all or any substantial part of its property; or such receiver, trustee or similar officer is appointed without the consent of Ehave; or Ehave institutes any bankruptcy, insolvency, reorganization, moratorium, arrangement, readjustment or debt, dissolution, liquidation or similar proceeding relating to it under the laws of any jurisdiction, or any such proceeding is instituted against Ehave and is not dismissed within sixty (60) Business Days; or any judgment, writ, warrant or attachment or execution of similar process is issued or levied against a substantial part of Ehave's property and remains unsatisfied for sixty (60) Business Days. In addition, CHT may terminate this Agreement and the rights granted hereunder, in whole or in part, and without prejudice to enforcement of any other legal right or remedy (including any express termination right set forth elsewhere in this Agreement), at any time without cause, by providing at least thirty (30) Business Days prior written notice to Ehave, but subject to payment of a termination fee equal to an amount set out in Schedule 6. (c) Ehave's Right to Terminate: Subject to Sections 10(e) and 10(g), Ehave may terminate this Agreement and the rights granted hereunder without prejudice to enforcement of any other legal right or remedy, immediately upon giving written notice of such termination if CHT: (i) fails to pay in full any sum owing by it under this Agreement by the due date thereof (other than any sum the payment of which is disputed by CHT in good faith and withheld pending resolution of such dispute in accordance with Section 19) and such failure continues for a period of ten (10) Business Days after delivery of a written notice by Ehave requiring CHT to correct such failure; + +15. + +Source: EHAVE, INC., 20-F, 5/15/2019 + + + + + +(ii) breaches any other material provision of this Agreement and such breach continues for a period of twenty (20) Business Days after delivery of a written notice by Ehave requiring CHT to correct such failure; or (iii) becomes or is adjudicated insolvent or bankrupt, admits in writing its inability to pay its debts as they mature, or makes an assignment for the benefit of creditors; or CHT applies for or consents to the appointment of any receiver, trustee or similar officer for it or for all or any substantial part of its property; or such receiver, trustee or similar officer is appointed without the consent of CHT; or CHT institutes any bankruptcy, insolvency, reorganization, moratorium, arrangement, readjustment or debt, dissolution, liquidation or similar proceeding relating to it under the laws of any jurisdiction, or any such proceeding is instituted against CHT and is not dismissed within sixty (60) Business Days; or any judgment, writ, warrant or attachment or execution of similar process is issued or levied against a substantial part of CHT's property and remains unsatisfied for sixty (60) Business Days. (d) Waiver: The waiver by either Party of a breach or default of any provision of this Agreement by the other Party shall not be effective unless in writing and shall not be construed as a waiver of any succeeding breach of the same or of any other provision. Nor shall any delay or omission on the part of either Party to exercise or avail itself of any right, power or privilege by such Party shall constitute a waiver. (e) Effect of Termination: Upon the termination of this Agreement for any reason, subject to and without limiting the provisions of Section 12: (i) the Parties shall implement the Transition-Out Services pursuant to Section 10(f); (ii) at the end of the Transition-out Period (or earlier upon CHT's request) Ehave shall terminate and invalidate any Authentication IDs associated with CHT and any of its End Users; (iii) Ehave shall, but not earlier than twenty (20) Business Days after the later of termination or expiration of this Agreement or the Transition-out Period, destroy any copies of the End User Data contained in the Ehave Companion Solution and certify in writing to CHT that it has done so; (iv) CHT shall pay to Ehave the full amount of all Royalties payable hereunder as of the date of termination, if any, whether already invoiced or not (including any amounts due as late payment charges), and any other monies owing to Ehave hereunder; and (v) each Party will return to the other Party, or at the other Party's written request, destroy, in a secure manner all Confidential Information of the other Party which is then in its possession or control and certify in writing that it has done so. CHT acknowledges and agrees if any End User fails to download its End User Data from the Ehave Companion Solution in a timely manner (i.e. on or before the later of termination or expiry of this Agreement and the Transition-out Period), it may not have access to such information or such information may be destroyed by Ehave in accordance with the terms of this Section 10(e). Subject to Section 10(f), it is CHT's and each End User's responsibility to download and obtain all the End User Data on or prior to the termination of this Agreement or expiry of the Transition-out Period (whichever is later). Ehave shall have no responsibility for maintaining or providing to CHT or to any of its End Users the End User Data or any portion thereof, or any liability to CHT or any End User for destroying End User Data, in either case, from and after the twentieth (20th) Business Day after the termination or expiration of this Agreement or the Transition-out Period, whichever later. + +16. + +Source: EHAVE, INC., 20-F, 5/15/2019 + + + + + +(f) Transition Assistance: Without limiting the provisions of Section 11, commencing on the delivery of any notice of termination of this Agreement, and continuing through the effective date of termination and for a period of sixty (60) Business Days thereafter (the "Transition-out Period"), Ehave will, to the extent requested by CHT, provide to CHT (or at CHT's request to CHT's End User) such reasonable cooperation, assistance and services to facilitate the orderly wind down, transition and migration and transfer of the End User Data from Ehave to CHT (the "Transition-out Services"). (g) Survival of Covenants: Notwithstanding the termination or expiration of this Agreement for any reason, the covenants set out in this Section 10(g) and in Sections 7(c), 10(e), 10(f), 11, 12, 13, 14(c), 15, 16, 17, 19, 20(a) and those provisions set out in Section 1 as necessary to interpret the foregoing provisions, of this Agreement shall survive any such termination or expiration. 11. OWNERSHIP (a) Ehave's Ownership CHT acknowledges and agrees that, as between CHT and Ehave, Ehave owns all worldwide right, title and interest, including all Intellectual Property Rights, in and to the Ehave Companion Solution, including any developments, enhancements or customizations made as a result of Section 3 and any modifications, enhancements, upgrades, updates or Customization subsequent to the development and implementation in accordance with Section 3, excluding, however, any CHT Developments. CHT does not acquire any rights, title or ownership interests of any kind whatsoever, express or implied, in any of the foregoing other than the licenses granted herein. (b) CHT's Ownership Ehave acknowledges and agrees that, as between Ehave and CHT, CHT owns all worldwide right, title and interest, including all Intellectual Property Rights, in and to the CHT Developments. Ehave does not acquire any rights, title or ownership interests of any kind whatsoever, express or implied, in any of the foregoing other than the licenses granted herein. Further, as between CHT and Ehave, (i) CHT (or its End User) is and will remain the sole and exclusive owner of all right, title, and interest in and to End User Data, including all Intellectual Property Rights therein and/or relating thereto, subject only to the limited license granted in Section 5(c), and (ii) End User Data and CHT Developments are and will be the Confidential Information of CHT. CHT and End Users shall at all times, including in the event of termination of this Agreement and for a period thereafter as set out in Section 10(e), have access to their respective End User Data and the ability to download and/or export their End User Data out of the Ehave Companion Solution. + +17. + +Source: EHAVE, INC., 20-F, 5/15/2019 + + + + + +12. ESCROW (a) Escrow Agreement (i) Concurrently with execution of this Agreement or, at CHT's option, as soon as practicable after the Effective Date but in no event later than CHT's acceptance of and the launch of the Ehave Companion Solution, CHT and Ehave shall enter into a Source Code Escrow Agreement with a reputable software escrow agent mutually acceptable to the Parties ("Escrow Agent"), in or substantially in the form attached hereto as Schedule "7", or otherwise in a form acceptable to the Parties, acting reasonably, and to the Escrow Agent (the "Escrow Agreement"), providing for the release of the Source Code for the Software, as modified pursuant to Section 3 and all necessary programming documentation, utilities and tools used by Ehave to maintain the Software and to compile the source code into object code (excluding third party utilities and tools licensed by Ehave for which Ehave has not been granted the right to sublicense or otherwise make available such utilities and tools to third parties without additional charge, but including such information as necessary for CHT to obtain licenses to and obtain such third party utilities and tools), all in its then-existing form, to CHT, in the certain circumstances expressly stated in Section 12(b). The Escrow Agreement shall provide that the Software, including the Source Code and object code, Specifications and related documentation are and shall be deemed to be "intellectual property" and the rights under the Escrow Agreement and the license granted under Section 12(a)(iii) are deemed to be "rights to use intellectual property" for purposes of section 65.11(7) of the BIA and section 32(6) of the CCAA. (ii) Upon release of the Source Code by the Escrow Agent to CHT pursuant to the terms and conditions of the Escrow Agreement, Ehave hereby warrants that such Source Code and other materials are and will be the then current version of the Software as used by CHT in its provision to End Users of the eEhave Companion Solution under the Subscription Agreements and that Ehave shall throughout the Term keep the Source Code so deposited with the Escrow Agent current by periodically submitting material updates to the Escrow Agent from time to time, as necessary. Save and except for express warranties specified in this Agreement and the Escrow Agreement, Ehave specifically disclaims all other warranties, express or implied, including, without limitation, any warranty of merchantability and fitness for a particular purpose. (iii) In connection with the exercise of CHT's rights under the Escrow Agreement, Ehave hereby grants to CHT a non- exclusive, non-transferable (except as set forth in Section 20(f)), right and license to use and copy the materials deposited with the Escrow Agent, including the Source Code, its Specifications and documentation, and any resulting corrections, repairs, translations, enhancements, and other derivative works and improvements made by CHT, for the sole purposes of providing to CHT the ability to operate, support and maintain, the Ehave Companion Solution for its End Users from time to time, until such time that CHT is able to migrate off the Ehave Companion Solution, but in any event not exceeding twelve months from the date of release of the materials from escrow. CHT may use third parties to perform its foregoing rights, provided that any such third parties are not competitors of Ehave and shall be subject to confidentiality obligations. CHT expressly agrees, however, that CHT shall not exercise any of the foregoing right and license unless and until CHT obtains such Source Code from the Escrow Agent. CHT's obligations with respect to confidentiality and use of the Source Code shall be equivalent to CHT's obligations set forth in Section 13 of this Agreement. Notwithstanding any release of the Source Code pursuant to the provisions hereof, Ehave shall retain sole ownership of and other proprietary rights with respect to the Source Code (including any Source Code relating to any modifications made by CHT to the Source Code, all of which shall be owned by Ehave). CHT shall be responsible for all of the Escrow Agent's fees and charges under the Escrow Agreement. + +18. + +Source: EHAVE, INC., 20-F, 5/15/2019 + + + + + +(b) Release Conditions The parties acknowledge and agree that a "Release Condition" for purposes of the Escrow Agreement shall be deemed to mean any one or more of the following listed events (in addition to any other event specified as a release condition under the Escrow Agreement): (i) Ehave makes a general assignment for the benefit of creditors; (ii) Ehave voluntarily institutes any bankruptcy, insolvency, reorganization, moratorium, arrangement, readjustment or debt, dissolution, liquidation or similar proceeding relating to it under the laws of any jurisdiction, or any such proceeding is instituted against Ehave and is not dismissed within sixty (60) Business Days; or any judgment, writ, warrant or attachment or execution of similar process is issued or levied against a substantial part of Ehave's property and remains unsatisfied for sixty (60) Business Days; or Ehave applies for or consents to the appointment of any receiver, trustee or similar officer for it or for all or any substantial part of its property; or such receiver, trustee or similar officer is appointed without the consent of Ehave; (iii) Ehave consents to the filing of a petition of bankruptcy against it; (iv) a petition of bankruptcy is filed against Ehave which is not discharged within sixty (60) days; (v) Ehave becomes or is adjudicated by a court of competent jurisdiction as being bankrupt or insolvent or admits in writing its inability to pay its debts as they mature; Ehave ceases doing business as a going concern; (vi) Ehave undergoes a change of control or is a party to a merger or amalgamation; (vii) Ehave takes steps to dissolve, liquidate, wind up or otherwise terminate its existence; (viii) Ehave has terminated its provision of or ceased to provide the Ehave Companion Solution or support services for a continuing period of fifteen (15) Business Days or more, except pursuant to the termination of this Agreement by Ehave in accordance with its rights contained hrein. (c) Effect of Bankruptcy All of the Software, including the Source Code and object code, the Specifications and related documentation, and all other escrow deposit materials constitute "intellectual property" and all rights and licenses granted by Ehave to CHT under this Agreement or the Escrow Agreement (which is supplementary to this Agreement) are and shall be deemed to be licenses and "rights to use intellectual property" by CHT for the purposes of and as such terms are used and interpreted under section 65.11(7) of the BIA and section 32(6) of the CCAA. CHT shall have the right to exercise all rights and elections under the BIA and CCAA and all other applicable bankruptcy, insolvency and similar laws with respect to this Agreement, the Escrow Agreement and the subject matter hereof and thereof. Without limiting the generality of the foregoing, if Ehave or its estate becomes subject to any bankruptcy or similar proceeding subject to CHT's rights of election, all rights and licenses granted to CHT under this Agreement and the Escrow Agreement will continue subject to the respective terms and conditions hereof and thereof, and will not be affected, even by Ehave's rejection of this Agreement or the Escrow Agreement. + +19. + +Source: EHAVE, INC., 20-F, 5/15/2019 + + + + + +13. CONFIDENTIALITY (a) Obligation: Each Party acknowledges that all Confidential Information consists of confidential and proprietary information of the disclosing Party. Each Party shall, and shall cause its employees, agents and contractors to hold Confidential Information of the other Party in confidence, and shall use the same degree of care by instruction, agreement or otherwise, to maintain the confidentiality of the other Party's Confidential Information that it uses to maintain the confidentiality of its own Confidential Information, but with at least a reasonable degree of care commensurate with the nature and importance of such Confidential Information. Each Party agrees not to make use of Confidential Information other than for the exercise of rights or the performance of obligations under this Agreement (and the Source Code Escrow Agreement), and not to release, disclose, communicate it or make it available to any third person other than employees, agents and contractors of the Party who reasonably need to know it in connection with the exercise of rights or the performance of obligations by such Party under this Agreement (and the Source Code Escrow Agreement) and who are bound by confidentiality and restricted use obligations at least as protective of the Confidential Information as those set forth herein. Each Party agrees to notify the other Party in writing promptly of any loss or unauthorized disclosure or use of such other Party's Confidential Information and cooperate with such other Party to protect the confidentiality and ownership of all Intellectual Property Rights and other rights therein. (b) Subpoena: In the event that any Party receives a request to disclose all or any part of the Confidential Information of the other Party under the terms of a valid and effective subpoena or order issued by a court of competent jurisdiction or by a Governmental Authority, such Party agrees to (i) immediately notify the other Party of the existence, terms and circumstances surrounding such a request; (ii) consult with the other Party on the advisability of taking legally available steps to resist or narrow such request; and (iii) if disclosure of such Confidential Information is required, exercise its commercially reasonable efforts to obtain, and/or assist the other Party to obtain, at the other Party's expense, an order or other reliable assurance that confidential treatment will be accorded to such portion of the disclosed Confidential Information which the other Party so designates. (c) Injunctive Relief: Each Party acknowledges and agrees that any unauthorized use or disclosure by it of any of the other Party's Confidential Information, in whole or part, will cause irreparable damage to the disclosing Party, that monetary damages would be an inadequate remedy and that the amount of such damages would be extremely difficult to measure. The receiving Party agrees that the disclosing Party shall be entitled to seek temporary and permanent injunctive relief to restrain the receiving Party from any unauthorized disclosure or use. Nothing in this Agreement shall be construed as preventing the disclosing Party from pursuing any and all remedies available to it for a breach or threatened breach of a covenant made in this Section 13, including the recovery of monetary damages from the receiving Party. + +20. + +Source: EHAVE, INC., 20-F, 5/15/2019 + + + + + +14. REPRESENTATIONS, WARRANTIES AND DISCLAIMERS (a) Mutual Representations of the Parties: Each Party represents to the other that: (i) it is a company duly organized, validly existing and in good standing under the laws of its incorporation and it has full power and authority to enter into this Agreement and to perform each and every covenant and agreement herein contained; (ii) this Agreement has been duly authorized, executed and delivered by it and constitutes a valid, binding and legally enforceable agreement of it; (iii) the execution and delivery of this Agreement, and the performance of the covenants and agreements herein contained, are not, in any manner or to any extent, limited or restricted by, and are not in conflict with, any commercial arrangements, obligations, contract, agreement or instrument to which it is either bound or subject; and (iv) the execution and delivery of this Agreement and the performance of its covenants and agreements herein contained shall comply in all respects with all laws and regulations to which it or its business is subject. (b) Additional representations of Ehave: Ehave represents to CHT that Ehave possesses the knowledge, skill and experience necessary for the provision and completion of the Ehave Companion Solution in accordance with the terms of this Agreement. (c) Warranties Ehave warrants that for the duration of the Term, (i) the Ehave Companion Solution will substantially conform to and operate in accordance with, and have the functions and features set out in, the Specifications, and any related documentation provided by Ehave, and any such documentation shall be complete and accurate in all material respects; and the Ehave Companion Solution will not contain any material undocumented feature; (ii) Ehave has implemented and will maintain industry standard protection for the detection, protection and removal of Viruses; (iii) Ehave will perform all services under this Agreement in a timely, professional and workmanlike manner using personnel of required skill, experience and qualifications, and will devote adequate resources to meet its obligations (including the Service Level Commitments and its support obligations) hereunder; (iv) it has or will have all necessary right, power and authority, including all licenses and Intellectual Property Rights required, to provide and operate the Ehave Companion Solution and to grant all rights and licenses granted or required to be granted by it under this Agreement; and (v) Ehave is not aware of any infringement or misappropriation claims by any third party in relation to the Ehave Companion Solution. + +21. + +Source: EHAVE, INC., 20-F, 5/15/2019 + + + + + +(d) Exclusion of Other Warranties: Except as otherwise expressly stated in this Agreement, there are no express or implied warranties or conditions in relation to the Ehave Companion Solution that are the subject matter of this Agreement, including implied warranties or conditions of merchantable quality, fitness for a particular purpose, or non-infringement, or that the Ehave Companion Solution will meet CHT's or any End Users' needs or will be available for use at any particular time or will be error free. Under no circumstances will Ehave be liable for the results of CHT or any of its End Users' misuse of the Ehave Companion Solution, including any use contrary to Applicable Law. 15. INSURANCE (a) Required Insurance: Both Parties shall, at all times during the currency of this Agreement and for a period of one (1) year after the termination or expiration of this Agreement, maintain the following policies of insurance in effect: (i) a comprehensive general liability insurance policy, with minimum coverage of $1,000,000 per occurrence and in the annual aggregate for product liability and completed operations, covering bodily and personal injury, including death, and property damage, including loss of use; and (ii) an information and network technology blended liability insurance policy with an insured limit of at least $1,000,000 in the aggregate. (b) Evidence of Insurance: Upon the execution of this Agreement or at any time at a Party's request during the term of this Agreement, the other Party shall provide the requesting Party with evidence of the aforementioned insurance coverage in the form of a certificate of insurance acceptable to the requesting Party. In the event of any material change or cancellation of the required insurance policies, the applicable Party will provide the other Party with thirty (30) calendar days' prior written notice and will promptly replace such insurance policy in accordance with this Section 15, without lapse in coverage. 16. INDEMNITIES (a) Intellectual Property Indemnity Ehave shall defend at its own expense any claim, proceeding or suit (a "Claim") brought against CHT and/or any of its directors, officers, employees, agents, subcontractors, affiliates and/or End Users (collectively, the "CHT Indemnified Parties") to the extent such Claim alleges that the Ehave Companion Solution furnished hereunder or the use thereof by CHT or its End Users as authorized hereunder or in any Subscription Agreement infringes any copyright, Canadian patent, or registered trademark of a third person, and will indemnify and hold harmless the CHT Indemnified Parties from and against any and all related liabilities, costs, losses, damages and expenses (including reasonable legal fees) arising out of or in connection with or relating to any such Claim, provided that: (i) Ehave is given prompt written notice of the Claim or of any allegations or circumstances known to CHT which could reasonably result in a Claim; (ii) Ehave is given all reasonable information and assistance from CHT, at Ehave's expense, which Ehave may require to defend the Claim; + +22. + +Source: EHAVE, INC., 20-F, 5/15/2019 + + + + + +(iii) Ehave is given sole control of the defence of the Claim, and all negotiations for the settlement or compromise thereof, provided that Ehave shall promptly engage competent counsel and initiate defence in a professional manner and CHT may observe or participate in such proceedings with its own counsel at its own expense; and (iv) the alleged infringement does not result from any non-permitted uses, alterations, modifications or enhancements carried out by CHT, any End User or on its or their behalf by a third person (other than any Ehave personnel or contractors). If such Claim has occurred, or in Ehave's opinion is likely to occur, without limiting Ehave's obligation to defend and indemnify the CHT Indemnified Parties as aforesaid, Ehave may, at its option and expense, either procure for CHT the right to continue using the Ehave Companion Solution in accordance with this Agreement or modify or replace the same so that it becomes non-infringing without loss of functionality, or if none of the foregoing alternatives is reasonably available and at Ehave's discretion, discontinue the use of the Ehave Companion Solution on not less than sixty (60) Business Days' prior written notice to CHT and its End Users. The foregoing states the entire obligations of Ehave with respect to any infringement of Intellectual Property Rights of any third Person. (b) CHT' Indemnity CHT shall defend at its own expense any Claim brought against Ehave, its affiliates, directors, officers, employees and agents, to the extent such Claim: (i) alleges, directly or indirectly, that any End User Data infringes any Canadian copyright, patent or registered trademark of a third person; alleges, directly or indirectly, that the End User Data contains any Objectionable Content; (ii) arises through a breach by CHT of its obligations set out in Section 5(g); or (iii) is in relation to any of its End Users' use of the Ehave Companion Solution, including contrary to Applicable Law, except however to the extent as Ehave has indemnified CHT pursuant to Section 16(a); provided that CHT is given: (i) prompt written notice of the Claim or of any allegations or circumstances known to Ehave which could result in a Claim; (ii) all reasonable information and assistance from Ehave, at CHT's expense, which CHT may require to defend the Claim; and (iii) sole control of the defence of the Claim, and all negotiations for its settlement or compromise thereof. 17. LIMITATION OF LIABILITY (a) Consequential Damages Subject to Section 17(c), in no event shall either Party be liable to the other for any consequential, incidental, exemplary or punitive damages even if advised in advance of the possibility of such damages. Further, subject to Section 17(c), neither Party shall not be liable to the other Party for any lost revenue, lost profit or lost savings. (b) Limitation of Direct Damages Subject to Section 17(c), in no event shall either Party's liability under this Agreement exceed the aggregate of all amounts paid under this Agreement and amounts that have accrued but not yet been paid in the twelve (12) months preceding the event giving rise to the claim. + +23. + +Source: EHAVE, INC., 20-F, 5/15/2019 + + + + + +(c) Exceptions to Limitations Notwithstanding Sections 17(a) and 17(b), neither Party excludes or limits any liability for: (i) personal injury or death to the extent that such injury or death results from the negligence or wilful misconduct of a Party or its employees or subcontractors; (ii) fraud, fraudulent misrepresentation or fraudulent concealment; (iii) the Party's obligations set out in Sections 2(c), 5(b), 5(c), 6(b), 11, 13 or 16; (iv) CHT's payment obligations under Section 7; or (v) willful misconduct or gross negligence. (d) Application of Limitations and Exclusions The limitations and exclusions set out in this Section shall apply whether a claim, demand or action is based in contract, tort (including negligence), or otherwise. 18. FORCE MAJEURE Except for any obligation to make payments, any delay or failure of either Party to perform its obligations under this Agreement or under any Schedule attached hereto shall be excused if, and to the extent, that the delay or failure is caused by an event or occurrence beyond the reasonable control of the Party and without its fault or negligence and that could not have been prevented or avoided by the exercise of reasonable due diligence, such as, by way of example and not by way of limitation, acts of God, action by any Governmental Authority (whether valid or invalid), fires, flood, wind storms, explosions, riots, natural disasters, wars, terrorist acts, sabotage, labour problems (including lock-outs, strikes and slow downs, except for any labour problems of the Party claiming a force majeure event), or court order or injunction; provided that written notice of delay (including anticipated duration of the delay) shall be given by the affected Party to the other Party within two (2) Business Days of the affected Party first becoming aware of such event and the affected Party shall use diligent efforts to end the failure or delay and minimize the effects of such force majeure event. In the event that the force majeure event lasts for fifteen (15) Business Days or longer, either Party shall have the option to terminate this Agreement upon written notice to the other without liability. 19. DISPUTE RESOLUTION (a) Discussions: Each Party agrees to utilize all reasonable efforts to resolve any dispute, whether arising during the term of this Agreement or at any time after the expiration of termination of this Agreement, which touches upon the validity, construction, meaning, performance or effect of this Agreement or the rights and liabilities of the Parties or any matter arising out of or connected with this Agreement, promptly and in an amicable and good faith manner by negotiations between the Parties. + +24. + +Source: EHAVE, INC., 20-F, 5/15/2019 + + + + + +(b) Mediation: Either Party may submit a dispute to mediation by providing written notice to the other Party. In the mediation process, the Parties will try to resolve their differences voluntarily with the aid of a single, impartial mediator, who shall attempt to facilitate negotiations. The mediator shall be selected by agreement of the Parties. If the Parties cannot otherwise agree on a mediator within five (5) Business Days, a single mediator shall be designated by the ADR Institute of Canada, Inc. or any successor organization ("ADR") at the request of a Party. Any mediator so designated must not have a conflict of interest with respect to any Party. The mediation shall be conducted as specified by the mediator and agreed upon by the Parties. The Parties agree to discuss their differences in good faith and to attempt, with the assistance of the mediator, to reach an amicable resolution of the dispute. The mediation shall be treated as a settlement discussion and therefore shall be confidential. The mediator may not testify for either Party in any later proceeding relating to the dispute. No recording or transcript shall be made of the mediation proceedings. Each Party shall bear its own costs and legal fees in the mediation. The Parties shall share the fees and expenses of the mediator equally. (c) Arbitration: Subject to Section 19(d), any dispute that has proceeded through mediation established in Section 19(b) without resolution may be submitted to arbitration. Any arbitration conducted pursuant to this Agreement shall take place in the City of Toronto, Ontario. The costs of the arbitration shall be borne equally by the Parties or as may be specified in the arbitrator's decision. The provisions of the Arbitration Act of Ontario, as amended, except as otherwise provided in this Agreement shall govern the arbitration process. The Parties agree to exclude the appeal provisions of the Arbitration Act, as may be amended from time to time, and in particular, section 45 thereof. The determination arising out of the arbitration process shall be final and binding upon the Parties to the arbitration. (d) Exceptions to Arbitration: The following matters shall be excluded from arbitration under this Agreement: (i) any disputes involving third Persons; (ii) breach of confidentiality by either Party; and (iii) intellectual property claims, whether initiated by third Persons or by one of the Parties to this Agreement. 20. MISCELLANEOUS (a) Notice: Every notice or other communication hereunder shall be deemed to have been duly given and made if in writing and if served by personal delivery upon the Party for whom it is intended, if delivered by registered or certified mail, return receipt requested, or by a national courier service, or if sent by fax (receipt of which is confirmed) to the Person at the address set forth below, or such other address as may be designated in writing hereafter, in the same manner, by such Person: To: Ehave To: CHT 277 Lakeshore Road E 1 Scarsdale Road Suite 203 Oakville, Ontario Toronto, Ontario Canada Canada L6J 6J3 M3B 2R2 Attention: Prateek Dwivedi, President & CEO Attention: Scott Woodrow, CEO Any such notification shall be deemed delivered (a) upon receipt, if delivered personally, (b) on the next Business Day, if sent by national courier service for next Business Day delivery or if sent by fax. Any correctly addressed notice or last known address of the other Party that is relied on herein that is refused, unclaimed, or undeliverable because of an act or omission of the Party to be notified as provided herein shall be deemed effective as of the first date that said notice was refused, unclaimed, or deemed undeliverable by the postal authorities by mail, through messenger or commercial express delivery services. + +25. + +Source: EHAVE, INC., 20-F, 5/15/2019 + + + + + +(b) Modifications: The Parties may modify this Agreement only upon written agreement. (c) Further Assurances: Each Party shall take such action (including, but not limited to, the execution, acknowledgement and delivery of documents) as may reasonably be requested by the other Party for the implementation or continuing performance of this Agreement. (d) Relationship: The Parties are independent contractors and no other relationship is intended. Nothing herein shall be deemed to constitute either Party as an agent, representative or employee of the other Party, or both Parties as joint venturers or partners for any purpose. Neither Party shall act in a manner that expresses or implies a relationship other than that of independent contractor. Each Party shall act solely as an independent contractor and shall not be responsible for the acts or omissions of the other Party. Neither Party will have the authority or right to represent nor obligate the other Party in any way except as expressly authorized by this Agreement. (e) Enurement: This Agreement shall enure to the benefit of and be binding upon each of the Parties hereto and their permitted successors and assigns. (f) No Assignment: Neither this Agreement nor any rights or obligations hereunder shall be assignable by a Party without the prior written consent of the other Party, provided that either Party shall have the right, on notice to but without the other Party's consent, to assign this Agreement and its rights and obligations contained herein, to an affiliate or to a third party who is not a competitor of the other Party in connection with a sale of all or substantially all of the assigning Party's business or assets relating to this Agreement. (g) Counterparts and Facsimile Execution and Delivery: This Agreement may be executed in counterparts, each of which shall be deemed to be an original and both of which together shall constitute one and the same instrument. To evidence its execution of an original counterpart of this Agreement, a Party may send a copy of its original signature on the execution page hereof to the other Party by facsimile transmission or email and such transmission shall constitute delivery of an executed copy of this Agreement to the receiving Party as of the date of receipt thereof by the receiving Party or such other date as may be specified by the sending Party as part of such transmission. (h) Language: It is the Parties desire and agreement that this Agreement and all Exhibits and associated documentation be drafted in English. Les Parties conviennent que la présente convention et tous les documents s'y rattachant, soient rédigés en anglais. + +26. + +Source: EHAVE, INC., 20-F, 5/15/2019 + + + + + +IN WITNESS WHEREOF, each Party hereto has caused this Agreement to be duly executed as of the date first written above by an officer authorized in that behalf. EHAVE, INC. COMPANION HEALTHCARE TECHNOLOGIES CORP per: /s/ Prateek Dwivedi per: /s/ Scott Woodrow Name: Prateek Dwivedi Name: Scott Woodrow Title: Chief Executive Officer Title: Chief Executive Officer + +27. + +Source: EHAVE, INC., 20-F, 5/15/2019 \ No newline at end of file diff --git a/full_contract_txt/ElPolloLocoHoldingsInc_20200306_10-K_EX-10.16_12041700_EX-10.16_Development Agreement.txt b/full_contract_txt/ElPolloLocoHoldingsInc_20200306_10-K_EX-10.16_12041700_EX-10.16_Development Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..99a4a576760b13c2bf53cd40f7d488ab788ff6c4 --- /dev/null +++ b/full_contract_txt/ElPolloLocoHoldingsInc_20200306_10-K_EX-10.16_12041700_EX-10.16_Development Agreement.txt @@ -0,0 +1,377 @@ +Exhibit 10.16 + +EL POLLO LOCO® FRANCHISE DEVELOPMENT AGREEMENT + +Dated: ____________________ + +Territory: Developer: + +(Disclosure Document Control No. 032619) + +TABLE OF CONTENTS 1.DEVELOPMENT RIGHTS IN TERRITORY. 4 2.LIMITATION ON DEVELOPMENT RIGHTS. 5 3.DEVELOPMENT FEE. 9 4.TERM OF DEVELOPMENT AGREEMENT. 10 5.TERRITORY CONFLICTS. 10 6.PROPRIETARY RIGHTS OF EL POLLO LOCO. 11 7.INSURANCE AND INDEMNIFICATION. 11 8.TRANSFER OF RIGHTS. 13 9.ACKNOWLEDGMENT OF SELECTED TERMS AND PROVISIONS OF THE FRANCHISE AGREEMENT. 14 10.TERMINATION BY DEVELOPER; EXPIRATION DATE. 14 11.EVENTS OF DEFAULT. 15 12.EFFECT OF TERMINATION. 16 13.NON-WAIVER. 17 14.INDEPENDENT CONTRACTOR AND INDEMNIFICATION. 17 15.ENTIRE AGREEMENT. 17 16.DISPUTE RESOLUTION 18 17.SEVERABILITY. 19 18.APPLICABLE LAW; CHOICE OF FORUM; WAIVER OF JURY TRIAL. 19 19.DOCUMENT INTERPRETATION. 19 20.COVENANT NOT TO COMPETE. 20 21.NOTICES. 21 22.SECTION HEADINGS. 21 23.ACKNOWLEDGMENTS. 21 24.COUNTERPARTS. 22 Source: EL POLLO LOCO HOLDINGS, INC., 10-K, 3/6/2020 + + + + + +EXHIBITS EXHIBIT "A" TO DEVELOPMENT AGREEMENT - TERRITORY23 EXHIBIT "B" TO DEVELOPMENT AGREEMENT - DEVELOPMENT SCHEDULE24 EXHIBIT "C" TO DEVELOPMENT AGREEMENT - EXISTING EL POLLO LOCO® RESTAURANTS IN THE TERRITORY 25 + +EL POLLO LOCO® FRANCHISE DEVELOPMENT AGREEMENT (Non-exclusive/Exclusive) + +THIS FRANCHISE DEVELOPMENT AGREEMENT ("Agreement") dated for identification purposes only as of _____________________, is made and entered into by and between EL POLLO LOCO, INC., a Delaware corporation, with its principal place of business at 3535 Harbor Blvd, Suite 100, Costa Mesa, California 92626 (referred to herein as "El Pollo Loco" or "Franchisor") and __________________an individual, with its principal place of business at _____________________________________ ("Developer"). + +Recitals. + +A.Franchisor owns certain proprietary and other property rights and interests in and to the "El Pollo Loco®" trademark and service mark, and such other trademarks, service marks, logo types, insignias, trade dress designs and commercial symbols as Franchisor may from time to time authorize or direct Developer to use in connection with the operation of a(n) "El Pollo Loco®" restaurant (the "El Pollo Loco® Marks"). Franchisor has a distinctive plan for the operation of retail outlets for the sale of fire-grilled food items and related products, which plan includes but is not limited to the El Pollo Loco® Marks and the Operations Manual (the "Manual"), policies, standards, procedures, employee uniforms, signs, menu boards and related items, and the reputation and goodwill of the El Pollo Loco® chain of restaurants (collectively, the "El Pollo Loco® System"). + +B.Developer represents that it is experienced in and has independent knowledge of the nature and specifics of the restaurant business. Developer represents that in entering into this Agreement it has relied solely on its personal knowledge and has not relied on any representations of Franchisor or any of its officers, directors, employees or agents, except those representations contained in any legally required Franchise Disclosure Document delivered to Developer. + +C. Developer desires to obtain development rights for multiple restaurants under the El Pollo Loco® System (each, an "El Pollo Loco® Restaurant") from Franchisor within a specified geographical (the "Territory") specified in Exhibit "A" attached hereto and made a part hereof (or if single unit, replace with "Developer desires to obtain development rights for a single restaurant under the El Pollo Loco® System (each, an "El Pollo Loco® Restaurant") from Franchisor within a specified address (the "Territory") specified in Exhibit "A" attached hereto and made a part hereof.") + +D.Franchisor is willing to grant the (non-exclusive/exclusive) right to develop and open El Pollo Loco® Restaurant(s) within the Territory referenced in Exhibit "A." + +NOW, THEREFORE, in consideration of the mutual covenants and obligations herein contained, the parties hereto agree as follows: + +1.Development Rights in Territory. + +1.1. Franchisor hereby grants to Developer, subject to the terms and conditions of this Agreement (if Section 2.20 is applicable add ", and specifically Section 2.20 hereof,") and as long as Developer shall not be in default of this Agreement or any other development, franchise or other agreement between Developer and Franchisor, (non-exclusive/exclusive) development rights to establish and operate ____ franchised restaurant(s), and to use the El Pollo Loco® System solely in connection therewith, at specific locations to be designated in separate Franchise Agreement(s) (the "Franchise Agreements"). (If exclusive agreement, add "Developer expressly acknowledges that the exclusive rights granted herein apply only to the right to develop new restaurants in the Territory, and no exclusive territory or radius protection for the term of any Franchise Agreement is granted herein and any such protection shall be set forth in the particular Franchise Agreement to be signed.") The Franchise Agreements (and all ancillary documents attached as Exhibits to the Franchise Agreement, including the Personal Guarantee) executed in accordance with this Agreement shall be in the form currently in use by Franchisor at the time of execution of the Franchise Agreement and shall be executed individually by each person, partner, member or shareholder. + +1.2. (Only applies if exclusive Agreement. Delete if non-exclusive Agreement.) Except as otherwise provided in this Agreement and subject to the terms and conditions of Section 2.20 hereof, after the date of this + +Source: EL POLLO LOCO HOLDINGS, INC., 10-K, 3/6/2020 + + + + + +Agreement and during the term of this Agreement, and so long as Developer is in compliance with its obligations under this Agreement, Franchisor shall neither, without Developer's prior written consent: (i) grant development rights to anyone else with respect to the Territory or any part of the Territory; nor (ii) establish or franchise any person to establish an El Pollo Loco restaurant under the Marks and System at any location within the Territory. Franchisor expressly retains all other rights and may, among other things, on any terms and conditions Franchisor deems advisable, and without granting Developer any rights therein: + +a. Establish and operate or franchise others to establish and operate an El Pollo Loco restaurant located outside of the Territory; + +b. Sell the same or similar products (whether or not using the Marks), as will be sold by Developer in a developed El Pollo Loco restaurant, to customers at any retail location (whether within or outside of the Territory), through any method or channel of distribution, including, without limitation, at retail locations such as grocery or convenience stores and via the Internet, telemarketing and direct marketing means, through other non-El-Pollo Loco restaurants having the same or similar menu items, or through any other distribution channel; + +c. Establish and operate or franchise others to establish and operate restaurants (not using the Marks) having the same or similar menu items whether within or outside of the Territory; and + +d. Any continued operation by Franchisor, or the allowance of any continued operation by a franchisee of Franchisor, of an El Pollo Loco restaurant within the Territory which was opened on or before the date of this Agreement shall not be considered to constitute a breach of this Agreement. + +1.3. (Only applies to multi-unit Development Agreement - delete if single-unit Development Agreement). Prior to or concurrent with the execution of this Agreement, Developer shall meet with Franchisor's development representatives and prepare a market development plan for the units to be constructed and opened by Developer in the Territory (identifying specific key areas, key intersections and trade areas in the Territory) and all development pursuant to this Agreement shall be in accordance with this plan (the "Market Plan"). The Market Plan shall include proposed areas where sites may be located, ranking and prioritization of site locations and other information customarily used by market planners in the restaurant industry. Developer and Franchisor shall jointly approve the Market Plan. + +2. Limitation on Development Rights. + +2.1. Developer must submit one or more site(s) for approval, enter into binding leases or purchase agreements and open to the public the number of El Pollo Loco® Restaurant(s) on such approved sites each calendar year as required on the Development Schedule, all as set forth on Exhibit "B" attached hereto and made a part hereof. + +2.2. For purposes of the Development Schedule in Exhibit "B", no credit will be given for the development of El Pollo Loco® Restaurant(s) outside the Territory, regardless of the fact that Developer may, upon proper application, obtain from Franchisor an El Pollo Loco® Franchise Agreement ("Franchise Agreement") for any such development. + +2.3. Although this Agreement affords the Developer the right to develop and open El Pollo Loco® restaurant(s) within the Territory, as set forth on Exhibit "A", all Restaurant(s) developed under this Agreement must be duly licensed through individual Franchise Agreement(s). Developer will execute El Pollo Loco's then standard Franchise Agreement in use at the time of execution for each restaurant developed under this Agreement, and agrees to pay Franchisor the current fees, royalties and other required payments in accordance with the Franchise Agreement and Franchise Disclosure Document then in effect. Execution of the appropriate Franchise Agreement and payment of the initial franchise fee and/or any other required fees must be accomplished prior to the commencement of construction at any site. + +2.4. Developer must satisfy all Franchisor's financial and operational criteria then in effect and in addition, if Developer is also a Franchisee of one or more El Pollo Loco Restaurants, Franchisee must also be in good standing with Franchisor and satisfy all Franchisor's financial and operational criteria then in effect prior to El Pollo Loco's execution of each standard Franchise Agreement issued pursuant to this Agreement. Developer shall provide Franchisor with current information pertaining to Developer's financial condition and the financial condition of the majority and managing members/partners/shareholders of Developer at any time upon El Pollo Loco's request and in no event less than once annually. Developer acknowledges that, among other things, it will be + +Source: EL POLLO LOCO HOLDINGS, INC., 10-K, 3/6/2020 + + + + + +required to submit annual financial statements of Developer and personal financial statements of each of its principal owners and Managing Members to be eligible for financial approval by El Pollo Loco. In the event any of the majority owners of Developer shall also be the Managing Members and/or majority owners of any other entity which is a franchisee of El Pollo Loco, then each such franchisee entity must be operationally and financially approved by Franchisor before approval for expansion will be granted to any one franchisee entity. "Managing Members" shall be any individuals who are designated as the primary decision makers or general managers of the franchisee entity and those individuals who (individually or collectively) own at least 51% interest in the franchisee entity. + +2.5. Developer shall use its best efforts to retain qualified real estate professionals (including licensed brokers) to locate proposed sites for the El Pollo Loco® Restaurant(s). Developer shall submit proposed sites for each El Pollo Loco® Restaurant unit to be developed under this Agreement for acceptance by Franchisor's Real Estate Site Approval Committee ("RESAC"), together with such site information as may be reasonably required by Franchisor to evaluate the proposed site, no later than the dates set forth in Exhibit "B" as RESAC Submittal Dates, the first of which shall be approximately ninety (90) days after execution of this Agreement. Should the site be accepted by RESAC, it will be referred to as the "Approved Site". Such acceptance will expire one (1) year from the RESAC approval date. Franchisor may require, as a condition to its approval of a site, a "Market Study", which shall include a site description and analysis, traffic and other demographic information and an analysis of the impact of the proposed site on other company owned and franchised El Pollo Loco restaurants surrounding or within the vicinity of such proposed site all in such format as the Franchisor may require. All such analyses, information and studies shall be prepared at the sole cost and expense of Developer. + +2.6. Franchisor shall send representatives to evaluate proposed site(s) for each El Pollo Loco® Restaurant to be developed under this Agreement, and Franchisor will do so at its own expense for the first two (2) proposed sites for each El Pollo Loco® Restaurant. If Developer proposes, and Franchisor evaluates, more than two (2) sites for each El Pollo Loco® Restaurant, then Developer shall reimburse Franchisor for the reasonable costs and expenses incurred by Franchisor's representatives in connection with the evaluation of such additional proposed site(s), including, without limitation, the costs of lodging, travel, meals and wages. + +2.7. Provided there exists no default by Developer under this Agreement or any other development, franchise or other agreement between Franchisor and Developer, Franchisor shall evaluate each site proposed for which Developer has provided all necessary evaluation information, and shall promptly after receipt of Developer's proposal, send to Developer written notice of acceptance or non-acceptance of the sit + +2.8. If RESAC determines through its evaluation of the proposed site that the proposed site may impact sales at any company-owned El Pollo Loco® Restaurant, Franchisor has the sole and absolute right to accept or reject the proposed site, without any obligation to discuss a possible resolution with Developer. However, Franchisor may elect to discuss with Developer a possible resolution with regard to the proposed site; however, if such an agreement cannot be reached, Franchisor has the sole and absolute right to reject the proposed site. If RESAC determines through its evaluation of the proposed site that the proposed site may potentially impact sales at any existing El Pollo Loco® franchisee's restaurant, Franchisor shall notify Developer of the existing El Pollo Loco® franchisees' location(s) and contact information. If nevertheless Developer wishes to try to proceed with that site, Developer must obtain a written waiver from those existing El Pollo Loco® franchisees of any claims they might have against Developer and Franchisor with respect to the proposed new El Pollo Loco® Restaurant. Such waiver, if obtained, must be submitted along with the evaluation information required pursuant to this Section. + +2.9. No later than the Site Commitment Dates set forth in Exhibit "B", Developer shall submit for the Approved Site to Franchisor for its review and approval of: + +a. A fully negotiated but unexecuted lease, which may only subject to obtaining necessary governmental permits. The unexecuted form of the lease must be submitted to Franchisor to review for the required terms and conditions listed in Sections 2.9, 2.10, 2.11 and 2.12 below prior to full execution of the lease. Franchisor will promptly notify Developer upon their approval of the inclusion of such required terms and conditions. Developer will promptly then provide a final executed copy of the lease to Franchisor; or + +b. A purchase agreement. Should Developer purchase the site using another entity other than the franchise entity, Developer must then enter into a lease with the Franchise entity as the lessee and the purchasing entity as the lessor and must comply with all the requirements of this Sections 2.9, 2.10, 2.11 and 2.12 below). + +2.10. Any lease to be entered into by Developer shall include the terms and conditions set forth below and in a form approved by Franchisor: + +Source: EL POLLO LOCO HOLDINGS, INC., 10-K, 3/6/2020 + + + + + +a. The tenant entity on the lease must match the franchise entity on the franchise agreement; and + +b. The term (with renewal options) of the lease must match at least the initial term of the franchise agreement; and + +c. The landlord consents to your use of the premises as an El Pollo Loco® restaurant which will be open during the required days and hours set out in the Operations Manual. + +2.11. Franchisor shall have no liability under any lease or purchase agreement for any El Pollo Loco® Restaurant location developed under this Agreement and shall not guarantee Developer's obligations thereunder. Upon approval by Franchisor of the form of Developer's lease and execution of a lease for a site by Developer, Developer shall furnish to Franchisor a fully executed copy of such lease and any amendments thereto within fifteen (15) calendar days of such execution. Franchisor shall have no obligation to assist Developer to negotiate its leases. + +2.12. The lease or deed may not contain a non-competition covenant which restricts Franchisor or any franchisee or licensee of Franchisor, from operating an El Pollo Loco® Restaurant or any other retail restaurant, unless such covenant is approved by Franchisor in writing prior to the execution by Developer of the lease. + +2.13. Each subsequent site to be developed pursuant to the Development Schedule shall be submitted for approval by RESAC by the date set forth in Exhibit "B". Similarly, each fully executed lease (executed upon prior review and approval by Franchisor) or purchase agreement (with all contingencies to Developer's obligations waived or satisfied, except permitting contingencies) relating to each subsequent Approved Site shall: (1) be delivered to Franchisor on or before the Site Commitment Date for each respective El Pollo Loco® Restaurant as set forth in Exhibit "B" and (2) prior to the execution of your Franchise Agreements (3) prior to the payment of your initial Franchise Fees for each site and (4) prior to the commencement of construction of the El Pollo Loco® Restaurant. + +2.14. RESAC site approval does not assure that a Franchise Agreement will be executed. Execution of the Franchise Agreement is contingent upon Developer completing the purchase or lease of the proposed site within sixty (60) days after approval of the site by the Franchisor or no later than the dates set forth in Exhibit "B" as Site Committment Dates. + +2.15. Developer acknowledges that time is of the essence in this Agreement. If Developer has not obtained approval and entered into a binding lease or purchase agreement for each site for El Pollo Loco® Restaurant(s) to be developed under this Agreement by the applicable Site Commitment Date, Developer shall be in default of its obligations under the Development Schedule and Franchisor shall be entitled to exercise its rights and remedies under this Agreement, up to and including termination of this Agreement. + +2.16. Developer also acknowledges that it is required pursuant to this Agreement to open El Pollo Loco® Restaurants in the future pursuant to dates set forth in the Development Schedule attached as Exhibit "B". If Developer fails to meet the opening date for any El Pollo Loco® Restaurant to be developed under this Agreement, Developer shall be in default and Franchisor shall be entitled to exercise all rights and remedies available to Franchisor set forth in Section 11. Developer acknowledges that if Developer fails to open El Pollo Loco® Restaurants in a timely manner pursuant to the Development Schedule, Franchisor will suffer lost revenues, including royalties and other fees which would be difficult to calculate and which Franchisor would have received had Developer met the agreed schedule or had Franchisor had the right to grant development rights to others in the Territory. + +2.17. Developer acknowledges that the estimated initial investment and estimated expenses set forth in Items 6 and 7 of our Franchise Disclosure Document are subject to and likely to increase over time, and that future El Pollo Loco® Restaurants will likely involve a greater initial investment and operating capital requirements than those stated in the Franchise Disclosure Document provided to you prior to your execution of this Agreement. + +2.18. Developer understands and acknowledges that in accepting Developer's proposed site or by granting a franchise for each approved site, Franchisor does not in any way, endorse, warrant or guarantee either directly or indirectly the suitability of such site or the success of the franchise business to be operated by Developer at such site. The suitability of the site and the success of the franchise business depend upon a number of factors outside of Franchisor's control, including, but not limited to, the Developer's operational abilities, site location, consumer trends and such other factors that are within the direct control of the Developer. Source: EL POLLO LOCO HOLDINGS, INC., 10-K, 3/6/2020 + + + + + +2.19. The purpose of this Agreement is to promote orderly incremental growth within the El Pollo Loco® System. The acquisition of existing El Pollo Loco® restaurants by Developer does not represent incremental growth and, therefore, does not satisfy the terms of this Agreement pertaining to development. + +2.20. (To be added where there are existing restaurants in the Territory) Developer acknowledges that Franchisor (i) is operating or has franchised another to operate, one (1) or more restaurants in the Territory or (ii) has granted franchise rights to another in the Territory or (iii) approved a new site for development for those locations identified in Exhibit "C" attached hereto and incorporated herein by this reference. Developer further acknowledges that Franchisor retains the sole and absolute right to approve or disapprove any proposed location for development under this Agreement if, in Franchisor's reasonable judgment: (i) such proposed location is not suitable for an El Pollo Loco® Restaurant or (ii) such proposed location will have a material adverse effect on the profitability of another existing El Pollo Loco® location (or approved site) in the Territory. Developer covenants to use its reasonable best efforts to avoid selecting proposed locations that would adversely impact pre-existing locations in the Territory. + +3. Development Fee. + +3.1. Developer shall pay to Franchisor upon execution of this Agreement a non-refundable Development Fee (the "Development Fee") equal to Twenty Thousand Dollars ($20,000) in immediately available funds, for each El Pollo Loco® Restaurant to be developed under this Agreement. The Development Fee is consideration for this Agreement. The Development Fee is not consideration for any Franchise Agreement and is non-refundable. The $20,000 Development Fee for each El Pollo Loco® Restaurant shall be applied against the initial franchise fee payable upon the execution of the Franchise Agreement applicable to such El Pollo Loco® Restaurant. As a benefit of signing the Development Agreement, the Initial Fee for the second and each subsequent restaurant developed under the same Development Agreement will be reduced by us to $30,000. As an example, the Initial Fee for the first restaurant developed under a Development Agreement would be $40,000 to which $20,000 (from the Development Fee will be credited. The Initial Fee for the second and remaining restaurants developed under the same Development Agreement would be $30,000, to which $20,000 from the Development Fee will be credited. If this Agreement is terminated pursuant to Sections 10 or 11 below, Developer will lose its right to develop and Development Fee. + +4. Term of Development Agreement. + +4.1. This Agreement shall commence on the date specified in Exhibit "B". Unless terminated pursuant to Section 10 or 11 below, it shall expire upon the earlier of the date specified in Exhibit "B" or upon the opening of the last El Pollo Loco® Restaurant listed in the Development Schedule. + +5. Territory Conflicts. + +5.1. The rights granted Developer in this Agreement are subject to any prior territorial rights of other franchisees which may now exist in the Territory, whether or not those rights are currently being enforced. In the event of a conflict in territorial rights, whether under a Franchise Agreement or separate territorial or development agreement, Developer shall be free to negotiate with any person, corporation or other entity, which claims territorial rights adverse to the rights granted under this Agreement, for the assignment of those prior territorial rights. For this purpose, Franchisor agrees to approve any such assignment not in conflict with the other terms of this Agreement, subject to the condition of any Franchise Agreements involved, and current policies pertaining to assignments, including, but not limited to, satisfaction of all past due debts owed to Franchisor and the execution of a General Release. + +5.2. In the event of third party claims of the right to develop the Territory, it is the sole responsibility of El Pollo Loco, where the right granted herein is exclusive, to protect and maintain Developer's right to the development of the Territory. However, if it appears to El Pollo Loco, as its sole and absolute right to determine, that protection of the Territory by legal action is not advisable, whether due to the anticipation of, or the actual protracted nature of the action, the costs involved, the uncertainty of outcome, or otherwise, Franchisor has the right to terminate this Agreement, provided that it refunds to Developer the balance, if any, of the Development Fee made pursuant to Section 3, which has not been applied against the initial franchise fees for Franchise Agreement(s) to be acquired under this Agreement. + +6. Proprietary Rights of El Pollo Loco. Source: EL POLLO LOCO HOLDINGS, INC., 10-K, 3/6/2020 + + + + + +6.1. Developer expressly acknowledges El Pollo Loco's exclusive right, title, and interest in an to the trade name, service mark and trademark "El Pollo Loco", and such other trade names, service marks, and trademarks which are designated as part of the El Pollo Loco® System (the "Marks"), and Developer agrees not to represent in any manner that Developer has any ownership in El Pollo Loco® Marks. This Agreement is not a Franchise Agreement. Developer may not open an El Pollo Loco® Restaurant or use the El Pollo Loco® Marks at a particular site until it executes a Franchise Agreement for that site. Developer's use of the El Pollo Loco® Marks shall be limited to those rights granted under each individual Franchise Agreement. Notwithstanding the foregoing, El Pollo Loco® may authorize Developer in writing to use the Marks in connection with advertising and marketing activities in connection with this Agreement. Developer expressly agrees that such usage is limited to those specific activities or promotional materials approved by El Pollo Loco's marketing department in advance. Developer further agrees that its use of the Marks shall not create in its favor any right, title, or interest in or to El Pollo Loco® Marks, but that all of such use shall inure to the benefit of El Pollo Loco, and Developer has no rights to the Marks except to the degree specifically granted by the individual Franchise Agreement(s). Building designs and specifications, color schemes and combinations, sign design specifications, and interior building layouts (including equipment, equipment specification, equipment layouts, and interior color schemes and combinations) are acknowledged by Developer to comprise part of the El Pollo Loco® System. Developer shall have no right to license or franchise others to use the Marks by virtue of this Agreement. + +6.2. Developer acknowledges that, in connection with its execution of this Agreement, it may receive confidential and proprietary information regarding the El Pollo Loco® System, including but not limited to the El Pollo Loco Operational Manual. Developer recognizes the unique value and secondary meaning attached to the El Pollo Loco® Marks and the El Pollo Loco® System, and Developer agrees that any noncompliance with the terms of this Agreement or any unauthorized or improper use will cause irreparable damage to Franchisor and its franchisees. Developer, therefore, agrees that if it should engage in any such unauthorized or improper use during, or after, the term of this Agreement, Franchisor shall be entitled to both seek temporary and permanent injunctive relief from any court of competent jurisdiction in addition to any other remedies prescribed by law. + +6.3. Developer acknowledges that it will receive one (1) copy of the Operations Manual on loan from Franchisor and that the Operations Manual shall at all times remain the sole property of the Franchisor. + +7. Insurance and Indemnification. + +7.1. Throughout the term of this Agreement, Developer shall obtain and maintain insurance coverage for public liability, including products liability, in the amount of at least One Million Dollars ($1,000,000) combined single limit. Developer also shall carry such worker's compensation insurance as may be required by applicable law. + +7.2. Franchisor shall be named as an additional insured on all such insurance policies and shall be provided with certificates of insurance evidencing such coverage. All public liability and property damage policies shall contain a provision that El Pollo Loco, although named as an insured, shall nevertheless be entitled to recover under such policies on any loss incurred by El Pollo Loco, its affiliates, agents and/or employees, by reason of the negligence of Developer, its principals, contractors, agents and/or employees. All policies shall provide Franchisor with at least thirty (30) days' notice of cancellation or termination of coverage. + +7.3. Franchisor reserves the right to specify reasonable changes in the types and amounts of insurance coverage required by this Section 7. In the event that Developer fails or refuses to obtain or maintain the required insurance coverage from an insurance carrier acceptable to El Pollo Loco, Franchisor may, as its sole and absolute right and without any obligations to do so, procure such coverage for Developer. In such event, Developer shall pay the required premiums or reimburse such premiums to Franchisor upon written demand. + +7.4. Developer shall defend immediately upon tender of defense, at its own cost, the Franchisor, its subsidiaries, parent and affiliates, shareholders, directors, officers, employees and agents (collectively for this section only known as "Franchisor"), from and against any and all claims, lawsuits, complaints, cross complaints, arbitrations, demands, allegations, costs embraced by indemnity, loss, costs, expenses (including attorneys' fees), liens and damages (collectively for this section only known as "Losses"), however caused, and reimburse Franchisor for all costs and expenses (including attorneys' fees) incurred by the Franchisor in defense of any Losses, resulting directly or indirectly from or pertaining to or arising out of, or alleged to arise out of, or in connection with Developer's activities under the Development Agreement, including any labor, any employee related claims whatsoever, including, without limitation any claims made by an employee of Developer resulting from the employee's training in a Franchisor operated facility or restaurant, and including Developer's failure for + +Source: EL POLLO LOCO HOLDINGS, INC., 10-K, 3/6/2020 + + + + + +any reason to fully inform any third party of Developer's lack of authority to bind the Franchisor for any purpose. Such Losses shall include, without limitation, those arising from the death of or injury to any person or arising from damage to the property of Developer or the Franchisor, or any third person, firm or corporation, whether or not resulting from any strict liability imposed by fact, law, statute, or ordinance, on the Franchisor. Developer further agrees that Developer's duty to defend the Franchisor is separate from, independent of and free-standing of Developer's duty to indemnify the Franchisor and applies whether the issue of Developer's negligence, breach of contract, or other fault or obligation has been determined. Developer's duty to defend is regardless of the outcome of liability even if Developer is ultimately found not negligent and not dependent on the ultimate resolution of issues arising out of any claims, lawsuits, complaints, cross complaints, arbitration, demands, allegations, costs embraced by indemnity, loss, costs, expenses (including attorneys' fees), liens or damages. + +7.5. Developer shall indemnify and hold harmless the Franchisor (as defined above) from and against any and all Losses (as defined above), however caused, resulting directly or indirectly from or pertaining to or arising out of or in connection with Developer's activities under the Development Agreement, including any labor, any employee related claims whatsoever, including, without limitation any claims made by an employee of Developer resulting from the employee's training in a Franchisor operated facility or restaurant, and including Developer's failure for any reason to fully inform any third party of Developer's lack of authority to bind the Franchisor for any purpose. Such Losses shall include, without limitation, those arising from latent or other defects in the restaurant whether or not discoverable by Franchisor, and those arising from the death of or injury to any person or arising from damage to the property of Developer or the Franchisor, or any third person, firm or corporation, whether or not resulting from any strict liability imposed by fact, law, statute, or ordinance, on the Franchisor. Developer further agrees to indemnify and hold harmless Franchisor from all said Losses and shall pay for and be responsible for all said Losses, however caused, whether by any individual, employee, third person or party, vendor, visitor, invitee, trespasser or any firm or corporation whatsoever, whether caused by or contributed to by Franchisor, the combined conduct of Developer and Franchisor, or active or passive negligence of Franchisor, but for the sole negligence or willful misconduct of Franchisor. + +7.6. The provisions of this Section 7 shall expire as to each El Pollo Loco® Restaurant to be developed under this Agreement upon execution of a Franchise Agreement for such El Pollo Loco® Restaurant. The provision of the Franchise Agreement, in particular, Section 9 thereof (insurance and Indemnification) shall supersede this Section 7 and govern the rights and obligations of the parties prospectively. + +8. Transfer of Rights. + +8.1. This Agreement shall inure to the benefit of Franchisor and its successors and assigns, and is fully assignable by El Pollo Loco. + +8.2. The parties acknowledge and agree that this Agreement is personal in nature with respect to Developer, being entered into by Franchisor in reliance upon and in consideration of the personal skills, qualifications and trust and confidence reposed in Developer and Developer's present partners, managing members or officers if Developer is a partnership, a limited liability company or a corporation. Therefore, the rights, privileges and interests of Developer under this Agreement shall not be assigned, sold, transferred, leased, divided or encumbered, voluntarily or involuntarily, in whole or in part, by operation of law or otherwise without the prior written consent of El Pollo Loco, which consent may be given or withheld as El Pollo Loco's sole and absolute right. For purposes of this Section, a sale of stock, or any membership or partnership interest in Developer, or a merger or other combination of Developer shall be considered a transfer of Developer's interest prohibited hereunder. Notwithstanding the foregoing, Developer shall be permitted to assign business organizations to serve as Franchisee after Developer individually executes the Franchise Agreements, provided the ownership mirrors that of Developer (e.g., Developer consists of persons A (50%), B (25%) and C (25%). Franchisee also must be owned and controlled by the same three (3) persons with each retaining the same percentage of ownership). All other entity structures shall require the prior written approval of Franchisor. Developer shall pay an administrative fee of Five Hundred Dollars ($500) per transfer for each permitted transfer to an Entity where such transfer is for the convenience of ownership only and does not involve a change of principals of the business. Where Developer desires to add new principals to the Developer or any Franchisee entity, Developer shall pay to Franchisor an additional Two Thousand Five Hundred Dollars ($2,500) per new principal to cover Franchisor's administrative costs for reviewing the application and suitability of each new principal as participants in the franchise business. + +9. Acknowledgment of Selected Terms and Provisions of the Franchise Agreement. + +Source: EL POLLO LOCO HOLDINGS, INC., 10-K, 3/6/2020 + + + + + +9.1. Developer represents that it has read each of the terms and provisions of the current form of Franchise Agreement and acknowledges and is willing to agree to each and every obligation of Franchisee thereunder (as they may be modified in then-current forms of Franchise Agreement) including, but not limited to: + +a. The obligation to deliver execute Personal Guarantees or Investor Covenants Regarding Confidentiality and Non-Competition in connection with the execution of each franchise agreement for El Pollo Loco® Restaurants to be developed under this Agreement; + +b. The obligation to obtain the consent of Franchisor to any security interests to be granted by Developer in the assets or business of the El Pollo Loco® Restaurant to lenders or other financing sources in advance of any agreement to provide those security interests to such third parties; + +c. All in-term and post-term restrictive covenants; and + +d. All territorial rights, options and rights of first refusal retained by Franchisor under the franchise agreement. + +10. Termination by Developer; Expiration Date. + +10.1. This Agreement shall terminate immediately upon El Pollo Loco's receipt of Developer's notice to terminate. In such event, the Development Fee shall be forfeited to Franchisor in consideration of the rights granted in the Territory up to the time of termination. Notwithstanding any provision to the contrary contained herein, unless earlier terminated by either party, this Agreement shall expire on ______, 20___, and all rights of Developer herein shall cease and all unapplied or unused Development Fees paid pursuant to Section 3 hereof shall be forfeited to Franchisor. + +11. Events of Default. + +11.1. The following events shall constitute a default by Developer, which shall result in El Pollo Loco's right to declare the immediate termination of this Agreement. + +a. Failure by Developer to meet the requirements of the Development Schedule within the time periods specified therein, including failure by Developer to meet the Site Commitment Date or Opening Date for each site for an El Pollo Loco® Restaurant in a timely manner as set forth in Exhibit "B" and Section 2 above. + +b. Any assignment, transfer or sublicense of this Agreement by Developer without the prior written consent of El Pollo Loco. + +c. Any violation by Developer of any covenant, term, or condition of any note or other agreement (including any El Pollo Loco® Franchise Agreement) between Developer and Franchisor (or an affiliate of El Pollo Loco), the effect of which is to allow Franchisor to terminate (or accelerate the maturity of) such agreement before its stated termination (or maturity) date. + +d. Developer's assignment for the benefit of creditors or admission in writing of its inability to pay its debts generally as they become due. + +e. Any order, judgment, or decree entered adjudicating Developer bankrupt or insolvent. + +f. Any petition, or application, by Developer to any tribunal for the appointment of a trustee, receiver, or liquidator of Developer (or a substantial part of Developer's assets), or commencement by Developer of any proceedings relating to Developer under any bankruptcy, reorganization, compromise, arrangement, insolvency, readjustment of debt, dissolution, or liquidation law of any jurisdiction, whether now or hereinafter in effect. + +g. Any filing of a petition or application against Developer, or the commencement of such proceedings, in which Developer, in any way, indicates its approval thereof, consent thereto, or acquiescence therein; or the entry of any order, judgment, or decree appointing any trustee, receiver, or liquidator, or approving the petition in any such proceedings, where the order, judgment, or decree remains unstayed and in effect for more than thirty (30) days. + +h. Any entry in any proceeding against the Developer of any order, judgment, or decree, which requires the Source: EL POLLO LOCO HOLDINGS, INC., 10-K, 3/6/2020 + + + + + +dissolution of Developer, where such order, judgment, or decree remains unstayed and in effect for more than thirty (30) days. + +i. Developer's voluntary abandonment of any of Developer's restaurants. + +11.2. The following events shall constitute a default by Developer, which shall result in El Pollo Loco's right to declare the termination of this Agreement, if such default is not cured within thirty (30) days after written notice by Franchisor to Developer: + +a. Developer's default in the performance or observance of any covenant, term, or condition contained in this Agreement not otherwise specified in Section 11.1 above. + +b. The creation, incurrence, assumption, or sufferance to exist of any lien, encumbrance, or option whatsoever upon any of Developer's property or assets, whether now owned or hereafter acquired, the effect of which substantially impairs Developer's ability to perform or observe any covenant, term, or condition of this Agreement. + +c. Refusal by Developer or Developer's partners, members, or shareholders to enter individually into the then-current form of Franchise Agreements and Personal Guarantee as provided in Section 1 above. + +d. Any change, transfer or conveyance ("Transfer") in the ownership of Developer, which Transfer has not been approved in advance by Franchisor. Franchisor reserves the right to approve or disapprove any Transfer as its sole and absolute right. + +11.3. If Franchisor is entitled to terminate this Agreement in accordance with Sections 11.1 or 11.2 above, Franchisor shall have the right to undertake the following action instead of terminating this Agreement: + +a. Franchisor may terminate or modify any rights that Developer may have with respect to protected exclusive rights in the Territory, as granted under Section 1.1 above, effective ten (10) days after delivery of written notice thereof to Developer. + +11.4. If any of such rights are terminated or modified in accordance with this Section 11.3, such action shall be without prejudice to Franchisor's right to terminate this Agreement in accordance with Sections 11.1 or 11.2 above, and/or to terminate any other rights, options or arrangements under this Agreement at any time thereafter for the same default or as a result of any additional defaults of the terms of this Agreement. + +12. Effect of Termination. + +12.1. Immediately upon termination or expiration of this Agreement, for any reason, all of Developer's development rights granted pursuant to this Agreement shall revert to El Pollo Loco. At the time of termination, only restaurants operating or to be operated under the El Pollo Loco® System by virtue of a fully executed Franchise Agreement shall be unaffected by the termination of this Agreement. Franchisor shall have no duty to execute any Franchise Agreement with Developer after the termination of this Agreement. The foregoing remedies are nonexclusive, and nothing stated in this Section 12 shall prevent El Pollo Loco's pursuit of any other remedies available to Franchisor in law or at equity due to the termination of this Agreement. + +12.2. Developer understands and agrees that upon the expiration or termination of this Agreement (or in the event of an exclusive development agreement, the failure of Developer to meet the Development Schedule and the resulting loss of exclusive development rights), Franchisor or its subsidiaries or affiliates, as their sole and absolute right, may open and/or operate restaurants in the Territory, or may authorize or franchise others to do the same, whether it is in competition with or in any other way affects the sales of Developer at the restaurants. + +13. Non-Waiver. + +13.1. El Pollo Loco's consent to or approval of any act or conduct of Developer requiring such consent or approval shall not be deemed to waive or render unnecessary El Pollo Loco's consent to or approval of any subsequent act or conduct hereunder. + +14. Independent Contractor and Indemnification. + +Source: EL POLLO LOCO HOLDINGS, INC., 10-K, 3/6/2020 + + + + + +14.1. This Agreement does not constitute Developer an agent, legal representative, joint venturer, partner, employee or servant of Franchisor for any purpose whatsoever, and it is understood between the parties hereto that Developer shall be an independent contractor and is in no way authorized to make any contract, agreement, warranty or representation on behalf of El Pollo Loco. The parties agree that this Agreement does not create a fiduciary relationship between them. + +14.2. Under no circumstances shall Franchisor be liable for any act, omission, contract, debt, or any other obligation of Developer. Developer shall indemnify and save Franchisor harmless against any such claim and the cost of defending it arising directly or indirectly from or as a result of, or in connection with, Developer's actions pursuant to this Agreement. + +15. Entire Agreement. + +15.1. This Agreement, including Exhibits "A", "B" and "C" attached hereto, constitutes the entire full and complete agreement between Franchisor and Developer concerning the subject matter hereof and supersedes any and all prior written agreements. No other representations have induced Developer to execute this Agreement, and there are no representations, inducements, promises, or agreements, oral or otherwise, between the parties, not embodied herein, which are of any force or effect with reference to this Agreement or otherwise. Notwithstanding the foregoing, nothing in this Agreement shall disclaim or require Developer to waive reliance on any representation that Franchisor made in the most recent disclosure document (including its exhibits and amendments) that Franchisor delivered to Developer or its representative, subject to any agreed-upon changes to the contract terms and conditions described in that disclosure document and reflected in this Agreement (including any riders or addenda signed at the same time as this Agreement). The provisions of this Agreement may not be contradicted by any other statement concerning the subject matter herein. No amendment or modification of this Agreement shall be binding on either party unless written and fully executed. + +16. Dispute Resolution + +16.1. Initial Meeting and Mediation - Except as otherwise provided in this Agreement, before any legal action is filed involving any claim or controversy between Franchisor and Developer (including its affiliates, investors, and Owners) relating to (a) this Agreement, (b) the parties business activities conducted as a result of this Agreement, or (c) the parties' relationship or business dealings with each other generally, the following procedure shall be complied with: + +a. The party wishing to resolve a dispute shall initiate negotiation proceedings by first requesting in writing a meeting with the other party or parties. Within forty-five (45) days of receipt of the initial request for a meeting, the parties shall meet within the county in which Developer is then located, to discuss and negotiate toward a resolution of the controversy. + +b. If negotiation efforts do not succeed, the parties shall engage in mandatory but non-binding mediation by a mediator jointly chosen by the parties or if the parties cannot agree upon a mediator, appointed by, and in accordance with the procedures of, JAMS or, if JAMS is no longer in existence, an organization of similar quality + +c. A mediation meeting will be held at a place and at a time mutually agreeable to the parties and the mediator. The Mediator will determine and control the format and procedural aspects of the mediation meeting which will be designed to ensure that both the mediator and the parties have an opportunity to present and hear an oral presentation of each party's views regarding the matter in controversy. The parties act in good faith to resolve the controversy in mediation. + +d. The mediation will be held as soon as practicable after the negotiation meeting is held. The mediator will be free to meet and communicate separately with each party either before, during or after the mediation meeting within 60 days of demand by either party. + +16.2. At the election of the Franchisor, the provisions of this Section 16 shall not apply to controversies relating to any fee due the Franchisor by Developer or its affiliates, any promissory note payments due the Franchisor by Developer, or any trade payables due the Franchisor by Developer as a result of the purchase of equipment, goods or supplies. The provisions of this Section 16 shall also not apply to any controversies relating to the use and protection of the El Pollo Loco Marks, the Manual or the El Pollo Loco System, including without limitation, the Franchisor's right to apply to any court of competent jurisdiction for appropriate injunctive relief for the infringement of the El Pollo Loco Marks or the El Pollo Loco System. + +Source: EL POLLO LOCO HOLDINGS, INC., 10-K, 3/6/2020 + + + + + +17. Severability. + +17.1. Each section, part, term and/or provision of this Agreement shall be considered severable, and if, for any reason, any section, part, term and/or provision herein is determined to be invalid, contrary to, or in conflict with, any existing or future law or regulation, by any court or agency having valid jurisdiction, then such shall be deemed not to be a part of this Agreement, but such shall not impair the operation of, or affect the remaining portions, sections, parts, terms and/or provisions of this Agreement, which will continue to be given full force and effect and bind the parties hereto. + +18. Applicable Law; Choice of Forum; Waiver of Jury Trial. + +18.1. This Agreement, after review by Developer and El Pollo Loco, was accepted in the state in which Franchisor's then-current headquarters (currently the State of California) is located and shall be governed by and construed in accordance with the laws of such state, except that the provisions in Section 20.1 covering competition following the expiration, termination or assignment of this Agreement shall be governed by the laws of the state in which the breach occurs. THE PARTIES AGREE THAT ANY ACTION BROUGHT BY EITHER PARTY AGAINST EACH OTHER IN ANY COURT, WHETHER FEDERAL OR STATE, WILL BE BROUGHT WITHIN THE STATE IN WHICH FRANCHISOR'S HEADQUARTERS (CURRENTLY THE STATE OF CALIFORNIA) IS THEN LOCATED. THE PARTIES HEREBY WAIVE ANY RIGHT TO DEMAND OR HAVE TRIAL BY JURY IN ANY ACTION RELATING TO THIS AGREEMENT IN WHICH THE FRANCHISOR IS A PARTY. THE PARTIES CONSENT TO THE EXERCISE OF PERSONAL JURISDICTION OVER THEM BY SUCH COURTS AND TO THE PROPRIETY OF VENUE OF SUCH COURTS FOR THE PURPOSE OF CARRYING OUT THE PROVISION, AND THEY WAIVE ANY OBJECTION THAT THEY WOULD OTHERWISE HAVE TO THE SAME. ANY ACTION BETWEEN DEVELOPER AND FRANCHISOR SHALL INVOLVE ONLY THE INDIVIDUAL CLAIMS OF DEVELOPER AND SHALL NOT INVOLVE ANY CLASS, GROUP, CONSOLIDATED, REPRESENTATIVE OR ASSOCIATIONAL ACTION. NOTHING IN THIS SECTION 18.1 IS INTENDED BY THE PARTIES TO SUBJECT THIS AGREEMENT TO ANY FRANCHISE OR SIMILAR LAW, RULE OR REGULATION TO WHICH THIS AGREEMENT WOULD NOT OTHERWISE BE SUBJECT. + +19. Document Interpretation. + +19.1. All terms and words used in this Agreement, regardless of the number and gender in which they are used, shall be deemed and construed to include the singular or plural tense, and any gender, whether masculine, feminine or neuter, as the context or sense of this Agreement or any paragraph or clause may require, the same as if such words had been fully and properly written in the appropriate number or gender. In the event of a conflict in the language, terms, or conditions between this Agreement and any Franchise Agreement issued pursuant to this Agreement, the Franchise Agreement shall control. + +20. Covenant Not to Compete. + +20.1. To further protect the El Pollo Loco® System while this Agreement is in effect, Developer and each officer, director, shareholder, member, manager, partner and other equity owner, as applicable, of Developer, if Developer is an entity, shall neither directly nor indirectly own, operate, control or any financial interest in any other business which would constitute a "Competitive Business" (as hereinafter defined) without the prior written consent of Franchisor; provided further, that Franchisor may, as its sole and absolute right, consent to the Developer's continued operation of any business already in existence and operating at the time of execution of this Agreement. In addition, Developer covenants that, except as otherwise approved in writing by the Franchisor, Developer shall not, for a continuous, uninterrupted period commencing upon the expiration, termination or assignment of this Agreement, regardless of the cause for termination, and continuing for two (2) years thereafter, either directly or indirectly, for itself, or through or on behalf of, or in conjunction with any person, partnership, corporation or other entity, own, operate, control or have any financial interest in any Competitive Business which is located or has outlets or restaurant units within the Territory. The foregoing shall not apply to operation of an El Pollo Loco® restaurant by Developer pursuant to a Franchise Agreement with Franchisor or the ownership by Developer of less than five percent (5%) of the issued or outstanding stock of any company whose shares are listed for trading on any public exchange or on the over-the-counter market, provided that Developer does not control or become involved in the operations of any such company. For purposes of this Section 20.1, a Competitive Business shall mean a self-service restaurant or fast-food business which sells chicken and/or Mexican food products, which products individually or collectively represent more than twenty percent (20%) of the revenues from such self-service restaurant or fast-food business operated at any one location during any calendar quarter. A "Competitive Business" shall not include a full-service restaurant. + +Source: EL POLLO LOCO HOLDINGS, INC., 10-K, 3/6/2020 + + + + + +20.2. In the event that any provision of Section 20.1 above shall be determined by a court of competent jurisdiction to be invalid or unenforceable, this Agreement shall not be void, but such provision shall be limited to the extent necessary to make it valid and enforceable. + +20.3. Developer understands and acknowledges that Franchisor shall have the right to reduce the scope of any obligation imposed on Developer by Section 20.1, without Developer's consent, and that such modified provision shall be effective upon Developer's receipt of written notice thereof. + +20.4. Developer acknowledges that violation of the covenants not to compete contained in this Agreement would result in immediate and irreparable injury to Franchisor for which no adequate remedy at law will be available. Accordingly, Developer hereby consents to the entry of a preliminary and permanent injunction prohibiting any conduct by Developer in violation of the terms of those covenants not to compete set forth in this Agreement. Developer expressly agrees that it may conclusively be presumed that any violation of the terms of said covenants not to compete was accomplished by and through Developer's unlawful utilization of Franchisor's Confidential Information, know-how, methods and procedures + +21. Notices. + +21.1. For the purpose of this Agreement, all notices shall be in writing and shall be sent to the party to be charged with receipt thereof either (i) served personally, or (i) sent by certified or registered United States mail, or (ii) sent by reputable overnight delivery service, or (iv) sent by facsimile. Notices served personally are effective immediately on delivery, and those served by mail shall be deemed given forty-eight (48) hours after deposit of such notice in a United States post office with postage prepaid and duly addressed to the party to whom such notice or communication is directed. Notices served by overnight delivery shall be deemed to have been given the day after deposit of such notice with such service. Notices served via facsimile shall be deemed to have been given the day of faxing such notice. All notices to El Pollo Loco® shall be addressed as follows: + +El Pollo Loco, Inc. Attn: Legal Department 3535 Harbor Blvd, Suite 100 Costa Mesa, CA 92626 (714) 599-5503 (fax) + +21.2. All notices to Developer shall be faxed and mailed or sent via overnight service to the Developer's number and address shown on Exhibit "B". Either party may from time to time change its address for the purposes of this Section by giving written notice of such change to the other party in the manner provided in this Section. Notwithstanding anything to the contrary contained herein, the Franchisor may deliver bulletins and updates to the Developer by electronic means, such as by the internet (e-mail) or an intranet, if any, established by Franchisor. + +22. Section Headings. + +22.1. The section headings appearing in this Agreement are for reference purposes only and shall not affect, in any way, the meaning or interpretation of this Agreement. + +23. Acknowledgments. + +23.1. Developer acknowledges that it has received a complete copy of the El Pollo Loco® Franchise Disclosure Document, issuance date March 26, 2019 (Control No. 032619) at least fourteen (14) calendar days prior to the date on which this Agreement was executed by Developer or payment of any monies to the Franchisor. + +23.2. Developer acknowledges that it has read and understands this Agreement, the Franchise Agreement, the attachments thereto and the agreements relating thereto contained in the Franchise Disclosure Document received by Developer on _____,20__, and that Franchisor has accorded Developer ample opportunity and has encouraged Developer to consult with advisors of Developer's own choosing about the potential benefits and risks of entering into this Agreement. + +24. Counterparts. + +24.1. This Agreement may be executed in two or more counterparts, each of which shall be deemed an + +Source: EL POLLO LOCO HOLDINGS, INC., 10-K, 3/6/2020 + + + + + +original but all of which together shall constitute a single instrument. A signature on this Agreement transmitted via facsimile or electronic mail shall be considered an original for all purposes hereunder. + +IN WITNESS WHEREOF, the parties hereto have duly executed, sealed and delivered this Agreement in duplicate original as of the dates set forth below. + +FRANCHISOR: DEVELOPER: EL POLLO LOCO, INC., a Delaware Corporation ____________________________, an individual By: By: Name: Name: Title: Title: An individual Date: Date: + +25. EXHIBIT "A" TO DEVELOPMENT AGREEMENT - TERRITORY + +EXHIBIT "B" TO DEVELOPMENT AGREEMENT - DEVELOPMENT SCHEDULE + +DEVELOPER NAME: PRINCIPALS: NOTICE ADDRESS: FAX NUMBER: EMAIL: COMMENCEMENT DATE: EXPIRATION DATE: DEVELOPMENT FEE (SECTION 3): + +DEVELOPMENT SCHEDULE: + +INITIAL FRANCHISEE AMOUNT + +RESAC SUBMITTAL DATES + +SITE COMMITMENT DATES (Date for delivery of signed leases or purchase agreements) + +OPENING DATE OF RESTAURANT + +Restaurant # 1 $40,000.00 Restaurant # 2 $30,000.00 Restaurant # 3 $30,000.00 + +EXHIBIT "C" TO DEVELOPMENT AGREEMENT - EXISTING EL POLLO LOCO® RESTAURANTS IN THE TERRITORY + +Source: EL POLLO LOCO HOLDINGS, INC., 10-K, 3/6/2020 \ No newline at end of file diff --git a/full_contract_txt/EmbarkComInc_19991008_S-1A_EX-10.10_6487661_EX-10.10_Co-Branding Agreement.txt b/full_contract_txt/EmbarkComInc_19991008_S-1A_EX-10.10_6487661_EX-10.10_Co-Branding Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..bb59ef986a93d66939404ca45e7f738550e591c7 --- /dev/null +++ b/full_contract_txt/EmbarkComInc_19991008_S-1A_EX-10.10_6487661_EX-10.10_Co-Branding Agreement.txt @@ -0,0 +1,327 @@ +Exhibit 10.10 + +CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. + + CO-BRANDING AGREEMENT + + This Co-Branding Agreement (this "Agreement"), dated as of June 8, 1999, is made by and between Snap Technologies, Inc. a California corporation having its principal place of business at 111 Townsend St., San Francisco, CA 94107 ("Snap"), and, United Airlines, Inc., a Delaware corporation having its principal place of business at 1200 E. Algonquin Road, Elk Grove Township, IL 60007 ("Sponsor"). + + RECITALS + + A. Snap provides access to applications and other information and content regarding selecting and applying to and attending colleges and graduate and professional degree programs to end users via the World Wide Web; and + + B. Sponsor wishes to obtain sponsorship placement on Snap's web site and access to certain information pertaining to Snap's end users. + + AGREEMENT + + NOW, THEREFORE, the parties agree as follows: + +SECTION 1. DEFINITIONS + + Wherever used in this Agreement with initial terms capitalized, the following terms shall have the following defined meanings: + + "CO-BRANDED PAGES" means pages of the Snap Web Site, to be developed pursuant to Section 2.2 [CO-BRANDED PAGES] and hosted on the Snap Web Site, that display both the Snap Brand Features and the Sponsor Brand Features, along with such Sponsor Content, Snap Content and other content as the parties may agree upon. + + "CONFIDENTIAL INFORMATION" means information of either party (whether of a technical, business or other nature) which the other party knows or reasonably should know to be confidential or proprietary information of such party. + + "INTELLECTUAL PROPERTY RIGHTS" means any patent, copyright, rights in Trademarks, trade secret rights, moral rights and other intellectual property or proprietary rights arising under the laws of any jurisdiction. + + "EXCLUSIVE CATEGORY" means those product and/or service categories identified on Exhibit A. + + "SNAP BRAND FEATURES" means the Snap Marks and Snap's distinct brand elements that appear from time to time in Snap's properties, ventures and services worldwide and are protected under U.S. copyright law or for which Snap has established trademark, service mark or trade dress rights and any modifications to the foregoing that may be created during the term of this Agreement. + +CO-BRANDING AGREEMENT PAGE 1 SNAP CONFIDENTIAL + +* Portions of this exhibit have been omitted and filed separately with the Commission pursuant to a request for confidential treatment under Rule 406. + + "SNAP CONTENT" means any information, materials or content developed by Snap for use on the Sponsor Web Site. + + "SNAP MARKS" means those Trademarks of Snap set forth on Exhibit B hereto and such other Trademarks as Snap may from time to time notify Sponsor to be "Snap Marks" within the meaning of this Agreement. + + "SNAP WEB SITE" means that Web Site, the primary home page for which is located at URL http://www.collegedge.com (and any successor or replacement thereof). + +Source: EMBARK COM INC, S-1/A, 10/8/1999 + + + + + + "SPONSOR CONTENT" means any information, materials or content supplied by or on behalf of Sponsor, whether directly or indirectly, for use on the Co-Branded Pages. + + "SPONSOR BRAND FEATURES" means the Sponsor Marks and Sponsor's distinct brand elements that appear from time to time in Sponsor's properties, ventures and services worldwide and are protected under U.S. copyright law or for which Sponsor has established trademark, service mark or trade dress rights and any modifications to the foregoing that may be created during the term of this Agreement. + + "SPONSOR MARKS" means those Trademarks of Sponsor set forth on Exhibit B hereto and such other Trademarks (if any) as Sponsor may from time to time notify Snap in writing to be "Sponsor Marks" within the meaning of this Agreement. + + "SPONSOR WEB SITE" means that Web Site, the primary home page for which is located at URL http://www.ual.com and any successor or replacement thereof. + + "TERM" means the term of this Agreement as provided in Section 4.1 [TERM]. + + "TRADEMARKS" means any trademarks, service marks, trade dress, trade names, corporate names, proprietary logos or indicia and other source or business identifiers. + + "WEB SITE" means, with respect to any person or entity, all points of presence and/or services maintained by such person or entity on the Internet (including, without limitation, the World Wide Web) or on any successor public data network. With respect to any Web Site maintained on the World Wide Web, such Web Site includes all HTML pages (or similar unit of information presented in any relevant data protocol) that either (a) are identified by the same second-level domain (such as .com) or by the same equivalent level identifier in any relevant address scheme, or (b) contain branding, graphics, navigation or other characteristics such that a user reasonably would conclude that the pages are part of an integrated information or service offering. + +SECTION 2. CONTENT, CO-BRANDING AND LICENSES + + 2.1 CREATION OF CONTENT. Following the execution of this Agreement, Snap and Sponsor will work in good faith to develop the content specified in Exhibit C. All content to be included on the Co-Branded Pages shall be required to comply with Snap's generally applicable content and technical guidelines. + + 2.2 CO-BRANDED PAGES. Following the execution of this Agreement, Snap and Sponsor will work in good faith to develop the Co-Branded Pages which may include all or part of the + +CO-BRANDING AGREEMENT PAGE 2 SNAP CONFIDENTIAL + +* Portions of this exhibit have been omitted and filed separately with the Commission pursuant to a request for confidential treatment under Rule 406. + +Sponsor Content and/or the Snap Content. The Co-Branded Pages will have the specifications set forth on Exhibit C. The Co-Branded Pages shall be required to comply with Snap's generally applicable content and technical guidelines. Sponsor will supply Sponsor Content and Sponsor Brand Features as agreed upon by the parties for inclusion in the Co-Branded Pages. Following the development thereof, Snap shall use commercially reasonable efforts to post and maintain the Co-Branded Pages on the Snap Web Site. Snap may from time to time, in consultation with Sponsor, update and modify the Co-Branded Pages but may not change Sponsor content or Sponsor Brand Features, or do anything else with them, without Sponsor's prior written consent. + + 2.3 LICENSES. + + 2.3.1 Subject to Section 2.4 [APPROVAL OF TRADEMARK USAGE], Sponsor hereby grants Snap a non-exclusive, revocable nontransferable, royalty-free, worldwide license to: (a) use, reproduce, publish, perform and display the Sponsor Marks and Sponsor Brand Features on the Co-Branded Pages; (b) link to the Sponsor Web Site from the Co-Branded Pages and/or the Snap Web Site that contains the Co-Branded Pages and (c) use, reproduce, publish, perform, and display the + +Source: EMBARK COM INC, S-1/A, 10/8/1999 + + + + + +Sponsor Content in and on the Co-Branded Pages. All goodwill arising out of Snap's use of any of the Sponsor Marks shall inure solely to the benefit of Sponsor. + + 2.3.2 Subject to Section 2.4 [APPROVAL OF TRADEMARK USAGE], Snap hereby grants Sponsor a non-exclusive, nontransferable, royalty-free, worldwide license to (a) use, reproduce, publish, perform and display the Snap Marks and Snap Brand Features on the Sponsor Web Site in connection with the logo link contemplated by Section 2.l, and in connection with its promotional and marketing activities contemplated by Section 2.5 [PROMOTION OF SNAP SERVICES] and (b) use, reproduce, publish, perform and display the Snap Content on the Sponsor Web Site or other Sponsor properties as mutually agreed by the parties. All goodwill arising out of Sponsor's use of any of the Snap's Marks shall inure solely to the benefit of Snap. + + 2.4 APPROVAL OF TRADEMARK USAGE. Snap shall not use or exploit in any manner any of the Sponsor Marks or Sponsor Brand Features, and Sponsor shall not use or exploit in any manner any of the Snap Marks or Snap Brand Features, except in such manner and media as may be specified in the other party's trademark usage and branding guidelines or as the other party may consent to in writing. Either party may revise such guidelines or revoke or modify any such consent upon written notice to the other party. + + 2.5 PROMOTION OF SNAP SERVICES. Commencing upon the date of this Agreement and thereafter throughout the Term Sponsor will use its commercially reasonable efforts (subject to the terms of this Agreement) to generally promote and market Snap and the Snap Web Site. In addition, Sponsor will perform those specific promotional and marketing services specified on Exhibit D. + + 2.6 EXCLUSIVE SPONSORSHIP. During the Term, Snap will not grant any third party any right to sponsor any products or services in the Exclusive Category on or through the Snap Web Site. For the avoidance of doubt, the parties acknowledge that the foregoing restriction applies only to persistent sponsorship placement as judged by Sponsor at its discretion, and not to run-of-site banner advertisements or other rotating promotional placements. + + 2.7 SNAP USER DATA. Snap will distribute marketing messages on behalf of Sponsor to Snap's end users via electronic mail and other methods of communication as mutually agreed by the parties. Furthermore, Snap will make available to Sponsor necessary end user data as reasonably + +CO-BRANDING AGREEMENT PAGE 3 SNAP CONFIDENTIAL + +* Portions of this exhibit have been omitted and filed separately with the Commission pursuant to a request for confidential treatment under Rule 406. + +appropriate for marketing purposes, including, without limitation, pre-populating end user data into online frequent flier account applications. Sponsor acknowledges that all such end user data that is generated by Snap is valuable proprietary information of Snap and Sponsor agrees that any use of such end user data will limited solely to use for purposes of delivering superior travel values to Snap end users and for no other purpose. Furthermore, Sponsor acknowledges that any use of Snap end user data shall be limited to the extent allowed by and subject to Snap's agreement with such end users; provided, however, that Snap represents and warrants that such agreements with its end users will not increase Sponsor's duties or decrease its rights, nor reduce Snaps obligation to Sponsor hereunder without Sponsor's prior written permission. + +SECTION 3. COMPENSATION AND REPORTING + + 3.1 UP-FRONT PAYMENT. Upon execution of this Agreement, Sponsor will pay Snap the amounts set forth on Exhibit A as the "Up-Front Fee" in consideration of Snap's development and integration of travel-related content for use on the Co-Branded Pages and/or the Sponsor Web Site. + + 3.2 QUARTERLY FEE PAYMENTS. Sponsor will pay Snap the quarterly fees as set forth below on Exhibit A hereto. + + 3.3 LAUNCH OF TRAVEL CO-BRANDED PAGES. After execution of this Agreement, the parties shall work together cooperatively to determine a mutually agreeable timeline for the launch of the Co-Branded Pages. If the parties determine that an adjustment to the timing of quarterly payments hereunder is + +Source: EMBARK COM INC, S-1/A, 10/8/1999 + + + + + +appropriate, the parties may amend the quarterly payment schedule set forth on Exhibit A hereto with a written amendment signed by both parties. + +SECTION 4. TERM AND TERMINATION + + 4.1 TERM. The Term shall commence on the date of this Agreement and, unless earlier terminated or extended as provided below, shall end as of December 31, 2000. + + 4.2 TERMINATION. Either party may terminate the Term upon not less than sixty (60) days prior written notice to the other party of any breach hereof by such other party. In addition, either party may terminate the Term immediately upon written notice in the event that the other party shall fail to do business in the normal course or become subject to any bankruptcy, assignment for creditors, corporate dissolution or similar proceeding. + + 4.3 EFFECT OF TERMINATION. Upon termination or expiration of the Term for any reason, all rights and obligations of the parties under this Agreement shall be extinguished, except that: (a) the rights and obligations of the parties under Sections 5, 6, 7 and 8 of this Agreement, along with all accrued payment obligations of Sponsor (i.e. the up-front payment referenced in Section 3.1 [UP-FRONT PAYMENT] and set forth in Exhibit A hereof), shall survive any termination or expiration of the Term. + + 4.4 RIGHT OF FIRST REFUSAL. In the event of termination or expiration of this Agreement for other than a material breach of this Agreement by Sponsor, upon notice from Sponsor delivered to Snap at least forty-five (45) days prior to such expiration or termination, Snap shall negotiate in good faith an agreement providing Sponsor with sponsorship rights similar to those described herein on terms and conditions to be mutually agreed upon by the parties. In the event that an agreement + +CO-BRANDING AGREEMENT PAGE 4 SNAP CONFIDENTIAL + +* Portions of this exhibit have been omitted and filed separately with the Commission pursuant to a request for confidential treatment under Rule 406. + +between the parties is not executed within thirty (30) days following delivery, of such notice to Snap, Snap shall be free thereafter to enter into an such an agreement with any third party. + +SECTION 5. REPRESENTATIONS AND WARRANTIES; INDEMNITY + + 5.1 SNAP REPRESENTATIONS AND WARRANTIES. Snap represents and warrants to Sponsor that: + + (a) it has full power and authority to enter into this Agreement; + + (b) the execution, delivery and performance by Snap of this Agreement will not violate any law, statute or other governmental regulation, and will not violate any other agreement or instrument to which Snap is a party; and + + (c) the use of the Snap Content will not violate or infringe any Intellectual Property Right or other right of any third party. + + 5.2 SPONSOR REPRESENTATIONS AND WARRANTIES. Sponsor represents and warrants to Snap that: + + (a) it has full power and authority to enter into this Agreement; + + (b) neither the execution, delivery and performance by Sponsor of this Agreement, nor the performance of ticketing services by Sponsor, in connection with the Co-Branded Pages, will violate any law, statute or other governmental regulation or any other agreement or instrument to which Sponsor is a party; and + + (c) the use of the Sponsor Content will not violate or infringe any Intellectual Property Right or other right of any third party. + +SECTION 6. EXCLUSIONS; NO LIABILITY + +Source: EMBARK COM INC, S-1/A, 10/8/1999 + + + + + + 6.1 WARRANTIES EXCLUDED. NEITHER PARTY MAKES ANY OTHER REPRESENTATIONS OR WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING: (A) SNAP MAKES NO REPRESENTATIONS OR WARRANTIES WITH RESPECT TO THE SNAP WEB SITE, SNAP BRAND FEATURES OR ANY OTHER ITEMS OR SERVICES PROVIDED BY SNAP, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTY ARISING BY USAGE OF TRADE, COURSE OF DEALING OR COURSE OF PERFORMANCE, ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE AND ANY IMPLIED WARRANTY OF NON-INFRINGEMENT; (B) SPONSOR ACKNOWLEDGES THAT THE SNAP WEB SITE (INCLUDING ANY SERVERS OR OTHER HARDWARE, SOFTWARE AND ANY OTHER ITEMS USED OR PROVIDED BY SNAP IN CONNECTION WITH THE SNAP WEB SITE) AND SNAP BRAND FEATURES ARE PROVIDED "AS IS" AND THAT SNAP MAKES NO WARRANTY THAT THE SNAP WEB SITE WILL BE FREE FROM BUGS, FAULTS, DEFECTS OR ERRORS OR THAT ACCESS TO THE SNAP WEB SITE WILL BE UNINTERRUPTED; (C) SPONSOR MAKES NO REPRESENTATIONS OR WARRANTIES WITH RESPECT TO THE SPONSOR WEB SITE, + +CO-BRANDING AGREEMENT PAGE 5 SNAP CONFIDENTIAL + +* Portions of this exhibit have been omitted and filed separately with the Commission pursuant to a request for confidential treatment under Rule 406. + +SPONSOR BRAND FEATURES OR ANY OTHER ITEMS OR SERVICES PROVIDED BY SPONSOR, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTY ARISING BY USAGE OF TRADE, COURSE OF DEALING OR COURSE OF PERFORMANCE, ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE AND ANY IMPLIED WARRANTY OF NON-INFRINGEMENT; AND (D) SNAP ACKNOWLEDGES THAT THE SPONSOR WEB SITE (INCLUDING ANY SERVERS OR OTHER HARDWARE, SOFTWARE AND ANY OTHER ITEMS USED OR PROVIDED BY SPONSOR IN CONNECTION WITH THE SPONSOR WEB SITE) AND SPONSOR BRAND FEATURES ARE PROVIDED "AS IS" AND THAT SPONSOR MAKES NO WARRANTY THAT THE SPONSOR WEB SITE WILL BE FREE FROM BUGS, FAULTS, DEFECTS OR ERRORS OR THAT ACCESS TO THE SPONSOR WEB SITE WILL BE UNINTERRUPTED. + + 6.2 LIMITATION OF LIABILITY. NEITHER PARTY WILL HAVE ANY LIABILITY FOR, AND EACH PARTY HEREBY WAIVES AND DISCLAIMS, ANY AND ALL CLAIMS AND CAUSES OF ACTION AGAINST THE OTHER PARTY, WHETHER IN CONTRACT, TORT (INCLUDING, WITHOUT LIMITATION, NEGLIGENCE AND STRICT LIABILITY), WARRANTY OR OTHERWISE, RELATING TO ANY INDIRECT, CONSEQUENTIAL OR EXEMPLARY DAMAGES, IN EACH CASE, ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT (INCLUDING ANY BREACH HEREOF) OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY. + +SECTION 7. OWNERSHIP + + 7.1 SPONSOR. As between the parties, Sponsor retains all right, title and interest in and to the Sponsor Web Site, the Sponsor Content and the Sponsor Marks and other Sponsor Brand Features, along with all Intellectual Property Rights associated with any of the foregoing. + + 7.2 SNAP. As between the parties, Snap retains all right, title and interest in and to: (a) the Snap Content, Snap Web Site (including, without limitation, any and all Snap Web Site content (other than the Sponsor Content), Sponsor generated data, URLs, domain names, technology, hardware, software, code, know-how, techniques, algorithms, processes, user interfaces, "look and feel", Trademarks and any other items posted thereon or used in connection or associated therewith) and the Snap Marks and other Snap Brand Features, along with all Intellectual Property Rights associated with any of the foregoing. + + 7.3 OTHER TRADEMARKS. Snap shall not register or attempt to register any of the Sponsor Marks or any Trademarks which Sponsor reasonably deems to be confusingly similar to any of the Sponsor Marks. Sponsor shall not register or attempt to register any of the Snap Marks or any Trademarks which Snap reasonably deems to be confusingly similar to any of the Snap Marks. + + 7.4 FURTHER ASSURANCES. Each party shall take, at the other party's expense, such action (including, without limitation, execution of affidavits or other documents) as the other party may reasonably request to effect, perfect or confirm such other party's ownership interests and other rights as set forth above in this Section 7. + +CO-BRANDING AGREEMENT PAGE 6 SNAP CONFIDENTIAL + +Source: EMBARK COM INC, S-1/A, 10/8/1999 + + + + + +* Portions of this exhibit have been omitted and filed separately with the Commission pursuant to a request for confidential treatment under Rule 406. + +SECTION 8. GENERAL PROVISIONS + + 8.1 CONFIDENTIALITY. During the Term, and for a period of five (5) years thereafter, the receiving party will not disclose to others or use for any purpose of its own, other than in performance of this Agreement, any Confidential Information of the other party. Each party shall take, at a minimum, measures consistent with those taken to protect its own similar types of Confidential Information (and in any event, at least reasonable measures) to protect the other's Confidential Information against disclosures prohibited by this Agreement. Each party acknowledges that its breach of the provisions of this Section 8.1 [CONFIDENTIALITY] will result in immediate and irreparable harm to the other and that money damages alone would be inadequate to compensate such party. Therefore, in the event of a breach of this Section 8.1 [CONFIDENTIALITY] by either party the other party may, in addition to other remedies, immediately obtain and enforce injunctive relief prohibiting the breach or threatened breach or compelling specific performance. Notwithstanding any other provision of this Agreement, the restrictions set forth in this Section 8.1 [CONFIDENTIALITY] shall not apply to any information that: (i) is in or enters the public domain through no fault of the receiving party; (ii) is disclosed to the receiving party by a third party legally entitled to make such disclosure; (iii) is independently developed by the receiving party without reference to any Confidential Information of the other party; or (iv) is required to be disclosed by applicable law, regulation or order of any governmental authority; provided, that in such event, the receiving party shall provide the disclosing party with prior notice that is reasonable in the circumstances of such disclosure and shall use reasonable efforts to cooperate with the disclosing party to minimize the extent and scope of such disclosure. + + 8.2 INDEPENDENT CONTRACTORS. Sponsor and Snap are independent contractors under this Agreement, and nothing herein shall be construed to create a partnership, joint venture, franchise or agency relationship between Sponsor and Snap. Neither party has any authority to enter into agreements of any kind on behalf of the other party. + + 8.3 ASSIGNMENT. Neither party may assign this Agreement or any of its rights or delegate any of its duties under this Agreement without the prior written consent of the other party, not to be unreasonably withheld; except that either party may, without the other party's consent, assign this Agreement or any of its rights or delegate any of its duties under this Agreement: (a) to any corporate affiliate of such party; or (b) to any purchaser of all or substantially all of such party's assets or to any successor by way of merger, consolidation or similar transaction. Subject to the foregoing, this Agreement will be binding upon, enforceable by, and inure to the benefit of the parties and their respective successors and assigns. + + 8.4 CHOICE OF LAW; FORUM SELECTION. This Agreement shall be governed by, and construed in accordance with, the laws of the State of California without reference to its choice of law rules. Sponsor hereby irrevocably consents to personal jurisdiction and venue in the state and federal courts located in San Francisco, California with respect to any actions, claims or proceedings arising out of or in connection with this Agreement. + + 8.5 NONWAIVER. No waiver of any breach of any provision of this Agreement shall constitute a waiver of any prior, concurrent or subsequent breach of the same or any other provisions hereof, and no waiver shall be effective unless made in writing and signed by an authorized representative of the waiving party. + +CO-BRANDING AGREEMENT PAGE 7 SNAP CONFIDENTIAL + +* Portions of this exhibit have been omitted and filed separately with the Commission pursuant to a request for confidential treatment under Rule 406. + + 8.6 FORCE MAJEURE. Neither party shall be deemed to be in default of or to have breached any provision of this Agreement as a result of any delay, failure in performance or interruption of service, resulting directly or indirectly from acts of God, acts of civil or military authorities, civil + +Source: EMBARK COM INC, S-1/A, 10/8/1999 + + + + + +disturbances, wars, strikes or other labor disputes, fires, transportation contingencies, interruptions in telecommunications or Internet services or network provider services, other catastrophes or any other occurrences which are beyond such party's reasonable control. + + 8.7 NOTICES. Any notice or other communication required or permitted to be given hereunder shall be given in writing and delivered by first class U.S. mail, in person, or mailed via confirmed facsimile or e-mail, or delivered by courier service, properly addressed and stamped with the required postage, to the person signing this agreement on behalf of the applicable party at its address specified above and shall be deemed effective upon receipt. Either party may from time to time change the person to receive notices or its address by giving the other party notice of the change in accordance with this section: + + 8.8 INTEGRATION. This Agreement contains the entire understanding of the parties hereto with respect to the transactions and matters contemplated hereby, supersedes all previous agreements or negotiations between Snap and Sponsor concerning the subject matter hereof, and cannot be amended except by a writing signed by both parties. If any provision of this Agreement shall be adjudged by any court of competent jurisdiction to be unenforceable or invalid, that provision shall be limited or eliminated to the minimum extent necessary so that this Agreement shall otherwise remain in full force and effect and enforceable. + + IN WITNESS WHEREOF, the parties have duly executed and delivered this Agreement as of the date set forth above. + +SNAP: SPONSOR: + +Snap Technologies United Airlines, Inc. + +By: /s/ Howard Berman By: /s/ [*] ---------------------------------- -------------------------------------- Name: Howard Berman Name: [*] -------------------------------- ------------------------------------ Title: Chief Operating Officer Title: Director Electronic Distribution ------------------------------- ----------------------------------- Date: June 8, 1999 Date: June 8, 1999 -------------------------------- ------------------------------------ + +CO-BRANDING AGREEMENT PAGE 8 SNAP CONFIDENTIAL + +* Portions of this exhibit have been omitted and filed separately with the Commission pursuant to a request for confidential treatment under Rule 406. + + EXHIBIT A + + PAYMENTS AND EXCLUSIVITY + + 1. The Exclusive Category is "PROVIDERS OF TRAVEL SERVICE". + + 2. The up-front payment called for by Section 3.1 will be [*]. + + 3. Sponsor shall pay the following non-accrued obligation quarterly fees on or prior to the following dates: + + June 30, 1999 [*] September 30, 1999 [*] December 31, 1999 [*] March 31, 2000 [*] June 30, 2000 [*] September 30, 2000 [*] December 31, 2000 [*] + +CO-BRANDING AGREEMENT PAGE 9 SNAP CONFIDENTIAL + +* Portions of this exhibit have been omitted and filed separately with the Commission pursuant to a request for confidential treatment under Rule 406. + +Source: EMBARK COM INC, S-1/A, 10/8/1999 + + + + + + EXHIBIT B + + TRADEMARKS + + The following Trademarks of Sponsor as well as additional Trademarks of Sponsor added at a later date related to the development of the United Student Travel Center are "Sponsor Marks" as that term is used in this Agreement. + + United Airlines logos (forthcoming) + + CollegePlus logo (forthcoming) + + The following Trademarks of Snap are "Snap Marks" as that term is used in this Agreement: + +[LOGO] + +CO-BRANDING AGREEMENT PAGE 10 SNAP CONFIDENTIAL + +* Portions of this exhibit have been omitted and filed separately with the Commission pursuant to a request for confidential treatment under Rule 406. + + EXHIBIT C + + SPECIFICATIONS OF CONTENT AND CO-BRANDED PAGES + + SNAP CONTENT + + The following content shall be developed by Snap (with input from Sponsor) and provided to Sponsor for inclusion on the Sponsor Web Site: + +- - Travel related content on the "Going to School" section of the Snap site for students seeking to enter college, graduate school, professional schools or ESL programs. This content shall include but not be limited to informational articles on how to pack for travel, frequent flyer programs, and travel tips, etc. Content ideas or articles may be provided by Sponsor or by Snap. Snap will edit or write these articles as necessary to fit the overall tone of the site. + +- - As other areas of the Snap site are developed that may pertain to travel, Sponsor and Snap will look to develop travel related content in a similar fashion as above. + +- - Snap agrees to include Sponsor specials and e-fare related information in Snap's monthly newsletter to Snap's registered users. The input will be provided by Sponsor but may be adjusted by Snap to fit the overall tone of the newsletter. The Sponsor's input to the newsletter may include buttons or links back to the Sponsor's booking engine or its E-Fares-Registered Trademark- so that users may, for example, actually book tickets or sign-up for weekly E-Fare-Registered Trademark- notifications. + + SPONSOR CONTENT + + The following content shall be developed by Sponsor (with input from Snap) and provided to Snap for inclusion on the Co-Branded Pages: + +- - The Sponsor shall develop a student travel site that will include a booking engine and E-Fares-Registered Trademark- engine. Snap users may link to this site through the Snap store or through any other relevant pages on the Snap site. Users who connect from the Snap site will be linked to or from the Co-branded or Snap pages by a logo link containing the Snap Brand Features to be supplied by Snap which links back to the Snap web site. This logo link will be placed in a mutually acceptable "above the fold" location on the Sponsor site (based on a 640x450 pixels screen). + +- - Sponsor agrees that users who connect from the Snap site shall be at least one click away from any page which mentions the CollegePlus or MileagePlus + +Source: EMBARK COM INC, S-1/A, 10/8/1999 + + + + + + First Card credit card. + +- - Sponsor will work with Snap to develop content ideas and articles for the "Going to School" and other areas on the Snap site as outlined above. + +CO-BRANDING AGREEMENT PAGE 11 SNAP CONFIDENTIAL + +* Portions of this exhibit have been omitted and filed separately with the Commission pursuant to a request for confidential treatment under Rule 406. + + EXHIBIT D + + SPONSOR PROMOTIONAL ACTIVITIES + + Sponsor and Snap shall work together to create mutually acceptable content for inclusion on the "Going to School" section of the Snap Web Site. + + On each page of the Sponsor Web Site linked to or from the Co-Branded Pages or containing any Snap Content, Sponsor shall include, in a mutually acceptable "above-the-fold" location (based on a 640x480 pixels screen), a logo link containing the Snap Brand Features, to be supplied by Snap, which links back to the Snap Web Site. + + Sponsor shall make available to Snap [*] of advertising placements (based on Sponsor's standard prices for the same or similar advertising) during each the calendar years 1999 and 2000 in marketing vehicles owned or controlled by Sponsor as reasonably requested by Snap for the purpose of marketing the Co-Branded Pages and the services provided on such pages. The parties acknowledge that Snap has elected to use HEMISPHERES magazine as the initial marketing vehicle. Snap acknowledges that marketing pieces included in Sponsor's marketing vehicles must be reasonably consistent with the overall message delivered by such vehicle. + + Sponsor shall develop a its new proprietary product category to be offered through the Co-Branded Pages that shall represent a college-oriented electronic fare based on Sponsor's E-Fare-Registered Trademark- product. It is the parties' expectations that the investment required of Sponsor to deliver this new product category to the relationship described in this Agreement shall be approximately [*]. + + Sponsor shall make available to Snap [*] worth of travel on Sponsor's airline ([*] in calendar 1999 and [*] in calendar 2000) to be given away by Snap through a sweepstakes process as a promotional tool. Snap shall be free to elect to give away domestic or international travel in its sole election and will be credited [*] per domestic roundtrip ticket given away and [*] per international roundtrip ticket given away. In the event that the parties mutually determine that the sweepstakes form of promotion is a valuable marketing tool, the parties may agree to make additional tickets available to be given away. + +CO-BRANDING AGREEMENT PAGE 12 SNAP CONFIDENTIAL + +* Portions of this exhibit have been omitted and filed separately with the Commission pursuant to a request for confidential treatment under Rule 406. + +Source: EMBARK COM INC, S-1/A, 10/8/1999 \ No newline at end of file diff --git a/full_contract_txt/EmeraldHealthBioceuticalsInc_20200218_1-A_EX1A-6 MAT CTRCT_11987205_EX1A-6 MAT CTRCT_Development Agreement.txt b/full_contract_txt/EmeraldHealthBioceuticalsInc_20200218_1-A_EX1A-6 MAT CTRCT_11987205_EX1A-6 MAT CTRCT_Development Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..f79b3ebd47cb9d847eef5c6bd5de2f65e0a6fa8b --- /dev/null +++ b/full_contract_txt/EmeraldHealthBioceuticalsInc_20200218_1-A_EX1A-6 MAT CTRCT_11987205_EX1A-6 MAT CTRCT_Development Agreement.txt @@ -0,0 +1,109 @@ +Consulting and Product Development Agreement + +ARTICLE 1 -- PREAMBLE This Consulting and Licensing Agreement ("Agreement") is entered into this 1st day of September 2016 ("Effective Date") by and between Emerald Health Sciences Inc. ("EHS"), Emerald Health Nutraceuticals Inc. ("EHN"), and Michael T. Murray, N.D. ("Dr. Murray"). This Agreement sets forth a description of those responsibilities of EHS, EHN, and Dr. Murray, of certain rights granted to EHS and EHN, and of certain other terms. + +ARTICLE 2 -- RESPONSIBILITIES 2.1 EHS and EHN shall bear all costs associated with the development, inventory, sales, and marketing of any product ("Products") which EHS or EHN sells. 2.2 EHS: During any Services Term (defined below), Dr. Murray shall provide the following ongoing services to EHS for the compensation set forth in Article 5: (a) Provide guidance and/or lead initiatives related to the development of pharmaceutical forms of the EHS cannabinoid portfolio including methods to enhance bioavailability or delivery of these compounds. (b) Provide guidance and/or lead initiatives related to the scientific or clinical validation of the pharmaceutical forms of the EHS cannabinoid portfolio. (c) Provide such other services related to the foregoing as EHS may reasonably request from time to time. 2.3 EHN: During any Services Term (defined below), Dr. Murray shall provide the following ongoing services to EHN for the compensation set forth in Article 5: (a) Provide advice and general assistance in EHN's business efforts primarily involving product development, but also including guidance on marketing, sales, and product education. (b) Dr. Murray will act as public and private advocate for EHN at appropriate opportunities, including mutually agreed upon EHN educational events, public relations opportunities, and marketing efforts. (c) Provide such other services related to the foregoing as EHN may reasonably request from time to time. + +ARTICLE 3 -- DEFINITION OF SCOPE 3.1 Licensing rights. EHS and EHN agree that they shall not use Dr. Murray's name or likeness on its products or product marketing materials unless specifically approved by Dr. Murray by written acknowledgement including emails and facsimile transmissions of his approval. 3.2 Exclusivity. Dr. Murray shall not directly assist in the development of any product competitive to products developed by EHS or EHN. 3.3 Additional Services. Compensation for any other mutually agreed upon project that is outside the scope of this Agreement will be negotiated and mutually agreed upon by the parties. + +ARTICLE 4 -- PROPERTY RIGHTS 4.1 EHS and EHN shall have the exclusive rights in and to all ingredients, product specifications, goodwill, and all other intellectual property rights associated with any Product(s); provided, however, that EHS and EHN shall not have any rights in or to Dr. Murray's name or likeness except as expressly granted in writing herein or via electronic transmission by Dr. Murray. Neither shall Dr. Murray have any rights or interest whatsoever in any intellectual property, trademarks, trade names, service marks, or other names or marks owned or used by EHS. + +1 + +Source: EMERALD HEALTH BIOCEUTICALS INC., 1-A, 2/18/2020 + + + + + +ARTICLE 5 -- COMPENSATION 5.1 Payment for Services. EHN will pay Dr. Murray $8,333 per month at the end of each month during the first twelve months that this agreement is in effect. 5.2 Options. Upon execution of this Agreement and on each anniversary date of this Agreement for as long as this Agreement is active, EHS will grant Dr. Murray options to purchase 25,000 shares of EHS common stock at their then fair market value (the "Options"). The Options will vest immediately on the date of grant. 5.3 Royalty/Commission Payments. Dr. Murray will receive an annual royalty on net sales (defined as gross sales minus returns) for any products (the "Dr. Murray Products") developed by Dr. Murray for EHN for as long as the Dr. Murray Products are being sold. The Dr. Murray Products will be listed on Schedule A attached hereto as they are developed and added to product portfolio. During each year of this agreement, Dr. Murray will be paid no later than the 30st day of January based on the cumulative Net Sales of the Dr. Murray Products for the preceding 12 months based upon the following scale: + +Net Sales per 12 Months Royalty $2,000,001 to $3,500,000 $150,000 $3,500,001 to $5,000,000 $250,000 $5,000,001 to $10,000,000 $350,000 $10,000,001 to $25,000,000 $500,000 $25,000,001 to $50,000,000 $1,000,000 $50,000,001 to $75,000,000 $1,500,000 $75,000,001 to $100,000,000 $2,000,000 Greater than $100,000,000 $2,500,000 + +5.4 Ownership in EHN. Upon execution of this agreement, EHN will issue to Dr. Murray sufficient shares to represent a 5% equity ownership in EHN. 5.5 Expenses and Travel. Any pre-approved expenses incurred by Dr. Murray on behalf of EHS or EHN during any Services Term will be reimbursed, including but not limited to travel expenses incurred for air travel, car rental, hotels and meals, subject to prior approval in each case. EHS or EHN agrees to reimburse Dr. Murray for all reasonable expenses (air travel, hotel, car rental, meals, materials, etc.) relating to EHS or EHN directed activities, subject to prior approval in each case. 5.6 Withholdings and Taxes. Dr. Murray shall be responsible for all federal or state withholdings and taxes, and shall indemnify EHS or EHN for any actions brought against EHS or EHN with respect thereto. 5.7 Instructions for Payment. All payments due and payable to Dr. Murray hereunder shall be paid to: + +Michael T. Murray, N.D. [intentionally omitted] Or via electronic transfer as directed by Dr. Murray + +2 + +Source: EMERALD HEALTH BIOCEUTICALS INC., 1-A, 2/18/2020 + + + + + +5.8. EHS or EHN Benefits. Dr. Murray and Dr. Murray acknowledge and agree and it is the intent of the parties hereto that except as set forth in Section 5, neither Dr. Murray nor any employees or contractors of Dr. Murray receive any EHS-sponsored benefits, either as a consultant or employee. Such benefits include, but are not limited to, paid vacation, sick leave, medical insurance, and 401(k) participation. + +ARTICLE 6 - TERM and TERMINATION of AGREEMENT 6.1 Term. This Agreement shall become effective as of the Effective Date and shall remain in effect as follows. (a) Dr. Murray's obligations set out herein shall be performed from the Effective Date until December 31, 2018 (the initial "Services Term"). The Services Term of this Agreement shall be automatically renewed for successive two-year terms thereafter unless written notice is given by either party to the other, indicating that party's intention not to renew the Services Term of this Agreement, at least ninety (90) days prior to the end of the initial Services Term or any renewed Services Term. (b) Except as otherwise stated herein as pertaining only to a Services Term, this Agreement shall remain in effect for ten years, unless terminated in accordance with Sections 6.1 (a) or 6.2(b). For the avoidance of doubt, it is the intent of the parties that subject to the terms and conditions set forth herein, the royalty payments set out above shall continue in perpetuity for as long as the Dr. Murray Products are being sold. 6.2 Termination EHS or EHN, on the one hand, and Dr. Murray, on the other, may terminate any Services Term of this Agreement by delivering 60 days written notice to the other party. Notwithstanding the foregoing, EHS or EHN may immediately terminate the Services Term without notice should Dr. Murray be in breach of this Agreement. 6.3 Effect of Termination. (a) If a Services Term is terminated or expires but this Agreement is not otherwise terminated in accordance with Section 6.2, all other rights and obligations shall remain in effect following the termination or expiration of the Services Term. These include without limitation Sections 2.1, 3.1, 3.2, 4.1, 5.2, 5.3, 7, 8 and 9. (b) If this Agreement is termination in accordance with Section 6.2 by Dr. Murray, all of the rights and obligations hereunder shall cease and be of no further force or effect, except that Sections 4, 5 (to the extent obligations have accrued prior to termination), 7, 8 and 9 shall survive. (c) If this Agreement is termination in accordance with Section 6.2 by EHS or EHN, all of the rights and obligations hereunder shall cease and be of no further force or effect, except that Sections 2.1, 3.1, 3.2, 4.1, 5.3, 7, 8 and 9 shall survive. + +ARTICLE 7 -CONFIDENTIAL INFORMATION Neither EHS, EHN nor Dr. Murray shall disclose to any third parties, except as required by law, at any time during or subsequent to the term of this Agreement, any Confidential Information. "Confidential Information: includes proprietary information, technical data, trade secrets or know-how, including, but not limited to, the terms and conditions of this Agreement, research, product plans, products, services, suppliers, customer lists and customers, prices and costs, markets, inventions, technology, formulas, specifications, designs, drawings, marketing, licenses, finances, budgets and other business information. Confidential information does not include information that (i) is or becomes generally known to the public, through no wrongful act of the receiving party; (ii) is lawfully obtained by the receiving party from a third party which has no obligation to maintain the information as confidential; (iii) was known prior to its disclosure to the receiving party without any obligation to keep it confidential as evidenced by tangible records kept by the receiving party + +3 + +Source: EMERALD HEALTH BIOCEUTICALS INC., 1-A, 2/18/2020 + + + + + +in the ordinary course of its business; (iv) is independently developed by the receiving party without reference to the disclosing party's Confidential Information; or (v) is the subject of a written agreement whereby the disclosing party consents to the use or disclosure of such Confidential Information. If the disclosure of any such confidential information by EHS or Dr. Murray to any third party is required in order to carry out the purpose and intent of this Agreement, then EHS and Dr. Murray shall cause such third party to enter into a non-disclosure Agreement with EHS and/or Dr. Murray as a condition to such disclosure. + +ARTICLE 8 -- NOTICES All notices, communications, payments or other correspondence required to be given or made under this Agreement shall be in writing and shall be deemed received (a) on the same day if delivered in person, courier service, confirmed e-mail delivery, or facsimile transmission, (b) on the next day if delivered by next day Federal Express, UPS, or other reputable overnight carrier, or (c) within three (3) days if delivered by mail. All notices shall be given to the parties at the following addresses, or such other addresses as may be the subject of a notice given hereunder: + +Emerald Health Sciences Inc. Dr. Avtar Dhillon ad@dhillon.com + +Emerald Health Nutraceuticals Inc. Dr. Gaetano Morello gm@emerald.life + +Michael T. Murray, N.D. 8305 N. Ridgeview Drive Paradise Valley, AZ 85253 (480) 659-6733 Fax (480) 659-6753 + +ARTICLE 9 - GENERAL LEGAL MATTERS (1) Governing Law, Venue, Amendments and Merger: This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Arizona without regard to conflict of law principles, may not be amended except by a writing signed by both parties, and shall supersede any and all prior discussions and writings between the parties concerning the subject matter. The parties hereby unconditionally consent to the federal courts located in Arizona as the venue in any action arising out of or relating to this Agreement. + +(2) Waiver: No waiver by either party of a right on any one occasion shall constitute a waiver of such right on another occasion, and all such claimed waivers must be in writing signed by the party against whom the waiver is claimed. + +(3) Enforceability of Clauses: If any provision of this Agreement violates any law or is unenforceable for any other reason, it shall be severed from this Agreement without affecting the rest of the Agreement. + +(4) Consent Required: Neither party is the agent or franchisee of the other party, and neither party, under any circumstances, may bind the other party to any agreement or obligation to any third person without the written consent of the party being bound. + +4 + +Source: EMERALD HEALTH BIOCEUTICALS INC., 1-A, 2/18/2020 + + + + + +In all matters relating to thisAgreement, both parties shall be acting solely as independent contractors and shall be solely responsible for the acts of their respective employees, contractors and agents. Employees, agents and contractors of one party shall not be considered employees, agents or contractors of the other party. Any consent or approval by a party to this Agreement shall be made only by a duly authorized officer of that party. + +(5) Warranty of Authority: Each party represents and warrants that it has the full right and authority to enter into this Agreement without violating the rights of any third party or violating any applicable law or court order. + +(6) Disputes: The parties shall first attempt to resolve any dispute related to this Agreement in an amicable manner by mediation conducted in Phoenix, Arizona. The mediation shall take place no more than sixty (60) days after written notice from the party requesting such mediation. Any disputes remaining unresolved after mediation shall be settled by binding arbitration conducted in Phoenix, Arizona under the Commercial Arbitration Rules of the American Arbitration Association (AAA). Notwithstanding the foregoing, (i) the AAA shall not mediate or arbitrate the dispute, and the parties shall agree upon a mediator and arbitrator, if necessary, but if the parties cannot agree upon such mediator or arbitrator, Judicial Dispute Resolution of Phoenix, AZ shall select one of its mediators/arbitrators to serve pursuant to this Agreement, and (ii) either party may apply to any court of competent jurisdiction in Maricopa County, Arizona for such equitable, extraordinary or injunctive relief as may be necessary to enforce the respective rights of the parties under this Agreement. The prevailing party in arbitration or litigation shall be entitled to recover its costs and reasonable attorney's fees and expenses, as determined by the arbitrator or judge, as applicable. + +(7) Entire Agreement: This Agreement contains the entire agreement of the parties. + +(8) Force Majeure: A party shall not be responsible for any failure to timely perform due to a "Force Majeure" event, which is an event that is beyond the reasonable control of a party and not reasonably foreseeable with the exercise of reasonable care, nor avoidable through the payment of nonmaterial additional sums (nor due the negligence, inattention, misconduct or inexperience of the affected party). In such event, the party affected shall give prompt written notice to the other party of the cause and shall take whatever reasonable steps are necessary to relieve the effect of such cause as rapidly as possible. + +(9) Counterparts: This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall be deemed to constitute one instrument. + +(10) Electronic Means: Delivery of an executed copy of this Agreement by electronic facsimile transmission or other means of electronic communication capable of providing a printed copy will be deemed to be execution and delivery of this Agreement as of the Effective Date. A confirming copy of the same shall be sent by mail to the above address + +(11) Assignment: Dr. Murray has unique qualifications to provide the services contemplated herein, and shall not assign any of its or his rights or obligations to any other person or entity without EHS's written consent, which may be withheld or granted in EHS's discretion. + +In witness whereof the parties have caused this Agreement to be executed and delivered by their respective duly authorized representatives as of the Effective Date. + +5 + +Source: EMERALD HEALTH BIOCEUTICALS INC., 1-A, 2/18/2020 + + + + + +Dr. Murray Emerald Health Sciences Inc. + +/s/Michael T. Murray, N.D By:/s/ Avtar Dhillon Michael T. Murray, N.D + +Emerald Health Nutraceuticals Inc. By:/s/Gaetano Morello + +1 + +Source: EMERALD HEALTH BIOCEUTICALS INC., 1-A, 2/18/2020 \ No newline at end of file diff --git a/full_contract_txt/EmmisCommunicationsCorp_20191125_8-K_EX-10.6_11906433_EX-10.6_Marketing Agreement.txt b/full_contract_txt/EmmisCommunicationsCorp_20191125_8-K_EX-10.6_11906433_EX-10.6_Marketing Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..de3c5d2853bd78e4468f8221e2dfd247ceaa36f5 --- /dev/null +++ b/full_contract_txt/EmmisCommunicationsCorp_20191125_8-K_EX-10.6_11906433_EX-10.6_Marketing Agreement.txt @@ -0,0 +1,127 @@ +Exhibit 10.6 LOCAL PROGRAMMING AND MARKETING AGREEMENT (WQHT HD2) + +THIS LOCAL PROGRAMMING AND MARKETING AGREEMENT (this "Agreement") is made as of November 25, 2019 by and between MediaCo Holding Inc., an Indiana corporation (the "Licensee"), and WBLS-WLIB LLC, an Indiana limited liability company ("Programmer"). Recitals + +A. Licensee owns and operates the following radio station (the "Station") pursuant to licenses issued by the Federal Communications Commission ("FCC"): WQHT-FM, New York, NY (Facility ID No. 19615). The Station has the capability to transmit an in-band, on-channel ("IBOC") digital broadcast signal. + +B. Programmer desires to have radio broadcast station WLIB-AM, New York, NY (Facility ID No. 28204) ("WLIB") rebroadcast on the Station's HD-2 channel (the "HD2 Channel") at a bandwidth of 24kbps. + +C. Licensee has agreed to make available to Programmer airtime on the HD2 Channel and accept for rebroadcast the programs of WLIB on the terms and conditions set forth in this Agreement. + +Agreement + +NOW, THEREFORE, taking the foregoing recitals into account, and in consideration of the mutual covenants and agreements contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties, intending to be legally bound, agree as follows: + +1. Agreement Term. The term of this Agreement (the "Term") will begin on the date hereof (the "Commencement Date"), and will continue until the earlier of (i) December 31, 2022, (ii) the termination or expiration of the Studio Lease (defined below), (iii) election to terminate and notice thereof given by Programmer to Licensee, and (iv) mutual written consent of Licensee and Programmer (the "Term"), unless extended or earlier terminated pursuant to Section 11 hereof. The term "Studio Lease" means that certain Lease dated as of February 23, 1996 of certain real estate located on the 7th Floor of an office building located at 395 Hudson St., New York, New York. + +2. Programmer's Use of Airtime and Provision of Programming. During the Term, and subject in all respects to Section 6 hereof, Programmer shall be entitled to simulcast the programming of WLIB (the "WLIB Programs") on the HD2 Channel, excluding the period from 6:00 a.m. to 8:00 a.m. each Sunday morning, on the terms specified below, and shall transmit to Licensee the WLIB Programs for broadcast on the HD2 Channel twenty-four (24) hours per day, seven (7) days per week, excluding the period from 6:00 a.m. to 8:00 a.m. each Sunday morning (the "Broadcasting Period"). Programmer will transmit, at its own cost, the WLIB Programs to the Station's transmitting facilities via a mode of transmission (e.g., satellite facilities, microwave facilities and/or telephone lines) that will ensure that the WLIB Programs meet technical and quality standards at least equal to those of the HD2 Channel's broadcasts prior to commencement of the Term. + +Source: EMMIS COMMUNICATIONS CORP, 8-K, 11/25/2019 + + + + + +3. Broadcasting Obligations. During the Term, Licensee shall broadcast on the HD2 Channel the WLIB Programs delivered by Programmer during the Broadcasting Period specified in Section 2 above, subject to the provisions of Section 6 below. + +4. Advertising Sales. Programmer shall not separately sell advertising time on the HD2 Channel but may market the WLIB Programs as being rebroadcast on the HD2 Channel. + +5. Term Payments. No payment is due from Programmer to Licensee for broadcast of the Programs pursuant to this Agreement. + +6. Operation, Ownership and Control of the Station. Notwithstanding anything to the contrary in this Agreement Licensee will have full authority, power and control over the operation of the Station, including the HD2 Channel, and over all persons working at the Station's facilities during the Term. Licensee will bear the responsibility for the Station's compliance with all applicable provisions of the rules and policies of the FCC. Nothing contained herein shall prevent Licensee from (a) rejecting or refusing programs which Licensee believes to be contrary to the public interest, or (b) substituting programs which Licensee believes to be of greater local or national importance or which are designed to address the problems, needs and interests of the local communities. Licensee reserves the right to refuse to broadcast any WLIB Program containing matter which violates any right of any third party or which constitutes a personal attack. Licensee also reserves the right to refuse to broadcast any WLIB Program which does not meet the requirements of the rules, regulations, and policies of the FCC or the regulations and restrictions set forth in Section 8. Licensee further reserves the right to preempt any WLIB Program in the event of a local, state, or national emergency. Licensee agrees that its right of preemption shall not be exercised in an arbitrary or unreasonable manner, or for commercial advantage. Licensee reserves the right to delete any commercial announcements that do not comply with the requirements of the FCC's sponsorship identification policy. Programmer will immediately serve Licensee with notice and a copy of any letters of complaint it receives concerning any WLIB Program for Licensee review. Licensee's rights under this Section 6 and its decisions regarding whether to exercise such rights in any particular circumstance shall not in any way affect Programmer's obligations under Section 12 hereunder. Pursuant to Note 2 to Section 73.3555 of the FCC's rules, Licensee certifies that it maintains ultimate control over WQHT(FM)'s finances, personnel and programming, and Programmer certifies that this Agreement complies with Section 73.3555(b) of the FCC's rules. + +7. Music Licenses. During the Term, Programmer will obtain and maintain in full force and effect in its own name all necessary or appropriate music licenses with respect to the WLIB Programs rebroadcast on the HD2 Channel. Programmer represents and warrants to Licensee that Programmer has all rights in and to the WLIB Programs necessary or appropriate to rebroadcast such WLIB Programs on the HD2 Channel. + +- 2 - + +Source: EMMIS COMMUNICATIONS CORP, 8-K, 11/25/2019 + + + + + +8. Programs. + +8.1 Production of the Programs. Programmer agrees that the contents of the WLIB Programs it transmits to Licensee shall conform to all FCC rules, regulations and policies. Programmer shall provide only the WLIB Programs, and not any other programming, for broadcast on the HD2 Channel. + +8.2 Political Time. Licensee shall oversee and take ultimate responsibility with respect to the provision of equal opportunities, lowest unit charge, and reasonable access to political candidates, and compliance with the political broadcast rules of the FCC. During the Term, Programmer shall cooperate with Licensee as Licensee complies with its political broadcast responsibilities, and shall supply such information promptly to Licensee as may be necessary to comply with the political advertising time record keeping, reasonable access, and lowest unit charge requirements of federal law. Programmer shall release advertising availabilities to Licensee during the Broadcasting Period as necessary to permit Licensee to comply with the political broadcast rules of the FCC and the Communications Act of 1934, as amended. + +9. Expenses. During the Term, Programmer will be responsible for (i) the salaries, taxes, insurance and related costs for all personnel used in the production of the WLIB Programs, (ii) all other costs associated with the production of the WLIB Programs supplied to Licensee, and (iii) the costs of delivering the WLIB Programs to Licensee. + +10. Call Signs. During the Term, Licensee will retain all rights to the call letters of the Station or any other call letters which may be assigned by the FCC for use by the Station. Programmer shall include in the WLIB Programs it delivers for broadcast an announcement at the beginning of each hour of such WLIB Programs to identify such call letters, as well as any other announcements required by the rules and regulations of the FCC. Programmer is specifically authorized to use such call letters in its WLIB Programs and in any promotional material, in any media, used to promote the WLIB Programs. + +11. Events of Default; Termination. + +11.1 Programmer's Events of Default. The occurrence of any of the following will be deemed an Event of Default by Programmer under this Agreement: (a) Programmer fails to observe or perform its obligations contained in this Agreement in any material respect; or (b) Programmer breaches the representations and warranties made by it under this Agreement in any material respect. + +11.2 Licensee Events of Default. The occurrence of the following will be deemed an Event of Default by Licensee under this Agreement: (a) Licensee fails to observe or perform its obligations contained in this Agreement in any material respect; or (b) Licensee breaches the representations and warranties made by it under this Agreement in any material respect. + +11.3 Cure Period. Notwithstanding the foregoing, any Event of Default will not be deemed to have occurred until fifteen (15) days after the non-defaulting party has provided the defaulting party with written notice specifying the Event of Default and such Event of Default remains uncured. + +- 3 - + +Source: EMMIS COMMUNICATIONS CORP, 8-K, 11/25/2019 + + + + + +11.4 Termination in the Event of Default. Upon the occurrence of an Event of Default, and in the absence of a timely cure pursuant to Section 11.3, the non-defaulting party may terminate this Agreement, effective immediately upon written notice to the defaulting party. + +11.5 Cooperation Upon Termination. If this Agreement is terminated for any reason, the parties agree to cooperate with one another and to take all actions necessary to rescind this Agreement and return the parties to the status quo ante. + +12. Indemnification. Programmer shall indemnify and hold Licensee harmless against any and all liability arising from Programmer's use of Licensee's facilities, if any, or from the broadcast of the WLIB Programs on the HD2 Channel, including without limitation for libel, slander, illegal competition or trade practice, infringement of trademarks, trade names, or program titles, violation of rights of privacy, and infringement of copyrights and proprietary rights or any other violation of third party rights or FCC rules or other applicable law. The obligations under this Section shall survive any termination of this Agreement. + +13. Authority. Programmer and Licensee each represent and warrant to the other that (i) it has the power and authority to enter into this Agreement and to consummate the transactions contemplated hereby, (ii) it is in good standing in the jurisdiction of its organization and is qualified to do business in all jurisdictions where the nature of its business requires such qualification, (iii) it has duly authorized this Agreement, and this Agreement is binding upon it, and (iv) the execution, delivery, and performance by it of this Agreement does not conflict with, result in a breach of, or constitute a default or ground for termination under any agreement to which it is a party or by which it is bound. + +14. Modification and Waiver; Remedies Cumulative. No modification of any provision of this Agreement will be effective unless in writing and signed by all parties. No failure or delay on the part of Programmer or Licensee in exercising any right or power under this Agreement will operate as a waiver of such right or power, nor will any single or partial exercise of any such right or power or the exercise of any other right or power preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder. Except as otherwise provided in this Agreement, the rights and remedies provided in this Agreement are cumulative and are not exclusive of any other rights or remedies which a party may otherwise have. + +15. Assignability; No Third-Party Rights. Programmer may not assign this Agreement without the prior written consent of Licensee, which shall not be unreasonably withheld, conditioned, or delayed. No transfer or assignment shall relieve Programmer of any obligation or liability under this Agreement. The covenants, conditions and provisions hereof are and shall be for the exclusive benefit of the parties hereto and their successors and permitted assigns, and nothing herein, express or implied, is intended or shall be construed to confer upon or to give any person or entity other than the parties hereto and their successors and permitted assigns any right, remedy or claim, legal or equitable, under or by reason of this Agreement. + +16. Construction. This Agreement will be construed in accordance with the laws of the State of Indiana without regard to principles of conflicts of laws. + +17. Counterpart Signatures. This Agreement may be signed in one or more counterparts, each of which will be deemed a duplicate original. + +- 4 - + +Source: EMMIS COMMUNICATIONS CORP, 8-K, 11/25/2019 + + + + + +18. Notices. Any notice pursuant to this Agreement shall be in writing and shall be deemed delivered on the date of personal delivery or confirmed delivery by a nationally-recognized overnight courier service, or on the third day after prepaid mailing by certified U.S. mail, return receipt requested, and shall be addressed as follows (or to such other address as any party may request by written notice): If to Licensee, then to: MediaCo Holding Inc. C/O SG Broadcasting LLC 767 Fifth Ave, 12th Floor New York, NY 10153 Attention: Gail Steiner, General Counsel Facsimile: (212) 257-4709 with a copy (which shall not Morgan, Lewis & Bockius LLP constitute notice) to: 1701 Market Street Philadelphia, PA 19103 Attention: Justin W. Chairman Facsimile: (215) 963-5001 if to Programmer, then to: WBLS-WLIB LLC c/o EMMIS Communications Corporation One EMMIS Plaza 40 Monument Circle, Suite 700 Indianapolis, IN 46204 Attention: J. Scott Enright, General Counsel with a copy (which shall not Edinger Associates PLLC constitute notice) to: 1725 I Street, N.W., Suite 300 Washington, D.C. 20006 Attention: Brook Edinger 19. Entire Agreement. This Agreement embodies the entire agreement, and supersedes all prior oral or written understandings, between the parties with respect to the subject matter of this Agreement. + +- 5 - + +Source: EMMIS COMMUNICATIONS CORP, 8-K, 11/25/2019 + + + + + +20. Relationship of Parties. Neither the Programmer nor Licensee will be deemed to be the agent, partner, or representative of the other party to this Agreement, and neither party is authorized to bind the other to any contract, agreement, or understanding. + +21. Force Majeure and Facilities Upgrades. The failure of either party hereto to comply with its obligations under this Agreement due to (i) facility maintenance, repair or modification at a transmitter site or to move a transmitter site in response to FCC authorization of an improvement to or modification of the Station's operating parameters, or (ii) with respect to a failure to comply with an obligation under this Agreement, acts of God, strikes or threats thereof or a force majeure event or due to causes beyond such party's reasonable control, will not constitute an Event of Default under Section 11 of this Agreement and neither party will be liable to the other party therefor. Programmer and Licensee each agrees to exercise its commercially reasonable efforts to remedy the conditions described in parts "(i)" and "(ii)" of this Section as soon as practicable. + +22. Subject to Laws; Partial Invalidity. The obligations of the parties under this Agreement are subject to the rules, regulations and policies of the FCC and all other applicable laws. The parties agree that Licensee may file a copy of this Agreement with the FCC. If any provision in this Agreement is held to be invalid, illegal, or unenforceable, so long as no party is deprived of the benefits of this Agreement in any material respect, such invalidity, illegality, or unenforceability will not affect any other provision of this Agreement, and this Agreement will be construed as if it did not contain such invalid, illegal, or unenforceable provision. + +23. Headings. The headings of the various provisions of this Agreement are included for convenience only, and no such heading shall in any way affect or alter the meaning of any provision. + +24. Successors and Assigns. Subject to the provisions of Section 15 above, this Agreement shall be binding and inure to the benefit of Licensee and its successors and assigns and Programmer and its permitted successors and assigns. + +[SIGNATURE PAGE FOLLOWS] + +- 6 - + +Source: EMMIS COMMUNICATIONS CORP, 8-K, 11/25/2019 + + + + + +SIGNATURE PAGE TO LOCAL PROGRAMMING AND MARKETING AGREEMENT + +IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date first above written. LICENSEE: MEDIACO HOLDING INC. By: /s/ J. Scott Enright Name: J. Scott Enright Title: Executive Vice President, General Counsel & Secretary PROGRAMMER: WBLS-WLIB LLC By: /s/ J. Scott Enright Name: J. Scott Enright Title: Executive Vice President, General Counsel & Secretary + +Source: EMMIS COMMUNICATIONS CORP, 8-K, 11/25/2019 \ No newline at end of file diff --git a/full_contract_txt/EtonPharmaceuticalsInc_20191114_10-Q_EX-10.1_11893941_EX-10.1_Development Agreement.txt b/full_contract_txt/EtonPharmaceuticalsInc_20191114_10-Q_EX-10.1_11893941_EX-10.1_Development Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..1806aeb60c74a310bd032d0fa7123a53adeb560a --- /dev/null +++ b/full_contract_txt/EtonPharmaceuticalsInc_20191114_10-Q_EX-10.1_11893941_EX-10.1_Development Agreement.txt @@ -0,0 +1,177 @@ +Exhibit 10.1 Certain information identified by bracketed asterisks ([ * * * ]) has been omitted from this exhibit because it is both not material and would be competitively harmful if publicly disclosed. EXCLUSIVE LICENSE AND PRODUCT DEVELOPMENT AGREEMENT THIS EXCLUSIVE LICENSE AND PRODUCT DEVELOPMENT AGREEMENT (this "Agreement") is entered into as of June 12, 2019 (the "Execution Date") by and between Eton Pharmaceuticals, Inc., a Delaware corporation with offices at 21925 W. Field Pkwy, Suite 235, Deer Park, Illinois, USA ("ETON"), and Aucta Pharmaceuticals, Inc., a Delaware corporation with offices at 71 Suttons Lane, Piscataway, NJ 08854 ("Aucta") . RECITALS WHEREAS, ETON is engaged in the business of licensing, developing, marketing, distributing and selling pharmaceutical drug products; WHEREAS, Aucta is engaged in the business of developing pharmaceutical drug products, including the Products (later defined); WHEREAS, ETON desires to obtain an exclusive license to the Products, the Dossiers (later defined), and Aucta Background Intellectual Property (later defined) for Marketing the Products in the Territory, and Aucta is willing to grant such an exclusive license to ETON under the terms and conditions set forth herein; WHEREAS, ETON will pay Aucta certain milestone, royalty and licensing payments based on the sale of Products in the Territory under the terms and conditions set forth herein; and WHEREAS, the parties hereto agree that, unless otherwise stated, the terms herein shall not be effective unless and until the Effective Date (later defined) occurs. NOW, THEREFORE, in consideration of the foregoing premises and the representations, warranties, covenants and agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, ETON and Aucta, intending to be legally bound, hereby agree as follows: 1. DEFINITIONS. For the purposes of this Agreement, the following terms whether used in singular or plural form shall have the meanings as defined below: 1.1 "Affiliates" means, with respect to a Party or any Third Party, any corporation, firm, partnership or other entity that controls, is controlled by or is under common control with such entity. For the purposes of this definition, "control" means the ownership of at least 50% of the voting share capital of an entity or any other comparable equity or ownership interest. 1.2 "ANDA Litigation" shall have the meaning ascribed to the term in Section 7.5.2 of this Agreement. + +Source: ETON PHARMACEUTICALS, INC., 10-Q, 11/14/2019 + + + + + +CONFIDENTIAL 1.3 "Applicable Law" means the applicable laws, rules, regulations, guidelines and requirements of any Governmental Entity related to the development, registration, manufacture, importation, commercialization of the Products in the Territory, the manufacture in and export from the Territory of Manufacture, or any obligation under, or related to, this Agreement, including those obligations applicable to the Dossiers. 1.4 "Aucta Background Intellectual Property" means any and all patents and trademarks, patent and trademark applications or other patent and trademark rights, copyrights, inventions, know-how, trade secrets, proprietary knowledge, data, formulations, product specifications and other information owned, licensed to or controlled by Aucta relating to the Products, including but not limited to use, manufacture, and packaging thereof. 1.5 "Aucta Indemnified Parties" shall have the meaning ascribed to the term in Section 13.2 of this Agreement. 1.6 "Breaching Party" shall have the meaning ascribed to the term in Section 11.2 of this Agreement. 1.7 "Business Day" means any day, other than Saturday, Sunday or other day on which commercial banks are authorized or required to close in New York, New York or Rome, Italy. 1.8 "Calendar Quarter" means a three (3) consecutive month period ending on March 31, June 30, September 30 or December 31. 1.9 "Claim" includes a claim, notice, demand, action, proceeding, litigation, prosecution, arbitration, investigation, judgment, award, damage, loss, cost, expense or liability however arising, whether present, unascertained, immediate, future or contingent, whether based in contract, tort or statute and whether involving a Third Party or a Party or otherwise. 1.10 "Confidential Information" shall have the meaning ascribed to the term in Section 9.2 of this Agreement. 1.11 "Dossiers" means the New Drug Applications pursuant to 21 U.S.C. §355(b)(1)-(2), and all amendments and supplements thereof, for the Products as set forth in Exhibit A. 1.12 "Effective Date" shall have the meaning ascribed to the term in Section 11.1 of this Agreement. 1.13 "ETON Indemnified Parties" shall have the meaning ascribed to the term in Section 13.1 of this Agreement. 1.14 "FDA" means the United States Food and Drug Administration and all divisions under its direct control or any successor organizations. 1.15 "Force Majeure Events" shall have the meaning ascribed to such term in Section 15.2 of this Agreement. 2 + +Source: ETON PHARMACEUTICALS, INC., 10-Q, 11/14/2019 + + + + + +CONFIDENTIAL 1.16 "GMP" means current good manufacturing practices as defined by the FDA. 1.17 "Governmental Entity" means any arbitrator, court, judicial, legislative, administrative, or regulatory agency, commission, department, board, or bureau or body or other government authority or instrumentality or any Person or entity exercising executive, legislative, judicial, regulatory, or administrative functions of or pertaining to government, whether foreign or domestic, whether federal, state, provincial, municipal, or other. 1.18 "Gross Sales" shall have the meaning ascribed to the term in Section 1.26. 1.19 "Indemnitee" shall have the meaning ascribed to the term in Section 13.3.1 of this Agreement. 1.20 "Indemnitor" shall have the meaning ascribed to the term in Section 13.3.1 of this Agreement. 1.21 "Infringement Notification Date" shall have the meaning ascribed to the term in Section 7.4 of this Agreement. 1.22 "Intellectual Rights Suit" shall have the meaning ascribed to the term in Section 7.4 of this Agreement. 1.23 "Losses" means all losses, costs, damages, judgments, settlements, interest, fees or expenses including, without limitation, all reasonable attorneys' fees, experts' or consultants' fees, expenses and costs. 1.24 "Market" or "Marketing" shall have the meaning ascribed to the term in Section 2.1 of this Agreement. 1.25 "NDC" means a national drug code as issued by the FDA. 1.26 "Net Sales" means, with respect to each Product sold in the Territory, the aggregate gross sales amount invoiced by ETON or any sublicensee or other party authorized by ETON to wholesale or distribute the Products on an arms-length basis to Third Parties in the Territory ("Gross Sales"), less (as applicable) the following ETON expenses as accrued and adjusted for amounts actually taken, consistent with ETON'S standard accounting practices in accordance with GAAP: (a) amounts refunded or credited for returned, damaged, outdated, short-dated or defective goods, and bad debts, and (b) all of the following: (i) taxes, duties and other governmental charges related to the production, use or sale of the Products (including, including without limitation the brand manufacturer's tax imposed pursuant to the Patient Protection and Affordable Care Act (Pub. L. No. 111-148) as amended or replaced, but not including taxes assessed against the income derived from such sale); (ii) trade, quantity and cash discounts, allowances, retroactive price adjustments, credit incentive payments, chargebacks, patient support programs, and rebates (including governmental rebates or other price reductions provided, based on sales by ETON to any Governmental Entity or regulatory authority in respect of state or federal Medicare, Medicaid, government pricing or similar programs;); and (iii) any costs incurred in connection with or arising out of compliance with any Risk Evaluation and Mitigation Strategies approved by the FDA and (iv) any expenses associated with serialization of the Products. Distribution of Licensed Products for clinical trials or as samples will not be deemed a "Net Sale" under this definition. 3 + +Source: ETON PHARMACEUTICALS, INC., 10-Q, 11/14/2019 + + + + + +CONFIDENTIAL 1.27 "Party" or "Parties" means ETON or Aucta, as applicable. 1.28 "Payment Period" shall have the meaning ascribed to the term in Section 6.3.7 of this Agreement. 1.29 "Person" means any individual, partnership (general or limited), association, corporation, limited liability company, joint venture, trust, estate, limited liability partnership, unincorporated organization, government (or any agency or political subdivision thereof) or other legal person or organization. 1.30 "Pharmacovigilance Agreement" shall have the meaning ascribed to the term in Section 3.4 of this Agreement. 1.31 "Product" or "Products" means a product or products set forth in Exhibit A for Marketing by or for ETON in the Territory (and covered or intended to be covered by a Dossier) and manufactured and supplied by Aucta (or a Third Party as permitted by this Agreement) to ETON in fully packaged and labeled form and ready for commercialization by ETON. 1.32 "Recall Event" shall have the meaning ascribed to that term in Section 3.4 of this Agreement. 1.33 "Sale Representatives FTE" shall have the meaning ascribed to the term in Section 5.4 of this Agreement. 1.34 "Specification" shall mean, for a particular Product, the specifications, methods and processes of the product, as set forth in the applicable Dossier for that Product. 1.35 "Taxes" means taxes, duties, fees, premiums, assessments, imposts, levies and other charges of any kind whatsoever imposed by any Governmental Entity, including all interest, penalties, fines, additions to tax or other additional amounts imposed by any Governmental Entity in respect thereof, and including those levied on, or measured by, or referred to as, income, gross receipts, profits, capital, transfer, land transfer, sales, goods and services, harmonized sales, use, value-added, excise, stamp, withholding, business, franchising, property, development, occupancy, employer health, payroll, employment, health, social services, education and social security taxes, all surtaxes, all customs duties and import and export taxes, countervail and anti-dumping, all license, franchise and registration fees and all employment insurance, health insurance and government pension plan premiums or contributions. 1.36 "Term" shall have the meaning ascribed to this term in Section 11.1 of this Agreement. 4 + +Source: ETON PHARMACEUTICALS, INC., 10-Q, 11/14/2019 + + + + + +CONFIDENTIAL 1.37 "Territory" shall mean the fifty states of the United States of America, the District of Columbia, the Commonwealth of Puerto Rico, Guam, American Samoa, the U.S. Virgin Islands and all territories and possessions of the United States of America and United States military bases. 1.38 "Territory of Manufacture" means the country where the Products is made. 1.39 "Third Party" means any Person other than ETON, Aucta or their respective Affiliates. 1.40 "Transfer Taxes" shall have the meaning ascribed to this term in Section 10 of this Agreement. 2. GRANT OF RIGHTS 2.1 Aucta, for itself and its Affiliates, hereby grants to ETON in accordance with the terms and conditions of this Agreement, an exclusive (even as to and against Aucta in the Territory) right and license, including the right to sublicense, to the Products (or any components thereof), Dossiers, and all current and future Aucta Background Intellectual Property that is owned or controlled by Aucta or its Affiliates for ETON to develop, manufacture, import, use, promote, distribute, market, advertise, offer for sale or sell (collectively, "Market") the Products in and for the Territory. For avoidance of doubt, Aucta and its Affiliates shall retain all rights to the Products outside the Territory, and Aucta shall remain at all times the owner of all Products, Dossier and Aucta Background Intellectual Property worldwide including the Territory. 2.2 ETON, for itself and its Affiliates, hereby grants to Aucta in accordance with the terms and conditions of this Agreement, a right and license, to its trademark, including to its name and logo, that is owned or controlled by ETON or its Affiliates for Aucta (or its authorized Third Party) to make the packs, labels, and leaflets for the Products for sale in the Territory. For avoidance of doubt, ETON and its Affiliates shall remain the owner of its trademarks. 3. PRODUCT DEVELOPMENT AND REGISTRATION 3.1 Development and Registration Responsibilities. 3.1.1 At its sole cost and expense, Aucta shall be responsible and liable for all development and manufacturing activities required for the filing and approval of the Dossiers for the Products in and for the Territory, including without limitation all costs and management of any required pre-approval and post-approval clinical or other studies. 3.1.2 At its sole cost and expense, Aucta shall be responsible and liable for all regulatory activities required for the filing and approval of the Dossiers for the Products in and for the Territory. 3.1.3 Aucta shall provide to ETON all regulatory and compliance-related documents and correspondence with the FDA within five (5) Business Days after submission or receipt of such documents or correspondence with the FDA relating to the Products or Dossiers for the Products, including without limitation any oral (notes thereof) and written correspondence with FDA relating to the Products or Dossiers and any compliance-related oral (notes thereof) or written correspondence with FDA relating to the Product(s)' manufacturing facility(ies)' status or deficiencies. 5 + +Source: ETON PHARMACEUTICALS, INC., 10-Q, 11/14/2019 + + + + + +CONFIDENTIAL 3.1.4 ETON will provide commercially reasonable support on regulatory activities, when requested by Aucta and necessary for approval. 3.2 Registration Maintenance and Regulatory Responsibilities. 3.2.1 Aucta shall hold the approved Dossiers in its name and be responsible for their maintenance. Aucta will take all actions with the FDA, including paying all fees and conducting all communications with FDA or other Governmental Entities as required by Applicable Law in respect of the Dossiers, including without limitation payment of fees owed under the Prescription Drug User Fee Act, Annual Branded Prescription Drug Fees assessed under Section 9008 of the Patient Protection and Affordable Care Act (ACA), Public Law 111-148 (124 Stat. 119 (2010)), as amended by Section 1404 of the Health Care and Education Reconciliation Act of 2010 (HCERA), Public Law 111-152 (124 Stat. 1029 (2010)), or any successor laws, and preparing and filing all required reports (including adverse drug experience reports) with the appropriate Governmental Entity. 3.3 ETON's NDC Numbers. Aucta and its Affiliates shall not sell any products under ETON's or its Affiliates' names or NDC numbers. 3.4 Medical Inquires, Product Complaints and Recalls. ETON, Aucta and a designated third-party contract manufacturer shall share in the responsibility for responding to any medical inquiries or complaints about any Products or addressing any circumstances that may result in a potential recall, market withdrawal, inventory retrieval, or similar action ("Recall Event") as set forth in the Pharmacovigilance Agreement attached hereto as Exhibit B (the "Pharmacovigilance Agreement") and to be entered into by the Parties and the contract manufacturer as soon as practicable. 3.5 Competitive Products. During the Term of this Agreement, and for a period of two (2) years thereafter, Aucta shall not research, develop, manufacture, file, sell, market, or distribute more than two products containing the active ingredient Lamotrigine; nor will Aucta directly or indirectly assist any other Person or entity in carrying or any such activities. [ * * * ] 4. MANUFACTURE AND SUPPLY 4.1 ETON shall enter into a commercial supply agreement with a contract manufacturing organization and Aucta shall enter into a commercial supply agreement with an active pharmaceutical ingredient supplier within ninety (90) days from the Execution Date unless otherwise agreed to by the parties in writing. 4.2 If the terms of Aucta's commercial supply agreement with the active pharmaceutical ingredient supplier in Section 4.1 is assignable to ETON, ETON may assume the aforementioned agreement by providing written notice to Aucta, and Aucta will have seven (7) days from receipt of the notice to assign the aforementioned agreement to ETON. 6 + +Source: ETON PHARMACEUTICALS, INC., 10-Q, 11/14/2019 + + + + + +CONFIDENTIAL 5. SALES, MARKETING AND DISTRIBUTION 5.1 ETON shall be solely responsible for the Marketing of the Products and shall have sole and exclusive right to make all Marketing decisions for the Product in the Territory, including without limitation to pricing, contracting, sub-licensing, co-promoting, or any contract promotion activities. 5.2 ETON shall use commercially reasonable efforts to Market the Products in the Territory during the Term of this Agreement. 5.3 ETON shall have the sole and exclusive right to determine all terms and conditions of sale of the Products to its or its prospective consumers. 5.4 [ * * * ] 6. MILESTONES AND OTHER PAYMENTS 6.1 Licensing Fees. ETON shall pay to Aucta licensing fees of up to an amount of five million dollars ($5,000,000) based on the following payment schedule: (a) An amount of two million dollars ($2,000,000) within five (5) days of the Effective Date of this Agreement. (b) An amount of two million dollars ($2,000,000) within thirty (30) days after the first commercial sales of Product. [ * * * ] (c) An amount of one million dollars ($1,000,000) within thirty (30) days after the issuance and listing of a patent in the Orange Book for the Product and its Dossier, only if that patent is listed prior to the submission of an ANDA referencing the Product and its Dossier as the reference product. 6.2 Commercial Milestones. ETON shall pay to Aucta a total sum amount of up to eighteen million dollars ($18,000,000) based on Net Sales of a Product (on a Product by Product basis) after the achievement of the following one-time milestones for each Product: (a) An amount of one million dollars ($1,000,000) upon Net Sales first exceeding an amount of ten million dollars ($10,000,000) in a calendar year to be paid within sixty (60) days after the calendar year end. (b) An amount of two million dollars ($2,000,000) upon Net Sales first exceeding an amount of twenty million dollars ($20,000,000) in a calendar year to be paid within sixty (60) days after the calendar year end. (c) An amount of five million dollars ($5,000,000) upon Net Sales first exceeding an amount of fifty million dollars ($50,000,000) in a calendar year to be paid within sixty (60) days after the calendar year end. 7 + +Source: ETON PHARMACEUTICALS, INC., 10-Q, 11/14/2019 + + + + + +CONFIDENTIAL (d) An amount of ten million dollars ($10,000,000) upon Net Sales first exceeding an amount of one hundred million dollars ($100,000,000) in a calendar year to be paid within sixty (60) days after the calendar year end. 6.3 Royalty. 6.3.1 ETON shall pay to Aucta a royalty payment of [ * * * ] of Net Sales of the Products. 6.3.2 [ * * * ] 6.3.3 If the amount of royalty payment under Section 6.3.1 is less than the amount of royalty payment under Section 6.3.2, then ETON shall pay Aucta the difference between royalty payments in Sections 6.3.1 and 6.3.2 within sixty (60) days of the calendar year end, but in no event shall the difference paid be greater than the minimum amount in Section 6.3.2. 6.3.4 For payments under Section 6.3, ETON shall pay Aucta royalty payments under Section 6.3.1 or 6.3.2 only, but not under both sections concurrently. 6.3.5 If ETON is unable or limited in its ability to sell the Products due to supply chain (e.g., manufacturing, API, etc.) or regulatory issues, that extend for a period of thirty (30) days or more, the minimum royalty payment under Section 6.3.2 shall be adjusted to prorate the annual minimum to account for the period of inability to supply; provided, however, that the minimum royalty payment shall be paid if the inability or limitation of sales by ETON is directly and solely due to ETON's gross negligence or willful misconduct. 6.3.6 [ * * * ] 6.3.7 Within thirty (30) days following the end of each Calendar Quarter following the first commercial sale of the Product in the Territory, including the first and last payment period which may be of a shorter duration (each, a "Payment Period"), ETON shall: (a) compute and report to Aucta in a mutually acceptable format the Net Sales for each Product sold in the Territory during the Payment Period, and (b) pay to Aucta the appropriate royalty payment under Section 6.3 within thirty (30) days of the delivery of the report. 6.4 [ * * * ] 6.5 Interim and Final True-Ups. During the Term, on an annual basis, following the first (1st) calendar year from launch of Product and on a Product-by-Product basis, ETON shall perform an interim "true-up" reconciliation and shall provide Aucta with a written report of such outlining the deductions specified in the definition of Net Sales. The reconciliation shall be based on actual cash paid or credits issued or accrued in accordance with GAAP and company practices consistently applied, including any amounts irrevocably committed but not yet paid at the end of the preceding calendar year. If the foregoing reconciliation report shows either an underpayment or an overpayment between the Parties, the Party owing payment to the other Party shall pay the amount of the difference to the other Party within thirty (30) days after the date of delivery of such report. In addition, within twenty-five (25) months after the termination or expiration of the Term and on a Product-by-Product basis, ETON shall perform a final "true-up" reconciliation and shall provide Aucta with a written report of such outlining the deductions specified in the definition of Net Sales. If the foregoing reconciliation report shows either an underpayment or an overpayment between the Parties, the Party owing payment to the other Party shall pay the amount of the difference to the other Party within thirty (30) days after the date of delivery of such report. 8 + +Source: ETON PHARMACEUTICALS, INC., 10-Q, 11/14/2019 + + + + + +CONFIDENTIAL 6.6 Taxes. Each Party shall be responsible for and shall pay all Taxes payable on any income earned or received by it during the Term. Where required by law, ETON shall have the right to withhold applicable Taxes from any payments to be made hereunder by ETON to Aucta. Any Tax, duty or other levy paid or required to be withheld by ETON on account of any payments payable to Aucta under this Agreement shall be deducted from the amount of payments due to Aucta. ETON shall secure and promptly send to Aucta proof of such Taxes, duties or other levies withheld and paid by ETON for the benefit of Aucta. Each Party agrees to cooperate with the other Party in claiming exemptions from such deductions or withholdings under any agreement or treaty from time to time in effect. 6.7 Audits. Each Party shall permit an independent certified public accounting firm selected by the auditing Party and reasonably acceptable to the non-auditing Party, that has agreed to be bound by a confidentiality agreement reasonably acceptable to the Parties, to have access, during normal business hours and upon reasonable prior notice (not more often than once in any calendar year), to those books and records maintained by the non-auditing Party necessary for the auditing Party to verify the accuracy of the non-auditing Party's calculations under this Section 6 and/or cost of Product(s) for any period ending not more than two (2) years prior to the date of such request, subject to any limitations in scope necessary to comply with Applicable Law, Third Party confidentiality restrictions, or maintain legal privilege, including but not limited to Third Party pricing information. All such information shall be retained on a confidential basis by the accounting firm, and such accounting firm's use of such information shall be limited to the aforementioned verification. Unless otherwise agreed to by the Parties in writing, the accounting firm shall not be paid on a contingency or similar basis. 6.8 Accounting. ETON and Aucta shall calculate and record calculations under this Section 6 and with respect to Product(s) cost in accordance with U.S. GAAP, and shall maintain all books and records related thereto in accordance with standard cost accounting policies and practices, in accordance with U.S. GAAP for the Term plus an additional three (3) years thereafter. 7. PATENT PROSECUTION AND LITIGATION 7.1 At its sole cost and expense, Aucta shall be solely responsible and liable for any litigation in connection with the Product's development, and the Aucta Background Intellectual Property other than ANDA Litigation covered below in Section 7.5. 7.2 At its sole cost and expense, ETON shall be solely responsible and liable for any non-patent litigation in connection with its sales and marketing activities. 9 + +Source: ETON PHARMACEUTICALS, INC., 10-Q, 11/14/2019 + + + + + +CONFIDENTIAL 7.3 Patent Prosecution. Each Party shall be responsible, at its own expense, for filing and prosecuting such patent applications, as it deems appropriate, and for paying maintenance fees on any patents issuing therefrom, for the Term, with respect to intellectual property owned by it that relate to or are used in connection with the manufacture, sale or use of the Product. Notwithstanding anything herein to the contrary, and in the event that that the Aucta Background Intellectual Property includes patent(s) and or patent application(s), Aucta, at its sole cost and expense, shall maintain and protect the Aucta Background Intellectual Property and continue to prosecute and maintain its patents included in the Aucta Background Intellectual Property and shall keep ETON advised of material actions relative to the same. Should Aucta contemplate abandoning or otherwise forfeiting any patent/patent applications or patent rights in the Aucta Background Intellectual Property, Aucta shall notify ETON in advance of such contemplation. In such an event, ETON may pursue maintaining such patent(s) or filing and prosecuting such patent applications relating to the Products, at its own cost and expense, and shall obtain from Aucta rights and licenses to those patents and patent applications with the same scope as that in Section 2.1. Aucta shall maintain the confidentiality of any trade secrets included in the Aucta Background Intellectual Property. Each Party shall promptly render all necessary assistance reasonably requested by the other Party, at the requesting Party's expense, in applying for and prosecuting patent applications based on intellectual property owned by such other Party pursuant to this Agreement. 7.4 Notice of Infringement. If either Party shall learn of (a) any claim or assertion that the manufacture, use or marketing of the Product under this Agreement, or any other action taken by either party in performance of its obligations hereunder infringes, misappropriates or otherwise violates the intellectual property rights of any Third Party, or (b) the actual or threatened infringement, misappropriation or other violation by any Third Party of the intellectual property rights of any party that are the subject of this Agreement ("Intellectual Rights Suits"), then the Party becoming so informed shall as soon as reasonably practicable, but in all events within three (3) Business Days thereafter (the "Infringement Notification Date"), notify the other Party of such claim or assertion, or actual or threatened infringement, misappropriation or other violation. 7.5 Intellectual Rights Suit. 7.5.1 Other than an ANDA Litigation covered below in Section 7.5.2, Aucta shall at its sole cost and expense be solely responsible and liable for and assume the direction and control of any Intellectual Rights Suit and the defense of claims arising therefrom, including, without limitation, the selection of legal counsel; provided, however, that Aucta shall keep ETON apprised of material developments. ETON shall fully cooperate with Aucta in the defense of any such Intellectual Rights Suit (regardless of which Party is a named party to such suit), including joining as a party to the suit, and shall be consulted by Aucta in connection with the settlement of any such Intellectual Rights Suit. Except as otherwise set forth in this Agreement, Aucta shall be responsible for all reasonable attorneys' fees and costs, settlement amounts and/or awarded damages incurred by Aucta or by ETON at the request of Aucta or with Aucta's approval in connection with the defense of Intellectual Rights Suit covered by this Section 7.5.1 provided such is directly related to this Agreement. 10 + +Source: ETON PHARMACEUTICALS, INC., 10-Q, 11/14/2019 + + + + + +CONFIDENTIAL 7.5.2 If the Intellectual Rights Suit relates to the submission to the FDA of an Abbreviated New Drug Application with a Paragraph IV certification to a patent or patents listed in the Orange Book in connection with the Product's Dossier ("ANDA Litigation"), then Aucta in consultation and coordination with ETON shall jointly control the ANDA Litigation(s) and the defense of claims arising therefrom, including, without limitation, the selection of legal counsel; provided, however, that in the event of a disagreement about the conduct of the litigation or selection of counsel that is not resolved through good faith negotiation, Aucta shall have the right to make any final decisions. Aucta and ETON shall share equally the costs of litigating any ANDA Litigation and each party shall fully cooperate with the other in any such ANDA Litigation (regardless of which Party is a named party to such suit), including joining as a party to the suit, if necessary. No settlement shall be made of an ANDA Litigation without the consent of both Parties, such consent not to be unreasonably withheld. 7.5.3 The Parties agree that they will not, whether in the context of the Intellectual Rights Suit, ANDA Litigation or otherwise related thereto, without the prior written consent of the other Party enter into any agreement or arrangement with any Third Party which in any way compromises, relinquishes, waives, or otherwise affects, in whole or in part, the rights of the other Party under this Agreement or in respect of the Product, including, without limitation, any patent rights related to the Product. 7.6 Sections 7.1, 7.2 and 7.5 shall survive termination or expiration of this Agreement. 8. INSURANCE At all times from the first commercial sale of any Product(s) or after the Effective Date through the date which is five (5) years after the final sale of such Product(s), the Parties will maintain general liability insurance in amounts that are reasonable and customary in the pharmaceutical industry, provided in no event shall the general liability insurance amounts be less than five million dollars ($5,000,000) per occurrence and ten million dollars ($10,000,000) in the aggregate limit of liability per year. The Parties shall provide written proof of such insurance to each other upon request. 9. CONFIDENTIAL INFORMATION; PUBLICITY 9.1 Confidential Information. Each Party agrees that it shall not, without the prior written consent of the other Party, (i) disclose to any Person such other Party's Confidential Information (as defined below), except to those of its and its Affiliates' employees or representatives who need to know such information for the purpose of exploiting its rights or fulfilling its obligations under this Agreement (and then only to the extent that such persons are under an obligation to maintain the confidentiality of the Confidential Information), or (ii) use any of such other Party's Confidential Information for any reason other than as contemplated by this Agreement. If a Party has been advised by legal counsel that disclosure of Confidential Information of the other Party is required to be made under Applicable Law (including to the FDA or pursuant to the requirements of a national securities exchange or another similar regulatory body on which it's or any of its Affiliates stock trades) or pursuant to documents subpoena, civil investigative demand, interrogatories, requests for information, or other similar process, the Party required to disclose the Confidential Information shall (to the extent legally permitted) provide the other Party with prompt written notice of such request or demands or other similar process so that such other Party may seek an appropriate protective order or waive the disclosing Party's compliance with the provisions of this Section. In the absence of a protective order or waiver or other remedy, the Party required to disclose the other Party's Confidential Information may disclose only that portion of the Confidential Information that its legal counsel advises it is legally required to disclose, provided that it exercises its commercially reasonable efforts to preserve the confidentiality of such other Party's Confidential Information, at such other Party's expense, including by cooperating with such other Party to obtain an appropriate protective order or other reliable assurance that confidential treatment will be accorded the Confidential Information. Confidential Information shall remain the sole property of the disclosing Party and all Confidential Information furnished in written form (and all copies thereof) shall be promptly returned to the disclosing Party or destroyed by the receiving Party at the disclosing Party's request; provided, however, that the receiving Party may retain copies of such Confidential Information as necessary for its compliance obligations under Applicable Laws and any archival purposes, subject to the ongoing obligation to maintain the confidentiality of such information. This Section 9.1 shall survive termination or expiration of this Agreement and continue in effect thereafter for a period of five (5) years. 11 + +Source: ETON PHARMACEUTICALS, INC., 10-Q, 11/14/2019 + + + + + +CONFIDENTIAL 9.2 Definition of Confidential Information. The term "Confidential Information" as used in this Agreement means all confidential information relating to the Parties' business and operation, this Agreement's term sheet, this Agreement and its terms, or other technical, business or financial information provided by the Parties as contemplated by this Agreement. The term "Confidential Information" does not include information that (A) becomes generally available to the public other than as a result of disclosure by the receiving Party, (B) becomes available to the receiving Party on a non-confidential basis from a source other than the disclosing Party, provided that such source is not known by the receiving Party to be bound by a confidentiality agreement with the disclosing Party, (C) was previously known by the receiving Party as evidenced by the receiving Party's written records, or (D) was independently developed by the receiving Party without use of or reliance on the Confidential Information. 9.3 Public Announcement. Neither ETON, Aucta nor any of their respective Affiliates shall issue any press release or make any public announcement with respect to this Agreement and the transactions contemplated hereby without obtaining the prior written consent of the other Party, except as may be required by Applicable Law or stock exchange rules on which a Party or its Affiliates stock trades. 10. TRANSFER TAXES All transfer, sales, value added, stamp duty and similar Taxes ("Transfer Taxes") payable to the U.S. government in connection with the transaction contemplated hereby will be borne by ETON and all Transfer Taxes payable to an ex-U.S. government in connection with the transaction contemplated hereby will be borne by Aucta. 12 + +Source: ETON PHARMACEUTICALS, INC., 10-Q, 11/14/2019 + + + + + +CONFIDENTIAL 11. TERM AND TERMINATION 11.1 Term. The term of this Agreement shall automatically become effective upon the occurrence of (i) ETON executing a commercial supply agreement with a contract manufacturing organization within forty-five (45) days of the Execution Date, provided that ETON has exercised best efforts to execute such agreement and the failure to execute is solely caused by the refusal or inability of the proposed manufacturing organization to sign a reasonable agreement; and (ii) acceptance for review of the Dossier or marketing application for [ * * * ] by the FDA no later than September 2, 2019 (such date, the "Effective Date") and shall end upon the termination or expiration of the Agreement as set forth in Section 11 (the "Term"). For avoidance of doubt, all rights conferred to ETON under this Agreement for the purpose of allowing ETON to Market the Product in the Territory shall continue until a Party terminates this Agreement. Aucta should continue to receive 15% of Net Sales Royalty for as long as ETON is selling the Product(s) in the Territory, unless otherwise agreed to under this Agreement. The obligations of ETON to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment or ETON's waiver of the occurrence of the Effective Date. 11.2 Termination for Breach. The Agreement may be terminated by either Party by written notice to the other at any time if the other Party (the "Breaching Party") is in material breach or default of any of its obligations hereunder or any of its representations or warranties as follows: (i) the terminating Party shall send a written notice of the material breach or material default to the Breaching Party and (ii) the termination shall become effective a) thirty (30) days after sending notice of the breach if the breach is non-payment of amounts due hereunder, such as milestone, minimum royalty or royalties amounts and b) sixty (60) days after sending notice of the breach for all other breaches unless the Breaching Party has cured any such material breach or material default prior to the expiration of the thirty (30) or sixty (60) day period as the case may be; or if for non- payment breaches such material default or material breach is not capable of being cured within such sixty (60) day period and the Breaching Party has commenced activities reasonably expected to cure such material breach or material default within such sixty (60) day period and thereafter uses diligent efforts to complete the cure as soon as practicable, but in no event shall such period exceed ninety (90) days. 11.3 Termination for Bankruptcy. Either Party may immediately terminate the Agreement in whole or in part if the other Party: (a) makes an assignment for the benefit of creditors, admits in writing its inability to pay debts as they mature, or ceases operating in the normal course of business; (b) has a receiver or trustee appointed by a court over the Party or any substantial part of the Party's assets; (c) becomes insolvent or is unable to pay its debts as they become due; (d) authorizes, applies for or consents to the appointment of a trustee or liquidator of all or a substantial part of its assets or has proceedings seeking such an appointment commenced against it which are not terminated within ninety (90) days of such commencement; (e) has any substantial part of its property subjected to any levy, seizure, assignment or sale for, or by any creditor or governmental agency without said levy, seizure, assignment or sale being lifted, released, reversed or satisfied within ten (10) days; (f) files a voluntary petition under any chapters of the United States Bankruptcy Code or any other insolvency law or an involuntary proceeding has been commenced by any Party against the Party under any one of the chapters of the United States Bankruptcy Code or any other insolvency law and (A) the proceeding has been pending for at least sixty (60) days; or (B) the Party has consented, either expressly or by operation of law, to the entry of an order for relief; or (C) the Party has been decreed or adjudged a debtor or equivalent. 13 + +Source: ETON PHARMACEUTICALS, INC., 10-Q, 11/14/2019 + + + + + +CONFIDENTIAL 11.4 Termination Other than for Breach or Insolvency. (a) ETON has the right to terminate this Agreement at any time at its sole discretion if the Dossier or marketing application for the Product is not approved by December 31, 2020 or at a later time if agreed to in writing by the Parties. (b) ETON has the right to terminate this Agreement after approval of the Dossier or marketing application for the Product (or added new product), at its sole discretion, upon providing one hundred eighty (180) days' written notice to Aucta. (c) If Aucta terminates under Section 11.2 or 11.3, or if ETON terminates under Section 11.4(b), ETON shall continue to market the Products as before notice of termination, receive revenue and pay associated costs for selling the Product(s) during any notice period. After termination is effective and Aucta assumes control of the Product, ETON will provide, to the extent practicable, transition services to Aucta to include assistance with Product distribution, processing of rebates, drug safety, etc. at Aucta's cost for such services, for a reasonable period of time as mutually determined by the Parties but not to exceed one hundred eighty (180) days following termination so that Aucta can get its own such services in place. The Parties shall determine the rate for such additional transition services as may be required. The objective of this clause is to provide reasonable assurance that a termination does not disrupt the supply of Product)s) to the market if possible and both parties shall work in good faith to try and avoid any disruption in the marketing or supply of Products during termination and transfer of Products sales back to Aucta. 11.5 Effect of Termination or Expiration: Surviving Obligations. 11.5.1 If this Agreement is terminated by ETON (i) under Section 11.3, in addition to any remedies that ETON is entitled to, then (a) Aucta shall transfer ownership of the Dossiers to an Aucta shareholder-controlled entity to enable ETON to continue to commercialize the Products in the Territory; or (ii) under Section 11.4(a) and (b), in addition to any remedies that ETON is entitled to, then (a) Aucta may keep all the payments under Section 6 paid by ETON up to the point of termination, (b) all rights of Aucta granted to ETON shall revert to Aucta, and (c) ETON shall request consent from the contract manufacturing organization (if necessary) that the commercial supply agreement with the contract manufacturing organization be assigned to Aucta. 11.5.2 If this Agreement is terminated by Aucta under Section 11.2 or 11.3, then (a) ETON shall have the right to, and Aucta shall hereby grant ETON a license to, Market or otherwise dispose of any existing inventory of any Products then in ETON's possession subject to paying all Royalties and other amounts due hereunder for such sales, (b) Aucta may keep all the payments under Section 6 paid by ETON up to the point of termination and for ETON's disposal of remaining inventory and Aucta is free to commercialize or relicense the Product with no further obligations owed to ETON, (c) ETON shall refrain from holding itself out as Aucta's distributor, in particular, eliminate any reference to the Product and Aucta from its business, trade style and promotional material, and (d) ETON shall transfer all rights, licenses within thirty (30) days of termination. 14 + +Source: ETON PHARMACEUTICALS, INC., 10-Q, 11/14/2019 + + + + + +CONFIDENTIAL 11.5.3 This Section 11.5 shall survive termination or expiration of this Agreement. 12. REPRESENTATIONS AND WARRANTIES 12.1 ETON Representations and Warranties. ETON represents and warrants to Aucta that: 12.1.1 it has the corporate power and authority to enter into this Agreement and to consummate the transactions contemplated hereby; 12.1.2 neither the execution and delivery of this Agreement by it, nor its performance hereunder, conflicts with or will result in any violation or breach of, or constitutes (with or without due notice or lapse of time or both) a default under any of the terms or conditions of any note, indenture, license, agreement or other instrument or obligation to which it is a party or by which it or any of its properties or assets may be bound; or to its best knowledge, violates any Applicable Law; 12.1.3 this Agreement is a legal, valid and binding agreement of ETON, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and other similar laws affecting creditors' rights generally from time to time in effect and to general principles of equity (including concepts of materiality, reasonableness, good faith and fair dealing), regardless of whether considered in a proceeding in equity or at law; and 12.1.4 it has not been debarred, is not subject to debarment, and will not use, in any capacity in connection with the obligations to be performed under this Agreement, any person who has been debarred pursuant to Section 306 of the United States Food, Drug and Cosmetic Act; 12.1.5 there is no Claim, suit, investigation, action or proceeding pending or threatened against ETON before any court, governmental agency, or arbitration panel which may in any way materially adversely affect the performance of its obligations hereunder or transaction contemplated by this Agreement; 12.1.6 it has not and will not enter into any contract or any other transaction with any Third Party or Affiliate that conflicts with or derogates from its undertakings hereunder; 12.1.7 it has and will at all times during Term have requisite expertise, experience, personnel, equipment and skill to perform its obligations hereunder; and 12.1.8 it has obtained or will maintain to the extent necessary for its performance of activities with respect to the Products under this Agreement all required licenses, authorizations, and approvals required by federal, state, or local governmental authorities, including the FDA and any other applicable regulatory agency to the extent it is selling, supplying, manufacture, export and supply each Product for the Territory and in accordance with this Agreement 15 + +Source: ETON PHARMACEUTICALS, INC., 10-Q, 11/14/2019 + + + + + +CONFIDENTIAL 12.1.9 it will not make nor will it promise to make any payment in violation of the U. S. Foreign Corrupt Practices Act or similar applicable local, federal or national law. 12.2 Aucta Representation and Warranties. Aucta represents and warrants to ETON that: 12.2.1 it has the corporate power and authority to enter into this Agreement and to consummate the transactions contemplated hereby; 12.2.2 neither the execution and delivery of this Agreement by it, nor its performance hereunder, conflicts with or will result in any violation or breach of, or constitutes (with or without due notice or lapse of time or both) a default under any of the terms or conditions of any note, indenture, license, agreement or other instrument or obligation to which it is a Party or by which it or any of its properties or assets may be bound; or to its best knowledge, violates any Applicable Law; 12.2.3 this Agreement is a legal, valid and binding agreement of Aucta, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and other similar laws affecting creditors' rights generally from time to time in effect and to general principles of equity (including concepts of materiality, reasonableness, good faith and fair dealing), regardless of whether considered in a proceeding in equity or at law; 12.2.4 it has not been debarred, is not subject to debarment, and will not use, in any capacity in connection with the obligations to be performed under this Agreement, any person who has been debarred pursuant to Section 306 of the United States Food, Drug and Cosmetic Act; 12.2.5 there is no Claim, suit, investigation, action or proceeding pending or threatened against Aucta before any court, governmental agency, or arbitration panel which may in any way materially adversely affect the performance of its obligations hereunder or transaction contemplated by this Agreement; 12.2.6 it will not divest, sell, fail to maintain or otherwise dispose of any Dossier related to Products during the Term of this Agreement; 12.2.7 it has not and will not enter into any contract or any other transaction with any Third Party or Affiliate that conflicts with or derogates from its undertakings hereunder; 12.2.8 it has and will at all times during Term have requisite expertise, experience, personnel, equipment and skill to perform its obligations hereunder; 12.2.9 it has the unencumbered right to Products, Dossiers for the Products and Aucta Background Intellectual Property and the right, power and authority to grant a license to ETON hereunder; 16 + +Source: ETON PHARMACEUTICALS, INC., 10-Q, 11/14/2019 + + + + + +CONFIDENTIAL 12.2.10 it will not make nor will it promise to make any payment in violation of the U. S. Foreign Corrupt Practices Act or similar applicable local, federal or national law; 12.2.11 it has obtained and will maintain all required licenses, authorizations, and approvals required by federal, state, or local governmental authorities, including the FDA and any other applicable regulatory agency to manufacture, export and supply each Product for the Territory and in accordance with this Agreement; 12.2.12 all Product supplied to ETON by Aucta or its contract manufacturer shall: (i) meet the applicable Specifications at the time of shipment; (ii) meet regulatory requirements of any relevant regulatory authority in the Territory and Territory of Manufacture; (iii) be manufactured, packaged, tested, stored and shipped in accordance with applicable GMP, the Dossier, Applicable Law and this Agreement; (iv) not be adulterated or misbranded under the U. S. Food, Drug and Cosmetic Act or any other relevant laws and regulations as amended from time to time; and (v) be produced, packaged, tested and stored in facilities that have been approved by applicable regulatory authorities to the extent required by Applicable Laws; 12.2.13 Aucta has not been informed of any proceeding or similar action pending or threatened in writing seeking the revocation, suspension or amendment of any Dossiers for reasons related to safety or efficacy; 12.2.14 The FDA has not requested or demanded in writing that Aucta discontinue any Dossiers for reasons related to safety or efficacy; 12.2.15 Aucta has not been informed of any pending or threatened in writing product liability claims relating to any Product; and 12.2.16 Aucta has not been informed of any pending or threatened in writing Claims alleging infringement of a Third Party's intellectual property rights relating to any Dossiers or the use, manufacture, import, distribution, sale or offer for sale of any Product. 12.3 Survival of Representations and Warranties. Other than the representations of Sections 12.1.5, 12.2.13, 12.2.14, 12.2.15 and 12.2.16, which are made as of the date of execution of this Agreement, all representations and warranties of ETON and Aucta contained herein or made pursuant hereto shall be ongoing during the Term and for a period of twelve (12) months thereafter. In the event of any breach of the representations and warranties set forth herein, the applicable Party shall immediately notify the other Party of such breach. 13. INDEMNIFICATION 13.1 Aucta's Indemnification Obligations. Aucta shall indemnify, defend and hold ETON and its owners, officers, directors, Affiliates, and employees (collectively, "ETON Indemnified Parties") harmless from and against any and all Losses arising out of or resulting from any Third Party Claims made or suits brought against ETON Indemnified Parties which arise or result from (i) Aucta's material breach of any of its representations, warranties or covenants set forth in this Agreement, or any of its obligations hereunder; (ii) Aucta's manufacture, registration, handling, storage, use, transportation of any Product on or after the Effective Date, including, without limitation, any Claim for personal injury or death, to the extent such Third Party Claims arise from the period of time commencing on or after the Effective Date and to the extent such is not attributable to ETON's breach of this Agreement or any Applicable Laws; or (iii) Aucta's negligence or willful misconduct with regard to the Products to the extent such is not attributable to ETON's breach of this Agreement or any Applicable Laws. 17 + +Source: ETON PHARMACEUTICALS, INC., 10-Q, 11/14/2019 + + + + + +CONFIDENTIAL 13.2 ETON's Indemnification Obligations. ETON shall indemnify, defend and hold Aucta and its officers, directors, and employees (collectively, "Aucta Indemnified Parties") harmless from and against any and all Losses arising out of or resulting from any Third Party Claims made or suits brought against Aucta Indemnified Parties which arise or result from (i) ETON's material breach of any of its representations, warranties or covenants set forth in this Agreement, or any of its obligations hereunder; (ii) ETON's marketing, distribution, or sale of any Product on or after the Effective Date, including, without limitation, any Claim for personal injury or death, to the extent such Third Party Claims arise from the period time commencing on or after the Effective Date and to the extent such is not attributable to Aucta's breach of this Agreement or any Applicable Law; or (iii) ETON's negligence or willful misconduct with regard to the Products to the extent such is not attributable to Aucta's breach of this Agreement or any Applicable Laws. 13.3 Indemnification Procedure. 13.3.1 Notice of the matter which may give rise to such Claim shall be given in writing by the indemnitee (the "Indemnitee") to the Party against whom indemnification may be sought (the "Indemnitor") as soon as reasonably practicable after such Indemnitee becomes aware of such Claim; provided, however, that the failure to notify the Indemnitor shall not relieve it from any liability that it may have to the Indemnitee otherwise unless the Indemnitor demonstrates that the defense of the underlying Claim has been materially prejudiced by such failure to provide timely notice. Such notice shall request indemnification and describe the potential Losses and Claim giving rise to the request for indemnification, and provide, to the extent known and in reasonable detail, relevant details thereof. If the Indemnitor fails to give Indemnitee notice of its intention to defend any such Claim as provided in this Section 13.3.1. the Indemnitee involved shall have the right to assume the defense thereof with counsel of its choice, at the Indemnitor's expense, and defend, settle or otherwise dispose of such Claim with the consent of the Indemnitor, not to be unreasonably withheld or delayed. 13.3.2 In the event the Indemnitor elects to assume the defense of a Claim, the Indemnitee of the Claim in question and any successor thereto shall permit Indemnitor's counsel and independent auditors, to the extent relevant, reasonable access to its books and records and otherwise fully cooperate with the Indemnitor in connection with such Claim; provided, however, that (i) the Indemnitee shall have the right fully to participate in such defense at its own expense; (ii) the Indemnitor's counsel and independent auditors shall not disclose any Confidential Information of the Indemnitee to the Indemnitor without the Indemnitee's consent; (iii) access shall only be given to the books and records that are relevant to the Claim or Losses at issue. The defense by the Indemnitor of any such actions shall not be deemed a waiver by the Indemnitee of its right to assert a Claim with respect to the responsibility of the Indemnitor with respect to the Claim or Losses in question. The Indemnitor shall not have the right to settle or compromise any Claim against the Indemnitee (that the Indemnitor has defended pursuant to this Section 13.3.2) without the consent of the Indemnitee which shall not be unreasonably withheld or delayed. No Indemnitee shall pay or voluntarily permit the determination of any Losses which is subject to any such Claim while the Indemnitor is negotiating the settlement thereof or contesting the matter, except with the prior written consent of the Indemnitor, which consent shall not be unreasonably withheld or delayed. 18 + +Source: ETON PHARMACEUTICALS, INC., 10-Q, 11/14/2019 + + + + + +CONFIDENTIAL 13.3.3 This Section 13 shall survive termination or expiration of this Agreement. 14. LIMITATION OF LIABILITY 14.1 NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, NEITHER PARTY SHALL BE LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL, CONSEQUENTIAL OR EXEMPLARY DAMAGES, WHETHER FORESEEABLE OR NOT, THAT ARE IN ANY WAY RELATED TO THIS AGREEMENT. 15. MISCELLANEOUS 15.1 Governing Law; English Language. This Agreement shall be governed, interpreted and construed in accordance with the substantive laws of the Delaware, in the country of the United State of America, without regard to its conflict of laws principles. To the extent that it may otherwise by applicable, the Parties hereby expressly agree to unconditionally waive and exclude from the operation of this Agreement the United Nations Convention on Contracts for the International Sale of Goods, concluded at Vienna, on 11 April 1980, as amended and as may be amended further from time to time. This Agreement has been negotiated and drafted by the Parties in the English language. Any translation into any other language shall not be an official version thereof. In the event any translation of this Agreement is prepared for convenience or for any other purpose, the provisions of the English version shall prevail. 15.2 Force Majeure. Neither Party shall be liable for non-performance or delay in the fulfillment of its obligations when any such non- performance or delay shall be occasioned by any unforeseeable cause beyond the reasonable control of Aucta or ETON, as the case may be, including without limitation, acts of God, fire, flood, earthquakes, explosions, sabotage, strikes or labor disturbances, civil commotion, riots, military invasions, war, terrorism, failure of utilities, failure of carriers, or any acts, restraints, requisitions, tariffs, regulations, or directives issues by a Governmental Entity ("Force Majeure Events"). In the event either Party is prevented from discharging its obligations hereunder on account of a Force Majeure Event, such Party shall notify the other forthwith and shall nevertheless make every endeavor in good faith to discharge its said obligations even if in a partial or compromised manner. If either Party is unable to perform its obligations hereunder as a result of a Force Majeure Event for a period of thirty (30) days or greater, then the other Party shall have the right, following sixty (60) days' notice to the other Party to terminate the Agreement if the Force Majeure Event still exists following such sixty (60) day notice period. In the event Force Majeure Event impacts the manufacture or supply of Products, the annual minimums required under 6.3.2 shall be suspended for the period of the Force Majeure and the annual minimum adjusted to prorate the annual minimum to account for the period of Force Majeure suspension (e.g. one month Force Majeure reduces annual minimum by 1/12). 19 + +Source: ETON PHARMACEUTICALS, INC., 10-Q, 11/14/2019 + + + + + +CONFIDENTIAL 15.3 Notices. All notices and other communications required or permitted to be given or made pursuant to this Agreement shall be in writing signed by the sender and shall be deemed duly given (a) on the date delivered, if personally delivered, (b) on the date sent by telecopier with automatic confirmation by the transmitting machine showing the proper number of pages were transmitted without error, (c) on the Business Day after being sent by Federal Express or another recognized overnight mail service which utilizes a written form of receipt for next day or next Business Day delivery or (d) three (3) Business Days after mailing, if mailed by U.S. postage-prepaid certified or registered mail, return receipt requested, in each case addressed to the applicable Party at the address set forth below; provided that a Party may change its address for receiving notice by the proper giving of notice hereunder: If to ETON, to: ETON Pharmaceuticals, Inc. 21925 W. Field Pkwy, Suite 235 Deer Park, Illinois, USA Attention: CEO With a copy (which shall not constitute notice) to: ETON Pharmaceuticals, Inc. 21925 W. Field Pkwy, Suite 235 Deer Park, Illinois, USA Attention: Legal if to Aucta, to: Aucta Pharmaceuticals, Inc. 71 Suttons Lane Piscataway, NJ 08854 Attention: CEO 15.4 Relationship of Parties. The status of the Parties under this Agreement shall be that of independent contractors, without the authority to act on behalf of or bind each other. Nothing in this Agreement shall be construed as establishing a partnership or joint venture relationship between the Parties hereto. No Party shall have the right to enter into any agreements on behalf of the other Party, nor shall it represent to any person that it has such right or authority. All persons employed by a Party shall be employees of such Party and not of the other Party and all costs and obligations incurred by reason of any such employment shall be for the account and expense of such Party. 20 + +Source: ETON PHARMACEUTICALS, INC., 10-Q, 11/14/2019 + + + + + +CONFIDENTIAL 15.5 Entire Agreement; Amendment. This Agreement (and all Exhibits attached hereto) supersedes all prior discussions and agreements among the Parties with respect to the subject matter hereof and contains the sole and entire agreement among the Parties hereto with respect to the subject matter hereof. This Agreement may not be amended or modified except in writing executed by the duly authorized representatives of the Parties. 15.6 No Third-Party Beneficiaries. This Agreement is not intended to confer upon any Person other than the Parties hereto any rights or remedies hereunder. 15.7 Severability. Should any part or provision of this Agreement be held unenforceable or in conflict with Applicable Law, the invalid or unenforceable part or provision shall, provided that it does not affect the essence of this Agreement, be replaced with a revision which accomplishes, to the greatest extent possible, the original commercial purpose of such part or provision in a valid and enforceable manner, and the balance of this Agreement shall remain in full force and effect and binding upon the Parties hereto. 15.8 Assignment. The terms and provisions hereof shall inure to the benefit of, and be binding upon the Parties and their respective successors and permitted assigns. The Parties shall not assign, encumber or otherwise transfer this Agreement or any part of it to any Third Party, without the prior written consent of the other Party. Notwithstanding the foregoing, each Party may assign the rights and obligations under this Agreement in whole, without consent of the other Party, to a Third Party or Affiliate in connection with the transfer or sale of all or substantially all of its business or in the event of a merger, consolidation or change in control provided that the assignee assumes in writing and becomes directly obligated to the other Party to perform all of the obligations of assignor under this Agreement. 15.9 Waiver. No waiver of a breach or default hereunder shall be considered valid unless in writing and signed by the Party giving such waiver, and no such waiver shall be deemed a waiver of any subsequent breach or default of the same or similar nature. 15.10 Survival. Any provision which by its terms is intended to survive the termination or expiration of this Agreement will survive the termination or expiration of this Agreement and remain in full force and effect thereafter. 15.11 Counterparts; PDF. This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original but all of which, taken together, shall constitute one and the same instrument. PDF and facsimile signatures shall constitute original signatures. The Parties agree that the electronic signatures appearing on this Agreement are the same as handwritten signatures for the purposes of validity, enforceability and admissibility pursuant to the Electronic Signatures in Global and National Commerce (ESIGN) Act of 2000, and Uniform Electronic Transactions Act (UETA) model law, or similar applicable laws. [SIGNATURE PAGE FOLLOWS] 21 + +Source: ETON PHARMACEUTICALS, INC., 10-Q, 11/14/2019 + + + + + +CONFIDENTIAL IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first above written, to be effective upon the Effective Date. ETON PHARMACEUTICALS, INC. By: Name: Title: AUCTA PHARMACEUTICALS, INC. By: Name: Title: + +Source: ETON PHARMACEUTICALS, INC., 10-Q, 11/14/2019 + + + + + +Source: ETON PHARMACEUTICALS, INC., 10-Q, 11/14/2019 \ No newline at end of file diff --git a/full_contract_txt/EuromediaHoldingsCorp_20070215_10SB12G_EX-10.B(01)_525118_EX-10.B(01)_Content License Agreement.txt b/full_contract_txt/EuromediaHoldingsCorp_20070215_10SB12G_EX-10.B(01)_525118_EX-10.B(01)_Content License Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..e7c681d64e4b8ec795e1344763d61213b96ed21a --- /dev/null +++ b/full_contract_txt/EuromediaHoldingsCorp_20070215_10SB12G_EX-10.B(01)_525118_EX-10.B(01)_Content License Agreement.txt @@ -0,0 +1,113 @@ +Exhibit 10.B.01 EXECUTION COPY + +VIDEO-ON-DEMAND CONTENT LICENSE AGREEMENT between Rogers Cable Communications Inc. ("Rogers") and EuroMedia Holdings Corp. ("Licensor") offering EurocinemaSM Video-on-Demand service made as of July 11 , 2006 (the "Effective Date") (the "Agreement") + + 1. RIGHTS GRANTED Licensor grants to Rogers the non-exclusive license and right to distribute and exhibit in Canada (the "Territory") all entertainment programming to which Licensor owns or controls the VOD distribution and exhibition rights in the Territory (collectively, "Licensed Programs") to residential subscribers of Rogers' digital cable television service on a Video-on-Demand ("VOD") basis. For clarity, the VOD service that Rogers provides to such subscribers shall hereinafter be referred to as the "ROD Service". 2. LICENSED PROGRAMS. (a) Subject to Section 3, Licensor shall forthwith provide to Rogers a comprehensive list (including title, length of program, license period and availability date) of all currently available Licensed Programs. During the Term, Licensor shall use best efforts to add newly available Licensed Programs to such list, and may periodically delete Licensed Programs from such list; provided, however, that: (i) Licensor shall provide to Rogers at least ninety (90) days prior notice of the availability date of any Licensed Program added to such list during the Term; (ii) Licensor shall provide to Rogers at least sixty (60) days prior notice of the deletion of any Licensed Program from such list; and (iii) Licensor shall be responsible for any and all reasonable costs and/or losses incurred by Rogers as a result of any deletions from such list during the Term. (b) Rogers reserves the right, in its sole discretion, to determine which Licensed Programs to distribute and exhibit on the ROD Service and, without limiting the generality of the foregoing, may decline to distribute or exhibit any Licensed Program that it determines, in its sole discretion, is unsuitable for distribution or exhibition on the ROD Service. (c) Licensor shall use commercial reasonable efforts to provide Rogers with Licensed Programs with closed captioning. 3. AVAILABILITY DATE. (a) Subject to Section 3(b), the availability date for any Licensed Program that is a feature-length motion picture or direct-to-video product shall be no later than ninety (90) days following the date on which such Licensed Program is made available for home video distribution within the U.S or the Territory. + +Source: EUROMEDIA HOLDINGS CORP, 10SB12G, 2/15/2007 + + + + + + (b) In the event that Licensor grants to another VOD or Pay-Per-View ("PPV") service provider in the U.S. or the Territory the right to distribute or exhibit any Licensed Program on an earlier availability date, then Licensor shall also grant to Rogers the right to distribute and exhibit such Licensed Program on such earlier availability date, on the terms provided herein. (c) Licensor shall not authorize the distribution or exhibition of any Licensed Program by any other means, including, without limitation, television (other than PPV) and internet, for a period of ninety (90) consecutive days following such Licensed Program's VOD availability date. 4. LICENSE PERIOD. During the Term, Rogers shall have the non-exclusive right to distribute and exhibit each Licensed Program on a VOD basis for a period of ninety (90) consecutive days, or such longer period as may be agreed to by Rogers and Licensor (the "License Period"). 5. VIEWING PERIOD. The viewing period for each Licensed Program shall be at least twenty-four (24) consecutive hours, or such longer period as may be agreed to by Rogers and Licensor from time to time (the "Viewing Period"). Multiple viewings of the Licensed Program shall be permitted during the Viewing Period for no additional fee and all such viewings shall be considered a single exhibition of the Licensed Program for the purposes of calculating License Fees hereunder. 6. LICENSE FEES. (a) Rogers shall pay to Licensor a fee (the "License Fee"), which shall be equal to fifty (50)% of Retail Revenues. For the purposes of this Agreement, "Retail Revenues" means the retail revenues actually received by Rogers for each authorized exhibition of a Licensed Program on the ROD Service, less GST and applicable sales tax. For greater certainty, Retail Revenues shall not include any fees payable to Rogers for: (i) the purchase, rental or installation of a digital terminal; (ii) any basic or premium television services; or (iii) digital cable access. (b) Notwithstanding Section 6(a) above, (i) Prior to calculating License Fees, Rogers shall be entitled to deduct from Retail Revenues on a rolling monthly basis during the Term ("Rogers Costs"): (A) the value of programming credits, rebates or other retail price discounts provided to ROD Service subscribers in conjunction with a public marketing or promotional initiative; -2- + +Source: EUROMEDIA HOLDINGS CORP, 10SB12G, 2/15/2007 + + + + + + (B) the value of refunds provided by Rogers to ROD Service subscribers for technical or other errors during such month; (C) the percentage equal to Rogers' average year-to-end bad debt exposure (including credit collection costs) for the then current calendar year in respect of all Rogers' cable television subscribers (expressed as a percentage) (D) encoding costs incurred by Rogers, if applicable, pursuant to Section 8 (a) ; and (E) closed captioning costs incurred by Rogers to comply with Applicable Law. (ii) Rogers shall be entitled to deduct from License Fees on a rolling monthly basis during the Term: (A) the marketing allowance pursuant to Section 12; (B) the Production Fund Commitment pursuant to Section 13; and (C) copyright royalty payments pursuant to Section 17. (c) Payment of License Fees shall be made in Canadian funds in arrears within thirty (30) days following each calendar month during the Term in which Licensed Programs were exhibited hereunder and shall be accompanied by a statement of account showing the calculation of the License Fees. (d) In the event that Retail Revenues in a particular month are not sufficient to fully reimburse Rogers for the Rogers Costs incurred in such month, Rogers shall be entitled to recover such amounts against Retail Revenues generated by other Licensed Programs in subsequent months. (e) There shall be no minimum License Fee or retail viewing fee with respect to any Licensed Program. Additionally, Rogers shall not be required to pay any License Fees for VOD exhibitions of any Licensed Program occurring on or off premises that are made for the purposes of quality assurance or testing. (f) Rogers shall be entitled to withhold from License Fees applicable withholding taxes and to remit same to the responsible taxing authorities, as required by Applicable Law. 7. TERM. The term of this Agreement (the "Initial Term") shall commence as of the Effective Date and, unless earlier terminated in accordance with this Agreement, shall terminate on June 30, 2010. At Rogers' option, this Agreement shall renew for a subsequent term of two (2) years on the terms and conditions herein (the "Renewal Term"). Notwithstanding the foregoing, if, at the expiry of this Agreement following the Initial Term or the Renewal Term (if any), as applicable, Licensor and Rogers have not executed a new agreement governing the VOD distribution and exhibition of Licensed Programs and Rogers (or its permitted assigns) continues to distribute and exhibit Licensed Programs on the ROD Service following such expiry, such continued distribution and exhibition shall be governed by the terms of this Agreement in effect at the time of expiry, except that each of Licensor and Rogers shall have the right, on sixty (60) days' prior written notice, to terminate this Agreement, as so extended. For greater certainty, all references to "Term" in this Agreement shall include the Initial Term, the Renewal Term (if any) and any period during which this Agreement continues following its expiry in accordance with this Section. -3- + +Source: EUROMEDIA HOLDINGS CORP, 10SB12G, 2/15/2007 + + + + + + 8. ENCODING AND DELIVERY OF LICENSED PROGRAMS. (a) Licensor shall, at its sole expense, encode each Licensed Program selected for distribution and exhibition by Rogers hereunder and shall deliver such fully encoded Licensed Program to Rogers on a DLT master tape, DVD-R disc or other master pre-recorded format acceptable to Rogers (each, a "Master") at least thirty (30) days prior to the availability date for such Licensed Program. Such Masters shall at all times remain the sole property of Licensor and, within fifteen (15) days following the termination or expiration of this Agreement, Rogers shall either return to Licensor all such Masters then in its possession, or issue a certificate of erasure. (b) To the extent any Master delivered by Licensor hereunder is determined by Rogers, in its sole discretion, acting reasonably, to be defective: (i) Licensor shall forthwith provide Rogers with a replacement Master; and (ii) if Rogers is unable to distribute and/or exhibit the Licensed Program on the availability date as a result of the defectiveness of any such Master, the License Fee payable in respect of such Licensed Program shall be reduced by 10% for the balance of the License Period. 9. TECHNICAL STANDARDS. In carrying out its obligations hereunder, Licensor agrees to comply with Rogers' technical standards for materials, as specified by Rogers from time to time. Licensor hereby acknowledges receipt of a copy of or website link to CableLabs technical specifications. 10. MARKETING AND PROMOTION. (a) Licensor shall provide, at its sole expense and on a timely basis, promotional materials and trailers for each Licensed Program selected for distribution and exhibition by Rogers hereunder, for use by Rogers to advertise and promote the availability of such Licensed Program on the ROD Service. Such promotional materials shall include, but not be limited to: (i) a promotional poster image or related film content in an electronic format; (ii) relevant metadata; (iii) trailer of Licensed Program in an encoded format; and (iv) title and related data. -4- + +Source: EUROMEDIA HOLDINGS CORP, 10SB12G, 2/15/2007 + + + + + + (b) Licensor shall make available to Rogers, on a free trial basis and at no cost to Rogers, not less than ten (10) Licensed Programs at all times during the Term (each, a "Promotional Program") for distribution and exhibition on the ROD Service to promote the Licensed Programs and the ROD Service. Licensor shall refresh the Promotional Programs at a frequency rate to be mutually agreed upon in writing by Rogers and Licensor. (c) Licensor acknowledges and agrees that Rogers shall be entitled to insert a minimum of four (4) minutes of promotional materials per thirty (30) minutes of Promotional Programs. Rogers shall ensure that at least 75% of such promotional materials directly or indirectly promotes the Licensed Programs. (d) Licensor shall use commercially reasonable efforts to promote the ROD Service through Licensor's consumer-facing advertising and promotional mediums within the Territory. Such mediums shall include, but not be limited to: (i) television; (ii) radio; (iii) print; (iv) Internet; and (v) event-based marketing. Licensor will deliver accurate, representative samples of all such advertising and promotions to Rogers at least five (5) business days in advance for Rogers' prior review and approval. 11. GUI/EPG. Licensor, at its sole expense and on a timely basis, shall provide complete, accurate and informative listing and descriptive information in respect of each Licensed Program selected for distribution and exhibition by Rogers hereunder (including, without limitation, synopsis, theme, rating, closed captioning and such other information as may be appropriate or otherwise required by Rogers) to Rogers' graphic user interface ("GUI") or electronic programming guide provider ("EPG"), as the case may be, as designated by Rogers from time to time. 12. MARKETING ALLOWANCE. In consideration for various services and activities that Rogers performs for the benefit of Licensor during the Term, Licensor agrees to pay to Rogers an amount which shall be equal to ten (10)% of License Fees, calculated on a rolling basis during the Term and payable monthly. 13. PRODUCTION FUND. For so long as Rogers is required by Applicable Law to contribute a percentage of its gross annual revenues from the ROD Service to an independently-administered Canadian program production fund, Licensor shall reimburse Rogers for 50% of the amount required to be remitted to such production fund by Rogers in respect of the exhibition of Licensed Programs (the "Production Fund Commitment"). The Production Fund Commitment shall be calculated monthly during the Term and shall be deducted as set out in Section 6 (b). -5- + +Source: EUROMEDIA HOLDINGS CORP, 10SB12G, 2/15/2007 + + + + + + 14. REPRESENTATIONS AND WARRANTIES. (a) Each of Rogers and Licensor represents and warrants to the other that it has the necessary power and authority to enter into this Agreement and to fully perform its obligations hereunder. (b) Licensor represents, warrants and covenants to Rogers that: (i) it is validly incorporated under the laws of The State of Florida, USA (ii) it has obtained, and shall maintain throughout the Term, all necessary rights, clearances and authorizations to enter into this Agreement and fully perform its obligations hereunder in compliance with Applicable Law and, in particular, to permit Rogers to distribute and exhibit the Licensed Programs on a VOD basis in the Territory; (iii) it has obtained, and shall maintain throughout the Term, all approvals and/or ratings from provincial authorities necessary to distribute and exhibit each Licensed Program, trailer and other promotional materials provided to Rogers hereunder; (iv) it unilaterally owns or controls the VOD distribution and exhibition rights to all Licensed Programs within the Territory; and (v) it has obtained, and shall maintain throughout the Term, all necessary rights to any equipment and/or technology used to provide the encoding services hereunder and its use of such services shall not violate the rights of any third party. 15. INDEMNIFICATION. (a) Licensor shall indemnify Rogers and its affiliates from and against any and all claims, damages, liabilities, costs and expenses (including, without limitation, reasonable legal fees) arising out of or caused by: (i) any breach by Licensor of any material term of this Agreement; (ii) the content of any Licensed Program, trailer and/or other promotional materials provided by Licensor to Rogers hereunder (including, without limitation, any libelous, slanderous or obscene material, violations of copyright, trade- mark rights or other intellectual property rights, personality right, right of privacy or literary or dramatic right); and (iii) any encoding or other services provided by Licensor hereunder. -6- + +Source: EUROMEDIA HOLDINGS CORP, 10SB12G, 2/15/2007 + + + + + + (b) Rogers shall indemnify Licensor and its affiliates from and against any and all claims, damages, liabilities, costs and expenses (including, without limitation, reasonable legal fees) arising out of or caused by: (i) any breach by Rogers of any material term of this Agreement; and (ii) any claim by a Rogers customer, except a claim related to the content of any Licensed Program, trailer and/or other promotional materials provided by Licensor to Rogers hereunder. (c) This Section shall survive the termination or expiration of this Agreement. 16. LIMITATION OF LIABILITY. Except with respect to any claim or liability arising from an infringement of any third party intellectual property right, in no event shall either party be liable for any special, indirect, consequential, punitive or incidental damages of any kind. This Section shall survive the termination or expiration of this Agreement. 17. COPYRIGHT ROYALTY PAYMENTS. For so long as Rogers is required by Applicable Law to pay copyright royalties relating to Licensed Programs hereunder, Licensor shall reimburse Rogers for 50% of any such royalties actually paid by Rogers, calculated on a rolling basis during the Term and payable monthly. This Section shall survive the termination or expiration of this Agreement. 18. ROGERS' TERMINATION RIGHTS. Notwithstanding any other provision of this Agreement, Rogers may terminate this Agreement, at any time, upon sixty (60) days' prior written notice to Licensor. 19. MUTUAL TERMINATION RIGHTS. Either Rogers or Licensor may, at its option and without prejudice to any other remedies available to it, immediately terminate this Agreement by giving written notice thereof to the other party for any one or more of the following causes: (a) the other party defaults in the performance or observance of any of the material terms of this Agreement and such default continues for a period of thirty (30) days after written notice thereof; (b) if, at any time, an order is made or an effective resolution is passed for the winding-up, liquidation or dissolution of the other party that is not immediately stayed by appeal; (c) if, at any time, the other party consents to or makes a general assignment for the benefit of creditors, or makes a proposal under, or takes advantage of, any insolvency, restructuring or reorganization legislation, or is declared bankrupt, or if a liquidator, trustee in bankruptcy, custodian or receiver and manager or other officer with similar powers is appointed of the other party or of all or substantially all of the other party's property which is not immediately stayed by appeal; or -7- + +Source: EUROMEDIA HOLDINGS CORP, 10SB12G, 2/15/2007 + + + + + + (d) Rogers, or any person to whom Rogers has assigned, sold or transferred this Agreement, ceases to offer the ROD Service. 20. EFFECT OF TERMINATION. If either party terminates this Agreement prior to its expiration, Rogers shall be entitled to continue to distribute and exhibit all Licensed Programs then being distributed and exhibited on the ROD Service, in each case, for a period of sixty (60) days from the effective date of termination or the expiry of the relevant License Period, whichever is earlier, and, in such event, Rogers shall continue to be bound by its payment obligations set forth herein in respect of such Licensed Programs. This Section shall survive the termination of this Agreement for a period of sixty (60) days. 21. MOST FAVOURED NATIONS. If Licensor enters, or has entered, into an agreement or series of agreements (including side letters, understandings or arrangements, whether oral or written, whether formal or informal, whether now or hereafter effective, or whether on a long-term basis or short-term basis) with a third party for the distribution and exhibition of Licensed Programs in the U.S. or the Territory on a VOD basis, or any other basis that permits the downloading of such Licensed Programs and the subsequent viewing of such Licensed Programs by a residential subscriber, on terms (including, without limitation, license fees, copyright royalty payments, encoding fees and obligations, and marketing support) that are more favourable than those contained in this Agreement, then Rogers has the right to incorporate, or substitute, as the case may be, such term or terms into this Agreement, effective as of the date on which such term or terms were accorded to the third party and for the balance of the period such term or terms are applicable to such third party. Licensor shall provide to Rogers, no later than February 28 in each year, a sworn statement of a senior officer of Licensor, or a certificate of the auditors of Licensor, confirming that, during the immediately preceding calendar year, Licensor did not enter into such an agreement or series of agreements or, if it did enter into such agreement(s), confirming the effective date thereof and identifying the terms contained therein that are more favourable than those contained in this Agreement. During the Term, and for a period of twelve (12) months thereafter, Rogers (and its representatives) shall have the right, upon reasonable prior written notice to Licensor, and during regular business hours, to inspect and/or audit Licensor's books and records to confirm compliance with Licensor's obligations under this Section. This Section shall survive the expiry or other termination of this Agreement for a period of twelve (12) months. -8- + +Source: EUROMEDIA HOLDINGS CORP, 10SB12G, 2/15/2007 + + + + + + 22. CONFIDENTIALITY AND OWNERSHIP. (a) Rogers and Licensor each agree to maintain the provisions of this Agreement in the strictest confidence, except that the parties may disclose such terms to their affiliates, their respective professional advisors and, in such event, to the extent necessary to: (i) enforce their respective rights hereunder; (ii) comply with the valid order of an administrative agency or court of competent jurisdiction, or with any Applicable Law; and (iii) comply with contractual obligations owed to third parties; provided, however, that, in the case of any disclosure pursuant to items (ii) or (iii) above, (A) the disclosing party shall notify the other party as soon as practicable (and if possible prior to disclosure) and (B) any information so disclosed shall be redacted to the greatest extent possible. (b) Each party agrees to use the other party's confidential information solely for the purpose of fulfilling its obligations under this Agreement, to hold the other party's confidential information in confidence and to protect the confidentiality of such confidential information using the same degree of care as it uses to protect its own confidential information of a like nature, which shall, in any event, be no less than a degree of care consistent with industry standards. Notwithstanding the foregoing, the receiving party may disclose confidential information to the extent required to comply with the valid order of an administrative agency or court of competent jurisdiction, or with any Applicable Law (provided that the receiving party shall notify the other party as soon as practicable (and if possible prior to disclosure) and any information so disclosed shall be redacted to the greatest extent possible). (c) Rogers shall own all data and information relating to Rogers' subscribers, including, without limitation, all personal and demographic information, all information relating to an individual subscriber's use of the ROD Service and all aggregate information relating to the use by Rogers' subscribers of the ROD Service (collectively, "Rogers Subscriber Information"). Licensor acknowledges that Rogers Subscriber Information constitutes valuable assets of Rogers and agrees to hold all Rogers Subscriber Information strictly confidential in accordance with the provisions set forth in Section 22(b) above. (d) This Section shall survive the termination or expiration of this Agreement. 23. GOVERNING LAW. This Agreement shall be governed by laws of the Province of Ontario and the federal laws of Canada applicable therein. The parties hereby attorn to the non-exclusive jurisdiction of the courts of the Province of Ontario. This Section shall survive the termination or expiration of this Agreement. 24. ASSIGNMENT. This Agreement may not be assigned, sold or transferred without the prior written consent of the other party. Notwithstanding the foregoing, Rogers may, without consent, assign its rights and obligations under this Agreement in whole or in part to: (i) a person that directly or indirectly controls, is controlled by or is under common control with Rogers; or (ii) a purchaser of all or substantially all of the assets used in connection with the ROD Service. A change of control of Rogers shall not be considered an assignment of this Agreement. Any purported assignment, sale, or transfer in contravention of this Section shall be null and void. -9- + +Source: EUROMEDIA HOLDINGS CORP, 10SB12G, 2/15/2007 + + + + + + 25. FORCE MAJEURE. Neither party shall be liable to the other for temporary failure to perform hereunder, if such failure is caused by reason of an Act of God, tempest, satellite circuit failure, labour dispute, strike, temporary or permanent breakdown of facilities, fire, flood, Applicable Law, civil disturbance, or any other cause beyond the parties' respective control. In the event of any force majeure which continues for a period of thirty (30) days or more, the party not immediately affected by such force majeure event may, upon notice to the other party, terminate this Agreement. 26. NOTICES. Any notice, request, demand, consent or other communication (collectively a "Notice") provided or permitted hereunder shall be in writing and given by personal delivery (against receipt), or sent by registered mail (against receipt) postage prepaid, or transmitted by facsimile (provided that a hard copy is immediately sent by registered mail), addressed to the other party for which it is intended at its address below: To Rogers: Rogers Cable Communications Inc. 333 Bloor Street East Toronto, Ontario M4W 1G9 Attention: Vice-President, General Manager, Television FAX: (416) 935-4600 with a copy to: Rogers Communications Inc. 333 Bloor Street East Toronto, Ontario M4W 1G9 Attention: Vice-President, General Counsel FAX: (416) 935-3548 To Licensor: Sebastien Perioche Eurocinema 1395 Brickell Ave., Suite 800, Miami, FL 33131, 305-529-6220 FAX: 305-529-6201 + +-10- + +Source: EUROMEDIA HOLDINGS CORP, 10SB12G, 2/15/2007 + + + + + + Any Notice given pursuant to this Agreement shall make specific reference to this Agreement. Any Notice so given shall be deemed to have been received on the date on which it was delivered in person, or transmitted, if delivered or transmitted on a day, other than a Saturday, on which the Toronto-Dominion Bank in Toronto is open for business (a "Business Day") during normal business hours of the recipient and, if not so delivered or transmitted, on the next Business Day or, if sent by registered mail, on the fifth (5t h) Business Day thereafter; provided, however, that either party may change its address and/or facsimile number for purposes of receipt of any such communication by giving ten (10) days prior written notice of such change to the other party in the manner prescribed above. 27. APPLICABLE LAW. This Agreement is subject to all laws, regulations, license conditions and decisions of the Canadian Radio-television and Telecommunications Commission ("CRTC") municipal, provincial and federal governments or other authorities which are applicable to Rogers and/or Licensor, and which are now in force or hereafter adopted ("Applicable Law"). In the event that any such law, regulation or decision comes into force during the Term concerning the subject matter of this Agreement, such that it prevents or diminishes either party's ability to perform under this Agreement, the parties agree to enter into good faith negotiations to amend this Agreement, where required, in order to remedy such diminution of or inability to perform. 28. SET-OFF. Rogers shall be entitled to set off any sums owing to Licensor against any sums owing by Licensor to Rogers hereunder. 29. LEGAL EFFECT. (a) Nothing herein contained shall be deemed to create and the parties do not intend to create any relationships of partner, agent or joint venture as between Rogers and Licensor. (b) Subject to Section 29(d) below, this Agreement constitutes a binding agreement with respect to the matters set out herein and supersedes all prior agreements, negotiations, representations and proposals, whether written or oral. There are no conditions, covenants, representations or warranties, express or implied, statutory or otherwise relating to the subject matter hereof except as herein expressly provided. -11- + +Source: EUROMEDIA HOLDINGS CORP, 10SB12G, 2/15/2007 + + + + + + (c) No amendment, waiver or modification of any provision of this Agreement shall be binding on a party unless consented to in writing by such party. No waiver of any provision of this Agreement shall constitute a waiver of any other provision, nor shall any waiver constitute a continuing waiver unless otherwise expressly provided in writing. (d) This Agreement shall not become a valid and binding contract unless and until each party has duly executed two (2) copies of this Agreement and one fully executed copy of the Agreement has been delivered to, or received by, each party. For greater certainty, there shall be no agreement between the parties with respect to the subject matter of this Agreement, whether written or oral, express, implied or otherwise, until the parties have complied with the execution and delivery requirements set forth in this Section 29(d), notwithstanding any performance between the parties concerning the subject matter of this document. To indicate your agreement to the foregoing, please sign and date the Agreement and return it by fax, with an original by courier, to Rogers Cable Communications Inc., 333 Bloor Street East, Toronto, Ontario, M4W 1G9, Attention: Vice-President, Strategy & Development. ROGERS CABLE COMMUNICATIONS INC. + + Per: + +Name: Edward Rogers Title: President and CEO + +Per: + +Name: David Purdy Title: Vice-President, General Manager, Television ACCEPTED and AGREED TO this ______ day of ____________, 2006. Per: + +Name: Sebastien Perioche Title: Chairman/CEO + + + +-12- + + + +Source: EUROMEDIA HOLDINGS CORP, 10SB12G, 2/15/2007 \ No newline at end of file diff --git a/full_contract_txt/ExactSciencesCorp_20180822_8-K_EX-10.1_11331629_EX-10.1_Promotion Agreement.txt b/full_contract_txt/ExactSciencesCorp_20180822_8-K_EX-10.1_11331629_EX-10.1_Promotion Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..db47155ba0011ed4727d0e0a2f6491823b925ae0 --- /dev/null +++ b/full_contract_txt/ExactSciencesCorp_20180822_8-K_EX-10.1_11331629_EX-10.1_Promotion Agreement.txt @@ -0,0 +1,481 @@ +Exhibit 10.1 COLOGUARD® PROMOTION AGREEMENT BY AND BETWEEN EXACT SCIENCES CORPORATION AND PFIZER INC. August 21, 2018 + +Source: EXACT SCIENCES CORP, 8-K, 8/22/2018 + + + + + +TABLE OF CONTENTS Page 1. DEFINITIONS 1 2. GOVERNANCE 10 2.1 Joint Steering Committee 10 2.2 Joint Operations Committee 13 2.3 Joint Review Committee 14 2.4 Finance Representative 15 2.5 Alliance Managers 15 2.6 Compliance Managers 16 3. APPOINTMENT; PRODUCT OWNERSHIP; MARKETING AND SALES 17 3.1 Appointment 17 3.2 Responsibility for Product 19 3.3 Annual Marketing Plan 26 3.4 Sales Promotion, Detailing Efforts and IDN Promotion 27 3.5 Pfizer Investment and Support 28 3.6 Exact Investment and Support 29 3.7 Changes in Shared M&P Expenses 30 4. ACCOUNTING 30 4.1 Responsibility for Shared M&P Expenses 30 4.2 Promotion Fee 31 4.3 Fee Statements and Payments 33 4.4 Taxes and Withholding 34 4.5 No Partnership Provision 35 4.6 Payments; Currency 35 4.7 Maintenance of Records; Audits 35 5. REPRESENTATIONS, WARRANTIES AND COVENANTS 37 5.1 Mutual Representations and Warranties 37 5.2 Representations and Warranties of Exact 38 5.3 Covenants 39 5.4 Compliance with Law and Ethical Business Practices 40 5.5 Notice of Investigations 43 5.6 Representation by Legal Counsel 43 5.7 No Inconsistent Agreements 43 5.8 Disclaimer 44 6. INDEMNIFICATION; LIMITATION OF LIABILITY AND INSURANCE 44 6.1 Indemnification 44 6.2 Insurance Requirements 45 6.3 Limitation of Liability 46 + +Source: EXACT SCIENCES CORP, 8-K, 8/22/2018 + + + + + +7. CONFIDENTIALITY; PUBLICITY 46 7.1 Confidentiality 46 7.2 Authorized Disclosure and Use 47 7.3 Certain Regulatory Filings 47 7.4 Public Announcements 47 7.5 Use of Names 48 8. TERM AND TERMINATION 48 8.1 Term 48 8.2 Renewal 48 8.3 Termination for Cause 48 8.4 Termination Without Cause 49 8.5 Mutual Termination 49 8.6 Termination for Change of Control 49 8.7 Royalty Upon Expiration 49 8.8 Consequences of Termination 50 8.9 Survival of Certain Obligations 50 9. MISCELLANEOUS 51 9.1 Interpretation 51 9.2 Assignment 51 9.3 Further Actions 51 9.4 Force Majeure 51 9.5 Notices 52 9.6 Amendment 53 9.7 Waiver 53 9.8 Severability 53 9.9 Descriptive Headings 53 9.10 Governing Law 53 9.11 Dispute Resolution 53 9.12 Entire Agreement of the Parties 54 9.13 Independent Contractors 54 9.14 No Legal Advice 54 9.15 Counterparts 54 EXHIBITS Exhibit 1.24 - Cost of Sales Exhibit 1.39 - Exact Trademarks Exhibit 2.2(c)(iv) - Calendar Quarter Performance Metrics Exhibit 3.2(c)(i) - Sales Deployment Plan Exhibit 3.3(b) - Annual Marketing Plan Outline Exhibit 3.4(a) - Promotion Fee Reduction Exhibit 7.4 - Press Release + +Source: EXACT SCIENCES CORP, 8-K, 8/22/2018 + + + + + +Exhibit 8.8(b) - Tail Period Advertising Services ii + +Source: EXACT SCIENCES CORP, 8-K, 8/22/2018 + + + + + +AGREEMENT This Agreement (the "Agreement") is made and entered into as of August 21, 2018 (the "Effective Date"), by and between Pfizer Inc. ("Pfizer"), a Delaware corporation, with a principal place of business at 235 East 42nd Street, New York, New York 10017 and Exact Sciences Corporation ("Exact"), a Delaware corporation with a principal place of business at 441 Charmany Drive, Madison, Wisconsin 53719. Pfizer and Exact may each be referred to herein individually as a "Party" and collectively as the "Parties". WHEREAS, Exact has marketing and proprietary rights to the Product (as defined below) in the United States; WHEREAS, Pfizer has sales, marketing, analytical, and other core capabilities and competencies to promote and market branded prescription products; and WHEREAS, Exact desires to work with Pfizer to leverage Pfizer's expertise in sales, marketing, analytical, and other core capabilities and competencies for the Product in the United States and Pfizer desires to provide such expertise, including through its Sales Representatives, and to invest in Exact's Promotion of the Product in the United States. NOW THEREFORE, in consideration of the mutual promises and covenants set forth below and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereby agree as follows: 1. DEFINITIONS. 1.1 "AdvaMed Code" shall have the meaning set forth in Section 3.2(c)(ii). 1.2 "Advertising" shall mean the paid advertising, planning, purchasing and placement of advertising for a prescription medical device subject to pre-market approval in the Territory through any means, including television, print, radio/audio, in-office/placed- based, digital, web, search (SEM/SEO), social media, mobile and any and all new and emerging media channels for consumers, healthcare institutions and healthcare providers. 1.3 "Affiliate(s)" shall mean, with respect to any Party, any other Person which controls, is controlled by or is under common control with such Party. A Person shall be regarded as in control of another Person if it owns or controls at least fifty percent (50%) of the equity securities of such other Person entitled to vote in the election of directors (or, in the case of an entity that is not a corporation, for the election of the corresponding managing authority); provided, however, that the term "Affiliate" shall not include subsidiaries or other entities in which a Party or its Affiliates owns a majority of the ordinary voting power necessary to elect a majority of the board of directors or other governing board, but is restricted from electing such majority by contract or otherwise, until such time as such restrictions are no longer in effect. 1.4 "Agreement" shall have the meaning set forth in the preamble. 1 + +Source: EXACT SCIENCES CORP, 8-K, 8/22/2018 + + + + + +1.5 "Alliance Manager" shall have the meaning set forth in Section 2.5. 1.6 "Annual Marketing Plan" shall mean the plan for the Marketing and Promotion of the Product in the Territory for each full or partial Calendar Year as described in Section 3.3, as prepared and updated from time to time pursuant to Section 3.3. 1.7 "Annual Supplemental Promotion Fee" shall have the meaning set forth in Section 4.2(c)(i). 1.8 "Applicable Compliance/Review Policies" shall mean, with respect to Pfizer, its written Code of Ethics and Professional Conduct and, with respect to Exact, its written Code of Business Conduct and Ethics, and such policies and standard operating procedures that are adhered to by such Party in connection with the Product and any payments or services contemplated by this Agreement, as the same may be amended from time to time. 1.9 "Applicable Law" shall mean any law, statute, rule, regulation, order, judgment, ordinance, administrative code, decree, directive, injunction or permit (including Regulatory Approvals) of any court, arbitral body, agency, department, authority or other instrumentality of any national, state, county, city or other political subdivision applicable to a Party's activities to be performed under this Agreement. For the avoidance of doubt, any specific references to any Applicable Law or any portion thereof, shall be deemed to include all amendments, replacements or successors thereto. 1.10 "Audited Party" shall have the meaning set forth in Section 4.7(b)(i). 1.11 "Auditing Party" shall have the meaning set forth in Section 4.7(b)(i). 1.12 "Baseline Laboratory Service Revenue" shall mean, with respect to a particular Calendar Year during the Term, the amounts set forth in Section 4.2(b). 1.13 "Baseline M&P Expense" shall have the meaning set forth in Section 3.6. 1.14 "Business Day" shall mean any day other than a Saturday, Sunday, or a bank or other public holiday in New York, New York, United States. 1.15 "Calendar Quarter" shall mean the respective periods of three (3) consecutive calendar months ending on March 31, June 30, September 30 or December 31. 1.16 "Calendar Year" shall mean the respective periods of twelve (12) calendar months, each such period ending on December 31 of the applicable year for as long as this Agreement is in effect. 1.17 "Calendar Year Baseline Laboratory Service Revenue" shall have the meaning set forth in Section 4.2(b). 1.18 "Change of Control" shall mean, with respect to a Party: (a) the sale of all or substantially all of such Party's assets or business relating to the subject matter of this Agreement; (b) a merger, reorganization, or consolidation involving such Party in which the holders of voting securities of such Party outstanding immediately 2 + +Source: EXACT SCIENCES CORP, 8-K, 8/22/2018 + + + + + +prior thereto cease to hold at least fifty percent (50%) of the combined voting power of the surviving entity or acquiring entity (or its parent) immediately after such merger, reorganization, or consolidation; or (c) the acquisition of more than fifty percent (50%) of the voting equity securities of such Party as a result of a single transaction or a series of related transactions. 1.19 "CIA" shall have the meaning set forth in Section 5.4(j). 1.20 "Claims" shall have the meaning set forth in Section 6.1(a). 1.21 "Compliance Manager" shall have the meaning set forth in Section 2.6. 1.22 "Confidential Information" shall have the meaning set forth in Section 7.1. 1.23 "Co-Promote Field" shall mean those physicians and practices customarily considered primary care or gastroenterology providers and practices and, subject to Sections 3.1(c)(ii) and 4.2(d), the OB/Gyn Field, in the Territory. For clarity, if Exact, either through its own Sales Representative or by agreement with a Third Party, launches the Product in the OB/Gyn Field, the Co-Promote Field shall not include the OB/Gyn Field. 1.24 "Cost of Sales" shall mean the direct and indirect costs attributable to sales of the Product Laboratory Services, as calculated in accordance with Exhibit 1.24, and as consistently determined in accordance with GAAP. 1.25 "Debarred/Excluded" shall have the meaning set forth in Section 5.1(g). 1.26 "Detail" shall mean a customary face-to-face or non-face-to-face contact of a Sales Representative of a Party with an Eligible Prescriber during which such Sales Representative makes a presentation of certain of the Product's attributes, such as describing the FDA-approved indicated uses, safety, effectiveness, or other relevant characteristics of the Product, in a fair and balanced manner and in accordance with the requirements of this Agreement and Applicable Law and in a manner that is customary for the purpose of Promoting a prescription medical device subject to pre-market approval, but excluding: (a) any activities performed by any Representative other than a Sales Representative who is not conducting a face-to-face or non-face- to-face sales call, (b) presentations made at conventions or (c) mere delivery of savings cards, coupons or similar items without discussions with an Eligible Prescriber about the Product; provided that, such measurement shall be on the same basis as the recording Party's measurement for its Sales Representatives' detailing of its other medical devices subject to pre-market approval or prescription pharmaceutical products (as applicable), consistently applied throughout the Term. For clarity, non- face-to-face contact shall mean e-detailing, video detailing or other presentation of Promotional Material by a Sales Representative to an Eligible Prescriber via audio, video, internet, using webex or other similar live conference applications, and in all instances that allows for real time, detailed and substantive communication between the Sales Representative and the Eligible Prescriber regarding the Product and would be considered a Detail by Pfizer for its own products under its own guidelines, but shall exclude any such communications, such as telephone calls, during which such detailed and visual 3 + +Source: EXACT SCIENCES CORP, 8-K, 8/22/2018 + + + + + +exchanges of information do not occur. "Detail," when used as a verb, and "Detailing" shall have correlative meanings. 1.27 "Disclosing Party" shall have the meaning set forth in Section 7.1. 1.28 "Disputed JOC Matter" shall have the meaning set forth in Section 2.2(d). 1.29 "Disputed JRC Matter" shall have the meaning set forth in Section 2.3(d). 1.30 "Disputed JSC Matter" shall have the meaning set forth in Section 2.1(e). 1.31 "Effective Date" shall have the meaning set forth in the preamble. 1.32 "Eligible Prescriber" shall mean (a) a health care provider who has the authority to prescribe the Product under Applicable Law and (b) any other health care professional without prescribing authority but who (i) is reasonably believed to assist with patient care and reimbursement for healthcare service in the office of a health care provider who has authority to prescribe the Product under Applicable Law, and (ii) is allowed to receive Promotion. 1.33 "Exact" shall have the meaning set forth in the preamble. 1.34 "Exact Copyrights" shall mean all statutory and common law copyrights owned by Exact in and to the Promotional Materials, Advertising materials or Product Label used in the Territory. 1.35 "Exact House Marks" shall mean the Exact trade name and logo, including all registrations and applications for registration of any of the foregoing in the Territory. 1.36 "Exact Indemnitee" shall have the meaning set forth in Section 6.1(b). 1.37 "Exact JSC Members" shall have the meaning set forth in Section 2.1(a). 1.38 "Exact Patent Rights" shall mean the Patent Rights owned or controlled by Exact as of the Effective Date. 1.39 "Exact Sponsorships and Related Activities" shall have the meaning set forth in Section 3.2(d)(i). 1.40 "Exact Trademarks" shall mean (a) the Trademarks listed on Exhibit 1.39 and the registrations thereof, (b) any pending or future trademark registration applications owned or controlled and used in connection with or intended for use in connection with the Product in the Territory, (c) any unregistered trademark rights used in connection with the Product as may exist through use in the Territory, (d) any current or future modifications or variants of any of the foregoing rights, and (e) any future Trademarks adopted by Exact or its Affiliates for use in connection with the Product in the Territory. 1.41 "Excluded Channel" shall have the meaning set forth in Section 4.2(d). 1.42 "Ex-US Commercial Rights" shall have the meaning set forth in Section 3.1(c)(i). 4 + +Source: EXACT SCIENCES CORP, 8-K, 8/22/2018 + + + + + +1.43 "Ex-US Commercial Rights Transfer Notice" shall have the meaning set forth in Section 3.1(c)(i). 1.44 "FDA" shall mean the United States Food and Drug Administration or any successor agency thereto. 1.45 "FD&C Act" shall mean the United States Federal Food, Drug, and Cosmetic Act, as amended, and the rules and regulations promulgated thereunder. 1.46 "Finance Representative" shall have the meaning set forth in Section 2.4. 1.47 "First Promotion Fee Period" shall have the meaning set forth in Section 4.2(c)(i). 1.48 "First Supplemental Promotion Fee" shall have the meaning set forth in Section 4.2(c)(i). 1.49 "GAAP" shall mean United States generally accepted accounting principles, consistently applied. 1.50 "Governmental Authority" to be broadly interpreted and includes: (a) any national, federal, state, local, regional, or foreign government, or level, branch, or subdivision thereof; (b) any multinational or public international organization or authority; (c) any ministry, department, bureau, division, authority, agency, commission, or body entitled to exercise any administrative, executive, judicial, legislative, police, regulatory, or taxing authority or power; (d) any court, tribunal, or governmental arbitrator or arbitral body; (e) any government-owned or controlled institution or entity; (f) any enterprise or instrumentality performing a governmental function; and (g) any political party. 1.51 "Government Official" to be broadly interpreted, shall mean (a) any elected or appointed government official (e.g., a member of a ministry of health); (b) any employee or person acting for or on behalf of a government, government-controlled entity or enterprise performing a governmental function; (c) any political party, candidate for public office, officer, employee, or person acting for or on behalf of a political party or candidate for public office; (d) any employee or person acting for or on behalf of a public international organization (e.g., the United Nations); or (e) any individual who holds himself or herself out to be the authorized intermediary of any of the foregoing. For clarity, healthcare providers employed by government-owned hospitals shall be considered Government Officials. 1.52 "Gross Margin" shall mean Laboratory Services Revenue less Cost of Sales. 1.53 "Gross Margin Percent" shall mean the percentage as determined by multiplying (a) the fractional value of Gross Margin divided by Laboratory Service Revenue by (b) one hundred percent (100%). 1.54 "IDN" shall mean an integrated healthcare delivery network. 1.55 "Incentive Compensation" shall mean the compensation paid by or under the 5 + +Source: EXACT SCIENCES CORP, 8-K, 8/22/2018 + + + + + +authority of Pfizer or any of its Affiliates to a Sales Representative involved in the Promotion of the Product under this Agreement based directly or indirectly on the sales of the products (including the Product) being Promoted by such Sales Representative in the Territory, including any target bonus, award or other incentive, but excluding (i) base salary and (ii) single product ad hoc awards or other similar individual product incentives, such as "special incentive plans" that, in the aggregate, do not exceed $2,000 per Calendar Year. 1.56 "Included Revenue Percentage" shall have the meaning set forth in Section 4.2(d). 1.57 "Incremental Laboratory Service Revenue" shall have the meaning set forth in Section 4.2(a). 1.58 "Indemnified Party" shall have the meaning set forth in Section 6.1(c)(i). 1.59 "Indemnifying Party" shall have the meaning set forth in Section 6.1(c)(i). 1.60 "JOC" shall have the meaning set forth in Section 2.2(a) 1.61 "JOC Co-Chair" shall have the meaning set forth in Section 2.2(a). 1.62 "JRC" shall have the meaning set forth in Section 2.3(a). 1.63 "JSC" shall have the meaning set forth in Section 2.1(a). 1.64 "JSC Co-Chair" shall have the meaning set forth in Section 2.1(b). 1.65 "JSC Members" shall have the meaning set forth in Section 2.1(a). 1.66 "KAM Team" shall have the meaning set forth in Section 3.4(c). 1.67 "Laboratory Service Revenue" shall mean, with respect to a particular Calendar Quarter, as applicable, Exact's revenue earned from performing the Product Laboratory Service in the Territory with regard to patient samples collected in the Territory, subject to Section 4.2(d), as calculated by Exact in accordance with GAAP consistently applied, less the following deductions: (i) trade, quantity or cash discounts, credits, adjustments or allowances, including without limitation those granted in connection with managed care network agreements and those granted on account of price adjustments, billing errors, rejected goods, damaged goods or incomplete tests or other services; (ii) rebates and chargebacks allowed, given or accrued (including, but not limited to, cash, governmental and managed care rebates, hospital or other buying group chargebacks, and governmental taxes in the nature of a rebate based on usage levels or sales of the Product Laboratory Service); and (iii) patient compliance incentives that are treated as a reduction in revenue in accordance with GAAP, including without limitation gift cards to patients. 1.68 "Launch Date" shall mean October 1, 2018. 1.69 "Marketing" shall mean, with respect to a medical device subject to pre-market 6 + +Source: EXACT SCIENCES CORP, 8-K, 8/22/2018 + + + + + +approval, Advertising, public relations, medical education activities, market research, creation, development, and distribution of Advertising and Promotional materials, field literature, direct or indirect educational campaigns, and exhibits at seminars and conventions. When used as a verb, "Market" means to engage in Marketing. 1.70 "OB/Gyn Commercial Rights" shall have the meaning set forth in Section 3.1(c)(ii). 1.71 "OB/Gyn Commercial Rights Transfer Notice" shall have the meaning set forth in Section 3.1(c)(ii). 1.72 "OB/Gyn Field" shall mean those healthcare professionals and practices customarily considered OB/Gyn providers and practices. 1.73 "Occurrence" shall have the meaning set forth in Section 2.6(c). 1.74 "Party" or "Parties" shall have the meaning set forth in the preamble. 1.75 "Patent Rights" shall mean any and all (a) issued patents, (b) pending patent applications, including all provisional applications, substitutions, continuations, continuations-in-part, divisionals, and renewals, and all patents granted thereon, (c) patents of addition, reissues, reexaminations and extensions or restorations by existing or future extension or restorations mechanisms, including patent term adjustments, patent term extensions, supplementary protection certificates or the equivalent thereof, (d) inventor's certificates, (e) other forms of government issued rights substantially similar to the foregoing and (f) United States and foreign counterparts of any of the foregoing. 1.76 "Payer" shall mean a Third Party entity that pays a portion or all of the cost of the Product Laboratory Service performed with respect to a given patient using the Product. For clarity, a patient who pays for the cost of his or her own Product Laboratory Service, in whole or in part, shall not be included in this definition of "Payer" and a "Payer" may include government entities or agencies, managed care organizations, and health or prescription insurance providers. 1.77 "Person" shall mean an individual, sole proprietorship, partnership, limited partnership, limited liability partnership, corporation, limited liability company, business trust, joint stock company, trust, incorporated association, joint venture or similar entity or organization, including a government or political subdivision or department or agency of a government. 1.78 "Pfizer" shall have the meaning set forth in the preamble. 1.79 "Pfizer Indemnitee" shall have the meaning set forth in Section 6.1(a). 1.80 "Pfizer JSC Members" shall have the meaning set forth in Section 2.1(a). 1.81 "Pfizer Trainers" shall have the meaning set forth in Section 3.2(e)(i). 1.82 "PhRMA Code" shall have the meaning set forth in Section 3.2(c)(ii). 7 + +Source: EXACT SCIENCES CORP, 8-K, 8/22/2018 + + + + + +1.83 "Pre-Launch Meeting" shall have the meaning set forth in Section 3.2(e)(v). 1.84 "Product" shall mean the medical device subject to pre-market approval currently commercialized under the brand name "COLOGUARD" and indicated for the qualitative detection of colorectal neoplasia associated DNA markers and for the presence of occult hemoglobin in human stool. 1.85 "Product Label" shall mean the labels and labeling documents approved on August 11, 2014 by the FDA under the Premarket Approval P130017, , and any supplements, extensions or changes thereto. 1.86 "Product Laboratory Service" shall mean the colorectal cancer screening test performed on a specimen provided by a patient using the Product, including specimen collection, laboratory testing, data handling and analysis, interpretation of results, patient compliance (including call center activity) and billing to be provided by Exact or its Affiliates according to the "Laboratory Instruction for Use" in the Product Label, wherein the Laboratory Instructions for Use are further subject to any changes as required by any pre-market approval supplements approved by the FDA. 1.87 "Product Training" shall mean, with respect to the Product, the Product-specific training program conducted in accordance with the applicable Annual Marketing Plan and Applicable Laws, which may include training concerning (a) the scientific basis for the Product, (b) permissible communications regarding safety and efficacy claims relating to the Product, (c) permissible communications related to the Product in accordance with the Product Label, (d) use of Promotional Materials by the Sales Representatives, and (e) other appropriate topics relevant to the Promotion of the Product as determined by Exact in consultation with Pfizer. 1.88 "Promotion" shall mean (a) those activities customarily undertaken by a Party's field sales representatives in the Territory to encourage the approved use of a particular prescription medical device (or prescription pharmaceutical medicine as applicable) subject to pre-market approval (or other regulatory approval, as applicable), including detailing, and (b) any other activities customarily undertaken by a Party aimed at encouraging the approved use of a particular prescription medical device subject to pre-market authorization approval, including without limitation, healthcare professional peer-to-peer communication, communications of product benefits to IDNs, the creation and use of promotional materials, Marketing, meetings and events (including without limitation speaker bureau events), trade shows, advocacy activities, including with respect to guideline organizations, and sponsorships. The terms "Promote", "Promoting" and "Promotional" shall have corresponding meanings. 1.89 "Promotion Fee" shall have the meaning set forth in Section 4.2(a). 1.90 "Promotional Materials" shall mean, with respect to the Product, all written, printed, graphic, electronic, audio, video or other materials (such as a journal reprint) other than the Product Label, provided by Exact, with respect to currently 8 + +Source: EXACT SCIENCES CORP, 8-K, 8/22/2018 + + + + + +developed materials, or developed by the Parties, in each case, for use by a Party's Sales Representatives during Details or other Representatives in the Territory. 1.91 "QSR" shall mean the Quality System Regulation, 21 C.F.R. Part 820, as may be amended from time to time and any successor thereto. 1.92 "Receiving Party" shall have the meaning set forth in Section 7.1. 1.93 "Regulatory Approval" shall mean, with respect to a prescription medical device subject to pre-market authorization approval in any jurisdiction in the Territory for a given indication, all technical, medical and scientific licenses, registrations, authorizations and approvals of pre-market approval application, supplements and amendments, and pre- and post- approvals of the FDA, sufficient for the manufacture, distribution, use and sale of such prescription medical device, including any services associated with such medical device, in such jurisdiction in the Territory for such indication in accordance with Applicable Law, excluding any pricing and reimbursement approvals. 1.94 "Renewal Term" shall have the meaning set forth in Section 8.2. 1.95 "Representatives" shall mean, with respect to a Party, such Party's employees, agents or independent contractors, and such Party's Affiliates and their respective employees, agents or independent contractors, including Sales Representatives, in each case who are performing services under the Annual Marketing Plan. 1.96 "Sales Deployment Plan" shall have the meaning set forth in Section 3.2(c)(i). 1.97 "Sales Representative" shall mean an internal or field sales representative employed by a Party full-time who details products or services for human use in the Territory. For clarity, Sales Representative excludes sales managers such as district business managers and above. 1.98 "Senior Officers" shall mean, with respect to Exact, the Chief Executive Officer of Exact and, with respect to Pfizer, Regional President, North America, Internal Medicine, Pfizer Innovative Health. 1.99 "Shared M&P Expense" shall mean the incremental investment in Promotion expense above the Baseline M&P Expenses agreed to by the Parties, as set forth in Sections 3.5 and 3.6. 1.100 "Tail Period" shall have the meaning set forth in Section 8.7. 1.101 "Term" shall have the meaning set forth in Section 8.1. 1.102 "Territory" shall mean the fifty (50) states of the United States and the District of Columbia and includes Puerto Rico. 1.103 "Third Party" shall mean any Person other than Exact, Pfizer or their respective Affiliates. 1.104 "Trademark" shall mean any registered word, name, symbol, color, designation or 9 + +Source: EXACT SCIENCES CORP, 8-K, 8/22/2018 + + + + + +device or any combination thereof, including any trademark, trade dress, brand mark, service mark, trade name, brand name, logo or business symbol. 1.105 "Training Materials" shall mean, with respect to the Product, the materials (which may include written or other recorded, videotaped or web-based training materials or online training programs) to be used in Product Training for a Party's Sales Representatives regarding the Product. 1.106 "VAT" shall have the meaning set forth in Section 4.4. 1.107 "Violating Party" shall have the meaning set forth in Section 8.3(d). 2. GOVERNANCE. 2.1 Joint Steering Committee. (a) Composition. Promptly following the Effective Date, the Parties will establish a Joint Steering Committee ("JSC"), comprised of three (3) Representatives of Exact and three (3) Representatives of Pfizer. The JSC Representatives for each of Exact and Pfizer will be referred to herein as the "Exact JSC Members" and the "Pfizer JSC Members", respectively, and the Exact JSC Members and the Pfizer JSC Members will be referred to herein as the "JSC Members". Each Party may replace any of its JSC Members at any time upon notice to the other Party and the Parties may increase or decrease the number of its JSC Members on the JSC; provided that at all times an equal number of JSC Members from each Party are appointed to the JSC. (b) Committee Chair. The JSC will be co-chaired by a Pfizer JSC Member and an Exact JSC Member (each, a "JSC Co-Chair"). Each Party may replace its JSC Co-Chair at any time upon notice to the other Party. The role of secretary of the JSC shall rotate each meeting between the JSC Co-Chairs (or any JSC Member who is appointed, by mutual agreement of both JSC Co-Chairs, as secretary of the JSC). The secretary of the JSC shall: (i) notify each Party at least fifteen (15) days (or as much notice as is reasonably possible) in advance of each JSC meeting; (ii) collect and organize agenda items from each Party for each JSC meeting; (iii) prepare and circulate to JSC Members each JSC meeting agenda no later than five (5) Business Days (or as far in advance as is reasonably possible) prior to the scheduled date for each JSC meeting; and (iv) prepare the written minutes of each JSC meeting and, within fifteen (15) days after such meeting, circulate such minutes for review and approval by the Parties. 10 + +Source: EXACT SCIENCES CORP, 8-K, 8/22/2018 + + + + + +(c) Meetings. The JSC will meet no less than once each Calendar Quarter (or less frequently upon mutual agreement of the Parties) either in-person or by audio or video teleconference. Meetings of the JSC will occur at such times and places in the Territory as mutually agreed to by the Parties; provided, however, that no more than half of the meetings will be required to be held in-person in any Calendar Year. Meetings of the JSC will only occur if at least one JSC Member of each Party is present at the meeting or participating by teleconference or videoconference. Each Party will be solely responsible for, and will not be entitled to any reimbursement from the other Party with respect to, any and all personnel costs or expenses (including travel expenses) incurred by or on behalf of its Representatives in connection with participation in any JSC meetings or sub-committee or working group meetings, or any other travel required to be undertaken by either Party's personnel in connection with the performance of the Agreement. The Parties will endeavor to schedule meetings of the JSC at least fifteen (15) days in advance. The Parties shall approve the minutes of each meeting promptly, but in no event later than the next meeting of the JSC. (d) JSC Responsibilities. The JSC shall: (i) review, discuss, and approve each Annual Marketing Plan for a Calendar Year, including the quarterly baseline budget amounts contained therein, no later than the applicable date set forth in Section 3.3(a); (ii) oversee the implementation of each Annual Marketing Plan; (iii) review, discuss, and approve any modifications to the Annual Marketing Plan submitted by the JOC; (iv) oversee the JOC and JRC and each committee's activities; (v) act as the first level escalation to resolve disputes between the Parties, any resolution of dispute brought before the JSC shall be by the unanimous consent of both JSC Co-Chairs; (vi) form and oversee any sub-committee or working group in furtherance of activities contemplated in the Annual Marketing Plan; (vii) form and oversee any sub-committee or working group as determined by the JSC to be necessary to review and discuss specific matters related to the subject matter of this Agreement, but not enumerated as a specific responsibility of the JSC, JOC, JRC, or any other properly formed and constituted sub-committee; (viii) review, discuss and approve the allocation of Baseline M&P Expenses and Shared M&P Expenses submitted by the JOC; 11 + +Source: EXACT SCIENCES CORP, 8-K, 8/22/2018 + + + + + +(ix) review all reports, including sales performance data and other key performance indicators, submitted by the JOC; and (x) escalate any Disputed JSC Matter, as defined in Section 2.1(e), to the Alliance Managers and Senior Officers. (e) Decision Making. Regardless of the number of Pfizer JSC Members or Exact JSC Members, decisions by the JSC will be made by unanimous agreement. The JSC will use good faith efforts to reach agreement on any and all matters properly brought before it. If, despite such good faith efforts, the JSC is unable to reach a decision on a particular matter within the JSC's responsibilities (each such matter, a "Disputed JSC Matter"), within five (5) Business Days after the JSC first meets to consider such matter, or such later date as may be mutually agreed by the Parties in writing, then either Party may refer such Disputed JSC Matter for resolution to the Alliance Managers. Within three (3) Business Days after such Disputed JSC Matter is referred to the Alliance Managers, the Alliance Managers shall determine whether the Disputed JSC Matter requires the involvement of the Senior Officers. Should the Alliance Managers refer the Disputed JSC Matter to the Senior Officers, then the Senior Officers will promptly initiate good faith discussions to resolve such Disputed JSC Matter. If the Senior Officers are unable to resolve such Disputed JSC Matter within five (5) Business Days of it being referred to them, then, Exact, after having considered, in good faith, the advice and input from Pfizer, will have final decision-making authority with respect to such Disputed JSC Matter where the subject matter of the Disputed JSC Matter substantially relates to (i) Product pricing, including any rebates or discounts; (ii) manufacturing; (iii) research and development, including any trials; and (iv) engagement with Governmental Authorities; provided, however, that Exact will not have final decision making authority to require Pfizer to conduct any activities that Pfizer, in good faith, believes violate Applicable Law or Pfizer's Applicable Compliance/Review Policies. For all Disputed JSC Matters that are not resolved by the Senior Officers and are not subject to Exact's final decision-making authority, neither Party will take any action on such Disputed JSC Matter until resolution can be reached in accordance with this Section 2.1(e), and, except in the case of a potential violation of Applicable Law, pending such resolution the Parties shall continue to carry out activities under this Agreement in accordance with the then-current Annual Marketing Plan. (f) Limits on JSC Authority. Notwithstanding any provision of this Section 2.1 to the contrary, (i) each Party will retain the rights, powers and discretion granted to it under this Agreement consistent with Section 3.2(a), and no such rights, powers, or discretion will be delegated to or vested in the JSC unless such delegation or vesting of rights is expressly provided for in this Agreement or the Parties expressly so agree in writing, (ii) the JSC will not have the power to amend this Agreement or terminate or otherwise modify or waive compliance with this Agreement in any manner and (iii) neither Party will require the other Party to (A) breach any obligation or agreement that 12 + +Source: EXACT SCIENCES CORP, 8-K, 8/22/2018 + + + + + +such other Party may have with or to a Third Party or (B) perform any activities that are materially different, greater in scope or more costly than those provided for in the Annual Marketing Plan then in effect. 2.2 Joint Operations Committee. (a) Composition. Promptly following the Effective Date, the Parties will establish a Joint Operations Committee ("JOC"), comprised of marketing, sales, medical, finance, and such other Representatives of each Party as necessary. The JOC shall be co-chaired by each Party's marketing Representative on the JOC, as designated by the JSC Co-Chair of each Party (each, a "JOC Co-Chair"). Each JOC Co-Chair shall (i) have knowledge and expertise in the commercialization of prescription products and services in the Territory, (ii) have sufficient seniority within the applicable Party to make decisions arising within the scope of the JOC's responsibilities, and (iii) be authorized under such Party's internal governance procedures to make decisions or carry out the activities given to such Party under this Agreement. (b) Meetings. The JOC shall meet once each month (or more or less frequently upon mutual agreement of the Parties) either in- person or by audio or video teleconference. Meetings of the JOC will occur at such times and places in the Territory as mutually agreed to by the Parties. Each Party will be solely responsible for, and will not be entitled to any reimbursement from the other Party with respect to, any and all personnel costs or expenses (including travel expenses) which are incurred by or on behalf of its Representatives in connection with participation in any JOC meetings or sub-committee or working group meetings, or any other travel required to be undertaken by either Party's personnel in connection with the performance of the Agreement. (c) JOC Responsibilities. The JOC shall: (i) prepare the Annual Marketing Plan for review and approval by JSC; (ii) prepare and review Product Marketing strategies and tactics; (iii) prepare allocation of Baseline M&P Expenses and Shared M&P Expense for JSC review and approval; (iv) prepare reports, including sales performance data and other key performance indicators for JSC review in accordance with Exhibit 2.2(c)(iv); (v) execute and monitor the strategies and tactics in the Annual Marketing Plan; 13 + +Source: EXACT SCIENCES CORP, 8-K, 8/22/2018 + + + + + +(vi) monitor Product supply and Product Laboratory Service capacity to ensure they are sufficient to meet the demand forecast in the Annual Marketing Plan; (vii) establish key supply, capacity, inventory, and such other metrics to inform the JSC; (viii) prepare any revision to the Annual Marketing Plan as directed by the JSC or otherwise proposed pursuant to Section 3.3(a); (ix) provide consent to materials for reconsideration by the JSC pursuant to Section 2.3(d); and (x) with respect to the Annual Marketing Plan, ensure that a consultation with the Compliance Managers is completed and appropriate compliance measures are incorporated into the Annual Marketing Plan. (d) Decision Making. Decisions by the JOC will be made by unanimous agreement. If a unanimous decision cannot be reached, then any disputed matter within the JOC's responsibilities (the "Disputed JOC Matter") may be escalated by either Party to the JSC for resolution in accordance with Section 2.1(e). Unless and until resolved by the JSC in accordance with Section 2.1(e), neither Party shall take any action with respect to such Disputed JOC Matter and, except in the case of a potential violation of Applicable Law, pending such resolution the Parties shall continue to carry out the activities under this Agreement in accordance with the then-current Annual Marketing Plan. 2.3 Joint Review Committee. (a) Composition. Promptly following the Effective Date (and in any event, within thirty (30) days of the Effective Date), under the supervision of the JSC, the Parties will establish a Joint Review Committee ("JRC"), comprised of marketing, medical, legal, and regulatory Representatives of the Parties. Each Party may appoint one medical, legal and regulatory Representative member to the JRC. The marketing Representatives from the Parties shall coordinate administration and operation of the JRC meetings, including setting agendas, recording decisions regarding materials reviewed, and coordinating review to ensure timely review and approval of Promotional Materials. The Representatives from the Parties on the JRC shall coordinate operational support including scheduling of JRC meetings, timely distribution of materials for review, recording and archiving of approved materials, and other such activities to ensure operational efficiency of JRC meetings. It is the expectation of the Parties that the JRC will utilize Exact's review and approval system to review and approve materials, including Promotional Materials that are subject to JRC review under Section 2.3(c). 14 + +Source: EXACT SCIENCES CORP, 8-K, 8/22/2018 + + + + + +(b) Meetings. The JRC shall meet no less than once each month (or more frequently upon mutual agreement of the members of the JRC) either in-person or by audio or video teleconference. Meetings of the JRC will occur at such times and places in the Territory as mutually agreed to by the Parties. Each Party will be solely responsible for, and will not be entitled to any reimbursement from the other Party with respect to, any and all personnel costs or expenses (including travel expenses) which are incurred by or on behalf of its Representatives in connection with participation in any JRC meetings, or any other travel required to be undertaken by either Party's personnel in connection with the performance of the Agreement. (c) JRC Responsibilities. The JRC shall be responsible for review and approval of all Product or related disease education materials, Promotional Materials and other communication to a Third Party, including pharmaco-economic data, that may be used in Promotion, medical to medical communication, patient education, press release or any other form of external communication intended for healthcare professionals, healthcare organized customers (such as IDNs and hospitals), and Payer organizations, patients or others who are reasonably likely to influence the prescription, use, reimbursement, or purchase of the Product. The JRC shall also ensure that all such materials are in compliance with Applicable Law and each Party's Applicable Compliance/Review Policies. Any conflict between the Parties' Applicable Compliance/Review Policies will be discussed by the JRC and the Compliance Managers to determine an appropriate resolution of such conflict. (d) Decision Making. Decisions by the JRC will be made by unanimous agreement. If a unanimous decision cannot be reached, then the disputed matter (the "Disputed JRC Matter") can be escalated by either Party to the JSC for resolution in accordance with Section 2.1(e). Unless and until resolved by the JSC in accordance with Section 2.1(e), neither Party shall take any action with respect to such Disputed JRC Matter and, except in the case of a legal or ethical issue, the Parties shall continue to carry out the activities under this Agreement in accordance with the then-current Annual Marketing Plan. A Disputed JRC Matter that is substantially similar in subject matter of a prior Disputed JRC Matter shall not be resubmitted for JSC review and resolution under this Section 2.3(d). 2.4 Finance Representative. Each Party shall appoint a finance contact to oversee all financial reporting and communications under this Agreement during the Term (each, a "Finance Representative"). Each Party may change its designated Finance Representative at any time upon written notice to the other Party. Each Finance Representative will coordinate the efforts of its respective Party in conducting finance activities, including all financial reporting and financial communications between the Parties, under this Agreement during the Term. 2.5 Alliance Managers. Each Party shall appoint an employee of such Party who shall oversee interactions between the Parties for all matters related to this Agreement, the 15 + +Source: EXACT SCIENCES CORP, 8-K, 8/22/2018 + + + + + +Annual Marketing Plan and any related agreements between the Parties or their Affiliates (each an "Alliance Manager"). The Alliance Managers shall endeavor to ensure clear and responsive communication between the Parties and the effective exchange of information, and shall serve as a single point of contact for any matters arising under this Agreement. The Alliance Managers shall have the right to attend all JSC and subcommittee meetings as non-voting participants and may bring to the attention of the JSC or subcommittee any matters or issues either of them reasonably believes should be discussed, and shall have such other responsibilities as the Parties may mutually agree in writing. Each Party may designate different Alliance Managers by notice in writing to the other Party. 2.6 Compliance Managers. Within thirty (30) days after the Effective Date, Pfizer and Exact each agrees to appoint a Representative who (a) has received compliance training by such Party and (b) is routinely responsible for advising such Party on compliance matters to act as its Compliance Manager (each, a "Compliance Manager"). The Compliance Managers shall support the JSC. (a) Responsibilities. Compliance Managers shall resolve discrepancies between the Parties' respective Applicable Compliance/Review Policies, ensure that each Party has a process to monitor the activities under this Agreement for compliance with Applicable Laws and Applicable Compliance/Review Polices, serve as a key point of contact between the Parties for compliance-related matters, and review the Annual Marketing Plan for compliance with Applicable Compliance/Review Policies and shall promptly notify the JSC of any compliance issues in such Annual Marketing Plan. The JOC shall promptly notify the Compliance Managers of any material revisions to the Annual Marketing Plan. Each Compliance Manager shall facilitate the resolution of any compliance issue with the Compliance Manager of the other Party. (b) Notification. Subject to the terms of this Agreement, the Compliance Manager of a Party shall promptly notify the other Party's Compliance Manager in the event that it becomes aware of a potential violation by the other Party of: (i) the other Party's policies or procedures; (ii) any criminal, civil, or administrative laws or regulations applicable to any federal health care program or for which penalties or exclusions may be authorized; or (iii) the requirements under the FD&C Act, or relevant FDA guidance documents related to the Products, payments, or services under this Agreement. (c) Investigations. If a Party finds, following an investigation, credible evidence of a significant violation of any applicable policies and procedures that are designed to ensure compliance with: (i) any criminal, civil, or administrative laws or regulations applicable to any federal health care program or for which penalties or exclusions may be authorized; or (ii) the requirements under the FD&C Act, or relevant FDA guidance documents related to the Products, payments, or services under this Agreement (an "Occurrence"), the Party's Compliance Manager shall promptly inform the other Party of the Occurrence and steps taken by the Party to remediate the Occurrence, except 16 + +Source: EXACT SCIENCES CORP, 8-K, 8/22/2018 + + + + + +to the extent that the disclosing Party's counsel reasonably believes that such disclosure to the other Party could violate Applicable Law (including privacy laws) or have a significant adverse impact on the disclosing Party's legal position or defense (including the loss of attorney-client privilege) with respect to any such Occurrence. In the event that either Party determines that disclosure of relevant factual information regarding an Occurrence could violate Applicable Laws (including privacy laws) or have a significant adverse impact on its legal position or defense (including the loss of attorney-client privilege), the determining Party shall promptly notify the other Party in writing that the determining Party is exercising its right not to disclose relevant factual information regarding an Occurrence. (d) Each Party shall follow its Applicable Compliance/Review Policies subject to specific exceptions explicitly determined by the Compliance Managers. 3. APPOINTMENT; PRODUCT OWNERSHIP; MARKETING AND SALES. 3.1 Appointment. (a) Exclusive Arrangement. Commencing on the Launch Date, Exact and its Affiliates hereby grant to Pfizer and its Affiliates, on an exclusive basis for the Co-Promote Field (except as to Exact and its Affiliates), and Pfizer accepts, the right and obligation to Promote and Detail the Product in the Territory during the Term jointly with Exact, in accordance with the terms and conditions of this Agreement, all Applicable Laws and the applicable Annual Marketing Plan. Except as set forth in this Agreement, such right shall be non-transferable and non-sublicensable. In implementing its obligations under this Agreement, Pfizer, without charge or expense to Exact (other than as expressly set forth in Sections 3.6 and 4.2(c) of this Agreement), shall provide facilities, personnel (including management and Sales Representatives) and other resources as Pfizer, in its reasonable discretion but not inconsistent with the express terms of this Agreement, believes necessary. The Parties specifically agree that Exact shall not use the Pfizer name, logo or any Trademarks of Pfizer on any materials, including Promotional Materials, without the express written consent of Pfizer. Notwithstanding this Section 3.1 to the contrary, Exact retains the right to Promote the Product on its own behalf in the Co-Promote Field and, subject to Section 3.1(c), Pfizer shall not Promote or Detail the Product outside the Territory or outside the Co- Promote Field. (b) Grant of License to Pfizer. Subject to the terms of this Agreement, Exact on behalf of itself and its Affiliates, hereby grants to Pfizer a non-exclusive, royalty free license, with the right to sublicense to one or more of its Affiliates, under the Exact House Marks, the Exact Trademarks and the Exact Copyrights, during the Term, to the extent necessary or appropriate to allow Pfizer and its Affiliates to carry out activities under this Agreement including to Promote and Detail the Product in the Co-Promote Field in the Territory. Such license shall be non-transferable and non-sublicensable 17 + +Source: EXACT SCIENCES CORP, 8-K, 8/22/2018 + + + + + +(except as provided in this Agreement) and shall automatically terminate upon the expiration or earlier termination of this Agreement. (c) Right of First Negotiation. (i) During the Term, if Exact (i) enters a formal process authorized or directed by its board of directors or CEO to seek and enter into an arrangement or (ii) intends to agree to a term sheet or seeks to sign a letter of intent or similar arrangement to grant an exclusive commercial license to a Third Party solely to promote or sell the Product outside the Territory ("Ex-US Commercial Rights"), Exact shall first notify Pfizer of such intent (a "Ex-US Commercial Rights Transfer Notice") and Pfizer shall have thirty (30) days thereafter to notify Exact of its desire to obtain the Ex-US Commercial Rights that are the subject of the Ex-US Commercial Rights Transfer Notice. Promptly upon receipt of notice from Pfizer, Exact and Pfizer shall engage in exclusive good faith negotiations to enter into a definitive written agreement for the Ex-US Commercial Rights. If Pfizer and Exact are unable to reach agreement on the terms of such Product rights within forty-five (45) days of the commencement of negotiations, Exact shall be free to enter into negotiations and consummate an agreement with any Third Party regarding such Ex-US Commercial Rights; provided that the economic terms of such agreement shall be no more favorable to such Third Party than those last offered to Pfizer. (ii) During the Term, if Exact desires to grant an exclusive commercial license to a Third Party solely to Promote or sell the Product in the OB/Gyn Field in the Territory (the "OB/Gyn Commercial Rights"), Exact shall first notify Pfizer of such intent (a "OB/Gyn Commercial Rights Transfer Notice") and Pfizer shall have thirty (30) days thereafter to notify Exact of its desire to obtain the OB/Gyn Commercial Rights that are the subject of the OB/Gyn Commercial Rights Transfer Notice. Promptly upon receipt of notice from Pfizer, Exact and Pfizer shall engage in exclusive good faith negotiations to enter into a definitive written agreement for the OB/Gyn Commercial Rights. If Pfizer and Exact are unable to reach agreement on the terms of such Product rights within forty-five (45) days of the commencement of negotiations, then Exact shall be free to enter into negotiations and consummate an agreement with any Third Party regarding such OB/Gyn Commercial Rights; provided that the economic terms of such agreement shall be no more favorable to such Third Party than those last offered to Pfizer. (iii) Notwithstanding the foregoing, this Section 3.1(c) shall not apply to (i) any transfer of rights to the Product in the ordinary course of business of Exact, (ii) the sale of the Product within and outside of the Territory, of all or substantially all of the assets of Exact, or sale 18 + +Source: EXACT SCIENCES CORP, 8-K, 8/22/2018 + + + + + +of capital stock of Exact, whether in connection with a merger, acquisition or other similar transaction or (iii) any agreements with Third Parties in territories for which Exact has an existing distribution or other similar agreement. 3.2 Responsibility for Product. (a) Retained Rights; Ownership of Product. Except as specifically set forth in this Agreement, Pfizer shall have no other rights with respect to the Product, and shall not Promote, Market or otherwise commercialize the Product except as expressly authorized under this Agreement. Exact retains, and at all times during the Term shall retain, all rights in and relating to the Product not expressly granted to Pfizer under this Agreement, including all proprietary and property interests in and to the Product. In furtherance of the foregoing, Exact retains all rights of and responsibility for (i) Product pricing, including any rebates or discounts; (ii) manufacturing; (iii) research and development, including any trials; (iv) intellectual property defense and enforcement related to the Product; (v) product liability claims and related litigation related to the Product; (vi) government investigations related to the Product; (vii) the day-to-day operations and management of Exact's Representatives; and (viii) engagement with Governmental Authorities with respect to the Product. Pfizer will neither have, nor represent that it has, any control over or proprietary or property interests in the Product. Nothing contained in this Agreement shall be deemed to grant to Pfizer or its Affiliates any license, right, title or interest in or to any patent, Trademark, copyright, trade secret or other similar property of Exact, except as provided for in Section 3.1(b), Section 5.3(c) or otherwise authorized in writing by Exact for Pfizer to perform its obligations under this Agreement. Likewise, nothing contained in this Agreement shall be deemed to grant to Exact or its Affiliates any license, right, title or interest in or to any patent, Trademark, copyright, trade secret or other similar property of Pfizer or its Affiliates except as may be authorized in writing by Pfizer for Exact to perform its obligations under this Agreement. (b) Exact Product Responsibilities. During the Term, as between the Parties, Exact shall remain solely responsible, at its expense , except as expressly otherwise provided in this Agreement, for all activities and liabilities that the owner and Regulatory Approval holder of an FDA approved medical device would normally have, including, in each case with respect to the Territory, the following: (i) manufacturing, in accordance with the QSR and Applicable Law (including conducting all quality assurance testing) sufficient quantities of Product to meet market demand therefore; (ii) processing and having sufficient laboratory and manufacturing capacity to process Product Laboratory Services to meet demand, including return receipt and laboratory processing of patient samples; 19 + +Source: EXACT SCIENCES CORP, 8-K, 8/22/2018 + + + + + +(iii) ensuring all laboratory processing of patient samples are conducted in accordance with CLIA Certificate of Accreditation and patient results are provided to ordering healthcare providers in a timely manner; (iv) ensuring that the Product is not misbranded, as defined in the FD&C Act; (v) handling all customer service activities relating to the Product, including responding in an appropriate and timely fashion to all medical and other inquiries and complaints regarding the Product in accordance with its Applicable Compliance/Review Policies; (vi) contracting with Payers, including entering into contracts for reimbursement of the Product Laboratory Services; (vii) using commercially reasonable efforts to maintain the Exact Trademarks listed on Exhibit 1.39; (viii) setting the price of the Product Laboratory Services, including establishing, processing and paying for any rebates, discounts, chargebacks or other sales incentives associated with the sale of the Product Laboratory Services; (ix) subject to Section 6.1, handling all product liability claims or other claims associated with or arising out of the manufacture, distribution, sale or use of the Product, including managing any litigation associated therewith and paying any damages, fines or other compensation that may be awarded by any Government Authority or that are due as a result of any settlement of any such claim; (x) handling, in a timely and appropriate manner, all government inquiries related to the Product Laboratory Services and the manufacture, distribution, Marketing, Promotion, sale or use of the Product; and (xi) preparing and submitting in a timely manner and in a manner consistent with Applicable Law all reports and information that are required to be submitted to any Government Authority relating to the Product and Product Laboratory Services. (c) Exact and Pfizer Product Responsibilities. During the Term, without limiting either Party's other responsibilities under this Agreement, the Parties shall: (i) establish and maintain a sufficient number of Sales Representatives Promoting the Product to perform the obligations hereunder per the Annual Marketing Plan and consistent with the sales deployment plan included in the Annual Marketing Plan, which initial sales deployment plan for the six-month period beginning on and 20 + +Source: EXACT SCIENCES CORP, 8-K, 8/22/2018 + + + + + +immediately following the Launch Date, is attached hereto as Exhibit 3.2(c)(i) (the "Sales Deployment Plan"); (ii) Market, Promote and Detail the Product in the Co-Promote Field in accordance with the Annual Marketing Plan, Applicable Laws, all regulatory and professional requirements including FDA's regulations and guidelines concerning the Advertising of prescription medical devices subject to pre-market approval, and each Party's Applicable Compliance/Review Policies and, with respect to Exact, the AdvaMed Code of Ethics on Interactions with Health Care Professionals (revised as of July 2009 and as further revised from time to time) (the "AdvaMed Code") and, with respect to Pfizer, the Pharmaceutical Research and Manufacturers of America Code on Interactions with Healthcare Professionals (the "PhRMA Code"); provided that if there is any conflict between the AdvaMed Code and the PhRMA Code in connection with the implementation of the Annual Marketing Plan, the Compliance Managers shall review and use commercially reasonable efforts to resolve such conflict; (iii) review customer target lists for all Sales Representatives in accordance with the Annual Marketing Plan to ensure that their Promotion is directed to those Eligible Prescribers who are likely to prescribe, recommend or purchase the Product consistent with the approved Product Label and all Applicable Laws and its Applicable Compliance/Review Policies; provided that each Party has the sole discretion to select their target customers from the target lists included in the Annual Marketing Plan and the Party's Sales Representatives shall have authority to Promote and Detail to the Eligible Prescribers on the target lists in their reasonable discretion, in accordance with each Party's respective internal policies and practices; (iv) work collaboratively with the other Party in developing, preparing and generating specific tactics and activities in the Annual Marketing Plan, which shall include supporting the development of all Promotional Materials, Training Materials and other materials generated pursuant to any Annual Marketing Plan; and (v) provide investment and support consistent with Sections 3.5, 3.6 and 4.1, as applicable. (d) Advertising. (i) Subject to the provisions of Section 3.2(d)(ii) with respect to the remainder of Calendar Year 2018 and for Calendar Year 2019, Exact and Pfizer shall develop an annual Advertising plan for the Product as part of the Annual Marketing Plan. The annual Advertising plan shall include the targets for such Advertising, 21 + +Source: EXACT SCIENCES CORP, 8-K, 8/22/2018 + + + + + +which shall be updated on an annual basis at the same time and in the same manner as the Annual Marketing Plan. In accordance with each such approved Advertising plan, Pfizer shall develop and execute all media planning and buying of Advertising consistent with its practice for its own product portfolio. (ii) The provisions of this Section 3.2(d) shall have no impact on Exact's Advertising plan for the Product for 2018. The Advertising plan for Calendar Year 2019 shall be Exact's Advertising plan; provided, Pfizer may review and make recommendations on such Advertising plan for Calendar Year 2019 and Exact shall consider such recommendations in good faith and use commercially reasonable efforts to incorporate agreed-upon Pfizer recommendations. It is acknowledged by the Parties that as of the Effective Date Pfizer has executed its television/video media buying on its own behalf for broadcast year 2019 (4Q2018-3Q2019). With respect to broadcast year 2019, Pfizer shall use commercially reasonable efforts and in good faith execute the television/video buy plan in the Calendar Year 2019 Advertising plan in the "scatter" market. Exact acknowledges that pricing and inventory for buy placement in the scatter market may not have the pricing advantage or delivery guarantees. For media buying of non-television/video in the Calendar Year 2019 Advertising plan, Pfizer shall in good faith integrate the Product into Pfizer portfolio media planning and buying for non-television/video. (iii) The cost of all media buying of Advertising for the Product by or through Pfizer shall be equal to the actual cost of such activities billed to Pfizer (including any third party service fees incurred by Pfizer) and shall not include any markup, administrative fee or service charge. (iv) Subject to compliance by Pfizer with the terms of this Section 3.2(d), during the Term, Exact agrees (A) not to enter into any new binding arrangement with any media vendor for Advertising of the Product without the written consent of Pfizer, which consent shall not be unreasonably withheld, (B) not to meet with any advertising agency or media vendor to discuss any Advertising proposals for content development and creative direction of the Product, without providing Pfizer with a reasonable opportunity for a representative of Pfizer present and participate and (C) to promptly inform Pfizer if it enters into any arrangement with any advertising agency with respect to the Product. (v) Exact agrees that any binding commitment made by Pfizer pursuant to this Section 3.2(d) for media buying for the Product shall also be binding to Exact; provided that such commitment is consistent with the applicable Annual Marketing Plan and the 22 + +Source: EXACT SCIENCES CORP, 8-K, 8/22/2018 + + + + + +budget included therein. (vi) After the Effective Date, the Parties will mutually agree to a process by which Pfizer will interact with Exact with respect to the activities undertaken by Pfizer pursuant to this Section 3.2(d). (vii) Notwithstanding the foregoing, Exact may continue any binding commitments as of the Effective Date, including Advertising purchasing and placement activities, related to and in connection with the sponsorship of sporting events (e.g., golf tournaments), celebrity sponsorships (e.g., Harry Connick serving as a Product spokesperson) and those other activities set forth in the Annual Marketing Plan (the "Exact Sponsorships and Related Activities"); provided, that Pfizer shall use commercially reasonable efforts to take responsibility of television/video and media buying related to such Exact Sponsorships and Related Activities following the Effective Date. The Exact Sponsorships and Related Activities may, as mutually agreed by the Parties, be included in the applicable annual Advertising plan. (viii) Following the Term and during the Tail Period subject to Sections 8.7 and 8.8(b), at the request of Exact, Pfizer shall, based on an agreed Advertising plan, plan and execute the media planning and buying plan in a substantially similar manner as it did during the Term, as such plan is updated on an annual basis during the Tail Period. Pfizer shall provide Exact with invoicing of Advertising buying during the Tail Period consistent with its invoicing practice during the Term. This invoice shall be provided within five (5) days of the end of each month during the Tail Period and shall set forth all Advertising costs, including any Pfizer's internal and overhead costs attributable to media buying for the Product, during month preceding the month that the invoice is delivered. Exact shall pay the invoice provided by Pfizer within five (5) days of the date that it receives the invoice. (ix) Within forty-five (45) calendar days after the end of each Calendar Quarter, Pfizer will deliver to Exact a report describing in reasonable detail the media buying activities for the just completed Calendar Quarter and any material deviations from the approved Advertising plan that occurred during such Calendar Quarter. (x) Except for Calendar Year 2018 and 2019 Advertising plan, the Parties shall mutually agree to the Advertising plan and any dispute with respect to such Advertising plan or arising out of material deviation of media buying by Pfizer shall be considered a Disputed JOC Matter and subject to escalation to the JSC under Section 2.3(d). Until such Disputed JOC Matter is resolved, the Parties will continue to operate under the then-current Advertising plan. Without limiting the foregoing, a deviation from the media 23 + +Source: EXACT SCIENCES CORP, 8-K, 8/22/2018 + + + + + +buying obligations under an Advertising plan by twenty percent (20%) or more shall be deemed to be material. (e) Product Training. (i) Promptly (and in any event within twenty (20) days) following the Effective Date, Exact shall be responsible for providing Product Training and Training Materials to Pfizer sales trainers (the "Pfizer Trainers") who shall then train Pfizer's Sales Representatives who shall Promote the Product using a training program relating solely to the Product and the Product Laboratory Service (including Training Materials). After the initial training, Exact shall periodically provide additional Product Training and the Parties shall agree to the frequency, time and place such additional Product Training will be rolled out to Sales Representatives. (ii) Exact shall bear all costs and expenses of training its Sales Representatives, its training facilities and the cost of developing Training Materials and the training of Pfizer Trainers with respect to the Product and the Product Laboratory Service. Pfizer shall be responsible for all travel, lodging, meal and other expenses and out-of- pocket expenses incurred by Pfizer's Sales Representatives in connection with such Product Training. (iii) Upon termination or expiration of this Agreement, at Exact's election, Pfizer either shall (A) return to Exact or (B) destroy and certify to the Exact such destruction, all Training Materials in the possession of, or under the control of, Pfizer. (iv) Pfizer shall ensure that no Pfizer Representative shall Promote the Product or Product Laboratory Service unless he or she demonstrates sufficient knowledge by meeting the validation requirements of Exact. Pfizer shall maintain, and make available upon request by Exact, records of all testing or certification results, including copies thereof. (v) The Parties shall cooperate in good faith to schedule, plan and conduct a pre-launch meeting for all Sales Representatives Detailing the Product (the "Pre-Launch Meeting"), which shall occur promptly following training of the Pfizer Sales Representatives in accordance with this Section 3.2(e). The Parties shall use commercially reasonable efforts to conduct the Pre-Launch Meeting as an in-person meeting by the first week of October 2018. (f) Promotional Materials. During the Term, the Parties agree to develop Promotional Materials together in accordance with the Annual Marketing Plan for use in Promoting the Product in the Territory. Each Party shall: 24 + +Source: EXACT SCIENCES CORP, 8-K, 8/22/2018 + + + + + +(i) only use and distribute the Promotional Materials for use in Promoting the Product; provided, however, that Exact may continue to utilize any remaining promotional materials for the Product created prior to the Effective Date, but Exact will not create any new promotional materials other than the Promotional Materials; (ii) instruct its Representatives to use, and will use commercially reasonable efforts to train and monitor its Representatives to ensure that such Representatives use, only Promotional Materials approved by the JRC; (iii) not, and shall ensure that its Affiliates and agents do not, change or alter any Promotional Materials in any way prior to their distribution or use by such Party or its Sales Representatives without JRC approval; and (iv) (A) use commercially reasonable efforts to train its Representatives with respect to, (B) instruct its Representatives to, and (C) establish appropriate internal systems, policies and procedures for the monitoring of its Representatives with the goal of ensuring that such Representatives will: (A) limit claims of efficacy and safety for the Product to those that are (1) consistent with approved Promotional claims in, and not add, delete or modify claims of efficacy and safety in the Promotion of the Product in any respect from those claims of efficacy and safety that are contained in, the then-effective Annual Marketing Plan, (2) consistent with Applicable Law and (3) consistent with the Product Label; (B) not make any changes or alterations to Promotional Materials; and (C) use Promotional Materials only in a manner that is consistent with this Agreement, Applicable Law and the Product Label. For clarity, the foregoing restrictions shall not apply to Exact Sciences Laboratories, LLC or any Representative of Exact or any of its Affiliates on the customer care team or market access team. (g) Representatives. Each Party shall be legally responsible and liable for the actions, omissions and conduct of their respective Sales Representatives and other Representatives performing activities hereunder. Each Party shall ensure that all Persons for whom they have legal responsibility and liability in accordance with the foregoing sentence comply with all Applicable Laws, the AdvaMed Code or the PhRMA Code, as applicable, Applicable Compliance/Review Polices, and all requirements of this Agreement, and shall implement and maintain policies and procedures to ensure such compliance. 25 + +Source: EXACT SCIENCES CORP, 8-K, 8/22/2018 + + + + + +(h) Marketing Authorization. Exact shall have the sole right and responsibility between the Parties to take, and shall take, all actions with respect to the Product reasonably necessary in order to maintain the Regulatory Approvals permitting the Marketing and sale of the Product in the Territory throughout the Term. (i) Withdrawal. Exact shall have sole authority to determine whether to recall or withdraw any Product in the Territory; provided, however, Exact shall notify Pfizer of its decision, including the reasons therefore, regarding any such recall or withdrawal promptly after such decision is made. Exact shall be solely responsible for and shall bear all costs associated, directly or indirectly, with any recalls or withdrawals of the Product. (j) Customer Service Activities; Safety Reporting. Exact shall have sole authority to handle all customer service activities regarding the Product in accordance with Section 3.2(b)(v). Promptly upon receipt (and in any event within one Business Day), Pfizer shall refer all customer service inquiries regarding the Product, including all medical and other inquiries and complaints, to Exact for resolution. Following the Effective Date but before the Launch Date, the Parties shall discuss and agree to a procedure by which Product inquiries to, or by, Pfizer will be sent to Exact to comply with applicable safety reporting requirements and obligations for the Product. 3.3 Annual Marketing Plan. (a) General. Promptly following the Effective Date, Exact and Pfizer shall develop an Annual Marketing Plan for the Product. Unless otherwise agreed by the Parties, the JOC shall prepare each Annual Marketing Plan and submit it for review and approval by the JSC by no later than October 1 of the then-current Calendar Year so that the JSC shall have a reasonable opportunity to review, revise and approve such Annual Marketing Plan by no later than October 31 of the Calendar Year preceding the Calendar Year to which such Annual Marketing Plan relates; provided that the Annual Marketing Plan for the 2019 Calendar Year shall be finalized by the JOC and submitted to the JSC promptly following the Effective Date, and in any event no later than December 1, 2018. It is the intent of the Parties that the Annual Marketing Plan for the remainder of 2018 will be approved by the JSC no later than October 1, 2018. If either Party desires to revise or update an approved Annual Marketing Plan prior to the end of a Calendar Year, it shall notify the JOC of such desired revision, and the JOC shall review any such proposed revision and determine whether to submit such revision to the JSC for review and approval. (b) Plan Contents. The Annual Marketing Plan for each Calendar Year beginning with the 2019 Calendar Year shall contain at a minimum the categories set forth in Exhibit 3.3(b) and such other information that the JOC or JSC believes is necessary. The 2018 Annual Marketing Plan shall contain 26 + +s t + +s t + +Source: EXACT SCIENCES CORP, 8-K, 8/22/2018 + + + + + +a high-level summary of the Sales Deployment Plan and use of Shared M&P Expenses for the remainder of 2018. 3.4 Sales Promotion, Detailing Efforts and IDN Promotion. (a) Sales Promotion. Commencing on the Launch Date, each of Exact and Pfizer shall implement the sales Detailing plan set forth in the applicable Annual Marketing Plan and the Sales Deployment Plan. In the case of Pfizer, Pfizer shall ensure that (i) the number of Details in a Calendar Year by Pfizer Sales Representatives is not less than six hundred twenty-five thousand (625,000) Details (for the remainder of 2018 Calendar Year following the Launch Date, Pfizer shall deliver one hundred forty thousand (140,000) Details) and (ii) if the Product is Promoted by Pfizer Sales Representatives (A) in position 2 or higher, the Incentive Compensation weighting directly tied to the Product shall not be less than thirty percent (30%) of Incentive Compensation available to be earned by such Sales Representative in the applicable Calendar Quarter and (B) in position 3 or lower, the Incentive Compensation weighting directly tied to the Product shall not be less than twenty-five percent (25%) of Incentive Compensation available to be earned by such Sales Representative in the applicable Calendar Quarter. If Pfizer delivers less than five hundred sixty-two thousand five hundred (562,500) Details in a Calendar Year, then the Promotion Fee due Pfizer for such Calendar Year shall be reduced by the applicable percentage set forth in the table on Exhibit 3.4(a), with such reduction to be deducted from remittance of the Promotion Fee for the last Calendar Quarter of such Calendar Year; provided that if such deduction exceeds the amount payable for such Calendar Quarter then Exact shall apply any such remaining deduction to the Promotion Fee for the next Calendar Quarter or Calendar Quarters, as necessary until the total deduction has been applied. If Pfizer delivers less than four hundred fifty thousand (450,000) Details in a Calendar Year, in addition to percentage reduction of the Promotion Fee set forth in the table on Exhibit 3.4(a), Exact shall have the right to terminate this Agreement under Section 8.3(b), which termination shall not be subject to the right of Pfizer to cure such breach. In no event shall Pfizer owe any monies to Exact for Detail shortfalls under this Agreement other than to refund the Promotion Fee owed to Exact due to Detail shortfall in accordance with this Section 3.4(a). Each Party shall be responsible for its own Sales Representatives costs attributable to the Product, including base salary and Incentive Compensation, normal travel and entertainment expenses, cost of fleet vehicles and other expenses normally associated with Promotion of products and services similar to the Product. (b) Detailing Efforts and Costs. Each Party shall have sole and exclusive control of all Detailing efforts and activities by its Sales Representative and Representatives, and shall be solely responsible for the costs thereof. Notwithstanding anything to the contrary in this Agreement or the 27 + +Source: EXACT SCIENCES CORP, 8-K, 8/22/2018 + + + + + +Annual Marketing Plan, any Detailing costs incurred by a Party or its Affiliates in delivering the Details assigned to such Party shall be the sole responsibility of such Party or Affiliate and shall not be a Baseline M&P Expense or Shared M&P Expense or otherwise a shared cost pursuant to this Agreement. (c) IDN Promotion. As part of this Agreement, Pfizer agrees to deploy its IDN Key Account Managers (or successor team with similar responsibilities, the "KAM Team") to support understanding and uptake of the Product by IDN customers in accordance with the Annual Marketing Plan. In furtherance, prior to the beginning of each Calendar Year, Pfizer shall discuss and agree with Exact on the defined goals and key performance indicators for the KAM Team. Pfizer and Exact shall agree to execution goals and deliverables of resources, subject to review and approval of the JRC, to be used by the KAM Team with IDN customers, and the tracking of such execution goals and deliverables using a scorecard. (d) Reporting. Within fifteen (15) Business Days after the end of each month during the Term, each Party shall provide to the other Party a written report setting forth (i) the number of Details completed during such month and (ii) any changes to Incentive Compensation or selling position of the Product by Sales Representatives during such month. Exact shall provide to Pfizer a weekly report detailing, on an Eligible Prescriber-by-Eligible Prescriber basis, the Product Laboratory Services activity, including but not limited to, the number of orders received, number of shipments sent to patients, and number of results sent back to prescriber. 3.5 Pfizer Investment and Support. Pfizer shall make financial investment in Marketing and Promoting the Product in accordance with and in all cases subject to the budget in the applicable Annual Marketing Plan (as the same may be adjusted as provided in Section 3.3) and shall be equal to fifty percent (50%) of Shared M&P Expense, in the amounts set forth in the chart below. Pfizer, at its own expense, shall use commercially reasonable efforts to carry out Pfizer's responsibilities under the Annual Marketing Plan, which commercially reasonable efforts shall include committing the appropriate resources to assist in the implementation of the Annual Marketing Plan and to carry out the activities Pfizer is responsible for thereunder and hereunder. Pfizer will make investments as set forth in the chart below. Notwithstanding the above, Pfizer agrees to invest its portion of Shared M&P Expense each Calendar Year subject to, (a) Exact spending at least twelve million dollars ($12,000,000) in Baseline M&P Expense each Calendar Quarter (provided, that notwithstanding Exact's quarterly spend for Baseline M&P Expense, Exact shall spend a total of eighty million dollars ($80,000,000) in Baseline M&P Expense each Calendar Year measured as of the end of each Calendar Year), (b) an amount equal to the total Shared M&P Expense contributed by both Parties is used for Marketing and Promotion and (c) a total sum of not less than eighty million dollars ($80,000,000) of Baseline M&P Expense is used for Marketing and Promotional activities, including the costs of Exact Sponsorships and Related Activities; provided, however, the Parties may agree to reallocate Shared M&P Expenses by 28 + +Source: EXACT SCIENCES CORP, 8-K, 8/22/2018 + + + + + +mutual written consent. Pfizer agrees to match dollar for dollar Exact's Shared M&P Expense for a Calendar Year to up to the amounts specified in the chart below. Calendar Year Pfizer's Shared M&P Expense 2018 $24 million 2019 $22 million 2020 $21 million 2021 $20 million For any investment period less than a full Calendar Year (other than 2018), Pfizer's Shared M&P Expense investment shall be adjusted pro rata based on the number of months remaining until the end of the Calendar Year. For Calendar Year 2018, Pfizer's Shared M&P Expense shall be adjusted to equal the number of months remaining from the Launch Date to December 31, 2018 divided by twelve (12) multiplied by twenty-four million dollars ($24,000,000); provided the requirements of this Section 3.5 are satisfied. Pfizer shall have no obligation to incur Shared M&P Expenses in excess of the amount in the above chart for the given Calendar Year, unless the Parties mutually agree to increase their portion of the Shared M&P Expense. 3.6 Exact Investment and Support. Exact shall commit, at its sole cost and expense and not subject to reimbursement by Pfizer, to maintaining its originally planned out-of-pocket Marketing and Promotional spends of eighty million dollars ($80,000,000) in each of the 2018, 2019, 2020, and 2021 Calendar Years, including the Exact Sponsorships and Related Activities (the "Baseline M&P Expense"). In addition to Baseline M&P Expense, Exact shall invest Shared M&P Expense in amounts to be matched by Pfizer pursuant to Section 3.5 above. Exact, at its own expense, shall use its commercially reasonable efforts to carry out Exact's responsibilities under the Annual Marketing Plan, which commercially reasonable efforts shall include committing the appropriate resources to assist in the implementation of the Annual Marketing Plan and to carry out the activities Exact is responsible for thereunder. In addition, except as provided for in Section 3.2(d), Exact shall be responsible for contracting with agencies and vendors who are or will be providing services (including the development of Promotional Materials and Training Materials) associated with the execution of the Annual Marketing Plan, shall timely pay all amounts due to such agencies and vendors for such services and shall authorize Pfizer to interact directly with and instruct such agencies and vendors in connection with such services as necessary and appropriate under this Agreement. Calendar Year Exact's Baseline M&P Expense Exact's Shared M&P Expense 2018 $80 million $24 million 2019 $80 million $22 million 2020 $80 million $21 million 2021 $80 million $20 million 29 + +Source: EXACT SCIENCES CORP, 8-K, 8/22/2018 + + + + + +For any investment period less than a full Calendar Year (other than 2018), Exact's Baseline M&P Expense and Shared M&P Expense investment shall be adjusted pro rata based on the number of months remaining until the end of the Calendar Year. For Calendar Year 2018, Exact's Baseline M&P Expense and Shared M&P Expense shall be adjusted to equal the number of months remaining from the Launch Date to December 31, 2018 divided by twelve (12) multiplied by eighty million dollars ($80,000,000) or twenty-four million dollars ($24,000,000), as applicable; provided that the requirements of this Section 3.6 are satisfied. Exact shall have no obligation to incur Shared M&P Expenses in excess of the amount in the above chart for the given Calendar Year, unless the Parties each agree to increase their portion of the Shared M&P Expense. 3.7 Changes in Shared M&P Expenses. In the event the Parties agree to not implement or to discontinue implementation of a strategy or tactic included in any Annual Marketing Plan, the applicable Shared M&P Expense investment set forth above shall be either (a) adjusted if, during good faith discussions at the JSC, the Parties agree on the implementation of a substitute strategy or tactic in place of the strategy or tactic that was not implemented or was discontinued, which adjustment will reflect any difference in cost of such substitute strategy or tactic or (b) reduced by the amount(s) allocated in the applicable budget for such strategy or tactic under the applicable Annual Marketing Plan, if the Parties, during good faith discussions at the JSC, agree not to implement a substitute strategy or tactic in place of the strategy or tactic that was not implemented or which was discontinued. Any amount saved as result of this Section 3.7 shall be re-deployed to other expenses associated with the Marketing of the Product, unless otherwise determined by the JSC. 4. ACCOUNTING. 4.1 Responsibility for Shared M&P Expenses. (a) General. Shared M&P Expenses contributed by Exact and Pfizer pursuant to Sections 3.5 and 3.6 shall be used solely to fund activities pursuant to the Annual Marketing Plan. The Parties shall agree to Calendar Quarter phasing of Baseline M&P Expenses and Shared M&P Expenses for budgeting purposes. The Parties will spend amounts contributed to Baseline M&P Expenses and Shared M&P Expenses simultaneously throughout each Calendar Year, in a manner consistent with the approved budget set forth in the Annual Marketing Plan. Any Baseline M&P Expenses and Shared M&P Expenses budgeted but not spent in Calendar Quarter may be rolled over into the next Calendar Quarter. For the avoidance of doubt, Pfizer will match dollar for dollar Exact's Shared M&P Expense for a Calendar Year to up to the amounts set forth in Section 3.5. (b) Remainder of 2018. Promptly after the Effective Date, Exact shall discuss with Pfizer its planned Marketing and Promotional spend associated with the Product for the period beginning on the Effective Date and ending on December 31, 2018, so that Pfizer may understand and recommend 30 + +Source: EXACT SCIENCES CORP, 8-K, 8/22/2018 + + + + + +reallocation of all or any portion of such planned Marketing and Promotional spend associated with the Product. Budget phasing of 2018 pro-rated Baseline M&P Expenses and pro-rated Shared M&P Expenses shall be done on the Calendar Quarter basis. Exact agrees it shall spend at least eighty million dollars ($80,000,000) toward Marketing and Promotion (including any amounts spent between January 1, 2018 and the Effective Date) and the pro-rated Shared M&P Expense for 2018. (c) Reporting. Within fifteen (15) Business Days after the end of each month during the Term beginning with October, 2018, Exact shall provide to Pfizer a written report setting forth the amount of Baseline M&P Expenses and Shared M&P Expenses incurred and paid for by Exact during such month, which report shall also provide sufficient itemization and detail related to such expenses in order for Pfizer to confirm that such Baseline M&P Expenses and Shared M&P Expenses were incurred pursuant to the Annual Marketing Plan. Pfizer, within fifteen (15) Business Days after the end of each month during the Term, beginning with October, 2018, shall prepare and provide to Exact a written report setting forth the aggregate amount of Shared M&P Expenses incurred and paid for by Pfizer during such month, along with sufficient itemization and detail related to such expenses in order for Exact to confirm that such Shared M&P Expenses were incurred pursuant to the Annual Marketing Plan. 4.2 Promotion Fee. (a) Calculation of Promotion Fee. From the Launch Date and ending on the last day of the next Calendar Quarter and each subsequent Calendar Quarter during the Term, Exact shall owe Pfizer a service fee equal to fifty percent (50%) of the product of: Laboratory Service Revenue minus Baseline Laboratory Service Revenue ("Incremental Laboratory Service Revenue") for the Calendar Quarter multiplied by Gross Margin Percent for the Calendar Quarter (such product, the "Promotion Fee"). In no event shall the Gross Margin Percent used in the calculation of the Promotion Fee be less than sixty-eight percent (68%) or more than seventy-four percent (74%). The calculation of the Promotion Fee pursuant to this Section 4.2(a) is subject to Section 4.2(c) below. Promotion Fee(s) and all compensation paid by Exact to Pfizer under this Agreement, even where calculated as a percentage of sales, is intended to compensate Pfizer a fair market value for the entirety of services that Pfizer is providing to Exact hereunder. The formula for the calculation of the Promotion Fee is as follows: A = Laboratory Service Revenue B = Baseline Laboratory Service Revenue C = Gross Margin Percent Promotion Fee = 0.5 * (A-B) * C 31 + +Source: EXACT SCIENCES CORP, 8-K, 8/22/2018 + + + + + +(b) Baseline Laboratory Service Revenue. The chart below sets forth the Baseline Laboratory Service Revenue for the Product for each Calendar Year during the Term (the "Calendar Year Baseline Laboratory Service Revenue"). In the Annual Marketing Plan the appropriate Calendar Year Baseline Laboratory Service Revenue shall be allocated among each Calendar Quarter during such Calendar Year, taking into consideration seasonality or other sales demand variables. For 2018, the first Calendar Quarter shall be from the Launch Date to December 31, 2018 and the Calendar Year Baseline Laboratory Service Revenue allocated to that Calendar Quarter shall be $130 million. + +Calendar Year Baseline Laboratory Service Revenue 2018 $441 million 2019 $622 million 2020 $861 million 2021 $1.191 billion (c) Supplemental Promotion Fee. (i) Subject to Pfizer's compliance with Sections 3.4(a)(i) and 3.4(a)(ii), (A) Exact shall pay Pfizer the amount, if any, by which the aggregate amount of the Promotion Fee incurred by Exact to Pfizer during the remainder of 2018 Calendar Year and 2019 Calendar Year (the "First Promotion Fee Period") is less than $37.5 million (the "First Supplemental Promotion Fee"), and (B) Exact shall pay Pfizer the amount, if any, by which the aggregate Promotion Fee incurred by Exact to Pfizer during each of Calendar Year 2020 and 2021 is less than $30 million ("Annual Supplemental Promotion Fee"), in each case to compensate Pfizer for the sales, Marketing and other performance provided by Pfizer under this Agreement. (ii) As of June 30 of each Calendar Year during the Term, Exact shall calculate a partial-period amount to be paid toward the potential First Supplemental Promotion Fee or the potential Annual Supplemental Promotion Fee, as the case may be. With regard to the First Supplemental Promotion Fee, the partial-period payment shall be equal to the amount by which the Promotion Fee for 2018, and the first six (6) months of Calendar Year 2019, is less than $22.5 million, and with regard to each Annual Supplemental Promotion Fee, the partial-period payment shall be equal to the amount by which the Promotion Fee for the six-month (6-month) period through June 30 is less than $15 million. (iii) As of December 31 of each Calendar Year during the Term, Exact shall calculate the First Supplemental Promotion Fee or the Annual Supplemental Promotion Fee, as the case may be, if any, for the entirety of the applicable period. Exact shall pay Pfizer the First 32 + +Source: EXACT SCIENCES CORP, 8-K, 8/22/2018 + + + + + +Supplemental Promotion Fee or the Annual Supplemental Promotion Fee, as the case may be, if any, less any partial-period payment made by Exact during the applicable period pursuant to Section 4.2(c)(ii). (iv) To the extent the amount of the Promotion Fee for the First Promotion Fee Period exceeds the First Supplemental Promotion Fee, Exact shall be entitled to a credit of such excess amount up to the amount of any partial-period payment made by Exact during such First Promotion Fee Period pursuant to Section 4.2(c)(ii), and Exact shall apply such credit toward the Promotion Fee payment due Pfizer for the fourth Calendar Quarter of 2019 (or due for subsequent Calendar Quarters until such credit is fully exhausted). To the extent the amount of the Promotion Fee for any Calendar Year after 2019 exceeds the Annual Supplemental Promotion Fee for such Calendar Year, Exact shall be entitled to a credit of such excess amount up to the amount of any partial-period payment made by Exact during such Calendar Year pursuant to Section 4.2(c)(ii), and Exact shall apply such credit toward the Promotion Fee payment due Pfizer for the fourth Calendar Quarter of such Calendar Year (or due for subsequent Calendar Quarters until such credit is fully exhausted). (v) Any amounts due under Sections 4.2(c)(i) and (ii) shall be payable within thirty (30) days after each of June 30 , and December 31 of each Calendar Year, beginning with June 30, 2019, as applicable. (d) OB/Gyn Sales. If Exact (i) grants OB/Gyn Commercial Rights to a Third Party in accordance with Section 3.1(c) or (ii) launches its own sales channel in the OB/Gyn Field (as applicable, the "Excluded Channel"), then the Laboratory Service Revenue used to perform the calculation set forth in Section 4.2(a) and to determine royalty payments pursuant to Section 8.7 shall exclude all Laboratory Service Revenue attributable to the Excluded Channel except a mutually agreed percentage of Laboratory Service Revenue during the applicable period attributable to such Excluded Channel (the "Included Revenue Percentage"); provided, that (A) such Included Revenue Percentage will reflect the anticipated relative contribution of the Parties with regard to the Excluded Channel after such launch, and (B) the Included Revenue Percentage shall not be less than the revenue percentage attributable to the OB/Gyn Field as of the date of such launch, calculated on the same basis that revenue from the OB/Gyn Field is calculated by Exact on the Effective Date. 4.3 Fee Statements and Payments. (a) Monthly and Quarterly Financial Deliverables. Exact shall on a monthly basis, not later than fifteen (15) Business Days after the end of the month, deliver to Pfizer a full suite of performance data, including Product Laboratory Services completed, average selling price per unit, Laboratory Service Revenue, rebates, net revenue and a detailed Cost of Sales schedule 33 + +th + +s t + +Source: EXACT SCIENCES CORP, 8-K, 8/22/2018 + + + + + +(consisting of collection kits distributed to patients, royalties paid, shipping costs, lab operating expenses and reagent costs). Not later than fifteen (15) Business Days after the end of the Calendar Quarter, Exact shall deliver to Pfizer a rolling sales forecast and an estimate, for the remaining Calendar Quarters in the Calendar Year, of the Promotion Fee as set forth in Section 4.2. (b) Payment of Promotion Fee. Exact, within thirty (30) days after the end of each Calendar Quarter of the Term, shall deliver to Pfizer a consolidated report in the form of and containing the information necessary to confirm the calculation of the Promotion Fee for such Calendar Quarter, together with the underlying spreadsheets with respect to such Calendar Quarter. The Promotion Fee due with respect to such Calendar Quarter and reflected on the consolidated report shall be remitted at the time such report is made. 4.4 Taxes and Withholding. It is understood and agreed between the Parties that any payments made under this Agreement are exclusive of any value added or similar tax ("VAT"), and that no such VAT shall apply to the payments made under this Agreement. In the event any payments made pursuant to this Agreement become subject to withholding taxes under the laws or regulation of any jurisdiction, the Party making such payment shall deduct and withhold the amount of such taxes for the account of the payee to the extent required by Applicable Law and such amounts payable to the payee shall be reduced by the amount of taxes deducted and withheld. Any such withholding taxes required under Applicable Law to be paid or withheld shall be an expense of, and borne solely by, the payee. To the extent that the Party making a payment is required to deduct and withhold taxes on any payments under this Agreement, the Party making such payment shall pay the amounts of such taxes to the proper Governmental Authority in a timely manner and promptly transmit to the payee an official tax certificate or other evidence of such withholding sufficient to enable the payee to claim such payments of taxes. The payee shall provide any tax forms to the Party making such payment that may be reasonably necessary in order for such Party not to withhold tax or to withhold tax at a reduced rate under an applicable bilateral income tax treaty. The payee shall use commercially reasonable efforts to provide any such tax forms to the Party making the payment at least thirty (30) days prior to the due date for any payments for which the payee desires that the Party making the payment apply a reduced withholding rate. Each Party shall provide the other with reasonable assistance to enable the recovery, as permitted by Law, of withholding taxes, VAT, or similar obligations resulting from payments made under this Agreement, such recovery to be for the benefit of the Party bearing such withholding tax or VAT. Notwithstanding anything in this Agreement to the contrary, (a) if an action (including any assignment or sublicense of its rights or obligations under this Agreement, or any failure to comply with Applicable Law or filing or record retention requirements) by a Party leads to the imposition of withholding tax liability or VAT on the other Party that would not have been imposed in the absence of such action or in an increase in such liability above the liability that would have been imposed in the absence of such action, then the sum payable by that Party (in respect of which such deduction or withholding is required to be made) shall be increased to the extent necessary to ensure that the other Party 34 + +Source: EXACT SCIENCES CORP, 8-K, 8/22/2018 + + + + + +receives a sum equal to the sum which it would have received had no such action occurred, (b) otherwise, the sum payable by that Party (in respect of which such deduction or withholding is required to be made) shall be made to the other Party after deduction of the amount required to be so deducted or withheld, which deducted or withheld amount shall be remitted in accordance with Applicable Law. 4.5 No Partnership Provision. It is expressly agreed that Pfizer and Exact shall be independent contractors and that the relationship between Pfizer and Exact shall not constitute a partnership, joint venture or agency. The Parties agree that the rights and obligations under this Agreement are not intended to constitute a partnership or similar arrangement that will require separate reporting for tax purposes consistent with the intent reflected in the foregoing sentence and agree that they shall not file any reports, documents or other item relating to taxes or state or acknowledge to any tax authority that such relationship is a partnership or similar arrangement unless required by Applicable Law. 4.6 Payments; Currency. All payments due by one Party to the other Party hereunder shall be paid by wire transfer in immediately available funds from the account or accounts of a Party and/or its Affiliates to an account or accounts of the receiving Party and/or its Affiliates designated in writing by the receiving Party. All amounts payable and calculations hereunder shall be in United States dollars. 4.7 Maintenance of Records; Audits. (a) Record Keeping. Each Party shall keep and shall cause its Affiliates to keep accurate books and accounts of record in connection with (i) its Marketing and Promotion of the Product, (ii) (with respect to Exact) performance of Product Laboratory Services, and (iii) its activities under this Agreement and any Annual Marketing Plan, in sufficient detail to permit accurate determination of all figures necessary for verification of (A) amounts to be paid hereunder and (B) compliance with the terms of this Agreement. Each Party shall, and shall cause its Affiliates to, maintain such records for a period of at least three (3) years after the end of the Calendar Year to which they pertain. (b) Financial Audits. (i) Audit Right. Upon thirty (30) days prior written notice from a Party (the "Auditing Party"), the other Party (the "Audited Party") shall permit an independent certified public accounting firm of nationally recognized standing selected by the Auditing Party and reasonably acceptable to the Audited Party, to examine, at the Auditing Party's sole expense, the relevant books and records of the Audited Party and its Affiliates as may be reasonably necessary to verify the accuracy of the reports submitted by the Audited Party in accordance with Sections 3.4(d), 4.1(c) and 4.3(a) and the payment of Promotion Fees hereunder. An examination by the Auditing Party under this Section 4.6(b) shall occur not more than once in any Calendar Year and shall 35 + +Source: EXACT SCIENCES CORP, 8-K, 8/22/2018 + + + + + +be limited to the pertinent books and records for any Calendar Year during the Term ending not more than twenty-four (24) months before the date of the request. The accounting firm shall be provided access to such books and records at the Audited Party's facility(ies) in the Territory where such books and records are normally kept and such examination shall be conducted during the Audited Party's normal business hours. The Audited Party may require the accounting firm to sign a standard non-disclosure agreement before providing the accounting firm access to the Audited Party's facilities or records. Upon completion of the audit, the accounting firm shall provide both Pfizer and Exact a written report disclosing whether the reports submitted by the Audited Party are correct or incorrect, whether the Promotion Fees paid during the audited period or Baseline M&P Expenses or Shared M&P Expenses incurred during the audited period are correct or incorrect, and, in each case, the specific details concerning any discrepancies. No other information shall be provided to the Auditing Party. The decision of the accounting firm will be final and unappealable absent manifest error. (ii) Underpayments/Overpayments. If such accounting firm concludes that additional Promotion Fees were due to Pfizer, Exact shall pay to Pfizer an amount equal to the actual Promotion Fee due minus the Promotion Fee paid within thirty (30) days of the date Exact receives such accountant's written report so concluding. If such accounting firm correctly concludes that Promotion Fees paid to Pfizer were in excess of the amount properly due, Pfizer shall pay or refund to Exact an amount equal to the Promotion Fee paid minus the actual Promotion Fee due within thirty (30) days of the date Exact receives such accountant's written report so concluding. (c) Compliance Audit. Upon thirty (30) days prior written notice from an Auditing Party, the Audited Party shall permit the Auditing Party's external auditors access to any relevant books documents, papers, and records of the Party involving any report delivered pursuant to Sections 3.2(d), 3.4(d) and 4.3(a) of this Agreement and the activities performed under this Agreement, if the other Party has credible evidence that the other Party violated terms of this Agreement, including with respect to Product Training under Section 3(e). An examination by a Party under this Section 4.6(c) shall (i) occur not more than once in any Calendar Year, (ii) be limited to the pertinent books and records for any Calendar Year during the Term ending not more than twenty-four (24) months before the date of the request and (iii) be at the sole expense of the Auditing Party. The external auditors of the Auditing Party shall be provided access to such books and records at the Audited Party's facility(ies) in the Territory where such books and records are normally kept and such examination shall be conducted during the Audited Party's normal business hours. The Audited Party may require any external auditors to sign a standard non-disclosure agreement before providing the accounting firm access to the Audited Party's facilities or records. 36 + +Source: EXACT SCIENCES CORP, 8-K, 8/22/2018 + + + + + +(d) Confidentiality. All financial and other confidential information of the Audited Party which is subject to review under this Section 4.6 shall be deemed to be the Audited Party's Confidential Information and, subject to the provisions of Article 6 hereof, the Auditing Party shall not disclose such Confidential Information to any Third Party or use such Confidential Information for any purpose other than verifying compliance with this Agreement. 5. REPRESENTATIONS, WARRANTIES AND COVENANTS. 5.1 Mutual Representations and Warranties. Each of Exact and Pfizer hereby represents and warrants to the other Party as of the Effective Date that: (a) it is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization; (b) the execution, delivery and performance of this Agreement by such Party has been duly authorized by all requisite action under the provisions of its certificate of incorporation, bylaws and other organizational documents, and does not require any action or approval by any of its shareholders or other holders of its voting securities or voting interests that has not been taken; (c) it has the power and authority to execute and deliver this Agreement and to perform its obligations hereunder; (d) this Agreement has been duly executed by an appropriate representative of such Party and is a legal, valid and enforceable against such Party in accordance with its terms; (e) the execution, delivery and performance by such Party of this Agreement and its compliance with the terms and provisions hereof does not and will not conflict with or result in a breach of or default under (i) any oral or written agreement that binds such Party's operations or property, including any assignment, license agreement, loan agreement, guaranty or financing agreement, (ii) the provisions of such Party's certificate of incorporation, bylaws or other organizational documents, or (iii) any order, writ, injunction, decree or judgment of any court or Governmental Authority entered against such Party or by which any of such Party's operations or property are bound; (f) all material written information provided by each Party in the virtual data room maintained for the purposes of the proposed transactions under this Agreement is complete, truthful and accurate in all material respects; and (g) neither it, nor any of its Affiliates, nor, to such Party's knowledge, any of their respective Representatives has been debarred or suspended under 21 U.S.C. § 335(a) or (b), excluded from a federal health care program, debarred from federal contracting, or convicted of or pled nolo contendere to any felony, or to any federal or state legal violation (including misdemeanors) relating to medical devices or fraud ("Debarred/Excluded"). 37 + +Source: EXACT SCIENCES CORP, 8-K, 8/22/2018 + + + + + +5.2 Representations and Warranties of Exact. Exact hereby represents and warrants to Pfizer as of the Effective Date that: (a) no consent is required from any Third Party for Exact to enter into, or to exercise its rights and perform its obligations under, this Agreement; (b) in connection with the development, manufacturing and Promotion of the Product, except as would not reasonably be expected to have a material adverse effect on the Promotion of the Product in the Territory, Exact has complied and will continue to comply in all material respects with Applicable Law, including the FD&C Act, the Anti-Kickback Statute (42 U.S.C. § 1320a-7b), Civil Monetary Penalty Statute (42 U.S.C. § 1320a-7a), the False Claims Act (31 U.S.C. § 3729 et seq.), comparable state statutes, the regulations promulgated under all such statutes, and the regulations issued by the FDA; (c) with respect to the development, manufacturing and Promotion of the Product, Exact has not taken and will not take any action directly or indirectly to offer, promise or pay, or authorize the offer or payment of, any money or anything of value in order to improperly or corruptly seek to influence any Government Official in order to gain an improper advantage; (d) in connection with Exact's manufacturing and Promotion of Product or Exact's performance of the Product Laboratory Service in the Territory or directly relating to the transactions contemplated by this Agreement, except as would not reasonably be expected to have a material adverse effect on the Promotion of the Product in the Territory, (i) no written claim, demand, suit, investigation or other legal action of any nature, civil, criminal, regulatory or otherwise, has been filed and received by Exact, and is pending in any court, arbitration or government agency proceeding nor, to the knowledge of Exact, has any claim, demand, suit, investigation or other legal action of any nature, civil, criminal, regulatory or otherwise been threatened in writing, to be filed against Exact in any court, arbitration or government agency proceeding; and (ii) there is no judgment or settlement against or owed by Exact; (e) Exact has not received written notice from any Third Party claiming that the manufacture, use, sale or importation by or on behalf of Exact of the Product in the Territory or the performance of any Product Laboratory Service by or on behalf of Exact (i) infringes any issued patent or intellectual property right of such Third Party in the Territory or (ii) will infringe any claim of any published patent application of such Third Party in the Territory when and if such claim issues; (f) to Exact's knowledge, the manufacture, use, sale or importation by or on behalf of Exact of the Product in the Territory or the performance of any Product Laboratory Service by or on behalf of Exact (i) does not infringe any issued patent or intellectual property right of any Third Party in the Territory 38 + +Source: EXACT SCIENCES CORP, 8-K, 8/22/2018 + + + + + +or (ii) will not infringe any claim of any published patent application of any Third Party in the Territory when and if such claim issues; and (g) Exact is not presently engaged in any discussions with any Third Party with respect to the grant to any Third Party of and does not currently have any agreement with any Third Party to grant any right or license to make, use, import, offer for sale or sell any Product, in the Territory, in each case, which would constitute a grant of Ex-US Commercial Rights or OB/Gyn Commercial Rights. 5.3 Covenants. (a) Each Party hereby covenants to the other Party that, during the Term in the Territory: (i) it will immediately remove any Sales Representative from having any responsibilities relating to Promotion of the Product under this Agreement if required by Applicable Laws, including if such Party determines that such Sales Representative is Debarred/Excluded; (ii) it will promptly remove any Sales Representative from having any responsibilities relating to the Promotion of the Product under this Agreement if, following an investigation, it is determined that there has been a significant violation of any Applicable Laws, or the Party's Applicable Compliance/Review Policies by such Sales Representative; and (iii) it will not knowingly make any untrue or misleading statements or comments about the Product. (b) Pfizer hereby covenants to Exact that, during the Term in the Territory, it, its Affiliates and its Sales Representatives will not (i) Promote the Product outside of the Territory or the Co-Promote Field; or (ii) disparage or present in a negative light the Product in the performance of its obligations hereunder; provided that nothing herein shall be interpreted to preclude Pfizer from (A) describing any risks of a Product set forth in the Product Label or (B) making truthful statements about the Products to the extent required by Applicable Laws, in connection with any litigation or in response to any question, inquiry or request for information when required by legal process (e.g., a valid subpoena or other similar compulsion of law) or as part of a government investigation. (c) Exact hereby covenants that neither Exact nor its Affiliates shall sue Pfizer and its Affiliates under any Exact Patent Rights solely with respect to any activities carried out by Pfizer or its Affiliates under, and to the extent in compliance with, this Agreement, including its and their activities to Promote and Detail the Product in the Co-Promote Field in the Territory during the Term of this Agreement and in compliance with this Agreement. 39 + +Source: EXACT SCIENCES CORP, 8-K, 8/22/2018 + + + + + +5.4 Compliance with Law and Ethical Business Practices. In addition to the other representations, warranties and covenants made by each Party under this Agreement, each Party hereby represents, warrants and covenants to the other Party that, during the Term in the Territory: (a) it is, and will remain during the Term, licensed, registered and/or qualified under Applicable Law to do business, and has obtained such licenses, consents, authorizations or completed such registration or made such notifications as may be necessary or required by Applicable Law to perform its obligations under this Agreement; (b) it will perform its obligations under this Agreement in material compliance with this Agreement and any applicable Annual Marketing Plan, its Applicable Compliance/Review Policies and Applicable Laws (including the FD&C Act, the Anti- Kickback Statute (42 U.S.C. § 1320a-7b), Civil Monetary Penalty Statute (42 U.S.C. § 1320a-7a), the False Claims Act (31 U.S.C. § 3729 et seq.), comparable state statutes, the regulations promulgated under all such statutes, and the regulations issued by the FDA); (c) in connection with the activities contemplated by this Agreement, to each Party's knowledge, it has been, and during the Term will be, in compliance with all applicable U.S. trade laws, including those related to, import controls, export controls, or economic sanctions; (d) it will ensure its own compliance with all Applicable Laws; (e) with respect to the Product and any payments or services provided under this Agreement, such Party has not taken, and during the Term will not take, any action, directly or indirectly, to offer, promise or pay, or authorize the offer or payment of, any money or anything of value in order to improperly or corruptly seek to influence any Government Official in order to gain an improper advantage, and has not accepted, and will not accept in the future such payment; (f) each Party hereby certifies that it has implemented and will maintain and enforce a compliance and ethics program designed to prevent and detect violations of Applicable Laws throughout its operations (including Affiliates) and the operations of its Representatives that have responsibility for Product, payments, or services provided under the Agreement, including by implementing policies and procedures setting out rules governing interactions with healthcare professionals and Government Officials; the engagement of third parties, and where appropriate, due diligence; and the investigation, documentation, and remediation of any allegations, findings, or reports related to a potential violation of its Applicable Compliance/Review Policies. Such compliance program shall include at a minimum, compliance officer, compliance committee(s), policies and procedures relating to (i) sales, medical, Promotional and Marketing activities for the Product, (ii) regular auditing and monitoring, (iii) training 40 + +Source: EXACT SCIENCES CORP, 8-K, 8/22/2018 + + + + + +on sales, medical, Promotional and Marketing activities and the relevant legal requirements regarding such activities, (iv) methods to raise questions or concerns internally (e.g., via a hotline) without fear of retribution or retaliation, (v) processes for investigating and documenting any compliance concerns or allegations raised, findings or reports related to a potential violation of Applicable Laws, and (vi) taking remedial, corrective action and/or disciplinary action, as appropriate; (g) has implemented, and will maintain and enforce, a system of internal accounting controls designed to ensure the making and keeping of fair and accurate books, records, and accounts with respect to products, payments, or services provided under this Agreement, and regularly monitors and audits its business activities to ensure compliance with its Applicable Compliance/Review Policies and the adequacy of internal controls, and implements remediation in response to identified issues; (h) it will (A) maintain truthful and complete documentation supporting, in reasonable detail, the work performed and any expenses incurred in connection with this Agreement and any products, payments, or services provided under this Agreement and (B) maintain financial books and records that timely, fairly, accurately, and completely reflect all financial transactions, in accordance with all Applicable Laws (for example, invoices, reports, statements, books, and other records), and shall maintain such books and records during the Term of the Agreement and for three years after final payment has been made under the Agreement; (i) it provides, and during the Term will provide, training to Representatives providing services in connection with this Agreement; (j) every year of this Agreement that coincides with the term of the Corporate Integrity Agreement ("CIA") entered into on May 23, 2018 between Pfizer and the United States Department of Health and Human Services, Office of Inspector General, Pfizer will send a letter to Exact that: (A) summarizes Pfizer's obligations under the CIA, (B) expresses Pfizer's commitment to full compliance with all federal health care program requirements, (C) describes the Pfizer Compliance Program and (D) includes a copy of (or includes a link to) Pfizer's code of conduct (referred to as the Blue Book). Within thirty (30) days of receipt of this letter, Exact shall respond in writing to the contact information included in Pfizer's letter that Exact shall: (1) make Pfizer's code of conduct and a description of the Pfizer Compliance Program available to its employees engaged in activities related to the Agreement or (2) represent to Pfizer that it has and enforces a substantially comparable code of conduct and compliance program for its employees who have responsibilities related to the Agreement; and (k) with respect to the Product and any payments made or services provided under this Agreement: 41 + +Source: EXACT SCIENCES CORP, 8-K, 8/22/2018 + + + + + +(i) in the event that such Party receives a report of or otherwise becomes aware of a potential violation of its Applicable Compliance/Review Policies, the Party will perform an investigation in accordance with its established policies and procedures and will take all necessary and appropriate responsive, and corrective actions, including disciplinary actions (up to and including termination of any employee, contractor, agent, sub-contractor, customer, vendor or other Person that the Party believes was responsible); (ii) such Party has implemented, and will at all times during the Term maintain, adequate policies and procedures describing the materials and information that may be distributed or discussed by the Party's Sales Representatives related to the Product and the manner in which such Persons should handle unsolicited requests for information related to off-label uses of the Product, which policies and procedures shall be designed to ensure compliance with Applicable Laws and regulations; (iii) such Party regularly reviews its Applicable Compliance/Review Policies as part of its internal processes of improvement, and, from time to time, benchmarks them against the standards of the industry; (iv) such Party has implemented, and will at all times during the Term maintain, adequate systems, policies, and procedures to screen before hire and annually thereafter all prospective and current Representatives conducting activities with respect to the Product against (A) the List of Excluded Individuals/Entities compiled by the Office of the Inspector General in the Department of Health and Human Services and (B) the General Services Administration's List of Parties Excluded from Federal Programs, which policies and procedures require each Party's prospective and current Representatives conducting activities with respect to the Product to disclose immediately to the Party that such Representative is or may become Debarred/Excluded; (v) neither Party shall provide funding to the other Party for charitable donations to independent charities that provide financial assistance to patients, including sharing costs associated with such donations; provide information to the other Party concerning its own such donations; or seek to obtain information about such donations from the other Party. Each Party shall have appropriate policies and procedures to ensure that such donations comply with Applicable Law and current government guidance, including without limitation guidance issued by the U.S. Department of Health and Human Services, Office of Inspector General, and shall operate consistent with those policies and procedures. Unless a Party does not and will not make such donations during the Term of the Agreement, if a Party does not have appropriate policies and procedures in place on 42 + +Source: EXACT SCIENCES CORP, 8-K, 8/22/2018 + + + + + +the Effective Date, the Party must implement such policies and procedures within thirty (30) days of the Effective Date. Either Party may request copies of such policies and procedures of the other Party in order to confirm compliance with the requirements of this Section; (vi) certifies that in connection with this Agreement, such Party's compensation system for its Representatives that perform any Marketing, Promotion, or sales activities related to the Product is designed to ensure that financial incentives do not inappropriately motivate such Representative to engage in improper or illegal Promotion, sales or Marketing of the Product (including off-label Promotion of the Product), and excludes from Incentive Compensation sales that may be attributable to the off-label use of the Product; and (vii) in connection with this Agreement, each Party's call planning system for its Sales Representatives that call upon health care professionals or health care institutions for any Promotional or sales activities related to the Product is designed to ensure that such Sales Representatives do not call upon health care professionals or health care institutions that are not likely to prescribe or use the Product for an on-label use. 5.5 Notice of Investigations. Each Party shall promptly notify the other Party in the event that it becomes subject to or aware of any FDA or other Governmental Authority inspection, investigation, or other inquiry or a FDA warning letter, untitled letter, or other material governmental notice or communication relating to the services or products covered by this Agreement promptly after the Party becomes aware of such inspection, investigation, inquiry, letter, notice, or communication, except to the extent that the disclosing Party's counsel reasonably believes that such disclosure to the other Party could violate Applicable Laws (including privacy laws) or have a significant adverse impact on the disclosing Party's legal position or defense (including the loss of attorney-client privilege) with respect to any such inspection, investigation or other inquiry. In the event that the Party determines that disclosure could violate Applicable Laws (including privacy laws) or have a significant adverse impact on the disclosing Party's legal position or defense (including the loss of attorney-client privilege), the Party shall promptly notify the other Party that it is exercising its right not to make such disclosure. 5.6 Representation by Legal Counsel. Each Party hereto represents that it has been represented by legal counsel in connection with this Agreement and acknowledges that it has participated in the drafting hereof. In interpreting and applying the terms and provisions of this Agreement, the Parties agree that no presumption shall exist or be implied against the Party which drafted such terms and provisions. 5.7 No Inconsistent Agreements. Neither Party shall enter into any oral or written agreement or arrangement that would be inconsistent with its obligations under this Agreement. 43 + +Source: EXACT SCIENCES CORP, 8-K, 8/22/2018 + + + + + +5.8 Disclaimer. THE FOREGOING WARRANTIES OF EACH PARTY ARE IN LIEU OF ANY OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED WARRANTIES OF NONINFRINGEMENT, ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR ANY IMPLIED WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE ALL OF WHICH ARE HEREBY SPECIFICALLY EXCLUDED AND DISCLAIMED. 6. INDEMNIFICATION; LIMITATION OF LIABILITY AND INSURANCE. 6.1 Indemnification. (a) Indemnification by Exact. Exact shall indemnify, defend and hold Pfizer, its Affiliates and their respective Representatives (the "Pfizer Indemnitees") harmless from any claims, damages, actions, liabilities, losses, costs and expenses, including attorneys' fees incurred in defending against them, (hereinafter "Claims") of a Third Party arising out of (A) the manufacture, Marketing, education, Promotion, importation or use of the Product or the performance of the Product Laboratory Service by Exact or its Representatives; (B) any breach by Exact of any of its representations, warranties or obligations under this Agreement; or (C) any negligent or wrongful act or omission of Exact; and (D) any alleged patent infringement, regardless of direct, contributory or inducement, by Pfizer, its Affiliates or their respective Representatives, as a result of the performance of Pfizer's obligations under this Agreement; except, in each case (A) - (D), to the extent such Claims arise out of any breach by any Pfizer Indemnitee of any of its obligations under this Agreement, or any negligent or wrongful act or omission of any Pfizer Indemnitee. (b) Indemnification by Pfizer. Pfizer shall indemnify, defend and hold Exact, its Affiliates and their respective Representatives (the "Exact Indemnitees"), harmless from any Claims of a Third Party, to the extent arising out of (i) any breach by Pfizer of any of its representations, warranties, or obligations under this Agreement or (ii) any negligent or wrongful act or omission of Pfizer, except to the extent such Claims arise out of any breach by any Exact Indemnitee of any of its obligations under this Agreement, or any negligent or wrongful act or omission of any Exact Indemnitee; provided that in no event shall Pfizer have any obligation to indemnify Exact for any product liability claim arising out of bodily injury or death arising from the use of the Product. (c) Procedure. (i) A Party believing that it is entitled to indemnification under Section 6.1 (an "Indemnified Party") shall give prompt written notification to the other Party (the "Indemnifying Party") of the commencement of any Claim by a Third Party for which indemnification may be sought or, if earlier, upon the assertion of any such Claim by a Third Party (it being understood and agreed, however, that the failure by an Indemnified Party to give notice of a Third Party Claim as provided 44 + +Source: EXACT SCIENCES CORP, 8-K, 8/22/2018 + + + + + +in this Section 6.1(c) shall not relieve the Indemnifying Party of its indemnification obligation under this Agreement except and only to the extent that such Indemnifying Party is actually materially prejudiced as a result of such failure to give notice). Within thirty (30) days after delivery of such notification, the Indemnifying Party may, upon written notice thereof to the Indemnified Party, assume control of the defense of such Claim with counsel reasonably satisfactory to the Indemnified Party. If a Party believes that a Claim presented to it for indemnification is one as to which the Party seeking indemnification is not entitled to indemnification under Section 6.1, it shall so notify the Party seeking indemnification. (ii) If the Indemnifying Party elects to assume the defense of such Claim, the Indemnified Party may participate in such defense at its own expense; provided that if the Indemnified Party reasonably concludes, based on advice from counsel, that the Indemnifying Party and the Indemnified Party have conflicting interests with respect to such Claim, the Indemnifying Party shall be responsible for the reasonable fees and expenses of counsel to the Indemnified Party solely in connection therewith. (iii) The Indemnifying Party shall keep the Indemnified Party advised of the status of such Claim and the defense thereof and shall consider recommendations made by the Indemnified Party with respect thereto. (iv) The Indemnified Party shall not agree to any settlement of such Claim without the prior written consent of the Indemnifying Party, which shall not be unreasonably withheld. The Indemnifying Party shall not agree to any settlement of such Claim or consent to any judgment in respect thereof that does not include a complete and unconditional release of the Indemnified Party from all liability with respect thereto or that imposes any liability or obligation on the Indemnified Party or adversely affects the Indemnified Party without the prior written consent of the Indemnified Party, which shall not be unreasonably withheld. 6.2 Insurance Requirements. Each Party agrees to obtain and maintain, during the Term and for five (5) years after the Term, commercial general liability insurance, including products liability insurance, with minimum "A-" AM Best rated insurance carriers, in each case with limits of not less than five million dollars ($5,000,000) per occurrence and in the aggregate. All deductibles/retentions will be the responsibility of the named insured. Pfizer and its Affiliates will be an additional insured on Exact's commercial general liability and products liability policies, and be provided with a waiver of subrogation. To the extent of its culpability, all coverages of Exact will be primary and non-contributing with any similar insurance carried by Pfizer. Notwithstanding any provision of this Section 6.2 to the contrary, Pfizer may meet its obligations under this Section 6.2 through self-insurance. 45 + +Source: EXACT SCIENCES CORP, 8-K, 8/22/2018 + + + + + +Neither Party's insurance will be construed to create a limit of liability with respect to its indemnification obligations under this Section 6. 6.3 Limitation of Liability. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT, EXCEPT FOR (A) INDEMNIFICATION OBLIGATIONS OF A PARTY UNDER SECTION 6.1, (B) A BREACH OF SECTION 7 BY A PARTY OR (C) THE WILLFUL MISCONDUCT OR GROSS NEGLIGENCE OF A PARTY, NEITHER PARTY NOR ANY OF ITS AFFILIATES SHALL BE LIABLE TO THE OTHER PARTY OR ANY OF ITS AFFILIATES FOR ANY SPECIAL, PUNITIVE, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES, INCLUDING LOST PROFITS, LOST REVENUES OR PENALTIES ARISING FROM OR RELATING TO ANY BREACH OF THIS AGREEMENT, REGARDLESS OF ANY NOTICE OF THE POSSIBILITY OF SUCH DAMAGES. 7. CONFIDENTIALITY; PUBLICITY. 7.1 Confidentiality. Except to the extent expressly authorized by this Agreement or otherwise agreed in writing, the Parties agree that, for the term of this Agreement and for five (5) years thereafter, each Party (the "Receiving Party"), receiving any Confidential Information of the other Party (the "Disclosing Party") hereunder shall keep such Confidential Information confidential and shall not publish or otherwise disclose or use such Confidential Information for any purpose other than as provided for in this Agreement. "Confidential Information" means any technical, scientific, regulatory, commercial, business or other information provided by or on behalf of the Disclosing Party to the Receiving Party pursuant to this Agreement or otherwise relating to or disclosed during any transaction contemplated hereby (including information disclosed prior to the Effective Date under a confidentiality agreement in contemplation of this Agreement), including information relating to the terms of this Agreement or the Product, and the scientific, regulatory or business affairs or other activities of either Party; provided that, Confidential Information shall not include any information that the Receiving Party can establish: (a) was already known to the Receiving Party (other than under an obligation of confidentiality), at the time of disclosure by the Disclosing Party and such Receiving Party has documentary evidence to that effect; (b) was generally available to the public or otherwise part of the public domain at the time of its disclosure to the Receiving Party; (c) became generally available to the public or otherwise part of the public domain after its disclosure or development, as the case may be, and other than through any act or omission of a Party in breach of this confidentiality obligation; (d) was disclosed to that Party, other than under an obligation of confidentiality, by a Third Party who had no obligation, directly or indirectly, to the Disclosing Party, not to disclose such information to others; or 46 + +Source: EXACT SCIENCES CORP, 8-K, 8/22/2018 + + + + + +(e) was independently discovered or developed by or on behalf of the Receiving Party without the use of the Confidential Information belonging to the other Party and the Receiving Party has documentary evidence to that effect. 7.2 Authorized Disclosure and Use. (a) Disclosure. Notwithstanding the foregoing Section 7.1, each Party may disclose to Third Parties Confidential Information belonging to the other Party to the extent such disclosure is reasonably necessary to: (i) prosecute or defend litigation, (ii) exercise or enforce rights hereunder; provided that such disclosure is covered by terms of confidentiality no less stringent than those set forth herein, and (iii) comply with inquires by a Governmental Authority or subpoena issued by a Governmental Authority or a court of competent jurisdiction. In the event a Party shall deem it necessary to disclose pursuant to this Section 7.2 Confidential Information belonging to the other Party, the Disclosing Party shall to the extent possible give reasonable advance notice of such disclosure to the other Party and take reasonable measures to ensure confidential treatment of such information. (b) Use. Notwithstanding the foregoing Section 7.1, during the Term, each Party shall have the right to use the other Party's Confidential Information in carrying out its respective responsibilities under this Agreement. 7.3 Certain Regulatory Filings. Either Party may disclose the terms of this Agreement to the extent required, in the reasonable opinion of such Party's legal counsel, to comply with Applicable Laws, including the rules and regulations promulgated by the United States Securities and Exchange Commission or by any stock exchange or regulatory body to which the Party is subject. Before disclosing this Agreement or any of the terms hereof pursuant to this Section 7.3, the Parties will consult with one another regarding the terms in this Agreement to be redacted in making any such disclosure. If a Party discloses this Agreement or any of the terms hereof in accordance with this Section 7.3, such Party agrees, at its own expense, to seek confidential treatment of portions of this Agreement or such terms, as may be reasonably requested by the other Party. 7.4 Public Announcements. The Parties shall agree upon a joint press release to announce the execution of this Agreement, a copy of which is attached as Exhibit 7.4.Neither Party shall issue any news release or other public announcement relating to this Agreement except as set forth in Exhibit 7.4, including any of its terms, or to the performance of either Party hereunder, without the prior written approval of the other Party; provided that nothing in this Agreement shall prohibit Exact from making required disclosures or filings required by Applicable Law or by the rules 47 + +Source: EXACT SCIENCES CORP, 8-K, 8/22/2018 + + + + + +and regulations of any securities exchange. Once the text or substance of any announcement has been so approved, it may be repeated without further approval. 7.5 Use of Names. Except as described in this Agreement and as may be required by Applicable Law, neither Party shall distribute or have distributed any publicity or information which bears the name of the other without the prior written approval of the other. 8. TERM AND TERMINATION. 8.1 Term. This Agreement shall be effective as of the Effective Date and shall continue in effect through December 31, 2021 and any Renewal Term (the "Term"), unless terminated earlier as set forth herein. 8.2 Renewal. This Agreement may be renewed for an additional one year term ("Renewal Term") upon mutual written agreement of the Parties. Ninety (90) days prior to the beginning of the Renewal Term, or as far in advance as practicable if the Parties agree to a Renewal Term less than ninety (90) days prior the commencement of such Renewal Term, the Parties shall agree to a Baseline Laboratory Service Revenue, Baseline M&P Expenses and Shared M&P Expenses for the Renewal Term. All other terms of this Agreement shall remain the same through the Renewal Term. 8.3 Termination for Cause. This Agreement may be terminated at any time by either Party effective: (a) upon thirty (30) days prior written notice if the other Party fails to make the required investments pursuant to Sections 3.5 or 3.6, as applicable, or pay any amount properly due under this Agreement; provided that neither Party may terminate if the failure of the other Party to meet the investment requirements under Sections 3.5 or 3.6, as applicable, is de minimis or not material; provided, further, that any such termination shall only become effective if the allegedly breaching Party fails to remedy or cure such breach or default prior to the end of such thirty (30) day period. If, prior to the end of such thirty (30) day period, the allegedly breaching Party remedies or cures such breach or default to the reasonable satisfaction of the non-breaching Party, this Agreement shall remain in full force and effect; (b) upon sixty (60) days prior written notice if the other Party materially breaches its representations, warranties or obligations under this Agreement; provided, however, that any such termination shall only become effective if the allegedly breaching Party fails to remedy or cure such breach or default prior to the end of such sixty (60) day period. If, prior to the end of such sixty (60) day period, the allegedly breaching Party remedies or cures such breach or default to the reasonable satisfaction of the non-breaching Party, this Agreement shall remain in full force and effect; 48 + +Source: EXACT SCIENCES CORP, 8-K, 8/22/2018 + + + + + +(c) immediately upon the filing or institution of bankruptcy, reorganization, liquidation or receivership proceedings, or upon an assignment of a substantial portion of the assets for the benefit of creditors by the other Party; provided, however, that in the case of any involuntary bankruptcy proceeding such right to terminate shall only become effective if the Party consents to the involuntary bankruptcy; or (d) immediately upon notice to the other Party, if such Party (the "Violating Party") is convicted of violating any Applicable Law, including applicable anti-corruption laws, bribery and corruption of public officials as well as private persons and entities, in connection with its activities under this Agreement and such violation materially adversely affects the ability of either Party to perform its obligations under this Agreement. The Violating Party shall be liable for damages or remedies as provided by law. 8.4 Termination Without Cause. After the date that is eighteen (18) months after the Effective Date, either Party may terminate this Agreement upon six (6) months prior written notice to the other Party. 8.5 Mutual Termination. This Agreement may be terminated at any time by mutual written consent of the Parties. 8.6 Termination for Change of Control. This Agreement may be terminated by either Party upon six (6) months written notice following a Change of Control of Exact; provided that such notice is given within thirty (30) days of the consummation of such Change of Control. 8.7 Royalty Upon Expiration. After the expiration of the Term or termination pursuant to Section 8.4 by either Party or Section 8.6 by Exact, based on cumulative Incremental Laboratory Services Revenue achieved during the Term or up to the termination date, Exact agrees to pay Pfizer the applicable royalty payment set forth below for twelve (12) consecutive Calendar Quarters following the expiration of the Term (the "Tail Period"); provided, however, the Tail Period shall be reduced to the number of full Calendar Quarters completed during the Term if less than twelve (12) Calendar Quarters if either Party terminates the Agreement without cause pursuant to Section 8.4 or Exact terminates as a result of a Change of Control pursuant to Section 8.6. Such royalty payment shall be payable to Pfizer within thirty (30) days of the end of each Calendar Quarter. Royalty payments shall be determined by multiplying the Laboratory Services Revenue and the applicable royalty rate from the chart below. Cumulative Incremental Laboratory Services Revenue during the Term Applicable Royalty Rate If < $200 million 0% If > $200 million and < $400 million 1% If > $400 million and < $600 million 2% If > $600 million 3% 49 + +Source: EXACT SCIENCES CORP, 8-K, 8/22/2018 + + + + + +For example, if the cumulative Incremental Laboratory Services Revenue achieved during the Term is $500 million, the applicable royalty rate is 2%. The royalty payable by Exact to Pfizer at the end of each Calendar Quarter after the Term is 2% of Laboratory Service Revenues for the applicable Calendar Quarter. 8.8 Consequences of Termination. (a) In the event of any termination under this Agreement, (i) Pfizer shall have no obligation to invest Shared M&P Expenses pursuant to Section 3.5 as of the effective date of the termination (except as set forth below), (ii) Pfizer shall cease to make any commitments under Section 3.2(d) as of the date of notice of termination, unless Exact notifies Pfizer pursuant to Section 8.8(b) and (iii) neither Party shall have any obligation to reimburse the other Party for any expenses for activities conducted after the effective date of such termination unless such expenses were incurred prior to termination. Notwithstanding the above, Exact agrees to pay any financial commitment made by Pfizer pursuant to Section 3.2(d) and Exhibit 3.2(d) to Third Parties following the effective date of termination; provided that such amounts conform with the then-current Annual Marketing Plan, including the budget. (b) Exact shall use commercially reasonable efforts to provide six (6) month notice prior to the expiry of the Term, or in the case of termination by Pfizer under Section 8.4, within the applicable notice period in advance of the effective date of such termination, that Exact intends for Pfizer to continue providing Advertising services for the Product pursuant to Section 3.2(d). Thereafter, the Parties will use good faith efforts to agree to the Advertising services that will be provided by Pfizer during the Tail Period in accordance with Section 3.2(d) and Exhibit 8.8(b). For clarity, Pfizer's obligation to provide Advertising services during the Tail Period is limited to the expiry of the Term or termination by Pfizer pursuant to Section 8.4, or termination by Exact pursuant to Section 8.3. (c) In the event Exact terminates this Agreement for cause pursuant to Section 8.3 or Pfizer terminates this Agreement without cause pursuant to Section 8.4, Exact shall not be obligated to pay Pfizer a supplemental Promotion Fee pursuant to Section 4.2(c) for the Calendar Year, or any portion of such Calendar Year in which such termination occurs. 8.9 Survival of Certain Obligations. Expiration or termination of the Agreement shall not relieve the Parties of any obligation accruing before such expiration or termination, and the provisions of Sections 1 (Definitions), 2.5 (Alliance Managers), 3.2(d) (Advertising), 3.2(e)(iii) (Return of Training Materials), 3.2(j) (Customer Service Activities; Safety Reporting), 4.4 (Taxes and Withholding); 4.7 (Maintenance of Records; Audits), 6 (Indemnification; Limitation of Liability; Insurance), 7 (Confidentiality; Publicity); 8 (Term and Termination) and 9 (Miscellaneous) inclusive, shall survive the expiration of the Agreement. Any expiration or early termination of this Agreement shall be without prejudice to the 50 + +Source: EXACT SCIENCES CORP, 8-K, 8/22/2018 + + + + + +rights of either Party against the other accrued or accruing under this Agreement before termination. 9. MISCELLANEOUS. 9.1 Interpretation. Except where the context expressly requires otherwise, (a) the use of any gender herein will be deemed to encompass references to either or both genders, and the use of the singular will be deemed to include the plural (and vice versa), (b) the words "include", "includes" and "including" will be deemed to be followed by the phrase "without limitation", (c) the word "will" will be construed to have the same meaning and effect as the word "shall", (d) any reference herein to any Person will be construed to include the Person's successors and assigns, (e) the words "herein", "hereof" and "hereunder", and words of similar import, will be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (f) all references herein to Sections or Exhibits will be construed to refer to Sections or Exhibits of this Agreement, and references to this Agreement include all Exhibits hereto, (g) the word "notice" means notice in writing (whether or not specifically stated) and will include notices, consents, approvals and other written communications contemplated under this Agreement, (h) provisions that require a Party, the Parties or any committee hereunder to "agree," "consent" or "approve" or the like will require that such agreement, consent or approval be specific and in writing, whether by written agreement, letter, approved minutes or otherwise (but excluding text and instant messaging), (i) references to any specific law, rule or regulation, or article, section or other division thereof, will be deemed to include any amendments thereto or any replacement or successor law, rule or regulation thereof, and (j) the term "or" will be interpreted in the inclusive sense commonly associated with the term "and/or." 9.2 Assignment. This Agreement may not be assigned or otherwise transferred, nor may any right or obligation hereunder be assigned or transferred, by either Party without the prior written consent of the other Party. Notwithstanding the foregoing, either Party may, without consent of the other Party, assign this Agreement and its rights and obligations hereunder in whole or in part to an Affiliate of such Party, or in whole to its successor in interest in connection with the sale of all or substantially all of its stock or its assets to which this Agreement relates, or in connection with a merger, acquisition or similar transaction. Any attempted assignment not in accordance with the foregoing shall be null and void and of no legal effect. Any permitted assignee shall assume all assigned obligations of its assignor under this Agreement. The terms and conditions of this Agreement shall be binding upon, and shall inure to the benefit of, the Parties and their respected successors and permitted assigns. 9.3 Further Actions. Each Party agrees to execute, acknowledge and deliver such further instruments, and to do all such other acts, as may be necessary or appropriate in order to carry out the purposes and intent of the Agreement. 9.4 Force Majeure. Each Party will be excused from the performance of its obligations under this Agreement to the extent that such performance is prevented by force 51 + +Source: EXACT SCIENCES CORP, 8-K, 8/22/2018 + + + + + +majeure (defined below) and the nonperforming Party promptly provides notice of the prevention to the other Party. Such excuse will be continued so long as the condition constituting force majeure continues and the nonperforming Party takes commercially reasonable efforts to remove the condition; provided that if any delay in performance due to force majeure continues for a period of six (6) months or more, then the other Party will have the right to terminate this Agreement immediately upon written notice. For purposes of this Agreement, "force majeure" will include conditions beyond the control of the Parties, including an act of God, voluntary or involuntary compliance with any regulation, law or order of any government, war, act of terror, civil commotion, labor strike or lock-out, epidemic, failure or default of public utilities or common carriers, destruction of production facilities or materials by fire, earthquake, storm or like catastrophe. 9.5 Notices. All notices and other communications required or permitted hereunder (including any notice of force majeure, breach, termination, change of address, etc.) shall be in writing and will be deemed given (a) upon receipt if delivered personally or by facsimile transmission (receipt verified), (b) five (5) days after being deposited in the mail if mailed by registered or certified mail (return receipt requested) postage prepaid or (c) on the next Business Day if sent by overnight delivery using a nationally recognized express courier service and specifying next Business Day delivery (receipt verified), and will be sent to the Parties at the following addresses or facsimile numbers, as applicable, (or at such other address or facsimile number for a Party as will be specified by like notice; provided, however, that notices of a change of address will be effective only upon receipt thereof): All correspondence to Pfizer shall be addressed as follows: Pfizer Inc. 235 East 42nd Street New York, New York 10017 Attn: General Counsel Fax: (212) 309-0874 With a copy to: Pfizer Inc. 235 East 42 Street New York, New York 10017 Attn: Regional President, North America, Internal Medicine And Pfizer Inc. 235 East 42 Street New York, New York 10017 Attn: Chief Counsel, Internal Medicine All correspondence to Exact shall be addressed as follows: 52 + +nd + +nd + +Source: EXACT SCIENCES CORP, 8-K, 8/22/2018 + + + + + +Exact Sciences Corporation 441 Charmany Drive Madison, Wisconsin 53719 Attn: General Counsel Fax: (608) 284-5701 With a copy to: Exact Sciences Corporation 441 Charmany Drive Madison, Wisconsin 53719 Attn: CEO 9.6 Amendment. No amendment, modification or supplement of any provision of this Agreement shall be valid or effective unless made in a writing signed by a duly authorized officer of each Party and delivered to each of the Parties. 9.7 Waiver. No provision of the Agreement shall be waived by any act, omission or knowledge of a Party or its agents or employees except by an instrument in writing expressly waiving such provision and signed by a duly authorized officer of the waiving Party. The failure of either Party to require the performance of any term of this Agreement, or the waiver of either Party of any breach of this Agreement, shall not prevent a subsequent exercise or enforcement of such terms or be deemed a waiver of any subsequent breach of the same or any other term of this Agreement. 9.8 Severability. If any clause or portion thereof in this Agreement is for any reason held to be invalid, illegal or unenforceable, the same shall not affect any other portion of this Agreement, as it is the intent of the Parties that this Agreement shall be construed in such fashion as to maintain its existence, validity and enforceability to the greatest extent possible. In any such event, this Agreement shall be construed as if such clause of portion thereof had never been contained in this Agreement, and there shall be deemed substituted therefor such provision as will most nearly carry out the intent of the Parties as expressed in this Agreement to the fullest extent permitted by Applicable Law. 9.9 Descriptive Headings. The descriptive headings of this Agreement are for convenience and reference purposes only, and shall be of no force or effect in construing or interpreting any of the provisions of this Agreement. 9.10 Governing Law. This Agreement shall be governed by and interpreted in accordance with the substantive laws of the State of New York, without regard to conflict of law principles thereof. 9.11 Dispute Resolution. The Parties recognize that a bona fide dispute as to certain matters may from time to time arise during the term of this Agreement that relate to any Party's rights or obligations hereunder. In the event of the occurrence of any dispute arising out of or relating to this Agreement (other than a Disputed JSC 53 + +Source: EXACT SCIENCES CORP, 8-K, 8/22/2018 + + + + + +Matter, which shall be resolved as provided in Section 2.1, a Disputed JOC Matter, which shall be resolved as provided in Section 2.2 and Disputed JRC Matter, which shall be resolved as provided in Section 2.3), including any question regarding its existence, validity or termination (a "Dispute"), any Party may, by written notice to the other, have such Dispute referred to their respective Senior Officer or such Senior Officer's designee, for attempted resolution by good faith negotiations within thirty (30) days after such notice is received. Any negotiations regarding a Dispute are confidential and shall be treated as compromise and settlement negotiations for purposes of the U.S. Federal Rules of Evidence and any similar rules of evidence. 9.12 Entire Agreement of the Parties. This Agreement constitutes and contains the complete, final and exclusive understanding and agreement of the Parties and cancels and supersedes any and all prior negotiations, correspondence, understandings and agreements, whether oral or written, among the Parties respecting the subject matter hereof and thereof. 9.13 Independent Contractors. Both Parties are independent contractors under this Agreement. Nothing herein contained shall be deemed to create an employment, agency, joint venture or partnership relationship between the Parties hereto or any of their agents or employees, or any other legal arrangement that would impose liability upon one Party for the act or failure to act of the other Party. Neither Party shall have any express or implied power to enter into any contracts or commitments or to incur any liabilities in the name of, or on behalf of, the other Party, or to bind the other Party in any respect whatsoever. Neither Party shall have any responsibility for the hiring, termination, compensation or benefits of the other Party's employees. 9.14 No Legal Advice. Each Party acknowledges and agrees that the other Party and the other Party's attorneys are not representing such Party during the course of or in connection with any activities under this Agreement and that, unless otherwise expressly agreed in writing by the other Party's attorneys, any opinions expressed by the other Party or the other Party's attorneys with respect to any marketing or promotional materials or the activities of either Party under this Agreement shall not be considered to be legal advice regardless of whether or not related to a legal or regulatory matter. 9.15 Counterparts. This Agreement may be executed in two (2) counterparts, each of which will be an original and both of which will constitute together the same document. Counterparts may be signed and delivered by facsimile or digital file, each of which will be binding when received by the applicable Party. (remainder of page intentionally left blank) 54 + +Source: EXACT SCIENCES CORP, 8-K, 8/22/2018 + + + + + +IN WITNESS WHEREOF, duly authorized representatives of the Parties have duly executed this Agreement to be effective as of the Effective Date. PFIZER INC. EXACT SCIENCES CORPORATION By /s/ Michael Gladstone By /s/ Kevin Conroy Name: Michael Gladstone Name: Kevin Conroy Title: Global President, Internal Medicine Title: Chairman & Chief Executive Officer Pfizer Innovative Health Signature Page + +Source: EXACT SCIENCES CORP, 8-K, 8/22/2018 \ No newline at end of file diff --git a/full_contract_txt/FEDERATEDGOVERNMENTINCOMESECURITIESINC_04_28_2020-EX-99.SERV AGREE-SERVICES AGREEMENT.txt b/full_contract_txt/FEDERATEDGOVERNMENTINCOMESECURITIESINC_04_28_2020-EX-99.SERV AGREE-SERVICES AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..2f4968f008ca44638b1826b99afa7cc991819f2d --- /dev/null +++ b/full_contract_txt/FEDERATEDGOVERNMENTINCOMESECURITIESINC_04_28_2020-EX-99.SERV AGREE-SERVICES AGREEMENT.txt @@ -0,0 +1,101 @@ +Exhibit 28 (h) (1) (a) under Form N‐1A Exhibit 99 under item 601/REG. S‐K + +SERVICES AGREEMENT + +THIS AGREEMENT, dated and effective as of January 1, 2004 (this "Agreement") between FEDERATED INVESTMENT MANAGEMENT COMPANY, a Delaware statutory trust (the "Adviser"), and FEDERATED ADVISORY SERVICES COMPANY, a Delaware statutory trust ("FASC"), + +WITNESSETH: + +WHEREAS, the Adviser serves pursuant to advisory or subadvisory agreements ("Advisory Agreements") as investment advisor or subadvisor to investment companies registered under the Investment Company Act of 1940 (the "1940 Act") and/or separate accounts not required to be so registered (collectively, "Accounts"); and + +WHEREAS, the Adviser desires to engage FASC to provide certain services to Adviser in connection with the services to be provided by the Adviser under the Advisory Agreements; + +NOW, THEREFORE, the parties hereto, intending to be legally bound, agree as follows: + +1. Services. FASC agrees to provide to the Adviser the services indicated in Exhibit A to this Agreement (the "Services"). + +2. Fees. For its Services under this Agreement, Adviser agrees to pay FASC the Services Fees calculated and payable in accordance with Exhibit B to this Agreement. + +3. Records. FASC shall create and maintain all necessary books and records in accordance with all applicable laws, rules and regulations, including but not limited to records required by Section 31(a) of the 1940 Act and the rules thereunder, as the same may be amended from time to time, pertaining to the Services performed by it and not otherwise created and maintained by another party. Where applicable, such records shall be maintained by FASC for the periods and in the places required by Rule 31a-2 under the 1940 Act. The books and records pertaining to any Account which are in the possession of FAS shall be the property of such Account. The Account, or its owners or authorized representatives, shall have access to such books and records at all times during FASC's normal business hours. Upon reasonable request, copies of any such books and records shall be provided promptly by FASC to the Account or the Account's owners or authorized representatives. + +4. Limitation of Liability and Indemnification. + +(a) FASC shall not be responsible for any error of judgment or mistake of law or for any loss suffered by the Advisor or any Account in connection with the matters to which this Agreement relates, except a loss resulting from willful malfeasance, bad faith or gross negligence on its part in the performance of its duties or from reckless disregard by it of its obligations and duties under this Agreement. + +(b) The Adviser shall indemnify FASC and shall hold FASC harmless from and against any liability to any Account or to any other person which may incurred by or asserted against FASC for any action taken or omitted by it in performing the Services in accordance with the above standards, and any expenses (including the reasonable fees and expenses of its counsel) which may be incurred by FASC in investigating or defending itself against the assertion of any such liability. FASC shall give prompt notice to the Adviser of the assertion of any claim or liability which is reasonably likely to result in a claim for indemnification under this Section; provided that the failure to give such notice, or any delay in giving such notice, shall not lessen the obligation of the Adviser to indemnify FASC except to the extent it results in actual prejudice. The Adviser shall have the option, by notice to FASC, to assume the defense of any claim which may be the subject of indemnification hereunder. In the event such notice is given, the Adviser shall assume the defense of the claim, and FASC shall cooperate with the Adviser in such defense, subject to the obligation of the Adviser to reimburse FASC for the expenses resulting therefrom. In the event Adviser gives notice that it will assume the defense of any claim, the Adviser shall not be obligated to indemnify FASC for any further legal or other expenses incurred in investigating or defending such claim, except those incurred at the request of the Adviser or its counsel. FASC shall in no event compromise or settle any claim for which it may seek indemnification hereunder, except with the prior written consent of the Adviser or unless the Adviser fails, within 30 days after notice of the terms of such settlement, to notify FASC that it has assumed the defense of such claim and will indemnify FASC for any liability resulting therefrom. + +(c) The Adviser and FASC are each hereby expressly put on notice of the limitation of liability set forth in the Declaration of Trust of the other party. Each party agrees that the obligations of the other party pursuant to this Agreement shall be limited solely to such party and its assets, and neither party shall seek satisfaction of any such obligation from the shareholders, trustees, officers, employees or agents of the other party, or any of them. + +5. Duration and Termination. + +(a) Subject to the remaining provisions of this Section, the term of this Agreement shall begin on the effective date first above written and shall continue until terminated by mutual agreement of the parties hereto or by either party on not less than 60 days' written notice to the other party hereto. + + + + + +(b) Notwithstanding the foregoing, to the extent that the Services to be provided with respect to any Account which is registered as an investment company under the 1940 Act (herein referred to as a "registered investment company") are services referred to in the definition of "investment advisor" under Section 202(a)(11) of the Investment Company Act of 1940 (herein referred to as "investment advisory services"), then with respect to such Account, this Agreement: + +(i) shall not commence until the effective date of its approval by the board of directors or trustees ("Board") of such Account; + +(ii) shall continue from year to year thereafter, subject to the provisions for termination and all other terms and conditions hereof, only if such continuation shall be specifically approved at least annually by a majority of the Board, including a majority of the members of the Board who are not parties to this Agreement or interested persons of any such party (other than as members of the Board) cast in person at a meeting called for that purpose; + +(iii) may be terminated at any time without the payment of any penalty by the Board or by a vote of a majority of the outstanding voting securities (as defined in Section 2(a)(42) of the 1940 Act) of the Account on 60 days' written notice to the Adviser; + +(iv) shall automatically terminate in the event of (A) its assignment (as defined in the 1940 Act) or (B) termination of the Advisory Agreement for any reason whatsoever. + +6. Amendment. This Agreement may be amended at any time by mutual written agreement of the parties hereto; provided, however, that no Amendment to this Agreement shall be effective with respect to any investment advisory services to be provided to any Account which is registered investment company unless, to the extent required by Section 15(a)(2) of the 1940 Act, such amendment has been approved both by the vote of a majority of the Board of the Account, including a majority of the members of the Board who are not parties to this Agreement or interested persons of any such party (other than as members of the Board), cast in person at a meeting called for that purpose and, where required by Section 15(a)(2) of the 1940 Act, on behalf of the Account by a majority of the outstanding voting securities of such Account as defined in Section 2(a)(42) of the 1940 Act. + +7. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania. + +8. Section Headings; Counterparts. The underlined Section headings in this Agreement are for convenience of reference only and shall not affect its construction or interpretation. This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original copy of this Agreement and all of which, when taken together, will be deemed to constitute one and the same agreement. + +IN WITNESS WHEREOF, the parties hereto, through their duly authorized officers, have executed this Agreement as of the effective date first above written. + +FEDERATED INVESTMENT MANAGEMENT COMPANY + +By: /s/ G. Andrew Bonnewell Name: G. Andrew Bonnewell Title: Vice President + +FEDERATED ADVISORY SERVICES COMPANY + +By: /s/ Keith M. Schappert Name: Keith M. Schappert Title: President + + + + + +EXHIBIT A + +DESCRIPTION OF SERVICES + +The following are the categories of Services to be provided by FASC to the Adviser pursuant to the Agreement: + +Performance attribution. Performance attribution enables portfolio managers and senior management to identify the specific drivers behind each portfolio's performance. Performance attribution analysts are responsible for data integrity, creation of attribution reports and maintenance of attribution models. + +Administration and Risk Management. Employees of Federated Advisory Services Company provide support to portfolio managers and other employees of affiliated advisers. Such services may include development of risk management programs, production of portfolio and compliance reports for clients and/or fund Boards, completion of required broker and custody documentation, development and documentation of operational procedures, coordination of proxy voting activities, on-site support of hardware and software, etc. + +Categories 1 and 2 above shall not be treated as "investment advisory services" for purposes of Section 5(b) of the Agreement. + + + + + +EXHIBIT B + +CALCULATION AND PAYMENT OF SERVICES FEES + +For each Category of Services referenced in Exhibit A, Adviser shall pay FASC a Services Fee, payable monthly in arrears, determined according to the following formula: + +Services Fee = Cost of Services x Adviser's Assets under Management Total Assets Under Management x (1 + Applicable Margin) + +Where: + +"Cost of Services" is FASC's total Operating Costs incurred in providing the applicable Category of Services during the month to all investment advisers for which FASC provides that Category of Services. + +"Adviser's Assets under Management" is the total average assets under management for the month for all Accounts or portions thereof for which the Adviser acts as investment adviser or subadvisor and which utilize the Category of Services. + +"Total Assets under Management" is the total average assets under management for the month for all Accounts or portions thereof for which all investment advisers (including the Adviser) to which FASC provides that Category of Services act as investment adviser or subadviser and which utilize the Category of Services. + +"Applicable Margin" is 0.10. + +"Operating Costs" means all operating expenses and non-operating expenses of FASC for the cost center(s) providing the applicable Category of Services. \ No newline at end of file diff --git a/full_contract_txt/FEDERATEDGOVERNMENTINCOMESECURITIESINC_04_28_2020-EX-99.SERV AGREE-SERVICES AGREEMENT_AMENDMENT.txt b/full_contract_txt/FEDERATEDGOVERNMENTINCOMESECURITIESINC_04_28_2020-EX-99.SERV AGREE-SERVICES AGREEMENT_AMENDMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..1a2ec8abab18f13a950721b6abe1cd001346dadd --- /dev/null +++ b/full_contract_txt/FEDERATEDGOVERNMENTINCOMESECURITIESINC_04_28_2020-EX-99.SERV AGREE-SERVICES AGREEMENT_AMENDMENT.txt @@ -0,0 +1,29 @@ +AMENDMENT TO SERVICES AGREEMENT + +This AMENDMENT TO SERVICES AGREEMENT, dated and effective as of March 30, 2009 (this "Amendment"), is made between FEDERATED INVESTMENT MANAGEMENT COMPANY, a Delaware statutory trust (the "Adviser"), and FEDERATED ADVISORY SERVICES COMPANY, a Delaware statutory trust ("FASC"). Capitalized terms used, but not defined, in this Amendment have the meanings given to such terms in the Services Agreement (as defined below). + +RECITALS + +WHEREAS, the Adviser and FASC have entered into that certain Services Agreement dated as of January 1, 2004 (as amended, the "Services Agreement"), pursuant to which FASC provides certain performance attribution, administration and risk management, equity trading and transaction settlement, fundamental analysis, and quantitative analysis services to Adviser in connection with Adviser providing investment advisory or sub-advisory services to investment companies registered under the Investment Company Act of 1940 ("1940 Act") and/or separate accounts not required to be so registered (collectively, "Accounts"); and + +WHEREAS, the Adviser and FASC desire to amend the Services indicated in Exhibit A to the Services Agreement, solely with respect to Accounts that are not investment companies registered under the 1940 Act, to provide that, as part of the administration and risk management services provided by FASC, FASC may provide certain coordination of client portfolios and related fixed income trade execution implementation and administration services to Adviser when Adviser is acting as adviser or sub-adviser with respect to such Accounts. + +NOW, THEREFORE, the parties hereto, intending to be legally bound, agree as follows: + +1. Amendment to Exhibit A to Services Agreement. Solely with respect to Accounts that are not investment companies registered under the 1940 Act, the section of Exhibit A to the Services Agreement entitled "Administration and Risk Management" shall be, and hereby is, deleted in its entirety and replaced with the following: + +"2. Administration and Risk Management. Employees of Federated Advisory Services Company provide support to portfolio managers and other employees of affiliated advisers. Such services may include development of risk management programs, production of portfolio and compliance reports for clients and/or fund Boards, coordination of client portfolios and related fixed income trade execution implementation and administration, completion of required broker and custody documentation, development and documentation of operational procedures, coordination of proxy voting activities, on-site support of hardware and software, etc." + +2. Miscellaneous. This Amendment shall be effective as of the date first above written upon its execution and delivery by each of the parties hereto. The Services Agreement, as amended by this Amendment with respect to Accounts that are not investment companies registered under the 1940 Act, shall remain in full force and effect. The Services Agreement also shall remain in full force and effect without amendment with respect to Accounts that are investment companies under the 1940 Act. This Amendment shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania. This Amendment may be executed in one or more counterparts, each of which will be deemed to be an original copy of this Amendment and all of which, when taken together, will be deemed to constitute one and the same agreement. + +IN WITNESS WHEREOF, the parties hereto, through their duly authorized officers, have executed this Amendment as of the date first above written. + +FEDERATED INVESTMENT MANAGEMENT FEDERATED ADVISORY SERVICES COMPANY + +COMPANY + +By: /s/ John B. Fisher By: /s/ J. Christopher Donahue + +Name: John B. Fisher Name: J. Christopher Donahue + +Title: President Title: Chairman \ No newline at end of file diff --git a/full_contract_txt/FEDERATEDGOVERNMENTINCOMESECURITIESINC_04_28_2020-EX-99.SERV AGREE-SERVICES AGREEMENT_POWEROF.txt b/full_contract_txt/FEDERATEDGOVERNMENTINCOMESECURITIESINC_04_28_2020-EX-99.SERV AGREE-SERVICES AGREEMENT_POWEROF.txt new file mode 100644 index 0000000000000000000000000000000000000000..ad635715e84ad895eaffec8c5968b4cb79a0670f --- /dev/null +++ b/full_contract_txt/FEDERATEDGOVERNMENTINCOMESECURITIESINC_04_28_2020-EX-99.SERV AGREE-SERVICES AGREEMENT_POWEROF.txt @@ -0,0 +1,51 @@ +LIMITED POWER OF ATTORNEY + +KNOW ALL MEN BY THESE PRESENTS, dated as of January 1, 2004, that FEDERATED INVESTMENT MANAGEMENT COMPANY, a statutory trust duly organized under the laws of the State of Delaware (the "Adviser"), does hereby nominate, constitute and appoint FEDERATED ADVISORY SERVICES COMPANY, a statutory trust duly organized under the laws of the State of Delaware ("FASC"), to act hereunder as the true and lawful agent and attorney-in-fact of the Adviser, acting on behalf of each of the funds or accounts for which Adviser acts as investment adviser or subadviser shown on Schedule 1 attached hereto and incorporated by reference herein (each such fund or account being hereinafter referred to as a "Fund" and collectively as the "Funds"), for the specific purpose of executing and delivering all such agreements, instruments, contracts, assignments, bond powers, stock powers, transfer instructions, receipts, waivers, consents and other documents, and performing all such acts, as Adviser, or FASC acting as agent for the Adviser pursuant to the Services Agreement dated as of January 1, 2004 between the Adviser and FASC (such agreement, as may be amended, supplemented or otherwise modified from time to time is hereinafter referred to as the "Services Agreement"), may deem necessary or reasonably desirable, related to the acquisition, disposition and/or reinvestment of the funds and assets of a Fund in accordance with Adviser's supervision of the investment, sale and reinvestment of the funds and assets of each Fund pursuant to the authority granted to the Adviser as investment adviser or subadviser of each Fund under the Adviser's investment advisory or subadvisory contract for such Fund (such investment advisory or subadvisory contract, as may be amended, supplemented or otherwise modified from time to time is hereinafter referred to as the "Investment Advisory Contract"). + +The Adviser hereby ratifies and confirms as good and effectual, at law or in equity, all that FASC, and its officers and employees, may do by virtue hereof. However, despite the above provisions, nothing herein shall be construed as imposing a duty on FASC to act or assume responsibility for any matters referred to above or other matters even though FASC may have power or authority hereunder to do so. Nothing in this Limited Power of Attorney shall be construed (i) to be an amendment or modifications of, or supplement to, the Investment Advisory Contract, (ii) to amend, modify, limit or denigrate any duties, obligations or liabilities of the Adviser under the terms of the Investment Advisory Contract or (iii) exonerate, relieve or release the Adviser from any losses, obligations, penalties, actions, judgments and suits and other costs, expenses and disbursements of any kind or nature whatsoever which may be imposed on, incurred by or asserted against the Adviser (x) under the terms of the Investment Advisory Contract or (y) at law, or in equity, for the performance of its duties as the investment adviser or subadviser of any of the Funds. + +The Adviser hereby agrees to indemnify and save harmless FASC and its trustees, officers and employees (each of the foregoing an "Indemnified Party" and collectively the "Indemnified Parties") against and from any and all losses, obligations, penalties, actions, judgments and suits and other costs, expenses and disbursements of any kind or nature whatsoever which may be imposed on, incurred by or asserted against an Indemnified Party, other than as a consequence of gross negligence or willful misconduct on the part of an Indemnified Party, arising out of or in connection with this Limited Power of Attorney or any other agreement, instrument or document executed in connection with the exercise of the authority granted to FASC herein to act on behalf of the Adviser, including without limitation the reasonable costs, expenses and disbursements in connection with defending such Indemnified Party against any claim or liability related to the exercise or performance of any of FASC's powers or duties under this Limited Power of Attorney or any of the other agreements, instruments or documents executed in connection with the exercise of the authority granted to FASC herein to act on behalf of the Adviser, or the taking of any action under or in connection with any of the foregoing. The obligations of the Adviser under this paragraph shall survive the termination of this Limited Power of Attorney with respect to actions taken by FASC on behalf of the Adviser during the term of this Limited Power of Attorney. + +Any person, partnership, corporation or other legal entity dealing with FASC in its capacity as attorney-in-fact hereunder for the Adviser on behalf of any Fund is hereby expressly put on notice that FASC is acting solely in the capacity as an agent of the Adviser as agent for the Fund and that any such person, partnership, corporation or other legal entity must look solely to the Fund in question for enforcement of any claim against the Fund, as FASC assumes no personal liability whatsoever for obligations of the Fund entered into by FASC in its capacity as attorney-in-fact for the Adviser. + +Each person, partnership, corporation or other legal entity which deals with a Fund through FASC in its capacity as agent and attorney-in-fact of the Adviser, is hereby expressly put on notice (i) that all persons or entities dealing with the Fund must look solely to the assets of the Fund on whose behalf FASC is acting pursuant to its powers hereunder for enforcement of any claim against the Fund, as the trustees, officers and/or agents of such Fund, the shareholders of the various classes of shares of the Fund, and the other Funds of the trust or corporation of which a Fund may be a series, assume no personal liability whatsoever for obligations entered into on behalf of such Fund, and (ii) that the rights, liabilities and obligations of any one Fund are separate and distinct from those of any other Fund. + +The execution of this Limited Power of Attorney by the Adviser acting on behalf of the several Funds shall not be deemed to evidence the existence of any express or implied joint undertaking or appointment by and among any or all of the Funds. Liability for or recourse under or upon any undertaking of FASC pursuant to the power or authority granted to FASC under this Limited Power of Attorney under any rule of law, statute or constitution or by the enforcement of any assessment or penalty or by legal or equitable proceedings or otherwise shall be limited only to the assets of the Fund on whose behalf FASC was acting pursuant to the authority granted hereunder. + +The Adviser hereby agrees that no person, partnership, corporation or other legal entity dealing with FASC shall be bound to inquire into FASC's power and authority hereunder and any such person, partnership, corporation or other legal entity shall be fully protected in relying on such power or authority unless such person, partnership, corporation or other legal entity has received prior + + + + + +written notice from the Adviser that this Limited Power of Attorney has been revoked. This Limited Power of Attorney shall be revoked and terminated automatically upon the cancellation or termination of the Services Agreement or as to any Fund upon the cancellation or termination of the Adviser's Investment Advisory Contract for such Fund. Except as provided in the immediately preceding sentence, the powers and authorities herein granted may be revoked or terminated by the Adviser at any time provided that no such revocation or termination shall be effective until FASC has received actual notice of such revocation or termination in writing from the Adviser. + +This Limited Power of Attorney constitutes the entire agreement between the Adviser and FASC and may be changed only by a writing signed by both of them, except that the Adviser may at any time change the list of Funds to which this Limited Power of Attorney relates by executing and delivering to FASC a later dated version of Schedule 1. This Limited Power of Attorney shall bind and benefit the respective successors and assigns of the Adviser and FASC; provided, however, that FASC shall have no power or authority hereunder to appoint a successor or substitute attorney in fact for the Adviser or any Fund. + +This Limited Power of Attorney shall be governed and construed in accordance with the laws of the Commonwealth of Pennsylvania without reference to principles of conflicts of laws. If any provision hereof, or any power or authority conferred upon FASC herein, would be invalid or unexercisable under applicable law, then such provision, power or authority shall be deemed modified to the extent necessary to render it valid or exercisable while most nearly preserving its original intent, and no provision hereof, or power or authority conferred upon FASC herein, shall be affected by the invalidity or the non-exercisability of another provision hereof, or of another power or authority conferred herein. + +This Limited Power of Attorney may be executed in as many identical counterparts as may be convenient and by the different parties hereto on separate counterparts. This Limited Power of Attorney shall become binding on the Adviser when the Adviser shall have executed at least one counterpart and FASC shall have accepted its appointment by executing this Limited Power of Attorney. Immediately after the execution of a counterpart original of this Limited Power of Attorney and solely for the convenience of the parties hereto, the Adviser and FASC will execute sufficient counterparts so that FASC shall have a counterpart executed by it and the Adviser, and the Adviser shall have a counterpart executed by the Adviser and FASC. Each counterpart shall be deemed an original and all such taken together shall constitute but one and the same instrument, and it shall not be necessary in making proof of this Limited Power of Attorney to produce or account for more than one such counterpart. + + + + + +IN WITNESS WHEREOF, the Adviser has caused this Limited Power of Attorney to be executed by its duly authorized officer as of the date first written above. + +FEDERATED INVESTMENT MANAGEMENT COMPANY By: /s/ Keith M. Schappert Name Keith M. Schappert Title: President + +Accepted and agreed to this January 1, 2004 FEDERATED ADVISORY SERVICES COMPANY By: /s/ G. Andrew Bonnewell Name: G. Andrew Bonnewell Title: Vice President + + + + + +Schedule 1 to Limited Power of Attorney dated as of October 1, 2016 revised March 1, 2020 by FEDERATED INVESTMENT MANAGEMENT COMPANY (the Adviser "), acting on behalf of each of the funds and accounts listed below, and appointing FEDERATED ADVISORY SERVICES COMPANY the attorney-in-fact of the Adviser List of Funds and Accounts Emerging Markets Core Fund Federated Adjustable Rate Securities Fund Federated Bank Loan Core Fund Federated Bond Fund Federated California Municipal Cash Trust Federated Capital Reserves Fund Federated Corporate Bond Strategy Portfolio Federated Emerging Market Debt Fund Federated Equity Advantage Fund Federated Fixed Income Opportunity Fund Federated Floating Rate Strategic Income Fund Federated Fund for U.S. Government Securities Federated Hermes Fund for U.S. Government Securities II Federated Georgia Municipal Cash Trust Federated Government Income Securities, Inc. Federated Government Income Trust Federated Government Obligations Fund Federated Government Obligations Tax-Managed Fund Federated Government Reserves Fund Federated Government Ultrashort Duration Fund Federated Hermes Absolute Return Credit Fund Federated Hermes SDG Engagement High Yield Credit Fund Federated Hermes Unconstrained Credit Fund Federated Hermes High Income Bond Fund II Federated High Income Bond Fund, Inc. Federated High Yield Strategy Portfolio Federated High Yield Trust Federated Institutional High Yield Bond Fund Federated Intermediate Corporate Bond Fund Federated Intermediate Municipal Trust Federated International Bond Fund Federated International Bond Strategy Portfolio Federated Liberty U.S. Government Money Market Trust Federated Managed Risk Fund Federated Hermes Managed Volatility Fund II Federated Massachusetts Municipal Cash Trust Federated Michigan Intermediate Municipal Trust Federated Institutional Money Market Management Federated Mortgage Core Portfolio Federated Select Total Return Bond Fund (formerly Federated Mortgage Fund) Federated Mortgage Strategy Portfolio Federated Municipal Cash Series Federated Municipal High Yield Advantage Fund Federated Municipal Obligations Fund Federated Municipal Securities Fund, Inc. Federated Municipal Ultrashort Fund Federated New York Municipal Cash Trust Federated Ohio Municipal Income Fund Federated Pennsylvania Municipal Cash Trust Federated Pennsylvania Municipal Income Fund Federated Premier Intermediate Municipal Income Fund Federated Premier Municipal Income Fund Federated Prime Cash Obligations Fund Federated Prime Cash Series Federated Hermes Prime Money Fund II Federated Institutional Prime Obligations Fund + + + + + +Federated Institutional Prime Value Obligations Fund Federated Project and Trade Finance Core Fund Federated Hermes Quality Bond Fund II Federated Real Return Bond Fund Federated Short-Intermediate Duration Municipal Trust Federated Short-Intermediate Total Return Bond Fund Federated Short-Term Income Fund Federated Strategic Income Fund Federated Tax-Free Obligations Fund Federated Institutional Tax-Free Cash Trust Federated Total Return Bond Fund Federated Total Return Government Bond Fund Federated Trade Finance Income Fund Federated Treasury Cash Series Federated Treasury Obligations Fund Federated Trust for U.S. Treasury Obligations Federated U.S. Government Securities Fund: 1-3 Years Federated U.S. Government Securities Fund: 2-5 Years Federated U.S. Treasury Cash Reserves Federated Ultrashort Bond Fund Federated Unconstrained Bond Fund Federated Virginia Municipal Cash Trust High Yield Bond Portfolio Short Fixed Income Fund + +AS - Federated High Yield Bond Fund AS - Federated High Yield Portfolio BB&T Funds Prime Money Market Chesapeake Investors Gartmore- Federated GVIT High Income Great West- Maxim Federated Bond Fund IDEX Federated Tax Exempt ONatl - High Income Bond Portfolio SA - Corporate Bond Portfolio Trav - High Yield Portfolio \ No newline at end of file diff --git a/full_contract_txt/FEDERATEDGOVERNMENTINCOMESECURITIESINC_04_28_2020-EX-99.SERV AGREE-SERVICES AGREEMENT_SECONDAMENDMENT.txt b/full_contract_txt/FEDERATEDGOVERNMENTINCOMESECURITIESINC_04_28_2020-EX-99.SERV AGREE-SERVICES AGREEMENT_SECONDAMENDMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..429e5f623c80f9beebb1429906d4f2907db2402b --- /dev/null +++ b/full_contract_txt/FEDERATEDGOVERNMENTINCOMESECURITIESINC_04_28_2020-EX-99.SERV AGREE-SERVICES AGREEMENT_SECONDAMENDMENT.txt @@ -0,0 +1 @@ +SECOND AMENDMENT TO SERVICES AGREEMENT This SECOND AMENDMENT TO SERVICES AGREEMENT, dated and effective as of March 1, 2016, (this "Second Amendment"), is made between FEDERATED INVESTMENT MANAGEMENT COMPANY, a Delaware statutory trust (the "Adviser"), and FEDERATED ADVISORY SERVICES COMPANY, a Delaware statutory trust ("FASC"). Capitalized terms used, but not defined, in this Amendment have the meanings given to such terms in the Services Agreement (as defined below). RECITALS WHEREAS, the Adviser and FASC have entered into that certain Services Agreement dated as of January 1, 2004 (as amended, the "Services Agreement"), pursuant to which FASC provides certain performance attribution and administration and risk management services to Adviser in connection with Adviser providing investment advisory or sub-advisory services to investment companies registered under the Investment Company Act of 1940 ("1940 Act") and/or separate accounts not required to be so registered (collectively, "Accounts"); WHEREAS, the Adviser and FASC have entered into the Amendment to Services Agreement dated as of March 30, 2009 (the "Amendment"), pursuant to which the Services indicated in Exhibit A to the Services Agreement were amended solely with respect to Accounts that are not investment companies registered under the 1940 Act, to provide that, as part of the administration and risk management services provided by FASC, FASC may provide certain coordination of client portfolios and related fixed income trade execution implementation and administration services to Adviser when Adviser is acting as adviser or sub-adviser with respect to such Accounts; and WHEREAS, the Adviser and FASC desire to amend the Services indicated in Exhibit A to the Services Agreement, as amended, solely with respect to Accounts for which the Adviser trades in equity securities, equity derivatives and other related equity investments as part of the investment strategy for the Account, to provide that FASC may provide equity trading and transaction settlement, fundamental analysis and quantitative analysis services to Adviser when Adviser is acting as adviser or sub-adviser with respect to such Accounts. NOW, THEREFORE, the parties hereto, intending to be legally bound, agree as follows: 1. Second Amendment to Exhibit A to Services Agreement. Exhibit A to the Services Agreement shall be, and here by is, supplemented with the following: "3. Equity Trading and Transaction Settlement. The equity trading desks execute buy and sell order based on instructions provided by affiliated advisers. The trading staff either places orders electronically or contacts brokers to place orders, find liquidity and seek price levels. Upon completion of a transaction, the transaction settlement group works with the broker and the account custodian to ensure timely and accurate exchange of securities and monies. 4. Fundamental Analysis. The equity investment analysts provide independent research and analysis of specific companies within a sector. Typically, analysis includes review of published reports, interviews of company management, on-site observation of company operations, and the use of various financial models. In addition, analysts read trade journals, attend industry conferences, and focus on trends within the sector and industry. Based on this proprietary analysis, the analyst makes buy, sell or hold recommendations to the Adviser. 5. Quantitative Analysis. Quantitative analysts develop and apply financial models designed to enable equity portfolio managers and fundamental analysts to screen potential and current investments, assess relative risk and enhance performance relative to benchmarks and peers. To the extent that such services are to be provided with respect to any Account which is a registered investment company, Categories 3, 4 and 5 above shall be treated as "investment advisory services" for purposes of Section 5(b) of the Agreement." 2. Miscellaneous. This Second Amendment shall be effective as of the date first above written upon its execution and delivery by each of the parties hereto. The Services Agreement, as amended by the Amendment and this Second Amendment with respect to Accounts for which the Adviser trades in equity securities, equity derivatives and other related equity investments as part of the investment strategy for the Account, shall remain in full force and effect. The Services Agreement, as amended by the Amendment, also shall remain in full force and effect without this Second Amendment with respect to Accounts for which the Adviser does not trade in equity securities, equity derivatives and other related equity investments as part of the investment strategy for the Account. This Second Amendment shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania. This Second Amendment may be executed in one or more counterparts, each of which will be deemed to be an original copy of this Second Amendment and all of which, when taken together, will be deemed to constitute one and the same agreement. IN WITNESS WHEREOF, the parties hereto, through their duly authorized officers, have executed this Second Amendment as of the date first above written. FEDERATED INVESTMENT MANAGEMENT FEDERATED ADVISORY SERVICES COMPANY COMPANY By: /s/ John B. Fisher By: /s/ J. Christopher Donahue Name: John B. Fisher Name: J. Christopher Donahue Title: President Title: Chairman \ No newline at end of file diff --git a/full_contract_txt/FIBROGENINC_10_01_2014-EX-10.11-COLLABORATION AGREEMENT.txt b/full_contract_txt/FIBROGENINC_10_01_2014-EX-10.11-COLLABORATION AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..2a964c3b5dd8e8a5f063097635fa97cfa396c264 --- /dev/null +++ b/full_contract_txt/FIBROGENINC_10_01_2014-EX-10.11-COLLABORATION AGREEMENT.txt @@ -0,0 +1,1043 @@ +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Exhibit 10.11 COLLABORATION AGREEMENT + +BY AND BETWEEN + +ASTELLAS PHARMA INC. + +AND + +FIBROGEN, INC. June 1, 2005 + + + + + +CONFIDENTIAL EXECUTION COPY TABLE OF CONTENTS ARTICLE 1 DEFINITIONS 1 + +1.1 "Actions" 1 1.2 "Affiliate" 1 1.3 "Astellas Indemnitees" 1 1.4 "Astellas Territory" 1 1.5 "Authorized Designee" 1 1.6 "Bridging Strategy" 1 1.7 "Bulk Product" 2 1.8 "Commercialize" 2 1.9 "Completion" 2 1.10 "Confidential Information" 2 1.11 "Control" or "Controlled" 2 1.12 "Controlling Party" 2 1.13 "Data" 2 1.14 "Delivery" or "Delivered" 2 1.15 "Development Plan" 2 1.16 "Development Program" 2 1.17 "Enforcement Action" 2 1.18 "Event" 2 1.19 "Expanded Field" 2 1.20 "Expenses" 2 1.21 "FDA" 2 1.22 "FG Acquired Patents" 3 1.23 "FG Development Program" 3 1.24 "FG Indemnitees" 3 1.25 "FG Technology" 3 1.26 "FG Patents" 3 1.27 "FG Technical Information" 3 1.28 "FG Territory" 3 1.29 "Field" 4 1.30 "First Commercial Sale" 4 1.31 "Force Majeure Event" 4 1.32 "Fully Burdened Costs" 4 1.33 "Future Third Party Intellectual Property" 4 1.34 "GMP Guidelines" 4 1.35 "[ * ]" 4 1.36 "[ * ] Percentage" 5 1.37 "HIF" 5 -i- + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +TABLE OF CONTENTS (continued) Page 1.38 "IND" 5 1.39 "Indemnitee" 5 1.40 "Indemnitor" 5 1.41 "Indications" 5 1.42 "Initial Development Plan" 5 1.43 "Initiate" or Initiation" 5 1.44 "Inspected Party" and "Inspecting Party" 5 1.45 "Joint Development Committee" or "JDC" 5 1.46 "Lead Compound" 5 1.47 "Listed Price" 5 1.48 "Litigation Agreement" 5 1.49 "Major Indication" 6 1.50 "Marketing Approval" 6 1.51 "Marketing Approval Application" or "MAA" 6 1.52 "Net Sales" 6 1.53 "Phase I" 6 1.54 "Phase II" 6 1.55 "Phase III" 6 1.56 "Product Specification" 7 1.57 "Preexisting Third Party Intellectual Property" 7 1.58 "Proof of Concept" 7 1.59 "Prosecution and Interference Activities" 7 1.60 "Protected Field" 7 1.61 "Reference Materials" 7 1.62 "Relevant Standards" 7 1.63 "Sales Price" 7 1.64 "Standard Materials" 7 1.65 "Sublicensee" 8 1.66 "Technical Product Failure" 8 1.67 "Third Party Agreements" 8 1.68 "Third Party Licensor" 8 + +ARTICLE 2 JOINT DEVELOPMENT COMMITTEE 8 + +2.1 Joint Development Committee 8 2.2 Membership 8 2.3 JDC Meetings 8 2.4 Decisions 9 + +ARTICLE 3 DEVELOPMENT PLANS 9 + +3.1 General 9 3.2 Annual Review 9 3.3 Periodic Reviews 9 + +ARTICLE 4 DEVELOPMENT PROGRAM 10 + +4.1 Development Program for the Astellas Territory 10 -ii- + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +TABLE OF CONTENTS (continued) Page 4.2 Global Harmonization 10 4.3 Selection of Lead Compounds 10 4.4 Regulatory Matters 11 + +ARTICLE 5 RECORDKEEPING; PUBLICATION 13 + +5.1 Reports and Records 13 5.2 Review of Publications 14 + +ARTICLE 6 DEVELOPMENT PROGRAM FUNDING 15 + +6.1 Payments for Reimbursement; Net Payments 15 + +ARTICLE 7 USE OF PRECLINICAL AND CLINICAL DATA 17 + +7.1 Exchange 17 7.2 Disclosure 18 7.3 Regulatory Requirements 18 7.4 Review of Protocols 18 + +ARTICLE 8 MARKETING RIGHTS 19 + +8.1 Astellas 19 8.2 FibroGen 19 8.3 Covenants 19 + +ARTICLE 9 TRANSFER PRICING 20 + +9.1 Transfer for Non-Commercial Purpose 20 9.2 Transfer for Commercial Purpose 21 9.3 Payment 22 9.4 Reference Materials; Standard Materials 22 + +ARTICLE 10 ADDITIONAL PAYMENTS; BOOKS AND RECORDS 22 + +10.1 Quarterly Reports 22 10.2 Payment Method 22 10.3 Currency Conversion 23 10.4 Taxes 23 10.5 Records; Inspections 24 + +ARTICLE 11 DUE DILIGENCE 24 + +11.1 Astellas' Due Diligence 24 11.2 FG's Due Diligence 24 11.3 Development Diligence 25 + +ARTICLE 12 MANUFACTURING RIGHTS 26 + +12.1 Procedures 26 12.2 FG Right 27 12.3 Manufacture and Supply 27 12.4 Product Specifications 27 12.5 Orders Forecast 27 -iii- + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +TABLE OF CONTENTS (continued) Page 12.6 Shipment 28 12.7 Inspection of Shipment/Right to Reject 28 12.8 Inspection of Facilities 28 12.9 Recall 29 12.10 Warranty 29 12.11 Interruption in Supply 29 12.12 Reference and Standard Materials 29 + +ARTICLE 13 LICENSE GRANTS 29 + +13.1 Grant to Astellas 29 13.2 Sublicenses 29 13.3 No Rights Beyond Lead Compounds 30 13.4 Expanded Field Negotiation 30 + +ARTICLE 14 INTELLECTUAL PROPERTY 30 + +14.1 Ownership of Inventions 30 14.2 Patent Prosecution 31 14.3 Defense of Third Party Infringement Claims 31 14.4 Enforcement 32 14.5 Third Party Agreements 33 + +ARTICLE 15 REPRESENTATIONS AND WARRANTIES 34 + +15.1 FG Warranties 34 15.2 Astellas Warranties 34 15.3 Disclaimer of Warranties 34 + +ARTICLE 16 CONFIDENTIALITY 35 + +16.1 Confidential Information 35 16.2 Permitted Disclosures 35 16.3 Clinical Data 36 16.4 Press Releases 36 + +ARTICLE 17 INSURANCE; INDEMNIFICATION 36 + +17.1 Insurance 36 17.2 Indemnification of FG 36 17.3 Indemnification of Astellas 37 17.4 Procedure 37 + +ARTICLE 18 TERM AND TERMINATION 37 + +18.1 Term 37 18.2 Termination for Cause or Technical Product Failure 37 18.3 Termination in case of Generic Competition 38 18.4 Negative Advice from Authorities 39 18.5 Admission of Invalidity or Unenforceability of FG Patent 39 18.6 Termination upon Notice 39 -iv- + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +TABLE OF CONTENTS (continued) Page 18.7 Effect of Termination 39 + +ARTICLE 19 DISPUTE RESOLUTION 40 + +19.1 Disputes 40 19.2 Full Arbitration 40 + +ARTICLE 20 MISCELLANEOUS 41 + +20.1 Confidential Terms 41 20.2 Governing Law 41 20.3 Force Majeure 41 20.4 No Implied Waivers; Rights Cumulative 42 20.5 Independent Contractors 42 20.6 Notices 42 20.7 Assignment 43 20.8 Modification 43 20.9 Severability 43 20.10 Counterparts 43 20.11 Headings 43 20.12 Export Laws 43 20.13 Language 43 20.14 Entire Agreement 43 + +EXHIBIT A LIST OF PATENTS 45 + +EXHIBIT B INDICATIONS 46 + +EXHIBIT C INITIAL DEVELOPMENT PLAN 47 -v- + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +CONFIDENTIAL EXECUTION COPY COLLABORATION AGREEMENT + +This COLLABORATION AGREEMENT ("Agreement"), effective as of June 1, 2005 (the "Effective Date"), is made by and between FibroGen, Inc., a Delaware corporation having offices at 225 Gateway Boulevard, South San Francisco, California 94080 ("FG" or "FibroGen"), and Astellas Pharma Inc., a Japanese corporation having offices at 3-11 Nihonbashi-Honcho, 2-Chome, Chuo-ku, Tokyo, 103-8411 Japan ("Astellas"). + +BACKGROUND + +A. FG has a research and development program focused on the development of small molecule prolyl hydroxylase inhibitors which stabilize hypoxia inducible factor ("HIF"), for the treatment of anemia. + +B. Astellas desires to collaborate with FG on the development and commercialization of, and license the rights to use as therapeutics, certain small molecule prolyl hydroxylase inhibitors on the terms and conditions set forth below for use in the Astellas Territory (as defined below). + +NOW THEREFORE, for and in consideration of the covenants, conditions, and undertakings hereinafter set forth, it is agreed by and between the parties as follows: + +ARTICLE 1 DEFINITIONS + +1.1 "Actions" shall have the meaning as set forth in Section 14.3 below. + +1.2 "Affiliate" shall mean any entity which controls, is controlled by or is under common control with Astellas or FG. For purposes of this definition only, "control" shall mean beneficial ownership (direct or indirect) of at least fifty percent (50%) of the shares of the subject entity entitled to vote in the election of directors (or, in the case of an entity that is not a corporation, for the election of the corresponding managing authority). + +1.3 "Astellas Indemnitees" shall have the meaning as set forth in Section 17.3 below. + +1.4 "Astellas Territory" shall mean the country of Japan. + +1.5 "Authorized Designee" shall mean an officer of FG or Astellas, as the case may be, designated by the Chief Executive Officer of the respective corporation, that has been granted full authority to resolve a dispute arising between FG and Astellas as required under Section 2.4 or Section 19.1 hereof. + +1.6 "Bridging Strategy" shall mean the decision by Astellas to file an MAA in the Astellas Territory by submitting the data from the Phase III clinical trial of FG or its Affiliate or Sublicensee. -1- + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +CONFIDENTIAL EXECUTION COPY 1.7 "Bulk Product" shall mean a Lead Compound supplied by FG to Astellas as a bulk formulated drug (such as in a form, including, but not limited, to a capsule, tablet or caplet formulation) without packaging. + +1.8 "Commercialize" shall mean directly or indirectly develop, manufacture, sell, market or distribute. + +1.9 "Completion" shall be deemed to occur, with respect to a particular clinical trial for a Lead Compound, upon clinical database lock for such trial. + +1.10 "Confidential Information" shall have the meaning as set forth in Section 16.1 below. + +1.11 "Control" or "Controlled" shall mean possession of the ability to grant a license or sublicense as provided for herein without violating the terms of an agreement with a third party. + +1.12 "Controlling Party" shall have the meaning as set forth in Section 14.3 below. + +1.13 "Data" shall have the meaning as set forth in Section 7.1 below. + +1.14 "Delivery" or "Delivered" shall mean when Lead Compound is made available by FG to Astellas at the Ex Works location. + +1.15 "Development Plan" shall mean the plan for the Development Program in effect from time to time, as established in accordance with Article 3 below. + +1.16 "Development Program" shall mean all Astellas activities with respect to the development and commercialization of Lead Compounds for applications within the Field in the Astellas Territory, in accordance with the Development Plan in effect at that time. + +1.17 "Enforcement Action" shall have the meaning as set forth in Section 14.4 below. + +1.18 "Event" shall have the meaning as set forth in Article 6 below. + +1.19 "Expanded Field" shall mean the treatment of any indications in which therapeutic utility is derived from [ * ], including, without limitation, [ * ]. The Expanded Field shall not include the Field. + +1.20 "Expenses" shall have the meaning as set forth in Section 14.3 below. + +1.21 "FDA" shall mean the U.S. Food and Drug Administration, or any successor agency. -2- + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +CONFIDENTIAL EXECUTION COPY 1.22 "FG Acquired Patents" shall mean those FG Patents that are in-licensed or otherwise acquired by FG. + +1.23 "FG Development Program" shall mean those activities by or on behalf of FG directly related to the development and commercialization of Lead Compounds for applications within the Field in the FG Territory that are directly useful or necessary for Commercialization in the Astellas Territory. + +1.24 "FG Indemnitees" shall have the meaning as set forth in Section 17.2 below. + +1.25 "FG Technology" shall mean FG Patents and FG Technical Information. + +1.26 "FG Patents" shall mean all patents including all reissues, renewals, re-examinations and extensions thereof, and any patent applications therefor, including all divisionals or continuations, in whole or in part, thereof, which claim or otherwise cover the composition, manufacture, sale or use of a Lead Compound and that are Controlled by FG or its Affiliates during the term of this Agreement, subject to Section 14.5.1. For purposes of this definition, a patent or patent application shall be deemed to "cover" a Lead Compound if the manufacture, use or sale of such Lead Compound would, but for the license granted herein, infringe, contributorily infringe or constitute inducement to infringement of such patent or patent application, if issued or granted as pending. All patents and patent applications listed on Exhibit A, as revised from time to time to remove patents and/or patent applications by mutual agreement or to add patents and/or patent applications by FG, shall be within the scope of definition of the FG Patents, provided, however, that in the event FG designates any additional Lead Compounds, FG shall add to the list on Exhibit A patents and patent applications which claim or otherwise cover the composition, or manufacture, sale or use of the additional Lead Compounds within the Field and the Astellas Territory, and upon the cessation of the designation as any compound as Lead Compound and Astellas' cessation of development of such Lead Compound, FG shall remove at its sole discretion the related patent or patent application from Exhibit A. + +1.27 "FG Technical Information" shall mean confidential information, tangible and intangible, and materials, including, but not limited to: trade secrets and know how, pharmaceutical, chemical, biological and biochemical compositions; and technical and non-technical data and information, and/or the results of tests, assays, methods and processes; and plans, specifications and/or other documents containing said information and data; in each case that is possessed by FG as of the Effective Date or discovered, developed or Controlled by FG or its Affiliates during the term of this Agreement, to the extent such relates to the development, manufacture, sale or use of a Lead Compound subject to Section 14.5.1, and such information related to a candidate for use as a Lead Compound provided by FG to Astellas in connection with the Lead Compound selection decision consultation process described in Section 4.3. + +1.28 "FG Territory" shall mean all areas of the world outside of the Astellas Territory. -3- + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +CONFIDENTIAL EXECUTION COPY 1.29 "Field" shall mean the treatment of anemia solely in the Indications, by means of the stabilization of HIF causing the stimulation of erythropoiesis (including an increase in endogenous erythropoietin production) and/or a subsequent increase in hematocrit through modulation of prolyl hydroxylase and/or asparaginyl hydroxylase. For purposes of clarity, FG and Astellas agree and acknowledge that the Field and the Indications exclude [ * ]. + +1.30 "First Commercial Sale" shall mean, with respect to each Lead Compound, the first bona fide commercial sale of such Lead Compound to a non-Affiliate third party by or under authority of Astellas or FG, or their Affiliates or Sublicensees, as the case may be, in the FG Territory or the Astellas Territory, respectively. + +1.31 "Force Majeure Event" shall mean the occurrence of any event causing a failure to perform where failure to perform is beyond the reasonable control of the non-performing party, as described in Section 20.3. + +1.32 "Fully Burdened Costs" with respect to a Lead Compound shall mean all costs to produce, package and distribute the product to Astellas or its carrier at the Ex Works location (in compliance with Section 12.6) and any royalties or other consideration (not reimbursed by Astellas) paid to third parties related to the acquisition or sale of product, with costs to produce and package the product to include the direct material, labor and indirect costs that are incurred by FG or its Affiliate(s) associated with the manufacture, filling, packaging, labeling, preparation of product for shipment and/or other preparation of such Lead Compound, as applicable, including, but not limited to taxes, fees, and customs incurred, as applicable. Costs will be determined in accordance with U.S. Generally Accepted Accounting Principles (U.S. GAAP) and will include but not be limited to the costs of facilities, labor, purchasing, depreciation of equipment, materials, payments to third parties for any necessary contract work related to the manufacture or testing of the product, the validation studies, quality assurance, quality control and other testing, storage, shipping (if requested by Astellas), costs related to distribution and a reasonable allocation of general and administrative overhead. Costs related to distribution include the labor, materials and overhead necessary to prepare and package the final product for shipment to the Ex Works location. + +1.33 "Future Third Party Intellectual Property" shall mean any intellectual property rights, including without limitation all patents, trademarks, or copyrights, and any applications therefor, including any applications for registration, issuance, or grant thereof, owned or Controlled by a third party that are necessary for the practice of the license granted hereunder that were not owned or Controlled by FG as of the Effective Date and that do not qualify as Pre-existing Third Party Intellectual Property under Section 1.56. + +1.34 "GMP Guidelines" shall mean then-current applicable Good Manufacturing Practices guidelines and regulations of the FDA. + +1.35 "[ * ]" shall have the meaning as set forth in Section 1.36 below. -4- + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +CONFIDENTIAL EXECUTION COPY 1.36 "[ * ] Percentage" shall be determined, for any Lead Compound, (i) by dividing (a) the [ * ], which shall be defined as the difference between (x) the [ * ], and (y) the [ * ], by (b) the [ * ]; and (ii) multiplying the result of (i) above by 100. + +1.37 "HIF" shall mean hypoxia inducible factor. + +1.38 "IND" shall mean an Investigational New Drug application, as defined in the U.S. Federal Food, Drug and Cosmetic Act and the regulations promulgated thereunder, or comparable filing in a foreign jurisdiction, in each case with respect to a Lead Compound for use within the Field. + +1.39 "Indemnitee" shall have the meaning as set forth in Section 17.4 below. + +1.40 "Indemnitor" shall have the meaning as set forth in Section 17.4 below. + +1.41 "Indications" shall mean those indications listed on Exhibit B and any other indications to be agreed upon hereafter between FG and Astellas, each of which shall be referred to as an Indication. + +1.42 "Initial Development Plan" shall mean the Initial Development Plan as described in Section 3.2.1 hereof. + +1.43 "Initiate" or Initiation" shall mean with respect to a particular clinical trial for a Lead Compound, the initial dosing of the first patient in such trial in accordance with the protocol therefor. + +1.44 "Inspected Party" and "Inspecting Party" shall have the meanings as set forth in Section 10.5 below. + +1.45 "Joint Development Committee" or "JDC" shall have the meaning as set forth in Section 2.1 below. + +1.46 "Lead Compound" shall mean any compound Controlled by FG that is designated by FG as a lead compound for clinical development in an Indication in accordance with Section 4.3 for the duration of such designation. Any Lead Compound which receives a Marketing Approval in the Astellas Territory shall remain a Lead Compound for the duration of such Marketing Approval. As of the Effective Date, FG-2216 shall be deemed to be a Lead Compound. + +1.47 "Listed Price" shall have the meaning as set forth in Section 9.2. + +1.48 "Litigation Agreement" shall have the meaning as set forth in Section 14.4 below. -5- + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +CONFIDENTIAL EXECUTION COPY 1.49 "Major Indication" shall have the meaning set forth in Section 11.3.1 below. + +1.50 "Marketing Approval" shall mean, with respect to each Lead Compound, approval in the Astellas Territory by the Japanese Ministry of Health, Labour and Welfare, or in the FG Territory by U.S. or European regulatory authorities, as the case may be, to market such Lead Compound for an indication within the Field. It is understood that pricing or reimbursement approval shall constitute a part of the Marketing Approval. In any event, Marketing Approval shall be deemed to have occurred with respect to a Lead Compound no later than the date of the First Commercial Sale of such Lead Compound in the FG Territory or the Astellas Territory as the case may be, by or under authority of FG or Astellas respectively, or their Affiliate or Sublicensee, as the case may be, whether or not formal approval by the relevant health regulatory authority is required for the First Commercial Sale of such Lead Compound. + +1.51 "Marketing Approval Application" or "MAA" shall mean, within the FG Territory, a New Drug Application or similar application as required under the U.S. Federal Food, Drug and Cosmetics Act and the regulations promulgated thereunder, or such similar filing in Europe, or a comparable filing for Marketing Approval in the Astellas Territory, in each case with respect to a Lead Compound for use within the Field. + +1.52 "Net Sales" shall mean the gross amount billed or invoiced by Astellas, its Affiliates and its Sublicensees to unaffiliated third parties for the Lead Compound(s) in bona fide arm's length transaction, less the following deductions: + + i) credits or allowances, if any, given or made on account of rejection or return of the Lead Compound(s); + + ii) trade and quantity discounts actually allowed and taken in such amounts as are customary in the trade; + + iii) duties, sales taxes, excise taxes, insurance and transportation charges actually paid; and + + iv) charge back payments or rebates actually paid to wholesalers. + +1.53 "Phase I" shall mean human clinical trials, the principal purpose of which is preliminary determination of safety in healthy individuals or patients as required in 21 C.F.R. §312.21, or similar clinical study in a country other than the United States, and for which there are no primary endpoints relating to efficacy included in the protocol. + +1.54 "Phase II" shall mean human clinical trials, for which the primary endpoints include a determination of dose ranges and/or a preliminary determination of efficacy in patients with the Indication being studied as required in 21 C.F.R. §312.21, or similar clinical study in a country other than the United States. + +1.55 "Phase III" shall mean human clinical trials, the principal purpose of which is to establish safety and efficacy of one or more particular doses in patients with the Indication being studied as required in 21 C.F.R. §312.21, or similar clinical study in a country -6- + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +CONFIDENTIAL EXECUTION COPY other than the United States. For purposes of this Section 1.55, and Sections 1.53 and 1.54 above, a particular trial that (i) is intended to overlap two phases of trials, (ii) combines the elements of two phases of trials, or (iii) is treated by the FDA or comparable foreign agency as two phases of trials, such as a Phase I/II trial or a Phase II/III trial, shall be deemed a trial of the later, as well as the earlier, phase (i.e., a Phase II and a Phase III, respectively). + +1.56 "Product Specification" shall mean, with respect to a Bulk Product, the written document describing, the testing procedures and results required to determine compliance with release specifications, including, and quality control testing procedures to be determined, and be amended from time to time, by mutual agreement of both parties. The release specifications of such Product Specifications shall be determined taking into account and shall be designed to meet the shelf life requirements of the Japanese Ministry of Health, Labor and Welfare for the Lead Compound, provided, that the Product Specifications shall not require compliance with such shelf life requirements. + +1.57 "Preexisting Third Party Intellectual Property" shall mean any intellectual property rights, including without limitation all patents, trademarks, copyrights, and any applications therefor, including any applications for registration, issuance, or grant thereof, owned or Controlled by a third party that are necessary for the practice of the license granted hereunder and that the existence of which was discoverable or otherwise could have been known on or prior to the Effective Date and were not owned or Controlled by FG as of the Effective Date. + +1.58 "Proof of Concept" shall mean for any Indication, a demonstration of correction of anemia in relevant patients in a human clinical study. + +1.59 "Prosecution and Interference Activities" shall mean the preparation, filing, prosecution and maintenance of patent applications and patents and any continuing applications thereof, and any re-examinations, reissues, renewals and requests for patent term extensions therefor, and any U.S., international or foreign counterparts of any of the foregoing, together with the conduct of any interference, opposition or other similar proceeding pertaining to patent applications or patents. + +1.60 "Protected Field" shall have the meaning as set forth in Section 14.1. + +1.61 "Reference Materials" shall have the meaning as set forth in Section 12.12 below. + +1.62 "Relevant Standards" shall have the meaning as set forth in Section 12.8 below. + +1.63 "Sales Price" shall mean the price per unit obtained by dividing the Net Sales during the relevant calendar quarter by the number of units sold during the same period. + +1.64 "Standard Materials" shall have the meaning as set forth in Section 12.12 below. -7- + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +CONFIDENTIAL EXECUTION COPY 1.65 "Sublicensee" shall mean a third party to whom FG or Astellas has directly or indirectly granted the right in its respective territory to make, use and sell a Lead Compound or a third party to whom FG or Astellas has directly or indirectly granted the right to distribute a Lead Compound supplied by FG or Astellas (respectively). For purposes of this Agreement, FG and Astellas shall not be deemed Sublicensees of the other. + +1.66 "Technical Product Failure" shall mean as a [ * ], which is not attributed to Astellas' failure to fulfill its obligations hereunder. + +1.67 "Third Party Agreements" shall mean collectively those agreements between FG and a third party existing as of the Effective Date, pursuant to which FG obtained rights applicable to the development, manufacture, sale or use of Lead Compounds hereunder (but excluding options or similar agreements to acquire such rights). If, after the Effective Date, FG enters into an agreement to license or acquire rights from a third party with respect to subject matter to be utilized in connection with Lead Compounds in accordance with Section 14.5 below, such agreements shall also be deemed Third Party Agreements for purposes of this Agreement. + +1.68 "Third Party Licensor" shall have the meaning as set forth in Section 14.5.1 below. + +ARTICLE 2 JOINT DEVELOPMENT COMMITTEE + +2.1 Joint Development Committee. Astellas and FG shall establish a joint development committee to oversee, review and coordinate the research and development of Lead Compounds for applications within the Field pursuant to the Development Program ("Joint Development Committee" or "JDC"). From time to time, the JDC may establish subcommittees or project teams to oversee particular projects or activities, and such subcommittees or project teams will be constituted as the JDC agrees (e.g., for oversight of the development or other day-to-day matters). + +2.2 Membership. The JDC shall be comprised of an equal number of representatives from each of Astellas and FG, selected by such party. The exact number of such representatives shall be [ * ] for each of Astellas and FG, or such other number as the parties may agree. Subject to the foregoing provisions of this Section 2.2, FG and Astellas may replace its respective JDC representatives at any time, upon prior written notice to the other party. + +2.3 JDC Meetings. The JDC shall meet no fewer than [ * ] times each calendar year, or as otherwise agreed by the parties, with the understanding that [ * ] meetings are to be held at mutually agreed locations alternating among Japan, California, Hawaii, or at such other locations as the parties agree, and the other [ * ] meetings are to be held by means of telecommunication, videoconference or correspondence as deemed appropriate. The parties shall conduct team meetings at the same time and location as the JDC meetings. At its meetings, the JDC will, as applicable, (i) formulate and review the Development Program objectives, including approval of all proposed pre-clinical and clinical studies to be performed, (ii) monitor the progress of the Development Program toward those objectives, (iii) review and approve the -8- + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +CONFIDENTIAL EXECUTION COPY Development Plan, pursuant to Section 3.3 of this Agreement, including review, approve and monitor the progress of the clinical and regulatory plans, (iv) resolve issues surrounding the marketing of the Lead Compounds, (v) discuss the selection of Lead Compounds, (vi) coordinate manufacturing issues, including the development of standards, scheduling of batch production, and qualification with regulatory requirements for the Astellas Territory, (vii) resolve issues arising out of the Development Program or this Agreement, and (viii) undertake and/or approve such other matters as are specifically provided for the JDC under this Agreement. One meeting each year will be focused specifically on setting Development Program goals and strategy. Other representatives of FG or Astellas may attend JDC or subcommittee meetings as non-voting observers. Astellas' lead representative shall chair the meetings and shall be responsible for preparing the agenda and minutes for such meetings, and shall provide such minutes to FG in English. Such minutes as approved by the JDC shall constitute the official record of the actions of the JDC. The JDC may also convene or be polled or consulted from time to time by means of telecommunications, videoconferences or correspondence, as deemed necessary or appropriate. Each party shall bear its own personnel, travel and lodging expenses relating to JDC meetings. + +2.4 Decisions. Decisions of the JDC shall be made by unanimous agreement of the members present in person or by other means (e.g., teleconference) at any meeting; provided that at least two (2) representatives of each party is present at such meeting. In the event that the JDC is unable to reach unanimous agreement on an issue, the issue shall be referred for resolution in accordance with Article 19 hereof. + +ARTICLE 3 DEVELOPMENT PLANS + +3.1 General. Subject to Section 3.2 below, Astellas shall prepare and propose to the JDC a detailed Development Plan pursuant to which the Development Program will be performed. The Development Plan shall specify the objectives and work plan activities by Astellas with respect to the Development Program. + +3.2 Annual Review + +3.2.1 Initial Development Plan. The initial Development Plan is attached hereto as Exhibit C (the "Initial Development Plan"), and shall be fixed for the period from the Effective Date through March 31, 2006, unless otherwise agreed by the JDC. + +3.2.2 Other. Beginning upon the date of signing of this Agreement and by December 31 of each year thereafter until expiration or termination of this Agreement, Astellas shall submit to the JDC the proposed plan required under Section 3.1 above for the following fiscal year, including for regulatory activities within the Astellas Territory. The JDC shall review such proposals as soon as possible and shall approve the Development Plan for such following fiscal year, with such changes as the JDC may agree to the plan proposed by Astellas, no later than March 15 of the current fiscal year. + +3.3 Periodic Reviews. The JDC shall review the Development Plan on an ongoing basis and may make changes thereto including variances to the Development Plan in effect. -9- + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +CONFIDENTIAL EXECUTION COPY ARTICLE 4 DEVELOPMENT PROGRAM + +4.1 Development Program for the Astellas Territory. Astellas shall follow FG's development activities for the Lead Compounds, (i.e., Astellas shall develop, and shall have the right and obligation to develop, only those compounds that FG has designated as Lead Compounds, for the duration of such designation and for which FG or its Sublicensee is pursuing clinical development in the FG Territory), for those Indications being developed by FG or its sublicensee, and such Astellas development shall comply with, without limitation the procedures set forth in Section 11.3.1. In fulfillment thereof, Astellas shall conduct, directly or through third parties, the Development Program for the Astellas Territory, all in accordance with the Development Plan then in effect, and shall be responsible for all costs related to the Astellas Territory. Astellas agrees to keep the JDC informed as to the progress of its activities under the Development Program for Lead Compounds hereunder. FG shall, subject to Section 4.2.2, provide reasonable assistance to Astellas regarding Astellas' performance of its development activities within the scope of the Development Program hereunder and provide updates to Astellas as to the FG Development Program. It is understood and agreed that the Development Program for the Astellas Territory shall include all clinical trials and other development activities necessary to obtain Marketing Approvals for Lead Compounds for the Astellas Territory. + +4.2 Global Harmonization + +4.2.1 Reporting; Redundant Activities. FG shall provide to Astellas regular reports with respect to the FG Development Program with respect to the Lead Compounds. Such reports may be provided at the JDC meetings provided for in Section 2.3. Recognizing that the Lead Compounds may be developed on a global basis and that regulatory and budget efficiencies can be achieved through the worldwide use of appropriate data and files, the parties will seek to design pre-clinical and clinical development activities included in the Development Plan in a manner to maximize global clinical and regulatory harmonization. + +4.2.2 Additional Activities. Without limiting the obligations set forth in 4.2.1, the costs of any non-clinical or clinical developmental work, whether performed by Astellas or FG, to support needs specific to the Astellas Territory and not required to be performed for the FG Territory, or at the request of Astellas, shall be borne by Astellas. + +4.3 Selection of Lead Compounds. FG shall consult with Astellas with respect to Lead Compound selection, and shall provide to Astellas information as reasonably necessary to evaluate Lead Compound candidates in connection with the Lead Compound selection process, including without limitation the information relating to patent situations in the Astellas Territory. For the avoidance of doubt, such Lead Compound candidates shall potentially include any and all compounds Controlled by FG during the term hereof for use in the Field. Notwithstanding anything contained in this Agreement, FG shall designate, at its sole discretion but in line with the basic policy that the same Lead Compound shall be Commercialized both in Astellas Territory and FG Territory for the same Indication(s), Lead Compound(s) in accordance with the terms of this Section 4.3, and shall notify the JDC of such designations. At any one time, FG may designate up to two (2) Lead Compounds for Commercialization in any Indication; provided, that in the event that FG designates two (2) Lead -10- + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +CONFIDENTIAL EXECUTION COPY Compounds for Commercialization in an Indication, it shall designate one (1) as the primary Lead Compound and one (1) as the secondary Lead Compound. In the event FG determines to cease development of a primary Lead Compound in an Indication, FG may designate the secondary Lead Compound as the primary Lead Compound for such Indication. In the event, prior to Marketing Approval in the Astellas Territory, FG determines to stop development of a Lead Compound, FG shall notify the JDC, and upon such notification, such compound shall no longer be considered a Lead Compound; provided, however, that Astellas may complete those development activities on-going at the time of such notification for such Lead Compound for a reasonable period of time, unless such notification is based on safety concerns. In the event FG determines to [ * ], FG shall [ * ] within [ * ] days of such [ * ]. In the event that FG [ * ], Astellas may, subject to the [ * ], [ * ], provided, however, that the [ * ] shall apply upon the [ * ] set forth in such Sections, rather than the [ * ]. + +4.4 Regulatory Matters + +4.4.1 Regulatory Filing. FG shall be responsible, directly or through third parties, for the preparation, filing and maintenance of all regulatory documents in the FG Territory with respect to the Lead Compound(s), which shall be filed in the name of FG or its designee. Astellas shall be responsible for all preparation, filing and maintenance of all regulatory documents in the Astellas Territory with respect to the Lead Compound(s), which shall be filed in the name of Astellas. Astellas shall select and own the trademark(s) to be used to identify any Lead Compound in the Astellas Territory. + +4.4.2 Reporting Adverse Experiences + +(a) With respect to adverse drug experiences relating to any Lead Compound, the parties shall promptly report such experiences to the appropriate regulatory authorities in the countries in which such Lead Compound is being developed or commercialized, in accordance with the appropriate laws and regulations of the relevant countries and authorities, and each party shall ensure that its Affiliates and Sublicensees comply with such reporting obligations. In addition, in order that each party may be fully informed of these experiences, each party shall report to the other party all "adverse events" involving such Lead Compound. "Serious adverse events" for all fatal and life-threatening adverse events shall be reported to the designated safety contact person of the other party by e-mail within five (5) calendar days of a party's and/or its agent's becoming aware of such an event (a "reporting party"), and all other serious adverse events shall be forwarded to the other party within seven (7) calendar days of the reporting party's and/or its agent's becoming aware of such an event. To the extent legally possible, FG and Astellas shall report to the other all serious adverse events with respect to a Lead Compound in the Field at least twenty-four (24) hours prior to reporting the same to a regulatory authority, and shall report adverse events which may constitute a dose limiting toxicity in a reasonably prompt time after the occurrence of such event. The reporting party shall report all non-serious adverse events on a monthly basis; provided that, non- serious adverse event data arising from a clinical trial will be included in the clinical trial report which -11- + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +CONFIDENTIAL EXECUTION COPY shall be prepared and sent to the other party as soon as practicable following completion of the final clinical report. + +(b) An "adverse event" is any negative symptom experienced at the time of or after the taking of a medicinal (investigational) product, whether or not considered a medicinal (investigational) product related, including any side effects, injury, toxicity or sensitivity reaction, or significant failure of expected pharmacological action. Also included are instances of symptomatic overdose, abuse or withdrawal reactions. + +(c) A "serious adverse event" includes any of the following outcomes: death, a life-threatening event; that is, an adverse event that puts the patient at risk of dying, requires hospitalization, prolongs existing hospitalization or results in persistent or significant incapacity or disability, congenital anomaly/birth defect. Other important medical events that may otherwise jeopardize a patient or may require intervention to prevent one of the statuses of patients listed in the preceding sentence shall also be considered serious. + +(d) The parties also agree to develop and implement such other procedures as may be necessary or appropriate to ensure that each party remains in compliance with all reporting requirements imposed by any regulatory authority in the Astellas Territory, and in the FG Territory. Upon the Initiation of Phase III, FG shall implement and be responsible for the maintenance of a complete global safety database. FG will be responsible for preparing, with Astellas' cooperation set forth below in this Section 4.4.2(d), Periodic Safety Reports for clinical studies requested by European and U.S. authorities, and Periodic Safety Update Reports (PSURs). FG shall send a draft PSUR for review to Astellas in the beginning of week 5 after database lock point. Astellas has one week for review. FG shall provide copies of the final PSURs to Astellas in the same timing as they are submitted to the authorities. Astellas will provide FG with the data needed for making the PSURs. Maintenance of Company Core Safety Information (CCSI) is under the responsibility of FG who will communicate all revisions to Astellas. FG shall prepare the periodic safety reports for clinical studies requested by European and U.S. authorities and provide Astellas with the copy of such reports at the time of submission to the regulatory authorities in the FG Territory. Astellas will provide FG with the data needed for making such periodic safety reports. + +(e) Each party shall immediately inform the other party of measures taken in order not to jeopardize public health or hygiene including but not limited to, discontinuation of manufacture, import and marketing, clinical trial suspension, recall and disposal of the Lead Compound or the product or the prescription product, irrespective of whether it is due to regulatory actions or voluntary actions. -12- + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +CONFIDENTIAL EXECUTION COPY (f) Both parties hereby nominate the safety contact persons as follows: + +Medical Affairs Department FibroGen, Inc. 225 Gateway Boulevard San Francisco, California 94080 Attn: Vice President, Medical Affairs Tel: 1-650-866-7875 Fax: 1-650-866-7360 E-mail:dyeowell@fibrogen.com + +With a copy to: Chief Executive Officer FibroGen, Inc. 225 Gateway Boulevard San Francisco, California 94080 Tel: 1-650-866-7200 Fax: 1-650-866-7201 E-mail:tneff@fibrogen.com Pharmacovigilance Department, QA, RA, and Pharmacovigilance Division Astellas Pharma Inc. [ * ] + +The safety contact persons for each party hereto may be updated from time to time as necessary upon notice to the other party. + +ARTICLE 5 RECORDKEEPING; PUBLICATION + +5.1 Reports and Records. Each of Astellas and FG shall use best efforts to maintain (or cause such records to be maintained) records of the Development Program and FG Development Program, respectively, in sufficient detail and in good scientific manner as will properly reflect all work done and results achieved in the performance of the Development Program or FG Development Program, as the case may be. Upon [ * ] days advance notice or such shorter time period as may be required in order to meet any regulatory requirements, each party shall allow the other party to have access to all records, materials and data generated by or on behalf of such party with respect to each Lead Compound for applications within the Field at reasonable times, in a reasonable manner and, upon request, to the extent required under Article 7 hereof. -13- + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +CONFIDENTIAL EXECUTION COPY 5.1.1 Retention. Each of Astellas and FG shall retain its records for the minimum period of time required by applicable law in all cases, and for not less than [ * ] following the expiration or termination of this Agreement. + +5.1.2 Reports. Not less than [ * ] prior to each JDC meeting under Section 2.3 above, each of Astellas and FG shall provide the JDC with a written report in English; Astellas' report summarizing the progress of the Development Program, including the developmental, clinical and other activities performed by Astellas, its Affiliates and/or Sublicensees with respect to each Lead Compound during the preceding period; and FG's report summarizing the progress of the FG Development Program. + +5.1.3 Activities Outside the Field. The parties understand and acknowledge that FG is engaged in other research and development activities directed to prolyl hydroxylase inhibition and/or the stabilization of HIF, and that the focus of this collaboration and the Development Program is directed to the Field. Accordingly, it is understood that, notwithstanding any other provision of this Agreement, the obligations of FG specified herein to make available and disclose to Astellas data, technical information, scientific results and findings and other subject matter is limited in each case to subject matter directed to Lead Compounds within the Field. + +5.2 Review of Publications. As soon as is practicable prior to the oral public disclosure, and prior to the submission to any outside person for publication of scientific data resulting from the Development Program, in each case to the extent the contents of the oral disclosure or publication have not been previously disclosed pursuant to this Section 5.2 before such proposed disclosure, FG or Astellas, as the case may be, shall provide to the other party a copy of the publication, or a written summary of any oral disclosure, to be made or submitted, and shall allow the other party at least [ * ], to determine whether such disclosure or publication contains subject matter for which patent protection should be sought prior to publication or which either party believes should be modified to avoid disclosure of Confidential Information or regulatory or other issues. With respect to publications by investigators or other third parties of scientific data resulting from the Development Program, such disclosures and publications shall also be subject to review by the reviewing party under this Section 5.2. + +5.2.1 Publication Rights. Subject to the provisions of Articles 7 and 16, after the expiration of [ * ] from the date of receipt of such disclosure or publication, unless the authoring party has received the written notice specified below, the authoring party shall be free to submit such publication or to orally disclose or publish the disclosed research results in any manner consistent with academic standards. + +5.2.2 Disapproval of Publication. Prior to the expiration of the [ * ] period specified in Section 5.2.1 above, the reviewing party may notify in writing the submitting party of its determination that such oral presentation or publication contains Confidential Information of the reviewing party or objectionable material or material that consists of patentable subject matter of the reviewing party for which patent protection should be sought. In such event, and unless otherwise mutually agreed, the submitting party shall withhold publication of its disclosure. -14- + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +CONFIDENTIAL EXECUTION COPY ARTICLE 6 DEVELOPMENT PROGRAM FUNDING + +6.1 Payments for Reimbursement; Net Payments. FG hereby acknowledges receipt of U.S. $[ * ] on February 13, 2004, U.S. $[ * ] on January 28, 2005, and U.S. $[ * ] on March 22, 2005 as initial payments for reimbursement of historical research and development expenditures for the Lead Compounds. Astellas agrees to pay to FG the amounts set forth in Section 6.1.1 below. The parties hereto acknowledge that the Development Program hereunder involves a high degree of risk and uncertainty; accordingly, both parties hereto expressly disclaim any implied warranty as to the results of the Development Program. + +6.1.1 Reimbursement Payments. As reimbursement and payment for FG's historical research and development expenditures with respect to pre-clinical and clinical development of Lead Compounds, Astellas agrees to make the following non-refundable, non-creditable (except as set forth in Section 14.3 below) reimbursement payments to FG upon the first occurrence of each event specified below (each, an "Event"): EVENT AMOUNT 1. Upon [ * ], provided, that U.S. $[ * ] million of such amount shall be paid no later than [ * ] irrespective of whether the [ * ] has occurred. U.S. $[ * ] + +2. Upon each of [ * ], for a total of U.S. $[ * ] U.S. $[ * ] + +3. Upon [ * ] or in the event that Astellas chooses to utilize the Bridging Strategy, the payment shall be made concurrent with the payment required in paragraph 4 of this Section 6.1.1 below. U.S. $[ * ] + +4. Upon the first [ * ]. U.S. $[ * ] + +6.1.2 Product Approval Payments. As reimbursement and payment for FG's historical and ongoing research and development expenditures with respect to pre-clinical and clinical development of Lead Compounds and as payment for the successful marketing and sales of Lead Compound(s), Astellas agrees to make the following non-refundable, non-creditable (except as set forth in Section 14.3 below) reimbursement payments to FG upon the first occurrence of each Event (other than paragraph 5 of this Section 6.1.2 below) specified below. Notwithstanding the foregoing, in the event that Astellas decides not to pursue Commercialization in [ * ] set forth in paragraph 3 or 4 of this Section 6.1.2, the milestone payment associated with the [ * ] set forth in paragraph 3 -15- + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +CONFIDENTIAL EXECUTION COPY shall be due and payable upon the first [ * ] of either [ * ], and the milestone payment associated with the [ * ] set forth in paragraph 4 shall be due and payable upon the second [ * ] for a [ * ]; and in the event Astellas decides to pursue only [ * ] set forth in paragraph 3 or 4 of this Section 6.1.2, and pursues Commercialization of either of the [ * ], the milestone payment for associated with the [ * ] for the [ * ] shall be due and payable upon the first [ * ] for a [ * ]; and in the event that Astellas decides to pursue [ * ] set forth in paragraphs 3 and 4 of this Section 6.1.2 and also does not pursue [ * ], the parties shall a [ * ] for which the milestone payments associated with the [ * ] set forth in paragraph(s) 3 and/or 4 of this Section 6.1.2, as the case may be, shall be due, as negotiated in good faith by the parties hereto. EVENT AMOUNT 1. Upon the first [ * ] for the [ * ]; provided, that in the event Astellas chooses the Bridging Strategy, such payment shall be increased by an additional U.S. $[ * ] for a total of U.S. $[ * ] U.S. $[ * ] + +2. Upon the first [ * ] in the Astellas Territory for the [ * ]; provided, that in the event Astellas chooses the Bridging Strategy, such payment shall be increased by an additional U.S. $[ * ] for a total of U.S. $[ * ]. U.S. $[ * ] + +3. Upon the first [ * ] in the Astellas Territory for the [ * ]; provided, that in the event Astellas chooses the Bridging Strategy, such payment shall be increased by an additional U.S. $[ * ] for a total of U.S. $[ * ]. U.S. $[ * ] + +4. + + + +Upon the first [ * ] in the Astellas Territory for the first indication within [ * ] (see Exhibit B); provided, that in the event Astellas chooses the Bridging Strategy, such payment shall be increased by an additional U.S. $[ * ] for a total of U.S. $[ * ]. + +U.S. $[ * ] + + -16- + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +CONFIDENTIAL EXECUTION COPY + +5. Upon [ * ] in the Astellas Territory for each of up to [ * ] indications listed on Exhibit B, including separate indications within [ * ] up to a total of U.S. $[ * ]. U.S. $[ * ] + +6.1.3 Sales Success Payments. As reimbursement and payment for FG's historical and ongoing research and development expenditures with respect to pre-clinical and clinical development of Lead Compounds and as payment for the successful marketing and sales of the Lead Compound(s), Astellas agrees to make the following non-refundable, non-creditable (except as set forth in Section 14.3 below) reimbursement payments to FG upon the first occurrence of the Event specified below. EVENT AMOUNT Upon receipt of [ * ] aggregate annual Net Sales achieved for the first time in the Astellas Territory for all indications and Lead Compounds by Astellas and its Affiliates and Sublicensees. U.S. [ * ] + +If at the occurrence of an Event (except for Event 2) as set forth in Section 6.1.1 above with respect to a particular Lead Compound the payment corresponding to the occurrence of any preceding Event (except for Event 2) (i.e., "previous" as contemplated by the Event number sequence specified above) has not been made, then the corresponding payment(s) for such preceding Event (except for Event 2) shall then be due. + +The payments set forth in Sections 6.1.1, 6.1.2 and 6.1.3 hereof shall each be due and payable within [ * ] after occurrence of the corresponding Event. Astellas agrees to promptly notify FG in writing of its achievement of any Event under Sections 6.1.1, 6.1.2 and 6.1.3. + +ARTICLE 7 USE OF PRECLINICAL AND CLINICAL DATA + +7.1 Exchange. Subject to the provisions of this Article 7 and Article 16 below, the parties shall have access to the underlying preclinical and clinical data (including raw data thereof), analysis, reports, protocols and correspondence (collectively with such filings, "Data"), at reasonable times, upon fifteen (15) days advance notice or such shorter notice as may be required in order to meet any regulatory requirements and (upon request) in English, (it being understood and agreed that Astellas shall provide in English without cost to FG summaries of all final reports and all documents necessary to comply with regulatory and legal requirements, and -17- + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +CONFIDENTIAL EXECUTION COPY shall provide all other documents in English with reasonable costs shared equally between the parties) of the other party in accordance with the following: + +(a) FG shall have access to and the right to use for any purpose, any Data developed by or on behalf of Astellas or its Affiliates or Sublicensees in the course of the Development Program with respect to indications within the Field for Lead Compounds. Astellas shall obtain from such Sublicensees access to all Data prepared by or for such Sublicensee with respect to a Lead Compound, with the right to provide such Data and/or access to FG and its Sublicensees, and any sublicense failing to provide such obligation on the part of the Sublicensee shall be voidable at the option of FG. + +(b) Astellas shall have access to and the right to use solely for the purpose of this Agreement, any Data developed by or on behalf of FG or its Affiliates or Sublicensees with respect to Lead Compounds in connection with the Field (i) to the extent necessary to support the application to the regulatory authority in the Astellas Territory or to fulfill other Japanese Ministry of Health, Labor and Welfare regulatory requirements, or (ii) if not necessary to support such application or to fulfill such Japanese Ministry of Health, Labor and Welfare regulatory requirements, to the extent FG is permitted subject to FG's third party obligations; provided that FG shall [ * ] negotiate the availability of such Data to Astellas from such Sublicensee, and provided, further, that Astellas agrees not to use or disclose to third parties any such data for purposes outside the Field except as authorized under this Agreement. + +7.2 Disclosure. Subject to the provisions of this Section 7.2, FG and Astellas may each provide copies or summaries of Data to its Affiliates and/or its permitted Sublicensees to the extent reasonably necessary for the development and commercialization of Lead Compounds in accordance with this Agreement, or in the case of FG of products other than Lead Compounds. It is understood that the foregoing shall include the right to disclose Data to third parties with whom Astellas or FG are discussing entering into agreements for such permitted purposes, subject to reasonable conditions of confidentiality, provided, that Astellas may not disclose any Data to any third party competitor of FG within the Field worldwide without the prior written consent of FG. + +7.3 Regulatory Requirements. Notwithstanding the provisions of Section 7.2, in all agreements with third parties or Affiliates involving the development of Data, FG and Astellas, respectively, shall require that such third parties and Affiliates provide the other party with all such Data, to the extent such Data is required in order for each party to meet its obligations to the other party under Section 4.4.2 above. + +7.4 Review of Protocols. Astellas agrees that all final protocol summaries for all clinical trials and GLP toxicology studies to be conducted by or under authority of Astellas will be subject to the review and approval of the JDC, in accordance with the following procedures set forth in this Section 7.4. Astellas shall submit to FG and the JDC the original draft protocol summary in English for any clinical trial or GLP toxicology study it proposes to conduct, and such protocol summary shall be reviewed and approved by the JDC. The protocol summary shall contain all information as may be requested by the JDC. Upon Astellas' completion of the final protocol for the proposed clinical trial or GLP toxicology study, in the -18- + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +CONFIDENTIAL EXECUTION COPY event that such protocol deviates from the original protocol summary, Astellas shall resubmit to FG and the JDC for review and approval a revised, final protocol summary that indicates all changes from the original protocol summary. Notwithstanding the foregoing, FG reserves the right to request and Astellas shall provide any portion of full text of the protocols in English for review by the JDC, which portion is at issue. In the event FG requests such a full text protocol, it shall review and provide comments to the JDC as soon as practicable, and within five (5) business days of receipt. + +ARTICLE 8 MARKETING RIGHTS + +8.1 Astellas. Astellas shall have the exclusive right to market, sell and distribute the Lead Compounds supplied by FG for use in the Astellas Territory within the Field under the license granted in Article 13. Astellas may exercise its rights under this Section 8.1 through one or more Sublicensees; provided, that any such Sublicensee agrees to terms identical in all material respects to those contained in this Agreement, and, provided, further, that any arrangement between Astellas and an Astellas Sublicensee with respect to a Lead Compound shall be subject to the requirements of Section 13.2. + +8.2 FibroGen. FG shall have the exclusive right, including the right to authorize others, to market, sell and distribute the Lead Compounds for any use in the FG Territory. Subject to the restrictions contained in Section 8.3.4 hereof, FG retains the exclusive right, including the right to authorize others, to market, sell and distribute worldwide the Lead Compounds for use outside the Field. + +8.3 Covenants + +8.3.1 General. It is understood that, with respect to any particular Lead Compound, whether or not the use and sale of such Lead Compound by FG and/or Astellas in any country requires a license under intellectual property rights of the other, neither FG nor Astellas shall market, sell or distribute a Lead Compound anywhere in the world except in accordance with this Agreement, including this Article 8. + +8.3.2 Independent Activities by Astellas. During the term of this Agreement, in the event Astellas seeks to Commercialize any molecules for the Field or the Expanded Field, except for actions taken within the Field in the course of the exercise of the license granted under Section 13.1 hereof and expressly authorized under this Agreement, Astellas shall notify FG immediately upon the commencement of any such activities, and provided that [ * ] such activities are and will be in the future conducted completely independently of any of FG Technology and/or any other FG materials, confidential information, intellectual property or other related information provided by or on behalf of FG to Astellas under this Agreement or any other agreement between FG and Astellas relating to the subject matter hereof, Astellas may proceed with such Commercialization, subject at all times to the obligations contained in this Agreement with respect to any intellectual property in connection with or related to such activities and FG's right to terminate this Agreement pursuant to Section 18.2.1 hereof. -19- + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +CONFIDENTIAL EXECUTION COPY 8.3.3 Use of FG Technology by Astellas. Astellas shall use the FG Technology only to exercise the rights granted under Section 13.1 of this Agreement and as expressly authorized under the Development Program, and shall not under any circumstances use or apply any FG Technology, including without limitation any FG know-how and/or any other FG materials, confidential information, intellectual property or other related information provided by FG to Astellas under this Agreement or any other agreement between FG and Astellas relating to the subject matter hereof, for any use outside the Field at any time or within the Field after the expiration or termination of this Agreement. + +8.3.4 Activities Outside Field by Astellas. Without limiting the foregoing, Astellas agrees that during the term of this Agreement it will not (and will not authorize any third party, including, without limitation, any Affiliates or Sublicensees, to) (i) Commercialize any Lead Compound within the Field in the Astellas Territory, except a Lead Compound that has been designated a Lead Compound by the JDC and that has received Marketing Approval in the Astellas Territory for use in the Field, (ii) Commercialize any Lead Compound for use outside the Field or outside the Astellas Territory, (iii) provide any supplies of any Lead Compound to any third party, including, without limitation, any Affiliates or Sublicensees, which Astellas knows or has reason to know is being marketed, sold or distributed for use outside the Field or outside the Astellas Territory, (iv) conduct or sponsor, or provide any supplies of any Lead Compound for use in, any clinical trial designed to demonstrate that a Lead Compound can be used outside the Field, or (v) seek regulatory approval of, or use labeling for a Lead Compound stating that such Lead Compound is for use outside the Field. + +8.3.5 Activities in Astellas Territory by FG During the term of this Agreement, FG shall not Commercialize by itself or through its Sublicensee any Lead Compound or other compound, whether or not designated as a Lead Compound, within the Field in the Astellas Territory, or any Lead Compound outside the Field in the Astellas Territory, provided, however, that FG may develop a Lead Compound or other compound in the Astellas Territory in those Indications for which Astellas has determined not to pursue Commercialization or for which Astellas has lost the right to pursue Commercialization due to failure to meet diligence obligations hereunder; and provided, further, that FG may Commercialize compounds other than Lead Compounds outside the Field in the Astellas Territory, irrespective of whether such compound has the effect of stabilizing HIF causing the stimulation of erythropoiesis (including an increase in endogenous erythropoietin production) and/or a subsequent increase in hematocrit through modulation of prolyl hydroxylase and/or asparaginyl hydroxylase. + +ARTICLE 9 TRANSFER PRICING + +9.1 Transfer for Non-Commercial Purpose. In exchange for the transfer of any Lead Compound to Astellas for a non-commercial purpose, Astellas shall pay FG the total amount of the Fully Burdened Costs for such Lead Compound as reasonably determined by FG. Lead Compound transferred to Astellas for a non-commercial purpose shall not be used for a commercial purpose. -20- + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +CONFIDENTIAL EXECUTION COPY 9.2 Transfer for Commercial Purpose. For any Lead Compound transferred to Astellas to be used for any commercial purpose, in exchange for the transfer of such Lead Compound to Astellas, Astellas shall pay FG the amounts set forth in this Section 9.2. All transfers of Lead Compound for use following Marketing Approval shall be deemed transfers for a commercial purpose, except transfers under Section 9.2(c), and transfers for the purpose of conducting clinical trials, which shall be considered transfers for a non-commercial purpose. + +(a) For any quantities of Lead Compound shipped by FG to Astellas prior to the issuance of the national health insurance price as determined by the Japanese Ministry of Health, Labour and Welfare (the "Listed Price"), Astellas shall pay for such quantities at a price equal to [ * ] of the estimate of the Listed Price as determined in good faith by FG and Astellas, subject to adjustment upon the issuance of the actual Listed Price. Upon the issuance of such Listed Price by the Japanese Ministry of Health, Labour and Welfare, Astellas shall pay to FG, or FG shall reimburse Astellas, as the case may be, the amount of any difference between the payment made for such Lead Compound at the estimated Listed Price and the payment required based upon the actual Listed Price. + +(b) For all other transfers of Lead Compound, except as set forth in subparagraphs (c) or (d) below, Astellas shall pay for such quantities at a price equal to [ * ] of the Listed Price. In the event that a new Listed Price has been notified to Astellas by the Japanese Ministry of Health, Labour and Welfare before implementation of the new Listed Price, then such new Listed Price shall be used for calculation of the price of Lead Compound to be shipped on and after the later to occur of (i) [ * ] before implementation of the new Listed Price, and (ii) the date upon which Astellas has amended the price of Lead Compound to wholesalers in response to such notification by the Japanese Ministry of Health, Labour and Welfare, even before implementation of the new Listed Price. + +(c) With respect to Lead Compound to be distributed as samples to medical providers and for which Astellas shall not receive any payment or other consideration, Astellas shall pay to FG the sum of its Fully Burdened Costs for amounts of Lead Compound shipped to Astellas; provided, however, that the parties shall mutually agree upon the amount of such samples for distribution without consideration in the Astellas Territory. + +(d) Upon the later of (i) the initial retail sale of a generic equivalent (as defined by the Japanese Ministry of Health, Labour and Welfare) of such Lead Compound in the Territory, and (ii) and the expiration of the last to expire of the FG Patents with respect to such Lead Compound effectively precluding third parties from selling said generic equivalent, for any quantities shipped by FG to Astellas, Astellas shall pay FG for such quantities [ * ] of the Sales Price; provided, however, that in the event that the payment of the [ * ] of the Sales Price would result in FG's [ * ] Percentage falling below [ * ], FG shall have the option to initiate a renegotiation of the transfer price upon notice to Astellas, in which case the parties shall use best efforts in good faith to renegotiate reasonable terms for the transfer price; provided, further, that in the event the transfer price is not renegotiated to FG's satisfaction or FG elects not to initiate a renegotiation, FG may elect to terminate its manufacturing obligations by written notice to Astellas, and FG and Astellas shall negotiate reasonable terms for transfer of manufacturing. During such period of renegotiation, FG shall transfer the Lead Compound to Astellas at a price -21- + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +CONFIDENTIAL EXECUTION COPY equal to the greater of [ * ] of the Sales Price and the price resulting if FG's [ * ] Percentage for such Lead Compound is equal to [ * ]. + +9.3 Payment. Any payments to be made with respect to the transfer of any Lead Compound in accordance with Section 9.1 or 9.2 above shall be immediately due to FG upon shipment, which shall be paid by Astellas to FG no later than [ * ] of the date of invoice, which invoice FG shall deliver to Astellas upon Delivery of Lead Compound to Astellas pursuant to Section 9.2(a), (b) or (c), and shall be made in U.S. dollars. For transfer of any Lead Compound in accordance with Section 9.1 or 9.2(c) above, FG shall deliver to Astellas, within ten (10) days of receipt of a firm commitment order from Astellas, an invoice for the estimated Fully Burdened Costs of the Lead Compound to be transferred to Astellas. Within [ * ] after the transfer of the Lead Compound to Astellas, FG shall provide a revised final invoice to Astellas that shall indicate the actual Fully Burdened Costs of the Lead Compound. If the actual Fully Burdened Costs are less than the estimated Fully Burdened Costs, FG shall include a reimbursement payment to Astellas for the difference between the initial estimated Fully Burdened Costs and the actual Fully Burdened Costs. If the actual Fully Burdened Costs are greater than the estimated Fully Burdened Costs, Astellas shall pay such difference within [ * ] of receipt of an invoice from FG for such amounts. For payments for the transfer of Lead Compound under Section 9.2(d) hereof, FG's invoice to Astellas shall be calculated based on the current Listed Price as set by the Japanese Ministry of Health, Labour and Welfare. Upon calculation of the Sales Price, Astellas shall submit, for any amounts actually sold, the Sales Price to FG, and FG shall credit Astellas for the difference between the invoice cost, cost calculated based on the Listed Price and the cost calculated based on the Sales Price. + +9.4 Reference Materials; Standard Materials. In exchange for the transfer by FG of any Reference Materials or Standard Materials for the purposes of conducting analytical, release, stability and other studies authorized under the Development Program, Astellas shall pay to FG, FG's Fully Burdened Costs of such materials as reasonably determined by FG. + +ARTICLE 10 ADDITIONAL PAYMENTS; BOOKS AND RECORDS + +10.1 Quarterly Reports. Astellas shall make quarterly reports to FG within sixty (60) days after the end of each calendar quarter (April 1 though June 30, July 1 through September 30, October 1 though December 31, January 1 through March 31), which reports shall include, (a) the Net Sales, unit shipments and other distributions, including samples, by Astellas, and its Affiliates and Sublicensees, in such calendar quarter and (b) such other information as may be reasonably requested by FG to ensure either proper payment by Astellas of amounts required under this Agreement or to calculate payments with respect to FG's Third Party Agreements. Concurrently with making such report, Astellas shall remit payment to FG for any payments due under this Agreement. + +10.2 Payment Method. All payments under this Agreement shall be made by bank wire transfer in immediately available funds to an account designated by the payee. All -22- + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +CONFIDENTIAL EXECUTION COPY such payments made by or on behalf of Astellas hereunder shall be made by a Japanese entity. All dollar amounts specified in this Agreement, and, except as specifically authorized under Section 10.3 hereof, all payments made hereunder, are and shall be made in U.S. dollars. Any payments due under this Agreement which are not paid by the date such payments are due under this Agreement shall bear interest to the extent permitted by applicable law at the U.S. prime rate per annum quoted in the "Money Rates" column of The Wall Street Journal (U.S., Western Edition) on the first business day after such payment is due, plus an additional [ * ], calculated on the number of days such payment is delinquent. This Section 10.2 shall in no way limit any other remedies available to either party. + +10.3 Currency Conversion. In the event that the amount of an Astellas payment obligation in U.S. dollars must be determined by the calculation of an underlying amount received by Astellas in Japanese Yen utilizing the U.S. dollar-Japanese Yen exchange rate (i.e., a transfer payment under Section 9.2(a), (b) or (d) hereof), currency conversion from Japanese Yen to U.S. dollars shall be made using the closing exchange rate reported in the Wall Street Journal (U.S. Western Edition) for the date on which the Lead Compound is Delivered to Astellas. If any such payment is not made by the due date, the exchange rate utilized for determination of such payment obligation shall be the exchange rate [ * ] reported in the Wall Street Journal (U.S. Western Edition) during the period from the date of invoice through the due date, not including any additional amounts owed under Section 10.2 hereof. + +10.4 Taxes + +10.4.1 Generally. Each party shall bear and, except as otherwise expressly provided in this Section 10.4, pay any and all taxes, duties, levies, and other similar charges (and any related interest and penalties), however designated, imposed on that party as a result of the existence or operation of this Agreement. If laws or regulations require that taxes be withheld, the paying party will (i) timely pay the taxes to the proper taxing authority, and (ii) send proof of payment to the other party within [ * ] following that payment. + +10.4.2 Certain Payments. Notwithstanding Section 10.4.1, all payments by Astellas required under this Agreement above, including under Section 6.1.1 are expressed as net amounts and shall be made free and clear of, and without reduction for, any withholding taxes, provided, however, that in the event that any withholding taxes are due on the payments Astellas shall make to FG under Sections 6.1.2 and 6.1.3, Astellas shall make such payments directly to the Japanese Tax Authority and shall be entitled to reduce the amount paid to FG by [ * ] of the amount of the withholding taxes paid to Japanese Tax Authority in respect of such payment, unless the amount of such withholding taxes is reduced by a decision of the Japanese tax authority, or is subsequently adjusted downward as result of appeal, in which event the next payment due hereunder, including, without limitation, a transfer payment or a payment upon termination, shall be increased by such amount. Any such taxes which are otherwise imposed on payments to FG shall be the sole responsibility of Astellas. Astellas shall provide FG with official receipts issued by the appropriate taxing authority or such other evidence as is reasonably requested by FG to establish that such taxes have been paid. Astellas and FG shall cooperate to minimize the withholding taxes due on the amounts payable by Astellas to FG hereunder to the extent permissible under law, including, but not limited to, -23- + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +CONFIDENTIAL EXECUTION COPY making appropriate application(s) to the tax authorities within the Astellas Territory. If possible, FG shall use its reasonable efforts to apply for the tax refund from U.S. tax authorities for the withholding taxes paid to the Japanese Tax Authority on the payment U.S. $[ * ] payment made by Astellas to FG on January 13, 2004 as set forth in Section 6.1 when such application for the tax refund becomes possible, and if FG has received any such tax refund, FG shall reimburse to Astellas for the amounts corresponding to the withholding taxes paid in Astellas' accounts as set forth above. + +10.5 Records; Inspections. Astellas shall keep, and require its Affiliates and Sublicensees to keep, complete, true and accurate books of accounts and records for the purpose of determining payments due pursuant to this Agreement. Such books and records shall be kept for at least [ * ] following the end of the calendar quarter to which they pertain. FG shall keep, and require its Sublicensee(s) to keep, complete, true and accurate books of accounts and records for the purpose of verifying the accuracy of the [ * ] Percentage and Fully Burdened Costs. Such records will be open for inspection at the principal place of business of each party (the "Inspected Party") during such [ * ] period by an independent auditor chosen by the other party (the "Inspecting Party") and reasonably acceptable to the Inspected Party for the purpose of verifying the amounts payable by Astellas to FG hereunder or the accuracy of the [ * ] Percentage and/or Fully Burdened Costs. Such inspections may be made no more than once each calendar year, at reasonable times and on reasonable notice. Any books of accounts or records shall not be inspected more than once. The independent auditor retained by the Inspecting Party shall be obligated to execute a reasonable confidentiality agreement with the Inspected Party prior to commencing any such inspection, which, among other customary clauses, contains the provisions to the effect that such auditor shall not disclose to the Inspecting Party any information other than as necessary to accomplish the purpose of the inspection. Inspections conducted under this Section 10.5 shall be at the expense of the Inspecting Party. Any underpaid or overcharged amounts that are discovered will be paid by the Inspected Party, and with interest on such underpaid or overcharged amounts at the rate set forth in Section 10.2 above. The parties will endeavor to minimize disruption of the Inspected Party's normal business activities to the extent reasonably practicable. + +ARTICLE 11 DUE DILIGENCE + +11.1 Astellas' Due Diligence. Astellas shall use its commercially reasonable efforts (i) to conduct any development work undertaken under the Development Program, and any and all clinical trials (including without limitation Phase III) required to obtain, and thereafter to take such other actions as are necessary to obtain, Marketing Approvals for any Lead Compound in the Astellas Territory as soon as practicable, and (ii) to launch each such Lead Compound in the Astellas Territory as soon as practicable after receiving Marketing Approval in the Astellas Territory for such Lead Compound. + +11.2 FG's Due Diligence. FG shall use its commercially reasonable efforts to conduct, and to the extent possible taking into account safety and other applicable issues, complete a Phase II clinical trial with FG-2216 or another Lead Compound in the FG Territory. -24- + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +CONFIDENTIAL EXECUTION COPY 11.3 Development Diligence + +11.3.1 Astellas shall pursue development of Indications according to the following terms: (i) Astellas shall pursue Commercialization in "Treatment of anemia in patients with chronic kidney disease undergoing dialysis" and "Treatment of anemia in patients with chronic kidney disease not undergoing dialysis"; (ii) Astellas shall notify FG within six (6) months of the execution of this Agreement whether it shall pursue Commercialization in [ * ]; (iii) Astellas shall notify FG within six (6) months of the date FG notifies Astellas that it has demonstrated Proof of Concept whether it will pursue Commercialization in [ * ]; (iv) Astellas shall notify FG within six (6) months of the date FG notifies Astellas that it has demonstrated Proof of Concept whether it will pursue Commercialization in [ * ]; and (v) Astellas shall notify FG, upon Marketing Approval for any Lead Compound in each of the following Indications, whether it will pursue Commercialization of such Indication: [ * ], and any other indications to be added hereafter to the definition of the Indication by mutual agreement; and (vi) if FG is pursuing Commercialization of [ * ], Astellas shall notify FG after Marketing Approval whether it shall pursue Commercialization of such Indication. Should Astellas inform FG that it does not wish to pursue Commercialization of any Indication, or should Astellas fail to meet the due diligence obligations under Section 11.3.2 for any Indication as set forth in Section 11.3.1(iv) or under Section 11.3.3 for any Indication as set forth in Section 11.3.1(v), such Indication shall no longer be considered an Indication for the purposes of this Agreement, and Astellas shall have no right or shall lose any right with respect to such Indication under this Agreement including, without limitation, the licenses granted under Sections 8.1 and 13.1 hereof. Each Indication for which Astellas is obligated to pursue Commercialization under Section 11.3.1(i) or for which it decides to pursue Commercialization under Sections 11.3.1(ii), (iii) or (iv) shall be a "Major Indication". + +11.3.2 In addition to the obligations set forth in Section 11.1 and 11.3, for each Major Indication, until such time as Astellas obtains Marketing Approval in the Astellas Territory for such Major Indication, with respect to each Lead Compound for each Major Indication, Astellas shall: + +(a) If required for development of a Lead Compound in an Indication, Initiate Phase I clinical trials within [ * ] after the later of (i) the Effective Date, for Indications for which FG has commenced clinical trials prior to the execution of this Agreement, and (ii) FG's or its Sublicensees Initiation of a Phase I clinical trial for other such Indications. -25- + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +CONFIDENTIAL EXECUTION COPY (b) Initiate Phase II clinical trials within the later of (i) [ * ] after FG's, or its Sublicensee's, Initiation of Phase II, (ii) [ * ] after Astellas' Completion of its Phase I clinical trial(s), (iii) if Astellas' obligations under this Subsection 11.3.2(b) are triggered upon FG's notification of demonstration of Proof of Concept in an Indication, [ * ] after the date Astellas notifies FG that it will pursue Commercialization in such Indication, and (iv) in the event Astellas' obligations under this Section 11.3.2(b) are triggered by the designation of a secondary Lead Compound as a primary Lead Compound, [ * ] after such designation. + +(c) Either notify FG of its intent to employ the Bridging Strategy, if applicable, or Initiate Phase III clinical trials within [ * ] of the later of (i) FG's, or its Sublicensee's Initiation of a Phase III clinical trial and (ii) Astellas' Completion of its Phase II clinical trial(s). + +11.3.3 For each of the Indications set forth in Section 11.3.1(v), Astellas shall Initiate Phase II clinical studies within [ * ] of its notification to FG that it will pursue Commercialization in such Indication. + +11.3.4 Astellas' diligence obligations set forth in Section 11.3.2 shall apply to all Lead Compounds designated by FG, provided, that for each Indication for which such diligence obligations apply, the diligence obligations shall only apply to the primary Lead Compound designated by FG, and for the secondary Lead Compound, Astellas' diligence obligations shall be limited to those set forth in Section 11.3.2(a) until the designation of the secondary Lead Compound as the primary Lead Compound, provided, further, upon such designation, that such diligence obligation shall be expanded to include the requirement that Astellas complete the Phase I clinical studies required to Initiate Phase II clinical studies in the Indication with such secondary Lead Compound. + +ARTICLE 12 MANUFACTURING RIGHTS + +12.1 Procedures. FG shall have the exclusive right to determine the methods and procedures for the manufacture of all Lead Compounds. If FG intends to make any change in the methods or procedures, including, without limitation, manufacturing process, analyzing process and/or site change for manufacture of the Lead Compounds, FG shall notify Astellas in writing of such intended change; provided, that if in Astellas' reasonable opinion, such change may lead to any amendment to the relevant Marketing Approval or Marketing Approval Application, Astellas shall use best efforts to (i) as soon as possible petition the Japanese Ministry of Health, Labor and Welfare to make the change without an amendment to the Marketing Approval or MAA and shall concurrently prepare an application for amendment to the Marketing Approval or MAA, and (ii) if the Japanese Ministry of Health, Labor and Welfare determines such an amendment is required, shall notify FG and submit the application for amendment immediately following notice of such requirement, and FG shall not make the intended change without a prior written consent from Astellas, such consent not to be unreasonably withheld or delayed, provided, further, that consent shall be deemed granted upon notice that an amendment is not required or approval of an amendment from the Japanese -26- + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +CONFIDENTIAL EXECUTION COPY Ministry of Health, Labor and Welfare. FG shall provide Astellas with all the data and information necessary for Astellas to amend the Marketing Approval or MAA in Astellas Territory and shall continue to supply Astellas with the Lead Compound as manufactured with the manufacturing methods and procedures or at the manufacturing site described in Astellas' (or its Affiliate's or Sublicensee's) then current Marketing Approval or MAA until Astellas will have finished the necessary amendment to the relevant Marketing Approval or MAA or received notice that an amendment is not required. + +12.2 FG Right. FG shall have the worldwide exclusive right (itself or through third party vendors) to manufacture (or have manufactured) Lead Compounds. Astellas and its Affiliates and Sublicensees shall not directly or indirectly make, produce or manufacture any Lead Compounds. + +12.3 Manufacture and Supply. FG shall have the exclusive right and obligation to supply the Lead Compounds to Astellas and its Affiliates and Sublicensees for all development and commercial purposes, and Astellas and its Affiliates and Sublicensees shall purchase such Lead Compounds exclusively from FG. It is understood that FG may engage subcontractors with respect to the manufacture of such Lead Compounds to fulfill its supply obligations to Astellas hereunder. In all cases, supply by FG of Lead Compounds hereunder shall be Ex Works (Incoterms 2000) the manufacturing facility. Subject to Section 8.3.5 hereof, nothing herein is intended to preclude FG from granting rights to supply or supplying (a) any Lead Compound outside of the Astellas Territory to any third party for use within or outside the Field, or (b) any compound Controlled by FG within the Astellas Territory except for a Lead Compound for the duration of its designation in compliance with the terms and conditions of this Agreement. + +12.4 Product Specifications. The Lead Compounds to be supplied by FG hereunder shall meet the Product Specifications. In addition to, but not in limitation of, the foregoing, FG and Astellas agree that upon Marketing Approval for any Lead Compound, FG's obligation to supply Astellas with Lead Compound shall be limited to, and all payment obligations set forth in Section 9.2 shall be based on, the supply of Bulk Product, unless otherwise agreed by the parties. The packaging for the Lead Compound to be distributed commercially by Astellas shall contain a clearly visible acknowledgment that the Lead Compound was manufactured by FG, and shall contain a registered trademark of the FG logo or other trademark approved by FG. + +12.5 Orders Forecast + +12.5.1 Orders for Non-Commercial Use. In connection with the supply of any Lead Compound for non-commercial use in the Territory, Astellas shall provide FG with a firm purchase order as early as possible prior to its requirements, and in no event less than [ * ] prior to the shipment or other release date(s) requested by Astellas for such Lead Compound. FG shall provide such Lead Compound to Astellas as soon as practicable within such time period, subject, prior to Marketing Approval, to the reasonable lead time requirements of third party contract manufacturers. All forecasts shall be prepared in good faith in order to facilitate FG's manufacture and shipment of the Lead Compound in compliance with this Agreement. -27- + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +CONFIDENTIAL EXECUTION COPY 12.5.2 Forecast and Order for Commercial Use. In connection with the supply of any Lead Compound for commercial use in the Astellas Territory upon FG's request, Astellas and FG shall negotiate in good faith appropriate forecasting and firm purchase order lead times, taking into consideration the reasonable notice requirements of FG and its third party manufacturers. All forecasts shall be prepared in good faith in order to facilitate FG's manufacture and shipment of the Lead Compound in compliance with this Agreement. + +12.6 Shipment. Astellas, or FG at Astellas' request if specified in a purchase order by Astellas, shall arrange for shipment of the Lead Compound as specified in each purchase order by Astellas, Ex Works (Incoterms 2000) the manufacturing facility. For purposes of this Agreement, and notwithstanding anything to the contrary contained within the term "Ex Works", it is hereby acknowledged and agreed that title and risk of loss shall transfer to Astellas from receipt by Astellas at the manufacturing facility. Astellas shall bear the costs of such carrier, including the costs of insurance of the shipment, and all customs, duties, sales taxes and other governmental charges related to the importation and sales of the Lead Compound. + +12.7 Inspection of Shipment/Right to Reject. Each shipment of Lead Compound from FG to Astellas shall contain such laboratory and quality control certificate as are necessary to show that the Lead Compound is in conformity with the Product Specifications. Astellas shall promptly inspect each shipment. In the event that any portion of the shipment fails to conform to the Product Specifications, Astellas shall notify FG within [ * ] of Astellas' receipt of such shipment. Such notice shall specify the manner in which the Lead Compound fails to meet the Product Specifications. In the absence of such notification, Astellas shall be deemed to have accepted the shipment. FG and Astellas agree to consult with each other to resolve any discrepancy between each other's determinations regarding any possible nonconformity of the Lead Compound. If such consultation does not resolve the discrepancy, the parties agree to nominate a reputable independent laboratory or other independent third party, in each case acceptable to both parties, to carry out tests on representative samples taken from such shipment, and the results of such tests shall be binding on both parties. If the results of such tests demonstrate that the Lead Compound does not meet the Product Specifications, then FG shall pay the costs of such tests; otherwise, Astellas shall pay for the costs of such tests. FG shall, at its expense, promptly replace any Lead Compound to the extent that, in accordance with this Section 12.7, it is determined that it does not conform to the Product Specifications. Unless otherwise instructed by FG, all non-conforming Lead Compound shall be returned to FG at the place of manufacture at FG's direction and at FG's expense. If Astellas detects at any time any defect in the Lead Compound which has not been found through Astellas' inspection, it shall notify FG to that effect within [ * ] of the discovery of such defect, and the procedures set forth above in this Section 12.7 shall be applied to such defective Lead Compound, provided, that FG shall only be responsible to pay for costs of defects that are the result of FG's gross negligence or willful misconduct. + +12.8 Inspection of Facilities. Astellas shall have the right, upon reasonable advance notice and during regular business hours, to inspect and audit, either by itself or through its Affiliates or consultants, the facilities (including any facilities of sub-contractors) being used by FG for production of the Lead Compound to assure compliance with applicable laws, rules and regulations, including, without limitation, Japanese regulatory standards and FG quality control procedures ("Relevant Standards"). FG shall also reasonably comply with inspection -28- + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +CONFIDENTIAL EXECUTION COPY requests of the Japanese Ministry of Health, Labor & Welfare. Such inspection and audit shall be conducted at Astellas' sole cost and expense in a manner so as to minimize disruption of FG's, or its subcontractor's or Sublicensee's, business operations. FG shall, within [ * ] after FG's receipt of written notice from Astellas detailing any deficiencies which may be noted in any such audit which relate to the Relevant Standards use good faith efforts to remedy such deficiencies, and submit a plan to the Astellas outlining steps proposed to be taken. + +12.9 Recall. In the event that Astellas deems it necessary to recall any Lead Compound from the market, it may do so in its sole discretion, after notification to the FG. The costs and expenses for such recall shall be borne by Astellas unless caused by a failure for which FG is required to indemnify Astellas pursuant to Section 17.3, or by FG's gross negligence or willful misconduct, in which event it shall be borne by FG. + +12.10 Warranty. FG represents and warrants that the Lead Compounds to be supplied to Astellas under this Agreement shall conform to the Product Specifications and shall, as appropriate, be manufactured in compliance with GMP Guidelines. Subject to Sections 12.9 and 17.3 hereof, FG's sole obligation and Astellas' sole remedy with respect to Lead Compound which does not meet the warranty contained herein is limited to replacement of such Lead Compound and reimbursement of Astellas' out of pocket expenses for shipping to FG at the address designated by FG. + +12.11 Interruption in Supply. For any particular Lead Compound, in order to minimize any interruptions in supply hereunder, FG and Astellas agree that within [ * ], FG shall maintain two separate, validated manufacturing sites (which may either be its own manufacturing facilities or facilities of a contract manufacturer) for such Lead Compound. + +12.12 Reference and Standard Materials. For any Lead Compound provided to Astellas hereunder, upon Astellas' request and pursuant to Section 9.4 hereof, FG shall provide to Astellas reasonable quantities of reference materials, including analogs, metabolites, impurities, degradates and radio-labeled compounds ("Reference Materials") and standard materials, i.e. defined, highly purified Lead Compound ("Standard Materials") for such Lead Compound for the purposes of conducting analytical, release, stability and other studies as may be authorized by the JDC under the Development Program. + +ARTICLE 13 LICENSE GRANTS + +13.1 Grant to Astellas. Subject to the terms and conditions of this Agreement including Article 12 above, FG hereby grants to Astellas an exclusive license under the FG Technology to: use, package, sell, have sold, import, market and otherwise distribute the Lead Compounds for use solely in the Field in the Astellas Territory + +13.2 Sublicenses. The licenses granted under Section 13.1 above include the right to grant and authorize sublicenses, subject to the requirements of this Agreement and Section 7.2. Notwithstanding the foregoing, Astellas shall not have the right to authorize a Sublicensee to market, sell or distribute Lead Compounds without FG's prior written consent -29- + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +CONFIDENTIAL EXECUTION COPY (which consent shall not be unreasonably withheld). For the purposes of the foregoing, and without limitation, it shall be deemed reasonable for FG to withhold consent for competitive concerns. + +13.3 No Rights Beyond Lead Compounds. Except as expressly provided herein, nothing in this Agreement shall be deemed to grant to Astellas rights in FG Technology other than the rights granted hereunder to the Lead Compounds, or for applications outside the Field or outside the Astellas Territory, or to manufacture Lead Compounds; nor shall any provision of this Agreement be deemed to restrict FG's right to exploit any FG Technology and/or the Lead Compounds outside the Astellas Territory. + +13.4 Expanded Field Negotiation. Following the signing of this Agreement, FG agrees to negotiate in good faith with Astellas for a license to develop compounds for the Expanded Field in the Astellas Territory, exclusively for a period of [ * ] following such date, and non- exclusively thereafter until the execution of a license agreement with a third party to develop compounds for the Expanded Field. FG and Astellas hereby agree that FG's obligation to negotiate non-exclusively for the Expanded Field shall not constitute a right of first offer, right of first refusal, right of first negotiation or any obligation to enter into any agreement with Astellas at any time, and the failure of such negotiations to result in an agreement between FG and Astellas with respect to the Expanded Field shall not constitute a breach of this Agreement. + +ARTICLE 14 INTELLECTUAL PROPERTY + +14.1 Ownership of Inventions. Subject to Section 14.1.1, title to all inventions and other intellectual property made related to (i) the Development Program, (ii) the Lead Compounds, (iii) FG Technology or FG Confidential Information, (iv) the Field, or (v) the Expanded Field (subsections 14.1(i)-(v), collectively, the "Protected Field") shall be owned by or is hereby assigned to FG; provided, however that Astellas shall own inventions of general applicability relating solely to drug delivery systems created exclusively by Astellas under subsection 14.1(i), excluding inventions related to or based on subsections 14.1(ii), (iii), (iv), or (v), and provided, further, that Astellas hereby grants to FG a worldwide, fully paid non-exclusive license with the right to sublicense to practice such inventions with respect to the FG Technology. Astellas agrees to execute any and all assignments and other documents necessary to effectuate the foregoing. + +14.1.1 Notwithstanding Section 14.1, in the event that Astellas develops, completely independently from any FG Technology and/or any other FG materials, confidential information, intellectual property or other related information provided by or on behalf of FG to Astellas under this Agreement or any other agreement between FG and Astellas relating to the subject matter hereof, any inventions or intellectual property rights related to the Field or the Expanded Field, [ * ], Astellas shall own such intellectual property and hereby grants to FG and its Sublicensees a non-exclusive, royalty-free, irrevocable license to such intellectual property for the FG Territory. Astellas agrees to execute any and all assignments and other documents necessary to effectuate the foregoing. -30- + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +CONFIDENTIAL EXECUTION COPY 14.2 Patent Prosecution + +14.2.1 FG Inventions. FG shall control all Prosecution and Interference Activities pertaining to FG Patents and patent applications and patents related to its, its Affiliate's or its Sublicensee's inventions in the Protected Field worldwide using counsel of its choice and shall bear the costs of such Prosecution and Interference Activities, provided, however, that; and Astellas shall reimburse to FG, within [ * ] of receipt by Astellas of invoice therefor, any such costs to the extent incurred in connection with or reasonably allocable to the FG Patents registered and/or to be registered in the Astellas Territory and related to the Field and the Lead Compounds, provided, further, that, with respect to patents or patent applications excluding those covering composition of matter claims and all patents listed on Exhibit A hereto as of the Effective Date, Astellas may postpone such reimbursement until the respective FG Patent will have been registered in the Astellas Territory if [ * ], on condition that once the respective FG Patent has been registered in the Astellas Territory, Astellas shall pay to FG such costs, plus interest to the extent permitted by applicable law at the U.S. prime rate per annum quoted in the "Money Rates" column of The Wall Street Journal (U.S., Western Edition), calculated in each case from the date such costs were incurred, plus an additional [ * ] thereof. + +14.2.2 Astellas Inventions. Astellas shall not file for or otherwise seek to obtain (directly or indirectly) patent or other intellectual property protection for inventions that are related to the Protected Field, without the prior written consent of FG, which may be withheld at FG's sole discretion, subject to Section 14.1.1, and provided also that Astellas may file for or otherwise seek to obtain patent protection for inventions related to drug delivery systems as described in Section 14.1. To the extent that FG consents to the filing of any patent application or other intellectual property protection related to the foregoing, such patent application or other intellectual property protection shall be subject to Section 14.1, unless otherwise agreed in writing. + +14.2.3 Cooperation. Astellas shall cooperate with and assist FG in connection with Prosecution and Interference Activities and shall use best efforts to consult with FG regarding the prosecution and maintenance of the FG Patents for the FG Territory and the Astellas Territory for those FG Patents for which Astellas or its Affiliates, Sublicensees or investigators are inventors, except solely for inventions (i) of general applicability relating solely to drug delivery systems created by Astellas under subsection 14.1(i), or (ii) created in compliance with Section 14.1.1 as determined solely by FG in good faith. + +14.3 Defense of Third Party Infringement Claims. If the development, manufacture, sale or use of any Lead Compound pursuant to this Agreement results in a claim, suit or proceeding (collectively, "Actions") alleging patent infringement against FG or Astellas (or their respective Affiliates or Sublicensees), such party shall promptly notify the other party hereto in writing. The party subject to such Action (for purposes of this Section 14.3, the "Controlling Party") shall have the exclusive right to defend and control the defense of any such Action using counsel of its own choice; provided, however, that if such Action is directed to the subject matter of a patent of the other party (i.e., for Astellas, a FG Patent), such other party may participate in the defense and/or settlement thereof at its own expense with counsel of its choice. -31- + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +CONFIDENTIAL EXECUTION COPY Except as agreed in writing by Astellas and FG, Astellas shall not enter into any settlement relating to a Lead Compound, if such settlement admits the invalidity or unenforceability, or limits any claim, of any patent within the FG Technology. The Controlling Party agrees to keep the other party hereto reasonably informed of all material developments in connection with any such Action. Any cost, liability or expense associated with such action (including amounts paid in settlement) (together, "Expenses") shall be borne by the Controlling Party; provided, that if Astellas is the Controlling Party, and the Action is related to Future Third Party Intellectual Property, with respect to Expenses related solely to such Future Third Party Intellectual Property, it shall be entitled to deduct up to [ * ] of the Expenses incurred on an annual basis from [ * ] in such year under this Agreement, provided, however, that (i) the total amount deducted shall not exceed [ * ] thereunder, and (ii) notwithstanding (i) above, Astellas' right to deduct Expenses incurred shall be further limited such that in no event shall the sum of (a) the Expenses deducted by Astellas under this Section 14.3, and (b) the consideration FG contributes for the acquisition of intellectual property from Third Party Licensors for the Astellas Territory as set forth in Section 14.5, exceed [ * ] hereunder, and, provided further, that if FG is the Controlling Party, it shall be entitled to reimbursement by Astellas of [ * ] of such Expenses, as incurred. Notwithstanding the foregoing, Astellas shall be solely responsible (without right of deduction) for all Expenses related to any Action relating to Preexisting Third Party Intellectual Property. + +14.4 Enforcement. Subject to the provisions of this Section 14.4, in the event that FG or Astellas reasonably believes that any FG Technology necessary for the development, manufacture, use or sale of a Lead Compound is infringed or misappropriated by a third party or is subject to a declaratory judgment action arising from such infringement, in each case with respect to the development, manufacture, sale or use of a product within the Field and within the Astellas Territory, Astellas or FG (respectively) shall promptly notify the other party hereto. Promptly after such notice the parties shall meet to discuss the course of action to be taken with respect to an Enforcement Action (as defined below) with respect to such infringement or misappropriation, including the control thereof and sharing of costs and expenses related thereto, for the purposes of entering into a litigation agreement setting forth the same ("Litigation Agreement"). If the parties do not enter such Litigation Agreement, FG shall have the initial right (but not the obligation) to enforce the intellectual property rights with respect to the FG Technology, or defend any declaratory judgment action with respect thereto (such action, for purposes of this Section 14.4, an "Enforcement Action"). + +14.4.1 Information. Absent a Litigation Agreement, the party initiating or defending any such Enforcement Action within the Field shall keep the other party hereto reasonably informed of the progress of any such Enforcement Action, and such other party shall have the right to participate with counsel of its own choice at its own expense. + +14.4.2 Enforcement Costs; Recoveries. Absent a Litigation Agreement, FG shall have the initial right to initiate such an Enforcement Action, and shall notify Astellas within a reasonable time whether it elects to exercise such right. In the event that FG elects to initiate or defend such Enforcement Action, FG shall be responsible for [ * ] of the costs and expenses while Astellas shall be responsible for [ * ] of the costs and expenses, and all amounts recovered shall first be applied to reimbursement of each -32- + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +CONFIDENTIAL EXECUTION COPY party's costs and expenses with the remainder to be allocated to FG and Astellas at the ratio of [ * ] and [ * ]. In the event that FG elects not to initiate or defend such Enforcement Action, Astellas shall have the right to initiate or defend such Enforcement Action in its own name, and to the extent permitted under Third Party Agreements, in the name of FG or in the names of both FG and Astellas, in which case, Astellas shall be responsible for [ * ] of the costs and expenses while FG shall be responsible for [ * ] of the costs and expenses, and all amounts recovered shall first be applied to reimbursement of each party's costs and expenses with the remainder to be allocated to Astellas and FG at the ratio of [ * ] and [ * ]. + +14.4.3 Cooperation in Enforcement Action. Absent a Litigation Agreement, at the request of the party which has the right to initiate or defend an Enforcement Action, the other party shall reasonably cooperate in the Enforcement Action, such cooperation to include, without limitation, furnishing records, information and testimony, and attending conferences, discovery proceedings, hearings, trials and appeals; provided, that the requesting party shall reimburse to the cooperating party for the out-of-pocket expenses incurred for such cooperation pursuant to the reimbursement regime set forth in Section 14.4.2. + +14.5 Third Party Agreements + +14.5.1 Future Agreements. It is understood that FG may find it necessary to utilize in connection with a Lead Compound intellectual property that is controlled by a non-Affiliate third party (such party, a "Third Party Licensor"), in addition to or in lieu of the FG Technology existing as of the Effective Date. FG shall have the right to obtain (by purchase, license, or otherwise) rights to such intellectual property with the right to sublicense to Astellas. In the event that FG determines that it must obtain such rights, it shall provide notice and submit a description of such rights to Astellas, and shall discuss with Astellas the need to obtain such rights. Astellas shall inform FG within [ * ] of receipt of such notice whether it believes it is necessary to obtain such rights for the Astellas Territory and wishes to obtain such rights. In the event Astellas determines to obtain such rights, FG shall obtain a worldwide license for the rights under such terms and conditions as are [ * ], and such intellectual property of the Third Party Licensor shall be deemed to be the part of FG Technology, provided, however, that, notwithstanding anything contained in this Agreement (i) for Preexisting Third Party Intellectual Property, [ * ] shall pay [ * ] of all consideration due in connection with the acquisition of such rights for the Astellas Territory, and (ii) for Future Third Party Intellectual Property, [ * ] shall [ * ] pay [ * ] of all consideration due in connection with the acquisition of such rights for the Astellas Territory, provided, however, notwithstanding FG's obligation to contribute to the consideration due for Future Third Party Intellectual Property under (ii) above, FG's obligation to contribute shall be limited such that in no event shall the sum of (a) the consideration FG contributes for the acquisition of intellectual property from Third Party Licensors for the Astellas Territory, and (b) the Expenses for which Astellas has the right to deduct under Section 14.3 exceed [ * ] hereunder, and Astellas shall be responsible for all consideration related to the acquisition of rights from Third Party Licensors in excess of such amount. In the event Astellas determines not to obtain such rights for the Astellas Territory, FG shall obtain a license for the FG Territory but not the Astellas Territory, and Astellas shall be solely responsible for the defense of any infringement -33- + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +CONFIDENTIAL EXECUTION COPY Action, for all Expenses related to any such Action, and any right of Astellas to deduct Expenses under this Agreement against payments required to be made to FG hereunder shall not apply to any action brought with respect to such rights. + +14.5.2 Payment; Reports. If FG is obligated to pay amounts to a Third Party Licensor, FG shall notify Astellas [ * ] in advance of the due date of such payment obligation (or such later date as FG may determine), and Astellas shall reimburse its share of such payments within [ * ] after receipt of notice therefor. + +14.5.3 Limitation. To the extent that FG Patents includes any intellectual property licensed under FG's License Agreement with Imigen, Inc. relating to HIF stabilization technology dated as of October 30, 2003, and amended as from time to time of which a redacted copy shall have been provided to Astellas prior to the Effective Date, Astellas shall be considered a sublicensee and be subject to the applicable requirements thereunder. + +14.5.4 Compliance with Third Party Agreements. Notwithstanding anything to the contrary contained herein, Astellas agrees to comply with the requirements (upon sublicensees or otherwise) of FG's License Agreement with Imigen, Inc. relating to HIF stabilization technology dated as of October 30, 2003. In addition, Astellas agrees to comply with the requirements (upon sublicensees or otherwise) of any future Third Party Agreements for which Astellas obtains rights through an FG license pursuant to Section 14.5.1 hereof. + +ARTICLE 15 REPRESENTATIONS AND WARRANTIES + +15.1 FG Warranties. FG warrants and represents to Astellas, as of the execution of this Agreement, that (i) it is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware; (ii) the execution, delivery and performance of this Agreement have been duly authorized by all necessary corporate action on the part of FG; (iii) there is no pending litigation which alleges or any communication alleging that Commercialization of any Lead Compound or any compound Controlled by FG for use in the Field has infringed or misappropriated the intellectual property rights of any Third Party or has been obtained by misappropriating any Third Party's intellectual property right; and (iv) subject to the terms and conditions of the agreements for the FG Acquired Patents, FG has complete title to and ownership of the FG Patents, free and clear from any mortgages, pledges, liens, security interests, conditional and installment sale agreements, encumbrances, charges or claims of any kind. + +15.2 Astellas Warranties. Astellas warrants and represents to FG, as of the execution of this Agreement, that (i) it is a corporation duly organized, validly existing and in good standing under the laws of Japan; and (ii) the execution, delivery and performance of this Agreement have been duly authorized by all necessary corporate action on the part of Astellas. + +15.3 Disclaimer of Warranties. EXCEPT AS OTHERWISE SET FORTH HEREIN, FG AND ASTELLAS EXPRESSLY DISCLAIM ANY WARRANTIES OR CONDITIONS, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, WITH RESPECT TO -34- + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +CONFIDENTIAL EXECUTION COPY THE DEVELOPMENT PROGRAM, OR THE FG TECHNOLOGY OR LEAD COMPOUNDS, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE, VALIDITY OF FG TECHNOLOGY, PATENTED OR UNPATENTED, AND NONINFRINGEMENT OF THE INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES. + +ARTICLE 16 CONFIDENTIALITY + +16.1 Confidential Information. Except as expressly provided herein, the parties agree that the receiving party shall not publish or otherwise disclose and shall not use for any purpose other than this Agreement any information furnished to it by the other party hereto pursuant to this Agreement which if disclosed in tangible form is marked "Confidential" or with other similar designation to indicate its confidential or proprietary nature or if disclosed orally is indicated orally to be confidential or proprietary by the party disclosing such information at the time of such disclosure and is confirmed in writing as confidential or proprietary by the disclosing party within a reasonable time after such disclosure (collectively, "Confidential Information"). Notwithstanding the foregoing, Confidential Information shall not include information that, in each case is demonstrated by written documentation: + +(a) was already known to the receiving party, other than under an obligation of confidentiality directly or indirectly to the disclosing party at the time of disclosure hereunder; + +(b) was generally available to the public or otherwise part of the public domain at the time of its disclosure to the receiving party hereunder; + +(c) became generally available to the public or otherwise part of the public domain after its disclosure and other than through any act or omission of the receiving party in breach of this Agreement; or + +(d) was subsequently lawfully disclosed to the receiving party by any third party without any confidentiality obligation directly or indirectly to the disclosing party or developed by the receiving party without reference to any information or materials disclosed by the disclosing party. + +It is agreed and understood that all matters discussed and presented at the meetings of the JDC shall be considered Confidential Information hereunder, subject to the terms and conditions of this Agreement. + +16.2 Permitted Disclosures. Notwithstanding the provisions of Section 16.1 above, each party hereto may disclose the other party's Confidential Information to the extent such disclosure is reasonably necessary to exercise the rights granted to it, or reserved by it, under this Agreement (including, without limitation, entering into and/or performing business or scientific relationships with respect to products outside the Field as permitted hereunder), in filing or prosecuting patent applications, prosecuting or defending litigation, complying with applicable governmental regulations, submitting information to tax or other governmental -35- + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +CONFIDENTIAL EXECUTION COPY authorities (including regulatory authorities), or conducting clinical trials hereunder with respect to Lead Compounds, provided that if a party is required by law to make any such disclosure of the other party's Confidential Information, to the extent it may legally do so, it will give reasonable advance notice to the latter party of such disclosure and, save to the extent inappropriate in the case of patent applications or otherwise, will use its reasonable efforts to secure confidential treatment of such Confidential Information prior to its disclosure (whether through protective orders or otherwise). + +16.3 Clinical Data. Except as expressly permitted under Sections 7.2 and 16.2, and for publications or disclosures in accordance with Section 5.2, neither party shall disclose to third parties pre-clinical data, clinical data or regulatory filings, comprising Confidential Information of the other party. + +16.4 Press Releases. Except as may already be, or is agreed to be, publicly disclosed, in the event that either party proposes to release a press release with respect to this Agreement or the Development Program, such party shall obtain the prior written consent of the other party, which shall not be unreasonably withheld. + +ARTICLE 17 INSURANCE; INDEMNIFICATION + +17.1 Insurance. Each party shall secure and maintain in effect during the term of this Agreement and for a period of five (5) years thereafter insurance policy(ies) underwritten by a reputable insurance company and in a form and having limits standard and customary for entities in the biopharmaceutical industry for exposures related to the Lead Compounds. Such insurance shall include general liability, clinical trial liability and products liability coverage with respect to such party's performance of the Development Program and commercialization of Lead Compounds hereunder. Upon request by the other party hereto, certificates of insurance evidencing the coverage required above shall be provided to the other party. + +17.2 Indemnification of FG. Astellas shall indemnify each of FG and its Affiliates and the directors, officers, and employees of FG and such Affiliates and the successors and assigns of any of the foregoing (the "FG Indemnitees"), and hold each FG Indemnitee harmless from and against any and all liabilities, damages, settlements, claims, actions, suits, penalties, fines, costs or expenses (including, without limitation, reasonable attorneys' fees and other expenses of litigation) incurred by any FG Indemnitee to the extent not otherwise covered by insurance, arising from or occurring as a result of any claim, action, suit, or other proceeding brought by third parties against a FG Indemnitee arising from or occurring as a result of any development, testing, manufacture, importation, use, offer for sale, sale or other distribution of any Lead Compound by or for the benefit of Astellas or its Affiliates or Sublicensees, distributors or agents (including, without limitation, product liability and infringement claims) except to the extent caused by failure of the Lead Compound supplied by FG to meet the Product Specifications in effect at the time of manufacture, or material deviation by FG or its sub-contractor from GMP Guidelines in manufacturing the Lead Compound, or FG's breach of this Agreement or willful misconduct. -36- + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +CONFIDENTIAL EXECUTION COPY 17.3 Indemnification of Astellas. FG shall indemnify each of Astellas and its Affiliates and the directors, officers, and employees of Astellas and such Affiliates and the successors and assigns of any of the foregoing (the "Astellas Indemnitees"), and hold each Astellas Indemnitee harmless from and against any and all liabilities, damages, settlements, claims, actions, suits, penalties, fines, costs or expenses (including, without limitation, reasonable attorneys' fees and other expenses of litigation) incurred by any Astellas Indemnitee to the extent not otherwise covered by insurance, arising from or occurring as a result of any claim, action, suit, or other proceeding brought by third parties against an Astellas Indemnitee to the extent caused by failure of the Lead Compound supplied by FG to meet the Product Specifications in effect at the time of manufacture, or material deviation by FG or its sub-contractor from GMP Guidelines in manufacturing the Lead Compound, except in each case in this Section 17.3 to the extent caused by Astellas' breach of this Agreement or willful misconduct. + +17.4 Procedure. A party (for purposes of this Section 17.4, the "Indemnitee") that intends to claim indemnification under any provision of this Agreement shall promptly notify the indemnifying party (the "Indemnitor") in writing of any claim, action, suit, or other proceeding brought by third parties in respect of which the Indemnitee or any of its Affiliates, or their directors, officers, employees, successors or assigns intend to claim such indemnification hereunder. As between the parties hereto the Indemnitor shall have the right to control the defense and settlement of such claim, action, suit, or other proceeding; provided, that the Indemnitee shall have the right to participate in such defense or settlement with counsel of its own choosing at its expense. The Indemnitee shall not make any settlement of any loss, claim, damage, liability or action without the consent of the Indemnitor, to the extent such consent is not withheld unreasonably or delayed. The failure to deliver written notice to the Indemnitor within a reasonable time after the commencement of any such action, if prejudicial to its ability to defend such action, shall relieve such Indemnitor of any liability to the Indemnitee under this Article 17 but the omission so to deliver written notice to the Indemnitor shall not relieve the Indemnitor of any liability that it may have to any Indemnitee otherwise than under this Article 17. Without limiting the foregoing, the Indemnitee shall keep the Indemnitor fully informed of the progress of any claim, action, suit, or other proceeding for which it intends to claim indemnification under this Article 17. + +ARTICLE 18 TERM AND TERMINATION + +18.1 Term. This Agreement shall become effective as of the Effective Date and, shall continue in full force and effect until terminated pursuant to this Article 18. + +18.2 Termination for Cause or Technical Product Failure + +18.2.1 Material Breaches. FG may forthwith terminate this Agreement in the event Astellas fails to make any payment due under Articles 6, 9 or 14, within [ * ] following receipt of written notice of such default, or materially breaches its obligations under Articles 8 or 14, and fails to cure such breach within [ * ] following receipt of written notice of such default. Astellas may forthwith terminate this Agreement in the -37- + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +CONFIDENTIAL EXECUTION COPY event FG materially breaches its obligations under Article 7 or Article 12, and fails to cure such breach within [ * ] following receipt of written notice of such default. Any termination shall become effective at the end of such [ * ] or [ * ] period unless the defaulting or breaching party (or any other party on its behalf) has cured any such default prior to the expiration of the [ * ] or [ * ] period, as the case may be. + +18.2.2 Independent Activities. Notwithstanding anything contained in Section 8.3.2 or Section 14.1.1, in the event that Astellas Commercializes any molecules for the Field or the Expanded Field, except for actions taken within the Field in the course of the exercise of the licenses granted under Sections 8.1 and 13.1 hereof and expressly authorized under this Agreement, even if FG determines that Astellas' activities are completely independent of any FG Technology and/or any other FG materials, confidential information, intellectual property or other related information provided by FG to Astellas under this Agreement or any other agreement between FG and Astellas relating to the subject matter hereof, FG shall have the right at its sole discretion to terminate this Agreement upon [ * ] notice to Astellas. + +18.2.3 Technical Product Failure. Astellas may terminate this Agreement upon [ * ] notice to FG upon Technical Product Failure. + +18.2.4 Development Diligence Failure. FG may terminate this Agreement upon thirty (30) days notice to Astellas in the event Astellas fails to meet any of its development diligence requirements as set forth in Article 11 hereof, provided, however, that with respect to the development diligence obligations set forth in Section 11.3.2, such termination right on behalf of FG shall be triggered only upon Astellas' failure to meet such development diligence obligations for a Major Indication (except those Major Indications set forth in Section 11.3.1(iv)), and Astellas may terminate this Agreement upon thirty (30) days notice to FG in the event FG fails to meet the development diligence requirement as set forth in Section 11.2 hereof. + +18.2.5 Other Material Non-Performance/Misrepresentation. Other than a breach giving rise to a termination right as set forth in Sections 18.2.1 or 18.2.4, or a termination pursuant to a Technical Product Failure as set forth in Section 18.2.3 in the event of (i) a party's breach or default in any other material respect in the performance or observance of any other material term, covenant or provision of this Agreement, or (ii) if any representation by a party contained in this Agreement shall prove to have been incorrect in any material respect when made, resulting in material adverse consequences for the other party, (any such default or material incorrect representation a "Material Non-Performance"), such Material Non-Performance shall be remedied only as provided in Section 18.7.4 below. + +18.3 Termination in case of Generic Competition. In the event generic equivalents has captured the [ * ] of the quantity of Lead Compound sold by Astellas during the [ * ] preceding such termination calculated on a annual basis; or in the event, after the entry into the market of generic equivalents, that Astellas' annual sales fall below $[ * ] for all Lead Compounds, Astellas may terminate this Agreement upon [ * ] written notice to FG; provided, that Astellas does not Commercialize any Lead Compound after such termination until the expiration of the last to expire FG Patents applicable to such Lead Compound. -38- + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +CONFIDENTIAL EXECUTION COPY 18.4 Negative Advice from Authorities. Astellas may terminate this Agreement upon [ * ] notice to FG in the event Astellas has commenced Phase III clinical studies in those of the following Indications that FG is developing: "Treatment of anemia in patients with chronic kidney disease undergoing dialysis", "Treatment of anemia in patients with chronic kidney disease not undergoing dialysis" and [ * ], and the Japanese Ministry of Health, Labor & Welfare has provided written notification that it will not approve the Lead Compounds in such Indications or the JDC determines, after the submission by Astellas of Marketing Approval Applications for such Indications, and the receipt of a response or request of the Japanese Ministry of Health, Labor & Welfare that contains development demands that are so onerous that it is not reasonable to continue with Development of the Lead Compounds in such Indications. + +18.5 Admission of Invalidity or Unenforceability of FG Patent. Astellas may terminate this Agreement upon [ * ] notice to FG in the event that FG enters into a settlement under Section 14.3 that admits the invalidity or unenforceability of all patents within the FG Technology, including patents covering Lead Compounds. + +18.6 Termination upon Notice. Subject to Section 18.7.2, Astellas may terminate this Agreement upon six (6) months notice to FG for any reason or no reason. + +18.7 Effect of Termination + +18.7.1 Accrued Obligations. Termination of this Agreement for any reason shall not release either party hereto from any liability which, at the time of such termination, has already accrued to the other party or which is attributable to a period prior to such termination nor preclude either party from pursuing all rights and remedies it may have hereunder or at law or in equity with respect to any breach of this Agreement. + +18.7.2 Termination. In the event of (a) a termination by Astellas under Section 18.6 during the period from the execution of this Agreement until the last to expire of the FG Patents, or (b) by FG under Section 18.2.1, 18.2.2, 18.2.4 or 18.2.5 hereof, Astellas shall, upon the effective date of such termination, pay to FG (i) a termination fee of $[ * ] U.S. dollars and (ii) any payments to which FG is otherwise entitled to receive hereunder in the period from the date of such termination notice until the [ * ]. + +18.7.3 Survival. Articles 1, 5, 14, 16, 17, 18, 19 and 20, and Sections 8.3.3 and 10.5, shall survive any termination of this Agreement, along with FG's rights and Astellas' obligations (but not Astellas' rights or FG's obligations, except to the extent required by the Japanese Ministry of Health, Labor and Welfare) under Section 5.1.1 and Article 7. In addition, the following provisions shall survive termination of this Agreement for any reason: Astellas shall assign or cause to be assigned to FG (or if not so assignable, Astellas shall take all reasonable actions to make available to FG) all regulatory filings and registrations (including MAAs and Marketing Approvals) with respect to the Lead Compounds that have been filed or made by or under authority of Astellas, and the rights in trademark with respect to each Lead Compound as provided for in Section 4.4.1, in each case such assignment (or availability) -39- + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +CONFIDENTIAL EXECUTION COPY shall be made within [ * ] after the notice of termination. From and after the date of a notice of termination, FG shall have no further obligations under this Agreement beyond those obligations that survive termination in such events as specified in this Section 18.7.3. + +18.7.4 Material Non-Performance. In the event of any Material Non-Performance by a party, the other party shall, without reasonable delay following discovery of such Material Non-Performance notify the defaulting party in writing, and the parties shall consult with each other in good faith to endeavor to agree upon the most effective means to cure such Material Non-Performance and, if necessary, to effect a remedy in favor of the non-defaulting party for the consequences of such Material Non-Performance by the defaulting party (collectively, the "Resolution"). In the event (i) the parties are unable to agree upon Resolution, or (ii) the defaulting party, in the exercise of reasonable diligence shall have been unable to remedy such Material Non-Performance, then in either such event the remedy of the non-defaulting party with respect to the Material Non-Performance by the defaulting party shall be determined by arbitration pursuant to Section 19.2 hereof, and the arbitrators shall be authorized to fashion such remedy, including equitable relief, which may include termination of this Agreement in whole or in part, as the arbitrators shall determine appropriate, except that termination of this Agreement in whole shall only be the remedy of last resort. + +18.7.5 License Upon Termination. In the event of a termination of this Agreement, FG shall have an irrevocable, exclusive, license, with the right to grant and authorize sublicenses, to any trademarks used by Astellas in association with the Lead Compounds hereunder to make, use, sell, import and otherwise exploit products within the Field in the Astellas Territory. Such license shall be royalty-free, provided, however, if such trademark is not a global trademark (i.e. materially different from the trademark used in the FG Territory) and either (i) if Astellas terminates this Agreement under Section 18.2.1 or 18.2.4, or (ii) if this Agreement is terminated in accordance with the procedure as provided for in Section 18.2.5 as a result of FG's Material Non-Performance, in which event FG and Astellas shall negotiate in good faith a reasonable fee for such license. + +ARTICLE 19 DISPUTE RESOLUTION + +19.1 Disputes. If the parties are unable to resolve any dispute between them regarding the breach, interpretation or enforcement of this Agreement, either party may, by written notice to the other, have such dispute referred to their Authorized Designees, provided that such individuals are not directly involved in the dispute (i.e., the dispute occurs at the JDC, such individuals shall not be members of the JDC), for good faith negotiations. If after [ * ] such executives are unable to resolve the issue, each of Astellas and FG shall have the right to refer the matter to mediation upon notice to the other party, and the parties shall choose a mediator within [ * ] of the receipt of such notice, and shall negotiate in good faith to resolve such matter through the mediator within [ * ] thereafter. + +19.2 Full Arbitration. Any dispute, controversy or claim arising out of or relating to the breach, interpretation or enforcement of this Agreement, including disputes relating to termination of this Agreement, shall be settled by binding arbitration in the manner -40- + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +CONFIDENTIAL EXECUTION COPY described in this Section 19.2. The arbitration shall be conducted pursuant to the rules of Arbitration of the International Chamber of Commerce then in effect. Notwithstanding those rules, the following provisions shall apply to the arbitration hereunder: + +19.2.1 Arbitrators. The arbitration shall be conducted by a panel of three (3) arbitrators, with one (1) arbitrator chosen by each of FG and Astellas and the third appointed by the other two (2) arbitrators. If the parties are unable to agree upon a single arbitrator, or the third arbitrator in case of a panel of three (3), such third arbitrator (as the case may be) shall be appointed in accordance with the rules of the Arbitration of the International Chamber of Commerce. + +19.2.2 Proceedings. Except as otherwise provided herein, the parties shall use their best efforts to complete the arbitration within [ * ] after the appointment of the Panel under Section 19.2.1 above, unless a party can demonstrate to the Panel that the complexity of the issues or other reasons warrant the extension of one or more of the time tables. In such case, the Panel may extend such time table as reasonably required. The Panel shall, in rendering its decision, apply the substantive law of the State of California, without regard to its conflicts of laws provisions, except that the interpretation of and enforcement of this Article 19 shall be governed by the U.S. Federal Arbitration Act. The proceeding shall be conducted in English and shall take place in the city of Vancouver, British Columbia, Canada. The judgment of the Panel shall be binding upon the parties and enforceable in any court of competent jurisdiction. + +19.2.3 Interim Relief. Notwithstanding anything in this Article 19 to the contrary, FG and Astellas shall each have the right to apply to any court of competent jurisdiction for a temporary restraining order, preliminary injunction, or other similar interim or conservatory relief, as necessary, pending resolution under the above described arbitration procedures. Nothing in the preceding sentence shall be interpreted as limiting the powers of the arbitrators with respect to any dispute subject to arbitration under this Agreement. + +ARTICLE 20 MISCELLANEOUS + +20.1 Confidential Terms. Except as expressly provided herein, each party agrees not to disclose any terms of this Agreement to any third party without the consent of the other party, except (i) as required by securities or other applicable laws or (ii) to prospective and other investors and such party's accountants, attorneys and other professional advisors, or (iii) to others under reasonable conditions of confidentiality. + +20.2 Governing Law. This Agreement and any dispute arising from the performance or breach hereof shall be governed by and construed and enforced in accordance with, the laws of the State of California, without reference to conflicts of laws principles. + +20.3 Force Majeure. Nonperformance of any party (except for payment of amounts due hereunder) shall be excused to the extent that performance is rendered impossible by strike, fire, earthquake, flood, governmental acts or orders or restrictions, failure of suppliers, or any other reason where failure to perform is beyond the reasonable control of the non- -41- + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +CONFIDENTIAL EXECUTION COPY performing party. In such event FG or Astellas, as the case may be, shall promptly notify the other party of such inability and of the period for which such inability is anticipated to continue. Without limiting the foregoing, the party subject to such inability shall use reasonable efforts to minimize the duration of any force majeure event. + +20.4 No Implied Waivers; Rights Cumulative. No failure on the part of FG or Astellas to exercise and no delay in exercising any right under this Agreement, or provided by statute or at law or in equity or otherwise, shall impair, prejudice or constitute a waiver of any such right, nor shall any partial exercise of any such right preclude any other or further exercise thereof or the exercise of any other right. + +20.5 Independent Contractors. Nothing contained in this Agreement is intended implicitly, or is to be construed, to constitute FG or Astellas as partners in the legal sense. No party hereto shall have any express or implied right or authority to assume or create any obligations on behalf of or in the name of any other party or to bind any other party to any contract, agreement or undertaking with any third party. + +20.6 Notices. All notices, requests and other communications hereunder shall be in writing and shall be personally delivered or sent by registered or certified mail, return receipt requested, postage prepaid; facsimile transmission (receipt verified); or express courier service (signature required), in each case to the respective address specified below, or such other address or fax number as may be specified in writing to the other party hereto: Astellas: Astellas Pharma Inc. Attn: Director of Legal Department [ * ] + +with copy to: Astellas Pharma Inc. Attn: Licensing, Corporate Strategy [ * ] + +FG: FibroGen, Inc. Attn: Chief Executive Officer 225 Gateway Boulevard San Francisco, California 94080 Fax: 1-650-866-7202 + +with a copy to: FibroGen, Inc. + + Attn: Legal Department 225 Gateway Boulevard San Francisco, California 94080 Fax: 1-650-866-7343 -42- + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +CONFIDENTIAL EXECUTION COPY 20.7 Assignment. This Agreement shall not be assignable by either party to any third party without the written consent of the other party hereto; except that either party may assign this Agreement without the other party's consent to an entity that acquires substantially all of the business or assets of the assigning party within the Field, in each case whether by merger, transfer of assets, or otherwise. Upon a permitted assignment of this Agreement, all references herein to the assigning party shall be deemed references to the party to whom the Agreement is so assigned. + +20.8 Modification. No amendment or modification of any provision of this Agreement shall be effective unless in writing signed by all parties hereto. No provision of this Agreement shall be varied, contradicted or explained by any oral agreement, course of dealing or performance or any other matter not set forth in an agreement in writing and signed by all parties. + +20.9 Severability. If any provision hereof should be held invalid, illegal or unenforceable in any jurisdiction, the parties shall negotiate in good faith a valid, legal and enforceable substitute provision that most nearly reflects the original intent of the parties and all other provisions hereof shall remain in full force and effect in such jurisdiction and shall be liberally construed in order to carry out the intentions of the parties hereto as nearly as may be possible. Such invalidity, illegality or unenforceability shall not affect the validity, legality or enforceability of such provision in any other jurisdiction. + +20.10 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, and all of which together, shall constitute one and the same instrument. + +20.11 Headings. Headings used herein are for convenience only and shall not in any way affect the construction of or be taken into consideration in interpreting this Agreement. + +20.12 Export Laws. Notwithstanding anything to the contrary contained herein, all obligations of FG and Astellas are subject to prior compliance with United States and foreign export regulations and such other United States and foreign laws and regulations as may be applicable, and to obtaining all necessary approvals required by the applicable agencies of the governments of the United States and foreign jurisdictions. FG and Astellas shall cooperate with each other and shall provide assistance to the other as reasonably necessary to obtain any required approvals. + +20.13 Language. This Agreement is in the English language only, which language shall be controlling in all respects, and all versions hereof in any other language shall not be binding on the parties hereto. All communications and notices to be made or given pursuant to this Agreement shall be in the English language. + +20.14 Entire Agreement. This Agreement (including the Exhibits hereto) constitutes the entire agreement, both written or oral, with respect to the subject matter hereof, and supersedes all prior or contemporaneous understandings or agreements, including the Binding Term Sheet, dated as of February 9, 2004 by and between FG and Astellas, as amended -43- + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +CONFIDENTIAL EXECUTION COPY on January 25, 2005, whether written or oral, between FG and Astellas with respect to such subject matter. + +IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered in duplicate originals as of the date first above written. ASTELLAS PHARMA INC. FIBROGEN, INC. + +By: /s/ Toichi Takenaka By: /s/ Thomas B. Neff + + Toichi Takenaka President and Chief Executive Officer Thomas Neff President and Chief Executive Officer + +Date: 1.September.05 Date: 23 August 05 -44- + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +CONFIDENTIAL EXECUTION COPY EXHIBIT A LIST OF PATENTS + +[ * ] -45- + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +CONFIDENTIAL EXECUTION COPY EXHIBIT B INDICATIONS + +Included indications: + + • Treatment of anemia in patients with chronic kidney disease undergoing dialysis + + • Treatment of anemia in patients with chronic kidney disease not undergoing dialysis + + • [ * ] -46- + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +CONFIDENTIAL EXECUTION COPY EXHIBIT C INITIAL DEVELOPMENT PLAN + +[ * ] -47- + +[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. \ No newline at end of file diff --git a/full_contract_txt/FIDELITYNATIONALINFORMATIONSERVICES,INC_08_05_2009-EX-10.3-INTELLECTUAL PROPERTY AGREEMENT.txt b/full_contract_txt/FIDELITYNATIONALINFORMATIONSERVICES,INC_08_05_2009-EX-10.3-INTELLECTUAL PROPERTY AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..c63a4e467657ff525fbfe330af92f7fd7d248019 --- /dev/null +++ b/full_contract_txt/FIDELITYNATIONALINFORMATIONSERVICES,INC_08_05_2009-EX-10.3-INTELLECTUAL PROPERTY AGREEMENT.txt @@ -0,0 +1,1139 @@ +EXHIBIT 10.3 + + INTELLECTUAL PROPERTY AGREEMENT + + BETWEEN + + EQUIFAX INC. + + AND + + CERTEGY INC. + + JUNE 30, 2001 + + TABLE OF CONTENTS + + ARTICLE I DEFINITIONS............................................................................... 3 Section 1.1. Definitions..................................................................... 3 + +ARTICLE II CONVEYANCE OF CERTAIN ASSETS; ASSUMPTION OF CERTAIN LIABILITIES.......................... 8 Section 2.1. Transferred Equifax Assets...................................................... 8 Section 2.2. Transferred Certegy Assets...................................................... 8 Section 2.3. Assumption of Liabilities....................................................... 9 Section 2.4. Completion of Transactions...................................................... 9 + +ARTICLE III THIRD PARTY AGREEMENTS.................................................................. 10 Section 3.1. Third Party Agreements.......................................................... 10 Section 3.2. Required Consents............................................................... 11 Section 3.3. Discharge of Liabilities........................................................ 12 + +ARTICLE IV LICENSED MATERIALS....................................................................... 12 Section 4.1. Grant of Licenses by Equifax.................................................... 12 Section 4.2. Ownership of Enhancements by Certegy............................................ 15 Section 4.3. License to Marks................................................................ 15 Section 4.4. Grant of License by Certegy..................................................... 16 Section 4.5. Ownership of Enhancements by Equifax............................................ 18 Section 4.6. Data............................................................................ 19 Section 4.7. Mutual Obligations.............................................................. 19 + +ARTICLE V THE CLOSING............................................................................... 21 Section 5.1. Equifax Deliverables............................................................ 21 Section 5.2. Certegy Deliverables............................................................ 21 + +ARTICLE VI REPRESENTATIONS AND WARRANTIES........................................................... 22 + +ARTICLE VII INDEMNIFICATION......................................................................... 22 Section 7.1. Certegy Indemnification of the Equifax Group.................................... 22 Section 7.2. Equifax Indemnification of the Certegy Group.................................... 23 Section 7.3. Insurance and Third Party Obligations........................................... 23 + +ARTICLE VIII INDEMNIFICATION PROCEDURES............................................................. 23 Section 8.1. Notice and Payment of Claims.................................................... 23 Section 8.2. Notice and Defense of Third Party Claims........................................ 23 + +ARTICLE IX CONFIDENTIALITY.......................................................................... 25 Section 9.1. Exclusions...................................................................... 25 Section 9.2. Confidentiality................................................................. 25 Section 9.3. Employee Confidentiality Agreements............................................. 26 + + 1 + + Section 9.4. Rights and Remedies............................................................. 27 Section 9.5. Competitive Activities.......................................................... 27 Section 9.6. No Implied Rights............................................................... 27 + +ARTICLE X CONTINUED ASSISTANCE...................................................................... 28 Section 10.1. Continued Assistance and Transition............................................. 28 Section 10.2. Records and Documents........................................................... 28 Section 10.3. Litigation Cooperation.......................................................... 29 + +ARTICLE XI MISCELLANEOUS............................................................................ 29 Section 11.1. Expenses........................................................................ 29 Section 11.2. Notices......................................................................... 29 Section 11.3. Amendment and Waiver............................................................ 30 Section 11.4. Entire Agreement................................................................ 30 Section 11.5. Parties in Interest............................................................. 31 Section 11.6. Further Assurances and Consents................................................. 31 Section 11.7. Severability.................................................................... 31 Section 11.8. Governing Law................................................................... 31 Section 11.9. Counterparts.................................................................... 31 Section 11.10. Disputes........................................................................ 32 Section 11.11. Force Majeure................................................................... 32 Section 11.12. Documentation................................................................... 32 + + + + + + Section 11.13. Headings........................................................................ 32 + +EXHIBIT A - CERTEGY GROUP EXHIBIT B - TRANSFERRED EQUIFAX ASSETS EXHIBIT C - EQUIFAX THIRD PARTY AGREEMENTS - TRANSFERS + +EXHIBIT E - TRANSFERRED CERTEGY ASSETS EXHIBIT F - CERTEGY THIRD PARTY AGREEMENTS - TRANSFERS EXHIBIT G - CERTEGY THIRD PARTY AGREEMENTS - RIGHTS GRANTED EXHIBIT H - SPECIFIED EQUIFAX LIABILITIES EXHIBIT I - SPECIFIED CERTEGY LIABILITIES EXHIBIT J - LICENSED EQUIFAX MATERIALS EXHIBIT K - LICENSED CERTEGY MATERIALS EXHIBIT L - UTILITY SOFTWARE PROGRAMS EXHIBIT M - OTHER IP ASSETS EXHIBIT N - PROJECTED MIPS + + 2 + + EXHIBIT 99.5 + + INTELLECTUAL PROPERTY AGREEMENT + + THIS INTELLECTUAL PROPERTY AGREEMENT ("Agreement"), dated as of June 30, 2001, is entered into by Equifax Inc., a Georgia corporation ("Equifax"), and Certegy Inc., a Georgia corporation ("Certegy"). + + BACKGROUND + + A. Certegy is a wholly owned subsidiary of Equifax formed among other reasons for the purpose of taking title to the intellectual property assets and assuming the associated liabilities related to the business operations of the Certegy Group (as defined below). + + B. The Board of Directors of Equifax has determined that it is in the best interests of Equifax and its shareholders to transfer, assign and/or license to, or acquire on behalf of, Certegy and Designated Certegy Members (defined below), as part of the contribution to the capital of Certegy, certain intellectual property assets used in the business operations of the Certegy Group as described herein and currently utilized to operate the Certegy Business (as defined below), and to receive in exchange therefor the consideration described in the Distribution Agreement (as defined below). + + C. The Board of Directors of Certegy has determined that it is in the best interests of Certegy and its shareholders to transfer, assign and/or license to, or acquire on behalf of, Equifax and Designated Equifax Members (defined below) certain intellectual property assets. + + D. The parties intend that the Distribution (as defined in the Distribution Agreement) not be taxable to Equifax or its shareholders pursuant to Section 355 of the Code (as defined below). + + E. Equifax and its Affiliates (defined below) own certain intellectual property that is used in, or may be useful in, the conduct of the business operations of the Equifax Group (defined below) and/or the Certegy Group. Equifax and Certegy have determined that subject to the terms herein: (1) ownership of certain of such intellectual property shall be transferred to the entity specified in this Agreement on or before the Distribution Date (defined below); (2) certain intellectual property owned by Equifax and/or its Affiliates shall be licensed to the entity(ies) specified in this Agreement on or before the Distribution Date; and (3) the respective rights and obligations of Equifax and/or its Affiliates under certain Third Party Agreements (defined below) shall be acquired, assumed or otherwise transferred to the entity(ies) specified in this Agreement, subject to the consent of the applicable Third Party Provider (defined below). + + F. The parties have determined that it is necessary and desirable to describe the principal transactions required to effect the allocation of their respective intellectual property rights in conjunction with the Distribution and to set forth other agreements that will govern certain other matters regarding the parties' respective intellectual property rights following the Distribution. + + NOW, THEREFORE, in consideration of the foregoing premises, the mutual agreements and covenants contained in this Agreement, and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: + + ARTICLE I + + DEFINITIONS + + Section 1.1. Definitions + + As used herein, the following terms have the following meanings: + + (a) "Action" means any claim, suit, arbitration, inquiry, proceeding or investigation by or before any court, governmental or other regulatory or administrative agency or commission or any other tribunal. + + (b) "Affiliate" means, with respect to Equifax, any Person, which, whether directly or indirectly, is Controlled by or is under common Control with Equifax + + + + + +prior to the Distribution Date. + + (c) "Certegy Business" means the businesses conducted by the members of the Certegy Group as of the Distribution Date. + + (d) "Certegy Continued Use Materials" means any and all IP Assets (other than Transferred Assets) owned and/or held by a member of the Equifax Group that satisfy each of the following criteria: (i) such IP Assets were used in the Certegy Business during the twelve (12) calendar months prior to the Distribution Date and for which a continuing business requirement exists on the Distribution Date, and (ii) such IP Assets or the services, information or deliverables produced with such IP Assets (A) are not made commercially available by the Equifax Group to third parties on the Distribution Date, and (B) are not made available to the Certegy Group after the Distribution Date pursuant to the Intercompany Data Purchase Agreement or the Transition Support Agreement. + + (e) "Certegy Enhancements" means software and/or associated documentation created by or for any member of the Certegy Group on or after the Closing Date, that provides processing capabilities, functionality or efficiencies, maintenance, bug fixes or updates not contained in the Transferred Equifax Assets as of the Closing Date and which is intended for use with and requires a portion of the Transferred Equifax Assets in order to function properly. + + (f) "Certegy Group" means the entities set forth on Exhibit A and any of their respective subsidiaries. + + 2 + + (g) "Certegy Indemnitees" has the meaning given in Section 7.2. + + (h) "Certegy Liabilities" means all unsatisfied Liabilities, whether arising before, on or after the Distribution Date, based upon or arising out of the ownership, use or possession by the Certegy Group of the Transferred Equifax Assets, the Licensed Equifax Materials or the Equifax Marks. + + (i) "Certegy Third Party Use Rights" means the rights granted to or secured for Equifax or one or more Designated Equifax Members pursuant to Section 3.1(b)(ii). + + (j) "Closing Date" means the Effective Time, as defined in the Distribution Agreement. + + (k) "Code" means the Internal Revenue Code of 1986, as amended. + + (l) "Company Information" means collectively the Proprietary Information and the Confidential Information of the disclosing party. Company Information also includes information that has been disclosed to Equifax or any of its Affiliates prior to the Distribution Date, or to any member of either Group after the Distribution Date, by a third party subject to an obligation to treat such information as confidential or secret. + + (m) "Confidential Information" means any and all confidential business information of the disclosing party that does not constitute Proprietary Information and that is the subject of efforts by the disclosing party that are reasonable under the circumstances to maintain its secrecy and confidentiality, including without limitation, the existence and nature of the relationship between the parties, employees of the disclosing party, and any and all additional information disclosed by the disclosing party to the receiving party as a result of the receiving party's access to and presence at the disclosing party's facilities. + + (n) "Control" means the ownership, directly or indirectly, of more than fifty percent (50%) of the voting shares of an entity, or other possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of an entity, or the power to veto major policy decisions of any such entity, whether through the ownership of voting securities by contract, or otherwise. + + (o) "Derivative Work" means a work based on one or more pre-existing works, including without limitation, a condensation, transformation, expansion or adaptation, that would constitute a copyright infringement if prepared without authorization of the owner of the copyright of such pre-existing work. + + (p) "Designated Certegy Member" means a member of the Certegy Group, as designated by Certegy in its sole discretion. + + (q) "Designated Equifax Member" means a member of the Equifax Group, as designated by Equifax in its sole discretion. + + (r) "Disputes" has the meaning given in the Distribution Agreement. + + 3 + + (s) "Distribution Agreement" means that certain Distribution Agreement entered into on or prior to the Distribution Date between Equifax and Certegy, as amended from time to time. + + (t) "Distribution Date" means the day as of which the Distribution shall be effective, as determined by the Board of Directors of Equifax, or such committee + + + + + +of such Board of Directors as shall be designated by the Board of Directors of Equifax. + + (u) "Divested Business" means the sale or other transfer of a member of either Group, or a portion of the business operations of any such member, to an unrelated third party after the Distribution Date. + + (v) "Equifax Business" means the businesses now or formerly conducted by Equifax and its present and former Affiliates, other than the Certegy Business. + + (w) "Equifax Continued Use Materials" means any and all IP Assets (other than Transferred Assets) owned and/or held by a member of the Certegy Group that satisfy each of the following criteria: (i) such IP Assets were used in the Equifax Business during the twelve (12) calendar months prior to the Distribution Date and for which a continuing business requirement exists on the Distribution Date, and (ii) such IP Assets or the services, information or deliverables produced with such IP Assets (A) are not made commercially available by the Certegy Group to third parties on the Distribution Date, and (B) are not made available to the Equifax Group after the Distribution Date pursuant to the Intercompany Data Purchase Agreement or the Transition Support Agreement. + + (x) "Equifax Enhancements" means software and/or associated documentation created by or for any member of the Equifax Group on or after the Closing Date, that provides processing capabilities, functionality or efficiencies, maintenance, bug fixes or updates not contained in the Transferred Certegy Assets on the Closing Date and which is intended for use with and requires a portion of the Transferred Certegy Assets in order to function properly. + + (y) "Equifax Group" means Equifax and its Affiliates existing on the Distribution Date and as modified from time to time thereafter, excluding all members of the Certegy Group. + + (z) "Equifax Indemnitees" has the meaning given in Section 7.1. + + (aa) "Equifax Liabilities" means all unsatisfied Liabilities, whether arising before, on or after the Distribution Date, based upon or arising out of the ownership, use or possession by the Equifax Group of the Transferred Certegy Assets or the Licensed Certegy Materials. + + (bb) "Equifax Marks" mean the Marks owned by Equifax or its Affiliates. + + (cc) "Equifax Third Party Use Rights" means the rights granted to or secured for Certegy or one or more Designated Certegy Members pursuant to Section 3.1(a)(ii). + + (dd) "Group" means the Certegy Group and/or the Equifax Group. + + (ee) "Indemnifiable Losses" has the meaning given in Section 7.1. + + 4 + + (ff) "Indemnified Party" has the meaning given in Section 8.1. + + (gg) "Indemnifying Party" has the meaning given in Section 8.1. + + (hh) "Intercompany Data Purchase Agreement" means that certain Intercompany Data Purchase Agreement entered into on or prior to the Distribution Date between Equifax and Certegy, as amended from time to time. + + (ii) "IP Assets" means all intellectual property rights in and to any ideas, trade secrets, specifications, designs, masks, mask works, copyrights, patents, Marks and other proprietary rights, of every kind and description, wherever located, including without limitation, all electronic circuit designs, works of authorship, databases, compositions of matter, computer software (whether such computer software constitutes custom software, firmware or systems created by, or for the exclusive use of either party, or otherwise), algorithms, and works of authorship expressing such algorithms. + + (jj) "Liabilities" means any and all claims, debts, liabilities and obligations, absolute or contingent, matured or not matured, liquidated or unliquidated, accrued or unaccrued, known or unknown, whenever arising, with respect to a specified object, matter, contract, commitment or undertaking, including without limitation, all claims, debts, liabilities and obligations arising under any law, rule, regulation, action, order or consent decree of any governmental entity or any award of any arbitrator of any kind, related thereto or arising under any contract, commitment or undertaking relating to such specified object, matter, contract, commitment or undertaking. + + (kk) "Licensed Certegy Materials" means those IP Assets identified on Exhibit K and the Equifax Continued Use Materials. + + (ll) "Licensed Equifax Materials" means those IP Assets identified on Exhibit J and the Certegy Continued Use Materials. + + (mm) "Licensed Materials" means the Licensed Certegy Materials and/or Licensed Equifax Materials. + + (nn) "Marks" means trademarks, service marks, domain names, tradenames, and other slogans, designs and distinctive advertising, whether or not registered or filed with any governmental agency. + + (oo) "Person" means an individual, partnership, joint venture, association, + + + + + +corporation, limited liability company, trust or any other legal entity. + + (pp) "Proprietary Information" means all non-public information whether tangible or intangible related to the services or business of the disclosing party that (i) derives economic value, actual or potential, from not being generally known to or readily ascertainable by another Person who can obtain economic value from its disclosure or use; and (ii) is the subject of efforts by the disclosing party that are reasonable under the circumstances to maintain its secrecy, including without limitation, (A) marking any information reduced to tangible form clearly and conspicuously with a legend identifying its confidential or proprietary nature; (B) identifying any + + 5 + +oral communication as confidential immediately before, during, or after such oral communication; or (C) otherwise treating such information as confidential or secret. Assuming the criteria in clauses (i) and (ii) above are met, Proprietary Information includes information, without regard to form, including, but not limited to, technical and nontechnical data, databases, formulas, patterns, designs, compilations, computer programs and software, devices, inventions, methods, techniques, drawings, processes, financial data, financial plans, product plans, lists of actual or potential customers and suppliers (which are not commonly known by or available to the public), research, development, and existing and future products. + + (qq) "Related Agreements" means all of the written agreements, instruments, understandings, assignments or other arrangements entered into in connection with the transactions contemplated hereby (other than this Agreement), including without limitation, the Distribution Agreement, Intercompany Data Purchase Agreement and Transition Support Agreement. + + (rr) "Representatives" means, individually and collectively, officers, directors, employees, agents, and/or independent contractors of each member of the Group. + + (ss) "Required Consents" means any consents or approvals required to be obtained (i) to allow the transfer of any assets to and the assumption of the obligations attendant therewith by a party and release of the transferring party from such obligations; (ii) to allow a party to assume financial, support, operational, management and/or administrative responsibility for the Third Party Rights utilized in the operation of the Equifax Business or Certegy Business, respectively; (iii) for the licensing, acquiring, transfer and/or grant of the rights to the Equifax Group or Certegy Group, respectively, to use the Third Party Rights as contemplated by this Agreement; and/or (iv) for a party to have access to and use of the space, equipment, software and/or third party services provided under the Third Party Agreements entered into by the other party as contemplated by this Agreement. + + (tt) "Third Party Agreements" means agreements, contracts or arrangements between Equifax and/or its Affiliates, on the one hand, and a Third Party Provider, on the other. + + (uu) "Third Party Claim" has the meaning given in Section 8.2. + + (vv) "Third Party Provider" means a Person other than a member of either Group that provides products, software, services, maintenance and/or support to Equifax or one or more of its Affiliates. + + (ww) "Third Party Rights" means rights granted to Equifax and/or its Affiliates pursuant to a Third Party Agreement, including (i) all service, support and maintenance rights related thereto or attendant therewith, and (ii) all contractual rights, commitments, undertakings and obligations (including service, data processing, support and maintenance rights and obligations) attendant therewith or directly related thereto. + + (xx) "Third Party Use Rights" means the respective Equifax Third Party Use Rights and Certegy Third Party Use Rights. + + 6 + + (yy) "Transferred Assets" means the Transferred Equifax Assets and Transferred Certegy Assets. + + (zz) "Transferred Equifax Assets" means the assets to be acquired on behalf of, or transferred to, Certegy or one or more Designated Certegy Members as described in Section 2.1. + + (aaa) "Transferred Equifax Third Party Agreements" means the Third Party Agreements, the rights and obligations of which are to be acquired on behalf of, or transferred to, Certegy or one or more Designated Certegy Members pursuant to Section 3.1(a)(i). + + (bbb) "Transferred Certegy Assets" means the assets to be acquired on behalf of, or transferred to, Equifax or the one or more Designated Equifax Members as described in Section 2.2. + + (ccc) "Transferred Certegy Third Party Agreements" means the Third Party Agreements, the rights and obligations of which are to be acquired on behalf of, or transferred to, Equifax or one or more Designated Equifax Members pursuant to Section 3.1(b)(i). + + + + + + (ddd) "Transferred Third Party Agreements" means the respective Transferred Equifax Third Party Agreements and/or the Certegy Transferred Third Party Agreements. + + (eee) "Transition Support Agreement" means that certain Transition Support Agreement entered into on or prior to the Distribution Date between Equifax and Certegy, as amended from time to time. + + (fff) "Utility Software Programs" means the software programs set forth on Exhibit L. + + ARTICLE II + + CONVEYANCE OF CERTAIN ASSETS; ASSUMPTION OF CERTAIN LIABILITIES + + Section 2.1. Transferred Equifax Assets. + + Effective as of the Closing Date, and subject to Sections 2.3 and 2.4 and Article III hereof, Equifax agrees, at its expense, to transfer, or cause to be transferred, to Certegy or to a Designated Certegy Member all right, title and interest held by Equifax and/or its Affiliates as of the Closing Date in and to each of the assets identified on Exhibit B hereto, subject to the retained rights described therein. Except as set forth on Exhibit B, no other assets (other than Transferred Equifax Third Party Agreements) are being transferred by Equifax (or a member of the Equifax Group) pursuant to this Agreement. + + Section 2.2. Transferred Certegy Assets. + + Effective as of the Closing Date, and subject to Sections 2.3 and 2.4 and Article III hereof, Certegy agrees to transfer, or cause to be transferred, to Equifax or to a Designated Equifax Member all right, title and interest held by the members of the Certegy Group as of the Closing Date in and to each of the assets identified on Exhibit E, subject to the retained rights + + 7 + +described therein. Except as set forth on Exhibit E, no other assets (other than Transferred Certegy Third Party Agreements) are being transferred by Certegy (or a member of the Certegy Group) pursuant to this Agreement. The expenses payable to third parties that are not members of either Group to effect such transfers shall be the financial responsibility of Equifax. + + Section 2.3. Assumption of Liabilities. + + (a) As of the Closing Date, Equifax shall, or shall cause the respective Designated Equifax Member to, assume all payment and performance obligations attendant with the Transferred Certegy Assets and the Equifax Liabilities, including, without limitation, the Liabilities identified on Exhibit H. + + (b) As of the Closing Date, Certegy shall, or shall cause the respective Designated Certegy Member to, assume all payment and performance obligations attendant with the Transferred Equifax Assets and the Certegy Liabilities, including, without limitation, the Liabilities identified on Exhibit I. + + Section 2.4. Completion of Transactions. + + (a) In the event that any conveyance of a Transferred Asset, Transferred Third Party Agreement, or the provision of a Third Party Right or Third Party Use Right, or assumption of any Liability, required by this Agreement is not effected on or before the Closing Date, the obligation to transfer such Transferred Asset or Transferred Third Party Agreement, provide such Third Party Right or Third Party Use Right, and assume such Liability shall continue past the Closing Date and shall be effected by the parties as soon thereafter as practicable; provided, however, that neither party shall be obligated under this paragraph to transfer any Transferred Third Party Agreement and/or provide Third Party Use Rights that either (i) did not exist as of the Closing Date or (ii) are no longer required by the party who is the intended transferee of the respective Third Party Agreement or is entitled to receive the Third Party Use Rights for the continued operation of such party's business. + + (b) If any Transferred Asset or Transferred Third Party Agreement may not be transferred or acquired by reason of a requirement to obtain a Required Consent or any other approval of any third party and such Required Consent or other approval has not been obtained by the Closing Date, then such Transferred Asset or Transferred Third Party Agreement shall not be transferred or acquired until such Required Consent or other approval has been obtained. Equifax and Certegy shall, and as the case may be, shall cause the member of its respective Group which is the holder of such Transferred Asset or Transferred Third Party Agreement prior to transfer, to use all reasonable efforts to provide to the applicable member of the other Group all the rights and benefits under such Transferred Asset or Transferred Third Party Agreement and to cause such holder to enforce such Transferred Asset or Transferred Third Party Agreement for the benefit of such member of the other Group; provided, however, that the foregoing obligation shall not, in any way, require Equifax, Certegy or any member of a respective Group to breach any Transferred Third Party Agreement or incur or suffer any liability with respect to any Transferred Third Party Agreement. Moreover, if any transfer of a Transferred Asset or Transferred Third Party Agreement or provision of a Third Party Right or Third Party Use Right, is not completed by the Closing Date in accordance with this Agreement for any reason, each of + + 8 + + + + + +Equifax and Certegy shall, and shall cause the members of its Group to, cooperate in achieving a reasonable alternative arrangement for the affected members of the Groups to obtain the economic and operational equivalent of the intended transfer of such Transferred Asset or Third Party Agreement and/or provision of such Third Party Right or Third Party Use Right, and assumption of the attendant Liabilities, with minimum interference to such members' business operations until such transfer of such Transferred Asset or Third Party Agreement, and/or provision of such Third Party Right or Third Party Use Right, is completed. The costs payable to third parties that are not members of either Group to achieve any such reasonable alternative arrangement shall be the financial responsibility of Equifax. + + (c) From time to time on and after the Closing Date, each party shall promptly transfer, and cause the appropriate members of its Group promptly to transfer, to the other party, or the designated member of the other party's Group, any property and other benefits received by such party, or the members of its Group, that are intended to be or are a Transferred Asset or Transferred Third Party Agreement of the other party under this Agreement. Without limiting the foregoing, funds received by a member of either Group that belong to a member of the other Group (whether by payment of accounts receivable, credits, rebates or other amounts, however described) shall be delivered to the other Group by wire transfer not more than five (5) business days after receipt of such payment. + + ARTICLE III + + THIRD PARTY AGREEMENTS + + Section 3.1. Third Party Agreements. + + (a) Effective as of the Closing Date, Equifax shall (i) transfer, or cause to be transferred, to Certegy or a Designated Certegy Member, or acquire on Certegy's behalf, the rights and obligations of Equifax and its Affiliates in and to the Third Party Agreements identified on Exhibit C (including all Third Party Rights related thereto) and (ii) grant rights to or secure rights (including rights as an "authorized user") for Certegy or a Designated Certegy Member under the Third Party Agreements identified on Exhibit D, in each case, subject to the respective payment obligations or other terms set forth on Exhibit C and Exhibit D. + + (b) Effective as of the Closing Date, Certegy shall (i) transfer, or cause to be transferred, to Equifax or a Designated Equifax Member, or acquire on Equifax's behalf, the rights and obligations of the members of the Certegy Group in and to the Third Party Agreements identified on Exhibit F (including all Third Party Rights related thereto) and (ii) grants rights to or secure rights (including rights as an "authorized user") for Equifax or a Designated Equifax Member under the Third Party Agreements identified on Exhibit G, in each case, subject to the respective payment obligations or other terms set forth on Exhibit F and Exhibit G. + + (c) Unless as expressly provided hereunder, neither party shall have any obligation to transfer, have transferred or acquire any Third Party Rights or Third Party Use Rights for or on behalf of the other party. + + 9 + + (d) Without limiting each party's specific obligations pursuant hereto (or in any separate agreement) with respect to Third Party Rights and Third Party Use Rights, each of Certegy and Equifax agrees to, in connection with its use of, exploitation of and performance pursuant to any Third Party Rights or Third Party Use Rights, including, without limitation, such party's rights to use, copy, exploit, distribute, display, copy and sublicense any software secured for or granted to such party pursuant to such Third Party Rights or Third Party Use Rights, comply with the terms, scope, restrictions and provisions (including, without limitation, usage limitations) of any Third Party Rights or Third Party Agreements that govern such Third Party Rights or Third Party Use Rights. A failure to comply with this paragraph shall constitute a breach of this Agreement. + + Section 3.2. Required Consents. + + (a) Equifax with respect to Transferred Equifax Third Party Agreements and Equifax Third Party Use Rights, and Certegy with respect to Transferred Certegy Third Party Agreements and Certegy Third Party Use Rights, shall, or shall cause the appropriate member of its respective Group to, use its reasonable commercial efforts to obtain the grant to the applicable member of the other Group, the Required Consents from the Third Party Providers under such respective Third Party Agreements as necessary to effect the provisions of this Agreement. Each party will provide the other party with advice on its experience and agreements with the Third Party Providers with regard to obtaining any Required Consent under such Third Party Agreements. Equifax and Certegy will each have management and administrative responsibilities for obtaining all Required Consents required as of the Closing Date to which a member of its respective Group is a party. Equifax shall have the right of prior approval of the terms upon which all Required Consents are obtained. + + (b) Except as otherwise provided in Section 3.1 and the exhibits referenced therein, Equifax shall bear the costs payable to third parties that are not members of either Group, if any, of obtaining all Required Consents, including without limitation, all charges and fees related to obtaining the Required + + + + + +Consents for the Transferred Third Party Agreements and Third Party Use Rights. + + (c) Equifax and Certegy shall use reasonable commercial efforts to obtain all Required Consents with regard to Transferred Third Party Agreements and Third Party Use Rights within one hundred eighty (180) days after the Closing Date, unless otherwise agreed by the parties in writing. Until all Required Consents are obtained, Equifax and Certegy shall each periodically publish a list setting forth the status of each Required Consent for which a member of its respective Group is the contracting party immediately prior to the Closing Date. Equifax and Certegy shall timely cooperate with each other in order to facilitate the proper and timely publication of such periodic Required Consents list. If any Required Consent is not obtained with respect to any of the Third Party Agreements or Third Party Use Rights, the parties shall cooperate with each other in achieving a reasonable alternative arrangement for the affected Group to continue to process its work with minimum interference to its business operations until such Required Consents are obtained, including without limitation, implementing the provisions of Section 2.4(b). Except as otherwise provided in Section 3.1 and the exhibits referenced therein, the cost payable to third parties that are not members of either Group of achieving such + + 10 + +reasonable alternative arrangements with respect to Third Party Rights that are a part of the Transferred Assets or Transferred Third Party Agreements shall be borne by Equifax. + + (d) The financial obligations of Equifax under Sections 3.2(b) and (c) for Required Consents and alternative arrangements, shall terminate with respect to all such Required Consents and alternative arrangements not identified by the parties to each other in a writing within twelve (12) months after the Closing Date, and for all Required Consents and alternative arrangements identified thereafter, all such financial obligations shall be borne by the party needing the Required Consent or alternative arrangement to operate under or take assignment of the Third Party Agreement or to obtain such Third Party Right for which such Required Consent or alternative arrangement is required. + + (e) For all periods after the Closing Date, except as set forth in Sections 3.2(b) and 3.2(c) for Required Consents and alternative arrangements, Equifax and Certegy shall each bear financial responsibility and pay the Third Party Providers, under all Transferred Third Party Agreements transferred to its respective Group pursuant to Sections 3.1(a)(i) and 3.1(b)(i) above. + + Section 3.3. Discharge of Liabilities. + + (a) Certegy agrees that on and after the Closing Date it will timely pay, perform and discharge, or cause to be timely paid, performed and discharged, all of the Certegy Liabilities. + + (b) Equifax agrees that on and after the Closing Date it will timely pay, perform and discharge, or cause to be timely paid, performed and discharged, all of the Equifax Liabilities. + + ARTICLE IV + + LICENSED MATERIALS + + Section 4.1. Grant of Licenses by Equifax. + + (a) Equifax hereby grants, and will cause the other members of the Equifax Group to grant, to Certegy a fully paid, non-exclusive, perpetual, worldwide, non-transferable license to use, modify, copy, improve, create Derivative Works and Certegy Enhancements from, and sublicense the Licensed Equifax Materials (excluding the Utility Software Programs) solely for use in the Certegy Business and as that business may evolve and change in the future, subject to the following: + + (i) Certegy shall not sublicense, or otherwise disclose or distribute, or permit any Person to use, the Licensed Equifax Materials (excluding the Utility Software Programs), except in accordance with Section 4.1(b); + + (ii) Certegy shall hold the Licensed Equifax Materials (excluding the Utility Software Programs) in strict confidence; will not remove or destroy any proprietary markings of the Equifax Group on or contained in the Licensed Equifax Materials (excluding the Utility + + 11 + + Software Programs); and will include the copyright and patent notices of the licensor as specified from time to time by the licensor for the Licensed Equifax Materials (excluding the Utility Software Programs) on and in all copies of the Licensed Equifax Materials (excluding the Utility Software Programs); + + (iii) Certegy shall not export or re-export the Licensed Equifax Materials (excluding the Utility Software Programs) without the appropriate United States or foreign government licenses; and + + (iv) all sublicenses from Certegy to members of the Certegy Group (A) + + + + + + shall contain the rights and restrictions set forth in this Section 4.1(a) with respect to the license granted to Certegy and comply with Sections 4.1(b) through (d) hereof and (B) shall be diligently enforced by Certegy. + + (b) The sublicense rights granted to Certegy pursuant to Section 4.1(a) include the right for Certegy to grant sublicenses to the Licensed Equifax Materials (excluding the Utility Software Programs) to the members of the Certegy Group, which sublicenses may include the right to further sublicense such Licensed Equifax Materials (excluding the Utility Software Programs) to such Group member's customers solely for each such customer's internal business purposes to the extent related to the Certegy Business. All sublicensing by Certegy and other members of the Certegy Group to any one of their customers shall be pursuant to written agreements with such customer, executed before or at the time of furnishing each copy of the Licensed Equifax Materials (excluding the Utility Software Programs) to such customer, and which provide at a minimum that such customer: + + (i) receives only a personal, non-transferable and nonexclusive right to use such copy of the Licensed Equifax Materials (excluding the Utility Software Programs); + + (ii) receives no title in the intellectual property contained in the Licensed Equifax Materials (excluding the Utility Software Programs); + + (iii) will not copy the Licensed Equifax Materials (excluding the Utility Software Programs), except as necessary to use such Licensed Equifax Materials (excluding the Utility Software Programs) in accordance with the license grant and to make one archival copy; + + (iv) will not export or re-export the Licensed Equifax Materials (excluding the Utility Software Programs) without the appropriate United States or foreign government licenses; + + (v) will hold the Licensed Equifax Materials (excluding the Utility Software Programs) in confidence; will not reverse compile or disassemble the Licensed Equifax Materials (excluding the Utility + + 12 + + Software Programs); will not remove or destroy any proprietary markings of the licensor on or contained in the Licensed Equifax Materials (excluding the Utility Software Programs), and will include the copyright and patent notices of the licensor as specified from time to time by the licensor for the Licensed Equifax Materials (excluding the Utility Software Programs) on and in all copies of the Licensed Equifax Materials (excluding the Utility Software Programs); and + + (vi) will not sublicense, assign or otherwise transfer the Licensed Equifax Materials (excluding the Utility Software Programs) to any other Person. + + (c) In the event any member of the Certegy Group sublicenses any portion of the Licensed Equifax Materials (excluding the Utility Software Programs) to any third party pursuant to Section 4.1(a) and (b) above, Certegy agrees to ensure that such member shall diligently enforce the terms and conditions of all sublicenses granted pursuant to this Section 4.1. + + (d) In the event that Certegy, or another member of the Certegy Group, shall enter into a Divested Business transaction with respect to the Certegy Group, and the scope of permitted use or other terms applicable to the Licensed Equifax Materials (excluding the Utility Software Programs) under the license or sublicenses granted in this Section 4.1 are required to be modified to effect such transaction, Equifax will, or will cause the sublicensor under the applicable sublicense to, agree to such modifications to the extent (i) required for the transaction to be effected and (ii) not materially detrimental to the interests of the Equifax Group. Such modifications shall not be effective until the Divested Business or the acquiror thereof, as required by Equifax, has entered into a license agreement with the appropriate member of the Equifax Group incorporating the terms of Section 4.1 and Section 4.2 and such other terms as Equifax reasonably deems appropriate for the protection of its interests in the Licensed Equifax Materials. + + (e) Without limiting the foregoing, Equifax hereby grants, and will cause the other members of the Equifax Group to grant, to Certegy a fully paid, non- exclusive, perpetual, worldwide, transferable license to use, modify, improve, create Derivative Works from, and sublicense, the Utility Software Programs (in both object and source code format) identified on Exhibit L as being owned by Equifax or a member of the Equifax Group for any and all fields of use and to any and all Persons. + + (f) The Licensed Equifax Materials may be marketed under such name and in such manner as Certegy chooses, consistent with the terms and conditions of this Agreement. + + (g) Except for the Certegy Group's rights described in Section 4.1(a), (b) and (e) above, the Equifax Group's rights in and to the Licensed Equifax Materials shall be and remain the exclusive property of Equifax or the members of the Equifax Group, and their respective successors and assigns. + + + + + + 13 + + Section 4.2. Ownership of Enhancements by Certegy. + + (a) Unless Exhibit J provides otherwise, Certegy, or the respective Designated Certegy Member, shall own all the modifications and improvements to, and the Certegy Enhancements and/or Derivative Works made from, the Licensed Equifax Materials developed by any member of the Certegy Group, or by any party other than a member of the Equifax Group at the expense of the Certegy Group. Equifax hereby assigns, and shall cause each member of the Equifax Group to assign, to Certegy, or the respective Designated Certegy Member, all right, title and interest it may hold in and to such modifications, improvements, Certegy Enhancements and Derivative Works. Certegy shall, or shall cause the respective Designated Certegy Member to, have the right to make and file all applications and other documents required to register the copyright(s) and file for patents for such modifications, improvements, Certegy Enhancements and Derivative Works in its discretion and at its sole cost and expense. + + (b) Should Certegy elect to file any application for the registration, perfection or protection of any modifications, improvements, Certegy Enhancements or Derivative Works described in Section 4.2(a), under any copyright, patent or other law of any country or jurisdiction, Equifax will, at the request and expense of Certegy, do all things and sign all documents or instruments reasonably necessary in the opinion of Certegy to assist in the registration of such claims, file such applications, and obtain, defend and enforce such copyright, patent, mask work and other rights. + + (c) Subject to the license rights granted in Section 4.1, as between the parties. the Licensed Equifax Materials shall be and shall remain the sole and exclusive property of the Equifax Group and the members of the Equifax Group may make any internal use and may commercially exploit any enhancements to the Licensed Materials made or caused to be made by members of the Equifax Group, as they shall deem appropriate without any obligation to any member of the Certegy Group or other restriction. The Equifax Group may in particular distribute and manufacture, or cause to be manufactured or distributed by any third party, any such enhancements and/or the Licensed Equifax Materials. + + Section 4.3. License to Marks. + + (a) Equifax hereby grants, and will cause each member of the Equifax Group to grant, to Certegy and each member of the Certegy Group a fully paid, non- exclusive, worldwide, non-transferable right to continue to use the Equifax Marks employed in the Certegy Business, but only to the extent such Equifax Marks were displayed by the Certegy Group prior to the Distribution Date (i) on the Transferred Equifax Assets, (ii) on premises jointly occupied with Equifax, and (iii) on letterhead, product and services documentation, invoices, software programs, packaging and similar materials used by the members of the Certegy Group, and such Equifax Marks are used in accordance with the guidelines for usage of the Equifax Marks published and amended by Equifax from time to time. Certegy will terminate the use of such Equifax Marks as soon as commercially practical but in any event within twelve (12) months after the Closing Date. + + (b) Certegy hereby grants, and will cause each member of the Certegy Group to grant, to Equifax and each member of the Equifax Group a fully paid, non- exclusive, worldwide, non- + + 14 + +transferable right to continue to use the Marks that were owned immediately prior to the Distribution Date by a member of the Certegy Group and employed in the Equifax Business, but only to the extent such Marks were displayed by the Equifax Group prior to the Distribution Date (i) on assets owned by Equifax or any member of the Equifax Group (other than the Transferred Assets), (ii) on premises jointly occupied with one or more members of the Certegy Group, and (iii) on letterhead, product and services documentation, invoices, software programs, packaging and similar materials used by the members of the Equifax Group, and such Marks are used in accordance with the same guidelines for usage as the Equifax Marks as described in subsection (a) above. Equifax will terminate the use of such Marks as soon as commercially practical but in any event within twelve (12) months after the Distribution Date. + + Section 4.4. Grant of License by Certegy. + + (a) Certegy hereby grants, and will cause the other members of the Certegy Group to grant, to Equifax a fully paid, non-exclusive, perpetual, worldwide, non-transferable license to use, modify, copy, improve, create Derivative Works and Equifax Enhancements from, and sublicense the Licensed Certegy Materials (excluding the Utility Software Programs) solely for use in the Equifax Business and as that business may evolve and change in the future, subject to the following: + + (i) Equifax shall not sublicense, or otherwise disclose or distribute, or permit any Person to use, the Licensed Certegy Materials (excluding the Utility Software Programs), except in accordance with Section 4.4(b); + + (ii) Equifax shall hold the Licensed Certegy Materials (excluding the Utility Software Programs) in strict confidence; will not remove or destroy any proprietary markings of the Certegy Group on or contained in the Licensed Certegy Materials (excluding the + + + + + + Utility Software Programs); and will include the copyright and patent notices of the licensor as specified from time to time by the licensor for the Licensed Certegy Materials (excluding the Utility Software Programs) on and in all copies of the Licensed Certegy Materials (excluding the Utility Software Programs); + + (iii) Equifax shall not export or re-export the Licensed Certegy Materials (excluding the Utility Software Programs) without the appropriate United States or foreign government license; and + + (iv) all sublicenses from Equifax to members of the Equifax Group (A) shall contain the rights and restrictions set forth in this Section 4.4(a) with respect to the license granted to Equifax and comply with Sections 4.4(b) through (d) hereof and (B) shall be diligently enforced by Equifax. + + (b) The sublicense rights granted to Equifax pursuant to Section 4.4(a) include the right for Equifax to grant sublicenses to the Licensed Certegy Materials (excluding the Utility + + 15 + +Software Programs) to the members of the Equifax Group, which sublicenses may include the right to further sublicense such Licensed Certegy Materials (excluding the Utility Software Programs) to such Group member's customers solely for each such customer's internal business purposes to the extent related to the Equifax Business. All sublicensing by Equifax and other members of the Equifax Group to any one of their customers shall be pursuant to written agreements with such customer, executed before or at the time of furnishing each copy of the Licensed Certegy Materials (excluding the Utility Software Programs) to such customer, and which provide at a minimum that such customer: + + (i) receives only a personal, non-transferable and nonexclusive right to use such copy of the Licensed Certegy Materials (excluding the Utility Software Programs); + + (ii) receives no title in the intellectual property contained in the Licensed Certegy Materials (excluding the Utility Software Programs); + + (iii) will not copy the Licensed Certegy Materials (excluding the Utility Software Programs), except as necessary to use such Licensed Certegy Materials (excluding the Utility Software Programs) in accordance with the license grant and to make one archival copy; + + (iv) will not export or re-export the Licensed Certegy Materials (excluding the Utility Software Programs) without the appropriate United States or foreign government licenses; + + (v) will hold the Licensed Certegy Materials (excluding the Utility Software Programs) in confidence; will not reverse compile or disassemble the Licensed Certegy Materials (excluding the Utility Software Programs); will not remove or destroy any proprietary markings of the licensor on or contained in the Licensed Certegy Materials (excluding the Utility Software Programs); and will include the copyright and patent notices of the licensor as specified from time to time by the licensor for the Licensed Certegy Materials (excluding the Utility Software Programs) on and in all copies of the Licensed Certegy Materials (excluding the Utility Software Programs); and + + (vi) will not sublicense, assign or otherwise transfer the Licensed Certegy Materials (excluding the Utility Software Programs) to any other Person. + + (c) In the event any member of the Equifax Group sublicenses any portion of the Licensed Certegy Materials (excluding the Utility Software Programs) to any third party pursuant to Section 4.4(a) and (b) above, Equifax agrees to ensure that such member shall diligently enforce the terms and conditions of all sublicenses granted pursuant to this Section 4.4. + + 16 + + (d) In the event that Equifax, or another member of the Equifax Group, shall enter into a Divested Business transaction with respect to the Equifax Group, and the scope of permitted use or other terms applicable to the Licensed Certegy Materials (excluding the Utility Software Programs) under the license or sublicenses granted in this Section 4.4 are required to be modified to effect such transaction, Certegy will, or will cause the sublicensor under the applicable sublicense to, agree to such modifications to the extent (i) required for the transaction to be effected and (ii) not materially detrimental to the interests of the Certegy Group. Such modifications shall not be effective until the Divested Business or the acquiror thereof, as required by Certegy, has entered into a license agreement with the appropriate member of the Certegy Group incorporating the terms of Section 4.4 and Section 4.5 and such other terms as Certegy reasonably deems appropriate for the protection of its interests in the Licensed Certegy Materials. + + (e) Without limiting the foregoing, Certegy hereby grants, and will cause + + + + + +the other members of the Certegy Group to grant, to Equifax a fully paid, non- exclusive, perpetual, worldwide, transferable license to use, modify, improve, create Derivative Works from, and sublicense, the Utility Software Programs (in both object and source code format) identified on Exhibit L as being owned by Certegy or a member of the Certegy Group for any and all fields of use and to any and all Persons. + + (f) The Licensed Certegy Materials may be marketed under such name and in such manner as Equifax chooses, consistent with the terms and conditions of this Agreement. + + (g) Except for the Equifax Group's rights described in Section 4.4(a), (b) and (e) above, the Certegy Group's rights in and to the Licensed Certegy Materials shall be and remain the exclusive property of Certegy or the respective Designated Certegy Member. + + Section 4.5. Ownership of Enhancements by Equifax. + + (a) Unless Exhibit K provides otherwise, Equifax, or the respective Designated Equifax Member, shall own all the modifications and improvements to, and the Equifax Enhancements and/or Derivative Works made from, the Licensed Certegy Materials developed by any member of the Equifax Group, or by any party other than a member of the Certegy Group at the expense of the Equifax Group. Certegy hereby assigns, and shall cause each member of the Certegy Group to assign, to Equifax, or the respective Designated Equifax Member, all right, title and interest it may hold in and to such modifications, improvements, Equifax Enhancements and Derivative Works. Equifax shall, or shall cause the respective Designated Equifax Member to, have the right to make and file all applications and other documents required to register the copyright(s) and file for patents for such modifications, improvements, Equifax Enhancements and Derivative Works in its discretion and at its sole cost and expense. + + (b) Should Equifax elect to file any application for the registration, perfection or protection of any modifications, improvements, Equifax Enhancements or Derivative Works described in Section 4.5(a), under any copyright, patent or other law of any country or jurisdiction, Certegy will, at the request and expense of Equifax, do all things and sign all documents or instruments reasonably necessary in the opinion of Equifax to assist in the + + 17 + +registration of such claims, file such applications, and obtain, defend and enforce such copyright, patent, mask work and other rights. + + (c) Subject to the license rights granted in Section 4.4, as between the parties, the Licensed Certegy Materials shall be and shall remain the sole and exclusive property of the Certegy Group and the members of the Certegy Group may make any internal use and may commercially exploit any enhancements to the Licensed Materials made or caused to be made by members of the Equifax Group, as they shall deem appropriate without any obligation to any member of the Equifax Group or other restriction. The Certegy Group may in particular distribute and manufacture, or cause to be manufactured or distributed by any third party, any such enhancements and/or Licensed Certegy Materials. + + Section 4.6. Data. + + In no event shall any member of either Group be deemed to have been granted any rights under this Agreement in or to any data owned or maintained by any other member of the other Group, except as specifically provided in Sections 2.1 or 2.2. The respective rights of the members of each Group in and to such data shall be governed exclusively by Sections 2.1 or 2.2 and the Intercompany Data Purchase Agreement. + + Section 4.7. Mutual Obligations. + + (a) The parties agree and acknowledge that, in addition to the rights granted or to be granted to the parties herein, certain other rights to software source code, object code and documentation, and trademarks and service marks related thereto, are described on Exhibit M. + + (b) The parties acknowledge and agree that as of the Closing Date, the UK mainframe environment, consisting of mainframe computer hardware ("Mainframe Hardware") and certain third party software ("OEM Software"), currently consists of three (3) logical partitions ("LPARs"), two (2) of which are shared between Equifax and Certegy. The parties acknowledge and agree that certain OEM Software ("MIPS-Based Software") being used on the Mainframe Hardware contains limitations based upon the number of millions of instructions per second ("MIPS") performed; other OEM Software ("CPU-Based Software") being used on the Mainframe Hardware contains limitations based upon CPU group ratings. The parties also acknowledge and agree that they have previously determined the number of MIPS available, for each party, in excess of the current combined MIPS usage, in connection with the MIPS-Based Software ("Projected MIPS"), and in connection with the CPU-Based Software ("Overhead MIPS"), both as set forth on Exhibit N. With respect to the foregoing, the parties hereby agree as follows: + + (i) Certegy agrees that it shall, no later than March 31, 2002, establish, or cause to be established, one or more new and separate LPAR(s) and that Certegy shall no longer share any LPAR with Equifax. Certegy shall be responsible for paying any and all additional software license fees, service fees, fees related to hardware, or other similar fees incurred to establish the new LPAR(s) and to migrate from the existing to the new LPAR(s). Notwithstanding anything contained herein to the contrary, if the deadline for LPAR separation is not met by Certegy prior to March 31, 2002, any costs or fees, including all + + + + + +fees, costs or expenses incurred as a result of + + 18 + +increased capacity or speed requirements or otherwise, incurred by either party due to the non-separation shall be borne by Certegy. + + (ii) If either party, prior to or at the time of the complete separation of LPARs (described in subsection (i) above), exceeds its respective Projected MIPS for any year, and, thereafter, any of the MIPS-Based Software is required, under the terms of the respective software licenses, to be upgraded to allow usage of the additional MIPS, the party first exceeding its respective Projected MIPS ("Triggering Party") shall bear the full cost and expense of upgrading the MIPS-Based Software licenses (whether or not such party ultimately caused the MIPS limitations to be exceeded). Notwithstanding the foregoing, at any time after an upgrade to a MIPS-Based Software license is purchased, if the non-Triggering Party exceeds its Projected MIPS during a respective year, such non-Triggering Party shall pay the Triggering Party an amount equal to the total cost to the Triggering Party of purchasing the upgrade multiplied by a fraction, the numerator of which is the number of MIPS used by the non-Triggering Party that exceeds its original Projected MIPS, and the denominator of which is the total number of MIPS permitted or allowable pursuant to the MIPS-Based Software upgrade, but excluding the total number of MIPS permitted prior to the upgrade. + + (iii) If either party, prior to or at the time of the complete separation of LPARs (described in subsection (i) above), exceeds its respective Overhead MIPS for any year, and, thereafter, the CPU-Based Software is required, under the terms of the respective software licenses, to be upgraded to allow usage of the additional MIPS, the party first exceeding its respective Overhead MIPS ("CPU Triggering Party") shall bear the full cost and expense of upgrading the CPU-Based Software licenses (whether or not such party ultimately caused the MIPS limitations to be exceeded). Notwithstanding the foregoing, at any time after an upgrade to a CPU-Based Software license is purchased, if the other party ("non-CPU Triggering Party") exceeds its Overhead MIPS during a respective year, such non-CPU Triggering Party shall pay the CPU Triggering Party an amount equal to the total cost to the CPU Triggering Party of purchasing the upgrade multiplied by a fraction, the numerator of which is the number of MIPS used by the non-CPU Triggering Party that exceeds its original Overhead MIPS, and the denominator of which is the total number of MIPS permitted or allowable pursuant to the CPU-Based Software upgrade, but excluding the total number of MIPS permitted prior to the upgrade. + + (iv) The rules related to OEM Software upgrade requirements described in subsections (ii) and (iii) above shall apply in the same manner, before or after the completion of the LPAR separation, with respect to Mainframe Hardware upgrade requirements. + + (v) Notwithstanding the foregoing, Certegy shall cease the use of any software or hardware that is shared between the parties no later than the date which is two (2) years following the Closing Date. + + (c) The parties acknowledge that the Licensed Materials are "intellectual property" within the meaning of Section 101 of the Federal Bankruptcy Act and shall be subject to Section 365(n) thereof, all as set forth in the Intellectual Property Bankruptcy Protection Act, Public Law 100-506, 102 Stat. 2538. + + 19 + + (d) In full and complete payment of the licenses granted in this Agreement, the parties have made the payment described in the Distribution Agreement as set forth in the Distribution Agreement. + + (e) Each party shall notify the other party of any involuntary attachment or other judicial process affecting the Licensed Materials. + + ARTICLE V + + THE CLOSING + + Section 5.1. Equifax Deliverables. + + On or before the Distribution Date, and effective as of the Closing Date, Equifax will, and/or will cause each member of the Equifax Group to, deliver to Certegy each of the following: + + (a) Duly executed assignment and assumption agreements necessary for the assignment and transfer to, and the assumption by Certegy of, the Transferred Equifax Assets and Transferred Equifax Third Party Agreements; + + (b) Duly executed assignment and assumption agreements necessary for the assignment and transfer to, and the assumption by Equifax of, the Equifax Liabilities; and + + (c) Such other agreements, leases, documents or instruments as the parties may agree are necessary or desirable in order to achieve the purposes of this Agreement. + + Section 5.2. Certegy Deliverables. + + On the Closing Date, Certegy will, and/or will cause each member of the + + + + + +Certegy Group to, deliver to Equifax each of the following: + + (a) Duly executed assignment and assumption agreements necessary for the assignment and transfer to, and the assumption by Equifax of, the Transferred Certegy Assets and the Transferred Certegy Third Party Agreements; + + (b) Duly executed assignment and assumption agreements necessary for the assignment and transfer to, and the assumption by Certegy of, the Certegy Liabilities; and + + (c) Such other agreements, documents or instruments as the parties may agree are necessary or desirable in order to achieve the purposes of this Agreement. + + 20 + + ARTICLE VI + + REPRESENTATIONS AND WARRANTIES + + Except as expressly set forth in this Agreement or any Related Agreement, neither any member of the Equifax Group, nor any member of the Certegy Group, has given or is giving any representation or warranty regarding the assets or Liabilities retained, transferred, assumed or licensed as contemplated hereby or thereby, including without limitation, (i) title to the assets, (ii) validity of the Liabilities, (iii) any lien, claim or other encumbrance affecting the assets or Liabilities, or (iv) the value of the assets and the amount of the Liabilities. Except as may be expressly set forth in this Agreement or any Related Agreement, all assets and Liabilities were, or are being, transferred, assigned, licensed, assumed, or are being retained, on an "AS IS," "WHERE IS" basis and the respective transferees, licensees and assignees will bear the economic and legal risks that any such conveyance (x) shall prove to be insufficient to vest in the transferee a title that is free and clear of any lien, claim or other encumbrance, or (y) shall not constitute an infringement of a third party's rights. + + ARTICLE VII + + INDEMNIFICATION + + Section 7.1. Certegy Indemnification of the Equifax Group. + + If the Distribution occurs, on and after the Distribution Date, Certegy shall indemnify, defend and hold harmless each member of the Equifax Group, and each of their respective directors, officers, employees and agents (collectively the "Equifax Indemnitees") from and against any and all damage, loss, liability and expense, (including without limitation, reasonable expenses of investigation and reasonable attorneys' fees and expenses) in connection with any and all Actions or threatened Actions (collectively, "Indemnifiable Losses") incurred or suffered by any of the Equifax Indemnitees and arising out of, or due to, the failure of Certegy, or any other member of the Certegy Group, to timely pay, perform or otherwise discharge, any of the Certegy Liabilities or its obligations under this Agreement. + + 21 + + Section 7.2. Equifax Indemnification of the Certegy Group. + + If the Distribution occurs, on and after the Distribution Date, Equifax shall indemnify, defend and hold harmless each member of the Certegy Group and each of their respective directors, officers, employees and agents (collectively the "Certegy Indemnitees") from and against any and all Indemnifiable Losses incurred or suffered by any of the Certegy Indemnitees and arising out of, or due to, the failure of Equifax, or any other member of the Equifax Group, to timely pay, perform or otherwise discharge, any of the Equifax Liabilities or its obligations under this Agreement or any Related Agreement. + + Section 7.3. Insurance and Third Party Obligations. + + No insurer or any other third party shall be, by virtue of the foregoing indemnification provisions, (a) entitled to a benefit it would not be entitled to receive in the absence of such provisions, (b) relieved of the responsibility to pay any claims to which it is obligated, or (c) entitled to any subrogation rights with respect to any obligation hereunder. + + ARTICLE VIII + + INDEMNIFICATION PROCEDURES + + Section 8.1. Notice and Payment of Claims. + + If any Equifax Indemnitee or Certegy Indemnitee (the "Indemnified Party") determines that it is or may be entitled to indemnification by a party (the "Indemnifying Party") under Article VII (other than in connection with any Action or claim subject to Section 8.2), the Indemnified Party shall deliver to the Indemnifying Party a written notice specifying, to the extent reasonably practicable, the basis for its claim for indemnification and the amount for which the Indemnified Party reasonably believes it is entitled to be indemnified. After the Indemnifying Party shall have been notified of the amount for which the Indemnified Party seeks indemnification, the Indemnifying Party + + + + + +shall, within thirty (30) days after receipt of such notice, pay the Indemnified Party such amount in cash or other immediately available funds (or reach agreement with the Indemnified Party as to a mutually agreeable alternative payment schedule) unless the Indemnifying Party objects to the claim for indemnification or the amount thereof. If the Indemnifying Party does not give the Indemnified Party written notice objecting to such claim and setting forth the grounds therefor within the same thirty (30) day period, the Indemnifying Party shall be deemed to have acknowledged its liability for such claim and the Indemnified Party may exercise any and all of its rights under applicable law to collect such amount. Any amount owed under this Section 8.1 that is past due shall bear interest at a simple rate of interest per annum equal to the lesser of 1% per month or the maximum amount permitted by law. + + Section 8.2. Notice and Defense of Third Party Claims. + + (a) Promptly following the earlier of (i) receipt of notice of the commencement by a third party of any Action against or otherwise involving any Indemnified Party, or (ii) receipt of information from a third party alleging the existence of a claim against an Indemnified Party, + + 22 + +with respect to which indemnification may be sought pursuant to this Agreement (a "Third Party Claim"), the Indemnified Party shall give the Indemnifying Party written notice thereof. The failure of the Indemnified Party to give notice as provided in this Section 8.2(a) shall not relieve the Indemnifying Party of its obligations under this Agreement, except to the extent that the Indemnifying Party is prejudiced by such failure to give notice. Within thirty (30) days after receipt of such notice, the Indemnifying Party shall by giving written notice thereof to the Indemnified Party, (i) acknowledge, as between the parties hereto, liability for and, at its option, elect to assume the defense of such Third Party Claim at its sole cost and expense, or (ii) object to the claim of indemnification set forth in the notice delivered by the Indemnified Party pursuant to the first sentence of this Section 8.2(a) setting forth the grounds therefor; provided that if the Indemnifying Party does not within the same thirty (30) day period give the Indemnified Party written notice acknowledging liability or objecting to such claim and setting forth the grounds therefor, the Indemnifying Party shall be deemed to have acknowledged, as between the parties hereto, its liability for such Third Party Claim. + + (b) Any contest of a Third Party Claim as to which the Indemnifying Party has elected to assume the defense shall be conducted by attorneys employed by the Indemnifying Party and reasonably satisfactory to the Indemnified Party; provided that the Indemnified Party shall have the right to participate in such proceedings and to be represented by attorneys of its own choosing at the Indemnified Party's sole cost and expense. If the Indemnifying Party assumes the defense of a Third Party Claim, the Indemnifying Party may settle or compromise the claim without the prior written consent of the Indemnified Party; provided that the Indemnifying Party may not agree to any such settlement pursuant to which any such remedy or relief, other than monetary damages for which the Indemnifying Party shall be responsible hereunder, shall be applied to or against the Indemnified Party without the prior written consent of the Indemnified Party, which consent shall not be unreasonably withheld. + + (c) If the Indemnifying Party does not assume the defense of a Third Party Claim for which it has acknowledged liability for indemnification under Article VII, the Indemnified Party may require the Indemnifying Party to reimburse it on a current basis for its reasonable expenses of investigation, reasonable attorneys' fees and reasonable out-of-pocket expenses incurred in defending against such Third Party Claim and the Indemnifying Party shall be bound by the result obtained with respect thereto by the Indemnified Party; provided that the Indemnifying Party shall not be liable for any settlement effected without its consent, which consent shall not be unreasonably withheld. The Indemnifying Party shall pay to the Indemnified Party in cash the amount for which the Indemnified Party is entitled to be indemnified (if any) within fifteen (15) days after the final resolution of such Third Party Claim (whether by settlement, compromise, or by the final nonappealable judgment of a court of competent jurisdiction or otherwise), or, in the case of any Third Party Claim as to which the Indemnifying Party has not acknowledged liability, within fifteen (15) days after the Indemnifying Party's objection has been resolved by settlement, compromise, or the final nonappealable judgment of a court of competent jurisdiction. + + (d) Notwithstanding the foregoing, in no event shall either Equifax or Certegy, or any Member of their respective Group, have any liability, whether based on contract, tort (including, without limitation, negligence or strict liability), warranty or any other legal or equitable + + 23 + +grounds, for any punitive, consequential, indirect, exemplary, special or incidental loss or damage suffered by the other arising from or related to this Agreement, including without limitation, loss of data, profits, interest or revenue, or interruption of business, even if such party has been informed of or might otherwise anticipated or foreseen the possibility of such losses or damages; provided, however, that such limitations shall not apply to liabilities which may arise as the result of willful misconduct of a party. Notwithstanding the foregoing, any damages awarded or obtained (whether by settlement, compromise or judgment) as a result of Third Party Claims shall be considered direct damages for purposes of this Agreement. + + + + + + ARTICLE IX + + CONFIDENTIALITY + + Section 9.1. Exclusions. + + Notwithstanding anything to the contrary contained in this Agreement, "Company Information" does not include any information that before being divulged by the receiving party (a) has become generally known to the public through no wrongful act of the receiving party; (b) has been rightfully received by the receiving party from a third party without restriction on disclosure and without, to the knowledge of the receiving party, a breach of an obligation of confidentiality running directly or indirectly to the disclosing party; (c) has been approved for release to the general public by a written authorization of the disclosing party; (d) has been independently developed by the receiving party without use, directly or indirectly, of Company Information received from the disclosing party; or (e) has been furnished to a third party by the disclosing party without restrictions on the third party's rights to disclose the information. + + Section 9.2. Confidentiality. + + (a) Each party acknowledges, and shall cause each member of the Group to acknowledge, that it is in possession of significant confidential or proprietary information concerning the business, operations and assets of the members of the other Group. + + (b) Each party shall, and shall ensure that each member of its Group shall, (i) receive and hold the Company Information of the other Group in trust and in strictest confidence; (ii) protect such Company Information from disclosure and in no event take any action causing, or fail to take the action necessary in order to prevent, any such Company Information to lose its character as Company Information; (iii) exercise at a minimum the same care it would exercise to protect its own highly confidential information; and (iv) not use, reproduce, distribute, disclose, or otherwise disseminate the Company Information of the other Group, (A) except as authorized pursuant to this Agreement or any Related Agreement, or (B) except pursuant to a requirement of a governmental agency or of law without similar restrictions or other protections against public disclosure; provided, however, with respect to disclosures pursuant to (B) above, the receiving party must first give written notice of such required disclosure to the disclosing party, take reasonable steps to allow the disclosing party to seek to protect the confidentiality of the Company Information required to be disclosed, make a reasonable effort to obtain a protective order requiring that the Company Information so disclosed be used only for the purposes for which disclosure is required, and shall disclose only that part of the Company Information + + 24 + +which, in the written opinion of its legal counsel, it is required to disclose. In no event shall the receiving party exercise less than a reasonable standard of care to keep confidential the Company Information. Any and all reproductions of such Company Information must prominently contain a confidential legend. + + (c) The receiving party may make disclosures of the Company Information of the disclosing party only to Representatives of the receiving party's Group (i) who have a specific need to know such information; and (ii) who the receiving party has obligated under a written agreement to hold such Company Information in trust and in strictest confidence and otherwise to comply with the terms and provisions of this Agreement or terms and conditions substantially similar to and implementing the same restrictions and covenants as those set forth in this Agreement. Certegy and Equifax agree, and shall ensure that each member of their respective Group agrees, to diligently monitor each such Representative, diligently enforce such agreements with its Representatives, and, upon request by the other party, promptly to furnish to the other party a certified list of the receiving party's Representatives having had access to such Company Information. + + (d) The covenants of confidentiality set forth in this Agreement (i) will apply after the Closing Date to all Company Information disclosed to the receiving party before, on and after the Closing Date and (ii) will continue and must be maintained from the Closing Date through the termination of the relationship under this Agreement between Equifax and Certegy (A) with respect to Proprietary Information, the period during which the Proprietary Information constituting a part of the Company Information retains its status as a "trade secret" under applicable law; and (B) with respect to Confidential Information constituting a part of the Company Information, for the shorter of a period equal to three (3) years after the Closing Date, or until such Confidential Information no longer qualifies as confidential under applicable law. + + Section 9.3. Employee Confidentiality Agreements. + + The members of each Group have entered into confidentiality and non- disclosure agreements with their respective employees. To the extent that any employee during or after employment violates any such agreement and such violation is or may in the future be to the detriment of the other Group, at the written request of the affected party, the other party shall, or shall cause the appropriate members of its Group to, promptly bring and diligently pursue an action against such employee if and to the extent reasonable under the circumstances to preserve the value of the assets and Licensed Materials. The Group member employing the employee violating his/her confidentiality and non- disclosure agreement shall have the unilateral right to determine the forum for, the manner of proceeding in, and legal counsel for such action and shall be + + + + + +entitled to any damages or other relief against such employee awarded in such action to the extent related to such Group's assets or business or to the Licensed Materials. Such enforcement against and recovery by a Group member from its breaching employee shall not constitute a release or sole remedy for the members of the other Group injured by such breaching employee's actions, and such members of the other Group may bring a claim against the Group members employing the breaching employee for a breach of this Agreement. Each party shall bear all out-of-pocket costs of pursuing such action and the other party shall cooperate in connection therewith. + + 25 + + Section 9.4. Rights and Remedies. + + (a) If either party, or any member of the Group, should breach or threaten to breach any of the provisions of this Agreement, the non-breaching party, in addition to any other remedies it may have at law or in equity, will be entitled to a restraining order, injunction, or other similar remedy in order to specifically enforce the provisions of this Agreement. Each party specifically acknowledges, and shall cause each member of its respective Group to acknowledge, that money damages alone would be an inadequate remedy for the injuries and damage that would be suffered and incurred by the non-breaching party as a result of a breach of any of the provisions of this Agreement. In the event that either party, or a member of such party's Group, should seek an injunction hereunder, the other party hereby waives, and shall cause each member of its Group to waive, any requirement for the submission of proof of the economic value of any Company Information or the posting of a bond or any other security. In the event of a dispute between the parties, the non-prevailing party shall pay all costs and expenses associated with resolving the dispute, including, but not limited to, reasonable attorneys' fees. + + (b) The receiving party shall notify the disclosing party immediately upon discovery of any unauthorized use or disclosure of Company Information, or any other breach of this Agreement by the receiving party or any Representative of the receiving party's Group, and will cooperate with the disclosing party in every reasonable way to help the disclosing party regain possession of its Company Information and prevent its further unauthorized use or disclosure. The receiving party shall be responsible for the acts of any Representative of its Group that are in violation of this Agreement. + + Section 9.5. Competitive Activities. + + (a) Subject to the rights and obligations set forth in this Article IX, each party understands and acknowledges that the other party's Group may now market or have under development products that are competitive with products or services now offered or that may be offered by it and/or members of its Group, and the parties' communications hereunder will not serve to impair the right of either party, or any member of its respective Group, to independently develop, make, use, procure, or market products or services now or in the future that may be competitive with those offered by the other party's Group, nor require either party, and/or the members of its Group, to disclose any planning or other information to the other party. + + (b) Neither party will be restricted in using, in the development, manufacturing and marketing of its products and services and its operations, any data processing or network management or operation ideas, concepts, know-how and techniques which are retained in the minds of employees who have had access to the other party's Company Information subject to the restrictions set forth in this Agreement. + + Section 9.6. No Implied Rights. + + Except as provided herein or in any Related Agreement, all Company Information is and shall remain the property of the disclosing party and/or the respective member of its Group. By disclosing Company Information to the receiving + + 26 + +party's Group, the disclosing party and/or the members of its Group do(es) not grant any express or implied rights or license to the receiving party's Group to or under any patents, patent applications, inventions, copyrights, trademarks, trade secret information, or other intellectual property rights heretofore or hereafter possessed by the disclosing party and/or the members of its Group. + + ARTICLE X + + CONTINUED ASSISTANCE + + Section 10.1. Continued Assistance and Transition. + + (a) Following the Closing Date, Equifax shall, and shall cause each member of the Equifax Group to, cooperate in an orderly transfer of the Transferred Equifax Assets and the Transferred Equifax Third Party Agreements to Certegy or the respective Designated Certegy Member. From time to time, at Certegy's request and without further consideration, Equifax shall, and shall cause each member of the Equifax Group, as applicable, to execute, acknowledge and deliver such documents, instruments or assurances and take such other action as Certegy may reasonably request to more effectively assign, convey and transfer any of the Transferred Equifax Assets and the Transferred Equifax Third Party + + + + + +Agreements. Equifax will assist Certegy in the vesting, collection or reduction to possession of such Transferred Equifax Assets and Transferred Equifax Third Party Agreements. + + (b) Following the Closing Date, Certegy shall, and shall cause each member of the Certegy Group to, cooperate in an orderly transfer of the Transferred Certegy Assets and Transferred Certegy Third Party Agreements to Equifax or the respective Designated Equifax Member. From time to time, at Equifax's request and without further consideration, Certegy shall, and shall cause each member of the Certegy Group, as applicable, to execute, acknowledge and deliver such documents, instruments or assurances and take such other action as Equifax may reasonably request to more effectively assign, convey and transfer any of the Transferred Certegy Assets and Transferred Certegy Third Party Agreements. Certegy will assist Equifax in the vesting, collection or reduction to possession of such Transferred Certegy Assets and Transferred Certegy Third Party Agreements. + + Section 10.2. Records and Documents. + + (a) As soon as practicable following the Closing Date, Equifax and Certegy shall each arrange for the delivery to the other of existing corporate and other documents (e.g. documents of title, source code, contracts, etc.) in its possession relating to the Transferred Assets, Transferred Third Party Agreements and assumed Liabilities. + + (b) From and after the Closing Date, Equifax and Certegy shall each, and shall cause each member of its Group to, afford the other and its accountants, counsel and other designated Representatives reasonable access (including using reasonable efforts to give access to person or firms possessing such information) and duplicating rights during normal business hours to all records, books, contracts, instruments, computer data and other data and information in its possession relating to the assets, Liabilities, Licensed Materials, business and affairs of the other (other than data and information subject to any attorney/client or other privilege), insofar as such + + 27 + +access is reasonably required by the other, including without limitation, for audit, accounting and litigation purposes. + + (c) Notwithstanding the foregoing, either party may destroy or otherwise dispose of any information at any time in accordance with the corporate record retention policy maintained by such party with respect to its own records. + + Section 10.3. Litigation Cooperation. + + Upon written request, Equifax and Certegy shall, and shall cause each member of its Group to, use reasonable efforts to cooperate in the evaluation and defense of third party Actions arising out of the business of the other party or of any member of the other party's Group prior to the Distribution Date in which the requesting party or any member of its Group may from time to time be involved, at the cost and expense of the requesting party. Such cooperation shall include, without limitation, making its Representatives available as witnesses or consultants to the extent that such persons may reasonably be required in connection with such third party Actions. + + ARTICLE XI + + MISCELLANEOUS + + Section 11.1. Expenses. + + Except as specifically provided in this Agreement or any Related Agreement, all costs and expenses incurred in connection with the preparation, execution, delivery and implementation of this Agreement and with the consummation of the transactions contemplated by this Agreement (including transfer taxes and the fees and expenses of all counsel, accountants and financial and other advisors) shall be paid by Equifax. + + Section 11.2. Notices. + + All notices and communications under this Agreement shall be deemed to have been given (a) when received, if such notice or communication is delivered by facsimile, hand delivery or overnight courier, or (b) three (3) business days after mailing if such notice or communication is sent by United States registered or certified mail, return receipt requested, first class postage prepaid. All notices and communications, to be effective, must be properly addressed to the party to whom the same is directed at its address as follows: + + If to Equifax, to: Equifax Inc. 1550 Peachtree Street Atlanta, Georgia 30309 Attn: Phillip J. Mazzilli, Chief Financial Officer Fax: (404) 885-8682 + + with a copy to: + + 28 + + + + + + Equifax Inc. 1550 Peachtree Street Atlanta, Georgia 30309 Attn: Kent E. Mast, General Counsel Fax: (404) 885-8988 + + If to Certegy, to: + + Certegy Inc. 11720 Amberpark Drive, Suite 600 Alpharetta, Georgia 30004 Attn: Bruce S. Richards Corporate Vice President, General Counsel and Secretary Fax: (678) 867-8100 + + with a required copy to: + + Certegy Inc. P.O. Box 349 Alpharetta, Georgia 30009 Attn: Michael T. Vollkommer Corporate Vice President and Chief Financial Officer Fax: (678) 867-8100 + + Either party may, by written notice so delivered to the other party in accordance with this Section 11.2, change the address to which delivery of any notice shall thereafter be made. + + Section 11.3. Amendment and Waiver. + + This Agreement may not be altered or amended, nor may any rights hereunder be waived, except by an instrument in writing executed by the party or parties to be charged with such amendment or waiver. No waiver of any terms, provision or condition of or failure to exercise or delay in exercising any rights or remedies under this Agreement, in any one or more instances, shall be deemed to be, or construed as, a further continuing waiver of any such term, provision, condition, right or remedy or as a waiver of any other term, provision or condition of this Agreement. + + Section 11.4. Entire Agreement. + + This Agreement, together with the Related Agreements, constitutes the entire understanding of the parties hereto with respect to the subject matter hereof, superseding all negotiations, prior discussions and prior agreements and understandings relating to such subject matter. To the extent that the provisions of this Agreement are inconsistent with the provisions of any other Related Agreement, the provisions of this Agreement shall prevail with respect to the subject matter hereof. + + 29 + + Section 11.5. Parties in Interest. + + Neither of the parties hereto may assign its rights or delegate any of its duties under this Agreement without the prior written consent of each other party. This Agreement shall be binding upon, and shall inure to the benefit of, the parties hereto and their respective successors and permitted assigns. Nothing contained in this Agreement, express or implied, is intended to confer any benefits, rights or remedies upon any person or entity other than members of the Equifax Group and the Certegy Group and the Equifax Indemnitees and Certegy Indemnitees under Articles VII and VIII hereof. + + Section 11.6. Further Assurances and Consents. + + In addition to the actions specifically provided for elsewhere in this Agreement, each of the parties hereto will use its reasonable efforts to (a) execute and deliver such further instruments and documents and take such other actions as any other party may reasonably request in order to effectuate the purposes of this Agreement and to carry out the terms hereof and (b) take, or cause to be taken, all actions, and to do, or cause to be done, all things, reasonably necessary, proper or advisable under applicable laws, regulations and agreements or otherwise to consummate and make effective the transactions contemplated by this Agreement, including without limitation, using its reasonable efforts to obtain any consents and approvals and to make any filings and applications necessary or desirable in order to consummate the transactions contemplated by this Agreement; provided that no party hereto shall be obligated to pay any consideration therefor (except for filing fees and other similar charges) to any third party from whom such consents, approvals and amendments are requested or to take any action or omit to take any action if the taking of or the omission to take such action would be unreasonably burdensome to the party or its Group or the business thereof. + + Section 11.7. Severability. + + The provisions of this Agreement are severable and should any provision hereof be void, voidable or unenforceable under any applicable law, such provision shall not affect or invalidate any other provision of this Agreement, which shall continue to govern the relative rights and duties of the parties as though such void, voidable or unenforceable provision were not a part hereof. + + Section 11.8. Governing Law. + + This Agreement shall be construed in accordance with, and governed by, the + + + + + +laws of the State of Georgia, without regard to the conflicts of law rules of such state. + + Section 11.9. Counterparts. + + This Agreement may be executed in one or more counterparts, each of which shall be deemed an original instrument, but all of which together shall constitute but one and the same agreement. + + 30 + + Section 11.10. Disputes. + + Any Disputes arising under this Agreement, whether based on contract, tort, statute or otherwise, including but not limited to, disputes in connection with claims by third parties, shall be resolved in accordance with Section 15.10 of the Distribution Agreement; provided that the parties shall retain the rights and remedies specified in Section 9.4 hereof. + + Section 11.11. Force Majeure. + + Neither party will be liable for any loss or damage due to causes beyond its control, including, but not limited to, fire, accident, labor difficulty, war, power or transmission failures, riot, Acts of God or changes in laws and regulations, provided that the affected party must (a) promptly notify the other party in writing and furnish all relevant information concerning the event of force majeure; (b) use reasonable efforts to avoid or remove the cause of its nonperformance; and (c) proceed to perform its obligations with dispatch when such cause is removed. + + Section 11.12. Documentation. + + Prior to the Distribution Date and from time to time thereafter, the parties will prepare, maintain and update schedules of the Transferred Equifax Assets, the Transferred Certegy Assets, the Licensed Equifax Materials, the Licensed Certegy Materials, and the Third Party Agreements, the Third Party Use Rights and the Third Party Rights transferred and/or provided by each Group to the other Group, in such detail as shall be appropriate for the management and administration of these items as described in this Agreement. + + Section 11.13. Headings. + + The Article and Section headings set forth in this Agreement are included for administrative, organizational and convenience purposes, and are not intended to affect the meaning of the provisions set forth in this Agreement or to be used in the interpretation of this Agreement. + + 31 + + IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as of the day and year first above written. + + EQUIFAX INC. + + By: /s/ Kent E. Mast ------------------------------------ Title: Corporate Vice President, General Counsel and Secretary Date: June 30, 2001 + + CERTEGY INC. + + By: /s/ Bruce S. Richards ------------------------------------ Title: Corporate Vice President, General Counsel and Secretary Date: June 30, 2001 + + 32 + + EXHIBIT A + + CERTEGY GROUP + + State or Country of Name of Subsidiary Incorporation ------------------ -------------------- AGES Participacoes S.A. Brazil Aircrown Ltd. England Card Brazil Holdings, Inc. Georgia Card Brazil Holdings Ltda. Brazil Card Brazil LLC Georgia Central Credit Services Ltd. Scotland + + + + + +Equifax Asia Pacific Holdings, Inc. Georgia Equifax Australia Plc England Equifax Card Services, Inc. Florida Equifax Card Solutions Australia Pty Ltd. Australia Equifax Card Solutions Ltd. England Equifax Card Solutions S.A. France Equifax (Cayman Islands) Ltd. Cayman Islands Equifax Check Services, Inc. Delaware Equifax E-Banking Solutions, Inc. Georgia Equifax Ltd. New Zealand Equifax Payment Recovery Services, Inc. Georgia Equifax Payment Services, Inc. Delaware Equifax Pty Ltd. Australia Equifax SNC France Financial Insurance Marketing Group, Inc. District of Columbia First Bankcard Systems, Inc. Georgia Payment Brasil Holdings Ltda. Brazil Payment Chile, SA. Chile Payment Europe LLC Georgia Payment South America Holdings, Inc. Georgia Payment South America LLC Georgia Payment U.K. Ltd. England Procard S.A. Chile Retail Credit Management Ltd. England Telecredit Canada Inc. Canada Transax France Plc England + + 33 + + Transax Ireland Ltd. Ireland Transax Plc England Unnisa -- Solucoes em Meios de Pagamento Ltda Brazil VIV Plc England + + Equifax Card Services, Inc. will own a 51% interest in Circle of Value, Ltd. + + Payment Brazil Holdings Ltda. will own a 51% interest in Partech Ltda. (Brazil). + + The names above are the names of the relevant entities as of June 20, 2001 and may have been changed subsequently. + + 34 + + EXHIBIT B + + TRANSFERRED EQUIFAX ASSETS + + DESCRIPTION OF ASSET OWNER ASSIGNEE RETAINED RIGHTS ------------------------- ------------ ------------ --------------- Trademark: "Pathways", Equifax Inc. Certegy Inc. None. U.S. Reg. #: 1,920,133 + +Trademark: "Cardsource", Equifax Inc. Certegy Inc. None. U.S. Reg. #: 2,142,162 + +Trademark: "Interguard", Equifax Inc. Certegy Inc. None. U.S. Reg. #: 2,019,884 + +Trademark: "Paycheck Equifax Inc. Certegy Inc. None. Accept", U.S. Application Pending, Serial #: 76/135,366 + +Trademark: "Cardview", Equifax Inc. Certegy Inc. None. U.S. Application Pending, Serial #: 76/175,937 + + Without limiting Equifax's requirements under the Agreement, Equifax (or the respective member of the Equifax Group) shall execute such acknowledgements, grants and assignments of rights in and to the intellectual property described above, as Certegy may reasonably request for the purpose of evidencing, enforcing, registering or defending its worldwide ownership of such intellectual property. + + 35 + + + + + + EXHIBIT C + + EQUIFAX THIRD PARTY AGREEMENTS - TRANSFERS + + Equifax will transfer, or cause to be transferred the following agreements to Certegy, effective as of the Closing Date: + + Maximum Fees/Costs Name of Agreement Parties to Agreement/Other Matters to be Paid --------------------------------------- ------------------------------------------------- ------------------ Compuware: Equifax Inc. and Compuware, Inc. $0 + +License Agreement between Equifax, Inc. Equifax will transfer or have transferred to and Compuware, Inc. Certegy such rights under the agreement to permit Certegy to use, for the duration of the license, one copy of the following software products: + + Abend Aid/XLS w/Primary Language Cobol File Aid/MVS Expeditor/CICS w/Assembler Expeditor/TSO + + Strobe MVS for Sysplex with Cobol + + CICS Feature + + Advanced Session Mgmt Feature + + QACenter Enterprise Edition -- Includes 1 ConcurrentUser + + Reconcile - 1 Concurrent User + + QADirector - 1 Concurrent User + + TrackRecord - 1 Concurrent User + + Track Record - 3 Concurrent Users + + APMPower for Windows - 20 Concurrent Users + + In lieu of transferring such license, Equifax may purchase new licenses on Certegy's behalf. + +Oracle: Equifax Inc. and Oracle, Inc. $0 + +Software License and Services Agreement Equifax will transfer, or have transferred, dated March 5, 1992, and attendant certain rights in and to the products identified Ordering Documents on Appendix A to this Exhibit C: + + TOTAL: $0 + + In addition to the foregoing, Equifax shall purchase on Certegy's behalf, prior to the Closing Date, licenses to use certain software products, as identified below. The list below sets forth the vendor, the name of the software products to be obtained on Certegy's behalf by + + 36 + +Equifax and the maximum license fee or other costs that Equifax shall be required to pay for each license (or group of licenses). + + VENDOR SOFTWARE PRODUCT MAXIMUM FEES/COSTS TO BE PAID ------------------- -------------------------------------- ----------------------------------------- UK SOFTWARE Allen Systems Group Beta 44 $91,491.84 BETA Systems Beta 92 Version 3 CAF $151,196 (collectively for all UK-related BETA Systems Beta 92 Version 3 VAF BETA Systems licenses) BETA Systems Beta 92 Version 3 BETA Systems Beta 93 Version 3 BETA Systems Beta 93 Version 3 CAF BETA Systems Beta 93 Version 3 VAF CNM CNM-XFER $33,605 (collectively for all UK-related CNM EEMS CNM licenses) Compute Bridgend Selcopy (Corporate) $120,120 Computer Associates APAS/Insight $2,573,393 (collectively for all UK-related Computer Associates licenses) Computer Associates Endevor/MVS Computer Associates Endevor/MVS ACM Computer Associates Endevor/MVS Extended Processor Computer Associates Endevor/MVS External Computer Associates Endevor/MVS Natural Security Interface Computer Associates Endevor/MVS Parallel Development Manager Computer Associates Endevor/MVS Quick Edit + + + + + +Computer Associates Intertest CICS W/XA-ESA Computer Associates Intertest/Batch Computer Associates JCL Check Computer Associates Netspy (excluding Modeling) Computer Associates One Computer Associates Prevail/Spool (Pkg) Computer Associates Spaceman Computer Associates TPX (extended) Compuware APM Power *2 $530,000 (collectively for all UK-related Compuware licenses) Compuware Assembler Option for Xpediter CICS Compuware CICS Abend-Aid FX Compuware File-AID/Data Solutions Compuware File-AID/MVS Compuware QA Hiperstation Compuware Strobe ADABAS/NATURAL Feature Compuware Strobe Advanced Session Mgt Feature Compuware Strobe CICS Feature + + 37 + + Compuware Strobe COBOL Feature Compuware Strobe MVS for Sysplex 1 Compuware Xpediter CICS Cobol Compuware XPEDITOR/Exchange Macro 4 DUMPMASTER (combined) (All Features $89,196 - includes Base and Cobol Feature) + +SAS BASE $138,910 (collectively for all UK-related SAS MXG (Merrill Consultants) SAS licenses) SyncSort SyncSort MVS $52,983 PWC - ALPHARETTA Chicago-Soft Inc. MVS/Quick-Ref $26,000 Cincom Mantis $318,460 (collectively for all Cincom Scenario PWC - Alpharetta-related Cincom licenses) Computer Associates ALLOCATE $2,500,000 (collectively for all PWC Computer Associates DELIVER - Alpharetta-related Computer Associates licenses) Computer Associates DELIVER CICS OPTION Computer Associates DELIVER ROSCOE INTERFACE Computer Associates DELIVER VTAM INTERFACE Computer Associates DISK Computer Associates EASYTRIEVE PLUS Computer Associates ELEVEN Computer Associates ELEVEN/DISASTER RECOVERY PLNG Computer Associates ELEVEN/NOTEPAD Computer Associates ELEVEN/REPORTS PLUS Computer Associates ENDEVOR/MVS Computer Associates ENDEVOR/MVS AUTOMATED CONFIG MG Computer Associates ENDEVOR/MVS EXTENDED PROCESSOR Computer Associates ENDEVOR/MVS EXTERNAL SCRTY INT Computer Associates ENDEVOR/MVS LIBRARIAN INTERFACE Computer Associates ENDEVOR/MVS PARALLEL DEV MGR Computer Associates ENDEVOR/MVS ROSCOE INTERFACE Computer Associates LIBRARIAN (BASE+LIB/AM+TSO) Computer Associates MULTI-IMAGE ALLOCATION Computer Associates NEUMICS ACCOUNTING AND CHARGEBACK Computer Associates NEUMICS ANLYZR FOR MEASUREWARE Computer Associates NEUMICS BASE Computer Associates NEUMICS CICS ANALYZER Computer Associates NEUMICS DASD SPACE ANALYZER W/DSC + + 38 + + Computer Associates NEUMICS SYSTEM RELIABILITY ANALYZER Computer Associates ONE Computer Associates ONE WORKSTATION - 5 Copies Computer Associates ONE/COPYCAT Computer Associates OPTIMIZER II Computer Associates PANAUDIT PLUS Computer Associates PANAUDIT PLUS EZTP-IMS Computer Associates ROSCOE Computer Associates SEVEN Computer Associates SEVEN WORKSTATION - 5 Copies Computer Associates SEVEN/NOTEPAD Computer Associates SEVEN/REPORT BALANCING Computer Associates SEVEN/REPORTS PLUS Computer Associates SEVEN/SMART CONSOLE Computer Associates SYSVIEW/e Computer Associates TOP SECRET Computer Associates TRANSCENTURY CALENDAR ROUTINES Computer Associates VIEW Computer Associates VIEW ERO OPTION + + + + + +Computer Associates VIEW ROSCOE INTERFACE Computer Associates VIEW VTAM INTERFACE Compuware Abend-AID/XLS with Primary $430,125 (collectively for all PWC Language-Cobol - Alpharetta-related Compuware licenses) Compuware Assembler Option for Xpediter/CICS Compuware Assembler Option for Xpediter/TSO Compuware CICS ABEND-AID/FX Compuware CICS Feature Compuware File-Aid/MVS Compuware Strobe MVS for Sysplex with Cobol Compuware Xpediter/CICS with Cobol Compuware Xpediter/TSO with Cobol Diversified Job/Scan $50,000 Innovation FATS/FATAR $12,750 (collectively for all PWC Innovation FDR/Compaktor - Alpharetta-related Innovation licenses) IVIS Accounts Payable $217,314 (collectively for all PWC - Alpharetta-related IVIS licenses) IVIS General System IVIS Purchasing Landmark Monitor for CICS/ESA $91,133 MacKinney KWIK-KEY $2,295 Merrill MXG $ 1,500 SAS BASE SAS $361,685 (collectively for all PWC - Alpharetta-related SAS licenses) SAS SAS/AF + + 39 + + SAS SAS/STAT Sterling Commerce Connect: Direct for OS/390 (TCP/IP & $76,462 SNA Products) Syncsort Inc. Proc SyncSort $69,385 (collectively for all PWC - Syncsort Inc. SyncSort MVS Alpharetta-related Syncsort licenses) Tone OMC-Print $66,930 PWC-MIDRANGE Citrix-GEAC Citrix Mf Xpa 1.0-10u Conn Pk W/sub $35,475 (collectively for all PWC - Adv Nt4/w2k Midrange-related Citrix - GEAC licenses) Citrix - GEAC Citrix Mf Xpa 1.0-20u Conn Pk W/sub Adv Nt4/w2k Citrix-GEAC Citrix Mf Xpa 1.0-50u Conn Pk W/sub Adv Ntr/w2k Citrix - GEAC Citrix Mf Xpa 1.0-starter System 20u W/sub Adv Nt4/w2K Citrix - GEAC Microsoft Open Business Windows 2000 Bus - 5.0 Cal. Citrix-GEAC Microsoft Open Business Windows 2000 Terminal Services Bus-5.0 Cal Citrix - GEAC Microsoft Open Business Windows Server 2000 Bus - 5.0 Citrix-GEAC Microsoft Windows 2000 Server Media Kit Edify Corporation Edify 6.2 Departmental (24 Agents) $63,683 (collectively for all PWC - Midrange Edify Corporation Edify Development License -related Edify Corporation licenses) (Workforces Application Server: Development Level) Edify Corporation Telephony Services: Departmental Edify Corporation Facsimile Services: Departmental Edify Corporation Facsimile Services Software: Single Concurrent User Edify Corporation Multi-Database Access: Department Edify Corporation Electronic Workforce for Windows NT Development Kit v6.2 Edify Corporation Workforce Application Builder (Agent Trainer) Edify Corporation American Spanish Language Edify Corporation Canadian French Language Embarcadero (10) Embarcadero Rapid SQL $8,970 Technologies, Inc. Hyperion (1) Base Solution - Hyperion $124,000 (collectively for all Enterprise License (includes 2 PWC - Midrange-related Hyperion Co-Located Named Administrator licenses) Users) Hyperion (10) Hyperion Enterprise Named Basic User (transfer of Equifax licenses) Kronos (1) Connect, primary payroll interface $151,090 (collectively for all PWC - Midrange-related Kronos licenses) Kronos (1) Connect, secondary payroll interface + + 40 + + + + + + Kronos (1) Workforce Accruals Kronos (1) Workforce Managers, up to 50 Kronos (1) Workforce Web Kronos (1) Workforce Central v4. (2,500 employees) Kronos (2) WFC Administration and Support Kronos (2) WFC Basic Configuration Kronos (2) WFC Daily Operations Kronos (2) WFC Database Maintenance Kronos (210 Hrs) Implementation and Installation and Training Kronos (4) WFC Implementation Workshop Kronos (6) Kronos Virtual Classroom Module Sessions Merant (2) PVCS Licenses $10,000 Resumix Resumix Human Asset Management(TM) $330,000 (Collectively for all PWC System (Includes Recruiter's Desktop, Midrange-related Resumix Licenses) Operator's Desktop and Database "A" Server License (1) Resumix Concurrent Users (10) Resumix Non-Concurrent Users (5) Resumix Interact Toolkit Resumix Test License Resumix Xerox OCR Software for Resume Processing (1) Resumix Crystal Reports Module (1) Resumix Fulcrum Full-Text Search Engine (1) Resumix ResFax In/Out (1) Resumix Employment Folder (1) Resumix AutoMatch Capability (1) Resumix System Administration Module (1) Resumix Resumix Internet Recruiter Including 55 Requistions Resumix LumiNet for two (2) Users Resumix Requisition Lookup (1) Shanon Enterprise Client Site License $55,000 Sybase (1 server) Adaptive Server Enterprise $157,021 (collectively for all PWC - Sybase (85) Adaptive Server Enterprise Midrange-related Sybase licenses) Sybase (1) Adaptive Server Ent UNIX/WP 32 User (1) Sybase (1) Adaptive Server Ent UNIX/WP 32 User Sybase (1) LM French Connectivity Sybase (1) LM Japanese Connectivity + + 41 + + Sybase (1) LM German Connectivity Sybase (1) LM Spanish Server Sybase (1) LM Chinese Server + + TOTAL: $8,940,172.84 + + Under no circumstances shall Equifax be required to pay, with respect to the transfer of, acquisition of, or procuring or securing of Third Party Agreements or Third Party Use Rights, costs, fees or expenses exceed the sum of the "totals" identified on this Exhibit C and Exhibit D, except that: + + (a) Equifax shall be responsible for paying any sales, transfer or VAT taxes directly associated with transferring and/or acquiring such licenses, and the parties agree that such taxes are not included in the maximum fees/costs identified above; and + + (b) Equifax agrees to pay (i) any fees and costs, not to exceed $16,500, in connection with obtaining any consents necessary with respect to the Pitney Bowes DocSense software products, LPC Finalist and Streamweaver, and (ii) any fees and costs, not to exceed $120,000, in connection with obtaining any consents necessary with respect to SAS Institute's software products, SAS Base, SAS Connect, SAS Echo, SAS Stat and SAS Warehouse. Such amounts to be paid shall be additional to the amounts required to be paid otherwise under this Exhibit C or Exhibit D. + + The scope of the licenses to be purchased by Equifax pursuant to the list above shall be limited as follows: + + (a) Certegy's rights to use the applicable software shall be substantially similar to the rights held by Equifax with respect to the Certegy Business on the Closing Date; provided that in no event shall such rights be greater, in terms of duration, territory, usage or otherwise (including rights related to the number of users, the number of concurrent users or the number of MIPS) than Equifax possessed and used in the Certegy Business on the Closing Date. + + (b) Equifax shall not be required to pay any maintenance fees with respect to the software licenses unless such maintenance fee obligations are bundled as part of the license fee for the first year of the license. + + + + + + 42 + + APPENDIX A TO EXHIBIT C + + ORACLE PRODUCT ASSIGNED/TRANSFERRED TO CERTEGY INC. + + PRODUCT LICENSE TYPE LICENSE LEVEL NUMBER OF USERS ----------------------------------- ------------------------- ------------- --------------- Oracle Database Enterprise Edition Named User, Multi-Server Deployment 228 Oracle Database Enterprise Edition Concurrent-Network Full Use 32 Oracle Database Enterprise Edition Named User, Multi-Server Full Use 36 Oracle Database Enterprise Edition Universal Power Units Full Use 64,504 Designer/2000 Developer Full Use 4 Developer/2000 Concurrent Full Use 2 Developer Server Concurrent Full Use 15 Diagnostic Management Pack Universal Power Units Full Use 1,600 Discoverer - Administrative Edition Concurrent Full Use 1 Discoverer - User Edition Concurrent Full Use 43 Oracle Database Enterprise Edition Concurrent-Network Deployment 250 Partitioning Universal Power Units Full Use 11,571 Oracle Database Personal Edition Named User, Single-Server Full Use 1 Tuning Management Pack Universal Power Units Full Use 1,600 Web Application Server EE Processors Full Use 2 + + 43 + + + + Support Services Agreement related to this Agreement. + +8. PWC: Finance and Accounting Equifax will negotiate and enter into new Not applicable. $ 0 Business Process and Support agreements that will permit Certegy to have Services Agreement certain use rights under this or related to this Agreement. + +9. EMC: Equifax will obtain expanded rights, Not applicable. $ 200,000 pursuant to a separate agreement between Product Transfer License Equifax and EMC, to use the EMC Catalog and Maintenance Agreement Solution to process data for and on behalf of Certegy + + Commencement Dates: + + -#ME960283 -- 11/22/98 + + -#ME960265 -- 6/19/98 + +10. GEAC: Equifax will obtain rights under this Not applicable. $ 0 Agreement for third party processors to Agreement dated _July 8, 1996 perform services for and on behalf of between GEAC Enterprise Solutions, Certegy for both Mainframe and Midrange Inc. (formerly known as Geac Software. Computer Systems, Inc and Equifax Inc. (related to Accounts Payable/General Ledger System). + +11. Storage Technology Corp Equifax will obtain on Certegy's behalf Not Applicable $ 0 rights as an "authroized user" under the Master Agreement to use the following software product: + + SILO/ExL M MTHLY + +11. Sterling Commerce: Equifax will obtain expanded rights, Not applicable. $ 0 pursuant to a separate agreement between License Agreement between Equifax Equifax and Sterling Commerce, pursuant to Information Technology, Inc. and which Certegy shall have the right to use Sterling Commerce Inc. the following software products until such time as the Stering Commerce products acquired under Exhibit C arc installed and operational: + + Connect: Direct MVS Connect: Direct SDF + +12. Candle Corporation Equifax will obtain on Certegy's behalf Not applicable. $ 0 rights as an "authorized user" under the Master Agreement to use the following software products: + + Omegamon II MVS Omegamon II DB2 + +13. BMC Software, Inc. Equifax will obtain on Certegy's behalf Not applicable. $ 0 rights as an "authorized user" under the Master Agreement to use the following + + + + + + software product: + + Resolve Pro SMS + +14. Magic Solutions Equifax will acquire a license to the Not applicable. $ 45,643 following software products from Magic Solutions, which license will permit Certegy to use the software products in the Certegy Business: + + - (12) SM/McAfee HD to Magic HP Upgrd Perp + + - Magic HD - Ent. Ed. Connect Sppt. + + - McAfee To Magic Upgrade + + - Professional Services and Training TOTAL: $245,643.00 + + 45 + + EXHIBIT E + + TRANSFERRED CERTEGY ASSETS + + DESCRIPTION OF ASSET OWNER ASSIGNEE RETAINED RIGHTS ----------------------------------- ---------------- ------------ ---------------- U.S. PATENT #5,119,295 ENTITLED Equifax Payment Equifax Inc. None. "CENTRALIZED LOTTERY SYSTEM FOR Services, Inc. REMOTE MONITORING OR OPERATIONS AND fka Telecredit STATUS DATA FROM LOTTERY TERMINALS Inc. INCLUDING DETECTION OF MALFUNCTION AND COUNTERFEIT UNITS", ISSUED JUNE 2,1992 + +U.S. PATENT #5,223,698 ENTITLED Equifax Payment Equifax Inc. None. "CARD-ACTIVATED POINT-OF-SALE Services, Inc. LOTTERY TERMINAL", ISSUED JUNE 29, fka Telecredit 1993 Inc. + +U.S. PATENT #5,239,573 ENTITLED Equifax Payment Equifax Inc. None. "TELEPHONE TERMINAL INCORPORATING Services, Inc. SPEECH SYNTHESIZER FOR ENHANCED fka Telecredit COMMUNICATION", ISSUED AUGUST 24, Inc. 1953 + + Without limiting Certegy's requirements under the Agreement, Certegy (or the respective member of the Certegy Group) shall execute such acknowledgements, grants and assignments of rights in and to the intellectual property described above, as Equifax may reasonably request for the purpose of evidencing, enforcing, registering or defending its worldwide ownership of such intellectual property. + + 46 + + EXHIBIT F + + CERTEGY THIRD PARTY AGREEMENTS - TRANSFERS + +None. + + 47 + + EXHIBIT G + + CERTEGY THIRD PARTY AGREEMENTS - RIGHTS GRANTED + +None. + + 48 + + EXHIBIT H + + SPECIFIED EQUIFAX LIABILITIES + +None. + + 49 + + + + + + EXHIBIT I + + SPECIFIED CERTEGY LIABILITIES + +None. + + 50 + + EXHIBIT J + + LICENSED EQUIFAX MATERIALS + +None. + + 51 + + EXHIBIT K + + LICENSED CERTEGY MATERIALS + + DESCRIPTION OF INTELLECTUAL PROPERTY OWNER OF IP SCOPE OF LICENSE NAME OF LICENSEE ------------------------------ ----------------- ------------------------------ ---------------- U.S. Patent Application Serial Equifax Check Royalty free, non-exclusive, Equifax Inc. No. 09/845662, filed April 30, Services, Inc. worldwide, perpetual license 2001 and entitled "System and to make, practice, have made, Method for Secure Network use and import systems and Transactions" and related PCT processes covered by any Patent Application, filed patent that issues from the April 30, 2001 and entitled applications and to sell to "System and Method for Secure Equifax customers and Network Transactions." potential customers services based on such systems and processes; such license may not be transferred or sublicensed (other than to Equifax Affiliates), except pursuant to a state law merger or the sale of substantially all of the licensee's assets and the licensee has no right to authorize any third party to make, have made or sell the technology, whether or not for purposes of allowing such third parties to build and/or run their own payment systems. + + 52 + + EXHIBIT L + + UTILITY SOFTWARE PROGRAMS + +None, subject to the following: + +For purposes of this Exhibit L, "Unidentified Utility Software Program" means any utility software program (i) that is owned by any member of the Certegy Group or the Equifax Group, (ii) used in the business of the party that is not the owner thereof during the twelve (12) calendar months prior to the Closing Date, (iii) for which a continuing business requirement exists on the Closing Date, and (iv) that is identified, in good faith, by both parties as being a Utility Software Program within twelve (12) months following the Closing Date. + +The parties agree that the use of an Unidentified Utility Software Program by the party who is not the owner thereof in the normal course of its business shall be permissible. This Exhibit L shall be amended, from time to time, to add any Unidentified Utility Software Programs. At any time an Unidentified Utility Software Program is added to this Exhibit, it shall be deemed to be a "Utility Software Program" for purposes of this Agreement. + + 53 + + EXHIBIT M + + OTHER IP ASSETS + + + + + + Asset Ownership/Additional Rights ----------------------- ------------------------------------------------------ APPLY (SOFTWARE OWNERSHIP: APPLICATION) SOURCE CODE, OBJECT CODE AND A. As of the Closing Date, all right, title and DOCUMENTATION interest in and to (i) the APPLY source code (other than the source code owned by Equifax pursuant to subsection B below) and object code, including the customer level code written in the TCL or APPLY Basic programming language, (ii) documentation related to the foregoing, and (iii) all patents, patent rights and copyrights related thereto, shall be and at all times will remain the sole and exclusive property of Certegy. Certegy shall have the right to make, use, sell, copy, distribute, import, develop Derivative Works or enhancements of, and publicly perform and display, for any purpose, any of the foregoing assets without any obligation (including any obligation to account or pay royalties) or liability to Equifax. + + B. As of the Closing Date, all right, title and interest in and to (i) all APPLY customer level source code written in the TCL programming language associated with the Telco operation in St. Petersburg, (ii) source code written in the APPLY Basic programming language associated with Equifax's Canadian processing site in Montreal, (iii) all credit processing platform source code acquired by Equifax Credit Information Services, Inc. from Christopher T. Nelson and Zoot Enterprises, Inc., known as the "Zoot Code", that was used in the development of the APPLY software product, (iv) documentation related to the foregoing, and (v) all patents, patent rights and copyrights related thereto, shall be and at all times will remain the sole and exclusive property of Equifax. Equifax shall have the right to make, use, sell, copy, distribute, import, develop Derivative Works or enhancements of, and publicly perform and display, for any purpose, any of the foregoing assets without any obligation (including any obligation to account or pay royalties) or liability to Certegy. + + LICENSE: As of the Closing Date, Equifax and Certegy shall each have the perpetual, fully paid, worldwide right and license to make, use, sell, copy, distribute, import, develop Derivative Works or enhancements of, and publicly perform and display, for any purpose, the entire APPLY software product (to the extent the licensee does not already own the same), in both source and object code format, and the documentation thereof without any obligation (including any obligation to account or pay royalties) or liability to the other owner. In connection with Certegy's license to Equifax pursuant to the foregoing sentence, Equifax agrees to pay Certegy a one-time license fee of One Million One Hundred Thousand Dollars ($1,100,000.00), which fee will be treated as an intercompany payable from Equifax to Certegy and shall be paid in accordance with Section 8.02 of the Distribution Agreement. In connection with Equifax's license to Certegy pursuant to the foregoing, Certegy agrees to pay Equifax a one-time license fee of One Hundred Thousand Dollars ($100,000.00), which fee will be treated as an intercompany payable from Certegy to Equifax and shall be paid in accordance with Section 8.02 of the Distribution Agreement + + DERIVATIVE PRODUCTS: Any modifications, enhancements or Derivative Works lawfully made by either party to any of the foregoing assets shall be owned by the entity that modified or enhanced such asset or created such Derivative Work from such asset. + + FEES/ALLOCATIONS: As set forth above. + + ADDITIONAL PROVISIONS: Each owner of any of the foregoing assets shall (i) have the right to enforce, in any country, all rights embodied in such assets, and the other party agrees (at its expense) to cooperate in such enforcement action as reasonably requested by the owner thereof, and (ii) have the right to file appropriate patent, trademark, copyright or other applications, in any country, with respect to such assets. + + 54 + + The parties acknowledge and agree that, as between the parties, all right, title and interest in and to the + + + + + + trademark or service mark "APPLY," as it relates to the APPLY software product, shall be and remain the sole and exclusive property of Certegy; provided, however, that Certegy shall grant to Equifax a perpetual, fully paid, world-wide, exclusive license to use the "APPLY" trademark or service mark solely for use in combination with the mark "Equifax" and solely in connection with the use of the APPLY software PRODUCT. + +PAYNET SECURE (SOFTWARE OWNERSHIP: APPLICATION), SOURCE CODE, OBJECT CODE AND As of the Closing Date, all right, title and interest DOCUMENTATION in and to the source code, object code and documentation with respect to (i) Paynet Secure Level 1 and (ii) the payment processing components of Paynet Secure Level 3, including, without limitation, all patents, patent rights and copyrights related thereto, shall be and at all times will remain the sole and exclusive property of Certegy. Certegy shall have the right to make, use, sell, copy, distribute, import, develop Derivative Works or enhancements of, and publicly perform and display, for any purpose, any of the foregoing assets without any obligation (including any obligation to account or pay royalties) or liability to Equifax. + + As of the Closing Date, all right, title and interest in and to the source code, object code and documentation with respect to (i) Paynet Secure Level 4 and (ii) the authentication components of Paynet Secure Level 3, including, without limitation, all patents, patent rights and copyrights related thereto, shall be and at all times will remain the sole and exclusive property of Equifax. Equifax shall have the right to make, use, sell, copy, distribute, import, develop Derivative Works or enhancements of, and publicly perform and display, for any purpose, any of the foregoing assets without any obligation (including any obligation to account or pay royalties) or liability to Certegy. + + Notwithstanding the foregoing, all right, title and interest in and to eID Verifier, reports related thereto, and all intellectual property rights related thereto, shall be and remain the sole and exclusive property of Equifax, provided that Equifax shall have certain obligations to Certegy with respect to such eID Verifier Reports as specifically set forth pursuant to the Intercompany Data Purchase Agreement. Equifax shall have the sole right to make, use, sell, copy, distribute, import, develop Derivative Works or enhancements of, and publicly perform and display, for any purpose, any of the foregoing assets without any obligation (including any obligation to account or pay royalties) or liability to Certegy. + + The parties agree and acknowledge that Paynet Secure Level 2 does not exist. + + LICENSE: Certegy hereby grants to Equifax a fully paid, non-exclusive, perpetual, worldwide license to use, modify, copy, improve and create Derivative Works and enhancements from, in source code and object code format, processes or procedures developed by Equifax in support to the Paynet Secure software product that have applicability independent of or from the Paynet Secure software product. + + DERIVATIVE PRODUCTS: Any modifications, enhancements or Derivative Works lawfully made by either party to any of the foregoing assets shall be owned by the entity that modified or enhanced such asset or created such Derivative Work from such asset. + + FEES/ALLOCATIONS: None. + + ADDITIONAL TERMS: Equifax agrees that it shall have no ownership or proprietary rights in and to the trademark "Paynet Secure" or similar mark. Each owner of any of the foregoing assets shall (i) have the right to enforce, in any country, all rights embodied in such assets, and the other party agrees (at its expense) to cooperate in such enforcement action as reasonably requested by the owner thereof, and (ii) have the right to file appropriate patent, trademark, copyright or other applications, in any country, with respect to such assets. Please refer to the Transition Support Agreement for information concerning equipment that supports Paynet Secure. + + 55 + + + + + + RETAIL REACH (SOFTWARE OWNERSHIP: As of the Closing Date, all right, title APPLICATION), SOURCE and interest in and to the Retail Reach source code, CODE, OBJECT CODE AND object code and documentation, including, without DOCUMENTATION limitation, all patents, patent rights and copyrights related thereto, shall be and at all times will remain jointly owned by Equifax and Certegy. Each respective owner shall have the right to make, use, sell, copy, distribute, import, develop Derivative Works or enhancements of, and publicly perform and display, for any purpose, any of the foregoing assets without any obligation (including any obligation to account or pay royalties) or liability to Equifax. Notwithstanding the foregoing, ownership of check transaction data and DL/MICR cross-referencing data shall be governed in accordance with the terms of the Intercompany Data Purchase Agreement and the Bridge Database (as defined in the Transition Support Agreement) shall be owned solely and exclusively by Equifax, subject to the terms and conditions of the Transition Support Agreement. + + LICENSE: None. + + DERIVATIVE PRODUCTS: Any modifications, enhancements or Derivative Works lawfully made by either party to any of the foregoing assets shall be owned by the entity that modified or enhanced such asset or created such Derivative Work from such asset. + + FEES/ALLOCATIONS: None. + + ADDITIONAL TERMS: Each owner of any of the foregoing assets shall (i) have the right to enforce, in any country, all rights embodied in such assets, and the other party agrees (at its expense) to cooperate in such enforcement action as reasonably requested by the owner thereof, and (ii) have the right to file appropriate patent, trademark, copyright or other applications, in any country, with respect to such assets. Any patent rights to any invention that (i) has been incorporated into an asset and (ii) was created or developed (in any form or manner) prior to the Distribution Date, shall be jointly owned by the respective parties. Certegy agrees that it shall have no ownership, proprietary rights or rights of use in and to the trademark "Retail Reach" or a similar mark. Please refer to the Intercompany Data Purchase Agreement and the Transition Support Agreement for additional details regarding Retail Reach. + + All references to Certegy and Equifax under this Exhibit M may, where the context provides and where applicable, be construed to refer to such entity's respective Group member. + + Each party agrees to execute, or cause to be executed, such acknowledgements, grants and assignments of rights in and to the intellectual property described above, as the other party may reasonably request for the purpose of evidencing, enforcing, registering or defending the ownership of such intellectual property as contemplated above. + + 56 + + EXHIBIT N + + PROJECTED MIPS + + 2001 Former ------------ ------------ PROJECTED MIPS EQUIFAX: 433 EQUIFAX: 438 CERTEGY: 178 CERTEGY: 266 OVERHEAD MIPS EQUIFAX: 114 EQUIFAX: 68 CERTEGY: 114 CERTEGY: 68 + + 57 \ No newline at end of file diff --git a/full_contract_txt/FLOTEKINDUSTRIESINCCN_05_09_2019-EX-10.1-SUPPLY AGREEMENT.txt b/full_contract_txt/FLOTEKINDUSTRIESINCCN_05_09_2019-EX-10.1-SUPPLY AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..710e4fb7e02abab53bef81856fbf1728540b7675 --- /dev/null +++ b/full_contract_txt/FLOTEKINDUSTRIESINCCN_05_09_2019-EX-10.1-SUPPLY AGREEMENT.txt @@ -0,0 +1,175 @@ +Exhibit 10.1 + +Information identified with "[***]" has been excluded from this exhibit because it is both not material and would likely cause competitive harm to the registrant if publicly disclosed. + +SUPPLY AGREEMENT + +This Supply Agreement (the "Agreement") is entered into as of February 28, 2019 by and between Florida Chemical Company, LLC, a Delaware limited liability company ("FCC") and Flotek Chemistry, LLC, an Oklahoma limited liability company ("Flotek"). + +WHEREAS, the parties desire to set forth the terms pursuant to which FCC will supply certain products to Flotek; and + +NOW, THEREFORE, in consideration of the foregoing recitals and the mutual covenants and agreements contained herein, the parties do hereby agree as follows: + +1. Definitions. For purposes hereof: + +"Affiliate" means any party controlled by, controlling under common control with, the party to whom the reference is made. + +"Margin" means $[***] per pound of Terpene Product. + +"Maximum Quantity" means [***] pounds of Terpene Product per Year, prorated for any partial Year included in the Term. + +"Minimum Quantity" means [***] pounds of Terpene Product per Year, prorated for any partial Year included in the Term. + +"Product Price" means with respect to a pound of Terpene Product the Terpene Cost of that Terpene Product, plus the Margin. + +"Terpene Cost" means the cost per pound to FCC of the raw materials incorporated by FCC into Terpene Product, computed based on the methodology used by FCC to account for its inventory (e.g. LIFO, FIFO) (provided that such method is in accordance with Generally Accepted Accounting Principles, consistently applied), plus a deemed allocation of other manufacturing costs of FCC of $[***] per pound. + +"Terpene Product" means terpene from citrus with a minimum d-limonene content of 94%, with the specifications set forth in Exhibit A to this Agreement. + +"Year" means a calendar year. + +2. Purchase and Sale. Flotek will from time to time during the Term purchase from FCC, and FCC will sell to Flotek, Terpene Product. + +3. Term. The "Term" shall begin on the date hereof and shall expire December 31, 2023, subject to early termination pursuant to the terms of Section 19. Flotek, may, by written notice given to FCC on or before September 30, 2023, elect for the Term to be extended to December 31, 2024. + +4. Price. The price per pound payable by Flotek to FCC for Terpene Product shall be the Product Price of that Terpene Product. + +5. Forecasts; Terpene Cost Information. + +(a) Flotek shall provide non-binding forecasts of orders of Terpene Product for each calendar quarter during the Term at least ten (10) days prior to the commencement of such quarter. + +(b) Within fifteen (15) days of the end of each calendar quarter FCC shall provide to Flotek a written report providing reasonable detail regarding the cost of citrus terpene inventory. + +6. Orders; Delivery. + +1 + + + + + +(a) Flotek shall order Terpene Product by sending to FCC written purchase orders in the form attached hereto as Exhibit A. FCC shall promptly, but in no event later than three (3) days after the date of such purchase order, confirm its acceptance or rejection of such purchase order by written notice to Flotek. FCC shall be obligated to accept all such purchase orders unless the amount ordered for a Year exceeds the Maximum Quantity, or orders for a particular quarter exceed [***] pounds or exceed the Flotek forecast for that quarter by more than 25%, provided, however, that, in such event, FCC shall communicate Flotek of the time period that will be required to satisfy such order assuming FCC endeavors to satisfy such order as soon as practicable, and Flotek shall inform FCC within ten (10) days of such communication whether it will order such Terpene Product pursuant to the revised delivery terms. + +(b) Shipments of Terpene Product to Flotek must be made by FCC from FCC's facility within three (3) days of the date of the applicable purchase order. Delivery terms shall be FOB Winter Haven, Florida. Transportation shall be arranged by Flotek. All sales of Terpene Product subject to this Agreement shall be pursuant to the terms and conditions attached hereto as Exhibit B. + +(c) FCC shall invoice Flotek for Terpene Product at the time of shipment. Payment of FCC invoices shall be due within sixty (60) days of the respective invoice date. + +(d) In the event that Flotek does not order the Minimum Quantity in a given Year, FCC may ship to Flotek the remaining quantity of Terpene Product prior to the end of such Year, and invoice Flotek as described in Section 6(c). + +7. Adjustments. Representatives of Flotek and FCC shall consult with each other from time to time during the Term to discuss and resolve any issues arising from the performance of this Agreement. The parties may, by written agreement, revise the Maximum Quantity, the Margin, the Target Margin, or the Product Price. Flotek and FCC may agree in writing from time to time that quantities of Terpene Product over the Maximum Quantity shall be purchased by Flotek pursuant to this Agreement. + +8. Inspection and Audit. Flotek shall have the right at any time to (i) inspect the facility of FCC in Winter Haven, Florida (the "Facility") and any other facility of FCC involved in the production of the Terpene Product, and (ii) audit the books and records of FCC. Any such inspection or audit shall be upon reasonable notice and shall not unreasonably interfere with the operations of FCC. + +9. Capacity. FCC will throughout the Term maintain adequate manufacturing capacity and staffing to manufacture the Terpene Product pursuant to the terms hereof at the Facility. + +10. Force Majeure. Fire, flood, strikes, lock-out, epidemic, or other acts of God beyond the reasonable control of the parties, which prevent FCC from delivering or Flotek from receiving and/or using the Terpene Product, shall operate to reduce or suspend deliveries during the period required to remove such cause. Any deliveries suspended under this paragraph shall be canceled without liability, and the Target Margin shall be correspondingly reduced. An event of Force Majeure shall not include (a) financial distress nor the inability of either party to make a profit or avoid a financial loss, (b) changes in the market prices or conditions, or (c) a party's financial inability to perform its obligations hereunder. + +11. Intellectual Property. By acceptance of this Agreement and in consideration thereof, FCC warrants and agrees that, subject to other provisions of this clause, it will defend any suit that may arise against Flotek or any Affiliate thereof for alleged infringement of any patents, copyrights or similar intellectual property rights relating to the Terpene Product and that the FCC will indemnify and save harmless Flotek and any Affiliate thereof, against any loss, damages, costs and expenses including reasonable attorneys' fees, which may be incurred by Flotek or Affiliate by reason of the assertion of any such rights by other persons. Nothing in this Agreement shall obligate FCC to indemnify or save harmless Flotek or its Affiliates against third party claim alleging a violation of any patents, copyrights or similar intellectual property rights owned by Flotek or its Affiliates. + +12. Confidentiality. All proprietary, technical, experimental, manufacturing, marketing and/or other information disclosed by a party hereto to the other party hereto pursuant to this Agreement are considered by the disclosing party as being highly confidential in nature. The recipient party agrees to take all reasonable precaution to prevent disclosure of such information to third parties. The recipient party shall hold in confidence any technical or business information the recipient party may learn, observe or otherwise obtain concerning the other party hereto, or of its Affiliates, incident to the recipient party's performance under the terms of this Agreement. These restrictions upon disclosure shall cease to apply as to any specific portion of said information which is or becomes available to the public generally, not due to the fault of the recipient party. + +13. Fulfilling Production Requirement. Should FCC fail (due to causes within FCC's control) to meet Flotek's Terpene Product orders made in accordance with this Agreement, FCC shall be required (without limiting any other remedy of Flotek) to take all reasonable steps, including but not limited to working extra hours, shifts, or days to without otherwise limiting the remedies of Flotek, to fulfill FCC's obligations hereunder. All costs for such effort will be at FCC's expense. Further, FCC may use alternate shipping methods to expedite delivery to Flotek to meet schedules to which both parties agree. Additional + +2 + + + + + +shipping costs resulting from expedited deliveries or use of alternate carriers due to causes within the FCC's control will be at FCC's expense. + +14. Rework and Product Liability Indemnification. In the event of any defect in the Terpene Product delivered to Flotek hereunder, FCC will (without limiting any other remedy of Flotek), upon Flotek's request, replace any defective Terpene Product at the expense of FCC. In addition, FCC shall be responsible for claims by third parties against Flotek for loss or damage based on personal injury or destruction of property due solely to defects in Terpene Product. FCC shall be responsible for the defense, settlement or other final disposition of such claims and agrees to hold Flotek harmless from any expenses or liability arising out of such claims. Flotek may, at its option and expense, retain counsel to participate in the investigation and handling of such claims, although FCC shall have control of all such claims, and the Flotek shall not settle or otherwise dispose of any such claims without the written consent of the FCC. + +15. Personal Injury and Property Damage Liability Indemnification. FCC assumes sole responsibility for taking all necessary health and safety precautions, including compliance with all applicable local, state, provincial and federal regulations, in producing Terpene Product under this Agreement. These precautions shall include, but not be limited to, such things as proper control of ventilation, the wearing of adequate protective clothing, and installation and proper utilization of appropriate environmental control equipment. FCC will supply Flotek with its Materials Safety Data Sheets with respect to the Terpene Product. FCC will defend, indemnify and hold harmless Flotek, its Affiliates, and their respective officers and employees from all claims, actions, losses, damages and expenses resulting from any injury to persons, damage to property or action by any regulatory agency, arising out of or in any way associated with the operation of the Facility or any other facility of FCC, including, without limitation, injuries to FCC's employees involved in these operations REGARDLESS OF THE NEGLIGENCE OF ANY OF THE INDEMNIFIED PARTIES. FCC agrees to provide $5,000,000 of commercial liability insurance in support of this indemnity which names Flotek as additional insured, with waiver of subrogation. + +16. Environmental Indemnity. Each party hereto agrees to comply with all applicable federal, state provincial and or local environmental law, ordinances, codes, rules, regulations and permits and to handle all raw materials, off specification product, excess or scrap materials, waste, and finished products in an environmentally safe manner so as to prevent any contamination of the structure, soil or ground water in, on, or adjacent to its premises. Each party hereto agrees to indemnify the other party hereto, its Affiliates, subsidiaries, successors, assigns and their respective directors, officers, shareholders and employees and defend and save and hold each of them harmless from all liabilities, losses, claims, demands, assessments, fines, costs or expenses (including, without limitation, reasonable attorneys' and consultants' fees and expenses) of every kind, nature or description arising under common law or any applicable environmental law resulting from, arising out of or relating to any conditions or activities at or involving the premises of the indemnifying party REGARDLESS OF THE NEGLIGENCE OF ANY OF THE INDEMNIFIED PARTIES. + +17. Other Sales and Purchases. FCC will be permitted during the Term to sell terpene to other parties who will utilize or resale such terpene for oilfield solvent applications. Notwithstanding any of the terms of this Agreement, Flotek shall not be restricted from purchasing any terpene-based product, including but not limited to, Terpene Product, from sources other than FCC. + +18. Termination. + +(a) Either Flotek or FCC may terminate the Term immediately, upon a written notice to the other such party, when one of the following events occurs: + +(i) When the other Party materially violates one or more clause set forth herein or violates one or more purchase order relating to this Agreement and does not remedy such violation within 30 days from receiving the written notice from the other party of such fact ("Cure Period"). For the avoidance of doubt, the Parties understand that the postponing of the delivery of the Terpene Product pursuant to Section 11 of this Agreement, shall not be a cause for termination of the Term. + +(ii) When one of the Parties is the subject of a request for voluntary and involuntary bankruptcy, recuperation or renewal, based on bankruptcy laws, or incurs in any equivalent situation. + +The rights and obligations of the parties hereto pursuant to Sections 12, 13, 15, 16, 18, and 19 shall survive the Term. + +19. Warranties. FCC warrants to Flotek that: + +(a) all of the Terpene Product supplied by FCC to Flotek shall: + +(i) conform to the specifications set forth in Section 1; + +3 + + + + + +(ii) comply with all relevant laws and regulations including, without limitation, laws and regulations of each of the jurisdictions in which the Terpene Product are either manufactured or to be sold or used concerning purity, sanitation, safety, security, and packaging and labeling of food and beverage; + +(iii) be in good condition at the time of delivery in all respects; and + +(iv) be free from any defect in design, workmanship, materials and packaging; and + +(b) it shall convey to Flotek good title to the Terpene Product free of any encumbrance, lien or security interest; + +20. Independent Contractor. FCC is an independent contractor and it is the express understanding of the parties hereto that nothing herein contained shall create any relationship of master and servant, partner, principal and agent between the parties hereto, or their respective employees, servants or agents. + +21. Remedies. If any legal action or other proceeding is brought for the enforcement of this Agreement, or because of an alleged dispute, breach, default or misrepresentation in connection with any of the provisions of this Agreement, the successful or prevailing party or parties shall be entitled to recover reasonable attorneys' fees and other costs incurred in that action or proceeding in addition to any other relief to which it or he may be entitled at law or equity. + +22. Notices. All notices, consents, demands or other communications required or permitted to be given pursuant to this Agreement shall be deemed sufficiently given when delivered personally during business days to the appropriate location described below or three (3) business days after the posting thereof by United States first class, registered or certified mail, return receipt requested, with postage fee prepaid and addressed or if sent by email to the email address indicated below, four hours after transmitted: + +If to FCC: Florida Chemical Company, LLC c/o Archer Daniels Midland Company 1261 Pacific Avenue Erlanger, KY 41018 Attn: President, ADM Nutrition; Chief Financial Officer, WFSI; Chief Counsel, ADM Nutrition Email: Vince.Macciocchi@adm.com, Jeff.W.Miller@adm.com and Louis.Proietti@adm.com + +If to Flotek: Flotek Chemistry, LLC: Attn: President 10603 W. Sam Houston Parkway N., Suite 300 Houston, Texas 77064 Tel: 713-849-9911 Fax: 281-605-5554 Email: jchisholm@flotekind.com + +23. Successors. FCC may not assign or delegate its rights or obligations pursuant to this Agreement. Subject to the foregoing, this Agreement shall be binding upon each of the parties upon their execution, and inure to the benefit of the parties hereto and their successors and assigns. Any assignee whatsoever will be bound by the obligations of the assigning party under this Agreement, and any assignment shall not diminish the liability or obligation of the assignor under the terms of this Agreement unless otherwise agreed. + +24. Severability. In the event that any one or more of the provisions contained in this Agreement or in any other instrument referred to herein, shall, for any reason, be held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision of this Agreement or any such other instrument. + +25. Paragraph Headings. The paragraph headings used herein are descriptive only and shall have no legal force or effect whatsoever. + +26. Gender. Whenever the context so requires, the masculine shall include the feminine and neuter, and the singular shall include the plural and conversely. + +27. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the state of Delaware. + +4 + + + + + +28. No Presumption Against Any Party. Neither this Agreement nor any uncertainty or ambiguity in this Agreement shall be construed or resolved against any party, whether under any rule of construction or otherwise. On the contrary, this Agreement has been reviewed by each of the parties and their counsel (or the party has elected not to consult with counsel of its own choosing) and shall be construed and interpreted according to the ordinary meaning of the words used so as to fairly accomplish the purposes and intentions of all parties. + +29. Multiple Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original. + +30. Waiver. Any waiver by either party to be enforceable must be in writing and no waiver by either party shall constitute a continuing waiver. + +31. Cross References. References in this Agreement to Articles, Sections, Exhibits, or Schedules shall be deemed to be references to Articles, Sections, Exhibits, and Schedules of this Agreement unless the context specifically and expressly requires otherwise. + +32. Entire Agreement. This Agreement and the other agreements referred to herein set forth the entire understanding of the parties hereto relating to the subject matter hereof and thereof and supersede all prior agreements and understandings among or between any of the parties relating to the subject matter hereof and thereof. + +[Signature page follows] + +5 + + + + + +IN WITNESS WHEREOF, the parties have executed this Agreement as of the date and year first set forth above. + +FLORIDA CHEMICAL COMPANY, LLC: + +By: /s/ Elizabeth T. Wilkinson Name: Elizabeth T. Wilkinson Title: Chief Financial Officer + +FLOTEK CHEMISTRY, LLC: + +By: /s/ Elizabeth T. Wilkinson Name: Elizabeth T. Wilkinson Title: Chief Financial Officer + +SIGNATURE PAGE TO SUPPLY AGREEMENT + +6 \ No newline at end of file diff --git a/full_contract_txt/FOUNDATIONMEDICINE,INC_02_02_2015-EX-10.2-Collaboration Agreement.txt b/full_contract_txt/FOUNDATIONMEDICINE,INC_02_02_2015-EX-10.2-Collaboration Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..8a874bd96ed697b8c063464f82f0dde47525be8b --- /dev/null +++ b/full_contract_txt/FOUNDATIONMEDICINE,INC_02_02_2015-EX-10.2-Collaboration Agreement.txt @@ -0,0 +1,1961 @@ +Exhibit 10.2 + +EXECUTION COPY + +***Text Omitted and Filed Separately with the Securities and Exchange Commission Confidential Treatment Requested Under 17 C.F.R. Sections 200.80(b)(4) and 240.24b-2 + +Collaboration Agreement + +This Agreement is entered into with effect as of the Effective Date (as defined below) + +by and between + +F. Hoffmann-La Roche Ltd + +with an office and place of business at Grenzacherstrasse 124, 4070 Basel, Switzerland ("Roche Basel") + +and + +Hoffmann-La Roche Inc. + +with an office and place of business at 150 Clove Road, Suite 8, Little Falls, New Jersey 07424, U.S.A. ("Roche US"; Roche Basel and Roche US together referred to as "Roche") + +on the one hand + +and + +Foundation Medicine, Inc. + +with an office and place of business at 150 Second Street, Cambridge, Massachusetts 02141 ("FMI") + +on the other hand. + + + + + +Table of Contents 1. Definitions 7 1.1 Affiliate 7 1.2 Agreement 7 1.3 Agreement Term 7 1.4 [...***...] ctDNA [...***...] 7 1.5 Applicable Law 7 1.6 Approved Assay 7 1.7 Background IP 7 1.8 Business Day 8 1.9 Calendar Half 8 1.10 Calendar Quarter 8 1.11 Calendar Year 8 1.12 CDx 8 1.13 CDx Development Program 8 1.14 CLIA 8 1.15 Clinical Study 9 1.16 Commercially Reasonable Efforts 9 1.17 Confidential Information 9 1.18 Control 9 1.19 Cover 10 1.20 ctDNA 10 1.21 ctDNA Assay 10 1.22 ctDNA Platform 10 1.23 ctDNA Platform Development Program 10 1.24 ctDNA Working Group 10 1.25 Data Security Breach 10 1.26 Effective Date 10 1.27 Excepted Activities 11 1.28 Excluded Patent Rights 11 1.29 FDA 11 1.30 FDCA 11 1.31 FMI Background IP Patent Rights 11 1.32 FMI Decisions 11 1.33 FMI Development Costs 11 1.34 FMI Know-How 11 1.35 FMI Foreground Patent Rights 12 1.36 FTE 12 1.37 FTE Rate 12 1.38 Handle 12 1.39 HSR 12 1.40 Immunotherapy Testing Platform Development Program 12 1.41 Immuno-Platform Working Group 12 1.42 Initiation 12 1.43 Insolvency Event 12 1.44 Invention 13 1.45 IUO 13 1.46 JMC 13 1.47 JOC 13 1.48 Joint Know-How 13 1.49 Joint Patent Rights 13 ***Confidential Treatment Requested*** + +- 2 - + + + + + +1.50 JOT 13 1.51 JRDC 13 1.52 Know-How 13 1.53 Molecular Information Platform Program 13 1.54 Molecular Information Platform Working Group 14 1.55 Party 14 1.56 Patent Rights 14 1.57 Performance Specifications 14 1.58 Personal Data 14 1.59 Phase I Study 14 1.60 Phase II Study 14 1.61 Phase III Study 14 1.62 PMA 15 1.63 Quality Standards 15 1.64 R&D Plan 15 1.65 Regulatory Approval 15 1.66 Regulatory Authority 15 1.67 Roche Background IP Patent Rights 15 1.68 Roche Group 15 1.69 Roche Know-How 15 1.70 Roche Foreground Patent Rights 15 1.71 ROW Territory 15 1.72 RUO 15 1.73 Study Data 16 1.74 Sublicensee 16 1.75 Territory 16 1.76 Third Party 16 1.77 US 16 1.78 US$ 16 1.79 Work Stream 16 1.80 Additional Definitions 16 2. Grant of License 18 2.1 Licenses 18 2.2 Sublicense 20 2.3 Right to Subcontract 20 3. Research and Development Collaboration 20 3.1 Molecular Information Platform Program 20 3.2 Immunotherapy Testing Platform Development Program 23 3.3 ctDNA Platform Development Program 25 3.4 CDx Development Program 27 3.5 Samples, Handling and Disposal 29 3.6 Records; Reports; Audits 30 4. Diligence 31 5. Most Favored Customer 31 6. Governance 31 6.1 Joint Management Committee 31 6.2 JRDC 33 6.3 JOC 34 6.4 Alliance Director 34 6.5 Limitations of Authority 34 6.6 Expenses 35 6.7 Lifetime 35 - 3 - + + + + + +7. Regulatory 35 8. Payment 35 8.1 FTE Funding 35 8.2 Molecular Information Platform Program Fees 35 8.3 Immunotherapy Testing Platform Development Budget and Fees 36 8.4 ctDNA Platform Financial Terms 37 8.5 CDx Development Financial Terms 38 8.6 General Terms 38 8.7 Disclosure of Payments 39 9. Accounting and reporting 39 9.1 Timing of Payments 39 9.2 Late Payment 39 9.3 Method of Payment 39 10. Taxes 39 11. Auditing 40 11.1 Right to Audit 40 11.2 Audit Reports 41 11.3 Over or Underpayment 41 11.4 Duration of Audit Rights 41 12. Intellectual Property 41 12.1 Ownership of Inventions, data and results 41 12.2 German Statute on Employee's Inventions 43 12.3 Prosecution and Maintenance of Patent Rights Claiming FMI Inventions 43 12.4 Prosecution and Maintenance of Roche Foreground Patent Rights and Joint Patent Rights 44 12.5 Joint Patent Team 44 12.6 CREATE Act 44 12.7 Infringement 44 12.8 Defense 46 12.9 Common Interest Disclosures 46 13. Representations and Warranties 47 13.1 Mutual Representations and Warranties 47 13.2 Activities 48 13.3 Safety Data 48 13.4 Third Party Patent Rights 48 13.5 Inventors 48 13.6 Grants 48 13.7 Ownership and Validity of Know-How 48 13.8 Data Protection (Privacy) and Security 48 13.9 No Other Representations 50 14. Indemnification 50 14.1 Indemnification by Roche 50 14.2 Indemnification by FMI 51 14.3 Procedure 51 15. Liability 51 16. Obligation Not to Disclose Confidential Information 51 16.1 Non-Use and Non-Disclosure 51 16.2 Permitted Disclosure &sbsp;52 16.3 Press Releases 52 16.4 Publications 52 16.5 Commercial Considerations 53 - 4 - + + + + + +17. Term and Termination 53 17.1 Commencement and Term 53 17.2 Termination 53 17.2.1 Termination for Breach 53 17.2.2 Insolvency 53 17.2.3 Termination by Roche without Cause 54 17.2.4 Termination by Roche for Frustration of Purpose 54 17.3 Consequences of Termination 54 17.3.1 Termination in General 54 17.3.2 Termination by FMI for Breach by Roche or Roche's Insolvency; Termination by Roche Without Cause or for Frustration of Purpose 54 17.3.3 Termination by Roche for Breach by FMI or FMI Insolvency 56 17.3.4 Direct License 57 17.4 Other Obligations 57 17.5 Survival 57 18. Bankruptcy 57 19. Miscellaneous 58 19.1 Governing Law 58 19.2 Disputes 58 19.3 Arbitration 58 19.4 Assignment 59 19.5 Debarment and Exclusion 59 19.6 Independent Contractor 60 19.7 Unenforceable Provisions and Severability 60 19.8 Waiver 60 19.9 Appendices 60 19.10 Entire Understanding 61 19.11 Amendments 61 19.12 Invoices 61 19.13 Notice 61 - 5 - + + + + + +Collaboration Agreement + +WHEREAS, FMI has or is developing platforms for use in genomic testing, including development of a molecular information platform, an immunotherapy testing platform, a circulating tumor DNA platform, and a companion diagnostics platform; and + +WHEREAS, Roche has expertise in the research, development, manufacture and commercialization of pharmaceutical and diagnostic products, including development of an immunotherapy platform; and + +WHEREAS, Roche and FMI want to collaborate on the development of platforms for use in molecular information, immunotherapy, circulating tumor DNA, companion diagnostics, and in vitro diagnostic tests and kits; and + +WHEREAS, Roche Holdings, Inc., an Affiliate of Roche, and FMI are concurrently herewith entering into a Transaction Agreement dated as of the date hereof (as it may be amended from time to time, the "Transaction Agreement") which provides, among other things, for Roche to acquire a majority ownership of FMI upon the terms and subject to the conditions set forth in the Transaction Agreement; and + +WHEREAS, in connection therewith, and as an inducement to Roche's and FMI's willingness to enter into the Transaction Agreement and to consummate the transactions contemplated thereby, FMI and Roche agree that Roche will work with FMI in the United States to educate relevant persons on next generation sequencing and/or comprehensive genomic profiling technology ("US Education Collaboration Agreement"), Roche and FMI will collaborate on the commercialization of certain FMI products outside of the United States ("Ex-US Commercialization Agreement"), and Roche and FMI may collaborate on development and commercialization of decentralized in vitro diagnostic ("IVD") versions of FMI tests generated by FMI ("IVD Collaboration"), the above mentioned agreements, including the Transaction Agreement, being referred to collectively as the "Related Agreements"; and + +WHEREAS, FMI and Roche intend that assays and other products generated under this Agreement will be commercialized in accordance with the Ex-US Commercialization Agreement and that the governance structure under this Agreement will apply to the US Education Collaboration Agreement and the Ex-US Commercialization Agreement. - 6 - + + + + + +NOW, THEREFORE, in consideration of the mutual covenants and promises contained in this Agreement and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto, intending to be legally bound, do hereby agree as follows: + + 1. Definitions + +As used in this Agreement, the following terms, whether used in the singular or plural, shall have the following meanings: + + 1.1 Affiliate + +The term "Affiliate" shall mean any individual, corporation, association or other business entity that directly or indirectly controls, is controlled by, or is under common control with the Party in question. As used in this definition of "Affiliate," the term "control" shall mean the direct or indirect ownership of more than fifty percent (>50%) of the stock having the right to vote for directors thereof or the ability to otherwise control the management of the corporation or other business entity whether through the ownership of voting securities, by contract, resolution, regulation or otherwise. Anything to the contrary in this paragraph notwithstanding, Chugai Pharmaceutical Co., Ltd, a Japanese corporation ("Chugai"), shall not be deemed an Affiliate of Roche unless Roche provides written notice to FMI of its desire to include Chugai as an Affiliate of Roche. Moreover, FMI and its Affiliates existing as of the Effective Date shall not be deemed Affiliates of Roche and its Affiliates existing as of the Effective Date, and Roche and its Affiliates existing as of the Effective Date shall not be deemed Affiliates of FMI and its Affiliates existing as of the Effective Date. Affiliates coming into existence after the Effective Date shall be classified by the Parties as either Roche Affiliates or FMI Affiliates for the purposes of this Agreement. + + 1.2 Agreement + +The term "Agreement" shall mean this document including any and all appendices and amendments to it as may be added and/or amended from time to time in accordance with the provisions of this Agreement. + + 1.3 Agreement Term + +The term "Agreement Term" shall mean the period of time commencing on the Effective Date and, unless this Agreement is terminated sooner as provided in Article 17, expiring on the date when all work has been completed or terminated under all R&D Plans. + + 1.4 […***…] ctDNA […***…] + +The term "[…***…] ctDNA […***…]" shall mean an analytical validated clinical ctDNA Assay […***…]. + + 1.5 Applicable Law + +The term "Applicable Law" shall mean any law, statute, ordinance, code, rule or regulation that has been enacted by a government authority (including without limitation, any Regulatory Authority) and is in force as of the Effective Date or comes into force during the Agreement Term, in each case to the extent that the same are applicable to the performance by the Parties of their respective obligations under this Agreement. + + 1.6 Approved Assay + +The term "Approved Assay" means any assay or test intended for use in the diagnosis or evaluation of a disease or condition, excluding any IUO, and with respect to which any necessary Regulatory Approval is received in the relevant country, including PMA approval in the US, if applicable. + + 1.7 Background IP + +The term "Background IP" shall mean all intellectual property rights, including Patent Rights and Know-How, Controlled by a Party as of the Effective Date and all intellectual property rights Controlled by a Party after the Effective Date but arising from activities other than the activities conducted under this Agreement. Roche Background IP specifically excludes the Excluded Patent Rights and no licenses are granted to FMI under such Excluded Patent Rights. ***Confidential Treatment Requested*** + +- 7 - + + + + + +1.8 Business Day + +The term "Business Day" shall mean 9.00am to 5.00pm local time on a day other than a Saturday, Sunday or bank or other public or federal holiday in Switzerland, New Jersey or Massachusetts. + + 1.9 Calendar Half + +The term "Calendar Half" shall mean each period of six (6) consecutive calendar months, ending June 30 and December 31. + + 1.10 Calendar Quarter + +The term "Calendar Quarter" shall mean each period of three (3) consecutive calendar months, ending March 31, June 30, September 30 and December 31. + + 1.11 Calendar Year + +The term "Calendar Year" shall mean the period of time beginning on January 1 and ending December 31, except for the first Calendar Year which shall begin on the Effective Date and end on December 31. + + 1.12 CDx + +The term "CDx" shall mean any Products or Services that require Regulatory Approval, including by any medical device Regulatory Authority, under the device authorities of the Federal Food, Drug, and Cosmetic Act (or equivalent medical device or in vitro diagnostic medical device regime in other countries) for use in connection with a decision to treat, or the specifics of the actual treatment, of person, with a specific product, as more fully described below: + + (i) identifying a person having a specific disease or condition, or a molecular genotype or phenotype that predisposes a person to such disease or condition, to support a decision to treat such person with such specific product, whether for prophylactic or therapeutic purposes; + + (ii) defining the prognosis or monitoring the progress of a disease or condition in a person to support a decision to treat, or tocontinue to treat, such person with such specific product, whether for prophylactic or therapeutic purposes; + + (iii) supporting the selection of a particular therapeutic or prophylactic regimen, wherein at least one (1) potential therapeutic orprophylactic regimen involves the use of such specific product; and/or + + (iv) confirming such specific product's biological activity and/or optimizing dosing or the scheduled administration of such specificproduct. + + 1.13 CDx Development Program + +The term "CDx Development Program" shall mean the program for development by FMI of CDx Assays for select Roche products. + + 1.14 CLIA + +The term "CLIA" shall mean Clinical Laboratory Improvement Amendments as set forth by the Centers for Medicare & Medicaid Services which regulates all laboratory testing (except research) performed on humans in the U.S. and is certified by the Division of Laboratory Services, within the Survey and Certification Group, under the Center for Clinical Standards and Quality. - 8 - + + + + + +1.15 Clinical Study + +The term "Clinical Study" shall mean a Phase I Study, Phase II Study, Phase III Study, as applicable. + + 1.16 Commercially Reasonable Efforts + +The term "Commercially Reasonable Efforts" shall mean, with respect to the performance of an obligation under this Agreement, such quality and level of effort as is required to carry out such obligation in a sustained manner, consistent with the efforts Roche or FMI, as applicable, devotes to a similar obligation in connection with an internally developed product or service that is at the same stage of development or commercialization, as applicable, in a similar market, with similar market potential, at a similar stage of product life, taking into account the existence of other competitive products or services in the market place or under development, the proprietary position of the product or service, the regulatory structure involved, the anticipated profitability of the product or service and other relevant factors. It is understood that such quality and level if effort may change from time to time based upon changing scientific, business and marketing and return on investment considerations. + + 1.17 Confidential Information + +The term "Confidential Information" shall mean any and all information, data or know-how (including Know-How), whether technical or non- technical, oral or written, that is disclosed by one Party or its Affiliates ("Disclosing Party") to the other Party or its Affiliates ("Receiving Party"). Confidential Information shall not include any information, data or know-how that: + + (i) was generally available to the public at the time of disclosure, or information that becomes available to the public after disclosureby the Disclosing Party other than through fault (whether by action or inaction) of the Receiving Party or its Affiliates, + + (ii) can be evidenced by written records to have been already known to the Receiving Party or its Affiliates prior to its receipt fromthe Disclosing Party, + + (iii) is obtained by the Receiving Party at any time lawfully from a Third Party under circumstances permitting its use or disclosure, + + (iv) is developed independently by the Receiving Party or its Affiliates as evidenced by written records other than throughknowledge of Confidential Information, or + + (v) is approved in writing by the Disclosing Party for release by the Receiving Party. + +The terms of this Agreement shall be considered Confidential Information of the Parties. + + 1.18 Control + +The term "Control" shall mean (as an adjective or as a verb including conjugations and variations such as "Controls" "Controlled" or "Controlling") (a) with respect to Patent Rights and/or Know-How, the possession by a Party of the ability to grant a license or sublicense of such Patent Rights and/or Know-How as provided herein without violating the terms of any agreement or arrangement between such Party and any other party, where such ability derives from rights other than an assignment or license granted herein and (b) with respect to proprietary materials, the possession by a Party of the ability to supply such proprietary materials to the other Party as provided herein without violating the terms of any agreement or arrangement between such Party and any other party. - 9 - + + + + + +1.19 Cover + +The term "Cover" shall mean (as an adjective or as a verb including conjugations and variations such as "Covered," "Coverage" or "Covering") that the developing, making, using, offering for sale, promoting, selling, exporting or importing of a given product would infringe a valid claim under the Patent Rights. As used in the previous sentence, "valid claim" means, with respect to a particular country a claim in an issued and unexpired patent that has not lapsed or been disclaimed, revoked, held unenforceable, unpatentable or invalid by a decision of a court or other governmental agency of competent jurisdiction, unappealable or unappealed within the time allowed fo appeal and that has not been admitted to be invalid or unenforceable through re-examination, re-issue, disclaimer or otherwise, or lost in an interference proceeding. + + 1.20 ctDNA + +The term "ctDNA" shall mean circulating tumor DNA. + + 1.21 ctDNA Assay + +The term "ctDNA Assay" shall mean an assay developed on or utilizing FMI's ctDNA Platform (including instruments and software) for the detection of genomic alteration in ctDNA, including an RUO, IUO and Approved Assay. + + 1.22 ctDNA Platform + +The term "ctDNA Platform" shall mean Products or Services for testing of specimens to identify genomic alterations in ctDNA as a blood-based liquid biopsy, including FMI instruments, analytical methods, algorithms, procedures, techniques, software or platforms, intended for use in genomic analysis, and related technologies and any improvements to the foregoing, in each case Controlled by FMI as of the Effective Date or during the Agreement Term. + + 1.23 ctDNA Platform Development Program + +The term "ctDNA Platform Development Program" shall mean the program for development of ctDNA analysis platform by FMI for effective genomic profiling from liquid biopsy. + + 1.24 ctDNA Working Group + +The term "ctDNA Working Group" shall mean the group of persons from both Parties who will handle the day-to-day activities associated with the ctDNA Platform Development Program a set forth herein. + + 1.25 Data Security Breach + +The term "Data Security Breach" means (a) the disclosure or misuse (by any means) of Personal Data; (b) the inadvertent, unauthorized and/or unlawful processing, access, disclosure, alteration, corruption, transfer, sale or rental, destruction or use of Personal Data; or (c) any other act or omission that compromises the security, confidentiality, and/or integrity of Personal Data. + + 1.26 Effective Date + +The term "Effective Date" shall mean the latest of (a) the date of the last signature of this Agreement, or (b) if a HSR filing is made, the second Business Day immediately following the earlier of: (i) the date upon which the waiting period under HSR expires or terminates early or (ii) the date upon which all requests to the Parties by the Federal Trade Commission or the Justice Department, as the case may be, with regard to the transaction contemplated by this Agreement - 10 - + + + + + +have been satisfactorily met and no objection on the part of the Federal Trade Commission or the Justice Department remains, or (c) the occurrence of the Acceptance Time (as defined in the Transaction Agreement). + + 1.27 Excepted Activities + +The term "Excepted Activities" shall mean […***…]. + + 1.28 Excluded Patent Rights + +The term "Excluded Patent Rights" shall mean those Patent Rights listed in Appendix 1.28. + + 1.29 FDA + +The term "FDA" shall mean the Food and Drug Administration of the United States of America. + + 1.30 FDCA + +The term "FDCA" shall mean the Food, Drug and Cosmetics Act. + + 1.31 FMI Background IP Patent Rights + +The term "FMI Background IP Patent Rights" means Patent Rights that Cover Background IP that is Controlled by FMI. + + 1.32 FMI Decisions + +The term "FMI Decisions" shall mean decisions with respect to any of the following issues that come before the JMC: + + (i) […***…]. + + (ii) […***…]. + + (iii) […***…]. + + (iv) […***…]. + + 1.33 FMI Development Costs + +The term "FMI Development Costs" means all costs reasonably incurred or committed to by FMI to perform its obligations and activities hereunder, including without limitation, (i) personnel costs equal to the number of FTE's used to perform such obligations and activities multiplied by the FTE Rate, (ii) out-of-pocket costs for consultants, materials and services and (iii) facilities costs reasonably allocated to performance of such obligations and activities, including acquisition, maintenance and operation costs for such facilities. + + 1.34 FMI Know-How + +The term "FMI Know-How" shall mean the Know-How that FMI Controls at the Effective Date and during the Agreement Term. ***Confidential Treatment Requested*** + +- 11 - + + + + + +1.35 FMI Foreground Patent Rights + +The term "FMI Foreground Patent Rights" shall mean the Patent Rights that FMI Controls and that Cover Inventions conceived of and reduced to practice after the Effective Date in the performance of the activities under this Agreement, excluding any Joint Patent Rights and any FMI Background IP Patent Rights. + + 1.36 FTE + +The term "FTE" shall mean a full-time equivalent person-year, based upon a total of no less than one thousand eight hundred (1,800) working hours per year, undertaken in connection with the conduct of research in a Work Stream. In no circumstance can the work of any given person exceed one (1) FTE. + + 1.37 FTE Rate + +The term "FTE Rate" shall mean the amount of […***…], on a fully burdened cost basis, which amount shall be subject to increase following the […***…] anniversary of the Effective Date by an amount equal to the increase in the Consumer Price Index as published by the U.S. Department of Labor, Bureau of Labor Statistics (the "CPI") between the Effective Date and such date for a new FTE Rate not to exceed […***…] per FTE, and which such new FTE Rate shall be subject to subsequent increases upon the date of each renewal or extension period comprising the Agreement Term by an amount equal to the increase in the CPI as of such date. + + 1.38 Handle + +The term "Handle" shall mean all activities associated with prosecution and maintenance of a particular patent and patent application(s) derived from such patent, including preparing, filing, prosecuting and maintaining (including interferences, reissue, re-examination, pre- and post-grant proceedings, inter-parties reviews, derivation proceedings, applications for patent term adjustment and extensions, supplementary protection certificates and oppositions and other similar proceedings). + + 1.39 HSR + +The term "HSR" shall mean the Hart-Scott-Rodino Antitrust Improvements Act. + + 1.40 Immunotherapy Testing Platform Development Program + +The term "Immunotherapy Testing Platform Development Program" shall mean the program for development of an immunotherapy testing platform. + + 1.41 Immuno-Platform Working Group + +The term "Immuno-Platform Working Group" shall mean the group of persons from both Parties who will handle the day-to-day activities associated with the Immunotherapy Testing Platform Development Program. + + 1.42 Initiation + +The term "Initiation&1148; shall mean the date that a human is first dosed with the drug in a Clinical Study approved by the respective Regulatory Authority. + + 1.43 Insolvency Event + +The term "Insolvency Event" shall mean circumstances under which a Party (i) has a receiver or similar officer appointed over all or a material part of its assets or undertaking; (ii) passes a resolution for winding-up (other than a winding-up for the purpose of, or in connection with, any solvent amalgamation or reconstruction) or a court makes an order to that effect or a court makes an order for administration (or any equivalent order in any jurisdiction); (iii) enters into ***Confidential Treatment Requested*** + +- 12 - + + + + + +any composition or arrangement with its creditors (other than relating to a solvent restructuring); (iv) ceases to carry on business; (v) is unable to pay its debts as they become due in the ordinary course of business. + + 1.44 Invention + +The term "Invention" shall mean an invention that is made, i.e. conceived and reduced to practice, in performance of activities under this Agreement. Under this definition, an Invention may be made by solely by individuals having an obligation to assign rights in such invention to FMI (an "FMI Invention"), solely by individuals having an obligation to assign rights in such invention to Roche (a "Roche Invention"), or jointly by individuals having an obligation to assign rights in such invention to FMI and individuals having an obligation to assign rights in such invention to Roche (a "Joint Invention"). + + 1.45 IUO + +The term "IUO" shall mean an assay for investigational use only that meets certain clinical and manufacturing standards and which is used in clinical studies to gather data for submission to a Regulatory Agency in support of an Approved Assay. + + 1.46 JMC + +The term "JMC" shall mean the joint management committee described in Article 6. + + 1.47 JOC + +The term "JOC" shall mean the joint operating committee as mentioned in Section 6.3 and described in the Ex-US Commercialization Agreement. + + 1.48 Joint Know-How + +The term "Joint Know-How" shall mean Know-How that is made jointly by the Parties or their Affiliates or their Sublicensees in performance of activities carried out pursuant to this Agreement. + + 1.49 Joint Patent Rights + +The term "Joint Patent Rights" shall mean all Patent Rights Covering a Joint Invention. + + 1.50 JOT + +The term "JOT" shall mean a joint operating team described in Section 6.1.7. + + 1.51 JRDC + +The term "JRDC" shall mean the joint research and development committee described in Section 6.2. + + 1.52 Know-How + +The term "Know-How" shall mean data, knowledge, algorithms, business rules and information, including manufacturing data, toxicological data, pharmacological data, preclinical data, formulations, specifications, quality control testing data, which are necessary or useful for the discovery, manufacture, development or commercialization of Products and Services. + + 1.53 Molecular Information Platform Program + +The term "Molecular Information Platform Program" shall mean the program designed to generate insights for certain of Roche's clinical development portfolio from FMI's molecular information platform, comprised of tumor sample genomic analysis, database access, and dedicated FMI clinical and genomic expertise. + +- 13 - + + + + + +1.54 Molecular Information Platform Working Group + +The term "Molecular Information Platform Working Group" shall mean the group of persons from both Parties who will handle the day-to-day activities associated with the Molecular Information Platform Program. + + 1.55 Party + +The term "Party" shall mean FMI or Roche, as the case may be, and "Parties" shall mean FMI and Roche collectively. + + 1.56 Patent Rights + +The term "Patent Rights" shall mean all rights under any patent or patent application, in any country of the Territory, including any patents issuing on such patent application, and further including any substitution, extension or supplementary protection certificate, reissue, reexamination, renewal, division, continuation or continuation-in-part of any of the foregoing. + + 1.57 Performance Specifications + +The term "Performance Specifications" shall mean a set of minimum standards and specifications related to FMI's supply and delivery of Products and Services under this Agreement as set forth in the R&D Plans for each Work Stream or Task Orders, including standards with respect to classes of alterations detected and sequencing sensitivity and specificity (based on tissue requirements); provided, however, the Performance Specifications for the Molecular Information Platform Program are attached hereto as Exhibit 1.57. + + 1.58 Personal Data + +The term "Personal Data" shall mean any information that can be used to identify, locate or contact an individual (a "Data Subject"), including but limited to, (a) first name or initial and last name; (b) home or other physical address; (c) telephone number; (d) email address or online identifier associated with the individual; (e) social security number or other similar identifier; (f) employment financial or health information; or (g) any other information relating to an individual that is combined with any of the above. + + 1.59 Phase I Study + +The term "Phase I Study" shall mean a human clinical trial in any country that would satisfy the requirements of 21 C.F.R. § 312.21(a) (FDCA), as amended from time to time, and the foreign equivalent thereof. + + 1.60 Phase II Study + +The term "Phase II Study" shall mean a human clinical trial, for which the primary endpoints include a determination of dose ranges and/or a preliminary determination of efficacy in patients being studied as described in 21 C.F.R. § 312.21(b) (FDCA), as amended from time to time, and the foreign equivalent thereof. + + 1.61 Phase III Study + +The term "Phase III Study" shall mean a human clinical trial that is prospectively designed to demonstrate statistically whether a product is safe and effective for use in humans in a manner sufficient to obtain regulatory approval to market such product in patients having the disease or condition being studied as described in 21 C.F.R. § 312.21(c) (FDCA), as amended from time to time, and the foreign equivalent thereof. + +- 14 - + + + + + +1.62 PMA + +The term "PMA" shall mean a premarket approval application as defined under section 515 of the FDCA. + + 1.63 Quality Standards + +The term "Quality Standards" shall mean CLIA or QSR requirements, each as applicable, and other Applicable Laws. If requested by Roche, the JRDC will establish which such quality standards specifically apply to Products and Services within a given Work Stream. + + 1.64 R&D Plan + +The term "R&D Plan" shall mean a plan of research and development for each Work Stream other than the Molecular Information Platform Program. The initial R&D Plans are attached as Appendix 1.64 and outline the work expected to be performed by FMI for the relevant Work Stream. Such plans may be updated from time to time as provided in this Agreement. + + 1.65 Regulatory Approval + +The term "Regulatory Approval" shall mean any approvals, licenses, registrations, authorizations, or certifications by Regulatory Authority or any CE markings, necessary for the manufacture, sale or putting into service of a product in a regulatory jurisdiction in the Territory. + + 1.66 Regulatory Authority + +The term "Regulatory Authority" shall mean any national, supranational (e.g., the European Commission, the Council of the European Union, the European Medicines Agency), regional, state or local regulatory agency, department, bureau, commission, council or other governmental entity including the FDA, in each country involved in the granting of Regulatory Approval for a product or service. + + 1.67 Roche Background IP Patent Rights + +The term "Roche Background IP Patent Rights" means Patent Rights that Cover Background IP that is Controlled by Roche. + + 1.68 Roche Group + +The term "Roche Group" shall mean collectively Roche, its Affiliates and its Sublicensees, excluding FMI and FMI Affiliates. + + 1.69 Roche Know-How + +The term "Roche Know-How" shall mean all Know-How that Roche Controls during the Agreement Term. + + 1.70 Roche Foreground Patent Rights + +The term "Roche Foreground Patent Rights" shall mean the Patent Rights that Roche Controls (other than through licenses granted under this Agreement) and that Cover Inventions conceived of and reduced to practice after the Effective Date in the performance of the activities under this Agreement, excluding any Joint Patent Rights and the Excluded Patent Rights. + + 1.71 ROW Territory + +The term "ROW Territory" shall mean […***…]. + + 1.72 RUO + +The term "RUO" shall mean an assay intended or approved for research use only. ***Confidential Treatment Requested*** + +- 15 - + + + + + +1.73 Study Data + +The term "Study Data" shall mean all data related to any Data Subject collected by or transferred to the Roche Group or business partners, in connection with any services that FMI may provide to Roche. + + 1.74 Sublicensee + +The term "Sublicensee" shall mean an entity to which Roche or FMI, as applicable, has licensed rights (through one or multiple tiers), other than through a Compulsory Sublicense, pursuant to this Agreement. + + 1.75 Territory + +The term "Territory" shall mean […***…]. + + 1.76 Third Party + +The term "Third Party" shall mean a person or entity other than (i) FMI or any of its Affiliates or (ii) a member of the Roche Group. + + 1.77 US + +The term "US" shall mean the United States of America and its territories and possessions. + + 1.78 US$ + +The term "US$" shall mean US dollars. + + 1.79 Work Stream + +The term "Work Stream" shall mean each of the Molecular Information Platform Program, Immunotherapy Testing Platform Development Program, the ctDNA Platform Development Program, and the CDx Development Program. + + 1.80 Additional Definitions + +Each of the following definitions is set forth in the Section of this Agreement indicated below: Definition Section AAA 19.3 Accounting Period 9.1 Advanced Genomic Analyses 3.1.4 Alliance Director 6.2 Approved Markers 3.4.1 Assessment 10 Bankruptcy Code 18 Binding Orders 3.1.5 Biomarker IP 2.1.2 Breaching Party 17.2.1 CDx Assays 3.4.1 CDx Platform Working Group 3.4.2 Chairperson 6.1.1 Competent Authority Procedures 10 ctDNA Milestone Date 8.4 Create Act 12.6 Database Renewal Term 3.1.9 Database Queries 3.1.8 ***Confidential Treatment Requested*** + +- 16 - + + + + + +Definition Section Data Subject 1.57 Decision Period 12.5 Disclosing Party 1.17 Ex-US Collaboration Agreement Whereas Clause First ctDNA Milestone Date 8.4 FMI CDx IP 12.1.5 FMI-Derived Advanced Genomic Analysis Results 3.1.8 FMI Improvement IP 12.1.2 FMI Invention 1.44 Immuno-Biomarker Discovery Platform 3.2.1 Immuno-Clinical Study Assays 0 Immunotherapy Exclusivity Period 3.2.8 Immunotherapy Testing Platform Development Budget 8.3.1 Genomic Analyses 3.1.4 Indemnified Party 14.3 Indemnifying Party 14.3 Initial Roche ctDNA Assay 8.4 Initiating Party 12.5 Investigational Markers 3.4.1 IVD Collaboration Whereas Clause Joint Invention 1.44 Materially Modified 8.3.2(i) Members 6.1.1 Molecular Information Database 3.1.8 Molecular Information Database Access 3.1.8 Non-Breaching Party 17.2.1 Payment Currency 9.3 Peremptory Notice Period 17.2.1 Products and Services 7 Profiling Renewal Term 3.1.9 Profiling Term 3.1.9 Publishing Notice 16.4 Publishing Party 16.4 Receiving Party 1.17 Related Agreements Whereas Clause Reserved Capacity 3.1.4 Reserved Capacity Fees 8.2.1.1 Roche CDx Development IP 12.1.5 Roche ctDNA Sample Results 12.1.4 Roche Immunotherapy Sample Results 12.1.3 Roche Improvement IP 12.1.2 Roche Invention 1.44 Roche-Owned Advanced Genomic Analysis Results 12.1.2 Roche's Jurisdiction 10 Sample Profiling 3.1.4 - 17 - + + + + + +Definition Section Sample Results 3.1.6 Second ctDNA Milestone Date 8.4 Settlement 12.5 Signature Identification 3.2.1 Suit Notice 12.5 Task Orders 3.1.3 TPP 6.1.5.2 Transaction Agreement Whereas Clause US Education Collaboration Agreement Whereas Clause + + 2. Grant of License + +2.1 Licenses + + 2.1.1 Research and Development Cross License + +Each Party grants to the other Party during the time that a Work Stream is in effect, a non-exclusive right and license under Know-How and Patent Rights, including the Background IP, Controlled by such Party and that are necessary or useful solely to enable the other Party to perform the activities contemplated under this Agreement; […***…]. + + 2.1.2 Molecular Information Platform Licenses + +Roche hereby grants to FMI a non-exclusive, royalty-free, worldwide and perpetual license, sublicensable to FMI's Affiliates, under any intellectual property rights arising directly from the Sample Results, or the correlation of the Sample Results to patient data ("Biomarker IP") (i) to the extent such Biomarker IP becomes publicly known, for internal research purposes, (ii) to the extent such Biomarker IP becomes publicly known, to develop, make, have made, use, offer for sale, sell, import, and commercialize FMI's Products and Services relating to genomic analysis, and (iii) […***…]. + +Roche hereby grants to FMI a non-exclusive, royalty-free, worldwide and perpetual license, sublicensable to Affiliates, to use the Roche-Owned Advanced Genomic Analysis Results to develop, make, have made, use, offer for sale, sell, import and commercialize FMI's products and services relating to genomic analysis. + +FMI hereby grants to Roche a non-exclusive, royalty-free, worldwide and perpetual license, sublicensable to Roche's Affiliates under any FMI Improvements for Roche's internal research purposes and to develop, make, have made, use, offer for sale, sell, import and commercialize Roche's products and services other than diagnostic products and services. + + 2.1.3 Immunotherapy Testing Platform Licenses + +Effective after the Immunotherapy Exclusivity Period, Roche hereby grants to FMI a non-exclusive, royalty-free, worldwide, perpetual, and sublicensable to Affiliates, license to any intellectual property arising from the Immunotherapy Testing Platform Development Program Controlled by Roche (excluding Roche Immunotherapy Sample Results) to the extent necessary ***Confidential Treatment Requested*** + +- 18 - + + + + + +for FMI to develop, make, have made, use, offer for sale, sell, import and commercialize the Immuno-Biomarker Discovery Platform, Signature Identification services, Clinical Study assays, CDx assays, or any other FMI testing or services (including that are part of the Genomic Analysis Platform). + +FMI hereby grants to Roche a non-exclusive, royalty-free, worldwide, perpetual, and sublicensable license to any intellectual property arising from the Immunotherapy Testing Platform Program Controlled by FMI for internal research purposes and to the extent necessary for Roche to research, develop, make, have made, use, offer for sale, sell, import and commercialize Roche products other than diagnostic products. + +If FMI is unable or unwilling to develop and commercialize an Immuno Clinical Study assay or CDx assay resulting from the Immunotherapy Testing Platform Development Program in a given country within the Territory as specified in an R&D Plan for any reason other than a breach of this Agreement by Roche, and on the timeline agreed to in such R&D Plan, then, effective on the end of the timeline specified in such R&D Plan, FMI hereby grants to Roche a non-exclusive, royalty-free, perpetual, and sublicensable license under any intellectual property invented by FMI arising from the Immunotherapy Testing Platform Program or the Immunotherapy Testing Platform Development that is necessary for Roche to develop and commercialize such tests in such country in the Territory. + + 2.1.4 ctDNA Licenses + +FMI hereby grants to Roche (i) an exclusive, royalty-free, sublicensable, worldwide and perpetual license to any intellectual property rights arising from the ctDNA Development Platform Program that are necessary for Roche to develop, make, have made, use, offer for sale, sell, import and commercialize Roche products other than diagnostic products (including the use, formulation, methods of treatment, clinical data or other data, information or results relating to the Roche therapeutic product) solely for use in connection with such activities and such Roche products and (ii) a non-exclusive, royalty-free, worldwide and perpetual license, with the right to grant sublicenses solely to Roche Affiliates, to any intellectual property rights arising from the ctDNA Development Platform Program, for internal research purposes. + +Roche hereby grants to FMI a non-exclusive, royalty-free, worldwide, perpetual, and sublicensable license to any IP Controlled by Roche and developed under the ctDNA Platform Development Program (excluding Roche Immunotherapy Sample Results) to the extent necessary for FMI to research, develop, make, have made, use, offer for sale, sell, import and commercialize the ctDNA Assays. + + 2.1.5 CDx Development Program + +FMI hereby grants to Roche a non-exclusive license under the FMI CDx IP for internal research purposes, and to the extent necessary to research, develop, make, have made, use, offer for sale, sell, import and commercialize Roche products other than diagnostic products. + +If FMI is unwilling or unable to develop and commercialize a CDx Assay for a given country in the Territory as specified in the R&D Plan, and on the timeline set forth in the relevant R&D Plan, for any reason other than a breach of this Agreement by Roche, then FMI hereby grants to Roche a non-exclusive, royalty-free, sublicensable, and perpetual license under any intellectual property invented by FMI arising from the CDx Development Program that is necessary for Roche to develop and commercialize a CDx Assay equivalent in such country in the Territory. - 19 - + + + + + +2.2 Sublicense + +Except as otherwise provided herein, where the right to sublicense is granted under this Agreement, the licensee shall have the right to sublicense, and subcontract (subject to Section 2.3), through multiple tiers. Each sublicense granted hereunder to a Third Party shall be pursuant to a written agreement. Each sublicense granted hereunder by a Party shall include restrictions on the disclosure of the other Party's Confidential Information that are substantially similar to the protections provided herein. Each Party shall be liable for any action or failure to act by a sublicensee under a sublicense granted by such Party to the extent such action or failure to act on the part of such Party would constitute a breach of this Agreement by such Party. + + 2.3 Right to Subcontract + +Each Party shall have the right to subcontract the work performed under this Agreement in accordance with the applicable R&D Plan. Each such subcontract with a Third Party shall be pursuant to a written agreement. Each such subcontract by a Party shall include restrictions on the disclosure of the other Party's Confidential Information that are substantially similar to the protections provided herein. Each Party shall be liable for any action or failure to act by a subcontractor under a subcontract entered into by such Party to the extent such action or failure to act on the part of such Party would constitute a breach of this Agreement by such Party. + + 3. Research and Development Collaboration + +3.1 Molecular Information Platform Program + + 3.1.1 Scope + +Roche and FMI shall conduct the Molecular Information Platform Program pursuant to this Agreement under the direction of the Molecular Information Platform Working Group. + + 3.1.2 Molecular Information Platform Working Group + +The Parties shall establish the Molecular Information Platform Working Group within sixty (60) days after the Effective Date to operationalize the Molecular Information Platform Program. The Molecular Information Platform Working Group's activities will be overseen by JRDC. + + 3.1.3 Task Orders + +The Parties will conduct the Molecular Information Platform Program in accordance with agreed upon task orders ("Task Orders") and in compliance with Performance Specifications and Quality Standards. Each Task Order will be substantially in the form set forth in Appendix 3.1.3. To the extent any terms set forth in a Task Order conflict with the terms set forth in this Agreement, the terms of this Agreement shall control. + + 3.1.4 Sample Profiling and Reserved Capacity + +FMI shall provide, and shall reserve capacity to provide, Roche with comprehensive profiling, analysis and reporting ("Sample Profiling") of at least […***…] during the first […***…] immediately following the Effective date, and at least […***…] samples during the next […***…] ***Confidential Treatment Requested*** + +- 20 - + + + + + +("Reserved Capacity") using FMI's platform for molecular genomic profiling of cancer samples (the "Genomic Analysis Platform"). The initial laboratory and computational biology activities performed on the Samples as part of Sample Profiling are "Genomic Analyses". FMI will provide Sample Profiling in accordance with the Reserved Capacity during the Profiling Term and Profiling Renewal Term, using the then-current versions of the tests included in its Genomic Analysis Platform. The Sampling Profiles shall be provided in a specified format to be mutually agreed by the Parties. The JMC will discuss and decide upon the Reserved Capacity commitment for Profiling Renewal Terms, provided that any Reserved Capacity amount in excess of […***…] that would require FMI to increase its existing capacity will require FMI approval. + +Sample Profiling will include advanced genomic analyses, i.e. advanced laboratory and computational biology activities in the field of cancer genomic sequencing and analysis performed on Samples, including […***…] (collectively, "Advanced Genomic Analyses"). Sample Profiling includes Genomic Analyses and Advanced Genomic Analyses. + +FMI may adopt modifications to the Performance Specifications without Roche's consent, so long as such modifications do not result in a material diminution in the analytical performance of the Genomic Analysis Platform as measured by the metrics set forth in Appendix 1.57 (which such material diminution would require the prior written consent of Roche). In the event […***…], and such change results in a material diminution in the analytical performance of the Genomic Analysis Platform as measured by the metrics set forth in Appendix 1.57, Roche may, at its election, and upon written notice to FMI, terminate each Party's obligations under Reserved Capacity, including Roche's obligations under Section 8.2.1.1 to pay Reserved Capacity Fees and opt out of the price per Sample fees for Sample Profiling otherwise specified in Section 8.2.1.2, in each case, from the effect of such sequencing platform change. If Roche elects to terminate the Parties' obligations under Reserved Capacity and opts out of the per Sample pricing for Sample Profiling specified in Section 8.2.1.2, Sample Profiling shall then be performed, and fees for such Sample Profiling shall then be charged, on a per Sample basis at FMI's standard rates or on pricing terms to be mutually agreed in writing by the Parties (or as otherwise mutually agreed in writing by the Parties). + + 3.1.5 Forecasting and Binding Orders + +Not later than the first Business Day of […***…] during the Profiling Term and Profiling Renewal Terms, Roche will provide FMI with a rolling forecast of its estimated requirements for Sample Profiling for the following […***…], the rolling forecast for the […***…] of which shall be deemed to be a binding order for sample volume (including specifications for the number of samples to be run using each of FMI's different tests) ("Binding Orders"). Binding Orders will not impact FMI's commitment to provide services for at least the Reserved Capacity amount, and Roche's financial commitment to pay the Reserved Capacity Fee. FMI shall use Commercially Reasonable Efforts to fulfill requests for Sample Profiling exceeding the Reserved Capacity based on forecasts provided by Roche (each a "Forecast") in advance of […***…] as specified below. + + 3.1.6 Samples, Sample Results, Web-Portal + +Roche will provide samples to FMI for Sample Profiling as provided for in Section 3.5. The results of the Sample Profiling ("Sample Results") shall be provided by FMI to Roche in a timeframe to be agreed upon by the Parties. A sample report is attached as Appendix 3.1.6. ***Confidential Treatment Requested*** + +- 21 - + + + + + +FMI will set up and utilize a basic web-portal for Roche to access Sample Results and patient reports for Roche Clinical Studies. This web-portal shall be similar to the portal that FMI provides to its other major pharmaceutical customers. + + 3.1.7 Clinical Reports + +FMI will provide Roche with clinical (e.g., FoundationOne® or FoundationOne® Heme) reports from Sample Profiling on reasonable request, to be specified in applicable Task Orders, to enable Roche to provide comprehensive information to physicians and patients. + + 3.1.8 Database Insights + +FMI will provide molecular information insights ("Database Insights") arising from FMI's database of aggregated clinical genomic analysis results, which include genomic alterations (base substitutions, insertions and deletions, copy number alterations, and rearrangements) detected by the Genomic Analysis Platform across FMI's clinical testing experience in all disease ontologies (the "Molecular Information Database"), in response to queries supplied by Roche ("Database Queries") or generated by FMI in response to discussions between the Parties about areas of interest for Roche (e.g., […***…]), utilizing a team of […***…] FMI FTEs with requisite training and experience to generate Database Insights ("Molecular Information Database Access"). + +Database Insights and results of Advanced Genomic Analyses performed against the Molecular Information Database (which, for clarity, does not include Roche's Sample Results) ("FMI-Derived Advanced Genomic Analysis Results") shall be deemed FMI Confidential Information. Roche and its Affiliates may use the Database Query Results and FMI-Derived Advanced Genomic Analysis Results for all purposes, except that Roche may not disclose the Database Query Results to Third Parties, other than as necessary for development, approval or commercialization of a therapeutic or diagnostic product owned or controlled by Roche, or as otherwise consistent with the terms of confidentiality contained in the Definitive Agreement. + + 3.1.9 Molecular Information Database Access + +As set forth in Section 3.1.8, FMI will provide Roche mediated (indirect through dedicated FMI FTEs) access to the Molecular Information Database to pose Database Queries and will provide the resulting Database Insights to Roche in a format to be mutually agreed by the Parties. FMI will also provide Roche with direct access to the Molecular Information Database for Roche to perform Database Queries and generate Database Insights, when such service is made available to Third Parties by FMI in the ordinary course of business. + + 3.1.10 Duration and Extension + +The term for Sample Profiling set forth in Section 3.1.4 shall commence on the Effective Date and continue for five (5) years thereafter (the "Profiling Term"). The Profiling Term may be extended at Roche's option, upon […***…] written notice to FMI as specified in Section 19.13, for additional three (3) year periods, during any period of time in which Roche is a majority shareholder of FMI (each a "Profiling Renewal Term"). + +The term for Database Insights under Section 3.1.8 shall commence on the Effective Date and continue for five (5) years thereafter (the "Database Insights Term"). The Database Insights ***Confidential Treatment Requested*** + +- 22 - + + + + + +Term may be extended at Roche's option, upon […***…] notice to FMI as specified in Section 19.13, for additional three (3) year periods, during any period of time in which Roche is a majority shareholder of FMI (each a "Database Renewal Term"). + +During any Profiling Renewal Term and/or Database Renewal Term, if FMI increases the fees it charges to Third Parties for Sample Profiling and/or Database Insights, then FMI will notify Roche of such adjustment(s), and the Parties shall agree upon the fees to be charged to Roche during the Profiling Renewal Term and/or Database Renewal Term, subject to Article 5, for such Profiling Renewal Term and/or Database Renewal Term prior to its commencement. + +If FMI is unable to provide Roche with the Reserved Capacity, or to provide Roche with deliverables meeting Performance Specifications for the Sample Profiling or the Database Queries or fails to comply with Quality Standards, then Roche will have the right to terminate the Sample Profiling and/or Database Insights, as applicable, as set forth in Section 17.3.3, subject to the notice and cure provisions therein. + + 3.2 Immunotherapy Testing Platform Development Program + + 3.2.1 Scope + +Roche and FMI shall conduct the Immunotherapy Testing Platform Development Program pursuant to a mutually agreed R&D Plan under the direction of the Immuno-Platform Working Group. The purpose of the Immunotherapy Testing Platform Development Program is to develop an immunotherapy testing platform meeting the specifications set forth by the Immuno-Platform Working Group for profiling of cancer immunotherapy patients (the "Immuno-Biomarker Discovery Platform"). The Parties hope to further deploy the platform for use in Clinical Study sample profiling to identify possible signatures for immunotherapy response ("Signature Identification"). Roche may also, at its option, request that FMI develop CLIA immunotherapy testing Clinical Study assays for use in selecting or differentiating patients in Roche Clinical Studies in immuno-oncology ("Immuno-Clinical Study Assays"). + + 3.2.2 Immuno-Platform Working Group + +The Parties shall establish the Immuno-Platform Working Group within sixty (60) days after the Effective Date to operationalize the Immunotherapy Testing Platform Development. The Immuno-Platform Working Group's activities will be overseen by JRDC. + +The Immuno-Platform Working Group shall serve as a forum for discussion and sharing updates and information between the Parties, but shall have no decision-making authority. The Immuno-Platform Working Group shall: + +(i) serve as a forum for discussing the development of the Immuno-Biomarker Discovery Platform and related Products and Services, as well as Immuno-Clinical Study Assays, if applicable; + +(ii) serve as a forum for coordinating the Parties' efforts to carry out the R&D Plan; + +(iii) periodically monitor progress of activities under the R&D Plan and discuss any obstacles or delays with regard to achieving the timelines set forth therein; ***Confidential Treatment Requested*** + +- 23 - + + + + + +(iv) discuss the overall strategy, including the submission plans, for obtaining and maintaining Regulatory Approval of any of the Products and Services developed in the Immunotherapy Testing Platform Development Program; and + +(v) such other responsibilities as may be assigned to the Immuno-Platform Working Group in or pursuant to this Agreement or as may be mutually agreed by the Parties in writing. + + 3.2.3 R&D Plan + +The Parties will conduct the Immunotherapy Testing Platform Development Program in accordance with an R&D Plan and in compliance with Performance Specifications and Quality Standards. Unless decided otherwise by the JMC, the R&D Plan will be updated […***…] by the Immuno- Platform Working Group, reviewed and recommended for approval by the JRDC and approved by the JMC. The R&D Plan will set forth (i) the scope of the Immunotherapy Testing Platform Development Program and the FTE resources that will be dedicated to the activities contemplated within the scope of the Immunotherapy Testing Platform Development Program, including the responsibilities of each Party (ii) an overall timeline and specific objectives for each year, which objectives will be updated or amended, as appropriate, by the JRDC as research progresses, and (iii) budgets for such activities. The Parties shall update the R&D Plan no later than […***…] before the first anniversary of the Effective Date. The JRDC shall review the R&D Plan on an ongoing basis and may amend the R&D Plan. Any such changes shall be reflected in written amendments to the R&D Plan. + + 3.2.4 Responsibilities of the Parties + +FMI will work with Roche in accordance with the R&D Plan to develop the Immuno-Biomarker Discovery Platform, perform Signature Identification, and, as requested by Roche, develop Immuno Clinical Study Assays. Except for the contracts listed on Appendix 3.2.4, the Parties will meet and discuss existing contracts for activities that are Excepted Activities, and enact a plan for winding-down such contracts, where appropriate. + +Roche will work with FMI in accordance with the R&D Plan established by the Immuno-Platform Working Group, including by providing relevant samples and associated data, immuno-oncology expertise, and bioinformatics support, in each case to the extent agreed to in the R&D Plan. + + 3.2.5 Budget + +A budget for the anticipated work for the Immunotherapy Testing Platform Development forms a part of the R&D Plan. Any changes to this budget shall be reviewed by the JRDC and then submitted to the JMC for approval. + + 3.2.6 Duration + +The initial term of the Immunotherapy Testing Platform Development Program will be five (5) years beginning on the Effective Date. + + 3.2.7 Extension + +Roche shall have the right to extend the Immunotherapy Testing Platform Development Program, upon [...***...] written notice to FMI as specified in Section 19.13, for up to six (6) ***Confidential Treatment Requested*** + +- 24 - + + + + + +additional one (1) year periods, during any period of time in which Roche is a majority shareholder of FMI (each a "Signature Identification Renewal Term"), provided, for clarity, that during any Signature Identification Renewal Term, FMI's obligations under Section 16.1 shall continue to apply to any signature identified under this Agreement but that exclusivity under Section 3.2.8 shall not apply to the Immuno-Biomarker Discovery Platform. + + 3.2.8 Exclusivity + +Except for Excepted Activities, for the lesser of (i) […***…] after the Effective Date or (ii) […***…] (the "Immunotherapy Exclusivity Period"), FMI will work exclusively with Roche with respect to […***…]. Except with regard to Excepted Activities, FMI will not (i) work directly or indirectly with any Third Party in the field of […***…], (ii) use for the benefit of any Third Party the […***…] or (iii) transfer to or otherwise enable any Third Party to make use of any data, technology or results from the Immunotherapy Testing Platform Development Program for […***…]. + +Following the Immunotherapy Exclusivity Period, FMI shall have the right to work with Third Parties in the field of cancer immunotherapy, and to otherwise commercialize the Immuno-Biomarker Discovery Platform, subject to the Related Agreements. + + 3.2.9 Excepted Activities + +For any Excepted Activities, FMI shall provide copies of proposed publications Roche for review in accordance with Section 16.4. + + […***…] + +For the first […***…] following commercial launch by FMI of any Immuno Clinical Study Assay(s) created during or derived from the Immunotherapy Testing Platform Development, Roche and its Affiliates will be entitled to […***…], for the purchase of any such Immuno Clinical Study Assay(s). + + 3.3 ctDNA Platform Development Program + + 3.3.1 Scope + +Roche and FMI shall conduct the ctDNA Platform Development Program, pursuant to a mutually agreed R&D Plan under the direction of the ctDNA Working Group. The purpose of the ctDNA Platform Development Program is to develop ctDNA Assays meeting the specifications set forth in the R&D Plan. + + 3.3.2 Working Group + +The Parties shall establish the ctDNA Working Group within sixty (60) days after the Effective Date to operationalize the ctDNA Platform Development. The ctDNA Working Group's activities will be overseen by JRDC. ***Confidential Treatment Requested*** + +- 25 - + + + + + +The ctDNA Working Group shall serve as a forum for discussion and sharing updates and information between the Parties, but shall have no decision-making authority. The ctDNA Working Group shall: + + (i) serve as a forum for discussing the development of the ctDNA Platform and ctDNA Products; + + (ii) serve as a forum for coordinating the Parties' efforts to carry out the R&D Plan; + + (iii) periodically monitor progress of activities under the R&D Plan and discuss any obstacles or delays with regard to achieving thetimelines set forth therein; + + (iv) discuss the overall strategy, including the submission plans, for obtaining and maintaining Regulatory Approval of any of thectDNA Products; and + + (v) such other responsibilities as may be assigned to the ctDNA Working Group in or pursuant to this Agreement or as may bemutually agreed by the Parties in writing. + + 3.3.3 R&D Plan + +FMI will develop the ctDNA Assays, leveraging ongoing efforts, in accordance with the R&D Plan and in compliance with Performance Specifications and Quality Standards. Unless decided otherwise by the JMC, the R&D Plan will be updated […***…] by the ctDNA Working Group, reviewed and recommended for approval by the JRDC and approved by the JMC. The R&D Plan will set forth (i) the scope of the ctDNA Platform Development Program and the FTE resources that will be dedicated to the activities contemplated within the scope of the ctDNA Platform Development Program, including the responsibilities of each Party (ii) an overall timeline and specific objectives for each year, which objectives will be updated or amended, as appropriate, by the JRDC as research progresses, and (iii) budgets for such activities. The Parties shall update the R&D Plan no later than […***…] before the first anniversary of the Effective Date. The JRDC shall review the R&D Plan on an ongoing basis and may amend the R&D Plan subject to approval of the JMC. Any such changes shall be reflected in written amendments to the R&D Plan. + + 3.3.4 Responsibilities of the Parties + +FMI shall, subject to all terms and conditions of this Agreement, use Commercially Reasonable Efforts to Develop the Initial Roche ctDNA Assay and the ALK ctDNA Clinical Trial Assay in accordance with the R&D Plan. FMI will work with Roche in accordance with the R&D Plan to develop ctDNA Assays. + +Roche will work with FMI in accordance with the R&D Plan, including by providing relevant Samples and associated data, in each case to the extent agreed to in the R&D Plan. + +Roche assumes no liability for use of the Genomic Analyses obtained from Samples provided under this Agreement, except as and to the extent arising out of a breach by Roche of this Agreement. - 26 - + + + + + + 3.3.5 Budget + +FMI will have sole control over, and responsibility for, the budget and funding for the anticipated work for the ctDNA Platform Development under the R&D Plan. + + 3.3.6 Duration + +The initial term of the ctDNA Platform Development Program will be twelve (12) months. + + 3.3.7 Extension + +The initial term of the ctDNA Platform Development Program may be extended by the mutual agreement of the Parties. + + […***…] + +For the […***…] following commercial launch by FMI of any ctDNA Assay(s) created during or derived from the ctDNA Platform Development, Roche and its Affiliates will be entitled to […***…], for the purchase of any such ctDNA Assay(s). + + 3.3.9 Commercialization + +Subject to the Related Agreements, FMI shall have the right to commercialize the ctDNA Assays. The ctDNA Assays may be made commercially available to any customer, except that FMI shall not disclose to an Third Party the specific content of any ctDNA Assay developed specifically for Roche for use as a Clinical Study assay. + + 3.4 CDx Development Program + + 3.4.1 Scope + +Roche and FMI shall conduct the CDx Development Program pursuant to a mutually agreed R&D Plan. The activities conducted in connection with the CDx Development Program will be overseen by the JRDC. The purpose of the CDx Development Program is to develop certain companion diagnostic tests or assays (the "CDx Assays") for use in connection with certain Roche products. Such CDx Assays may include those developed at Roche's request in connection with markers that have not yet been approved by the FDA for the particular tumor type/indication for which Roche is developing the relevant therapeutic ("Investigational Markers") and those developed by mutual agreement of the Parties in connection with markers that are included in one or more assays approved by the FDA for the particular tumor type/indication to indicate use of a Roche therapeutic ("Approved Markers"). + + 3.4.2 Working Group + +For each CDx Assay under development, the Parties shall establish a working group (the "CDx Platform Working Group"), to operationalize the CDx Development. The Parties shall establish the first CDx Platform Working Group within sixty (60) days after the Effective Date. Each CDx Platform Working Group's activities will be overseen by JRDC. ***Confidential Treatment Requested*** + +- 27 - + + + + + +The CDx Platform Working Group shall serve as a forum for discussion and sharing updates and information between the Parties, but shall have no decision-making authority. The CDx Platform Working Group shall: + +(i) serve as a forum for discussing the development of CDx Assays and related Products and Services; + +(ii) serve as a forum for coordinating the Parties' efforts to carry out the R&D Plan; + +(iii) periodically monitor progress of activities under the R&D Plan and discuss any obstacles or delays with regard to achieving the timelines set forth therein; + +(iv) discuss the overall strategy, including the submission plans, for obtaining and maintaining Regulatory Approval of any of the Products and Services developed in the CDx Development Program; and + +(v) such other responsibilities as may be assigned to the CDx Platform Working Group in or pursuant to this Agreement or as may be mutually agreed by the Parties in writing. + + 3.4.3 R&D Plan + +The Parties will conduct the CDx Development Program in accordance with the R&D Plan and in compliance with Performance Specifications and Quality Standards. Unless decided otherwise by the JMC, the R&D Plan will be updated […***…] by the CDx Platform Working Group, reviewed and recommended for approval by the JRDC and approved by the JMC. The R&D Plan will set forth (i) the scope of the CDx Development Program and the resources that will be dedicated to the activities contemplated within the CDx Development Program, including the responsibilities of each Party (ii) specific objectives for each year, which objectives will be updated or amended, as appropriate, by the JRDC as research progresses, and (iii) budgets for such activities. The Parties shall prepare a plan for activities to be conducted no later than […***…] before the first anniversary of the Effective Date. The JMC shall review the R&D Plan on an ongoing basis and may amend the R&D Plan. Any such changes shall be reflected in written amendments to the R&D Plan. + + 3.4.4 Responsibilities of the Parties + +FMI will provide CDx development and testing services, including, as required by the R&D Plan, providing FDA QSR laboratory capacity to support such testing. The CDx services will be based on individual CDx R&D Plans for specific Roche assets that will be agreed upon, signed by the Parties and thereby made a part of this Agreement as Appendices 3.4.4(a), 3.4.4(b) and so on. All CDx services will be performed with appropriate systems and documentation to support eventual FDA approval of a PMA or 510(k) or, if agreed by the Parties, approval from the relevant regulatory authorities for an ROW Territory in which FMI will deliver a CDx Assay for Roche therapeutics. + +FMI will be responsible for performing the development work for the CDx Assays according to the individual CDx R&D Plans. Unless otherwise expressly agreed between the Parties, FMI will be responsible for seeking regulatory approval (including PMAs, 510(k)s or equivalent) for the CDx Assays. FMI will provide Roche with cross-reference letters, and shall otherwise coordinate regulatory submissions and related information, with Roche. - 28 - + + + + + +Roche is responsible for supplying FMI with the information and materials necessary for each CDx Assay to be developed under the CDx Development Program in accordance with the R&D Plan. Roche will be solely responsible for seeking regulatory approval for the associated Roche asset. Roche will provide FMI with cross-reference letters, and shall otherwise coordinate regulatory submissions and related information with FMI. + + 3.4.5 Budget + +Roche and FMI shall agree on a budget for each CDx Assay. The initial budget forms a part of the initial R&D Plan. + + 3.4.6 Duration + +The term of the CDx Development Program shall be five (5) years. + + 3.4.7 Extension + +Roche shall have the right to extend the term of the CDx Development Program, upon […***…] prior written notice to FMI as specified in Section 19.13, for additional three (3) year periods, during any period of time in which Roche is a majority shareholder of FMI. + + 3.4.8 Continuing Obligations + +If work under an individual CDx R&D Plan is initiated during the initial term of the CDx Development Program or an extension thereof, then such work shall be completed as set forth in the applicable individual CDx R&D Plan after the initial term or extension, as applicable, in accordance with the terms set forth therein and herein (including with respect to funding obligations). + + 3.4.9 Commercialization + +Subject to the Related Agreements, FMI shall have the right to commercialize the CDx Assays. + + 3.5 Samples, Handling and Disposal + + 3.5.1 Samples + +Roche will provide samples to FMI that meet the FMI specimen requirements attached hereto as Appendix 3.5.1 and in accordance with the applicable R&D Plan. FMI shall not transfer the Samples or other materials obtained or received in connection with this Agreement, or any derivatives thereof, to any Third Party without Roche's prior written approval. FMI shall use the Samples and material obtained or received in connection with this Agreement solely for the performance of activities permitted under this Agreement in FMI's laboratories under suitable containment conditions in accordance with all Applicable Law. FMI shall not analyze the Samples other than as expressly provided for in this Agreement. FMI may use such Samples in accordance with the applicable R&D Plan without any obligation of compensation to the subjects from whom such Samples were obtained or any other Third Party for the intellectual property associated with, or any use of, such Samples. ***Confidential Treatment Requested*** + +- 29 - + + + + + + 3.5.2 Sample Handling and Disposal + +All Samples provided to FMI by or on behalf of Roche shall have been collected or shall be collected, handled, and transferred in compliance with Applicable Law and any applicable policies of any institutional review board, privacy board, or ethics committee with jurisdiction over the collection, handling, and transfer of such material or information. Upon termination of the Agreement or the Work Stream requiring the use of the Samples, or upon completion of those activities requiring use of the Samples, FMI shall promptly return to Roche unused or remaining Samples, or, at FMI's option, securely dispose of all unused or remaining Samples and provide Roche with a written notice of such disposal. + +Roche has authorization and all consents required for FMI to use the Samples in accordance with the R&D Plans and the Agreement. FMI shall use, store and handle all Samples in accordance with the R&D Plans and all Applicable Laws. In the event of withdrawal of a subject's consent, Roche will promptly notify FMI and FMI will destroy the corresponding unused Samples (as documented by written confirmation) or return such Samples to Roche for destruction. + + 3.6 Records; Reports; Audits + + 3.6.1 Progress Reports + +At least […***…] during the time a Work Stream remains in effect, unless otherwise agreed by the Parties, FMI shall have the obligation to prepare and provide to the JRDC a summary presentation on the progress of the work performed by FMI in the course of each Work Stream during the preceding […***…]. Promptly upon expiry of such Work Stream, other than the Molecular Information Platform Program, FMI shall provide a final written report summarizing its activities under such Work Stream and the results thereof. + + 3.6.2 Research Records + +Each Party shall maintain records of each Work Stream (or cause such records to be maintained), except Roche shall not have such obligation for the Molecular Information Platform Program, in sufficient detail and in good scientific manner as will properly reflect all work done and results achieved by or on behalf of such Party in the performance of such Work Stream. All laboratory notebooks shall be maintained for no less than the term of any Patent Rights issuing therefrom. + +In addition, during the Agreement and for […***…] thereafter, FMI shall maintain all data provided to FMI by Roche, the Genomic Results, the FMI Advanced Genomic Analysis Results, Database Insights Database Query Results, and documentation necessary to demonstrate FMI's compliance with the terms of this Agreement, including computerized records and files, in a secure area reasonably protected from fire, theft and destruction; provided, however, that with respect to raw genomic data, FMI shall only be required to retain the original, unprocessed BAM file generated from its sequencing process and no other raw genomic data or intermediate BAM files created in processing to generate the Results. + + 3.6.3 Regulatory Inspections and Audit + +Roche shall be entitled, upon reasonable notice and during FMI's regular business hours, to visit FMI's facility (and those facilities of its subcontractors), including FMI's CLIA-compliant ***Confidential Treatment Requested*** + +- 30 - + + + + + +facilities, to audit for quality assurance purposes its facilities, documentation and procedures used in conducting its activities pursuant to this Agreement. Such audits may be conducted up to […***…] and Roche shall use reasonable effort not to disrupt ongoing operations during such audits. FMI shall provide Roche with prompt notice of any governmental or regulatory review, audit or inspection of any of its facilities involved in the development of the Molecular Information Platform, Immunotherapy Testing Platform, ctDNA Platform, or CDx Assays, and all Products and Services resulting therefrom, and FMI's CLIA-compliant facilities. FMI shall provide Roche with (a) the results of any such review, audit or inspection (including a copy of the relevant sections of the report) to the extent such results pertain to any activities under this Agreement; and (b) the opportunity to provide assistance to FMI in responding to any such review, audit or inspection. + + 4. Diligence + +Roche and FMI shall use Commercially Reasonable Efforts to perform their respective activities contemplated by this Agreement. + + 5. Most Favored Customer + +FMI agrees that the pricing terms for Products and Services provided by FMI to Roche herein, and services provided under the Molecular Information Platform Program, are, and will be, at least as favorable as the pricing terms granted by FMI to any existing customer or collaborator for such (or substantially similar) products or services. If FMI enters into any subsequent agreement with another customer or collaborator which provides for pricing terms for substantially the same product or services at substantially the same (or a lesser) scale, which pricing terms are more favorable than those contained herein, then FMI shall notify Roche and Roche will have the right to modify this agreement to provide Roche with those more favorable pricing terms. […***…]. + + 6. Governance + +6.1 Joint Management Committee + +Within sixty (60) days after the Effective Date, the Parties shall establish a JMC to ensure the smooth operation of the arrangements and activities envisaged under this Agreement. + + 6.1.1 Members + +The JMC shall be composed of six (6) persons ("Members"). Roche and FMI each shall be entitled to appoint three (3) Members with appropriate seniority and functional expertise. Each Party may replace any of its Members and appoint a person to fill the vacancy arising from each such replacement. A Party that replaces a Member shall notify the other Party at least ten (10) days prior to the next scheduled meeting of the JMC. Both Parties shall use reasonable efforts to keep an appropriate level of continuity in representation. Both Parties may invite a reasonable number of additional experts and/or advisors to attend part or the whole JMC meeting with prior notification to the JMC. Members may be represented at any meeting by another person designated by the absent Member. One JMC representative from a Party shall chair ("Chairperson") the JMC on a rotating annual calendar year basis, with the initial chairperson to be from Roche. The JMC will be made up of senior representatives from FMI and Roche, including alliance directors. The JMC may create and/or dissolve joint teams tasked with oversight of specific programs or projects, subject to overall governance by the JMC. The role of the alliance directors will be to facilitate communication and collaboration between the Parties. ***Confidential Treatment Requested*** + +- 31 - + + + + + + 6.1.2 Responsibilities of the JMC + +The JMC shall have the responsibility and authority to: + +a) approve the R&D Plans; + +b) establish, disband and set expectations and mandates for JRDC, JOC, JPT and JOTs, if applicable; + +c) oversee the JRDC, JOC, JPT and JOTs, if applicable; + +d) provide financial oversight for the Immunotherapy Testing Platform Development Program and the CDx Development Program; and + +e) attempt to resolve any disputes escalated from the JRDC or JOC. + +The JMC shall have no responsibility and authority other than that expressly set forth in this section. + + 6.1.3 Meetings + +The Chairperson or his/her delegate is responsible for sending invitations and agendas for all JMC meetings to all Members at least ten (10) days before the next scheduled meeting of the JMC. The venue for the meetings shall be agreed by the JMC. The JMC shall hold meetings at least twice per calendar year, either in person or by tele-/video-conference, and in any case as frequently as the Members of the JMC may agree shall be necessary, but not more than four times a year. The Alliance Director of each Party may attend the JMC meetings as a permanent participant. + + 6.1.4 Minutes + +The Chairperson is responsible for designating a Member to record in reasonable detail and circulate draft minutes of JMC meetings to all members of the JMC for comment and review within twenty (20) days after the relevant meeting. The Members of the JMC shall have ten (10) days to provide comments. The Party preparing the minutes shall incorporate timely received comments and distribute finalized minutes to all Members of the JMC within thirty-five (35) days of the relevant meeting. The Chairperson approves the final version of the minutes before its distribution. + + 6.1.5 Decisions + + 6.1.5.1 Decision Making Authority + +The JMC shall decide matters within its responsibilities set forth in Section 6.1.2. + + 6.1.5.2 ctDNA Platform + +FMI will have final decision-making rights at the JMC with respect to the ctDNA Platform Development, provided that FMI may not change the timelines agree in Section 8.4, and any change to the Roche specifications ("TPP") for a ctDNA Assay specifically requested by Roche as part of the R&D Plan will require Roche's prior approval. - 32 - + + + + + + 6.1.5.3 Consensus; Good Faith + +The Members of the JMC shall act in good faith to cooperate with one another and seek agreement with respect to issues to be decided by the JMC. The Parties shall endeavor to make decisions by consensus with each Party having one (1) vote. + + 6.1.5.4 Failure to Reach Consensus + +If the JMC is unable to decide a matter by consensus, then the escalation procedure in Section 6.1.5.5 shall be applied. + + 6.1.5.5 Escalation + +If the JMC is unable to decide a matter by consensus, then such matter shall be referred to the Chief Executive Officer of FMI or equivalent position or his/her nominee and the Chief Executive Officer of Roche or equivalent position or his/her nominee for resolution, who together shall use reasonable and good faith efforts to reach a decision by consensus within […***…] after the date such matter is referred to them. If the Parties still fail to reach a decision within such […***…]. Any such decision shall constitute a decision of the JMC. Notwithstanding the foregoing, neither Party may exercise deciding authority (i) to impose resource or financial burdens on the other Party for a Work Stream beyond the scope set forth in an agreed upon R&D Plan for such Work Stream or Reserved Capacity under the Molecular Information Platform Program, or (ii) that would violate or amend the terms of this Agreement. The JMC will exist for the Agreement Term. + + 6.1.6 Information Exchange + +FMI and Roche shall exchange the information in relation to its activities under this Agreement through the JMC and FMI and Roche may ask reasonable questions in relation to the above information and offer advice in relation thereto and Roche shall give due consideration to FMI's input. The JMC may determine other routes of information exchange. + + 6.1.7 Subcommittees and Joint Operational Teams + +The JMC has the right to establish sub-committees or JOTs. The JRDC shall be established within thirty (30) days after the JMC is established. The JOC shall be established as soon as the JMC deems it necessary. + + 6.2 JRDC + +The JRDC shall oversee the implementation of the Work Streams and to more generally identify opportunities for value creation in research and development activities between the Parties. The JDRC shall be composed of an equal number of persons from each Party, each person having appropriate seniority and functional expertise. Each Party may replace any a person and appoint another person to fill the vacancy arising from each such replacement. The JRDC will strive to reach consensus on any matters within the committee's authority with each Party having one (1) vote. Unresolved dispute at the JRDC will be escalated to the JMC. + + 6.2.1 Responsibilities of the JRDC + +The JRDC shall have the responsibility and authority to: + +a) recommend the R&D Plans for approval by the JMC; + +b) review and recommend for approval any revisions to the R&D Plans; ***Confidential Treatment Requested*** + +- 33 - + + + + + +c) review and oversee the execution of the R&D Plans; + +d) establish timelines and criteria for decision points; + +e) determine whether criteria have been met, including whether the criteria as to whether milestones or events have been achieved; + +f) review the efforts of the Parties and allocate those resources for the R&D Plans (including their budgets); + +g) identify appropriate resources necessary to conduct the R&D Plans; + +h) oversee the progress of the Work Streams; + +j) monitor the development costs and manage reimbursement for FMI activities under this Agreement; + +k) determine for Products and Services Performance Specifications and identify Quality Standards applicable to respective Work Streams; and + +l) attempt to resolve any disputes. + +The JRDC shall have no responsibility and authority other than that expressly set forth in this section. + + 6.3 JOC + +The JOC shall plan and oversee the commercial, co-marketing, educational, and/or promotion activities between the Parties and to serve as a forum for communicating generally about FMI's products and strategies for global commercialization, as such activities are further described in the US Education Collaboration Agreement and the Ex-US Commercialization Agreement. The JOC shall be composed of an equal number of persons from each Party, each person having appropriate seniority and functional expertise. A description of the roles, responsibilities, and workings of the JOC are described in the Ex-US Commercialization Agreement. Through the JOC, Roche may share with FMI knowledge and experience related to countries and markets outside the United States, and will support the design and implementation of a global expansion plan for FMI products. The JOC will strive to reach consensus on any matters within the committee's authority, with each Party having one (1) vote. Unresolved disputes at the JOC will be escalated to the JMC. + + 6.4 Alliance Director + +Each Party shall appoint one person to be the point of contact within each Party with responsibility for facilitating communication and collaboration between the Parties (each, an "Alliance Director"). The Alliance Directors shall be permanent participants of the JMC meetings (but not members of the JMC) and may attend JDRC, JOC and JOT meetings as appropriate. The Alliance Directors shall facilitate resolution of potential and pending issues and potential disputes to enable the JMC to reach consensus and avert escalation of such issues or potential disputes. + + 6.5 Limitations of Authority + +No committee, working group or individual shall have the authority to amend or waive any terms of this Agreement. - 34 - + + + + + +6.6 Expenses + +Each Party shall be responsible for its own expenses including travel and accommodation costs incurred in connection with the JMC. + + 6.7 Lifetime + +The JMC shall exist during the Agreement Term. + + 7. Regulatory + +Subject to the Related Agreements, FMI, […***…], shall use Commercially Reasonable Efforts to pursue all regulatory affairs related to its products and services developed under this Agreement (collectively, "Products and Services") in the Territory including the preparation, filing and maintenance of applications for regulatory approval, as well as any or all governmental approvals required to develop, have developed, make, have made, use, have used, manufacture, have manufactured, import, have imported, sell and have sold such Products and Services. Subject to the Related Agreements, FMI shall be responsible for pursuing, compiling and submitting all regulatory filing documentation, and for interacting with regulatory agencies, for all Products and Services in all countries in the Territory. Subject to the Related Agreements, FMI or its Affiliates shall own and file in their discretion all regulatory filings and Regulatory Approvals for all Products and Services in all countries of the Territory. FMI shall supply Roche with a copy of all material communications related to Products and Services to or from the Regulatory Authorities. Upon request of Roche, FMI shall supply Roche with a copy of all such communications to or from the Regulatory Authorities. + +Subject to the Ex-US Commercialization Agreement, FMI, […***…], shall report to appropriate Redulatory Authorities in accordance with local requirements all adverse events related to use of the Products and Services in the Territory. + + 8. Payment + +8.1 FTE Funding + +Roche will be responsible for funding the FTEs in accordance with the R&D Plans and budgets at the FTE Rate for performance of the research and other activities for which FMI is responsible under the R&D Plans and for the database queries. Each individual included in the funded FTEs shall possess a bachelor's degree or higher in a relevant scientific discipline and shall be experienced in the type of research or other activities to be performed by such individual under this agreement. + + 8.2 Molecular Information Platform Program Fees + + 8.2.1 Sample Profiling Fees + + 8.2.1.1 Reserved Capacity Fees + +In consideration for the Reserved Capacity and provision of the Sample Results associated with the Reserved Capacity, and subject to any reduction resulting from the application of Article 5, Roche shall pay to FMI an amount equal to […***…] for […***…] of the Profiling Term [… ***…] for the […***…] of the Profiling Term ("Reserved Capacity Fees"). The Reserved Capacity Fees are paid as follows: + +[…***…] equal installments of […***…] payable within […***…] of receipt by Roche of an invoice from FMI, beginning with receipt by Roche of a first invoice from FMI issued following the Effective Date and followed by […***…] additional invoices at […***…] intervals thereafter. ***Confidential Treatment Requested*** + +- 35 - + + + + + +[…***…] equal installments of […***…] payable within […***…] of receipt by Roche of an invoice from FMI, beginning […***…] of the Effective Date and followed by […***…] additional invoices at […***…] intervals thereafter. + +For renewal terms, the agreed upon Reserved Capacity Fee shall be paid within […***…] of receipt by Roche of an invoice from FMI at […***…] intervals. + +The Reserved Capacity Fee payments shall be […***…] against Roche's Binding Order for such period, the amount of the Reserved Capacity Fee being […***…]. Actual Sample Profiling costs, based on delivery of Sample Results during the […***…] to which the Reserved Capacity Fee applies, shall be […***…]. If actual Sample Profiling exceeds the amount of Sample Profiling paid by the Reserved Capacity Fees, then […***…]. Roche shall pay FMI for […***…]. If a Binding Order causes Roche to […***…]. Fees for Binding Orders shall […***…]. + + 8.2.1.2 Per Sample Profiling Fees + +The per Sample Profiling fees (notwithstanding the Reserved Capacity Fee) shall be as follows: + +[…***…]. + + 8.2.2 Molecular Information Database Access and Database Queries Fees + +For Molecular Information Database Access and performance of Database Queries by FMI, Roche will pay FMI a total of […***…] of the Database Term, (the "Database Access Fee"), which is comprised of funding for […***…] FTEs, each at the FTE Rate, for performance of such Database Queries and delivery of Database Insights, and a Database Access Fee of […***…]. Roche shall pay to FMI the Database Access Fee […***…] installments of […***…], each payable every […***…] of the Database term and within […***…] after receipt by Roche of an invoice from FMI. + + 8.3 Immunotherapy Testing Platform Development Budget and Fees + + 8.3.1 R&D Plan Budget + +Roche shall be solely responsible for Roche's costs under the Immunotherapy Testing Platform Development Budget. + +Roche will pay FMI […***…] of FMI Development Cost as agreed in the Immunotherapy Testing Platform Budget for development of the Immuno- Biomarker Discovery Platform. + +Roche will pay […***…] of FMI Development Cost as agreed in the Immunotherapy Testing Platform Budget for Signature Identification. ***Confidential Treatment Requested*** + +- 36 - + + + + + +Such reimbursement of FMI Development Cost shall be paid […***…] in arrears. Each […***…], FMI shall invoice Roche for its share of FMI Development Cost incurred in the previous […***…]. Invoices shall be payable within […***…] after receipt by Roche of an invoice from FMI. + + 8.3.2 Payments for Achieving Certain Immunotherapy Testing Platform Development Events + +In addition to payment of the Immunotherapy Testing Platform Development Budget as specified above, Roche shall pay FMI: + + (i) […***…] on Initiation of the first Roche Clinical Study utilizing a Clinical Study assay, […***…]. + + (ii) […***…] on Initiation of the first Roche Clinical Study utilizing a Clinical Study assay, […***…]. + + (iii) […***…] on Initiation of the first Roche Clinical Study utilizing a Clinical Study assay, […***…]. + + 8.3.3 Immuno Clinical Study Assays requested by Roche + +Roche will pay […***…] of FMI's Development Costs for development of Immuno Clinical Study Assays as may be requested by Roche, subject to an agreed upon budget for such development as provided for in Section 3.2.5. + + 8.3.4 Immunotherapy CDx Assays + +If the Parties chose to develop an Immunotherapy CDx Assay, they the Parties shall agree to Roche paying certain costs and milestones for such Immunotherapy CDx assay. + + 8.4 ctDNA Platform Financial Terms + +FMI will be responsible for all FMI Development Cost for the ctDNA Platform Development. As part of the agreed upon ctDNA R&D Plan, FMI will provide sample testing performed under such ctDNA R&D Plan at no cost to Roche (other than Roche's cost in supplying FMI the Samples specified in the ctDNA R&D Plan). + +Roche will pay FMI […***…] if FMI successfully […***…] set forth in the R&D Plan ("Initial Roche ctDNA Assay") within […***…] from [… ***…] (the "First ctDNA Milestone Date"). Payment by Roche shall be made within […***…] after achieving the First ctDNA Milestone Date and the receipt by Roche of an invoice from FMI. + +In addition, Roche will pay FMI […***…] if FMI successfully […***…] as agreed to in the R&D Plan; provided that […***…] (the "Second ctDNA Milestone Date"). Payment by Roche shall be made within […***…] after achieving the Second ctDNA Milestone Date and the receipt by Roche of an invoice from FMI. + +The Parties may develop additional ctDNA Assays for use as Clinical Study assays, subject to an agreed financial structure for such work under the R&D Plan. Such additional development work will be conducted, if at all, pursuant to an amendment to this Agreement or a separate written agreement between the Parties. ***Confidential Treatment Requested*** + +- 37 - + + + + + +8.5 CDx Development Financial Terms + + 8.5.1 CDx Development Costs + +Roche shall pay FMI […***…] of FMI Development Cost for CDx Development of Investigational markers in compliance with the investigational CDx budget that forms part of the R&D Plan. + +FMI shall pay […***…] of the FMI Development Cost for Approved Markers. + +Such reimbursement of FMI Development Cost shall be paid […***…] in arrears. Each […***…], FMI shall invoice Roche for its share of the FMI Development Cost incurred in the […***…]. Invoices shall be payable within […***…] after receipt by Roche of an invoice from FMI. + + 8.5.2 PMA Event Payments + +For each PMA approval corresponding to a Roche product, Roche shall pay FMI […***…], within […***…] after the occurrence of such event and receipt by Roche of an invoice from FMI. + + 8.5.3 Commercial Success Event Payments + +Roche shall pay FMI the following milestone payments upon achievement of CDx Assay report volumes by tissue type within the first […***…] after […***…] of the associated CDx Assay as specified below: + + (i) CDx Assays Including Investigational/Approved Marker(s) for […***…]: + + […***…]. + + (ii) CDx Assays Including Investigational/Approved Marker(s) for […***…]: + + […***…]. + +Upon achievement of each of the CDx Assay volumes under this Section 8.5.3, FMI shall timely notify Roche and payment shall be made by Roche within […***…] after achieving the applicable event and the receipt by Roche of an invoice from FMI. + +In the event the Parties wish to develop another CDx Assay other than those specified above for […***…] and […***…] pursuant to a CDx R&D Plan, the Parties shall mutually agree to […***…] milestones and payments for achieving them. + + 8.6 General Terms + +All rates and costs set forth herein shall remain firm for the Agreement Term and the services to be performed under each Work Stream, unless otherwise agreed to in writing, shall be at the FTE Rate. FMI has an affirmative obligation to use Commercially Reasonable Efforts to negotiate favorable terms for all FMI Development Cost that will be passed through FMI to Roche. FMI shall extend to Roche the benefit of any and all discounts and savings provided to FMI in connection with FMI Development Cost that will be passed through to Roche. Roche shall […***…], any amounts in excess of the agreed upon budget. ***Confidential Treatment Requested*** + +- 38 - + + + + + +8.7 Disclosure of Payments + +FMI acknowledges that Roche may be obligated to disclose this financial arrangement, including all fees, payments and transfers of value, as may be advisable or required under Applicable Law, including the US Sunshine Act. + + 9. Accounting and reporting + +9.1 Timing of Payments + +Payments shall be made during the time periods set forth in this Agreement. If not stated explicitly, payments shall be made by Roche within [… ***…] after Roche receives an invoice from FMI. + + 9.2 Late Payment + +Any payment under this Agreement that is not paid on or before the date such payment is due shall bear interest, to the extent permitted by Applicable Law, at […***…] points above the average one-month Euro Interbank Offered Rate (EURIBOR), as reported by Reuters from time to time, calculated on the number of days such payment is overdue. + + 9.3 Method of Payment + +All amounts payable hereunder shall be paid in US dollars (the "Payment Currency") to account(s) designated by FMI. + + 10. Taxes + +FMI shall pay all sales, turnover, income, revenue, value added, and other taxes levied on account of any payments accruing or made to FMI under this Agreement. + +If provision is made in law or regulation of any country for withholding of taxes of any type, levies or other charges with respect to any royalty or other amounts payable under this Agreement to FMI, then Roche or its relevant Affiliates shall promptly pay such tax, levy or charge for and on behalf of FMI to the proper governmental authority, and shall promptly furnish FMI with receipt of payment. Roche shall be entitled to deduct any such tax, levy or charge actually paid from royalty or other payment due FMI or be promptly reimbursed by FMI if no further payments are due FMI. Each Party agrees to reasonably assist the other Party in claiming exemption from such deductions or withholdings under double taxation or similar agreement or treaty from time to time in force and in minimizing the amount required to be so withheld or deducted. ***Confidential Treatment Requested*** + +- 39 - + + + + + +It is understood between the Parties that the agreed upon and/or applied remunerations and other payments under this Agreement for all transactions between (a) FMI and (b) Roche are based on arm's length and good faith considerations. Should such remunerations for products and services or other payments nevertheless be challenged by any Governmental Authority including any tax authority in the US, or in Switzerland or other jurisdiction of Roche or its relevant Affiliates ("Roche's Jurisdiction"): + + + +(a) FMI and Roche or its relevant Affiliates shall fully co-operate with each other with the objective to convince the challenging authority that such remunerations for products and services and other payments are appropriate, including providing each other with copies of third party agreements if necessary to utilize as comparables to support the arm's length nature of transactions between FMI and Roche. In the event that the challenging authority is not convinced, the Parties shall request that the tax authorities in the US and in Roche's Jurisdiction initiate government-to-government procedures pursuant to the applicable bi- lateral convention for the avoidance of double taxation or similar treaty or convention (if any) between the US and Roche's Jurisdiction ("Competent Authority Procedures"). + + + +(b) In the event that the US tax authorities determine that such remunerations for products and services or other payments are not appropriate and levy an assessment on FMI, and such assessment results in a refund (or similar payment or credit) by or from the tax authorities in Roche's Jurisdiction to Roche or its relevant Affiliate, then Roche shall pay (or shall ensure that Roche shall pay) the amount of such refund to FMI. In the event that the tax authorities in Roche's Jurisdiction determine that such remunerations for products and services or other payments are not appropriate and levy an assessment on Roche, and such assessment results in a refund (or similar payment or credit) by or from the US tax authorities to FMI then FMI shall pay (or shall ensure that FMI shall pay) the amount of such refund to Roche. Each Party shall use its reasonable efforts to obtain such refund (or similar payment or credit). + + (c) In the event of such an assessment by either tax authority (an "Assessment"), the Parties agree to making adjustments to the relevant remunerations for products and services or other payments to levels agreed to by the tax authorities in both the US and Roche's Jurisdiction as the result of Competent Authority Procedures. + + 11. Auditing + +11.1 Right to Audit + +Each Party shall keep, and shall require its Affiliates and Sublicensees to keep, full, true and accurate books of account containing all particulars that may be necessary for the purpose of calculating all payments payable under this Agreement, including, for Roche, the right to audit materials necessary to ensure compliance with the most favored customer provisions of Article 5. Such books of accounts shall be kept at their principal place of business. At the expense of the auditing Party, the auditing Party shall have the right to engage an internationally recognized, independent public accountant reasonably accept able to the other Party to perform, on behalf of such Party an audit of such books and records of the audited Party and its Affiliates, its licensees and Sublicensees, that are deemed necessary for the period or periods requested by the auditing Party and the correctness of any financial report or payments made under this Agreement, including with respect to benefits and terms complying with the most favored - 40 - + + + + + +customer provisions of Article 5. For avoidance of doubt, all audits under this Section shall be conducted solely by an independent public accountant as described in the foregoing sentence. + +Upon timely request and at least […***…] prior written notice from the auditing Party, such audit shall be conducted in the countries specifically requested by the auditing Party, during regular business hours in such a manner as to not unnecessarily interfere with the audited Party's normal business activities, and shall be limited to results in the […***…] prior to audit notification. + +Such audit shall not be performed more frequently than […***…] nor more frequently than […***…] with respect to records covering, or impacting in accordance with Article 5, any specific period of time. + +All information, data documents and abstracts herein referred to shall be used only for the purpose of verifying payment obligations, shall be treated as the audited Party's Confidential Information subject to the obligations of this Agreement and need neither be retained more than [… ***…] after completion of an audit hereof, if an audit has been requested; nor more than […***…] from the end of the […***…] to which each shall pertain; nor more than […***…] after the date of termination of this Agreement. + + 11.2 Audit Reports + +The auditors shall only state factual findings in the audit reports and shall not interpret the agreement. The auditors shall share all draft audit reports with the auditing Party before the draft report is shared with the audited Party and before the final document is issued. The final audit report shall be shared with the auditing Party at the same time it is shared with the audited Party. + + 11.3 Over or Underpayment + +If the audit reveals an overpayment by Roche, FMI shall reimburse Roche for the amount of the overpayment within […***…]. If the audit reveals an underpayment by Roche, Roche shall make up such underpayment with the next payment or, if no further payments are owed by Roche, Roche shall reimburse FMI for the amount of the underpayment within […***…]. The audited Party shall pay for the audit costs if the underpayment of the audited Party exceeds […***…] of the aggregate amount of royalty payments owed with regard to the period subject of the audit. Section 9.2 shall apply to this Section 11.3. + + 11.4 Duration of Audit Rights + +The failure of a Party to request verification of any calculation within the period during which corresponding records must be maintained under this Article 11 will be deemed to be acceptance of the payments and reports. + + 12. Intellectual Property + +12.1 Ownership of Inventions, data and results + + 12.1.1 In General + +Except as specifically set forth herein, FMI shall own all FMI Inventions, Roche shall own all Roche Inventions, and FMI and Roche shall jointly own all Joint Inventions. FMI and Roche each shall require all of its employees to assign all inventions related to Products and Services made by them to Roche and FMI, as the case may be. ***Confidential Treatment Requested*** + +- 41 - + + + + + +The determination of ownership of Inventions shall be determined in accordance with US inventorship laws as if such Inventions were made in the US. + +Except as otherwise expressly set forth herein, each Party shall retain full ownership and control of, and all rights in, its Background IP and any improvements or modifications thereto ("Roche Improvement IP" and "FMI Improvement IP" respectively). Roche Improvement IP shall mean any improvements or modifications to Roche's Background IP discovered, conceived or reduced to practice after the Effective Date in the performance of activities under this Agreement. FMI Improvement IP shall mean any improvements or modifications to FMI's Background IP discovered, conceived or reduced to practice after the Effective Date in the performance of activities under this Agreement. All materials, information, data and writings provided to FMI by or on behalf of Roche, in any form whatsoever, which were Controlled by Roche prior to being provided to FMI, shall remain the property of Roche; FMI shall acquire no right, title or interest in such materials, information, data and writings as the result of its activities under this Agreement. + +Except as specifically set forth herein, this Agreement shall not be construed, by implication, necessity or otherwise as (i) giving any of the Parties any license, right, title, interest in or ownership to the Confidential Information; (ii) granting any license or right under any intellectual property rights; or (iii) representing any commitment by either Party to enter into any additional agreement. + + 12.1.2 For the Molecular Information Platform Program + +Subject to the license granted to FMI under Section 2.1.2, Roche shall exclusively own all right title and interest to any information, results, and intellectual property from any Clinical Study undertaken or supported by Roche, including, without limitation, the Sample Results and information and results from any Sample Profiling. FMI shall assign to Roche its rights to any intellectual property in or arising from the Sample Results (except for FMI Improvements). + +Except as otherwise set forth herein, FMI shall exclusively own all right, title, and interest to any improvements or modifications to the FMI Genomic Analysis Platform that arise in connection with the performance of the work under the Molecular Information Platform Program. + +Roche shall exclusively own all information, results, and intellectual property from Advanced Genomic Analyses performed on Roche samples ("Roche-Owned Advanced Genomic Analysis Results"), and any inventions arising from the Roche-Owned Advanced Genomic Analysis Results, and FMI will assign all rights to any such inventions to Roche (except for FMI Improvements). + + 12.1.3 For the Immunotherapy Testing Platform Program + +Subject to the license granted to FMI under Section 2.1.3, Roche shall exclusively own all data, results, and intellectual property therein arising from profiling samples provided by Roche to FMI for testing in the Immunotherapy Testing Platform Development (except for FMI Improvements) ("Roche Immunotherapy Sample Results"), and FMI shall assign to Roche all such intellectual property. FMI shall not disclose Roche Immunotherapy Sample Results to third parties or use such results in work with Third Parties. - 42 - + + + + + +Roche shall exclusively own, and FMI shall assign to Roche, all intellectual property arising from the Immunotherapy Testing Platform Development that Covers methods of treatment, stratifying patients, or identifying patients that would benefit from a particular treatment, and all other methods useful in connection with the therapeutic treatment of a patient. + +To the extent third-party intellectual property must be licensed for the Immunotherapy Testing Platform Development, Roche and FMI shall jointly decide on an appropriate in-licensing strategy and negotiate a fair cost sharing between the Parties in good faith; provided however, that FMI shall retain the right to take such a license at its own cost on such terms as it shall determine if the Parties cannot reach a timely agreement on how to proceed. + + 12.1.4 For the ctDNA Program + +Subject to the license granted to FMI under Section 2.1.4, Roche shall exclusively own all data, results, and intellectual property arising from the profiling of Roche samples in the ctDNA Platform Development Program ("Roche ctDNA Sample Results"). FMI shall not disclose Roche ctDNA Sample Results to third parties or use such results in work with third parties. + + 12.1.5 For the CDx Development Program + +Subject to the license granted to Roche under Section 2.1.5, FMI shall exclusively own all intellectual property arising from the CDx Development that Covers the CDx Assays ("FMI CDx IP"). + +Roche shall exclusively own all data, results, and intellectual property arising from analysis of its samples in the relevant CDx Development as well as all intellectual property arising from the CDx Development Program to the extent that it is reasonably related to or Covers the relevant Roche product including the use, formulation, and methods of treatment for the relevant Roche product ("Roche CDx Development IP"). + +To the extent third-party intellectual property must be licensed for the Investigational CDx Development or commercialization of the Investigational CDx Assays, Roche and FMI shall jointly decide on an appropriate in-licensing strategy and negotiate a fair cost sharing between the Parties in good faith. + + 12.2 German Statute on Employee's Inventions + +In accordance with the German Statute on Employees' Inventions, each Party agrees to claim the unlimited use of any Invention conceived, reduced to practice, developed, made or created in the performance of, or as a result of, any Research Program by employees of any German Affiliates or any other persons acting on behalf of such German Affiliates. For the avoidance of doubt, each Party is responsible for fulfilling the obligations towards their employees under the German Statute of Employee's Inventions. + + 12.3 Prosecution and Maintenance of Patent Rights Claiming FMI Inventions + +FMI shall, at its own expense and discretion, (i) control and Handle all FMI Foreground Patent Rights, (ii) consult with Roche as to the Handling of such FMI Foreground Patent Rights, and (iii) furnish to Roche copies of all material documents relevant to any such Handling. FMI shall furnish such documents and consult with Roche in sufficient time before any action by FMI is due to allow Roche to provide comments thereon, which comments FMI must consider. At FMI's + +- 43 - + + + + + +expense and reasonable request, Roche shall cooperate, in all reasonable ways with the Handling of all FMI Foreground Patent Rights. If FMI elects not to Handle any FMI Foreground Patent Rights under this Section 12.3, then FMI shall provide at least […***…] prior written notice to Roche. Thereafter, Roche shall have the right, but not the obligation to Handle any such notified FMI Foreground Patent Rights, at its sole expense and its sole discretion. Notwithstanding the foregoing, and for clarity, FMI shall have no obligations to Roche under this Section 12.3 in regard to FMI Foreground Patent Rights relating to the Genomic Analysis Platform or the Molecular Information Database (including, without limitation, methods, procedures, and algorithms related to or embodied in each) that do not incorporate or rely on the continued use of Roche Confidential Information. + + 12.4 Prosecution and Maintenance of Roche Foreground Patent Rights and Joint Patent Rights + +Roche shall, at its own expense and discretion, control and Handle (including abandon) all Roche Foreground Patent Rights and Joint Patent Rights. If Roche elects not to Handle any Patent Rights under this Section 12.4, then Roche shall provide at least […***…] prior written notice to FMI. Thereafter, FMI shall have the right, but not the obligation to Handle any such notified Patent Rights, at its sole expense and its sole discretion. + + 12.5 Joint Patent Team + +Where the Parties need to consult with each other on the Handling of Patent Rights, the Parties shall establish a joint patent team ("JPT") and shall adopt procedures for interacting on patent matters. The JPT shall be subject to the oversight of the JMC. The JPT shall also serve as a forum for promptly notifying the other Party when an Invention is made by a Party. + + 12.6 CREATE Act + +It is the intention of the Parties that this Agreement is a "joint research agreement" as that phrase is defined in Public Law 108-53 ("Create Act") and applied in 35 USC §103(c)(3). If either Party intends to overcome a rejection of a claimed invention within the FMI Foreground Patent Rights or Roche Foreground Patent Rights pursuant to the provisions of the Create Act, then the Parties, through the JPT, shall work together in good faith to agree in writing how any rejection should be overcome. + + 12.7 Infringement + +Each Party shall promptly provide written notice to the other Party during the Agreement Term of any (i) known infringement or suspected infringement by a Third Party of any FMI Background Patent Rights, FMI Foreground Patent Rights, Roche Background Patent Rights, Roche Foreground Patent Rights or Joint Patent Rights, or (ii) known or suspected unauthorized use or misappropriation by a Third Party of any FMI Background Know-How, FMI Know-How, Roche Background Know-How, Roche Know-How or Joint Know-How, and shall provide the other Party with all evidence in its possession supporting such infringement or unauthorized use or misappropriation. + +Within […***…] after a Party provides or receives such written notice ("Decision Period"), the Party Handling enforcement of such Patent Right as set forth in this Section 2.7, in its sole discretion, shall decide whether or not to initiate such suit or action in the Territory and shall notify the other Party in writing of its decision in writing ("Suit Notice"). ***Confidential Treatment Requested*** + +- 44 - + + + + + +For any FMI Background Patent Right or sole FMI Patent Right, FMI in its sole discretion shall decide whether or not to initiate such suit or action in the Territory. FMI shall have full discretion as to how it wishes to handle such suit and may reach Settlement under any terms and conditions it desires and retain all damages, settlement fees or other consideration received in connection therewith. Only if a Settlement could adversely affect Roche shall the written consent of Roche be required, which consent shall not be unreasonably withheld. The term "adversely affect" in the previous sentence shall include, among other things, […***…]. + +For any sole Roche Background Patent Right or Roche Patent Right, Roche, in its sole discretion, shall decide whether or not to initiate such suit or action in the Territory. Roche shall have full discretion as to how it wishes to handle such suit and may reach Settlement under any terms and conditions it desires and retain all damages, settlement fees or other consideration received in connection therewith. Only if a Settlement could adversely affect FMI shall the written consent of FMI be required, which consent shall not be unreasonably withheld. + +If for a Joint Patent Right, Roche decides to bring a suit or take action, once Roche provides Suit Notice, Roche may immediately commence such suit or take such action. In the event that Roche (i) does not in writing advise FMI within the Decision Period that Roche will commence suit or take action, or (ii) fails to commence suit or take action within a reasonable time after providing Suit Notice, FMI shall thereafter have the right to commence suit or take action in the Territory and shall provide written notice Roche of any such suit commenced or action taken by FMI. + +Upon written request, the Party bringing suit or taking action ("Initiating Party") shall keep the other Party informed of the status of any such suit or action and shall provide the other Party with copies, to the extent the Initiating Party is lawfully permitted to do so, of all material documents or communications filed in such suit or action. The Initiating Party shall have the sole and exclusive right to select counsel for any such suit or action. + +The Initiating Party shall, except as provided below, pay all expenses of the suit or action, including the Initiating Party's attorneys' fees and court costs. Any damages, settlement fees or other consideration received as a result of such suit or action shall be allocated as follows: + +(a) First, to reimburse the Initiating Party for its costs and, if any remains, to the other Party for any advisory counsel fees and costs; and + +(b) Second, the balance, if any, shall be allocated […***…]. + +If the Initiating Party believes it is reasonably necessary or desirable to obtain an effective remedy, upon written request the other Party agrees to be joined as a party to the suit or action but shall be under no obligation to participate except to the extent that such participation is required as the result of its being a named party to the suit or action. At the Initiating Party's written request, the other Party shall offer reasonable assistance to the Initiating Party in connection therewith at no charge to the Initiating Party except for reimbursement of reasonable out-of-pocket expenses incurred by the other Party in rendering such assistance. The other Party shall have the right to participate and be represented in any such suit or action by its own counsel at its own expense. + +The Initiating Party may settle, consent judgment or otherwise voluntarily dispose of the suit or action ("Settlement") without the written consent of the other Party but only if such Settlement can be achieved without adversely affecting the other Party (including any of its Patent Rights). If a Settlement could adversely affect the other Party, then the written consent of the other Party would be required, which consent shall not be unreasonably withheld. ***Confidential Treatment Requested*** + +- 45 - + + + + + +12.8 Defense + +If an action for infringement is commenced against either Party, its licensees or its sublicensees related to such Party's conduct of a Work Stream within the scope of an R&D Plan then such Party shall defend such action at its own expense, and the other Party shall assist and cooperate with such Party, at its own expense, to the extent necessary in the defense of such suit. The defending Party shall have the right to settle the suit or consent to an adverse judgment thereto, in its sole discretion, so long as such settlement or adverse judgment does not adversely affect the rights of the other Party and its Affiliates (including any patent rights Controlled by any of them). The defending Party shall assume full responsibility for the payment of any award for damages, or any amount due pursuant to any settlement entered into by it with such Third Party. + +If the manufacture, use, importation, offer for sale or sale of any Products and Services results in any claim, suit or proceeding alleging patent infringement or trade secret misappropriation against FMI or a member of the Roche Group, then such Party shall promptly notify the other Party hereto. The Parties shall cooperate with each other in connection with any such claim, suit or proceeding and shall keep each other reasonably informed of all material developments in connection with any such claim, suit or proceeding. + +If a Third Party asserts that Patent Rights owned by or licensed to it are infringed by the development, manufacture, use, importation, offer for sale or sale of products arising out of this Agreement by a member of the Roche Group, or that its trade secrets were misappropriated in connection with such activity, then Roche shall have the exclusive right and responsibility to resolve any such claim, whether by obtaining a license from such Third Party, by defending against such Third Party's claims or otherwise, and shall be solely responsible for the defense of any such action, any and all costs incurred in connection with such action (including, without limitation, attorneys' and expert fees) and all liabilities incurred in connection therewith. Notwithstanding the above, Roche shall not enter into any settlement of any such claim without the prior written consent of FMI if such settlement would require FMI to be subject to an injunction or to make any monetary payment to Roche or any Third Party, or admit any wrongful conduct by FMI or its Affiliates, or would limit or restrict the claims of or admit any invalidity and/or unenforceability of any of the Patent Rights Controlled by FMI, or have any impact on activities outside the Field. + + 12.9 Common Interest Disclosures + +With regard to any information or opinions disclosed pursuant to this Agreement by one Party to each other regarding intellectual property and/or technology owned by Third Parties, the Parties agree that they have a common legal interest in determining whether, and to what extent, Third Party intellectual property rights may affect the conduct of the Work Streams and/or Products and Services, and have a further common legal interest in defending against any actual or prospective Third Party claims based on allegations of misuse or infringement of intellectual property rights relating to the conduct of the Work Streams and/or Products and Services. Accordingly, the Parties agree that all such information and materials obtained by FMI and Roche from each other will be used solely for purposes of the Parties' common legal interests with respect to the conduct of the Agreement. All information and materials will be treated as protected by the attorney-client privilege, the work product privilege, and any other privilege or - 46 - + + + + + +immunity that may otherwise be applicable. By sharing any such information and materials, neither Party intends to waive or limit any privilege or immunity that may apply to the shared information and materials. Neither Party shall have the authority to waive any privilege or immunity on behalf of the other Party without such other Party's prior written consent, nor shall the waiver of privilege or immunity resulting from the conduct of one Party be deemed to apply against any other Party. + + 13. Representations and Warranties + +13.1 Mutual Representations and Warranties + +FMI and Roche each represent and warrant that: + +(a) it has all requisite power and authority to enter into and perform its obligations under this Agreement; + +(b) it has no outstanding agreement or obligation that is in conflict with any of the provisions of this Agreement or that would preclude its personnel from complying with the provisions hereof; + +(c) all of its employees, officers and consultants have executed agreements requiring assignment to it of all Inventions made by such individuals during the course of and as a result of their participation in activities under this Agreement; + +(d) the execution, delivery and performance of this Agreement by it and all instruments and documents to be delivered by it hereunder: (i) are within its corporate power; (ii) have been duly authorized by all necessary or proper corporate action; (iii) are not in contravention of any provision of any of its formation or governing documents; (iv) to its knowledge, will not violate any law or regulation or any order or decree of any court of governmental instrumentality; (v) will not violate the terms of any indenture, mortgage, deed of trust, lease, agreement, or other instrument to which it is a party or by which it or any of its property is bound, which violation would have an adverse effect on its financial condition or on its ability to perform its obligations hereunder; and (vi) do not require any filing or registration with, or the consent or approval of, any governmental body, agency, authority or any other person, which has not been made or obtained previously (other than approvals required under the HSR Act, Regulatory Approvals required for the sale of Products and filings with Regulatory Authorities required in connection with Products); + +(e) there are no claims or investigations (other than with respect to the Parties' HSR filings), pending or threatened against it or any of its Affiliates, at law or in equity, or before or by any governmental authority relating to the matters contemplated under this Agreement or that would materially adversely affect its ability to perform its obligations hereunder; and + +(f) neither it nor any of its Affiliates is or will be under any obligation to any person, contractual or otherwise, that is conflicting with the terms of this Agreement or that would impede the fulfillment of its obligations hereunder. - 47 - + + + + + +13.2 Activities + +Each Party will perform all activities under this Agreement (i) in a professional manner, (ii) in conformance with the level or care and skill ordinarily exercised by other professional institutions in similar circumstances, and (iii) in compliance with Applicable Law. + + 13.3 Safety Data + +FMI represents and warrants that FMI has disclosed to Roche and will immediately continue to disclose to Roche any relevant safety data relevant to the Work Streams and assays being developed thereunder. + + 13.4 Third Party Patent Rights + +FMI represents and warrants that FMI has no knowledge of the existence of any patent or patent application owned by or licensed to any Third Party that could prevent in the Territory the activities contemplated under this Agreement. + + 13.5 Inventors + +FMI represents and warrants that FMI has obtained the assignment of, or a license under, the FMI Background Patent Rights necessary to grant the licenses granted hereunder. FMI shall obtain the assignment of, or a license under, the FMI Foreground Patent Rights necessary to grant the licenses granted hereunder. + + 13.6 Grants + +FMI represents and warrants that, to the best of FMI's knowledge and belief, FMI has the lawful right to grant Roche and its Affiliates the rights and licenses described in this Agreement. + + 13.7 Ownership and Validity of Know-How + +FMI represents and warrants that FMI's Know-How is legitimately in the possession of FMI and has not been misappropriated from any Third Party. FMI has taken reasonable measures to protect the confidentiality of its Know-How. + + 13.8 Data Protection (Privacy) and Security. + + 13.8.1 Study Data Collection + +FMI shall collect and process Study Data in accordance with the provisions of this Agreement and in compliance with Applicable Law with respect to the processing of Study Data, including but not limited to applicable international, US federal, state and local data protection and data security laws. + + 13.8.2 Data Protection + +To ensure the privacy and security of the health or medical data, including Study Data or other Personal Data related to this Agreement that FMI shall create, acquire, receive, maintain, or transmit as a result of entering into the Agreement, FMI shall implement adequate and reasonable safeguards to prevent the use or disclosure of such information other than as provided for in the Agreement, and to protect the confidentiality, integrity, and availability of such information. In addition, FMI shall protect all such data, in accordance with applicable international Data Protection laws and US federal and state laws and regulations. - 48 - + + + + + + 13.8.3 Privacy + +FMI understands and agrees that the confidentiality, privacy and security requirements contained in this Agreement also apply to any permitted sub-contractors, temporary employees or other third-parties who receive any health or medical data, including Study Data, or other Personal Data, as a result of this Agreement. FMI will ensure that all of these parties enter substantially similar confidentiality, privacy and security agreements with Institution. Copies of such Agreements shall be provided to Roche within seven (7) business days upon written request of Roche. + + 13.8.4 Training + +FMI shall also ensure that its own employees, as well as any permitted subcontractors, temporary employees or other Third Parties who assist FMI in performing activities under the Agreement, and who have access to any health or medical data, including Study Data or other Personal Data, as a result of this Agreement receive appropriate privacy and security training, which shall be updated periodically in accordance with applicable laws, regulations, and industry standard, or as otherwise reasonably requested by Roche. + + 13.8.5 Processing of Study Data + +FMI, its Affiliates and agents shall not collect or process health or medical data, including Study Data or any other Personal Data related to this Agreement, in a manner that involves the transfer of such Personal Data from one jurisdiction to any other jurisdiction (the EEA constituting a single jurisdiction for this purpose), without prior written consent of Roche. + + 13.8.6 Compliance + +FMI undertakes to comply with its obligations (if any) under applicable legislation to notify any supervisory authority of its collection and processing activities under this Agreement and further agrees to take all such steps as Roche may reasonably require from time to time in order to enable Roche to comply with any notification obligation applicable to Roche. + + 13.8.7 Data Collection + +FMI will ensure that it does not collect any health or medical data, including Study Data, relating to individuals other than the categories of data specified in the protocol identified in the applicable Task Order and will collect and process Study Data for the sole purpose of the study identified in the applicable Task Order and not further process such data in any other manner. + + 13.8.8 Disclosure + +FMI will not disclose health or medical data, including Study Data or any other Personal Data related to this Agreement to any Third Party outside of the requirements of this Agreement without the prior permission in writing of Roche, except where such disclosure is required by any applicable law, regulation or supervisory authority, in which case the Institution will, wherever possible, notify Roche prior to complying with any such request for disclosure and shall comply with all reasonable directions of Roche with respect to such disclosure. - 49 - + + + + + + 13.8.9 Document Retention + +FMI will have appropriate procedures in place for the destruction or purging of any medical or health data, including Study Data and any other Personal Data, related to this Agreement when the retention time that applies to the data has been reached. + + 13.8.10 Procedures + +FMI shall ensure that it has appropriate procedures in place to fulfill applicable International Data Protection laws and US federal and state or other legal requirements, should an individual request access to or changes to the health or medical data, including Study Data or any Personal Data related to this Agreement, maintained by Institution. Institution will notify Roche promptly (and in any event within […***…] after receipt) of any communication received from a Data Subject relating to the Data Subject a right to access, modify or correct Study Data and to comply with all instructions of Roche in responding to such communications. + + 13.8.11 Survival + +FMI's obligations to maintain privacy and security over medical or health data, including Study Data and other Personal Data received pursuant to this Agreement, will survive the termination or expiration of this Agreement. + + 13.8.12 Security Breach + +At any time during the processing of Persona Data, FMI shall notify Roche immediately (but no later than […***…] from the date) of any Data Security Breach involving Roche data. FMI shall assist and cooperate with Roche concerning any disclosures to affected parties, government or regulatory agencies and with any other remedial measures requested by Roche or mandated by Applicable Law. + + 13.9 No Other Representations + +EXCEPT AS OTHERWISE PROVIDED IN THIS AGREEMENT AND THE RELATED AGREEMENTS BEING ENTERED INTO BY THE PARTIES AT THIS TIME, THE FOREGOING REPRESENTATIONS AND WARRANTIES ARE IN LIEU OF ALL OTHER REPRESENTATIONS AND WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF PRODUCTS. IN NO EVENT SHALL EITHER FMI OR ROCHE BE LIABLE FOR SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF THIS AGREEMENT BASED ON CONTRACT, TORT OR ANY OTHER LEGAL THEORY. + + 14. Indemnification + +14.1 Indemnification by Roche + +Roche shall indemnify, hold harmless and defend FMI and its directors, officers, employees and agents from and against any and all losses, expenses, cost of defense (including without ***Confidential Treatment Requested*** + +- 50 - + + + + + +limitation attorneys' fees, witness fees, damages, judgments, fines and amounts paid in settlement) and any amounts FMI becomes legally obligated to pay because of any claim or claims against it to the extent that such claim or claims arise out of Roche's and its Affiliates' actions or inactions in connection with activities under this Agreement, except to the extent such losses, expenses, costs and amounts are due to the gross negligence or willful misconduct or failure to act of FMI. + + 14.2 Indemnification by FMI + +FMI shall indemnify, hold harmless and defend Roche and its directors, officers, employees and agents from and against any and all losses, expenses, cost of defense (including without limitation attorneys' fees, witness fees, damages, judgments, fines and amounts paid in settlement) and any amounts Roche becomes legally obligated to pay because of any claim or claims against it to the extent that such claim or claims arise out of FMI's and FMI's Affiliates' actions or inactions in connection with activities under this Agreement, except to the extent that such losses, expenses, costs and amounts are due to the gross negligence or willful misconduct or failure to act of Roche. + + 14.3 Procedure + +In the event of a claim by a Third Party against a Party entitled to indemnification under this Agreement ("Indemnified Party"), the Indemnified Party shall promptly notify the other Party ("Indemnifying Party") in writing of the claim and the Indemnifying Party shall undertake and solely manage and control, at its sole expense, the defense of the claim and its settlement. The Indemnified Party shall cooperate with the Indemnifying Party and may, at its option and expense, be represented in any such action or proceeding by counsel of its choice. The Indemnifying Party shall not be liable for any litigation costs or expenses incurred by the Indemnified Party without the Indemnifying Party's written consent. The Indemnifying Party shall not settle any such claim unless such settlement fully and unconditionally releases the Indemnified Party from all liability relating thereto, unless the Indemnified Party otherwise agrees in writing. + + 15. Liability + +THE FOREGOING REPRESENTATIONS AND WARRANTIES ARE IN LIEU OF ALL OTHER REPRESENTATIONS AND WARRANTIES NOT EXPRESSLY SET FORTH HEREIN. FMI AND ROCHE DISCLAIM ALL OTHER WARRANTIES, WHETHER EXPRESS OR IMPLIED, WITH RESPECT TO EACH OF THEIR RESEARCH, DEVELOPMENT AND COMMERCIALIZATION EFFORTS HEREUNDER, INCLUDING, WITHOUT LIMITATION, WHETHER THE PRODUCTS CAN BE SUCCESSFULLY DEVELOPED OR MARKETED, THE ACCURACY, PERFORMANCE, UTILITY, RELIABILITY, TECHNOLOGICAL OR COMMERCIAL VALUE, COMPREHENSIVENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE WHATSOEVER OF THE PRODUCTS. + + 16. Obligation Not to Disclose Confidential Information + +16.1 Non-Use and Non-Disclosure + +During the Agreement Term and for […***…] thereafter, a Receiving Party shall (i) treat Confidential Information provided by Disclosing Party as it would treat its own information of a similar nature, (ii) take all reasonable precautions not to disclose such Confidential Information ***Confidential Treatment Requested*** + +- 51 - + + + + + +to Third Parties, without the Disclosing Party's prior written consent, and (iii) not use such Confidential Information other than for fulfilling its obligations or exercising its rights under this Agreement. If any Confidential Information is required to be disclosed by the Receiving Party or its Affiliates to comply with a court or administrative order, the Receiving Party or its Affiliates, prior to making such disclosure, shall furnish as much notice as is reasonable under the circumstances to the Disclosing Party to enable it to resist such disclosure. + + 16.2 Permitted Disclosure + +Notwithstanding the obligation of non-use and non-disclosure set forth in Section 16.1, the Parties recognize the need for certain exceptions to this obligation, specifically set forth below, with respect to press releases, patent rights, publications, and certain commercial considerations. + + 16.3 Press Releases + +Following the Effective Date, the Parties will issue a joint press release announcing the existence and selected key terms of this Agreement, in a form substantially similar to the template attached as Appendix 16.3. + +Each Party shall provide the other with a copy of any draft press release related to the activities contemplated by this Agreement at least ten (10) Business Days prior to its intended publication for such other Party's review. The reviewing Party may provide the releasing Party with suggested modification to the draft press release. The releasing Party shall consider, and shall not unreasonably disregard, the reviewing Party's suggestions in issuing its press release. Notwithstanding the foregoing, each Party must comply with its obligations under Section 16.1 and 16.5. + + 16.4 Publications + +During the Agreement Term, the following restrictions shall apply with respect to disclosure by any Party of Confidential Information in any publication or presentation. A Party ("Publishing Party") shall provide the other Party with a copy of any proposed publication or presentation at least […***…] prior to submission for publication so as to provide such other Party with an opportunity to recommend any changes it reasonably believes are necessary to continue to maintain the Confidential Information disclosed by the other Party to the Publishing Party in accordance with the requirements of this Agreement. The incorporation of such recommended changes shall not be unreasonably refused; and if such other Party notifies ("Publishing Notice") the Publishing Party in writing, within […***…] after receipt of the copy of the proposed publication or presentation, that such publication or presentation in its reasonable judgment (i) contains an invention, solely or jointly conceived and/or reduced to practice by the other Party, for which the other Party reasonably desires to obtain patent protection or (ii) could be expected to have a material adverse effect on the commercial value of any Confidential Information disclosed by the other Party to the Publishing Party, the Publishing Party shall prevent such publication or delay such publication for a mutually agreeable period of time. In the case of inventions, a delay shall be for a period reasonably sufficient to permit the timely preparation and filing of a patent application(s) on such invention, and in no event less than [… ***…] from the date of the Publishing Notice. ***Confidential Treatment Requested*** + +- 52 - + + + + + +16.5 Commercial Considerations + +Nothing in this Agreement shall prevent a Party or its Affiliates from disclosing Confidential Information of the other Party to (i) governmental agencies to the extent required or desirable to secure government approval for the development, manufacture or sale of a product in the Territory and (ii) Third Parties acting on behalf of a Party, to the extent reasonably necessary to conduct the activities contemplated by this Agreement provided that such Third Parties are bound by confidentiality obligations with respect to such information that are no less stringent than those included in this Agreement. + + 17. Term and Termination + +17.1 Commencement and Term + +This Agreement shall commence upon the Effective Date and continue for the Agreement Term. + + 17.2 Termination + + 17.2.1 Termination for Breach + +A Party ("Non-Breaching Party") shall have the right to terminate this Agreement on a Work Stream-by-Work Stream basis, or, for Roche, on an Approved Marker or Investigational Marker basis in the case of the CDx Development Program, in the event the other Party ("Breaching Party") is in material breach of any of its material obligations under the applicable Work Stream (or obligations pertaining to an Approved Marker or Investigational Marker program). Failure of FMI to comply materially with Performance Specifications or Quality Standards shall be considered a material breach by FMI. For avoidance of doubt, a Non-Breaching Party shall only be permitted to terminate the Work Stream (or Approved Marker or Investigational Marker program) to which a material breach of a material obligation relates. The Non-Breaching Party shall provide written notice to the Breaching Party, which notice shall identify the breach. Except in the event of a breach that, by its nature, is not amenable to cure, in which case termination may be made effective immediately, the Breaching Party shall have a period of […***…] after such written notice is provided ("Peremptory Notice Period") to cure such breach or, absent withdrawal of the Non-Breaching Party's request for termination, the relevant Work Stream (or Approved Marker or Investigational Marker program) shall terminate; provided that, if the Breaching Party has a bona fide dispute as to whether such breach: (i) occurred, (ii) pertains to a material obligation, or (iii) has been cured, the Breaching Party will so notify the Non-Breaching Party, the relevant Work Stream (or Approved Marker or Investigational Marker program) shall not terminate and the expiration of the Peremptory Notice Period shall be tolled until such dispute is resolved pursuant to Section 19.2. If such dispute is resolved by finding that the Non-Breaching Party is entitled to terminate the relevant Work Stream (or Approved Marker or Investigational Marker program), the Breaching Party may have the remainder of the Peremptory Notice Period to cure such breach. If such breach is not cured within the Peremptory Notice Period, then absent withdrawal of the Non-Breaching Party's request for termination, the relevant Work Stream (or Approved Marker or Investigational Marker program) shall terminate in accordance with the notice from the Non-Breaching Party as of the expiration of the Peremptory Notice Period. + + 17.2.2 Insolvency + +A Party shall have the right to terminate this Agreement, if the other Party incurs an Insolvency Event; provided, however, in the case of any involuntary bankruptcy proceeding, such right to ***Confidential Treatment Requested*** + +- 53 - + + + + + +terminate shall only become effective if the Party that incurs the Insolvency Event consents to the involuntary bankruptcy or such proceeding is not dismissed within […***…] after the filing thereof. + + 17.2.3 Termination by Roche without Cause + +Roche shall have the right to terminate the Agreement in its entirety, or on a Work Stream-by-Work Stream basis, except for the ctDNA Work Stream, upon […***…] prior written notice, without cause. With regard to the CDx Development Program, Roche shall also have the right to terminate, without cause, the development of an Approved Marker and/or an Investigational Marker for inclusion in a CDx Assay, upon […***…] prior written notice; provided however that this right shall expire with respect to each Approved Marker for inclusion in a particular CDx Assay at such time as FMI has completed analytical validation for such Approved Marker. With regard to the Molecular Information Platform Program, Roche shall have the right to terminate without cause either or both of the Sample Profiling or Molecular Information Database Access activities individually. + + 17.2.4 Termination by Roche for Frustration of Purpose + +Roche shall have the right to terminate the ctDNA Platform Development Program upon […***…] prior written notice for frustration of purpose in the event that the Clinical Study for which the ctDNA Assay is being developed is canceled. + + 17.3 Consequences of Termination + + 17.3.1 Termination in General + +Upon any termination of the Agreement, a Work Stream (or Approved Marker or Investigational Marker program), or this Agreement under Section 17.2.2, (i) FMI shall promptly return to Roche unused or remaining Samples that were provided for use in a terminated Work Stream (or related to the relevant Approved Marker or Investigational Marker), or, at Roche's option, securely dispose of all such unused or remaining Samples and provide Roche with a written notice of such disposal, (ii) each Party shall wind-down their activities under the Agreement in a manner that is intended to be expeditious and to mitigate losses arising from non-cancellable expenses and financial commitments to Third Parties, (iii) upon any termination by Roche under Section 17.2.3, or by FMI under Section 17.2.1 or Section 17.2.2, that includes the Immunotherapy Testing Platform Development Work Stream, the obligations in Section 3.2.8 shall terminate, (iv) each Party shall continue to Control its own intellectual property, including Patent Rights and Know-How, and Handle its own Patent Rights, and (v) Joint Patent Rights, if any, shall be handled by Roche subject to the provisions of Section 12.4 and 12.6, and each Party shall have the right to fully exploit such Joint Patent Rights. + +17.3.2 Termination by FMI for Breach by Roche or Roche's Insolvency; Termination by Roche Without Cause or for Frustration of Purpose + +Upon any termination by FMI for breach by Roche under Section 17.2.1, for Roche's Insolvency under Section 17.2.2, by Roche without cause under Section 17.2.3, or by Roche for frustration of purpose under Section 17.2.4: + + (i) The rights and licenses granted by FMI to Roche hereunder shall terminate for the terminated Agreement, or Work Stream, orportion of the Work Stream (as applicable, the "Terminated Matter"), on the effective date of termination; ***Confidential Treatment Requested*** + +- 54 - + + + + + + (ii) All licenses granted by Roche to FMI hereunder pertaining to the Terminated Matter become fully paid up, perpetual andirrevocable; + + + +(iii) Roche shall retain all licenses granted by FMI to Roche pertaining to intellectual property arising from work on the Terminated Matter prior to termination, provided, however, FMI shall be under no obligation to Handle any patent or patent application arising from Terminated Matters and may freely abandon (without offering Roche the right to Handle) or license (but, for clarity, not exclusively license or assign without Roche's consent if Roche retains license rights) such patent or patent application. + + (iv) Within […***…] after the effective date of termination and receipt by Roche of an invoice from FMI, Roche shall pay to FMI thefollowing amounts: + + + +a. In the event of termination of the Molecular Information Platform Program Work Stream, Roche shall pay FMI all [… ***…] that would be owed over the remainder of the Agreement Term, or any […***…], plus any applicable incremental per Sample Profiling Fees for Sample Profiling performed by FMI during the year in which termination occurs that are […***…]; + + + +b. In the event of termination of the Immunotherapy Testing Platform Development Work Stream, (1) for avoidance of doubt, Roche shall pay FMI Roche's share of any FMI Development Costs incurred in connection with the Immunotherapy Testing Platform Development Work Stream as of the effective date of termination that were not previously paid by Roche; (2) (A) if the effective date of termination occurs prior to FMI's completion of the Immuno- Biomarker Discovery Platform, then Roche will pay FMI for the entirety of the FMI Development Costs FMI incurred in connection with FMI's performance of the Immunotherapy Testing Platform Development Work Stream, excluding any portion that was previously paid by Roche, or (B) if the effective date of termination occurs after FMI's commencement of Signature Identification services, then Roche will pay FMI for the entirety of the FMI Development Costs FMI incurred prior to the effective date of termination in connection with any ongoing performance of Signature Identification work by FMI, excluding any portion of such FMI Development Costs that was previously paid by Roche or that is payable by Roche under the foregoing clause (1); and (3) Roche shall pay FMI in accordance with Section 8.3.2 with respect to signatures developed by FMI prior to the effective date of termination. + + c. In the event of termination of the ctDNA Platform Development Program Work Stream, Roche shall have no contractual payment obligation under this Section 17.3.2; provided, however, that Roche shall be obligated to honor payment obligations triggered prior to the effective date of termination; + + + +d. In the event of termination of the CDx Development Program Work Stream: for avoidance of doubt, Roche shall pay any FMI Development Costs in connection with the development of an Investigational Marker as specified by Section 8.5.1 incurred as of the effective date of termination that were not previously paid by Roche and any non-cancellable commitments reasonably incurred by FMI in ***Confidential Treatment Requested*** + +- 55 - + + + + + + + +anticipation of receiving PMA with regard to any Investigational Marker to the extent not re-allocable to FMI's other business activities, including without limitation, all accrued amounts under any individual CDx R&D Plan entered into by the Parties as described in Section 3.4.8 above; (ii) if the effective date of such termination is after FMI has completed analytical validation of any Investigational Marker for inclusion in a CDx Assay, then Roche shall remain obligated to pay a fee for each such terminated Investigational Marker equal to […***…] upon PMA approval; and (iii) the milestone payments specified under Section 8.5.3 shall apply with respect to CDx Assays containing any Approved Marker and/or Investigational Marker; and + + e. In the event of termination of the Agreement in its entirety under 17.2.2, Roche shall pay to FMI all amounts under theforegoing subsections (a) through (d) (inclusive) as applicable, if such fees become payable. + + + +(v) FMI shall retain all rights and remedies available to it under law and equity in connection with breach by Roche under Section 17.2.1 or other termination under Section 17.2.2, Section 17.2.3, or 17.2.4, provided, however, that in the case of termination of the Molecular Information Platform Program under Section 17.2.1 or Section 17.2.3 above, FMI's exclusive remedy (other than for breach of confidentiality under Section 16.1) shall be the accelerated payments specified under Section 17.3.2(iv)a. + +For avoidance of doubt, in the event FMI terminates the Agreement in its entirety due to Roche's Insolvency, all Work Streams and other activities under the Agreement will be deemed to be terminated and all of the applicable effects of termination in this Section 17.3.2 shall apply. + + 17.3.3 Termination by Roche for Breach by FMI or FMI Insolvency + +Upon any termination by Roche for breach by FMI under Section 17.2.1 or FMI's Insolvency, under Section 17.2.2: + + (i) The rights and licenses granted by Roche to FMI under Section 2.1 shall terminate for each terminated Work Stream, on theeffective date of termination, except that the rights granted to FMI under Section 2.1.2 shall survive such termination; + + (ii) All licenses granted by FMI to Roche hereunder pertaining to a terminated Work Stream become fully paid up, perpetual andirrevocable; + + (iii) The […***…] under Section 3.2.10 shall survive termination of the Immunotherapy Testing Platform Development Work Stream; + + (iv) The […***…] under Section 3.3.9 shall survive termination of the ctDNA Platform Development Program Work Stream; + + (v) Within […***…] after the effective date of termination and receipt by Roche of an accounting from FMI, FMI shall pay to Roche any unused Reserved Capacity Fees and Database Access Fees previously paid pursuant to Section 8.2.1.1 or any other unused and pre-paid amounts; ***Confidential Treatment Requested*** + +- 56 - + + + + + + (vi) FMI shall transfer to Roche all FMI Know-How, other than FMI Know-How pertaining to the Molecular Information Platform Program, necessary for Roche to practice the Terminated Matter, solely for the purposes or practicing the Terminated Matter, including any necessary algorithms; and + + (vii) Roche shall retain all rights and remedies available to it under law and equity in connection with such breach by FMI. + +For avoidance of doubt, in the event Roche terminates the Agreement in its entirety due to FMI's Insolvency, all Work Streams and other activities under the Agreement will be deemed to be terminated and all of the applicable effects of termination in this Section 17.3.3 shall apply. + + 17.3.4 Direct License + +Irrespective of anything to the contrary in this Agreement, any existing, permitted sublicense granted by a Party under this Agreement (and any further sublicenses thereunder) shall, upon a termination of the license granted hereunder that pertains to such sublicense, shall terminate; provided that if the licensee Party so requests in writing, the licensor Party shall negotiate with the relevant sublicensee towards the grant of a direct license of rights, provided that such sublicensee is not then in breach of its sublicense agreement with the licensee Party. + + 17.4 Other Obligations + +Termination of this Agreement by a Party, for any reason, shall not release Roche from any obligation to make payments to FMI that are due and payable prior to the effective date of termination. Termination of this Agreement by a Party, for any reason, will release Roche from any obligation to any payments to FMI that would otherwise become due or payable on or after the effective date of termination. + + 17.5 Survival + +In addition to any provisions that expressly survive in accordance with Article 17.3, Article 1 (Definitions, to the extent necessary to interpret the Agreement), Section 3.5.2 (Sample Handling and Disposal, to the extent applicable), Section 10 (Taxes), Section 12.1 (Ownership of Inventions), Section 12.9 (Common Interest Disclosures), Section 13.8.11 (Survival of Privacy and Security Obligations), Article 14 (Indemnification), Article 16 (Obligation Not to Disclose Confidential Information), Section 17.3 (Consequences of Termination), Section 17.5 (Surival), Section 19.1 (Governing Law), and Section 19.3 (Arbitration) shall survive any expiration or termination of this Agreement for any reason. Notwithstanding the foregoing, any provision of this Agreement that is intended by its very nature to survive expiration or termination of this Agreement shall also survive. + + 18. Bankruptcy + +All licenses (and to the extent applicable rights) granted under or pursuant to this Agreement by FMI to Roche are, and shall otherwise be deemed to be, for purposes of Section 365(n) of Title 11, US Code (the "Bankruptcy Code") licenses of rights to "intellectual property" as defined under Section 101(35A) of the Bankruptcy Code. Unless Roche elects to terminate this Agreement, the Parties agree that Roche, as a licensee or sublicensee of such rights under this Agreement, shall retain and may fully exercise all of its rights and elections under the Bankruptcy Code, subject to the continued performance of its obligations under this Agreement. - 57 - + + + + + +19. Miscellaneous + +19.1 Governing Law + +This Agreement shall be governed by and construed in accordance with the laws of New York, US, without reference to its conflict of laws principles, and shall not be governed by the United Nations Convention of International Contracts on the Sale of Goods (the Vienna Convention). + + 19.2 Disputes + +Unless otherwise set forth in this Agreement, in the event of any dispute in connection with this Agreement, such dispute shall be referred to the respective executive officers of the Parties designated below or their designees, for good faith negotiations attempting to resolve the dispute. The designated executive officers are as follows: For FMI: CEO For Roche: Head of Roche Partnering + + 19.3 Arbitration + +Should the Parties fail to agree within […***…] after such dispute has first arisen, it shall be finally settled by arbitration in accordance with the Rules of American Arbitration Association ("AAA") as in force at the time when initiating the arbitration. The tribunal shall consist of three arbitrators. The place of arbitration shall be New York, New York, US. The language to be used shall be English. + + 19.3.1 Arbitrators + +Each Party shall nominate one arbitrator. Should the claimant fail to appoint an arbitrator in the request for arbitration within […***…] of being requested to do so, or if the respondent should fail to appoint an arbitrator in its answer to the request for arbitration within […***…] of being requested to do so, the other Party shall request the AAA to make such appointment. + +The arbitrators nominated by the Parties shall, within […***…] from the appointment of the arbitrator nominated in the answer to the request for arbitration, and after consultation with the Parties, agree and appoint a third arbitrator, who will act as a chairman of the Arbitral Tribunal. Should such procedure not result in an appointment within the […***…] time limit, either Party shall be free to request the AAA to appoint the third arbitrator. + +Where there is more than one claimant and/or more than one respondent, the multiple claimants or respondents shall jointly appoint one arbitrator. + +Any Party-appointed arbitrator or the third arbitrator resigns or ceases to be able to act, a replacement shall be appointed in accordance with the arrangements provided for in this clause. + +The language of the arbitration shall be English. Documents submitted in the arbitration (the originals of which are not in English) shall be submitted together with an English translation. + + 19.3.2 Decisions; Timing of Decisions + +The arbitrators shall render a written opinion setting forth findings of fact and conclusions of law with the reason therefor stated, within no later than […***…] from the date on which the arbitrators were appointed to the dispute. A transcript of the evidence adduced at the arbitration hearing shall be made and, upon request, shall be made available to each Party. ***Confidential Treatment Requested*** + +- 58 - + + + + + +The time periods set forth in the AAA Arbitration Rules shall be followed; provided however that the arbitrators may modify such time periods as reasonably necessary to render a written opinion in accordance with this Section 19.3.2. + +The Arbitrator is empowered to award any remedy allowed by law, including money damages, prejudgment interest and attorneys' fees, and to grant final, complete, interim, or interlocutory relief, including injunctive relief. + +This arbitration agreement does not preclude either Party seeking conservatory or interim measures from any court of competent jurisdiction including, without limitation, the courts having jurisdiction by reason of either Party's domicile. Conservatory or interim measures sought by either Party in any one or more jurisdictions shall not preclude the Arbitral Tribunal granting conservatory or interim measures. Conservatory or interim measures sought by either Party before the Arbitral Tribunal shall not preclude any court of competent jurisdiction granting conservatory or interim measures. + +In the event that any issue shall arise which is not clearly provided for in this Section 19.3, the matter shall be resolved in accordance with the AAA Arbitration Rules. + +Any arbitration proceeding hereunder shall be confidential and the arbitrators shall issue appropriate protective orders to safeguard each Party's Confidential Information. Except as required by law, neither Party shall make (or instruct the arbitrators to make) any public announcement with respect to the proceedings or decision of the arbitrators without prior written consent of the other Party. The existence of any dispute submitted to arbitration, and the award, shall be kept in confidence by the Parties and the arbitrators, except as required in connection with the enforcement of such award or as otherwise required by Applicable Law. + +Notwithstanding anything to the contrary in this Agreement, any and all issues regarding the scope, construction, validity and/or enforceability of any Patent Rights shall be determined in a court of competent jurisdiction under the local patent laws of the jurisdictions having issued the Patent Rights in question. + +Notwithstanding anything to the contrary in this Agreement, any and all issues regarding a breach or alleged breach of a Party's obligations under Article 16 (Obligation Not to Disclose Confidential Information) shall be determined in a court of competent jurisdiction under the laws of New York, with express exclusion of its conflict of laws principles. + + 19.4 Assignment + +Neither Party shall have the right to assign the present Agreement or any part thereof to any Third Party other than Affiliates without the prior written approval of the other Party. + + 19.5 Debarment and Exclusion + + 19.5.1 Past Activities + +Each Party represents and warrants that it has never been debarred under 21 U.S.C. §335a, disqualified under 21 C.F.R. §312.70 or §812.119, sanctioned by a Federal Health Care - 59 - + + + + + +Program (as defined in 42 U.S.C §1320 a-7b(f)), including without limitation the federal Medicare or a state Medicaid program, or debarred, suspended, excluded or otherwise declared ineligible from any other similar Federal or state agency or program. In the event a Party receives notice of debarment, suspension, sanction, exclusion, ineligibility or disqualification under the above-referenced statutes, such Party shall immediately notify the other Party in writing and such other Party shall have the right, but not the obligation, to terminate this Agreement, effective, at such other Party's option, immediately or at a specified future date. + + 19.5.2 Future Activities + +Each Party agrees that, to the best of its knowledge, none of its employees or agents conducting activities on its behalf under the Agreement is currently or will be during the term of this Agreement, debarred under 21 U.S.C. §335a, disqualified under 21 C.F.R. §312.70 or §812.119, sanctioned by a Federal Health Care Program (as defined in 42 U.S.C §1320 a-7b(f)), including without limitation the federal Medicare or a state Medicaid program, or debarred, suspended, excluded or otherwise declared ineligible from any other similar Federal or state agency or program. In the event a Party learns that any such employee or agent becomes so debarred, sanctioned, suspended, excluded or declared ineligible or is the subject of proceedings that may result in such debarment, sanction, suspension, exclusion or ineligibility, it will promptly so notify the other Party and will no longer allow such employee or agent to conduct activities under this Agreement. + + 19.6 Independent Contractor + +No employee or representative of either Party shall have any authority to bind or obligate the other Party to this Agreement for any sum or in any manner whatsoever or to create or impose any contractual or other liability on the other Party without said Party's prior written approval. For all purposes, and not- withstanding any other provision of this Agreement to the contrary, FMI legal relationship to Roche under this Agreement shall be that of independent contractor. + + 19.7 Unenforceable Provisions and Severability + +If any of the provisions of this Agreement are held to be void or unenforceable, then such void or unenforceable provisions shall be replaced by valid and enforceable provisions that will achieve as far as possible the economic business intentions of the Parties. However the remainder of this Agreement will remain in full force and effect, provided that the material interests of the Parties are not affected, i.e. the Parties would presumably have concluded this Agreement without the unenforceable provisions. + + 19.8 Waiver + +The failure by either Party to require strict performance and/or observance of any obligation, term, provision or condition under this Agreement will neither constitute a waiver thereof nor affect in any way the right of the respective Party to require such performance and/or observance. The waiver by either Party of a breach of any obligation, term, provision or condition hereunder shall not constitute a waiver of any subsequent breach thereof or of any other obligation, term, provision or condition. + + 19.9 Appendices + +All Appendices to this Agreement shall form an integral part to this Agreement. - 60 - + + + + + +19.10 Entire Understanding + +This Agreement contains the entire understanding between the Parties hereto with respect to the within subject matter and supersedes any and all prior agreements, understandings and arrangements, whether written or oral. + + 19.11 Amendments + +No amendments of the terms and conditions of this Agreement shall be binding upon either Party hereto unless in writing and signed by both Parties. + + 19.12 Invoices + +All invoices that are required or permitted hereunder shall be in writing and sent by FMI to Roche at the following address or other address as Roche may later provide: + +F. Hoffmann-La Roche Ltd Kreditorenbuchhaltung 4070 Basel Switzerland + + 19.13 Notice + +All notices that are required or permitted hereunder shall be in writing and sufficient if delivered personally, sent by facsimile (and promptly confirmed by personal delivery, registered or certified mail or overnight courier), sent by nationally recognized overnight courier or sent by registered or certified mail, postage prepaid, return receipt requested, addressed as follows: if to FMI, to: Foundation Medicine, Inc. 150 Second Street Cambridge, Massachusetts 02141 Attn: Legal Department Facsimile No.: +1 617 418 2201 + +if to Roche, to: F. Hoffmann-La Roche Ltd Grenzacherstrasse 124 4070 Basel Switzerland Attn: Legal Department Facsimile No.: +41 61 688 13 96 + +and: Hoffmann-La Roche Inc. 150 Clove Road Suite 8 Little Falls, New Jersey 07424 US Attn. Corporate Secretary Facsimile No.: +1 973 890-8433 - 61 - + + + + + +or to such other address as the Party to whom notice is to be given may have furnished to the other Party in writing in accordance herewith. + +[Signature Page Follows] - 62 - + + + + + +IN WITNESS WHEREOF, the Parties have entered into this Agreement as of the Effective Date. Foundation Medicine, Inc. + +/s/ Steven J. Kafka + +Name: Steven J. Kafka + +Title: Chief Operating Officer F. Hoffmann-La Roche Ltd + +/s/ Jason Coloma /s/ Stefan Arnold + +Name: Jason Coloma Name: Stefan Arnold + +Title: Global Head of Venture & Innovation, Roche Partnering Title: Head Legal Pharma Hoffmann-La Roche Inc. + +/s/ John P. Parise + +Name: John P. Parise + +Title: Authorized Signatory + + + + + +Appendix 1.28 + +Excluded Patent Rights + +[…***…]. ***Confidential Treatment Requested*** + +A-1 + + + + + +Appendix 1.57 + +[…***…] ***Confidential Treatment Requested*** + +A-2 + + + + + +Appendix 1.64 + +[…***…] ***Confidential Treatment Requested*** + +A-3 + + + + + +Appendix 3.1.3 Form of Task Order + +TASK ORDER FOR MOLECULAR INFORMATION PLATFORM AGREEMENT + +This [Insert number of Task Order] Task Order is effective as of the last date below ("Task Order # Effective Date. + +TASK: [Insert Task Name] FMI Reference Number: [Insert FMI Reference Number] Roche Contact: [Insert Roche Contact] + +This Task is divided into the following six sections: + + A. Task Activities - Description of the Task Activities to be performed. + + B. Schedule - Task start date, projected end date and checkpoint dates (if any). + + C. Dependencies - Obligations, technology requirements. + + D. Deliverables - Identifiable work product resulting from the Task. + + E. Fee - Fixed price or time & materials rates and payment schedules. + + F. Special Terms - Terms applicable to this specific effort not addressed by this Agreement. + + A. Task Activities + +[Describe Task Activities to be provided] + + B. Schedule + +[Describe schedule for Task Activities to be provided and specify the duration of the Task Activities] + + C. Dependencies + +[Describe dependencies as relating to the Task Activities] + + D. Deliverables + +[Describe deliverables as relating to the Task Activities] + + E. Fee + +[Describe payment schedule and form of payment for the Task Activities] + + F. Special Terms + +[Describe any special terms for the Task Activities] + +Signatures of Project Managers + + + + + +FMI ROCHE + +By: By: + +Name: Name: + +Title: Title: + +Date: Date: A-5 + + + + + +Appendix 3.1.6 + +[…***…] ***Confidential Treatment Requested*** + +A-6 + + + + + +Appendix 3.2.4 Excluded Contracts + +[…***…] ***Confidential Treatment Requested*** + +A-7 + + + + + +Appendix 3.5.1 + +FMI Specimen Requirements + + + + + + + + + + + + + + + + + +Appendix 16.3 + +Form of Press Release A-9 \ No newline at end of file diff --git a/full_contract_txt/FTENETWORKS,INC_02_18_2016-EX-99.4-STRATEGIC ALLIANCE AGREEMENT.txt b/full_contract_txt/FTENETWORKS,INC_02_18_2016-EX-99.4-STRATEGIC ALLIANCE AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..486fa8cdb9d9235053cd672b5dfd7f2ee10be3a0 --- /dev/null +++ b/full_contract_txt/FTENETWORKS,INC_02_18_2016-EX-99.4-STRATEGIC ALLIANCE AGREEMENT.txt @@ -0,0 +1,143 @@ +Exhibit 99.4 STRATEGIC ALLIANCE AGREEMENT "EDGE-FTE" THIS STRATEGIC ALLIANCE AGREEMENT (the "Agreement"), made effective this 17t h day of February 2016, through February 16, 2019 (the "Initial Term") is entered into by and between EDGE Communications Solutions, LLC, with its principal place of business at 6505 Windcrest Drive, Suite 200, Plano, TX 75024 (hereinafter referred to as "EDGE"), and FTE Networks, Inc. with its principal place of business at 999 Vanderbilt Beach Road, Suite 601, Naples, FL 34108 (hereinafter referred to as "FTE" or "Subcontractor") sets forth the terms and conditions by which FTE will supply labor, materials, equipment, supervision and/or services for FTE's scope of work. FTE's work shall be identified in a purchase order, which if issued, will be issued subject to the terms of this Agreement ("Purchase Order"). Each Purchase Order, taken together with the terms and conditions of this Agreement, shall constitute a separate agreement between the parties and shall be considered independent of any other agreements between the parties that incorporate the terms and conditions of the Agreement. FTE agrees to perform its scope of work, in accordance with the terms and conditions of this in accordance with the terms and conditions of the respective issued Purchase Order(s). The Work, as defined below, is a portion of the services to be provided by for a communications service provider Mediacom, LLC (the "Customer"). 1. TERMS A. This Agreement shall remain in effect for the duration of the Initial Term, unless earlier terminated pursuant to the provision entitled "Termination of Agreement". After the Initial Term, this Agreement shall continue on a month to month basis until terminated by either party upon thirty (30) days prior written notice to the other setting forth the effective date of such termination. The termination of any Purchase Order shall not affect the obligations of either party to the other party pursuant to any other Purchase Order or to this Agreement. The termination of this Agreement shall terminate the obligations of either party to the other party pursuant to any Purchase Order and those obligations pursuant to this Agreement, except as to obligations that are identified herein or in a terminated Purchase Order as surviving termination. B. Should the Agreement expire during the period of performance, all remaining Work of each Purchase Order will be completed under the terms of the Agreement then in effect on the date of award for each respective Purchase Order, unless modified in writing by mutual consent of the parties. C. Prior to performing or providing the labor, materials, equipment and services required to complete the work described in a Purchase Order, if any, (the "Work"), Subcontractor must have a properly executed Agreement with EDGE, complied with all terms and conditions therein, including have submitted the required proofs of insurance. EDGE shall receive authorization from the Customer to approve Subcontractor as an approved vendor and to approve the Work terms and conditions of this Agreement if required to do so under Edge's contract with the Customer. + +STRATEGIC ALLIANCE AGREEMENT "EDGE-FTE" Page 1 + + + + + + + + 2. SCOPE OF WORK A. Subcontractor shall perform work for EDGE referred to as "Route Feasibility & Site Acquisition," "Materials Management," "OSP Construction," and "Other Work" as outlined in the attached Exhibits A, B, C and D and as described and set forth in Purchase Orders. B. Descriptions of the Work to be performed by Subcontractor for EDGE shall be listed in a Purchase Order. EDGE engages Subcontractor to furnish the Work described in the Purchase Order. All Work under any Purchase Order shall be performed in a professional manner and in accordance with the applicable specifications and drawings. Purchase Orders, shall be issued and administered as set forth in Section 3 below. C. Unless otherwise provided in the Purchase Order, the Contractor shall provide and pay for materials, and other facilities and services necessary for proper execution and completion of the Work, whether temporary or permanent and whether or not incorporated or to be incorporated in the Work. 3. DISBURSEMENT OF PURCHASE ORDER A. Issuance of Work under this Agreement may be made from time to time by the issuance of Purchase Orders to Subcontractor. Purchase Orders, if any, shall reference and incorporate the terms and conditions of the Agreement which shall apply to all Work performed under the Purchase Order. B. Nonexclusive Rights. This Agreement is an as-ordered agreement between EDGE and Subcontractor, anticipating the potential but not promised issuance of Purchase Orders for specific work in amounts in excess of $20MM. 4. COMPENSATION & PAYMENTS A. All Work shall be performed on the basis of certain agreed upon prices specified in the related Exhibit or individual Purchase Order once accepted by Subcontractor. B. Payment. EDGE shall pay Subcontractor for Work completed in accordance with the related Exhibit or individual Purchase Order once accepted by Subcontractor. C. This Agreement shall not be construed as a "Pay When Paid" contract. EDGE's obligation to pay Subcontractor under this Agreement shall not be predicated upon the Customer approving or paying EDGE for the Work. D. Release and Waiver of Liens. Subcontractor will pay for all services, equipment, material and labor used under this Agreement and will keep EDGE' and Customer's property and work sites free of all claims or liens. + +STRATEGIC ALLIANCE AGREEMENT "EDGE-FTE" Page 2 + + + + + + + + (1) If Subcontractor fails to make payments to subcontractors, materialmen, or suppliers, of any tier, including but not limited to suppliers of labor, material, equipment or services or to union benefits funds (hereinafter "Lower-tier Subcontractors"), its employees or laborers in the performance of the Work, EDGE shall have the right to deduct or temporarily withhold out of payments due or to become due to Subcontractor, reasonable amounts to satisfy any claims, bonds, or liens against the Work site, to issue joint checks to (i) Subcontractor and (ii) its Lower-tier Subcontractors, employees or laborers, and any potential bond or lien claimant, as applicable, or to pay such claimant(s) to protect EDGE from any and all loss, damage and expense (including attorneys' fees) arising out of or related to a claim or lien by such claimant (2) Subcontractor agrees to indemnify and defend EDGE from and against any lien claims and to discharge any lien or furnish an indemnity bond equal to the lien amount (or any greater amount required by law) within ten (10) days notice from EDGE of the presence of any lien. E. Acceptance of any payment by Subcontractor shall not constitute a waiver of claims by Subcontractor except those previously made in writing and identified by Subcontractor as settled at the time of final invoice. 5. INDEPENDENT SUBCONTRACTOR RELATIONSHIP Nothing in this Agreement shall cause Subcontractor in any way to be construed as a partner or joint venture with, or an employee of, EDGE in connection with or arising from Subcontractor's rendering of Work to EDGE pursuant to this Agreement. EDGE retains Subcontractor only for the purposes and to the extent as set forth in this Agreement, and Subcontractor's relation to EDGE during the term of this Agreement shall be that of an independent contractor and nothing herein shall create or imply any other or different relationship. Subcontractor acknowledges that: (a) nothing herein constitutes the exercise by EDGE of control or direction over the manner or method by which Subcontractor will perform the Work, (b) Subcontractor is solely responsible for the withholding and payment of all federal, state and local income, social security and unemployment taxes, salaries, and other payments required to be made by it from funds received from EDGE hereunder, and (c) that EDGE is not required to and will not provide any worker's compensation or other insurance coverage of any nature, or any other unemployment, medical, dental, welfare or pension benefits to Subcontractor or any of its employees, associates or subcontractors. In addition, Subcontractor shall exercise full control of and supervision over its employees. Subcontractor acknowledges that its personnel (if any) performing Work are agents, employees or subcontractors of Subcontractor and are not employees or agents of EDGE. 6. SUBCONTRACTING A. Subcontractor shall be permitted to subcontract any part of the Work without the prior written notification and consent of EDGE. However, Subcontractor will follow subcontracting requirements and processes of EDGE and provide joint access to subcontractor database and information concerning quality control. All Work performed by a Lower-tier Subcontractor shall be deemed Work performed by Subcontractor. Subcontractor agrees not to hire any Lower-tier Subcontractor to whose employment EDGE reasonably objects. + +STRATEGIC ALLIANCE AGREEMENT "EDGE-FTE" Page 3 + + + + + + + + B. If the Work of any Lower-tier Subcontractor is unsatisfactory or unnecessarily delayed, or the Lower-tier Subcontractor violates any of the provisions of this Agreement, EDGE may request Subcontractor to terminate such Lower-tier Subcontractor and Subcontractor shall immediately terminate the agreement with its Lower-tier Subcontractors without any liability to EDGE whatsoever. Additionally, Subcontractor shall, at its cost, properly complete the Work within the required time or arrange for a capable subcontractor, approved by EDGE, to do so. 7. MODIFICATIONS AND CHANGES TO THE SCOPE OF WORK A. EDGE and Subcontractor, without invalidating this Agreement, may agree to changes in the Work consisting of additions, deletions, or modifications ("Change Order"), pursuant to a completed written change order documented by the parties. Such Change Order shall set forth any changes to the applicable Purchase Order and the price and time adjusted accordingly if any. In connection with the Change Order, EDGE will issue to Subcontractor a subsequent Purchase Order identifying any agreed upon change in the Work price and/or time. B. All modifications to the terms of this Agreement shall be by written Amendment signed by both parties or otherwise documented by the parties. 8. INSPECTION OF WORK As set forth in the Exhibit, EDGE shall have the opportunity to review and inspect all elements of the Work in a reasonable manner. EDGE shall have the right to require repair or replacement of any Work which is defective or not performed in accordance with the Purchase Order or deviates from other requirements of this Agreement, provided Subcontractor shall have until acceptance to complete such repair or replacement. Subcontractor shall be solely responsible for all construction means, methods, techniques, procedures and safety and security programs in connection with the performance of the Work. 9. INSURANCE A. Subcontractor shall obtain at its own cost and expense and maintain the insurance in full force and effect during the term of the Agreement as required herein. A copy of the (i) certificate(s) of insurance and (ii) endorsements, acceptable to EDGE, shall be submitted to EDGE prior to commencement of any Work and renewals or replacements of such certificates shall be so delivered at least 30 days prior to the expiration or termination of each such policy. A copy of the insurance policies shall promptly be made available to EDGE upon EDGE' request. Subcontractor expressly acknowledges while EDGE retains the right to review the insurance provided by Subcontractor and' Lower-tier Subcontractors, EDGE is not obligated to perform such review. In addition, EDGE exercise of such right is for EDGE' benefit alone and shall confer no rights to Subcontractor or to any third party. EDGE's acceptance of or failure to object to the submitted documents does not constitute approval of coverage that is not in compliance with this Agreement or as acceptance or affirmation of the adequacy or applicability of such insurance. + +STRATEGIC ALLIANCE AGREEMENT "EDGE-FTE" Page 4 + + + + + + + + (1) Commercial General Liability Insurance providing the limits of coverage written on an occurrence basis, in no event less than $1,000,000 combined single limit and $2,000,000 in the aggregate for personal and bodily injury and death arising therefrom and Broad Form property damage arising out of any one occurrence in connection with the Work or any part thereof, which insurance shall include coverage with the same minimum limits for contractual liability and completed operations liability. General Liability and Umbrella/Excess Liability policies must have "per location or per project" aggregates. (2) Motor Vehicle Insurance covering bodily injury, death of a person or property damage arising out of the ownership, maintenance or use of any motor vehicles in an amount not less than $1,000,000 combined single limit for personal and bodily injury and death. (3) Workers' Compensation Insurance as required by state law where the Work is performed. Employer Liability insurance with limits of at least $1,000,000 for each occurrence. (4) Umbrella/Excess Liability with limits of not less than $5,000,000 in excess of all the above-referenced Commercial General Liability, Employer's Liability and Business Auto Liability, except the following Subcontractor classifications will have limits of not less than the following: HVAC $2,000,000, Landscaping and Fencing $1,000,000. Such Umbrella/Excess Liability policies shall follow form to the terms and conditions of the underlying coverages and shall include a drop down feature in the event any underlying limits are exhausted. (5) EDGE and Mediacom, LLC shall be named as an additional insured. (6) All insurance must be written on an "occurrence" basis. 10. TIME AND PROGRESS OF WORK A. Subcontractor shall commence Work on the date(s) stipulated on each Purchase Order for each project. Subcontractor shall carry the Work forward expeditiously according to the work schedule and with adequate forces to achieve final completion of the Work identified on the Purchase Order. B. No extension of performance time for any Work will be accepted without the consent of EDGE, which consent shall not be unreasonably withheld. 11. TERMINATION OF AGREEMENT A. RIGHT TO CURE/TERMINATION FOR SUBCONTRACTOR'S DEFAULT After fifteen (15) days prior written notice to Subcontractor to cure, or additional time as may be reasonably required by EDGE to cure the event of default, EDGE may terminate this Agreement, or any one or more awarded Purchase Orders and take control of the Work for such terminated Purchase Orders, including any or all materials for the Work, and may proceed with the completion of the Work as contemplated by this Agreement by whatever method deemed expedient by EDGE upon the occurrence of any of the following events, which shall be deemed events of a default by Subcontractor hereunder: + +STRATEGIC ALLIANCE AGREEMENT "EDGE-FTE" Page 5 + + + + + + + + 1) Subcontractor fails to supply a sufficient number of skilled workers or suitable materials or equipment for performance of the Work; 2) Subcontractor fails to make payments to its Lower-tier Subcontractors or employees or laborers for labor, material or equipment; 3) Subcontractor disregards laws, ordinances, rules, regulations or orders of any public authority; 4) Any Lower-tier Subcontractor files a (i) notice of intention to file a construction or mechanic's lien, (ii) mechanic's lien, or (iii) construction lien, and such filing is not removed by Subcontractor within three (3) days after the period required by this Agreement; 5) Subcontractor makes a general assignment for the benefit of its creditors, a receiver or liquidator shall be appointed for Subcontractor or for any of its property, or Subcontractor or its creditors initiate bankruptcy proceedings (11 U.S.C.A.) with respect to Subcontractor; or 6) Subcontractor otherwise violates any provision of this Agreement. B. REMEDIES FOR SUBCONTRACTOR'S DEFAULT The cost of completion by EDGE in the event of a termination based on the occurrence of any of the conditions specified in Section 11(A) above shall be deducted from the unpaid balance, if any, then due Subcontractor under the Agreement. 12. SUSPENSION OF WORK EDGE shall have the right to suspend the Work in progress for a reasonable time at the direction of Customer. Subcontractor shall resume performance of the Work at EDGE' direction. Subcontractor may be entitled to additional compensation or damages as a consequence of this suspension. 13. INDEMNIFICATION A. Subcontractor shall indemnify, defend and hold harmless EDGE and Customer and both of their subsidiaries, directors, shareholders, partners, principals (disclosed or undisclosed), employees, agents and representatives (hereinafter the "Indemnitees") from and against any and all claims, demands, damages, actions, causes of action, suits, losses, judgments, obligations, and any liabilities, costs and expenses, including but not limited to, investigative and repair costs, attorney fees and costs, and consultant's fees and costs (collective, "Claims") arising out of or in connection with the Work performed, materials furnished, or services provided or omitted under this Agreement by Subcontractor or its agents + +STRATEGIC ALLIANCE AGREEMENT "EDGE-FTE" Page 6 + + + + + + + + B. These obligations to defend and indemnify shall not limit, or be limited by, the defense and/or additional insured obligations of the Subcontractor's insurance carrier(s). C. The obligations of this Section 13 shall survive termination of this Agreement. 14. DUE ORGANIZATION Subcontractor certifies that it is duly organized, existing and in good standing under the laws of its state of formation, and is duly qualified as necessary and is in good standing with respect to all jurisdictions in which it is required to be so qualified to do business. 15. TAXES Fees are inclusive of all taxes and similar assessments, levies and government-imposed obligations with respect to income derived from Subcontractor's performance of the Work ("Taxes"). All Taxes shall be the obligation of and be paid by Subcontractor. 16. PERMITS, COMPLIANCE WITH LAWS AND OTHER AGREEMENTS Subcontractor shall obtain and maintain all licenses, permits or certificates (collectively "Licenses") required by any applicable law in connection with Subcontractor's performance of Work hereunder. Subcontractor represents and warrants to EDGE that Subcontractor's performance of this Agreement will not violate any other employment, services, confidentiality, consulting or other agreement to which Subcontractor is a party or by which it may be bound. 17. WARRANTY A. Subcontractor warrants to EDGE that the Work will be performed with promptness and diligence and shall be executed in a quality manner consistent with workmanship standards in the particular trades involved. B. EDGE may accept any nonconforming Work instead of requiring its removal and correction upon the condition that Subcontractor shall pay EDGE an appropriate amount for damages and compensation as is mutually agreed upon by EDGE and Subcontractor. Warranty is not waived under such conditions. C. If within one (1) year from the date of completion of Work acceptance, or within one (1) year from the completion of all other work or services and acceptance by EDGE (or within any longer materials warranty period as set forth above), any defects exists or arise, then in each case upon receipt of notice of such defect, Subcontractor shall (unless EDGE chooses another remedy) promptly cause such defect(s) to be repaired or remedied at Subcontractor's sole cost and expense, including but not limited to the costs of transportation, uncovering, removal, disposal, replacement, correction, installation and covering. Subcontractor shall commence or cause the commencement of repairs immediately upon receipt of notice from EDGE and thereafter diligently pursue same to completion or cause the same to be diligently pursued to completion. EDGE shall have the right without prejudice to any other rights or remedies available to it, (i) to make such repairs and offset the cost thereof against any amounts owed to be paid by EDGE to Subcontractor or invoice Subcontractor therefore which invoice shall be paid net 30 days or (ii) require Subcontractor to refund the price of the Work not meeting the warranties. Subcontractor will extend the warranty period if Subcontractor has been grossly negligent in the performance of any Work under this Agreement. Notwithstanding anything to the contrary contained in this Agreement, Subcontractor shall not be liable or responsible for any defect in any materials used by Subcontractor if such defect was not due to Subcontractor's acts or omissions. + +STRATEGIC ALLIANCE AGREEMENT "EDGE-FTE" Page 7 + + + + + + + + D. These warranties extend to the future performance of the materials and shall continue for the longer of (a) the warranty period applicable to EDGE' sales to Customer of the material or of products which incorporate the material, (b) one year after the material is accepted by EDGE or (c) such greater period as may be specified elsewhere in this Agreement. Repaired and replacement material shall be warranted as set forth above in this clause. 18. PROTECTION OF PERSONS AND PROPERTY A. Subcontractor represents and warrants (i) that Subcontractor has experience in the type of Work to be performed and in the occupational safety and health practices that are required for that type of work; (ii) that Subcontractor's employees are properly trained and equipped to perform the Work; (iii) that Subcontractor is aware of the risks inherent in performing such Work and Subcontractor expressly assumes the risk of loss or injury that may result from the Work. B. Subcontractor shall comply with all applicable laws (including, without limitation the Federal Occupational Safety and Health Act, Hazardous Communication Requirements, and all applicable environmental protection laws, rules, regulations and ordinances), ordinances, rules, regulations and lawful orders of any public authority having jurisdiction for the safety of persons or property or to protect them from damage, injury or loss. Subcontractor shall comply with all occupational safety and health requirements, including such related publications (not included; but incorporated herein by reference): · National Electrical Code Handbook, most recent edition. · Occupational Safety and Health Administration Handbook. · National Electrical Safety Code, most recent edition. · All System pole attachment agreements. · Applicable utility practices of states named, General Order #95 and General Order #128. C. Without limitation of the Subcontractor's obligations regarding safety and protection, Subcontractor shall: + +STRATEGIC ALLIANCE AGREEMENT "EDGE-FTE" Page 8 + + + + + + + + 1) Confine operations at the site to areas permitted by law, ordinances, permits, this Agreement and the Purchase Orders; 2) erect and maintain, as required by existing conditions and performance of the Work, safeguards for safety and protection, including posting danger signs and other warnings against hazards, promulgating safety regulations and notifying owners and users of adjacent sites and utilities; 3) not unreasonably encumber the site with materials or equipment or load or permit any part of the construction or site to be loaded so as to endanger its safety; 4) not bring hazardous materials onto the site without prior written authorization by EDGE; 5) exercise utmost care and carry on its activities under supervision of properly qualified personnel, when use or storage of explosives or other hazardous materials or equipment or unusual methods are necessary for execution of the Work; and 6) dispose of any hazardous materials in accordance with applicable law. D. Without limitation of Subcontractor's obligation under this Agreement, the Subcontractor shall indemnify EDGE as identified in Section 13 for any Claims caused by hazardous materials. 19. CLEAN UP Subcontractor shall at all times keep the Work premises free from accumulations of waste material, rubbish, and any other debris resulting from the Work. On an ongoing basis as the Work progresses, and at the completion of the Work, Subcontractor shall restore to essentially its former condition, and to the satisfaction of EDGE, all aspects of the Work site and shall remove all waste and excess materials, tools, and equipment resulting from or used in the Work and legally dispose thereof. All costs and expenses of any type for cleanup, restoration, and removal noted above will be borne by Subcontractor at no cost to EDGE. If Subcontractor fails in its duties under this clause, EDGE may upon notice to Subcontractor perform the necessary clean up and deduct the costs thereof from any amounts due or to become due to Subcontractor or invoice Subcontractor therefore, which invoice shall be paid net 30 days. Manholes, cable vaults, and central office Work areas will be cleared of all litter by Subcontractor on a daily basis where Work is being performed. 20. NOTICE OF MATERIAL DEFECTS Subcontractor agrees to promptly notify EDGE upon learning of any material defect, misstatement or omission in rendering any Work. + +STRATEGIC ALLIANCE AGREEMENT "EDGE-FTE" Page 9 + + + + + + + + 21. WAIVER The waiver by either party of any breach of this Agreement by the other party in a particular instance shall not operate as a waiver of subsequent breaches of the same or different kind. The failure of either party to exercise any rights under this Agreement in a particular instance shall not operate as a waiver of the party's right to exercise the same or different rights in subsequent instances. 22. NOTICES A. Any written notice or demand which under the terms of this Agreement or under any statute must or may be given or made by EDGE or Subcontractor shall be in writing and addressed to the respective parties as stated in this Agreement. Notice shall be sent by certified, registered or express mail, other overnight delivery service, or shall be hand delivered. Written notice by facsimile shall satisfy the notice requirements of this Agreement where the individual to whom the facsimile is addressed acknowledges receipt of such notice by return facsimile or other means as provided in this Section. The addresses below may be changed at any time by giving prior written notice as above provided. TO: TO: EDGE Communications Solutions, LLC FTE Networks, Inc. Attn: Mark Miller, EVP - Operations Attn: General Counsel 6505 Windcrest Drive 999 Vanderbilt Beach Blvd Suite 200 Suite 601 Plano, TX 75024 Naples, FL 34108 Such notice shall be deemed to have been given or made when actually received or seventy-two (72) hours after being sent as specified above, whichever occurs first. 23. ASSIGNMENT Subcontractor shall not assign any right or interest under this Agreement (excepting monies due, or to become due) or delegate or subcontract any Work or other obligation to be performed or owed under this Agreement without prior consent of EDGE. Notwithstanding, Subcontractor may delegate or assign Work under this Agreement to a subsidiary operating entity. All Work performed by Subcontractor's Lower- tier Subcontractors shall be deemed Work performed by Subcontractor. 24. BINDING EFFECT This Agreement shall bind and inure to the benefit of the parties hereto and their respective heirs, legal representatives, successors and permitted assigns. + +STRATEGIC ALLIANCE AGREEMENT "EDGE-FTE" Page 10 + + + + + + + + 25. CHOICE OF LAW/FORUM The construction, interpretation, and performance of this Agreement and all transactions under it shall be governed by the laws of the State of Texas, irrespective of its conflict of law principles. Subcontractor and EDGE shall not be obligated to resolve by arbitration any claim or dispute related to the Agreement. It is mandatory that any controversy or claim arising out of or relating to the Agreement or the breach thereof shall be subject to the jurisdiction of the State of Texas and the venue shall be exclusively in Collin County, Texas for resolution. 26. TEXAS ALTERNATIVE DISPUTE RESOLUTION All claims, disputes and other matters in question arising out of or relating to this subcontract with a breach thereof, except for claims which have been waived by the making or acceptance of final payment, shall be decided by mediation or non-binding arbitration pursuant to the Texas Arbitration Dispute Resolution Act, (Texas Practice and Remedies Code, Chapter 154), and in accordance with the construction industry rules then in effect unless the parties mutually agree otherwise. Each party shall pay its own legal and other costs relating to the mediation or the non- binding arbitration regardless of the outcome of the mediation or the non-binding arbitration. 27. LEGAL JURISDICTION/ VENUE The Parties: (a) consent to the exclusive venue the State of Texas, Collin County, in any action arising out of or relating to this Agreement including the jurisdiction and venue in connection with Paragraph 26 : TEXAS ALTERNATIVE DISPUTE RESOLUTION ACT; (b) waive any objection they might have to jurisdiction or venue of such forums or that the forum is inconvenient; and (c) agree not to bring any such action in any other jurisdiction or venue to which either party might be entitled by domicile or otherwise. 28. ATTORNEY'S FEES In the event that a dispute arises with respect to this Agreement, the party prevailing in such dispute shall be entitled to recover all expenses, including, without limitation, reasonable attorneys' fees and expenses, incurred in ascertaining such party's rights under this Agreement, whether or not it was necessary for such party to institute suit. 29. NUMBER AND GENDER Whenever the singular number is used in this Agreement and when required by the context, the same shall include the plural. The masculine gender shall include the feminine and neuter genders, and the word "person" shall include a corporation, firm, partnership, or other form of association. + +STRATEGIC ALLIANCE AGREEMENT "EDGE-FTE" Page 11 + + + + + + + + 30. ENTIRE AGREEMENT; INCONSISTENCIES A. This Agreement shall incorporate the typed or written provisions of EDGE' Purchase Orders issued pursuant to this Agreement and shall constitute the entire agreement between the parties with respect to the subject matter of this Agreement and shall not be modified or rescinded except by a writing signed by Subcontractor and EDGE. All references in these terms and conditions to this Agreement or to Work, services, material, equipment, products, software, or information furnished under, in performance of, pursuant to, or in contemplation of this Agreement shall also apply to any Purchase Orders or Amendments issued pursuant to this Agreement. All provisions on Subcontractor's forms shall be deemed deleted. Additional or different terms inserted in this Agreement by Subcontractor, or deletions thereto, whether by alterations, addenda, or otherwise, shall be of no force and effect, unless expressly consented to by EDGE in writing. The provisions of this Agreement supersede all contemporaneous oral agreements and all prior oral and written quotations, communications, agreements, and understandings of the parties with respect to the subject matter of this Agreement. B. The documents referenced in this Agreement are complementary, and what is called for by any one shall be as binding as if called for by all. The intention of the Agreements, Exhibits, and Purchase Order (collectively "Contract Documents") is to include all labor, materials, supervision, equipment, transportation and expense necessary for the proper execution of the Work; performance by Subcontractor shall be required to the extent consistent with the Contract Documents to produce the intended results. If a conflict or inconsistency exists between the provisions of this Agreement, the pre-printed terms and conditions on either side of the Purchase Order, any other document, the order of precedence to resolve the conflict or inconsistency is as follows: (a) the Agreement; (b) Exhibits to the Agreement; (c) Purchase Orders; and (d) drawings and specifications. In the event of an irreconcilable conflict, discrepancy, error, or omission, the provision imposing the greater duty on Subcontractor shall apply. Materials or work described in words that have a well-known technical or trade meaning shall be held to refer to such recognized standards. 31. SEVERABILITY If any provision of this Agreement is illegal or unenforceable, its invalidity shall not affect the other provision of this Agreement that can be given effect without the invalid provision. If any provision of this Agreement does not comply with any law, ordinance or regulation, such provision to the extent possible shall be interpreted in such a manner to comply with such law, ordinance or regulation, or if such interpretation is not possible, it shall be deemed to satisfy the minimum requirements thereof. All provisions required by law shall be deemed incorporated herein by reference. + +STRATEGIC ALLIANCE AGREEMENT "EDGE-FTE" Page 12 + + + + + + + + 32. AMENDMENT This Agreement may be amended or modified only by a written instrument executed by both EDGE and Subcontractor. 33. RIGHT OF REPLACEMENT EDGE may, upon reasonable request, require Subcontractor to replace any personnel, including a project manager, deployed by Subcontractor under the terms of this Agreement. Subcontractor will replace any personnel promptly after request from EDGE with an employee of Subcontractor reasonably acceptable to EDGE. 34. NON-SOLICITATION Subcontractor, during the term of this Agreement and for a period of one year thereafter, shall not, directly or indirectly, for itself or on behalf of or in conjunction with any other person, partnership, corporation, business or organization, solicit, hire, contract with or engage the employment of an employee of EDGE with whom Subcontractor or its personnel have contact as a result of Subcontractor's performance of this Agreement, unless Subcontractor (i) obtains the written consent of EDGE, as applicable, and (ii) pays EDGE as applicable a fee to be mutually agreed upon. In the event Subcontractor directly employs or contracts with an employee of EDGE without the consent of EDGE, Subcontractor shall pay as liquidated damages two times the then monthly salary of the employee for a three-month period of time. + +STRATEGIC ALLIANCE AGREEMENT "EDGE-FTE" Page 13 + + + + + + + + 35. DOCUMENT OWNERSHIP AND CONFIDENTIALITY AND USE OF INFORMATION Each party may make available ("Disclosing Party") to the other ("Receiving Party") access to certain information whether of a technical, business or other nature, including without limitation trade secrets, know-how and information relating to the technology, Customers, business plans, promotional and marketing activities, finances and other business affairs of such Party (collectively, "Confidential Information"). So long as and to the extent that Confidential Information is clearly and identifiably marked "Confidential" or "Proprietary" (if in tangible form) or is not generally available to the public from other sources, each Party shall safeguard such Confidential Information in the manner in which it safeguards its own confidential information, and shall not disclose Confidential Information to its employees, Lower-tier Subcontractors and agents, except to the extent necessary to enable it to fulfill its obligations under this Agreement. The Parties obligations set forth in this Section shall not apply with respect to any portion of the Confidential Information that the Receiving Party can document by competent proof that such portion: (a) was in public domain at the time it was communicated to the Receiving Party by the Disclosing Party; (b) entered the public domain through no fault of the Receiving Party, subsequent to the time it was communicated to the Receiving Party by the Disclosing Party; (c) was in Receiving Party's possession free of any obligation of confidence at the time it was communicated to Receiving Party by Disclosing Party; (d) was developed by employees or agents of Receiving Party independently of and without reference to any information communicated to Receiving Party by Disclosing Party; or (e) was communicated by Disclosing Party to an unaffiliated third party free of any obligation of confidentiality. In addition, Receiving Party may disclose the Disclosing Party's Confidential Information in response to a valid court order by a court or other governmental body, as otherwise required by law. All Confidential Information furnished to the Receiving Party by the Disclosing Party is the sole and exclusive property of the Disclosing Party or its suppliers or Customers. This Paragraph shall survive termination of this Agreement. END OF DOCUMENT [SIGNATURES ON FOLLOWING PAGE] + +STRATEGIC ALLIANCE AGREEMENT "EDGE-FTE" Page 14 + + + + + + + + IN WITNESS WHEREOF, EDGE AND FTE HAVE EXECUTED THIS AGREEMENT AS OF THE DATE FIRST ABOVE WRITTEN. EDGE Communications Solutions, LLC FTE Networks, Inc. BY: /s/ Mark Miller BY: /s/ Carlie Ancor NAME: Mark Miller NAME: Carlie Ancor TITLE: Executive Vice-President - Operations TITLE: Chief Technology Officer + +STRATEGIC ALLIANCE AGREEMENT "EDGE-FTE" Page 15 \ No newline at end of file diff --git a/full_contract_txt/FUSIONPHARMACEUTICALSINC_06_05_2020-EX-10.17-Supply Agreement - FUSION.txt b/full_contract_txt/FUSIONPHARMACEUTICALSINC_06_05_2020-EX-10.17-Supply Agreement - FUSION.txt new file mode 100644 index 0000000000000000000000000000000000000000..70e6579d7d2af7e040857d954f76db13104d8b46 --- /dev/null +++ b/full_contract_txt/FUSIONPHARMACEUTICALSINC_06_05_2020-EX-10.17-Supply Agreement - FUSION.txt @@ -0,0 +1,119 @@ +Exhibit 10.17 + +Supply Agreement - FUSION + +CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND REPLACED WITH "[***]". SUCH IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS (I) NOT MATERIAL AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM TO THE COMPANY IF DISCLOSED. + +SUPPLY AGREEMENT ("Supply Agreement") effective as of the date of last signing ("Effective Date") between Centre for Probe Development and Commercialization, a not-for-profit research and services institution with offices located at McMaster University, Nuclear Research Building, 1280 Main Street West, Hamilton, Ontario, Canada, L8S 4K1, ("CPDC"), and FUSION Pharmaceuticals Inc. ("FUSION"), having a place of business at 270 Longwood Road South, Hamilton, Ontario, Canada, L8P 0A6, (together the "Parties" each a "Party"). This document defines the terms and conditions under which CPDC will provide FUSION the Product outlined in this Supply Agreement. + +This Supply Agreement is conducted under the general provisions of the Master Services Agreement and the Quality Agreement entered into between the PARTIES. Unless explicitly stated within this Supply Agreement should there be discrepancies between the Supply Agreement and the Master Services Agreement, then the Master Services Agreement will be the controlling document. 1. "Products": 1.1 Ac-225 FPI-1434 1.2 [***] 1.3 The specifications for the Products are further defined in Schedule 2. 2. Definitions + +As used herein, the following terms shall have the following meanings: 2.1 Affiliate(s) shall exclude CPDC, when referring to FUSION'S affiliates, and shall exclude FUSION, when referring to CPDC's affiliates. 2.2 "Batch" shall mean a single production, testing and release of Product according to the approved and validated processes. 2.3 "Clinical Phase" shall mean the period during which human studies involving the Products are performed for the purpose of evaluating the safety, efficacy and appropriate dose ranges of Product ("Clinical Trials"), to secure marketing approval from a Regulatory Authority. 2.4 "Current Good Manufacturing Practices" or "cGMP(s)" shall mean the standards required by the Regulatory Authority for the manufacturing, testing and quality control of pharmaceutical materials, which practices are current on the Effective Date of this Agreement and may be supplemented, amended or modified by such regulatory authority from time to time. 2.5 "Date of Manufacturing" shall mean the date on which the drug product is produced. 2.6 "[***] Territory" shall mean the territories [***] for which CPDC shall be the [***] supplier of Products for Fusion. 2.7 "Master Services Agreement" the agreement executed between the Parties on the 21st day of February, 2017. 2.8 "Precursors" shall mean the starting materials required to produce Product. For the purpose of this agreement, the Precursors are defined as FPI- 1175 and [***]. Page 1 of 13 CONFIDENTIAL + + + + + +Supply Agreement - FUSION 2.9 "Process' shall mean a GMP-validated method for producing the Product, including formulation, manufacturing controls, and all applicable testing and evaluation suitable to meet regulatory requirements for use of the Product in clinical trials. 2.10 "Production Order* shall mean a written request from FUSION to CPDC authorizing the manufacture of one or more Batches of a Product as further described in Section 3.2. The Production Order is jointly maintained by CPDC and FUSION based on clinical trial requirements. 2.11 "Quality Agreement" means the agreement separately executed between the Parties defining the Specifications, applicable standards, commitment, responsibilities, and activities that both FUSION and CPDC will undertake to ensure that the cGMP manufacturing and services as expressly required under this Agreement and the Master Services Agreement are in full compliance. 2.12 "Regulatory Authority" means the United States Food and Drug Administration ("FDA'), European Medicines Agency ('EMA'), Health Canada and/or any other governmental, regulatory or administrative body having jurisdiction over any activities conducted under this Agreement. 2.13 "Specifications" shall mean the standards established in writing by the Parties for the characteristics, quality, and quality control testing of Product, and its constituents, components, and packaging, as further described in Section 4.4 below and Schedule 2, and as in effect from time to time. 2.14 "Unit" shall refer to an individual vial of Product produced according to the approved specifications. 3. Manufacture and Supply of Products 3.1 Scope and Object; Engagement. This Supply Agreement governs Clinical Phase supply for the Products in connection with Clinical Trials sponsored by FUSION, and in accordance with the responsibilities and obligations attributed to each of the Parties as set out in this Supply Agreement. + +Accordingly, FUSION hereby engages CPDC, and CPDC hereby accepts such engagement, to supply Products for the Territory in connection with FUSION'S Clinical Trials. + +The Products shall be manufactured by CPDC at the location in its cGMP facilities in the Nuclear Research Building (NRB) and on the campus of McMaster University in Hamilton, Ontario, Canada, established for this purpose pursuant to Deliverables defined within Supply Agreement. + +For the avoidance of doubt, it shall be the responsibility of FUSION or its designate to file, obtain and maintain any Investigational New Drug (IND) applications, registrations, listings, authorizations and approvals, as the Regulatory Authority may require to enable use of Product in Clinical Trials, and provide CPDC with all particulars thereof and developments thereunder. + +Both Parties acknowledge that at the time of signing this Supply Agreement that the CPDC is subject to a supply restriction to the United States of America (the "USA") due to and Import Alert 66-40 (the "Import Alert") issued by the FDA. 3.2 Production Orders. From time to time during the Term set forth in Section 6 of this Supply Agreement, FUSION and CPDC will agree to binding Production Orders for Products, as follows: (a) Based on a template order form for such Production Orders provided by CPDC to FUSION, FUSION shall complete the Production Order in such form [***] no later than (a) the order cut-off period for the third-party isotope providers ("Minimum Lead Time"). • In the case of [***] the isotope order cut-off is [***] eastern standard time the week prior to isotope delivery Page 2 of 13 CONFIDENTIAL + + + + + +Supply Agreement - FUSION • In the case of Actinium-225 the isotope order cut-off is [***] eastern standard time the week prior to isotope delivery. (b) CPDC will respond, by email, the acceptance or rejection of each duly completed Production Order within [***] of receipt of such Production Order (an 'Accepted Production Order" or "Rejected Production Order," respectively). If there is no response to a Production Order within such timeline, it shall be considered an Accepted Production Order. In the case of a Rejected Production Order, [***]. (c) FUSION shall be entitled to make changes to Production Orders (a 'Change Order") to alter the quantity of Units packaged or distributed up to [***] prior to the Date of Manufacturing by providing CPDC with written notice [***]. CPDC will respond, by email, the acceptance or rejection of each Change Order within [***] of receipt of such change (an "Accepted Change Order" or "Rejected Change Order," respectively). If there is no response to a Change Order within such timeline, it shall be considered an Accepted Change Order. In the case of a Rejected Change Order, [***]. Changes to the number of Units packaged or distributed with less than [***] notice will be subject to the applicable [***] defined in Schedule 1. Notwithstanding the foregoing, CPDC is unable to alter the total quantity of Product produced after the order deadlines imposed by any third-party isotope supplier. (d) Cancelation of a Production Orders: (i) [***] (ii) All cancellations of Production Orders shall be provided to CPDC by FUSION in writing [***]. (e) [***]. 3.3 Shipping: All deliveries of Products shall be Free Carrier shipping point [***]. For greater certainty, [***] shall take ownership of and bear all risk of loss of or damage to the Products at the origin of the shipment. (a) If requested, [***] shall arrange for any insurance desired by [***] on shipments of Product, in amounts that [***] shall determine, and naming [***]. (b) When shipping Product, CPDC shall comply with all applicable laws and regulations, [***]. (c) All costs and responsibility for return shipping of any Products [***] and or re-usable packaging including but not limited to, lead pots, cardboard boxes or foam inserts, and/or other materials shall be borne by [***]. (d) In the event that any Product packaging materials are returned for reuse from clinical trial sites, [***] shall be responsible for transportation, disposal and/or replacement of any damaged, unusable or lost materials, if applicable. 3.4 Inability to Supply. In the event that it becomes apparent to CPDC at any time that it will be unable to fulfill any Production Order, then CPDC shall immediately notify FUSION in writing of CPDC's inability to meet such requirements for Product, along with a specific indication of the amount of such shortfall in manufacture of Product and anticipated timing of delivery. If CPDC is unable to fulfill the Production Order or any portion thereof within [***] of the planned delivery, then either: (a) CPDC will [***]; or Page 3 of 13 CONFIDENTIAL + + + + + +Supply Agreement - FUSION (b) CPDC will [***]. 3.5 Pricing and Payment Terms. Schedule 1 of this Supply Agreement details the pricing and payment terms for the Product. For supply of Product, CPDC shall invoice FUSION [***]. CPDC shall send such invoices to: + +Address: + +270 Longwood Rd. South Hamilton, Ontario L8P 0J6 Canada [***] + +FUSION shall pay such invoice within [***] of receipt of the invoice in accordance with the Supply Agreement 3.6 Batch Testing. FUSION shall have the right but not the obligation to conduct any Batch testing [***] or investigation it determines to be of value to determine compliance of Product with the Specifications and/or pursuant to any other standard imposed by law. A Batch shall be deemed to be acceptable if, upon testing, it meets the Specifications, relevant cGMP standards, all other applicable laws, rules and regulations (and any additional tests as agreed by the Parties). If either Party discovers that a Batch does not meet the Specifications, relevant cGMP standards or other applicable laws, rules or regulations, then the discovering Party shall promptly communicate with the other Party. All warranty obligations of CPDC with respect to a particular Batch shall cease and have no effect to the extent that any defect in such Batch arises from abuse, misuse, alteration, mishandling, improper storage or gross negligence by FUSION or FUSION'S employees, representatives, agents, suppliers or carriers, or defects in Precursor materials furnished by FUSION which are used in the production of such Batch. 3.7 Dispute Over Quality. In the event of a conflict regarding whether or not Product met the Specifications, cGMP standards or other applicable laws, rules or regulations, at the time of delivery, which CPDC and FUSION are unable to resolve after a good faith attempt by both Parties to resolve such matter in a period of [***] after the conflict arises, a sample of such Product shall be submitted by FUSION or its designee to an independent laboratory or quality assurance professional reasonably acceptable to both Parties for testing or review of the batch documentation. Any test results obtained by such laboratory shall be final and controlling for purposes of this Agreement. In the event the independent review and/or test results indicate that the rejected Product in question met the Specifications, cGMP standards, and all other applicable laws, rules and regulations, then [***]. 3.8 Non-Conforming Products. In the event it is settled pursuant to Section 3.6 or 3.7 that Product in question did not meet the Specifications, cGMP standards or other applicable laws, rules or regulations, FUSION shall be entitled [***]. 4. Additional Obligations of the Parties 4.1 Record Keeping, Inspection, etc. CPDC shall: (a) conform to the provisions detailed within the Quality Agreement, which includes the right of FUSION to conduct inspections, and the responsibility of CPDC to conduct quality control testing of Product prior to shipment and ensure conformance with the Specifications. CPDC shall retain or have retained accurate and complete records pertaining to such testing. Each shipment of CPDC hereunder shall be accompanied by a certificate of analysis for each Batch of CPDC therein; Page 4 of 13 CONFIDENTIAL + + + + + +Supply Agreement - FUSION (b) keep accurate financial records of all Services performed and passthrough costs under this Supply Agreement and all amounts to be invoiced to FUSION and all invoice calculations, and, upon request by FUSION, make such records available for review by FUSION or its representatives to permit verification of the correctness of such amounts and calculations. 4.2 Licenses and Permits. CPDC shall be responsible for obtaining and maintaining any and all facility or other licenses, permits, registrations, and any regulatory approvals necessary to manufacture, handle, store, label, package and prepare under cGMP conditions Products for shipment, and the packaging, supply and export of Product to FUSION or its designees in accordance with the terms and conditions of this Agreement for the Clinical Phase. This includes, but is not limited to, the use and handling of radioactive materials. For greater certainty CPDC will abide by all laws, rules and regulations as applicable for radiation safety by the Canadian Nuclear Safety Commission ("CNSC") for compliance. 4.3 Precursor and Reference Standards. FUSION or, at FUSION'S discretion, its designee, shall provide to CPDC, at no charge, Precursor and reference standards, which meet the Specifications and in sufficient quantities to permit CPDC to meet its Production Schedule obligations hereunder. FUSION shall provide to CPDC all required supporting documentation required for its use in manufacturing the Product. In the event that the Precursor supplied by FUSION is found to be adulterated, damaged, or with compromised packaging, or not shipped within the required environmental conditions CPDC shall return the Precursor at FUSION'S cost. Should the applicable regulations require that CPDC audit FUSION'S Precursor supplier, FUSION shall compensate CPDC for the time and reasonable out of pocket expenses required to complete the audit. CPDC shall only use Precursor and reference standards provided hereunder for the development, validation or manufacture of Products pursuant to this Agreement. FUSION shall at all times retain title in and to such Precursor and reference standard materials in CPDC's possession. FUSION, to the best of its knowledge, represents and warrants to CPDC that it has all requisite rights and intellectual property in such Precursor and reference standard so as to permit their use by CPDC as contemplated by this Agreement without infringement of any third party rights. 4.4 Product Specifications. It is understood that the Specifications may be subject to change from time-to-time based on written agreement by both Parties and in accordance to the Quality Agreement. The current Product Specifications may be referred to within the CPDC controlled document attached as Schedule 2 hereto which is approved at the effective date of this Supply Agreement. 4.5 Changes by CPDC. CPDC shall manufacture Product in compliance with the approved batch records, Specifications, applicable cGMPs, the Quality Agreement, and all applicable laws, rules and regulations, and shall not make any changes contravening that specified within the Quality Agreement. 4.6 Complaints and Adverse Reactions. CPDC or FUSION shall provide to each other prompt notice of any information either of them receives regarding the safety of the Precursor, reference standards, excipients, Products or isotopes, including any confirmed or unconfirmed information regarding adverse, serious or unexpected events associated with any Product that may implicate the manufacture of the Product or one of its components; provided, however, that FUSION shall not be required to provide Clinical Trial reporting to CPDC. For all complaints with respect to any Product of which a Party becomes aware concerning adverse reactions or safety issues, notice must be given by telephone within [***] after receipt of the information, followed immediately with written notice, advising the other Party, regardless of the origin of such information. Any other complaints shall be reported in writing to the other party [***]. CPDC agrees to co-operate with FUSION and any Regulatory Authority in evaluating any complaint, claim, safety or adverse use report related to any Product CPDC will provide timely assistance in responding to any such complaints, including reviews of Batch records and retained samples as well as any necessary testing within reason. Page 5 of 13 CONFIDENTIAL + + + + + +Supply Agreement - FUSION 4.7 Recalls. FUSION shall notify CPDC promptly if any Product is the subject of a recall or correction (a "Recall"), and FUSION and/or its designee shall have sole responsibility for the handling and disposition of such Recall. [***]. (a) In the event that CPDC disputes FUSION'S determination that the fault is due to CPDC and/or to its employees or agents, the Parties will select a mutually agreeable outside consulting firm which will be instructed to review the applicable information and data and to confirm or dissent from FUSION'S determination. If the consulting firm confirms FUSION'S determination, CPDC will pay the fees of such consulting firm. If the consulting firm dissents from FUSION'S determination, CPDC will not have the obligations set forth herein with respect to the Recall and FUSION will pay the fees of such consulting firm. (b) FUSION and/or its designee shall maintain records of all sales, shipping records of Product and customers in sufficient detail to adequately administer a Recall for the period of time as required by applicable law and regulation. CPDC's Shipping Records of Product will be given to Fusion on request such that Fusion can maintain the records and, if such a request is made, will be delivered within a timeframe to be detailed within Quality Agreement. 4.8 New Regulatory Requirements. Each Party shall promptly notify the other of new regulatory requirements of which it becomes aware which are relevant to the manufacture of any Product under this Agreement and which are required by the Regulatory Authorities, as applicable. The Parties shall confer with each other with respect to the best means to implement and comply with such requirements. Any reasonable costs for modifications or additions to the facility required as a result of new regulatory requirements shall be borne by [***]. 4.9 Records. CPDC shall maintain all records necessary to evidence compliance in all respects with (i) the applicable cGMP regulations, Canadian Environmental Health and Safety ("EHS") regulations, the requirements of the CNSC for handling of radioactive materials and the Canadian and International regulations for the transport of dangerous goods as related to the supply and manufacture of Products; (ii) the Specifications; and (iii) obligations under this Agreement. All such records shall be maintained by CPDC according to that specified within the Quality Agreement. CPDC shall provide to FUSION reasonable access to such records upon request Prior to destruction of any record after such time, CPDC shall give written notice to FUSION. FUSION shall have the right within [***] of receipt of such notice to request that CPDC maintain such records in an off-site storage facility for such longer periods as FUSION requests, provided that FUSION pays all costs associated with such off-site storage. 5. Representations and Warranties 5.1 Mutual Representations and Warranties. Each Party represents and warrants to the other as follows: (a) it is a corporation duly organized and validly existing under the laws of the state, province or country of its incorporation; (b) it has the complete and unrestricted power and right to enter into this Agreement and to perform its obligations hereunder; (c) this Agreement has been duly authorized, executed and delivered by such Party and constitutes a legal, valid and binding obligation of such Party enforceable against such Party in accordance with its terms except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, receivership, moratorium, fraudulent transfer, or other similar laws affecting the rights and remedies of creditors generally and by general principles of equity; Page 6 of 13 CONFIDENTIAL + + + + + +Supply Agreement - FUSION (d) the execution, delivery and performance of this Agreement by such Party do not conflict with any agreement, instrument or understanding, oral or written, to which such Party is a Party or by which such Party may be bound, nor violate any law or regulation of any court, governmental body or administrative or other agency having authority over such Party; (e) all consents, approvals and authorizations from all governmental authorities or other third parties required to be obtained by such Party in connection with the execution and delivery of this Agreement have been obtained; (f) no person or entity has or will have, as a result of the transactions contemplated by this Agreement, any right, interest or valid claim against or upon such Party for any commission, fee or other compensation as a finder or broker because of any act by such Party or its agents, or, with respect to such Party, because of any act by its Affiliates or sublicensees; (g) it has not entered into any agreement with any third Party that is in conflict with the rights granted to the other Party pursuant to this Agreement; and (h) neither it nor its Affiliates has been debarred or is subject to debarment, and such Party will not use in any capacity in connection with this Agreement any person or entity who has been debarred pursuant to Section 306 of the United States Federal Food, Drug and Cosmetic Act. 5.2 CPDC Limited Product Warranty. CPDC hereby provides a limited product warranty, and accordingly does warrant for each Batch, that the Product shipped will (i) conform with the Specifications, (ii) be manufactured, tested, processed, packed and prepared for shipment in accordance with cGMPs, and (iii) be free from defects in material and workmanship for the period from the date of manufacture to the expiry date set out on each Unit of Product packed and prepared for shipment. 5.3 No Implied or Other Warranties. CPDC is manufacturing Batches to meet Specifications and is supplying Products to FUSION'S designees. Except as expressly set out in this Supply Agreement, CPDC and FUSION hereby disclaim all other warranties or conditions, whether express or implied, statutory or otherwise including, but not limited to, any implied warranties or conditions of merchantability or fitness for a particular purpose. 6. Term 6.1 Term. This Supply Agreement shall commence on the Effective Date, and shall continue for a period of [***] unless terminated earlier in accordance with the terms of this Supply Agreement. + +[***] Import Alert [***], the Parties shall [***]. Negotiating in good faith, the Parties shall agree to a reasonable minimum percentage of Product supply to [***] Import Alert. In addition, the parties will negotiate the different aspects of the territories and related terms which may include, but are not limited to, [***]. + +[***] Import Alert [***], the Parties shall amend this Supply Agreement to revise the [***] Territories. Negotiating in good faith, the Parties shall agree to a reasonable minimum percentages of Product supply to the each territory, including but not limited to [***] and such amendment shall be closed within [***] of CPDC notifying Fusion [***] Import Alert. 6.2 Term, Renewal. Following the Term, this Supply Agreement shall automatically renew for successive periods of one (1) year (each a "Renewal Term"), unless a Party delivers written notice of non-renewal to the other Party [***] prior to the end of the applicable term. The Term, Initial Renewal Term and Renewal Terms shall be collectively referred to as the "Term". Page 7 of 13 CONFIDENTIAL + + + + + +Supply Agreement - FUSION 7. Termination 7.1 Termination by FUSION, Without Cause. FUSION may terminate this Agreement by providing written notice to the CPDC where: (a) [***] following the Effective Date of this Supply Agreement, FUSION may terminate this Agreement without cause by providing CPDC with [***] prior written notice. (b) Fusion discontinues the trial or terminates the program, Fusion may terminate this agreement by giving [***] written notice to CPDC 7.2 Termination by FUSION, For Cause. FUSION may terminate this Agreement with immediate effect, by providing written notice to the CPDC, where: (a) CPDC commits a fundamental breach of any of its obligations under this Agreement, and such breach is not remedied (if capable of remedy) within [***] of notice in writing from FUSION requiring that such breach be remedied; (b) CPDC becomes insolvent or goes into administration, receivership or liquidation or enters into any arrangement or composition with its creditors; or (c) CPDC ceases or threatens to cease carrying on business. (d) CPDC fails to maintain a Drug Establishment License with Health Canada 7.3 Without limiting Section 11, in the event of for cause termination of this Agreement by FUSION pursuant to Section 7.2, CPDC's maximum liability shall be no greater than that set forth in Section 11.2. 7.4 Termination by CPDC, For Cause. CPDC may terminate this Agreement immediately on written notice to FUSION if: (a) FUSION fails to pay or dispute any invoice in accordance with Section 3.5 and fails to remedy such breach within [***] of a notice from CPDC requiring FUSION to remedy the same and stipulating that FUSION is in breach of this Agreement; or (b) FUSION becomes insolvent or goes into administration, receivership or liquidation or enters into any arrangement or composition with its creditors. 7.5 Termination of this Agreement is without prejudice to any accrued rights of either party as at the date of termination, including, without limitation, CPDC's right to invoice FUSION pursuant to Section 3.5 for any amounts chargeable pursuant to this Agreement as of the date of termination, or as a result of termination. 7.6 Upon termination of this Agreement for any reason whatsoever: (a) CPDC must immediately return, [***], all of FUSION'S property in CPDC's possession; and (b) all then active Production Orders shall be deemed to have been cancelled by FUSION as of the date of termination of this Agreement. Page 8 of 13 CONFIDENTIAL + + + + + +Supply Agreement - FUSION (c) Shall relieve CPDC of its Exclusivity and Performance of Work obligations set forth in the Master Services Agreement sections 3 and 4 respectively, unless, other work orders under the MSA are still valid. 7.7 Prior Obligations. Except as otherwise set forth in this Section 7, termination of this Supply Agreement for any reason shall not release either Party from any obligation theretofore accrued. 8. Survival. Any provision of this Supply Agreement, which, by its terms, is intended to survive the termination or expiration of this Supply Agreement, shall survive such termination or expiration of this Agreement. 9. Assignment. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of the Parties hereto; provided, however, that neither Party shall transfer or assign this Agreement without the prior written consent of the other Party, such consent not to be unreasonably withheld, except where such assignment is by CPDC to any successor or subsidiary organization created within [***] of the Effective Date of this Agreement, which assignment may be completed without the prior written consent of FUSION. Notwithstanding the foregoing, each Party may assign this Agreement and its rights and obligations hereunder without such consent in connection with the transfer or sale of all or substantially all of the business of such Party to which this Agreement relates, whether by merger, sale of stock, sale of assets or otherwise, provided the assignee agrees in writing with the other Party hereto to assume all obligations and liabilities of the assignor under this Agreement. 10. Indemnification 10.1 By CPDC. CPDC shall defend, indemnify and hold FUSION and its Affiliates and sublicensees, and each of their respective directors, officers and employees, harmless from and against any and all damages, liabilities, costs and expenses (including the reasonable costs and expenses of lawyers and other professionals) (collectively "Losses") incurred by FUSION in connection with any claim, demand, action or other proceeding (each, a "Claim") by a third party (excluding FUSION'S Affiliates and sublicensees), to the extent such Losses arise out of (a) failure of the Product delivered under this Agreement to conform to the Specifications; (b) CPDC's breach of this Agreement, including without limitation any failure of its representations and warranties set forth in Section 5.1 or 5.2 to have been accurate when made or any breach of the covenants set forth in this Agreement; or (c) the gross negligence or intentional misconduct of CPDC or any of its Affiliates, or any of their respective directors, officers, employees, provided CPDC will not have an indemnification obligation with respect to any Claim to the extent that FUSION has an indemnification obligation under Section 10.2. 10.2 By FUSION. FUSION shall defend, indemnify and hold CPDC and Its Affiliates, and each of their respective directors, officers and employees, harmless from and against any and all Losses incurred by CPDC in connection with of any Claim by a third party (excluding CPDC's Affiliates), to the extent such Losses arise out of: (a) except to the extent arising from the failure of the Product to conform to the Specifications, the use or sale of the Product by FUSION, its Affiliates, sublicensees, distributors, agents or other parties; (b) except to the extent arising from the failure of the Product to conform to the Specifications, the manufacture, storage, use, handling, promotion, marketing, distribution, importation, sale or offering for sale of Product; (c) interactions and communications with governmental authorities, physicians or other third parties; or (d) FUSION'S breach of this Agreement, including without limitation any of its representations and warranties set forth in Section 5.1, (e) the gross negligence or intentional misconduct of FUSION or any of its Affiliates, or any of their respective directors, officers, employees, provided FUSION will not have an indemnification obligation with respect to any Claim to the extent that CPDC has an indemnification obligation under Section 10.1. Page 9 of 13 CONFIDENTIAL + + + + + +Supply Agreement - FUSION 10.3 EXPENSES. AS THE PARTIES INTEND COMPLETE INDEMNIFICATION, ALL COSTS AND EXPENSES OF ENFORCING ANY PROVISION OF THIS SECTION 10 SHALL ALSO BE REIMBURSED BY THE INDEMNITOR. 11. LIMITATIONS OF LIABILITY. 11.1 GENERAL. EXCEPT FOR DAMAGES FOR WHICH A PARTY IS RESPONSIBLE PURSUANT TO ITS INDEMNIFICATION OBLIGATIONS SET FORTH IN SECTION 10 ABOVE, EACH PARTY SPECIFICALLY DISCLAIMS ALL LIABILITY FOR AND SHALL IN NO EVENT BE LIABLE FOR ANY INCIDENTAL, SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES, EXPENSES, LOST PROFITS, LOST SAVINGS, INTERRUPTIONS OF BUSINESS OR OTHER DAMAGES OF ANY KIND OR CHARACTER WHATSOEVER ARISING OUT OF OR RELATED TO THIS AGREEMENT OR RESULTING FROM THE MANUFACTURE, HANDLING. MARKETING, SALE, DISTRIBUTION OR USE OF LICENSED PRODUCT REGARDLESS OF THE FORM OF ACTION, WHETHER IN CONTRACT, TORT, STRICT LIABILITY OR OTHERWISE, EVEN IF SUCH PARTY WAS ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. FUSION SHALL HAVE NO REMEDY, AND CPDC SHALL HAVE NO LIABILITY, OTHER THAN AS EXPRESSLY SET FORTH IN THIS AGREEMENT. EXCEPT FOR DAMAGES FOR WHICH A PARTY IS RESPONSIBLE PURSUANT TO ITS INDEMNIFICATION OBLIGATIONS SET FORTH IN SECTION 10 ABOVE, NO ACTION, REGARDLESS OF FORM, ARISING OUT OF OR RELATED TO THIS AGREEMENT MAY BE BROUGHT BY EITHER PARTY MORE THAN [***] AFTER SUCH PARTY HAS KNOWLEDGE OF THE OCCURRENCE THAT GAVE RISE TO THE CAUSE OF SUCH ACTION. 11.2 CPDC MAXIMUM LIABILITY. NOTWITHSTANDING ANY OTHER TERM HEREIN, OR ANY TERM OF THE MASTER SERVICES AGREEMENT. CPDC'S MAXIMUM LIABILITY TO FUSION UNDER THIS SUPPLY AGREEMENT FOR ANY REASON WHATSOEVER, INCLUDING, WILL NOT EXCEED [***]. 12. Non-Solicitation. During the term and for a period of [***] thereafter, neither party shall solicit, induce, encourage or attempt to induce or encourage any employee of the other party with whom such party has had direct contact to terminate his or her employment with such other party or to breach any other obligation to such other party. This section is not meant to encompass general solicitations such as may be found in newspaper advertisements and the like and the interviewing or hiring of any person who responds to a general solicitation 13. FORCE MAJEURE. NEITHER PARTY SHALL BE LIABLE FOR FAILURE TO PERFORM, OR DELAY IN THE PERFORMANCE OF, ITS OBLIGATIONS UNDER THIS AGREEMENT (OTHER THAN PAYMENT OBLIGATIONS) WHEN SUCH FAILURE OR DELAY IS CAUSED BY AN EVENT OF FORCE MAJEURE. FOR PURPOSES OF THIS AGREEMENT, AN EVENT OF FORCE MAJEURE MEANS ANY EVENT OR CIRCUMSTANCE BEYOND THE REASONABLE CONTROL OF THE AFFECTED PARTY. INCLUDING BUT NOT LIMITED TO, WAR, INSURRECTION, RIOT, FIRE, FLOOD OR OTHER UNUSUAL WEATHER CONDITION, EXPLOSION. ACT OF GOD, PERIL OF THE SEA, STRIKE, LOCKOUT OR OTHER INDUSTRIAL DISTURBANCE, SABOTAGE, ACCIDENT, EMBARGO, BREAKAGE OF MACHINERY OR APPARATUS, INJUNCTION, ACT OF GOVERNMENTAL AUTHORITY, COMPLIANCE WITH GOVERNMENTAL ORDER ON NATIONAL DEFENSE REQUIREMENTS, OR INABILITY TO OBTAIN FUEL, POWER, RAW MATERIALS, LABOR OR TRANSPORTATION FACILITIES. IF, DUE TO ANY EVENT OF FORCE MAJEURE, EITHER PARTY SHALL BE UNABLE TO FULFILL ITS OBLIGATIONS UNDER THIS AGREEMENT (OTHER THAN PREVIOUSLY ACCRUED PAYMENT OBLIGATIONS FROM COMPLETED WORK, THE AFFECTED PARTY SHALL IMMEDIATELY NOTIFY THE OTHER PARTY OF SUCH INABILITY AND OF THE PERIOD DURING WHICH SUCH INABILITY IS EXPECTED TO CONTINUE AND SHALL USE COMMERCIALLY REASONABLE EFFORTS TO MITIGATE THE LENGTH AND EFFECT OF SUCH FORCE MAJEURE EVENT. Page 10 of 13 CONFIDENTIAL + + + + + +Supply Agreement - FUSION 14. Compliance with Law. Each Party agrees to comply, and to require its Affiliates and Sublicensees to comply with all applicable international, federal, state and local laws, rules and regulations, including, but not limited to, import/export restrictions, laws, rules and regulations governing use and patent, copyright and trade secret protection, in the performance of its activities as contemplated by this Agreement. 15. Costs and Expenses. Except as otherwise expressly provided in this Agreement, [***] shall bear all costs and expenses associated with the performance of [***] under this Agreement. 16. Notices. Any notice or other communication required or permitted to be given hereunder shall be in writing and shall be delivered in person, transmitted by facsimile, e-mail or similar means of recorded electronic communication or sent by registered mail, charges prepaid, addressed to the addresses set out on the signature page hereof. Any such notice or other communication shall be deemed to have been given and received on the day on which it was delivered or transmitted (or, if such day is not a business day, on the next following business day) unless mailed, in which case on the [***] following the date of mailing; provided, however, that if at the time of mailing or within [***] thereafter there is or occurs a labour dispute or other event that might reasonably be expected to disrupt the delivery of documents by mail, any notice or other communication hereunder shall be delivered or transmitted by means of recorded electronic communication as described. 17. Severability. Each provision contained in this Agreement is distinct and severable and a declaration of invalidity or unenforceability of any such provision or part thereof by a court of competent jurisdiction shall not affect the validity or enforceability of any other provision hereof. 18. Headings and References. The descriptive headings of this Agreement are for convenience only and shall be of no force or effect in construing or interpreting any of the provisions of this Agreement. The terms "this Agreement", "hereof, "hereunder" and similar expressions refer to this Agreement and not to any particular Sections, subsection or other portion hereof, and include any agreement supplemental hereto. Unless something in the subject matter or context is inconsistent therewith, references herein to Sections, subsections, paragraphs, subparagraphs and further subdivisions are references to such subdivisions of this Agreement. 19. Number, Gender and Persons. Unless the context otherwise requires, any reference to gender shall include both genders and words importing the singular number shall include the plural and vice-versa. Words importing "persons" include individuals, partnerships, associations, trusts, unincorporated organizations and corporations. 20. Calculation of Time Periods. Where a time period is expressed to begin or end at, on or with a specified day, or to continue to or until a specified day, the time period includes that day. Where a time period is expressed to begin after or to be from a specified day, the time period does not include that day. Where anything is to be done within a time period expressed after, from or before a specified day, the time period does not include that day. If the last day of a time period is not a business day, the time period shall end on the next business day. 21. Definitions. Any definitions contained in this Agreement shall include any necessarily corresponding definitions as the context may require. Any capitalized or otherwise defined term used in this Agreement shall have the meaning ascribed in this Agreement regardless of whether such meaning is ascribed earlier or later in this document than the reference in question. 22. Further Assurances. Each of the Parties hereto shall, at all times and from time to time hereafter, execute, acknowledge, and deliver such other instruments and shall take such other action as may be necessary to carry out their respective obligations under this Agreement. Page 11 of 13 CONFIDENTIAL + + + + + +Supply Agreement - FUSION 23. Waiver. Except as expressly provided in this Agreement, no amendment or waiver of this Agreement or any portion thereof shall be binding unless executed in writing. No waiver of any provision of this Agreement shall constitute a waiver of any other provision, nor shall any waiver of any provision of this Agreement constitute a continuing waiver unless otherwise expressly provided. 24. Counterparts. This Agreement may be executed in any number of counterparts, and/or by facsimile or e-mail transmission of standard PDF files, each of which shall constitute an original and all of which, taken together, shall constitute one and the same instrument. + +(remainder of page intentionally left blank; signature page follows) Page 12 of 13 CONFIDENTIAL + + + + + +Supply Agreement - FUSION IN WITNESS WHEREOF, the Parties hereto have each caused this Supply Agreement to be duly executed as of the Effective Date. Centre for Probe Development and Commercialization McMaster University Nuclear Research Building, A316 1280 Main Street West Hamilton, Ontario Canada, L8S 4K1 + +Fusion Pharmaceuticals Inc. 270 Longwood Road South Hamilton, Ontario Canada, L8P 0A6 + +By By Name Name Title Title Date Date + +[SIGNATURE PAGE] Page 13 of 13 CONFIDENTIAL + + + + + +Supply Agreement - FUSION SCHEDULE 1: SUPPLY PRICING + +[***] 4. Production Standby Fee: a fee of $45,000 per month shall apply to [***]. CONFIDENTIAL Page 1 of 2 + +CONFIDENTIAL \ No newline at end of file diff --git a/full_contract_txt/FerroglobePlc_20150624_F-4A_EX-10.20_9154746_EX-10.20_Outsourcing Agreement.txt b/full_contract_txt/FerroglobePlc_20150624_F-4A_EX-10.20_9154746_EX-10.20_Outsourcing Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..65c450e66727a9e5a9b4fea1c514313e7dcae26c --- /dev/null +++ b/full_contract_txt/FerroglobePlc_20150624_F-4A_EX-10.20_9154746_EX-10.20_Outsourcing Agreement.txt @@ -0,0 +1,619 @@ +Exhibit 10.20 + +(TRANSLATION) OUTSOURCING AGREEMENT + +This Outsourcing Agreement (hereinafter "Agreement") is effective as from the 1st day of January, 2009, by and between: + +Parties to this agreement + +SILICON SMELTERS << Pty >> Ltd, registration nr 1998/019036/07, VAT n° 4310178506, Registered office at Beyersnek Road, PO Box 657 Polokwane - South Africa, represented by Benoit Emile Norbert Ollivier, Managing Director, acting pursuant to the powers granted to him by the Board on the 22nd of May, 2008 (hereinafter referred to as "the Customer"), + +AND + +ESPACIO INFORMATION TECHNOLOGY, SA., a public limited company with place of business in P° de la Castellana, N° 259, 28046, Madrid, SPAIN, and represented by Mr. Carlos Lafitte as Chief Executive, in virtue of his powers, currently in force, conferred to him the 23rd of January of 1996 (Protocol No. 134), before Mr. Jose Maria Lucena Conde, Notary Public in Madrid, (hereinafter referred to as "EIT"). 1 + +Source: FERROGLOBE PLC, F-4/A, 6/24/2015 + + + + + +1. RECORDINGS + +This Agreement is being made and entered into with reference to the following facts: + + 1.1. Silicon Smelters and EIT both belong to the GROUP VILLAR MIR. + + 1.2. The Customer is a company that manufactures ferro-alloys in both its factories: Polokwane and Rand Carbide. + + 1.3. EIT is a company that installs, integrates and develops the management and maintenance of Data Processing Systems, and desires toperform for the Customer the outsourcing services described in this Agreement. + + 1.4. GROUP VILLAR MIR demands the Customer to use the management services of the group, developed and maintained by EIT, andsubcontract the management of its IT infrastructure to EIT. + +In consideration of the payments to be made and services to be performed hereunder, the parties agree as follows: + +2. PURPOSE OF AGREEMENT + + 2.1. The Agreement documents: + + 2.1.1. The services EIT renders to the Customer's users on all the company's levels; + + 2.1.2. The clauses made regarding services and products between the Customer and EIT. + + 2.1.3. The terms and conditions under which the Customer agrees to purchase and EIT agrees to provide the Services. + + 2.2. The definitions that apply in the present Agreement are listed in Annex 1. + + 2.3. The scope of application of this Agreement is restricted to the IT Management System of the Customer. The IT involving the industrialand production environments is excluded from this Agreement. + + 2.4. The supervision of the Agreement is assured by EIT, represented by its Chief Executive, and by the Customer, represented by its Headof Information Technology Department. + + 2.5. These specific services can be grouped in different types: + + 2.5.1. Network 2 + +Source: FERROGLOBE PLC, F-4/A, 6/24/2015 + + + + + + 2.5.2. Servers + + 2.5.3. Applications + + 2.5.4. User Workstations + + 2.5.5. Standard software licences + + 2.5.6. Definition of the agreed guidelines for negotiation + +3. DESCRIPTION OF THE SERVICES RENDERED BY EIT + +The specific services rendered by EIT according to this Agreement include the following: + + 3.1. NETWORK + +EIT is in charge of the remote Network, which connects each workstation of the Customer to the Central Server of EIT and to Internet (hereinafter "WAN"). The internal network of the factories (hereinafter "LAN") is excluded from this Agreement and the Customer is responsible for it. + + 3.1.1. The Customer has contracted, taking into account the technological standards defined by EIT, an external company (hereinafter "Network Supplier") for the setting up and the management of the Network. This Network Supplier is accountable to the Customer for the management of the Network. + + 3.1.2. EIT commits itself to monitor the Network during working hours in South Africa, up to where the service rendered by theNetwork Supplier allows. + + 3.1.3. EIT commits itself to alert the IT Department of the Customer when any malfunction (power cut, saturation, etc.) is identified, and to carry out the necessary actions with the Network Supplier in order to solve this malfunction as quickly as possible. + + 3.1.4. EIT commits to assure a high availability (availability rate defined in Annex 2) and the proper performance (response timeand no saturation) of the Network during working hours in South Africa (established in Annex 2). + + 3.1.5. The Customer and EIT commit themselves to give each other notice of any case of malfunction with the Network Supplier. 3 + +Source: FERROGLOBE PLC, F-4/A, 6/24/2015 + + + + + + 3.2. SERVERS: + + 3.2.1. EIT is in charge of the list of servers (hereinafter "Servers") provided in Annex 3. + + 3.2.2. The Customer is responsible for the maintenance of the hardware of the local servers. + + 3.2.3. EIT is responsible for the maintenance of the hardware of the Central Server. + + 3.2.4. EIT commits to monitor the Servers during working hours in South Africa. + + 3.2.5. EIT must alert the IT Department of the Customer if any problem should occur in any of the Servers, within the timeestablished in Annex 2. + + 3.2.6. EIT commits to solve any problems that may arise in the Servers, within the time established in Annex 2. + + 3.2.7. EIT is in charge of supervising and assuring the proper performance of the backups. For this, it has provided the Customerwith a backup process. + + 3.2.8. The Customer commits to follow the backup process that EIT has provided for him. + + 3.2.9. The Customer must alert EIT of any incidence it might detect by sending an electronic mail to sistemas@eit.es. + + 3.3. APPLICATIONS + +EIT provides and is responsible for the support and maintenance of the applications (defined in the table in Annex 4). + +For each of these applications, EIT commits to: + + 3.3.1. Provide the Customer with hardware installations (servers, disks, backup tapes, etc.) which enable the performance of theapplication. + + 3.3.2. Assure the availability of the application (which varies for each application, defined in Annex 2). 4 + +Source: FERROGLOBE PLC, F-4/A, 6/24/2015 + + + + + + 3.3.3. Monitor the applications to analyse the transaction charges and carry out the appropriate corrections in order to optimizethe system. + + 3.3.4. Provide Level 2 assistance to users via direct telephone numbers of the persons responsible for each application, during the hours established in Annex 2. If there is a public holiday in Spain, EIT commits to provide for the Customer a central telephone number to communicate any incidences that may occur. + + 3.3.5. Solve the problems communicated by e-mail to incident.smelters@eit.es during working hours in South Africa, within timeaccording to the severity of the problem, defined in Annex 2. + + 3.3.6. Maintain the present interfaces between the central application GES-INDUS and the Customer's local applications: PayrollGesprod and Maximo. + + 3.3.7. Guarantee the reliability of the application (software and databases) and of the hardware support (server, disks, etc.), toprevent any loss of information that could affect the Customer's business. + + 3.3.8. Carry out the backups and necessary restorations in order to assure the durability of the application and prevent any lossof information. + + 3.3.9. Guarantee a high service level (reasonable response time and correct progress of transactions). With regard to the electronic mail service, EIT will be able, after contacting with the Customer, to restrict the type and size of exchanged files. It is noted that the customer currently do not make use of this service but has the option to use it at no additional cost + + 3.3.10. Assure the security of the access to information: the Customer is responsible for the opening of accesses to the applications. EIT commits to supply the necessary securities to ensure the access rights defined by the Customer guarantee access only to the data authorized by the Customer. + + 3.4. WORKSTATIONS AND PRINTERS + + 3.4.1. The Customer is responsible for the purchase and maintenance of the workstations and printers. + + 3.4.2. EIT commits to assist the Customer to implement a master that allows the quick installation of all the standard software inworkstations. + + 3.5. STANDARD SOFTWARE LICENCES + + 3.5.1. The Customer will benefit from the group contracts negotiated by EIT in name of Group Villar Mir for the purchase oflicences. + + 3.5.2. The purchase of licences will be carried out directly by the Customer. 5 + +Source: FERROGLOBE PLC, F-4/A, 6/24/2015 + + + + + + 3.5.3. EIT declares and guarantees the Customer the legal purchase of licences of all the software necessary for the use of thecentral applications created by EIT. + + 3.5.4. EIT must inform the Customer in due course if any changes take place in licences or in their rights of use. + + 3.6. DEFINITION OF STANDARDS AND AGREED GUIDELINES + +EIT is responsible for: + + 3.6.1. The definition of the technological standards to be used in the Customer's IT environment. + + 3.6.2. The agreed guidelines with the suppliers, in order to assure the provision of certain services or the purchase of certain ITtools which, according to EIT, are necessary for the provision of the mentioned services. + +4. PROJECTS + + 4.1. Apart from these services, EIT must provide other supplementary services, not considered in the present Agreement. These services include the study, development and implementation of new applications, changing to new platforms, as well as any other service that the Customer may need in the field of IT services. + + 4.2. The terms and conditions of these services will be separately negotiated if and when it applies. + + + +4.3. For that purpose and before the execution of the mentioned services by EIT, the Customer will pay EIT the package price, previously agreed by the parties. These services can either be carried out directly by EIT or by subcontracts in the sole discretion of EIT, which will have to notify the customer of this fact before the project commence. However if EIT decides to subcontract the project EIT remains responsible for the quality, the cost and the supervision of the services to the satisfaction of the customer. 6 + +Source: FERROGLOBE PLC, F-4/A, 6/24/2015 + + + + + +5. WORK PLACE AND NATURE OF SERVICES + + 5.1. The services described in this Agreement are provided from the following location: EIT, P° de la Castellana, 259D, 28046, Madrid,SPAIN. + + 5.2. For this reason, EIT uses its own IT environment, as well as the local equipment of the Customer, connected by a teleprocessingsystem to the Central Server of EIT. + + 5.3. If necessary, EIT personnel will travel, in prior agreement with the Customer, to the different factories of the company. In this case, thetravelling expenses (travel, accommodation and meals) will be paid by the Customer. + + 5.4. The IT environment belongs to EIT during the total course of the Agreement, with exception of the services subcontracted to thirdparties by EIT, for which the subcontractor will be responsible. + + + +5.5. EIT is responsible for the choice of the equipment considered the most appropriate in order to reach the service level convened in this Agreement. This equipment, and its further updates, should it arise, will be shown to the Customer and agreed upon prior to purchase and installation and refusal by the customer will only be valid upon presentation of a justification to EIT. EIT is responsible for the maintenance of its own IT environment, as well as of its maintenance and modernization expenses. + + 5.5.1. EIT STAFF + + 5.5.1.1. The work team appointed by EIT to fullfill this Agreement is responsible only to EIT, in accordance with the Spanish law. EIT will supervise and will be responsible for the behaviour and tasks of this team, especially on what concerns the confidentiality of the information. + + 5.5.1.2. The Customer does not have any responsibility for the accidents that might be suffered by the staff of EIT, orfor the damages that might be caused by it to third parties, in the framework of its activities. + + 5.5.2. SUBCONTRACTING + +EIT assumes full responsibility for the execution of the tasks carried out by any subcontractor. The subcontractor is equally obliged to assure the service level, the confidentiality and the security convened in the Agreement, for the provision of these services. It is the responsibility of EIT to enter into an agreement with the subcontractor to ensure their performance. 7 + +Source: FERROGLOBE PLC, F-4/A, 6/24/2015 + + + + + +6. SUPERVISION OF THE SERVICE LEVEL + + 6.1. EIT commits to provide monthly measurements to analyse the service level defined in Annex 2. + + 6.2. The parties will analyse monthly these measurements in order to identify what can be improved. + + 6.3. The parties will review annually by mutual agreement the contents and aims of the Service Level Agreement. + +7. PAYMENTS AND PRICING + + 7.1. TOTAL ANNUAL AMOUNT + +The total annual amount to be paid, excluding taxes, for the year 2009, for the total provision of the services described in Article 2 of this Agreement, as well as the supervision of these (establishment of measurements and supervision meetings) will be: + +TWO HUNDRED THOUSAND EUROS (200,000 €) + + 7.1.1. This amount has been fixed for the two factories of Silicon Smelters: Polokwane and Rand Carbide, being the annualamount per factory A HUNDRED THOUSAND EUROS (100,000 €). + + 7.1.2. If one of the factories closes down, the total amount due will be reduced pro rata for the rest of the annual period for thefactory's annual amount. + + 7.2. INVOICING + + 7.2.1. The invoicing of this amount will be carried out quarterly. + +The invoices will be issued by EIT at the start of each term. Such invoice must be paid by the customer within 45 days of the date on which the invoice is issued. + + 7.2.2. INFRASTRUCTURE COSTS + + 7.2.3. The costs of the communication lines, the network infrastructure, the local servers, the micro computing material (PC andprinters) are the Customer's responsibility and it is not included in the total annual amount defined in this Agreement. + + 7.3. ANNUAL PAYMENT REVIEW + + 7.3.1. The amount defined in Article 6.1 will be subjected to annual revision, following the publication of the Consumer Price Index in Spain (Spanish CPI) in January of each financial year by the National Statistics Institute of Spain. It will correspond to the financial year that has concluded. 8 + +Source: FERROGLOBE PLC, F-4/A, 6/24/2015 + + + + + + 7.3.2. The Annual Package Price does not include a protection to inflation. For this reason, the amount will be adjusted annually,according to the growth of the Spanish CPI as was indicated above. + + 7.3.3. The new payment is calculated using the following formula: R = R0 * (S+1), where: + + 7.3.4. R0 is the payment corresponding to the previous year. + + 7.3.5. R is the new payment, and + + 7.3.6. S is the last Spanish CPI published on the revision date. + + 7.3.7. As a result, once the first year, since the date the Agreement was executed, has passed, and on this same date on thefollowing years, the annual price will be modified in proportion with the growth of the Spanish CPI. + + 7.3.8. In case that the National Statistics Institute of Spain does not publish the CPI or it be significantly modified in form andcontent, the parties will agree to a new equivalent measurement, which must be published at least annually. + +8. INTELLECTUAL PROPERTY + + 8.1. The Intellectual Property of the programmes in the application GES-INDUS, used by the Customer's exploitation of the managementsystems, belongs to EIT. + + 8.2. The rights of Intellectual Property also protect the programmes that might be created, and the data processing, accounts, and diagramsgenerated by the mentioned programme. + +9. WARRANTY + + 9.1. Solution's Adequacy + + 9.1.1. EIT guarantees that the solution suggested to the Customer in each moment is the best possible one for the needs of theCustomer. + + 9.2. Cost Saving + + 9.2.1. EIT declares that the way of acting will always be governed by the cost saving principle. 9 + +Source: FERROGLOBE PLC, F-4/A, 6/24/2015 + + + + + + 9.3. Technology + + 9.3.1. EIT commits to maintain its IT environment in accordance to the technological advances, in order to prevent it frombecoming obsolete. + + 9.4. Quality Control + + 9.4.1. EIT guarantees that the services described in this Agreement will be rendered in accordance with the best practice, aquality level accepted by the Customer, and in accordance with the service levels defined in Annex 2. + + 9.5. Availability + + 9.5.1. The IT staff of EIT will carry out the exploitation of the services during working hours in South Africa, except for urgentactions that will be carried out exceptionally, if it were necessary, out of the established hours. + + 9.6. Data and Backup Security + + 9.6.1. EIT will produce a daily backup copy of the data and the applications residing in its IT environment, in order to re-establish and retrieve lost information. + +10. LIABILITY + + 10.1. EIT is responsible for any damages caused to the Customer or to third parties, when these result from EIT not satisfying thecontractual obligations. + + 10.2. Nevertheless, EIT will be free of responsibility, in case of not satisfying its obligations, if he can prove that this was due to forcemajeure or external causes out of his control, like accidents, natural disasters, vandalism acts or theft. + + 10.3. The liability of EIT will be limited to a value equal to contractual value as per clause 7.1 and will not exceed this value. 10 + +Source: FERROGLOBE PLC, F-4/A, 6/24/2015 + + + + + +11. CONFIDENTIALITY + +The parties commit themselves to a total confidentiality and to not spread or use directly, through third parties or other companies, information about the other party to which they have access in the frame of this Agreement. + + 11.1. PROTECTION AND CONFIDENTIALITY OF DATA + + 11.1.1. Confidential Information means any information disclosed by either party in the frame of this Agreement. In consequence, each party agrees not to use, disclose, publish or disseminate any Confidential Information of the other party for any purpose except to perform its obligations or exercise its rights under this Agreement, except: + + 11.1.1.1. Following prior consent of the other party, or + + 11.1.1.2. If the information was in the public domain at the time it was disclosed or becomes in the public domainthrough no act or omission of the Receiving Party. + + 11.1.2. Any of these exceptions will not be presumed in any case, and the revealing party must clear any doubt to this respect. + + 11.1.3. Both parties shall take reasonable precautions to preserve in strict confidence any confidential or proprietary information obtained by them, their agents, employees, subcontractors, suppliers, consultants, and in general, any person that has access to it. + + 11.1.4. Confidential Information includes any technical, economic, financial and/or commercial information, confidential or not, bearing in any commercial relationship and in general, without any limitation, any information to which any of the parties has access during the application, in the frame of this Agreement. + + 11.1.5. Except as provided hereinafter, for a period of five years after termination or expiration of this Agreement, each party shall not disclose, publish or disseminate information received from the other party which may be required to carry out this Agreement and which the disclosing party deems proprietary and confidential. + + 11.1.6. Once this Agreement has expired, each party must, depending on the choice of the other party, destroy or hand over all technical, economic, financial or commercial information, confidential or not, in its possession, directly or indirectly, as convened in the present Agreement. 11 + +Source: FERROGLOBE PLC, F-4/A, 6/24/2015 + + + + + + 11.2. MANAGEMENT OF ACCESS RIGHTS + + 11.2.1. In accordance to Article 10.1, the Customer is in charge of defining the opening, closing or modifying of access toinformation. The Customer is also in charge of defining the user accesses, as well as the level of access of its users. + + 11.2.2. 10.2.2. EIT guarantees the control of access (through an access code and password) to information pursuant to the accessrights defined by the Customer. + + 11.2.3. 10.2.3. EIT will not be held responsible if a Customer's user uses an access code and password of a third party. + +12. SUPERVISION COMMISSION + + 12.1. The parties commit themselves to constitute a supervision commission formed by persons appointed for that purpose. + + 12.2. This commission will act as an intermediary between the parties and it will accomplish the following tasks: + + 12.2.1.1. Verify the fulfilment, in particular, the evolution and implementation, of all the services and applications. This operation willbe recorded in the corresponding reports, according to the convened periodicity. + + 12.2.1.2. Interpret any Article of this Agreement that might be questioned by the parties. + + 12.2.1.3. Resolve any potential conflict that may arise during the execution of this Agreement. For this, the commission memberswill act at their best, and assemble all the necessary information. + + 12.3. If the commission members are not able to resolve a conflict or a problem in the interpretation of this Agreement within thirty naturaldays, the representatives of the parties will be duly informed in order to find a solution on friendly terms. 12 + +Source: FERROGLOBE PLC, F-4/A, 6/24/2015 + + + + + +13. DURATION + + 13.1. The present Agreement is effective as from 1 January 2009. It is established by calendar year and renewed tacitly every year. + + 13.2. The Agreement rests, for all that, cancellable at any time by any of the parties before the expiry date of the Agreement or any of itsrenewals, upon three months prior written notice. + +14. EARLY TERMINATION + + 14.1. The Customer can cancel, on its own accord, the present Agreement upon certified notice to EIT, in the following cases: + + 14.1.1. If there is a repeated interruption, by EIT, of the services convened in this Agreement, for a period of four working days. + + 14.1.2. Upon the institution, by or against EIT, of insolvency, receivership or bankruptcy proceedings or any other proceedingsfor the settlement of its debts. + + 14.1.3. Non-performance by EIT of its contractual obligations and warranties, assumed in the present Agreement. + + 14.1.4. Absorption or fusion of EIT by other companies. In this case, the Customer can decide if he wants to continue working with the new company, which will have to continue rendering all the services convened in this Agreement, in the same conditions. + + 14.2. For simple convenience. + + 14.2.1. In case the Customer cancels the Agreement in accordance with Articles 13.1, 13.2, EIT will pay the Customer the amountof 3.000 €, for the non observance of the Agreement of which it is responsible. + + 14.2.2. In case of termination of this Agreement by the Customer according to Article 13.5, the Customer will pay EIT the amountof 3.000 €. + +15. CONTRACTUAL TRANSITION + + + +15.1. In case of expiration or termination of the present Agreement, the Customer and EIT will cooperate, in good faith, to make possible a transfer, in due form to the Customer or to a third party, chosen by the Customer, for the provision of the services defined in this Agreement. For that purpose, the parties will develop, with enough time in advance and with the necessary haste, a Transition Plan where the actions and measures to be taken will be defined. 13 + +Source: FERROGLOBE PLC, F-4/A, 6/24/2015 + + + + + + 15.2. EIT will continue to provide the services defined in this Agreement between the date it receives from the Customer a notice ofexpiration or termination of this Agreement and the date this expiration or termination becomes effective. + + 15.3. EIT commits to hand over to the Customer, on this date, all the data and its copies, in the frame of the provision of services. + +16. LITIGATION RULINGS + + 16.1. All the litigations that may arise between the parties during the period of application of the present Agreement, in relation with its Articles, and that have not been solved in a friendly manner, will be subjected to the rulings of their respective Chief Executives. In case of persistent disagreement, the litigation will be subjected to the General Management of Group Villar Mir. + + 16.2. However, if any of the parties no longer belongs to Group Villar Mir, any litigation that may not be solved in a friendly manner will besettled in compliance with the laws of Spain. + + 16.3. Any doubt that arises, in the frame of this Agreement, will be settled through arbitration in equity, in compliance with the Spanish Law of Arbitration, Ley 60/2003, both parties agreeing to obey the decision. For the designation of the arbitrators and the management of the arbitration, the following rules will apply: + + 16.3.1. There will be three arbitrators, solicitors. Each party will designate one, and these two will designate a third one. + + 16.3.2. The place of arbitration will be Madrid. + + 16.3.3. It will be governed by the laws of Spain and the language of the process will be Spanish. + + 16.3.4. The arbitrators will dictate the decision within three months of the notice of the parties' acceptance. + + 16.4. The parties, expressly waiving the Jurisdiction that may correspond to the same, submit themselves to the jurisdiction of the Courtsand Tribunals of Madrid for any matter derived from the present Agreement that cannot be subjected to arbitration. 14 + +Source: FERROGLOBE PLC, F-4/A, 6/24/2015 + + + + + +17. GOVERNING LAW + + 17.1. This Agreement shall be governed by, and construed in accordance with the laws of Spain. + +18. IN WITNESS WHEREOF, the parties acknowledge that each has fully read and understood this Agreement, and, intending to be legally bound thereby, executed this Agreement on the date first above written. SLICON SMELTERS PTY LTD ESPACIO INFORMATION TECHNOLOGY, S.A. + + + +Name: Dr B.E.N. Ollivier Name: Carlos Lafitte Pradal + +Title: Managing Director Title: Director General 15 + +Source: FERROGLOBE PLC, F-4/A, 6/24/2015 + + + + + +ANNEX 1: DEFINITIONS + +The following definitions apply in the present Agreement: + +IT Department: Customer's work team in charge of the support and maintenance of the Customer's local infrastructure and applications. + +LAN: Internal network at the factories that connects the factory's routers with the workstations and peripheral devices of the site. + +WAN: External network that connects the Silicon Smelter factories with the central node located in Madrid. Network leaving the router of each factory. + +South African workdays: Monday to Friday, except for legal holidays of the South African work schedule. + +South African working hours: 8h00 - 20h00 during South African workdays. + +Local Servers: Servers listed in Annex 3, which are located in the factories of Silicon Smelters. + +Central Servers: Servers listed in Annex 3, which are located outside the factories of Silicon Smelters. + +Local Applications: IT applications used by Silicon Smelters and implemented on the local Servers. Silicon Smelters is responsible for these applications, which are listed in Annex 4. + +Data: The data or information belonging to the Customer saved on magnetic support or others, and that is subject to computer treatment. + +Source: FERROGLOBE PLC, F-4/A, 6/24/2015 + + + + + +ANNEX 2: SERVICES AND LIABILITIES Service Period Timetable Response Liability Evaluation Period + + Type of Evaluation + +Network Availability + +Workdays in South African work schedule 8H-20H 98% availability Monthly + +Measuring periods when the network is not available + +Fault reports of network and server infrastructure problems + +Workdays in South African work schedule + +8H-20H + + + +Alert in the 15 minutes following the fault report as well as an account when the problem has been solved. Define what alert, how and who communicates it. + +98% of faults reported in the time period + +Monthly + + + +Measuring the period between the beginning and the end of the problem, and fault reporting + +Ges-Indus Availability + +Workdays in South African work schedule 8H-20H 98% availability Monthly + +Measuring periods when the application is not available + +Ges-Indus Support Level 2 + +Workdays in South African work schedule 8H-20H + +Ø + + + +Response: less than two South African working hours + +98% of requests solved in the time period Monthly + +Measuring response times for each request + + Ø Blocking Bug: + +Ges-Indus Maintenance + + + +Workdays in South African work schedule + + + +8H-20H + + + +● + + + +Consideration and response: less than two South African working hours + +98% of requests solved in the time period + + + +Monthly + + + +Measuring the response times for encountered problems + + + +● + + + +Solution or work-around: less than one South African workday + + Ø Non-blocking Bug: + + + +● + + + +Consideration and response: less than three South African workdays + + ● Solution or work-around: set out by the requestor + +Electronic Mail Service Availability 7d/7d 24h/24h 99% availability + +Measuring periods when the electronic mail service is not available + +OFINET Availability 7d/7d 24h/24h 95% availability Measuring periods when OFINET is not available + +Source: FERROGLOBE PLC, F-4/A, 6/24/2015 + + + + + +ANNEX 3: INVENTORY OF SERVERS USED BY SILICON SMELTERS + +Name of Servers Functionality Priority Local or Central Server Server Management Responsibility ERP Ges-indus Management of commercial and financial flow High Central EIT SMTP.EIT.ES Transmission of electronic mail High Central EIT POP.EIT.ES Delivery of electronic mail High Central EIT OFINET WEB application, access to electronic mail service and sharing of documents and information Medium Central EIT + +Source: FERROGLOBE PLC, F-4/A, 6/24/2015 + + + + + +ANNEX 4: INVENTORY OF APPLICATIONS USED BY SILICON SMELTERS + +Name of Application Functionality Priority Local or Central Server Server and Application Management Responsibility Ges-Indus Management of commercial and financial flow High Central EIT Email service Transmission and reception of electronic mail High Central EIT OFINET WEB application, access to electronic mail service and sharing of documents and information Medium Central EIT + +Source: FERROGLOBE PLC, F-4/A, 6/24/2015 \ No newline at end of file diff --git a/full_contract_txt/Freecook_20180605_S-1_EX-10.3_11233807_EX-10.3_Hosting Agreement.txt b/full_contract_txt/Freecook_20180605_S-1_EX-10.3_11233807_EX-10.3_Hosting Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..ef0a1da15bf46dd84e8add05e05d6cfa58b63781 --- /dev/null +++ b/full_contract_txt/Freecook_20180605_S-1_EX-10.3_11233807_EX-10.3_Hosting Agreement.txt @@ -0,0 +1,55 @@ +By Client: /s/ Natalija Tunevic + +Website Design, Development and Hosting Agreement + +This Website Design, Development and Hosting Agreement the ("Agreement") is entered into on January 11, 2018 by and between Natalija Tunevic, director of FreeCook (hereinafter referred to as "Client") and Mitchell Vitalis, director of Mitchell's Web Advance, PLC (hereinafter referred to as "Company"). + +1. Website Design and Development. Client agrees to pay to Company the sum of $5,000 (the "Contract Price") to design and develop a website for Client (the "Client Website") in accordance with the accompanying Scope of Work, attached to this Agreement as Exhibit A. + +(a) Change Orders. Any changes to the Scope of Work following the execution of this Agreement requiring Additional Work must be submitted to and accepted by Company in writing as a "Change Order". The costs of any such changes shall be added to the Contract Price. Additional Work shall be defined as the addition or revision of pages, graphics, or other features, any text, graphic or page design or programming requiring more than two rounds of textual or graphical revisions, substantial revisions to text and/or content provided by Client, changes to elements which have been finalized, or significant changes in the Scope of Work. + +(b) Due Dates and Delays. Company will use its best efforts to deliver the Client Website in the time frame specified in the Scope of Work. Terms of the project: 12 weeks from February 8, 2018 to May 3, 2018. Client acknowledges and agrees that any due dates set forth in the Scope of Work are subject to delay if Company does not receive the required materials or documentation in a timely manner or in the required format or if approvals are delayed by Client or if the Scope of Work is changed by Client. + +(c) Client Submitted Content. All written content submitted by Client for use in the Client Website must be typewritten, proofread and delivered to Company in the body of an email message or as a Microsoft Word electronic document or plaint text electronic document. Any content submitted by Client in any other manner or format, including, but not limited to Adobe PDF format, will be returned to Client for resubmission. Company will not make any attempt to proof read or correct any contextual, grammatical or typographical errors in the written content submitted by Client. It is Client's sole responsibility to check the accuracy of the written content and correct any errors prior to submission for final publication. Company will assume that all the written content submitted by Client has been proofread and is ready for publication. Client may elect to pay Company the Hourly Rate set forth below to type and proofread any written content not submitted in the electronic formats specified above. + +(d) Company License and Credit. Client hereby grants to Company a non-exclusive and limited license to use Client's trade names, logos and other trademarks in connection with Company advertising, marketing and promotion of its products and services. Client agrees that any unsolicited positive feedback Client provides to Company may be used in any Company marketing and/or advertising materials (i.e., customer testimonials). Client further agrees that Company may use and display the graphics and other web design elements of Client's website as examples of Company website design and development work. To maintain Company's portfolio credentials, and the integrity of any applicable copyrights, Company shall be entitled to place an unobtrusive credit in the footer on each page of Client's website. 2. Payment Terms. Upon the signing of this Agreement, Client agrees to pay to Company a total of $5,000. Client shall make a prepayment of $1,900 and pay the remaining $3,100 on completion of the Scope of Work. + +3. Business Hours; Rush Work. Company representatives are available during Company's normal business hours which are 9 a.m. to 5 p.m. UTC +2, Monday through Friday. Any email or telephone correspondence received after normal business hours will be processed the following business day. Client shall pay an additional surcharge for any services requiring work to be performed outside of normal business hours by reason of a rush deadline requested by Client or as a result of Client's failure to meet scheduled times for delivery and/or review and approval of information, content and materials. The surcharge for rush work shall be the standard hourly rate of $40 plus twenty-five percent (25%). + +4. Customer Service. Company, either directly or through its authorized service provider, shall provide customer service (the "Customer Service") relating to Client Website consisting of replying to customer questions or complaints regarding website hosting services during the normal business hours set forth. Company is not obligated to provide any Customer Service except as specified in this Section. Company at its sole discretion may at any time alter or cease providing the Customer Service which it has agreed to provide to Client relating to Client Website pursuant to this Agreement without any liability to Company. + +AGREED AND ACCEPTED: + +Date: Jan. 11, 2018 + +Source: FREECOOK, S-1, 6/5/2018 + + + + + +By Company: /s/ Mitchell Vitalis Date: Jan. 11, 2018 + +Mitchell's Web Advance - Website Design, Development and Hosting Agreement Page 1 of 2 Client: /s/ Natalija Tunevic Company: /s/ Mitchell Vitalis + +Source: FREECOOK, S-1, 6/5/2018 + + + + + +Mitchell's Web Advance Website Design, Development and Hosting Agreement + +Exhibit A + +Scope of Work Development of design of Free Cook + +Stage 1: 1. Search for competitors, collecting additional information on the subject. 2. Development of unique style of the Client Website. 3. Development of a logo based on the unique corporate style. 4. Designing UI/UX-practical parts. 5. Development of the main and internal pages of the Client Website. + +Stage 2: 6. Emotional design (creation of web-assistants). 7. Adaptive design (mobile version of the Client Website). 8. Design adaptation to other languages. 9. Development of a prototype and interface testing. + +Stage 3: 10. Search Engine Optimization. + +Mitchell's Web Advance - Website Design, Development and Hosting Agreement Page 2 of 2 Client: /s/ Natalija Tunevic Company: /s/ Mitchell Vitalis + +Source: FREECOOK, S-1, 6/5/2018 \ No newline at end of file diff --git a/full_contract_txt/FreezeTagInc_20180411_8-K_EX-10.1_11139603_EX-10.1_Sponsorship Agreement.txt b/full_contract_txt/FreezeTagInc_20180411_8-K_EX-10.1_11139603_EX-10.1_Sponsorship Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..d8b40961fe815b47f96ccfe722583b1abb27be7c --- /dev/null +++ b/full_contract_txt/FreezeTagInc_20180411_8-K_EX-10.1_11139603_EX-10.1_Sponsorship Agreement.txt @@ -0,0 +1,99 @@ +EXHIBIT 10.1 + +Corporate Sponsorship Agreement Between American Diabetes Association and Freeze Tag, Inc. This Agreement ("Agreement") is made effective March 22, 2018, by and between Freeze Tag Inc., a Delaware Corporation ("Company"), with its principal place of business located at 1720 Bray Central Drive, McKinney, TX 75069 and the American Diabetes Association, Inc. ("Association"), an Ohio not-for profit corporation, with its principal place of business located at 2451 Crystal Drive, Suite 900, Arlington, VA 22202. ADA and/or Company may be referred to as a "Party" or collectively as the "Parties." 1. Purpose: The purpose of this Agreement is to benefit the Association and advance its not-for-profit mission through a National Sponsorship of Get Fit Don't Sit DayT M. Company desires to assist the Association to carry out its mission and agrees to provide the support described in this Agreement. Company understands that as a not-for-profit charitable organization Association cannot promote or endorse Company's products or services, either explicitly or implicitly. The Association may require that a disclaimer stating that Company's participation in this Agreement does not convey or imply the Association's approval, endorsement, certification, acceptance, or referral of any product or service of Company. 2. Scope: The Association agrees to identify and acknowledge Company as a supporter of the organization and the diabetes cause, as permitted in connection with qualified sponsorship payments and royalties under Section 513(i) and Section 512 of the Internal Revenue Code and Treasury regulations thereunder ("Code"). Company agrees not to knowingly take any actions that would jeopardize the tax-exempt status of Association under section 501(c)(3) of the Code. Company agrees to inform its business partners about Association's tax-exempt status. Company agrees to provide its services, as defined in Attachment A, in accordance with all applicable laws and in accordance with standards of decorum and taste so as not to adversely reflect upon the Association or its mission. 3. Term: This Agreement shall commence on March 15, 2018 and will expire on March 14, 2020 unless terminated earlier pursuant to Section 13 of the Agreement (the "Term"). 4. Intellectual Property: The Association is the sole and exclusive owner of its name and logos, with or without accompanying words, and has the legal right to enter into this Agreement. In addition, any materials provided by or developed by the Association remain the property of the Association. The Association's names, logos, and various marks, are "the Association Marks", as listed in Attachment B. The Association's ownership of the Association Marks is or shall be secured through registration, or under common law, or both. Company's use of the Association Marks does not create ownership rights in the Association Marks for Company. Company shall not, during the period of this Agreement, or any time thereafter, challenge Association's exclusive ownership or registration of Association's Marks, including any and all moral rights. Company is the sole and exclusive owner of its name, logos, and marks (the "Company Marks"), which include, without limitation, the names, logos, and marks listed in Attachment B as Company Marks. 1 + +Source: FREEZE TAG, INC., 8-K, 4/11/2018 + + + + + +5. License: The Association grants Company a non-exclusive, limited, revocable and conditional license during the term to use the Association Marks, solely to identify Company as a supporter of the Association. Use by Company of the Association Marks is limited to the particular Association Marks as authorized by the Association, which may not be revised or altered in any way, without prior written consent, must be displayed in the same form and colors, and does not extend to any other marks of the Association. Use by Company of the Association Marks on and in conjunction with its product or brand is conditioned upon Company's observance of the specifications for permissible uses of the Association Marks as stated herein and as may be given to Company, from time to time , in writing by the Association. Nothing shall prohibit the Association, during the period of this Agreement, from licensing the use of substantially similar marks for substantially similar uses in working with other companies or industries. Company may not permit any third party to use the Association Marks without the express prior written approval of the Association, which may be withheld for any reason. The Association Marks must be used in a professional manner and solely in connection with the activities authorized under this Agreement. The Company grants the Association a non-exclusive, limited, revocable and conditional license during the term to use the Company Marks, solely to identify Company as a supporter of the Association. The Company Marks must be used solely in connection with the activities authorized under this Agreement. 6. Use of Association Marks: The Association Marks shall not be placed adjacent to the mark of another organization concerned with diabetes, or those of a company that manufactures products or provides services related to diabetes, without the Association's specific prior written consent, which may be withheld for any reason. The Association Marks may not be used for individual, personal or professional gain, or other private benefit, and Company shall not use the Association Marks in any manner that, in the Association's sole discretion and judgment; diminishes their value or otherwise dilutes the Association Marks; discredits the Association or tarnishes its reputation and goodwill; is false, misleading or likely to cause confusion, mistake or deception; violates the rights of others; violates any federal, state or local law, regulation or other public policy; or mischaracterizes the relationship between the Parties, including but not limited to the fact that Company is a separate and distinct legal entity from, and is not an agent of, the Association. The use of Company Marks by Association shall be in furtherance of the sponsorship elements set forth in Attachment A. 7. Quality: All products, materials, services or other items of Company with which the Association Marks are used shall be maintained throughout the period of this Agreement at or above their quality at the beginning of the term. Company shall provide to the Association on a quarterly basis two (2) samples of any items or materials that contain the Association Marks. 8. Review: All uses of the Association Marks, including the specific placement of the Association Marks on Company's product and all promotional materials and packaging, are subject to the Association's prior written approval, which approval shall be in its sole discretion. Any reference to the Association in electronic or other publication or broadcast is subject to the Association's respective prior written approval, which approval shall not be unreasonably withheld. Approval or disapproval shall be provided by the respective Party within five (5) business days of request. Failure to have materials and/or products featuring the Association Marks reviewed in advance of making then available in the marketplace may be considered breach of the Agreement and cause for immediate cancellation. 2 + +Source: FREEZE TAG, INC., 8-K, 4/11/2018 + + + + + +9. Infringement: Each Party shall take measures it deems necessary to assure that none of the material which is prepared, or which shall be prepared, pursuant to this Agreement, violates or infringes upon any trademark or copyright, or any other right of any person, company or other entity. Both Parties shall protect against infringement of the Association Marks. Each Party shall provide reasonable assistance to the other party in protecting the Association Marks upon request. Each Party shall notify the other party immediately if it learns of any infringement of the Association Marks or Company. 10. Mark. The Party owning the infringed mark shall have sole discretion to determine whether to pursue such infringement. 11. Indemnification: Each Party agrees to defend, indemnify and hold harmless the other Party, its officers, directors, employees, volunteers, subcontractors and agents, from any and all claims, losses, damages, liabilities, judgments, or settlements, including reasonable attorneys' fees, costs and other expenses incurred on account of the their respective negligent acts or omissions, and those of their directors, employees, agents, contractors and sub- contractors, in connection with this Agreement. 12. Notification: Except as may be limited by applicable law, each of the Parties hereto shall promptly notify the other of, and reasonably cooperate in responding to or defending any inquiry, investigation, claim, suit or other cause of action instituted, asserted or threatened against either Party hereto or any of their respective Affiliates, shareholders, directors, officers, agents, independent contractors or employees and arising out of or relating to either Party's obligations under this Agreement or any other matter contemplated hereby. 13. Insurance: During the term of this Agreement, and before any sponsorship or promotional activities are conducted under this Agreement, Company shall obtain and maintain at its expense, Commercial General Liability Insurance coverage with an insurance carrier with a Best's rating of A+. The insurance shall be in an amount of: $2,000,000 per occurrence and $2,000,000 aggregate with a $2,000,000 aggregate for products and completed operations. The Association must be a named additional insured, and shall be provided at least 30 days' notice for cancellation of policy and 10 days' notice for non-payment of premium. Such insurance shall be primary and non-contributory. 14. Termination: Before expiration of the Term, either Party may terminate this Agreement upon: (i) any material breach of the Agreement by the other Party, if such breach is not remedied to the reasonable satisfaction of the non-breaching Party within ten (10) business days after written notice; (ii) ten (10) business days written notice to the other Party whenever the notifying Party in its sole discretion determines that the continuation of the Agreement will damage its reputation or good will; or (iii) written notice in the event one Party (a) becomes or is declared insolvent or bankrupt or is subject to the appointment of a trustee or receiver or any equivalent thereof, (b) is the subject of any proceeding related to its liquidation or insolvency (whether voluntary or involuntary) which is not dismissed within ninety (90) days, (c) makes an assignment for the benefit of creditors, or (d) is subject to any sale, lease or other transfer of all or substantially all of its assets to any entity; or (e) is subject to a change of control (whether by merger, stock transfer or otherwise), except in the case of an initial public offering. 15. Effect of Termination or Expiration: Upon termination or expiration, no further use may be made of the Association Marks, or other proprietary property or materials provided, developed or intended for use in connection with the Sponsorship, without prior written authorization, other than as set out in this section. All other originals and copies of the Association Marks (whether in printed, electronic, recorded, and/or other tangible form) shall be discarded or destroyed within five (5) business days. The obligations under sections 8, 9, 10, and 11 and 19 and this section 14 shall survive the termination or expiration of this Agreement. 3 + +Source: FREEZE TAG, INC., 8-K, 4/11/2018 + + + + + +16. Force Majeure: Neither Party shall be in breach of this Agreement if Program or Event activities are cancelled as a result of forces beyond the Party's reasonable control, such as unusually severe weather, fire, explosion, civil disturbance, terrorism or act of God. Whenever possible, any schedule for performance stated above shall be extended as necessary to overcome the effects of such force majeure, or the company promotion shall be transferred to another Association program or event. 17. Liability: Company and Association agree that each is responsible for its own business activities and for its action or inaction relating to the specific Program or Event activities under this Agreement. Company shall be responsible for securing any necessary release forms from participants in any Company activity not held at the Association's Program or Event activity. 18. Non-Assignment: This Agreement shall be between the Parties only, and does not grant rights to any other party. This Agreement may not be assigned by either Party without the prior written consent of the other Party. Any amendment of this Agreement must be in writing signed by authorized representatives of each of the Parties. 19. Confidentiality. The provisions of this Agreement shall be maintained by the Parties as confidential during the Term and thereafter. In addition, any and all aspects of Company's business, including without limitation all non-public information or trade secrets directly or indirectly related thereto, that Association becomes exposed to during the Term, and extensions or renewals, of this Agreement shall be maintained as confidential, and shall not be further disclosed by Association, or used by Association for any purpose other than performing hereunder during the Term or thereafter. Company shall at all times retain full ownership in and to all information respecting its business, and shall be the sole and exclusive owner of all materials created by or for the Company hereunder, with the exception of the Association Marks. 20. Independence. Nothing in this Agreement shall create a partnership, joint venture or establish the relationship of principal and agent or any other relationship of a similar nature between the Parties. The Parties to this Agreement shall be considered independent contractors and neither Party is granted the right or authority to assume or create any obligation on behalf of or in the name of the other. 21. Survival. Any and all warranties, provisions, rights and obligations of the Parties herein described and agreed to be performed subsequent to the termination of this Agreement, including but not limited to obligations respecting confidentiality and indemnification, shall survive the termination of this Agreement. 22. Successors and Assigns. This Agreement shall be binding on the parties, and on their successors and assigns, without regard to whether it is expressly acknowledged in any instrument of succession or assignment. However, Company may only assign its responsibilities under this Agreement with Association's prior written approval as provided in Section 18. 23. Entire Agreement. This Agreement, including any attachments, if applicable, and any other documents and agreements contemplated herein, constitute the entire agreement between the Parties with regard to the subject matter. This Agreement supersedes all previous agreements between or among the Parties respecting such, and there are no other agreements or understandings between or among the Parties other than as set forth herein. 4 + +Source: FREEZE TAG, INC., 8-K, 4/11/2018 + + + + + +24. Amendment. No amendment, alteration, modification of or addition to this Agreement, and no waiver of rights or remedies hereunder, shall be valid or binding unless expressed in writing and signed by the Party to be bound thereby. 25. Compliance with Anti-discrimination Laws and Policies. Company states that it is its practice to adhere to all applicable federal, state and local laws relating to discrimination in the workplace and Company does not have any rule or policy that automatically excludes a person with diabetes from employment in any position with Company. 26. Notice: All written notices required to be given pursuant to the terms set forth in this Agreement shall be deemed given on the day notice is either delivered personally, or by fax or overnight or certified delivery or deposited in the mail addressed as specified below: If to the American Diabetes Association: Address: 2451 Crystal Drive, Suite 900 Arlington, VA 22202 Email: Attn: Daryl Hayes, Corporate Development Officer Attn: Jonathan Webb, Vice President, Corporate Alliances (cc) Attn: Sean McDonough, Vice President and General Counsel, Legal Affairs (cc) + +If to Freeze Tag, Inc. Address: 17200 Bray Central Drive McKinney, TX 75069 Email: Fax: Attn: Craig Holland, CEO + +27. Governing Law: This Agreement is subject to and shall be construed in accordance with the laws of the Commonwealth of Virginia with jurisdiction and venue in federal and Virginia courts in Alexandria and Arlington, Virginia. If any terms of this Agreement are invalid or unenforceable under any statute, regulation, ordinance, executive order or other rule or law, such term shall be deemed reformed or deleted only to the extent necessary to comply with such statute, regulation, ordinance order or rule, and the remaining provisions of this Agreement shall remain in full force and effect. Signatures: American Diabetes Association Freeze Tag, Inc. + +By: By: Name Name Title Title Date Date 5 + +Source: FREEZE TAG, INC., 8-K, 4/11/2018 + + + + + +ATTACHMENT A ACKNOWLEDGEMENT OF SUPPORT The following outlines the type of acknowledgment that has been agreed upon by the Company and the Association and describes the appropriate recognition of support, in accordance with the Internal Revenue Code. (All advertising, promotional and educational materials, with the Association marks, are subject to the Association's advance review and approval.) Products/Brand covered by this Agreement: Freeze Tag App Products, ZeeTour App Sponsorship Type: National Get Fit Don't Sit DayTM Sponsor As a National Sponsor, Company shall participate in and receive recognition for the following activities, for the Term, as agreed upon by Company and the Association. The Association shall review with Company on a semi-annual basis the recognition of Company's participation in the activities outlined below. Use of Association Intellectual Property- Association Name and Logo ("Association Mark"): The Association hereby grants Company the right to use the Association Name and Logo ("the Association Marks") on educational, promotional and or advertising materials throughout the Term (see Attachment "B"). All materials containing the Association Marks are subject to advance review and written approval by the Association and Company acknowledges that the Association is the final arbiter in determining whether or not its Marks are suitable to appear on materials. Any display of Association Mark must be accompanied by one of the following relationship statements: a. "Freeze Tag is a national sponsor of Get Fit Don't Sit DayTM, a wellness engagement day of American Diabetes Association®" b. "Freeze Tag is a national sponsor of American Diabetes Association®" A. 2018 National Get Fit Don't Sit DayTM + +National Get Fit Don't Sit DayT M, (NGFDS) May 2, 2018 is the Association's high-profile wellness day that brings a message around physical activity into the workplace; it is designed to bring awareness about the importance of getting up and moving throughout the day. As a sponsor of the 2018 NGFDS Day event, Company shall include: i. E-Toolkit E-toolkit shall include cobranded assets which can be downloaded by participating companies and organizations. Cobranded assets include: · Cobranded cover · Print Ad/Poster o Field Toolkit: Template campaign materials leveraged by field staff to customize for local area. Logo is included on: · Cobranded cover · Print Ad/Poster · Association shall provide Freeze Tag with customized social media messaging that can be used to promote the company's role in the campaign (estimated timeline March). 6 + +Source: FREEZE TAG, INC., 8-K, 4/11/2018 + + + + + +ii. Association Channels: Company shall receive recognition in the following Association Channels: Website Company logo shall be prominently featured on the campaign landing page for National Get Fit Don't Sit Day. Media and Public Relations Company shall be acknowledged as a national sponsor in the Association's press release announcing the third annual National Get Fit Don't Sit Day. Association Consumer E-News Company shall be recognized as a sponsor of National Get Fit Don't Sit Day content featured in Consumer e-newsletters - Stop Diabetes® and Living with Type 2 Diabetes Email Marketing Company shall be recognized as a national campaign sponsor in one (1) to two (2) email announcements, to the Association's corporate lists and to our engaged consumer base. Corporate lists include current Association sponsors and wellness-minded companies who have engaged in past wellness day initiatives. Social Media Association shall leverage its social media channels to engage participants in National Get Fit Don't Sit Day: · The Association will mention/tag Freeze Tag in posts announcing National Get Fit Don't Sit Day on May 2. · The Association will also share/retweet up to three (3) social media posts on Facebook, Twitter and Instagram-one before National Get Fit Don't Sit Day, one on May 2 and one after the campaign. Internal Communications Company shall be mentioned as the national sponsor of National Get Fit Don't Sit Day in all internal communications to Association staff, including but not limited to Notable News and ADA News. B. Company Pin Pad/POS Donation Campaign for Tour de Cure® and Step Out (2018-2019) In 2018 Company shall commit to developing a customized version of its ZeeTour app to support Tour de Cure® and Step Out Walk to Stop Diabetes® events across the US. By way of the ZeeTour app, Company agrees to ask their customers to participate in a voluntary pin pad/POS donation campaign to support the Association's events. The pin pad campaign donation levels are to be mutually determined by Company and Association. (See Attachment "C" for volunteer donations guidelines) Company shall provide all tracking reports to Association which shall include total participants and funds raised through the pin pad/POS campaign per event site for the duration of the Term. For the purposes of this Agreement, funds raised through the pin pad/POS donation campaign shall be applied towards Company's total sponsorship of $150,000 for the Term. 7 + +Source: FREEZE TAG, INC., 8-K, 4/11/2018 + + + + + +Company and Association shall collaborate to: · Strategically identify markets in 2018 to act as test sites for implementation · Identify number of events both Tour and Step Out prior to 2019 Tour season · Develop a marketing strategy prior to implementation C. Association Media Channels: Promotions That Give Back The Association shall leverage its Promotions That Give Back website and e-news to help raise awareness about Company's Cause Promotion and national support. a. Promotions That Give Back webpage Description: 3-4 lines that outline the relationship with Association and co-venture arrangement (% of every purchase of in store apps goes to Association) b. Promotions That Give Back e-Newsletter Audience: Shoppers and purchasers from Association (ShopD.org website), DiabetesForecast e-news subscribers, excludes donors in December. Circulation: 510,000; Frequency: Quarterly. Description: Photo/graphic, headline, and 20-25 word blurb with link to Promotions That Give Back webpage. A final schedule determining the dates and activities shall be mutually agreed to by the parties. D. Additional Rights and Benefits The Association agrees to provide the following additional rights and benefits: · Explore additional opportunities to be presented throughout the duration of this agreement · If requested, a quote from the Association for Company to use in a press release(s) · Recognition on the "Corporate Supporter - National Sponsors" web pages of diabetes.org that includes a paragraph describing Company's relationship and commitment to the Association · Opportunity to work with Association local market offices to encourage awareness for Company's support, which may include but is not limited to engaging in Company's social media posts via Facebook or Twitter, where appropriate · Single account executive for all Association-related communications · Strategy meeting(s) with account executive to guide relationship or as needed · Monthly report detailing results/status of commitment, fifteen (15) to thirty (30) days post activation and following the conclusion of the Agreement 8 + +Source: FREEZE TAG, INC., 8-K, 4/11/2018 + + + + + +E. Relationship Structure & Payment Schedule Company agrees to pay to the Association the cash rights fee in the amount of $150,000 for this Sponsorship Agreement. Payments to Association shall be payable according to the following schedule: Year 1 - Due: December 31, 2018 - $50,000 Year 2 - Due: December 31, 2019 - $75,000 Remaining Balance Due: March 30, 2020 - $25,000 Signatures: American Diabetes Association Freeze Tag, Inc. + +By: By: Name Name Title Title Date Date 9 + +Source: FREEZE TAG, INC., 8-K, 4/11/2018 + + + + + +ATTACHMENT B Use of the Association's Marks Any use of the Association's Marks requires the review and approval of the Association. Any modification to taglines or to the 'locked up' imagery (Association brand and Cause brand) also requires review and written approval by the Association to ensure that with any modification, there is prominent proximity between the brands. Approved Association Cause or Activity Marks: "American Diabetes Association Stop Diabetes®" and "Tour de Cure®" and "Tour de Cure 'year'®" - as logos change, attachments shall be added to this contract + +PROMOTIONAL SUPPORTER + +NATIONAL SPONSOR Get Fit Don't Sit Day® 10 + +Source: FREEZE TAG, INC., 8-K, 4/11/2018 + + + + + +ATTACHMENT C CAUSE MARKETING COMPLIANCE GUIDELINES DONATION AT CHECKOUT a. Definition Invitation to consumer to make a voluntary donation, separate and apart from the purchase price of any product or service. b. Legal Requirements The company must not either: (a) keep any of the donated money, or (b) be compensated in any way by the Association. A signed contract between the company and the Association is required. Check with the Legal Department. c. Tracking Funds. A reliable system must be implemented to keep track of all consumer donations and to assure that 100% of the donated funds are delivered to the Association on a regular and timely basis. d. Disclosures Several states have special disclosure requirements when consumers are asked to make donations. Check with Company Legal Department for required disclosures. 11 + +Source: FREEZE TAG, INC., 8-K, 4/11/2018 \ No newline at end of file diff --git a/full_contract_txt/FuelcellEnergyInc_20191106_8-K_EX-10.1_11868007_EX-10.1_Development Agreement.txt b/full_contract_txt/FuelcellEnergyInc_20191106_8-K_EX-10.1_11868007_EX-10.1_Development Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..bb0a7d041c6c9909619cb8e8e008355af571cba4 --- /dev/null +++ b/full_contract_txt/FuelcellEnergyInc_20191106_8-K_EX-10.1_11868007_EX-10.1_Development Agreement.txt @@ -0,0 +1,921 @@ +EXHIBIT 10.1 + +JOINT DEVELOPMENT AGREEMENT + +between + +FUELCELL ENERGY, INC. + +and + +EXXONMOBIL RESEARCH AND ENGINEERING COMPANY + +Source: FUELCELL ENERGY INC, 8-K, 11/6/2019 + + + + + +TABLE OF CONTENTS ARTICLE 1 - DEFINITIONS 1 ARTICLE 2 - PROGRAM 1 ARTICLE 3 - PROGRAM GOVERNANCE 2 ARTICLE 4 - DISCLOSURE, CONFIDENTIALITY AND RESTRICTED USE 3 ARTICLE 5 - PUBLICITY AND PUBLICATIONS 5 ARTICLE 6 - OWNERSHIP / PROCUREMENT OF PROGRAM RESULTS 6 ARTICLE 7 -LICENSE TO PROGRAM RESULTS 7 ARTICLE 8 - LICENSE TO BACKGROUND INFORMATION AND PATENTS 8 ARTICLE 9 - INFRINGEMENT OF THIRD PARTY PATENTS 11 ARTICLE 10 - PAYMENT 11 ARTICLE 11 - REPRESENTATIONS, WARRANTIES, INDEMNITIES AND LIABILITIES 13 ARTICLE 12 - TERM AND TERMINATION 14 ARTICLE 13 - ARBITRATION AND GOVERNING LAW 17 ARTICLE 14 - ASSIGNMENT 18 ARTICLE 15 - FORCE MAJEURE 18 ARTICLE 16 - ADDRESSES AND NOTICES 18 ARTICLE 17 - COMPLIANCE 19 ARTICLE 18 - RECORDS AND AUDIT 20 ARTICLE 19 - TAXES 20 ARTICLE 20 - ADDITIONAL PROVISIONS 20 APPENDIX A - DEFINITIONS 24 APPENDIX B - SAMPLE PROJECT DESCRIPTION FORMAT 30 + +Source: FUELCELL ENERGY INC, 8-K, 11/6/2019 + + + + + +JOINT DEVELOPMENT AGREEMENT + +This Agreement is made as of the Effective Date between: + +ExxonMobil Research and Engineering Company, a corporation of the State of Delaware having offices at 1545 Route 22 East, Annandale, New Jersey 08801 ("ExxonMobil"); and + +FuelCell Energy, Inc., a corporation of the State of Delaware having offices at 3 Great Pasture Road, Danbury, Connecticut 06810 ("FCE"). + +ExxonMobil and FCE are engaged in collaborative research and development projects to evaluate and develop Molten Carbonate Fuel Cells (MCFCs) to reduce carbon dioxide emissions (i.e., achieve low cost carbon dioxide capture). ExxonMobil and FCE wish to further the research and development efforts to evaluate and develop new and/or improved MCFCs to reduce carbon dioxide emissions from industrial and power sources ("Scope"). Therefore, in consideration of the foregoing premises and mutual covenants contained herein, ExxonMobil and FCE (each a "Party" and collectively the "Parties") agree as follows: + +ARTICLE 1 - DEFINITIONS + +1.01 Definitions. The terms appearing in this Agreement in initial capital letters, not otherwise defined in the preamble or body of this Agreement, are defined in Appendix A. + +ARTICLE 2 - PROGRAM + +2.01 Program / Projects. The collaborative research and development effort will comprise one or more mutually agreed upon projects within the Scope during the Term of this Agreement (each a "Project" and, collectively, the "Projects" or the "Program"). The details of each Project will be described in a written, mutually agreed upon document ("Project Description") - a template for which is set forth in Appendix B. Each Project Description will specify the scope and content of the Project, the work to be undertaken by each Party and potential third parties, the deliverables, the timing, any payments to be made not otherwise set forth in this Agreement, and any other related objectives and expectations. When completed and signed by duly authorized representatives of both Parties, each Project Description will become part of this Agreement and will be governed by the terms and conditions of this Agreement. Neither Party makes any representations as to the number, frequency, or monetary value of the Projects, except as otherwise set forth herein or in any Project Description. + +2.02 Subcontracting. ExxonMobil hereby consents to FCE hiring trade contractors commonly used for facility modifications and individual engineering contractors and individual staff from temporary agencies as needed to perform work pursuant to a Project Description, provided that such contractors and staff are under confidentiality and use restrictions no less restrictive than the terms and conditions set forth herein. + +2.03 Work Exclusivity/Independent Work. During the Term of this Agreement, FCE will not conduct any Work using Generation 1 Technology in Carbon Capture Applications or any Work using Generation 2 Technology, independently or with third parties outside this Agreement, without prior written approval from ExxonMobil. Notwithstanding the foregoing, ExxonMobil hereby grants approval for FCE solely to conduct Authorized Work using Generation 1 Technology with Authorized Third Parties for Carbon Capture Applications and any Work using Generation 2 Technology solely for Power Applications and Hydrogen Applications. + +Page 1 of 31 + +Source: FUELCELL ENERGY INC, 8-K, 11/6/2019 + + + + + +ARTICLE 3 - PROGRAM GOVERNANCE + +3.01 Steering Committee. Promptly after the Effective Date, the Parties will establish a committee that will oversee technical support and provide overall supervision and administrative guidance for the Program ("Steering Committee" or "SC"), further detailed as follows - + +(a) Composition. Each Party will appoint in writing one or more of its employees as SC members. Each Party will have the right to change its SC members at any time by giving written notice of such change to the other Party. + +(b) Meetings. Meetings of the SC will be in person or by phone at a location and time agreed to in advance by the SC members. + +(c) Other Attendees. In addition to the attendance of SC members, with prior written notice to the other Party's SC members, each Party may also bring to any SC meeting such technical and other advisors as it may deem appropriate, provided that such advisors are employees of a Party or its Affiliates and are under written confidentiality and use restrictions at least as strict as those imposed herein. Otherwise, a Party's additional invitees may attend a SC meeting only with the other Party's advance written approval. + +(d) Responsibilities. The responsibilities of the SC will include, but are not limited to: + +i. Project Endorsement and Monitoring. The SC will review and approve each Project Description and amendment thereto prior to execution by the Parties. (However, no Project Description or amendment thereto will be effective unless and until it is executed by duly authorized representatives of both Parties.) The SC will periodically monitor the ongoing status of all Projects, and make adjustments to priorities within and between the Projects. + +ii. Dispute Resolution. Assist the Parties in resolving any disputes. + +(e) Votes. Each Party only gets one vote on the SC regardless of the number of SC members it appoints. Except as otherwise stated in this Agreement, all decisions by the SC will be by unanimous agreement. In the absence of unanimity, ExxonMobil's SC representatives will have final decision making authority with respect to only the following decisions required by the SC: whether and where to seek patent protection and whether to maintain patent assets, subject to the provisions of Paragraph 6.04 (Solicitation of Program Patents Discretionary). + +(f) Minutes. All decisions by the SC will be documented in agreed upon minutes distributed to SC members after the meeting. + +(g) No Amendment Rights. The SC may recommend but has no authority to amend the terms and conditions of this Agreement. + +(h) Costs. ExxonMobil will bear its own costs associated with participating in the SC. FCE's costs and expenses associated with its participation in the SC are included in each Project's budget as Direct Costs. + +3.02 Technical Managers. Each Party will appoint one manager for each Project ("Technical Manager"). The Technical Managers will be responsible for the coordination of all technical activities arising under such Project, and will serve as their Party's technical liaison with the SC for the Project. Each Party will promptly notify the other Party in writing upon changing the appointments. The Technical Managers for each Project will be the primary technical contacts between the Parties for that Project. The Technical Managers for each Project will jointly: + +• direct the work performed under a Project in accordance with the terms and conditions of the Project Description; + +Page 2 of 31 + +Source: FUELCELL ENERGY INC, 8-K, 11/6/2019 + + + + + +• report to the SC on the progress of technical activities conducted under the Project; + +• monitor and coordinate all intellectual property activities relative to each Project; and + +• make recommendations to the SC on proposed publications containing Program Information. + +Unless otherwise mutually agreed, the Technical Managers for a Project will meet in person at least once each calendar quarter during a Project at such locations as the Technical Managers agree. The Technical Managers will communicate regularly by telephone or similar means between such meetings. + +ARTICLE 4 - DISCLOSURE, CONFIDENTIALITY AND RESTRICTED USE + +4.01 Program Information Disclosure, Confidentiality and Use Restriction. FCE will promptly disclose to ExxonMobil, in written or other tangible form, any and all Program Information including any Program Inventions. Except as otherwise permitted under this Agreement, FCE agrees to hold Program Information in confidence, and not to disclose or make it available to any third party without the express prior written consent of ExxonMobil, for a period commencing on the Effective Date and ending twenty (20) years thereafter. Without the express prior written consent of ExxonMobil, FCE agrees to use and practice Program Information only for the Program or as authorized in Article 7 (License to Program Results). + +4.02 Background Information Disclosure, Confidentiality and Use Restriction. Each Party will make available its Background Information to the other Party that it believes will be useful in carrying out work under the Program. Except as otherwise permitted under this Agreement, each Party agrees to hold the Background Information it receives from the other Party in confidence, and to not disclose or make available the other Party's Background Information to any third party without the express prior written consent of the other Party, for a period commencing on the Effective Date and ending twenty (20) years thereafter. Without the express prior written consent of the other Party, each Party agrees to use and practice the other Party's Background Information only for the Program or as authorized in Article 8 (License to Background Information and Patents). + +4.03 Non-Analysis of Background Samples. Except as otherwise agreed by the Parties in writing, each Party agrees not to determine or have determined the composition or physical structure of any Background Sample received from the other Party, which includes unused, used and spent Background Samples or portions thereof, whether by analyzing, having analyzed, inspection, reverse engineering or otherwise. + +4.04 Information Handling Obligations. Each Party will endeavor to mark Confidential Information as follows: + +(a) Confidential Information first disclosed in tangible form or electronically will be marked by the Disclosing Party as "confidential" or "proprietary" or with words of similar import when provided, indicating whether the information is "Program Information" or "Background Information"; + +(b) Confidential Information first disclosed orally or by visual display will be identified by the Disclosing Party as "confidential" or "proprietary" or with words of similar import at first disclosure and subsequently confirmed as confidential in a summary provided in an e-mail or other written communication delivered to the other Party within thirty (30) days after first disclosure, that references the date of the confidential disclosure indicating whether the information is "Program Information" or "Background Information"; and + +(c) If a Sample is sent to the other Party, the Sample will be marked by the Disclosing Party as "confidential" or "proprietary" or with words of similar import at the time of disclosure indicating whether the Sample is "Program Information" or "Background Information". + +Page 3 of 31 + +Source: FUELCELL ENERGY INC, 8-K, 11/6/2019 + + + + + +The failure to appropriately mark information/materials as "confidential" or "proprietary" upon initial disclosure to the Receiving Party will not be considered a waiver of confidentiality. Information/materials marked as "proprietary" or "confidential" when first disclosed, without further identification of the category of confidential information, will be presumptively considered and treated as Program Information until the Disclosing Party notifies the Receiving Party otherwise in writing. + +4.05 Exceptions. For the purposes of this Agreement, the obligations of confidentiality and restricted use herein shall not apply to any information or materials to the extent the Receiving Party can establish by documentary evidence that one or more of the following exceptions apply: + +a. the information or material was already in the Receiving Party's or its Affiliate's lawful possession (free of any confidentiality and use restrictions) and was not previously acquired directly or indirectly from the other Party under a current obligation of confidentiality; + +b. the information or material was already in the public domain or subsequently entered the public domain after disclosure through no fault of the Receiving Party; + +c. the information or material was or is hereafter furnished to the Receiving Party, or its Affiliate, on a non- confidential basis by a third party legally entitled to provide the information or material without restriction; + +d. the information or material was independently developed by employees or agents of the Receiving Party or its Affiliate who did not have access to relevant information provided by the Disclosing Party; and/or + +e. the information or material was released from the confidentiality obligations of this Agreement by the Disclosing Party's written authorization. + +The later occurrence of any one of the aforementioned exceptions will not excuse any failure to adequately protect Confidential Information pursuant to this Agreement prior to the existence of the exception. More specific Confidential Information will not be deemed to be within the foregoing exceptions merely because it is embraced by more general information that is publicly available or in the possession of Receiving Party pursuant to one of the exceptions. Also a combination of features will not be deemed within the foregoing exceptions merely because individual features are publicly available or in Receiving Party's possession pursuant to one of the exceptions. + +4.06 Disclosure to Affiliates, Contractors, and Sub-licensees. Notwithstanding anything to the contrary in this Agreement, a Receiving Party may disclose a Disclosing Party's Confidential Information to its Affiliates, and said Receiving Party may disclose the Disclosing Party's Confidential Information to their respective contractors providing services in furtherance of a Project as well as to permitted sub-licensees hereunder, provided such Affiliates, contractors, and sub-licensees have agreed to be bound by confidentiality and limited use obligations no less protective of Disclosing Party's Confidential Information than the terms contained herein. The Receiving Party will be liable to the Disclosing Party for any unauthorized disclosure or misuse of the Disclosing Party's Confidential Information by such Affiliates, contractors, and sub-licensees. + +4.07 Compelled Disclosure. In the event that a Receiving Party (or its Affiliate) is required by law, court order or rule, or government authority to disclose the Confidential Information that Receiving Party is obligated to hold in confidence pursuant to Paragraph 4.01 (Program Information Disclosure, Confidentiality and Use Restriction) and/or Paragraph 4.02 (Background Information Disclosure, Confidentiality and Use Restriction), then the Receiving Party will promptly notify the Disclosing Party prior to disclosure in order to enable the Disclosing Party to seek a protective order at the Disclosing Party's sole expense. In any event, the Receiving Party who is required to disclose such information will request confidential treatment of the information and only disclose the minimum amount of information reasonably necessary to comply with such law, court order or rule, or government authority. + +Page 4 of 31 + +Source: FUELCELL ENERGY INC, 8-K, 11/6/2019 + + + + + +4.08 Disclosures in Patent Applications. Notwithstanding anything else in this Agreement, ExxonMobil may disclose the minimum amount of FCE's Confidential Background Information reasonably necessary to support a Program Patent subject to the review process in Paragraph 6.02 (Solicitation of Program Patents). + +4.09 Return/Destruction. At the Disclosing Party's written request, the Receiving Party agrees to return to Disclosing Party or, at Disclosing Party's option, dispose of or destroy, Disclosing Party's Confidential Background Information and any of Disclosing Party's unused Background Samples. However, notwithstanding anything else in this Paragraph, the Receiving Party may retain such documents and materials to the extent such documents and materials are identified as necessary for beneficial use of a further Project or a license granted herein and the Receiving Party has notified the Disclosing Party in writing of the need for such documents and materials. Any dispute over whether such documents and materials are necessary shall be escalated to senior management for resolution. Furthermore, notwithstanding anything else in this Paragraph 4.09, the Receiving Party may retain one (1) copy of such documents and materials in its secure files for the sole purpose of administering its obligations under this Agreement and the Receiving Party will not be required to purge or cause others to purge electronic archival media automatically generated by backup computer systems if said media will be destroyed pursuant to a systematic records retention process and not otherwise utilized. + +4.10 Third Party Information. Neither Party will knowingly disclose to the other Party any proprietary or confidential information belonging to a Non-Affiliated Third Party without the Receiving Party's prior written consent. + +ARTICLE 5 - PUBLICITY AND PUBLICATIONS + +5.01 Publicity. During the Term, and except for disclosures pursuant to Paragraphs 4.06 (Disclosure to Affiliates, Contractors and Sub-licensees), 4.07 (Compelled Disclosure), 4.08 (Disclosure in Patent Applications), or as otherwise permitted in this Agreement, the Parties agree that they will not disclose to any Non-Affiliated Third Party that they have entered into this Agreement, nor make any publications or publicity releases concerning the nature of this Agreement, without first acquiring the written consent of the other Party, which consent will not be unreasonably withheld, conditioned or delayed. + +Notwithstanding the foregoing, either Party may make such disclosure as it may determine to be required by applicable law (such as filing with the U.S. Securities and Exchange Commission), provided that in such case the Disclosing Party will provide advance notice of such disclosure to the other Party and, where legally permitted, an opportunity to redact its sensitive proprietary information from such disclosure. + +Further, during the Term, each Party agrees that it will not use the name, service mark or trademark of the other Party, or any Affiliate of the other Party, or provide any indication from which the identity of the other Party or its Affiliate may reasonably be inferred in any publicity release or other announcement, without first obtaining the written approval of the other Party. Notwithstanding the foregoing, each Party hereby grants approval for the other Party to use its name, service mark or trademark in promotional materials that have a generally accepted description of the Scope, which such generally accepted description shall be mutually agreed to in writing beforehand. An exception to this Paragraph will include U.S. patent prosecution that refers to this Agreement as a "joint research agreement" under 35 U.S.C. § 102(c). + +Further, each Party agrees to include appropriate attribution of the other Party in any publicity release, advertising, print, media or other announcement concerning the use of MCFCs for carbon capture, the Program or the Program Results. + +Page 5 of 31 + +Source: FUELCELL ENERGY INC, 8-K, 11/6/2019 + + + + + +5.02 Publications. The Parties recognize that Program Information may be suitable for publication either jointly or individually. Unless the other Party specifically requests in writing not to be credited, appropriate recognition of the support or encouragement of the other Party will be included in such publications. The Parties agree to cooperate with each other on the preparation of any such publications. If any proposed publication contains the non-publishing Party's Background Information, such information (including reference thereto) will be deleted at the non-publishing Party's request. No publication that violates Article 4 (Disclosure, Confidentiality and Restricted Use) or Paragraph 5.01 (Publicity) will be permitted without the prior written consent of the other Party which may be obtained from a duly authorized member of each Party. + +ARTICLE 6 - OWNERSHIP / PROCUREMENT OF PROGRAM RESULTS + +6.01 Ownership of Program Results. ExxonMobil will solely own Program Information, Program Patents, and copyrightable works resulting from the Program (collectively, "Program Results"), irrespective of whether the Program Results are conceived, created, developed or acquired by employees or other representatives of FCE, ExxonMobil, or both. FCE will assign, and hereby assigns, to ExxonMobil ownership of Program Results. + +6.02 Solicitation of Program Patents. ExxonMobil will have the sole responsibility and the exclusive right to prepare, file, prosecute, and maintain Program Patents pursuant to Paragraph 6.01 (Ownership of Program Results). Such right will include the right to determine if, where, and when patent applications are filed, and the scope of such patent applications. Notwithstanding the foregoing, ExxonMobil shall provide FCE notice of its intent to file any patent application containing FCE's Confidential Background Information and an opportunity for FCE to review any such patent application for FCE's Confidential Background Information. If FCE does not respond within thirty (30) days from ExxonMobil seeking such consent, then ExxonMobil may proceed with such filing. The cost of preparing, filing, prosecuting, and maintaining any such patent applications that ExxonMobil decides to pursue and maintain, as well as the cost of maintaining any patents resulting therefrom, will be paid in full by ExxonMobil. For Program Patents, if one or more employees or other representatives of FCE are determined to be inventors, then FCE will: + +(i) cause its employees, contractors, and consultants to render reasonable and timely assistance to ExxonMobil and its attorneys or agents; + +(ii) assign, and will cause its and its Affiliates' employees, contractors, and consultants to assign, its right, title, and interest in and to such Program Patent to ExxonMobil for filing; and + +(iii) cause its and its Affiliate employees, contractors, and consultants, to execute any documents as may be required to effect such assignments, or file, prosecute, and maintain any patent applications or patents that are based on, derived from, or protect such Program Patent. + +ExxonMobil will hold formal legal title to all such patent applications, and resulting patents. + +6.03 Cooperation in Soliciting Program Patents. The Parties agree to cooperate in the preparation, filing, prosecution, and securing of patent applications and patents, all without charge to such other Party. When ExxonMobil's patent counsel sends to FCE documents for review that contains FCE Confidential Background Information, the Parties will follow the review process pursuant to Paragraph 6.02 (Solicitation of Program Patents). Upon FCE's written request, ExxonMobil will provide a courtesy copy of any Program Patent that does not contain any FCE Confidential Background Information prior to filing such document. All Program Patent filings, and the status thereof, will be reported to the Steering Committee. + +Page 6 of 31 + +Source: FUELCELL ENERGY INC, 8-K, 11/6/2019 + + + + + +6.04 Solicitation of Program Patents Discretionary. ExxonMobil has the unencumbered right to file or not to file, prosecute, defend, maintain, abandon, or enforce any Program Invention or Program Patent. Notwithstanding the foregoing, in the event ExxonMobil decides not to prosecute, defend, enforce, maintain or decides to abandon any Program Patent, then ExxonMobil will provide notice thereof to FCE, and FCE will then have the right, but not the obligation, to prosecute or maintain the Program Patent and sole responsibility for the continuing costs, taxes, legal fees, maintenance fees and other fees associated with that Program Patent. The ownership of such Program Patent will remain with ExxonMobil. + +The abandonment of a pending patent application in favor of a continuation patent application, continuation-in-part patent application, or divisional patent application, or in favor of another application of a related subject (e.g. to overcome a double patenting rejection) and ExxonMobil's decision not to file any Program Patent, will not be deemed to be an election not to continue to prosecute, issue, or maintain any Program Patent under Paragraph 6.04. In addition, (a) the failure to appeal a patent office or any administrative tribunal or judicial decision adverse to any patent or patent application, or (b) in the case of a co-pending non-provisional application in the U.S., (i) failure to enter an international patent application into the national phase, or (ii) to ratify a patent in any country, will not be deemed to be an election not to continue to prosecute, issue, or maintain any Program Patent under Paragraph 6.04. + +6.06 Joint Research Agreement. The Parties acknowledge and agree that this Agreement is a "joint research agreement" as defined in 35 U.S.C. §100(h). The specification of any patent application filed pursuant to this Agreement may contain (or may be amended to contain) language required to invoke 35 U.S.C. §102(b)(2)(C) and §102(c) as applicable. Notwithstanding anything to the contrary in Paragraph 5.01 (Publicity), ExxonMobil will have the right to invoke these statutory provisions when exercising its rights to file patent applications under this Agreement, without the prior written consent of FCE, subject to the provisions of Paragraph 6.02 (Solicitation of Program Patents). Where ExxonMobil intends to invoke these statutory provisions, FCE, upon request, will cooperate and coordinate its activities with ExxonMobil with respect to any submissions, filings or other activities in support thereof. + +6.07 Inventor Awards. A Party will not be responsible for any inventor awards or compensation that may be owed to the other Party's employee(s) or to any employees of the other Party's Affiliates, agents, consultants, or contractors, who are inventors of any Program Invention. + +6.08 Disposal of Prior JDA Project Patents. During the Term of this Agreement and for two (2) years thereafter, in the event that either Party decides to sell or convey its interest in or otherwise dispose of any Prior JDA Project Patent to any Non-Affiliated Third Party, such Party will inform the other Party, who will then have the right of first refusal to purchase or otherwise acquire the sole interest at same or better terms. Any sale of a Prior JDA Project Patent to a Non-Affiliated Third Party is subject to the licenses granted and other obligations set forth in this Agreement. + +ARTICLE 7 - LICENSE TO PROGRAM RESULTS + +7.01 Grants to FCE of Program Results. + +(a) FCE's R&D Rights. ExxonMobil grants FCE a worldwide, non-exclusive, royalty-free, non-transferable (except pursuant to Article 14 (Assignment)), non-sub-licensable (except as set forth in this Paragraph 7.01(a)) right and license to practice Program Results solely to conduct research and development for the Program. More particularly, said right and license to practice includes the right to use, reproduce, and create derivative works of Program Information under applicable copyrights and to make, use, and import (but not sell or offer to sell) under the claims of Program Patents, in each case solely for research and development for the Program. Said right and license may be extended to contractors performing work on behalf of FCE but is not otherwise sub-licensable. + +Page 7 of 31 + +Source: FUELCELL ENERGY INC, 8-K, 11/6/2019 + + + + + +(b) FCE's Commercial Rights. ExxonMobil agrees to grant or hereby grants FCE the following rights and licenses: + +(1) Power Applications and Hydrogen Applications. ExxonMobil grants FCE a worldwide, non-exclusive, royalty-free, perpetual, irrevocable (except as stated in Paragraphs 12.03 (Failure to Perform), 12.04 (Other Termination), and 12.05 (Bankruptcy)), sub-licensable, non-transferable (except pursuant to Article 14 (Assignment)), right and license to practice Program Results solely for Power Applications and Hydrogen Applications. More particularly, said right and license to practice Program Results solely for Power Applications and Hydrogen Applications includes the right to use, reproduce, and create derivative works of Program Information under applicable copyrights and to make, use, import, and sell or offer to sell under the claims of Program Patents; and + +(2) Carbon Capture Applications. In the event ExxonMobil notifies FCE that it has formally decided not to pursue Generation 2 Technology for Carbon Capture Applications, then upon FCE's written request, ExxonMobil agrees to negotiate a grant to FCE, under commercially reasonable terms to be determined in good faith, a worldwide, non-exclusive, royalty-bearing (with the royalty to be negotiated), non-sub- licensable (except as set forth in this Paragraph 7.01(b)(2)), non-transferable (except pursuant to Article 14 (Assignment)), right and license to practice Program Results solely for Carbon Capture Applications. More particularly, said right and license to practice Program Results solely for Hydrogen Applications and Carbon Capture Applications will include the right to use, reproduce, and creative derivative works of Program Information under applicable copyrights and to make, use, import, and sell or offer to sell under the claims of Program Patents. Said right and license will be extendable to contractors performing work on behalf of FCE but will not otherwise sub-licensable. Nothing in this Paragraph 7.01(b)(2) will create an obligation on the part of ExxonMobil to grant FCE a right or license under Program Results if the Parties do not agree on the terms and conditions of such license. + +ARTICLE 8 - LICENSE TO BACKGROUND INFORMATION AND PATENTS + +8.01 Ownership Retained. Each Party will retain its title and ownership rights to its Background Information and Background Patents in all applicable jurisdictions. + +8.02 Grant of Rights to Background Information and Background Patents. + +(a) Grant to ExxonMobil. + +1) Carbon Capture Applications and Hydrogen Applications. To the extent not already granted pursuant to the License Agreement, FCE grants ExxonMobil and its Affiliates a worldwide, non-exclusive, royalty-free, irrevocable, perpetual, sub-licensable, non-transferable (except pursuant to Article 14 (Assignment)) right and license to practice FCE Background Information and FCE Background Patents for Generation 2 Technology in Carbon Capture Applications and Hydrogen Applications. More particularly, said right and license to practice FCE Background Information and FCE Background Patents for Generation 2 Technology in Carbon Capture Applications and Hydrogen Applications includes the right to use, reproduce, and create derivative works of FCE Background Information under applicable copyrights and the right to make, use, import, and sell or offer to sell under the claims of FCE Background Patents. + +Page 8 of 31 + +Source: FUELCELL ENERGY INC, 8-K, 11/6/2019 + + + + + +2) Other Applications. In the event FCE notifies ExxonMobil that it has formally decided not to pursue Generation 2 Technology for Power Applications, then upon ExxonMobil's written request, FCE agrees to negotiate a grant to ExxonMobil and its Affiliates, under commercially reasonable terms to be determined in good faith, a worldwide, royalty-bearing (with the royalty to be negotiated), non-exclusive, sub-licensable right and license to practice FCE Background Information and FCE Background Patents for Generation 2 Technology in any application outside of Carbon Capture Applications and Hydrogen Applications. More particularly, said right and license to practice FCE Background Information and FCE Background Patents for Generation 2 Technology in any application outside of Carbon Capture Applications and Hydrogen Applications will include the right to use, reproduce, and create derivative works of FCE Background Information under applicable copyrights and the right to make, use, import, and sell or offer to sell under the claims of FCE Background Patents. Nothing in this Paragraph 8.02(a)(2) will create an obligation on the part of FCE to grant ExxonMobil a license or right under FCE Background Patents or FCE Background Information if the Parties do not agree on the terms and conditions of such license. + +(b) Grant to FCE. + +1) Generation 1 Technology. + +i. Outside of Carbon Capture Applications. ExxonMobil grants FCE a worldwide, non-exclusive, royalty- free, non-sub-licensable (except as set forth herein), perpetual, irrevocable (except as stated in Paragraphs 12.03 (Failure to Perform), 12.04 (Other Termination), and 12.05 (Bankruptcy)), non- transferable (except pursuant to Article 14 (Assignment)) right and license to practice ExxonMobil Background Information and ExxonMobil Background Patents for Generation 1 Technology in any applications outside of Carbon Capture Applications. More particularly, said right and license to practice ExxonMobil Background Information and ExxonMobil Background Patents for Generation 1 Technology in any applications outside of Carbon Capture Applications includes the right to use, reproduce, and create derivative works of ExxonMobil Background Information under applicable copyrights and the right to make, use, import, and sell or offer to sell under the claims of ExxonMobil Background Patents. All rights and licenses in this Paragraph (b)(1)(i) may be extended to contractors performing work on behalf of FCE but are not otherwise sub-licensable. + +ii. Authorized Third Parties. ExxonMobil grants FCE a worldwide, non-exclusive, royalty-free, non-sub- licensable (except as set forth herein), perpetual, irrevocable (except as stated in Paragraphs 12.03 (Failure to Perform), 12.04 (Other Termination), and 12.05 (Bankruptcy)), non-transferable (except pursuant to Article 14 (Assignment)) right and license to practice ExxonMobil Background Information and ExxonMobil Background Patents for Generation 1 Technology in Carbon Capture Applications, solely to conduct Authorized Work with Authorized Third Parties. More particularly, said right and license to practice ExxonMobil Background Information and ExxonMobil Background Patents for Generation 1 Technology in Carbon Capture Applications includes the right to use, reproduce, and create derivative works of ExxonMobil Background Information under applicable copyrights and the right to make, use, and import (but not sell or offer to sell) under the claims of ExxonMobil Background Patents, solely to conduct Authorized Work with Authorized Third Parties. All rights and licenses in this Paragraph (b)(1)(ii) may be extended to contractors performing work on behalf of FCE but are not otherwise sub-licensable. + +Page 9 of 31 + +Source: FUELCELL ENERGY INC, 8-K, 11/6/2019 + + + + + +iii. Carbon Capture Application. In the event that ExxonMobil fails to notify FCE before the end of the Term of the Agreement of ExxonMobil's intent to negotiate a subsequent or follow-on commercial agreement, ExxonMobil agrees to negotiate a grant to FCE, under commercially reasonable terms to be determined in good faith, a worldwide, royalty-free, non-exclusive, non-sub-licensable (except as set forth herein) right and license to practice ExxonMobil Background Information and ExxonMobil Background Patents for Generation 1 Technology in Carbon Capture Applications. More particularly, said right and license to practice ExxonMobil Background Information and ExxonMobil Background Patents for Generation 1 Technology in Carbon Capture Applications will include the right to use, reproduce, and create derivative works of ExxonMobil Background Information under applicable copyrights and the right to make, use, import, and sell or offer to sell under the claims of ExxonMobil Background Patents. The rights and licenses in this Paragraph (b)(1)(iii) will be extendable t o contractors performing work on behalf of FCE but will not otherwise sub-licensable. Nothing in this section will create an obligation on the part of ExxonMobil to grant FCE a license or right under ExxonMobil Background Patents or ExxonMobil Background Information if the Parties do not agree on the terms and conditions of such license. + +2) Generation 2 Technology. + +i. Power Applications and Hydrogen Applications. ExxonMobil grants FCE a worldwide, non-exclusive, royalty-free, non-sub-licensable (except as set forth herein), perpetual, irrevocable (except as stated in Paragraphs 12.03 (Failure to Perform), 12.04 (Other Termination), and 12.05 (Bankruptcy)), non- transferable (except pursuant to Article 14 (Assignment)) right and license to practice ExxonMobil Background Information and ExxonMobil Background Patents for Generation 2 Technology in Power Applications and Hydrogen Applications. More particularly, said right and license to practice ExxonMobil Background Information and ExxonMobil Background Patents for Generation 2 Technology in Power Applications and Hydrogen Applications includes the right to use, reproduce, and create derivative works of ExxonMobil Background Information under applicable copyrights and the right to make, use, import, and sell or offer to sell under the claims of ExxonMobil Background Patents. The right and license in this Paragraph (b)(2)(i) may be extended to contractors performing work on behalf of FCE but is not otherwise sub-licensable. + +ii. Outside of Power Applications and Hydrogen Applications. In the event ExxonMobil notifies FCE that it has formally decided not to pursue Generation 2 Technology for Carbon Capture Applications, then upon FCE's written request, ExxonMobil agrees to grant to FCE, under commercially reasonable terms to be determined in good faith, a worldwide, royalty-bearing (with the royalty to be negotiated), non- exclusive, sub-licensable, right and license to practice ExxonMobil Background Information and ExxonMobil Background Patents for Generation 2 Technology in any application outside of Power Applications and Hydrogen Applications. More particularly, said right and license to practice ExxonMobil Background Information and ExxonMobil Background Patents for Generation 2 Technology in any application outside of Power Applications includes the right to use, reproduce, and create derivative works of ExxonMobil Background Information under applicable copyrights and the right to make, use, import, and sell or offer to sell under the claims of ExxonMobil Background Patents. Nothing in this section will create an obligation on the part of ExxonMobil to grant FCE a license or right under ExxonMobil Background Patents or ExxonMobil Background Information if the Parties do not agree on the terms and conditions of such license. + +Page 10 of 31 + +Source: FUELCELL ENERGY INC, 8-K, 11/6/2019 + + + + + +(c) No Further Rights. Notwithstanding any other provision in this Agreement, under no circumstances will a Party to this Agreement, as a result of this Agreement, have any right under or to the Background Information and Background Patents of the other Party except as set forth in this Article. Any other right and license to Background Information and Background Patents not found in this Article will be subject to a separate license agreement to be negotiated between the Parties, as necessary. + +ARTICLE 9 - INFRINGEMENT OF THIRD PARTY PATENTS + +9.01 Notification of Potential Infringement. If either Party becomes aware of alleged infringement of a third party's intellectual property rights relating to its work under this Agreement, such Party will promptly notify the other Party of such discovery and the Parties will consult with each other and discuss any action to be taken. + +9.02 Defense of Infringement Claims. Each Party will be responsible for all expenses (including attorney fees) and damages (e.g. royalties, settlement costs) incurred in defense of a claim of infringement by its own equipment, products, or processes, or by equipment, products, or processes of its Affiliates, contractors or consultants. + +9.03 Settlements. Each Party may resolve any risk or threat, or settle any suits or action related to use of any Program Results, without the prior approval of the other Party unless such resolution or settlement would cause the other Party to be: (a) obligated to make any payment or part with any tangible or intangible property right, or (b) obligated to assume any obligations with respect thereto, or (c) subject to any injunction. + +ARTICLE 10 -PAYMENT + +10.01 Project Costs. + +a) ExxonMobil will reimburse FCE for Research Costs (i.e., cumulative FTE Costs and Direct Costs) for each Project subject to total caps set forth herein and in the relevant Project Description. Research Costs of FCE paid for by ExxonMobil will be limited to FTE Costs for time actually spent on the Program and Direct Costs actually incurred and approved in advance by the Steering Committee. The cumulative Research Costs for the Program will not exceed forty-five million United States dollars ($45,000,000 USD) over the Term of the Agreement ("Total Research Cost"). ExxonMobil will reimburse FCE for Research Costs after receipt of invoices on a monthly basis. Invoices for Direct Costs will be supported by relevant third party invoices received by FCE documenting such costs. Materials shall be invoiced as incurred and subject to a thirty percent (30%) service fee. All such payments will be made after ExxonMobil's receipt of invoices in accordance with the invoicing procedures specified in Paragraphs 10.01(b)-(e) and in Paragraph 10.04 (Invoices). + +b) First Invoice. FCE will invoice ExxonMobil an advance payment on or promptly after the Effective Date ("Initial Payment"), said Initial Payment not to exceed one-twelfth (1/12) of the Total Research Cost (i.e., three-million and seven-hundred and fifty thousand United States dollars ($3,750,000 USD)). Notwithstanding anything contained herein to the contrary, including Paragraph 10.04 (Invoices), such payment will be made within fifteen (15) days after ExxonMobil's receipt of invoice. + +c) Subsequent Monthly Invoices. Within fifteen (15) days after the end of each calendar month that occurs during the remainder of the Term of the Agreement, subject to Paragraph 10.01(e), FCE will calculate and invoice ExxonMobil for the actual amounts incurred (for charges permitted in accordance with the respective Project Description(s)) during the immediately preceding calendar month. + +Page 11 of 31 + +Source: FUELCELL ENERGY INC, 8-K, 11/6/2019 + + + + + +d) End of Term of the Program. + +i. By the fifteenth (15th) day of the last month of the Term of the Agreement, ExxonMobil will have been invoiced for the actual charges incurred in all of the prior months of the Term of the Agreement, but the most recently issued invoice will not be due. Therefore, at such time ExxonMobil will not have yet paid for the last two (2) months of the Term of the Agreement. When FCE issues the invoice during the last month of the Term of the Agreement ("8th Inning Invoice"), FCE will apply some or all of the Initial Payment, as applicable, as credit against the amount due. + +ii. Within fifteen (15) days after the end of the Term of the Agreement, FCE will issue an invoice ("9th Inning Invoice") for the actual charges incurred during the last month of the Term of the Agreement, subject to Paragraph 10.01(a). FCE will apply any balance of the Initial Payment remaining after the 8th Inning Invoice as a credit towards the amount due on the 9th Inning Invoice. If after applying such credit, a balance of the Initial Payment still remains, FCE will refund the balance to ExxonMobil within thirty (30) days, unless otherwise mutually agreed (such as the Parties mutually agreeing to enter into a new Project and apply the balance as a credit towards amounts payable by ExxonMobil thereunder). + +e) Maximum Charges. The invoices sent by FCE under the foregoing procedure for each year of the Agreement may not in the aggregate be more than half the Total Research Cost, without prior written consent of ExxonMobil or amendment to the Project Description. All such payments will be made after ExxonMobil's receipt of invoice in accordance with the invoicing procedures specified Paragraph 10.04 (Invoices). + +10.02 Up-Front Exclusivity and Technology Access Payment. In exchange for FCE working exclusively with ExxonMobil during the Term of the Agreement, pursuant to Paragraph 2.03 (Work Exclusivity/Independent Work), and ExxonMobil's access to FCE Background Patents, pursuant to Paragraph 8.02(a) (Grant of Rights to Background Information and Background Patents), on the Effective Date, FCE will separately invoice, and ExxonMobil will pay a one-time up-front fee ("Exclusivity and Technology Access Fee") of five million United States dollars ($5,000,000 USD). + +Such payment will be made within fifteen (15) days after ExxonMobil's receipt of invoice, notwithstanding anything contained herein to the contrary, including Paragraph 10.04 (Invoices). + +10.03 Milestone Payments. As further consideration for technical progress in the Program, ExxonMobil shall pay the following sums upon achievement of the following Program milestones ("Milestone Payments"): + +(a) ExxonMobil will pay FCE a first Milestone Payment of five million United States dollars ($5,000,000 USD) upon FCE achieving Milestone 1 to ExxonMobil's satisfaction; and + +(b) ExxonMobil will pay FCE a second and final Milestone Payment of five million United States dollars ($5,000,000 USD), upon FCE achieving Milestone 2 to ExxonMobil's satisfaction. + +All such Milestone Payments will be made after ExxonMobil's receipt of invoice in accordance with the invoicing procedures specified Paragraph 10.04 (Invoices). The obligation to pay any such installment ends upon termination of this Agreement by either Party for any reason prior to FCE achieving the respective milestone. + +Page 12 of 31 + +Source: FUELCELL ENERGY INC, 8-K, 11/6/2019 + + + + + +10.04 Invoices. FCE will invoice ExxonMobil for any amount due under a Project at the address (including the email address) in Article 16 (Addresses and Notices). Each invoice will identify this Agreement's identification number LAW-2019-3608, the number of the particular Project Description to which it pertains, and details of FTE Costs (including unique employee identifiers of the FTEs) and Direct Costs. FCE will not include charges relating to more than one Project Description in any given invoice. Except as otherwise specifically provided herein, ExxonMobil agrees to pay FCE the amount of each invoice under this Agreement within thirty (30) days following ExxonMobil's receipt. Notwithstanding the foregoing, if ExxonMobil has a good faith dispute regarding any amounts invoiced by FCE, ExxonMobil may withhold payment for the disputed amount, provided that ExxonMobil pays the undisputed amount and notifies FCE in writing of the specific amount and nature of the dispute promptly upon receipt of FCE's invoice in which case the Parties shall attempt to resolve the dispute in good faith. The Parties shall endeavor to resolve such dispute within fifteen (15) days of notice of the dispute, and ExxonMobil shall remit payment to FCE within fifteen (15) days of resolution of such dispute. + +All such payments by ExxonMobil to FCE will be made by wire transfer in United States Dollars. FCE shall provide the Bank Name, Bank Address, Bank Account, and Swift Code in each invoice. + +ARTICLE 11 - REPRESENTATIONS, WARRANTIES, INDEMNITIES AND LIABILITIES + +11.01 Mutual Representations and Warranties. Each Party hereby represents and warrants to the other, to the best of its knowledge, that: + +(a) as of the Effective Date: + +1. the execution, delivery and performance of this Agreement by such Party does not conflict with any agreement, instrument or undertaking, oral or written, to which it is a party or by which it may be bound, and + +2. all necessary consents, approvals and authorizations of all governmental authorities and third parties required to be obtained by such Party in connection with the execution, delivery, and performance of this Agreement have been or will be obtained; + +(b) it owns or controls, in the same sense of having the right to license or convey, any Background Information to be provided to the other Party hereunder, and at the date of transmittal to the other Party, such Background Information in the Disclosing Party's good faith belief will not be subject to any encumbrances or restrictions on use by any third party that would materially affect the Receiving Party's exploitation of the rights granted in this Agreement; and + +(c) all of its professional and technical personnel who perform services on or for all Projects are under written obligation: + +(1) not to disclose secret or confidential information except as authorized under this Agreement or by their employer; + +(2) to assign to their employer all Program Inventions; and + +(3) to assign to their employer sole ownership of copyrights to all copyrightable works created in connection with any Project. + +Page 13 of 31 + +Source: FUELCELL ENERGY INC, 8-K, 11/6/2019 + + + + + +11.02 Warranty and Liability Disclaimers. RECEIVING PARTY IS RESPONSIBLE FOR DETERMINING HOW TO USE THE INFORMATION AND MATERIALS PROVIDED HEREUNDER. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, DISCLOSING PARTY DISCLAIMS LIABILITY FOR ANY LOSS OR DAMAGE SUSTAINED BY RECEIVING PARTY (BUT NOT ANY THIRD PARTY) THAT MAY OCCUR FROM RECEIVING PARTY'S USE OF, OR RELIANCE ON, SUCH INFORMATION AND MATERIALS AND RECEIVING PARTY RELEASES DISCLOSING PARTY AND ITS AFFILIATES FROM AND FOR ANY SUCH LIABILITY, LOSS OR DAMAGE, EVEN IF CAUSED BY DISCLOSING PARTY'S OR ITS AFFILIATES' NEGLIGENCE EXCEPT AS PROVIDED IN PARAGRAPH 11.04 (EXCEPTIONS TO LIMITATIONS ON LIABILITY). NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, IS MADE REGARDING SUCH INFORMATION AND MATERIAL, OR ITS COMPLETENESS, MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE. + +11.03 Indirect or Enhanced Damages. In no event will either Party be liable to the other Party under this Agreement for any consequential, indirect, special, incidental, punitive or exemplary loss or damage, including, without limitation, business interruption, cost of capital, loss of anticipated revenues and profits, loss of goodwill or increased operating costs, whether arising from contract, warranty, tort, strict liability or otherwise regardless of whether the possibility of such losses or damages have been made known to the first Party, and each Party hereby expressly waives all such rights and remedies, except for breach of any confidentiality or restricted use provisions of this Agreement and except as provided in Paragraph 11.04 (Exceptions to Limitations of Liability). + +11.04 Exceptions to Limitations of Liability. Notwithstanding anything to the contrary in this Agreement, each Party will bear full responsibility, without limit, for the following: + +(i) Gross Negligence or Willful Misconduct attributable to its personnel, and, in no event, will a Party be required to release or indemnify the other Party for Gross Negligence or Willful Misconduct attributable to the other Party; and + +(ii) its legal obligations to third parties wherein nothing in this Agreement is intended to impair a party's contribution and indemnity rights under law with respect to third party claims. + +ARTICLE 12 - TERM AND TERMINATION + +12.01 Term. Unless sooner terminated in accordance with this Article, this Agreement will continue in full force beginning on the Effective Date and ending two (2) years thereafter ("Term"). + +12.02 Early Termination. The Parties recognize that circumstances may arise where this Agreement's early termination would be desirable. Accordingly, either Party may terminate this Agreement or all/part of a Project for any reason and at any time upon giving the other Party sixty (60) days prior written notice. In the event of early termination of a Project or this Agreement. In addition, if this Agreement is terminated by ExxonMobil, ExxonMobil will pay FCE reasonable non- refundable expenses incurred by FCE in satisfying authorized commitments entered into by FCE with third parties prior to receipt of the termination notice. FCE will uses its best efforts to minimize termination expenses and will give appropriate credit to ExxonMobil where applicable. The total amount paid FCE under this Agreement or for a Project, including all amounts paid following termination, will not exceed the maximum authorized charge specified in this Agreement or for a Project. + +Page 14 of 31 + +Source: FUELCELL ENERGY INC, 8-K, 11/6/2019 + + + + + +12.03 Failure to Perform. If ExxonMobil fails to fulfill a material monetary obligation or FCE fails to execute material tasks or obligations in material compliance with all criteria set forth in a respective mutually agreed upon Project Description, in the time and manner required herein, provided that in the case of FCE's tasks or obligations any non-compliance or delay in meeting said criteria is not due to ExxonMobil or force majeure pursuant to Paragraph 15.01 (Force Majeure), the non- defaulting Party may give written notice of intent to terminate this Agreement, specifying the details of such default. Unless the defaulting Party has remedied such default within the Cure Period, this Agreement may be terminated, without penalty, payment or prejudice to claims then accrued, by written notice to the defaulting Party by the non-defaulting Party specifying the date of termination which will be of immediate effect. In the event of termination under this Paragraph 12.03 where FCE is the defaulting Party, FCE's royalty-free licenses described in Paragraph 7.01(b)(1), 8.02(b)(1)(i), 8.02 (b)(1)(ii), 8.02(b)(1)(iii), and 8.02(b)(2)(i) will immediately convert to royalty-bearing licenses, with the royalty rate to be negotiated by the Parties in good faith. + +12.04 Other Termination. ExxonMobil may terminate this Agreement upon fifteen (15) days written notice, without penalty, payment or prejudice to claims and obligations then accrued, if FCE undergoes a Change in Control. Subject to requirements of applicable law, FCE will provide notice to ExxonMobil prior to, or promptly after, it becomes aware of any such Change in Control, and if prior notice is prohibited by applicable Law, as soon as practicable or after such notice is no longer prohibited, but in no event later than one (1) business day after any public announcement with respect to any such asset transfer or Change in Control. Notwithstanding anything else in this Agreement, in the event of termination under this Paragraph 12.04 ExxonMobil may terminate any licenses granted to FCE under this Agreement that would otherwise survive termination, taking into account the circumstances surrounding the Change in Control. Any licenses granted to ExxonMobil under this Agreement that would otherwise survive termination will continue to survive termination. + +12.05 Bankruptcy. + +(A) To the extent a court of competent jurisdiction determines that this Agreement is subject to assumption or rejection under Title 11 of the U.S. Code (the "Bankruptcy Code") or the applicable law of a bankruptcy or insolvency proceeding in a non-U.S. jurisdiction: + +(i) All rights and licenses granted to ExxonMobil and its Affiliates under or pursuant to this Agreement are, and will otherwise be deemed to be, for all purposes of Section 365(n) of the Bankruptcy Code, licenses of rights to "intellectual property" as defined in section 101 of the Bankruptcy Code. + +(ii) If a case is commenced under the Bankruptcy Code by or against FCE and this Agreement is rejected as provided in the Bankruptcy Code, and ExxonMobil or any of its Affiliates elects to retain its rights hereunder as provided in the Bankruptcy Code, then ExxonMobil and its Affiliates shall retain all rights hereunder in perpetuity without further royalty payments of any kind and FCE (in any capacity, including debtor-in- possession) and its successors and assigns (including, without limitations, a trustee) shall not interfere with such rights. + +(iii) In the event of bankruptcy or insolvency proceedings of FCE in a non-U.S. jurisdiction, the rights, powers and remedies of ExxonMobil and its Affiliates shall be applied under any applicable laws which are equivalent to Section 365(n) of the Bankruptcy Code, or if there is no such equivalent, the Parties will take all such actions as are permissible under applicable law to permit the continuation of the licenses contained in this Agreement to the maximum extent possible. + +Page 15 of 31 + +Source: FUELCELL ENERGY INC, 8-K, 11/6/2019 + + + + + +(iv) In the event FCE admits in writing its inability generally to pay its debts as they fall due in the general course, becomes or is determined to be insolvent, makes a general assignment for the benefit of creditors, suffers or permits the appointment of a receiver for its business or assets, or a substantial part thereof, or becomes subject to a proceeding under any statute or act relating to insolvency or the protection of rights of creditors, ExxonMobil receives, at its election, continued access to all Program Information, including the Project materials, equipment, and FCE's Background Information and Background Patents, and ExxonMobil will have access to relevant lab notebooks, computers containing technical information and know-how, journals, ledgers and manuals containing technical information and know-how in each case relating to the Program Information and FCE's Background Information and Background Patents. + +(B) To the maximum extent permitted under law, ExxonMobil may terminate this Agreement upon fifteen (15) days written notice, without penalty, payment or prejudice to claims and obligations then accrued, if FCE commences a voluntary case under the Bankruptcy Code or a similar voluntary bankruptcy or insolvency proceeding in a non- U.S. jurisdiction, or if an order for relief is entered in an involuntary case filed against FCE under the Bankruptcy Code, and such case is not dismissed within sixty (60) days of the entry of such order, or if FCE makes a voluntary general assignment for the benefit of creditors, or suffers or permits agrees to the entry of an order appointing a receiver in an action actually pending in a court of competent jurisdiction for that portion of its business or assets related to the Project. In the event of termination under this Paragraph 12.05 and subject to ExxonMobil's waiver (in its sole discretion), any licenses granted to FCE under this Agreement that would otherwise survive termination will automatically terminate and any licenses granted to ExxonMobil under this Agreement that would otherwise survive termination will continue to survive termination. + +12.06 Continuing Rights and Obligations. Except as otherwise stated in this Agreement, the following Articles and Paragraphs will survive termination of this Agreement: + +o Article 1 (Definitions); + +o Article 4 (Disclosure, Confidentiality and Restricted Use); + +o Article 6 (Procurement and Ownership of Program Results) + +o Article 7 (License to Program Results), subject to Paragraphs 12.03 (Failure to Perform), 12.04 (Other Termination), and 12.05 (Bankruptcy); + +o Article 8 (License to Background Information and Patents), subject to Paragraphs 12.03 (Failure to Perform), 12.04 (Other Termination), and 12.05 (Bankruptcy); + +o Article 10 (Payment), but only to the extent there are continuing license and/or royalty share obligations pertaining to the commercial use of Program Results, Background Information and/or Background Patents; + +o Article 11 (Representations, Warranties, Indemnities and Liabilities); + +o Article 12 (Term and Termination) to the extent any clause therein speaks to post termination rights and obligations; + +o Article 13 (Arbitration and Governing Law); + +o Article 14 (Assignment); + +o Article 16 (Addresses and Notices); + +Page 16 of 31 + +Source: FUELCELL ENERGY INC, 8-K, 11/6/2019 + + + + + +o Paragraph 17.03 (Export Controls and Trade Sanctions); + +o Article 18 (Records and Audit); + +o Article 19 (Taxes); + +o Paragraphs 20.02 (Independent Contractors), 20.03 (Independent Entities), 20.06 (No Third-Party Beneficiaries), 20.07 (Internal Conflict), 20.08 (Severability), 20.09 (Amendments; Modification; Waiver), 20.10 (Integration), and 20.11 (Execution); and + +o any rights and obligations contained in this Agreement which by their nature should continue. + +Any rights and obligations that have accrued to either Party against the other prior to the effective date of termination or expiration of this Agreement in any respect will survive such termination or expiration, and rights that have accrued to an Affiliate of a Party will continue regardless of any change in Affiliate status during the Term of this Agreement or thereafter. + +ARTICLE 13 - ARBITRATION AND GOVERNING LAW + +13.01 Governing Law. The validity and interpretation of this Agreement and the legal relations of the Parties to it will be governed by the laws of the State of New York without recourse to its conflicts of law rules. + +13.02 Arbitration Proceedings. Both Parties will try to amicably resolve any dispute arising out of or relating to this Agreement by involving representatives of the Parties with authority to settle such disputes. In the event the Parties are unable to agree upon a resolution within a reasonable period of time, not to exceed sixty (60) days after first notice of the difference unless otherwise agreed in writing, any dispute arising out of or relating to this Agreement may be referred to final and binding arbitration before three arbitrators under the Rules of Arbitration of the International Chamber of Commerce. Each Party will appoint one arbitrator within thirty (30) days of notice of such referral and the two (2) so appointed will, within thirty (30) days from the appointment of the last of the two (2) arbitrators, select a third arbitrator who will act as the Chairman. The arbitration will take place in New York City, New York and the proceedings will be conducted in the English language. The arbitrators will decide all questions and settle all disputes strictly in accordance with the provisions of this Agreement, including the relevant indemnities and liability limitations. The arbitrators will have no authority to award exemplary or punitive damages, and the arbitral panel will certify in the decision that no part of the award includes such damages. The Parties waive their rights to seek rulings from any court on issues of law that arise during the arbitration and to challenge the award on the grounds that the arbitrators made errors of law. Awards made pursuant to this Paragraph will be final and binding on the Parties from the date made and judgment upon any award may be entered in any court having jurisdiction. No Party hereto will raise defenses based on sovereign immunity with respect to the arbitration, any judicial proceeding or ancillary thereto or with respect to enforcement of any award, order or judgment rendered in the arbitration or related judicial proceedings. + +13.03 Cost of Arbitration. The prevailing Party in an arbitration proceeding will be entitled to recover from the other Party reasonable attorneys' fees, reasonable out-of-pocket costs and disbursements, as well as any charges for the cost of the arbitration and the fees of the arbitrators. + +13.05 Injunctive Relief. No provision of this Agreement will prohibit any Party from approaching any court having competent jurisdiction to seek injunctive relief in case of urgency to prevent disclosure of its Confidential Information. + +Page 17 of 31 + +Source: FUELCELL ENERGY INC, 8-K, 11/6/2019 + + + + + +ARTICLE 14 - ASSIGNMENT + +14.01 Assignment. The Agreement is not assignable, including any assignment by operation of law (including but not limited to as a result of a merger or other corporate action), by either Party without the prior written consent of the other Party. Any and all assignments of this Agreement or of any part thereof not made in accordance with this Article will be void. Notwithstanding the foregoing, ExxonMobil may assign this Agreement to its Affiliates and FCE may assign this Agreement to any of its wholly-owned and wholly-controlled Affiliates, with prior written notice to the other Party, provided that (i) such assignment by FCE shall be void if at any point such Affiliate ceases to be both wholly-owned and wholly- controlled by FCE, (ii) Article 12, including but not limited to Paragraphs 12.03, 12.04 and 12.05, shall be applicable to both FCE and any Affiliate assignee of FCE, and (iii) no assignment pursuant to this sentence will relieve the Parties of their obligations under this Agreement. + +14.02 Assignees Bound. Any assignee permitted in Paragraph 14.01 (Assignment) will agree in writing to be bound by all the obligations of the assigning Party under this Agreement, and a copy of such written agreement will be promptly provided to the other Party. Any Party making an assignment of this Agreement as permitted in Paragraph 14.01 (Assignment) will remain bound by the continuing obligations of confidentiality and nonuse applicable to such Party prior to the assignment. + +ARTICLE 15 - FORCE MAJEURE + +15.01 A Party will not be liable to the other Party and will not be considered in breach of this Agreement for delays or failures in performance resulting from causes beyond the reasonable control of that Party, including, but not limited to, acts of God, labor disputes or disturbances, material shortages or rationing, riots, acts of war, new governmental regulations, communication or utility failures, or casualties. In such instance, the Party so affected will promptly notify the other Party in writing of such prevention, restriction or interference. ExxonMobil or FCE, as the case may be, will be excused from performing such obligations to the extent of such prevention, restriction or interference; provided, however, that the Party so prevented, restricted or interfered with will take all appropriate and reasonable steps to remedy such failure or delay and will resume its performance under this Agreement with all proper dispatch whenever such causes are removed. + +ARTICLE 16 - ADDRESSES AND NOTICES + +16.01 All notices, demands, requests, or other communications which a Party may desire or be required to give under this Agreement to the other Party will be in writing addressed as follows or to such other address designated by notice in writing: + +Page 18 of 31 + +Source: FUELCELL ENERGY INC, 8-K, 11/6/2019 + + + + + +ExxonMobil: ExxonMobil Research and Engineering Company 1545 Route 22 East Annandale, NJ 08801-0900 Attention: Timothy Barckholtz, Senior Scientific Advisor Email: tim.barckholtz@exxonmobil.com FCE: FuelCell Energy, Inc. 3 Great Pasture Road Danbury, CT 06810 Attention: Anthony Leo, Executive Vice President Email: tleo@fce.com With a copy to: FuelCell Energy, Inc. 3 Great Pasture Road Danbury, CT 06810 Attention: Legal Department Such notice, demand, request, or other communications will be deemed to have been sufficiently given by and will be effective upon the earliest of: (a) delivering the same to a reputable courier service that requires a signature upon delivery; (b) mailing the same by registered or certified first-class mail, postage prepaid, return receipt requested; (c) if an e-mail is provided, then by e-mail with receipt confirmation followed by mailing the same or (d) actual receipt by the addressee. + +ARTICLE 17 - COMPLIANCE + +17.01 Business Standards. The Parties have established and maintain standards, policies, and/or guidelines ("Policies") applicable to lawful and ethical conduct when conducting their business activities. Upon written request, a Party will provide to the other Party a copy of, or electronic access to, such Policies. The Parties agree to comply with such Policies when conducting activities under this Agreement. These Policies pertain to, but may not be limited to, gifts/entertainment/and other things of value and drugs and alcohol. These Policies are communicated to the Parties' employees, along with an expectation that the employees will comply with these Policies. + +17.02 Compliance with Laws. All actions by each Party related to this Agreement will comply with applicable laws and regulations. Notwithstanding anything in this Agreement to the contrary, no provision will be interpreted or applied so as to require a Party or its Affiliates, to do, or to refrain from doing, anything which would constitute a violation of, or be penalized by, any applicable laws and regulations or result in a loss of economic benefit under such laws or regulations. + +17.03 Export Control and Trade Sanctions. Neither Party will furnish, deliver, or release the technology, services, software, or commodities made available to it hereunder to any individual, entity, or destination, or for any use, except in full accordance with all applicable laws, regulations, and requirements of the United States with regard to export control and trade sanctions. Both Parties agree and understand that each will be responsible for ongoing compliance with all such applicable laws, regulations, and requirements. It will be a material breach if a Receiving Party takes any action or uses any of a Disclosing Party's information in any manner which would violate United States laws, regulations, or requirements restricting the export, re-export, transfer or release to certain entities or destinations, including to persons within the Receiving Party or its Affiliates, or to unrelated Third Parties. + +Page 19 of 31 + +Source: FUELCELL ENERGY INC, 8-K, 11/6/2019 + + + + + +ARTICLE 18 - RECORDS AND AUDIT + +18.01 Recordkeeping. FCE will keep, or cause to be kept, true books, records, and accounts in accordance with Generally Accepted Accounting Principles and containing all information necessary for the accurate determination of all amounts payable to FCE under this Agreement, and any other obligations under this Agreement. Such books, records and accounts will be maintained for a period of at least three (3) years following the termination or expiration of this Agreement, provided there are no pending disputes between the Parties. In the case of a dispute, the books, records, and accounts will be maintained for one (1) year following resolution of such dispute. + +18.02 Audit Rights. At the request of ExxonMobil, FCE will permit, at reasonable intervals and during regular business hours, during the Term of this Agreement and at least three (3) years thereafter, but no more than once per fiscal year, an independent certified public accounting firm of nationally recognized standing selected by ExxonMobil (and approved by FCE, which approval will not be unreasonably withheld) to inspect, during regular business hours, such books, records, and accounts and any part of the applicable operations and facilities of FCE relevant to this Agreement, and to have access to FCE's knowledgeable personnel, as may be necessary to determine the completeness and accuracy of any accounting and payments required to be made under this Agreement and compliance with other terms of this Agreement, subject to the following: + +(a) ExxonMobil and its employees or other representatives will have the right to reproduce for its internal records any of the documents kept by FCE in accordance with Paragraph 18.01 (Recordkeeping), such reproduced documents shall be subject to the confidentiality and use provisions contained in Article 4; and + +(b) all expenses of each such audit, including any pre-approved reasonable expenses incurred by FCE for such audit, will be for the account of ExxonMobil. + +FCE will cause any subcontractors to preserve documentation and allow ExxonMobil to audit such books, records, and accounts of subcontractors by way of auditing FCE. + +18.03 Accurate Records. Both Parties agree that all records relating to any Project, including invoices, financial reports, accounting reports, and other financial records relating to any Project will be complete and reflect accurately the facts about all activities and transactions, and both Parties may rely on all such records as being complete and accurate in any further recordings and reports made by the Parties for any purpose. If either Party becomes aware that any such records are inaccurate or incomplete, that Party will promptly notify the other Party in writing and provide accurate and complete information. + +ARTICLE 19 - TAXES + +19.01 Tax Responsibility. Each Party will be responsible for and will bear its own tax liabilities, of whatever kind and imposed by whatever taxing entity or entities incurred in connection with the existence or any performance of any activities under this Agreement or the granting of licenses or other rights and considerations hereunder. + +19.02 Tax Cooperation. Each Party will reasonably cooperate with the other Party to assist the other Party in providing information to support tax filings associated with this Agreement. + +ARTICLE 20 - ADDITIONAL PROVISIONS + +20.01 Site Requirements. Each Party agrees that if any employees of the Party or its Affiliates visit, or are physically located at, the facilities of the other Party, during the course of the Program, then such employees will abide by all site requirements of the other Party made known to them, including but not limited to, site requirements pertaining to safety, security, health and the environment. + +Page 20 of 31 + +Source: FUELCELL ENERGY INC, 8-K, 11/6/2019 + + + + + +20.02 Independent Contractors. The relationship between the Parties is that of independent contractors. Nothing contained in this Agreement, or any course of action by either Party pursuant to this Agreement, will be construed or deemed to constitute or create a joint venture, partnership, agency or employment relationship between the Parties or between either Party and the employees or other representatives of the other Party. + +20.03 Independent Entities. Each Party enters into this Agreement solely on its own behalf and not on behalf of any other person or entity. Each Party warrants that it is an independent legal entity with the power and authority to enter into Agreements solely on its own behalf. No Party hereto will assert any defense of sovereign immunity that may be available to it in any resolution of any dispute under this Agreement; all such defenses are expressly waived by the Parties. + +20.04 Future Work. This Agreement shall not constitute or imply any promise or intention: (a) to enter into any other agreement of any nature, (b) to make any purchase of products or services by either Party or its Affiliates, or (c) to make any commitment by either Party, its Affiliates, or licensees with respect to present or future marketing or supply of any product or service. + +Notwithstanding the foregoing, prior to the end of the Term of this Agreement and subject to FCE achieving Milestone 1 and Milestone 2 to ExxonMobil's satisfaction, the Parties agree to negotiate in good faith commercially reasonable terms for the demonstration of Generation 2 Technology at one or more of ExxonMobil's commercial facilities. + +20.05 Workplace Harassment. Each Party's employees, agents, and subcontractors who will perform work hereunder or communicate with the other Party's employees, agents, customers, or contractors will not engage in any harassment of the other Party's employees, agents, customers, or contractors. The term "harassment" as used herein includes all forms of unlawful harassment based on race, color, sex, religion, national origin, citizenship status, age, genetic information, physical or mental disability, veteran, sexual orientation, gender identity or other legally protected status; as well as all other forms of harassment, which, while not unlawful, are inappropriate in a business setting. If any of one Party's employees, agents, or subcontractors who perform work hereunder or communicate with the other Party's employees, agents, customers, or contractors have not been informed of the standard of conduct above, the one Party will inform them. Each Party will promptly notify the other Party contact for the applicable services of any report or complaint of harassment or of any violation of the above standard of conduct. Each Party will cooperate with the other Party in any investigation the other Party may make, including making each Party's employees, agents and subcontractors available for questioning by the other Party's designated investigators. Each Party agrees not to retaliate against anyone who reports an incident of harassment or who cooperates in any investigation of a report of an incident. + +20.06 No Third Party Beneficiaries. No third parties are intended to be third party beneficiaries under this Agreement. None of the provisions of this Agreement will be enforceable by a third party. For the avoidance of doubt, permitted assignees of a Party pursuant to Article 14 (Assignment) will not be considered third parties for purposes of this Paragraph. + +20.07 Internal Conflict. In the event of a conflict between the provisions in the body of this Agreement and any Project Description, the terms of the body of this Agreement will control. + +20.08 Severability. The provisions of this Agreement are deemed severable. The invalidity or unenforceability of any provision of this Agreement will not affect the validity or enforceability of any other provision hereof which can be given effect without the invalid or unenforceable provision, and to this end the provisions of this Agreement are declared to be severable and the balance of this Agreement will be construed and enforced as if this Agreement did not contain such invalid or unenforceable provision. + +Page 21 of 31 + +Source: FUELCELL ENERGY INC, 8-K, 11/6/2019 + + + + + +20.09 Amendment; Modification; Waiver. This Agreement may only be amended, modified, or supplemented by an agreement in writing signed by authorized representatives of each party hereto. No waiver by any party of any of the provisions hereof will be effective unless explicitly set forth in writing and signed by the waiving party. Except as otherwise set forth in this Agreement, no failure to exercise, or delay in exercising, any rights, remedy, power, or privilege arising from this Agreement will operate or be construed as a waiver thereof; nor will any single or partial exercise of any right, remedy, power, or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power, or privilege. + +20.10 Integration. The Parties have entered into the following related agreements: Prior JDA, Non-Disclosure Agreement, License Agreement, and Memorandum of Understanding. This Agreement (including, for the avoidance of doubt, any fully executed Project Descriptions) constitutes the entire agreement between the Parties and it supersedes all negotiations, representations or agreements, oral or written, express or implied, as to its specific subject matter. Notwithstanding the foregoing, the status of the related agreements shall be as follows: + +Prior JDA. As of the Effective Date of this Agreement, the Prior JDA is terminated. Any rights and obligations that were to survive termination of the Prior JDA (pursuant to Section 14.06 of the Prior JDA) are also terminated, except the confidentiality and use restrictions on Prior JDA Background Information and Prior JDA Project Results. Such confidentiality and use restrictions, as set forth in the Prior JDA, will survive termination but will be superseded and replaced by the confidentiality and use restrictions set forth in Article 4 (Disclosure, Confidentiality, and Restricted Use) of this Agreement. + +Memorandum of Understanding. As of the Effective Date of this Agreement, the Memorandum of Understanding is terminated, but the confidentiality obligations set forth in the Memorandum of Understanding shall survive termination. + +Non-Disclosure Agreement and License Agreement. This Agreement does not modify, abrogate, terminate or supersede any other prior written agreements between the Parties except as specifically noted herein, and such agreements will continue to be applicable in accordance with their terms. For clarity, this Agreement does not modify, abrogate, terminate or supersede the terms and conditions of the Non-Disclosure Agreement or the License Agreement. + +20.11 Arm's Length Transaction. This Agreement represents a negotiated, arm's length transaction. The transactions contemplated under this Agreement are being made by each Party for reasonably equivalent value and fair consideration. The transactions contemplated in this Agreement will not constitute a fraudulent transfer or fraudulent conveyance or any act with similar consequences or potential consequences under 11 U.S.C. Section 548 and other similar laws, or otherwise give rise to any right of any creditor of a Party whatsoever to lodge any claim against the other Party or avoid the transactions hereunder. + +20.12 Execution. This Agreement may be executed in counterparts, each of which shall be deemed to be an original and all of which together shall constitute one and the same instrument. Where provided for in applicable law, this Agreement may be executed and delivered electronically. If executing this Agreement using a handwritten signature, a Party may deliver a copy of such signature via electronic transmission and may provide the other Party a duplicate original so each Party retains an original for its records. + +Page 22 of 31 + +Source: FUELCELL ENERGY INC, 8-K, 11/6/2019 + + + + + +IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed in their respective corporate names by their duly authorized officers. FUELCELL ENERGY, INC. EXXONMOBIL RESEARCH AND ENGINEERING COMPANY + +By: /s/ Jason B. Few By: /s/ Vijay Swarup + +Name: Jason B. Few Name: Vijay Swarup + +Title: President, Chief Executive Officer and Chief Commercial Officer Title: VP R&D + +Date: November 5, 2019 Date: November 5, 2019 + +Page 23 of 31 + +Source: FUELCELL ENERGY INC, 8-K, 11/6/2019 + + + + + +APPENDIX A - DEFINITIONS + +"Affiliate(s)" means any legal entity which, directly or indirectly, at the time in question, controls, is controlled by, or is under common control with the designated Party. For the purposes of this definition, "control" is defined as direct or indirect ownership of fifty percent (50%) or more of the voting interest or economic interest in the controlled entity or such other relationship whereby the controlling entity determines or has the right to determine the majority of the Board of Directors or an equivalent governing body of the controlled entity. + +"Agreement" means this agreement, together with the appendices attached to this agreement and any Project Descriptions, extensions, renewals, or amendments hereof agreed to in writing and signed by the Parties. + +"Authorized Third Parties" means Drax Group Plc. and Alberta Innovates Corporation, and, subject to FCE obtaining the prior written consent of ExxonMobil, which consent will not be unreasonably withheld, conditioned, or delayed, the respective successors, assigns, joint venturers, partners and contractors of each of them. + +"Authorized Work" means non-commercial activities restricted to research and development, pilot plant, deployment, and demonstration projects, and commercial activities for which FCE has obtained the prior written consent of ExxonMobil. + +"Background Information" in connection with a designated Party means technical information, data, know-how, expertise, materials (including hardware, samples, models, algorithms, and software), calculations, innovations, inventions, discoveries, improvements, formulations, manufacturing techniques, equipment designs, methods, processes, and the like, of the designated Party or its Affiliates that is: + +(a) owned or controlled by the designated Party or its Affiliates (in the sense of having the right to license without accounting to others); and + +(b) conceived, created, developed, or acquired by the designated Party or its Affiliates: + +(1) prior to the Effective Date of this Agreement; or + +(2) at any time, but independently of any Project prior to the termination of this Agreement. + +Background Information includes Background Samples but does not include Program Information. + +Background Information further includes any business or financial information of the indicated Party relating to the subject matter of this Agreement that is disclosed to the other Party under this Agreement, including, but not limited to, financial data, costs, margins, overhead, returns on capital employed, marketing strategies, and licensing strategies and terms. + +"Background Patents" in connection with a designated Party means all patents and patent applications (including continuations, continuations-in-part, or divisions thereof, any patent resulting therefrom, and reissues, re-exams or extensions thereof, and revisions thereof arising from oppositions, inter or ex parte proceedings, or other patent office or judicial proceedings) of all countries, whenever filed, that are: + +(a) owned or controlled by the designated Party or its Affiliates (in the sense of having the right to license without accounting to others); and + +(b) based solely on Background Information and not included in the definition of Project Patents. + +"Background Sample(s)" means ExxonMobil Background Sample(s) and/or FCE Background Sample(s) depending on the context in which the term is utilized. + +"Bankruptcy Code" is defined in Paragraph 12.05 (Bankruptcy). + +Page 24 of 31 + +Source: FUELCELL ENERGY INC, 8-K, 11/6/2019 + + + + + +"Capture Rate" means the percentage of CO2 transferred from the cathode inlet to the anode outlet. + +"Carbon Capture Applications" means applications in which the MCFCs concentrate carbon dioxide from industrial or power sources, and for any other purpose attendant thereto or associated therewith. + +"Carbonate Transference" means the current density that is due to carbonate transfer as a percentage of total current density. + +"Change in Control" means the occurrence of any one or more of the following at any time after the date hereof with respect to FCE: + +a) a merger or consolidation with any Person which results in the holders of the voting securities of FCE outstanding immediately prior thereto (other than the acquirer, its "affiliates" and "associates" (as such terms are used in the Securities Exchange Act of 1934)) ceasing to represent at least fifty percent (50%) of the combined voting power of the surviving entity (or, if applicable, its parent company) immediately after such merger or consolidation; + +b) any Major Competitor is or becomes the beneficial owner by purchasing directly from FCE, voting securities representing ten percent (10%) or greater than the actual voting power of any such entity; + +c) the sale to any Major Competitor of all or substantially all of the business of FCE to which this Agreement relates (whether by merger, consolidation, sale of stock, sale of assets or other similar transaction); + +d) any Person (which shall not be any trustee or other fiduciary holding securities under an employee benefit plan of such Person, or any corporation owned directly or indirectly by the stockholders of such Person, in substantially the same proportion as their ownership of stock of such Person), together with any of such Person's "affiliates" or "associates", as such terms are used in the Securities Exchange Act of 1934, becoming the beneficial owner of fifty percent (50%) or more of the combined voting power of the outstanding securities of FCE or by contract or otherwise having the right to control the board of directors or equivalent governing body of FCE or the ability to cause the direction of management of FCE (or, if applicable, its parent company); + +e) the approval by such entity's board of directors or shareholders of any reorganization or transaction that would cause any of the situations described in clauses (a) through (d) to occur; or + +f) the approval by the board of directors or other governing body or the shareholders or other equity holders of FCE of any plan or proposal for its liquidation or dissolution. + +The occurrence or non-occurrence of a Change in Control does not alter or limit section 14.01 of this Agreement. + +"Confidential Background Information" means, collectively, any and all Background Information that a Party is required to keep confidential pursuant to the terms and conditions of this Agreement. + +"Confidential Information" means, collectively, any and all Confidential Program Information, Confidential Background Information, and any other types of information, that a Party is required to keep confidential pursuant to the terms and conditions of this Agreement. + +"Confidential Program Information" means, collectively, any and all Program Information that FCE is required to keep confidential pursuant to the terms and conditions of this Agreement. + +Page 25 of 31 + +Source: FUELCELL ENERGY INC, 8-K, 11/6/2019 + + + + + +"Cure Period" means a period commencing on the date the defaulting Party receives the written notice of breach or default from the non-defaulting Party pursuant to Paragraph 12.03 and continuing until thirty (30) calendar days thereafter; provided, however, that if prior to the expiration of this period the defaulting Party provides the non-defaulting Party with written evidence that the breach or default cannot reasonably be cured within such period and the defaulting Party has promptly commenced and is diligently pursuing efforts to cure the breach or default, then the Cure Period shall continue as long as such diligent efforts to cure continue, but not beyond the date that is sixty (60) days after the expiration of the initial thirty (30) calendar day Cure Period. + +"Definition Agreement" means the agreement between the Parties effective as of October 31, 2019, bearing ExxonMobil Document No. LAW-2019-3850. + +"Disclosing Party" means the Party that discloses, directly or indirectly, information or other materials to the Receiving Party hereunder. + +"Direct Costs" means reimbursable costs, approved in advance by the Steering Committee, which are (i) operational expenditures of FCE associated with the Program not included in the FTE Cost, including subcontractors, (ii) material or capital expenditures of FCE associated with the Program; and (iii) approved FCE travel costs to attend SC meetings or conferences, and use of contractors in furtherance of a Project. + +"Effective Date" means October 31, 2019. + +"Exclusivity and Technology Access Fee" is defined in Paragraph 10.02 (Up-front Exclusivity and Technology Access Fee Payment). + +"ExxonMobil" is defined in the preamble. + +"ExxonMobil Background Information" means Background Information that: (a) was developed or acquired by ExxonMobil independently of a Project, and (b) is provided by ExxonMobil for use in a Project under this Agreement. ExxonMobil Background Information does not include Program Information. + +"ExxonMobil Background Sample" means a non-commercial sample of material, component, device, or the like that: (a) was developed or acquired by ExxonMobil independently of the Project, and (b) is provided by ExxonMobil for use in a Project under this Agreement. ExxonMobil Background Samples does not include Program Samples. + +"FCE" is defined in the preamble. + +"FCE Background Information" means Background Information that: (a) was developed or acquired by FCE independently of a Project, and (b) is provided by FCE for use in a Project under this Agreement. FCE Background Information does not include Program Information. + +"FCE Background Sample" means a non-commercial sample of material, component, device, or the like that: (a) was developed or acquired by FCE independently of a Project, and (b) is provided by FCE for use in a Project under this Agreement. FCE Background Samples does not include Program Samples. + +"FTE" means a full-time employee of FCE or an equivalent thereof, dedicated to the conduct of the Program based on a total of one thousand eight hundred and fifty-six (1,856) hours per year of direct project work per year. FTEs will include engineers, scientists, and any other functions mutually agreed to by the Steering Committee. Non-devoted personnel (e.g., FCE's Board of Directors, management, secretarial, administrative, human resources, finance, purchasing, shipping and receiving, information technology specialists, lawyers, cleaning and food service personnel) are not FTEs. Individuals may be counted as fractional FTEs by using the individual's total hours of work for FCE on the Program (as opposed to total hours of work) as the numerator and 1,856 as the denominator. For clarity, the phrase "direct project work" means the applicable person is engaged in activities contemplated to be performed by Project Description and excludes time incurred by a person on indirect work-related functions, such as time spent on management, training, general meetings, workplace events, completing time cards, and similar administrative functions, except for attendance at Steering Committee meetings. + +Page 26 of 31 + +Source: FUELCELL ENERGY INC, 8-K, 11/6/2019 + + + + + +"FTE Costs" means the product of the FTE Rate and the hours worked of the total number of FTEs. + +"FTE Rate" means the hourly amount agreed to by the Parties per FTE. As of the Effective Date, the FTE Rate for scientists and engineers is three-hundred and twenty-seven United States dollars ($327.00 USD) and the FTE Rate for all other FTEs is one- hundred and ninety-four United States dollars ($194.00 USD). Increases in the FTE Rate must be approved by the Steering Committee. + +"Generation 1 Technology" is defined in the Definition Agreement. + +"Generation 2 Technology" is defined in the Definition Agreement. + +"Gross Negligence" means any act or failure to act (whether sole, joint or concurrent) which seriously and substantially deviates from a diligent course of action or which is in reckless disregard of or indifference to the harmful consequences. + +"Hydrogen Applications" means applications in which the MCFCs are used solely for hydrogen generation in combination with power generation or combined heat and power generation. + +"Initial Payment" is defined in Paragraph 10.01(b) (Project Costs). + +"Inlet CO2 Concentration" means CO2 concentration in the cathode inlet measured at room temperature conditions (about 23oC) via gas chromatography, as calibrated according to conventional methods. + +"Inlet O2 Concentration" means O2 concentration in the cathode inlet measured at room temperature conditions (about 23oC) via gas chromatography, as calibrated according to conventional methods. + +"Inlet Water Concentration" means water concentration in the cathode inlet measured at room temperature conditions (about 23oC) via gas chromatography, as calibrated according to conventional methods. + +"8th Inning Invoice" is defined in Paragraph 10.01(d) (Project Costs). + +"9th Inning Invoice" is defined in Paragraph 10.01(d) (Project Costs). + +"License Agreement" means the agreement between the Parties effective June 11, 2019 entitled License Agreement bearing ExxonMobil Document No. LAW-2019-3245. + +"Major Competitor" means a company with a market capitalization in excess of fifty billion United States dollars ($50 billion USD) and whose principal business involves exploration for, and/or production of, crude oil and/or natural gas, manufacture of petroleum products and/or transportation and/or sale of crude oil, natural gas, and/or petroleum products. + +"Memorandum of Understanding" means the non-binding agreement between ExxonMobil and FCE effective August 26, 2019. + +"Milestone 1" is defined in the Definition Agreement. + +"Milestone 2" is defined in the Definition Agreement. + +"Milestone Payments" is defined in Paragraph 10.03 (Milestone Payments). + +"Molten Carbon Fuel Cells" or "MCFCs" means a powerplant system including MCFC Stacks and Balance of Plant based on a fuel cell that comprises an electrolyte, an anode, and a cathode wherein the electrolyte comprises one or more carbonate salts that are molten (liquid) at operating temperatures. An "MCFC Stack" is a set of fuel cells connected electrically in series, arranged vertically or horizontally, that share common ducting for the cathode and anode streams. The ducting is considered part of the MCFC Stack. Further, the MCFC Stack may include "Reformer Units", which are non-electrochemical units that catalytically reform the anode feed to H2 and CO, but do so without producing any electricity. "Balance of Plant" or "BOP" means all other equipment besides the MCFC Stack that is required to operate the MCFC as a stand-alone device, i.e., not in CO2 capture mode or in H2/syngas generation mode. For power generation this can include the dc-to-ac power conversion, fuel and water processing, air supply, and heat exchange equipment. + +Page 27 of 31 + +Source: FUELCELL ENERGY INC, 8-K, 11/6/2019 + + + + + +"Non-Affiliated Third Party" means a third party who is not Party or an Affiliate of a Party. + +"Non-Disclosure Agreement" means the agreement between the Parties effective December 7, 2018 entitled Mutual Non- Disclosure Agreement bearing ExxonMobil Document No. EM11762. + +"Party" and "Parties" is defined in the preamble. + +"Person" means any trust, natural person, firm or partnership, company, corporation, or other entity that is given, or is recognized as having, legal personality by the law of any jurisdiction, country, state or territory, unincorporated body and association (including joint venture and consortium), any emanation of a sovereign state or government, whether national, provincial, local or otherwise, any international organization or body (whether or not having legal personality), and any other juridical entity, in each case wherever resident, domiciled, incorporated or formed, and more than one of the foregoing acting as a group. + +"Policies" are defined in Paragraph 17.01 (Business Standards). + +"Potential Decay Rate" is defined in the Definition Agreement. + +"Power Applications" means applications in which the MCFCs are solely used for power generation, combined heat and power generation, or both. + +"Power Density" means the product of the average cell or stack current density and the average cell potential. + +"Prior JDA" means the agreement between the Parties effective April 30, 2016 entitled Joint Development Agreement bearing ExxonMobil Document No. EM09080. + +"Prior JDA Background Information" means Background Information as defined in the Prior JDA. + +"Prior JDA Project Patents" means Project Patents as defined in the Prior JDA, which by definition are jointly-owned by the Parties. + +"Prior JDA Project Results" means Project Results as defined in the Prior JDA, which by definition are jointly-owned by the Parties. + +"Project(s)" is defined in Paragraphs 2.01 (Program / Projects). + +"Project Description" is defined in Paragraph 2.01 (Program / Projects). + +"Program" is defined in Paragraph 2.01 (Program / Projects). + +"Program Information" means all information and associated copyrights, whether or not patentable, that is conceived, created, developed or acquired in or for the Program during the Term of the Agreement from any source (including from any employee of either Party or its Affiliates, or from any Party's or its Affiliates' contractors or consultants, whether alone or jointly with one or more others) in the course of and as a result of working directly on the Program. Program Information shall be owned by ExxonMobil and its Affiliates. + +Program Information specifically includes Program Inventions and Program Samples. Program Information also includes improvements to either Party's Background Information conceived, created, developed or acquired in or for the Program and resulting directly from activities performed in the course of and as a result of working directly on the Program. + +"Program Inventions" means Program Information that is characterized as inventions, discoveries, or improvements (whether patentable or not) that are conceived, created, developed, or acquired by or on behalf a Party or its Affiliates during the Term of this Agreement and one (1) year thereafter, and in the course of and as a result of working directly on the Program. Program Inventions shall also include Project Inventions (as defined in the Prior JDA) that have not been filed with any national, regional, or international patent body or organization by the Effective Date of this Agreement. Program Inventions shall be owned by ExxonMobil and its Affiliates. + +Page 28 of 31 + +Source: FUELCELL ENERGY INC, 8-K, 11/6/2019 + + + + + +"Program Patents" means all patents and patent applications (including continuations, continuations-in-part, or divisions thereof, any patent resulting therefrom, and reissues, re-exams or extensions thereof, and revisions thereof arising from oppositions, inter or ex partes proceedings, or other patent office or judicial proceedings) filed with any national, regional, or international patent body or organization after the Effective Date of this Agreement, that are based upon and/or claim one or more features of Program Inventions. Program Patents shall be owned by ExxonMobil and its Affiliates. + +"Program Results" means, collectively Program Information, Program Patents, and copyrightable works resulting from the Program. + +"Program Sample" means a sample of material, component, device, or the like that is developed during the Term of this Agreement, in the course of and as a result of working directly on the Program. + +"Receiving Party" means the Party that receives, directly or indirectly, information or other materials from the Disclosing Party. + +"Research Costs" means Direct Costs plus FTE Costs. + +"Scope" is defined in the preamble. + +"Steering Committee" or "SC" is defined in Paragraph 3.01 (Steering Committee). + +"Sample" means collectively FCE Background Sample, ExxonMobil Background Sample, and Program Sample. + +"Technical Manager" is defined in Paragraph 3.02 (Technical Managers). + +"Term" or "Term of this Agreement" is defined in Paragraph 12.01 (Term). + +"Total Research Cost" is defined in Paragraph 10.01(a) (Project Costs). + +"Willful Misconduct" means an intentional disregard of good and prudent standards of performance or of any of the substantive terms of this Agreement. + +"Work" means any activities of any kind, including but not limited to, research and development, pilot plant, manufacture testing, demonstration, or commercial development/deployment. + +Page 29 of 31 + +Source: FUELCELL ENERGY INC, 8-K, 11/6/2019 + + + + + +APPENDIX B - SAMPLE PROJECT DESCRIPTION FORMAT + +PROJECT DESCRIPTION No. ____ + +Project Name: __________________ + +LAW-2019-3608 + +FCE Agreement No. :____________ + +Date: ________________________ + +Receiving Company Name & Address + +Attention: ______________________ + +Dear ______________, + +This Project Description No. [NUMBER] is issued pursuant to the Joint Development Agreement, effective [EFFECTIVE DATE] between ExxonMobil Research and Engineering Company ("ExxonMobil") and FuelCell Energy, Inc. ("FCE"), bearing ExxonMobil Agreement No. LAW-2019-3608 ("Agreement"). Each Party's activities hereunder will be conducted in accordance with and subject to the terms and conditions of the Agreement. The specific terms which will apply to this Project are described below. + +1. PROJECT DESCRIPTION/OBJECTIVES: + +_________________ + +2. TIME SCHEDULE: + +Commencement Date: ____________ + +Completion Date: ________________ + +3. STEERING COMMITTEE MEMBERS / TECHNICAL MANAGERS: + +FCE: ______________________ + +ExxonMobil: __________________________ + +4. PROJECT BUDGET Task 1A 1B 1C …. + +N u m b e r o f FTEs + +FTE Cost + +Direct Costs + +TOTAL + +5. DELIVERABLES: + +____________________ + +Page 30 of 31 + +Source: FUELCELL ENERGY INC, 8-K, 11/6/2019 + + + + + +If the foregoing is satisfactory, please have a duly authorized representative of your company sign duplicate originals of this Project Description and return both to for counter-execution on behalf of our company. A fully-executed original will be returned for your files. Very truly yours, EXXONMOBIL RESEARCH AND ENGINEERING COMPANY By: Name: Title: Date: + +ACCEPTED AND AGREED TO: FUELCELL ENERGY, INC. By: Name: Title: Date: + +Page 31 of 31 + +Source: FUELCELL ENERGY INC, 8-K, 11/6/2019 \ No newline at end of file diff --git a/full_contract_txt/FulucaiProductionsLtd_20131223_10-Q_EX-10.9_8368347_EX-10.9_Content License Agreement.txt b/full_contract_txt/FulucaiProductionsLtd_20131223_10-Q_EX-10.9_8368347_EX-10.9_Content License Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..6ee97c26c9ee1c8ad2eac79218ccdf35bdedfda1 --- /dev/null +++ b/full_contract_txt/FulucaiProductionsLtd_20131223_10-Q_EX-10.9_8368347_EX-10.9_Content License Agreement.txt @@ -0,0 +1,79 @@ +CONTENT DISTRIBUTION AND LICENSE AGREEMENT Deal Terms Licensed Program/ Film or Video Inevitable "Licensed Rights" to ConvergTV and ConvergTV Channels and/or Distribution Outlets x All, including but not limited to: xSimultaneous Internet Streaming x OTT Television x Internet Protocol Television x Radio, short wave, microwave, fiber optic x Alternative, secondary and specialty distribution x Stored as VOD, Content Distribution Networks/Company Servers x Full Television Broadcast Rights: x Free: Terrestrial, Cable, Satellite x Pay: Terrestrial, Cable, Satellite x Direct Satellite IP Distribution Systems Licensed Territory x Worldwide ¨ Other: _______________________________________________ License Term Perpetual, unlimited runs x Other: 2 years Commencing: November 15, 2012 Run Dates Within ConvergTV determined parameters. License Consideration Revenue Share as specified in this CONTENT DISTRIBUTION AND LICENSE AGREEMENT. Authorized Language Primary: x All ¨ Other (specify): ________________________________________ May be subtitled or translated by ConvergTV into foreign language(s). Additional Terms Closed Captioned Version, - NTSC, PAL, SEACAM or standards to be developed, provided by ConvergTV. Producer Information Producer: Fulucai Productions Ltd. Name of Contact: James Durward Address: 3632-13 St. SW, Calgary, Alberta, Canada, T2T 3R1 Telephone: 403-689-3901 Email: jimdurward@shaw.ca + + + +1 + +Source: FULUCAI PRODUCTIONS LTD., 10-Q, 12/23/2013 + + + + + + This CONTENT DISTRIBUTION AND LICENSE AGREEMENT (the "Agreement") is entered into as of November 15, 2012 (the "Effective Date") by and between, CONVERGTV, INC., a Delaware Corporation, ("ConvergTV"), whose principal place of business is located at 3201 Budinger Ave., St. Cloud, FL 34769, P.O. Box 540817, Merritt Island, Florida 32954, and Fulucai Productions Ltd. (the producer, publisher, content owner, authorized distributor, agent, or assignee of the Program rights, licensor, and grantor, any and all referred to herein as the "Producer"), whose principal place of business is located at 3632- 13 St. SW, Calgary, Alberta, Canada, T2T 3R1. The foregoing entities may be individually referred to as a "Party" or may be jointly referred to as the "Parties". The Parties agree as follow: 1. Grant of License and Rights. (a) For the License Term and within the Licensed Territory, Producer hereby grants to ConvergTV a right and license to Distribute the program, file or video listed on the Deal Terms above (the "Program") consisting of (check one) ¨ episodes (series) or x one-offs, for unlimited runs for the License Term through ConvergTV channels and/or other distribution outlets, in accordance with the License Rights. The terms "License Term", "Licensed Rights", and "Licensed Territory" shall have the meaning specified in the Deal Terms above, which such Deal Terms are part of this Agreement and are hereby incorporated herein by reference. As used in this Agreement and this license, the term "Distribute" includes, but is not limited to, any and all License Rights specified in the Deal Terms, all rights of distribution, the right to copy and reproduce the Program, the right to create derivative works of the Program for the purpose of creating branding elements and short form promotional materials ("Promotional Works"), the right to sell copies, the right to import and export the Program and the Promotional Works, the right to display the Program and Promotional Works publicity, the right to transmit the Program and Promotional Works through any transmission or delivery method that exists today, or that is created in the future, to any number of devices or users, including transmission through simultaneous delivery or streaming, and the right to sublicense and/or assign some or all of these rights to others. (b) Producer further grants to ConvergTV the right and license to Distribute the Program on any ConvergTV channel, and/or other distribution outlets, that exists today or that is created or developed in the future and this right includes the right to Distribute on any channels of a ConvergTV affiliate and/or other distribution outlets without limitation. (c) Producer further grants to ConvergTV the right and license to Distribute and re-Distribute, including relicensing or sublicensing, the Program at such dates and times as are determined by ConvergTV in its sole discretion. (d) Producer further grants to ConvergTV the right and license to create (re-edit), at its sole cost and expense, new and different versions of the Program, create foreign language, subtitled or translated versions of the Program as well as to create closed captioned versions of the Program, including NTCS, PAL, SEACAM standards, or other standards, including those yet to be developed. + +2 + +Source: FULUCAI PRODUCTIONS LTD., 10-Q, 12/23/2013 + + + + + + (e) Producer further grants to ConvergTV the right and license to utilize any and all footage from the Program for promotional and marketing purposes related to the Distribution of the Program and for promotion of channels or other distribution methods. (f) The grant of rights and license pursuant to this Section 1 shall include, but not be limited to, the right of ConvergTV to Distribute and re-Distribute all or any portions of the Program and Promotional Works, including excerpts therefrom, and any new and different versions of the Program, on simultaneous internet transmission or streaming, internet protocol television and any television networks and stations, and/or other distribution outlets, via domestic or foreign television signals, as well as through CATV and DBS systems, satellite, microwave, fiber optic and/or other modes of Distribution yet to be developed, but which may be utilized by ConvergTV in the future. ConvergTV shall have the right to insert commercials within the Program. 2. Delivery. (a) The Program shall be delivered to ConvergTV utilizing English as the primary language unless otherwise specified or as indicated in the Deal Terms. (b) The Program will conform to and be delivered in accordance with Exhibit A. (c) The Program must be saved as executable files (NOT as playable DVD/Blu-Ray movies). (d) The Program materials delivered to ConvergTV shall be duplicate copies, and ConvergTV disclaims liability for any damage or loss to any original master delivered by Producer to ConvergTV. 3. Consideration. The Producer agrees and acknowledges that it will receive no upfront compensation for the rights it has granted herein and that ConvergTV has no obligation to Producer to exercise any of its rights under this Agreement. The revenue share for the Program is stated in Exhibit B. The Producer shall have thirty (30) days from the payment date to dispute the amount of any revenue share payout or any such claim or dispute is hereby waived by the Producer. 4. Program Exclusivity For The License Term Within The Licensed Territory . During the License Term (which is identified in the Deal Terms), Producer agrees that ConvergTV has the exclusive right to exercise the rights granted to it under this Agreement with respect to the Program, including those in Section 1, within the Licensed Territory. + +3 + +Source: FULUCAI PRODUCTIONS LTD., 10-Q, 12/23/2013 + + + + + + 5. Producer's Representations and Warranties. The Producer represents and warrants for the benefit of ConvergTV that: (a) it: (A) has the right to enter into and perform this Agreement and to grant ConvergTV all the rights and licenses granted by it herein; and (B) either owns the Program or controls the exhibition and distribution rights thereto; (b) it has or will obtain, at its sole cost and expense, all rights necessary to enter into this Agreement and to permit the exercise by ConvergTV of the rights and licenses herein granted including any and all music synchronization and mechanical rights and licenses as well as any and all performance rights by the artists and/or other material susceptible to performing rights contained in the Program and that such rights that Producer does not have or cannot obtain are within the public domain and are free to exercise by ConvergTV; (c) neither the Program, nor the production or use of the Program, or any element of the Program hereunder, will: (A) violate any right of privacy or any other right of any person, firm, corporation or other entity; (B) be defamatory; or (C) infringe upon or violate any copyright, trademark, trade name, patent or any proprietary rights of any third parties; (d) there are no agreements, contracts, commitments or licenses, nor shall Producer enter into any agreements, contracts, commitments or grant any licenses, which would prevent the fulfillment of this Agreement or impair or conflict with the rights granted hereunder; (e) it has all required releases for the Program and to grant the rights and licenses specified in Section 1, including but not limited to personal appearance, voice, location, sync, mechanical and for any other use requiring authorization of a person, place or thing; (f) it will not permit its Programs, other than as provided in this Agreement, to be displayed in full length, or nearly full length, on or through any channel, distribution or other platforms or services, or by any other means, including but not limited to the distribution or viewing platforms or services of ConvergTV's competitors; (g) it has not violated any law, rule, or regulation in connection with the creation or distribution of the Program; and (h) it shall comply with the Producer Performance Standards set forth in Exhibit C. 6. Insurance. The Producer has no insurance requirement. 7. Indemnification. Producer shall indemnify, defend and hold harmless ConvergTV and its parents, subsidiaries, divisions, officers, directors, employees, attorneys and agents, and their respective successors or assigns, from all costs, expenses and damages arising from any breach or alleged breach of the warranties made by it in this Agreement. Producer shall further indemnify, defend and hold harmless ConvergTV and its parents, subsidiaries, divisions, officers, directors, employees, attorneys and agents, and their respective successors or assigns, from all costs, expenses and damages arising from any costs, errors, omissions, slander, losses, liability or for any other cause as a direct or indirect result of the Distribution, transmission or publication of the Producer's Program or content. + +4 + +Source: FULUCAI PRODUCTIONS LTD., 10-Q, 12/23/2013 + + + + + + 8. Protection of Copyright. (a) Producer shall take all reasonable steps to protect all copyrights pertaining to each Program from infringement and will institute such actions and proceedings as may be reasonable to prevent any unauthorized use, reproduction, exhibition or exploitation by third parties of the Program or any part thereof, or the material on which the Program is based which may be in contravention of the rights and license granted to ConvergTV herein. (b) If the Producer does not fulfill its obligation in Section 8(a) above, ConvergTV shall have the right, but not the obligation, to take such action as ConvergTV deems reasonable under the circumstances. For this purpose, Producer hereby appoints ConvergTV its attorney-in-fact to act in its name to prevent any unauthorized use, reproduction, exhibition, or exploitation of any Program or any part thereof. Any damages awarded or settlement payments made as a result of any action taken by ConvergTV shall belong to ConvergTV. 9. Non-Disclosure. The Producer agrees to not disclose, discuss, transcribe, publish or share: (i) any information contained in this Agreement; or (ii) any non-public, confidential or proprietary information as it relates to ConvergTV with any third party, including but not limited to any individual, person, corporation, company, or distributor, except that Producer may disclose such information or materials, to the extent reasonably necessary, to its attorneys, auditors, consultants, shareholders, and other fiduciaries who are themselves bound by confidentiality obligations with regarding any such disclosed information or materials. 10. Security of Content. For Programs licensed by and/or through ConvergTV and that are resident in the ConvergTV distribution platform, ConvergTV shall provide reasonable protections for the ConvergTV distribution platform to prevent the unauthorized distribution, unauthorized licensing, unauthorized sub-licensing, piracy, theft of content and/or unauthorized monetization of the Programs from the ConvergTV distribution platform. 11. Monetization of Content. The Producer agrees and authorizes ConvergTV, its subsidiaries, agents and/or assigns to monetize the Producer's Program and content by traditional ad (commercial) insertion; product placement; branded programming; overlays; interactive advertising; merchandise; utilization of brand value; syndication (theatrical, televised, mobile, OTT, Internet, IPTV); social media television; interactive television; mobile app sales; cable, satellite, OTT, IPTV, mobile subscriber fees; subscription and premium distribution and any and all methods of content monetization that may now or in the future exist, by and on any and all known or future means of content distribution. 12. Force Majeure: If either Party is prevented from performing its obligations hereunder as a result of a force majeure event, then the non- performing Party shall not be liable to the other Party for its failure to perform such obligations. As used in this Agreement, force majeure shall mean any act of God, fire, flood, war, public disaster, other calamity, strike, or labor difficulties, or any governmental determination, action, regulation, or order, or any other occurrence beyond the reasonable control of the non-performing Party, which, despite the non- performing Party's reasonable efforts, prevents the performance of its obligations hereunder. In the case of a force majeure event, ConvergTV will not be responsible for payment of any revenue share. + +5 + +Source: FULUCAI PRODUCTIONS LTD., 10-Q, 12/23/2013 + + + + + + + + 13. Entire Agreement . This Agreement, which includes the Deal Terms and any and all exhibits, schedules or attachments to this Agreement, contains the entire agreement of the Parties, and supersedes any prior written or oral agreements between them concerning the subject matter contained herein. There are no representations, agreements, arrangements, or understandings, oral or written, between and among the Parties hereto, relating to the subject matter contained in this Agreement that are not fully expressed herein. 14.. Notices. All notices, statements or requests for approvals ("Notices") that either Party hereto is required or may desire to give to the other shall be given in writing by addressing the same to the other at the addresses set forth herein, or at such other address as may be designated, in writing, by any such Party in a Notice to the other. Notices shall be made by personal delivery, overnight courier, first class registered mail (postage prepaid and return receipt requested), facsimile or e-mail. A Notice shall be deemed served and received on the date executed on a receipt of acceptance or if by personal delivery, upon physical delivery of the same. 15. Governing Law. All questions with respect to the construction of this Agreement, and the rights and liabilities of the Parties hereto, shall be governed by the laws of the State of Florida. The Parties also agree that the venue for this Agreement shall be in the County of Brevard, Florida. The Parties expressly waive any claim to jurisdiction in any federal or other state forum or venue in any other county or place. In the event of any controversy, claim or dispute between the Parties hereto, including, but not limited to, any action at law or in equity, including any action for declaratory or injunctive relief, arising out of or relating to this Agreement or the breach thereof, the prevailing Party shall be entitled to recover from the losing Party all of his or her actual attorney's fees and costs in bringing, prosecuting, or defending said action. 16. Successors and Assigns. Subject to the restrictions against assignment as herein contained, this Agreement shall be binding upon and inure to the benefit of the Parties, their predecessors, assigns, successors in interest, personal representatives, their past and present attorneys, principals, employees, independent contractors, officers, directors, shareholders, parents, issue, subsidiaries, agents, servants, estates, heirs, administrators, executors, conservators, trustees, legatees, and other affiliated entities of each of the Parties hereto. 17. Modification, Severability & Waiver . This Agreement may not be altered, modified, or changed in any manner except by a writing executed by the Party against whom it is to be enforced. Waiver of the breach of any of the provisions of this Agreement shall not be deemed to be a waiver of any other breach of the same or any other provision of this Agreement. If any term, provision, covenant or condition of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the provisions shall remain in full force and effect and shall in no way be affected, impaired or invalidated. + +6 + +Source: FULUCAI PRODUCTIONS LTD., 10-Q, 12/23/2013 + + + + + + 18. Audit. Each of the Parties may, at its own expense, audit the other Party's compliance with this Agreement, including but not limited to, auditing the other Party's representations and warranties. 19. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of which together shall be deemed to be one and the same instrument. All counterparts so executed shall constitute one agreement binding upon all Parties, notwithstanding that all Parties are signatory to the original or the same counterpart. The Parties may execute this Agreement by facsimile and/or electronic means and such signatures shall be treated as original signatures for all purposes. IN WITNESS WHEREOF the Parties hereto have caused this Agreement as of the Effective Date. + +CONVERGTV, INC. by Name: Title: FULUCAI PRODUCTIONS LTD.(PRODUCER) by Name: Title: + +7 + +Source: FULUCAI PRODUCTIONS LTD., 10-Q, 12/23/2013 + + + + + + + +Source: FULUCAI PRODUCTIONS LTD., 10-Q, 12/23/2013 \ No newline at end of file diff --git a/full_contract_txt/FuseMedicalInc_20190321_10-K_EX-10.43_11575454_EX-10.43_Distributor Agreement.txt b/full_contract_txt/FuseMedicalInc_20190321_10-K_EX-10.43_11575454_EX-10.43_Distributor Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..5a7f2ca3512249a714ccd798fdfa5c31f8b131d7 --- /dev/null +++ b/full_contract_txt/FuseMedicalInc_20190321_10-K_EX-10.43_11575454_EX-10.43_Distributor Agreement.txt @@ -0,0 +1,631 @@ +EXHIBIT 10.43 Dated 29/3/18 + +Distributorship agreement + +between + +Signature Orthopaedics Pty Ltd + +And + +CPM Medical Consultants LLC + +Source: FUSE MEDICAL, INC., 10-K, 3/21/2019 + + + + + +EXHIBIT 10.43 THIS AGREEMENT is dated + +Parties + +(1) Signature Orthopaedics Pty Ltd (ACN 106 702 416) , 7 Sirius Road, Lane Cove, NSW + +(2) CPM Medical Consultants, LLC of 1565N. Central Expressway, Suite 200, Dallas, TX 75080. + +Background + +The Supplier wishes to appoint the Distributor as its non-exclusive distributor for the promotion and sale of the Products within the Territory (both as defined below), and the Distributor wishes to promote and sell the Products within the Territory on the terms of this agreement. + +Agreed terms + +1. Definitions and interpretation + +1.1 The definitions and rules of interpretation in this clause apply in this agreement. + +Business Day: a day (other than a Saturday, Sunday or public holiday in Australia) when banks in Sydney are open for business. + +Commencement Date: means the date of this agreement. + +Control: the ability to direct the affairs of another person, whether by virtue of the ownership of shares, contract or otherwise. + +Inactive Territories means a country in which the Distributor has not sold or supplied the Product during the Initial Term. + +Initial Term has the meaning given to it in clause 12.1. + +Products: As defined in Schedule 1 and includes any other products developed by the Supplier and which the Supplier may permit the Distributor, by express notice in writing, to distribute in the Territory. + +Term: the term of this agreement, as determined in accordance with clause 11. Territory: means the territory specified in Schedule 2. + +Trade Marks: the trade mark registrations listed in Schedule 3 and any further trade marks that the Supplier may permit, or procure permission for, the Distributor to use in the Territory in respect of the Products by express notice in writing. + +GST: goods and services tax chargeable under the Goods and Services Tax Act and any similar replacement or additional tax or such other similar or analogous form of tax under the laws and regulations in the Territory. + +1 + +Source: FUSE MEDICAL, INC., 10-K, 3/21/2019 + + + + + +Year: the period of 12 months from the Commencement Date and each consecutive period of 12 months thereafter during the Term. + +1.2 Clause, schedule and paragraph headings shall not affect the interpretation of this agreement. + +1.3 A person includes a natural person, corporate or unincorporated body (whether or not having separate legal personality). + +1.4 The Schedules form part of this agreement and shall have effect as if set out in full in the body of this agreement. Any reference to this agreement includes the Schedules. + +1.5 A reference to a company shall include any company, corporation or other body corporate, wherever and however incorporated or established. + +1.6 Words in the singular shall include the plural and vice versa. + +1.7 A reference to one gender shall include a reference to the other genders. + +1.8 A reference to any party shall include that party's personal representatives, successors or permitted assigns. + +1.9 A reference to a statute, statutory provision or any subordinated legislation made under a statute is a reference to such statute, provision or subordinated legislation as amended or re-enacted from time to time, whether before or after the date of this agreement and in the case of a reference to a statute is also to all subordinate legislation made under that statute whether before or after the date of this agreement. + +1.10 A reference to writing or written includes faxes and e-mail. + +1.11 Documents in agreed form are documents in the form agreed by the parties and initialled by or on behalf of them for identification. + +1.12 Any reference to a legal term for any action, remedy, method of judicial proceeding, legal document, legal status, court, official or any legal concept or thing shall, in respect of any jurisdiction other than Australia, be deemed to include a reference to what most nearly approximates to the Australian legal term in that jurisdiction. + +1.13 A reference to a document is a reference to that document as varied or novated (in each case, other than in breach of the provisions of this agreement) at any time. + +1.14 References to clauses and schedules are to the clauses and schedules of this agreement. + +2 + +Source: FUSE MEDICAL, INC., 10-K, 3/21/2019 + + + + + +1.15 Any phrase introduced by the terms including, include, in particular or any similar expression shall be construed as illustrative and shall not limit the sense of the words preceding those terms. + +2. Appointment + +2.1 The Supplier appoints the Distributor as its non-exclusive distributor to distribute the Products in the Territory on the terms of this agreement. + +2.2 Following the expiry of the Initial Term, the Supplier may amend the Territory to remove any Inactive Territories. + +2.3 Notwithstanding 2.1 and 2.2, the Supplier may sell or supply the Products to end users within USA at anytime. + +2.4 The Distributor shall not: + +(a) represent itself as an agent of the Supplier for any purpose; or + +(b) pledge the Supplier's credit; or + +(c) give any condition or warranty on the Supplier's behalf except for any warranty or guarantee which cannot be excluded under law; or + +(d) make any representation on the Supplier's behalf; or + +(e) commit the Supplier to any contracts; or + +(f) act as the agent or the buying agent, for any person for any goods which are competitive with the Product; or + +(g) retain any monies of the Supplier except on a trustee or fiduciary basis; or + +(h) knowingly make any false or misleading statement to any supplier or service provider, or to the Distributor or its business, about the Products or the liability of the Supplier for the cost of any goods or services supplied to the Distributor or its business; or + +(i) incur any liability or assume any obligation on behalf of the Supplier; or + +2.5 The Distributor shall not without the Supplier's prior written consent make any promises or guarantees about the Products beyond those: + +(a) agreed between the Distributor and the Supplier; and + +(b) contained in any promotional material supplied by the Supplier. + +3 + +Source: FUSE MEDICAL, INC., 10-K, 3/21/2019 + + + + + +3. Distributor's undertakings + +The Distributor undertakes and agrees with the Supplier that at all times during the Term it will: + +(a) use all reasonable endeavours to promote the distribution and sale of the Products; + +(b) not use any promotional or advertising material for the Products not approved by the Supplier, such approval not be unreasonably withheld; + +(c) provide Yearly non-binding sales forecasts; + +(d) establish and maintain documented procedures for identifying the Products with a control number for traceability and copies of those records and procedures must be made available to the Supplier within thirty (30) days of request; + +(e) provide regular reports on the sales activities within the Territory; + +(f) employ a sufficient number of suitably qualified personnel to ensure the proper fulfilment of the Distributor's obligations under this agreement; + +(g) maintain, on its own account, an inventory of the Products at levels which are appropriate and adequate for the Distributor to meet all customer delivery requirements for the Products throughout the Territory; + +(h) keep full and proper books of account and records clearly showing all enquiries, quotations, transactions and proceedings relating to the Products; + +(i) allow the Supplier, on reasonable notice, access to its accounts and records relating to the sale or distribution of the Products for inspection but not more than once in each year. For clarity, the Supplier will not be permitted access to any accounts or records which do not directly relate to the sale or distribution of the Products; + +(j) comply with any reasonable directives or instructions given by the Supplier for any promotional activities, at the suppliers cost, concerning the nature, type, quality, characteristics, fitness for purpose, suitability, use and description of the Products; + +4. Supply of products + +4.1 The parties acknowledge that: + +(a) the Supplier is the manufacturer of the Products; and + +4 + +Source: FUSE MEDICAL, INC., 10-K, 3/21/2019 + + + + + +(b) the Supplier will have no obligation to separately supply the Products, except as otherwise provided for in this Agreement. + +4.2 Supplier's undertakings + +The Supplier undertakes to: + +(a) provide information and support that may reasonably be requested by the Distributor to enable it to discharge its duties under this agreement properly and efficiently; and + +(b) approve or reject any promotional information or material submitted by the Distributor within 28 days of receipt. + +5. Prices and payment + +5.1 The prices to be paid by the Distributor to the Supplier for the Products are to be the Price, as set out in Schedule 4. + +5.2 Any and all expenses, costs and charges incurred by the Distributor in the performance of its obligations under this agreement will be paid by the Distributor, unless the Supplier has expressly agreed in advance in writing to pay such expenses, costs and charges. + +5.3 The Distributor must pay the full amount invoiced to it by the Supplier in USD$'s within thirty (45) days of the date of invoice. + +5.4 Neither party may withhold payment of any amount due to the other because of any set-off, counter-claim, abatement, or other similar deduction. + +6. GST and taxes (Only Applicable to Australian companies) + +6.1 All sums payable under this agreement, or otherwise payable by any party to any other party under this agreement are exclusive of any GST chargeable on the supplies for which such sums (or any part of them) are the whole or part of the consideration for GST purposes. + +6.2 Where, under this agreement, any party makes a supply to any other party (Recipient) for GST purposes and GST is or becomes chargeable on that supply for which the supplying party is required to account to the relevant tax authority, the Recipient shall, subject to the receipt of a valid GST invoice, pay the supplying party (in addition to, and at the same time as, any other consideration for that supply) the amount of such GST. + +6.3 Where any party is required by this agreement to reimburse or indemnify any other party for any cost or expense, that first party shall reimburse or indemnify the other party for the full amount of the cost or expense, including any GST on that amount, + +5 + +Source: FUSE MEDICAL, INC., 10-K, 3/21/2019 + + + + + +except to the extent that the other party is entitled to credit or repayment for that GST from any relevant tax authority. + +6.4 All import taxes, charges, levies, assessments and other fees of any kind imposed on the purchase or import of the Products shall be the responsibility of, and for the account of, the Distributor. + +7. Advertising and promotion + +7.1 The Distributor shall: + +(a) cooperate with the Supplier in relation to the promotion and advertisement of the Products; + +(b) not make any written statement as to the quality or manufacture of the Products without the prior written approval of the Supplier; and + +(c) pays its own costs of advertising the Product except where there is any separate advertising campaign which the Supplier and the Distributor have agreed to fund jointly in any agreed proportion. + +8. Anti-bribery compliance + +8.1 The Distributor shall: + +(a) comply with all applicable laws, statutes and regulations relating to anti-bribery and anti- corruption; and + +(b) not engage in any activity, practice or conduct which would constitute an offence. + +9. Trade marks and intellectual property + +9.1 The Supplier hereby grants to the Distributor the non-exclusive right, in the Territory, to use the Trade Marks in the promotion, advertisement and sale of the Products, subject to, and for the duration of, this agreement. + +9.2 The Distributor may sell and/or distribute the Products using the Trade Marks in conjunction with any trade marks owned or licensed by the Distributor. + +9.3 All representations of the Trade Marks that the Distributor intends to use shall be submitted to the Supplier for approval before use. + +9.4 Within limiting this clause 12, the Distributor shall be entitled to add a label to the Products it purchases to show that the products purchased are being distributed by the Distributor. + +9.5 The Supplier represents and warrants that: + +6 + +Source: FUSE MEDICAL, INC., 10-K, 3/21/2019 + + + + + +(a) Trade Marks; and + +(b) The Products, do not infringe any intellectual property rights of any third parties and the Supplier agrees to indemnify and hold harmless the Distributor against any clauses by a third party for infringement of intellectual property rights in relation to the Products or the Trade marks . + +9.6 The Distributor shall not sub-license, transfer or otherwise deal with the rights of use of the Trade Marks granted under this agreement. + +9.7 The Distributor shall not do, or omit to do, anything in its use of the Trade Marks that could adversely affect their validity or the goodwill of the Supplier. + +9.8 The Distributor shall immediately enter into any document necessary for the recording, registration or safeguarding of the Supplier's Trade Mark rights with the Supplier for the marketing of the Products under the Trade Marks in a form satisfactory to the Supplier, at the suppliers cost. + +9.9 Each party shall promptly give notice in writing to the other if it becomes aware of: + +(a) any infringement or suspected infringement of the Trade Marks or any other intellectual property rights relating to the Products within the Territory; or + +(b) any claim that any Product or the manufacture, use, sale or other disposal of any Product within the Territory, whether or not under the Trade Marks, infringes the rights of any third party, + +9.10 In respect of any matter that falls within clause 9.9(a): + +(a) the Supplier shall in its absolute discretion, decide what action to take in respect of the matter (if any); + +(b) the Supplier shall conduct and have sole control over any consequent action that it deems necessary; and + +(c) the Supplier shall pay all costs in relation to that action and shall be entitled to all damages and other sums that may be paid or awarded as a result of that action. + +9.11 In respect of any matter that falls within clause 9.9(b): + +(a) the Supplier and the Distributor shall agree: + +(i) what steps to take to prevent or terminate the infringement; and + +(ii) the proportions in which they shall share the cost of those steps and any damages and other sums which may be awarded to or against + +7 + +Source: FUSE MEDICAL, INC., 10-K, 3/21/2019 + + + + + +them, being agreed between the parties that the Supplier shall hold Distributor harmless against any damages connected with any material or workmanship defect of the Products; and + +(b) failing agreement between the parties, either party may take any action as it considers necessary or appropriate, at its own expense, to defend the claim and shall be entitled to and responsible for all damages and other sums that may be recovered or awarded against it as a result of that action. + +9.12 Each party shall, at the request and expense of the other, provide any reasonable assistance to the other (including the use of its name in, or being joined as a party to, proceedings) with any action to be taken by the other party under this clause 9, provided that that party is given such indemnity as it may reasonably require against any losses, costs and expenses it may incur as a result of or in connection with providing such assistance. + +10. Product liability and insurance + +10.1 Subject to the Distributor fulfilling all the conditions in this clause 10, the Supplier shall indemnify the Distributor, defend and hold harmless against any liability incurred by the Distributor in respect of damage to property, death or personal injury arising from any fault or defect in the design of the Products and any reasonable costs, claims, demands and expenses, including reasonable attorneys' fees, arising out of or in connection with that liability (Relevant Claim), except to the extent the liability arises as a result of the wilful misconduct of the Distributor. The Supplier shall add the distributor to their current insurance certificate. + +10.2 The Distributor shall, within five days of a matter which may result in a Relevant Claim: + +(a) give the Supplier written notice of the details of the matter; + +(b) give the Supplier access to and allow copies to be taken of any materials, records or documents as the Supplier may require to take action under clause 10.2(c); + +(c) allow the Supplier the exclusive conduct of any proceedings and take any action that the Supplier requires to defend or resist the matter, including using professional advisers nominated by the Supplier; and + +(d) not admit liability or settle the matter without the Supplier's written consent. + +10.3 During the Term, the Supplier shall maintain product liability insurance with a reputable insurer of no less than AU$10 million for any one occurrence for any and all liability (however arising) for a claim that the Products are faulty or defective. The Supplier shall provide a copy of the insurance policy to the Distributor on request. + +8 + +Source: FUSE MEDICAL, INC., 10-K, 3/21/2019 + + + + + +10.4 The Distributor undertakes to maintain appropriate, up-to-date and accurate records to enable the immediate recall of any Products or batches of Products from the retail or wholesale markets. These records shall include records of deliveries to customers (including batch numbers, delivery date, name and address of customer, telephone number, fax number and e-mail address). + +10.5 The Distributor shall, at the Supplier's cost, give any assistance that the Supplier shall reasonably require to recall, as a matter of urgency, Products from the retail or wholesale market. + +11. Duration and termination + +11.1 This agreement begins on the Commencement Date and, subject to clause 11.2, shall continue for an initial term of one (1) years (Initial Term) and indefinitely after that until terminated by either party giving at least twelve (12) months' prior written notice to expire on or after the expiry date of the initial term. + +11.2 Without affecting any other rights that it may be entitled to, either party may give notice in writing to the other terminating this agreement immediately if: + +(a) the other party fails to pay any amount due under this agreement on the due date for payment and remains in default not less than 14 days after being notified in writing to make such payment; or + +(b) the other party commits a material breach of any material term of this agreement and (if such breach is remediable) fails to remedy that breach within a period of 14 days of being notified in writing to do so; or + +(c) the other party repeatedly breaches any of the terms of this agreement in such a manner as to reasonably justify the opinion that its conduct is inconsistent with it having the intention or ability to give effect to the terms of this agreement; or + +(d) the other party suspends, or threatens to suspend, payment of its debts or is unable to pay its debts as they fall due or admits inability to pay its debts or (being a company) is deemed unable to pay its debts within the meaning of the Corporations Act 2001 (Cth) OR (being a natural person) is deemed either unable to pay its debts or as having no reasonable prospect of so doing, in either case, within the meaning of the Corporations Act 2001 (Cth) OR (being a partnership) has any partner to whom any of the foregoing apply: or + +(e) the other party commences negotiations with all or any class of its creditors with a view to rescheduling any of its debts, or makes a proposal for or enters into any compromise or arrangement with its creditors other than for the sole purpose of a scheme for a solvent amalgamation of that other party with one or more other companies or the solvent reconstruction of that other party; or + +9 + +Source: FUSE MEDICAL, INC., 10-K, 3/21/2019 + + + + + +(f) a petition is filed, a notice is given, a resolution is passed, or an order is made, for or in connection with the winding up of that other party other than for the sole purpose of a scheme for a solvent amalgamation of that other party with one or more other companies or the solvent reconstruction of that other party: or + +(g) an application is made to court, or an order is made, for the appointment of an administrator or if a notice of intention to appoint an administrator is given or if an administrator is appointed over the other party; or + +(h) a person becomes entitled to appoint a receiver over the assets of the other party or a receiver is appointed over the assets of the other party; or + +(i) the other party, being an individual, is the subject of a bankruptcy petition or order; or + +(j) a creditor or encumbrancer of the other party attaches or takes possession of, or a distress, execution, sequestration or other such process is levied or enforced on or sued against, the whole or any part of its assets and such attachment or process is not discharged within 14 days; or + +(k) any event occurs, or proceeding is taken, with respect to the other party in any jurisdiction to which it is subject that has an effect equivalent or similar to any of the events mentioned in clause 11.2(d) to clause 11.2(j) (inclusive); or + +(l) the other party suspends or ceases, or threatens to suspend or cease, to carry on all or a substantial part of its business; or + +(m) the other party, being an individual, dies or, by reason of illness or incapacity (whether mental or physical), is incapable of managing his or her own affairs or becomes a patient under any mental health legislation. + +(n) Without affecting any other rights that it may be entitled to, the Supplier may give notice in writing to the Distributor terminating this agreement immediately if the Distributor purports to assign its rights or obligations under this agreement to an entity that is not (1) affiliated with, (2) related to, or (3) sharing common ownership with the Distributor (a Permitted Assignee). + +12. Effectsof termination + +12.1 Termination of this agreement for any reason shall not affect any rights or liabilities accrued at the date of termination. + +10 + +Source: FUSE MEDICAL, INC., 10-K, 3/21/2019 + + + + + +12.2 At the Supplier's option, on termination of this agreement: + +(a) the Supplier may buy from the Distributor all or any stocks of Products for the current market value for those Products. The Distributor must deliver such Products to the Supplier within 14 days of receiving the Supplier's notice, and the Supplier must pay for the Products in full within 30 days of their delivery. The Supplier shall be responsible for the costs of packaging, insurance and carriage of the Products; or + +(b) the Distributor may dispose of the balance of the Products in its possession and account to the Supplier for the Price for those Products; and + +(c) subject to clause 12.2(b), the Distributor must cease using any intellectual property of the Supplier or of another person that relates to the distributorship and the Distributor must sign any instrument and do any other act that is necessary to achieve this purpose; + +12.3 For the purposes of clause 12.2(a) the current market value in respect of Products shall be the price that the Products are ordinarily supplied as at the date of termination of this agreement. + +12.4 Subject to clause 12.2, all other rights and licences of the Distributor under this agreement shall terminate on the termination date. + +13. Confidentiality + +13.1 Each party undertakes that it shall not at any time, disclose to any person any confidential information concerning the business, affairs, customers, clients or suppliers of the other party or of any member of the group of companies to which the other party belongs, except as provided by clause 13.2. + +13.2 Each party may disclose the other party's confidential information: + +(a) to those of its employees, officers, representatives or advisers who need to know such information for the purpose of carrying out the party's obligations under this agreement. Each party shall ensure that its employees, officers, representatives or advisers to whom it discloses the other party's confidential information comply with this clause 13; and + +(b) as may be required by law, court order or any governmental or regulatory authority; provided, however, that the other party reserves the right to challenge such disclosure under applicable law. If such party elects to challenge the disclosure, no confidential information shall be disclosed during the pendency of such challenge. + +13.3 No party shall use any other party's confidential information for any purpose other than to perform its obligations under this agreement. + +11 + +Source: FUSE MEDICAL, INC., 10-K, 3/21/2019 + + + + + +14. Entire agreement + +14.1 This agreement (and any document referred to in it) constitutes the whole agreement between the parties and supersedes all previous agreements between the parties relating to its subject matter. + +14.2 Each party acknowledges that, in entering into this agreement (and any document referred to in it), it has not relied on, and shall have no right or remedy in respect of, any statement, representation, assurance or warranty (whether made negligently or innocently) other than as expressly set out in this agreement. Each party agrees that its only liability in respect of those representations and warranties that are set out in this agreement (whether made innocently or negligently) shall be for breach of contract. + +14.3 Nothing in this clause shall limit or exclude any liability for fraud. + +15. Variation + +No amendment or variation of this agreement shall be effective unless it is in writing and signed by the parties (or their authorised representatives). + +16. Assignment and other dealings prohibited + +16.1 The Distributor shall not assign, transfer, mortgage, charge, declare a trust of or deal in any other manner with this agreement or any of its rights and obligations under or arising out of this agreement, or purport to do any of the same; provided, however, the Distributor may assign or transfer this agreement to a Permitted Assignee without the consent of Supplier. The Distributor shall not sub-contract or delegate in any manner any or all of its obligations under this agreement to any third party or agent. + +16.2 If the Distributor seeks the Supplier's consent to any proposed dealing under clause 16.1, the Distributor must: - + +(a) disclose fully in writing all material facts relating to the dealing + +(b) comply fully with any conditions or requirements set down by the Supplier which attach to any Suppliers consent that is given. + +16.3 Each party that has rights under this agreement is acting on its own behalf and not for the benefit of another person. + +17. Freedom to contract + +The parties declare that they each have the right, power and authority and have taken all action necessary to execute and deliver and to exercise their rights and perform their obligations under this agreement. + +12 + +Source: FUSE MEDICAL, INC., 10-K, 3/21/2019 + + + + + +18. Waiver + +No failure or delay by a party to exercise any right or remedy provided under this agreement or by law shall constitute a waiver of that or any other right or remedy, nor shall it preclude or restrict the further exercise of that or any other right or remedy. No single or partial exercise of such right or remedy shall preclude or restrict the further exercise of that or any other right or remedy. + +19. Severance + +19.1 If any provision of this agreement (or part of any provision) is found by any court or other authority of competent jurisdiction to be invalid, illegal or unenforceable, that provision or part-provision shall, to the extent required, be deemed not to form part of this agreement, and the validity and enforceability of the other provisions of this agreement shall not be affected. + +19.2 If a provision of this agreement (or part of any provision) is found illegal, invalid or unenforceable, the provision shall apply with the minimum modification necessary to make it legal, valid and enforceable. + +20. Notices + +20.1 Any notice required to be given under this agreement, shall be in writing and shall be delivered personally, by email, or sent by pre-paid first class post or recorded delivery or by commercial courier, to each party required to receive the notice at its address as set out at the beginning of this agreement or as otherwise specified by the relevant party by notice in writing to each other party. + +20.2 Any notice shall be deemed to have been duly received: + +(a) if delivered personally, when left at the address and for the contact referred to in this clause; or + +(b) if sent by pre-paid first class post or recorded delivery, at 9.00 am on the second Business Day after posting; or + +(c) if delivered by commercial courier, on the date and at the time that the courier's delivery receipt is signed; or + +(d) if delivered by email, on the date and at the time such email is received by the recipient whether such message is opened at that time. + +Any notice given or received by a lawyer for a party to this agreement is deemed to be given or received with the actual or ostensible authority of the lawyer. + +The Supplier may at times by notice nominate an address for service of legal proceeding, whether in Australia or in any other place. A nomination binds the + +13 + +Source: FUSE MEDICAL, INC., 10-K, 3/21/2019 + + + + + +parties but nothing prevents the Supplier from making further nomination in place of any earlier nomination. + +20.3 A notice given under this agreement shall not be validly given if sent by e-mail. + +21. Third party rights + +21.1 A person who is not a party to this agreement shall not have any rights under or in connection with it by virtue of the Contracts + +21.2 The rights of the parties to terminate, rescind or agree any variation, waiver or settlement under this agreement are not subject to the consent of any person that is not a party to this agreement. + +22. No partnership or agency + +Except as expressly provided, nothing in this agreement is intended to, or shall be deemed to, establish any partnership or joint venture between the parties, constitute either party the agent of the other, nor authorise a party to make or enter into any commitments for or on behalf of the other party. + +23. Counterparts + +This agreement may be executed in any number of counterparts, each of which when executed and delivered shall constitute an original of this agreement, but all the counterparts shall together constitute the same agreement. + +24. Governing law and jurisdiction + +24.1 This agreement and any dispute or claim arising out of or in connection with it or its subject matter or formation (including non-contractual disputes or claims) shall be governed by and construed in accordance with Ohio law. + +24.2 The parties irrevocably agree that the courts of Ohio shall have non-exclusive jurisdiction to settle any dispute or claim that arises out of or in connection with this agreement or its subject matter or formation (including non- contractual disputes or claims). + +This agreement has been entered into on the date stated at the beginning of it. + +14 + +Source: FUSE MEDICAL, INC., 10-K, 3/21/2019 + + + + + +Schedule 1 + +AriaTM Hip Stem System + +RemedyTM Hip Stem system + +LogicalTM Hip Cup system + +Signature BiPolar Head + +Genius Total knee system + +15 + +Source: FUSE MEDICAL, INC., 10-K, 3/21/2019 + + + + + +Schedule 2 Territory + +USA. + +16 + +Source: FUSE MEDICAL, INC., 10-K, 3/21/2019 + + + + + +Schedule 3 The Trade Marks + +OriginTM, LogicalTM, AriaTM, RemedyTM, GeniusTM + +17 + +Source: FUSE MEDICAL, INC., 10-K, 3/21/2019 + + + + + +Schedule 4 Prices + +Aria Stem $610 + +Origin Stem $610 + +Remedy Stem $610 + +Logical Cup $450 + +Logical Liner $210 + +Metal Head $240 + +Ceramic Head $340 + +BiPolar Head $250 + +PS / CR Femoral Component $550 + +Insert $340 + +Tibia Tray $440 + +Patella $70 + +18 + +Source: FUSE MEDICAL, INC., 10-K, 3/21/2019 + + + + + +SIGNED by Signature Orthopaedics Pty Ltd (ACN 106 702 416) In accordance with section 127 of the Corporations Act: + +) ) ) ) ) + +Director/Secretary + +Name (please print) + +Director + +Name (please print) + +SIGNED by + +CPM Medical LLC + +) ) ) ) ) + +Director/Secretary + +Name (please print) + +Director + +Name (please print) + +19 + +Source: FUSE MEDICAL, INC., 10-K, 3/21/2019 \ No newline at end of file diff --git a/full_contract_txt/GAINSCOINC_01_21_2010-EX-10.41-SPONSORSHIP AGREEMENT.txt b/full_contract_txt/GAINSCOINC_01_21_2010-EX-10.41-SPONSORSHIP AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..46c3ea98249e076d8d41bacd472ac30ebfe523a0 --- /dev/null +++ b/full_contract_txt/GAINSCOINC_01_21_2010-EX-10.41-SPONSORSHIP AGREEMENT.txt @@ -0,0 +1,97 @@ +Exhibit 10.41 + +SPONSORSHIP AGREEMENT + +This Sponsorship Agreement (the "Agreement") is entered into effective January 1, 2010 by and between Stallings Capital Group Consultants, Ltd., a Texas limited partnership dba Bob Stallings Racing ("Racing"), and GAINSCO, INC., a Texas corporation (the "Sponsor"). + +Racing organized and operated a racing team engaging in Daytona Prototype Series auto racing (the "Racing Team") in professional races in 2005 through 2008, and the Sponsor was the primary sponsor of the Racing Team pursuant to Sponsorship Agreements dated February 7, 2005, February 1, 2006, January 1, 2007, January 1, 2008 and January 1, 2009. Racing has invited the Sponsor to continue to act as the primary sponsor of the Racing Team for 2010, and the Sponsor desires to act in that capacity. In consideration of the sponsorship fee provided for herein, the parties desire to enter into this Agreement to govern the terms of such sponsorship in 2010. + +Now, therefore, Racing and the Sponsor hereby agree as follows: + +1. Term. Subject to the provisions of Section 14 hereof, the term of this Agreement and the sponsorship described herein shall commence on January 1, 2010 and extend through December 31, 2010. + +2. Advertising and Other Benefits. Subject to payment by the Sponsor of the sponsorship fee provided for herein, during the term of this Agreement Racing shall cause the Racing Team to provide for the Sponsor's benefit all of the benefits customarily associated with the sponsorship of a Daytona Prototype Series racing team and consistent with the benefits provided to the Sponsor in 2005 - 2009 (individually, a "Benefit," and collectively, the "Benefits"), including but not limited to the following: (i) displaying prominent identification of the Sponsor's name and/or logo in signage on the race car and racing suits and, where appropriate, on other team equipment (subject to approval by the Sponsor); (ii) making available for the use of the Sponsor (x) the personalities associated with the Racing Team, including without limitation the name, voice, picture, portrait, likeness, persona and/or signature of each driver for endorsements, commercial advertising and promotions in any and all media throughout the world during the term of this Agreement, (y) the Racing Team's home base facilities in Texas, and (z) those facilities designated or assigned for the use of the Racing Team at each race and race location at which the Racing Team actually participates in the race, all for appropriate public relations and other promotional and marketing purposes. Racing agrees that it will actively participate in the Rolex 24 at Daytona in January, 2010. As it concerns (y) and (z) above, access shall be subject to appropriate security and safety restrictions designated by the applicable racing location and the Racing Team; + + + + + +(iii) making available for the use of the Sponsor a non-racing look-alike (a "Show Car") of the GAINSCO 99 race car (the "Car") used by the Racing Team. Subject to the Sponsor's first right to use the Show Car, it will also be made available to Racing when such use does not interfere with the Sponsor's use of the Show Car; (iv) allowing the Sponsor the use of the likeness of the Car, including all paint and graphics, for promotion and advertising of or by the Sponsor, and Racing shall be responsible for all necessary consents and permissions from any other sponsors to be sure the Sponsor can use the likeness of the Car as specified herein; (v) prohibiting the endorsement by Racing and any members of Racing, including the drivers, of any entities, products or services which are in direct competition or otherwise inconsistent with the Sponsor or it products or services, unless such endorsement activity is approved in writing by Racing and the Sponsor; and (vi) allowing the Sponsor to use the conference room and other areas of the racing shop and garage for meetings and similar events, provided that the Sponsor gives prior notice of the need for such use, and such use does not interfere with operations of the racing shop and garage and is otherwise consistent with reasonable requirements imposed by Racing to assure orderly operations and provide for adequate safety measures at all times. + +3. Sponsorship Fee. The Sponsor shall pay to Racing a sponsorship fee in the amount of $750,000.00 for the term of this Agreement, payable in an initial installment payable on or before February 1, 2010 in the amount of $350,000.00 and ten installments of $40,000.00 on or before the first day of each month commencing March 1, 2010 and ending with the installment due on December 1, 2010 (unless this Agreement is sooner terminated pursuant to Section 14 hereof, in which case Sponsor shall have no obligation to make any payments after the date of termination). + +4. Compliance with Applicable Rules and Regulations. Provision of the Benefits pursuant to this Agreement is subject to rules and requirements of each organization and venue hosting a racing event in which the Racing Team competes during the term hereof, and the Sponsor agrees to submit to Racing all advertising and other promotional material relating to each such event in sufficient time to enable Racing to assure compliance with such rules and requirements. If as a result of such rules and requirements Racing is unable to provide a Benefit in the form requested by the Sponsor, Racing shall be permitted to provide a substitute promotion or advertisement in compliance with such requirements. 2 + + + + + +5. Sponsor's Maximum Obligation; Indemnification. Racing represents to the Sponsor that the Sponsor's aggregate obligation hereunder will not exceed the amount of the sponsorship fee set forth in Section 3 hereof (or such lesser amount as is payable by the Sponsor in the event that this Agreement is terminated pursuant to Section 14 hereof), plus, if applicable, collection costs that may be reasonably incurred by Racing in a legal proceeding to collect all or any part thereof (the "Maximum Obligation"). Racing agrees to indemnify the Sponsor and its officers, directors, agents and employees and to hold them harmless from any loss, claim, cost, damage or liability in excess of the Maximum Obligation which (i) the Sponsor shall incur as a result of this Agreement, or (ii) arises from any failure by Racing to perform any of its obligations hereunder. + +6. Retention of Rights. The only rights granted to the Sponsor hereunder are the right to receive the Benefits, and Racing hereby retains all other rights with respect to the Racing Team, including but not limited to logos, symbols, names and other marks and intellectual property of the Racing Team, and any proceeds derived by the Racing Team. The Sponsor hereby retains and does not grant any rights to Racing to use any of its logos, symbols, names or other marks or intellectual property, except for use as described in Section 2 hereof. In the event that this Agreement is terminated or if the sponsorship terminates at the end of the term provided for herein, each of the parties shall retain the rights to use its logos, symbols, names or other marks or intellectual property including, in the case of the Sponsor, the right to use the names and marks "GAINSCO 99", "the GAINSCO 99 Car", or similar phrases or derivations thereof. + +7. Relationship to Other Sponsors. The Sponsor acknowledges that Racing has arranged and may arrange in the future for other sponsors for the Racing Team. Racing agrees that, during the term of this Agreement, (i) Sponsor shall have the right to approve or disapprove any additional sponsor identified by Racing, and (ii) unless another proposed sponsor has agreed to pay a sponsorship fee that exceeds the amount paid by Sponsor, no other sponsor shall receive any benefit of greater value (including either an equivalent or a more prominent use of another sponsor's name, logo or other identifying information) than the Benefits provided to the Sponsor hereunder. + +8. Insurance. (a) Racing shall obtain and maintain, at Racing's expense, comprehensive automobile liability insurance covering all owned, non-owned and hired vehicles used by Racing in the Business with limits of not less than $5,000,000 per occurrence combined single limit for personal injury and property damage, including all statutory coverage for all states of operation. Racing shall also provide comprehensive (fire and theft) and collision insurance on each vehicle used in the Business. Racing shall provide the Sponsor a certificate of insurance evidencing "Gainsco Inc. and all related entities" as additional insureds, stating that such insurance is primary in coverage to any other insurance which may be available the Sponsor, and providing at least thirty (30) days' prior written notice to the Sponsor of cancellation, modification or material change to the policy. + +(b) Racing shall obtain and maintain pursuant to the terms of this Agreement, at its sole expense, the following types of insurance coverage, with minimum limits as set forth below: + +(i) Commercial General Liability covering liability arising from premises, operations, independent contractors, personal and advertising injury and contractual liability—$5,000,000 each occurrence. 3 + + + + + +(ii) Racing Owners' Sponsors (Spectators) Legal Liability including Participant Legal Liability—$5,000,000 each occurrence. + +(iii) Business Automobile Liability covering all owned, hired and non-owned vehicles—$5,000,000 each occurrence, including statutory coverages for all states of operations. + +(iv) Workers Compensation—statutory limits for all states of operation. + +(v) Employers Liability—$5,000,000 each employee for bodily injury by accident and $500,000 each employee for bodily injury by disease. + +All policies of insurance procured by Racing herein shall be written as primary policies, not contributing with or in excess of coverage that the Sponsor may carry. If Racing's liability policies do not contain the standard separation of insureds provision, or a substantially similar clause, they shall be endorsed to provide cross-liability coverage. + +(c) Racing shall provide the Sponsor with a certificate of insurance evidence compliance with the insurance requirements set forth above. Certificates shall provide that "Gainsco Inc. and all related entities" shall be named as additional insureds on all liability policies, stating that such insurance is primary in coverage to any other insurance which may be available to the Sponsor, and providing at least thirty (30) days' prior written notice to the Sponsor of termination, cancellation, modification or material change to the policy. + +(d) Such certificates shall be in a form acceptable to, and underwritten by insurance company(ies) reasonably satisfactory to the Sponsor. By requiring insurance herein, the Sponsor does not represent that coverage limits will necessarily be adequate to protect Racing. The purchase of appropriate insurance coverage by Racing or the furnishing of certificates of insurance shall not release Racing from its obligations and liabilities under this Agreement. + +9. Conduct. Racing and all Racing members, including but not limited to all drivers, agree to use best efforts to conduct themselves in such a manner so as not to reflect unfavorably upon the Sponsor or its products. The Sponsor shall have the right to terminate this Agreement on written notice to Racing if any driver, the general manager or any other member of Racing (i) fails to conduct himself/herself in accordance with generally accepted standards of morality, (ii) engages in any activity which reflects adversely on the image, reputation or goodwill of the Sponsor or (iii) disparages the products or services of the Sponsor; provided, however, the Sponsor shall not have the right to terminate this Agreement if Racing, within fifteen (15) days after receipt of written notice by the Sponsor terminates the employment of, or otherwise dismisses from the racing team, the driver(s), general manager(s) or other member(s) of Racing engaging in the offensive conduct. Upon termination, the Sponsor shall be entitled to a pro rata refund of monies paid for services not yet performed by Racing based upon the number of races for the applicable racing season. The Sponsor's decision with respect to all matters arising under this Section shall be conclusive. 4 + + + + + +10. Remedies. If either party breaches any provision of this Agreement, the other party shall be entitled to seek monetary damages and, if appropriate, equitable relief to require the performance of the obligations hereunder. + +11. Assignment. Neither party shall assign any of its rights or obligations hereunder without the prior written consent of the other party. + +12. Entire Agreement; Amendment and Waiver; Confidentiality. This Agreement constitutes the entire agreement between Racing and the Sponsor with respect to the subject matter hereof and supercedes all prior agreements and understandings. Any amendment of this Agreement must be by a written instrument signed by both parties, and any waiver of any provision hereof must be in writing, signed by the party agreeing to such waiver. Each of the parties hereto agrees to hold in confidence the terms hereof and, unless otherwise required by law, neither party shall release, disclose or publish any of the terms hereof without the prior written consent of the other party. + +13. Notices. All notices and communications to be made with respect to this Agreement shall be in writing and shall be effective only when delivered by (i) hand, (ii) prepaid certified United States mail, return receipt requested, or (iii) overnight delivery service providing proof of delivery, addressed as follows: + +If to Racing: Stallings Capital Group Consultants, Ltd., dba Bob Stallings Racing Attention: Robert W. Stallings, President 4 Windsor Ridge Frisco, Texas 75034 + +if to the Sponsor: GAINSCO, Inc. Attention: Glenn W. Anderson, President 3333 Lee Parkway, Suite 1200 Dallas, Texas 75219 + +Either party may change the name or address for notice by providing a written notice of such change in accordance with this Section of the Agreement. + +14. Termination by the Sponsor. Notwithstanding the provisions of Section 1 hereof, the Sponsor shall have the right at any time prior to December 31, 2010 to terminate this Agreement by giving written notice of such termination to Racing. In the event of such a termination, (i) the Sponsor shall have no further obligation to make payments toward the sponsorship fee contemplated in Section 3 hereof, (ii) Racing shall have no further obligation to provide any Benefits hereunder, and (iii) the remaining provisions of this Agreement shall remain in full force and effect. + +15. Miscellaneous. (a) This Agreement may be executed in two counterparts, each of which shall be deemed to be an original, but both of which shall constitute a single agreement. 5 + + + + + +(b) The headings and sections of this Agreement are for convenience only and shall not affect the interpretation of any provision hereof. + +(c) This Agreement shall be governed and construed in accordance with the internal laws of the State of Texas, without giving effect to principles of conflict of laws. + +This Agreement is executed as of the date first above written. + + 6 + +STALLINGS CAPITAL GROUP CONSULTANTS, LTD., DBA BOB STALLINGS RACING GAINSCO, INC. + +By: /s/ Robert W. Stallings By: /s/ Glenn W. Anderson Robert W. Stallings, President Glenn W. Anderson, President \ No newline at end of file diff --git a/full_contract_txt/GALACTICOMMTECHNOLOGIESINC_11_07_1997-EX-10.46-WEB HOSTING AGREEMENT.txt b/full_contract_txt/GALACTICOMMTECHNOLOGIESINC_11_07_1997-EX-10.46-WEB HOSTING AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..9b796344d40419060b9fabccbc35ce7bea4343ff --- /dev/null +++ b/full_contract_txt/GALACTICOMMTECHNOLOGIESINC_11_07_1997-EX-10.46-WEB HOSTING AGREEMENT.txt @@ -0,0 +1,19 @@ +EXHIBIT 10.46 + + WEB HOSTING AGREEMENT + +This agreement shall void and nullify any and all previous agreements to this date between Galacticomm and Horst Entertainment Inc. + +There shall be no additional fees of any kind paid to Galaticomm, other than those stated within this agreement for software usage and/or bandwidth usage. + +Horst Entertainment agrees to pay Galactcomm $0.01 (one cent) per access up to 400,000 accesses thereafter payment shall be $0.005 (one-half cent) per access. Horst Entertainment shall send this amount to Galacticomm by no later than Wednesday for accesses used from the previuos week (Monday thru Sunday). + +Galacticomm must provide a person(s) to correct any technical problems (Server being down or inaccessible) 24 hours per day, 7 days per week. This person(s) must be available by beeper or telephone. Horst Entertainment shall provide this same 24 hour service at the broadcast location. + +In the event Galacticomm, Inc. chooses to terminate this agreement, Horst Entertainment Inc. will have the right to purchase a license copy of the software in the amount of $15,000.00. + +All parties have read and fully agree to all terms and conditions as set forth in this Web Hosting Agreement. Any disputes arising herein shall be settled in a court in FLorida. + +/s/ Yannick Tessier 9/9/97 - ----------------------- ------ Galacticomm Date + +[ILLEGIBLE] HORST 9/9/97 - ------------------------- ------ Horst Entertainment Inc. Date \ No newline at end of file diff --git a/full_contract_txt/GALERATHERAPEUTICS,INC_02_14_2020-EX-99.A-JOINT FILING AGREEMENT.txt b/full_contract_txt/GALERATHERAPEUTICS,INC_02_14_2020-EX-99.A-JOINT FILING AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..221f92d3fe2ca2f355677dd55c60c20075197479 --- /dev/null +++ b/full_contract_txt/GALERATHERAPEUTICS,INC_02_14_2020-EX-99.A-JOINT FILING AGREEMENT.txt @@ -0,0 +1,65 @@ +Exhibit A + +JOINT FILING AGREEMENT + +Pursuant to and in accordance with the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder (the "Exchange Act") the undersigned hereby agree to the joint filing of Clarus IV-A, L.P., Clarus IV-B, L.P., Clarus IV-C, L.P., Clarus IV-D, L.P., Clarus IV GP, L.P., Blackstone Clarus GP L.P., Blackstone Clarus GP L.L.C., Blackstone Holdings II L.P., Blackstone Holdings I/II GP L.L.C., The Blackstone Group Inc., Blackstone Group Management L.L.C. and Stephen A. Schwarzman, on behalf of each of them of any filing required by such party under Section 13 of the Exchange Act or any rule or regulation thereunder (including any amendment, restatement, supplement, and/or exhibit thereto) with respect to securities of Galera Therapeutics, Inc., a Delaware corporation, and further agree to the filing, furnishing, and/or incorporation by reference of this Agreement as an exhibit thereto. Each of them is responsible for the timely filing of such filings and any amendments thereto, and for the completeness and accuracy of the information concerning such person contained therein; but none of them is responsible for the completeness or accuracy of the information concerning the other persons making the filing, unless such person knows or has reason to believe that such information is inaccurate. This Agreement shall remain in full force and effect until revoked by any party hereto in a signed writing provided to each other party hereto, and then only with respect to such revoking party. This Agreement may be executed in any number of counterparts all of which taken together shall constitute one and the same instrument. + +IN WITNESS WHEREOF, the undersigned hereby execute this Agreement this 14t h day of February 2020. CLARUS IV-A, L.P. By: Clarus IV GP, L.P., its general partner By: Blackstone Clarus GP L.P., its general partner By: Blackstone Clarus GP L.L.C., its general partner + +By: /s/ John G. Finley Name: John G. Finley Title: Chief Legal Officer + +CLARUS IV-B, L.P. By: Clarus IV GP, L.P., its general partner By: Blackstone Clarus GP L.P., its general partner By: Blackstone Clarus GP L.L.C., its general partner + +By: /s/ John G. Finley Name: John G. Finley Title: Chief Legal Officer + +CLARUS IV-C, L.P. By: Clarus IV GP, L.P., its general partner By: Blackstone Clarus GP L.P., its general partner By: Blackstone Clarus GP L.L.C., its general partner + +By: /s/ John G. Finley Name: John G. Finley Title: Chief Legal Officer + +[Galera Therapeutics, Inc. - Joint Filing Agreement] + + + + + +CLARUS IV-D, L.P. By: Clarus IV GP, L.P., its general partner By: Blackstone Clarus GP L.P., its general partner By: Blackstone Clarus GP L.L.C., its general partner + +By: /s/ John G. Finley Name: John G. Finley Title: Chief Legal Officer + +CLARUS IV GP, L.P. By: Blackstone Clarus GP L.P., its general partner By: Blackstone Clarus GP L.L.C., its general partner + +By: /s/ John G. Finley Name: John G. Finley Title: Chief Legal Officer + +BLACKSTONE CLARUS GP L.P. By: Blackstone Clarus GP L.L.C., its general partner + +By: /s/ John G. Finley Name: John G. Finley Title: Chief Legal Officer + +BLACKSTONE CLARUS GP L.L.C. + +By: /s/ John G. Finley Name: John G. Finley Title: Chief Legal Officer + +BLACKSTONE HOLDINGS II L.P. By: Blackstone Holdings I/II GP L.L.C., its general partner + +By: /s/ John G. Finley Name: John G. Finley Title: Chief Legal Officer + +BLACKSTONE HOLDINGS I/II GP L.L.C. + +By: /s/ John G. Finley Name: John G. Finley Title: Chief Legal Officer + +THE BLACKSTONE GROUP INC. + +By: /s/ John G. Finley Name: John G. Finley Title: Chief Legal Officer + +[Galera Therapeutics, Inc. - Joint Filing Agreement] + + + + + +BLACKSTONE GROUP MANAGEMENT L.L.C. + +By: /s/ John G. Finley Name: John G. Finley Title: Chief Legal Officer + +/s/ Stephen A. Schwarzman Stephen A. Schwarzman + +[Galera Therapeutics, Inc. - Joint Filing Agreement] \ No newline at end of file diff --git a/full_contract_txt/GIGGLESN_HUGS,INC_06_23_2016-EX-10.2-STRATEGIC ALLIANCE AGREEMENT.txt b/full_contract_txt/GIGGLESN_HUGS,INC_06_23_2016-EX-10.2-STRATEGIC ALLIANCE AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..1f1b2295f556b11d54bc8efd0d6dc2283b4f17ec --- /dev/null +++ b/full_contract_txt/GIGGLESN_HUGS,INC_06_23_2016-EX-10.2-STRATEGIC ALLIANCE AGREEMENT.txt @@ -0,0 +1,43 @@ +STRATEGIC ALLIANCE AGREEMENT This Strategic Alliance Agreement (this "Agreement") is made and entered into as of May 17, 2016, (the "Effective Date") by and between Giggles N' Hugs, Inc., a Nevada corporation (the "Company"), and Kiddo, Inc., a Florida corporation, Inc., ("Consultant"). WHEREAS, Consultant is retained by the Company as an Independent Contractor to introduce investors, celebrity spokespersons, press and media relationships, raise public awareness of the company and its public securities, and for other services related to Consultant's expertise; and WHEREAS, the Company and Consultant have agreed upon, and wish to memorialize their agreement concerning the status and responsibilities of the parties. NOW, THEREFORE, the parties agree as follows: 1. Services (a) General. Consultant shall use all best efforts to provide services including the following: ● Capital ○ Introduction to key investors. ○ Introduction to strategic partners ○ Introduction to celebrity endorsement and involvement, including but not limited to celebrity investors. ● Branding ○ Concept generation for overall brand strategy and market launch. ○ Facilitate and help structure strategic relationships partnerships with key influencers and celebrities and their children in various major markets, including NY and Los Angeles. ● Marketing ○ Public relations and marketing services, including grass-roots campaign, social media, local and national TV interviews and shows, local and national newspaper and magazine exposure and interviews, investor relations and shareholder awareness. ○ Expansion of brand awareness through creating and managing social media alliances with mommy bloggers and studios to start using location/possible tie-ins to national and local events, including Super Saturday LA, Super Saturday Hamptons, etc. ○ Solicit Advertising and partnership opportunities with consultants current and future corporate clients ○ Introduction of company to NY market with pop-up or take over existing play space and brand Company to the NY market. ○ Reach out to mall partners in partnership with the Company. Utilizing the Company's existing mall relationships and current offers. ● Licensing and Merchandising ○ Review all of Company's intellectual property for use in future plans, not including legal work ○ Facilitate and help structure strategic partnerships ○ with distribution partners, publishing partners, advertising partners, retail partners, licensing partners, etc. ○ Facilitate and help structure strategic relationship with merchandising and manufacturing partners, such as Hasbro or Mattel, etc. ○ Facilitate and help structure strategic relationship with merchandise partners for children's clothing line, frozen food line, toys and games, etc. ○ Create and begin 2017 roll out plan including product placement and further expansion of retail locations. 1 + + + + + +● Entertainment ○ Consultant will facilitate and structure strategic relationships with publishing companies for Children's books, live news shows, TV show, entertainment shows, movies, and branding, etc. ○ Launch overall concept implementation from Characters development for in-house programming, live shows, TV show, books, product including apparel and toys, gadgets. ● Food and Beverage ○ Consultant will facilitate and structure strategic relationships with frozen and fresh food manufacturing and delivering companies, such as the idea of the "brought to home" meals with companies such as Blue Apron for kids meals. ○ Use best efforts to create brand partnerships and other strategic relationships described above. "Best efforts" means that degree of effort which would be reasonable for a person under similar circumstances. b) Projected timeline. Consultant will make all best efforts to conduct the following services in the time stated: Day 1: Concept generation for overall brand strategy ideation. Create plan for concept launch. Review all Giggles IP for use in future plans. Begin grass-roots campaign and social media buzz regarding the brand, and its existence as a public company to increase SH awareness. "Getting the story out" May: Launch overall concept implementation from Characters development for in-house programming, live shows, TV show, books, product including apparel and toys, gadgets. "getting ready" June: Introduction of POSSIBLE key financial partners and brand like partners to align with brand. Aside from raising awareness for the brand, which should already show appreciable increase in stock price, we will procure individual investors who desire to be part of Giggle and Hugs in partnership alignments. July: Reach out to mall partners in partnership with Giggles & Hugs. At this time, the brand has generated more a buzz and we should be able to make the best deals possible for expansion. The stock price should have shown an increase and there should be more funds available for growth. This expansion effort will pave the way for the next level of investor. Planning on growth to new locations within 6-9 months from this point. Start creating alliances with mommy bloggers and studios to start using location/possible tie in to Super Saturday LA, among other local events that will help broaden the brand awareness. Possible tie in to Super Saturday Hamptons, and other events that make sense for the brand. Same as above for purposes of bringing the brand to influencers and others in the industry. October: Introduce Giggles & Hugs to NY market with pop-up or take over existing play space and brand Giggles & Hugs to the NY market. Bring in NY influencers and celebs with their kids. Expand the buzz for the brand. 2 + + + + + +November: Merchandise partner such as Hasbro or Mattel Products in process while trying to partner for a retailer/distributor on both levels Children's books - after we have built out Giggles and Hugs characters and figure out what that looks like from live show, TV show, book, branding etc. Possible TV show opportunity (not priority) To accomplish this phase, we will utilize our licensing partner, Brand Centric, and will introduce you to our partners on licensing to work together on all licensing fronts. Frozen foods. We will need to revisit your deal that was on the table at that time. It will be appropriate to enter into that deal as part of the general over-all scheme to grow the brand. Also, the idea of the "brought to home" meals such as Blue Apron for kids meals. We believe that this area has potential. We should visor that deal now, and prepare for the roll out of the product in accordance with this area of the proposed timeline. Merchandise partner for children's clothing line December: Create and begin 2017 roll out plan including product placement and further expansion of G&H locations. January: Implementation of roll out plan. 2. Consideration. In consideration for all duties and obligations contained herein, on or before the Effective date above, Company shall issue to Consultant a warrant to purchase 4,400,000 shares of the Company's common stock, which is equal to 10% of the issued and outstanding shares of common stock of the Company at the time of the grant. (a) The exercise price for the warrants shall be $0.075 per share, and shall not increase for any reason. (b) Upon achievement of certain milestones, the Warrants shall immediately vest upon any of the following events which may occur at any time ("Milestones"): 1) 10% upon the execution of this Agreement; and attached PR contract. 2) 20% upon the Company's receipt of a net equity investment of $1 million into the Company from any source ("Included Investors"), except those with a prior relationship with Company or its agents; 3) 20% upon the Company's receipt of an additional net equity investment of $1 million (an aggregate of $2 million) from Included Investors; 4) 20% upon the closing price for the Company's common stock closes above $80 (eighty cents) per share for 10 out of any 20 consecutive trading days; 5) 15% upon the announcement and consummation of a strategic relationship with at least two "A-List Celebrity" upon terms and conditions mutually agreed upon with the Company and Consultant. 6) 15% upon the launch and initial distribution of a Giggles N' Hugs branded product line, which may be clothing, furniture, frozen food, toys or similar merchandising (a "Product Line). 3 + + + + + +(c) It is agreed that one event shall not trigger more than one of the above vesting provisions (e.g. a strategic relationship Honest Company and Jessica Alba shall not vest 30% of the Warrants under items 5 and 6, above). Further, no vesting of Milestones 2-4, will be triggered as a result of an acquisition of the Company, or a public or registered offering of its securities, unless such result is from the direct performance of Consultant. (d) Company will only sell, transfer or issue stock at prices that are in the best interest of the company and its shareholders. 3. Termination. Either party may terminate this agreement after 3 years following the effective date. (a) In addition, this Agreement will terminate upon the following: (1) Completion of work or period of work provided in this agreement. (2) Termination by Company or Consultant for any material breach, which is not cured within 30 days after written notice of any such material breach from the non-breaching party, pursuant to the terms of the Agreement. (3) By the Company, at its option, if at least two Milestones (excluding Milestones 1) are not achieved within 12 months from the Effective Date. 4. Relationship of Parties. Consultant is an independent contractor and is not an agent or employee of, and has no authority to bind, the Company by contract or otherwise. Consultant will report as self-employment income all compensation received by Consultant pursuant to this Agreement. Consultant will indemnify the Company and hold it harmless from and against all claims, damages, losses, costs and expenses, including reasonable fees and expenses of attorneys and other professionals, relating to any obligation imposed by law on the Company to pay any withholding taxes, social security, unemployment or disability insurance, or similar items in connection with compensation received by Consultant pursuant to this Agreement. Consultant will not be entitled to receive any vacation or illness payments or to participate in any plans, arrangements, or distributions by the Company pertaining to any bonus, profit sharing, insurance or similar benefits for the Company's employees. 5. Confidential Information. Consultant acknowledges that, in connection with providing the Services, Consultant will acquire confidential and proprietary information of the Company, including without limitation information relating to the Company's business, products, technology and customers, and that all such information is and will be confidential and proprietary information of Company (collectively "Confidential Information"). Confidential Information will not include, however, any information that is or becomes part of the public domain through no fault of Consultant or that Company regularly gives to third parties without restriction on use or disclosure. Consultant will not disclose or permit disclosure of any Confidential Information of the Company to third parties other than as required to perform the Services. Consultant agrees to take all reasonable measures to protect the secrecy of and avoid disclosure or use of Confidential Information of the Company in order to prevent it from falling into the public domain or the possession of persons other than those persons authorized under this Agreement to have any such information. Consultant further agrees to notify the Company in writing of any actual or suspected misuse, misappropriation or unauthorized disclosure of the Company's Confidential Information, which may come to Consultant's attention. 4 + + + + + +6. Non-Solicitation. Consultant will not, during the Term, and for a period of one (1) year thereafter, directly or indirectly: (i) solicit, recruit or promote the solicitation or recruitment of any employee or consultant of the Company for the purpose of encouraging that employee or consultant to leave the Company's employ or sever an agreement for services; or (ii) solicit, participate in or promote the solicitation of any of the Company's clients, customers, or prospective customers with whom Consultant had a Material Contact (hereinafter defined) and/or regarding whom Consultant received Confidential Information, for the purpose of providing products or services ("Competitive Products/Services"). "Material Contact" means interaction between Consultant and the customer, client or prospective customer within one year prior to Consultant's separation of services from the Company that takes place to manage, service or further the business relationship. This limitation is not intended to limit the Company's right to prevent misappropriation of its Confidential Information beyond the non-solicitation period. Consultant and Company agree that if any court of competent jurisdiction shall for any reason conclude that any portion of this non-solicitation covenant shall be too restrictive, the court shall determine and apply lesser restrictions, it being the intent of the parties that some such restrictions shall be applicable for the protection of Company and its shareholders. 7. Property of Company. (i) Definition of Innovations. Consultant agrees to disclose in writing to the Company all inventions, products, designs, drawings, notes, documents, information, documentation, improvements, works of authorship, processes, techniques, know-how, algorithms, technical and business plans, specifications, hardware, circuits, computer languages, computer programs, databases, user interfaces, encoding techniques, and other materials or innovations of any kind that Consultant may make, conceive, develop or reduce to practice, alone or jointly with others, in connection with performing Services or that result from or that are related to such Services, whether or not they are eligible for patent, copyright, mask work, trade secret, trademark or other legal protection (collectively, "Innovations"). (ii) Ownership of Innovations. Consultant and the Company agree that, to the fullest extent legally possible, all Innovations will be works made for hire owned exclusively by the Company. Consultant agrees that, regardless of whether the Innovations are legally works made for hire, all Innovations will be the sole and exclusive property of the Company. Consultant hereby irrevocably transfers and assigns to the Company, and agrees to irrevocably transfer and assign to the Company, all right, title and interest in and to the Innovations, including all worldwide patent rights (including patent applications and disclosures), copyright rights, mask work rights, trade secret rights, know-how, and any and all other intellectual property or proprietary rights (collectively, "Intellectual Property Rights") therein. At the Company's request and expense, during and after the term of this Agreement, Consultant will assist and cooperate with the Company in all respects and will execute documents, and, subject to the reasonable availability of Consultant, give testimony and take such further acts reasonably requested by the Company to enable the Company to acquire, transfer, maintain, perfect and enforce its Intellectual Property Rights and other legal protections for the Innovations. Consultant hereby appoints the officers of the Company, as Consultant's attorney-in-fact to execute documents on behalf of Consultant for this limited purpose. Consultant's obligation to assist the Company shall continue beyond the termination of Consultant's relationship with the Company, but the Company shall compensate Consultant at a reasonable rate after the termination of such relationship for time actually spent at the Company's request providing such assistance. 5 + + + + + +8. Moral Rights. Consultant also hereby irrevocably transfers and assigns to the Company, and agrees to irrevocably transfer and assign to the Company, and waives and agrees never to assert, any and all Moral Rights (as defined below) that Consultant may have in or with respect to any Innovation, during and after the term of this Agreement. "Moral Rights" mean any rights to claim authorship of any Innovation, to object to or prevent the modification or destruction of any Innovation, to withdraw from circulation or control the publication or distribution of any Innovation, and any similar right, existing under judicial or statutory law of any country in the world, or under any treaty, regardless of whether or not such right is called or generally referred to as a "moral right". 9. No Rights Granted. Nothing in this Agreement will be construed as granting any rights under any patent, copyright or other intellectual property right of the Company, nor will this Agreement grant Consultant any rights in or to the Company's Confidential Information, except the limited right to use the Confidential Information as required in connection with performing the Services. 10. No Conflict. Consultant represents to the Company that Consultant can provide the Services to the Company without conflict with his obligations to any other party and covenants to the Company that, in performing the Services, he will not violate any obligations to any third party, including obligations concerning providing services to others and confidentiality of proprietary information. 11. General. (a) Governing Law. This Agreement will be governed by and construed in accordance with the laws of the State of California excluding that body of law pertaining to conflict of laws, except with respect to issues governed by the copyright laws of the United States. Any legal action or proceeding arising under this Agreement will be brought exclusively in the federal or state courts located in Los Angeles County, California, and the parties hereby irrevocably consent to the personal jurisdiction and venue therein. (b) Disagreements; Attorneys' Fees. The parties agree to attempt to resolve any disputes, controversies or claims ("Dispute") arising out of or relating to this Agreement in a meeting between a representative of each party who has decision-making authority with respect to a Dispute. Should the meeting either not take place or not result in a resolution of the Dispute within thirty (30) days following notice of the Dispute to the other party, then either party may bring suit or action in accordance with this Agreement. Each party hereto agrees that in the event that the other party is required to engage an attorney to enforce any of the terms or obligations contained in this Agreement, the non-prevailing party shall pay all reasonable costs and expenses of that attorney or firm, whether or not a complaint or suit is filed with any court of competent jurisdiction. 6 + + + + + +(c) Assignment. The services provided for in this Agreement, are of a personal nature and Consultant may not assign or transfer any of Consultant's rights or delegate any of Consultant's obligations under this Agreement, in whole or in part, without the Company's express prior written consent. Any attempted assignment, transfer or delegation, without such consent, will be void. Subject to the foregoing, this Agreement will be binding upon and will inure to the benefit of the parties permitted successors and assigns. (d) Complete Understanding; Modification. This Agreement constitutes the complete and exclusive understanding and agreement of the parties and supersedes all prior understandings and agreements, whether written or oral, with respect to the subject matter hereof. Any waiver, modification or amendment of any provision of this Agreement will be effective only if in writing and signed by the parties hereto. (e) Severability. If one or more provisions of this Agreement are held to be illegal or unenforceable, such illegal or unenforceable portion shall be limited or excluded from this Agreement to the minimum extent required under such jurisdiction so that this Agreement shall otherwise remain in full force and effect and enforceable. (f) Notices. All notices must be in writing and delivered to the other party's principal business address, by personal delivery, overnight courier service, email or by facsimile. Notices will be deemed given as of the date of receipt, which date shall be evidenced by the signature of an authorized representative of the receiving party or by written evidence of a successful transmission of an email or facsimile. (g) No Agency. Nothing in this Agreement shall be deemed or construed by the parties or any other entity to create an agency, partnership or joint venture between the parties. (h) Counterparts. This Agreement may be executed in counterparts, each of which will be deemed an original, and all of which together shall constitute one and the same instrument. (i) Survival. Sections 5, 6 and 11 shall survive termination of this Agreement. (j) Remedies and Enforcement. The parties acknowledge and agree that their remedy (ies) at law for a breach or threatened breach of any of the provisions of this Agreement would be inadequate, and the breach shall be per se deemed as causing irreparable harm to the non-breaching party. In recognition of this fact in the event of a breach or threatened breach of any of the provisions of this Agreement, the Parties agree that, in addition to any remedy at law available, including, but not limited to monetary damages, the Parties, without posting any bond, shall be entitled to obtain equitable relief in the form of specific performance, temporary restraining order, temporary or permanent injunction or any other equitable remedy which may then be available to the non-breaching Party. (k) Construction. This Agreement shall be construed within the fair meaning of each of its terms and not against the party drafting the document. REMAINDER OF PAGE LEFT INTENTIONALLY BLANK 7 + + + + + +IN WITNESS WHEREOF, the parties have entered into this Agreement as of the Effective Date. GIGGLES N' HUGS, INC. KIDDO, INC. By: /s/ Joey Parsi By: /s/ Michelle Steinberg Name: Joey Parsi Name: Michelle Steinberg Its: Chief Executive Officer Its: Vice-President 8 \ No newline at end of file diff --git a/full_contract_txt/GLOBALTECHNOLOGIESLTD_06_08_2020-EX-10.16-CONSULTING AGREEMENT.txt b/full_contract_txt/GLOBALTECHNOLOGIESLTD_06_08_2020-EX-10.16-CONSULTING AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..aa9d4f806b44c4a178771b4116e5fc11f66e0cb3 --- /dev/null +++ b/full_contract_txt/GLOBALTECHNOLOGIESLTD_06_08_2020-EX-10.16-CONSULTING AGREEMENT.txt @@ -0,0 +1,37 @@ +Exhibit 10.16 CONSULTING AGREEMENT This Consulting Agreement (the "Agreement") is made and entered into as of this 2nd day of January 2020, by and between Global Technologies, Ltd (hereinafter the "Company"), a Delaware corporation whose address is 501 1st Ave N., Suite 901, St. Petersburg, FL 33701 and Timothy Cabrera (hereinafter the "Consultant"), an individual whose address is 11718 SE Federal Hwy., Suite 372, Hobe Sound, FL 33455 (individually, a "Party"; collectively, the "Parties"). This Agreement is non-exclusive. RECITALS WHEREAS, the Company has asked to retain Consultant to provide various services to the Company as agreed to by both parties and outlined in Section 3; and WHEREAS, the Consultant has advised the Company of its willingness and desire to provide such services as outlined in Section 3 and on the terms and conditions set forth in this Agreement. NOW, THEREFORE, in consideration of the mutual promises herein contained, the Parties hereto hereby agree as follows: 1. CONDITIONS. This Agreement will not take effect, and Consultant will have no obligation to provide any service whatsoever, unless and until the Company sends a signed copy of this Agreement to Consultant (either by mail or facsimile copy). The Company shall be truthful with Consultant in regard to any relevant material regarding the Company, verbally or otherwise, or this entire Agreement will terminate and all consideration paid shall be forfeited without further notice. Upon execution of this Agreement, the Company agrees to cooperate with Consultant in carrying out the purposes of this Agreement, keep Consultant informed of any developments of importance pertaining to the Company's business and abide by this Agreement in its entirety. 2. TERM OF AGREEMENT. This Agreement shall be in full force and effect commencing on January 2, 2020 and shall remain in effect for one (1) year or until Consultant completes the services requested. Either Party shall have the right to terminate this Agreement without notice in the event of the bankruptcy, insolvency, or assignment for the benefit of creditors of the other Party. Either Party shall have the right to terminate this Agreement with notice, and the effective date of termination shall be the date such notice is received (by mail, overnight delivery, or fax) by the terminated Party. 3. CONSULTING SERVICES. During the term of this Agreement, Consultant will perform the services described below (the "Consulting Services") for the Company. (a) Transactional Business (i) Further development of the business plan for the Company's subsidiaries; and 1 ____ ____ + + + + + +(ii) Seek and advise the Company on the acquisition of potential products for the Company's subsidiaries; and (iii) Assist in negotiating acquisition or merger consideration as required by the Company; and (iv) Setting up meetings between the Company and acquisition candidates and arranging other liaisons between them; and (v) Assist the Company with certain day to day tasks of managing the Company's subsidiaries; and (vi) Assist in the sale of any inventory held by any of the Company's subsidiaries; and (vii) Assist in the sale of any future products acquired, licensed or developed by the Company and or its subsidiaries. 4. STANDARD OF PERFORMANCE. Consultant shall devote such time and efforts to the affairs of the Company as is reasonably necessary to render the services contemplated by this Agreement. Consultant is not responsible for the performance of any services that may be rendered hereunder if the Company fails to provide the requested information in writing prior thereto. The services of Consultant shall not include the rendering of any legal opinions or the performance of any work that is in the ordinary purview of a certified public accountant. Consultant cannot guarantee results on behalf of the Company but shall use commercially reasonable efforts in providing the services listed above. Consultant's duty is to identify prospective acquisition/joint venture companies for the Company. Consultant will in no way act as a "broker-dealer" under state securities laws. Because all final decisions pertaining to any particular investment are to be made by the Company, the Company may be required to communicate directly with potential acquisition/joint venture prospective companies. 5. COMPENSATION TO CONSULTANT. As Consultant's entire compensation for its performance under this agreement, the Company shall pay Consultant $250,000,00 cash compensation. In addition, the Consultant shall earn additional cash compensation for the sale of any inventory/assets that were acquired in the acquisition of TCBM Holdings, LLC on November 30, 2019. Any cash compensation paid to Consultant shall be treated as a reduction in principal to the Convertible Note ("Note") issued by the Company to Jetco Holdings, LLC ("Jetco") on November 30, 2019. For example: The $250,000 cash compensation paid to Consultant shall reduce the Jetco Note principal amount by $250,000. In the event the Consultant were to sale $100,000 of inventory held by the Company, the payout of $100,000 to Consultant will reduce the principal on the Jetco Note by $100,000. Additional compensation to the Consultant for future products sold by the Company, or revenue earned by the Company for services provided will be negotiated by the Company and Consultant at the time of potential revenue recognition. The Consultant will be solely responsible for all tax returns and payments required to be filed with or made to any federal, state or local tax authority with respect to the Consultant's performance of services and receipt of fees under this Agreement. The Company will regularly report amounts paid, if any, to the Consultant by filing Form 1099-MISC and/or other appropriate form with the Internal Revenue Service as required by law. Because the Consultant is an independent contractor, the Company will not withhold or make payments for social security; make consulting contract insurance or disability insurance contributions; or obtain worker's compensation insurance on the Consultant's behalf. The Consultant agrees to accept exclusive liability for complying with all applicable state and federal laws governing self-employed individuals, including obligations such as payment of taxes, social security, disability and other contributions based on fees paid to the Consultant under this Agreement. The Consultant hereby agrees to indemnify and defend the Company against any and all such taxes or contributions, including penalties and interest. 2 ____ ____ + + + + + +6. CONFIDENTIAL INFORMATION. The Consultant and the Company acknowledge that each will have access to proprietary information regarding the business operations of the other and agree to keep all such information secret and confidential and not to use or disclose any such information to any individual or organization without the non-disclosing Parties prior written consent. It is hereby agreed that from time to time Consultant and the Company may designate certain disclosed information as confidential for purposes of this Agreement. 7. INDEMNIFICATION. Each Party (the "Indemnifying Party") agrees to indemnify, defend, and hold harmless the other Party (the "Indemnified Party") from and against any and all claims, damages, and liabilities, including any and all expense and costs, legal or otherwise, caused by the negligent act or omission of the Indemnifying Party, its subcontractors, agents, or employees, incurred by the Indemnified Party in the investigation and defense of any claim, demand, or action arising out of the work performed under this Agreement; including breach of the Indemnifying Party of this Agreement. The Indemnifying Party shall not be liable for any claims, damages, or liabilities caused by the sole negligence of the Indemnified Party, its subcontractors, agents, or employees. The Indemnified Party shall notify promptly the Indemnifying Party of the existence of any claim, demand, or other matter to which the Indemnifying Party's indemnification obligations would apply, and shall give them a reasonable opportunity to settle or defend the same at their own expense and with counsel of their own selection, provided that the Indemnified Party shall at all times also have the right to fully participate in the defense. If the Indemnifying Party, within a reasonable time after this notice, fails to take appropriate steps to settle or defend the claim, demand, or the matter, the Indemnified Party shall, upon written notice, have the right, but not the obligation, to undertake such settlement or defense and to compromise or settle the claim, demand, or other matter on behalf, for the account, and at the risk, of the Indemnifying Party. The rights and obligations of the Parties under this Article shall be binding upon and inure to the benefit of any successors, assigns, and heirs of the Parties. 8. COVENANTS OF CONSULTANT. Consultant covenants and agrees with the Company that, in performing Consulting Services under this Agreement, Consultant will: (a) Comply with all federal and state laws; (b) Not make any representations other than those authorized by the Company; and (c) Not publish, circulate or otherwise use any materials or documents other than materials provided by or otherwise approved by the Company. 3 ____ ____ + + + + + +9. COVENANTS OF THE COMPANY. The Company covenants, represents and warrants to Consultant as follows: (a) Authorization. The Company and its signatories herein have full power and authority to enter into this Agreement and to carry out the transactions contemplated hereby. (b) No Violation. Neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby will violate any provision of the charter or by-laws of the Company or violate any terms of provision of any other material agreement to which the Company is a party or any applicable statute or law. (c) Contracts in Full Force and Effect. All contracts, agreements, plans, policies and licenses to which the Company is a party are valid and in full force and effect. (d) Consents. No consent of any person, other than the signatories hereto, is necessary to the consummation of the transactions contemplated hereby, including, without limitation, consents from parties to loans, contracts, lease or other agreements and consents from governmental agencies, whether federal, state, or local. (e) Consultant Reliance. Consultant has and will rely upon the documents, instruments and written information furnished to Consultant by the Company's officers or designated employees. (f) Company's Material. All representations and statements provided herein about the Company are true and complete and accurate. The Company agrees to indemnify, hold harmless, and defend Consultant, its officers, directors, agents and employees, at the Company's expense for any proceeding or suit which may rise out of any inaccuracy or incompleteness of any such material or written information supplied to Consultant. 10. MISCELLANEOUS PROVISIONS (a) Amendment and Modification. This Agreement may be amended, modified and supplemented only by written agreement of the Company and Consultant. (b) Waiver of Compliance. Any failure of Consultant, on the one hand, or the Company, on the other, to comply with any obligation, agreement, or condition herein may be expressly waived in writing, but such waiver or failure to insist upon strict compliance with such obligation, covenant, agreement or condition shall not operate as a waiver of, or estoppel with respect to, any subsequent or other failure. (c) Expenses, Transfer Taxes, Etc. Other than as expressly set forth in this Agreement, the Parties shall bear their own costs and expenses in carrying out the provisions of this Agreement. (d) Compliance with Regulatory Agencies. Each Party agrees that all actions, direct or indirect, taken by it and its respective agents, employees and affiliates in connection with this Agreement and any financing or underwriting hereunder shall conform to all applicable Federal and State securities laws. (e) Notices. Any notices to be given hereunder by any Party to the other may be effected either by personal delivery in writing, by a reputable, national overnight delivery service, by facsimile transmission or by mail, registered or certified, postage prepaid with return receipt requested. Notices shall be addressed to the "Contact Person" at the addresses appearing on the signature page of this Agreement, but any Party may change his address or "Contact Person" by written notice in accordance with this subsection. Notices delivered personally shall be deemed delivered as of actual receipt, notices sent by facsimile shall be deemed delivered one (1) day after electronic confirmation of receipt, notices sent by overnight delivery service shall be deemed delivered one (1) day after delivery to the service, mailed notices shall be deemed delivered as of five (5) days after mailing. 4 ____ ____ + + + + + +(f) Assignment. This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and permitted assigns. (g) Delegation. Neither Party shall delegate the performance of its duties under this Agreement without the prior written consent of the other Party. (h) Publicity. Neither Consultant nor the Company shall make or issue or cause to be made or issued, any announcement or written statement concerning this Agreement, or the transactions contemplated hereby for dissemination to the general public without the prior consent of the other Party. This provision shall not apply, however, to any announcement or written statement required to be made by law or the regulations of any Federal or State governmental agency, except that the Party required to disclose shall consult with and make reasonable efforts to accommodate changes to the required disclosure and the timing of such announcement suggested by the other Party. (i) Arbitration and Governing Law. If a dispute arises out of or relates to this contract, or the breach thereof, and if the dispute cannot be settled through negotiation, the parties agree first to try in good faith to settle the dispute by mediation administered by the American Arbitration Association under its Commercial Mediation Procedures before resorting to arbitration, litigation, or some other dispute resolution procedure. If they do not reach such solution within a period of 60 days, then, upon notice by either party to the other, all disputes, claims, questions, or differences shall be finally settled by arbitration administered by the American Arbitration Association in accordance with the provisions of its Commercial Arbitration Rules. This Agreement and the legal relations among the Parties hereto shall be governed by and construed in accordance with the laws of the State of Florida, without regard to its conflict of law doctrine. The Parties agree that the venue for the resolution of all disputes arising under the terms of this Agreement and the transactions contemplated herein will be the County of Pinellas, State of Florida. (j) Counterparts. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. (k) Headings. The heading of the sections of this Agreement are inserted for convenience only and shall not constitute a part hereto or affect in any way the meaning or interpretation of this Agreement. (l) Entire Agreement. This Agreement including any Exhibits hereto, and the other documents and certificates delivered pursuant to the terms hereto, set forth the entire agreement and understanding of the Parties hereto in respect of the subject matter contained herein, and supersedes all prior agreements, promise, covenants, arrangements, communications, representations or warranties, whether oral or written, by any officers employee or representative of any Party hereto. 5 ____ ____ + + + + + +(m) Third Parties. Except as specifically set forth or referred to herein, nothing herein express or implied is intended or shall be construed to confer upon or give to any person or entity other than the Parties hereto and their successors or assigns, any rights or remedies under or by reason of this Agreement. (n) Attorneys' Fees and Costs. If any action is necessary to enforce and collect upon the terms of this Agreement, the prevailing Party shall be entitled to reasonable attorneys' fees and costs, in addition to any other relief to which that Party may be entitled. This provision shall be construed as applicable to the entire Agreement. (o) Survivability. If any part of this Agreement is found or deemed by a court of competent jurisdiction to be invalid or unenforceable, that part shall be severable from the remainder of the Agreement. (p) Further Assurances. Each of the Parties agrees that it shall from time-to-time take such actions and execute such additional instruments as may be reasonably necessary or convenient to implement and carry out the intent and purposes of this Agreement. (q) Relationship of the Parties. Nothing contained in this Agreement shall be deemed to constitute either Party becoming the partner of the other, the agent or legal representative of the other, nor create any fiduciary relationship between them, except as otherwise expressly provided herein. It is not the intention of the Parties to create nor shall this Agreement be construed to create any commercial relationship or other partnership. Neither Party shall have any authority to act for or to assume any obligation or responsibility on behalf of the other Party, except as otherwise expressly provided herein. The rights, duties, obligations and liabilities of the Parties shall be separate, not joint or collective. Each Party shall be responsible only for its obligations as herein set out and shall be liable only for its share of the costs and expenses as provided herein. (r) No Authority to Obligate the Company. Without the consent of the Board of Directors of the Company, Consultant shall have no authority to take, nor shall it take, any action committing or obligating the Company in any manner, and it shall not represent itself to others as having such authority. 11. Non-Circumvention. In and for valuable consideration, the Company hereby agrees that Consultant may introduce (whether by written, oral, data, or other form of communication) the Company to one or more opportunities, including, without limitation, existing or potential investors, lenders, borrowers, trusts, natural persons, corporations, limited liability companies, partnerships, unincorporated businesses, sole proprietorships and similar entities (an "Opportunity" or "Opportunities"). The Company further acknowledges and agrees that the identity of the subject Opportunities, and all other information concerning an Opportunity (including without limitation, all mailing information, phone and fax numbers, email addresses and other contact information) introduced hereunder are the property of Consultant, and shall be treated as confidential information by the Company, it affiliates, officers, directors, shareholders, employees, agents, representatives, successors and assigns. The Company shall not use such information, except in the context of any arrangement with Consultant in which Consultant is directly and actively involved, and never without Consultant's prior written approval. The Company further agrees that neither it nor its employees, affiliates or assigns, shall enter into, or otherwise arrange (either for it/him/herself, or any other person or entity) any business relationship, contact any person regarding such Opportunity, either directly or indirectly, or any of its affiliates, or accept any compensation or advantage in relation to such Opportunity except as directly though Consultant, without the prior written approval of Consultant. Consultant is relying on the Company's assent to these terms and their intent to be bound by the terms by evidence of their signature. Without the Company's signed assent to these terms, Consultant would not introduce any Opportunity or disclose any confidential information to the Company as herein described. 6 ____ ____ + + + + + +IN WITNESS, WHEREOF, the Parties hereto have caused this Agreement to be duly executed, all as of the day and year first above written. COMPANY: CONSULTANT: GLOBAL TECHNOLOGIES, LTD TIMOTHY CABRERA By: By: Jimmy Wayne Anderson Timothy Cabrera Its: Chairman and CEO Its: Individual capacity Date: January 2, 2020 Dated: January 2, 2020 7 ____ ____ \ No newline at end of file diff --git a/full_contract_txt/GOCALLINC_03_30_2000-EX-10.7-Promotion Agreement.txt b/full_contract_txt/GOCALLINC_03_30_2000-EX-10.7-Promotion Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..13ecdf777a1e8e582147f3b42112fda4892ee4a1 --- /dev/null +++ b/full_contract_txt/GOCALLINC_03_30_2000-EX-10.7-Promotion Agreement.txt @@ -0,0 +1,149 @@ +Promotion Agreement Between PageMaster Corporation and Go Call, Inc. + + AGREEMENT --------- + + This Promotion Agreement (herein "Agreement") dated March 12,1999, by and between Go Call, Inc. (herein "Go Call") located at 15 Queen Street East, Cambridge Ontario, Canada N3C2A7 and PageMaster Corporation located at 100 E. Thousand Oaks Blvd. Suite 297, Thousand Oaks, CA 91360, shall set forth the Terms and conditions pursuant to which Go Call and PageMaster Corporation shall create a promotion as more fully described below. + + WHEREAS, Go Call seeks to increase its sales and website activity; and WHEREAS. PageMaster Corporation seeks to promote the contracting of paging service to clients; NOW THEREFORE, Go Call and PageMaster Corporation in consideration of the mutual obligations set forth herein and other good and valuable consideration, the receipt and sufficiency of which the parties acknowledge, hereby agree as follows: + +1. Description of the Promotion ---------------------------- + + PageMaster Corporation in conjunction with Go Call, shall offer free new Motorola "Wordline Alphanumeric" (or equal) pagers with no activation fee to all customers responding to this promotion who purchase twelve (12) months of numeric paging and airtime products and services from PageMaster Corporation ("Purchase Customers"). + +2. Consumer Cost Description ------------------------- + + Each Purchase Customer will be required to purchase twelve months of local numeric airtime at a rate of $10.33 per month through a designated nationwide airtime provider, prepaid in advance. The purchased airtime shall be non-refundable to the consumer. Additionally, Purchase Customers will be required to pay for shipping and handling costs and applicable sales taxes based on their locations. + +3. Term ---- + + This promotion shall begin on June 1,1999 and shall terminate June 1, 2000 (herein "Term") This term shall be extended for a 1 year period provided 3000 pagers per month are distributed to Purchase customers. + +4. Responsibilities of PageMaster Corporation ------------------------------------------ + + PageMaster Corporation shall be responsible for providing the following: + + a. For Purchase Customers to participate in the promotion, PageMaster Corporation shall establish and maintain a toll-free telephone number for this promotion beginning June 1,1999 and continuing until September 1, 2000 unless otherwise requested by Go Call and agreed upon by PageMaster Corporation. + + b. PageMaster Corporation shall provide a minimum of 100,000 up to 500,000 pagers for the fulfillment of this promotion to all Purchase Customers who prepay their annual airtime. + + c. PageMaster Corporation shall be responsible for all fulfillment obligations of this promotion relating to paging services, including, but not limited to, timely delivery of pagers, paging services, defective goods handling, subcontracting, deadlines, and handling of consumer and regulatory inquiries and complaints. + + d. PageMaster Corporation will contract with a nationwide airtime service provider to fulfill and to ship Purchasing Customer orders direct to the Purchase Customers to fulfill this promotion in a timely manner. PageMaster Corporation has chosen for the purpose of this promotion, MetroCall Inc. to provide pager and airtime services where the nationwide airtime service provider has the facilities and the requisite governmental authority to provide such services. All Purchase Customers shall become customers of the nationwide airtime service provider. The nationwide airtime service provider shall be allowed to market additional pagers arid enhanced services to all Purchase Customers, and to charge for over-calls with respect to any account with a Purchase Customer. The nationwide airtime service provider shall be able to discontinue or terminate service to any Purchase Customer in accordance with the terms of the contract between the nationwide airtime service provider and the Purchase Customer. Notwithstanding the foregoing, PageMaster Corporation shall remain solely responsible for the fulfillment of all services and obligations set forth in this Agreement. + + e. PageMaster Corporation shall not engage in the same or similar promotion with any other On-Line Casinos from June 1, 1999 through June 1, 2000. + + + + + + f. PageMaster Corporation will provide at no charge programming software that will allow Go Call to broadcast any and all messages of 125 characters or less to all Go Call consumers who have redeemed pagers on this promotion. + +5. Responsibilities of Go Call --------------------------- + + a. Go Call shall prepare and distribute at its own expense, all advertising materials to be used for this promotion. + + b. Go Call, shall submit in advance, all artwork and advertising to PageMaster Corporation for approval as provided in Paragraph 8. + + c. Go Call shall not engage in the same or similar promotions during the Term of this Agreement with any other entity providing paging services, equipment or other related products and services. + +6. Payment Made As Deposit On Pagers --------------------------------- + + Upon the execution of this Agreement, Go Call shall forward to PageMaster Corporation a deposit in the sum of $100,000.00 to secure the availability of 100,000 pagers to all Purchase Customers who prepay their annual airtime for this promotion. The deposit is non-refundable except as follows: + + a. PageMaster Corporation shall refund to Go Call, $1.00 per pager on all pagers delivered to Purchase Customers pursuant to this promotion (net return) up to the maximum refund of $100,000.00. + + b. On the last day of each month, the refund of Go Call's portion of the deposit shall be calculated by PageMaster Corporation for the &bbsp; prior month and will be forwarded to Go Call by check, along with an extended accounting of all pagers and customers until September 1, 2000, unless otherwise instructed by Go Call. Go Call, upon ten (10) days written notice, shall have the right to examine the books and records of PageMaster Corporation to verify the sales resulting from this promotion. Such examination shall be made at the regular place of business of PageMaster Corporation where such books and records are maintained during normal business hours and shall be conducted at Go Call's expense by a certified public accountant or other Go Call executive so designated by Go Call. + +7. Co-Op Marketing Funds --------------------- + + PageMaster Corporation shall pay to Go Call, Co-Op Marketing funds for the promotion. PageMaster Corporation will pay Go Call $3.00 per pager (beginning with pager # 1) and 5% of all airtime renewal revenue for each pager redeemed for this promotion consistent with the terms of paragraph 6b of this Agreement. + +8. Representation and Warranties ----------------------------- + + PageMaster Corporation warrants and represents that it has a license to advertise and use the trademarks, logos, etc. of Motorola, Inc., PageMaster Promotions and such other third parties as may be necessary to advertise this promotion. At least sixty (60) days prior to the commencement of the promotion, PageMaster Corporation in its sole discretion shall have the unconditional right to approve the accuracy of the description of the pager promotion and use of corporate logos and photographs and descriptions of products and services provided by designated airtime carriers or any third parties participating in the promotion; in the event of disapproval, Go Call shall not proceed with the promotion until the revised artwork or presentation is subsequently approved by PageMaster Corporation in writing. Upon termination or expiration of this Agreement, Go Call agrees not to use or advertise any trademarks, logos or other property rights of PageMaster Corporation or any third parties participating in the promotion. Any advertising, artwork, presentation, or other promotional activities (collectively "Advertising") concerning the pager Promotion not pre-approved in writing by PageMaster Corporation shall be deemed to be unauthorized by PageMaster Corporation and shall constitute a breach of this Agreement. In addition to the duty to indemnify PageMaster Corporation as provided in Paragraph 9 hereof, Go Call shall also have the duty to indemnify Motorola, Inc. or any affiliated entity from and against any and all claims, expense, suits or demands arising from such unauthorized Advertising by Go Call, or its agent, affiliate, licensee, franchisee or any other third party. + +9. Indemnity --------- + + Each party shall indemnify and hold harmless the other from any loss or damages, including reasonable attorneys' fees incurred by the other because of claims, suits or demands based on personal injury, death or property damage or third party claims, suits or demands of any kind to the extent such loss or damage is caused by or results from the negligent or willful acts or omissions of the other or its employees or agents, including but not limited to the unauthorized use of the trademark, logos, or other property of third parties without the consent and approval of PageMaster Corporation. PageMaster Corporation's participation in the promotion does not constitute an endorsement of the products or services of Go Call nor does Go Call's participation in the promotion constitute an endorsement of PageMaster Corporations or any third party's products or services. + + + + + +10. Force Majeure ------------- + + Neither party will be responsible for any delay or failure in performance of any part of&bbsp;this Agreement to the extent that such delay or failure is caused by any event beyond its control, which may include, but not be limited to, fire, flood, explosion, war, strike, embargo, government requirement, civil or military authority, and acts of God ("Conditions"). If any such Condition occurs, the party delayed or unable to perform shall promptly give notice to the other party and, if such Condition remains at the end of thirty (30) days thereafter, the party affected by the other party's delay or inability to perform may elect to terminate or suspend this Agreement or part thereof, and resume performance of this Agreement once the Condition ceases, with an option for the affected party to extend the period of this Agreement up to the length of time the Condition endured. PageMaster Corporation make no warranties, either express or implied, concerning the pagers or the transmission of pages by the airtime service provider, including warranties of merchantability or fitness for particular purpose. The parties agree that + +PageMaster Corporation shall not be liable for service interruptions in the telecommunications industry, capacity constraints or related problems, or for any act or omission of any other entity furnishing products or services to PageMaster Corporation. PageMaster Corporations' liability shall in no event exceed an amount equivalent to the amounts received by PageMaster Corporation hereunder. + +11. Choice Of Law ------------- + + This Agreement will be governed by and construed in accordance with the laws of the State of California, exclusive of conflicts of law principles, and will, to the maximum extent practicable, be deemed to call for performance in Los Angeles County, California. Los Angeles County, California shall be the sole and exclusive venue for any litigation or dispute resolution relating to or arising out of the Agreement. To seek or receive indemnification hereunder (i) the party seeking indemnification must have properly notified the other party of any claim or litigation of which it is aware to which the indemnification relates; and the party seeking indemnification must have afforded the other the opportunity to participate in any compromise, settlement, litigation or other resolution or disposition of such claim or litigation. + +12. Dispute Resolution ------------------ + + a. The parties desire to resolve disputes arising out of this Agreement without litigation. Accordingly, except for an action seeking a temporary restraining order or injunction related to the purposes of this Agreement, or a suit to compel compliance with this dispute resolution process, the parties agree to use the following alternative dispute resolution procedure as their sole remedy with respect to any controversy or claim arising out of or relating to this Agreement or its breach. + + b. At the written request of a party, each party shall appoint a knowledgeable, responsible representative to meet and negotiate in good faith to resolve any dispute arising under this Agreement. The parties intend that these negotiations be conducted by non-lawyer, business representatives. The discussions shall be left to the discretion of the representatives. Upon agreement, the representatives may utilize other alternative dispute resolution procedures such as mediation to assist in the negotiations. Discussions and correspondence among the representatives for purposes of these negotiations shall be treated as confidential information developed for purposes of settlement, exempt from discovery and production, which shall not be admissible in the arbitration described below or in any lawsuit without the concurrence of all parties. Documents identified in or provided with such communications, which are not prepared for purposes of the negotiations, are not so exempted and may, if otherwise admissible, be admitted in evidence in the arbitration or lawsuit. + + c. If the negotiations do not resolve the dispute within sixty (60) days of the initial written request, the dispute shall be submitted to binding arbitration by a single arbitrator pursuant to the Commercial Arbitration Rules of the American Arbitration Association. A party may demand such arbitration in accordance with the procedures set out in those rules. Discovery shall be controlled by the arbitrator and shall be permitted to the extent set out in this Section. Each party may submit in writing to a party, and that party shall so respond, to a maximum of any combination of thirty-five (35) (none of which may have subparts) of the following: interrogatories, demands to produce documents and requests for admission. Each party is also entitled to take the oral deposition of one (1) individual of another party. Additional discovery may be permitted upon mutual agreement of the parties. The arbitration hearing shall be commenced within sixty (60) days of the demand for arbitration and the arbitration shall be held in Los Angeles, CA. The arbitrator shall control the scheduling so as to process the matter expeditiously. The + + parties may submit written briefs. The arbitrator shall rule on + + + + + + the dispute by issuing a written opinion within thirty (30) days after the close of hearings. The times specified in this paragraph may be extended upon mutual agreement of the parties or by the arbitrator upon a showing of good cause. Judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction. + + d. Each party shall bear its own cost of these procedures. A party seeking discovery shall reimburse the responding party the cost of production of the documents (to include search time and reproduction time costs). The parties shall equally share the fees of the arbitration and the arbitrator. + +13. Notices ------- + + Any notice or demand given to either party under the Terms of this Agreement or pursuant to statute shall be in writing and shall be given or made by telegram, facsimile transmission, certified or registered mail, express mail or other overnight delivery service or hand delivery, proper postage or other charges prepaid and addressed or directed to the respective parties as follows: + +PAGEMASTER CORPORATION 100 E. Thousand Oaks Blvd. Suite 297 Thousand Oaks, CA 91360 ATTN: Marc Resnick, CEO + +GO CALL, INC. 15 Queen Street East Cambridge Ontario, Canada N3C2A7 ATTN: Ian Smith, President + + Such notice or demand shall be deemed to have been given or made when actually received or seventy-two (72) hours after being sent, whichever occurs first. The address for notice set out above may be changed at any time by giving thirty (30) days prior written notice in the manner above. + +14. Agreement Expiration -------------------- + + Unless this Agreement is signed by an authorized representative of Go Call and a signed copy delivered in person by mail or facsimile and personally received by an authorized representative of PageMaster Corporation by 12:01 p.m. PST, on or before March 26, 1999, this Agreement shall be deemed terminated and shall be of no further force or effect and the parties shall have no liability to one another. At PageMaster Corporation's option, an additional agreement(s) may be prepared to further negotiate this or similar promotions with Go Call. + +15. Entire Agreement ---------------- + + This Agreement represents the entire agreement and understanding of the parties hereto with respect to its subject matter hereof, and supersedes all previous representations, understandings or agreements between the parties hereto. No waiver, modification or cancellation of any term or condition of this Agreement shall be effective unless executed in writing by the party charged therewith. + +16. Nonwaiver --------- + + Either parties failure to enforce any of the provisions of this Agreement shall in no way be deemed to affect the validity of this Agreement. + +17. Counterparts ------------ + + This Agreement may be executed in duplicate counterparts, all of which together shall constitute a single instrument, and each of which shall be deemed an original of this Agreement for all purposes. + +18. Successors and Assigns ---------------------- + + This Agreement shall be binding upon, and shall inure to the benefit of the successors, heirs, administrators, trustees and assigns of the parties. + +19. Confidentiality --------------- + + The parties acknowledge that preparation for and execution of the promotion necessitates the exchange of confidential and proprietary information relating and belonging to the parties to this Agreement, as well as to other third parties integral to the promotion, including, without limitation, the pager manufacturer and the airtime supplier (herein "Information"). Each party agrees (1) to review, examine, inspect, obtain or utilize the information only for the purpose of this promotion, (2) to otherwise hold such Information strictly confidential, (3) to prevent the disclosure of such Information to nonessential third parties without a "need to know", and (4) to insure that each party's employees, agents and representatives and those of any integral third party understand and are bound by the confidentiality obligations of this Agreement. Each party shall indemnify the other party with respect to any loss or damage arising from the unauthorized disclosure or use of the Information by their respective employees, agents and representatives, or by those of any third + + + + + +party to whom such Information was disclosed. The agreements contained in this Paragraph shall survive the expiration, or termination of this Agreement. The panics hereby agree that subsequent to the expiration or termination of this Agreement, each party consents to the other party's use of its name only in connection with advertising to their respective trade or industry. + + IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date set forth below. + + GO CALL, Inc. + + Dated: 3/13/99 By: /s/ Michael Ruge ------------------- &sbsp; ---------------------------- Michael Ruge + + PAGEMASTER CORPORATION + + Dated: 3/13/99 By: /s/ Marc B. Resnick ------------------- ---------------------------- Marc B. Resnick CE0 \ No newline at end of file diff --git a/full_contract_txt/GOLDRESOURCECORP_12_11_2008-EX-10.1-STRATEGIC ALLIANCE AGREEMENT.txt b/full_contract_txt/GOLDRESOURCECORP_12_11_2008-EX-10.1-STRATEGIC ALLIANCE AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..175b05262aaa30f123d0b8dad0c7897f7e876cc9 --- /dev/null +++ b/full_contract_txt/GOLDRESOURCECORP_12_11_2008-EX-10.1-STRATEGIC ALLIANCE AGREEMENT.txt @@ -0,0 +1,455 @@ +Exhibit 10.1 + +STRATEGIC ALLIANCE AGREEMENT + +THIS AGREEMENT dated for reference the 5th day of December 2008. + +BETWEEN: + + GOLD RESOURCE CORPORATION, a company organized under the laws of the State of Colorado, with registered office located at 222 Milwaukee Street, Suite 301, Denver, CO 80206 ("GRC" or "the Company") + +AND: + + HOCHSCHILD MINING HOLDINGS LIMITED, a private limited company organized under the laws of England and Wales, with registered office located at 46 Albemarle Street, London, England W1S 4JL ("HOC") + +WHEREAS: + +A. The Company is a mineral exploration and development company engaged in the acquisition and exploration, as well as development of mineral properties (the "Properties") in Mexico through its Mexican subsidiaries with prospects for hosting gold, silver and base metal deposits, and through such subsidiaries holds interests in several mineral resource properties, including but not limited to (i) El Aguila, (ii) Las Margaritas, (iii) Solaga, and (iv) El Rey located in Oaxaca, Mexico (the "Existing Properties"); + +B. HOC is an Affiliate of Hochschild Mining plc., a leading underground precious metals producer operating in the Americas with a primary focus on silver and gold; + +C. The Company and HOC believe that their respective corporate strategies are compatible and, as such, wish to establish a strategic alliance on the terms and conditions set forth herein; + +D. The Company and HOC are entering into this Agreement as a condition to and in furtherance of the investment in Shares (as defined below) contemplated in the Subscription Agreement dated December 5, 2008 (the "Subscription Agreement") between the Company and HOC without the Company having executed and delivered this Agreement; and + +E. The Board of Directors has authorized the Company to enter into this Agreement. + +NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the mutual premises, covenants and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by both parties, the parties hereby covenant and agree as follows: + +ARTICLE 1 + +INTERPRETATION + +1.1 Definitions. In this Agreement, unless the context otherwise requires: + + + + + + (a) "Acceptance Notice" has the meaning ascribed to it in Section 4.1(e); + + (b) "Additional Securities" has the meaning ascribed to it in Section 4.1(a); + + (c) "Additional Shares" has the meaning ascribed to it in Section 2.1; + + (d) "Affiliate" shall have the meaning ascribed thereto in the Securities Act; + + (e) "Agreement" means this strategic alliance agreement and any instrument amending this Agreement and "hereof", "hereto", "hereunder" and similar expressions mean and refer to this Agreement and not to a particular Article, Section, Subsection or Paragraph; + + (f) "Alternative Proposal" has the meaning ascribed to it in Section 9.1; + + (g) "Authority" and "Authorities" means any (i) multinational, federal, provincial, state, regional, municipal, local or other government, governmental or public department, securities commission (including the Securities Commissions), central bank, court, tribunal, arbitral body, commission, board, bureau or agency, domestic or foreign, (ii) any subdivision, agent, commission, board, or authority of any of the foregoing, or (iii) any quasi-governmental or private body exercising any regulatory, expropriation or taxing authority under or for the account of any of the foregoing, and includes a stock exchange and any other self-regulatory authority; + + (h) "Board of Directors" means the board of directors of the Company; + + (i) "Business Day" means any day which is not a Saturday, a Sunday or a day on which banks are generally closed for business in Denver, Colorado or London, England; + + (j) "Claims" means all losses, damages, expenses, Liabilities, claims and demands of whatever nature or kind, including all reasonable legal fees and disbursements; + + (k) "Closing Date" has the meaning given to it in the Subscription Agreement; + + (l) "Commencement of Production" has the meaning given to it in Section 2.3; + + (m) "Common Stock" has the meaning given to it in Section 4.1(a); + + (n) "Company" has the meaning given to it in the preamble hereto; + + (o) "Company Indemnitees" has the meaning given to it in Section 11.2; + + (p) "Convertible Securities" means all warrants, rights, agreements, options, or Debt Instruments present or future, contingent or absolute, or any right or privilege capable of becoming a right, agreement or option, for the purchase, subscription or issuance of any Shares in the Company or any other security or Debt Instruments convertible or exchangeable for Shares, including options granted to officers, directors or employees, and whether issued pursuant to the Stock Option Plan; + +2 + + + + + + (q) "Debt Instrument" means any loan, bond, debenture, promissory note or other instrument evidencing material indebtedness of the Company for borrowed money or other material liability; + + (r) "Equity Securities" means Shares, Convertible Securities and any other equity or voting securities of the Company; + + (s) "Existing Properties" has the meaning given to it in the preamble hereto; + + (t) "Financing Election" has the meaning ascribed to it in Section 2.3; + + (u) "HOC Director" has the meaning ascribed to it in Section 5.1; + + (v) "HOC Entities" means HOC and its Affiliates, and any person acting jointly or in concert with any of them, excluding, for greater certainty, the Company and any of its Subsidiaries to the extent they may be or become Affiliates at any relevant point in time; + + (w) "HOC Indemnitees" has the meaning ascribed to it in Section 11.1; + + (x) "HOC JV Acceptance Notice" has the meaning ascribed to it in Section 6.2(b); + + (y) "HOC Option" has the meaning ascribed to it in Section 2.1; + + (z) "Joint Venture Proposal Notice" has the meaning ascribed to it in Section 6.2(a); + + (aa) "JV Negotiation Period" has the meaning ascribed to it in Section 6.2(b); + + (bb) "Laws" means any and all applicable (i) laws, constitutions, treaties, statutes, codes, ordinances, orders, decrees, rules, regulations and municipal by-laws, (ii) judicial, arbitral, administrative, ministerial, departmental or regulatory judgments or orders of any Authorities, and (iii) policies, guidelines and protocols; + + (cc) "Liabilities" means, with respect to any Person, any liability or obligation of such Person of any kind, character or description, whether known or unknown, absolute or contingent, accrued or unaccrued, disputed or undisputed, liquidated or unliquidated, secured or unsecured, joint or several, due or to become due; + + (dd) "Lien" means any mortgage, easement, encroachment, adverse claim, and assignment by way of security, security interest, servitude, pledge, charge, lien, assignment, hypothecation, conditional sale agreement, title retention, preferential right, trust arrangement, right of set-off, counterclaim or banker's lien, financing statement, privilege or priority, or other encumbrance of any kind having the effect of security, any designation of loss payees or beneficiaries or any similar arrangement under or with respect to any insurance policy or any preference of one creditor over another arising by operation of law; + + (ee) "Market Purchases" has the meaning ascribed to it in Section 3.1; + +3 + + + + + + (ff) "Option Exercise Notice" has the meaning ascribed to it in Section 2.1; + + (gg) "Option Expiration Date" has the meaning ascribed to it in Section 2.1; + + (hh) "Options" means outstanding options to acquire Shares under the Stock Option Plan; + + (ii) "Other Purchasers" has the meaning ascribed to it in Section 4.1(a); + + (jj) "Parties" means the Company and HOC and their successors and permitted assigns; and "Party" means any one of them; + + (kk) "Person" means an individual, partnership, unincorporated association, organization, syndicate, corporation or trust or a trustee, executor, administrator or other legal or personal representative; + + (ll) "Private Agreement Purchases" means purchases of Equity Securities other than on any stock exchange on which the Shares are then listed or quoted provided such purchases are made in accordance with applicable Laws, including applicable Securities Laws; + + (mm) "Pro Rata Interest" has the meaning ascribed to it in Section 4.1(a); + + (nn) "Proposed Joint Venture" has the meaning ascribed to it in Section 6.1(a); + + (oo) "Properties" has the meaning ascribed to it in the Preamble hereto; + + (pp) "Purchased Shares" shall mean the shares of Common Stock to be acquired by HOC pursuant to the terms of the Subscription Agreement. + + (qq) "Rights Notice" has the meaning ascribed to it in Section 4.1(c); + + (rr) "Securities Exchange Act" means the Securities Exchange Act of 1934; + + (ss) "Securities Commissions" means the securities regulator in each jurisdiction whose Securities Laws are applicable to the Company; + + (tt) "Securities Laws" means the Laws relating to securities of the Company, and the regulations and rules made and forms prescribed thereunder together with all applicable published policy statements, blanket orders, rulings and notices adopted by the Securities Commissions of each such jurisdiction or applicable in such jurisdictions; + + (uu) "Shareholders" means the holders of Shares; + + (vv) "Shares" means common shares or any other securities into which the common shares in the capital of the Company are reorganized, exchanged or converted; + + (ww) "Stock Option Plan" means any stock option plan, agreement or arrangement adopted by the Company from time to time which provides for the issuance of options to acquire Shares; + +4 + + + + + +(xx) "Subscription Agreement" has the meaning ascribed to it in the Preamble hereto; + +(yy) "Subsequent Closing Date" has the meaning ascribed to it in Section 2.1; + +(zz) "Transactions" means the transactions contemplated in this Agreement. + +1.2 Gender and Certain References. Whenever the context requires, the gender of all words used shall include the masculine, feminine and neuter, and the number of all words shall include the singular and plural. The terms "hereof", "herein" or "hereunder"shall refer to this Agreement as a whole and not to any particular Article or Section hereof. All titles and headings to Articles and Sections in this Agreement are included for convenience and ease of reference. Titles and headings shall not affect in any way the meaning or interpretation of Articles or Sections of this Agreement. Any references to specific Articles or Sections shall mean the Articles and Sections in this Agreement. + +ARTICLE 2 ADDITIONAL INVESTMENTS BY HOC + +2.1 HOC Option to Purchase Additional Shares. From and after the Closing Date and until 5:00 pm Denver time on the date which is eighty (80) days from the Closing Date (the "Option Expiration Date"), HOC shall have the option (the "Option"), at its sole discretion, to subscribe for all, but not less than all, of an additional 4,330,000 Shares from the Company (the "Additional Shares") at a price of US$3.00 per share, or a total of US$12,990,000. If HOC wishes to exercise the Option, it shall give written notice to the Company (the "Option Exercise Notice") prior to the Option Expiration Date in the manner set forth in Section 12.1 of this Agreement. If HOC fails to deliver the Option Exercise Notice on or before the Option Expiration Date, HOC shall be deemed to have waived its rights under this Section 2.1. In the event HOC exercises the Option, one or more of the HOC Entities shall subscribe and pay for and the Company shall issue to the relevant HOC Entities, free and clear of any liens or encumbrances, the Additional Shares and the Parties shall exchange representations and warranties substantially similar to those contained in the Subscription Agreement and execute such documents as may be necessary to complete the subscription and sale of the Additional Shares. Closing of the purchase and sale of the Additional Shares shall take place within ten (10) business days of the delivery of the Option Exercise Notice, such date being referred to as the "Subsequent Closing Date". + +2.2 Use of Proceeds. In the event HOC exercises the Option, the Company agrees to use not less than five million U.S. Dollars (US$5,000,000) of the proceeds from the subscription of the Purchased Shares and the Additional Shares to fund exploration activities (including but not limited to drilling, assaying and staking new claims) on the El Aguila project. The Company further agrees that the balance of the proceeds from the subscription of the Purchased Shares and the Additional Shares shall be used as follows: (i) ten million U.S. Dollars (US$10,000,000) to fund the development and construction of the mine and plant for the El Aguila project; and (ii) three million U.S. Dollars (US$3,000,000) for working capital of the Company and other investments in the El Aguila project. + +5 + + + + + +2.3. Additional Financing. Subject to the provisions of Section 8.2, if the Company determines to solicit additional equity financing subsequent to exercise of the Option but prior to Commencement of Production (hereinafter defined) at the El Aguila project, it shall provide written notice to that effect to HOC and HOC shall be entitled to exclusively provide such financing upon the terms and conditions hereinafter set forth. For purposes of the preceding sentence, "Commencement of Production" shall be defined as the production and delivery to the point of sale (refiner) by the Company (either directly or through a subsidiary) of not less than 4,000 ounces of gold within a 45 day period. HOC shall have ten (10) Business Days from delivery of such notice in which to notify the Company that it desires to provide all of such financing (the "Financing Election"). If HOC delivers the Financing Election, the purchase price for each share shall be equal to eighty percent (80%) of the average closing price of the Shares during the thirty (30) calendar days preceding the date HOC delivers the Financing Election. Closing of the subscription, purchase and sale shall be at such place and time as the Parties agree but not more than ten (10) days from delivery of the Financing Election. If HOC delivers the Financing Election, one or more of the HOC Entities shall pay the purchase price for, and the Company shall issue, additional Shares, free and clear of all liens and encumbrances. The Parties shall exchange representations and warranties, in form and in substance substantially similar to those provided in the Subscription Agreement and execute such documents as may be necessary to complete the subscription and sale of the Shares. In the event HOC fails to provide the Financing Election as set forth above, the Company shall be free to obtain such financing from one or more additional parties, free of any obligation to HOC. + +ARTICLE 3 MARKET PURCHASES AND PRIVATE PURCHASES + +3.1 Market Purchases.Subject to compliance with applicable laws, the HOC Entities shall at any time and from time to time, in their sole discretion, be entitled to make purchases of the Company's common stock in the over-the-counter market or on any stock exchange on which its common stock is then quoted or listed (the "Market Purchases"); provided, however, that for a period of two (2) years following the Closing Date, unless the Parties otherwise agree, the HOC Entities do not beneficially own, directly or indirectly, more than forty percent (40%) of the Company's outstanding common stock on an undiluted basis, following any Market Purchase and any Private Agreement Purchase. For purposes of this Agreement, beneficial ownership shall be determined in accordance with the provisions of Rule 13d-3 of the Securities Exchange Act. + +3.2 Private Purchase.In addition to Market Purchases, as described in Section 3.1 above, HOC shall be entitled to make Private Agreement Purchases, provided that such purchases are made in accordance with all applicable laws; and provided further, that for a period of two (2) years following the Closing Date, unless the Parties otherwise agree, the HOC Entities will not beneficially own more than forty percent (40%) of the Company's outstanding common stock on an undiluted basis following any Market Purchase and/or Private Agreement Purchase. At the request of HOC, the Company shall introduce HOC to persons whom the Company believes may be interested in selling its common stock. + +6 + + + + + +ARTICLE 4 PRE-EMPTIVE RIGHT + +4.1 HOC's Pre-emptive Right. + +(a) Subject to the provisions of subsection (g) of this Section 4.1 and Section 8.2 hereof, if at any time after the Closing Date, the Company proposes to issue or sell Equity Securities ("Additional Securities") other than (i) under any Stock Option Plan, (ii) pursuant to the exercise of options under any Stock Option Plan, (iii) upon the exercise, exchange or conversion of any Convertible Securities, or (iv) for property other than money, the HOC Entities shall have the right to subscribe for and purchase Additional Securities, at the price at which such Additional Securities are offered for sale to other purchasers (the "Other Purchasers"), up to its Pro Rata Interest (as defined below) prior to giving effect to the issuance or sale of such Additional Securities. "Pro Rata Interest" means, at any relevant time, the ownership interest of HOC, expressed as a percentage, equal to: (i) the number of outstanding shares of common stock of the Company ("Common Stock") beneficially owned by the HOC Entities, including all shares of Common Stock issuable upon the conversion, exercise or exchange of all Convertible Securities beneficially owned by the HOC Entities divided by (ii) the aggregate number of outstanding shares of Common Stock, plus the number of shares of Common Stock issuable upon the conversion, exercise or exchange of all outstanding Convertible Securities; + +(b) If the Company issues Equity Securities in circumstances that would not give rise to the rights of the HOC Entities pursuant to Section 4.1(a) (the "Non-Participating Transaction"), then in any concurrent or subsequent transaction which does give rise to the rights of the HOC Entities pursuant to Section 4.1(a) (the "Participating Transaction"), the Company shall allow the HOC Entities to subscribe for and purchase Additional Securities in an amount greater than HOC's Pro Rata Interest; provided that in the Participating Transaction, HOC shall not be entitled to purchase any more than its Pro Rata Interest of the securities sold collectively in the Non-Participating Transaction and the Participating Transaction. + +(c) If the Company intends to authorize and/or issue equity securities that give rise to the rights of HOC pursuant to Section 4.1(a), the Company shall provide notice to HOC (the "Rights Notice") no less than ten (10) business days before the date on which the Company intends to issue equity securities giving rise to the rights of HOC in Section 4.1(a). + +(d) The Rights Notice shall specify sufficient information regarding the particulars of the issuance or sale of the Additional Securities to allow HOC to make a reasoned decision in respect of making the investment, including to the extent any such terms are determinable at such time: (i) the total number of equity securities outstanding as of the date thereof; (ii) the total number of Additional Securities which are being offered; (iii) the rights, privileges, restrictions, terms and conditions of such Additional Securities; (iv) the amount payable by HOC for the Additional Securities to which it is entitled pursuant to Section 4.1(a); and (v) the proposed closing date, and thereafter, to the extent it is not included in the Rights Notice, the Company shall immediately provide notice to HOC of such information as it is determined. + +(e) HOC shall give notice (an "Acceptance Notice") to the Company not later than 5:00 p.m. (Denver time) on the tenth business day following the deemed receipt of any Rights Notice given under paragraph 4.1(c) setting out the number of Additional Securities, if any, which any of HOC Entities intends to subscribe for and purchase and, if applicable, the name and address of HOC Entity whose name in which such securities should be registered, provided that if HOC, acting reasonably, determines that it has insufficient information to make such investment decision, HOC shall notify the Company of the information required to make such investment decision and thereafter shall have the longer of (i) the remainder of the ten (10) Business Days set out in the first sentence of this paragraph; or (ii) two (2) Business Days from the receipt of such additional information to make the investment decision and deliver or refrain from delivering the Acceptance Notice. Notwithstanding the preceding sentence, the Rights Notice shall be deemed to include sufficient information to make such investment decision if it includes the information specified in items (i) to (iv) of Section 4.1(d). If no Acceptance Notice has been provided to the Company within the required time, HOC will be deemed to have elected not to subscribe for or purchase any such Additional Securities. + +7 + + + + + +(f) Following delivery of the Acceptance Notice, if any, the HOC Entities shall pay for, and the Company shall issue to the relevant HOC Entities, free and clear of any liens, the number of Additional Securities specified in the Acceptance Notice and, except as otherwise agreed, the Company shall provide HOC with substantially the same closing documents, including opinions, if applicable, as are delivered to the other persons subscribing for Additional Securities on the closing date for such issuance. + +(g) The rights granted to HOC under this Article 4 shall terminate and be of no further force or effect if HOC does not exercise Option and complete the purchase of the Additional Shares. + +ARTICLE 5 BOARD REPRESENTATION + +5.1 Appointment of HOC Nominee. If, but only if HOC exercises the Option and completes the acquisition of the Additional Shares, HOC shall be entitled to nominate one (1) individual to the Board of Directors (the "HOC Director"). Upon receipt of such nomination and its satisfaction that the individual nominated by HOC meets the qualification requirements for directors under applicable laws, the Board of Directors further agrees to expand its membership to four (4) positions and appoint the individual nominated by HOC to the newly-created vacancy. The Board of Directors further agrees that if HOC maintains a Pro Rata Interest of at least 14.5%, it shall nominate such individual to the slate of directors at each subsequent annual meeting so long as the provisions of Section 8.2 are not invoked. + +5.2 Increase in Membership of the Board of Directors. If HOC acquires the Additional Shares and subsequently acquires additional Shares such that it holds a Pro Rata Interest of 40% or more, HOC shall be entitled to appoint one (1) additional individual to the Board of Directors. For greater clarity, if HOC exercises the Option and holds a Pro Rata Interest of at least 40%, HOC shall be entitled to appoint a total of two (2) individuals to the Board of Directors. Upon receipt of a nomination from HOC for the second director and its satisfaction that the individual meets the qualification requirements for directors under applicable law, the Board of Directors agrees to expand its membership to five positions and appoint the individual nominated by HOC to the newly created vacancy. The Board of Directors further agrees that so long as HOC maintains a Pro Rata Interest of at least 35%, it shall nominate such individual to the slate of directors at each subsequent annual meeting so long as the provisions of Section 8.2 are not invoked. The Company further agrees that if HOC exercises the Option and so long as the provisions of Section 8.2 are not invoked, it will not take any action to authorize and will cause the Board of Directors not to authorize any proposal to expand the Board beyond five (5) members without the advance written approval of HOC. + +8 + + + + + +5.3 Board Meetings. At all times when the provisions of Section 5.1 are satisfied, the Company shall provide HOC Director(s) not less than 7 (seven) Business Days advance written notice of the date on which any meeting of the Board of Directors shall be held. In providing such notice, the Company shall take into consideration the matters to be discussed at the meeting, the proximity to the place of the meeting and the time zone in which the HOC Director is resident. + +5.4 Resignation of HOC Director(s). If (x) one or both HOC Directors do not meet the individual qualifications for a director prescribed by applicable laws, (y) the Pro Rata Interest of HOC falls below 14.5%, or (z) the provisions of Section 8.2 hereof become applicable and the Company delivers notice to HOC to that effect, all of the HOC Directors shall forthwith resign; provided, however, that in the event of (x), HOC shall then be entitled to appoint an individual to replace the resigning director(s) and such resigning director(s) shall be afforded the benefits of any indemnity and insurance as may exist for all matters occurring prior to such resignation. + +5.5 Indemnification and Director's and Officer's Insurance. So long as HOC is entitled to nominate and maintain a director pursuant to this Article 5, the Company shall indemnify each current and former HOC Director and shall maintain director's and officer's liability insurance for the benefit of each such director, with the same rights and benefits as are accorded the directors of the Company generally. + +ARTICLE 6 RIGHT OF FIRST OFFER + +The provisions of this Article 6 shall apply if, but only if, HOC exercises the Option and acquires the Additional Shares and so long as the provisions of Section 8.2 do not apply: + +6.1 Joint Venture + + (a) If the Company or any of its Subsidiaries decides to seek a joint venture partner to develop, acquire or otherwise earn an interest in any Properties including the Existing Properties, in circumstances where the Company's participation in such joint venture is not dependent on the participation of a particular third party as joint venture partner (such as in the case of an earn-in) (each a "Proposed Joint Venture"), the Company shall immediately provide notice to HOC (the "Joint Venture Proposal Notice") specifying sufficient information regarding the particulars of the Proposed Joint Venture to allow HOC to make a reasoned decision in respect of participating in the Proposed Joint Venture, including to the extent any such terms are determinable at such time: (A) a description of the Property in respect of which the Proposed Joint Venture relates, and (B) the terms, including the purchase price, for the Proposed Joint Venture, and if applicable, a true copy of any related term sheet setting forth such terms. + +Notwithstanding the foregoing, nothing in this Section 6.1 shall prevent the Company from concurrently negotiating with third parties with respect to those matters set out in this Section 6.1. + + (b) If HOC, acting reasonably, determines that the Joint Venture Proposal Notice contains insufficient information to make a reasoned decision in respect of participating in the Proposed Joint Venture, it shall notify the Company of the information required to make such decision and thereafter shall have the greater of (i) five (5) Business Days from the receipt of such information from the Company, and (ii) the days remaining in the period specified in Section 6.2 to make such decision and deliver or refrain from delivering the HOC JV Acceptance Notice in accordance with such Section 6.2. Notwithstanding the foregoing, a copy of the term sheet for the Proposed Joint Venture shall be deemed to be sufficient information to make such reasoned decision, if it includes the information specified in Section 6.1(a). + +9 + + + + + +6.2 Joint Venture Proposal + + (a) Receipt of the Joint Venture Proposal Notice by HOC shall be deemed to constitute an invitation to HOC Entities to participate in the Proposed Joint Venture. + + (b) If any of HOC Entities provides the Company an acceptance (the "HOC JV Acceptance Notice") in writing in respect of the Joint Venture Proposal Notice, within fifteen (15) Business Days of receipt thereof or such shorter period as may be specified in the Joint Venture Proposal Notice of a determination in respect of the Proposed Joint Venture, the Company shall negotiate exclusively in good faith with HOC to finalize terms of the Proposed Joint Venture acceptable to each of the Parties, acting reasonably, within a period of sixty days or such additional period as the Parties may from time to time agree in writing (the "JV Negotiation Period"), failing which the Company shall be entitled to pursue other partners for the Proposed Joint Venture. If HOC does not provide HOC JV Acceptance Notice to the Company within fifteen (15) Business Days or such shorter period as may be specified in the Joint Venture Proposal Notice, of receiving of the Joint Venture Proposal Notice, the Company may enter into negotiations with any other person regarding the Proposed Joint Venture. If the Company truncates the period during which the HOC JV Acceptance Notice is required to be returned by HOC, it shall include in the Joint Venture Proposal Notice a statement certified by an officer of the Company that the Company has determined that it is necessary to truncate such period to avoid losing the opportunity to make such acquisition or other related transaction and that it has used commercially reasonable efforts to avoid truncating such period. + +ARTICLE 7 STANDSTILL + +The provisions of this Article 7 shall apply if HOC acquires the Additional Shares and for a period of two (2) years after the Subsequent Closing Date: + +7.1 Standstill + + (a) HOC covenants and agrees that, except as otherwise contemplated in this Agreement, HOC will not, and will not allow any HOC Entities to, in either case, without the prior written consent of the Company, directly or indirectly: + + (i) acquire or enter into any agreement to acquire or make any proposal or offer to acquire in any manner any equity securities of the Company (whether issued or unissued) that would result in a Pro Rata Interest greater than 40% other than (A) as a result of a stock dividend or distribution made by or a recapitalization of the Company, (B) in accordance with the terms of any dividend reinvestment or share purchase plan made available from time to time by the Company to holders of equity securities; (C) pursuant to the exercise of rights issued pursuant to a rights offering made by the Company to the holders of its equity securities; or (D) pursuant to the exercise of rights issued pursuant to any shareholder rights plan of the Company and attached to equity securities; + +10 + + + + + + (ii) assist, encourage or advise any other person to acquire or agree to acquire in any manner any equity securities; + + (iii) propose or support or engage in any discussions or negotiations with respect to, or enter into any agreement, commitment or understanding with any third party to effect, any tender offer, merger, business combination, asset or share transaction, financing transaction or corporate restructuring involving the Company; + + (iv) make or participate directly or indirectly in any solicitation of proxies from shareholders of the Company; + + (v) form, join or in any way participate in any group acting jointly or in concert with any of the foregoing; or + + (vi) make any public disclosure of any intention in connection with the foregoing; + + (each an "Acquisition Proposal"). + +(b)Notwithstanding Section 6.1, none of the HOC Entities shall be prohibited from making an Acquisition Proposal: + + (i) in the event the Company materially breaches its obligations under Section 2.3 (Additional Financing), Article 4 (Pre-Emptive Right), Article 5 (Board Representation) or Article 6 (Right of First Offer), provided that HOC has notified the Company of any alleged breach and the Company has failed to cure such alleged breach, if curable, within thirty days of such notice; + + (ii) from the date any public announcement of or public disclosure of an intention to commence or enter into any agreement with respect to any of the following is made by any person (other than any HOC Entity) to the date of the withdrawal or cancellation of the Tender Offer Transaction or Business Combination Transaction (each as defined below): + + A) a tender offer or an intention to undertake a tender offer for equity securities of the Company by any person or group of persons (other than any HOC Entities) which if completed would result in such tender offer person or group of persons holding 20% or more on a non-diluted basis of any class of then outstanding equity securities of the Company (a "Tender Offer Transaction"); or + +11 + + B) any acquisition (excluding a Tender Offer Transaction), merger, asset purchase and sale, business combination + + + + + + B) any acquisition (excluding a Tender Offer Transaction), merger, asset purchase and sale, business combination transaction or other extraordinary transaction involving or relating to the Company or any of its subsidiaries, or an intention to make an offer to the Company and/or its subsidiaries to undertake such a transaction, by any person or group of persons (other than any HOC Entities) which would, if completed, result in (I) any class of outstanding equity securities being converted into cash or securities of another person resulting in shareholders holding less than 50% of the equity and/or voting securities of the resulting entity; or (II) all or substantially all of the Company's assets being sold to any person or group of persons (other than any HOC Entities) (a "Business Combination Transaction"), provided that in the case of this Section 6.1(b)(ii)(B) HOC must make such Acquisition Proposal confidentially to the Board of Directors and not by way of public offer to the shareholders. + + For greater certainty, if HOC has commenced an Acquisition Proposal in reliance on this Section 6.1(b)(ii) or in respect of Section 6.1(b)(ii)(B), has agreed with the Company to an Acquisition Proposal, prior to the withdrawal or cancellation of such Tender Offer Transaction or Business Combination Transaction, HOC shall not be precluded from continuing with such Acquisition Proposal by reason only of the withdrawal or cancellation of any relevant Tender Offer Transaction or Business Combination Transaction; or + + (iii) if a person or group of persons other than any of the HOC Entities, the Company or its subsidiaries obtains proxies carrying a majority of the votes attached to all outstanding voting securities of the Company and exercises such votes to replace the Board of Directors. + +7.2 Most Favored Nation. The Company shall immediately inform HOC and provide HOC with a copy of any other standstill provisions in any agreement pertaining to the matters set forth in this Article 6, entered into by the Company with another person subsequent to the date hereof, and notwithstanding delivery of such notice and a copy of any such provisions, HOC shall have the full benefit of any materially more favourable terms, in the opinion of HOC, contained in such standstill and Section 6.1 shall be deemed to be amended accordingly. + +ARTICLE 8 COVENANTS + +8.1 Designation of Consulting Geologists. During the time up to the Option Expiration Date, and thereafter if HOC exercises the Option and acquires the Additional Shares and the provisions of Section 8.2 do not apply, HOC shall have the right to designate one full or part time geologist to act as a consultant to the Company at any of its Existing Properties for the purpose of advising the Company with regard to ongoing exploration and development. The Company shall provide such geologist with room and board while such geologist is on-site at any of the Existing Properties. HOC, however, shall be responsible for payment of any compensation for such geologist. Other consulting services which may be required by the Company, including metallurgical, underground mining engineering or concentrate contract negotiations, may be requested from HOC, and provided that HOC agrees to deliver those services, any charges for such services shall be billed by HOC to the Company at no more than HOC's actual cost plus 1%. + +12 + + + + + +8.2 Termination of Certain HOC Rights. Notwithstanding anything in this Agreement to the contrary, in the event (i) HOC shall hold a Pro Rata Interest less than 14.5% or (ii) HOC shall have achieved a Pro Rata Interest greater than 14.5% but subsequently sells or otherwise disposes of 20% or more of its Pro Rata Interest in any one or more transactions, the benefits provided to HOC pursuant to the provisions of Section 2.3 (Additional Financing), Article 4 (Pre-Emptive Rights), Article 5 (Board Representation), Article 6 (First Offer) and Section 8.1 (Designation of Geologist) above shall immediately terminate and be of no further force or effect. Furthermore, any HOC Director nominated and appointed pursuant to the provisions of Section 5.1 or 5.2 shall immediately resign in the event that the provisions of subsection (i) or (ii) above shall be applicable. + +ARTICLE 9 ADDITIONAL COVENANTS + +9.1 Covenants of the Company. + + (a) Prior to the Option Expiration Date, the Company shall not and shall not permit its Affiliates, agents or other representatives (including any director, officer, investment banker, legal advisor or accountant retained by the Company or any of its Susidiaries) to: + + (i) initiate, solicit, promote or encourage, directly or indirectly, inquiries or the submission of proposals or offers from any Person with respect to any proposal or offer or action that would reasonably be expected to delay, prevent or frustrate the Transactions or any part thereof (an "Alternative Proposal"); + + (ii) encourage, or participate or engage in negotiations concerning, or furnish to any Person other than to HOC Entities, any non-public information with respect to, or otherwise co-operate in any way with, or participate in, or facilitate or encourage any Person to make an Alternative Proposal; or + + (iii) endorse, accept, approve or recommend a proposal of, or enter into any Contract or understanding with , any Person relating to an Alternative Proposal, or otherwise facilitate any effort or attempt to make or implement an Alternative Proposal. + + (b) Notwithstanding anything else in this Section 9.1, if the Company or any of its subsidiaries receives an unsolicited Alternative Proposal prior to the Option Exercise Date, the Board of Directors may participate in discussions with, furnish information to, or enter into an agreement with the Person that initiated the Alternative Proposal only if: (x) the Board of Directors determines in good faith, after consultation with outside counsel, that such action is necessary in order for them to act in a manner consistent with their fiduciary duty under applicable Laws; (y) the Company shall have provided to HOC notice at least five (5) Business Days prior to the date on which the agreement to effect such Alternative Proposal is to be entered into specifying the terms of the Alternative Proposal; and (z) after taking into account modifications to this Agreement proposed by HOC during such five Business Day period, such proposal would constitute a superior proposal ("Superior Proposal"). If HOC makes a proposal to amend this Agreement to increase the purchase price payable for the Additional Shares, such that the proposal of such other Person shall no longer be a Superior Proposal, and shall complete the purchase of the Additional Shares upon such terms, then neither the Company nor its subsidiaries shall enter into such Alternative Proposal. + +13 + + + + + + (c) The Company shall comply with all securities regulatory filing requirements on a timely basis in connection with the issuance of any Equity Securities of the Company to any HOC Entity, including filing within the periods stipulated under Securities Laws, at the Company's expense, all private placement forms required to be filed by the Company and paying all filing fees required to be paid in connection therewith so that such issuance may lawfully occur without the necessity of filing a prospectus, registration statement or any similar document under the Securities Laws. + + (d) The Company shall, to the extent and for so long as HOC Entities hold at least 14.5% of the Shares on a non-diluted basis, upon HOC's request, permit representatives of the HOC Entities to have access to the site and any of the premises where the business and operations of the Company and its Subsidiaries are conducted and access and duplicating rights (and use commercially reasonable efforts to cause persons or firms possessing such documentation or information to give similar access and duplicating rights) to the Company and its Subsidiaries' books of account and records and such other documents, communications, items and matters, within the knowledge, possession or control of the Company, which HOC may reasonably request, at HOC's own cost (other than those it is permitted to examine and make copies of free of charge pursuant to applicable Laws) provided that, except to the extent the information can be provided in the necessary course of business of the Company, acting reasonably including to provide HOC Entities with information to assist the HOC Entities and their advisors with the preparation of the financial statements for such HOC Entities, nothing herein shall require the Company to provide HOC Entities with any information which would constitute a material fact with respect to the Company which has not been generally disclosed. + + (e) In the event the Company shall breach any representation or warranty, covenant or any other right of HOC under this Agreement in any material respect, including but not limited to, the rights afforded to HOC under Articles 2, 4, 5, 6 and 8 hereof, then at the request of HOC, the Company shall promptly prepare and file with the SEC a registration statement on Form S-l or S-3 (or, if Form S-l or S-3 is not then available, on such form of registration statement as is then available to effect a registration for resale of the Purchase Shares and the Additional Shares ("Registration Statement")), covering the resale of all of the Shares owned by HOC; provided, however, that if prior to the filing of the Registration Statement, the provisions of Rule 144 of the Securities Act of 1933, as amended (the "1933 Act") allow the sale of all of the Shares in compliance with that Rule, the Company shall not be obligated to file such Registration Statement so long as the Company at its own expense, does the following: (i) complies with any necessary filing or reporting requirements (under the 1933 Act or otherwise) to permit such sale, (ii) cooperates with HOC in removing any legend on the certificates representing the Shares, including but not limited to instructing its transfer agent to remove such restrictive legend and (iii) provides HOC with an opinion of counsel confirming that such sale is permitted under Rule 144. Such Registration Statement also shall cover, to the extent allowable under the 1933 Act and the rules promulgated thereunder (including Rule 416), such indeterminate number of additional shares of Common Stock resulting from stock splits, stock dividends or similar transactions with respect to the Shares. The Company shall pay all expenses associated with the registration, including filing and printing fees, counsel and accounting fees and expenses, and State "Blue Sky" fees and expenses. The Company shall use its commercially reasonable efforts to have the Registration Statement declared effective by the SEC as soon as practicable. The Company shall notify HOC by facsimile or e-mail as promptly as practicable, and in any event, within three (3) business days, after the Registration Statement is declared effective and shall simultaneously provide HOC with copies of any related prospectus to be used in connection with the sale or other disposition of the securities covered thereby. + +14 + + + + + + (f) In connection with the foregoing, the Company shall indemnify and hold harmless HOC against any losses, claims, damages or liabilities to which it may become subject under the 1933 Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon (i) any untrue statement or alleged untrue statement of any material fact contained in the Registration Statement or any other public filing by the Company, so long as such statement has not been provided to the Company by HOC for inclusion in such registration statement; (ii) the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, so long as such omission or alleged omission does not relate to HOC or the manner of sale for the Shares as provided to the Company by HOC; or (iii) any violation of the 1933 Act, any rule or regulation thereunder or any other securities law, rule or regulation applicable to the Company and relating to the action or inaction required of the Company in connection therewith. The foregoing indemnification obligation shall extend to the fees and expenses of any counsel retained by HOC in connection with any such loss, claim, damage or liability. + +ARTICLE 10 REPRESENTATIONS & WARRANTIES + +10.1 Representations and Warranties of the Company. The Company represents, warrants and agrees with HOC as of the date of this Agreement, that: + + (a) The Company is a corporation duly incorporated under the laws of the State of Colorado, and is validly existing and in good standing under the laws of the State of Colorado and no proceedings have been instituted or are pending for the dissolution or liquidation of the Company; + + (b) The Company has all requisite legal and corporate power and authority to execute, deliver and perform its obligations under this Agreement; + + (c) This Agreement has been duly authorized by all necessary corporate action on the part of the Company and has been duly executed and delivered by the Company and constitutes a valid and legally binding obligation of the Company enforceable against the Company in accordance with its terms; and + +15 + + + + + + (d) The execution and delivery of this Agreement and the performance by the Company of its obligations hereunder and the consummation of the Transactions, do not and will not conflict with, or result in a breach or violation of, any of the terms or provisions of, or constitute a default under (whether after notice or lapse of time or both): (i) the constating documents of the Company; (ii) the resolutions of the shareholders or directors (or any committee thereof) of the Company which are in effect at the date hereof; (iii) any mortgage, note, indenture, contract, agreement, instrument, lease or other document to which the Company is a party or by which it is bound; or (iv) any judgement, writ, injunction, decree or order, of any court or of any Authority that is binding the Company or the property or assets of the Company. + +10.2 Representations and Warranties of HOC. HOC represents, warrants and agrees with the Company as of the date of this Agreement, that: + + (a) HOC is a limited company incorporated under the Companies Act 1985 (England) as a limited company, registered in England and Wales, and is validly existing and in good standing under the laws of England and no proceedings have been instituted or are pending for the dissolution or liquidation of HOC; + + (b) HOC has all requisite legal and corporate power and authority to execute, deliver and perform its obligations under this Agreement; + + (c) this Agreement has been duly authorized by all necessary corporate action on the part of HOC and has been duly executed and delivered by HOC and constitutes a valid and legally binding obligation of HOC enforceable against HOC in accordance with its terms; and + + (d) the execution and delivery of this Agreement and the performance by HOC of its obligations hereunder and the consummation of the Transactions, do not and will not conflict with, or result in a breach or violation of, any of the terms or provisions of, or constitute a default under (whether after notice or lapse of time or both): (i) the constating documents of HOC; (ii) the resolutions of the shareholders or directors (or any committee thereof) of HOC which are in effect at the date hereof; (iii) any mortgage, note, indenture, contract, agreement, instrument, lease or other document to which HOC is a party or by which it is bound; or (iv) any judgement, writ, injunction, decree or order, of any court or of any Authority that is binding on HOC or the property or assets of HOC. + +ARTICLE 11 INDEMNIFICATION + +11.1 Indemnification by the Company. + + The Company will indemnify and save harmless the HOC Entities and the directors, officers, employees and agents of the HOC Entities (collectively, the "HOC Indemnitees") from and against all Claims incurred by any one or more of the HOC Indemnitees directly or indirectly resulting from any breach of any covenant, representation or warranty of the Company contained in this Agreement. + +16 + + + + + +11.2 Indemnification by HOC. + + HOC will indemnify and save harmless the Company and the directors, officers, employees and agents of the Company (collectively, the "Company Indemnitees") from and against all Claims incurred by any one or more of the Company Indemnitees directly or indirectly resulting from any breach of any covenant, representation or warranty of HOC contained in this Agreement. + +11.3 Injunctive Relief. + + Notwithstanding any other provision of this Agreement, nothing herein is intended to or shall restrict a Party from seeking and receiving injunctive relief (whether as a temporary restraining order, preliminary injunction or otherwise) or specific performance. + +ARTICLE 12 MISCELLANEOUS PROVISIONS + +12.1 Notices. All notices or other communications required or permitted to be given by one party to another by the terms hereof shall be given in writing by personal delivery or facsimile delivered to such other party as follows: + + To the Company: + + Gold Resource Corporation 222 Milwaukee St., Suite 301 Denver, CO 80206 Attention: William Reid, President Facsimile No.: (303) 320-7835 + + To HOC: + + Hochschild Mining Holdings Limited Calle La Colonia 180 Surco, Lima 33, Peru Attention: VP & General Counsel Facsimile No.: +511-437-5009 + +or at such other address or facsimile number as may be given by either of them to the other in writing from time to time and such other notices or communications shall be deemed to have been received when delivered or, if by facsimile, on the next business day after such notice or other communication has been transmitted by facsimile (with receipt confirmed). + +17 + + + + + +12.2 Further Assurances. Each of the parties hereto upon the request of each of the other parties hereto, whether before or after the date of this Agreement, shall do, execute, acknowledge and deliver or cause to be done, executed, acknowledged and delivered all such further acts, deeds, documents, assignments, transfers, conveyances, powers of attorney and assurances as may reasonably be necessary or desirable to complete the transactions contemplated herein. + +12.3 Costs and Expenses. All costs and expenses (including, without limitation, the fees and disbursements of legal counsel) incurred in connection with this Agreement and the transactions herein contemplated shall be paid and borne by the party incurring such costs and expenses. + +12.4 Applicable Law. This Agreement shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the laws of the State of New York and the laws of the United States applicable therein. Any and all disputes arising under this Agreement, whether as to interpretation, performance or otherwise, shall be subject to the non-exclusive jurisdiction of the courts of Colorado and each of the parties hereto hereby irrevocably attorns to the jurisdiction of the courts of such province. + +12.5 Entire Agreement. This Agreement constitutes the entire agreement between the parties with respect to the transactions contemplated herein and cancels and supersedes any prior understandings, agreements, negotiations and discussions between the parties. There are no representations, warranties, terms, conditions, undertakings or collateral agreements or understandings, express or implied, between the parties hereto other than those expressly set forth in this Agreement or in any such agreement, certificate, affidavit, statutory declaration or other document as aforesaid. + +12.6 Amendment and Waivers. No amendment of this Agreement will be effective unless made in writing and signed by the Parties. A waiver of any default, breach or non-compliance under this Agreement is not effective unless in writing and signed by the Party to be bound by the waiver. No waiver shall be inferred from or implied by any failure to act or delay in acting by a Party in respect of any default, breach or non-observance or by anything done or omitted to be done by the other Party in respect of any default, beach or non-observance or by anything done or omitted to be done by the other Party. The waiver by any Party of any default, breach or non-compliance under this Agreement shall not operate as a waiver of that Party's rights under this Agreement in respect of any continuing or subsequent default, breach or non-observance (whether of the same or any other nature). + +12.7 Severability. If any one or more provisions in this Agreement, for any reason, shall be determined to be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of any such provision in any other respect and the remaining provisions of this Agreement shall not be in anyway impaired. + +12.8 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original and all of which together shall constitute one and the same Agreement. Counterparts may be delivered either in original or faxed form and the parties adopt any signature received by a receiving fax machine as original signatures of the parties. + +12.9 Assignment. This Agreement may not be assigned by either party except with the prior written consent of the other parties hereto. + +18 + + + + + +12.10 Enurement. This Agreement shall enure to the benefit of and be binding upon the parties hereto and their respective heirs, executors, successors (including any successor by reason of the amalgamation or merger of any party), administrators and permitted assigns. + +IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the day and year first above written. + +GOLD RESOURCE CORPORATIOn + +By: ___________________________________________ Authorized Signing Officer + +HOCHSCHILD MINING HOLDINGS LIMITED + +By: ___________________________________________ Authorized Signing Officer + +19 \ No newline at end of file diff --git a/full_contract_txt/GOOSEHEADINSURANCE,INC_04_02_2018-EX-10.6-Franchise Agreement.txt b/full_contract_txt/GOOSEHEADINSURANCE,INC_04_02_2018-EX-10.6-Franchise Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..8aa9a425054f19f6bb543628e6a80f1ee901ebf7 --- /dev/null +++ b/full_contract_txt/GOOSEHEADINSURANCE,INC_04_02_2018-EX-10.6-Franchise Agreement.txt @@ -0,0 +1,1449 @@ +Exhibit 10.6 + +Goosehead Insurance Agency, LLC Franchise Agreement + +Exhibit A Declarations Page 1 1.2 The "Approved Location" under this Agreement will be: . 2 4.1 You elect to pay the Initial Franchise Fee in one of the following ways: (check only one): ☐ In its entirety at the time you enter into this Agreement, in which case the amount of the Initial Franchise Fee shall be: ($ ). ☐ You shall pay a portion of the Initial Franchise Fee at the time you enter into this Agreement in the amount of ($ ), and shall pay the remaining portion of ($ ), plus interest, according to the terms of the 60-month Promissory Note attached to this Agreement as Exhibit I. 3 4.2 The "Commencement Date" will be: . Initials Franchisee Franchisor + + + + + +Goosehead Insurance Agency, LLC Franchise Agreement + +TABLE OF CONTENTS Section Title Page# Recitals 2 1 Grant 2 2 Term And Renewal 3 3 Our Duties 4 4 Fees; Sales Reporting 6 5 Franchised Business Commencement 9 6 Operating Principal, Personnel, And Training 11 7 Purchase of Products and Services 13 8 Your Duties 15 9 Proprietary Marks 20 10 Confidential Brand Standards Manuals 23 11 Confidential Information 24 12 Accounting, Financial And Other Records, And Inspections 25 13 Marketing 27 14 Technology 31 15 Insurance 35 16 Transfer Of Interest 38 17 Default And Termination 43 18 Obligations Upon Termination Or Expiration 46 19 Covenants 49 20 Taxes, Permits, And Indebtedness 51 21 Independent Contractor And Indemnification 52 22 Force Majeure 53 23 Approvals And Waivers 54 24 Notices 54 25 Entire Agreement And Amendment 54 26 Severability And Construction 55 27 Applicable Law And Dispute Resolution 55 28 Acknowledgments 57 Exhibits A Declarations Page E ADA Certification B Guarantee, Indemnification, and Acknowledgement F1- 3 Sample Forms of Non-Disclosure and Non- Competition Agreements C List of Principals G Site Selection Addendum D ACH - Authorization Agreement for H Lease Rider Prearranged Payments (Direct Debits) I Promissory Note + +i + + + + + +Goosehead Insurance Agency, LLC Franchise Agreement THIS FRANCHISE AGREEMENT (the "Agreement") is made and entered into as of the "Effective Date" that we have indicated on the signature page of this Agreement by and between: ● Goosehead Insurance Agency, LLC, a Delaware limited liability company, with its principal place of business at 1500 Solana Blvd., Suite 450, Westlake, Texas 76262 ("we," "us," or "our"); and ● a [resident of] [corporation organized in] [limited liability company organized in] the state of and having offices at ("you" or the "Franchisee"). + +Introduction + +We have developed our own distinctive and proprietary systems for insurance services, including home insurance, automobile insurance, life insurance, specialty lines, and business insurance (the "System"). Our System includes (among other things): business processes, technologies, trade secrets, customer lists, knowledge, know-how, trade names, service marks, trademarks, logos, emblems, trade dress and other intellectual property; distinctive signage; standards, specifications and sources for services, products, supplies, appearance, operations and management control; safety standards; training and assistance; purchasing programs; and advertising, marketing, promotional and sales programs; all of which we may periodically change, discontinue, improve, modify and further develop. + +We identify the System by means of our Proprietary Marks. Our proprietary marks include certain trade names (for example, the mark "Goosehead Insurance" and logo), service marks, trademarks, logos, emblems, and indicia of origin, as well as other trade names, service marks, and trademarks that we may periodically specify in writing for use in connection with the System (all of these are referred to as our "Proprietary Marks"). We continue to develop, use, and control the use of our Proprietary Marks in order to identify for the public the source of services and products marketed under those marks and under the System, and to represent the System's high standards of quality, appearance, and service. + +We are in the business of developing and awarding franchise rights to third party franchisees, such as you, to develop and operate businesses providing insurance services ("Services") to clients under the System and using the Proprietary Marks ("Goosehead Businesses"). + +You have asked to enter into the business of operating a Goosehead Business under our System and wish to obtain a franchise from us for that purpose, as well as to receive the training and other assistance we provide as described in this Agreement. You also understand and acknowledge the importance of our high standards of quality, appearance, and service and the necessity of operating the business franchised under this Agreement in conformity with our standards and specifications. + +You will be in the business of operating a Goosehead Business, using the same brand and Proprietary Marks as other independent businesses that operate other Goosehead Businesses under the System. We will not operate your Goosehead Business for you, although we have (and will continue) to set standards for Goosehead Businesses that you will have chosen to adopt as yours by signing this Agreement and by your day-to-day management of your Goosehead Business to our brand standards. + +Page 1 of 80 + + + + + +In recognition of all of the details noted above, the parties have chosen to enter into this Agreement, taking into account all of the promises and commitments that they are each making to one another in this contract, and for other good and valuable consideration (the sufficiency and receipt of which they hereby acknowledge) and they agree as follows: 1 GRANT 1.1 Rights and Obligations. We grant you the right, and you accept the obligation, all under the terms (and subject to the conditions) of this Agreement: 1.1.1 To operate one Goosehead Business under the System (the "Franchised Business"); 1.1.2 To use the Proprietary Marks and the System, but only in connection with the Franchised Business (recognizing that we may periodically change or improve the Proprietary Marks and the System); and 1.1.3 To do all of those things only at the Approved Location (as defined in Section 1.2 below). 1.2 Approved Location. The street address of the location for the Franchised Business approved under this Agreement is specified in Exhibit A to this Agreement, and is referred to as the "Approved Location." 1.2.1 When this Agreement is signed, if you have not yet obtained (and we have not yet approved in writing) a location for the Franchised Business, then you agree to enter into the site selection addendum (the "Site Selection Addendum," attached as Exhibit G to this Agreement) at the same time as you sign this Agreement. You will then find a site which will become the Approved Location after we have given you our written approval for that site and you have obtained the right to occupy the premises, by lease, sublease, or acquisition of the property, all subject to our prior written approval and in accordance with the Site Selection Addendum. 1.2.2 We have the right to grant or withhold approval of the Approved Location under this Section 1.2. You understand, acknowledge, and agree that our review and approval of your proposed location, under this Section 1.2 or pursuant to the Site Selection Addendum, does not constitute our assurance, representation, or warranty of any kind that your Franchised Business at the Approved Location will be profitable or successful (as further described in Section 5 of the Site Selection Addendum). 1.2.3 You agree not to relocate the Franchised Business without our prior written consent. Any proposed relocation will be subject to our review of the proposed new site under our then-current standards for site selection, and we will also have the right to take into consideration any commitments we have given to other franchisees, licensees, landlords, and other parties relating to the proximity of a new Goosehead Business to their establishment. You must pay us a fee in the amount of Five Hundred Dollars ($500) at the time you request the relocation of the Franchised Business. 1.3 No Protected Territory. You expressly acknowledge and agree that this franchise is non-exclusive, and that this Agreement does not grant or imply any protected area or territory for the Franchised Business. Accordingly, we retain the right to conduct any business and sell + +Page 2 of 80 + + + + + +services and products at any location, notwithstanding the proximity of that business activity to the Approved Location. We retain all rights, including but not limited to: (a) the right to use, and to license others to use, the System and the Proprietary Marks for the operation of Goosehead Businesses at any location; (b) the right to sell, and to license others to sell, products and services (including Services) that are also authorized for sale at Goosehead Businesses through other channels of distribution (including, but not limited to, through catalogs, mail order, toll free numbers, sales via Internet websites, and other forms of electronic commerce); (c) the right to acquire and operate businesses of any kind and to grant or franchise the right to others to operate other businesses of any kind, no matter where located; and (d) the right to use and license the use of the Proprietary Marks and other marks in connection with the operation of businesses at any location, which businesses and marks may be the same as, similar to, or different from the Franchised Business and the Proprietary Marks, on such terms and conditions as we deem advisable, and without granting you any rights therein. 1.4 Limits on Where You May Operate. 1.4.1 You may offer and sell Services only: (a) in accordance with the requirements of this Agreement and the procedures set out in the Manual (defined below); and (b) to customers of the Franchised Business. 1.4.2 You agree not to offer or sell any services or products (including the Services and Products) through any means other than through the Franchised Business as provided in this Section 1.4; and therefore, for example, you agree not to offer or sell services or products from satellite locations, temporary locations, mobile vehicles or formats, carts or kiosks. Unless you become licensed in another state and receive prior written approval from us to offer insurance policies in that state, you may only provide and deliver Services to customers located within the State in which the Approved Location is situated. 2 TERM AND RENEWAL 2.1 Term. The term of this Agreement starts on the Effective Date and, unless this Agreement is earlier terminated in accordance with its provisions, will expire ten (10) years from the Effective Date. 2.2 Renewal. You will have the right to renew your rights to operate the Franchise Business for two (2) additional successor terms of five (5) years, so long as you have satisfied all of the conditions specified in Sections 2.2.1 through 2.2.10 before each such renewal: 2.2.1 You agree to give us written notice of your choice to renew at least six (6) months before the end of the term of this Agreement (but not more than nine (9) months before the term expires). 2.2.2 You agree to remodel and refurbish the Franchised Business to comply with our then-current standards in effect for new Goosehead Businesses (as well as the provisions of Sections 8.9 and 8.10 below). 2.2.3 At the time of renewal, you must be in material compliance with the provisions of this Agreement (including any amendment to this Agreement), any successor to this Agreement, and/or any other contract between you (and your affiliates) and us (and our affiliates), and in our reasonable judgment, you must have been in material compliance during the term of this Agreement, even if we did not issue a notice of + +Page 3 of 80 + + + + + +default or exercise our right to terminate this Agreement if you did not meet your obligations. 2.2.4 You must have timely met all of your financial obligations to us, our affiliates, the Brand Fund, and/or the Regional Fund, as well as your vendors, throughout the term of this Agreement (even if we did not issue a notice of default or exercise our right to terminate this Agreement if you did not meet your obligations). 2.2.5 You must sign our then-current form of franchise agreement, which will supersede this Agreement in all respects (except with respect to the renewal provisions of the new franchise agreement, which will not supersede this Section 2), and which you acknowledge and agree may contain terms, conditions, obligations, rights, and other provisions that are substantially and materially different from those spelled out in this Agreement (including, for example, a higher percentage royalty fee and marketing contribution). If you are an entity, then your direct and indirect owners must also sign and deliver to us a personal guarantee of your obligations under the renewal form of franchise agreement. (In this Agreement, the term "entity" includes a corporation, limited liability company, partnership, and a limited liability partnership.) 2.2.6 You agree to sign and deliver to us a release, in a form that we will provide (which will be a mutual release with limited exclusions), which will release all claims against us and our affiliates, and our respective officers, directors, members, managers, agents, and employees. If you are an entity, then your affiliates and your direct and indirect owners (and any other parties that we reasonably request) must also sign and deliver that release to us. 2.2.7 You and your personnel must meet our then-current qualification and training requirements. 2.2.8 You agree to present to us satisfactory evidence that you have the right to remain in possession of the Approved Location for the duration of the renewal term of this Agreement. 2.2.9 You must be current with respect to your financial and other obligations to your lessor, suppliers, and all other parties with whom you do business. 3 OUR DUTIES 3.1 Training. We will provide you with the training specified in Section 6 below. 3.2 Layout and Equipping of a Goosehead Business. We have the right to provide our standards and specifications for the layout and design of a Goosehead Business, including specifications for the exterior and interior design and layout, fixtures, furnishings, equipment, and signs. We have the right to periodically modify the layout and specifications as we deem appropriate. We will also provide the site selection and lease review assistance called for under Section 5.3 below. 3.3 Opening and Additional Assistance. We will provide such on-site pre-opening and opening supervision and assistance that we think is advisable, and as may be described in the Manual. 3.4 Manual. We will lend to you one (1) copy of (or provide you with access to), during the term of this Agreement, our confidential operations manuals and other written instructions relating + +Page 4 of 80 + + + + + +to the operation of a Goosehead Business (the "Manual"), in the manner and as described in Section 10 below. 3.5 Marketing Materials. We have the right to approve or disapprove all marketing and promotional materials that you propose to use, pursuant to Section 13 below. 3.6 Brand Fund. We will administer the Brand Fund (as defined in Section 13 below) in the manner set forth in Section 13 below. 3.7 Inspection Before Opening. We may evaluate the Franchised Business before it first opens for business. You agree to not open the Franchised Business or otherwise start operations until you or your Manager (defined below) have successfully completed training and you have received our prior written approval. 3.8 Periodic Assistance. We will provide you periodic assistance in the marketing, management, and operation of the Franchised Business at the times and in the manner that we determine. We may periodically offer you the services of certain of our representatives, such as a representative from agency support, and these representatives may periodically visit your Franchised Business and offer advice regarding your operations. 3.9 Revenue Report. On the 25th day of each month, we will provide you with a detailed report of Commissions (as defined below) and Agency Fees (as defined below) received on your behalf for insurance policies written in the preceding calendar months. In order to provide you with this report, we must receive a commission detail report from the carrier by the 20th day of the month, for policies you wrote during the preceding month. The report will only include Commissions and Agency Fees related to policies properly recorded in our agency management system as prescribed in the Manual. 3.10 Call Center. We will maintain a call center, staffed by licensed insurance agents, for the purpose of providing centralized customer service for all businesses operating under the System and the Proprietary Marks. The call center's hours will be at least between 8 a.m. and 5 p.m. Central Time, Monday through Friday (excluding holidays). You must comply with any rules and regulations adopted by us (in the Manual or otherwise) regarding the call center. 3.11 Services Performed. You acknowledge and agree that any of our designees, employees, agents, or independent contractors (such as an "area developer") may perform any duty or obligation imposed on us by the Agreement, as we may direct (if so, we will, nonetheless, remain responsible to you for the performance of these obligations). 3.12 Our Decision-Making. In fulfilling our obligations under this Agreement, and in conducting any activities or exercising our rights pursuant to this Agreement, we (and our affiliates) will always have the right: (a) to take into account, as we see fit, the effect on, and the interests of, other franchised and company-owned or affiliated businesses and systems; (b) to share market and product research, and other proprietary and non- proprietary business information, with other franchised businesses and systems in which we (or our affiliates) have an interest, and/or with our affiliates; (c) to test market various items in some or all parts of the System; (d) to introduce new proprietary items and non-proprietary items; and/or (e) to allocate resources and new developments between and among systems, and/or our affiliates, as we see fit. You understand and agree that all of our obligations under this Agreement are subject to this Section, and that nothing in this Section will in any way affect your obligations under this Agreement. + +Page 5 of 80 + + + + + +3.13 Confirmation of Performance. After we have performed our pre-opening obligations to you under this Agreement, we may ask that you execute and deliver to us a confirmation (the "Confirmation of Performance"), in a form we reasonably request, confirming that we have performed those obligations. If we ask you to provide us with such a certificate, you agree to execute and deliver the Confirmation of Performance to us within three (3) business days after our request. However, if you do not reasonably believe that we have performed all of our pre-opening obligations, you must, within that same three (3) day period, provide us with written notice specifically describing the obligations that we have not performed. Not later than three (3) business days after we complete all the obligations that you specified in that notice, you agree to execute and deliver the Confirmation of Performance to us. You agree to do so even if we performed such obligations after the time performance was due under this Agreement. The term "pre-opening obligations" means the obligations we have to you under this Agreement that must be performed before the date when your Franchised Business starts its operations. 4 FEES; SALES REPORTING 4.1 Initial Franchise Fee. You agree to pay us an initial franchise fee in the amount set out in the Declarations Page attached as Exhibit A (the "Initial Franchise Fee"). The Initial Franchise Fee is not refundable in consideration of administrative and other expenses that we incur in providing you with training, carrier appointments, and pre-opening assistance as part of the initial launch of the Franchised Business. At your election, the Initial Franchise Fee is due and payable to us in one of the following ways: 4.1.1 You may pay to us the Initial Franchise Fee, in full, on the day that you sign this Agreement; or 4.1.2 You may elect to pay to us a portion of the Initial Franchise Fee on the day that you sign this Agreement in the amount set out in the Declarations Page attached as Exhibit A, and to pay to us the remaining portion of the Initial Franchise Fee, with interest, pursuant to the terms and conditions of the promissory note attached to this Agreement as Exhibit I (the "Promissory Note"). You acknowledge and agree that any default under the terms of the Promissory Note, including a failure to make any payments to us under the Promissory Note, shall be a default under this Agreement. 4.2 Royalty Fee. We will receive all Commissions (defined below) from insurance carriers. We will receive all Premiums (defined below), Policy Fees (defined below) and Agency Fees on your behalf. If the event that any Premiums, Policy Fees, or Agency Fees are received directly by you, these funds must be forwarded to us within twenty four (24) hours of receipt. We will retain Agency Fees and will forward Premiums and Policy Fees to the insurance carriers. Beginning on the date you begin operations under this Agreement, which is agreed to be the date set out in the Declarations Page (the "Commencement Date"), we will remit to you Net Revenues on a monthly basis. As used in this Agreement: 4.2.1 the term "Agency Fees" will mean fees that are charged by you for issuing a new policy pursuant to the Manual. 4.2.2 the term "Commission" will mean the total fees paid in cash to us, by insurance carriers as a percentage of the Premiums generated by insurance policies sold by the Franchised Business, on all new and renewal policies. 4.2.3 the term "Gross Revenues" means the amount of Commissions and Agency Fees received in cash, net of reversals of Commissions for policy cancellations or policy + +Page 6 of 80 + + + + + +changes and net of Agency Fee refunds, for insurance services provided by the Franchised Business; Gross Revenues will not include any Premiums or Policy Fees collected by the Franchised Business on behalf of any insurance carrier. 4.2.4 The term "Minimum Royalty" means a minimum monthly Royalty Fee payment, beginning six (6) months after the Commencement Date, in the following amounts: Number of Months following the Commencement Date Amount of Monthly Minimum Royalty + +Six (6) to Eighteen (18) Six Hundred Dollars ($600) Nineteen (19) and for the remainder of the term of this Agreement One Thousand Dollars ($1,000) + +4.2.5 the term "Month" means a calendar month or such other four (4) to five (5) week period that we may designate (provided that there will not be more than 13 "Months" during any year); and 4.2.6 the term "Net Revenues" means Gross Revenues net of all amounts due to us under this Agreement, including, without limitation, Royalty Fees, Marketing Contributions (if applicable), Technology Fees, and payments due to us under the Promissory Note (if applicable). 4.2.7 the term "Premiums" will mean fees that are paid to the insurance carrier for insurance coverage. 4.2.8 the term "Policy Fees" will mean fees to be paid to the insurance carrier for the issuance of a policy. 4.2.9 the term "Royalty Fee" is charged in consideration of you and your Managers' and Producers' use of our business processes, ongoing carrier relationships, trade secrets, know-how, trade names, trademarks, service marks, logos, emblems, trade dress, intellectual property, and back office support functions. The Royalty Fee will be the following amounts: (a) the greater of (i) twenty percent (20%) of Gross Revenues on insurance policies in their initial term, or (ii) the Minimum Royalty (defined below); and (b) fifty percent (50%) of Gross Revenues on policies in their renewal terms and policies written for existing customers on the same risk profile within a one-year period of the cancellation of their existing policy (also known as "re-writes"). 4.2.10 The "Technology Fee" will be an amount necessary to reimburse us for our costs of providing Required Software (defined in Section 14 below) to you. The Technology Fee may vary during the term of this Agreement, and we have the right to adjust the amount of the Technology Fee to account for our increased or decreased costs, separate from the Index. 4.3 Monthly Accounting. Once a Month, the insurance carriers will send a commission report and Commissions earned by you, to us. On the 25th day of each Month, unless this Agreement has been terminated for any reason, we will pay to you the Net Revenues for all policies identified in a commission detail report that we receive from the insurance carrier. Please + +Page 7 of 80 + + + + + +note that we expect each insurance carrier to submit commission detail reports on a Monthly basis for all policies written during the preceding Month by no later than the 20th day of the subsequent Month. But, if a carrier does not provide us with a commission detail report (and the applicable Commission) by the 20th day of the Month, or if a policy is not identified in the commission detail report we receive, you will not receive the Gross Revenues for those policies until the insurance carrier provides us with the appropriate report and/or Commissions. We may delay or withhold payment of Net Revenues — on a policy by policy basis — for any policy for which you fail to observe the risk management procedures we prescribe in the Manual, including that you obtain a signed application from the customer and provide all required documentation. If we review your accounting and client records (as described in Section 12 below) and find that you have not forwarded to us any Premiums, Policy Fees and/or Agency Fees that you collect, we may pay the appropriate Premiums and Policy Fees to the insurance carrier. You will be responsible for reimbursing us for those amounts and the applicable Agency Fees, in addition to paying a fee to us to cover our reasonable expenses in processing those payments and interest on those amounts, at the rate of two percent (2%) per Month, or if less, the maximum rate permitted by law. Entitlement to such interest will be in addition to any other remedies we may have. 4.3.1 You agree to deliver to us all of the reports, statements, and/or other information that is required under Section 12 below, at the time and in the format that we reasonably request. 4.3.2 You agree to establish an arrangement for electronic funds transfer to us, or electronic deposit to us of any payments required under this Agreement. Among other things, to implement this point, you agree to sign and return to us our current form of "ACH—Authorization Agreement for Prearranged Payments (Direct Debits)," a copy of which is attached to this Agreement as Exhibit D (and any replacements for that form that we deem to be periodically needed to implement this Section 4.3.2), and you agree to; (a) comply with the payment and reporting procedures that we may specify in the Manual or otherwise in writing; and (b) maintain an adequate balance in your bank account at all times to pay by electronic means the charges that you owe under this Agreement. If we elect to use ACH withdrawal to sweep payment of fees, then you will not be required to submit a separate payment to us unless you do not maintain sufficient funds to pay the full amount due. 4.3.3 You acknowledge and agree that your obligations to make full and timely payment of Royalty Fees and Marketing Contributions (and all other sums due to us) are absolute, unconditional, fully-earned (by us), and due when you are open and in operation. 4.3.4 You agree that you will not, for any reason, delay or withhold the payment of any amount due to us under this Agreement; put into escrow any payment due to us; set-off payments due to us against any claims or alleged claims that you may allege against us, the Brand Fund, a Regional Fund, affiliates, suppliers, or others. We reserve the right to apply any monies received from you to any of your obligations as we determine and to withhold payment of any monies if this Agreement has been terminated for any reason. You acknowledge and agree that we have the right to set-off as part of Net Revenues any amounts you owe to us. 4.3.5 You agree that if you do not provide us, as requested, with access to your computer system to obtain sales information or, if we require pursuant to Section 12.1.4 below or otherwise, printed and signed sales reports, then we will have the right to impute your sales for any period using (among other things) your sales figures from any + +Page 8 of 80 + + + + + +Month(s) that we choose (which may be those with your highest grossing sales), and that you agree to pay the royalties on that amount (whether by check or by our deduction of that amount from your direct debit account). 4.3.6 You agree that you will not, whether on grounds of alleged non-performance by us or others, withhold payment of any fee, including, without limitation, Royalty Fees or Marketing Contributions, nor withhold or delay submission of any reports due under this Agreement. 4.4 No Subordination. You agree: (a) not to subordinate to any other obligation your obligation to pay us the Royalty Fee and/or any other amount payable to us, whether under this Agreement or otherwise; and (b) that any such subordination commitment that you may give without our prior written consent will be null and void. 4.5 Late Payment. If we do not (or an applicable marketing fund does not) receive any payment due under this Agreement on or before the due date, then that amount will be deemed overdue. If any payment is overdue, then you agree to pay us, in addition to the overdue amount, interest on the overdue amount from the date it was due until paid, at the rate of eighteen percent (18%) per annum (but not more than the maximum rate permitted by law, if any such maximum rate applies). Our entitlement to such interest will be in addition to any other remedies we may have. Any report that we do not receive on or before the due date will also be deemed overdue. 4.6 Other Funds Due. You agree to pay us, within ten (10) days of our written request (which is accompanied by reasonable substantiating material), any amounts that we have paid, that we have become obligated to pay, and/or that we choose to pay on your behalf. 4.7 Index. We have the right to adjust, for inflation, all fixed-dollar amounts under this Agreement (except for the Initial Franchise Fee) once a year to reflect changes in the Index from the year in which you signed this Agreement. For the purpose of this Section 4.8, the term "Index" means the Consumer Price Index (1982- 84=100; all items; CPI-U; all urban consumers) as published by the U.S. Bureau of Labor Statistics ("BLS"). If the BLS no longer publishes the Index, then we will have the right to designate a reasonable alternative measure of inflation. 5 FRANCHISED BUSINESS LOCATION, CONSTRUCTION AND RENOVATION 5.1 Opening Deadline. You are responsible for purchasing, leasing, or subleasing a suitable site for the Franchised Business. You agree to establish the Franchised Business and have it open and in operation within six (6) months after the Effective Date of this Agreement. Time is of the essence. 5.2 Site for the Franchised Business. As provided in Section 1.2 above, if you do not have (and we have not approved in writing) a location for the Franchised Business as of the Effective Date, then you must find and obtain the right to occupy (by lease, sublease, or acquisition of the property) premises that we find acceptable to serve as your Franchised Business, all in accordance with the Site Selection Addendum. 5.3 Our Review and Your Responsibilities. Any reviews that we conduct under this Section 5 and the Site Selection Addendum (if applicable) are for our benefit only. In addition: + +Page 9 of 80 + + + + + +5.3.1 You acknowledge and agree that our review and approval of a site, lease, sublease, design plans or renovation plans for the Franchised Business does not constitute a recommendation, endorsement, or guarantee of the suitability of that location or the terms of the lease, or sublease, or purchase agreement. 5.3.2 You agree to take all steps necessary to determine for yourself whether a particular location and the terms of any lease, sublease, or purchase agreement for the site are beneficial and acceptable to you. Additionally, no matter to what extent (if any) that we participate in any lease or purchase negotiations, discussions with the landlords or property owners, and/or otherwise in connection with reviewing the lease or purchase agreement, you have to make the final decision as to whether or not the proposed contract is sensible for your business, and the final decision as to whether or not to sign the lease or purchase agreement is yours, and we will not be responsible for the terms and conditions of your lease or purchase agreement. 5.3.3 You acknowledge and agree that: (a) any standard layout and plans that we provide to you, as well as any review and comments that we provide to the plans that you develop for your Franchised Business, are not meant to address the requirements of any Operating Codes (as defined in Section 8.7 below); (b) our standard plans or comments to your modified plans, will not reflect the requirements of, nor may they be used for, construction drawings or other documentation that you will need in order to obtain permits or authorization to build a specific Franchised Business; (c) you will be solely responsible to comply with all local laws, requirements, architectural needs, and similar design and construction obligations associated with the site, at your expense; and (d) our review, comment, and approval of your plans will be limited to reviewing those plans to assess compliance with our standards (including issues such as trade dress, presentation of Proprietary Marks, and the provision to the potential customer of certain products and services that are central to the purpose, atmosphere, and functioning of Goosehead Businesses). 5.3.4 We will not review nor may our approval be deemed to address whether or not you have complied with any of the Operating Codes, including provisions of the Americans with Disabilities Act (the "ADA"); and you acknowledge and agree that compliance with such laws is and will be your sole responsibility. 5.4 Lease Review. You agree to provide us with a copy of the proposed lease, sublease, or purchase agreement for the Approved Location, and you agree not to enter into that lease, sublease, or purchase agreement until you have received our written approval. We have the right to condition our approval of the lease, sublease, or purchase agreement upon the inclusion of terms that we find acceptable and that are consistent with our rights and your responsibilities under this Agreement, including without limitation, that you and the landlord execute a Lease Rider in the form attached to this Agreement as Exhibit H. You also agree to provide us with a copy of the fully signed lease, and lease rider before you begin construction or renovations as the Approved Location. 5.5 Preparing the Site. You agree that promptly after obtaining possession of the Approved Location, you will do all of the following things: 5.5.1 obtain all required zoning permits, all required building, utility, health, sign permits and licenses, and any other required permits and licenses; + +Page 10 of 80 + + + + + +5.5.2 purchase or lease equipment, fixtures, furniture and signs as required under this Agreement (including the specifications we have provided in writing, whether in the Manual or otherwise); 5.5.3 complete the construction and/or remodeling as described in Section 5.6 below; and 5.5.4 obtain all customary contractors' partial and final waivers of lien for construction, remodeling, decorating and installation services. 5.6 Construction or Renovation. In connection with any construction or renovation of the Franchised Business (and before you start any such construction or renovation) you agree to comply, at your expense, with all of the following requirements, which you agree to satisfy to our reasonable satisfaction: 5.6.1 You agree to employ a qualified, licensed architect or engineer to prepare architectural drawings and layout and specifications for site improvement and construction of the Franchised Business based upon our standards and specifications. 5.6.2 You agree to comply with all Operating Codes, including, without limitation, the applicable provisions of the ADA regarding the construction and design of the Franchised Business. Additionally, before opening the Franchised Business, and after any renovation, you agree to execute and deliver to us an ADA Certification in the form attached to this Agreement as Exhibit E, to certify that the Franchised Business and any proposed renovations comply with the ADA. 5.6.3 You are solely responsible for obtaining (and maintaining) all permits and certifications (including without limitation, zoning permits, licenses, construction, building, utility, health, sign permits and licenses) which may be required by state or local laws, ordinances, or regulations (or that may be necessary or advisable due to any restrictive covenants relating to your location) for the lawful construction and operation of the Franchised Business. You must certify in writing to us that all such permits and certifications have been obtained. 5.6.4 You agree to employ a qualified licensed general contractor to construct the Franchised Business and to complete all improvements. 5.6.5 You agree to obtain (and maintain) during the entire period of construction the insurance required under Section 15 below; and you agree to deliver to us such proof of such insurance as we may reasonably require. 5.7 Pre-Opening. Before opening for business, you agree to meet all of the pre-opening requirements specified in this Agreement, the Manual, and/or that we may otherwise specify in writing. 6 OPERATING PRINCIPAL, PERSONNEL, AND TRAINING 6.1 Operating Principal and Management. 6.1.1 If you are a corporation, partnership or LLC, you must have an individual owner serve as your "Operating Principal." The Operating Principal must supervise the operation of the Franchised Business and must own at least five percent (5%) of the voting and ownership interests in the franchisee entity, unless you obtain our prior + +Page 11 of 80 + + + + + +written approval for the Operating Principal to hold a smaller interest. The Operating Principal must have qualifications reasonably acceptable to us to serve in this capacity, must have authority over all business decisions related to the Franchised Business, must have the power to bind you in all dealings with us, and must have signed and delivered to us the Guarantee, Indemnification, and Acknowledgement attached to this Agreement as Exhibit B. You may not change the Operating Principal without our prior written approval. 6.1.2 You must inform us in writing whether the Operating Principal will assume full-time responsibility for the daily supervision and operation of the Franchised Business. If the Operating Principal will not supervise the Franchised Business on a full-time and daily basis, you must employ a full-time Franchised Business manager (a "Manager") with qualifications reasonably acceptable to us, who will assume responsibility for the daily operation of the Franchised Business. 6.1.3 The Franchised Business must at all times be under the active full-time management of either you or the Operating Principal or Manager who has successfully completed (to our satisfaction) our initial training program. 6.2 Initial Management and Employee Training. 6.2.1 Before opening your Franchised Business, you (or if you are an entity, your Operating Principal) and your Manager (if you will employ a Manager) must attend and successfully complete, to our satisfaction, the initial training program we offer for Goosehead Business franchisees at our headquarters or another location that we specify. 6.2.2 All of your employees who are licensed to sell insurance ("Producers") must also attend and complete to our satisfaction, our Producer training program before any Producer is permitted to sell insurance for the Franchised Business or access our database or systems. 6.3 Additional Obligations and Terms Regarding Training. 6.3.1 If you (or your Operating Principal) or your Manager cease active management or employment at the Franchised Business, then you agree to enroll a qualified replacement (who must be reasonably acceptable to us to serve in that capacity) in our initial training program within thirty (30) days after the former individual ended his/her full time employment and/or management responsibilities. The replacement must attend and successfully complete the basic management training program, to our reasonable satisfaction, as soon as it is practical to do so (in all cases, the replacement shall successfully complete training within 120 days). You must pay our then-current per diem training charges for replacement training. 6.3.2 We may require that your Operating Principal, Managers, Producers and employees attend such additional courses, seminars, and other training programs as we may reasonably periodically require. 6.3.3 Your Operating Principal, and all of your trainees, Managers, and Producers must sign and deliver to us a personal covenant of confidentiality, an in-term non-competition agreement, and a post-term non-competition agreement in substantially the form of Exhibit F to this Agreement. + +Page 12 of 80 + + + + + +6.3.4 Training Costs and Expenses. 6.3.4.1 The Initial Franchise Fee will cover the cost of providing the instruction and required materials, except as otherwise provided in Sections 6.3.1 and 6.5 of this Agreement. 6.3.4.2 You will be responsible for all travel, fees, lodging and living expenses, including meals, for you, your Manager(s) or employees, which are incurred in connection with initial and additional training. In addition, except for the initial management training for you and your Manager and any Producer you wish to have trained prior to commencing business under this Agreement, we may charge you our then-current per diem training charges, and/or require a deposit, for any other training that we provide. 6.3.4.3 You also agree to cover all of your employees at all times (including the pre-opening period, and including those attending training) under the insurance policies required in Section 15 below. 6.3.4.4 We have the right to reduce the duration or content of the training program for any trainee who has prior experience with our System or in similar businesses. 6.4 Conventions and Meetings. You agree to attend the conventions and meetings that we may periodically require and to pay a reasonable fee (if we charge a fee) for each person who is required to attend (and, if applicable, additional attendees that you choose to send as well). You will also be responsible for all of the other costs of attendance, including travel, room and board, and your employees' wages, benefits and other expenses. 7 PURCHASE OF PRODUCTS AND SERVICES + +While your Franchised Business will focus principally on the provision of Services, you may also offer certain products at your Franchised Business. This Section 7 addresses those items. 7.1 Products. You agree to buy all products, equipment, furniture, supplies, materials and other products used or offered for sale at the Franchised Business only from suppliers as to whom we have given you our prior written approval (and whom we have not subsequently disapproved). In this regard, the parties further agree: 7.1.1 In determining whether we will approve any particular supplier, we will consider various factors, including: (a) whether the supplier can demonstrate, to our continuing reasonable satisfaction, the ability to meet our then-current standards and specifications for such items; (b) whether the supplier has adequate quality controls and capacity to supply your needs promptly and reliably; (c) whether approval of the supplier would enable the System, in our sole opinion, to take advantage of marketplace efficiencies; and (d) whether the supplier will sign a confidentiality agreement and a license agreement in the form that we may require (which may include a royalty fee for the right to use our Proprietary Marks and any other proprietary rights, recipes, and/or formulae). + +Page 13 of 80 + + + + + +7.1.2 For the purpose of th is Agreement, the term "supplier" includes, but is not l imited to, manufacturers, insurance carriers, distributors, resellers, and other vendors. 7.1.3 Your Franchised Business will offer for sale only such insurance products and Services that conform to our specifications and quality standards and only through insurance carriers that we make available to you through our appointment process ("Approved Products and Services"). 7.1.4 You acknowledge and agree that we have the right to appoint only one supplier for Approved Products and Services (which may be us or one of our affiliates). 7.1.5 You may be required to use and/or offer for sale any of the Approved Products and Services that we designate. 7.1.6 You must maintain at all times an inventory of Approved Products and Services related to the Franchised Business's concept sufficient in quantity, quality and variety to realize your Franchised Business's full potential. 7.1.7 With regard to insurance products offered by you, the insurance carriers will set the policy prices, and we will set the Agency Fees. 7.1.8 If you want to buy any products, services or any item from an unapproved supplier, then you must first submit a written request to us asking for our prior written approval. You agree not to buy from any such supplier unless and until we have given you our prior written consent to do so. We have the right to require that our representatives be permitted to inspect the supplier's facilities, and that samples from the supplier be delivered to us. You (or the supplier) may be required to pay a charge, not to exceed the reasonable cost of the inspection, as well as the actual cost of the test. We have the right to also require that the supplier comply with such other requirements that we have the right to designate, including payment of reasonable continuing inspection fees and administrative costs and/or other payment to us by the supplier on account of their dealings with you or other franchisees, for use of our trademarks, and for services that we may render to such suppliers. We also reserve the right, at our option, to periodically re-inspect the facilities and products of any such approved supplier and to revoke our approval if the supplier does not continue to meet any of our then-current criteria. We are not required to approve any particular supplier, nor to make available our standards, specifications, or formulas to prospective suppliers, which we have the right to deem confidential. 7.1.9 You agree we have the right to establish one or more strategic alliances or preferred vendor programs with one or more nationally or regionally-known suppliers that are willing to supply all or some Goosehead Businesses with some or all of the products and/or services that we require for use and/or sale in the development and/or operation of Goosehead Businesses, notwithstanding anything to the contrary contained in this Agreement. In this event, we may limit the number of approved suppliers with whom you may deal, designate sources that you must use for some or all Products and other products and services, and/or refuse any of your requests if we believe that this action is in the best interests of the System or the network of Goosehead Businesses. We have the right to approve or disapprove of the suppliers who may be permitted to sell products to you. Any of our affiliates that sell products to you will do so at our direction. If you are in default of this Agreement, we reserve the right to direct our affiliates not to sell products to you, or to withhold certain discounts which might otherwise be available to you. + +Page 14 of 80 + + + + + +7.1.10 You acknowledge and agree that we have the right to collect and retain all manufacturing allowances, marketing allowances, rebates, contingencies, credits, monies, payments or benefits (collectively, "Allowances") offered by suppliers to you or to us (or our affiliates) based upon your purchases of Products and other goods and services. These Allowances include those based on purchases of Products, other products, paper goods, ink, and other items (such as packaging). You assign to us or our designee all of your right, title and interest in and to any and all such Allowances and authorize us (or our designee) to collect and retain any or all such Allowances without restriction. 7.2 Prohibited Products. You acknowledge and agree that your Franchised Business will not use and/or offer for sale such products or services which we have prohibited you from using and/or selling ("Prohibited Products and Services"). Prohibited Products and Services will include selling any services or products other than personal lines property and casualty, small commercial property and casualty, and life insurance with insurance carriers that we have made available to you through our appointment process. We may periodically update the list of Prohibited Products and Services. You also acknowledge and agree that if your Franchised Business uses or sells any Prohibited Products or Services, we will have the right to immediately terminate this Agreement upon notice pursuant to Section 17.2.15 below. 7.3 Use of the Marks. You must require all marketing materials, signs, decorations, paper goods (including, without limitation, and all forms and stationery used in the Franchised Business), and other items which we may designate to bear the Proprietary Marks in the form, color, location, and manner we prescribe (and subject to our prior written approval, for example as provided in Section 13.9 below). 8 YOUR DUTIES + +In addition to all of the other duties specified in this Agreement, for the sake of brand enhancement and protection, you agree to all of the following: 8.1 Importance of Following Standards. You understand and acknowledge that every detail of the Franchised Business is important to you, to us, and to other Goosehead Business franchisees and licensees in order to develop and maintain high operating standards, to provide superior customer service to customers and participants, to increase the demand for the services and products sold, by all franchisees, and to protect and enhance the reputation and goodwill associated with our brand. 8.2 Opening. In connection with the opening of the Franchised Business: 8.2.1 You agree to conduct, at your expense, such promotional and marketing activities as we may require. 8.2.2 You agree to open the Franchised Business by the date specified in Section 5.1 above. 8.2.3 You will not open the Franchised Business until we have determined that all construction has been substantially completed, and that such construction conforms to our standards including to materials, quality of work, signage, decor, paint, and equipment, and we have given you our prior written approval to open, which we will not unreasonably withhold. + +Page 15 of 80 + + + + + +8.2.4 You agree not to open the Franchised Business until all required individuals have successfully completed all training that we require. 8.3 Staffing. 8.3.1 You agree to maintain a competent, conscientious staff in numbers sufficient to maintain the full-time operation of the Franchised Business and as necessary or appropriate for providing quality client experience according to our standards. We may provide requirements for certain positions that we may establish from time to time and which will be set forth in our Manual. 8.3.2 For the sake of efficiency and to enhance and protect our brand you and your staff must, at all times, cooperate with us and with our representatives, and conduct the operation of the business in a first-class and professional manner in terms of dealing with customers, vendors, and our staff as well. 8.3.3 Your employees must comply with such professional attire standards as we may periodically require. We may also require that you and your employees comply with personal appearance standards (including dress code, shoes, hair color, body art, piercing, sanitation and personal hygiene, foundation garments, personal displays at work stations, etc.). 8.4 Operation According to Our Standards. To insure that the highest degree of quality and service is maintained, you agree to operate your Franchised Business in strict conformity with such methods, standards, and specifications that we may periodically require in the Manual or otherwise in writing. In this regard, you agree to do all of the following: 8.4.1 You agree to maintain in sufficient supply, and to use at all times only the items, products, services, materials, and supplies that meet our written standards and specifications, and you also agree not to deviate from our standards and specifications by using or offering any non-conforming items without our specific prior written consent. 8.4.2 You agree: (a) to sell or offer for sale only those Approved Products and Services and items using the standards and techniques that we have approved in writing for you to offer and use at your Franchised Business; (b) to sell or offer for sale all Approved Products and Services and items using the standards and techniques that we specify in writing; (c) not to deviate from our standards and specifications; (d) to stop using and offering for use any Services or products that we at any time disapprove in writing (recognizing that we have the right to do so at any time); and (e) that if you propose to deviate (or if you do deviate) from our standards and specifications, whether or not we have approved the deviation, that deviation will become our property. 8.4.3 You agree to buy and install, at your expense, all fixtures, furnishings, equipment, decor, and signs as we may specify, and to periodically make upgrades and other changes to such items at your expense as we may reasonably request in writing. Without limiting the above, you acknowledge and agree that changes in our System standard may require you to purchase new and/or additional equipment for use in the Franchised Business. 8.4.4 You agree not to install or permit to be installed on or about the premises of the Franchised Business, without our prior written consent, any fixtures, furnishings, + +Page 16 of 80 + + + + + +equipment, machines, décor, signs, or other items that we have not previously in writing approved as meeting our standards and specifications. 8.4.5 You agree to immediately suspend operation of (and close) the Franchised Business if: (a) any products or services sold at the Franchised Business deviate from our standards; and/or (b) you fail to maintain the Franchised Business premises, personnel, or operation of the Franchised Business in accordance with this Agreement, the Manual, or any applicable law or regulations. In the event of such closing, you agree to immediately notify us, in writing, and also remedy the unsafe, or other condition or other violation of the applicable law or regulation. You agree not to reopen the Franchised Business until after we have determined that you have corrected the condition. 8.4.6 You agree to immediately notify us in writing if you or any of your Principals, Managers, or Producers are convicted of a felony, a crime involving moral turpitude, or any other crime or offense that is likely to have an adverse effect on the System, the Proprietary Marks, your insurance license or the insurance license of any of your employees, the goodwill associated therewith, or our interest therein. 8.5 Use of the Approved Location Premises. You may only use the Approved Location for the purpose of operating the Franchised Business and for no other purpose. You agree not to co-brand or permit any other business to operate at the Approved Location without our written consent. 8.6 Hours and Days of Operation. You agree to keep the Franchised Business open and in normal operation for such hours and days as we may periodically specify in the Manual or as we may otherwise approve in writing. 8.7 Operating Codes. You agree to fully and faithfully comply with all Operating Codes applicable to your Franchised Business. You will have the sole responsibility to fully and faithfully comply with any Operating Codes, and we will not review whether you are in compliance with any Operating Codes. The term "Operating Codes" means applicable federal, state, and local laws, codes, ordinances, and/or regulations that apply to the Services, products, construction and design of the Franchised Business and other aspects of operating the Franchised Business, including the ADA. You must furnish to us, within three (3) days of your receipt, a copy of all inspection reports, warnings, citations, certificates, and/or ratings resulting from inspections conducted by any federal, state or municipal agency with jurisdiction over the Franchised Business. You must also obtain and maintain during the term of this Agreement all licenses and approvals from any governmental or regulatory agency required for the operation of the Franchised Business or provision of the Services you will offer, sell, and provide. Where required, you must obtain the approval of any regulatory authority with jurisdiction over the operation of your Franchised Business. You acknowledge that we will have no liability to you or any regulatory authority for any failure by you to obtain or maintain during the term of this Agreement any necessary licenses or approvals required for the operation of the Franchised Business. 8.8 Your Franchised Business: 8.8.1 Franchised Business Condition, Maintenance. You agree that at all times, you will maintain the Franchised Business in a high degree of repair and condition. In addition, you agree to make such repairs and replacements to the Franchised Business as may be required for that purpose (but no others without our prior + +Page 17 of 80 + + + + + +written consent), including the periodic repainting or replacement of obsolete signs, furnishings, equipment, and decor that we may reasonably require. Your maintenance and upkeep obligations under this Section 8.8.1 are separate from those with respect to periodic upgrades that we may require regarding fixtures, furnishings, equipment, decor, and signs, and Section 8.8.2 below with respect to Remodeling. 8.8.2 Remodeling. In addition to the maintenance and upkeep obligations requirements under Section 8.8.1 above, you agree to refurbish the Franchised Business at your expense to conform to our then-current building design, exterior facade, trade dress, signage, furnishings, decor, color schemes, and presentation of the Proprietary Marks in a manner consistent with the then-current image for new Goosehead Businesses, including remodeling, redecoration, and modifications to existing improvements, all of which we may require in writing (collectively, "Remodeling"). In this regard, the parties agree that: 8.8.2.1 You will not have to conduct a Remodeling more than once every five (5) years during the term of this Agreement (and not in an economically unreasonable amount); provided, however, that we may require Remodeling more often if Remodeling is required as a pre- condition to renewal (as described in Section 2.2.2 above); and 8.8.2.2 You will have six (6) months after you receive our written notice within which to complete Remodeling. 8.9 Use of the Marks. You will require all marketing and promotional materials, signs, decorations, merchandise, any and all replacement trade dress products, and other items that we may designate to bear our then- current Proprietary Marks and logos in the form, color, location, and manner that we have then-prescribed. 8.10 If You Are an Entity: 8.10.1 Corporate Franchisee. If you are a corporation, then you agree to: (a) confine your activities, and your governing documents will at all times provide that your activities are confined, exclusively to operating the Franchised Business; (b) maintain stop transfer instructions on your records against the transfer of any equity securities and will only issue securities upon the face of which a legend, in a form satisfactory to us, appears which references the transfer restrictions imposed by this Agreement; (c) not issue any voting securities or securities convertible into voting securities; and (d) maintain a current list of all owners of record and all beneficial owners of any class of voting stock of your company and furnish the list to us upon request. 8.10.2 Partnership/LLP Franchisee. If you are a partnership or a limited liability partnership (LLP), then you agree to: (a) confine your activities, and your governing documents will at all times provide that your activities are confined, exclusively to operating the Franchised Business; (b) furnish us with a copy of your partnership agreement as well as such other documents as we may reasonably request, and any amendments thereto; (c) prepare and furnish to us, upon request, a current list of all of your general and limited partners; and (d) consistent with the transfer restrictions set out in this Agreement, maintain instructions against the transfer of any partnership interests without our prior written approval. + +Page 18 of 80 + + + + + +8.10.3 LLC Franchisee. If you are a limited liability company (LLC), then you agree to: (a) confine your activities, and your governing documents will at all times provide that your activities are confined, exclusively to operating the Franchised Business; (b) furnish us with a copy of your articles of organization and operating agreement, as well as such other documents as we may reasonably request, and any amendments thereto; (c) prepare and furnish to us, upon request, a current list of all members and managers in your LLC; and (d) maintain stop transfer instructions on your records against the transfer of equity securities and will only issue securities upon the face of which bear a legend, in a form satisfactory to us, which references the transfer restrictions imposed by this Agreement. 8.10.4 Guarantees. You agree to obtain, and deliver to us, a guarantee of your performance under this Agreement and covenant concerning confidentiality and competition, in the form attached as Exhibit B, from each current and future direct and indirect: (a) shareholder of a corporate Franchisee; (b) member of a limited liability company Franchisee; (c) partner of a partnership Franchisee; and/or (d) partner of a limited liability partnership Franchisee. 8.11 Quality-Control and Customer Survey Programs. We may periodically designate an independent evaluation service to conduct a "mystery shopper," "customer survey," and/or similar quality-control and evaluation programs with respect to Goosehead Businesses. You agree to participate in such programs as we require, and promptly pay the then-current charges of the evaluation service. If you receive an unsatisfactory or failing report in connection with any such program, then you agree to: (a) immediately implement any remedial actions we require; and (b) reimburse us for the expenses we incur as a result thereof (including the cost of having the evaluation service re-evaluate the Franchised Business, our inspections of the Franchised Business, and other costs or incidental expenses). 8.12 Prices. You agree that we may set reasonable restrictions on the maximum and minimum prices you may charge for the Approved Products and Services offered and sold at the Franchised Business under this Agreement. Subject to the terms of Section 7.1.7 above, you will have the right to set the prices that you will charge to your customers; provided, however, that (subject to applicable law): (a) if we have set a maximum price for a particular item, then you may charge any price for that item up to and including the maximum price we have set; and (b) if we have set a minimum price for a particular item, then you may charge any price for that item that is equal to or above the minimum price we have set. 8.13 Environmental Matters. We are committed to working to attain optimal performance of Goosehead Businesses with respect to environmental, sustainability, and energy performance. We each recognize and agree that there are changing standards in this area in terms of applicable law, competitors' actions, consumer expectations, obtaining a market advantage, available and affordable solutions, and other relevant considerations. In view of those and other considerations, as well as the long-term nature of this Agreement, you agree that we have the right to periodically set reasonable standards with respect to environmental, sustainability, and energy for the System through the Manual, and you agree to abide by those standards. 8.14 Innovations. You agree to disclose to us all ideas, concepts, methods, techniques and products conceived or developed by you, your affiliates, owners and/or employees during the term of this Agreement relating to the development and/or operation of the Goosehead Businesses. All such products, services, concepts, methods, techniques, and new information will be deemed to be our sole and exclusive property and works made-for- hire for + +Page 19 of 80 + + + + + +us. You hereby grant to us (and agree to obtain from your affiliates, owners, employees, and/or contractors), a perpetual, non-exclusive, and worldwide right to use any such ideas, concepts, methods, techniques and products in any businesses that we and/or our affiliates, franchisees and designees operate. We will have the right to use those ideas, concepts, methods, techniques, and/or products without making payment to you. You agree not to use or allow any other person or entity to use any such concept, method, technique or product without obtaining our prior written approval. 8.15 Performance Standards. You recognize that your active development of the Franchised Business is important to the effective development of the System and that we have entered into this Agreement in reliance upon your express obligation to actively implement the System. Therefore, you acknowledge and agree that, beginning six (6) months after the Commencement Date, and after notice to you, we will have the right to identify and implement quantitative operational performance standards (for example, the number of insurance policies written in a specific line of business or in the aggregate) upon which your development and active implementation of the System will be evaluated. If your performance under such standards fails to meet or exceed the performance of the lowest twenty-five percent (25%) of all franchised Goosehead Businesses operating under the System, as we determine, in any one (1) fiscal quarter of any fiscal year, we may elect to: (a) require you and such other of your employees, as we determine, to attend and complete to our satisfaction such additional training programs that we deem necessary; or (b) provide such on-site assistance and consultation as we deem necessary. In the event we provide any such additional training, assistance or consultation, you will be responsible for all costs and expenses for that training assistance or consultation, which may include a fee payable to us. If you fail to improve your performance under such standards by at least ten percent (10%), and fail to meet or exceed the performance of the lowest twenty-five percent (25%) of all franchised Goosehead Businesses operating under the System in each subsequent fiscal quarter we may, in our discretion, place your agency in default status, which may result in termination pursuant to Section 17.3 below. 8.16 Franchisee Advisory Council. We may establish an organization to facilitate communication between us and franchisees operating under the Proprietary Marks and the System (the "Franchisee Advisory Council"). In the event that we form the Franchisee Advisory Council, you agree to fully participate in the Franchisee Advisory Council if requested by us. The Franchisee Advisory Council may be terminated or dissolved by us at any time. 9 PROPRIETARY MARKS 9.1 Our Representations. We represent to you that we own (or have an appropriate license to) all right, title, and interest in and to the Proprietary Marks, and that we have taken (and will take) all reasonably necessary actions to preserve and protect the ownership and validity in, and of, the Proprietary Marks. 9.2 Your Agreement. With respect to your use of the Proprietary Marks, you agree that: 9.2.1 You will use only the Proprietary Marks that we have designated in writing, and you will use them only in the manner we have authorized and permitted in writing; and all items bearing the Proprietary Marks must bear the then-current logo. 9.2.2 You will use the Proprietary Marks only for the operation of the business franchised under this Agreement and only at the location authorized under this Agreement, or in franchisor-approved marketing for the business conducted at or from that location (subject to the other provisions of this Agreement). + +Page 20 of 80 + + + + + +9.2.3 Unless we otherwise direct you in writing to do so, you agree to operate and advertise the Franchised Business only under the name "Goosehead Insurance" without prefix or suffix. 9.2.4 During the term of this Agreement and any renewal of this Agreement, you will identify yourself (in a manner reasonably acceptable to us) as the owner of the Franchised Business in conjunction with any use of the Proprietary Marks, including uses on invoices, order forms, receipts, and contracts, as well as the display of a notice in such content and form and at such conspicuous locations on the premises of the Franchised Business as we may designate in writing. 9.2.5 Your right to use the Proprietary Marks is limited to such uses as are authorized under this Agreement, and any unauthorized use thereof will constitute an infringement of our rights. 9.2.6 You agree not to use the Proprietary Marks to incur any obligation or indebtedness on our behalf unless expressly authorized by this Agreement (i.e. to sell Approved Products and Services). 9.2.7 You agree not to use the Proprietary Marks: 9.2.7.1 as part of your corporate or other legal name; 9.2.7.2 as part of your identification in any e-mail address, domain name, or other electronic medium (except as otherwise provided in Section 14.10.3 below); and/or 9.2.7.3 in connection with any employment or H.R. documents (including employment applications, paychecks, pay stubs, and employment agreements. 9.2.8 You agree to execute any documents that we (or our affiliates) deem necessary to obtain protection for the Proprietary Marks or to maintain their continued validity and enforceability. 9.2.9 With respect to litigation involving the Proprietary Marks, the parties agree that: 9.2.9.1 You agree to promptly notify us of any suspected infringement of the Proprietary Marks, any known challenge to the validity of the Proprietary Marks, or any known challenge to our ownership of, or your right to use, the Proprietary Marks licensed under this Agreement. You acknowledge and agree that we will have the sole right to direct and control any administrative proceeding or litigation involving the Proprietary Marks, including any settlement thereof. We will also have the sole right, but not the obligation, to take action against uses by others that may constitute infringement of the Proprietary Marks. 9.2.9.2 If you used the Proprietary Marks in accordance with this Agreement, then we will defend you at our expense against any third party claim, suit, or demand involving the Proprietary Marks arising out of your use thereof. If you used the Proprietary Marks in a manner that does not comply with this Agreement, then we will still defend you, but at your expense, against such third party claims, suits, or demands. + +Page 21 of 80 + + + + + +9.2.9.3 We agree to reimburse you for your out-of-pocket travel costs in doing such acts and things, and you will bear the salary costs of your employees, and we will bear the costs of any judgment or settlement, unless such litigation is the result of your use of the Proprietary Marks in a manner that does not comply with this Agreement. 9.2.9.4 To the extent that such litigation is the result of your use of the Proprietary Marks in a manner inconsistent with the terms of this Agreement, then you agree to reimburse us (upon our request, which may be periodic and/or upon the conclusion of the proceedings) for the cost of such litigation and/or upon our written request, pay our legal fees directly (your obligation under this Section includes reasonable attorneys' fees, court costs, discovery costs, and all other related expenses, as well as the cost of any judgment or settlement). 9.2.9.5 If we undertake the defense or prosecution of any litigation or other similar proceeding relating to the Proprietary Marks, then you agree to sign any and all documents, and do those acts and things that may, in our counsel's opinion, be necessary to carry out the defense or prosecution of that matter (including becoming a nominal party to any legal action). 9.3 Your Acknowledgements. You expressly understand and acknowledge that: 9.3.1 We own all right, title, and interest in and to the Proprietary Marks and the goodwill associated with and symbolized by them. 9.3.2 The Proprietary Marks are valid and serve to identify the System and those who are authorized to operate under the System. 9.3.3 Neither you nor any of your owners, principals, or other persons acting on your behalf will directly or indirectly contest the validity or our ownership of the Proprietary Marks, nor will you, directly or indirectly, seek to register the Proprietary Marks with any government agency (unless we have given you our express prior written consent to do so). 9.3.4 Your use of the Proprietary Marks does not give you any ownership interest or other interest in or to the Proprietary Marks, except the license granted by this Agreement. 9.3.5 Any and all goodwill arising from your use of the Proprietary Marks will inure solely and exclusively to our benefit, and upon expiration or termination of this Agreement and the license granted as part of this Agreement, there will be no monetary amount assigned as attributable to any goodwill associated with your use of our System or of our Proprietary Marks. 9.3.6 The right and license of the Proprietary Marks that we have granted to you under this Agreement is non-exclusive, and we therefore have the right, among other things: 9.3.6.1 To use the Proprietary Marks ourselves in connection with selling Services and products; 9.3.6.2 To grant other licenses for the Proprietary Marks, in addition to licenses we may have already granted to existing franchisees; and + +Page 22 of 80 + + + + + +9.3.6.3 To develop and establish other systems using the same or similar Proprietary Marks, or any other proprietary marks, and to grant licenses or franchises for those other marks without giving you any rights to those other marks. 9.4 Change to Marks. We reserve the right to substitute different Proprietary Marks for use in identifying the System and the businesses operating as part of the System if our currently owned Proprietary Marks no longer can be used, or if we determine, exercising our right to do so, that substitution of different Proprietary Marks will be beneficial to the System. In such circumstances, your right to use the substituted proprietary marks will be governed by (and pursuant to) the terms of this Agreement. 10 CONFIDENTIAL BRAND MANUALS 10.1 You Agree to Abide by the Manual. In order to protect our reputation and goodwill and to maintain high standards of operation under our Proprietary Marks, you agree to conduct your business in accordance with the written instructions that we provide, including the Manual. We will lend to you (or permit you to have access to) one (1) copy of our Manual, only for the term of this Agreement, and only for your use in connection with operating the Franchised Business during the term of this Agreement. 10.2 Format of the Manual. We will have the right to provide the Manual in any format we determine is appropriate (including paper and/or by making some or all of the Manual available to you only in electronic form, such as through an internet website or an extranet). If at any time we choose to provide the Manual electronically, you agree to immediately return to us any and all physical copies of the Manual that we have previously provided to you. 10.3 We Own the Manual. The Manual will at all times remain our sole property and you agree to promptly return the Manual when this Agreement expires or if it is terminated. 10.4 Confidentiality and Use of the Manual. 10.4.1 The Manual contains our proprietary information and you agree to keep the Manual confidential both during the term of this Agreement and after this Agreement expires and/or is terminated. You agree that, at all times, you will insure that your copy of the Manual will be available at the Franchised Business premises in a current and up-to-date manner. Whenever the Manual is not in use by authorized personnel, you agree to maintain secure access to the Manual at the premises of the Franchised Business, and you agree to grant only authorized personnel (as defined in the Manual) with access to the security protocols for the Manual. 10.4.2 You agree to never make any unauthorized use, disclosure, and/or duplication the Manual in whole or in part. 10.5 You Agree to Treat Manual as Confidential. You agree that at all times, you will treat the Manual, any other manuals that we create (or approve) for use in the operation of the Franchised Business, and the information contained in those materials, as confidential, and you also agree to use your best efforts to maintain such information as secret and confidential. You agree that you will never copy, duplicate, record, or otherwise reproduce those materials, in whole or in part, nor will you otherwise make those materials available to any unauthorized person. + +Page 23 of 80 + + + + + +10.6 Which Copy of the Manual Controls. You agree to keep your copy of the Manual only at the Franchised Business (and as provided in Section 10.4 above) and also to insure that the Manual are kept current and up to date. You also agree that if there is any dispute as to the contents of the Manual, the terms of the master copy of the Manual that we maintain in our home office will be controlling. Access to any electronic version of the Manual will also be subject to our reasonable requirements with respect to security and other matters, as described in Section 14 below. 10.7 Revisions to the Manual. We have the right to revise the contents of the Manual whenever we deem it appropriate to do so, and you agree to make corresponding revisions to your copy of the Manual and to comply with each new or changed standard. 10.8 Modifications to the System. You recognize and agree that we may periodically change or modify the System and you agree to accept and use for the purpose of this Agreement any such change in the System (which may include, among other things, new or modified trade names, service marks, trademarks or copyrighted materials, new products, new techniques, as if they were part of this Agreement at the time when you and we signed this Agreement; provided the financial burden placed upon you is not substantial). You agree to make such expenditures and such changes or modifications as we may reasonably require pursuant to this Section and otherwise in this Agreement. 11 CONFIDENTIAL INFORMATION 11.1 Confidentiality. 11.1.1 You agree that you will not, during the term of this Agreement or at any time thereafter, communicate, divulge, or use (for yourself and/or for the benefit of any other person, persons, partnership, entity, association, or corporation) any Confidential Information that may be communicated to you or of which you may be apprised by virtue of your operation under the terms of this Agreement. You agree that you will divulge our Confidential Information only to those of your employees as must have access to it in order to operate the Franchised Business. 11.1.2 Any and all information, knowledge, know-how, and techniques that we designate as confidential will be deemed Confidential Information for purposes of this Agreement, except information that you can demonstrate came to your attention before disclosure of that information by us; or which, at or after the time of our disclosure to you, had become or later becomes a part of the public domain, through publication or communication by another party that has the right to publish or communicate that information. 11.1.3 Any employee who may have access to any Confidential Information regarding the Franchised Business must execute a covenant that the employee will maintain the confidentiality of information they receive in connection with their association with you. Such covenants must be on a form that we provide, which form will, among other things, designate us as a third party beneficiary of such covenants with the independent right to enforce them. 11.1.4 As used in this Agreement, the term "Confidential Information" includes, without limitation, our business concepts and plans, operating techniques, marketing methods, processes, vendor information, results of operations and quality control information, financial information, demographic and trade area information, market penetration techniques, plans, or schedules, the Manuals, customer lists, profiles, + +Page 24 of 80 + + + + + +preferences, or statistics, itemized costs, franchisee composition, territories, and development plans, and all related trade secrets or other confidential or proprietary information treated as such by us, whether by course of conduct, by letter or report, or by the use of any appropriate proprietary stamp or legend designating such information or item to be confidential or proprietary, by any communication to such effect made prior to or at the time any Confidential Information is disclosed to you. 11.2 Consequences of Breach. You acknowledge and agree that any failure to comply with the requirements of this Section 11 will cause us irreparable injury, and you agree to pay all costs (including, without limitation, reasonable attorneys' fees, court costs, discovery costs, and all other related expenses) that we incur in obtaining specific performance of, or an injunction against violation of, the requirements of this Section 11. 12 ACCOUNTING, FINANCIAL AND OTHER RECORDS, AND INSPECTIONS 12.1 Accounting Records and Sales Reports. 12.1.1 With respect to the operation and financial condition of the Franchised Business, we will have the right to designate, and you agree to adopt, the fiscal year and interim fiscal periods that we decide are appropriate for the System. 12.1.2 With respect to the Franchised Business, you agree to maintain for at least seven (7) years during (as well as after) the term of this Agreement (and also after any termination and/or transfer), full, complete, and accurate books, records, and accounts prepared in accordance with generally accepted accounting principles and in the form and manner we have prescribed periodically in the Manual or otherwise in writing, including: (a) cash disbursements and weekly payroll journal and schedule; (b) monthly bank statements, daily deposit slips and cancelled checks; (c) all tax returns; (d) supplier's invoices (paid and unpaid); (e) semi-annual fiscal period balance sheets and fiscal period profit and loss statements; (f) operational schedules; and (g) such other records that we may periodically and reasonably request. 12.1.3 We have the right to specify the accounting software and a common chart of accounts, and, if we do so, you agree to use that software and chart of accounts (and require your bookkeeper and accountant to do so) in preparing and submitting your financial statements to us. We have the right to require you to use only an approved bookkeeping service and an approved independent certified public accountant. You agree to provide to the accounting service provider complete and accurate information that we or the accounting service provider require, and agree that we will have full access to the data and information that you provide to the accounting service provider or through the designated program. Additionally, if you fail to comply with the accounting standards and requirements under this Agreement, we may require that you use an approved independent bookkeeper and/or independent accounting firm and/or services and programs. 12.1.4 Each Month, you agree to submit to us, in the form we specify and/or utilizing our Required Software, a report for the immediately preceding Month. You agree to submit the report to us by whatever method that we reasonably require (whether electronically through your use of our Required Software or otherwise) for our receipt no later than the times required under Section 4.3 above. You agree that if do not submit those reports to us in a timely manner, we will have the right to charge you for the costs that we incur in auditing your records. + +Page 25 of 80 + + + + + +12.2 Financial Statements. 12.2.1 You agree to provide us, at your expense, and in a format that we reasonably specify, a complete set of annual financial statements prepared on a review basis by an independent certified public accountant (as to whom we do not have a reasonable objection) within ninety (90) days after the end of each fiscal year of the Franchised Business during the term of this Agreement. Your financial statement must be prepared according to generally accepted accounting principles, include a fiscal year-end balance sheet, an income statement of the Franchised Business for that fiscal year reflecting all year-end adjustments, and a statement of changes in your cash flow reflecting the results of operations of the Franchised Business during the most recently completed fiscal year. 12.2.2 In addition, no later than the twentieth (20th) day after each Month (or, if we elect, other periodic time period) during the term of this Agreement after the opening of the Franchised Business, you will submit to us, in a format acceptable to us (or, at our election, in a form that we have specified): (a) a fiscal period and fiscal year-to-date profit and loss statement and a quarterly balance sheet (which may be unaudited) for the Franchised Business; and (b) upon request, reports of those income and expense items of the Franchised Business that we periodically specify for use in any revenue, earnings, and/or cost summary we choose to furnish to prospective franchisees (provided that we will not identify to prospective franchisees the specific financial results of the Franchised Business); 12.2.3 You must certify as correct and true all reports and information that you submit to us pursuant to this Section 12.2. 12.2.4 You agree that upon our request, and for a limited period of time, you will provide us (and/or our agents, such as our auditors) with passwords and pass codes necessary for the limited purpose of accessing your computer system in order to conduct the inspections specified in this Section 12. You also agree that you will change all passwords and pass codes after the inspection is completed. 12.3 Additional Information. You also agree to submit to us (in addition to the reports required pursuant to Section 12.1.4 above), for review or auditing, such other forms, reports, records, information, and data as and when we may reasonably designate, in the form and format, and at the times and places as we may reasonably require, upon request and as specified periodically in the Manual or otherwise in writing, including: (a) information in electronic format; (b) restated in accordance with our financial reporting periods; (c) consistent with our then-current financial reporting periods and accounting practices and standards; and/or (d) a s necessary so that we can comply with reporting obligations imposed upon us by tax authorities with jurisdiction over the Franchised Business and/or our company. The reporting requirements of this Section 12.3 will be in addition to, and not in lieu of, the electronic reporting required under Section 14 below. 12.4 Our Right to Inspect Your Books and Records. We have the right at all reasonable times to examine, copy, and/or personally review or audit (at our expense) all of your sales receipts, books, records, and sales and income tax returns in person or through electronic access (at our option). We will also have the right, at any time, to have an independent audit made of your books and records. If an inspection should reveal that you have understated any payments in any report to us, then this will constitute a default under this Agreement, and you agree to immediately pay us the amount understated upon demand, in addition to interest from the date such amount was due until paid, at the rate of one and one-half + +Page 26 of 80 + + + + + +percent (1.5%) per month (but not more than the maximum rate permitted by law, if any such maximum rate applies). If we conduct an inspection because you did not timely provide sales reports to us, or if an inspection discloses that you understated your sales, in any report to us (and/or underpaid your royalties), by three percent (3%) or more, or if you did not maintain and/or provide us with access to your records, then you agree (in addition to paying us the overdue amount and interest) to reimburse us for any and all costs and expenses we incur in connection with the inspection (including travel, lodging and wages expenses, and reasonable accounting and legal costs). These remedies will be in addition to any other remedies we may have. We may exercise our rights under this Section 12 directly or by engaging outside professional advisors (for example, a CPA) to represent us. 12.5 Operational Inspections. In addition to the provisions of Section 12.5 above, you also grant to us and our agents the right to enter upon the Franchised Business premises at any reasonable time for the purpose of conducting inspections, for among other purposes, preserving the validity of the Proprietary Marks, and verifying your compliance with this Agreement and the policies and procedures outlined in the Manual. You agree to cooperate with our representatives in such inspections by rendering such assistance as they may reasonably request; and, upon notice from us or from our agents (and without limiting our other rights under this Agreement), you agree to take such steps as may be necessary to correct immediately any deficiencies detected during any such inspection. You further agree to pay us our then-current per diem fee for our representative(s) and to reimburse us for our reasonable travel expenses if additional inspections at the Franchised Business are required when a violation has occurred and you have not corrected the violation, or if you did not provide us with your records or access to your records upon reasonable request that is permitted under this Agreement. 13 MARKETING 13.1 Marketing Activities and Funds. For each Month during the term of this Agreement, you agree to contribute an amount up to two percent (2%) of Gross Revenues to be allocated in the manner described in Section 13.2 below (the "Marketing Contribution"). The Marketing Contribution is payable and/or allocated in the manner and at the times required under Section 4.3 above (and as otherwise provided in this Section 13). 13.2 Allocation and Collection. 13.2.1 We have the right to allocate your Marketing Contribution in the proportion that we designate among the following: 13.2.1.1 the Brand Fund; 13.2.1.2 local marketing, which we may allocate between: (a) any regional marketing fund established for your area (a "Regional Fund"), as provided in Section 13.4 below (but we are not required to establish a Regional Fund for your area); and (b) funds that you will spend on local marketing and promotion. 13.2.2 We have the right to periodically make changes to the allocation of the Marketing Contribution as specified in Section 13.2.1 among those funds and/or local marketing and promotion, by giving you written notice of the change, and those changes will take effect at the end of that month. + +Page 27 of 80 + + + + + +13.2.3 No part of the Marketing Contribution (whether deposited in Brand Fund or a Regional Fund or designated for local marketing and promotional expenditures) shall be subject to refund or repayment under any circumstances. 13.3 Brand Fund. We have the right (but not the obligation) to establish, maintain, and administer a System wide marketing and promotional fund (the "Brand Fund"). If we establish a Brand Fund, then the following provisions will apply to that Brand Fund: 13.3.1 We (or our designee) will have the right to direct all marketing programs, with sole discretion over the concepts, materials, and media used in such programs and the placement and allocation thereof. You agree and acknowledge that the Brand Fund is intended to maximize general public recognition, acceptance, and use of the System; and that we and our designee are not obligated, in administering the Brand Fund, to make expenditures for you that are equivalent or proportionate to your contribution, or to ensure that any particular franchisee benefits directly or pro rata from expenditures by the Brand Fund. 13.3.2 The Brand Fund, all contributions to that fund, and any of that fund's earnings, will be used exclusively to meet any and all costs of maintaining, administering, staffing, directing, conducting, preparing advertising, marketing, public relations and/or promotional programs and materials, and any other activities that we believe will enhance the image of the System (including, among other things, the costs of preparing and conducting marketing and media advertising campaigns on radio, television, cable, and other media; direct mail advertising; developing and implementing website, social networking/media, search optimization, and other electronic marketing strategies; marketing surveys and other public relations activities; employing marketing personnel (including salaries for personnel directly engaged in consumer-oriented marketing functions), advertising and/or public relations agencies to assist therein; purchasing and distributing promotional items, conducting and administering visual merchandising, point of sale, and other merchandising programs; engaging individuals as spokespersons and celebrity endorsers; purchasing creative content for local sales materials; reviewing locally-produced ads; preparing, purchasing and distributing door hangers, free-standing inserts, coupons, brochures, and trademarked apparel; market research; conducting sponsorships, sweepstakes and competitions; engaging mystery shoppers for Goosehead Businesses and their competitors; paying association dues (including the International Franchise Association), establishing third-party facilities for customizing local advertising; purchasing and installing signage; and providing promotional and other marketing materials and services to the Goosehead Businesses operated under the System). 13.3.3 You agree to make your Marketing Contribution to the Brand Fund in the manner specified in Section 4.3 above. The Brand Fund may also be used to make loans (at reasonable interest rates); and to provide rebates or reimbursements to franchisees for local expenditures on products, services, or improvements, approved in advance by us, which products, services, or improvements we deem, in our sole discretion, will promote general public awareness and favorable support for the System. All sums you pay to the Brand Fund will be maintained in an account separate from our other monies and will not be used to defray any of our expenses, except for such reasonable costs and overhead, if any, as we may incur in activities reasonably related to the direction and implementation of the Brand Fund and marketing programs for franchisees and the System. The Brand Fund and its earnings will not + +Page 28 of 80 + + + + + +otherwise inure to our benefit. We or our designee will maintain separate bookkeeping accounts for the Brand Fund. 13.3.4 The Brand Fund is not and will not be our asset. We will prepare and make available to you upon reasonable request an annual statement of the operations of the Brand Fund as shown on our books. 13.3.5 Although once established the Brand Fund is intended to be of perpetual duration, we maintain the right to terminate the Brand Fund. The Brand Fund will not be terminated, however, until all monies in the Brand Fund have been expended for marketing purposes. 13.4 Regional Fund. We have the right to designate any geographical area for purposes of establishing a Regional Fund. If a Regional Fund for the geographic area in which the Franchised Business is located has been established at the time you commence operations under this Agreement, you must immediately become a member of such Regional Fund. If a Regional Fund for the geographic area in which the Franchised Business is located is established during the term of this Agreement, you must become a member of such Regional Fund within thirty (30) days after the date on which the Regional Fund commences operation. In no event will you be required to join more than one Regional Fund. The following provisions will apply to each such Regional Fund: 13.4.1 Each Regional Fund will be organized and governed in a form and manner, and will commence operations on a date, all of which we must have approved in advance, in writing. 13.4.2 Each Regional Fund will be organized for the exclusive purpose of administering regional marketing programs and developing, subject to our approval, standardized promotional materials for use by the members in regional marketing. 13.4.3 No marketing, advertising or promotional plans or materials may be used by a Regional Fund or furnished to its members without our prior approval, pursuant to the procedures and terms as set forth in Section 13.9 below. 13.4.4 Once you become a member of a Regional Fund, you must contribute to a Regional Fund pursuant to the allocation that we specify, as described in Section 13.2 above, at the time required under Section 4.3 above, together with such statements or reports that we, or the Regional Fund (with our prior written approval) may require. We also have the right to require that you submit your Regional marketing contributions and reports directly to us for distribution to the Regional Brand Fund. 13.4.5 A majority of the Goosehead Business owners in the Regional Fund may vote to increase the amount of each Goosehead Business owner's contribution to the Regional Fund by up to an additional two percent (2%) of each Goosehead Business's Gross Revenues. Voting will be on the basis of one vote per Goosehead Business, and each Goosehead Business that we operate in the region, if any, will have the same voting rights as those owned by our franchisees. You must contribute to the Regional Fund in accordance with any such vote by the Regional Fund to increase each Goosehead Business's contribution as provided in this Section 13.4.5. 13.4.6 Although once established, each Regional Fund is intended to be of perpetual duration, we maintain the right to terminate any Regional Fund. A Regional Fund will + +Page 29 of 80 + + + + + +not be terminated, however, until all monies in that Regional Fund have been expended for marketing purposes. 13.5 Local Marketing and Promotion. You must make Monthly expenditures on local marketing and promotion of the Franchised Business in such amounts as we may designate as part of the allocation of the Marketing Contribution specified in Section 13.2 above. As used in this Agreement, the term "local marketing and promotion" will consist only of the direct costs of purchasing and producing marketing materials (including camera ready advertising and point of sale materials), media (space or time), and those direct out of pocket expenses related to costs of marketing and sales promotion that you spend in your local market or area, advertising agency fees and expenses, postage, shipping, telephone, and photocopying; however, the parties expressly agree that local marketing may not include costs or expenses that you incur or that are spent on your behalf in connection with any of the following: 13.5.1 Salaries and expenses of your employees, including salaries or expenses for attendance at marketing meetings or activities, or incentives provided or offered to such employees, including discount coupons; and/or 13.5.2 Charitable or other contributions or donations. 13.6 Materials Available for Purchase. We may periodically make available to you for purchase marketing plans and promotional materials, including newspaper mats, coupons, merchandising materials, sales aids, point-of- purchase materials, special promotions, direct mail materials, community relations programs, and similar marketing and promotional materials for use in local marketing. 13.7 Standards. All of your local marketing and promotion must: (a) be in the media, and of the type and format, that we may approve; (b) be conducted in a dignified manner; and (c) conform to the standards and requirements that we may specify. You agree not to use any advertising, marketing materials, and/or promotional plans unless and until you have received our prior written approval, as specified in Section 13.9 below. 13.8 Our Review and Right to Approve All Proposed Marketing. For all proposed advertising, marketing, and promotional plans, you (or the Regional Fund, where applicable) must submit to us samples of such plans and materials (by means described in Section 24 below), for our review and prior written approval. If you (or the Regional Fund) have not received our written approval within fourteen (14) days after we have received those proposed samples or materials, then we will be deemed to have disapproved them. You acknowledge and agree that any and all copyright in and to advertising, marketing materials, and promotional plans developed by or on behalf of you will be our sole property, and you agree to sign such documents (and, if necessary, require your employees and independent contractors to sign such documents) that we deem reasonably necessary to give effect to this provision. 13.9 Rebates. You acknowledge and agree that periodic rebates, giveaways and other promotions and programs will, if and when we approve and adopt them, be an integral part of the System. Accordingly, you agree to honor and participate (at your expense) in reasonable rebates, giveaways, marketing programs, and other promotions that we establish and/or that other franchisees sponsor, so long as they do not violate regulations and laws of appropriate governmental authorities. 13.10 Considerations as to Charitable Efforts. You acknowledge and agree that certain associations between you and/or the Franchised Business and/or the Proprietary Marks + +Page 30 of 80 + + + + + +and/or the System, on the one hand, and certain political, religious, cultural or other types of groups, organizations, causes, or activities, on the other, however well-intentioned and/or legal, may create an unwelcome, unfair, or unpopular association with, and/or an adverse effect on, our reputation and/or the good will associated with the Proprietary Marks. Accordingly, you agree that you will not, without our prior written consent, take any actions that are, or which may be perceived by the public to be, taken in the name of, in connection or association with you, the Proprietary Marks, the Franchised Business, us, and/or the System involving the donation of any money, products, services, goods, or other items to, any charitable, political or religious organization, group, or activity. 13.11 Additional Marketing Expenditure Encouraged. You understand and acknowledge that the required contributions and expenditures are minimum requirements only, and that you may (and we encourage you to) spend additional funds for local marketing and promotion, which will focus on disseminating marketing directly related to your Franchised Business. 14 TECHNOLOGY 14.1 Computer Systems and Required Software. With respect to computer systems and required software: 14.1.1 We have the right to specify or require that certain brands, types, makes, and/or models of communications, computer systems, and hardware to be used by, between, or among Goosehead Businesses, and in accordance with our standards, including without limitation: (a) back office systems, data, audio, video (including managed video security surveillance), telephone, voice messaging, retrieval, and transmission systems for use at Goosehead Businesses, between or among Goosehead Businesses, and between and among the Franchised Business, and you, and us; (b) physical, electronic, and other security systems and measures; (c) printers and other peripheral devices; (d) archival back-up systems; (e) internet access mode (e.g., fo rm o f telecommunications connection) and speed; and (f) technology used to enhance and evaluate the customer experience (collectively, all of the above are referred to as the "Computer System"). 14.1.2 We will have the right, but not the obligation, to develop or have developed for us, or to designate: (a) computer software programs and accounting system software that you must use in connection with the Computer System (including applications, technology platforms, and other such solutions) ("Required Software"), which you must install; (b) updates, supplements, modifications, or enhancements to the Required Software, which you must install; (c) the media upon which you must record data; and (d) the database file structure of your Computer System. If we require you to use any or all of the above items, then you agree that you will do so. 14.1.3 You agree to install and use the Computer System and Required Software at your expense. You agree to pay us or third party vendors, as the case may be, initial and ongoing fees in order to install, maintain, and continue to use the Required Software, hardware, and other elements of the Computer System. 14.1.4 You agree to implement and periodically make upgrades and other changes at your expense to the Computer System and Required Software as we may reasonably request in writing (collectively, "Computer Upgrades"). 14.1.5 You agree to comply with all specifications that we issue with respect to the Computer System and the Required Software, and with respect to Computer + +Page 31 of 80 + + + + + +Upgrades, at your expense. You agree to afford us unimpeded access to your Computer System and Required Software, including all information and data maintained thereon, in the manner, form, and at the times that we request. 14.1.6 You also agree that we will have the right to approve or disapprove your use of any other technology solutions (including beacons and other tracking methodologies). 14.2 Data. 14.2.1 You agree that all data that you collect, create, provide, or otherwise develop on your Computer System (whether or not uploaded to our system from your system and/or downloaded from your system to our system) is and will be owned exclusively by us, and that we will have the right to access, download, and use that data in any manner that we deem appropriate without compensation to you. 14.2.2 You agree that all other data that you create or collect in connection with the System, and in connection with your operation of the Franchised Business (including customer lists and transaction data), is and will be owned exclusively by us during the term of, and after termination or expiration of, this Agreement. 14.2.3 In order to operate your Franchised Business under this Agreement, we hereby license use of such data back to you, at no additional cost, solely for the term of this Agreement and for your use in connection with operating the Franchised Business. You acknowledge and agree that except for the right to use the data under this clause, you will not develop or have any ownership rights in or to the data. 14.2.4 You agree to transfer to us all data (in the digital machine-readable format that we specify, and/or printed copies, and/or originals) promptly upon our request when made, whether periodically during the term of this Agreement, upon termination and/or expiration of this Agreement, any transfer of an interest in you, and/or a transfer of the Franchised Business. 14.3 Data Requirements and Usage. We may periodically specify in the Manual or otherwise in writing the information that you agree to collect and maintain on the Computer System installed at the Franchised Business, and you agree to provide to us such reports as we may reasonably request from the data so collected and maintained. In addition: 14.3.1 You agree to abide by all applicable laws pertaining to the privacy of consumer, employee, and transactional information ("Privacy Laws"). 14.3.2 You agree to comply with our standards and policies that we may issue (without any obligation to do so) pertaining to the privacy of consumer, employee, and transactional information. If there is a conflict between our standards and policies and Privacy Laws, you agree to: (a) comply with the requirements of Privacy Laws; (b) immediately give us written notice of such conflict; and (c) promptly and fully cooperate with us and our counsel in determining the most effective way, if any, to meet our standards and policies pertaining to privacy within the bounds of Privacy Laws. 14.3.3 You agree to not publish, disseminate, implement, revise, or rescind a data privacy policy without our prior written consent as to such policy. + +Page 32 of 80 + + + + + +14.3.4 You agree to implement at all times appropriate physical and electronic security as is necessary to secure your Computer System, including complex passwords that you change periodically, and to comply any standards and policies that we may issue (without obligation to do so) in this regard. 14.4 Extranet. You agree to comply with our requirements (as set forth in the Manual or otherwise in writing) with respect to establishing and maintaining telecommunications connections between your Computer System and our Extranet and/or such other computer systems as we may reasonably require. The term "Extranet" means a private network based upon Internet protocols that will allow users inside and outside of our headquarters to access certain parts of our computer network via the Internet. We may establish an Extranet (but are not required to do so or to maintain an Extranet). If we establish an Extranet, then you agree to comply with our requirements (as set forth in the Manual or otherwise in writing) with respect to connecting to the Extranet, and utilizing the Extranet in connection with the operation of your Franchised Business. The Extranet may include, without limitation, the Manual, training and other assistance materials, and management reporting solutions (both upstream and downstream, as we may direct). You agree to purchase and maintain such computer software and hardware (including telecommunications capacity) as may be required to connect to and utilize the Extranet. You agree to execute and deliver to us such documents as we may deem reasonably necessary to permit you to access the Extranet. 14.5 No Separate Online Sites. Unless we have otherwise approved in writing, you agree to neither establish nor permit any other party to establish an Online Site relating in any manner whatsoever to the Franchised Business or referring to the Proprietary Marks. We will have the right, but not the obligation, to provide one or more references or webpage(s), as we may periodically designate, within our Online Site. The term "Online Site" means one or more related documents, designs, pages, or other communications that can be accessed through electronic means, including the Internet, World Wide Web, webpages, microsites, social media and networking sites (e.g., Facebook, Twitter, LinkedIn, You Tube, Google Plus, Snapchat, Pinterest, Instagram, etc.), blogs, vlogs, applications to be used on mobile devices (e.g., iOS or Android apps), and other applications, etc. (whether they are now in existence or developed at some point in the future). However, if we give you our prior written consent to have some form of separate Online Site (which we are not obligated to approve), then each of the following provisions will apply: 14.5.1 You agree that you will not establish or use any Online Site without our prior written approval. 14.5.2 Any Online site owned or maintained by or for your benefit will be deemed "marketing" under this Agreement, and will be subject to (among other things) our approval under Section 13.9 above. 14.5.3 Before establishing any Online Site, you agree to submit to us, for our prior written approval, a sample of the proposed Online Site domain name, format, visible content (including, without limitation, proposed screen shots, links, and other content), and non-visible content (including, without limitation, meta tags, cookies, and other electronic tags) in the form and manner we may reasonably require. 14.5.4 You may not use or modify such Online Site without our prior written approval as to such proposed use or modification. 14.5.5 In addition to any other applicable requirements, you agree to comply with the standards and specifications for Online Sites that we may periodically prescribe in + +Page 33 of 80 + + + + + +the Manual or otherwise in writing (including requirements pertaining to designating us as the sole administrator or co-administrator of the Online Site). 14.5.6 If we require, you agree to establish such hyperlinks to our Online Site and others as we may request in writing. 14.5.7 If we require you to do so, you agree to make weekly or other periodic updates to our Online Site to reflect information regarding specials and other promotions at your Franchised Business. 14.5.8 We may require you to make us the sole administrator (or co-administrator) of any social networking pages that you maintain or that are maintained on your behalf, and we will have the right (but not the obligation) to exercise all of the rights and privileges that an administrator may exercise. 14.6 Electronic Identifiers; E-Mail. 14.6.1 You agree not to use the Proprietary Marks or any abbreviation or other name associated with us and/or the System as part of any e-mail address, domain name, social network or social media name or address, and/or any other identification of you and/or your business in any electronic medium. 14.6.2 You agree not to transmit or cause any other party to transmit advertisements or solicitations by e- mail, text message, and/or other electronic method without obtaining our prior written consent as to: (a) the content of such electronic advertisements or solicitations; and (b) your plan for transmitting such advertisements. In addition to any other provision of this Agreement, you will be solely responsible for compliance with any laws pertaining to sending electronic communication including, the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 (known as the "CAN-SPAM Act of 2003") and the Federal Telephone Consumer Protection Act. (As used in this Agreement, the term "electronic communication" includes all methods for sending communication electronically, whether or not currently invented or used, including without limitation e-mails, text messages, internet-based communication, and faxes.) 14.7 Outsourcing. You agree not to hire third party or outside vendors to perform any services or obligations in connection with the Computer System, Required Software, and/or any other of your obligations, without our prior written approval. Our consideration of any proposed outsourcing vendors may be conditioned upon, among other things, such third party or outside vendor's entry into a confidentiality and indemnification agreement with us and you in a form that we may reasonably provide and the third party or outside vendor's agreement to pay for all initial and ongoing costs related to interfaces with our computer systems. The provisions of this section are in addition to and not instead of any other provision of this Agreement. You agree not to install (and/or remove) any software or firmware from the Computer System without our prior written consent. 14.8 Telephone Service. You agree to use the telephone service for the Franchised Business that we may require, which may be one or more centralized vendors that we designate for that purpose. You agree that we may designate, and own, the telephone numbers for your Franchised Business. 14.9 Changes. You acknowledge and agree that changes to technology are dynamic and not predictable within the term of this Agreement. In order to provide for inevitable but + +Page 34 of 80 + + + + + +unpredictable changes to technological needs and opportunities, you agree that we will have the right to establish, in writing, reasonable new standards for the implementation of technology in the System; and you agree to abide by those reasonable new standards we establish as this Section 14 were periodically revised by us for that purpose. 14.10 Electronic Communication - Including E-Mail, Fax, and Texts. You acknowledge and agree that exchanging information with us by electronic communication methods is an important way to enable quick, effective, and efficient communication, and that we are entitled to rely upon your use of electronic communications as part of the economic bargain underlying this Agreement. To facilitate the use of electronic communication to exchange information, you authorize the transmission of those electronic communications by us and our employees, vendors, and affiliates (on matters pertaining to the business contemplated under this Agreement) (together, "Official Senders") to you during the term of this Agreement. 14.10.1 In order to implement the terms of this Section 14.10, you agree that: (a) Official Senders are authorized to send electronic communications to those of your employees as you may occasionally designate for the purpose of communicating with us and others; (b) you will cause your officers, directors, members, principals, managers, and employees (as a condition of their employment or position with you) to give their consent (in an electronic communication or in a pen-and-paper writing, as we may reasonably require) to Official Senders' transmission of electronic communication to those persons, and that such persons may not opt-out, or otherwise ask to no longer receive electronic communication, from Official Senders during the time that such person works for or is affiliated with you; and (c) you will not opt-out, or otherwise ask to no longer receive electronic communications, from Official Senders during the term of this Agreement. 14.10.2 The consent given in this Section 14.10 will not apply to the provision of notices by either party under this Agreement using e-mail unless the parties otherwise agree in a pen-and-paper writing signed by both parties. 14.10.3 We may permit or require you to use a specific e-mail address (or address using another communications method) (for example, one that will contain a Top Level Domain Name that we designate, such as "john.jones@goosehead.com") (the "Permitted E-mail Address") in connection with the operation of the Franchised Business, under the standards that we set for use of that Permitted E-mail Address. You will be required to sign the form E-Mail authorization letter that we may specify for this purpose. If we assign you a Permitted E-mail Address, then you agree that you (and your employees) will use only that e-mail account for all business associated with your Franchised Business. 15 INSURANCE 15.1 Required Insurance Coverage. Before starting any activities or operations under this Agreement, you agree to procure and maintain in full force and effect during the term of this Agreement (and for such period thereafter as is necessary to provide the coverages required under this Agreement for events having occurred during the Term of this Agreement), at your expense, at least the following insurance policy or policies in connection with the Franchised Business or other facilities on premises, or by reason of the construction, operation, or occupancy of the Franchised Business or other facilities on premises. Such policy or policies must be written by an insurance company or companies we have approved, having at all times a rating of at least "A-" in the most recent Key Rating Guide published by the A.M. Best Company (or another rating that we reasonably designate if A.M. Best Company no longer + +Page 35 of 80 + + + + + +publishes the Key Rating Guide) and licensed and admitted to do business in the state in which the Franchised Business is located, and must include, at a minimum (except that we may reasonably specify additional coverages and higher policy limits for all franchisees periodically in the Manual or otherwise in writing to reflect inflation, identification of new risks, changes in the law or standards of liability, higher damage awards and other relevant changes in circumstances), the following: 15.1.1 Commercial general liability insurance, including us, and any entity in which we have an interest and any entity affiliated with us and each of our members, managers, shareholders, directors, officers, partners, employees, servants and agents as additional insureds protecting against any and all claims for personal, bodily and/or property injury occurring in or about the Franchised Business and protecting against assumed or contractual liability under this Agreement with respect to the Franchised Business and your operations, with such policy to be placed with minimum limits of One Million Dollars ($1,000,000) combined single limit per occurrence and One Million Dollars ($1,000,000) general aggregate per location; provided, however, that at our election, such minimum limits may be periodically increased. 15.1.2 Professional indemnity insurance providing coverage for loss or damage arising out of an act or omission of the franchisee or its employees, minimum of $1,000,000 of coverage for every $5,000,000 of annual written premium by you with a floor of $1,000,000 of coverage and a maximum deductible of $25,000 allowed. 15.1.3 Business automobile liability insurance, including owned, non-owned and hired car coverage providing third party liability insurance, covering all licensed vehicles owned or operated by or on behalf of you, with limits of liability not less than One Million Dollars ($1,000,000) combined single limit for both bodily injury and property damage. 15.1.4 Statutory workers' compensation insurance and employer's liability insurance for a minimum limit equal to at least the greater of One Hundred Thousand Dollars ($100,000) or the amounts required as underlying by your umbrella carrier, as well as such other disability benefits type insurance as may be required by statute or rule of the state in which the Franchised Business is located. 15.1.5 Data theft and cybersecurity coverage. 15.1.6 Commercial umbrella liability insurance with limits which bring the total of all primary underlying coverages (commercial general liability, comprehensive automobile liability, and employers liability) to not less than Two Million Dollars ($2,000,000) total limit of liability. Such umbrella liability must provide at a minimum those coverages and endorsements required in the underlying policies. 15.1.7 Property insurance providing coverage for direct physical loss or damage to real and personal property for all risk perils, including the perils of flood and earthquake. Appropriate coverage must also be provided for business interruption/extra expense exposures, written on an actual loss sustained basis. The policy or policies must value property (real and personal) on a new replacement cost basis without deduction for depreciation and the amount of insurance must not be less than 90% of the full replacement value of the Franchised Business, its furniture, fixtures, equipment, and stock (real and personal property). Any deductibles contained in such policy will be subject to our review and approval. + +Page 36 of 80 + + + + + +15.1.8 If your Approved Location is located in a flood zone other than B, C or X, as determined by the Federal Emergency Management Agency, you must also obtain flood insurance coverage in the amount of the lesser of 90% of the replacement cost or the maximum coverage available from the National Flood Insurance Program. 15.1.9 Any other insurance coverage that is required by federal, state, or municipal law. 15.2 Endorsements. All policies listed in Section 15.1 above (unless otherwise noted below) must contain such endorsements as will, periodically, be provided in the Manual. All policies must waive subrogation as between us (and our insurance carriers) and you (and your insurance carriers). 15.3 Notices to us. In the event of cancellation, material change, or non-renewal of any policy, sixty (60) days' advance written notice must be provided to us in the manner provided in Section 24 below. 15.4 Construction Coverages. In connection with all significant construction, reconstruction, or remodeling of the Franchised Business during the term of this Agreement, you agree to require the general contractor, its subcontractors, and any other contractor, to effect and maintain at general contractor's and all other contractor's own expense, such insurance policies and bonds with such endorsements as are set forth in the Manual, all written by insurance or bonding companies that we have approved, having a rating as set forth in Section 15.1 above. 15.5 Other Insurance Does Not Impact your Obligation. Your obligation to obtain and maintain the foregoing policy or policies in the amounts specified will not be limited in any way by reason of any insurance that we may maintain, nor will your performance of that obligation relieve you of liability under the indemnity provisions set forth in Section 21.4 below. Additionally, the requirements of this Section 15 will not be reduced, diminished, eroded, or otherwise affected by insurance that you carry (and/or claims made under that insurance) for other businesses, including other Goosehead Businesses that you (and/or your affiliates) operate under the System. 15.6 Additional Named Insured. All public liability and property damage policies except workers' compensation must list us as an additional named insured, and must also contain a provision that we, although named as an insured, will nevertheless be entitled to recover under said policies on any loss occasioned to us or our servants, agents, or employees by reason of the negligence of you or your servants, agents, or employees. 15.7 Certificates of Insurance. At least thirty (30) days before the time you are first required to carry any insurance under this Agreement, and from then on, at least thirty (30) days before the expiration of any such policy, you agree to deliver to us certificates of insurance evidencing the proper coverage with limits not less than those required under this Agreement. All certificates must expressly provide that we will receive at least thirty (30) days' prior written notice if there is a material alteration to, cancellation, or non-renewal of the coverages evidenced by such certificates. Additional certificates evidencing the insurance required by Section 15.1 above must name us, and each of our affiliates, directors, agents, and employees, as additional insured parties, and must expressly provide that any interest of same therein will not be affected by any breach by you of any policy provisions for which such certificates evidence coverage. 15.8 Proof of Coverage. In addition to your obligations under Section 15.7 above, on the first anniversary of the Effective Date, and on each subsequent anniversary of the Effective Date, + +Page 37 of 80 + + + + + +you agree to provide us with proof of insurance evidencing the proper coverage with limits not less than those required under this Agreement, in such form as we may reasonably require. 15.9 Coverages are Minimums. You acknowledge and agree that the specifications and coverage requirements in this Section 15 are minimums, and that we recommend that you review these with your own insurance advisors to determine whether additional coverage is warranted in the operation of your Franchised Business. 15.10 Changes. We will have the right, periodically, to make such changes in minimum policy limits and endorsements as we may determine are necessary or appropriate; provided, however, all changes will apply to all of our franchisees who are similarly situated. 16 TRANSFER OF INTEREST 16.1 By Us. We will have the right to transfer or assign this Agreement and all or any part of our rights or obligations under this Agreement to any person or legal entity, and any assignee of us, which assignee will become solely responsible for all of our obligations under this Agreement from the date of assignment. 16.2 Your Principals. If you are an entity, then each party that directly or indirectly holds any interest whatsoever in you (each, a "Principal"), and the interest that each Principal directly or indirectly holds in you, is identified in Exhibit C to this Agreement. You represent and warrant to us, and agree, that your owners are accurately set forth on Exhibit C to this Agreement, and you also agree not to permit the identity of those owners, or their respective interests in you, to change without complying with this Agreement. 16.3 Principals. We will have a continuing right to designate any person or entity that owns a direct or indirect interest in you as a Principal, and Exhibit C will be so amended automatically upon written notice to you. 16.4 By You. You understand and acknowledge that the rights and duties set forth in this Agreement are personal to you, and that we have granted this franchise in reliance on your (or your Principals') business skill, financial capacity, and personal character. Accordingly: 16.4.1 You agree not to make a transfer (and not to permit any other party to make a transfer) without our prior written consent. 16.4.1.1 As used in this Agreement, the term "transfer" is agreed to mean any sale, assignment, conveyance, pledge, encumbrance, merger, creation of a security interest in, and/or giving away of any direct or indirect interest in: (a) this Agreement; (b) you; (c) any or all of your rights and/or obligations under this Agreement; and/or (d) all or substantially all of the assets of the Franchised Business. 16.4.1.2 Any purported assignment or transfer not having our prior written consent as required by this Section 16 will be null and void and will also constitute a material breach of this Agreement, for which we may immediately terminate this Agreement without opportunity to cure, pursuant to Section 17.2.5 below. 16.4.2 If you are an entity (other than a partnership or a limited liability partnership), then you agree that: (a) without our prior written approval, you will not issue any voting + +Page 38 of 80 + + + + + +securities or interests, or securities or interests convertible into voting securities; and (b) t he recipient of any such security or other interest will become a Principal under this Agreement, if we designate them as such. 16.4.3 If you are a partnership or limited liability partnership, then the partners of that partnership will not, without our prior written consent, admit additional general partners, remove a general partner, or otherwise materially alter the powers of any general partner. Each general partner in such a partnership will automatically be deemed to be a Principal. 16.4.4 Principals must not, without our prior written consent, transfer, pledge, and/or otherwise encumber their interest in you. 16.5 Transfer Conditions. We will not unreasonably withhold any consent required by Section 16.4 above; provided, that if you propose to transfer your obligations under this Agreement or any material asset, or if any party proposes to transfer any direct or indirect interest in you, then we will have the right to require that you satisfy any or all of the following conditions before we grant our approval to the proposed transfer: 16.5.1 The transferor must have executed a general release, in a form satisfactory to us, of any and all claims against us and our affiliates, successors, and assigns, and their respective officers, directors, members, managers, shareholders, partners, agents, representatives, servants, and employees in their corporate and individual capacities including, without limitation, claims arising under this Agreement, any other agreement between you and us, and/or our respective affiliates, and federal, state, and local laws and rules. 16.5.2 The transferee of a Principal will be designated as a Principal and each transferee who is designated a Principal must enter into a written agreement, in a form satisfactory to us, agreeing to be bound as a Principal under the terms of this Agreement as long as such person or entity owns any interest in you; and, if your obligations were guaranteed by the transferor, the Principal must guarantee the performance of all such obligations in writing in a form satisfactory to us. 16.5.3 The proposed new Principals (after the transfer) must meet our educational, managerial, and business standards; each must possess a good moral character, business reputation, and credit rating; have the aptitude and ability to operate the Franchised Business, as may be evidenced by prior related business experience or otherwise; and have adequate financial resources and capital to operate the Franchised Business. 16.5.4 We will have the right to require that the transferee execute, for a term ending on the expiration date of this Agreement, the form of franchise agreement that we are then offering to new System franchisees, and such other ancillary agreements that we may require for the business franchised under this Agreement, and those agreements will supersede this Agreement and its ancillary documents in all respects, and the terms of which may differ from the terms of this Agreement including, without limitation, a higher royalty and marketing fee. 16.5.5 If we request, then you must conduct Remodeling to conform to the then-current standards and specifications of new Goosehead Businesses then-being established in the System, and you agree to complete the upgrading and other requirements specified above in Section 8.8.2 within the time period that we specify. + +Page 39 of 80 + + + + + +16.5.6 You agree to pay in full all of your monetary obligations to us and our affiliates, and to all vendors (whether arising under this Agreement or otherwise), and you must not be otherwise in default of any of your obligations under this Agreement (including your reporting obligations). 16.5.7 The transferor must remain liable for all of the obligations to us in connection with the Franchised Business that arose before the effective date of the transfer, and any covenants that survive the termination or expiration of this Agreement, and must execute any and all instruments that we reasonably request to evidence such liability. 16.5.8 A Principal of the transferee whom we designate to be a new Operating Principal, and those of the transferee's Managers and Producers as we may require, must successfully complete (to our satisfaction) all training programs that we require upon such terms and conditions as we may reasonably require (and while we will not charge a fee for attendance at such training programs, the transferee will be responsible for the salary and all expenses of the person(s) that attend training). 16.5.9 You agree to pay us a transfer fee to compensate us for our legal, accounting, training, and other expenses incurred in connection with the transfer. The transfer fee will be in an amount equal to fifteen percent (15%) of your Initial Franchise Fee if you complete a transfer (as defined in this Section) to another franchisee currently operating within the System with a manager that has successfully completed all of our training programs then in effect. If you complete a transfer (as defined in this Section) to an individual or entity not currently operating within the System, then the transfer fee shall be one hundred percent (100%) of your Initial Franchise Fee. If any party has engaged a broker with respect to the transfer, you must also pay (or ensure the buyer's payment of) any applicable commission to the broker in connection with the transfer. You are not required to pay to us a transfer fee (although you must reimburse us for the legal and accounting costs and expenses we incur) for the following transfers: (a) for the convenience of ownership, (b) to members of transferor's immediate family, or (c) to an individual employed by you in connection with the Franchised Business for at least twenty four (24) consecutive months before the transfer. The waiver of a transfer fee for certain transfers does not waive any other requirements of this Section 16, including, without limitation, the requirement that all transferees obtain our approval and meet our standards as described in Section 16.5.3 above. 16.5.10 The transferor must acknowledge and agree that the transferor will remain bound by the covenants contained in Sections 19.3 - 19.5 below. 16.5.11 If the transfer involves the sale of all or any part of your book of insurance business (including Commissions payable in connection with that business), then upon completion of the transfer this Agreement shall terminate and the transferee must enter into a new form of franchise agreement that we are then offering to new System franchisees, for a term ending on the expiration date of this Agreement, and such other ancillary agreements that we may require for the business franchised under this Agreement. 16.6 Death or Incapacity. Upon the death or mental incapacity of any person with an interest in this Agreement, in Franchisee, in the Franchised Business, or in all or substantially all of the assets of the Franchised Business: + +Page 40 of 80 + + + + + +16.6.1 The executor, administrator, or personal representative of such person will transfer such interest to a third party approved by us within six (6) months after such death or mental incapacity. Such transfers, including, without limitation, transfers by devise or inheritance, will be subject to the same conditions as any inter vivos transfer. In the case of transfer by devise or inheritance, if the heirs or beneficiaries of any such person are unable to meet the conditions in this Section 16, the executor, administrator, or personal representative of the decedent will transfer the decedent's interest to another party approved by us within a reasonable time, which disposition will be subject to all the terms and conditions for transfers contained in this Agreement. If the interest is not disposed of within a reasonable time, we may terminate this Agreement, pursuant to Section 17.2 below. Any transfer subject to this section which is made in accordance with a succession plan approved in advance by us will be deemed approved for the purposes of this Section 16.6.1. We will not unreasonably withhold any approvals required by this Section 16.6; 16.6.2 We will have the right to take such steps as are necessary to manage the Franchised Business for your account until such time as a transfer can be completed pursuant to Section 16.6.1. You further grant to us the right to receive a reasonable fee for such services and reimbursement for our expenses in connection with such services. 16.6.3 Our Right to Purchase Business Upon Death or Incapacity. 16.6.3.1 After your death or mental incapacity (or your principal's death or mental incapacity if franchisee is an entity), if the transfer of interest described in Section 16.6.1 has not occurred within six (6) months after such death or mental incapacity, we will have the option, but not the obligation, to purchase your interest in the Franchised Business. Such interest may include all rights of yours under this Agreement and all rights of yours in the lists of customers, prospects and policyholders and all business records and information regarding those customers, prospects and policyholders, including the name and address of the applicant or policyholder and the date of expiration and policy limits of any insurance policy or renewal, rights to solicit the customers, prospects and policyholders for the sale of insurance products and renewal of policyholders' current policies, rights to new, renewal or other commissions and compensation from the insurance carriers or their agents, book of business, furniture, fixtures, equipment and the rights under the lease for the Approved Location. We may elect not to include the furniture, fixtures, equipment and the rights under the lease for the Approved Location in that purchase. If we intend to exercise this option, we will notify you (or your appropriate legal representative) within thirty (30) days of the date we learn of such death or mental incapacity. 16.6.3.2 For assets other than furniture, fixtures or equipment and the rights under the lease for the Approved Location, the purchase price will be an amount equal to one and one-half times the Commissions, net of Royalty Fees, received by the Franchised Business during the twelve (12) month period immediately preceding the closing of the purchase of the assets by us, but if we re-sell the assets purchased under this Section within six (6) months of our purchase, the purchase price will be calculated to be ninety percent (90%) of the price for which we re-sell the business (if more than the original purchase price). The purchase price will be reduced by any current and long-term liabilities of the Franchised Business assumed by us and any amounts due to us from you at the time of sale. The purchase price for + +Page 41 of 80 + + + + + +furniture, fixtures, equipment and the rights under the lease for the Approved Location (if we elect to purchase these assets) will be the fair market value as you and we agree. If we and you (or your appropriate legal representative) cannot agree on the fair market value of such furniture, fixtures, equipment or the rights under the lease for the Approved Location, each party will select an independent appraiser who will each provide a written appraisal of such furniture, fixtures, equipment or rights under the lease for the Approved Location and we may elect to exercise the option granted hereunder by paying to you the average of the two appraisals. We will pay the purchase price to you in twelve (12) equal, monthly installments following the purchase, provided that you are in full compliance with the covenants contained in this Agreement. If, at any time during the twelve (12) months following our purchase of your assets, as described above, you breach any covenant contained in this Agreement (or any other agreement between you and us), our obligation to pay the monthly installments will immediately cease. 16.6.3.3 We may elect to exercise our option to purchase your interest in the Franchised Business by sending written notice of the election to you (or your appropriate legal representative). The election may exclude the purchase of the furniture, fixtures, equipment and rights under the lease for the Approved Location. The closing of the sale will occur within thirty (30) days after we exercise our option to purchase the Franchised Business or such later date as may be necessary to comply with applicable bulk sales or similar laws. At closing, we and you agree to sign and deliver all documents necessary to vest title in the assets purchased by us free and clear of all liens and encumbrances, except any assumed by us and/or to effectuate assignment of the lease for the Approved Location. You (or your appropriate legal representative) must cooperate fully and use your best efforts to acquire the landlord's approval of the assignment of the lease for the Approved Location to us, if necessary. If the lease for the Approved Location cannot be assigned to us, you will agree to sublease the Approved Location to us on all the same terms and conditions as are contained in your lease and will cooperate fully and use your best efforts to acquire the landlord's approval of the sublease, if necessary. We reserve the right to assign our option to purchase the Franchised Business or designate a substitute purchaser of the Franchised Business. 16.7 Consent to Transfer. Our consent to a transfer that is the subject of this Section 16 will not constitute a waiver of any claims that we may have against the transferring party, nor will it be deemed a waiver of our right to demand exact compliance with any of the terms of this Agreement by the transferor or transferee. 16.8 No Transfers to a Non-Franchisee Party to Operate a Similar Business. You agree that neither you nor any Principal of yours will transfer or attempt to transfer any or all of your Franchised Business to a third party who will operate a similar business at the Approved Location but not under the System and the Proprietary Marks, and not under a franchise agreement with us. 16.9 Bankruptcy Issues. If you or any person holding any interest (direct or indirect) in you become a debtor in a proceeding under the U.S. Bankruptcy Code or any similar law in the U.S. or elsewhere, it is the parties' understanding and agreement that any transfer of you, your obligations, and/or rights under this Agreement, any material assets of yours, and/or + +Page 42 of 80 + + + + + +any indirect or direct interest in you will be subject to all of the terms of this Section 16, including without limitation the terms of Sections 16.4, 16.5, and 16.6 above. 16.10 Securities Offers. All materials for an offering of stock, ownership, and/or partnership interests in you or any of your affiliates that are required by federal or state law must be submitted to us for review as described below before such materials are filed with any government agency. Any materials to be used in any exempt offering must be submitted to us for such review before their use. 16.10.1 You agree that: (a) no offering by you or any of your affiliates may imply (by use of the Proprietary Marks or otherwise) that we are participating in an underwriting, issuance, or offering of your securities or your affiliates; (b) our review of any offering will be limited solely to the relationship between you and us (and, if applicable, any of your affiliates and us); and (c) we will have the right, but not obligation, to require that the offering materials contain a written statement that we require concerning the limitations stated above. 16.10.2 You (and the offeror if you are not the offering party), your Principals, and all other participants in the offering must fully indemnify us and all of the Franchisor Parties (as defined in Section 21.5.2 below) in connection with the offering. 16.10.3 For each proposed offering, you agree to pay us a non-refundable fee of Ten Thousand Dollars ($10,000) or such greater amount as is necessary to reimburse us for our reasonable costs and expenses (including legal and accounting fees) for reviewing the proposed offering. 16.10.4 You agree to give us written notice at least thirty (30) days before the date that any offering or other transaction described in this Section 16.11 commences. Any such offering will be subject to all of the other provisions of this Section 16, including without limitation the terms set forth in Sections 16.4, 16.5, 16.6; and further, without limiting the foregoing, it is agreed that any such offering will be subject to our approval as to the structure and voting control of the offeror (and you, if you are not the offeror) after the financing is completed. 16.10.5 You also agree that after your initial offering, described above, for the remainder of the term of the Agreement, you will submit to us for our review and prior written approval all additional securities documents (including periodic reports, such as quarterly, annual, and special reports) that you prepare and file (or use) in connection with any such offering. You agree to reimburse us for our reasonable costs and expenses (including legal and accounting fees) that we incur in connection with our review of those materials. 17 DEFAULT AND TERMINATION 17.1 Automatic. If any one or more of the following events take place, then you will be deemed to be in default under this Agreement, and all rights granted in this Agreement will automatically terminate without notice to you: (a) if you become insolvent (meaning, you are unable to pay your debts as they fall due in the usual course of business) or make a general assignment for the benefit of creditors; (b) if a bill in equity or other proceeding for the appointment of a receiver for you or another custodian for your business or assets is filed and consented to by you; (c) if a receiver or other custodian (permanent or temporary) of your assets or property, or any part thereof, is appointed by any court of competent jurisdiction; (d) if proceedings for a composition with creditors under any state or federal law is instituted by or against you; + +Page 43 of 80 + + + + + +(e) if a final judgment remains unsatisfied or of record for thirty (30) days or longer (unless unappealed or a supersedeas bond is filed); (f) if you are dissolved; or if execution is levied against your business or property; (g) if suit to foreclose any lien or mortgage against the Franchised Business premises or equipment is instituted against you and not dismissed within thirty (30) days; and/or (h) if the real or personal property of your Franchised Business will be sold after levy thereupon by any sheriff, marshal, or constable. 17.2 With Notice. If any one or more of the following events occur, then you will be in default under this Agreement, and we will have the right to terminate this Agreement and all rights granted under this Agreement, without affording you any opportunity to cure the default, effective immediately upon the delivery of our written notice to you (in the manner provided in Section 24 below): 17.2.1 If you do not obtain an Approved Location for the Franchised Business within the time limits specified under the Site Selection Addendum, or if you do not construct and open the Franchised Business within the time limits specified in Sections 5.1 and 8.2 above, and within the requirements specified in Sections 5 and 8.2 above; 17.2.2 If you at any time cease to operate or otherwise abandon the Franchised Business for ten (10) consecutive business days (during which you are otherwise required to be open, and without our prior written consent to do so), or lose the right to possession of the premises, or otherwise forfeit the right to do or transact business in the jurisdiction where the Franchised Business is located (however, if through no fault of yours, the premises are damaged or destroyed by an event such that you cannot complete repairs or reconstruction within ninety (90) days thereafter, then you will have thirty (30) days after such event in which to apply for our approval to relocate and/or reconstruct the premises, which approval we will not unreasonably withhold); 17.2.3 If you or any of your Principals or Managers are convicted of a felony, a crime involving moral turpitude, or any other crime or offense that we believe is reasonably likely to have an adverse effect on the System, the Proprietary Marks, the goodwill associated therewith, or our interest therein; 17.2.4 If a threat or danger to public health or safety results from the construction, maintenance, or operation of the Franchised Business; 17.2.5 If you or any of your Principals purport to transfer any rights or obligations under this Agreement or any interest to any third party in a manner that is contrary to the terms of Section 16 above; 17.2.6 If you fail to comply with the requirements of Section 19 below; 17.2.7 If, contrary to the terms of Sections 10 or 11 above, you disclose or divulge the contents of the Manual or other confidential information that we provide to you; 17.2.8 If an approved transfer of an interest in you is not completed within a reasonable time, as required by Sections 16.7 above; 17.2.9 If you knowingly maintain false books or records, or submit any false reports (including information provided as part of your application for this franchise) to us; + +Page 44 of 80 + + + + + +17.2.10 If you commit three (3) or more defaults under this Agreement in any fifty-two (52) week period, whether or not each such default has been cured after notice; 17.2.11 If, after receipt of notice from us, you continue to sell any products or services from the Franchised Business that are not Approved Products or Services; 17.2.12 If you engage in any conduct or practice that is fraudulent, unfair, unethical, or a deceptive practice, or if you allow any of your Producers to operate dishonestly or carelessly; 17.2.13 If you misuse or misappropriate login information for access to insurance carrier websites or databases 17.2.14 If an insurance carrier terminates your ongoing business relationship, for cause; 17.2.15 If you or your Manager fails to successfully complete any required training programs to our reasonable satisfaction; 17.2.16 If your Franchised Business uses or sells any Prohibited Products or Services; and/or 17.2.17 If you make any unauthorized or improper use of the Proprietary Marks, or if you or any of your Principals use the Proprietary Marks in a manner that we do not permit (whether under this Agreement and/or otherwise) or that is inconsistent with our direction, or if you or any of your Principals directly or indirectly contest the validity of our ownership of the Proprietary Marks, our right to use and to license others to use the Proprietary Marks, or seek to (or actually do) register any of our Proprietary Marks with any agency (public or private) for any purpose without our prior written consent to do so. 17.3 With Notice and Opportunity to Cure. 17.3.1 Except as otherwise provided above in Sections 17.1 and 17.2 above, if you are in default of your obligations under this Agreement or the Manual, then we may terminate this Agreement by giving you written notice of termination (in the manner provided under Section 24 below) stating the nature of the default at least thirty (30) days before the effective date of termination (or ten (10) days before the effective date of termination for (i) any failure to pay the Initial Franchise Fee or an installment thereof, or (ii) any failure to timely enter information into the agency management system as required by the Manual). You may, however, avoid termination by: (a) immediately initiating a remedy to cure such default; (b) curing the default to our satisfaction; and (c) promptly providing proof of the cure to us, all within the thirty (30) day period (or ten (10) day period, as applicable). If you do not cure any such default within the specified time (or such longer period as applicable law may require), then this Agreement will terminate without further notice to you effective immediately upon the expiration of the thirty (30) day period (or ten (10) day period, or such longer period as applicable law may require). 17.3.2 If you are in default under the terms of any other franchise agreement or other contract between you (and/or your affiliates) and us (and/or our affiliates), that will also constitute a default under Section 17.3.1 above. + +Page 45 of 80 + + + + + +17.4 Bankruptcy. If, for any reason, this Agreement is not terminated pursuant to this Section 17, and the Agreement is assumed, or assignment of the same to any person or entity who has made a bona fide offer to accept an assignment of the Agreement is contemplated, pursuant to the U.S. Bankruptcy Code, then notice of such proposed assignment or assumption, setting forth: (a) the name and address of the proposed assignee; and (b) all of the terms and conditions of the proposed assignment and assumption; must be given to us within twenty (20) days after receipt of such proposed assignee's offer to accept assignment of the Agreement; and, in any event, within ten (10) days before the date application is made to a court of competent jurisdiction for authority and approval to enter into such assignment and assumption. We will then have the prior right and option, to be exercised by notice given at any time before the effective date of such proposed assignment and assumption, to accept an assignment of the Agreement to us upon the same terms and conditions, and for the same consideration, if any, as in the bona fide offer made by the proposed assignee, less any brokerage commissions that may be payable by you out of the consideration to be paid by such assignee for the assignment of the Agreement. 17.5 Our Rights Instead of Termination. If we are entitled to terminate this Agreement in accordance with Sections 17.2 or 17.3 above, we will also have the right to take any lesser action instead of terminating this Agreement. 17.6 Reservation of Rights under Section 17.5. If any rights, options, or arrangements are terminated or modified in accordance with Section 17.5 above, such action will be without prejudice to our right to terminate this Agreement in accordance with Sections 17.2 or 17.3 above, and/or to terminate any other rights, options or arrangements under this Agreement at any time thereafter for the same default or as a result of any additional defaults of the terms of this Agreement. 17.7 Damages. You agree that you will pay us all damages, costs, and expenses (including reasonable attorneys' fees, court costs, discovery costs, and all other related expenses), that we incur as a result of any default by you under this Agreement and any other agreement between the parties (and their respective affiliates) (in addition to other remedies that we may have). 18 OBLIGATIONS UPON TERMINATION OR EXPIRATION + +Upon termination or expiration of this Agreement, all rights granted under this Agreement to you will forthwith terminate, and all of the following will take effect: 18.1 Cease Operation. You agree to: (a) immediately and permanently stop operating the Franchised Business; and (b) never directly or indirectly represent to the public that you are a present or former franchisee of ours. 18.2 Stop Using Marks and Intellectual Property. You agree to immediately and permanently cease to use, in any manner whatsoever, all aspects of the System, including any confidential methods, procedures and techniques associated with the System, the mark "Goosehead Insurance" and any and all other Proprietary Marks, distinctive forms, slogans, signs, symbols, and devices associated with the System, and any and all other intellectual property associated with the System. Without limiting the foregoing, you agree to stop making any further use of any and all signs, marketing materials, displays, stationery, forms, and any other articles that display the Proprietary Marks. 18.3 Cancel Assumed Names. You agree to take such action as may be necessary to cancel any assumed name or equivalent registration which contains the mark "Goosehead Insurance" + +Page 46 of 80 + + + + + +and any and all other Proprietary Marks, and/or any other service mark or trademark of ours, and you will give us evidence that we deem satisfactory to provide that you have complied with this obligation within five (5) days after termination or expiration of this Agreement. 18.4 Premises. We will have the right (but not the obligation) to require you to assign to us any interest that you (and/or your affiliates) may have in the lease or sublease for the ground upon which the Franchised Business is operated and/or for the building in which the Franchised Business is operated. 18.4.1 If we do not elect or if we are unable to exercise any option we may have to acquire the lease or sublease for the premises of the Franchised Business, or otherwise acquire the right to occupy the premises, you will make such modifications or alterations to the premises operated under this Agreement (including, without limitation, the changing of the telephone number) immediately upon termination or expiration of this Agreement as may be necessary to distinguish the appearance of said premises from that of other Goosehead Businesses, and must make such specific additional changes thereto as we may reasonably request for that purpose. In addition, you will cease use of all telephone numbers and any domain names, websites, e-mail addresses, and any other print and online identifiers, whether or not authorized by us, that you have while operating the Franchised Business, and must promptly execute such documents or take such steps necessary to remove reference to the Franchised Business from all trade or business directories, including online directories, or at our request transfer same to us. 18.4.2 If you fail or refuse to comply with all of the requirements of this Section 18.4, then we (or our designee) will have the right to enter upon the premises of the Franchised Business, without being guilty of trespass or any other tort, for the purpose of making or causing to be made such changes as may be required, at your cost, which expense you agree to pay upon demand. 18.5 Our Option to Buy Your Assets. Within thirty (30) days after expiration or non-renewal under this Agreement and/or default under your lease/sublease for the premises, we shall buy from you (and/or your affiliates) all assets of the Franchised Business. This includes all rights of yours in prospects and policyholders and all business records and information regarding those customers, prospects and policyholders, including the name and address of the applicant or policyholder and the date of expiration and policy limits of any insurance policy or renewal, rights to solicit the customers, prospects and policyholders for the sale of insurance products and renewal of policyholders' current policies, rights to new, renewal or other commissions and compensation from the insurance carriers or their agents, book of business, furniture, fixtures, and equipment. We may elect not to include the furniture, fixtures, equipment and the rights under the lease for the Approved Location in that purchase. We are not obligated to purchase the assets of the Franchised Business under any other circumstances, but we may offer to do so in our sole discretion. 18.5.1 For assets other than furniture, fixtures or equipment and the rights under the lease for the Approved Location, the purchase price will be an amount equal to one and one-half (1 1∕2) times the Commissions, net of Royalty Fees, received by the Franchised Business during the twelve-month period immediately preceding the closing of the purchase of the assets by us. The purchase price will be reduced by any current and long-term liabilities of the Franchised Business assumed by us and any amounts due to us from you at the time of sale. The purchase price for furniture, fixtures, equipment and the rights under the lease for the Approved Location (if we elect to purchase these assets) will be the fair market value as you and we agree. If + +Page 47 of 80 + + + + + +we and you cannot agree on the fair market value of such furniture, fixtures, equipment or the rights under the lease for the Approved Location, each party will select an independent appraiser who will each provide a written appraisal of such furniture, fixtures, equipment or rights under the lease for the Approved Location and we may elect to exercise the option granted hereunder by paying to you the average of the two appraisals. The total purchase price will be for the assets of the Franchised Business that we elect to purchase, which may not include the furniture, fixtures, equipment and rights under the lease for the Approved Location. We will pay the purchase price to you in twenty four (24) equal, monthly installments following the purchase, provided that you are in full compliance with the covenants contained in this Agreement. If, at any time during the twenty four (24) months following our purchase of your assets, as described above, you breach any covenant contained in this Agreement (or any other agreement between you and us), our obligation to pay the monthly installments will immediately cease. We have the right to offset amounts that you owe to us against any payment that we may be required to make pursuant to this Section 18.5. 18.5.2 The closing of the sale will occur within thirty (30) days after we exercise our option to purchase the Franchised Business or such later date as may be necessary to comply with applicable bulk sales or similar laws. At closing, we and you agree to sign and deliver all documents necessary to vest title in the assets purchased by us free and clear of all liens and encumbrances, except any assumed by us. We reserve the right to assign our repurchase rights described above or designate a substitute purchaser of the Franchised Business. 18.6 No Use of the Marks in Other Businesses. You agree, if you continue to operate or subsequently begin to operate any other business, that you will not use any reproduction, counterfeit copy, and/or colorable imitation of the Proprietary Marks, either in connection with such other business or the promotion thereof, which is likely to cause confusion, mistake, or deception, or which is likely to dilute our rights in and to the Proprietary Marks. You further agree not to use, in any manner whatsoever, any designation of origin, description, trademark, service mark, or representation that suggests or implies a past or present association or connection with us, the System, the equipment, and/or the Proprietary Marks. 18.7 Pay All Sums Due. You agree to promptly pay all sums owing to us and our affiliates (regardless whether those obligations arise under this Agreement or otherwise). In the event of termination for any of your defaults, those sums will include all damages, costs, and expenses (including without limitation reasonable attorneys' fees, court costs, discovery costs, and all other related expenses), that we incur as a result of the default. 18.8 Pay Damages. You agree to pay us all damages, costs, and expenses (including without limitation reasonable attorneys' fees, court costs, discovery costs, and all other related expenses) that we incur as a result of your default under this Agreement and/or subsequent to the termination or expiration of this Agreement in obtaining injunctive or other relief for the enforcement of any provisions of this Section 18, which will be in addition to amounts due to us under Section 18.11 below. 18.9 Return Confidential Information. You agree to immediately return to us the Manual, the Program Materials, and all other manuals, records, and instructions containing confidential information (including, without limitation, any copies thereof, even if such copies were made in violation of this Agreement), all of which are acknowledged to be our property. + +Page 48 of 80 + + + + + +18.10 Right to Enter and Continue Operations. In order to preserve the goodwill of the System following termination, we (or our designee) will have the right to enter the Franchised Business (without liability to you, your Principals, or otherwise) for the purpose continuing the Franchised Business's operation and maintaining the goodwill of the business. 18.11 Lost Future Royalties. If we terminate this Agreement based on your default, or if you abandon or otherwise cease to operate the Franchised Business, in addition to all other amounts due to us under this Agreement, you agree to pay to us, as liquidated damages, an amount calculated as follows: (a) the average of your monthly Royalty Fees that are due under this Agreement for the twelve (12) months immediately before your abandonment or our delivery of the notice of default (or, if you have been operating for less than 12 months, the average of your monthly Royalty Fees for the number of months you have operated the Franchised Business); (b) multiplied by the lesser of 36 or the number of months remaining in the then-current term of this Agreement under Section 2. 18.12 Our Rights. You agree not to do anything that would potentially interfere with or impede the exercise of our rights under this Section 18. 18.13 Offsets. We have the right to offset amounts that you owe to us against any payment that we may be required to make under this Agreement. 19 COVENANTS 19.1 Full Time Efforts. You agree that during the term of this Agreement, except as we have otherwise approved in writing, you (or the Operating Principal or Manager) will devote full time, energy, and best efforts to the management and operation of the Franchised Business. 19.2 Understandings. 19.2.1 You acknowledge and agree that: (a) pursuant to this Agreement, you will have access to valuable trade secrets, specialized training and Confidential Information from us and our affiliates regarding the development, operation, management, purchasing, sales and marketing methods and techniques of the System; (b) the System and the opportunities, associations and experience we have established and that you will have access to under this Agreement are of substantial and material value; (c) in developing the System, we and our affiliates have made and continue to make substantial investments of time, technical and commercial research, and money; (d) we would be unable to adequately protect the System and its trade secrets and Confidential Information against unauthorized use or disclosure and would be unable to adequately encourage a free exchange of ideas and information among franchisees in our system if franchisees were permitted to hold interests in Competitive Businesses (as defined below); and (e) restrictions on your right to hold interests in, or perform services for, Competitive Businesses will not unreasonably or unnecessarily hinder your activities. 19.2.2 As used in this Section 19, the term "Competitive Business" is agreed to mean any property and/or casualty insurance distribution business. 19.3 Covenant Not to Compete or Engage in Injurious Conduct. Accordingly, you covenant and agree that, during the term of this Agreement and for a continuous period of two (2) years after the expiration or termination of this Agreement, and/or a transfer as contemplated in Section 16 above, you will not directly, indirectly, for yourself, or through, on behalf of, or in conjunction with any party, in any manner whatsoever, do any of the following: + +Page 49 of 80 + + + + + +19.3.1 Divert or attempt to divert any actual or potential business or customer of any Goosehead Business to any competitor or otherwise take any action injurious or prejudicial to the goodwill associated with the Marks and the System. 19.3.2 Employ or seek to employ any person who is then employed by us or any other Goosehead Business franchisee or developer, or otherwise directly or indirectly induce such person to leave his or her employment. In addition to any other rights and remedies available to us under this Agreement, in the event of a violation of this Section, we will have the right to require you to pay to us (or such other Goosehead Business developer or franchisee, as the case may be) an amount equal to three times the annual salary of the person(s) involved in such violation, plus an amount equal to our costs and attorney's fees incurred in connection with such violation. 19.3.3 Own, maintain, develop, operate, engage in, franchise or license, make loans to, lease real or personal property to, be associated with, accept any compensation or remuneration from, and/or have any whatsoever interest in, or render services or give advice to, any Competitive Business. 19.4 Where Restrictions Apply. During the term of this Agreement, there is no geographical limitation on the restrictions set forth in Section 19.3 above. During the two-year period following the expiration, the non- renewal, or earlier termination of this Agreement, or a transfer as contemplated under Section 16 above, these restrictions will apply only within the city and county in which the Approved Location is situated. These restrictions will not apply to businesses that you operate that we (or our affiliates) have franchised to you pursuant to a valid franchise agreement. 19.5 Post-Term. You further covenant and agree that, for a continuous period of two (2) years after (1) the expiration of this Agreement, (2) the non-renewal of this Agreement, (3) the termination of this Agreement, and/or (4) a transfer as contemplated in Section 16 above: 19.5.1 you will not directly or indirectly, for yourself, or through, on behalf of, or in conjunction with any person, firm, partnership, corporation, or other entity, sell, assign, lease, and/or transfer the Approved Location to any person, firm, partnership, corporation, or other entity that you know, or have reason to know, intends to operate a Competitive Business at the Approved Location; and 19.5.2 you will not solicit, divert, or attempt to solicit or divert any actual or potential business or customer of the Franchised Business to any Competitive Business. 19.5.3 You agree that, by the terms of any conveyance, selling, assigning, leasing or transferring your interest in the Approved Location, you shall include these restrictive covenants as necessary to ensure that a Competitive Business that would violate this Section is not operated at the Approved Location for this two-year period, and you will take all steps necessary to ensure that these restrictive covenants become a matter of public record. 19.6 Periods of Non-Compliance. Any period of non-compliance with the requirements of this Section 19, whether such non-compliance takes place after termination, expiration, non-renewal, and/or a transfer, will not be credited toward satisfying the two-year obligation specified above. 19.7 Publicly-Held Entities. Section 19.3.3 above will not apply to your ownership of less than five percent (5%) beneficial interest in the outstanding equity securities of any publicly-held + +Page 50 of 80 + + + + + +corporation. As used in this Agreement, the term "publicly-held corporation" will be deemed to refer to a corporation which has securities that have been registered under the Securities Exchange Act of 1934. 19.8 Personal Covenants. You agree to require and obtain execution of covenants similar to those set forth in Sections 9.3, 11, 16, 18 above, and this Section 19 (as modified to apply to an individual), from your Managers, Producers and other managerial and/or executive staff, as well as your Principals. The covenants required by this section must be in the form provided in Exhibit F to this Agreement. If you do not obtain execution of the covenants required by this section and deliver to us those signed covenants, that failure will constitute a default under Section 17.2.6 above. 19.9 Construction. The parties agree that each of the foregoing covenants will be construed as independent of any other covenant or provision of this Agreement. We have the right to reduce in writing the scope of any part of this Section 19 and, if we do so, you agree to comply with the obligations as we have reduced them. 19.10 Claims Not a Defense. You agree that the existence of any claims you may have against us, whether or not arising from this Agreement, will not constitute a defense to our enforcement of the covenants in this Section 19. You agree to pay all costs and expenses (including without limitation reasonable attorneys' fees, court costs, discovery costs, and all other related expenses) that we incur in connection with the enforcement of this Section 19. 19.11 Covenant as to Anti-Terrorism Laws. You and the owners of your business ("Owners") agree to comply with and/or to assist us to the fullest extent possible in our efforts to comply with Anti-Terrorism Laws (as defined below). In connection with such compliance, you and the Owners certify, represent, and warrant that none of their respective property or interests are "blocked" under any of the Anti-Terrorism Laws and that neither you nor any of the Owners are in violation of any of the Anti-Terrorism Laws. You also agree not to knowingly hire or do business with (or continue to employ or do business with) any party who is blocked under any of the Anti-Terrorism Laws. The term "Anti-Terrorism Laws" means Executive Order 13224 issued by the President of the United States, as supplemented, the USA PATRIOT Act, and all other laws and regulations addressing or in any way relating to terrorist acts and/or acts of war. 19.12 Defaults. You acknowledge and agree that your violation of the terms of this Section 19 would result in irreparable injury to us for which no adequate remedy at law may be available, and you accordingly consent to the issuance of an injunction prohibiting any conduct in violation of the terms of this Section 19. 20 TAXES, PERMITS, AND INDEBTEDNESS 20.1 Payment of Taxes. You agree to promptly pay when due all taxes levied or assessed, including, without limitation, unemployment and sales taxes, and all accounts and other indebtedness of every kind that you incur in the conduct of the business franchised under this Agreement. You agree to pay us an amount equal to any sales tax, gross receipts tax, or similar tax imposed on us with respect to any payments that you make to us as required under this Agreement, unless the tax is credited against income tax that we otherwise pay to a state or federal authority. 20.2 Payment of Trade Creditors. You agree to promptly pay when due all trade creditors and vendors (including any that are affiliated with us) that supply goods or services to you and/or the Franchised Business. + +Page 51 of 80 + + + + + +20.3 Your Right to Contest Liabilities. If there is a bona fide dispute as to your liability for taxes assessed or other indebtedness, you may contest the validity or the amount of the tax or indebtedness in accordance with procedures of the taxing authority or applicable law; however, in no event will you permit a tax sale or seizure by levy of execution or similar writ or warrant, or attachment by a creditor, to occur against the premises of the Franchised Business, or any improvements thereon. 20.4 Compliance with Law. You agree to comply with all federal, state, and local laws, rules, and regulations, and to timely obtain any and all permits, certificates, or licenses necessary for the full and proper conduct of the business franchised under this Agreement, including, without limitation, licenses to do business, health certificates, fictitious name registrations, sales tax permits, and fire clearances. To the extent that the requirements of any such laws are in conflict with the terms of this Agreement, the Manual, or our other instructions, you agree to: (a) comply with said laws; (b) immediately provide us with written notice describing the nature of the conflict; and (c) cooperate with us and our counsel in developing a way to comply with the terms of this Agreement, as well as applicable law, to the extent that it is possible to do so. 20.5 Notice of Violations and Actions. You agree to notify us in writing within five (5) days after: (a) you receive notice of any health or safety violation, the commencement of any action, suit, or proceeding, and of the issuance of any order, writ, injunction, award, or decree of any court, agency, or other governmental instrumentality, (b) the occurrence of any accident or injury which may adversely affect the operation of the Franchised Business or your financial condition, or give rise to liability or a claim against either party to this Agreement, or (c) the discovery of any facts that may give rise to a professional liability claim against either party to this Agreement. 21 INDEPENDENT CONTRACTOR AND INDEMNIFICATION 21.1 Independent Contractor Relationship. The parties acknowledge and agree that: 21.1.1 this Agreement does not create a fiduciary relationship between them; 21.1.2 you are the only party that will be in day-to-day control of your franchised business, even though we will share the brand and Proprietary Marks as specified in this Agreement, and neither this Agreement nor any of the systems, guidance, computer programs, processes, or requirements under which you operate alter that basic fact; 21.1.3 nothing in this Agreement and nothing in our course of conduct is intended to make either party an agent, legal representative, subsidiary, joint venturer, partner, employee, or servant of the other for any purpose whatsoever; and 21.1.4 neither this Agreement nor our course of conduct is intended, nor may anything in this Agreement (nor our course of conduct) be construed, to state or imply that we are the employer of your employees and/or independent contractors, nor vice versa 21.2 Notice of Status. At all times during the term of this Agreement and any extensions hereof, you will hold yourself out to the public as an independent contractor operating the business pursuant to a franchise from us. You agree to take such action as may be necessary to do so, including, without limitation, exhibiting a notice of that fact in a conspicuous place at the Approved Location, the content of which we reserve the right to specify. + +Page 52 of 80 + + + + + +21.3 No Contracts in our Name. It is understood and agreed that, except as may be necessary for you to provide Products or Services to customers using the Proprietary Marks, nothing in this Agreement authorizes you to make any contract, agreement, warranty, or representation on our behalf, or to incur any debt or other obligation in our name; and that we will in no event assume liability for, or be deemed liable under this Agreement as a result of, any such action; nor will we be liable by reason of any act or omission in your conduct of the Franchised Business or for any claim or judgment arising therefrom against either party to this Agreement. 21.4 Indemnification. You agree to indemnify and hold harmless each of the Franchisor Parties against any and all Damages arising directly or indirectly from any Asserted Claim as well as from your breach of this Agreement. Your indemnity obligations will survive the expiration or termination of this Agreement, and will not be affected by the presence of any applicable insurance policies and coverages that we may maintain. 21.5 Definitions. As used in Section 21.4 above, the parties agree that the following terms will have the following meanings: 21.5.1 "Asserted Claim" means any allegation, claim or complaint that is the result of, or in connection with, your exercise of your rights and/or carrying out of your obligations under this Agreement (including any claim associated with your operation of the Franchised Business or otherwise), or any default by you under this Agreement, notwithstanding any claim that any Franchisor Party was or may have been negligent. 21.5.2 "Franchisor Parties" means us, our shareholders, parents, subsidiaries, and affiliates, and their respective officers, directors, employees, and agents. 21.5.3 "Damages" means all claims, demands, causes of action, suits, damages, liabilities, fines, penalties, assessments, judgments, losses, and expenses (including without limitation expenses, costs and lawyers' fees incurred for any indemnified party's primary defense or for enforcement of its indemnification rights). 22 FORCE MAJEURE 22.1 Impact. Neither party will be responsible to the other for non-performance or delay in performance occasioned by causes beyond its control, including without limiting the generality of the foregoing: (a) acts of nature; (b) acts of war, terrorism, or insurrection; (c) strikes, lockouts, labor actions, boycotts, floods, fires, hurricanes, tornadoes, and/or other casualties; and/or (d) our inability (and that of our affiliates and/or suppliers) to manufacture, purchase, and/or cause delivery of any services or products used in the operation of the Franchised Business. 22.2 Transmittal of Funds. The inability of either party to obtain and/or remit funds will be considered within control of such party for the purpose of Section 22.1 above. If any such delay occurs, any applicable time period will be automatically extended for a period equal to the time lost; provided, however, that the party affected makes reasonable efforts to correct the reason for such delay and gives to the other party prompt notice of any such delay; and further provided, however, that you will remain obligated to promptly pay all fees owing and due to us under this Agreement, without any such delay or extension. + +Page 53 of 80 + + + + + +23 APPROVALS AND WAIVERS 23.1 Request for Approval. Whenever this Agreement requires our prior approval or consent, you agree to make a timely written request to us therefor, and such approval or consent must be obtained in writing. 23.2 No Warranties or Guarantees. You acknowledge and agree that we make no warranties or guarantees upon which you may rely, and that we assume no liability or obligation to you, by providing any waiver, approval, consent, or suggestion to you in connection with this Agreement, or by reason of any neglect, delay, or denial of any request therefor. 23.3 No Waivers. No delay, waiver, omission, or forbearance on our part to exercise any right, option, duty, or power arising out of any breach or default by you or any other franchisee under any of the terms, provisions, covenants, or conditions of this Agreement, and no custom or practice by the parties at variance with the terms of this Agreement, will constitute our waiver of our right to enforce any such right, option, duty, or power as against you, or as to subsequent breach or default by you. If we accept late payments from you or any payments due, that will not be deemed to be our waiver of any earlier or later breach by you of any terms, provisions, covenants, or conditions of this Agreement. No course of dealings or course of conduct will be effective to amend the terms of this Agreement. 24 NOTICES + +Any and all notices required or permitted under this Agreement must be in writing and must be personally delivered, sent by certified U.S. mail, or by other means which affords the sender evidence of delivery, of rejected delivery, or attempted delivery to the respective parties at the addresses shown on the signature page of this Agreement, unless and until a different address has been designated by written notice to the other party. Any notice by a means that gives the sender evidence of delivery, rejected delivery, or delivery that is not possible because the recipient moved and left no forwarding address will be deemed to have been given at the date and time of receipt, rejected, and/or attempted delivery. The Manual, any changes that we make to the Manual, and/or any other written instructions that we provide relating to operational matters, are not considered to be "notices" for the purpose of the delivery requirements in this Section 24. 25 ENTIRE AGREEMENT AND AMENDMENT 25.1 Entire Agreement. This Agreement and the exhibits referred to in this Agreement constitute the entire, full, and complete Agreement between the parties to this Agreement concerning the subject matter hereof, and supersede all prior agreements. The parties confirm that: (a) they were not induced by any representations other than the words of this Agreement (and the FDD) before deciding whether to sign this Agreement; and (b) they relied only on the words printed in this Agreement in deciding whether to enter into this Agreement. However, nothing in this Section is intended as, nor will it be interpreted to be, a disclaimer by us of any representation made in our Franchise Disclosure Document ("FDD"), including the exhibits and any amendments to the FDD. 25.2 Amendment. Except for those changes that we are permitted to make unilaterally under this Agreement, no amendment, change, or variance from this Agreement will be binding on either party unless mutually agreed to by the parties and executed by their authorized officers or agents in writing. + +Page 54 of 80 + + + + + +26 SEVERABILITY AND CONSTRUCTION 26.1 Introductory Paragraphs. The parties agree that the introductory paragraphs of this Agreement, under the heading "Introduction," are accurate, and the parties agree to incorporate those paragraphs into the text of this Agreement as if they were printed here. 26.2 Severability. Except as expressly provided to the contrary herein, each portion, section, part, term, and/or provision of this Agreement will be considered severable; and if, for any reason, any section, part, term, and/or provision herein is determined to be invalid and contrary to, or in conflict with, any existing or future law or regulation by a court or agency having valid jurisdiction, such will not impair the operation of, or have any other effect upon, such other portions, sections, parts, terms, and/or provisions of this Agreement as may remain otherwise intelligible; and the latter will continue to be given full force and effect and bind the parties hereto; and said invalid portions, sections, parts, terms, and/or provisions will be deemed not to be a part of this Agreement. 26.3 No Third Party Rights. Except as expressly provided to the contrary herein, nothing in this Agreement is intended, nor will be deemed, to confer upon any person or legal entity other than you, we, and such of our respective successors and assigns as may be contemplated (and, as to you, permitted) by Section 16.4 above, any rights or remedies under or by reason of this Agreement. 26.4 Captions Don't Amend Terms. All captions in this Agreement are intended solely for the convenience of the parties, and no caption will be deemed to affect the meaning or construction of any provision hereof. 26.5 Including. The parties agree that when used in this Agreement, the terms "includes" and "including" means "including but not limited to". 26.6 Survival. All provisions of this Agreement which, by their terms or intent, are designed to survive the expiration or termination of this Agreement, will so survive the expiration and/or termination of this Agreement. 26.7 How We Exercise Our Rights. Although we may exercise any of our rights, carry out any of our obligations, or otherwise discharge any of our duties under this Agreement directly, through the use of employees, independent contractors, professional advisors (for example, a CPA), or otherwise, we will still remain responsible for the proper performance of our obligations to you under this Agreement. 26.8 Expenses. Each party will bear all of the costs of exercising its rights and carrying out its responsibilities under this Agreement, except as otherwise provided. 26.9 Counterparts. This Agreement may be signed in counterparts, and signature pages may be exchanged by fax, each such counterpart, when taken together with all other identical copies of this Agreement also signed in counterpart, will be considered as one complete Agreement. 27 APPLICABLE LAW AND DISPUTE RESOLUTION 27.1 Choice of Law. This Agreement takes effect when we accept and sign this document. This Agreement will be interpreted and construed exclusively under the laws of the State of Texas, which laws will prevail in the event of any conflict of law (without regard to, and without giving effect to, the application of Texas choice-of-law rules); provided, however, that if the covenants in Section 19 of this Agreement would not be enforced as written under + +Page 55 of 80 + + + + + +Texas law, then the parties agree that those covenants will instead be interpreted and construed under the laws of the state in which the Franchised Business is located. Nothing in this Section 27.1 is intended by the parties to invoke the application of any franchise, business opportunity, antitrust, implied covenant, unfair competition, fiduciary, and/or other doctrine of law of the State of Texas (or any other state) that would not otherwise apply without this Section 27.1. 27.2 Choice of Venue. Subject to Section 27.3 below, the parties agree that any action that you bring against us, in any court, whether federal or state, must be brought only within the state and judicial district in which we maintain our principal place of business. Any action that we bring against you in any court, whether federal or state, may be brought within the state and judicial district in which we maintain our principal place of business. 27.2.1 The parties agree that this Section 27.2 will not be construed as preventing either party from removing an action from state to federal court; provided, however, that venue will be as set forth above. 27.2.2 The parties hereby waive all questions of personal jurisdiction or venue for the purpose of carrying out this provision. 27.2.3 Any such action will be conducted on an individual basis, and not as part of a consolidated, common, or class action. 27.3 Mediation. Before any party may bring an action in court against the other, the parties agree that they must first meet to mediate the dispute (except as otherwise provided in Section 27.5 below). Any such mediation will be non-binding and will be conducted in accordance with the then-current rules for mediation of commercial disputes of JAMS, Inc. (formerly, "Judicial Arbitration and Mediation Services, Inc.") at its location nearest to our then-current principal place of business. 27.4 Parties Rights Are Cumulative. No right or remedy conferred upon or reserved to us or you by this Agreement is intended to be, nor will be deemed, exclusive of any other right or remedy herein or by law or equity provided or permitted, but each will be cumulative of every other right or remedy. 27.5 Injunctions. Nothing contained in this Agreement will bar our right to obtain injunctive relief in a court of competent jurisdiction against threatened conduct that will cause us loss or damages, under the usual equity rules, including the applicable rules for obtaining restraining orders and preliminary injunctions. 27.6 WAIVER OF JURY TRIALS. EACH PARTY TO THIS AGREEMENT IRREVOCABLY WAIVES TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM, WHETHER AT LAW OR IN EQUITY, BROUGHT BY EITHER OF THEM AGAINST THE OTHER, WHETHER OR NOT THERE ARE OTHER PARTIES IN SUCH ACTION OR PROCEEDING. 27.7 MUST BRING CLAIMS WITHIN ONE YEAR. EACH PARTY TO THIS AGREEMENT AGREES THAT ANY AND ALL CLAIMS AND ACTIONS ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE PARTIES' RELATIONSHIP, AND/OR YOUR OPERATION OF THE FRANCHISED BUSINESS, BROUGHT BY ANY PARTY HERETO AGAINST THE OTHER, SHALL BE COMMENCED WITHIN ONE (1) YEAR FROM THE OCCURRENCE OF THE FACTS GIVING RISE TO SUCH CLAIM OR ACTION, OR, IT IS EXPRESSLY ACKNOWLEDGED AND AGREED BY ALL PARTIES, SUCH CLAIM OR ACTION SHALL BE IRREVOCABLY BARRED. + +Page 56 of 80 + + + + + +27.8 WAIVER OF PUNITIVE DAMAGES. EACH PARTY TO THIS AGREEMENT HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW ANY RIGHT TO OR CLAIM OF ANY PUNITIVE OR EXEMPLARY DAMAGES AGAINST THE OTHER, AND AGREE THAT IN THE EVENT OF A DISPUTE BETWEEN THEM EACH SHALL BE LIMITED TO THE RECOVERY OF ANY ACTUAL DAMAGES SUSTAINED BY IT. 27.9 Payment of Legal Fees. You agree to pay us all damages, costs and expenses (including without limitation reasonable attorneys' fees, court costs, discovery costs, and all other related expenses) that we incur after the termination or expiration of the franchise granted under this Agreement in: (a) obtaining injunctive or other relief for the enforcement of any provisions of this Agreement (including without limitation Sections 9 and 17 above); and/or (b) successfully defending a claim from you that we misrepresented the terms of this Agreement, fraudulently induced you to sign this Agreement, that the provisions of this Agreement are not fair, were not properly entered into, and/or that the terms of this Agreement (as it may be amended by its terms) do not exclusively govern the parties' relationship. 28 ACKNOWLEDGMENTS 28.1 Your Investigation of the Franchised Business Possibilities. You acknowledge and agree that you have conducted an independent investigation of the business franchised under this Agreement, recognize that this business venture involves business risks, and that your success will be largely dependent upon your ability (or, if you are an entity, your owners as independent businesspersons). 28.2 No Warranties or Guarantees. We expressly disclaim the making of, and you acknowledge and agree that you have not received, any warranty or guarantee, express or implied, as to the potential volume, profits, or success of the business venture contemplated by this Agreement. 28.3 Receipt of FDD and Complete Agreement. You acknowledge and agree receipt of a copy of this Agreement, the exhibit(s), and agreements relating to this Agreement (if any), with all of the blank lines filled in, with ample time within which to review with applicable advisors. You also acknowledge that you received the FDD at least fourteen (14) days before the date on which this Agreement was signed. 28.4 You Have Read the Agreement. You acknowledge and agree that you have read and understood the FDD, this Agreement, and the exhibits to this Agreement. 28.5 Your Advisors. You acknowledge that we have recommended that you seek advice from advisors of your own choosing (including a lawyer and an accountant) about the potential benefits and risks of entering into this Agreement, and that you have had sufficient time and opportunity to consult with those advisors. 28.6 No Conflicting Obligations. Each party represents and warrants to the others that there are no other agreements, court orders, or any other legal obligations that would preclude or in any manner restrict such party from: (a) negotiating and entering into this Agreement; (b) exercising its rights under this Agreement; and/or (c) fulfilling its responsibilities under this Agreement. 28.7 Your Responsibility for the Choice of the Approved Location. You acknowledge and agree that you have sole and complete responsibility for the choice of the Approved Location; that we have not (and will not be deemed to have, even by our approval of the site that is the Approved Location) given any representation, promise, or guarantee of your success at the + +Page 57 of 80 + + + + + +Approved Location; and that you will be solely responsible for your own success at the Approved Location. 28.8 Your Responsibility for Operation of the Franchised Business. Although we retain the right to establish and periodically modify System standards, which you have agreed to maintain in the operation of your Franchised Business, you retain the right and sole responsibility for the day-to-day management and operation of the Franchised Business and the implementation and maintenance of system standards at the Franchised Business. 28.9 Different Franchise Offerings to Others. You acknowledge and agree that we may modify the terms under which we will offer franchises to other parties in any manner and at any time, which offers and agreements have or may have terms, conditions, and obligations that may differ from the terms, conditions, and obligations in this Agreement. 28.10 Our Advice. You acknowledge and agree that our advice is just that; that our advice is not a guarantee of success; and that you are the party that must reach and implement your own decisions about how to operate your Franchised Business on a day-to-day basis under the System. 28.11 Your Independence. You acknowledge and agree that: 28.11.1 you are the only party that employs your employees (even though we may provide you with advice, guidance, and training); 28.11.2 we are not your employer nor are we the employer of any of your staff, and even if we express an opinion or provide advice, we will play no role in your decisions regarding their employment (including matters such as recruitment, hiring, compensation, scheduling, employee relations, labor matters, review, discipline, and/or dismissal); 28.11.3 the guidance that we provide, and requirements under which you will operate, are intended to promote and protect the value of the brand and the Proprietary Marks; 28.11.4 when forming and in operating your business, you had to adopt standards to operate that business, and that instead of developing and implementing your own standards (or those of another party), you chose to adopt and implement our standards for your business (including our System and the requirements under this Agreement); and 28.11.5 you have made (and will remain responsible at all times for) all of the organizational and basic decisions about establishing and forming your entity, operating your business (including adopting our standards as your standards), and hiring employees and employment matters (including matters such as recruitment, hiring, compensation, scheduling, employee relations, labor matters, review, discipline, and/or dismissal), engaging professional advisors, and all other facets of your operation. 28.12 Success Depends on You. You acknowledge and agree that the success of the business venture contemplated under this Agreement is speculative and depends, to a large extent, upon your ability as an independent businessperson, your active participation in the daily affairs of the business, market conditions, area competition, availability of product, quality of services provided as well as other factors. We do not make any representation or warranty express or implied as to the potential success of the business venture contemplated hereby. + +Page 58 of 80 + + + + + +28.13 Two or More Signatories. If two or more persons are signing this Agreement as the "Franchisee" (each, a "Signatory"), the parties agree that: 28.13.1 Each Signatory will have the power to individually bind "Franchisee" with respect to us and third parties; 28.13.2 We have the right to treat each Signatory as having the full authority to bind all other Signatories in any and all matters; 28.13.3 We have the right to treat each Signatory as if s/he represents and can act on behalf of all the other Signatory(ies) in all matters; 28.13.4 Even though there may be more than one Signatory, all of the Signatories' rights will be one and none of the Signatories will have the right to exercise any right independent of (and/or apart from) one another; 28.13.5 We have the right to communicate with or provide notice to any Signatory, and such communication or notice will be deemed as having been given to all Signatories; and 28.13.6 If there is a conflict among the Signatories (including us receiving conflicting information from or requests between the Signatories), we have the right to select from among any conflicting or inconsistent requests by, or information from, any of the Signatories, and our selection in such case will be final and dispositive with respect to any such conflict. 28.14 General Release. If this Agreement is not the first contract between you (and your affiliates) and us (and our affiliates), then you agree to the following: + +You (on behalf of yourself and your parent, subsidiaries and affiliates and their respective past and present members, officers, directors, members, managers, shareholders, agents and employees, in their corporate and individual capacities) and all guarantors of your obligations under this Agreement (collectively, "Releasors") freely and without any influence forever release and covenant not to sue us, our parent, subsidiaries and affiliates and their respective past and present officers, directors, shareholders, agents and employees, in their corporate and individual capacities (collectively "Releasees"), with respect to any and all claims, demands, liabilities and causes of action of whatever kind or nature, whether known or unknown, vested or contingent, suspected or unsuspected (collectively, "claims"), which any Releasor now owns or holds or may at any time have owned or held, including, without limitation, claims arising under federal, state and local laws, rules and ordinances and claims arising out of, or relating to this Agreement and all other agreements between any Releasor and any Releasee, the sale of any franchise to any Releasor, the development and operation of the Goosehead Businesses and the development and operation of all other businesses operated by any Releasor that are franchised by any Releasee. You expressly agree that fair consideration has been given by us for this General Release and you fully understand that this is a negotiated, complete and final release of all claims. This General Release does not release any claims arising from representations made in our Franchise Disclosure Document and its exhibits or otherwise impair or affect any claims arising after the date of this Agreement. + +***** + +Page 59 of 80 + + + + + +IN WITNESS WHEREOF, the parties hereto have duly signed and delivered this Agreement in duplicate on the day and year first above written. Goosehead Insurance Agency, LLC Franchisor Franchisee Entity + +By: By: + +Name: Name: + +Title: Title: + +Effective Date: + +Address for Notices: Address for Notices: + +1500 Solana Blvd., Suite 4500 Westlake, Texas 76262 Fax: Fax: Attn: Attn: + +Page 60 of 80 + + + + + +GOOSEHEAD INSURANCE AGENCY, LLC FRANCHISE AGREEMENT EXHIBIT B GUARANTEE, INDEMNIFICATION, AND ACKNOWLEDGMENT + +In order to induce Goosehead Insurance Agency, LLC ("Franchisor") to sign the Goosehead Insurance Franchise Agreement between Franchisor and ("Franchisee"), dated , 201 (the "Agreement"), each of the undersigned parties, jointly and severally, hereby unconditionally guarantee to Franchisor and its successors and assigns that all of Franchisee's obligations (monetary and otherwise) under the Agreement as well as any other contract between Franchisee and Franchisor (and/or Franchisor's affiliates) will be punctually paid and performed. + +Each individual signing this Personal Guarantee acknowledges and agrees, jointly and severally, that: • Upon Franchisor's demand, s/he will immediately make each payment required of Franchisee under the Agreement and/or any other contract with Franchisor and/or its affiliates. • S/he waives any right to require Franchisor to: (a) proceed against Franchisee for any payment required under the Agreement (and/or any other contract with Franchisor and/or its affiliates); (b) proceed against or exhaust any security from Franchisee; (c) pursue or exhaust any remedy, including any legal or equitable relief, against Franchisee; and/or (d) give notice of demand for payment by Franchisee. • Without affecting the obligations of the undersigned persons under this Guarantee, Franchisor may, without notice to the undersigned, extend, modify, or release any indebtedness or obligation of Franchisee, or settle, adjust, or compromise any claims against Franchisee. Each of the undersigned persons waive notice of amendment of the Agreement (and any other contract with Franchisor and Franchisor's affiliates) and notice of demand for payment by Franchisee, and agree to be bound by any and all such amendments and changes to the Agreement (and any other contract with Franchisor and Franchisor's affiliates). • S/he will defend, indemnify and hold Franchisor harmless against any and all losses, damages, liabilities, costs, and expenses (including without limitation reasonable attorneys' fees, court costs, discovery costs, and all other related expenses) resulting from, consisting of, or arising out of or in connection with any failure by Franchisee to perform any obligation of Franchisee under the Agreement (and any other contract with Franchisor and Franchisor's affiliates) and/or any amendment to the Agreement. • S/he will be personally bound by all of Franchisee's covenants, obligations, and promises in the Agreement. • S/he agrees to be individually bound by all of Franchisee's covenants, obligations, and promises in the Agreement, which include, but are not limited to, the covenants in the following Sections of the Agreement: Section 9.3 (generally regarding trademarks), Section 11 (generally regarding confidentiality), Section 16 (generally regarding Transfers), Section 18 (generally regarding obligations upon termination or expiration of this Agreement), and Section 19 (generally regarding covenants against competition) of the Agreement. + +Page 61 of 80 + + + + + +● S/he understands that: (a) this Guarantee does not grant them any rights under the Agreement (including but not limited to the right to use any of Franchisor's marks such as the "Goosehead Insurance" marks) and/or the system licensed to Franchisee under the Agreement; (b) that they have read, in full, and understand, all of the provisions of the Agreement that are referred to above in this paragraph, and that they intend to fully comply with those provisions of the Agreement as if they were printed here; and (c) that they have had the opportunity to consult with a lawyer of their own choosing in deciding whether to sign this Guarantee. + +This Guarantee will be interpreted and construed in accordance with Section 27 of the Agreement (including but not limited to the waiver of punitive damages, waiver of jury trial, agreement to bring claims within one year, and agreement not to engage in class or common actions). Among other things, that means that this Guarantee will be interpreted and construed exclusively under the laws of the State of Texas, and that in the event of any conflict of law, Texas law will prevail (without applying Texas conflict of law rules). + +IN WITNESS WHEREOF, each of the undersigned persons has signed this Guarantee as of the date of the Agreement. (in his/her personal capacity) (in his/her personal capacity) (in his/her personal capacity) + +Printed Name: Printed Name: Printed Name: + +Date: Date: Date: + +Home Address: Home Address: Home Address: + +Page 62 of 80 + + + + + +GOOSEHEAD INSURANCE AGENCY, LLC] FRANCHISE AGREEMENT EXHIBIT C LIST OF PRINCIPALS Name of Principal Home Address Interest % + +Initials Franchisee Franchisor + +Page 63 of 80 + + + + + +GOOSEHEAD INSURANCE AGENCY, LLC FRANCHISE AGREEMENT EXHIBIT D + +AUTHORIZATION AGREEMENT FOR ACH PAYMENTS (DIRECT DEBITS FOR ROYALTY, MARKETING CONTRIBUTION, AND OTHER FEES) (Name of Person or Legal Entity) + +(ID Number) + +The undersigned depositor ("Depositor" or "Franchisee") hereby authorizes Goosehead Insurance Agency, LLC ("Franchisor") to initiate debit entries and/or credit correction entries to the undersigned's checking and/or savings account(s) indicated below and the depository designated below ("Depository" or "Bank") to debit or credit such account(s) pursuant to our instructions. Depository Branch City State Zip Code Bank Transit/ABA Number Account Number This authorization is to remain in full and force and effect until sixty days after we have received written notification from Franchisee of its termination. Printed Name of Depositor: + +Signed By: + +Printed Name: + +Title: + +Date: + +Page 64 of 80 + + + + + +GOOSEHEAD INSURANCE AGENCY, LLC FRANCHISE AGREEMENT EXHIBIT E ADA CERTIFICATION + +Goosehead Insurance Agency, LLC ("Franchisor" or "us") and ("Franchisee" or "you") are parties to a franchise agreement dated , 201___ (the "Franchise Agreement") for the operation of a Franchised Business at (the "Franchised Business"). • In accordance with Section 5.6.2 of the Franchise Agreement, you certify to us that, to the best of your knowledge, the Franchised Business and its adjacent areas comply with all applicable federal, state, and local accessibility laws, statutes, codes, rules, regulations, and standards, including but not limited to the Americans with Disabilities Act. • You acknowledge that you are an independent contractor and the requirement of this certification by Franchisor does not constitute ownership, control, leasing, or operation of the Franchised Business. • You acknowledge that we have relied on the information contained in this certification. • You agree to indemnify us and our officers, directors, members, managers, shareholders, and employees in connection with any and all claims, losses, costs, expenses, liabilities, compliance costs, and damages incurred by the indemnified party(ies) as a result of any matters associated with your compliance with the Americans with Disabilities Act, as well as the costs (including without limitation reasonable attorneys' fees, court costs, discovery costs, and all other related expenses) related to the same. Acknowledged and Agreed: Franchisee: By: Printed Name: Title: + +Page 65 of 80 + + + + + +GOOSEHEAD INSURANCE AGENCY, LLC FRANCHISE AGREEMENT EXHIBIT F-1 + +SAMPLE FORM OF CONFIDENTIALITY AND NON-DISCLOSURE AGREEMENT (to be signed by franchisee with its executive/management personnel) + +THIS CONFIDENTIALITY AND NON-DISCLOSURE AND AGREEMENT ("Agreement") is made this day of , 201 , by and between (the "Franchisee"), and , who is a Principal, Manager, supervisor, member, partner, Producer, or employee with Franchisee (the "Member"). + +Background: + +A. Goosehead Insurance Agency, LLC ("Franchisor") owns a format and system (the "System") relating to the establishment and operation of "Goosehead Insurance" businesses providing insurance services, including home insurance, automobile insurance, life insurance, watercraft insurance, and business insurance, operating in structures that bear Franchisor's interior and exterior trade dress, and under its Proprietary Marks, as defined below (each, a "Goosehead Business"). + +B. Franchisor identifies Goosehead Businesses by means of certain trade names, service marks, trademarks, logos, emblems, and indicia of origin (including for example the mark "Goosehead Insurance") and certain other trade names, service marks, and trademarks that Franchisor currently and may in the future designate in writing for use in connection with the System (the "Proprietary Marks"). + +C. Franchisor and Franchisee have executed a Franchise Agreement ("Franchise Agreement") granting Franchisee the right to operate a Goosehead Business (the "Franchised Business") and to offer and sell products, services, and other ancillary products approved by Franchisor and use the Proprietary Marks in connection therewith under the terms and conditions of the Franchise Agreement. + +D. The Member, by virtue of his or her position with Franchisee, will gain access to certain of Franchisor's Confidential Information, as defined herein, and must therefore be bound by the same confidentiality provisions that Franchisee is bound by. + +IN CONSIDERATION of these premises, the conditions stated herein, and for other good and valuable consideration, the sufficiency and receipt of which are acknowledged, the parties agree as follows: + +1. Confidential Information. Member agrees that Member will not, during the term of the Franchise Agreement or thereafter, communicate, divulge, or use for the benefit of any other person, persons, partnership, entity, association, or corporation any confidential information, knowledge, or know-how concerning the methods of operation of the business franchised thereunder which may be communicated to Member or of which Member may be apprised by virtue of your operation under the terms of the Franchise Agreement. Any and all information, knowledge, know-how, and techniques which Franchisor designates as confidential will be deemed confidential for purposes of this Agreement, except information which Franchisee can demonstrate came to its attention before disclosure thereof by Franchisor; or which, at or after the time of disclosure by Franchisor to Franchisee, had become or later becomes a part of the public domain, through publication or communication by others. Page 66 of 80 + + + + + +2. Injunctive Relief. Member acknowledges that any failure to comply with the requirements of this Agreement will cause Franchisor irreparable injury, and Member agrees to pay all costs (including without limitation reasonable attorneys' fees, court costs, discovery costs, and all other related expenses) incurred by Franchisor in obtaining specific performance of, or an injunction against violation of, the requirements of this Agreement. + +3. Severability. All agreements and covenants contained herein are severable. If any of them, or any part or parts of them, will be held invalid by any court of competent jurisdiction for any reason, then the Member agrees that the court will have the authority to reform and modify that provision in order that the restriction will be the maximum necessary to protect Franchisor's and/or Member's legitimate business needs as permitted by applicable law and public policy. In so doing, the Member agrees that the court will impose the provision with retroactive effect as close as possible to the provision held to be invalid. + +4. Delay. No delay or failure by the Franchisor or Franchisee to exercise any right under this Agreement, and no partial or single exercise of that right, will constitute a waiver of that or any other right provided herein, and no waiver of any violation of any terms and provisions of this Agreement will be construed as a waiver of any succeeding violation of the same or any other provision of this Agreement. + +5. Third-Party Beneficiary. Member hereby acknowledges and agrees that Franchisor is an intended third-party beneficiary of this Agreement with the right to enforce it, independently or jointly with Franchisee. + +IN WITNESS WHEREOF, the Franchisee and the Member attest that each has read and understands the terms of this Agreement, and voluntarily signed this Agreement on the date first written above. FRANCHISEE MEMBER + +By: By: + +Name: Name: + +Title: Title: + +Page 67 of 80 + + + + + +GOOSEHEAD INSURANCE AGENCY, LLC FRANCHISE AGREEMENT EXHIBIT F-2 SAMPLE FORM OF IN-TERM NON-COMPETITION AGREEMENT (to be signed by franchisee with its executive/management personnel) + +THIS IN-TERM NON-COMPETITION AGREEMENT ("Agreement") is made this day of , 201 , by and between (the "Franchisee"), and , who is a Principal, Manager, supervisor, member, partner, Producer or employee with Franchisee (the "Member"). + +Background: + +A. Goosehead Insurance Agency, LLC ("Franchisor") owns a format and system (the "System") relating to the establishment and operation of "Goosehead Insurance" businesses providing insurance services, including home insurance, automobile insurance, life insurance, watercraft insurance, and business insurance, operating in structures that bear Franchisor's interior and exterior trade dress, and under its Proprietary Marks, as defined below (each, a "Goosehead Business"). + +B. Franchisor identifies Goosehead Businesses by means of certain trade names, service marks, trademarks, logos, emblems, and indicia of origin (including for example the mark "Goosehead Insurance") and certain other trade names, service marks, and trademarks that Franchisor currently and may in the future designate in writing for use in connection with the System (the "Proprietary Marks"). + +C. Franchisor and Franchisee have executed a Franchise Agreement ("Franchise Agreement") granting Franchisee the right to operate a Goosehead Business (the "Franchised Business") and to offer and sell products, services, and other ancillary products approved by Franchisor and use the Proprietary Marks in connection therewith under the terms and conditions of the Franchise Agreement. + +D. The Member, by virtue of his or her position with Franchisee, will gain access to certain of Franchisor's Confidential Information, as defined herein, and must therefore be bound by the same non-competition provisions that Franchisee is bound by. + +IN CONSIDERATION of these premises, the conditions stated herein, and for other good and valuable consideration, the sufficiency and receipt of which are acknowledged, the parties agree as follows: + +1. Covenants Not to Compete. + +(a) Member specifically acknowledges that, pursuant to the Franchise Agreement, and by virtue of his/her position with Franchisee, Member will receive valuable specialized training and confidential information, including, without limitation, information regarding the operational, sales, promotional, and marketing methods and techniques of Franchisor and the System. + +(b) Member covenants and agrees that during the term of the Franchise Agreement, except as otherwise approved in writing by Franchisor, Member will not, either directly or indirectly, for itself, or through, on behalf of, or in conjunction with any person, persons, partnership, corporation, or entity: + +Page 68 of 80 + + + + + +(i) Solicit, divert or attempt to solicit or divert any business or customer of the Franchised Business or of any Franchised Business using the System to a Competitive Business, by direct or indirect inducement or otherwise, or do or perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated with Franchisor's Proprietary Marks and the System. + +(ii) Employ or seek to employ any person who is at that time employed by Franchisor, Franchisee, any other franchisee, master franchisee, developer, or development agent, or otherwise directly or indirectly induce such person to leave his or her employment; or + +(iii) Either directly or indirectly for him/herself or on behalf of, or in conjunction with any person, persons, partnership, corporation, or entity, own, maintain, operate, engage in, be employed by or accept any compensation or remuneration from, or have any interest in any Competitive Business. + +(c) As used in this Agreement, the term "Competitive Business" is agreed to mean any property and/or casualty insurance distribution business. + +2. Injunctive Relief. Member acknowledges that any failure to comply with the requirements of this Agreement will cause Franchisor irreparable injury, and Member agrees to pay all costs (including without limitation reasonable attorneys' fees, court costs, discovery costs, and all other related expenses) incurred by Franchisor in obtaining specific performance of, or an injunction against violation of, the requirements of this Agreement. + +3. Severability. All agreements and covenants contained herein are severable. If any of them, or any part or parts of them, will be held invalid by any court of competent jurisdiction for any reason, then the Member agrees that the court will have the authority to reform and modify that provision in order that the restriction will be the maximum necessary to protect Franchisor's and/or Member's legitimate business needs as permitted by applicable law and public policy. In so doing, the Member agrees that the court will impose the provision with retroactive effect as close as possible to the provision held to be invalid. + +4. Delay. No delay or failure by the Franchisor or Franchisee to exercise any right under this Agreement, and no partial or single exercise of that right, will constitute a waiver of that or any other right provided herein, and no waiver of any violation of any terms and provisions of this Agreement will be construed as a waiver of any succeeding violation of the same or any other provision of this Agreement. + +5. Third-Party Beneficiary. Member hereby acknowledges and agrees that Franchisor is an intended third-party beneficiary of this Agreement with the right to enforce it, independently or jointly with Franchisee. + +Page 69 of 80 + + + + + +IN WITNESS WHEREOF, the Franchisee and the Member attest that each has read and understands the terms of this Agreement, and voluntarily signed this Agreement on the date first written above. FRANCHISEE By: Name: Title: + +MEMBER By: Name: Title: + +Page 70 of 80 + + + + + +GOOSEHEAD INSURANCE AGENCY, LLC FRANCHISE AGREEMENT EXHIBIT F-3 SAMPLE FORM OF POST-TERM NON-COMPETITION AGREEMENT (to be signed by franchisee with its executive/management personnel) + +THIS POST-TERM NON-COMPETITION AGREEMENT ( "Agreement") is made this day of , 201 , by and between (the "Franchisee"), and , who is a Principal, Manager, supervisor, member, partner, Producer or employee with Franchisee (the "Member"). + +Background: + +A. Goosehead Insurance Agency, LLC ("Franchisor") owns a format and system (the "System") relating to the establishment and operation of "Goosehead Insurance" businesses providing insurance services, including home insurance, automobile insurance, life insurance, watercraft insurance, and business insurance, operating in structures that bear Franchisor's interior and exterior trade dress, and under its Proprietary Marks, as defined below (each, a "Goosehead Business"). + +B. Franchisor identifies Goosehead Businesses by means of certain trade names, service marks, trademarks, logos, emblems, and indicia of origin (including for example the mark "Goosehead Insurance") and certain other trade names, service marks, and trademarks that Franchisor currently and may in the future designate in writing for use in connection with the System (the "Proprietary Marks"). + +C. Franchisor and Franchisee have executed a Franchise Agreement ("Franchise Agreement") granting Franchisee the right to operate a Goosehead Business (the "Franchised Business") and to offer and sell products, services, and other ancillary products approved by Franchisor and use the Proprietary Marks in connection therewith under the terms and conditions of the Franchise Agreement. + +D. The Member, by virtue of his or her position with Franchisee, will gain access to certain of Franchisor's Confidential Information, as defined herein, and must therefore be bound by the same non-competition provisions that Franchisee is bound by. + +IN CONSIDERATION of these premises, the conditions stated herein, and for other good and valuable consideration, the sufficiency and receipt of which are acknowledged, the parties agree as follows: + +1. Covenants Not to Compete. Member specifically acknowledges that, pursuant to the Franchise Agreement, and by virtue of his/her position with Franchisee, Member will receive valuable specialized training and confidential information, including, without limitation, information regarding the operational, sales, promotional, and marketing methods and techniques of Franchisor and the System. + +(a) Member covenants and agrees that during the Post-Term Period (defined below), except as otherwise approved in writing by Franchisor, Member will not, either directly or indirectly, for itself, or through, on behalf of, or in conjunction with any person, persons, partnership, corporation, or entity, Member will not own, maintain, operate, engage in, be associated with or accept any compensation or remuneration from, or have any interest in or render services or give + +Page 71 of 80 + + + + + +advice to any Competitive Business and which business is, or is intended to be, located within the city or county in which the Approved Location is situated. + +(b) Member covenants and agrees that during the Post-Term Period, Member will not, either directly or indirectly, solicit, divert, or attempt to solicit or divert any actual or potential business or customer of the Franchised Business to any Competitive Business. + +(c) As used in this Agreement, the term "Competitive Business" is agreed to mean any property and/or casualty insurance distribution business. + +(d) As used in this Agreement, the term "Post-Term Period" means a continuous uninterrupted period of two (2) years from the date of: (i) a transfer as contemplated under Section 16 of the Franchise Agreement; (ii) expiration or termination of the Franchise Agreement (regardless of the cause for termination); (iii) termination of Member's employment with Franchisee; and/or (iv) a final order of a duly authorized arbitrator, panel of arbitrators, or a court of competent jurisdiction (after all appeals have been taken) with respect to any of the foregoing or with respect to the enforcement of this Agreement; either directly or indirectly (through, on behalf of, or in conjunction with any persons, partnership, corporation or entity). Any period of non-compliance with the requirements of this Section 1, whether such non-compliance takes place after termination, expiration, non-renewal, and/or a transfer, will not be credited toward satisfying the two-year obligation specified above. + +2. Injunctive Relief. Member acknowledges that any failure to comply with the requirements of this Agreement will cause Franchisor irreparable injury, and Member agrees to pay all costs (including without limitation reasonable attorneys' fees, court costs, discovery costs, and all other related expenses) incurred by Franchisor in obtaining specific performance of, or an injunction against violation of, the requirements of this Agreement. + +3. Severability. All agreements and covenants contained herein are severable. If any of them, or any part or parts of them, will be held invalid by any court of competent jurisdiction for any reason, then the Member agrees that the court will have the authority to reform and modify that provision in order that the restriction will be the maximum necessary to protect Franchisor's and/or Member's legitimate business needs as permitted by applicable law and public policy. In so doing, the Member agrees that the court will impose the provision with retroactive effect as close as possible to the provision held to be invalid. + +4. Delay. No delay or failure by the Franchisor or Franchisee to exercise any right under this Agreement, and no partial or single exercise of that right, will constitute a waiver of that or any other right provided herein, and no waiver of any violation of any terms and provisions of this Agreement will be construed as a waiver of any succeeding violation of the same or any other provision of this Agreement. + +5. Third-Party Beneficiary. Member hereby acknowledges and agrees that Franchisor is an intended third-party beneficiary of this Agreement with the right to enforce it, independently or jointly with Franchisee. + +Page 72 of 80 + + + + + +IN WITNESS WHEREOF, the Franchisee and the Member attest that each has read and understands the terms of this Agreement, and voluntarily signed this Agreement on the date first written above. FRANCHISEE By: Name: Title: + +MEMBER By: Name: Title: + +Page 73 of 80 + + + + + +GOOSEHEAD INSURANCE AGENCY, LLC FRANCHISE AGREEMENT EXHIBIT G + +SITE SELECTION ADDENDUM + +Goosehead Insurance Agency, LLC ("Franchisor" or "us" or "we") and ("Franchisee" or "you") have this day of , 201 entered into a Goosehead Insurance Franchise Agreement ("Franchise Agreement") and wish to supplement its terms as set out below in this Site Selection Addendum (the "Addendum"). The parties agree as follows: + +AGREEMENT + +1. Time to Locate Site: Within ninety (90) days after the date of this Addendum, you agree to acquire or lease/sublease, at your own expense, commercial real estate that is properly zoned for the use of the business that you will conduct under the Franchise Agreement (the "Franchised Business") at a site that we will have approved in writing as provided below. + +a. Such location must be within the following area: (the "Site Selection Area"). + +b. The only reason that the Site Selection Area is described is for the purpose of selecting a site for the Franchised Business. + +c. For purposes of this Addendum, the term "Search Period" means ninety (90) days from the date of this Addendum, or the period from the date of this Addendum until we have approved of a location for your Franchised Business, whichever event first occurs. + +d. If you do not acquire or lease a site (that we have approved in writing) for the Franchised Business in accordance with this Addendum by not later than ninety (90) days after the date of this Addendum, that will constitute a default under Section 17.2 of the Franchise Agreement and also under this Addendum, and we will have the right to terminate the Franchise Agreement and this Addendum pursuant to the terms of Section 17.2 of the Franchise Agreement. + +2. Site Evaluation Services: We will provide you with our site selection guidelines, including our minimum standards for a location for the Franchised Business, and such site selection counseling and assistance as we may deem advisable. If we deem on-site evaluation to be necessary and appropriate, we will conduct up to two (2) on-site evaluations at our cost and expense. If we perform any additional on-site evaluations, you must reimburse us, as applicable, for all reasonable expenses that we incur in connection with such on-site evaluation, including, without limitation, the cost of travel, lodging and meals. We will not provide on site evaluation for any proposed site before we have received from you a completed site approval form for the site (prepared as set forth in Section 3 below). + +3. Site Selection Package Submission and Approval: You must submit to us, in the form that we specify: (a) a completed site approval form (in the form that we require); (b) such other information or materials that we may reasonably require; and (c) an option contract, letter of intent, or other evidence satisfactory to us that confirms your favorable prospects for obtaining the site. You acknowledge that time is of the essence. We will have thirty (30) days after receipt of all such information and materials from you to approve or disapprove the proposed site as the location for the Franchised Business. We have the right to approve or disapprove any such site to serve as the + +Page 74 of 80 + + + + + +Approved Location for the Franchised Business. If we do not approve a proposed site by giving you written notice within the 30-day period, then we will be deemed to have disapproved the site. + +4. Lease Responsibilities: After we have approved a site and before the expiration of the Search Period, you must execute a lease, which must be coterminous with the Franchise Agreement, or a binding agreement to purchase the site. Our approval of any lease is conditioned upon inclusion in the lease of the Lease Rider attached to the Franchise Agreement as Exhibit H. However, even if we examine the Lease, we are not responsible for review of the Lease for any terms other than those contained in the Lease Rider. + +5. Approved Location: After we have approved the location for the Franchised Business and you have leased or acquired that location, the location will constitute the Approved Location described in Section 1.2 of the Franchise Agreement. The Approved Location will be specified on Exhibit A to the Franchise Agreement, and will become a part the Franchise Agreement. + +a. You Franchisee hereby acknowledge and agree that our approval of a site does not constitute an assurance, representation, or warranty of any kind, express or implied, as to the suitability of the site for the Franchised Business or for any other purpose. Our approval of the site indicates only that we believe the site complies with our minimum acceptable criteria solely for our own purposes as of the time of the evaluation. The parties each acknowledge that application of criteria that have been effective with respect to other sites and premises may not be predictive of potential for all sites and that, subsequent to our approval of a site, demographic and/or economic factors, such as competition from other similar businesses, included in or excluded from criteria that we used could change, thereby altering the potential of a site. Such factors are unpredictable and are beyond our control. + +b. We will not be responsible for the failure of a site (even if we have approved that site) to meet your expectations as to revenue or operational criteria. + +c. You acknowledge and agree that your acceptance of a franchise for the operation of the Franchised Business at the site is based on its own independent investigation of the suitability of the site. + +6. Construction: This Addendum will be considered an integral part of the Franchise Agreement between the parties hereto, and the terms of this Addendum will be controlling with respect to the subject matter hereof. All capitalized terms not otherwise defined herein will have the same meaning as set forth in the Franchise Agreement. Except as modified or supplemented by this Addendum, the terms of the Franchise Agreement are hereby ratified and confirmed. + +Page 75 of 80 + + + + + +IN WITNESS WHEREOF, each party hereto has caused its duly authorized representative to duly execute and deliver this Addendum on the date first above written. Goosehead Insurance Agency, LLC Franchisor By: Name: Title: + +Franchisee By: Name: Title: + +Page 76 of 80 + + + + + +GOOSEHEAD INSURANCE AGENCY, LLC FRANCHISE AGREEMENT EXHIBIT H LEASE RIDER + +THIS ADDENDUM (the "Addendum") has been executed as of this day of , 201 , by and between ("Franchisee") and ("Landlord"), as an addendum to the lease, as modified, amended, supplemented, renewed and/or extended from time to time as contemplated herein ("Lease") dated as of , 201 for the premises located at , in the State of ("Premises"). + +Franchisee has also entered (or will also enter) into a Franchise Agreement ("Franchise Agreement") with Goosehead Insurance Agency, LLC ("Franchisor") for the development and operation of a "Goosehead Insurance" Business at the Premises, and as a condition to obtaining Franchisor's approval of the Lease, the Lease for the Premises must contain the provisions contained in this Addendum. + +NOW THEREFORE, in consideration of mutual covenants set forth herein, the execution and delivery of the Lease, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Landlord and Franchisee hereby agree as follows: 1. Landlord agrees to deliver to Franchisor a copy of any notice of default or termination of the Lease at the same time such notice is delivered to Franchisee. Franchisor agrees to deliver to Landlord a copy of any notice of termination under the Franchise Agreement. Franchisee hereby consents to that exchange of information by Landlord and Franchisor. 2. Franchisee hereby assigns to Franchisor, with Landlord's irrevocable and unconditional consent, all of Franchisee's rights, title and interests to and under the Lease upon any termination or non-renewal of the Franchise Agreement, but no such assignment will be effective unless and until: (a) the Franchise Agreement is terminated or expires without renewal; (b) Franchisor has exercised its Option to Purchase under the Franchise Agreement; and (c) Franchisor notifies the Franchisee and Landlord in writing that Franchisor assumes Franchisee's obligations under the Lease. 3. Franchisor will have the right, but not the obligation, to cure any breach of the Lease (within fifteen (15) business days after the expiration of the period in which Franchisee had to cure any such default should Franchisee fail to do so) upon giving written notice of its election to Franchisee and Landlord, and, if so stated in the notice, to also succeed to Franchisee's rights, title and interests thereunder. The Lease may not be modified, amended, supplemented, renewed, extended or assigned by Franchisee without Franchisor's prior written consent. 4. Franchisee and Landlord acknowledge and agree that Franchisor will have no liability or obligation whatsoever under the Lease unless and until Franchisor assumes the Lease in writing pursuant to Section 2 or Section 3, above. 5. If Franchisor assumes the Lease, as provided above, Franchisor may, without Landlord's prior consent, further assign the Lease to another franchisee of Franchisor to operate a "Goosehead Insurance" business at the Premises provided that the proposed franchisee has met all of Franchisor's applicable criteria and requirements and has executed a franchise agreement with Franchisor. Landlord agrees to execute such further documentation to + +Page 77 of 80 + + + + + +confirm its consent to the assignment permitted under this Addendum as Franchisor may reasonably request. Upon such assignment to a franchisee of Franchisor, Franchisor will be released from any further liability under the terms and conditions of the Lease. 6. Landlord and Franchisee hereby acknowledge that Franchisee has agreed under the Franchise Agreement that Franchisor and its employees or agents will have the right to enter the Premises for certain purposes. Landlord hereby agrees not to interfere with or prevent such entry by Franchisor, its employees or agents. Landlord and Franchisee hereby further acknowledge that if the Franchise Agreement expires (without renewal) or is terminated, Franchisee is obligated to take certain steps under the Franchise Agreement to de-identify the Premises as a "Goosehead Insurance" business (unless Franchisor takes an assignment of the lease, as provided above). Landlord agrees to permit Franchisor, its employees or agent, to enter the Premises and remove signs (both interior and exterior), décor and materials displaying any marks, designs or logos owned by Franchisor, provided that Franchisor will bear the expense of repairing any damage to the Premises as a result thereof. 7. If Landlord is an affiliate or an Owner of Franchisee, Landlord and Franchisee agree that if Landlord proposes to sell the Premises, before the sale of the Premises, upon the request of Franchisor the Lease will be amended to reflect a rental rate and other terms that are the reasonable and customary rental rates and terms prevailing in the community where the "Goosehead Insurance" business is located. 8. Landlord agrees that during and after the term of the Lease, it will not disclose or use Franchisor's Confidential Information (as defined below) for any purpose other than for the purpose of fulfilling Landlord's obligations under the Lease. "Confidential Information" as used herein will mean all non-public information and tangible things, whether written, oral, electronic or in other form, provided or disclosed by or on behalf of Franchisee to Landlord, or otherwise obtained by Landlord, regarding the design and operations of the business located at the Premises, including, without limitation, all information identifying or describing the floor plan and layout, furnishings, equipment, fixtures, wall coverings, flooring materials, shelving, decorations, trade secrets, techniques, trade dress, "look and feel," design, manner of operation, suppliers, vendors, and all other products, goods, and services used, useful or provided by or for Franchisee on the Premises. Landlord acknowledges that all such Confidential Information belongs exclusively to Franchisor. 9. Landlord agrees that: (a) Franchisor has granted to only one party, the Franchisee, the right to use Franchisor's proprietary trade name, trademarks, service marks logos, insignias, slogans, emblems, symbols, designs and indicia of origin (collectively the "Marks") at the Premises under the terms of the Franchise Agreement; and (b) Franchisor has not granted any rights or privileges to use the Marks to Landlord. 10. Landlord and Franchisee agree that the premises will be used solely for the operation of a "Goosehead Insurance" business. 11. Landlord and Franchisee agree that any default under the lease will also constitute a default under the Franchise Agreement, and any default under the Franchise Agreement will also constitute a default under the lease. 12. Landlord and Franchisee agree that the terms contained herein will supersede any terms to the contrary set forth in the Lease. + +Page 78 of 80 + + + + + +13. Franchisor, along with its successors and assigns, is an intended third party beneficiary of the provisions of this Addendum. 14. Landlord and Franchisee agree that copies of any and all notices required or permitted under this Addendum, or under the Lease, will also be sent to Franchisor at (attention ), or to such other address as Franchisor may specify by giving written notice to Landlord. + +WITNESS the execution hereof under seal. Landlord: Franchisor* Franchisee: + +Date: Date: Date: + +Subscribed and sworn to before me this day of , 201 . Notary Public + +Subscribed and sworn to before me this day of , 201 . + +Notary Public + +Subscribed and sworn to before me this day of , 201 . + +Notary Public + +My Commission expires: My Commission expires: My Commission expires: + +* The Franchisor has signed this lease rider only to acknowledge its terms and not to accept any obligations under the lease. + +Page 79 of 80 + + + + + +GOOSEHEAD INSURANCE AGENCY, LLC FRANCHISE AGREEMENT EXHIBIT I PROMISSORY NOTE + +Page 80 of 80 + + + + + +ADDENDUM TO GOOSEHEAD INSURANCE AGENCY, LLC FRANCHISE DISCLOSURE DOCUMENT FOR THE STATE OF CALIFORNIA + +In recognition of the requirements of California's Franchise Investment Law and the California Franchise Relations Act, the Goosehead Insurance Agency, LLC Franchise Disclosure Document shall be supplemented as follows: 1. California Corporations Code, Section 31125, requires Franchisor to give Franchisee a disclosure document, approved by the Department of Business Oversight, before a solicitation of a proposed material modification of an existing franchise. 2. THE CALIFORNIA FRANCHISE INVESTMENT LAW REQUIRES THAT A COPY OF ALL PROPOSED AGREEMENTS RELATING TO THE SALE OF THE FRANCHISE BE DELIVERED TOGETHER WITH THE DISCLOSURE DOCUMENT. 3. Item 3 of the Franchise Disclosure Document is modified by adding the following paragraph to the end thereof: + +Neither Goosehead Insurance Agency, LLC nor any person listed in Item 2 of this Franchise Disclosure Document is subject to any currently effective order of any national securities association or national securities exchange, as defined in the Securities Exchange Act of 1934, 15 U.S.C.A. 78a et seq., suspending or expelling these persons from membership in this association or exchange. 4. Item 17 of the Franchise Disclosure Document is modified by adding the following paragraphs to the end of Item 17: + +California Business and Professions Code Sections 20000 through 20043 provide rights to Franchisee concerning termination, transfer or non-renewal of a franchise. If the Franchise Agreement contains a provision that is inconsistent with the law, the law will control. + +The Franchise Agreement provides for termination upon bankruptcy. This provision may not be enforceable under federal bankruptcy law (11 U.S.C.A. Sec. 101 et seq.). + +The Franchise Agreement contains a covenant not to compete which extends beyond the termination of the franchise. This provision may not be enforceable under California law. + +Prospective franchisees are encouraged to consult private legal counsel to determine the applicability of California and federal laws (such as Business and Professions Code Section 20040.5, Code of Civil Procedure + +FDD Exhibit H-1 + + + + + +Section 1281, and the Federal Arbitration Act) to any provisions of a franchise agreement restricting venue to a forum outside the State of California. + +The Franchise Agreement requires application of the laws of the State of Texas. This provision may not be enforceable under California law. + +The Franchise Agreement requires Franchisee to sign a general release of claims upon renewal or transfer of the Franchise Agreement. California Corporations Code Section 31512 provides that any condition, stipulation or provision purporting to bind any person acquiring any franchise to waive compliance with any provision of that law or any rule or order thereunder is void. Section 31512 voids a waiver of Franchisee's rights under the Franchise Investment Law (California Corporations Code Section 31000-31516). Business and Professions Code Section 20010 voids a waiver of Franchisee's rights under the Franchise Relations Act (Business and Professions Code Sections 20000-20043). 5. We maintain an Internet website at www.goosehead.com. OUR WEBSITE HAS NOT BEEN REVIEWED OR APPROVED BY THE CALIFORNIA DEPARTMENT OF BUSINESS OVERSIGHT. ANY COMPLAINTS CONCERNING THE CONTENT OF THIS WEBSITE MAY BE DIRECTED TO THE CALIFORNIA DEPARTMENT OF BUSINESS OVERSIGHT AT www.dbo.ca.gov. 6. This Addendum shall be effective only to the extent that jurisdictional requirements of the California Franchise Investment Law or the California Franchise Relations Act are met independently of and without reference to this Addendum. This Addendum shall have no effect if the jurisdictional requirements of the California Franchise Investment Law or the California Franchise Relations Act are not met. + +FDD Exhibit H-2 + + + + + +AMENDMENT TO GOOSEHEAD INSURANCE AGENCY, LLC FRANCHISE AGREEMENT FOR THE STATE OF CALIFORNIA + +In recognition of the requirements of California's Franchise Investment Law and the California Franchise Relations Act, the Goosehead Insurance Agency, LLC Franchise Agreement shall be supplemented as follows: 1. Section 17.3 of the Franchise Agreement is amended to read as follows: + +17.3 Termination with Notice and Opportunity to Cure. Except as otherwise provided in Sections 17.1 and 17.2 of this Agreement, you will have 60 days after your receipt from us of a written notice of default within which to remedy any default under this Agreement and to provide evidence thereof to us. You may avoid termination by immediately initiating a remedy to cure such default and curing it to our satisfaction within the sixty-day period, and by promptly providing proof thereof to us. If any such default is not cured within the specified time, or such longer period as applicable law may require, this Agreement will terminate without further notice to you, effective immediately upon the expiration of the sixty-day period or such longer period as applicable law may require. You will be in default pursuant to this Section 17.3 for failure substantially to comply with any of the requirements imposed by this Agreement, as it may from time to time reasonably be supplemented by the Manual, or failure to carry out the terms of this Agreement in good faith. Such defaults include, but are not limited to, the following illustrative events: 2. This Amendment shall be effective only to the extent that jurisdictional requirements of the California Franchise Investment Law or the California Franchise Relations Act are met independently of and without reference to this Amendment. This Amendment shall have no effect if the jurisdictional requirements of the California Franchise Investment Law or the California Franchise Relations Act are not met. + +IN WITNESS WHEREOF, we and you agree to be bound by the terms of this Amendment to be effective as of the Effective Date of the Franchise Agreement. GOOSEHEAD INSURANCE AGENCY, LLC FRANCHISEE + +By: By: Name: P. Ryan Langston Name: Title: Vice President and General Counsel Title: FDD Exhibit H-3 + + + + + +ADDENDUM TO GOOSEHEAD INSURANCE AGENCY, LLC FRANCHISE DISCLOSURE DOCUMENT FOR THE STATE OF ILLINOIS + +In recognition of the requirements of the Illinois law, the Goosehead Insurance Agency, LLC Franchise Disclosure Document shall be supplemented as follows: + +1. The Risk Factors on the Franchise Disclosure Document cover page of this disclosure document are modified to comply with Section 4 of the Illinois Franchise Disclosure Act, which provides that any provision in a franchise agreement that designates jurisdiction or venue in a forum outside of Illinois is void. + +2. Item 17 of the disclosure document is modified by substituting the following in place of provisions v. and w., in the chart: + +PROVISION SECTION IN FRANCHISE AGREEMENT SUMMARY + +v. Choice of forum Section 25.5 Litigation may be brought in Illinois. w. Choice of law Section 25.1 Except to the extent governed by the Lanham Act, Illinois law (including the Illinois Franchise Disclosure Act) will apply to Illinois franchisees. + +and by adding the following paragraph to the end of the chart: + +"THE CONDITIONS UNDER WHICH YOUR FRANCHISE CAN BE TERMINATED AND YOUR RIGHTS UPON NON-RENEWAL MAY BE AFFECTED BY ILLINOIS LAW: 815 ILCS 705/19 AND 20.". + +3. This Addendum is effective only to the extent that the jurisdictional requirements of the Illinois law are met independently of and without reference to this Addendum. This Addendum will have no effect if the jurisdictional requirements of the Illinois law are not met. FDD Exhibit H-4 + + + + + +AMENDMENT TO GOOSEHEAD INSURANCE AGENCY, LLC FRANCHISE AGREEMENT FOR THE STATE OF ILLINOIS + +In recognition of the requirements of the Illinois law, the Goosehead Insurance Agency, LLC Franchise Agreement shall be supplemented as follows: + +1. Section 27.1 of the Franchise Agreement is deleted in its entirety and the following Section 27.1 is substituted in lieu thereof: + +27.1 This Agreement takes effect when we accept and sign this document. This Agreement will be interpreted and construed exclusively under the laws of the State of Illinois, which laws will prevail in the event of any conflict of law (without regard to, and without giving effect to, the application of Illinois choice-of-law rules); provided, however, that if the covenants in Section 19 of this Agreement would not be enforced as written under Illinois law, then the parties agree that those covenants will instead be interpreted and construed under the laws of the state in which the Franchised Business is located. Nothing in this Section 27.1 is intended by the parties to invoke the application of any franchise, business opportunity, antitrust, implied covenant, unfair competition, fiduciary, and/or other doctrine of law of the State of Illinois (or any other state) that would not otherwise apply without this Section 27.1 + +2. Section 27.2 of the Franchise Agreement is amended by the addition of the following: + +Notwithstanding anything to the contrary contained in this Section 27.2, any claims arising under the Illinois Franchise Disclosure Act may be brought in Illinois. + +3. Section 27.7 of the Franchise Agreement is deleted in its entirety and the following Section 27.7 is substituted in lieu thereof: + +27.7 Must bring claims within one year. Each party to this agreement agrees that any and all claims and actions arising out of or relating to this agreement, the parties' relationship, and/or your operation of the franchised business, brought by any party hereto against the other, shall be commenced within one (1) year from the occurrence of the facts giving rise to such claim or action, or, it is expressly acknowledged and agreed by all parties, such claim or action shall be irrevocably barred; provided, however, that the time limit for filing claims contained in this Section 27.7 shall not apply FDD Exhibit H-5 + + + + + +to claims or actions arising under the Illinois Franchise Disclosure Act. 4. Section 27 is amended by the addition of the following new Section 27.10 which shall be an integral part of the Franchise Agreement: + +27.10 Nothing contained in this Agreement shall be deemed to waive any right you may have under the Illinois Franchise Disclosure Act of 1987. If anything in this Agreement is deemed to be contrary to or inconsistent with the Act, the terms of the Act will control. + +5. This Amendment shall be effective only to the extent that the jurisdictional requirements of the Illinois law are met independently of and without reference to this Amendment. This Amendment shall have no effect if the jurisdictional requirements of the Illinois law are not met. + +IN WITNESS WHEREOF, we and you agree to be bound by the terms of this Amendment to be effective as of the Effective Date of the Franchise Agreement. GOOSEHEAD INSURANCE AGENCY, LLC FRANCHISEE + +By: By: Name: P. Ryan Langston Name: Title: Vice President and General Counsel Title: FDD Exhibit H-6 + + + + + +ADDENDUM TO GOOSEHEAD INSURANCE AGENCY, LLC FRANCHISE DISCLOSURE DOCUMENT FOR THE STATE OF MARYLAND + +In recognition of the requirements of the Maryland Franchise Registration and Disclosure Law, the Franchise Disclosure Document for Goosehead Insurance Agency, LLC for use in the State of Maryland shall be amended as follows: + +1. Item 17, "Renewal, Termination, Transfer and Dispute Resolution," shall be amended by the addition of the following language: + +The Franchise Agreement provides for termination upon bankruptcy of the franchisee. This provision may not be enforceable under the U.S. Bankruptcy Code (11 U.S.C. Section 101, et seq.). + +Any claims arising under the Maryland Franchise Registration and Disclosure Law must be brought within 3 years after the grant of the franchise. + +Any general release required as a condition of renewal, sale, and/or assignment/transfer shall not apply to any liability under the Maryland Franchise Registration and Disclosure Law. + +2. Exhibit I, "Franchisee Compliance Questionnaire," shall be amended by the addition of the following at the end of Exhibit I: + +The representations under this Franchisee Compliance Questionnaire are not intended, nor shall they act as a release, estoppel or waiver of any liability incurred under the Maryland Franchise Registration and Disclosure Law. + +3. Each provision of this Addendum to the Disclosure Document shall be effective only to the extent, with respect to such provision, that the jurisdictional requirements of the Maryland Franchise Registration and Disclosure Law are met independently without reference to this Addendum. FDD Exhibit H-7 + + + + + +AMENDMENT TO GOOSEHEAD INSURANCE AGENCY, LLC FRANCHISE AGREEMENT FOR THE STATE OF MARYLAND + +In recognition of the requirements of the Maryland Franchise Registration and Disclosure Law, the parties to the attached Goosehead Insurance Agency, LLC Franchise Agreement (the "Agreement") agree as follows: + +1. Section 2.2.7 of the Agreement, under the heading "Term and Renewal," shall be deleted in its entirety and shall have no force or effect, and the following shall be substituted in lieu thereof: + +2.2.7 You agree to sign and deliver to us a release, in a form that we will provide (which will be a mutual release with limited exclusions), which will release all claims against us and our affiliates, and our respective officers, directors, members, managers, agents, and employees. If you are an entity, then your affiliates and your direct and indirect owners (and any other parties that we reasonably request) must also sign and deliver that release to us, excluding only such claims as the Franchisee may have under the Maryland Franchise Registration and Disclosure Law; + +2. Section 16.5.1 of the Agreement, under the heading "Transfer of Interest," shall be deleted in its entirety and shall have no force or effect, and the following shall be substituted in lieu thereof: + +16.5.1 The transferor must have executed a general release, in a form satisfactory to us, of any and all claims against us and our affiliates, successors, and assigns, and their respective officers, directors, members, managers, shareholders, partners, agents, representatives, servants, and employees in their corporate and individual capacities including, without limitation, claims arising under this Agreement, any other agreement between you and us, and/or our respective affiliates, and federal, state, and local laws and rules, excluding only such claims as the Franchisee may have under the Maryland Franchise Registration and Disclosure Law; + +3. Sections 27.1, 27.2, and 27.7 of the Agreement, under the heading "Applicable and Dispute Resolution," shall be amended by the addition of the following language: + +A franchisee may bring a lawsuit in Maryland for claims arising under the Maryland Franchise Registration and Disclosure Law. Any claims arising under the Maryland Franchise Registration and Disclosure Law must be brought within three (3) years after the grant of the franchise. + +FDD Exhibit H-8 + + + + + +4. Section 28 of the Agreement, under the heading "Acknowledgments," shall be supplemented by the following: + +The foregoing acknowledgments are not intended to nor shall they act as a release, estoppel or waiver of any liability under the Maryland Franchise Registration and Disclosure Law. + +5. Each provision of this Amendment shall be effective only to the extent, with respect to such provision, that the jurisdictional requirements of the Maryland Franchise Registration and Disclosure Law are met independently without reference to this Amendment. + +IN WITNESS WHEREOF, we and you agree to be bound by the terms of this Amendment to be effective as of the Effective Date of the Franchise Agreement. GOOSEHEAD INSURANCE AGENCY, LLC FRANCHISEE + +By: By: Name: P. Ryan Langston Name: Title: Vice President and General Counsel Title: FDD Exhibit H-9 + + + + + +ADDENDUM TO GOOSEHEAD INSURANCE AGENCY, LLC FRANCHISE DISCLOSURE DOCUMENT FOR THE STATE OF MICHIGAN + +THE STATE OF MICHIGAN PROHIBITS CERTAIN UNFAIR PROVISIONS THAT ARE SOMETIMES IN FRANCHISE DOCUMENTS. IF ANY OF THE FOLLOWING PROVISIONS ARE IN THESE FRANCHISE DOCUMENTS, THE PROVISIONS ARE VOID AND CANNOT BE ENFORCED AGAINST YOU: (A) A PROHIBITION ON THE RIGHT OF A FRANCHISEE TO JOIN AN ASSOCIATION OF FRANCHISEES. (B) A REQUIREMENT THAT A FRANCHISEE ASSENT TO A RELEASE, ASSIGNMENT, NOVATION, WAIVER, OR ESTOPPEL WHICH DEPRIVES A FRANCHISEE OF RIGHTS AND PROTECTIONS PROVIDED IN THIS ACT. THIS SHALL NOT PRECLUDE A FRANCHISEE, AFTER ENTERING INTO A FRANCHISE AGREEMENT, FROM SETTLING ANY AND ALL CLAIMS. (C) A PROVISION THAT PERMITS A FRANCHISOR TO TERMINATE A FRANCHISE PRIOR TO THE EXPIRATION OF ITS TERM EXCEPT FOR GOOD CAUSE. GOOD CAUSE SHALL INCLUDE THE FAILURE OF THE FRANCHISEE TO COMPLY WITH ANY LAWFUL PROVISIONS OF THE FRANCHISE AGREEMENT AND TO CURE SUCH FAILURE AFTER BEING GIVEN WRITTEN NOTICE THEREOF AND A REASONABLE OPPORTUNITY, WHICH IN NO EVENT NEED BE MORE THAN 30 DAYS, TO CURE SUCH FAILURE. (D) A PROVISION THAT PERMITS A FRANCHISOR TO REFUSE TO RENEW A FRANCHISE WITHOUT FAIRLY COMPENSATING THE FRANCHISEE BY REPURCHASE OR OTHER MEANS FOR THE FAIR MARKET VALUE, AT THE TIME OF EXPIRATION, OF THE FRANCHISEE'S INVENTORY, SUPPLIES, EQUIPMENT, FIXTURES, AND FURNISHINGS. PERSONALIZED MATERIALS WHICH HAVE NO VALUE TO THE FRANCHISOR AND INVENTORY, SUPPLIES, EQUIPMENT, FIXTURES, AND FURNISHINGS NOT REASONABLY REQUIRED IN THE CONDUCT OF THE FRANCHISED BUSINESS ARE NOT SUBJECT TO COMPENSATION. THIS SUBSECTION APPLIES ONLY IF: (i) THE TERM OF THE FRANCHISE IS LESS THAN 5 YEARS; AND (ii) THE FRANCHISEE IS PROHIBITED BY THE FRANCHISE OR OTHER AGREEMENT FROM CONTINUING TO CONDUCT SUBSTANTIALLY THE SAME BUSINESS UNDER ANOTHER TRADEMARK, SERVICE MARK, TRADE NAME, LOGOTYPE, ADVERTISING, OR OTHER COMMERCIAL SYMBOL IN THE SAME AREA SUBSEQUENT TO THE EXPIRATION OF THE FRANCHISE OR THE FRANCHISEE DOES NOT FDD Exhibit H-10 + + + + + +RECEIVE AT LEAST 6 MONTHS ADVANCE NOTICE OF FRANCHISOR'S INTENT NOT TO RENEW THE FRANCHISE. (E) A PROVISION THAT PERMITS THE FRANCHISOR TO REFUSE TO RENEW A FRANCHISE ON TERMS GENERALLY AVAILABLE TO OTHER FRANCHISEES OF THE SAME CLASS OR TYPE UNDER SIMILAR CIRCUMSTANCES. THIS SECTION DOES NOT REQUIRE A RENEWAL PROVISION. (F) A PROVISION REQUIRING THAT ARBITRATION OR LITIGATION BE CONDUCTED OUTSIDE THIS STATE*. THIS SHALL NOT PRECLUDE THE FRANCHISEE FROM ENTERING INTO AN AGREEMENT, AT THE TIME OF ARBITRATION, TO CONDUCT ARBITRATION AT A LOCATION OUTSIDE THIS STATE. (G) A PROVISION WHICH PERMITS A FRANCHISOR TO REFUSE TO PERMIT A TRANSFER OF OWNERSHIP OF A FRANCHISE, EXCEPT FOR GOOD CAUSE. THIS SUBDIVISION DOES NOT PREVENT A FRANCHISOR FROM EXERCISING A RIGHT OF FIRST REFUSAL TO PURCHASE THE FRANCHISE. GOOD CAUSE SHALL INCLUDE, BUT IS NOT LIMITED TO: + +525 THE FAILURE OF THE PROPOSED FRANCHISEE TO MEET THE FRANCHISOR'S THEN CURRENT REASONABLE QUALIFICATIONS OR STANDARDS. + +525 THE FACT THAT THE PROPOSED TRANSFEREE IS A COMPETITOR OF THE FRANCHISOR OR SUBFRANCHISOR. (iii) THE UNWILLINGNESS OF THE PROPOSED TRANSFEREE TO AGREE IN WRITING TO COMPLY WITH ALL LAWFUL OBLIGATIONS. (iv) THE FAILURE OF THE FRANCHISEE OR PROPOSED TRANSFEREE TO PAY ANY SUMS OWING TO THE FRANCHISOR OR TO CURE ANY DEFAULT IN THE FRANCHISE AGREEMENT EXISTING AT THE TIME OF THE PROPOSED TRANSFER. (H) A PROVISION THAT REQUIRES THE FRANCHISEE TO RESELL TO THE FRANCHISOR ITEMS THAT ARE NOT UNIQUELY IDENTIFIED WITH THE FRANCHISOR. THIS SUBDIVISION DOES NOT PROHIBIT A PROVISION THAT GRANTS TO A FRANCHISOR A RIGHT OF FIRST REFUSAL TO PURCHASE THE ASSETS OF A FRANCHISE ON THE SAME TERMS AND CONDITIONS AS A BONA FIDE THIRD PARTY WILLING AND ABLE TO PURCHASE THOSE ASSETS, NOR DOES THIS SUBDIVISION PROHIBIT A PROVISION THAT GRANTS THE FDD Exhibit H-11 + + + + + +FRANCHISOR THE RIGHT TO ACQUIRE THE ASSETS OF A FRANCHISE FOR THE MARKET OR APPRAISED VALUE OF SUCH ASSETS IF THE FRANCHISEE HAS BREACHED THE LAWFUL PROVISIONS OF THE FRANCHISE AGREEMENT AND HAS FAILED TO CURE THE BREACH IN THE MANNER PROVIDED IN SUBDIVISION I. (I) A PROVISION WHICH PERMITS THE FRANCHISOR TO DIRECTLY OR INDIRECTLY CONVEY, ASSIGN, OR OTHERWISE TRANSFER ITS OBLIGATIONS TO FULFILL CONTRACTUAL OBLIGATIONS TO THE FRANCHISEE UNLESS PROVISION HAS BEEN MADE FOR PROVIDING THE REQUIRED CONTRACTUAL SERVICES. THE FACT THAT THERE IS A NOTICE OF THIS OFFERING ON FILE WITH THE ATTORNEY GENERAL DOES NOT CONSTITUTE APPROVAL, RECOMMENDATION, OR ENDORSEMENT BY THE ATTORNEY GENERAL. + +* * * * + +IF THE FRANCHISOR'S MOST RECENT FINANCIAL STATEMENTS ARE UNAUDITED AND SHOW A NET WORTH OF LESS THAN $100,000.00, THE FRANCHISOR MUST, AT THE REQUEST OF THE FRANCHISEE, ARRANGE FOR THE ESCROW OF INITIAL INVESTMENT AND OTHER FUNDS PAID BY THE FRANCHISEE UNTIL THE OBLIGATIONS TO PROVIDE REAL ESTATE, IMPROVEMENTS, EQUIPMENT, INVENTORY, TRAINING, OR OTHER ITEMS INCLUDED IN THE FRANCHISE OFFERING ARE FULFILLED. AT THE OPTION OF THE FRANCHISOR, A SURETY BOND MAY BE PROVIDED IN PLACE OF ESCROW. + +* * * * + +THE NAME AND ADDRESS OF THE FRANCHISOR'S AGENT IN THIS STATE AUTHORIZED TO RECEIVE SERVICE OF PROCESS IS: MICHIGAN DEPARTMENT OF COMMERCE, CORPORATION AND SECURITIES BUREAU, 6546 MERCANTILE WAY, P.O. BOX 30222, LANSING, MICHIGAN 48910. + +* * * * + +ANY QUESTIONS REGARDING THIS NOTICE SHOULD BE DIRECTED TO: DEPARTMENT OF THE ATTORNEY GENERAL'S OFFICE CONSUMER PROTECTION DIVISION ATTN: FRANCHISE 670 G. MENNEN WILLIAMS BUILDING 525 WEST LANSING LANSING, MICHIGAN 48913 + +NOTE: NOTWITHSTANDING PARAGRAPH (F) ABOVE, WE INTEND TO, AND YOU AGREE THAT WE AND YOU WILL, ENFORCE FULLY THE PROVISIONS OF THE ARBITRATION SECTION OF OUR AGREEMENTS. WE BELIEVE THAT PARAGRAPH FDD Exhibit H-12 + + + + + +(F) IS UNCONSTITUTIONAL AND CANNOT PRECLUDE US FROM ENFORCING THE ARBITRATION PROVISIONS. FDD Exhibit H-13 + + + + + +ADDENDUM TO GOOSEHEAD INSURANCE AGENCY, LLC FRANCHISE DISCLOSURE DOCUMENT FOR THE STATE OF MINNESOTA + +In recognition of the requirements of the Minnesota Franchises Law, Minn. Stat. §§ 80C.01 through 80C.22, and of the Rules and Regulations promulgated thereunder by the Minnesota Commissioner of Commerce, Minn. Rules §§ 2860.0100 through 2860.9930, the Franchise Disclosure Document for Goosehead Insurance Agency, LLC for use in the State of Minnesota shall be amended to include the following: + +1. Item 13 is amended by the addition of the following language: + +The franchisor will protect the franchisee's right to use the trademarks, service marks, trade names, logotypes or other commercial symbols or indemnify the franchisee from any loss, costs or expenses arising out of any claim, suite or demand regarding the use of the name. + +2. Item 17, "Renewal, Termination, Transfer and Dispute Resolution," shall be amended by the addition of the following paragraphs: + +With respect to franchisees governed by Minnesota law, we will comply with Minn. Stat. § 80C.14, Subds. 3, 4, and 5 which require, except in certain specified cases, that a franchisee be given 90 days' notice of termination (with 60 days to cure) and 180 days' notice of non-renewal of the Franchise Agreement, and that consent to the transfer of the franchise not be unreasonably withheld. + +Pursuant to Minn. Rule 2860.4400D, any general release of claims that you or a transferor may have against us or our shareholders, directors, employees and agents, including without limitation claims arising under federal, state, and local laws and regulations shall exclude claims you or a transferor may have under the Minnesota Franchise Law and the Rules and Regulations promulgated thereunder by the Commissioner of Commerce. + +Minn. Stat. § 80C.21 and Minn. Rule 2860.4400J prohibit us from requiring litigation to be conducted outside Minnesota, requiring waiver of a jury trial, or requiring you to consent to liquidated damages, termination penalties or judgment notes. In addition, nothing in the disclosure document or agreement can abrogate or reduce any of your rights as provided for in Minnesota Statutes, Chapter 80C, or your rights to jury trial, any procedure, forum, or remedies as may be provided for by the laws of the jurisdiction. + +Minn. Stat. § 80C.17 prohibits any action from being commenced under the Minnesota Franchises Law more than three years after the cause of action accrues. + +3. Each provision of this addendum shall be effective only to the extent, with respect to such provision, that the jurisdictional requirements of the Minnesota Franchises Law or the Rules and FDD Exhibit H-14 + + + + + +Regulations promulgated thereunder by the Minnesota Commission of Commerce are met independently without reference to this addendum to the disclosure document. FDD Exhibit H-15 + + + + + +AMENDMENT TO GOOSEHEAD INSURANCE AGENCY, LLC FRANCHISE AGREEMENT FOR THE STATE OF MINNESOTA + +In recognition of the requirements of the Minnesota Franchises Law, Minn. Stat. §§ 80C.01 through 80C.22, and of the Rules and Regulations promulgated thereunder by the Minnesota Commissioner of Commerce, Minn. Rules §§ 2860.0100 through 2860.9930, the parties to the attached Goosehead Insurance Agency, LLC Franchise Agreement (the "Agreement") agree as follows: + +1. Section 2.2.7 of the Agreement, under the heading "Term and Renewal," shall be deleted in its entirety and shall have no force or effect, and the following paragraph shall be inserted in its place: + +2.2.7 You agree to sign and deliver to us a release, in a form that we will provide (which will be a mutual release with limited exclusions), which will release all claims against us and our affiliates, and our respective officers, directors, members, managers, agents, and employees. If you are an entity, then your affiliates and your direct and indirect owners (and any other parties that we reasonably request) must also sign and deliver that release to us, excluding only such claims as Franchisee may have that have arisen under the Minnesota Franchises Law and the Rules and Regulations promulgated thereunder by the Minnesota Commissioner of Commerce. + +2. Section 2 of the Agreement, under the heading "Term and Renewal," shall be amended by the addition of the following paragraph: + +Minnesota law provides franchisees with certain non-renewal rights. In sum, Minn. Stat. § 80C.14 (subd. 4) currently requires, except in certain specified cases, that a franchisee be given 180 days' notice of non-renewal of the Franchise Agreement. + +3. Section 9 of the Agreement, under the heading "Proprietary Marks," shall be amended by the addition of the following paragraph: + +Pursuant to Minnesota Stat. Sec. 80C.12, Subd. 1(g), Franchisor is required to protect any rights Franchise may have to Franchisor's Marks. + +4. Section 16.5.1 of the Agreement, under the heading "Transfer of Interest," shall be deleted in its entirety and shall have no force or effect, and the following paragraph shall be inserted in its place: + +16.5.1 The transferor must have executed a general release, in a form satisfactory to us, of any and all claims against us and our affiliates, successors, and assigns, and their respective officers, directors, members, managers, shareholders, partners, agents, representatives, servants, and employees in their corporate and individual capacities including, without limitation, claims arising under this Agreement, any other agreement between you and us, and/or our respective affiliates, and federal, state, and local laws and FDD Exhibit H-16 + + + + + +rules, excluding only such claims as Franchisee may have under the Minnesota Franchises Law and the Rules and Regulations promulgated thereunder by the Minnesota Commissioner of Commerce. + +5. Section 16 of the Agreement, under the heading "Transfer of Interest," shall be amended by the addition of the following paragraph: + +Minnesota law provides franchisees with certain transfer rights. In sum, Minn. Stat. §80C.14 (subd. 5) currently requires that consent to the transfer of the franchise may not be unreasonably withheld. + +6. Section 17 of the Agreement, under the heading "Default and Termination" shall be amended by the addition of the following paragraph: + +Minnesota law provides franchisees with certain termination rights. In sum, Minn. Stat. § 80C.14 (subd. 3) currently requires, except in certain specified cases, that a franchisee be given 90 days' notice of termination (with 60 days to cure) of the Franchise Agreement. + +7. Sections 18.8 of the Agreement, under the heading "Obligations Upon Termination or Expiration," shall be deleted in its entirety and shall have no force or effect; and the following paragraph shall be substituted in its place: + +18.8 Pay Damages. You agree to pay us all damages, costs, and expenses (including without limitation reasonable attorneys' fees, court costs, discovery costs, and all other related expenses) that we incur as a result of your default under this Agreement and/or subsequent to the termination or expiration of this Agreement in seeking injunctive or other relief for the enforcement of any provisions of this Section 18, which will be in addition to amounts due to us under Section 18.11 below. + +8. Sections 27.5 and 27.9 of the Agreement, under the heading "Applicable Law and Dispute Resolution," shall be deleted in their entirety and shall have no force or effect; and the following paragraphs shall be substituted in its place: + +27.5 Injunctions. Nothing contained in this Agreement will bar our right to seek injunctive relief in a court of competent jurisdiction against threatened conduct that will cause us loss or damages, under the usual equity rules, including the applicable rules for obtaining restraining orders and preliminary injunctions. + +27.9 Payment of Legal Fees. You agree to pay us all damages, costs and expenses (including without limitation reasonable attorneys' fees, court costs, discovery costs, and all other related expenses) that we incur after the termination or expiration of the franchise granted under this Agreement in: (a) seeking injunctive or other relief for the enforcement of any provisions of this Agreement (including without limitation Sections 9 and 17 above); and/or (b) successfully defending a claim from you that we misrepresented the terms of this Agreement, fraudulently induced you to sign this Agreement, that the provisions of this Agreement are not FDD Exhibit H-17 + + + + + +fair, were not properly entered into, and/or that the terms of this Agreement (as it may be amended by its terms) do not exclusively govern the parties' relationship. + +9. Section 27 of the Agreement, under the heading "Applicable Law and Dispute Resolution", shall be amended by the following paragraph, which shall be considered an integral part of the Agreement: + +27.10 Minn. Stat. § 80C.17 prohibits any action from being commenced under the Minnesota Franchises Law more than three years after the cause of action accrues. Minn. Stat. § 80C.21 and Minn. Rule 2860.4400J prohibit Franchisor from requiring litigation to be conducted outside Minnesota, requiring waiver of a jury trial, or requiring Franchisee to consent to liquidated damages, termination penalties or judgment notes. In addition, nothing in the disclosure document or agreement can abrogate or reduce any of Franchisee's rights as provided for in Minnesota Statutes, Chapter 80C, or Franchisee's rights to jury trial, any procedure, forum, or remedies as may be provided for by the laws of the jurisdiction. + +10. Each provision of this Amendment shall be effective only to the extent, with respect to such provision, that the jurisdictional requirements of the Minnesota Franchises Law or the Rules and Regulations promulgated thereunder by the Minnesota Commissioner of Commerce are met independently without reference to this Amendment. + +IN WITNESS WHEREOF, we and you agree to be bound by the terms of this Amendment to be effective as of the Effective Date of the Franchise Agreement. GOOSEHEAD INSURANCE AGENCY, LLC FRANCHISEE + +By: By: Name: P. Ryan Langston Name: Title: Vice President and General Counsel Title: FDD Exhibit H-18 + + + + + +ADDENDUM TO GOOSEHEAD INSURANCE AGENCY, LLC FRANCHISE DISCLOSURE DOCUMENT FOR THE STATE OF NEW YORK + +1. The following information is added to the cover page of the Franchise Disclosure Document: + +INFORMATION COMPARING FRANCHISORS IS AVAILABLE. CALL THE STATE ADMINISTRATORS LISTED IN EXHIBIT C OR YOUR PUBLIC LIBRARY FOR SOURCES OF INFORMATION. REGISTRATION OF THIS FRANCHISE BY NEW YORK STATE DOES NOT MEAN THAT NEW YORK STATE RECOMMENDS IT OR HAS VERIFIED THE INFORMATION IN THIS FRANCHISE DISCLOSURE DOCUMENT. IF YOU LEARN THAT ANYTHING IN THE FRANCHISE DISCLOSURE DOCUMENT IS UNTRUE, CONTACT THE FEDERAL TRADE COMMISSION AND NEW YORK STATE DEPARTMENT OF LAW, BUREAU OF INVESTOR PROTECTION AND SECURITIES, 120 BROADWAY, 23RD FLOOR, NEW YORK, NEW YORK 10271. + +THE FRANCHISOR MAY, IF IT CHOOSES, NEGOTIATE WITH YOU ABOUT ITEMS COVERED IN THE FRANCHISE DISCLOSURE DOCUMENT. HOWEVER, THE FRANCHISOR CANNOT USE THE NEGOTIATING PROCESS TO PREVAIL UPON A PROSPECTIVE FRANCHISEE TO ACCEPT TERMS WHICH ARE LESS FAVORABLE THAN THOSE SET FORTH IN THIS FRANCHISE DISCLOSURE DOCUMENT. + +2. The following is added at the end of Item 3: + +Except as provided above, with regard to the franchisor, its predecessor, a person identified in Item 2, or an affiliate offering franchises under the franchisor's principal trademark: + +A. No such party has an administrative, criminal or civil action pending against that person alleging: a felony, a violation of a franchise, antitrust, or securities law, fraud, embezzlement, fraudulent conversion, misappropriation of property, unfair or deceptive practices, or comparable civil or misdemeanor allegations. + +B. No such party has pending actions, other than routine litigation incidental to the business, which are significant in the context of the number of franchisees and the size, nature or financial condition of the franchise system or its business operations. + +C. No such party has been convicted of a felony or pleaded nolo contendere to a felony charge or, within the 10 year period immediately preceding the application for registration, has been convicted of or pleaded nolo contendere to a misdemeanor charge or has been the subject of a civil action alleging: violation of a franchise, antifraud, or securities law; fraud; embezzlement; fraudulent conversion or misappropriation of property; or unfair or deceptive practices or comparable allegations. FDD Exhibit H-19 + + + + + +D. No such party is subject to a currently effective injunctive or restrictive order or decree relating to the franchise, or under a Federal, State, or Canadian franchise, securities, antitrust, trade regulation or trade practice law, resulting from a concluded or pending action or proceeding brought by a public agency; or is subject to any currently effective order of any national securities association or national securities exchange, as defined in the Securities and Exchange Act of 1934, suspending or expelling such person from membership in such association or exchange; or is subject to a currently effective injunctive or restrictive order relating to any other business activity as a result of an action brought by a public agency or department, including, without limitation, actions affecting a license as a real estate broker or sales agent. + +3. The following is added to the end of Item 4: + +Neither the franchisor, its affiliate, its predecessor, officers, or general partner during the 10-year period immediately before the date of the offering circular: (a) filed as debtor (or had filed against it) a petition to start an action under the U.S. Bankruptcy Code; (b) obtained a discharge of its debts under the bankruptcy code; or (c) was a principal officer of a company or a general partner in a partnership that either filed as a debtor (or had filed against it) a petition to start an action under the U.S. Bankruptcy Code or that obtained a discharge of its debts under the U.S. Bankruptcy Code during or within 1 year after that officer or general partner of the franchisor held this position in the company or partnership. + +4. The following is added to the end of Item 5: + +The initial franchise fee constitutes part of our general operating funds and will be used as such in our discretion. + +5. The following is added to the end of the "Summary" sections of Item 17(c), titled "Requirements for franchisee to renew or extend," and Item 17(m), entitled "Conditions for franchisor approval of transfer": + +However, to the extent required by applicable law, all rights you enjoy and any causes of action arising in your favor from the provisions of Article 33 of the General Business Law of the State of New York and the regulations issued thereunder shall remain in force; it being the intent of this proviso that the non-waiver provisions of General Business Law Sections 687.4 and 687.5 be satisfied. + +6. The following language replaces the "Summary" section of Item 17(d), titled "Termination by franchisee": + +You may terminate the agreement on any grounds available by law. FDD Exhibit H-20 + + + + + +7. The following is added to the end of the "Summary" section of Item 17(j), titled "Assignment of contract by franchisor": + +However, no assignment will be made except to an assignee who in good faith and judgment of the franchisor, is willing and financially able to assume the franchisor's obligations under the Franchise Agreement. + +8. The following is added to the end of the "Summary" sections of Item 17(v), titled "Choice of forum", and Item 17(w), titled "Choice of law": + +The foregoing choice of law should not be considered a waiver of any right conferred upon the franchisor or upon the franchisee by Article 33 of the General Business Law of the State of New York. FDD Exhibit H-21 + + + + + +STATEMENT OF DISCLOSURE DOCUMENT ACCURACY + +THE FRANCHISOR REPRESENTS THAT THIS DISCLOSURE DOCUMENT DOES NOT KNOWINGLY OMIT ANY MATERIAL FACT OR CONTAIN ANY UNTRUE STATEMENT OF A MATERIAL FACT. FDD Exhibit H-22 + + + + + +AMENDMENT TO GOOSEHEAD INSURANCE AGENCY, LLC FRANCHISE AGREEMENT FOR THE STATE OF NEW YORK + +In recognition of the requirements of the New York General Business Law, Article 33, Sections 680 through 695, and of the regulations promulgated thereunder (N.Y. Comp. Code R. & Regs., tit. 13, §§ 200.1 through 201.16), the parties to the attached Goosehead Insurance Agency, LLC Franchise Agreement (the "Agreement") agree as follows: + +1. Section 2.2.6 of the Agreement, under the heading "Term and Renewal," shall be deleted in its entirety, and shall have no force or effect; and the following paragraph shall be substituted in its place: + +2.2.6 You must execute a general release, in a form prescribed by us, of any and all claims against us and our affiliates, and our and our affiliates' respective officers, directors, securities holders, agents, and employees, provided, however, that all rights enjoyed by you and any causes of action arising in your favor from the provisions of New York General Business Law Sections 680-695 and the regulations issued thereunder, shall remain in force; it being the intent of this provision that the non-waiver provisions of N.Y. Gen. Bus. Law Sections 687.4 and 687.5 be satisfied; + +2. Section 13.3.3 of the Agreement, under the heading "Transfer of Interest," shall be deleted in its entirety, and shall have no force or effect; and the following paragraph shall be substituted in its place: + +13.3.3 That the transferor must execute a general release, in a form satisfactory to us, of any and all claims against us and our affiliates, and our respective officers, directors, shareholders, member, agents, and employees, provided, however, that all rights enjoyed by the transferor and any causes of action arising in its favor from the provisions of New York General Business Law Sections 680-695 and the regulations issued thereunder, shall remain in force; it being the intent of this provision that the non-waiver provisions of N.Y. Gen. Bus. Law Sections 687.4 and 687.5 be satisfied; + +3. Section 25.6 of the Agreement, under the heading "Applicable Law; Dispute Resolution," shall be deleted in its entirety, and shall have no force or effect; and the following paragraph shall be substituted in lieu thereof: + +25.6 Nothing contained in this Agreement shall bar our right to seek injunctive relief against threatened conduct that will cause us loss or damages, under the usual equity rules, including the applicable rules for obtaining restraining orders and preliminary injunctions. FDD Exhibit H-23 + + + + + +4. Section 25 of the Agreement, under the heading "Applicable Law; Dispute Resolution," shall be amended by the addition of the following language: + +Nothing in this Agreement should be considered a waiver of any right conferred upon you by New York General Business Law, Sections 680-695. + +5. There are circumstances in which an offering made by us would not fall within the scope of the New York General Business Law, Article 33, such as when the offer and acceptance occurred outside the state of New York. However, an offer or sale is deemed made in New York if you are domiciled in or the franchise will be opening in New York. We are required to furnish a New York prospectus to every prospective franchisee who is protected under the New York General Business Law, Article 33. + +IN WITNESS WHEREOF, we and you agree to be bound by the terms of this Amendment to be effective as of the Effective Date of the Franchise Agreement. GOOSEHEAD INSURANCE AGENCY, LLC FRANCHISEE + +By: By: Name: P. Ryan Langston Name: Title: Vice President and General Counsel Title: FDD Exhibit H-24 + + + + + +ADDENDUM TO GOOSEHEAD INSURANCE AGENCY, LLC FRANCHISE DISCLOSURE DOCUMENT FOR THE STATE OF NORTH DAKOTA + +In recognition of the requirements of the North Dakota Franchise Investment Law, N.D. Cent. Code, §§ 51 19 01 through 51 19 17, and the policies of the office of the State of North Dakota Securities Commission, the Franchise Disclosure Document for Goosehead Insurance Agency, LLC shall be amended by the addition of the following language: + +The North Dakota Securities Commissioner has held the following to be unfair, unjust, or inequitable to North Dakota franchisees (Section 51-19-09, N.D.C.C.): + +A. Restrictive Covenants: Franchise disclosure documents which disclose the existence of covenants restricting competition contrary to Section 9-08-06, N.D.C.C., without further disclosing that such covenants will be subject to this statute. + +B. Situs of Arbitration Proceedings: Franchise agreements providing that the parties must agree to arbitrate disputes at a location that is remote from the site of the franchisee's business. + +C. Restriction on Forum: Requiring North Dakota franchisees to consent to the jurisdiction of courts outside of North Dakota. + +D. Liquidated Damages and Termination Penalties: Requiring North Dakota franchisees to consent to liquidated damages or termination penalties. + +E. Applicable Laws: Franchise agreements which specify that any claims arising under the North Dakota franchise law will be governed by the laws of a state other than North Dakota. + +F. Waiver of Trial by Jury: Requiring North Dakota franchisees to consent to the waiver of a trial by jury. + +G. Waiver of Exemplary and Punitive Damages: Requiring North Dakota franchisees to consent to a waiver of exemplary and punitive damages. + +H. General Release: Requiring North Dakota franchisees to execute a general release of claims as a condition of renewal or transfer of a franchise. + +I. Limitation on Claims. Requiring North Dakota franchisees to consent to a limitation on when claims may be brought. FDD Exhibit H-25 + + + + + +AMENDMENT TO GOOSEHEAD INSURANCE AGENCY, LLC FRANCHISE AGREEMENT FOR THE STATE OF NORTH DAKOTA + +In recognition of the requirements of the North Dakota Franchise Investment Law, N.D. Cent. Code, §§ 51 19 01 through 51 19 17, and the policies of the office of the State of North Dakota Securities Commission, the parties to the attached Goosehead Insurance Agency, LLC Franchise Agreement (the "Agreement") agree as follows: + +1. The Agreement shall be amended by the addition of the following Section 29: + +29. The parties acknowledge and agree that they have been advised that the North Dakota Securities Commissioner has determined the following agreement provisions are unfair, unjust or inequitable to North Dakota franchisees: + +A. Restrictive Covenants: Any provision which discloses the existence of covenants restricting competition contrary to Section 9-08-06, N.D.C.C., without further disclosing that such covenants will be subject to this statute. + +B. Situs of Arbitration Proceedings: Any provision requiring that the parties must agree to arbitrate disputes at a location that is remote from the site of the Franchisee's business. + +C. Restriction on Forum: Any provision requiring North Dakota franchisees to consent to the jurisdiction of courts outside of North Dakota. + +D. Liquidated Damages and Termination Penalties: Any provision requiring North Dakota franchisees to consent to liquidated damages or termination penalties. + +E. Applicable Laws: Any provision which specifies that any claims arising under the North Dakota franchise law will be governed by the laws of a state other than North Dakota. + +F. Waiver of Trial by Jury: Any provision requiring North Dakota franchisees to consent to the waiver of a trial by jury. + +G. Waiver of Exemplary and Punitive Damages: Any provision requiring North Dakota franchisees to consent to a waiver of exemplary and punitive damages. + +H. General Release: Any provision requiring North Dakota franchisees to execute a general release of claims as a condition of renewal or transfer of a franchise. + +I. Limitation on Claims. Requiring North Dakota franchisees to consent to a limitation on when claims may be brought. + +[SIGNATURE PAGE FOLLOWS] FDD Exhibit H-26 + + + + + +IN WITNESS WHEREOF, we and you agree to be bound by the terms of this Amendment to be effective as of the Effective Date of the Franchise Agreement. GOOSEHEAD INSURANCE AGENCY, LLC FRANCHISEE + +By: By: Name: P. Ryan Langston Name: Title: Vice President and General Counsel Title: FDD Exhibit H-27 + + + + + +ADDENDUM TO GOOSEHEAD INSURANCE AGENCY, LLC FRANCHISE DISCLOSURE DOCUMENT FOR THE STATE OF RHODE ISLAND + +In recognition of the requirements of the Rhode Island Franchise Investment Act, §§ 19 28.1-1 through 19-28.1-34 the Franchise Disclosure Document for Goosehead Insurance Agency, LLC for use in the State of Rhode Island shall be amended to include the following: + +1. Item 17, "Renewal, Termination, Transfer and Dispute Resolution," shall be amended by the addition of the following: + +Section 19-28.1-14 of the Rhode Island Franchise Investment Act provides that "A provision in a franchise agreement restricting jurisdiction or venue to a forum outside this state or requiring the application of the laws of another state is void with respect to a claim otherwise enforceable under this Act." + +1. This addendum to the disclosure document shall be effective only to the extent, with respect to such provision, that the jurisdictional requirements of the Rhode Island Franchise Investment Act, §§ 19-28.1-1 through 19-28.1-34, are met independently without reference to this addendum to the disclosure document. FDD Exhibit H-28 + + + + + +AMENDMENT TO GOOSEHEAD INSURANCE AGENCY, LLC FRANCHISE AGREEMENT FOR THE STATE OF RHODE ISLAND + +In recognition of the requirements of the Rhode Island Franchise Investment Act, §§ 19-28.1-1 through 19-28.1-34, the parties to the attached Goosehead Insurance Agency, LLC Franchise Agreement (the "Agreement") agree as follows: + +1. Section 27 of the Agreement, under the heading "Applicable Law and Dispute Resolution," shall be amended by the addition of the following paragraph: + +Section 19-28.1-14 of the Rhode Island Franchise Investment Act provides that "A provision in a franchise agreement restricting jurisdiction or venue to a forum outside this state or requiring the application of the laws of another state is void with respect to a claim otherwise enforceable under this Act." + +2. This amendment shall be effective only to the extent, with respect to such provision, that the jurisdictional requirements of the Rhode Island Franchise Investment Act, §§ 19-28.1-1 through 19-28.1-34, are met independently without reference to this amendment. + +IN WITNESS WHEREOF, we and you agree to be bound by the terms of this Amendment to be effective as of the Effective Date of the Franchise Agreement. GOOSEHEAD INSURANCE AGENCY, LLC FRANCHISEE + +By: By: Name: P. Ryan Langston Name: Title: Vice President and General Counsel Title: FDD Exhibit H-29 + + + + + +ADDENDUM TO GOOSEHEAD INSURANCE AGENCY, LLC FRANCHISE DISCLOSURE DOCUMENT FOR THE STATE OF VIRGINIA + +1. Item 17 of the disclosure document is hereby modified by adding the following paragraphs to the end of provision entitled "h. 'Cause' defined - non-curable defaults": + +Under Section 13.1-564 of the Virginia Retail Franchising Act, it is unlawful for a franchisor to cancel a franchise without reasonable cause. If any ground for default or termination stated in the franchise agreement does not constitute 'reasonable cause,' as that term may be defined in the Virginia Retail Franchise Act or the laws of Virginia, that provision may not be enforceable. + +Under Section 13.1-564 of the Virginia Retail Franchising Act, it is unlawful for a franchisor to use undue influence to induce a franchisee to surrender any right given to him under the franchise. If any provision of the franchise agreement involves the use of undue influence by the franchisor to induce a franchisee to surrender any rights given to him under the franchise, that provision may not be enforceable. FDD Exhibit H-30 + + + + + +ADDENDUM TO GOOSEHEAD INSURANCE AGENCY, LLC FRANCHISE DISCLOSURE DOCUMENT FOR THE STATE OF WASHINGTON + +In recognition of the requirements of the Washington Franchise Investment Protection Act, Wash. Rev. Code §§ 19.100.180, the Franchise Disclosure Document for Goosehead Insurance Agency, LLC in connection with the offer and sale of franchises for use in the State of Washington shall be amended to include the following: + +1. Item 17(d), "Renewal, Termination, Transfer and Dispute Resolution," shall be amended by the addition of the following statement: + +Franchisees may terminate under any grounds permitted by law. + +2. Item 17, "Renewal, Termination, Transfer and Dispute Resolution," shall be amended by the addition of the following paragraphs at the conclusion of the Item: + +The state of Washington has a statute, RCW 19.100.180, which may supersede the franchise agreement in your relationship with the franchisor including the areas of termination and renewal of your franchise. There may also be court decisions which may supersede the franchise agreement in your relationship with the franchisor including the areas of termination and renewal of your franchise. + +In any arbitration involving a franchise purchased in Washington, the arbitration site shall be either in the state of Washington, or in a place mutually agreed upon at the time of the arbitration, or as determined by the arbitrator. + +In the event of a conflict of laws, the provisions of the Washington Franchise Investment Protection Act, Chapter 19.100 RCW shall prevail. + +A release or waiver of rights executed by a franchisee shall not include rights under the Washington Franchise Investment Protection Act except when executed pursuant to a negotiated settlement after the agreement is in effect and where the parties are represented by independent counsel. Provisions such as those which unreasonably restrict or limit the statute of limitations period for claims under the Act, rights or remedies under the Act such as a right to a jury trial may not be enforceable. + +Transfer fees are collectable to the extent that they reflect the franchisor's reasonable estimated or actual costs in effecting a transfer. + +3. Each provision of this addendum to the disclosure document shall be effective only to the extent, with respect to such provision, that the jurisdictional requirements of the Washington Franchise Investment Protection Act, Wash. Rev. Code §§ 19.100.180, are met independently without reference to this addendum to the disclosure document. FDD Exhibit H-31 + + + + + +AMENDMENT TO GOOSEHEAD INSURANCE AGENCY, LLC FRANCHISE AGREEMENT FOR THE STATE OF WASHINGTON + +In recognition of the requirements of the Washington Franchise Investment Protection Act, Wash. Rev. Code §§ 19.100.010 through 19.100.940, the parties to the attached Goosehead Insurance Agency, LLC Franchise Agreement agree as follows: + +1. The state of Washington has a statute, RCW 19.100.180, which may supersede the franchise agreement in your relationship with the franchisor including the areas of termination and renewal of your franchise. There may also be court decisions which may supersede the franchise agreement in your relationship with the franchisor including the areas of termination and renewal of your franchise. + +2. In any arbitration involving a franchise purchased in Washington, the arbitration site shall be either in the state of Washington, or in a place mutually agreed upon at the time of the arbitration, or as determined by the arbitrator. + +3. In the event of a conflict of laws, the provisions of the Washington Franchise Investment Protection Act, Chapter 19.100 RCW shall prevail. + +4. A release or waiver of rights executed by a franchisee shall not include rights under the Washington Franchise Investment Protection Act except when executed pursuant to a negotiated settlement after the agreement is in effect and where the parties are represented by independent counsel. Provisions such as those which unreasonably restrict or limit the statute of limitations period for claims under the Act, rights or remedies under the Act such as a right to a jury trial may not be enforceable. + +5. Transfer fees are collectable to the extent that they reflect the franchisor's reasonable estimated or actual costs in effecting a transfer. + +6. Each provision of this amendment shall be effective only to the extent, with respect to such provision, that the jurisdictional requirements of the Washington Franchise Investment Protection Act, Wash. Rev. Code §§ 19.100.010 through 19.100.940, are met independently without reference to this amendment. + +[SIGNATURE PAGE FOLLOWS] FDD Exhibit H-32 + + + + + +IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Washington amendment to the Franchise Agreement on the same date as the Franchise Agreement was executed GOOSEHEAD INSURANCE AGENCY, LLC FRANCHISEE + +By: By: Name: P. Ryan Langston Name: Title: Vice President and General Counsel Title: FDD Exhibit H-33 \ No newline at end of file diff --git a/full_contract_txt/GRANTIERRAENERGYINC_05_07_2012-EX-10.6-TRANSPORTATION CONTRACT.txt b/full_contract_txt/GRANTIERRAENERGYINC_05_07_2012-EX-10.6-TRANSPORTATION CONTRACT.txt new file mode 100644 index 0000000000000000000000000000000000000000..7f49825e904a03f723fb89b13f150f9acf79e79f --- /dev/null +++ b/full_contract_txt/GRANTIERRAENERGYINC_05_07_2012-EX-10.6-TRANSPORTATION CONTRACT.txt @@ -0,0 +1,2107 @@ +EXHIBIT 10.6 TRANSPORTATION CONTRACT SPECIFIC CONDITIONS + + + + + + + + + + PURPOSE + + ECONOMIC CONDITIONS + + CONTRACTED CAPACITY + + + + POINTS OF ENTRANCE AND EXIT MANSOYÁ - TUMACO + + + +Date Bogota D.C. January 30, 2012 + +Contract No. VIT-005-2012 + +SENDER SOLANA PETROLEUM EXPLORATION COLOMBIA LIMITED + +TAX ID 830.051.027-8 + +SHIPPER ECOPETROL S.A. TAX ID 899.999.068-1 + +T Y P E O F CRUDE OWN PRODUCTION x PROPERTY + +Transportation Service of liquid hydrocarbons through the "Trasandino" Pipeline(OTA) and Mansoyá-Orito (OMO) pipeline. + +Estimated Value of the Contract Six millions seven hundred forty five thousand dollars of The United States of America (USD$6.745.000). Rate "Mansoyá-Orito" Pipeline (OMO) Cero point five one nine two dollars of The Untied States of America (USD$0,5192) per Barrel Rate "Trasandino" Pipeline (OTA) Three dollars eleven forty three cents of dollars of The Untied States of America (USD$3,1143) per Barrel. + +PRODUCT Daily Average (Barrels/calendar day) Monthly average (Barrels/month) Crude 10.000 300.000 + +TERM OF EXECUTION From January 30, 2012 until July 29, 2012 + +Point # Type of Point Name of Point Distance (km) + +1 Point of Entrance Entrance bridle to the srapers tramp in the PK 35+400 of OMO 377,3 2 Point of Exit Exit bridle to the main tanks of Tumaco Plant. + + + + + + + + SPECIFICATIONS OF PRODUCTS TO BE SHIPPED PRODUCT CHARACTERISTICS + + Quality Specifications of Crude: Bases on the operating conditions of the "Trasandino" Pipeline, ECOPETROL shall only receive daily crude oil from the SENDER up to a maximum equivalent to 12% of the total light crude received in the day at the Orito Plant. The indicated Quality Specifications correspond to those which the final mix of crude delivered by the SENDER shall have. In the event in which the Crude delivered by the SENDER fails to meet the Quality Specification and if the buying of dissolvent is required to make mixes, the SENDER shall request approval from ECOPETROL before its delivery for transportation by ECOPETROL. It is the SENDER's responsibility to ensure its possession, control and entitlement to deliver or make deliver on its behalf the crude received by ECOPETROL at the Entrance Point. The SENDER shall hold ECOPETROL harmless against any claim, action or damages which may result from suits, claims or administrative, judicial or extrajudicial actions from any third persons alleging ownership or possession on the crude to be shipped. BONDS + + In witness whereof, and accepting the General Conditions and the Specific Conditions this Contract is subscribed in two (2) duplicates of the same content in the city of Bogotá on the thirtieth (30th) day of the month of January, 2012. + + + +Characteristics Lower Limit Upper Limit Temperature 120°F Viscosity 300 cSt 30ºC. Water and sediments (BSW) 0,5 % in volume Salt 20 PTB Steam pressure Eleven (11) psi at 100°F Gravity in API degrees 18 degrees 50 degrees + +TYPE OF BOND AMOUNT Performance Insurance Policy Four thousand forty seven millions of Colombian pesos ($4.047.000.000) + + 1 + + + + + + + + All notifications and communications to be delivered to the Parties as a result of the execution of the Contract hereof shall be made to the addresses indicated as follows: ECOPETROL + + THE SENDER + + + + + +BY THE SENDER: BY ECOPETROL S.A.: Signature "/s/ Duncan Nightingale" Signature "/s/ Rafael Espinosa Rozo" Name: DUNCAN NIGHTINGALE Name: RAFAEL ESPINOSA ROZO Title: Legal Representative Pasaporte No. BA386341 Title: Pipelines Manager C.C. No. 79.432.773 de Bogotá D.C. Signature "/s/ Hugo Rodriguez" Name: HUGO RODRIGUEZ Title: Legal Representative C.C. No. 3.093.980 + +ADDRESS 5.1 Carrera 7 No. 37 - 69 Piso 9 Edificio Teusacá TELEPHONE 5.2 2343491 FAX 5.3 2343532 CITY 5.4 Bogotá D.C. + +ADDRESS 5.5 Calle 113 No. 7 - 80 Piso 17 TELEPHONE 5.6 6585757 FAX 5.7 2139327 CITY 5.8 Bogotá D.C. + + 2 + + + + + + TRANSPORTATION CONTRACT GENERAL CONDITIONS The Contract hereof executed between ECOPETROL and the SENDER shall be comprised by these General Clauses and by the Specific Conditions subscribed by the Parties. All current legal provisions shall apply thereto and therefore the Parties are obliged to fulfill them regardless of whether or not they are stated in this document or in the Specific Conditions. PARTIES: The Parties of the Contract shall be: ECOPETROL S A, hereinafter ECOPETROL, a company of mixed economy, authorized by law 1118 of 2006, attached to the Ministry of Mines and Energy, acting pursuant to its by-laws with its main domicile in Bogotá D C with Tax ID 899.999.068- 1, represented by whoever subscribes the Specific Conditions of the Contract and the SENDER, identified as indicated in the Specific Conditions, who is obliged subject to the conditions and terms set forth herein. ECOPETROL and the SENDER may also be called in this Shipment Contract or "Contract", individually as the "Party" or jointly as the "Parties". RECITALS: + + By virtue of the above the parties agree: CLAUSE FIRST PURPOSE + + + + + + 1. ECOPETROL is the owner of the pipelines of private use indicated in the Specific Conditions (hereinafter, the "Pipelines"). 2. Currently the Pipelines have Available Capacity for the shipment of crudes from third parties. 3. The SENDER has crude oils of its own/production that wishes to ship through the Pipelines under the conditions established in this Contract and its annexes, with the quality specifications set forth by ECOPETROL for its shipment through the Pipelines. 4. The Parties have agreed to enter into this Contract under the "Spot" shipping contract modality, by virtue of which, the SENDER shall be obliged to pay the shipping fee applicable for the barrels effectively shipped through the Pipelines during the Month of Operation and subject to the existence of Available Capacity. 5. The SENDER knows and accepts in all its terms the Manual of the Shipper of the Pipelines, which is an integral part of the Contract hereof as Annex 1. + + 1.1 ECOPETROL is obliged within the terms and conditions set out in this Contract, its annexes and in the applicable regulations, to ship through the Pipeline, from the Entrance Points agreed and detailed in the Specific Conditions to the Exit Points agreed and detailed in Specific Conditions, crudes owned/produced by the SENDER and delivered in the Entrance Points pursuant to the instructions and procedures set out by ECOPETROL (hereinafter, the "Service"). + + 1 + + + + + + + + CLAUSE SECOND DEFINITIONS 2.1 All capitalized terms shall have the meaning as defined in the Clauses of this Contract and/or in Clause 2 of the Manual of the Shipper of ECOPETROL. CLAUSE THIRD TERM 3.1 The Contract shall be in force during the period indicated in the Specific Conditions. 3.2 The term of execution of the Service for the Contracted Capacity being the purpose of the Contract hereof may be extended by common agreement between the Parties by a document subscribed prior to the date of termination of the Contract, subject to the existence of Available Capacity in the Pipeline during the month of Operation in which the Service is to be provided. 3.3 the obligation of the monthly payment borne by the SENDER for the Service shall be made during the totality of the term of execution of the Contract. CLAUSE FOURTH AMOUNT OF THE CONTRACT 4.1 The initial estimated amount of the Contract hereof is as indicated in the Specific Conditions. The final amount of the Contract shall correspond to the total of the actual invoicing by ECOPETROL and shall be established upon termination and final liquidation of the same. + + + + 1.2 By virtue of this Contract and as indicated in the Specific Conditions, the SENDER shall have a limited capacity for shipment by the Pipeline of crudes of its own/production, subject to the existence of Available Capacity during the month of operation of the Service (hereinafter, the "Contracted Capacity"). 1.3 The scope of the obligations of ECOPETROL is limited to the reception, custody, shipment, decanting, and indispensable storage for the transportation and shipment of Crude to the SENDER. 1.4 The Contract hereof does not include the provision of the unloading service in unloading areas, the treatment of crudes, the storage in export terminals, or any terminal services. It is the responsibility of the SENDER to execute or contract these services whenever it may be necessary. The SENDER shall wave and hold ECOPETROL harmless for any damage or prejudice suffered by ECOPETROL as a result of failing to receive the Crude in the Exit Point, either by lack of the services before mentioned or by failing to provide the appropriate facilities for such purpose. + + 2 + + + + + + CLAUSE FIFTH FEES 5.1 The Contract is agreed under the "Spot" modality, understanding that the SENDER shall pay for the Barrels effectively transported through the Pipeline subject to the existence of Available Capacity in the Pipeline during the Month of Operation in which the Service is to be provided. 5.2 The SENDER is obliged irrevocably and unconditionally by subscription of this Contract to the payment of the fee indicated in the Specific Conditions for each Barrel effectively transported making use of its Contracted Capacity (hereinafter, the "Fee"). CLAUSE SIXTH READJUSTMENTS 6.1 The Monthly Fee agreed in this Contract shall be adjusted each year pursuant to the formula established by the Ministry of Mines and Energy in Resolution 124 386 of July 15th, 2010 or any provisions the amend, add or supersede it. CLAUSE SEVENTH TERMS OF PAYMENT + + + + + + 7.1 The SENDER undertakes the obligation to pay irrevocably and unconditionally the Service for the Contracted Capacity, twenty (20) calendar days at the latest, after ECOPETROL files in the offices of the SENDER the invoice for the provision of the Service. 7.2 ECOPETROL shall deliver to the SENDER on the twentieth (20) day of each month at the latest a preliminary account (invoice) with the amount that the SENDER must pay (corresponding to the current month) based on the Nomination made by the SENDER for the current month. 7.3 Considering that the charging for the Service is made on the Nomination of the current month, ECOPETROL in order to make the corresponding adjustment to the nominated volume and the volume of Crude actually shipped, shall generate the corresponding debit and credit vouchers and shall deliver said debit or credit vouchers together with the invoice(s) of the nominated month to be charged. The due date of the debit and credit vouchers shall be the same as for the invoice (with the nominated volume) of the current month in order to facilitate the SENDER the making of only one net payment for both items. 7.4 Payments shall be made in Colombian pesos using the arithmetic average of the representative market exchange rate certified by the Superintendence of Finance or the entity replacing it, of the days of the month corresponding to the Service invoiced. 7.5 The SENDER shall make the payment by means of making a deposit in any of the bank accounts as indicated by ECOPETROL. In case ECOPETROL requires any changes in the bank account, it shall be informed in writing to the SENDER. 7.6 The SENDER is obliged to receive the invoice once ECOPETROL has filed it. Any objections to the invoicing will not interrupt the term for the payment respect to the sums that are not objected by the SENDER, pursuant to the term established in this clause. ECOPETROL shall issue the note credit or equivalent document respect to the sums objected by the SENDER, in order to rectify the inaccuracy. + + 3 + + + + + + + + CLAUSE EIGHTH BONDS 8.1 The SENDER may pay in advance the Service for the Contracted Capacity, in which case the corresponding invoice shall be adjusted pursuant to the provisions in the Clause of Terms of Payment as it may apply. 8.2 Otherwise, In order to guarantee compliance with all and each of the obligations of the SENDER under the Contract hereof, including but without being limited to the payment of the Fee, the SENDER is obliged to constitute in favor of ECOPETROL and to deliver within ten (10) business days after the subscription of the Contract hereof for the amount indicated in the Specific Conditions (hereinafter, the "Bond"): a) A performance policy for the payment of Services issued by an insurance policy legally established in the country, governed by the General Clauses of ECOPETROL indicated in Annex 3; or b) An irrevocable stand-by letter of credit at first requirement, issued by (i) a banking establishment authorized to operate in Colombia with AAA credit rating for its long-term debt in pesos, o (ii) a foreign financial entity with representation or a confirming and payment bank in Colombia, with risk credit of long term debt in dollars no less than the rating for the foreign sovereign debt of Colombia issued pursuant to the International Standby Practices (ISP98) of the International Chamber of Commerce, for which, it may be used the form contained in Annex 4 of the Contract hereof. 8.3 The Bond shall be valid during all the term of execution of the Contract plus one hundred twenty (120) calendar days. + + + + 7.7 ECOPETROL, in order to facilitate and expedite the verification of the invoices by the SENDER shall deliver via e-mail the same day of its preparation and in PDF format, to the account of institutional e-mail registered by the SENDER, a copy of the invoices and corresponding debit and credit vouchers. 7.8 The SENDER shall pay late interests on any unpaid amounts pursuant to the provisions set out by ECOPETROL in the Guidelines for Administration of Service Receivables ECP-UTE-G-008 or a document that modifies or supersedes it, which is an integral part of the Contract hereto as Annex 2. 7.9 The shipment tax shall be invoiced in Colombian pesos upon obtaining the corresponding liquidation from the Ministry of Mines and Energy and shall be paid to ECOPETROL by the SENDER, within the fifteen (15) calendar days after ECOPETROL files in the offices of the SENDER the corresponding bills or invoices. 7.10 The amounts deposited by the SENDER in any of the bank accounts of ECOPETROL must come from the accounts owned by the SENDER, who by means of written communication before the subscription of the Contract will certify the origin of funds. This in accordance with the Policy for the Prevention and Control of Asset Laundering of ECOPETROL. + + 4 + + + + + + 8.4 In the case of local financial institutions, the bond shall expressly state that the issuer waves the benefit of excussio stipulated in article 2383 of the Colombian Civil Code. 8.5 The issuance and validity of the Bond shall be an indispensable condition for the provision of the Service. As a consequence, ECOPETROL may suspend the provision of the Service or terminate the Contract in advance, when the Bond is not in force, without this waiving the SENDER from its payment obligations and all other obligations derived from the Contract hereof. CLAUSE NINTH OBLIGATIONS OF THE SHIPPER 9.1 In addition to the obligations set forth in the Manual of the Shipper and those established in the law, ECOPETROL is obliged in a special manner to: + + CLAUSE TENTH OBLIGATIONS OF THE SENDER 10.1 In addition to the obligations set out in the Manual of the Shipper and those in the law, the SENDER is obliged particularly to: + + + + a) Receive in the Entrance Point agreed in the Pipeline, the Crude owned by the SENDER up to the volume corresponding to the Contracted Capacity, subject to the Available Capacity of the Pipeline in the Month of Operation in which the Service is to be provided. b) Maintain in custody the Crude delivered from the Point of Entrance until the time of delivery to the SENDER in the Exit Point. Notwithstanding the foregoing, in the event in which the SENDER does not receive the Crude in the Point of Exit pursuant to the agreement, the responsibility by the ECOPETROL to maintain the Crude in custody shall cease. c) Shipping and decanting through the Pipeline the Crude delivered by the SENDER from the Point of Entrance until the Exit Point. d) Store the Crude from its reception in the Point of Entrance until delivered to the SENDER in the Point of Exit, exclusively to facilitate its shipment under the Contract hereof, not including the storage for export or the segregate storage of Crude. e) Deliver the Crudes shipped to the SENDER or whoever is designated as receiver of the same in the Point of Exit, in accordance with the instructions received by the SENDER and with the conditions of the Manual of the Shipper. f) ECOPETROL shall not be obliged to receive Crude: (a) when the same fails to fulfill the Specifications of Quality agreed in the Contract hereof; (b) when the SENDER does not have an accepted nomination in the Shipment Schedule of the Pipeline, or (c) when there are not valid agreements of the SENDER that allow the delivery of Crude in the Point of Exit. g) Execute all other obligations derived from the nature of the Contract. + + 5 + + + + + + + + CLAUSE ELEVENTH RISKS AND RESPONSIBILITY 11.1 Each Party shall be responsible for any damage caused to the other Party as a result of failing to fulfill its obligations under the Contract hereof, in the terms set out in the clause hereof. 11.2 Responsibility of ECOPETROL: + + + + + + a) Undertake the nomination of the Crudes to be shipped, pursuant to the procedure established in the Manual of the Shipper. b) Deliver at the Point of Entrance the Crudes of its own/production included in the Shipment Schedule as a result of the nomination process. c) Receive in the Point of Exit the Crudes transported as established in the Manual of the Shipper and the procedures set forth by ECOPETROL, or if a receiver different than the SENDER has been designated, this shall take al necessary measures so that the Crude is received in accordance with the stipulations in the Manual of the Shipper and the procedures set out by ECOPETROL, the SENDER is any case responsible for the reception of the Crude. In case the Crude is not received at the Point of Exit, the provisions established in the Manual of the Shipper shall be applied. d) Enter into the contracts with other shippers or terminal operators required to ensure the delivery of crudes at the Point of Exit without affecting the operation of the Pipeline. e) Make the Fee payment and all other items as they may apply in the terms and conditions established in the Contract hereof. f) Execute the bond in favor of ECOPETROL. g) Make the payment of the shipping tax under the conditions set out in this Contract and the law. h) Execute all other obligations derived from the nature of the Contract. + + a) In addition to the provisions in the Manual of the Shipper, ECOPETROL shall not be responsible for any faults in the Service, or the loses, damage or deterioration the Crude may suffer, if the fault in the Service, the loss, damage or deterioration of the Crude are due to (i) events of force majeure or acts of nature, (ii) Acts from third parties, (iii) vice inherent to the Crude, or (iv) fault attributable to the Sender (hereinafter, the "Excusable Events"). b) ECOPETROL shall only be responsible for the faults in the Service or loses, damage or deterioration the Crude may suffer to the extent it does not demonstrate that (i) no Excusable Event has occurred, and also, (ii) ECOPETROL failed to adopt the reasonable measures any shipper would have taken according to the requirements of operation of a pipeline with similar characteristics to the Pipeline, to avoid the damage or its aggravation. c) In all other events, different than those in connection with the provision of the Service, ECOPETROL shall be liable to the extent in incurs in gross negligence. d) Save the event of gross negligence or willful misconduct, pursuant to the provisions in this numeral 11.2, the responsibility of ECOPETROL under the Contract hereof under no circumstance shall exceed seventy five per cent (75%) of the value of the Crude lost or damaged by causes attributable to ECOPETROL. + + 6 + + + + + + + + 11.3 Crude Assessment: In order to determine the value of the Crude for liability purposes based on the previous numeral, ECOPETROL shall establish the following rules: a) For those Pipelines using the mechanism of Volumetric Compensation for Quality and pursuant to the indications in the Manual of the Shipper, the value of the Crude shall be determined based on the result generated by the application of said mechanism defined for the Pipeline for the month in which the loss or damage of Crude occurs. b) For intermediate Pipelines and/or ending in Sea Terminals and not using the mechanism of Volumetric Compensation for Quality, the assessment of the Crude shall be made taking the price of reference of export of Crude in the respective Sea Terminal, reported for the month in which the loss or damage of Crude occurs, based on the commercial balance of ECOPETROL for the export mix of which the Crude was part, discounting the applicable monthly fee for the Services, and including but not limited to, the handling services in plant, storage, terminal services, etc., up to the Point of Entrance of the Pipeline in which the loss or damage of the Crude has occurred. 11.4 Responsibility of the SENDER: + + 11.5 In those events in which the SENDER may be involved, the technical procedures defined for these occasions by ECOPETROL shall be followed: 11.6 Procedure under an Excusable Event: In the event of occurrence of an Excusable Event: + + + + + + e) Save the event of gross negligence or willful misconduct, if any claims arise by the SENDER such as the loss of profit, this shall not exceed twenty five percent (25%) of the value that ECOPETROL is obliged to indemnify the SENDER under this numeral 11.2(d) of the Contract hereof. + + a) The SENDER shall be liable for any damage caused to ECOPETROL for the default of its obligations under the Contract hereof and shall be responsible for any damage derived from or as a consequence of the actions or omissions of the SENDER, its workers, subordinates, contractors and subcontractors, except in cases of (i) gross negligence or willful misconduct by ECOPETROL, or (ii) a force majeure or unforeseen circumstances. b) The SENDER shall not be waved from its responsibility to pay the Fee agreed in this Contract, save the Service is not provided by causes exclusively attributable to ECOPETROL as indicated in numeral 11.2 b). + + a) ECOPETROL shall notify the SENDER within twenty four hours (24) following the moment of occurrence, making the commitment to submit all details within the following five (5) business days. + + 7 + + + + + + + + 11.7 The fulfillment of all legal obligations corresponding to each of the Parties, among them and including, those in connection with its personnel, compliance with environmental standards, those related with the legality of intellectual property rights, tax provisions or any other similar obligation, shall be borne and will be the exclusive responsibility of the Party to whom said obligation corresponds and its failure to perform it shall only affect said Party. 11.8 The fact that any of the Parties fails to enforce to the other Party any of the stipulations hereof at any time, shall not be considered a waiver for the performance of said stipulation, unless the other Party notifies it in writing. No waiver to allege a violation of this Contract shall be considered as a waiver to allege any other violation. 11.9 The Parties state to be aware of the public order and security conditions of the areas in which the purpose of the Contract shall be developed, and each Party assumes its own and exclusive responsibility for the risks derived from such conditions, and therefore, shall not take any claim or action against the other Party due to any damage or injuries suffered by said Party on its property, personnel, its agents, contractors or subcontractors (including its employees or subordinates) resulting from public order or security conditions. 11.10 Each Party shall be exclusively responsible for any damage caused to third parties as a result of its proved and exclusive fault. In particular, each Party shall be responsible for all loss or damage to the property of third parties or injury, illness or death of all third parties as a result of its acts or omission or those from its personnel. CLAUSE TWELFTH PENAL PECUNIARY CLAUSE 12.1 In case of failing to fulfill the obligations of the SENDER as a result of any actions or illegal omissions or deviations from the Contract, the SENDER agrees to pay ECOPETROL as a penalty, an amount equivalent to ten percent (10%) of the final value of the Contract. 12.2 Said sum shall be charged to the amount of damage suffered by ECOPETROL, and its value may be taken directly from the balance in favor of the SENDER if there is any, or else from the Bond. If this is not possible, the penal pecuniary clause shall be collected by means of execution for which the Contract shall be a writ of execution. 12.3 The application of the penal pecuniary clause does not include the indemnification for any damages borne by the SENDER if the amounts of these are higher, under the criteria of ECOPETROL, to the amount of the penal pecuniary clause agreed hereof, nor it releases the SENDER from its payment obligation of the totality of the value of the Contract pursuant to the conditions agreed. + + + + b) ECOPETROL shall carry out all reasonable procedures as required to resume as soon as possible the performance of the obligations of the Contract. Likewise, it shall make efforts to minimize or mitigate any delay or additional costs that may be generated. + + 8 + + + + + + CLAUSE THIRTEENTH SUSPENSION DUE TO NON-PERFORMANCE OF THE SENDER 13.1 ECOPETROL shall be entitled to suspend the Service in case of any events that may represent a serious default on any of the obligations of the SENDER. For this purpose, a communication from ECOPETROL addressed to the SENDER shall be sufficient, notifying the serious default. ECOPETROL may, based on the seriousness and the effects of the default, grant the SENDER a reasonable term to fix the default (the "Grace Period"), which under no circumstance may be granted if the default is due to the non-payment of the Fee in the terms set out in the Contract hereof. If, upon expiration of the Grace Period the SENDER has not resolved the default, ECOPETROL may suspend the Service and the SENDER shall not be entitled to any indemnification under no circumstance. The reestablishment of the provision of Services shall be subject to previous approval in writing by ECOPETROL. 13.2 The suspension of the Contract is not a waiver or a release for the SENDER on its responsibility to pay the Fee and all other concepts that may be applicable under the Contract hereof. CLAUSE FOURTEENTH TERMINATION OF THE CONTRACT 14.1 The Contract hereof shall terminate upon expiration of the term of validity agreed. 14.2 The Parties agree that ECOPETROL may declare the termination in advance of the Contract at any time, without any indemnity in favor of the SENDER in the following events: + + + + + + a) Serious default of the obligations of the SENDER without solving them within the Grace Period, when it may apply. b) The dissolution of the SENDER as a legal person. c) The unauthorized assignment of the Contract by the SENDER. d) Due to changes in regulations making more costly the fulfillment of obligations undertaken by ECOPETROL. e) As a consequence of any of the following causes: (i) fraud of the SENDER; or (ii) the SENDER incurs in acts or conducts that may endanger the operational and/or technical stability of the Pipelines. f) The procedure to be followed by ECOPETROL to terminate the Contract is: notify in writing with at least thirty (30) calendar days in advance to the SENDER its intention to terminate the Contract, indicating the causes for such decision and the effective date of termination. Upon fulfillment of this procedure the SENDER shall not: (i) request any justifications or extensions to the motives explained by ECOPETROL, or (ii) request or demand any kind of compensation or damages derived from the decision to terminate the Contract. g) The termination shall not release the Parties from its corresponding obligations and responsibilities attributable to periods before the date of termination of the Contract. + + 9 + + + + + + + + 14.3 It shall not be necessary any previous private or judicial requirement for purposes of enforcement of this clause. CLAUSE FIFTEENTH TAXES 15.1 All taxes, contributions, rates, surcharges and any other national, departmental, district or municipal taxes caused by the entering into, execution and liquidation of the Contract hereof, shall be borne by the Party that has to assume said payment pursuant to the law. 15.2 The collection and payment of the shipment tax shall be assumed by ECOPETROL before the Ministry of Mines and Energy, and therefore the SENDER shall pay the same to ECOPETROL pursuant to the provisions hereto. CLAUSE SIXTEENTH LIQUIDATION OF THE CONTRACT 16.1 Upon expiration of the Term of Validity, the Parties shall subscribe the minutes of termination of the execution. 16.2 The Parties shall make the liquidation of the Contract by mutual agreement within three (3) months following the expiration of the date of termination of the Contract. 16.3 In case the SENDER fails to appear to the liquidation, or if there is not an agreement of the same within the term previously mentioned, the SENDER expressly authorizes ECOPETROL to proceed with the liquidation in one (1) month term. 16.4 The following shall be expressly stated in the minutes of liquidation: + + 16.5 Upon liquidation of the Contract, the SENDER shall pay ECOPETROL any Fees or any amount of money owed or resulting from the final liquidation of the same, after making any deduction that may be applicable. + + + + h) The termination in advance of this Contract shall not release the SENDER from the obligations that survive the termination of the Contract, especially that related with the payment of the Fee pending of payment and the payment of the penal clause. In the event of termination in advance of the Contract, the SENDER shall have a sixty (60) day term following the issuance of the corresponding invoice by ECOPETROL to pay the amount of any overdue fees. + + a) The statement regarding the performance of the obligation undertaken by each of the Parties (or from ECOPETROL if the liquidation is unilateral) derived from the execution of the Contract; and b) Any agreements, settlements and transactions reached by the Parties to settle any differences that may have arisen and to obtain the good standing and release of any obligations. + + 10 + + + + + + CLAUSE SEVENTEENTH AUTHORIZED REPRESENTATIVES FROM THE PARTIES 17.1 Each of the Parties shall notify to the other in writing, before the commencement of the execution of this Contract the name, position, addresses, institutional electronic mails and telephone numbers of the person(s) authorized to represent it. Likewise, any change of these representatives shall be notified in writing. 17.2 Any instruction or notification addressed to the representative designated in the manner previously established shall be considered as addressed to the respective Party. CLAUSE EIGHTEENTH AMENDMENTS 18.1 Any amendment, clarification or addition to the conditions stipulated in the Contract hereof, shall be in writing, in documents subscribed by the authorized representatives by the Parties. CLAUSE NINETEENTH ASSIGNMENT 19.1 The SENDER shall not assign totally or partially the Contract hereof, without the previous written consent by ECOPETROL. 19.2 The assignee shall assume all rights and obligations in the same terms established hereto. 19.3 The assignment may be authorized by ECOPETROL, when the SENDER sufficiently demonstrates to ECOPETROL that: + + a) The assignee is a legal person duly organized and the duration of the same shall not be less that the term of the Contract and three (3) more years. b) The assignee has an adequate financial capacity to meet the obligations derived from the Contract assigned. c) The assignee has Crude of its own/production. d) The assignee provides and adequate and acceptable Bond payment to ECOPETROL for the fulfillment of the obligations derived from the Contract. + + 19.4 ECOPETROL may assign the Contract without the authorization from the SENDER. + + + CLAUSE TWENTIETH LICENSES, PERMITS AND AUTHORIZATIONS 20.1 The Parties are obliged to have or obtain all required licenses, permits and authorizations for the execution of the purpose of the Contract. Each Party shall be individually liable for all those risks, fines, sanctions or damage caused as a result of the absence of any license, permit or authorization that is obliged to obtain and therefore shall defend and hold the other Party harmless before any authorities, judges and third parties. + + + 11 + + + + + + CLAUSE TWENTY-FIRST EXCLUSION OF THE LABOR RELATION 21.1 The Parties do not assume any labor relationship with personnel that, by virtue of the Contract, are assigned to the other Party for the appropriate execution of the same. All future or present obligations resulting from the relations of the Parties with its personnel shall be exclusively borne by the Party involved, and therefore, each Party assumes full responsibility concerning compliance with labor regulations and social security and shall hold the other Party harmless against any claim in connection with any violation to the mentioned regulations. CLAUSE TWENTY-SECOND INDEMNITY 22.1 ECOPETROL is obliged to protect, indemnify and hold the SENDER harmless against any loss, cost or damage to be caused or derived from, or related with the breaching of the Contract by ECOPETROL, save the same are caused by Excusable Events. 22.2 The SENDER is obliged to protect, indemnify and hold ECOPETROL harmless and its parent, affiliates and subsidiaries, and the directors, employees, agents and representatives of ECOPETROL, and of its affiliates and subsidiaries against any loss, cost or damage to be caused or derived from or related with the execution of the Contract, except (i) by causes exclusively attributable to ECOPETROL or (ii) force majeure or unforeseen circumstances and acts of third parties. CLAUSE TWENTY-THIRD CONFIDENTIALITY 23.1 The Parties make the commitment to keep strict confidentiality and not to disclose to any person any information considered as confidential (the "Information"), which has been provided through the development of the Contract hereof, and through the development of the activities inherent to ECOPETROL and/or the SENDER. 23.2 Without prejudice of the foregoing, only in the following cases information may be disclosed: + + 23.3 For any information to be disclosed, that must be or wished to be disclosed as established in previous numerals, only the disclosure in question shall proceed after consulting, if the period granted by law or the authority ordaining the disclosure of the information allows it, with the Party that has provided the information. + + + + a) When the disclosure of information is mandatory by law; b) When the disclosure of information is ordered by a competent authority; c) When the information in question is of public domain, without any action or omission from the Parties; or d) When the entity providing the information authorizes it, in each case, previously and in writing; + + 12 + + + + + + 23.4 Furthermore, it shall be understood that the Information may be disclosed to employees, advisors and officers of the Parties, as well as employees, advisors, officers, auditors and insurance companies of the shareholders of ECOPETROL or the SENDER (including parents, affiliates and subordinates). 23.5 In any case, the Parties shall ensure that persons to whom the Information is disclosed hold, in turn, said Information as confidential and refrain from disclosing it. The Parties shall be responsible for any disclosure of Information to any of its employees, advisors and officers. If the Parties become aware of any unauthorized disclosure of confidential Information, it shall be notified immediately to the other Party and jointly shall take all measures necessary and/or convenient to prevent other disclosures of Information in the future. 23.6 The SENDER shall solely use or permit the use of the Confidential Information disclosed under the execution of this Contract to perform it. The disclosure of Confidential Information under this Contract shall not grant any other right. 23.7 The SENDER shall be responsible for ensuring that all persons to whom the Confidential Information is revealed under the execution of this Contract maintain said Information as Confidential and without disclosing it to any unauthorized persons. The SENDER shall be liable for any damage caused to ECOPETROL in case of breaching the Contract hereto, or if through negligent actions or omissions, discloses or makes public any Confidential Information outside the terms set out herein in accordance with law. 23.8 ECOPETROL may request the return of the Information at any time after notifying in writing to the other Party. Within thirty (30) days following the reception of said notification, the SENDER shall return all original Information and destroy or make to be destroyed all copies and reproductions (in any manner, including but without being limited to electronic means) in its possession and in possession of persons to whom it was disclosed pursuant with the Contract hereof. In any case, upon expiration of the term of execution of the Contract, the SENDER shall return all original Information and destroy or make to be destroyed all copies and reproductions (in any manner, including but without being limited to electronic means) in its possession and in possession of persons to whom it was disclosed pursuant with the Contract hereof. 23.9 During the term of execution of the Contract, ECOPETROL is obliged to keep in reserve and not to disclose the information expressly identified and in writing by the SENDER that is protected by copyrights or industrial secret pursuant to the regulations in force, that is directly delivered by the SENDER as a result of the execution of the Contract, and makes the commitment not to deliver said information to any third parties, except as ordered by the judicial or administrative authorities or in events required by the legal provisions in force. 23.10 This confidentiality clause shall keep its validity, inclusively after the date of termination of the Contract hereto, until the date in which all obligations set out in this clause are fulfilled. + + + + 13 + + + + + + CLAUSE TWENTY-FOURTH SOCIAL CORPORATE RESPONSIBILITY 24.1 The SENDER undertakes the commitment to: a) Respect and obey the Good Governance Code and Policies of Integral Responsibility and Social Corporate Responsibility of ECOPETROL. b) Make the best efforts to establish and maintain, as best as possible, good relations with the institutions (authorities) and communities settled in the region and in the area where the Contract shall be executed. c) Report to ECOPETROL or whoever replaces it, any incidents or new actions that may affect its image and/or the image of ECOPETROL, within three (3) business days after the occurrence of said incidents, in order to have consensus in the handling of said incidents. CLAUSE TWENTY-FIFTH COMMITMENT WITH TRANSPARENCY 25.1 The SENDER undertakes the obligation to: + + 25.2 The SENDER states to be aware of and accepts the Code of Ethics of ECOPETROL found in the following website: www.ecopetrol.com.co, and the provisions on conflict of interest existing in the by-laws of ECOPETROL found in the same website. In case ECOPETROL determines that the SENDER has incurred in conducts that violate the clause hereof, ECOPETROL may terminate the Contract. + + + + a) Maintain conducts and appropriate controls to ensure an ethical conduct and in accordance with regulations in force. b) Refrain from making (directly or indirectly, or through employees, representatives, affiliates or contractors) payments, loans, gifts, gratifications, commissions, to employees, managers, administrators, contractors or suppliers of ECOPETROL, public officials, members of corporations of popular election or political parties, in order to induce such persons to conduct any action or make any decision or use their influence in order to contribute to obtain or retain businesses in connection with the Contract. c) Refrain from originating records or inaccurate information, or publish information that affects the image of the other Party when based on assumptions that have not been demonstrated. d) Avoid any situation which may generate a conflict of interest. e) Communicate mutually and reciprocally any deviation from the line of conduct indicated in this clause. + + 14 + + + + + + CLAUSE TWENTY-SIXTH INTEGRITY 26.1 The Contract hereof constitutes a sole and integral agreement regarding the purpose of the same and replaces any previous agreement that has not been written in this Contract. 26.2 The following documents are an integral part of the Contract: + + + + + + + + 26.3 Likewise, all regulations and procedures that ECOPETROL has established for the development of the activities being the purpose hereto are an integral part of this Contract. CLAUSE TWENTY-SEVENTH LEGAL REGIME 27.1 The relation established in the Contract hereof is of commercial nature and therefore is governed by the regulations of Colombian private law. CLAUSE TWENTY-EIGHTH NOTIFICATIONS 28.1 All communications and invoices between the SENDER and ECOPETROL delivered as a result of this Contract shall require for its validity to be in writing, and depending on the will of the Party issuing it, they will have to be: + + 28.2 All communications shall deemed as served and valid: + + + + + +ANNEX 1 MANUAL OF THE SHIPPER OF THE ECOPETROL S A PIPELINE + +ANNEX 2 GUIDELINES FOR THE ADMINISTRATION OF RECEIVABLE SERVICES OF ECOPETROL + +ANNEX 3 GENERAL CLAUSES OF ECOPETROL FOR PERFORMANCE POLICIES + +ANNEX 4 STAND-BY LETTER OF CREDIT FORM + + a) delivered personally; or b) transmitted by facsimile, electronic mail or any other means through which it may be proved its delivery and reception (with proved reception and confirmation by mail). + + a) On the reception date if delivered personally, or b) Twenty four (24) hours after the transmission date, if transmitted by facsimile, electronic mail or any other means through which its delivery and reception may be proved; provided however, confirmation is received within the following three (3) days; whatever occurs first. + + 15 + + + + + + 28.3 Each Party may change the address for these purposes, with previous written communication to the other Party with fifteen (15) calendar days in before the expected date for such change. 28.4 All notifications and communications to be made to the Parties as a result of the execution of this Contract shall be delivered to the addresses indicated in the Specific Conditions. CLAUSE TWENTY-NINTH MISCELLANEOUS 29.1 Severability: the voidance, nullity or inefficacy of any provision of this Contract shall not affect the validity, efficacy and enforceability of all other provisions of the same. In these events the Parties are obliged to negotiate in good faith a clause resulting legally valid, and enforceable, whose purpose is the same of the provision or provisions having vices of nullity, invalidity or non-enforceability, as the case may be. 29.2 Administration and Inspection: ECOPETROL shall designate an administrator and inspector of the Contract, whose functions shall be established in the Manual of Administration and Inspection of ECOPETROL. 29.3 Survival: The termination of this Contract shall not relieve the Parties from any obligation towards the other Party pursuant to this Contract, or any other loss, cost, damage, expense or responsibility which may occur under this Contract before or as a result of said termination. CLAUSE THIRTEENTH PERFECTION AND EXECUTION 30.1 The Contract hereof is perfected with the subscription of the same. For its execution the approval of the bond assumed by the SENDER is required. + + + + 16 + + + + + + ANNEX 1 MANUAL FOR THE TRANSPORTER OF PIPELINES ECOPETROL S A + + + + + + + + + + Operation and Transport Regulations Version 1 MANUAL FOR THE TRANSPORTER OF PIPELINES ECOPETROL S A TABLE OF CONTENTS + + + + + +CLAUSE 1. PURPOSE 3 CLAUSE 2 DEFINITIONS 3 CLAUSE 3 GENERAL DESCRIPTION OF THE PIPELINE 10 CLAUSE 4 OBLIGATIONS OF THE PARTIES 10 CLAUSE 5 FEES 13 CLAUSE 6 SPECIAL SERVICES 14 CLAUSE 7 ADJUSTMENT OF THE EFFECTIVE CAPACITY OF THE SYSTEM DUE TO VARIATIONS IN THE SPECIFICATIONS OF HYDROCARBONS 14 + + CLAUSE 8 PROJECTIONS, NOMINATION AND TRANSPORTATION SCHEDULE OF THE PIPELINE 15 CLAUSE 9 BALANCE IN EXCESS OR DEFECT 18 CLAUSE 10 PRIORITIES IN THE NOMINATION PROCESS 19 CLAUSE 11 REJECTION OF A TRANSPORTATION REQUEST 20 CLAUSE 12 QUALITY REQUIREMENTS 21 CLAUSE 13 DETERMINATION OF QUANTITIES AND QUALITY 22 CLAUSE 14 VOLUMETRIC COMPENSATION FOR QUALITY 25 CLAUSE 15 BULLETIN OF TRANSORTATION BY THE PIPELINE - BTO 26 CLAUSE 16 SPECIAL TRANSPORTATION CONDITIONS 28 CLAUSE 17 REGULATIONS FOR THE TRANSPORTATION OF SEGREGATED HYDROCARBON 29 CLAUSE 18 RISKS AND RESPONSIBILITY 29 CLAUSE 19 FILLING THE PIPELINE OR FILLING THE LINE 31 CLAUSE 20 HANDLING LOSSES IN THE PIPELINE 31 CLAUSE 21 CLAIMS 33 + + 1 + + + + + + Operation and Transport Regulations Version 1 + + + + + +CLAUSE 22 SANCTIONS TO OPERATING AGENTS FOR NON-PERFORMANCE OF THE TRANSPORTATION SCHEDULE 33 CLAUSE 23 HYDROCARBON AFFECTED BY LITIGATION 34 CLAUSE 24 INVESTMENTS IN THE PIPELINE 35 CLAUSE 25 SOLE RISK PROPOSALS 36 CLAUSE 26 PROCEDURES FOR COORDINATION OF OPERATIONS, COMMUNICATIONS AND EMERGENCY ASSISTANCE 38 CLAUSE 27 SETTLEMENT OF CONTROVERSIES 39 CLAUSE 28 VALIDITY 39 CLAUSE 29 ADDITIONS AND MODIFICATION 39 CLAUSE 30 APPLICABLE LEGISLATION 39 ANNEX 1: MECHANISMS OF QUALITY COMPENSATION FOR THE MIXTURE OF CRUDE OIL 40 ANNEX 2: DEFINITION OF STANDARD BARRELS PER SYSTEM 48 ANNEX 3: DESCRIPTION OF THE SYSTEMS 49 ANNEX 4: MINIMUM SPECIFICATIONS OF QUALITY PER SYSTEM 50 + + 2 + + + + + + Operation and Transport Regulations Version 1 CLAUSE 1. PURPOSE + + + + + + CLAUSE 2 DEFINITIONS 2.1 All terms listed hereunder shall have the meaning assigned in this Manual without any difference when the term is used either in singular or plural, upper or lower case letters. 2.1.1. Transportation Agreement or Transportation Contract: means the agreement between the Transporter and a Sender whose purpose is the Transportation of Crude Oil through the Pipeline. 2.1.2. Operating agent or agent: means any natural or legal person, public or private person involved the technical and/or commercial relations for the provision of Transportation services of Crude Oil through Pipelines. 2.1.3. Water and sediment: means any material coexisting with Crude Oil without being part of the same. 2.1.4. Fiscal Year: means the period of time starting at 00:01 hours of January 1st of a year and ending at 24:00 hours of 31 December of the same year. Always being referred to Colombian time 2.1.5. API: means the American Petroleum Institute. Also it will have the meaning corresponding to the measuring unit for density (API 141.5/GE-131.5; where GE is defined as specific gravity), known internationally as one of the sale properties of Hydrocarbons depending on the context used. 2.1.6. ASTM: American Society for Testing Materials. 2.1.7. Provisional Notice: means the notification that the Transporter will deliver to the Sender regarding any damage or additional costs incurred, or about its intention to withdraw and use the Sender's Crude to pay monies in favor of the Transporter or the owner, borne by the Sender and/or to avoid any Operational affectations in the Pipeline. + + + +1.1 The Pipeline is for private use considering its nature and in accordance to the provisions in the Colombian Code of Crude Oils. + +1.2 The purpose of this Manual of the Transporter of the Pipeline (hereinafter the "Transporter's Manual) is to establish the general conditions for the Transportation of Hydrocarbons of the Owners through the Pipeline. + +1.3 Likewise, conditions for the access of Third Parties to the Pipeline are established in those events in which there is Available Capacity in the Pipeline. + + 3 + + + + + + Operation and Transport Regulations Version 1 2.1.8. Balance for the Sender: means the volumetric balance for each of the Senders using the Pipeline. 2.1.9. Volumetric Balance: means the balance of Operations conducted by the Transporter at the end of each month of Operation, in order to establish the amounts of Crude handled in the Pipeline and to make the determination and distribution of Crude losses. 2.1.10. Barrel: means a volume equal to 42 United States of America gallons. Each gallon is equal to three liters and seven thousand eight hundred and fifty three ten thousands of liters (3.7853). 2.1.11. Standard Barrel: means the volume of Hydrocarbons including dissolved water, suspended water and suspended sediment but excluding free water and bottom sediments, calculated at standard conditions (60F and 14.7 lbf/in, or 15C and 1.01325 bares). 2.1.13. Net Standard Barrel: means the volume of Hydrocarbon excluding total water and total sediment, calculated at standard conditions (60F and 14.7 lbf/in, or 15C and 1.01325 bars). 2.1.14 Barrels per Calendar Day (bpdc): means the measuring unit of flow volume referring to the average value of a specific period. 2.1.15 Barrels per Operational Day (bpdo): means the measuring unit of flow volume referring to the average value of days effectively operated. 2.1.16 Bulletin of Transportation by Pipeline: means the website in which the Transporter makes available to agents and all other interested parties, the information indicated in resolutions No 18-1258 and 12-4386 of 2010, issued by the Ministry of Mines and Energy, which regulates Transportation through Pipelines and the methodology to set out the rates, as amended or superseded. 2.1.17 Quality of a Hydrocarbon: means a set of characteristics contained in a volume of Hydrocarbon. These characteristics are referred, among others, to viscosity, API gravity, specific gravity, percentage in weight of sulfur, Point of fluidity, acidity, steam pressure, percentage in volume of water, percentage in weight of sediments and salt content. 2.1.18 Contracted Capacity: means the Capacity of the Pipeline committed through Transportation Contracts. 2.1.19 Designed Capacity or Transportation Capacity: means the Transportation Capacity for Crude Oil established for the Pipeline, based on the Crude properties and specifications of the equipment and tubing for the calculation and design of the Pipeline. If the design of the Pipeline is modified to increase said Capacity, then this will be the new design Capacity. + + + + 4 + + + + + + Operation and Transport Regulations Version 1 2.1.20 Owners Capacity: means the Transportation Capacity of the Pipeline necessary in a period of time for the Transportation Crude Oil owned by its owners, its parent companies or subsidiaries. 2.1.21 Available Capacity: means, for a specific period of time, the difference between the effective Capacity and the sum of: i) the owner's Capacity, ii) the Contracted Capacity and iii) the preferred rights, which shall be available for the Transportation of Third Party's Crude under the conditions set out in the Manual hereof. 2.1.22 Effective Capacity or Transportation Effective Capacity: means the maximum average Capacity of Transportation, which may be used for Crude Transportation in a specific period of time. This is calculated as the product of the nominal Capacity by the service factor. 2.1.23 Nominated Capacity: this means the Crude volume that, according to a letter from the Sender or Third-Party delivered to the Transporter in the respective month of nomination, and in accordance with the procedures established in this Manual, they require it to be transported through the Pipeline. 2.1.24 Nominal Capacity: means the maximum Transportation Capacity between a pumping station and a Pipeline terminal, or between two pumping stations, calculated considering the installed equipment in the system and the expected quality of Crude for a specific period of time. It is expressed in BOPD for a Hydrocarbon of standard barrel characteristics in terms of viscosity in cstks at 30 C and API at 60 F according to the design Capacity of the Pipeline. 2.1.25 Programmed Capacity: this means the portion of the effective Capacity of Transportation of the Pipeline assigned to each Sender or Third Party requesting the Transportation service in accordance with the provisions in this Manual. 2.1.26 Volumetric Compensation for Quality or CVC: this means the procedure by which Senders are compensated for the gain or loss in the discounts of Crude as determined by the difference between the Crude delivered by the Sender at the Point of Entrance compared to the Crude withdrawn at the Point of Exit. 2.1.27 Monetary Conditions: means the tables or formulas to calculate any extra charge and bonuses for Crude quality and commercial discounts applied on the Rate for the Line. + + + + 5 + + + + + + Operation and Transport Regulations Version 1 2.1.28 Connection: this means the installation that allows delivery of Crude to the Pipeline and/or withdrawal of Crude from the Pipeline. 2.1.29 Ship or Pay Transportation Contract: this means the agreement between the Transporter and a Sender that regulates the provision of the Transportation service of Hydrocarbons for a specific Contracted Capacity in firm, understanding that the Sender has a permanent right for the Transportation of a specific volume of Hydrocarbons, and that the Payment of the rate is agreed in firm, regardless of the volume effectively transported or even if no volume is transported. 2.1.30 Spot Transportation Contract: this means the agreement between the Transporter and a Sender that regulates the provision of the Transportation service of Hydrocarbons for a specific Contracted Capacity in a month of Operations, subject to the available Capacity of the Pipeline in the process of nomination. 2.1.31 Coordination of Operations: means the set of activities conducted by the Transporter to control the development of the Transportation program and procure its fulfillment. 2.1.32 Crude Oil or Hydrocarbon: means the natural mix of Hydrocarbons in accordance with the definition through the article 1 of the Petroleum Code, which exists in underground deposits and remains liquid at atmospheric pressure after going through the separation facilities on surface, as well as the products necessary to make viable its Transportation such as diluents. 2.1.33 Crude for Transportation: means the inspected Crude Oil delivered to the Pipeline for Crude Transportation. This category includes inspected Crude Oils both segregated or separated from others as well as those mixed between them, when they may be mixed, in both cases, with any other substance for Transportation purposes. 2.1.34 Inspected Crude: means the Crude Oil treated, dehydrated, degasified, drained, settled, stabilized and measured at the inspection facilities. 2.1.35 Mixed Crude or Mix: means the combination of different Crude before and/or after delivered to the Pipeline to be transported. 2.1.36 Segregated Crude: means Crude Oil that by agreement between the Transporter and a Sender is decided to be transported through the Pipeline without being mixed with other Crude. 2.1.37 Preferred Right: means the power that the National Government has through the National Agency of Hydrocarbons (ANH) or whoever replaces it, on the Design Capacity of the Pipeline for the Transportation of royalty Crude. This preference is limited to Crude Oil coming from royalties corresponding to production served through the Pipeline. The preferred right shall be up to 20% of the design Capacity. + + + + 6 + + + + + + Operation and Transport Regulations Version 1 2.1.38 Day: means the period of twenty four (24) hours starting at 00:01 of one day and ends at 24:00 of the same day, always referring to Colombian time. 2.1.39 Diluent: means the natural or refined product mixed with heavy Oil to facilitate Transportation through the Pipeline. 2.1.40 Delivery: means the action by which the custody of the volume of the Sender's Crude is transferred to the Transporter to be shaped through the Pipeline. 2.1.41 Reasonable Effort: means the effort that a prudent person makes in handling his own business while protecting his interests. 2.1.42 Initial Pumping Station: means the initial station of the Pipeline. 2.1.43 Final Station: means the final Station on the Pipeline. 2.1.44 Justified Event: means any event or circumstance beyond the Transporter's control such as, including but not limited to, strange cause, force majeure, acts of nature, acts of a Third-Party or the victim, labor disputes or actions of any kind arising from organized labor, outside war (whether or not declared), civil war, sabotage, revolution, insurrection, riots, civil unrest, terrorism, illegal actions from Third parties, epidemics, cyclones, tsunamis, landslides, lightning, earthquakes, floods, rainstorms, fire, adverse atmospheric conditions, expropriation, nationalization, laws, regulations or orders for any competent authority, distortions, damage or accidents in machinery, equipment, Pipelines, power transmission lines or other facilities, attachments, impossibility or delays in obtaining equipment or materials, inherent vices of crude oil, among others. 2.1.45 Service Factor: means that percentage effectively uses of the nominal Capacity due to temporary operating and maintenance restrictions of the Pipeline and its complementary facilities, calculated for a specific period of time in which the effects of unavailability of mechanical equipment, maintenance programs of the line and the number of days of the period considered must be taken into account. 2.1.46 Line Fill or Pipeline Fill: means the volume of Crude necessary to fill in the lines of the Pipeline between the initial pumping station under final station, the bottom of the storage tanks that cannot be pumped o that serve the Pipeline, and all installations, lines, pumping and measuring equipment. + + + + 7 + + + + + + Operation and Transport Regulations Version 1 2.1.47 Calendar Month: means the period of time starting at 00:01 hours of the first day of the Gregorian month and ends at 24:00 hours of the last day of the same Gregorian month. 2.1.48 Nomination Month: means the calendar month immediately before a month of Operations. 2.1.49 Operation Month: means the calendar month during which the Transporter executes the Transportation program. 2.1.50 Entrance Node: means the set of facilities located in a determined geographical area where the Sender delivers the Crude and in which a distance is started. 2.1.51 Exit Node: means the set of facilities located in a determined geographical area where the Sender withdraws the Crude and in which a distance ends. 2.1.52 Nomination: means that transportation service request formalized by each Sender or Third-Party for the month of Operation, specifying the required Transportation volume, the Point of Entrance, the Point of Exit and the quality of Crude and the characteristics of Crude required to be transported. 2.1.53 Pipeline: means all the necessary physical facilities for the Transportation of Crude Oil from the nodes of Entrance to the nodes of Exit including, among others, pipes, pumping units, measuring units, control systems and tanks used for the Operation of the Pipeline. 2.1.54 Operator: means the Transporter or the natural or legal person that performs the Operation tasks of the Pipeline. 2.1.55 Party: means the Transporter and/or Sender, or there assignees as the case may be. 2.1.56 Identifiable Losses: means the losses of Crude that may be located in a specific Point of the Pipeline and attributable to specific events such as breakages, spills, attacks, theft, force majeure or acts for nature. 2.1.57 Non-identifiable Losses: means the normal losses inherent to the Operation of Transportation in the Pipeline corresponding, among others, to what volumetric contractions as a result of the mix, leakages in the equipment, drainages, evaporation and other reasons originated in the handling of the Pipeline. 2.1.58 Transportation Plan: means the projection of the volumes to be transported through the Pipeline and the available Capacity in the medium and long term. + + + + 8 + + + + + + Operation and Transport Regulations Version 1 2.1.59 Transportation Program or Program: means program of Operations of the Pipeline for a month of Operations prepared by the Transporter, days on the cycle of nomination of Transportation. It specifies the use of the effective Capacity, the volumes of Crude entering at the Points of Entrance and volumes of Crude coming out from the Pipeline at the Points of Exit. 2.1.60 Owner: means Capacity S.A. as an exporter company and/or refiner of Crude Oil and its parent and/or branches, holders of the goods and Pipeline's facilities. 2.1.61 Point of Entrance: means the exact Point of the Pipeline, in which the Transporter assumes custody of the Crude delivered by the Sender at the node of Entrance. This must be specified in the Transportation agreement. 2.1.62 Point of Fluidity: means the temperature at which a Crude Oil ceases to flow. 2.1.63 Point of Exit: means the exact of the Pipeline in which the Sender takes the Crude Oil delivered by the Transporter that the node of Exit and the ceases custody of the Crude by the Transporter. This must be specified in the Transportation contract. 2.1.64 Sender: means the natural or legal person to whom the Transporter provides Transportation service of Hydrocarbons through the Pipeline. It shall be understood that the Sender acts as the owner of the Crude to be transported unless specified otherwise. Among the Senders are the ANH and the owner. Any Third parties and the ANH acquire the Capacity of Senders when enter into a Transportation contract with the Transporter. 2.1.65 Withdrawal: means the act by which he Transporter returns to the Sender or whoever is designated, at the Point of Exit, a volume of Hydrocarbons ceasing its custody. 2.1.66 Withdrawal by Defect: means the volume of Crude that is Sender is not withdrawn according to the Transportation program. 2.1.67 Withdrawal by Excess: means the volume of Crude that has been withdrawn from a Sender above the limits in the Transportation program. 2.1.68 Transportation Rate or Rate: means the monetary value per barrel charged by the Transporter to the Senders for the Transportation service. Surcharges, bonuses and discounts shall be applied to this rate as specified in the monetary conditions. 2.1.69 Third Party: means the person that has the ownership title or holding of the Crude Oil and requires from the Transporter the provision of the Transportation service through the Pipeline, conditioned to the existence of available Capacity. + + + + 9 + + + + + + Operation and Transport Regulations Version 1 2.1.70 Transporter: means Capacity S A owner of the Pipeline, or the person appointed as a representative or assignee, whose activity is the provision of the Transportation service. 2.1.71 Distance: means the portion of the Pipeline from a node of Entrance and a node of Exit, which must have a rate. 2.1.72 Volume to Transport: means the Gross Standard Barrels delivered by the Sender to the Transporter at the Point of Entrance. CLAUSE 3 GENERAL DESCRIPTION OF THE PIPELINE The descriptions of the systems to which this Transporter Manual applies are published in Annex 3, description of the systems. CLAUSE 4 OBLIGATIONS OF THE PARTIES 4.1 Obligations of the Senders: The following are obligations of the Sender: 4.1.1 Enter into Transportation Contracts with the Transporter. 4.1.2 Report to the Office of Hydrocarbons of the Ministry of Mines and Energy by communication delivered within ten (10) days following the contracting of the service its Transportation through the Pipeline and the Distance to be used, the origin (regions, municipalities and fields) of the Crude Oil to be transported and the term of the Transportation contract. 4.1.3 Provide the Transporter in on a timely basis and in accordance with the time schedule set out for said purpose, the necessary information for preparation of the Transportation Plan. 4.1.4 Timely present the nomination to the Transporter pursuant to the conditions, specifications, and based on the procedure set out in this Manual. 4.1.5 Comply with and implement the commercial, Operational and administrative procedures of the Manual hereof. 4.1.6 Comply with the Transportation program defined for the month of Operation for the delivery of Crude to the Pipeline at the Point of Entrance and implement whatever may be necessary for its reception at the Point of Exit in accordance with the procedures defined in this Manual. 4.1.7 Deliver and withdraw the Crude Oil within the limits of quality, volume, opportunity and all other conditions set out in this Manual. + + + + 10 + + + + + + Operation and Transport Regulations Version 1 4.1.8 Accountable for the consequences derived for its failure to comply with the obligations agreed in the Transportation contract. 4.1.9 Refrain from conducting restrictive commercial practices or those considered as unfair competition as set forth in laws 155 of 1959, 256 of 1996, Decree 2153 of 1992, Law 1340 of 2009 and all other regulations as amended and superseded. 4.1.10 Comply with the regulations set out by the competent authority on environmental protection and preservation. 4.1.11 Comply with the regulations and procedures set out in this Manual for the connection of the Pipeline, as it may be applicable under the Transporter's judgment. 4.1.12 Pay the rates established for the distances being the purpose of the Transportation service. 4.1.13 Pay to the Transporter, acting as a collector, the Transportation tax established by the legislation for Crude Oil Transportation through Pipelines. 4.1.14 Provide the information as required by the Office of Hydrocarbons of the Ministry of Mines and Energy in order to exercise adequate control of the activity. 4.1.15 Refrain from conducting any actions that may affect the normal Operation of the Pipeline and may cause damage to the Transporter or other Senders. 4.1.16 Contribute and maintain in the Pipeline the quantity of Crude Oil as may be necessary to fill in the line according to the instructions provided by the Transporter. 4.1.17 Indemnify the Transporter and the owner for any damage which may be caused by, or as a consequence of failing to fulfill its obligations. 4.1.18 all those derived from the Transportation contract of this Manual and any applicable regulations. 4.2 Obligations of the Transporter: The following are obligations of the Transporter: 4.2.1 Maintain the Pipeline in adequate operating conditions. 4.2.2 Allow access to the Pipeline of any Third parties requesting it in those cases in which there is available Capacity, provided they fulfill the requirements established in this Manual. + + + + 11 + + + + + + Operation and Transport Regulations Version 1 4.2.3 Enter into Transportation Contracts with Senders and Third parties which comply with the requirements of this Manual. 4.2.4 Prepare, publish and keep the BTO updated. 4.2.5 Submit the Manual to the Office of Hydrocarbons of the Ministry of Mines and Energy, keep it updated and publish it in the BTO. 4.2.6 Report to the Office of Hydrocarbons of the Ministry of Mines and Energy, the Transportation Contracts subscribed with the Senders within ten (10) days after its execution. 4.2.7 Pursuant to Article 47 of the Petroleum Code of Colombia give notice to the Office of Hydrocarbons of the Ministry of Mines and Energy on the Transportation requests made by Third parties to use the available Capacity within (30) days following reception of the applications, indicating the Contracting Party or applicant, the distance and the volumes to be transported. 4.2.8 Conduct its Transportation activity separately from other activities and giving an objective treatment to all agents in connection with the Pipeline. 4.2.9 Refrain from conducting restrictive commercial practices or those considered as unfair competition as set forth in laws 155 of 1959, 256 of 1996, Decree 2153 of 1992, Law 1340 of 2009 and all other regulations as amended and superseded. 4.2.10 Provide suitable facilities to receive the Crude Oil according to their specifications set out in this Manual, control volumes and the quality of the same and carry out the Transportation according to the industry's specifications. 4.2.11 Attend the Transportation requirements from Third parties and Senders, and implement the nomination process under the terms set out in this Manual and the applicable regulations. 4.2.12 Provide the Senders the information on volumes at the Point of Entrance, volume withdrawn at the Point of Exit and the inventory of Crude in the Pipeline. 4.2.13 Establish control and inspection mechanisms to maintain the integrity of the Pipeline, and based on this, schedule maintenance and required repairs. 4.2.14 Calibrate the measurement and quality control instruments of Crude Oil, according to the procedures and timing required by the producers, the technical regulations and provisions established for this purpose in this Manual, inviting the Senders or their representatives to provide support if considered necessary. 4.2.15 Charge the corresponding rates for Transportation services. + + + + 12 + + + + + + Operation and Transport Regulations Version 1 4.2.16 collect and Pay the Transportation tax pursuant to article 26 of Law 141 of 1994 or any other regulations as amended or superseded. 4.2.17 Publish the Transportation rates in the BTO. 4.2.18 Comply with all regulations set out for the protection and preservation of the environment foreseeing all procedures for closing and abandonment of the Pipeline. 4.2.19 Submit to the Office of Hydrocarbons of the Ministry of Mines and Energy before March 1 of each year, the special annual report referred to in article 204 of the Petroleum Code or any other regulations as amended or superseded. 4.2.20 Use the available Capacity if there is any, for the Transportation of Third Party's Crude, upon request, and with the previous subscription of the respective Transportation contract. 4.2.21 Maintain rules and procedures to attend expansion requests, when the available Capacity is not sufficient to cope with the Transportation requests of Crude from Third parties 4.2.22 allow preferred Transportation of Crude Oil to refineries in order to satisfy the country's needs and avoid a national shortage pursuant to article 58 of the petroleum code. 4.2.23 Permit that, in the event there is available Capacity, the Sender or Third Party conduct additional investments as required, to provide access and Capacity to use that means of Transportation pursuant to the regulations on access and investments indicated in this Manual and other applicable regulations. 4.2.24 Submit to the Office of Hydrocarbons of the Ministry of Mines and Energy the information on cost, rates on volumes and all other information as required. 4.2.25 All those derived from the Transportation contract of this Manual and other applicable regulations. CLAUSE 5 FEES 5.1 The Pipeline fee shall correspond to the rate established according to the methodology to set out rates pursuant to resolution 124386 of 2010 from the Ministry of Mines and Energy as amended or superseded. 5.2 Without prejudice of the foregoing, the Transporter may agree with the Senders the monetary conditions for the Pipeline fee considering the commercial and technical items listed hereunder, including but without being limited to: 5.2.1 Commercial Conditions + + + + 13 + + + + + + Operation and Transport Regulations Version 1 5.2.2 Contracted Capacity 5.2.3 Contracted Term 5.2.4 Contracted Type 5.2.5 Payment Terms 5.2.6 Crude Oil Quality 5.2.7 About Utilization 5.3 The corresponding Party shall assume any taxes as indicated by law. The Transportation Tax is the responsibility of the Sender and is not included in the fee. CLAUSE 6 SPECIAL SERVICES 6.1 Increases in the Transportation Capacity. 6.1.1 In the event in which the Pipeline falls short in the effective Capacity of Transportation for the Shipment of Hydrocarbons of any of the Senders and if there is the technical possibility to increase it through the use of any friction reduction agents or other Operational adjustments, the Transporter may technically assess and approve this option, in which case the Sender may use this alternative under the agreements and commercial conditions established by the parties. The Sender understands and accepts that any costs resulting from the implementation of this alternative are additional to the rate agreed, shall be borne by the Sender and shall not be considered as an additional rate for the Transportation service. 6.2 Transportation of Segregated Hydrocarbon 6.2.1In the event in which any Sender requires to transport Hydrocarbons in a segregated manner, the Transporter may agree with this option if it is technically and commercially viable, in which case the Sender may use that alternative under the agreements and technical and commercial conditions established with the Transporter. The Sender understands and accepts that any costs and damage resulting from the implementation of this alternative are additional to the rate agreed, shall be assumed by the Sender and under no circumstance constitute an additional rate for the Transportation service. CLAUSE 7 ADJUSTMENT OF THE EFFECTIVE CAPACITY OF THE SYSTEM DUE TO VARIATIONS IN THE SPECIFICATIONS OF HYDROCARBONS 7.1 The effective Transportation Capacity may vary as a function of the Hydrocarbon specifications pumped in the Pipeline. The specifications of the Hydrocarbon delivered by the Senders may vary from this standard, obtaining as a result a variation in the effective Transportation Capacity in the Pipeline. + + + + 14 + + + + + + Operation and Transport Regulations Version 1 7.2 In case there is an increase in the effective Transportation Capacity by using a Hydrocarbon of different specifications to those agreed in the Transportation contract, this Capacity in excess shall be assigned according to the order of priorities established in this Manual. 7.3 If a Sender with a Ship or Pay contract nominates a Hydrocarbon of lower specifications to those agreed in the Transportation contract and this generates a decrease in the Transportation effective Capacity, the Transporter may accept the delivery of the Hydrocarbon, in which case the Sender understands and accepts that it will transport a lower equivalent quantity dude to the change in the specification and the economic conditions of the Ship or Pay contract shall not be modified. 7.4 The Transporter shall be in charge of defining the increases or decreases of Capacity generated by a variation in the specifications of the Hydrocarbon. This process shall be conducted once a month as part of the nomination process. CLAUSE 8 PROJECTIONS, NOMINATION AND TRANSPORTATION SCHEDULE OF THE PIPELINE 8.1 Projections. 8.1.1 In the month of October of each year, the Transporter shall prepare the Transportation plan for the following five (5) fiscal years, expressed in barrels per calendar day (bpdc in Spanish). For the first year volumes per month shall be provided and for subsequent years there will be volumes per year. As a result of the preparation of this Transportation plan, the estimation of the available Capacity the Transportation of Third Party's Crude shall be available in compliance with the provisions in article 47 of the petroleum code as amended or superseded. These information and Transportation Capacity shall be available for consultation in the BTO. 8.1.2 The procedure to be followed shall be as follows: 8.1.2.1 The first day of each September or before, all Senders shall submit to the Transporter the information on the projections of the volumes to be nominated for the five subsequent fiscal years and for the following fiscal year this information shall be specified monthly. Such information shall include the following: 8.1.2.1.1 The best estimate of the Sender, the volume to be transported in bpdc, assuming uniform flow rates expressed separately for each Hydrocarbon to be delivered; 8.1.2.1.2 The quality characteristics of each Hydrocarbon; + + + + 15 + + + + + + Operation and Transport Regulations Version 1 8.1.2.1.3 The Points of Entrance, expressed separately for each Hydrocarbon, with the delivery program for each of them; and 8.1.2.1.4 The Points of Exit, expressed separately for each Hydrocarbon, with the withdrawal program for each of them. 8.1.2.2 Within the first 15 days of the Third calendar month of each quarter, the Sender shall deliver to the Transporter the update of the volume projections to be nominated in average per day for the remaining calendar months of the current fiscal year and the average per day for the following two fiscal years. 8.2 Nomination Scheme and Transportation Schedules 8.2.1 Nominations are accepted and scheduled independently from the incoming restrictions to other systems, upon which there is no responsibility from the Transporter to make these schedules or to contract Transportation quotas in other Transportation systems. 8.2.2 The following process is established in order to comply with and enforce Transportation schedules: 8.3 Nomination of the ANH, Owners and Senders with Ship or Pay Contract. 8.3.1 At the latest on the Third calendar day of the month of nomination, the ANH or whoever is designated shall carry out the nomination of the royalties of Crude Oil coming from the fields served by the Pipeline. In this same term, the owners shall nominate the Crude Oils possessed and all other Senders with Ship or Pay contract shall carry out the nomination of their Transportation requirements for the following month of Operation. Additionally, the Senders previously mentioned shall deliver their tentative Transportation needs for the following five calendar months. The Sender shall specify: name of the Hydrocarbon, the requested volume to be transported, quality, regime of deliveries during the month of Operation, Point of Entrance and Point of Exit, as well as any other specific information as required or requested by the Transporter. 8.3.2 If the nomination of royalties is higher than the preferred right, the nomination shall be adjusted to that value. Royalty Crude Oils are considered those directly nominated by the ANH in its Capacity as Sender or whoever is designated, except when these are sold to another Sender or to a Third Party. If the owners buy Crude from royalties, the Transporter shall account for them within the preferred right without affecting the Capacity of the owner. 8.4 Acceptance and rejection of Nominations and disclosure of Available Capacity. + + + + 16 + + + + + + Operation and Transport Regulations Version 1 8.4.1At the latest on the seventh calendar day of the month of nomination, the Transporter shall communicate to the ANH, the owners and all other Senders with Ship or Pay Contracts its acceptance or rejection of the nominations and the final volume accepted, taking into account the priorities, the overutilization and the generation of additional Capacity due to change in specifications of the Hydrocarbon. Senders with Ship or Pay contract shall be assigned volumes to be transported up to the volume of their Contracted Capacity. Based on the accepted nominations, the Transporter shall calculate the available Capacity, which shall be published in the BTO as previous requirement to any additiona nominations of Senders and of Third parties having any interest and contracting the Transportation service. 8.5 Additional Nominations of Senders and nominations from Third Parties 8.5.1At the latest on the ninth calendar day of the month of nomination, any Third Party may carry out the nominations of their Transportation requirements under the modality of Spot Contracts for the month of Operation. All Senders may nominate additional volumes at this stage. Additionally, all Third parties and Senders with additional nominations to their Contracted Capacity shall deliver the tentative Transportation needs for the following five (5) calendar months. Third parties and Senders shall specify: name of the Hydrocarbon, request for the volume to be transported, delivery schedules during the month of Operation, Point of Entrance and Point of Exit, as well as any other information as required by the Transporter. 8.5.2 if nominations exceed the available Capacity of the Pipeline, the assignment of the volumes to be transported shall be at a prorate of the requests received and up to the available Capacity. 8.6 Closing the Nomination Process 8.6.1At the latest on the twelfth calendar day of the month of nomination the Transporter shall conduct the closing of the nomination process and shall publish the nominations approved for all Senders and Third parties as well as the Programmed Capacity of the Pipeline. Likewise, it will carry out the publication of any available Capacity if such is the case. 8.7 Final Scheduled of Transportation 8.7.1 The Transporter shall prepare the final scheduled Transportation for the month of Operation and an estimate for the following five (5) calendar months and shall submit it to the Senders and Third parties with assigned Capacity at the latest on the twelfth calendar day of each month of nomination. 8.7.2 This schedule may be modified by the Transporter, among other reasons: 8.7.2.1 Due to justified events that affect the Transportation Capacity + + + + 17 + + + + + + Operation and Transport Regulations Version 1 8.7.2.2 By request of the Transporter, accepted by the Senders or by request of a Sender accepted by the other Senders and the Transporter. 8.7.2.3 Derived from any other circumstances beyond the control of the Transporter. 8.7.3 Priority criteria for assignment of capacities en case of the aforementioned modifications shall be those established in clause 10 of this Manual. 8.7.4 The Sender shall notify the Transporter as soon as possible, if it is found that: (i) its deliveries during a month of Operation at a Point of Entrance will be less than 95% of the Scheduled Capacity or (ii) its withdrawals at any Point of Exit shall be less than 95% of the Scheduled Capacity. With the reception of the information, the Transporter shall analyze the impact of the acquired commitments for Transportation and will make decisions at its Sole discretion to mitigate the impact. 8.8 Extemporary Nominations 8.8.1 If any Third Party or the Sender fails to meet the terms set out to nominate in accordance with the procedures contained herein, the Transporter shall not be obliged to accept such nominations. The Transporter shall only accept extemporary nominations as long as the Pipeline has available Capacity. If the nomination is accepted, the Third Party or Sender shall Pay to the Transporter as a penalty, two (2%) of the applicable rate to the volumes in barrels delivered in the Pipeline in the respective month. 8.9 Final Report of Operation 8.9.1 At the end of each month of Operation, the Transporter shall prepare a report which shall be delivered to the Senders at the latest on the tenth (10) working day of the following calendar month of the month of Operation indicating the volumes in Gross Standard Barrels and Net Standard Barrels delivered and withdrawn and the average qualities at each Point of Entrance and Point of Exit. CLAUSE 9 BALANCE IN EXCESS OR DEFECT 9.1 The following procedure for the balance of each Sender is established as follows: 9.1.1 Each Sender shall schedule its withdrawals according to its delivery schedules. 9.1.2 In case that a Sender fails to fulfill or is not meeting its delivery schedule during the month of Operation, the Transporter may adjust the withdrawal schedule of the Sender in question, to comply at all times with numeral 9.1.1 of this clause. In any case, if the Sender fails to meet its delivery or withdrawal schedule, the Sender shall Pay the Transporter the full amount of costs associated to such breaching, including but without being limited to those referred to storage or disposal of the Hydrocarbon, which shall be reported through a provisional notice. + + + + 18 + + + + + + Operation and Transport Regulations Version 1 9.1.3 In case of withdrawals in excess and in defect it is establish that if a Sender withdraws in excess or fails to withdraw its Hydrocarbon at the Points of Exit, pursuant to the current schedule, the Transporter may at its Sole judgment start the following procedure: 9.1.3.1 The Transporter shall offer the withdrawal in defect or a portion of it to other Senders in proportion to the assignment of Capacity in the nomination process in the month of Operation. Each Sender to whom this volume has been offered shall be respond to this offer in the following forty eight (48) hours. 9.1.3.2 As a result of the responses received, according to the offer of numeral 9.1.3.1, the Transporter may make new offerings or assign the withdrawal in defect. 9.1.3.3 Based on the implementation of the procedure, the Senders who will withdraw the volumes in defect shall be determined. 9.1.3.4 The balance of the withdrawals in excess shall be reflected in the volumetric compensation by quality. 9.1.3.5 In no case the Transporter shall be responsible for the Hydrocarbon that a Sender has not withdrawn and as a result of that, the Pipeline had to be evacuated. The Sender that has not withdrawn shall have the exclusive responsibility for all damages and costs caused in the procedures for evacuation that the Transporter has to implement, which shall be informed through provisional notices. 9.1.4 The Transporter shall prepare a monthly balance showing for each Sender, the situation of deliveries and withdrawals in excess or withdrawals in defect. This balance shall be the result of the process of volumetric compensation for quality (CVC) CLAUSE 10 PRIORITIES IN THE NOMINATION PROCESS 10.1 For purposes of the nomination process the priorities indicated in this clause shall be followed. In the event in which the sum of the volumes requested by the Senders exceeds the effective Transportation Capacity, o when due to the events mentioned in numeral 8.7.2 the effective Transportation Capacity is reduced below the sum of the volumes assigned to the Senders, the Transporter shall calculate the volumes assigned in the Transportation schedule to each Sender according to the following priorities: + + + + 19 + + + + + + Operation and Transport Regulations Version 1 10.1.1 First: Crude of royalties of the State coming from the fields served by the Pipeline. This priority makes reference to a preferred right that Crude Oils from royalties shall have in the nomination process for the preparation of the Transportation schedules. For purposes of this first priority, Crude Oil sold by the State to a Third Party or Sender non-owner, shall not be considered as Crude of royalties of the State. 10.1.2 Second: Nominations of the owners, its parent and subsidiaries. 10.1.3 Third: Nominations of Senders non-owners with Ship or Pay Transportation Contracts. 10.1.4 Fourth: Nominations of Third Parties. 10.2 For Transportation Contracts different than Ship or Pay Contracts in force prior to the enforcement of this Manual, a transitory priority between Third and fourth priority shall be applied. 10.3 Within the Third and fourth priority, the assignment of volumes or the reduction of volumes assigned shall be made at prorate of the capacities of each Sender and the nomination of each Third Party respectively. CLAUSE 11 REJECTION OF A TRANSPORTATION REQUEST 11.1 The Transporter reserves the right to reject any Transportation request in addition to the reasons mentioned during the nomination process and the Transportation schedule, those coming from a Sender who has breached a Transportation contract, this Manual or any applicable regulations, including but without being limited to: 11.1.1 Delivery of Hydrocarbons without the minimum quality specifications indicated in this Manual. 11.1.2 Failing to deliver sufficient Hydrocarbons to fill in the line in the proportion that corresponds, 11.1.3 Late Payment or no Payment of the rate, 11.1.4 Failing to comply with the Transportation schedule either in deliveries and/or withdrawals. 11.2 The rejection of a request due to any justified event by the Transporter shall not be considered as a breaching of the obligations of the same and this shall be made without prejudice of other actions the Transporter or the owner may have to make effective the any damages that a Sender or a Third Party may have caused. + + + + 20 + + + + + + Operation and Transport Regulations Version 1 CLAUSE 12 QUALITY REQUIREMENTS 12.1 The minimum values of quality that the Crude delivered by the Senders must have to be accepted for Transportation in the Pipeline are: + + For specific systems the Transporter defines minimum parameters for quality which are listed in Annex 4 Minimum Quality Specifications by System. 12.2 Quality Certification. 12.2.1 The Sender shall always provide the Transporter a certificate evidencing the characteristics and quality specifications of the Hydrocarbon, which shall be delivered to the Transporter. The certificate referred to in this numeral shall be issued by a company specialized in this matter and independent from the Sender. If the Sender fails to provide the corresponding certificate, the Transporter shall not have the obligation to accept or transport the Hydrocarbon through the Pipeline. 12.2.2 The minimum characteristics of the Hydrocarbon which must be included in the certificate are: Viscosity cST and SSU at 86°F, 100°F and 140°F, gravity API at 60°F, sulfur content, salt content, BSW, Acidity and Point of fluidity. 12.3 Extra costs 12.3.1 The Transporter and the Sender may agree on the delivery of Hydrocarbons with lower characteristics than the minimum required, in which case the Sender shall pay all costs and expenses to improve the Hydrocarbon and to bring it to acceptable Transportation specifications for the Transporter. 12.3.2 The agreement to make this scheme Operational shall be recorded in writing. + + + +TEST PARAMETER VALUE OF THE PARAMETER TEST STANDARD Sediment and water or particles Not to exceed 0.5% in volume Sediments -ASTM D473 Water - Karl Fisher API at 60 °F Higher than 18 degrees API but less than 50 degrees API D 1298 V i s c o s i t y @ t e m p e r a t u r e o f reference Not to exceed 300 cSt at 30 °C ASTM D445 or D446 + +Vapor pressure Not to exceed 11 lb/square inch Reid Vapour Pressure ASTM D323 + +Temperature of reception Not to exceed 120 °F Salt content 20 PTB ASTM D 3230 Point of fluidity Not higher than 12 °C ASTM D 93 + + 21 + + + + + + Operation and Transport Regulations Version 1 CLAUSE 13 DETERMINATION OF QUANTITIES AND QUALITY 13.1 Measuring equipment and applicable regulations. 13.1.1 Quantity and quality measurements and Hydrocarbon samples delivered or withdrawn shall be conducted by the Transporter or whoever is designated through the measurement systems installed at the node of Entrance and node of Exit; each measuring system installed may include among other things: 13.1.1.1 Calibration unit (Prover) installed and calibrated according to the method "water-draw" (for water distillation) as specified in the Manual API MPMS-4 "Petroleum Measurement Standards", Chapter 4 "Proving Systems" in the most recent edition. 13.1.1.2 Turbine meters of positive displacement or Coriolis type installed in accordance with Manual API MPM-6 MPMS-4 "Petroleum Measurement Standards", Chapter 6 "Metering Assemblies Standards" in its last edition. The meters factors shall be derived by calibration using the same standards, taking into account correction by temperature and pressure. 13.1.1.3 A device for continuous sampling as specified in Manual API MPMS "Petroleum Measurement Standards", Chapter 8 "Sampling" in its last edition. The methods to be used to determine the characteristics of the samples are the following: - Water (by distillation) ASTM D 4006 - Water by Karl Fisher ASTM D 4377 - Salt content ASTM D 3230 - Sediments (by extraction) ASTM D 473 - Density API 1298 - Sulfur ASTM D 4294 13.1.1.4 A BS&W measuring equipment may also be available by the centrifuge method, following in that case, the proving method ASTM D 4007. The density of samples shall be determined in the event of damage of the density meter or to validate or calibrate the density meter measurements. 13.1.1.5 A density meter for permanent measurement of density. 13.1.1.6 An electronic system for the measurement of flow adjusted to API MPMS, Chapter 21.2 requirements in the last edition. 13.1.1.7 The volumetric correction factor to be applied shall be the one appearing in the last edition of tables 23 and 24 of the ASTM 1250 method. + + + + 22 + + + + + + Operation and Transport Regulations Version 1 13.1.1.8 The calculation of the dynamic and static measurements shall be made in accordance with the current API, Chapter 12 or 4 regulations as it may correspond. 13.1.2 The Transporter shall return to the Sender, measured in those nodes of Exit specified by the Sender, a volume of Crude equivalent to the volume delivered by the Sender and measured at the nodes of Entrance with the following adjustments: 13.1.2.1 Deductions for Identifiable Losses and Non-identifiable losses. The Identifiable Losses and Non-identifiable losses shall be distributed among the Senders according to the provisions in the Procedure for Adjustments for Volumetric Compensation for Quality. 13.1.2.2 Increases or reductions necessary to be made as a result of making adjustments for Volumetric Compensation. 13.2 Accounting for losses 13.2.1 The volume of all Crude Oil losses produced in the system shall be calculated by the Transporter using its best Operational and engineering judgment. 13.3 Process to determine quantities and qualities at the Points of Entrance and Points of Exit. 13.3.1 Quantity measurements and quality sampling of deliveries and withdrawals (including calibration of instruments) shall be the Transporter's responsibility and shall be made according to the standards and accepted prevailing practices by the API and the ASTM. The installed equipment to conduct measurements and sampling shall be determined by the Transporter. 13.3.2 The Transporter shall ensure to set out adequate measuring and calibration procedures at the nodes of Entrance and nodes of Exit. Calibration of the measuring systems shall be made as required by operating circumstances under the Transporter's criteria. The calibration factor of the meters shall be effective only after the date of the latest calibration except in case of manifest error in which case the last factor of valid calibration shall be applied. 13.3.3 The Transporter has the responsibility to take two samples of representative Crude Oil according to the API standards and with the adequate volume for each delivery and withdrawal made. The frequency of such sampling shall be determined occasionally by the Transporter based on the continuity of the Crude's quality among other factors. Samples shall be used for the following purposes: + + + + 23 + + + + + + Operation and Transport Regulations Version 1 13.3.3.1 To determine the quality. 13.3.3.2 The Transporter shall retain a sample for each delivery and withdrawal, which shall be used as a counter-sample. The Transporter shall preserve said sample for a period no longer than 15 calendar days in case there are any claims regarding a specific delivery or withdrawal. After this lapse of time it will not be possible to make any claims in this sense. 13.3.4 Crude volumes that the Transporter shall be committed to transport shall be determined using the measurement systems of the Pipeline following the API and ASTM standards. The Transporter shall ensure the filling in of all official forms for each kind of measurement, which shall contain as a minimum the following information: the date, the readings of the meters or the measures of the storage tank or tanks before starting and upon completion of the deliveries or withdrawals, the API gravity, densities, temperatures, pressures, sediment and water percentages and any other necessary characteristic for its identification. The forms above mentioned constitute documents, which shall be used to make calculations for the Transportation value and the adjustment for volumetric compensation and shall serve as proving documents for any other purpose. 13.3.5 At any time before starting any delivery or withdrawal and in intervals with a frequency not higher than two (2) times per month, the Sender may inspect, through an independent inspector, with previous approval from the Transporter, the accuracy of the results of the measurements and the samples taken to determine the quantity and quality of the Hydrocarbon. The Sender shall bear the cost of said inspection. For this purpose the respective Sender shall notify the Transporter the name and title of the independent inspector at least five business days before the measurement of the corresponding Crude. 13.3.6 The calibration of the measurement equipment shall be made as required by the Operational circumstances or by written request received from a Sender in particular under the Transporter's judgment. The meters factors shall be updated every time this procedure is conducted. Prior to the calibration of the meters, the Transporter shall notify the Senders the dates in which said calibration shall be carried out so that they if deemed necessary, may be present in the calibration. The meters calibration factor shall be effective only after the date of the last calibration and the parties participating in the calibration shall issue a certificate; otherwise this shall be documented in a letter from the Transporter to the Senders. 13.3.7 Pursuant to API recommendations, testers shall be re-calibrated at least once every five years (from the date of the last calibration) o immediately after any alteration in the measuring section. + + + + 24 + + + + + + Operation and Transport Regulations Version 1 13.3.8 The Hydrocarbon volumes that the Transporter accepts and schedules for its Transportation shall be determined by meters installed in the nodes of Entrance and/or Exit. Notwithstanding the foregoing, the Transporter may use alternate methods included in the API standards. If the static measurement of tanks is used, these must have their measurement approved by the Ministry of Mines and Energy or the competent entity. The tank measurement shall be determined following the current existing standards for such purpose. CLAUSE 14 VOLUMETRIC COMPENSATION FOR QUALITY 14.1 The Regulations of Volumetric Compensation for Quality is an integral part of this Manual as annex 1 (MECHANISMS OF COMPENSATION OF QUALITY FOR THE MIX OF CRUDE OILS). 14.2 Each of the Senders shall deliver to the Transporter at a Point of Entrance a Hydrocarbon volume which, and only for purposes of Volumetric Compensation for Quality (CVC), shall be valued according to the procedure defined for the Pipeline and in accordance with its particular quality. This quality shall be determined by an independent quantity and quality inspector accepted and recognized both by the Transporter and the Sender. 14.3 Considering that as a result of the Transportation the Hydrocarbons delivered in the Pipeline are mixed without distinction, each Sender shall withdraw at the Point of Exit a volume of Hydrocarbons with a different quality than its Hydrocarbon delivered, except when it has been requested and has been accepted the Transportation of Hydrocarbons in a segregated manner. The quality of this segregated Hydrocarbon shall also be determined by an independent quantity and quality inspector accepted and recognized both by the Transporter and the Senders. This Hydrocarbon shall be assessed only for purposes of Volumetric Compensation for Quality and shall take into account the compensation for quality due to the interfaces occurring when transported with other Crude Oils. 14.4 The Transporter shall apply the mechanism of Volumetric Compensation for Quality defined by the same for the Pipeline which shall have the following main characteristics: 14.4.1 The Senders who have delivered to the Transporter Hydrocarbons with a better quality than the mixed Hydrocarbon withdrawn at the Point of Exit of the Pipeline shall be entitled to compensation in volume, equivalent to the volumes that Senders who have delivered Hydrocarbons of lower quality than the ones withdrawn at the Point of Exit will have to assume. For such purpose, individual qualities of all volumes delivered and withdrawn shall be taken into account as well as the final inventories of the preceding month of Operation and the last month of Operation, with its respective qualities. + + + + 25 + + + + + + Operation and Transport Regulations Version 1 14.4.2 The Volumetric Compensation for Quality shall be internal between the Senders in such a way that the final volumetric balances equal cero and the Transporter shall neither charge nor Pay any volume for this purpose and shall only serve as a mediator, regulator, liquidator and responsible for the volumetric distribution of the compensations. 14.4.3 The Volumetric Compensation for Quality is not part of the Rate and therefore shall not be compensated or will have any variation as a result of this. 14.5 In each month of Operation the Transporter shall make a balance of the existing volumes and qualities at the beginning of the month delivered to the Pipeline, lost, withdrawn and existing at the end of the month, both for the total of Hydrocarbons as well as for individual Hydrocarbons of each Sender. 14.6 The Sender shall hold the Transporter and owner harmless against any cost, action, claim, intended procedures by any Third parties, losses and all damage and obligations incurred and inherent to the mix of Hydrocarbons in the Transportation process and the Volumetric Compensation for Quality. 14.7 In any case the Transporter may modify the mechanism of Volumetric Compensation for Quality contained herein, in the respective annexes and all other documents in connection with the CVC. 14.8 Senders of a specific Hydrocarbon may agree with the Transporter not to apply the Volumetric Compensation for Quality to said Hydrocarbon. The foregoing shall be applicable as long as the Hydrocarbon of other Senders is not affected negatively. 14.9 By agreement between the totality of Senders and the Transporter, it may be decided not to implement the Volumetric Compensation for Quality (CVC) for Crude Oils transported through the system. In this case the Transporter may implement any other mechanism validated with the Senders to carry out the volumetric balances. CLAUSE 15 BULLETIN OF TRANSORTATION BY THE PIPELINE - BTO 15.1 The Transporter shall implement the Bulletin of Transportation by the Pipeline - BTO - which shall contain as a minimum the following information: 15.2 Information of public access: 15.2.1 General description of the Pipeline 15.2.2 Current rates for each Distance 15.2.3 Value tables or current calculation formulas of Monetary Conditions 15.2.4 Design Capacity of the Pipeline and Nominal Capacity + + + + 26 + + + + + + Operation and Transport Regulations Version 1 15.2.5 Monthly available Capacity of the Pipeline estimated for the next (6) months and annual for the next five (5) years. 15.2.6 Excerpts of this Manual corresponding to connection requests, nomination process and minimum quality requirements of Crude Oil 15.3 Information of exclusive access for Senders and Third parties: 15.3.1 This valid Manual. 15.3.2 Discussion on modifications to the Manual 15.3.3 General information on the programmed maintenance schedule of the Pipeline and other programed activities affecting the effective Capacity during the next six (6) months. 15.3.4 Listing of expansion projects and changes in the Pipeline's infrastructure 15.3.5 Effective Capacity confirmed for each month of Operation and estimated for the following five (5) months and the corresponding available Capacity for each Distance. 15.3.6 Transportation program for the month of Operation and tentative for the following (5) months for each Distance 15.3.7 Description of the mechanism established by the Transporter and foreseen in the nomination process to assign the available Capacity equitably 15.3.8 Last volumetric balance prepared for the Pipeline. 15.3.9 Daily statistics for the last month of Operation and monthly statistics since the enforcement of Resolution 181258 of 2010 from the Ministry of Mines and Energy on the information on Effective Capacity and Volumetric Balances. 15.3.10 The annual rates and the Monetary Conditions for each Distance from the date of enforcement of Resolution 181258 of 2010 from the Ministry of Mines and Energy. 15.4 The Transporter is no obliged to publish any information of reserved character. 15.5 The Transporter shall provide to Senders and any Third parties interested in transporting Hydrocarbons through the Pipeline as requested, within the following ten (10) calendar days after the request and with previous verification from the Transporter of their Capacity as Sender or Third Party an access password to the information of exclusive character referred to in numeral 15.3 of this clause. The access with a password shall be active while the requestor maintains its Capacity as Sender or Third Party. + + + + 27 + + + + + + Operation and Transport Regulations Version 1 15.6 The Transporter shall communicate any updates, amendments or additions of relevant information in the BTO by means of electronic mail or direct communication to the Office of Hydrocarbons of the Ministry of Mines and Energy and to all those with active access to the information of exclusive character pursuant to the previous numeral. CLAUSE 16 SPECIAL TRANSPORTATION CONDITIONS 16.1 The Transportation of Hydrocarbons shall be subject to the following conditions: 16.1.1 The Hydrocarbon shall be delivered by the Sender at a Point of Entrance and withdrawn at a Point of Exit. 16.1.2 The Transportation of Hydrocarbon shall be subject to performance of the conditions foreseen in the Transportation Contract, the Manual hereof, its modifications, additions or updates, including its annexes and the applicable regulations. 16.1.3 The Transporter reserves the right to receive or reject a Hydrocarbon that fails to meet the minimum specified values; in case of reception, the Sender shall Pay the Transporter any costs incurred in the analysis and eventual treatment of this Hydrocarbon to place it within the required specifications or to implement the scheme required for its Transportation. 16.1.4 The Transporter reserves the right to require, reject or approve the injection at any other Point in the Pipeline of products such as corrosion inhibitors, depressors of Point of fluidity, friction reducers or any other additive in the Hydrocarbon to be transported. The Sender shall Pay the Transporter all costs incurred in the analysis and eventual treatment of this Hydrocarbon to place it within the required specifications or to implement the scheme required for its Transportation. 16.1.5 The Transporter reserves the right to transport Hydrocarbons delivered by Senders that exceed the limits determined by Transporter for organic chloride, sand, dust, dirtiness, glues, impurities, other objectionable substances or any other compounds with physical or chemical characteristics that, under the exclusive determination of the Transporter may cause that the Hydrocarbon would not be easily transported, may damage the Pipeline or may interfere with the Transportation and the withdrawals. The Sender shall Pay the Transporter all costs incurred in the analysis and eventual treatment of this Hydrocarbon to place it within the required specifications or to implement the scheme required for its Transportation. 16.1.6 The Transporter shall be entitled, with a previous provisional notice, to remove and sell the Crude of any Sender that fails to comply with any of the specifications at its Sole discretion. If the Transporter exercises its right of sale pursuant to this clause, the Transporter shall deduct from the proceeds of such sale all costs incurred by the Transporter with respect to the storage, removal and sale of such Crude Oil. The Transporter shall pay the balance to the Sender. + + + + 28 + + + + + + Operation and Transport Regulations Version 1 16.1.7 The Transporter shall not accept Crude Oil delivered by any Sender if this may cause impairment to the Pipeline of the Crudes or mixtures transported (without consideration of whether or not the Crude Oil meets the minimum quality specifications). 16.1.8 The Transporter acting reasonably and in good faith, shall be entitled to make any changes to the minimum quality specifications of Crude Oil in accordance with operating practices, which may be necessary or pertinent, including but without being limited to, prevent material damage or the material degradation of the effective Capacity of the Pipeline in order to prevent any personal injuries or damage to the property or the environment. CLAUSE 17 REGULATIONS FOR THE TRANSPORTATION OF SEGREGATED HYDROCARBON 17.1 With a previous request from the Sender or Third Party, the Transporter may accept the Transportation of segregated Hydrocarbon to the extent that this is a technical and economically viable alternative. The Transportation of segregated Hydrocarbon cannot change the scheme set out in clause 10 and shall be conducted pursuant to the provisions in this Manual. 17.2 As a consequence of the foregoing, the Transporter shall inform the Sender its disposition to start the Transportation of segregated Hydrocarbon. The Transportation of segregated Hydrocarbon shall be subject to the nomination process set forth in this Manual. 17.3 Any additional charges for Transportation of segregated Hydrocarbon shall be borne by the Sender or Third Party requesting the service, and it will be taken into account, including but without being limited, any costs and damage caused to the Transporter, owner or other Senders. CLAUSE 18 RISKS AND RESPONSIBILITY 18.1 The Transporter shall exercise custody on the Hydrocarbon from the time the Sender or whoever the Sender designates, delivers it at the Point of Entrance and until the Point of Exit. 18.2 Neither the Transporter nor the owner shall be responsible for the consequences of failing to comply with the deliveries and withdrawals generated by the Sender in the Transportation program, commitments of operators and/or Transporters of Transportation systems connected to the Pipeline. + + + + 29 + + + + + + Operation and Transport Regulations Version 1 18.3 The Transporter shall not be responsible for any damage or deterioration that a Hydrocarbon delivered by a Sender may suffer, such as contamination with strange materials, contamination by contact of different types of Hydrocarbons if the damage or deterioration is due to Justified Events. In the event any of the cases previously mentioned occurs, and one or more Senders are involved, all the Hydrocarbons affected shall be prorated between the Senders in proportion to the ownership of each of the Hydrocarbons involved, without prejudice of any indemnities afterwards which may be applicable between the Senders affected. The Transporter shall prepare the information corresponding to the volume of Hydrocarbon affected and the proportion corresponding to each Sender. 18.4 The Transporter shall be responsible for the Transportation service, for any losses, damage or deterioration that the Hydrocarbon may suffer. The Transporter shall be released from any responsibility in the Justified Events and the Transporter is not incurring in any gross negligence. 18.5 Any damage or prejudice caused to the Transporter by virtue of failing to comply with the regulations contained in this Manual by any Sender shall be the responsibility of the Sender who shall indemnify the Transporter for such damage or prejudice. 18.6 Hydrocarbons delivered by each Sender and transported through the Pipeline may vary in their quality as a result of the mix with other Hydrocarbons. Except for events in which segregated Hydrocarbons are transported, the Transporter shall not have any obligation to return at the Point of Exit a Hydrocarbon of the same quality as the Hydrocarbon delivered for its Transportation at the Point of Entrance. The adjustments of Volumetric Compensation for Quality shall be applied to the transported mixed Hydrocarbons. 18.7 In the Transportation of Hydrocarbon mix and Hydrocarbon segregated through the Pipeline, contamination fronts are generated. All Senders of the Pipeline shall accept as withdrawn volume, a portion of the contamination fronts generated in the Transportation through the Pipeline. If the Sender requires some special conditions for the Transportation of a Hydrocarbon, these shall be agreed with the Transporter who reserves the right to accept them and require the Sender to bear all costs associated to such conditions. 18.8 The following shall be considered in the Transportation of Hydrocarbon mix and Hydrocarbon segregated through the Pipeline: 18.8.1 The Hydrocarbon of higher quality with respect to the Hydrocarbon of lower quality shall always be degraded in the contamination fronts. + + + + 30 + + + + + + Operation and Transport Regulations Version 1 18.8.2 The Transporter shall estimate a maximum volume corresponding to the contamination fronts and shall be responsible to comply with this value. 18.9 The Transporter is obliged to return the Sender and the latter to withdraw at a Point of Exit, the volume of equivalent Hydrocarbon upon application of the mechanism of Volumetric Compensation for Quality. 18.10 The Senders and Third parties shall indemnify and hold the Transporter and the owner harmless against any costs, claims, litigations, judicial or extra-judicial action, and decisions of any kind, which may be brought against the Transporter or owner, and in general by any procedure intended by any Third parties. CLAUSE 19 FILLING THE PIPELINE OR FILLING THE LINE 19.1 It is the necessary volume to fill the Pipeline between the initial pumping station and the final station, the non-pumping bottom of the storage tanks of the Pipeline, and all installations, tubes, equipment, pumping and measuring accessories. 19.2 For the Pipeline Operation, the Transporter may request to each Sender, including the ANH, to deliver to the Transporter the necessary quantity of Hydrocarbon to fill in the line of the Pipeline. The participation of each Sender in filling in the line shall be determined by the Transporter based on criteria such as: Ownership of the Pipeline and Contracted Capacity. 19.3 The Transporter shall determine at its judgment the Day in which each Sender shall deliver its proportional participation in filling the line of the Pipeline, and shall communicate the corresponding volume indicating the date of delivery. 19.4 The Hydrocarbon delivered by the Senders to fill in the line of the Pipeline shall not be withdrawn from the Pipeline without the previous authorization from the Transporter. Without prejudice of the foregoing, the Sender shall not lose the ownership of the Hydrocarbon remaining in the Pipeline. 19.5 When segregated Hydrocarbon is transported, it shall be understood that the ownership of the filling of the line of the Pipeline varies according to the volumes of segregated Hydrocarbon present in the Pipeline at a given time. Without prejudice of the foregoing, the Sender shall not lose the ownership of the segregated Hydrocarbon remaining in the Pipeline. CLAUSE 20 HANDLING LOSSES IN THE PIPELINE 20.1 The identification and handling of losses in the Pipeline shall be carried out as follows: + + + + 31 + + + + + + Operation and Transport Regulations Version 1 20.1.1 All identifiable losses of mix or segregated Hydrocarbon not attributable to the Transporter as per numeral 18.4 shall be assumed by the Senders of the mix or segregated Hydrocarbon according to the calculation made by the Transporter based on the Operational parameters and formalized in the CVC. In this sense, the Senders accept the liquidation made by the Transporter. 20.1.2 The report prepared by the Transporter shall be considered as the basis to calculate the identifiable losses, indicating the Operation conditions of that day, time, place, causes, deliveries, dispatches, withdrawals, mix or segregated Hydrocarbon, recovered and lost and determined after the filling of the line and the restarting of the pumping. 20.1.3 Non-identifiable loses are understood only those losses during Transportation to which its cause cannot be determined with precision throughout the process, from the Points of Entrance to the Points of Exit, including but without being limited to the following: + + 20.1.4 The Transporter shall calculate these losses each semester in such a manner that the semester calculation reflects the real losses occurring during each semester. The average semester of all losses shall be up to cero Point five percent (0.5%) of the deliveries of the period. This calculation shall be made by means of balances that the Transporter shall carry out at the beginning of each calendar month with respect to the previous calendar month, which shall reflect the deliveries and withdrawals, the inventory movement and the identifiable losses, if there are any, to be calculated each semester. 20.1.5 In the case of mix Hydrocarbon, the Non-identifiable Losses of the semester shall be assumed by each of the Senders at prorate of the deliveries of the period. + + + + · Stops/ starts of the Pipeline · Illegal extractions non-detected · Faults in the meter factors · Volumetric contractions · Leakages/passes in the valves · Evaporation · Escapes · Inherent uncertainties on the measurement systems and associated instrumentation · Inherent uncertainties of laboratory analysis associated to the calculation of volumes · Propagation of inherent uncertainties of the procedures set out at the international level for the calculation of volumes by static and dynamic measurement. · Handling loses inherent to the Pipeline + + 32 + + + + + + Operation and Transport Regulations Version 1 20.1.6 In the case of segregated Hydrocarbon, the Sender of the segregated Hydrocarbon shall assume the Non-identifiable losses of the semester. 20.1.7 In the event that Non-identifiable losses exceed cero Point five percent (0.5%) of the deliveries, calculated each semester, the Transporter shall inquire on the possible causes in order to take the corrective actions immediately. 20.1.8 The calculation procedure of losses in the Pipeline shall be governed by the provisions in this clause and the current Compensation Mechanism for Quality for the Mix of Crude Oil. 20.1.9 Non-identifiable losses equal or less than 0.5% monthly shall be distributed according to the value in US dollars of the deliveries by each Sender of the calendar month in which they were detected or the calendar month in which they are reported. 20.1.10 Identifiable losses are distributed according to the value in US dollars of the deliveries by each Sender on the calendar month in which they were detected CLAUSE 21 CLAIMS 21.1 Any claim by a Sender or Third Party in connection with the Transportation service of Hydrocarbons shall be resolved pursuant to the internal procedures of the Transporter and the applicable regulations. These claims shall be delivered to the Transporter's Operational area and they shall conduct the respective internal procedure and shall communicate the result to the Sender. 21.2 For claims regarding the quantity or quality of Hydrocarbons, these shall be presented in writing at the latest within fifteen (15) calendar days after the date of delivery or withdrawal of the Hydrocarbon or the date in which the report for the Volumetric Compensation for Quality is issued. The claim shall be justified within the following thirty calendar days after being presented. 21.3 If the Sender does not present its claim, or if made extemporaneously, or if it is not duly and timely justified, it shall mean the acceptance by the Sender of the Hydrocarbon delivered or withdrawn or the Volumetric Compensation by Quality, as the case may be. CLAUSE 22 SANCTIONS TO OPERATING AGENTS FOR NON-PERFORMANCE OF THE TRANSPORTATION SCHEDULE 22.1 Each of the nominations made by Senders and Third parties shall constitute their commitment to comply with the delivery and withdrawal schedule with quantities and flow rates previously agreed between the parties. + + + + 33 + + + + + + Operation and Transport Regulations Version 1 22.2 For the Operation of the Pipeline the following particular provisions shall be taken into account to apply the following sanctions depending on the type of Sender: 22.2.1 Sender with Contracted Capacity in Firm: 22.2.1 If by any reason the delivery is less than 95% or more than 105% of their Scheduled Capacity, the Sender shall Pay: 22.2.1.1.1 The Transportation fee for volumes delivered when they are higher than the Contracted Capacity in firm. When they are equal or less the Sender shall Pay Transportation fee on the Contracted Capacity in firm. 22.2.1.1.2 The Transporter may decide to charge the Sender a sanction equivalent to 5% of the Transportation Fee of the Scheduled Capacity. + + + + 22.2.1.2 If by any reason, delivery is between 95% and up to 105% of its scheduled Capacity, the Transporter shall charge the Transportation fee for volumes delivered when these are above the Contracted Capacity in firm. When they are equal or less the Sender shall pay the Transportation fee on the Contracted Capacity in firm. In this case there shall not be any sanction, without prejudice of the application of other types of sanctions. 22.2.2 Sender without Contracted Capacity in firm: 22.2.2.1 If by any reason, the delivery is less than 95% or more than 105% of its scheduled Capacity, the Sender shall Pay: 22.2.2.1.1 The Transportation fee for volumes delivered 22.2.2.1.1 The Transporter may decide to charge the Sender a sanction equivalent to 5% of the Transportation Fee of the Scheduled Capacity. 22.2.2.2 If by any reason, delivery is between 95% and up to 105% of its scheduled Capacity, the Transporter shall charge the Transportation fee for volumes delivered. In this case there shall not be any sanction, without prejudice of the application of other types of sanctions. 22.3 For the second and all faults thereafter occurring in a twelve month period counted from the date of occurrence of the last fault, sanctions shall be 10%, without prejudice of other types of sanctions as the may be applicable. CLAUSE 23 HYDROCARBON AFFECTED BY LITIGATION 23.1 Any Sender or Third Party is in the obligation to notify in writing before delivery to the Transporter, if the Hydrocarbon being the purpose of the Transportation request is being affected by any encumbrance, claim or litigation both judicial and extra-judicial. 34 + + + + + + Operation and Transport Regulations Version 1 23.2 The Transporter reserves the right to either accept or reject any Hydrocarbon being affected under the terms abovementioned. Without prejudice or the power mentioned, the Transporter shall coordinate with the Sender possible action plans in order to ensure the rights acquired by the Senders regarding the Owner's Capacity and/or Contracted Capacity in firm. 23.3 In case of accepting its Transportation, the Transporter may request to the Sender the presentation of a bond at satisfaction of the Transporter to cover any damage which may be caused to the Transporter, the owner, to other Senders and Third parties as a result of the Transportation. 23.4 Likewise, the Sender shall indemnify and hold the transported and the owner harmless under the terms set out in the clause of Risks and responsibility. CLAUSE 24 INVESTMENTS IN THE PIPELINE 24.1 Regarding any requests made to the Transporter to carry out any works and additional investments to those made in the Pipeline by the Transporter or the owner, the following provisions shall be considered: 24.1.1 Whoever is interested or needs the execution of works for the construction, adaptation, expansion, connection and/or addition of assets and facilities required, as a result of the Transportation of Crude Oil through the Pipeline, shall request it (hereinafter the "Proposal") to the Transporter with due justification and indicating the needs and specifications of the works to be carried out. The Transporter shall indicate whether or not the Proposal meets and/or is in accordance with the safety, and environmental requirements as well as the technical, commercial, legal and engineering aspects in connection with the Pipeline and the common practices of the industry in general in Colombia. 24.1.2 The Proposal submitted to the Transporter under the previous terms shall: Include all relevant details, including but without being limited to, a(1) the necessary additional infrastructure and the modifications to be made on the existing infrastructure, (2) the estimated costs, (3) the time schedule for construction of the works and start-up of the services associated to these works, (4) all estimated operating and maintenance costs considered during the service associated to these works and (5) basic engineering; The Proposal shall be addressed to the Transporter through the legal representative of the person interested, for consideration and analysis of the Transporter during a lapse not to exceed 60 calendar days counted after the following day of submission of the Proposal with all the information required. + + + + 35 + + + + + + Operation and Transport Regulations Version 1 24.1.3 As a result of the analysis conducted, the Transporter shall determine whether or not the Proposal is accepted, or if conditioned totally or partially, if executed directly, or through a person designated by said Transporter, as well as the scope of the investment and all other aspects relevant to the Proposal. 24.1.4 If the new infrastructure modifies the Effective Capacity, the Senders or Third parties participating in the Proposal may enter into a Ship or Pay Transportation Contract to contract a portion of the new Capacity. In the case of the Capacity corresponding to the Transporter or Owner given the scope of the Proposal, this shall be considered as Owner's Capacity. 24.1.5 No one may carry out any constructions, connections or adaptations in the Pipeline without the previous written agreement duly signed by the Transporter's representative. CLAUSE 25 SOLE RISK PROPOSALS 25.1 Proposals made to be carried out at the Sole and exclusive Risk or Senders or Third parties (hereinafter, "Sole Risk Proposal") shall only be executed upon completion of the process indicated in clause 24 with the decision that the Transporter will not participate initially in the Proposal. 25.2 The Sole Risk Proposal shall cover the same aspects as the Proposal presented in accordance with clause 24. In any case, all Sole Risk Proposals shall meet the technical specifications in terms of measurement, the applicable determinations of quality and safety and the regulations of this Manual, and shall have the respective licenses, and required permits by the competent authorities as well as compliance with the provisions that regulate the acquisition of lands and any other applicable regulations. 25.3 For this purpose the following shall be taken into account: 25.3.1 Presentation of the Sole Risk Proposal: The interested Party shall request authorization for the Sole Risk Proposal submitting all the necessary documentation for its study. The Transporter shall verify compliance with the regulations on these matters and may request any clarifications or details regarding the information. The response accepting or rejecting the request for the Sole Risk Proposal shall not exceed a term of three (3) months from its reception, without including in this term the time necessary to submit and respond any clarifications or details requested by the Transporter. 25.3.2 Participation of the Transporter: At any time during the approval, design, construction and start-up of a Sole Risk Proposal, the Transporter may express its intention to participate in it. The proportion and conditions in which the Transporter shall participate shall be determined by common agreement between the parties. If no agreement is reached between the parties, the mechanisms set out in clause 27 (Settlement of Controversies) shall be applied. + + + + 36 + + + + + + Operation and Transport Regulations Version 1 25.3.3 Conditions for the Execution: The Transporter may deny the authorization for the implementation of the Sole Risk Proposal duly justified, including but without being limited to, safety, technical, Operational or Capacity reasons, alleging they may affect the integrity of the Pipeline or the Operation of other Senders or by disposition of the competent authority. The Transporter shall not be in the obligation to provide the Transportation service until the execution of the Sole Risk Proposal fulfills the requirements established in the Manual, the applicable engineering standards, the Transporter's provisions and requirements and any other applicable regulations. In the case of associated systems to the Pipeline, the Sender shall not modify the facilities or its way of Operation without the Transporter's authorization. The Transporter reserves the right to carry out the construction, administration, Operation and maintenance totally or partially of the Sole Risk Proposals and shall define the scope of its participation. The costs implied thereto shall be borne by the Sender or Third Party presenting the Sole Risk Proposal. The Sender and the Transporter may freely agree on the means for financing and Payment. 25.3.4 Indemnity: Any Sender or Third Party participating in the execution of the Sole Risk Proposal shall indemnify and hold the Transporter and owner harmless under the terms set forth in the Risks and Responsibilities clause. 25.3.5 Bonds and Insurance: the Transporter and the interested Senders in the Sole Risk Proposal shall obtain the necessary bonds and insurance to cover any Risk derived from the Sole Risk Proposal under terms reasonably acceptable for the Transporter, without prejudice of obtaining all other bonds and insurance requested by the Transporter. 25.3.6 Property, financing and Operation of the Sole Risk Proposal: For those investments that somehow change the existing infrastructure of the Pipeline and if the Operation affects the functioning of the same, the ownership shall belong to the Transporter or the owner. In this case the Transporter and the Sender or Third Party executing the Sole Risk Proposal, shall agree on the mechanism for amortization. All funds required to undertake the execution of the Sole Risk Proposal shall be procured, obtained and guaranteed by the Senders or Third parties participating in the Sole Risk Proposal, and under no circumstances neither the Transporter nor the owners or any other Sender shall be affected by the financing instruments that the Senders or Third parties participating in the Proposal adopted by, or as a result therefrom. 25.3.6.1 If the new infrastructure modifies the effective Capacity, the Senders or Third parties participating in the Sole Risk Proposal may enter into a Ship or Pay Transportation contract to contract a portion of the new Capacity. In the case of the Capacity corresponding to the Transporter or owner given the scope of the Sole Risk Proposal, it shall be considered as an owner's Capacity. + + + + 37 + + + + + + Operation and Transport Regulations Version 1 25.3.6.2 The Transporter shall facilitate to the Senders or Third parties that will execute or have executed the Sole Risk Proposal the access to their own infrastructure. Without prejudice of the foregoing, the Senders or Third parties that have executed a Sole Risk Proposal shall ensure to the Transporter or owner that the Transportation Capacity of the latter shall not be affected by the execution of the Sole Risk Proposals. In any case, if the Capacity of the owner or Senders is affected as a result of the execution of the Sole Risk Proposal, the Sender(s) and Third parties that have executed it shall be liable and indemnify the owner and all other Senders. 25.3.7 Information: The Senders and Third parties participating in the Sole Risk Proposal shall provide the Transporter all the information arising from the design, construction, implementation, adaptation, expansion, connection, addition of assets and facilities, and the start-up of services associated to the Sole Risk Proposal. CLAUSE 26 PROCEDURES FOR COORDINATION OF OPERATIONS, COMMUNICATIONS AND EMERGENCY ASSISTANCE 26.1 Communications and all other aspects associated to the coordination of the activities related to the Manual hereof, shall be attended by the operating area of the Transporter. These communications may be directed through field representatives of the Transporter or processed directly by personnel of the operating coordination in the Transporter's Offices. 26.2 Meetings shall be held, depending on the requirements from the parties, in which the Transporters and the Senders shall participate in order to review compliance with the Transportation schedule under execution and review the Transportation plan. In these meetings aspects impacting the Transporter's Operation shall be reviewed and aspects or interest for the Senders shall be disclosed. 26.3 With a monthly frequency, in the Third week of the calendar month after the month of Operation the exercise of volumetric compensation for quality shall be conducted. 26.4 The Transporter has available a Contingency Plan that compiles the structure and required procedures to assist in any type of emergencies which may affect the integrity of people, the environment or the infrastructure. To provide assistance with emergencies the Transporter applies a System Model Command of Incidents, which contemplates different flows of horizontal and vertical communication required to ensure an effective notification and response preparation to the event. + + + + 38 + + + + + + Operation and Transport Regulations Version 1 26.5 In the assistance of emergencies, the Transporter's Operations and maintenance personnel participates, as well as personnel from corporate support to contribute in the handling of communications and the required logistics support by the assistance group. 26.6 Likewise, the Transporter has agreements with different authorities and emergency assistance bodies at the local, regional and national level as complement to its internal assistance equipment. This is complemented with agreements established with companies from the sector to provide support and mutual assistance before any event, in order to mitigate any emergency impact. CLAUSE 27 SETTLEMENT OF CONTROVERSIES 27.1 In the event of occurrence of any conflict or disagreement in connection with the Manual hereof or the Transportation service, it shall be initially resolved by a representative duly authorized from each of the parties within thirty (30) days following the notification issued by the Party who considers the existence of a disagreement and effectively received by the other Party. 27.2 If, after the thirty (30) days abovementioned, the disagreement continues totally or partially, the parties shall rely on any alternative mechanism to settle conflicts contained in the Colombian legislation. CLAUSE 28 VALIDITY 28.1 The validity of this Manual is the date of its disclosure which shall be made through a publication in the Transporter's website. CLAUSE 29 ADDITIONS AND MODIFICATION 29.1 The Transporter may carry out additions or modifications to this Manual, pursuant to the provisions in Resolution 18-1258 of July 14, 2010 from the Ministry of Mines and Energy as substituted or amended. CLAUSE 30 APPLICABLE LEGISLATION 30.1 This Manual is governed in all its parts by the applicable regulations of the Republic of Colombia. + + + + 39 + + + + + + Operation and Transport Regulations Version 1 ANNEX 1: MECHANISMS OF QUALITY COMPENSATION FOR THE MIXTURE OF CRUDE OIL ADJUSTMENT PROCEDURES OR VOLUMETRIC BALANCES The Transporter shall conduct the volumetric balance with a monthly frequency in order to establish the volumes injected by each Sender to the Pipeline, the identifiable losses, the Non-identifiable losses, consumptions, inventory variations, and any adjustments for quality if the latter is applicable. + + For purposes of the procedure hereof, the provisions set out in the Manual of the Transporter for handling Losses in the Pipeline and in the annex hereof shall be applied. + + The Transporter assumes the totality of costs for consumption of Crude Oil. + + + + In order to make equitable adjustments between the Senders of the Pipeline by the differences in value resulting for differences in quality of Crude Oils delivered I the Pipeline, a procedure of volumetric compensation for quality shall be established ("CVC" in Spanish). The purpose of the CVC is to establish a system to compensate Senders for the degradation or improvement of the Crude Oil withdrawn compared with the Crude delivered. The Sender withdrawing a Crude o lower quality than the Crude delivered shall be compensated with a higher volume. The Sender withdrawing a Crude with higher quality than the Crude delivered shall compensate others Senders of better quality accepting a lower volume. At any rate, the sum of debits and credits by CVC for all Senders shall be cero. + + + + 1. LOSSES + + 2. CRUDE OIL CONSUMPTION + + 3. VOLUMETRIC COMPENSATION FOR QUALITY - CVC + + 3.1 When Crude Oils are delivered to the Pipeline of different quality and from different Senders, the result shall be a Crude Oil with different characteristics of quality and market value than the Crude Oil delivered to the Pipeline by each of the Senders. Due to different qualities of Crude Oil delivered to the Pipeline, some Senders shall withdraw Crude of higher value than the Oil delivered while others shall withdraw Crude Oil with less value than the Oil delivered to the Pipeline. + + 40 + + + + + + Operation and Transport Regulations Version 1 At any node of Entrance of the Pipeline where two or more Crude Oil flows merge in order to be transported, a volumetric compensation for quality shall be established on the resulting mix. + + For purposes of the procedure hereof, the provisions in the Manual of the Transporter shall be applied for measurements in the Pipeline. + + The Transporter set out detailed procedures for the CVC following the guidelines established hereto. + + + + + + + + For any month of Operation the corresponding quantity of Crude of each Sender shall be: + + + + + + + + + + 3.2 SAMPLING AND SYSTEM MEASUREMENT + + 3.3 CVC PROCEDURES + + 3.3.1 The Transporter shall administer the CVC process and the Senders may audit the process or request reviews thereto as long as the Transporter is timely informed and a working plan is coordinated between the parties. + + 3.3.2 The Transporter shall establish monthly the coefficients for adjustments of quality and sulfur pursuant to the criteria established herein. + + 3.3.3 The CVC shall be settled in kind. + + 3.3.4 The Transporter shall make monthly adjustments to the corresponding volume of Crude to each Sender, based on the coefficients of adjustment for quality. + + (a) Reduced if such Sender of the Pipeline delivers Crude of lower quality than the average quality of the mix, + + (b) Increased if said Sender of the Pipeline delivers Crude of ah higher quality than the average quality of the mix. + + 3.3.5 At the latest on the 15th day of the calendar month following the Operation, Senders shall report to the Transporter the export prices, the API gravity and the sulfur content of its Crude for the Month of Operation. + + 41 + + + + + + Operation and Transport Regulations Version 1 + + + + + + + + The parties may jointly review: + + + + + + + + The API gravity and the sulfur content on the data base of the Crude quality are representative of the current qualities of Crude which is being delivered. The variability of the API gravity and sulfur is within an allowed tolerance to be determined by the parties. Analyses of sulfur content shall be conducted based on a schedule agreed by the parties after the beginning of the Fiscal Year. + + By means of using the Crude Oil basket of reference the variation of price shall be determined regarding the API grade and sulfur content for Crude Oil delivered. The method is based on the use of the linear regression of prices of a Crude Oil basket of reference delivered in the coast of the Gulf of The United States of America with API gravity and sulfur content. + + + + 3.3.6 Each month of Operation the Transporter shall measure the volumes delivered by the Senders and shall determine the weighted average for the quality parameters of Crude Oils delivered. + + 3.3.7 The Transporter shall calculate the adjustments to the volume for each Sender and shall determine the Crude volume that corresponds. No adjustment in the volume as a consequence of the CVC shall affect the Transportation fee that a Sender shall Pay to the Transporter. + + 3.3.8 Senders acknowledge that adjustments to their Crude volumes to be withdrawn as a result of these principles and procedures of the CVC may affect the volume of Crude Oil for a withdrawal afterwards. + + 3.3.9 Senders are entitled to review the Transporter's calculations regarding the adjustments by CVC and the due application of this procedure. + + (a) The appropriateness of the Crude Oil reference basket regarding their terms of quality. + + (b) The information on prices available to the public. + + (c) The calculations of the coefficients and the volumes adjusted. + + 3.3.10 A data base for the API gravity shall be developed and sulfur content for Crude delivered from reliable samples of laboratory of Crude Oil flows. The quality data of Crude Oil must comply with the following criteria: + + 3.4 METHODOLOGY FOR CRUDE OIL VALUATION + + 42 + + + + + + Operation and Transport Regulations Version 1 + + The basket of Crude Oil to be used shall always include a minimum of ten (10) Crude Oils. The basket of reference for Crude Oil with prices and qualities historically recognized shall be used to determine the coefficients of adjustment for API grade and sulfur content. The price information of the basket shall be continuously available from sources open to the public for each Crude Oil of reference. Prices reported used in the basket of Crude Oil of reference shall be obtained from independent price information services recognized by the industry and shall come from real Operations. This basket provides a range of qualities to develop the coefficients for the regressions and therefore cover the flows that may be injected to the Pipeline. The initial basket of Crude Oils to be used is the one established in table I of this procedure which may be reviewed by common agreement between the Transporter and the Senders. + + All price quotes of Crude Oil for a common location in the Coast of the Gulf of The United States of America shall be adjusted. All prices of Crude Oil of reference shall be adjusted with respect to the location and based on the availability of price information according to the following list: + + + + + + + + + + + + + + + + Tables II to IV of this procedure show examples for calculation of basket Crude prices delivered in the Gulf Coast. + + To determine API gravity and sulfur coefficients linear regressions shall be run using the minimum square method. + + + + 3.4.1 BASKET OF REFERENCE FOR CRUDE OIL + + 3.4.2 CALCULATION OF CRUDE OIL PRICES FOR THE BASKET IN THE COAST OF THE GULF + + 1. FOB quotation + + - Transportation to the Coast of the Gulf of The United States of America is added using the appropriate vessel size. + + - Customs Tariffs, Oil pollution Liability Insurance, "Superfund" taxes are included and others as appropriate. + + 2. CIF quotation + + - Customs Tariffs, Oil pollution Liability Insurance, "Superfund" taxes are included and others as appropriate. + + 3. Crude Oil delivered by the Pipeline + + - Any Pipeline fee is added if necessary + + - "Superfund" is included and other fees/tariffs as appropriate. + + 3.4.3 LINEAR REGRESSION FOR PRICES, GRAVITY AND SULFUR + + 43 + + + + + + Operation and Transport Regulations Version 1 First the arithmetic average is calculated for prices of the basket of Crude Oils of reference delivered in the Gulf coast for three months. The cumulative average for three months shall be calculated at the closing of the settling month using the prices for the settling month and the two (2) previous months prior to the settling month (See 1 in table V). To determine the API gravity coefficient, a linear regression analysis shall be performed using the three months average of Crude prices from the basket calculated in the paragraph above as the dependent variable. Likewise, the API gravity and sulfur content is used for each Crude Oil of reference as the independent variables. The formula to be used makes a regression of the price as a function of API gravity and sulfur simultaneously (See 2 in table V). To determine the sulfur content a linear regression analysis shall be conducted using the three month average of Crude prices from the basket calculated in the previous paragraph as the dependent variable. Likewise, the API gravity and sulfur content is used for each Crude Oil of reference as the independent variables. The formula to be used makes a regression of the price as a function of API gravity and sulfur simultaneously (See 3 in table V). The results of the determination of the linear relation between the price delivered and the API gravity and sulfur content may be stated in the following lineal equation: Y = A1* X1+ B* X2 + b Pr = A1* APIR+ B*SR + b (1) Where: PR = Crude price in $/Bbl A1 = API gravity coefficient determined through linear regression in $ by grade API-Bbl APIR = Independent variable of API gravity B = Sulfur coefficient determined through linear regression in $/%S-Bbl (negative number) SR = Independent variable of sulfur content b = Y interception determined from the linear regression in $/Bbl. + + After obtaining the API and sulfur coefficients, a volumetric adjustment shall be calculated to conciliate differences between the quality of each Sender and the mix transported. The quantity to be adjusted for each Sender is determined as is follows: + + + + 3.4.3 ADJSUTMENT OF VOLUMES FOR SENDERS (TABLE VI) + + 44 + + + + + + Operation and Transport Regulations Version 1 The relative value of Crude Oil for each Sender shall be calculated at the Point of Entrance. To obtain this, the API gravity of Crude from each Sender is multiplied by the API coefficient obtained in the regression and then adding to this result, the multiplication of the sulfur percentage of Crude from each Sender by the sulfur coefficient obtained in the regression. See table VI in the column - Relative value of Crude $/BBL The relative value of the mix transported is calculated with the data of the relative value of each Crude Oil from all Senders. This value is obtained calculating the weighted average of the relative values of each Crude Oil multiplied by the volume delivered by the Sender. (See (1) table VI After this, the average export price of the mix must be obtained with the data from exports of all Senders in the month in which the adjustments are made. (See (2) in table VI To obtain the calculated price, the difference between the relative value of each Crude Oil and the relative value calculated for mix (1) must be obtained, and add this difference to the average export price of the mix. Then, the quantity delivered by the Sender is multiplied by its calculated price and this product is divided between the average export price of the mix, obtaining as a result the total adjusted volume by Sender. The volume to be adjusted shall be the difference between the total adjusted volume by Sender and the volume delivered by a Sender to the Pipeline. The sum of volumes to be adjusted from all Senders must be cero. The Transporter shall run the linear regression using a spreadsheet such as Excel. The Transporter shall document the statistical results of the linear regression so that the information can be provided to any Sender upon request. + + + + 45 + + + + + + Operation and Transport Regulations Version 1 Table I Reference Crude Basket + + Table II Illegible Information Table III Illegible Information Table IV Illegible Information + + + +Degree Origin API, ° Sulfur% Source for Pricing BBL/MT + +Arab Light Saudi Arabia 33.2 1.9 Argus, Formula 7.34 Arab Medium Saudi Arabia 30.5 2.4 Argus, Formula 7.22 Arab Heavy Saudi Arabia 27.6 2.8 Argus, Formula 7.09 Castilla Colombia 18.8 2.0 Platts 6.70 LLS US Gulf Coast 36.2 0.3 Argus 7.47 Mars US Gulf Coast 28.0 2.1 Argus 7.15 Maya Mexico 21.1 3.5 Argus 6.80 Napo Ecuador 18.0 2.3 Platts 6.66 East Ecuador 24.0 1.2 Platts 6.93 Vasconia Colombia 26.5 0.9 Platts 7.04 + + 46 + + + + + + Operation and Transport Regulations Version 1 Table V Linear regression of prices, API gravity and sulfur - August 2010 Closing Example + + + + Table VI Adjustments of volumes for senders - August 2010 example + + + + + + + + + + API Sulfur JUN-2010 JUL-2010 AUG-2010 Average of 3 previous months (1) Arab Light 33.2 1.9 77.60 76.26 76.29 76.72 Arab Medium 30.5 2.4 75.84 74.59 74.62 75.02 Arab Heavy 27.6 2.8 74.34 73.32 73.25 73.64 Castilla 18.8 2.0 69.84 69.20 69.20 69.41 LLS 36.2 0.3 78.94 78.84 79.79 79.19 Mars 28.9 2.1 74.63 74.18 74.35 74.39 Maya 21.1 3.5 66.27 67.47 68.65 67.46 Napo 18.0 2.3 69.56 69.02 69.08 69.22 East 24.0 1.2 72.12 71.93 72.15 72.07 Vasconia 26.5 0.9 74.93 75.89 75.29 75.37 + +(2) API, $/API-BBL Coefficient 0,495 (3) Sulfur, $%S-BBL (1,191) + +Bank of Quality Coefficients API Coefficient (0.50) Sulfur Coefficient (1.19) + +Sender Volume injected by sender MBBL/mo + +API in the injection point + +Sulfur in the injection point + +Relative value of the crude S$/BBL + +Calculated Price $/BBL + +Total Volume adjusted by sender MBBL/mo + +Volume to adjust MBBL/mo + +Sender A 900 31 0.5 14.75 77.97 935 36 Sender B 1,200 26 1.0 11.69 74.90 1,195 (2) Sender C 600 20 2.0 7.53 70.74 566 (34) Total 2,700 2,700 - + +(1) Relative value calculated for mix 11.79 (2) Average price of exportation of mix, August 2012 75.00 + + 47 + + + + + + Operation and Transport Regulations Version 1 ANNEX 2: DEFINITION OF STANDARD BARRELS PER SYSTEM + + + + + + 48 + + + + + + Operation and Transport Regulations Version 1 ANNEX 3: DESCRIPTION OF THE SYSTEMS See File Annex 3 attached. Description of the Systems. + + + + 49 + + + + + + Operation and Transport Regulations Version 1 ANNEX 4: MINIMUM SPECIFICATIONS OF QUALITY PER SYSTEM + + + + + + 50 + + + + + + Operation and Transport Regulations Version 1 + + *, **, *** : for Crude + + + + 51 + + + + + + ANNEX 2 ECOPETROL MANAGEMENT GUIDELINES FOR RECEIVABLES SERVICES ECP-UTE-G-008 + + + + + + + + + + + + TABLE OF CONTENTS + + + + + +ECOPETROL MANAGEMENT GUIDELINES FOR RECEIVABLES SERVICES ECP-UTE-G-008 + +1. OBJECTIVE 2. GLOSSARY 3. GENERAL CONDITIONS 3.1Commercial Principles for Credit and Receivables Management 3.2Analysis of Credit Quality of the Client 3.3Internal Rating by ECOPETROL 3.3.1 Guidelines for the Analysis of the Client 3.3.2 Modalities in which Payments can be Made 3.3.3 Clients with Acceptable Guarantee Created for Purchase 3.3.4 Clients of Leasing 3.4Process for Approval of a Line of Credit by ECOPETROL 3.4.1 Credit application 3.4.2 Determination of the Credit Quality of the Client 3.4.3 Officers Authorized for the Analysis and Consideration of Lines of Credit 3.4.4 Amounts above the Ceiling Approved in Lines of Credit 3.5Acceptable Guarantees 3.6Follow-up 3.7Managing the Relation with the Client that Buys on Credit 3.7.1 Sale Prices and Terms 3.7.2 Claims and Discrepancies in Invoicing 3.8Collection of Receivables 3.9Guarantees Delivery and Custody 3.10Late Interests 3.11Collections Management 3.11.1 Starting Legal Actions to Collect Overdue Balances 3.11.2 Modifications in the Long Term 3.12Restructuring by General Agreements 3.13Provision for Accounts Receivables 3.14Receivables Write-offs + + 1 + + + + + + + + + + To define uniform guidelines for the management of service Receivables from ECOPETROL in order to mitigate the inherent risks in the sale of said services. + + Credit Lines: This is a debt facility granted by ECOPETROL to a specific client. Approval of a credit line is an autonomous decision by ECOPETROL based on objective criteria such as the credit history of the client, its historical behavior on payments or the type of client according to the Internal Classification Chart. ECOPETROL at its sole judgment may suspend any credit line at any time without any legal or formal requirement to be fulfilled before the client. Acceptable Guarantees: Payment mechanisms that provide collateral for payment issued by financial entities (financial guarantees), securities or instruments providing immediate liquidity for their realization. See Guidelines for the Management of Acceptable Guarantees ECP-UTE-G-006. Other Services: includes all those provided to third parties such as provision of electricity, water, information network, leasing of tangible and intangible assets, machinery and tools among others. Receivables Risk: Associated to the risk of credit1, the Receivables risk concerning this document is defined as the potential inability to pay from clients requesting any type of services from ECOPETROL. Services: Provision or execution that satisfies some necessity with a specific purpose. ECOPETROL provides industrial, technical, technological, research and transportation services among others. Research Services: Research services applied to projects generally internal, with the Business Units. Transportation Services: transportation services different from those defined by the Vice-presidency of supply and marketing (VSM) referred to transportation services of products delivered by pipeline. Industrial Services: provision offering solutions given the infrastructure facilities of ECOPETROL, part of industrial services are the following: Unloading Services: Services provided to exploration companies which must transport the oil produced in truck- by land from the production wells to a point in the pipeline system. + +1 The risk of credit is the possible loss assumed by an economic agent as a result of default in contractual obligations regarding the counterparties involved. + + + +ECOPETROL MANAGEMENT GUIDELINES FOR RECEIVABLES SERVICES ECP-UTE-G-008 + + 1. OBJECTIVE + + 2. GLOSSARY + + 2 + + + + + + + + Filling Services: Services provided to client companies who, in order to take the refined products purchased at the plant, need to be connected to the product loading infrastructure in truck-tankers, identified as filling in. Storage Services: services provided to client companies for storage of products owed by third parties in tanks owed by ECOPETROL. Port Services: Use services of sea terminal facilities and necessary operations for a ship to carry out its task of product loading and unloading. Technical Services: laboratory studies or tests, sample analyses, industrial laboratory, technical assistance and gas compression (agreements with gas transportation companies to provide gas compression services to gas going through the gas pipeline). Technological Services: design and development of equipment, machinery and specialized products. + + This document applies to those cases in which ECOPETROL acts as a seller or service provider and as a supplement to those contracts already signed and the regulations in force, notwithstanding anything to the contrary. This does not include anything in connection with transportation services associated to the commercialization of products derived from oil, propane gas and crude oils whose policy is defined by the Vice- presidency of supply and marketing in the reference documents for credit to clients. + + Throughout all stages referred to the analyses, consideration of terms and commercial conditions, approval of credit facilities and client's follow-up, good faith, ethics, transparency, economy, responsibility, equity, planning, and customer service criteria shall prevail as described hereunder (those terms not defined in this numeral shall be given a meaning according to the law, otherwise they will have their natural and obvious meaning). Ethics: all officers from ECOPETROL shall avoid any conflict between their personal interests and the interests from ECOPETROL when dealing with purchasers or any other person - natural or legal, national or foreign - who is making, or intends to do Business with ECOPETROL order with companies in which ECOPETROL has an interest directly or indirectly. In case of any conflict of interests, inabilities for incompatibilities, the officer from ECOPETROL shall refrain from participating in any manner in the respective act. + + + +ECOPETROL MANAGEMENT GUIDELINES FOR RECEIVABLES SERVICES ECP-UTE-G-008 + +3. GENERAL CONDITIONS. + +3.1 Commercial Principles for Credit and Receivables Management. + + 3 + + + + + + + + Transparency: decisions shall be made, based on objective criteria and clear and known rules. Equity: all necessary measures to keep a healthy balance with the client, regarding terms and conditions of commercial, technical, economic and financial character shall be adopted in all transactions. Planning: all commercial and credit procedures shall correspond to a careful planning to contribute in an efficient manner to fulfill the mission and achievement of ECOPETROL's objectives. Economy: all resources used in the process of approving and managing Businesses shall be administered with a healthy criterion of austerity in means, time and expenses. Customer Service: the rules set out in this document shall be applied by officers as a vehicle to expedite decisions and to conduct all commercial and credit procedures with efficiency and efficacy. + + Considering the risks ECOPETROL is exposed to, ECOPETROL shall only negotiate with natural or legal persons of whom ECOPETROL has knowledge about their history in the market and their condition as users of services, consumers or traders of products in the oil sector. The basic client's information shall provide answers to the questions asked hereunder and it is the responsibility of the Business Unit providing the service, which handles the relation with the client, to have clarity on the answers to the following questions: + + + + 3.3.1 Guidelines for the Analysis of the Client For an appropriate decision-making it is required to have knowledge of the client and its activities. + + + +ECOPETROL MANAGEMENT GUIDELINES FOR RECEIVABLES SERVICES ECP-UTE-G-008 + +3.2 Analysis of Credit Quality of the Client + + · Who is the client? · What reputation does it have in the market? · What has been its history with ECOPETROL? · What type of Business does it make? · Does it have capacity to meet its commitments? + +3.3 Internal Rating by ECOPETROL + + 4 + + + + + + + + In addition, it is mandatory to comply with the Prevention Manual for assets laundering. In the client interested in buying to ECOPETROL any service, shall conduct through the Business Unit providing this service the registration process in the client's master database of ECOPETROL. The respective manager and/or director of the Business Unit must record the validation indicating that validation has been made in the restrictive listings on the client + + 3.3.2 Modalities in which payments can be made Payment commitments with ECOPETROL can be based on: + + + + + +ECOPETROL MANAGEMENT GUIDELINES FOR RECEIVABLES SERVICES ECP-UTE-G-008 + + · Any client applying for a line of credit must be subject to a preapproval from the Business Unit providing the service or the division of ECOPETROL in charge of conducting the credit analysis. · The risk rating does not guarantee the approval of credit of confidence; ECOPETROL reserves the right of whether or not to approve such type of credit. · All guarantees presented must be adjusted in their content to the stipulations of ECOPETROL, and must be issued by an entity equally accepted by the company. · All documents in connection with the credit application must remain in ECOPETROL 's files, and as the case may be, those documents were the line of credit is awarded. · In case of default by a client of any of the obligations undertaken with ECOPETROL, the Company reserves the right to whether or not accept a restructuring of the debt or to start a legal proceeding. · Annually, or with less frequency depending on market conditions, an officer appointed by the Business Unit providing the service must conduct a follow-up, both to the credit quality as well as the line of credit assigned to each client, updating the risk rate before a Risk Rating Agency or by an Agency of Research Service, Collection and Processing of Credit and Company Information approved and accepted by ECOPETROL. + + · Payments in advance · Through credits of confidence · By means of financial instruments of payment such as banking acceptance or commercial letter of credit. + + 5 + + + + + + + + The determination of the type of client is the responsibility of the Business Unit providing the service considering objective criteria such as its payment behavior and the current relation with ECOPETROL, in addition to the financial assessment conducted by a Risk Rating Agency. Payments in Advance: ECOPETROL may accept payments in advance from clients having liquidity and/or who would like to benefit from discounts that ECOPETROL may offer for the purchasing of specific services. Notwithstanding, each management office shall set out the discount policy for its line of services. Payment in advance shall be requested to those who cannot offer any payment support through financial entities or offer collateral at satisfaction. Credits of Confidence: These are credits granted by ECOPETROL to clients with well recognized commercial and/or industrial history, or to clients that, even though they are new have proved financial strength in the oil sector and its derivatives, biofuels and energy products with an impeccable payment history, are classified in category 1 of internal rating Table 1 of these guidelines and execute promissory notes with letter or instructions in favor of ECOPETROL . Impeccable payment history is understood as the client who has timely paid its obligations with ECOPETROL, or with any other agent with whom it as obligations within the payment terms set out in the bills, has acknowledged and paid all late interests resulting from any possible delays in payments, and no payment instrument has been made effective from any agent with whom it has obligations to support for its purchases. A client shall lose access to credits of confidence when there is a default in a period of one calendar year in the payment of its commitments with ECOPETROL under the terms set out in the previous paragraph or when its rating falls below the Superior category. Default shall be understood as the act of enforcing the guarantee or promissory note supporting the obligations undertaken with ECOPETROL, or when in a calendar year a notice has been delivered to the insurance company or banking entity for the execution of the guarantee, even if the client is in good standing on the date before making the policy effective. Without prejudice of the foregoing, ECOPETROL reserves the right to whether or not approve a credit of confidence to a client, even if said client has obtained the highest rating based on Table 1 of these guidelines. + + + +ECOPETROL MANAGEMENT GUIDELINES FOR RECEIVABLES SERVICES ECP-UTE-G-008 + + 6 + + + + + + + + Likewise, a client of confidence may use, in addition to the credit of confidence, other financial instruments for payment and/or payment in cash. Payment by financial instruments: These are instruments for payment in cash or through credit in favor of ECOPETROL, issued by a financial entity on behalf of the client and limited to a particular transaction as indicated in the Guidelines for the Administration of Acceptable Guarantees ECP-UTE-G-006. 3.3.3 Clients with Acceptable Guarantee Created for the Purchase of Products. For clients with a current line of credit with ECOPETROL for the purchase of products, the Business Unit providing the service shall request to the corresponding commercialization management to review with the legal department whether or not the guarantee provided covers the provision of the service, and if so, generate a memorandum to the Coordination of Receivables indicating the distribution of the line of credit for the sale of product and the sale of services. In any case, the arithmetic sum of the line of credit for the product and the line of service shall not exceed the total value of the guarantee provided by the client. 3.3.4 Clients of Leasing For the clients of leasing, the leasing contract entered into is writ of execution, the Head of the Unit for Real Estate Management must request through a memorandum the line of credit to the Coordination of Receivables and Collections indicating the contract number, starting date, termination date, the amount of the leasing installment, and the value of the line of credit applied for, said memorandum shall indicate that the contract has approval from the legal area or attach approval from the legal office advising the Business Unit. 3.4 Process for Approval of a Line of Credit by ECOPETROL The process for approving a line of credit by ECOPETROL is explained as follows: 3.4.1 Credit Application Any client interested in purchasing through credit any product or service of ECOPETROL, shall carry out with the Business Unit providing the service an application for a line of credit and the client will be informed of the result of the Decision. If the decision is not approved, the client shall be informed of the reasons by which the same was not approved. Decisions in this sense shall be adopted based on objective criteria regarding terms and conditions of commercial, technical, economic and financial character and within the frame of current legal regulations. + + + +ECOPETROL MANAGEMENT GUIDELINES FOR RECEIVABLES SERVICES ECP-UTE-G-008 + + 7 + + + + + + + + 3.4.2 Determination of the Credit Quality of the Client The officer appointed by the Business Unit providing the service shall examine the content of the application form and request to the client or to a Risk Rating Agency or an Agency of Research Services, Collection and Processing of Credit and Company information, the Rating Certificate2 in order to have the rating given by such Agencies. This Rating Certificate shall be attached to the application form if it is a new client or to the client's file in the central archives of ECOPETROL if it is a client already registered wishing to have a direct credit with ECOPETROL . Based on the information described above, you'll consider appointed by the Business Unit providing the service shall examine and classify the client in the Table of Internal Rating for Clients of Services from ECOPETROL Table 1, taking as a basis (when there is more than one rating) the lowest rating given by a Risk Rating Agency or by Agencies Specialized in Credit. If the rating of obtained classifies the client as a superior client, at the latest 10 days after having the complete information from the client the officer appointed by the Business Unit providing the service shall fill out the application form for a line of credit for the approval of his/her Manager and or respective Director3 in accordance with the template that appears in form ECP-UTE-005 Application Line of Credit Services. With the purpose to classify ECOPETROL 's clients who wish to buy through credit after this document is in force, such clients shall be classified through the application of an internal general risk rating according to the methodology presented hereunder. Such classification shall be conducted and reviewed by each of the officers appointed by the Business Unit providing the service annually or from time to time but at least once a year or when the economic or market conditions or the financial situation of the company requires so. The position of a client within the internal rating table shall be in accordance to table 1, whose categories have their equivalence with the risk rating given by rating agencies or by agencies specialized in credit analysis. The foregoing shall not apply to: (i) bodies and state entities at different levels (central and decentralized) with whom ECOPETROL subscribes contracts for the sale of products and/or services provided there is a risk assessment of Receivables for the respective entity duly authorized and/or (ii) companies associated with ECOPETROL in oil production fields, associated through collaboration, participation, strategic alliances and joint venture contracts, these companies shall subscribe a promissory note with a letter of instructions to ensure their payment obligations, however, in this case the Manager and/or Director of the Business Unit providing the service shall assess the pertinence of requesting an acceptable guarantee (policy, bank collateral, etc.) to ensure the payment obligations in lieu of the promissory note with letter of instructions. + +2 Risk Rating Agency or by Agencies of Research Services, Collection and Processing of Credit and Company Information approved by the Vice- presidency of corporate finance of ECOPETROL . 3 Managers and Directors shall have 10 calendar days to make a decision. Reviews of lines of credit shall be approved for up to 12 months. + + + +ECOPETROL MANAGEMENT GUIDELINES FOR RECEIVABLES SERVICES ECP-UTE-G-008 + + 8 + + + + + + + + Table 1 INTERNAL RISK RATING FOR CLIENTS OF SERVICES OF ECOPETROL 4 + + + +4 Comments and considerations included by the risk rating agency in its report about a company are understood as already included in the rating given by the risk rating agency, in that sense the same shall not affect again either in a positive or negative manner the rating issued and shall not be taken into account in the analysis conducted by Management at the time of considering, approving or rejecting credit applications. 5 New clients with rating risks equivalent to superior level (1) and without purchasing records with ECOPETROL may be considered as clients of confidence with previous approval from the vice president of the Business Unit providing the service and the line of credit shall be established by said officer. + + + +ECOPETROL MANAGEMENT GUIDELINES FOR RECEIVABLES SERVICES ECP-UTE-G-008 + +Rating Definition Description Equivalence (Credit Risk in the Short Term 1 Superior Wide and strong capacity to meet commitments. Minimum risk. May be defined as a client of trust. Sufficient requesting a promissory note with letter of instructions5. For larger lines of credit the respective manager and/ or director may increase the lines up to 100% of the lines approved with previous authorization from the corresponding vice-president of the Business Unit providing the service. The line of credit conservative and liberal recommended by risk rating agencies shall be understood as an indication and does not oblige ECOPETROL with the client, or the respective manager to use this as a ceiling for the approval of the line of credit at the time of defining a line of credit for a client of confidence. + +Duff / Phelps (D&P): DP to DP1 BRC Investors Services (BRC): BRC 1 to BRC 1 Byington: 1 to 2 BPR Asociados (BPR): A (1.00-1.50) Bureau Veritas: 1 + + 2 Average Superior Sufficient capacity to fulfill commitments. Low risk. D&P: DP1- BRC: BRC 2 Byington: 2.1 to 2.9 BPR: B(1.51-2.00) Bureau Veritas:2 + + 9 + + + + + + + + + + Clients whose internal rating is level 1 (superior) according to the table above, in order to have a line of credit shall not offer acceptable guarantees issued by third parties in favor of ECOPETROL as indicated in Table 1. Instead, they shall subscribe a promissory note with a letter of instructions as support for their payment obligations. In any case, it is understood that clients of confidence shall only be limited to a number of recognized companies. + +6 Byington (N) corresponds to companies recently created. + + + +ECOPETROL MANAGEMENT GUIDELINES FOR RECEIVABLES SERVICES ECP-UTE-G-008 + + 3 Average Acceptable capacity to fulfill commitments. Medium risk. D&P: DP2 BRC: BRC 2 Byington: 3 to 3.4 Byington (N)6: 3 to 3.4 BPR: C(2.01-2.50) Bureau Veritas:3 4 Average Inferior Capacity to fulfill commitments; uncertain performance. High risk. D&P: DP3 BRC: BRC 3 Byington: 3.5 to 4.0 Byington (N): 2.1 to 3.0 BPR: D(2.51-2.75) Bureau Veritas:4 5 Low Quality Uncertainty or inability to fulfill commitments. High risk. D&P: DP4 or below BRC: BRC 4 or below Byington: 4.1 to 5.0 Byington (N): 3.1 to 4.5 BPR: D(2.76-3.00) Bureau Veritas:5 + + 10 + + + + + + + + Those clients offering acceptable guarantees to support their purchases, shall not require a risk rating from any risk rating agency acknowledged and accept it by ECOPETROL because the risk is assumed by the guarantor. The contents and the type of guarantee shall be fully adjusted to the minimum characteristics required by ECOPETROL, and the same shall be issued by entities accepted by the company through the listing of acceptable companies for such purpose issued by the vice-presidency of corporate finance. Clients classified in level 5 shall be those without a rating or analysis by specialized agencies in credit analysis. Those clients shall require acceptable guarantees contained in the guidelines for administration of acceptable guarantees ECP-UTE-G-006. ECOPETROL reserves the right not to sell through credit to any client, regardless of whether or not it is in capacity to provide guarantees or securities, and therefore the amount of the purchases shall be a cash or in advance. A client classified as Superior may make purchases in cash and/or complement the line of credit awarded with acceptable guarantees in favor of ECOPETROL. For guarantees in US dollars, in case the guarantee is made effective, the payment shall be at the representative market exchange rate (TRM) valid on the day of payment of the guarantee. 3.4.3 Officers Authorized for the Analysis and Consideration of Lines of Credit. The officer appointed by the Business Unit providing the service shall be in contact and permanent interaction with the client, shall determine the credit quality of the same through the report from the risk rating company, shall process the application and review from time to time the lines of credit, and shall provide support to the vice-presidency of corporate finance in the handling of Receivables. Upon classification of the client in the internal rating table of ECOPETROL, and if and any station of the maximum they were a specific client. is no information that prevents the processing of the application or that would imply any risk in the performance of the obligations that the client may undertake with ECOPETROL, the approval of the client shall be established by filling out the form, Application for a Line of Credit contained in Form ECP-UTE-F-005 Application for a Line of Credit for Services. Each manager and/or director shall have the responsibility to consider, approve or reject in a justified manner, all credit applications filled out by the clients, which should be recorded in the forms defined for such purpose, or otherwise in the electronic mails which shall be equally valid as the other forms and shall be printed and delivered to the central archives of ECOPETROL to the file opened for each client. + + + +ECOPETROL MANAGEMENT GUIDELINES FOR RECEIVABLES SERVICES ECP-UTE-G-008 + + 11 + + + + + + + + The lines of credit recommended by the risk rating company and/or approved are strictly of internal character and an indication of the maximum debt of a specific client. 3.4.4 Amounts above the Ceilings Approved in Lines of Credit When a client has reached the maximum debt approved, within the term of the validity of the lines of credit and temporality requires7 from additional services not exceeding beyond 100% the amount of the line of credit, the respective manager and/or director may approve at his sole discretion this higher debt, provided however, that the same are covered with an extension of acceptable guarantees originally issued to have access to the credit facility. + + + + + + + + + + + + + + + +7 For a maximum period of three months, renewable with previous approval from the vice president of the corresponding Business area 8 Enforced and executed at the latest 30 days after default, and only in the event of a pledge on CDs. + + + +ECOPETROL MANAGEMENT GUIDELINES FOR RECEIVABLES SERVICES ECP-UTE-G-008 + +3.5 Acceptable Guarantees. + + · ECOPETROL shall not make any sales on credit to clients not providing acceptable guarantees except for those clients with internal rating Superior (clients of confidence) or who have been considered in numeral 3.4.2 of this guideline. + + · For the provision of services only guarantees offering endorsement of payment by financial entities will (financial guarantees) shall only be accepted, or those representing securities or instruments that guarantee immediate liquidity when realized.8 + + · The coverage of the guarantees or the amount of financial instruments for payment must be sufficient to cover eventual increases in the price of services. + + · Guarantees in foreign currencies may be accepted (dollars of the United States of America or any other currency) pursuant to the current foreign exchange regulations. If guarantees are in a foreign currency are made effective, they shall be registered in the central bank in order to convert them in the equivalent of the market representative exchange rate from peso with respect to the dollar on the day of payment of the guarantee. Guarantees in currencies different than the US dollar, in order to be accepted, shall require approval from the vice presidency of corporate finance. + + · Only guarantees established in the guide for administration of acceptable guarantees ECP-UTE-G-006 shall be acceptable. + + · Guarantees received by the respective management offices shall be previously reviewed and approved by the legal office advising on the same. The standardization and updating of the respective forms shall be under the responsibility of the legal vice presidency. + + 12 + + + + + + + + + + + + To the extent that the updating of the rating provided by the risk rating agencies or by agencies specialized in credit implies a higher risk for ECOPETROL , or if default in the payments by clients occur, the conditions of the relation with the clients shall be reviewed, in particular, those having to do with the requirement or improvement of the specific guarantees. The same exercise shall be conducted through the vice presidency of corporate finance with financial entities guaranteeing obligations in favor of ECOPETROL . Particular attention is given to those clients classified in categories of the internal rating table not requiring any specific guarantee and the superior clients. Those clients shall be monitored through the updating of the ratings given by specialized agencies in credit or risk rating agencies. The period for obtaining such reports shall be a least annually. Based on the results of the updated information, the vice presidency of corporate finance shall adjust the internal rating of the client and shall review the payment conditions originally approved. The updating of the ratings for clients shall not be conducted before the month of March each year because the financial statements of the previous year have not yet been disclosed before the respective entities of vigilance and control, and from which official data for studies are taken. Therefore, if the study mentioned falls during the first three months of the year, the current rating shall be applied until the last day of the month of March of the current year. Notwithstanding the foregoing, if the promissory note and that was the letter of instructions has completed one year, said documents must be updated for this period and the subsequent ratification or denial of the credit granted by ECOPETROL. + + In the commercialization of services, ECOPETROL must observe the norms, mercantile and credit customs, collect Receivables in a timely manner, assess any Receivables in default from time to time, and record in its financial statements any provisions and write-offs as they may apply, pursuant to the provisions in the document hereof. + + + +ECOPETROL MANAGEMENT GUIDELINES FOR RECEIVABLES SERVICES ECP-UTE-G-008 + + · Acceptance of any other type of guarantee established in the Contracting Manual shall require approval from the respective manager and/or director with previous approval from the legal vice presidency. + +3.6 Follow-up. + +3.7 Managing the Relation with the Client that Buys on Credit. + + 13 + + + + + + + + Each sale of services, depending on each specific case, must be instrumented in writing either through a buy-sell contract, a supply contract, or commercial offer, or registered in an invoice or an equivalent in document. Each invoice shall detail the value of services and taxes, pursuant to the law and applicable regulations. Invoicing prices are those current prices on the date of sale or provision of services and may change without previous is notice. Commercial invoices shall be issued in two original counterparts of the same content with writ of execution9. One of them for the client and the other duly signed by the client in signal of acceptance destined to ECOPETROL. This copy shall remain with the appropriate custody in the files of ECOPETROL for collection and eventual discount of the instrument in the secondary market. + + These correspond to the policies already designed for each Business Unit providing the service regarding sale prices and terms, which must be in accordance with those set out by the presidency of the company and the manual of delegations - MAD. + + In those cases in which there may be claims by clients due to differences in price and/or terms duly justified, under the judgment of the Business Units in charge of handling the client it must be the determined the viability of the claim and adopt the pertinent decision in a reasonable period of time in accordance with the complexity of the discrepancy. To resolve any discrepancies, each of the parties shall deliver to the other, a copy of the documents supporting the invoice and the claim. The review process of any claims shall be in accordance with the provisions in each contract for the provision of services entered into between the parties. Any disagreement regarding any invoice does not exempt the buyer from its obligations to pay the non-disputed portion of said invoice or any other invoice. If the claim is resolved favor of ECOPETROL, having the client omitted payments on services rendered and invoiced by ECOPETROL, the buyer is obliged to pay a sanction for default on the amounts not paid within the term established, at the highest late interest rate established by the Superintendence of Finance of Colombia or whoever replaces it. If the buyer has made payments in excess, ECOPETROL shall credit the same to the next due date or make the corresponding reimbursement after clarification of the amount under discrepancy. + +9 A carbon copy being valid + + + +ECOPETROL MANAGEMENT GUIDELINES FOR RECEIVABLES SERVICES ECP-UTE-G-008 + +3.7.1 Sale Prices and Terms + +3.7.2 Claims and Discrepancies in Invoicing + + 14 + + + + + + + + + + The Business Unit providing the service with the support of the Coordination for Receivables and Collections, shall control any payments for Receivables as well as the actions are collections derived from the sale or provision of services and will be responsible for collecting any late interests (as they may apply) and any verification of accounts with the client. + + With previous approval from the legal area and after the guarantees have been reviewed and accepted by the commercialization areas, they shall be delivered for custody to the Coordination of Receivables. The custody and collection of guarantees is responsibility of the ordination of Receivables and collections, and all security measures shall be taken to keep guarantees in a safe place. Before a guarantee is received for custody, the Coordination of Receivables shalt make sure that it has the approval from the legal area and the dates of validity. In addition, the Coordination for Receivables shall be responsible for the integrity of the documents and shall adopt measures to prevent access to places established for custody to non-authorized personnel. In the event that a client fails to perform the requirements from Receivables, the collection of the guarantee shall be made within the terms established for such purpose and each of the reported to the respective Business Unit providing the service to discontinue the provision of such services. In those cases in which it applies, the guarantees once they have been reviewed and approved by the legal area assigned to the Business Units providing the service and accepted by the respective management office, they shall be delivered for custody to each of the managers and/or directors through a memorandum, to the Coordination of Receivables and collections from the Treasury Unit responsible for the corresponding record in SAP and of its collection if necessary. ECOPETROL through the Business Unit providing the service shall immunity suspend any credit or cash sales, to clients to whom the execution of guarantees has started until a certificate of good standing is received from the Coordination are Receivables and a new guarantee acceptable to ECOPETROL is presented. The Coordination of Receivables and collections shall adopt all security measures to keep the guarantees in a safe place. The Coordination of Receivables and collections of the Treasury Unit shall update and activate in an individual manner in SAP each guarantee for the corresponding area of credit control; indicating "the limit authorized" which becomes a rotatory limit in pesos authorized for the provision of services and establishing that period of time in which the limit of credit shall be covered with the guarantee, taking into account the term of the credit given to the client for the provision of the service (5, 15 or 30 days). + + + +ECOPETROL MANAGEMENT GUIDELINES FOR RECEIVABLES SERVICES ECP-UTE-G-008 + +3.8 Collection of Receivables + +3.9 Guarantees Delivery and Custody + + 15 + + + + + + + + + + The payment of Receivables by clients after the due date generates a late interest as a sanction. Late interests are a applicable without exception to all kinds are Receivables handled by ECOPETROL. Late interests shall be calculated on any overdue balances and in proportion to the time lapsed from the date in which the payment should have been made until that date in which it is actually made. The record of these interests shall be under the responsibility of the Coordination of Receivables and collections; control and collection activities shall be the responsibility of the Business Unit providing the service, which may check these charges through consultations to the account statement of the client in the SAP integrated information system. Any payment made by a client in accordance with the provisions in the Colombian Civil Code in its article 1653, except as otherwise agreed, when principal and interests are owed, payment shall apply first to interests and then to principal. Late interests are not forgivable, the General Controller of the country has issued several opinions denying this prerogative based on the constitutional principle by which public servants can only do whatever the law and the Constitution allows. Currently there is no regulation that allows cancellation of interests by public entities such as ECOPETROL. ECOPETROL in each of its invoices shall indicate that the interest rate to be charged as late interest for the payment is the highest monthly rate allowed by the Superintendence of Finance or whoever replaces it (the Treasury Unit shall communicate the late interest rate to be applied for each period). For invoices or bills issued in US dollars an interest rate in dollars in equivalent to the Prime rate +2 percentage points shall be applied (Prime +2%). The resulting amounts shall be converted into pesos at the market representative exchange rate (TRM) valid on the date of payment. If the due date of the invoice falls on Saturday, Sunday or in a holiday, the payment may be made on the following Business day and said payment shall not generate any late interest. If a client pays after the first Business day, the calculation for late interest shall be made from the due date of the invoice The charging of interests shall be made through a bill addressed to the client, which shall contain a Receivables statement on which interests are calculated. + + + +ECOPETROL MANAGEMENT GUIDELINES FOR RECEIVABLES SERVICES ECP-UTE-G-008 + +3.10 Late Interests + + 16 + + + + + + + + + + When an invoice or bill is not collected within the due dates or payment has been made partially, the collection action shall start immediately by the Business Units providing the service and the Coordination of Receivables and collections. The Coordination of Receivables and collections shall proceed to make effective the sources of payment and guarantees, in case of clients covered by financial collateral who have not made full or partial payments of all their obligations represented in the sale invoices within the due dates in accordance with the terms established in said invoices, with the support of their respective Business Unit and legal counsel. For such purposes, the loss shall be reported to the insurance company (in case there is a policy covering the default), the documentation required shall be presented before the banking entities (bank guarantees, bank acceptances or letters of credit), the client shall be contacted in the case of a promissory note and in the case of guarantees, they shall be made effective before the corresponding entity in order to collect any overdue amounts together with late interests. + + If a client fails to make a payment within the normal process of collection and all instances have been used before going to court without any positive results, in a peremptory term of 90 days, the Business Units providing the service must request to the respective legal advising Unit to carry out collection actions pursuant to the provisions in the applicable regulations. For such purpose, the respective Business must prepare and deliver the following documentation to the legal area: + + + + + + + + + + In the event that under special circumstances a client is late in meeting its obligations with ECOPETROL and does not have immediate payment capacity, upon request, the Business Units providing the service may request to the Head of the Treasury Unit of ECOPETROL, attaching the commercial and legal analysis of the client, an authorization for the extension of the term of the credit, and this financing shall not cause an impairment of the guarantee in the force in favor of ECOPETROL. + + + +ECOPETROL MANAGEMENT GUIDELINES FOR RECEIVABLES SERVICES ECP-UTE-G-008 + +3.11 Collections Management + +3.11.1 Starting Legal Actions to Collect Overdue Balances + + - A request memorandum indicating actions undertaken by the Business Unit providing the service and the Coordination of Receivables and collections to obtain recovery of money owed. + + - Documents supporting the credit in favor of ECOPETROL (invoices or promissory notes). + + - Copies of all correspondence held with the client. + + - Copy of the contract or certificate for the provision of services. + +3.11.2 Modifications in the Long Term. + + 17 + + + + + + + + Without prejudice of the foregoing, ECOPETROL reserves the right to request an acceptable guarantee that allows covering a higher risk for the extension of the term for the payment. The interest rate for the refinancing term shall be in accordance with the conditions of the financial market. Clients under legal proceedings to recover any amounts in favor of the company may be eligible for refinancing when lacking any property or liquid guarantees executable in favor of ECOPETROL. In the case of individual agreements, the interest rate for the refinancing period must be associated with the opportunity cost of ECOPETROL as indicated by the Treasury Unit of the vice presidency of corporate finance. The amortization of the debt in default shall be applied first, to sanctions and late interests, second, to current interests and third, to the principal. The mentioned option for refinancing if adopted by ECOPETROL, must offer better expected results than those continuing under the legal proceeding or execution of guarantees. Any refinancing must be subject to the approval of the Head of the Treasury Unit with the previous commercial, financial and legal analysis. + + ECOPETROL may participate in payment agreements of clients with their creditors, under modalities aimed to ensure the maximum collection of their Receivables in terms of present value as indicated hereunder: Restructuring Agreement under Law 550 or reorganization agreements under Law 1116 of 2006 (company insolvency). Regarding the guarantees in the proceedings to prevent bankruptcy, creditors still governed under Law 550/1999 (that is, territorial entities, decentralized entities and state universities at the national or territorial level) have the power to inform the promoter within the following ten (10) days after starting the negotiation, if the decision is only to make the guarantee effective without waving their right to obtain from the debtor the payment of the obligation under default pursuant to the paragraph of article 14 of said Law. In those cases, ECOPETROL through the vice presidency of corporate finance and the respective manager and/or director shall inform the Promoter if the guarantee will be made effective. Furthermore, Law 1116 of 2006 did not include the provision of the foregoing paragraph, instead, in article 43 the Law regulated the issue of real estate guarantees within the process of insolvency, and therefore the power to make them effective was suspended, save by authorization of all creditors to wave said limitation. Said decision shall be made with an absolute majority and included within the Agreement. Thus, the creditor may present in the proceedings, together with its debt, the guarantee covering it and a request to make it effective, or else wait the development of the proceeding, and if terminated by breaching, the enforceability will be then "reactivated". + + + +ECOPETROL MANAGEMENT GUIDELINES FOR RECEIVABLES SERVICES ECP-UTE-G-008 + +3.12 Restructuring by General Agreements. + + 18 + + + + + + + + Provision of services to clients with whom global payment agreements have been executed or under Law 550/99 or Law 1116/06 shall only be made under the modality of payment in advance. Interests in favor of ECOPETROL derived from individual refinancing processes or restructurings cannot be cancelled. Presently there are no regulations that allow the cancellation of interests by public entities such as ECOPETROL. All refinancing shall be subject to approval by the respective manager and/or director with previous approval from the vice presidency of corporate finance and after a commercial, financial and legal analysis; and evidence of economic support. + + The calculation for the provision shall correspond to a technical evaluation (individual study based on the factors previously described) that will allow to determine the contingency of loss or risk for non-collecting the right. Based on this the recording of an individual provision shall be made. Accounting Provision: The Coordination of Receivables and collections together with the officers responsible for the management the Business Units providing this service shall conduct an individual analysis of Receivables in default to determine which accounts are considered un- collectible, and based on that, make the recording of an individual provision. To do this, the manager and/or director of the Business Unit of providing the service must submit a memorandum requesting the recording of the corresponding provision. Fiscal Provision: For purposes of this provision, Receivables are classified by seniority and are calculated according to the percentages set out by tax regulations. Any of the two methods indicated hereunder may be applied as a deduction for the provision: + + + +10 Defined according to the contingency of loss of the rights to be collected as a result of the degree of seniority, default, prescription, and collection action through legal means; the provision includes the amount estimated as uncollectable. + + + +ECOPETROL MANAGEMENT GUIDELINES FOR RECEIVABLES SERVICES ECP-UTE-G-008 + +3.13 Provision for Accounts Receivable10 + + · Individual: four debts between 12 and 24 months (33%), between 24 and 36 months (66%) and over 36 months (99%). · General: the corresponding percentages are applied depending on the seniority of their Receivables. (5% 3-6 months; 10% 6-12 months; 15% over 12 months). + + 19 + + + + + + + + + + Accounts Receivable classified as lost or uncollectible, and upon which all procedures for collection have been conducted and with a provision of 100% are subject to a request for a write-off pursuant to the provisions in the MAD. Accounts Receivable classified as lost or uncollectible, whose value does not exceed 150 (SMLMV) (current monthly minimum legal wage) and upon which all procedures for collection have been conducted and with a provision of 100% are subject to a request for a write-off by the Coordinator of Records and Analysis of Accounts Payable if their value is between 1 and 70 monthly minimum legal wages, and by the Head of the Unit of Accounting and Tax Information if their value is between 71 and 150 monthly minimum legal wages upon exhaustion of all legal and other instances by the Business Unit generating it and the legal vice presidency. When Accounts Receivables classified as lost or uncollectible exceed 180 monthly minimum wages, its write off must be authorized by the Board of Directors upon exhaustion of instances such as: current collection, execution of guarantees and previous legal collection. It is understood as debt that is lost and without any value, all that debt whose collection is not possible to make it effective due to insolvency of debtors and guarantors as a result of lack of property guarantees or by any other cause that allows them to be considered as currently lost according to commercial practices. This definition includes those accounts receivable of less value whose collection procedures is significantly more onerous than the write-off of said debt. Version: 01 Date: 10/09/2010 Reviewed by: Jose David Roldan Professional Receivables and Collections Approved by: Elkin Leonardo Suarez Coordinator Receivables and Collections + + + +ECOPETROL MANAGEMENT GUIDELINES FOR RECEIVABLES SERVICES ECP-UTE-G-008 + +3.14 Receivables Write-offs + + 20 + + + + + + ANNEX 3 INSURANCE ONLY POLICY OF PERFORMANCE FOR STATE CONTRACTS IN FAVOR OF ECOPETROL S A + + + + + + + + + + INSURANCE ONLY POLICY OF PERFORMANCE FOR STATE CONTRACTS IN FAVOR OF ECOPETROL S A Front Page + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + ANY DEFAULT IN PAYMENT OF THE POLICY PREMIUM, THE CERTIFICATES OR ANNEXES ISSUED BASED ON SAID POLICY, SHALL NOT GENERATE THE AUTOMATIC TERMINATION OF THE CONTRACT, WITHOUT PREJUDICE OF THE RIGHT UNDER THE NAME OF THE INSURER TO REQUEST PAYMENT OF THE PREMIUM AND ANY EXPENSES CAUSED AS A RESULT OF THE ISSUANCE OF THE CONTRACT, ALL THESE PURSUANT TO THE PROVISIONS IN THE FINAL PARAGRAPH OF NUMERAL 19 OF ARTICLE 25 OF LAW 80, 1993. + + + + 1. CITY AND DATE OF ISSUANCE + + 2. POLICY NUMBER + + 3. INTERMEDIARY + + 4. INSURER + + a) name + + b) tax ID + + 5. POLICYHOLDER + + a) name + + b) tax ID + + c) address + + 6. ENTITY INSURED (ECOPETROL S A) + + a) name + + b) tax ID + + c) address + + 7. BENEFICIARY ENTITY (ECOPETROL S A) + + 8. COVERAGE GRANTED + + 9. INSURED LIMITS GRANTED FOR EACH COVERAGE + + 10. VALIDITY FOR EACH OF THE COVERAGE GRANTED + + a) From at 00:00 hours + + b) Until at 00:00 hours + + c) Days + + 11. IDENTIFICATION AND PURPOSE OF THE CONTRACT GUARANTEED BY THE INSURANCE + + 12. PARTICULAR CONDITIONS OF THE INSURANCE + + 13. PREMIUM FOR EACH OF THE COVERAGE GRANTED + + 14. TOTAL PREMIUM FOR ALL COVERAGE CONTRACTED + + 15. VALUE ADDED TAX + + 16. FINAL PREMIUM TO BE PAID BY THE BONDED POLICYHOLDER AND DATE OF PAYMENT + + 17. ADDRESS FOR NOTIFICATION AND COLLECTIONS + + 18. CITY + + 19. ANNEXES + + 20. AUTHORIZED SIGNATURE + + 2 + + + + + + INSURANCE ONLY POLICY OF PERFORMANCE FOR STATE CONTRACTS IN FAVOR OF ECOPETROL S A INDEX SECTION I: COVERAGE + + + + + + + + + + + + + + + + + + + + + + SECTION II: EXCLUSIONS + + + + + + + + SECTION III: GENERAL CONDITIONS + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + 1. COVERAGE FOR SERIOUSNESS OF THE BID + + 2. COVERAGE FOR ADVANCEMENT + + 3. COVERAGE FOR PREPAYMENT + + 4. COVERAGE FOR PERFORMANCE OF THE CONTRACT + + 5. COVERAGE FOR THE PAYMENT OF SALARIES, FRINGE BENEFITS AND INDEMNIFICATION + + 6. COVERAGE FOR STABILITY OF WORKS + + 7. COVERAGE FOR QUALITY OF EQUIPMENT PROVIDED + + 8. COVERAGE FOR PROPER OPERATION OF EQUIPMENT + + 9. COVERAGE FOR QUALITY OF SERVICE + + 10. COVERAGE FOR THE PROVISION OF SPARE PARTS AND ACCESSORIES + + 11. OTHER COVERAGE + + 1. FORCE MAJEURE OR ACTS OF NATURE + + 2. AMENDMENTS TO THE ORIGINAL CONTRACT + + 3. INJURIES TO PERSONS OR DAMAGE TO PROPERTY + + 4. IMPAIRMENT BY THE PASSING OF TIME + + 1. TERM + + 2. LOSS CLAIM + + 2.1 IN THE EVENT OF EXPIRATION + + 2.2 TO MAKE EFFECTIVE THE PAYMENT OF PENALTY OR THE PENALTY CLAUSE + + 2.3 IN ALL OTHER EVENTS + + 3. PROVING THE AMOUNT TO BE INDEMNIFIED + + 4. PAYMENT OF THE LOSS + + 5. AMOUNT INSURED + + 6. COMPENSATION OF OBLIGATIONS + + 7. SUBROGATION + + 8. ASSIGNMENT OF THE CONTRACT + + 9. COEXISTING INSURANCE + + 10. NO EXPIRATION BY FAILURE OF PAYMENT OF THE PREMIUM AND IRREVOCABILITY + + 11. CONDUCT OF THE POLICYHOLDER + + 12. NOTIFICATION AND RECOURSES + + 13. AMENDMENTS + + 14. GUARANTEE CALL + + 15. VIGILANCE + + 16. CO-INSURANCE + + + + + + + + + + + + + + + + + + 17. BANKRUPTCY PROCEEDINGS + + 18. TIME BAR + + 19. INCOMPATIBLE CLAUSES + + 20. SETTLEMENT OF CONFLICTS + + 21. DOMICILE + + 3 + + + + + + INSURANCE ONLY POLICY OF PERFORMANCE FOR STATE CONTRACTS IN FAVOR OF ECOPETROL S A _____________________, A COMPANY LEGALLY ESTABLISHED IN COLOMBIA AND DULY AUTHORIZED BY SUPERINTENDENCE OF FINANCE OF COLOMBIA TO OPERATE IN THE COUNTRY, WHICH, HEREINAFTER SHALL BE CALLED THE INSURER, GRANTS IN FAVOR OF ECOPETROL S A, HEREINAFTER CALLED ECOPETROL, THE INSURED AND BENEFICIARY ENTITY, THE COVERAGE SPECIFIED IN THE FRONT PAGE OF THIS POLICY SUBJECT IN ITS SCOPE AND CONTENT TO THE GENERAL AND PARTICULAR CONDITIONS THERETO WITHOUT EXCEEDING THE CORRESPONDING INSURED AMOUNT, PURSUANT TO THE PROVISIONS IN ARTICLE 1079 OF THE COLOMBIAN CODE OF COMMERCE ACCORDING TO THE DEFINITIONS AND SCOPE OF THE RESPECTIVE COVERAGE DESCRIBED HEREUNDER: SECTION I: COVERAGE + + BY MEANS OF THIS COVERAGE ECOPETROL IS PROTECTED AGAINST ANY EQUITY DAMAGE CAUSED BY THE BIDDER AS THE RESULT OF ANY BREACHING ONCE THE CONTRACT HAS BEEN AWARDED AND FROM ANY OF THE OBLIGATIONS AND NECESSARY REQUIREMENTS FOR THE EXECUTION, PERFECTION AND A COMMENCEMENT OF THE SAME, AND MORE SPECIFICALLY AS A RESULT OF ANY DEFAULT ON THE OBLIGATIONS TO ENTERED INTO AND TO PERFECT THE CONTRACT UNDER THE TERMS IN WHICH THE BID HAS BEEN PRESENTED AND PROVIDE IN THE APPROPRIATE MANNER ANY PERFORMANCE POLICY OR BANK COLLATERAL REQUIRED TO COMPLY WITH THE SAME. ALL OF THIS, PURSUANT TO THE PARAMETERS SET FORTH IN THE SELECTION PROCESS AND ALL OTHER CONDITIONS REQUIRED BY ECOPETROL. THE AMOUNT INSURED ESTABLISHED FOR THE COVERAGE OF SERIOUSNESS OF THE BID HAS PUNITIVE OR PENALTY IMPLICATIONS AND CONSTITUTES AN ADVANCE ASSESSMENT OF DAMAGES. + + THIS COVERAGE GUARANTEES THE REIMBURSEMENT TO ECOPETROL OF THE FUNDS AND GOODS GIVEN TO THE CONTRACTOR AS AN ADVANCE FOR THE EXECUTION OF THE CONTRACT IF SAID CONTRACTOR HAS MADE INAPPROPRIATE USE OF SAID FUNDS. IT SHALL BE UNDERSTOOD THAT THERE HAS BEEN INAPPROPRIATE USE OF THE FUNDS OR GOODS GIVEN IN ADVANCE, IN THE EVENT THAT SUCH FUNDS OR GOODS HAVE NOT BEEN USED FOR THE PURPOSE FOR WHICH THEY WERE GIVEN AT THE BEGINNING OR DURING THE DEVELOPMENT OF THE EXECUTION OF THE CONTRACT WHICH INCLUDES NO-REIMBURSEMENT, AS IT MAY APPLY. THIS COVERAGE DOES NOT EXTEND TO THE USE OF FUNDS GIVEN AT PREPAYMENT TO THE CONTRACTOR. THIS RISK SHALL ALSO BE COVERED IN THE EVENTS AS THEY MAY APPLY AS DEFINED HEREUNDER. + + + + 1. COVERAGE FOR SERIOUSNESS OF THE BID + + 2. COVERAGE FOR ADVANCEMENT + + 4 + + + + + + INSURANCE ONLY POLICY OF PERFORMANCE FOR STATE CONTRACTS IN FAVOR OF ECOPETROL S A + + THIS COVERAGE GUARANTEES THE REIMBURSEMENT TO ECOPETROL BY THE CONTRACTOR OF ANY BALANCE CORRESPONDING TO THE DIFFERENCE BETWEEN THE TOTAL AMOUNT RECEIVED BY THE CONTRACTOR AS PREPAYMENT AND ANY AMOUNT CORRESPONDING TO THE PORTION PERFORMED OF THE CONTRACT. THEREFORE, IF THE CONTRACT IS PARTIALLY PERFORMED, ANY REIMBURSEMENT AS IT MAY APPLY SHALL BE CALCULATED DEDUCTING FROM THE FULL AMOUNT GIVEN BY ECOPETROL TO THE CONTRACTOR AS THE PREPAYMENT, THE AMOUNT CORRESPONDING TO THE REMUNERATION OR PAYMENT OF THE PERFORMED PORTION OF THE CONTRACT. + + THIS COVERAGE PROTECTS ECOPETROL AGAINST ANY EQUITY DAMAGE SUCH AS GENERAL DAMAGE AND LOSS OF PROFITS RESULTING FROM ANY BREACHING ATTRIBUTABLE TO THE CONTRACTOR ON ANY OF THE OBLIGATIONS ARISING FROM THE GUARANTEED CONTRACT. THIS COVERAGE COMPRISES ANY FINES AND THE AMOUNT OF THE PENALTY CLAUSE IF ENFORCED. THE TOTAL INDEMNITY SHALL NOT EXCEED IN ANY CASE THE AMOUNT INSURED SET FORTH FOR SAID PURPOSE. + + AS PROVIDED IN ARTICLE 34 OF THE COLOMBIAN CODE OF LABOR, THIS COVERAGE PROTECTS ECOPETROL AGAINST THE RISK OF DEFAULT BY THE CONTRACTOR ON ANY LABOR OBLIGATIONS ACQUIRED BY SAID CONTRACTOR WITH PERSONNEL USED IN THE EXECUTION OF THE CONTRACT BEING THE PURPOSE OF COVERAGE UNDER THIS POLICY. THE INSURANCE COMPANY SHALL MAKE THE PAYMENTS TO THE EXTENT THAT EACH OF THE WORKERS DEMONSTRATES THEIR RIGHTS AND THE AMOUNT INSURED SHALL BE DECREASING TO THE EXTENT THAT PAYMENTS ARE BEING MADE UNTIL COMPLETION, IF SUCH IS THE CASE. + + THIS COVERAGE PROTECTS ECOPETROL AGAINST ANY EQUITY DAMAGE INCLUDING LOSS OF PROFITS RESULTING FROM ANY IMPAIRMENT THAT, UNDER NORMAL CONDITIONS OF USE, SUFFERS ANY OF THE GOODS BUILT OR MANUFACTURED BEING THE PURPOSE OF THIS CONTRACT, FOR THE ACTIONS OR OMISSIONS ATTRIBUTABLE TO THE CONTRACTOR DERIVED FROM DEFICIENCIES IN THE EXECUTION AND COMPLIANCE WITH CONTRACT AND DETECTED AFTER THE TERMINATION AND DELIVERY OF THE SAME. THIS COVERAGE SHALL START TO BE IN FORCE AFTER THE ISSUANCE OF THE MINUTES OF THE DELIVERY OF WORKS DULY COMPLETED WITH THE RESPECTIVE RECORD OF RECEPTION AT SATISFACTION BY ECOPETROL. + + + + 3. COVERAGE FOR PREPAYMENT + + 4. COVERAGE FOR PERFORMANCE OF THE CONTRACT + + 5. COVERAGE FOR THE PAYMENT OF SALARIES, FRINGE BENEFITS AND INDEMNIFICATION + + 6. COVERAGE FOR STABILITY OF WORKS + + 5 + + + + + + INSURANCE ONLY POLICY OF PERFORMANCE FOR STATE CONTRACTS IN FAVOR OF ECOPETROL S A + + THIS COVERAGE PROTECTS ECOPETROL AGAINST ANY EQUITY DAMAGE INCLUDING LOSS OF PROFITS RESULTING FROM ANY IMPAIRMENT THAT, UNDER NORMAL CONDITIONS OF USE, SUFFERS ANY OF THE GOODS BEING THE PURPOSE OF THIS CONTRACT, FOR THE ACTIONS OR OMISSIONS ATTRIBUTABLE TO THE CONTRACTOR DERIVED FROM THE DEFICIENT QUALITY OF THE GOODS OR EQUIPMENT PROVIDED IN ACCORDANCE WITH THE TECHNICAL SPECIFICATIONS AGREED IN THE CONTRACT AND DETECTED AFTER THE TERMINATION AND DELIVERY OF THE SAME. THIS COVERAGE SHALL START TO BE IN FORCE AFTER THE ISSUANCE OF THE MINUTES OF THE DELIVERY OF THE EQUIPMENT PROVIDED DULY COMPLETED WITH THE RESPECTIVE RECORD OF RECEPTION AT SATISFACTION BY ECOPETROL. + + THIS COVERAGE PROTECTS ECOPETROL AGAINST ANY EQUITY DAMAGE INCLUDING LOSS OF PROFITS RESULTING FROM ANY DEFICIENCIES IN THE OPERATION THAT, UNDER NORMAL CONDITIONS OF USE, SUFFERS ANY OF THE EQUIPMENT PROVIDED TO INSTALLED IN THE DEVELOPMENT OF THE CONTRACT, FOR THE ACTIONS OR OMISSIONS ATTRIBUTABLE TO THE CONTRACTOR DERIVED FROM THE DEFICIENT QUANTITY OR IMPROPER INSTALLATION OF THE SAME IN ACCORDANCE WITH THE TECHNICAL SPECIFICATIONS AGREED IN THE CONTRACT AND DETECTED AFTER THE TERMINATION AND DELIVERY OF THE SAME. THIS COVERAGE SHALL START TO BE IN FORCE AFTER THE ISSUANCE OF THE MINUTES OF THE DELIVERY OR INSTALLATION OF THE EQUIPMENT PROVIDED WITH THE RESPECTIVE RECORD OF RECEPTION AT SATISFACTION BY ECOPETROL. + + THIS COVERAGE PROTECTS ECOPETROL AGAINST ANY EQUITY DAMAGE INCLUDING LOSS OF PROFITS ATTRIBUTABLE TO THE CONTRACTOR RESULTING FROM NONCOMPLIANCE OR DEFICIENT NON-COMPLIANCE WITH THE SPECIFICATIONS AND REQUIREMENTS OF THE SERVICE CONTRACTED BY ECOPETROL PURSUANT TO THE TERMS AND CONDITIONS DEFINED IN THE CONTRACT GUARANTEED AND IDENTIFIED IN THE PARTICULAR CONDITIONS OF THIS POLICY. THIS COVERAGE SHALL START TO BE IN FORCE AFTER THE ISSUANCE OF THE MINUTES OF THE DELIVERY OF THE SERVICE CONTRACTED WITH THE RESPECTIVE RECORD OF RECEPTION AT SATISFACTION BY ECOPETROL. + + THIS COVERAGE PROTECTS ECOPETROL AGAINST ANY EQUITY DAMAGE INCLUDING LOSS OF PROFITS ATTRIBUTABLE TO THE CONTRACTOR RESULTING FROM NONCOMPLIANCE WITH THE PROVISION OF SPARE PARTS AND ACCESSORIES PURSUANT TO THE STIPULATIONS IN THE CONTRACT. THIS COVERAGE SHALL START TO BE IN FORCE AFTER THE ISSUANCE OF THE MINUTES OF TERMINATION OF THE CONTRACT WITH THE RESPECTIVE RECORD OF RECEPTION AT SATISFACTION BY ECOPETROL. + + + + 7. COVERAGE FOR QUALITY OF EQUIPMENT PROVIDED + + 8. COVERAGE FOR PROPER OPERATION OF EQUIPMENT + + 9. COVERAGE FOR QUALITY OF SERVICE + + 10. COVERAGE FOR THE PROVISION OF SPARE PARTS AND ACCESSORIES + + 6 + + + + + + INSURANCE ONLY POLICY OF PERFORMANCE FOR STATE CONTRACTS IN FAVOR OF ECOPETROL S A + + THE INSURANCE COMPANY SHALL PROVIDE TO ECOPETROL ALL OTHER COVERAGE AS DETERMINED IN THE FRONT PAGE OR IN THE ANNEXES ISSUED TO THE POLICY HEREOF. PARAGRAPH; THE LISTED COVERAGE IS INDEPENDENT FROM ONE ANOTHER REGARDING THE COVERAGE PROVIDED AND THE AMOUNT INSURED. THEREFORE, THEY ARE MUTUALLY EXCLUSIVE AND NON-CUMULATIVE. SECTION II: EXCLUSIONS COVERAGE PROVIDED IN THE POLICY HEREOF SHALL NOT APPLY IN THE FOLLOWING CASES: + + IN THE EVENT OF FORCE MAJEURE, ACTS OF NATURE OR ANY OTHER LEGAL CAUSE OF EXEMPTION OF RESPONSIBILITY BY THE CONTRACTOR. + + ANY EQUITY DAMAGE GENERATED BY OR FROM BREACHING ATTRIBUTABLE TO THE CONTRACTOR AND RESULTING IN AMENDMENTS TO THE ORIGINAL CONTRACT, SAVE THERE HAS BEEN ACCEPTANCE OF THE SAME BY THE INSURANCE COMPANY WITH A WRITTEN RECORD. + + ANY INJURY CAUSED BY THE CONTRACTOR OR BY ITS WORKERS TO ECOPETROL'S PERSONNEL OR ANY THIRD PARTIES, OR ANY DAMAGE CAUSED TO ECOPETROL'S PROPERTY OR ANY THIRD PARTIES, OCCURRING DURING THE EXECUTION OF THE CONTRACT, OR THOSE DERIVED IN GENERAL FROM THE EXTRA-CONTRACTUAL CIVIL LIABILITY OF THE CONTRACTOR. + + THE IMPAIRMENT OR NORMAL DETERIORATION SUFFERED BY THE GOODS, PROPERTY OR WORKS CARRIED OUT AND COVERED BY THE POLICY, AS A CONSEQUENCE OF THE MERE PASSING OF TIME. SECTION III: GENERAL CONDITIONS + + The term of the coverage included in the policy hereof shall be recorded in the front page of the same or through annexes according to the nature of each of them. The term for the performance coverage under no circumstances shall be less than that term of execution and liquidation of the contract. The term may be extended by request from ECOPETROL or the contractor, if so stated. If the insurance company accepts the extension, it will issue the certificates and annexes recording said amendment subject to the payment of the corresponding premium. + + + + 11. OTHER COVERAGE + + 1. FORCE MAJEURE OR ACTS OF NATURE + + 2. AMENDMENTS TO THE ORIGINAL CONTRACT + + 3. INJURIES TO PERSONS OR DAMAGE TO PROPERTY + + 4. IMPAIRMENT BY THE PASSING OF TIME + + 1. TERM + + 7 + + + + + + INSURANCE ONLY POLICY OF PERFORMANCE FOR STATE CONTRACTS IN FAVOR OF ECOPETROL S A + + Pursuant to the provisions in article 1077 of the Colombian code of commerce, ECOPETROL shall demonstrate both the occurrence of the incident as well as the amount of the loss and shall correspond to the insurance company to demonstrate the facts or circumstances waving its responsibility. The occurrence of the loss may be accredited as follows: + + By means of an administrative action duly executed stating the expiration of the contract, which shall be notified both to the insurance company as well as the contractor, pursuant to the provisions of article 44 of the Colombian administrative code. + + By delivery to the insurance company of the decision made ordering the payment of a fine or the penalty clause in accordance with the terms and conditions of the respective contract being the purpose of the coverage. + + For all contracts entered into by ECOPETROL in all other events in which there is claim under this policy, by delivering to the insurance company all documents or evidence accrediting the occurrence of the loss and the amount of the damage being the purpose of the claim, pursuant to the provisions in article 1077 of the code of commerce. + + The amount of the loss may be proved, depending on the case: with the minutes of liquidation of the contract; with the administrative action in firm of the unilateral liquidation of the contract; with the decision duly justified claiming the payment of a fine or a penalty clause accompanied by the text of the contract stipulating the enforcement of the same, or by any other means that allows to prove the amount of the loss suffered as provided in article 1077 of the code of commerce. + + Pursuant to the provision in article 1110 of the code of commerce, the indemnity may be paid in cash, or by replacement, repair or reconstruction of the goods insured at the option of the insurance company. If the option is to indemnify with an amount in cash, pursuant to the indications in Article 1080 of the code commerce, this payment shall be made as follows: In the case of numeral 2.1 the payment shall be made within the following month after a written communication delivered by ECOPETROL to the insurance company, accompanied with the corresponding administrative act, duly executed declaring the expiration of the contract and the minutes of liquidation of the same or a resolution executed adopting its unilateral liquidation. + + + + 2. LOSS CLAIM + + 2.1 IN THE EVENT OF EXPIRATION + + 2.2 TO MAKE EFFECTIVE THE PAYMENT OF PENALTY OR THE PENALTY CLAUSE + + 2.3 IN ALL OTHER EVENTS + + 3. PROVING THE AMOUNT TO BE INDEMNIFIED + + 4. PAYMENT OF THE LOSS + + 8 + + + + + + INSURANCE ONLY POLICY OF PERFORMANCE FOR STATE CONTRACTS IN FAVOR OF ECOPETROL S A In the cases of numerals 2.2 and 2.3 payment shall be made within the following month after delivery of the written communication by ECOPETROL to the insurance company accompanied by the documents proving the occurrence of the loss and the amount of any damage. + + The insurance company's liability in connection with each coverage is limited to the value established as insured amount in the from page or the annexes issued based on the policy, and shall not exceed in any case said amount, pursuant to the provisions in article 1079 of the code of commerce. The amount of the insured value may be reestablished with the express previous acceptance from the insurance company when there is a formal request by ECOPETROL or the contractor, thus generating an additional premium charge which shall be previously paid by the policyholder. + + If ECOPETROL owes any money to the contractor by virtue of the contract guaranteed at the time of filing the judicial or extrajudicial claim of the loss, ECOPETROL shall compensate the amounts owed pursuant to the provisions in articles 1714 and the following, of the Colombian civil code, thus decreasing the amount of indemnity to be paid by the insurance company to ECOPETROL. + + By virtue of the indemnity payment pursuant to article 1096 of the code of commerce and according to article 203 of Decree 663 of 1993 (EOSF) Code of the Financial System, the insurance company subrogates up to the amount paid by said company on the rights ECOPETROL may be entitled against the contractor resulting from the occurrence of the loss. + + If by any breaching from the contractor, the insurance company resolves to continue with the execution of the contract and if ECOPETROL is in agreement, the contractor accepts hereafter the assignment of the contract in favor of the insurance company. + + Pursuant to the provisions in the code of commerce, in case of existence, at the time of the incident or loss, of any other insurance for the same coverage in connection with the contract thereto, the amount of the indemnity as it may apply shall be distributed between the insurers in proportion to the amounts of their respective insurance contracts without exceeding the amount insured as set forth in the contract. + + + + 5. AMOUNT INSURED + + 6. COMPENSATION OF OBLIGATIONS + + 7. SUBROGATION + + 8. ASSIGNMENT OF THE CONTRACT + + 9. COEXISTING INSURANCE + + 9 + + + + + + INSURANCE ONLY POLICY OF PERFORMANCE FOR STATE CONTRACTS IN FAVOR OF ECOPETROL S A + + The policy hereof shall not expire by failure of payment of the premium and said premium shall not be revocable in a unilateral manner neither by the insurance company nor by the contractor. + + It is stated for the record that ECOPETROL shall not accept any objections from the insurance company regarding the exceptions or defense resulting from the conduct of the policyholder, in particular those derived from any inaccuracy or reticence incurred by the contactor in the contracting of insurance or its omission regarding the duty to report the seriousness of a risk situation, or in general any other exceptions the insurance company may have against the contractor. + + ECOPETROL shall timely notify the insurance company on any administrative action issued in connection with the guaranteed contract, in particular those on expiration and unilateral termination of the contract, being the insurance company entitled to file any pertinent legal action against said administrative actions pursuant to the provisions in the Administrative Code. + + In those cases in which the amount of the contract or the term of the same are increased or decreased, or in general when the stipulations of the original contract are somehow amended according to the law by the parties, the respective amendment to the insurance as it may apply, must be previously accepted by the insurance company in order to make it effective. + + When the discussion regarding any breaching of the contract occurs in an arbitration process between ECOPETROL and the contractor, the insurance company is committed in advance to accept the guarantee call made inside said process. + + The insurance company is entitled to conduct vigilance on the contractor regarding the execution of the contract, and ECOPETROL shall provide the necessary cooperation. In those cases in which the contract has as a purpose any issues in connection with public order and the national security, ECOPETROL shall forbid or limit this power to the insurance company. ECOPETROL makes the commitment to carry out strict control on the development of the contract and the handling of the corresponding funds and goods within the legal provisions that said control confers. + + If there is any co-insurance as referred to in article 1095 of the code of commerce, the amount of the indemnity, as it may apply, shall be distributed between the insurers at a pro rate of the amounts of their respective insurance, without solidarity between participating insurers and without exceeding the amount insured under the insurance contract. + + + + 10. NO EXPIRATION BY FAILURE OF PAYMENT OF THE PREMIUM AND IRREVOCABILITY + + 11. CONDUCT OF THE POLICYHOLDER + + 12. NOTIFICATION AND RECOURSES + + 13. AMENDMENTS + + 14. GUARANTEE CALL + + 15. VIGILANCE + + 16. CO-INSURANCE + + 10 + + + + + + INSURANCE ONLY POLICY OF PERFORMANCE FOR STATE CONTRACTS IN FAVOR OF ECOPETROL S A + + ECOPETROL is obliged to protect its rights in any bankruptcy proceedings as set out in the Colombian legislation in which the contractor may be admitted, as it may do it if there was no guarantee as provided by the policy hereof, its application certificates and its coverage, giving notice to the insurance company of said conduct. Any failure to comply with this obligation would cause to ECOPETROL the consequences stipulated in article 1078 of the code of commerce. + + The time bar for the actions derived from the contract hereof shall be governed pursuant to article 1081 of the code of commerce as added or amended or any other special applicable law to the case. + + In case of any incongruity or differences between the general and particular conditions of the policy, the latter shall prevail. + + In case of any disputes or conflicts in connection with the interpretation, execution and enforcement of the policy hereof, the parties shall make their best effort to use the alternative settlement mechanisms as stated in Law 80 of 1993. + + Without prejudice of any proceedings stipulations, for all purposes regarding the contract hereof, the parties establish as a domicile the city of Bogota D C. + + + + 17. BANKRUPTCY PROCEEDINGS + + 18. TIME BAR + + 19. INCOMPATIBLE CLAUSES + + 20. SETTLEMENT OF CONFLICTS + + 21. DOMICILE + + 11 + + + + + + ANNEX 4 SAMPLE STAND-BY LETTER OF CREDIT + + + + + + + + + + SAMPLE STAND-BY LETTER OF CREDIT Letter of Credit No [________] Place and date of issuance: [_____________] Nominal Value: US$ [______________] Issuing Bank: [____________________] Beneficiary: Ecopetrol S A Applicant: [_______________________] By means of this document we are informing to you, Ecopetrol S A (the "Beneficiary") that, by request from [________________________] (the "Applicant"), a company created pursuant to the laws of [_______________________], through its branch duly established in Colombia, the Bank [_________________] (the "Bank") that we have issued in favor of Ecopetrol S A, a company incorporated pursuant to the laws of the Republic of Colombia and with tax ID [______] (the "Beneficiary"), this Stand-by Letter of Credit irrevocable at first request (the "Letter of Credit") to ensure payments of up to the nominal value as indicated above (The "Secured Obligations"). This Letter of Credit shall be valid from [______] of 20 [ ] until the date of occurrence [ ][ ] calendar days after [ ] of [ ]. It is understood that the Bank's responsibility derived from the Letter of Credit hereof is limited only and exclusively to the amounts and the terms indicated in the heading of the Letter of Credit. In case of default by the Applicant of all or any of the Secured Obligations, the Beneficiary shall report said default to the Bank in its offices located at [_____________________], within the term of the Letter of Credit hereof. On the same date of reception of the referred communication by the Bank, the Bank shall directly proceed to pay in an unconditional manner to the Beneficiary the amounts indicated in the document reporting the default to the Beneficiary, without exceeding at any time the total secured value drawn on this Letter of Credit in (i) pesos, the legal currency of the Republic of Colombia, or (ii) dollars of the United States of America. If the communication of default previously mentioned is not received within the term of the Letter of Credit hereof, the Bank's responsibility derived therefrom shall cease. The communication informing the Bank regarding the default of the Secured Obligations shall consist of a document duly signed by the legal representative of the Beneficiary or whoever replaces him, stating the default by the Applicant of the Secured Obligations and thus requesting the payment of the guarantee hereof. Said communication shall indicate the number of this Letter of Credit, and the amount drawn thereto. In case the Beneficiary decides to use the Letter of Credit in pesos, the legal currency in the Republic of Colombia, the amount of the nominal value of the Letter of Credit shall be converted at the market representative exchange rate certified by the Superintendence of Finance of Colombia on the date in which the communication is submitted to the Bank. This document shall be governed by the International Standby Practices (ISP98) from the International Chamber of Commerce. 1 \ No newline at end of file diff --git a/full_contract_txt/GRIDIRONBIONUTRIENTS,INC_02_05_2020-EX-10.3-SUPPLY AGREEMENT.txt b/full_contract_txt/GRIDIRONBIONUTRIENTS,INC_02_05_2020-EX-10.3-SUPPLY AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..2c5c1b336692051f8a430d7944b3e078335c9dcb --- /dev/null +++ b/full_contract_txt/GRIDIRONBIONUTRIENTS,INC_02_05_2020-EX-10.3-SUPPLY AGREEMENT.txt @@ -0,0 +1,17 @@ +EXHIBIT 10.3 SUPPLY AGREEMENT This Agreement ("the Agreement"), is made by and between EWSD 1, LLC, d/b/a/ SHI FARMS ("Shi Farms"), a Delaware limited liability company and Gridiron BioNutrients, Inc, a Nevada Corporation ("Gridiron") , each individually "a Party," and collectively, "the Parties." WHEREAS Shi Farms grows industrial hemp and wishes to sell hemp biomass ("Product"); and Gridiron wishes to purchase Product from Shi Farms; and Both Parties acknowledge that Shi Farms is the owner of the Product as defined below; and Shi Farms is willing to sell Product to Gridiron and Gridiron desires to acquire in accordance with the terms and conditions set forth below. NOW, THEREFORE for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows: 1. Products and Payments A. Product. Shi Farms agrees to sell Product and Gridiron agrees to purchase 30,000 lbs. of hemp biomass ("Biomass") from Shi Farms. Biomass must contain a minimum of six percent (6%) total Cannabidiol (CBD/and or CBDA) and all Biomass must have less than three percent (3%) total TCH content. The Biomass must contain no contaminates that are above acceptable industry standards for processing Biomass including but not limited to: Mold and Mildew; Non- Hemp Plant Material; Soil; Insects; Rodent Droppings; Wet or Rotting Material; Heavy Metals; Residual Pesticides or Herbicides; Bacteria. B. Pricing. Both Parties mutually agree that the Purchase Price of the Product is determined on a $5.00 per pound basis for a total cost of one hundred fifty thousand dollars ($150,000). C. Certificate of Analysis (COA). Both Parties agree that CBD potency numbers are determined by a third-party lab according to standard testing protocol which was provided by the seller. Buyer may take their own samples ("Product Samples") for testing as well. D. Payment. Both Parties agree that once the Parties have agreed to transaction which includes the purchase and sale of the Product that the Buyer will remit payment upon execution of this agreement. E. Quarantine. Once the payment has been received, Shi Farms will use its best efforts to quarantine product to ensure safe keeping of the Product until delivery date as agreed by the Parties. F. Delivery. Product Samples. The point of delivery of the Product Samples shall be a laboratory determined by Gridiron, if Gridiron determines that third party analysis of the Biomass is required for processing. Shi Farms shall be responsible to ship the Product Samples to the designated laboratory. Biomass. Shi Farms shall be responsible for delivery of the Biomass to the processor determined by Gridiron, in good form as described above "A. Product". + +1 + + + + + +2. Term and Termination. A. Termination. Either Party may terminate this Agreement at any time prior to delivery of the Product. 3. Indemnification. Gridiron and affiliated parties shall indemnify and hold Shi Farms harmless from any claims, losses, actions, damages, liabilities, taxes , obligations, fines, proceedings, deficiencies and out of pocket costs and expenses (including but not limited to attorneys' fees and disbursements) without limitation resulting from or arising out of any inaccuracy or breach of any representation or warranty; any non-performance or any obligation incurred by Gridiron and its affiliated parties. If any claim or legal proceeding is filed by a third party, prompt notice is required by the one to the other. 4. Notices. All notices required or permitted under this Agreement must be in writing and delivered by email or personal delivery on the date sent; or if my facsimile on the date sent; or if by certified US mail on the third business day following such mailing; or if by overnight courier, on the next business day. Shi Farms:214 39t h Lane Pueblo, CO 81006 ATTN: Steven Turetsky Gridiron: 1119 West 1st Ave - Suite G Spokane, WA 99021 ATTN: Tim Orr 5. Entire Agreement. A. Amendment, Waiver, Assignment. This Agreement may not be waived, amended or assigned without an agreed written and signed document, signed by both Parties. B. Governing Law. This Agreement and any amendments thereto shall be construed according to the laws of the State of Colorado without regard to conflicts of law principles and any disputes hereunder shall be litigated in a state court in Colorado. C. Confidential Information. In the course of performing their respective obligations, each party will enter into possession of information of the other party which the Parties wish to protect and deem "Confidential Information." This will include all Intellectual Property, processes, pricing, and any information that is marked confidential. When the Agreement ends, each party shall return all copies of any such information to the other and take every reasonable measure to preclude its representatives from sharing or keeping such information. Failure to do so shall constitute a material breach of this Agreement with all rights and remedies available to the party whose material has been Disclosed. D. Counterparts and Severability. This document may be signed in counterparts which, when taken together, constitute the whole. Should any provision of this Agreement deemed unenforceable and thus stricken, the remainder of the Agreement remains in full force and effect upon both parties. + +[Remainder of Page Intentionally Left Blank] 2 + + + + + +IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date below. EWSD 1, LLC d/b/a Shi Farms Gridiron BioNutrients, Inc. BY: /s/ Thomas A. Gallo BY: /s/ Timothy S Orr Date: 1/26/2020 Date: 1/27/2020 Name: Thomas A. Gallo Name: Timothy Orr- President Title: Executive Director 3 \ No newline at end of file diff --git a/full_contract_txt/GSITECHNOLOGYINC_11_16_2009-EX-10.2-INTELLECTUAL PROPERTY AGREEMENT between SONY ELECTRONICS INC. and GSI TECHNOLOGY, INC..txt b/full_contract_txt/GSITECHNOLOGYINC_11_16_2009-EX-10.2-INTELLECTUAL PROPERTY AGREEMENT between SONY ELECTRONICS INC. and GSI TECHNOLOGY, INC..txt new file mode 100644 index 0000000000000000000000000000000000000000..7523c1681864ad90b17bfe1af25f8c8cacce7ad0 --- /dev/null +++ b/full_contract_txt/GSITECHNOLOGYINC_11_16_2009-EX-10.2-INTELLECTUAL PROPERTY AGREEMENT between SONY ELECTRONICS INC. and GSI TECHNOLOGY, INC..txt @@ -0,0 +1,229 @@ +Exhibit 10.2 INTELLECTUAL PROPERTY AGREEMENT between SONY ELECTRONICS INC. and GSI TECHNOLOGY, INC. August 28, 2009 + + + + + + TABLE OF CONTENTS + + i + + Page 1. Definitions 1 1.1 IP Agreement 2 1.2 Asset Purchase Agreement 2 1.3 Effective Date 2 1.4 Licensed Patent(s) 2 1.5 Transferred Patent(s) 3 2. Assignment 3 3. Licenses 3 3.1 Grant by SONY 3 3.2 Grant Back by PURCHASER 4 3.3 No Implied License or Other Assignment 4 3.4 No Sublicense Rights 4 4. Each Party's Sole Right to the Intellectual Property 4 5. Restrictions on Use of SONY Trademarks 5 5.1 No Trademark License 5 5.2 Removal of SONY Trademarks 5 5.3 Packaging 5 5.4 No Affiliation 6 5.5 JTAG / Mask Works 6 6. Payment 6 7. Term and Termination 7 7.1 Term 7 7.2 Termination 7 7.3 Insolvency 7 7.4 Continuing Obligations 8 8. Representations and Warranties 8 8.1 Power and Authority 8 8.2 Essential Patents 8 8.3 Ownership 8 8.4 Validity and Enforceability 8 8.5 Sufficiency 9 8.6 Non-infringement by the Business 9 8.7 Infringement by a Third Party 10 8.8 Intellectual Property Development 10 + + + + + + TABLE OF CONTENTS (continued) + + ii + + Page 8.9 Material Intellectual Property Agreements 11 8.10 Royalties 11 8.11 No Loss of Rights 12 8.12 Transferability 12 8.13 No SRAM Product Warranty Issues 12 8.14 Disclaimer 12 9. Miscellaneous 13 9.1 Notices 13 9.2 Expenses 14 9.3 Successors and Assigns 14 9.4 Waiver 15 9.5 Entire Agreement 15 9.6 Amendments and Supplements 15 9.7 Rights of Third Parties 15 9.8 Further Assurances 16 9.9 Applicable Law 16 9.10 Execution in Counterparts 16 9.11 Titles and Headings 16 9.12 Invalid Provisions 16 9.13 Transfer Taxes 17 9.14 Attorneys' Fees 17 + + + + + + INTELLECTUAL PROPERTY AGREEMENT This Intellectual Property Agreement is made and entered into as of August 28, 2009 by and between GSI Technology, Inc., a Delaware corporation ("PURCHASER"), on the one hand, and Sony Electronics Inc. ("SONY"), a Delaware corporation, on the other hand. PURCHASER and SONY are referred to individually as a "Party" and collectively as the "Parties". RECITALS WHEREAS, SONY presently conducts the business of manufacturing, marketing and selling SRAM products (the "Business"); WHEREAS, SONY has agreed to sell and PURCHASER has agreed to purchase certain assets, rights and properties of SONY used or useful in connection with the Business, all on the terms and subject to the conditions set forth in the Asset Purchase Agreement of even date herewith; WHEREAS, SONY has or will transfer title to the Transferred Assets to PURCHASER under the Asset Purchase Agreement; WHEREAS, SONY is the owner of certain intellectual property related to the Business; and WHEREAS, SONY desires to transfer certain patents to PURCHASER and grant to PURCHASER a license under certain intellectual property related to the SRAM Products. NOW, THEREFORE, in consideration of the mutual covenants, representations, warranties and agreements herein contained, the Parties hereto agree as follows: 1. Definitions As used in this IP Agreement, all capitalized terms shall have the meaning ascribed to them as set forth in the Asset Purchase Agreement, except for terms defined herein, including the following terms, which shall have the meanings set forth below: 1 + + + + + + 1.1 IP Agreement The term "IP Agreement" means this Intellectual Property Agreement, including all attached Exhibits hereto, and any amendments or supplements agreed to in writing and signed by SONY and PURCHASER. 1.2 Asset Purchase Agreement The term "Asset Purchase Agreement" means the Asset Purchase Agreement dated August 28, 2009 between SONY and PURCHASER to which this IP Agreement is attached as Exhibit F. 1.3 Effective Date The term "Effective Date" means the Closing Date. 1.4 Licensed Patent(s) The term "Licensed Patent" or "Licensed Patents" means any patent or patents issued at any time in any country (including any inventor's certificates, extension, reissued, renewal and reexamined patents), which (1) is based on any invention made on or prior to the Effective Date, including any patents for inventions disclosed in patent applications filed on or prior to the Effective Date, and issuing from any of those patent applications or any patent applications which are continuations, continuing applications, continuations-in-part or divisions of those patent applications, or on any foreign counterpart of any of those patent applications, (2) (a) is owned by SONY or any of its Affiliates or (b) under which SONY or its Affiliates have the right to grant licenses without payment by SONY or any of its Affiliates of additional royalties or other consideration to a third party (excluding payments for inventions made by that third party while employed by SONY or any of its Affiliates), and (3) would, in the absence of a license granted herein, be infringed by making, using, selling, offering for sale, importing or supplying any Competing Products (including, without limitation, the SRAM Products). "Licensed Patents" shall exclude the Transferred Patents. 2 + + + + + + 1.5 Transferred Patent(s) The term "Transferred Patent" or "Transferred Patents" means the patents and/or patent applications listed in Exhibit A to this IP Agreement and all patents and applications claiming the priority of any of these patents and/or patent applications and all reissues, divisions, renewals, extensions, provisionals, and continuations thereof, and any equivalent or similar rights anywhere in the world in inventions and discoveries. 2. Assignment SONY hereby assigns to PURCHASER SONY's entire right, title and interest in, to and under the Transferred Patents, and any patents that may issue therefrom (including any foreign counterparts, divisions, continuations, renewals, continuations in part, reexaminations or reissues thereof), along with the right to sue and collect damages for any future infringement, and agrees to take all reasonably necessary action to assist PURCHASER, at PURCHASER's sole expense, to register, confirm and perfect such assignment, including by making filings with or at any and all necessary patent offices and/or governmental agencies. SONY retains the right to sue and collect damages for any past infringement of the Transferred Patents, provided that SONY obtains PURCHASER's written consent prior to making any infringement claim or allegation or filing any action, suit, litigation or proceeding that could affect the Transferred Patents or PURCHASER's ability to use and exploit the Transferred Patents or that may result in PURCHASER being joined as a party to the action, suit, litigation or proceeding. PURCHASER shall not unreasonably withhold its consent. 3. Licenses 3.1 Grant by SONY SONY, on behalf of itself and its Affiliates, hereby grants to PURCHASER a worldwide, non-exclusive, fully paid-up, royalty-free license (a) under the Licensed Patents to make, have made, use, offer to sell, sell, otherwise dispose of, and import any Competing Products (including, without limitation, the SRAM Products); and (b) to use, reproduce, modify, prepare derivative works of, perform, display, and otherwise practice and exploit in any manner any and all of the SRAM Intellectual Property in connection with the use and exploitation of the 3 + + + + + + Transferred Assets, and to make, have made, use, offer to sell, sell, otherwise dispose of, and import Competing Products (including, without limitation, SRAM Products). 3.2 Grant Back by PURCHASER Subject to SONY's compliance with the covenant not to compete in Section 8.3 of Asset Purchase Agreement, PURCHASER hereby grants to SONY a worldwide, non-exclusive, fully paid-up, royalty-free license, under the Transferred Patents, to make, use, offer to sell, sell, otherwise dispose of, and import any products, including any Competing Products. This Section 3.2 shall not be construed as superseding, overriding or modifying Section 8.3 of Asset Purchase Agreement. 3.3 No Implied License or Other Assignment Except as expressly set out in this IP Agreement and the Asset Purchase Agreement, neither party grants to the other Party, and each Party acknowledges and agrees that the other Party has not granted to it, any other license explicitly or implicitly under any Intellectual Property nor has either party made any transfer or assignment to the other Party of any Intellectual Property or intellectual property rights. 3.4 No Sublicense Rights No license granted by either party under this IP Agreement includes the right to grant sublicenses. 4. Each Party's Sole Right to the Intellectual Property Each Party shall have the sole right, but not the obligation, to apply for and register for protection for, prosecute, and maintain any of its Intellectual Property and shall have the sole right to determine whether or not, and where, to apply for and/or register such protection, to abandon attempts to obtain protection or abandon registered protection of any Intellectual Property, and/or to discontinue the maintenance of any Intellectual Property without any obligation to inform the other Party of any such action or inaction. Neither Party is obligated to (a) file any patent application or to secure any patent or patent rights, or (b) maintain any patent in force or prosecute any patent application. 4 + + + + + + 5. Restrictions on Use of SONY Trademarks 5.1 No Trademark License Both Parties agree and recognize that, except as specifically provided in this Section 5, SONY does not grant any trademark license to PURCHASER under any SONY slogans, brands, trade names, monograms, logos, common law trademarks and service marks, trademark and service mark registrations and applications or any World Wide Web addresses, sites and domain names or any variations thereof ("SONY Branding"). PURCHASER agrees that, except as specifically provided in this Section 5, it shall not use any slogans, brands, trade names, monograms, logos, common law trademarks and service marks, trademark and service mark registrations and applications or any World Wide Web addresses, sites and domain names or any variations thereof ("PURCHASER Branding") that imitate or are confusingly similar to any SONY Branding, nor shall it use PURCHASER Branding in commerce in a manner that would be confusingly similar to any SONY Branding. 5.2 Removal of SONY Trademarks Except as expressly permitted by Section 5.5 or as otherwise agreed by SONY in writing, Purchaser shall either remove, cover (i.e., sticker) or obliterate SONY Branding visible to the unaided human eye from all SRAM Products and product literature whether (a) transferred in complete or incomplete form under the Asset Purchase Agreement, (b) manufactured under license under this IP Agreement, or (c) manufactured using the Transferred Assets. Notwithstanding the foregoing, PURCHASER shall have the right to sell finished SRAM Products bearing SONY Branding acquired by PURCHASER under the Asset Purchase Agreement, subject to the provisions of Section 8.14 thereof. 5.3 Packaging Except as expressly otherwise agreed by SONY in writing, all inventory of SRAM Products shall be packaged with labels clearly indicating that it is a PURCHASER original product. PURCHASER is expressly prohibited from using any SONY Branding alone or on any SRAM Product and/or product packaging. Notwithstanding the foregoing, PURCHASER shall have the right to sell finished SRAM Products bearing SONY Branding 5 + + + + + + acquired by PURCHASER under the Asset Purchase Agreement, subject to the provisions of Section 8.14 thereof. 5.4 No Affiliation PURCHASER shall not represent, imply, or connote in any way that it is affiliated with SONY or, other than as authorized by this IP Agreement, use any SONY Trademark for any goods, parts, packaging of products, or services. 5.5 JTAG / Mask Works Notwithstanding the provisions of Section 5.1, PURCHASER shall have the right to use any and all Mask Works transferred to PURCHASER under the Asset Purchase Agreement, even if the use of such Mask Works results in a JTAG or other marking that would otherwise indicate a connection to SONY, provided that: (i) the use of such Masks is only for the manufacture by or for PURCHASER of SRAM Products that are qualified with customers as of the Effective Date and updates or revisions of such SRAM Products that would not require requalification; and (ii) PURCHASER allows SONY to audit PURCHASER's manufacture and testing of SRAM Products for purposes of determining the quality of those SRAM Products that bear a marking which indicates a connection to SONY from time to time upon reasonable request, subject to SONY's execution of a standard PURCHASER confidentiality agreement; and (iii) no alterations are made to any such Mask in any way. 6. Payment Consideration for the license granted by SONY under this IP Agreement is included in the Purchase Price, and PURCHASER shall have no obligation to make any additional payments to SONY for the license granted under this Agreement. 6 + + + + + + 7. Term and Termination 7.1 Term Unless earlier terminated as provided below, this IP Agreement shall extend until the last date of expiration of the SRAM Intellectual Property rights licensed under this IP Agreement. 7.2 Termination (a) Should either Party fail to observe faithfully and materially perform each of the material obligations assumed by it in this IP Agreement for thirty (30) days after its attention has been directed to any such breach by notice in writing from the other Party, the non-breaching Party shall, at its option, have the right to terminate the license granted by it under this Agreement, such termination to be effected by serving notice in writing upon the breaching Party to that effect on or after the expiration of such period of thirty (30) days. (b) Should PURCHASER assert against SONY a claim based on its Patents and/or Intellectual Property, SONY shall, at its option, have the right to terminate the license granted by SONY hereunder, such termination to be effected by serving notice in writing upon PURCHASER to that effect not less than thirty (30) days prior to the effective date of such termination. (c) Should SONY or any SONY Affiliate assert against PURCHASER a claim based on its Patents and/or Intellectual Property, PURCHASER shall, at its option, have the right to terminate the license granted by PURCHASER hereunder, such termination to be effected by serving notice in writing upon SONY to that effect not less than thirty (30) days prior to the effective date of such termination. 7.3 Insolvency The licenses granted to a Party under Section 3 hereof shall automatically terminate should such Party become adjudicated insolvent by reason of failure to pay its debts when due, enter into bankruptcy proceeding for its liquidation, voluntarily or involuntarily, or make any assignment for the benefit of any one or more creditors. 7 + + + + + + 7.4 Continuing Obligations Termination of the licenses granted hereunder shall not affect any liability of either of the Parties previously accruing under this IP Agreement. 8. Representations and Warranties SONY hereby makes the following representations and warranties to PURCHASER, each of which shall be true and correct as of the date hereof and as of the Closing Date, and shall be unaffected by any investigation heretofore or hereafter made: 8.1 Power and Authority SONY has the right and power to enter into this IP Agreement and to transfer the Transferred Patents and to grant the license set forth in Section 3.1. 8.2 Essential Patents The Transferred Patents listed on Exhibit A comprise the Patents, both U.S. and foreign, owned or claimed by SONY or any SONY Affiliate, that are essential to the conduct of the Business as conducted by SONY. 8.3 Ownership All of the Transferred Patents are owned solely by SONY. No Transferred Patent is jointly owned by SONY and any other Person, nor is it owned or jointly owned by any SONY Affiliate. 8.4 Validity and Enforceability Each of the Transferred Patents (excluding applications) is subsisting, and, to the Knowledge of SONY, valid and in full force and effect (except with respect to applications), and has not expired or been cancelled or abandoned. All necessary documents and certifications in connection with each Transferred Patent (excluding applications) have been filed with the relevant patent, copyright or other authorities in the United States and foreign jurisdictions, as the case may be, for the purposes of avoiding abandonment, prosecuting and maintaining of 8 + + + + + + Transferred Patents (excluding applications). Except for actions of the relevant jurisdiction's patent and trademark office or other government intellectual property office ("Office Actions"), SONY has not, to the Knowledge of SONY, received written notice of any pending or threatened (and at no time within the two years prior to the Effective Date has there been pending any) action before any court, governmental authority or arbitral tribunal in any jurisdiction challenging the use, ownership, validity, enforceability or registerability of any of the Transferred Patents. Rejections of pending applications before a national patent, trademark or intellectual properly office will not constitute such written notice. Except for Office Actions and broad Patent portfolio cross license agreements that SONY has signed with third parties ("Portfolio Cross Licenses"), neither SONY nor any Affiliate of SONY is, to the Knowledge of SONY, a party to any settlements, covenants not to sue, consents, decrees, stipulations, judgments or orders resulting from actions which permit third parties to use any Transferred Patents or any other SRAM Intellectual Property included in the Transferred Assets. SONY has the sole right to enforce all of the Transferred Patents and the other SRAM Intellectual Property rights of SONY included in the Transferred Assets. 8.5 Sufficiency To the Knowledge of SONY, SONY and each of SONY's Affiliates owns, or has valid rights to use, all the SRAM Intellectual Property material to the conduct of the Business, including, without limitation, the design, development, manufacture, marketing, use, distribution, import, supply, provision and sale of SRAM Products. 8.6 Non-infringement by the Business As of the Effective Date, SONY has not received written notice of any pending or threatened (and at no time within the two years prior to the date of this Agreement has there been, to the Knowledge of SONY, pending any) action alleging that the activities or the conduct of the Business dilutes (solely with respect to trademark rights), misappropriates, infringes, violates or constitutes the unauthorized use of, or will dilute (solely with respect to trademark rights), misappropriate, infringe upon, violate or constitute the unauthorized use of the Intellectual Property of any third party, nor, to the Knowledge of SONY, does there exist any basis therefor. Except for Office Actions pertaining to the Transferred Patents and Patent licenses 9 + + + + + + granted by SONY under Portfolio Cross Licenses, neither SONY nor any of SONY's Affiliates is, to the Knowledge of SONY, party to any settlement, covenant not to sue, consent, decree, stipulation, judgment, or order resulting from any action which (i) restricts SONY's or any of its Affiliate's rights to use any SRAM Intellectual Property in connection with the Business, (ii) restricts the Business in order to accommodate a third party's Intellectual Property rights or (iii) requires any future payment by SONY or any SONY Affiliate. 8.7 Infringement by a Third Party To the Knowledge of SONY, no third party is misappropriating, infringing, or violating any SRAM Intellectual Property material to the conduct of the Business that is owned by or exclusively licensed to SONY or any SONY Affiliate, and no Intellectual Property or other proprietary right, misappropriation, infringement or violation actions have been brought against any third party by SONY or any SONY Affiliate in connection with the Business. 8.8 Intellectual Property Development To the knowledge of SONY: (a) Each Person who is or has been employed by SONY or any Affiliate of SONY at any time at or prior to the date hereof in connection with the development of any SRAM Intellectual Property or technology material to the Business, or is or has provided consulting services to SONY or any Affiliate of SONY in connection with the development of any SRAM Intellectual Property or technology material to the Business at any time at or prior to the Effective Date, has signed an agreement containing appropriate confidentiality terms. (b) Except in the exercise of SONY's business judgment, other than under an appropriate confidentiality or nondisclosure agreement or contractual provision relating to confidentiality and nondisclosure, there has been no disclosure to any third party of material confidential or proprietary information or trade secrets of SONY or any Affiliate of SONY related to any SRAM Product. All current and former employees of SONY and each Affiliate of SONY who have made any material contributions to the development of any SRAM Product have signed an invention assignment agreement that assigns ownership to SONY or have performed that work in the course, and within the scope, of their employment. 10 + + + + + + (c) All consultants and independent contractors currently or previously engaged by SONY or its Affiliates who have made any material contributions to the development of any SRAM Product (including, without limitation, all consultants and independent contractors who have designed, written, or modified any firmware or software code contained in any SRAM Product) have entered into a work-made-for-hire agreement or have otherwise assigned to SONY or a Affiliate of SONY (or a third party that previously conducted any business that forms any part of the Business currently conducted by SONY and that has subsequently assigned its rights in such SRAM Product to SONY) all of their right, title and interest (other than moral rights, if any) in and to the portions of such SRAM Product developed by them in the course of their work for SONY or any Affiliate. (d) Other than the employees, consultants and contractors referred to in this Section 8.8, no other Person has made or currently is making any material contributions to the development of any SRAM Product. 8.9 Material Intellectual Property Agreements Except for the SRAM Contracts assigned to and assumed by PURCHASER under the Asset Purchase Agreement and the Portfolio Cross Licenses, there are no contracts, licenses or agreements between SONY or any of its Affiliates, on the one hand, and any other Person, on the other hand, with respect to any SRAM Intellectual Property material to the conduct of the Business, including any agreements with respect to the manufacture or distribution of the SRAM Products. 8.10 Royalties To the Knowledge of SONY, except for obligations under the SRAM Contracts assigned to and assumed by PURCHASER under the Asset Purchase Agreement, neither SONY nor any Affiliate of SONY has any obligation to pay any third party any royalties or other fees for the continued use of Intellectual Property which is specifically applicable to SRAM Products, and PURCHASER will not be obligated under any contract or agreement to pay any royalties or other fees associated with SRAM Intellectual Property arising from the consummation of the transactions contemplated by this Agreement. 11 + + + + + + 8.11 No Loss of Rights The consummation by SONY of the transactions contemplated hereby will not result in any violation, loss or impairment of ownership by SONY or any SONY Affiliate of, or impair or restrict the right of PURCHASER to use, any Transferred Patents or any other SRAM Intellectual Property included in the Transferred Assets, and will not require the consent of any governmental authority or third party with respect to any of Transferred Patents or any other SRAM Intellectual Property included in the Transferred Assets. 8.12 Transferability All Transferred Patents will be fully transferable, alienable or licensable by PURCHASER from and after the Closing without restriction and without payment of any kind to any third party other than requirements under applicable laws to file documents with and pay fees to patent offices. There are no Liens on any of the Transferred Patents. (For the avoidance of doubt, the Parties acknowledge that SONY's licensees under Portfolio Cross Licenses already hold licenses to the Transferred Patents and do not need a license from PURCHASER to practice the Transferred Patents.) 8.13 No SRAM Product Warranty Issues To the Knowledge of SONY, each SRAM Product currently offered for sale by SONY (or its Affiliates, as the case may be) conforms with all SONY datasheet specifications, except with respect to warranty claims made in the ordinary course of business. (For the avoidance of doubt, epidemic failures or any substantial repeated failures of those products to comply with specifications that have not been resolved are not in the ordinary course of business). SONY has not received written notice from any customer, reseller, OEM customer or governmental authority alleging any such material non-conformance. 8.14 Disclaimer NOTHING IN THIS IP AGREEMENT SHALL BE DEEMED TO BE A REPRESENTATION OR WARRANTY BY EITHER PARTY OF THE VALIDITY OF ANY PATENT. NEITHER PARTY SHALL HAVE ANY LIABILITY WHATSOEVER TO THE 12 + + + + + + OTHER PARTY OR ANY OTHER PERSON FOR OR ON ACCOUNT OF ANY INJURY, LOSS, OR DAMAGE, OF ANY KIND OR NATURE SUSTAINED BY, OR ANY DAMAGE ASSESSED OR ASSERTED AGAINST, OR ANY OTHER LIABILITY INCURRED BY OR IMPOSED UPON THE OTHER PARTY OR ANY OTHER PERSON, ARISING OUT OF OR IN CONNECTION WITH OR RESULTING FROM (A) THE PRODUCTION, USE, SALE, OFFER FOR SALE, OTHER DISPOSITIONS OR IMPORTATION OF ANY APPARATUS OR PRODUCT MADE BY THAT PARTY; OR (B) ANY ADVERTISING OR OTHER PROMOTIONAL ACTIVITIES MADE BY THAT PARTY WITH RESPECT TO ANY OF THE FOREGOING, AND EACH PARTY SHALL HOLD THE OTHER PARTY, AND ITS AFFILIATES, OFFICERS, AGENTS, OR EMPLOYEES, HARMLESS IN THE EVENT IT, OR ITS OFFICERS, AGENTS, OR EMPLOYEES, IS HELD LIABLE. THIS SECTION 8 IS NOT INTENDED TO NEGATE OR SUPERSEDE ANY REPRESENTATION OR WARRANTY EXPRESSLY MADE BY SONY IN THIS IP AGREEMENT. 9. Miscellaneous 9.1 Notices All notices and other communications required or permitted hereunder will be in writing and, unless otherwise provided in this IP Agreement, will be deemed to have been duly given when delivered in person or when dispatched by electronic facsimile transfer (confirmed in writing by mail simultaneously dispatched) or one business day after having been dispatched by a nationally recognized overnight courier service to the appropriate Party at the address specified below: (a) If to PURCHASER, to: GSI Technology, Inc. 2360 Owen Street Santa Clara, CA 95054 Attention: Chief Financial Officer Facsimile No.: (408) 980-8377 13 + + + + + + with a copy (which shall not constitute notice) to: DLA Piper LLP (US) 2000 University Avenue East Palo Alto, CA 94303-2214 Attention: Dennis C. Sullivan Facsimile No.: (650) 867-1200 (b) If to SONY, to: Sony Electronics Inc. 1730 N. First Street San Jose, CA 95112 Attention: Law Department Facsimile No.: (408) 352-4169 with a copy (which will not constitute notice) to: Sony Electronics Inc. 16530 Via Esprillo, MZ7300 San Diego, CA 92127 Attention: General Counsel Facsimile No.: (858) 942-8170 or to such other address or addresses as any such Party may from time to time designate as to itself by like notice. 9.2 Expenses Except as otherwise expressly provided herein, each Party shall pay any expenses incurred by it incident to this IP Agreement, and in preparing to consummate and consummating the transactions provided for herein. 9.3 Successors and Assigns This IP Agreement will be binding upon and inure to the benefit of the Parties hereto and their respective successors and permitted assigns, but will not be assignable or delegable by any Party without the prior written consent of the other Party. Notwithstanding the foregoing, a Party may transfer or assign its rights under this IP Agreement in connection with a merger, acquisition or sale of all or substantially all of its assets, on condition that it provides the 14 + + + + + + other Party with notice of the transfer or assignment. Any attempted transfer in contravention of this Section 9.3 shall be null and void. 9.4 Waiver No action taken pursuant to this IP Agreement will be deemed to constitute a waiver of compliance with any representations, warranties, conditions or covenants contained in this IP Agreement unless it is in writing, and no such waiver will operate or be construed as a waiver of any subsequent breach, whether of a similar or dissimilar nature. 9.5 Entire Agreement This IP Agreement and the Asset Purchase Agreement (including the Schedules and Exhibits hereto and thereto and the ancillary documents thereto) supersedes any other agreement, whether written or oral, that may have been made or entered into by any Party relating to the matters contemplated hereby and constitutes the entire agreement by and among the Parties with respect to the subject matter hereof and thereof. 9.6 Amendments and Supplements This IP Agreement may be amended or supplemented at any time by additional written agreements as may mutually be determined by PURCHASER and SONY to be necessary, desirable or expedient to further the purposes of this IP Agreement or to clarify the intention of the Parties. 9.7 Rights of Third Parties Other than Affiliates of a Party, nothing expressed or implied in this IP Agreement is intended or will be construed to confer upon or give any Person other than the Parties any rights or remedies under or by reason of this IP Agreement or any transaction contemplated hereby. 15 + + + + + + 9.8 Further Assurances From time to time, as and when requested by either Party, the other Party will execute and deliver, or cause to be executed and delivered, all such documents and instruments, make such other deliveries and take such other actions as may be reasonably necessary to consummate the transactions contemplated by this IP Agreement. 9.9 Applicable Law This IP Agreement and the legal relations among the Parties will be governed by and construed in accordance with the rules and substantive Laws of the State of California, United States of America, without regard to conflicts of law provisions. 9.10 Execution in Counterparts This IP Agreement may be executed in two or more counterparts, each of which will be deemed an original, but all of which together will constitute one and the same agreement. 9.11 Titles and Headings Titles and headings to Sections herein are inserted for convenience of reference only, and are not intended to be a part of or to affect the meaning or interpretation of this IP Agreement. 9.12 Invalid Provisions If any provision of this IP Agreement is held to be illegal, invalid, or unenforceable under any present or future Law, (a) such provision will be fully severable; (b) this IP Agreement will be construed and enforced as if such illegal, invalid, or unenforceable provision had never comprised a part hereof; (c) the remaining provisions of this IP Agreement will remain in full force and effect and will not be affected by the illegal, invalid, or unenforceable provision or by its severance from this IP Agreement; and (d) in lieu of such illegal, invalid, or unenforceable provision, there will be added automatically as a part of this IP Agreement a legal, valid, and enforceable provision as similar in terms to such illegal, invalid, or unenforceable provision as may be possible. 16 + + + + + + 9.13 Transfer Taxes All sales, use, transfer, stamp, conveyance, value added or other similar taxes, duties, excises or governmental charges imposed by any taxing jurisdiction, domestic or foreign, and all recording or filing fees, notary fees or other similar costs of Closing with respect to the transfer of the Transferred Assets or otherwise on account of this IP Agreement or the transactions contemplated hereby will be borne by PURCHASER. 9.14 Attorneys' Fees If any action at law or in equity is necessary to enforce or interpret the terms of this IP Agreement, the Person prevailing shall be entitled to recover in such action its reasonable attorneys' fees, costs and necessary disbursements in addition to any other relief to which it may be entitled. IN WITNESS WHEREOF, the Parties have caused this IP Agreement to be executed in duplicate by their duly authorized officers as of the day and year first above written. + + 17 + +GSI TECHNOLOGY, INC. SONY ELECTRONICS INC. By: /s/ Lee-Lean Shu By: /s/ Tomoya Hayakawa Name: Lee-Lean Shu Name: Tomoya Hayakawa Title: President & CEO Title: President of CSBD + + + + + + Exhibit F: Exhibit A to the IP Agreement: List of Assigned Patents + + + +Filing Date Title Country/ Region Serial # Publ. # Patent # Inventors 28-Apr-06 Test semiconductor device in full frequency with half frequency tester United States 11/414,612 2007-0266286 7516385 Chen, Suzanne; & Kim, Jae-Hyeong; & Tseng, Chih-Chiang 24-Apr-06 Minimized line skew generator. United States 11/410,352 2007-0096790 Not yet patented Chuang, Patrick; & Kim, Jae-Hyeong; & Lu, Chungji (Jay) 30-Oct-06 Performing Read and Write Operations in the Same Cycle for an SRAM Device. Japan 2006-294640 Chen, Suzanne; & Huang, M.H. Mu- Hsiang; & Tseng, Chih-Chiang 14-Apr-06 Performing read and write operations in the same cycle for an SRAM device. United States 11/404,191 2007-0097780 7355907 Chen, Suzanne; & Huang, M.H. Mu- Hsiang; & Tseng, Chih-Chiang 30-Oct-06 Shift Registers Free of Timing Race Boundary Scan Registers with Two-Phase Clock Control. Japan 2006-294617 Chen, Suzanne; & Chuang, Patrick; & Huang, M.H. Mu-Hsiang + + + + + + + + 2 + +14-Apr-06 Shift registers free of timing race boundary scan registers with two-phase clock control. United States 11/404,353 2007-0101222 7389457 Chen, Suzanne; & Chuang, Patrick; & Huang, M.H. Mu-Hsiang 3-May-06 Dynamic sense amplifier for SRAM. United States 11/417,805 2007-0097765 7313040 Chuang, Patrick; & Huang, M.H. Mu- Hsiang; & Kim, Jae-Hyeong 30-Oct-06 Dynamic sense amplifier for SRAM. Japan 2006-294706 Chuang, Patrick; & Huang, M.H. Mu- Hsiang; & Kim, Jae-Hyeong 17-May-06 + + + +Programmable impedance control circuit calibrated at Voh Vol level + +United States + + + +11/436,260 + + + +2007-0268039 + + + +7312629 + + + +Huang, M.H. Mu-Hsiang; & Ichihashi, Masahiro; & Miyajima, Yoshifumi; & Nakashima, Katsuya 4-Apr-08 DYNAMIC DUAL CONTROL ON-DIE TERMINATION. United States 12/078,782 2008-0272800 Not yet patented Chuang, Patrick; & Haig, Robert + + 24-Mar-08 An efficient method for implementing programmable impedance output drivers and United States 12/079,100 Not yet published Not yet patented Chuang, Patrick; & Haig, Robert; & Kwon, Kookhwan; + + + + + + + + 3 + + programmable input on die termination on a bi- directional data bus & Tseng, Chih + + 9-Mar-09 + + + +Programmable input/output structures and method for implementing a bi-directional data busses. + +China + + + +200910127224.8 + + + + + + + + + + + +Chuang, Patrick; & Haig, Robert; & Kwon, Kookhwan; & Tseng, Chih + + 13-Feb-09 + + + +An efficient method for implementing programmable impedance output drivers and programmable input on die termination on a bi- directional data bus + +EPO + + + +09250396.0 + + + + + + + + + + + +Chuang, Patrick; & Haig, Robert; & Kwon, Kookhwan; & Tseng, Chih \ No newline at end of file diff --git a/full_contract_txt/GSVINC_05_15_1998-EX-10-SPONSORSHIP AGREEMENT.txt b/full_contract_txt/GSVINC_05_15_1998-EX-10-SPONSORSHIP AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..28693d46432168afe26344c188293bbe9e6882fd --- /dev/null +++ b/full_contract_txt/GSVINC_05_15_1998-EX-10-SPONSORSHIP AGREEMENT.txt @@ -0,0 +1,393 @@ +TREATMENT WITH RESPECT TO CERTAIN PORTIONS OF THIS AGREEMENT ACCORDINGLY, CERTAIN PORTIONS HAVE BEEN REDACTED + + Exhibit 10.1 + + SPONSORSHIP AGREEMENT + +This agreement ("Agreement") is entered into as of the 31st day of March, 1998 ("Effective Date"), by and between Excite, Inc., a California corporation, located at 555 Broadway, Redwood City, California 94063 ("Excite"), and CyberShop, a Delaware corporation, located at 130 Madison Avenue, New York, New York 10016 ("Client"). + + RECITALS + +A. Excite maintains a site on the Internet at http://www.excite.com (the "Excite Site"), a site at http://www.webcrawler.com (the "WebCrawler Site") and owns, manages or is authorized to place advertising on affiliated Web sites worldwide (collectively, the "Excite Network") which, among other things, allow its users to search for and access content and other sites on the Internet. + +B. Within the Excite Site and the WebCrawler Site, Excite currently organizes certain content into topical channels, including "shopping" channels (the "Shopping Channels"). + +C. Client operates an on-line department store at its Web site located at http:// cybershop.com (the "Client Site"). + +D. Client wishes to promote its business to Excite's users through promotions and advertising in various portions of the Excite Network. + +Therefore, the parties agree as follows: + +1. SPONSORSHIP OF THE SHOPPING CHANNELS + + a) Commencing on the Launch Date (as defined below), Client will be promoted in the Excite Shopping Channel and the WebCrawler Shopping Channel: + + i) A link to the Client Site (consistent with the format used on similar links on the same page) will be displayed in the Excite Shopping Channel home page "Such a Deal" promotional rotation in two (2) separate one-week rotations during each year of the term of the Agreement, once every six (6) months. + + ii) A link to the Client Site (consistent with the format used on similar links on the same page) will be displayed in the Excite Shopping Channel home page "Shop Here First" promotional rotation in four (4) separate one-week rotations during each year of the term of the Agreement, once every quarter. + + CONFIDENTIAL + + iii) A link to the Client Site (consistent with the format used on similar links on the same page) will be displayed on the Excite Shopping Channel home page under the department listings, subject to the following conditions: + + A) Client is allocated eight (8) separate one-week link displays in each year of the term of the Agreement. Only one (1) link to the Client Site may be displayed on the Excite Shopping Channel home page under the department listings at any one time. Links to the Client Site may not appear under the Auctions, Books or Gourmet & Groceries department listings and may not appear in more than four (4) different department listings during each year of the term of the Agreement. + + B) The display of all links on the Excite Shopping Channel home page under the department listings is subject to availability at the time. + + iv) A link to the Client Site (consistent with the format used on similar links on the same page) will be displayed on the front pages of the following departments of the Excite Shopping Channel subject to the following conditions: + + A) A link to the Client Site will be displayed + + + + + + on the front page of the Department Stores & Malls department of the Excite Shopping Channel for the term of the Agreement. + + B) A link to the Client Site will be displayed on the front page of one other department of the Excite Shopping Channel of Client's choice for the term of the Agreement, other than the Auctions, Books or Gourmet & Groceries departments of the Excite Shopping Channel. + + C) Client is allocated twelve (12) months of link display in three (3) separate four-month blocks on the front page of departments of the Excite Shopping Channel other than the Auctions, Books, Department Stores & Malls or Gourmet & Groceries departments of the Excite Shopping Channel in each year of the term of the Agreement. This allocation of links may not be used in more than one (1) department at any one time. + + 2 + + CONFIDENTIAL + + v) A link to the Client Site (consistent with the format used on similar links on the same page) will be displayed in the "Shop Here First" promotional rotation on the front pages of the following departments of the Excite Shopping Channel subject to the following conditions: + + A) Client is allocated four (4) separate four-week link displays in the "Shop Here First" promotional rotation on the front page of departments of the Excite Shopping Channel other than the Auctions, Books or Gourmet & Groceries departments of the Excite Shopping Channel in each year of the term of the Agreement. This allocation of links may not be used in more than one (1) department at any one time. + + vi) A link to the Client Site (consistent with the format used on similar links on the same page) will be displayed in the WebCrawler Shopping Channel home page "Special Web Price!" promotional rotation in two separate one-week rotations during each year of the term of the Agreement, once every six (6) months. + + vii) A link to the Client Site (consistent with the format used on similar links on the same page) will be displayed in the WebCrawler Shopping Channel home page "Featured Merchants" promotional rotation in four separate one-week rotations during each year of the term of the Agreement, once every quarter. + + viii) A link or links to the Client Site (consistent with the format used on similar links on the same page) will be displayed on the WebCrawler Shopping Channel home page under the department listings, subject to the following conditions: + + A) Client is allocated eight (8) separate one-week link displays in each year of the term of the Agreement. Only one (1) link to the Client Site may be displayed on the WebCrawler Shopping Channel home page under the department listings at any one time. Links to the Client Site may not appear in more than four (4) different department listings during each year of the term of the Agreement. + + B) Links to the Client Site may not appear under the Auctions, Books or Home & Groceries department listings. + + C) The display of all links on the WebCrawler Shopping Channel home page under the department listings is subject to the availability at the time. + + 3 + + CONFIDENTIAL + + ix) A link to the Client Site (consistent with the format used on similar links on the same page) will be + + + + + + displayed on the front pages of the following departments of the WebCrawler Shopping Channel subject to the following conditions: + + A) A link to the Client Site will be displayed on the front page of four (4) departments of the WebCrawler Shopping Channel of Client's choice for the term of the Agreement, other than the Auctions, Books or Home & Groceries departments of the WebCrawler Shopping Channel. + + x) A link to the Client Site (consistent with the format used on similar links on the same page) will be displayed in the "Featured Merchants" promotional rotation on the front pages of the following departments of the WebCrawler Shopping Channel subject to the following conditions: + + A) Client is allocated four (4) separate four-week link displays in the "Featured Merchants" promotional rotation on the front page of departments of the WebCrawler Shopping Channel other than the Auctions, Books or Home & Groceries departments of the Excite Shopping Channel in each year of the term of the Agreement. This allocation of links may not be used in more than one (1) department at any one time. + + xi) Excite will deliver XXXXXXXXX impressions of the Client promotional placements described in this Section 1 during the first year of the term of this Agreement. Sixty (60) days prior to the end of the first year after the Launch Date, Excite and Client will negotiate in good faith to establish allocated number of impressions, advertising banners and promotional placements described in this Section 1 for the second year of the term of the Agreement. If the parties fail to reach agreement concerning performance details for the second year of the term, Client may cancel, effective on the later of the first anniversary of this Agreement or such time as Excite has delivered XXXXXXX clickthroughs, provided this latter date is not more than 16 months after the Launch Date. + +2. SPONSORSHIP OF EXCITE LIFESTYLE CHANNEL + + a) A link to the Client Site (consistent with the format used on similar links on the same page) will be displayed in the Excite Lifestyle Channel home page "Exciting Stuff" promotional rotation in one (1) one-week rotation each month during the term of the Agreement. Excite will make reasonable commercial + + 4 + + CONFIDENTIAL + + efforts to display this link during mutually-determined holiday weeks, subject to availability. + + b) A link to the Client Site (consistent with the format used on similar links on the same page) will be programmed in the default configuration of the "Favorite Links" listing of Web sites on the Home & Garden department home page of the Excite Lifestyle Channel during the term of the Agreement. Due to the user's control over the Web sites displayed in the "Favorite Links" listing, the parties acknowledge that Excite cannot guarantee or estimate the number of times Client's link in the "Favorite Links" listing will be displayed. + + c) Excite will deliver XXXXXXXXXXXXXXXX impressions of the Client promotional placements described in this Section 2 during the first year of the term of this Agreement. Sixty (60) days prior to the end of the first year after the Launch Date, Excite and Client will negotiate in good faith to establish allocated number of impressions, advertising banners and promotional placements described in this Section 2 for the second year of the term of the Agreement. If the parties fail to reach agreement concerning performance details for the second year of the term, Client may cancel, effective on the later of the first anniversary of this Agreement or such time as Excite has delivered XXXXXXX clickthroughs, provided this latter date is not more than 16 months after the Launch Date. + +3. SPONSORSHIP OF EXCITE ENTERTAINMENT CHANNEL + + a) A link to the Client Site (consistent with the format used on similar links on the same page) will be displayed in the "Exciting Stuff" promotional rotation on Client's choice or either the home page of the Music or Movies department of the Excite Entertainment Channel in one (1) one-week rotation each month during the term of the Agreement, subject to availability. Excite will make reasonable commercial efforts to display this link during mutually-determined + + + + + + holiday weeks, subject to availability. + + b) Excite will deliver XXXXXXXXXXXX impressions of the Client promotional placements described in this Section 3 during the first year of the term of this Agreement. Sixty (60) days prior to the end of the first year after the Launch Date, Excite and Client will negotiate in good faith to establish allocated number of impressions, advertising banners and promotional placements described in this Section 3 for the second year of the term of the Agreement. If the parties fail to reach agreement concerning performance details for the second year of the term, Client may cancel, effective on the later of the first anniversary of this Agreement or such time as Excite has delivered XXXXXXX clickthroughs, provided this latter date is not more than 16 months after the Launch Date. + + 5 + + CONFIDENTIAL + +4. SPONSORSHIP OF WEBCRAWLER HOME & FAMILY CHANNEL + + a) A link to the Client Site (consistent with the format used on similar links on the same page) will be displayed in the "Services" (or equivalent) promotional rotation on the home page of the WebCrawler Home & Family Channel in two (2) separate one-week rotations each year during the term of the Agreement, once every six (6) months. + + b) Excite will deliver XXXXXXXXXXXX impressions of the Client promotional placements described in this Section 4 during the first year of the term of this Agreement. Sixty (60) days prior to the end of the first year after the Launch Date, Excite and Client will negotiate in good faith to establish allocated number of impressions, advertising banners and promotional placements described in this Section 4 for the second year of the term of the Agreement. If the parties fail to reach agreement concerning performance details for the second year of the term, Client may cancel, effective on the later of the first anniversary of this Agreement or such time as Excite has delivered XXXXXXXX clickthroughs, provided this latter date is not more than 16 months after the Launch Date. + +5. ADVERTISING ON THE EXCITE SITE + + a) Excite will display Client's banner advertising on Excite Search results pages in response to mutually determined keywords, subject to availability. + + b) Excite will display Client's banner advertising in rotation on mutually determined Excite Channels, subject to availability. + + c) Excite guarantees the display of XXXXXX such banners during the first year of the term of the Agreement. Sixty (60) days prior to the end of the first year after the Launch Date, Excite and Client will negotiate in good faith to establish allocated number of impressions, advertising banners and promotional placements described in this Section 5 for the second year of the term of the Agreement. If the parties fail to reach agreement concerning performance details for the second year of the term, Client may cancel, effective on the later of the first anniversary of this Agreement or such time as Excite has delivered XXXXXXX clickthroughs, provided this latter date is not more than 16 months after the Launch Date. + + d) Excite will provide forty-eight (48) hour turnaround on replacing GIF banners supplied by Client. HTML advertising banners must be submitted by Client to Excite for review at least five (5) business days in advance of Excite + + 6 + + CONFIDENTIAL + + beginning implementation. After completing its review, Excite will implement approved HTML banners in no more than two (2) business days. + + e) Client may have up to twenty (20) different advertising banners in rotation for display during any one week. Excite will link Client's advertising banners to a maximum of twenty (20) different URLs submitted by Client. + +6. LAUNCH DATE, RESPONSIBILITY FOR EXCITE NETWORK AND REPORTING + + a) Client and Excite will use reasonable efforts to implement the display of the promotional placements and advertising described in the Agreement by April 15, 1998 (the "Launch Date"). + + b) Excite will have sole responsibility for providing, hosting and maintaining, at its expense, the Excite Network. Excite will have sole control over of the "look and feel" of the Excite Network + + + + + + including, but not limited to, the display, appearance and placement of the parties' respective names and/or brands and the promotional links. + + c) Excite will in "good faith" ensure Client that the above mentioned banners and promotional placements will be more prominently presented than any other "competitive retailer's" banners or promotional placements for the term of the Agreement. For the purposes of this Agreement, a "competitive retailer" means an on-line department store comparable to Bloomingdale's, Macy's, Burdine's, Shopping.com, Chef's Catalog or iQVC. + + d) Excite will provide Client with monthly reports substantiating the number of impressions of Client's advertising banners and promotional placements displayed on the Excite Network and the resulting number of clickthroughs to the Client's site. At the time that Excite makes audited impression reports available to its advertisers, Client will receive audited impression reports. + +7. SPONSORSHIP, ADVERTISING AND VARIABLE REVENUE SHARE FEES + + a) In exchange for XXXXXXXXXXXXXXXXXXXXXXXX the Client will pay Excite sponsorship and advertising fees of XXXXXXXXXXX for the first year of the term of the Agreement. These fees will be paid in equal monthly installments + + 7 + + CONFIDENTIAL + + of XXXXXXXXXXXXXXXXX. The first monthly payment will be due upon the display of the first of the promotional placements and advertising described in the Agreement. Subsequent installments will be due on a monthly basis thereafter. XXXXXXXXXXXXXXXXXXXXXX. + + b) In exchange for XXXXXXXXXXXXX the Client will pay Excite sponsorship and advertising fees of XXXXXXXXXXXXXXXXX for the second year of the term of the Agreement. These fees will be paid in equal monthly installments of XXXXXXXXXXXXXXXXXXXXXXX. The first monthly payment will be due upon the first anniversary of the display of the first of the promotional placements and advertising described in the Agreement. Subsequent installments will be due on a monthly basis thereafter. XXXXXXXXXXXXXXX. + + c) Excite will maintain accurate records of the XXXXXXXXXXX delivered under this Agreement as described in Sections 7(a) and 7(b). Should these results differ to those provided by Client's server by more than 10%, Client may, once per quarter during Excite's regular business hours and at Client's sole expense, review these records to verify the accuracy and appropriate accounting of XXXXXXXXX delivered pursuant to the Agreement. Should Client's review determine that Excite's XXXXXXXX results are inaccurate by 5% or more, then Excite shall pay for all reasonable costs incurred by Client for the review of Excite's records. + + 8 + + CONFIDENTIAL + + d) Separate and apart from the sponsorship and advertising fees paid for the XXXXXXXXXXXXXXXXXXXXXXXXXX detailed above in Sections 7(a) and 7(b), Client will pay Excite a variable revenue share to be calculated based on sales, excluding any and all amounts collected for sales tax, shipping and handling charges, and credits for returned goods and/or services, Client derives from visits to the Client Site via links from the promotional placements and advertising on the Excite Site described in Sections 1 - 5. Payments will be made according to the following schedule: + + i) For the year between the Launch Date and the first anniversary of the Launch Date: + + o For revenues between XXXXXXXXXXXXXXXX of sales, excluding any and all amounts collected for sales tax, shipping and handling charges, and credits for returned goods and/or services. + + o For revenues in excess of XXXXXXXXXXXXXXXXXXX of all sales, excluding any and all amounts collected for sales tax, shipping and handling charges, and credits for returned goods and/or services. + + ii) For the year between the first anniversary of the Launch Date and the second anniversary of the Launch Date: + + o For revenues between XXXXXXXXXXXXXX of sales, excluding any and all amounts collected for sales tax, shipping and handling charges, and credits for returned + + + + + + goods and/or services. o For revenues in excess of XXXXXXXXXXXXX of all sales, excluding any and all amounts collected for sales tax, shipping and handling charges, and credits for returned goods and/or services. + + o For revenues in excess of XXXXXXXXXXXXXXXXXXXXXX of all sales, excluding any and all amounts collected for sales tax, shipping and handling charges, and credits for returned goods and/or services. + + o For revenues in excess of XXXXXXX of all sales, excluding any and all amounts collected for sales tax, shipping and handling charges, and credits for returned goods and/or services. + + e) Client will pay Excite its variable revenue share payments within thirty (30) days after the close of each month. + + 9 + + CONFIDENTIAL + + f) The sponsorship and advertising fees and variable revenue share payments are net of any agency commissions to be paid by Client. + + g) Client will maintain accurate records with respect to the calculation of all variable revenue share payments due under this Agreement. Once per year, the parties will review these records to verify the accuracy and appropriate accounting of all payments made pursuant to the Agreement. In addition, Excite may, upon no less than thirty (30) days prior written notice to Client, cause an independent Certified Public Accountant to inspect the records of Client reasonably related to the calculation of such payments during Client's normal business hours. The fees charged by such Certified Public Accountant in connection with the inspection will be paid by Excite unless the payments made to Excite are determined to have been less than ninety-five percent (95%) of the payments actually owed to Excite, in which case Client will be responsible for the payment of the reasonable fees for such inspection. + +8. PUBLICITY + + Unless required by law, neither party will make any public statement, press release or other announcement relating to the terms of or existence of this Agreement without the prior written approval of the other. Such approval will not be unreasonably withheld. Notwithstanding the foregoing, the parties agree to issue an initial press release regarding the relationship between Excite and Client, the timing and wording of which will be mutually agreed upon. + +9. TERM AND TERMINATION + + a) The term of this Agreement will begin on the Launch Date and will not end until Excite displays of a total of XXXXXXXXXXXXX impressions of Client's advertising banners and promotional placements on the Excite Site and Excite has made reasonable commercial efforts to deliver, at minimum, a goal of XXXXXXXX clickthroughs to the Client Site. Regardless of Excite's actual delivery of impressions and clickthroughs, the term of this Agreement will not be shorter than two (2) years after the display of the first of Client's advertising banners and promotional placements, subject to the termination rights set forth below. + + b) Sixty (60) days prior to the end of the first year after the Launch Date, Excite and Client will negotiate in good faith to establish allocated number of impressions, advertising banners and promotional placements for the second year of the term of the Agreement. + + 10 + + CONFIDENTIAL + + c) Excite's goal is to deliver XXXXXXXXXXXXXXXXXXXXXXXX clickthroughs to the Client Site during the fourth through sixth months (inclusive) after the Launch Date, XXXXXXXXXXXXXXXX clickthroughs to the Client Site during the seventh through ninth months (inclusive) after the Launch Date, and XXXXXXXXXXXXXXXXXXXX clickthroughs to the Client Site during the ninth through twelfth months (inclusive) after the Launch Date. + + d) In the event that Excite has not delivered XXXXXXXXXXXXXXXX clickthroughs to the Client Site by the end of twelve (12) months after the Launch Date, the first year of the term of the Agreement will be extended without additional sponsorship and advertising fees for up to an additional four (4) months. In the event that Excite has not delivered XXXXXXXXXXXXXXXXXXXXX clickthroughs to the Client + + + + + + Site by end of the additional four-month period, Client may terminate this Agreement immediately upon delivery of written notice to Excite. + + e) Either party may terminate this Agreement if the other party materially breaches its obligations hereunder and such breach remains uncured for thirty (30) days following the notice to the breaching party of the breach. + + f) All undisputed payments that have accrued prior to the termination or expiration of this Agreement will be payable in full within thirty (30) days thereof. + + g) The provisions of Section 12 (Confidentiality and User Data), Section 13 (Indemnity), Section 14 (Limitation of Liability) and Section 15 (Dispute Resolution) will survive any termination or expiration of this Agreement. + +10. TRADEMARK OWNERSHIP AND LICENSE + + a) Client will retain all right, title and interest in and to its trademarks, service marks and trade names worldwide, subject to the limited license granted to Excite hereunder. + + b) Excite will retain all right, title and interest in and to its trademarks, service marks and trade names worldwide, subject to the limited license granted to Client hereunder. + + c) Each party hereby grants to the other a non-exclusive, limited license to use its trademarks, service marks or trade names only as specifically described in this Agreement. All such use shall be in accordance with each party's reasonable policies regarding advertising and trademark usage as established from time to time. + + 11 + + CONFIDENTIAL + + d) Upon the expiration or termination of this Agreement, each party will cease using the trademarks, service marks and/or trade names of the other except: + + i) As the parties may agree in writing; or + + ii) To the extent permitted by applicable law. + +11. CONTENT OWNERSHIP + + a) Client will retain all right, title and interest in and to the Client Site worldwide including, but not limited to, ownership of all copyrights and other intellectual property rights therein. + + b) Excite will retain all right, title, and interest in and to the Excite Network worldwide including, but not limited to, ownership of all copyrights, look and feel and other intellectual property rights therein. + +12. CONFIDENTIALITY AND USER DATA + + a) For the purposes of this Agreement, "Confidential Information" means information about the disclosing party's (or its suppliers') business or activities that is proprietary and confidential, which shall include all business, financial, technical and other information of a party marked or designated by such party as "confidential or "proprietary" or information which, by the nature of the circumstances surrounding the disclosure, ought in good faith to be treated as confidential. + + b) Confidential Information will not include information that (i) is in or enters the public domain without breach of this Agreement, (ii) the receiving party lawfully receives from a third party without restriction on disclosure and without breach of a nondisclosure obligation, (iii) the receiving party knew prior to receiving such information from the disclosing party or (iv) the receiving party develops independent of any information originating from the disclosing party. + + c) Each party agrees (i) that it will not disclose to any third party or use any Confidential Information disclosed to it by the other except as expressly permitted in this Agreement and (ii) that it will take all reasonable measures to maintain the confidentiality of all Confidential Information of the other party in its possession or control, which will in no event be less than the measures it uses to maintain the confidentiality of its own information of similar importance. + + 12 + + CONFIDENTIAL + + d) The usage reports provided by Excite to Client hereunder will be deemed to be the Confidential Information of Excite. + + + + + + e) The terms and conditions of this Agreement will be deemed to be Confidential Information and will not be disclosed without the written consent of the other party. + + f) For the purposes of this Agreement, "User Data" means all information pertaining to users referred to the Client Site from the Excite Network during the term of the Agreement that is not submitted by or collected from Users in connection with their purchases or other interactive activities while signed on to the Client Site. The parties acknowledge that any individual user of the Internet could be a user of Excite and/or Client through activities unrelated to this Agreement and that user data gathered independent of this Agreement, even from individuals who are users of both parties' services, will not be deemed to be "User Data" for the purposes of this Agreement. + + g) User Data will be deemed to be the joint property of the parties and, subject to the limitations contained herein, both parties will retain all rights to make use of any User Data obtained through this Agreement. + + h) Client will provide to Excite all User Data collected by Client within thirty (30) days following the end of each calendar month during the term of this Agreement in a mutually-determined electronic format. + + i) Client will not use User Data to directly or indirectly solicit any Excite users either individually or in the aggregate during the term of this Agreement and for a period of twelve (12) months following the expiration or termination of this Agreement. + + j) Neither party will sell, disclose, transfer or rent any User Data which could reasonably be used to identify a specific named individual ("Individual Data") to any third party nor will either party use Individual Data on behalf of any third party without the express permission of the individual user. Where user permission for dissemination of Individual Data to third parties has been obtained, each party will use commercially reasonable efforts to require the third party recipients of Individual Data to provide an "unsubscribe" feature in any email communications generated by, or on behalf of, the third party recipients of Individual Data. + + k) Notwithstanding the foregoing, each party may disclose Confidential Information or User Data (i) to the extent required by a court of competent jurisdiction or other governmental authority or otherwise as required by law or (ii) on a "need-to-know" basis under an obligation of confidentiality to its legal counsel, accountants, banks and other financing sources and their advisors. + + 13 + + CONFIDENTIAL + +13. INDEMNITY + + a) Client will indemnify, defend and hold harmless Excite, its affiliates, officers, directors, employees, consultants and agents from any and all third party claims, liability, damages and/or costs (including, but not limited to, attorneys fees) arising from: + + i) The breach of any representation or covenant in this Agreement; or + + ii) Any claim that Client's advertising banners infringe or violate any third party's copyright, patent, trade secret, trademark, right of publicity or right of privacy or contain any defamatory content; or + + iii) Any claim arising from content displayed on the Client Site. + + Excite will promptly notify Client of any and all such claims and will reasonably cooperate with Client with the defense and/or settlement thereof; provided that, if any settlement requires an affirmative obligation of, results in any ongoing liability to or prejudices or detrimentally impacts Excite in any way and such obligation, liability, prejudice or impact can reasonably be expected to be material, then such settlement shall require Excite's written consent (not to be unreasonably withheld or delayed) and Excite may have its own counsel in attendance at all proceedings and substantive negotiations relating to such claim. + + b) Excite will indemnify, defend and hold harmless Client, its affiliates, officers, directors, employees, consultants and agents from any and all third party claims, liability, damages and/or costs (including, but not limited to, attorneys fees) arising from: + + i) The breach of any representation or covenant in this Agreement; or + + ii) Any claim arising from the Excite Network other than content or services provided by Client. + + Client will promptly notify Excite of any and all such claims and + + + + + + will reasonably cooperate with Excite with the defense and/or settlement thereof; provided that, if any settlement requires an affirmative obligation of, results in any ongoing liability to or prejudices or detrimentally impacts Client in any way and such obligation, liability, prejudice or impact can reasonably be expected to be material, then such settlement shall require Client's written consent (not to be unreasonably withheld or delayed) and Client may have its own counsel in attendance at all proceedings and substantive negotiations relating to such claim. + + 14 + + CONFIDENTIAL + + c) EXCEPT AS SPECIFIED IN THIS AGREEMENT, NEITHER PARTY MAKES ANY WARRANTY IN CONNECTION WITH THE SUBJECT MATTER OF THIS AGREEMENT AND HEREBY DISCLAIMS ANY AND ALL IMPLIED WARRANTIES, INCLUDING ALL IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE REGARDING SUCH SUBJECT MATTER. + +14. LIMITATION OF LIABILITY + + EXCEPT UNDER SECTIONS 13(a) AND 13(b), IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, WHETHER BASED ON BREACH OF CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE, WHETHER OR NOT THAT PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE. THE LIABILITY OF EITHER PARTY FOR DAMAGES OR ALLEGED DAMAGES HEREUNDER, WHETHER IN CONTRACT, TORT OR ANY OTHER LEGAL THEORY, IS LIMITED TO, AND WILL NOT EXCEED, THE AMOUNTS TO BE PAID BY CLIENT TO EXCITE HEREUNDER. + +15. DISPUTE RESOLUTION + + a) The parties agree that any breach of either of the parties' obligations regarding trademarks, service marks or trade names, confidentiality and/or User Data would result in irreparable injury for which there is no adequate remedy at law. Therefore, in the event of any breach or threatened breach of a party's obligations regarding trademarks, service marks or trade names or confidentiality, the aggrieved party will be entitled to seek equitable relief in addition to its other available legal remedies in a court of competent jurisdiction. + + b) In the event of disputes between the parties arising from or concerning in any manner the subject matter of this Agreement, other than disputes arising from or concerning trademarks, service marks or trade names, confidentiality and/or User Data, the parties will first attempt to resolve the dispute(s) through good faith negotiation. In the event that the dispute(s) cannot be resolved through good faith negotiation, the parties will refer the dispute(s) to a mutually acceptable mediator. + + c) In the event that disputes between the parties arising from or concerning in any manner the subject matter of this Agreement, other than disputes arising from or concerning trademarks, service marks or trade names, confidentiality and/or User Data, cannot be resolved through good faith negotiation and mediation, the parties will refer the dispute(s) to the American Arbitration Association for resolution through binding arbitration by a single arbitrator + + 15 + + CONFIDENTIAL + + pursuant to the American Arbitration Association's rules applicable to commercial disputes. + +16. GENERAL + + a) Assignment. Neither party may assign this Agreement, in whole or in part, without the other party's written consent (which will not be unreasonably withheld), except that no such consent will be required in connection with (i) a merger, reorganization or sale of all, or substantially all, of such party's assets or (ii) either party's assignment and/or delegation of its rights and responsibilities hereunder to a wholly-owned subsidiary or joint venture in which the assigning party holds an interest. Any attempt to assign this Agreement other than as permitted above will be null and void. + + b) Governing Law. This Agreement will be governed by and construed in accordance with the laws of the State of New York, notwithstanding the actual state or country of residence or incorporation of Excite or Client. + + c) Notice. Any notice under this Agreement will be in writing and delivered by personal delivery, express courier, confirmed facsimile, confirmed email or certified or registered mail, return receipt requested, and will be deemed given upon personal delivery, one (1) day after deposit with express courier, upon confirmation of receipt of facsimile or email or five (5) days after deposit in the mail. Notices will be sent to a party at its address set forth in this Agreement or such other address as that party may specify in + + + + + + writing pursuant to this Section. + + d) No Agency. The parties are independent contractors and will have no power or authority to assume or create any obligation or responsibility on behalf of each other. This Agreement will not be construed to create or imply any partnership, agency or joint venture. + + e) Force Majeure. Any delay in or failure of performance by either party under this Agreement will not be considered a breach of this Agreement and will be excused to the extent caused by any occurrence beyond the reasonable control of such party including, but not limited to, acts of God, power outages and governmental restrictions. + + f) Severability. In the event that any of the provisions of this Agreement are held to be unenforceable by a court or arbitrator, the remaining portions of the Agreement will remain in full force and effect. + + g) Entire Agreement. This Agreement is the complete and exclusive agreement between the parties with respect to the subject matter hereof, superseding any prior agreements and communications (both written and oral) regarding + + 16 + + CONFIDENTIAL + + such subject matter. This Agreement may only be modified, or any rights under it waived, by a written document executed by both parties. + + h) Counterparts. This Agreement may be executed in counterparts, each of which will serve to evidence the parties' binding agreement. + +CyberShop Excite, Inc. + +By: /s/ Jill Markus By: /s/ Robert C. Hood --------------------------- ----------------------------------- + +Name: Jill Markus Name: Robert C. Hood ------------------------ -------------------------------- + +Title: V.P. Store Development Title: Exec. VP-Chief Financial Officer ------------------------ -------------------------------- + +Date: March 31, 1998 Date: March 31, 1998 ------------------------- --------------------------------- + +130 Madison Avenue 555 Broadway New York, New York 10016 Redwood City, California 94063 212.532.3553 (voice) 650.568.6000 (voice) 212.532.3613 (fax) 650.568.6030 (fax) + + 17 \ No newline at end of file diff --git a/full_contract_txt/GULFSOUTHMEDICALSUPPLYINC_12_24_1997-EX-4-AFFILIATE AGREEMENT.txt b/full_contract_txt/GULFSOUTHMEDICALSUPPLYINC_12_24_1997-EX-4-AFFILIATE AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..fad32960d2dcdc614bc721f4236a4580cef05d65 --- /dev/null +++ b/full_contract_txt/GULFSOUTHMEDICALSUPPLYINC_12_24_1997-EX-4-AFFILIATE AGREEMENT.txt @@ -0,0 +1,321 @@ +EXHIBIT 4 AFFILIATE AGREEMENT ------------------- + +Physician Sales & Service, Inc. 4345 Southpoint Boulevard Jacksonville, Florida 32216 + +Attention: Patrick C. Kelly David A. Smith + +Gentlemen: + + The undersigned is a shareholder of Gulf South Medical Supply, Inc. ("GSMS"), a corporation organized and existing under the laws of the State of Delaware, and will become a shareholder of Physician Sales & Service, Inc. ("PSS"), a corporation organized and existing under the laws of the State of Florida, pursuant to the transactions described in the Agreement and Plan of Merger, dated as of December 14, 1997 (the "Agreement"), by and among PSS, PSS Merger Corp. ("Merger Corp.") and GSMS. Under the terms of the Agreement, Merger Corp. will be merged into and with GSMS (the "Merger"), and the shares of the $.01 par value common stock of GSMS ("GSMS Common Stock") will be converted into and exchanged for shares of the $.01 par value common stock of PSS ("PSS Common Stock"). This Affiliate Agreement represents an agreement between the undersigned and PSS regarding certain rights and obligations of the undersigned in connection with the shares of PSS to be received by the undersigned as a result of the Merger. + + In consideration of the Merger and the mutual covenants contained herein, the undersigned and PSS hereby agree as follows: + + 1. Affiliate Status. The undersigned understands and agrees that as to ---------------- GSMS he is an "affiliate" under Rule 145(c) as defined in Rule 405 of the Rules and Regulations of the Securities and Exchange Commission ("SEC") under the Securities Act of 1933, as amended ("1933 Act"), and the undersigned anticipates that he will be such an "affiliate" at the time of the Merger. + + 2. Initial Restriction on Disposition. The undersigned agrees that he ---------------------------------- will not sell, transfer, or otherwise dispose of his interests in, or reduce his risk relative to, any of the shares of PSS Common Stock into which his shares of GSMS Common Stock are converted upon consummation of the Merger until such time as PSS notifies the undersigned that the requirements of SEC Accounting Series Release Nos. 130 and 135 ("ASR 130 and 135") have been met. The undersigned understands that ASR 130 and 135 relate to publication of financial results of post-Merger combined operations of PSS and GSMS. PSS agrees that it will publish such results as promptly as practicable following the Merger in the sole discretion of PSS, but in any event within 45 days after the end of the first fiscal quarter of PSS containing the required period of post-Merger combined operations and that it will notify the undersigned promptly following such publication. + + 3. Covenants and Warranties of Undersigned. The undersigned represents, --------------------------------------- warrants and agrees that: + + (a) The PSS Common Stock received by the undersigned as a result of the Merger will be taken for his own account and not for others, directly or indirectly, in whole or in part. + + (b) PSS has informed the undersigned that any distribution by the undersigned of PSS Common Stock has not been registered under the 1933 Act and that shares of PSS Common Stock received pursuant to the Merger can only be sold by the undersigned (1) following registration under the 1933 Act, or (2) in conformity with the volume and other requirements of Rule 145(d) promulgated by the SEC as the same now exist or may hereafter be amended, or (3) to the extent some other exemption from registration under the 1933 Act might be available. The undersigned understands that PSS is under no ------------------------------------------------ obligation to file a registration statement with the SEC covering the --------------------------------------------------------------------- disposition of the undersigned's shares of PSS Common ----------------------------------------------------- + + Stock or to take any other action necessary to make compliance with an ---------------------------------------------------------------------- exemption from such registration available. ------------------------------------------ + + (c) During the 30 days immediately preceding the Effective Time of the Merger, the undersigned has not sold, transfered, or otherwise disposed of his interests in, or reduced his risk relative to, any of the shares of GSMS Common Stock beneficially owned by the undersigned as of the record date for determination of shareholders entitled to vote at the Shareholders' Meeting of GSMS held to approve the Merger. + + (d) The undersigned is aware that PSS intends to treat the Merger as a tax- free reorganization under Section 368 of the Internal Revenue Code ("Code") + + + + + + for federal income tax purposes. The undersigned agrees to treat the transaction in the same manner as PSS for federal income tax purposes. The undersigned acknowledges that Section 1.368-1(b) of the Income Tax Regulations requires "continuity of interest" in order for the Merger to be treated as tax-free under Section 368 of the Code. This requirement is satisfied if, taking into account those GSMS shareholders who receive cash in exchange for their stock, who receive cash in lieu of fractional shares, or who dissent from the Merger, there is no plan or intention on the part of the GSMS shareholders to sell or otherwise dispose of the PSS Common Stock to be received in the Merger that will reduce such shareholders' ownership to a number of shares having, in the aggregate, a value at the time of the Merger of less than 50% of the total fair market value of the GSMS Common Stock outstanding immediately prior to the Merger. The undersigned has no prearrangement, plan or intention to sell or otherwise dispose of an amount of his PSS Common Stock to be received in the Merger which would cause the foregoing requirement not to be satisfied. + + 4. Restrictions on Transfer. The undersigned understands and agrees that ------------------------ stop transfer instructions with respect to the shares of PSS Common Stock received by the undersigned pursuant to the Merger will be given to PSS's transfer agent and that there will be placed on the certificates for such shares, or shares issued in substitution thereof, a legend stating in substance: + + "The shares represented by this certificate were issued pursuant to a business combination which is accounted for as a "pooling of interests" and may not be sold, nor may the owner thereof reduce his risks relative thereto in any way, until such time as PSS, Inc. ("PSS") has published the financial results covering at least 30 days of combined operations after the effective date of the merger through which the business combination was effected. In addition, the shares represented by this certificate may not be sold, transferred or otherwise disposed of except or unless (1) covered by an effective registration statement under the Securities Act of 1933, as amended, (2) in accordance with (i) Rule 145(d) (in the case of shares issued to an individual who is not an affiliate of PSS) or (ii) Rule 144 (in the --- case of shares issued to an individual who is an affiliate of PSS) of the Rules and Regulations of such Act, or (3) in accordance with a legal opinion satisfactory to counsel for PSS that such sale or transfer is otherwise exempt from the registration requirements of such Act." + +Such legend will also be placed on any certificate representing PSS securities issued subsequent to the original issuance of the PSS Common Stock pursuant to the Merger as a result of any transfer of such shares or any stock dividend, stock split, or other recapitalization as long as the PSS Common Stock issued to the undersigned pursuant to the Merger has not been transferred in such manner to justify the removal of the legend therefrom. Upon the request of the undersigned, PSS shall cause the certificates representing the shares of PSS Common Stock issued to the undersigned in connection with the Merger to be reissued free of any legend relating to restrictions on transfer by virtue of ASR 130 and 135 as soon as practicable after the requirements of ASR 130 and 135 have been met. In addition, if the provisions of Rules 144 and 145 are amended to eliminate restrictions applicable to the PSS Common Stock received by the undersigned pursuant to the Merger, or at the expiration of the restrictive period set forth in Rule 145(d), PSS, upon the request of the undersigned, will cause the certificates representing the shares of PSS Common Stock issued to the undersigned in connection with the Merger to be reissued free of any legend relating to the restrictions set forth in Rules 144 and 145(d) upon receipt by PSS of an opinion of its counsel to the effect that such legend may be removed. + + - 2 - + + 5. Understanding of Restrictions on Dispositions. The undersigned has --------------------------------------------- carefully read the Agreement and this Affiliate Agreement and discussed their requirements and impact upon his ability to sell, transfer, or otherwise dispose of the shares of PSS Common Stock received by the undersigned, to the extent he believes necessary, with his counsel or counsel for GSMS. + + 6. Filing of Reports by PSS. PSS agrees, for a period of three years ------------------------ after the effective date of the Merger, to file on a timely basis all reports required to be filed by it pursuant to Section 13 of the Securities Exchange Act of 1934, as amended, so that the public information provisions of Rule 145(d) promulgated by the SEC as the same are presently in effect will be available to the undersigned in the event the undersigned desires to transfer any shares of PSS Common Stock issued to the undersigned pursuant to the Merger. + + 7. Transfer Under Rule 145(d). If the undersigned desires to sell or -------------------------- otherwise transfer the shares of PSS Common Stock received by him in connection with the Merger at any time during the restrictive period set forth in Rule 145(d), the undersigned will provide the necessary representation letter to the transfer agent for PSS Common Stock together with such additional information as the transfer agent may reasonably request. If PSS's counsel concludes that such proposed sale or transfer complies with the requirements of Rule 145(d), PSS shall cause such counsel to provide such opinions as may be necessary to PSS's Transfer Agent so that the undersigned may complete the proposed sale or transfer. + + 8. Acknowledgments. The undersigned recognizes and agrees that the --------------- foregoing provisions also apply to all shares of the capital stock of GSMS and PSS that are deemed to be beneficially owned by the undersigned pursuant to applicable federal securities laws, which the undersigned agrees may include, + + + + + +without limitation, shares owned or held in the name of (i) the undersigned's spouse, (ii) any relative of the undersigned or of the undersigned's spouse who has the same home as the undersigned, (iii) any trust or estate in which the undersigned, the undersigned's spouse, and any such relative collectively own at least a 10% beneficial interest or of which any of the foregoing serves as trustee, executor, or in any similar capacity, and (iv) any corporation or other organization in which the undersigned, the undersigned's spouse and any such relative collectively own at least 10% of any class of equity securities or of the equity interest. The undersigned further recognizes that, in the event that the undersigned is a director or officer of PSS or becomes a director or officer of PSS upon consummation of the Merger, among other things, any sale of PSS Common Stock by the undersigned within a period of less than six months following the effective time of the Merger may subject the undersigned to liability pursuant to Section 16(b) of the Securities Exchange Act of 1934, as amended. + + 9. Miscellaneous. This Affiliate Agreement is the complete agreement ------------- between PSS and the undersigned concerning the subject matter hereof. Any notice required to be sent to any party hereunder shall be sent by registered or certified mail, return receipt requested, using the addresses set forth herein or such other address as shall be furnished in writing by the parties. This Affiliate Agreement shall be governed by the laws of the State of Delaware. + + - 3 - + + This Affiliate Agreement is executed as of the 14th day of December, 1997. + + Very truly yours, + + /s/ William W. McInnes ___________________________ Signature + + William W. McInnes ___________________________ Print Name 116 30th Avenue S ____________________________ Nashville, TN 37212 ____________________________ Address + + [add below the signatures of all registered owners of shares deemed beneficially owned by the affiliate] + + ___________________________ Name: + + ___________________________ Name: + + ___________________________ Name: + +AGREED TO AND ACCEPTED as of December 14, 1997 + +PHYSICIAN SALES & SERVICE, INC. + + /s/ David A. Smith BY:_________________________ + + -4- + + This Affiliate Agreement is executed as of the 14th day of December, 1997. + + Very truly yours, + + /s/ Edward Shulman ___________________________ Signature + + Edward Shulman ___________________________ Print Name 5909 Dalecross CT ____________________________ Glen Allen, VA 23060 ____________________________ Address + + [add below the signatures of all registered owners of shares deemed beneficially owned by the affiliate] + + + + + + ___________________________ Name: + + ___________________________ Name: + + ___________________________ Name: + +AGREED TO AND ACCEPTED as of December 14, 1997 + +PHYSICIAN SALES & SERVICE, INC. + + /s/ David A. Smith BY:_________________________ + + -4- + + This Affiliate Agreement is executed as of the 14th day of December, 1997. + + Very truly yours, + + /s/ Donna C.E. Williamson ___________________________ Signature + + Donna C.E. Williamson ___________________________ Print Name ____________________________ ____________________________ Address + + [add below the signatures of all registered owners of shares deemed beneficially owned by the affiliate] + + ___________________________ Name: + + ___________________________ Name: + + ___________________________ Name: + +AGREED TO AND ACCEPTED as of December 14, 1997 + +PHYSICIAN SALES & SERVICE, INC. + + /s/ David A. Smith BY:_________________________ + + - 4 - + + This Affiliate Agreement is executed as of the 14th day of December, 1997. + + Very truly yours, + + /s/ David L. Bogetz ___________________________ Signature + + David L. Bogetz ___________________________ Print Name ____________________________ ____________________________ Address + + [add below the signatures of all registered owners of shares deemed beneficially owned by the affiliate] + + ___________________________ Name: + + + + + + ___________________________ Name: + + ___________________________ Name: + +AGREED TO AND ACCEPTED as of December 14, 1997 + +PHYSICIAN SALES & SERVICE, INC. + + /s/ David A. Smith BY:_________________________ + + -4- + + This Affiliate Agreement is executed as of the 14th day of December, 1997. + + Very truly yours, + + /s/ Melvin L. Hecktman ___________________________ Signature + + Melvin L. Hecktman ___________________________ Print Name 530 Waters Edge Ct ____________________________ Northbrook, IL 60062 ____________________________ Address + + [add below the signatures of all registered owners of shares deemed beneficially owned by the affiliate] + + ___________________________ Name: + + ___________________________ Name: + + ___________________________ Name: + +AGREED TO AND ACCEPTED as of December 14, 1997 + +PHYSICIAN SALES & SERVICE, INC. + + /s/ David A. Smith BY:_________________________ + + -4- + + This Affiliate Agreement is executed as of the 14th day of December, 1997. + + Very truly yours, + + /s/ Thomas G. Hixon ___________________________ Signature + + Thomas G. Hixon ___________________________ Print Name 165 Butler Drive ____________________________ Ridgeland, MS 39154 ____________________________ Address + + [add below the signatures of all registered owners of shares deemed beneficially owned by the affiliate] + + ___________________________ Name: + + ___________________________ + + + + + + Name: + + ___________________________ Name: + +AGREED TO AND ACCEPTED as of December 14, 1997 + +PHYSICIAN SALES & SERVICE, INC. + + /s/ David A. Smith BY:_________________________ + + -4- + + This Affiliate Agreement is executed as of the 14th day of December, 1997. + + Very truly yours, + + /s/ Steve Richardson ___________________________ Signature + + Steve Richardson ___________________________ Print Name 194 Sunsan Road ____________________________ Madison, MS 39116 ____________________________ Address + + [add below the signatures of all registered owners of shares deemed beneficially owned by the affiliate] + + ___________________________ Name: + + ___________________________ Name: + + ___________________________ Name: + +AGREED TO AND ACCEPTED as of December 14, 1997 + +PHYSICIAN SALES & SERVICE, INC. + + /s/ David A. Smith BY:_________________________ + + -4- + + This Affiliate Agreement is executed as of the 14th day of December, 1997. + + Very truly yours, + + /s/ Guy W. Edwards ___________________________ Signature + + Guy W. Edwards ___________________________ Print Name 567 Arbor Drive ____________________________ Madison, MS 39110 ____________________________ Address + + [add below the signatures of all registered owners of shares deemed beneficially owned by the affiliate] + + ___________________________ Name: + + ___________________________ Name: + + + + + + ___________________________ Name: + +AGREED TO AND ACCEPTED as of December 14, 1997 + +PHYSICIAN SALES & SERVICE, INC. + + /s/ David A. Smith BY:_________________________ + + -4- + + This Affiliate Agreement is executed as of the 14th day of December, 1997. + + Very truly yours, + + /s/ Stanton Keith Pritchard ___________________________ Signature + + Stanton Keith Pritchard ___________________________ Print Name #3 Abbey Nord ____________________________ Jackson, MS 39216 ____________________________ Address + + [add below the signatures of all registered owners of shares deemed beneficially owned by the affiliate] + + ___________________________ Name: + + ___________________________ Name: + + ___________________________ Name: + +AGREED TO AND ACCEPTED as of December 14, 1997 + +PHYSICIAN SALES & SERVICE, INC. + + /s/ David A. Smith BY:_________________________ + + -4- + + This Affiliate Agreement is executed as of the 14th day of December, 1997. + + Very truly yours, + + /s/ Louie Vaughan ___________________________ Signature + + Louie Vaughan ___________________________ Print Name 318 Woodrun Drive ____________________________ Ridgeland, MS 39157 ____________________________ Address + + [add below the signatures of all registered owners of shares deemed beneficially owned by the affiliate] + + ___________________________ Name: + + ___________________________ Name: + + ___________________________ Name: + + + + + +AGREED TO AND ACCEPTED as of December 14, 1997 + +PHYSICIAN SALES & SERVICE, INC. + + /s/ David A. Smith BY:_________________________ + + -4- \ No newline at end of file diff --git a/full_contract_txt/GWG HOLDINGS, INC. - ORDERLY MARKETING AGREEMENT.txt b/full_contract_txt/GWG HOLDINGS, INC. - ORDERLY MARKETING AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..42bdda0b97878fc724f1ad127e345b6a32ca6faf --- /dev/null +++ b/full_contract_txt/GWG HOLDINGS, INC. - ORDERLY MARKETING AGREEMENT.txt @@ -0,0 +1,131 @@ +Exhibit 10.3 Execution Version GWG HOLDINGS, INC., AND THE TRUST ADVISORS TO THE SELLER TRUSTS LISTED ON SCHEDULE A HERETO ORDERLY MARKETING AGREEMENT December 27, 2018 + + + + + +ORDERLY MARKETING AGREEMENT THIS ORDERLY MARKETING AGREEMENT (the "OMA") is entered into on December 27, 2018 (the "Effective Date") by and among GWG Holdings, Inc., a Delaware corporation ("GWG"), and the Trust Advisors to the Seller Trusts listed on Schedule A hereto (the "Trust Advisors"), and any other person or entity that becomes a party to this Agreement by executing and delivering a joinder hereto in the form attached as Exhibit A. Each of GWG and the Trust Advisors may be referred to herein as a "Party" and collectively as the "Parties." WHEREAS, on January 18, 2018, GWG, the Trust Advisors and certain other entities entered into that certain Amended and Restated Master Exchange Agreement, with effect from January 12, 2018, as amended from time to time (the "Master Agreement"); and WHEREAS, the Trust Advisors are at all times acting hereunder as the representatives of and for the benefit of each Seller Trust named in the Master Agreement; WHEREAS, pursuant to Section 8.6 of the Master Agreement, GWG and the Trust Advisors agree to negotiate in good faith the terms of an agreement with one or more nationally recognized bulge bracket investment banks for the orderly marketing and resale of certain shares (the "Shares") of common stock, par value $0.001 per share (the "Stock") of GWG issued in reliance upon available exemptions from the Securities Act of 1933, as amended (the "Act"), under the terms of the Master Agreement to such Seller Trusts for the purpose of facilitating the establishment of a broader shareholder base and creating on-going liquidity in Stock; WHEREAS, contemporaneous with the execution of this OMA, the Trust Advisors and certain other entities are entering into a registration rights agreement (the "Registration Rights Agreement") pursuant to which GWG is agreeing to file a registration statement on Form S-1 or other appropriate form (the "Registration Statement") with the Securities and Exchange Commission ("SEC") for the public offering of the Shares; WHEREAS, the entry into this OMA is a condition to the obligation of each of GWG and the Seller Trusts to consummate the various transactions contemplated by the Master Agreement; NOW, THEREFORE, FOR GOOD AND VALUABLE CONSIDERATION, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows: Section 1. Orderly Marketing. 1.1 The shares of Stock held by each Seller Trust and subject to this OMA shall be as set out on Schedule A hereto, which Schedule may be amended from time to time in writing by the Parties in accordance with Section 4.1 below. 1.2 It is the goal of the Seller Trusts to have all of the Shares sold, on a pro-rata basis, in three or more tranches (each a "Tranche") commencing not earlier than six (6) months after the Effective Date with the resale of all of the shares of Stock completed as soon as practicable after the Effective Date. + +- 2 - + + + + + +1.3 [Reserved]. 1.4 The Seller Trusts and GWG intend to retain one or more nationally recognized bulge bracket investment banks (the "Bank") for the orderly marketing and resale of Shares pursuant to a separate engagement letter (the "Engagement Letter") to advise them in connection with the sale of the Tranches (together, the "Offerings"). Such Engagement Letter shall include customary representations, warranties, covenants and indemnification provisions. The services to be performed by the Bank shall be set forth in such Engagement Letter and are expected to include, among others: (a) assisting in the drafting and preparation of one or more prospectus supplements describing GWG, the Shares and the terms of the Offerings; (b) advising the Seller Trusts on a marketing and distribution strategy for each Tranche of Shares, including whether a particular Tranche should be sold through a block trade, overnight bookbuild, or similar transaction; (c) assisting GWG in preparing marketing materials and conducting one or more "roadshows" and meetings with potential purchasers of the Shares; (d) advising the Seller Trusts as to the timing, structure and pricing of the Offerings; (e) providing other advisory services as are customary for similar transactions. The Engagement Letter shall include a requirement that, prior to any distribution of Stock by the Bank as contemplated by this Agreement, the Bank shall consult with each of GWG and the Trust Advisors as to the strategy for the marketing, sale and distribution of the respective Tranche. 1.5 After the Parties have agreed on the strategy for the marketing, sale and distribution of a Tranche, the Seller Trusts shall offer the Bank the right to serve as the lead left joint-book-running manager in connection with a best efforts distribution. GWG shall be entitled to appoint, in its discretion, an additional bank as joint book-running manager to participate in the distribution. The Seller Trusts further agree that in the event the Bank accepts such role it will be paid customary fees for the performance of its services in connection with such transactions and that such engagement will involve the execution of a standard form agreement with respect to the distribution of each Tranche, which may be in the form of a placement agency agreement, underwriting agreement or other appropriate agreement (each, a "Distribution Agreement"); provided, however, that nothing contained in this OMA or Engagement Letter shall require the Bank to underwrite or purchase all or any portion of a Tranche of Stock for its own account. Notwithstanding the foregoing, it is understood and agreed that the Bank or its affiliates may, solely at its discretion and without any obligation to do so, purchase Stock in any Tranche as principal. + +- 3 - + + + + + +1.6 Each such Distribution Agreement shall set out the customary terms and conditions for the sale and distribution of the respective Tranche, including customary representations, warranties, covenants and indemnification provisions. For the avoidance of doubt, each Distribution Agreement shall include provisions to the following effect: (i) GWG shall have no responsibility for the payment of fees or commissions payable to the Bank, which fees and commissions shall be the responsibility of certain affiliates of the Seller Trusts as set forth in the applicable Distribution Agreement; and (ii) each of GWG and the Seller Trusts shall agree to provide a customary indemnity in favor of the Bank and its affiliates. 1.7 If, in connection with the marketing, sale and distribution of a Tranche, the Bank determines that the number of Shares of Stock proposed to be included in the Tranche exceeds the number that can reasonably be sold, then the number of Shares of Stock shall be reduced accordingly on a pro-rata basis with respect to each of the Seller Trusts. 1.8 Prior to the offering of each Tranche, GWG shall provide the placement agents or underwriters in such Offering a list of the top 100 institutional holders of the Common Stock. In connection with any Offering, the Seller Trusts shall instruct the placement agents or underwriters to use their reasonable best efforts to (i) effect as wide a distribution of the Shares as is reasonably practicable without adversely affecting the pricing thereof and (ii) not sell any Shares to any person or Group (as such terms is used in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) who, upon completion of the Offering, would have Beneficial Ownership (as defined in Rule 13d-3 under the Exchange Act) of shares of Common Stock representing in the aggregate 5.0% or more the total number of outstanding shares of Common Stock (or in the case of a person of the type described in Rule 13d-1(b)(1)(i) under the Exchange Act, 10% or more of the Total Voting Power). Section 2. Compensation. The Engagement Letter shall provide that the Bank shall not be entitled to any compensation for its advice hereunder or reimbursement of its expenses in connection with this OMA and shall only be entitled to compensation in connection with an Offering as provided in the Engagement Letter and related Distribution Agreement with respect to such Offering. Section 3. [Reserved] Section 4. General Provisions. 4.1 Term; Termination; Withdrawal of Bank. (a) This OMA shall expire upon the earlier of (i) the first anniversary of the Effective Date and (ii) the date that all Shares of Stock of the Seller Trusts as set forth on Schedule A hereto have been sold (the "Term"). Notwithstanding the foregoing, this OMA may be terminated with or without cause at any time after the Effective Date and without liability or continuing obligation by any of the Parties hereto (i) by mutual written agreement of all of the Parties; and (ii) in writing by the Trust Advisors in their sole discretion. + +- 4 - + + + + + +(b) The Engagement Letter shall provide that the Bank may terminate its engagement at any time upon not less than 45 days' prior written notice to the other Parties. In the event the Bank provides such notice at any time prior to the sale of greater than 50% of the Shares and within 12 months of the Effective Date, then GWG and the Trust Advisors may elect (A) to terminate this OMA or (B) to continue this OMA and to seek to appoint a substitute investment bank, in which case GWG, after consultation with the Trust Advisors, shall be entitled to appoint a substitute investment bank to serve as the lead joint-book-running manager for the sale of the Shares. In the event the Bank terminates the Engagement Letter at any time following the sale of greater than 50% of the Shares and within 12 months of the Effective Date, the termination thereof shall constitute a concurrent Termination of this OMA. 4.2 Amendments and Waivers. This OMA may be amended or modified in whole or in part, only by duly authorized agreement in writing executed by each of the Parties. 4.3 Notices. All notices and other communications among the Parties shall be in writing and shall be deemed to have been duly given (i) when delivered in person, (ii) when delivered after posting in the United States mail having been sent registered or certified mail return receipt requested, postage prepaid, (iii) when delivered by FedEx or other nationally recognized overnight delivery service or (iv) when received by facsimile or email (provided that a copy is subsequently delivered by one of the other methods permitted in (i) through (iii) of this Section 4.3), addressed as follows: If to GWG: 220 S. Sixth Street, Suite 1200 Minneapolis, MN 55402 Attention: Jon R. Sabes, CEO Email: jsabes@gwglife.com If to the Trust Advisors on behalf of the Seller Trusts: Jeffrey S. Hinkle Murray T. Holland As Trust Advisors to Each of the Seller Trusts set forth on Schedule A hereto c/o The Beneficient Company Group, L.P. 325 N. St. Paul Street, Suite 4850 Dallas, Texas 75201 Email: jhinkle@beneficient.com; mholland@mhtpartners.com + +- 5 - + + + + + +4.4 Assignments and Transfers by Seller Trusts. The provisions of this OMA shall be binding upon and inure to the benefit of the Seller Trusts and their respective successors and assigns. A Seller Trust may transfer or assign, in whole or from time to time in part, to one or more liquidating trusts its rights hereunder in connection with the transfer or resale of Stock held by such Seller Trust, provided that such Seller Trust complies with all laws applicable thereto and provides written notice of assignment to GWG promptly after such assignment is effected, and provided further that such liquidating trust and each beneficiary thereof executes a joinder to this OMA effective as of the date of such assignment or transfer. 4.5 Counterparts. This OMA may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 4.6 Severability. Any provision of this OMA that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof but shall be interpreted as if it were written so as to be enforceable to the maximum extent permitted by applicable law, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. To the extent permitted by applicable law, the Parties hereby waive any provision of law which renders any provisions hereof prohibited or unenforceable in any respect. 4.7 Further Assurances. The Parties shall execute and deliver all such further instruments and documents and take all such other actions as may reasonably be required to carry out the transactions contemplated hereby and to evidence the fulfillment of the agreements herein contained. 4.8 Entire Agreement. This OMA is intended by the Parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the Parties hereto in respect of the subject matter contained herein. This OMA supersedes all prior agreements and understandings between the Parties with respect to such subject matter. 4.9 Governing Law; Consent to Jurisdiction; Waiver of Jury Trial. This OMA, and all claims or causes of action (whether in contract or tort) that may be based upon, arise out of or relate to this OMA or the negotiation, execution or performance of this OMA (including any claim or cause of action based upon, arising out of or related to any representation or warranty made in or in connection with this OMA), will be construed in accordance with and governed by the law of the State of New York without regard to principles of conflicts of laws that would result in the application of the law of any other jurisdiction. Any action against any Party relating to the foregoing shall be brought in any federal or state court of competent jurisdiction located within the State of New York, and the Parties hereto hereby irrevocably submit to the non-exclusive jurisdiction of any federal or state court located within the State of New York over any such action. The Parties hereby irrevocably waive, to the fullest extent permitted by applicable law, any objection which they may now or hereafter have to the laying of venue of any such dispute brought in such court or any defense of inconvenient forum for the maintenance of such dispute. Each of the Parties hereto agrees that a judgment in any such dispute may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. + +- 6 - + + + + + +EACH PARTY TO THIS AGREEMENT HEREBY WAIVES, AND AGREES TO CAUSE ITS AFFILIATES TO WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (A) ARISING UNDER THIS AGREEMENT OR (B) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO IN RESPECT OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS RELATED HERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE. EACH PARTY TO THIS AGREEMENT HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT THE PARTIES TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. 4.10 Certain Representations of the Parties. Each of the Parties hereto represents, several and not jointly, that it has taken all action required of it to duly authorize this OMA and that no further action or approval is required on its behalf and, when executed and delivered, this OMA constitutes a valid and binding obligation of such Party, enforceable in accordance with its terms. 4.11 Further Assurances. Each Party agrees to take such further action that may be reasonably required of it, and to execute such documents or instruments, in order to effectuate the transactions contemplated by this OMA. 4.12 Seller Trusts and Trust Advisors. It is expressly understood and agreed that (a) this document is executed and delivered by Delaware Trust Company, not individually or personally, but solely as Trustee, pursuant to direction from the Trust Advisors and in the exercise of the powers and authority conferred and vested in Delaware Trust Company as Trustee pursuant to the Trust Agreements of the Seller Trusts (the "Trust Agreements") and the Trustee is governed by and subject to the Trust Agreements and entitled to the protections, rights and benefits contained therein, (b) each of the representations, undertakings and agreements herein made on the part of the Seller Trusts and Trust Advisors is made and intended not as personal representations, undertakings and agreements by Delaware Trust Company but is made and intended for the purpose for binding only the Seller Trusts and respective trust estates (the "Seller Trust Assets"), (c) nothing herein contained shall be construed as creating any liability on Delaware Trust Company, individually or personally, to perform any covenant either expressed or implied contained herein, all such liability, if any, being expressly waived by the parties hereto and by any person claiming by, through or under the parties hereto, (d) under no circumstances shall Delaware Trust Company be personally liable for the payment of any indebtedness or expenses of the Seller Trusts or Trust Advisors or be liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by the Seller Trusts or Trust Advisors under this Agreement or any other related documents, and (e) under no circumstances shall the Trust Advisors be personally liable for the payment of any indebtedness or expenses or be liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken under this Agreement, all such recourse being strictly to the Seller Trust Assets. [Remainder of Page Intentionally Left Blank; Next Page is Signature Page] + +- 7 - + + + + + +IN WITNESS WHEREOF, the Parties hereto have executed this OMA as of the date first set forth above. GWG HOLDINGS, INC. By: /s/ Jon R. Sabes Name: Jon R. Sabes, CEO THE LT-1 EXCHANGE TRUST, By: DELAWARE TRUST COMPANY, not in its individual capacity but solely as Trustee By: /s/ Alan R. Halpern Name: Alan R. Halpern Title: Vice President THE LT-2 EXCHANGE TRUST, By: DELAWARE TRUST COMPANY, not in its individual capacity but solely as Trustee By: /s/ Alan R. Halpern Name: Alan R. Halpern Title: Vice President + +- 8 - + + + + + +THE LT-3 EXCHANGE TRUST, By: DELAWARE TRUST COMPANY, not in its individual capacity but solely as Trustee By: /s/ Alan R. Halpern Name: Alan R. Halpern Title: Vice President THE LT-4 EXCHANGE TRUST, By: DELAWARE TRUST COMPANY, not in its individual capacity but solely as Trustee By: /s/ Alan R. Halpern Name: Alan R. Halpern Title: Vice President THE LT-5 EXCHANGE TRUST, By: DELAWARE TRUST COMPANY, not in its individual capacity but solely as Trustee By: /s/ Alan R. Halpern Name: Alan R. Halpern Title: Vice President THE LT-6 EXCHANGE TRUST, By: DELAWARE TRUST COMPANY, not in its individual capacity but solely as Trustee By: /s/ Alan R. Halpern Name: Alan R. Halpern Title: Vice President + +- 9 - + + + + + +THE LT-7 EXCHANGE TRUST, By: DELAWARE TRUST COMPANY, not in its individual capacity but solely as Trustee By: /s/ Alan R. Halpern Name: Alan R. Halpern Title: Vice President THE LT-8 EXCHANGE TRUST, By: DELAWARE TRUST COMPANY, not in its individual capacity but solely as Trustee By: /s/ Alan R. Halpern Name: Alan R. Halpern Title: Vice President THE LT-9 EXCHANGE TRUST, By: DELAWARE TRUST COMPANY, not in its individual capacity but solely as Trustee By: /s/ Alan R. Halpern Name: Alan R. Halpern Title: Vice President THE LT-12 EXCHANGE TRUST, By: DELAWARE TRUST COMPANY, not in its individual capacity but solely as Trustee By: /s/ Alan R. Halpern Name: Alan R. Halpern Title: Vice President + +- 10 - + + + + + +THE LT-13 EXCHANGE TRUST, By: DELAWARE TRUST COMPANY, not in its individual capacity but solely as Trustee By: /s/ Alan R. Halpern Name: Alan R. Halpern Title: Vice President THE LT-14 EXCHANGE TRUST, By: DELAWARE TRUST COMPANY, not in its individual capacity but solely as Trustee By: /s/ Alan R. Halpern Name: Alan R. Halpern Title: Vice President THE LT-15 EXCHANGE TRUST, By: DELAWARE TRUST COMPANY, not in its individual capacity but solely as Trustee By: /s/ Alan R. Halpern Name: Alan R. Halpern Title: Vice President THE LT-16 EXCHANGE TRUST, By: DELAWARE TRUST COMPANY, not in its individual capacity but solely as Trustee By: /s/ Alan R. Halpern Name: Alan R. Halpern Title: Vice President + +- 11 - + + + + + +THE LT-17 EXCHANGE TRUST, By: DELAWARE TRUST COMPANY, not in its individual capacity but solely as Trustee By: /s/ Alan R. Halpern Name: Alan R. Halpern Title: Vice President THE LT-18 EXCHANGE TRUST, By: DELAWARE TRUST COMPANY, not in its individual capacity but solely as Trustee By: /s/ Alan R. Halpern Name: Alan R. Halpern Title: Vice President THE LT-19 EXCHANGE TRUST, By: DELAWARE TRUST COMPANY, not in its individual capacity but solely as Trustee By: /s/ Alan R. Halpern Name: Alan R. Halpern Title: Vice President THE LT-20 EXCHANGE TRUST, By: DELAWARE TRUST COMPANY, not in its individual capacity but solely as Trustee By: /s/ Alan R. Halpern Name: Alan R. Halpern Title: Vice President + +- 12 - + + + + + +THE LT-21 EXCHANGE TRUST, By: DELAWARE TRUST COMPANY, not in its individual capacity but solely as Trustee By: /s/ Alan R. Halpern Name: Alan R. Halpern Title: Vice President THE LT-22 EXCHANGE TRUST, By: DELAWARE TRUST COMPANY, not in its individual capacity but solely as Trustee By: /s/ Alan R. Halpern Name: Alan R. Halpern Title: Vice President THE LT-23 EXCHANGE TRUST, By: DELAWARE TRUST COMPANY, not in its individual capacity but solely as Trustee By: /s/ Alan R. Halpern Name: Alan R. Halpern Title: Vice President THE LT-24 EXCHANGE TRUST, By: DELAWARE TRUST COMPANY, not in its individual capacity but solely as Trustee By: /s/ Alan R. Halpern Name: Alan R. Halpern Title: Vice President + +- 13 - + + + + + +THE LT-25 EXCHANGE TRUST, By: DELAWARE TRUST COMPANY, not in its individual capacity but solely as Trustee By: /s/ Alan R. Halpern Name: Alan R. Halpern Title: Vice President THE LT-26 EXCHANGE TRUST, By: DELAWARE TRUST COMPANY, not in its individual capacity but solely as Trustee By: /s/ Alan R. Halpern Name: Alan R. Halpern Title: Vice President MURRAY T. HOLLAND, as Trust Advisor /s/ MURRAY T. HOLLAND JEFFREY S. HINKLE, as Trust Advisor /s/ JEFFREY S. HINKLE + +- 14 - + + + + + +SCHEDULE A List of Seller Trusts and Shares of Stock + +Name of Record Holder Number of Shares The LT-1 Exchange Trust 1,397,705 The LT-2 Exchange Trust 1,396,863 The LT-3 Exchange Trust 2,563,777 The LT-4 Exchange Trust 2,537,152 The LT-5 Exchange Trust 2,516,313 The LT-6 Exchange Trust 2,535,832 The LT-7 Exchange Trust 2,526,515 The LT-8 Exchange Trust 2,536,840 The LT-9 Exchange Trust 404,110 The LT-12 Exchange Trust 80,402 The LT-13 Exchange Trust - The LT-14 Exchange Trust 204,064 The LT-15 Exchange Trust 63,834 The LT-16 Exchange Trust 920,349 The LT-17 Exchange Trust 39,347 The LT-18 Exchange Trust 81,860 The LT-19 Exchange Trust 224,917 The LT-20 Exchange Trust 4,601 The LT-21 Exchange Trust 555,751 The LT-22 Exchange Trust 555,750 The LT-23 Exchange Trust 1,466,884 The LT-24 Exchange Trust 1,466,883 The LT-25 Exchange Trust 1,466,884 The LT-26 Exchange Trust 1,466,883 + +- 15 - + + + + + +EXHIBIT A FORM OF JOINDER The undersigned is executing and delivering this Joinder Agreement pursuant to that certain Orderly Marketing Agreement, dated as of December [___], 2018 (as amended, restated, supplemented or otherwise modified in accordance with the terms thereof, the "OMA"), by and among GWG Holdings, Inc., the Trust Advisors to the Seller Trusts listed on Schedule A thereto, and the Priority Holders listed on Schedule B thereto, and any other person or entity that becomes a party to the OMA in accordance with the terms thereof. Capitalized terms used but not defined in this Joinder Agreement shall have the respective meanings ascribed to such terms in the OMA. By executing and delivering this Joinder Agreement to the OMA, the undersigned hereby agrees, effective commencing on the date hereof, to become a party to, and to be bound by and comply with the provisions of, the OMA applicable to it as a holder of Shares, in the same manner as if the undersigned were an original signatory to the OMA. The undersigned acknowledges and agrees that Section 4.1 through Section 4.11 of the OMA are incorporated herein by reference, mutatis mutandis. [Remainder of page intentionally left blank; signature appears on next page] + +- 16 - + + + + + +Accordingly, the undersigned have executed and delivered this Joinder Agreement as of the ____ day of ________________, _____. Name: [HOLDER/TRANSFEREE] By: Name: Title: Notice Information Address: Telephone: Facsimile: Email: AGREED AND ACCEPTED as of the day of , . GWG HOLDINGS, INC. By: Name: Title: [TRANSFEROR (if applicable)] By: Name: Title: + +- 17 - \ No newline at end of file diff --git a/full_contract_txt/GarrettMotionInc_20181001_8-K_EX-2.4_11364532_EX-2.4_Intellectual Property Agreement.txt b/full_contract_txt/GarrettMotionInc_20181001_8-K_EX-2.4_11364532_EX-2.4_Intellectual Property Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..0d0016d11f0dbc303afeaf41931d96985f97bc4f --- /dev/null +++ b/full_contract_txt/GarrettMotionInc_20181001_8-K_EX-2.4_11364532_EX-2.4_Intellectual Property Agreement.txt @@ -0,0 +1,497 @@ +Table of Contents + +EXECUTION VERSION + +Exhibit 2.4 + +INTELLECTUAL PROPERTY AGREEMENT + +by and between + +HONEYWELL INTERNATIONAL INC. + +and + +GARRETT MOTION INC. + +Dated as of September 27, 2018 + +Source: GARRETT MOTION INC., 8-K, 10/1/2018 + + + + + +Table of Contents + +TABLE OF CONTENTS Page + +ARTICLE I DEFINITIONS Section 1.01. Definitions 1 ARTICLE II RECORDATION OF INTELLECTUAL PROPERTY RIGHTS ASSIGNMENT AGREEMENTS + +Section 2.01. Intellectual Property Assignment Agreements 4 Section 2.02. Recordation 4 Section 2.03. Security Interests 4 + +ARTICLE III LICENSES AND COVENANTS FROM HONEYWELL TO SPINCO + +Section 3.01. License Grants 4 Section 3.02. Other Covenants 5 Section 3.03. Honeywell Content 6 + +ARTICLE IV LICENSES AND COVENANTS FROM SPINCO TO HONEYWELL Section 4.01. License Grants 7 Section 4.02. Other Covenants 7 + +ARTICLE V ADDITIONAL INTELLECTUAL PROPERTY RELATED MATTERS + +Section 5.01. Assignments and Licenses 8 Section 5.02. No Implied Licenses 9 Section 5.03. No Obligation To Prosecute or Maintain Patents 9 Section 5.04. Technical Assistance 9 Section 5.05. Group Members 9 Section 5.06. R&D Projects 9 + +ARTICLE VI CONFIDENTIAL INFORMATION + +Section 6.01. Confidentiality 9 i + +Source: GARRETT MOTION INC., 8-K, 10/1/2018 + + + + + +Table of Contents + +ARTICLE VII LIMITATION OF LIABILITY AND WARRANTY DISCLAIMER + +Section 7.01. Limitation on Liability 9 Section 7.02. Disclaimer of Representations and Warranties 10 + +ARTICLE VIII TRANSFERABILITY AND ASSIGNMENT + +Section 8.01. No Assignment or Transfer Without Consent 10 Section 8.02. Divested Businesses 11 + +ARTICLE IX TERMINATION Section 9.01. Termination by Both Parties 11 Section 9.02. Termination prior to the Distribution 11 Section 9.03. Effect of Termination; Survival 11 ARTICLE X FURTHER ASSURANCES + +Section 10.01. Further Assurances 11 + +ARTICLE XI MISCELLANEOUS + +Section 11.01. Counterparts; Entire Agreement; Corporate Power 12 Section 11.02. Dispute Resolution 12 Section 11.03. Governing Law; Jurisdiction 13 Section 11.04. Waiver of Jury Trial 13 Section 11.05. Court-Ordered Interim Relief 13 Section 11.06. Specific Performance 14 Section 11.07. Third-Party Beneficiaries 14 Section 11.08. Notices 14 Section 11.09. Import and Export Control 15 Section 11.10. Bankruptcy 15 Section 11.11. Severability 15 Section 11.12. Expenses 16 Section 11.13. Headings 16 Section 11.14. Survival of Covenants 16 Section 11.15. Waivers of Default 16 Section 11.16. Amendments 16 Section 11.17. Interpretation 16 + +EXHIBIT A1 - Patent Assignment Agreement EXHIBIT A2 - Trademark Assignment Agreement EXHIBIT A3 - Copyright Assignment Agreement EXHIBIT A4 - Domain Name Assignment Agreement EXHIBIT A5 - Invention Disclosure Assignment Agreement ii + +Source: GARRETT MOTION INC., 8-K, 10/1/2018 + + + + + +Table of Contents + +SCHEDULE A - SpinCo Patents SCHEDULE B - SpinCo IDs SCHEDULE C - SpinCo Trademarks SCHEDULE D - SpinCo Domain Names SCHEDULE E - Registered SpinCo Copyrights SCHEDULE F - R&D Projects SCHEDULE G - Honeywell Content iii + +Source: GARRETT MOTION INC., 8-K, 10/1/2018 + + + + + +Table of Contents + +INTELLECTUAL PROPERTY AGREEMENT, dated as of September 27, 2018 (this "Agreement"), by and between HONEYWELL INTERNATIONAL INC., a Delaware corporation ("Honeywell"), and GARRETT MOTION INC., a Delaware corporation ("SpinCo"). + +RECITALS + +WHEREAS, in connection with the contemplated Spin-Off of SpinCo and concurrently with the execution of this Agreement, Honeywell and SpinCo are entering into a Separation and Distribution Agreement (the "Separation Agreement"); + +WHEREAS, pursuant to the Separation Agreement and the other Ancillary Agreements, as of the Distribution Date, the Honeywell IP has been allocated to the Honeywell Group and the SpinCo IP has been allocated to the SpinCo Group; + +WHEREAS, the Parties wish to record the transfers of any registrations or applications of Honeywell IP and SpinCo IP, as applicable, to the extent the ownership thereof has transferred from a member of the Honeywell Group to a member of the SpinCo Group, or vice versa, pursuant to the Separation Agreement or any other Ancillary Agreement; + +WHEREAS, pursuant to the Separation Agreement and the other Ancillary Agreements, as of the Distribution Date, the Honeywell IP allocated to the Honeywell Group includes the Honeywell Shared IP and the SpinCo IP allocated to the SpinCo Group includes the SpinCo Shared IP; + +WHEREAS, it is the intent of the Parties that Honeywell grant a license to SpinCo in the Honeywell Shared IP, subject to the terms and conditions set forth in this Agreement; + +WHEREAS, it is the intent of the Parties that SpinCo grant a license to Honeywell in the SpinCo Shared IP, subject to the terms and conditions set forth in this Agreement; and + +WHEREAS, it is the intent of the Parties that Honeywell license certain other intellectual property rights to SpinCo and that SpinCo license certain other intellectual property rights to Honeywell. + +NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained in this Agreement, the Parties, intending to be legally bound, hereby agree as follows: + +ARTICLE I DEFINITIONS + +Section 1.01. Definitions. As used in this Agreement, the following terms have the meanings set forth below. Capitalized terms used, but not defined in this Agreement shall have the meanings ascribed to such terms in the Separation Agreement or any other Ancillary Agreement, as applicable. + +"Bankruptcy Code" has the meaning set forth in Section 11.10. + +Source: GARRETT MOTION INC., 8-K, 10/1/2018 + + + + + +Table of Contents + +"Copyright Assignment Agreement" has the meaning set forth in Section 2.01. + +"Copyrights" means copyrights, works of authorship (including all translations, adaptations, derivations and combinations thereof), mask works, designs and database rights, including, in each case, any registrations and applications therefor. + +"Divested Entity" has the meaning set forth in Section 8.02. + +"Domain Name Assignment Agreement" has the meaning set forth in Section 2.01. + +"Domain Names" means Internet domain names, including top level domain names and global top level domain names, URLs, social media identifiers, handles and tags. + +"Honeywell Content" means the confidential and proprietary materials of Honeywell IP protected by Trade Secret and/or Copyright Law set forth on Schedule G. + +"Honeywell IP" means all Intellectual Property Rights owned by the Honeywell Group or the SpinCo Group as of immediately prior to the Distribution, other than the SpinCo IP. + +"Honeywell Shared IP" has the meaning set forth in Section 3.01(a). + +"Honeywell Trade Secrets" means the Trade Secrets included in the Honeywell IP. + +"Honeywell Trademarks" means the Trademarks included in the Honeywell IP. + +"Intellectual Property Assignment Agreements" has the meaning set forth in Section 2.01. + +"Intellectual Property Rights" or "IPR" means any and all intellectual property rights existing anywhere in the world associated with any and all (a) Patents, (b) Trademarks, (c) Copyrights, (d) Domain Names, (e) Software, (f) Trade Secrets and other confidential information, (g) all tangible embodiments of the foregoing in whatever form or medium and (h) any other legal protections and rights related to any of the foregoing. Intellectual Property Rights specifically excludes contractual rights (including license grants from third parties). + +"Invention Disclosure Assignment Agreement" has the meaning set forth in Section 2.01. + +"Party" means either party hereto, and "Parties" means both parties hereto. + +"Patent Assignment Agreement" has the meaning set forth in Section 2.01. + +"Patents" means patents (including all reissues, divisionals, continuations, continuations-in-part, reexaminations, supplemental examinations, inter partes review, post-grant oppositions, covered business methods reviews, substitutions and extensions thereof), patent registrations and applications, including provisional applications, statutory invention registrations, invention disclosures and inventions. 2 + +Source: GARRETT MOTION INC., 8-K, 10/1/2018 + + + + + +Table of Contents + +"R&D Projects" means the R&D Projects listed or described in Schedule F, each of which shall be subject to a separate agreement as set forth in Section 5.06. + +"Software" means any and all (a) computer programs and applications, including any and all software implementations of algorithms, models and methodologies, whether in source code, object code, human readable form or other form, (b) databases and compilations, including any and all data and collections of data, whether machine readable or otherwise, (c) descriptions, flow charts and other work product used to design, plan, organize and develop any of the foregoing, screens, user interfaces, report formats, firmware, development tools, templates, menus, buttons and icons, (d) all documentation including user manuals and other training documentation related to any of the foregoing and (e) all tangible embodiments of the foregoing in whatever form or medium now known or yet to be created, including all disks, diskettes and tapes. + +"SpinCo Copyrights" means (i) unregistered Copyrights that are owned by the Honeywell Group or the SpinCo Group as of immediately prior to the Distribution and that are exclusively used in or related to the SpinCo Business and (ii) the registered Copyrights identified on Schedule E hereto. + +"SpinCo Domain Names" means the Domain Names listed on Schedule D, in each case excluding any Trademarks containing "Honeywell" or any transliteration or translation thereof or any version of the "Honeywell and Design" logo. + +"SpinCo IDs" means the invention disclosures listed or described on Schedule B. + +"SpinCo IP" means (a) the SpinCo Patents, (b) the SpinCo Copyrights, (c) the SpinCo Domain Names, (d) the SpinCo Trade Secrets, (e) the SpinCo Trademarks and (f) the SpinCo IDs. + +"SpinCo Patents" means the Patents identified on Schedule A. + +"SpinCo Shared IP" has the meaning set forth in Section 4.01(a). + +"SpinCo Trade Secrets" means the Trade Secrets known to the Parties that are owned by the Honeywell Group or SpinCo Group as of immediately prior to the Distribution and that are exclusively used by or related to the SpinCo Business. + +"SpinCo Trademarks" means the Trademarks identified on Schedule C. + +"Trade Secrets" means all forms and types of financial, business, scientific, technical, economic or engineering information, including patterns, plans, compilations, program devices, formulas, designs, prototypes, methods, techniques, processes, procedures, programs or codes, whether tangible or intangible, and whether or how stored, compiled or memorialized physically, electronically, graphically, photographically or in writing, to the extent that the owner thereof has taken reasonable measures to keep such information secret and the information derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable through proper means by, the public. + +"Trademark Assignment Agreement" has the meaning set forth in Section 2.01. 3 + +Source: GARRETT MOTION INC., 8-K, 10/1/2018 + + + + + +Table of Contents + +"Trademarks" means trademarks, service marks, trade names, logos, slogans, trade dress or other source identifiers, including any registration or any application for registration therefor, together with all goodwill associated therewith. + +ARTICLE II RECORDATION OF INTELLECTUAL PROPERTY RIGHTS ASSIGNMENT AGREEMENTS + +Section 2.01. Intellectual Property Assignment Agreements. In order to carry out the intent of the Parties with respect to the recordation of the transfers of any registrations or applications of Honeywell IP or SpinCo IP, as applicable, to the extent the ownership thereof has transferred from a member of the Honeywell Group to a member of the SpinCo Group, or vice versa, pursuant to the Separation Agreement or any other Ancillary Agreement, the Parties shall, and shall cause their respective Group members (as applicable) to, execute intellectual property assignments in a form substantially similar to that attached as Exhibit A1 (the "Patent Assignment Agreement"), Exhibit A2 (the "Trademark Assignment Agreement"), Exhibit A3 (the "Copyright Assignment Agreement"), Exhibit A4 (the "Domain Name Assignment Agreement") and Exhibit A5 (the "Invention Disclosure Assignment Agreement") as well as such additional case specific assignments as deemed appropriate or necessary under applicable Laws (collectively, the "Intellectual Property Assignment Agreements") for recordation with the appropriate Governmental Authority. + +Section 2.02. Recordation. The relevant assignee Party shall have the sole responsibility, at its sole cost and expense, to file the Intellectual Property Assignment Agreements and any other forms or documents with the appropriate Governmental Authorities as required to record the transfer of any registrations or applications of Honeywell IP or SpinCo IP that is allocated under the Separation Agreement, as applicable, and the relevant assignor Party hereby consents to such recordation. + +Section 2.03. Security Interests. Prior to, on and after the Distribution Date, each Party shall cooperate with the other Party, without any further consideration and at no expense to the other Party, to obtain, cause to be obtained or properly record the release of any outstanding Security Interest attached to any Honeywell IP or SpinCo IP, as applicable, and to take, or cause to be taken, all actions as the other Party may reasonably be requested to take in order to obtain, cause to be obtained or properly record such release. + +ARTICLE III LICENSES AND COVENANTS FROM HONEYWELL TO SPINCO + +Section 3.01. License Grants. + +(a) General. The Parties acknowledge that through the course of a history of integrated operations SpinCo and the members of the SpinCo Group have each obtained knowledge of and access to, or otherwise used, certain Honeywell IP, including Patents, Trade Secrets, copyrighted content, proprietary know-how, and other Intellectual Property Rights that are not otherwise governed expressly by the Separation Agreement or the Ancillary Agreements or identified expressly in the schedules thereto (collectively, "Honeywell Shared IP"). With regard 4 + +Source: GARRETT MOTION INC., 8-K, 10/1/2018 + + + + + +Table of Contents + +to the Honeywell Shared IP, the Parties seek to ensure that SpinCo has the freedom to use such Honeywell Shared IP in the future. Hence, as of the Distribution Date, Honeywell hereby grants, and agrees to cause the members of the Honeywell Group to hereby grant, to SpinCo and the members of the SpinCo Group a non-exclusive, royalty-free, fully-paid, perpetual, sublicenseable (solely to Subsidiaries and suppliers for "have-made" purposes), worldwide license to use and exercise rights under the Honeywell Shared IP (excluding Trademarks, the Honeywell Content and the subject matter of any other Ancillary Agreement), said license being limited to use of a similar type, scope and extent as used in the SpinCo Business prior to the Distribution Date and the natural growth and development thereof. + +(b) Trademarks. The Parties acknowledge and agree that certain rights and obligations with respect to the use by the SpinCo Group of certain Honeywell Trademarks shall be set forth in the Trademark License Agreement. To the extent there is a conflict between the terms of this Agreement and the Trademark License Agreement, the terms of the Trademark License Agreement shall control. + +(c) Additional Licenses. For a period of five (5) years after the Distribution Date, in the event any member of the SpinCo Group, in SpinCo's reasonable judgment, requires a license under any Honeywell IP in order to initiate and pursue any new technical projects not covered by the licenses granted in Section 3.01(a), the Parties shall negotiate in good faith to license such Honeywell IP to the applicable member of the SpinCo Group on commercially reasonable terms. Notwithstanding anything to the contrary, if the Parties cannot reach agreement with respect to the terms of a license to Honeywell IP pursuant to the immediately preceding sentence, the applicable member of the SpinCo Group shall be permitted to challenge the validity or enforceability of such Honeywell IP (it being understood that such challenge is the sole remedy available to SpinCo in the event Honeywell does not grant such license, without regard to whether Honeywell has negotiated in good faith). + +Section 3.02. Other Covenants. + +(a) Honeywell hereby acknowledges (on behalf of itself and each other member of the Honeywell Group) SpinCo's right, title and interest in and to the SpinCo IP. Honeywell agrees that it will not, and agrees to cause each member of the Honeywell Group not to, (i) initiate any Action against any member of the SpinCo Group or its Affiliates for infringement, misappropriation or other violation of any Honeywell IP, (ii) oppose, challenge, petition to cancel, contest or threaten in any way, or assist another party in opposing, challenging, petitioning to cancel, contesting or threatening in any way, any application or registration by SpinCo or its Affiliates or their respective licensees for any SpinCo IP, the use of which is consistent with the use of such SpinCo IP in connection with the SpinCo Business as of immediately prior to the Distribution Date, (iii) engage in any act, or purposefully omit to perform any act, that impairs or adversely affects the rights of SpinCo or any member of the SpinCo Group in and to any SpinCo IP or (iv) apply for any registration with respect to the SpinCo IP (including federal, state and national registrations), in each case of the foregoing clauses (i) - (iv) for a period of five (5) years after the Distribution Date, without the prior written consent of SpinCo, which consent shall not be unreasonably withheld, conditioned or delayed. 5 + +Source: GARRETT MOTION INC., 8-K, 10/1/2018 + + + + + +Table of Contents + +(b) SpinCo shall be responsible for policing, protecting and enforcing its own Intellectual Property Rights. Notwithstanding the foregoing, Honeywell will promptly give notice to SpinCo of any actual or threatened, unauthorized use or infringement of the SpinCo IP of which it receives notice, in each case for a period of five (5) years after the Distribution Date. + +(c) Notwithstanding anything to the contrary in this Section 3.02, each member of the Honeywell Group shall be permitted to challenge the validity or enforceability of SpinCo IP, in each case solely in response to an Action initiated by a third party where failure to assert such challenge would reasonably be expected to materially prejudice any member of the Honeywell Group's defense to such Action; provided, that the applicable member(s) of the Honeywell Group shall use reasonable best efforts to provide SpinCo with reasonable written notice prior to initiating any such challenge. + +(d) All SpinCo Trade Secrets shall be in or shall be moved to the physical possession of the SpinCo Group in a tangible form (including all copies thereof and all notes, extracts or summaries based thereon) prior to the Distribution Date. At the specific written request of SpinCo, Honeywell shall destroy or shall have destroyed any form or copy of any SpinCo Trade Secrets specified by SpinCo in such written request that are in the possession of Honeywell or any members of the Honeywell Group and were not used in the Honeywell Business as of immediately prior to the Distribution, other than SpinCo Trade Secrets that were electronically preserved or recorded by an electronic backup system prior to the Distribution Date and remain within a secure, encrypted data backup system that is subject to industry practice defense, protection and access restriction measures. + +Section 3.03. Honeywell Content. + +(a) Notwithstanding Section 3.01, Honeywell hereby grants, and agrees to cause the members of the Honeywell Group to hereby grant, to SpinCo and the members of the SpinCo Group, for a period of ten (10) years after the Distribution Date (unless earlier terminated in accordance with Section 3.03(c)), a non-exclusive, royalty-free, fully-paid, non-sublicenseable, non-transferable, worldwide license to use and reproduce the Honeywell Content solely for the SpinCo Group's internal business purposes. For the avoidance of doubt, the Parties acknowledge and agree that SpinCo may distribute the Honeywell Content internally through SpinCo's intranet in the same form and manner that it was distributed on the Honeywell intranet immediately prior to the Distribution Date; provided, that the Honeywell Content may not be used for any purpose other than the SpinCo Group's internal business purposes and may not be shared with any third party without the prior written consent of Honeywell. + +(b) SpinCo shall, and shall cause each member of the SpinCo Group to, remove any Honeywell Trademarks or reference to the Honeywell Business appearing on any Honeywell Content as soon as reasonably practicable following the Distribution Date, but in no event later than one hundred and eighty (180) days after the Distribution Date. + +(c) Without limiting ARTICLE VIII, the license granted to the SpinCo Group in Section 3.03(a) shall automatically terminate in the event (i) that any member of the SpinCo Group assigns, transfers, licenses or otherwise conveys any rights in or to the Honeywell Content to any third party or (ii) of (x) the sale of all or substantially all of the ownership interests 6 + +Source: GARRETT MOTION INC., 8-K, 10/1/2018 + + + + + +Table of Contents + +in, or the assets of, any member of the SpinCo Group in a single transaction or a series of related transactions to one or more third parties, (y) any direct or indirect acquisition, consolidation or merger of any member of the SpinCo Group by, with or into any third party or (z) any spin-off, public offering or other corporate reorganization or single transaction or series of related transactions in which direct or indirect control of any member of the SpinCo Group is transferred to one or more third parties, including by transferring an excess of fifty percent (50%) of such member of the SpinCo Group's voting power, shares or equity, through a merger, consolidation, tender offer or similar transaction to one or more third parties. + +ARTICLE IV LICENSES AND COVENANTS FROM SPINCO TO HONEYWELL + +Section 4.01. License Grants. + +(a) General. The Parties acknowledge that through the course of a history of integrated operations Honeywell and the members of the Honeywell Groups have each obtained knowledge of and access to, or otherwise used, certain SpinCo IP, including Patents, Trade Secrets, copyrighted content, proprietary know-how, and other Intellectual Property Rights that are not otherwise governed expressly by the Separation Agreement or the Ancillary Agreements or identified expressly in the schedules thereto (collectively, "SpinCo Shared IP"). With regard to the SpinCo Shared IP, the Parties seek to ensure that Honeywell has the freedom to use such SpinCo Shared IP in the future. Hence, as of the Distribution Date, SpinCo hereby grants, and agrees to cause the members of the SpinCo Group to hereby grant, to Honeywell and the members of the Honeywell Group a non-exclusive, royalty-free, fully-paid, perpetual, sublicenseable (solely to Subsidiaries and suppliers for "have made" purposes), worldwide license to use and exercise rights under the SpinCo Shared IP (excluding Trademarks and the subject matter of any other Ancillary Agreement), said license being limited to use of a similar type, scope and extent as used in the Honeywell Business prior to the Distribution Date and the natural growth and development thereof. + +(b) Additional Licenses. For a period of five (5) years following the Distribution Date, in the event any member of the Honeywell Group, in Honeywell's reasonable judgment, requires a license under any SpinCo IP in order to initiate and pursue any technical projects not covered by the licenses granted in Section 4.01(a), the Parties shall negotiate in good faith to license such SpinCo IP to the applicable member of the Honeywell Group on commercially reasonable terms. Notwithstanding anything to the contrary, if the Parties cannot reach agreement with respect to the terms of a license to SpinCo IP pursuant to the immediately preceding sentence, the applicable member of the Honeywell Group shall be permitted to challenge the validity or enforceability of such SpinCo IP (it being understood that such challenge is the sole remedy available to Honeywell in the event SpinCo does not grant such license, without regard to whether SpinCo has negotiated in good faith). + +Section 4.02. Other Covenants. + +(a) SpinCo hereby acknowledges (on behalf of itself and each other member of the SpinCo Group) Honeywell's right, title and interest in and to the Honeywell IP. SpinCo agrees that it will not, and agrees to cause each member of the SpinCo Group not to, (i) 7 + +Source: GARRETT MOTION INC., 8-K, 10/1/2018 + + + + + +Table of Contents + +initiate any Action against any member of the Honeywell Group or its Affiliates for infringement, misappropriation or other violation of any SpinCo IP, (ii) oppose, challenge, petition to cancel, contest or threaten in any way, or assist another party in opposing, challenging, petitioning to cancel, contesting or threatening in any way, any application or registration by the Honeywell Group or its Affiliates or their respective licensees for any Honeywell IP, the use of which is consistent with the use of such Honeywell IP in connection with the Honeywell Business as of immediately prior to the Distribution Date, (iii) engage in any act, or purposefully omit to perform any act, that impairs or adversely affects the rights of Honeywell or any member of the Honeywell Group in and to any Honeywell IP or (iv) apply for any registration with respect to the Honeywell IP (including federal, state and national registrations), in each case of the foregoing clauses (i) - (iv) for a period of five (5) years after the Distribution Date, without the prior written consent of Honeywell, which consent shall not be unreasonably withheld, conditioned or delayed. + +(b) Honeywell shall be responsible for policing, protecting and enforcing its own Intellectual Property Rights. Notwithstanding the foregoing, SpinCo will promptly give notice to Honeywell of any actual or threatened, unauthorized use or infringement of the Honeywell IP of which it receives notice, in each case for a period of five (5) years after the Distribution Date. + +(c) Notwithstanding anything to the contrary in this Section 4.02, each member of the SpinCo Group shall be permitted to challenge the validity or enforceability of Honeywell IP, in each case solely in response to an Action initiated by a third party where failure to assert such challenge would reasonably be expected to materially any member of the SpinCo Group's defense to such Action; provided, that the applicable member(s) of the SpinCo Group shall use reasonable best efforts to provide Honeywell with reasonable written notice prior to initiating any such challenge. + +(d) All Honeywell Trade Secrets shall be in or shall be moved to the physical possession of the Honeywell Group in a tangible form (including all copies thereof and all notes, extracts or summaries based thereon) prior to the Distribution Date. At the specific written request of Honeywell, SpinCo shall destroy or shall have destroyed any form or copy of Honeywell Trade Secrets specified in such written request by Honeywell that are in the possession of SpinCo or any members of the SpinCo Group and were not used in the SpinCo Business as of immediately prior to the Distribution, other than Honeywell Trade Secrets that were electronically preserved or recorded by an electronic backup system prior to the Distribution Date and remain within a secure, encrypted data backup system that is subject to industry practice defense, protection and access restriction measures. + +ARTICLE V ADDITIONAL INTELLECTUAL PROPERTY RELATED MATTERS + +Section 5.01. Assignments and Licenses. No Party or any member of its Group may assign or grant a license in or to any of its Intellectual Property Rights licensed to the other Party or any member of its Group pursuant to ARTICLE III or ARTICLE IV, unless such assignment or grant is subject to the licenses, covenants and restrictions set forth herein. For the avoidance of doubt, a non-exclusive license grant shall be deemed subject to the licenses granted herein. 8 + +Source: GARRETT MOTION INC., 8-K, 10/1/2018 + + + + + +Table of Contents + +Section 5.02. No Implied Licenses. Nothing contained in this Agreement shall be construed as conferring any rights (including the right to sublicense) by implication, estoppel or otherwise, under any Intellectual Property Rights, other than as expressly granted in this Agreement, and all other rights under any Intellectual Property Rights licensed to a Party or the members of its Group hereunder are expressly reserved by the Party granting the license. The Party receiving the license hereunder acknowledges and agrees that the Party (or the applicable member of its Group) granting the license is the sole and exclusive owner of the Intellectual Property Rights so licensed. + +Section 5.03. No Obligation To Prosecute or Maintain Patents. Except as expressly set forth in this Agreement, no Party or any member of its Group shall have any obligation to seek, perfect or maintain any protection for any of its Intellectual Property Rights. Without limiting the generality of the foregoing, except as expressly set forth in this Agreement, no Party or any member of its Group shall have any obligation to file any Patent application, to prosecute any Patent, or secure any Patent rights or to maintain any Patent in force. + +Section 5.04. Technical Assistance. Except as expressly set forth in this Agreement, in the Separation Agreement or any other mutually executed agreement between the Parties or any of the members of their respective Groups, no Party or any member of its Group shall be required to provide the other Party with any technical assistance or to furnish any other Party with, or obtain on their behalf, any Intellectual Property Rights-related documents, materials or other information or technology. + +Section 5.05. Group Members. Each Party shall cause the members of its Group to comply with all applicable provisions of this Agreement. + +Section 5.06. R&D Projects. The Parties acknowledge and agree that the R&D Projects shall be governed by certain separate agreements between the Parties. To the extent there is a conflict between the terms of this Agreement and such agreements, the terms of such agreements shall control. + +ARTICLE VI CONFIDENTIAL INFORMATION + +Section 6.01. Confidentiality. All Trade Secrets and other confidential information of a Party disclosed to the other Party under this Agreement (including the Honeywell Content) shall be deemed confidential and proprietary information of the disclosing Party, shall be subject to the provisions of Section 7.09 of the Separation Agreement and may be used by the receiving Party for the express purpose of effecting the licenses granted herein. + +ARTICLE VII LIMITATION OF LIABILITY AND WARRANTY DISCLAIMER + +Section 7.01. Limitation on Liability. Without limiting the terms set forth in Section 6.09 of the Separation Agreement, none of Honeywell, SpinCo or any other member of either Group shall in any event have any Liability to the other or to any other member of the other's Group under this Agreement for any indirect, special, punitive or consequential damages, whether or not caused by or resulting from negligence or breach of obligations hereunder and whether or not informed of the possibility of the existence of such damages. 9 + +Source: GARRETT MOTION INC., 8-K, 10/1/2018 + + + + + +Table of Contents + +Section 7.02. Disclaimer of Representations and Warranties. Each of Honeywell (on behalf of itself and each other member of the Honeywell Group) and SpinCo (on behalf of itself and each other member of the SpinCo Group) understands and agrees that, except as expressly set forth in this Agreement, no Party is representing or warranting in any way, including any implied warranties of merchantability, fitness for a particular purpose, title, registerability, allowability, enforceability or non-infringement, as to any Intellectual Property Rights licensed hereunder, as to the sufficiency of the Intellectual Property Rights licensed hereunder for the conduct and operations of the SpinCo Business or the Honeywell Business, as applicable, as to the value or freedom from any Security Interests of, or any other matter concerning, any Intellectual Property Rights licensed hereunder, or as to the absence of any defenses or rights of setoff or freedom from counterclaim with respect to any claim or other Intellectual Property Rights of any such Party, or as to the legal sufficiency of any assignment, document or instrument delivered hereunder to convey title to any Intellectual Property Rights or thing of value upon the execution, delivery and filing hereof or thereof. Except as may expressly be set forth herein, any such Intellectual Property Rights are being licensed on an "as is," "where is" basis and the respective licensees shall bear the economic and legal risks related to the use of the Shared Honeywell IP in the SpinCo Business or the Shared SpinCo IP in the Honeywell Business, as applicable. + +ARTICLE VIII TRANSFERABILITY AND ASSIGNMENT + +Section 8.01. No Assignment or Transfer Without Consent. Except as expressly set forth in this Agreement, neither this Agreement nor any of the rights, interests or obligations under this Agreement, including the licenses granted pursuant to this Agreement, shall be assigned, in whole or in part, by operation of Law or otherwise by either Party without the prior written consent of the other Party. Any purported assignment without such consent shall be void. Notwithstanding the foregoing, if any Party to this Agreement (or any of its successors or permitted assigns) (a) shall enter into a consolidation or merger transaction in which such Party is not the surviving entity and the surviving entity acquires or assumes all or substantially all of such Party's assets, (b) shall transfer all or substantially all of such Party's assets to any Person or (c) shall assign this Agreement to such Party's Affiliates, then, in each such case, the assigning Party (or its successors or permitted assigns, as applicable) shall ensure that the assignee or successor- in-interest expressly assumes in writing all of the obligations of the assigning Party under this Agreement, and the assigning Party shall not be required to seek consent, but shall provide written notice and evidence of such assignment, assumption or succession to the non-assigning Party. Subject to the preceding sentences, this Agreement will be binding upon, inure to the benefit of, and be enforceable by, the Parties and their respective successors and assigns. No assignment permitted by this Section 8.01 shall release the assigning Party from liability for the full performance of its obligations under this Agreement. For the avoidance of doubt, in no event will the licenses granted in this Agreement extend to products, product lines, services, apparatus, devices, systems, components, hardware, software, processes, solutions, any combination of the foregoing, or other offerings of the assignee existing on or before the date of the transaction described in clauses (a) or (b) of the preceding sentence, except to the extent that they were licensed under the terms of this Agreement prior to such transaction. 10 + +Source: GARRETT MOTION INC., 8-K, 10/1/2018 + + + + + +Table of Contents + +Section 8.02. Divested Businesses. In the event a Party divests a business by (a) spinning off a member of its Group by its sale or other disposition to a third party, (b) reducing ownership or control in a member of its Group so that it no longer qualifiers as a member of its Group under this Agreement or (c) selling or otherwise transferring a line of business to a third party (each such divested entity/line of business, a "Divested Entity"), the Divested Entity shall retain those licenses granted to it under this Agreement provided that the license shall be limited to the business of the Divested Entity as of the date of divestment and the natural development thereof. The retention of any license grants are subject to the Divested Entity's and, in the event it is acquired by a third party, such third party's execution and delivery to the non-transferring Party, within 90 days of the effective date of such divestment, of a duly authorized, written undertaking, agreeing to be bound by the applicable terms of this Agreement. For the avoidance of doubt, in no event will the licenses retained by a Divested Entity extend to products, product lines, services, apparatus, devices, systems, components, hardware, software, processes, solutions, any combination of the foregoing, or other offerings of a third party acquirer existing on or before the date of the divestment, except to the extent that they were licensed under the terms of this Agreement prior to such divestment. + +ARTICLE IX TERMINATION + +Section 9.01. Termination by Both Parties. Subject to Section 9.02, this Agreement may not be terminated except by an agreement in writing signed by a duly authorized officer of each of the Parties. + +Section 9.02. Termination prior to the Distribution. This Agreement may be terminated by Honeywell at any time, in its sole discretion, prior to the Distribution; provided, however, that this Agreement shall automatically terminate upon the termination of the Separation Agreement in accordance with its terms. + +Section 9.03. Effect of Termination; Survival. In the event of any termination of this Agreement prior to the Distribution, neither Party (nor any member of their Group or any of their respective directors or officers) shall have any Liability or further obligation to the other Party or any member of its Group under this Agreement. Except with respect to termination of the Agreement under Section 9.02, notwithstanding anything in this Agreement to the contrary, ARTICLE I, ARTICLE VI, ARTICLE VII, this Section 9.03 and ARTICLE XI shall survive any termination of this Agreement. + +ARTICLE X FURTHER ASSURANCES + +Section 10.01. Further Assurances. + +(a) In addition to the actions specifically provided for elsewhere in this Agreement, each of the Parties shall use reasonable best efforts, prior to, on and after the Distribution Date, to take, or cause to be taken, all actions, and to do, or cause to be done, all things, reasonably necessary, proper or advisable under applicable Laws and agreements to consummate and make effective the transactions contemplated by this Agreement. 11 + +Source: GARRETT MOTION INC., 8-K, 10/1/2018 + + + + + +Table of Contents + +(b) Without limiting the foregoing, prior to, on and after the Distribution Date, each Party shall cooperate with the other Party, without any further consideration, but at the expense of the requesting Party, (i) to execute and deliver, or use reasonable best efforts to execute and deliver, or cause to be executed and delivered, all instruments, including any instruments of conveyance, assignment and transfer as such Party may reasonably be requested to execute and deliver by the other Party, (ii) to make, or cause to be made, all filings with, and to obtain, or cause to be obtained, all Consents of any Governmental Authority or any other Person under any permit, license, agreement, indenture or other instrument, and (iii) to take, or cause to be taken, all such other actions as such Party may reasonably be requested to take by the other Party from time to time, consistent with the terms of this Agreement, in order to effectuate the provisions and purposes of this Agreement and any transfers of Intellectual Property Rights or assignments and assumptions of Liabilities related thereto as set forth in the Separation Agreement. + +ARTICLE XI MISCELLANEOUS + +Section 11.01. Counterparts; Entire Agreement; Corporate Power. + +(a) This Agreement may be executed in one or more counterparts, all of which counterparts shall be considered one and the same agreement, and shall become effective when one or more counterparts have been signed by each Party and delivered to the other Party. This Agreement may be executed by facsimile or PDF signature and scanned and exchanged by electronic mail, and such facsimile or PDF signature or scanned and exchanged copies shall constitute an original for all purposes. + +(b) This Agreement and the Exhibits and Schedules hereto contain the entire agreement between the Parties with respect to the subject matter hereof and supersede all previous agreements, negotiations, discussions, writings, understandings, commitments and conversations with respect to such subject matter, and there are no agreements or understandings between the Parties with respect to the subject matter hereof other than those set forth or referred to herein or therein. + +(c) Honeywell represents on behalf of itself and each other member of the Honeywell Group, and SpinCo represents on behalf of itself and each other member of the SpinCo Group, as follows: + +(i) each such Person has the requisite corporate or other power and authority and has taken all corporate or other action necessary in order to execute, deliver and perform this Agreement and to consummate the transactions contemplated hereby; and + +(ii) this Agreement has been duly executed and delivered by it and constitutes, or will constitute, a valid and binding agreement of it enforceable in accordance with the terms thereof. + +Section 11.02. Dispute Resolution. In the event that either Party, acting reasonably, forms the view that another Party has caused a material breach of the terms of this Agreement, then the Party that forms such a view shall serve written notice of the alleged breach on the other Parties and the Parties shall work together in good faith to resolve any such alleged breach within 12 + +Source: GARRETT MOTION INC., 8-K, 10/1/2018 + + + + + +Table of Contents + +thirty (30) days of such notice (a "Dispute"). If any such alleged breach is not so resolved, then a senior executive of each Party shall, in good faith, attempt to resolve any such alleged breach within the following thirty (30) days of the referral of the matter to the senior executives. If no resolution is reached with respect to any such alleged breach in accordance with the procedures contained in this Section 11.02, then the Parties may seek to resolve such matter in accordance with Section 11.03, Section 11.04 and Section 11.06 + +Section 11.03. Governing Law; Jurisdiction. Any disputes arising out of or relating to this Agreement, including to its execution, performance or enforcement, shall be governed by, and construed in accordance with, the Laws of the State of New York, regardless of the Laws that might otherwise govern under applicable principles of conflicts of Laws thereof. Each Party irrevocably consents to the exclusive jurisdiction, forum and venue of any state or federal court sitting in New York City in the State of New York over any and all claims, disputes, controversies or disagreements between the Parties or any of their respective Affiliates, successors and assigns under or related to this Agreement or any of the transactions contemplated hereby, including their execution, performance or enforcement, whether in contract, tort or otherwise. Each of the Parties hereby agrees that it shall not assert and shall hereby waive any claim or right or defense that it is not subject to the jurisdiction of such courts, that the venue is improper, that the forum is inconvenient or any similar objection, claim or argument. Each Party agrees that a final judgment in any legal proceeding resolved in accordance with this Section 11.03, Section 11.04, Section 11.05 and Section 11.06 shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by applicable Law. + +Section 11.04. Waiver of Jury Trial. EACH PARTY HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON, ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, INCLUDING THEIR EXECUTION, PERFORMANCE OR ENFORCEMENT, WHETHER IN CONTRACT, TORT OR OTHERWISE. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING CONTRACT CLAIMS, TORT CLAIMS (INCLUDING NEGLIGENCE), BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. THIS SECTION HAS BEEN FULLY DISCUSSED BY EACH OF THE PARTIES AND THESE PROVISIONS WILL NOT BE SUBJECT TO ANY EXCEPTIONS. + +Section 11.05. Court-Ordered Interim Relief. In accordance with Section 11.03 and Section 11.04, at any time after giving notice of a Dispute, each Party shall be entitled to interim measures of protection duly granted by a court of competent jurisdiction: (1) to preserve the status quo pending resolution of the Dispute; (2) to prevent the destruction or loss of documents and other information or things relating to the Dispute; or (3) to prevent the transfer, disposition or hiding of assets. Any such interim measure (or a request therefor to a court of competent jurisdiction) shall not be deemed incompatible with the provisions of Section 11.02, Section 11.03 and Section 11.04. Until such Dispute is resolved in accordance with Section 11.02 or final judgment is rendered in accordance with Section 11.03 and Section 11.04, each Party agrees that such Party shall continue to perform its obligations under this Agreement and that such obligations shall not be subject to any defense or set-off, counterclaim, recoupment or termination. 13 + +Source: GARRETT MOTION INC., 8-K, 10/1/2018 + + + + + +Table of Contents + +Section 11.06. Specific Performance. Subject to Section 11.02 and Section 11.05, in the event of any actual or threatened default in, or breach of, any of the terms, conditions and provisions of this Agreement, the affected Party shall have the right to specific performance and injunctive or other equitable relief of its rights under this Agreement, in addition to any and all other rights and remedies at Law or in equity, and all such rights and remedies shall be cumulative. The other Party shall not oppose the granting of such relief on the basis that money damages are an adequate remedy. The Parties agree that the remedies at Law for any breach or threatened breach hereof, including monetary damages, are inadequate compensation for any loss and that any defense in any action for specific performance that a remedy at Law would be adequate is waived. Any requirements for the securing or posting of any bond with such remedy are waived. + +Section 11.07. Third-Party Beneficiaries. Except as otherwise expressly set forth herein or as otherwise may be provided in the Separation Agreement with respect to the rights of any Honeywell Indemnitee or SpinCo Indemnitee, (a) the provisions of this Agreement are solely for the benefit of the Parties hereto and are not intended to confer upon any Person except the Parties hereto any rights or remedies hereunder and (b) there are no third- party beneficiaries of this Agreement and this Agreement shall not provide any third person with any remedy, claim, liability, reimbursement, cause of action or other right in excess of those existing without reference to this Agreement. + +Section 11.08. Notices. All notices or other communications under this Agreement shall be in writing and shall be deemed to be duly given when (a) delivered in person, (b) on the date received, if sent by a nationally recognized delivery or courier service or (c) upon the earlier of confirmed receipt or the fifth (5th) business day following the date of mailing if sent by registered or certified mail, return receipt requested, postage prepaid and addressed as follows: + +If to Honeywell, to: + +Honeywell International Inc. 115 Tabor Road Morris Plains, NJ 07950 Attn: Senior Vice President and General Counsel + +with a copy to: + +Paul, Weiss, Rifkind, Wharton & Garrison LLP 1285 Avenue of the Americas New York, NY 10019-6064 Attn: Scott A. Barshay Steven J. Williams email: sbarshay@paulweiss.com swilliams@paulweiss.com Facsimile: 212-492-0040 14 + +Source: GARRETT MOTION INC., 8-K, 10/1/2018 + + + + + +Table of Contents + +If to SpinCo, to: + +Garrett Motion Inc. c/o Honeywell Transportations Sarl Z.A. La Piece 16 1180 Rolle, Vaud Switzerland Attn: Senior Vice President and General Counsel + +with a copy to: + +Paul, Weiss, Rifkind, Wharton & Garrison LLP 1285 Avenue of the Americas New York, NY 10019-6064 Attn: Scott A. Barshay Steven J. Williams email: sbarshay@paulweiss.com swilliams@paulweiss.com Facsimile: 212-492-0040 + +Either Party may, by notice to the other Party, change the address to which such notices are to be given. Each Party agrees that nothing in this Agreement shall affect the other Party's right to serve process in any other manner permitted by Law (including pursuant to the rules for foreign service of process authorized by the Hague Convention). + +Section 11.09. Import and Export Control. Each Party agrees that it shall comply with all applicable national and international laws and regulations relating to import and/or export control in its country(ies), if any, involving any commodities, software, services or technology within the scope of this Agreement. + +Section 11.10. Bankruptcy. The Parties acknowledge and agree that all rights and licenses granted by the other under or pursuant to this Agreement are, and shall otherwise be deemed to be, for purposes of Section 365(n) of the United States Bankruptcy Code, as amended (the "Bankruptcy Code"), licenses of rights to "intellectual property" as defined under Section 101 of the Bankruptcy Code. The Parties agree that, notwithstanding anything else in this Agreement, Honeywell and the members of the Honeywell Group and SpinCo and the members of the SpinCo Group, as licensees of such intellectual property rights under this Agreement, shall retain and may fully exercise all of its rights and elections under the Bankruptcy Code (including Honeywell's and the Honeywell Group members' and SpinCo's and the SpinCo Group members' right to the continued enjoyment of the rights and licenses respectively granted by under this Agreement). + +Section 11.11. Severability. If any provision of this Agreement or the application thereof to any Person or circumstance is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof, or the application of such provision to Persons or circumstances or in jurisdictions other than those as to which it has been held invalid or unenforceable, shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereby, so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to either Party. Upon any such determination, any such provision, to the extent determined to be invalid, void or unenforceable, shall be deemed replaced by a provision that such court determines is valid and enforceable and that comes closest to expressing the intention of the invalid, void or unenforceable provision. 15 + +Source: GARRETT MOTION INC., 8-K, 10/1/2018 + + + + + +Table of Contents + +Section 11.12. Expenses. Except as otherwise expressly provided in this Agreement, (i) all third-party fees, costs and expenses incurred by either the Honeywell Group or the SpinCo Group in connection with the provisions of this Agreement prior to or on the Distribution Date, whether payable prior to, on or following the Distribution Date (but excluding, for the avoidance of doubt, any financing fees or interest payable in respect of any indebtedness incurred pursuant to the Debt Incurrence), will be borne and paid by Honeywell and (ii) all third-party fees, costs and expenses incurred by either the Honeywell Group or the SpinCo Group in connection with the provisions of this Agreement following the Distribution Date, whether payable prior to, on or following the Distribution Date, will be borne and paid by the Party incurring such fee, cost or expense. + +Section 11.13. Headings. The article, section and paragraph headings contained in this Agreement, including in the table of contents of this Agreement, are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. + +Section 11.14. Survival of Covenants. Except as expressly set forth in this Agreement, the covenants in this Agreement and the Liabilities for the breach of any obligations in this Agreement shall survive the Spin-Off and shall remain in full force and effect. + +Section 11.15. Waivers of Default. No failure or delay of any Party (or the applicable member of its Group) in exercising any right or remedy under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such right or power, or any course of conduct, preclude any other or further exercise thereof or the exercise of any other right or power. Waiver by any Party of any default by the other Party of any provision of this Agreement shall not be deemed a waiver by the waiving Party of any subsequent or other default. + +Section 11.16. Amendments. No provisions of this Agreement shall be deemed waived, amended, supplemented or modified by any Party, unless such waiver, amendment, supplement or modification is in writing and signed by the authorized representative of each Party. + +Section 11.17. Interpretation. Words in the singular shall be held to include the plural and vice versa and words of one gender shall be held to include the other gender as the context requires. The terms "hereof," "herein," "herewith" and words of similar import, unless otherwise stated, shall be construed to refer to this Agreement as a whole (including all of the schedules hereto) and not to any particular provision of this Agreement. Article, Section or Schedule references are to the articles, sections and schedules of or to this Agreement unless otherwise specified. Any capitalized terms used in any Schedule to this Agreement but not otherwise defined therein shall have the meaning as defined in this Agreement. Any definition of or reference to any agreement, instrument or other document herein (including any reference herein to this Agreement) shall, unless otherwise stated, be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications 16 + +Source: GARRETT MOTION INC., 8-K, 10/1/2018 + + + + + +Table of Contents + +set forth therein, including in Section 11.15 above). The word "including" and words of similar import when used in this Agreement shall mean "including, without limitation," unless the context otherwise requires or unless otherwise specified. The word "or" shall not be exclusive. All references to "$" or dollar amounts are to lawful currency of the United States of America. In the event that an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties, and no presumption or burden of proof shall arise favoring or disfavoring either Party by virtue of the authorship of any provisions hereof. + +[SIGNATURE PAGES FOLLOW] 17 + +Source: GARRETT MOTION INC., 8-K, 10/1/2018 + + + + + +Table of Contents + +IN WITNESS WHEREOF, the Parties have caused this Intellectual Property Agreement to be executed by their duly authorized representatives. HONEYWELL INTERNATIONAL INC. + +By: /s/ Richard E. Kent Name: Richard Kent Title: Vice President, Deputy General Counsel, Finance and Assistant Secretary + +GARRETT MOTION INC. + +By: /s/ Su Ping Lu Name: Su Ping Lu Title: President + +[Signature Page to Intellectual Property Agreement] + +Source: GARRETT MOTION INC., 8-K, 10/1/2018 \ No newline at end of file diff --git a/full_contract_txt/GentechHoldingsInc_20190808_1-A_EX1A-6 MAT CTRCT_11776814_EX1A-6 MAT CTRCT_Distributor Agreement.txt b/full_contract_txt/GentechHoldingsInc_20190808_1-A_EX1A-6 MAT CTRCT_11776814_EX1A-6 MAT CTRCT_Distributor Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..7fabf59a65c45d175c1e467f017752e665f380c4 --- /dev/null +++ b/full_contract_txt/GentechHoldingsInc_20190808_1-A_EX1A-6 MAT CTRCT_11776814_EX1A-6 MAT CTRCT_Distributor Agreement.txt @@ -0,0 +1,129 @@ +Exhibit 6.1 DISTRIBUTOR AGREEMENT THIS DISTRIBUTOR AGREEMENT (this "Agreement") is made and effective as of1 August 2019, by and between, B & C General Warehouse Corporation LLC , a USA Limited Liability Company (LLC), with an address located at 7405 SW 11th CT, North Lauderdale, FL, 33068, USA, ("Company"), and XXXXXXXXXXXXXXXXXXXXX ("Distributor"). Company Import the products from Brazil Farm origin (Arte Café - Prescafe Torrefação e Comercio de Cafe, a Brazil company, with an address located at 1 Fazenda Sao Gabriel, Guaxupé, Cep 37800-000, Minas Gerais, Brazil), and sells the products listed in Section 1.c below (the "Products"). Distributor desires to purchase the Products from Company for resale in the territories or geographic areas as defined in Section 1.b (the "Territory"). Company desires to appoint Distributor as its exclusive distributor of the Products to all Clients that Distributor introduce, and upon confirmed the first order, this client come to be exclusive of Distributor, every new customer introduced by Distributor, must be approved by the company prior to any sale. After official approval from the Company, the customer introduced by Distributor, will appear on an official list in this contract, and will only be met by the Distributor and will follow the rules of this agreement. Distributor desires such appointment subject to the terms and conditions set forth in this Agreement, including any exhibits or schedules attached hereto. Now, Therefore, in consideration of the foregoing, and of the mutual benefit contained herein, the Parties, intending to be legally bound, agree as follows: AGREEMENT OF THE PARTIES 1. APPOINTMENT, ACCEPTANCE & SCOPE. (a) Exclusive Appointment. Subject to the terms and conditions of this Distributor Agreement, Company hereby appoints and grants Distributor the exclusive right to sell and distribute the Products to customers that Distributor introduce and confirmed by Company, (in all territory of United State of America (USA) and to render other services as a distributor for Company as set forth herein. Distributor shall limit its activities with respect to the Products to Customers located within the Territory and refrain from selling or otherwise transferring, directly or indirectly, the Products to any person outside the Territory, without the express written consent of Company. Company shall not sell or otherwise supply, directly or indirectly, the Products to any Distributor's Customer's, except by sale through the Distributor. The Company shall not contact any of Distributor's Customer's for any reason, without the prior written approval of Distributor. + +Source: GENTECH HOLDINGS, INC., 1-A, 8/8/2019 + + + + + +(b) Territory. The rights granted Distributor hereunder are granted for the following geographical areas and markets. USA. (c) Products. The Products manufactured and sold by Company to Distributor for distribution hereunder are as follows: ● Arte Café Especial ● Arte Café Gourmet ● Arte Café Laurina ● Arte Café Organico ● And all another new brand and or kind of coffee. (d) Subagents. Distributor may appoint, with prior approval of the Company, sub-agents, sub-distributors, sub-representatives or other persons to act on Distributor's behalf or to otherwise perform any of Distributor's obligations under this Agreement within the Territory; provided that (i) any compensation to such sub-agent, sub-distributor, sub-representative or other person to act on Distributor's behalf or to otherwise perform any of Distributor's obligations shall be solely Distributor's responsibility, and (ii) such appointment does not deprive Company of the essential rights to which it is entitled under this Agreement. Any agreement with such sub-agent, sub-distributor, sub-representative or other person shall not extend beyond the term of this Agreement. + +2 + +Source: GENTECH HOLDINGS, INC., 1-A, 8/8/2019 + + + + + +(e) Relationship of Parties. Distributor is an independent contractor and is not and shall not be deemed to be an employee, legal representative, dealer, general agent, joint venture or partner of Company for any purpose. Distributor acknowledges that Company has not granted it any authority to make changes to Company's terms and conditions of sale, grant any warranties in excess of those extended by Company or limit its liabilities or remedies less than Company limits its liabilities and remedies, sign quotations, incur obligations (expressed or implied), or in general enter into contracts on behalf of Company or bind Company in any transaction with customers, governmental agencies or third parties. 2. ORDERS, PRICE, TERMS OF SALE & PAYMENT. (a) Communications Pursuant to this Distributor Agreement and Orders. Orders shall be made with Company. Company understands that its timely acceptance of orders from Distributor hereunder is an important element of this Agreement. Company shall have Seven (7) business days after its receipt to accept (or reject for a legitimate business reason) any order submitted by Distributor. All the negotiations between Company and Distributor will be by INCOTERMS Ex-works, in origin farm, in Brazil. So will must be respected the Transite Time to destiny delivery. Should Company fail to timely accept or reject an order from Distributor in accordance with this Section, such order shall be deemed accepted and shall become binding on Company. All orders shall be fulfilled by Company within Seven (7) business days of order acceptance. (b) Prices and Shipment. Company agrees to sell, and Distributor agrees to purchase, the Products in accordance with the Prices and Volume Discount Prices set forth in Schedule A. Such Prices and Volume Discount Prices shall only be subject to increase once per year on each anniversary date of this Agreement, provided (i) Company provides Distributor with at least Ninety (90) days prior written notice of any such increase, and (ii) such increase does not exceed 5% of the preceding year's Prices, except for reasons of force majeure, (Chapter 10), and Volume Discount Prices nor the lowest price charged to others for the same Product. Any such change shall not apply for any order(s) accepted prior to the effective date of the increase. + +3 + +Source: GENTECH HOLDINGS, INC., 1-A, 8/8/2019 + + + + + +(c) Company shall package the Products for shipment in accordance with Distributor's instructions. All shipments of Products for Customers in the Territory, and any freight and shipping costs related thereto, will be Distributor's responsibility. All shipments will be prepared and shipped from Company's facility. Distributor will promptly inspect the Products upon receipt at Distributor's facility to determine whether any Products included in the shipment are in short supply, defective, or otherwise not in conformance with this Agreement. Within Seven (7) days of receipt of such Products, Distributor will notify Company of any shortages, defects, non-conformance, and Company will promptly replace such Products free of charge. Title to the Products shall pass to Distributor upon delivery. (d) Terms of Sale. All sales by Company shall be in accordance with the terms and conditions of this Agreement. (e) Payment. Upon Customer's acceptance of any order, Distributor shall submit to Customer via wire transfer at least Twenty-Five Percent (25%) of the total order price. Distributor shall submit to Customer via wire transfer the remaining balance upon receipt Packing List and Bill of landing documents, from origin in Brazil Farm. (f) Resale of the Products. Distributor shall be free to resell the Products for such prices and upon such terms and conditions as Distributor may see fit in its sole discretion. Company shall have no control over or any liability in connection with the price at which Distributor resells the Products, and Distributor shall hold Company harmless and indemnify and defend Company from and against any liability resulting therefrom. 3. REPRESENTATIONS. The Distributor and Company, as applicable, make the following representations, warranties and covenants: (a) Distributor is a company duly organized, validly existing and in good standing in the United States of America (USA) , is qualified to do business and in good standing in each jurisdiction located within the Territory and is and will remain in compliance with all applicable laws and regulations in the conduct of its business and, specifically, in its sale of the Products and provision of any services hereunder. + +4 + +Source: GENTECH HOLDINGS, INC., 1-A, 8/8/2019 + + + + + +(b) Company is a corporation, duly organized, validly existing and in good standing in the State of Florida, and is and will remain in compliance with all applicable laws and regulations in the conduct of its business and, specifically, in its sale of the Products. (c) Company warrants and represents that the Products will be free from defects in design, materials and workmanship and conform with any specifications provided. (d) Company has all rights, power, and authority to enter into this Agreement. (e) Company's execution of this Distributor Agreement, and Company's performance of its obligations and duties hereunder, do not and will not violate any agreement to which Company is a party or by which it is otherwise bound, and (f) Neither Party is subject to any pending or threatened litigation or governmental action that could interfere with its performance of this Agreement. (g) This Agreement is the binding legal obligation of each Party and is enforceable in accordance with its terms. 4. RESPONSIBILITIES OF DISTRIBUTOR. Distributor agrees that it will diligently perform the services and obligations detailed in this Agreement. The operations of Distributor are under its sole and exclusive control, including without limitation supervision of, and liability for expenses incurred with respect to, employees. The Distributor will use best reasonable efforts to distribute the Products in the Territory. 5. RESPONSIBILITIES OF COMPANY. In addition to any other responsibilities stated in this Agreement, Company will: (a) Provide, at Distributor's reasonable request and without charge, up to 10 hours of training with regard to any characteristics of the Products that Distributor deems reasonably necessary for Distributor and its employees and agents to fulfill the purposes of Distributor's appointment, + +5 + +Source: GENTECH HOLDINGS, INC., 1-A, 8/8/2019 + + + + + +(b) provide to Distributor, without charge, reasonable quantities of promotional literature, brochures and commercial and technical information regarding the Products; (c) provide sales support and technical training to Distributor and its personnel as deemed reasonably appropriate by Company. 6. CONFIDENTIAL & PROPRIETARY INFORMATION. (a) As used herein, the term "Proprietary Information" means any information, technical data, or know-how (including, but not limited to, information relating to products, software, services, development, inventions, processes, techniques, customers, pricing, internal procedures, business and marketing plans or strategies, finances, employees and business opportunities) disclosed by one Party (the "Disclosing Party") to the other (the "Recipient Party") either directly or indirectly in any form whatsoever, including, but not limited to, in writing, in machine readable or other tangible form, orally or visually. (b) Unless otherwise expressly authorized by the Disclosing Party, the Recipient Party agrees that it and any of its personnel receiving Proprietary Information under this Agreement shall treat such Proprietary Information in strict confidence with the same degree of care applied to its own Proprietary Information of like importance, which it does not wish to disclose, publish, or disseminate to third parties. (c) In no event will the Recipient Party divulge, in whole or in part, such information to any third party without the prior written consent of the Disclosing Party; provided, further, that any third party must also agree in writing to restrictions comparable to those provided in this Section 6. The Recipient Party may disclose the Proprietary Information to the extent required by a valid order by a court or other governmental body or by applicable law; provided, however, that the Recipient Party will use all reasonable efforts to notify Disclosing Party of the obligation to make such disclosure in advance of the disclosure so that Disclosing Party will have a reasonable opportunity to object to such disclosure. + +6 + +Source: GENTECH HOLDINGS, INC., 1-A, 8/8/2019 + + + + + +(d) Notwithstanding any other provisions of this Agreement, each party acknowledges that Proprietary Information shall not include any information that: (i) is already known to the Recipient Party at the time of disclosure, or becomes publicly known through no wrongful act of the Recipient Party's part; (ii) is rightfully received by the Recipient Party from a third party without breach of this Agreement; (iii) is independently developed by the Recipient Party without benefit of information received under this Agreement; (iv) is furnished to a third party by the Disclosing Party without a restriction on the third party's right to disclose it; or (v) is explicitly approved for release by written authorization by the Disclosing Party. (e) It is understood that all Proprietary Information disclosed under this Agreement, is, and shall remain, the property of the Disclosing Party. Upon completion of this Agreement, or upon written notice from the Disclosing Party, the Recipient Party agrees to return all Proprietary Information in its possession. (f) The Recipient Party acknowledges that the Disclosing Party, because of the unique nature of the Proprietary Information, would suffer irreparable harm in the event that the Recipient Party breaches its obligation under this Agreement and that monetary damages would be inadequate to compensate the Disclosing Party for such a breach. The Parties agree that, in such a circumstance, the Disclosing Party shall be entitled, in addition to such monetary relief as may be applicable, to injunctive relief as may be necessary to restrain any continuing or further breach by the Recipient Party, without showing or proving any actual damages sustained by the Disclosing Party. (g) The obligations of the Recipient Party under this Section 6 shall survive termination or nonrenewal of this Agreement for a period of thee (3) years. For the avoidance of doubt, the customer and sub-distributor lists of Distributor shall be deemed to constitute Proprietary Information under this agreement. + +7 + +Source: GENTECH HOLDINGS, INC., 1-A, 8/8/2019 + + + + + +7. DURATION & TERMINATION. (a) Effective Date and Duration. This Agreement shall become effective on the date first written above and shall continue in effect for a period of Three (3) years. (b) Distributor Option to Renew. Distributor shall have the option to renew this Agreement for an additional Three (3) year period by providing prior written notice to Company within Ninety (90) days of the end of the initial period of this Agreement. (c) Termination. Either Party may terminate this Agreement prior to its expiration upon the occurrence of either of the following: (i) the other Party becomes insolvent, or institutes (or there is instituted against it) proceedings in bankruptcy, insolvency, reorganization or dissolution, makes an assignment for the benefit of creditors or becomes nationalized or has any of its material assets confiscated or expropriated; or (ii) the other Party (in this case, the "breaching Party") fails to perform any of its obligations hereunder and fails to correct such failure within Ninety (90) calendar days after receiving written demand therefore from the non-breaching Party, specifying the failure in sufficient detail for the breaching Party to correct such failure; provided, however, that upon a second breach of the same obligation by such Party, the other Party may forthwith terminate this Agreement upon notice to the breaching Party. 8. RIGHTS OF PARTIES AT TERMINATION. (a) Obligations After Termination. In the event that this Agreement is terminated or expires on its own terms, Company shall have no further responsibilities to Distributor except that in the event the Agreement terminates for any reason other than a breach hereof by Distributor, Company shall be obligated to process orders accepted by Company prior to the effective date of such termination or expiration or within Ninety (90) days thereafter. (b) Survival. Notwithstanding anything to the contrary set forth herein, no termination of this Agreement shall relieve any Party from any obligations hereunder which are outstanding on, or relate to matters or claims occurring or arising prior to, the date of such termination or which survive such termination by their own terms or nature. + +8 + +Source: GENTECH HOLDINGS, INC., 1-A, 8/8/2019 + + + + + +9. INDEMNIFICATION & LIMITATION OF LIABILITY. (a) Indemnification. Each Party ("Indemnifying Party") shall indemnify, hold harmless and defend the other Party ("Indemnified Party") and its officers, directors, agents, employees, and affiliates, from and against any and all claims, demands, actions, costs, expenses, liabilities, judgments, causes of action, proceedings, suits, losses and damages of any nature, which are threatened or brought against, or are suffered or incurred by, the Indemnified Party or any such person to the extent caused directly by acts or omissions of the Indemnifying Party relating to this Agreement, including without limitation (i) any negligent or tortious conduct, (ii) any breach of any of the representations, warranties, covenants or conditions of the Indemnifying Party contained in this Agreement, (iii) any violation of applicable laws or regulations, (iv) infringement or violation of any patent, copyright, trade secret, or other proprietary interest of any third party, and (v) any breach of any express or implied warranties relating to the Products, including implied warranties of merchantability and fitness for a particular purpose. (b) Limitation of Liability.IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY SPECIAL, INDIRECT, EXEMPLARY OR CONSEQUENTIAL DAMAGES ARISING OUT OF THIS AGREEMENT OR PURCHASE OR USE OF THE PRODUCTS. 10. FORCE MAJEURE. Neither Party shall be held liable for any failure to perform that is due to any cause or circumstance beyond the reasonable control of such Party, including without limitation a demand for such Products and other products manufactured by Company which exceeds Company's ability to supply them, earthquakes, fire, accidents, floods, storms, other Acts of God, riots, wars, rebellions, strikes, lockouts or other labor disturbances, national or international emergencies, failure to secure materials or equipment from usual sources of supply, failure of carriers to furnish transportation, government rules, regulations, acts, orders, world financial crisis, restrictions or requirements or any other cause or circumstance beyond the reasonable control of such Party. No such inability to deliver or delay in delivery shall invalidate the remainder of this Agreement. + +9 + +Source: GENTECH HOLDINGS, INC., 1-A, 8/8/2019 + + + + + +11. TRADEMARKS. Distributor shall not dispute or contest for any reason whatsoever, directly or indirectly, during the term of this Agreement and thereafter, the validity, ownership or enforceability of any of the trademarks of Company, nor directly or indirectly attempt to acquire or damage the value of the goodwill associated with any of the trademarks of Company, nor counsel, procure or assist any third Party to do any of the foregoing. Distributor will not institute any proceedings with respect to the trademarks of Company either in Distributor's own name or on behalf of Company without express written permission of Company. Distributor shall assign to Company, without charge, any rights in the trademarks of Company that may inure to the benefit of Distributor pursuant to this Agreement or otherwise. Distributor shall execute any documents or do any acts that may be required to accomplish the intent of this Section. 12. GENERAL PROVISIONS. (a) Amendments. This Agreement may be amended only by a writing signed by each of the Parties, and any such amendment shall be effective only to the extent specifically set forth in such writing. (b) Governing Law. This Agreement is a contract under the laws of the State of Florida and for all purposes shall be governed by and construed in accordance with the substantive laws of the State of Florida, without regard to its principles of conflicts of laws provisions. (c) Disputes. The Parties shall seek to resolve any dispute, controversy or claim arising out of or in connection with this Agreement, including without limitation, any dispute regarding the enforceability of any provision, through good faith negotiations between them within Thirty (30) days of any notice of dispute being served or such longer period of time as may be mutually agreed between the Parties. If the Parties are unable to resolve the dispute within this timeframe, and one or both parties one or both parties desire to pursue the dispute, the complaining party must submit the dispute to binding arbitration in accordance with the rules and regulations of the American Arbitration Association. The Parties will share equally the cost of arbitrating such dispute. The arbitrator(s) shall not be empowered to award punitive or other damages in excess of compensatory damages, and both parties irrevocably waive the right to any such damages. Judgment on the award rendered by the arbitrator(s) may be entered by any court having jurisdiction over the dispute. In the event that the parties cannot agree upon an arbitrator within a Thirty (30) day period, each party shall designate an arbitrator and those two arbitrators shall choose a third arbitrator, with that third arbitrator serving as the sole arbitrator of the dispute. + +10 + +Source: GENTECH HOLDINGS, INC., 1-A, 8/8/2019 + + + + + +(d) Assignment. Neither Party shall assign, pledge or otherwise transfer any of its rights, interest or obligations hereunder, whether by operation of law or otherwise, without the prior express written consent of the other Party. (e) Counterparts; Email Execution. This Agreement may be executed in any number of counterparts, and by each of the Parties on separate counterparts, each of which, when so executed, shall be deemed an original, but all of which shall constitute but one and the same instrument. Delivery of an executed counterpart of this Agreement by email shall be equally as effective as delivery of a manually executed counterpart of this Agreement. Any Party delivering an executed counterpart of this Agreement by email shall also deliver a manually executed counterpart of this Agreement, but the failure to deliver a manually executed counterpart shall not affect the validity, enforceability or binding effect of this Agreement. (f) Cumulative Remedies. The rights and remedies of the Parties hereunder are cumulative and not exclusive of any rights or remedies which the Parties would otherwise have. No single or partial exercise of any such right or remedy by a Party, and no discontinuance of steps to enforce any such right or remedy, shall preclude any further exercise thereof or of any other right or remedy of such Party. (g) Entire Agreement. This Agreement contains the entire agreement of the Parties with respect to the transactions contemplated hereby and supersedes all prior written and oral agreements, and all contemporaneous oral agreements, relating to such transactions. (h) Exhibits and Schedules.The exhibits or schedules attached hereto are an integral part hereof and all references herein to this Agreement shall include such exhibits and schedules. + +11 + +Source: GENTECH HOLDINGS, INC., 1-A, 8/8/2019 + + + + + +(i) Notices. Unless otherwise specifically provided herein, all notices, consents, requests, demands and other communications required or permitted hereunder: (i) shall be in writing; (ii)) shall be sent by email, certified or registered U.S. mail, or reliable express delivery service (with a copy sent by one of the foregoing means), charges prepaid as applicable, to the appropriate address(es) or number(s) set forth below; and (iii) shall be deemed to have been given on the date of receipt by the addressee, as evidenced by (A) a receipt executed by the addressee (or a responsible person in his or her office), the records of the Person delivering such communication or a notice to the effect that such addressee refused to claim or accept such communication, if sent by messenger, U.S. mail or express delivery service, or (B) a receipt generated by the sender's email showing that such communication was sent to the appropriate number on a specified date, if sent by email. All such communications shall be sent to the addresses for each Party as first set forth above, or to such other addresses or numbers as any Party may inform the others by giving Seven (7) days prior notice. (j) Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining portions hereof or affecting the validity or enforceability of such provision in any other jurisdiction. (k) Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of each of the Parties and their respective successors and permitted assigns. + +12 + +Source: GENTECH HOLDINGS, INC., 1-A, 8/8/2019 + + + + + +IN WITNESS WHEREOF, this Agreement was signed by the Parties under the hands of their duly authorised officers and made effective as of the date first written above. Luiz Augusto Matavelli Bacetti B & C General Warehouse Corporation LLC Date: 04th, August, 2019. xxxxxxxx xxxxxxxx Date: + +Source: GENTECH HOLDINGS, INC., 1-A, 8/8/2019 + + + + + +SCHEDULE A PRICES AND DISCOUNT VOLUME PRICES Subject to Company's right to increase the price only once per year per the terms and restrictions contained in the Agreement, and Company's right to decrease the price at any time upon notice, the Products shall be sold by Company to Distributor at the following Prices and Volume Discount Prices. Prices are in US Dollars. ● $9 (US) per kilogram Ex-work Incoterms. (Brazil Farm). Distributor will be appropriately credited should Distributor make payment related to an order and later determine that it had achieved a greater discount per the above. + +Source: GENTECH HOLDINGS, INC., 1-A, 8/8/2019 \ No newline at end of file diff --git a/full_contract_txt/GlobalTechnologiesGroupInc_20050928_10KSB_EX-10.9_4148808_EX-10.9_Content License Agreement.txt b/full_contract_txt/GlobalTechnologiesGroupInc_20050928_10KSB_EX-10.9_4148808_EX-10.9_Content License Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..0cf6f0739f08d297a2ab8898f50fde4b61ccd1bc --- /dev/null +++ b/full_contract_txt/GlobalTechnologiesGroupInc_20050928_10KSB_EX-10.9_4148808_EX-10.9_Content License Agreement.txt @@ -0,0 +1,361 @@ +EXHIBIT 10.9 GLOBAL MUSIC INTERNATIONAL, INC. DBA IMNTV CONTENT LICENSE AGREEMENT + +This Content License Agreement ("Agreement") is between Global Music International, Inc. d/b/a Independent Music Network (IMNTV), located at 20 Old Stagecoach Road, Redding, Connecticut, 06896 ("IMNTV"), and Distributor, as set forth below, and describes the terms and conditions under which Distributor will distribute Programming provided by IMNTV as described herein. Distributor's distribution of the Programming is subject to the Master Terms of Service ("MTS") attached hereto as Exhibit A. All capitalized terms shall have the meaning set forth on the MTS. In consideration for the mutual promises and covenants contained herein, the parties agree as follows: + +Distributor's authorized signature, is REQUIRED: + +A. Distributor Information N/A Provider Name: MobileVision Communications Ltd. + +Address: 100 Ba Li Zhuang Xi Li, Suite 907, ZhuBang2000 Plaza, East Building, Beijing, China + +COUNTRY PROVINCE: P.R.China + +Web Site www.looklook.cn + +Tax ID #: N/A + +Business Contact: Name: MengDi Xu + + Phone: +86 135 010 37211 + + Email: xumengdi@looklook.cn + +Marketing Contact: Name: BaoQing (Angel) Song + + Phone: +86 13911178981 + + Email: angelsong@looklook.cn + +Technical Contact: Name: WeiLi Cheng + + Phone: +86 13011813916 + +Email: chengwl@mobiledata.com.cn + +Billing contact: Name: RuoXian Qi + + Phone: +86 13161502302 + + Email: ruoxian@looklook.cn + +Billing Address: (if different from above) Customer Service Contact: Name: Liang (Dean) Wang + + Phone: +86 136 2131 5977 + + Email: deanwang@looklook.cn + +Notice Contact: Name: RuoXian Qi + + Phone: +86 13161502302 + + Email: ruoxian@looklook.cn + +Notice Address: (if different from above) + +Source: GLOBAL TECHNOLOGIES GROUP, INC., 10KSB, 9/28/2005 + + + + + + B. Term + +This Agreement is effective as of the last date signed below ("Effective Date"). The initial term of this Agreement will begin on the Effective Date and end twelve (12) months after the Launch (the "Term"). IMNTV will extend the Agreement on the same terms and conditions for additional one-year terms, providing Distributor and IMNTV agree, predicated on satisfactory performance by both parties IN WITNESS WHEREOF, the parties have executed this Agreement by their duly authorized representatives. DISTRIBUTOR + +MOBILEVISION COMMUNICATIONS LTD. By: Name Andrew Zhang Title PRESIDENT Signature /s/ Andrew Zhang Date 13/07/05 + +GLOBAL MUSIC INTERNATIONAL, INC. D/B/A INDEPENDENT MUSIC NETWORK (IMNTV) + +By: Name Corinne Fallacaro Title PRESIDENT Signature /s/ Corinne Fallacaro Date 13/07/05 + +Source: GLOBAL TECHNOLOGIES GROUP, INC., 10KSB, 9/28/2005 + + + + + + EXHIBIT A + +GLOBAL MUSIC INTERNATIONAL, INC. DBA IMNTV MASTER TERMS OF SERVICE + +1. DEFINITIONS + +The following capitalized terms will have the meanings set forth below: "Bundles" means, any version of the Mobile Product that includes IMNTV content bundled with any other product or service. + +"Confidential Information" means the confidential or proprietary technical or business information of a party, including without limitation (a) proposals or research related to possible new products or services; (b) financial statements and other financial information; (c) reporting information; (d) the material terms of this Agreement and the relationship between the parties; and (e) planned launch dates. All of the information will be considered confidential only if it is conspicuously designated as "Confidential," or if provided orally, identified at the time of disclosure as confidential. "Confidential Information" does not include information that (i) is in or enters the public domain without breach of this Agreement, (ii) the receiving party lawfully receives from a third party without restriction on disclosure and without breach of a nondisclosure obligation, or (iii) the receiving party knew prior to receiving such information from the disclosing party or develops independently. + +"Content" means generally text, images, video, audio, and other material. + +"Fees" means Subscription Fees that include IMNTV content.. + +"Internet Protocol" means any protocol used to route data on the Internet, or on any portion of the Internet, including all versions currently in existence or developed or implemented in the future. + +"Landing Page" means the destination web page for a Special Link, created and hosted by Distributor, from where individuals may begin the Registration Process for the Subscription Service or a Bundle, at such individual's election. + +"Launch" means the date that the Programming is made generally available for purchase by consumers under the terms and conditions of the Agreement. + +"Programming"means IMNTV's Content, as specifically described on Section B (1) of the Agreement. As used herein, "Programming" also includes any promotional and marketing Content provided by Provider for IMNTV's promotional and marketing activities as described herein. + +"Programming Bundle Fee" means the fee actually paid by a Subscriber for a Programming Bundle that includes IMNTV content provided in accordance with this Agreement. + +"Distributor Marks" means the trademarks, service marks, brands, logos and trade names of Distributor. + +"Distributor Portal" means, collectively, the Distributor's Site and any other web site or property from where Distributor promotes the Programming. + +"Distributor Site" means Distributor's Internet web site intended to promote the availability of any Distributor Content, including the Programming, via mobile and wireless networks. Distributor Site is more fully described in Section A of the Agreement. + +"Subscription Fee" means the fee actually paid by a Subscriber for the applicable Mobile Content. + +"Subscriber" means any individual who purchases mobile content programming and: (a) who actually pays the applicable Subscription Fee; and (b) does not receive a refund of such Subscription Fee for any reason within thirty (30) days from the end of the payment period for which the Subscription Fee was paid. A Subscriber remains a "Subscriber" for the purposes of this Agreement so long as such individual continues to pay the applicable Subscription Fee. + +"Registration Process" means the download, payment, installation, and electronic registration process of the Programming, a Bundle or the applicable Software. "Registration Process" may include an online registration form + +Source: GLOBAL TECHNOLOGIES GROUP, INC., 10KSB, 9/28/2005 + + + + + + provided, hosted, and managed by Distributor, and may also, at Distributor's discretion, include other methods by which a Subscriber may affirmatively request access to the Programming, a Bundle, or the Software. "IMNTV Marks" means the trademarks, service marks, brands, logos and trade names of IMNTV and/or Global Music International. + +"IMNTV Portal" means the IMNTV Sites where IMNTV promotes the Programming. + +"IMNTV Sites" means the Internet web sites owned and operated by IMNTV. + +"Special Link"means a formatted or "tagged" link that tracks traffic from the Distributor Portal to the Landing Page. + +"Subscribers" means, collectively, end users who have completed the Registration Process for any of the Subscription Products described herein. "Subscribers" includes "Recurring Subscribers." + +"Subscription Products" means, collectively Products and Bundles that include IMNTV content. + +"IMNTV Mobile Product" means an IMNTV branded subscription product distributed to mobile and wireless devices, which includes services, products and Content from one or a variety of third parties, and includes any derivative, follow-on, repackaged, or substantially similar product offered by Distributor that includes IMNTV Programming. + +"Bundle Fee" means the fee actually paid by a Subscriber for the Mobile Product Bundle that includes provider content provided in accordance with this Agreement. + +"IMNTV Mobile Product Fee" means the fee actually paid by a Subscriber for the IMNTV Mobile Product. + +"Recurring Subscriber" for the purpose of this Agreement so as long as such individual continues to pay the applicable Subscription Fee, so long as IMNTV actually receives such fee. + +"Territory" means China. Other territories are subject to approval by IMNTV. + +2. DISTRIBUTOR OBLIGATIONS. + +2.1 Subscription Transactions. Distributor will provide the following services to market, launch and distribute the Programming using its existing infrastructure as follows: + +(a) Fulfillment. Each individual who purchases a Subscription must complete the Registration Process, where such individual will be prompted to provide certain personally identifiable information including a valid major credit card (e.g. Visa, MasterCard, Discover, American Express) to receive the Programming. Support for additional payment methods and additional credit cards may be developed by Distributor, with IMNTV's prior written approval. + +(b) Customer Support. Distributor will provide customer support in target Territory in a workmanlike and professional manner. + +2.2 Distribution Channels. Distributor and IMNTV may create, sell and market Bundles that include the IMNTV Programming. Distributor may offer the Programming and any Bundles through all wireless distribution channels in target Territory. To enable all Subscribers to have access to the Programming, the Programming may be distributed in whole or in part via Internet Protocol in a manner that enables the Programming to be received and played back by mobile devices in the target Territory. + +2.3 Hosting Services. Hosting of on-demand Programming will be provided at no cost to IMNTV in a format acceptable to local Territory wireless devices. Distributor will provide reports of aggregated Subscriber access and usage data concerning the Programming on a monthly basis, together with reports described in Section 6.5, below. + +2.4 Promotion of Programming. Distributor may use the Programming and IMNTV's Marks to market, advertise and promote the Programming in the Mobile Software Application(s), the Distributor's Portal, and in other on and off-line marketing efforts as follows: (a) promoting the Programming in directories, listings, and keyword searches; (b) deep linking to the Programming; (c) featuring Programming in various areas within the Distributor's Software and Distributor's Portal, (d) communicating to users via Distributor's consumer marketing channels such as on-line messages, member newsletters or email campaigns; (e) featuring excerpts, screenshots of Programming in marketing collateral and advertisements; (f) featuring the Programming in product demonstrations relating to Distributor's + +Source: GLOBAL TECHNOLOGIES GROUP, INC., 10KSB, 9/28/2005 + + + + + + software or subscription products at trade shows and conferences; (g) creating collateral for joint promotional efforts between Distributor and third parties; (h) promoting the Programming in television, radio and print media. IMNTV may use Distributor's logos and marks in the marketing of the Product, subject to pre- approved trademark usage policy and Brand Standards to be provided by Distributor to IMNTV. + +2.5 Distributor Support and Operational Responsibilities. Distributor will provide all "middleware" programming to facilitate connection of the content delivery platform to local Territory wireless networks. Distributor will perform localization of any software components to make the program possible to use in the local Territory. This is to include language translations or interface design changes. Provider will act as liaison with local Territory wireless carriers. This will include content review to insure content meets local broadcast standards and meets any local regulatory requirements. Distributor also agrees to secure necessary governmental approvals or permits necessary to operate in the Territory and to secure permission to enable distribution of IMNTV's share of Subscription Fees to IMNTV in the United States. Distributor is solely responsible for monitoring, performance and ensuring the availability of the Programming and will notify IMNTV immediately of planned and unplanned Programming delays or outages. + +2.6 Privacy. Distributor is responsible for complying with all applicable laws, rules and regulations relating to its collection and use of personal information from users of the Distributor Portal. At a minimum, Distributor must adopt, implement and comply with a Privacy Policy that: (a) is easy to find, read and understand; (b) is prominently posted at the time that any personally identifiable information is collected or requested; and (c) clearly states what information is being collected, what the information will be used for, whether such information will be provided to third parties, and the choices available regarding collection, use and distribution of the collected information. + +3. IMNTV OBLIGATIONS. + +3.1 Grant of License. During the Term, for the activities described in this Agreement, IMNTV hereby grants Distributor non-exclusive rights and licenses necessary within the Territory to: (a) copy, store digitally, host and stream the Programming; (b) publicly perform, publicly display, electronically transmit, distribute and broadcast the Programming; (c) promote the Programming and use IMNTV Marks for Distributor's promotion of the Programming as activities described in Section 2.4 above; (d) archive the Programming on Distributor's servers; (e) encode, copy, and create continuous Programming excerpts of up to sixty (60) seconds and transmit, publicly perform, distribute, and redistribute such excerpts to end users via the Distributor's Portal for marketing purposes only(f) deep link to the Programming. + +3.2 Right of distribution N/A 3.3 Removed N/A 3.4 Programming Obligations. IMNTV will create and maintain it's programming content and will deliver same to Distributor in a format suitable for the distribution over wireless networks in Distributor's Territory on a regular basis. + +3.5 Logo Trademarks. Distributor may use IMNTV logos and marks in the marketing of the Product, subject to pre-approved trademark usage policy and Brand Standards. + +3.6 Dedicated Personnel. Throughout the Term, IMNTV shall designate at least one (1) staff member to provide Distributor with all reasonably necessary assistance, information and support relating to its obligations herein including, but not limited to, updating and maintaining the Programming. + +3.7 Responsibility for Programming. Except as expressly set forth herein, IMNTV is solely responsible for all costs, activities, obligations and liabilities associated with: (a) obtaining all rights and licenses necessary for the authorized use and distribution of the IMNTV Programming as described herein including, but not limited to, all copyright, trademark rights, rights of publicity and rights of privacy, and any broadcast, rebroadcast, or retransmission rights or permissions; and (b) obtaining all necessary permissions and/or release documentation from all persons associated with the distribution of the Programming as described herein, including, without limitation, all performers. + +4. ADVERTISING The IMNTV Programming will not contain any advertising, either integrated or before or after each clip, except IMNTV I'Ds and IMNTV commercials for solicitation of Chinese music videos,without the prior written approval of both parties. + +Source: GLOBAL TECHNOLOGIES GROUP, INC., 10KSB, 9/28/2005 + + + + + +5. OWNERSHIP. + +5.1 By IMNTV. As between Distributor and IMNTV, IMNTV owns or has the necessary licenses to all copyright, trademark, patent and other intellectual property rights in and to, and all other right, title and interest in and to the Programming, the Trademarks and the IMNTV Portal. Except as expressly provided herein, IMNTV retains the right to distribute the Programming in any medium now known or hereafter developed. As between IMNTV and Distributor (excluding the Programming and other Provider intellectual property), IMNTV owns all copyright, trademark, patent and other intellectual property rights therein, and all other right, title and interest in and to or associated with the Subscription Products, the IMNTV Sites, the IMNTV Marks, and the System and Subscriber data. + +5.3 Trademarks. Each party: (a) will not create a unitary composite mark involving a trademark of the other party without the prior written approval of such other party; (b) will display symbols and notices clearly and sufficiently indicating the trademark status and ownership of the other party's trademarks in accordance with applicable trademark law and practice; (c) acknowledges that its utilization of the other party's trademarks will not create in it, nor will it represent it has, any right, title or interest in or to such trademarks other than the licenses expressly granted herein; (d) agrees not to do anything contesting or impairing the trademark rights of the other party; (e) agrees to promptly notify the other party of any unauthorized use of the other party's trademarks of which it has actual knowledge; and (f) will have the sole right and discretion to bring proceedings alleging infringement of its trademarks or unfair competition related thereto; provided, however, that each party agrees to provide the other party, at such other party's expense, with its reasonable cooperation and assistance with respect to any such infringement proceedings + +6. FEES AND ROYALTIES + +6.1 Mobile Product Payments. Subscription fee in Territory is to be determined based on market research performed by Distributor with pricing to be agreed upon jointly and in writing Each quarter, Distributor will make royalty payments to IMNTV based on a Structure as follows: + +55% of subscriber revenue for the subscription based services broadcasting IMNTV content only, net of telecom percentage provided in accordance with this Agreement. ("Programming Payments"), subject to the following: The parties acknowledge that some mobile carriers may bill end users for a full month in a single billing, and that others may bill for partial months or pro-rate the billing of Recurring Subscribers. For each full month of Fees received from a Recurring Subscriber, Distributor will pay IMNTV based on the Rate Structure (the "Full Month Payment"). To the extent that Distributor receives a partial month's Fee or pro-rated Fee from a Recurring Subscriber as a result of a carrier's billing practices, Distributor will pay IMNTV a proportionate or pro-rated portion of such Full Month Payment based on the amount received by Distributor. + +6.2 Payments. All payments hereunder shall be payable to IMNTV in United States Dollars on a quarterly basis upon receipt from the wireless carriers in the Territory, except as follows: + +(a) First Payment. The first payment to IMNTV will be payable upon receipt at the end of the first calendar quarter after Launch, and will include any amounts due, pro-rated based on the number of days in such period of time; and + +(b) Last Payment. The last payment to IMNTV will be payable upon receipt at the end of the first full month after the termination or expiration of this Agreement, and will include any amounts due: for the last month that the Programming is available, prorated based on the number of days in such final period. + +(c) Other Exceptions. All payments hereunder are exclusive of: (i) any trial or promotional periods during which a Subscriber receives access to the Programming before such Subscriber's credit card is charged; and (ii) refunds, charge backs and fees attributable to contested credit card transactions + +(d) Summary of Timing. The parties acknowledge the following that establishes timing of payments: (1) Distributor receives a carrier statement saying how much Distributor will be paid; (2) 30-45 days later the Carrier pays Distributor; (3) when Distributor is paid by a carrier, Distributor makes royalty payments to IMNTV. + +(e) Exchange Rate. Payments to IMNTV will be converted from local currency to US Dollars at the official exchange rate posted on the day payments are made to IMNTV via wire transfer provided that currency exchange is approved by the relevant Chinese currency exchange administrative agency. + +Source: GLOBAL TECHNOLOGIES GROUP, INC., 10KSB, 9/28/2005 + + + + + + 6.3 Provider Payment Location. Distributor will remit such payments a bank account specifically named by IMNTV.. + +6.4 Taxes. Distributor will collect and remit to the appropriate taxing authority, or require Subscribers to pay, any sales, use or similar taxes applicable to any retail sale or distribution of the Programming. Except for the foregoing, each party is solely and separately responsible for its own taxes, user fees, or similar levies. + +6.5 Reporting. Distributor will provide IMNTV with a quarterly report or monthly report if available, summarizing the data relevant to the payment obligations herein within five (5) business days from the end of the calendar quarter. The reports will contain sufficient information to permit Provider to verify payments hereunder. + +7. TERMINATION + +7.1 General Termination Rights. Either party may terminate the Agreement at any time in the event of a material breach by the other party that remains uncured after thirty (30) days written notice of the breach. + +7.2 Termination for Programming Deficiency. Distributor reserves the right to issue a warning immediately to Subscribers, to temporarily or indefinitely suspend the availability of the Programming, or to terminate this Agreement (the "Remedies") if IMNTV breaches this Agreement. In the event that Distributor exercises any of its rights set forth in this Section 7.2, Distributor will notify IMNTV of the Programming Deficiency, Distributor's elected Remedy, and the available cure options, and will provide IMNTV with a reasonable period of time in which IMNTV may cure the Programming Deficiency (the "Cure Period"). During the Cure Period, if commercially reasonable, the Distributor may help IMNTV cure the Programming Deficiency, but is under no affirmative obligation to do so. If IMNTV fails to cure the Programming Deficiency within the Cure Period, Distributor may terminate this Agreement immediately upon written notice. In the event of a suspension or termination under this Section 7.2, Distributor will notify Subscribers that the Programming is no longer available. Distributor will be solely liable for any refunds pertaining to the Programming that are issued to Subscribers as a result of termination under this Section 7.2. + +7.3 Termination for Bankruptcy/Insolvency. Either party may terminate this Agreement immediately following written notice to the other party if the other party: (a) ceases to do business in the normal course; (b) becomes or is declared insolvent or bankrupt; (c) is the subject of any proceeding related to its liquidation or insolvency (whether voluntary or involuntary) which is not dismissed within ninety (90) calendar days; or (d) makes an assignment for the benefit of creditors. + +7.4 Effect of Termination. Except as set forth in Section 7.3 above, upon termination or expiration of this Agreement: (a) the licenses granted to Distributor will immediately terminate; and (b) all fees due to IMNTV will be paid to IMNTV pursuant to Section 6.3 of this Agreement. In the event that Distributor terminates this Agreement pursuant to either Section 7.2 or 7.3 above, Distributor will notify Subscribers that the Programming is no longer available. Sections 5, 6.3, 6.6, 7.2, 7.4, 8, and 9 of this MTS will survive the expiration or termination of the Agreement for any reason. + +8. WARRANTIES AND INDEMNIFICATION + +8.1 Provider Warranty and Indemnification. IMNTV represents and warrants to Distributor that: (i) IMNTV is an entity duly organized and validly existing under the laws of its state of organization; (ii) IMNTV has the power and authority to enter into this Agreement and to perform fully its obligations under this Agreement; (iii) IMNTV is under no contractual or other legal obligation which could reasonably be expected to interfere in any way with its prompt and complete performance under this Agreement; and (iv) the person executing this Agreement on behalf of IMNTV has been duly authorized to do so and such execution is binding upon IMNTV. + +IMNTV will defend, indemnify, and hold Distributor harmless from and against any and all liabilities, claims, losses, costs, damages and expenses (including reasonable attorneys' fees and court costs) (collectively, "Claims") relating to or arising out of: (a) IMNTV's breach of this Agreement; (b) the Content of the Programming (e.g., if such Claim alleges copyright or trademark infringement or infringement of any other proprietary right) as furnished by IMNTV under this Agreement (excluding any Claim to the extent based on any alteration of or insertion in any IMNTV content by Distributor that is not specifically authorized by IMNTV in writing), IMNTV Marks or IMNTV Site; (c) any IMNTV online subscription service, the Programming with the Mobile Subscription Products, or IMNTV's acts or omissions with + +Source: GLOBAL TECHNOLOGIES GROUP, INC., 10KSB, 9/28/2005 + + + + + + respect thereto (including the marketing of the foregoing by IMNTV and excluding any Claim to the extent based on any alteration of or insertion in any Programming by Distributor); (d) violation by IMNTV of any contractual obligation, including payments or royalties, that IMNTV has to any third party; (e) a claim that the Programming as provided by IMNTV does not comply with any federal, state and local laws and regulations that are applicable to Distributor's transmission or use of Programming as permitted this Agreement; or (f) IMNTV not having obtained all necessary consents, licenses, permissions and releases necessary to grant Distributor the rights IMNTV grants to Distributor hereunder. + +8.2 Distributor Warranty and Indemnification. Distributor represents and warrants to IMNTV that: (i) Distributor is an entity duly organized and validly existing under the laws of its country of organization; (ii) Distributor has the power and authority to enter into this Agreement and to perform fully its obligations under this Agreement; (iii) Distributor is under no contractual or other legal obligation which could reasonably be expected to interfere in any way with its prompt and complete performance under this Agreement; and (iv) the person executing this Agreement on behalf of Distributor has been duly authorized to do so and such execution is binding upon Distributor. Distributor will defend, indemnify, and hold IMNTV harmless from and against any and all Claims relating to or arising out of: (a) the marketing by Distributor of the Programming (excluding Claims to the extent based on Programming or other content provided by or approved by IMNTV), or any Subscription Product which includes any Programming, (b) any Claim by any Subscriber concerning Distributor's operation and maintenance of the Subscription Products (except for content Claims described in Section 9.1, Claims concerning the transmission of Subscriber Information to IMNTV, or the use of Subscriber Information by IMNTV or by any third party to whom IMNTV has disclosed such information); (c) Distributor's alternation of, or insertion of material (including commercial advertisements) in, any Programming, except as explicitly authorized in each case in writing by IMNTV; and (d) any infringement of the Subscription Products on the rights of others (excluding any Claim to the extend based on any Programming). + +8.3 Conditions of Indemnification. A party's obligation to indemnify the other party is expressly conditioned on the indemnified party: (a) giving written notice of the claim promptly to the indemnifying party; (b) giving the indemnifying party control of the defense and settlement of the claim utilizing, if necessary, legal counsel to be selected by the indemnifying party upon reasonable approval of the other party; (c) providing to the indemnifying party all available information and assistance (at the indemnifying party's expense); and (d) not compromising or settling such claim, without the other party's prior written consent which may not be unreasonably withheld. + +8.4 Disclaimer of Warranties. EXCEPT AS EXPRESSLY SET FORTH HEREIN, NEITHER PARTY MAKES ANY WARRANTIES OR REPRESENTATIONS RELATING TO THE SUBSCRIPTION PRODUCTS, OR THE LIKELIHOOD OF SUCCESS OF THE PROGRAMMING, THE MOBILE NTENT PRODUCT, OR ANY BUNDLE. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, IMNTV FURTHER DISCLAIMS ALL WARRANTIES IN THE SUBSCRIPTION PRODUCTS, INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND NONINFRINGEMENT. + +8.5 Limitation of Liability. NO PARTY WILL BE LIABLE TO THE OTHER PARTY IN TORT, CONTRACT OR UNDER ANY OTHER LEGAL THEORY FOR ANY CONSEQUENTIAL, INDIRECT, INCIDENTAL, PUNITIVE OR SPECIAL LOSS OR DAMAGES ARISING OUT OF THIS AGREEMENT, EVEN IF APPRISED OF THE LIKELIHOOD OF SUCH DAMAGES OCCURRING. IN NO EVENT WILL IMNTV'S LIABILITY TO DISTRIBUTOR UNDER THIS AGREEMENT EXCEED THE AMOUNT ACTUALLY DUE TO IMNTV HEREIN. + +9. GENERAL + +9.1 Notices and Contact Information. All notices and demands under this Agreement will be in writing and will be delivered by personal service, express courier, or United States mail, to the following addresses: If to IMNTV: Independent Music Network 20 Old Stagecoach Road Redding, CT 06896 USA Attention: General Counsel If to Provider: To the Notice Contact as set forth in Section A of the Agreement. + +Either party may change the addresses set forth above by written notice to the other party. Notice will be effective on receipt. Any notice or report delivered in accordance with this Section will be deemed given on the date actually + +Source: GLOBAL TECHNOLOGIES GROUP, INC., 10KSB, 9/28/2005 + + + + + + delivered; provided that any notice or report deemed given or due on a Saturday, Sunday or legal holiday will be deemed given or due on the next business day. If any notice or report is delivered to any party in a manner which does not comply with this Section 9.1, such notice or report will be deemed delivered on the date, if any, such notice or report is actually received by the other party. 9.2 Non-Assignment. This Agreement is binding upon each party's assigns, transferees and successors; provided that no party may assign or otherwise transfer, by operation of law or otherwise, this Agreement in whole or in part, without the other party's prior written consent. Notwithstanding the prior sentence, either party may assign this Agreement in its entirety without the other party's consent to any of the following: (i) the assignor's successor in a consolidation or merger, (ii) the assignor's successor in an acquisition of all or substantially all of the assets, equity or beneficial interests of the assignor, (iii) an entity under common control with, controlled by or in control of the assignor, or (iv) a lender, as an assignment of collateral to secure credit extended to the assignor. The assignor will give the other party written notice within thirty (30) days of any assignment described in the immediately preceding sentence. + +9.3 Confidentiality. The parties acknowledge that Confidential Information is valuable and unique and that disclosure in breach of this confidentiality provision will result in irreparable injury to its owner. From the Effective Date and for a period of two (2) years from the date of termination or expiration of this Agreement, neither party will use, disclose, or permit any person to obtain any Confidential Information of the other party. If either party receives a request from any third party for the Confidential Information of the other party, or if such party is directed to disclose any portion of any Confidential Information of the other party by operation of law or in connection with a judicial or governmental proceeding or arbitration, it will immediately notify the other party and will assist the other party in seeking a suitable protective order or assurance of confidential treatment to preserve the confidentiality of any such Confidential Information. If either party breaches or threatens to breach the terms of this confidentiality provision, the non-breaching party will be entitled to an injunction prohibiting any such breach. Any such relief will be in addition to and not in lieu of any appropriate relief in the way of money damages. + +9.4 Press Releases and Public Statements. Neither party will issue any press releases or make public statements relating to this Agreement or the relationship between the parties without the other party's review of and written consent to such press release or public statement. + +9.5 Force Majeure. No party shall be deemed in default hereunder for any cessation, interruption or delay in the performance of its obligations due to causes beyond its reasonable control, including but not limited to: earthquake, flood, or other natural disaster, act of God, labor controversy, civil disturbance, war (whether or not officially declared) or the inability to obtain sufficient supplies, transportation, or other essential commodity or service required in the conduct of its business, or any change in or the adoption of any law, regulation, judgment or decree (each a "Force Majeure Event"). Each party shall have the right to terminate this Agreement immediately upon written notice if any Force Majeure Event of another party continues for more than ten (10) days. + +9.6 Miscellaneous. This Agreement and Exhibits A, B, and C constitute the final agreement between the parties with regard to the subject matter herein, and supersedes and cancels all prior negotiations, understandings, correspondence and agreements, oral and written, express or implied, between the parties with regard to the subject matter herein. No waiver, amendment or modification of any provision of this Agreement will be effective unless it is in a document that expressly refers to this Agreement and is signed by both parties. Failure or delay by either party in exercising any rights or remedy under this Agreement will not operate as a waiver of any such right or remedy. The parties are independent contractors. Neither party will be deemed to be an employee, agent, partner or legal representative of the other for any purpose and neither will have any right, power or authority to create any obligation or responsibility on behalf of the other. This Agreement will be governed by the laws of the State of Florida without regard to conflicts of law provisions. + +Source: GLOBAL TECHNOLOGIES GROUP, INC., 10KSB, 9/28/2005 + + + + + + EXHIBIT B 1. TECHNICAL REQUIREMENTS. IMNTV will comply with the following technical requirements, as applicable: + +On Demand. Provider will provide all on-demand media files encoded in the Format appropriate for each stream type (e.g., audio, video, animation and other media file types as they become supported and as IMNTV may then elect to provide) to the Distributor via the File Transfer Protocol (FTP). + +2. LIVE/STREAMING PROGRAMMING (AS APPLICABLE) + +2.1 Preparing Content. IMNTV will provide Distributor with the URL for each live or simulated live stream remotely encoded by IMNTV using the conventions established by both parties. + +2.2 Feed Delivery. At IMNTV's election, IMNTV will deliver live feeds to the Distributor via methods other than FTP over the Internet, including delivery of physical media. + +(a) General. IMNTV shall take the appropriate measures to ensure that all live or simulated live feeds will be delivered continuously to the Distributor 24 hours/day, 7 days/week, except for scheduled maintenance. If any feed is provided to Distributor using transmission methods that are proprietary or uncommon, Provider agrees to provide -at no cost -- the receiver equipment to Distributor and to allow adequate time for setup and testing of equipment prior to delivery of live content. + +(b) Encoding. IMNTV will encode feeds to be delivered to Distributor. + +Source: GLOBAL TECHNOLOGIES GROUP, INC., 10KSB, 9/28/2005 + + + + + + EXHIBIT C + +Programming Technical Specifications + +1. REPRESENTATION OF PROGRAMMING + +1.1 Programming Presentation. The following are requirements for all Programming: + +(a) Each individual item of Programming will be identified with a Programming identification code ("Programming ID") + +(b) Clicking on any Programming will instigate an "Optimized" presentation as follows: + +(i) When a Subscriber selects the Programming, the default start-up audio/video sequence for the presentation will start playing in the playback window of the Mobile Platform Software ("Playback Window"). + +2. POLICIES FOR ADVERTISING AND PROMOTION WITHIN SOFTWARE + +2.1 The Programming will have a IMNTV Identification ("IMNTV ID"), which is similar to on-air network id, which is played each time the Programming is launched. Distributor may utilize the IMNTV ID in the Distributor's Portal for promotional purposes. + +(a) The IMNTV ID will be no longer than two (2) to five (5) seconds in length, and may be audio and Real Flash visual media clip. + +(b) All IMNTV Ids will be hosted and served by Distributor. + +(c) If Programming is currently playing, the IMNTV Id cannot interrupt the stream + +(d) If any advertisement other than a streaming advertisement is scheduled, the IMNTV ID must precede it. + +3. PROGRAMMING DESIGN GUIDELINES + +3.1 The initial opening of IMNTV ID should be authored to the following standards: + +(a) For a 120 W x 96H video space (without scroll bars) subject to review with Distributor to determine suitability for Distributor's territory. + +3.2 Design Restrictions. The following requirements serve to ensure a consistent Subscriber experience across all Programming. + +(a) Distributor will provide IMNTV with page size and load time goals for the Programming. + +(b) Bullet points describing the Programming + +(c) Descriptions of the Programming that correspond with each bullet point and elaborate more on the bullet point + +(d) Link to the Provider's Privacy Policy + +(e) Link to the Provider's Terms of Use + +(f) Information for Customer Service and/or Technical Support to use while servicing Subscribers + +Source: GLOBAL TECHNOLOGIES GROUP, INC., 10KSB, 9/28/2005 + + + + + + EXHIBIT D + +Distribution of the Provider's Content through China Unicom Tianjin Branch + + 1. Service Offering a. MobileVision is an authorized and fully licensed Service Provider (SP) partner who provides the programming and supports the underlyingtechnical operation of the streaming service for China Unicom Tianjin. b. MobileVision will be making available the music video content from IMNTV on its WAP Portal pages and in links contained in its WAPpush messages through China Unicom Tianjin's networks. 2. Terms of Service a. The China Unicom Tianjin streaming media service is offered as a pilot commercial program without charge for the period of two to threemonths. IMNTV agrees to participate in this pilot program by providing the content to China Unicom Tianjin via MobileVision without charge during this period. b. Starting on October 1, 2005, China Unicom Tianjin intends to charge for the streaming service. The revenue sharing and payment termsbetween IMNTV and MobileVision takes effect starting on the same date of commercial service. 3. Pricing of Service a. TBD subject to Carrier's pricing policy and IMNTV acceptance of terms + +Source: GLOBAL TECHNOLOGIES GROUP, INC., 10KSB, 9/28/2005 \ No newline at end of file diff --git a/full_contract_txt/GluMobileInc_20070319_S-1A_EX-10.09_436630_EX-10.09_Content License Agreement1.txt b/full_contract_txt/GluMobileInc_20070319_S-1A_EX-10.09_436630_EX-10.09_Content License Agreement1.txt new file mode 100644 index 0000000000000000000000000000000000000000..0b5aa6993fe22a461c1b9df7ccab03e794574256 --- /dev/null +++ b/full_contract_txt/GluMobileInc_20070319_S-1A_EX-10.09_436630_EX-10.09_Content License Agreement1.txt @@ -0,0 +1,1325 @@ +Exhibit 10.09 + +***** CONFIDENTIAL TREATMENT REQUESTED + +Agreement Number 12965 + +WIRELESS CONTENT LICENSE AGREEMENT + +This License Agreement (this "Agreement") is entered into effective as of December 16, 2004, (the "Effective Date") by and between TWENTIETH CENTURY FOX LICENSING & MERCHANDISING, a division of Fox Entertainment Group, Inc. ("Fox"), as Administrator for Twentieth Century Fox Film Corporation ("Trademark Licensor"), and Sorrent, Inc. ("Licensee"). Fox and Licensee are collectively referred to as the "parties" and each individually as a "party." + +RECITALS: + +WHEREAS, Trademark Licensor owns the rights to develop, manufacture, publish, and distribute entertainment applications based on the story, plot, theme, distinctive creative elements and name/logo (collectively, the "PSM") appearing in the theatrical motion pictures set forth on Exhibit A attached hereto (individually, the "Property" and collectively, the "Properties," and further designated as "Major Release(s)" and "Targeted Release(s)"); and + +WHEREAS, Fox is the administrator of such rights for Trademark Licensor; and + +WHEREAS, Licensee is engaged in the business of, among other things, developing and producing interactive entertainment applications for wireless communication devices, such as mobile telephones; and + +WHEREAS, Licensee desires to obtain a license from Fox to develop a variety of wireless products utilizing elements of the PSM and to be operated on mobile/cellular telephones; and further to publish, license, promote, distribute and sell such wireless products to end users through communications service provider(s) and portals providing wireless products ("CSP(s)") on the terms and conditions set forth herein; and + +WHEREAS, Fox and Vodafone Group Services Limited ("VGSL") have entered into a wireless content distribution agreement ("VGSL Agreement") whereby Fox is to be the content provider for VGSL wireless products relating to various Properties, and Fox desires a license to distribute Wireless Products to VGSL pursuant to the VGSL Agreement. + +AGREEMENT + +NOW, THEREFORE, the parties do hereby agree as follows: + +1. GRANT OF RIGHTS: + +(a) Wireless Products and Wireless Platform: Fox grants to Licensee a limited, exclusive (except as otherwise may be provided in this Agreement), non-transferable (except as permitted in Paragraph 17(d)) right and license to use, make, have made (as set forth in Paragraph 1(a)(i) below), reproduce, modify, and create derivative works of + +Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ + + + +***** The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933. + +-1- + + + +Source: GLU MOBILE INC, S-1/A, 3/19/2007 + + + + + + + +the PSM in each Property, solely for the purpose of developing the wireless applications specifically set forth for each of the Properties on Exhibits B through M attached hereto ("Wireless Products"), some of which Wireless Products are defined in the Glossary attached hereto as Exhibit N. To the extent not specified in this Agreement the parties will agree upon the specific Wireless Products to be developed for each Property in accordance with the procedure set forth in Paragraph 2. Notwithstanding the foregoing, Licensee acknowledges that it shall be obligated to develop all Wireless Products set forth on Exhibits B, C, D, and G, and any other Wireless Products for other Properties that the parties mutually agree in writing will be added to the VGSL Agreement for distribution by VGSL (the "VGSL Products"). The Wireless Products shall utilize elements of the PSM and shall be operated on mobile or cellular telephones. Furthermore, Fox grants to Licensee a limited, exclusive (except as may otherwise be provided in this Agreement), non-transferable (except as permitted in Paragraph 17(d)) right and license to make, have made, reproduce, modify, create derivative works of, advertise, promote, distribute, sell and license the Wireless Products, including any PSM included therein, solely (i) for use on mobile or cellular telephones (the "Wireless Platform"); (ii) in the Territory (as defined in Paragraph 3), (iii) during the Term (as defined in Paragraph 4), (iv) for distribution by Licensee through the Distribution Channels (as defined in Paragraph 2(c)) granted herein; and (v) by means of periodic subscription fee, a per-download basis, or through a retail purchase. Nothing contained herein shall be construed as granting Licensee the right to develop and/or distribute video clips and/or trailers for the Properties, except where Fox expressly agrees to development and/or distribution of such video clips and/or trailers. + +(i) Sublicense: Licensee shall be permitted to sublicense the rights and licenses granted herein to third party contractors of Licensee, solely for purposes of development and distribution of the Wireless Products on behalf of Licensee in accordance with this Agreement; provided that such third party contractors have entered into binding written agreements with Licensee that are no less protective of Fox's intellectual property rights than are the terms and conditions of this Agreement, and provided further that Licensee will not subcontract development of any video games hereunder without Fox's prior written approval of the third party game development contractor. Notwithstanding the foregoing, Licensee shall remain the primary contact under this Agreement and shall remain liable for all obligations performed by a sublicensee. + +(ii) Substitution of Properties and Addition of Properties: Fox reserves the right to remove any Property listed on Exhibit A in the event that Fox determines not to theatrically release such Property or is found to be legally prohibited from engaging in the development and sale of Wireless Products in connection with such Property, and shall replace the removed Property with a like Property, which designation shall be subject to the mutual agreement of Fox and Licensee. Any further additions to Exhibit A shall also be subject to the mutual agreement of Fox and Licensee, provided however Fox shall reasonably determine if the Property constitutes a Major Release or a Targeted Release consistent with its past practices. In no event will the number of Major Releases and Targeted Releases included as Properties licensed to Licensee under this Agreement be less than four (4) and eight (8) respectively. + +Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ + +-2- + +Source: GLU MOBILE INC, S-1/A, 3/19/2007 + + + + + + + +(iii) Addition of Wireless Products: The parties may amend this Agreement to include additional Wireless Products for the Properties set forth on Exhibit A, subject to their mutual agreement in writing, provided that if they are unable to agree upon such additions within five (5) business days of a request from Fox, Fox will have the right to develop or have developed the requested Wireless Products for the relevant Property notwithstanding the exclusivity granted to Licensee in this Agreement. + +(b) Bundling: Neither party will solicit or enter into any agreement with any third party regarding the bundling of the Wireless Products with any other property (including a Fox property) or with any other products and services including preloading, OEM and soft bundling, except as mutually agreed between the parties. The parties will mutually agree upon the terms of each bundling transaction, the nature of the bundle, the timing, and any new or different royalties for such bundling on a case-by-case basis. + +(c) Third-Party Promotions: Neither party may solicit or enter into any agreement with any third party regarding third-party promotional opportunities with respect to the Wireless Products without the other party's prior written consent; provided that the foregoing will not limit Licensee's rights to market and promote the Wireless Products directly and through (i) CSPs, subject to any Fox approval rights set forth elsewhere in this Agreement, or (ii) Fox's right to engage in third party promotions for the Properties involving wireless content otherwise sourced or created. + +(d) Excluded Products: For the avoidance of any doubt, the rights granted in Paragraph 1(a) and (b) shall be specifically limited to the Wireless Products for the Wireless Platform and shall not extend to any other device, platform, operating system or distribution method, whether wired or wireless, pursuant to which interactive entertainment software may be delivered to or accessed by end-users, including, but not limited to, the following: (i) traditional entertainment software console platforms, such as Sony PlayStation and PlayStation 2, Microsoft Xbox, and Nintendo GameCube and successor platforms; (ii) desktop or laptop computer systems, such as PC Windows, Macintosh, (iii) hand-held electronic dedicated gaming devices (e.g., Nintendo's GameBoy Color and GameBoy Advance handheld devices, Sony's PSX handheld device, and Tiger Electronic hand- held devices); (iv) pay-per-play arcade systems and other forms of location-based entertainment; (v) interactive toys; (vi) television, whether via cable, satellite, set-top boxes or other on-demand service; (vii) massively multiplayer games; (viii) internet gaming and (ix) any other technology now known or hereafter devised. Except as otherwise specifically stated herein with respect to the Wireless Products, Licensee shall have no right to develop, manufacture, reproduce, distribute, sell or exploit any other products based on the PSM or the Property. + +(e) Fox's Reservation of Rights: Fox expressly reserves and retains any and all rights that are expressly excluded from or not specifically granted to Licensee pursuant to this Agreement, including but not limited to the following: + +(i) Development/Exploitation/Distribution: the right to develop, publish, and/or distribute (or grant a third party the right to develop, publish, and/or distribute) other wireless products or wireless content of any nature which may be derived from the Properties (and further, to exploit same) which are similar or in direct + +Wireless Content License Agreement Multiple Properties /Sorrent, Inc. / Final PLZ + +-3- + +Source: GLU MOBILE INC, S-1/A, 3/19/2007 + + + + + + + +competition with the Wireless Products at any time in Japan including during the Term and within Japan, provided that Fox will not grant to any other party any such rights to develop, publish, and/or distribute Wireless Products for the Wireless Platform to end users outside of Japan (with the exception of those distribution rights for Wireless Products granted to VGSL under the VGSL Agreement in accordance with Paragraph 1(f) of this Agreement), or provide to any Licensee Competitor (as defined in Exhibit Q) any Licensee Materials or otherwise grant any rights to any Licensee Competitor to develop, publish, and/or distribute Wireless Products, or other wireless products or content based on the Properties. Fox has not granted and will not grant any exclusive distribution rights with respect to the Wireless Products to VGSL or any other party; and + +(ii) Use of Fox's Logo or Other Intellectual Property Rights: the right to use the Fox logo or trademark, or any other trademark(s), logo(s) or copyrights owned by Fox other than those specifically set forth herein in the manner set forth; and + +(iii) Video Clips and Trailers: except as may otherwise be provided in this Agreement, the right to develop and/or distribute (or grant a third party the right to develop and distribute) video clips and/or trailers for the Properties. At any time during the Term, Fox may distribute directly (or grant a third party the right to distribute) video clips and/or trailers to CSPs in connection with the Properties; and + +(iv) SMS/Text Messaging: the right to develop, market and distribute (or grant a third party the right to develop, market and distribute) SMS or text messaging in connection with the Properties; and + +(v) Promotional Content: the right to develop and/or distribute (or grant a third party the right to develop and/or distribute) free promotional and/or give-away content in connection with the Properties, provided that Fox will use all reasonable efforts to make mention of the Wireless Products developed by Licensee, or cause the third party to do the same, in the context of the promotion and/or give-away. + +(f) Licensee's Grant of Rights. Subject to Fox's compliance with the terms and conditions of this Agreement, including its payment obligations in accordance with Section 7, Licensee hereby grants to Fox a limited, non-exclusive, non-transferable (except as permitted in Section 17(d)), right to distribute Licensee Materials (as defined in Paragraph 11 (c)) to VGSL and T-Mobile, solely as incorporated into Wireless Products, and to authorize VGSL and T-Mobile to distribute such Wireless Products to end users outside of the United States. Fox's rights in the Licensee Materials will be limited to those expressly granted in this Paragraph 1(f). Licensee reserves all rights and licenses in and to the Licensee Materials not expressly granted to Fox in this Section 1(f). Any other marketing, distribution, or sale of the Wireless Products and/or Licensee Materials by Fox will be subject to Licensee's prior written consent, in Licensee's reasonable discretion. + +2. DEVELOPMENT AND DISTRIBUTION OF THE WIRELESS PRODUCTS: + +(a) Development: Subject to Fox's delivery of the PSM Materials (as defined in Paragraph 2(a)(i) below), Licensee shall be obligated to create, develop, and publish the Wireless Products, pursuant to the terms and conditions of this Agreement. Subject to + +Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ + +-4- + +Source: GLU MOBILE INC, S-1/A, 3/19/2007 + + + + + + + +Fox's approval rights, Licensee shall assume full responsibility for the creation, development and production of the Wireless Products, which shall include, without limitation, (A) designing the creative and technical specifications for the Wireless Products, (B) creating all computer code for the Wireless Products, (C) creating all visual assets for the Wireless Products, (D) acquiring and/or licensing any and all other technology, software and hardware needed for purposes of creating and distributing the Wireless Products, (E) ensuring compatibility of technology with the CSPs to which Licensee grants distribution rights, which shall include without limitation VGSL and T-Mobile, (the "Licensed CSPs"), and (F) conducting quality assurance testing of the Wireless Products. For the avoidance of doubt, Licensee acknowledges and agrees that Fox will have no development obligations whatsoever with respect to the Wireless Products, and further that Fox's sole role with respect to such development will be limited to delivering the PSM Materials, supervising Licensee's obligations with respect to same, granting or denying approvals as set forth hereunder, providing photos, style guides and other materials to Licensee where necessary, and collaborating with Licensee on the creative direction with respect to the Wireless Products. + +(i) Delivery of PSM Materials. For each of the Properties identified in or added by mutual agreement to Exhibit A, Fox will provide to Licensee no later than ***** prior to the release of any games to be developed in connection with each Property and no later than ***** prior to the release of any other wireless applications to be developed in connection with each Property, some or all of the following items, to the extent available, on a Property-by-Property basis and only in electronic format where available: style guides, one-sheets (art used for movie poster), digital images, audio clips, storyboards, video tapes of trailers as they are produced, hard-copy scripts, publicity photos, and non-trailer video which shall only be available for viewing on the Fox lot premises (collectively, the "PSM Materials"). For the avoidance of doubt, Licensee will not be provided electronic copies of any scripts. Fox will update the PSM Materials provided to Licensee as new or different materials become available. + +(ii) VGSL Development: Licensee expressly acknowledges and agrees that Fox has entered into the VGSL Agreement with VGSL for the development of certain Wireless Products set forth on Exhibits B, C, D and G, in connection with the following Properties: "Robots;" Untitled Ridley Scott Film; "Ice Age 2;" and "Mr & Mrs. Smith." Licensee shall be obligated to develop such Wireless Products, and distribute them as set forth in Paragraph 2(c)(ii) below, on behalf of Fox. + +(iii) Development for Japan: Upon Fox's notice to Licensee, Licensee shall immediately cease all development, publication and distribution of the Wireless Products in Japan. + +(iv) Music and Sound Effects: If Licensee seeks to use music or sound effects from any of the Properties in connection with the development of the Wireless Products, such use shall be subject to the advance written approval of Fox, and, if applicable, Fox Music, Inc., c/o the Vice President, General Manager, Fox Music Publishing ("Fox Music"). Subject to Fox and Fox Music's approval, Licensee shall be solely responsible for any and all third party payments that may arise out of the + +Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ + + + +***** The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933. + +-5- + +Source: GLU MOBILE INC, S-1/A, 3/19/2007 + + + + + + + +approved use of the music from the Property in connection with the Wireless Products, including without limitation any royalties, mechanical fees, residuals, publishing fees, license fees, reuse fees or other guild-related payments. In such event, Licensee shall pay directly to Fox Music a separate Royalty, at a rate subject to good faith negotiation between Licensee and Fox Music, on sales of the Wireless Products incorporating such music. Further, Licensee shall obtain the prior written approval of Fox Music concerning the final music arrangement to be so utilized and provide Fox Music with two samples of the final, approved Wireless Products prior to the sale or distribution thereof. + +(A) No License for Music Realtones or Trutones: For the avoidance of doubt, nothing herein shall be construed as granting Licensee the right to develop and/or distribute any Wireless Products containing music Realtones or Trutones (each as defined in Exhibit N). + +(b) Release: + +(i) The Wireless Products: Subject to the timely delivery of the PSM Materials to Licensee by Fox, Licensee shall deliver the Wireless Products to VGSL a minimum of ***** before the initial theatrical release of each Property in each of the VGSL Territories as defined in Paragraph 2(c)(ii) (A) below, and to the other Licensed CSPs within such time frames mandated by such Licensed CSPs so as to enable the release of the Wireless Products ***** prior to the initial theatrical release of each Property in each of the Territories as defined in Paragraph 3 below (the "Wireless Products Latest Commencement Date"). If Licensee fails to make the Wireless Products commercially available to the CSPs by the Wireless Products Latest Commencement Date, and such failure is not due solely to any delay by Fox in delivery of the PSM Materials, Fox shall have the right to terminate this Agreement immediately upon notice to Licensee and all rights to utilize the PSM shall automatically revert to Fox; provided that, subject to Paragraph 9(b)(ii) below, Fox will not exercise the right to terminate with respect to any delayed delivery of Wireless Products for films that have their initial theatrical release prior to June 30, 2005; and provided further that nothing in this Paragraph 2(b)(i) will limit Fox's indemnification under Paragraph 14 or any other rights and remedies Fox may have under this Agreement. Licensee shall use all commercially reasonable efforts to cause the Licensed CSPs to make available to end users the Wireless Products for each of the Major Releases and Targeted Releases no later than ***** prior to the initial theatrical release of each of the Major Releases and Targeted Releases. + +(c) Distribution: + +(i) CSP Distribution: Licensee shall distribute the Wireless Products to end users through the Licensed CSPs and each Licensed CSP's respective Internet portals and distribution systems ("Distribution Channel"). + +(A) Minimum Subscriber Market Penetration: Licensee shall use all commercially reasonable efforts to secure distribution of the Wireless Products through CSPs and to ensure that the Wireless Products are + +Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ + + + +***** The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933. + +-6- + +Source: GLU MOBILE INC, S-1/A, 3/19/2007 + + + + + + + +available on substantially all medium and high volume handsets of all Licensed CSPs, which for the purposes of this obligation shall include VGSL. + +(1) Major Releases: Licensee furthermore shall use all commercially reasonable efforts to achieve the following market penetration targets in Europe for the Major Releases ("Market Penetration Targets"): (1) distribution of the Wireless Products for the Major Releases through CSP's that hold at least ***** (*****%) of the subscribers in Western Europe during the ***** of this Agreement; and (2) distribution of the Wireless Products for the Major Releases through CSP's that hold at least ***** percent (*****%) of the subscribers in Western Europe during the ***** of this Agreement. If Licensee fails to reach the Market Penetration Targets Fox shall in its sole discretion have the right to terminate Licensee's exclusivity under this Agreement. In the event of termination of Licensee's exclusivity for Licensee's failure to achieve the Market Penetration Targets, Fox shall not distribute the Wireless Products which have been developed by Licensee prior to such termination, without first obtaining a license from Licensee on terms to be mutually agreed in each party's reasonable discretion, for the exploitation of the Licensee Materials. + +(2) Targeted Releases: Fox acknowledges that Licensee may not be able to secure placement of all Targeted Releases at the levels set forth for the Market Penetration Targets defined in the previous sub-Paragraph. Notwithstanding the foregoing, Licensee shall use all commercially reasonable efforts to secure the widest possible distribution of the Wireless Products derived from the Targeted Releases in Europe. + +(ii) VGSL and T-Mobile Distribution: For the Territories (as defined in Paragraph 3 below) set forth in Paragraph 2(c)(ii)(A) below, Licensee expressly acknowledges and agrees that Fox has entered into the VGSL Agreement with VGSL for the development of certain Wireless Products as set forth in Paragraph 2(a)(ii) above, and for the distribution of such Wireless Products. Fox has also entered into a separate agreement with T-Mobile to permit T-Mobile to distribute certain Wireless Products to end users outside of the United States the "T-Mobile Agreement"). Licensee hereby grants all licenses to Fox to enable Fox to provide Wireless Products to VGSL and T-Mobile for distribution to VGSL and T-Mobile subscribers outside of the United States in accordance with the terms of this Agreement, and shall further deliver such Wireless Products to VGSL and T-Mobile on behalf of Fox. Licensee further acknowledges and agrees that pursuant to the VGSL Agreement and the T-Mobile Agreement, VGSL and T-Mobile will remit directly to Fox all receipts generated from sales of the Wireless Products to VGSL and T-Mobile subscribers. Fox will pass through all such receipts received from VGSL and T-Mobile to Licensee and such receipts shall be treated as Gross Receipts, as defined in Paragraph 7(a)(ii) below, for the purpose of this Agreement. Licensee shall not enter into an exclusive distribution agreement with + +Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ + + + +***** The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933. + +-7- + +Source: GLU MOBILE INC, S-1/A, 3/19/2007 + + + + + + + +a CSP in any of the VGSL Territories listed in Paragraph 2(c)(ii)(A) below, and Fox has not granted and will not grant any exclusive distribution rights to VGSL or T-Mobile. Fox and Licensee will cooperate together in good faith, on a schedule to be mutually agreed, to jointly manage the VGSL and T-Mobile relationships with respect to the Wireless Products, subject to willingness on the parts of VGSL and T-Mobile to so cooperate. Notwithstanding the foregoing, any conversations undertaken between Fox and VGSL and/or T-Mobile without Licensee's participation shall not be a breach of this provision. + +(A) Non-Exclusive CSP Distribution in VGSL Territories: Under no circumstances shall Licensee enter into an exclusive distribution agreement with a CSP other than VGSL in the following territories ("VGSL Territories") covered under the VGSL Agreement: (1) United Kingdom; (2) Ireland; (3) Germany; (4) Spain; (5) France; (6) Sweden; (7) Switzerland; (8) Portugal; (9) Netherlands; (10) Greece; (11) Italy; (12) Australia; (13) New Zealand; (14) Egypt; (15) Slovenia; (16) Belgium; (17) Austria; (18) Hungary; (19) Malta; (20) Croatia; (21) South Africa; and (22) Japan. + +(iii) Japan Distribution: Upon Fox's notice to Licensee, Licensee shall cease immediately some or all distribution of the Wireless Products in Japan. In the event Fox provides such termination notice to Licensee, Licensee hereby grants Fox a license to the Licensee Materials in order for Fox to distribute the Wireless Products that Licensee has developed for distribution in Japan prior to such termination, either directly or through a third-party. In consideration of such license, Fox shall pay Licensee a royalty as set forth in Paragraph 7(b)(i) below. + +(iv) Unless otherwise mutually agreed between Fox and Licensee, Licensee will require each Licensed CSP to distribute Wireless Products to end users only for the payment of a fee; provided that Licensee may permit limited distribution (i.e. one Wireless Product per Property in each category of Wireless Products and including only one game level for each game) of Wireless Products without a fee for promotional or marketing purposes. The fees will typically appear on the end user's Wireless Platform bill and be remitted by the end user to the CSP pursuant to an agreement between the end user and the CSP. The CSP will in turn remit fees to Licensee (less any Deductions as that term is defined in Paragraph 7(a)(ii) below) pursuant to an agreement between Licensee and the CSP. Licensee will then remit royalties to Fox in accordance with Paragraph 7, below. + +3. TERRITORY: Licensee shall use commercially reasonable efforts to exploit the rights granted hereunder throughout the world (the "Territory"), including without limitation all of the following VGSL Territories set forth in Paragraph 2(c)(i)(B) above: (1) United Kingdom; (2) Ireland; (3) Germany; (4) Spain; (5) France; (6) Sweden; (7) Switzerland; (8) Portugal; (9) Netherlands; (10) Greece; (11) Italy; (12) Australia; (13) New Zealand; (14) Egypt; (15) Slovenia; (16) Belgium; (17) Austria; (18) Hungary; (19) Malta; (20) Croatia; (21) South Africa; and (22) Japan. Licensee shall localize the Wireless Products into the following languages: English, French, German, Italian, Spanish, and Japanese. In addition to the previously stated languages, to the extent practicable Licensee also shall localize the Wireless Products to be delivered to VGSL into Portuguese, Greek, Dutch and Swedish, to the extent that the Properties + +Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ + +-8- + +Source: GLU MOBILE INC, S-1/A, 3/19/2007 + + + + + + + +are dubbed into such languages, Fox holds foreign rights to the dubbed tracks, and such dubbed tracks are timely available. + +4. TERM: The rights granted hereunder shall be effective as of the Effective Date and shall expire on December 31, 2006 (the "Term"); provided, however, that with respect to each Property, all rights and licenses granted herein will continue in full force and effect for a period of eighteen (18) months after the initial theatrical release of that Property. + +(a) Licensee's Right of First Negotiation on New Properties: For the Term of this Agreement, Fox hereby grants to Licensee a right of first negotiation with respect to those theatrical motion pictures released during the Term of this Agreement (in addition to the Properties identified in Exhibit A) in which (i) Fox owns or controls licensing and merchandising rights, for which Fox determines in its sole discretion to grant to any third party any licensing rights for the development and distribution of wireless products, and (ii) which theatrical motion pictures Fox reasonably deems to be a Major Release consistent with its past practices. The Right of First Negotiation shall be exercised as follows. Whenever Fox desires to grant to any third party any licensing rights for a Major Release (each such instance, an "Opportunity"), Fox shall request that Licensee submit a bid regarding the Opportunity. If Licensee intends to exercise its Right of First Negotiation, it must submit a bid in response to Fox's request within 10 business days. If Licensee does submit a bid, both parties shall negotiate in good faith over the bid for a reasonable period of time, not to exceed 10 additional business days. If the parties have not reached agreement in writing regarding the terms and conditions for the exploitation of the Opportunity within said time period, or if Licensee fails to submit a bid in a timely manner, Fox shall be free to accept any bid from any other party with respect to the Opportunity, or Fox shall be free not to exploit the Opportunity at all. Should Licensee choose to exercise its Right of First Negotiation, its floor bid shall be at least US$***** for each Major Release (as defined in Exhibit N). + +5. ADVANCE: Licensee shall pay Fox a non-refundable recoupable advance in the amount of US$***** upon Licensee's signature of this Agreement (the "Advance"). The Advance shall be treated as the first installment of the Guarantee described in Section 6(a), and will be recoupable against royalties as part of the Guarantee. + +6. GUARANTEE: + +(a) Amount: Licensee shall pay to Fox a non-refundable guarantee in the amount of US$***** ("Guarantee"), inclusive of the Advance. The Guarantee shall be recoupable against royalty payments and payable as follows: (a) US$***** inclusive of the Advance above; (b) US$***** on or before *****; (c) US$***** on or before *****; (d) US$***** on or before *****; (e) US$***** on or before *****; (f) US$***** on or before *****; and (g) US$***** on or before *****. There shall be no cross-collateralization among the Royalties earned, as defined in Paragraph 7 below, for the purposes of recouping the Guarantee for any of the Major Releases or Targeted Releases. + +(b) Individual Property Guarantees: Notwithstanding the payment schedule set forth in Paragraph 6(a) above, a minimum recoupable guarantee (each "Individual Property + +Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ + + + +***** The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933. + +-9- + +Source: GLU MOBILE INC, S-1/A, 3/19/2007 + + + + + + + +Guarantee") shall be apportioned from the Guarantee set forth in Paragraph 6(a) above to each of the individual Major Releases and Targeted Releases set forth on Exhibit A as follows for the purposes of determining recoupment of Guarantees and Royalty payments attributable to each of the Major Releases and Targeted Releases as set forth in Paragraph 7 below: + +(i) Major Releases: The Individual Property Guarantee for each of the Major Releases set forth on Exhibit A shall be US$*****. + +(ii) Targeted Releases: The Individual Property Guarantee for each of the Targeted Releases set forth on Exhibit A shall be US$*****. + +(c) Overages: At such time that Fox has earned in Royalties, as defined in Paragraph 7 below, the amount of an Individual Property Guarantee attributable to a specific Property, Licensee shall then remit to Fox on a quarterly basis in accordance with Paragraph 7(c) all Royalties due and payable in excess of such Individual Property Guarantee. Notwithstanding the foregoing, all Guarantee installments shall remain due and payable in accordance with the schedule of payments set forth in Paragraph 6(a) above and may not be allocated or apportioned to Royalty overages due. + +7. ROYALTIES: + +(a) Payments from Licensee to Fox: In consideration of the rights granted to Licensee pursuant to this Agreement, Licensee shall pay to Fox, or such other party as Fox may designate in writing, a royalty in the following amounts: + +(i) Major Releases: + +(A) Until such time as ***** percent (*****%) of an Individual Property Guarantee for a Major Release is recouped by Licensee, Fox shall earn, and credit against the Individual Property Guarantees, Royalties at the rate of ***** percent (*****%) of Licensee's Gross Receipts from Licensee's sale, license, distribution or other exploitation of the Wireless Products derived from the respective Major Release; and + +(B) Thereafter and until such time as ***** percent (*****%) of an Individual Property Guarantee for a Major Release is recouped by Licensee, Fox shall earn and Licensee shall pay to Fox Royalties at the rate of ***** percent (*****%) of Licensee's Gross Receipts from Licensee's sale, license, distribution or other exploitation of the Wireless Products derived from the respective Major Release; and + +(C) Thereafter (and for the remainder of the Term), Fox shall earn and Licensee shall pay to Fox Royalties at the rate of ***** percent (*****%) of Licensee's Gross Receipts from Licensee's sale, license, distribution or other exploitation of the Wireless Products derived from the respective Major Release. + +Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ + + + +***** The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933. + +-10- + +Source: GLU MOBILE INC, S-1/A, 3/19/2007 + + + + + + + +(ii) Targeted Releases: + +(A) Until such time as ***** percent (*****%) of an Individual Property Guarantee for a Targeted Release is recouped by Licensee, Fox shall earn, and credit against the Individual Property Guarantees, Royalties at the rate of ***** percent (*****%) of Licensee's Gross Receipts from Licensee's sale, license, distribution or other exploitation of the Wireless Products derived from the respective Targeted Release; and + +(B) Thereafter (and for the remainder of the Term), Fox shall earn and Licensee shall pay to Fox Royalties at the rate of ***** percent (*****%) of Licensee's gross receipts from Licensee's sale, license, distribution or other exploitation of the Wireless Products derived from the respective Targeted Release. + +Royalties shall accrue when the Wireless Products are sold, downloaded or otherwise distributed to the end user, whichever first occurs, and shall become payable upon receipt by Licensee. "Gross Receipts" shall mean all monies received by or credited to Licensee for download of the Wireless Products by end users less only monies actually retained by the CSPs (the "Deductions"). + +(b) Payments from Fox to Licensee: In consideration of the rights granted by Licensee to Fox and VGSL pursuant to this Agreement, Fox shall pay to Licensee, or such other party as Licensee may designate in writing, a royalty in the following amounts: + +(i) Distribution in Japan. In the event that Fox distributes, licenses, or otherwise exploits the Wireless Products in Japan pursuant to Paragraph 2(c)(iii), or grants to any third party any rights to distribute the Wireless Products for the Wireless Platform to end users within Japan, or otherwise uses in Japan any elements of the Fox Intellectual Property (as defined in Paragraph 11(a) that are solely attributable to Licensee's development efforts pursuant to this Agreement, Fox agrees to pay Licensee a royalty in the amount of ***** percent (*****%) of Fox's gross receipts for any such activity, which shall be defined as all monies actually received by Fox for the Wireless Products or other such elements of the PSM, less any Deductions. + +(ii) VGSL Payments: As set forth in Paragraph 2(c)(ii) above, pursuant to the VGSL Agreement, VGSL will remit directly to Fox Fox's contractual share (pursuant to the VGSL Agreement) of all revenue from sales of the Wireless Products by VGSL in the VGSL Territories ("VGSL Revenue"). Fox will remit all VGSL Revenue to Licensee and such VGSL Revenue shall be treated as Gross Receipts for the purpose of this Agreement. The VGSL Revenue shall be treated in accordance with Paragraph 7(a) in calculating Royalties due to Fox from Licensee. + +(iii) Other Payments: To the extent that Fox enters into an agreement with a CSP other than VGSL with Licensee's consent in accordance with Paragraph 1(f), + +Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ + + + +***** The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933. + +-11- + +Source: GLU MOBILE INC, S-1/A, 3/19/2007 + + + + + + + +whereby Fox's contractual share of revenue from the sale of the Wireless Products to the CSP's subscribers is remitted directly to Fox from the CSP, Fox will pass through all such revenue from the CSP to Licensee and such revenue shall be treated as Gross Receipts for the purpose of this Agreement. Payments of all royalties from the sale of Wireless Products through any such arrangements shall be made by Licensee to Fox in accordance with Paragraph 7(b) above. Except as otherwise provided under this Agreement, Fox hereby agrees not to enter into any future agreements with a CSP for the distribution of the Wireless Products without the involvement and prior written agreement of Licensee. + +(iv) For the avoidance of doubt, Fox will have no right or license to develop, publish, and or distribute any Wireless Products for the Wireless Platform, or to permit any third party to do so, or to otherwise use or exploit any Licensee Materials, except in accordance with Paragraphs 1(b) (with respect to bundling), 2(c)(iii) (with respect to Japan), and 2(c)(ii) (with respect to VGSL and T-Mobile). + +(c) Payment Terms. Payment of all royalties and other payments by either party to the other shall be made in United States Dollars by check or wire transfer to a bank account to be designated by the receiving party. Payment of all royalties shall be made without deduction, reduction or set-off of any kind, provided that the paying party shall be permitted to deduct withholding taxes as permitted by applicable law. Each party agrees that it shall not be entitled to withhold any portion of the royalties as a reserve. Each party agrees to provide the other with all necessary withholding tax forms. + +(d) Accounting Statement: Royalty statements (which statements shall be on the form attached hereto as Exhibit O and incorporated herein by this reference or such other form as the receiving party may designate in its discretion) shall be due and payments made within thirty (30) days after the close of each calendar quarter in which the paying party received any applicable revenue. Each party shall keep a record of all sales and shall submit, together with the royalty statements, a quarterly summary report of such sales. Notwithstanding the foregoing, pursuant to Paragraphs 7(b) (2) and 7(b)(3), Fox shall make all payments of revenue remitted directly by VGSL or any other CSP with whom the parties prospectively agree Fox will receive revenue directly, within thirty (30) days of receipt of such revenue. + +(e) Books and Records: Each party shall keep accurate and complete books and records as they relate hereto for the greater of three years from the Effective Date or two years from the termination or expiration of the Term. On reasonable notice, each party shall have the right to examine said books and records; provided that such examination will be made no more than twice in any given twelve month period, and shall be made during normal business hours. If any audit discloses that a party owes royalties in excess of 5% of royalties paid during any accounting period, the audited party shall pay the audit costs together with shortfall and interest at rates as specified in Paragraph 7(e) below. + +(f) Late Payments: If a party does not receive the applicable royalty payment as specified on or before the thirtieth day after the close of any calendar quarter, the party owing such royalty shall pay interest with respect to any royalties owed from day to day until the date of payment at a rate of 5% above U.S. Prime Rate on an annual basis. Interest on royalties owed calculated in accordance with this Paragraph shall accrue after + +Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ + +-12- + +Source: GLU MOBILE INC, S-1/A, 3/19/2007 + + + + + + + +as well as before any judgment. Neither the acceptance of any payment or royalty statement nor the deposit of any check shall preclude a party from questioning the correctness of any such payment or royalty statement at any time. + +8. DUTIES OF LICENSEE: + +(a) Marketing and Promotion: Licensee shall be responsible for all marketing, advertising and promotional efforts with respect to the Wireless Products throughout the Territory during the Term. Licensee shall (A) participate in face to face meetings and conference calls regarding marketing from time to time, the frequency, location and subject matter of which shall be mutually agreed; (B) submit a separate marketing plan for the Wireless Products for each Property for which Fox has approved a Treatment (as defined in Paragraph 9(a)(ii)) within thirty (30) days of Fox's approval of such Treatment, subject to Fox's providing sufficient information regarding its release plans for the applicable Property (each, a "Marketing Plan"); (C) commit funds to the marketing of the Wireless Products as is commensurate with Licensee's marketing efforts of other similar wireless products that Licensee publishes; (D) perform business to business and trade marketing efforts (e.g., to the CSPs) commensurate with industry standards; and (E) appoint a marketing point of contact which shall be responsible for coordinating communications and facilitating relationships between Fox and Licensee and for overseeing the performance of Licensee's obligations hereunder. + +All marketing materials for the Wireless Products that incorporate and/or make reference to any part of the PSM or the Properties (collectively, the "Licensee Marketing Materials") shall be subject to Fox's approval as follows: + +(i) Licensee Marketing Materials: Licensee shall be responsible for producing the Licensee Marketing Materials, all of which shall be subject to Fox's prior written approval, at Licensee's sole cost and expense. Licensee will submit samples of all Licensee Marketing Materials to Fox for review and approval prior to Licensee's use of the Licensee Marketing Materials. Fox shall endeavor to review the Licensee Marketing Materials within two (2) weeks of receipt thereof, provided however, a delayed Fox response shall not constitute a deemed approval under any circumstances. Only after Fox has approved the Licensee Marketing Materials may Licensee proceed with production thereof. Once approval has been granted by Fox, Licensee will not make alterations, modifications or revisions to the Licensee Marketing Materials without the prior written consent of Fox. + +(ii) CSP Marketing Materials: If any Licensed CSP seeks to incorporate any element of the PSM in its advertising, marketing, packaging (if any), consumer and trade publicity and promotional materials as well as any collateral materials related thereto ("CSP Marketing Materials"), Licensee shall ensure that such Licensed CSP obtains Fox's approval in accordance with Paragraph 8(a)(i). Licensee shall submit any such proposed CSP Marketing Materials on the CSP's behalf. Once Fox has approved any such CSP Marketing Materials and notified Licensee, Licensee shall notify the CSP and Licensee and the CSP may proceed with production thereof, provided there are no alterations from the approved packaging. + +Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ + +-13- + +Source: GLU MOBILE INC, S-1/A, 3/19/2007 + + + + + + + +(b) Product Support: Licensee shall provide all customer product support, including technical support, for the Wireless Products in the same manner as it provides such support for any other product that it distributes and/or publishes, and in any case in accordance with wireless industry standards. Licensee will display (and ensure that the CSP displays) a toll free telephone number (or an email address, in Licensee's discretion, on a country by country basis) on its website so that customers may contact Licensee and/or the CSP regarding the Wireless Products ("Customer Request"). Licensee and/or the CSP will use all commercially reasonable efforts to respond to each such Customer Request within 24 hours after receipt of such request. Licensee shall exercise commercially reasonable efforts to resolve each such Customer Request. Licensee also shall respond to all inquiries from VGSL relating to the Wireless Products delivered to VGSL. + +(c) Solicitation of Sales: So long as the Agreement has not been terminated or otherwise expired, Licensee shall use all commercially reasonable efforts to promote sales of the Wireless Products during the Term of this Agreement. + +(d) No Preferential Treatment: Licensee agrees that it will use substantially similar efforts to advertise, promote, manufacture, sell and distribute the Wireless Products as it devotes to its other licensed products. + +(e) Compliance with all Laws: Licensee shall comply with all laws, rules, treaties, and regulations governing the distribution of the Wireless Products throughout the Territory. + +(f) Internet Data: Licensee shall comply with COPPA regulations as well as with Fox's Internet Privacy Policy with respect to the collection of any consumer information via the Internet. The policy is attached hereto as Exhibit P and incorporated herein by this reference. + +(g) Localization: Licensee shall localize the Wireless Products into the following languages: English, French, German, Italian, Spanish, and Japanese, with Portuguese, Greek, Dutch and Swedish to be made available where practicable to the extent that the Properties are dubbed into such languages, Fox holds foreign rights to the dubbed tracks, and such dubbed tracks are timely available. + +(h) Optimization: Licensee shall be required to optimize the Wireless Products for all Territories and Licensed CSPs. + +(i) Compatibility Testing: Licensee shall be responsible for any compatibility testing of the Wireless Products required by CSPs, and further shall be responsible for the following: (i) quality assurance of the Wireless Products which is consistent with industry standards; and (ii) adequate operation and functionality of the Wireless Products on the Wireless Platform in connection with each Licensed CSP's networks. To the extent that a material bug or defect is discovered in the Wireless Products which impacts in any manner the functionality of the Wireless Products, Licensee will promptly investigate and correct such bugs or defects, whether discovered by Licensee, Fox, the Wireless Platform manufacturer(s) or the CSP(s). As between Fox and Licensee, all costs of performing the foregoing obligations shall be borne by Licensee. + +Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ + +-14- + +Source: GLU MOBILE INC, S-1/A, 3/19/2007 + + + + + + + +9. FOX APPROVALS: + +(a) Wireless Products Approval: Fox shall have the right to approve the Wireless Products in accordance with the procedure set forth below. Licensee acknowledges that Fox's approval shall include the approval of any third party who has approval rights over any of the Properties, as applicable. + +(i) Creative Meetings: Licensee shall participate in face to face creative meetings with Fox on a monthly basis to determine which Wireless Products shall be developed for upcoming Major Releases and Targeted Releases. The parties will mutually agree upon the list of Wireless Products for each Property, and will amend the applicable Exhibit for that property upon reaching such agreement. Notwithstanding the foregoing, Licensee shall develop the Wireless Products set forth in Exhibits B through M for each Property. + +(ii) Concept / Treatment: For each of the Major Releases and Targeted Releases, within ***** after receipt from Fox of the applicable PSM Materials, Licensee will deliver to Fox a concept / treatment for the applicable Wireless Products, which will outline the technical and creative aspects of the Wireless Products (each, a "Treatment"). Each Treatment shall be subject to Fox's approval, which approval is within Fox's discretion. Once a Treatment is approved by Fox and to the extent the approved Treatment requires compatibility input from a Licensed CSP, it shall be Licensee's sole responsibility to secure concept approval from such Licensed CSP. If the Licensed CSP requires changes, modifications or alterations to a Treatment, or to any element of the Wireless Products, Licensee shall seek Fox's written approval of any such change, which approval may be withheld in Fox's sole discretion. + +(iii) Design Document: Once a given Treatment is approved by Fox, Licensee shall then submit to Fox a game design document ("Design Document") which will lay out the creative and technical aspects for the Wireless Product, including how Licensee intends to use the Property and the PSM in the Wireless Product. The Design Document shall be subject to Fox's written approval, which approval is within Fox's sole discretion. + +(iv) Alpha Testing: Upon approval of the Design Document by Fox, Licensee shall submit a prototype of the applicable Wireless Product, which demonstrates all of the features and functions set forth in the Design Document, although colors, graphics and related elements need not be in their final form (each, an "Alpha Prototype"). Each Alpha Prototype will be subject to Fox's written approval, which approval will be in Fox's sole discretion. + +(v) Beta Testing: Upon approval of the Alpha Prototype, Licensee shall submit a post-Alpha prototype of the Wireless Product meeting all Alpha requirements and in substantial conformance with the Design Document, with all features and functions implemented and in which all interface, memory allocation and code size issues are effectively addressed (each, a "Beta Prototype"). Each Beta Prototype will have passed Licensee's established testing procedures and have no known Bugs. Each Beta Prototype shall be subject to Fox's written approval, which + +Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ + + + +***** The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933. + +-15- + +Source: GLU MOBILE INC, S-1/A, 3/19/2007 + + + + + + + +approval will be in Fox's sole discretion. After Fox has approved a Beta Prototype, Licensee shall be free to release the Beta Prototype as a final commercial product. + +(A) Modifications: After approval of a Beta Prototype, Licensee shall not modify the Wireless Products without the prior written approval of Fox. For purposes of this paragraph, porting, enhancements, optimization (which alters the content displayed in any material manner) and localization shall be deemed a modification requiring Fox's prior written approval. Notwithstanding the foregoing, Porting that does not require substantive changes to a Wireless Product will not be deemed a modification requiring Fox's prior approval. + +(b) Approval Process: + +(i) Evaluation: Fox shall approve or reject in writing all Treatments, Design Documents, Alpha Prototypes, and Beta Prototypes submitted to it for its approval (each individually a "Deliverable"). Fox's approval or rejection of all Deliverables shall be rendered in good faith. + +(ii) Rejection: If Fox rejects any Deliverable, Fox shall provide to Licensee, in writing, the reasons for its rejection of that Deliverable. Licensee shall then use commercially reasonable efforts to make the changes to that Deliverable and resubmit the Deliverable to Fox for Fox's reconsideration. If Fox rejects a given Alpha Prototype more than twice based on a reason previously notified to Licensee by Fox, then Fox may terminate this Agreement in whole or with respect to the affected Property and Wireless Products and shall reserve all remedies available under this Agreement. Notwithstanding the foregoing, Fox will not terminate this Agreement for rejection of any Deliverables related to Properties that have their initial theatrical release prior to June 30, 2005, provided such Deliverables are accepted and delivered not later than ***** after the U.S. theatrical releases for each of the following Properties: "Robots"; "Mr. & Mrs. Smith"; and Untitled Ridley Scott Film. + +(iii) Collaborative Process: The parties intend that development of the Wireless Products will be a collaborative effort between Fox and Licensee, such that Fox shall have a reasonable opportunity to provide input into the primary aspects of each Wireless Product through the review and approval procedure described above, including, but not limited to, the look and feel of the Wireless Products, art direction, as well as the use of the Property (and all elements therefrom) in the Wireless Products and in the advertising, promotion and marketing thereof in accordance with this Agreement. Licensee understands and agrees that approval of any two-dimensional artwork does not constitute approval of the implementation of the artwork in the Wireless Products. + +(iv) Timing: Fox shall endeavor to approve or reject in writing all Deliverables and all materials submitted to it for its approval within two (2) weeks of Fox's receipt thereof. If Fox does not approve or reject in writing a Deliverable within two (2) weeks of its receipt and causes a significant delay in the development of the + +Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ + + + +***** The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933. + +-16- + +Source: GLU MOBILE INC, S-1/A, 3/19/2007 + + + + + + + +Wireless Products, then Fox and Licensee shall mutually and in good faith discuss and agree to any adjustments in the Wireless Products Latest Commencement Date which are necessary due to such delay. Fox shall not terminate this Agreement for Licensee's delay in delivery of the Wireless Products, where such delay is solely caused by Fox's failure to deliver the PSM Materials in a timely manner in accordance with Paragraph 2(a)(i). Fox reserves the right to terminate this Agreement in accordance with paragraph 2(b)(i) where Licensee's delay in delivery of the Wireless Products is the result of Fox's disapproval of the Deliverables. + +10. PRICING: As between Fox and Licensee, Licensee will be responsible for determining the prices and/or fees at which the Wireless Products will be offered for sale to the general public but will do so in accordance with Licensee's agreements with the CSPs. Licensee acknowledges that VGSL will be responsible for making pricing decisions for the Wireless Products distributed through VGSL, provided that Fox will not agree to any reduction in the share of revenue it receives from VGSL, other than the ***** percent (*****%) reduction in Fox's revenue share for late delivery provided for in the current version of the VGSL Agreement. + +11. INTELLECTUAL PROPERTY RIGHTS: + +(a) Intellectual Property Rights Defined: For purposes of this Agreement, the term "Intellectual Property Rights" means know-how, inventions, patents, patent rights, and registrations and applications, renewals, continuations and extensions thereof, works of authorship and art, copyrightable materials and copyrights (including, but not limited to, titles, computer code, designs, themes, objects, characters, character names, stories, dialog, catch phrases, concepts, artwork, animation, sounds, musical compositions, graphics and visual elements, audio-visual effects and methods of operation, and any related documentation), copyright registrations and applications, renewals and extensions thereof, mask works, industrial rights, trademarks, service marks, trade names, logos, trademark registrations and applications, renewals and extensions thereof, trade secrets, rights in trade dress and packaging, publicity, personality and privacy rights, rights of attribution, paternity, integrity and other similarly afforded "moral" rights, and all other forms of intellectual property and proprietary rights recognized by the U.S. laws, and other applicable foreign and international laws, treaties and conventions. + +(b) Fox Intellectual Property: Fox shall own all Intellectual Property Rights in and to any derivative works made from the Properties, whether or not used in the Wireless Products, including without limitation design documents, graphics, animation, music, packaging, advertising, promotional and other artwork used in connection with the development and distribution of the Wireless Products but at all times excluding the Licensee Materials as defined in Paragraph 11(c) below (collectively, the "Fox Intellectual Property"). The Fox Intellectual Property includes all rights in and to the entire "look and feel" of the Wireless Products, all visual displays, scripts, dialogue, literary treatments, concepts, characters, backgrounds, environments, and other elements visible to the Wireless Products' users; all sounds, sound effects, soundtracks and other elements audible to the user. Licensee acknowledges and agrees Fox shall be the exclusive owner of these rights as a work made for hire. Licensee acknowledges that Licensee's use of any Property shall not confer or imply a grant of rights, title or interest in the Property or good will associated therewith, except as specifically provided herein. + +Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ + + + +***** The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933. + +-17- + +Source: GLU MOBILE INC, S-1/A, 3/19/2007 + + + + + + + +Fox's Intellectual Property Rights shall be indefeasible and irrevocable and shall not be subject to reversion under any circumstance, including cancellation, termination, expiration, or breach of this Agreement. Licensee further agrees to execute one or more copyright assignments at Fox's request, or any other subsequent document as further evidence of this assignment, and to cooperate with Fox in perfecting the assignment of any rights to the Fox Intellectual Property, and hereby appoints Fox as its attorney-in-fact to execute any documents required in connection with such assignment. All materials created hereunder shall be prepared by an employee-for-hire of Licensee under Licensee's sole supervision, responsibility and monetary obligation, or, if third parties who are not employees of Licensee, including without limitation all software developers developing the Wireless Products contribute to the creation of any Fox Intellectual Property, Licensee shall obtain from such third parties a full written assignment of rights so that all right, title and interest in the Fox Intellectual Property shall vest in Fox. + +(c) Licensee Materials: Licensee owns and shall retain all right, title, and interest in and to (i) all software source code, tools, and technical documentation used by or for Licensee to create the Wireless Products, including without limitation any and all software code included in the Wireless Products, (ii) all aspects and elements of the Wireless Products other than the Fox Intellectual Property therein, including without limitation any and all gaming engines, game concepts, rules, scripts, and other Intellectual Property Rights therein; and (iii) any and all Intellectual Property Rights in any of the foregoing (the "Licensee Materials"). + +(d) Moral Rights: Licensee hereby does expressly assign to Fox any and all rights of paternity or integrity, rights to claim authorship, to object to any distortion, mutilation or other modification of, or other derogatory actions in relation to the PSM, the Fox Intellectual Property, and any of Fox's Intellectual Property Rights in and to the PSM and or the Fox Intellectual Property and any derivative works thereof, whether or not such would be prejudicial to Fox's honor or reputation, and any similar right, existing under judicial or statutory law of any country in the world, or under any treaty ("Moral Rights"), regardless of whether such right is denominated or generally referred to as a moral right. Licensee hereby does irrevocably transfer and assign to Fox any and all Moral Rights that Licensee may have in Fox's Intellectual Property Rights in and to the PSM and the Fox Intellectual Property and any derivative works thereof and shall cause Licensee's employees and contractors, including Licensee's developers of the Wireless Products, to do likewise. Licensee hereby does forever waive and agree never to assert any and all Moral Rights it may have in Fox's Intellectual Property Rights in and to the PSM and the Fox Intellectual Property and any derivative works thereof and shall cause its employees and contractors (including the developers) to do likewise. + +(e) Licensee Cooperation: Licensee shall not by any act or omission to act impair or prejudice the Intellectual Property Rights of Fox in the PSM, the Fox Intellectual Property or the Properties, or violate any moral rights or deal with the PSM, the Fox Intellectual Property or Properties so that any third party might obtain any lien or other right of whatever nature incompatible with the Intellectual Property Rights of Fox. Licensee agrees to notify Fox of any known or suspected infringement of Fox's Intellectual Property Rights in the PSM and the Property that comes to Licensee's attention and to assist Fox, at Fox's expense, in taking such action as Fox, in its sole discretion, deems necessary or appropriate to prevent or remedy such infringing activities. Licensee shall + +Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ + +-18- + +Source: GLU MOBILE INC, S-1/A, 3/19/2007 + + + + + + + +also promptly notify Fox in writing of any legal proceeding instituted, or written claim or demand asserted, by any third party against Licensee with respect to the infringement of any Intellectual Property Rights that is alleged to result from the use of the PSM or the Properties in connection with the Wireless Products in accordance with this Agreement. + +(f) First Sale Doctrine Not Applicable: The PSM is licensed, not sold, by Fox to Licensee, and nothing in this Agreement will be interpreted or construed as a sale or purchase of the PSM, including but not limited to any use of a "purchase order" by Licensee in connection with the transactions contemplated hereunder. Furthermore, notwithstanding use of the terms "sale" and "sell" throughout this Agreement, any distribution or delivery of the Wireless Products by Licensee to any sublicensee (including, without limitation, CSPs and end-users) will be by license and not by sale (and Licensee shall post notice of that fact in sufficient size, location and manner on Licensee's website on the page from which the general public can subscribe to the Wireless Products). Accordingly, Licensee acknowledges that the "First Sale Doctrine" (as embodied in 17 U.S.C., Paragraph 109 of the United States Copyright Act of 1976, as amended, or the equivalent law or statute in the Territory) does not apply to Licensee's acquisition of rights in and to the PSM and the Property hereunder or to any sublicensee's acquisition of rights in and to the Wireless Products under any agreement between Licensee and a sublicensee. + +12. TRADEMARKS AND COPYRIGHTS; FOX'S TITLE AND GOODWILL: + +(a) Intellectual Property Notices: Licensee agrees to place on Licensee's website and in the Wireless Products, and on the packaging and related documentation, if any, and Marketing Materials for the Wireless Products, all trademarks, copyright notices, logos and other legal or proprietary designations of Fox in the form and manner reasonably directed by Fox, including, without limitation, a notice indicating that the Wireless Products are produced by Licensee under license from Fox. All copyrights, trademarks and service marks relating to the Properties, PSM Materials, and Fox Intellectual Property, are, will be and shall remain the sole property of Fox and any rights therein granted to Licensee shall terminate immediately upon termination of this Agreement. All goodwill and reputation attaching to such copyrights, trademarks and service marks shall vest in Fox. Licensee shall create, execute and deliver to Fox all documents and instruments reasonably required by Fox for the protection of or otherwise in connection with the copyrights, trademarks and service marks of Fox. Licensee shall not have the right to use Fox's trademarks or trade names except in connection with the promotion and distribution of the Wireless Products in the Territory in accordance with the terms of this Agreement. Notwithstanding the foregoing, Licensee may include a notice for the Licensee Materials, where appropriate. + +(b) Goodwill: Licensee acknowledges that Fox is the owner of all right, title and interest in and to the PSM and the Properties, and further acknowledges the great value of the goodwill associated with the PSM and the Properties and that the PSM and the Properties have acquired secondary meaning in the mind of the public and that the trademarks and copyrights included in the PSM and the Properties, and the registrations thereof, are valid and subsisting, and further agrees that it shall not during the Term of this Agreement or at any time thereafter dispute or contest directly or indirectly, or do or cause to be done any act which in any way contests, impairs or tends to impair Fox's + +Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ + +-19- + +Source: GLU MOBILE INC, S-1/A, 3/19/2007 + + + + + + + +exclusive rights and title to the PSM and the Properties, or the validity thereof or the validity of this Agreement, and shall not assist others in so doing. + +(c) Cooperation: Licensee shall not in any manner represent that it has any ownership in the PSM or the Properties, or in any trademarks or copyrights included in the PSM or the Properties (or registrations thereof), but may, only during the Term, and only if Licensee has complied with any and all applicable laws and registration requirements within the Territory for so doing, represent that it is a "licensee" or "official licensee" hereunder. Licensee shall not register or attempt to register any copyright or trademark in the Properties, in its own name or that of any third party, nor shall it assist any third party in doing so. + +13. REPRESENTATIONS AND WARRANTIES: + +(a) By Licensee: Licensee represents and warrants to Fox that: + +(i) Governmental Authority: Licensee has full power and authority to enter into and perform this Agreement without approval from any governmental entity or third party, and that such ability is not limited or restricted by any agreements or understanding between Licensee and any other person or company; + +(ii) Corporate Authority: The execution, delivery and performance by Licensee of this Agreement have been duly authorized by any and all necessary corporate action by Licensee, and this Agreement constitutes the legal, valid and binding obligation of Licensee enforceable in accordance with its terms; + +(iii) Expertise: Licensee possesses the expertise and know-how and experience to develop the Wireless Products and is otherwise fully capable of performing its obligations under this Agreement; + +(iv) Infringement: The Licensee Materials and any other computer code, technology, information, art or other materials created, developed or used by Licensee pursuant to this Agreement will not infringe upon or misappropriate the Intellectual Property Rights or any other legal rights of any third party, and should any aspect of the Licensee Materials, or such other computer code, technology, information, art or materials created, developed or used by Licensee pursuant to this Agreement, become, or, in Fox's opinion, be likely to become, the object of any infringement or misappropriation claim or suit, Licensee will procure, at Licensee's expense, the right to use such Licensee Materials, computer code, technology, information, art or other materials in all respects, or will replace or modify the affected material to make it non- infringing; and + +(v) Licensee Conduct: Licensee will (A) conduct its business in a manner that reflects favorably at all times on the Property, the Wireless Products and the good name, goodwill and reputation of Fox, (B) avoid deceptive, misleading or unethical practices, that are or might be detrimental to Fox, the Property, the Wireless Products or the public, (C) avoid making disparaging, false or misleading statements or representations with regard to Fox, the Property or the Wireless Products, (D) not employ or cooperate in the employment of any deceptive or + +Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ + +-20- + +Source: GLU MOBILE INC, S-1/A, 3/19/2007 + + + + + + + + misleading advertising material with regard to Fox, the Property or the Wireless Products, (E) make no representations, warranties or guarantees to customers or to the trade with respect to the specifications, features or capabilities of the Wireless Products that are inconsistent with the warranties and disclaimers included in or with the Wireless Products, (F) not sell the Wireless Products to any party who it knows, or reasonably should know, will infringe Fox's Intellectual Property Rights in the Wireless Products, and (G) comply with all applicable international, national, regional, and local laws in performing its duties hereunder and in any of its dealings with respect to the Wireless Products. + + (b) By Fox: Fox represents and warrants to Licensee that: + + (i) Authority: Fox has full power and authority to enter into and perform this Agreement, and that such ability is not limited or restricted by any agreements or understanding between Fox and any other person or company. The execution, delivery and performance by Fox of this Agreement have been duly authorized by any and all necessary corporate action by Fox, and this Agreement constitutes the legal, valid and binding obligation of Fox enforceable in accordance with its terms. + + (ii) No Representations/Warranties Regarding Revenue: Notwithstanding the representations and warranties made by Fox in this Paragraph 13(b), Fox makes no representations or warranties whatsoever regarding the amount of revenue that may be generated by sales of the Wireless Products. + +14. INDEMNIFICATION: + + (a) By Licensee: Licensee agrees to indemnify, defend and hold harmless Fox, Trademark Licensor and their respective successors, assigns, parents, subsidiaries, affiliates and co-venturers, and their respective directors, officers, employees and agents from and against all third party claims, damages, losses, liabilities, suits and expenses (including reasonable attorneys' fees), arising out of or in connection with any allegations that (i) the Licensee Materials or the manufacture, packaging, distribution, promotion, sale, or exploitation thereof (except with respect to those matters against which Fox has agreed to indemnify Licensee hereunder) infringes or misappropriates the Intellectual Property Rights of any third party or (ii) any breach of warranty, representation or covenant contained in this Agreement; provided that Fox (a) promptly notifies Licensee in writing of the claim; (b) grants Licensee sole control of the defense, subject to Fox's approval of counsel (to avoid conflicts of interest) and the terms of any settlement that affect Fox; and (c) provides Licensee, at Licensee's expense, with all assistance, information and authority reasonably required for the defense and settlement of the claim. If Licensee fails to undertake such defense, Licensee shall reimburse Fox for reasonable attorneys' fees incurred by Fox in its defense of such claim or suit. Furthermore, Licensee agrees to indemnify, defend and hold harmless Fox, Trademark Licensor and their respective successors, assigns, parents, subsidiaries, affiliates and co-venturers and all other parties associated with the Property, and their respective directors, officers, employees and agents from and against claims made by VGSL against Fox regarding failure to deliver and distribute the VGSL Products (as defined in Paragraph 1(a)) in a timely manner as set forth in Paragraphs 2(a)(ii), 2(b)(i) and 2(c)(ii), third-party Intellectual Property claims relating to the Licensee Materials, and all related damages, losses, + +Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ + +-21- + +Source: GLU MOBILE INC, S-1/A, 3/19/2007 + + + + + + + + liabilities, suits and expenses (including reasonable attorneys' fees). Fox's failure to provide notice in accordance with this Paragraph shall not relieve Licensee of its obligations to indemnify, defend and hold Fox harmless from any such claims, unless and except to the extent that Licensee is prejudiced by any such failure. + + (b) By Fox: Fox agrees to indemnify, defend and hold harmless Licensee, its successors, assigns, parents, subsidiaries, affiliates and co-venturers, and their respective directors, officers, employees and agents from and against all third party claims, damages, losses, liabilities, suits and expenses (including reasonable attorneys' fees), arising out of or in connection with any allegations that the PSM, PSM Materials, or Properties infringe or misappropriate any Intellectual Property Rights of any third party; provided that Licensee (a) promptly notifies Fox in writing of the claim; (b) grants Fox sole control of the defense and settlement of the claim; and (c) provides Fox, at Fox's expense, with all assistance, information and authority reasonably required for the defense and settlement of the claim. If Fox fails to undertake such defense, Fox shall reimburse Licensee for reasonable attorneys' fees incurred by Licensee in its defense of such claim or suit. + + (c) Injunctions. If either party's use or exploitation of any materials provided and licensed hereunder is, or in the licensor's opinion is likely to be, enjoined due to the type of claim specified in Paragraphs 13(a) or (b), above, the licensor may, at its sole option and expense: (a) procure for the licensee the right to continue using such rights under the terms of this Agreement; (b) replace or modify any materials provided so that they are non-infringing; or (c) if options (a) and (b) above cannot be accomplished despite the licensor's reasonable efforts, then the licensor may terminate the licensee's rights and the licensor's obligations hereunder with respect to such materials, in which event the licensor will refund to the licensee any amounts paid by the licensee with respect to such materials. For the avoidance of doubt, Licensee is the licensor of the Licensee Materials, pursuant to Paragraph 1(e), for the purpose of this Paragraph. + + (d) Sole Remedy. THE PROVISIONS OF THIS PARAGRAPH 14 SET FORTH EACH PARTY'S SOLE AND EXCLUSIVE OBLIGATIONS AND REMEDIES WITH RESPECT TO THIRD PARTY CLAIMS OF INFRINGEMENT OR MISAPPROPRIATION OF INTELLECTUAL PROPERTY RIGHTS OF ANY KIND UNLESS OTHERWISE STIPULATED BY JUDICIAL ORDER. + +15. TERMINATION: + + (a) Termination Rights; + + (i) Bankruptcy: If Licensee's liabilities exceed its assets, or if Licensee becomes unable to pay its debts as they become due, or files or has filed against Licensee a petition in bankruptcy, reorganization or for the adoption of an arrangement under any present or future bankruptcy, reorganization or similar law (which petition if filed against Licensee shall not be dismissed within 30 days from the filing date), or if Licensee makes an assignment for the benefit of its creditors or is adjudicated a bankrupt, or if a receiver or trustee of all or substantially all of Licensee's property is appointed, or if Licensee discontinues its business, this Agreement shall automatically terminate forthwith without notice to Licensee. + +Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ + +-22- + +Source: GLU MOBILE INC, S-1/A, 3/19/2007 + + + + + + + + (ii) Transfer or Change of Control: If a substantial portion of the assets or controlling stock in Licensee's business is sold or transferred, or if there is a substantial change in Licensee's management, or if Licensee's property is expropriated, confiscated or nationalized by any government or if any government assumes de facto control of Licensee's business, in whole or in part, Fox may terminate this Agreement upon 30 days' notice to Licensee. + + (iii) Unauthorized Uses: If Licensee transfers, sells or distributes to any unauthorized third party any artwork, voice clips, or other Fox proprietary materials related to the Property including but not limited to Marketing Materials, then Fox may terminate this Agreement forthwith on written notice without any cure period. + + (iv) Failure to Exploit: If Licensee fails to exploit the PSM as set forth in Paragraph 2(a) and 2(b), or fails to release the Wireless Products in accordance with the dates set forth in Paragraph 2(b), then Fox may terminate this Agreement forthwith on written notice without any cure period subject to the terms and conditions set forth in Paragraph 2(a) and 2(b), respectively. + + (v) Failure to Obtain Approvals: If Licensee releases a Wireless Product without first obtaining Fox's approval as specifically set forth in this Agreement in Paragraph 9, then Fox may terminate this Agreement forthwith on written notice without any cure period. + + (vi) Other Defaults: Excepting only those Licensee defaults in this Paragraph 15 which permit Fox to terminate immediately without any cure period for Licensee, if either party fails to perform any of its material obligations hereunder, the other party may terminate this Agreement upon 30 days' notice, unless the breaching party cures any such breach within said 30 days and gives notice to the other party thereof within that period. Notwithstanding the foregoing, in the event that either party (A) fails to pay Royalties or other amounts when due, or (B) fails to make Royalty or other accountings in accordance with the terms of this Agreement, then the breaching party shall be subject to a one-time cure period of fifteen (15) days for such breach. If a party fails to cure the breach within such fifteen (15)-day period or another breach of either (A) or (B) above occurs following an initial cure within the fifteen (15)-day period, then the other party shall have the right in its sole discretion to terminate this Agreement forthwith on written notice without any cure period. + + (vii) Other Agreements: Should any event of default by Licensee cause Fox to terminate this Agreement, Fox, in its sole discretion, may terminate, without any cure period, any other agreements concurrently existing between Fox and Licensee upon written notice specifying the agreements to be terminated. For the avoidance of doubt, this remedy shall only apply to any agreements concurrently existing between the specific parties to this Agreement and shall not apply to agreements between Licensee and Fox Sports. + + (b) Effect of Termination/Expiration: In the event of termination of this Agreement, Licensee shall: (i) immediately stop in all respects the sale and distribution of the Wireless Products and provide Fox with a complete inventory report and accounting with + +Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ + +-23- + +Source: GLU MOBILE INC, S-1/A, 3/19/2007 + + + + + + + + payment of all Royalties, and (ii) at Fox's election shall either (A) deliver to Fox all materials related to the Wireless Products or (B) give Fox satisfactory evidence of their destruction. Licensee agrees that its failure to stop in all respects the sale and/or distribution of the Wireless Products upon termination or expiration of the Agreement will result in immediate irreparable damage to Fox for which there is no adequate remedy at law, and in the event of such failure by Licensee, Fox shall be entitled to injunctive relief. Fox's exercise of any of the foregoing remedies shall not operate as a waiver of any other rights or remedies which Fox may have. Fox shall not distribute the Wireless Products after the termination or expiration of this Agreement without obtaining from Licensee a separate license to the Licensee Materials. + +(i) Sell-Off Period: Notwithstanding Paragraph 15(b), in the event of termination of this Agreement, Licensee shall have a period of ***** from the date of such termination (unless such termination occurs less than ***** prior to the expiration of this Agreement in which case the time period shall be shortened accordingly so as not to exceed the date of expiration) in which to sell-off existing inventory of Wireless Products already in the Distribution Channels ("Sell Off Period"). Licensee agrees that no additional Wireless Products may be developed or distributed during the Sell Off Period and Licensee agrees to require that any Licensed CSP to comply with this provision. Upon the expiration of the Sell Off Period, Licensee agrees to destroy all such remaining inventory and confirm same in writing to Fox (and require that any Licensed CSP do the same). Any revenues, credits or other consideration received by Licensee for the Wireless Products during the Sell Off Period will be subject to Licensee's obligation to pay Fox Royalties pursuant to Paragraph 7 above. + +(ii) Fox's Development of Wireless Products: In the event of termination or expiration of this Agreement or Licensee's loss of exclusive rights under this Agreement, Fox shall be free to create and exploit, or have a third party create or exploit, wireless products which may be similar to those developed and distributed by Licensee pursuant to this Agreement for the Properties. + + (c) Guarantee Forfeiture: In the event of termination of this Agreement and without limitation of Fox's rights and remedies all of which are expressly reserved, the following payment penalties shall apply: (i) if termination occurs in the first year of the Term, Licensee shall forfeit any Guarantee paid, and shall immediately pay any remaining Guarantee, up to the amount of ***** dollars (US$*****), and any Guarantee payments made in excess of ***** dollars ($*****) shall be refunded by Fox to Licensee; and (ii) if termination occurs in the second year of the Term, Licensee shall forfeit any Guarantee paid, and shall immediately pay any remaining portion of the Guarantee then unpaid, up to the amount of ***** dollars (US$*****). Any forfeited Guarantees will apply as a set off against any additional damages claimed by Fox. + +16. CONFIDENTIAL INFORMATION AND PRESS: + + (a) Confidential: Each party agrees to use reasonable efforts, and at least the same care that it uses to protect its own confidential information of like importance, to prevent unauthorized dissemination and disclosure of the other party's confidential information + +Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ + + + +***** The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933. + +-24- + +Source: GLU MOBILE INC, S-1/A, 3/19/2007 + + + + + + + + during and for a period of three (3) years after the Term. These obligations will be subject to the following terms and conditions: + + (b) Confidential Information Defined: Confidential information includes, but is not limited to, the following: (i) the design, technology and know- how related to the Wireless Products, the PSM and the Property; (ii) the computer object and source code of the Wireless Products, the PSM and the Property; (iii) non-public information concerning either party's financing, financial status, research and development, proposed new products, marketing plans and pricing, unless and until publicly announced; and (iv) any information designated by either party as confidential or proprietary in writing: + +(i) Certain Information Not Deemed Confidential: The foregoing obligations will not apply to any information that: (A) becomes known to the general public without fault or breach on the part of the receiving party; (B) the receiving party receives from a third party without breach of a nondisclosure obligation and without restriction on disclosure; (C) was in the possession of the receiving party prior to disclosure by the other; or (D) is independently developed by the receiving party's personnel having no access to similar confidential information obtained from the other. + +(ii) Confidential Information of Another: Nothing in this Agreement will affect any obligation of either party to maintain the confidentiality of a third party's confidential information. + + (c) Press Releases: Licensee may not issue a press release or otherwise disclose to or discuss with the press the existence or terms of this Agreement without the prior written consent of Fox (it being understood that Fox's legal counsel shall have final approval over the timing and/or content of any press release or other public disclosure by Licensee regarding this Agreement). Notwithstanding the foregoing, the parties (and their respective parent companies) shall be free to disclose Confidential information to the extent required by any law or regulation to any relevant stock exchange. The parties will liaise and endeavor to agree to the wording of any such disclosure in advance. + +17. MISCELLANEOUS: + + (a) Notices: All notices and statements shall be in writing and shall together with any payments be personally delivered or sent postage prepaid to the intended party at the address set forth below (unless notification of a change of address is given in writing). The date of mailing of a notice or statement shall be deemed the date the notice is given or statement rendered. + + To Fox: + +Mail: Twentieth Century Fox Licensing & Merchandising P.O. Box 900 Beverly Hills, California 90213 USA Attention: Vice President, Wireless Development + +Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ + +-25- + +Source: GLU MOBILE INC, S-1/A, 3/19/2007 + + + + + + + + Messenger: 2121 Avenue of the Stars, 4th Floor Los Angeles, California 90067 USA Attention: Vice President, Wireless Development Facsimile: (310) 369-1465 With copies to: Mail: Twentieth Century Fox Licensing & Merchandising P.O. Box 900 Beverly Hills, California 90213 USA Attention: Legal Department Messenger: 2121 Avenue of the Stars, Suite 1334 Los Angeles, California 90067 USA Attention: Legal Department Facsimile: (310) 369-4241 and: Mail: Twentieth Century Fox Licensing & Merchandising P.O. Box 900 Beverly Hills, California 90213 USA Attention: Finance Department Messenger: 2121 Avenue of the Stars, 4th Floor Los Angeles, California 90067 USA Attention: Finance Department Facsimile: (310) 369-8531 To Licensee: Mail & Sorrent Inc. + + Messenger: 1800 Gateway Drive, Suite 200 San Mateo, CA 94404 Attention: Paul Zuzelo E-mail: pzuzelo@sorrent.com Facsimile: (650) 571-5698 + +Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ + +-26- + +Source: GLU MOBILE INC, S-1/A, 3/19/2007 + + + + + + + + With copies to: Mail & Sorrent Inc. Messenger: 1800 Gateway Drive, Suite 200 San Mateo, CA 94404 Attention: Greg Suarez E-mail: greg.suarez@sorrent.com Facsimile: (650) 571-5698 + +(b) Waiver, Modification: The terms of this Agreement may not be waived or modified except by an agreement in writing executed by the parties hereto. The waiver by either party of any breach of this Agreement by the other party must be in writing and shall not be deemed to be a waiver of any prior or succeeding breach. + +(c) Relationship of the Parties: Nothing herein contained shall be construed to place the parties in the relationship of principal and agent, partners or joint venturers and neither party shall have the power to obligate or bind the other party in any manner whatsoever. + +(d) No Assignment: Licensee may not assign any of its rights and obligations under this Agreement without the prior written consent of Fox; provided that Licensee may assign all of its rights and obligations hereunder to its successor in the event of a sale of all or substantially all of its assets or voting securities, or of the business unit associated with this Agreement. Subject to the foregoing, this Agreement will inure to the benefit of each parties successors and assigns. Any purported assignment or transfer except in accordance with the above shall be void and of no effect. + +(e) Governing Law; Jurisdiction; Service of Process: This Agreement shall be construed in accordance with the laws of the State of California applicable to agreements executed and to be wholly performed therein. The parties hereto agree that any suit, action or proceeding arising out of or relating to this Agreement shall be instituted and prosecuted in the United States District Court for the Central District of California or in any court of competent jurisdiction of the State of California. The parties hereto irrevocably submit to the jurisdiction of said courts and waive any rights to object to or challenge the appropriateness of said forums. Service of process shall be in accordance with the laws of the State of California. + +(f) Appointment/Change of Agent: Upon notice to Licensee, Fox may appoint an agent or designate a substitute agent from time to time to act on Fox's behalf to collect from Licensee and remit to Fox all Royalty payments due to Fox under this Agreement. The termination or substitution of an agent by Fox shall not affect the rights, duties, privileges or obligations of Fox or of Licensee hereunder. No agent so appointed is authorized to make any representation or warranty with respect to the ownership or title of the Property and or to approve the manufacture, sale or distribution of the Wireless Products. + +Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ + + + +***** The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933. + +-27- + +Source: GLU MOBILE INC, S-1/A, 3/19/2007 + + + + + + + +(g) Binding Agreement: Licensee shall have no rights hereunder and neither Fox nor Trademark Licensor shall be bound hereby unless and until this Agreement has been accepted in writing by Fox. If Fox does not accept this Agreement, the parties shall be released from all liability and this document shall be of no force and effect. + +(h) Limitation of Actions: No legal action shall be brought by Licensee under this Agreement unless commenced within 12 months from the date the cause of action arose. + +(i) Severability: Should any paragraph, clause or provision of this Agreement be found invalid or unenforceable by any court having jurisdiction over this Agreement, the subject matter hereof, or the parties hereto, such decision shall affect only the paragraph, clause or provision so construed or interpreted and all remaining paragraphs, clauses or provisions shall remain valid and enforceable. + +(j) Entire Agreement: There are no representations, warranties or covenants other than those set forth in this Agreement which sets forth the entire understanding among the parties hereto. + +(k) Headings: The headings of the Paragraphs of this Agreement are for convenience only and shall not be of any effect in construing the meanings of the Paragraphs. + +(l) Survival: The following Paragraphs shall survive the expiration or termination of this Agreement: 5; 6; 7; 11; 13(a)(iv); 14, and 16. + +(m) Drafting: Because the parties hereto have participated in drafting and negotiating this Agreement, there shall be no presumption against any party on the ground that such party was responsible for preparing this Agreement or any part of it. + +(n) Force Majeure: Neither party shall be liable for any delay or failure in performing any of its obligations hereunder when any such delay or failure is occasioned by causes or contingencies beyond its control, including but not limited to force majeure, fires, floods, war, strikes and governmental regulations, provided the party delaying or failing to perform shall promptly after its inception give written notice of such cause or contingency to the other party and provided further that the party giving such notice shall make all reasonable efforts to remove such disability as soon as possible. Notwithstanding the foregoing, in the event the events constituting force majeure cause a delay in performance of thirty consecutive days or more, either party may terminate this Agreement immediately upon written notice to the other party. + +Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ + +-28- + +Source: GLU MOBILE INC, S-1/A, 3/19/2007 + + + + + + + +By signing in the spaces provided below, the parties hereto have agreed to all of the terms and conditions of this Agreement. SORRENT, INC. TWENTIETH CENTURY FOX LICENSING & MERCHANDISING, a division of Fox Entertainment Group, Inc. ("Licensee") ("Fox") By /s/ Paul Zuzelo By /s/ Jamie Samson + + Name Paul Zuzelo Jamie Samson Its Senior Vice President Its CAO & Exec. V.P. Date December 17, 2004 Date 12/17/04 + +Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ + +-29- + +Source: GLU MOBILE INC, S-1/A, 3/19/2007 + + + + + + + +EXHIBIT A + +Properties + +Major Releases: + +"Robots" + +Untitled Ridley Scott Film + +"Ice Age 2" + +"Eragon" + + • The inclusion of "Eragon" shall be contingent upon Fox's acquisition of the rights to the Property and its ability to grant licensing and merchandising rights thereto. For the avoidance of doubt, there shall be no grant of rights to the Property from Fox to Licensee without Fox's prior written notice advising of Fox's acquisition of the rights to the Property and related licensing and merchandising rights. This Exhibit A and Exhibit E will be amended at such time that Fox can grant such rights. + +Targeted Releases: + +Untitled Mike Judge Film + +"Mr. & Mrs. Smith" + +"Lady Luck" + + • The inclusion of "Lady Luck" shall be contingent upon Fox's acquisition of the rights to the Property and its ability to grant licensing and merchandising rights thereto. For the avoidance of doubt, there shall be no grant of rights to the Property from Fox to Licensee without Fox's prior written notice advising of Fox's acquisition of the rights to the Property and related licensing and merchandising rights. This Exhibit A and Exhibit H will be amended at such time that Fox can grant such rights. + +TBD + +TBD + +TBD + +TBD + +TBD + +The Properties set forth on this Exhibit A may be removed and substituted, or additional Properties may be included, in accordance with Paragraph 1(a) (i). + +Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ + +-30- + +Source: GLU MOBILE INC, S-1/A, 3/19/2007 + + + + + + + +EXHIBIT B + +"Robots" Wireless Products + +A minimum of: + +12-D Java Game in connection with the initial theatrical release + +1 3-D Java Game in connection with the DVD release + +5 Java Applications ('Screensavers') (2 3-D Screensavers and 3 2-D Screensavers) in connection with the initial theatrical release + +5 MMS + +10 Wallpapers + +5 Voicetones + +Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ + +-31- + +Source: GLU MOBILE INC, S-1/A, 3/19/2007 + + + + + + + +EXHIBIT C + +Untitled Ridley Scott Film Wireless Products + +A minimum of: + +1 2-D Java Game, which shall include mutually agreed upon 3-D elements + +1 Java Application ('Screensaver') where feasible + +5 MMS + +10 Wallpapers + +5 Voicetones + +Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ + +-32- + +Source: GLU MOBILE INC, S-1/A, 3/19/2007 + + + + + + + +EXHIBIT D + +"Ice Age 2" Wireless Products + +A minimum of: + +1 Java Game (2-D or 3-D to be mutually agreed) + +1 Java Application ('Screensaver') where feasible + +5 MMS + +10 Wallpapers + +5 Voicetones + +Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ + +-33- + +Source: GLU MOBILE INC, S-1/A, 3/19/2007 + + + + + + + +EXHIBIT E + +"Eragon" Wireless Products + +A minimum of: + +1 Java Game (2-D or 3-D to be mutually agreed) + +1 Java Application ('Screensaver') where feasible + +5 MMS + +10 Wallpapers + +5 Voicetones + +Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ + +-34- + +Source: GLU MOBILE INC, S-1/A, 3/19/2007 + + + + + + + +EXHIBIT F + +"Untitled Mike Judge Film" Wireless Products + +A minimum of: + +1 Java Game (2-D or 3-D to be mutually agreed provided that if the parties are unable to reach an agreement, Licensee's decision will prevail) + +1 Java Application ('Screensaver') where feasible + +5 MMS + +10 Wallpapers + +5 Voicetones + +Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ + +-35- + +Source: GLU MOBILE INC, S-1/A, 3/19/2007 + + + + + + + +EXHIBIT G + +"Mr. & Mrs. Smith" Wireless Products + +A minimum of: + +1 Java Game (2-D or 3-D to be mutually agreed provided that if the parties are unable to reach an agreement, Licensee's decision will prevail) + +1 Java Application ('Screensaver') where feasible + +5 MMS + +10 Wallpapers + +5 Voicetones, if talent agreements so allow + +Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ + +-36- + +Source: GLU MOBILE INC, S-1/A, 3/19/2007 + + + + + + + +EXHIBIT H + +"Lady Luck" Wireless Products + +A minimum of: + +1 Java Game (2-D or 3-D to be mutually agreed provided that if the parties are unable to reach an agreement, Licensee's decision will prevail) + +1 Java Application ('Screensaver') where feasible + +5 MMS + +10 Wallpapers + +5 Voicetones, if talent agreements so allow + +Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ + +-37- + +Source: GLU MOBILE INC, S-1/A, 3/19/2007 + + + + + + + +EXHIBIT I + +"TBD" Wireless Products + +A minimum of: + +1 Java Game (2-D or 3-D to be mutually agreed provided that if the parties are unable to reach an agreement, Licensee's decision will prevail) + +1 Java Application ('Screensaver') where feasible + +5 MMS + +10 Wallpapers + +5 Voicetones, if talent agreements so allow + +Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ + +-38- + +Source: GLU MOBILE INC, S-1/A, 3/19/2007 + + + + + + + +EXHIBIT J + +"TBD" Wireless Products + +A minimum of: + +1 Java Game (2-D or 3-D to be mutually agreed provided that if the parties are unable to reach an agreement, Licensee's decision will prevail) + +1 Java Application ('Screensaver') where feasible + +5 MMS + +10 Wallpapers + +5 Voicetones, if talent agreements so allow + +Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ + +-39- + +Source: GLU MOBILE INC, S-1/A, 3/19/2007 + + + + + + + +EXHIBIT K + +"TBD" Wireless Products + +A minimum of: + +1 Java Game (2-D or 3-D to be mutually agreed provided that if the parties are unable to reach an agreement, Licensee's decision will prevail) + +1 Java Application ('Screensaver') where feasible + +5 MMS + +10 Wallpapers + +5 Voicetones, if talent agreements so allow + +Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ + +-40- + +Source: GLU MOBILE INC, S-1/A, 3/19/2007 + + + + + + + +EXHIBIT L + +"TBD" Wireless Products + +A minimum of: + +1 Java Game (2-D or 3-D to be mutually agreed provided that if the parties are unable to reach an agreement, Licensee's decision will prevail) + +1 Java Application ('Screensaver') where feasible + +5 MMS + +10 Wallpapers + +5 Voicetones, if talent agreements so allow + +Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ + +-41- + +Source: GLU MOBILE INC, S-1/A, 3/19/2007 + + + + + + + +EXHIBIT M + +"TBD" Wireless Products + +Up to: + +1 Java Game (2-D or 3-D to be mutually agreed provided that if the parties are unable to reach an agreement, Licensee's decision will prevail) + +1 Java Application ('Screensaver') where feasible + +5 MMS + +10 Wallpapers + +5 Voicetones, if talent agreements so allow + +Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ + +-42- + +Source: GLU MOBILE INC, S-1/A, 3/19/2007 + + + + + + + +EXHIBIT N + +Glossary + +"MMS" stands for Multimedia Messaging Service — a store and forward messaging service that allows mobile subscribers to exchange multimedia messages with other mobile subscribers. MMS supports the transmission of additional media types: text, picture, audio, video and combinations of them. + +"Realtone" or "Trutone" (also referred to as Master Tone) shall mean a digital, audio file containing an excerpt of a master recording of a musical composition, no more than 45 seconds in length, formatted for playback by a wireless device when such wireless device receives an incoming call. + +"Screensaver" shall mean a Java application that replaces the image on a screen when the screen is not in use. + +"Wallpaper" on a mobile phone shall mean the background pattern or picture against which mobile phone screen menus, icons, and other elements are displayed and moved around. A wallpaper image can be in a JPEG or a GIF file format. Each model/make of the mobile phone provides several pre- installed wallpaper images for the user to choose from. A user can also choose to download and install third-party wallpapers and use one of these instead. + +"Voicetone" shall mean the audio speech sound heard by a caller, such as lines from a movie or spoken lyrics of a song. + +"Ringtone" shall mean a digital, audio file containing a portion of a musical composition, no more than 45 seconds in length, formatted for playback by a wireless device when such wireless device receives an incoming call. For the avoidance of doubt, a Ring Tone may be either monophonic or polyphonic. + +[Remaining definitions are TBD] + +Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ + +-43- + +Source: GLU MOBILE INC, S-1/A, 3/19/2007 + + + + + + + +EXHIBIT O Royalty Statement + + + +TWENTIETH CENTURY FOX LICENSING & MERCHANDISING LICENSING STATEMENT OF ROYALTIES PAYABLE Licensee Contract Number: + +Property Report Period Start Date: + +Territory Report Period End Date: + + Wallpaper Screensaver MMS Game Ringer Wallpaper Screensaver MMS Game Ringer Name/Likeness No Music No Music No Music No Music No Music Music Music Music Music Music None + +1 + +2 + +3 + +4 + +5 + +6 + +7 Mail to: Twentieth Century Fox Licensing & Merchandising Total Net Sales + + P.O. Box 900 Royalty Rates + + Beverly Hills, CA 90213-0900 Royalty Earned + + Attn: Jimyong Kim Less: Advance Balance + +Street address: 2121 Avenue of the Stars, Room 4014 Royalty Payment Enclosed + + Los Angeles, CA 90067 -or-New Advance Balance + + This report is based on our books and records and is, to the best of my knowledge, true, correct and complete for the period stated and complies with all contractual requirements Minimum Guarantee Amount + +NAME TITLE Payment Required to Meet Guarantee due on: + +SIGNATURE DATE + +NOTE: This report is required to be filed whether or not there were any sales for the period. For most licenses, the report is due no later than 30 days following every calendar quarter the agreement is active. + +Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ + +-44- + +Source: GLU MOBILE INC, S-1/A, 3/19/2007 + + + + + + + +EXHIBIT P + +News America Incorporated Statement of Privacy Principles + +PREAMBLE + +News America Incorporated ("News America") is the principal U.S. subsidiary of The News Corporation Limited, one of the world's largest media companies. The businesses of News America and its subsidiary, Fox Entertainment Group, Inc., include: the production and distribution of motion pictures, television programming and related consumer products (Twentieth Century Fox); television and cable broadcasting (the Fox Network, Fox owned television stations, Fox Sports Net, Fox Sports World, Fox Sports World Espaňol, Speedvision, Fox News Channel, FX and Fox Movie Channel); the publication of newspapers, books, magazines and promotional free-standing inserts (The New York Post, HarperCollins Publishers, The Weekly Standard and News America Marketing); sports franchises (the Los Angeles Dodgers); and marketing services (SmartSource/iGroup). In this Statement of Privacy Principles these businesses are collectively called the News America Group. At the News America Group we strive to enhance our relationship with consumers. Collecting personal information about consumers is vital to this effort. This Statement of Privacy Principles describes the policies and procedures of the News America Group's U.S.-based businesses for the collection, use, and dissemination of personally identifiable information about U.S. consumers in both the online and offline world. The Principles are based on the concepts of consumer notice and choice.* The News America Group is actively involved in the ongoing privacy debate and is continually monitoring privacy developments. Accordingly, from time to time we may modify these Privacy Principles to reflect changes in the law, self-regulatory initiatives and technology. + +COLLECTION + +The News America Group obtains personally identifiable information only if we believe the information is relevant to our relationship with a consumer or to assist us in creating a relationship with a consumer. We obtain personally identifiable information about consumers directly from consumers whenever possible, primarily in the course of providing them with products, information and services. When the News America Group obtains personally identifiable information from third-party sources, we use only reputable sources. In those instances where our information collection activities involve children, the News America Group provides special privacy protections. + +NOTICE + +When The News America Group collects personally identifiable information from consumers, we inform them about who is collecting the information, why it is being collected, how it is being collected, the types of uses we will make of the information, whether we will disclose the information to third parties and the types of third parties to whom we will disclose the information, and consumers' options regarding the use of their information. + +Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ + +-45- + +Source: GLU MOBILE INC, S-1/A, 3/19/2007 + + + + + + + +CHOICE + +The News America Group provides consumers with an opportunity to choose whether the business unit that collects their personally identifiable information may use it for purposes that are other than those for which the information was submitted, and whether the information may be shared with third parties. + +USE OF PERSONAL INFORMATION + +Inside the News America Group, we use personally identifiable information only in a manner consistent with these Privacy Principles. Personally identifiable information is available only to our employees, agents and contractors who have a business reason to have access to such information. The News America Group uses personally identifiable information to respond to our customers and to make decisions about the goods and services that the News America Group or its business partners provide or hope to provide to consumers. Subject to the exercise of consumer choice, personally identifiable information may be used for different purposes, or shared with our business partners. A News America Group business entity may disclose personally identifiable information without providing consumers with a choice in order to protect the rights of the companies within the News America Group or their respective employees, agents and contractors; to protect the safety and security of visitors to web sites operated by News America Group companies; to protect against fraud or for risk management purposes; or to comply with the law or legal process. In addition, if a News America Group entity sells all or part of one of its businesses, makes a sale or transfer of assets or is otherwise involved in a business merger or transfer, personally identifiable information may be transferred to a third party as part of that transaction. + +SECURITY + +The News America Group uses reasonable administrative, technical, personnel, and physical measures to safeguard personally identifiable information in its possession against loss, theft, and unauthorized use, disclosure or modification. + +ACCESS, CORRECTION AND DELETION + +Whenever possible, each News America Group business unit permits consumers to have a right to see the personally identifiable information that it has collected from them, to correct any information that is incorrect and to instruct the business unit to delete the information from its files. + +REMEDIES + +Consumers may contact a privacy officer at each News America Group business unit regarding privacy complaints and disputes. + +COMPLIANCE + +Each News America Group company will take appropriate measures to ensure compliance with these Privacy Principles. + +Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ + +-46- + +Source: GLU MOBILE INC, S-1/A, 3/19/2007 + + + + + + + +EXHIBIT Q + +LICENSEE COMPETITORS + +Jamdat Mforma Digital Bridges Digital Chocolate Game Loft Infospace + +Any further additions and/or deletions shall be mutually agreed and addressed via amendment to this Agreement. + +Wireless Content License Agreement Multiple Properties / Sorrent, Inc. / Final PLZ + +-47- + +Source: GLU MOBILE INC, S-1/A, 3/19/2007 \ No newline at end of file diff --git a/full_contract_txt/GluMobileInc_20070319_S-1A_EX-10.09_436630_EX-10.09_Content License Agreement2.txt b/full_contract_txt/GluMobileInc_20070319_S-1A_EX-10.09_436630_EX-10.09_Content License Agreement2.txt new file mode 100644 index 0000000000000000000000000000000000000000..140f41246430388b7d1005a910067ed56a52ab25 --- /dev/null +++ b/full_contract_txt/GluMobileInc_20070319_S-1A_EX-10.09_436630_EX-10.09_Content License Agreement2.txt @@ -0,0 +1,115 @@ +AMENDMENT NO. 1 + +Dated as of November 11, 2005 + +Reference is hereby made to that certain fully executed Wireless Content License Agreement Number 12965 dated as of December 16, 2004 ("Agreement"), between TWENTIETH CENTURY FOX LICENSING & MERCHANDISING, division of Fox Entertainment Group, Inc. ("Fox"), as Administrator for Twentieth Century Fox Film Corporation ("Trademark Licensor") and Glu Mobile, Inc. f/k/a Sorrent, Inc. ("Licensee"). + +The parties agree to modify the Agreement as follows: + + + +1. PARTIES + +(a) FOX ASSIGNMENT OF AGREEMENT: Pursuant to Twentieth Century Fox Licensing and Merchandising's assignment of rights and obligations through an assignment dated as of October 1, 2005 by and between Twentieth Century Fox Licensing and Merchandising and Fox Mobile Entertainment Inc., Fox Mobile Entertainment, Inc. is hereby substituted for Twentieth Century Fox Licensing and Merchandising as "Fox" under the Agreement. + +(b) LICENSEE CHANGE OF NAME: The parties hereby acknowledge that Licensee's change of name from Sorrent, Inc. to Glu Mobile, Inc. + + + +2. WIRELESS PRODUCTS + +(a) "IN HER SHOES": Consistent with Paragraph 1(a)(ii), Exhibit A is amended to include the Property "In Her Shoes" as a Targeted Release. Subject to talent restrictions with respect to the use of likeness in merchandising and specifically excluding, without limitation, any use of the likeness of Cameron Diaz for any content intended for sale, Licensee shall develop the following Wireless Product in conjunction with "In Her Shoes": one (1) 2-D casual-style puzzle game. ("IN HER SHOES Wireless Product") + +(i) "IN HER SHOES" Porting: Licensee shall work with Fox's United Kingdom office to determine the appropriate porting and support a potential release of the Wireless Product developed in connection with "IN HER SHOES". + +(ii) "IN HER SHOES" GUARANTEE AND ROYALTY: There shall be no Individual Property Guarantee attributable to the Targeted Release "IN HER SHOES". Licensee may recoup the Guarantee Forfeiture Payment (as defined in Paragraph 3 of this Amendment below) from the sales of the IN HER SHOES Wireless Product. At such time that ***** percent (*****%) of the Guarantee Forfeiture Payment is recouped by Licensee, Fox shall earn and Licensee shall pay to Fox Royalties at the rate of ***** percent (*****%) of Licensee's gross receipts from Licensee's sale, license, distribution or other exploitation of the IN HER SHOES Wireless Product. + + + +***** The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933. + +Source: GLU MOBILE INC, S-1/A, 3/19/2007 + + + + + + + +(iii) FOX INTELLECTUAL PROPERTY: Consistent with Paragraph 11(b) of the Agreement all music developed and used in connection with the "IN HER SHOES" Wireless Product shall be owned exclusively by Fox. + +(b) "IDIOCRACY": Consistent with Paragraph 1(a)(ii), Exhibit A is amended to include the Property "Idiocracy" as a Targeted Release. Licensee shall develop the following Wireless Product in conjunction with "Idiocracy": one (1) game entitled "OW, MY ##@@@s" ("IDIOCRACY Wireless Product"). + +(i) "IDIOCRACY" GUARANTEE AND ROYALTY: There shall be no Individual Property guarantee attributable to the targeted Release "IDIOCRACY". Licensee may recoup the guarantee Forfeiture Payment (as defined in Paragraph 3 of this Amendment below) from the sales of the IDIOCRACY Wireless Product. At such time that ***** percent (*****%) of the Guarantee Forfeiture Payment is recouped by Licensee, Fox shall earn and Licensee shall pay to Fox Royalties at the rate of ***** percent (*****%) of Licensee's gross receipts from Licensee's sale, license, distribution or other exploitation of the IDIOCRACY Wireless Product. + +(c) "ICE AGE 2": + +(i) "ICE AGE 2" WIRELESS PRODUCTS: Licensee shall develop and distribute the following Wireless Products in connection with the property "ICE AGE 2": (i) 1 Java Game; (ii) 1 Java Application ('Screensaver') where feasible; (iii) up to 5 MMS; (iv) up to 10 Wallpapers; (v) and up to 5 Voicetones ("ICE AGE 2 Wireless Products") in each of the following five (5) languages: English, French, German, Italian, Spanish, with Portuguese, Greek, Dutch and Swedish to be made available where practicable. Licensee shall have the non-exclusive right and license to develop and distribute ICE AGE 2 Wireless Products during the Term of the Agreement for all Wireless Products set forth in this Paragraph 2(c) except the Game, for which Licensee shall have the exclusive right and license to develop and distribute until December 31, 2006. For the avoidance of doubt, Licensee's right and license to develop and distribute the Game in connection with the Property "ICE AGE 2" shall become non-exclusive after December 31, 2006. + +(A) "ICE AGE 2" RESERVATION OF RIGHTS: Fox hereby reserves the right to develop, publish and/or distribute (or grant a third party the right to develop, publish, and/or distribute) any wireless products or wireless content or any nature which may be derived from the property "ICE AGE 2". Notwithstanding the foregoing, in no event will Fox develop, publish and/or distribute games derived from the Property "ICE AGE 2" prior to January 1, 2007. + +(ii) "ICE AGE 2" GUARANTEE AND ROYALTY: In addition to any outstanding Guarantee payments which Licensee shall pay to Fox as set forth in Paragraph 3 of this Amendment below, Licensee shall pay to Fox a minimum recoupable guarantee of ***** dollars (US$*****) on or before ***** ("ICE AGE 2 Guarantee"), and + + + +***** The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933. + +Source: GLU MOBILE INC, S-1/A, 3/19/2007 + + + + + + + +Fox shall earn, and Licensee shall pay the applicable Major Release Royalties as set forth in Paragraph 7(a)(i) of the Agreement in connection with the property "ICE AGE 2". For the avoidance of doubt, there shall be no cross- collateralization of the Royalties collected from Licensee's sale, license, distribution or other exploitation of the Wireless Products derived from the Property "ICE AGE 2", with the Royalties collected from any other Wireless Products released by Licensee under this Agreement. + +(d) "KINGDOM OF HEAVEN" VIDEO RIGHTS: + +(i) Exhibits A and C are amended to replace "Untitled Ridley Scott Film" with "KINGDOM OF HEAVEN." Exhibit C is further amended to include the KOH Video Clips as defined in Paragraph 3(b) below, with the minimum number of clips to be determined by Fox. + +(ii) Paragraph 1(a) of the Agreement is amended to provide that Fox grants Licensee a worldwide, exclusive (except as otherwise may be provided in the Agreement), non-transferable right and license to distribute video clips for the property "KINGDOM OF HEAVEN" ("KOH Video Clips"). Notwithstanding the foregoing, Fox retains the right to develop and distribute promotional KOH Video Clips for the purpose of marketing the Property and DVD, which shall consist of different video clips than those developed for Licensee's distribution. Licensee's term of exclusivity with respect to the KOH Video Clips shall expire on October 29, 2005, and Licensee's right and license to distribute the KOH Video Clips shall expire twelve (12) months after the initial theatrical release of the Property "KINGDOM OF HEAVEN". Fox shall produce the KOH Video Clips, and Licensee shall reimburse Fox for all production costs associated with such production of the KOH Video Clips, which costs may not be used by Licensee to recoup Licensee's Guarantee payable to Fox under the Agreement. + +(iii) Paragraph 7 of the Agreement is amended to provide that with respect to the KOH Video Clips, Fox shall be entitled to receive an amount equal to ***** percent (*****%) of ***** percent (*****%) of the Gross Receipts derived from the distribution of the KOH Video Clips from the first dollar Licensee earns ("KOH Video Clips Revenue"). With respect to KOH Video Clips which Licensee distributes to VGSL, VGSL will remit directly to Fox, Fox's contractual share (pursuant to the VGSL Agreement ) of such VGSL Revenue. Fox will remit all VGSL Revenue to Licensee and such VGSL Revenue shall be treated as Gross Receipts for the purpose of this Agreement, and pursuant to this Amendment, Licensee shall remit to Fox the KOH Video Clips Revenue derived from the VGSL Revenue. The KOH Video Clips Revenue remitted by Licensee to Fox may not be used by Licensee to recoup the Individual Property Guarantee for "KINGDOM OF HEAVEN" as set forth in Paragraph 6(b)(i) of the Agreement. + +3. GUARANTEE PAYMENT: Consistent with paragraph 15(c) of the Agreement, Licensee shall forfeit the Guarantee paid to date of ***** dollars + + + +***** The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933. + +Source: GLU MOBILE INC, S-1/A, 3/19/2007 + + + + + + + +(US$*****), and shall immediately pay the remaining Guarantee of ***** dollars (US$*****), equaling a total Guarantee payment by Licensee to Fox of ***** dollars (US$*****) ("Guarantee Forfeiture Payment"). The Guarantee Forfeiture Payment may be recouped from Licensee's sales of the IN HER SHOES Wireless Product and the IDIOCRACY Wireless Product, as set forth in Paragraphs 2(a)(ii) and 2(b)(i) of this Amendment. Furthermore, pursuant to Paragraph 2(c)(ii) of this Amendment, Licensee shall pay to Fox an additional minimum recoupable guarantee of ***** dollars (US$*****). + +4. DIRECT-TO-CONSUMER DISTRIBUTION: Fox hereby reserves the right to distribute all Wireless Products through Fox's direct-to-consumer distribution channels, for which Fox shall retain a Distribution Fee as defined in Paragraph 4(a) of this Amendment. + +(a) DISTRIBUTION FEE FOR DIRECT-TO-CONSUMER DISTRIBUTION: Should Fox or its assigns choose to distribute the Wireless Products through Fox's and its assigns' direct-to-consumer distribution channels, Fox or its assigns shall deduct a percentage of Fox's Gross Receipts (defined as monies received by or credited to Fox or its assigns from Fox's or its assigns' direct-to-consumer distribution channels, for the download of the Wireless Products by end users, or the sale or download of Wireless Products to end users) collected from the sale of such Wireless Products ("Distribution Fee") in the amount of ***** percent (*****%) of Fox's Gross Receipts. After Fox or its assigns deducts its Distribution Fee, it shall remit the remainder to Licensee and Licensee shall pay to Fox or its assigns or such other party as Fox or its assigns may designate in writing, Royalties in the amounts set forth in the Agreement or this Amendment. + +5. MUTUTAL RELEASE: With the exception of Licensee's Royalties payment obligations with respect to all Wireless Products released as of the date of this Amendment, and the obligations set forth in this Amendment, neither party shall have any further obligation under the Agreement, and all claims arising under the Agreement shall be mutually released. + + + +***** The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933. + +Source: GLU MOBILE INC, S-1/A, 3/19/2007 + + + + + + + +By signing in the places indicated below, the parties hereto accept and agree to all of the terms and conditions hereof. + + + +Glu Mobile, Inc. f/k/a Sorrent, Inc. Fox Mobile Entertainment, Inc. ("Fox") ("Licensee") By: /s/ Paul Zuzelo By: /s/ Jamie Samson Name: Paul Zuzelo Jamie Samson Its: Chief Administrative Officer Its: Senior Vice President Date: November 18, 2005 Date: 11/18/05 + +Source: GLU MOBILE INC, S-1/A, 3/19/2007 \ No newline at end of file diff --git a/full_contract_txt/GluMobileInc_20070319_S-1A_EX-10.09_436630_EX-10.09_Content License Agreement3.txt b/full_contract_txt/GluMobileInc_20070319_S-1A_EX-10.09_436630_EX-10.09_Content License Agreement3.txt new file mode 100644 index 0000000000000000000000000000000000000000..c3bc839a26010c00ff5af3a26245a0c150fb8166 --- /dev/null +++ b/full_contract_txt/GluMobileInc_20070319_S-1A_EX-10.09_436630_EX-10.09_Content License Agreement3.txt @@ -0,0 +1,49 @@ +AMENDMENT NO. 2 + + + +Dated as of March 27, 2006 + + + +Reference is hereby made to that certain fully executed Wireless Content License Agreement Number 12965 dated as of December 16, 2004, as amended November 11, 2005, ("Agreement"), between Fox Mobile Entertainment, Inc. ("Fox"), as Administrator for Twentieth Century Fox Film Corporation ("Trademark Licensor") and Glu Mobile, Inc. f/k/a Sorrent, Inc. ("Licensee"). + +The parties agree to modify the Agreement as follows: + +A. "ICE AGE 2" a/k/a "ICE AGE: THE MELTDOWN" AUDIO AND VIDEO WIRELESS PRODUCTS: + +1. Grant of Rights: Fox grants to Licensee a limited, non-exclusive right and license to distribute the following Wireless Products in connection with the Property "ICE AGE: THE MELTDOWN" in the United States: (A) 2 Scrat voicetones; (B) 2 John Leguizamo voicetones; and (C) 3 premium videos. Fox also grants Licensee a limited, non-exclusive right and license to distribute the following Wireless Products in connection with the Property "ICE AGE 2" outside of the United States: (A) 4 Scrat voicetones; (B) 1 John Leguizamo voicetone; and (C) 3 premium videos. (collectively, "IA2 Audio and Video Wireless Products") + +B. IA 2 AUDIO AND VIDEO WIRELESS PRODUCTS ROYALTY: + +1. Royalty: In consideration of the rights granted to Licensee pursuant to this Amendment 2, Licensee shall pay to Fox, or such other party as Fox may designate in writing, a royalty in the following amount: + +(a) From the first unit sold, Fox shall earn a royalty at the rate of ***** percent (*****%) of Licensee's Gross Receipts (as defined in the Agreement) from Licensee's sale and distribution of the IA2 Audio and Video Wireless Products. ("IA2 Audio and Video Royalty"). For the avoidance of doubt, Licensee may not recoup any portion of the Ice Age 2 Guarantee (as defined in Amendment 1) through its sale and distribution of the IA2 Audio and Video Wireless Products. + +2. VGSL and other CSP Accounting: All VGSL and other CSP payments remitted directly to Fox pursuant to the VGSL Agreement and other CSP agreements with respect to the IA Audio and Video Wireless Products shall be treated in the same manner as set forth in Paragraphs 7(b)(ii) and 7(b)(iii) of the Agreement. + + + +***** The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933. + +Source: GLU MOBILE INC, S-1/A, 3/19/2007 + + + + + + + +3. No Direct-to-Consumer Distribution Royalty: Licensee shall not be entitled to receive a share of any revenues and shall have no claim to any revenues earned and collected by Fox, or a third-party Fox designates, for the IA2 Audio and Video Wireless Products which Fox distributes through its and its assigns' direct-to-consumer distribution channels. + +Except as herein expressly amended or by necessary implication modified by this Amendment, the Agreement in all other respects is hereby ratified and shall continue in full force and effect. + +By signing in the places indicated below, the parties hereto accept and agree to all of the terms and conditions hereof. + + + + + +Glu Mobile, Inc. f/k/a Sorrent, Inc. ("Licensee") Fox Mobile Entertainment, Inc. ("Fox") By: /s/ PAUL ZUZELO By: /s/ JAMIE SAMSON Jamie Samson Name: Paul Zuzelo Its: Senior Vice President Its: CAO Date: March 28, 2006 Date: 3/28/06 + +Source: GLU MOBILE INC, S-1/A, 3/19/2007 \ No newline at end of file diff --git a/full_contract_txt/GluMobileInc_20070319_S-1A_EX-10.09_436630_EX-10.09_Content License Agreement4.txt b/full_contract_txt/GluMobileInc_20070319_S-1A_EX-10.09_436630_EX-10.09_Content License Agreement4.txt new file mode 100644 index 0000000000000000000000000000000000000000..aad7c5dd2b9a53a7acff20901044f2bfe16360f0 --- /dev/null +++ b/full_contract_txt/GluMobileInc_20070319_S-1A_EX-10.09_436630_EX-10.09_Content License Agreement4.txt @@ -0,0 +1,25 @@ +AMENDMENT NO. 3 + +Dated as of February 19, 2007 + +Reference is hereby made to that certain fully executed Wireless Content License Agreement Number 12965 dated as of December 16, 2004, as amended November 11, 2005 and March 27, 2006 (the "Agreement"), between Fox Mobile Entertainment, Inc. ("Fox"), as Administrator for Twentieth Century Fox Film Corporation, and Glu Mobile Inc. ("Licensee"). + +The parties agree to modify the Agreement as follows: + +1. EXTENSION OF TERM: The first paragraph of Section 4 of the Agreement is hereby deleted in its entirety and replaced with the following: + + "TERM: The rights granted hereunder shall be effective as of the Effective Date and shall expire on December 31, 2006 (the "Term"); provided, however, that with respect to each Property, including Robots, Kingdom of Heaven, Mr. and Mrs. Smith, In Her Shoes, Idiocracy (Oww My Balls) and Ice Age II, all right and licenses granted herein will continue in full force and effect until March 31, 2008." + +2. NOTICE PROVISION: The notice information for Licensee in Section 17(a) of the Agreement shall be amended such that "Paul Zuzelo" is deleted and replaced with "General Counsel", and such that the email address for Paul Zuzelo is deleted. + +Except as herein expressly amended or by necessary implication modified by this Amendment, the Agreement in all other respects is hereby ratified and shall continue in full force and effect. + +By signing in the places indicated below, the parties hereto accept and agree to all of the terms and conditions hereof. Glu Mobile Inc. ("Licensee") Fox Mobile Entertainment, Inc. ("Fox") + + + +By: /s/ Albert A. Pimentel By: /s/ Jamie Samson + + Name: Albert A. Pimentel Name: Jamie Samson Its: EVP and CFO Its: Senior Vice President Date: Date: + +Source: GLU MOBILE INC, S-1/A, 3/19/2007 \ No newline at end of file diff --git a/full_contract_txt/GopageCorp_20140221_10-K_EX-10.1_8432966_EX-10.1_Content License Agreement.txt b/full_contract_txt/GopageCorp_20140221_10-K_EX-10.1_8432966_EX-10.1_Content License Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..72c6cc8e5fc7fa6944d7bd8169cd9de97e5a75f4 --- /dev/null +++ b/full_contract_txt/GopageCorp_20140221_10-K_EX-10.1_8432966_EX-10.1_Content License Agreement.txt @@ -0,0 +1,251 @@ +CONFIDENTIAL + + PSiTECHCORPORATION WEBSITE CONTENT LICENSE AGREEMENT This Content License Agreement ("Agreement"), dated as of Feb 10, 2014 (the "Effective Date"), is by and between PSiTech Corporation, a BVI Corporation, with offices located at 303, 3rdFl, St. Georges Bldg, 2 Ice House St, Central, Hong Kong("Licensor"), and Empirical Ventures, Inc., a Nevada corporation with offices located at 100, 40 Lake Bellevue Dr, Bellevue, WA("Licensee"). WHEREAS, Licensee owns, operates and controls the Licensee Site (as defined below); WHEREAS, Licensor owns or otherwise has the right to license the Licensed Content (as defined below); WHEREAS, Licensee wishes to make Licensed Content accessible on the Licensee Site; and WHEREAS, Licensor is willing to license the Licensed Content to Licensee, subject to all terms and conditions set forth herein. NOW, THEREFORE, in consideration of the mutual covenants, terms and conditions set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: 1. Definitions. For purposes of this Agreement, the following terms have the following meanings. Other terms defined in the body of the Agreement shall have the meanings so given. "Affiliate" of a Person means any other Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such Person. The term "control" (including the terms "controlled by" and "under common control with") means the direct or indirect ownership of more than fifty percent (50 %) of the voting securities of a Person. "Confidential Information" means any information that is treated as confidential by a party, including, without limitation, trade secrets, technology, information pertaining to business operations and strategies, and information pertaining to customers, pricing and marketing, in each case to the extent it is: (a) if in tangible form, marked as confidential; or otherwise, identified at the time of disclosure as confidential, or (b) would be considered as confidential information by one who is reasonably knowledgeable and experienced in the field to which the information relates. With respect to each party, the terms of this Agreement are Confidential Information of the other party. + +1 + +Source: GO-PAGE CORP, 10-K, 2/21/2014 + + + + + + + +"Content Item" means each discrete creative work (for example, article, photograph or video), as designated by the Licensor, that is included in the Licensed Content. "End User" means each natural person that has access to Licensed Content on the Licensee Site. "Gross Revenues" means the gross revenues received by the Licensee and derived from or in connection with the Licensee Site, from any sources whatsoever, including but not limited to fees for access to and use of the Licensee Site and advertising, sponsorship, marketing and other paid-for placements, andmaintenance, support and other services. "Law" means any statute, law, ordinance, regulation, rule, code, order, constitution, treaty, common law, judgment, decree, other requirement or rule of law of any federal, state, local or foreign government or political subdivision thereof, or any arbitrator, court or tribunal of competent jurisdiction. "Licensed Content" means those materials and content identified in Schedule 2, as may be amended by the parties as set forth herein. "Licensee Site" means the website operated by Licensee on or through which the Licensed Content is displayed. "Losses" means losses, damages, liabilities, deficiencies, actions, judgments, interest, awards, penalties, fines, costs or expenses of whatever kind, including reasonable attorneys' fees and the cost of enforcing any right to indemnification hereunder and the cost of pursuing any insurance providers.] "Mark" means any trademark, trade name, service mark, design, logo, domain name or other indicator of the source or origin of any product or service. Licensor's Mark as used in Section 3.3shall mean the Mark "Go­Page", either in standard character or stylized format. "Multi­level Marketing" or "MLM" means a direct sales or marketing strategy in which the sales force is compensated both for sales they personally generate and for sales made by sales people they recruit. "Person" means an individual, corporation, partnership, joint venture, limited liability entity, governmental authority, unincorporated organization, trust, association or other entity. "Related Media" means those mobile sites, mobile applications (apps), widgets, gadgets, RSS feeds, e-mail newsletters and other content delivery media owned, operated and controlled by Licensee. "Territory" means Canada, United States and Mexico. + +2 + +Source: GO-PAGE CORP, 10-K, 2/21/2014 + + + + + + + +2. Delivery of Content. During the Term, except as otherwise set forth herein, Licensor shall make available to Licensee the Licensed Content for display on the Licensed Site. Licensor reserves the right to modify the Licensed Content in its reasonable discretion. Licensor shall notify Licensee of any such modifications. Licensor is not liable for delays or failures of delivery beyond its reasonable control. Licensor's sole responsibility for any such delay or failure is to deliver or re-deliver the relevant Licensed Content as soon as reasonably possible. 3. License Grants. 3.1 Content License. Subject to Licensee's on­going compliance with Section 3.2 and all other terms and conditions of this Agreement, Licensor grants to Licensee an exclusive (save for rights reserved to Licensor hereunder), non-transferable (except as provided in Section 11.7) and non- sublicensable license, during the License Term, to reproduce, perform, display, transmit and distribute the Licensed Content on the Licensee Siteand Related Media intended solely for use by End Usersin the Territory within the scope set forth in Schedule 1 (License Scope), which is attached hereto and incorporated herein by this reference. The foregoing includes the right to permit End Users to access the Licensed Content solely for their own end use and not for redistribution and otherwise subject to Terms of Use that comply with Section 4.3. Licensee is not granted any right to, and shall not, permit any other use of the Licensed Content by End Users, or any use of the Licensed Content by any other Person (including Licensee's Affiliates). 3.2 Content License Restrictions. The license granted in Section 3.1 is subject to the following: (a) Licensee shall not include Licensed Content on the Licensee Site or any Related Media other than as expressly permitted herein and in accordance with all terms and conditions of Section 4. (b) Licensee shall not make the Licensed Content available, or otherwise use the Licensed Content, except as expressly licensed pursuant to Section 3.1. Any use by Licensee of the Licensed Content on any other website, mobile site or application or other media of Licensee other than the Licensee Site and Related Media as expressly provided herein requires a separate written agreement between Licensor and Licensee, and Licensor has no obligation to enter into any such agreement. (c) Licensee shall not permit the Licensed Content to be, or appear to be, reproduced, displayed or distributed on, as part of or in connection with any website or other online (including mobile) area other than the Licensee Site and Related Media, whether by framing, in-line linking, appearing in a new window or otherwise. (d) Licensee shall not edit, alter, modify, combine with other content or create any derivative works of the Licensed Content without the prior written consent of Licensor. (e) Licensee shall not display, and shall not permit others to display, on the Licensee Site any images or content that is or could be reasonably construed to be offensive, pornographic, defamatory or libelous, infringing the intellectual property rights of any third party, promoting terrorism or other unlawful violence, or for any other purpose that violates applicable Law. + +3 + +Source: GO-PAGE CORP, 10-K, 2/21/2014 + + + + + + + +(f) If Licensor instructs Licensee to delete or make inaccessible any Content Item because such Content Item may contain errors, is or could be subject to a third-party claim or for any other good faith reason, Licensee shall comply with such instruction as promptly as reasonably possible and, in any case, within twenty-four (24) hours. The License Term for each such Content Item terminates at the end of such 24-hour period. All uses of the Licensed Content that do not comply fully with the provisions of this Section 3.2 shall for all purposes be deemed beyond the scope of the license granted hereunder. Any violation of this Section 3.2 by Licensee shall be a material breach of this Agreement for which Licensor may terminate this Agreement as set forth in Section 6.2(a). 3.3 Trademark License. (a) Licensor grants to Licensee a limited, non-exclusive, non-transferable (except as provided in Section 11.7) and non-sublicensable royalty-free license during the Term to those of Licensor's Marks designated by Licensor from time to time to: (i)display such Marks on the Licensee Site: (x) with the Licensed Content to provide source attribution; or (y) as links to the Licensed Content; (ii)comply with its express obligations under this Agreement; and (iii)advertise, market and promote the availability of the Licensed Content or the Licensee Site and identify the Licensor as a content provider; provided, that all uses of Licensor's Marks shall require Licensor's prior written approval. + +4 + +Source: GO-PAGE CORP, 10-K, 2/21/2014 + + + + + + + + (b) Licensee shall use the Marks solely in accordance with Licensor's trademark usage guidelines and quality control standards as the same may be updated from time to time by Licensor. If Licensor notifies Licensee that any use does not so comply, Licensee shall immediately either remedy the use to the satisfaction of Licensor or terminate such use. Licensee shall not use, register or attempt to register in any jurisdiction any Mark that is confusingly similar to or incorporates any of the Licensor's Marks. All uses of the Licensor's Marks, and all goodwill associated therewith, shall inure solely to the benefit of Licensor. 3.4 Reservation of Rights. Neither this Agreement nor the licenses granted hereunder convey any ownership right in any of the Licensed Content, Licensor's Marks or other materials provided by or on behalf of Licensor under this Agreement. Except for the express licenses granted in this Agreement, all right, title and interest in and to the Licensed Content and Licensor's Marks are and will remain with Licensor and its licensors. 4. Licensee Obligations. 4.1 Content Display. Throughout the Term, Licensee shall provide the Licensed Content on the Licensee Site and Related Media solely to the extent of and within the scope of the license granted in this Agreement and otherwise in accordance with the following: (a) Licensee shall present the Licensed Content solely in accordance with the specifications and restrictions set forth in Schedule 4. (b) Licensee shall update Licensed Content on the Licensee Site and Related Media promptly upon receipt of such updates from the Licensor. (c) Licensee shall present each Content Item solely in its entirety (without any addition, modification or deletion). (d) Licensee shall remove the Licensed Content from the Licensee Site and Related Media immediately upon the expiration or earlier termination of the License Term for such Content Item. 4.2 Required Notices. Licensee shall display with each Content Item the appropriate copyright and trademark notices and any other source attribution required by Licensor. Licensee shall not alter, remove or obstruct any such notices or attribution included with any Content Item as delivered by Licensor. + +5 + +Source: GO-PAGE CORP, 10-K, 2/21/2014 + + + + + + + +4.3 Terms of Use. Throughout the Term, Licensee shall have in effect and maintain accessible on the Licensee Site and Related Media website terms of use ("Terms of Use") and privacy policy ("Privacy Policy") on which use of the Licensee Site and Related Media, including the Licensed Content, is expressly conditioned, and which in form and substance are reasonably acceptable to Licensor. 4.4 Content Hosting and Support; User Complaints. Throughout the Term, Licensee shall host, operate, maintain and make accessible to End Users the Licensed Content on the Licensee Site. The service level standards and procedures used by Licensee with respect to the Licensed Content, including but not limited to those regarding End User requests and communications, will be consistent with those it employs with respect to other content on the Licensee Site. Without limiting the foregoing, if Licensee receives any notice claiming that the Licensed Content infringes or otherwise violates any intellectual property or other third-party right, Licensee shall: (a) immediately notify Licensor in writing (which may include e-mail), including such detail as is available and necessary for Licensor to evaluate and address such complaint; and (b) fully cooperate with Licensor in addressing such claims. 5. Fees and Payment. 5.1 License Fees. In consideration of the licenses granted and other undertakings by Licensor hereunder, Licensee shall pay Licensor a License Fee in the amount of two hundred thousand dollars (US$200,000) ("License Fee"). The License Fee shall be due and payable as follows: (a) US$50,000 upon signing the Memorandum of Understanding ("MOU") between the Parties (provided, however, that Licensor hereby acknowledges receipt of this portion of the License Fee); (b) US$50,000 upon signing of this Agreement; and (c) US$100,000 upon on or before March 28, 2014. The License Fees are non-cancellable and non-refundable. + +6 + +Source: GO-PAGE CORP, 10-K, 2/21/2014 + + + + + + + +5.2 In addition to the License Fee payable in accordance with Section 5.1, Licensee shall pay a royalty ("Royalty") to Licensor according to the following schedule ("Royalty Schedule"): Subscribers Royalty Payable as Percentage of Gross Revenue 0 - 5000 6.25% 5001 - 7500 6.75% 7501 - 10,000 7.00% 10,001 - 15,000 8.00% 15,001 - 20,000 8.50% 20,001 - 25,000 9.25% 25,001+ 9.75% 5.3 Reports and Payment (a) Not later than the fifteenth (15th) calendar day of each calendar quarter (or the first business day thereafter), Licensee shall deliver to Licensor (i) a report accurately showing Gross Revenues of the Licensee for the previous quarter, the number of Subscribers on the last day of such previous quarter and the amount of Royalties due thereon, and (ii) payment of the Royalties payable for such previous quarterbased on the Subscriber information as reflected in the report. All payments under this Agreement shall be made in US dollars. (b) If Licensee fails to make any payment when due: (i)Licensor shall have the right to terminate this Agreement and all licenses granted hereunder as provided in Section 6.2; and] (ii)If any License Fees or Royalties are more than ten (10) days past due, Licensor may assess interest on the past due amount at the rate of one and a half percent (1.5%) per month or, if lower, the highest rate permitted under applicable Law. + +7 + +Source: GO-PAGE CORP, 10-K, 2/21/2014 + + + + + + + +5.4 Taxes. All License Fees are exclusive of sales, use, value added, and similar taxes, which are the responsibility of Licensee. If Licensee is required under any applicable Law to withhold any amount from such payment, Licensee shall hold such funds in trust for Licensor and shall cooperate with Licensor in completing and filing all forms and other documents required for the release of the funds withheld for payment to Licensor. 5.5 Audit Right. During the Term and for five (5) years thereafter, Licensee shall maintain complete and accurate books and records regarding its business operations relevant to the calculation of License Fees and any other information required to be reported to Licensor under this Agreement. Licensee shall make such books and records, and appropriate personnel, available during normal business hours for audit by Licensor or its authorized representative; provided that Licensor shall: (a) provide Licensee with reasonable prior notice of any audit; (b) undertake an audit no more than once per calendar year, unless a prior audit has disclosed a balance due; and (c) conduct or cause to be conducted such audit in a manner designed to minimize disruption of Licensee's normal business operations. Licensor may take copies and abstracts of materials audited. Licensor will pay the cost of such audits unless an audit reveals a discrepancy in payment or reporting of five percent (5%) or more, in which case the Licensee shall reimburse the Licensor for the reasonable cost of the audit. Licensee shall immediately upon notice from Licensor pay Licensor the amount of any underpayment revealed by the audit, including interest calculated in accordance with Section 5.3(b)(ii), together with any reimbursement pursuant to the preceding sentence. + +8 + +Source: GO-PAGE CORP, 10-K, 2/21/2014 + + + + + + + + 6. Term and Termination. 6.1 Term. The initial term of this Agreement commences as of the Effective Date and, unless terminated earlier pursuant to any express provision of this Agreement, shall continue until five (5) years following the Effective Date (the "Initial Term"). Thereafter, this Agreement shall renew automatically for one (1) additional three (3) year period (the "Renewal Term" and collectively, together with the Initial Term, the "Term") unless either party provides the other with written notice of non-renewal at least ninety (90) days before the expiration of the Initial Term]. 6.2 Termination. (a) Either party may terminate this Agreement, effective upon written notice to the other party, if the other partymaterially breaches this Agreement, and such breach is incapable of cure or, if capable of cure, (i) fails to commence a plan of action approved by Licensor to cure such breach within thirty (30) days, or (ii) fails to cure such breach within ninety (90) days after receiving written notice thereof, in either case after receiving notice of the breach. Provided, however, that if the breach giving rise to the termination right under this Section 6.2is non-payment of License Fees or Royalties, the cure period shall be ten (10) days. (b) Either party may terminate this Agreement by written notice to the other party if the other party: (i) becomes insolvent or admits its inability to pay its debts generally as they become due; (ii) becomes subject, voluntarily or involuntarily, to any proceeding under any domestic or foreign bankruptcy or insolvency law, which is not fully stayed within ten (10) business days or is not dismissed or vacated within sixty (60) days after filing; (iii) is dissolved or liquidated or takes any corporate action for such purpose; (iv) makes a general assignment for the benefit of creditors; or (v) has a receiver, trustee, custodian or similar agent appointed by order of any court of competent jurisdiction to take charge of or sell any material portion of its property or business. 6.3 Effect of Expiration or Termination. Upon any expiration or termination of this Agreement: (a) All licenses granted under this Agreement shall also terminate, and Licensee shall immediately delete from its systems and servers all Licensed Content, Licensor's Marks and any other materials provided by Licensor. Upon Licensor's written request, Licensee shall promptly provide Licensor with written certification of such deletion. (b) Licensee shall promptly pay all unpaid License Fees that relate to the period prior to the effective date of expiration or termination. + +9 + +Source: GO-PAGE CORP, 10-K, 2/21/2014 + + + + + + + +(c) If termination is by Licensor pursuant to Section 6.2(a), all License Fees that would have been payable through the end of the then- current Term had the Agreement not been terminated early shall become immediately due and payable. (d) If termination is by Licensee pursuant to Section 6.2(a), Licensee shall be relieved of any obligation to pay License Fees that relate to the period after the effective date of termination. (e) Each party shall (i) return to the other party all documents and tangible materials (and any copies) containing, reflecting, incorporating or based on the other party's Confidential Information, (ii) permanently erase all of the other party's Confidential Information from its computer systems and (iii) certify in writing to the other party that it has complied with the requirements of this Section 6.3(e). 6.4 Surviving Terms. The provisions set forth in the following Sections, and any other right or obligation of the parties in this Agreement that, by its nature, should survive termination or expiration of this Agreement, will survive any expiration or termination of this Agreement: Section 3.4, Section 5.5,Section 6.3, this Section 6.4, Section 7, Section 8, Section 9, Section 10 and Section 11. 7. Representations and Warranties. 7.1 Mutual Representations and Warranties. Each party represents and warrants to the other party that: (a) it is duly organized, validly existing and in good standing as a corporation or other entity as represented herein under the laws and regulations of its jurisdiction of incorporation, organization or chartering; (b) it has the full right, power and authority to enter into this Agreement, to grant the rights and licenses granted hereunder and to perform its obligations hereunder; (c) the execution of this Agreement by its representative whose signature is set forth at the end hereof has been duly authorized by all necessary corporate action of the party; and (d) when executed and delivered by such party, this Agreement will constitute the legal, valid and binding obligation of such party, enforceable against such party in accordance with its terms. + +10 + +Source: GO-PAGE CORP, 10-K, 2/21/2014 + + + + + + + +7.2 DISCLAIMER. EXCEPT FOR THE EXPRESS WARRANTIES IN THIS AGREEMENT, (A) EACH PARTY HEREBY DISCLAIMS ANY WARRANTY, WHETHER EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, UNDER THIS AGREEMENT; AND (B) LICENSOR SPECIFICALLY DISCLAIMS ALL IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE AND NON- INFRINGEMENT. 8. Indemnification. 8.1 By Licensor. Licensor shall indemnify, defend and hold harmless Licensee against all Losses arising out of or resulting from any claim, suit, action or proceeding (each, an "Action") by an unaffiliated third party related to or arising out of a claim that the Licensed Content or Licensor's Marks, or Licensee's use thereof solely in compliance with this Agreement, infringes a copyright or trademark right of any third party registered in any country in the Territory. The foregoing obligation shall not apply to Losses for which Licensee is required to indemnify Licensor pursuant to Section 8.2. 8.2 By Licensee. Licensee shall indemnify, defend and hold harmless Licensor against all Losses arising out of or resulting from any Action by a third party related to or arising out of: (a) the Licensee Site or Related Media, including any material displayed or services provided thereon but excluding Licensed Content and Marks used in accordance with this Agreement; (b) Licensee's use of the Licensed Content and/or Licensor's Marks in a manner not permitted by this Agreement (including Licensee's continued use of any Content Item in violation of Section 4.1(d) or any of Licensor's Marks after Licensor has directed Licensee to cease using any such Marks; or (c) Licensee's failure to comply fully with Section 4.3. 8.3 Indemnification Procedure. The indemnified party shall promptly notify the indemnifying party in writing of any Action and cooperate with the indemnifying party at the indemnifying party's sole cost and expense. The indemnifying party shall not settle any Action in a manner that adversely affects the rights of the indemnified party without the indemnified party's prior written consent, which shall not be unreasonably withheld or delayed. The indemnified party may retain counsel of its choice to observe the proceedings at its own cost and expense. 9. LIMITATIONS OF LIABILITY. 9.1 No Consequential or Indirect Damages. NEITHER PARTY SHALL BE LIABLE UNDER OR IN CONNECTION WITH THIS AGREEMENT FOR INDIRECT, INCIDENTAL, CONSEQUENTIAL, LIQUIDATED, SPECIAL OR EXEMPLARY DAMAGES OR PENALTIES, INCLUDING WITHOUT LIMITATION, LOSSES OF BUSINESS, REVENUE OR ANTICIPATED PROFITS, REGARDLESS OF WHETHER SUCH DAMAGE WAS FORESEEABLE AND WHETHER LICENSOR HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. + +11 + +Source: GO-PAGE CORP, 10-K, 2/21/2014 + + + + + + + +9.2 Cap on Monetary Damages. EACH PARTY'S LIABILITY ARISING OUT OF OR RELATED TO THIS AGREEMENT WILL NOT EXCEED AN AMOUNT EQUAL TO THE AGGREGATE AMOUNTS PAID OR PAYABLE TO LICENSOR IN THE TWELVE (12) MONTHS PRECEDING THE COMMENCEMENT OF THE CLAIM. 9.3 Exceptions. The provisions of Section 9.1 and Section 9.2 will not apply to limit the Licensee's indemnification obligations under Section 8.2, or in the case of Licensee's gross negligence or wilful misconduct. 10. Confidentiality. Obligation of Confidentiality. Each party (the "Recipient") acknowledges that in connection with this Agreement such party may gain access to Confidential Information of the other party (the "Disclosing Party"). As a condition to being furnished with Confidential Information, the Recipient agrees, during the Term and for five (5) years thereafter. Confidential Information excludes such information required to be disclosed pursuant to federal or state securities rules and regulations, including but not limited to, disclosure of the Company in their filings with the Securities and Exchange Commission: to 10.1 (a) not use the Disclosing Party's Confidential Information other than in connection with performing its obligations under this Agreement and shall make no use of any such Confidential Information, directly or indirectly, in any manner to the detriment of the Disclosing Party or in order to obtain any competitive benefit with respect to the Disclosing Party; and (b) maintain the Disclosing Party's Confidential Information in confidence and, subject to Section 10.2 below, not disclose any of the Disclosing Party's Confidential Information without the Disclosing Party's prior written consent; provided, however, that Recipient may disclose the Disclosing Party's Confidential Information to its officers, employees, consultants and legal advisors ("Representatives") who: (i) have a "need to know" for purposes of the Recipient's performance under this Agreement, (ii) have been apprised of this restriction; and (iii) are themselves bound by nondisclosure restrictions at least as restrictive as those set forth in this Section 0. The Recipient shall be responsible for ensuring its Representatives' compliance with, and shall be liable for any breach by its Representatives, of this Section 10. The Receiving Party shall employ the same efforts it uses with respect to its own confidential information to safeguard the Disclosing Party's Confidential Information from use or disclosure to anyone other than as permitted hereby. + +12 + +Source: GO-PAGE CORP, 10-K, 2/21/2014 + + + + + + + +10.2 Exceptions. (a) Confidential Information does not include information of the Disclosing Party that: (i)is already known to the Recipient without restriction on use or disclosure prior to receipt of such information from the Disclosing Party; (ii)is or becomes generally known by the public other than by breach of this Agreement by, or other wrongful act of, the Recipient; or (iii)is received by the Recipient from a third party who is not under any obligation to the Disclosing Party to maintain the confidentiality of such information. (b) If the Recipient becomes legally compelled to disclose any of the Disclosing Party's Confidential Information, the Recipient shall: (i)provide prompt written notice to the Disclosing Party notice so that the Disclosing Party may seek a protective order or other appropriate remedy or waive its rights under this Section 10; and (ii)disclose only the portion of Confidential Information that it is legally required to furnish. If a protective order or other remedy is not obtained, or the Disclosing Party waives compliance, the Recipient shall, at the Disclosing Party's expense, use reasonable efforts to obtain assurance that confidential treatment will be afforded the Confidential Information. + +13 + +Source: GO-PAGE CORP, 10-K, 2/21/2014 + + + + + + + +11. Miscellaneous. 11.1 Further Assurances. Upon a party's reasonable request, the other party shall, at its sole cost and expense, promptly execute and deliver all such further documents and instruments, and take all such further actions, necessary to give full effect to the terms of this Agreement. 11.2 Relationship of the Parties. The relationship between the parties is that of independent contractors. Nothing contained in this Agreement shall be construed as creating any agency, partnership, joint venture or other form of joint enterprise, employment or fiduciary relationship between the parties, and neither party shall have authority to contract for or bind the other party in any manner whatsoever. Public Announcements. Neither party shall issue or release any announcement, statement, press release or other publicity or marketing materials relating to this Agreement or, unless expressly permitted under this Agreement, otherwise use the other party's Marks, in each case, without the prior written consent of the other party, which shall not be unreasonably withheld or delayed; except the provisions of this paragraph excludes such information required to be disclosed pursuant to federal or state securities rules and regulations, including but not limited to, disclosure of the Company in their filings with the Securities and Exchange Commission. 11.3 Notices. All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and addressed to the parties as follows (or as otherwise specified by a party in a notice given in accordance with this Section): + +If to Licensor: Room 303, 3rd Floor, St. George's Building, 2 Ice House Street, Central, Hong Kong Facsimile: (852) 3526 0355 E-mail:angela@sg-cs.com Attention: Angela Jen If to Licensee: 100, 40 Lake Bellevue Dr, Bellevue, WA, 98005 Facsimile: [FAX NUMBER] E-mail: Peter@go-page.com Attention: Peter Schulhof, President + + + +14 + +Source: GO-PAGE CORP, 10-K, 2/21/2014 + + + + + + + + Notices sent in accordance with this Section shall be deemed effectively given: (a) when received, if delivered by hand (with written confirmation of receipt); (b) when received, if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by facsimile or e-mail (in each case, with confirmation of transmission), if sent during normal business hours of the recipient, and on the next business day, if sent after normal business hours of the recipient; or (d) on the third business day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. 11.4 Interpretation. For purposes of this Agreement, (a) the words "include," "includes" and "including" are deemed to be followed by the words "without limitation"; (b) the word "or" is not exclusive; (c) the words "herein," "hereof," "hereby," "hereto" and "hereunder" refer to this Agreement as a whole; (d) words denoting the singular have a comparable meaning when used in the plural, and vice-versa; and (e) words denoting any gender include all genders. Unless the context otherwise requires, references in this Agreement: (x) to sections, exhibits, schedules, attachments and appendices mean the sections of, and exhibits, schedules, attachments and appendices attached to, this Agreement; (y) to an agreement, instrument or other document means such agreement, instrument or other document as amended, supplemented and modified from time to time to the extent permitted by the provisions thereof; and (z) to a statute means such statute as amended from time to time and includes any successor legislation thereto and any regulations promulgated thereunder. The parties intend this Agreement to be construed without regard to any presumption or rule requiring construction or interpretation against the Party drafting an instrument or causing any instrument to be drafted. The exhibits, schedules, attachments and appendices referred to herein are an integral part of this Agreement to the same extent as if they were set forth verbatim herein. 11.5 Headings. The headings in this Agreement are for reference only and do not affect the interpretation of this Agreement. 11.6 Entire Agreement. This Agreement, together with the attached Schedules and any other documents incorporated herein by reference, constitutes the sole and entire agreement of the Parties with respect to the subject matter of this Agreement and supersedes all prior and contemporaneous understandings, agreements, representations and warranties, both written and oral, with respect to such subject matter. 11.7 Assignment. This Agreement is personal to Licensee. Licensee shall not assign or otherwise transfer any of its rights, or delegate or otherwise transfer any of its obligations or performance, under this Agreement, in each case whether voluntarily, involuntarily, by operation of law or otherwise, without Licensor's prior written consent. For purposes of the preceding sentence, and without limiting its generality, any merger, consolidation or reorganization involving Licensee (regardless of whether Licensee is a surviving or disappearing entity) will be deemed to be a transfer of rights, obligations or performance under this Agreement for which Licensor's prior written consent is required. No delegation or other transfer will relieve Licensee of any of its obligations or performance under this Agreement. Any purported assignment, delegation or transfer in violation of this Section 11.7 is void from the outset and shall be of no force or effect. Licensor may freely assign or otherwise transfer all or any of its rights, or delegate or otherwise transfer all or any of its obligations or performance, under this Agreement without Licensee's consent. This Agreement is binding upon and inures to the benefit of the parties hereto and their respective permitted successors and assigns. + +15 + +Source: GO-PAGE CORP, 10-K, 2/21/2014 + + + + + + + +11.8 No Third-Party Beneficiaries. This Agreement is for the sole benefit of the parties hereto and their respective successors and permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other Person any legal or equitable right, benefit or remedy of any nature whatsoever, under or by reason of this Agreement. 11.9 Amendment and Modification; Waiver. No amendment to or modification of this Agreement is effective unless it is in writing and signed by an authorized representative of each party. No waiver by any party of any of the provisions hereof shall be effective unless explicitly set forth in writing and signed by the party so waiving. Except as otherwise set forth in this Agreement, no failure to exercise, or delay in exercising, any rights, remedy, power or privilege arising from this Agreement shall operate or be construed as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. 11.10 Severability. If any term or provision of this Agreement is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction. Upon such determination that any term or other provision is invalid, illegal or unenforceable, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the greatest extent possible. 11.11 Governing Law; Submission to Jurisdiction. This Agreement shall be governed by and construed in accordance with the internal laws of the State of Nevada without giving effect to any choice or conflict of law provision or rule. 11.12 Dispute Resolution. In the event of a dispute arising out of this Agreement, the parties shall first negotiate in good faith in an effort to reach a settlement of the dispute. If having negotiated in good faith, the parties are unable to resolve their dispute, the parties shall submit the dispute to binding arbitration by a single arbitrator. The arbitration shall be governed by the Commercial Rules of Arbitration of the American Arbitration Association. The arbitration shall take place at an agreed location, or if the parties cannot agree on a venue in Reno, Nevada or Vancouver, BC, as determined by the flip of a coin. The arbitrator shall have jurisdiction over the conduct of discovery prior to the hearing. Notwithstanding the foregoing, nothing in this Section 11.13 shall be construed to prohibit either party from seeking appropriate injunctive or other equitable relief in a court of competent jurisdiction. + +16 + +Source: GO-PAGE CORP, 10-K, 2/21/2014 + + + + + + + +11.13 Attorneys' Fees. In the event that any action, suit, or other legal or administrative proceeding is instituted or commenced by either party hereto against the other party arising out of this Agreement, the prevailing party shall be entitled to recover its reasonable attorneys' fees and court costs from the non-prevailing party. 11.14 Counterparts. This Agreement may be executed in counterparts, each of which is deemed an original, but all of which together are deemed to be one and the same agreement. A signed copy of this Agreement delivered by facsimile, e-mail or other means of electronic transmission is deemed to have the same legal effect as delivery of an original signed copy of this Agreement. + +IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written. PSITech Corporation By /s/Cameron Investments Limited Name: Cameron Investments Limited Title: Director + + Empirical Ventures, Inc. By /s/Peter Schulhof Name: Peter Schulhof Title: President + + + +17 + +Source: GO-PAGE CORP, 10-K, 2/21/2014 + + + + + + + + SCHEDULE 1 LICENSE SCOPE + + Display the Licensed Content on the Licensee Site to actual and prospective customers or End-Users located within Canada, the United States or Mexico engaged in any vertical market business except(i) the offer or brokering of vacation home rentals, and (ii) the offering or sale of any products or services using a Multi-level Marketing system. + + + + + +18 + +Source: GO-PAGE CORP, 10-K, 2/21/2014 + + + + + + + + SCHEDULE 2 LICENSED CONTENT The Licensed Content consists of content and images and code. + + + + + +19 + +Source: GO-PAGE CORP, 10-K, 2/21/2014 + + + + + + + +Source: GO-PAGE CORP, 10-K, 2/21/2014 \ No newline at end of file diff --git a/full_contract_txt/GpaqAcquisitionHoldingsInc_20200123_S-4A_EX-10.6_11951677_EX-10.6_License Agreement.txt b/full_contract_txt/GpaqAcquisitionHoldingsInc_20200123_S-4A_EX-10.6_11951677_EX-10.6_License Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..546e645d377566ecdb620204d67080a102231b24 --- /dev/null +++ b/full_contract_txt/GpaqAcquisitionHoldingsInc_20200123_S-4A_EX-10.6_11951677_EX-10.6_License Agreement.txt @@ -0,0 +1,157 @@ +Exhibit 10.6 EXECUTION COPY MEDIA LICENSE AGREEMENT THIS MEDIA LICENSE AGREEMENT (this "Agreement") is made and effective as of the date of the Closing (as defined in the Merger Agreement (as defined below)) (the "Effective Date"), between NATIONAL FOOTBALL MUSEUM, INC., an Ohio non-profit corporation, doing business as Pro Football Hall of Fame ("PFHOF"), HOF Village Media Group, LLC (the "Village Media Company"), a Delaware limited liability company that is a wholly-owned subsidiary of HOF Village, LLC, a Delaware limited liability company ("HOFV") and, solely for purposes of Section 4.5, HOFV; each a "Party" and collectively, the "Parties". RECITALS A. In connection with a Master Transaction Agreement dated December 11, 2018, as amended of even date herewith and as it may be amended or otherwise modified from time to time (the "Master Transaction Agreement"), by and among the Parties and certain other parties, as well as other agreements referenced in the Master Transaction Agreement relating to the development of the Hall of Fame Village Complex (the "Village"), the Parties have determined that it is appropriate and in the Parties' best interests to enter into a media license agreement for the exploitation of certain PFHOF assets by the Village Media Company and its Affiliates. B. The Parties further desire to provide for the sharing of media-related opportunities between the Village Media Company and Hall of Fame Media Group, LLC, an Ohio limited liability company and indirect wholly-owned subsidiary of PFHOF (the "HOF Media Company"). AGREEMENT NOW THEREFORE, based upon the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged (including but not limited to consideration outlined in the Master Transaction Agreement), and intending to be legally bound hereby, the Parties agree as follows: 1. DEFINITIONS 1.1 "Advisory Board" shall mean a board of advisors to the Village Media Company and the HOF Media Company made up of four (4) individuals - (i) the Chief Executive Officer of HOFV, (ii) the Chief Executive Officer of PFHOF, (iii) the Chief Executive Officer of the Village Media Company and (iv) the Executive Director of the HOF Media Company; provided, that if the Chief Executive Officer of the Village Media Company and the Executive Director of the HOF Media Company are the same individual (as is expected as of the Effective Date), then the fourth member of the Advisory Board shall be appointed by unanimous agreement of the foregoing individuals. The Advisory Board's function shall be to facilitate the consideration of opportunities presented to either or both of the Village Media Company and the HOF Media Company. + +Source: GPAQ ACQUISITION HOLDINGS, INC., S-4/A, 1/23/2020 + + + + + +1.2 "Affiliate" with respect to the Village Media Company shall mean any of HOFV and any of the following entities so long as it is directly or indirectly controlled by, or is under common control, with HOFV: HOF Village Stadium, LLC; HOF Village Parking, LLC; HOF Village Land, LLC; HOF Village Youth Fields, LLC; HOF Village Hotel I, LLC; HOF Village Sports Business, LLC; Youth Sports Management, LLC; HOF Village Parking Management I, LLC; HOF Village Residences I, LLC; HOF Village Center for Excellence, LLC; HOF Village Center for Performance, LLC; HOF Experience, LLC; and JCIHOFV Financing, LLC. "Affiliate" with respect to PFHOF shall mean any entity that is directly or indirectly controlled by, or is under common control with, PFHOF. For purposes of this definition, "control" means an equity or income interest of fifty percent (50%) or more, or the possession of the power, directly or indirectly, to direct or cause the direction of the management and policies of the Affiliate, whether through the ownership of voting securities, by contract, or otherwise. 1.3 "Exploit" or "Exploitation" means to reproduce, distribute, digitally transmit, publish, publicly perform or otherwise display via any and all means of video or audio-visual media, or means of distribution except as set forth in this Agreement as to manner, frequency or duration of use including, but not limited to: film, television, streaming, short-form streaming, social media, SVOD, IVOD, pay per view, OTT, theatrical professional/non-professional productions, location based entertainment, music, publishing, holographic mediums, projection mapping, haptic mediums, as well as any marketing, advertising, and promotional activities thereof in any medium currently existing or hereinafter created. 1.4 "Merger Agreement" means that certain Agreement and Plan of Merger, dated September 16, 2019, by and among GPAQ Acquisition Holdings, Inc., a Delaware corporation, Gordon Pointe Acquisition Corp, a Delaware corporation, GPAQ Acquiror Merger Sub, Inc., a Delaware corporation, GPAQ Company Merger Sub, LLC, a Delaware limited liability company, HOFV, and HOF Village Newco, LLC, a Delaware limited liability company. 1.5 "Person" means an individual, corporation, partnership, association, limited liability company, joint venture, trust, estate, joint stock company or other similar organization, government or political subdivision thereof, or any other entity. 1.6 "PFHOF Works" shall mean the written, audio, visual, audiovisual, or choreographic works currently or hereafter owned by or freely sub-licensable by PFHOF. + +2 + +Source: GPAQ ACQUISITION HOLDINGS, INC., S-4/A, 1/23/2020 + + + + + +2. GRANT OF RIGHTS 2.1 Subject to the terms of this Agreement (including, without limitation, Sections 2.3, 2.4, 2.6 and 5 below), PFHOF hereby grants to the Village Media Company a worldwide, non-exclusive, limited, non-sublicenseable and non-assignable (except to the extent set forth in this Agreement) right and license to (a) Exploit the PFHOF Works and (b) edit, supplement or otherwise adapt, incorporate or otherwise utilize, the PFHOF Works to create, produce and Exploit new, original work(s) (each such work in this clause (b), a "HOFV Work"). For the avoidance of doubt, after the termination or expiration of this Agreement, the Village Media Company and its permitted licensees shall continue to have the right to fully exploit, use, and Exploit the HOFV Works for the length of the term of the license granted by PFHOF in connection with such HOFV Work pursuant to Section 2.3; provided that the length of the term of such license shall be a minimum of five (5) years. Any HOFV Works created pursuant to this Agreement shall exclusively be owned by the Village Media Company; provided, however, that, (i) PFHOF shall own all right, title, interest, and copyright in and to the underlying PFHOF Work(s) as further set forth in Section 2.5 and (ii) the Village Media Company's ownership is subject in all events to any Rights Restrictions and the terms of the license (including the term of such license) granted by PFHOF in connection with such HOFV Work pursuant to Section 2.3. 2.2 In addition to any rights set forth herein, PFHOF shall have the right and license to Exploit HOFV Works, at no fee or charge to PFHOF or any of its Affiliates, for educational, not-for-profit purposes aligned with the mission of PFHOF which usage shall not diminish the value of the Village Media Company's or its Affiliates' Exploitation of such HOFV Work in accordance with the terms of this Agreement. HOFV must preapprove any of PFHOF's proposed plans to Exploit the HOFV Works, such approval not to be unreasonably withheld. 2.3 Notwithstanding anything to the contrary in this Agreement, PFHOF shall have the right to approve (in its sole and absolute discretion) any and all usage of, and Village Media Company's (and its Affiliates' and permitted licensees') plans to Exploit, the PFHOF Works (including any inclusion of any PFHOF Work in any HOFV Work and the term of such usage). Prior to any initial Exploitation of a PFHOF Work, the Village Media Company, at its own expense, must furnish to the Advisory Board and PFHOF a written notice ("Notice") which Notice will set forth the Village Media Company's proposal for Exploitation of a PFHOF Work (whether by itself or as incorporated into a HOFV Work), which proposal shall at a minimum specify the applicable PFHOF Work(s) to be Exploited by the Village Media Company, the nature and location of the proposed Exploitation and a pro forma specifying the economics and approximate time period related to such Exploitation. The Advisory Board shall, within fourteen (14) days of its receipt of the Notice, make a recommendation to PFHOF to either approve or reject such proposal as set forth in the Notice. PFHOF shall, within fourteen (14) days of its receipt of the recommendation of the Advisory Board, either approve or reject the proposal as set forth in the Notice. If PFHOF does not approve the proposal as set forth in the Notice within fourteen (14) days of PFHOF's receipt of the recommendation of the Advisory Board, such proposal shall be deemed rejected by PFHOF. In the event that a proposal is rejected (or deemed rejected) by PFHOF, PFHOF shall, upon request from the Village Media Company, provide a written explanation (with reasonable detail) outlining its reason for rejecting such proposal. Upon PFHOF's approval with respect to any such proposal, the Village Media Company (and its Affiliates and permitted licensees) may Exploit the applicable PFHOF Work(s) so long as such Exploitation is in conformance with the proposal as approved by PFHOF (including any proposed sublicenses in accordance with Section 2.4). + +3 + +Source: GPAQ ACQUISITION HOLDINGS, INC., S-4/A, 1/23/2020 + + + + + +2.4 The Village Media Company shall have the right to sublicense (a) the production and creation of the HOFV Works and (b) Exploitation of the PFHOF Works hereunder to any of its Affiliates; provided, that, Village Media Company shall (x) cause such sublicenses to comply with all terms and conditions of this Agreement and (y) not be relieved of any of its obligations under this Agreement as a result of any such sublicense, and will be primarily responsible for any acts or omissions of such sublicensees. 2.5 Notwithstanding anything to the contrary contained in this Agreement, as between PFHOF (and its Affiliates), on the one hand, and the Village Media Company (and its Affiliates), on the other hand, PFHOF shall own and control all right, title, interest, and copyright in and to the PFHOF Works, including, without, limitation, any and all PFHOF Work(s) utilized by, or incorporated in, any HOFV Work and all of its constituent elements, which shall include, without limitation, all feeds recorded by or on behalf of PFHOF in connection with the production of such PFHOF Work, all event footage contained therein and all information and data concerning such PFHOF Work, and all derivatives of the foregoing (except for derivatives that constitute HOFV Works, which ownership shall be retained by the Village Media Company). The Village Media Company agrees, on behalf of itself and its Affiliates and their permitted sublicensees, that all uses by the Village Media Company or any of its Affiliates or their respective permitted sublicensees of the PFHOF Work shall inure to the benefit of PFHOF, and any right that may accrue to the Village Media Company, any of its Affiliates or any of their respective permitted sublicensees related thereto and any goodwill associated therewith are hereby granted and assigned to PFHOF or its designee. Notwithstanding the foregoing, to the extent any HOFV Work incorporates any HOFV trademarks, service marks, or trade dress ("HOFV Trademarks"), use of such HOFV Trademarks shall inure solely to HOFV's benefit. The Village Media Company shall not, and shall cause its Affiliates and their respective permitted sublicensees not to, whether during the Term or thereafter, challenge (a) the rights of PFHOF in and to any PFHOF Work, (b) the validity of any PFHOF Work, (c) PFHOF's right to grant rights or licenses relating to the PFHOF Works or (d) the validity, legality, or enforceability of this Agreement. 2.6 The Village Media Company acknowledges the existence of agreements in effect as of the Effective Date between PFHOF and certain licensees and/or licensors of PFHOF Works that may restrict or prohibit PFHOF from making certain PFHOF Works available for use or Exploitation under this Agreement, including, without limitation that certain agreement effective as of June 25, 2013 among NFL Enterprises LLC, PFHOF and PFHOF Enshrinees Events, Inc. d/b/a Pro Football Hall of Fame Enterprisers (the "NFLN Agreement") (any and all such restrictions and prohibitions, collectively, "Rights Restrictions") and that the Village Media Company's rights under this Agreement shall subject and subordinate to any such Rights Restrictions for so long as such Rights Restrictions are in effect. Without limiting the foregoing, in the event that the Village Media Company is prohibited from pursing and launching an opportunity to create and Exploit an HOFV Work or use or Exploit an existing PFHOF Work pursuant to Sections 2.7, 2.8 or 2.9 as a result of a Rights Restriction under the terms of the NFLN Agreement, then the Parties shall negotiate in good faith a reasonable decrease in the Annual Guarantee for the calendar year in which such opportunity is unavailable. + +4 + +Source: GPAQ ACQUISITION HOLDINGS, INC., S-4/A, 1/23/2020 + + + + + +2.7 PFHOF agrees not to grant licenses to create new PFHOF Works, except with respect to the categories identified on Exhibit A, to any third party during the Term without first offering to the Village Media Company the right of first refusal to create such PFHOF Works on equal terms, subject to any Rights Restrictions. If PFHOF desires to offer a license to any third party or if it receives any bona fide offer from a third party that it is willing to accept, it shall promptly communicate such offer, including the specific terms and business plan relating to such offer, to the Village Media Company and provide the Village Media Company with at least fourteen (14) days to exercise its right of first refusal. If the Village Media Company elects to exercise its right of first refusal, the terms of the offer shall apply, the applicable license shall be subject to the terms and conditions of this Agreement and the Village Media Company shall pay to PFHOF a License Fee (as defined below) for such license in accordance with this Agreement. If the Village Media Company does not exercise its right of first refusal, PFHOF shall have the right to grant a license with respect to such third party on the same terms originally provided to the Village Media Company. 2.8 PFHOF agrees that during the Term, except with respect to the categories identified on Exhibit A, it will not create new PFHOF Works without first granting the Village Media Company a right of first offer to create such PFHOF Work, subject to any Rights Restrictions. If PFHOF desires to create new PFHOF Works, it shall present a proposed business plan in writing to the Village Media Company. The Village Media Company will have fourteen (14) days to review such business plan and elect to proceed under the business plan. If the Village Media Company elects proceed under the business plan, then creation of such PFHOF Work shall be subject to the terms and conditions of this Agreement and the Village Media Company shall pay to PFHOF a License Fee in accordance with this Agreement for the license to create the PFHOF Work. If the Village Media Company does not make such an election, then PFHOF shall have the right to create such PFHOF Work itself. 2.9 PFHOF agrees that during the Term, except with respect to the categories identified on Exhibit A, if PFHOF desires to either exploit itself or license a third party to exploit an existing PFHOF Work, it shall first give the Village Media Company a right of first offer to exclusively license such PFHOF Work, subject to any Rights Restrictions. In such a case, PFHOF shall promptly notify the Village Media Company and provide the Village Media Company with any bona fide third party offer to license such PFHOF Work that PFHOF is willing to accept, including any specific terms and proposed business plan relating to such offer. The Parties shall then negotiate in good faith an agreement to exclusively license the particular PFHOF Work. If the Parties reach an agreement within thirty (30) days, then the applicable license shall be subject to the terms and conditions of this Agreement and the Village Media Company shall pay to PFHOF a License Fee for such license in accordance with this Agreement. If the Parties cannot reach an agreement within thirty (30) days, then PFHOF shall have the right to exploit or license the PFHOF Work itself. + +5 + +Source: GPAQ ACQUISITION HOLDINGS, INC., S-4/A, 1/23/2020 + + + + + +2.10 PFHOF represents and warrants to the Village Media Company that it is the exclusive owner of the PFHOF Works or has the right to grant the licenses and other rights granted to the Village Media Company hereunder, including the right to use the PFHOF Works as permitted herein and that, subject to any Rights Restriction in effect on the Effective Date, PFHOF has secured any necessary releases for any rights of publicity or privacy and can license such rights to the Village Media Company hereunder. 2.11 PFHOF agrees to indemnify, defend, and hold harmless the Village Media Company, its Affiliates, and their respective employees, officers, directors, agents, representatives, and successors and assigns from and against any and all claims, demands, liabilities, losses, suits, damages, costs (including, without limitation, costs of investigation), and expenses, including reasonable attorneys' fees, arising out of or relating to (a) the Village Media Company's authorized use of the PFHOF Works, as permitted by, and in accordance with, the terms of this Agreement, (b) any breach by PFHOF of any warranty, representation, obligation, or agreement made under this Agreement, or (c) PFHOF's use of the HOFV Works in breach of this Agreement, or any claim of infringement of any intellectual property right arising out of the misuse or misappropriation of the HOFV Works by PFHOF. 2.12 The Village Media Company represents and warrants to PFHOF that it is (a) a limited liability company organized and in good standing under the laws of the State of Delaware and (b) a wholly-owned subsidiary of HOFV. 2.13 The Village Media Company agrees to indemnify, defend, and hold harmless PFHOF, its Affiliates, and their respective employees, officers, directors, agents, representatives, and successors and assigns from and against any and all claims, demands, liabilities, losses, suits, damages, costs (including, without limitation, costs of investigation), and expenses, including reasonable attorneys' fees, arising out of or related to (a) the Village Media Company's use of the PFHOF Works in breach of this Agreement, or any claim of infringement of any intellectual property right arising out of the misuse or misappropriation of the PFHOF Works, (b) any breach by the Village Media Company (or its sublicensees, if applicable) of any warranty, representation, obligation, or agreement made under this Agreement, (c) the Exploitation of any of the rights granted pursuant to the terms of this Agreement by the Village Media Company, its Affiliates, licensees or sublicensees arising out of or relating to the Exploitation of any PFHOF Works or HOFV Works (unless such liability arises solely from use of the PFHOF Works by the Village Media Company in accordance with this Agreement), (d) PFHOF's authorized use of any HOFV Works as permitted by, and in accordance with, the terms of this Agreement, (e) any advertising, promotion or other similar materials that are inserted into any Exploitation of any PFHOF Work or any HOFV Work (but excluding advertising or promotional announcements supplied by or on behalf of PFHOF and excluding any claims arising solely from use of the PFHOF Works by the Village Media Company in accordance with this Agreement)) or (f) any failure of the Village Media Company to comply with applicable laws in connection with the rights and performance of its obligations under this Agreement. + +6 + +Source: GPAQ ACQUISITION HOLDINGS, INC., S-4/A, 1/23/2020 + + + + + +2.14 Except for Section 3.5, nothing in this Agreement shall be construed as limiting in any way the Village Media Company's ability to seek and exploit separate rights from any third party. 3. OPERATION OF VILLAGE MEDIA COMPANY 3.1 The Chief Executive Officer of the Village Media Company (the "CEO") shall be the Manager of the Village Media Company. 3.2 The Executive Producer of the Village Media Company (the "EP") shall report to the CEO with input from the Chief Executive Officer of PFHOF. To the extent that the Village Media Company and PFHOF work collaboratively on media projects, the EP's services on such projects for the benefit of PFHOF shall be charged to PFHOF at cost without markup. Performance objectives for the EP shall be determined by the CEO with input from the Advisory Board. 3.3 In consultation with the CEO, the EP shall annually prepare a staffing plan for the Village Media Company's operations and present such plan to the Advisory Board for review. Staff employed by the Village Media Company may be used for projects solely for the benefit of PFHOF or for projects that are collaboratively undertaken by both the Village Media Company and PFHOF. The Advisory Board shall be informed to the extent Village Media Company staff are employed on projects solely for the benefit of PFHOF or on projects that are collaboratively undertaken by both the Village Media Company and PFHOF. In addition, (a) PFHOF shall bear its proportionate share of the cost of such Village Media Company staff (at cost without markup) that work on such collaborative projects and, to the extent such staff work 100% on a PFHOF project, PFHOF shall bear all of the cost of such staff for such project (at cost without markup) and (b) the Village Media Company shall bear its proportionate share of the cost of PFHOF staff (at cost without markup) that work on such collaborative projects and, to the extent such staff work 100% on a Village Media Company project, the Village Media Company bear all of the cost of such staff for such project (at cost without markup). The EP shall ensure that, to the extent that PFHOF and the Village Media Company share staff, that such sharing will not impact the ability of PFHOF or the Village Media Company to meet their respective budget, creative goals, or sales/marketing goals for any year. + +7 + +Source: GPAQ ACQUISITION HOLDINGS, INC., S-4/A, 1/23/2020 + + + + + +3.4 The Advisory Board shall meet regularly to facilitate the Village Media Company's consideration of media-related opportunities contemplated hereunder and to review proposed projects, budgets, schedules, and creative concepts under consideration by the Village Media Company. 3.5 All communication with the National Football League (the "NFL"), its 32 Member Clubs, NFL Legends and Gold Jackets shall be made exclusively and directly through PFHOF. For the avoidance of doubt, PFHOF has the exclusive and sole relationship with the NFL, its 32 Member Clubs, NFL Legends and Gold Jackets for any and all PFHOF and HOFV activities; provided, however, that any communication relating to any investment by the NFL in any Village Media Company project, may be made directly through the President of PFHOF or the Chief Executive Officer of HOFV; and, provided further, that the Village Media Company shall have the right to present opportunities related to any of the above for approval by PFHOF. 4. TERM AND TERMINATION 4.1 Unless otherwise terminated as provided herein, the term of this Agreement shall commence on the Effective Date and shall terminate on December 31, 2034 (such period, including as may be extended in accordance with the subsequent sentence, the "Term"). Thereafter, the agreement shall automatically renew for successive five (5)-year terms, unless either Party gives written notice to the other Party of intent not to renew at least six (6) months prior to the expiration of the then-current Term. If either party elects not to renew the Agreement and the other party wishes to continue the Agreement, the Parties shall attempt in good faith to negotiate an amendment to the Agreement to renew the Term on such terms as may be negotiated by the Parties. Such good faith negotiation shall continue until both Parties agree to cease negotiations or until expiration of the Term. 4.2 After good faith consultation with the Advisory Board, either Party shall have the right to terminate this Agreement at any time for an uncured material breach by the other Party, including the non-payment of the Annual Guarantee, license fees and staffing fees, provided that the non-breaching Party provides prior written notice to the breaching Party, specifying the alleged material breach, and further provided that the breaching Party shall have thirty (30) days after receipt of such notice to cure the material breach, to the reasonable satisfaction of the non-breaching Party; provided, further, that if such breach (other than a breach for non-payment) cannot be cured during such 30-day period, but the allegedly breaching Party has commenced and is continuing good faith efforts to cure such breach within such 30-day period, then the cure period shall be extended until the allegedly breaching Party has stopped making good faith efforts to cure such breach, such extension not to exceed ninety (90) days. 4.3 Either Party may terminate this Agreement immediately upon giving notice if the other Party ceases to conduct its operations in the normal course of business, including the inability to meet its obligations as they mature, or if any proceeding under the bankruptcy or insolvency laws is brought by or against the other Party, or a receiver or custodian is appointed or applied for by the other Party, or an assignment for the benefit of creditors or a transfer of all or substantially all of its property is made by the other Party. + +8 + +Source: GPAQ ACQUISITION HOLDINGS, INC., S-4/A, 1/23/2020 + + + + + +4.4 In addition to and without limiting any other provision of this Agreement, if a Change of Control occurs at any time during the Term, PFHOF shall have the right to terminate this Agreement immediately upon giving notice of such termination to the Village Media Company. For purposes of this Section 4.4, a "Change of Control" shall mean any transaction or series of related transactions that results in (including by way of merger or consolidation), or that is in connection with, the Village Media Company no longer being controlled (as defined in Section 1.2) by or under common control (as defined in Section 1.2) with HOFV. 4.5 In addition to and without limiting any other provision of this Agreement, in the event the Village Media Company or HOFV fails to pay the Annual Guarantee to PFHOF in accordance with Section 5.1 and such failure is not cured within thirty (30) days of notice thereof by PFHOF, then the rights of first offer granted to HOFV in Section 3.1 of the First Amended and Restated License Agreement, dated as of September 16, 2019 between PFHOF and HOFV (the "License Agreement") shall automatically and immediately terminate, regardless of whether PFHOF elects not to terminate this Agreement in accordance Section 4.2. 4.6 Notwithstanding anything to the contrary in this Agreement, this Agreement shall automatically and immediately terminate, without any further action or notice to any Party, upon termination of the License Agreement. 4.7 Upon the expiration or termination of this Agreement as provided in this Section 4, the rights and obligations of the Parties under this Agreement shall be terminated, except as provided herein. 5. FEES 5.1 Subject to Section 2.6, the Village Media Company shall, or shall cause HOFV to, pay to PFHOF a minimum guarantee of one million two hundred and fifty thousand dollars ($1,250,000) (the "Annual Guarantee") each year during the Term; provided that the Parties acknowledge and agree that after the first five (5) years of the Term, the Annual Guarantee shall increase by three percent (3%) on a year-over-year basis (e.g., the Annual Guarantee shall increase to $1,287,500 for year six (6) and to $1,326,125 for year seven (7)). The first Annual Guarantee payment shall be due and payable on the Effective Date and thereafter shall be payable to PFHOF on each twelve (12) month anniversary of the Closing Date during the Term. + +9 + +Source: GPAQ ACQUISITION HOLDINGS, INC., S-4/A, 1/23/2020 + + + + + +5.2 In consideration of any license granted to the Village Media Company hereunder, the Village Media Company shall, or shall cause HOFV to, pay to PFHOF a license fee specific to the PFHOF Work(s) licensed by PFHOF hereunder ("License Fee") pursuant to the rate for the applicable project or opportunity as will be mutually agreed between the Parties for each opportunity; provided that License Fees shall be debited first from the Annual Guarantee, which shall satisfy such License Fees due and payable hereunder until the aggregate amount of the License Fees due and payable during such calendar year exceeds the Annual Guarantee for such calendar year. For clarity, if for any calendar year during the Term, the amount of License Fees for such calendar is (x) less than the amount of the Annual Guarantee, the Village Media Company shall still be required to pay the Annual Guarantee for such calendar year or (y) more than the Annual Guarantee, the Village Media Company shall be required to pay all License Fees in excess of the Annual Guarantee for such calendar year. The Parties acknowledge and agree that two hundred twenty five thousand dollars ($225,000) (the "Youth Sports License Fee") shall be credited against the Annual Guarantee on the Closing Date and each anniversary of the Closing Date during the Term for the license granted by PFHOF to Youth Sports Management, LLC ("Youth Sports") pursuant to that certain branding license agreement to be entered into on the Effective Date between PFHOF and Youth Sports for so long as such agreement remains in effect; provided that after the first five (5) years of the Term, the Youth Sports License Fee shall increase by three percent (3%) on a year-over year basis and thereafter, the aggregate amount of the Youth Sports License Fee, after giving effect to such increase each year, shall be the amount credited against the Annual Guarantee. 6. FORCE MAJEURE In the event either Party is unable to comply fully with its obligations (other than payment obligations) under this Agreement due to an event beyond the control of the Party whose performance is affected, including any legal prohibition, court order, degree, regulation or requirement of any governmental entity having jurisdiction, strikes, catastrophe, drought, shortage of water or other action of the elements, temporary or permanent shutdown due to regulatory or other governmental actions, or Acts of God or any other matters beyond its control, such Party shall while so affected be relieved to the extent thus prevented from performing its obligations hereunder and such non-performance shall not, in and of itself, be deemed to be a breach of this Agreement; provided that, in such event, the non-performing Party takes all commercially reasonable measures to remove the disability and resume full performance hereunder at the earliest possible date. 7. GENERAL PROVISIONS 7.1 Confidentiality (a) "Confidential Information" means all forms of confidential information, including technical information and business information, disclosed by one Party or its Affiliates (the "Disclosing Party") to the other Party or its Affiliates (the "Receiving Party") during the Term in connection with this Agreement, that is identified as confidential or is information that is of a nature that is customarily regarded as confidential, whether disclosed in electronic, tangible, oral or visual form; provided that oral or visual disclosures shall be deemed confidential only if they are confirmed as confidential in writing by the Disclosing Party prior to or at the time of disclosure or within thirty (30) days thereafter, or if the Receiving Party should reasonably know that such visual or oral disclosures are intended to be confidential. Confidential Information shall not include such information that: (i) as of the date of disclosure is known to the Receiving Party or its Affiliates, as shown by written documentation; (ii) was independently developed by the Receiving Party or its Affiliates without access to the Disclosing Party's Confidential Information; (iii) as of the date of disclosure is in, or subsequently enters, the public domain, through no fault of the Receiving Party; or (iv) as of the date of disclosure or thereafter is obtained from a third party free from any obligation of confidentiality to the Disclosing Party. + +10 + +Source: GPAQ ACQUISITION HOLDINGS, INC., S-4/A, 1/23/2020 + + + + + +(b) Each Receiving Party agrees: (i) not to disclose, make public, or authorize any disclosure or publication of such Confidential Information of the Disclosing Party except as expressly permitted herein; (ii) to take reasonable measures to protect the confidentiality of the Disclosing Party's Confidential Information exercising the same degree of care to preserve and safeguard the Disclosing Party's Confidential Information as it uses to preserve and safeguard its own Confidential Information, but in no event less than a reasonable degree of care; (iii) to restrict access to such Confidential Information to only those officers, directors, or employees of the Receiving Party or its Affiliates or representatives who have a need to know such Confidential Information and who are bound by confidentiality obligations at least as restrictive as those contained in this Agreement; and (iv) not to remove any confidential or proprietary markings or designations placed by the Disclosing Party on such Confidential Information. The Receiving Party and its Affiliates shall not use the Disclosing Party's Confidential Information for any purpose except as permitted by this Agreement. (c) The confidentiality obligations contained herein shall not apply to the extent that the Receiving Party is required to disclose the information by law, order, or regulation of a governmental agency or a court of competent jurisdiction; provided that, in each such case, the Receiving Party shall give written notice thereof to the Disclosing Party and sufficient opportunity to prevent or limit any such disclosure or to request confidential treatment thereof; and provided further, that the Receiving Party shall give reasonable assistance to the Disclosing Party to preserve the information as confidential. (d) Upon termination of this Agreement, each Receiving Party shall return to the Disclosing Party (or at the Disclosing Party's direction, destroy) all Confidential Information of the Disclosing Party that is in the possession, custody, or control of the Receiving Party. The Village Media Company shall be permitted to retain copies of PFHOF's Confidential Information as necessary to allow the Village Media Company to exercise its post-termination rights with respect to such information. + +11 + +Source: GPAQ ACQUISITION HOLDINGS, INC., S-4/A, 1/23/2020 + + + + + +(e) Each Party acknowledges that a breach or threatened breach of this Section 7.1 on its part shall result in irreparable and incalculable damages to the other Party. Therefore, in addition to any action by either Party for collection of damages resulting from the breach of this Agreement, such Party shall also be entitled to immediate injunctive relief, restraining the other Party from continued or threatened breach of this Agreement. Each Party further agrees that, upon a finding of a breach of the terms of this Agreement on its part, such Party shall pay to the other Party the costs and expenses, including attorneys' fees, which the other Party incurs in enforcing the terms of this Agreement. 7.2 Notices. Any notice required or permitted by this Agreement will be in writing and delivered as follows with notice deemed given as indicated: (i) by personal delivery when delivered personally; (ii) by overnight courier upon written verification of receipt; (iii) by telecopy or facsimile transmission upon acknowledgement of receipt of electronic transmission; or (iv) by certified or registered mail, return receipt requested, upon verification of receipt. Notice will be sent to the appropriate address set forth below or such other address as to which the Parties have been notified hereunder. 7.3 Compliance with Laws and Regulations. Each of the Village Media Company and PFHOF, as applicable, agrees to be in material compliance with all federal, state, and local laws, ordinances, and regulations applicable to its respective operations and to obtain and maintain all licenses and permits required by law necessary for each of their respective operations. 7.4 Governing Law and Arbitration. (a) This Agreement will be governed in all respects by the laws of the State of Ohio (without regard to conflicts of law provisions), as such laws are applied to agreements entered into and to be performed entirely within the State of Ohio between Ohio residents. (b) Any dispute between the Parties concerning the scope or interpretation of this Agreement shall be submitted to binding arbitration in accordance with the Rules of Commercial Arbitration of the American Arbitration Association in effect on the date that a dispute is submitted to arbitration (the "Rules"). The arbitration shall be held in Canton, Ohio, and shall be before a panel of three arbitrators, one chosen by each of the Parties and a third chosen by the two arbitrators so chosen by the Parties. Not less than fifteen (15) days prior to the arbitration, each Party shall submit to the other the documents and a list of witnesses it intends to interview or call in the arbitration. The arbitrators shall apply the substantive law of the State of Ohio with regard to any dispute that becomes the subject of arbitration, and the arbitrators will be so instructed. The arbitrators shall issue a written opinion stating the findings of fact and the conclusions of law upon which the decision is based. The decision of the arbitrators shall be final and binding. + +12 + +Source: GPAQ ACQUISITION HOLDINGS, INC., S-4/A, 1/23/2020 + + + + + +(c) In any action, suit, proceeding, claim, or counterclaim brought to enforce this Agreement or any of its provisions, the Party that prevails in any such action, suit, proceeding, claim, or counterclaim (the "Prevailing Party") shall recover its costs, fees, and expenses, including, but not limited to, the reasonable costs, fees, and expenses of attorneys and outside experts (collectively, "Expenses"), from the other Party (the "Non-Prevailing Party"), and the court or arbitration panel shall be so instructed to determine which Party is the Prevailing Party, to grant the recovery of the Expenses incurred by the Prevailing Party, and to order the Non-Prevailing Party to pay the Expenses of the Prevailing Party. 7.5 Assignment. The Village Media Company shall not, directly or indirectly, assign, sublicense or otherwise transfer any of its rights or obligations hereunder without the prior written consent of PFHOF. The transfer of ownership of the Village Media Company pursuant to the Merger Agreement shall not require the consent of PFHOF. 7.6 Severability. Should any provision of this Agreement be held by a court of competent jurisdiction to be illegal, invalid, or unenforceable, the legality, validity, and enforceability of the remaining provisions of this Agreement will not be affected or impaired thereby. 7.7 Waiver. The waiver by either Party of a breach of any provision of this Agreement by the other Party will not operate or be construed as a waiver of any other or subsequent breach by such other Party. 7.8 Authority. Each Party warrants and represents that such Party's execution and delivery of this Agreement has been duly authorized by proper corporate or limited liability company action and that this Agreement is a binding obligation of such Party enforceable in accordance with its terms. 7.9 Independent Contracting Parties. The Parties are independent contracting parties and nothing in this Agreement shall make either Party the agent or legal representative of the other for any purpose whatsoever, nor does it grant either Party the authority to assume or create any obligation on behalf of or in the name of the other. Furthermore, the Parties shall remain separate and independent contracting parties and nothing in this Agreement shall make either Party subject to a joint venture agreement or other mutual arrangement between the Parties. 7.10 Entire Agreement. This Agreement constitutes the entire agreement between the Parties relating to this subject matter and supersedes all prior or contemporaneous oral or written agreements concerning such subject matter, including the Original License Agreement. This Agreement may be changed only by mutual agreement of the Parties in writing. 7.11 Merger Agreement. Notwithstanding anything to the contrary in this Agreement, in the event that the Closing (as such term is defined in the Merger Agreement) does not occur, this Agreement shall be terminated and the provisions herein shall have no force or effect. [signature page follows] + +13 + +Source: GPAQ ACQUISITION HOLDINGS, INC., S-4/A, 1/23/2020 + + + + + +IN WITNESS WHEREOF, PFHOF, HOFV (solely for purposes of Section 4.5) and the Village Media Company have caused this Agreement to be executed by their respective, duly authorized representatives, effective as of the Effective Date. NATIONAL FOOTBALL MUSEUM, INC. By: C. David Baker President Date: Address: 2121 George Halas Drive NW Canton, Ohio 44708 HOF VILLAGE MEDIA GROUP, LLC By: Name: Title: Date: Address: 1826 Clearview Avenue NW Canton, Ohio 44708 [Media License Agreement] + +Source: GPAQ ACQUISITION HOLDINGS, INC., S-4/A, 1/23/2020 + + + + + +For the purpose of acknowledging and agreeing to the terms set forth in Section 4.5: HOF VILLAGE, LLC By: Name: Title: Date: Address: 1826 Clearview Avenue NW Canton, Ohio 44708 [Media License Agreement] + +Source: GPAQ ACQUISITION HOLDINGS, INC., S-4/A, 1/23/2020 + + + + + +Exhibit A Excluded Categories and Properties 1. Any PFHOF Works in, or Exploited in connection with, the following Categories: · Health Care · Museums · Education · Sports Betting 2. Any programming or content created or Exploited in support and furtherance of the PFHOF's mission. 3. The following television properties that are subject to perpetual rights and existing and future media deals (including any extensions, renewals or similar agreement in connection any existing agreement): Properties and rights subject to agreements with NFL Enterprises LLC ("NFLN") and ESPN, Inc. ("ESPN") through September 1st 2021 (and any extension, renewal or similar agreement relating thereto). · Enshrinement Ceremonies · Other Enshrinement Events reserved for NFLN o Gold Jacket Show one hour (2019 - 2 hours co-copyright NFLN PFHOF) o Five One Hour Gold Jacket Contender Shows from September to February around the Enshrinement Selection Process For the avoidance of doubt, nothing in this Agreement shall grant Village Media Company or its Affiliates the right or license to (i) any live (or near live) rights to Exploit any events or other content owned or controlled by PFHOF (e.g., Enshrinement Ceremonies), or (ii) any programming or content in connection with or related to any Enshrinement Ceremony or the Enshrinement selection process (e.g., selection meetings, voting, debates or discussions prior to or during any selection meeting, presenter speeches, discussions or events immediately after Enshrinement Ceremonies, etc.). 4. Any content or properties utilizing the following trademarks: · Knock on the Door (Trademarked sold to social media company) · Hometown Hall of Famer (Trademarked sold to sponsors) + +Exhibit A-1 + +Source: GPAQ ACQUISITION HOLDINGS, INC., S-4/A, 1/23/2020 + + + + + +5. The following movies: · Jim and Jill Kelly Movie 6. The autobiographical or biographical works related to the following players with video rights: · Michael Strahan · John Madden · Troy Aikman 7. The following television show concepts: · Hall of Fame City · Documentary One Years One Hundred Yards of Character · Strong Youth Strong Communities · Centennial Spectacular · Centennial Gala 8. Any digital live streaming rights, including without limitation, of the following properties: · State of the Hall · Super Bowl Luncheon · Salute to Greatness · Inspiration Project · The Mission · Heart of the Hall of Famer 9. Any licenses or sponsorships of video games granted to EA Sports (or its successor) with respect to Madden NFL or any other EA Sports football game. Exhibit A-2 + +Source: GPAQ ACQUISITION HOLDINGS, INC., S-4/A, 1/23/2020 \ No newline at end of file diff --git a/full_contract_txt/GpaqAcquisitionHoldingsInc_20200123_S-4A_EX-10.8_11951679_EX-10.8_Service Agreement.txt b/full_contract_txt/GpaqAcquisitionHoldingsInc_20200123_S-4A_EX-10.8_11951679_EX-10.8_Service Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..6adb6760e4e1d534ac02de90191acf8e4a2ddeed --- /dev/null +++ b/full_contract_txt/GpaqAcquisitionHoldingsInc_20200123_S-4A_EX-10.8_11951679_EX-10.8_Service Agreement.txt @@ -0,0 +1,255 @@ +Exhibit 10.8 EXECUTION COPY CERTAIN INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS NOT MATERIAL AND WOULD LIKELY CAUSE COMPETITIVE HARM TO THE REGISTRANT IF PUBLICLY DISCLOSED. [***] OR [REDACTED] INDICATES THAT INFORMATION HAS BEEN REDACTED. SPONSORSHIP AND SERVICES AGREEMENT This SPONSORSHIP AND SERVICES AGREEMENT (the "Agreement") is made and entered into as of the 19t h day of December, 2018, by and among HOF Village, LLC, a Delaware limited liability company ("HOFV"), National Football Museum, Inc., d/b/a Pro Football Hall of Fame, an Ohio corporation ("PFHOF" and, together with HOFV, the "HOF Entities") and Constellation NewEnergy, Inc., a Delaware corporation, on behalf of itself and its retail affiliates and subsidiaries (collectively, "Constellation"). HOFV and/or PFHOF, on the one hand, and Constellation, on the other hand, are referred to herein as a "Party" and, collectively, as the "Parties". WITNESSETH: WHEREAS, Constellation desires to provide to the HOF Entities, and the HOF Entities desire to obtain from Constellation, certain of Constellation's products and services listed and described in Exhibit A (collectively, the "Products & Services") for use in connection with the Johnson Controls Hall of Fame Village in Canton, Ohio (the "Village"); and WHEREAS, Constellation desires to become a sponsor of the Village and to obtain the rights set forth herein in connection with such sponsorship. NOW, THEREFORE, in consideration of the promises herein contained, the Parties hereto agree as follows: ARTICLE 1 + +SUPPLY OF PRODUCTS & SERVICES 1.1 Sale of Products & Services. (a) The HOF Entities shall consult with Constellation to develop a comprehensive energy strategy with respect to the Products & Services listing in Exhibit A, which reflects sustainable product solutions, competitive market pricing (incorporating completion of the Supplier Component Questionnaire in the form of Exhibit B hereof for the applicable HOF Entity or affiliate), periodic reporting and analytics, regulatory/market intelligence and infrastructure services and equipment. + +Source: GPAQ ACQUISITION HOLDINGS, INC., S-4/A, 1/23/2020 + + + + + +(b) The HOF Entities or their affiliates shall, during the Term (as defined below), purchase from Constellation, and Constellation shall sell to the HOF Entities and/or their affiliates, as applicable, such Products & Services as shall be requested by an HOF Entity or its affiliates, in each case at the applicable Market Prices for such Products & Services and on competitive terms. For purposes of this Section 1.1(b), (i) the "Market Price" of any Products & Services shall mean the price for such Products & Services established by Constellation as the competitive market price at which such Products & Services are to be made available to Constellation's customers with a similar anticipated load profile within a specified utility service territory. Constellation shall invoice the applicable HOF Entity or its appropriate affiliate for all Products & Services purchased by such HOF Entity or its appropriate affiliate pursuant to the applicable Second Level Agreement (as defined below). In the event that the purchaser of Products & Services pursuant to this Article 1 is an affiliate of an HOF Entity (but not an HOF Entity), such affiliate shall be subject to Constellation's credit approval of such affiliate as the contracting entity. In the event that such affiliate does not meet Constellation's credit requirements (and in the event that such affiliate still desires to purchase such Products & Services), such affiliate shall provide to Constellation a surety bond reasonably acceptable to Constellation from a provider rated than A- (or an equivalent rating from S&P, Moody's, Fitch or AM Best) or better prior to the purchase of such Products & Services. (c) The Parties agree and acknowledge that neither HOF Entity or any of its respective affiliates shall be subject to any individual minimum purchase requirement (whether in terms of price, quantity or any other criteria) under this Agreement with respect to the Products & Services, but the HOF Entities and their respective affiliates remain subject to the aggregate EME financing pursuant to Section 2.4 during the Term. (d) All purchases of Products & Services from Constellation by the HOF Entities or their respective affiliates pursuant to this Agreement shall be made pursuant to a separate agreement executed between an HOF Entity or affiliate and Constellation which may include a master retail electricity supply agreement in substantially the form of Exhibit C-1, master retail natural gas supply agreement in substantially the form of Exhibit C-2, transaction confirmation in substantially the form of Exhibit C-3 or similar document or agreement (each, a "Second Level Agreement"). In the event of any conflict or inconsistency between this Agreement and any Second Level Agreement negotiated after execution of this Agreement and not substantially in the form attached hereto, this Agreement shall control except to the extent that the Second Level Agreement expressly refers to this Agreement and states that the specific provision thereof shall be deemed to amend and supersede a specifically identified provision hereof (in which case such specific provision of the Second Level Agreement shall control over such specifically identified provision hereof). 1.2 Title and Risk of Loss. With respect to the Products & Services delivered by Constellation to an HOF Entity (or its affiliates), title and risk of loss will pass as set forth in the applicable Second Level Agreements. 1.3 Delivery; Acceptance. With respect to the Products & Services delivered by Constellation to an HOF Entity (or its affiliates), delivery and acceptance will be governed by the applicable Second Level Agreements. 1.4 Warranty. Constellation's standard warranty as stated in the applicable Second Level Agreement (the "Warranty") shall apply to all purchases of Products & Services made pursuant to this Agreement. Without limiting the Warranty, Constellation represents, warrants and covenants that all Products & Services delivered in connection with this Agreement or any Second Level Agreement will be and will have been produced and/or provided in compliance with all applicable laws. + +2 + +Source: GPAQ ACQUISITION HOLDINGS, INC., S-4/A, 1/23/2020 + + + + + +1.5 Replacement Products & Services. In the event that Constellation shall fail to timely provide to the HOF Entities or any of their respective affiliates any Products & Services in accordance with the terms of this Agreement, the default and remedies provisions of the applicable Second Level Agreement shall govern. 1.6 Impact of Construction Delays. In the event that the issuance of a certificate of substantial completion for a facility listed on Exhibit D is delayed by a period of 6 months or longer from the last day of the quarter indicated on Exhibit D for that facility, the HOF Entities will provide prompt written notice to Constellation of such delay, and the Sponsorship Fees will be reduced, to the extent applicable, as set forth in Exhibit H. Any construction delay shall not impact the HOF Entities' contractual commitment or timelines as it relates to the obligations set forth in this Agreement related to EME financing. Any commodity supply agreements with the HOF Entities related to the delayed facility shall be extended in term by the number of months of the certificate of substantial completion delay at then current market pricing, except to the extent that an existing agreement is in place with respect to such delayed facility or supply quantity purchased. ARTICLE 2 + +PROVISION OF SERVICES 2.1 Services. (a) Throughout the Term, Constellation shall provide to the HOF Entities and/or their respective affiliates the Products & Services. All Products & Services shall be delivered to the account(s) or facilit(y)(ies) identified in the applicable Second Level Agreement, or performed at the Village or at such other location upon which the Parties may mutually agree in the applicable Second Level Agreement. (b) All Services included in the Products & Services shall be performed with at least the level of service, quality and care provided by Constellation to other third parties receiving the same or substantially similar services. Constellation will provide, or cause to be provided, all of the Services included in the Products & Services in compliance in all material respects with all applicable laws, rules, regulations, codes, orders, treaties and other requirements of federal/national, state/provincial and local governments and agencies thereof, including but not limited those relating to labor, health, safety and the environment. 2.2 Exclusivity. Provided that Constellation is not then in breach of its obligations pursuant to this Agreement, including without limitation Section 2.1 hereof, and provided that Constellation has available for purchase a product or service which meets the needs of the HOF Entities at competitive market pricing, (a) neither of the HOF Entities shall purchase, at any time during the Term, any commodity electricity or gas from any person or entity other than Constellation and its affiliates and (b) in the event and to the extent mutually agreed by the Parties, neither of the HOF Entities shall grant or award to any company designated by Constellation (and mutually agreeable to the HOF Entities) any project which the Parties mutually agree shall not be granted or awarded to such company. Notwithstanding the foregoing, this Section 2.2 shall not be deemed to apply to agreements executed prior to the date of this Agreement between the HOF Entities and Johnson Controls, Inc. or any of its affiliates. + +3 + +Source: GPAQ ACQUISITION HOLDINGS, INC., S-4/A, 1/23/2020 + + + + + +2.3 Costs and Expenses for Services. All up-front costs of providing the services included in the Products & Services, excluding costs of consumption of energy and energy-related services, shall be borne by Constellation. Costs of consumption of energy, energy-related services and EME services provided pursuant to this Agreement shall be borne by the HOF Entities. 2.4 EME Financing. A minimum of [***] in mutually agreed upon EME financing will be contracted for by the Parties, with a minimum of [***] of such aggregate amount to be contracted for in each of [***] and [***]. ARTICLE 3 + +SPONSORSHIP RIGHTS AND BENEFITS 3.1 Sponsorship Rights. Subject to the terms of this Agreement, the HOF Entities hereby grant to Constellation, for the entire Term (except as otherwise set forth on Exhibit E), the sponsorship rights, advertising rights and other benefits described on Exhibit E (the "Sponsorship Rights"). 3.2 Production and Execution of Sponsorship Rights. (a) The design, layout, content and copy of all advertising signs and/or promotional materials covered by this Agreement, including any subsequent changes at Constellation's expense, are subject to prior written approval by the HOF Entities, which approval shall not be unreasonably withheld (provided, however, that a rejection or denial of approval shall not be considered unreasonable if the HOF Entities, in their sole discretion, determine that an advertising sign or promotional material covered by this Agreement is used in any manner that is contrary to public morals, could be deceptive or misleading or could reflect unfavorably on the good name, goodwill, reputation or image of the HOF Entities or their respective affiliates). (b) Constellation agrees, at its sole cost and expense, to supply the HOF Entities with camera-ready artwork required for the production of advertising signs and/or promotional materials covered by this Agreement and to be produced by or on behalf of the HOF Entities at least thirty (30) days before such material is scheduled to be produced. Constellation hereby specifically authorizes the HOF Entities to use such artwork in the production of such advertising signs and/or promotional materials and represents and warrants that all of its advertising copy shall comply with all applicable federal, state and local laws pertinent to the advertising of its products. Constellation represents and warrants that it shall own all intellectual property and related rights or shall otherwise have the right to use and authorize the HOF Entities' use of same as it relates to any such artwork and advertising copy. + +4 + +Source: GPAQ ACQUISITION HOLDINGS, INC., S-4/A, 1/23/2020 + + + + + +(c) Constellation shall be solely responsible for all costs and expenses incurred in connection with the creation and/or production of all advertising signs and/or promotional materials covered by this Agreement unless otherwise specifically noted on Exhibit E, and such costs and expenses shall be borne by Constellation in addition to any amounts due under this Agreement. Constellation shall be invoiced by the HOF Entities for any such materials at the retail cost charged to the HOF Entities (or either of them) by the supplier, without mark-up. Payment with respect to such invoice will be due thirty (30) days following receipt by Constellation of such invoice. Constellation shall be solely responsible for the initial cost of installation of all advertising signs covered by this Agreement, and Constellation shall be responsible for the cost of installation of each advertising sign which is changed as a result of a change in the artwork desired by Constellation during the Term subsequent to its initial installation except in the case of temporary signs planned for eventual replacement with permanent signs. Constellation shall be invoiced by the HOF Entities for any installation costs incurred as a result of such advertising signage change at the retail cost charged to the HOF Entities (or either of them) by the installer, without additional markup. Payment with respect to such invoice will be due thirty (30) days following receipt. The HOF Entities shall be solely responsible for the maintenance of the advertising signs covered by this Agreement during the Term. (d) The HOF Entities have the right to refrain from displaying or illuminating Constellation's advertising panels in Tom Benson Stadium when required to do so by agreements with [***] or any other professional sports league or by television network commitments of the aforementioned leagues. 3.3 Intellectual Property Rights. (a) Reservation of Rights. The HOF Entities and Constellation acknowledge that each Party owns or has rights in certain names, logos, trademarks, service marks, copyrights and other intellectual property (the "Marks"), and owns or has certain merchandising rights in and to its Marks, and all goodwill associated with or symbolized by its Marks. Subject to the license granted hereunder, each Party reserves all right, title and interest in and to its Marks and any merchandising rights in and to such Marks, and all goodwill associated with or symbolized by such Marks. Constellation shall have no right to use the Marks of the HOF Entities (or either of them), the Village or Johnson Controls, Inc. without the prior written consent of the HOF Entities (or the applicable HOF Entity), which shall not be unreasonably withheld, and/or, if applicable, Johnson Controls, Inc. Each Party will be solely responsible for taking such actions as it deems appropriate to obtain and maintain trademark, service mark, or copyright registration for its own Marks and each Party will have the exclusive right to enforce its own Marks, including the right to assert, defend or settle any allegations or claims of infringement, dilution, misappropriation or similar violation of same. (b) Grant of Rights by HOF Entities. The HOF Entities grant to Constellation a nonexclusive, nontransferable, royalty-free license to use the marks set forth on Exhibit F ("HOF Entity Marks") in the United States or online during the Term solely in connection with (i) Constellation's use and promotion of the designations set forth on Exhibit E in connection with commercial activations, marketing promotions, commercial programs and marketing programs related to the Village, (ii) B2B-related and B2C-related marketing activities approved by the HOF Entities and (iii) as otherwise expressly contemplated by this Agreement. This license expressly prohibits any pass-through rights or the use of the HOF Entity Marks by any third party, except (x) to Constellation's subsidiaries and brands for use in a manner consistent with clauses (i) through (iii) hereof or (y) with the express written consent of the HOF Entities (or the appropriate HOF Entity). On termination or expiration of this Agreement, Constellation shall cease all use of the HOF Entity Marks as soon as practicable, but in any event within thirty (30) days unless the particular media which has been approved requires a longer lead time, but in no event longer than ninety (90) days. + +5 + +Source: GPAQ ACQUISITION HOLDINGS, INC., S-4/A, 1/23/2020 + + + + + +(c) Quality Control - Marks. (i) Each licensee Party agrees, in connection with its use of any of the licensor Party's Marks, to comply with any quality-control standards as such licensor Party may provide hereunder from time to time and which may be revised by the Party owning the Marks from time to time. Each Party shall take such actions as the Party owning the Marks may reasonably request to ensure compliance with such quality-control standards in connection with the licensee Party's use of any of the Marks. (ii) Each licensee Party shall comply with all applicable laws and regulations and shall obtain all necessary licenses, permits, and governmental approvals, in connection with the manufacture, promotion, advertising, distribution, and sale of any products and/or services utilizing any of the licensor Party's Marks. (iii) A licensee Party shall not change in any way or in any manner the licensor Party's Marks in any use on any products or any advertisements or other marketing materials therefor, unless any such proposed change is first approved in writing by the Party owning the Mark(s) in question. Any changes made by a licensee Party to the licensor Party's Marks will be owned by the applicable Party owning the underlying Marks (which ownership will be confirmed or otherwise documented by the licensee Party in writing, at the request of the Party owning the Marks) and, where approved by the Party owning the Marks pursuant to this subsection (iii), made automatically subject to the terms of this Agreement. (iv) Each licensee Party acknowledges, understands, and agrees that it shall not perform, do, or cause any act to be done, or fail to take any action, during or after the Term, or assist any third party in performing, doing, and/or causing any act to be done, which would in any way or manner be detrimental to, injure or impair, in any way or to any degree: (A) the licensor Party's Marks (or any of them); (B) any applications for registration and/or registrations therefor; (C) the goodwill related to the licensor Party's Marks (or any of them); (D) a licensor Party's federal, state and/or common law and other rights in or to the licensor Party's Marks; (E) a licensor Party's right, title, interest, and ownership in and to the licensor Party's Marks; and/or (F) the validity or enforceability of the any of the foregoing. (d) Grant of Rights by Constellation. Constellation grants to the HOF Entities a nonexclusive, nontransferable, royalty-free license to use the marks set forth on Exhibit G ("Constellation's Marks") in the United States or online throughout the Term solely in connection with the Sponsorship Rights, the advertising and promotion of the Village, including any musical, athletic or other live performance events at the Village, in connection with the name of the Center for Excellence and/or any Co-Branded Center for Excellence Logos and otherwise as expressly contemplated by this Agreement. The HOF Entities shall identify Constellation as a sponsor of the Village and shall have the right to use Constellation's Marks in connection with television, radio and print advertising of the Village and events held at the Village. This license expressly prohibits any pass-through rights or the use of Constellation's Marks by any third party, without the express written consent of Constellation, except where sublicensing of Constellation's Marks is necessary or desirable to provide for the Sponsorship Rights and/or the advertising and promotion of the Village. On termination or expiration of this Agreement, the HOF Entities shall cease all use of the Constellation Marks as soon as practicable, but in any event within thirty (30) days unless the particular media which has been approved requires a longer lead time, but in no event longer than one hundred eighty (180) days. + +6 + +Source: GPAQ ACQUISITION HOLDINGS, INC., S-4/A, 1/23/2020 + + + + + +(e) Limitations on Rights. Each Party agrees it will not use the Sponsorship Rights or any license granted under or in connection with this Agreement in any manner which could reasonably be expected to (i) infringe upon the intellectual property or other propriety rights or rights of publicity or privacy of a Party to this Agreement or any third party, (ii) violate any law, statute, regulation, or ordinance applicable to it, including, without limitation, laws regarding obscenity, discrimination, unfair competition and false advertising, or (iii) be defamatory or trade libelous. The HOF Entities may remove any content, Marks, data or other materials from the HOF Entities' property and refuse to provide the Sponsorship Rights with respect to any content, Marks, data or other materials which the HOF Entities determine will (x) infringe upon the intellectual property or other propriety rights or rights of publicity or privacy of a Party to this Agreement or any third party, (y) violate any law, statute, regulation, or ordinance, including, without limitation, laws regarding obscenity, discrimination, unfair competition and false advertising, or (z) be defamatory or trade libelous. 3.4 Sponsorship Fees. For the advertising and other rights described herein, Constellation shall pay to the HOF Entities total combined sponsorship fees (the "Sponsorship Fees") and total combined annual activation fund proceeds (the "Annual Activation Fund Proceeds") in the amounts and on the dates set forth on Exhibit H, in addition to any other amounts required by the terms of this Agreement. Annual Activation Funds are to be used in each calendar year. Unused funds are not rolled into future contract years. In the event Constellation fails to pay to the HOF Entities when due any sum required by this Agreement to be paid, whether pursuant to this Section 3.4 or otherwise, interest shall accrue from the date due on the unpaid amount at the rate of [***] per month or, if less, the highest rate permitted by law. ARTICLE 4 + +TERM AND TERMINATION 4.1 Term. The term of this Agreement (the "Term"), unless mutually extended by written agreement of the Parties or unless sooner terminated as provided herein, shall commence effective as of the date hereof and shall expire on December 31, 2028. + +7 + +Source: GPAQ ACQUISITION HOLDINGS, INC., S-4/A, 1/23/2020 + + + + + +4.2 Termination; Available Remedies. (a) Right to Terminate for Default. A Party shall be in default hereunder if any of the following events shall occur (each of such events being an "Event of Default"): (i) Such Party fails to perform timely any of its material obligations hereunder and such default shall continue for a period of sixty (60) days following receipt by such Party of written notice from the other Party specifying such default; provided that, if the default specified in such notice is curable but of a nature such that it cannot be cured through the exercise of reasonable diligence within the sixty (60) day cure period, then such sixty (60) day cure period shall be extended to a period as is reasonable (but in no event more than sixty (60) days, subject to delay due to force majeure) to cure such default pursuant to a mutually agreed plan of cure, provided that the non-performing Party has proceeded at all times and is continuing to proceed in a diligent and reasonable manner to cure; (ii) Such Party becomes insolvent, or takes the benefit of any present or future insolvency or bankruptcy statute, or makes a general assignment for the benefit of creditors, or files a voluntary petition in bankruptcy or a petition or answer seeking an arrangement, reorganization or readjustment of its indebtedness under the Federal bankruptcy laws or under any law or statute of the United States or any state thereof, or consents to the appointment of a receiver, trustee or liquidator of all or substantially all of its property; (iii) By court order or decree such Party is adjudged bankrupt or an order is made approving a petition filed by any of its creditors or by any of its stockholders or partners seeking its reorganization or the readjustment of its indebtedness under the Federal bankruptcy laws or under any law or statute of the United States or any state thereof; (iv) An involuntary petition under any bankruptcy or insolvency law, or an action under present or future insolvency law or statute, is filed against such Party and is not dismissed or stayed within sixty (60) days after the filing thereof; or (v) Such Party sells, conveys, assigns or otherwise transfers all or substantially all of its assets (other than to one of its affiliates in the case of an HOF Entity) in breach of Section 6.2. If either Party is in default under this Section 4.2(a) beyond the applicable grace or cure periods, then the other Party shall be entitled to terminate this Agreement and to seek such other remedies as are described in Section 4.2(d). (b) Right to Terminate for Potential Reputational Damage. Each of the HOF Entities or Constellation may terminate this Agreement at any time without liability if association with another Party could, in such Party's reasonable opinion, materially damage its reputation or image or in the event a Party breaches Section 3.3 hereof, which breach is not cured within sixty (60). days of receipt of notice of such breach. + +8 + +Source: GPAQ ACQUISITION HOLDINGS, INC., S-4/A, 1/23/2020 + + + + + +(c) Right to Terminate for Failure to Recover Investment. Constellation may terminate this Agreement, effective as of December 31, 2023, in the event that (i) on or prior to December 1, 2022, Constellation shall have provided to the HOF Entities written notice of its election to terminate this Agreement pursuant to this Section 4.2(c) and (ii) during the period commencing on the date hereof and concluding on December 1, 2022, Constellation shall not have accrued (or been required to accrue in accordance with U.S. generally accepted accounting principles) an amount of New Business (as defined below) of not less than the amount of Sponsorship Fees actually paid by Constellation to the HOF Entities prior to December 1, 2022. [***] Constellation will provide a monthly report to the HOF Entities as to all New Business contracted from the previous month and a pipeline of all active and lost opportunities. In January of each calendar year Constellation shall allow, at the written request and expense of the HOF Entities, the HOF Entities the right to audit during normal business hours all relevant Constellation records related to New Business generated during the immediately preceding calendar year. (d) Remedies; Effect of Termination or Expiration. (i) HOF Entity Remedies. In the event of an Event of Default by Constellation which is not cured within the applicable grace or cure period, the HOF Entities shall have the right, in their sole discretion, (A) to terminate this Agreement, (B) to remove immediately any advertising signs and/or promotional materials covered by this Agreement, and/or (C) to assert any and all other remedies which the HOF Entities may have under this Agreement and/or pursuant to law and/or equity. (ii) Constellation Remedies. In the event of an Event of Default by the HOF Entities (or either of them) which is not cured within the applicable grace or cure period, Constellation shall have the right, in its sole discretion, (A) to terminate this Agreement and/or (B) to assert any and all other remedies which Constellation may have under this Agreement and/or pursuant to law and/or equity. (iii) Effect of Termination or Expiration. In the event of a termination of this Agreement by either Party for any reason, or upon the expiration of the Term, the Parties agree that all representations and warranties made under this Agreement and the indemnification provisions set forth in Section 5.2 for any claims, demands, causes of action, suits or judgments by third parties or losses, liabilities, costs or expenses which may arise on or before the effective date of termination shall survive. In the event of any termination of this Agreement, this Agreement shall forthwith become wholly void and of no further force and effect and there shall be no liability on the part of the HOF Entities (or either of them) or Constellation, except that the provisions of Section 3.3(a), this Section 4.2(d), Section 5.2 (with respect to the period prior to termination) and Article 6 (other than Section 6.7 and Section 6.9) shall survive any such termination of this Agreement. ARTICLE 5 + +REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION 5.1 Representations and Warranties. (a) Each of the HOF Entities and Constellation represents and warrants that: (i) such Party has the requisite right and authority to enter into this Agreement; + +9 + +Source: GPAQ ACQUISITION HOLDINGS, INC., S-4/A, 1/23/2020 + + + + + +(ii) such Party has duly authorized the execution and delivery of this Agreement, and such execution and delivery and the performance by such Party of its obligations hereunder does not and will not violate or cause a breach of any other agreements or obligations to which such Party is a party or by which such Party is bound, and no approval or other action by any governmental authority or agency is required in connection herewith; (iii) such Party is duly organized and in good standing under the laws of its state of organization; (iv) this Agreement is a legal, valid and binding obligation of such Party and is enforceable against such Party in accordance with its terms, except to the extent that enforcement thereof may be limited by bankruptcy, insolvency or other similar laws affecting creditors' rights generally; (v) no consent of any other person or entity is required for execution by such Party of this Agreement and/or performance by such Party under this Agreement; and (vi) there is no litigation pending or, to the knowledge of such Party, threatened against such Party which would prevent or hinder the consummation of the transactions contemplated by this Agreement or its obligations hereunder or relative to any of the matters which are the subject of this Agreement. (b) Constellation represents and warrants that, to Constellation's knowledge as of the date of this Agreement: (i) except with respect to the HOF Entity Marks (other than the name of the Center for Excellence and each of the Co- Branded Center for Excellence Logos), the use or other exploitation of any of Constellation's Intellectual Property (as defined below) pursuant to this Agreement shall not infringe or otherwise violate the rights of any person or entity at any time, either during the Term or thereafter; (ii) no other person or entity is infringing the rights of Constellation with respect to Constellation's Marks, or any copyrights and/or other intellectual property owned by, licensed to or used by Constellation (collectively "Constellation's Intellectual Property"); and (iii) no claims against Constellation have been asserted in writing by any person or entity with respect to the ownership, validity, enforceability, misappropriation or use of any of Constellation's Intellectual Property or challenging or questioning the validity or effectiveness of Constellation's Intellectual Property. + +10 + +Source: GPAQ ACQUISITION HOLDINGS, INC., S-4/A, 1/23/2020 + + + + + +5.2 Indemnification. (a) By Constellation. Constellation agrees to defend, indemnify and hold harmless the HOF Entities and their respective shareholders, partners, officers, directors, employees, successors, assigns, representatives, servants and agents (collectively, the "HOF Entity Indemnified Persons") from and against, and Constellation waives any claim for contribution or indemnity against any HOF Entity Indemnified Person with respect to, any and all claims, suits, actions, claims, monetary damages, losses, liabilities, fines, fees, penalties, costs and expenses ("Losses"), and all reasonable attorneys' fees and expenses, including court costs and expert witness fees and costs, incurred in connection with Losses and/or enforcement of this Agreement ("Indemnified Losses") resulting from or arising out of (i) the use or display by the HOF Entities (or either of them) of Constellation's Marks or the Co-Branded Center for Excellence Logos (in each case, as permitted by this Agreement); (ii) the promotion, advertising, distribution and/or sale of any Products & Services by Constellation pursuant to any license granted by the HOF Entities (or either of them) herein; (iii) any breach by Constellation of its representations, warranties and/or obligations under this Agreement; or (iv) the subject matter, content or copy contained in any advertising material, promotional material, signage or intellectual property furnished by Constellation in accordance with this Agreement, including any and all claims for infringement of trademark rights, copyrights, testimonials, rights of publicity, or the rights to use names, likenesses, slogans, photographs or patents. Indemnity for Products & Services provided by Constellation hereunder shall be governed by the terms of the applicable Second Level Agreement(s). (b) By the HOF Entities. Each HOF Entity agrees, on a several but not joint basis, to defend, indemnify and hold harmless Constellation, and its shareholders, partners, officers, directors, employees, successors, assigns, representatives, servants and agents (collectively, the "Constellation Indemnified Persons") from and against, and the HOF Entities waive any claim for contribution or indemnity against any Constellation Indemnified Person with respect to, any and all Indemnified Losses resulting from or arising out of (i) the use or display by Constellation of HOF Entity Marks as permitted by this Agreement or (ii) any breach by such HOF Entity of its representations, warranties and/or obligations under this Agreement. (c) Notice of Claim. In the event that an HOF Entity seeks indemnification on behalf of an HOF Entity Indemnified Person, or Constellation seeks indemnification on behalf of a Constellation Indemnified Person, such Party seeking indemnification (the "Indemnified Party") shall give reasonably prompt notice to the indemnifying Party (the "Indemnifying Party") specifying the facts constituting the basis for such claim and the amount, to the extent known, of the claim asserted; provided, however, that the right of a person or entity to be indemnified hereunder shall not be adversely affected by a failure to give such notice unless, and then only to the extent that, any Indemnifying Party is actually irrevocably and materially prejudiced thereby. Subject to the terms hereof, the Indemnifying Party shall pay the amount of any valid claim not more than ten (10) days after the Indemnified Party provides notice to the Indemnifying Party of such amount. + +11 + +Source: GPAQ ACQUISITION HOLDINGS, INC., S-4/A, 1/23/2020 + + + + + +(d) Right to Contest Claims of Third Persons. If an Indemnified Party is entitled to indemnification hereunder because of a claim asserted by any claimant (other than a Constellation Indemnified Person or HOF Entity Indemnified Person) (a "Third Person"), the Indemnified Party shall give the Indemnifying Party reasonably prompt notice thereof after such assertion is actually known to the Indemnified Party; provided, however, that the right of a person or entity to be indemnified hereunder in respect of claims made by a Third Person shall not be adversely affected by a failure to give such notice unless, and then only to the extent that, an Indemnifying Party is actually irrevocably and materially prejudiced thereby. The Indemnifying Party shall have the right, upon written notice to the Indemnified Party, and using counsel reasonably satisfactory to the Indemnified Party, to investigate, contest or settle the claim alleged by such Third Person (a "Third Person Claim"), provided that the Indemnifying Party has unconditionally acknowledged to the Indemnified Party in writing its obligation to indemnify the persons and entities to be indemnified hereunder with respect to such Third Person Claim and to discharge (and does in fact so discharge) any cost or expense arising out of such investigation, contest or settlement. The Indemnified Party may thereafter participate in (but not control) the defense of any such Third Person Claim with its own counsel at its own expense, unless separate representation is necessary to avoid a conflict of interest, in which case such representation shall be at the expense of the Indemnifying Party. Unless and until the Indemnifying Party so acknowledges its obligation to indemnify, the Indemnified Party shall have the right, at its option, to assume and control defense of the matter and to look to the Indemnifying Party for the full amount of the reasonable costs of defense. The failure of the Indemnifying Party to respond in writing to the aforesaid notice of the Indemnified Party with respect to such Third Person Claim within thirty (30) days after receipt thereof shall be deemed an irrevocable election not to defend the same. If the Indemnifying Party does not so acknowledge its obligation to indemnify and assume the defense of any such Third Person Claim, (i) the Indemnified Party may defend against such claim using counsel of its choice, in such manner as it may reasonably deem appropriate, including, but not limited to, settling such claim, after giving notice of the same to the Indemnifying Party, on such terms as the Indemnified Party may reasonably deem appropriate, and (ii) the Indemnifying Party may participate in (but not control) the defense of such action, with its own counsel at its own expense. If the Indemnifying Party thereafter seeks to question the manner in which the Indemnified Party defended such Third Person Claim or the amount or nature of any such settlement, the Indemnifying Party shall have the burden to prove by clear and convincing evidence that conduct of the Indemnified Party in the defense and/or settlement of such Third Person Claim constituted gross negligence or willful misconduct. The Parties shall make available to each other all relevant information in their possession relating to any such Third Person Claim and shall cooperate in the defense thereof. ARTICLE 6 + +MISCELLANEOUS 6.1 Notices. All notices, requests, demands, and other communications required or permitted under this Agreement shall be in writing and shall be deemed to have been duly given and made upon being delivered either by courier or overnight delivery, or deposited, postage prepaid, certified or registered mail, return receipt requested, in the United States Mail to the Party for whom it is intended, bearing the address shown below for such Party or such other address as may be designated in writing hereafter by such Party: All such notices to the HOF Entities (or either of them) shall be sent to: National Football Museum, Inc. d/b/a Pro Football Hall of Fame 2121 George Halas Drive Northwest Canton, Ohio 44708 Attention: David Baker and Pat Lindesmith + +12 + +Source: GPAQ ACQUISITION HOLDINGS, INC., S-4/A, 1/23/2020 + + + + + +and HOF Village, LLC c/o IRG Realty Advisors 4020 Kinross Lakes Parkway, Suite 200 Richfield, Ohio 44286 Attention: Brian Parisi and Carol Smith with a copy to: Bryan Cave Leighton Paisner LLP One Metropolitan Square 211 N. Broadway, Suite 3600 St. Louis, Missouri 63102 Attention: Ryan S. Davis All such notices to Constellation shall be sent to: Constellation NewEnergy, Inc. 1310 Point Street Baltimore, Maryland 21231 Attention: Kristina Gregory with a copy to: Constellation NewEnergy, Inc. 4 Houston Center 1221 Lamar Street, Suite 750 Houston, Texas 77010 Attention: Nina Jezic 6.2 Assignment. Neither this Agreement nor any right or obligation hereunder may be assigned or otherwise transferred by either Party without the prior written consent of the other Party; provided, however, that each HOF Entity may, upon written notice to Constellation but without a requirement to obtain Constellation's consent, transfer, assign, convey, pledge or encumber, in whole or in part, any and all of its rights under this Agreement as security in connection with a loan transaction. Assignment of Second Level Agreements will be governed by the terms of the respective Second Level Agreement. 6.3 Entire Agreement. This Agreement, together with the Exhibits attached hereto, which are hereby incorporated herein by this reference, constitutes the entire agreement with respect to the subject matter hereof between the Parties and shall become a binding and enforceable agreement among the Parties and their respective successors and permitted assigns commencing as of the date hereof. No prior verbal or written agreement between the Parties with respect to the subject matter hereof shall survive the execution of this Agreement. + +13 + +Source: GPAQ ACQUISITION HOLDINGS, INC., S-4/A, 1/23/2020 + + + + + +6.4 Modifications. No amendment or modification of any of the terms and conditions of this Agreement shall be effective unless such modification is expressed in writing and executed by each of the Parties. 6.5 Governing Law; Venue. This Agreement shall be governed by and construed in accordance with the laws of the State of Ohio, without reference to principles of conflicts of law. Any suit or action filed or otherwise commenced in connection with this Agreement must be filed and litigated in an appropriate court located in the City of Canton, Ohio (provided, however, that if the suit or action involves a claim for which federal courts have exclusive jurisdiction, then such suit or action must be filed in the U.S. District Court for the Northern District of the State of Ohio in Akron, Ohio), or such other venue as deemed appropriate by the HOF Entities. In the event of a dispute between an HOF Entity and Constellation regarding their rights and duties hereunder, the non-prevailing Party in any ensuing litigation shall pay the reasonable attorneys' fees and expenses of the prevailing Party (including costs of discovery and expert witness fees). 6.6 Subordination. This Agreement shall in all respects be subordinate to any and all agreements executed prior to the date of this Agreement between the HOF Entities and Johnson Controls, Inc. or any of its affiliates. In the event of any conflict between the terms of this Agreement and the terms of any such agreement, this Agreement shall be deemed superseded by such conflicting provision of such other agreement. 6.7 Force Majeure. (a) Fire or Other Damage to Village. If the Village is damaged by fire, earthquake, act of God, the elements or other casualty or is condemned by an authority exercising the powers of eminent domain or the Village is transferred in lieu of the exercise of such power so as to render the Village unusable for its intended purpose at any time during the Term, then the HOF Entities shall have the option, but not the obligation, to repair the damage or loss. The HOF Entities shall notify Constellation as to whether the HOF Entities shall effect such repair and restoration within thirty (30) days after the casualty. If the HOF Entities notify Constellation that the HOF Entities are electing to effect such repairs and restoration, this Agreement shall continue in full force and effect; provided, however, that the Term shall be extended by such number of days as equals the length of the period from the date of the event until such repairs and restoration are complete. If the HOF Entities notify Constellation that the HOF Entities are electing not to effect such repairs and restoration, then this Agreement and all rights granted hereunder shall terminate as of the date of such fire or other casualty. (b) Other. Except as otherwise set forth herein, neither Party shall be liable or responsible for any failure to perform its obligations hereunder, which failure is caused or brought about in any manner beyond the control of such Party, including, but not limited to, the breakdown or failure of apparatus, equipment, or machinery employed in its supply of said services, any temporary stoppage for the repair, improvement or enlargement thereof, or any other act or condition beyond its reasonable control, other than such Party's inability to perform payment obligations. + +14 + +Source: GPAQ ACQUISITION HOLDINGS, INC., S-4/A, 1/23/2020 + + + + + +(c) Tolling. In the event that, after the construction and development of the Village has been substantially completed, the Village is not usable for a period of at least thirty (30) days as a result of the events described under this Section 6.7 and unless this Agreement shall have been terminated in accordance with its terms, the Term shall be extended for that period of time (after substantial completion) which the Village was not usable and the start and end dates of each period shall be adjusted to reflect the number of days (after substantial completion) in which the Village was not usable for all purposes of this Agreement, including without limitation the expiration date of the Term. 6.8 Not a Lease or License of the Village. This Agreement will not constitute a lease or license of any part of the Village. It will represent solely a contractual obligation of the HOF Entities to provide to Constellation certain other benefits hereunder. 6.9 Insurance. Constellation shall, at its own expense, secure and maintain in full force and effect throughout the Term (a) insurance coverage for defamation, trademark and service mark infringement, unfair competition, copyright infringement, and infringement of a person's right of publicity and right of privacy from a carrier with an A.M. Best rating of A10 or better in an amount not less than [***] per occurrence; and (b) a general liability insurance policy from a carrier with an A.M. Best rating of A10 or better in an amount not less than [***] in aggregate. The liability limits may be met with any combination of primary and excess or umbrella insurance policy limits. Constellation shall provide the HOF Entities with certificates of insurance, naming each HOF Entity as an additional insured, evidencing the existence of such insurance policies within ten (10) days after execution of this Agreement. 6.10 Confidentiality. Without limiting the generality of the obligations set forth in the Mutual Confidentiality Agreement between Constellation and HOFV dated as of April 28, 2018 (which shall survive in accordance with its terms), the Parties hereto agree to maintain in confidence the terms and conditions of this Agreement (except with respect to their owners, lenders and advisors, each of whom is to be made aware of and instructed to comply with this confidentiality provision) unless the proposed disclosure of specific terms or conditions hereof is authorized in advance by the other Party or is otherwise required by law. In the event that either Party or any of its representatives becomes legally compelled to disclose any of the terms or conditions of this Agreement, such Party shall, to the extent reasonably practicable, provide the other Party with prompt written notice before such disclosure, sufficient to enable such other Party either to seek a protective order, at its expense, or another appropriate remedy preventing or prohibiting such disclosure or to waive compliance with the provisions of this Section, or both. 6.11 Press Releases. The HOF Entities and Constellation shall consult with each other before issuing any press release or scheduling any press conference or conference call with media members or other third parties with respect to this Agreement or the transactions contemplated hereby. The HOF Entities and Constellation shall mutually agree on the content of any such press release prior to its publication. 6.12 No Defamation or Disparagement. No Party will make, issue or release any statement which results in any defamation or disparagement of the Village, the City of Canton, the other Party, or any team, person, performer or organization involved in events at the Village. + +15 + +Source: GPAQ ACQUISITION HOLDINGS, INC., S-4/A, 1/23/2020 + + + + + +6.13 Independent Contractor. The Parties shall be and act as independent contractors, and under no circumstances shall this Agreement be construed as one of agency, partnership, joint venture or employment among the Parties. 6.14 Headings. The headings used in this Agreement are solely for convenience and shall not affect the meaning or interpretation of the provisions set forth herein. 6.15 Counterparts. This Agreement may be executed in multiple counterparts, and on separate counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument. 6.16 Waiver. No action, other than a notice by a Party to another Party specifically stating that such notice has the effect of waiver, shall constitute a waiver of any particular breach or default of such other Party. No such waiver notice from a Party shall waive any other Party's failure to fully comply with any other term, condition, or provision of this Agreement, irrespective of any knowledge any HOF Entity or Constellation officer, manager, employee, or agent may have of any breach or default of, or noncompliance with, such other term, condition, or provision. No waiver of full performance by a Party shall be construed, or operate, as a waiver of any subsequent default of any of the terms, covenants and conditions of this Agreement. The payment or acceptance of fees or charges for any period after a default shall not be deemed a waiver of any right or acceptance of defective performance. 6.17 Severability. If any provision of this Agreement shall be determined to be contrary to law and unenforceable by any court of law, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby are not affected in any manner materially adverse to any Party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the extent possible. 6.18 Third Party Beneficiaries. Except for the HOF Entity Indemnified Persons and Constellation Indemnified Persons, (i) this Agreement is intended only for the benefit of the Parties hereto, the affiliates of the HOF Entities and any successors, permitted assigns or substitutes as expressly provided for in this Agreement, (ii) no other person or entity is intended to be benefited in any way by this Agreement and (iii) this Agreement shall not be enforceable by any other person or entity. 6.19 Cost and Expenses. Except as otherwise set forth in this Agreement, each Party shall bear its own costs and expenses in connection with the preparation, negotiation and execution of this Agreement and the consummation of the transactions contemplated hereby. 6.20 HOF Entity Rights and Obligations. The Parties acknowledge and agree that rights vested in the HOF Entities collectively under this Agreement shall be deemed vested in each HOF Entity and its affiliates and that obligations of the HOF Entities collectively under this Agreement may be satisfied by either HOF Entity or any of their affiliates. Without limiting the generality of the foregoing, while certain rights set forth in this Agreement may be contemplated to be provided by HOFV and other rights set forth in this Agreement may be contemplated to be provided by PFHOF (or by both HOF Entities), each of such rights may be provided by HOFV, PFHOF and/or any of their respective affiliates. [Signature Page Follows] + +16 + +Source: GPAQ ACQUISITION HOLDINGS, INC., S-4/A, 1/23/2020 + + + + + +IN WITNESS WHEREOF, the undersigned have caused this Agreement to be duly executed as of the date first set forth above. HOFV: HOF VILLAGE, LLC By: /s / Brian Parisi Name: David Baker Title: Chief Financial Officer PFHOF: NATIONAL FOOTBALL MUSEUM, INC., D/B/A PRO FOOTBALL HALL OF FAME By: /s / Brian Parisi Name: David Baker Title: President & CEO CONSTELLATION NEWENERGY, INC. By: /s/ Mark P. Huston Name: Mark P. Huston Title: President & Constellation Retail President / CEO CNE + +17 + +Source: GPAQ ACQUISITION HOLDINGS, INC., S-4/A, 1/23/2020 + + + + + +EXHIBIT A PRODUCTS & SERVICES [Redacted] + +Exh. A-1 + +Source: GPAQ ACQUISITION HOLDINGS, INC., S-4/A, 1/23/2020 + + + + + +EXHIBIT B FORM OF SUPPLIER COMPONENT QUESTIONNAIRE [Redacted] + +Exh. B-1 + +Source: GPAQ ACQUISITION HOLDINGS, INC., S-4/A, 1/23/2020 + + + + + +EXHIBIT C FORMS OF SECOND LEVEL AGREEMENTS [Redacted] + +Exh. C-1 + +Source: GPAQ ACQUISITION HOLDINGS, INC., S-4/A, 1/23/2020 + + + + + +EXHIBIT D CONSTRUCTION SCHEDULE National Youth Football & Sports Complex 4t h Quarter 2019 The Center for Excellence 3rd Quarter 2020 Hall of Fame Hotel & Conference Center 4t h Quarter 2020 Hall of Fame Promenade (restaurants, retail & residential) 4t h Quarter 2020 Player Care Center including Legends Landing/Residential 2nd Quarter 2021 The Center for Athletic Performance & Safety 2nd Quarter 2021 Hall of Fame Experience (amusement/water park recreation) 2nd Quarter 2021 + +Exh. D-1 + +Source: GPAQ ACQUISITION HOLDINGS, INC., S-4/A, 1/23/2020 + + + + + +EXHIBIT E SPONSORSHIP RIGHTS [Redacted] + +Exh. E-1 + +Source: GPAQ ACQUISITION HOLDINGS, INC., S-4/A, 1/23/2020 + + + + + +EXHIBIT F HOF ENTITY MARKS JOHNSON CONTROLS HALL OF FAME VILLAGE PRO FOOTBALL HALL OF FAME CONSTELLATION CENTER FOR EXCELLENCE All Co-Branded Center for Excellence Logos + +Exh. F-1 + +Source: GPAQ ACQUISITION HOLDINGS, INC., S-4/A, 1/23/2020 + + + + + +EXHIBIT G CONSTELLATION'S MARKS CONSTELLATION + +AMERICA'S ENERGY CHOICE + +Exh. G-1 + +Source: GPAQ ACQUISITION HOLDINGS, INC., S-4/A, 1/23/2020 + + + + + +EXHIBIT H SPONSORSHIP FEES AND ACTIVATION FUND PROCEEDS [Redacted] EXH. H-1 + +Source: GPAQ ACQUISITION HOLDINGS, INC., S-4/A, 1/23/2020 \ No newline at end of file diff --git a/full_contract_txt/GridironBionutrientsInc_20171206_8-K_EX-10.1_10972555_EX-10.1_Endorsement Agreement.txt b/full_contract_txt/GridironBionutrientsInc_20171206_8-K_EX-10.1_10972555_EX-10.1_Endorsement Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..6b8f79c40788e1fde2560ba7f6c0fb9ebd2989a6 --- /dev/null +++ b/full_contract_txt/GridironBionutrientsInc_20171206_8-K_EX-10.1_10972555_EX-10.1_Endorsement Agreement.txt @@ -0,0 +1,107 @@ +EXHIBIT 10.1 ENDORSEMENT AGREEMENT This Endorsement Agreement ("Agreement") made October 30, 2017, between National Football League Alumni - Northern California Chapter ("NFLA-NC"), a charitable corporation organized under the laws of California, having its principal office at 1311 Madison Avenue, Redwood CA 94061; National Football League Alumni, Inc. ("NFLA"), a charitable corporation organized under the laws of Florida, having its principal office at 8000 Midlantic Drive, 130 S., Mount Laurel, NJ. 08054 and Food For Athletes, Inc. a corporation organized under the laws of California / Gridiron BioNutrients™, a corporation organized under the laws of Nevada having their principal office(s) at 1119 West 1st Ave., STE G, Spokane, WA 99201 (collectively the "Company"). RECITALS A. Whereas, NFLA is a nationwide group of former National Football League players, coaches, and other employees whose mission is to serve, assist and inform players and their families. The association offers a variety of medical, financial and social programs to help members lead healthy, productive and connected lives. B. Whereas, NFLA-NC is a local Chapter of the NFLA and supports the organizations "Caring for Kids" initiative through fundraising for youth-related charities. C. The Company desires to obtain the rights to use the Pro Football Legends Logo of the NFLA in connection with the advertisement and promotion of certain of its products. An image of the Pro Football Legends Logo is depicted in Exhibit A. D. The NFLA agrees to license such rights to the Company. In consideration of the matters described above, and of the mutual benefits and obligations set forth in this Agreement, the parties agree as follows: SECTION ONE. DEFINITIONS As used in this Agreement, the following terms shall be defined as follows: A. "Contract Period" shall mean that period of time of three (3) years commencing on November 1st, 2017 and concluding November 2nd, 2020, unless terminated sooner or extended as provided in this Agreement. B. "Contract Territory" shall mean worldwide. C. "Contract Year" shall mean each of the consecutive 12-month periods beginning on the effective date of the Agreement of the Contract Period. 1 + +Source: GRIDIRON BIONUTRIENTS, INC., 8-K, 12/6/2017 + + + + + + D. "Gross Sales" shall mean total revenues, under generally accepted accounting principles, from sales of the Licensed Products, but does not include any revenue from sales, use or other transaction taxes, duties, handling, graphics, embroidery or shipping. E. "Net Sales" shall mean Gross Sales less Product returns, trade discounts, samples, allowances, value added services, markdowns, customer charge backs and liquidation sales (substantially discounted and out of ordinary distribution channel) of Licensed Products. F. "Licensed Products" shall mean BlackMP Living Water, BlackMP Concentrate, Zezel Probiotic Water, Zayin Sports Water, Gridiron MVP™ and Gridiron MVP™ Concentrate using the Pro Football Legends Logo on the Licensed Products' affixed labels, hang-tags or packaging. Other products of the Company may be added to the list of Licensed Products during the Contract Period by written amendment to this Agreement. All amendments to this Agreement must be signed by all parties to this Agreement. G. "Products" shall mean goods manufactured, distributed or otherwise sold by the Company. H. "Licensed Marks" shall mean in connection with the rights and benefits granted to Company hereunder as set forth in General Terms. Company may utilize only the logo and other trademarks listed on Exhibit A (the "Licensed Marks") during the Term and within the Territory solely in connection with advertising and promotional materials that identify Company as a sponsor of the Pro Football Legends, provided that NFLA first approves all such uses in writing. Any use of the Licensed Marks will bear the trademark and/or copyright notices required by NFLA to facilitate its trademark protection program and will be a "work made for hire" for NFLA. All of Company's uses of the Licensed Marks shall inure to the benefit of the NFLA. After the expiration or termination of this Agreement, Company will refrain from further use of the Licensed Marks used pursuant to this Agreement. Company will not sublicense pass-through or otherwise grant to any third parties the rights granted to Company hereunder without the NFLA prior written consent, including but not limited to the right to use the Licensed Marks. Company acknowledges that this Agreement does not grant Company any rights with respect to any other NFLA Marks (defined below), the name, likeness, signature, or other attributes of any NFLA member or other individual, or any audio or video of any NFLA event. Company agrees that the quality of all services offered by Company under the Licensed Marks will conform to Licensor's written quality control standards and that Company will annually provide to NFLA samples of any advertising and marketing materials that use the Licensed Marks. I. "Trademark Protection" for the purposes of this agreement, "NFLA MARKS" means the names, symbols, emblems, designs, and colors of the NFLA, including but not limited to the Licensed Marks. Company acknowledges and agrees that all right, title and interest in and to the NFLA marks belongs to the NFLA. Company agrees that NFLA marks possesses a special, unique and extraordinary character that makes difficult assessment of the monetary damages that would be sustained by their unauthorized use. Company recognizes that irreparable injury would be caused by unauthorized use of any of the NFLA marks, and agrees that injunctive and other equitable relief would be appropriate in the event of such unauthorized use, and that such remedy would not be exclusive of other legal remedies available to NFLA. Company recognizes that great value and goodwill associated with NFLA marks belongs to the NFLA and that the NFLA marks have secondary meaning. 2 + +Source: GRIDIRON BIONUTRIENTS, INC., 8-K, 12/6/2017 + + + + + + J. "NFLA Identification" means the right to use, subject to the provisions of this Agreement, the NFLA name, and Pro Football Legends Logo and any other means of endorsement by the NFLA used in connection with the advertisement and promotion of the Company and the Licensed Products. K. "One (1) Unit" shall represent $0.05 (1 Unit = $0.05USD) for purposes of defining the monetary donation allocation of the Company's sold products to the NFLA-NC, specific to the terms of this Agreement. A Licensed Product in no circumstance shall be valued at less than one (1) full Unit and under no circumstance shall a Unit be fractionalized (if required rounded up to the nearest whole number). SECTION TWO. GRANT OF RIGHTS In consideration of the remuneration to be paid to the NFLA-NC pursuant to this Agreement, the NFLA grants to Company and to its authorized distributors and sublicenses the right and license during the Contract Period to use the NFLA Identification solely in connection with the advertisement, marketing and promotion of the Products within the Contract Territory as set forth in this Agreement. NFLA agrees not to grant the right to use the NFLAs Identification to anyone other than Company in connection with the advertisement and promotion of Products. It is understood that Company, its authorized distributors and sublicenses may not use the name of the NFLA in connection with any items for sale or resale, other than the Products as specified in this Agreement. The foregoing rights to use the name of the NFLA is limited to television, radio and print advertising, advertising published over the Internet (provided that such material is limited to advertising or Product promotion only), public relations and marketing materials, point-of-sale displays, free standing inserts, videos shown to customers and consumers, catalogs for customers and consumers, direct mail (including e-mail) and billboards. Company shall ensure that all uses of the name of the NFLA comply with applicable law. SECTION THREE. PRIOR APPROVAL Company agrees that no use of the name of the NFLA Identification nor any item used in connection with the name of NFLA Identification (including any Licensed Product) will be made under this Agreement unless and until the same is approved by the NFLA. The NFLA agrees that any material, advertising or otherwise, submitted for approval as provided in this section may be deemed by Company to have been approved under this section if the same is not disapproved in writing within ten (10) business days after receipt of the material. The NFLA agrees that it will reasonably cooperate with Company and that any material submitted under this section will not be unreasonably disapproved and, if it is disapproved, that Company will be advised of the specific grounds for disapproval. If Company desires immediate approval of advertising material, Company shall have the right to directly contact the NFLA's authorized agent to obtain such approval. Company agrees to protect, indemnify and hold harmless the NFLA and their authorized agents, or any of them, from and against any and all expenses, damages, claims, suits, actions, judgments and costs whatsoever, arising out of, or in any way connected with any advertising material furnished by, or on behalf of Company, except with respect to any inaccurate information furnished by them expressly for use in such advertising. 3 + +Source: GRIDIRON BIONUTRIENTS, INC., 8-K, 12/6/2017 + + + + + + SECTION FOUR. REMUNERATION In consideration of the endorsement rights granted under this Agreement, Company shall provide the following remuneration: A. An initial one-time license fee of $35,000.00USD (Thirty-Five Thousand Dollars) payable to the NFLA-NC; B. A one-time $10,000USD (Ten Thousand Dollars) promotional fee payable to NFLA. The $10,000 promotional fee shall be payable in four (4) quarterly payments beginning in 2018: Q1 ($2500); Q2 ($2500); Q3 ($2500); Q4 ($2500). Each payment shall be delivered by no later than the 10t h day of the first month of each quarter. C. A *donation of $0.05 per Unit sold of Licensed Products within the Contract Territory payable to the **NFL Alumni Northern California Chapter. Donated amounts will be allocated and dispersed to the Northern California Chapter beginning on the first full quarter [three (3) month period] of the Agreement and continue on a quarterly basis thereafter for the term of this Agreement. Where the following per Unit conversion shall apply for the term of this Agreement: + + a. (1) Bottle of BlackMP LivingWater = 1 Unit + + b. (1 ) 4oz bo t t l e o f BlackMPConcentrate = 30 Units + + c. (1) Bottle of Zezel ProbioticWater = 1 Unit + + d. (1) Bottle of Zayin Sports Water = 1 Unit e. (1) Bottle Gridiron MVP™ Water= 1 Unit + + f. (1) 4oz bottle of Gridiron MVP™Concentrate = 30 Units + + _____________ * The NFLA-NC will donate 15% of the above described proceeds to the NFLA. + + ** The Company will provide to the NFLA-NC upon request the most recent quarterly sales report of the Company'sLicensed Products. D. Product Commitment. Up to Two-thousand (2,000) 4oz bottles of BlackMP Living Water Concentrate to be used as a "value appeal" for annual membership renewal (up to a $220,000 value) a l located to the NFLA and provide a combination/assortment of bottle water to NFLA-NC for display and use though out the term of the Agreement at the NFLA-NC facilities. The Company agrees to pay for all shipping costs of the Products under the Product Commitment to the fulfillment center, currently Sharp Marketing, located in Fort Lauderdale, FL and to any subsequent fulfillment center that is contracted by the NFLA to provide distribution to existing and new NFLA members. E. Affiliated Partnership Commitment. Company agrees to facilitate and provide in good-faith their affiliated partnership discount program benefits and access to applicable health and wellness research, information and protocols to NFLA members (Current partnership benefit includes providing NFLA members with a 15% discount on all Kraski's Nutrition Real Products For Real People); and F. Marketing Commitment. Company agrees that it will continue in good-faith to produce and market Licensed Products in the same manner that it is currently producing and marketing such items as of September 2017, unless Company and the NFLA/NFLA-NC believe it is not commercially reasonable to continue to produce and market the Licensed Products. 4 + +Source: GRIDIRON BIONUTRIENTS, INC., 8-K, 12/6/2017 + + + + + + SECTION FIVE. SERVICES OF COMPANY A. Resource Call Center. For the term of this Agreement Company shall provide a call in center whereby NFLA members can call for information, ask questions, and consult with Company's staff on details and specifics of the Company's Products and replenishment program. SECTION SIX. SERVICES OF NFLA-NC A. If Company desires to use the services of the NFLA-NC and/or any of its officers and members as a model in connection with Company advertising to promote its Products or as a part of a special promotional appearance for the Company, the NFLA-NC agrees, at the request of Company, to provide a good faith effort services of the officers or members of the NFLA for a reasonable amount of time as mutually agreed upon by all parties and at places reasonably convenient to each parties schedule. Each day shall not exceed a reasonable number of hours unless otherwise mutually agreed upon. The Company agrees that it will reimburse the NFLA-NC and if applicable the NFLA or its officers/members for all reasonable travel, lodging and meal expenses incurred by the NFLA / NFLA-NC or its officers/members in connection with such services. The Company understands that failure to use services of a member of the NFLA / NFLA-NC pursuant to this section shall not result in any reduction in payments to NFLA-NC under this Agreement. The obligations of the NFLA / NFLA-NC to provide services of its officers/members under this Agreement are subject to the condition that payments to NFLA-NC are current and up to date. B. Should Company use any member of the NFLA-NC in television advertising to promote Company's Products, Company will make all applicable required union scale and pension and welfare payments. C. During the Contract Period, NFLA-NC shall make a good faith effort to assure that its members shall wear Company Products at all professional and promotional events and at all media appearances where appropriate, and when not in conflict with its members existing agreements. It is agreed that the logo or name of Company (the "Company Logo") shall be affixed to an appropriate location (i.e. shoulder-sleeve and/or back] of all Company Products that members of the NFLA-NC wear. Company agrees that it will be responsible for, and the cost of, affixing the Company Logo on all such Company Products. Company acknowledges that other locations on the NFLA-NC Products are reserved for NFLA-NC's other sponsors. Furthermore, Company understands that if the NFLA-NC or its Officers/members participate in a special team event where there is an official uniform, then representatives of the NFLA-NC are permitted to wear such uniform during such event. D. The NFLA shall list the Company as a sponsor on all of its promotional materials, websites or other electronic media. The NFLA shall allow the Company to participate in local and national NFLA functions (i.e. Super Bowl Parties, Award Ceremonies, Banquets, etc…) at the Company's own expense. E. The NFLA shall promote Company and Company's products to NFLA database and audience by deliverables listed in Exhibit B. 5 + +Source: GRIDIRON BIONUTRIENTS, INC., 8-K, 12/6/2017 + + + + + + SECTION SEVEN. PAYMENTS All payments shall be made by wire transfer drawn to the account of NFLA-NC no later than ten (10) business days after the end of each quarter as follows: $0.05 per Unit as described herein of Company's Products sold in the Contract Territory payable to NFLA-NC. Donated amounts will be allocated and dispersed to the NFLA-NC beginning on the first full quarter (three month period) of the Agreement and continue on a quarterly basis thereafter for the term of this Agreement. Past due payments under this Agreement shall bear interest at the rate of: (a) 1% per month; or (b) the maximum interest rate permissible under law, whichever is less. All amounts in this section are in United States dollars. SECTION EIGHT. AUTHORIZED AGENT Each party shall designate its authorized agent for all purposes under this Agreement. All notices or submissions to be made or delivered by the Company, the NFLA or the NFLA-NC pursuant to this Agreement shall be delivered to the agent's address below, free of all charges (for example, shipping charges and customs charges). If any such shipping charges are paid by another party or by its authorized agent, the corresponding party agrees to make prompt reimbursement. All notices or submissions to be made or delivered to Company pursuant to this Agreement shall be delivered to: The Company Food For Athletes/Gridiron BioNutrients™ Attention: Darren Long 1147 N Roseburg Ct STE A, Visalia CA, 93291 NFLA-NC National Football League Alumni - Northern California Chapter Attention: Russell Isaacson - Comptroller 1311 Madison Avenue Redwood CA 94061 NFLA National Football League Alumni, Inc. Attention: Elvis Gooden 8000 Midlantic Drive, 130 S. Mount Laurel, NJ. 08054 6 + +Source: GRIDIRON BIONUTRIENTS, INC., 8-K, 12/6/2017 + + + + + + SECTION NINE. DEFAULT A. If either party at any time during the Contract Period shall: (i) fail to make any payment of any sum of money specified in this Agreement to be made; or (ii) fail to observe or perform any of the covenants, agreements or obligations under this Agreement (other than the payment of money), the non-defaulting party may terminate this Agreement as follows: As to a default under clause (i) above, if such payment is not made within 10 business days after the defaulting party shall have received written notice of such failure to make payment; or, as to a default under clause (ii) above, if such other default is not cured within 30 days after the defaulting party shall have received written notice specifying in reasonable detail the nature of such default. In order to be a sufficient notice under this section, any such written notice shall specify in detail each item of default and shall specify the provision of this Agreement which applies to each item of default, and shall specify in detail the action the defaulting party is required to take in order to cure each item of default. The termination rights set forth in this section shall not constitute the exclusive remedy of the non-defaulting party under this Agreement, however, and if default is made by either party under this Agreement, the other party may resort to such other remedies as such party would have been entitled to if this section had been omitted from this Agreement, subject to the terms of this Agreement. Termination under the provisions of this section shall be without prejudice to any rights or claims which the terminating party may otherwise have against the defaulting party, and if Company is the defaulting party, Company shall be responsible for any and all payments due under the terms of this Agreement in addition to other liabilities set forth above. B. If Company shall become bankrupt or insolvent, or if Company's business shall be placed in the hands of a receiver, assignee or trustee, whether by voluntary act of Company or otherwise, the Contract Period, at the election of NFLA, shall immediately terminate. SECTION TEN. USE OF THE NFLA/NFLA-NC's IDENTIFICATION AFTER TERMINATION A. Except as provided in paragraph B of this SECTION TEN, from and after the termination of the Contract Period, all of the rights of Company to the use of the name of the NFLA shall cease absolutely and Company subsequently shall not use or refer to the NFLA in advertising or promotion in any manner whatsoever. Except as provided in paragraph B below, it is further agreed that following termination of the Contract Period, Company shall not advertise, promote, distribute or sell any item whatsoever in connection with the use of any name, figure, design, logo, trademark or trade name similar to or suggestive of the NFLA. 1. Company may liquidate and sell its inventory of Licensed Products (including any inventory then in production) for a period of ninety (90) days after the termination date of the Contract Period, subject to the Company's continued obligation to pay the Fee as provided above, and will deliver the Sales Report with respect to such liquidation sales within 30 days following the end of the first reached full quarter following termination. 2. If Company has not disposed of all Licensed Products as provided in subparagraph 1 above by the end of the 90 day period, Company, at its option, may either: (a) remove or obliterate entirely from such Licensed Products (and any labels, tags, riders and the like) all references to any NFLA Identification, and then sell the same; or (b) destroy all such remaining Licensed Products. 7 + +Source: GRIDIRON BIONUTRIENTS, INC., 8-K, 12/6/2017 + + + + + + SECTION ELEVEN. TRADEMARKS Company agrees that it will not file, during the Contract Period or afterward, any application for trademark registration or otherwise obtain or attempt to obtain ownership of any trademark or trade name within the Contract Territory or in any other country of the world which consists of the NFLA Identification or any mark, design or logo intended to obtain any rights to the name of the NFLA or to identify products as being endorsed b the NFLA. SECTION TWELVE. RESERVATION OF RIGHTS All rights not specifically granted in this Agreement to Company shall remain the property of the NFLA to be used in any manner the NFLA deems appropriate. Company understands that the NFLA has reserved the right to authorize others to use the name of the NFLA within the Contract Territory and during the Contract Period in connection with all tangible and intangible items and services other than Products themselves. NFLA is not aware of any such rights that would conflict with the nature or image of Company Products. SECTION THIRTEEN. INDEMNITY Company agrees to protect, indemnify and hold harmless the NFLA / NFLA-NC and their authorized agents, or any of them, from and against any and all expenses, damages, claims, suits, actions, judgments and costs whatsoever, including reasonable attorney's fees, arising out of, or in any way connected with, actions or omissions of Company, any advertising material furnished by, or an behalf of, Company, or any claim or action for personal injury, death or other cause of action involving alleged defects in Company's Products or services. Company agrees to provide and maintain, at its own expense, general commercial and product liability insurance. SECTION FOURTEEN. SPECIAL RIGHT OF TERMINATION Company shall have the right to terminate this Agreement, upon written notice to the NFLA / NFLA-NC, if the commercial value of the NFLA's endorsement is substantially reduced because an officer of the NFLA / NFLA-NC: (i) has been charged with illegal or immoral conduct which could result in a felony conviction and such charges have not been dismissed or terminated within 90 days. Any termination pursuant to this section shall become effective on the business day next following the date of receipt by NFLA of Company's written notice to so terminate. SECTION FIFTEEN. CONTRACT EXTENSION Due to long product development lead times, Company and NFLA-NC agree to begin discussions for the renewal of this Agreement by no later than June 1st, 2020. All terms of this Agreement will automatically commence on November 1st, 2017, and expire on November 2nd, 2020. 8 + +Source: GRIDIRON BIONUTRIENTS, INC., 8-K, 12/6/2017 + + + + + + SECTION SIXTEEN. LIMITED LIABILITY Notwithstanding anything to the contrary in this Agreement, if Company incurs any expenses, damages or other liabilities (including but not limited to reasonable attorney's fees) in connection with the performance or nonperformance of any term or provision of this Agreement, NFLA's liability to Company shall not exceed the remuneration, excluding reimbursement of expenses, actually paid to NFLA by Company. In no event will NFLA be liable for any indirect, incidental, reliance, special or consequential damages arising out of the performance or nonperformance of this Agreement, whether or not NFLA had been advised of the possibility of such damages. SECTION SEVENTEEN. WAIVER The failure of either party at any time or times to demand strict performance by the other party of any of the terms, covenants or conditions set forth in this Agreement shall not be construed as a continuing waiver or relinquishment of the same and each party may at any time demand strict and complete performance by the other party of such terms, covenants and conditions. Any waiver of such rights must be set forth in writing. SECTION EIGHTEEN. SEVERABILITY If any provision of this Agreement shall be declared illegal, invalid, void or unenforceable by any judicial or administrative authority, the validity of any other provision and of the entire Agreement shall not be affected by such declaration. SECTION NINETEEN. ASSIGNMENT This Agreement shall bind and inure to the benefit of Company and NFLA and their respective successors and assigns. SECTION TWENTY. GOVERNING LAW; ARBITRATION This Agreement shall be governed by, and its provisions enforced in accordance with, the laws of California without regard to its principles of conflicts of laws. If a dispute arises under this Agreement which cannot be resolved, such dispute shall be submitted to arbitration and resolved by a single arbitrator (who shall be a lawyer not employed by or associated with either party to this Agreement) in accordance with the Commercial Arbitration Rules of the American Arbitration Association then in effect. All such arbitration shall take place at the office of the American Arbitration Association located within 225 miles of Hayward, California. Each party is entitled to depose one fact witness and all expert witnesses retained by the other party, and to conduct such other discovery as the arbitrator deems appropriate. The award or decision rendered by the arbitrator shall be final, binding and conclusive and judgment may be entered upon such award by any court. SECTION TWENTY-ONE. HEADINGS Section headings contained in this Agreement are solely for the purpose of aiding in speedy location of subject matter and are not in any sense to be given weight in the construction of this Agreement. Accordingly, in case of any question with respect to the construction of this Agreement, it is to be construed as though such section headings had been omitted. 9 + +Source: GRIDIRON BIONUTRIENTS, INC., 8-K, 12/6/2017 + + + + + + SECTION TWENTY-TWO. NO JOINT VENTURE This Agreement does not constitute and shall not be construed as constituting an association, partnership, joint venture or relationship of principal and agent, or employer and employee, between NFLA and Company. Neither party shall have any right to obligate or bind the other party in any manner whatsoever except as expressly set forth in this Agreement, nothing contained in this Agreement shall give, or is intended to give, any rights of any kind to any person. SECTION TWENTY-THREE. ENTIRE AGREEMENT This writing constitutes the entire agreement between the parties to this Agreement and may not be changed or modified except by a writing signed by the party or parties to be charged by such change or modification. The parties have executed this Agreement on October 30, 2017. Food For Athletes, Inc. / Gridiron BioNutrients™ By: /s/ Darren Long Darren Long - CEO The National Football League Alumni, Inc. By: /s/ Elvis Gooden Elvis Gooden - President NFL Alumni - Northern California Chapter By: /s/ Eric Price Eric Price - President 10 + +Source: GRIDIRON BIONUTRIENTS, INC., 8-K, 12/6/2017 + + + + + + EXHIBIT A PRO FOOTBALL LEGENDS LOGO + + 11 + +Source: GRIDIRON BIONUTRIENTS, INC., 8-K, 12/6/2017 + + + + + + EXHIBIT B NFLA agrees to promote Company and Company's products to NFLA database by: 1. E-blasts: NFLA to send a minimum of two (2) dedicated e-blasts per year to NFLA database. All e-blast communications must be approved in writing by Company; 2. Newsletter: NFLA to feature Company in Weekly Newsletter "Partner Spotlight" a minimum of four (4) times per year. All newsletter communications must be approved in writing by Company; and 3. Social Media: NFLA to feature Company on all social media channels a minimum of four (4) times per year. All newsletter communications must be approved in writing by Company. 12 + +Source: GRIDIRON BIONUTRIENTS, INC., 8-K, 12/6/2017 \ No newline at end of file diff --git a/full_contract_txt/GridironBionutrientsInc_20171206_8-K_EX-10.2_10972556_EX-10.2_Endorsement Agreement.txt b/full_contract_txt/GridironBionutrientsInc_20171206_8-K_EX-10.2_10972556_EX-10.2_Endorsement Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..dcc2cf07e06a7b080ebfb9f0a8bf6e4005ec6cad --- /dev/null +++ b/full_contract_txt/GridironBionutrientsInc_20171206_8-K_EX-10.2_10972556_EX-10.2_Endorsement Agreement.txt @@ -0,0 +1,29 @@ +EXHIBIT 10.2 ENDORSEMENT AGREEMENT ADDENDUM I This Endorsement Agreement Addendum I (the "Addendum") is made and effective November 7, 2017, BETWEEN: + + + +National Football League Alumni - Northern California Chapter ("NFLA-NC"), a charitable corporation organized under the laws of California, having its principal office at 1311 Madison Avenue, Redwood CA 94061; National Football League Alumni, Inc. ("NFLA"), a charitable corporation organized under the laws of Florida, having its principal office at 8000 Midlantic Drive, 130 S., Mount Laurel, NJ. 08054. AND: Food For Athletes, Inc. a corporation organized under the laws of California / Gridiron BioNutrients™, a corporation organized under the laws of Nevada having their principal office(s) at 1147 N Roseburg CT, STE A/B Visalia, CA 93291 (collectively the "Company"). RECITALS The NFLA, NFLA-NC and the Company (collectively the "Parties") agree that this Addendum I shall be affixed and be enforceable under the terms of the Endorsement Agreement executed by the Parties on October 30, 2017. Parties agree to the addition of Gridiron CBD H2O Probiotic™ Water to "Licensed Products" as follows: SECTION ONE. DEFINITIONS As used in this Agreement, the following terms shall be defined as follows: F. "Licensed Products" shall mean BlackMP Living Water, BlackMP Concentrate, Zezel Probiotic Water, Zayin Sports Water, Gridiron CBD H2O Probiotics™ Water, Gridiron MVP™ and Gridiron MVP™ Concentrate using the Pro Football Legends Logo on the Licensed Products' affixed labels, hang-tags or packaging. Other products of the Company may be added to the list of Licensed Products during the Contract Period by written amendment to this Agreement. All amendments to this Agreement must be signed by all parties to this Agreement. Endorsement Agreement Addendum I Page 1 of 2 + +Source: GRIDIRON BIONUTRIENTS, INC., 8-K, 12/6/2017 + + + + + + SECTION FOUR. REMUNERATION C. A *donation of $0.05 per Unit sold of Licensed Products within the Contract Territory payable to the **NFL Alumni Northern California Chapter. Donated amounts will be allocated and dispersed to the Northern California Chapter beginning on the first full quarter [three (3) month period] of the Agreement and continue on a quarterly basis thereafter for the term of this Agreement. Where the following per Unit conversion shall apply for the term of this Agreement: + + a. (1) Bottle of BlackMP LivingWater = 1 Unit + + b. (1) 4oz bottle of BlackMPConcentrate = 30 Units + + c. (1) Bottle of Zezel ProbioticWater = 1 Unit + + d. (1) Bottle of Zayin Sports Water = 1 Unit e. (1) Bottle Gridiron MVP™ Water= 1 Unit + + f. (1) Bottle Gridiron CBD H20 Probiotics™ Water = 1 Unit + + g. (1) 4oz bottle of Gridiron MVP™Concentrate = 30 Units + + _____________ * The NFLA-NC will donate 15% of the above described proceeds to the NFLA. ** The Company will provide to the NFLA-NC upon request the most recent quarterly sales report of the Company's Licensed Products. The parties have executed this Agreement on November 22nd, 2017. Food For Athletes, Inc. / Gridiron BioNutrients™ By: /s/ Darren Long Darren Long - CEO The National Football League Alumni, Inc. By: /s/ Elvis Gooden Elvis Gooden - President NFL Alumni - Northern California Chapter By: /s/ Eric Price Eric Price - President Endorsement Agreement Addendum I Page 2 of 2 + +Source: GRIDIRON BIONUTRIENTS, INC., 8-K, 12/6/2017 \ No newline at end of file diff --git a/full_contract_txt/HALITRON,INC_03_01_2005-EX-10.15-SPONSORSHIP AND DEVELOPMENT AGREEMENT.txt b/full_contract_txt/HALITRON,INC_03_01_2005-EX-10.15-SPONSORSHIP AND DEVELOPMENT AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..d5354e02805403483f2402e66b83b485400eba12 --- /dev/null +++ b/full_contract_txt/HALITRON,INC_03_01_2005-EX-10.15-SPONSORSHIP AND DEVELOPMENT AGREEMENT.txt @@ -0,0 +1,225 @@ +EXHIBIT 10.15 + + SPONSORSHIP AND DEVELOPMENT AGREEMENT + + This Agreement is made as of August 6, 2004 (the "Effective Date") by and between TEKNIK DIGITAL ARTS INC., a Nevada corporation with offices at 7377 E. Doubletree Ranch Road, Suite 270, Scottsdale, Arizona 85258 ("TDA") and RICK SMITH ENTERPRISES ("Smith"), c/o GAYLORD SPORTS MANAGEMENT, 14646 N. Kierland Blvd., Suite 230, Scottsdale, Arizona 85254 Attention: Steve Loy. + + RECITALS + + TDA is in the business of developing and publishing interactive entertainment software products. TDA desires to have Smith assist in the development, endorsement and publicizing of TDA's golf instruction related software products. + + THEREFORE, TDA and Smith agree as follows: + +1. DEVELOPMENT, PRODUCTION, COMMERCIAL AND PUBLICITY SERVICES + + 1.1 General. Smith agrees to cooperate, consult with and aid TDA in connection with the development of TDA's "Golf Instruction Related Product" (hereinafter defined) and the advertising, marketing and publicity thereof. As used herein, the term "Golf Instruction Related Product" shall mean any interactive entertainment software product related to golf instruction which is produced and released during the "Term" (hereinafter defined in Section 5.1) and which may be published in multiple versions (e.g., versions for play on handheld mobile devices (including cell phones), for sale in any and all territories. + +2. GRANT OF RIGHTS; COOPERATIONS + + 2.1 Publicity Rights. Smith hereby grants to TDA the following rights (the "Rights"): + + (a) the right to use and reuse Smith's name, voice, likeness, facsimile signature, personal statistics, biographical information and any reproduction or simulation thereof ("Smith's Likeness") in TDA's Golf Instruction Related Products and on packaging for TDA's Golf Instruction Related Products in any fashion, said grant of rights being limited to the world (the "Contract Territory")"; + + (b) the right to use and reuse Smith's Likeness in TDA's general internal, non-public corporate promotional materials (such as TDA's Annual Report), corporate advertising and in other forms of publicity; + + (c) the right to use and reuse Smith's Likeness in and in connection with the marketing, advertising, promoting and publicizing of TDA's Golf Instruction Related Products, by any and all means now known or hereafter developed; + + (d) the exclusive right to use and reuse the results and proceeds of the in connection with TDA's Golf Instruction Related Products; and + + (e) with Smith's prior reasonable approval, the right to license to third parties any of the foregoing rights but only in connection with or directly related to the marketing and sale of TDA's Golf Instruction Related Products. + +Smith agrees to cooperate in good faith with TDA in connection with TDA's exercise of the Rights in accordance with the terms of this Agreement. + + 2.2 Limitations of License + + (a) The Rights granted in Section 2.1 above will only be used by TDA in connection with its Golf Instruction Related Products. TDA does not have the right to use the Rights in any product whatsoever released before or after the Term. + + (b) TDA shall not utilize Smith's Likeness in a manner that would constitute an endorsement of any product or service other than TDA's Golf Instruction Related Products. + + 1 + + 2.3 Smith as Featured Swing Instructor. TDA agrees that Smith will be the featured Instructor on all packaging of, and promotional materials related to, TDA's Golf Instruction Related Product. + + 2.4 No Obligation to Use. Except as set forth in Section 2.3 above, the payment to Smith of the sums required under this Agreement shall fully discharge all obligations of TDA to use Smith's Likeness under this Agreement. + + 2.5 Approvals. TDA agrees that no use of Smith's Likeness in connection with advertisements, promotions and other related/similar materials (specifically excluding, however, TDA's Golf Instruction Related Products) will be made hereunder unless and until the same has been approved by Smith in writing. Smith agrees that any material, advertising or otherwise, submitted for approval as provided herein may be deemed by TDA to have been approved hereunder if the same is not disapproved in writing within fourteen (14) days after receipt thereof. Smith agrees that any material submitted hereunder will not be unreasonably disapproved and, if it is disapproved, that TDA will be advised of + + + + + +the specified grounds therefore. TDA agrees to protect, indemnify and save harmless Smith and Smith's agents, or either of them, from and against any and all expenses, damages, claims, suits, actions, judgments and costs whatsoever, arising out of, or in any way connected with, any advertising material furnished by, or on behalf of, TDA. + +3. EXCLUSIVITY + + 3.1 Exclusivity Period. During the Term (the "Exclusivity Period"), Smith hereby represents, warrants and agrees that he will not: (i) render any services in commercials or advertisements on behalf of any computer game or videogame sports software product or service, or (ii) authorize the use of Smith's Likeness in connection with any computer game or videogame golf instruction related sports software product or service. These exclusivity obligations will not limit Smith's right to appear in any of the entertainment fields or in the entertainment portion of any television, film or video program; provided, however, that Smith may not appear in, or provide services in connection with, advertisements for any computer game or videogame sports products. Notwithstanding anything herein to the contrary, this Section 3.1 is specifically subject to the provisions of Section 2.2 above. Smith's obligations set forth in this Section 3.1, and as limited by Section 2.2, will be referred to elsewhere in this Agreement as the "Exclusivity Obligations". Notwithstanding anything herein to the contrary, TDA explicitly agrees that nothing herein shall preclude Smith from participating in, or in any way limit Smith's participation in, any current or future PGA PLAYERS and/or PGA TOUR group licensing arrangements. + +4. COMPENSATION + + 4.1 Products. TDA will provide to Smith, free of all costs whatsoever (including without limitation, taxes, duties, shipping and/or handling fees) (a) fifty (50) copies each of TDA's "Phil Smith Golf instruction related" game mobile, handheld devices promptly after TDA's release thereof and (b) fifty (50) copies of any other TDA products selected by Smith. + + 4.2 Compensation for Rights and Services. TDA agrees to pay Smith, as a consideration for the Rights and Services. + + 1) 25,000 Restricted common shares of TDA, + + a. As of the date of this agreement, Company has sold stock at $2.50/share. + + b. Par Value is $.0001 per share. + + 2) 25% royalty of net TDA net sales price. + + 3) Option to convert annual royalties to TDA common stock at a $10 of stock for every $1 of Royalty converted. + + a. TDA stock conversion price based on the previous six month average daily price + + b. Option is limited to 50% of TDA outstanding stock and if the option is exercised, it must be exercised when the agreement &sbsp; is in effect. + +All payments due under this Agreement shall be made in the form of a check drawn to the order of "Rick Smith" and delivered to Smith's agent at the following address: Gaylord Sports Management, l4646 N. Kierland Blvd., Suite 230, Scottsdale, Arizona 85254, Attn: Steve Loy. Payments shall be made 15 days from the end of each + + 2 + +quarter. Smith's net payment after any such charges or deductions shall equal the amount set forth above. Past due payments hereunder shall bear interest at the rate of (i) one and one-half percent (1-1/2%) per month, or (ii) the maximum interest rate permissible under law, whichever is less. + + 4.3 Expenses. First-class round-trip air transportation, hotel room meal expenses, local limousine service and miscellaneous expenses (e.g., telephone and overnight courier charges) incurred by Smith and a guest designated by Smith will be paid by TDA or reimbursed by TDA to Smith where necessary in the performance of Smith's Services under this Agreement; provided, however, that such expenses are required and reasonable for a celebrity of Smith's stature. + +5. AUDIT + + 5.1 Licensee shall keep accurate books of account and records at its principal place of business covering all transactions relating to the License granted herein. Smith shall have the right to engage an independent accounting firm to examine the Licensee's sales information and all other books and records necessary to establish the accuracy and timeliness of the royalty statements required hereunder. Such examination shall be at the premises of Licensee on ten (10) working days written notice and during normal business hours. The information provided to Smith by the accounting firm will be the net sales and the application of the appropriate royalty rate to calculate royalties due. The accounting firm shall be required to take reasonable steps to hold all Licensee information confidential. Details of the review and all work papers and related supporting data pertaining to the review will be held confidential by the accounting firm and will not be shown, divulged, or delivered directly or indirectly to Smith or any third party. The accounting firm shall be bound by a non-disclosure agreement in the form to be provided by Licensee to ensure compliance with this paragraph. The examination may be conducted not more than + + + + + +once a year. If it is determined that Licensee has made any Royalty underpayment which is greater than five percent (5%) for any Royalty Period, the Licensee shall reimburse Smith for the costs and expenses of such audit. + + 5.2 Upon request by Smith, but not more than once each year, Licensee shall, at its own cost, furnish to Smith within thirty (30) days after such request a detailed statement, prepared by Licensee's Chief Financial Officer, setting forth the number of Products manufactured from the later of the commencement of this Agreement or the date of any previous such statement up to and including the date of Smith's request therefore and also setting forth the pricing information for all Products (including the number and description of the Products) shipped, distributed and sold by Licensee during the aforementioned time period. + + 5.3 All books of account and records of Licensee covering all transactions relating to the Licensee shall be retained by the Licensee until at least two (2) years after the expiration or termination of the Term for possible inspection by Smith. + +6. TERM + + 6.1 Term. The term of this Agreement (the "Term") shall commence on the Effective Date and terminate at the end of the Exclusivity Period (i.e., a three (3) year period commencing on the Effective Date). + + 6.2 Post-Term Sales. Upon expiration of this Agreement, TDA shall cease all uses of the Rights and/or Smith's Likeness with respect to advertising, endorsing and/or promoting TDA, but TDA shall be free to continue to distribute and sell its Golf Instruction Related Products which incorporate Smith's Likeness for up to 180 days after the expiration of the Term (although TDA may not use the Rights or Smith's Likeness to promote or advertise TDA or any of TDA's non-Golf Instruction Related Products when selling the Golf Instruction Related Products, nor can TDA highlight Smith's Likeness in its packaging or sales efforts); provided, however, that TDA shall have no such right of post-Term sales unless TDA is not in default of any of its obligations hereunder as of the date of expiration or termination. + +7. REPRESENTATIONS, WARRANTIES AND COVENANTS + + 7.1 Representations and Warranties. + + (a) Smith represents and warrants that: + + (i) Smith has full right to enter into this Agreement and to perform all of his obligations hereunder without, to his knowledge, violating the legal or equitable rights of any person, firm or entity and that TDA shall not be under any obligation for the payment of any + + 3 + + commissions or fees to any person, firm or entity on account of this Agreement, other than advances, compensation, royalties and expenses expressly payable to Smith by TDA under this Agreement; + + (ii) Smith will perform the Services in a professional and workmanlike manner, to the extent of Smith's professional abilities. + + (b) TDA represents and warrants that: + + (i) TDA has full right to enter into this Agreement and to perform all of its obligations hereunder without, to its knowledge, violating the legal or equitable rights of any person, firm or entity and that Smith shall not be under any obligation for the payment of any commissions or fees to any person, firm or entity related to or connected with TDA on account of this Agreement. + + (c) Notwithstanding anything herein to the contrary, TDA agrees that nothing contained herein shall be construed to convey to TDA any rights to use the trademarks, logos or uniform of the PGA TOUR ("PGA"), any other professional or amateur golf instruction related association (including any member players of such association) in conjunction with the rights granted hereunder. All rights to the use of such trademarks, logos or team identification must be acquired from the PGA or any other appropriate rights holder. + + 7.2 Further Assurances and Execution of Documents. Smith will, if requested and reasonable, furnish affidavits and other appropriate documentation that may be required, in TDA's reasonable judgment and at TDA's expense, to comply with any applicable governmental or other regulations, broadcast clearance procedures, or sports/entertainment industry guidelines relating to product endorsement. Furthermore, Smith hereby agrees to execute any and all documents which are required by any guild or union having jurisdiction over any of the services to be provided by Smith under this Agreement. + + 7.3 Confidential Information and Non-Disparagement. Neither party will disclose or use any confidential or proprietary information that such party obtains from or about the other or its products. Both parties agree that the existence and results of any arbitration held pursuant to this Agreement will be treated confidentially. Smith will not authorize or release advertising matter or publicity nor give interviews which make reference to the details of the material terms of this Agreement, without TDA's prior written approval, although Smith may, during interviews, respond, discuss and comment in a non-disparaging manner that Smith is associated with TDA and its Golf Instruction Related Products. + + + + + +8. OWNERSHIP OF PROPRIETARY RIGHTS + + 8.1 All right, title and interest in and to TDA's Golf Instruction Related Products shall be and remain the absolute property of TDA forever (it being understood that after the Term TDA may continue to manufacture, promote, sell and/or distribute its other golf instruction related interactive entertainment sports products which are separate and distinct from the Golf Instruction Related Products incorporating Smith's Likeness on the packaging without being subject to any of the limitations or restriction herein, provided that the Rights are not (directly or indirectly) utilized by or incorporated in such other golf instruction related interactive sports products. All right, title and interest in and to the Results and Proceeds and to the Advertising Materials (as defined below) shall be and remain the absolute property of TDA forever (but which may only be used during the Term and, subject to the limitations and conditions set forth in this Agreement, thereafter). Without limiting the foregoing, TDA shall, during the Term (and, Subject to the limitations and conditions on the Rights as set forth in this Agreement, thereafter) have the full and complete right to revise, telecast, broadcast, use, distribute, reproduce, record, publish, print, license, copyright and exhibit the contents of any Results and Proceeds, the Golf Instruction Related Products and any Advertising Materials and any versions or revisions thereof and, in TDA's sole discretion, the Results and Proceeds, the Golf Instruction Related Products and Advertising Materials may be make by any process, instrumentation or device now known or hereafter developed and may be made or adapted for use in any and all media now known or hereafter developed (although it is acknowledged and agreed by TDA that multi-media usage (except, of course, as incorporated into TDA's Golf Instruction Related Products) shall be strictly limited to advertising) provided that any and all such uses are directly related to the marketing, development and sale of TDA's Golf Instruction Related Products. Smith further acknowledges that TDA may adapt and use, and protect by + + 4 + +any means including registration with the appropriate authorities, a trademark or trade name incorporating Smith's Likeness, and that Smith shall, until after the Term, have no right, title or interest in or to any such trademark, trade name or related goodwill. As used in this Agreement, "Advertising Material" means any commercials, print materials, copy, advertising, promotional and publicity materials published under this Agreement which include or make reference to Smith's Likeness and all elements thereof. + + 8.2 Notwithstanding anything herein to the contrary, TDA agrees not to remove, airbrush or otherwise alter the trademarks and logos of Smith's equipment manufacturer (currently Mission) from the packaging of TDA's Golf Instruction Related Products and/or the Advertising Materials, provided that, upon TDA's written request, Smith secures for TDA, at no cost to TDA, all necessary written permissions or grants of rights from any such equipment manufacturer or third party. + +9. INDEMNITY + + 9.1 By TDA. TDA shall indemnify and hold harmless Smith, Smith's agent, and Smith's heirs, executors and legal representatives from and against any and all damages, costs, judgments, penalties and expenses of any kind (including reasonable legal fees and disbursements) which may be obtained against, imposed upon or suffered by any of them as a result of (a) any claims or representations made by Smith in any Advertising Materials produced or used by TDA hereunder, (b) TDA's default, breach, negligence, errors and/or misconduct hereunder, and/or (c) any claim arising from any third party's use or association with TDA;s products. + +10. GENERAL + + 10.1 Taxes. Smith represents and warrants that, in performing its obligations under this Agreement, Smith does so as an independent contractor and, without limiting the foregoing, Smith assumes exclusive responsibility for the collection and payments of all employer and employee contributions and taxes under all applicable laws now in effect or hereafter enacted and Smith further agrees to file any returns or reports necessary in connection therewith. TDA shall have the right to deduct from any amounts payable hereunder such portion thereof as are required to be deducted under applicable statute, regulation, treaty or other law, and Smith shall promptly execute and deliver to TDA such forms and other documents as may be required in connection therewith. Notwithstanding anything herein to the contrary, it is agreed and acknowledged that TDA remains liable for the payment of all pension and health welfare contributions required of any guild or labor organization (i.e., SAG, AFTRA, etc.). + + 10.2 Notices. All notices and statements hereunder required to be given to TDA shall be sent to TDA at its address stated at the beginning of this Agreement, to the attention of the General Counsel, and all notices to Smith shall be sent to Smith at the address stated at the beginning of this Agreement, unless either party notifies the other party in writing if a change of address in accordance with the provisions of this Section. Notices are deemed to be received by the addressee of the notice on the earlier or the date the notice is actually delivered to the addressee and: (i) three (3) days after the notice is sent by certified mail, postage prepaid, return receipt requested; (ii) the next business day after the notice is sent by confirmed fax transmission; or (iii) on the date of guaranteed delivery if the notice is sent by recognized national or international express courier. + + 10.3 Right of Offset. Notwithstanding any provision contained in this Agreement, neither party will be prohibited from exercising any right of offset that may be available at law. + + + + + + 10.4 Governing Law. This Agreement will be deemed entered into in Arizona and will be governed by and interpreted in accordance with the internal substantive laws of the State of Arizona without reference to conflicts of law provisions. + + 10.5 Entire Agreement. This Agreement constitutes the entire understanding between the parties hereto with respect to the subject matter hereof, and all prior agreements and understandings, whether oral or written, are hereby superseded in their entirety. No waiver, modification or addition to this Agreement shall be valid unless in writing and signed by the party sought to be charged therewith. + + 10.6 Assignment. This Agreement may be assigned by Smith and TDA with the other party's prior written approval. Except with Smith's prior written approval, this Agreement may not be assigned by TDA: (i) in connection with a merger, a sale of all or substantially all of the assets of TDA or other similar corporate reorganization, or the sale of substantially all of TDA's rights to all of its Golf Instruction Related Products; or (ii) to + + 5 + +an affiliated, parent, subsidiary, related company (or in the case of the production of Advertising Materials to an advertising agency representing TDA) so as to effectuate the intent of this Agreement and the subject matter hereof, although TDA will continue to be liable for all financial obligations hereunder. + + 10.7 Severability. Should any provision of this Agreement be held to be void, invalid or inoperative, such provision will be enforced to the extent permissible and the remaining provisions of this Agreement will not be affected. + + 10.8 Attorney's Fees. In any suit, arbitration or other proceeding under this Agreement, the prevailing party will be entitled to recover its reasonable fees and expenses of attorneys and other professionals, including all fees and expenses of appeal and enforcement. + + 10.9 Liability. In no event (including, but not limited to, Smith's default hereunder) shall Smith be liable to TDA (or any entity claiming through TDA) for any amount in excess of the amounts actually received by Smith hereunder, excluding the reimbursement of expenses. Under no circumstances will Smith be liable to TDA or any other entity for any special, consequential, indirect, exemplary and/or punitive damages, or for loss of good will or business profits. + + 10.10 Applicable Law and Disputes. This Agreement shall be governed by the laws of the State of Arizona applicable to agreements fully executed and performed therein. Any claims arising hereunder or relating hereto shall be prosecuted only in the appropriate court or the State of Arizona or in the applicable United States District Court and neither party shall make any claim or demand in any other jurisdiction forum. Each party waives its right to a trial by jury and agrees to the jurisdiction of the judge in the appropriate court as governed by the State of Arizona. The parties consent to the personal jurisdiction of such courts and to the service of process by mail. + + 10.11 Force Majeure. If at any time during this Agreement, Smith or TDA is prevented from or hampered or interrupted or interfered with in any manner whatever in fully performing their respective duties hereunder by reason of any present or future statute, law, ordinance, regulation, order, judgment or decree, whether legislative, executive or judicial (whether or not valid), act of God, earthquake, flood, fire, epidemic, accident, explosion, casualty, lockout, boycott, strike, labor controversy (including, but not limited to threat of lockout, boycott or strike), riot, civil disturbance, war or armed conflict (whether or not there has been an official declaration of ___ or official statement as to the existence of a state of war), invasion, occupation, intervention or military forces, act of public enemy, embargo, delay of a common carrier, inability without fault of such party to obtain sufficient material, labor, transportation, power or other essential commodity required in the conduct of business; or by reason of any event beyond any of the foregoing parties' reasonable control (e.g., illness, family emergency, etc.); or by reason of any other cause or causes of any similar nature (all of the foregoing being herein referred to as an "event of force majeure"), then the applicable party's obligations hereunder shall be suspended as often as any such event of force majeure occurs and during such periods of time as such events of force majeure exist and such non-performance shall not be deemed to be a breach of this Agreement. + + 10.12 Reservation of Rights. All rights not herein specifically granted to TDA shall remain the property of Smith to be used in any manner Smith deems appropriate. TDA understands that Smith has reserved the right to authorize others to use Smith's Likeness within the Contract Territory and during the Term in connection with all tangible and intangible items and services other than TDA's Golf Instruction Related Products as specifically set forth herein. + + IN WITNESS WHEREOF, the parties hereby execute this Agreement as of the Effective Date by signing below. + +TEKNIK DIGITAL ARTS INC. RICK SMITH + +By: /s/ John Ward By: /s/ Rick Smith -------------------------- --------------------------------- Name: John Ward Title: Chairman Date: August 6, 2004 Date: August 6, 2004 + + 6 + + + + + + AMENDMENT + +4. COMPENSATION + + 4.1 Products. TDA will provide to Smith, free of all costs whatsoever (including without limitation, taxes, duties, shipping and/or handling fees) (a) fifty (50) copies each of TDA's "Phil Smith Golf instruction related" game mobile, handheld devices promptly after TDA's release thereof and (b) fifty (50) copies of any other TDA products selected by Smith. + + 4.2 Compensation for Rights and Services. TDA agrees to pay Smith, as a consideration for the Rights and Services. + + 1) 25,000 Restricted common shares of TDA, + + a. As of the date of this agreement, Company has sold stock at $2.50/share. + + b. Par Value is $.0001 per share. + + 2) 33% royalty of net TDA net sales price. + + a. Handheld products 33% or $1 per subscription whichever is greater + + 3) Option to convert annual royalties to TDA common stock at a $10 of stock for every $1 of Royalty converted. + + a. TDA stock conversion price based on the previous six month average daily price + + b. Option is limited to 25,000 shares of TDA common stock and if the option is exercised, it must be exercised when the agreement is in effect. + + c. This one-time option would cease all future royalties. + +All payments due under this Agreement shall be made in the form of a check drawn to the order of "Rick Smith" and delivered to Smith's agent at the following address: Gaylord Sports Management, l4646 N. Kierland Blvd., Suite 230, Scottsdale, Arizona 85254, Attn: Steve Loy. Payments shall be made 15 days from the end of each quarter. Smith's net payment after any such charges or deductions shall equal the amount set forth above. Past due payments hereunder shall bear interest at the rate of (i) one and one-half percent (1-1/2%) per month, or (ii) the maximum interest rate permissible under law, whichever is less. + + 4.3 Expenses. First-class round-trip air transportation, hotel room meal expenses, local limousine service and miscellaneous expenses (e.g., telephone and overnight courier charges) incurred by Smith and a guest designated by Smith will be paid by TDA or reimbursed by TDA to Smith where necessary in the performance of Smith's Services under this Agreement; provided, however, that such expenses are required and reasonable for a celebrity of Smith's stature. + + This Section Amended: December 10, 2004 /s/ RS ------------------ /s/ JW ------------------ + + 7 \ No newline at end of file diff --git a/full_contract_txt/HC2HOLDINGS,INC_05_14_2020-EX-10.1-COOPERATION AGREEMENT.txt b/full_contract_txt/HC2HOLDINGS,INC_05_14_2020-EX-10.1-COOPERATION AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..5864ccdd0d7c85d6814329e2a3b222db7c7ef165 --- /dev/null +++ b/full_contract_txt/HC2HOLDINGS,INC_05_14_2020-EX-10.1-COOPERATION AGREEMENT.txt @@ -0,0 +1,113 @@ +Exhibit 10.1 COOPERATION AGREEMENT This Cooperation Agreement (this "Agreement"), dated as of May 13, 2020, is by and among MG Capital Management Ltd., a Cayman Islands company limited by shares ("MG Capital"), Percy Rockdale LLC, a Michigan limited liability company ("Percy Rockdale"), Rio Royal LLC, a Michigan limited liability company ("Rio Royal", and together with MG Capital and Percy Rockdale, the "MG Capital Parties") and HC2 Holdings, Inc., a Delaware corporation (the "Company"). Each of the MG Capital Parties and the Company are referred to herein as a "Party" and collectively, as the "Parties." RECITALS WHEREAS, as of the date hereof, the MG Capital Parties may be deemed to beneficially own 2,703,537 shares of the Company's common stock, $0.001 par value per share (the "Common Stock"), which represents approximately 5.8% of the Common Stock issued and outstanding on the date hereof; WHEREAS, in consideration of the agreements and obligations of the Company, as set forth in this Agreement and subject to the terms and conditions contained herein, the MG Capital Parties are agreeing (i) to irrevocably withdraw the notice of stockholder nomination of individuals for election as directors of the Company at the Company's 2020 Annual Meeting of Stockholders (the "2020 Annual Meeting") submitted to the Company on February 13, 2020 (the "Nomination Notice"), and any related materials or notices submitted to the Company in connection therewith and (ii) to terminate its solicitation of proxies in connection with the 2020 Annual Meeting; WHEREAS, as of the date hereof, the Company and the MG Capital Parties have determined that it is in their respective best interests to come to an agreement to modify the composition of the Company's board of directors (the "Board") and as to certain other matters, as provided herein; and WHEREAS, the Board and the Nominating and Governance Committee of the Board have selected their 2020 Director Slate (as defined herein) for the 2020 Annual Meeting. NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound hereby, agree as follows: 1. Board of Directors. (a) Appointments. Simultaneously with the execution and delivery of this Agreement, the Board and its committees shall take such actions (with such actions deemed to have to occurred substantially simultaneously) as are necessary (i) to increase the size of the Board from six (6) to ten (10) Directors, and (ii) to appoint each of Kenneth S. Courtis and Michael Gorzynski (the "MG Capital Designees") and (iii) to appoint each of Avram A. Glazer and Shelly Lombard (together with the MG Capital Designees, the "New Directors") to the Board. (b) Board Size. From the date of this Agreement through the completion of the 2020 Annual Meeting, the Board will not increase the size of the Board above ten (10) directors without the unanimous approval of the Board. From the completion of the Company's 2020 Annual Meeting through the end of the Standstill Period (as hereinafter defined), the Board will not increase the size of the Board above seven (7) directors without the unanimous approval of the Board. (c) Board Chairman Succession. Consistent with the actions previously taken by the Board and the Glazer Agreement, and as of the date hereof, Mr. Glazer will be appointed as Chairman of the Board, succeeding Mr. Gfeller, who is being replaced as Chairman of the Board effective as of the date hereof. + + + + + +(d) New Director Information. As a condition to the New Directors' appointment to the Board and any subsequent nomination for election as a director at any future Company annual meeting of stockholders, he or she must provide any information required to be disclosed in a proxy statement or other filing under applicable law, stock exchange rules or listing standards. (e) Date of the 2020 Annual Meeting. The Company agrees that it shall hold the 2020 Annual Meeting no later than July 8, 2020 and shall not cause or permit any delay, postponement or adjournment thereof, except for any adjournment solely due to a lack of quorum under the Company's Fourth Amended and Restated By-Laws (the "By-Laws"). (f) Slate of Directors for the 2020 Annual Meeting. (i) The Company agrees that, in connection with the execution and delivery of this Agreement, the Board shall take such actions as are necessary to (i) reduce the size of the Board from ten (10) to seven (7) Directors, effective as of the 2020 Annual Meeting, and (ii) nominate each of the New Directors and Wayne Barr, Jr., Warren H. Gfeller and Philip A. Falcone (collectively, the "2020 Director Slate") for election to the Board at the 2020 Annual Meeting for a term expiring at the Company's 2021 Annual Meeting of Stockholders (the "2021 Annual Meeting"). The Board, based on the information provided to it, has determined that each member of the 2020 Director Slate would (i) qualify as an "independent director" under the applicable rules of the New York Stock Exchange (the "NYSE") and the rules and regulations of the U.S. Securities and Exchange Commission (the "SEC") and (ii) satisfy the guidelines and policies with respect to service on the Board applicable to all non- management directors (other than Mr. Falcone). The Company agrees that, provided that each member of the 2020 Director Slate is able and willing to serve on the Board, (i) the Board will unanimously recommend that the stockholders of the Company vote to elect each member of the 2020 Director Slate as a director of the Company at the 2020 Annual Meeting, (ii) the Company will use its reasonable best efforts (which will include the solicitation of proxies) to obtain the election of the 2020 Director Slate at the 2020 Annual Meeting and (iii) the Company will use its best efforts to resist, discourage and defend against any attempt, solicitation or action by any stockholder of the Company to remove any member of the 2020 Director Slate prior to the 2021 Annual Meeting. For the avoidance of doubt, the Company will be required to use no less than the same level of efforts and to provide no less than the same level of support as was provided for its director nominees at the 2019 Annual Meeting of Stockholders. Any of the Company's current directors that is not standing for election at the 2020 Annual Meeting shall receive the full amount of his or her quarterly compensation for serving as non-management directors during the second quarter of 2020 (including any quarterly fee awarded and vesting of any and all equity awards for serving on, or serving as the Chair of, any committee of the Board). (g) Company Policies and Indemnification. (i) The Parties acknowledge that each of the MG Capital Designees and each other member of the 2020 Director Slate will be governed by the same protections and obligations as other non-employee directors of the Company, including, without limitation, confidentiality, conflicts of interest, related party transactions, fiduciary duties, codes of conduct, trading and disclosure policies, and other governance guidelines and policies of the Company (collectively, "Company Policies"), and shall have the same rights and benefits as other non-employee directors of the Company, including without limitation with respect to insurance, indemnification, compensation and fees. (ii) The Parties acknowledge that to the extent they have not already done so, within three (3) business days of the date hereof, the Company shall enter into an indemnification agreement with each of the New Directors in the form attached as Exhibit 10.20 to the Company's Annual Report on Form 10-K, previously filed with the SEC on March 16, 2020. 2. Additional Agreements. (a) The MG Capital Parties shall comply, and shall cause each of their Affiliates and Associates (as hereinafter defined) to comply with the terms of this Agreement and shall be responsible for any breach of this Agreement by any such Affiliate or Associate. (b) The MG Capital Parties, on behalf of themselves and their Affiliates and Associates, shall irrevocably withdraw their Nomination Notice and any related materials or notices submitted to the Company in connection therewith and shall agree to terminate any solicitation of proxies in connection with the 2020 Annual Meeting. + +2 + + + + + +(c) The MG Capital Parties hereby agree to appear in person (including via permitted remote or virtual attendance) or by proxy at any annual or special meeting of the Company's stockholders held during the Standstill Period, and agree that they shall not participate or vote in any solicitation of written consents of the Company's stockholders during the Standstill Period (unless expressly requested to do so by the Board), and that they shall vote all shares of Common Stock beneficially owned by the MG Capital Parties at such meeting or in such consent solicitation, (A) in favor of all directors nominated by the Board for election and against the removal of any member of the Board, (B) in accordance with the Board's recommendation with respect to any "say-on-pay" proposal and (C) in accordance with the Board's recommendation with respect to any other Company proposal or stockholder proposal or nomination presented at such meeting or solicitation of consents; provided, however, that in the event that both Institutional Shareholder Services Inc. ("ISS") and Glass, Lewis & Co., LLC ("Glass Lewis") recommend otherwise with respect to the Company's "say-on-pay" proposal presented at an annual or special meeting held during the Standstill Period, the MG Capital Parties shall be permitted to vote in accordance with the recommendation of ISS and Glass Lewis. (d) The MG Capital Parties agree that the Board or any committee thereof, solely to fulfill the discharge of its fiduciary duties upon the advice of its legal counsel, may recuse either of Messrs. Courtis or Gorzynski by majority vote of the members of the Board (but excluding the applicable director), from the portion of any Board or committee meeting at which the Board or any such committee is evaluating and/or taking action with respect to and after the right of the recused director to be present prior to recusal (A) the exercise of any of the Company's rights or enforcement of any of the obligations under this Agreement, and (B) any transaction proposed by, or with, the MG Capital Parties, their Affiliates or Associates, as long as all other similarly situated directors are similarly recused. The Board or such committee, as applicable, may withhold from either of Messrs. Courtis or Gorznyski any material distributed to the directors to the extent directly relating to the subject of that recusal. 3. Standstill Provisions. (a) The standstill period (the "Standstill Period") begins on the date of this Agreement and shall extend until thirty (30) days prior to the deadline for the submission of stockholder nominations for directors for the 2021 Annual Meeting pursuant to the By-Laws. The MG Capital Parties hereby agree that during the Standstill Period, none of the MG Capital Parties nor any of their Affiliates and Associates will, and they will cause each of their Affiliates and Associates not to, as applicable, directly or indirectly, alone or in concert with others, in any manner, but expressly subject, in each case, to the provisions of Section 3(b) below: (i) fail to comply with all applicable laws and regulatory rules and obtain all applicable regulatory approvals, if and when acquiring, or offering, seeking or agreeing to acquire, by purchase or otherwise, or directing any third party in the acquisition of, any Common Stock or any securities convertible or exchangeable into or exercisable for Common Stock (collectively, "Company Securities"), or rights or options to acquire any Company Securities, or engaging in any swap instrument or derivative hedging transactions or other derivative agreements of any nature with respect to Company Securities; (ii) engage in a "solicitation" of "proxies" (as such terms are defined under the Exchange Act), votes or written consents of stockholders or security holders with respect to, or from the holders of, the Common Stock (including a "withhold" or similar campaign), for any purpose, including, without limitation, the election or appointment of individuals to the Board or to approve or vote in favor or against stockholder proposals, resolutions or motions, or become a "participant" (as such term is defined in Instruction 3 to Item 4 of Schedule 14A promulgated under the Exchange Act) in any contested "solicitation" of proxies, votes or written consents for any purpose, including, without limitation, the election or appointment of directors with respect to the Company (as such terms are defined under the Exchange Act) (other than a "solicitation" or acting as a "participant" in support of the nominees of the Board at any stockholder meeting or providing such encouragement, advice or influence that is consistent with either the Board's or Company management's recommendation in connection with such director nominees or other proposals, resolutions or motions, pursuant to this Agreement or otherwise); (iii) form, join or in any way participate in any "group" (within the meaning of Section 13(d)(3) of the Exchange Act) with respect to the shares of the Common Stock (other than a "group" that includes all or some of the persons or entities identified on Exhibit A attached hereto); provided, however, that nothing herein shall limit the ability of an Affiliate, a family member and an estate planning vehicle formed for any of the foregoing, of the MG Capital Parties to join a "group" with such parties, as applicable, following the execution of this Agreement; + +3 + + + + + +(iv) agree, attempt, seek or propose to deposit any shares of Common Stock in any voting trust or similar arrangement or subject any shares of Common Stock to any arrangement or agreement with respect to the voting of any shares of Common Stock, other than any such voting trust, arrangement or agreement solely among the MG Capital Parties, and their Affiliates or Associates and otherwise in accordance with this Agreement; (v) seek or submit, or knowingly encourage any person or entity to seek or submit, nomination(s) in furtherance of a "contested solicitation" for the appointment, election or removal of directors with respect to the Company or seek, or knowingly encourage or take any other action with respect to the appointment, election or removal of any directors, in each case in opposition to the recommendation of the Board; (vi) (A) present or make to the stockholders of the Company, or knowingly encourage any person to present or make to the stockholders of the Company, any proposal or other matter for consideration by stockholders at any annual or special meeting of stockholders of the Company or through action by written consent, (B) make any public offer or proposal to the Company (with or without conditions) with respect to any merger, tender (or exchange) offer, acquisition, recapitalization, restructuring, disposition or other business combination involving the Company or any of its significant subsidiaries, or make any such offer privately to the Company, which private offer would reasonably be expected to require the Company or the Parties to make public disclosure (of any kind), (C) affirmatively solicit a third party to make any public or private offer or proposal (with or without conditions) with respect to any merger, tender (or exchange) offer, acquisition, recapitalization, restructuring, disposition or other business combination involving the Company, or encourage, initiate or support any third party in making such an offer or proposal, (D) publicly comment on any third party proposal regarding any merger, tender (or exchange) offer, acquisition, recapitalization, restructuring, disposition, or other business combination with respect to the Company or any of its significant subsidiaries by such third party prior to such proposal becoming public or (E) make any private proposal to the Company that would reasonably be expected to require the Company or the Parties to make public disclosure (of any kind); (vii) make any public disclosure, communication, announcement or statement regarding any intent, purpose, plan, or proposal with respect to (A) controlling, changing or influencing the Board, including, without limitation, any public disclosure, communication, announcement or statement regarding any intent, purpose, plan, or proposal relating to any change in the number of directors or the filling of any vacancies on the Board, (B) any material change in the capitalization, dividend policy, share repurchase programs and practices or capital allocation programs and practices of the Company, (C) relating to any material change in the Company's management, compensation or corporate structure, (D) relating to any waiver, amendment or modification to the Company's Second Amended and Restated Certificate of Incorporation, as amended (the "Charter"), or to the By-Laws, (E) causing any securities of the Company to be delisted or (F) causing any equity securities of the Company to become eligible for termination of registration; (viii) seek, alone or in concert with others, representation on the Board, except as specifically permitted in Section 1; (ix) subject to Section 3(b) below, advise, knowingly encourage, knowingly support or knowingly influence any person or entity, in the MG Capital Parties' capacity as stockholders of the Company, with respect to the voting or disposition of any securities of the Company at any annual or special meeting of stockholders with respect to the appointment, election or removal of any director(s), except in accordance with Section 1; (x) make any request for stockholder list materials or other books and records of the Company in the MG Capital Parties' capacity as stockholders of the Company; (xi) institute, solicit, assist or join, as a party, any litigation, arbitration or other proceeding against or involving the Company or any of its or their current or former directors or officers (including derivative actions) in order to effect or take any of the actions expressly prohibited by this Section 3; provided, however, that for the avoidance of doubt the foregoing shall not prevent the MG Capital Parties, and their Affiliates or Associates from (A) bringing litigation to enforce the provisions of this Agreement, (B) making counterclaims with respect to any proceeding initiated by, or on behalf of, the Company against the MG Capital Parties, their Affiliates or their Associates, (C) bringing bona fide commercial disputes that do not relate to the subject matter of this Agreement, (D) complying with a validly issued legal process or (E) exercising statutory appraisal, dissenters or similar rights under applicable law; + +4 + + + + + +(xii) make any request or submit any proposal to amend the terms of this Agreement other than through non-public communications with the Company or the Board that would not be reasonably determined to trigger public disclosure obligations for any Party; or (xiii) disclose any intention, plan or arrangement inconsistent with the provisions of this Section 2. (b) Notwithstanding the foregoing, nothing in this Agreement shall prohibit or restrict the MG Capital Parties from: (A) communicating privately with the Board or any of the Company's officers regarding any matter in a manner that does not otherwise violate this Section 3, so long as such communications are not intended to, and would not reasonably be expected to, require any public disclosure of such communications, (B) communicating privately with stockholders of the Company and others in a manner that does not otherwise violate this Section 3, and (C) taking any action necessary to comply with any law, rule or regulation or any action required by any governmental or regulatory authority or stock exchange that has, or may have, jurisdiction over the MG Capital Parties or any of their respective Affiliates or Associates; provided that a breach by the MG Capital Parties of this Agreement is not the cause of the applicable requirement. Furthermore, nothing in this Agreement shall be deemed to restrict in any way the ability of Messrs. Courtis or Gorzynski, each acting in his capacity as a director of the Company, from exercising any of his rights, powers and privileges as directors, from fulfilling his statutory and fiduciary duties as a director, or otherwise exercising his authority as a director pursuant to the Charter, the By-Laws and/or any resolution of the Board or a committee thereof. 4. Representations and Warranties of the Company. The Company represents and warrants to the MG Capital Parties as follows: (a) the Company has the power and authority to execute, deliver and carry out the terms and provisions of this Agreement and to consummate the transactions contemplated by this Agreement; (b) this Agreement has been duly and validly authorized, executed and delivered by the Company, constitutes a valid and binding obligation and agreement of the Company and is enforceable against the Company in accordance with its terms, except as enforcement of this Agreement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or similar laws generally affecting the right of creditors and subject to general equity principles; (c) the execution, delivery and performance of this Agreement by the Company does not and will not (i) violate or conflict with any law, rule, regulation, order, judgment or decree applicable to the Company, or (ii) result in any breach or violation of or constitute a default (or an event which with notice or lapse of time or both could constitute a breach, violation or default) under or pursuant to, or result in the loss of a material benefit under, or give any right of termination, amendment, acceleration or cancellation of, any organizational document, agreement, contract, commitment, understanding or arrangement to which the Company is a party or by which it is bound; and (d) the execution, delivery and performance of this Agreement by the Company does not and will not violate or conflict with any law, rule, regulation, order, judgment or decree applicable to the Company. 5. Representations and Warranties of the MG Capital Parties. The MG Capital Parties represent and warrant to the Company that, except as otherwise expressly set forth in, or permitted pursuant to, this Agreement, (a) the authorized signatory or signatories of the MG Capital Parties set forth on the signature page hereto has the power and authority to execute this Agreement and any other documents or agreements to be entered into in connection with this Agreement and to bind the MG Capital Parties thereto, (b) this Agreement has been duly authorized, executed and delivered by the MG Capital Parties, and assuming due execution by each counterparty hereto, is a valid and binding obligation of the Parties, enforceable against the MG Capital Parties in accordance with its terms, except as enforcement thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or similar laws generally affecting the rights of creditors and subject to general equity principles, (c) the execution of this Agreement, the consummation of any of the transactions contemplated hereby, and the fulfillment of the terms hereof, in each case in accordance with the terms hereof, will not conflict with, or result in a breach or violation of the organizational documents of the MG Capital Parties as currently in effect, (d) the execution, delivery and performance of this Agreement by the MG Capital Parties does not and will not violate or conflict with any law, rule, regulation, order, judgment or decree applicable to the MG Capital Parties, (e) as of the date of this Agreement, the MG Capital Parties are deemed to beneficially own 2,703,537 shares of Common Stock, (f) as of the date hereof, and except as set forth in clause (e) above, the MG Capital Parties do not currently have, and do not currently have any right to acquire any beneficial, record or derivative interest in any other securities of the Company (or any rights, options or other securities convertible into or exercisable or exchangeable (whether or not convertible, exercisable or exchangeable immediately or only after the passage of time or the occurrence of a specified event) for such securities or any obligations measured by the price or value of any securities of the Company or any of its controlled Affiliates, including any swaps or other derivative arrangements designed to produce economic benefits and risks that correspond to the ownership of shares of Common Stock or any other securities of the Company, whether or not any of the foregoing would give rise to beneficial ownership (as determined under Rule 13d-3 promulgated under the Exchange Act), and whether or not to be settled by delivery of shares of Common Stock or any other class or series of the Company's stock, payment of cash or by other consideration, and without regard to any short position under any such contract or arrangement), (g) the MG Capital Parties have not entered into or maintained, and will not enter into or maintain, any economic, compensatory, pecuniary or other arrangements with any director of the Company for serving as a nominee or director of the Company, (h) no person other than the MG Capital Parties has any rights with respect to the shares of Common Stock beneficially owned by the MG Capital Parties and (i) none of the MG Capital Parties or their Affiliates has formed, or has any present intent to form, a group (within the meaning of Section 13(d) under the Exchange Act) with any person or entity not identified on Exhibit A in relation to the Company or the Common Stock. + +5 + + + + + +6. Mutual Non-Disparagement. Subject to applicable law, each of the Parties covenants and agrees that, during the Standstill Period, neither Party nor any of its subsidiaries, Affiliates, successors, assigns, principals, partners, members, general partners, officers, key employees or directors (collectively, "Representatives"), shall in any way, directly or indirectly, in any capacity or manner, whether written or oral, electronically or otherwise (including, without limitation, in a television, radio, internet, newspaper, magazine interview, or otherwise through the press, media, analysts or other persons or in any document or report filed with the SEC), publicly disparage, impugn, make ad hominem attacks on or otherwise defame or slander or make, express, transmit, speak, write, verbalize or otherwise publicly communicate in any way (or cause, further, assist, solicit, encourage, support or participate in any of the foregoing), any public communication or statement of any kind, whether verbal, in writing, electronically transferred or otherwise, that might reasonably be construed to be disparage, derogate or impugn, the other Party or such other Party's Representatives (including any current officer or director of a Party or a Parties' subsidiaries who no longer serves in such capacity following the execution of this Agreement), employees, stockholders (solely in their capacity as stockholders of the applicable Party), or any of their businesses, products or services, in any manner that would reasonably be expected to damage the business, or reputation of the other Party or of its Representatives (including former officers and directors), directors (or former directors), employees, stockholders (solely in their capacity as stockholders of the applicable Party); provided that, with respect to any litigation, arbitration or other proceeding between the Parties, nothing in this Section 5 shall prevent either Party from disclosing any facts or circumstances with respect to any such litigation, arbitration or other proceeding. This Section 5 shall not (i) limit the power of any director of the Company to act in accordance with his or her fiduciary duties or otherwise in accordance with applicable law and (ii) limit any Party's ability to comply with any subpoena or other legal process or respond to a request for information from any governmental authority with jurisdiction over the party from whom information is sought. 7. Public Announcement. (a) Promptly following the execution of this Agreement, the Company shall issue a joint press release with the MG Capital Parties substantially in the form attached to this Agreement as Exhibit B (the "Press Release"), with such modifications, if any, as may be mutually agreed between the Company and the MG Capital Parties, and (i) the Company shall file a Current Report on Form 8-K, which shall be in form and substance reasonably acceptable to the Company and the MG Capital Parties (for the avoidance of doubt, nothing herein shall prohibit the Company from complying with its obligation to file such Current Report by the deadline therefor) and (ii) the MG Capital Parties shall file an amendment to its Schedule 13D announcing this Agreement and the withdrawal of the 2020 Consent Solicitation, which shall be in form and substance reasonably acceptable to the Company and the MG Capital Parties (for the avoidance of doubt, nothing herein shall prohibit the MG Capital Parties from complying with its obligation to file such amendment by the deadline therefor). (b) Neither the Company, the MG Capital Parties nor any of their respective Affiliates or Associates, will issue a separate press release in connection with this Agreement, other than as mutually agreed by the Company and the MG Capital Parties. 8. Definitions. For purposes of this Agreement: (a) the terms "Affiliate" and "Associate" shall have the respective meanings set forth in Rule 12b-2 promulgated by the SEC under the Exchange Act and shall include all persons or entities that at any time during the term of this Agreement become Affiliates or Associates of any person or entity referred to in this Agreement; (b) the term "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended; and (c) the terms "person" or "persons" mean any individual, corporation (including not-for-profit), general or limited partnership, limited liability or unlimited liability company, joint venture, estate, trust, association, organization or other entity of any kind or nature. 9. Notices. All notices, consents, requests, instructions, approvals and other communications provided for herein and all legal process in regard to this Agreement will be in writing and will be deemed validly given, made or served, if (a) given by email, when sent to the email address set forth below (as applicable), and receipt of such email is acknowledged, or (b) if given by any other means, when actually received during normal business hours at the address specified in this Section 9: + +6 + + + + + +(a) if to the Company: HC2 Holdings, Inc. 450 Park Avenue, 30th Floor New York, NY 10022 Attention: Joseph A. Ferraro Email: jferraro@hc2.com Telephone: +1-212-235-2691 with copies to: Skadden, Arps, Slate, Meagher & Flom LLP One Manhattan West New York, NY 10001 Attention: Richard J. Grossman Todd E. Freed Email: Richard.grossman@skadden.com Todd.freed@skadden.com Telephone: +1-212-735-2116 +1-212-735-3714 (b) if to the MG Capital Parties: MG Capital Management Ltd. 595 Madison Avenue, 29th Floor New York, NY 10022 Attention: Michael Gorzynski Email: mike@mgcapitalpartners.com Telephone: +1-646-274-9610 with a copy to: Kleinberg, Kaplan, Wolff & Cohen, P.C. 500 Fifth Avenue, 11th Floor New York, NY 10110 Attention: Christopher P. Davis Email: cdavis@kkwc.com Telephone: +1-212-880-9865 10. Expenses. Within five (5) business days following receipt of reasonably satisfactory documentation thereof, the Company will reimburse the MG Capital Parties for their fees and expenses (including all legal, public relations, proxy advisory and out-of-pocket expenses, the "Expenses") incurred in preparation for and in connection with the matters relating to the consent solicitation run by the MG Capital Parties, the 2020 Annual Meeting and the negotiation, execution and effectuation of this Agreement and the transactions contemplated hereby, in an amount equal to $352,290.25 (the "Initial Reimbursement"). Between the date of the Initial Reimbursement and the date of the 2020 Annual Meeting, the Company will reimburse the MG Capital Parties for the Expenses in an aggregate amount not exceeding $650,000 (inclusive of the Initial Reimbursement, the "Cap"), which Expenses shall be reimbursed on a dollar-for-dollar basis at the same time as the Company reimburses its third party vendors (e.g., legal counsel, public relations firm, financial advisor and proxy advisory firm)in connection with the MG Capital Parties' consent solicitation and Nomination Notice; provided that all Expenses, subject to the Cap, shall be reimbursed no later than the date of the 2020 Annual Meeting. + +7 + + + + + +11. Specific Performance; Remedies; Venue. (a) Each of the Parties acknowledges and agrees that irreparable injury to the other Party could occur in the event any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached and that such injury could not be adequately compensable by the remedies available at law (including the payment of money damages). It is accordingly agreed that each Party will be entitled to seek injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement, in addition to any other remedy to which they are entitled at law or in equity. FURTHERMORE, THE PARTIES AGREE (1) ANY NON- BREACHING PARTY WILL BE ENTITLED TO SEEK INJUNCTIVE AND OTHER EQUITABLE RELIEF, WITHOUT PROOF OF ACTUAL DAMAGES; AND (2) THE BREACHING PARTY AGREES TO WAIVE ANY BONDING REQUIREMENT UNDER ANY APPLICABLE LAW, IN THE CASE ANY OTHER PARTY SEEKS TO ENFORCE THE TERMS BY WAY OF EQUITABLE RELIEF. THIS AGREEMENT WILL BE GOVERNED IN ALL RESPECTS, INCLUDING VALIDITY, INTERPRETATION AND EFFECT, BY THE LAWS OF THE STATE OF DELAWARE WITHOUT GIVING EFFECT TO THE CHOICE OF LAW PRINCIPLES OF SUCH STATE. (b) The Parties (a) irrevocably and unconditionally submit to the personal jurisdiction of the Delaware Court of Chancery (or, only if the Delaware Court of Chancery declines to accept jurisdiction over a particular matter, the federal or other state courts located in Wilmington, Delaware), (b) agree that they will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such courts, (c) agree that any actions or proceedings arising in connection with this Agreement or the transactions contemplated by this Agreement shall be brought, tried and determined only in such courts, (d) waive any claim of improper venue or any claim that those courts are an inconvenient forum and (e) agree that they will not bring any action relating to this Agreement or the transactions contemplated hereunder in any court other than the aforesaid courts. The Parties agree that mailing of process or other papers in connection with any such action or proceeding in the manner provided in Section 9 or in such other manner as may be permitted by applicable law as sufficient service of process, shall be valid and sufficient service thereof. 12. Severability. If at any time subsequent to the date hereof, any provision of this Agreement is held by any court of competent jurisdiction to be illegal, void or unenforceable, such provision will be of no force and effect, but the illegality or unenforceability of such provision will have no effect upon the legality or enforceability of any other provision of this Agreement. 13. Termination. This Agreement will terminate upon the earlier of: (i) the conclusion of the Standstill Period or (ii) delivery of written notice by one Party to the other Party of a material breach of this Agreement by the breaching Party that is uncured after ten (10) calendar days of notice of such breach. Upon such termination, this Agreement shall have no further force and effect. Notwithstanding the foregoing, Sections 9 through Section 19 hereof shall survive termination of this Agreement, and no termination of this Agreement shall relieve any party of liability for any breach of this Agreement arising prior to such termination. 14. Counterparts. This Agreement may be executed in two or more counterparts and by scanned computer image (such as .pdf), each of which will be deemed to be an original copy of this Agreement. For the avoidance of doubt, neither Party shall be bound by any contractual obligation to the other Party (including by means of any oral agreement) until all counterparts to this Agreement have been duly executed by each of the Parties and delivered to the other Party (including by means of electronic delivery or facsimile). 15. Affiliates. Each of the Parties agrees that it will cause their or its Affiliates and their respective employees and other representatives to comply with the terms of this Agreement. 16. No Third-Party Beneficiaries. This Agreement is solely for the benefit of the Company and the MG Capital Parties, and is not enforceable by any other persons. No Party may assign its rights or delegate its obligations under this Agreement, whether by operation of law or otherwise, without the prior written consent of the other Party, and any assignment in contravention hereof will be null and void. 17. No Waiver. No failure or delay by any Party in exercising any right or remedy hereunder will operate as a waiver thereof, nor will any single or partial waiver thereof preclude any other or further exercise thereof or the exercise of any other right or remedy hereunder. 18. Entire Understanding; Amendment. This Agreement contains the entire understanding of the Parties with respect to the subject matter hereof and supersedes any and all prior and contemporaneous agreements, memoranda, arrangements and understandings, both written and oral, between the Parties, or any of them, with respect to the subject matter of this Agreement. This Agreement may be amended only by an agreement in writing executed by each of the Parties. + +8 + + + + + +19. Interpretation and Construction. Each of the Parties acknowledges that they have each been represented by counsel of their choice throughout all negotiations that have preceded the execution of this Agreement, and that they have executed the same with the advice of said counsel. Each Party and its counsel cooperated and participated in the drafting and preparation of this Agreement and the documents referred to herein, and any and all drafts relating thereto exchanged among the Parties will be deemed the work product of all of the Parties and may not be construed against any Party by reason of its drafting or preparation. Accordingly, any rule of law or any legal decision that would require interpretation of any ambiguities in this Agreement against any Party that drafted or prepared it is of no application and is hereby expressly waived by each Party, and any controversy over interpretations of this Agreement will be decided without regard to events of drafting or preparation. Whenever the words "include," "includes" or "including" are used in this Agreement, they shall be deemed to be followed by the words "without limitation." [Signature pages follow] + +9 + + + + + +This Agreement has been duly executed and delivered by the duly authorized signatories of the parties as of the date first set forth above. THE COMPANY: HC2 Holdings, Inc. By: /s/Joseph Ferraro Name: Joseph Ferraro Title: Chief Legal Officer [Signature Page to Cooperation Agreement] + + + + + +MG CAPITAL PARTIES: MG Capital Management Ltd. By:/s/ Michael Gorzynski Name: Michael Gorzynski Title: Sole Director Percy Rockdale LLC By:/s/ Michael Gorzynski Name: Michael Gorzynski Title: Sole Manager Rio Royal LLC By:/s/ Michael Gorzynski Name: Michael Gorzynski Title: Sole Manager [Signature Page to Cooperation Agreement] + + + + + +Exhibit A MG CAPITAL PARTIES MG CAPITAL MANAGEMENT LTD. PERCY ROCKDALE LLC RIO ROYAL LLC + + + + + +Exhibit B Form of Press Release + + + + + +HC2 HOLDINGS AND MG CAPITAL ANNOUNCE SETTLEMENT AGREEMENT AND PLAN TO RECONSTITUTE BOARD OF DIRECTORS Announces Immediate Appointment of Two New Directors: MG Capital Nominees Kenneth S. Courtis and Michael Gorzynski Previously Announced Additions Avram A. "Avie" Glazer and Shelly C. Lombard Will Also Begin Serving as Directors Immediately, With Mr. Glazer to Serve as Chairman of the Board Recent Collaboration With Stockholders Will Result in More Than 50% of the Board Being Refreshed Following the 2020 Annual Meeting MG Capital Agrees to Withdraw its Consent Solicitation and Nomination Notice NEW YORK, May 14, 2020 (GLOBE NEWSWIRE)—HC2 Holdings, Inc. ("HC2" or the "Company") (NYSE: HCHC), a diversified holding company, and MG Capital Management, Ltd. (together with Percy Rockdale LLC and Rio Royal LLC, "MG Capital") today announced a settlement agreement to reconstitute the Board of Directors (the "Board"). The agreement provides for the immediate appointment of four new members - Kenneth S. Courtis, Avram A. "Avie" Glazer, Michael Gorzynski and Shelly C. Lombard - who will also stand for election on HC2's seven-member slate at the Company's 2020 Annual Meeting of Stockholders (the "2020 Annual Meeting") to be held on Wednesday, July 8, 2020. Effective immediately and through the Annual Meeting, the Board will expand from six members to ten members. The Board will be reduced to seven members following the 2020 Annual Meeting, resulting in more than 50% of the directors being refreshed based on engagement with stockholders. As part of the settlement agreement, MG Capital has also withdrawn its consent solicitation and nomination for election of directors at the 2020 Annual Meeting. The Company had previously announced the nominations of Mr. Glazer and Ms. Lombard for election at the 2020 Annual Meeting as part of the Board's ongoing refreshment efforts and commitment to incorporating stockholder feedback and to enhancing value for all stockholders. They will be appointed immediately along with MG Capital nominees, Mr. Courtis and Mr. Gorzynski, and Mr. Glazer will be appointed Chairman of the Board. As part of the reconstitution of the Board, three of the current directors - Robert V. Leffler, Jr., Lee S. Hillman and Julie Totman Springer - announced that they will not stand for re-election at the 2020 Annual Meeting. The Company's slate of director nominees will include Wayne Barr Jr., Philip Falcone and Warren H. Gfeller, who will continue to serve as directors and stand for election at the 2020 Annual Meeting alongside the four newly-appointed directors. Mr. Gfeller commented: "The Board is pleased to put the consent solicitation behind us and looks forward to working with the new directors. We are pleased to welcome Avie, Ken, Mike and Shelly to the Board. Additionally, we thank Robert, Lee and Julie for their service and contributions to HC2. With these additions, we believe HC2 will be positioned to pursue its path of growth and innovation." + + + + + +Mr. Gorzynski added: "Ken and I want to thank the Board for carrying out HC2's director refreshment process in a thoughtful manner. We no longer view ourselves as MG Capital nominees, but rather HC2 directors firmly committed to advocating for stockholders' best interests in the boardroom. Our focus now is on working closely with the other directors to enhance stockholder value and seize new opportunities over the long term." Under the terms of HC2's agreements with MG Capital, JDS1, LLC and Lancer Capital LLC, each stockholder has individually agreed to abide by customary standstill and voting provisions. The agreements will be filed on a Form 8-K with the Securities and Exchange Commission. Director Biographies: Kenneth S. Courtis is a financial executive with more than 30 years of banking, investment management and board service experience. Since January 2009, Mr. Courtis has served as the Chairman of Starfort Investment Holdings. Previously, he served as Vice Chairman and Managing Director of Goldman Sachs, and Chief Economist and Investment Strategist of Deutsche Bank Asia. He received an undergraduate degree from Glendon College in Toronto and an MA in international relations from Sussex University in the United Kingdom. He earned an MBA at the European Institute of Business Administration and received a Doctorate with honors and high distinction from l'Institut d'etudes politiques, Paris. Avram A. "Avie" Glazer is the principal of Lancer Capital. In addition, he currently serves as Executive Co-Chairman and Director of Manchester United Plc (NYSE: MANU). Mr. Glazer served as President and Chief Executive Officer of Zapata Corporation, a U.S. public company between from March 1995 to July 2009 and Chairman of the board of Zapata Corporation from March 2002 to July 2009. In addition to his professional experience, Mr. Glazer received a business degree from Washington University in St. Louis and received a law degree from American University, Washington College of Law. Michael Gorzynski is the Managing Member of MG Capital, an investment firm focused on complex value-oriented investments. Previously, he invested in special situations globally at Third Point LLC, a large asset management firm, where he focused on macro, event-driven, distressed, and private investments across the capital structure. He is an expert in restructurings and in the insurance and banking industries, having participated in multiple large-scale bank and insurance company restructurings. He began his career at Credit Suisse First Boston in the technology investment banking group and at Spectrum Equity Investors a private equity fund in Boston. He earned a BA from the University of California, Berkeley, and received an MBA from Harvard Business School. Shelly C. Lombard is currently an independent consultant. From 2011 to 2014, she was the Director of High Yield and Distressed Research for Britton Hill Capital, a broker dealer specializing in high yield bank debt and bonds and value equities. From 2003 to 2010, Ms. Lombard was a high yield bond analyst covering the automotive industry at Gimme Credit, a subscription bond research firm. From 1992 to 2001, she analyzed, managed, and was involved in the restructurings of proprietary investments for ING, Chase Manhattan Bank, Barclays Bank, and Credit Lyonnais. Ms. Lombard began her career at Citibank in the leveraged buyout group. Ms. Lombard has an M.B.A. in finance from Columbia University. Advisors Jefferies LLC is serving as financial advisor to HC2, and Skadden, Arps, Slate, Meagher & Flom LLP is serving as its legal advisor. Kleinberg Kaplan is serving as MG Capital's legal advisor. + + + + + +About HC2 HC2 Holdings, Inc. is a publicly traded (NYSE: HCHC) diversified holding company, which seeks opportunities to acquire and grow businesses that can generate long-term sustainable free cash flow and attractive returns in order to maximize value for all stakeholders. HC2 has a diverse array of operating subsidiaries across multiple reportable segments, including Construction, Energy, Telecommunications, Life Sciences, Broadcasting, Insurance and Other. HC2's largest operating subsidiary is DBM Global Inc., a family of companies providing fully integrated structural and steel construction services. Founded in 1994, HC2 is headquartered in New York, New York. Learn more about HC2 and its portfolio companies at www.hc2.com. Cautionary Statement Regarding Forward-Looking Statements Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: This communication, and certain oral statements made by our representatives from time to time may contain, forward-looking statements. Generally, forward-looking statements include information describing actions, events, results, strategies and expectations and are generally identifiable by use of the words "believes," "expects," "intends," "anticipates," "plans," "seeks," "estimates," "projects," "may," "will," "could," "might" or "continues" or similar expressions. The forward-looking statements in this communication include, without limitation, any statements regarding our expectations regarding building stockholder value, future cash flow, longer-term growth and invested assets, the timing or prospects of any refinancing of HC2's remaining corporate debt, any statements regarding HC2's expectations regarding entering definitive agreements in respect of the potential divestitures of Continental Insurance and/or DBM Global, reducing HC2's leverage and related interest expense at the holding company level generally and with the net proceeds of such divestitures, reducing corporate overhead, growth opportunities at HC2's Broadcasting and Energy businesses and unlocking value at HC2's Life Sciences segment. Such statements are based on the beliefs and assumptions of HC2's management and the management of HC2's subsidiaries and portfolio companies. The Company believes these judgments are reasonable, but you should understand that these statements are not guarantees of performance or results, and the Company's actual results could differ materially from those expressed or implied in the forward-looking statements due to a variety of important factors, both positive and negative, that may be revised or supplemented in subsequent statements and reports filed with the SEC, including in our reports on Forms 10-K, 10-Q and 8-K. Such important factors include, without limitation, issues related to the restatement of our financial statements; the fact that we have historically identified material weaknesses in our internal control over financial reporting, and any inability to remediate future material weaknesses; capital market conditions, including the ability of HC2 and its subsidiaries to raise capital; the ability of HC2's subsidiaries and portfolio companies to generate sufficient net income and cash flows to make upstream cash distributions; volatility in the trading price of HC2's common stock; the ability of HC2 and its subsidiaries and portfolio companies to identify any suitable future acquisition or disposition opportunities; our ability to realize efficiencies, cost savings, income and margin improvements, growth, economies of scale and other anticipated benefits of strategic transactions; difficulties related to the integration of financial reporting of acquired or target businesses; difficulties completing pending and future acquisitions and dispositions; activities by activist stockholders, including a proxy contest, consent solicitation or any unsolicited takeover proposal; effects of litigation, indemnification claims and other contingent liabilities; changes in regulations and tax laws; the risks and uncertainties associated with, and resulting from, the COVID-19 pandemic; and risks that may affect the performance of the operating subsidiaries and portfolio companies of the Company. Although HC2 believes its expectations and assumptions regarding its future operating performance are reasonable, there can be no assurance that the expectations reflected herein will be achieved. These risks and other important factors discussed under the caption "Risk Factors" in our most recent Annual Report on Form 10-K filed with the SEC, and our other reports filed with the SEC could cause actual results to differ materially from those indicated by the forward-looking statements made in this communication. You should not place undue reliance on forward-looking statements. All forward-looking statements attributable to HC2 or persons acting on its behalf are expressly qualified in their entirety by the foregoing cautionary statements. All such statements speak only as of the date hereof, and unless legally required, HC2 undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. + + + + + +Important Additional Information and Where to Find It HC2 plans to file a proxy statement (the "2020 Proxy Statement"), together with a proxy card, with the SEC, in connection with the solicitation of proxies for the 2020 Annual Meeting. STOCKHOLDERS ARE URGED TO READ THE 2020 PROXY STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) AND ANY OTHER RELEVANT DOCUMENTS THAT HC2 FILES WITH THE SEC CAREFULLY IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Stockholders will be able to obtain, free of charge, copies of the 2020 Proxy Statement, any amendments or supplements thereto and any other documents (including a proxy card) when filed by HC2 with the SEC in connection with the 2020 Annual Meeting at the SEC's website (http://www.sec.gov), at HC2's website (http://ir.hc2.com) or by contacting Okapi Partners LLC by phone at (877) 629-6355, by email at info@okapipartners.com or by mail at 1212 Avenue of the Americas, 24th Floor, New York, New York 10036. Participants in the Solicitation HC2, its directors and certain of its executive officers and employees may be deemed to be participants in the solicitation of proxies from stockholders in connection with the 2020 Annual Meeting. Additional information regarding the identity of these potential participants, none of whom (other than Philip A. Falcone, HC2's President and Chief Executive Officer, and Avram A. Glazer, the Company's Chairman of the Board) owns in excess of one percent (1%) of HC2's shares, and their direct or indirect interests, by security holdings or otherwise, will be set forth in the 2020 Proxy Statement and other materials to be filed with the SEC in connection with the 2020 Annual Meeting. Information relating to the foregoing can also be found in HC2's Amendment No. 1 on Form 10-K (the "Form 10-K/A"), filed with the SEC on April 29, 2020. To the extent holdings of HC2's securities by such potential participants (or the identity of such participants) have changed since the information printed in the Form 10-K/A, such information has been or will be reflected on Statements of Ownership and Change in Ownership on Forms 3 and 4 filed with the SEC. Contact: For HC2: Investor Relations Garrett Edson ir@hc2.com (212) 235-2691 For MG Capital: Profile Greg Marose/Charlotte Kiaie, 347-343-2999 gmarose@profileadvisors.com/ckiaie@profileadvisors.com \ No newline at end of file diff --git a/full_contract_txt/HEALTHGATEDATACORP_11_24_1999-EX-10.1-HOSTING AND MANAGEMENT AGREEMENT (1).txt b/full_contract_txt/HEALTHGATEDATACORP_11_24_1999-EX-10.1-HOSTING AND MANAGEMENT AGREEMENT (1).txt new file mode 100644 index 0000000000000000000000000000000000000000..d727b07978e5a08f13989ae9962e1aa88567e3f7 --- /dev/null +++ b/full_contract_txt/HEALTHGATEDATACORP_11_24_1999-EX-10.1-HOSTING AND MANAGEMENT AGREEMENT (1).txt @@ -0,0 +1,1773 @@ +EXHIBIT 10.1 + + ELECTRONIC JOURNAL SOFT WARE DEVELOPMENT, HOSTING AND MANAGEMENT AGREEMENT + + This AGREEMENT is made the 20 March day of 1998 + + BETWEEN + + 1. HealthGate Data Corp., a Delaware corporation ("HealthGate"), having an address at 380 Pleasant Street, Malden, Massachusetts, 02148, USA + + AND + + 2. Blackwell Science Limited a company registered in England ("Blackwell"), whose registered office is Osney Mead, Oxford OX2 OEL, England, and Munksgaard A/S, a company registered in Denmark ("Munksgaard"), having an address at 35 Norre Sogade, Copenhagen DK-1016, Denmark (together, Blackwell and Munksgaard shall be referred to as "the Publishers") + + WHEREAS: + + A. Blackwell and Munksgaard, among other business activities, publish journals; + + B. HealthGate, among other business activities, creates, compiles and distributes health and biomedical information through the Internet; + + C. The Publishers desire to retain HealthGate to provide electronic journal management services, including development of an on-line web site for its journals, and other mutually agreed publications. + + D. HealthGate will provide the Services. + + E. HealthGate shall license to the Publishers the Proprietary Software and provide appropriate operational documentation if the Publishers decide to manage their own service from 28 February 2000. + + NOW THEREFORE IT IS HEREBY AGREED AS FOLLOWS: + +1. Definitions + + In this Agreement, the following words and expressions shall have the following meanings: + +"Acceptance" or "Accepted" Means acceptance of any part or the whole of the System by the Publishers when the System has successfully passed the acceptance tests in accordance with Clause 9 below but for the avoidance of doubt does not refer to the continuing Services after the Site goes live + +"Agreement" means this document and its Schedules and any documents expressly incorporated herein by reference and shall include any amendments subsequently agreed. + +"Content" means up to 200 Journals and any other material related to the Journals which the Publishers include in printed or electronic form, or any part thereof + +the "Development Timetable" means the timetable upon which the Development Work is proposed to take place which is in the implementation plan + +the "Development Work" means the development work required to produce the System (but excluding the ongoing services after the Site goes live) based upon the Specification and technical documentation sufficient for the system to be developed and extended including but not limited to any deviations from the original specification agreed to be necessary during the development. + +"Escrow Agreement" means the agreement(s) between the Publishers, the escrow agent and HealthGate the terms of which are specified in the Fourth Schedule + +the "Hardware" means the equipment and hardware referred to in Clause 8, as upgraded from time to time, and including extra hardware as a contingency. + +"Journal" means a Journal which the Publishers intend to include on the Site + + + + + +the "Licence" means the Licence granted in Clause 10 + +the "Proprietary Software" means HealthGate's own software which has been or will be developed + + 2 + +the "Services" the services to be performed by HealthGate to be set out in the Specification, to include but not limited to (i) any ongoing work in the design and development of the Site; (ii) mounting the Content on HealthGate's Hardware; (iii) hosting and making the Content and portions thereof accessible in an online interactive mode for searching, access, review, displaying in a web browser or on computer terminals, downloading, and printing on paper and; (iv) providing access to Publishers' subscribers and other third parties to the Site through telecommunications access via the Internet. + +the "Site" means the world wide web site to be prepared for the Publishers comprising all pages including graphics, audio-visual effects, software and all the material in compliance with the Specification and all parts of the System used for the Site + +the "Software" means the Proprietary Software and the Third Party Software including any source code and operator manuals relating thereto, to be developed or used and/or licensed by HealthGate in accordance with this Agreement + +the "Specification" means the detailed user scenarios and implementation plan prepared by HealthGate and approved by the Publishers and annexed in the First Schedule + +the "System" means the system comprising the hardware, software, services and peripherals specified in the Specification and including the Software all as the same is to be supplied by HealthGate to suit the Publishers' requirements + +"System Completion Date" means 14 December 1998 + +"Third Party Software" means all software to be included in the System owned by a third party, which shall be licensed for use and/or distribution by HealthGate as part of the System, and by the Publishers and/or third parties if the Services cease to be provided by HealthGate. + +"Use Fees" are the fees as set out in clause 19.4 + + 3 + +2. Appointment of HealthGate + + The Publishers hereby appoint HealthGate and HealthGate hereby accepts such appointment upon the terms and subject to the conditions of this Agreement: + + 2.1. to carry out the Development Work within the Development Timetable; + + 2.2. to provide the Services for the period in Clause 3; and + + 2.3. to hand over the System as provided in Clauses 10, 18, 33 and the other provisions of this Agreement. + + The Publishers grant HealthGate an exclusive right to carry out the Services, with the exception that the Publishers shall honour current contracts with third parties and Publisher may publish and licence content themselves as long as it does not materially reduce HealthGate's revenue. For the purpose of determining HealthGate's revenue, Use Fees and Article Fees shall not be taken into account. + +3. Duration + + 3.1. This Agreement shall commence on 1 January 1998. The initial term of the Services, unless terminated as set out herein, shall continue up to and including 28 February 2000 ("the Initial Term"). + + + + + + 3.2. Right of Renewal + + The Publishers shall have the right to renew the term of the Services as provided in this Agreement. + +4. Development and Specification + + 4.1. HealthGate shall carry out the Development Work in accordance with the Development Timetable and in accordance with the Specification by the System Completion Date. + + 4.2. HealthGate hereby assign all present and future copyright in the Blackwell Specification to the Publishers. + + 4.3. Publishers grant to HealthGate a perpetual, royalty-free licence to use the Specification. + + 4 + +5. Milestones and Deliverables + + 5.1. If HealthGate fails to complete the System development by the System Completion Date, unless such failure results from the Publishers' default in performing its obligations under this Agreement or from an extension of time agreed in writing, the Publishers may in their discretion notify HealthGate accordingly, and if such failure is not remedied within 28 calendar days, HealthGate, recognising the loss caused to the Publishers, will on demand from the Publishers pay to the Publishers a sum calculated at the rate of 1% of the value of the contract in respect of every 28 days which elapse from the System Completion Date to the actual date of completion of the System. Such sums of money will be paid by HealthGate to the Publishers not as a penalty but as and for the ascertained and liquidated damages owing and payable by HealthGate to the Publishers by reason of such failure to meet the System Completion Date. + + 5.2. If HealthGate fails to complete the System by the end of the tenth week after the System Completion Date then the Publishers (unless such failure demonstrably results from the Publishers' default in the performance of its obligations under this Agreement) will be entitled without prejudice to any other rights or remedies they may have under this Agreement or at law or in equity to terminate this Agreement immediately by written notice. + + 5.3. If any delay in meeting the System Completion Date is in any way due to the Publishers' fault, HealthGate will nevertheless, if the Publishers so requests, continue with the work on the Project with a view to completing it as soon as reasonably possible in the circumstances, and the Development Timetable will be adjusted accordingly. + +6. Project Management + + 6.1. HealthGate and the Publishers shall each designate the name, address, telephone number, fax number, and e-mail address of a Project Manager and a Deputy Project Manager. The Project Managers shall be responsible for arranging all meetings, visits, and consultations between the parties, and for the transmission and receipt of technical information between the parties. The parties' initial Project Manager and Deputy Project Manager is set forth on the Third Schedule hereto. + + 6.2. If HealthGate has reason to believe that any estimate of any time is likely to be exceeded or that it is likely that the Development Timetable will not be complied with, HealthGate will immediately inform the Publishers' Project Manager by written notice. + + 5 + +7. Content + + The Publishers, at their cost and expense, shall make available the Content in loadable electronic format to HealthGate as specified in the Specification. HealthGate shall remotely load the Content into a staging area. + +8. Procurement of Hardware + + HealthGate shall maintain the Site on HealthGate's web server and/or other servers through the term of this Agreement insofar as it relates to the Services. HealthGate shall acquire and maintain all necessary equipment and hardware (collectively the "Hardware") for Site. The Hardware shall be capable of storing the Content, including future issues of the Journals within the Content. HealthGate shall replace and upgrade such Hardware to satisfy the requirements of the Specification. The Hardware for the Site shall include redundancy so that the Site may remain operational despite an equipment failure. The Hardware shall be located at HealthGate's computer facilities in Malden, Massachusetts. The Hardware may be relocated only with Publishers' written consent, which consent shall not be unreasonably withheld. HealthGate, at its cost and expense, shall maintain adequate access via telecommunications to the Site at service + + + + + + levels that shall be maintained at the same extent as HealthGate provides to its own users. + +9. Testing, Acceptance and Delivery + + 9.1. Upon completion of the Development Work HealthGate and the Publishers shall run acceptance tests to assure compliance with the Specification. Load testing will be conducted at HealthGate. Such period of acceptance testing shall not exceed 2 weeks from date of delivery for testing. + + 9.2. Upon passing the acceptance tests, the System shall be deemed Accepted + + 9.3. Upon Acceptance as provided in Clause 9.2 HealthGate shall deliver into escrow the source code, source listings and information for the Proprietary Software included in the System in accordance with the terms of the Escrow Agreement. + + 9.4. In the event that the system fails to pass any of the prescribed acceptance tests or fails to satisfy the Publishers' requirements, the Publishers shall afford HealthGate the opportunity of rectifying, replacing and retesting the System. In the event that the System or any part thereof again fails to be accepted, such acceptance shall not be unreasonably withheld, or to satisfy the Publishers' requirements of which the Publishers shall be the sole judge, the Publishers shall (as time is of the essence of this Agreement) be entitled, in addition to any other rights it may have under this Agreement or in law, to have HealthGate remove the Content from the System (in whole or in part as the Publishers so + + 6 + + instructs) and HealthGate shall be liable to refund forthwith any moneys paid by the Publishers for such rejected System or part thereof. Notwithstanding the foregoing, upon acceptance of System launch, as noted in Clause 19.2.4, HealthGate shall be entitled to retain all monies paid by Publishers to this point. + + In such circumstances HealthGate shall be entitled to retain the first $250,000 paid by the Publishers to develop the Specification. + +10. Licence + + 10.1. Proprietary Software + + HealthGate hereby grants to the Publishers a non-exclusive non-transferable licence to use the Proprietary Software for the purposes of this Agreement + + Save in relation to the Publishers' logos, trademarks, and content, HealthGate may use and/or licence the Proprietary Software for itself or for others without any compensation or liability to the Publishers. + + All Proprietary Software and Source Code remain the property of HealthGate. Publishers may not use either Proprietary Software or Source Code held in escrow to develop a product that competes with those services offered by HealthGate. HealthGate, in its sole discretion, retains the right to determine if Publishers are utilizing either the Proprietary Software or Source Code in violation of this Agreement. + + 10.2. Option for Licence + + 10.2.1. On termination of the provision of the Services by HealthGate to the Publishers for whatever reason, HealthGate shall at the Publishers' option: + + (i) grant to the Publishers a non-exclusive non-transferable licence to use the Proprietary Software for the purposes of using, developing, enhancing and maintaining the Site and carrying out any or all of the activities previously carried out by HealthGate or on its behalf under this Agreement + + (ii) exercise best endeavours to grant to the Publishers a non-exclusive non-transferable licence to use the Third Party Software for the Site when and to the extent requested by the Publishers. + + 10.2.2. The annual fee for the licence in Clause 10.2.1 for the Software, to include the Proprietary Software and the Third Party Software, shall be $150,000 per annum, including standard upgrades and maintenance, provided that if HealthGate is not able to grant a licence of the Third Party Software, then the Publishers shall be at liberty to licence the Third Party Software from its owners and/or licensors direct, and/or to + + 7 + + + + + + license alternative software, and shall deduct the fees for such licences from the $150,000 per annum for the Software. + + 10.2.3. The Publishers shall have the right to terminate the licence referred to in Clause 10.2.1 by giving three months' notice in writing to HealthGate. + +11. Hosting + + HealthGate will host the Site in accordance with the Specification for the period for the Services in Clause 3. + +12. Service Levels + + 12.1. HealthGate will provide the Services and shall meet the Service Levels including but not limited to: + + 12.1.1. dealing promptly with queries or problems relating to the use or performance of the Software and correcting or procuring the correction of all material program errors; + + 12.1.2. identifying the location of any fault on the System, ensuring the continuing satisfactory operation of the System, taking all appropriate actions to ensure that the System maintains its full functionality; + + 12.1.3. providing or procuring minor enhancements to the Software including but not limited to updating data and formulae to ensure that any changes in tax or other statutory regulations or law are incorporated into the Software. + + 12.2. The Service Levels will be subject to review at any time by agreement between the Project Managers and in any event will be formally reviewed every 12 months during the term of this Agreement. + + 12.3. HealthGate will provide usage statistics relating to the Services as described in the specification on a monthly basis, or such other reasonable intervals as may be mutually agreed upon by the parties from time to time. + + 12.4. HealthGate will perform the Services and meet the Specifications and Service Levels set forth and referred to in this Agreement. In all cases where HealthGate has not committed to a specific performance standard, HealthGate will use reasonable care in providing the Services. + +13. Permitted Users, Pricing and Subscription Information + + 13.1. The Publishers shall have sole authority concerning determining access to the Site. Except for the fees payable to HealthGate described in Clause 14 hereof (document delivery), the Publishers shall retain the sole and exclusive right to determine the prices and fees payable and other terms and conditions applicable + + 8 + + to the Publishers' subscribers and other third party users for access to the Publishers' Content on the Site. The Site shall be designed to permit automated loading and maintenance of subscription data from the Publishers' fulfilment systems. The Specification details the procedures for loading such subscription information (including both bulk entry and single entry information) and timing for access to the Site for users included on such updated subscription data. + + 13.2. The Publishers grant to HealthGate a royalty-free licence for the purpose of testing, demonstrating, and evaluating the Site. + + 13.3. For the avoidance of doubt the Publishers shall have the right to permit third party intermediaries, (including but not limited to Ovid, OCLC, Swets, B H Blackwell, Munksgaard Direct and Dawson) to access the Site and to authorize access to users in terms within the Publishers' sole discretion. The Use Fees as set out in Schedule 2 shall apply. + +14. Document Delivery: Fees from Sales of Articles + + 14.1. The Site will include functions to facilitate the sale of individual articles from the Journals and other items at the sole discretion of the Publishers to non-subscribers and other third party users. + + 14.2. In relation to sales the Publishers make direct, the Publishers shall establish copyright and other fees for such sales ("Article Fees"). HealthGate shall collect the Article Fees established by Publishers plus a service fee to be determined by HealthGate but in any event the service fee may not exceed 30% of the Article Fee for the particular article, or $US 4, whichever is the higher. Within 60 days of the end of each calendar month, HealthGate shall forward to Publishers the net Article Fees actually collected (exclusive of HealthGate's service fee). + + 14.3. The Publishers may also permit third party intermediaries to sell individual articles and other items, on terms to be agreed between the Publishers and such third party intermediaries. Neither the + + + + + + Publishers nor the third party intermediaries shall be required to pay a service fee or any other additional fee for this service, nor shall HealthGate be permitted to collect a service fee, its remuneration being as provided in Clause 19 and in Schedule 2 (Use Fees). + +15. Improvements + + HealthGate shall replace and upgrade the Software to satisfy the requirements of the Specification at no extra cost to the Publishers. + + 9 + +16. Links + + The Site shall support and include in-bound links, as may be mutually agreed upon, to the Publishers' Content (including citations and references within articles), from bibliographic databases, including HealthGate, PubMed, ISI's Web of Science, and other sites, and as required by the Publishers from time to time. HealthGate shall not be responsible for setting up links from sites which it does not host. The Site shall also support links with on-line content of other publishers, using Document Object Identifier (DOI) and other standards, which may be mutually agreed upon from time to time. + +17. Right of Renewal + + 17.1 The Publishers shall have the right to renew the term of the Services by notice in writing to HealthGate to be given on or before 30 September 1999. If the Publishers exercise their right to renew, the term of the Services shall be extended by one further year, up to and including 28 February 2001. The Use Fees shall remain the same as in the Initial Period and the fee for the Services shall not exceed $7000 for additional journals, $2000 maintenance fee on existing journals and $2000 per Gigabyte. + + 17.2 If the Publishers exercise their right of renewal under Clause 17.1, then the Publishers shall have a further right of renewal for each of the subsequent three years, provided that the right to renew shall be conditional upon the Publishers having exercised their right in the previous year, and giving notice on or before the 30 September before the renewal is to take effect. + +18. Assistance upon Termination + + On termination of the provision of the Services by HealthGate to the Publishers for any reason: + + 10 + + 18.1. HealthGate will liaise with the Publishers, making available for such purposes such HealthGate liaison staff as the Publishers may reasonably require, and acting in all good faith, to ensure a mutually satisfactory license to the Publishers or, at the Publishers' option, to a replacement contractor. The period of liaison will commence as soon as notice has been given of termination of this Agreement, and will continue for a maximum period of 3 months after termination; + + 18.2. HealthGate agrees that at the time of termination of this Agreement, it will render all assistance, provide all documentation and undertake all actions to the extent necessary to effect an orderly assumption of the Services by the Publishers or, at the Publishers' option, by a replacement contractor; + + 18.3. If the Publishers so require, HealthGate will use its best endeavours to procure the transfer at the Publishers' expense, to the Publishers or to a third party nominated by the Publishers at the Publishers' sole discretion, of any Third Party Software licences HealthGate may have obtained in its own name in order to provide the Services and used for that purpose exclusively; and + + 18.4. HealthGate will be obliged to satisfy the Publishers that it has erased the Publishers Content and all copies, and that it has no ability to reproduce the Publishers Content in any way. + + The rights of the Publishers in this Clause 18 are in addition to the rights in Clause 33. + +19. Cost and Payment, Change Control Formula + + 19.1. The total price payable by the Publishers is set out in Clause 19.2 and the Use Fees in Clause 19.4, subject to the terms and conditions in this Agreement, this price being a fixed price. + + 19.2. Subject to HealthGate performing its obligations hereunder, HealthGate shall invoice the Publishers for payment as follows: + + 19.2.1. On 30 January 1998 $100,000 + + + + + + 19.2.2. On 06 February 1998 $150,000 + + 19.2.3. On acceptance of Specification, $150,000 or 27 February 1998 whichever is later + + 11 + + 19.2.4. On acceptance of System launch $150,000 + + 19.2.5. On system completion date $150,000 + + 19.2.6. On 1 January 1999 $175,000 + + 19.2.7. On 1 April 1999 $175,000 + + 19.2.8. On 1 July 1999 $175,000 + + 19.2.9. On 1 September 1999 $175,000 + + PROVIDED ALWAYS THAT if the Agreement is terminated in accordance with Clause 9.4 then the financial provisions of that Clause will apply in place of this Clause 19. + + 19.3. Invoices are payable within 60 days of receipt, with the exception of payments due under Clause 19.2, which shall be payable on the due date or on acceptance of the work, which ever is the later. + + 19.4. Use Fees The Publishers shall make payments to HealthGate based upon "Use" of the Content as set forth on the Second Schedule. For the purposes of this Agreement, "Use" shall mean a retrieval or download by a Publishers' subscriber of the full-text of an article. There shall not be any additional use fees or charges for users' browsing of table of contents or abstracts. Use Fees shall be billed by HealthGate monthly and all payments are due by cheque by the end of the following month after the date of the invoice. + + 19.5. Interest + + Interest on late payment by either party shall be charged at 2% above base rate for the time being of Barclays Bank plc in England. This sub-Clause 19.5 shall survive termination under Clause 9.4. + + 12 + +20. Advertising + + 20.1. The Site shall be designed to include space for advertising. All specifications concerning advertising space shall be mutually agreed upon from time to time and detailed in the Specification. The rate structure for advertising shall be mutually agreed upon. + + 20.2. All advertising is subject to review and approval by the Publishers and the Publishers reserve the right to refuse any proposed advertisements. Revenues from advertisers utilizing the advertising space shall be allocated between HealthGate and the Publishers. Each party shall receive 30% of all advertising sales for advertising sales originated by the other party (provided, in the event that advertising is sold at rates less than fair market rates such 30% figure shall be equitably increased to reflect the fair market value of the advertising. Said fair market rates shall be determined by mutual agreement of both parties). No deduction shall be made for commissions payable to sales representatives or employees of any party. + + 20.3. Within 60 days of the end of each calendar month, the parties shall report to each other concerning revenues collected on advertising sales and make appropriate payments to the other party for the previous month's collections based on the foregoing formula. + + 20.4. In the event that any claim is made against either party in respect of any advertisement. The expenses of dealing with any claim shall be paid for in the same proportion as at Clause 20.2. + +21. Support and Enhancement + + HealthGate shall establish a telephone line for the purpose of providing support to users of the Site, which support shall be free of charge to such users. Such telephone line shall be answered pursuant to HealthGate's + + + + + + standard protocol and shall be operational 5:00 A.M. to 10:00 P.M., US Eastern Time, and be supported by voice mail at other times. Such telephone line shall be operated at all times by one HealthGate employee. HealthGate shall ensure that the employee is suitably qualified and experienced for the purpose. If the parties determine that more than one employee is necessary to handle all inquiries in a reasonably prompt, professional and efficient manner, Publishers at their cost and expense may request HealthGate to dedicate additional employees for such purpose. + + 13 + + The Site shall include an e-mail function directly to HealthGate. All e-mails received by HealthGate shall be answered within one business day. The Site shall include a Frequently Asked Questions (FAQ) area and detailed help screens as determined in the Specification. Both parties agree to work together, through their duly appointed Project Managers, to develop the FAQ area and the help screens. + +22. HealthGate Responsibilities + + 22.1. HealthGate undertakes that in performing the Services it will use commercially reasonable endeavours to comply with the Service Levels including but not limited to System availability, specifications, standards, functions and performance requirements. + + 22.2. HealthGate will provide all assistance that the Publishers may reasonably require in accordance with this Agreement for the purpose of evaluating Service Levels from time to time and resolving operational problems in connection with the Services. All such requests must come from either the Publishers Project Manager or Deputy Project Manager. + + 22.3. HealthGate warrants that it owns or is authorised to use the Computer Equipment for the purposes of supplying the Services. + + 22.4. Viruses + + Each Party shall use its best efforts to ensure that no viruses, worms or similar items ("Viruses") are introduced into any Software System used under this Agreement. If a Virus is found in any such Software System, HealthGate shall, promptly upon the discovery thereof, use its best efforts to eliminate such Virus and ameliorate the effect thereof. If such Virus causes a loss of operational efficiency or data, HealthGate shall mitigate and restore such loss as quickly as feasible. + + 22.5. Disabling Code + + Save with the written consent of the Publishers, the Software and System shall not include, nor shall HealthGate introduce into any Software and/or the System, any code whose purpose is to disable or reduce the efficiency of all or any portion of the Services. + +23. Access to HealthGate + + 23.1. During the Term of this Agreement, HealthGate shall accommodate one employee or representative of Publishers at HealthGate's office for the purpose of reviewing and understanding the operation of the Site. HealthGate and Publishers shall coordinate the schedule of such employee so that he or she + + 14 + + does not unduly interfere with HealthGate's operation of the Site or HealthGate's other operations. The Publishers anticipate that such employee will be at HealthGate's offices approximately 30 days per year. + + 23.2. Audit Rights + + 23.2.1. The Publishers and/or their respective independent auditors, at no expense to HealthGate, and upon twenty (20) Business Days' written notice to HealthGate, shall have the right to conduct an operational audit pertaining to the fees and the Services rendered pursuant to this Agreement, including but not limited to having HealthGate process through any system test data supplied by the Publishers and/or their respective auditors, operate audit software on any system or download Publishers' Content and/or usage statistics to a computer designated by the Publishers, and/or their respective auditors. The operational audit will verify that HealthGate is exercising reasonable data processing operational procedures in its performance of the Services and confirm that HealthGate is performing and observing its obligations hereunder. + + 23.2.2. HealthGate shall make available for the Publishers and/or the Publishers' auditors inspection all records relating to the fees and to the Services provided pursuant to this Agreement. + + + + + + 23.3. Regulatory Access (Eg HEFCE) + + HealthGate and the Publishers acknowledge and agree that the performance of the Services under this Agreement may be subject to regulation and examination by the Publishers' regulatory agencies and/or government and/or customer's contractors. The parties agree that the records maintained and produced under this Agreement shall at all times be available for examination and audit by governmental agencies and/or governmental and/or customer's contractors having rights in relation to and/or jurisdiction over the business of the Publishers. Each party to this Agreement shall notify the other party promptly of any formal request by an authorized agency or contractor to examine records regarding the Publishers that are maintained by HealthGate. Upon request, HealthGate shall provide any relevant assurances to such agencies and shall subject itself to any required examination or regulation. The Publishers shall reimburse HealthGate for reasonable costs actually incurred due to any such examination or regulation that is performed solely for the purpose of examining data processing services performed by HealthGate for the benefit of and at the request of the Publishers. + + 15 + +24. Security and Disaster Recovery + + 24.1. HealthGate will ensure that all documents, data and Software are kept under secure conditions with back up arrangements satisfactory to the Publishers, to protect them effectively from unauthorised access and so that they can be recovered from any malfunction of the System. + + 24.2. Should the Publishers' Content and/or data be lost or destroyed, HealthGate will be responsible for its prompt reconstruction as quickly as possible with high priority allocation of time and resources, having regard to the back-up frequency agreed with the Publishers in the Specification. + + 24.3. HealthGate will not without the written consent of the Publishers disclose any of the Publishers' data or Publishers' Content to any third party. + + 24.4. HealthGate will take all reasonable precautions to minimise the impact of any disaster relating to the Services. + + 24.5. Security for Facilities + + HealthGate will perform all required security procedures at any place where Services are performed by HealthGate. All personnel of HealthGate will comply with the agreed security procedures with respect to access to any facility, data and data files. + + 24.6. The Publishers and/or their auditors, at no expense to HealthGate, and upon twenty (20)Business Days' written notice to HealthGate, shall have the right to conduct a system backup and disaster recovery audit with regard to the Services provided pursuant to this Agreement. The system disaster and recovery audit will verify that HealthGate is exercising reasonable procedures in the performance of its system backup and disaster recovery obligations hereunder. HealthGate shall allow the Publishers and/or their auditors access to any site used by HealthGate as a backup facility, if HealthGate can secure the rights for the Publishers and/or their auditors to enter the backup facility. + + 24.7. Disaster Recovery + + HealthGate shall maintain and continue to maintain throughout the term of this Agreement, an off-site disaster recovery capability. HealthGate shall present to the Publishers a disaster recovery plan prior to the System Completion Date. HealthGate shall monitor each such disaster recovery plan and keep it current. + + 16 + + 24.8. HealthGate shall use its best efforts to recover from a disaster and to continue providing Services to the Publishers within a commercially reasonable period. An executive summary of each such disaster recovery plan, which may change from time to time, shall be provided to the Publishers at no charge. HealthGate shall test each disaster recovery plan annually and shall provide the Publishers with a summary of its test results. + +25. Third Party Software + + 25.1. HealthGate warrants that any Third Party Software is validly licensed for running by HealthGate at the Site and for all the uses permitted under this Agreement in fulfillment of the services for the term of the Agreement and that it is authorised to grant the rights to the Third Party Software licensed under this Agreement for use on the Site. + + 25.2. HealthGate will fully indemnify the Publishers in respect of all + + + + + + damages, costs and expenses incurred by the Publishers resulting from any act or default of HealthGate in respect of the Third Party Software. + +26. Intellectual Property Rights + + 26.1. The copyright and any and all other intellectual property in any report, financial specification documentation and information, and usage statistics on whatever media, prepared or to be created by HealthGate pursuant to this Agreement shall be the property of the Publishers notwithstanding termination hereof unless otherwise expressly agreed in writing by the Publishers. HealthGate hereby assigns all right, title and interest in and to the same to the Publishers. + + 26.2. Publishers' Content and Data + + The parties hereto acknowledge and agree that the Publishers and/or their licensors own and will continue to own all right, title and interest in and to Publishers' Journals and other data, including but not limited to usage statistics for the Services ("Publishers' Data"). Upon the termination of this Agreement for any reason or, with respect to any Publishers' Data, on such earlier date as the Publishers shall determine that any of the same will no longer be required by HealthGate in order to render Services to the Publishers, Publishers' Data will be either erased from the data files maintained by HealthGate. or if the Publishers so elect, returned to the Publishers by HealthGate. The Publishers' Data may not be utilized by HealthGate for any purpose except to provide Services to the Publishers, nor may Publishers' Data or any part thereof be disclosed, sold, assigned, leased or otherwise disposed of to third parties by HealthGate or commercially exploited by or on behalf of HealthGate, or any of its employees or agents. + + 17 + +27. Warranty + + HealthGate's warranty + + 27.1. HealthGate warrants to the Publishers that the Software on delivery to the Publishers will conform substantially with the Specification. + + 27.2. HealthGate undertakes to correct by patch or new release (at its option) that part of the Software which does not so comply PROVIDED THAT such noncompliance has not been caused by any modification, variation or addition to the Software not performed by HealthGate + + 27.3. Millennium Compliance + + HealthGate warrants that (a) the occurrence in or use by the System of dates on or after January 1, 2000 ("Millennial Dates") will not adversely affect its performance at any level with respect to date-dependent data, computation, output or other functions; and (b) the System will create, store, receive, process and output information related to or including Millennial Dates without error or omissions. + + Publisher's warranty + + 27.4. Each Publisher hereby represents and warrants that: (i) it has, and will have throughout the term of this Agreement, all right, title and interest in and to the Content, except for items that are in the public domain or that are obtained under valid licenses, (ii) the Publishers Content do not and will not infringe any tradename, trademark or copyright, and (iii) there are not material suits, claims or proceedings currently pending or threatened against any Publisher based upon the Content and that Publishers will promptly advise HealthGate of the pendency or threat of any such suits, claims or proceedings relating to the Content or the Site arising during the term of this Agreement. + + 27.5. HealthGate shall be solely responsible for the compliance by its personnel with all laws and regulations of any pertinent countries relating to data protection and privacy and/or transborder data flow. + + 18 + +28. Indemnities and Liability, Limitation of Liability + + 28.1. Indemnities and Liability + + (a) Cross Indemnity - HealthGate and the Publishers each agree to indemnify, defend and hold harmless the other from any and all claims, actions, losses, damages, liabilities, costs and expenses, including reasonable attorneys' fees and expenses, arising out of or relating to the death or bodily injury of any agent, employee, customer, business invitee or business visitor of the indemnitor, or arising out of or relating to loss of or damage to tangible real or + + + + + + tangible personal property, to the extent that such claim, action, liability, loss, damage, cost or expense was proximately caused by the indemnifying party's tortious act or omission, or by those of its agents or employees. + + (b) Patent Indemnity - HealthGate and the Publishers each agree to indemnify, defend and hold harmless the other from any and all claims, actions, damages, liabilities, costs and expenses, including reasonable attorneys' fees and expenses, arising out of any claims of infringement of any patent, or a trade secret, or any copyright, trademark, service mark, trade name or similar proprietary rights conferred by contract or by common law or by any law of any applicable jurisdiction alleged to have occurred because of the system including but not limited to hardware, software, and data provided by the indemnitor under this Agreement. + + (c) Indemnification Procedures - With respect to third-party claims subject to the indemnities set forth in this Clause 28, the indemnitee shall notify the indemnitor promptly of any matters in respect of which the foregoing indemnity may apply and of which the indemnitee has knowledge and shall give the indemnitor full opportunity to control the response thereto and the defense thereof; including, without limitation, any agreement relating to the settlement thereof; provided that the indemnitee shall have the right to approve any settlement or any decision not to defend. The indemnitee's failure to promptly give notice shall affect the indemnitor's obligation to indemnify the indemnitee only to the extent that the indemnitor's rights are materially prejudiced thereby. The indemnitee may participate, at its own expense, in any defense and any settlement directly or through counsel of its choice. If the indemnitor elects not to defend, the indemnitee shall have the right to defend or settle the claim as it may deem appropriate, at the cost and expense of the indemnitor, which shall promptly reimburse the indemnitee for all such costs, expenses and settlements amounts. + + 19 + + 28.2. Limitations of Liability--Except in respect of personal injury or death caused by the negligence of either party (for which by law no limit applies), in the event either party shall be liable to the other party on account of the performance or nonperformance of its respective obligations under this Agreement, whether arising by negligence, wilful misconduct or otherwise, the amount recoverable by the other party for all events, acts or omissions shall not exceed, in the aggregate, an amount equal to payments made under this Agreement. + +29. Source Code and Escrow + + 29.1. HealthGate and the Publishers shall enter and maintain in force the Escrow Agreement for such period as the Publishers require. + + 29.2. Whenever a new version of the Proprietary Software is used for the Site, HealthGate will promptly deposit a new version of the source code and the operational documentation for that version under the same Escrow Agreement, and notify the Publishers in writing that the deposit has been made. + + 29.3. If no new version has been deposited in any 6 month period, HealthGate will deposit a replacement copy of the then current version of the source code of the Proprietary Software under the Escrow Agreement and will notify the Publishers in writing. + +30. Confidential Information + + Neither party shall, other than with the prior written consent of the other party, during or after the termination, determination or expiry of this Agreement disclose directly or indirectly to any person, firm, company or third party and shall only use for the purposes of this Agreement, any information relating to the Agreement, the other party, its business, trade secrets, customers, suppliers or any other information of whatever nature which the party whose information it is or its licensees or nominee may deem to be confidential and which the other party has or shall hereafter become possessed of. For the avoidance of doubt the usage statistics relating to the Site shall be the Publishers' confidential information. + + The foregoing provisions shall not prevent the disclosure or use by either party of any information which is or hereafter, through no fault of the other party, become public knowledge or to the extent permitted by law. Nor shall they prevent the use by the Publishers of information for the purposes of handing over or considering handing over the System to themselves or to another contractor, PROVIDED THAT if the information is disclosed to a third party the Publishers shall first enter a confidentiality agreement with the third party in similar terms to this Clause. + + 20 + + + + + +31. Data Protection + + The parties agree to ensure that they will at all times comply with the provisions and obligations imposed by the Data Protection Act 1984, the EU Data Protection Directive 95/46 and any implementing legislation in the United Kingdom. Both parties agree to indemnify each other in respect of any unauthorised disclosure of data by them. + +32. Termination, Change of Control of HealthGate + + 32.1. Notwithstanding any provisions herein contained this Agreement may be terminated forthwith by either party by notice in writing from the party not at fault if any of the following events shall occur, namely: + + (i) if the other party shall commit any act of bankruptcy, shall have a receiving order made against it, shall make or negotiate for any composition or arrangement with or assignment for the benefit of its creditors or if the other party, being a body corporate, shall present a petition or have a petition presented by a creditor for its winding up or shall enter into any liquidation (other than for the purposes of reconstruction or amalgamation), shall call any meeting of its creditors, shall have a receiver of all or any of its undertakings or assets appointed, shall be deemed by virtue of the relevant statutory provisions under the applicable law to be unable to pay its debts, or shall cease to carry on business; + + (ii) if the other party shall at any time be in default under this Agreement and shall fail to remedy such default within 30 days from receipt of notice in writing from the first party specifying such default. + + If any such event referred to in this sub-clause shall occur, termination shall become effective forthwith or on the date set forth in such notice. + + 32.2. Either party may by notice in writing to the other party terminate this Agreement, if any of the following events shall occur, namely: + + 32.2.1. if either party is in breach of any term, condition or provision of this Agreement or required by law and fails to remedy such breach (if capable of remedy) within 14 days of receipt of notice from the other party specifying such breach; + + 21 + + 32.2.2. Change in control + + If there is a change in Control of the first party, the second party may, entirely at their own option and without thereby becoming liable for any costs or losses which the first party or its holding company or any company in which it may hold shares may suffer as a result terminate the Agreement by notice in writing to first party. + + For the purpose of this clause, a person shall have "Control" of a company if he holds, directly or indirectly, shares which together with shares held by any persons acting in concert with him carry 50% or more of the voting rights of that company and "Change in Control" shall be interpreted accordingly. Words and phrases defined in the City Code on Take-overs and Mergers shall have the same meaning here. + + 32.3. Termination, howsoever or whenever occasioned shall be subject to any rights and remedies either party may have under this Agreement or in Law. + + 32.4. the following Clauses shall survive termination for whatever cause of this Agreement: Clauses 4.2, 5, 10.2, 20.4, 23.2, 25-28, 30-34 inclusive. + +33. Rights Upon Termination + + Upon termination of this Agreement and for a period of six (6) months thereafter, the Publishers will have the following rights and obligations: + + 33.1. Commencing upon any notice of termination by the Publishers, HealthGate will comply with the Publishers' reasonable directions, and will provide to the Publishers any and all termination assistance reasonably requested by the Publishers to allow the Services to continue and to facilitate the orderly transfer of responsibility for the Services to the Publishers or a successor provider of Services designated by the Publishers. The termination assistance to be provided to the Publishers by HealthGate may include the following: + + 33.1.1. Continuing to perform, for a reasonable period (as + + + + + + determined by the Publishers) of up to six (6) months following the termination date, any or all of the Services then being performed by HealthGate. + + 33.1.2. Developing, together with the Publishers, a plan for the orderly transition of Services ("Transition Plan") then being performed by HealthGate from HealthGate to the Publishers or such successor provider of Services. + + 33.1.3. Providing reasonable training for personnel of the Publishers in the performance of the Services then being transitioned to the Publishers or such successor provider of Services. + + 22 + + 33.2. If HealthGate is then using any Equipment leased or owned by the Publishers to provide services to any third party, HealthGate may continue to use that Equipment for that purpose until such time as HealthGate can reasonably transition to other equipment. + + 33.3. Upon receipt of written notice from the Publishers that HealthGate is in default under this Agreement by failing to comply with the requirements of this Clause 33, or that HealthGate is in default under any provision regarding rights upon termination of this Agreement, HealthGate shall have ten (10) business days in which to cure such default. HealthGate acknowledges that, in the event HealthGate fails to cure such default within the specified time period, the Publishers would suffer irreparable harm, and HealthGate, hereby agrees that the Publishers would in such event be entitled to obtain from a court of competent jurisdiction an order of specific performance, in addition to such other rights and remedies to which it may be entitled at law or in equity under this Agreement. + + 33.4. Upon the termination of this Agreement or HealthGate's engagement whichever shall be the earlier, HealthGate or its personal representative as the case may be, shall immediately deliver up to the Publishers all correspondence, reports, documents, specifications, papers, information (on whatever media) and property belonging to the Publishers which may be in his possession or under his control together with all confidential information or copyright works belonging to the Publishers specified in Clauses 27 and 31 above. + +34. General + + 34.1. Waiver + + Failure or neglect by either party to enforce at any time any of the provisions hereof shall not be construed nor shall be deemed to be a waiver of that party's rights hereunder nor in any way affect the validity of the whole or any part of this Agreement nor prejudice that party's rights to take subsequent action. + + 34.2. Entire Agreement + + This Agreement constitutes the entire agreement between the parties. Each party confirms that it has not relied upon any representation not recorded in this document or in its Schedules inducing it to enter this Agreement. No variation of these terms and conditions will be valid unless confirmed in writing by authorized signatories of both parties. + + 23 + + 34.3. Assignment + + HealthGate shall not transfer or assign the whole or any part of this Agreement without the prior written consent of the Publishers. + + 34.4. Headings + + he headings of the terms and conditions herein contained are inserted for convenience of reference only and are not intended to be part of or to affect the meaning or interpretation of any of the terms and conditions of this Agreement. + + 34.5. Severability + + In the event that any of these terms, conditions or provisions shall be determined by any competent authority to be invalid, unlawful or unenforceable to any extent, such term, condition or provision shall to that extent be severed from the remaining terms, conditions and provisions which shall continue to be valid to the fullest extent permitted by law. + + 34.6. Notices + + Any notice to be given by either party to the other may be sent by + + + + + + registered post or airmail to the address to the other party as appearing herein and if so sent shall be deemed to be served 4 days following the date of posting, or may be sent by courier and if so shall be deemed to be received when actually received. + + 34.7. Injunctive Relief + + All claims within the scope of this Agreement that any party may have against the other for monetary damages must, subject to Clause 29 (Source Code and Escrow), be pursued through the procedures established in this Agreement. However, nothing in this Clause 34.7 will prevent any party from immediately seeking injunctive or other equitable relief from any court having competent jurisdiction. + + 24 + + 34.8. Law + + The parties hereby agree that this Agreement shall be construed in accordance with English law. Any and all disputes between the parties arising under or in connection with this Agreement which cannot be resolved amicably by the parties, shall be resolved in the courts located in London, England, except with respect to any action brought by the Publishers against HealthGate, in which case jurisdiction and venue shall be in Boston Massachusetts. + + 25 + +Signing Provisions + +SIGNED for and on behalf of the Publishers by: + +/s/ Jonathan Conibear /s/ Joachim Malling + +in the presence of: + +/s/ [ILLEGIBLE] /s/ [ILLEGIBLE] + +Date: 20.3.98 30.4.98 + +SIGNED for and on behalf of HealthGate by: + +By: /s/ William S. Reece ----------------------------------- William S. Reece + +in the presence of: + +/s/ Maria Pace + +Date: + +4.7.98 + +Schedules + +1 Specification 2 Use Fees 3 Project Managers 4 Escrow + + 26 + + SCHEDULE 1 + +HealthGate Data Corp [ILLEGIBLE] + +Blackwell/Munksgaard Journal Publishing + +- -------------------------------------------------------------------------------- + +User Scenarios + +Chapter 1 + + + + + +- -------------------------------------------------------------------------------- + +Blackwell/Munksgaard Journal Publishing + +User Scenarios + +- -------------------------------------------------------------------------------- Overview - -------------------------------------------------------------------------------- + +This document contains outlines, or "scenarios," of how users will access the Blackwell/Munksgaard Journal Publishing system that HealthGate is currently developing. + +The goal of this project is to provide the high standards of Blackwell/Munksgaard publications and services to existing readers online, as well as develop an audience of new Internet users. Since the focus of this project is to expand readership and usage, the design of this project will be driven by user needs and interests. + +The following scenarios illustrate how to optimally meet the needs and offer the widest selection of services to Blackwell/Munksgaard users through a series of chronological steps and options. A user is defined as any party (including individuals or other systems) that will interface with the Blackwell/Munksgaard Journal Publishing system. + +- -------------------------------------------------------------------------------- List of Scenarios - -------------------------------------------------------------------------------- + + Below is a list of the scenarios. The list will be ordered to contain the building block scenarios first, followed by the more complex scenarios. + +- -------------------------------------------------------------------------------- BLACKWELL/MUNKSGAARD PUBLISHING SYSTEM 1 + +Overview 1 + +List of Scenarios 1 + +Registration 3 + + General Registration 3 + + Credit Card Subscription Registration 4 + + Society Member / Institutional Subscriber Self Registration 4 + + Purchase Order or Deposit Account for Institutional Subscribers 5 + + Transaction Registration / Single Document Purchase by non registered user 6 + +Purchases 7 + + Single Document Purchase Registered User with CC Information 7 + + Single Document Purchase Registered User without CC Information 7 + + Single Document Purchase Registered User using Purchase Order 8 + + Additional Subscription Purchase 8 + +Linking 9 + + Bibliographic Linking within an Article 9 + + Related Information Links 10 + +Delivery Options Other than HTML 10 + + Downloading PDF 10 + + Fax Delivery 11 + +Subscriber Features 11 + + User Access to their Custom Page 11 + +Journal Features 12 + + Journal Page 12 + + Issue Listings 13 + + Table of Contents 13 + + + + + + Abstract 13 + + Full Text 14 + + Email version of Table of Contents 14 + + Text Email ........................................... 14 + + HTML Email ........................................... 15 + +Searching 15 + + Quick Search 15 + + Searching Full Text 15 + + Finding an Article Cited Elsewhere 16 + +Customer Help 16 + + Forgotten Password 16 + + Forgotten User Name and Password 17 + + Changing Password 17 + + Changing Email Address 17 + + Changing Credit Card Number 18 + + Changing Other Information 18 + +Content Management 18 + + Journal Setup 18 + + Set Journal Price 18 + + Set Document Price 19 + + Template Submission 19 + +Content Publishing 19 + + Issue Loading 19 + + Issue Review 20 + + Issue Release 20 + +Third Party Access 20 + + General 20 + + Abstracts Only (Headers) 21 + + Abstracts and PDF (Headers and PDF) 21 + + Full Text Blackwell/Munksgaard DTD 21 + + Full Text in Ovid's DTD 21 + + Delivery Options for Third Parties 21 + +Reporting 21 + + User 21 + + Content 22 + +Integration 22 + + HeathMill or Other Subscription Systems to HealthGate Connection 22 + + HealthGate to HeathMill or Other Subscription Systems 23 + + Integration to JPMS 23 + + Integration with Blackwell/Munksgaard Web Site(s) 24 + +Future Items 24 + +- -------------------------------------------------------------------------------- BLACKWELL/MUNKSGAARD PUBLISHING SYSTEM 2 + +Chapter 2 + + User Scenarios + + This chapter contains the Blackwell/Munksgaard Journal Publishing system user scenarios. + + + + + +- -------------------------------------------------------------------------------- Registration - -------------------------------------------------------------------------------- + +General Registration + + Users who access Blackwell/Munksgaard publications will fall into one of three categories: + + a) Non-registered users who are browsing Blackwell/Munksgaard content. These users will have limited access to some free content, but will not be able to access other areas or purchase products. + + b) Registered users who have provided name, email and postal mailing address, but have not provided credit card data. Users in this category include those who have visited the site before and have been assigned a user name and password, as well as Society members who have previously registered. + + c) Purchasing users who have registered, and provided credit card information. These users may have bought subscriptions to Blackwell/Munksgaard journals or other publications in the past. + + For any but the most casual browser, general registration is encouraged, and outlined below. + + 1. Registration procedure: If a non-registered user would like to access certain areas or services, there will be a link provided to the registration area. + + Once the user has entered the registration area, s/he will be asked to provide full name, email address, and postal address. After this information has been entered, the user will be provided with a dialog box to enter a self-selected user name and password. + + 2. Creating user name: The user name is checked for uniqueness against all user names, then added to the database. If the name has already been registered, the user will be provided with three suggested names, or the option to create another user name of their own choice. + + 3. Confirmation of registration: Once a unique user name and password have been assigned, the user may choose to continue the purchase process by linking to pages that will enable him/her to enter credit card information (see "Credit Card Subscription Registration" below). If no purchase is desired at this time, the user will end the registration process at this point S/he will see a page that confirms their registration. Shortly afterwards, the user will also receive an email acknowledging their registration, and providing instructions on what to do if they forget their user name and password. This will also serve to ensure that the user's email address as entered in the registration form is correct. + +- -------------------------------------------------------------------------------- BLACKWELL/MUNKSGAARD PUBLISHING SYSTEM 3 + +USER SCENARIOS REGISTRATION - -------------------------------------------------------------------------------- + +Credit Card Subscription Registration + + Users will now be able to order subscriptions to Blackwell/Munksgaard journals and publications online via a simple registration and secure payment process. In this scenario, the user chooses to pay with a credit card. + + 1. Registration: When the user enters the registration area, s/he will be asked to provide their user name and password. (See "General Registration" above). + + 2. Tracking marketing efforts: A feature to track the efficacy of marketing campaigns may also be incorporated. In addition to entering the above subscriber information, the user will also be asked to provide information pertaining to offer codes, or other identifying characteristics of marketing offers. + + 3. Separating society memberships: Users are asked if they are a member of a society participating in the online journals. If they select a society, their registration information will be checked with an updated automated listing of existing society members. Since a society member is entitled to pre-defined journal subscriptions under a separate agreement, this is done to ensure that a society member is not charged. If the registering user is determined to be a society member, follow the "Society Member Registration" scenario instead. + + 4. Selecting a subscription plan: After entering the registration information, the user will be prompted to select a subscription plan. + + 5. Charging subscriptions: Once the subscription plan has been selected, the user will then be shown a page that provides a secure connection for credit card information. The user will be asked to + + + + + + give the credit card number, type (VISA, MasterCard, AMEX, Discover), and expiration date. + + 6. Transaction receipt: The credit card is then validated and the user is shown the cost that has been charged to the credit card. A receipt is displayed on the screen, as well as emailed to the user. + + 7. Thanks/Email notification of future publications: After the registration process is completed, the user will see a page thanking them for their subscription order. As an added feature, new users will be offered the option of having the table of contents of each new issue emailed to them upon publication. + + 8. Next destination: When the above information is provided, the user will then be given access to the cover page of the journal that has just been ordered. + +Society Member / Institutional Subscriber Self Registration + + If a user is determined to be a Society member or a paid subscriber not know to the system (pre-subscribed by Blackwell/Munksgaard), the following scenario applies: + + 1. Access from marketing efforts: Society membership benefits include subscriptions to pre-defined print journals. In accordance with marketing efforts, inserts promoting online journal registration and the URL for the Blackwell/Munksgaard site will be provided in these journals. Members may also find out about online service via other marketing efforts, such as newsletters, leaflets, direct mail or other web sites. + + 2. Registration info: Once the user accesses the site, he/she will be provided with a form asking for basic registration information (see "Credit Card Subscription Registration," steps 1-7). + +- -------------------------------------------------------------------------------- BLACKWELL/MUNKSGAARD JOURNAL PUBLISHING 4 + +USER SCENARIOS REGISTRATION - -------------------------------------------------------------------------------- + + 3. Membership options: If the name has been matched and verified online as a Society member, the user is presented with a listing of publications and journals, etc. which they may access with existing membership privileges. + + If the user is not verified as a current Society member, the user will be asked to provide standard registration information (see "Credit Card Subscription Registration"). + + In addition to the publication listings, users will be given one of three options as defined by the publisher to receive these subscriptions: + + a. Exclusive online access + + b. Print subscription and optional online access + + c. Full access via both print subscription and online + + 4. Content for purchase: Once users have selected their subscription method, they will be shown additional content available for purchase. + + 5. Creating identity code for user: When content for purchase has been selected by the user, s/he will see a form that enables them to create a user name and password. Once the information has been entered, another dialog box will prompt them to confirm the password. + + 6. Assuring uniqueness of code: The user name is checked for uniqueness against all user names, and added to the list. If the user name has already been registered, they will be provided with three suggested names, or the option to create another user name of their own choice. + + 7. Purchasing additional content: If the user chooses to purchase any of the additional content, the purchase will be charged to the credit card information previously provided. The credit card is validated and charged. If the credit card is declined, the user is prompted to try again. + + 8. Transaction receipt: Once the credit card has been validated, the page shows the cost that has been charged to the credit card. Receipt is presented on the screen, as well as emailed to the user. + + 9. Final step of purchasing process: As the final step in the purchasing process, the user will see a page that thanks them for their order, and shows a listing of all content purchased in the last transaction. + + After purchasing process has been completed, the user will then be given access to their selected content. A confirmation email will be sent welcoming the user to our service. + + + + + +Purchase Order or Deposit Account for Institutional Subscribers + + For those institutions that wish to order subscriptions to Blackwell/Munksgaard journals, publications, and single full-text articles on a consistent basis, an open purchase order or deposit account may be established. The following scenario outlines how a customer would have access via this method. + + 1. Initial set-up: The customer will make the initial contact to Blackwell/Munksgaard to set up the account. Open purchase orders and deposit accounts may be established through either Blackwell/Munksgaard or HealthGate. + +- -------------------------------------------------------------------------------- BLACKWELL/MUNKSGAARD JOURNAL PUBLISHING 5 + +USER SCENARIOS REGISTRATION - -------------------------------------------------------------------------------- + + 2. Access code: After the account has been established, users will then be given a special access code to access the Site. When registering the user will be able to use the access code instead of providing us with credit card information (Access to publications via IP address verification is an option for institutional accounts). + + 3. Registration: When the user completes registration the same way as a normal customer, except that they enter the access code rather than provide billing information. Any charges or purchases will be applied to their account. + + 4. Account expiration: If the account expires, or reaches the monetary cap assigned, the user will be shown a page that prompts them to contact Blackwell/Munksgaard to renew the account. This page will also provide the option to continue and have purchases applied to a credit card. A report will be available warning Blackwell/Munksgaard of accounts that are close to expiring. + +Transaction Registration /Single Document Purchase by non registered user + + This scenario outlines the way in which a user would be able to purchase a single article (document) while browsing the abstract of the article. + + 1. Promoting full text articles: Abstracts are available to all users free of charge; registration is not required. However, if the user would like to buy the full text of any given article, pricing information for the article will be listed at the end of the abstract, with a link to purchase the article. + + 2. Purchasing full text -- registered users: After selecting the link to purchase the article, the user is given the option to log in, using the previously assigned registration user name and password. After logging in, a page showing full text articles and journal subscriptions for purchase will be provided. The user will make his/her selections, and the credit card information page will appear. (Go to step #5) + + 3. Purchasing full text -- new users: If the user has never registered before, they will be asked to register. + + 4. Registration: When the user enters the registration area, s/he will be asked to provide basic identifying information (See "General Registration" above). + + 5. Credit card info: The user will then be shown a page that provides a secure connection for credit card information. The user will be asked to give the credit card number, type (VISA, MasterCard, AMEX, Discover), and expiration date. + + 6. Credit card validation: The credit card is validated, and the user is given confirmation that they are about to be charged for the requested full text article(s) and/or journal subscription(s). + + 7. Fax delivery/other purchase options: An option to have the article faxed to them for an additional fee (to be determined) is also offered. + + 8. Transaction confirmation: Once the user has completed the above steps, a receipt listing all purchases is shown on the page; a copy will also be emailed to them. + + 9. Transaction cancellation: If the user cancels the transaction, then they are returned to the abstract of the article. + + 10. Content access: After the user confirms the charge, s/he is given access to the content for a specified period of time (hours/days to be determined.) + +- -------------------------------------------------------------------------------- BLACKWELL/MUNKSGAARD JOURNAL PUBLISHING 6 + +USER SCENARIOS PURCHASES - -------------------------------------------------------------------------------- + + + + + + Articles are provided to the user in both PDF and HTML format + +- -------------------------------------------------------------------------------- Purchases - -------------------------------------------------------------------------------- + + The scenarios below outline single document purchases. There also will be a facility to purchase multiple documents in a shopping basked like manner. + +Single Document Purchase Registered User with CC Information + + In this scenario, a registered user requests a document to which they do not currently have access. For example, they may be viewing an abstract from a journal that is not part of their subscription, or they may be referencing a new document (full text) In this scenario we assume that the user has a credit card on file or an open purchase order (PO). + + 1. Registration update: At the end of an abstract, a link is provided which enables the user to purchase a related document or product (i.e., full text article, journal subscription, book, etc.) The link brings the user to a page that offers purchase options, lists the price of the full text article and allows registered users to enter their user name and password. Non-registered users would have to register in order to enter credit card information. + + 2. Login: Registered users will log on, confirming registration. Then they will be shown a price confirmation and delivery options. + + 3. Optional fax delivery: If the requested document is an article, the user will be offered an option to have the article faxed for an additional fee (to be determined). + + 4. Transaction confirmation: Once the user has completed the above steps, a receipt listing all purchases is shown on the page; a copy will also be emailed to them. + + 5. Transaction cancellation: If the user cancels the transaction, they are returned to the abstract of the article. + + 6. Content access: After the user confirms the charge, s/he is given access to the content for a specified period of time (hours/days to be determined.) + + Articles are provided to the user in both HTML and PDF formats. + +Single Document Purchase Registered User without CC Information + + In this scenario, a registered user requests to see a document to which they do not currently have access. For example, they may be viewing an abstract from a new journal and decide they would like to subscribe. In this scenario, we assume that the user does not have a credit card on file or an open PO. + + 1. Registration update: At the end of an abstract, a link is provided which enables the user to purchase a related document or product (i.e., full text article, journal subscription, book, etc.) The link brings the user to a page that offers purchase options, and lists the price of the full text article. The user will be asked to a) register, or b) login. + + 2. Login. Registered users will login. + + 3. Credit card info: Then if they do not have credit card information on file or if their credit card has expired, they will be shown a page which provides a secure connection for credit card information. The user will be asked to give the credit card number, type (VISA, MasterCard, AMEX, Discover), and expiration date. + +- -------------------------------------------------------------------------------- BLACKWELL/MUNKSGAARD JOURNAL PUBLISHING 7 + +USER SCENARIOS PURCHASES - -------------------------------------------------------------------------------- + + 4. Credit card validation: The credit card is validated, and the user is given confirmation that they are about to be charged for the requested full text article(s) journal subscription(s), etc. (Any relevant discounts will be shown on screen at this time.) + + 5. Optional fax delivery: If the requested document is an article, the user will be offered an option to have the article faxed for an additional fee (to be determined). + + 6. Transaction confirmation: Once the user has completed the above steps, a receipt listing all purchases is shown on the page; a copy will also be emailed to them. + + 7. Transaction cancellation: If the user cancels the transaction, they are returned to the abstract of the article. + + 8. Content access: After the user confirms the charge, he/she is given access to the content for a specified period of time (hours/days to + + + + + + be determined). + + Articles are provided to the user in both HTML and PDF formats. + +Single Document Purchase Registered User using Purchase Order + + In this scenario, a registered user requests a document to which they do not currently have access and choose to pay via an existing purchase order which they have set up with Blackwell/Munksgaard. If they do not have a purchase order, they will be asked to contact Blackwell/Munksgaard. + + 1. Registration update: At the end of an abstract, a link is provided which enables the user to purchase a related document or product (i.e., full text article, journal subscription, book, etc.) The link brings the user to a page that offers purchase options, and lists the price of the full text article. The user will be asked to a) register, or b) login. + + 2. Login. Registered users will login with an account that has been tagged for all charges to be applied to an existing purchase order. + + 3. Purchase Order validation: The purchase order is validated to assure that this charge will not go over the total amount on the purchase order. The user is given confirmation that they are about to be charged for the requested full text article(s). (Any relevant discounts will be shown on screen at this time.) + + 4. Optional fax delivery: If the requested document is an article, the user will be offered an option to have the article faxed for an additional fee (to be determined). + + 5. Transaction confirmation: Once the user has completed the above steps, a receipt listing all purchases is shown on the page; a copy will also be emailed to them. + + 6. Transaction cancellation: If the user cancels the transaction, they are returned to the abstract of the article. + + 7. Content access: After the user confirms the charge, he/she is given access to the content for a specified period of time (hours/days to be determined.) + + Articles are provided to the user in both HTML and PDF formats. + +Additional Subscription Purchase + + Online users will be provided with several opportunities throughout the site to subscribe to other journals; these purchase options will be inserted in areas that contextually will promote the likelihood of a sale. + +- -------------------------------------------------------------------------------- BLACKWELL/MUNKSGAARD JOURNAL PUBLISHING 8 + +USER SCENARIOS LINKING - -------------------------------------------------------------------------------- + + The following scenario provides an example of how the need for additional full text articles and/or a journal subscription results in a sale. + + 1. Point of entry: A user reads an article in a journal to which they subscribe. Searching for more information in this subject area, the user clicks on the link to related articles. + + 2. Exposure to new journal: After viewing the list of related articles, the user notes that the articles of the most interest are all in a journal to which s/he does not currently subscribe. At this point the user has a choice: s/he may either purchase the full text of some or all the articles, or consider a subscription to the journal itself, which will provide unlimited access to these and other articles year-round. The user decides to find out more information about the journal. + + 3. Journal description: All journal titles will be linked. When the user clicks on a journal link, he/she will see a page that provides a brief description of the journal, the frequency of publication, and pricing information. + + 4. Purchasing procedure: The user decides to purchase the journal. Since this user has already subscribed to at least one other journal, his/her identification and credit card data are already stored in the system. + + The user is given the option of charging the subscription to the existing account, or entering new credit card information. (See "Credit Card Subscription Registration" above). + + 5. Confirmation of purchase: Once the user has indicated which credit card is to be charged, the purchase is charged and validated. The user will then be shown a page that provides a receipt for the journal subscription purchase. Confirmation of the purchase will also be sent to the user via email. + + 6. Other tie-ins to purchase: After confirmation, the user may link to his/her own custom page to find that the new subscription has been + + + + + + documented, and the custom page updated. + + 7. Next destination: At the end of the transaction, the user will be shown the selected volume of the journal. + +- -------------------------------------------------------------------------------- Linking - -------------------------------------------------------------------------------- + +Bibliographic Linking within an Article + + This scenario illustrates how a user would link to and from bibliographic information contained within an article. + + 1. Reference links: Reference citations within all articles will be linked to bibliographic references (or endnotes.) When the user clicks on the citation in the article, a page showing the complete listing of references for that article will be displayed. + + 2. Database links: When the user clicks on the MEDLINE link, s/he will be shown the corresponding MEDLINE abstract for the cited article, if the journal is indexed for inclusion in MEDLINE. (Similar functionality will exist with ISI Web of Science). + + 3. Full text/Journal subscription purchase option: If full text is available for the cited reference, it will be offered for purchase at this point; journal subscription purchase may be offered as well. Abstracts will also be available from the references. These purchase options will be displayed along with pricing information. If the user is not a subscriber to the cited journal, and chooses to purchase the article, or subscribe to the journal, new pages + +- -------------------------------------------------------------------------------- BLACKWELL/MUNKSGAARD JOURNAL PUBLISHING 9 + +USER SCENARIOS DELIVERY OPTIONS OTHER THAN HTML - -------------------------------------------------------------------------------- + + leading them through the purchase process will automatically be shown. (See "Single Document Purchase" and "Additional Subscription Purchase" above.) + + 4. Subscription tracking: If the user is already a subscriber to the journal that contains the selected article, the user will be informed that they may access the article free. + + 5. Other reference options: All articles will also contain a side bar which lists (and links to) other full text articles available within the Blackwell/Munksgaard collection that references this article (forward bibliographic references). + + 6. In Press Bibliographic Links: Links will not exist to bibliographic references that are still in press. However, the system will check regularly to link them once the article has been published. + + 7. Exit from abstract: The user will also be able to return to the previous article from the abstract. + +Related Information Links + + When viewing an article, the user will be provided with a side bar that outlines several related links pertaining to the article they are currently reading. In this scenario, we highlight some of the different types of links that may be offered. + + 1. Author listing: The names of all authors of the current article will be provided as links. When the user clicks on the link of a selected author, s/he will be presented with a listing of other articles written by that author. These titles will be linked to the corresponding abstract and/or full text. If available, full text purchase and/or PDF versions of the selected article will be offered. + + 2. Related articles by subject: A listing of related linked subject areas will also be provided. When the user clicks on these areas, s/he will receive a listing of related articles searched by MeSH headings and keywords. + + 3. Related published information: Users interested in reading other published information related to the chosen article will find that the side bar provides them with links to: + + a. Correspondence (letters, editorials, etc) pertaining to that article + + b. Errata (article addenda, corrections, etc.) pertaining to that article + + 4. Services: The user will also be able to take advantage of certain services. One service will be the ability to email the URL of a chosen article to a colleague. When the user chooses this option, s/he will be presented with a page to enter an email address, and a "send" button. + + + + + +- -------------------------------------------------------------------------------- Delivery Options Other than HTML - -------------------------------------------------------------------------------- + +Downloading PDF + + For those full text articles available in PDF format, the user will be given the option of PDF downloading. + + 1. Linked PDF option: On the article page, a link offering the PDF option will be found. The users will have the option to download the PDF file or have it emailed to them. If the user choose to download the document they will be prompted to save it. + +- -------------------------------------------------------------------------------- BLACKWELL/MUNKSGAARD JOURNAL PUBLISHING 10 + +USER SCENARIOS SUBSCRIBER FEATURES - -------------------------------------------------------------------------------- + + 2. Adobe instructions for downloading: If the user does not have Acrobat installed, the download page will explain the need to install the Acrobat plug-in. A link to Adobe for detailed instructions on how to install the plug-in will be provided. + + If the user does not wish to download Acrobat at that time, the user will be prompted to download to their hard drive. They may open the PDF document after Acrobat has been downloaded at their convenience. + +Fax Delivery + + Users who want the benefits of how an article appears in PDF, but who do not wish to download the article in this format, can request fax delivery of the article for an additional charge. + + 1. After confirming that the user wishes to purchase an article (or in the case of subscriptions, displaying the record on screen), the user selects the method of displaying the article: HTML, PDF, or "Receive via Fax." Because this is a premium option, the user will be asked to confirm the additional fees for fax delivery. + + 2. The user then supplies their fax number. + + 3. To keep costs low, the article is relayed to a commercial fax service, such as FaxNet, which sends the information via Web-based fax to the user. + +- -------------------------------------------------------------------------------- Subscriber Features - -------------------------------------------------------------------------------- + +User Access to their Custom Page + + Another free feature offered to Blackwell/Munksgaard subscribers is a custom-designed page which will provide them with information tailored to their unique areas of interest, as well as accounting of their subscription plans and other services. The following are highlights of features that may be offered to subscribers. + + 1. Initial log-in: The user accesses the Blackwell/Munksgaard Journals home page. From this page there is a login link that requires the user to enter their user name and password (if they are unable to remember their user name and password, they may enter their email address, which will then provide them with the correct login information via return email). Once the correct information has been entered, subscribers are brought to their custom page. + + 2. Custom Page features: The custom page will provide the user with: + + a. Subscription information: All subscription information pertaining to the user's account will be provided, including: names of journal subscriptions (listed and linked), pricing of each subscription, and the duration of subscription. + + b. Updates on new content: Each subscriber will be provided with updates on new content that correlates to their specified area(s) of interest. This includes new journal articles, correspondence, news, etc. + + c. Customer Service: Users can choose to change their password, subscriptions, credit card information, etc. by accessing the customer service area at any time. Users may also email questions regarding their subscription in this customer service area. + + d. Searching: The user will have a variety of methods to track and save searches from the custom page, including: + +- -------------------------------------------------------------------------------- BLACKWELL/MUNKSGAARD JOURNAL PUBLISHING 11 + +USER SCENARIOS JOURNAL FEATURES - -------------------------------------------------------------------------------- + + + + + + i) Entering searches from various journal sets (e.g., searches of just Blackwell/Munksgaard journals, or all journals in a related subject area.) + + ii) Saved searches: The user will have the ability to view the last five documents reviewed or the last five subject area searches conducted. + + iii) Collaborative filtering: In the future once an article has been read, a user may choose to review which related articles have been read by other users. A listing of the most frequently accessed articles in the topic will be provided. + + (For a more detailed description of the searching capabilities, see the "Searching" category below.) + + e. Promotions and advertising: The user will be notified in the Custom Page of any promotions that may be of interest (i.e., discount rates, product offers, society notices, etc.) In addition, users will be able to view advertising pertaining to their interests on this page. + + f. Interactive communication: This area will contain features that allow users to communicate via email with Blackwell/Munksgaard. This may be used, for example, to post notices of errata for articles. A mechanism for acknowledging these notices will also be provided. + +- -------------------------------------------------------------------------------- Journal Features - -------------------------------------------------------------------------------- + + The following scenarios pertain to organization of the journals and their various components on the Blackwell/Munksgaard site. + +Journal Page + + Users will be able to access information pertaining to subscriptions and other publisher information directly from the journal pages, which will be customized for each specific journal. We recommend that these pages follow a standardized format, including links to the following (where applicable): + + a) Publisher's home page: A link will bring the user to the home page of the appropriate publisher of the journal, either Blackwell/Munksgaard Science Ltd., Blackwell/Munksgaard Science Inc., or Munksgaard. + + b) Society's home page: If the journal is published for a society, users will be able to directly link to the society's home page + + c) Journal information: Information regarding publication cycles and other publication information will be provided via this link. + + d) Journal subscriptions: If a user wishes to find detailed information about subscribing to journals, this link will bring them to a page which will provide pricing information, etc. + + e) Journal listing by publisher: This link will provide the user with a complete listing of journals, categorized by publisher + + f) Listing of available back issues: For users wishing to search previous journal issues, this link will show a listing of back issues available + + g) Current table of contents: Users will be able to quickly access the most current table of contents from this link + +- -------------------------------------------------------------------------------- BLACKWELL/MUNKSGAARD JOURNAL PUBLISHING 12 + +USER SCENARIOS JOURNAL FEATURES - -------------------------------------------------------------------------------- + + h) Submission information: Prospective authors will find author's guidelines and other submission information at this link + + i) Letter to the editor via email: Users who wish to contribute opinions to the journal editor will be able to link to a pop-up email window, and send correspondence via email. This is optional. + + j) Email to support: This link will provide users with the opportunity to ask questions or request information from support staff via email + + k) Copyright statements: All pertinent copyright information and legal disclaimers will be provided via this link + +Issue Listings + + Issues will be displayed in the following manner: + + a) Organization of journals: Journals will be organized by volume, beginning with the most recent publication, and then catalogued in descending chronological order, grouped by year. + + + + + + b) Supplements: Any supplemental issues will be grouped with the appropriate volume. + + c) Listing by topic or theme: Each journal listing will also indicate relevant topics or themes and page ranges where applicable. + + d) Accessibility: Users will be able to access these journal volumes from both their custom pages, as well as journal cover pages. + +Table of Contents + + Tables of Contents will be displayed in the following format: + + a) The table of contents list the articles published in the issue by page number + + b) Each article listed contains the title (or title abbreviation for longer titles), primary author(s) as well as page numbers. + + c) From the article listing there will be links to the abstract, full text, PDF versions of the article and supplemental information. + + d) Prices of the full text and PDF versions may also be listed. + +Abstract + + All Blackwell/Munksgaard journal abstracts will be displayed in the following format: + + a) Title + + b) Source + + c) Author + + d) Abstract + + e) Address + +- -------------------------------------------------------------------------------- BLACKWELL/MUNKSGAARD JOURNAL PUBLISHING 13 + +USER SCENARIOS JOURNAL FEATURES - -------------------------------------------------------------------------------- + + f) Keywords + + g) Article Type (Case report, review, rapid publication, original article). + + h) If applicable, both the MEDLINE Unique Identifier and MeSH terms will be available + +Full Text + + As users read full text documents, they will be able to access the following feature enhancements: + + a) Linked references: References cited within the body of the article will be linked to the bibliographic references (endnotes) for that article. A link from the bibliographic reference to the abstract (pulled from secondary databases, reference databases), if available, is provided. If the corresponding article is available online in the Blackwell/Munksgaard collection, a link to the full-text with option to purchase will be provided. + + b) Publication listing by author: All primary authors of the article will be listed. The name of each author will be linked so that if the user selects the author's name, a listing will be provided of other available articles written this author. Again, these articles in turn will be linked to their corresponding abstracts. If the corresponding article is available online in the Blackwell/Munksgaard collection, a link to the full-text with option to purchase will be provided. + + c) Link by keywords: The user will be provided with an option to search for other related articles by keyword. + + d) Email option: If a user would like to send a link to the abstract to a colleague, an email window will be available. The user only needs to type in the destination email address, and an automatic message providing the article title and corresponding URL of the abstract will be sent. + + e) Supplemental Information: Links to supplemental information related to the article will be presented if the information is available. + +Email version of Table of Contents + + A valuable reminder of newly released publications is the table of contents email option. If users choose this feature (usually done during subscription registration and payment), they will be sent the new table of contents for each journal to which they have subscribed. This feature will be available to both subscribers as well as non-subscribing users. + + + + + + This scenario shows what a user can do after receiving an emailed version of the table of contents. The scenario has two parts: one for text-based email, the other for HTML enabled email. + +Text Email + + 1. Receipt of email announcement: User receives an email message and opens it in their email reader. + + 2. Table of contents listing: The message contains the table of contents of the newly published issue of the journal. + + 3. URL linking: The email contains the URL for the Blackwell/Munksgaard site. This link will be "live" in most email readers, and will bring the user directly to the online version of the table of contents. + +- -------------------------------------------------------------------------------- BLACKWELL/MUNKSGAARD JOURNAL PUBLISHING 14 + +USER SCENARIOS SEARCHING - -------------------------------------------------------------------------------- + + 4. Article linking: Once the user accesses the table of contents, s/he will find that all titles are linked to abstracts and the online full text article. + +HTML Email + + 1. Receipt of email announcement: The user receives an HTML based email message, and opens it in their HTML enabled mail reader (e.g., Outlook Express, Outlook 98, Netscape 3.x and higher). + + 2. Table of contents: The message contains the complete table of contents, and may be viewed exactly as it would look on the web site. + + 3. URL linking: The email contains the URL for the Blackwell/Munksgaard site. This link will be clickable in most email readers, and will bring the user directly to the online version of the table of contents. + + 4. Article linking: Once the user accesses the table of contents, s/he will find that all titles are linked to abstracts and the online full text article. + +- -------------------------------------------------------------------------------- Searching - -------------------------------------------------------------------------------- + + The capacity to search using a variety of keywords and subject headings is of critical importance to users, and is an especially important feature of the Blackwell/Munksgaard site. + + Users will have the ability to select which set of journals to search. Some example sets are: All Full Text Journals, All Subscribed Journals, and Journals by particular Publisher. Searches that return a single document will forward the user to the abstract or full text if they have access to the full text. + + The following scenarios outline several ways in which a subscriber may search for content. In addition to offering different types of searching mechanisms (i.e., "quick searches" through advanced searches), users will also be able to access the searching capability from various areas of the site. The following scenarios outline some of the search possibilities. + +Quick Search + + A "Quick Search" enables the user to search on a topic (e.g., insulin pumps) and obtain a listing of areas where this topic is cited. + + 1. From custom page: From the custom page, users would enter a keyword or phrase in the quick search box. The user would select the All Subscribed journal set, and then submit the query. + + 2. Results: The search returns a listing of all articles; each linked to the full text, PDF, and the abstract where available. + + 3. Save Query: On the results page, the user would have the option of saving the query. This adds the query to the user's customized page. + +Searching Full Text + + Another option is to search the entire full text of a document for specific terms. The following is a sample of how this search could be conducted from the user's custom page. + +- -------------------------------------------------------------------------------- BLACKWELL/MUNKSGAARD JOURNAL PUBLISHING 15 + +USER SCENARIOS CUSTOMER HELP - -------------------------------------------------------------------------------- + + + + + + 1. Advanced search option: The user selects the advanced search option from the search box. + + 2. Document choice: The user decides to view only abstracts; s/he selects this choice from the pull down list of available fields to search. + + 3. Subject choice: The user chooses the keyword or phrase they wish to search, (e.g., lispro or Humalog), and enters it into the advanced search form. This criterion is then added to the query. + + 4. Journal choice: The user then selects the journal set to search, and selects the "All Full Text Journals" option. The query is then submitted. + + 5. Results: The results contain a listing of all full text articles available that match the user's search criteria. Included in this list is the price of each full text document that references these keywords, with the option to download. In addition, the entries that the user has subscription access to would be noted. Results can be ordered by relevancy, date, author and journal title. + + The user has the ability to save the query. + +Finding an Article Cited Elsewhere + + This scenario provides the user with HealthGate's Citation Finder Technology. It allows a subscriber the ability to quickly locate the abstract (and the full text if available) from a bibliographic reference. + + 1. Access from custom page: From the registered subscriber's customized page, s/he selects the Citation Finder option. The Citation Finder page is pre-loaded and has a field for entry of the citation. The user can either input the citation information or "copy and paste" it into the appropriate fields. The Citation Finder does not require information in all fields to execute a search successfully. + + 2. Search criteria: The user then selects the fields, or information, which s/he wants to search. Examples of these fields include author, journal name, year, volume, issue, article title, and all fields. For this example, the user selects author, article title, and journal name. + + 3. Results: The user submits the query. If an exact match is found, the abstract will be provided. If not, the user is presented with a list of matches from which to select. + +- -------------------------------------------------------------------------------- Customer Help - -------------------------------------------------------------------------------- + + Blackwell/Munksgaard will have administrative access to these features. All access will be recorded to monitor any possible abuse. + +Forgotten Password + + When a user forgets his/her password, the system provides a mechanism for the user to look up and find their password without calling customer service. This scenario shows how that is accomplished: + + 1. On the login page, a user who has forgotten their password selects the link "forgotten password." + +- -------------------------------------------------------------------------------- BLACKWELL/MUNKSGAARD JOURNAL PUBLISHING 16 + +USER SCENARIOS CUSTOMER HELP - -------------------------------------------------------------------------------- + + 2. The user is asked to complete a form where the required information is user name, first name, and last name. + + 3. The system will search the user database to see if there is a match. If there is a match, the system will send the user's password to the email address on file. The system will then tell the user that their password is being sent to them via email. + + 4. If there is not a match, the system will prompt them to try again or allow them to search for user name and password. + +Forgotten User Name and Password + + When a user forgets his/her password, the system provides a mechanism for the user to look up and find their password without calling customer service. This scenario shows how that is accomplished: + + 1. On the login page, a user who has forgotten their password selects the link "forgotten password." + + 2. If they do not remember their user name, the user is prompted to enter their first name, last name, and email address. + + 3. The system will compare the information supplied by the user against the user database and email both the user name and password to the + + + + + + address on file if there is a match. + + 4. If there is not a match, the user is instructed to either try again or contact customer service. + +Changing Password + + Users often want to change their password. The system gives them an easy way to do so. + + 1. From the user's personal profile page, the user selects the link to "Modify Profile." + + 2. The Modify Profile page will allow them to go to a change password form. + + 3. This form will ask the user to type their current password, then enter a new password. To confirm, the user is asked to type their new password again. + + 4. Upon correct entry (the old password matched the one on file and the two new passwords matched), the password will be updated and the user will be told that the change has been made. + + 5. If the entry is not correct then the user will be prompted to try again. + +Changing Email Address + + Users often want to change their email address. The system gives them an easy way to do so. + + 1. This feature is available in several places, such as the "Modify Profile" page and the regularly scheduled email messages sent by the system to the user. + + 2. From the Modify Profile page, the user would select a link to change their email address. From an email message, the user selects the link embedded in the email. When accessing the appropriate page via the email link, the user will be prompted for user name and password. + +- -------------------------------------------------------------------------------- BLACKWELL/MUNKSGAARD JOURNAL PUBLISHING 17 + +USER SCENARIOS CONTENT MANAGEMENT - -------------------------------------------------------------------------------- + + 3. A form will ask for the users new email address (actually allowing them to edit their old email address). + + 4. Upon successful entry, the email address is checked for validity and an email message is sent the address for confirmation. + +Changing Credit Card Number + + Users often want to change their credit card information on file. The system gives them an easy way to do so. This method of updating the credit card is also used when the credit card on file has expired. Customers with expired credit cards are forced to enter a new credit card when they are about to incur additional charges. + + 1. This feature is available from the "Modify Profile" page. + + 2. The user is connected to the secure server and asked to enter the new credit card information. + + 3. The credit card is validated with a credit card clearing house. + + 4. If validated, the user is given a confirmation page. + + 5. If the card is not validated, the user is asked to try again. + +Changing Other Information + + Users are able to change other information off the "Modify Profile" page by selecting the appropriate link. Examples of other information that may be changed are postal address, purchasing new subscriptions, and change the format in which they received emailed information (HTML verses text). + +- -------------------------------------------------------------------------------- Content Management - -------------------------------------------------------------------------------- + +Journal Setup + + The procedure to setup new journals and their initial entry into the system must be initiated by Blackwell/Munksgaard. It is possible to setup a journal manually or electronically. The manual procedure for setting up a new journal entry is as follows: + + 1. The authorized Blackwell/Munksgaard employee establishes a connection to the Administration side of the site. + + + + + + 2. When prompted, the employee enters the appropriate user name/password and establishes a secure connection. + + 3. The employee selects the option New Journal and enters all applicable information, such as title, copyright statements, submissions, subscription, etc. + + 4. The employee enters Society information, if applicable, including name, links, and board members. + +Set Journal Price + + It is possible to setup a journal price manually or electronically. After setting up the basic journal information, pricing criteria may be entered: + +- -------------------------------------------------------------------------------- BLACKWELL/MUNKSGAARD JOURNAL PUBLISHING 18 + +USER SCENARIOS CONTENT PUBLISHING - -------------------------------------------------------------------------------- + + 1. The authorized Blackwell/Munksgaard employee accesses the appropriate journal (the journal must be setup using the Journal Setup before establishing the journal price) and selects the option "Journal Pricing." + + 2. The employee then assigns the price in multiple currencies, any and all subscription plans, including rates for print companion, electronic only, and Society membership. + + 3. The employee then assigns pricing for each of the selected currencies. + +Set Document Price + + 1. The default for all document pricing is established by Blackwell/Munksgaard. The Blackwell/Munksgaard employee may override the default and establish a special price for documents from a specific journal title. + + 2. To override the default document price, the employee accesses the appropriate journal (the journal must be setup using the Journal Setup before establishing the document price) and selects the option "Document Pricing." + + 3. The employee then assigns the revised price in various currencies for document delivery. + + 4. The price may be revised to the default at any time by accessing the journal and selecting the option to Restore Default Price. + +Template Submission + + Initially, templates will be hand loaded by HealthGate Data Corp. to insure security and consistency. + + To accomplish this, an FTP location will be provided to allow templates to be copied over and reviewed (and tested) prior to releasing them. + +- -------------------------------------------------------------------------------- Content Publishing - -------------------------------------------------------------------------------- + +Issue Loading + + 1. Loading upon receipt: All content for a new issue is loaded upon receipt in a single directory. + + 2. Identification: A form is completed which indicates appropriate journal, issue, and volume. It is also possible to enter this information electronically. + + 3. Back-up: Upon submission, the content is copied to the content repository, before conversion. This allows it to be referenced in the future. + + 4. Conversion: The content is then converted to our internal Extensible Markup Language (XML) format. + + 5. Storage: The XML version is then stored in the content repository. + + 6. Parsing: The XML is then parsed to add more information, including tags to link bibliographic information and related information. + + 7. Storage of parsed content: This parsed XML version is also stored in the content repository. + +- -------------------------------------------------------------------------------- BLACKWELL/MUNKSGAARD JOURNAL PUBLISHING 19 + +USER SCENARIOS THIRD PARTY ACCESS - -------------------------------------------------------------------------------- + + + + + + 8. Conversion to HTML: An Extensible Style Language (XSL) template is used to convert the file to HTML. + + 9. HTML on staging: The HTML version is made available on the staging server. + +Issue Review + + 1. The issue is made available on the staging server + + 2. Email is sent to Blackwell/Munksgaard alerting the appropriate personnel that the issue is available for review. + + 3. An employee wishing to review the issue would log on to the staging server, and select the content they wish to review. This is limited to authorized users only. Authorization is by group of journals. + + 4. The content is presented to them in the same way it is shown to an end user. However, they also have access to a tool bar (in a frame). The tool bar allows them to approve the content as well as adjust some of the properties of the article. + + 5. They can change the price or approve the article for release. + +Issue Release + + An issue will be released automatically on the assigned electronic publication date if all the articles contained in the issue have been edited and approved for release. Blackwell/Munksgaard will be alerted to content that has not be reviewed after a predetermined amount of time. + + A Blackwell/Munksgaard employee would access the Journal Publishing System, a secure area, and go to the System Control area. + + 1. A list of issues that are ready or awaiting publication would be available. When an issue is selected, the listing of properties for that issue will be presented. + + 2. The user would be able to adjust any of the properties. + + 3. To publish the issue, the user would set the publication date to the following day. + +- -------------------------------------------------------------------------------- Third Party Access - -------------------------------------------------------------------------------- + +General + + Creating an abstract-only export: To create an abstract-only export, a Blackwell/Munksgaard employee will need to determine the list of journal abstracts to be included for extract, the formatting of the extract, and a user profile of which third parties will have access to the extract file. + + 1. Criteria: Once the above information has been determined, the following information will need to be entered: + + a. Frequency of updating abstract information, + + b. Packaging method (tar, zip), push, pull or tape. + +- -------------------------------------------------------------------------------- BLACKWELL/MUNKSGAARD JOURNAL PUBLISHING 20 + +USER SCENARIOS REPORTING - -------------------------------------------------------------------------------- + + 2. Push extracts: For push extracts (extracts that are sent to someone either via FTP or email), a user will have to enter the destination email address, or the FTP server, directory, user name and password to use. + + 3. Pull extracts: For pull extracts (extracts that require someone to pull the content off the journal server), a user will have to enter the user name and password that the third party will use to retrieve the content. + + 4. Tape based abstracts: Tape based abstracts will be handled similar to FTP pulls except that they would be loaded to tape and sent via postal service. + +Abstracts Only (Headers) + + Some customers want the abstracts only. This will allow bibliographic database to receive the information in electronic form rather than having to re-key the documents. Ideally, all databases would also receive information pointing them to the full text version of the documents. The directory structure will also be included with this abstract. It is possible to create a different directory structure and will have to be handled on an ad-hoc basis. + + This scenario will be completed upon the supply of the final version of the Blackwell/Munksgaard DTD. + + + + + +Abstracts and PDF (Headers and PDF) + + This type of export would use the same DTD as the abstracts only, but would include a reference to the PDF file inside each header. This extract would obviously also include the PDF files. + +Full Text Blackwell/Munksgaard DTD + + This export will take the Blackwell/Munksgaard SGML files in full as well as graphic files and PDF files. + +Full Text in Ovid's DTD + + This export will convert the full text to Ovid's DTD and includes the graphic files and PDF files. + +Delivery Options for Third Parties + + Third parties will have the option to receive information via HTTP, FTP (either sent to them or picked up), tape (4mm, 8mm, DLT) or CD-ROM. + +- -------------------------------------------------------------------------------- Reporting - -------------------------------------------------------------------------------- + + This section defines some of the reports available to Blackwell/Munksgaard. It is expected that customization of reports will continue to be refined over the duration of the project. This will allow both HealthGate and Blackwell/Munksgaard to make necessary adjustments. As a future direction HealthGate will provide direct access to the SQL database (via ODBC or similar methods). + +User + + Each time an authorized user logs on, information regarding their usage, purchases and transactions will be tracked. From this data, reports may be compiled to include the following: + +- -------------------------------------------------------------------------------- BLACKWELL/MUNKSGAARD JOURNAL PUBLISHING 21 + +USER SCENARIOS INTEGRATION - -------------------------------------------------------------------------------- + + o Last usage: This information indicates when the user last accessed the system + + o Number of subscriptions per user: Will list how many subscriptions and the title of each journal subscription that the user has bought + + o Number of documents delivered (excluding subscriptions): The number of documents (such as full text articles, etc.) purchased by the user will be reported + + o Number of documents read within a subscription: This will provide a feature unique to the online medium; for the first time, editors will be able to track which articles were viewed with the most interest by their readers within a subscription. + + o Accounting of all charges: Reports will have the capacity to reflect accounting of all accrued charges by subscribers, document delivery, etc. + +Content + + Each time an article is accessed by an authorized user, information regarding usage, purchases and transactions will be tracked. These reports could be grouped by abstract, article, issue, volume, journal and publisher. From this data, reports may be compiled to include the following: + + o Number of documents read by subscribers: The number of times each document (full-text article) from a specific issue is accessed by subscribers + + o Number of documents read by non-subscribers: The number of times each document (full-text article) from a specific issue are purchased by non-subscribers + + o Advertisements shown per issue: The specific advertisement and number of times displayed from each issue. + + o Accounting of all charges: Reports will have the capacity to reflect accounting of all accrued charges by subscribers, document delivery, etc. associated with a specific issue + + o Title and number of subscriptions: The number of subscriptions for each journal + +- -------------------------------------------------------------------------------- Integration - -------------------------------------------------------------------------------- + +HeathMill or Other Subscription Systems to HealthGate Connection + + + + + + On a regular basis, the following information will be transferred to the publishing system. The information will be in a format to be determined. Each user record can include the following information: + + o User Information + + o Update/Add/Delete Flag + + o HeathMill Account Number + + o Name (first, middle, surname) + + o Address Information + + o Email Address + +- -------------------------------------------------------------------------------- BLACKWELL/MUNKSGAARD JOURNAL PUBLISHING 22 + +USER SCENARIOS INTEGRATION - -------------------------------------------------------------------------------- + + o Contracts (Subscriptions) + + o Account Number + + o Group, Society, and type of membership + + o Expiration Date + + o Start Date + + o Volume and Issue Start + + o Volume and Issue End + + o Journal List + + o Short Code + + o Subject Code + + o ISSN Electronic Version + + o ISSN Print + + o Price Band + +HealthGate to HeathMill or Other Subscription Systems + + HealthGate will send back to HealthMill the user and subscription Information from above. + +Integration to JPMS + + For integration to JPMS, the Publishing System will send messages each time an issue completes the following stages: + + o Received + + o Loaded + + o Staging + + o Review Complete + + o Live + + These messages will contain the following information: + + o Message Code (Received, Loaded, Staging, Review, Live, Deleted) + + o ISSN (both electronic and paper) + + o Journal Short Code + + o Volume + + o Issue + +- -------------------------------------------------------------------------------- BLACKWELL/MUNKSGAARD JOURNAL PUBLISHING 23 + +USER SCENARIOS FUTURE ITEMS - -------------------------------------------------------------------------------- + + o Date + + o Scheduled Publication Date + + o Actual Publication Date (if known) + + + + + + In the event that an article is withdrawn, a message containing the following will be sent: + + o Message Code (Staging, Review, Live, Deleted) + + o ISSN (both electronic and paper) + + o Journal Short Code + + o Volume + + o Issue + + o Article + + o Page range + + o Date + +Integration with Blackwell/Munksgaard Web Site(s) + + The system will provide an interface to access table contents, abstracts and full text articles programmatically. The interfaces will require the following information: + + o ISSN (either electronic or print) or Blackwell/Munksgaard Journal Code + + o Volume + + o Issue + + o Page or Article Title (only for abstract and full text) + + The interface will be similar to the following: + + http://servername/abstract?issn=1234-123456&volume=2&issue=3&page=5 + +- -------------------------------------------------------------------------------- Future Items - -------------------------------------------------------------------------------- + + This section contains a list of features, which HealthGate will deliver outside of the deadlines agreed upon in the contract. Some of these items may have additional charges due to licensing of software and content. + + In the future HealthGate will provide the following features: + + o Electronic forums at the Journal Level. + + o Links to pharmaceutics, company names, people, and software. + + o Method of linking terms to encyclopedias. + + o Delivery of equations in a format that Mathematica can use. + +- -------------------------------------------------------------------------------- BLACKWELL/MUNKSGAARD JOURNAL PUBLISHING 24 + +USER SCENARIOS FUTURE ITEMS - -------------------------------------------------------------------------------- + + o The system will provide the ability to check whether a user is concurrently logged on from multiple locations to prevent fraudulent use. + +[INITIALS ILLEGIBLE] [INITIALS ILLEGIBLE] 20.3.98 30.4.98 + +- -------------------------------------------------------------------------------- BLACKWELL/MUNKSGAARD JOURNAL PUBLISHING 25 + + SCHEDULE 2 + +Use Fees + +HealthGate will charge for Downloads of the material, as follows: + +Type of User Fee per Download Max. per User/Title/Year - ----------------------------------------------------------------------- Institution: $0.10 $20.00 Individual: $0.05 $10.00 Member: $0.01 $1.00 + +Download is defined as retrieval of a full-text article, there will be no charge for searching and browsing of tables of contents and abstracts. These usage charges will be billed on 1 January, 1 April, 1 July, 1 September and 31 December 1999, on payment terms of 60 days. \ No newline at end of file diff --git a/full_contract_txt/HEALTHGATEDATACORP_11_24_1999-EX-10.1-HOSTING AND MANAGEMENT AGREEMENT - Escrow Agreement.txt b/full_contract_txt/HEALTHGATEDATACORP_11_24_1999-EX-10.1-HOSTING AND MANAGEMENT AGREEMENT - Escrow Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..c577c6f5cb728f74d11526a2d96e25d585ec6fdb --- /dev/null +++ b/full_contract_txt/HEALTHGATEDATACORP_11_24_1999-EX-10.1-HOSTING AND MANAGEMENT AGREEMENT - Escrow Agreement.txt @@ -0,0 +1,511 @@ +[INITIALS ILLEGIBLE] [INITIALS ILLEGIBLE] 20.3.98 30.4.98 + + 5 + + SCHEDULE 3 + +Project Managers + +The Publishers: + +Project Manager - --------------- Ian Bannerman Blackwell Science Ltd Osney Mead Oxford OX2 0EL UK e-mail: ian.bannerman@blacksci.co.uk tel: +44 (0)1865 206101 + +Deputy Project Manager - ---------------------- Martin Clutterbuck Blackwell Science Ltd Osney Mead Oxford OX2 0EL UK e-mail: martin.clutterbuck@blacksci.co.uk tel: +44 (0)1865 206110 + +Deputy Project Manager - ---------------------- Anders Geertsen Munksgaard International Publishers Ltd 35 Norre Sogade, P.O. Box 2148 1016 Copenhagen K Denmark e-mail: ag@mail.munksgaard.dk tel: +45 77 33 31 03 + +HealthGate: + +Project Manager - --------------- Mark Israel HealthGate 380 Pleasant Street Suite 230 Malden MA 02148 USA tel: 781 321 6000 Ext 248 e-mail: misra@healthgate.com + +Deputy Project Manager - ---------------------- Rick Lawson HealthGate 380 Pleasant Street Suite 230 Malden MA 02148 USA tel: 781 321 6000 Ext 211 e-mail: lawson@healthgate.com + +[INITIALS ILLEGIBLE] [INITIALS ILLEGIBLE] 20.3.98 30.4.98 + + 6 + + SCHEDULE 4 + + 3 + +SCHEDULE 4 + +ESCROW AGREEMENT + +When the annexed escrow agreement is entered, the terms shall include those set out in the annexed letter from NCC Escrow International, the escrow agent, of 12 March 1998 by way of variation of NCC document STD001Y2K.UK. + +The Required Information at ii) shall be provided by the parties. The date of the Licence Agreement shall be the date of this agreement. The name of the + + + + + +package shall be "HealthGate Electronic Journal Proprietary Software". These words shall also appear in Schedule 1 of the escrow agreement. The parties shall provide the medium on which the source code shall be supplied, which in default of agreement shall be such medium as the escrow agent NCC Escrow International Limited thinks fit. + +The fees to be inserted in Schedule 4 of the Escrow Agreement shall be the then applicable fees of NCC Escrow International Limited. + +The Escrow Agreement shall be signed by HealthGate and Blackwell Science Limited. + +[INITIALS ILLEGIBLE] [INITIALS ILLEGIBLE] 20.3.98 30.4.98 + + NCC ESCROW INTERNATIONAL + +12 March 1998 National Computing Centre Oxford House, Oxford Road Manchester M1 7ED, UK + + Telephone: +44(O)161 228 6333 Facsimile: +44(0)161 242 2275 e-mail: escrow@ncc.co.uk + +Mr J S Saunders [NCC LOGO] Linnells, Solicitors Greyfriars Court Paradise Square Oxford OX1 1BB + +Dear Mr Saunders + +Proposed Escrow Agreement: Healthgate Data Corp / Blackwell Science Ltd / NCC + +I confirm that NCC is willing to enter into our standard form escrow agreement std001y2k.uk with the following amendments by reference to the appropriate clauses: + +(2) Add the words "and/or companies in the Blackwell Science Ltd group" after "Blackwell Science Ltd". + +6.1.6 A new clause: "there is a Change in Control of the Owner. For the purposes of this clause, a person shall have "Control" of a company if he holds, directly or indirectly, shares which together with shares held by any persons acting in concert with him carry 50% or more of the voting rights of that company, and "Change in Control" shall be interpreted accordingly. Words and phrases in the City Code on Take-overs and Mergers shall have the same meaning here." + +6.1.7 A new clause: "the Licensee exercises its option under clause 10.4.1 of the Licence Agreement". + +11.4 Replace with: "If the obligations in clause 31 of the Licence Agreement have terminated this Agreement will automatically terminate on the same date." + +Yours sincerely + +/s/ Carmel Gorman + +Carmel Gorman NCC Escrow International + +[INITIALS ILLEGIBLE] [INITIALS ILLEGIBLE] 20.3.98 30.4.98 + +[NCC Escrow International logo] + +This document is to be used where an Owner deposits source code on behalf of a single user only. + +PROCEDURE: + + The required information sheet on page ii should be completed, detached and returned by fax or post to NCC at the following address: + + Contracts Administrator NCC Escrow International Limited Oxford House, Oxford Road Manchester M1 7ED, England + + Telephone: +44 (0) 161 242 2109 Facsimile: +44 (0) 161 242 2275 E-mail: escrow@ncc.co.uk + +i. NCC will check the required information and will then send out signature copies of the Escrow Agreement, together with the relevant invoices. A reference number will be given in respect of that agreement which must be quoted in all correspondence. + +ESCROW 2000 + + + + + +ii. When the Owner and the Licensee have signed the Escrow Agreement all copies must be returned to NCC. + +iii. NCC will sign and date the Agreement and a signed copy will be sent to each party. + +iv. The Owner should then lodge the Material. + +NB: Until all parties sign the Escrow Agreement no binding escrow arrangements have been made. + + single licensee ---------- UK + +Version 1: August 1997 i + +FAO: P. FLEMING REQUIRED INFORMATION - -------------------------------------------------------------------------------- + +- -------------------------------------------------------------------------------- OWNER + +[-1] Company Name --------------------------------------------------------------- + +[-2] Registered Office ---------------------------------------------------------- + +- -------------------------------------------------------------------------------- + +Correspondence Address ---------------------------------------------------------- + +*[-3] Company Registration Number *VAT Number ------------------- ----------------- + +Telephone Number Fax Number ------------------------------------ ------------------ + +Contact Name Position in Company ------------------------------- ------------------ + +*only applicable to countries within the EU - -------------------------------------------------------------------------------- + +- -------------------------------------------------------------------------------- LICENSEE + +[-4] Company Name --------------------------------------------------------------- + +[-5] Registered Office ---------------------------------------------------------- + +- -------------------------------------------------------------------------------- + +Correspondence Address ---------------------------------------------------------- + +*[-6] Company Registration Number *VAT Number ------------------- ----------------- + +Telephone Number Fax Number ------------------------------------ ------------------ + +Contact Name Position in Company ------------------------------- ------------------ + +*only applicable to countries within the EU - -------------------------------------------------------------------------------- + +- -------------------------------------------------------------------------------- OTHER DETAILS + +[-7] Name of Package ------------------------------------------------------------ + +- -------------------------------------------------------------------------------- + +INSURANCE FEE (complete if appropriate) - -------------------------------------------------------------------------------- Standard NCC limitation of liability is St(pound)500,000 (no charge). + +There is a charge of St(pound)100 (annual fee) for each additional St(pound)500,000. + +Maximum liability is St(pound)5,000,000. + + + + + +Please indicate required liability -------------------------- + +- -------------------------------------------------------------------------------- + + ------------------------------------ FEES PAYABLE (tick as appropriate) Owner Licensee - -------------------------------------------------------------------------------- Initial Fee - -------------------------------------------------------------------------------- Annual Fee - -------------------------------------------------------------------------------- Update Fee (payable in the event of more than 4 updates per annum) - -------------------------------------------------------------------------------- Storage Fee (payable if the source code exceeds one cubic foot) - -------------------------------------------------------------------------------- Annual liability fee payable (if appropriate) - -------------------------------------------------------------------------------- Release Fee (plus NCC's reasonable expenses) X - -------------------------------------------------------------------------------- + +ii Version 1: August 1997 + +(C) NCC Escrow International Limited 1997 STD001Y2K.UK + +[NCC Escrow International logo] + + SINGLE LICENSEE (UK) ESCROW 2000 - -------------------------------------------------------------------------------- ESCROW AGREEMENT: DATED: + +Between: + +(1) [-1] whose registered office is at [-2] (CRN: [-3]) ("the Owner"); + +(2) [-4] whose registered office is at [-5] (CRN: [-6]) ("the Licensee"); and + +(3) NCC ESCROW INTERNATIONAL LIMITED whose registered office is at Oxford House, Oxford Road, Manchester M1 7ED, England (CRN:3081952) ("NCC"). + +Preliminary: + +(A) The Licensee has been granted a licence to use a software package comprising computer programs. + +(B) Certain technical information and documentation describing the software package are the confidential property of the Owner and are required for understanding, maintaining and correcting the software package. + +(C) The Owner acknowledges that in certain circumstances the Licensee may require possession of the technical information and documentation held under this Agreement. + +(D) Each of the parties to this Agreement acknowledges that the considerations for their respective undertakings given under it are the undertakings given under it by each of the other parties. + +It is agreed that: + +1 Definitions + + In this Agreement the following terms shall have the following meanings: + + 1.1 "Full Verification Service" means those bespoke tests agreed between the Licensee and NCC for the verification of the Material; + + 1.2 "Intellectual Property Rights" means copyright, trade secret, patent, and all other rights of a similar nature; + + 1.3 "Licence Agreement" means the licence granted to the Licensee for the Package; + + 1.4 "Material" means the source code of the Package comprising the latest technical information and documentation described in Schedules 1 and 2; + + 1.5 "Package" means the software package licensed to the Licensee under the Licence Agreement; and + + 1.6 "Standard Verification Service" means those tests detailed in the Standard Verification Service published by NCC from time to time. + +2 Owner's Duties and Warranties + + 2.1 The Owner shall: + + 2.1.1 deliver a copy of the Material to NCC within 30 days of the date of this Agreement; + + + + + + 2.1.2 at all times ensure that the Material as delivered to NCC is capable of being used to generate the latest version of the Package issued to the Licensee and shall deliver further copies of the Material as and when necessary; + + 2.1.3 deliver to NCC a replacement copy of the Material within 12 months of the last delivery; + + 2.1.4 deliver a replacement copy of the Material within 14 days of receipt of a notice served upon it by NCC under the provisions of Clause 4.1.5; and + + 2.1.5 deliver with each deposit of the Material the information detailed in Schedule 2. + + 2.2 The Owner warrants that: + + 2.2.1 it owns the Intellectual Property Rights in the Material and has authority to enter into this Agreement; and + + 2.2.2 the Material lodged under Clause 2.1 shall contain all information in human-readable form and on suitable media to enable a reasonably skilled programmer or analyst to understand, maintain and correct the Package without the assistance of any other person. + +3 Licensee's Responsibilities + + It shall be the responsibility of the Licensee to notify NCC of any change to the Package that necessitates a replacement deposit of the Material. + +Version 1: August 1997 1 of 6 + +4 NCC's Duties + + 4.1 NCC shall: + + 4.1.1 hold the Material in a safe and secure environment; + + 4.1.2 inform the Owner and the Licensee of the receipt of any copy of the Material; + + 4.1.3 in accordance with the terms of Clause 9 perform those tests that form part of its Standard Verification Service from time to time; + + 4.1.4 at all times retain a copy of the latest verified deposit of the Material; and + + 4.1.5 notify the Owner if it becomes aware at any time during the term of this Agreement that the copy of the Material held by it has been lost, damaged or destroyed. + + 4.2 NCC shall not be responsible for procuring the delivery of the Material in the event of failure by the Owner to do so. + +5 Payment + + NCC's fees are payable in accordance with Schedule 4. + +6 Release Events + + 6.1 Subject to the provisions of Clauses 6.2 and 6.3, NCC shall release the Material to a duly authorised officer of the Licensee if at any time or times any of the following events or circumstances occur, arise or become apparent: + + 6.1.1 the Owner enters into any composition or arrangement with its creditors or (being a company) enters into liquidation whether compulsory or voluntary (other than for the purposes of solvent reconstruction or amalgamation) or has a receiver or administrative receiver appointed over all or any part of its assets or undertaking or a petition is presented for an Administration Order or (being an individual or partnership) becomes bankrupt, or an event occurs within the jurisdiction of the country in which the Owner is situated which has a similar effect to any of the above events in the United Kingdom; or + + 6.1.2 the Owner ceases to trade; or + + 6.1.3 the Owner assigns copyright in the Material and the assignee fails within 60 days of such assignment to offer the Licensee substantially similar protection to that provided by this Agreement without significantly increasing the cost to the Licensee; or + + 6.1.4 the Owner without legal justification, has defaulted to a material degree in any obligation to provide maintenance or modification of the Package under the Licence Agreement or any maintenance agreement entered into in connection with the Package and has failed to remedy such default notified by the Licensee to the Owner; or + + + + + + 6.1.5 coding of the Package is such that either the accuracy or the functionality or the performance of the Package is or becomes or is demonstrably likely to become significantly adversely affected by the entry or processing of data incorporating any date or dates whether prior or subsequent to or including 31 December 1999, including but not limited to any of the following: + + 6.1.5.1 the Package crashes at any time while processing any such data; + + 6.1.5.2. the Owner has warranted or represented that the Package is capable of accurately and correctly processing such data in accordance with the Package's current functional specification and the Licensee demonstrates that the Package is not so capable; + + 6.1.5.3 the Owner has undertaken or attempted to procure the Package to be so capable and the Licensee demonstrates that the Package is still not so capable; + + 6.1.5.4 no such warranty, representation, undertaking or attempt has been given or made and the Licensee demonstrates that the Package is not so capable. + + 6.2 The Licensee must notify NCC of any event or circumstance of any of the kinds specified in Clause 6.1 by delivering to NCC a statutory or notarised declaration ("the Declaration") made by an officer of the Licensee attesting that such event has occurred and that the Licence Agreement was still valid and effective up to the occurrence of such event and exhibiting: + + 6.2.1 such documentation in support of the Declaration as NCC shall reasonably require; + + 6.2.2 a copy of the Licence Agreement; and + + 6.2.3 a signed confidentiality undertaking as detailed in Schedule 3 + + then NCC will release the Material to the Licensee upon receipt of the release fee stated in Schedule 4. + + 6.3 Upon receipt of a Declaration from the Licensee claiming a release event under Clause 6.1.4: + + 6.3.1 NCC shall send a copy of the Declaration to the Owner by registered post; and + + 6.3.2 unless within 14 days after the date of delivery the Owner delivers to NCC a counter-notice signed by a duly authorised officer of the Owner stating that no such failure has occurred or that any such failure has been rectified + + then NCC will release the Material to the Licensee upon receipt of the release fee stated in Schedule 4. + +2 of 6 Version 1: August 1997 + +(C) NCC Escrow International Limited 1997 STD001Y2K.UK + + 6.4 Where there is any dispute as to the occurrence of any of the events or circumstances set out in Clause 6.1.1 to 6.1.4, 6.2 or 6.3 or the fulfilment of any obligations detailed therein, such dispute will be referred at the request of either the Owner or the Licensee to the Managing Director for the time being of NCC for the appointment of an expert who shall give a decision on the matter within 14 days of the date of referral or as soon as practicable thereafter. The expert's decision shall be final and binding as between the Owner and the Licensee except in the case of manifest error. + + 6.5 Where there is any dispute as to the occurrence of any of the events or circumstances set out in Clause 6.1.5 or the fulfillment of any obligations referred to therein, such dispute will be referred to arbitration in accordance with Clause 12. + +7 Confidentiality + + 7.1 The Material shall remain the confidential property of the Owner and in the event that NCC provides a copy of the Material to the Licensee, the Licensee shall be permitted to use the Material only in accordance with a confidentiality undertaking in the form contained in Schedule 3. + + 7.2 NCC agrees to maintain all information and/or documentation coming into its possession or to its knowledge under this Agreement in strictest confidence and secrecy. NCC further agrees not to make use of such information and/or documentation other than for the purposes of this Agreement and will not disclose or release it other than in accordance with the terms of this Agreement. + + 7.3 Termination of this Agreement will not relieve NCC or its employees, or the Licensee or its employees, from the obligations of confidentiality contained in this Clause 7. + + + + + +8 Intellectual Property Rights + + The release of the Material to the Licensee will not act as an assignment of any Intellectual Property Rights that the Owner possesses in the Material. + +9 Verification + + 9.1 Subject to the provisions of Clauses 9.2 and 9.3, NCC shall bear no obligation or responsibility to any person, firm, company or entity whatsoever to determine the existence, relevance, completeness, accuracy, effectiveness or any other aspect of the Material. + + 9.2 Upon the Material being lodged with NCC, NCC shall perform those tests in accordance with its Standard Verification Service and shall provide a copy of the test report to the parties to this Agreement. + + 9.3 The Licensee shall be entitled to require that NCC carries out a Full Verification. Any reasonable charges and expenses incurred by NCC in carrying out a Full Verification will be paid by the Licensee save that if in the opinion of the expert appointed by the Managing Director of NCC the Material is substantially defective in content any such reasonable charges and expenses will be paid by the Owner. + +10 NCC's Liability + + 10.1 NCC shall not be liable for any loss caused to the Owner or the Licensee either jointly or severally except for loss of or damage to the Material to the extent that such loss or damage is caused by the negligent acts or omissions of NCC, its employees, agents or sub-contractors and in such event NCC's total liability in respect of all claims arising under or by virtue of this Agreement shall not (except in the case of claims for personal injury or death) exceed the sum of (pounds)500,000. + + 10.2 NCC shall in no circumstances be liable to the Owner or the Licensee for indirect or consequential loss of any nature whatsoever whether for loss of profit, loss of business or otherwise. + + 10.3 NCC shall be protected in acting upon any written request, waiver, consent, receipt or other document furnished to it pursuant to this Agreement, not only in assuming its due execution and the validity and effectiveness of its provisions but also as to the truth and acceptability of any information contained in it, which NCC in good faith believes to be genuine and what it purports to be. + +11 Termination + + 11.1 NCC may terminate this Agreement after failure by the Owner or the Licensee to comply with a 30 day written notice from NCC to pay any outstanding fee. If the failure to pay is on the part of the Owner the Licensee shall be given the option of paying such fee itself. Such amount will be recoverable by the Licensee direct from the Owner. + + 11.2 NCC may terminate this Agreement by giving 60 days written notice to the Owner and the Licensee. In that event the Owner and the Licensee shall appoint a mutually acceptable new custodian on terms similar to those contained in this Agreement. + + 11.3 If a new custodian is not appointed within 30 days of delivery of any notice issued by NCC in accordance with the provisions of Clause 11.2, the Owner or the Licensee shall be entitled to request the President for the time being of the British Computer Society to appoint a suitable new custodian upon such terms and conditions as he shall require. Such appointment shall be final and binding on all parties. + + 11.4 If the Licence Agreement has expired or has been lawfully terminated this Agreement will automatically terminate on the same date. + + 11.5 The Licensee may terminate this Agreement at any time by giving written notice to the Owner and NCC. + + 11.6 The Owner may only terminate this Agreement with the written consent of the Licensee. + +Version 1: August 1997 3 of 6 + +STD001Y2K.UK (C) NCC Escrow International Limited 1997 + + 11.7 This Agreement shall terminate upon release of the Material to the Licensee in accordance with Clause 6. + + 11.8 Upon termination under the provisions of Clauses 11.2, 11.4, 11.5 or 11.6 NCC will deliver the Material to the Owner. If NCC is unable to trace the Owner NCC will destroy the Material. + + 11.9 Upon termination under the provisions of Clause 11.1 the Material will be available for collection by the Owner from NCC for 30 days from the date of termination. After such 30 day period NCC will destroy the Material. + + 11.10 NCC may forthwith terminate this Agreement and destroy the Material + + + + + + if it is unable to trace the Owner having used all reasonable endeavours to do so. + +12 Arbitration + + 12.1 Any dispute arising under Clause 5.1.5 shall be referred to a panel of arbitrators ("the Panel") constituted as follows: + + 12.1.1 the Owner and the Licensee shall each appoint one member; and + + 12.1.2 the third member who shall act as chairman of the Panel shall be appointed by the President for the time being of the International Chamber of Commerce. + + 12.2 The Owner and the Licensee shall pay the fees and disbursements of its own member and half the fees and disbursements of the chairman of the Panel. + + 12.3 Should any member of the Panel die, become ill or incapacitated, resign or retire from his appointment, become disqualified from acting or otherwise cease to act as arbitrator before the dispute is resolved, he shall be replaced by a new member appointed by the party who appointed his predecessor. + + 12.4 Upon the appointment of such new member, the proceedings shall not be held de nova but shall continue from the stage at which the previous member ceased to act. + + 12.5 Proceedings under Clause 12 may be commenced by any party to a dispute by: + + 12.5.1 serving upon the other or others notice of its intention to refer such dispute to arbitration and nominating a member of the Panel; and + + 12.5.2 requesting the President of the International Chamber of Commerce for the time being to appoint a chairman of the Panel. + + 12.6 The Panel shall determine its own rules of procedure. + +13 General + + 13.1 This Agreement shall be governed by and construed in accordance with the laws of England and Wales. + + 13.2 This Agreement represents the whole agreement relating to the escrow arrangements between the parties for the Package and supersedes all prior arrangements, negotiations and undertakings. + + 13.3 All notices to be given to the parties under this Agreement shall be deemed to have been duly given or made when delivered personally or 7 days after posting of it sent by facsimile, 12 hours after despatch to the party to which such notice is required to be given or made under this Agreement addressed to the principal place of business, or for companies based in the UK, the registered office. + +SCHEDULE 1 + +The Material + +The source code of the Package known as [-7]. + +SCHEDULE 2 + +Material: Technical Information + +The Material shall be supplied with details of the following: + + 1 Details of the deposit: full name and version details, number of media items, media type and density, file or archive format, list or retrieval commands, archive hardware and operating system details. + + 2 Name and functionality of each module/application of the Material. + + 3 Names and versions of development tools etc. + + 4 Documentation describing the procedures for building / compiling / executing / using the software (technical notes, user guides). + + 5 Hardcopy directory listings of the contents of the media. + + 6 Name and contact details of employee(s) with knowledge of how to maintain and support the Material. + +SCHEDULE 3 + +Confidentiality Undertaking + +This undertaking is given on release of the Material pursuant to an Escrow Agreement dated [ ] between: + +(1) [-1] ("the Owner"); + +(2) [-4] ("the Licensee"); and + + + + + +(3) NCC ESCROW INTERNATIONAL LIMITED ("NCC"); + +1 Definitions contained in the Escrow Agreement will apply to this undertaking. + +4 of 6 Version 1: August 1997 + +2 In consideration of NCC delivering the Material to the Licensee, the Licensee undertakes with the Owner and NCC: + + 2.1 to use the Material only for the purpose of understanding, maintaining and correcting the Package exclusively on behalf of the Licensee; + + 2.2 not to use the Material for any other purpose nor disclose it to any person save such of its employees or contractors who need to know the same in order to understand, maintain and correct the Package exclusively on behalf of the Licensee. In that event such contractors shall enter into a Confidentiality Undertaking direct with NCC in similar terms to this Undertaking; + + 2.3 to hold all media containing the Material in a safe and secure environment when not in use; and + + 2.4 forthwith to destroy the same should the Licensee cease to be entitled to use the Package. + +SCHEDULE 4 + +NCC's Fees (St(pound)) + +- -------------------------------------------------------------------------------- DESCRIPTION FEE OWNER LICENSEE - -------------------------------------------------------------------------------- 1 Initial Fee (payable on completion of this Agreement) - -------------------------------------------------------------------------------- 2 Annual Fee (payable on completion of this Agreement and on each anniversary thereafter) - -------------------------------------------------------------------------------- 3 Update Fee (per update after the first 4 updates per annum) - -------------------------------------------------------------------------------- 4 Storage Fee (per annum, per cubic foot payable if the source code exceeds 1 cubic foot) - -------------------------------------------------------------------------------- 5 Liability Fee (per annum, (pound)100 per (pound)500,000 of liability exceeding (pound)500,000) - -------------------------------------------------------------------------------- 6 Release Fee (plus NCC's reasonable expenses) NIL 100% - -------------------------------------------------------------------------------- + + 1 All fees are subject to VAT where applicable* + + 2 All fees are reviewed by NCC from time to time + + * only applicable to countries within the EU. + +Signed on behalf of [-1] + +Name --------------------------------------:------------------------------------ Position: ----------------------------------: (Authorised Signatory) + +Signed on behalf of [-4] + +Name --------------------------------------:------------------------------------ Position: ----------------------------------: (Authorised Signatory) + +Signed on behalf of NCC ESCROW INTERNATIONAL LIMITED + +Name --------------------------------------:------------------------------------ Position: ----------------------------------: (Authorised Signatory) + +Version 1: August 1997 5 of 6 + +STD001Y2K.UK (C) NCC Escrow International Limited 1997 + +Any queries regarding this document should be directed to: + +Contracts Administrator NCC Escrow International Limited Oxford House + + + + + +Oxford Road Manchester M1 7ED England + +Telephone: +44 (0) 161 242 2109 Fax: +44 (0) 161 242 2275 E-mail: escrow@ncc.co.uk + +The following information is referenced within this agreement: + +[-1] Owner's Name [-2] Owner's Registered Office [-3] Owner's Company Registration Number* [-4] Licensee's Name [-5] Licensee's Registered Office [-6] Licensee's Company Registration Number* [-7] Name Of Package + +[INITIALS ILLEGIBLE] [INITIALS ILLEGIBLE] 20.3.98 30.4.98 \ No newline at end of file diff --git a/full_contract_txt/HEMISPHERX - Sales, Marketing, Distribution, and Supply Agreement.txt b/full_contract_txt/HEMISPHERX - Sales, Marketing, Distribution, and Supply Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..b9e4cb642cca384bc78dd5920390f19ad46602e8 --- /dev/null +++ b/full_contract_txt/HEMISPHERX - Sales, Marketing, Distribution, and Supply Agreement.txt @@ -0,0 +1,355 @@ +Exhibit 10.1 + + + +Sales, Marketing, Distribution, and Supply Agreement {***} WHEREAS HEMISPHERX is a biopharmaceutical company with headquarters at One Penn Center, 1617 JFK Boulevard, Suite 500, Philadelphia, PA 19103, U.S. ("HEMISPHERX") and Scientific Products Pharmaceutical Co. LTD is a pharmaceutical company with its primary offices located at Tahlia Street, P.O Box 10485, Riyadh 11433 Saudi Arabia (" SCIEN"), each a "Party" together, "Parties", and WHEREAS HEMISPHERX owns intellectual proprietary rights relating to Interferon alfa-n3 (human leukocyte derived), and WHEREAS HEMISPHERX desires to have Interferon alfa-n3 (human leukocyte derived) provided to physicians to treat genital warts and other infections and diseases, including MERS, in the GCC (Gulf Cooperation Council) states , as appropriate, prior to regulatory approval in such countries and to have Interferon alfa-n3 (human leukocyte derived) approved by the regulatory authorities in each GCC country (Kingdom of Saudi Arabia, Bahrain, Qatar, Kuwait, United Arab emirates (UAE) and Sultanate of Oman)), and WHEREAS SCIEN has sales, marketing, distribution capabilities in the GCC states, and WHEREAS, AFTER A SUCCESSFUL CLINICAL TRIAL IN MERS, SCIEN affirms it has the ability to supply Interferon alfa-n3 (human leukocyte derived) in the GCC States prior to regulatory approval and simultaneously seek to gain regulatory approval in each of the GCC States. After the clinical trial in MERS has been conducted, in the event it is successful and the Hemispherx manufacturing site requires approved by the GCC / SFDA, the cost of any post-clinical trial inspection of the facility to be the responsibility of Scien or the regulatory authority, and subsequently to market, sell and distribute Interferon alfa-n3 (human leukocyte derived) in the GCC, and WHEREAS, SCIEN desires to supply Interferon alfa-n3 (human leukocyte derived) under special approval from the Saudi Ministry of Health and for other GCC states where applicable, and WHEREAS, HEMISPHERX desires to supply and sell Interferon alfa-n3 (human leukocyte derived)) to SCIEN, and SCIEN is willing to purchase Interferon alfa-n3 (human leukocyte derived) from HEMISPHERX for the purposes described in this agreement. NOW THEREFORE, in consideration of the mutual covenants and agreements made herein, and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Parties agree as follows: I. DEFINITIONS "Affiliate" means any corporation or other business entity, which controls, is controlled by, or is under the common control of a Party. "End User" means a physician, medical facility or institution, or government agency that purchases Product with the intent of administering it to a patient. "Field" means refractory/recurrent genital warts, recombinant interferon refractory patients and patients with other infectious diseases, e.g., MERS, influenza, West Nile Virus, and cancer, etc. "HEMISPHERX Intellectual Property" means all HEMISPHERX patents, patent applications, know-how, and trademarks owned or controlled by HEMISPHERX up to the termination or expiration of this Agreement. "List Price" means ${***}/Product Unit. "Product" means an injectable formulation of clinical grade Interferon alfa-n3 (human leukocyte derived). + +{***} Confidential portions of this exhibit have been redacted and filed separately with the Commission pursuant to a confidential treatment request in accordance with Rule 24b-2 of the Securities Exchange Act of 1934, as amended. Page 1 of 28 + + + + + + + + "Product Data" means all data possessed by HEMISPHERX relating to the use of Interferon alfa-n3 (human leukocyte derived) to treat patients in the Field and which is needed to obtain regulatory approval in the Territory. "Product Unit" means 1 x1ml vial containing 5 million international units (I.U.) of Interferon alfa-n3 (human leukocyte derived) "Sales Price" means the price SCIEN and/or its Affiliates charge an End User for a Product Unit. "Territory" means the GCC States "Transfer Price" means a discounted price of ${***}/ Product Unit. II. LICENSE CONDITION PRECEDENT: THE GRANTING OF ANY AND ALL LICENSES OR PRIVILEGES HEREIN IS SUBJECT THE THE SUCCESSFUL COMPLETION OF A FIVE PERSON MINIMUM CLINICAL TRIAL IN THE KINGDOM OF SAUDI ARABIA TREATING EARLY ONSET PATIENTS INFECTED WITH MERS. A. Subject to the condition above, HEMISPHERX hereby grants SCIEN the exclusive license to sell, market, and distribute Product for use in the Field in the Territory for Direct Access/EAP and Regulatory Agency-Approved (RAA) purposes. B. SCIEN shall not use HEMISPHERX Intellectual Property nor sell nor permit the sale of any products that use the HEMISPHERX Intellectual Property outside the Territory or knowingly sell or have sold any products that use the HEMISPHERX Intellectual Property to any party in or outside the Territory for export or sale outside the Territory, without HEMISPHERX's prior written consent. C. SCIEN will have six 6) months after the date of this Agreement to Purchase at least 50 vials to be used by the MOH in treating patients with MERS. Scien will thereafter, based on the outcome of the initial treatment for MERS by the MOH trial, aggressively promote to all stakeholders in Saudi Arabia and the other GCC states("First Performance Milestone"). III. COMMERCIAL DEVELOPMENT A. HEMISPHERX has or will provide SCIEN: 1. As an Integral Part of this Agreement and in order for HEMISPHERX to ship Product to SCIEN, the letter with attachments (Exhibit 1) must be signed by an officer of SCIEN. A protocol is also provided (Exhibit 2). 2. All the appropriate information about Products that will assist with the education of physicians about the Product in the Territory. 3. Ongoing scientific and medical support. 4. Product Units in quantities sufficient for SCIEN's Direct Access/EAP and RAA commercial needs in the Territory, subject to availability from HEMISPHERX. + +{***} Confidential portions of this exhibit have been redacted and filed separately with the Commission pursuant to a confidential treatment request in accordance with Rule 24b-2 of the Securities Exchange Act of 1934, as amended. Page 2 of 28 + + + + + + + + B. SCIEN will: 1. Within 60 days after this Agreement becomes effective, prepare and provide a Business Plan, to be attached to this Agreement as Exhibit 3, to make aware and educate physicians and patients about Product both prior to and following approval of Product. 2. Assist in determining reimbursable End User pricing of Product and gain reimbursement for Product under Direct Access/EAP program and RAA sales of the Product in the Territory. 3. Assist physicians who desire to administer Product with the required paperwork under any Direct Access/EAP program. 4. Manage the logistics within the Territory from arrival to End User supply. 6. Assist HEMISPHERX to gain regulatory approval of Product in the Field in the Territory 7. Prepare and provide a 3-year post regulatory approval Sales, Marketing, and Distribution Plan including a 3-year minimum sale forecast and a committed-dollar field sales force, product manager and marketing budget to be agreed by both Parties and a non-binding 12 month Product forecast no later than six (6) months prior to the anticipated registration and subsequent launch date for each Product, also to be agreed by both parties, 8. Pay for all the above Sales Marketing and Distribution activities and related expenses. 9. Hold 3 months inventory of the forecasted sales once the product is registered. 10. If needed, assist in recruiting clinical trial sites and principal investigators in the Field in the Territory. 11. Provide HEMISPHERX a monthly written report of SCIEN's efforts and status thereof under this Agreement. IV. SUPPLY A. Subject to the terms and conditions of this Agreement, HEMISPHERX agrees to exclusively supply Product to SCIEN in the Territory with a minimum expiry of 6 months from the date of shipment. B. The price that SCIEN will pay for Product under this Agreement is the Transfer Price, CIF. Taxes, duties, and other expenses to be paid by SCIEN. C. SCIEN shall pay HEMISPHERX for each order of Product within 75 days after receipt of the goods except for the for first purchase order which will be for 50 vials of Interferon alfa-n3 (human leukocyte derived) ("First Order") and paid once the MOH approves the use for Interferon alfa-n3 (human leukocyte derived) on 5 MERS patients. All purchase orders are final. D. SCIEN will ensure all necessary QA testing / approval for use occurs in the Territory and that each Product is stored under the conditions stipulated in a Quality Agreement (QA) to be executed and appended to this Agreement as Exhibit 4. E. Forecasts, Orders, Payment, and Delivery. Direct Access/EAP Distribution Following the signing of this Agreement, SCIEN will start a full and comprehensive market analysis of the potential of each Product for Direct Access/ EAP distribution. This will be from a market potential and willingness to pay point of view and will be completed within 3 months of the signature of this Agreement. A forecast will then be provided for Product for Direct Access/ EAP distribution and this will be added as a supplement to the Business Plan (Exhibit 3). + +{***} Confidential portions of this exhibit have been redacted and filed separately with the Commission pursuant to a confidential treatment request in accordance with Rule 24b-2 of the Securities Exchange Act of 1934, as amended. Page 3 of 28 + + + + + + + + RAA Distribution Six (6) months prior to the estimated regulatory approval for commercial sale of Product in each country in the Territory: 1. SCIEN will provide HEMISPHERX a rolling 12-month forecast of the estimated sales of Product Units, the first 3 months of which will be firm and the second three (3) months of which cannot vary by more than 25% when these become the first three (3) months. This forecast will be updated at 3-month intervals thereafter. 2. In accordance with this forecast, SCIEN agrees to order Product from HEMISPHERX under this Agreement by submitting to HEMISPHERX written purchase orders specifying the quantity, packaging, delivery dates, and delivery location. 3. HEMISPHERX shall manufacture Product as described in the purchase order from SCIEN and HEMISPHERX shall make all shipments to the location specified on SCIEN's purchase order as follows: 4. Hemispherx shall pack, mark and ship Products in accordance with temperature thermometer specifications for the drug product. Hemispherx shall package Products so as to prevent damage or deterioration and shall comply with all applicable temperature and packaging laws. Unless otherwise stipulated, Products shall be packaged, marked, crated and otherwise prepared in accordance with HEMISPHERX's current packaging and crating practices, and good commercial practices. 5. SCIEN will prominently display on all Product that the Product is a product of HEMISPHERX and be so noted and on a visible surface thereof and/or on tags, labels, manuals, and other materials with which Product is sold, the fact that the Product is manufactured and supplied to SCIEN by HEMISPHERX for use and/or sale in the Territory shall be clearly displayed. F. If, for any reason, at any time, HEMISPHERX shall be unable, or should reasonably anticipate being unable to deliver any part or all of the ordered Product in accordance with the terms hereof or the accompanying purchase order, HEMISPHERX shall notify SCIEN of such inability at the earliest possible time (but no later than five (5) workings after HEMISPHERX becomes aware of this their inability to supply Product, whereupon HEMISPHERX and SCIEN will devise a plan to manage the situation. G. HEMISPHERX warrants that the Product (i) shall conform to the specifications set out in the SCIEN purchase order for Product and (ii) shall meet all, if any, reasonably applicable regulatory requirements in the Territory once Product is approved. In the Direct Access/ EAP setting, the Product that HEMISPHERX supplies must confirm with all manufacturing and regulatory requirements (including labelling) for the country in which said Product is intended to be sold. SCIEN's acceptance of the Product shall relieve HEMISPHERX from the obligations arising from this warranty H. SCIEN shall have the right to return and demand replacement of any Product which violates this warranty. I. HEMISPHERX and/or SCIEN shall have the right to cancel, without further obligation to the other party, one or more orders for Product(s) if HEMISPHERX's or SCIEN's business is interrupted because of an event of force majeure beyond the control of HEMISPHERX or SCIEN. J. HEMISPHERX shall permit SCIEN or its agent, at SCIENs' expense, to conduct periodic audits of HEMISPHERX's Quality System and Manufacturing records relating to HEMISPHERX's performance under this Agreement. The audits shall be conducted upon reasonable advance notice during regular business hours at HEMISPHERX's principal office and in such a manner as not to unduly interfere with HEMISPHERX's operations. + +{***} Confidential portions of this exhibit have been redacted and filed separately with the Commission pursuant to a confidential treatment request in accordance with Rule 24b-2 of the Securities Exchange Act of 1934, as amended. Page 4 of 28 + + + + + + + + K. SCIEN will provide HEMISPHERX with copies of Product specification sheets, Product inserts, user manuals, user bulletins, and user Product updates and any other customer materials such as brochures, educational materials, web pages or other electronic information relating to SCIEN's efforts to sell, market and distribute Product under this Agreement at least 10 (ten) days prior to the public release or use of such information. V. REPORTS AND PAYMENTS A. Within 30 days following the end of each calendar quarter after execution of the Agreement, SCIEN will provide HEMISPHERX with quarterly reports on the number of Product Units sold and the Sales Price during the preceding three months, key market place issues and successes, regulatory and reimbursement subjects and revisions to the sales and marketing plans. B. Product (s) will be considered sold by SCIEN on the date it is shipped or invoiced to an End User, whichever is earlier. All shipping, taxes, duties and other expenses in the Territory is the responsibility of SCIEN. C. Price Increase: Beginning on the second year anniversary of the signing of this Agreement ("Effective Date") and on each succeeding anniversary of the Effective Date during the term of this agreement and in consideration of a varies of economic factors such as for example, costs of labour, costs of material and costs the price paid by SCIEN for Product(s) shall be renegotiated. Any price increase will need to be justified by HEMISPHERX. Both parties shall, in good faith, attempt to agree upon a reasonable price increase. In the event agreement cannot be reached the Agreement shall terminate. D. All payments hereunder will be made by SCIEN in United States Dollars by wire transfer of immediately available funds to an account designated by HEMISPHERX. The following is wire transfer information: Domestic (U.S.): {***} + +International: {***} VI. TERM/TERMINATION A. The Term will be 3 years from Effective Date with an automatic 2 year term extensions unless otherwise advised by one of the Parties. B. Termination for breach will include: 1. Failure to purchase Product and distribute to End Users as called for in II D. 2. Failure of SCIEN achieving less than 50% achievement of the minimum Purchases as in III B.7. for two (2) consecutive years, 3. Insolvency, or the filing for protection under either Party's bankruptcy laws. Upon the filing of a petition in bankruptcy, insolvency or reorganization against or by either Party, or either Party becoming subject to a composition for creditors , whether by law or agreement, or either party going into receivership or otherwise becoming insolvent (such party hereinafter referred to as the "insolvent party"), this Agreement may be terminated by the other Party by giving written notice of termination to the insolvent Party, such termination immediately effective upon the giving of such notice of termination. + +{***} Confidential portions of this exhibit have been redacted and filed separately with the Commission pursuant to a confidential treatment request in accordance with Rule 24b-2 of the Securities Exchange Act of 1934, as amended. Page 5 of 28 + + + + + + + + C. Upon the occurrence of a breach or default as to any obligation hereunder by either Party and the failure of the breaching Party to cure (within thirty (30) days after receiving written notice thereof from the non-breaching Party) such breach or default, this Agreement may be terminated by the non- breaching Party by giving written notice of termination to the breaching Party, such termination being immediately effective upon the giving of such notice of termination. D. In the event this Agreement is terminated by either Party for any reason whatsoever, HEMISPHERX agrees to reasonable efforts to make Product available to SCIEN for a period of three (3) months after the termination date at the same Transfer Price and under the same terms of payment. E. In the event of termination of this Agreement, SCIEN will have the right to complete all contracts for the sale or disposition of Product) under which SCIEN is obligated on the date of termination, provided SCIEN pays the associated Transfer Price and provided all such sales or dispositions are completed within three (3) months after the date of termination. Thereafter, HEMISPHERX shall purchase from the SCIEN all remaining stock of Product that is of merchantable quality at the same price as was paid by SCIEN. VII. ASSIGNMENT Neither this Agreement nor any rights or obligations or licenses hereunder may be assigned, pledged, transferred or encumbered by either party without the express prior written approval of the other party, except that either HEMISPHERX or SCIEN may assign this Agreement to any successor by merger or sale of substantially all of its business or assets to which this Agreement pertains, without any such consent. Any assignment in violation hereof is void. VIII. AUTHORITY SCIEN and HEMISPHERX each warrant and represent that it has the full right and power to make the promises set forth in this Agreement and that there are no outstanding agreements, assignments, or encumbrances inconsistent with the provisions of this Agreement. IX. EXCEPT AS EXPRESSLY SET FORTH IN THIS SECTION IX, HEMISPHERX MAKES NO REPRESENTATIONS OR WARRANTIES OF ANY KIND, EITHER EXPRESSED OR IMPLIED, REGARDING THE DEVELOPMENT, VIABILITY, COMMERCIAL OR OTHER USEFULNESS OR SUCCESS OF PRODUCT) AND THAT NO WARRANTY OR REPRESENTATION THAT ANYTHING MADE, USED, SOLD OR OTHERWISE PRACTICED OR ANY SERVICE PROVIDED UNDER THIS AGREEMENT WILL NOT INFRINGE ANY PATENT, COPYRIGHT, TRADE SECRET, OR OTHER PROPRIETARY RIGHT, FOREIGN OR DOMESTIC, OF ANY THIRD PARTY AND MAKES NO WARRANTIES OR REPRESENTATIONS AS TO THE VALIDITY, ENFORCEABILITY OR SCOPE OF ANY HEMISPHERX INTELLECTUAL PROPERTY. X. INDEMNIFICATION AND WARRANTIES A. INDEMNIFICATION SCIEN and HEMISPHERX (each an "Indemnifying Party") shall indemnify, defend and hold harmless and the other Party's subsidiaries or affiliates, their agents, directors, officers, employees and assigns (the "Indemnified Parties") from and against all losses, liabilities, damages, demands and expenses (including reasonable attorneys' fees and expenses) arising out of, as a result of, or in connection with (i) the negligent actions of the Indemnifying Party, its employees or any third party acting on behalf of or under authority of the Indemnifying Party in the performance of this Agreement and/or (ii) the violation of any representation or warranty of Indemnifying Party in this Agreement. Each Party's obligations under this provision shall be subject to the other Party providing reasonable notice of any such claim. Each Party shall defend with competent counsel and pay all costs of defence, including attorneys' fees, and any and all damages and court costs awarded in respect to such claim, action or proceeding regarding the claim of infringement. The Indemnified Parties agree to permit the Indemnifying Party to defend, compromise, or settle any such claim, action or proceeding and further agree to provide all available information, and reasonable assistance to enable the other Indemnifying Party to do so. However, neither party will be liable under this indemnity for any losses, liabilities, damages, demands or expenses arising out of the gross negligence or wilful misconduct of the other party or any of its affiliates, agents, directors, officers, employees or assigns. Limitation of Liability. IN NO EVENT WILL EITHER PARTY BE LIABLE FOR ANY INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES RESULTING FROM THE LICENSE GRANTED PURSUANT TO THIS AGREEMENT OR THE USE OR COMMERCIAL DEVELOPMENT OF PRODUCT. + +{***} Confidential portions of this exhibit have been redacted and filed separately with the Commission pursuant to a confidential treatment request in accordance with Rule 24b-2 of the Securities Exchange Act of 1934, as amended. Page 6 of 28 + + + + + + + + B. WARRANTIES Subject as herein provided HEMISPHERX warrants to SCIEN that: · All Product(s) supplied hereunder will comply with the Dossier and with any specification agreed for them in the Quality Agreement; · It is not aware of any rights of any third party in the Territory which would or might render the sale of the Product, or the use of any of the Trademarks on or in relation to the Products, unlawful; · It is the owner or the permitted licensee of all Intellectual Property Rights and it is not aware of any claims of any third party in the Territory or worldwide related to the fact that the Products infringes any intellectual property of such third party. · Nothing in this Agreement shall exclude either party's liability for death or personal injury. Subject to the above WARRANTIES, HEMISPHERX shall indemnify and hold harmless SCIEN and its respective employees from any loss, damage or claim made by a third party in respect of (i) the death or personal injury arising from the manufacture or use of the Products in the Territory or (ii) infringement of third party intellectual property, if and to the extent such loss, damage or claim is caused by any act or omission of HEMISPHERX and is not attributable directly or indirectly to the breach of any of the material terms of this Agreement by SCIEN or by any wilful default or negligent act or omission of SCIEN, its employees or its agents. 1. The indemnity given by HEMISPHERX shall be subject to the following conditions: · No indemnity shall be claimed unless notice is given by SCIEN claiming the indemnity to HEMISPHERX together with details of the claim promptly on notice of such claim being received by the SCIEN; · No admissions of liability or compromise or offer of settlement of any claim shall be made by SCIEN without the prior written consent of HEMISPHERX; and · HEMISPHERX shall have full control over any claim, proceedings or settlement negotiations in respect of which it is providing the indemnity. Subject to clause X.B 1.), SCIEN shall defend and indemnify HEMISPHERX and its Affiliates and hold each of them harmless against all claims, demands, actions, losses, expenses, damages, liabilities, costs (including interest, penalties and reasonable attorneys' fees) and judgements suffered by each of them, which arise out of SCIEN's negligent or wilful acts or omissions or which otherwise arise out of SCIEN's breach of the Agreement. Survivability. The obligations set forth in this Section X. shall survive the termination of this Agreement for the legal periods of limitation provided by US law. + +{***} Confidential portions of this exhibit have been redacted and filed separately with the Commission pursuant to a confidential treatment request in accordance with Rule 24b-2 of the Securities Exchange Act of 1934, as amended. Page 7 of 28 + + + + + + + + XI. CONFIDENTIALITY A. SCIEN and HEMISPHERX agree to keep secret and confidential all confidential, proprietary or non-public information ("Confidential Information") of the other Party .This provision shall survive termination or expiration of this Agreement. B. Such Confidential Information will be kept confidential until 5 years after the expiration of termination of this Agreement. Notwithstanding the foregoing , Confidential Information of a Party shall not include information which the other Party can establish by written documentation was (a) to have been publicly known prior to disclosure of such information by the disclosing Party to the other Party, (b) to have become publicly known, without fault on the part of the other Party, subsequent to disclosure of such information by the disclosing Party to the other Party, (c) to have been received by the other Party at any time from a source , other than the disclosing Party, rightfully having possession of and the right to disclose such information, (d) to have been otherwise known by the other Party prior to disclosure of such information by the disclosing Party to the other Party, or (e) to have been independently developed by employees or agents of the other Party without access to or use of such information disclosed by the disclosing Party to the other Party. C. The confidentiality obligations contained in this section XI shall not apply to the extent that the receiving Party (the "Recipient") is required (a) to disclose information by law, order or regulation of a governmental agency or a court of competent jurisdiction , or (b) to disclose information to any governmental agency for purposes of obtaining approval to test or market a Product , provided in either case that the Recipient shall provide written notice thereof to the other Party and sufficient opportunity to object to any such disclosure or to request confidential treatment thereof. XII. PROSECUTION, INFRINGEMENT, AND DEFENSE OF HEMISPHERX INTELLECTUAL PROPERTY A. HEMISPHERX will be responsible for and shall control, at its expense, the preparation, filing, prosecution and maintenance of HEMISPHERX Intellectual Property. B. SCIEN will cooperate in all reasonable ways to establish and protect HEMISPHERX Intellectual Property in the Territory. C. HEMISPHERX, at its expense, will have the right to determine the appropriate course of action to enforce its HEMISPHERX Intellectual Property against infringement or otherwise abate the infringement thereof , to take (or refrain from taking) appropriate action to enforce its HEMISPHERX Intellectual Property, to control any litigation or other enforcement action and to enter into, or permit, the settlement of any such litigation or other enforcement action with respect to its Intellectual Property . D. Each Party shall promptly notify the other Party in writing if any claim, action, demand or other proceeding (a "Claim") is brought against or is threatened to be brought against such Party alleging that the sale of Product violates another party's intellectual property. E. SCIEN will promptly notify HEMISPHERX of any Third party SCIEN knows or believes may be infringing HEMISPHERX Intellectual Property and will, to the greatest extent reasonably possible, provide to HEMISPHERX any information SCIEN has in support of such belief. HEMISPHERX will have the right, but not the obligation, to use such information in an infringement action against such third Party. SCIEN agrees to cooperate with HEMISPHERX in any action for infringement of HEMISPHERX, and HEMISPHERX will reimburse SCIEN for all reasonable costs incurred by it in providing cooperation requested by HEMISPHERX. + +{***} Confidential portions of this exhibit have been redacted and filed separately with the Commission pursuant to a confidential treatment request in accordance with Rule 24b-2 of the Securities Exchange Act of 1934, as amended. Page 8 of 28 + + + + + + + + F. HEMISPHERX is and shall remain the sole legal and registered owner for any trademark or trade name of "Interferon alfa-n3 (human leukocyte derived)". The parties shall work together, upon commercial approval in the Territory to secure a trade name in the Territory. G. HEMISPHERX hereby grants to SCIEN and SCIEN hereby accepts the right, privilege and exclusive license to use of "Interferon alfa-n3 (human leukocyte derived)" solely in connection with the terms of the Sales, Marketing, Distribution and Supply Agreement of Product in the Territory for the Term of this Agreement. Should the Agreement expire or terminate, the right to use the trademark shall also terminate. SCIEN shall use "Interferon alfa-n3 (human leukocyte derived)" at all times for the sole purpose of marketing of Product for no other purpose. H. The terms of the intellectual property license hereby granted shall be effective upon the Effective Date of this Agreement and during the term of this Agreement, unless sooner terminated in accordance with the provisions of the Sales, Marketing, Distribution and Supply Agreement between the parties. 1. Good Will. SCIEN recognizes that there exists great value and good will associated with the Intellectual Property of Interferon alfa-n3 (human leukocyte derived)" 2. SCIEN agrees that it will not during the term of this Agreement, or thereafter, attack the title or any rights of HEMISPHERX in and to Interferon alfa-n3 (human leukocyte derived) or attack the validity of the license granted herein by HEMISPHERX and solely owned by HEMISPHERX. I. SCIEN agrees to assist HEMISPHERX to the extent necessary in the procurement of any protection or to protect any of HEMISPHERX's right to Interferon alfa-n3 (human leukocyte derived) and HEMISPHERX, if it so desires, may commence or prosecute any claims or suits in its own name or in the name of SCIEN or join SCIEN as a party thereto. SCIEN shall notify HEMISPHERX in writing of any infringements or imitations by others of "Interferon alfa-n3 (human leukocyte derived) which may come to SCIEN 's attention, and HEMISPHERX shall have the sole right to determine whether or not any action shall be taken on account of any such infringements or imitations. SCIEN shall not institute any suit or take any action on account of any such infringements or imitation without first obtaining the written consent of the HEMISPHERX so to do. J. SCIEN agrees to cooperate fully and in good faith with HEMISPHERX for the purpose of securing and preserving HEMISPHERX's rights. K. It is agreed that nothing contained in this Sales, Marketing, Distribution, and Supply Agreement shall be construed as an assignment or grant to the SCIEN of any rights, title or interest in or to "Interferon alfa-n3 (human leukocyte derived)". L. It is further understood that all rights relating thereto are reserved by HEMISPHERX, except for the license hereunder to SCIEN of the right to use and utilize the name Interferon alfa-n3 (human leukocyte derived) only as specifically and expressly provided in this Agreement. M. In the event of termination of this license for any reason, SCIEN shall within 6months (as described in the Termination clause), cease all use of the "Interferon alfa-n3 (human leukocyte derived)". SCIEN shall not thereafter use any names, mark or trade name similar thereto belonging to HEMISPHERX. Termination of the license under the provisions of this Agreement shall be without prejudice to any rights which HEMISPHERX may otherwise have against SCIEN. N. SCIEN shall, and shall cause its shareholders, officers, directors, and managing personnel to, comply with all laws, rules and government regulations pertaining to its business and shall not violate any laws which would create an adverse effect on "Interferon alfa-n3 (human leukocyte derived)" in the U.S. and/or the Territory. O. Relationship of Parties. SCIEN shall not in any manner or respect be the legal representative or agent of HEMISPHERX and shall not enter into or create any contracts, Agreements, or obligations on the part of HEMISPHERX, either expressed or implied, nor bind HEMISPHERX in any manner or respect whatsoever regarding its intellectual property; it being understood that this Agreement is only a contract for the licensed use of the product names in connection with the terms in this Agreement. + +{***} Confidential portions of this exhibit have been redacted and filed separately with the Commission pursuant to a confidential treatment request in accordance with Rule 24b-2 of the Securities Exchange Act of 1934, as amended. Page 9 of 28 + + + + + + + + XIII. BUYOUT HEMISPHERX will have the option at any time to buy out this Agreement. If exercised within the first two (2) years HEMISPHERX will pay SCIEN three (3) times the Product sales for the preceding 12 months. If exercised after year 3, HEMISPHERX will pay SCIEN two (2) times the Product sales for the preceding 12 months. XIV. MISCELLANEOUS. A. Notices. Notices sent pursuant to this Agreement are valid if in writing and addressed to the parties at the respective addresses given below or at such other addresses as either party shall notify the other in writing and sent by registered or certified mail, postage prepaid and return receipt requested, or by Federal Express or other comparable courier providing proof of delivery, and shall be deemed duly given and received (i) if mailed, on the third business day following the mailing thereof, or (ii) if sent by courier, the date of its receipt (or if not on a business day, the next succeeding business day). If to HEMISPHERX: Thomas K. Equels, President and CEO One Penn Center 1617 JFK Boulevard Suite 500 Philadelphia, PA 19103 United States If to SCIEN: Abdelrhman Mofeed Zhreldin Business Development Manager Scientific Products Pharmaceutical Co. Ltd Tahlia Street, P.O Box 10485, Riyadh 11433 Saudi Arabia B. This Agreement and the transactions contemplated herein shall be governed by, and construed in accordance with, the laws of the State of Delaware, USA and disputes, if not resolved by the Parties, will be settled by binding arbitration in and under the rules of arbitration in London, England. C. This Agreement constitutes the entire understanding of the parties with respect to the purchase and sale of Products and supersedes all prior discussions, agreements, and understandings between HEMISPHERX and SCIEN. D. Each party an independent contractor to the other and the relationship between the parties shall not be construed to be that of an employer and employee, or to constitute a partnership, joint venture, or agency of any kind. E. This Agreement may only be amended in a writing signed by both parties hereto. F. If any provision of this Agreement is declared invalid or unenforceable by a court having competent jurisdiction, it is mutually agreed that this Agreement shall endure except for the part declared invalid or unenforceable by order of such court. G. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. + +{***} Confidential portions of this exhibit have been redacted and filed separately with the Commission pursuant to a confidential treatment request in accordance with Rule 24b-2 of the Securities Exchange Act of 1934, as amended. Page 10 of 28 + + + + + + + + H. Prior to their release, the parties must agree on press releases or market communication that utilises the other Party's name. Counterparts; Integration; Effectiveness; Electronic Execution This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement constitutes the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. This Agreement shall become effective when it shall have been executed by all parties and upon receipt of all counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto. Delivery of an executed counterpart of a signature page of this Agreement by e- mail and/or telecopy shall be effective as delivery of a manually executed counterpart of this Agreement. The words "execution," "signed," "signature," and words of like shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper- based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, and any other similar State laws based on the Uniform Electronic Transactions Act. IN WITNESS WHEREOF, the parties have executed this Agreement as of the last date below and in so doing acknowledge that they have a corporate authority to bind their respective organizations to this Agreement. SCIENTIFIC PRODUCTS PHARMACEUTICAL CO. LTD: HEMISPHERX BIOPHARMA, INC: S/ Saleh Al-Abdullah Al-Rasheed S/ Thomas K. Equels Saleh Al-Abdullah Al-Rasheed Thomas K. Equels CEO & Owner President and CEO Date: Date: 3-29-2016 3-31-16 + +{***} Confidential portions of this exhibit have been redacted and filed separately with the Commission pursuant to a confidential treatment request in accordance with Rule 24b-2 of the Securities Exchange Act of 1934, as amended. Page 11 of 28 + + + + + + + + + + Exhibit 1 The drug, Interferon Alfa-n3, is intended for investigational use in the countries in which it is distributed prior to receipt of RAA; The drug, Interferon Alfa-n3, meets your specifications as reflected on the attached Certificate of Analysis; The drug, Interferon Alfa-n3, is not in conflict with the laws of the countries in which it is distributed; The investigation will be conducted in accordance with good clinical practices, including review and approval of the study by an independent ethics panel and informed consent of the study subjects; The drug, Interferon Alfa-n3, does not present an imminent hazard to public health, either in the United States, if the drug were to be reimported, or in the countries in which it is distributed; The drug, Interferon Alfa-n3, is labelled in accordance with the laws of the countries in which it is distributed. I have reviewed the attached labels and the current Certificate of Analysis against the specifications and agree with the above statements that these meet the laws of the countries in which the product will be distributed. Signature: __________________________________ Date: ______________________ Printed Name: Saleh Al- Rashid Title: Chairman and CEO Company: Scientific Products Pharmaceutical Co. LTD + +{***} Confidential portions of this exhibit have been redacted and filed separately with the Commission pursuant to a confidential treatment request in accordance with Rule 24b-2 of the Securities Exchange Act of 1934, as amended. Page 12 of 28 + + + + + + + + Certificate of Analysis {***} + +{***} Confidential portions of this exhibit have been redacted and filed separately with the Commission pursuant to a confidential treatment request in accordance with Rule 24b-2 of the Securities Exchange Act of 1934, as amended. Page 13 of 28 + + + + + + + + Label information enlarged for ease of read. {***} Enlarged Label: {***} Caution: Limited by Federal (US) Law to Investigational Use. Manufactured For: Hemispherx Biopharma, Inc. Philadelphia, PA 19103 (U.S.A.) Actual Label: {***} + +{***} Confidential portions of this exhibit have been redacted and filed separately with the Commission pursuant to a confidential treatment request in accordance with Rule 24b-2 of the Securities Exchange Act of 1934, as amended. Page 14 of 28 + + + + + + + + Exhibit 2 Study Protocol Synopsis A Compassionate Use Protocol Using Natural Leukocyte Interferon (Alfa-n3) for Individual Treatment of Symptomatic Patients with Middle East Respiratory Syndrome (MERS) {***} + +{***} Confidential portions of this exhibit have been redacted and filed separately with the Commission pursuant to a confidential treatment request in accordance with Rule 24b-2 of the Securities Exchange Act of 1934, as amended. Page 15 of 28 + + + + + + + + Exhibit 3 Business Plan + +{***} Confidential portions of this exhibit have been redacted and filed separately with the Commission pursuant to a confidential treatment request in accordance with Rule 24b-2 of the Securities Exchange Act of 1934, as amended. Page 16 of 28 + + + + + + + + Exhibit 4 TECHNICAL / QUALITY AGREEMENT 1. Parties This Quality Agreement is entered by and between Scientific Products Pharmaceutical Co. LTD., a pharmaceutical company with its primary offices located at Tahlia Street, P.O Box 10485, Riyadh 11433 Saudi Arabia ("SCIEN") and Hemispherx Biopharma, Inc. 783 Jersey Avenue, New Brunswick, New Jersey 08901(HEMISPHERX). 2. Purpose The purpose of this Quality Agreement is to clearly define the quality operating procedures, duties and responsibilities to be employed by SCIEN and HEMISPHERX in the conduct of activities by SCIEN for Hemispherx Biopharma, Inc. The objective of these procedures and this Quality Agreement is assurance that services are conducted in a timely, consistent and uniform manner and in accordance with current laws, directives, regulations and guidelines, as may be applicable to the specific project(s). These requirements may include those defined by the U.S. FDA's regulations At 21CFR314.80 (Post-marketing reporting of adverse drug experiences for drugs), 21CFR312.32 (IND safety reporting) 21CFR600.80 (Post marketing reporting of adverse experiences for biologics) 21CFR Parts 210 and 211 ("current Good Manufacturing Practices" or "cGMPs") with particular interest in 21CFR211.1.42 (Warehousing), 21CFR211.150 (Distribution), 21CFR211.204 (Returned drug) and 21CFR211.208 (Drug product salvaging), ICH Guidance for Industry: E6 Good Clinical Practice Consolidated Guidance and/or others that may be appropriate for the particular project. 3. Scope This Quality Agreement is to be applied to the activities performed by SCIEN, for HEMISPHERX as specifically defined by the Sales, Marketing, Distribution, and Supply Agreement January ___, 2016 ("Agreement") to which this Quality Agreement is an integral Exhibit. In the event of a conflict between the terms of the Agreement and this Quality Agreement, the terms of the Agreement shall control. Unless otherwise stated in these documents, SCIEN shall follow its Standard Operating Procedures ("SOPs") with respect to the activities it shall carry out in accordance with the Agreement. Copies of all relevant SOPs shall be provided to HEMISPHERX for review during audits. 4. Confidentiality The information and procedures contained in this Quality Agreement are confidential and subject to the terms and conditions of the confidentiality provisions as set forth in the Confidential Disclosure Agreement September 22, 2014 ("CDA") executed by HEMISPHERX and SCIEN. 5. Terms This Agreement between HEMISPHERX and SCIEN shall be in effect beginning the last date of execution set forth on the signature page to the Agreement (the "Effective Date") to which this Quality Agreement is Exhibit 2 and remain in effect until HEMISPHERX and SCIEN terminate the Agreement or it is superseded by a revised Quality Agreement executed by both parties. This Quality Agreement should be reviewed periodically by both parties for any needed updating, revisions, amendments, and the like. Regular periodic review of this Quality Agreement should be conducted to ensure it is up-to-date. + +{***} Confidential portions of this exhibit have been redacted and filed separately with the Commission pursuant to a confidential treatment request in accordance with Rule 24b-2 of the Securities Exchange Act of 1934, as amended. Page 17 of 28 + + + + + + + + HEMISPHERX may perform audits for initial qualification of SCIEN as well as periodic audits and "for cause" audits. At mutually agreed upon times, HEMISPHERX may review standard operating and other quality control procedures and records and the records of SCIEN relating to the Agreement. Such routine and general oversight review is to be requested at least twenty (20) business days in advance, limited to two (2) persons, completed within one (1) to two (2) business days and shall be offered to HEMISPHERX one (1) time each calendar year. SCIEN will make every reasonable effort to accommodate the special circumstances that may arise pursuant to "for cause" audits. The following applies to all audits: · Prior to an audit HEMISPHERX will communicate to SCIEN the scope of the audit. · HEMISPHERX will prepare a written report of the results of the audit and forward a copy to SCIEN. SCIEN will provide a written response to HEMISPHERX's written audit report within twenty (20) business days of receipt of such report setting forth the corrective actions to be taken by SCIEN, if any, and a timeline for such implementation. In the event of an inspection by any governmental or regulatory authority concerning the activities carried out under the Agreement, SCIEN shall notify HEMISPHERX promptly upon learning of such an inspection, shall supply HEMISPHERX with copies of any correspondence or portions of correspondence relating to HEMISPHERX's materials and shall inform HEMISPHERX of the general findings and outcomes of such inspections. SCIEN and HEMISPHERX shall cooperate with each other during any such inspection, investigation or other inquiry, including applying reasonable effort, as might be practical, at allowing, upon reasonable request, a representative of HEMISPHERX to be on site during such inspection, investigation or other inquiry, and providing copies of all documents related to the inspection. Each party acknowledges that it may not direct the manner in which the other party fulfills its obligations to permit inspection by governmental entities 6. Dispute Resolution If a dispute arises between the parties under this Agreement, the parties agree that, prior to either pursuing other available remedies, decision- making individuals from each party will promptly meet, either in person or by telephone, to attempt in good faith to negotiate a resolution of the dispute. If, within sixty days after such meeting, the parties are unable to resolve the dispute (or such longer time as the parties may agree) either party is free to pursue its legal remedies. 7. Definitions Adverse experience: Any adverse event associated with the use of a biological or drug product in humans, whether or not considered product related, including the following: an adverse event occurring in the course of the use of a biological or drug product in professional practice; an adverse event occurring from overdose of the product whether accidental or intentional; an adverse event occurring from abuse of the product; an adverse event occurring from withdrawal of the product; and any failure of expected pharmacological action. Disability: A substantial disruption of a person's ability to conduct normal life functions. Life-threatening adverse experience: Any adverse experience that places the patient, in the view of the initial reporter, at immediate risk of death from the adverse experience as it occurred, i.e., it does not include an adverse experience that, had it occurred in a more severe form, might have caused death. Labeled event: An adverse experience that is listed on the product insert as having been observed in patients who are receiving the drug product. + +{***} Confidential portions of this exhibit have been redacted and filed separately with the Commission pursuant to a confidential treatment request in accordance with Rule 24b-2 of the Securities Exchange Act of 1934, as amended. Page 18 of 28 + + + + + + + + Drug Product: A finished dosage form, for example, tablet, capsule, or solution that contains an active ingredient generally, but not necessarily, in association with inactive ingredients Serious adverse experience: Any adverse experience occurring at any dose that results in any of the following outcomes: Death, a life-threatening adverse experience, inpatient hospitalization or prolongation of existing hospitalization, a persistent or significant disability/incapacity, or a congenital anomaly/birth defect. Important medical events that may not result in death, be life-threatening, or require hospitalization may be considered a serious adverse experience when, based upon appropriate medical judgment, they may jeopardize the patient or subject and may require medical or surgical intervention to prevent one of the outcomes listed in this definition. Unexpected adverse experience: Any adverse experience that is not listed in the current labelling for the biological or drug product. This includes events that may be symptomatically and pathophysiologically related to an event listed in the labelling, but differ from the event because of greater severity or specificity. For example, under this definition, hepatic necrosis would be unexpected (by virtue of greater severity) if the labeling only referred to elevated hepatic enzymes or hepatitis. Similarly, cerebral thromboembolism and cerebral vasculitis would be unexpected (by virtue of greater specificity) if the labeling only listed cerebral vascular accidents. "Unexpected," as used in this definition, refers to an adverse experience that has not been previously observed (i.e., included in the labeling) rather than from the perspective of such experience not being anticipated from the pharmacological properties of the pharmaceutical product. Call report: A list of all questions, requests for circulars, and physician/patient complaints received by SCIEN's Clinical Support Department is prepared monthly by SCIEN staff and is forwarded to HEMISPHERX RA/QA Department. Audit: A systematic examination of processes, controls and systems, operating procedures, reports, records and/or data to assess SCIEN's compliance with standards, regulatory submissions, SOPs; applicable laws, regulations, directives, standards and guidelines; the terms of this Agreement and other contracts in place defining the services being provided and to verify data integrity. Good Clinical Practices ("GCPs"): Good clinical practice (GCP) is an international ethical and scientific quality standard for designing, conducting, recording, and reporting trials that involve the participation of human subjects. Compliance with this standard provides public assurance that the rights, safety, and wellbeing of trial subjects are protected, consistent with the principles that have their origin in the Declaration of Helsinki, and that the clinical trial data are credible. ICH Guidance for Industry: E6 Good Clinical Practice Consolidated Guidance. Good Manufacturing Practices ("GMPs"): The recognized pharmaceutical regulations and requirements of regulatory authorities such as those defined by the U.S. FDA's regulations at 21CFR Parts 210 and 211. Key Contacts: Persons at SCIEN and HEMISPHERX assigned to assure proper communication and follow-up in a timely manner within both parties' organizations. Names, titles and full contact information for Key Contacts shall be appended to this Agreement as Attachment 1 and should be maintained up-to-date during the course of the project. Observation: A statement of fact made during an audit that is substantiated by objective evidence. HEMISPHERX categorizes observations as follows: o Critical: May pose risk to patient or consumer or otherwise compromise the integrity or quality of the material, product, process, or service being provided. Other instances that could be defined as a critical observation include: A practice that poses an immediate safety risk to personnel; Quality System(s) missing or not in compliance with regulations, guidelines, or corporate policies. + +{***} Confidential portions of this exhibit have been redacted and filed separately with the Commission pursuant to a confidential treatment request in accordance with Rule 24b-2 of the Securities Exchange Act of 1934, as amended. Page 19 of 28 + + + + + + + + o Major: Does not fully comply with regulations, guidelines or corporate policies and may pose unnecessary risks to the integrity or quality of material, product, process or service being provided. Other instances that could be defined as a major observation include: Likely or probable safety risk to personnel; Quality System(s) weak or needing improvement; repeated Minor deficiencies of a similar nature that indicate a systemic problem and therefore may be classified as Major. o Minor: Does not comply with regulations, guidelines, or corporate policies but does not directly impact the integrity or quality of the material, product, process, or service being provided. o Comment: Compliant with regulations, guidelines and/or corporate policies; however, the auditor comment serves as a recommendation relative to maintaining or improving a specific condition noted. Out-of-Specification / Out-of-Trend ("OOS / "OOT"): A result that is not within the established specifications or trend, whether these are qualitative or quantitative. Standard Operating Procedures ("SOPs"): Procedures in effect at SCIEN that define the processes and controls by and under which activities are to be conducted to assure compliance with the appropriate Code of Federal Regulations. 7. Communications To assure proper communication, notification and follow-up in a timely manner by both parties, "Key" contacts are listed in Attachment 1 of this Agreement. Key contacts shall have access to project managers and technical staff and, upon reasonable notice and as required, facilitate resolution of any issues. Every effort will be made by SCIEN to accommodate timely communications, including face-to-face meetings, with HEMISPHERX. 8. Change of Control SCIEN will maintain and follow change control SOP(s) to ensure that changes to equipment, procedures, processes, etc. occur in a controlled manner and in compliance with requirements e defined by the U.S. FDA's regulations (see Section 2). The implementation of any change that may directly impact the integrity of the activities conducted or data being supplied for HEMISPHERX will require prior written approval of HEMISPHERX. SCIEN and HEMISPHERX will advise the appropriate organization's staff member (See Attachment 1) before implementation of a change, by either party, to equipment, procedures, specifications, processes, clinical protocols, product claims or facilities directly related to HEMISPHERX's specific products and processes. Each party agrees to review the proposed change in a timely manner and, at its discretion, may audit and/or request an alternative or additional change prior to the implementation of the proposed change. The respective party will review the proposed change, determine if it is reasonably practicable to implement the change and can suggest alternative or additional changes prior to the implementation of the proposed change. Change control requirements should be articulated within the specific operation's documentation practices. HEMISPHERX is responsible for assuring changes are in accordance with and/or reported to the investigational, marketing and/or any other filing with regulatory agencies (IND, IMPD, CTA, NDA, MA, etc.) and for informing SCIEN of any changes requested by regulatory agencies. SCIEN agrees to keep HEMISPHERX fully informed of any and all communications with regulatory agencies that may affect the services being provided to HEMISPHERX by SCIEN. This Agreement is not meant to supersede or replace controlled documents typically used to define and record the work to be conducted by SCIEN for HEMISPHERX. Specific requirements of this Agreement and/or any service contracts shall be articulated within SCIEN's current operating procedures and documentation systems. 9. Responsibilities SCIEN is responsible for: 1) case management support services to patients and maintain a 24-hour/365-day a year telephone service for assistance of prescription drug-related medical emergencies to patients 2) the distribution of product, including the shipping, handling and storage and all rules and regulations of every governmental authority having jurisdiction over the shipping, handling, storage, distribution, and dispensing of Product + +{***} Confidential portions of this exhibit have been redacted and filed separately with the Commission pursuant to a confidential treatment request in accordance with Rule 24b-2 of the Securities Exchange Act of 1934, as amended. Page 20 of 28 + + + + + + + + 3) confirming the product labelling requirements in the territory 4) conforming to all labeled specifications concerning the shipping, handling and storage of Product 5) notifying HEMISPHERX of any unacceptable storage or handling deviation within one (1) business day 6) inspecting all product shipments received by SCIEN from HEMISPHERX and reporting any damage, defect, loss in transit, or other shipping errors to HEMISPHERX within one (1) business days of receipt by SCIEN 7) administering recalls, field alerts, warning letters, quarantines or withdrawals in accordance with HEMISPHERX instructions (See Attachment 2) 8) administering HEMISPHERX's Returned Goods Policy (See Attachment 3) 9) immediately (within 24 hours of becoming aware of event) notifying HEMISPHERX of any serious and unexpected side effects (Adverse Experiences reported to SCIEN, as defined by 21CFR 314.80 and 21CFR 312.32)) 10) providing HEMISPHERX with written Adverse Experience Reports (at the latest day 4 after becoming aware of event) 11) notifying the Regulatory Authorities within the Territory of any reportable adverse experiences 12) notifying the Regulatory Authorities within the Territory of any suspected counterfeiting or tampering except as required different by law 13) obtaining program approval from appropriate regulatory agencies in the Territory 14) keeping HEMISPHERX fully informed of any and all communications with regulatory agencies that may affect the services being provided to HEMISPHERX by SCIEN 15) receiving and processing complaints 16) notifying HEMISPHERX of complaints and actions taken or to be taken to address the complaints 17) the performance of all services provided by SCIEN's subcontractors 18) communicating to HEMISPHERX any events of non-conformance that impact the quality of HEMISPHERX's product. Examples of non-conformances may include, but are not limited to: equipment failure, shipping error or documentation error, labeling error, improper storage, facilities system error, and unplanned study protocol deviations. When a non-conformance event occurs that is specific to HEMISPHERX's product, SCIEN will conduct an investigation and provide copies of all investigation documentation to HEMISPHERX for review and input 19) for initiating, monitoring and completing CAPA tasks related to discrepancies, errors and incidents involving services that are under SCIEN's control HEMISPHERX is responsible for: 1) release of product following review of all manufacturing and quality control testing requirements to confirm the batch has been manufactured according to approved processes and specifications 2) supply all necessary quality documentation with shipments to allow product importation and release 3) ensuring product intended for supply in territory is labelled accordingly 4) assuring changes to the established operations are in accordance with and/or reported to the investigational, marketing and/or any other filing with regulatory agencies (IND, IMPD, CTA, NDA, MA, etc.). 5) informing SCIEN of any changes requested by regulatory agencies 6) assist with/address any Agencies requests relating to manufacture of product 7) providing SCIEN any information that could result in a field alert or recall of a product under a HEMISPHERX NDA or ANDA immediately, but no more than one (1) business day after discovery. HEMISPHERX interprets FDA 21 CFR 314.81, "Other Post- Marketing Reports," to require a Field Alert Report to be made within three (3) days of an occurrence of an OOS result, whether that result is confirmed or not. The only exception to this would be where the original result was invalidated within the three (3) days. In that case, no field alert would be required 8) making the proper reports to the FDA regarding a field alert or recall + +{***} Confidential portions of this exhibit have been redacted and filed separately with the Commission pursuant to a confidential treatment request in accordance with Rule 24b-2 of the Securities Exchange Act of 1934, as amended. Page 21 of 28 + + + + + + + + 9) making the proper reports to the FDA regarding any serious and unexpected side effects 10) communicating to SCIEN any events of non-conformance that impact the quality of HEMISPHERX's product. Examples of non- conformances may include, but are not limited to: contamination, calculation or documentation error, labeling error. When a non- conformance event occurs HEMISPHERX will conduct an investigation and inform SCIEN of any appropriate action to be taken 11) for initiating, monitoring and completing CAPA tasks related to discrepancies, errors and incidents involving services that are under HEMISPHERX's control 12) contribute to customer complaint investigations where possible issues due to manufacturing process may have contributed to complaint HEMISPHERX and SCIEN are separately responsible for securing and maintaining all required licenses, permits and certificates applicable to their respective operations and each shall comply with any and all applicable federal, state and local laws, including but not limited to (i) the Federal Food Drug and Cosmetic Act; (ii) the Social Security Act; (iii) HIPAA; (iv) all federal and state health care anti-fraud and abuse laws, and (v) all state privacy, and consumer protection laws, including those relating to the use of medical and prescription information for commercial purposes. 10. Subcontractors SCIEN may enter into agreements between SCIEN and a subcontractor. SCIEN will identify the services performed by each such subcontractor. SCIEN is responsible for the performance of all services provided on behalf HEMISPHERX and the compliance of each subcontractor to the terms of this Agreement. HEMISPHERX will be permitted to conduct periodic audits of the subcontractors to assure compliance to applicable GMP's, GLP's and federal regulations (CFR's). 11. Standard Operating Procedures (SOP's) The following HEMISPHERX SOP's are relevant to this Quality Agreement and interactions between HEMISPHERX and SCIEN and affiliates. A. CLN-009 Handling Adverse Event Reports and Records B. RA-001 Post Marketing Adverse Experience Reporting C. QC-006 Investigation of Out of Specification Results 12. Laboratory Controls-N/A 13. Documentation and Record Maintenance SCIEN shall preserve all records in accordance with any applicable federal, state or local requirements. Raw data, documentation, batch records, source documents, product disposition records and reports (collectively, "Documentation") shall be retained by SCIEN for a minimum period of two (2) years after termination or expiration of the Specialty Distributor Purchase and Service Agreement between HEMISPHERX and SCIEN. SCIEN shall, upon written receipt of a written request from HEMISPHERX, finish such Documentation in a format reasonably acceptable to HEMISPHERX with thirty (30) days of receipt of such request. In this case, the Documentation will be shipped to the Quality Assurance Manager named in this Agreement (see Key Contact List, Attachment 1). It is the responsibility of HEMISPHERX to notify SCIEN of any changes in this contact. During the retention period, documentation shall be available for inspection by HEMISPHERX, its authorized agents and authorized government agencies. 14. Complaints In the event SCIEN is notified of a complaint, SCIEN will receive, investigate and respond to the complaint following its internal procedures. A copy of all complaint investigation documentation will be provided to HEMISPHERX. + +{***} Confidential portions of this exhibit have been redacted and filed separately with the Commission pursuant to a confidential treatment request in accordance with Rule 24b-2 of the Securities Exchange Act of 1934, as amended. Page 22 of 28 + + + + + + + + 15. Contact List of Key Personnel. See Attachment 1 IN WITNESS WHEREOF, the parties hereto have executed this Quality Agreement as of the Effective Date. Hemispherx Biopharma Inc. Quality Assurance Signature: _____________________________________________________ Printed Name: Victoria Scott Title: Associate Director Quality and Regulatory Date: _________________________________________________________________________ Management Signature: __________________________________________________________ Printed Name: Wayne Springate Title: Senior Vice President Operations Date: _________________________________________________________________________ SCIEN. Quality Assurance Signature: _____________________________________________________ Printed Name: _________________________________________________________________ Title: _________________________________________________________________________ Date: _________________________________________________________________________ Management Signature: ___________________________________________________________ Printed Name: Abdelrhman Mofeed Zhreldin Title: Business Development Manager Date: _________________________________________________________________________ + +{***} Confidential portions of this exhibit have been redacted and filed separately with the Commission pursuant to a confidential treatment request in accordance with Rule 24b-2 of the Securities Exchange Act of 1934, as amended. Page 23 of 28 + + + + + + + + + + Attachment 1 List of Key Contacts SUBJECT HEMISPHERX CONTACT SCIEN CONTACT Regulatory Compliance Requirements Notification of Regulatory Agencies and Regulatory Submissions + + Victoria Scott Associate Director/Quality and Regulatory Phone: 732-249-3250 Fax:732-249-6895 Email:Regulatory@Hemispherx.net + + + +Recall of Marketed Product Victoria Scott Associate Director/Quality and Regulatory Phone: 732-249-3250 Fax:732-249-6895 Email:Regulatory@Hemispherx.net + + + +Adverse Drug Events David Strayer, MD Medical Director Phone:215-988-0880 Fax: 215-988-1739 Email: SAE@Hemispherx.net + + + +Product Complaint Victoria Scott Associate Director/Quality and Regulatory Phone: 732-249-3250 Fax:732-249-6895 Email:Victoria.Scott@Hemispherx.net + + + +Field Alert Reports/Biological Product Deviation Reports Victoria Scott Associate Director/Quality and Regulatory Phone: 732-249-3250 Fax:732-249-6895 Email:Victoria.Scott@Hemispherx.net + + + +Change Control Victoria Scott Associate Director/Quality and Regulatory Phone: 732-249-3250 Fax:732-249-6895 Email:Victoria.Scott@Hemispherx.net + + + +Clinical Study Protocol Changes David Strayer, MD Medical Director Phone:215-988-0880 Fax: 215-988-1739 Email: David.Strayer@Hemispherx.net + + + +New or Revised Product Claims David Strayer, MD Medical Director Phone:215-988-0880 Fax: 215-988-1739 Email: David.Strayer@Hemispherx.net + + + +Documentation Quality Records Record Retention + + Victoria Scott Associate Director/Quality and Regulatory Phone: 732-249-3250 Fax:732-249-6895 Email:Victoria.Scott@Hemispherx.net + + + + + +{***} Confidential portions of this exhibit have been redacted and filed separately with the Commission pursuant to a confidential treatment request in accordance with Rule 24b-2 of the Securities Exchange Act of 1934, as amended. Page 24 of 28 + + + + + + + + SUBJECT HEMISPHERX CONTACT Product Testing and Release Victoria Scott Associate Director/Quality and Regulatory Phone: 732-249-3250 Fax:732-249-6895 Email:Victoria.Scott@Hemispherx.net + + + +Control of Components, Labelling and Packaging Materials + + Chris Cavalli VP Quality and Process Development Phone: 732-249-3250 Email:Chris.Cavalli@Hemispherx.net Fax:732-249-6895 + + + +Product Storage and Shipping Victoria Scott Associate Director/Quality and Regulatory Phone: 732-249-3250 Fax:732-249-6895 Email:Victoria.Scott@Hemispherx.net + + + +Returned Goods Victoria Scott Associate Director/Quality and Regulatory Phone: 732-249-3250 Fax:732-249-6895 Email:Victoria.Scott@Hemispherx. + + + +Deviations/Investigations Nonconforming or Rejected Material + + Victoria Scott Associate Director/Quality and Regulatory Phone: 732-249-3250 Fax:732-249-6895 Email:Victoria.Scott@Hemispherx.net + + + +Supplier Qualification Victoria Scott Associate Director/Quality and Regulatory Phone: 732-249-3250 Fax:732-249-6895 Email:Victoria.Scott@Hemispherx.net + + + +Quality Audits & Regulatory Inspections Victoria Scott Associate Director/Quality and Regulatory Phone: 732-249-3250 Fax:732-249-6895 Email:Victoria.Scott@Hemispherx.net + + + + + +{***} Confidential portions of this exhibit have been redacted and filed separately with the Commission pursuant to a confidential treatment request in accordance with Rule 24b-2 of the Securities Exchange Act of 1934, as amended. Page 25 of 28 + + + + + + + + Attachment 2 QA-007-Product Recall + +{***} Confidential portions of this exhibit have been redacted and filed separately with the Commission pursuant to a confidential treatment request in accordance with Rule 24b-2 of the Securities Exchange Act of 1934, as amended. Page 26 of 28 + + + + + + + + Attachment 3 HEMISPHERX Return Goods Policy This Return Goods Policy us for all HEMISPHERX product, Interferon alfa-n3 (human leukocyte derived) distributed by SCIEN. The following products are eligible for return and reimbursement: · Outdated Product: Product within two (2) months prior or six (6) months past expiration date and noted on product; AND · Product in its original container and bearing its original label. OR · Product which HEMISPHERX has specified be returned The following products are not eligible for return and reimbursement: · Product that is not outdated. · Product in which the lot number and/or expiration date is missing, illegible, covered, and/or unreadable on original container. · Product that has been damaged due to improper storage handling, fire, flood, or catastrophe. · Product that has been sold expressly on a non-returnable basis. · Product that is not in its original container and/or not bearing its original label. · Product that is in its original container with a prescription label attached. · Product that has been repackaged · Partial Vials · Product obtained illegally or via diverted means · Product purchased on the "secondary source" market or from a distributor other than SCIEN. · Product that HEMISPHERX determines, in its sole discretion, is otherwise adulterated, misbranded, or counterfeit. HEMISPHERX will only accept returns shipped to SCIEN. All eligible products shall be shipped in a safe, secure, and reliable manner, and in compliance with all applicable federal, state and local laws, regulations and statutes. It is the shipper's responsibility to securely package all return goods to prevent to prevent breakage during transit and otherwise comply with the laws and regulations applicable to the packaging, shipping, and transport of return goods shipments. HEMISPHERX is not responsible for shipments lost and/or damaged in transit. HEMISPHERX recommends that all customers insure return goods shipments. HEMISPHERX will audit the quantities of return goods and final reimbursement will be based on HEMISPHERX count. All products will be reimbursed based on the price paid direct purchasing customers reimbursement will be issued in the form of credit or product replacement to the appropriate party. + +{***} Confidential portions of this exhibit have been redacted and filed separately with the Commission pursuant to a confidential treatment request in accordance with Rule 24b-2 of the Securities Exchange Act of 1934, as amended. Page 27 of 28 + + + + + + + + To assist in accurate credit memo processing, please include the following information: 1. Purchasers Name and Mailing Address 2. Date and Quantity Return goods shipments which are deemed to be outside of this policy will not be returned to the customer or the third party processor and no reimbursement will be issued by HEMISPHERX. HEMISPHERX return goods policy is subject to change at any time and without prior notices to other parties. + +{***} Confidential portions of this exhibit have been redacted and filed separately with the Commission pursuant to a confidential treatment request in accordance with Rule 24b-2 of the Securities Exchange Act of 1934, as amended. Page 28 of 28 \ No newline at end of file diff --git a/full_contract_txt/HERTZGLOBALHOLDINGS,INC_07_07_2016-EX-10.4-INTELLECTUAL PROPERTY AGREEMENT.txt b/full_contract_txt/HERTZGLOBALHOLDINGS,INC_07_07_2016-EX-10.4-INTELLECTUAL PROPERTY AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..50e7cee5cb49c97990417e847f03b1c579d9b6cf --- /dev/null +++ b/full_contract_txt/HERTZGLOBALHOLDINGS,INC_07_07_2016-EX-10.4-INTELLECTUAL PROPERTY AGREEMENT.txt @@ -0,0 +1,93 @@ +Exhibit 10.4 INTELLECTUAL PROPERTY AGREEMENT This INTELLECTUAL PROPERTY AGREEMENT (this "Agreement" or "IPA"), effective as of this 30 day of June 2016 (the "Effective Date") among THE HERTZ CORPORATION, a Delaware corporation, with an address of 8501 Williams Road, Estero, Florida 33928 (hereinafter "THC"); HERTZ SYSTEM, INC., a Delaware corporation, with an address of 8501 Williams Road, Estero, Florida 33928, United States of America (hereinafter "HSI") and HERC RENTALS INC., a Delaware corporation, with an address of 27500 Riverview Center Blvd., Bonita Springs, Florida 34134, United States of America (hereinafter "HERC") (hereinafter referred to collectively as the "Parties" and individually as a "Party"). WITNESSETH WHEREAS, both HSI and HERC are wholly-owned subsidiaries of THC, and THC is an indirect wholly-owned subsidiary of Hertz Global Holdings, Inc., a Delaware corporation ("HGH"); WHEREAS, THC is the owner of a unique plan or system (hereinafter the "Hertz System") for conducting, inter alia, the business of renting and leasing vehicles with and without drivers (hereinafter the "Vehicle Rental Business" or "VRB") which it conducts in collaboration with HSI which is the owner of all trademarks for HERTZ and HERTZ-formative trademarks and designs and other trademarks and designs worldwide in connection with the Vehicle Rental Business (the "VRB Trademarks") and Other Intellectual Property (as defined herein); WHEREAS, THC is the owner of a unique plan or system for conducting an equipment rental business (hereinafter the "Equipment Rental Business" or "ERB" as further defined below) which it conducts through HERC; WHEREAS, HGH has approved plans to separate the Vehicle Rental Business and the Equipment Rental Business into two independent, publicly traded companies (the "Separation") pursuant to, among other agreements, the Separation and Distribution Agreement by and between Hertz Rental Car Holding Company, Inc. (to be renamed "Hertz Global Holdings, Inc." in connection with the Separation, "New Hertz") and HGH (to be renamed Herc Holdings Inc. in connection with the Separation) dated as of June 30, 2016 (the "Distribution Agreement"); WHEREAS, as a result of the Separation, THC and HSI will become indirect wholly-owned subsidiaries of New Hertz, and HERC will continue to be an indirect wholly-owned subsidiary of HGH; WHEREAS, THC exercises control with respect to the use, registration and enforcement of all of its company trademarks through its subsidiary HSI. HERC uses certain HERTZ or HERTZ-formative trademarks in connection with the ERB with the + +th + + + + + + permission of HSI and THC; WHEREAS, HSI is the owner of certain foreign HERTZ and HERTZ-formative and other trademarks and logos (the "HSI (HERTZ) Foreign ERB Trademarks") used or to be used by HERC with the permission of HSI in connection with the Equipment Rental Business, including the trademark applications and registrations therefor as more fully set forth on Schedule A; WHEREAS, HSI is the owner of certain United States HERTZ and HERTZ-formative and other trademarks and logos (the "HSI (HERTZ) US ERB Trademarks") used by HERC with the permission of HSI in connection with the Equipment Rental Business, including the trademark applications and registrations therefor as more fully set forth on Schedule B; WHEREAS, HSI is the owner of certain foreign HERC trademarks and logos (the "HSI HERC Foreign ERB Trademarks") used by HERC with the permission of HSI in connection with the Equipment Rental Business, including the trademark applications and registrations therefor, as more fully set forth on Schedule C; WHEREAS, HERC is the owner of certain US HERTZ-formative trademarks (the "HERC (HERTZ) US ERB Trademarks") used by HERC with the permission of HSI in connection with the Equipment Rental Business, including the trademark applications and registrations therefore as more fully set forth on Schedule D; WHEREAS, HERC is the owner of certain US trademarks not derived from the HERTZ trademark (the "HERC (HERC) US ERB Trademarks") that have been used by HERC with the permission of HSI in connection with the Equipment Rental Business and, in the case of the trademarks HERC RENTALS and HERCRENTALS Logo will be used by Herc in connection with the Equipment Rental Business, including the trademark applications and registrations therefor as more fully set forth on Schedule E; WHEREAS, HERC is the owner of certain foreign trademarks not derived from the HERTZ trademark (the "HERC (HERC) Foreign ERB Trademarks") that have been used by HERC with the permission of HSI in connection with the Equipment Rental Business and, in the case of the trademarks HERC RENTALS and HERCRENTALS Logo will be used by Herc in connection with the Equipment Rental Business, including the trademark applications and registrations therefore as more fully set forth on Schedule F. WHEREAS, THC is the owner of certain HERTZ and HERTZ-formative domain names (the "THC (HERTZ) ERB Domains") used by HERC with the permission of THC related to the Equipment Rental Business, as more fully set forth on Schedule G; WHEREAS, THC is the owner of certain non-HERTZ-formative domain names (the "THC ERB Domains") used by HERC with the permission of THC related to the Equipment Rental Business, as more fully set forth on Schedule H; 2 + + + + + + WHEREAS, as a result of the Separation, the Parties wish to differentiate and distinguish the future ownership, license and use of the relevant HERTZ, HERTZ-formative, HERC and other trademark rights and logos on a worldwide basis related to the Vehicle Renting Business which is to remain with HSI and the Equipment Rental Business to remain with HERC and the Parties have agreed upon a plan going forward with respect to the ownership, license and use of the HSI (HERTZ) Foreign ERB Trademarks, the HSI (HERTZ) US ERB Trademarks, the HSI HERC Foreign ERB Trademarks, the HERC (HERTZ) US ERB Trademarks, the HERC (HERC) US ERB Trademarks, the THC (HERTZ) ERB Domains and the THC ERB Domains; and NOW, THEREFORE, for good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto agree as follows: 1. Definitions 1.1 The "Equipment Rental Business" or "ERB" has the meaning given to such term in the Distribution Agreement. 1.2 "Interim Period" means a period of four (4) years commencing from the Effective Date of this Agreement. 1.3 "Other Intellectual Property" means any copyrights, trade dress, content, designs or other indicia and/or social media accounts and handles owned by THC and/or HSI that are already used or otherwise in the possession of HERC relating to the HERTZ and HERTZ-formative trademarks and logos in connection with the Equipment Rental Business. 2. Terms of Transfer, License and Use 2.1. HSI will retain ownership of the worldwide rights in and to the VRB Trademarks. 2.2 In the case of the HSI (HERTZ) Foreign ERB Trademarks: 2.2.1 HSI will retain ownership and will grant a royalty-free, non-exclusive license to HERC to use the HSI (HERTZ) Foreign ERB Trademarks (those foreign trademarks owned by HSI related to the ERB that incorporate the mark/name HERTZ) as set forth on Schedule A, for the Interim Period, outside the United States and Puerto Rico, as more fully set forth in the Trademark, Trade Name, Domain and Related Rights License Agreement attached as Exhibit A. HERC shall immediately discontinue use of the HSI (HERTZ) Foreign ERB Trademarks upon expiration of the Interim Period, or the earlier termination of this Agreement or the Trademark, Trade Name, Domain and Related Rights License Agreement. 2.3 In the case of the HSI (HERTZ) US ERB Trademarks: 2.3.1 HSI will retain ownership and will grant a royalty-free, non-exclusive, license to HERC to use the HSI (HERTZ) US ERB Trademarks (those US trademarks 3 + + + + + + owned by HSI related to the ERB that incorporate the mark/name HERTZ) as set forth on Schedule B, for the Interim Period, in the United States and Puerto Rico, as more fully set forth in the Trademark, Trade Name, Domain and Related Rights License Agreement attached as Exhibit A. HERC shall immediately discontinue use of the HSI (HERTZ) US ERB Trademarks upon expiration of the Interim Period, or the earlier termination of this Agreement or the Trademark, Trade Name, Domain and Related Rights License Agreement. 2.4 In the case of the HSI HERC Foreign ERB Trademarks: 2.4.1 HSI will assign all right, title and interest in and to the HSI HERC Foreign ERB Trademarks (those foreign trademarks owned by HSI related to the ERB for the HERC trademarks) as set forth on Schedule C to HERC as more fully set forth in the Trademark Assignment Agreements attached hereto as Exhibit B-1 (Canada) and Exhibit B-2 (all other foreign countries). 2.5 In the case of the HERC (HERTZ) US ERB Trademarks owned by HERC: 2.5.1 HERC will have the right to retain ownership and use of the HERC (HERTZ) US ERB Trademarks (those US trademarks owned by HERC related to the ERB that incorporate the mark/name HERTZ) as set forth on Schedule D for the Interim Period. HERC shall immediately discontinue use of the HERC (HERTZ) US ERB Trademarks and abandon or voluntarily withdraw or cancel any applications or registrations therefor upon expiration of the Interim Period as more fully set forth in the Coexistence Agreement attached hereto as Exhibit C and/or the earlier termination of this Agreement or the Trademark, Trade Name, Domain and Related Rights License Agreement. The Parties shall cooperate to ensure that no confusion arises in the marketplace during the Interim Period, as more fully set forth in the Coexistence Agreement. 2.6 In the case of the HERC (HERC) US ERB Trademarks owned by HERC: 2.6.1 HERC shall retain ownership and the right to use the HERC (HERC) US ERB Trademarks (those US trademarks owned by HERC related to the ERB that do not incorporate the mark/name HERTZ) as set forth on Schedule E. 2.7 In the case of the HERC (HERC) Foreign ERB Trademarks owned by HERC: 2.7.1 HERC shall retain ownership and the right to use the HERC (HERC) Foreign ERB Trademarks (those foreign trademarks owned by HERC related to the ERB that do not incorporate the mark/name HERTZ) as set forth on Schedule F. 2.8. In the case of the THC (HERTZ) ERB Domains owned by THC: 2.8.1 THC will retain ownership and will, subject to compliance with the terms of this Agreement, grant a royalty-free, non-exclusive license to HERC to use the THC (HERTZ) ERB Domains (those domains owned by THC related to the ERB that 4 + + + + + + incorporate the mark/name HERTZ) as set forth on Schedule G, for the Interim Period, as more fully set forth in the Trademark, Trade Name, Domain and Related Rights License Agreement. HERC shall immediately discontinue use of the THC (HERTZ) ERB Domains upon the expiration of the Interim Period or the earlier termination of this Agreement or the Trademark, Trade Name, Domain and Related Rights License Agreement. HERC shall make certain that no THC (HERTZ) ERB Domains resolve to a website upon the expiration of the Interim Period or the earlier termination of this Agreement or the Trademark, Trade Name, Domain and Related Rights License Agreement. 2.9 In the case of the THC ERB Domains owned by THC: 2.9.1 THC will assign all right, title and interest in and to the THC ERB Domains (those domains owned by THC related to the ERB that do not incorporate the mark/name HERTZ) as set forth on Schedule H to HERC and as more fully set forth in the Domain Name Assignment attached hereto as Exhibit D. 2.10 In the case of the use of the mark/name HERTZ in the company name Hertz Equipment Rental Corporation (HERC): 2.10.1 HSI will, subject to compliance with the terms of this Agreement, grant a royalty-free, non-exclusive worldwide license to HERC to use the mark/name HERTZ as part of company names for the Interim Period, as more fully set forth in the Trademark, Trade Name, Domain and Related Rights License Agreement attached as Exhibit A. Notwithstanding anything to the contrary herein, HERC shall immediately discontinue use of the mark/name as part of its company name upon expiration of the Interim Period or the earlier termination of this Agreement or the Trademark, Trade Name, Domain and Related Rights License Agreement. HERC shall take all steps to change the company name so as to not to include the mark/name HERTZ by the expiration of the Interim Period. 2.11 In the case of the Other Intellectual Property: 2.11.1 THC and/or HSI will retain ownership and will grant a royalty-free, non-exclusive license to HERC to use such Other Intellectual Property for the Interim Period, as more fully set forth in the Trademark, Trade Name, Domain and Related Rights License Agreement attached as Exhibit A. HERC shall immediately discontinue use of the Other Intellectual Property upon expiration of the Interim Period, or the earlier termination of this Agreement or the Trademark, Trade Name, Domain and Related Rights License Agreement. 2.12 With respect to the Parties' use of the HERTZ and HERC trademarks worldwide: 2.12.1 With respect to HSI's worldwide use of the VRB Trademarks incorporating the name/mark HERTZ and HERTZ-formative trademarks and designs and HERC's use of the HERC trademarks (including HERC, HERC360 and other HERC-formative 5 + + + + + + trademarks and designs) in connection with the ERB, the Parties shall cooperate to ensure that no confusion arises in the worldwide marketplace, as more fully set forth in the Coexistence Agreement attached hereto as Exhibit C. 2.13 Nothing in this Agreement or the other ancillary agreements thereto shall affect or limit the rights confirmed in the license effective April 1, 1998 between HSI and HERC, and the sublicense effective April 1, 1998 between HERC as Sub-Licensor and Matthews Equipment Limited and Hertz Canada Equipment Rental Partnership as Sub-Licensees, which remain in full force and effect, save and except that such license and sublicense shall not expire before the later of the expiration of the Interim Period or the final determination or resolution of the action pending as T- 409-16 in the Federal Court of Canada (including any appeals thereof). 3. Protection/Maintenance and Enforcement of HSI (HERTZ) Foreign ERB Trademarks and HSI (HERTZ) US ERB Trademarks during Interim Period. 3.1 During the Interim Period, HSI shall take all necessary and reasonable actions to preserve and protect the validity of the HSI (HERTZ) Foreign ERB Trademarks, the HSI HERC Foreign ERB Trademarks and the HSI (HERTZ) US ERB Trademarks licensed to HERC and HSI shall continue to prosecute all applications and maintain any registrations therefor. HERC shall not take any action that would harm or jeopardize the licensed HSI (HERTZ) Foreign ERB Trademarks, the HSI HERC Foreign ERB Trademarks or HSI (HERTZ) US ERB Trademarks. HERC shall assist in such actions to the extent required and requested by HSI for establishing use of the HSI (HERTZ) Foreign ERB Trademarks, the HSI HERC Foreign ERB Trademarks and HSI (HERTZ) US ERB Trademarks during the Interim Period. HSI shall also enforce the HSI (HERTZ) Foreign ERB Trademarks, the HSI HERC Foreign ERB Trademarks and HSI (HERTZ) US ERB Trademarks during the Interim Period as more fully set forth in the Trademark, Trade Name, Domain and Related Rights License Agreement. HERC shall be responsible for reimbursing THC and/or HSI for all costs in connection with prosecuting all applications and maintaining in full force and effect all registrations for the HSI (HERTZ) Foreign ERB Trademarks, the HSI HERC Foreign ERB Trademarks and HSI (HERTZ) US ERB Trademarks during the Interim Period. 4. Ownership. The Parties acknowledge and affirm their respective rights in and to the relevant trademark and related rights subject to this Agreement and neither Party shall directly or indirectly attack, challenge or impair the title and related rights of the other Party during the Interim Period or any time thereafter. The Parties shall cooperate to protect, maintain and enforce all relevant trademark and related rights subject to this Agreement. 5. Infringement and Indemnification. 5.1 Notice of Infringement. HERC shall promptly notify HSI of the use of any mark by any third party which HERC considers might be an infringement or passing off of any HERTZ or HERTZ-formative intellectual property used by or licensed to HERC pursuant 6 + + + + + + to the terms hereof or the Trademark, Trade Name, Domain and Related Rights License Agreement. However, HSI shall have the sole right to decide whether or not proceedings shall be brought against such third parties. In the event that HSI decides that action should be taken against such third parties, HSI may take such action either in its own name or, alternatively, HSI may authorize HERC to initiate such action in HERC's name. In any event, the Parties agree to cooperate fully with each other to the extent necessary to prosecute such action, all expenses being borne by the Party bringing such action and all damages which may be recovered being solely for the account of that Party. 5.2 Indemnification of HERC related to use of HERTZ trademark during the Interim Period. HSI shall defend, indemnify and hold HERC harmless against any and all claims, suits, actions or other proceedings whatsoever brought against HERC based on third-party claims of trademark infringement in connection with HERC'S use of the HSI (HERTZ) Foreign ERB Trademarks, the HSI (HERTZ) US ERB Trademarks, the HERC (HERTZ) US ERB Trademarks and the Other Intellectual Property to the extent such claims, suits, actions or other proceedings are based upon use of the HERTZ element comprising a HSI (HERTZ) Foreign ERB Trademark, HSI (HERTZ) US ERB Trademark, HERC (HERTZ) US ERB Trademark or Other Intellectual Property during the Interim Period only and from claims of third parties against HERC or any of its affiliates stemming from HERTZ's use of the HERTZ trademarks. 5.3 Indemnification of THC and HSI. Except as provided in Section 5.2, HERC shall defend, indemnify and hold THC, HSI, and their affiliates, and each of their officers, directors, agents, and employees harmless from and against all costs, expenses, taxes (including interest and penalties, and determined without regard to the tax attributes of any indemnitee) and losses (including reasonable attorney fees and costs) incurred from claims of third parties (including any taxing authority) against either THC, HSI or any of their affiliates stemming from any of the activities contemplated under this Agreement or the Trademark, Trade Name, Domain and Related Rights License Agreement and HERC's use of the HERC trademarks, including without limitation any transfers of rights and actions which relate in any way to the manufacture, distribution, sale or performance or promotion of the Foreign and US Licensed Products and Services (as defined in the Trademark, Trade Name, Domain and Related Rights License Agreement). This provision shall survive the expiration or earlier termination of this Agreement and the Trademark, Trade Name, Domain and Related Rights License Agreement. 5.4 Indemnity Procedure. All claims for indemnification under Section 5.2 and Section 5.3 and any other disputes that arise under this Agreement and the ancillary agreements exhibited hereto will be made in accordance with and governed by the procedures set forth in Article V of the Distribution Agreement. 6. Insurance. HERC shall, throughout the term of this Agreement, obtain and maintain at its own cost and expense, from a qualified AAA-rated insurance company, a standard liability insurance and business interruption policy along with advertising injury 7 + + + + + + protection, all of which must be acceptable to THC and HSI, and which must name THC and HSI as additional insureds. Such policy shall provide, in addition to other protection, protection against any and all claims, demands, and causes of action arising out of any act, omission, negligence or otherwise giving rise to a third party claim. The amount of coverage shall be a minimum of three million dollars ($3,000,000) combined single limit, with no deductible amount for each single occurrence for bodily injury and/or property damage. HERC shall provide for ten (10) days notice to THC and HSI in the event of any modification, cancellation or termination. HERC agrees to furnish THC and HSI Certificates of Insurance evidencing same within thirty (30) days after the execution of this Agreement. In no event shall HERC perform or promote the carry out the activities contemplated under this Agreement or the Trademark, Trade Name, Domain and Related Rights License Agreement prior to receipt by THC and HSI of evidence of insurance. 7. Confidentiality. Unless otherwise agreed to by the Parties or except as otherwise provided in this Agreement or the Distribution Agreement, any Confidential Information (as defined in the Distribution Agreement) furnished pursuant to this Agreement shall be subject to the confidentiality provisions and restrictions on disclosure set forth in Section 6.7 of the Distribution Agreement. 8. Breach and Termination. 8.1 By THC or HSI upon Notice. In the event of a material breach of this Agreement or any of the ancillary agreements exhibited hereto, THC or HSI may notify HERC of such material breach and terminate this Agreement upon written notice. If HERC has not cured any such breach within thirty (30) days after HERC receives such notice, this Agreement shall automatically terminate without further notice. Notwithstanding the foregoing, if the nature of the breach is such that it cannot be cured, then this Agreement shall automatically terminate upon notice of termination by THC or HSI to HERC (without any opportunity to cure the breach). 8.2 By THC or HSI Immediately. THC or HSI shall have the right to immediately terminate this Agreement if HERC: (i) becomes insolvent, or (ii) files a petition in bankruptcy or is adjudicated a bankrupt, or if a petition in bankruptcy is filed against HERC and not dismissed within thirty (30) days, or (iii) makes an assignment for the benefit of its creditors or an arrangement pursuant to any bankruptcy law, or (iv) discontinues its business, or (v) causes or suffers a receiver to be appointed for it or its business and such receiver has not been discharged within thirty (30) days after the date of appointment thereof 8.3 No Waiver. No refusal by either THC or HSI to terminate this Agreement in accordance this section will be deemed to be a waiver of such Party's right to terminate upon any subsequent or future event by which such party has, or is provided with, the right to terminate this Agreement. 8 + + + + + + 8.4 Effect of Termination. Termination of this Agreement shall not result in the termination of any provisions herein which by their nature are meant to survive termination (including any covenants herein related to discontinuation of use of licensed intellectual property and the indemnification provisions hereof), nor shall it relieve any Party of liability for breaches of the terms hereof prior to termination. For the avoidance of doubt, the Parties agree that in the event of termination of this Agreement or the Trademark, Trade Name, Domain and Related Rights License Agreement, Section 4.4 of the Trademark, Trade Name, Domain and Related Rights License Agreement contains additional provisions related to termination of licensed intellectual property pursuant to the terms hereof that shall apply as if contained herein. 9. Non-Competition. During the Interim Period, neither HERC nor any of its affiliates or subsidiaries shall, directly or indirectly, engage in the business of renting or leasing cars, crossovers or light trucks (including sport utility vehicles and light commercial vehicles) in [any country in which THC or any of its affiliates or subsidiaries rents or leases cars, crossovers or light trucks (including sport utility vehicles and light commercial vehicles) as of the date of this Agreement] without THC's prior written consent, except to the extent materially consistent in type and scope with HERC's operations immediately prior to the date of this IPA. This provision shall survive the expiration or earlier termination of this Agreement. 10. Governing Law. This Agreement and all disputes or controversies arising out of or relating to this Agreement or the transactions contemplated hereby shall be governed by, and construed in accordance with, the internal laws of the State of New York, without regard to the laws of any other jurisdiction that might be applied because of the conflicts of laws principles of the State of New York. 11. Notices. 11.1 All notices or other communications required to be sent or given under this Agreement or any ancillary agreement exhibited hereto will be in writing and will be delivered personally, by commercial overnight courier, by facsimile or by electronic mail, directed to the addresses set forth below. Notices are deemed properly given as follows: (a) if delivered personally, on the date delivered, (b) if delivered by a commercial overnight courier, one (1) business day after such notice is sent, and (c) if delivered by facsimile or electronic mail, on the date of transmission, with confirmation of transmission; provided, however, that if the notice is sent by facsimile or electronic mail, the notice must be followed by a copy of the notice being delivered by a means provided in (a) or (b): If THC, to: 8501 Williams Road Estero, Florida 33928 Attn: General Counsel 9 + + + + + + Fax: (866) 888-3765 E-mail: rfrecker@hertz.com If HSI, to: 8501 Williams Road Estero, Florida 33928 Attn: General Counsel Fax: (866) 888-3765 E-mail: rfrecker@hertz.com If HERC, to: 27500 Riverview Center Blvd. Bonita Springs, Florida 34135 Attn: Chief Legal Officer Fax: (239) 301-1109 E-mail: mwaryjas@hertz.com 12. Miscellaneous. 12.1 Authority. Each Party represents, warrants, and agrees that its corporate officers executing the Agreement have been duly authorized and empowered to do so. 12.2 Assignment. HERC may not assign, transfer, sublicense or delegate any of its rights hereunder or delegate its obligations hereunder without the prior written consent of HSI, and any such purported assignment, transfer, sublicense or delegation, in the absence of such consent, shall be void and without effect. 12.3 Entire Understanding/Amendment. This Agreement, the agreements exhibited hereto, the Distribution Agreement and the Ancillary Agreements (as defined in the Distribution Agreement) set forth the entire agreement and understanding between the Parties with respect to the subject matter hereof and may not be orally changed, altered, modified or amended in any respect. To effect any change, modification, alteration or amendment of this Agreement, the same must be in writing, signed by all Parties hereto. 12.4 Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of all successors and assigns of the Parties (including by way of merger or sale of all or substantially all assets), subject to the restrictions on assignment set forth herein. 12.5 No Waiver. Except as otherwise provided in this Agreement, neither Party waives any rights under this Agreement by delaying or failing to enforce such rights. No waiver by any Party of any breach or default hereunder shall be deemed to be a waiver of any subsequent breach or default. Any agreement on the part of any Party to any such waiver shall be valid only if set forth in a written instrument executed and delivered by a duly 10 + + + + + + authorized officer on behalf of such Party. 12.6 Severability. If any provision of this Agreement is held to be invalid or unenforceable by a court of competent jurisdiction or other authoritative body, such invalidity or unenforceability will not affect any other provision of this Agreement. Upon such determination that a provision is invalid or unenforceable, the Parties will negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible. 12.7 Relationship of Parties. Each Party shall act as an independent contractor in carrying out its obligations under this Agreement. Nothing contained in this Agreement shall be construed to imply a joint venture, partnership or principal/agent relationship between the Parties and neither Party by virtue of this Agreement shall have the right, power or authority to act or create any obligation, express or implied, on behalf of the other Party. 12.8 Construction. This Agreement shall be construed without regard to any presumption or other rule requiring construction against the Party causing this Agreement to be drafted. 12.9 Exhibits/Schedules. All exhibits and schedules attached to this Agreement are incorporated herein by reference as though fully set forth herein. 12.10 Headings. The paragraph headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. 12.11 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, and all of which shall constitute one and the same agreement. The exchange of copies of this Agreement and of signature pages by facsimile or PDF transmission shall constitute effective execution and delivery of this Agreement as to the Parties hereto and may be used in lieu of the original version of this Agreement for all purposes. Signatures of the Parties hereto transmitted by facsimile or PDF shall be deemed to be their original signatures for all purposes. 12.12. Conflict. In the event of a conflict between the terms and conditions of this Agreement and any ancillary agreement exhibited hereto, the terms and conditions of this Agreement will control. 12.13 Third Party Beneficiaries. Except as otherwise provided hereunder in Section 5.2 and Section 5.3 with respect to indemnified parties, nothing contained in this Agreement shall be construed to create any third-party beneficiary rights in any individual. ***** 11 + + + + + + IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized officers as of the day and year first above written. + + THE HERTZ CORPORATION + + By: /s/ Richard J. Frecker + + Name: Richard J. Frecker + + Title: Senior Vice President, Deputy General Counsel Secretary and Acting General Counsel + + HERTZ SYSTEM, INC. + + By: /s/ Richard J. Frecker + + Name: Richard J. Frecker + + Title: Vice President + + HERC RENTALS INC. + + By: /s/ Lawrence H. Silber + + Name: Lawrence H. Silber + + Title: President and Chief Executive Officer \ No newline at end of file diff --git a/full_contract_txt/HOLIDAYRVSUPERSTORESINC_04_15_2002-EX-10.13-ENDORSEMENT AGREEMENT.txt b/full_contract_txt/HOLIDAYRVSUPERSTORESINC_04_15_2002-EX-10.13-ENDORSEMENT AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..939cec4bbf07b37d7ad81809c8f8e7b1f2007dc8 --- /dev/null +++ b/full_contract_txt/HOLIDAYRVSUPERSTORESINC_04_15_2002-EX-10.13-ENDORSEMENT AGREEMENT.txt @@ -0,0 +1,115 @@ +EXHIBIT 10.13 + + ENDORSEMENT AGREEMENT + + This Agreement is made as of the 20th day of March 2002, by and between Holiday RV Superstores, Inc., d/b/a Recreation USA (the "Company"), a Delaware corporation having its principal office at 200 East Broward Boulevard, Suite 920, Ft. Lauderdale, Florida 33301, and Affinity Group, Inc. ("AGI"), a Delaware corporation having its principal office located at 2575 Vista Del Mar Drive, Ventura, California 93001 (each a "Party" and collectively the "Parties"). + + WHEREAS, the Company is a multi-state chain of dealerships engaged in the retail sales of service of recreational vehicles (the "Business"); and + + WHEREAS, AGI, either directly or through subsidiaries, operates the "Good Sam" club for recreational vehicle enthusiasts; and + + WHEREAS, the Company has determined that it would be beneficial sell vehicles with the Good Sam endorsement; and + + WHEREAS, the Company has raised capital that it represents will be sufficient to fund its operations as projected for at least the next year and AGI is willing to make the Good Sam name available as an endorsement for certain vehicles sold by the Company on the terms and for the consideration set forth herein. + + NOW THEREFORE, in consideration of the foregoing and the promises contained herein and other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the parties agree as follows: + + 1. License of Good Sam Name and Logo. + + A. AGI hereby grants a non-exclusive license (the "License") to the Company and its operating subsidiaries now or hereafter existing to use the Good Sam name and logo, including trademarks, trade names, or service marks as designated by AGI (the "Trademarks"), in connection with the sale of such new and used vehicles by the Company that have satisfied such criteria and standards as are established from time to time by AGI (the "Approved Use"). AGI warrants that it has the right and ability to grant the License to the Company to use the Trademarks for the Approved Use in accordance with the terms of this Agreement and, provided that the Company uses the Trademarks for the Approved Use in accordance with the terms of this Agreement, such grant will not infringe upon the rights of any other party. If the Company promptly notifies AGI in writing of a third party claim against the Company alleging that the Company's use of the Trademarks infringes a United States registered trademark, and if such claim of infringement is not caused in whole or in part by the Company having used the Trademarks other than for the Approved Use or other than strictly in the manner approved by AGI in accordance with the terms of this + + -1- + +Agreement, AGI will defend such claim at its expense and will indemnify the Company, its agents and representatives, for all losses, claims, charges, costs and expenses incurred by the Company as a result of such claim. The Company hereby agrees to reimburse and indemnify and hold AGI harmless from and against all losses, claims, charges, costs and expenses (including reasonable attorneys' fees) incurred by AGI as a result of any claim involving or arising in connection with any use other than an Approved Use or a use otherwise approved by AGI in accordance with the terms of this Agreement. + + B. In order to protect the good will of AGI and the Good Sam club, AGI retains the right to review and approve in advance and in its sole discretion, all uses of the Trademarks and the Good Sam name and logo. Therefore, the Company shall give AGI at least ten business days prior written notice and description of intended use by the Company of the Trademark and the Good Sam name and logo, and the Company's use of the Trademarks and the Good Sam name and logo is subject to approval of AGI. + + C. The Company agrees that its use of the Trademarks and the Good Sam name and logo is restricted to the Approved Use, and the Company shall not use the Trademarks or the Good Sam name or logo for any other purpose. In connection with the Approved Use, the Company shall not use the Trademarks or the Good Sam name or logo in any manner that is detrimental to AGI, the Good Sam Club or any of their affiliates or any of their respective goodwill or business. Upon the termination of this Agreement, whether by expiration of its term pursuant to Paragraph 6A or otherwise, the Company shall cease all uses of the Trademarks and the Good Sam logo and name in any fashion. + + 2. Endorsement. Subject to the Terms of Section 7 hereof, AGI hereby grants the Company the right to hold the Business out as having the License (the "Endorsement"). + + 3. Term and Termination. + + A. Unless otherwise provided for in this Agreement, the term of this Agreement shall be three years, commencing on the date of this Agreement and expiring on the third anniversary date of this Agreement (the "Termination + + + + + +Date"). In the event that the Company desires to terminate the Agreement prior to the Termination Date, it shall provide AGI with at least 60 days prior written notice of its intention to terminate this Agreement and this Agreement shall so terminate following the expiration of this 60-day period, without any further responsibility by either Party except as provided in Section 5. + + B. Either Party may terminate this Agreement at any time in the event of a material breach by the other Party which remains uncured after thirty days written notice thereof. + + -2- + + C. Either Party may terminate this Agreement immediately following written notice to the other Party if the other Party: + + (i) ceases to do business in the normal course; suffers the entry of an order for relief declaring such Party insolvent or bankrupt; + + (ii) is the subject of any proceeding related to its liquidation or insolvency (whether voluntary or involuntary) which is not dismissed within ninety calendar days; + + (iii) makes an assignment for the benefit of creditors. + + D. Notwithstanding any termination of this Agreement for any reason, AGI has earned and shall be entitled to retain all royalties paid prior to termination and, in addition AGI shall be entitled to payment from the Company of all compensation and unreimbursed expenses, if any, outstanding as of the date of termination. + + 4. Royalties. As consideration of Endorsement, concurrently with the execution of this Agreement, the Company shall pay to AGI a fee in the amount of $1,500,000. This fee shall be fully earned by AGI upon the receipt thereof and shall not be refundable for any reason. As consideration for the License, the Company shall pay to AGI such fees as may be established from time to time by mutual agreement of the Company and AGI. + + 5. Marketing of Products. AGI and the Company agree to develop and implement a program for marketing certain products and services offered by AGI through the Good Sam program, including, without limitation, the emergency road service program and the extended warranty program offered through Good Sam. Such marketing program will be on terms acceptable to AGI and the Company and shall be subject to standards and procedures designated by AGI. The terms of the marketing program will be set forth in a marketing agreement between AGI and the Company. The marketing agreement will provide, among other things, the terms pursuant to which the Company shall make "Fulfillment Deposits" for warranty products sold as a part of the marketing program. + + 6. Relationship. This Agreement shall not create a partnership or a joint venture between AGI and the Company, and neither party hereto shall have any authority to act for or represent the other party hereto or bind it to any agreements or obligations. + + 7. Public Disclosure Requirement. The Company may cause the release of a public announcement of the Endorsement which sets forth, in pertinent part, a + + -3- + +description of this Agreement, including without limitation, the name of AGI and the nature of the License. At least three business days prior to the dissemination of any such public announcement or filing containing the above-required description, the Company shall submit to AGI for its review and comment the proposed public announcement or description. AGI shall thereafter have three business days within which to submit its editions or amendments to the public announcement and/or description for inclusion therein, and the Company shall in its reasonable judgment and subject to the advice of its counsel attempt to incorporate such editions and amendments in the final version disseminated by the Company. + + In the event of a breach of this Agreement by the Company, the Endorsement may be withdrawn by AGI in its sole discretion and this Agreement terminated pursuant to the terms of Section 3B. In the event of such withdrawal, the Company agrees forthwith to take such action as AGI may request to publicly evidence that the Endorsement has been withdrawn and the Company agrees not to hold the Business out as having the Endorsement. + + 8. Notices. Any notices hereunder shall be sent to the Company and AGI at their respective address above set forth. Any notice shall be given by registered or certified mail, postage prepaid, and shall be deemed to have been given when deposited in the United States mail. Either party may designate any other address to which notice shall be given, by giving written notice to the other of such address in the manner herein provided. + + 9. Entire Agreement. This Agreement contains the entire agreement and understanding between the Parties with respect to its subject matter and supersedes all prior discussion, agreements and understandings between them with respect thereto. This Agreement may not be modified except in a writing signed by the Parties. + + + + + + 10. Governing Law. This Agreement has been made in the State of California and shall be governed by and construed in accordance with the laws thereof without regard to principles of conflicts of laws. + + 11. No Assignment. Neither this Agreement nor the rights of either Party hereunder shall be assigned by either Party without the prior written consent of the other Party. + + 12. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. + + 13. Non-Compliance. If any provision of this Agreement conflicts with any law, rule or regulation of any federal, state or self-regulatory organization, or any other governmental authority having jurisdiction over the activities or services described + + -4- + +herein, then in that event, the Company and AGI shall amend this Agreement to bring any affected provision into compliance with such regulations. + + 14. No Third-Party Beneficiaries. Both Parties intent that this Agreement shall not benefit or create any right or cause of action in or on behalf of any person or entity other than the Parties hereto. + + 15. No Party Deemed Drafter. Both Parties agree that they have each materially and fully participated in the negotiation and drafting of this Agreement and, if this Agreement ever should be the subject of interpretation by a court or arbitrator, it shall not be construed or interpreted against either Party for the reason that it was drafted by only one Party. + + 16. Headings. The headings in this Agreement are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement. Whenever the context so requires or permits, all references to the masculine herein shall include the feminine and neuter, all references to the neuter herein shall include the masculine and feminine, all references to the plural shall include the singular and all references to the singular shall include the plural. + + 17. Attorneys' Fees. If legal action shall be necessary to enforce any of the provisions of this Agreement, the prevailing party shall be entitled to reasonable attorneys' fees and costs incurred thereby. + + 18. Further Assurances. At any time and from time to time, both Parties agree, without further consideration, to take such actions and to execute and deliver such documents as may be reasonably necessary to effectuate the purposes of this Agreement. + + 19. No Implied Waivers. This Agreement may be amended, modified, superseded, cancelled, renewed or extended, and the terms and conditions hereof may be waived, only by a written instrument signed by the Parties or, in the case of a waiver, by the Party waiving compliance. No delay on the part of any Party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any waiver on the part of any Party of any right, power or privilege hereunder, nor any single or partial exercise of any right, power or privilege hereunder, preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder. + + [The balance of this page intentionally left blank.] + + -5- + + IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed the day and year first above written. + +Affinity Group, Inc. + +By: /s/ Paul E. Schedler ------------------------------- Name: Paul E. Schedler Title: Vice President + +Holiday RV Superstores, Inc. + +By: /s/ Marcus A. Lemonis ------------------------------- Name: Marcus A. Lemonis Title: Chief Executive Officer + + -6- \ No newline at end of file diff --git a/full_contract_txt/HOSPITALITYINVESTORSTRUST,INC_04_07_2014-EX-10.26-FRANCHISE AGREEMENT.txt b/full_contract_txt/HOSPITALITYINVESTORSTRUST,INC_04_07_2014-EX-10.26-FRANCHISE AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..acff6b419c1638be0c3c90c7de43591c70ffb704 --- /dev/null +++ b/full_contract_txt/HOSPITALITYINVESTORSTRUST,INC_04_07_2014-EX-10.26-FRANCHISE AGREEMENT.txt @@ -0,0 +1,653 @@ +FRANCHISE AGREEMENT HOMEWOOD SUITES BY HILTON STRATFORD (Stratford, Connecticut) + + + + + + + + + + TABLE OF CONTENTS 1.0 DEFINITIONS 1 2.0 GRANT OF LICENSE 6 2.1 Non-Exclusive License 6 2.2 Reserved Rights 7 3.0 TERM 7 4.0 OUR RESPONSIBILITIES 7 4.1 Training 7 4.2 Reservation Service 7 4.3 Consultation 7 4.4 Marketing 7 4.5 Inspections/Compliance Assistance 8 4.6 Manual 8 4.7 Equipment and Supplies 9 5.0 YOUR RESPONSIBILITIES 9 5.1 Operational and Other Requirements 9 6.0 HOTEL WORK 11 6.1 Necessary Consents 11 6.2 Initial Hotel Work 12 6.3 Commencement and Completion of the Hotel Work 12 6.4 Opening the Hotel Under This Agreement 12 6.5 Performance of Agreement 13 6.6 Hotel Refurbishment and Room Addition 13 7.0 STAFF AND MANAGEMENT OF THE HOTEL 14 8.0 PAYMENT OF FEES 14 8.1 Monthly Fees 14 8.2 Calculation and Payment of Fees 14 8.3 Other Fees 15 8.4 Taxes 15 8.5 Application of Fees 15 9.0 PROPRIETARY RIGHTS 15 9.1 Our Proprietary Rights 15 9.2 Trade Name, Use of the Marks 15 9.3 Use of Trade Name and Marks 16 9.4 Trademark Disputes 16 9.5 Web Sites 16 9.6 Covenant 17 10.0 REPORTS, RECORDS, AUDITS, AND PRIVACY 17 10.1 Reports 17 10.2 Maintenance of Records 17 10.3 Audit 17 10.4 Ownership of Information 18 10.5 Privacy and Data Protection 18 + +i + + + + + + + + 11.0 CONDEMNATION AND CASUALTY 18 11.1 Condemnation 18 11.2 Casualty 18 11.3 No Extensions of Term 19 12.0 NOTICE OF INTENT TO MARKET 19 13.0 TRANSFERS 19 13.1 Our Transfer 19 13.2 Your Transfer 19 14.0 TERMINATION 22 14.1 Termination with Opportunity to Cure 22 14.2 Immediate Termination by Us 22 14.3 Suspension Interim Remedies 23 14.4 Liquidated Damages on Termination 24 14.5 Actual Damages Under Special Circumstances 24 14.6 Your Obligations on Termination or Expiration 24 15.0 INDEMNITY 25 16.0 RELATIONSHIP OF THE PARTIES 26 16.1 No Agency Relationship 26 16.2 Notices to Public Concerning Your Independent Status 26 17.0 MISCELLANEOUS 26 17.1 Severability and Interpretation 26 17.2 Governing Law, Jurisdiction and Venue 27 17.3 Exclusive Benefit 27 17.4 Entire Agreement 27 17.5 Amendment and Waiver 27 17.6 Consent; Business Judgment 27 17.7 Notices 28 17.8 General Release 28 17.9 Remedies Cumulative 28 17.10 Economic Conditions Not a Defense 28 17.11 Representations and Warranties 28 17.12 Counterparts 29 17.13 Sanctioned Persons and Anti-bribery Representations and Warranties 29 17.14 Attorneys' Fees and Costs 30 17.15 Interest 30 17.16 Successors and Assigns 30 17.17 Our Delegation of Rights and Responsibility 30 18.0 WAIVER OF JURY TRIAL AND PUNITIVE DAMAGES 30 19.0 INTENTIONALLY DELETED 31 ADDENDUM TO FRANCHISE AGREEMENT NEW YORK ADDENDUM TO FRANCHISE AGREEMENT EXHIBIT A PRODUCT IMPROVEMENT PLAN + +ii + + + + + + + + FRANCHISE AGREEMENT This Franchise Agreement between Homewood Suites Franchise LLC ("we," "us," "our" or "Franchisor") and the Franchisee ("you," "your" or "Franchisee") set forth in the Addendum attached to this Agreement, is dated as of the Effective Date. We and you may collectively be referred to as the "Parties." INTRODUCTION We are a subsidiary of Hilton Worldwide. Hilton Worldwide and its Affiliates own, license, lease, operate, manage and provide various services for the Network. We are authorized to grant licenses for selected, first-class, independently owned or leased hotel properties, to operate under the Brand. You have expressed a desire to enter into this Agreement with us to obtain a license to use the Brand in the operation of a hotel at the address or location described in the Addendum. NOW, THEREFORE, in consideration of the premises and the undertakings and commitments of each party to the other party in this Agreement, the Parties agree as follows: 1.0 DEFINITIONS The following capitalized terms will have the meanings set forth after each term: "Affiliate" means any natural person or firm, corporation, partnership, limited liability company, association, trust or other entity which, directly or indirectly, controls, is controlled by, or is under common Control with, the subject entity. "Agreement" means this Franchise Agreement, including any exhibits, attachments and addenda. "Anti-Corruption Laws" means all applicable anti-corruption, anti-bribery, anti-money laundering, books and records, and internal controls laws of the United States and the United Kingdom, including the United States Foreign Corrupt Practices Act and the United Kingdom Bribery Act of 2010. "Brand" means the brand name set forth in the Addendum. "Change of Ownership Application" means the application that is submitted to us by you or the Transferee for a new franchise agreement in connection with a Change of Ownership Transfer. "Change of Ownership Transfer" means any proposed Transfer that results in a change of Control of Franchisee, the Hotel, or the Hotel Site and is not otherwise permitted by this Agreement, all as set out in Subsection 13.2.3. "Competing Brand" means a hotel brand or trade name that, in our sole business judgment, competes with the System, or any System Hotel or Network Hotel. "Competitor" means any individual or entity that, at any time during the Term, whether directly or through an Affiliate, owns in whole or in part, or is the licensor or franchisor of a Competing Brand, irrespective of the number of hotels owned, licensed or franchised under such Competing Brand name. A Competitor does not include an individual or entity that: (i) is a franchisee of a Competing Brand; (ii) manages a Competing Brand hotel, so long as the individual or entity is not the exclusive manager of the Competing Brand; or (iii) owns a minority interest in a Competing Brand, so long as neither that individual or entity nor any of its Affiliates is an officer, director, or employee of the Competing Brand, provides services (including as a consultant) to the Competing Brand, or exercises, or has the right to exercise, Control over the business decisions of the Competing Brand. + +1 + + + + + + + + "Construction Commencement Date" means the date set out in the Addendum, if applicable, by which you must commence construction of the Hotel. For the Hotel to be considered under construction, you must have begun to pour concrete foundations for the Hotel or otherwise satisfied any site-specific criteria for "under construction" set out in the Addendum. "Construction Work" means all necessary action for the development, construction, renovation, furnishing, equipping, acquisition of supplies and implementation of the Plans and Designs for the Hotel. "Construction Work Completion Date" means the date set out in the Addendum, if applicable, by which you must complete construction of the Hotel. "Control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of an entity, or of the power to veto major policy decisions of an entity, whether through the ownership of voting securities, by contract, or otherwise. "Controlling Affiliate" means an Affiliate that directly or indirectly Controls the Hotel and/or Controls the entity that Controls the Hotel. "Designs" means your plans, layouts, specifications, drawings and designs for the proposed furnishings, fixtures, equipment, signs and decor of the Hotel that use and incorporate the Standards. "Effective Date" means the date set out in the Addendum on which this Agreement becomes effective. "Entities" means our present or future Affiliates and direct or indirect owners. "Equity Interest" means any direct or indirect legal or beneficial interest in the Franchisee, the Hotel and/or the Hotel Site. "Equity Owner" means the direct or indirect owner of an Equity Interest, "Expiration Date" has the meaning set forth in Section 3. "Force Majeure" means an event causing a delay in our or your performance that is not the fault of or within the reasonable control of the party claiming Force Majeure. Force Majeure includes fire, floods, natural disasters, Acts of God, war, civil commotion, terrorist acts, any governmental act or regulation beyond such party's reasonable control. Force Majeure does not include the Franchisee's financial inability to perform, inability to obtain financing, inability to obtain permits or any other similar events unique to the Franchisee or the Hotel or to general economic downturn or conditions. "General Manager" has the meaning set forth in Subsection 7.1. "Government or Government Entity" means: (i) any agency, instrumentality, subdivision or other body of any national, regional, local or other government; (ii) any commercial or similar entities owned or controlled by such government, including any state-owned and state-operated companies; (iii) any political party; and (iv) any public international organization. "Government Official" means the following: (i) officers and employees of any national, regional, local or other Government; (ii) officers and employees of companies in which a Government owns an interest; (iii) any private person acting in an official capacity for or on behalf of any Government or Governmental Entity (such as a consultant retained by a government agency); (iv) candidates for political office at any level; (v) political parties and their officials; (vi) officers, employees, or official representatives of public (quasi-governmental) international organizations (such as the United Nations, World Bank, or International Monetary Fund). "Gross Receipts Tax" means any gross receipts, sales, use, excise, value added or any similar tax. + +2 + + + + + + + + "Gross Rooms Revenue" means all revenues derived from the sale or rental of Guest Rooms (both transient and permanent) of the Hotel, including revenue derived from the redemption of points or rewards under the loyalty programs in which the Hotel participates, amounts attributable to breakfast (where the guest room rate includes breakfast), and guaranteed no-show revenue and credit transactions, whether or not collected, at the actual rates charged, less allowances for any Guest Room rebates and overcharges, and will not include taxes collected directly from patrons or guests. Group booking rebates, if any, paid by you or on your behalf to third-party groups for group stays must be included in, and not deducted from, the calculation of Gross Rooms Revenue. "Guarantor" means the person or entity that guaranties your obligations under this Agreement or any of Your Agreements. "Guest Rooms" means each rentable unit in the Hotel generally used for overnight guest accommodations, the entrance to which is controlled by the same key, provided that adjacent rooms with connecting doors that can be locked and rented as separate units are considered separate Guest Rooms. The initial number of approved Guest Rooms is set forth in the Addendum. "Hilton Worldwide" means Hilton Worldwide Holdings, Inc., a Delaware corporation. "Hotel" means the property you will operate under this Agreement and includes all structures, facilities, appurtenances, furniture, fixtures, equipment, and entry, exit, parking and other areas located on the Hotel Site we have approved for your business or located on any land we approve in the future for additions, signs, parking or other facilities. "Hotel Site" means the real property on which the Hotel is located or to be located, as approved by us. "Hotel Work" means Construction Work and/or Renovation Work, as the case may be. "Improper Payment" means: (a) any payment, offer, gift or promise to pay or authorization of the payment or transfer of other things of value, including without limitation any portion of the compensation, fees or reimbursements received hereunder or the provision of any service, gift or entertainment, .directly or indirectly to (i) a Government Official; (ii) any director, officer, employee or commercial partner of a Party or its Affiliates; or, (iii) any other person at the suggestion, request or direction or for the benefit of any of the above-described persons and entities, for purposes of obtaining or influencing official actions or decisions or securing any improper advantage in order to obtain, retain or direct business; (b) payments made and expenses incurred in connection with performance of obligations under this Agreement that are not made and recorded with sufficient accuracy, detail, and control to meet the standards in applicable Anti-Corruption Laws; or, (c) any other transaction in violation of applicable Anti-Corruption Laws. "Indemnified Parties" means us and the Entities and our and their respective predecessors, successors and assigns, and the members, officers, directors, employees, managers, and agents. "Information" means all information we obtain from you or about the Hotel or its guests or prospective guests under this Agreement or under any agreement ancillary to this Agreement, including agreements relating to the computerized reservation, revenue management, property management, and other systems we provide or require, or otherwise related to the Hotel. Information includes, but is not limited to, Operational Information, Proprietary Information, and Personal Information. "Interim Remedy" has the meaning set forth in Subsection 14.3. "Laws" means all public laws, statutes, ordinances, orders, rules, regulations, permits, licenses, certificates, authorizations, directions and requirements of all Governments and Governmental Entities having jurisdiction over the Hotel, Hotel Site or over Franchisee to operate the Hotel, which, now or hereafter, may apply to the construction, renovation, completion, equipping, opening and operation of the Hotel, including Title ill of the Americans with Disabilities Act, 42 U.S.C. § 12181, et seq., and 28 C.F.R. Part 36. + +3 + + + + + + + + "License" has the meaning set forth in Subsection 2.1. "Liquidated Damages" has the meaning set forth in Subsections 6.4.4 and 14.4. "Management Company" has the meaning set forth in Subsection 7.1. "Manual" means all written compilations of the Standards. The Manual may take the form of one or more of the following: one or more looseleaf or bound volumes; bulletins; notices; videos; CD-ROMS and/or other electronic media; online postings; e-mail and/or electronic communications; facsimiles; or any other medium capable of conveying the Manual's contents. "Marks" means the Brand and all other service marks, copyrights, trademarks, trade dress, logos, insignia, emblems, symbols and designs (whether registered or unregistered), slogans, distinguishing characteristics, and trade names used in the System. "Monthly Fees" means, collectively, the Monthly Program Fee and the Monthly Royalty Fee, each of which is set forth in the Addendum. "Monthly Program Fee" means the fee we require from you in Subsection 8.1, which is set forth in the Addendum. "Monthly Royalty Fee" means the fee we require from you in Subsection 8.1, which is set forth in the Addendum. "Network" means the hotels, inns, conference centers, timeshare properties and other operations that Hilton Worldwide and its subsidiaries own, license, lease, operate or manage now or in the future. "Network Hotel" means any hotel, inn, conference center, timeshare property or other similar facility within the Network. "Opening Date" means the day on which we first authorize the opening of the facilities, Guest Rooms or services of the Hotel to the general public under the Brand. "Operational Information" means all information concerning the Monthly Fees, other revenues generated at the Hotel, room occupancy rates, reservation data and other financial and non-financial information we require. "Other Business(es)" means any business activity we or the Entities engage in, other than the licensing of the Hotel. "Other Hotels" means any hotel, inn, lodging facility, conference center or other similar business, other than a System Hotel or a Network Hotel. "Permitted Transfer" means any Transfer by you or your Equity Owners as specified in Section 13.2 of this Agreement. "Person(s)" means a natural person or entity. "Personal Information" means any information that: (i) can be used (alone or when used in combination with other information within your control) to identify, locate or contact an individual; or (ii) pertains in any way to an identified or identifiable individual. Personal Information can be in any media or format, including computerized or electronic records as well as paper-based files. + +4 + + + + + + + + "PIP" means product improvement plan. "PIP Fee" means the fee we charge for creating a PIP as specified in Section 8.3. "Plans" means your plans, layouts, specifications, and drawings for the Hotel that use and incorporate the Standards. "Principal Mark" is the Mark identified as the Principal Mark in the Addendum. "Privacy Laws" means any international, national, federal, provincial, state, or local law, code, rule or regulation that regulates the processing of Personal Information in any way, including data protection laws, laws regulating marketing communications and/or electronic communications, information security regulations and security breach notification rules. "Proprietary Information" means all information or materials concerning the methods, techniques, plans, specifications, procedures, data, systems and knowledge of and experience in the development, operation, marketing and licensing of the System, including the Standards and the Manuals, whether developed by us, you, or a third party. "Publicly Traded Equity Interest" means any Equity Interest that is traded on any securities exchange or is quoted in any publication or electronic reporting service maintained by the National Association of Securities Dealers, Inc., or any of its successors or (ii) any Equity Interests sold in any offering under the Securities Act of 1933, as amended, so long as such Equity Interests are beneficially held by no lesi than one hundred (100) unrelated persons or entities by the end of 2014 and thereafter. "Quality Assurance Re-Evaluation Fee" has the meaning set forth in Subsection 4.5. "Renovation Commencement Date" means the date set out in the Addendum, if applicable, by which you must commence Renovation Work. "Renovation Work" means the renovation and/or construction work, including purchasing and/or leasing and installation of all fixtures, equipment, furnishings, furniture, signs, computer terminals and related equipment, supplies and other items that would be required of a new System Hotel under the Manual, and any other equipment, furnishings and supplies that we may require for you to operate the Hotel as set out in any PIP applicable to the Hotel. "Renovation Work Completion Date" means the date set out in the Addendum, if applicable, by which you must complete Renovation Work. "Reports" mean daily, monthly, quarterly and annual operating statements, profit and loss statements, balance sheets, and other financial and non- financial reports we require. "Reservation Service" means the reservation service we designate in the Standards for use by System Hotels. "Room Addition Fee" means a sum equal to the then-current Room Addition Fee charged for new System Hotels multiplied by the number of Additional Guest Rooms you wish to add to the Hotel in accordance with Subsection 6.6.3. + +5 + + + + + + + + "Sanctioned Person" means any person or entity (including financial institutions) who is, or is owned or controlled by, or acting on behalf of any of the foregoing: (a) the Government of any country subject to comprehensive U.S. sanctions in force and which currently include the Government of Cuba, Iran, North Korea, Sudan, and Syria ("Sanctioned Countries"); (b) located in, organized under the laws of or ordinarily resident in Sanctioned Countries; (c) identified by any government or legal authority under applicable Trade Restrictions as a person with whom dealings and transactions by Franchisee and/or its Affiliates are prohibited or restricted, including but not limited to persons designated under United Nations Security Council Resolutions, the U.S. Department of the Treasury's Office of Foreign Assets Control ("OFAC") List of Specially Designated Nationals and Other Blocked Persons; the U.S. Department of State's lists of persons subject to non-proliferation sanctions; the European Union Financial Sanctions List; persons and entities subject to Special Measures regulations under Section 311 of the USA PATRIOT Act and the Bank Secrecy Act. "Securities" means any public offering, private placement or other sale of securities in the Franchisee, the Hotel or the Hotel Site. "Site" means domain names, the World Wide Web, the Internet, computer network/distribution systems, or other electronic communications sites. "Standards" means all standards, specifications, requirements, criteria, and policies that have been and are in the future developed and compiled by us for use by you in connection with the design, construction, renovation, refurbishment, appearance, equipping, furnishing, supplying, opening, operating, maintaining, marketing, services, service levels, quality, and quality assurance of System Hotels, including the Hotel, and for hotel advertising and accounting, whether contained in the Manual or set out in this Agreement or other written communication. "System" means the elements, including know-how, that we designate to distinguish hotels operating worldwide under the Brand (as may in certain jurisdictions be preceded or followed by a supplementary identifier such as "by Hilton") that provide to the consuming public a similar, distinctive, high-quality hotel service. The System currently includes: the Brand, the Marks, the Trade Name, and the Standards; access to a reservation service; advertising, publicity and other marketing programs and materials; training programs and materials; and programs for our inspection of the Hotel and consulting with you. "System Hotels" means hotels operating under the System using the Brand name. "Term" has the meaning set forth in Section 3.0. "Trade Name" means the name of the Hotel set forth in the Addendum. "Trade Restrictions" means trade, economic or investment sanctions, export controls, anti-terrorism, non-proliferation, anti-money laundering and similar restrictions in force pursuant to laws, rules and regulations imposed under Laws to which the Parties are subject. "Transfer" means in all its forms, any sale, lease, assignment, spin-off, transfer, or other conveyance of a direct or indirect legal or beneficial interest. "Transferee" means the proposed new franchisee resulting from a Transfer. "Your Agreements" means any other agreement between you and us or any of the Entities related to this Agreement, the Hotel and/or the Hotel Site. 2.0 GRANT OF LICENSE 2.1 Non-Exclusive License. We grant to you and you accept a limited, non-exclusive License to use the Marks and the System during the Term at, and in connection with, the operation of the Hotel in accordance with the terms of this Agreement. + +6 + + + + + + + + 2,2 Reserved Rights. 2.2.1 This Agreement does not limit our right, or the right of the Entities, to own, license or operate any Other Business of any nature, whether in the lodging or hospitality industry or not, and whether under the Brand, a Competing Brand, or otherwise. We and the Entities have the right to engage in any Other Businesses, even if they compete with the Hotel, the System, or the Brand, and whether we or the Entities start those businesses, or purchase, merge with, acquire, are acquired by, come under common ownership with, or associate with, such Other Businesses. 2.2.2 We may also 2.2.2.1 add, alter, delete or otherwise modify elements of the System; 2.2.2.2 use or license to others all or part of the System; 2.2.2.3 use the facilities, programs, services and/or personnel used in connection with the System in Other Businesses; and 2.2.2.4 use the System, the Brand and the Marks in the Other Businesses. 2.2.3 You acknowledge and agree that you have no rights to, and will not make any claims or demands for, damages or other relief arising from or related to any of the foregoing activities, and you acknowledge and agree that such activities will not give rise to any liability on our part, including liability for claims for unfair competition, breach of contract, breach of any applicable implied covenant of good faith and fair dealing, or divided loyalty. 3.0 TERM The Term shall begin on the Effective Date and will end, without further notice, on the Expiration Date set forth in the Addendum, unless terminated earlier under the terms of this Agreement. You acknowledge and agree that this Agreement is non-renewable and that this Agreement confers on you absolutely no rights of license renewal or extension whatsoever following the Expiration Date. 4.0 OUR RESPONSIBILITIES We have the following responsibilities to you under this Agreement, We reserve the right to fulfill some or all of these responsibilities through one of the Entities or through unrelated third parties, in our sole business judgment. We may require you to make payment for any resulting services or products directly to the provider. 4.1 Training. We may specify certain required and optional training programs and provide these programs at various locations. We may charge you for required training services and materials and for optional training services and materials we provide to you. You are responsible for all travel, lodging and other expenses you or your employees incur in attending these programs. 4.2 Reservation Service. We will furnish you with the Reservation Service. The Reservation Service will be furnished to you on the same basis as it is furnished to other System Hotels, subject to the provisions of Subsection 14.3 below. 4.3 Consultation. We may offer consultation services and advice in areas such as operations, facilities, and marketing. We may establish fees in advance, or on a project-by-project basis, for any consultation service or advice you request. 4.4 Marketing. 4.4.1 We will publish (either in hard copy or electronic form) and make available to the traveling public a directory that includes System Hotels. We will include the Hotel in advertising of System Hotels and in international, national and regional marketing programs in accordance with our general practice for System Hotels. + +7 + + + + + + + + 4.4.2 We will use your Monthly Program Fee to pay for various programs to benefit the System, including: 4.4.2.1 advertising, promotion, publicity, public relations, market research, and other marketing programs; 4.4.2.2 developing and maintaining directories of and Internet sites for System Hotels; 4.4.2.3 developing and maintaining the Reservation Service systems and support; and 4.4.2,4 administrative costs and overhead related to the administration or direction of these projects and programs. 4.4.3 We will have the sole right to determine how and when we spend these funds, including sole control over the creative concepts, materials and media used in the programs, the placement and allocation of advertising, and the selection of promotional programs. 4.4.4 We may enter into arrangements for development, marketing, operations, administrative, technical and support functions, facilities, programs, services and/or personnel with any other entity, including any of the Entities or a third party. 4.4.5 You acknowledge that Monthly Program Fees are intended for the benefit of the System and will not simply be used to promote or benefit any one System Hotel or market. We will have no obligation in administering any activities paid for with the Monthly Program Fee to make expenditures for you that are equivalent or proportionate to your payments or to ensure that the Hotel benefits directly or proportionately from such expenditures. 4.4.6 We may create any programs and allocate monies derived from Monthly Program Fees to any regions or localities, as we consider appropriate in our sole business judgment. The aggregate of Monthly Program Fees paid to us by System Hotels does not constitute a trust or "advertising fund" and we are not a fiduciary with respect to the Monthly Program Fees paid by you and other System Hotels. 4.4.7 We are not obligated to expend funds in excess of the amounts received from System Hotels. If any interest is earned on unused Monthly Program Fees, we will use the interest before using the principal. The Monthly Program Fee does not cover your costs of participating in any optional marketing programs and promotions offered by us in which you voluntarily choose to participate. These Monthly Program Fees do not cover the cost of operating the Hotel in accordance with the Standards. 4.5 Inspections/Compliance Assistance. We will administer a quality assurance program for the System that may include conducting pre- opening and periodic inspections of the Hotel and guest satisfaction surveys and audits to ensure compliance with the Standards. You will permit us to inspect the Hotel without prior notice to you to determine if the Hotel is in compliance with the Standards. You will cooperate with our representatives during these inspections. You will then take all steps necessary to correct any deficiencies within the times we establish. You may be charged a Quality Assurance Re-Evaluation Fee as set forth in the Standards. You will provide complimentary accommodations for the quality assurance auditor each time we conduct a regular inspection or a special on-site quality assurance re-evaluation after the Hotel has failed a regular quality assurance evaluation or to verify that deficiencies noted in a quality assurance evaluation report or PIP have been corrected or completed by the required dates. 4.6 Manual. We will issue to you or make available in electronic form the Manual and any revisions and updates we may make to the Manual during the Term. You agree to ensure that your copy of the Manual is, at all times, current and up to date. If there is any dispute as to your compliance with the provisions of the Manual, the master copy of the Manual maintained at our principal office will control. + +8 + + + + + + + + 4.7 Equipment and Supplies. We will make available to you for use in the Hotel various purchase, lease, or other arrangements for exterior signs, operating equipment, operating supplies, and furnishings, which we make available to other System Hotels. 5.0 YOUR RESPONSIBILITIES 5.1 Operational and Other Requirements. You must: 5.1.1 after the Opening Date, operate the Hotel twenty-four (24) hours a day; 5.1.2 operate the Hotel using the System, in compliance with this Agreement and the Standards, and in such a manner to provide courteous, uniform, respectable and high quality lodging and other services and conveniences to the public. You acknowledge that, although we provide the Standards, you have exclusive day-to-day control of the business and operation of the Hotel and we do not in any way possess or exercise such control; 5A.3 comply with the Standards, including our specifications for all supplies, products and services. We may require you to purchase a particular brand of product or service to maintain the common identity and reputation of the Brand, and you will comply with such requirements. Unless we specify otherwise, you may purchase products from any authorized .source of distribution; however, we reserve the right, in our business judgment, to enter into exclusive purchasing arrangements for particular products or services and to require that you purchase products or services from approved suppliers or distributors; 5.1.4 install, display, and maintain signage displaying or containing the Brand name and other distinguishing characteristics in accordance with Standards we establish for System Hotels; 5.1.5 comply with Standards for the training of persons involved in the operation of the Hotel, including completion by the General Manager and other key personnel of the Hotel of a training program for operation of the Hotel under the System, at a site we designate. You will pay us all fees and charges, if any, we require for your personnel to attend these training programs. You are responsible for all travel, lodging and other expenses you or your employees incur in attending these programs; 5.1.6 purchase and maintain property management, revenue management, in-room entertainment, telecommunications, high-speed Internet access, and other computer and technology systems that we designate for the System or any portion of the System based on our assessment of the long-term best interests of System Hotels, considering the interest of the System as a whole; 5.1.7 advertise and promote the Hotel and related facilities and services on a local and regional basis in a first-class, dignified manner, using our identity and graphics Standards for all System Hotels, at your cost and expense. You must submit to us for our approval samples of all advertising and promotional materials that we have not previously approved (including any materials in digital, electronic or computerized form or in any form of media that exists now or is developed in the future) before you produce or distribute them. You will not begin using the materials until we approve them. You must immediately discontinue your use of any advertising or promotional material we disapprove, even if we previously approved the materials; 5.1.8 participate in and pay all charges in connection with all required System guest complaint resolution programs, which programs may include chargebacks to the Hotel for guest refunds or credits and all required System quality assurance programs, such as guest comment cards, customer surveys and mystery shopper programs. You must maintain minimum performance Standards and scores for quality assurance programs we establish; + +9 + + + + + + + + 5.1.9 honor all nationally recognized credit cards and credit vouchers issued for general credit purposes that we require and enter into all necessary credit card and voucher agreements with the issuers of such cards or vouchers; 6.1.10 participate in and use the Reservation Service, including any additions, enhancements, supplements or variants we develop or adopt, and honor and give first priority on available rooms to all confirmed reservations referred to the Hotel through the Reservation Service. The only reservation service or system you may use for outgoing reservations referred by or from the Hotel to other Network Hotels will be the Reservation Service or other reservation services we designate; 5.1.11 comply with Laws and, on request, give evidence to us of compliance; 5.1.12 participate in, and promptly pay all fees, commissions and charges associated with, all travel agent commission programs and third-party reservation and distribution services (such as airline reservation systems), all as required by the Standards and in accordance with the terms of these programs, all of which may be modified; 5.1.13 not engage, directly or indirectly, in any cross-marketing or cross-promotion of the Hotel with any Other Hotel or related business, without our prior written consent. You agree to refer guests and customers, wherever reasonably possible, only to System Hotels or Network Hotels. We may require you to participate in programs designed to refer prospective customers to Other Hotels. You must display all material, including brochures and promotional material we provide for System Hotels and Network Hotels, and allow advertising and promotion only of System Hotels and Network Hotels on the Hotel Site, unless we specifically direct you to include advertising or promotion of Other Hotels; 5.1.14 treat as confidential the Standards, the Manual and all other Proprietary Information. You acknowledge and agree that you do not acquire any interest in the Proprietary Information other than the right to utilize the same in the development and operation of the Hotel under the terms of this Agreement. You agree that you will not use the Proprietary Information in any business or for any purpose other than in the development and operation of the Hotel under the System and will maintain the absolute confidentiality of the Proprietary Information during and after the Term. You will not make unauthorized copies of any portion of the Proprietary Information; and will adopt and implement all procedures we may periodically establish in our business judgment to prevent unauthorized use or disclosure of the Proprietary Information, including restrictions on disclosure to employees and the use of non-disclosure and non-competition clauses in agreements with employees, agents and independent contractors who have access to the Proprietary information; 5.1.15 not become a Competitor, or permit your Affiliate to become a Competitor, in the upscale hotel market segment, or any substantially equivalent market segment, as determined by Smith Travel Research ("STR") (or, if STR is no longer in existence, STR's successor or other such industry resource that is as equally as reputable as STR); 5.1.16 own fee simple title (or long-term ground leasehold interest for a term equal to the Term) to the real property and improvements that comprise the Hotel and the Hotel Site, or alternatively, at our request, cause the fee simple owner, or other third party acceptable to us, to provide its guaranty covering all of your obligations under this Agreement in form and substance acceptable to us; 5.1.17 maintain legal possession and control of the Hotel and Hotel Site for the Term and promptly deliver to us a copy of any notice of default you receive from any mortgagee, trustee under any deed of trust, or ground lessor for the Hotel, and on our request, provide any additional information we may request related to any alleged default; 5.1.18 not directly or indirectly conduct, or permit by lease, concession arrangement or otherwise, gaming or casino operations in or connected to the Hotel or on the Hotel Site, or otherwise engage in any activity which, in our business judgment, is likely to adversely reflect upon or affect in any manner, any gaming licenses or permits held by the Entities or the then-current stature of any of the Entities with any gaming commission, board, or similar governmental or regulatory agency, or the reputation or business of any of the Entities; + +10 + + + + + + + + 5.1.19 not directly or indirectly conduct or permit the marketing or sale of timeshares, vacation ownership, fractional ownership, condominiums or like schemes at, or adjacent to, the Hotel. This restriction will not prohibit you from directly or indirectly conducting timeshare, vacation ownership, fractional ownership, or condominium sales or marketing at and for any property located adjacent to the Hotel that is owned or leased by you so long as you do not use any of the Marks in such sales or marketing efforts and you do not yse the Hotel or its facilities in such sales and marketing efforts or in the business operations of the adjacent property; 5.1.20 participate in and pay all charges related to our marketing programs (in addition to programs covered by the Monthly Program Fee), all guest frequency programs we require, and any optional programs that you opt into; 5.1.21 honor the terms of any discount or promotional programs (including any frequent guest program) that we offer to the public on your behalf, any room rate quoted to any guest at the time the guest makes an advance reservation, and any award certificates issued to Hotel guests participating in these programs; 5.1.22 after the Effective Date, maintain, at your expense, insurance of the types and in the minimum amounts we specify in the Standards. All such insurance must be with insurers having the minimum ratings we specify, name as additional insureds the parties we specify in the Standards, and carry the endorsements and notice requirements we specify in the Standards. If you fail or neglect to obtain or maintain the insurance or policy limits required by this Agreement or the Standards, we have the option, but not the obligation, to obtain and maintain such insurance without notice to you, and you will immediately on our demand pay us the premiums and cost we incur in obtaining this insurance; 5.1.23 not share the business operations and Hotel facilities with any Other Hotel or other business; 5.1.24 not engage in any tenant-in-common syndication or Transfer of any tenant-incommon interest in the Hotel or the Hotel Site; and 5.1.25 promptly provide to us all information we reasonably request about you and your Affiliates (including your respective beneficial owners, officers, directors, shareholders, partners or members) and/or the Hotel, title to the property on which the Hotel is constructed and any other property used by the Hotel. You will not be required to provide us information about Publicly Traded Equity Owners with a non- Controlling Equity Interest except as we deem necessary in our legal or business judgment to ensure compliance by us or our Affiliates with applicable Laws. 6.0 HOTEL WORK 6.1 Necessary Consents. 6A.1 You must obtain our prior written consent before retaining or engaging any architect, interior designer, general contractor and major subcontractors for the Hotel. We will not unreasonably withhold such consent. 6.1.2 Plans and Designs must be submitted to us in accordance with the schedule specified in the Addendum or any PIP. Before we approve your Plans, your architect or other certified professional must certify to us that the Plans comply with all Laws related to accessibility/accommodations/facilities for those with disabilities. + +11 + + + + + + + + 6.1.3 You shall not commence any Hotel Work unless and until we have issued our written consent in respect of the Plans and Designs, which consent will not be unreasonably withheld. 6.1.4 Once we have provided our consent to the Plans and Designs, no change may be made to the Plans or Designs without our prior written consent. By consenting to the Plans and Designs or any changes or modifications to the Plans and Designs, we do not warrant the depth of our analysis or assume any responsibility or liability for the suitability of the Plans and Designs or the resulting Hotel Work, 6.1.5 You are solely responsible for ensuring that the Plans and Designs (including Plans and Designs for Hotel Work) comply with our then-current Standards, the Manual, and all Laws. 6.2 Initial Hotel Work. You will perform or cause the Hotel Work to be performed in accordance with this Agreement, the approved Plans and Designs, the Manual and, for Renovation Work, the PIP. You will bear the entire cost of the Hotel Work, including the cost of the Plans and Designs, professional fees, licenses, permits, equipment, furniture, furnishings and supplies. You are solely responsible for obtaining all necessary licenses, permits and zoning variances required for the Hotel Work. 6.3 Commencement and Completion of the Hotel Work. 6.3.1 You will commence the Hotel Work on or before the Construction Commencement Date or Renovation Commencement Date specified in the Addendum. You may request an extension by submitting a written request for our approval before the applicable deadline, describing the status of the project and the reason for the requested extension, and paying our then-current extension fee. We may condition our approval on an update to the Plans and Designs. Once commenced, the Hotel Work will continue uninterrupted except to the extent continuation is prevented by events of Force Majeure. You must give written notice to us specifying the nature and duration of any event of Force Majeure promptly after becoming aware of the event, and specifying that you have used, and continue to use, reasonable endeavours to mitigate the effects of such event until such event ceases to exist. On verification of the event of Force Majeure, we will approve an extension of the Construction Commencement Date or Renovation Work Completion Date for up to eighteen (18) months. You must promptly provide to us evidence that the Construction Work has commenced if we request it. 6.3.2 The Hotel Work must be completed and the Hotel must be furnished, equipped, and otherwise made ready to open in accordance with the terms of this Agreement no later than the Construction Work Completion Date or Renovation Work Completion Date specified in the Addendum. You may request an extension by submitting a written request for our approval before the applicable deadline, describing the status of the project and the reason for the requested extension, and paying our then-current extension fee. 6.3.3 On completion of the Hotel Work and, as a condition to our authorization to open the Hotel, your architect, general contractor or other certified professional must provide us with a certificate stating that the as-built premises comply with all Laws relating to accessibility/accommodations/facilities for those with disabilities. 6.4 Opening the Hotel Under This Agreement. 6.4.1 You will open the Hotel on the Opening Date. You will not open the Hotel unless and until you receive our written consent to do so pursuant to Subsection 6.4.2 or 6.4.3. 6.4.2 You will give us at least fifteen (15) days advance notice that you have complied with all the terms and conditions of this Agreement and the Hotel is ready to open. We will use reasonable efforts within fifteen (15) days after we receive your notice to visit the Hotel and to conduct other investigations as we deem necessary to determine whether to authorize the opening of the Hotel, but we will not be liable for delays or loss occasioned by our inability to complete our investigation and to make this determination within the fifteen (15) day period. If you fail to pass our initial opening site visit, we may, in our sole business judgment, charge you reasonable fees associated with any additional visits. + +12 + + + + + + + + 6.4.3 We shall be entitled to withhold our consent to the opening of the Hotel until: 6.4.3.1 you have complied with all the terms and conditions in this Agreement; 6.4.3.2 your staff has received adequate training and instruction in the manner we require; 6.4.3.3 you have received authorization to open the Hotel from the relevant governmental authority for the jurisdiction in which the Hotel is located, if applicable; and 6.4.3.4 all fees and charges you owe to us or the Entities have been paid. 6.4.4 Opening the Hotel before the Opening Date is a material breach of this Agreement. 6.4.4.1 You will pay us Liquidated Damages in the amount of Five Thousand Dollars ($5,000) per day if you open the Hotel before the Opening Date to compensate us for the damage caused by such breach. You must also reimburse us for all of our costs and expenses, including legal fees, incurred in enforcing our rights under this Agreement. 6.4.4.2 These Liquidated Damages for damage to our Marks shall not limit or exclude any other remedies we may have at law or in equity. You acknowledge and agree that that the Liquidated Damages payable under this Subsection represent a reasonable estimate of the minimum just and fair compensation for the damages we will suffer as the result of the opening of the Hotel before the Opening Date in material breach of this Agreement. 6.5 Performance of Agreement. You must satisfy all of the terms and conditions of this Agreement, and equip, supply, staff and otherwise make the Hotel ready to open under our Standards. As a result of your efforts to comply with the terms and conditions of this Agreement, you will incur significant expense and expend substantial time and effort. You acknowledge and agree that we will have no liability or obligation to you for any losses, obligations, liabilities or expenses you incur if we do not authorize the Hotel to open or if we terminate this Agreement because you have not complied with the terms and conditions of this Agreement. 6.6 Hotel Refurbishment and Room Addition. 6.6.1 We may periodically require you to modernize, rehabilitate and/or upgrade the Hotel's fixtures, equipment, furnishings, furniture, signs, computer hardware and software and related equipment, supplies and other items to meet the then-current Standards. You will make these changes at your sole cost and expense and in the time frame we require. 6.6.2 You may not make any significant changes (including major changes in structure, design or decor) in the Hotel. Minor redecoration and minor structural changes that comply with our Standards will not be considered significant. 6.6.3 You may not make any change in the number of approved Guest Rooms in the Addendum. if you wish to add additional Guest Rooms to the Hotel after the Opening Date, you must submit an application to obtain our consent. If we consent to the addition of Guest Rooms at the Hotel, you must pay us our then-current Room Addition Fee. As a condition to our granting approval of your application, we may require you to modernize, rehabilitate or upgrade the Hotel in accordance with Subsection 6.6.1 of this Agreement, and to pay us our then-current PIP Fee to prepare a PIP to determine the renovation requirements for the Hotel. We may also require you to execute an amendment to this Agreement covering the terms and conditions of our consent to the addition of Guest Rooms. + +13 + + + + + + + + 7.0 STAFF AND MANAGEMENT OF THE HOTEL 7.1 You are solely responsible for the management of the Hotel's business. You will provide qualified and experienced management (a "Management Company") and an individual to manage the Hotel (a "General Manager"), each approved by us in writing. We have the right to communicate directly with the Management Company and managers at the Hotel. We may rely on the communications of such managers or Management Company as being on your behalf. Any Management Company and/or General Manager must have the authority to perform all of your obligations under this Agreement. The engagement of a Management Company does not reduce your obligations under this Agreement. In the case of any conflict between this Agreement and any agreement with the Management Company or General Manager, this Agreement prevails. 7.2 You represent and agree that you have not, and will not, enter into any lease, management agreement or other similar arrangement for the operation of the Hotel or any part of the Hotel without our prior written consent. To be approved by us as the operator of the Hotel, you, any proposed Management Company and any proposed General Manager must be qualified to manage the Hotel. We may refuse to approve you, any proposed Management Company or any proposed General Manager who is a Competitor or which, in our business judgment, is inexperienced or unqualified in managerial skills or operating capability or is unable or unwilling to adhere fully to your obligations under this Agreement. 7.3 If the Management Company becomes a Competitor or the Management Company and/or the General Manager resigns or is terminated by you or otherwise becomes unsuitable in our sole business judgment to manage the Hotel during the Term, you will have ninety (90) days to retain a qualified substitute Management Company and/or General Manager acceptable to us. 8.0 PAYMENT OF FEES 8.1 Monthly Fees. Beginning on the Effective Date, you will pay to us for each month (or part of a month, including the final month you operate under this Agreement) the Monthly Fees, each of which is set forth in the Addendum. 8.2 Calculation and Payment of Fees. 8.2.1 The Monthly Fees will be calculated in accordance with the accounting methods of the then-current Uniform System of Accounts for the Lodging Industry, or such other accounting methods specified by us in the Manual. 8.2.2 The Monthly Fees will be paid to us at the place and in the manner we designate on or before the fifteenth (15th) day of each month and will be accompanied by our standard schedule setting forth in reasonable detail the computation of the Monthly Fees for such month. 8.2.3 We may require you to transmit the Monthly Fees and all other payments required under this Agreement by wire transfer or other form of electronic funds transfer and to provide the standard schedule in electronic form. You must bear all costs of wire transfer or other form of electronic funds transfer or other electronic payment and reporting. 8.2.4 In the event of fire or other insured casualty that results in a reduction of Gross Rooms Revenue, you will determine and pay us, from the proceeds of any business interruption or other insurance applicable to loss of revenues, an amount equal to the forecasted Monthly Fees, based on the Gross Rooms Revenue amounts agreed on between you and your insurance company that would have been paid to us in the absence of such casualty. + +14 + + + + + + + + 8.3 Other Fees. You will timely pay all amounts due us or any of the Entities for any invoices or for goods or services purchased by or provided to you or paid by us or any of the Entities on your behalf, including pre-opening sales and operations training or extension fees as specified on the Addendum. 8.4 Taxes. If a Gross Receipts Tax is imposed on us or the Entities based on payments made by you related to this Agreement, then you must reimburse us or the Entity for such Gross Receipts Tax to ensure that the amount we or the Entity retains, after paying the Gross Receipts Tax, equals the net amount of the payments you are required to pay us or the Entity had such Gross Receipts Tax not been imposed. You are not required to pay income taxes payable by us or any Entity as a result of our net income relating to fees collected under this Agreement. 8.5 Application of Fees. We may apply any amounts received from you to any amounts due under this Agreement. 9.0 PROPRIETARY RIGHTS 9.1 Our Proprietary Rights. 9.1.1 You will not contest, either directly or indirectly during or after the Term: 9.1.1.1 our (and/or any Entities') ownership of, rights to and interest in the System, Brand, Marks and any of their elements or components, including present and future distinguishing characteristics and agree that neither you nor any design or construction professional engaged by you may use our Standards, our Manual or your approved Plans and Designs for any hotel or lodging project other than the Hotel; 9.1.1.2 our sole right to grant licenses to use all or any elements or components of the System; 9.1.1.3 that we (and/or the Entities) are the owner of (or the licensee of, with the right to sub-license) all right, title and interest in and to the Brand and the Marks used in any form and in any design, alone or in any combination, together with the goodwill they symbolize; or 9,1.1.4 the validity or ownership of the Marks. 9.1.2 You acknowledge that these Marks have acquired a secondary meaning which indicates that the Hotel, Brand and System are operated by or with our approval. All improvements and additions to, or associated with, the System, all Marks, and all goodwill arising from your use of the System and the Marks, will inure to our benefit and become our property (or that of the applicable Entities), even if you develop them. 9.1.3 You will not apply for or obtain any trademark or service mark registration of any of the Marks or any confusingly similar marks in your name or on behalf of or for the benefit of anyone else. You acknowledge that you are not entitled to receive any payment or other value from us or from any of the Entities for any goodwill associated with your use of the System or the Marks, or any elements or components of the System. 9.2 Trade Name, Use of the Marks. 9,2.1 Trade Name. 9.2.1.1 The Hotel will be initially known by the Trade Name set forth in the Addendum. We may change the Trade Name, the Brand name and/or any of the Marks (but not the Principal Mark), or the way in which any of them (including the Principal Mark) are depicted, at any time at our sole option and at your expense. You may not change the Trade Name without our specific prior written consent. + +15 + + + + + + + + 9.2.1.2 You acknowledge and agree that you are not acquiring the right to use any service marks, copyrights, trademarks, trade dress, logos, designs, insignia, emblems, symbols, slogans, distinguishing characteristics, trade names, domain names or other marks or characteristics owned by us or licensed to us that we do not specifically designate to be used in the System. 9.3 Use of Trade Name and Marks. You will operate under the Marks, using the Trade Name, at the Hotel. You will not adopt any other names or marks in operating the Hotel without our approval. You will not, without our prior written consent, use any of the Marks, or the word "Hilton," or other Network trademarks, trade names or service marks, or any similar words or acronyms, in: 9.3.1 your corporate, partnership, business or trade name; 9.3.2 any Internet-related name (including a domain name); 9.3.3 or any business operated separately from the Hotel, including the name or identity of developments adjacent to or associated with the Hotel. 9.4 Trademark Disputes. 9.4.1 You will immediately notify us of any infringement or dilution of or challenge to your use of any of the Marks and will not, absent a court order or our prior written consent, communicate with any other person regarding any such infringement, dilution, challenge or claim. We will take the action we deem appropriate with respect to such challenges and claims and have the sole right to handle disputes concerning use of all or any part of the Marks or the System. You will fully cooperate with us and any applicable Entity in these matters. We will reimburse you for expenses incurred by you as the direct result of activities undertaken by you at our prior written request and specifically relating to the trademark dispute at issue. We will not reimburse you for any other expenses incurred by you for cooperating with us or the Entities. 9.4.2 You appoint us as your exclusive attorney-in-fact, to prosecute, defend and/or settle all disputes of this type at our sole option. You will sign any documents we or the applicable Entity believe are necessary to prosecute, defend or settle any dispute or obtain protection for the Marks and the System and will assign to us any claims you may have related to these matters. Our decisions as to the prosecution, defense or settlement of the dispute will be final. All recoveries made as a result of disputes regarding use of all or part of the System or the Marks will be for our account. 9.5 Web Sites. 9.5.1 You may not register, own, maintain or use any Sites that relate to the Network or the Hotel or that include the Marks, The only domain names, Sites, or Site contractors that you may use relating to the Hotel or this Agreement are those we assign or otherwise approve in writing. You acknowledge that you may not, without a legal license or other legal right, post on your Sites any material in which any third party has any direct or indirect ownership interest. You must incorporate on your Sites any information we require in the manner we deem necessary to protect our Marks. 9.5.2 Any use of the Marks on any Site must conform to our requirements, including the identity and graphics Standards for all System hotels. Given the changing nature of this technology, we have the right to withhold our approval, and to withdraw any prior approval, and to modify our requirements. + +16 + + + + + + + + 9.6 Covenant. 9.6.1 You agree, as a direct covenant with us and the Entities, that you will comply with all of the provisions of this Agreement related to the manner, terms and conditions of the use of the Marks and the termination of any right on your part to use any of the Marks. Any non-compliance by you with this covenant or the terms of this Agreement related to the Marks, or any unauthorized or improper use of the System or the Marks, will cause irreparable damage to us and/or to the Entities and is a material breach of this Agreement. 9.6.2 If you engage in such non-compliance or unauthorized and/or improper use of the System or the Marks during or after the Term, we and any of the applicable Entities, along with the successors and assigns of each, will be entitled to both temporary and permanent injunctive relief against you from any court of competent jurisdiction, in addition to all other remedies we or the Entities may have at law. You consent to the entry of such temporary and permanent injunctions. You must pay all costs and expenses, including reasonable attorneys' fees, expert fees, costs and other expenses of litigation that we and/or the Entities may incur in connection with your non-compliance with this covenant. 10.0 REPORTS, RECORDS, AUDITS, AND PRIVACY 10.1 Reports. 10.1.1 At our request, you will prepare and deliver to us the Reports containing the Operational Information (and any other information we reasonable require) in the form, manner and time frame we require. At a minimum, by the fifteenth (15th) day of each month, you will submit to us the Operational Information for the previous month and reflecting the computation of the amounts then due under Section 8, in the form, manner and time frame we require. 10.1.2 The Reports will be certified as accurate in the manner we require. You will permit us to inspect your books and records at all reasonable times. 10.2 Maintenance of Records. You will prepare, on a current basis, (and preserve for no less than the greater of four (4) years or the time period we stated in our record retention requirements), complete and accurate records concerning Gross Rooms Revenue and all financial, operating, marketing and other aspects of the Hotel. You will maintain an accounting system that fully and accurately reflects all financial aspects of the Hotel and its business. These records will include books of account, tax returns, governmental reports, register tapes, daily reports, and complete quarterly and annual financial statements (including profit and loss statements, balance sheets and cash flow statements) and will be prepared in the form, manner and time frame we require. 10.3 Audit. 10.3.1 We may require you to have the Gross Rooms Revenue, fees or other monies due to us computed and certified as accurate by a certified public accountant. During the Term and for two (2) years thereafter, we and our authorized agents have the right to verify Operational Information required under this Agreement by requesting, receiving, inspecting and auditing, at all reasonable times, any and all records referred to above wherever they may be located (or elsewhere if we request). 10.3.2 If any inspection or audit reveals that you understated or underpaid any payment due to us, you will promptly pay to us the deficiency plus interest from the date each payment was due until paid at the interest rate set forth in Section 17.15 of this Agreement. 10.3.3 If the audit or inspection reveals that the underpayment is willful, or is for five percent (5%) or more of the total amount owed for the period being inspected, you will also reimburse us for all inspection and audit costs, including reasonable travel, lodging, meals, salaries and other expenses of the inspecting or auditing personnel. Our acceptance of your payment of any deficiency will not waive any rights we may have as a result of your breach, including our right to terminate this Agreement. If the audit discloses an overpayment, we will credit this overpayment against your future payments due under this Agreement, without interest, or, if no future payments are due under this Agreement, we will promptly pay you the amount of the overpayment without interest. + +17 + + + + + + + + 10.4 Ownership of Information. All Information we obtain from you and all revenues we derive from such Information will be our property and Proprietary Information that we may use for any reason, including making a financial performance representation in our franchise disclosure documents. At your sole risk and responsibility, you may use Information that you acquire from third parties in connection with operating the Hotel, such as Personal Information, at any time during or after the Term, to the extent that your use is permitted by Law. 10.5 Privacy and Data Protection. You will: 10.5.1 comply with all applicable Privacy Laws; 10.5.2 comply with all Standards that relate to Privacy Laws and the privacy and security of Personal Information; 10.5.3 refrain from any action or inaction that could cause us or the Entities to breach any Privacy Laws; 10.5.4 do and execute, or arrange to be done and executed, each act, document and thing we deem necessary in our business judgment to keep us and the Entities in compliance with the Privacy Laws; and 10.5.5 immediately report to us the theft or loss of Personal Information (other than the Personal Information of your own officers, directors, shareholders, employees or service providers). 11.0 CONDEMNATION AND CASUALTY 11.1 Condemnation. You must immediately inform us of any proposed taking of any portion of the Hotel by eminent domain. If, in our business judgment, the taking is significant enough to render the continued operation of the Hotel in accordance with the Standards and guest expectations impractical, then we may terminate this Agreement on written notice to you and you will not pay us Liquidated Damages. If such taking, in our business judgment, does not require the termination of this Agreement, then you will make all necessary modifications to make the Hotel conform to its condition, character and appearance immediately before such taking, according to Plans and Designs approved by us. You will take all measures to ensure that the resumption of normal operations at the Hotel is not unreasonably delayed. 11.2 Casualty. 11.2.1 You must immediately inform us if the Hotel is damaged by fire or other casualty. If the damage or repair requires closing the Hotel, you may choose to repair or rebuild the Hotel according to the Standards, provided you: begin reconstruction within six (6) months after closing and reopen the Hotel for continuous business operations as soon as practicable (but in any event no later than eighteen (18) months after the closing of the Hotel) and give us at least thirty (30) days notice of the projected date of reopening. If you cannot begin or complete reconstruction within these time frames, you may request extension approval from us in writing, describing the status of the project and the reason for the requested extension, which we will consider in accordance with our standard business practice. Once the Hotel is closed, you will not promote the Hotel as a System Hotel or otherwise identify the Hotel using any of the Marks without our prior written consent. + +18 + + + + + + + + 11.2.2 You and we each have the right to terminate this Agreement if you elect not to repair or rebuild the Hotel as set forth above in Subsection 11.2.1, provided the terminating party gives the other party sixty (60) days written notice. We will not require you to pay Liquidated Damages unless you or one of your Affiliates own and/or operate a hotel at the Hotel Site under a lease, license or franchise from a Competitor within three (3) years of the termination date. 11.3 No Extensions of Term. Nothing in this Section 11 will extend the Term. 12.0 NOTICE OF INTENT TO MARKET Except in the case of a Transfer governed by Subsection 13.2.1 or 13.2.2 of this Agreement, if you or a Controlling Affiliate want to Transfer any Equity Interest, you must give us written notice, concurrently with beginning your marketing efforts. 13.0 TRANSFERS 13.1 Our Transfer. 13.1.1 We may assign or Transfer this Agreement or any of our rights, duties, or assets under this Agreement, by operation of law or otherwise, to any person or legal entity without your consent, provided that any such person or legal entity shall be required to assume all of our obligations to permit you to operate the Hotel under the Brand after such assignment. Any of the Entities may transfer, sell, dispose of, or otherwise convey, their ownership rights in us or any of our Affiliates, by operation of law or otherwise, including by public offering, to any person or legal entity without your consent. 13.1.2 If we assign this Agreement to a third party who expressly assumes our obligations under this Agreement, we will no longer have any performance or other obligations to you under this Agreement and your right to use any programs, rights or services provided to you by us or our Affiliates under this Agreement will terminate. 13.2 Your Transfer. You understand and acknowledge that the rights and duties in this Agreement are personal to you and that we are entering into this Agreement in reliance on your business skill, financial capacity, and the personal character of you, your officers, directors, partners, members, shareholders or trustees. A Transfer by you of any Equity Interest, or this Agreement, or any of your rights or obligations under this Agreement, or a Transfer by an Equity Owner is prohibited other than as expressly permitted herein. 13.2.1 Permitted Transfers That Do Not Require Notice or Consent. The following Transfers are permitted without giving notice or obtaining our consent if the Permitted Transfer does not result in a change in Control of the Franchisee, the Hotel or the Hotel Site and you meet the requirements set forth below. 13.2.1.1 Privately Held Equity Interests: Less than 25% Change/No Change of Control. An Equity Interest that is not publicly traded may be Transferred if, immediately after the transaction, the transferee Equity Owner will own less than twenty-five percent (25%) of the Equity Interest. 13.2.1.2 Publicly Traded Equity Interests. A Publicly Traded Equity interest may be Transferred. + +19 + + + + + + + + 13.2.2 Permitted Transfers That Require Notice and Consent. We will permit you or any Equity Owner named in the Addendum as of the Effective Date (or any transferee Equity Owner we subsequently approve) to engage in the Permitted Transfers set forth below if any such Permitted Transfer does not result in a change of Control of the Franchisee, the Hotel or the Hotel Site and: (a) the proposed transferee is not a Sanctioned Person or a Competitor; (b) you give us at least sixty (60) days' advance written notice of the proposed Permitted Transfer (including the identity and contact information for any proposed transferee and any other information we may require in order to review the proposed Permitted Transfer); (c) you pay to us a nonrefundable processing fee of Five Thousand Dollars ($5,000) with the Permitted Transfer request; (d) you follow our then-current procedure for processing Permitted Transfers; and (e) you execute any documents required by us for processing Permitted Transfers. If a Permitted Transfer listed in Subsection 13.2.2 otherwise qualifies as a Permitted Transfer without notice or consent under Subsection 13.2.1, the provisions of Subsection 13.2.1 will control. 13.2.2.1 Affiliate Transfer. You or any Equity Owner may Transfer an Equity Interest or this Agreement to an Affiliate. 13.2.2,2 Transfers to a Family Member or Trust, If you or any Equity Owner as of the Effective Date are a natural person, you and such Equity Owner may Transfer an Equity Interest or this Agreement to an immediate family member (i.e., spouse, children, parents, siblings) or to a trust for your benefit or the benefit of the Equity Owner or the Equity Owner's immediate family members. 13.2.2.3 Transfer On Death. On the death of Franchisee or an Equity Owner who is a natural person, this Agreement or the Equity Interest of the deceased Equity Owner may Transfer in accordance with such person's will or, if such person dies intestate, in accordance with laws of intestacy governing the distribution of such person's estate, provided that: (i) the transfer on death is to an immediate family member or to a legal entity formed by such family member(s); and (ii) within one (1) year after the death, such family member(s) or entity meet all of our then-current requirements for an approved Transferee. 13.2.2.4 Privately Held Equity Interests: 25% or Greater Change/No Change of Control. You or any Equity Owner as of the Effective Date (or any transferee Equity Owner we subsequently approve) may Transfer an Equity Interest in Franchisee even though, after the completion of such Transfer, twenty-five percent (25%) or more of the Equity Interests in Franchisee will have changed hands since the Effective Date of this Agreement. 13.2.3 Change of Ownership Transfer. Any proposed Transfer that is not described in Subsection 13.2.1 or 13.2,2 is a Change of Ownership Transfer. We will have sixty (60) days from our receipt of the completed and signed franchise application to consent or withhold our consent to any proposed Change of Ownership Transfer. You consent to our communication with any party we deem necessary about the Hotel in order for us to evaluate the proposed Change of Ownership Transfer. Our consent to the Change of Ownership Transfer is subject to the following conditions, all of which must be satisfied at or before the date of closing the Change of Ownership Transfer ("Closing"): 13.2.3.1 the Transferee submits a Change of Ownership Application, pays our then current franchise application fee and any PIP Fee, executes our then-current form of new franchise agreement and all ancillary forms, including a guaranty from a third-party acceptable to us, if required; 13.2.3.2 you are not in default of this Agreement or any other agreements with us or our Affiliates; 13.2.3.3 you or the Transferee pay all amounts due to us and the Entities through the date of the Closing; 13.2.3.4 you execute our then-current form of voluntary termination agreement, which may include a general release, covering termination of this Agreement; 13.2.3.5 you conclude to our satisfaction, or provide adequate security for, any suit, action, or proceeding pending or threatened against you, us or any Entity with respect to the Hotel, which may result in liability on the part of us or any Entity; + +20 + + + + + + + + 13.2.3.6 you, the Transferee and/or transferee Equity Owner(s) submit to us all information related to the Transfer that we require, including applications; and 13.2.3.7 the Transferee meets our then-current business requirements for new franchisees and is neither a Sanctioned Person nor a Competitor. 13.2.4 Public Offering or Private Placement. 13.2.4.1 Any offering by you of Securities requires our review if you use the Marks, or refer to us or this Agreement in your offering. All materials required by any Law for the offer or sale of those Securities must be submitted to us for review at least sixty (60) days before the date you distribute those materials or fife them with any governmental agency, including any materials to be used in any offering exempt from registration under any securities laws. 13.2.4.2 You must submit to us a non-refundable Five Thousand Dollar ($5,000) processing fee with the offering documents and pay any additional costs we may incur in reviewing your documents, including reasonable attorneys' fees. Except as legally required to describe the Hotel in the offering materials, you may not use any of the Marks or otherwise imply our participation or that of Hilton Worldwide or any other Entity in or endorsement of any Securities or any Securities offering. 13.2.4.3 We have the right to approve any description of this Agreement or of your relationship with us, or any use of the Marks, contained in any prospectus, offering memorandum or other communications or materials you use in the sale or offer of any Securities. Our review of these documents will not in any way be considered our agreement with any statements contained in those documents, including any projections, or our acknowledgment or agreement that the documents comply with any Laws. 13.2.4.4 You may not sell any Securities unless you clearly disclose to all purchasers and offerees that: (i) neither we, nor any Entity, nor any of our or their respective officers, directors, agents or employees, will in any way be deemed an issuer or underwriter of the Securities, as those terms are defined in applicable securities laws; and (ii) we, the Entities, and our respective officers, directors, agents and employees have not assumed and will not have any liability or responsibility for any financial statements, prospectuses or other financial information contained in any prospectus or similar written or oral communication. 13.2.4.5 You must indemnify, defend and hold the Indemnified Parties free and harmless of and from any and all liabilities, costs, damages, claims or expenses arising out of or related to the safe or offer of any of your Securities to the same extent as provided in Subsection 15.1 of this Agreement. 13.2.5 Mortgages and Pledges to Lending Institutions. 13.2.5.1 You or an Equity Owner may mortgage or pledge the Hotel or an Equity Interest to a lender that finances the acquisition, development or operation of the Hotel, without notifying us or obtaining our consent, provided that: (i) you or the applicable Equity Owner are the sole borrower; and (ii) the loan is not secured by any other hotels or other collateral. 13.2.5.2 You must notify us, in writing, before incurring other proposed indebtedness that involves a mortgage or pledge of the Hotel or an Equity Interest, or a collateral assignment of this Agreement, so that we can evaluate the structure to determine whether any special agreements and/or assurances from the lender, the Franchisee and/or its Equity Owners will be required including a "lender comfort letter" or a loan related guaranty, in a form satisfactory to us. We may charge a fee for our review of a proposed mortgage or pledge and for the processing of a lender comfort letter. + +21 + + + + + + + + 13.2.6 Commercial Leases. You may lease or sublease commercial space in the Hotel, or enter into concession arrangements for operations in connection with the Hotel, in the ordinary course of business, subject to our right to review and approve the nature of the proposed business and the proposed brand and concept, all in keeping with our Standards for System Hotels. 14.0 TERMINATION 14.1 Termination with Opportunity to Cure. We may terminate this Agreement by written notice to you and opportunity to cure at any time before its expiration on any of the following grounds: 14.1.1 You fail to pay us any sums due and owing to us or the Entities under this Agreement within the cure period set forth in the notice, which shall not be less than ten (10) days; 14.1.2 You fail to begin or complete the Hotel Work by the relevant dates set forth in the Addendum or fail to open the hotel on the Opening Date, and do not cure that default within the cure period set forth in the notice, which shall not be less than ten (10) days; 14.1.3 You do not purchase or maintain insurance required by this Agreement or do not reimburse us for our purchase of insurance on your behalf within the cure period set forth in the notice, which shall not be less than ten (10) days; or 14.1.4 You fail to comply with any other provision of this Agreement, the Manual or any Standard and do not cure that default within the cure period set forth in the notice, which shall not be less than thirty (30) days. 14.2 Immediate Termination by Us. We may immediately terminate this Agreement on notice to you and without any opportunity to cure the default if: 14.2.1 after curing any material breach of this Agreement or the Standards, you engage in the same non-compliance within any consecutive twenty-four (24) month period, whether or not the non-compliance is corrected after notice, which pattern of non-compliance in and of itself will be deemed material; 14.2.2 you receive three (3) notices of material default in any twelve (12) month period, even if the defaults have been cured; 14.2.3 you fail to pay debts as they become due or admit in writing your inability to pay your debts or you make a general assignment for the benefit of your creditors; 14.2.4 you have an order entered against you appointing a receiver for the Hotel or a substantial part of your or the Hotel's assets or you file a voluntary petition in bankruptcy or any pleading seeking any reorganization, liquidation, or dissolution under any law, or you admit or fail to contest the material allegations of any such pleading filed against you or the Hotel, and the action results in the entry of an order for relief against you under the Bankruptcy Code, the adjudication of you as insolvent, or the abatement of the claims of creditors of you or the Hotel under any law; 14.2.5 you or your Guarantor lose possession or the right to possession of all or a significant part of the Hotel or Hotel Site for any reason other than those described in Section 11; 14.2.6 you fail to operate the Hotel for five (5) consecutive days, unless the failure to operate is due to fire, flood, earthquake or similar causes beyond your control, provided that you have taken reasonable steps to minimize the impact of such events; 14.2.7 you contest in any court or proceeding our ownership of the System or any part of the System or the validity of any of the Marks; + +22 + + + + + + + + 14.2.8 you or any Equity Owner with a controlling Equity Interest are or have been convicted of a felony or any other offense or conduct, if we determine in our business judgment it is likely to adversely reflect on or affect the Hotel, the System, us and/or any Entity; 14.2.9 you conceal revenues, maintain false books and records of accounts, submit false reports or information to us or otherwise attempt to defraud us; 14.2.10 you, your Affiliate or a Guarantor become a Competitor except as otherwise permitted by Subsection 5.1.15; 14.2.11 you Transfer any interest in yourself, this Agreement, the Hotel or the Hotel Site, other than in compliance with Section 13 and its subparts; 14.2.12 you, your Affiliate or a Guarantor become a Sanctioned Person or are owned or controlled by a Sanctioned Person or fail to comply with the provisions of Subsection 17.13; 14.2.13 information is disclosed involving you or your Affiliates, which, in our business judgment, is likely to adversely reflect on or affect in any manner, any gaming licenses or permits held by the Entities or the then-current stature of any of the Entities with any gaming commission, board, or similar governmental or regulatory agency, or the reputation or business of any of the Entities; 14.2.14 any Guarantor breaches its guaranty to us; or 14.2.15 a threat or danger to public health or safety results from the construction, maintenance, or operation of the Hotel. 14.3 Suspension Interim Remedies. If you are in default of'this Agreement, we may elect to impose an Interim Remedy, including the suspension of our obligations under this Agreement and/or our or the Entities' obligations under any other of Your Agreements. 14.3.1 We may suspend the Hotel from the Reservation Service and any reservation and/or website services provided through or by us. We may remove the listing of the Hotel from any directories or advertising we publish. If we suspend the Hotel from the Reservation Service, we may divert reservations previously made for the Hotel to other System Hotels or Network Hotels. 14.3.2 We may disable all or any part of the software provided to you under Your Agreements and/or may suspend any one or more of the information technology and/or network services that we provide or support under Your Agreements. 14.3.3 We may charge you for costs related to suspending or disabling your right to use any software systems or technology we provided to you, together with intervention or administration fees as set forth in the Standards. 14.3.4 You agree that our exercise of the right to elect Interim Remedies will not result in actual or constructive termination or abandonment of this Agreement and that our decision to elect Interim Remedies is in addition to, and apart from, any other right or remedy we may have in this Agreement. If we exercise the right to elect Interim Remedies, the exercise will not be a waiver of any breach by you of any term, covenant or condition of this Agreement. You will not be entitled to any compensation, including repayment, reimbursement, refund or offsets, for any fees, charges, expenses or losses you may directly or indirectly incur by reason of our exercise and/or withdrawal of any Interim Remedy. + +23 + + + + + + + + 14.4 Liquidated Damages on Termination. 14.4.1 Calculation of Liquidated Damages. You acknowledge and agree that the premature termination of this Agreement will cause substantial damage to us. You agree that Liquidated Damages are not a penalty, but represent a reasonable estimate of the minimum just and fair compensation for the damages we will suffer as the result of your failure to operate the Hotel for the Term. If this Agreement terminates before the Expiration Date, you will pay us Liquidated Damages as follows: 14.4.1.1 If termination occurs before you begin the Hotel Work and before the Opening Date, and you or any Guarantor (or your or any Guarantor's Affiliates) directly or indirectly, enter into a franchise, license, management, lease and/or other similar agreement for or begin construction or commence operation of a hotel, motel, inn, or similar facility at the Hotel Site under a Competitor Brand within one (1) year after termination, then you will pay us Liquidated Damages in an amount equal to $3,600 multiplied by the number of approved Guest Rooms at the Hotel. 14.4.1.2 If termination occurs after you begin the Hotel Work but before the Opening Date, you will pay us Liquidated Damages in an amount equal to $3,600 multiplied by the number of approved Guest Rooms at the Hotel, unless your failure to complete the Hotel Work was the result of Force Majeure. 14.4.1.3 If termination occurs after the Effective Date but before the second anniversary of the Opening Date, you will pay us Liquidated Damages in an amount equal to $3,600 multiplied by the number of approved Guest Rooms at the Hotel. 14.4.1.4 If termination occurs after the second anniversary of the Opening Date but before the final five (5) calendar years of the Term, you will pay us Liquidated Damages in an amount calculated by dividing the sum of the Monthly Royalty Fees due to us under this Agreement for the prior twenty-four (24) month period by twenty-four (24) and then multiplying the resulting sum by sixty (60). 14.4.1.5 If there are less than sixty (60) months remaining in the Term on the date of termination, you will pay us Liquidated Damages in an amount calculated by dividing the sum of the Monthly Royalty Fees due to us under this Agreement for the prior twenty-four (24) month period by twenty-four (24) and then multiplying the resulting sum by the number of months remaining in the Term. 14.4.2 Payment of Liquidated Damages. Payment of Liquidated Damages is due thirty (30) days following termination of this Agreement or on demand. 14.5 Actual Damages Under Special Circumstances. You acknowledge that the Liquidated Damages described in Subsection 14.4 may be inadequate to compensate us for additional harm we may suffer, by reason of greater difficulty in re-entering the market, competitive damage to the System or the Network, damage to goodwill of the Marks, and other similar harm, under the following circumstances: 14.5.1 within twelve (12) months of each other, five (5) or more franchise agreements for the Brand between yourself (or any of your Affiliates) and us (or any of our Affiliates) terminate before their expiration date as a result of a breach by you or your Affiliate; or 14.5.2 this Agreement terminates due to an unapproved Transfer either to a (i) Competitor or (ii) buyer that converts the Hotel to a Competing Brand within two (2) years from the date this Agreement terminates. 14.5.3 In the circumstances set forth in Subsection 14.5.1 and 14.5.2, we reserve the right to seek actual damages in lieu of Liquidated Damages. 14.6 Your Obligations on Termination or Expiration. On termination or expiration of this Agreement, you will: 14.6.1 immediately pay all sums due and owing to us or any of the Entities, including any expenses incurred by us in obtaining injunctive relief for the enforcement of this Agreement; + +24 + + + + + + + + 14.6.2 immediately cease operating the Hotel as a System Hotel and cease using the System; 14.6.3 immediately cease using the Marks, the Trade Name, and any confusingly similar names, marks, trade dress systems, insignia, symbols, or other rights, procedures, and methods. You will deliver all goods and materials containing the Marks to us and we will have the sole and exclusive use of any items containing the Marks. You will immediately make any specified changes to the location as we may reasonably require for this purpose, which will include removal of the signs, custom decorations, and promotional materials; 14.6.4 immediately cease representing yourself as then or formerly a System Hotel or affiliated with the Brand or the Network; 14.6.5 immediately return all copies of the Manual and any other Proprietary Information to us; 14.6.6 immediately cancel all assumed name or equivalent registrations relating to your use of any Mark, notify the telephone company and all listing agencies and directory publishers including Internet domain name granting authorities, Internet service providers, global distribution systems, and web search engines of the termination or expiration of your right to use the Marks, the Trade Name, and any telephone number, any classified or other telephone directory listings, Internet domain names, uniform resource locators, website names, electronic mail addresses and search engine metatags and keywords associated with the Hotel, and authorize their transfer to us; and 14.6.7 irrevocably assign and transfer to us (or to our designee) all of your right, title and interest in any domain name listings and registrations that contain any reference to our Marks, System, Network or Brand; notify the applicable domain name registrars of the termination of your right to use any domain name or Sites associated with the Marks or the Brand; and authorize and instruct the cancellation of the domain name, or transfer of the domain name to us (or our designee), as we specify. You will also delete all references to our Marks, System, Network or Brand from any Sites you own, maintain or operate beyond the expiration or termination of this Agreement. 15.0 INDEMNITY 15.1 Beginning on the Effective Date, you must indemnify the Indemnified Parties against, and hold them harmless from, all losses, costs, liabilities, damages, claims, and expenses, including reasonable attorneys' fees, expert fees, costs and other expenses of litigation arising out of or resulting from: 15.1.1 any breach by you of this Agreement, the Manual or the Standards; 15.1.2 any act or omission of you or your officers, employees, Affiliates, associates or agents in any way arising out of or relating to this Agreement; 15.1.3 any claimed occurrence at the Hotel including personal injury, death or property damage; 15.1.4 your alleged or actual infringement or violation of any patent, Mark or copyright or other proprietary right owned or controlled by third parties; 15.1.5 your alleged or actual violation or breach of any contract (including any group sales agreement for the System), any Law, or any industry standard; 15.1.6 any business conducted by you or a third party in, on or about the Hotel or Hotel Site and + +25 + + + + + + + + 15.1.7 your failure to comply with Subsection 17.13, including a breach of the representations set forth therein. 15.2 You do not have to indemnify an Indemnified Party to the extent damages otherwise covered under this Section 15 are adjudged by a final, non-appealable judgment of a court of competent jurisdiction to have been solely the result of the gross negligence or willful misconduct of that Indemnified Party, and not any of the acts, errors, omissions, negligence or misconduct of you or anyone related to you or the Hotel. You may not rely on this exception to your indemnity obligation if the claims were asserted against us or any other Indemnified Party on the basis of theories of imputed or secondary liability, such as vicarious liability, agency, or apparent agency, or our failure to compel you to comply with the provisions of this Agreement, including compliance with Standards, Laws or other requirements. 15.3 You will give us written notice of any action, suit, proceeding, claim, demand, inquiry or investigation involving an Indemnified Party within five (5) days of your knowledge of it. At our election, you will defend us and/or the Indemnified Parties against the same or we may elect to assume (but under no circumstance will we be obligated to undertake) the defense and/or settlement of the action, suit, proceeding, claim, demand, inquiry or investigation at your expense and risk. 15.4 If we think our respective interests conflict, we may obtain separate counsel of our choice. This will not diminish your obligation to indemnify the Indemnified Parties and to hold them harmless. You will reimburse the Indemnified Parties on demand for all expenses, including reasonable attorneys' fees, expert fees, costs and other expenses of litigation, the Indemnified Parties incur to protect themselves or to remedy your defaults. The Indemnified Parties will not be required to seek recovery from third parties or otherwise mitigate their losses to maintain a claim against you, and their failure to do so will not reduce the amounts recoverable from you by the Indemnified Parties. 15.6 Your obligations under this Section 15 will survive expiration or termination of this Agreement. 16.0 RELATIONSHIP OF THE PARTIES 16.1 No Agency Relationship. You are an independent contractor. Neither Party is the legal representative or agent of the other Party nor has the power to obligate the other Party for any purpose. You acknowledge that we do not supervise or direct your daily affairs and that you have exclusive control over your daily affairs. You expressly acknowledge that the Parties have a business relationship based entirely on, and defined by, the express provisions of this Agreement and that no partnership, joint venture, agency, fiduciary or employment relationship is intended or created by reason of this Agreement. 16.2 Notices to Public Concerning Your Independent Status. All contracts for the Hotel's operations and services at the Hotel will be in your name or in the name of your Management Company. You will not enter into or sign any contracts in our name or any Entity's name or using the Marks or any acronyms or variations of the Marks. You will disclose in all dealings with the public, suppliers and third parties that you are an independent entity and that we have no liability for your debts. 17.0 MISCELLANEOUS 17.1 Severability and Interpretation. 17.1.1 if any provision of this Agreement is held to be unenforceable, void or voidable, that provision will be ineffective only to the extent of the prohibition, without in any way invalidating or affecting the remaining provisions of this Agreement, and all remaining provisions will continue in effect, unless the unenforceability of the provision frustrates the underlying purpose of this Agreement. If any provision of this Agreement is held to be unenforceable due to its scope, but may be made enforceable by limiting its scope, the provision will be considered amended to the minimum extent necessary to make it enforceable. + +26 + + + + + + + + 17,1.2 This Agreement will be interpreted without interpreting any provision in favor of or against either Party by reason of the drafting of the provision, or either of our positions relative to the other. 17.1.3 Any covenant, term or provision of this Agreement that provides for continuing obligations after the expiration or termination of this Agreement will survive any expiration or termination. 17.2 Governing Law, Jurisdiction and Venue. 17.2.1 The Parties agree that, except to the extent governed by the United States Trademark Act of 1946 (Lanham Act; 15 U.S.C. lj 1050 et seq.), as amended, this Agreement will be governed by the laws of the State of New York without recourse to New York choice of law or conflicts of law principles. Nothing in this Section is intended to invoke the application of any franchise, business opportunity, antitrust, "implied covenant," unfair competition, fiduciary or any other doctrine of law of the State of New York or any other state that would not otherwise apply absent this Subsection 17.2.1. 17.2.2 The Parties agree that any action brought pursuant to this Agreement or the relationship between them must be brought in the U.S. District Court for the Eastern District of Virginia, in Alexandria, Virginia, or if that court lacks subject matter jurisdiction, then in a court of competent jurisdiction whose jurisdiction includes either Fairfax County, Virginia or New York, New York, or in the county and state where the Hotel is located. You consent to personal jurisdiction and venue in each of these jurisdictions and waive, and agree not to assert, move or otherwise claim that the venue in any of these jurisdictions is for any reason improper, inconvenient, prejudicial or otherwise inappropriate. 17.3 Exclusive Benefit. This Agreement is exclusively for our and your benefit, and none of the obligations of you or us in this Agreement will run to, or be enforceable by, any other party (except for any rights we assign or delegate to one of the Entities or covenants in favor of the Entities, which rights and covenants will run to and be enforceable by the Entities or their successors and assigns) or give rise to liability to a third party, except as otherwise specifically set forth in this Agreement. 17.4 Entire Agreement. This Agreement and all of its attachments, documents, schedules, exhibits, and any other information specifically incorporated into this Agreement by reference (including any representations in any franchise disclosure document that we provided to you for the Brand in connection with the offer of this License) will be construed together as the entire agreement between you and us with respect to the Hotel and any other aspect of our relationship and will supersede and cancel any prior and/or contemporaneous discussions or writings between you and us. 17.5 Amendment and Waiver. 17.5.1 No change, termination, or attempted waiver or cancellation of any provision of this Agreement will bind us unless it is in writing, specifically designated as an amendment or waiver, and signed by one of our officers. We may condition our agreement to any amendment or waiver on receiving from you, in a form satisfactory to us, an estoppel and general release of claims that you may have against us, the Entities, and related parties. 17.5.2 No failure by us or by any of the Entities to exercise any power given us under this Agreement or to insist on strict compliance by you with any of your obligations, and no custom or practice at variance with the terms of this Agreement, will be considered a waiver of our or any Entity's right to demand exact compliance with the terms of this Agreement. 17.6 Consent; Business Judgment. 17.6.1 Wherever our consent or approval is required in this Agreement, unless the provision specifically indicates otherwise, we have the right to withhold our approval at our option, in our business judgment, taking into consideration our assessment of the long-term interests of the Systemoverall. We may withhold any and all consents or approvals required by this Agreement if you are in default or breach of this Agreement. Our approvals and consents will not be effective unless given in writing and signed by one of our duly authorized representatives. + +27 + + + + + + + + 17.6.2 You agree not to make a claim for money damages based on any allegation that we have unreasonably withheld or delayed any consent or approval to a proposed act by you under the terms of this Agreement. You also may not claim damages by way of set- off, counterclaim or defense for our withholding of consent. Your sole remedy for the claim will be an action or proceeding to enforce the provisions of this Agreement by specific performance or by declaratory judgment. 17.7 Notices. Notices under this Agreement must be in writing and must be delivered in person, by prepaid overnight commercial delivery service, or by prepaid overnight mail, registered or certified, with return-receipt requested. Notices to us must be sent to 7930 Jones Branch Drive, Suite 1100, McLean, VA 22102, ATTN: General Counsel. We will send notices to your address set forth in the Addendum. If you want to change the name or address for notice to you, you must do so in writing, signed by you or your duly authorized representative, designating a single address for notice, which may not be a P.O. Box, in compliance with this Subsection. Notice will be deemed effective on the earlier of: 1) receipt or first refusal of delivery; 2) one (1) day after posting if sent via overnight commercial delivery service or overnight United States Mail; or 3) three (3) days after placement in the United States mail if overnight delivery is not available to the notice address. 17.8 General Release. With the exception of claims related to representations contained in the franchise disclosure document for the Brand, you, on your own behalf and on behalf of, as applicable, your officers, directors, managers, employees, heirs, administrators, executors, agents and representatives and their respective successors and assigns hereby release, remise, acquit and forever discharge us and the Entities and our and their respective officers, directors, employees, managers, agents, representatives and their respective successors and assigns from any and all actions, claims, causes of action, suits, rights, debts, liabilities, accounts, agreements, covenants, contracts, promises, warranties, judgments, executions, demands, damages, costs and expenses, whether known or unknown at this time, of any kind or nature, absolute or contingent, existing at law or in equity, on account of any matter, cause or thing whatsoever that has happened, developed or occurred relating to this Agreement or the relationship between you and us. This release will survive the termination of this Agreement. 17.9 Remedies Cumulative. The remedies provided in this Agreement are cumulative. These remedies are not exclusive of any other remedies that you or we may be entitled to in case of any breach or threatened breach of the terms and provisions of this Agreement. 17.10 Economic Conditions Not a Defense. Neither general economic downturn or conditions nor your own financial inability to perform the terms of this Agreement will be a defense to an action by us or one of the Entities for your breach of this Agreement. 17.11 Representations and Warranties. You warrant, represent and agree that all statements in your franchise application in anticipation of the execution of this Agreement, and all other documents and information submitted to us by you or on your behalf are true, correct and complete as of the date of this Agreement. You further represent and warrant to us that: 17.11.1 you have independently investigated the risks of operating the Hotel under the Brand, including current and potential market conditions and competitive factors and risks, and have made an independent evaluation of all such matters and reviewed our franchise disclosure document, if applicable; 17.11.2 neither we nor our representatives have made any promises, representations or agreements other than those provided in the Agreement or in our franchise disclosure document provided to you in connection with the offer of this Agreement, if applicable, and you acknowledge that you are not relying on any promises, representations or agreements about us or the franchise not expressly contained in this Agreement in making your decision to sign this Agreement; + +28 + + + + + + + + 17.11.3 you have the full legal power authority and legal right to enter into this Agreement; 17.11.4 this Agreement constitutes a legal, valid and binding obligation and your entry into, performance and observation of this Agreement will not constitute a breach or default of any agreement to which you are a party or of any Law; 17.11.5 if you are a corporation, limited liability company, or other entity, you are, and throughout the Term will be, duly formed and validly existing, in good standing in the state in which you are organized, and are and will be authorized to do business in the state in which the Hotel is located; and 17.11.6 no Equity Interest has been issued, converted to, or is held as, bearer shares or any other form of ownership, for which there is no traceable record of the identity of the legal and beneficial owner of such Equity interest. You hereby indemnify and hold us harmless from any breach of these representations and warranties. These warranties and representations will survive the termination of this Agreement. 17.12 Counterparts. This Agreement may be signed in counterparts, each of which will be considered an original. 17.13 Sanctioned Persons and Anti-bribery Representations and Warranties. 17.13.1 You represent, warrant and covenant to us and the Entities, on a continuing basis, that: 17.13.1.1 you (including your directors and officers, senior management and shareholders (or other Persons) having a controlling interest in you), and any Controlling Affiliate of the Hotel or the Hotel Site are not, and are not owned or controlled by, or acting on behalf of, a Sanctioned Person or, to your actual knowledge, otherwise the target of Trade Restrictions; 17.13.1.2 you have not and will not obtain, receive, transfer or provide any funds, property, debt, equity, or other financing related to this Agreement and the Hotel or Hotel Site to/from a Person that qualifies as a Sanctioned Person or, to your actual or constructive knowledge, is otherwise the target of any applicable Trade Restrictions; 17.13.1.3 you are familiar with the provisions of applicable Anti-Corruption Laws and shall comply with applicable Anti-Corruption Laws in performance of your respective obligations under or in connection with this Agreement; 17.13.1.4 any funds received or paid in connection with entry into or performance of this Agreement have not been and will not be derived from or commingled with the proceeds of any activities that are proscribed and punishable under the criminal laws of the United States, and that you are not engaging in this transaction in furtherance of a criminal act, including acts in violation of applicable Anti- Corruption Laws; 17.13.1.5 in preparation for and in entering into this Agreement, you have not made any Improper Payment or engaged in any acts or transactions otherwise in violation of any applicable Anti-Corruption Laws, and, in connection with this Agreement or the performance of your obligations under this Agreement, you will not directly or indirectly make, offer to make, or authorize any Improper Payment or engage in any acts or transactions otherwise in violation of any applicable Anti-Corruption Laws; + +29 + + + + + + + + 17.13.1.6 except as otherwise disclosed in writing to us, neither you, nor any of your direct or indirect shareholders (including legal or beneficial shareholders), officers, directors, employees, agents or other Persons designated by you to act on your behalf or receive any benefit under this Agreement, is a Government Official. Furthermore, no Government Official has or will have any existing or inchoate legal or beneficial interest in this Agreement or any payments to be made under this Agreement. You will shall notify us immediately in writing in the event of a change in the Government Official status of any such persons; 17.13.1.7 any statements, oral, written, electronic or otherwise, that you submit to us or to any third party in connection with the representations, warranties, and covenants described in this Subsection 17.13 are truthful and accurate and do not contain any materially false or inaccurate statements; 17.13.1.8 you will make reasonable efforts to assure that your respective appointed agents in relation to this Agreement comply in all material respects with the representations, warranties, and covenants described in this Subsection 17.13; and 17.13.2 You will notify us in writing immediately on the occurrence of any event which would render the foregoing representations and warranties of this Subsection 17.13 incorrect. 17.14 Attorneys' Fees and Costs. If either Party is required to employ legal counsel or to incur other expenses to enforce any provision of this Agreement or defend any claim by the other, then the prevailing party in any resulting dispute will be entitled to recover from the non- prevailing party the amount of all reasonable fees of attorneys and experts, court costs, and all other expenses incurred in enforcing such obligation or in defending against such claim, demand, action, or proceeding. 17.15 Interest. Any sum owed to us or the Entities by you or paid by us or the Entities on your behalf will bear interest from the date due until paid by you at the rate of eighteen percent (18%) per annum or, if lower, the maximum lawful rate. 17.16 Successors and Assigns. The terms and provisions of this Agreement will inure to the benefit of and be binding on the permitted successors and assigns of the Parties. 17.17 Our Delegation of Rights and Responsibility. In addition to the rights granted to us in Section 4 and Subsection 13.1 of this Agreement, we reserve the right to delegate to one or more of the Entities at any time, any and all of our rights, obligations or requirements under this Agreement, and to require that you submit any relevant materials and documents otherwise requiring approval by us under this Agreement to such Entity, in which case approval by such Entity will be conclusively deemed to be approval by us. During the period of such delegation or designation, any act or direction by such Entity with respect to this Agreement will be deemed the act or direction of us. We may revoke any such delegation or designation at any time. You acknowledge and agree that such delegation may result in one or more of the Entities which operate, license, or otherwise support brands other than the Brand, exercising or performing on our behalf any or all rights, obligations or requirements under this Agreement or performing shared services on our behalf. 18.0 WAIVER OF JURY TRIAL AND PUNITIVE DAMAGES 18.1 IF EITHER PARTY INITIATES LITIGATION INVOLVING THIS AGREEMENT OR ANY ASPECT OF THE RELATIONSHIP BETWEEN THE PARTIES (EVEN IF OTHER PARTIES OR OTHER CLAIMS ARE INCLUDED IN SUCH LITIGATION), ALL THE PARTIES WAIVE THEIR RIGHT TO A TRIAL BY JURY. 18.2 IN ANY DISPUTE BETWEEN THE PARTIES, ARISING OUT OF OR RELATED TO THIS AGREEMENT, ANY BREACH OF THIS AGREEMENT, OR THE RELATIONSHIP BETWEEN THE PARTIES, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, ALL PARTIES WAIVE ANY RIGHT THEY. MAY HAVE TO PUNITIVE OR EXEMPLARY DAMAGES FROM THE OTHER. + +30 + + + + + + + + NOTHING IN THIS SECTION LIMITS OUR RIGHT OR THE RIGHT OF AN INDEMNIFIED PARTY TO BE INDEMNIFIED AGAINST THE PAYMENT OF PUNITIVE OR EXEMPLARY DAMAGES TO A THIRD PARTY. THE PARTIES ACKNOWLEDGE THAT LIQUIDATED DAMAGES PAYABLE BY YOU UNDER THIS AGREEMENT (WHETHER PRE-OPENING LIQUIDATED DAMAGES OR LIQUIDATED DAMAGES FOR EARLY TERMINATION) ARE NOT PUNITIVE OR EXEMPLARY DAMAGES. 19M INTENTIONALLY DELETED + +31 + + + + + + + + ADDENDUM TO FRANCHISE AGREEMENT Effective Date: March 21, 2014 (closing date) Franchisor Name: HOMEWOOD SUITES FRANCHISE LLC, a Delaware limited liability company Brand: Homewood Suites by Hilton (excluding Home2 Suites by Hilton and any other brands or product lines containing "Suites," "Hilton" or the "by Hilton" tagline in the name) Initial Approved Hotel Name (Trade Name): Homewood Suites by Hilton Stratford Principal Mark in Brand: Homewood Franchisee Name and Address ARC Hospitality TRS Stratford, (Attn: Principal Legal Correspondent): LLC 405 Park Avenue New York, New York 10022 Attention: Jesse Galloway Phone: (212) 415-6500 E-mail: juallowavRarIcap.com Franchisor will also provide a courtesy copy of any notice, for informational purposes only, to: Crestline Hotels & Resorts, LLC 3950 University Drive, Suite 301 Fairfax, Virginia 22030 Attention: CEO and General Counsel E-mail: james.carrollcrestlinehotels.com pierre.donahueacrestlinehotels.com Any failure by Franchisor to provide a courtesy copy of any notice will not constitute a breach of this Agreement nor will it affect the validity of any notice that is provided to Franchisee pursuant to Subsection 17.7 of this Agreement. Address of Hotel: 6905 Main Street Stratford, Connecticut 06614 Initial Number of Approved Guest Rooms: 135 Plans Submission Dates: Preliminary Plans: n/a Design Development (50%) Plans and Specifications: n/a Final (100%) Plans and Specifications: n/a Construction Commencement Date: n/a + +1 + + + + + + + + Construction Work Completion Date: n/a Renovation Commencement Date: The Effective Date Renovation Work Completion Date: In accordance with the attached PIP Expiration Date: at midnight on the last day of the month fifteen (15) years from the Effective Date Monthly Fees: Monthly Program Fee: Four percent (4%) of the Hotel's Gross Rooms Revenue for the preceding calendar month. The Monthly Program Fee is subject to change by us. Any change may be established in the Standards, but the rate will not exceed the standard Monthly Program Fee as of the Effective Date plus one percent (1%) of the Hotel's Gross Rooms Revenue during the Term Monthly Royalty Fee: Five percent (5%) of the Hotel's Gross Rooms Revenue for the preceding calendar month Additional Requirements/Special Provisions: · The parties acknowledge that the Hotel is an existing System Hotel that was authorized to open under the Brand before the Effective Date. · Obligations of Prior Franchisee. You acknowledge and agree that you are directly responsible for, and will pay on demand, all fees and charges due and owing us and the Entities related to the prior franchise agreement for the Hotel if any such fees and charges remain outstanding as of or accrue after the Effective Date of this Agreement. · Section 1, Definitions of "Opening Date" and "Publicly Traded Equity Interest": Modified · Subsection 5.1.25: Modified · Subsection 8.1: Modified · Subsection 11.2.1: Modified · Subsections 14.4.1.1. and 14.4.1.3: Modified · Section 19 - Acknowledgment of Exemption: Intentionally Deleted Your Ownership Structure: See Attached Schedule 1 Ownership Structure of Affiliate Fee Owner or Lessor/Sublessor of the Hotel or Hotel Site: See Attached Schedule 2 + +2 + + + + + + + + IN WITNESS WHEREOF, the Parties have executed this Agreement, which has been entered into and is effective as of the Effective Date set forth above. FRANCHISEE: FRANCHISOR: ARC HOSPITALITY TRS STRATFORD LLC, a Delaware limited liability corn an HOMEWOOD SUITES FRANCHISE LLC, a Delaware limited liability company By: /s/ Jesse C. Galloway By: /s/ James Holthouser Name: Jesse C. Galloway Name: James Holthouser Authorized Signatory Authorized Signatory Title: Executed on: 3/14/14 Executed on: ( Lir + +1 + + + + + + + + NEW YORK ADDENDUM TO FRANCHISE AGREEMENT Notwithstanding anything to the contrary set forth in the Franchise Disclosure Document or Franchise Agreement, the following provisions will supersede and apply to all franchises offered and sold under the laws of the State of New York: 1. Subsection 9.6 of the Franchise Agreement requiring you to consent to the entry of an injunction is amended to provide that you consent to the seeking of such an injunction. 2. Subsection 17.8 is amended to provide that no release language set forth in the Franchise Agreement will relieve Franchisor or any other person, directly or indirectly, from liability imposed by the laws of the State of New York concerning franchising. FRANCHISEE: FRANCHISOR: ARC HOSPITALITY TRS STRATFORD, LLC, a Delaware limited liability company HOMEWOOD SUITES FRANCHISE LLC, a Delaware limited liability company By: Name: Title: Executed on: By: /s/ Jesse C. Galloway By: Name: Jesse C. Galloway Name: Title: Authorised Signatory Title: Authorized Signatory 3/i4/11 4 + +1 + + + + + + + + NEW YORK ADDENDUM TO FRANCHISE AGREEMENT Notwithstanding anything to the contrary set forth In the Franchise Disclosure Document or Franchise Agreement, the following provisions will supersede and apply to all franchises offered and sold under the laws of the State of New York: 1. Subsection 9.6 of the Franchise Agreement requiring you to consent to the entry of an Injunction is amended to provide that you consent to the seeking of such an injunction. 2. Subsection 17.8 is amended to provide that no release language set forth in the Franchise Agreement will relieve Franchisor or any other person, directly or indirectly, from liability imposed by the laws of the State of New York concerning franchising. FRANCHISEE: FRANCHISOR: ARC HOSPITALITY TRS STRATFORD, LLC, a Delaware limited liability company HOMEWOO a Delawar UITES FRANCHISE LLC, II. Nifty company By: By: /s/ James Holthouser Name: Name: James Holthouser Title: Title: Authorized Signatory Executed on: + + + + + + + + + + + + EXHIBIT A PRODUCT IMPROVEMENT PLAN Product Improvement Plan Prepared for: Homewood Suites by Hilton Stratford, CT (InnCotle: BORCT, Facility ED:41017) 6905 Main Street, Stratford, Connecticut, United States To be relicensed as a Homewood Suites by Hilton HOMEWOOD SUITES — maim. By Kenneth-Savage Inspection Date: Jan4-872013 FINAL PIP REVISION DATE-. Sep-08-2013 by Roy Johnson BrataManauement Approval Final PIP Approval Date : Sep-08-2013 Final FLA PIP Approval Signature: /s/ [ILLEGIBLE] PIP Contact Corinne Hight Email: Corinne.hight@hilton.com Phone: 901-374-6044 + + + + + + + + + + EXHIBIT A - PRODUCT IMPROVEMENT PLAN Property Information Open Date: 2005-02-14 Last Renovation: 2009: Corridor, Lodge and Suite carpet Parking: Asphalt surface parking lot Whirlpool: Indoor Airport Van: None Number Floors: 3 Food Service Facilities: Pantry Meeting Space: 4000 sq ft 2 Meeting Rooms Business Center: Yes Exercise Room: Yes. Precor renovated @ 235 sq ft Other Recreation: None Retail Outlets: None Guest Laundry: Yes Number Of Guest Rooms: 135 Guest Room Size Parlor: 20'7' X 14'5" Guest Room Mix: Typical King: 52 Typical DID: 59 Guest Bathroom: Size: 8"0' X 7'10 Door Width: 36' Tub Surround: acrylic one-piece unit Floor: 4" X 4" ceramic tile ' Vanity: Wood-front base with granitetop," Water Closet: Tank-type'. elongated .b6w1 with open-front seats HVAC System: 100% Makeup Air: ,.- Yes Public Areas: Packaged units Guestrooms: VrA Cs tiyithOgital thermostats Elevators: High Speed Internet: Public Areas: AT&T Meeting Space: - AT&T Guestrooms: AT&T Telephone System: + + + + + + + + + + EXHIBIT A - PRODUCT IMPROVEMENT PLAN PLEASE NOTE: Key information about the terms and effectiveness of this Property Improvement Plan is set out at the end of the document. General # Active Date Scope of Work Finish Date Notice to owner. All hotels must comply with applicable local, state, and federal accessibility requirements. This PIP does not necessarily include any work that may be required for compliance with Title 111 of the Americans with Disabilities Act (ADA). lit addition, if a Franchise Agreement or a Management Agreement for a hotel constructed for first occupancy after January 26th 1993 is executed after March 30th 2011 Hilton Worldwide will require the owmrr to conduct a self-survey (provided by Hilton Worldwide) of the hotel's guestrooms and parting for compliance with ADA Title III requirements. Any areas of non-compliance will need to be addressed within five to seven years (dependi on the item in question) as a condition of the franchise or management agreeMent. + + Per Brand Standards + + BRAND STANDARDS # Active Date Scope of Work Finish Date 1 40''113SIREISITz; 2 2502.00- Brand Standard - Take Flight - Homewood Suites `:Hilton has developed a comprehensive hotel refresh concept called 'Tat:C....Plight" A Style Guide will be available in August 2013. Take Flight impacts iteritS such as the front entrance; interior sigrrage; FT&B, lighting, flooring and wall finishesin the lobby and lodge including the front desk-4114e shop, and business tenter layout and design; outdoor- kitchen, (pool, patih.:.And gritting areas)„headboards, back lit vanity mina, and other cosmetic updates the suites. Details will be posted on wwwhiltonworldwide.conu'design as they beCpme available. A certified and approved designer or design Finn ,BUST be &;i rutted and retained. For further information, please contact RoylOhnson + + 12 Months + +3 Brand Standard- D.,„igrirevi6W Strbini.ttals are cg.-for all replacements and new products prior to purchase and installation Addition to any binders, fabrics, etc., an electronic copy (via a noh- retiirnabl:CD) is required. Contact rsigitreview@hiltonsom for filither inforination. + + 180 Days + +4 Support Rules - Hotel smut net inslalllile-over-tile in any areas of the hotel. Old tile must be completely reihoved b.)fore new tile in installed- Per Brand Standards 5 Support Rule.5:11eitel iiiiiandt:install wall vinyl over existing wall vinyl in any areaof the hotel. Old wall vind must be completely removed before new wall vinA:is installed... Per Brand Standards 6 Suppoitrgules - All hotels undergoing a change of ownership or license renewal PIP will tie required to 'complete a one-time revenue management consultation and analysis. 12 Months + + Th1sis a fee bid service and will be performed by the Revenue Management 01,irsolidation Center. For additiorml details contact RMCCinfoOlton_com + +7 P4Q5.02 Public Area Recycling - Each floor, second floor and above, must have integrated and/or coordinating recycling station, including the trash receptacle, loc'ated near the ice/vendirg areas. If space is limited, relocation to elevator lobby is Omitted, Required by 12/31/13 per Brand Standards + + Per Brand Standards + +8 902.00 — In-suite Recycling - Provide a decorative in-suite recycling container at / near the work surface in each suite. The designated recycling container must be a t lqt container minimum_ If trash can is offered at the work surface, the recycling and trash can must match. Blue recycling containers are prohibited. Required by 12/31/13 per Brand Standards + + Per Brand Standards + +9 504.03 - Interior Signage - Replace all existing interior, pool, and sport court signage. Install new brand required signage package. (Refer to the Take Flight Design Guide.) 12 Months + +10 2500.00 - This document was updated 09/0812013 with the latest Brand Initiatives and with any applicable items from the latest Quality Assurance visit dated arest2013 12 Months + + + + + + + + + + + + EXHIBIT A - PRODUCT IMPROVEMENT PLAN 11 902.02 Brand Standard - Top of Bed - The Homewood Suites brand is currently launching a turn-key, bed skirt & coverlet program that is requried brand-wide. All hotels across the brand are required to convert to the approved program (50% of inventory in 2013; remaining 50% in 2014). + + Per Brand tandards + +12 2505.02 Take Plight — Public Space - All Take Flight elements in the public area must occur at once; they cannot beadded individually overtime. Refer to the Take Flight Design Guide for information on design intent and design requirements + + 12 Months + + COMMERCIAL FACILITIES # Active Date Scope of Work Finish Date 13 2514.03 D - Offices - Replace all carpet (wont/discolored). Install new carpet and carpet pad. Vinyl base is acceptable in areas that cannot be viewed by guests. 12 Months + +14 2513.01 B - Offices - Provide door viewer at the main office door entry. 12 Months 15 2513.01 B - Offices - Provide key-punch lock at the main office door entry. 17. Nlonths 16 2509.03 A - Corridors - Replace all corridor carpet and carpet pad Onafted,w env.. Install new 6" wood or 4" carpet base. 24 Months + +17 2509.03 A - Corridors - Replace all stairwell carpet and carpet pad (matterlAvorn)Install new 4' carpet base. 12 Months + +18 2514.03 A - Corridors - Replace all corridor tile; both at eleVaterlandingiand at , all first floor secondary entrances into the Lodge and Suites(s)corridors. Milan/ new 18' X 18' (minimum) decorative file flooring and 6"litiatching base. Rectangular shaped tile is acceptable (plank shaped and no snialler than 3" X'24" and no larger than 9' X 36". + + 12 Months + +19 2500.00 - Corridors - Replace entrance doors to Pool Area. Ensue both sets of entrance doors are in a like-new condition 12 Months + +20 2509.00 - Corridors - Install solid surfa0material or granite window sills. 12 Months 21 2509.03 - Corridors - Continue repairs to-3rd floor corrid6t ceilings. Ensure all ceilings have a consistent appearance.'''-/-..- + +22 2509.03 A - Corridors - Replace all dantagecliscaried door hardware at secondary 12 Months entrances into building.- 23 2500.00 - Elevators -,Refinish 6xtc der doers of elevators to remove scarring. All doors are to be41," likemee, coridilion 9r replaced. 12 Months + +24 ' 2509.03 Corridor' window treatmant - Replace window treatment with operable sheers and decorative rod and hard vane. Sheers mast be pleated or rippled to double fulinev,,,-.: 12 Months + +25 2502402.1. Great Roorn/Lodge - Replace all carpet and carpet pad. (Note: flooring:Orid floorifighaositions will b impacted by Take Flight) 12 Months + +26 2599.03 —1421iy/Loclge window treatment - Replace window treatment with operable shell-tiaddecorath'e rod and hardware. Sheers must be pleated or rippled to double 'fullness 12 Months + +27 -:::2502.02 - Lobby/Lodge Flooring - Install the flooring in front of the fireplace, at the.frod desk, in the suite shop, and in the pantry. Install carpet/pad in the lodge (cliaing.and lounge zones) and home office. (Refer to the Take Flight Design Guide for flooring transitions.) + + 12 Months + +28 2502,04 - Front Desk - Install a stand-alone, pod, or open ended front desk with ADA shelf. Remove duck art and install a decorative back-wall panel systems]. Match hie flooring with suite shop and lobby (Refer to the Take Flight Design Guide) + + 12 Months + +29 2502.02 Lodge - Implement the "fake Flight" lobby and lodge concept by installing natural finish accents and prescribed furnishings to create the connect, dining, and lounge zones.Take Flight also includes the front desk, suite shop, pantry, integrated trashirecycle/busqng, home office, front porch, and outdoor _kitchen areas, (Refer to the Take Flight Design Guide) + + 12 Months + + + + + + + + + + + + EXHIBIT A — PRODUCT IMPROVEMENT PLAN 30 2502.02 - Lobby/Lodge Furniture — In the lobby, install the curved sofa and elliptical rug. In the Lodge, outfit the dining area with tables and chairs of different styles, finishes, and heights. Include the signature wing table and pendants in the dining zone.Install the two-sided sectional and lighting to help define the separation between the dining and lounge zone. On the lounge side, outfit with tea- height tables and lounge chairs. Incorporate conxr banquette(s) with pendant lighting. (Refer to the Take Flight Design Guide + + 12 Months + +31 2501.00 - Exterior - Paint exterior with accent oclor(s) as outlined in the Exterior Design Guidelines (posted on www,hiltonworldwi&conitdesign) . 12 Months + +32 2501.02 F - Landscape - Add special landscaping or fencing to screen out transformers, gas meters, HVAC units etc., from guest view without hindering operation or routine maintenance. 12 Months + +33 2500.00 - Parking Lot - Repair any cracked/damaged areas in the parking lot. Re-seal and re-stripe the parking lot. 12 Months + +34 2513.09 C - Exterior - Install painted steel pipe bollards around the container to prevent damage to walls. 12 Months 35 2500.00 Exterior - Ensure that all building sigrrage is updated to the current Homewood standards. 'Hilton". trademark sign is required on all building-mounted signage. 12 Months + +36 2513.09 —Trash collection Area- If existing trash collectionfdompstel- enclostire cannot a cconrinothte recycling bins, the dampster and clumpster pad 'Must be enlarged to accommodate the additional NUS,. + + 12 Months + +37 2501.04.D — Exterior - Secondary Entrances - Upgrade secondary entrances to include a covered area that matches the building andfor poste coeliere in des; ' t and finish. Install upscale decorative lighting, along with.' a decoratiVe/upsc trash and ash receptacle similar to the main entry.Rker`to the Eakferior Design Guidelines and Take Flight Design Guidelines + + 12 :Months - + +38 2501.05. Exterior - Front Entrance / Front Porch.. a. Provide ceiling recrossed cans and decorative upscale ivaIliconates b. Provide outdoor seating for two minim:int, adjacent to the prinuaiy entrance. Seating fabrication and style must be similar to the lodge patioseating; park benches are not allowed.ir- :H:,::::!„,.r. e. Provide a decorative combo trash, recieling, and ash reeeptade at the main entrance. The unit must include a hood to piaatect trash from weather. Refer to the Take Flight Design Guide for design intent.—.:: ,..2. d. Provide three decorative plardOs e.: varying sizes (2501.02) + + 12 Months + +39 2501,04 —Exterior - Building Finish ,,:ladd secondary finish to the exterior as outlined in the Exterior Design guir',31'F,Xteritif building finish must be a combination of two Or more of tly.-rollowini materials: HIES & brick; EIFS & Stone; or stone and litelc. Re feu IO: I he Exterior Design Guidelines + + 12 Months + +40 2507,00 -Bu ,: ' s Center '; Provide all components of the Global Business Center Solution. Dee-31-2013 41 2507.05A - BmAriessCenter - Install 6" decorative wood base to match the wood base inlhe lobby.''.. :- 12 Months 42 2547.05 Al`130.sinest: Center - Replace cabinets and countertops New wall and ba se.cabinets inust be funrihtre quality with all exposed surfaces made of wood. IX.-.Sk lop must be Intl:nal or engineered stone or better and 30" above the finished floor. Upper cabinets must be provided for supply storage. Under cabinet lighting is required. Note: This area will be impacted by 'Take Flight". + + 12 Months + +43 2514.03 - Guest Laundry - Replace the floor tile. Install new 18' x 18" (tnirilmurn) decorative tile flooring and matching 6" base. Rectangular gaped tile is acceptable (plank shaped and no smaller than 3" x 24" and no larger than 9" x 36'). + + 12 Months + +44 2500.00 - Guest Laundry - Install an electronic entry loch. The deadbolt function must be disabled. 12 Months 45 2506.02 G Guest Laundry - Install a minimum 36" x 22" innnan,ent counter with12 a laminate top 34" triaminum above the finished floor. Provide two stools or chairs as seatarg. Months 46 2506.02 F - Guest Laundry - Install vinyl wall covering.12 Months 47 2506.02 I - Guest Laundry - Conceal all electrical and plumbirg connections 12 behind the connected equipment. (Remove lattice panel) Months + +48 2503.00 F - Public Restrootns - Remove the combination paper towel dispenser 12 and waste receptacle recsed into tire wall. Install an automated touch-less paper dispenser and a free-standing decorative trash receptacle. + + Months + + + + + + + + + + + + EXHIBIT A - PRODUCT IMPROVEMENT PLAN 49 2514.03 A - Public Restrooms - Replace the floor tile. Install new 18" x 18' (minimtun) decorative tile flooring and matching 6" base. Rectangular shaped tile is acceptable (plank shaped and no smaller than 3" x 24" and no larger than 9" x 36'). + + 12 Months + +50 250100 D - Public Restrooms - Replace all vinyl wall covering and wall tile. Ceramic, porcelain, or stone the at fall height is required at wet/phunbing walls. 12 Months + +51 2503.00 E - Public Restrooms - (Pool Area) - Replace all msted/corroded chrome fixtures in restrooms. 12 Months 52 2506.01 Suite Shop - Install granite on all display counters. This area will be impacted by "Take Flight'. 12 Months 53 2514.03 A - Suite Shop - Replace the floor tile. Install new 18' x 18" (minimum) decorative tile flooring and matching 6" base. Rectangular shaped tile is acceptable (plank shaped and no smaller than 3" x 24" and no larger than 9' x 36"). Note: This area will be impacted by 'Take Flight". + + 12 Months + +54 2506.01 E - Suite Shop - Install vinyl wall covering. 12 Months 55 2506.01 — Suite Shop—Install the 'Take Flight" suite shop b openim up the space to the front desk/lobby, flooring, accent wall vinyl, updated millwork, focal table w/pridant, refrigeration units and graphics. (Refer to the Take Flight Design + + + + Guide).' . 12 Months 56 2503.00 — Public Restrooms —Provide commercial grade faucets that are. , touchless. All faucets must be plated brass with replaceable cartridges,` and: ::,..... + + manufaetured by nationally lorown manufacturers. All fixtures inusehe lcm-110iv. ...-. type 12 Months 57 2507.05 - Busimiss Center - Implement the 'Take Flight" home office -e-Once]il. (Open tip the apace —removing door and partial wall, install'riattatation7 printer FCIlinsula w/pendant, decorative panel/divider, accent wall vinyl .,"0.1 tura sting ::::: flooring, etc. Refer to the Take Flight Design Guido);` -,:r. -,r,!:.1 12 Months i,.' .., —.....,—. 55 2504.05 H - Pantry - Replace the breakfast area countertops. InstalTgratiita at the countertops at the cabinets and island.,..,:, Ice wells must be built-in. Note: This area will be impacted by "Take Flight'. 12 Months 59 254405 K - Pantry - Replace the breakfast area cabinets' Install new decorative millwork base and wall cabinets. New cabinets must incorporate under-cabinet lighting as well as accent lighting in upper Cabinets withglass doors. All cabinet lighting must be on a dedicated, switch. + + 12 Months + +60 2504.05 0- Pantry - Replace thetile, Install iiew 18" x 18" (minimum) decorative tile flooring and ntitchini.071aase,_ReCtangular shaped his is acceptable (plank shaped and nii,smaller than.3. x.24" and no larger than 9" x 36"). Note: This aria will la impacted by rTake Flight". + + 12 Months + +61 2504.06 - Pantry - CoOidinale/update pantry serving area finishes with updated "Take Flight" lodge renctroninelgding updates such as pendant over island. (Refer tothel4e flight Dkrign Gifide) 12 Months + + 62 ; J:17,1toardroorn - provide a remanent conference table to seat a minimum I.-opt:ix Table ftilistliave an electrical power source, telephone outlet, and AV conneetiOns in potrup boxes on the top of the table. + + 12 Months + +63 2507.03 - Badfdt66"rn - Provide, a built-in buffet counter, 48x24" ntininnun; 12 Months 64 247.63 - Boddroom - Provide artwork appropriate for space available. 12 Months 65 2547.03 - Boardroom - provide a ceiling recessed, electronically operated screen. Controls must be near the lighting controls. 12 Months + +66 250,03 - Boardroom - Provide a 52" well mounted flat panel TV with connectivity to a MATV system and to boardroom table connection. 12 Months + +67 2507.03 - Board room - Replace Nvalll vinyl. The vinyl is damaged at the windows. Repair all moisture damage and eliminate source. 12 Months + + 68 2543.07 A - Activity Court - Install an activity court or alternative recreational feature approved by the brand. This is a required facility. 12 Months + +69 2508.03 P - Pool Area - A saline-based generator system must be used for swimming pool water pitrification. The system must comply with all loc-al codes and meet all local health department regulatiorn. The system must be NSF-54 and ULt 031 tested and certified (or the equivalent) and sized as per Loral and State Department of Environmental Health guidelines. + + 12 Months + +70 2501.03 3- Rear Porch/Patio - Provide a mirinium of Iwo outdoor gas or charcoal grills (Outdoor kiitchen will be part of "Take Flight').12 Months 12 Months + + + + + + + + + + + + EXHIBIT A - PRODUCT IMPROVEMENT PLAN # Active Date Scope of Work Finish Date 71 2501.03 Outdoor Patio/Kitchen - Implement the "Take Flight- outdoor kitchen concept (Island `v/stainless steel grills and upscale seating, pergola, string S4, sconce lighting, upscale lounge seating with removable cushions, upscale decorative outdoor trash container, Wi-Fi, music, outdoor planters, etc. Refer to the Take Flight Design Guide.). + + 12 Months + + 72 2512.04 0 - Guest Bathrooms - Remove all existing acrylic tub/surround units. Provide cast iron, porcelain over steel, or Vikrell tubs as manufactured by Sterling. Install brand approved surrounds as outlined in Homewood Suites Brand Standards. The tub/shower surrounds must extend to the ceiling, coordinate with rarity color, and have a matte finish. + + 12 Months + +73 2512.04 I - Guest Bathrooms - Install closed front toilet seats. 12 Months 74 2512,02 A - Guest Bathrooms - Vanity area - install 12"(minimum) ceramic floor tile and matching base. The floor tile most be the same as the bath area ttoor.tile. 1? Months + +75 2514.03 A - Guest Bathrooms —Replace all floor tile. Install new decorative. 12 Months porcelain fluor tile and matching base. Floor tile must be 12" iniritmiin. 76 2500.00 - Guest Bathrooms - Replace brass door hardware on the bath side of the; entry door. Install hardware to match the chronic or satinflxhires intlLial ft area. Exterior door hardware mast match entry door hardware. . + + 12 Months + +77 2512.09 C - Guest Bathrooms - Provide a single prong chrome towel hook to be,/: mounted in close proximity to the tub/shower.:.-.. -. 12 Months 78 2512.02 B - Guest Bathrooms - Replace all vinyl wall covering. 12 Months 79 2500.00 - Install drawer and door hardware (pulls and }mobs) on vanity, baseca binet. 12 Months .. 80 2500.00 - Bathroom Storage - remove per labile, wire basket storage units. Provide vanity base or other built-intorage unit that is upscale in presentation. 12 Months + +81 2512.06 - Guest Bathrooms — Vanity Mirror- Install bark—lit mirror over vanity sink. (Take Flight) 12 Months 82 2500.00 - Guest Bedrooms - Replace all Carpet, carpet pad, and carpet base.Months 12 Months 83 2510.00 - Guest Bediooms - Replae&all case goods.12 Months 84 Std 2510.05.B -Bed bases mush be 7 1/2' high. Replace current bed bases to neestandards 12 Months 85 2510.02 KGpest Bedrooms., Install metal stops at all windows to ensure no more than 47,6petiirg of WiridoWis allowed. 12 Months + +86 251,0102 K - Gitest Bedrooms - Install solid surface material or granite window "S:, 12 Months 87 15] 0,06 1.3.:Gu&st BedoSoms - Replace all artwork. 12 Months 88 2 '!n]'',..00 - Chtest Bedrooms - Upgrade all window treatments; ensuring valance, she'ers, black-Opt panels and stationary side pawls are in place. , 12 Months 89 2510.06 D - Girest Bedroom - Ceiling fans (hugger-type) are required in the bedrooms of all Suites and Studio Suites, Fans must be controlled by a wall Aritch. ;Pull chains are not allowed. 12 Months + +90 2510.06 C - Guest Bedrooms - Replace lighting package. Install a new Holiwood approved lighting package. (To include beveled switches and electrical outlets). 12 Months + +91 2510.06 - Guest Bedroom — Headboard - Install "fake Flight" upholstered headboard. 12 Months 92 2510.03 Guest Bedroom - Headboard Well - install tonal accent wall vinyl headboard -wall. Bold or bright colors are not accept abel for the headboard accent wall. 12 Months + + 2510.03 D- Guest Kitchens - Install 1 2x12" tile, or plank tile. Install wood or tile base to snatch. 12 Months 94 2510.10 - Kitchen - Replace kitchen chairs. 12 Months 95 2510.03 E - Kitchens - Install IleV7wall vinyl in litchenlareakfast counter area. 12 Months + + + + + + + + + + EXHIBIT A - PRODUCT IMPROVEMENT PLAN 2510.10 D - Guest Kitchens - Replace all mismatched appliances. Microwave, refrigerator and dishwasher must be stainless steel. Cooktop must be black or stainless steel. All appliance must be Energy Star rated_ + + 12 Months + +97 2500 00 - Gust Kitchens - add pulls and knobs to kitchen cabinetry. 12 11 onths 98 2510.06.D. - Guest Kitchens - Pendant Light - install decorative pendant over -tater' table 12 Months 49 2510,03.B. - Guest Kitchens - Accent wall - install tonal accent wall vinyl in kitchen 12 Months LI lattagAIM 100 2510.03 E - Guest Parlors - Replace all carpet carpet pad, and carpet base. 24 Months 101 2510.02 K - Gust Parlors - Install solid surface material or granite window sills. 12 Months 102 2500.00 Gust Parlors - Install metal "stop° at all windows to ensure no more than 4" window opening is allowed. 12 Months + +103 2500.00 Guest Parlors - Remove silk plants form suites. (No longer required per 2012 standards). 12 Months 104 2515.00 - Guest Parlors - Upgrade all window treatments to include a valance, sheers, black-out panels and stationary panels are lupine. 12 Months + +105 2510.00 - Guest Parlors - Replace all case goods. 12 Months 106 2510.06 C- Guest Parlors - Replace lighting package. Install a new voltII lighting package. 12 Months 107 2510.01 - Guest suites - Provide cover plates (gmstroorn side) ter entrance door viewers 12 Months 108 2510.01 C - Guest Parlors - Install an approved auxiliary lock on all connecting doors.. 12 Morals 109 2510.06.A. - Glit Parlors—Cocktail Ottoman - Replace coffee table. Install:an upholstered cocktail ottoman with a wrap-over parsons table • . • 12 Months + +110 2510.00 - Parlors - Replace all seating (fabric worn and discolored)° 12 Months The improvements identified in this property improvement plan ("PIP") relevant to the brand specified on the cover page of this PIP ("Brand") ar,e,based on,tonditions at the hotel existing on the Inspection Date specified on the cover page of thiS PIP ("InSpection Date"). This PIP and any specified waivers of relevant brand standards are only'effeclive for the purpose of incorporation by reference into a fully executed and datetliagreement relat ing to the implementation of the PIP ("Relevant Agreement) With the affiliate'Oititf:Or'Ililton Worldwide, Inc. that is party to such Relevant Agreement ("Hilton"), if _such RelOrAitt Agreement is entered into within 180 calendar days of the Inspection Date. In the 'event that aRelevant Agreement is not entered into within 180 calendar clays of the Inspection Date;-,an updated PIP may be required (in Hilton's absolute discretion). The preparatiort:andtor supply of this PIP shall not obligate Hilton (or any affiliate of Hilton) to en ter into anyeReleV:Mt Agreeinent (including, but not limited to, a franchise agreement or a management agreeinent). , This PIP review islimitato,aesthette and functional layout and design, and certain functional, operational and, qual ity criteilaas/sPecified by Hilton. It does not encompass, and Hilton does not make any repreSentiitien or Wiri.anty as to, nor shall Hilton be responsible for, the architectural, structural, thedianical, 'or electrical adequacy, accessibility requirements or other compliance with applicable government or other legal reqUirements. Compliance is required with brand standards (including4he..fire safety and security equipment standards specified by Hilton), all applicable local, state shish federal building codes, any legally mandated accessibility requirements anti all other legal requirements. Accordingly, Hilton recommends that its eennterparty(ies) engage an appropriate professional team and legal counsel to advise on such compliance. Any omission in this PIP report does not constitute a waiver of such requirements and does not release any obligation in any Relevant Agreement to conform to brand standards. Nothing in this PIP is intended to modify the terms of any Relevant Agreement to which it may be attached and/or incorporated by reference. In the event of any conflict of the terms, the terms of the Relevant Agreement are the terms that prevail. The works set out in this PIP are required to be completed by the specified "Finish Date", All "Finish Dates" that are a specified number of months or days shall mean the number of months or days from the date of the Relevant Agreement into which the PIP is incorporated by reference. \ No newline at end of file diff --git a/full_contract_txt/HPILHOLDING_01_07_2015-EX-99.1-COOPERATION AGREEMENT.txt b/full_contract_txt/HPILHOLDING_01_07_2015-EX-99.1-COOPERATION AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..1e3f4fc4a016606a7c86425ae5c962f3b9d31dd5 --- /dev/null +++ b/full_contract_txt/HPILHOLDING_01_07_2015-EX-99.1-COOPERATION AGREEMENT.txt @@ -0,0 +1,55 @@ +COOPERATION AGREEMENT made by and between HPIL ENERGYTECH Inc. and GINARES GROUP AG January 5, 2015 + + + + + + + + Table of Contents 1. Term........................................................................................................................................... 2 2. Goals And Objectives................................................................................................................ 2 3. Obligations Of The Parties........................................................................................................ 3 4. Confidentiality........................................................................................................................... 3 5. Relation Of The Parties............................................................................................................. 3 6. Closing....................................................................................................................................... 3 7. Representations, Warranties, And Covenants Of GINARES.................................................... 3 8. Representations, Warranties, And Covenants Of HPIL ET...................................................... 4 9. GINARES's Indemnity.............................................................................................................. 5 10. HPIL ET's Indemnity............................................................................................................... 5 11. Payment Of Expenses................................................................................................................ 5 12. Approval Of Counsel................................................................................................................. 5 13. Notices....................................................................................................................................... 6 14. Additional Undertakings............................................................................................................ 6 15. Compliance With The Foreign Corrupt Practices Act And Export Control And Antiboycott Laws........................................................................................................................................... 7 16. Arbitration.................................................................................................................................. 7 17. Governing Law.......................................................................................................................... 7 18. Binding Effect............................................................................................................................ 7 19. Counterparts............................................................................................................................... 7 20. No Reliance............................................................................................................................... 8 21. Early Termination...................................................................................................................... 8 22. Captions..................................................................................................................................... 8 23. Entire Agreement....................................................................................................................... 8 1 + + + + + + COOPERATION AGREEMENT THIS COOPERATION AGREEMENT ("Agreement") is signed this 5th day of January, 2015 (the "Closing Date"), by and between HPIL ENERGYTECH Inc., a Nevada (USA) corporation (hereafter "HPIL ET") and GINARES GROUP AG, a private company domiciled in Switzerland (hereafter "GINARES"). R E C I T A L S: The following is a recital of facts underlying this Agreement: A. HPIL ET is focused on investing in both private and public companies in the energy business sector. HPIL ET does not restrict its potential candidate target companies to any specific geographical location and thus acquires various types of business in the energy sector. HPIL ET is active with the acquisitions of intellectual properties and technologies in the energy sector. B. HPIL ET is a wholly owned subsidiary of HPIL Holding, a Nevada (USA) corporation and a worldwide diversified investing holding company. HPIL Holding is a US Public and SEC reporting company. C. GINARES is an operating international Swiss holding corporation that provides global and independent renewable energy solutions, in particular related to its NCT technology (Natural Conversion Technology), a catalytic conversion compression to convert general organic waste (MSW - Municipal Solid Waste) and all kinds of biomass into liquid fuel energy (such as kerosene and/or diesel) as well as the further production of electricity, that it has an energy efficiency rate and no toxic chemical byproducts. D. GINARES operates, and has always operated, according to all regulations in force and is fully respectful of the environment. GINARES periodically evaluates it's conformity to applicable regulations and obtains the necessary permits, clearances and certificates. NOW, THEREFORE, HPIL ET and GINARES (hereafter the "Party" or collectively the "Parties") in consideration of and in reliance upon the representations, warranties, covenants and agreements contained herein, hereby agree to cooperate together to expand the GINARES projects and bind themselves to undertake this Agreement under the following terms and conditions: 1. Term The term of this Agreement shall be one (1) year unless terminated earlier in accordance with the terms of this Agreement (the "Term"). 2. Goals And Objectives The Parties are working cooperatively to develop and cooperate to expand the GINARES projects. The Parties agree to develop a list of target cooperation projects and common goals, and consequent agreements if required, within six (6) Months of signing this Agreement. 2 + + + + + + 3. Obligations Of The Parties 3.1. HPIL ET's obligations under this Agreement are to: (i) Follow up on developments regarding GINARES; (ii) Work with GINARES as appropriate. 3.2. GINARES's obligations under this Agreement are to: (i) Keep HPIL ET aware of developments regarding GINARES; (ii) Work with HPIL ET as appropriate. 4. Confidentiality Subject to sub-clause below, each Party shall treat as strictly confidential all information received or obtained as a result of entering into or performing this Agreement. Each Party may disclose information which would otherwise be confidential if and to the extent: (i) required by the law of any relevant jurisdiction; (ii) the information has come into the public domain through no fault of that Party; or (iii) the other Party has given prior written approval to the disclosure, provided that any such information disclosed shall be disclosed only after consultation with and notice to the other Party. 5. Relation Of The Parties The nature of relationship between the Parties is that of two independent contractor's working together to achieve common goals. There is no payment or compensation contemplated under this Agreement. 6. Closing The closing of this Agreement shall take place at the offices of HPIL ET, 7075 Gratiot Road, Suite One, Saginaw, Michigan 48609 (United States of America), or other mutually agreed upon location. 7. Representations, Warranties, And Covenants Of GINARES GINARES hereby represents, warrants, and covenants to HPIL ET that: 7.1. Authorization This Agreement constitutes a valid and legally binding obligation of GINARES, enforceable in accordance with its terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors' rights generally and (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies. + + 3 + + + + + + 7.2. Consents To GINARES's knowledge, no consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any federal, state or local governmental authority on the part of GINARES is required in connection with the consummation of the transactions contemplated by this Agreement. 7.3. Compliance With Other Instruments The execution, delivery and performance of this Agreement contemplated hereby will not result in a violation of, or default under, any instrument, judgment, order, writ, decree or contract known to GINARES, or an event that results in the creation of any lien, charge or encumbrance upon the Agreement. 7.4. Litigation There is no action, suit, proceeding or investigation pending or, to GINARES's knowledge, currently threatened that questions the validity of this Agreement, or the right of GINARES to enter into this Agreement. 8. Representations, Warranties, And Covenants Of HPIL ET 8.1. Authorization This Agreement constitutes a valid and legally binding obligation of HPIL ET, enforceable in accordance with its terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors' rights generally and (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies. 8.2. Consents To HPIL ET's knowledge, no consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any federal, state or local governmental authority on the part of HPIL ET is required in connection with the consummation of the transactions contemplated by this Agreement. 8.3. Compliance With Other Instruments The execution, delivery and performance of this Agreement contemplated hereby will not result in a violation of, or default under, any instrument, judgment, order, writ, decree or contract known to HPIL ET, or an event that results in the creation of any lien, charge or encumbrance upon the Agreement. 8.4. Litigation There is no action, suit, proceeding or investigation pending or, to HPIL ET's knowledge, currently threatened that questions the validity of this Agreement, or the right of HPIL ET to enter into this Agreement. 4 + + + + + + 9. GINARES's Indemnity 9.1. HPIL ET shall indemnify, defend, and hold harmless GINARES from, against and with respect to any claim, liability, obligations, loss, damage, assessment, judgment, cost and expense (including, without limitation, reasonable attorneys' and accountants' fees and costs and expenses reasonably incurred in investigating, preparing, defending against or prosecuting any litigation or claim, action, suit, proceeding or demand) or any kind or character (collectively, "Losses") arising out of or in any manner, incident, relating or attributable to: any inaccuracy in any representation or breach of warranty of GINARES contained in this Agreement and (ii) any failure by HPIL ET to perform or observe, or to have performed or observed in full any covenant, agreement or condition to be performed or observed by HPIL ET under this Agreement or any of the other agreements or instruments executed and delivered by HPIL ET on the Closing Date. 9.2. GINARES agrees that the sole and exclusive remedy for money damages related to this Agreement and the transactions contemplated hereby shall be the rights to indemnification set forth in this Section 9. 10. HPIL ET's Indemnity 10.1. GINARES shall indemnify, defend, and hold harmless HPIL ET from, against and with respect to any claim, liability, obligations, loss, damage, assessment, judgment, cost and expense (including, without limitation, reasonable attorneys' and accountants' fees and costs and expenses reasonably incurred in investigating, preparing, defending against or prosecuting any litigation or claim, action, suit, proceeding or demand) or any kind or character (collectively, "Losses") arising out of or in any manner, incident, relating or attributable to: any inaccuracy in any representation or breach of warranty of HPIL ET contained in this Agreement and (ii) any failure by GINARES to perform or observe, or to have performed or observed, in full any covenant, agreement or condition to be performed or observed by GINARES under this Agreement or any of the other agreements or instruments executed and delivered by GINARES on the Closing Date. 10.2. HPIL ET agrees that the sole and exclusive remedy for money damages relating to this Agreement and the transactions contemplated hereby shall be the rights to indemnification set forth in this Section 10. 11. Payment Of Expenses Each of the Parties shall pay their own expenses associated with this Agreement and the transactions contemplated herein. 12. Approval Of Counsel All instruments or documents to be delivered by any Party to this Agreement shall be in form and content reasonably satisfactory to the counsel for the Party receiving such instrument or document. 5 + + + + + + 13. Notices All notices and other communications required or permitted hereunder shall be in writing and shall be deemed to have been duly given (a) when delivered in person, (b) five (5) business days after being sent by registered or certified mail, return receipt requested, postage prepaid, (c) when dispatched by electronic facsimile transmission (with confirmation of successful transmission), or (d) one (1) business day after having been dispatched by an internationally recognized overnight courier service, in each case to the appropriate Party at the address or facsimile number specified below: If to HPIL ET: HPIL ENERGYTECH Inc. Attn.: Louis Bertoli, President and CEO 7075 Gratiot Road, Suite One Saginaw, Michigan 48609 United States of America Facsimile No.: 001(248)750-1016 with a copy (which shall not constitute notice) to the following e-mail addresses: info@hpilenergytech.com If to the GINARES: GINARES GROUP AG Attn.: Peter Zu Sayn-Wittgenstein, President and CEO Churerstrasse 47 Pfaeffikon 8808 Switzerland Facsimile No.: +41(55)511-0810 with a copy (which shall not constitute notice) to the following e-mail address: info@ginares.com Any Party hereto may change its address or facsimile number for the purposes of this Section 13 by giving notice as provided herein. 14. Additional Undertakings The Parties shall hereafter each take those actions and execute and deliver those documents and instruments as shall be reasonably necessary in order to fulfill the intent and purpose of this Agreement, and shall cooperate in any filing, registration, investigation or other activity that shall be required or shall occur as a result of or in connection with this transaction. 6 + + + + + + 15. Compliance With The Foreign Corrupt Practices Act And Export Control And Antiboycott Laws Neither GINARES or HPIL ET or any representative of GINARES or HPIL ET in its capacity as such has violated the Foreign Corrupt Practices Act or the anticorruption laws of any jurisdiction where GINARES or HPIL ET does business. Each of GINARES and HPIL ET has at all times complied with all legal requirements relating to export control and trade sanctions or embargoes. Either GINARES or HPIL ET have violated the antiboycott prohibitions contained in 50 U.S.C. Sections 2401 et seq. or taken any action that can be penalized under Section 999 of the Internal Revenue Code of 1986, as amended. 16. Arbitration Any and all disputes or controversies between the Parties arising out of or in connection with this Agreement shall be finally settled by arbitration in accordance with the Rules of Arbitration of the International Chamber of Commerce; provided, a Party may seek a temporary restraining order, preliminary injunction, or other provisional judicial relief if in its judgment such action is necessary to avoid irreparable damage or to preserve the status quo. Despite any such action for provisional relief, the Parties will continue to participate in good faith in the procedures specified in this Section 16. Each Party shall appoint one arbitrator who shall mutually appoint a third arbitrator who shall be the sole arbitrator for the proceeding. The arbitration shall be held, and any award shall be rendered, in Paris (France), in the English language. The award may include reimbursement of the costs of the arbitration (including, without limitation, reasonable attorney fees) to the prevailing Party or a portion of such costs as determined by the arbitrator. An award of the arbitrator shall be final and binding on the Parties and judgment upon the award rendered by the arbitrator may be entered by any court having jurisdiction. 17. Governing Law This Agreement and its application and interpretation will be governed exclusively by its terms and the laws of the State of Nevada (USA), and excluding any conflicts of law provisions which would require the application of any law other than Nevada. 18. Binding Effect All of the terms and provisions of this Agreement by or for the benefit of the Parties shall be binding upon and inure to the benefit of their successors, assigns, heirs and personal representatives. The rights and obligations provided by this Agreement shall not be assignable by any Party. Except as expressly provided herein, nothing herein is intended to confer upon any person, other than the Parties and their successors, any rights or remedies under or by reason of this Agreement. 19. Counterparts This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same Agreement. 7 + + + + + + 20. No Reliance No third party is entitled to rely on any of the representations, warranties and agreements contained in this Agreement. The Parties assume no liability to any third party because of any reliance on the representations, warranties and agreements contained in this Agreement. 21. Early Termination The Parties may terminate its performance of related obligations under this Agreement within thirty (30) days of receipt by the Party of written termination notice. 22. Captions Captions to sections and subsections of this Agreement have been included solely for the sake of convenient reference and are entirely without substantive effect. 23. Entire Agreement This Agreement constitutes the entire agreement among the Parties pertaining to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings, negotiations and discussions, whether oral or written, of the Parties and there are no warranties, representations or other agreements between the Parties in connection with the subject matter hereof except as set forth specifically herein. No amendment, supplement, modification, waiver or termination of this Agreement shall be implied or be binding (including, without limitation, any alleged waiver based on a Party's knowledge of any inaccuracy in any representation or warranty contained herein) unless in writing and signed by the Party against which such amendment, supplement, modification, waiver or termination is asserted. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision hereof (whether or not similar), nor shall such waiver constitute a continuing waiver unless otherwise expressly therein provided. THIS COOPERATION AGREEMENT has been entered into as of the date first set forth above. GINARES : GINARES GROUP AG, a private company domiciled in Switzerland. By: /s/ Peter Zu Sayn-Wittgenstein ​ ​ . Peter Zu Sayn- Wittgenstein As: President and CEO + +HPIL ET : HPIL ENERGYTECH Inc., a Nevada (USA) corporation. By: /s/ Louis Bertoli ​​. Louis Bertoli As: President and CEO 8 \ No newline at end of file diff --git a/full_contract_txt/HUBEIMINKANGPHARMACEUTICALLTD_09_19_2006-EX-10.1-OUTSOURCING AGREEMENT.txt b/full_contract_txt/HUBEIMINKANGPHARMACEUTICALLTD_09_19_2006-EX-10.1-OUTSOURCING AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..fc4e8adff3ce18ee7c6b6f9b3f04e4811d5e79e5 --- /dev/null +++ b/full_contract_txt/HUBEIMINKANGPHARMACEUTICALLTD_09_19_2006-EX-10.1-OUTSOURCING AGREEMENT.txt @@ -0,0 +1,37 @@ +PHOTO RETOUCHING OUTSOURCING AGREEMENT + +Between: DGT Corp. Suite 207 - 1130 Austin Avenue, Coquitlam, British Columbia, Canada V3K 3P5 (hereinafter referred to as "DGT") + +And: Dolphin Industries Limited Room 1302 Golden Gate Commercial Bldg 136 Austin Road Tsimshatsui, Hong Kong (hereinafter referred to as "Dolphin") + +WHEREAS: + +DGT is an internet provider of professional digital photo-editing services for photography studios and digital photo processors. + +Both parties are desirous of entering into this Agreement regarding the outsourcing of photo-editing services of DGT's clients in the North American market place and elsewhere. + +NOW THEREFORE THIS AGREEMENT WITNESSETH that both parties agrees as follows: 1.DGT shall pay Dolphin USD10,000, for carrying out the beta testing of the quality of their photo-editing services and testing of the Internet bandwidth for file transmission. This amount is to be paid in two monthly installments, USD5,000 on the date of this Agreement and USD5,000, 30 days subsequent to the date of this Agreement; 2.Upon successful completion of the beta testing stage, DGT will guarantee Dolphin the greater of: (1) USD5,000 for each 30 day period of photo-editing work completed for a total of 90 days (payment to be effective 30 days from the successful completion of the beta tests); or (2) a minimum of 3,300 pictures to be edited for each 30 day period for a total of 90 days at USD1.50 per finished digital photo; 3.Dolphin agrees to complete its photo-editing services within 14 days of receiving the original digital photo files. The completed files must meet DGT pre-defined standards for finished products; 4.Dolphin shall charge DGT USD1.50 per delivered, completed photo. The price per unit shall be open to renegotiation - in response to competitive pricing pressures - upon receipt of written notice at any time by either party; Page 1 of 5 + + + + + + 5.Dolphin will provide photo-editing services exclusively, at DGT option, when the number of downloaded photos to be edited by Dolphin totals 50,000 in a single year; 6.Dolphin acknowledges that it is illegal to copy or reproduce these photographs, including but not limited to electronic reproduction, without DGT expressed permission, and any violation will be subject to civil and criminal penalties. WHEREAS BOTH PARTIES AGREE FURTHER TO THE TERMS AND CONDITONS AS FOLLOWS: Indemnity And Limitation of Liability: Dolphin hereby indemnifies, holds harmless and defends DGT, its Board of Directors, officers, and agents against any and all claims (including all legal fees and disbursements incurred in association therewith) arising out of the exercise of any rights under this Agreement including, without limiting the generality of the foregoing, against any damages or losses, consequential or otherwise, arising from or out of the use of DGT's products under this Agreement by Dolphin or their customers or end-users howsoever the same may arise. DGT's total liability, whether under the express or implied terms of this Agreement, in tort (including negligence), or at common law, for any loss or damage suffered by Dolphin, whether direct, indirect or special, or any other similar or like damage that may arise or does arise from any breaches of this Agreement by DGT and its Directors, Officers or agents, shall be limited to the amount of the cost of the products. In no event shall DGT be liable for consequential or incidental damages arising from any breach or breaches of this Agreement. No action, whether in contract or tort (including negligence), or otherwise arising out of or in connection with this Agreement, may be brought by Dolphin more than six months after the cause of action has occurred. Right of photo Records: Dolphin shall maintain at its principal place of business, or such other place as may be most convenient, separate accounts and records of all services provided to DGT, such accounts and records to be in sufficient detail to enable proper returns to be made under this Agreement. Dolphin shall deliver to DGT on the date 30 days after each and every year a detailed photo-editing report on all services provided on a unit basis (i.e. customer number, file number, cost). Page 2 of 5 + + + + + + The calculation shall be carried out in accordance with generally accepted U.S. accounting principles ("GAAP"), or the standards and principles adopted by the U.S. Financial Accounting Standards Board ("FASB") applied on a consistent basis. During the term of this Agreement, and thereafter, Dolphin shall use reasonable efforts to ensure that all information provided to DGT or its representatives pursuant to this Article remains confidential and is treated as such by DGT. Governing Law And Arbitration: This Agreement shall be governed by and construed in accordance with the laws of the State of Nevada, USA in force therein without regard to its conflict of law rules. All parties agree that by executing this Agreement they have attorned to the jurisdiction of the Supreme Court of the United States. The Supreme Court shall have exclusive jurisdiction over this Agreement. In the event of any dispute arising between the parties concerning this Agreement, its enforceability or the interpretation thereof, the same shall be settled by a single arbitrator appointed pursuant to the provisions of the Commercial Arbitration Act of the State of Nevada, or any successor legislation then in force. The language to be used in the arbitration proceedings shall be English. Notices: All payments, reports and notices or other documents that any of the parties hereto are required or may desire to deliver to any other party hereto may be delivered only by personal delivery or by registered or certified mail, telex or fax, all postage and other charges prepaid, at the address for such party set forth below or at such other address as any party may hereinafter designate in writing to the others. Any notice personally delivered or sent by telex or fax shall be deemed to have been given or received at the time of delivery, telexing or faxing. Any notice mailed as aforesaid shall be deemed to have been received on the expiration of five days after it is posted, provided that if there shall be at the time of mailing or between the time of mailing and the actual receipt of the notice a mail strike, slow down or labour dispute which might affect the delivery of the notice by the mails, then the notice shall only be effected if actually received. Termination: DGT shall be entitled to terminate this Agreement if Dolphin fails to meet its requirements and material obligation hereunder and only after DGT have given Dolphin written notice of such failure and only after Dolphin has not rectified such failure within 10 days of the notice. Dolphin shall be entitled to terminate this Agreement only after DGT fails to meet a material obligation hereunder and only after Dolphin has given DGT written notice of such failure and only after the DGT has not rectified such failure within 30 days of the notice. Page 3 of 5 + + + + + + General: 1.Dolphin shall be entitled to defer any obligation hereunder in the event of force majeure, where force majeure is defined as an act of God, war, revolution, insurrection, riot, blockade or any other unlawful act against public order or authority, strike, lockout or other industrial disturbance, storm, fire, flood, explosion or lightning, the failure to obtain the approval or any government, governmental agency, commission, board or other tribunal having jurisdiction, and any other event not reasonably within the control of Dolphin; 2.Any notice, demand, payment or other communication (collectively the "Correspondence") to be given hereunder shall be in writing and shall be delivered to the address or fax number of the party appearing herein; 3.Both parties shall do all such things and execute all such written materials as may be required to carry out the full intent and meaning of this Agreement; and 4.This is the entire Agreement between the parties in respect of the matter referred to herein and no amendment or interpretation of this Agreement will be binding on the parties unless same is in writing executed by the parties hereto. 5.Dolphin shall permit any duly authorized representative of DGT, during normal business hours and at DGT's sole risk and expense, to enter upon and into any premises of Dolphin for the purpose of inspecting the service. 6.Nothing contained herein shall be deemed or construed to create between the parties hereto a partnership or joint venture. No party shall have the authority to act on behalf of any other party, or to commit any other party in any manner or cause whatsoever or to use any other party's name in any way not specifically authorized by this Agreement. No party shall be liable for any act, omission, representation, obligation or debt of any other party, even if informed of such act, omission, representation, obligation or debt. 7.Subject to the limitations hereinbefore expressed, this Agreement shall enure to the benefit of and be binding upon the parties and their respective successors and permitted assigns. 8.No condoning, excusing or overlooking by any party of any default, breach or non-observance by any other party at any time or times in respect of any covenants, provisos or conditions of this Agreement shall operate as a waiver of such party's rights under this Agreement in respect of any continuing or subsequent default, breach or non-observance, so as to defeat in any way the rights of such party in respect of any such continuing or subsequent default or breach, and no waiver shall be inferred from or implied by anything done or omitted by such party, save only an express waiver in writing. 9.No exercise of a specific right or remedy by any party precludes it from or prejudices it in exercising another right or pursuing another remedy or maintaining an action to which it may otherwise be entitled either at law or in equity. Page 4 of 5 + + + + + + 10.Marginal headings as used in this Agreement are for the convenience of reference only and do not form a part of this Agreement and are not be used in the interpretation hereof. 11.If any Article, part, section, clause, paragraph or subparagraph of this Agreement shall be held to be indefinite, invalid, illegal or otherwise voidable or unenforceable, the entire Agreement shall not fail on account thereof, and the balance of this Agreement shall continue in full force and effect. 12.Time shall be of the essence of this Agreement. 13.Whenever the singular or masculine or neuter is used throughout this Agreement the same shall be construed as meaning the plural or feminine or body corporate when the context or the parties hereto may require. IN WITNESS WHEREOF the parties hereto have hereunto executed this Agreement on the 1st day of JUNE , 2006 , but effective as of the Date of Commencement. SIGNED FOR AND ON BEHALF of DGT CORP. ) by its duly authorized officers: ) ) ) /s/ Norman Joe, President ) Authorized Signatory ) ) SIGNED FOR AND ON BEHALF of DOLPHIN INDUSTRIES LIMITED ) ) by its duly authorized officers: ) ) ) /s/ Chung-Keung Ho, President/Director ) Authorized Signatory ) \ No newline at end of file diff --git a/full_contract_txt/HYDRONTECHNOLOGIESINC_03_31_1997-EX-10.47-SPONSORSHIP AGREEMENT.txt b/full_contract_txt/HYDRONTECHNOLOGIESINC_03_31_1997-EX-10.47-SPONSORSHIP AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..2c7d2c4b0cc12092b175aa543c30c4dfdf563441 --- /dev/null +++ b/full_contract_txt/HYDRONTECHNOLOGIESINC_03_31_1997-EX-10.47-SPONSORSHIP AGREEMENT.txt @@ -0,0 +1,211 @@ +SPONSORSHIP AGREEMENT + + THIS SPONSORSHIP AGREEMENT ("Agreement") is made and entered into as of this 1st day of January, 1997, by and between HYDRON TECHNOLOGIES, INC., a New York corporation with its principal offices located at 1001 Yamato Road, Suite 403, Boca Raton, Florida 33431, ("Hydron") and MIAMI DOLPHINS, LTD., a Florida limited partnership with its principal offices located at 7500 Southwest 30th Street, Davie, Florida 33314 ("Dolphins"). + + WHEREAS, the Dolphins own and operate the Miami Dolphins, a professional football team and member of the National Football League, which presently is scheduled to play its home games at Pro Player Stadium in Miami, Florida (the "Stadium"); and Hydron desires to be a sponsor of the Miami Dolphins for certain entertainment and promotional purposes in connection with the Miami Dolphins including its home games during the term of this Agreement; and + + NOW THEREFORE, for good and valuable consideration, the receipt of which is hereby acknowledged, Hydron and the Dolphins hereby agree as follows: + + 1. TERM OF AGREEMENT + + 1.1 The term of this Agreement shall commence on the date hereof and terminate upon the conclusion of the week following the conclusion of the Dolphins 2000 regular season or post season, if applicable (the "Term" or "Initial Term"). However, this Agreement may be earlier terminated in accordance with the provisions hereof. + + 1.2 Hydron shall have the right to terminate this Agreement upon written notice to Dolphins at any time between November 1, 1997 and December 15, 1997, in which event this Agreement shall be terminated following the Dolphins last 1997 regular or post-season game, if any. If Hydron does not timely exercise its right to terminate this Agreement, then Hydron agrees that this Agreement shall continue for the entire four (4) year term unless earlier terminated pursuant to Section 8 of this Agreement. + + 2. SPONSORSHIP RIGHTS + + 2.1 For the Term of this Agreement, the Dolphins will provide Hydron with certain advertising and promotional benefits as are set forth in and in accordance with Exhibit "A" attached hereto and made a part hereof (the "Sponsorship Rights"). + + 2.2 For the Term of this Agreement, Hydron shall be designated as a sponsor of the Dolphins in the Sunscreen/Skin Care Category (as defined below) and a licensee of the Marks (as defined below) in the Sunscreen/Skin Category by the Dolphins. For purposes of this Agreement, the term "Sunscreen/Skin Care Category" means the product category consisting of sunscreen, sun protection and similar skin care products. + + 2.3 The Sponsorship Rights granted by the Dolphins to Hydron are subject to + +termination in whole or in part at any time upon written notice to Hydron if such Sponsorship Rights conflict with any exclusive advertising rights granted by NFL Properties, Inc. to one of its advertisers or sponsors. In the event of any such termination of exclusivity, the non-terminated Sponsorship Rights granted to Hydron by the Dolphins shall nonetheless continue for the remainder of the Term and the provisions of Section 8.2 shall apply. As of the date hereof, the Dolphins have no knowledge of any claim by NFL Properties that the Sponsorship Rights violate or conflict with exclusive rights granted by NFL Properties. + + 3. CONSIDERATION + + 3.1 In consideration of the Sponsorship Rights granted to Hydron hereunder: + + (a) Hydron shall pay to the Dolphins an aggregate amount of $96,000 (plus any applicable sales and other taxes) as follows: Hydron shall pay Dolphins the sum of $24,000 (plus any applicable sales and other taxes) on July 1, 1997, July 1, 1998, July 1, 1999 and July 1, 2000. + + 3.2 In the event that the consideration is not paid by Hydron on or before the applicable payment due date, said failure to pay shall be considered a material breach by Hydron, and the Dolphins may elect to charge Hydron a late fee of 1.5% per month of the payment then due and owing until it is paid in full. The Dolphins agree to provide written notice to Hydron of the failure to receive any payment, and Hydron shall have a five (5) business day period following delivery of written notice in which to cure the payment default before the Dolphins may elect to terminate this Agreement and pursue applicable remedies. It is agreed by Hydron that any such election of remedies does not waive any other remedies for breach of contract available to the Dolphins. + + 3.3 Except as otherwise specifically provided in this Agreement, including Exhibit "A", each of the parties shall pay its own expenses of performing its obligations under this Agreement. + + + + + + 4. USE OF MARKS + + 4.1 Hydron and the Dolphins may use the name, logos, colors, trademarks, service marks, or other identifying features ("Marks") of the other, as specifically contemplated in connection with the Sponsorship Rights, subject to any limitations set forth in this Agreement. + + 4.2 All advertising material and any use of the other parties' Marks by a party is subject to the prior written approval of the Mark owner. Either party shall submit all such materials or proposed usage of a Mark to the other party at least two weeks prior to its intended use. The Mark owner shall have the right to inspect and require changes or deletions (including the right to disapprove of such advertisement or use of Marks in their entirety) of advertising and promotional copy or material that the Mark owner may deem to be contrary to its policies or best interests. Such requirements will not be unreasonably imposed, and the foregoing approvals and + + 2 + +requirements will be consistently given and imposed on all sponsors or users of the Marks, as the case may be. + + 4.3 Any and all public announcements or press releases by or on behalf of the other party regarding the Sponsorship Rights or the details of this Agreement shall be subject to the consent of the other party, and each party shall have the right to approve in advance the contents and timing thereof. Notwithstanding the foregoing, the Dolphins acknowledge that Hydron, as a publicly held company, has disclosure obligations pursuant to the federal securities laws. Hydron agrees to take the comments of the Dolphins into account in preparing and disseminating such disclosure, but notwithstanding comments from the Dolphins, Hydron shall make such disclosure as may be required by law. + + 4.4 For purposes of this Agreement, the Dolphins and Hydron expressly recognize that the Marks are the unique, valid and exclusive property of the respective owner of the Mark. The Dolphins and Hydron agree that they shall not, either during the term of this Agreement or thereafter, directly or indirectly, contest the validity of the other's Marks or any of the registrations pertaining thereto, in the United States or elsewhere, nor adopt the other's Marks or any term, word, mark or designation which is in any aspect confusingly similar to the other's Marks. The Dolphins and Hydron specifically acknowledges that any use of the Marks pursuant to this Agreement shall not create for the Dolphins or Hydron any right, title or interest in the other's Marks. The Dolphins and Hydron further agree that they will not at any time do or cause to be done any act or thing, directly or indirectly, which contests or in any way impairs or tends to impair any part of the right, title and interest of the other in its Marks; and the Dolphins and Hydron shall not, in any manner, represent that it has any ownership interest in the other's Marks or the registrations therefor. Upon termination of this Agreement, the Dolphins and Hydron shall immediately terminate all use of the other's Marks. + + 4.5 Hydron expressly recognizes that the Dolphins have previously granted the exclusive rights to license and sublicense its Marks to NFL Properties, Inc., and that the grant to Hydron of the right to use the Marks is subject to the prior approval of NFL Properties, Inc. In the event that such approval is not so given by NFL Properties, Inc., then such usage rights of Hydron shall immediately terminate. The Dolphins represent that they will use reasonable efforts to obtain the consent of NFL Properties, Inc. to the execution and performance of this Agreement prior to their execution hereof. In any such event, the provisions of Section 8.2 will apply. + + 5. STADIUM POLICY; GOVERNING LEAGUE POLICIES + + 5.1 Hydron and the Dolphins agree that this Agreement shall be performed in accordance with rules and policies of the Stadium as may be applicable to this Agreement, if any. The Dolphins will advise Hydron of any development of or changes in these rules and policies that might adversely affect the terms of this Agreement. + + 5.2 The parties agree that this Agreement shall automatically be subject to any new or amended National Football League (the "NFL") rules or regulations applicable to advertising or promotional benefits provided by NFL member teams to its sponsors effective as + + 3 + +of the date such regulation shall take effect and that this Agreement shall incorporate and be subject to the Constitution, By-Laws, rules and regulations, the duly authorized resolutions of the governing body, the decrees and rulings of the commissioner and the terms and conditions of any and all agreements to which the NFL is a party and as to which the NFL has bound its member clubs (collectively all of such regulations, resolutions, decrees and agreements are referred to as the "Governing League Policies"). The Dolphins shall advise Hydron of any changes therein which may materially and adversely affect the Sponsorship Rights. As of the date hereof, the Dolphins have no knowledge of any claim by the NFL that the Sponsorship Rights violate any Governing League Rules. + + 5.3 Without limiting any other potential uses of the Dolphins' Marks, Hydron agrees that the Dolphins may allow or authorize any League Sponsor (as defined below) to engage in advertising and promotional activities in the Dolphins' local market (including, without limitation, the Stadium), or + + + + + +otherwise provide benefits to such League Sponsor, if such League Sponsor is entitled to engage in such activities or receive such benefits pursuant to any sponsorship or promotional licensing arrangement now or hereafter entered into between such League Sponsor and the NFL or any of its affiliates (including, without limitation, NFL Properties, Inc., NFL Enterprises, Inc. and NFL Films, Inc.). For purposes of this Agreement the term, "League Sponsor" shall mean any person or entity which currently is, or at any time becomes a sponsor or promotional licensee of or with respect to any NFL event or program now or hereafter in existence. By way of illustration only and without limiting the generality of the foregoing, League Sponsors may place advertising and promotional materials (including displays) in the Stadium, in connection with a League event, such as the Super Bowl. + + 5.4 If any rule or regulation of the Stadium, or any Governing League Policy as described in Sections 5.1, 5.2 or 5.3 requires the termination or revision of any Sponsorship Right, such Sponsorship Right shall be revised or terminated upon written notice to Hydron and the provisions of Section 8.2 shall apply to such termination or revisions. + + 6. REPRESENTATIONS AND WARRANTIES + + 6.1 Hydron represents and warrants to the Dolphins the following, all of which representations and warranties shall apply during the Term of this Agreement. + + (a) Hydron is a corporation in good standing under the laws of the state of New York and is duly authorized to transact business in Florida, with full power and authority to enter into and fully perform its obligations under this Agreement. The execution and delivery of this Agreement on behalf of Hydron has been duly authorized by Hydron and this Agreement + +constitutes a valid, binding and enforceable obligation of Hydron. + + (b) Neither this Agreement nor anything required to be done hereunder by Hydron violates or shall violate any corporate charter, contract or other document to which Hydron is a party or by which it is otherwise bound. + + 6.2 The Dolphins represents and warrants to Hydron the following, all of + + 4 + +which representations and warranties shall apply during the Term of this Agreement + + (a) The Dolphins is a Florida limited partnership in good standing under the laws of the State of Florida and the Dolphins is duly authorized to transact business in Florida, with full power and authority to enter into and fully perform its obligations under this Agreement. The execution and delivery of this Agreement on behalf of the Dolphins has been duly authorized by the Dolphins and this Agreement constitutes a valid, binding and enforceable obligation thereof. + + (b) Neither this Agreement nor anything required to be done hereunder by the Dolphins violates or shall violate any partnership agreement, corporate charter, contract or other document to which the Dolphins is a party or by which it is otherwise bound. + + 7. HOLD HARMLESS AND INDEMNIFICATION + + 7.1 Each of the parties shall indemnify and hold harmless the other, and their respective partners, shareholders, officers, employees, agents and representatives (collectively, the "Indemnitees") from and against any and all claims, orders, damages, liabilities, costs and expenses, including reasonable attorney's fees, arising out of the other party's negligent actions or omissions with respect to this Agreement, or such party's wilful misconduct or breach of any representation, warranty or agreement in this Agreement applicable to it. Neither party shall have an obligation to indemnify or hold harmless an Indemnitees from any claim arising from or related to the Indemnitees negligence or misconduct. Each party hereto shall promptly notify the other of any claim or litigation to which the indemnity set forth in this paragraph applies. Each of the parties agree to defend all actions to which such indemnity applies and to conduct the defense thereof at its expense and by qualified counsel, which counsel shall be reasonably satisfactory to the Indemnitees. Each of the parties agree that the foregoing indemnities also apply for the benefit of the NFL (and its affiliates), South Florida Stadium Corporation, the owner and operator of Pro Player Stadium and their respective officials, officers, partners, agents and employees, who shall be deemed third party beneficiaries of this Agreement for the purpose of enforcing these indemnity obligations. These indemnity obligations shall survive the termination or expiration of this Agreement. + + 7.2 Insurance. The Dolphins shall, at its own expense, maintain in effect throughout the term of this Agreement, comprehensive general liability insurance policies with carriers of recognized standing, with limits of liability of at least One Million Dollars ($1,000,000), governing any and all property damage and person injury (including death) arising out of activities covered by this Agreement. Hydron shall, at its own expense, maintain in effect throughout the term of this Agreement, comprehensive general liability insurance policies with carriers of recognized standing, with limits of liability of at least One Million Dollars ($1,000,000), covering any and all property damage and personal injury (including death) arising out of activities covered by this + + + + + +Agreement and shall obtain and maintain such additional insurance coverage as the Dolphins shall reasonably require with respect to any Sponsored Events or similar activities. + + 5 + + 8. TERMINATION + + 8.1(a) Without prejudice to any other rights, the Dolphins shall have the right to terminate this Agreement upon written notice to Hydron if Hydron fails to perform or comply with any term or condition of this Agreement within five (5) business days following delivery of written notice for a payment default or within thirty (30) days following written notice of any other breach of this Agreement sent to Hydron stating such failure or failures; provided that any such failure remains uncured at the end of such period. + + (b) Without notice to any rights, Hydron shall have the right to terminate this Agreement upon written notice to Dolphins, if Dolphins fail to perform or comply with any material terms or conditions of this Agreement within thirty (30) days following delivery of written notice to Dolphins stating such failure or failures; provided that any failure remains uncured at the end of such period. + + 8.2 This Agreement may be terminated by the Dolphins or modified to reduce or eliminate certain promotional benefits (such as use of Marks or Sponsorship Rights), as described in Sections 2.3, 4.5 and 5.4 hereof. Upon any such termination or modification, the Dolphins will in good faith attempt to substitute a promotional benefit of equivalent promotional value for any benefits that the Dolphins was forced to eliminate; or, if the Dolphins is unable to substitute a promotional benefit of similar magnitude, then the Dolphins and Hydron shall attempt, in good faith, to agree upon an adjustment in the amount of fees payable by Hydron to the Dolphins under this Agreement. If the Dolphins and Hydron cannot agree upon an adjustment in the amount of fees payable hereunder, then Dolphins and Hydron agree to arbitrate the adjustment in fees and to be bound by the decision of the arbitrators. Any such arbitration shall be conducted in accordance with the rules of the American Arbitration Association. + + 8.3 Upon termination of this Agreement, all rights and privileges granted to Hydron hereunder shall automatically revert to the Dolphins. Upon termination of this Agreement by the Dolphins pursuant to paragraph 8.1(a), any and all payments then or later due to the Dolphins shall + +become due and payable in full immediately, and no portion of any prior payments made to the Dolphins shall be refundable. + + 8.4 In the event that Hydron terminates this Agreement pursuant to the provisions of Section 8.1(b), then the fees paid, if any, for the balance of the term of this Agreement shall be immediately refunded to Hydron provided Hydron has not received sponsorship rights or benefits equal to such fees. + + 9. MISCELLANEOUS + + 9.1 The parties hereto agree to maintain in confidence the terms and conditions of this Agreement, except to the extent that a proposed disclosure by a party of any specifications or conditions hereof is authorized in advance by the other party pursuant to Section 4.3 or is otherwise required by law. + + 6 + + 9.2 It is mutually understood and agreed that Hydron and the Dolphins, and their respective partners, officers, employees, representatives and agents are, at all times, herein, acting and performing separately and independently of each other and are in no way or manner to represent themselves as agents or employees of the other party. As such, no party shall incur any expenses or create any liens or encumbrances in another party's name or against another party's interests. This Agreement shall not create a joint venture, partnership, or a relationship of principal and agent, or of employer and employee, between the parties. + + 9.3 All notices required to be given hereunder shall be properly served if in writing and delivered either by (i) personal delivery, (ii) certified or registered mail, postage prepaid, facsimile, or (iii) by recognized overnight courier service which delivers only upon the signed receipt of the addressee, which in any case shall be delivered to the respective addresses set forth at the beginning of this Agreement or such other addresses as may be designated by written notice by such party. Notice shall be deemed given on the date of delivery of such notice to the recipient or the date of refusal to accept delivery of such notice by the addressee or its agent. + + 9.4 In connection with any action arising from or in connection with the enforcement of this Agreement, the prevailing party shall be entitled to an award of its expenses, including reasonable attorneys' fees and disbursements, incurred or paid before and at trial or any other proceeding which may be instituted, at any tribunal level, and whether or not suit or any other proceeding is instituted. + + 9.5 This Agreement shall be governed by and construed in accordance with the laws of the State of Florida. Jurisdiction and venue for any legal proceedings arising out of this Agreement shall exclusively lie in the + + + + + +state and federal courts situate in Broward County, Florida. + + 9.6 No party may assign any of its rights or obligations + +hereunder without the prior written consent of the other party, except that Hydron may assign its rights and obligations under this Agreement to its parent, its successor or to an affiliate (as such term is defined under the rules and regulations promulgated under the federal securities laws of the U.S.) upon the reasonable consent of the Dolphins that such affiliate assignee has the financial means and corporate authority to perform such obligations and Hydron may not withhold its consent to an assignment of this Agreement in the event of a merger or reorganization of the Dolphins, a sale of all or substantially all of the Dolphins' assets or a consolidation of the Dolphins with any of its affiliates or related parties. + + 9.7 In the event that the performance of this Agreement is prevented because of an act of nature or force majeure or if the exhibition of any scheduled home games of the Dolphins is canceled because of strike, lockout, labor dispute or other cause of similar nature beyond the reasonable control of the Dolphins, the same shall not constitute a breach of this Agreement. The Dolphins hereby agree, in good faith, to attempt to reschedule any aspect of the Sponsorship Rights which is prevented from occurring as scheduled, at such date as may be + + 7 + +reasonably agreeable to the Dolphins and Hydron. If one or more events or benefits are unable to be rescheduled during the Term of this Agreement, the provisions of Section 8.2 shall apply in the same manner as if such failure to reschedule caused a termination of a Sponsorship Right. Nothing stated in this Agreement grants Hydron any sponsorship, promotional or other rights with respect to any Super Bowl, Pro Bowl or NFL conference championship or play-off games or any other football game(s) which are not part of the preseason or regular season schedule of games to be played at home by the Miami Dolphins. + + 9.8 This Agreement (including Exhibit "A") sets forth the entire understanding and agreement of the parties hereto with respect to its subject matter and supersedes all prior under standings or agreements between the parties relating to the same subject matter. Any amendments or modifications to this Agreement shall be in writing, as mutually agreed upon by both parties. + + IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their respective authorized representatives, effective as of the date first shown above. + + HYDRON TECHNOLOGIES, INC. + + By: /s/ Harvey Tauman ------------------------------------- Harvey Tauman President and Chairman Date: ------------------------------ + + MIAMI DOLPHINS, LTD., a Florida limited partnership + + By: SOUTH FLORIDA FOOTBALL CORPORATION, its General Partner + + By: /s/ Eddie Jones ------------------------------------- Eddie Jones, President Date: ------------------------------ + + 8 + + EXHIBIT A + + MIAMI DOLPHINS/HYDRON TECHNOLOGIES, INC. + + SPONSORSHIP RIGHTS + +Season-Long Merchandising + +PRINT ADVERTISING + +The Dolphins will provide to Hydron: + +o One full page, four (4) color advertisement for Hydron in all ten (10) issues of GameDay Magazine, the official publication of the National Football League and the Miami Dolphins distributed at Pro Player Stadium during each year during the Term. + +PROMOTIONAL MEDIA + + + + + +In connection with this Agreement, Dolphins will provide the following promotional media: + + 1996 BENEFITS PROVIDED TO HYDRON + +o Executive Suite: 320A. Use of the executive suite for the December 8, 1996 game vs. the New York Giants. The game will include twelve (12) tickets and two (2) parking passes. + +o Stadium Signage: Hydron sign will be in place on the West Scoreboard - Secondary Tri-Vision Panel for the December 8, 1996 game vs. the New York Giants and the December 16, 1996 game vs. the Buffalo Bills. + +o Product Sampling: Hydron will provide ten thousand (10,000) sunscreen samples which will be distributed to club level patrons prior to and during the December 8, 1996 game vs. the New York Giants. The Dolphins will permit Hydron to set up four (4) display booths which will be staffed by Hydron employees to distribute the sunscreen. + + 1997-2000 BENEFITS TO HYDRON + +o "Defensive Play of the Week" Promotion: Hydron will be the title sponsor of the 30-second Jumbtron video "Defensive Player of the Week" promotion which will be displayed during each Miami Dolphins home game. + + 9 + +o Product Sampling: The Dolphins will permit Hydron to distribute sunscreen product samples to fans in attendance at one (1) home game during each contract year. Hydron will set up four (4) display booths and will staff them with Hydron employees. The Dolphins will also permit Hydron to distribute sunscreen product samples during the first two (2) weeks of training camp at the Dolphins training facility in Davie during each contract year. + +o Team Affiliation: Hydron will be permitted to advertise itself as a "Proud Sponsor of the Miami Dolphins" in the skin care category. + +o Easements: The Miami Dolphins will use reasonable efforts to provide endorsements of Hydron sunscreen/skin protection products from its training staff. + + 10 \ No newline at end of file diff --git a/full_contract_txt/HYPERIONSOFTWARECORP_09_28_1994-EX-10.47-EXCLUSIVE DISTRIBUTOR AGREEMENT.txt b/full_contract_txt/HYPERIONSOFTWARECORP_09_28_1994-EX-10.47-EXCLUSIVE DISTRIBUTOR AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..59847b3f55e6bdf93767c3dd3362a1193ea7f85e --- /dev/null +++ b/full_contract_txt/HYPERIONSOFTWARECORP_09_28_1994-EX-10.47-EXCLUSIVE DISTRIBUTOR AGREEMENT.txt @@ -0,0 +1,335 @@ +1 + + EXCLUSIVE DISTRIBUTOR AGREEMENT + + EXCLUSIVE DISTRIBUTOR AGREEMENT ("Agreement") dated as April 15, 1994 by and between IMRS OPERATIONS INC. d/b/a IMRS INC., a Delaware corporation with its principal place of business at 777 Long Ridge Road, Stamford, Connecticut 06902, U.S.A. (hereinafter referred to as "Developer") and Delteq Pte Ltd, a Singapore company (and a subsidiary of Wuthelam Industries (S) Pte LTD) with its principal place of business at 215 Henderson Road, #101-03 Henderson Industrial Park, Singapore 0315 (hereinafter referred to as "Distributor"). + + WHEREAS, Developer has developed certain computer programs and related documentation more particularly described in Schedule A attached hereto (the "Products") and desires to grant distributor the right to market and distribute the Products in Singapore, Malaysia, Indonesia, Thailand, and Brunei (the "Territory"); and + + WHEREAS, Distributor is in the business of marketing and distributing computer-related products and desires to have Developer grant to it the right to market and distribute the Products in the Territory. + + NOW, THEREFORE, in consideration of the mutual promises set forth herein, and for other good and valuable consideration, the receipt and sufficiency whereof are hereby acknowledged, the parties hereto agree as follows: + +1. LICENSE + + 1.1 Exclusive Distribution License. ------------------------------ + + Upon the terms and subject to the conditions of this Agreement, Developer hereby grants to Distributor an exclusive, non-transferable fight and license to market and distribute the Products in the Territory. Distributor shall distribute the Products to existing and new customers of Distributor located in the Territory (the "End-Users") who enter into an End-User License Agreement (as hereinafter defined). The Products shall be in executable object code form only and Distributor shall have no fight to the source code of such Products. The Products distributed to End-Users shall be in executable object code form only. Distributor shall not itself, nor allow others to modify, translate, decompile, nor create or attempt to create, by reverse engineering or otherwise, the source code from the object code of the Products supplied hereunder, or adapt the Products in any way or for use to create a derivative work. Should Distributor wish to create such a derivative work, Distributor must first seek and obtain express written permission to do so from the Developer and Developer may withold such permission at its sole discretion. Distributor may not, and may not permit End-Users to, use, reproduce, siblicense, distribute or dispose of the Products, in whole or in part, except as expressly permitted under this Agreement. + + 1 + +2 + + 1.2 The Territory. ------------- + + Distributor may market and distribute the Products solely within the Territory. Distributor shall not have the right to establish third-party agreements for the license, sale, installation and/or support of the Products in the Territory or elsewhere, without the prior written approval of Developer, which approval may be withheld for any reason. + + 1.3 License of the Products to End-Users; Other Responsibilities of --------------------------------------------------------------- Distributor. - - - ----------- + + (a) In connection with Distributor's license and distribution of the Products to End-Users, Distributor will have End-Users execute a Software License Agreement in the form attached hereto as Schedule B (the "End-User License Agreement"). Distributor may not negotiate the terms of the End-User License Agreement with any prospective End-User or agree to any conflicting, different or additional terms from those set forth in the End-User License Agreement without Developer's prior written consent. Developer shall have no liability to Distributor in the event any prospective End-User refuses to agree to enter into an End-User License Agreement. + + (b) Distributor will at all times during the term hereof use all reasonable efforts to promote and increase sales of Products throughout the Territory, and will work diligently to obtain orders for Products. Developer shall, during the term hereof, adopt such policies, strategies, prices, customer license terms and conditions, and decisions which will reasonably support Distributor in promoting and increasing sales of Products throughout the Territory and shall respond to Distributor as soon as reasonably practicable with respect to the foregoing. + + (c) Distributor will promote the sale of Products throughout the Territory to End-Users by means of personal visits, presentations, seminars, correspondence. Specific marketing and sales programs will be defined jointly by Distributor and Developer. + + + + + + (d) Distributor hereby acknowledges that prompt, courteous and professional service of all End-Users and the fostering and maintenance of good relations with End-Users is of paramount importance to Developer, and Distributor hereby agrees to use reasonable efforts to so serve End-Users and promote such relations with End-Users. Distributor shall call upon End-Users regularly, provide assistance and information to End-Users as requested by End-Users or Developer, serve as liaison between End-Users and Developer, and comply with such policies and procedures as Developer may from time to time communicate to Distributor. + + (e) Distributor shall take all necessary steps to ensure that it and all of its sales personnel are fully familiar with and can effectively demonstrate the Products, are familiar with the Developer's then-current price list, and applicable Developer policies and procedures. + + (f) Distributor shall attend such annual sales and consulting meetings for, among other things, training and education as Developer shall reasonably require. Distributor + + 2 + +3 + +shall be responsible for the cost of any travel or lodging for attendance at such meetings required by Developer. + + (g) All payments by End-Users for Products shall be made directly to Distributor, and Distributor shall so advise Developer of the End-Users to whom sales are made. + + (h) Distributor will not incur or create any liability on behalf of Developer or in any way pledge or purport to pledge the credit of Developer. + + (i) Distributor will: (i) work closely with Developer to implement the agreed upon sales strategy and marketing strategy for Developer in the Territory; (ii) prepare any market survey or other marketing or sales report reasonably requested by Developer from time to time; and (iii) inform Developer promptly of any commercial, financial, technical or other information which would be of interest to Developer, including but not limited to foreseeable developments regarding End-Users' needs of which Distributor becomes aware. + + (j) Distributor will observe all directions and instructions given by Developer in relation to Developer's commercial policy, delivery and payment terms and the distribution of Products, and, in the absence of any such directions or instructions in relation to any particular matter, will act in such manner as Distributor reasonably considers to be most beneficial to the best interests of Developer. + + (k) Distributor will observe and take all necessary or appropriate steps to observe the standards and technical specifications applicable to Developer's business as may be communicated from time to time by Developer to Distributor. + + (1) Developer shall be the sole source of all copies of the Products or their components distributed by Distributor under the terms of this Agreement. Furthermore, Developer's and the Product names shall appear on the initial screen in all cases. Distributor may mark all such products and materials with its own names or logos to indicate that the Distributor is a marketer of the Products, provided that any such label or lettering is no larger in size than that used for the name and logo of Developer. + + (m) Distributor shall allocate a minimum of two (2) dedicated people to sell and support the Products full-time. Distributor shall immediately notify Developer in the event that these people are assigned additional responsibilities that prevent them from remaining dedicated to the Products full-time. + + 3 + +4 + + 1.4 Product Changes. --------------- + + Developer retains the right, in its sole discretion, to upgrade or modify the Products from time to time. In addition, upon ninety (90) days prior written notice to Distributor, Developer may add or delete Products from Schedule A. Upon receipt of any such notice of any upgrade or modification, or upon the expiration of the notice period set forth above for additions or deletions to Schedule A, Distributor shall cease to market and distribute earlier versions of the Products and/or Products deleted from Schedule A. + + 1.5 License to Use Trademark and Trade Name. --------------------------------------- + + Any and all trademarks and trade names which Developer uses in connection with the license granted hereunder are and shall remain the exclusive property of Developer. Nothing contained in this Agreement shall be deemed to give Distributor any right, title or interest in any trademark or trade name of Developer relating to the Products. Subject to notice in writing from Developer which modifies or cancels such authorization, during the term of this Agreement, Distributor may use at no charge the trademarks and trade names specified by Developer in writing for normal advertising and promotion of Products. Developer occasionally uses third party trademarks, trade names or screen shots in advertising; Distributor may not use such trademarks, trade + + + + + +names or screen shots in writing for advertising without the prior written permission from the third party developer. + +2. PRICE, PAYMENT AND SHIPMENT. --------------------------- + + 2.1 Price. ----- + + Distributor shall adhere to the then current Developer Prices for each Product (collectively, the "Prices"). Developer's current Prices for each Product are set forth in Schedule C. Developer may increase or decrease the Prices for any or all Products upon written notice to Distributor. Distributor must receive, for each instance, express written permission from Developer to sell Product at any price other than such Prices. + + 2.2. Orders, Payment and Shipment. ---------------------------- + + Upon Developer's receipt of a written order from Distributor (each an "Order") together with a copy of an executed End-User License Agreement and Contract Summary Form (Appendix D), Developer will ship to Distributor the designated quantities of the Products. At Distributor's expense, the Products shall be shipped by Developer to Distributor F.O.B. origin, freight pre-paid, with risk of loss to pass to Distributor upon delivery of the Products by Developer to a common carrier. Notwithstanding the above, upon notice to Distributor, Developer may ship the Software directly to Distributor's customer. The terms and conditions of this Agreement shall apply to all Orders submitted to Developer by Distributor. Orders issued by + + 4 5 + +Distributor to Developer are solely for the purpose of requesting delivery dates and quantities. All Orders shall be subject to acceptance by Developer; Developer will not unreasonably delay acceptance of any order. Developer shall use reasonable efforts to deliver accepted Orders but shall not be liable for any damages to Distributor or to any third party caused by Developer's delay or error in filling, or failure to fill, any Orders for any reason. Except as otherwise provided herein, all fees and expenses payable hereunder for which Developer issues an invoice to Distributor shall be due and payable thirty (30) days from the date of the invoice. A late payment charge of the lesser of one and one-half percent (1.5%) per month or the highest interest rate allowed by applicable law shall be charged upon all unpaid amounts due hereunder for more than thirty (30) days. + + 2.3 Reporting; Royalties. -------------------- + + Distributor shall submit Monthly Sales and Royalty Reports and make payments to Developer as provided herein. All royalties paid to Developer shall be based upon Developer's list prices in U.S. Dollars, except as otherwise agreed in writing by Developer. + + Software license fees associated with Software license agreements in which the sales cycle begins on or after May 1, 1994 (hereinafter "New Software license agreements") for Product sites located in the Territory, shall be allocated and distributed as follows: + + Gross Software Revenue Generated % to Distributor -------------------------------- ---------------- Per Annum July 1- June 30 + + US$O -- $999,999 40% US$1,O00,000 + 50% + + On July 1 each year, the gross software revenue generated figure will be reset to zero and the accumulation of software revenues will restart. + + However, the foregoing allocation of such fees associated with the New Software license agreements involving a headquarter Product or other site licenses situated outside of the Territory may be subject to reduced percentages to Distributor due to royalties owed to other Developer entities, affiliates, or distributors located outside the Territory, who may also have participated in the sale. Each such situation will be evaluated individually and a final decision on the royalty due will be based upon each party's relative contribution and will be made in Developer's sole discretion. The general guidelines for such cases are outlined in Appendix E (Bergamo Rules). + + Installation, consulting, and training fees associated with the Products are due and payable to the party performing the services. + + 5 6 + + License Renewal and Maintenance Fees will be split evenIy with 50% distributed to Developer and 50% distributed to Distributor, also subject to paragraph 4 of this section 2.3. + + Distributor will submit a monthly report to Developer which accurately identifies the Software license fees, maintenance fees, and any other fees set forth in this Agreement (repons outlined in Schedule D). This report is due at + + + + + +the earliest possible time, but in no event later than ten (10) days following the end of each calendar month Payment by Distributor of the applicable royalty fees to Developer shall accompany the report; provided, however, that Developer shall have the reasonable fight to inspect Distributor's books from time to time during the term hereof and for a one (1) year period after the termination of this Agreement for purposes of verifying the royalties payable to Developer. In addition, Distributor shall report the acquisition of each new license for the Software system to Developer and will provide either an English translation of the End-User License Agreement or a completed contract extract schedule in the form of Exhibit D (Contract Summary Form) within one (1) day of accepting the order. + + 24 Inspection and Acceptance. ------------------------- + + Distributor shall inspect all Products immediately upon delivery and shall, within seven (7) calendar days, give written notice to the common cartier and Developer of any claim for damages or shortages. Distributor shall give written notice to Developer within thirty (30) calendar days of delivery in the event that any Product does not conform with the terms of this Agreement. If Distributor fails to give any such notice, the Products shall be deemed accepted for all purposes of this Agreement. + + 2.5 Taxes. ----- + + In addition to the Prices and other fees payable hereunder, Distributor shall record and pay any federal, state, local or other duties, withholding and excise taxes, now or hereafter applied on the sale, transportation, import, export, licensing or use of the Products including sales tax, value added tax or similar tax. Any taxes imposed by federal, state or any local government or any amount in lieu thereof, including interest and penalties thereon, paid or payable at any time by Developer in connection with Developer's license to Distributor, exclusive of taxes based on Developer's net income, shall be borne by Distributor. + + Distributor shall co-operate with and assist Developer, as reasonably necessary, to obtain United States tax credits for any duties or taxes described in this Section 2.5 which may be credited to and/or recovered by Developer and applied by Developer to reduce its United States tax liability. In the event Developer obtains any such tax credits, Developer shall notify Distributor of the amount thereof and Distributor shall be entitled to apply such amount against future amounts payable by Distributor to Developer hereunder. + + 6 + +7 + +3. MAINTENANCE AND SUPPORT. ----------------------- + + 3.1 Distributor Support ------------------- + + Distributor shall remain solely responsible for all installation, maintenance, consulting and support services to the End-Users with regard to the Products. Developer agrees to deliver to Distributor together with the first Order delivered to Distributor a copy of the Product to be used solely by Distributor's personnel providing installation, maintenance, consulting or support services to End-Users and shall only be used at Distributor's site. Distributor's failure to maintain the confidentiality of the Products pursuant to the terms of this Agreement shall be deemed a material breach of this Agreement. As mutually agreeable, Developer, Developer's affiliates, or Distributor may each provide local support to the sites of multi-location clients, each on behalf of the other where the provisions of such support will enhance the quality of support provided to the client. Such services will be provided at the local billing rate or such alternative billing rate as shall be agreed between the parties. The party providing the support shall receive all revenues arising therefrom unless otherwise agreed. Furthermore, it is understood that travel expenses, if any, are to be borne by the client utilizing the support services or by the Distributor unless otherwise agreed. For End-Users that have a World Wide Retainer in place, Distributor will provide local support in the Territory as defined in the World Wide Retainer (Schedule F). + + 3.2 Audit Rights. ------------ + + Distributor shall maintain accurate books and records of all End-User License Agreements granted for the Products (which will include at a minimum the location, type and number of products and sites, renewal and payment terms and any special conditions or terms), the End-Users receiving maintenance, and consulting and support services, payable under this Agreement. Upon reasonable notice to Distributor, Distributor shall make such books and records available to Developer, at Distributor's place of business during normal business hours, to audit the payments being made by Distributor hereunder. + + 3.3 End-User Training and Developer Consulting Services --------------------------------------------------- + + Distributor shall be solely responsible for the training of End-Users. Developer may be available at its then current standard rates to provide training, special enhancements, customization and other special work or services to either Distributor or End-Users. + + + + + + 7 + +8 + +4. CONFIDENTIALITY AND PROPRIETARY RIGHTS. -------------------------------------- + + 4.1 Confidentiality. --------------- + + Distributor acknowledges that in the course of dealings between the parties, Distributor may acquire information about Developer, its business activities and operations, its technical information and trade secrets, including but not limited to the Products, all of which are highly confidential and proprietary to Developer (the "Confidential Information"). Confidential Information shall not include information generally available to or known by the public, or information independently developed outside the scope of this Agreement. Distributor shall hold all such Confidential Information in strict confidence and shall not reveal or use the same except pursuant to a court order or upon written request of Developer. The Confidential Information shall be safeguarded with at least as great a degree of care as Distributor uses to safeguard its own most confidential materials or data relating to its own business, but in no event less than a reasonable degree of care. + + 4.2 Proprietary Rights. ------------------ + + Distributor acknowledges and agrees that the Products, and all copies thereof, constitute valuable trade secrets of Developer and/or proprietary and confidential information of Developer and title thereto remains in Developer. Ownership of all applicable copyrights, trade secrets, patents and other intellectual property rights in the Products are and shall remain vested in Developer. All other aspects of the Products, including without limitation, algorithms, models, programs, methods of processing, design and structure of individual programs and their interaction and programming techniques employed therein shall remain the sole and exclusive property of Developer and shall not be sold, revealed, disclosed or otherwise communicated, directly or indirectly, by Distributor to any person, company or entity whatsoever other than as expressly set forth herein. The copyright notice and restricted rights legends contained in the Products shall appear on all tapes, diskettes and other tangible media distributed by Distributor. + + 4.3 Specific Remedies. ----------------- + + If Distributor commits a breach of any of the provisions of Sections 4.1 or 4.2 above, Developer shall have, in addition to all other fights in law and equity, (a) the right to have such provisions specifically enforced by any court having equity jurisdiction, it being acknowledged and agreed that any such breach will cause irreparable injury to Developer and that money damages will not provide an adequate remedy, and (b) the right to require Distributor to account for and pay to Developer all compensation, profits, monies or other tangible benefits (collectively "Benefits") derived or received as the result of any transactions constituting a breach of any of the provisions of this Article 4, and Distributor hereby agrees to account for and pay such Benefits. + + 8 + +9 + + 4.4 Covenant Not to Compete. ----------------------- + + During the term of this Agreement and for a period of two (2) years after the termination hereof for any reason, Distributor will not market, or attempt to market, a computer program which competes in any way with the Products in the areas of consolidation, financial information, financial transaction processing, reporting, data collection, or modeling, including but not limited to the use of personal computers, nor which competes with any modification, alteration or enhancement to the Products which is developed during the term of this Agreement. + +5. LIMITED WARRANTY. ---------------- + + 5.1 Limited Warranty. ---------------- + + For ninety (90) days after delivery of a Product to Distributor, Developer warrants that media upon which the Products are delivered shall be of good quality and workmanship. Upon written notice from Distributor of defective media for a Product, Developer shall use reasonable efforts to promptly provide replacement media. + + 5.2 Disclaimer of Warranties. ------------------------ + + EXCEPT FOR THE LIMITED WARRANTY SET FORTH IN SECTION 5.1, THE PRODUCTS ARE PROVIDED "AS IS". DEVELOPER SPECIFICALLY DISCLAIMS ALL WARRANTIES EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO, IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT'TO THE PRODUCTS OR DEFECTS IN THE TAPE, DISKETTE OR OTHER TANGIBLE MEDIA AND DOCUMENTATION, OPERATION OF THE PRODUCTS, AND ANY PARTICULAR APPLICATION OR USE OF THE PRODUCTS. + +6. LIMITATION OF LIABILITY. ----------------------- + + + + + + IN NO EVENT SHALL DEVELOPER BE LIABLE FOR ANY LOSS OF PROFIT OR ANY OTHER COMMERCIAL DAMAGE, INCLUDING BUT NOT LIMITED TO SPECIAL, INCIDENTAL, CONSEQUENTIAL OR OTHER INDIRECT DAMAGES UNDER ANY CAUSE OF ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, CLAIMS ARISING FROM MALFUNCTION OR DEFECTS IN THE PRODUCTS. DEVELOPER'S MAXIMUM LIABILITY HEREUNDER IS EXPRESSLY LIMITED TO THE LESSER OF: THE AMOUNT PAID UNDER THIS AGREEMENT BY DISTRIBUTOR TO DEVELOPER WITHIN THE SIX (6) MONTH PERIOD IMMEDIATELY PRECEDING THE CAUSE GIVING RISE TO THE CLAIM; OR FIVE HUNDRED THOUSAND DOLLARS ($5OO,000). + + 9 + +10 + +7. DISTRIBUTOR OBLIGATIONS. ----------------------- + + 7.1 Marketing Efforts. ----------------- + + Distributor agrees to use its best efforts to promote the sale of the Products in the Territory. Distributor agrees to permit Developer to review all of Distributor's promotion and advertising material for the Products prior to use. Distributor shall not use and shall withdraw and retract any promotion or advertising that Developer finds unsuitable, or is in breach of the terms of this Agreement. + + 7.2 Prohibited Practices. -------------------- Distributor may not make any contracts or commitments on behalf of Developer nor make any warranties or other representations regarding the Products other than those authorized herein or by Developer in a separate writing. + + 7.3 Export Notice. ------------- + + Distributor agrees to provide Developer with reasonable advance notice of each country- to which it intends to export the Products. Prior to exporting to a foreign country for the first time, Distributor shall provide Developer with a reasonable opportunity to file such proprietary rights notices, applications, and other documents as Developer determines to be reasonably necessary to protect in such country the proprietary rights associated with the Products. Distributor agrees at Developer's expense to cooperate with Developer in the protection of such proprietary rights in each country to which it exports the Products. + + 7.4 Compliance with Laws. -------------------- Distributor agrees to comply with all applicable laws and regulations, both foreign and domestic, in its performance under this Agreement, including, but not limited to, domestic and foreign export/import laws and regulations. + +8. TERMS AND TERMINATION. --------------------- + + 8.1 Term. ---- + + This Agreement shall have an initial term of one (1) year from the date first above written (the "Initial Term"), and shall thereafter automatically renew for successive two (2) year periods (each a "Renewal Term"), unless earlier terminated in accordance with the terms of this Agreement. Developer may cancel this Agreement if the total gross annual software revenue does not meet DeVeloper's revenue forecast for the Distributor, such cancellation to be eftected by written notice delivered to Distributor not later than 30 days after any Developer's Fiscal Year end (June 30). Either party may cancel this Agreement effective on the last day of the Initial Term, or + + 10 11 + +any Renewal Term, by serving written notice of such termination on the other party at least ninety (90) days prior to the end of the Initial Term or any Renewal Term as the case may be. + + 8.2 Developer Termination. --------------------- + + This Agreement may be terminated immediately by Developer under any of the following conditions: + + (a) if one of the parties shall be declared insolvent or bankrupt; + + (b) if a petition is filed in any court to declare one of the parties bankrupt or for a reorganization under the Bankruptcy Code or any similar statute and such petition is not dismissed in ninety (90) days or if a Trustee in Bankruptcy or a Receiver or similar entity is appointed for one of the parties; + + (c) if Distributor does not pay Developer within thirty (30) days from the date that any payments are due hereunder; + + + + + + (d) if Distributor breaches the provisions of Sections 4.1 or 4.2 of this Agreement; or + + (e) if Distributor otherwise materially breaches the terms of this Agreement, and such breach is not cured within thirty (30) days after written notice of such breach is given by Developer. + + 8.3 Duties Upon Termination. ----------------------- + + (a) Provided termination is not a result of a material breach of Sections 4.1 or 4.2, the parties agree to continue their cooperation in order to effect an orderly termination of their relationship. Distributor may continue running the Products solely for purposes of providing maintenance to End-Users granted licenses pursuant to an End-User License Agreement prior to termination. Upon termination, Distributor shall have no fight to order or receive any additional copies of the Products and all of Distributor's rights and licenses granted hereunder shall immediately cease. Within thirty (30) days of termination, Distributor shall return all copies of any promotional materials, marketing literature, written information and reports pertaining to the Products that have been supplied by Developer. + + (b) Upon termination of this Agreement for any reason, Distributor shall forthwith return all Products, documentation and materials relating thereto to Developer. Termination of this Agreement shall not relieve Distributor of any financial obligations to Developer which remain unsettled at the date of termination, nor of the terms relating to proprietary rights, trade secrets, or non compete restrictions; provided, further, that if this Agreement is terminated for any reason, Developer shall have the option, but not the obligation to + + 11 12 + +assume at no cost to Developer, any or all of Distributor's third party agreements (including End-User Agreements) relating to the Products and to receive any and all fees therefrom. + + 8.4 Survival -------- + + The provisions of Sections 4, 5 and 9 shall survive the termination of this Agreement. + +9. INDEMNIFICATION. --------------- + + 9.1 Copyright Indemnification. ------------------------- + + Developer shall indemnify, defend and hold Distributor harmless from any claims, demands, liabilities or expenses, including reasonable attorneys' fees, directly resulting from any infringement or violation of any copyright with respect to the Product(s), as so awarded by a final judgment against Distributor by a court of competent jurisdiction that the Product(s) infringe any third party's copyright, Developer shall, in its sole discretion: + + (a) procure for Distributor the right to continue to use, distribute and sell the Product(s) at no additional expense to Distributor; + + (b) provide Distributor with a non-infringing version of the Product(s) with substantially similar functionality; or + + (c) notify Distributor that the Product(s) are being withdrawn from the market and Distributor agrees to immediately cease its distribution of such Product(s). If all Products are withdrawn from the market, this Agreement will immediately terminate. + + 9.2 Cooperation by Distributor. -------------------------- + + Notwithstanding Section 9.1 of this Agreement, Developer is under no obligation to indemnify and hold Distributor harmless unless: + + (a) Developer shall have been promptly notified of the suit, action, proceeding or claim by Distributor and furnished by Distributor with a copy of each communication, notice or other action relating to said suit, action, proceeding or claim; + + (b) Developer shall have the right to assume sole authority to conduct the trial or settlement of such suit, action, proceeding or claim or any negotiations related thereto at Developer's expense; and + + (c) Distributor shall provide reasonable information and assistance requested by Developer in connection with such claim or suit. + + 12 + +13 + + 9.3 Distributor Indemnification. --------------------------- + + Distributor shall indemnify, defend and hold Developer harmless from + + + + + +any claims, demands, liability or expenses, including reasonable attorneys' fees, incurred by Developer as a result of any claim or proceeding against Developer arising out of or based upon (i) the combination, operation or use of the Products with any hardware, products, programs or data not supplied or approved in writing by Developer, if such infringement would have been avoided but for such combination, operation or use (ii) modification of the Products by Distributor or End- Users(iii) any breach of this Agreement by the Distributor or (iv) any breach by the Distributor of any End User or other agreement to which Developer or Distributor is a party. + +10. GENERAL. ------- + + 10.1 Force Majeure. ------------- Neither party shall be liable or deemed to be in default for any delay or failure in performance (other than the payment of money) under this Agreement or interruption of service resulting directly or indirectly from acts of God, or any causes beyond the reasonable control of such party. + + 10.2 Jurisdiction and Venue. ---------------------- + + This Agreement shall be governed by and construed in accordance with the laws of the State of Connecticut, U.S.A. without regard to its conflict of taws provision. Jurisdiction for litigation of any dispute, controversy or claim arising out of or in connection with this Agreement, or the breach thereof shall be only in the Federal or the State court with competent jurisdiction located in Stamford, Connecticut. + + 10.3 Entire Agreement. ---------------- + + This Agreement, including the Schedules attached hereto, constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all previous proposals, both oral and written, negotiations, representations, commitments, writings and all other communications between the parties. This Agreement may not be modified except by a writing signed by a duly authorized representative of each of the parties. + + 13 + +14 + + 10.4 Independent Contractors. ----------------------- + + It is expressly agreed that Developer and Distributor are acting hereunder as independent contractors and under no circumstances shall any of the employees of one party be deemed the employees of the other for any purpose. This Agreement shall not be construed as authority for either party to act for the other party in any agency or other capacity, or to make commitments of any kind for the account of or on behalf of the other except to the extent and for the purposes provided for herein. + + 10.5 Assignment. ---------- + + This Agreement is not assignable by either party hereto without the prior written consent of the other, except that this Agreement shall be assignable by Developer to an affiliated entity or upon the sale of the fight to license and sublicense the Products to the purchaser of said right. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and permitted assigns. + + 10.6 Severability and Waiver. ----------------------- + + If any provision of this Agreement is determined by a court of competent jurisdiction to be invalid or unenforceable, such determination shall not affect the validity or enforceability of any other part or provision of this Agreement. No waiver by any party of any breach of any provisions hereof shall constitute a waiver unless made in writing signed by the party. + + IN WITNESS WHEREOF, the parties hereto have executed this Agreement by a duly authorized representative as of the date set forth above. + + DISTRIBUTOR: DEVELOPER: ----------- --------- DELTEQ SYSTEMS PTE LTD IMRS OPERATIONS INC. d/b/a IMRS INC. + + By: /s/ S.C. CHEN By: /s/ DAVID M. SAMPLE -------------------- ----------------------- + + Name: S.C. Chen Name: David M. Sample --------------------- + + Title: Managing Director Title: Senior Vice President + + 14 \ No newline at end of file diff --git a/full_contract_txt/HarpoonTherapeuticsInc_20200312_10-K_EX-10.18_12051356_EX-10.18_Development Agreement.txt b/full_contract_txt/HarpoonTherapeuticsInc_20200312_10-K_EX-10.18_12051356_EX-10.18_Development Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..d6b6682d47ad0ed05cc5f2594349b652c2a27657 --- /dev/null +++ b/full_contract_txt/HarpoonTherapeuticsInc_20200312_10-K_EX-10.18_12051356_EX-10.18_Development Agreement.txt @@ -0,0 +1,1985 @@ +Exhibit 10.18 Confidential EXECUTION COPY + +CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY [***], HAS BEEN OMITTED BECAUSE IT IS BOTH NOT MATERIAL AND WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. + +DEVELOPMENT AND OPTION AGREEMENT + +between + +HARPOON THERAPEUTICS, INC. + +and + +ABBVIE BIOTECHNOLOGY LTD + +Dated as of November 20, 2019 + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +TABLE OF CONTENTS + +ARTICLE 1 DEFINITIONS 1 + +ARTICLE 2 COLLABORATION MANAGEMENT + +18 + +2.1 Joint Governance Committee. 18 2.2 General Provisions Applicable to the JGC. 19 2.3 Discontinuation of the JGC. 20 2.4 Interactions Between the JGC and Internal Teams. 20 2.5 CMC Working Group. 21 2.6 Working Groups. 21 2.7 Expenses. 21 + +ARTICLE 3 DEVELOPMENT AND REGULATORY + +21 + +3.1 Initial Development Plan and Activities. 21 3.2 AbbVie Option. 24 3.3 [***]. 25 3.4 Post-Exercise Development Activities. 26 3.5 Supply of Technology for Development Purposes. 27 3.6 Expenses and Invoicing. 27 3.7 Subcontracting. 28 3.8 Regulatory Matters. 28 + +ARTICLE 4 COMMERCIALIZATION 30 + +4.1 In General. 30 4.2 Commercialization Diligence. 30 4.3 Booking of Sales; Distribution. 31 4.4 Product Trademarks. 31 4.5 Commercial Supply of Licensed Compounds or Licensed Products. 31 + +ARTICLE 5 GRANT OF RIGHTS + +33 + +5.1 Grants to AbbVie. 33 5.2 Grants to Harpoon. 34 5.3 Sublicenses. 34 5.4 Distributorships. 34 5.5 Co-Promotion Rights. 34 5.6 Retention of Rights. 34 5.7 Confirmatory Patent License. 35 5.8 Exclusivity with Respect to the Territory. 35 5.9 In-License Agreements. 35 + +ARTICLE 6 PAYMENTS AND RECORDS + +36 + +6.1 Upfront Payment. 36 6.2 Development and Regulatory Milestones. 36 6.3 First Commercial Sales Milestones. 37 6.4 Sales-Based Milestones. 37 6.5 Royalties. 38 6.6 Royalty Payments and Reports. 39 6.7 Mode of Payment; Offsets. 40 6.8 Withholding Taxes. 40 + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +6.9 Indirect Taxes. 40 6.10 Interest on Late Payments. 41 6.11 Audit. 41 6.12 Audit Dispute. 41 6.13 Confidentiality. 41 6.14 [***] 41 6.15 No Other Compensation. 42 + +ARTICLE 7 INTELLECTUAL PROPERTY + +42 + +7.1 Ownership of Intellectual Property. 42 7.2 Maintenance and Prosecution of Patents. 43 7.3 Enforcement of Patents. 45 7.4 Infringement Claims by Third Parties. 48 7.5 Invalidity or Unenforceability Defenses or Actions. 48 7.6 Product Trademarks. 49 7.7 International Nonproprietary Name. 50 7.8 Inventor's Remuneration. 50 7.9 Common Interest. 50 + +ARTICLE 8 PHARMACOVIGILANCE AND SAFETY + +50 + +8.1 Pharmacovigilance. 50 8.2 Global Safety Database. 50 + +ARTICLE 9 CONFIDENTIALITY AND NON- DISCLOSURE + +51 + +9.1 Product Information. 51 9.2 Confidentiality Obligations. 51 9.3 Permitted Disclosures. 52 9.4 Use of Name. 53 9.5 Public Announcements. 53 9.6 Publications. 54 9.7 Return of Confidential Information. 54 9.8 Survival. 54 + +ARTICLE 10 REPRESENTATIONS AND WARRANTIES + +55 + +10.1 Mutual Representations and Warranties. 55 10.2 Additional Representations and Warranties of Harpoon. 55 10.3 Covenants of Harpoon. 58 10.4 Covenants of AbbVie. 58 10.5 DISCLAIMER OF WARRANTIES. 59 + +ARTICLE 11 INDEMNITY 60 + +11.1 Indemnification of Harpoon. 60 11.2 Indemnification of AbbVie. 60 11.3 Notice of Claim. 60 11.4 Control of Defense. 61 11.5 Special, Indirect, and Other Losses. 61 11.6 Insurance. 61 + +ARTICLE 12 TERM AND TERMINATION + +62 + +12.1 Term. 62 + +- ii - + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +12.2 Termination for Material Breach. 62 12.3 Additional Termination Rights by AbbVie. 63 12.4 Termination for Insolvency. 63 12.5 Rights in Bankruptcy. 63 12.6 Termination in Entirety. 63 12.7 Reversion of Harpoon Products. 66 12.8 Termination of Terminated Territory. 67 12.9 Remedies. 67 12.10 Accrued Rights; Surviving Obligations. 67 + +ARTICLE 13 MISCELLANEOUS 68 + +13.1 Force Majeure. 68 13.2 Change in Control of Harpoon. 68 13.3 Export Control. 69 13.4 Assignment. 69 13.5 Severability. 70 13.6 Governing Law, Jurisdiction and Service. 70 13.7 Dispute Resolution. 70 13.8 Notices. 71 13.9 Entire Agreement; Amendments. 72 13.10 English Language. 72 13.11 Equitable Relief. 72 13.12 Waiver and Non-Exclusion of Remedies. 72 13.13 No Benefit to Third Parties. 72 13.14 Further Assurance. 73 13.15 Relationship of the Parties. 73 13.16 Performance by Affiliates. 73 13.17 Counterparts; Facsimile Execution. 73 13.18 References. 73 13.19 Schedules. 73 13.20 Construction. 73 SCHEDULES Schedule 1.84 Initial Development Plan Schedule 1.99 Licensed Compound Schedule 3.7 Pre-Approved Third Party Providers Schedule 10.2 Disclosure Schedules Schedule 10.2.1 Existing Patents Schedule 13.7.3 Arbitration + +- iii - + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +DEVELOPMENT AND OPTION AGREEMENT + +This Development and Option Agreement (the "Agreement") is made and entered into effective as of November 20, 2019 (the "Effective Date") by and between Harpoon Therapeutics, Inc., a Delaware corporation ("Harpoon"), and AbbVie Biotechnology Ltd, a Bermuda corporation ("AbbVie"). Harpoon and AbbVie are sometimes referred to herein individually as a "Party" and collectively as the "Parties." + +RECITALS + +WHEREAS, Harpoon Controls (as defined herein) certain intellectual property rights with respect to the Licensed Compound (as defined herein) and Licensed Products (as defined herein) in the Territory (as defined herein); and + +WHEREAS, Harpoon wishes to grant an option to a license to AbbVie, and AbbVie wishes to take, such option to a license under such intellectual property rights to develop and commercialize Licensed Products in the Territory, in each case in accordance with the terms and conditions set forth below. + +NOW, THEREFORE, in consideration of the premises and the mutual promises and conditions hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, do hereby agree as follows: + +ARTICLE 1 DEFINITIONS + +Unless otherwise specifically provided herein, the following terms shall have the following meanings: + +1.1 "AbbVie" has the meaning set forth in the preamble hereto. + +1.2 [***] has the meaning set forth in [***] + +1.3 [***] has the meaning set forth in [***]. + +1.4 [***] has the meaning set forth in [***] + +1.5 [***] has the meaning set forth in [***]. + +1.6 "AbbVie [***] Rights" has the meaning set forth in Section 5.9.2. + +1.7 "AbbVie Indemnitees" has the meaning set forth in Section 11.2. + +1.8 "AbbVie Know-How" means all Information that is (a) Controlled by AbbVie or any of its Affiliates during the Term, (b) developed or acquired by AbbVie or any of its Affiliates during the Term as a result of performance under this Agreement, (c) not generally known and (d) necessary or reasonably useful for the Exploitation of the Licensed Compound or a Licensed Product, but excluding any Joint Know-How or Information published in any AbbVie Patents or Joint Patents. + +1.9 "AbbVie Patents" means all of the Patents that (a) are Controlled by AbbVie or any of its Affiliates during the Term, (b) claim inventions made or conceived by or on behalf of AbbVie or any of its Affiliates during the Term as a result of performance under this Agreement, and (c) are necessary or reasonably useful (or, with respect to patent applications, would be necessary or reasonably useful if such + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +patent applications were to issue as patents) for the Exploitation of the Licensed Compound or a Licensed Product, but excluding any Joint Patents. + +1.10 "AbbVie Reversion IP" has the meaning set forth in Section 12.7.1. + +1.11 "AbbVie Withholding Tax Action" has the meaning set forth in Section 6.8.2. + +1.12 "Acceptance" means, with respect to a Drug Approval Application, receipt of written notice from the applicable Regulatory Authority indicating that such Drug Approval Application has been accepted for filing and further review. + +1.13 "Accounting Standards" means, with respect to a Party, that such Party shall maintain records and books of accounts in accordance with United States Generally Accepted Accounting Principles. + +1.14 "Acquisition" means, with respect to a Party, a merger, acquisition (whether of all of the stock or all or substantially all of the assets of a Person or any operating or business division of a Person) or similar transaction by or with the Party, other than a Change in Control of the Party. + +1.15 "Adverse Ruling" has the meaning set forth in Section 12.2.1. + +1.16 "Affiliate" means, with respect to a Party, any Person that, directly or indirectly, through one (1) or more intermediaries, controls, is controlled by or is under common control with such Party. For purposes of this definition, "control" and, with correlative meanings, the terms "controlled by" and "under common control with" means (a) the possession, directly or indirectly, of the power to direct the management or policies of a Person, whether through the ownership of voting securities, by contract relating to voting rights or corporate governance, or otherwise; or (b) the ownership, directly or indirectly, of more than fifty percent (50%) of the voting securities or other ownership interest of a Person (or, with respect to a limited partnership or other similar entity, its general partner or controlling entity). The Parties acknowledge that in the case of certain entities organized under the laws of certain countries outside of the United States, the maximum percentage ownership permitted by law for a foreign investor may be less than fifty percent (50%), and that in such case such lower percentage shall be substituted in the preceding sentence, provided that such foreign investor has the power to direct the management or policies of such entity. + +1.17 "Agreement" has the meaning set forth in the preamble hereto. + +1.18 "Alliance Manager" has the meaning set forth in Section 2.2.5. + +1.19 "Applicable Law" means federal, state, local, national and supra-national laws, statutes, rules, and regulations, including any rules, regulations, regulatory guidelines, or other requirements of the Regulatory Authorities, major national securities exchanges or major securities listing organizations, that may be in effect from time to time during the Term and applicable to a particular activity or country or other jurisdiction hereunder. + +1.20 "Audit Expert" has the meaning set forth in Section 6.12. + +1.21 "Bankruptcy Code" has the meaning set forth in Section 12.5.1. + +1.22 "BCMA" means that specific protein known as B-cell maturation antigen or tumor necrosis factor receptor superfamily member 17 (TNFRSF17) or CD269 in addition to any other known aliases [***]. + +- 2 - + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +1.23 "Biosimilar Application" has the meaning set forth in Section 7.3.3. + +1.24 "Biosimilar Product" means, with respect to a particular Licensed Product in a particular country, a biologic product that is (a) substantially similar to or interchangeable with such Licensed Product, such that the application for a BLA for such biologic product submitted to the applicable Regulatory Authority relies in whole or in part on a prior BLA granted to such Licensed Product (including any application for such biological product submitted under Section 351(k) of the PHSA or successor law, or other analogous Applicable Law, citing the Licensed Product as the reference product), or (b) determined by the applicable Regulatory Authority to be interchangeable with such Licensed Product, as set forth at 42 U.S.C. § 262(k)(4) or successor law, or other analogous Applicable Law outside of the United States. A biological product licensed under the same BLA as the Licensed Product will not constitute a Biosimilar Product. + +1.25 "BLA" has the meaning set forth in the definition of "Drug Approval Application." + +1.26 "Board of Directors" has the meaning set forth in the definition of "Change in Control." + +1.27 "Breaching Party" has the meaning set forth in Section 12.2.1. + +1.28 "Business Day" means a day other than a Saturday or Sunday on which banking institutions in New York, New York are open for business. + +1.29 "Calendar Quarter" means each successive period of three (3) calendar months commencing on January 1, April 1, July 1 and October 1, except that the first Calendar Quarter of the Term shall commence on the Effective Date and end on the day immediately prior to the first to occur of January 1, April 1, July 1 or October 1 after the Effective Date, and the last Calendar Quarter shall end on the last day of the Term. + +1.30 "Calendar Year" means each successive period of twelve (12) calendar months commencing on January 1 and ending on December 31, except that the first Calendar Year of the Term shall commence on the Effective Date and end on December 31 of the year in which the Effective Date occurs and the last Calendar Year of the Term shall commence on January 1 of the year in which the Term ends and end on the last day of the Term. + +1.31 "Change in Control," with respect to a Party, shall be deemed to have occurred if any of the following occurs after the Effective Date: + +1.31.1 any "person" or "group" (as such terms are defined below) (a) is or becomes the "beneficial owner" (as defined below), directly or indirectly, of shares of capital stock or other interests (including partnership interests) of such Party then outstanding and normally entitled (without regard to the occurrence of any contingency) to vote in the election of the directors, managers or similar supervisory positions ("Voting Stock") of such Party representing fifty percent (50%) or more of the total voting power of all outstanding classes of Voting Stock of such Party or (b) has the power, directly or indirectly, to elect a majority of the members of the Party's board of directors, or similar governing body ("Board of Directors"); excluding in each case (subclauses (a) and (b)) [***]; or + +1.31.2 such Party enters into a merger, consolidation or similar transaction with another Person (whether or not such Party is the surviving entity) and as a result of such merger, consolidation or similar transaction (a) the members of the Board of Directors of such Party immediately prior to such transaction constitute less than a majority of the members of the Board of Directors of such Party or such surviving Person immediately following such transaction or (b) the Persons that beneficially owned, directly + +- 3 - + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +or indirectly, the shares of Voting Stock of such Party immediately prior to such transaction cease to beneficially own, directly or indirectly, shares of Voting Stock of such Party representing at least a majority of the total voting power of all outstanding classes of Voting Stock of the surviving Person in substantially the same proportions as their ownership of Voting Stock of such Party immediately prior to such transaction; or + +1.31.3 such Party sells or transfers to any Third Party, in one (1) or more related transactions, properties or assets representing all or substantially all of such Party's assets to which this Agreement relates; or + +1.31.4 the holders of capital stock of such Party approve a plan or proposal for the liquidation or dissolution of such Party. + +For the purpose of this definition of Change in Control, (a) "person" and "group" have the meanings given such terms under Section 13(d) and 14(d) of the United States Securities Exchange Act of 1934 and the term "group" includes any group acting for the purpose of acquiring, holding or disposing of securities within the meaning of Rule 13d-5(b)(1) under the said Act; (b) a "beneficial owner" shall be determined in accordance with Rule 13d-3 under the aforesaid Act; and (c) the terms "beneficially owned" and "beneficially own" shall have meanings correlative to that of "beneficial owner." + +1.32 [***] + +1.33 "Clinical Data" means [***] Information with respect to any Licensed Compound or Licensed Product and made, collected, or otherwise generated under or in connection with Clinical Studies, including any data (including raw data), reports, and results with respect thereto. + +1.34 "Clinical Studies" means Phase 0, Phase I, Phase II, Phase III, and such other tests and studies in human subjects that are required by Applicable Law, or otherwise recommended by the Regulatory Authorities, to obtain or maintain Regulatory Approvals for a Licensed Product for one (1) or more indications, including tests or studies that are intended to expand the Product Labeling for such Licensed Product with respect to such indication. + +1.35 "CMC" has the meaning set forth in the definition of "Initial Development Plan." + +1.36 "CMC Working Group" has the meaning set forth in Section 2.5. + +1.37 "Combination Product" means a Licensed Product that is: (a) sold in the form of a combination product containing both a Licensed Compound and one (1) or more other therapeutically active pharmaceutical or biologic products; or (b) sold in a form that contains (or is sold bundled with) any (i) diagnostic product or (ii) other product that is administered separately from the Licensed Product, in both cases (subclauses (a) and (b)) sold as a unit at a single price and excluding any Delivery System. + +1.38 "Commercialization" means any and all activities directed to the preparation for sale of, offering for sale of, or sale of a Licensed Compound or Licensed Product, including activities related to marketing, promoting, distributing, importing and exporting such Licensed Compound or Licensed Product, and interacting with Regulatory Authorities regarding any of the foregoing. When used as a verb, "to Commercialize" and "Commercializing" means to engage in Commercialization, and "Commercialized" has a corresponding meaning. + +1.39 "Commercially Reasonable Efforts" means with respect to [***]. + +- 4 - + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +1.40 [***] + +1.41 "Competitor" means any Person that [***], or (b) that [***]. + +1.42 "Confidential Information" means any Information provided orally, visually, in writing or other form by or on behalf of one (1) Party (or an Affiliate or representative of such Party) to the other Party (or to an Affiliate or representative of such other Party) in connection with this Agreement, whether prior to, on, or after the Effective Date, including Information relating to the terms of this Agreement, the Licensed Compound or any Licensed Product (including the Regulatory Documentation and regulatory data), any Exploitation of the Licensed Compound or any Licensed Product, any know-how with respect thereto developed by or on behalf of the disclosing Party or its Affiliates, or the scientific, regulatory or business affairs or other activities of either Party. Notwithstanding the foregoing, (a) Joint Know-How shall be deemed to be the Confidential Information of both Parties, and both Parties shall be deemed to be the receiving Party and the disclosing Party with respect thereto, and (b) following the License Option Exercise Closing Date, all Regulatory Documentation owned by AbbVie pursuant to Section 3.8.2 shall be deemed to be the Confidential Information of AbbVie, and AbbVie shall be deemed to be the disclosing Party and Harpoon shall be deemed to be the receiving Party with respect thereto. In addition, all information disclosed by Harpoon to AbbVie under the Prior NDA shall be deemed to be Harpoon's Confidential Information disclosed hereunder, and all information disclosed by AbbVie Inc. to Harpoon under the Prior NDA shall be deemed to be AbbVie's Confidential Information disclosed hereunder. + +- 5 - + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +1.43 "Control" means, with respect to any item of Information, Regulatory Documentation, material, Patent, or other property right, the possession of the right, whether directly or indirectly, and whether by ownership, license or otherwise (other than by operation of the license and other grants in Sections 5.1 or 5.2), to grant a license, sublicense or other right (including the right to reference Regulatory Documentation) to or under such Information, Regulatory Documentation, material, Patent, or other property right as provided for herein without violating the terms of any agreement or other arrangement with any Third Party. "Controlled" has a corresponding meaning. + +1.44 "CSR Notification Date" has the meaning set forth in Section 12.6.3(e). + +1.45 "Default Notice" has the meaning set forth in Section 12.2.1. + +1.46 "Delivery System" has the meaning set forth in the definition of "Net Sales." + +1.47 "Development" means all activities related to pre-clinical and other non-clinical testing, test method development and stability testing, toxicology, formulation, process development, manufacturing scale-up, qualification and validation, quality assurance/quality control, Clinical Studies, including Manufacturing in support thereof, statistical analysis and report writing, the preparation and submission of Drug Approval Applications, regulatory affairs with respect to the foregoing and all other activities necessary or reasonably useful or otherwise requested or required by a Regulatory Authority as a condition or in support of obtaining or maintaining a Regulatory Approval. When used as a verb, "Develop" means to engage in Development. For purposes of clarity, Development shall include any submissions and activities required in support thereof, required by Applicable Laws or a Regulatory Authority as a condition or in support of obtaining a pricing or reimbursement approval for an approved Licensed Product. + +1.48 "Development Report Review Deadline" means [***] following the initial delivery of any [***], as applicable. + +1.49 "Dispute" has the meaning set forth in Section 13.7. + +1.50 "Distributor" has the meaning set forth in Section 5.4. + +1.51 "Divestiture" means, with respect to a Party, (a) the divestiture [***] through [***] or [***] with respect to [***] (for clarity, the [***] for any such divestiture), or (b) [***]. When used as a verb, "Divest" and "Divested" means to cause a Divestiture. + +1.52 "Dollars" or "$" means United States Dollars. + +1.53 "Drug Approval Application" means a Biologics License Application (a "BLA") as defined in the PHSA, or any corresponding foreign application in the Territory, including, with respect to the European Union, a Marketing Authorization Application (a "MAA") filed with the EMA or with the applicable Regulatory Authority of a country in Europe with respect to the mutual recognition or any other national approval procedure. + +- 6 - + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +1.54 "[***]" means the [***] by Harpoon to AbbVie within [***] following Harpoon's receipt of written notice from AbbVie pursuant to [***] prior to the date of AbbVie's receipt of the [***]. + +1.55 "Effective Date" means the effective date of this Agreement as set forth in the preamble hereto. + +1.56 "EMA" means the European Medicines Agency and any successor agency(ies) or authority having substantially the same function. + +1.57 "European Major Market" means each of [***]. + +1.58 "European Union" or "E.U." means the economic, scientific, and political organization of member states known as the European Union, as its membership may be altered from time to time, and any successor thereto. + +1.59 "Existing Patents" has the meaning set forth in Section 10.2.1. + +1.60 "Exploit," "Exploited" or "Exploitation" means to make, have made, import, export, use, sell, or offer for sale, including to Develop, Commercialize, register, modify, enhance, improve, Manufacture, have Manufactured, hold, or keep (whether for disposal or otherwise), formulate, optimize, have used, export, transport, distribute, promote, market, have sold or otherwise dispose of. + +1.61 "FDA" means the United States Food and Drug Administration and any successor agency(ies) or authority having substantially the same function. + +1.62 "FFDCA" means the United States Federal Food, Drug, and Cosmetic Act, 21 U.S.C. § 301 et seq., as amended from time to time, together with any rules, regulations and requirements promulgated thereunder (including all additions, supplements, extensions, and modifications thereto). + +1.63 "Field" means all human and non-human diagnostic, prophylactic, and therapeutic uses. + +1.64 "Final Development Report" means the final written data package delivered by Harpoon to AbbVie in accordance with Section 3.1.3, after the completion of all activities under the Initial Development Plan, including, for clarity, [***], and comprised of the [***]. The Final Development Report shall include [***]. + +- 7 - + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +1.65 "First Commercial Sale" means, with respect to a Licensed Product and a country, the first sale for monetary value for use or consumption by the end user of such Licensed Product in such country after Regulatory Approval for such Licensed Product has been obtained in such country. [***] shall not be construed as a First Commercial Sale. + +1.66 "Harpoon" has the meaning set forth in the preamble hereto. + +1.67 "Harpoon In-License Agreement" means [***] agreement between Harpoon and a Third Party under which AbbVie is granted a sublicense or other right under this Agreement as provided in Section 5.9. + +1.68 "Harpoon Indemnitees" has the meaning set forth in Section 11.1. + +1.69 "Harpoon Know-How" means all Information that is (a) Controlled by Harpoon or any of its Affiliates as of the Effective Date or at any time during the Term, (b) not generally known and (c) necessary or reasonably useful for the Exploitation of any Licensed Compound or any Licensed Product, but excluding any Joint Know-How or Information published in any (i) Harpoon Patents or (ii) Joint Patents. + +1.70 "Harpoon Patents" means all of the Patents that are (a) Controlled by Harpoon or any of its Affiliates as of the Effective Date or at any time during the Term and (b) necessary or reasonably useful (or, with respect to Patent applications, would be necessary or reasonably useful if such Patent applications were to issue as Patents) for the Exploitation of any Licensed Compound or any Licensed Product, but excluding Joint Patents. The Harpoon Patents include the Existing Patents. + +1.71 [***] has the meaning set forth in [***]. + +1.72 "Harpoon Reversion Products" has the meaning set forth in Section 12.6.1. + +1.73 "HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. + +1.74 "HSR Filing" has the meaning set forth in Section 3.2.4(b). + +1.75 "In-Licensed Patents" has the meaning set forth in Section 10.2.3. + +1.76 "IND" means an application filed with a Regulatory Authority for authorization to commence Clinical Studies, including (a) an Investigational New Drug Application as defined in the FFDCA or any successor application or procedure filed with the FDA, (b) any equivalent thereof in other countries or regulatory jurisdictions, (e.g., a Clinical Trial Application (CTA) in the European Union) and (c) all supplements, amendments, variations, extensions and renewals thereof that may be filed with respect to the foregoing. + +1.77 "Indemnification Claim Notice" has the meaning set forth in Section 11.3. + +1.78 "Indemnified Party" has the meaning set forth in Section 11.3. + +1.79 "Indication" means, with respect to a Licensed Product, a use to which such Licensed Product is intended to be put for the treatment, prevention, mitigation, cure or diagnosis of a recognized disease + +- 8 - + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +or condition, or of a manifestation of a recognized disease or condition, or for the relief of symptoms associated with a recognized disease or condition, in each case for any size patient population, which, if such Licensed Product is approved in the U.S., would be reflected in the "Indications and Usage" section of labeling pursuant to 21 C.F.R. §201.57(c)(2) or, to the extent applicable, any comparable labeling section outside the U.S., subject to the following: (a) subtypes of the same disease or condition are not additional Indications for such Licensed Product; (b) different symptom domains or domains of impairment of the same disease or condition are not additional Indications for such Licensed Product; (c) the approved use of such Licensed Product for such disease in different combinations or co-therapies of treatments are not additional Indications for such Licensed Product (e.g., monotherapy vs. add-on or combination therapy with another agent in the same disease); (d) treatment, prevention and cure of the same disease or the same disease subtype with such Licensed Product are not additional Indications for such Licensed Product; (e) the approved use of such Licensed Product for such disease in a different line of treatment or a different temporal position in a treatment algorithm for the same disease or condition are not additional Indications for such Licensed Product (e.g., first line vs. second line therapy in the same disease or condition); and (f) treatment of the same disease or condition with such Licensed Product in an expanded, modified or additional patient population are not additional Indications for such Licensed Product. + +1.80 "Indirect Taxes" has the meaning set forth in Section 6.9. + +1.81 [***] + +1.82 "Information" means all information of a technical, scientific, business and other nature, including know-how, technology, means, methods, processes, practices, formulae, instructions, skills, techniques, procedures, experiences, ideas, technical assistance, designs, drawings, assembly procedures, computer programs, apparatuses, specifications, data, results and other material, regulatory data, and other biological, chemical, pharmacological, toxicological, pharmaceutical, physical and analytical, pre- clinical, clinical, safety, manufacturing and quality control data and information, including study designs and protocols, reagents (including all physical materials in connection with any of the foregoing such as plasmids, proteins, cell lines, assays, materials generated in connection with any CMC activities and compounds) and biological methodology; in each case (whether or not confidential, proprietary, patented or patentable, of commercial advantage or not) in written, electronic or any other form now known or hereafter developed. + +1.83 "Initial Development Activities" means any and all Development activities set forth in the Initial Development Plan to be performed by Harpoon (or, pursuant to Section 3.1.2, AbbVie) in order to advance the Licensed Compound and Licensed Product to the point of readiness to commence [***] (or to proceed directly to pivotal clinical trials, if applicable) and ultimately support the filing of Drug Approval Applications and obtain Regulatory Approvals for a Licensed Product in the Field in the Territory. + +1.84 "Initial Development Plan" means a development plan for the Licensed Compounds and Licensed Products setting forth (a) in reasonable detail all Development and regulatory activities to be performed by Harpoon with respect to the Licensed Compounds and Licensed Products through completion of the Phase I/IB Trial, including related activities as applicable (but, for clarity, except with respect to [***]), (b) all Clinical Data and other Information required to be delivered to AbbVie pursuant to Section 1.112 in order for AbbVie to determine whether to exercise the License Option, and (c) all Information to be included in the Final Development Report (i.e. as a result of + +- 9 - + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +activities conducted after the delivery of the Opt-In Development Report), which Initial Development Plan is attached as Schedule 1.84, as the same may be amended from time to time in accordance with the terms hereof. + +1.85 "Initiation" or "Initiate" means, with respect to a Clinical Study, the first dosing of the first human subject in such Clinical Study. + +1.86 "Intellectual Property" has the meaning set forth in Section 12.5.1. + +1.87 "Joint Governance Committee" or "JGC" has the meaning set forth in Section 2.1.1. + +1.88 "Joint Intellectual Property Rights" has the meaning set forth in Section 7.1.2. + +1.89 "Joint Know-How" has the meaning set forth in Section 7.1.2. + +1.90 "Joint Patents" has the meaning set forth in Section 7.1.2. + +1.91 "Knowledge" means [***] of the [***] of a Party, or any personnel holding positions equivalent to such job titles (but only to the extent such positions exist at such Party). + +1.92 [***] + +1.93 [***] + +1.94 [***] + +1.95 "License Option" has the meaning set forth in Section 3.2.3. + +1.96 "License Option Exercise Closing Date" has the meaning set forth in Section 3.2.4. + +1.97 "License Option Exercise Notice" has the meaning set forth in Section 3.2.3. + +1.98 "License Option Period" has the meaning set forth in Section 3.2.3. + +1.99 "Licensed Compound" means (a) the compound known as HPN217 (as described on Schedule 1.99), [***]. + +1.100 "Licensed Product" means any product, or portion thereof, containing a Licensed Compound, alone or in combination with one (1) or more other active ingredients, in any and all forms, in + +- 10 - + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +current and future formulations, dosages forms and strengths, and delivery modes, including any improvements thereto. For clarity, Licensed Products that contain the same Licensed Compound (whether or not with one or more active ingredients (if applicable)), but in a different formulation, dosage form or delivery device, shall be considered the same Licensed Product for the purposes of calculating milestone and royalty payments hereunder. + +1.101 "Losses" has the meaning set forth in Section 11.1. + +1.102 "MAA" has the meaning set forth in the definition of "Drug Approval Application." + +1.103 "Major Market" means each of [***]. + +1.104 "Major Regulatory Filing" means major regulatory filings and documents (including INDs, Drug Approval Applications, material labeling supplements, Regulatory Authority meeting requests, and core data sheets). + +1.105 "Manufacture" and "Manufacturing" means all activities related to the synthesis, making, production, processing, purifying, formulating, filling, finishing, packaging, labeling, shipping, and holding of the Licensed Compound, any Licensed Product, or any intermediate thereof, including process development, process qualification and validation, scale-up, pre- clinical, clinical and commercial production and analytic development, product characterization, stability testing, quality assurance, and quality control. + +1.106 "Manufacturing Process" has the meaning set forth in Section 4.6.1. + +1.107 "Manufacturing Technology Transfer" has the meaning set forth in Section 4.6.1. + +1.108 "Net Sales" means[***] + +(a) [***] + +(b) [***] + +(c) [***] + +(d) [***] + +(e) [***] + +(f) [***] of such Licensed Product and to the extent [***] + +- 11 - + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +[***], where for purposes of this Net Sales definition, [***] of such Licensed Product; + +(g) [***] + +(h) [***] + +(i) [***] + +(j) [***], but which [***]. + +[***] + +In the event that a Licensed Product is sold in any country or other jurisdiction [***] + +(i) [***]. + +- 12 - + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +(ii) [***] + +(iii) [***] + +(iv) [***]. + +1.109 "Non-Breaching Party" has the meaning set forth in Section 12.2.1. + +1.110 [***] + +1.111 "Opt-In Dataset" has the meaning set forth in the definition of "Opt-In Development Report." + +1.112 "Opt-In Development Report" means the written data package delivered by Harpoon to AbbVie and generated from the clinical dataset extracted from the [***] as it exists at the date that is [***] (the "Opt-In Dataset" and such date the "Opt-In Development Report Dataset Cutoff Date"). The Opt-In Dataset will arise from the conduct of the Initial Development Activities and will include information available in the [***] as of the Opt-In Development Report Generation Date related to [***]. In addition to the information and data set forth above based on the Opt-In Dataset, the Opt-In Development Report will include[***]. + +- 13 - + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +1.113 "Opt-In Development Report Dataset Cut-Off Date" has the meaning set forth in the definition of "Opt-In Development Report." + +1.114 "Other Product" means, with respect to a Combination Product, such other therapeutically active pharmaceutical or biologic products referenced in Section 1.37(a) or such diagnostic or other product referenced in Section 1.37(b), in each case other than the Licensed Compound. + +1.115 "Owned Patents" has the meaning set forth in Section 10.2.3. + +1.116 "Party" and "Parties" has the meaning set forth in the preamble hereto. + +1.117 "Patents" means (a) all national, regional and international patents and patent applications, including provisional patent applications, (b) all patent applications filed either from such patents, patent applications or provisional applications or from an application claiming priority from either of these, including divisionals, continuations, continuations-in-part, provisionals, converted provisionals and continued prosecution applications, (c) any and all patents that have issued or in the future issue from the foregoing patent applications ((a) and (b)), including utility models, petty patents and design patents and certificates of invention, (d) any and all extensions or restorations by existing or future extension or restoration mechanisms, including revalidations, reissues, re-examinations and extensions (including any pediatric exclusivity and other such exclusivities that are attached to patents, supplementary protection certificates and the like) of the foregoing patents or patent applications ((a), (b), and (c)), and (e) any similar rights, including so-called pipeline protection or any importation, revalidation, confirmation or introduction patent or registration patent or patent of additions to any of such foregoing patent applications and patents. + +1.118 "Person" means an individual, sole proprietorship, partnership, limited partnership, limited liability partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture or other similar entity or organization, including a government or political subdivision, department or agency of a government. + +1.119 "Phase 0" means an exploratory, first-in-human trial conducted in accordance with the FDA 2006 Guidance on Exploratory Investigational New Drug Studies (or the equivalent in any country or other jurisdiction outside of the United States) and designed to expedite the development of therapeutic or imaging agents by establishing very early on whether the agent behaves in human subjects as was anticipated from pre-clinical studies. + +1.120 "Phase I" means a human clinical trial of a Licensed Compound or Licensed Product, the principal purpose of which is a preliminary determination of safety, tolerability, pharmacological activity or pharmacokinetics in healthy individuals or patients or similar clinical study prescribed by the Regulatory Authorities, including the trials referred to in 21 C.F.R. §312.21(a), as amended. + +- 14 - + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +1.121 "Phase I/IB Trial" means the Phase I or I/II study of a Licensed Compound or Licensed Product incorporating dose escalation and cohort expansion studies as described in the Initial Development Plan (as it may be amended from time to time in accordance with Section 3.1.1). + +1.122 "Phase II" means a human clinical trial of a Licensed Compound or Licensed Product, the principal purpose of which is a determination of safety and efficacy in the target patient population, which is prospectively designed to generate sufficient data that may permit commencement of pivotal clinical trials, or a similar clinical study prescribed by the Regulatory Authorities, from time to time, pursuant to Applicable Law or otherwise, including the trials referred to in 21 C.F.R. §312.21(b), as amended. + +1.123 "Phase III" means a human clinical trial of a Licensed Compound or Licensed Product on a sufficient number of subjects in an indicated patient population that is designed to establish that a Licensed Compound or Licensed Product is safe and efficacious for its intended use and to determine the benefit/risk relationship, warnings, precautions, and adverse reactions that are associated with such product in the dosage range to be prescribed, which trial is intended to support marketing approval of such Licensed Compound or Licensed Product, including all tests and studies that are required by the FDA from time to time, pursuant to Applicable Law or otherwise, including the trials referred to in 21 C.F.R. §312.21(c), as amended. + +1.124 "PHSA" means the United States Public Health Service Act, as amended from time to time. + +1.125 "PMDA" means Japan's Pharmaceuticals and Medical Devices Agency and any successor agency(ies) or authority having substantially the same function. + +1.126 "Post CSR Option Period" has the meaning set forth in Section 12.6.3(e). + +1.127 "Prior NDA" has the meaning set forth in Section 13.9. + +1.128 "Product Information" has the meaning set forth in Section 9.1. + +1.129 "Product Infringement" has the meaning set forth in Section 7.3.1. + +1.130 "Product Labeling" means, with respect to a Licensed Product in a country or other jurisdiction in the Territory, (a) the full prescribing information for such Licensed Product as approved by the Regulatory Authority for such country or other jurisdiction, including any required patient information, and (b) all labels and other written, printed, or graphic matter upon a container, wrapper, or any package insert utilized with or for such Licensed Product in such country or other jurisdiction. + +1.131 "Product-Specific Claims" has the meaning set forth in Section 7.2.1(a). + +1.132 "Product-Specific Patents" has the meaning set forth in Section 7.2.1(b). + +1.133 "Product Trademarks" means the Trademark(s) to be used by AbbVie or its Affiliates or its or their respective Sublicensees for the Development, Commercialization or Exploitation of Licensed Products in the Territory and any registrations thereof or any pending applications relating thereto in the Territory (excluding, in any event, any trademarks, service marks, names or logos that include any corporate name or logo of the Parties or their Affiliates). + +1.134 "Proposed Future In-Licensed Rights" has the meaning set forth in Section 5.9. + +1.135 "Regulatory Approval" means, with respect to a country or other jurisdiction in the Territory, all approvals (including Drug Approval Applications), licenses, registrations, or authorizations of + +- 15 - + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +any Regulatory Authority necessary to Commercialize a Licensed Compound or Licensed Product in such country or other jurisdiction, including, where applicable, pricing or reimbursement approval in such country or other jurisdiction. + +1.136 "Regulatory Authority" means any applicable supra-national, federal, national, regional, state, provincial, or local governmental or regulatory authority, agency, department, bureau, commission, council, or other entities (e.g., the FDA, EMA and PMDA) regulating or otherwise exercising authority with respect to activities contemplated in this Agreement, including the Exploitation of the Licensed Compound or Licensed Products in the Territory. + +1.137 "Regulatory Documentation" means all (a) applications (including all INDs and Drug Approval Applications and other Major Regulatory Filings), registrations, licenses, authorizations, and approvals (including Regulatory Approvals), (b) correspondence and reports submitted to or received from Regulatory Authorities (including minutes and official contact reports relating to any communications with any Regulatory Authority) and all supporting documents with respect thereto, including all regulatory drug lists, advertising and promotion documents, adverse event files, and complaint files, and (c) Clinical Data and data contained or relied upon in any of the foregoing, in each case ((a), (b), and (c)) to the extent relating to a Licensed Compound or Licensed Product. + +1.138 "Regulatory Exclusivity" means, with respect to any country or other jurisdiction in the Territory, an additional market protection, other than Patent protection, granted by a Regulatory Authority in such country or other jurisdiction which confers an exclusive Commercialization period during which AbbVie or its Affiliates or Sublicensees has the exclusive right to market and sell, and any unauthorized Third Party is prevented from marketing or selling, a Licensed Compound or Licensed Product in such country or other jurisdiction. + +1.139 "Royalty Term" means, with respect to each Licensed Product and each country or other jurisdiction in the Territory, the period beginning on the date of the First Commercial Sale of such Licensed Product in such country or other jurisdiction, and ending on the latest to occur of (a) the expiration, invalidation or abandonment date of the last Harpoon Patent (i)[***] in such country or other jurisdiction; or (ii) [***] in such country or other jurisdiction; (b) the expiration of Regulatory Exclusivity in such country or other jurisdiction for such Licensed Product; or (c) the [***] of the First Commercial Sale of such Licensed Product in such country or other jurisdiction. + +1.140 "Segregate" means, with respect to a [***] relating to such [***] relating to the [***] provided that, [***] in connection [***]. + +- 16 - + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +1.141 "Senior Officer" means, with respect to Harpoon, its [***], and with respect to AbbVie, its [***]. + +1.142 "Sublicensee" means a Person, other than an Affiliate or a Distributor, that is granted a sublicense by AbbVie or its Affiliate under the grants in Section 5.1 as provided in Section 5.3 but excluding any sublicense granted by AbbVie or its Affiliate as a result of settlement of patent litigation with respect to a Biosimilar Product. + +1.143 "Term" has the meaning set forth in Section 12.1.1. + +1.144 "Terminated Territory" means each Major Market with respect to which this Agreement is terminated by Harpoon pursuant to Section 12.2.2, each country with respect to which this Agreement is terminated by AbbVie pursuant to Section 12.3, or if this Agreement is terminated in its entirety, the entire Territory. + +1.145 "Territory" means the entire world. + +1.146 "Third Party" means any Person other than Harpoon, AbbVie and their respective Affiliates. + +1.147 "Third Party Claims" has the meaning set forth in Section 11.1. + +1.148 "Third Party Provider" has the meaning set forth in Section 3.7. + +1.149 "Trademark" means any word, name, symbol, color, designation or device or any combination thereof that functions as a source identifier, including any trademark, trade dress, brand mark, service mark, trade name, brand name, logo, business symbol or domain name, whether or not registered. + +1.150 "United States" or "U.S." means the United States of America and its territories and possessions (including the District of Columbia and Puerto Rico). + +1.151 "Valid Claim" means (a) a claim of any [***] Patent whose validity, enforceability, or patentability has not been rendered invalid by any of the following: (i) irretrievable lapse, abandonment, revocation, dedication to the public, or disclaimer; or (ii) a holding, finding, or decision of invalidity, unenforceability, or non-patentability by a court, governmental agency, national or regional patent office, or other appropriate body that has competent jurisdiction, such holding, finding, or decision being final and unappealable or unappealed within the time allowed for appeal, or (b) a claim in a Patent application that is filed and prosecuted in good faith and no more than [***] have lapsed from its earliest priority date. For clarity, (A) any claim in a Patent application, for which more than [***] have lapsed from its earliest priority date, shall not be considered a Valid Claim unless and until such claim is granted and meets the requirement of subclause (a) and (B) a holding, finding, or decision being final and unappealable or not appealed within the time allowed for appeal means a holding, finding, or decision from which no appeal (other than a petition to the United States Supreme Court for a writ of certiorari or a similar appeal that is subject to discretionary review) can be or has been taken. + +1.152 "Voting Stock" has the meaning set forth in the definition of "Change in Control." + +1.153 "Withholding Amount" has the meaning set forth in Section 6.8.1. + +1.154 "Withholding Party" has the meaning set forth in Section 6.8.1. + +- 17 - + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +1.155 "Working Group" has the meaning set forth in Section 2.6. + +ARTICLE 2 COLLABORATION MANAGEMENT + +2.1 Joint Governance Committee. + +2.1.1 Formation. Within [***] after the Effective Date, the Parties shall establish a joint governance committee (the "Joint Governance Committee" or "JGC"). The JGC shall consist of [***] representatives from each of the Parties, each with the requisite experience and seniority to enable such person to make decisions on behalf of the Parties with respect to the issues falling within the jurisdiction of the JGC. From time to time, each Party may substitute [***] or more of its representatives to the JGC on written notice to the other Party. [***] shall select from its representatives the chairperson for the JGC. From time to time, [***] + +2.1.2 Specific Responsibilities. The JGC shall develop the strategies for and oversee the Development related activities relating to the Licensed Compounds and the Licensed Products in accordance with the Initial Development Plan, and shall serve as a forum for the coordination of such activities. In particular, the JGC shall: + +(a) oversee the Development activities performed pursuant to the Initial Development Plan; + +(b) address issues that arise during the performance of the Initial Development Plan, [***] + +(c) periodically (no less often than [***]) review and serve as a forum for discussing the Initial Development Plan, and review and approve amendments thereto; + +(d) review and serve as a forum for discussing Information (including all Clinical Data) arising out of the Initial Development Plan; + +(e) discuss any [***] + +(f) prior to the License Option Exercise Closing Date, review and discuss regulatory activities and strategies for Licensed Compounds and Licensed Products; + +(g) discuss the scope of any [***] contemplated under Section 4.6.1; + +(h) review the activities of the CMC Working Group or any other Working Group established by the JGC, and resolve any disagreement between the designees of AbbVie and Harpoon on any Working Group; + +(i) plan and oversee the conduct of activities set forth in Section 3.5; + +- 18 - + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +(j) discuss and agree upon the [***] named AbbVie personnel; + +(k) establish secure access methods (such as secure databases) for each Party to access Confidential Information; and + +(l) perform such other functions as are set forth herein or as the Parties may mutually agree in writing, except where in conflict with any provision of this Agreement. + +2.2 General Provisions Applicable to the JGC. + +2.2.1 Meetings and Minutes. The JGC shall meet [***], or as otherwise agreed to by the Parties, with the location of such meetings alternating between locations designated by Harpoon and locations designated by AbbVie. The Alliance Managers shall be permitted to attend any such JGC meetings. The chairperson of the JGC shall be responsible for calling meetings on [***] notice. Each Party shall make all proposals for agenda items and shall provide all appropriate information with respect to such proposed items at least [***] in advance of the applicable meeting; provided that under exigent circumstances requiring input by the JGC, a Party may provide its agenda items to the other Party within a shorter period of time in advance of the meeting, or may propose that there not be a specific agenda for a particular meeting, so long as the other Party consents to such later addition of such agenda items or the absence of a specific agenda for such meeting. The chairperson of the JGC shall prepare and circulate for review and approval of the Parties minutes of each meeting within [***] after the meeting. The Parties shall agree on the minutes of each meeting promptly, but in no event later than the next meeting of the JGC. + +2.2.2 Procedural Rules. The JGC shall have the right to adopt such standing rules as shall be necessary for its work, to the extent that such rules are not inconsistent with this Agreement. A quorum of the JGC shall exist whenever there is present at a meeting [***] appointed by each Party, each with the requisite experience and seniority to enable such person to make decisions on behalf of the Party it represents with respect to the issues falling within the jurisdiction of the JGC. Representatives of the Parties on the JGC may attend a meeting either in person or by telephone, video conference or similar means in which each participant can hear what is said by, and be heard by, the other participants. Representation by proxy shall be allowed. The JGC shall take action by consensus of the representatives present at a meeting at which a quorum exists, with each Party having a single vote irrespective of the number of representatives of such Party in attendance, or by a written resolution signed by [***] appointed by each Party. Employees or consultants of either Party that are not representatives of the Parties on the JGC may attend meetings of the JGC; provided that such attendees (i) shall not vote or otherwise participate in the decision-making process of the JGC, and (ii) are bound by obligations of confidentiality and non-disclosure equivalent to those set forth in Article 9. + +2.2.3 Dispute Resolution. If the JGC cannot, or does not, reach consensus on an issue, then the dispute shall first be referred to the Senior Officers of the Parties, who shall confer in good faith on the resolution of the issue. Any final decision mutually agreed to by the Senior Officers shall be conclusive and binding on the Parties. If the Senior Officers are not able to agree on the resolution of any such issue within [***] after such issue was first referred to them, then: + +(a) prior to the License Option Exercise Closing Date, the Senior Officer of Harpoon will finally and definitively resolve such dispute [***] provided that [***] + +- 19 - + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +[***] or (ii) [***] and + +(b) [***] Notwithstanding the foregoing, AbbVie may not, following the License Option Exercise Closing Date, use its final decision right to amend the Initial Development Plan in any way that would require Harpoon to perform additional activities than was required under the Initial Development Plan immediately prior to the License Option Exercise Closing Date, unless Harpoon agrees to perform such additional activities and AbbVie solely bears any additional expense. + +As used herein, a "Material Amendment" to the Initial Development Plan shall mean an amendment to the Initial Development Plan that would [***]. + +2.2.4 Limitations on Authority. Each Party shall retain the rights, powers, and discretion granted to it under this Agreement and no such rights, powers, or discretion shall be delegated to or vested in the JGC unless such delegation or vesting of rights is expressly provided for in this Agreement or the Parties expressly so agree in writing. The JGC shall not have the power to amend, modify, or waive compliance with this Agreement, which may only be amended or modified as provided in Section 13.9 or compliance with which may only be waived as provided in Section 13.12. + +2.2.5 Alliance Manager. Each Party shall appoint a person(s) who shall oversee contact between the Parties for all matters between meetings of the JGC, and shall have such other responsibilities as the Parties may agree in writing after the Effective Date (each, an "Alliance Manager"). Following the disbandment of the JGC after the License Option Exercise Closing Date, the Alliance Managers shall continue to act as a liaison between the Parties and shall be responsible for exchanging Information provided for under the terms of this Agreement. Each Party may replace its Alliance Manager at any time by notice in writing to the other Party. Following the License Option Exercise Closing Date and until the First Commercial Sale of a Licensed Product in a Major Market, Alliance Managers shall meet [***], or as otherwise agreed to by the Parties. + +2.3 Discontinuation of the JGC. The JGC shall continue to exist until the first to occur of: (a) the Parties mutually agreeing to disband the JGC; (b) in the event of AbbVie's exercise of its License Option, upon the delivery of the Final Development Report pursuant to Section 3.1.3; and (c) expiration of the License Option Period without AbbVie exercising the License Option. Additionally, in the event of a Change in Control of Harpoon involving a Competitor, AbbVie shall have the right at any time and for any reason, effective upon written notice, to disband the JGC in accordance with Section 13.2.2. In the event that the JGC is disbanded pursuant to Section 13.2.2, (a) any information, documents or reports that a Party is otherwise required to provide to the JGC pursuant to this Agreement shall be provided directly to the other Party and (b) any matters delegated to the JGC shall be made by mutual agreement of the Parties, subject to the dispute resolution provisions of Section 2.2.3. + +2.4 Interactions Between the JGC and Internal Teams. The Parties recognize that each Party possesses an internal structure (including various committees, teams and review boards) that will + +- 20 - + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +be involved in administering such Party's activities under this Agreement. Nothing contained in this Article shall prevent a Party from making routine day-to-day decisions relating to the conduct of those activities for which it has a performance or other obligations hereunder, in each case in a manner consistent with the then-current Initial Development Plan and the terms and conditions of this Agreement. + +2.5 CMC Working Group. Within [***] after the Effective Date, the Parties shall establish a CMC working group (the "CMC Working Group"). The CMC Working Group shall consist of two (2) representatives from each of the Parties, each with the requisite experience and seniority to enable such person to make decisions on behalf of the Parties with respect to the issues falling within the jurisdiction of the CMC Working Group. From time to time, each Party may substitute one (1) or more of its representatives to the CMC Working Group on written notice to the other Party. In particular, the CMC Working Group shall: + +(a) review and approve [***] with respect thereto, and review and approve amendments thereto; and + +(b) perform such other functions as are set forth herein or as the Parties may mutually agree in writing, except where in conflict with any provision of this Agreement. + +2.6 Working Groups. In addition to the CMC Working Group, from time to time, the JGC may establish and delegate duties to sub-committees or directed teams (each, a "Working Group") on an "as-needed" basis to oversee particular projects or activities (for example, joint project team, joint finance group, and/or joint intellectual property group). Each such Working Group shall be constituted and shall operate as the JGC determines; provided that each Working Group shall have equal representation from each Party, unless otherwise mutually agreed. Working Groups may be established on an ad hoc basis for purposes of a specific project or on such other basis as the JGC may determine. Each Working Group and its activities shall be subject to the oversight, review and approval of, and shall report to, the JGC. In no event shall the authority of the Working Group exceed that specified for the JGC. All decisions of a Working Group shall be by consensus. Any disagreement between the designees of AbbVie and Harpoon on a Working Group shall be referred to the JGC for resolution. + +2.7 Expenses. Each Party shall be responsible for all travel and related costs and expenses for its members and other representatives to attend meetings of, and otherwise participate on, the JGC or any Working Group. + +ARTICLE 3 DEVELOPMENT AND REGULATORY + +3.1 Initial Development Plan and Activities. + +3.1.1 Initial Development Plan. Either Party, directly or through its representatives on the JGC, may propose amendments to the Initial Development Plan from time to time as appropriate, including in light of changed circumstances. Any and all such amendments shall be subject to approval by the JGC as set forth in Section 2.1.2, subject to the dispute resolution procedures set forth in Section 2.2.3. Within [***] of the Effective Date, the Parties, through the CMC Working Group, shall jointly develop an amendment to the Initial Development Plan to identify the [***] in accordance with the parameters set forth in the Initial Development Plan attached hereto as Schedule 1.84. For clarity, all [***]. + +- 21 - + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +3.1.2 Initial Development Activities. Harpoon shall perform the activities set forth in the Initial Development Plan in accordance with the timelines set forth therein, [***]. In the conduct of the Initial Development Activities, Harpoon shall use commercially reasonable efforts to ensure that clinical sites participating in the Phase I/IB Trial timely submit Clinical Data generated at such site into the clinical database. If at any time AbbVie has a reasonable basis to believe that Harpoon is in material breach of its obligation to perform any Initial Development Activities, then AbbVie may so notify Harpoon in writing, specifying the basis for its belief, and the Parties shall meet within [***] after such notice to discuss in good faith AbbVie's concerns. If Harpoon [***] Notwithstanding the foregoing, if Harpoon [***], then Harpoon may seek resolution on the existence of such material breach pursuant to Section 13.7; provided that (i) Harpoon's [***]. For clarity, if the arbitrator determines that notwithstanding [***]. The Parties acknowledge and agree that in the event AbbVie [***] Initial Development Activities in accordance with the Initial Development Plan. If AbbVie so elects to [***] permitted under the terms and conditions of the applicable agreement, Harpoon shall [***]. + +3.1.3 Certain Amendments to Initial Development Plan. Notwithstanding the role of the JGC in connection with amendments to the Initial Development Plan pursuant to Section 2.1.2(c) and Section 2.2.3, [***] + +- 22 - + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +Alliance Manager). AbbVie shall have [***] in which to consider the proposed amendments and respond to Harpoon, following which: + +(a) if AbbVie notifies Harpoon in writing that it consents to the amendments proposed by Harpoon to the Initial Development Plan, Harpoon may proceed to resubmit the clinical portion of the Initial Development Plan (including the clinical protocol for the Phase I/IB Trial, as applicable) to the FDA, [***]; + +(b) if AbbVie requests that Harpoon provide further information in connection with the proposed amendments, Harpoon shall [***] provide such information and make available appropriate personnel to respond to AbbVie's questions regarding the proposed amendments, and if AbbVie notifies Harpoon in writing following receipt of such information that it consents to the amendments as proposed by Harpoon to the Initial Development Plan, [***]; + +(c) if AbbVie notifies Harpoon that it does not consent to the proposed amendments (either before or following a request for more information under Section 3.1.3(b)), then such amendment (i) shall be [***], (ii) shall be referred [***] to a special meeting of the JGC (or such other discussion forum as the Parties may mutually agree in writing) and (iii) shall be subject [***], provided that solely with respect to amendment arising under this Section 3.1.3, (A) [***], and (B) [***]; and + +(d) For clarity, if AbbVie provides no response to Harpoon's proposed amendments within the foregoing three [***] period, then [***]. + +By way of example only, if Harpoon provides AbbVie with a proposed amended Initial Development Plan on [***] respectively. + +3.1.4 Final Development Report. Following AbbVie's exercise of the License Option, and within [***] after the [***], Harpoon shall provide AbbVie with the Final Development Report. AbbVie shall have the opportunity to review and inspect the Final Development Report and to reasonably ask questions of Harpoon and receive timely answers from Harpoon related thereto. Following AbbVie's receipt of the Final Development Report, AbbVie shall have [***] to provide notice to Harpoon identifying any Information set forth in Section 1.64, which + +- 23 - + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +AbbVie believes in good faith is not included in the Final Development Report. Harpoon shall provide AbbVie such Information [***]. + +3.2 AbbVie Option. + +3.2.1 Opt-In Development Report. Within [***] following the [***], Harpoon shall provide AbbVie with the Opt-In Development Report. AbbVie shall have the opportunity to review and inspect the Opt-In Development Report and to reasonably ask questions of Harpoon (provided that such questions are received by Harpoon prior to [***]) and receive timely answers from Harpoon related thereto until the expiration of the Harpoon Option Period. If, prior to the Development Report Review Deadline, AbbVie provides written notice to Harpoon reasonably requesting supplemental data or Information that is in Harpoon's possession or reasonably available to Harpoon (and that, in each case, can be provided without performing any additional research, studies or material scientific analysis, or generating any additional data) and is reasonably necessary for AbbVie to assess the Opt-In Development Report and make an informed decision about the exercise of the License Option (such notice to provide reasonable detail regarding the basis for such request), then Harpoon shall provide to AbbVie such requested supplemental data or Information within [***] of its receipt of such notice (or such longer period as the Parties may mutually agree is necessary to obtain and provide such supplemental data or Information) and the License Option Period shall be extended to [***] following the date of delivery of such supplemental data or Information, provided that in no event will the License Option Period be extended as a result of such request and additional information and data to more than [***] following the date Harpoon first provides the Opt-In Development Report to AbbVie under this Section 3.2.1. + +3.2.2 [***]. AbbVie may, but shall not be obligated to, deliver to Harpoon a written notice requesting an [***] at any time on or after the [***]; provided that [***] within any [***] period prior to the date of AbbVie's receipt of the Opt-In Development Report, unless any additional request for [***] is approved by the JGC, with Harpoon's consent not to be unreasonably withheld, conditioned or delayed. Upon Harpoon's receipt of any such notice, Harpoon shall promptly, but in any event within [***] of Harpoon's receipt of any such notice, [***]. AbbVie shall [***]. If, prior to the Development Report Review Deadline, AbbVie provides written notice to Harpoon reasonably requesting supplemental data or Information that is in Harpoon's possession or reasonably available to Harpoon (and that, in each case, can be provided without performing any additional research, studies or material scientific analysis, or generating any additional data) and is reasonably necessary for AbbVie to make [***] (such notice to provide reasonable detail regarding the basis for such request), then Harpoon shall provide to AbbVie such requested supplemental data or Information within [***] of its receipt of such notice (or such longer period as the Parties may mutually agree is necessary to obtain and provide such supplemental data or Information). For purposes of clarity, [***] Opt-In Development Report and shall not trigger the [***] period set forth in Section 3.2.3 with respect to the License Option Period, unless [***] shall trigger the [***] period set forth in Section 3.2.3. If AbbVie [***]. + +- 24 - + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +3.2.3 License Option Exercise Notice. Upon the Effective Date, Harpoon hereby grants to AbbVie the exclusive right, but not the obligation, to obtain the licenses set forth in Section 5.1.3 (the "License Option"). AbbVie shall have the right to exercise its License Option by providing written notice of such election to Harpoon ("License Option Exercise Notice") at any time on or after the Effective Date and on or prior to the date that is [***] from AbbVie's receipt of the Opt-In Development Report containing all items required pursuant to Section 1.112, as such period may be extended pursuant to Section 3.2.1 (the "License Option Period"). If AbbVie does not provide a License Option Exercise Notice within the License Option Period, then (a) Harpoon shall have no further obligations to perform any Initial Development Activities, (b) AbbVie's License Option shall expire, and this Agreement shall terminate in accordance with Section 12.1.1, and (c) AbbVie shall have no further rights in connection with Licensed Compounds of the Licensed Products. + +3.2.4 Exercise of the License Option. + +(a) AbbVie shall be deemed to have entered into the licenses set forth in Section 5.1.3 on the later of (i) Harpoon's receipt of the License Option Exercise Notice, or (ii) the expiration or earlier termination of any waiting period (or any extension thereof) under the HSR Act in the U.S. (the date of such receipt by Harpoon or the date of any such expiration or earlier termination, as applicable, the "License Option Exercise Closing Date"). + +(b) If AbbVie provides the License Option Exercise Notice during the License Option Period, upon AbbVie's request, the Parties shall work together in good faith to conduct an analysis of whether any filings or notifications are or may be required to be filed under the HSR Act (the "HSR Filing") or any similar applicable foreign law or regulation in connection with AbbVie's exercise of the License Option. The Parties shall each, as soon as practicable after the date of Harpoon's receipt of the License Option Exercise Notice, file or cause to be filed with the U.S. Federal Trade Commission and the U.S. Department of Justice and any relevant foreign governmental authority any such notifications. The Parties shall use their commercially reasonable efforts to respond promptly to any requests for additional information made by such agencies. For the purposes of this Section 3.2.4(b), the commercially reasonable efforts of AbbVie shall not require AbbVie to agree to any condition, prohibition, limitation or the like proposed by the U.S. Federal Trade Commission or other government authority to dispose of or hold separate any material portion of the business or assets of AbbVie or its Affiliates. The Parties shall equally share the filing fees in conducting the HSR Filing, and each Party is responsible for the costs and expenses of its own legal and other advice in preparing and conducting the HSR Filing. + +3.3 [***] At any time following the earlier of [***]. For clarity, if AbbVie's [***] shall be solely responsible for any cost or expense associated with such additional obligations, and for providing [***] to enable [***] in connection with the Licensed Compounds and Licensed Products prior to AbbVie's exercise of the License Option. AbbVie may elect to exercise its option to carry + +- 25 - + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +out [***]and prior to the expiration of the License Option Period. + +3.3.2 Upon the date AbbVie provides the [***], AbbVie shall be deemed to have entered into the license set forth in Section 5.1.2. AbbVie shall have the right, on a one-time only basis following[***]. AbbVie shall have final decision making authority with respect to all [***]. + +3.3.1 If AbbVie [***] and does not subsequently exercise the License Option, then AbbVie shall [***]. For clarity, (A) the foregoing license shall exclude [***], and notwithstanding anything in this Agreement to the contrary, except as necessary for Harpoon to exercise its rights under the foregoing subclause (a) or as required by the foregoing subclause (c), [***], and (B) the requirement under the foregoing subclause (c) shall [***] following the termination of this Agreement. + +3.4 Post-Exercise Development Activities. Following the License Option Exercise Closing Date, except for Harpoon's responsibilities in completing the Initial Development Activities and delivering the Final Development Report, AbbVie shall have the sole right to Develop and Manufacture (and shall control all aspects of Development and Manufacturing), including seeking Regulatory Approvals for, Licensed Compounds and Licensed Products in the Field and in the Territory and, for clarity, Harpoon and its Affiliates shall have no right to do so. Following the License Option Exercise Closing Date, AbbVie shall use Commercially Reasonable Efforts to Develop and obtain Regulatory Approval for [***] Licensed Product for [***] for use in [***] Major Market. AbbVie shall have the right to satisfy its diligence obligations under this Section 3.4 through its Affiliates or Sublicensees. Except as set forth in this Section 3.4, AbbVie shall have no other diligence obligations, express or implied, with respect to the Development of the Licensed Compounds or Licensed Products in the Territory. Following the License Option Exercise Closing Date and until the First Commercial Sale of a Licensed Product in a Major Market, AbbVie will provide to Harpoon following disbandment of the JGC, [***] reports within [***] after the end of each [***], in each case summarizing the key Development activities undertaken and summarizing the results achieved with respect to the applicable Licensed Compounds and Licensed Products in all Major Markets during such [***]. Prior to the disbandment of the JGC, AbbVie shall provide the JGC + +- 26 - + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +with interim updates on such activities and results at its regularly scheduled meetings. For clarity, if AbbVie [***], [***] and the Final Development Report), but AbbVie shall have final decision making authority with respect to the conduct of such Initial Development Activities; provided that in no event may AbbVie require Harpoon to conduct any Initial Development Activities, or to incur any costs or expenses in association with performing such Initial Development Activities following the License Option Exercise Closing Date, in excess of the activities set forth in the Initial Development Plan in existence immediately prior to the License Option Exercise Closing Date. AbbVie shall have the right, at AbbVie's sole election, to assume and complete some or all of such Initial Development Activities at AbbVie's sole cost and expense, and such step in following the License Option Exercise Closing Date shall not [***]. + +3.5 Supply of Technology for Development Purposes. + +3.5.1 Immediately after the License Option Exercise Closing Date, Harpoon shall, and shall cause its Affiliates to, without additional compensation, disclose and make available to AbbVie (which obligation may be satisfied by granting personnel designated by AbbVie controlled access to an electronic data room), in such form as maintained by Harpoon in the ordinary course of business, Regulatory Documentation, Harpoon Know-How, Joint Know-How, and any other Information claimed or covered by any Harpoon Patent or Joint Patent to the extent necessary or reasonably useful for AbbVie's Exploitation of the Licensed Compound and thereafter until the completion of the Initial Development Activities, promptly after the earlier of the development, making, conception, or reduction to practice of such Regulatory Documentation, Harpoon Know-How, Joint Know- How, or other Information. + +3.5.2 Immediately after the License Option Exercise Closing Date, [***], and (b) Harpoon shall provide AbbVie with all reasonable assistance required in order to transfer to AbbVie the Regulatory Documentation, Harpoon Know-How, Joint Know-How, and other Information required to be produced pursuant to Section 3.5.1 above, in each case in a timely manner, and shall reasonably assist AbbVie with respect to the Exploitation of any Licensed Compound and any Licensed Products, in each case subject to the limitations set forth in this Section 3.5.2. At AbbVie's request, Harpoon shall execute a bill of sale conveying such inventory. Without prejudice to the generality of the foregoing, if visits of Harpoon's representatives to AbbVie's facilities are reasonably requested by AbbVie for purposes of transferring the Regulatory Documentation, Harpoon Know-How, Joint Know-How, or other Information to AbbVie or for purposes of providing AbbVie the assistance referenced in the preceding sentence, Harpoon shall send appropriate representatives to AbbVie's facilities. Harpoon shall provide up to [***] and AbbVie shall [***] as mutually agreed by the Parties in writing. + +3.6 Expenses and Invoicing. Except as expressly set forth in this Agreement, each Party shall bear all costs and expenses associated with the Development activities for which such Party is responsible under this Agreement and the Initial Development Plan; provided that (a) [***], Harpoon's obligation to bear out of pocket costs shall be limited to [***] (the "[***]") and AbbVie shall bear any out of pocket costs in + +- 27 - + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +[***], and (b) [***] AbbVie has the right to assume following determination of Harpoon material breach pursuant to Section 3.1.2. To the extent that the costs of [***], Harpoon shall provide notice to the CMC Working Group. [***]. To the extent consistent with Harpoon's obligations under this Section 3.6, [***] If AbbVie assumes any Initial Development Activities in accordance with Section 3.1.2, then AbbVie shall invoice Harpoon each [***] for all reasonable direct internal (i.e. direct personnel costs) and documented, out- of-pocket costs associated with conducting such Initial Development Activities [***], and, Harpoon shall pay such invoices within [***] of receipt thereof. + +Subcontracting. + +Each Party shall have the right to subcontract any of its Development activities to a Third Party (a "Third Party Provider"); provided that, solely with respect of Third Party Providers performing services that are critical or material to the Licensed Compound or Licensed Products (such as contract research organizations and contract manufacturing organizations,) Harpoon must (a) [***] (b) except with respect to Third Party Providers [***] and (c) obtain a written undertaking from the Third Party Provider sufficient for Harpoon to comply with the applicable terms and conditions of this Agreement, including the confidentiality provisions of Article 9. + +3.8 Regulatory Matters. + +3.8.1 Pre-Exercise Regulatory Activities. Prior to the License Option Exercise Closing Date, the following shall apply: + +(a) Harpoon shall have the sole right and responsibility to prepare, obtain and maintain all INDs necessary to perform its obligations under the Initial Development Plan, and to conduct communications with the applicable Regulatory Authorities with respect to such INDs[***] submission to the applicable Regulatory Authorities. Harpoon shall provide [***]. + +(b) Subject to the immediately following sentence, Harpoon shall provide AbbVie with (i) access to or copies of all material written or electronic correspondence (other than regulatory filings) relating to the Development of Licensed Compounds or Licensed Products received by Harpoon or its Affiliates from, or forwarded by Harpoon or its Affiliates to, the Regulatory Authorities in the Territory, and (ii) if available, copies of meeting minutes and summaries of material meetings, conferences, and discussions held by Harpoon or its Affiliates with the Regulatory Authorities in the Territory, in each case + +- 28 - + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +((i) and (ii)) [***] of its receipt, forwarding or production of the foregoing, as applicable. If such written or electronic correspondence received from any such Regulatory Authority relates to the withdrawal, suspension, or revocation of a Regulatory Approval for a Licensed Product, the prohibition or suspension of the supply of a Licensed Compound or Licensed Product, or the initiation of any investigation, review, or inquiry by such Regulatory Authority concerning the safety of a Licensed Compound or Licensed Product, Harpoon shall notify AbbVie and provide AbbVie with copies of such written or electronic correspondence [***] after receipt of such correspondence. + +(c) Harpoon shall provide AbbVie with prior written notice, to the extent Harpoon has advance knowledge, of any scheduled material meeting, conference, or discussion with a Regulatory Authority in the Territory relating to a Licensed Product, [***] after Harpoon or its Affiliates first receive notice of the scheduling of such material meeting, conference, or discussion (or within such shorter period as may be necessary in order to give AbbVie a reasonable opportunity to attend such material meeting, conference, or discussion). [***] + +(d) For clarity, all Information provided by Harpoon to AbbVie under this Section 3.8.1 shall be the Confidential Information of Harpoon. + +3.8.2 Post-Exercise Regulatory Activities. Effective on the License Option Exercise Closing Date, the following shall apply: + +(a) Promptly after the License Option Exercise Closing Date and upon a mutually agreed upon date, but in any event no later than [***] after the License Option Exercise Closing Date, Harpoon shall transition to AbbVie all INDs for Licensed Compounds and Licensed Products. + +(b) As between the Parties, AbbVie, at its sole expense, shall have the sole right to prepare, obtain, and maintain the Drug Approval Applications (including the setting of the overall regulatory strategy therefor), other Regulatory Approvals and other regulatory submissions, and to conduct communications with the Regulatory Authorities, for Licensed Compounds or Licensed Products in the Territory (which shall include filings of or with respect to INDs and other filings or communications with the Regulatory Authorities). Harpoon shall support AbbVie, as may be reasonably necessary, in obtaining Regulatory Approvals for the Licensed Products, and in the activities in support thereof, including providing necessary documents or other materials required by Applicable Law to obtain Regulatory Approvals, in each case in accordance with the terms and conditions of this Agreement and the Initial Development Plan. + +(c) All Regulatory Documentation (including all Regulatory Approvals and Product Labeling) specifically relating to the Licensed Compounds or Licensed Products with respect to the Territory shall be owned by, and shall be the sole property and held in the name of, AbbVie or its designated Affiliate, Sublicensee or designee. Harpoon shall duly execute and deliver, or cause to be duly executed and delivered, such instruments and shall do and cause to be done such acts and things, including the filing of such assignments, agreements, documents, and instruments, as may be necessary under, or as AbbVie may reasonably request in connection with, or to carry out more effectively the purpose of, or to better assure and confirm unto AbbVie its rights under, this Section. + +3.8.3 Recalls. AbbVie shall make every reasonable effort to notify Harpoon promptly (and in any event no later than [***]) following its determination that any event, incident, or circumstance has occurred that may result in the need for a recall, market suspension, or market withdrawal of a Licensed Product in the Territory, and shall include in such notice the reasoning behind such determination, and any supporting facts. AbbVie (or its Sublicensee) shall have the right to make the final determination whether to voluntarily implement any such recall, market suspension, or market withdrawal in the Territory. If a recall, market suspension, or market withdrawal is mandated by a Regulatory Authority in + +- 29 - + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +the Territory, AbbVie (or its Sublicensee) shall initiate such a recall, market suspension, or market withdrawal in compliance with Applicable Law. For all recalls, market suspensions or market withdrawals undertaken pursuant to this Section 3.8.3, AbbVie (or its Sublicensee) shall be solely responsible for the execution thereof, and Harpoon shall reasonably cooperate in all such recall efforts, at AbbVie's expense. + +3.8.4 Compliance. Each Party shall perform or cause to be performed, any and all of its Development activities, including Initial Development Activities, in good scientific manner and in compliance with all Applicable Law. + +3.8.5 Records. Each of Harpoon and AbbVie shall, and shall use their commercially reasonable efforts to ensure that its Third Party Providers shall, maintain records in sufficient detail and in good scientific manner appropriate for patent and regulatory purposes, and in compliance with Applicable Law, which shall be complete and accurate and shall properly reflect all work done and results achieved in the performance of its Development activities which, following the Effective Date, shall record only such activities and shall, to the extent reasonably practicable, not include or be commingled with records of activities outside the scope of this Agreement. Such records shall be retained by Harpoon or AbbVie, as the case may be, for [***], or for such longer period as may be required by Applicable Law. Following the License Option Exercise Closing Date, upon AbbVie's request, Harpoon shall provide to AbbVie copies of the records it has maintained pursuant to this Section 3.8.5 which have not been provided or otherwise transferred to AbbVie pursuant to Section 3.5. AbbVie shall maintain such records and the information disclosed therein in confidence in accordance with Article 9. + +3.8.6 Following the License Option Exercise Closing Date, if AbbVie reasonably considers that it has not been provided with all Information required to be provided under Section 3.5, or in connection with any request by a Regulatory Authority or required under Applicable Law, AbbVie shall have the right, [***], to inspect and copy all records of Harpoon maintained pursuant to Section 3.8.5. Prior to the License Option Exercise Closing Date, AbbVie shall not have such right to inspect or copy Harpoon's records, except to the extent required by Applicable Laws, or as reasonably necessary to comply with a request by a Regulatory Authority. AbbVie shall maintain such records and the information disclosed therein in confidence in accordance with Article 9. + +ARTICLE 4 COMMERCIALIZATION + +4.1 In General. Effective on the License Option Exercise Closing Date, AbbVie (itself or through its Affiliates or Sublicensees) shall have the sole right to Commercialize Licensed Compounds and Licensed Products in the Territory at its own cost and expense. + +4.2 Commercialization Diligence. Following the License Option Exercise Closing Date, AbbVie shall use Commercially Reasonable Efforts to Commercialize [***] Licensed Product in [***] Major Market following receipt of Regulatory Approval therefor in such Major Market; provided that [***]; provided further that, for purposes of clarity, [***]. + +- 30 - + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +[***] If at any time Harpoon has a reasonable basis to believe that AbbVie is in material breach of its obligations under this Section 4.2, then Harpoon may so notify AbbVie, specifying the basis for its belief, and the Parties shall meet within [***] after such notice to discuss in good faith Harpoon's concerns. + +4.3 Booking of Sales; Distribution. Effective on the License Option Exercise Closing Date, AbbVie shall have the sole right to invoice and book sales, establish all terms of sale (including pricing and discounts) and warehousing, and distribute the Licensed Products in the Territory and to perform or cause to be performed all related services. AbbVie shall handle all returns, recalls, or withdrawals, order processing, invoicing, collection, distribution, and inventory management with respect to the Licensed Products in the Territory. + +4.4 Product Trademarks. Effective on the License Option Exercise Closing Date, AbbVie shall have the sole right to determine and own the Product Trademarks to be used with respect to the Exploitation of the Licensed Products on a worldwide basis. Harpoon shall not, and shall not permit its Affiliates to, attack, dispute, or contest the validity of or ownership of such Product Trademark anywhere in the Territory or any registrations issued or issuing with respect thereto or use in their respective businesses, any Trademark that is confusingly similar to, misleading or deceptive with respect to or that dilutes any (or any part) of the Product Trademarks. Notwithstanding the foregoing, to the extent required by Applicable Law in a country or other jurisdiction in the Territory, the promotional materials, packaging, and Product Labeling for the Licensed Products used by AbbVie and its Affiliates in connection with the Licensed Products in such country or other jurisdiction shall contain (a) the corporate name of Harpoon (and to the extent required, Harpoon grants AbbVie a license, with the right to sublicense, to use the same solely for such purpose), and (b) the logo and corporate name of the manufacturer (if other than AbbVie or an Affiliate). + +4.5 Commercial Supply of Licensed Compounds or Licensed Products. + +4.5.1 Commercial Supply of Licensed Compounds or Licensed Products. Effective on the License Option Exercise Closing Date, as between the Parties, AbbVie shall have the sole right, at its expense, to Manufacture (or have Manufactured) and supply the Licensed Compound and Licensed Products for commercial sale in the Territory by AbbVie and its Affiliates and Sublicensees. + +4.5.2 Manufacturing Technology Transfer Upon AbbVie's Request. AbbVie shall have the right, at any time [***] the License Option Exercise Closing Date, as applicable, to require Harpoon to effect a one-time full transfer to AbbVie or its designee (which designee may be an Affiliate or a Third Party manufacturer of Licensed Compound or Licensed Product) of all Harpoon Know-How specifically relating to the then-current process for the Manufacture of the Licensed Compound and Licensed Products, including process qualification and validation, quality assurance and quality control but excluding [***] (the "Manufacturing Process") and to implement the Manufacturing Process at a facility designated by AbbVie (such transfer and implementation, as more fully described in this Section 4.5.2, the "Manufacturing Technology Transfer"). Harpoon shall provide, and shall use commercially reasonable efforts to cause its Third Party manufacturers to provide (including by using commercially reasonable efforts to negotiate contractual obligations for such Third Party manufacturers to do so under agreements entered into following the Effective Date), all reasonable assistance requested by AbbVie to enable AbbVie (or its Affiliate or designated Third Party manufacturer, as applicable) to implement the Manufacturing Process at the facility designated by AbbVie. If requested by AbbVie, such assistance shall include providing reasonable assistance to AbbVie to facilitate AbbVie entering into agreements with applicable Third Party suppliers relating to the Licensed Compound and Licensed Products. Without limitation + +- 31 - + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +to the foregoing, in connection with the Manufacturing Technology Transfer, Harpoon shall, and shall use commercially reasonable efforts to cause its Third Party manufacturers (including by using commercially reasonable efforts to negotiate contractual obligations for such Third Party manufacturers to comply with the same obligations under agreements entered into following the Effective Date) to: + +(a) make available to AbbVie (or its Affiliate or designated Third Party manufacturer, as applicable) from time to time as AbbVie may request, all [***]to use and practice the Manufacturing Process; + +(b) cause all appropriate [***] assist with the working up and use of the Manufacturing Process [***]; + +(c) without limiting the generality of Section 4.5.2(b), cause all appropriate [***] employees and representatives of Harpoon and its Affiliates and its Third Party manufacturers to meet with employees or representatives of AbbVie (or its Affiliate or designated Third Party manufacturer, as applicable) at the applicable manufacturing facility and make available all necessary equipment, at mutually convenient times, to support and execute the transfer of all applicable analytical methods and the validation thereof (including, all applicable Harpoon Know-How, methods, validation documents and other documentation, materials and sufficient supplies of all primary and other reference standards); + +(d) take such steps as are necessary to assist in reasonable respects AbbVie (or its Affiliate or designated Third Party manufacturer, as applicable) in obtaining any necessary licenses, permits or approvals from Regulatory Authorities with respect to the Manufacture of the Licensed Compound and Licensed Products at the applicable facilities; and + +(e) provide such other assistance as AbbVie (or its Affiliate or designated Third Party manufacturer, as applicable) may reasonably request to enable AbbVie (or its Affiliate or designated Third Party manufacturer, as applicable) to use and practice the Manufacturing Process and otherwise to Manufacture Licensed Compounds and Licensed Products. + +Except to the extent that a Manufacturing Technology Transfer is requested in connection with a breach of this Agreement, Harpoon's obligations to provide personnel and support under this Section 4.5.2 shall be limited to [***]. Thereafter, if requested by AbbVie, Harpoon shall use commercially reasonable efforts to continue to perform such obligations; provided that AbbVie will reimburse Harpoon for (i) [***]), and (ii) [***] For clarity,[***]. + +- 32 - + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +4.5.3 Subsequent Manufacturing Technology Transfer. Without limiting the foregoing, if Harpoon makes any invention, discovery, or improvement specifically relating to the Manufacture of a Licensed Compound or a Licensed Product during the Term, Harpoon shall promptly disclose such invention, discovery, or improvement to AbbVie, and shall, at AbbVie's request, perform technology transfer with respect to such invention, discovery, or improvement in the same manner as provided in Section 4.5.2, provided that any such further technology transfer occurring (a) prior to the License Option Exercise Closing Date shall be at Harpoon's sole expense and (b) after the License Option Exercise Closing Date shall be at AbbVie's sole expense. + +ARTICLE 5 GRANT OF RIGHTS + +5.1 Grants to AbbVie. + +5.1.1 Effective upon the date that AbbVie commences performing Initial Development Activities pursuant to Section 3.1.2, Harpoon (on behalf of itself and its Affiliates) shall grant and hereby grants AbbVie a co- exclusive (with Harpoon), royalty-free license, with the right to grant sublicenses in accordance with Section 5.3, under the Harpoon Patents, the Harpoon Know-How, and Harpoon's interests in the Joint Patents and the Joint Know-How, solely to the extent necessary for AbbVie to conduct Initial Development Activities assumed by AbbVie in accordance with Section 3.1.2 (if any). + +5.1.2 Upon the [***], Harpoon (on behalf of itself and its Affiliates) hereby grants to AbbVie a co-exclusive (with Harpoon), royalty-free (subject to [***] [***]) license, with the right to grant sublicenses in accordance with Section 5.3, under the Harpoon Patents, the Harpoon Know-How, and Harpoon's interests in the Joint Patents and the Joint Know- How, to Develop and Manufacture the Licensed Compounds and Licensed Products solely to the extent necessary for AbbVie to perform [***]. For clarity, with respect [***], AbbVie acknowledges and agrees that [***]. AbbVie further acknowledges and agrees that no sublicense is granted to AbbVie under certain intellectual property rights licensed from [***]. + +5.1.3 Upon the License Option Exercise Closing Date, Harpoon (on behalf of itself and its Affiliates) hereby grants to AbbVie: + +(a) an exclusive (including with regard to Harpoon and its Affiliates, except as provided in Section 5.6) license (or sublicense), with the right to grant sublicenses in accordance with Section 5.3, under the Harpoon Patents, the Harpoon Know-How, and Harpoon's interests in the Joint Patents and the Joint Know-How, to Exploit the Licensed Compounds and Licensed Products in the Field in the Territory; + +(b) an exclusive (including with regard to Harpoon and its Affiliates, except as provided in Section 5.6) license and right of reference, with the right to grant sublicenses and further rights of reference in accordance with Section 5.3, under the Regulatory Approvals and any other Regulatory Documentation that Harpoon or its Affiliates may Control with respect to the Licensed Compounds or Licensed Products solely for purposes of Exploiting the Licensed Compounds and Licensed Products in the Field in the Territory. + +- 33 - + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +(c) The grants set forth in this Section 5.1.3 will automatically come into full force and effect on the License Option Exercise Closing Date without any further action required by either Party under this Agreement. + +5.2 Grants to Harpoon. Upon the Effective Date, AbbVie hereby grants to Harpoon a non-exclusive, royalty-free license, without the right to grant sublicenses (other than to permitted subcontractors of Harpoon in accordance with Section 3.7), under the AbbVie Patents, AbbVie Know-How, and AbbVie's interests in the Joint Patents and the Joint Know-How, to Develop and Manufacture the Licensed Compounds or Licensed Products in the Territory solely to the extent necessary for Harpoon to perform its obligations as set forth in, and subject to, the Initial Development Plan. + +5.3 Sublicenses. AbbVie shall have the right to grant sublicenses (or further rights of reference), through multiple tiers of Sublicensees, under the licenses and rights of reference granted in Sections 5.1.1, 5.1.2 and 5.1.3, to its Affiliates and other Persons; provided that any such sublicenses shall be consistent with the terms and conditions of this Agreement and AbbVie shall remain liable for its obligations under this Agreement and for the performance of all Sublicensees. AbbVie shall provide Harpoon with a copy of any such sublicense agreement within [***] after the execution thereof, which copy may be redacted with respect to information not pertinent to compliance with this Agreement. + +5.4 Distributorships. AbbVie shall have the right, in its sole discretion, to appoint its Affiliates, and AbbVie and its Affiliates shall have the right, in their sole discretion, to appoint any other Persons, in the Territory or in any country or other jurisdiction of the Territory, to distribute, market, and sell the Licensed Products. Where AbbVie or its Affiliates appoints such a Person and such Person is not an Affiliate of AbbVie and does not have rights to, and does not, Manufacture any Licensed Product (except solely to package or label such Licensed Product purchased in bulk form from AbbVie or its Affiliates), that Person shall be a "Distributor" for purposes of this Agreement. + +5.5 Co-Promotion Rights. For purposes of clarity, AbbVie and its Affiliates shall have the right, in their sole discretion, to co-promote the Licensed Products with any other Person(s), or to appoint one (1) or more Third Parties to promote the Licensed Products without AbbVie in all or any part of the Territory. + +5.6 Retention of Rights. + +5.6.1 Notwithstanding the exclusive licenses granted to AbbVie pursuant to Section 5.1.3, Harpoon retains the right to practice under the Harpoon Patents, the Harpoon Know-How, Harpoon's interests in the Joint Patents and the Joint Know-How, Regulatory Approvals and any other Regulatory Documentation (a) to perform (and to sublicense Third Parties to perform as permitted hereunder) its obligations under this Agreement and (b) for any purpose outside the scope of the licenses and rights granted pursuant to Sections 3.2.3 and 5.1, including to Exploit any products or services other than Licensed Compounds or Licensed Products, subject to Section 5.8. Except as expressly provided herein, Harpoon grants no other right or license, including any rights or licenses to the Harpoon Patents, the Harpoon Know-How, Harpoon's interests in the Joint Patents and Joint Know-How, the Regulatory Documentation or any other Patent or intellectual property rights not otherwise expressly granted herein. For clarity, if AbbVie does not exercise its License Option, Harpoon retains all rights under Harpoon's interests in the Joint Patents and the Joint Know-How, if any, to Exploit the Licensed Compounds and Licensed Products in its sole discretion without duty to account to AbbVie in connection with such use or Exploitation. + +5.6.2 Except as expressly provided herein, AbbVie grants no other right or license, including any rights or licenses to the AbbVie Patents, the AbbVie Know-How, the Regulatory Documentation, or any other Patent or intellectual property rights not otherwise expressly granted herein. + +5.7 Confirmatory Patent License. Harpoon shall if requested to do so by AbbVie immediately enter into confirmatory license agreements consistent with this Agreement in the form or substantially the form reasonably requested by AbbVie for purposes of recording the licenses granted under + +- 34 - + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +this Agreement with such patent offices in the Territory as AbbVie considers appropriate. Until the execution of any such confirmatory licenses, so far as may be legally possible, Harpoon and AbbVie shall have the same rights in respect of the Harpoon Patents and Joint Patents and be under the same obligations to each other in all respects as if the said confirmatory licenses had been executed. + +5.8 Exclusivity with Respect to the Territory. + +5.8.1 Harpoon shall not, and shall cause its Affiliates not to (a) directly or indirectly, develop, commercialize or otherwise exploit any Competing Product in any country or other jurisdiction in the Territory, or (b) license, authorize, appoint, or otherwise enable any Third Party to directly or indirectly, develop, commercialize or otherwise exploit any Competing Product in any country or other jurisdiction in the Territory, except, in each case ((a) and (b)), as otherwise expressly provided in this Agreement. + +5.8.2 Notwithstanding the provisions of Section 5.8, if, during the Term, (a) Harpoon or any of its Affiliates acquires, as the result of an Acquisition, rights to a Competing Product, such Acquisition, and the development, manufacture or commercialization of such Competing Product thereafter, shall not constitute a breach of Section 5.8 if Harpoon or such Affiliate, as applicable, [***]; or (b) Harpoon undergoes a Change in Control and the relevant acquirer is either then commercializing a Competing Product, or has in development any Competing Product, such Change in Control, and the commercialization (or development and subsequent commercialization, if such Competing Product receives Regulatory Approval) of such Competing Product by such relevant acquirer or any of its Affiliates, shall not constitute a breach of Section 5.8; provided that such (x) acquirer Segregates the Competing Product and (y) AbbVie shall have the right, in its sole and absolute discretion, by written notice delivered to Harpoon (or its successor) at any time during the [***] following the written notice contemplated by Section 13.2.1, to (i) terminate any or all provisions of this Agreement providing for any delivery by AbbVie to Harpoon of Confidential Information of AbbVie relating to activities contemplated by this Agreement, save only for (A) Article 6, (B) information regarding sublicenses pursuant to Section 5.3, (C) information regarding the prosecution, enforcement, defense, litigation, infringement and licensing of Patents pursuant to (1) Sections 7.2.1, 7.2.3, 7.3.1, 7.3.5, 7.4, and 7.5.2, (2) solely with respect to Joint Patents, Sections 7.2.2, 7.3.2, and 7.5.3, and (3) solely with respect to Joint Patents and Harpoon Patents, Sections 7.3.4 and 7.5.1, (D) notice of any license pursuant to Section 5.9.2, (E) safety data pursuant to Section 8.1, (F) proposed disclosures pursuant to Section 9.5, (G) communications under Section 11.4 and (H) notices pursuant to Sections 11.3 and 13.1; and (ii) disband the JGC and terminate its activities, in which case the provisions set forth in the last sentence of Section 2.3 shall apply. + +5.9 In-License Agreements. + +5.9.1 During the Term, neither Harpoon nor any of its Affiliates shall, [***], not to be unreasonably withheld, conditioned or delayed, enter into any agreement with a Third Party related to Information, Regulatory Documentation, materials, Patents, or other intellectual other property rights [***]. + +5.9.2 Following the License Option Exercise Closing Date, if [***] owned or controlled by a Third Party in a particular country or jurisdiction is necessary to Exploit a Licensed Compound or Licensed Product, AbbVie shall have the first right, but not the obligation, to negotiate and enter into an agreement with a Third Party in order to obtain a license or right under such Patent or intellectual property right. If AbbVie elects (in a written communication submitted to Harpoon) not to enter into any such agreement, Harpoon may enter into any such agreement. Notwithstanding the foregoing, if a [***] owned or controlled by a Third Party is [***] + +- 35 - + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +[***], then [***] the costs associated with any such license to the Patent or other intellectual property right of such Third Party ("AbbVie [***] Rights"). + +5.9.3 If Harpoon or any of its Affiliates, after the Effective Date, become a party to a license, sublicense or other agreement for [***], or as permitted in Sections 5.9.1 or 5.9.2, then Harpoon shall inform AbbVie and shall provide AbbVie with a copy of such license, sublicense, or other agreement ("Proposed Future In-Licensed Rights"). If AbbVie notifies Harpoon in writing within [***] after receipt of such copy that AbbVie wishes to receive a license or sublicense (as applicable) under, and be subject to the rights and obligations of, the Proposed Future In-Licensed Rights as they apply to AbbVie and this Agreement, then the Proposed Future In-Licensed Rights shall automatically be included in the Harpoon Patents and/or Harpoon Know-How (as applicable) hereunder and AbbVie agrees to abide by all applicable terms and conditions of such license, sublicense or other agreement, as it relates to AbbVie and this Agreement, including payment of any financial obligations based upon AbbVie's practice of such intellectual property rights. Effective on and following the License Option Exercise Closing Date, AbbVie shall be solely responsible for payment of any financial obligations under [***], and any license, sublicense or other agreement AbbVie elects to enter into with a Third Party that grants rights to AbbVie in connection with the Manufacture of a Licensed Compound or Licensed Product. Except as provided in this Section 5.9.3, Harpoon shall be solely responsible for and shall bear any and all payments under any Harpoon In-License Agreements, including any agreement between Harpoon and a Third Party entered prior to or on the Effective Date. For the purpose of clarity, AbbVie shall not be responsible for [***], or (b) [***] relating to the manufacture of any compound or product other than the Licensed Compounds and Licensed Products. + +ARTICLE 6 PAYMENTS AND RECORDS + +6.1 Upfront Payment. No later than [***] following the Effective Date, AbbVie shall pay Harpoon an upfront, non-refundable, non-creditable amount equal to Thirty Million Dollars ($30,000,000). + +6.2 Development and Regulatory Milestones. In partial consideration of the rights granted by Harpoon to AbbVie hereunder and subject to the terms and conditions set forth in this Agreement, AbbVie shall pay to Harpoon a non-refundable milestone payment within [***] after the achievement of each of the following milestones, calculated as follows: + +6.2.1 upon the License Option Exercise Closing Date, Two Hundred Million Dollars ($200,000,000); + +6.2.2 upon first Initiation of the Phase I/IB Trial under the Initial Development Plan for a Licensed Compound in the U.S., Fifty Million Dollars ($50,000,000); provided that subject to Section 3.1.3, (a) if [***] [***], but [***], this milestone payment shall be [***], and (b) if such [***] occurs on or after [***], this milestone payment shall be [***]; + +6.2.3 upon [***], [***]; + +- 36 - + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +6.2.4 upon [***], [***]; and + +6.2.5 upon [***] and [***], [***]. + +Each milestone payment in this Section 6.2 shall be payable only upon the first achievement of such milestone and no amounts shall be due for subsequent or repeated achievements of such milestone, whether for the same or a different Licensed Compound or Licensed Product. The maximum aggregate amount payable by AbbVie pursuant to this Section 6.2 is [***]. + +6.3 First Commercial Sales Milestones. In partial consideration of the rights granted by Harpoon to AbbVie hereunder and subject to the terms and conditions set forth in this Agreement, AbbVie shall pay to Harpoon the following non-refundable milestone payments due within [***] after the achievement of each of the following milestones, calculated as follows: + +6.3.1 upon [***] Licensed Product, [***]; and + +6.3.2 upon the First Commercial Sale for the first Licensed Product to achieve such [***], [***]. + +Each milestone payment in this Section 6.3 shall be payable only upon the first achievement of such milestone and no amounts shall be due for subsequent or repeated achievements of such milestone, whether for the same or a different Licensed Compound or Licensed Product. The maximum aggregate amount payable by AbbVie pursuant to this Section 6.3 is [***]. + +6.4 Sales-Based Milestones. In partial consideration of the rights granted by Harpoon to AbbVie hereunder and subject to the terms and conditions set forth in this Agreement, AbbVie shall pay to Harpoon the following non- refundable milestone payments due within [***] after the end of the [***] in which such milestone was achieved for the aggregate sales of all Licensed Products in the Territory, calculated as follows:[***]. + +Each milestone payment in this Section 6.4 shall be payable only upon the first achievement of such milestone in a [***], and no amounts shall be due for subsequent or repeated achievements of such milestone in subsequent [***], whether for the same or a different Licensed Compound or Licensed Product. The maximum aggregate amount payable by AbbVie pursuant to this Section is [***]. + +6.5 Royalties. + +- 37 - + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +6.5.1 Royalty Rates. As further consideration for the rights granted to AbbVie hereunder, subject to Section 6.5.3, commencing upon the First Commercial Sale of a Licensed Product in the Territory, on a Licensed Product- by-Licensed Product basis, AbbVie shall pay to Harpoon a royalty on Net Sales of each Licensed Product in the Territory (excluding Net Sales of each Licensed Product in any country or other jurisdiction in the Territory for which the Royalty Term for such Licensed Product in such country or other jurisdiction has expired) during [***] at the following rates: + +Net Sales in the Territory of each Licensed Product in a [***] Royalty Rate + +For that portion of aggregate Net Sales of each Licensed Product[***] [***] + +For that portion of aggregate Net Sales of each Licensed Product[***] [***] + +For that portion of aggregate Net Sales of each Licensed Product[***] [***] + +With respect to each Licensed Product in each country or other jurisdiction in the Territory, [***]. + +6.5.2 Royalty Term. AbbVie shall have no obligation to pay any royalty with respect to Net Sales of any Licensed Product in any country or other jurisdiction after the Royalty Term for such Licensed Product in such country or other jurisdiction has expired. + +6.5.3 Reductions. Notwithstanding the foregoing: + +(a) if in any country or other jurisdiction in the Territory during the Royalty Term for a Licensed Product (i) there is [***], then for each such country or other jurisdiction, starting with the [***] occurs, the royalties payable to Harpoon for the Net Sales of such Licensed Product in such country or other jurisdiction shall be [***] set forth in Section 6.5.1; (ii) there [***], then for each such country or other jurisdiction, starting with the [***], the royalties payable to Harpoon for the Net Sales of such Licensed Product in such country or other jurisdiction shall be [***] set forth in Section 6.5.1; and (iii) if for any [***] during the Royalty Term [***] in such country or other jurisdiction during such [***], then the royalties due to Harpoon pursuant to this Section 6.5 in such country or other jurisdiction shall be [***] in each such [***]. For purposes herein, (A) [***] (B) [***] + +- 38 - + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +[***] in each case ((A) and (B)) of the unit sales of such Licensed Product sold in that country or other jurisdiction by AbbVie, its Affiliates and Sublicensees. Unless otherwise agreed by the Parties, [***] sold during a [***] shall be as reported by [***] or any successor or any other independent sales auditing firm reasonably agreed upon by the Parties; + +(b) if AbbVie enters into an agreement with a Third Party in order to obtain a license or right under [***] owned or controlled by such Third Party in a particular country or other jurisdiction pursuant to Section 5.9.2, AbbVie shall be entitled to deduct from [***] hereunder with respect to a Licensed Product for a particular country or other jurisdiction [***] of [***] paid to such Third Party (excluding [***]) as consideration for the grant of the license or sublicense in connection with such Licensed Product (and to the extent reasonably allocable to the Licensed Product, if such Third Party agreement is also applicable to other programs or products of AbbVie) for such country or other jurisdiction; provided that in no case shall such deduction reduce such [***] set forth in [***] [***]. For clarity, no reduction shall apply in connection with payments made by AbbVie in connection with any [***]; + +(c) [***] in a country or other jurisdiction in the Territory, then, for the purposes of calculating the royalties payable with respect to such Licensed Product under Section 6.5.1, [***]; and + +(d) if, and in such case from and after the date on which, a Licensed Product is Exploited in a country or other jurisdiction and such Licensed Product is not either or both (i) [***] or (ii) covered by (A) [***] Licensed Product in such country or other jurisdiction or (B) a [***] in such country or other jurisdiction, then the royalty rate set forth in Section 6.5.1 with respect to such country or other jurisdiction (for purposes of calculations under Section 6.5.1), shall be reduced by [***];. + +(e) In no event will the cumulative reductions under the foregoing Sections 6.5.3(a) through 6.5.3(d) reduce the [***] payable to Harpoon on any Licensed Product in any [***] by greater than [***] of the amounts otherwise payable under Section 6.5.1 for such Licensed Product. Credits not exhausted in any [***] may be carried into future [***], subject to the foregoing sentence. + +6.6 Royalty Payments and Reports. AbbVie shall calculate all amounts payable to Harpoon pursuant to Section 6.5 at the end of each [***], which amounts shall be converted to Dollars, in accordance with Section 6.7. AbbVie shall pay to Harpoon the royalty amounts due with respect to a given [***] within [***] after the end of such [***]. Each payment of royalties due to Harpoon shall be accompanied by a statement of the amount of Net Sales of each Licensed Product in each country or other jurisdiction the Territory during the applicable [***] (including such amounts expressed in local currency and as converted to Dollars) and a calculation of the amount of royalty payment due on such Net Sales for such [***], including the amount of any reductions pursuant to Section 6.5.3. + +6.7 Mode of Payment; Offsets. All payments to either Party under this Agreement shall be made by deposit of Dollars in the requisite amount to such bank account as the receiving Party may from + +- 39 - + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +time to time designate by notice to the paying Party. For the purpose of calculating any sums due under, or otherwise reimbursable pursuant to, this Agreement (including the calculation of Net Sales expressed in currencies other than Dollars), a Party shall convert any amount expressed in a foreign currency into Dollar equivalents using its, its Affiliate's or Sublicensee's standard conversion methodology consistent with Accounting Standards. [***]. + +6.8 Withholding Taxes. + +6.8.1 Withholding Amounts. Where any sum due to be paid to either Party hereunder is subject to any withholding or similar tax, the Parties shall use their commercially reasonable efforts to do all such acts and things and to sign all such documents as will enable them to take advantage of any applicable double taxation agreement or treaty. In the event there is no applicable double taxation agreement or treaty, or if an applicable double taxation agreement or treaty reduces but does not eliminate such withholding or similar tax, the payor shall remit such withholding or similar tax to the appropriate government authority, deduct the amount paid from the amount due to payee and secure and send to payee the best available evidence of the payment of such withholding or similar tax. Any such amounts deducted by the payor in respect of such withholding or similar tax shall be treated as having been paid by the payor for purposes of this Agreement. If withholding or similar taxes are paid to a government authority, each Party will provide the other such assistance as is reasonably required to obtain a refund of the withheld or similar taxes, or to obtain a credit with respect to such taxes paid. In the event that a government authority retroactively determines that a payment made by the paying Party to the receiving Party pursuant to this Agreement should have been subject to withholding or similar (or to additional withholding or similar) taxes, and such paying Party (the "Withholding Party") remits such withholding or similar taxes to the government authority, including any interest and penalties that may be imposed thereon (together with the tax paid, the "Withholding Amount"), the Withholding Party will have the right (a) to offset the Withholding Amount against future payment obligations of the Withholding Party under this Agreement or (b) to invoice the receiving Party for the Withholding Amount (which shall be payable by the receiving Party within [***] of its receipt of such invoice), or to pursue reimbursement of the Withholding Amount by any other available remedy. + +6.8.2 Withholding Actions. Notwithstanding the foregoing, the Parties acknowledge and agree that if AbbVie (or its assignee pursuant to Section 13.4) is required by Applicable Law to withhold taxes in respect of any amount payable under this Agreement, and if such withholding obligation arises as a result of any action taken by AbbVie or its Affiliate or successor or assignee, including without limitation an assignment of this Agreement as permitted under Section 13.4 of this Agreement, a change in tax residency of AbbVie, or payments arise or are deemed to arise through a branch of AbbVie and such withholding taxes exceed the amount of withholding taxes that would have been applicable if such action had not occurred (each an "AbbVie Withholding Tax Action"), then, any such amount payable shall be increased to take into account such increased withholding taxes as may be necessary so that, after making all required withholdings Harpoon (or its assignee pursuant to Section 13.4) receives an amount equal to the sum it would have received had no such AbbVie Withholding Tax Action occurred. Harpoon shall (a) use its commercially reasonable efforts to obtain an exemption of such withheld amounts to the extent practicable under Applicable Law and (b) cooperate with AbbVie to obtain a reduction or refund of such withheld amounts. + +6.9 Indirect Taxes. Except as otherwise provided in this Agreement, all payments due under this Agreement are exclusive of value added taxes, sales taxes, consumption taxes and other similar taxes (the "Indirect Taxes"). Notwithstanding anything to the contrary in this Agreement, AbbVie shall be responsible for any Indirect Taxes as well as any transfer, documentary, sales use, stamp, registration, value added or other similar tax that is imposed with respect to the payments or the related transfer of rights or other property pursuant to the terms of this Agreement. If the Indirect Taxes originally paid or otherwise borne by the paying Party are in whole or in part subsequently determined not to have been chargeable, all reasonably necessary steps will be taken by the receiving Party to receive a refund of these undue Indirect Taxes from the + +- 40 - + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +applicable governmental authority or other fiscal authority and any amount of undue Indirect Taxes repaid by such authority to the receiving Party will be transferred to the paying Party within [***] of receipt. + +6.10 Interest on Late Payments. If any payment due to either Party under this Agreement is not paid when due, then such paying Party shall pay interest thereon (before and after any judgment) at [***] such interest to run from the date on which payment of such sum became due until payment thereof in full together with such interest; provided however that [***], then such interest [***], as adjusted from time to time on the [***]. + +6.11 Audit. AbbVie shall, shall cause its Affiliates to, and shall use commercially reasonable efforts to cause its Sublicensees to, keep complete and accurate books and records pertaining to Net Sales of Licensed Products, in sufficient detail to calculate all amounts payable hereunder. At the request of Harpoon, AbbVie shall permit an independent public accounting firm of nationally recognized standing designated by Harpoon and reasonably acceptable to AbbVie, [***], to audit the books and records maintained pursuant to this Section 6.11 to ensure the accuracy of all reports and payments made hereunder, including any permitted deductions from Net Sales pursuant to Section 1.108. Such examinations may not (a) be conducted for any [***] [***] (b) be conducted more than once in any [***] period or (c) be [***] (unless a previous audit revealed an underpayment with respect to such [***]). The accounting firm shall disclose to Harpoon only whether the reports are correct or not, and the specific details concerning any discrepancies. No other information shall be shared. Except as provided below, the cost of this audit shall be borne by Harpoon, unless the audit reveals a variance [***] from the reported amounts or [***], in which case AbbVie shall bear the cost of the audit. + +6.12 Audit Dispute. In the event of a dispute with respect to any audit under Section 6.11, Harpoon and AbbVie shall work in good faith to resolve the disagreement. If the Parties are unable to reach a mutually acceptable resolution of any such dispute within [***], the dispute shall be submitted for resolution to a certified public accounting firm jointly selected by each Party's certified public accountants or to such other Person as the Parties shall mutually agree (the "Audit Expert"). The decision of the Audit Expert shall be final and the costs of such determination as well as the initial audit shall be borne between the Parties in such manner as the Audit Expert shall determine. Not later than [***] after such decision and in accordance with such decision, AbbVie shall pay the additional amounts or Harpoon shall reimburse the excess payments, as applicable. + +6.13 Confidentiality. The receiving Party shall treat all information subject to review under this Article 6 in accordance with the confidentiality provisions of Article 9 and the Parties shall cause the Audit Expert to enter into a reasonably acceptable confidentiality agreement with AbbVie obligating such firm to retain all such financial information in confidence pursuant to such confidentiality agreement. + +6.14 [***] The development and regulatory milestone payments, first commercial sales milestone payments, sales-based milestone payments and royalties in Sections 6.2, 6.3 6.4, and 6.5 shall not apply at the same rates to Development and Commercialization of Licensed Compounds or Licensed Products [***] for eligibility to be treated for such disease, state, or condition with a Licensed Compound or Licensed Product or for monitoring patients who are or have been treated with a Licensed Compound or Licensed Product. In the event that a Licensed Compound or Licensed Product is Developed for any such purposes, [***] for the sale of such Licensed Product that [***] of such Licensed Product and [***], as applicable; provided that, for clarity, any such [***] + +- 41 - + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +[***] [***] under this Agreement with respect to Licensed Compounds or Licensed Products that are [***]. + +6.15 No Other Compensation. Each Party hereby agrees that the terms of this Agreement fully define all consideration, compensation and benefits, monetary or otherwise, to be paid, granted or delivered by one Party to the other Party in connection with the transactions contemplated herein. Neither Party previously has paid or entered into any other commitment to pay, whether orally or in writing, any of the other Party's employees, directly or indirectly, any consideration, compensation or benefits, monetary or otherwise, in connection with the transaction contemplated herein. + +ARTICLE 7 INTELLECTUAL PROPERTY + +7.1 Ownership of Intellectual Property. + +7.1.1 Ownership of Technology. Subject to Section 3.8.2(c) and Section 7.1.2, as between the Parties, each Party, or their respective Affiliates, shall own and retain all right, title, and interest in and to any and all: (a) Information and inventions that are conceived, discovered, developed, or otherwise made by or on behalf of such Party or its Affiliates (including subcontractors thereof) under or in connection with this Agreement, whether or not patented or patentable, and any and all Patents and other intellectual property rights with respect thereto, except to the extent that any such Information or invention or any Patent or intellectual property rights with respect thereto, is Joint Know-How or Joint Patents, and (b) other Information, inventions, Patents, and other intellectual property rights that are owned or otherwise Controlled (other than pursuant to the license grants set forth in Sections 5.1 and 5.2) by such Party or its Affiliates. + +7.1.2 Ownership of Joint Patents and Joint Know-How. Subject to Section 3.8.2(c), as between the Parties, each Party, or their respective Affiliates, shall own an equal, undivided interest in and to any and all (a) Information and inventions that are conceived, discovered, developed or otherwise made jointly by or on behalf of Harpoon or its Affiliates (including subcontractors thereof), on the one hand, and AbbVie or its Affiliates (including subcontractors thereof), on the other hand, in connection with the work conducted under or in connection with this Agreement, in each case whether or not patented or patentable (the "Joint Know-How"), and (b) Patents (the "Joint Patents") and other intellectual property rights with respect to the Information and inventions described in subclause (a) (together with Joint Know-How and Joint Patents, the "Joint Intellectual Property Rights"). Each Party shall promptly disclose to the other Party in writing, and shall cause its Affiliates, licensees and sublicensees to so disclose, the development, making, conception or reduction to practice of any Joint Know-How or Joint Patents. Subject to the licenses and rights of reference granted under Sections 5.1 and 5.2 and, in the case of Harpoon, its exclusivity obligations hereunder, each Party shall have the right to Exploit the Joint Intellectual Property Rights without a duty of seeking consent from or accounting to the other Party. Notwithstanding the foregoing, with respect to (1) any [***], and (2) any [***]. + +7.1.3 United States Law. The determination of whether Information and inventions are conceived, discovered, developed, or otherwise made by a Party for the purpose of allocating proprietary rights (including Patent, copyright or other intellectual property rights) therein, shall, for purposes of this Agreement, be made in accordance with Applicable Law in the United States. + +- 42 - + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +7.1.4 Assignments. + +(a) Each Party shall cause all Persons who perform activities for such Party under this Agreement to prospectively or be under an obligation to assign (or, if Applicable Law does not permit such Person to agree to such assignment obligation despite such Party's using commercially reasonable efforts to negotiate such assignment obligation, provide a license under) all of their rights in any Information and inventions resulting therefrom to such Party, except where Applicable Law requires otherwise and except in the case of governmental, not-for-profit and public institutions which have standard policies against such an assignment (in which case a suitable license, or right to obtain such a license, shall be obtained). + +(b) Each Party will promptly disclose to the other Party in writing, the conception, discovery, development or making of any Joint Know-How or Joint Patents by Persons who perform activities for it under this Agreement. Each Party will execute and record assignments and other necessary documents consistent with such ownership promptly upon request. + +7.2 Maintenance and Prosecution of Patents. + +7.2.1 Patent Prosecution and Maintenance of Harpoon Patents and Joint Patents. + +(a) Subject to Section 7.2.1(b), Harpoon shall have the right, but not the obligation, through the use of internal or outside counsel to prepare, file, prosecute, and maintain the Harpoon Patents and Joint Patents worldwide, at Harpoon's sole cost and expense. Where a Harpoon Patent or Joint Patent [***]. Harpoon shall [***] with regard to the preparation, filing, prosecution, and maintenance of such Harpoon Patents or Joint Patents, including by providing AbbVie with a copy of material communications to and from any patent authority in the Territory regarding such Harpoon Patents or Joint Patents, and by providing AbbVie drafts of any material filings or responses to be made to such patent authorities in the Territory sufficiently in advance of submitting such filings or responses so as to allow for a reasonable opportunity for AbbVie to review and comment thereon. Harpoon shall consider in good faith the requests and suggestions of AbbVie with respect to such drafts and with respect to strategies for filing and prosecuting such Harpoon Patents or Joint Patents in the Territory. Notwithstanding the foregoing, Harpoon shall promptly inform AbbVie of any adversarial patent office proceeding or sua sponte filing, including a request for, or filing or declaration of, any interference, opposition, or re-examination relating to a Harpoon Patent or Joint Patent in the Territory. The Parties shall thereafter consult and cooperate to determine a course of action with respect to any such proceeding in the Territory and Harpoon shall consider in good faith all comments, requests and suggestions provided by AbbVie. [***] If Harpoon decides not to prepare, file, prosecute, or maintain a Harpoon Patent or Joint Patent in a country or other jurisdiction in the Territory, Harpoon shall provide reasonable prior written notice to AbbVie of such intention (which notice shall, in any event, be given no later than [***] prior to the next deadline for any action that may be taken with respect to such Harpoon Patent or Joint Patent in such country or other jurisdiction), AbbVie shall thereupon have the option, in its sole discretion, to assume the control and direction of the preparation, filing, prosecution, and maintenance of such Harpoon Patent or Joint Patent at its expense in such country or other jurisdiction. Upon AbbVie's written acceptance of such option, AbbVie shall assume the responsibility and control for the preparation, filing, prosecution, and maintenance of such Harpoon Patent or Joint Patent. In such event, Harpoon shall reasonably cooperate with AbbVie in such country or other jurisdiction as provided under Section 7.2.3. + +(b) On and after the License Option Exercise Closing Date with respect to a Licensed Compound or Licensed Product, AbbVie shall have the responsibility for and control over the + +- 43 - + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +preparation, filing, prosecution, and maintenance of all Harpoon Patents that [***]("Product-Specific Patents") and Joint Patents, at AbbVie's sole cost and expense. For clarity, Product-Specific Patents shall not include [***], including any Patent that [***] as long as such Harpoon Patent does not include any claim [***]. AbbVie shall keep Harpoon fully informed of all material steps with regard to the preparation, filing, prosecution, and maintenance of Product-Specific Patents or Joint Patents. If AbbVie decides not to prepare, file, prosecute, or maintain a Product-Specific Patent or Joint Patent in a country or other jurisdiction in the Territory, AbbVie shall provide reasonable prior written notice to Harpoon of such intention (which notice shall, in any event, be given no later than [***] prior to the next deadline for any action that may be taken with respect to such Product-Specific Patent or Joint Patent in such country or other jurisdiction), and Harpoon shall thereupon have the option, in its sole discretion, to assume the control and direction of the preparation, filing, prosecution, and maintenance of such Product-Specific Patent or Joint Patent at its sole cost and expense in such country or other jurisdiction. Upon Harpoon's written acceptance of such option, Harpoon shall assume the responsibility and control for the preparation, filing, prosecution, and maintenance of such specific Product-Specific Patent or Joint Patent. In such event, AbbVie shall reasonably cooperate with Harpoon in such country or other jurisdiction as provided under Section 7.2.3. + +7.2.2 Patent Prosecution and Maintenance of AbbVie Patents. AbbVie shall have the right, but not the obligation, to prepare, file, prosecute, and maintain the AbbVie Patents worldwide, at AbbVie's sole cost and expense. + +7.2.3 Cooperation. The Parties agree to cooperate fully in the preparation, filing, prosecution, and maintenance of the Harpoon Patents and Joint Patents in the Territory under this Agreement. Cooperation shall include: + +(a) without limiting any other rights and obligations of the Parties under this Agreement, cooperating with respect to the timing, scope and filing of such Patents to preserve and enhance the patent protection for Licensed Compounds and Licensed Products, including the manufacture and use thereof; + +(b) executing all papers and instruments, or requiring its employees or contractors to execute such papers and instruments, so as to (i) effectuate the ownership of intellectual property set forth in Section 7.1.1 and 7.1.2; (ii) enable the other Party to apply for and to prosecute Patent applications in the Territory; and (iii) obtain and maintain any Patent extensions, supplementary protection certificates, and the like with respect to the Harpoon Patents and Joint Patents in the Territory, in each case ((i), (ii), and (iii)) to the extent provided for in this Agreement; + +(c) consistent with this Agreement, assisting in any license registration processes with applicable governmental authorities that may be available in the Territory for the protection of a Party's interests in this Agreement; and + +(d) promptly informing the other Party of any matters coming to such Party's attention that may materially affect the preparation, filing, prosecution, or maintenance of any such Patents in the Territory. + +7.2.4 Patent Term Extension and Supplementary Protection Certificate. AbbVie shall be responsible for making decisions regarding patent term extensions, including supplementary protection certificates and any other extensions that are now or become available in the future, wherever applicable, for AbbVie Patents, Joint Patents and Product- Specific Patents in any country or other jurisdiction + +- 44 - + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +and for applying for any extension (including patent term extension and supplementary protection certificate) with respect to such Patents in the Territory. Harpoon shall provide prompt and reasonable assistance, as requested by AbbVie, including by taking such action as patent holder as is required under any Applicable Law to obtain such extension. AbbVie shall pay all expenses in regard to obtaining such extension in the Territory. + +7.2.5 European Patents. On or after the License Option Exercise Closing Date, AbbVie shall have the sole right to decide whether a Joint Patent or a Product-Specific Patent should be validated or maintained as a Unitary Patent, whether and when such Patent should be opted out of or opted in to the jurisdiction of the Unified Patent Court (UPC) (including withdrawal of an opt-out), as well as any other issues concerning the jurisdiction of the UPC in connection with such Patent. Harpoon shall, at AbbVie's cost and expense, cooperate with AbbVie and provide to AbbVie and submit to authorities all necessary documents to effect such decision. + +7.2.6 Patent Listings. With respect to each Licensed Product, AbbVie will have the sole right to list Joint Patents and Product-Specific Patents with Regulatory Authorities or other agencies, including as required or allowed under Applicable Law. AbbVie shall notify Harpoon in writing of any Harpoon Patents that it intends to list with Regulatory Authorities related to the Licensed Products and, prior to filing any such listing, consult with and consider in good faith the requests and suggestions of Harpoon regarding the same. + +7.3 Enforcement of Patents. + +7.3.1 Enforcement of Harpoon Patents. Each Party shall promptly notify the other Party in writing of any alleged or threatened infringement of the Product-Specific Patents by a Third Party in the Territory of which such Party becomes aware based on the development, commercialization or Exploitation of, or an application to market, a Licensed Product or a product containing a Licensed Compound in the Territory (the "Product Infringement"). AbbVie shall have the sole right, but not the obligation, to prosecute any Product Infringement involving any claims of Product-Specific Patents at its sole expense and AbbVie shall retain control of the prosecution of such claim, suit or proceeding. Harpoon shall have the right to join as a party to such claim, suit, or proceeding in the Territory and participate with its own counsel at its own expense; provided that AbbVie shall retain control of the prosecution of such claim, suit, or proceeding. During any such claim, suit, or proceeding, AbbVie shall keep Harpoon reasonably informed of all material developments in connection with such claim, suit or proceeding. If AbbVie does not take commercially reasonable steps to prosecute (including settling) such a Product Infringement in a country or jurisdiction, then (a) Harpoon may, but is not obligated to, prosecute the Product Infringement at its own expense in such country or jurisdiction, and (b) if Harpoon prosecutes such Product Infringement and obtains an injunction that prevents the sale of a Biosimilar Product by such Third Party in such country or jurisdiction, AbbVie shall not be entitled to apply any royalty reductions pursuant to Section 6.5.3(a) that would otherwise apply as a result of the sale of such Biosimilar Product by such Third Party after the period of such injunction. + +7.3.2 Enforcement of AbbVie Patents and Joint Patents. + +(a) Each Party shall promptly notify the other Party in writing of any alleged or threatened infringement of the Harpoon Patents that are not Product-Specific Patents, AbbVie Patents or Joint Patents by a Third Party in the Territory of which such Party becomes aware based on the development, commercialization, Exploitation, or an application to market a Licensed Product or a product containing a Licensed Compound in the Territory. + +(b) Subject to Sections 7.3.3 and 7.3.4, Harpoon shall have the first right, but not the obligation, to prosecute any such alleged or threatened infringement of Harpoon Patents that are not Product-Specific Patents in the Territory at its sole expense and Harpoon shall retain control of the + +- 45 - + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +prosecution of such claim, suit or proceeding. If Harpoon prosecutes any such infringement, AbbVie shall have the right to join as a party to such claim, suit or proceeding in the Territory and participate with its own counsel at its own expense; provided that Harpoon shall retain control of the prosecution of such claim, suit or proceeding. During any such claim, suit, or proceeding, Harpoon shall keep AbbVie reasonably informed of all material developments in connection with such claim, suit or proceeding. If Harpoon does not take commercially reasonable steps to prosecute the alleged or threatened infringement in the Territory with respect to such Harpoon Patents, then solely following the License Option Exercise Closing Date, AbbVie may prosecute such infringement in the Territory at its own expense, unless Harpoon reasonably believes that the prosecution of such infringement by AbbVie would have a material adverse impact on Harpoon's global patent portfolio, or upon the use or application of such Harpoon Patents in connection with other products and compounds Controlled by Harpoon, its Affiliates or sublicensees. For clarity, this Section 7.3.2(b) is inapplicable to any biosimilar patent litigation relating to any Licensed Compound or Licensed Product as set forth in Sections 7.3.3 and 7.3.4. + +(c) AbbVie shall have the sole right, but not the obligation, to prosecute any such infringement of the AbbVie Patents in the Territory at its sole expense and AbbVie shall retain control of the prosecution of such claim, suit or proceeding. + +(d) AbbVie shall have the first right, but not the obligation, to prosecute any such infringement of Joint Patents in the Territory at its sole expense and AbbVie shall retain control of the prosecution of such claim, suit or proceeding. If AbbVie prosecutes any such infringement, Harpoon shall have the right to join as a party to such claim, suit or proceeding in the Territory and participate with its own counsel at its own expense; provided that AbbVie shall retain control of the prosecution of such claim, suit or proceeding. During any such claim, suit, or proceeding, AbbVie shall keep Harpoon reasonably informed of all material developments in connection with such claim, suit or proceeding. If AbbVie does not take commercially reasonable steps to prosecute the alleged or threatened infringement in the Territory with respect to such Joint Patents, then Harpoon may prosecute such infringement in the Territory at its own expense. + +7.3.3 Patent Exclusivity Listings. If either Party receives a copy of an application submitted to the FDA under subsection (k) of Section 351 of the PHSA (a "Biosimilar Application") naming a Licensed Product as a reference product or otherwise becomes aware that such a Biosimilar Application has been filed (such as in an instance described in Section 351(l)(9)(C) of the PHSA), such Party shall, within [***], notify the other Party so that the other Party may seek permission to view the application and related confidential information from the filer of the Biosimilar Application under Section 351(l)(1)(B)(iii) of the PHSA. If either Party receives any equivalent or similar certification or notice in any other jurisdiction in the Territory, either Party shall, within [***], notify and provide the other Party with copies of such communication. Regardless of the Party that is the "reference product sponsor" for purposes of such Biosimilar Application, (a) [***]; (b) AbbVie shall have the right to list any AbbVie Patents, Joint Patents, Product-Specific Patents, and, upon the written consent of Harpoon, such consent not to be unreasonably withheld, conditioned or delayed (taking into account, without limitation, the potential impact of such consent on Harpoon's platform technology and/or other products undergoing development or commercialization by Harpoon or its Third Party licensees and covered by such Harpoon Patents), other Harpoon Patents, insofar as they cover the Biosimilar Product as required pursuant to Section 351(l) (3)(A), Section 351(l)(5)(b)(i)(II), or Section 351(l)(7) of the PHSA, to respond to any communications with respect to such lists from the filer of the Biosimilar Application, and to negotiate with the filer of the Biosimilar Application as to whether to utilize a different mechanism for information exchange than that specified in Section 351(l) of the PHSA; and (c) [***] shall have the sole right to identify such Patents or respond to communications under any equivalent or similar listing in any other jurisdiction in the Territory. If required pursuant to Applicable Law, [***] shall prepare such lists and make such responses at [***] Harpoon shall cooperate with AbbVie's reasonable requests in connection therewith, including meeting any submission deadlines, in each case, to the extent required or permitted by Applicable Law. AbbVie shall (A) reasonably consult with [***] + +- 46 - + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +[***] to a Third Party as contemplated by this Section 7.3.3, and shall consider in good faith Harpoon's advice, requests and suggestions with respect thereto, and (B) notify Harpoon of any such lists or communications promptly after they are made. + +7.3.4 Conduct of Biosimilar Patent Litigation Including Under the Biologics Price Competition and Innovation Act. Notwithstanding anything to the contrary in this Section 7.3, AbbVie shall be responsible for initiating and managing any biosimilar litigation relating to Licensed Compounds or Licensed Products worldwide. AbbVie shall have the first right to bring an action for infringement of the AbbVie Patents, Joint Patents, Product-Specific Patents and, upon the written consent of Harpoon, such consent not to be unreasonably withheld, conditioned or delayed (taking into account, without limitation, the potential impact of such consent on Harpoon's platform technology and/or other products undergoing development or commercialization by Harpoon or its Third Party licensees and covered by such Harpoon Patents), other Harpoon Patents, including as required under Section 351(l)(6) of the PHSA following the agreement on a list of patents for litigation under Section 351(l)(4) or exchange of Patent lists pursuant to Section 351(l)(5)(B) of such act, or as required following any equivalent or similar certification or notice in any other jurisdiction. If Harpoon decides pursuant to this Agreement not to allow AbbVie to include such other Harpoon Patents in a litigation against a biosimilar applicant for a biosimilar product, Harpoon shall not assert such Patent in any litigation against the same biosimilar applicant for the same biosimilar product without written approval by AbbVie. The Parties' rights and obligations with respect to the foregoing legal actions shall be as set forth in Sections 7.3.1 through 7.3.5; provided that within [***] of reaching agreement on a list of Patents for litigation under Section 351(l)(4) or exchange of Patent lists pursuant to Section 351(l) (5)(B), AbbVie shall notify Harpoon as to whether or not it elects to prosecute such infringement. Either Party shall, within [***], notify and provide the other Party with copies of any notice of commercial marketing provided by the filer of a Biosimilar Application pursuant to Section 351(l)(8)(A) of the PHSA, or any equivalent or similar certification or notice in any other jurisdiction. Thereafter, AbbVie shall have the first right to seek an injunction or other remedies against such commercial marketing as permitted pursuant to Section 351(l)(8)(B) of the PHSA. + +7.3.5 Cooperation. The Parties agree to cooperate fully in any infringement action pursuant to this Section 7.3. Where a Party brings such an action in accordance with this Agreement, the other Party shall, where necessary, furnish a power of attorney solely for such purpose or shall join in, or be named as a necessary party to, such action. Unless otherwise set forth herein, the Party entitled to bring any patent infringement litigation in accordance with this Section 7.3 shall have the right to settle such claim; provided that neither Party shall have the right to settle any patent infringement litigation under this Section 7.3 in a manner that imposes any costs or liability on, or involves any admission by, the other Party, without the express written consent of such other Party. The Party commencing the litigation shall provide the other Party with copies of all pleadings and other documents filed with the court if doing so would not waive any privilege or violate any court order or Applicable Law, and shall consider reasonable input from the other Party during the course of the proceedings. + +7.3.6 Recovery. Any recovery realized as a result of such litigation described in Section 7.3.1, 7.3.2, or 7.3.5 (whether by way of settlement or otherwise) shall be first, allocated to reimburse the Parties for their costs and expenses in making such recovery (which amounts shall be allocated pro rata if insufficient to cover the totality of such expenses). [***] + +7.4 Infringement Claims by Third Parties. If the manufacture, sale, or use of a Licensed Compound or Licensed Product in the Territory pursuant to this Agreement results in, or may result + +- 47 - + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +in, any claim, suit, or proceeding by a Third Party alleging patent infringement by AbbVie (or its Affiliates or Sublicensees), AbbVie shall promptly notify Harpoon thereof in writing. Subject to Section 11.2, AbbVie shall have the first right, but not the obligation, to defend and control the defense of any such claim, suit, or proceeding at its own expense, using counsel of its own choice. Harpoon may participate in any such claim, suit, or proceeding with counsel of its choice at its own expense. The assumption of the defense of a claim that may be subject to Section 11.2 by either AbbVie or Harpoon shall not be construed as an acknowledgment that Harpoon is liable to indemnify any AbbVie Indemnitee in respect of such indemnity claim, nor shall it constitute a waiver by Harpoon of any defenses it may assert against an AbbVie Indemnitee's claim for indemnification. Without limitation of the foregoing, if AbbVie finds it necessary or desirable to join Harpoon as a party to any such action, Harpoon shall, at AbbVie's expense, execute all papers and perform such acts as shall be reasonably required. If AbbVie elects (in a written communication submitted to Harpoon within a reasonable amount of time after notice of the alleged patent infringement) not to defend or control the defense of, or otherwise fails to initiate and maintain the defense of, any such claim, suit, or proceeding, within such time periods so that Harpoon is not prejudiced by any delays, Harpoon may conduct and control the defense of any such claim, suit, or proceeding at its own expense. Each Party shall keep the other Party reasonably informed of all material developments in connection with any such claim, suit, or proceeding. [***] under this Section 7.4 shall be [***] + +7.5 Invalidity or Unenforceability Defenses or Actions. + +7.5.1 Notice. Each Party shall promptly notify the other Party in writing of any alleged or threatened assertion of invalidity, unpatentability or unenforceability of any of the Harpoon Patents, AbbVie Patents, or Joint Patents by a Third Party, in each case in the Territory and of which such Party becomes aware. + +7.5.2 Harpoon Patents. + +(a) Subject to Section 7.5.2(b), Harpoon shall have the first right, but not the obligation, to defend and control the defense of the validity, patentability and enforceability of the Harpoon Patents at its own expense in the Territory. AbbVie may participate in any such claim, suit, or proceeding in the Territory with counsel of its choice at its own expense; provided that Harpoon shall retain control of the defense in such claim, suit, or proceeding. If Harpoon elects not to defend or control the defense of such Harpoon Patents in a suit brought in the Territory, or otherwise fails to initiate and maintain the defense of any such claim, suit, or proceeding, then solely with respect to Product-Specific Patents included in the Harpoon Patents, and subject to Section 7.5.2(b), AbbVie may request to conduct and control the defense of any such claim, suit, or proceeding at its own expense, with Harpoon's consent not to be unreasonably withheld, conditioned or delayed. + +(b) On and after the License Option Exercise Closing Date, AbbVie shall have the responsibility for and control over the defense of the validity, patentability and enforceability of Product-Specific Patents at AbbVie's sole cost and expense. Harpoon may participate in any such claim, suit, or proceeding in the Territory with counsel of its choice at its own expense; provided that AbbVie shall retain control of the defense in such claim, suit, or proceeding. If AbbVie elects not to defend or control the defense of such Product-Specific Patents in a suit brought in the Territory, or otherwise fails to initiate and maintain + +- 48 - + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +the defense of any such claim, suit, or proceeding, then Harpoon may conduct and control the defense of any such claim, suit, or proceeding at its own expense. + +7.5.3 AbbVie Patents and Joint Patents. + +(a) AbbVie shall have the sole right, but not the obligation, to defend and control the defense of the validity and enforceability of the AbbVie Patents at its own expense in the Territory. + +(b) The Party who is prosecuting the Joint Patents at the relevant time shall have the first right, but not the obligation, to defend and control the defense of the validity and enforceability of the Joint Patents at its own expense in the Territory. The other Party may participate in any such claim, suit, or proceeding in the Territory related to the Joint Patents with counsel of its choice at its own expense; provided that the Party who is prosecuting the Joint Patents at the relevant time shall retain control of the defense in such claim, suit, or proceeding. If the Party who is prosecuting the Joint Patents at the relevant time elects not to defend or control the defense of the Joint Patents in a suit brought in the Territory, or otherwise fails to initiate and maintain the defense of any such claim, suit, or proceeding, then the other Party may conduct and control the defense of any such claim, suit, or proceeding, at its own expense. + +7.5.4 Cooperation. Each Party shall assist and cooperate with the other Party as such other Party may reasonably request from time to time in connection with its activities set forth in this Section 7.5, including by being joined as a party plaintiff in such action or proceeding, providing access to relevant documents and other evidence, and making its employees available at reasonable business hours. In connection with any such defense or claim or counterclaim, the controlling Party shall consider in good faith any comments from the other Party and shall keep the other Party reasonably informed of any steps taken, and shall provide copies of all documents filed, in connection with such defense, claim, or counterclaim provided that doing so would not waive any privilege or violate any court order or Applicable Law. In connection with the activities set forth in this Section 7.5, each Party shall consult with the other as to the strategy for the defense of the Harpoon Patents and Joint Patents. Neither Party shall have the right to settle any claim, suit, or proceeding under this Section 7.5 in a manner that imposes any costs or liability on, or involves any admission by, the other Party, without the express written consent of such other Party. + +7.5.5 Relationship to Enforcement of Patents. Notwithstanding anything herein to the contrary, the defense to any challenge of validity, enforceability or patentability of any of the Harpoon Patents, AbbVie Patents, or Joint Patents that is raised in connection with or in response to an infringement action or a biosimilar litigation shall be controlled by the Party who controls that infringement action or biosimilar litigation, and such Party shall have the right to manage, resolve, settle or dispose any such challenge according to Section 7.3, provided that (a) with respect to any Harpoon Patents that are not Product- Specific Patents and are not involved in any biosimilar patent litigation, where AbbVie is the controlling Party in connection with an infringement action, AbbVie shall not resolve, settle or dispose of such action or litigation in any way that would admit liability on the part of Harpoon, or materially impact the validity, scope or enforceability of such Harpoon Patent, without Harpoon's prior written consent, not to be unreasonably withheld or delayed, and (b) with respect to any Harpoon Patents for which Harpoon did not give its consent to include within a biosimilar litigation, and Harpoon is the controlling Party in connection with an infringement action involving such Patents, then Harpoon shall be the controlling Party in connection with the defense to any challenge of validity, enforceability or patentability of such Harpoon Patents, but shall reasonably consult with AbbVie in connection with any such defense, and shall consider in good faith AbbVie's reasonable comments in relation thereto. + +7.6 Product Trademarks. As between the Parties, AbbVie shall own all right, title, and interest to the Product Trademarks in the Territory, and shall be responsible for the registration, prosecution, maintenance and enforcement thereof. All costs and expenses of registering, prosecuting, maintaining and enforcing the Product Trademarks shall be borne solely by AbbVie. Harpoon shall provide all assistance and + +- 49 - + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +documents reasonably requested by AbbVie in support of its prosecution, registration, maintenance and enforcement of the Product Trademarks. + +7.7 International Nonproprietary Name. As between the Parties, AbbVie shall have the sole right and responsibility to select the International Nonproprietary Name or other name or identifier for any Licensed Compound or Licensed Product. AbbVie shall have the sole right and responsibility to apply for submission to the World Health Organization for the International Nonproprietary Name, and submission to the United States Adopted Names Council for the United States Adopted Name. + +7.8 Inventor's Remuneration. Each Party shall be solely responsible for any remuneration that may be due such Party's inventors under any applicable inventor remuneration laws. + +7.9 Common Interest. All information exchanged between the Parties regarding the prosecution, maintenance, enforcement and defense of Patents under this Article 7 will be deemed to be Confidential Information of the disclosing Party. In addition, the Parties acknowledge and agree that, with regard to such prosecution, maintenance, enforcement and defense, the interests of the Parties as collaborators and Harpoon and licensee are to, for their mutual benefit, obtain patent protection and plan patent defense against potential infringement activities by Third Parties, and as such, are aligned and are legal in nature. The Parties agree and acknowledge that they have not waived, and nothing in this Agreement constitutes a waiver of, any legal privilege concerning Patents under this Article 7, including privilege under the common interest doctrine and similar or related doctrines. Notwithstanding anything to the contrary in this Agreement, to the extent a Party has a good faith belief that any information required to be disclosed by such Party to the other Party under this Article 7 is protected by attorney-client privilege or any other applicable legal privilege or immunity, such Party shall not be required to disclose such information and the Parties shall in good faith cooperate to agree upon a procedure (which may include entering into a specific common interest agreement, disclosing such information on a "for counsel eyes only" basis or similar procedure) under which such information may be disclosed without waiving or breaching such privilege or immunity. + +ARTICLE 8 PHARMACOVIGILANCE AND SAFETY + +8.1 Pharmacovigilance. Within [***] after the License Option Exercise Closing Date, the Parties shall enter into an agreement to initiate a process for the exchange of adverse event safety data in a mutually agreed format, including postmarketing spontaneous reports received by the Party or its Affiliates in order to (a) with respect to AbbVie, monitor the safety of the Licensed Compound or Licensed Product and to meet reporting requirements with any applicable Regulatory Authority and (b) with respect to Harpoon, permit reasonable access to adverse event safety data for Licensed Compounds or Licensed Products, in each case ((a) and (b)) at AbbVie's expense. Notwithstanding the forgoing, if any adverse event safety data is received or otherwise generated by Harpoon following the License Option Exercise Closing Date and prior to the execution of such agreement, Harpoon shall, within [***] of receiving or otherwise generating such data, provide such data to AbbVie by email to: [***]. + +8.2 Global Safety Database. Harpoon shall initially set up, hold and maintain (at its sole cost and expense) the global safety database for Licensed Compounds and Licensed Products with respect to safety data obtained in connection with the Initial Development Activities. Within [***] after the License Option Exercise Closing Date, Harpoon shall transfer to AbbVie, in an electronic format reasonably satisfactory to AbbVie, the complete contents of the safety database maintained by Harpoon pursuant to the immediately foregoing sentence, and thereafter AbbVie shall set up, hold, and maintain (at AbbVie's sole cost and expense) the global safety database for Licensed Compounds or Licensed Products. Harpoon shall provide AbbVie with all information necessary or desirable for AbbVie to comply with its pharmacovigilance responsibilities in the Territory, including, as applicable, any adverse drug experiences, from pre-clinical or clinical laboratory, animal toxicology and pharmacology studies, Clinical Studies, and commercial experiences + +- 50 - + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +with a Licensed Compound or Licensed Product, in each case in any form agreed upon between AbbVie and Harpoon at the time of the request. + +ARTICLE 9 CONFIDENTIALITY AND NON-DISCLOSURE + +9.1 Product Information. Harpoon recognizes that by reason of AbbVie's status as an exclusive optionee pursuant to the grants under Section 3.2.3, AbbVie has an interest in Harpoon maintaining the confidentiality of certain information of Harpoon. Accordingly, following the License Option Exercise Closing Date and for the remainder of the Term, Harpoon shall, and shall cause its Affiliates and its and their respective officers, directors, employees, and agents to, keep confidential, and not publish or otherwise disclose, and not use directly or indirectly for any purpose other than to fulfill Harpoon's obligations hereunder any Information owned or otherwise Controlled by Harpoon or any of its Affiliates specifically relating to any Licensed Compound or Licensed Product, or the Exploitation of any of the foregoing (the "Product Information"); except to the extent (a) the Product Information is in the public domain through no fault of Harpoon, its Affiliates or any of its or their respective officers, directors, employees, or agents; (b) such disclosure or use is expressly permitted under Section 9.3, or (c) such disclosure or use is otherwise expressly permitted by the terms of this Agreement. Product Information shall not include [***]. For purposes of Section 9.3, effective as of License Option Exercise Closing Date and for the remainder of the Term, AbbVie shall be deemed to be the disclosing Party with respect to Product Information under Section 9.3 and Harpoon shall be deemed to be the receiving Party with respect thereto. For further clarification, (i) without limiting this Section 9.1, to the extent Product Information is disclosed by Harpoon to AbbVie pursuant to this Agreement, such information shall, subject to the other terms and conditions of this Article 9, also constitute Confidential Information of Harpoon with respect to the use and disclosure of such Information by AbbVie, but (ii) the disclosure by Harpoon to AbbVie of Product Information shall not cause such information to cease to be subject to the provisions of this Section 9.1 with respect to the use and disclosure of such Confidential Information by Harpoon. [***]. + +9.2 Confidentiality Obligations. At all times during the Term and for a period of [***] following termination or expiration hereof in its entirety, each Party shall, and shall cause its officers, directors, employees and agents to, keep confidential and not publish or otherwise disclose to a Third Party and not use, directly or indirectly, for any purpose, any Confidential Information furnished or otherwise made known to it, directly or indirectly, by the other Party, except to the extent such disclosure or use is expressly permitted by the terms of this Agreement or is necessary or reasonably useful for the performance of, or the exercise of such Party's rights under, this Agreement. Notwithstanding the foregoing, to the extent the receiving Party can demonstrate by documentation or other competent proof, the confidentiality and non-use obligations under this Section 9.2 with respect to any Confidential Information shall not include any information that: + +9.2.1 has been published by a Third Party or otherwise is or hereafter becomes part of the public domain by public use, publication, general knowledge or the like through no wrongful act, fault or negligence on the part of the receiving Party; + +- 51 - + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +9.2.2 has been in the receiving Party's possession prior to disclosure by the disclosing Party without any obligation of confidentiality with respect to such information; provided that the foregoing exception shall not apply with respect to Regulatory Documentation (excluding clinical protocols) or Joint Know-How; + +9.2.3 is subsequently received by the receiving Party from a Third Party without restriction and without breach of any agreement between such Third Party and the disclosing Party; + +9.2.4 is generally made available to Third Parties by the disclosing Party without restriction on disclosure; or + +9.2.5 has been independently developed by or for the receiving Party without reference to, or use or disclosure of, the disclosing Party's Confidential Information; provided that the foregoing exception shall not apply with respect to Regulatory Documentation (excluding clinical protocols) or Joint Know-How. + +Specific aspects or details of Confidential Information shall not be deemed to be within the public domain or in the possession of the receiving Party merely because the Confidential Information is embraced by more general information in the public domain or in the possession of the receiving Party. Further, any combination of Confidential Information shall not be considered in the public domain or in the possession of the receiving Party merely because individual elements of such Confidential Information are in the public domain or in the possession of the receiving Party unless the combination and its principles are in the public domain or in the possession of the receiving Party. + +9.3 Permitted Disclosures. Each Party may disclose Confidential Information to the extent that such disclosure is: + +9.3.1 in the reasonable opinion of the receiving Party's legal counsel, required to be disclosed pursuant to law, regulation or a valid order of a court of competent jurisdiction or other supra-national, federal, national, regional, state, provincial or local governmental body of competent jurisdiction, (including by reason of filing with securities regulators, but subject to Section 9.5); provided that the receiving Party shall first have given prompt written notice (and to the extent possible, at least [***] notice) to the disclosing Party and given the disclosing Party a reasonable opportunity to take whatever action it deems necessary to protect its Confidential Information. In the event that no protective order or other remedy is obtained, or the disclosing Party waives compliance with the terms of this Agreement, the receiving Party shall furnish only that portion of Confidential Information which the receiving Party is advised by counsel is legally required to be disclosed; + +9.3.2 made by or on behalf of the receiving Party to the Regulatory Authorities as required in connection with any filing, application or request for Regulatory Approval of a Licensed Product in accordance with the terms of this Agreement; provided that reasonable measures shall be taken to assure confidential treatment of such Confidential Information to the extent practicable and consistent with Applicable Law; + +9.3.3 made by or on behalf of the receiving Party to a patent authority as may be necessary or reasonably useful for purposes of preparing, obtaining, defending or enforcing a Patent in accordance with the terms of this Agreement; provided that reasonable measures shall be taken to assure confidential treatment of such Confidential Information, to the extent such protection is available; + +9.3.4 made to its or its Affiliates' financial and legal advisors who have a need to know such disclosing Party's Confidential Information and are either under professional codes of conduct giving rise to expectations of confidentiality and non-use or under written agreements of confidentiality and + +- 52 - + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +non-use, in each case, at least as restrictive as those set forth in this Agreement; provided that the receiving Party shall remain responsible for any failure by such financial and legal advisors, to treat such Confidential Information as required under this Article; + +9.3.5 made by the receiving Party or its Affiliates to potential or actual investors or acquirers as may be necessary in connection with their evaluation of such potential or actual investment or acquisition; provided that such Persons shall be subject to obligations of confidentiality and non-use with respect to such Confidential Information substantially similar to the obligations of confidentiality and non-use of the receiving Party pursuant to this Article 9; + +9.3.6 made by AbbVie or its Affiliates or Sublicensees to its or their advisors, consultants, clinicians, vendors, service providers, contractors, existing or prospective collaboration partners, licensees, sublicensees, or other Third Parties as may be necessary or useful in connection with the Exploitation of the Licensed Compound, the Licensed Products, or otherwise in connection with the performance of its obligations or exercise of its rights as contemplated by this Agreement; provided that such Persons shall be subject to obligations of confidentiality and non-use with respect to such Confidential Information substantially similar to the obligations of confidentiality and non-use of AbbVie pursuant to this Article 9; or + +9.3.7 made by Harpoon or its Affiliates after receiving advanced approval from AbbVie, to its or their advisors, consultants, clinicians, vendors, service providers, contractors, or other Third Parties as may be necessary or useful in connection with the performance of their obligations or exercise of their rights as contemplated by this Agreement; provided that such Persons shall be subject to obligations of confidentiality and non-use with respect to such Confidential Information of AbbVie substantially similar to the obligations of confidentiality and non-use of Harpoon pursuant to this Article 9; provided, further, that the advanced approval requirement set forth in this Section 9.3.7 shall not apply to Third Party Providers approved by AbbVie pursuant to Section 3.7. + +9.4 Use of Name. Except as expressly provided herein, neither Party shall mention or otherwise use the name, logo, or Trademark of the other Party or any of its Affiliates (or any abbreviation or adaptation thereof) in any publication, press release, marketing and promotional material, or other form of publicity without the prior written approval of such other Party in each instance. The restrictions imposed by this Section 9.4 shall not prohibit either Party from making any disclosure identifying the other Party that, in the opinion of the disclosing Party's counsel, is required by Applicable Law; provided that such Party shall submit the proposed disclosure identifying the other Party in writing to the other Party as far in advance as reasonably practicable (and in no event less than [***] prior to the anticipated date of disclosure) so as to provide a reasonable opportunity to comment thereon. + +9.5 Public Announcements. Neither Party shall issue any other public announcement, press release, or other public disclosure regarding this Agreement or its subject matter without the other Party's prior written consent, except for any such disclosure that is, in the opinion of the disclosing Party's counsel, required by Applicable Law or the rules of a stock exchange on which the securities of the disclosing Party are listed (or to which an application for listing has been submitted). Notwithstanding the foregoing, Harpoon shall be free to issue any public announcement, press release, or other public disclosure related to (a) [***], (b) [***], (c) [***], and (d) any publication, presentation or disclosure that was permitted under Section 9.6, provided that any such disclosure under (a) through (d) does not contain any Confidential Information of AbbVie. In the event a Party is, in the opinion of its counsel, required by Applicable Law or + +- 53 - + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +the rules of a stock exchange on which its securities are listed (or to which an application for listing has been submitted) to make such a public disclosure, such Party shall submit the proposed disclosure in writing to the other Party as far in advance as reasonably practicable (and to the extent possible, at least [***] prior to the anticipated date of disclosure) so as to provide a reasonable opportunity to comment thereon. Notwithstanding the foregoing, AbbVie, its Sublicensees and its and their respective Affiliates shall have the right to publicly disclose research, development and commercial information (including with respect to regulatory matters) regarding the Licensed Compound and Licensed Products, provided that any such disclosure does not contain any Confidential Information of Harpoon. + +9.6 Publications. The Parties acknowledge that scientific publications must be monitored to prevent any adverse effect from premature publication of results of the activities contemplated hereunder. Prior to the License Option Exercise Closing Date, if Harpoon intends to publish, present (including presentation at any scientific meeting) or otherwise disclose Information related specifically to the Exploitation of the Licensed Compound or Licensed Products, Harpoon shall provide AbbVie with such proposed publication, presentation or disclosure at least [***] prior to the intended publication date, provided that [***]. AbbVie will have the right to reasonably review and comment to such publication, presentation or disclosure, and Harpoon shall in good faith consider any comments made by AbbVie in such [***] period. If such publication, presentation or disclosure contains Confidential Information of AbbVie, then upon AbbVie's request during such [***] period, Harpoon shall delete any such information identified by AbbVie. If there is a dispute regarding Harpoon's right to publish prior to the License Option Exercise Closing Date, such dispute shall be escalated to the Senior Officers of each Party for resolution, provided that subject to the foregoing sentence, Harpoon shall have the right to make a final decision with respect to such publication. Following the License Option Exercise Closing Date, Harpoon shall not publish, present, or otherwise disclose, and shall cause its Affiliates and Third Party Providers and its and their employees and agents not to disclose any Product Information without the prior written consent of AbbVie, except as required by Applicable Law. + +9.7 Return of Confidential Information. Upon the effective date of the termination of this Agreement for any reason, either Party may request in writing, and the other Party shall either, with respect to Confidential Information (in the event of termination of this Agreement with respect to [***] Terminated Territories but not in its entirety, solely to the extent relating specifically and exclusively to such Terminated Territories) to which such other Party does not retain rights under the surviving provisions of this Agreement: (a) as soon as reasonably practicable, destroy all copies of such Confidential Information in the possession of the other Party and confirm such destruction in writing to the requesting Party; or (b) as soon as reasonably practicable, deliver to the requesting Party, at such other Party's expense, all copies of such Confidential Information in the possession of such other Party; provided that such other Party shall be permitted to retain one (1) copy of such Confidential Information for the sole purpose of performing any continuing obligations or exercising any surviving rights hereunder, as required by Applicable Law, or for litigation or archival purposes. Notwithstanding the foregoing, such other Party also shall be permitted to retain such additional copies of or any computer records or files containing such Confidential Information that have been created solely by such Party's automatic archiving and back-up procedures, to the extent created and retained in a manner consistent with such other Party's standard archiving and back-up procedures, but not for any other use or purpose. + +9.8 Survival. All Confidential Information shall continue to be subject to the terms of this Agreement for the period set forth in Section 9.2. + +- 54 - + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +ARTICLE 10 REPRESENTATIONS AND WARRANTIES + +10.1 Mutual Representations and Warranties. Harpoon and AbbVie each represents and warrants to the other, as of the Effective Date, as follows: + +10.1.1 Organization. It is a corporation duly incorporated, validly existing, and in good standing under the laws of the jurisdiction of its incorporation, and has all requisite corporate power and authority, to execute, deliver, and perform this Agreement. + +10.1.2 Authorization. The execution and delivery of this Agreement and the performance by it of the transactions contemplated hereby have been duly authorized by all necessary corporate action, and do not violate (a) such Party's charter documents, bylaws, or other organizational documents, (b) in any material respect, any agreement, instrument, or contractual obligation to which such Party is bound, (c) any requirement of any Applicable Law, or (d) any order, writ, judgment, injunction, decree, determination, or award of any court or governmental agency presently in effect applicable to such Party. + +10.1.3 Binding Agreement. This Agreement is a legal, valid, and binding obligation of such Party enforceable against it in accordance with its terms and conditions, subject to the effects of bankruptcy, insolvency, or other laws of general application affecting the enforcement of creditor rights, judicial principles affecting the availability of specific performance, and general principles of equity (whether enforceability is considered a proceeding at law or equity). + +10.1.4 No Inconsistent Obligation. It is not under any obligation, contractual or otherwise, to any Person that conflicts with or is inconsistent in any material respect with the terms of this Agreement, or that would impede the diligent and complete fulfillment of its obligations hereunder. + +10.1.5 No Misstatements or Omissions. The representations and warranties of such Party in this Agreement, and the Information, documents and materials furnished to the other Party in response to such Party's written requests for due diligence information prior to the Effective Date, do not, taken as a whole, (a) contain any untrue statement of a material fact, or (b) omit to state any material fact necessary to make the statements or facts contained therein, in light of the circumstances under which they were made, not misleading. + +10.2 Additional Representations and Warranties of Harpoon. Except as set forth on Schedule 10.2, Harpoon further represents and warrants to AbbVie, as of the Effective Date, as follows: + +10.2.1 All Harpoon Patents existing as of the Effective Date are listed on Schedule 10.2.1 (the "Existing Patents"). To Harpoon's Knowledge, all Existing Patents existing as of the Effective Date are subsisting and, to Harpoon's Knowledge, are not invalid or unenforceable, in whole or in part, are being diligently prosecuted in the applicable patent offices in the Territory in accordance with Applicable Law, and have been filed and maintained properly and correctly in all material aspect and all applicable fees have been paid on or before the due date for payment. + +10.2.2 There are no judgments, or settlements against, or amounts with respect thereto, owed by Harpoon or any of its Affiliates relating to the Existing Patents, or the Harpoon Know-How. No claim or litigation has been brought or threatened in writing or any other form by any Person alleging, and Harpoon has no Knowledge of any claim, whether or not asserted, that the Existing Patents are invalid or unenforceable. To Harpoon's Knowledge, the Development or Commercialization of the Licensed Compounds or Licensed Products as contemplated herein, does not or will not violate, infringe, misappropriate or otherwise conflict or interfere with, any Patent or other intellectual property or proprietary right of any Third + +- 55 - + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +Party. To Harpoon's Knowledge, no Person is infringing or threatening to infringe or misappropriating or threatening to misappropriate the Existing Patents or the Harpoon Know-How. + +10.2.3 Harpoon is (a) the sole and exclusive owner of the entire right, title and interest in the Existing Patents listed on Schedule 10.2.1, Part A (the "Owned Patents") and the Harpoon Know-How and (b) the sole and exclusive licensee of the Existing Patents listed on Schedule 10.2.1, Part B (the "In-Licensed Patents") which are subject to valid and enforceable in-license agreements, in each case ((a) and (b)) free of any encumbrance, lien, or claim of ownership by any Third Party. Harpoon is entitled to grant the licenses specified herein. The Owned Patents and In-Licensed Patents represent all of the Existing Patents. + +10.2.4 Harpoon has the right to use and license (or sublicense as the case may be) to AbbVie all Information and Patents necessary to Develop, Manufacture and Commercialize the Licensed Compounds and the Licensed Products as contemplated herein. The Harpoon Patents and Harpoon Know-How are not and will not be subject to any license or other agreement to which Harpoon or any of its Affiliates is a party other than a Harpoon In-License Agreement. + +10.2.5 As of the Effective Date, none of Harpoon or its Affiliates and, to Harpoon's Knowledge, any Third Party is in material breach of any Harpoon In-License Agreement. + +10.2.6 True, complete, and correct copies of: (a) Harpoon In-License Agreements; and (b) all material adverse information with respect to the safety and efficacy of the Licensed Compounds known to Harpoon, in each case ((a) through (c)) have been provided or made available to AbbVie prior to the Effective Date. + +10.2.7 Harpoon and its Affiliates have generated, prepared, maintained, and retained all Regulatory Documentation that is required to be maintained or retained pursuant to and in accordance with Applicable Law, and all such information is in all material aspect true, complete and correct and what it purports to be. + +10.2.8 Each Person who has or has had any rights in or to any Owned Patents or any Harpoon Know-How, including any current or former officer, employee, agent or consultant of Harpoon or any of its Affiliates, has assigned and has executed an agreement assigning its entire right, title, and interest in and to such Owned Patents and Harpoon Know-How to Harpoon. To Harpoon's Knowledge, no current or former officer, employee, agent, or consultant of Harpoon or any of its Affiliates is in material violation of any term of any assignment or other agreement regarding the protection of Patents or other intellectual property or proprietary information of Harpoon or any Third Party related to the Harpoon Patents, Harpoon Know-How, Licensed Compounds or Licensed Products. + +10.2.9 All rights in all inventions and discoveries, made, developed, or conceived by any employee or independent contractor of Harpoon or any of its Affiliates, and included in Harpoon Know-How or that are the subject of one (1) or more Existing Patents have been assigned in writing to Harpoon or such Affiliate. + +10.2.10 Harpoon has obtained the right (including under any Patents and other intellectual property rights) to use all material Information and other materials (including any formulations and manufacturing processes and procedures) developed or delivered by any Third Party under any agreements between Harpoon and any such Third Party that is necessary or reasonably useful for the Development or Commercialization of Licensed Compounds, and Harpoon has the rights under each such agreement to license and transfer such Information or other materials to AbbVie and its designees and to grant AbbVie the right to use such Information or other materials in the Development or Commercialization of the Licensed Compounds or the Licensed Products as set forth in this Agreement. + +- 56 - + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +10.2.11 Harpoon has made (and will make) available to AbbVie, as set forth in Section 3.5.1, all Regulatory Documentation and Harpoon Know-How and all such Regulatory Documentation and Harpoon Know-How are (and, if made available after the Effective Date, will be), to Harpoon's Knowledge, true, complete, and correct. Neither Harpoon nor any of its Affiliates has any Knowledge of [***] that has not been disclosed to AbbVie as of the Effective Date. [***] of a Licensed Product. + +10.2.12 Neither Harpoon nor any of its Affiliates, nor any of its or their respective officers, employees, or, to Harpoon's Knowledge, agents has made an untrue statement of material fact or fraudulent statement to the FDA or any other Regulatory Authority with respect to the Development of the Licensed Compounds or the Licensed Products, failed to disclose a material fact required to be disclosed to the FDA or any other Regulatory Authority with respect to the Development of the Licensed Compounds or the Licensed Products, or committed an act, made a statement, or failed to make a statement with respect to the Development of the Licensed Compounds or the Licensed Products that could reasonably be expected to provide a basis for the FDA to invoke its policy respecting "Fraud, Untrue Statements of Material Facts, Bribery, and Illegal Gratuities", set forth in 56 Fed. Reg. 46191 (September 10, 1991) and any amendments thereto or any analogous laws or policies in the Territory. + +10.2.13 There are no amounts that will be required to be paid to a Third Party as a result of the Development or Commercialization of the Licensed Compounds or Licensed Products that arise out of any agreement to which Harpoon or any of its Affiliates is a party. + +10.2.14 Neither Harpoon nor any of its employees nor, to Harpoon's Knowledge, agents performing hereunder, have ever been, are currently, or are the subject of a proceeding that could lead to it or such employees or agents becoming, as applicable, a Debarred Entity or Debarred Individual, an Excluded Entity or Excluded Individual or a Convicted Entity or Convicted Individual or added to the FDA's Disqualified/Restricted List. If, during the Term, Harpoon, or any of its employees or agents performing hereunder, become or are the subject of a proceeding that could lead to a Person becoming, as applicable, a Debarred Entity or Debarred Individual, an Excluded Entity or Excluded Individual or a Convicted Entity or Convicted Individual or added to the FDA's Disqualified/Restricted List, Harpoon shall immediately notify AbbVie, and AbbVie shall have the right, exercisable upon written notice given by AbbVie to terminate this Agreement. For purposes of this Agreement, the following definitions shall apply: + +(a) A "Debarred Individual" is an individual who has been debarred by the FDA pursuant to 21 U.S.C. §335a (a) or (b) from providing services in any capacity to a Person that has an approved or pending drug or biological product application. + +(b) A "Debarred Entity" is a corporation, partnership or association that has been debarred by the FDA pursuant to 21 U.S.C. §335a (a) or (b) from submitting or assisting in the submission of any Drug Approval Application, or a subsidiary or affiliate of a Debarred Entity. + +(c) An "Excluded Individual" or "Excluded Entity" is (A) an individual or entity, as applicable, who has been excluded, debarred, suspended or is otherwise ineligible to participate in federal health care programs such as Medicare or Medicaid by the Office of the Inspector General (OIG/HHS) of the U.S. Department of Health and Human Services, or (B) is an individual or entity, as applicable, who has been excluded, debarred, suspended or is otherwise ineligible to participate in federal procurement and non-procurement programs, including those produced by the U.S. General Services Administration (GSA). + +- 57 - + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +(d) A "Convicted Individual" or "Convicted Entity" is an individual or entity, as applicable, who has been convicted of a criminal offense that falls within the ambit of 21 U.S.C. §335a (a) or 42 U.S.C. §1320a - 7(a), but has not yet been excluded, debarred, suspended or otherwise declared ineligible. + +(e) "FDA's Disqualified/Restricted List" is the list of clinical investigators restricted from receiving investigational drugs, biologics, or devices if the FDA has determined that the investigators have repeatedly or deliberately failed to comply with regulatory requirements for studies or have submitted false Information to the study sponsor or the FDA.. + +10.2.15 The inventions claimed or covered by the Existing Patents (a) were not conceived, discovered, developed, or otherwise made in connection with any research activities funded, in whole or in part, by the federal government of the United States or any agency thereof, and (b) are not a "subject invention" as that term is described in 35 U.S.C. Section 201(f). + +10.3 Covenants of Harpoon. Harpoon covenants to AbbVie as follows: + +10.3.1 During the Term, neither Harpoon nor any of its Affiliates shall encumber or diminish the rights granted to AbbVie hereunder with respect to the Harpoon Patents, including by not (a) committing any acts or knowingly permitting the occurrence of any omissions that would cause the breach or termination of any Harpoon In-License Agreement, or (b) amending or otherwise modifying or permitting to be amended or modified, any Harpoon In-License Agreement, where such amendment or modification would adversely affect the rights granted to AbbVie hereunder. Harpoon shall promptly provide AbbVie with notice of any alleged, threatened, or actual breach of any Harpoon In-License Agreement. + +10.3.2 At any time following the [***] and prior to the expiration of the Option Period (as[***]), at AbbVie's request, Harpoon shall, at its sole cost and expense, exercise its option to acquire the Commercial License [***] for Licensed Products pursuant to [***]. Harpoon shall exercise such Commercial License promptly following written notice of such election by AbbVie to Harpoon. For clarity, Harpoon shall not be responsible for any payment of any financial obligations resulting from any agreement AbbVie elects to enter into with a Third Party in connection with the Manufacture of a Licensed Compound or Licensed Product under [***]. + +10.3.3 Harpoon and its Affiliates will employ Persons with appropriate knowledge, expertise and experience to conduct and to oversee the Initial Development Activities. + +10.3.4 Harpoon shall have obtained from each of its Affiliates, sublicensees, employees and agents who are participating in the Exploitation of the Licensed Compounds or Licensed Products or who otherwise have access to any AbbVie Information or other Confidential Information of AbbVie in connection with activities under this Agreement, rights to any and all Information that arises from or relates to such participation and is necessary or reasonably useful for the Development or Commercialization of Licensed Compounds or Licensed Products, in each case prior to the performance of or participation in such activities, such that AbbVie shall, by virtue of this Agreement, receive from Harpoon, without payments beyond those required by Article 6, the licenses and other rights granted to AbbVie hereunder. + +10.4 Covenants of AbbVie. AbbVie covenants to Harpoon as follows: + +10.4.1 AbbVie shall have obtained from each of its Affiliates, Sublicensees, employees and agents who are participating in the Exploitation of the Licensed Compounds or Licensed Products or who otherwise have access to any Harpoon Information or other Confidential Information of Harpoon in connection with activities under this Agreement, rights to any and all Information that arises from + +- 58 - + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +or relates to such participation or access and is necessary or reasonably useful for the Development or Commercialization of Licensed Compounds or Licensed Products, in each case prior to the performance of or participation in such activities, such that Harpoon shall, by virtue of this Agreement, receive from AbbVie, without additional consideration, the licenses specified in Section 5.2. + +10.5 DISCLAIMER OF WARRANTIES. EXCEPT FOR THE EXPRESS WARRANTIES SET FORTH HEREIN, NEITHER PARTY MAKES ANY REPRESENTATIONS OR GRANTS ANY WARRANTIES, EXPRESS OR IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW, BY STATUTE OR OTHERWISE, AND EACH PARTY SPECIFICALLY DISCLAIMS ANY OTHER WARRANTIES, WHETHER WRITTEN OR ORAL, OR EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF QUALITY, MERCHANTABILITY, OR FITNESS FOR A PARTICULAR USE OR PURPOSE OR ANY WARRANTY AS TO THE VALIDITY OF ANY PATENTS OR THE NON-INFRINGEMENT OF ANY INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES. + +ARTICLE 11 INDEMNITY + +11.1 Indemnification of Harpoon. AbbVie shall indemnify Harpoon, its Affiliates and its and their respective directors, officers, employees, and agents (the "Harpoon Indemnitees") and defend and save each of them harmless, from and against any and all losses, damages, liabilities, penalties, costs, taxes (including penalties and interest) and expenses (including reasonable attorneys' fees and expenses) (collectively, "Losses") in connection with any and all suits, investigations, claims, or demands of Third Parties (collectively, "Third Party Claims") incurred by or rendered against the Harpoon Indemnitees arising from or occurring as a result of: [***] + +11.2 Indemnification of AbbVie. Harpoon shall indemnify AbbVie, its Affiliates and its and their respective directors, officers, employees, and agents (the "AbbVie Indemnitees"), and defend and save each of them harmless, from and against any and all Losses in connection with any and all Third Party Claims incurred by or rendered against the AbbVie Indemnitees arising from or occurring as a result of: [***] + +11.3 Notice of Claim. All indemnification claims in respect of a Party, its Affiliates, or their respective directors, officers, employees and agents shall be made solely by such Party to this Agreement (the "Indemnified Party"). The Indemnified Party shall give the indemnifying Party prompt written notice (an "Indemnification Claim Notice") of any Losses or discovery of fact upon which such Indemnified Party intends to base a request for indemnification under this Article 11, but in no event shall the indemnifying Party be liable for any Losses to the extent resulting from any delay in providing such notice. Each Indemnification Claim Notice must contain a description of the claim and the nature and amount of such Loss (to the extent + +- 59 - + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +that the nature and amount of such Loss is known at such time). The Indemnified Party shall furnish promptly to the indemnifying Party copies of all papers and official documents received in respect of any Losses and Third Party Claims. + +11.4 Control of Defense. + +11.4.1 In General. Subject to the provisions of Sections 7.4 (if applicable), 7.5 and 7.6, at its option, the indemnifying Party may assume the defense of any Third Party Claim by giving written notice to the Indemnified Party within [***] after the indemnifying Party's receipt of an Indemnification Claim Notice. The assumption of the defense of a Third Party Claim by the indemnifying Party shall not be construed as an acknowledgment that the indemnifying Party is liable to indemnify the Indemnified Party in respect of the Third Party Claim, nor shall it constitute a waiver by the indemnifying Party of any defenses it may assert against the Indemnified Party's claim for indemnification. Upon assuming the defense of a Third Party Claim, the indemnifying Party may appoint as lead counsel in the defense of the Third Party Claim any legal counsel selected by the indemnifying Party which shall be reasonably acceptable to the Indemnified Party. In the event the indemnifying Party assumes the defense of a Third Party Claim, the Indemnified Party shall promptly deliver to the indemnifying Party all original notices and documents (including court papers) received by the Indemnified Party in connection with the Third Party Claim. Should the indemnifying Party assume the defense of a Third Party Claim, except as provided in Section 11.4.2, the indemnifying Party shall not be liable to the Indemnified Party for any legal expenses subsequently incurred by such Indemnified Party in connection with the analysis, defense or settlement of the Third Party Claim unless specifically requested in writing by the indemnifying Party. In the event that it is ultimately determined that the indemnifying Party is not obligated to indemnify, defend or hold harmless the Indemnified Party from and against the Third Party Claim, the Indemnified Party shall reimburse the indemnifying Party for any Losses incurred by the indemnifying Party in its defense of the Third Party Claim. + +11.4.2 Right to Participate in Defense. Without limiting Section 11.4.1, any Indemnified Party shall be entitled to participate in, but not control, the defense of such Third Party Claim and to employ counsel of its choice for such purpose; provided that such employment shall be at the Indemnified Party's own expense unless (a) the employment thereof, and the assumption by the indemnifying Party of such expense, has been specifically authorized by the indemnifying Party in writing, (b) the indemnifying Party has failed to assume the defense and employ counsel in accordance with Section 11.4.1 (in which case the Indemnified Party shall control the defense), or (c) the interests of the Indemnified Party and the indemnifying Party with respect to such Third Party Claim are sufficiently adverse to prohibit the representation by the same counsel of both Parties under Applicable Law, ethical rules or equitable principles (in which case the Indemnifying Party shall control its defense and the Indemnified Party shall control the defense of the Indemnified Party). + +11.4.3 Settlement. With respect to any Losses relating solely to the payment of money damages in connection with a Third Party Claim and that shall not result in the Indemnified Party's becoming subject to injunctive or other relief, and as to which the indemnifying Party shall have acknowledged in writing the obligation to indemnify the Indemnified Party hereunder, the indemnifying Party shall have the sole right to consent to the entry of any judgment, enter into any settlement or otherwise dispose of such Loss, on such terms as the indemnifying Party, in its sole discretion, shall deem appropriate. With respect to all other Losses in connection with Third Party Claims, where the indemnifying Party has assumed the defense of the Third Party Claim in accordance with Section 11.4.1, the indemnifying Party shall have authority to consent to the entry of any judgment, enter into any settlement or otherwise dispose of such Loss; provided that it obtains the prior written consent of the Indemnified Party (which consent shall not be unreasonably withheld, conditioned or delayed). If the indemnifying Party does not assume and conduct the defense of a Third Party Claim as provided above, the Indemnified Party may defend against such Third Party Claim. Regardless of whether the indemnifying Party chooses to defend or prosecute any Third Party Claim, no Indemnified Party shall admit any liability with respect to, or settle, compromise or dispose of, any Third Party Claim without + +- 60 - + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +the prior written consent of the indemnifying Party. The indemnifying Party shall not be liable for any settlement, compromise or other disposition of a Loss by an Indemnified Party that is reached without the written consent of the indemnifying Party. + +11.4.4 Cooperation. Regardless of whether the indemnifying Party chooses to defend or prosecute any Third Party Claim, the Indemnified Party shall, and shall cause each indemnitee to, cooperate in the defense or prosecution thereof and shall furnish such records, information and testimony, provide such witnesses and attend such conferences, discovery proceedings, hearings, trials and appeals as may be reasonably requested in connection therewith. Such cooperation shall include access [***] afforded to the indemnifying Party to, and reasonable retention by the Indemnified Party of, records and information that are reasonably relevant to such Third Party Claim, and making Indemnified Parties and other employees and agents available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder, and the indemnifying Party shall reimburse the Indemnified Party for all its reasonable out-of-pocket expenses in connection therewith, subject to refund if the Indemnifying Party is ultimately held not to be obligated to indemnify the Indemnified Party. + +11.4.5 Expenses. Except as provided above, the reasonable and verifiable costs and expenses, including fees and disbursements of counsel, incurred by the Indemnified Party in connection with any Third Party Claim shall be reimbursed on a [***] basis in arrears by the indemnifying Party, without prejudice to the indemnifying Party's right to contest the Indemnified Party's right to indemnification and subject to refund in the event the indemnifying Party is ultimately held not to be obligated to indemnify the Indemnified Party. + +11.5 Special, Indirect, and Other Losses. EXCEPT (A) FOR FRAUD, WILLFUL MISCONDUCT OR GROSS NEGLIGENCE, (B) FOR A PARTY'S BREACH OF ITS OBLIGATIONS UNDER [ARTICLE 9 OR SECTION 5.8], (C) AS PROVIDED UNDER [***] AND (D) TO THE EXTENT ANY SUCH DAMAGES ARE REQUIRED TO BE PAID TO A THIRD PARTY AS PART OF A CLAIM FOR WHICH A PARTY PROVIDES INDEMNIFICATION UNDER THIS ARTICLE 11, NEITHER PARTY NOR ANY OF ITS AFFILIATES SHALL BE LIABLE FOR INDIRECT, INCIDENTAL, SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES, INCLUDING LOSS OF PROFITS OR BUSINESS INTERRUPTION, HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY, WHETHER IN CONTRACT, TORT, NEGLIGENCE, BREACH OF STATUTORY DUTY OR OTHERWISE IN CONNECTION WITH OR ARISING IN ANY WAY OUT OF THE TERMS OF THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THE USE OF THE LICENSED COMPOUNDS OR LICENSED PRODUCTS, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. + +11.6 Insurance. Each Party shall obtain and carry in full force and effect the minimum insurance requirements set forth herein. Such insurance (a) shall be primary insurance with respect to each Party's own participation under this Agreement, (b) shall be issued by a recognized insurer rated by A.M. Best "A-VII" (or its equivalent) or better, or an insurer pre- approved in writing by the other Party, and (c) shall list the other Party as an additional insured under the General Liability Policy. + +11.6.1 Types and Minimum Limits. The types of insurance, and minimum limits shall be: + +(a) Worker's Compensation with statutory limits in compliance with the Worker's Compensation laws of the state or states in which the Party has employees in the United States (excluding Puerto Rico). + +(b) Employer's Liability coverage with a minimum limit of [***] provided that a Party has employees in the United States (excluding Puerto Rico). + +- 61 - + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +(c) General Liability Insurance with a minimum limit of [***] and [***] in the aggregate. General Liability Insurance shall include Clinical Trial Insurance. The limits may be met with a combination of primary and commercial umbrella insurance. + +11.6.2 Certificates of Insurance. Upon request by a Party, the other Party shall provide Certificates of Insurance evidencing compliance with this Section. The insurance policies shall be under an occurrence form, but if only a claims-made form is available to a Party, then such Party shall continue to maintain such insurance after the expiration or termination of this Agreement for the longer of (a) a period of [***] following termination or expiration of this Agreement in its entirety, or (b) with respect to a particular Party, [***] by a Party. + +11.6.3 Self-Insurance. Notwithstanding the foregoing, AbbVie may self-insure, in whole or in part, the insurance requirements described above. + +ARTICLE 12 TERM AND TERMINATION + +12.1 Term. + +12.1.1 Term. This Agreement shall commence on the Effective Date and, unless earlier terminated in accordance herewith, shall continue in force and effect until (a) the date of expiration of the last Royalty Term for the last Licensed Product, or (b) the expiration of the License Option Period and the failure of AbbVie to exercise the License Option (such period, the "Term"). + +12.1.2 Effect of Expiration of the Term. Following the expiration of the Term pursuant to clause (a) (but not clause (b)) of Section 12.1.1, the grants in Section 5.1.3 shall become non-exclusive, fully-paid, royalty-free and irrevocable. + +12.2 Termination for Material Breach. + +12.2.1 Material Breach. If either Party (the "Non-Breaching Party") believes that the other Party (the "Breaching Party") has materially breached one (1) or more of its material obligations under this Agreement, then the Non-Breaching Party may deliver notice of such material breach to the Breaching Party (a "Default Notice"). If the Breaching Party does not dispute that it has committed a material breach of one (1) or more of its material obligations under this Agreement, then if the Breaching Party fails to cure such breach within ninety (90) days after receipt of the Default Notice, or if such compliance cannot be fully achieved within such ninety- (90-) day period and the Breaching Party has failed to commence compliance or has failed to use diligent efforts to achieve full compliance as soon thereafter as is reasonably possible, the Non-Breaching Party may terminate this Agreement upon written notice to the Breaching Party. If the Breaching Party disputes that it has materially breached one (1) or more of its material obligations under this Agreement, the dispute shall be resolved pursuant to Section 13.7. If, as a result of the application of such dispute resolution procedures, the Breaching Party is determined to be in material breach of one (1) or more of its material obligations under this Agreement (an "Adverse Ruling"), then if the Breaching Party fails to complete the actions specified by the Adverse Ruling to cure such material breach within [***] after such ruling, or if such compliance cannot be fully achieved within such [***] period and the Breaching Party has failed to commence diligent efforts to achieve full compliance as soon thereafter as is reasonably possible or as prescribed by the Arbitrator, then the Non-Breaching Party may terminate this Agreement upon written notice to the Breaching Party. + +12.2.2 Material Breach Related to Diligence in a Major Market. Notwithstanding Section 12.2.1, if the material breach and failure to cure contemplated by Section 12.2.1 is + +- 62 - + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +with respect to AbbVie's Commercialization diligence obligations under Section 4.2 with respect to any Major Market, [***]. + +12.2.3 Invocation of Material Breach. Notwithstanding the foregoing, the Parties agree that termination pursuant to this Section 12.2 is a remedy to be invoked only if the breach is not (a) cured in accordance with Section 12.2.1 (including the timeframes set forth therein), (b) remedied through the payment of money damages determined in accordance with Section 13.7 or (c) adequately remedied through a combination of (a) and (b). + +12.3 Additional Termination Rights by AbbVie. AbbVie may terminate this Agreement in its entirety, or on a country or other jurisdiction -by-country or other jurisdiction basis, for any or no reason, upon ninety (90) days' prior written notice to Harpoon. + +12.4 Termination for Insolvency. In the event that either Party (a) files for protection under bankruptcy or insolvency laws, (b) makes an assignment for the benefit of creditors, (c) appoints or suffers appointment of a receiver or trustee over substantially all of its property that is not discharged within [***] after such filing, (d) is a party to any dissolution or liquidation, (e) files a petition under any bankruptcy or insolvency act or has any such petition filed against it that is not discharged within [***] of the filing thereof, or (f) admits in writing its inability generally to meet its obligations as they fall due in the general course, then the other Party may terminate this Agreement in its entirety effective immediately upon written notice to such Party. + +12.5 Rights in Bankruptcy. + +12.5.1 Applicability of 11 U.S.C. § 365(n). All rights and licenses (collectively, the "Intellectual Property") granted under or pursuant to this Agreement, including all rights and licenses to use improvements or enhancements developed during the Term, are intended to be, and shall otherwise be deemed to be, for purposes of Section 365(n) of the United States Bankruptcy Code (the "Bankruptcy Code") or any analogous provisions in any other country or jurisdiction, licenses of rights to "intellectual property" as defined under Section 101(35A) of the Bankruptcy Code. The Parties agree that the licensee of such Intellectual Property under this Agreement shall retain and may fully exercise all of its rights and elections under the Bankruptcy Code, including Section 365(n) of the Bankruptcy Code, or any analogous provisions in any other country or jurisdiction. All of the rights granted to either Party under this Agreement shall be deemed to exist immediately before the occurrence of any bankruptcy case in which the other Party is the debtor. + +12.5.2 Rights of non-Debtor Party in Bankruptcy. If a bankruptcy proceeding is commenced by or against either Party under the Bankruptcy Code or any analogous provisions in any other country or jurisdiction, the non-debtor Party shall be entitled to a complete duplicate of (or complete access to, as appropriate) any Intellectual Property and all embodiments of such Intellectual Property, which, if not already in the non-debtor Party's possession, shall be delivered to the non- debtor Party within [***] of such request; provided that the debtor Party is excused from its obligation to deliver the Intellectual Property to the extent the debtor Party continues to perform all of its obligations under this Agreement and the Agreement has not been rejected pursuant to the Bankruptcy Code or any analogous provision in any other country or jurisdiction. + +12.6 Termination in Entirety. + +12.6.1 In the event of a termination of this Agreement in its entirety by AbbVie pursuant to Section 12.3, or by Harpoon pursuant to Section 12.2.1 or 12.4: + +(a) all rights and licenses granted by Harpoon hereunder shall immediately terminate; + +- 63 - + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +(b) all rights and licenses granted by AbbVie hereunder shall immediately terminate; + +(c) subject to Section 12.10.2 and Section 12.7 (solely following the License Option Exercise Closing Date), AbbVie shall cease any and all Exploitation of Licensed Compounds and Licensed Products and transfer to Harpoon, or destroy (at Harpoon's sole election), copies of all data and Information generated by AbbVie in connection with the Exploitation of Licensed Compounds or Licensed Products, and all rights in such Licensed Compounds and Licensed Products shall revert back to Harpoon; and + +(d) if such termination occurs following the License Option Exercise Closing Date, Section 12.7 shall apply with respect to Licensed Compounds and Licensed Products that revert to Harpoon (the "Harpoon Reversion Products"). + +12.6.2 If AbbVie terminates this Agreement in its entirety pursuant to Section 12.2.1 (subject to Section 12.6.3 and Section 12.6.4) or 12.4: + +(a) all rights and licenses granted by Harpoon hereunder shall immediately terminate, and AbbVie shall have no further rights in connection with Licensed Compounds and Licensed Products; and + +(b) all rights and licenses granted by AbbVie hereunder shall immediately terminate. + +12.6.3 Prior to the exercise of the License Option, if AbbVie has the right to terminate this Agreement in its entirety pursuant to Section 12.2.1 (i.e. by mutual agreement or as may be finally determined by an Adverse Ruling), then within [***] following the expiration of the relevant cure period, if any, AbbVie may, by written notice to Harpoon, and as its sole and exclusive remedy in lieu of exercising its right under Section 12.2.1 with respect to such breach, elect to continue this Agreement as modified by this Section 12.6.3, in which case, effective as of the date AbbVie delivers notice of such election to Harpoon: + +(a) [***] + +(b) [***] + +(c) [***] + +(d) [***] + +(e) [***] + +(f) [***] + +- 64 - + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +(g) Following the License Exercise Option Closing Date, all provisions of this Agreement with respect to AbbVie's rights and obligations following the exercise of the License Option shall apply, provided that [***]; and + +(h) If the Post CSR Option Period expires without AbbVie delivering a License Option Exercise Notice, then all rights and licenses granted by Harpoon hereunder shall immediately terminate, and AbbVie shall have no further rights in connection with Licensed Compounds and Licensed Products. + +12.6.4 Following the License Option Exercise Closing Date, if AbbVie has the right to terminate this Agreement in its entirety pursuant to Section 12.2.1 (i.e. by mutual agreement or as may be finally determined by an Adverse Ruling), then within [***] following the expiration of the relevant cure period, if any, AbbVie may, by written notice to Harpoon, and as its sole and exclusive remedy in lieu of exercising its right under Section 12.2.1 with respect to such breach, elect to continue this Agreement as modified by this Section 12.6.4, in which case, effective as of the date AbbVie delivers notice of such election to Harpoon : + +(a) [***] + +(b) [***] + +(c) [***] + +(d) [***] + +12.6.5 Following the License Option Exercise Closing Date, if AbbVie has the right to terminate this Agreement in its entirety pursuant to Section 12.4, but elects to retain its rights and licenses pursuant to Section 12.5: + +(a) [***] + +(b) [***] + +(c) [***] + +- 65 - + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +(d) [***]. + +12.7 Reversion of Harpoon Products. Following the License Option Exercise Closing Date, if this Agreement terminates in its entirety, except for termination by AbbVie pursuant to Section 12.2.1 or Section 12.4, the following shall apply with respect to Harpoon Reversion Products. + +12.7.1 At Harpoon's sole election by written notice to AbbVie, AbbVie shall grant, and hereby grants to Harpoon, effective as of the effective date of termination, [***] (the "AbbVie Reversion IP"); provided that the foregoing license shall exclude (1) any license or other rights with respect to any active ingredient that is not a Licensed Compound and (2) any license or other rights with respect to any other Patents or Know-How owned or controlled by AbbVie or any of its Affiliates. The foregoing license under the AbbVie Reversion IP shall be payable on a country-by-country basis and [***] (applied mutatis mutandis to Harpoon) by Harpoon, its Affiliates or sublicensees of Harpoon Reversion Products, beginning [***]. + +12.7.2 AbbVie shall [***], within a reasonable time following the effective date of termination, [***] that was transferred by Harpoon to AbbVie with respect to each Harpoon Reversion Product. + +12.7.3 At Harpoon's request, AbbVie shall [***] in connection with Harpoon Reversion Products prior to reversion of such Harpoon Reversion Products. + +12.7.4 AbbVie shall [***] pertaining to the applicable Harpoon Reversion Products in its possession or Control. + +12.7.5 With respect to any Licensed Product that becomes a Harpoon Reversion Product during any period in which AbbVie is [***] for such Licensed Product, AbbVie shall [***] + +- 66 - + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +[***], provided that Harpoon [***] the foregoing obligations. + +12.7.6 If a [***], AbbVie shall [***]. Additionally, upon any Licensed Compound or Licensed Product becoming a Harpoon Reversion Product, AbbVie shall [***] + +12.7.7 To the extent that AbbVie [***] for the Commercialization of a Harpoon Reversion Product [***], Harpoon shall have the right to [***]. Harpoon shall exercise such right by written notice to AbbVie within [***] after such Licensed Compound or Licensed Product becomes a Harpoon Reversion Product. + +12.7.8 AbbVie shall [***], as may be necessary under, or as Harpoon may reasonably request in connection with Harpoon's rights under this Section 12.7. + +12.8 Termination of Terminated Territory. In the event of a termination of this Agreement with respect to a country or other jurisdiction by AbbVie pursuant to Section 12.3 or with respect to a Terminated Territory by Harpoon pursuant to Section 12.2.2 (but not in the case of any termination of this Agreement in its entirety), the term "Territory" shall be automatically amended to exclude the Terminated Territory and all rights and licenses granted by Harpoon hereunder (a) shall automatically be deemed to be amended to exclude, if applicable, the right to market, promote, detail, distribute, import, sell, offer for sale, file any Drug Approval Application for, or seek any Regulatory Approval for Licensed Compound or Licensed Products in such Terminated Territory, and (b) shall otherwise survive and continue in effect in such Terminated Territory solely for the purpose of furthering any Commercialization of the Licensed Compounds or Licensed Products in the Territory other than the Terminated Territory or any Development or Manufacturing in support thereof. + +12.9 Remedies. Except as otherwise expressly provided herein, termination of this Agreement (either in its entirety or with respect to one (1) or more country(ies) or other jurisdiction(s)) in accordance with the provisions hereof shall not limit remedies that may otherwise be available in law or equity. + +12.10 Accrued Rights; Surviving Obligations. + +12.10.1 Termination or expiration of this Agreement (either in its entirety or with respect to one (1) or more country(ies) or other jurisdiction(s)) for any reason shall be without prejudice to any rights that shall have accrued to the benefit of a Party prior to such termination or expiration. Such termination or expiration shall not relieve a Party from obligations that are expressly indicated to survive the termination or expiration of this Agreement. Without limiting the foregoing, Sections 3.6 [***]; 3.8.5 (solely for the purposes, and in accordance with the time periods, set forth therein); 4.6.1 (with respect to any amounts incurred prior to the effective date of termination and subject to reimbursement by AbbVie); 6.2 through 6.6 (with respect to payments for milestone events or Net Sales occurring prior to the effective date of termination); Sections 6.7 through 6.13; Sections 7.1.1 through 7.1.4 (with respect to Patents and Know-How conceived, discovered, developed, or otherwise made prior to expiration or termination of this + +- 67 - + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +Agreement); Section 7.9 (with respect to information exchanged prior to the effective date of termination); Sections 11.1 through 11.5; 12.1.2 and the grants referenced therein (with respect to expiration, but not termination, of this Agreement), 12.5 through 12.8 (with respect to termination, but not expiration, of this Agreement and in accordance with the time periods set forth therein), 12.10, 13.2, 13.3 through 13.13, and 13.15 through 13.20 of this Agreement shall survive the termination or expiration of this Agreement for any reason (unless the reason is expressly limited therein), and Articles 1 (to the extent used in other surviving provisions) and 9 of this Agreement shall survive the termination or expiration of this Agreement for any reason. If this Agreement is terminated with respect to the Terminated Territory but not in its entirety, then following such termination the foregoing provisions of this Agreement shall remain in effect with respect to the Terminated Territory (to the extent they would survive and apply in the event the Agreement expires or is terminated in its entirety), and all provisions not surviving in accordance with the foregoing shall terminate upon termination of this Agreement with respect to the Terminated Territory and be of no further force and effect (and, for purposes of clarity, all provisions of this Agreement shall remain in effect with respect to all countries in the Territory other than the Terminated Territory). + +12.10.2 If AbbVie terminates this Agreement with respect to a country or other jurisdiction, or in its entirety pursuant to Section 12.3, AbbVie shall have the right for at least [***] and no more than [***], which period shall be determined by Harpoon in its sole discretion, after the effective date of such termination with respect to such country or other jurisdiction to sell or otherwise dispose of all Licensed Compound or Licensed Product then in its inventory and any in-progress inventory, in each case that is intended for sale or disposition in such country or other jurisdiction, as though this Agreement had not terminated with respect to such country or other jurisdiction, and such sale or disposition shall not constitute infringement of Harpoon's or its Affiliates' Patent or other intellectual property or other proprietary rights. Within [***] from the expiration from this period, AbbVie shall furnish Harpoon a statement showing the quantities of Licensed Products then in AbbVie's inventory and any in- progress inventory. For purposes of clarity, AbbVie shall continue to make payments thereon as provided in Article 6 (as if this Agreement had not terminated with respect to such Major Market or country or other jurisdiction). + +ARTICLE 13 MISCELLANEOUS + +13.1 Force Majeure. Neither Party shall be held liable or responsible to the other Party or be deemed to have defaulted under or breached this Agreement for failure or delay in fulfilling or performing any term of this Agreement when such failure or delay is caused by or results from events beyond the reasonable control of the non-performing Party, including fires, floods, earthquakes, hurricanes, embargoes, shortages, epidemics, quarantines, war, acts of war (whether war be declared or not), terrorist acts, insurrections, riots, civil commotion, acts of God or acts, omissions or delays in acting by any governmental authority (except to the extent such delay results from the breach by the non-performing Party or any of its Affiliates of any term or condition of this Agreement). The non-performing Party shall notify the other Party of such force majeure within [***] after such occurrence by giving written notice to the other Party stating the nature of the event, its anticipated duration, and any action being taken to avoid or minimize its effect. The suspension of performance shall be of no greater scope and no longer duration than is necessary and the non-performing Party shall use commercially reasonable efforts to remedy its inability to perform. + +13.2 Change in Control of Harpoon. + +13.2.1 Harpoon (or its successor) shall provide AbbVie with written notice of any Change in Control of Harpoon or Acquisition by Harpoon within [***] following the closing date of such transaction. + +13.2.2 In the event of [***] + +- 68 - + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +13.3 Export Control. This Agreement is made subject to any restrictions concerning the export of products or technical information from the United States or other countries that may be imposed on the Parties from time to time. Each Party agrees that it will not export, directly or indirectly, any technical information acquired from the other Party under this Agreement or any products using such technical information to a location or in a manner that at the time of export requires an export license or other governmental approval, without first obtaining the written consent to do so from the appropriate agency or other governmental entity in accordance with Applicable Law. + +13.4 Assignment. + +13.4.1 Without the prior written consent of the other Party, such consent not to be unreasonably withheld, conditioned, or delayed, neither Party shall sell, transfer, assign, delegate, pledge, or otherwise dispose of, whether voluntarily, involuntarily, by operation of law or otherwise, this Agreement or any of its rights or duties hereunder; provided that either Party may make such an assignment without the other Party's consent to its Affiliate or to a successor, whether in a merger, sale of stock, sale of assets or any other transaction, of the business to which this Agreement relates. With respect to an assignment to an Affiliate, the assigning Party shall remain responsible for the performance by such Affiliate of the rights and obligations hereunder. Any attempted assignment or delegation in violation of this Section 13.4 shall be void and of no effect. All validly assigned and delegated rights and obligations of the Parties hereunder shall be binding upon and inure to the benefit of and be enforceable by and against the successors and permitted assigns of Harpoon or AbbVie, as the case may be. The permitted assignee or transferee shall assume all obligations of its assignor or transferor under this Agreement. Without limiting the foregoing, the grant of rights set forth in this Agreement shall be binding upon any successor or permitted assignee of Harpoon, and the obligations of AbbVie, including the payment obligations, shall run in favor of any such successor or permitted assignee of Harpoon's benefits under this Agreement. + +13.4.2 [***] + +- 69 - + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +13.5 Severability. If any provision of this Agreement is held to be illegal, invalid, or unenforceable under any present or future law, and if the rights or obligations of either Party under this Agreement will not be materially and adversely affected thereby, (a) such provision shall be fully severable, (b) this Agreement shall be construed and enforced as if such illegal, invalid, or unenforceable provision had never comprised a part hereof, (c) the remaining provisions of this Agreement shall remain in full force and effect and shall not be affected by the illegal, invalid, or unenforceable provision or by its severance herefrom, and (d) in lieu of such illegal, invalid, or unenforceable provision, there shall be added automatically as a part of this Agreement a legal, valid, and enforceable provision as similar in terms to such illegal, invalid, or unenforceable provision as may be possible and reasonably acceptable to the Parties. To the fullest extent permitted by Applicable Law, each Party hereby waives any provision of law that would render any provision hereof illegal, invalid, or unenforceable in any respect. + +13.6 Governing Law, Jurisdiction and Service. + +13.6.1 Governing Law. This Agreement or the performance, enforcement, breach or termination hereof shall be interpreted, governed by and construed in accordance with the laws of the State of Delaware, United States, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction; provided that all questions concerning (a) inventorship of Patents under this Agreement shall be determined in accordance with Section 7.1.3 and (b) the construction or effect of Patents shall be determined in accordance with the laws of the country or other jurisdiction in which the particular Patent has been filed or granted, as the case may be. The Parties agree to exclude the application to this Agreement of the United Nations Convention on Contracts for the International Sale of Goods. + +13.6.2 Service. Each Party further agrees that service of any process, summons, notice or document by registered mail to its address set forth in Section 13.8.2 shall be effective service of process for any action, suit, or proceeding brought against it under this Agreement in any such court. + +13.7 Dispute Resolution. Except for disputes resolved by the procedures set forth in Sections 2.2.3, 3.1.2, 6.12 or 13.11, if a dispute arises between the Parties in connection with or relating to this Agreement, including the determination of the scope or applicability of this Section 13.7 and the agreement to arbitrate, or any document or instrument delivered in connection herewith (a "Dispute"), it shall be resolved pursuant to this Section 13.7. + +13.7.1 General. Any Dispute shall first be referred to the Senior Officers of the Parties, who shall confer in good faith on the resolution of the issue. Any final decision mutually agreed to by the Senior Officers shall be conclusive and binding on the Parties. If the Senior Officers are not able to agree on the resolution of any such issue within [***] (or such other period of time as mutually agreed by the Senior Officers) after such issue was first referred to them, then, except as otherwise set forth in Section 13.7.2, either Party may, by written notice to the other Party, elect to initiate an arbitration proceeding pursuant to the procedures set forth in Section 13.7.3, which shall fully and finally settle the Dispute. + +13.7.2 Intellectual Property Disputes. In the event that a Dispute arises with respect the validity, enforceability, or patentability of any Patent, Trademark or other intellectual property rights, and such Dispute cannot be resolved in accordance with Section 13.7.1, unless otherwise agreed by the Parties in writing, such Dispute shall not be submitted to an arbitration proceeding in accordance with Section 13.7.3 and instead, either Party may initiate litigation in a court of competent jurisdiction, notwithstanding Section 13.6, in any country or other jurisdiction in which such rights apply. In case of a Dispute between the Parties with respect to inventorship, the Parties shall jointly select a patent attorney registered before the United States Patent and Trademark Office and submit such Dispute to the mutually-selected patent attorney for resolution under the United States patent law. The decision of such patent attorney with respect to inventorship shall be final, and the Parties agree to be bound by the decision and share equally the expenses of such patent attorney. + +- 70 - + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +13.7.3 Arbitration. Any arbitration proceeding under this Agreement shall take place pursuant to the procedures set forth in Schedule 13.7.3. + +13.7.4 Adverse Ruling. Any determination pursuant to this Section 13.7 that a Party is in material breach of its material obligations hereunder shall specify a (nonexclusive) set of actions to be taken to cure such material breach, if feasible. + +13.7.5 Interim Relief. Notwithstanding anything herein to the contrary, nothing in this Section 13.7 shall preclude either Party from seeking interim or provisional relief, including a temporary restraining order, preliminary injunction or other interim equitable relief concerning a Dispute, if necessary to protect the interests of such Party. This Section shall be specifically enforceable. + +13.8 Notices. + +13.8.1 Notice Requirements. Any notice, request, demand, waiver, consent, approval, or other communication permitted or required under this Agreement shall be in writing, shall refer specifically to this Agreement and shall be deemed given only if (a) delivered by hand, (b) sent by facsimile transmission (with transmission confirmed), or (c) by internationally recognized overnight delivery service that maintains records of delivery, addressed to the Parties at their respective addresses specified in Section 13.8.2 or to such other address as the Party to whom notice is to be given may have provided to the other Party in accordance with this Section 13.8.1. Such notice shall be deemed to have been given as of the date delivered by hand or transmitted by facsimile (with transmission confirmed) or on the [***] (at the place of delivery) after deposit with an internationally recognized overnight delivery service. Any notice delivered by facsimile shall be confirmed by a hard copy delivered as soon as practicable thereafter. This Section 13.8.1 is not intended to govern the day-to-day business communications necessary between the Parties in performing their obligations under the terms of this Agreement. + +13.8.2 Address for Notice. + +If to AbbVie, to: + +AbbVie Biotechnology LTD c/o Conyers, Dill & Pearman, Clarendon House, 2 Church Street, Hamilton HM 11 Bermuda with a copy (which shall not constitute notice) to: + +AbbVie Inc. 1 North Waukegan Road North Chicago, Illinois 60064 United States Attention: [***] Facsimile: [***] If to Harpoon, to: Harpoon Therapeutics, Inc. 131 Oyster Point Blvd, Suite 300 South San Francisco, CA 94080 Attention: [***] + +- 71 - + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +with a copy (which shall not constitute notice) to: + +Cooley LLP 3175 Hanover Street Palo Alto, CA 94304 Attention: [***] Email: [***] + +13.9 Entire Agreement; Amendments. This Agreement, together with the Schedules attached hereto, sets forth and constitutes the entire agreement and understanding between the Parties with respect to the subject matter hereof and all prior agreements, understandings, promises, and representations, whether written or oral, with respect thereto are superseded hereby (including that certain Mutual Confidentiality Disclosure Agreement between the Parties or their respective Affiliates dated [***] (the "Prior NDA"). The foregoing shall not be interpreted as a waiver of any remedies available to either Party as a result of any breach, prior to the Effective Date, by the other Party (or its Affiliates) of its obligations under the Prior NDA. Each Party confirms that it is not relying on any representations or warranties of the other Party except as specifically set forth in this Agreement. No amendment, modification, release, or discharge with respect to this Agreement shall be binding upon the Parties unless in writing and duly executed by authorized representatives of both Parties. + +13.10 English Language. This Agreement shall be written and executed in, and all other communications under or in connection with this Agreement shall be in, the English language. Any translation into any other language shall not be an official version thereof, and in the event of any conflict in interpretation between the English version and such translation, the English version shall control. + +13.11 Equitable Relief. Each Party acknowledges and agrees that the restrictions set forth in Section 5.8 and Articles 7 and 9 are reasonable and necessary to protect the legitimate interests of the other Party and that such other Party would not have entered into this Agreement in the absence of such restrictions, and that any breach or threatened breach of any provision of such Section or Articles may result in irreparable injury to such other Party for which there may be no adequate remedy at law. In the event of a breach or threatened breach of any provision of such Section or Articles, the non-breaching Party shall be authorized and entitled to seek from any court of competent jurisdiction injunctive relief, whether preliminary or permanent, specific performance, and an equitable accounting of all earnings, profits, and other benefits arising from such breach, which rights shall be cumulative and in addition to any other rights or remedies to which such non-breaching Party may be entitled in law or equity. Both Parties agree to waive any requirement that the other (a) post a bond or other security as a condition for obtaining any such relief, and (b) show irreparable harm, balancing of harms, consideration of the public interest, or inadequacy of monetary damages as a remedy. Nothing in this Section 13.11 is intended, or should be construed, to limit either Party's right to equitable relief or any other remedy for a breach of any other provision of this Agreement. + +13.12 Waiver and Non-Exclusion of Remedies. Any term or condition of this Agreement may be waived at any time by the Party that is entitled to the benefit thereof, but no such waiver shall be effective unless set forth in a written instrument duly executed by or on behalf of the Party waiving such term or condition. The waiver by either Party hereto of any right hereunder or of the failure to perform or of a breach by the other Party shall not be deemed a waiver of any other right hereunder or of any other breach or failure by such other Party whether of a similar nature or otherwise. The rights and remedies provided herein are cumulative and do not exclude any other right or remedy provided by Applicable Law or otherwise available except as expressly set forth herein. + +13.13 No Benefit to Third Parties. Except as provided in Article 11, covenants and agreements set forth in this Agreement are for the sole benefit of the Parties hereto and their successors and permitted assigns, and they shall not be construed as conferring any rights on any other Persons. + +- 72 - + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +13.14 Further Assurance. Each Party shall duly execute and deliver, or cause to be duly executed and delivered, such further instruments and do and cause to be done such further acts and things, including the filing of such assignments, agreements, documents, and instruments, as may be necessary or as the other Party may reasonably request in connection with this Agreement or to carry out more effectively the provisions and purposes hereof, or to better assure and confirm unto such other Party its rights and remedies under this Agreement. + +13.15 Relationship of the Parties. It is expressly agreed that Harpoon, on the one hand, and AbbVie, on the other hand, shall be independent contractors and that the relationship between the Parties shall not constitute a partnership, joint venture, or agency, including for all tax purposes. Further, the Parties (and any successor, assignee, transferee, or Affiliate of a Party) shall not treat or report the relationship between the Parties arising under this Agreement as a partnership for United States tax purposes, without the prior written consent of the other Party unless required by a final "determination" as defined in Section 1313 of the United States Internal Revenue Code of 1986, as amended. Neither Harpoon, on the one hand, nor AbbVie, on the other hand, shall have the authority to make any statements, representations, or commitments of any kind, or to take any action, which shall be binding on the other, without the prior written consent of the other Party to do so. All persons employed by a Party shall be employees of such Party and not of the other Party and all costs and obligations incurred by reason of any such employment shall be for the account and expense of such Party. + +13.16 Performance by Affiliates. AbbVie may use one (1) or more of its Affiliates to perform its obligations and duties hereunder and such AbbVie Affiliates are expressly granted certain rights herein; provided that each such Affiliate shall be bound by the corresponding obligations of AbbVie and, subject to an assignment to such Affiliate pursuant to Section 13.4, AbbVie shall remain liable hereunder for the prompt payment and performance of all their respective obligations hereunder. + +13.17 Counterparts; Facsimile Execution. This Agreement may be executed in two (2) counterparts, each of which shall be deemed an original, but all of which together shall constitute one (1) and the same instrument. This Agreement may be executed by facsimile or electronically transmitted signatures and such signatures shall be deemed to bind each Party hereto as if they were original signatures. + +13.18 References. Unless otherwise specified, (a) references in this Agreement to any Article, Section or Schedule shall mean references to such Article, Section or Schedule of this Agreement, (b) references in any Section to any clause are references to such clause of such Section, and (c) references to any agreement, instrument, or other document in this Agreement refer to such agreement, instrument, or other document as originally executed or, if subsequently amended, replaced, or supplemented from time to time, as so amended, replaced, or supplemented and in effect at the relevant time of reference thereto. + +13.19 Schedules. In the event of any inconsistencies between this Agreement and any schedules or other attachments hereto, the terms of this Agreement shall control. + +13.20 Construction. Except where the context otherwise requires, wherever used, the singular shall include the plural, the plural the singular, the use of any gender shall be applicable to all genders and the word "or" is used in the inclusive sense (and/or). Whenever this Agreement refers to a number of days, unless otherwise specified, such number refers to calendar days. The captions of this Agreement are for convenience of reference only and in no way define, describe, extend, or limit the scope or intent of this Agreement or the intent of any provision contained in this Agreement. The term "including," "include," or "includes" as used herein shall mean "including, but not limited to," and shall not limit the generality of any description preceding such term. The language of this Agreement shall be deemed to be the language mutually chosen by the Parties and no rule of strict construction shall be applied against either Party hereto. Each Party represents that it has been represented by legal counsel in connection with this Agreement and acknowledges that it has participated in the drafting hereof. In interpreting and applying the terms and provisions of this + +- 73 - + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +Agreement, the Parties agree that no presumption will apply against the Party which drafted such terms and provisions. + +[SIGNATURE PAGE FOLLOWS] + +- 74 - + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +THIS AGREEMENT IS EXECUTED by the authorized representatives of the Parties as of the Effective Date. HARPOON THERAPEUTICS, INC. ABBVIE BIOTECHNOLOGY LTD By: /s/ Gerald McMahon Name: Gerald McMahon Title: President and CEO + +By: /s/ Robert Michael Name: Robert Michael Title: Director + +[SIGNATURE PAGE TO DEVELOPMENT AND OPTION AGREEMENT] + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +Schedule 1.84 + +Initial Development Plan + +[***] + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +Schedule 1.99 + +Licensed Compound + +[***] + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +Schedule 3.7 + +Pre-Approved Third Party Providers + +[***] + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +Schedule 10.2 + +Disclosure Schedules + +[***] + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +Schedule 10.2.1 + +Existing Patents [***] + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 + + + + + +Schedule 13.7.3 + +Arbitration + +[***] + +Source: HARPOON THERAPEUTICS, INC., 10-K, 3/12/2020 \ No newline at end of file diff --git a/full_contract_txt/HealthcareIntegratedTechnologiesInc_20190812_8-K_EX-10.1_11776966_EX-10.1_Reseller Agreement.txt b/full_contract_txt/HealthcareIntegratedTechnologiesInc_20190812_8-K_EX-10.1_11776966_EX-10.1_Reseller Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..26eaa0f36729b802c24544b401c0ddaa8f93efe4 --- /dev/null +++ b/full_contract_txt/HealthcareIntegratedTechnologiesInc_20190812_8-K_EX-10.1_11776966_EX-10.1_Reseller Agreement.txt @@ -0,0 +1,117 @@ +WALABOT-HOME RESELLER AGREEMENT This Walabot-HOME Reseller Agreement ("Agreement") is made and entered into as of this 31 day of July 2019 ("Effective Date") by and between Vayyar Imaging Ltd., having its principal place of business at 3 Avraham Giron St., POB. 325, Yehud 5621717, Israel ("Supplier"), and Inde Living Holdings, Inc., having its principal place of business at 1462 Rudder Lane, Knoxville, TN 37919 ("Reseller"). Vayyar and Reseller shall be referred to individually as "Party" and collectively as "Parties". 1. Definitions. The following capitalized terms shall have the following meanings: "Customer" means a third party who purchases the Products from Reseller within the Territory, for its internal use only (including for the personal use of its End Users), such as nursing homes. "End User" means a third party who is a customer of Customer or is otherwise related to a customer of Customer, and who purchases and/or uses the Products within the Territory, for its personal use only. "End User Agreement" means Supp l i e r ' s s t andard l i cense ag reement s , wh ich a re ava i l ab le a t https://walabot.com/walabot-home, which governs each End User's right to use the Product, as amended by Supplier in its sole discretion from time to time. "MOQ" means the minimum order quantity of Product units during the Initial Term, as set forth in Schedule 1. ***. "Order" means a written purchase order for Products to be purchased by the Reseller. "Products" means the products listed in Schedule 1. "Software" means Supplier's proprietary software components, included as part of the Products, including all improvements, corrections, updates, upgrades and any related documentation and derivatives thereof. "Territory" means the countries and/or territories listed in Schedule 1. Appointment During the Term (defined below) and subject to the terms and conditions of this Agreement (including, but not limited to Section 12.4 hereof), Supplier hereby (i) appoints Reseller, and Reseller accepts the appointment, as a non‐ exclusive reseller of the Products in the Territory. In connection with the foregoing appointment, Supplier hereby grants Reseller a non-transferable, revocable, limited right to resell, market, promote, stimulate interest in, and solicit Orders by Customers and/or End Users in the Territory for the Products and to provide services in connection with those activities. Reseller shall be solely responsible for all of its costs and expenses related to the resale of the Products. Notwithstanding anything to the contrary, Supplier reserves any and all rights with respect to the Products not expressly granted in this Agreement. Without limiting the right of the Reseller to receive any and all Paid-For Products (including but not limited to under Section 4.2 hereof), nothing in this Agreement shall entitle the Reseller to any priority of supply in relation to the Products as against any other distributor or customer of the Supplier. "Paid‐ For Products" means Products for which Reseller submitted an Order, had that Order accepted by Supplier, and for which Reseller has remitted payment in full to the Supplier under this Agreement. Subject to the terms of Section 13, below, it is hereby clarified that Supplier may, in its sole discretion, sell the Products to any other person or entity, whether within the Territory or otherwise. ***. ***. ***. Obligations of Reseller By fulfilling its obligations under this Agreement, the Reseller shall: (i) comply with all applicable laws and regulations; (ii) use materials and branding solely as determined by the Supplier (subject to the right of the Reseller to make changes to such materials as are described in Section 2.4); (iii) attend training and sales meetings as required by the Supplier, so as to be able to describe, demonstrate, and sell the Products adequately; (iv) make sure that all the End Users are signing the End User Agreement, and in the event that any End User does not comply with these terms, Reseller shall bear all liability associated with said End User; and (v) make no representations or warranties with respect to the Products other than those provided in the Products' documentation; Supplier shall be fully responsible for shipping the Products to the Reseller at the address of the Reseller specified in each Order (or as otherwise communicated by Reseller to Supplier under this Agreement) and will obtain and provide for itself and/or on behalf of Reseller, any and all registrations, licenses, permits, certificates and all other documentation and information required for the exportation, importation, storage, marketing and otherwise resale of the Products in the Territory. For such process, Supplier will allocate the additional cost on a pre-agreed per Product unit additional price basis, which will be subject to an increase (subject to changes in taxes). Reseller agrees to reimburse Supplier for the reasonable out of pocket costs and expenses incurred by Supplier in connection with the shipment and delivery of the Products, and of obtaining the foregoing registrations, licenses, permits, certificated and other documentation, provided that Supplier submits an invoice therefore in reasonable detail (and unless and solely to the extent such reimbursements is prohibited by Section 14.9 or prohibited under other applicable laws). For the avoidance of doubt, in no way will Supplier be subject to any tax (i.e., sales tax) relating to the sale of the Products to Reseller's Customers and/or End Users. + +1. 1.1. + +1.2. + +1.3. + +1.4. 1.5. 1.6. 1.7. 1.8. + +1.9. 2. 2.1. + +2.2. 2.3. 2.4. 3. 3.1. + +3.2. + +Source: HEALTHCARE INTEGRATED TECHNOLOGIES INC., 8-K, 8/12/2019 + + + + + +Diagnostics, Telemetric Data and Analytics. Supplier will retain access to diagnostics, telemetric data and analytics generated by the Product. The data shall be uploaded to Supplier's Firebase server in a timely manner. A server interface will be embedded within the software package provided by the Supplier. Distributor will maintain Supplier's interface to the server and access to such data within the Product; provided that the data and analytics to be received by the Supplier shall, in all cases, not be in violation of any applicable privacy or other law. Orders, Payment and Delivery ***. If Reseller fails to submit Orders with an aggregate value equal to or greater than the MOQ, then Reseller shall pay Supplier a sum equal to the shortfall, within 30 days after the end of the Initial Term. Upon payment of such amount, Seller shall deliver the Products paid for to Reseller in a commercially reasonable timeframe (and in no event any later than 150 days from the date such payment is received in full) to be sold by Reseller in accordance with this Agreement as contemplated by the last sentence of Section 12.4. Reseller shall place its Orders by email, at the email address set out in Schedule 1. Each Order shall detail the total order quantity of the Product and the requested date of delivery (taking into consideration up to 4 months lead time). Within 5 business days following the receipt of each Order, Supplier shall acknowledge receipt of such Order. No Order shall be binding upon Supplier until such written acknowledgment was sent by Supplier to Reseller; provided that Supplier shall confirm or reject such Orders at its discretion. ***. Packaging, Samples and Transportation Immediately upon delivery of the Products at the Reseller's facilities within the Territory ("Arrival Date"), Reseller shall visually inspect the Products and the appropriate documents, and employ good receiving/delivering procedures, verification of the Products to confirm origin, identity, quantity, labeled storage conditions, integrity of the packaging as well as any other inspection, as may be required by applicable laws or regulations. Reseller shall ensure that the Products are delivered with appropriate information and documentation, and shall not make any changes to the Products or to the packaging or labeling thereof, or to the legal documents included in the Products' packages, without Supplier's prior written consent (subject to the right of the Reseller to make changes to such materials as are described in Section 2.4). Reseller shall ensure traceability of the delivered Products. Defective Products; Warranty; Support ***. During the Term Supplier may extend an offer to Reseller for a Returns Discount Program, whereby the Supplier will rebate a percentage of the cost of goods sold in lieu of accepting End-User returns. In the event no Returns Discount Program has been entered into by the Parties, Supplier will not accept Returned Product, except for cases of Defective Products. ***. ***. Intellectual Property Supplier shall retain all its rights and title to and ownership of all intellectual property rights in the Products including, inter alia, all documentation, enhancements, improvements or other modifications made thereof (including those modifications made in connection with Section 3.1 above), and except as expressly provided in this Agreement, Reseller shall have no right, title, or interest in any intellectual property rights in the Products. Nothing in this Section shall limit the rights of the Reseller in or to any modifications made to the Software in accordance with Section 2.3. Reseller shall: (a) not do or omit to do, nor authorize any third party to do or omit to do, any act or omission that would or might invalidate or be inconsistent with any of Supplier's intellectual property rights; (b) promptly notify Supplier of any actual, threatened, or suspected infringement of any of Supplier's intellectual property rights that comes to Reseller's notice; and (c) at Supplier's request and expense, do all such things as may be reasonably required to assist Supplier in taking or resisting any proceedings in relation to any such infringement or claim. Confidential Information. Each Party agrees that it will maintain the confidentiality of all electronic, oral, and written communications from the other Party which should reasonably be regarded in the normal commercial view, as constituting confidential information, trade secrets or proprietary information ("Confidential Information") and use such Confidential Information only as necessary to exercise a Party's rights or perform a Party's obligations under this Agreement. Each Party shall: (i) safeguard and keep secret all Confidential Information, and will not directly or indirectly disclose to any third party the Confidential Information without written permission of the other; and (ii) in performing its obligations hereunder, use at least the same degree of care as it does with respect to its own confidential information of like importance but, in any event, at least reasonable care. Any information related to the Products shall be considered the Supplier's Confidential Information. If either Party becomes legally obliged to make disclosure of the other Party's Confidential Information, that Party shall immediately notify the first Party and reasonably cooperate with the first Party in any efforts to limit or object to the disclosure. + +3.3. + +4. 4.1. 4.2. + +4.3. + +4.4. 5. 5.1. + +5.2. + +6. 6.1. 6.2. + +6.3. 6.4. 7. 7.1. + +7.2. + +8. + +Source: HEALTHCARE INTEGRATED TECHNOLOGIES INC., 8-K, 8/12/2019 + + + + + +Disclaimer of Warranties. UNLESS SPECIFIED OTHERWISE HEREIN (INCLUDING BUT NOT LIMITED TO THE BACK TO BACK WARRANTY SPECIFIED IN SECTION 6.5) AND WITHOUT LIMITATION TO ANY WARRANTY WHICH SUPPLIER MAY, IN ITS SOLE DISCRETION, MAKE TO ANY CUSTOMER AND/OR END USER, THE PRODUCTS ARE PROVIDED ON AN "AS IS" AND "AS AVAILABLE" BASIS, AND SUPPLIER DOES NOT MAKE ANY WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO THE PRODUCTS OR ITS OPERATION THEREOF, MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. Limitation of Liability TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, IN NO EVENT SHALL SUPPLIER BE LIABLE UNDER, OR OTHERWISE IN CONNECTION WITH, THIS AGREEMENT FOR: (A) ANY CONSEQUENTIAL, INDIRECT, SPECIAL, INCIDENTAL, OR PUNITIVE DAMAGES; (B) ANY LOSS OF PROFITS, LOSS OF BUSINESS, LOSS OF REVENUE, OR LOSS OF ANTICIPATED SAVINGS; (C) ANY LOSS OF, OR DAMAGE TO, DATA, REPUTATION, OR GOODWILL; AND/OR (D) THE COST OF PROCURING ANY SUBSTITUTE GOODS OR SERVICES. THE AGGREGATE LIABILITY OF SUPPLIER UNDER, OR IN CONNECTION WITH, THIS AGREEMENT SHALL BE EQUAL TO THE LESSER OF: (i) ***; AND (ii) ***. THE FOREGOING EXCLUSIONS AND LIMITATIONS SHALL APPLY: (A) EVEN IF SUPPLIER HAS BEEN ADVISED, OR SHOULD HAVE BEEN AWARE, OF THE POSSIBILITY OF LOSSES OR DAMAGES; (B) EVEN IF ANY REMEDY IN THIS AGREEMENT FAILS OF ITS ESSENTIAL PURPOSE; AND (C) REGARDLESS OF THE THEORY OR BASIS OF LIABILITY (INCLUDING, WITHOUT LIMITATION, BREACH OF CONTRACT, TORT, NEGLIGENCE OR STRICT LIABILITY). Indemnification. Reseller shall defend, indemnify and hold harmless Supplier and its employees, officers, directors, suppliers, and successors from and against any third-party claim, suit, proceeding, damages, losses and/or liability arising from or related to (i) Reseller's breach of any provision of this Agreement; and/or (ii) Reseller's interaction and/or relationship with any Customer and/or End User or other third party. Term and Termination This Agreement shall become effective on the Effective Date and shall remain in effect for an initial period of 1 year ("Initial Term"). Thereafter, this Agreement shall automatically be renewed for successive 1-year terms (each a "Renewal Term", and together with the Initial Term, the "Term"). Following the Initial Term, either Party may terminate this Agreement without cause upon written notice to the other Party of at least 3 months. Without derogating from any other remedies that any Party may have under the terms of this Agreement or at law, each Party shall have the right to terminate this Agreement forthwith upon the occurrence of any of the following: (i) the other Party is in material breach of its obligations hereunder and fails to remedy such breach within 30 days after being requested in writing to do so; or (ii) the other Party's bankruptcy, insolvency, liquidation, whether voluntarily or otherwise, or if it makes an assignment for the benefit of creditors. Upon any termination of this Agreement: (i) all rights granted by Supplier to Reseller under the Agreement revert to Supplier; (ii) Reseller shall transfer to Supplier all data, reports and any other information generated by Reseller in the course of performance of this Agreement; and (iii) any payment obligation which had accrued or become payable prior to the date of termination (including the payment obligation under Section 4.2) shall survive termination of this Agreement. Upon termination of this Agreement, the provisions in Sections 1, 6.5, 7, 8, 9, 10, 11, 12.3, 12.4, 13 (but solely to the extent stated in the last sentence of that section), and 14 shall remain in effect as necessary to carry out the purpose of those Sections after termination. In addition to the foregoing, if, at the time of termination of this Agreement, Reseller shall have additional Product units in its inventory and is able to sell them to Customers and/or End Users (including, without limitation, any Product units for which Reseller has or is obligated to pay the Supplier the purchase price therefor but which have not yet been delivered to the Reseller by Supplier, which Supplier hereby agrees to either deliver as otherwise contemplated by this Agreement as if it had not terminated or to refund the purchase price therefor), then the licenses and appointments described in Section 2 shall remain in effect with respect to such unsold Product units (and such Section 2 shall not terminate) until the earlier of (i) the date on which the last Product in Reseller's inventory is sold to a Customer and/or End User, or (ii) 1 year from the date of the termination of this Agreement. ***. General Supplier and/or Reseller may assign or novate this Agreement and the rights and obligations under it to any of its affiliates or upon any merger or acquisition or the sale of all or substantially all of its assets relating to the Agreement. Any purported assignment of rights in violation of this subsection is void. The relationship between the Parties is that of supplier and purchaser. Reseller is an independent contractor and is not the legal representative, agent, joint venture, partner, or employee of Supplier. Reseller may describe itself as Supplier's 'authorized distributor', but may not hold itself out as the Supplier's agent. Reseller has no authority to assume or create any obligations of any kind or to make any representations or warranties, whether express or implied, on behalf of the Supplier, nor to bind the Supplier in any respect. + +9. + +10. 10.1. + +10.2. + +11. + +12. 12.1. + +12.2. + +12.3. + +12.4. + +13. 14. 14.1. + +14.2. + +Source: HEALTHCARE INTEGRATED TECHNOLOGIES INC., 8-K, 8/12/2019 + + + + + +Except as to the timely payment by Reseller for the Products purchased under this Agreement, no failure or omission to carry out or observe any provision of this Agreement shall give rise to any claim by one Party against the other, or be a breach of this Agreement, if the same is caused by or arises out of circumstances beyond the reasonable control of the other Party, including technical difficulties beyond such Party's reasonable control that delay or prevent manufacture ("Force Majeure"). However, the Parties shall endeavor to avoid, remove, or cure all such conditions as soon as is reasonably feasible. If either Party is prevented or hindered from carrying out its obligations under this Agreement due to a Force Majeure, this Agreement shall be suspended as long as the Force Majeure persists. If such period exceeds 1 month, either Party may terminate this Agreement on giving written notice to the other. No failure or delay on the part of either Party to exercise any right or remedy under this Agreement shall be construed or operate as a waiver thereof, nor shall any single or partial exercise of any right or remedy preclude the further exercise of such right or remedy. If any provision or part of any provision of this Agreement is found to be invalid or unenforceable for any reason, the other provisions of this Agreement shall remain in full force and effect as if the Agreement had been executed without that provision or part. All notices or other communications hereunder shall be in writing and shall be given in person, by courier or by registered mail (provided that written confirmation of receipt is provided) addressed as set forth in the heading of this Agreement or such other address as any Party may designate to the other in accordance with this procedure. All communications delivered in person or by courier service shall be deemed to have been received upon delivery, shall be deemed to have been received on the business day following transmission with confirmed answer back, and all notices and other communications sent by registered mail shall be deemed to have been received within 3 business days after posting. This Agreement shall be governed by the laws of the State of New York and all disputes and controversies arising out of or in connection with the Agreement shall be brought exclusively before the competent courts in New York County, New York; provided however that judgment shall be enforceable in any country and that nothing in this Section shall prevent or restrict either Party from seeking interim relief in any competent jurisdiction as it may deem fit. This Agreement constitutes the entire agreement between the Supplier and the Reseller. All previous or contemporaneous agreements, proposals, understandings, and communications between the Supplier and the Reseller are replaced in their entirety by this Agreement. In entering into this Agreement, neither Party has relied on any warranties, representations, or other matters other than as set out in this Agreement. All conditions, warranties, or other terms implied by statute or common law are excluded to the fullest extent permitted by law. This Agreement may be amended only by a written instrument executed by authorized representatives of the Parties. Each of Reseller and Supplier will, respectively, ensure that it and its employees, agents or affiliates, or by any independent contractors on its behalf or for its benefit, shall comply with the United States' Foreign Corrupt Practices Act of 1977, as amended (15 U.S.C. §§ 78dd-1 et seq.) and any analogous anti-bribery and anti-corruption law, rule, regulation that may apply to any of the transactions contemplated under this Agreement, including but not limited to in connection with the sale, resale, import, export, transportation, or shipment of the Products. Neither party to this Agreement will make any payment, directly or indirectly, of money or other assets, including but not limited to compensation derived from this Agreement or any Order placed under it, to government or political party officials, officials of international organizations, candidates for public office, or representatives of other businesses or persons acting on behalf of any of the foregoing, that would constitute a violation of any law, rule, or regulation. IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date. + +Vayyar Imaging Ltd. IndeLiving Holdings, Inc. + +By: /s/ Raviv Melamed By: /s/ Robert Forrest Chief Executive Officer Chief Executive Officer + +14.3. + +14.4. + +14.5. + +14.6. + +14.7. + +14.8. + +14.9. + +Source: HEALTHCARE INTEGRATED TECHNOLOGIES INC., 8-K, 8/12/2019 + + + + + +Schedule 1 Territory, Products, Price, Ordering Address, Notices + +Territory USA + +Products Walabot HOME hardware device + +Price $*** per Product unit + $*** for shipment and tax (subject to any tax changes) MOQ *** units + +Address to which Orders should be sent Supplier's Ordering Email address: logistics@walabot.com + +Address for Notices to the Supplier Vayyar Ltd. 3 Avraham Giron St., POB. 325, Yehud 5621717, Israel Address for Notices to Reseller Inde Living Holdings, Inc 1462 Rudder Lane Knoxville, TN 37919 Vayyar Wire Transfer Details *** + +Payment Terms *** + +Source: HEALTHCARE INTEGRATED TECHNOLOGIES INC., 8-K, 8/12/2019 \ No newline at end of file diff --git a/full_contract_txt/HealthcentralCom_19991108_S-1A_EX-10.27_6623292_EX-10.27_Co-Branding Agreement.txt b/full_contract_txt/HealthcentralCom_19991108_S-1A_EX-10.27_6623292_EX-10.27_Co-Branding Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..aea17eaae9e79d472146365d7c30871bb291c832 --- /dev/null +++ b/full_contract_txt/HealthcentralCom_19991108_S-1A_EX-10.27_6623292_EX-10.27_Co-Branding Agreement.txt @@ -0,0 +1,475 @@ +EXHIBIT 10.27 + + MediaLinx File No. 952 + + CO-BRANDING CONTENT AGREEMENT ----------------------------- + +THIS AGREEMENT made as of the 30th day of June 1999 + +BETWEEN: + + MEDIALINX INTERACTIVE, L.P., represented herein by its general partner MediaLinx Interactive Inc. a corporation incorporated under the laws of the Province of Ontario 20 Richmond Street East Suite 600 Toronto, Ontario M5C 3B5 + + (hereinafter called "MLX", or "Party") + + - and - + + HEALTHCENTRAL.COM INC. a corporation incorporated under the laws of the state of California Marketplace Tower 6001 Shellmound Street, Suite 800 Emeryville, CA. 94608 + + (hereinafter called "HCI" or "Party") + + (both MLX and HCI to be collectively referred to as the "Parties") + +WHEREAS MLX owns, hosts, licenses, publishes and maintains an Internet service in Canada that includes, but is not limited to the "Sympatico" web site which includes inter alia, the HealthyWay web site on the World Wide Web (the "MLX Internet Services"); + +AND WHEREAS HCI owns, hosts, licenses, publishes and maintains a health services web site known as healthcentral.com on the World Wide Web (the "HCI Site); + +NOW THEREFORE in consideration of the mutual covenants herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows: + +CERTAIN INFORMATION ON THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. + +1. SERVICES & DEVELOPMENT + +a) MLX and HCI have agreed to provide certain services and content to each other in order to mutually develop and integrate content from the HCI Site into the Sympatico health section, currently known as "HealthyWay", of the Sympatico web site (the "Co-Branded Site"). + +b) The Parties have agreed that they will mutually approve the design of the Co-Branded Site and that the launch date of the Co-Branded Site shall be September 1st, 1999 unless mutually extended by the Parties as agreed to in writing. + +2. MLX'S OBLIGATIONS AND RESPONSIBILITIES + +Source: HEALTHCENTRAL COM, S-1/A, 11/8/1999 + + + + + +During the Term of this Agreement MLX shall: + +a) continue to technically host and moderate all of the HealthyWay discussion forums currently residing on the forums section of the Sympatico web site. MediaLinx shall retain all right, title to and interest in the discussion forums; + +b) promote the Co-Branded Site as set out in Schedule "1" attached hereto; + +c) grant to HCI, a non-exclusive and non-transferable right to use MediaLinx images and certain content contained in the HealthyWay web site (the "Sympatico Content") for the sole purpose of satisfying the requirements of this Agreement. MediaLinx shall retain all right, title to and interest in the Sympatico Content; + +d) grant to HCI, to the extent that HCI requires access to MLX logos and trademarks (collectively "MLX Marks") the use of certain MLX Marks as necessary for the purposes of fulfilling its obligations under this Agreement. HCI assures that the MLX marks are used in accordance with MLX's logo usage guidelines as provided by MLX from time to time. Without limiting the generality of the foregoing, HCI agrees: + + (i) that MLX is the owner of the MLX Marks and the goodwill and reputation associated therewith; + + (ii) not to contest the validity of the MLX Marks or MLX's title thereto; + + (iii) that HCI acquires no right, title or interest in the MLX Marks, and any and all goodwill associated with the MLX Marks enures exclusively to the benefit of MLX; + + (iv) to notify MLX promptly of any attempt by any third party to use MLX Marks, or any variation or imitation thereof of which HCI becomes aware; + + (v) at MLX's expense, to fully co-operate with MLX and execute such documents and at the request of MLX to do such acts and things as may be reasonably necessary or desirable to restrain such use; + +e) ensure that in the event that it enters into an electronic commerce agreement with a third party for the sale of goods on the Co-Branded Site that all agreements with the third parties shall ensure that such third party shall be wholly responsible for all products and transactions that may occur on the Co-Branded Site, that all such transactions shall comply with all applicable Canadian and US laws and regulations, including privacy laws and including compliance with MediaLinx's standards and guidelines, and ensure that such third party + + 2 + + provides a full indemnity to MediaLinx and HCI in respect of any and all transactions and products that may be hosted on the Co-Branded Site; + +f) ensure that in the event that user traffic to the Co-Branded Site falls below the levels outlined in Schedule 2, that MediaLinx will use all commercially reasonable efforts to increase promotion to the Co-Branded Site until usage to the site increases to levels above the levels outlined in Schedule 2; and + +g) make a reasonable effort to explore the technical possibilities of sharing with HCI the traffic on the home page of the Sympatico Health Section of the Sympatico web site, subject to any legal and regulatory constraints. + +3. HCI's OBLIGATIONS AND RESPONSIBILITIES + +During the Term of this Agreement HCI shall: + +a) use reasonable commercial efforts to provide industry accepted standards of reliability of service and to make available the appropriate production resources to build and maintain the Co-Branded Site; + +b) integrate content contained in the HCI Site into the Co-Branded Site of the + +Source: HEALTHCENTRAL COM, S-1/A, 11/8/1999 + + + + + + Sympatico web site subject to the prior approval of MediaLinx; + +c) update the "look and feel" of the Co-Branded Site upon Launch, subject to the prior approval and consent of MediaLinx; + +d) ensure that general terms and conditions on the Co-Branded Site are subject to the prior approval of MediaLinx; + +e) host, manage, update and maintain all aspects of the mutually approved Co- Branded Site including technology, content, production, design, operations, and customer relations save and except forums. Without limiting the generality of the foregoing, HCI shall use all reasonable commercial efforts to: 1) ensure that the hosting services provided in connection with the Co-Branded Site are provided at the same standard as the hosting of the Sympatico web site, and 2) ensure that the Co-Branded Site is available 7 days per week and 24 hours per day; + +f) ensure that the level of Canadian content contained on the Co-Branded Site is maintained at such levels as is found on the HealthyWay section of the Sympatico web site on the Launch Date, and ensure that the level of Canadian content is maintained in accordance with the attached Schedule "3"; + +g) design the Co-Branded Site in such a manner so as to make prominent Canadian content, Canadian context and Canadian activity, such as described in Schedule "3"; + +h) make all reasonable efforts to suppress or remove all content from the HCI Site which is to be integrated into the Co-Branded Site that is irrelevant and inappropriate for the Canadian market and ensure that all content contained in the Co-Branded Site continues to be relevant for the Canadian market in accordance with Schedule "3"; + +i) provide MediaLinx with daily usage statistics for the Co-Branded Site in accordance with the following format attached hereto as Schedule "4"; + + 3 + +j) have the option to provide and manage some discussion forum hosts referred to in paragraph 2(a) of this Agreement; + +k) ensure that it only utilizes communications related services and tools on the Co-Branded Site which have been provided by MediaLinx's Canadian telecommunication partners, including but not limited to webmail, directories, address book, and ip telephony; + +l) grant to MLX, to the extent that MLX requires access to HCI logos and trademarks (collectively "HCI Marks") the use of certain HCI Marks as necessary for the purposes of fulfilling its obligations under this Agreement. MLX assures that the HCI Marks are used in accordance with HCI's logo usage guidelines as provided by HCI from time to time. Without limiting the generality of the foregoing, MLX agrees: + + (i) that HCI is the owner of the HCI Marks and the goodwill and reputation associated therewith; + + (ii) not to contest the validity of the HCI Marks or HCI's title thereto; + + (iii) that MLX acquires no right, title or interest in the HCI Marks, and any and all goodwill associated with the HCI Marks enures exclusively to the benefit of HCI; + + (iv) to notify HCI promptly of any attempt by any third party to use the HCI marks, or any variation or imitation thereof of which MLX becomes aware; + + (v) at HCI's expense, to fully co-operate with HCI and execute such documents and at the request of HCI to do such acts and things as may be reasonably necessary or desirable to restrain such use; and + +m) ensure that in the event that it enters into an electronic commerce + +Source: HEALTHCENTRAL COM, S-1/A, 11/8/1999 + + + + + + agreement with a third party for the sale of goods on the Co-Branded Site that all agreements with the third parties shall ensure that such third party shall be wholly responsible for all products and transactions that may occur on the Co-Branded Site, that all such transactions shall comply with all applicable Canadian and US laws and regulations, including privacy laws and including compliance with MediaLinx's standards and guidelines, and ensure that such third party provides a full indemnity to MediaLinx and HCI in respect of any and all transactions and products that may be hosted on the Co-Branded Site. + +4. ADVERTISING + +Subject to paragraph 6, MediaLinx shall be entitled to sell advertising and sponsorships on all pages of the Co-Branded Site to Canadian advertisers (for the purposes of this Agreement "Canadian advertisers" shall be advertisers with substantial places of business in Canada) and HCI shall be entitled to sell advertising and sponsorships on all pages of the Co-Branded Site to US advertisers (for the purposes of this Agreement, US advertisers shall be advertisers with substantial places of business in the United States). All sponsorship and advertising package deals for the Co-Branded Site will be mutually agreed upon by the parties and shall abide by MediaLinx's and HCI's standard advertising agreement and Canadian and U.S. advertising regulations and standards. Any excess inventory that has not been sold is available to be sold by either party. Neither party shall permit advertising on the Co-Branded Site from an entity which is a competitor to the other party. For the purposes of this Agreement, a "competitor" to MediaLinx shall be an Internet portal web site and/or an internet service provider. For the purposes of this Agreement, a "competitor" to HCI shall be a consumer health based web site. The parties shall define a plan in writing prior to the Launch setting out how the Parties shall work together to jointly sell advertising, serve the advertising and track the advertising inventory on the Co-Branded Site. + + 4 + +5. E-COMMERCE + +Subject to paragraph 6, MediaLinx and HCI shall be entitled to negotiate e- commerce relationships which shall reside on the Co-Branded Site. In addition to the terms and conditions detailed in paragraphs 2(e) and 3(m), both parties acknowledge and agree that any e-Commerce offering must be able to offer pricing in Canadian dollars and provide shipping across Canada, unless otherwise mutually agreed to in writing. In addition, all products offered through the Co- Branded Site must abide by all Canadian laws and regulations. The cost of integrating any e-Commerce relationship will be borne by the entity that brought the relationship. Any and all marketing activities and design of an e-Commerce system shall be approved by both parties. + +6. FINANCIALS + +(a) HCI shall pay MLX a guaranteed fixed sum of [*] US per annum during the Initial Term of this Agreement to be paid out as a monthly payment of [*] US (the "Monthly Payment"). This Monthly Payment shall be due by the 10th day of each month; + +(b) HCI shall be entitled to all net revenue generated from advertising and e- commerce transactions generated by Canadian companies that may take place on the Co-Branded Site up to and including [*] US in any given year. Thereafter, any net revenues exceeding [*] US shall be shared fifty-fifty between the parties (50% MediaLinx--50% HCI). HCI shall be entitled to all proceeds generated from US companies on the Co-Branded Site. "Net revenue" is defined as revenue less: 1) third party expenses directly related to the acquisition of the revenue; for example, advertising broker commissions and advertising management services, and 2) internally paid commissions for selling the advertisement and/or sponsorship; + +(c) Both Parties shall keep true and accurate books and records of all revenue generated as a result of the Co-Branded Site. Either Party shall have the right from time to time to audit and make extracts of the books and records of the other, insofar as said books or records pertain to the terms of this Agreement. Any such audit shall take place upon not less than seven (7) days advance written notice, during normal business hours of normal business days and at reasonable intervals. Any such audit shall be at the + +Source: HEALTHCENTRAL COM, S-1/A, 11/8/1999 + + + + + + requesting Party's expense, unless the audit determines that the other party has underpaid by 10% or more. In the event that the calculation of payments herein is determined by a computer-based system, then the "books and records" shall include, without limitation, the machine-sensible data (e.g. punch cards, magnetic tapes, discs; and + +(d) Both Parties shall provide the other with quarterly accounting reports as necessary. The quarterly reporting periods end September 30th and December 31st, 1999, March 31st, 2000, and June 30th, 2000. Applicable remittances and accounting reports will follow under separate cover within sixty (60) days of the end of each quarter. + +[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. + + 5 + +7. CUSTOMER INFORMATION + +Any and all customer data that is collected from the Co-Branded Site shall be collected and used in accordance with Canadian federal and provincial laws and U.S. Federal and State laws and both MediaLinx and HCI privacy guidelines and MediaLinx and HCI shall each own an undivided interest in such data. MediaLinx will not have access to the HCI Personal Health Records (being the longitudinal repository of personal health information about users of the Co-Branded Site) during or after the Term of this Agreement. During the Term of this Agreement and for a period of six (6) months thereafter, MediaLinx shall not use or publicly disclose the data collected from users of the Co-Branded Site if such use is for the purpose of providing health information, advertisements, or products that compete with those that reside on the Co-Branded Site. In other instances, MediaLinx shall be entitled to use or publicly disclose the data collected subject to privacy guidelines noted above. + +In addition to the foregoing, HCI shall ensure that the Co-Branded Site is integrated into the Sympatico site-wide registry in order for users to have a single login access for all Sympatico.ca and Sympatico co-branded web sites. + +8. PAGE VIEWS + +Both MediaLinx and HCI shall be entitled to count the page views on the Co- Branded Site. In the event that it becomes necessary to have only one party count the number of page views on the Co-Branded Site, due to third party reporting, regulatory and/or legal requirements, HCI shall be entitled to count one hundred percent (100%) of the content page views of the Co-Branded Site and MLX shall be entitled to count one hundred percent (100%) of the HealthyWay discussion forum page views and one hundred percent (100%) of the page views on the Sympatico Health home page. + +9. EXCLUSIVITY + +During the Term of the Agreement, and subject to the following requirements respecting Canadian content levels as set out in paragraphs 3(f), (g) and (h), HCI shall be the exclusive health content partner in the health section of the Sympatico web site, provided however, that nothing contained herein shall prevent MediaLinx from entering into an agreement with other parties for: i) a health based web directory; or ii) other health related content whose content does not compete with the content contained on the Co-Branded Site; which in no event shall receive no more than one fifth (1/5th) of the promotion and which shall constitute no more than one fifth (1/5th) of the total health related content which resides on the home page of the Sympatico Health section. In the event that MediaLinx obtains a web guide from a third party, MediaLinx and HCI shall discuss how to present both web guides to the user, and make best effort to agree to the kind of experience that the user shall have when utilizing the new web guide. If, at any time during the Term of this Agreement, HCI fails to meet the content requirements set out in paragraphs 3(f), (g) and (h), HCI shall no longer be entitled to be the exclusive health content partner in the health section of the Sympatico web site. HCI shall not either directly or indirectly license or deliver content to or carry on or be engaged with any other Canadian portal web site, being a Web site which aggregates and markets a variety of content directed to multiple communities of interest and which offers products, + +Source: HEALTHCENTRAL COM, S-1/A, 11/8/1999 + + + + + +tools and services to a broad base of Canadian end users. + + 6 + +10. BRANDING & COMMUNICATIONS + +During the first six (6) months from the Launch date, the primary branding for the Co-Branded Site shall remain HealthyWay. In addition to the foregoing and subject to mutual design approval, a "Powered By HealthCentral" or such other appropriate tag line shall appear on the Co-Branded Site and shall be approximately 80% of the font size of the HealthyWay title and will be close to the HealthyWay brand. Thereafter, the HealthyWay and Health Central trademarks shall be co-branded in a mutually agreed upon method. The URL for the Co-Branded Site shall remain healthyway.sympatico.ca. A separate redirect URL may be set up for the Co-Branded Site, e.g. healthcentral.sympatico.ca. + +All electronic communications to the users of the Co-Branded Site shall be jointly developed, co-branded with each party's respective marks and shall be mutually agreed upon. + +11. TERM & TERMINATION + +11.1 Term + +The term of this Agreement shall be for a period of two (2) years (the "Term"). The effective date of the start of the Term will be from the Launch Date. + +11.2 Termination + +(a) Either Party may terminate this Agreement upon 30 days prior written notice to the other Party if 1) such other Party breaches any material term of this Agreement, unless such breach is cured within 30 days; or 2) if any of the terms of this Agreement that require mutual approval are not mutually agreed to; + +(b) This Agreement may be terminated by a Party immediately, without notice: + + (i) upon the institution by or against the other Party of insolvency, receivership, or bankruptcy proceedings or any other proceedings for the settlement of the other Party's debts, if such proceedings are not dismissed within sixty (60) days; + + (ii) upon the other Party making an assignment for the benefit of creditors; or + + (iii) upon the other Party's dissolution; + +(c) Either party may terminate this Agreement upon 30 days written notice if either Party's corporate structure has undergone a material ownership change such that its corporate interests are then in conflict with the corporate interests of the other Party; and + +(d) Upon termination or expiration of this Agreement for any reason: + + (i) the Parties shall immediately cease using the Marks of the other Party; + + (ii) the Parties shall immediately return to each other all property of the other and cease using or distributing all advertising or promotional materials, if any, containing references to the other Party or the other Party's product; + + (iii) the Parties shall remove all special links made pursuant to this Agreement from their respective products of the other Party; and + + (iv) each Party shall pay to the other Party all outstanding amounts which have accrued and are properly owing, including without limitation, any New Account customer commission payments or net advertising revenue owed outstanding together with any appropriate final reports. + + 7 + +Source: HEALTHCENTRAL COM, S-1/A, 11/8/1999 + + + + + +11.3 The exercise of a right of termination or other right or remedy in connection with this Agreement shall be without prejudice to any other right or remedy to which the terminating party may be entitled under this Agreement or applicable law. + +12. REPRESENTATIONS & WARRANTIES + +(a) MLX's Representations and Warranties. + +MLX represents and warrants that: + +(i) it has full right, power and authority to enter into and be bound by the terms and conditions of this Agreement and to perform its obligations under this Agreement, without the approval or consent of any other party; + +(ii) it has sufficient right, title and interest in and to the rights granted to HCI pursuant to this Agreement to enter and perform this Agreement and to enable HCI to perform under this Agreement; + +(iii) it owns all intellectual property in and to the MLX Marks and the Sympatico Content, including but not limited to any and all creative advertisement content, or has obtained all necessary licenses, clearances, assignments and waivers in respect of any and all intellectual property used in the Sympatico Content, including without limitation waivers of moral rights necessary to publish, license and distribute world-wide; + +(iv) the use, reproduction, distribution or transmission of the Sympatico Content will not violate any laws including criminal laws, commercial laws, or any rights of any third parties including, but not limited to such violations as infringement or misappropriation of copyright, patent, trademark, trade defamation, invasion of privacy or rights of celebrity, violation of any anti-discrimination law or regulation, or any other right of any person or entity; + +(v) it has all necessary skills and materials necessary to provide its contributions to the Co-Branded Site as contemplated by this Agreement. MLX shall perform the services described herein in a timely fashion with all due skill, competence and diligence and the quality of the Co- Branded Site shall meet both HCI's and MLX's standards of high quality and excellence; + +(vi) that the information contained in the MLX marks and the MLX content is accurate, does not contain any material that is libelous, obscene, misleading or otherwise harmful. + +(b) HCI's Representations and Warranties. + +HCI represents and warrants that: + +(i) it has full right, power and authority to enter into and be bound by the terms and conditions of this Agreement and to perform its obligations under this Agreement, without the approval or consent of any other party; + +(ii) it has sufficient right, title and interest in and to the rights granted to MLX pursuant to this Agreement to enter and perform this Agreement and to enable MLX to perform under this Agreement; + +(iii) it owns all intellectual property in and to the HCI Marks and all content HCI contributes to the Co-Branded Site (the "HCI Content") including but not limited to any and all creative + + 8 + + advertisement content, or has obtained all necessary licenses, clearances, assignments and waivers in respect of any and all intellectual property used in the HCI Marks and the HCI Content, including without limitation waivers of moral rights necessary to + +Source: HEALTHCENTRAL COM, S-1/A, 11/8/1999 + + + + + + publish, license and distribute world-wide; + +(iv) the use, reproduction, distribution or transmission of the HCI Marks and HCI Content will not violate any laws including criminal laws, commercial laws, or any rights of any third parties including, but not limited to such violations as infringement or misappropriation of copyright, patent, trademark, trade defamation, invasion of privacy or rights of celebrity, violation of any anti-discrimination law or regulation, or any other right of any person or entity; + +(v) the Co-Branded Site will function, operate and perform in all material respects in accordance with the requirements described or incorporated in the Agreement; + +(vi) it has all necessary skills and materials necessary to provide its contributions to the Co-Branded Site as contemplated by this Agreement. HCI shall perform the services described herein in a timely fashion with all due skill, competence and diligence and the quality of the Co- Branded Site shall meet both HCI's and MLX's standards of high quality and excellence; + +(vii) that no advertisement submitted to MLX hereunder shall make use of any subliminal technique and holds MLX and its affiliated and related companies harmless against any loss or damage arising from the storage and/or use of any and all advertising. HCI warrants that any and all advertising that it submits complies with advertising standards in Canada, including those of MLX and that the use, reproduction, distribution, or transmission of such advertising will not violate any criminal laws, commercial laws or any rights of any third parties, including, but not limited to, such violations as infringement or misappropriation of copyright, patent, trademark, trade secret, music, image, video/full motion video or other proprietary or property right, false advertising, unfair competition, defamation, invasion of privacy or rights of celebrity, property right, false advertising, unfair competition, defamation, invasion of privacy or rights of celebrity, violation of any anti-discrimination law or regulation, or any other right of any person or entity; + +(viii) that the Co-Branded Site will function, operate and perform in all material respects in accordance with the requirements described in the Agreement; and + +(vix) that the information contained in the HCI Marks and the HCI Content is accurate, does not contain any material that is libelous, obscene, misleading or otherwise harmful. + +13. NO ADDITIONAL WARRANTIES + +a) Except as specifically provided herein or as agreed to in writing by the Parties, the services provided under this Agreement are not guaranteed and are provided "as is" and MLX gives no representations, warranties or conditions of any kind, express or implied, including without limitation warranties as to insertion, display or loading of any advertisement, sponsorship or integrated branded search engine uninterrupted or error free operation of the Sympatico Web Site, any advertisement, sponsorship, integrated branded search engine or link, merchantability, quality or fitness for a particular purpose and those arising by statute or otherwise, or from a course of dealing or usage of trade; and + + 9 + +b) Except as specifically provided herein or as agreed to in writing by the parties: 1) the services provided under this Agreement are not guaranteed and are provided "as is"; and 2) HCI gives no representations, warranties or conditions of any kind, express or implied, including without limitation warranties as to: insertion, display or loading of any advertisement, sponsorship or integrated branded search engine uninterrupted or error free operation of the co-branded Web Site, any advertisement, sponsorship, integrated branded search engine or link, merchantability, quality or fitness for a particular purpose and those arising by statute or otherwise, or from a course of dealing or usage of trade. + +14. INDEMNIFICATION + +Source: HEALTHCENTRAL COM, S-1/A, 11/8/1999 + + + + + +(a) By MLX: MLX agrees to indemnify and hold harmless HCI and its employees, representatives, agents and affiliates from any and all liability, loss, claims, damages or causes of action (each a "Claim"), including reasonable legal fees and expenses that may be incurred by, arising out of or relating to any claim that the MLX Marks or Sympatico Content or any MLX developed advertising infringes in any manner any copyright, patent, trademark, trade secret or any other intellectual property right of any third party; + +(b) By HCI: HCI agrees to indemnify and hold harmless MLX and its employees, representatives, agents and affiliates from any Claim including reasonable legal fees and expenses that may be incurred by, arising out of or relating to any third party claim that the HCI Marks or HCI Content or any HCI developed advertising infringes in any manner any copyright, patent, trademark, trade secret or any other intellectual property right of any third party; and + +(c) Procedure: All indemnification obligations under Section 14, shall be subject to the following requirements: + + (i) the indemnified party shall provide the indemnifying party with prompt written notice of any Claim; + + (ii) the indemnified party shall permit the indemnifying party to assume and control the defense of any action upon the indemnifying party's written acknowledgment of the obligation to indemnify; and + + (iii) the indemnified party shall not enter into any settlement or compromise of any Claim without the indemnifying party's prior written consent, which shall not be unreasonably withheld. + + In addition, the indemnified party may, at its own expense, participate in its defense of any Claim. In the event that the indemnifying party assumes the defense of any such claim, the indemnifying party shall have no liability for legal fees and costs incurred by the indemnified party. + +15. LIMITATION OF LIABILITY + +EXCEPT WITH RESPECT TO THE INDEMNITY OBLIGATIONS IN SECTION 14, THE CONFIDENTIALITY OBLIGATIONS UNDER SECTION 16, AND THE YEAR 2000 COMPLIANCE OBLIGATIONS UNDER SECTION 20, NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS AGREEMENT, UNDER NO CIRCUMSTANCES SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY WITH RESPECT TO THE SUBJECT MATTER OF THIS AGREEMENT UNDER ANY CONTRACT, NEGLIGENCE, + + 10 + +STRICT LIABILITY, TORT OR OTHER LEGAL OR EQUITABLE THEORY FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL OR EXEMPLARY DAMAGES (INCLUDING, WITHOUT LIMITATION, LOSS OF REVENUE OR GOODWILL OR ANTICIPATED PROFITS OR LOST BUSINESS), EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. + +16. CONFIDENTIALITY + +Each Party shall keep confidential any information, data and reports obtained in connection with this Agreement, unless such information has been rightfully obtained from a third party or is generally available to the public, or as must be disclosed by law. Upon termination of this Agreement, each of the parties (the "Receiving Party") shall return to the other party (the "Disclosing Party") any records or copies thereof which it may have obtained from the Disclosing Party in connection with its review of the Disclosing Party's business, other than information otherwise rightfully obtained by Receiving Party, acting in good faith, from someone other than the Disclosing Party or generally available to the public. Each party shall hold the terms and provisions of this Agreement confidential and shall not disclose its terms to any person except to its management. Notwithstanding the foregoing, this Agreement and the LOI is subject to the terms and conditions of the Confidentiality and Non-Disclosure Agreement signed between the Parties dated May 3rd, 1999. + +17. NO PUBLIC NOTICE + +Source: HEALTHCENTRAL COM, S-1/A, 11/8/1999 + + + + + +No public announcement of the proposed transaction will be made by either Party unless the timing and content have been agreed upon in advance by both parties, except as may otherwise be required by law. It is understood though that MediaLinx may discuss this arrangement with its Sympatico Internet service providers and affiliates to the extent necessary to meet the proposed time lines. + +18. COSTS + +Unless agreed to otherwise, each party will pay for its own costs and expenses in connection with this Agreement and the proposed activities contemplated herein, without limitation, legal fees, brokers, accountants and other professional advisors. + +19. INDEPENDENT CONTRACTORS + +It is the intention of MLX and HCI that MLX and HCI are, and shall be deemed to be, independent contractors with respect to the subject matter of this Agreement, and nothing contained in this Agreement shall be deemed or construed in any manner whatsoever as creating any partnership, joint venture, employment, agency, fiduciary or other similar relationship between MLX and HCI. + + 11 + +20. YEAR 2000 COMPLIANCE + +Both MLX and HCI represent and warrant that their contributions to the Co- Branded Site are designed to be used prior to, during, and after the calendar year 2000 AD and will operate during each such time period without error relating to date data, specifically including any error relating to, or the product of, date data which represents or references different centuries or more than a century. Without limiting the generality of the foregoing, the Co-Branded Site: (i) will not abnormally end or provide invalid or incorrect results as a result of date data, specifically including date data which represents or references different centuries or more than one century; (ii) has been designed to ensure year 2000 compatibility, including, but not limited to, date data century recognition, calculations which accommodate same century and multi- century formulas and date values, and date data interface values that reflect the century; and (iii) includes "Year 2000 Capabilities". For the purposes of this Agreement, "Year 2000 Capabilities" means the Co-Branded Site (i) will manage, calculate, sequence, compare and manipulate data involving dates, including single century formulas and multi-century formulas, including leap years and will not cause an abnormally ending scenario within the application or generate incorrect values or invalid results involving such dates; (ii) provides that all date-related user interface functionalities and data fields include the indication of century; and (iii) provides that all date-related data interface functionalities include the indication of century. + +While HCI asserts that its code and scripts will execute properly, as described above, and that HCI uses third party software that specifies Y2K compliance, we can not guarantee that all third party software will perform as specified by the manufacturer. Should a third party product fail to meet its Y2K compliance policy, we will work with the vendor to remedy the problem in a timely fashion. HCI will ensure that it complies with any third party recommendations that are necessary for Y2K compliance. + +21. GOVERNING LAW + +This Agreement shall be governed by and interpreted and enforced in accordance with the laws of the Province of Ontario and the Parties agree to abide by the jurisdiction of the Courts of Ontario. + +22. ENTIRE AGREEMENT + +This Agreement, together with any and all attached exhibits and/or schedules, represents the entire agreement between MLX and HCI with respect to the subject matter herein and shall supercede all prior agreements, communications and understanding of the Parties, oral and/or written. + +23. LEGAL FEES + +The prevailing Party in any legal action brought by one Party against the other and arising out of this Agreement shall be entitled, in addition to any other + +Source: HEALTHCENTRAL COM, S-1/A, 11/8/1999 + + + + + +rights and remedies it may have, to reimbursement for its expenses, including court and arbitration costs, as well as reasonable legal fees. + + 12 + +24. SUCCESSORS AND ASSIGNS + +Except as provided in this Section, neither Party may assign its rights or obligations under this Agreement without the prior written consent of the other Party, which shall not be unreasonably withheld. Notwithstanding the foregoing, either party shall be permitted to assign this Agreement and any of its rights and obligations hereunder to an affiliate or related company or to a purchaser of all or substantially all of its Internet business, without obtaining the prior written consent of the other party. + +25. FORCE MAJEURE + +Neither Party shall be liable for failure to perform or delay in performing any obligation under this Agreement if such failure or delay is due to fire, flood, earthquake, strike, war (declared or undeclared), embargo, blockade, legal prohibition, governmental action, riot, insurrection, damage, destruction or any other similar cause beyond the control of such Party. + +26. NOTICES + +All notices, requests, consents and other communications which are required or permitted hereunder shall be in writing and shall be deemed given (a) when delivered in person at the time of such delivery or by telecopy with confirmed receipt of transmission at the date and time indicated on such receipt or (b) when received if given by an internationally recognized express courier service to the address specified below. Notice of change of address shall be given in the same manner as other communications. + +If to HCI: If to MediaLinx: - ---------- ---------------- + +HealthCentral.com Inc. MediaLinx Interactive, L.P. 2600 Tenth Street 20 Richmond Street East, Suite 600 Berkeley, CA Toronto, Ontario, M5C 3B5 94710 Attn: Director of Content Fax: (416) 350-1516 with a copy to Legal Department: Fax No.: (416) 350-5212 + +27. COUNTERPARTS + +This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which, taken together, shall constitute one and the same instrument. + +28. HEADINGS + +The section and article headings contained in this Agreement are included for convenience only, and shall not limit or otherwise affect the terms of this Agreement. + + 13 + + Schedule "1" + +MLX will run [*] advertising banners, promoting the Co-Branded Site each month, which shall run throughout the Sympatico.ca Site. + +MLX will promote the Co-Branded Site on the Sympatico.ca homepage in a frequent and timely fashion. + +MLX will promote the Sympatico Health Site through Sympatico.ca house advertising, from time to time. + +MLX will provide contextual integration of Health content into other areas of + +Source: HEALTHCENTRAL COM, S-1/A, 11/8/1999 + + + + + +Sympatico.ca, as appropriate. + +MLX will provide a persistent link, in fold, from the Sympatico Health Site home page to the Co-Branded Site. + +MLX will provide a link to the Sympatico Health Site home page from the Sympatico.ca home page. + +[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. 14 + + Schedule "2" + +MLX will use all commercially reasonable efforts to maintain the user traffic at a monthly minimum of: + + . [*] page views three (3) months after the launch of the Co-Branded Site; + + . [*] page views six (6) months after the launch of the Co-Branded Site; and + + . [*] page views twelve (12) months after the launch of the Co-Branded Site. + +[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. + + 15 + + Schedule "3" + +HCI shall ensure that Canadian content and context is promoted and maintained within the Co-Branded Site in accordance with the following: + +Ensure that Canadian spelling is used throughout the site where possible. Ensure that non-relevant or inappropriate information is either removed or put into context for a Canadian user. Ensure that Canadian health information sourced from Canadian content providers is added to the site, where possible. + +Issues related to access to services: Canadian public health care system There is little notion of "managed care" in Canada Inclusion of Canadian "self help" resources + +Health related law & policy: Federal and provincial government funding of healthcare and the existence of a social safety net in Canada Allowed distribution of drugs Different roles related to pharmaceutical advertising + +Societal context of Canada: Canada's multicultural make up (e.g. Less Hispanics, more Asians) Likelihood of different health risk factors for Canadians Different behaviour of the Canadian population (e.g. travelling south for the winter, "snowbirds") Different health events e.g. "Heart month" + +Technicalities: Differences in drug names Canadian currency Metric system for measurement + +The Canadian voice: Important to highlight Canadian health experts e.g. Canadian health professionals, researchers, companies "local" events e.g. hospital closures, labour issues + + 16 + +Source: HEALTHCENTRAL COM, S-1/A, 11/8/1999 + + + + + + Schedule "4" + +HCI will provide MLX with usage statistics in the following 2 formats: + +1) access to real time online statistics through a web browser including a number of preprogrammed usage reports, and + +2) a format mutually agreed to by HCI and MLX + + 17 + +Source: HEALTHCENTRAL COM, S-1/A, 11/8/1999 \ No newline at end of file diff --git a/full_contract_txt/HerImports_20161018_8-KA_EX-10.14_9765707_EX-10.14_Maintenance Agreement.txt b/full_contract_txt/HerImports_20161018_8-KA_EX-10.14_9765707_EX-10.14_Maintenance Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..97f648e738d38ecba02174357f8f926d0dea36b2 --- /dev/null +++ b/full_contract_txt/HerImports_20161018_8-KA_EX-10.14_9765707_EX-10.14_Maintenance Agreement.txt @@ -0,0 +1,43 @@ +Exhibit 10.14 SOFTWARE MAINTENANCE AGREEMENT This Software Maintenance Agreement (the "Agreement") is entered into as of October 13, 2016, between Leader Act Ltd HK ("LEADER"), a Nevada Corporation, (hereinafter referred to as "Leader"), and EZJR, Inc. a Nevada corporation, (hereinafter referred to as "EZJR"). WHEREAS, EZJR currently owns a Customer Relationship Management ("CRM") software program as developed by LEADER; and WHEREAS, upon the purchase of the software EZJR entered into an agreement for LEADER to maintain the software for a period of two years after which LEADER was be paid by EZJR to service and maintain the software; and WHEREAS, this previous agreement expired on May 28, 2016; NOW THEREFORE, in consideration of the mutual agreements, representations and warranties in this Agreement, the parties agree as follows: 1. EXTENSION OF SERVICE AGREEMENT. Subject to all other terms and conditions set forth herein, as of the date of this agreement, LEADER maintain the software for an additional five years. 2. COMPENSATION TO LEADER. The compensation to LEADER shall be: 3,000,000 shares of EZJR's unregistered restricted common stock which shall be issuable upon the closing; 3. LEADER' REPRESENTATIONS AND WARRANTIES. LEADER represents and warrants to EZJR as follows: A. LEADER is a corporation duly organized, validly existing, and in good standing under the laws of the Nevada. Leader has all requisite corporate power and authority to enter into this Agreement and perform its obligations hereunder. B. The execution, delivery, and performance of this Agreement has been duly authorized and approved by the Board of Directors of LEADER, and this Agreement constitutes a valid and binding Agreement of LEADER in accordance with its terms. C. LEADER has not employed any broker or finder in connection with the transaction contemplated by this Agreement and has taken no action that would give rise to a valid claim against any party for a brokerage commission, finder's fee, or other like payment. D. LEADER has not employed any broker or finder in connection with the transactions contemplated by this Agreement, or taken action that would give rise to a valid claim against any party for a brokerage commission, finder's fee, or other like payment. + +Source: HER IMPORTS, 8-K/A, 10/18/2016 + + + + + + F. The execution and delivery of this Agreement by LEADER and the consummation of the contemplated transactions, will not result in the creation or imposition of any valid lien, charge, or encumbrance on any of the Assets, and will not require the authorization, consent, or approval of any third party, including any governmental subdivision or regulatory agency. G. LEADER has no knowledge of any claim, litigation, proceeding, or investigation pending or threatened against LEADER or its Assets that might result in any material adverse change in the business or condition of the Assets being conveyed under this Agreement. H. None of the representations or warranties of LEADER contain or will contain any untrue statement of a material fact or omit or will omit or misstate a material fact necessary in order to make statements in this Agreement not misleading. LEADER knows of no fact that has resulted, or will result in a material change in the business, operations, or assets of LEADER. 4. REPRESENTATIONS OF EZJR. EZJR represents and warrants as follows: A. EZJR is a corporation duly organized, validly existing, and in good standing under the laws of the State of Nevada. EZJR has all requisite corporate power and authority to enter into this Agreement and perform its obligations hereunder. B. The execution, delivery, and performance of this Agreement has been duly authorized and approved by the Board of Directors of EZJR, and this Agreement constitutes a valid and binding Agreement of EZJR in accordance with its terms. C. EZJR has not employed any broker or finder in connection with the transaction contemplated by this Agreement and has taken no action that would give rise to a valid claim against any party for a brokerage commission, finder's fee, or other like payment. D. None of the representations or warranties of EZJR contain or will contain any untrue statement of a material fact or omit or will omit or misstate a material fact necessary in order to make the statements contained herein not misleading. 3. INDEMNIFICATION AND SURVIVAL. All representations and warranties made in this Agreement shall survive the Closing of this Agreement, except that any party to whom a representation or warranty has been made in this Agreement shall be deemed to have waived any misrepresentation or breach of representation or warranty of which such party had knowledge prior to Closing. Any party learning of a misrepresentation or breach of representation or warranty under this Agreement shall immediately give written notice thereof to all other parties to this Agreement. The representations and warranties in this Agreement shall terminate one year from the Closing Date, and such representations or warranties shall thereafter be without force or effect, except any claim with respect to which notice has been given to the party to be charged prior to such expiration date. LEADER hereby agrees to indemnify and hold EZJR, it successors, and assigns harmless from and against any and all damage or deficiency resulting from any material misrepresentation, breach of warranty or covenant, or nonfulfillment of any agreement on the part of LEADER under this Agreement. + +Source: HER IMPORTS, 8-K/A, 10/18/2016 + + + + + + 4. GOVERNING LAW. This Agreement and any matters arising out of or related to this Agreement will be governed by the laws of the State of Nevada. If any action is brought among the parties with respect to this Agreement or otherwise, by way of a claim or counterclaim, the parties agree that in any such action, and on all issues, the parties irrevocably waive their right to a trial by jury. Exclusive jurisdiction and venue for any such action shall be the State Courts of Nevada. 5. ENTIRE AGREEMENT. This Agreement contains the entire agreement among the parties, and supersedes all prior agreements, representations and understandings of the parties, relating to the subject matter of this Agreement. 6. FURTHER ACTIONS. Each party agrees that after the delivery of this Agreement it or he will execute and deliver such further documents and do such further acts and things as another party may reasonably request in order to carry out the terms of this Agreement. 7. AMENDMENT. No supplement to or amendment of this Agreement will be binding unless executed in writing by LEADER and EZJR. 8. SUCCESSORS AND ASSIGNS. This Agreement will be binding on, and will inure to the benefit of, the parties and their respective successors and assigns, and shall not confer any rights or remedies on any other Persons. 9. COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which will be deemed a valid, original agreement, but all of which together will constitute one and the same instrument. 10. SEVERABILITY. If any provision of this Agreement or its application to any Person or circumstances is held to be unenforceable or invalid by any court of competent jurisdiction, its other applications and the remaining provisions of this Agreement will be interpreted so as best reasonably to effect the intent of the parties. 11. ATTORNEYS' FEES. Each party will pay its or his own legal fees and other expenses in connection with the preparation of this Agreement and the sale of Assets in accordance with this Agreement. However, if any legal action or other proceeding is brought for the enforcement of this Agreement, or because or arising out of an alleged dispute, breach, default or misrepresentation in connection with any of the provisions of this Agreement, the prevailing party will be entitled to recover reasonable attorney's fees and other costs incurred in that action or proceeding, in addition to any other relief to which it or he may be entitled. 12. NOTICES. All notices, requests, demands, and other communications required or permitted hereunder will be in writing and will be deemed to have been duly given when delivered by hand, by overnight courier, or fax, or two days after being mailed by certified or registered mail, return receipt requested, with postage prepaid. 13. WAIVERS. Any provision of this Agreement may be waived at anytime by the party entitled to the benefit thereof by a written instrument executed by the party or by a duly authorized officer of the party. No waiver of any of the provisions of this Agreement will be deemed, or will constitute, a waiver of any other provision, whether or not similar, nor will any waiver constitute a continuing waiver. + +Source: HER IMPORTS, 8-K/A, 10/18/2016 + + + + + + SIGNATURES EZJR, INC. LEADER ACT LTD HK By: /s/ Barry Hall /s/ Aymen Boughanmi Barry Hall Aymen Boughanmi Chief Executive Officer President + +Source: HER IMPORTS, 8-K/A, 10/18/2016 + + + + + + Exhibit A Customer Relationship Management System Description The Customer Relationship Management ("CRM") system entails all aspects of interaction that a company has with its customer, whether it is sales or service-related. It also provides a greater understanding of the customer and helps manage customer data and all interaction with the customer. Advantages and features of the CRM are as following: ● Enhanced customer relationship management including retention tools and fraud prevention. ● Recurring billing feature that allows for fully automated billing and tools to determine approval and decline rates and automated retries of declines. ● Profit management tools including affiliate commission tracking, price point testing and indemnification of revenue loss causes. ● Gateway integration and merchant account load balancing. ● Improved affiliate management and affiliate fraud detection. ● Better reporting and performance tracking. + +Source: HER IMPORTS, 8-K/A, 10/18/2016 + + + + + + + +Source: HER IMPORTS, 8-K/A, 10/18/2016 \ No newline at end of file diff --git a/full_contract_txt/HertzGroupRealtyTrustInc_20190920_S-11A_EX-10.8_11816941_EX-10.8_Trademark License Agreement.txt b/full_contract_txt/HertzGroupRealtyTrustInc_20190920_S-11A_EX-10.8_11816941_EX-10.8_Trademark License Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..fd74382e1b6f3c5e69b8ee08a98cce1eb2dd5a26 --- /dev/null +++ b/full_contract_txt/HertzGroupRealtyTrustInc_20190920_S-11A_EX-10.8_11816941_EX-10.8_Trademark License Agreement.txt @@ -0,0 +1,65 @@ +Exhibit 10.8 FORM OF TRADEMARK LICENSE AGREEMENT This TRADEMARK LICENSE AGREEMENT ( "Agreement"), is entered into as of September ___, 2019 ("Effective Date"), by and between HERTZ INVESTMENT GROUP, LLC, a Delaware limited liability company, having a principal place of business at 21860 Burbank Blvd., Suite 300 South, Woodland Hills, CA 91367 ("Licensor"), and HERTZ GROUP REALTY TRUST, INC., a Maryland corporation, having a principal place of business at 21860 Burbank Blvd., Suite 300 South, Woodland Hills, CA 91367 ("Licensee" and together with Licensor, the "Parties"), and the Parties agree as follows: ARTICLE 1. BACKGROUND AND DEFINITIONS 1.1 Licensor has adopted, is using, and is the owner of all right, title, and interest in the Licensed Mark (as defined in Article 1.6) in the United States for financial services. 1.2 Licensee is a real estate investment trust managed by Hertz Group REIT Advisor, LLC, a Delaware limited liability company (the "Advisor"), an affiliate of Licensor. 1.3 Licensee desires to use the Licensed Mark as part of, and in conjunction with, the trade name Hertz Group Realty Trust, Inc. 1.4 Licensor desires to license the Licensed Mark to Licensee to be used as part of, and in conjunction with, the trade name Hertz Group Realty Trust, Inc., subject to the terms and conditions set forth in this Agreement. 1.5 "Control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a person or entity, whether through the ownership of voting securities, by contract or otherwise. 1.6 "Licensed Mark" means the stylized mark "H", as depicted in the USPTO Registration No. 5,283,875, attached hereto as Exhibit "A" and made a part hereof. 1.7 "Licensed Trade Name" means the corporate name Hertz Group Realty Trust, Inc. and any variation thereof including the term Hertz Group that is used by Licensed Users. 1.8 "Licensed User" and "Licensed Users" means Licensee and Licensee's subsidiaries. ARTICLE 2. LICENSE GRANT AND CONDITIONS OF LICENSED USE 2.1 Licensor hereby grants Licensed Users a nonexclusive, nontransferable, nonsublicensable, royalty-free license, during the term of this Agreement, to use and display the Licensed Trade Name and the Licensed Mark in the United States solely in connection with the Licensee's corporate name and identifying mark. + +LICENSEOR: HERTZ INVESTMENT GROUP, LLC 1 TRADEMARK LICENSE AGREEMENT LICENSEE: HERTZ GROUP REALTY TRUST, INC. + +Source: HERTZ GROUP REALTY TRUST, INC., S-11/A, 9/20/2019 + + + + + +2.2 The Licensed Mark shall remain the exclusive property of Licensor and nothing in this Agreement shall give Licensed Users any right or interest in the Licensed Mark except the licenses expressly granted in this Agreement. 2.3 All of Licensor's rights in and to the Licensed Mark, including, but not limited to, the right to use and to grant others the right to use the Licensed Mark, are reserved by Licensor. 2.4 No license, right, or immunity is granted by either Party to the other, either expressly or by implication, or by estoppel, or otherwise with respect to any trademarks, copyrights, or trade dress, or other property right, other than with respect to the Licensed Trade Name and the Licensed Mark in accordance with Article 2.1 of this Agreement. 2.5 All use of the Licensed Mark by Licensed Users, and all goodwill associated with such use, shall inure to the benefit of Licensor. 2.6 Licensed Users acknowledge that Licensor is the sole owner of all right, title and interest in and to the Licensed Mark, and that Licensed Users have not acquired, and shall not acquire, any right, title or interest in or to the Licensed Mark except the right to use the Licensed Mark in accordance with the terms of this Agreement. 2.7 Licensed Users shall not register the Licensed Mark in any jurisdiction without Licensor's express prior written consent, and Licensor shall retain the exclusive right to apply for and obtain registrations for the Licensed Mark throughout the world. 2.8 Licensed Users shall not challenge the validity of the Licensed Mark, nor shall Licensed Users challenge Licensor's ownership of the Licensed Mark or the enforceability of Licensor's rights therein. 2.9 Licensed Users shall use the Licensed Mark in a form which is in accordance with sound trademark practice so as not to weaken the value of the Licensed Mark. Licensed Users shall use the Licensed Mark in a manner that does not derogate, based on an objective business standard, Licensor's rights in the Licensed Mark or the value of the Licensed Mark, and shall take no action that would, based on an objective standard, interfere with, diminish or tarnish those rights or value. 2.10 Licensed Users agree to cooperate with Licensor's preparation and filing of any applications, renewals or other documentation necessary or useful to protect and/or enforce Licensor's intellectual property rights in the Licensed Mark. 2.10.1 Licensed Users shall notify Licensor promptly of any actual or threatened infringements, imitations or unauthorized uses of the Licensed Mark of which Licensed Users become aware. 2.10.2 Licensor shall have the sole right, though it is under no obligation, to bring any action for any past, present and future infringements of its intellectual property rights in the Licensed Mark. 2.10.3 Licensed Users shall cooperate with Licensor, at Licensor's expense for any out-of-pocket costs incurred by Licensed Users, in any efforts by Licensor to enforce its rights in the Licensed Mark or to prosecute third party infringers of the Licensed Mark. 2.10.4 Licensor shall be entitled to retain any and all damages and other monies awarded or otherwise paid in connection with any such action. + +LICENSEOR: HERTZ INVESTMENT GROUP, LLC 2 TRADEMARK LICENSE AGREEMENT LICENSEE: HERTZ GROUP REALTY TRUST, INC. + +Source: HERTZ GROUP REALTY TRUST, INC., S-11/A, 9/20/2019 + + + + + +ARTICLE 3. TERM AND TERMINATION 3.1 Either Party may terminate this Agreement by giving the other Party thirty (30) days' prior written notice. 3.2 This Agreement and all rights and licenses granted under this Agreement shall terminate as soon as practicable, but no longer than thirty (30) days, after: 3.2.1 Licensee is acquired by a third party; or 3.2.2 Licensor or any affiliate of Licensor ceases to manage Licensee. 3.3 Upon termination of this Agreement, Licensed Users shall immediately cease use of the Licensed Trade Name and Licensed Mark as soon as practicable, but no longer than thirty (30) days, after termination. ARTICLE 4. GENERAL PROVISIONS 4.1 Indemnification. Licensed Users, at Licensed Users' own expense, shall indemnify, hold harmless and defend Licensor, its affiliates, successors and assigns, and its and their directors, officers, employees and agents, against any claim, demand, cause of action, debt, expense or liability (including attorneys' fees and costs), to the extent that the foregoing (a) is based on a claim resulting solely from any service provided or offered by Licensed Users, (b) results from a material breach, or is based on a claim that, if true, would be a material breach, of this Agreement by Licensed Users, or (c) is based upon Licensed Users' unauthorized or improper use of the Licensed Mark. 4.2 LIMITATION OF WARRANTY AND LIABILITY. LICENSOR DOES NOT MAKE WARRANTIES OF ANY KIND, WHETHER EXPRESS, IMPLIED, RELATED TO OR ARISING OUT OF THE LICENSED MARK OR THIS AGREEMENT. 4.2.1 LICENSOR SPECIFICALLY DISCLAIMS ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT AND TITLE, AND ALL OTHER WARRANTIES THAT MAY OTHERWISE ARISE FROM COURSE OF DEALING, USAGE OF TRADE OR CUSTOM. 4.2.2 IN NO EVENT SHALL LICENSOR OR ANY OF ITS DIRECTORS, OFFICERS, EMPLOYEES, LICENSORS, SUPPLIERS OR OTHER REPRESENTATIVES BE LIABLE FOR ANY INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES, OR DAMAGES FOR LOSS OF PROFITS, BUSINESS INTERRUPTION, LOSS OF GOODWILL, COMPUTER FAILURE OR MALFUNCTION OR OTHERWISE, ARISING FROM OR RELATING TO THIS AGREEMENT OR THE LICENSED MARK, EVEN IF LICENSOR IS EXPRESSLY ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. The foregoing limitation of liability and exclusion of certain damages shall apply regardless of the failure of essential purpose of any remedies available to either party. + +LICENSEOR: HERTZ INVESTMENT GROUP, LLC 3 TRADEMARK LICENSE AGREEMENT LICENSEE: HERTZ GROUP REALTY TRUST, INC. + +Source: HERTZ GROUP REALTY TRUST, INC., S-11/A, 9/20/2019 + + + + + +4.3 Non-Transferable Agreement. Licensed Users may not assign this Agreement and/or any rights and/or obligations hereunder without the prior written consent of Licensor and any such attempted assignment shall be void. 4.4 Remedies. Licensed Users acknowledge that a material breach of Licensed Users' obligations under this Agreement would cause Licensor irreparable damage. Accordingly, Licensed Users agree that in the event of such breach or threatened breach, in addition to remedies at law, Licensor shall have the right to enjoin Licensed Users from the unlawful and/or unauthorized use of the Licensed Trade Name and/or the Licensed Mark and other equitable relief to protect Licensor's rights in the Licensed Mark. 4.5 Integration. This Agreement contains the entire agreement of the Parties. No promise, inducement, representation or agreement, other than as expressly set forth herein, has been made to or by the Parties hereto. All prior agreements and understandings related to the subject matter hereof, whether written or oral, are expressly superseded hereby and are of no further force or effect. 4.6 Binding Agreement. This Agreement shall be binding upon the Parties' permitted assigns and successors and references to each Party shall include such assigns and successors. 4.7 Amendment. This Agreement cannot be altered, amended or modified in any respect, except by a writing duly signed by both Parties. 4.8 No Strict Construction. The normal rule of construction to the effect that any ambiguities are to be resolved against the drafting Party shall not be employed in the interpretation of this Agreement. Headings are for reference and shall not affect the meaning of any of the provisions of this Agreement. 4.9 Waiver. At no time shall any failure or delay by either party in enforcing any provisions, exercising any option, or requiring performance of any provisions, be construed to be a waiver of same. 4.10 Governing Law and Jurisdiction. The provisions of this Agreement shall be governed by and construed in accordance with the laws of the State of California (excluding any conflict of law rule or principle that would refer to the laws of another jurisdiction). Each Party hereto irrevocably submits to the jurisdiction of the state and federal courts located in California, in any action or proceeding arising out of or relating to this Agreement, and each Party hereby irrevocably agrees that all claims in respect of any such action or proceeding must be brought and/or defended in any such court; provided, however, that matters which are under the exclusive jurisdiction of the federal courts shall be brought in the Federal District Court for the Central District of California. Each Party hereto consents to service of process by any means authorized by the applicable law of the forum in any action brought under or arising out of this Agreement, and each Party irrevocably waives, to the fullest extent each may effectively do so, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court. + +LICENSEOR: HERTZ INVESTMENT GROUP, LLC 4 TRADEMARK LICENSE AGREEMENT LICENSEE: HERTZ GROUP REALTY TRUST, INC. + +Source: HERTZ GROUP REALTY TRUST, INC., S-11/A, 9/20/2019 + + + + + +4.11 Attorney's Fees. In the event any suit or other legal proceeding is brought for the enforcement of any of the provisions of this Agreement, the Parties hereto agree that the prevailing party shall be entitled to recover from the other party upon final judgment on the merits reasonable attorneys' fees (and sales taxes thereon, if any), including attorneys' fees for any appeal, and costs incurred in bringing such suit or proceeding. 4.12 Relationship of the Parties. Nothing in this Agreement will be construed as creating a joint venture, partnership, or employment relationship between Licensor and Licensee or any of Licensee's subsidiaries. Neither Party will have the right, power or implied authority to create any obligation or duty on behalf of the other Party. 4.13 Notices. Unless otherwise specified in this Agreement, all notices shall be in writing and delivered personally, mailed, first class mail, postage prepaid, or delivered by confirmed electronic or digital means, to the addresses set forth at the beginning of this Agreement and to the attention of the undersigned. Either Party may change the addresses or addressees for notice by giving notice to the other. All notices shall be deemed given on the date personally delivered, when placed in the mail as specified or when electronic or digital confirmation is received. 4.14 Counterparts. This Agreement may be executed in counterparts, by manual or facsimile signature, each of which will be deemed an original and all of which together will constitute one and the same instrument. [Signatures on following page] + +LICENSEOR: HERTZ INVESTMENT GROUP, LLC 5 TRADEMARK LICENSE AGREEMENT LICENSEE: HERTZ GROUP REALTY TRUST, INC. + +Source: HERTZ GROUP REALTY TRUST, INC., S-11/A, 9/20/2019 + + + + + +IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the day and year first above written. LICENSOR LICENSEE HERTZ INVESTMENT GROUP, LLC HERTZ GROUP REALTY TRUST, INC. a Delaware limited liability company a Maryland corporation (Signature) (Signature) John D. Forbess, Executive VP/Secretary John D. Forbess, Executive VP/Secretary + +LICENSEOR: HERTZ INVESTMENT GROUP, LLC Signature Page TRADEMARK LICENSE AGREEMENT LICENSEE: HERTZ GROUP REALTY TRUST, INC. + +Source: HERTZ GROUP REALTY TRUST, INC., S-11/A, 9/20/2019 + + + + + +EXHIBIT "A" USPTO REGISTRATION NO. 5,283,875 See Attached. + +LICENSEOR: HERTZ INVESTMENT GROUP, LLC Exhibit "A" TRADEMARK LICENSE AGREEMENT LICENSEE: HERTZ GROUP REALTY TRUST, INC. + +Source: HERTZ GROUP REALTY TRUST, INC., S-11/A, 9/20/2019 \ No newline at end of file diff --git a/full_contract_txt/HfEnterprisesInc_20191223_S-1_EX-10.22_11931299_EX-10.22_Development Agreement.txt b/full_contract_txt/HfEnterprisesInc_20191223_S-1_EX-10.22_11931299_EX-10.22_Development Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..1904d1451f23bb4d7002c84f5d1e62508eb8497b --- /dev/null +++ b/full_contract_txt/HfEnterprisesInc_20191223_S-1_EX-10.22_11931299_EX-10.22_Development Agreement.txt @@ -0,0 +1,77 @@ +Exhibit 10.22 OUTSOURCE TECHNOLOGY DEVELOPMENT AGREEMENT This Outsource Technology Development Agreement (this "Agreement") is entered into and effective as of this 1s t day of March, 2018 (the "Effective Date") by and between Document Security Systems, Inc., a corporation organized and existing under the laws of the State of New York ("DSS"), and HotApp International Ltd., a corporation organized and existing under the laws of Hong Kong ("Developer"). RECITALS: WHEREAS, DSS is engaged in the business of, among other things, developing and licensing anti-counterfeiting technology, processes and products providing protection against a wide range of threats, including product diversion and counterfeiting, brand infringement, forgery, and unauthorized copying, scanning and photo imaging; WHEREAS, Developer is engaged in the business of, among other things, software development; and WHEREAS, DSS desires to retain Developer for the purpose of assisting DSS in developing an Android software application to be included as part of DSS's AuthentiGuard® Technology suite, and DSS is willing to grant Developer a non-exclusive, limited and non-transferable license for purposes of such development activities. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows: Capitalized terms contained herein shall have the meanings ascribed to them herein, or in Schedule 1 which is annexed hereto and made a part of this Agreement. 1. Development License and Fees. 1.1. Development License. Subject to the terms and conditions set forth herein, DSS hereby grants to Developer, and Developer accepts from DSS, for the Term, a non-exclusive, limited, and non-transferable license to install and use the Technology for the sole purpose of developing the Improvements (as defined hereunder) thereto for the benefit of DSS (the "Technology Development Services License"). 1.2. Development Fees. As payment for Developer's satisfactory performance of the services set forth in Schedule 1 hereto (the "Technology Development Services"), DSS shall pay Developer the sum of US $23,000 per month, for the duration of the Term hereof, with payments to commence on March 1, 2018. 2. Term and Termination. 2.1. Term. The initial term of this Agreement shall commence on the Effective Date, and shall continue thereafter for a period of twelve (12) months (the "Initial Term"). The Initial Term shall automatically renew for one-month periods thereafter unless either party provides 30- days advance notice of termination, unless earlier terminated pursuant to Section 2.2 hereof. For purposes hereof, the Initial Term, together with any extension or renewal terms, shall hereinafter be collectively referred to as the "Term". 2.2. Early Termination. 2.2.1. Either party may terminate this Agreement prior to expiration of the Term: (i) upon thirty (30) days prior written notice, or (ii) immediately upon written notice to the other party if: (a) the other party declares or a petition is filed in any court for insolvency or bankruptcy and such petition is not dismissed in thirty (30) days; (b) the other party reorganizes under the relevant bankruptcy act or any similar statute in such party's jurisdiction of incorporation; (c) the other party consents to the appointment of a trustee in bankruptcy or a receiver or similar entity; or (d) the Developer breaches DSS's Technology or Intellectual Property rights contained herein. 2.2.2. Upon the expiration or termination of this Agreement, (i) the Technology Development Services License granted to Developer hereunder shall immediately cease, and (ii) Developer shall immediately cease use of all proprietary technology files heretofore delivered by DSS and shall deliver to DSS all such proprietary files along with any and all Improvements completed to date by Developer. 1 + +Source: HF ENTERPRISES INC., S-1, 12/23/2019 + + + + + + 3. Proprietary Rights. 3.1. Subject to Developer's expressly granted rights under this Agreement, Developer acknowledges and agrees that DSS shall own all right, title, and interest in and to the Technology, the Improvements, its Intellectual Property, and all future derivative works derived therefrom or developed hereunder. Developer agrees that it will not at any time (i) do or cause to be done any act or thing contesting or in any way impairing any part of such right, title and interest or (ii) represent, expressly or by implication that it has any right, title or interest in or to any of the foregoing other than as expressly set forth herein. 3.2. Developer hereby acknowledges DSS's claim of sole ownership of the Technology, the Improvements, and all associated goodwill. Nothing in this Agreement or in the performance thereof, or that might otherwise be implied by law, shall operate to grant Developer any right, title, or interest in or to the Technology or the Improvements. Developer hereby assigns and shall assign in the future to DSS all rights it may acquire by operation of law or otherwise in the Technology or Improvements, along with the goodwill associated therewith. DSS shall have the sole right to, and in its sole discretion may, commence, prosecute or defend, and control any legal action concerning the Technology and Improvements. Developer may not contest the validity of, by act or omission jeopardize, or take any action inconsistent with, DSS's ownership rights or goodwill in the Technology or Improvements, including any attempted registration of the Technology or Improvements in Hong Kong or in any other legal jurisdiction, or any attempts to license the same to any unauthorized third Person. 4. Definitions. For purposes of this Agreement, the following capitalized terms shall have the meanings set forth below. "Improvements" shall mean technical improvements, modifications or enhancements relating to the Technology that are developed by the Developer pursuant to this Agreement. "Intellectual Property" shall mean, but shall not be limited to, all of DSS's (i) issued and pending patents, trademarks, trade names, service marks, designs, logos, and copyrights, and all pending applications for registration thereof; (ii) know-how, inventions, improvements, methods, operation manuals and procedures, trade secrets, technical information, formulas; (iii) computer software and programs, and related documentation, updates, and data, whether in object or source code form, and (vi) other similar proprietary and intellectual rights, whether or not registered. "Person" shall mean any individual, corporation, partnership, limited liability company, association, trust or any other entity or organization of any kind or character, including a governmental authority or agency. "Technology" shall collectively mean (i) DSS's proprietary AuthentiGuard® technology (including DSS's related patents and patent applications, inventions, software, trademarks, trade names, service marks, technology marks, designs, logos, copyrights, know-how, trade secrets and any other DSS owned intellectual property relating thereto), consisting of a unique application of the AuthentiGuard® patent coupled with next generation technology and software which enables and end-to-end brand protection solution for product authentication, counterfeit deterrence and data tracking via embedded customized technology marks with hidden codes placed in products which can be read an authenticated via an application loaded on various devices along with necessary hardware and DSS's portal, (ii) DSS's Prism Viewer technology comprised of a custom covert Prism image imbedded in a customer's products that is viewed and authenticated through the use of DSS's propriety smart phone application, and (iii) DSS's AuthentiSite technology suite comprised of an embedded digital Prism image coupled with a cloud-based security server and a smart phone verification application for website authentication. 5. Confidentiality; Non-Disclosure. The parties acknowledge that they have entered into that certain Mutual Non-Disclosure Agreement dated as of January 18, 2018 (the "NDA"), a copy of which is attached hereto as Exhibit A. The terms of the NDA shall be deemed to be incorporated by reference into this Agreement, mutatis mutandis. During the Term of this Agreement and thereafter for a period of five (5) years, the parties shall be bound by all of the protective terms and conditions of the NDA. 6. Developer Liability. 6.1. Developer Liability for Damages. Developer shall be fully liable, without limitation, for money damages resulting from its improper or unauthorized use, modification, alteration, licensing or transfer of the Technology or Improvements, or resulting from its failure to provide functional and merchantable Improvements hereunder, which failure shall be deemed a material breach of this Agreement by Developer. 2 + +Source: HF ENTERPRISES INC., S-1, 12/23/2019 + + + + + + 7. DSS's Representations and Warranties. 7.1. Power and Authority. DSS represents and warrants that it has the right, power and authority to enter into this Agreement and that the signatory on behalf of such party to this Agreement has full authority to enter into and bind the party to the obligations set forth in this Agreement. 7.2. Right to Technology. DSS represents and warrants to Developer (i) that the Technology is the sole and exclusive property of DSS (ii) that DSS possesses all legal right, title and interest in and to the Technology necessary to grant Developer the rights provided herein, and (iii) that nothing contained in this Agreement conflicts with any other obligation or agreement of DSS. 8. Developer's Representations, Warranties and Covenants. 8.1 Power and Authority. Developer represents and warrants that it has the right, power and authority to enter into this Agreement and that the signatory on behalf of such party to this Agreement has full authority to enter into and bind the party to the obligations set forth in this Agreement. 8.2 Reverse Engineering. Developer covenants that it shall not attempt, directly or indirectly, during the term of this Agreement or at any time thereafter, (i) to reverse engineer, by any means whatsoever, the Technology or other Intellectual Property provided to Developer hereunder, for any unauthorized purpose, and further acknowledges that such Technology and Intellectual Property has been provided hereunder by DSS solely for the purpose of enabling Developer to fully perform its legal duties and obligations hereunder, (ii) to forensically, graphically or otherwise physically analyze the Technology or Intellectual Property provided to Developer hereunder for any unauthorized purpose, or (iii) to compile/assemble, decrypt, or create any derivative works based upon the Technology or Intellectual Property of DSS, for any unauthorized purpose. Any violation of this clause shall be deemed a material breach of this Agreement by the Developer. 9. Miscellaneous. 9.1. Assignment. Developer may not assign or transfer this Agreement, nor its rights and obligations hereunder, by operation of law or otherwise, to any third party without the prior express written approval of DSS. Any purported assignment without the consent of DSS shall be void. The provisions of this Agreement shall be binding upon, and shall inure to, the benefit of the parties, their legal representatives, permitted successors and permitted assigns. The rights of Developer under this Agreement shall immediately cease and be terminated upon the sale or transfer of all or substantially all of the assets of Developer unless an assignment of such rights pursuant to such sale or transfer has been previously approved in writing by DSS. The rights of Developer under this Agreement shall immediately cease and be terminated upon the sale or transfer of no less than a majority of, or a controlling interest in or over, the voting capital or ownership capital of Developer unless an assignment of such rights pursuant to such sale or transfer has been previously approved in writing by DSS. 9.2. Remedies Cumulative; Waiver. The rights and remedies provided in this Agreement, and all other rights and remedies available to either party at law or in equity are, to the extent permitted by law, cumulative and not exclusive of any other right or remedy now or hereafter available at law or in equity. A party's failure to assert any right or remedy shall not constitute a waiver of that right or remedy. No waiver by either party of any default shall be deemed as a waiver of prior or subsequent default of the same or other provisions of this Agreement. 9.3. Severability. In the event that a court of competent jurisdiction finds any provision of this Agreement to be illegal, invalid or unenforceable, it is the intention of the parties that such court shall modify such provision as necessary so that it shall be legal, valid and enforceable. The illegality, invalidity or unenforceability of any provision of this Agreement shall not affect the legality, validity or enforceability of any other provision of this Agreement. 9.4. Relationship of the Parties. Nothing in this Agreement shall be construed as creating a partnership, joint venture or agency relationship between the parties, or as authorizing either party to act as agent for the other. 9.5. Amendments. No modifications or amendments may be made to this Agreement except as expressed in writing and signed by both parties. 9.6. Irreparable Damage. The parties acknowledge and agree that any material breach of this Agreement may subject the other to irreparable injury for which monetary damages may not be an adequate remedy. Therefore, in addition to any remedies otherwise available, the non-breaching party may be entitled to injunctive relief and specific performance to enforce the terms of this Agreement. The breaching party shall pay all reasonable attorney's fees and court costs, arbitration costs, and/or appeal costs incurred by the non-breaching party should it be necessary for the non-breaching party to enforce the terms of this Agreement. 3 + +Source: HF ENTERPRISES INC., S-1, 12/23/2019 + + + + + + 9.7. No Construction against the Drafter; Headings. The parties acknowledge that they have reviewed this Agreement, have either been represented by counsel or had the opportunity to be represented by counsel, and have negotiated its terms. Accordingly, this Agreement shall be construed without regard to the party or parties responsible for its preparation, and shall be deemed to have been prepared jointly by the parties. Headings contained in this Agreement are not intended to be full and accurate descriptions of the contents of this Agreement and shall not affect the meaning or interpretation of this Agreement. 9.8. Notice. All notices sent under this Agreement shall be in writing and shall be deemed effectively given (i) upon personal delivery to the party to be notified; (ii) when sent by e-mail PDF or confirmed facsimile, if sent during normal business hours of the recipient, if not, then on the next business day; (iii) three (3) days after having been sent by registered or certified mail, return receipt requested, postage prepaid; or (iv) two (2) days after deposit with an internationally recognized overnight courier, specifying two (2) day delivery, with written verification of receipt. Notices shall be sent to the Parties at the following addresses or fax numbers or such other addresses or fax numbers as the parties subsequently may provide in accordance with this Section 9.8: + + + +If to DSS: Document Security Systems, Inc. 200 Canal View Blvd., Suite 300 Rochester, New York 14623 USA Attn: Chief Executive Officer + + + +With e-mail PDF copy to: Document Security Systems, Inc. 200 Canal View Blvd., Suite 300 Rochester, New York 14614 USA Attn: General Counsel (jdangelo@dsssecure.com) + + + +If to Developer: HotApp International Ltd. 17B, Greatmany Centre 109-111 Queen's Road East Hong Kong Attn: Chief Executive Officer + + + +With a copy to: + + 9.9. Force Majeure. Notwithstanding any provision herein, the parties may be discharged from all liabilities if the failure to perform or improper performance of this Agreement is the result of Force Majeure, provided that the party subject to the Force Majeure provides notice of such Force Majeure, as soon as possible after such party became subject to such Force Majeure. 9.10. Governing Law; Jurisdiction. This Agreement shall be governed in accordance with the laws of the State of New York without regard to conflict of laws principles. It is hereby irrevocably agreed that legal jurisdiction and venue for any proceeding arising out of this Agreement shall be in the state or federal courts located in the County of Monroe, State of New York, United States. 9.11. Entire Agreement. This Agreement and the Schedules and Exhibits hereto contain the entire agreement between the parties with respect to the transactions described herein, and supersede all prior agreements, written or oral, with respect thereto, provided, however, that notwithstanding any provision herein, the NDA shall remain in full force and effect. 9.12. Counterparts; Facsimile Signatures. This Agreement may be executed in counterparts, each of which shall be deemed to be original but all of which together shall constitute a single instrument. The signatures required for execution may be transmitted electronically to the other party via e-mail PDF, and such signatures shall be deemed original signatures. [Remainder of Page Intentionally Left Blank - Signature Page Follows] 4 + +Source: HF ENTERPRISES INC., S-1, 12/23/2019 + + + + + + IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective duly authorized officers as of the date first set forth above. DOCUMENT SECURITY SYSTEMS, INC. HOTAPP INTERNATIONAL LTD. /s/Jeffrey Ronaldi /s/ Nathan Lee Name: Jeffrey Ronaldi Name: Nathan Lee Title: Chief Executive Office Title: Chief Executive Officer 5 + +Source: HF ENTERPRISES INC., S-1, 12/23/2019 + + + + + + SCHEDULE 1 TECHNOLOGY DEVELOPMENT SERVICES (Attached) 6 + +Source: HF ENTERPRISES INC., S-1, 12/23/2019 + + + + + + Technology Development Services Deliverables from March 1s t to May 31s t 1. To conduct thorough testing of AuthentiGuard App for specificclients provided by DSS for every releases in Android and iOS as instructed by DSS. 2. To development Android Mobile App for core scanning modulewith improvement of scanning accuracy for major Android Phones (Samsung S7, S8 in particular) 3. To develop Sales Demo Apps for AuthentiGuard with guidelines offered by Product Marketing Team from DSS 4. To establish the standard testing procedure for all clients AuthentiGuard Mobile App testing 5. To develop Proof of Concept for AuthentiSite Note: Detail Scope of Work to be agreed during the meeting with HotApp on March 20-24th, 2018. Deliverable for subsequent 3 months will be mutually agreed by end of May. 7 + +Source: HF ENTERPRISES INC., S-1, 12/23/2019 + + + + + + EXHIBIT A MUTAL NON-DISCLOSURE AGREEMENT (Attached) 8 + +Source: HF ENTERPRISES INC., S-1, 12/23/2019 \ No newline at end of file diff --git a/full_contract_txt/ICORECONNECTINC_10_13_2010-EX-7.1-Strategic Alliance Agreement.txt b/full_contract_txt/ICORECONNECTINC_10_13_2010-EX-7.1-Strategic Alliance Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..ed3809d178be793e44012693ed6b1b80a4af685c --- /dev/null +++ b/full_contract_txt/ICORECONNECTINC_10_13_2010-EX-7.1-Strategic Alliance Agreement.txt @@ -0,0 +1,143 @@ +Exhibit 7.1 Strategic Alliance Agreement + +THIS AGREEMENT is made this 15 th day of July, 2010 ("Effective Date") by and between IMedicor, Inc, a Nevada Corporation whose address is 523 Avalon Gardens Drive, Nanuet, New York 10954, USA ("IMedicor") and USA Managed Care Organization (USA MCO) A Texas Corporation whose address is 916 South Capital of Texas highway, Austin Texas. + +WITNESSETH: WHEREAS, iMedicor is a secure, HIPAA compliant online portal that creates a virtual healthcare community amongst physicians and other medical professionals for the purpose of real-time Health Information Exchange. Physicians are provided with a secure HIPPA compliant transport account(s), similar to e-mail with attachments, that enable them to share patient specific personal health information with other participating physicians. iMedicor also provides the ability to create social communities for the purpose of peer collaboration and the extension of referral networks. iMedicor's portal also provides physicians with an extensive catalogue of Continuing Medical Education (CME), skill development and product specific educational resources; + +WHEREAS, USA MCO represents a network of physicians through which USA MCO provides products and services for the medical industry that: generate additional revenue Streams; provide cost savings, streamline workflow; help patients save time, money and doctors achieve better outcomes; and assist physicians and medical practices to find ways to enhance patient satisfaction; + +WHEREAS, both parties are interested in forming a strategic and marketing alliance beneficial to both organizations. + +NOW, THEREFORE, for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: + +1. OBLIGATIONS OF THE PARTIES ●Initiate a multi tiered marketing approach, by mutual consent of both parties, to integrate the iMedicor HIPAA Compliant transport network as a communications network throughout the USA MCO user base, ●The overall project would also include the ClearLobby pharmaceutical and medical device marketing platform and other value added services as mutually agreed into the future, as a Phase II activity. ●A phased in approach for each of the components listed above with the first being the introduction of the core iMedicor, HIPAA compliant communication / transport system into the USA MCO network. + + + + + + ●The integrated service will generate revenue sharing opportunities for both companies. ●USA MCO will allow access to their network to distribute promotional and educational material highlighting the value proposition of the iMedicor / USA MCO alliance. ●Access will only be through, and controlled by USA MCO ●Communication will be, but not limited to e-mail promotion, direct mail, bill stuffers, web site, newsletter or any other normal communication between USA MCO and their network of physicians and other healthcare providers upon mutual consent of both parties ●All material must be approved by USA MCO prior to any distribution to the USA MCO network. ●Once a physician or other healthcare provider enrolls in iMedicor they will become part of the regular internal iMedicor communications system. ●Every physician that enrolls in iMedicor, including those physicians or other qualified registrants into the iMedicor network that are invited into USA MCO physician communities, through the efforts of USA MCO will be tagged as originating from that source (the USA MCO network). ●Monthly reports detailing revenue generated through subscriptions, ClearLobby or other methods will be detailed in the monthly reports. ●All revenue sharing will be reconciled monthly and funds distributed by the 20th of each month by wire transfer for all net collected revenues for the previous month (net of returns and refunds, if any). ●IMedicor will make its records available for audit purposes at any time by USA MCO during regular business hours at the headquarters of iMedicor. ●USA MCO will not be responsible for any direct sales of the iMedicor communications system; USA MCO will not handle any customer service issues. All such activity will be referred to iMedicor. ●Initially iMedicor will provide the three main attributes of the iMedicor network to the USA MCO provider base, physicians and other healthcare providers. ●Those attributes are: oA HIPAA compliant transport system for digital / electronic records and images, oBuild and create community, patient-specific peer collaboration and expansion of referral networks, oAccess to educational resources, certified, skill level and product / device specific. ● + +2. COMPENSATION ●IMedicor will charge a subscription fee to participating USA MCO providers. The suggested monthly subscription would be $19.95 per month per subscriber. USA MCO would receive one third of the monthly subscription price, per month, per subscriber (approximately $6.65). All revenue sharing opportunities will be calculated for all parties after any credit card or other third party processing fees are deducted from the gross sale. ●USA MCO will be responsible for the marketing and initial / ongoing communication to their network highlighting the features of iMedicor, the value proposition, and their support of the project. This will not be a direct sales requirement for USA MCO, but only an agreement to provide access to the USA MCO user base ●Within 30 days of the execution of this agreement both companies agree to finalize a marketing plan that would detail they promotional activity to the USA MCO network, promotional deliverables, frequency of communication with the USA MCO network and other activities normally found in a strategic marketing plan ●Both companies agree to publish a press release, upon mutual agreement of content, in regard to the execution of this agreement and periodic updates of the success of this Strategic Alliance ●It is understood that iMedicor is a public company and is obligated to make certain SEC required filings that from time to time will include mention of the Strategic Alliance between iMedicor and USA MCO ●IMedicor shall provide access to the iMedicor system, training and customer support as required. ●USA MCO will have the option to take all or part of its revenue share in equity up to a maximum of 4.9% ownership in iMedicor on a fully diluted basis. For the purposes of this proposal, fully diluted means all issued and outstanding stock warrants priced at 15 times the average 5 day closing price at the day previous to reconciliation of revenues, which will be the 20th of the month for the prior calendar month. + + + + + + ●The iMedicor bookkeeping system will detail the payment option prior to releasing any funds or commitment of stock in order for USA MCO to determine how payment is to be reconciled. It is anticipated that said report will be available by the 15th of the month for previous activity, returned to iMedicor by the 19th in order to effect a timely disbursement of funds and or stock ●It is understood that the issuance of stock certificates can take up to four weeks but the issue date will be the 20th of the month of reconcile. ●Equity payout will be priced at the average 10 day trading day closing from the day previous to the monthly reconciliation. ●IMedicor will provide a warrant to purchase 2 million shares of common stock to USA MCO to offset any up-front marketing expense incurred by USA MCO in this project. The value of the Warrants will be determined by the average 10 day closing price of iMedicor stock eliminating the two lowest days and the two highest days for the period as of the day before the actual execution of the final agreement. ●The Warrants will be issued as a non-cash-transaction upon exercise of the Warrant, and, USA MCO will have up to five years from the date of issuance to exe4cute. USA MCO will also have the option to purchase the Warrant for the face value if it deemed the purchase option to be more favorable to the cashless transaction. ●In addition to the subscription fees, iMedicor would offer a 17% revenue share (cash payout only) through revenues generated with its ClearLobby program. Clearlobby represents the Pharma / Medical Device marketing division inside iMedicor that will expose physicians and other providers within the USA MCO provider network to new products and services in a non-invasive, opt-in manner. ClearLobby will be the Phase II part of the relationship. ●iMedicor will inform USA MCO of all ClearLobby activity as new products and services are introduced into the system ●IMedicor will, from time to time make available upgrade services to its members. In this event, USA MCO will receive a revenue share to be determined on a case by case basis. 3. TERM This Agreement shall commence on the Effective Date of this Agreement and shall remain in effect for a period of 5 years ("Initial Term"). Thereafter, this Agreement shall be renewed automatically on a five (5) year basis, unless one party notifies the other of its desire to terminate this Agreement at least sixty 90 days prior to the expiration of the Initial Term or then current renewal term, as applicable, or unless a new Agreement is signed between the USA MCO and IMedicor which will then invalidate this Agreement. + +In such an instance, all compensation will continue for a extended period of five years from the date of termination for all subscriptions tagged as USA MCO. + + + + + + + + 4. INTELLECTUAL PROPERTY Each party shall exclusively own its respective trademarks and service marks, copyrights, trade secrets, and patents (collectively, the "Intellectual Property") and will not have any claim or right to the other party's Intellectual Property by virtue of this Agreement or the performance of services hereunder. Neither party will take any action or make any claim to any Intellectual Property belonging to the other party, whether during the Term of this Agreement or thereafter. + +5. TERMINATION + +A. Termination Without Cause. Both parties may terminate this Agreement upon ninety ("90") days written notice to the other party at the address stated in this Agreement as per section 3 above. + +B. Both parties shall have the right to include this Agreement as an asset of their Company. + +C. Upon termination of this Agreement for any reason whatsoever, both parties shall have the right to remove any references to the other party from any of its materials and/or websites as well as be authorized to notify their customers of said termination without penalty and/or recourse by the other party if only if said notification contains no disparaging or disrespectful comments concerning the other party. + +6. REPRESENTATIONS AND WARRANTIES + +A. Each party represents and warrants that it has the right, title, interest and authority to enter into this Agreement and to fully perform its obligations hereunder, and that the rights granted hereunder shall not violate the rights of any third party. Each party represents and warrants that its conduct hereunder shall conform to all applicable federal, state and local law and regulation. + +B. Both parties will not have liability for any damages other than direct damages. Both parties DO NOT MAKE ANY WARRANTY REGARDING THE QUALITY OF ITS SERVICES. Both parties DO NOT MAKE ANY WARRANTY THAT ALL ERRORS OR FAILURES IN ITS WEBSITES WILL BE CORRECTED. Both parties EXPRESSLY DISCLAIM ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. BEYOND THE WARRANTIES CONTAINED IN THIS PARAGRAPH, Both parties DO NOT WARRANT THAT their SITES ARE ERROR-FREE OR THAT OPERATION OF their SITES WILL BE SECURE OR UNINTERRUPTED. THESE LIMITATIONS SHALL SURVIVE AND APPLY NOTWITHSTANDING THE VALIDITY OF THE LIMITED REMEDIES PROVIDED FOR IN THIS AGREEMENT. + + + + + + + + 7. INDEMNITY Notwithstanding anything to the contrary herein, USA MCO shall indemnify, defend and hold harmless IMedicor, its officers, directors, shareholders, employees, parent and affiliate entities, agents and representatives, against all damages, claims, liabilities, losses and other expenses, including without limitation, reasonable attorney fees and costs, whether or not a lawsuit or other proceedings is filed, that in any way arise out of or related to: (a) any claim against IMedicor arising out of any breach of any covenants, warranties, representations and agreements made by USA MCO to any third party and/or (b) USA MCO's material breach of any provision of this Agreement; (c) the grossly negligent or willful acts or omissions of USA MCO; and/or (d) any claim by any party based on USA MCO's Products failing to operate and/or function in any manner so advertised by USA MCO and/or its agents. In the event that USA MCO fails to promptly indemnify and defend such claims and/or pay expenses as provided above, IMedicor shall have the right to defend itself and USA MCO shall reimburse IMedicor for all of its reasonable attorneys' fees, costs and damages incurred in settling or defending such claims within sixty (60) days of IMedicor' request for same. + +Notwithstanding anything to the contrary herein, IMedicor shall indemnify, defend and hold harmless USA MCO, its officers, directors, shareholders, employees, parent and affiliate entities, agents and representatives, against all damages, claims, liabilities, losses and other expenses, including without limitation, reasonable attorney fees and costs, whether or not a lawsuit or other proceedings is filed, that in any way arise out of or related to: (a) any claim against USA MCO arising out of any breach of any covenants, warranties, representations and agreements made by IMedicor to any third party and/or (b) IMedicor material breach of any provision of this Agreement; (c) the grossly negligent or willful acts or omissions of IMedicor; and/or (d) any claim by any party based on IMedicor Products failing to operate and/or function in any manner so advertised by IMedicor and/or its agents. In the event that IMedicor fails to promptly indemnify and defend such claims and/or pay expenses as provided above, USA MCO shall have the right to defend itself and IMedicor shall reimburse USA MCO for all of its reasonable attorneys' fees, costs and damages incurred in settling or defending such claims within sixty (60) days of USA MCO' request for same. + +8. NO JOINT VENTURE Nothing in the Agreement shall be deemed to constitute, create, give effect to or otherwise recognize a partnership, joint venture or formal business entity of any kind; and the rights and obligations of the Parties shall be limited to those expressly set forth herein. No Party is granted any right or authority to assume or create any obligation or responsibility, express or implied, on behalf of, or in the name of, another Party or to bind another in any matter or thing whatsoever. + +9. CONFIDENTIALITY + +A. "Confidential Information" as used in this Agreement shall mean any and all technical and non-technical information including but not limited to patent, copyright, trade secret, and proprietary information, techniques, sketches, drawings, models, inventions, know-how, processes, apparatus, equipment, algorithms, software programs, software source documents, and formulae related to the current, future, and proposed products and services of IMedicor and its affiliates, and includes, without limitation, IMedicor and its affiliates information concerning research, experimental work, development, design details and specifications, engineering, financial information, procurement requirements, purchasing, manufacturing, USA MCO lists, business forecasts, sales and merchandising, and marketing plans and information. "Confidential Information" also includes proprietary and/or confidential information of any third party that may disclose such information to USA MCO in the course of IMedicor' business. All Confidential Information disclosed both orally and in writing by the disclosing party ("Discloser") will be considered Confidential Information by the receiving party ("Recipient") and subject to terms of this Agreement, even if such information is not conspicuously designated as "Confidential" or even when provided orally and not identified as confidential at the time of disclosure. + + + + + + + + B. All Confidential Information disclosed both orally and in writing by either party will be considered Confidential Information by USA MCO and subject to terms of this Agreement, even if such information is not conspicuously designated as "Confidential" or even when provided orally and not identified as confidential at the time of disclosure. + +C. USA MCO acknowledges that Discloser has over many years devoted substantial time, effort and resources to developing Discloser's trade secrets and its other confidential and proprietary information, as well as Discloser's relationships with USA MCOs, suppliers, employees and others doing business with Discloser; that such relationships, trade secrets and other information are vital to the successful conduct of Discloser' business in the future; that Discloser, in the furtherance of its business, is providing Recipient with the opportunity and support necessary to them to establish personal and professional relationships with USA MCOs, suppliers, employees and others having business relationships with Discloser and is affording Recipient access to Discloser' trade secrets and other confidential and proprietary information; that because of the opportunities and support so provided to Recipient and because of Recipient's access to Discloser' confidential information and trade secrets, Recipient would be in a unique position to divert business from Discloser and to commit irreparable damage to Discloser were Recipient to be allowed to compete with Discloser or to commit any of the other acts prohibited by this Section 9 of the Agreement; that the enforcement of the restrictive covenants against Recipient would not impose any undue burden upon Recipient; that none of the restrictive covenants is unreasonable as to period or geographic area; and that the ability to enforce the restrictive covenants against Recipient is a material inducement to the decision of Discloser to consummate this Agreement + +D. Recipient hereby agrees that it will not make use of, disseminate, or in any way disclose any Confidential Information of Discloser to any person, firm, or business, except to the extent necessary for negotiations, discussions, and consultations with personnel and/or authorized representatives of Discloser, any purpose of Discloser authorized by this Agreement and any purpose Discloser may hereafter authorize in writing. Recipient hereby also agrees that it will use the Confidential Information disclosed by Recipient for informational purposes only. Recipient hereby further agrees that it shall not use the Confidential Information of Recipient in the production and/or the providing of any products and/or services now or in anytime in the future. + +E. Recipient agrees that it shall treat all Confidential Information of Recipient with the same degree of care as it accords to its own Confidential Information, and Recipient represents that it exercises reasonable care to protect its own Confidential Information. + +F. Recipient hereby agrees that it shall disclose Confidential Information of Discloser only to those of its officer(s), manager(s), and/or employee(s) who need to know such information and certifies that such officer(s), manager(s), and/or employee(s) have previously agreed, either as a condition of employment or in order to obtain the Confidential Information, to be bound by terms and conditions substantially similar to those of this Agreement. + +G. Recipient will immediately give notice to Recipient of any unauthorized use or disclosure of the Confidential Information. Recipient agrees to assist Recipient in remedying any such unauthorized use or disclosure of the Confidential Information. + +H. Upon the request of Discloser and/or termination of this Agreement, the Recipient will promptly return all confidential information furnished hereunder and all copies thereof. + +I. Remedies. In the event of a breach or a threatened breach of any of the Provisions and/or Covenants set forth in this Section 9 of the Agreement above (the ''Covenants''), Discloser will, in addition to the remedies provided by law, have: (a) the right and remedy to have the Covenants specifically enforced by any court having equity jurisdiction, it being acknowledged and agreed that any material breach of any of the Covenants will cause irreparable injury to Discloser and that money damages will not provide an adequate remedy to Discloser; and + +(b) the right and remedy to require a person to account for and pay over to Discloser all compensation, profits, moneys, accruals, increments or other benefits (collectively the ''Benefits'') derived or received by Recipient as a result of any transactions constituting a breach of any of the Covenants, and Recipient hereby agrees to account for and pay over the Benefits to Discloser. + +J. The obligations of the parties set forth in this paragraph 9 of this Agreement shall survive the termination of this Agreement. + + + + + + + + 10. PUBLICITY The Parties agree that all publicity and public announcements concerning the formation and existence of this Agreement shall be jointly planned and coordinated by and among the Parties. Neither party shall disclose any of the specific terms of this Agreement to any third party without the prior written consent of the other party, which consent shall not be withheld unreasonably. Notwithstanding the foregoing, any party may disclose information concerning this Agreement as required by the rules, orders, regulations, subpoenas or directives of a court, government or governmental agency, after giving prior notice to the other party. + +11. EFFECT OF TERMINATION Upon termination or expiration of this Agreement, all rights granted to the USA MCO and IMedicor shall forthwith revert to the granting party. + +12. FORCE MAJEURE Neither party will be liable for, or will be considered to be in breach of or default under this Agreement on account of, any delay or failure to perform as required by this Agreement as a result of any causes or conditions that are beyond such Party's reasonable control and that such Party is unable to overcome through the exercise of commercially reasonable diligence. If any force majeure event occurs, the affected Party will give prompt written notice to the other Party and will use commercially reasonable efforts to minimize the impact of the event. + +13. NOTICES + +A. Any notice required to be given pursuant to this Agreement shall be in writing and mailed by certified or registered mail, return receipt requested or delivered by a national overnight express service. + +For IMedicor: Fred Zolla, CEO IMedicor, Inc. 523 Avalon Gardens Drive Nanuet, New York 10954 For the USA MCO: George Bogle, CEO / President USA MCO Solutions Corp, 916 South Capital of Texas Highway Austin, TX 78746 + +Either party may change the address or entity to which notice or payment is to be sent by written notice to the other party pursuant to the provisions of this paragraph. + + + + + + + + 14. JURISDICTION DISPUTES + +A. This Agreement shall be governed by the internal laws State of New York. + +B. All disputes hereunder shall be resolved in the applicable state or federal courts in County of Rockland in the State of New York. The parties consent to the jurisdiction of such courts, agree to accept service of process by mail, and waive any jurisdictional or venue defenses otherwise available. + +15. AGREEMENT BINDING ON SUCCESSORS This Agreement shall be binding upon and shall inure to the benefit of the parties hereto, their heirs, administrators, successors and assigns. + +16. WAIVER No waiver by either party of any default shall be deemed as a waiver of any prior or subsequent default of the same or other provisions of this Agreement. + +17. SEVERABILITY If any provision hereof is held invalid or unenforceable by a court of competent jurisdiction, such invalidity shall not affect the validity or operation of any other provision and such invalid provision shall be deemed to be severed from the Agreement. + +18. ASSIGNABILITY The license granted hereunder is specific to the USA MCO and may not be assigned by any act of the USA MCO or by operation of law unless with the written consent of IMedicor. + +19. INTEGRATION This Agreement constitutes the entire understanding of the parties, and revokes and supersedes all prior Agreements between the parties and is intended as a final expression of their Agreement. It shall not be modified or amended except in a writing signed by the parties hereto and specifically referring to this Agreement. This Agreement shall take precedence over any other documents which may be in conflict therewith. + + + + + + + + IN WITNESS WHEREOF, the parties hereto, intending to be legally bound hereby, have each executed this agreement on the day indicated. USA MCO IMedicor, Inc. By: /s/George Bogle By: /s/Fred Zolla George Bogle, CEO / President Fred Zolla, CEO \ No newline at end of file diff --git a/full_contract_txt/IDREAMSKYTECHNOLOGYLTD_07_03_2014-EX-10.39-Cooperation Agreement on Mobile Game Business.txt b/full_contract_txt/IDREAMSKYTECHNOLOGYLTD_07_03_2014-EX-10.39-Cooperation Agreement on Mobile Game Business.txt new file mode 100644 index 0000000000000000000000000000000000000000..744d0739d72d5af1dec07b0bb45cb7c6246f34e6 --- /dev/null +++ b/full_contract_txt/IDREAMSKYTECHNOLOGYLTD_07_03_2014-EX-10.39-Cooperation Agreement on Mobile Game Business.txt @@ -0,0 +1,713 @@ +Exhibit 10.39 + +English Translation + +Jiangsu Telecom Contract No.: JSXCS1200166CC000 + +Cooperation Agreement on Mobile Game Business + +Between + +Dazzle Interactive Network Technologies Co., Ltd. + +And + +Shenzhen iDreamSky Technology Co., Ltd. + +Party A: Dazzle Interactive Network Technologies Co., Ltd. Address: 4F, Han Zhong Hua Mansion, 268 Han Zhong Road, Gu Lou District, Nanjing Zip code: 210001 Contact person: Chen Xi Tel: Name of account: Dazzle Interactive Network Technologies Co., Ltd Deposit Bank: China Merchants Bank, Chengbei Sub-branch, Nanjing A/C: + +Party B: Shenzhen iDreamSky Technology Co., Ltd. Address: 7F, EVOC Technology Building, No. 31 Gaoxin Central 4th Road, Nanshan District, Shenzhen Zip code: 518057 Contact person: Chen Zhiyu Contact Tel: Name of account: Shenzhen iDreamSky Technology Co., Ltd. Deposit Bank: China Merchants Bank Co., Ltd., CMB Shenzhen Sungang Sub-branch A/C: + + Page 1 of 29 + + + + + +Jiangsu Telecom Contract No.: JSXCS1200166CC000 In order to provide Party A's users with better value-added application services and satisfy the growing market demands, the Parties hereto, upon thorough negotiations based on the principles of equality, mutual benefits, mutual supplementation of advantages, joint development, and fully leveraging the advantages of the Parties hereto in their respective areas of service, the Parties hereto have agreed as follows in respect of the cooperation in mobile game services: + +Article 1 Contents and Principles of Cooperation + +1.1 Party A, as an Internet business provider, and Party B, as a mobile game content provider, will establish a cooperation relationship in the area of mobile game service. + +1.2 The details of the content and application services provided by Party B are: 1) Party B will provide Party A with the mobile games that are developed by itself and have legitimate intellectual properties, or third party mobile games that are acquired by Party B by way of authorization and have been granted legitimate right of use; and 2) Party B will provide Party A the software and hardware technical support (and the timely updates thereof) for game running to secure the stable running of the games. + +1.3 Party A shall provide, for a consideration, network resources, portals and such other advertising resources, as well as connection services and business fee calculation/collection service. Party A will charge relevant information fee from the users of Party B's mobile game service, and will share such information fee with Party B as agreed herein. + +1.4 Except otherwise agreed between the Parties, Party B will acknowledge and accept the changes in cooperation business and mode proposed by Party A due to business development, and assist Party A in effecting such changes. + +1.5 Resources devoted by Party A: business connection platform, network resources, portals and other advertising channels, etc. + +1.6 Resources devoted by Party B: mobile game application system and relevant contents (including, without limitation, copyright, right of portrait and such other lawful rights), etc. + +1.7 Scope of cooperation service: all users of Party A's interactive platform. + +Article 2 Rights and Obligations of Party A + +2.1 Party A shall have a preemptive right to carry out mobile game services with Party B on a nationwide basis. + +2.2 Party A shall have the right to know and review the business license, relevant qualification certificate, copyright ownership, business permits, bank account and such other information provided by Party B. Page 2 of 29 + + + + + +Jiangsu Telecom Contract No.: JSXCS1200166CC000 2.3 Party A shall have the right to know the legality of the mobile game information provided by Party B, provided, however, that Party A will not take any responsibilities arising from any illegal or incorrect information provided by Party B. + +2.4 Depending on the business and market development, Party A has the right to formulate or amend the business standards, management measures, quality and/or service standards, and communicate the same to Party B in an appropriate form for Party B to comply with. At the same time, these documents will be used by Party A as basis to manage and assess Party B's business operations. The business standards, management measures, quality and/or service standards so formulated or amended shall be equally effective as this Agreement. + +2.5 Party A shall be responsible for the day-to-day maintenance of the business billing platform, and provide guidance and assistance to Party B in system connection, debugging and online work to guarantee the stable running of the platform. Party A shall open the network management system and other interface management tools to Party B to facilitate its checking of the charges to users and relevant status of operation, so as to ensure that Party B can monitor the fee charge and operation of its games in a convenient, true and valid manner. + +2.6 Party A shall have the right to review the content and sources of the games put online by Party B on the platform, and make confirmation on the business management system in an appropriate form, provided, however, that Party A will not assume any responsibility arising from any illegal contents provided by Party B. + +2.7 According to Management Measures for Cooperation in Mobile Game Business (V1.0), Party A shall have the right to review and assess Party B and its various business, select the superior and eliminate the inferior based on Party B's performance in business development, credit points and breaches, reward Party B's creative business and supervise Party B's customer service quality, and may terminate this Agreement with Party B if it fails to reach Party A's standards. 2.8 Party A shall be responsible for the overall advertising of the cooperation business. + +2.9 If Party A is investigated by relevant national authority, consumers' association or any other organization, or is claimed legal responsibilities, due to the users' browsing or use of the contents and application services provided by Party B, Party A may unilaterally terminate this Agreement by a written notice, and Party B shall bear any direct and indirect losses thus suffered by Party A, including, without limitation: + + (1) costs of preliminary input and preparatory work made by Party A for performance of this Agreement; + + (2) costs already paid by Party A for performance of this Agreement; + + (3) anticipated gains for Party A's performance of this Agreement; + + (4) costs, indemnities or other payables by Party A in relevant litigations incurred for reasons attributable to Party B. Page 3 of 29 + + + + + +Jiangsu Telecom Contract No.: JSXCS1200166CC000 2.10 If Party A receives any complaint or notice alleging that any content provided by Party B is involved in an infringement dispute, Party A may suspend the connection of Party B's system, unilaterally terminate this Agreement and suspend the settlement of relevant fees, and notify Party B to delete or shield such content involving infringement. The business will be resumed upon confirmation by Party A after Party B notifies the results to Party A. + +2.11 Party A shall construct and maintain the business management system, use the business management system to post notice/announcement, business management measures and relevant policies, and shall inquire, manage and update the information regarding the cooperation. Party A shall provide Party B with its user name and password on the business management system for Party B to log on. + +2.12 Party A shall test the business filed by Party B after approving it, and after the test is passed, provide Party B with a written confirmation or otherwise confirm with appropriate forms in the business management system. The official launch time of the business will be the time when Party A officially launches the billing service. + +2.13 During the term of cooperation, Party A may suspend its cooperation with Party B if there is user complaint on Party B's service quality issue, which has resulted in adverse social impact; in serious cases, Party A may unilaterally terminate this Agreement. + +2.14 Party A may, as requested by customers and market orders, review the business contents and prices filed by Party B, and may withhold the settlement of the information fee incurred by Party B's discretional change of charges. + +2.15 Any complaints made by users with respect to the fee charging activities by Party B (except complaints attributable to Party A), once discovered, may be immediately notified by Party A in writing to Party B for correction, and Party A may take measures of fee refunding or suspension of fee charging according to relevant rules and as agreed herein. For complaints which Party B fail to make reasonable explanation, Party A may require Party B to reduce and exempt information fee of relevant users, and based on the seriousness of situation, require Party B to take relevant liabilities for breach of contract in accordance with relevant business management measures. + +2.16 Party A shall be entitled to supervise the business conduct of Party B, and Party B shall assist Party A to avoid any adverse impact on Party A's normal business. If Party B's businessconduct causes adverse impact on Party A's normal business in violation of this Agreement, Party A may terminate this Agreement and Party B shall assume relevant liabilities for breach of contract. + +Article 3 Rights and Obligations of Party B + +3.1 Party B shall be responsible for content development, platform building and maintenance, marketing and customer service of the cooperation business. + +3.2 Party B guarantees to have the legal permits and qualifications necessary for the performance of the matters hereunder, including, without limitation, business license with legitimate business scope, qualification for providing contents/application services; Party B shall provide Party A with true and legitimate business permits for Internet information service and relevant business and such other credentials, creditability certificate, certificate for legitimacy of copyright sources, adequate after-sale service system, price approval, bank account and such other documents. Page 4 of 29 + + + + + +Jiangsu Telecom Contract No.: JSXCS1200166CC000 3.3 Party B must strictly comply with relevant industry laws, rules and standards promulgated by the State, including, without limitation, the PRC Telecommunications Regulations, Administrative Measures on Internet Information Service, Interim Provisions on the Administration of Internet Publishing, Interim Provisions on the Administration of Internet Websites' Engaging in News Publication Services, and such other laws, regulations, policies and industry management rules, and shall not distribute and disseminate illegal, unhealthy, reactionary information or advertisement or such other junk information on the Internet. + +3.4 Party B guarantees that it enjoys the intellectual property and civil rights on all the information/application service resources provided by it, has obtained the license and authorization from relevant right owners, and does not infringe on any person's copyright, trademark right, patent right, trade secrets or other intellectual property rights, other property rights, right of portrait or other personal right. + +3.5 Party B shall comply with the various rules and requirements in the business standards, management measures, quality and/or service standards formulated or amended by Party A, which shall be equally binding as this Agreement. + +3.6 Party B guarantees that the prices of the various business it provides are in line with the pricing policies of the State, and it will be responsible for any price complaints made by relevant administrative authority or users. + +3.7 Party B may negotiate the mode of cooperation with Party A, and may determine the operation strategy for its mobile game service business, provided, however that the pricing of its business shall be approved by Party A and filed to relevant authority for record. + +3.8 In case of any issues of Party B's own systems (such as WAP website or game server) that affect Party A's communications system, Party B shall submit to the connection control by Party A thereon, and any consequence thus incurred shall be fully taken by Party B itself. + +3.9 Party B shall undertake allliabilities arising from the wireless value-added business provided by any third party to the users in any form whatsoever through Party B's maintenance interface. Party B shall not transfer the business interface provided by Party A to a third party in any form whatsoever, and Party A will not be responsible toward any users or third party with respect thereto. + +3.10 As required by relevant regulations of the State and as requested by Party A, Party B shall provide relevant qualification certificates when applying to open and add business, to evidence that it has sufficient qualification, capability and authority to conduct such business. Party B shall guarantee that such qualification certificates are true and valid, while Party A is not obliged to inspect the authenticity and validity of such qualification certificates. Page 5 of 29 + + + + + +Jiangsu Telecom Contract No.: JSXCS1200166CC000 3.11 Party B's conduct of value-added business has to pass necessary technical test. If such business fails to pass the test as required by Party A for reasons attributable to Party B as of the commencement date of such test period, the application of such business shall be null and void, and the costs of such technical tests shall be borne by Party B. Party B has to submit a new application for such business if it wishes to continue the cooperation in this business. + +3.12 Party B shall not carry out business testing or provide business to customers at its own discretion without obtaining Party A's consent. + +3.13 Party B shall make available to Party A the network access and authority for business inquiry and cancellation and upon the request of Party A, may provide such data/reports on user development, user classification, user habits and business outlook forecasts, and will convey to Party A in time the user files that may be required for management of such business to ensure the real-time update of Party A's user data room. At the same time, the Parties confirm that Party A shall have the ownership of the user files, and the user files and information shall belong to Party A's confidential information, for which Party B shall take the confidentiality obligation hereunder; Party B shall not use such information for any purposes other than those agreed herein without authorization, or provide such information to any third party in any manner whatsoever. + +3.14 Party B shall resolve any disputes arising from the safety and legality of the information contents or services it provides, and shall guarantee that the services it provides will not expose Party A's communications network, value-added business platform or other third party interests to any significant potential risks. Party B shall assume any losses thus incurred to Party A and/or any third party and appropriately declare its responsibility in public and eliminate any adverse impact. + +3.15 Without Party A's prior consent, Party B shall not imbed business at mobile terminal or UTK/STK/OTA cards, whether on its own or together with other mobile terminal companies. + +3.16 Party B shall mark the brand of "China Telecom Mobile Game" on the external promotion and advertisement of the cooperation contents of the Parties; the name of Party A may, but neither the logo of China Telecom nor the customer service number 10000 shall appear at such advertisements. The contents of the business described by Party B in any media (e.g. newspaper, radio, TV, leaflets, webpages, etc.) shall obtain the prior written consent of Party A, and Party B shall not post any business content description to which Party A objects. + +3.17 When providing services to users, Party B shall not, in any manner including but not limited to coercion, cajole, fraud or cheat, in order to make users order tailored business and charge fees therefor, or otherwise increase any unnecessary costs to users. + +3.18 Party B shall not advertise, or make any statement favorable for, any competitor having the same or similar business scope as Party A in the services it provides. Page 6 of 29 + + + + + +Jiangsu Telecom Contract No.: JSXCS1200166CC000 3.19 Party B may use its user name and passwords on the business management system to log in, and effect such functions as application for value-added business, company information maintenance, information exchange between the Parties regarding their cooperation in value-added business. Party B shall truthfully register/update in time its name, designated bank, account, contact person, customer service and such other information, and properly keep and maintain any contract information, settlement information, information on handling of complaints and breach of contract as generated by the business management system. Party B shall take proper care of, and shall not allow any third party to use, its user name and password for the business management system. Any losses incurred to either Party or users arising from other person's knowledge of Party B's user name and password for reasons attributable to Party B shall be borne by Party B on its own. 3.20 Party B shall have the right to obtain the information fee settled by Party A. + +3.21 Except otherwise expressly agreed between the parties or agreed by Party A beforehand, Party B shall not transfer any cooperation business to a third party in any form whatsoever. Any transfer in violation hereof shall be deemed as a breach by Party B, for which Party B shall take relevant breaching liability and Party A may terminate this Agreement, suspend fee settlement and require Party B to undertake any direct or indirect loss thus caused. + +3.22 In case of subject change of Party B (the change of holding entity of its business license or license for value-added telecommunications business (ISP Certificate)), Party B shall settle all fees payable to Party A and if there is no pending breach to be resolved, provide the approving notice on subject change issued by AIC, and may complete the relevant subject change procedures only after approved by Party A. 3.23 Party B shall pay performance deposit to Party A on time and in full amount as agreed herein. + +Article 4 Standard Business Practices + +4.1 Party A shall provide Party B with the interface parameters of WAP gateway, SMS gateway and relevant platform, and assist Party B in business debugging, testing and opening. + +4.2 The boundary to divide the respective areas of maintenance by the Parties shall be the gateway equipment and the interface from telecommunication business platform to Party B's equipment. The equipment on the inner side of the interface shall be maintained by Party A's maintenance department, and the equipment on the outer side of the interface shall be maintained by Party B. If Party B uses an exclusive line, then the interface cable and its connectivity shall be in the charge of the applicant for such exclusive line and the other Party shall provide assistance. + +4.3 Party B shall be responsible for the building and maintenance of its systems, including all hardware equipment, system debugging, opening, and system maintenance work relating to the the wireless value-added business under this Agreement and the costs of each of the foregoing . + +4.4 Party B shall be responsible for the interconnection of Party B's systems with the various gateways or servers of Party A and the application, renting and maintenance of relevant communication circuit, and bear the corresponding costs. Page 7 of 29 + + + + + +Jiangsu Telecom Contract No.: JSXCS1200166CC000 4.5 Party B guarantees that the debugging, connection and system maintenance work of its systems will not be carried out in the busy hours of Party A's business, and all work that may have comparative big impact on the users must be done late at night to minimize the impact on the users' use of wireless value-added business. Party B further guarantees that such work will not impact the normal running of Party A's network and it will assume relevant liabilities for malfunctions of Party A's network system thus incurred. + +4.6 Any debugging, connection and system modification work by Party B to its systems must be notified to Party A in advance and obtain Party A's confirmation, after which Party B should announce to users via email, advertisement, SMS or other effective manner, so as to minimize the impact on users. + +4.7 Party B shall submit to any adjustment arrangement made by Party A to data traffic in urgent cases for purposes of guaranteeing the normal stability of the various value-added business. + +4.8 Party B guarantees to provide 24 hour non-interrupted system maintenance. + +4.9 Party A shall define the scope of effective billing customers of mobile business, and the information fee incurred by invalid user number or the user number not covered by business will not be settled. + +4.10 No fees will be charged to such numbers as provided by Party A that suspend service, that are canceled or recovered from the following month. In case Party B fails to respond or respond in time, Party A may claim breaching liabilities by Party B and deduct the corresponding amount at the time of settlement. + +4.11 Party B shall make sure that prior to its provision (including marketing and business advertising) of any service to users (including paid service and free service), it will thoroughly notify the users in a proper form, and ensure that the users are fully aware of, the content, means of provision, standard fee rate (information fee and communication fee), frequency of transmission, method of use, manner of cancellation, customer service call number and such other information users need to know for ordering service and make payment for such service. Party B may provide such service to users only upon obtaining the consent of users in a provable manner, and is prohibited to provide services to users without users' proper knowledge. Party B shall not purposefully intercept information, or discretionally send advertising information to users. In case of such breach by Party B, it shall assmue all liabilities. + +4.12 The business operated by Party B shall be confined to the category provided in Article 1 hereof. Any business beyond such scope shall be subject to an application filed by Party B to Party A via facsimile affixed with official seal, and may be opened and put in practice only after it is approved by Party A and has successfully passed the test. The application facsimile aforementioned shall specify the reason, expected time for business opening and business description. If Party B is discovered to have discretionally opened a business that fails to be approved by Party A, Party A may refuse to settle all the fees and terminate the cooperation. Page 8 of 29 + + + + + +Jiangsu Telecom Contract No.: JSXCS1200166CC000 4.13 Party B must provide users with unified method for inquiries and service cancellation. + +4.14 For business that is officially opened after being approved by Party A, Party B may apply for fee rate change at least three months after the date on which such business is opened. After obtaining the approval from Party A and the official opening of the business, Party B shall properlynotify the users about such information about the details of fee rate change, the way to cancel the ordered service, customer service call number of Party B, and post the change notice (which shall last for one month) at a prominent location on Party B's website; Party B may change the rate of information fee for the business in close cooperation with a third party information source only after such planned change has been announced simultaneously at the main advertising media of such third party information source. + +4.15 The Parties shall keep records of users' use of the business for at least 6 months, and shall keep the record of user's customized business until more than 6 months after the business is canceled by relevant user. + +4.16 The Parties shall act according to the relevant policies promulgated by the competent industry administration authority (if any). + +4.17 The Parties confirm to initially adopt such billing modes as payment by month, by time or by length of time for Party B's users; other more reasonable billing modes may be additionally adopted upon negotiations between the Parties. + +4.18 Party B shall establish a "black list" policy for customer service, based on which Party B will include the users who maliciously owe fees or customize services into a "black list" for management, and Party B shall well explain such policy to relevant users. Party B shall use technical means to monitor the extraordinary traffic, and implement monitor alert and restriction on any owed fees that may be produced by large amount of information fee (over RMB 150/day/user) arising from malicious customization and ordering of services. Party B shall take restrictive measures on the canceled or recovered user numbers provided by Party A every day, and take restrictive measures on the canceled or empty numbers every month. In case Party B fails to take measures on such users, or fails to take measures in time, it shall be responsible for all high-value maliciously owed fees or such other owed fees arising from the using of mobile game services by the users with canceled or suspended number, and Party A will deduct such amounts from the information fee to be settled. + +4.19 Party B shall not discretionally provide inquiry services of detailed bills of information fee to users, which shall be provided by Party A instead. + +4.20 Users using services abroad may cancel the mobile game service already ordered, and Party B is obliged to respond and confirm such request for cancellation in time. When the customer opens such service, Party B has the duty to declare to the users that any international communication fee incurred due to the customer's failure to cancel any ordered mobile game service or the customer's continued use of any mobile game service in the roaming state will all be borne by users on their own. Page 9 of 29 + + + + + +Jiangsu Telecom Contract No.: JSXCS1200166CC000 Article 5 Customer Service + +5.1 Party A will use 4008289289, the technical support hotline of its customer service center as the call center for receiving and handling complaints and superviing partner services. Party A will be responsible for user inquiries, claims and complaints arising from network communication issues and billing issues, and Party A's customer service center will allocate and distribute the complaints on online complaint handling system. + +5.2 Party B shall provide standardized and adequate customer service system to deal with the consultation, claims and complaints by users with respect to the relevant application services or contents it provides. Such system shall include, without limitation: + + (1) Customer service call: 24 hours a day, 7 days a week in service, which shall be service numbers starting with 800 or 4008, and shall notbe ordinary in-city number or mobile number; + + (2) Platform functions: customer systems having such functions as exchange, automatic call distribution, computer telephony integration,interactive voice response, manual agent, recording, data base, business preposition, etc.; + + (3) Business functions: customer service center will have mainly functions represented by in-calls and manual service, such as informationinquiries, business cancellation, business consulting and complaint handling; + + (4) Seat placing: SP's customer service shall have at least 5 seats and 12 in-call customer service staff; + + (5) System performance and business targets: call completion rate by the system: 99% and level of service (call completion rate by manualservice in 20 seconds): 80%; + + (6) Email box for complaints. + +5.3 Both Parties shall provide customers with multiple convenient means of business ordering inquiry and business cancellation. Party A shall have the right to use technical and managerial methods to control and manage Party B's ordering relationship and provide its own means for business inquiries and cancellation. + +5.4 Party B shall be responsible for all kinds of customer inquiries and complaints arising from problems not related to Party A's network communication and platform during the cooperation. Party B shall clearly specify and make public the channel and body by which the business consulting, claims and complaints will be accepted. Party B shall be obliged to visit the online complaint handling system every day and respond to the complaints within 24 hours. + +5.5 The Parties agree that the complaints shall be resolved within 72 hours, and Party B shall provide party A with the list of relevant persons and their respective details of contact and guarantee smooth communications 24 hours a day. + +5.6 The Parties will adopt the "first inquiry responsibility" system for user complaints, which means that the party receiving the user complaint shall be responsible to coordinate and properly resolve the questions raised by the users, regardless of which Party shall take the final responsibility. If the issue does involve the other Party, such other Party shall assist Party receiving the complaint ton resolve the issue. Page 10 of 29 + + + + + +Jiangsu Telecom Contract No.: JSXCS1200166CC000 5.7 For the consulting or complaints that can be resolved by Party B only, Party A shall notify Party B by way of work order flow and Party B shall respond within 24 hours and completely resolve such complaints within 72 hours. If Party B fails to resolve the issue within 72 hours, or if any user refuses to pay the information fee due to reasons attributable to Party B's services, Party B shall deduct or exempt relevant fees for such user. If a fee refund is needed, the relevant amount will be deducted by Party A at the time of settlement with Party B. + +5.8 If neither Party is able to judge which Party shall be responsible for the consulting or complaints it receives, it shall contact the other Party within 1 hour to find out the responsible Party and help the customer to solve the problem as soon as practicable. Neither Party shall shuffle its due responsibility to other Party. + +5.9 For those customer complaints for which neither Party is able to give reasonable explanations, Party B shall deduct or exempt relevant fees for such user upon the request of Party A. If a fee refund is needed, the relevant amount will be deducted by Party A at the time of settlement with Party B. + +5.10 If any user complaint is caused due to the fact that a service fails to satisfy its advertised quality commitments, then the Party making such commitments shall be responsible to reply to the users and solve the complained issues, and the other Party shall give necessary assistance. + +5.11 If Party B exits this Agreement due to poor management or is unable to continue providing value-added business for other reasons of its own, Party B shall directly explain to users and handle the after-exit arrangements. Except for the exit according to the exit mechanism provided herein, Party B shall inform Party A and obtain its consent regarding the cease of value-added business provision three months in advance; Party A shall timely terminate its service to collect information fee on behalf of Party B, and assist Party B in making explanations and descriptions to users. + +5.12 The Parties shall strictly comply with the regulations of Ministry of Information Industry and other relevant authorities, and adopt "compensation first" principle with respect to user complaints, which means to first refund any amounts in respect of the complaint or objection to users before finding out which Party shall be responsible. The amounts so refunded shall be deducted from the settlement amounts between the Parties. If such user complaint is caused by any breach by Party B hereunder, Party B shall undertake relevant breaching liabilities. + +Article 6 Performance Bond + +6.1 Upon negotiations between the Parties, Party B will pay Party A RMB three thousand (3,000) as performance bond after this Agreement comes into force. + +6.2 If Party A discovers in its spot checks conducted from time to time that any game, software, business, works, content or service provided by Party B is not in compliance with laws, regulations, industry rules, Party A's management measures or contractual agreement, Party B shall pay Party A additional amount of performance bond at RMB5,000 per violation, or RMB10,000 per business, to be payable to by Party B within 10 working days after the results of copyright spot checks are posted. Page 11 of 29 + + + + + +Jiangsu Telecom Contract No.: JSXCS1200166CC000 6.3 If any game, software, business, works, content or service provided by Party B has intellectual property defects or other right defects or other illegal issues, or Party A or any of its relevant bodies faces accusation, lawsuit, complaint, negative media report, administrative penalty, then Party A will temporarily withhold the settlement payment during the period when such dispute is pending for at least RMB50,000 per violation (business), and deduct from the performance bond already paid by Party B; at the same time, Party B shall pay an additional performance bond at an amount equivalent to the original one, within 10 working days upon the occurrence of the dispute. For the second time of the aforementioned violation, the amount of performance bond shall be additionally paid at RMB3,000 per time on the basis of the amount previous paid. For the third time of the aforementioned violation, Party A will withhold the full amount of the performance bond already paid by Party B, and terminate the full-range business cooperation for one year. + +6.4 If Party B fails to properly solve the accusation, lawsuit, complaint, negative media report, administrative penalty and such other dispute, which has brought goodwill or economic loss to Party A, Party A will withhold all amounts whose settlement has been suspended and full amount of the performance bond already paid by Party B, and terminate the full-range business cooperation for one year. + +6.5 Within two years upon the termination of the cooperation between the Parties, if no legal dispute involving Party B has occurred, Party A will refund (without interest) the performance bond to Party B within 30 working days upon the day immediately following the 2nd anniversary of the cooperation termination. + +6.6 The correspondent bank account for performance bond: + +Account name of Party A: Dazzle Interactive Network Technologies Co., Ltd. Deposit bank: Shanghai Pudong Development Bank, Business Office of Nanjing Branch A/C: + +Account name of Party B: Shenzhen iDreamSky Technology Co., Ltd. Deposit Bank: China Merchants Bank Co., Ltd., CMB Shenzhen Sungang Sub-branch A/C: + +6.7 This article shall be applied to all agreements executed by and between the Parties. + +Article 7 Billing and Settlement + +7.1 The prices of information fee shall be formulated by Party B and approved by Party A in principle, provided that Party A may propose advice regarding fee rate and negotiate such proposal with Party B. any changes to the prices of information fee (including the changes in means of fee charging) may be implemented formally only after confirmed by Party A. All billing and settlement shall be subject to the provisions of Management Measures for Cooperation in Mobile Game Business (V1.0). Page 12 of 29 + + + + + +Jiangsu Telecom Contract No.: JSXCS1200166CC000 7.2 The successful charging bill collected on Party A's billing system shall be used by the Parties as the basis for settlement of information fees; the business billed by time shall be calculated based on the successful receipt of the business by the customer; business subject to monthly payment shall be based on customer's true ordering. Party A shall deduct from the payable information fee, the amount of information fee refused to be paid by any users due to Party B's service quality. + +7.3 Billing cycle: the statistic cycle of total amount of Party B's information fee on Party A's billing system is normally based on calendar month, starting from 0 o'clock on the 1st day of a calendar month and ending at 24 o' clock on the last day of such month. + +7.4 Mode of distribution: the cooperation may be divided into two categories, content cooperation and channel cooperation, according to the different rights and responsibilities of the Parties in the cooperation. + + 7.4.1 Detailed rules for content cooperation settlement + +7.4.1.1 All kinds of communication fee income incurred from the user's or Party B's use of communication network shall belong to Party A in full amount. + +7.4.1.2 8% (or the actual bad debt rate if such actual rate exceeds 8%) of the receivable information fees in the corresponding month will be allocated and deducted as the provisions for bad debts. + +7.4.1.3 + + + +Party A will deduct the expenses for fee collection at the percentage provided in the agreement executed with the fee collection agent (the current sharing percentage of China Telecom is 15%, and the sharing percentage of other fee collection channels shall be calculated as actually incurred). + +7.4.1.4 + + + +After the bad debt provisions and the part allocated to the fee collection agent are deducted from the total revenue, Party B will obtain 70% of the remaining revenue (total revenue * (1 - bad debt rate) * (1 - sharing percentage for fee collection channel) * 70%). + +7.4.1.5 + + + +The Parties shall jointly determine the settlement amount according to system data records and statement provided by Party A, provided that any expenses incurred by the testing account used by the Parties for business testing shall not be included in settlement. + +7.4.1.6 The detailed practices for settlement in content cooperation are set out in Management Measures for Cooperation in Mobile Game Business (V1.0). Page 13 of 29 + + + + + +Jiangsu Telecom Contract No.: JSXCS1200166CC000 7.4.2 If Party B agrees to participate in the mode of channel cooperation, details of settlement are listed as follows: + +7.4.2.1 All kinds of communication fee income incurred from the user's or Party B's use of communication network shall belong to Party A in full amount. + +7.4.2.2 8% (or the actual bad debt rate if such actual rate exceeds 8%) of the receivable information fees in the corresponding month will be allocated and deducted as the provisions for bad debts. + +7.4.2.3 Party A will deduct the expenses for fee collection at 15% (or the actual fee collection expense rate if such actual rate exceeds 15%) as provided in the agreement executed with the fee collection agent. + +7.4.2.4 + + + +After the bad debt provisions and the part allocated to the fee collection agent are deducted from the total revenue, Party B will obtain 40% of the remaining revenue (total revenue * (1 - bad debt rate) * (1 - sharing percentage for fee collection channel) * 40%) + +7.4.2.5 + + + +The Parties shall jointly determine the settlement amount according to system data records and statement provided by Party A, provided that any expenses incurred by the testing account used by the Parties for business testing shall not be included in settlement. + +7.4.2.6 The detailed practices for settlement in content cooperation are set out in Management Measures for Cooperation in Mobile Game Business (V1.0). + +7.5 If Party B agrees to sign off Party A's access bundle sales or favorable package or such other packaged promotional activities, the fee rate can be adjusted appropriately upon negotiations between the Parties. + +7.5.1 8% (or the actual bad debt rate if such actual rate exceeds 8%) of the receivable information fees of the corresponding month will be allocated and deducted as the provisions for bad debts. + +7.5.2 Party A will deduct the expenses for fee collection at the percentage provided in the agreement executed with the fee collection agent (the current sharing percentage of China Telecom is 15%, and the sharing percentage of other fee collection channels shall be calculated as actually incurred). Page 14 of 29 + + + + + +Jiangsu Telecom Contract No.: JSXCS1200166CC000 7.5.3 After the bad debt provisions and the part allocated to the fee collection agent are deducted from the total revenue (total revenue * (1 - bad debt rate) * (1 - sharing percentage for fee collection channel)), Party A, on the one side, and all content providers participating in such access bundle sales, favorable package or other packaged promotional activities, on the other side, shall share the income at a ratio of 50%:50% (Party A: all content providers participating in such business). Party B and all the other content providers participating in such business shall share such 50% of income according to the proportion of the usage of their business to the total usage. The formula for calculation shall be: + +(1) If the game package only includes multiple console games: + +Based on the amount of downloads of the console games, the sharing percentage among all CSPs in the package shall be calculated as follows: + +Total income of game package * (1 - bad debt rate) * (1 - sharing percentage for fee collection channel) *50% * (number of downloads of such CSP's online game/aggregate number of downloads of all console games contained in the game package) + +(2) If the game package only includes multiple WAP social online games: + +Based on the amount of logons of the online games, the sharing percentage among all CSPs in the package shall be calculated as follows: + +Total income of game package * (1 - bad debt rate) * (1 - sharing percentage for fee collection channel) *50% * (logons of such CSP's online game/sum of logons of all online games contained in the game package) + +The detailed practices are set out in Management Measures for Cooperation in Mobile Game Business (V1.0). + +7.6 The Parties shall settle the payment every month, and the initial settlement period shall be the end of the third month, which means that the information service fee generated in the first month shall be paid to the account of the partner by the end of the third month. When requesting payment of relevant contract price from Party A, Party B has to: + +(1) provide official invoices that are in compliance with the requirements of State tax laws by the 25t h of the second month (Party B, instead of any of its affiliates, shall be the invoice issuer); + +(2) provide the payment request confirmed by the Parties; and + +(3) pay the performance bond as required in Article 6 hereof. + +7.7 The settlement shall be made based on Party A's data. If there is any discrepancy between the billing data of the Parties, and such discrepancy reaches over 5% of Party A's data, Party B may request account reconciliation via CSP management system within 5 working days after the settlement information is posted, and shall deliver the account statement and invoices confirmed with a stamp to the contact person of Party A by the 25th of the second month. If Party B fails to make such account reconciliation request within such prescribed period of time, Party A may refuse to accept and deal with such request. If Party B's billing data is confirmed as correct after investigation, the relevant account will be adjusted in the following month. Any CSP's failure to request account reconciliation in time shall be deemed as the tacit acceptance of the settlement data by such CSP, and Party A may refuse to accept any further account reconciliation request made by such CSP for the relevant settlement month. Page 15 of 29 + + + + + +Jiangsu Telecom Contract No.: JSXCS1200166CC000 7.8 All business revenue payable to Party B calculated by Party A according to the sharing percentages for different business under cooperation between the Parties, minus (or plus) other expenses payable (or receivable) by Party B, shall be the revenue to be finally settled to Party B (the "Settled Information Service Dee"). The aforementioned "other expenses" shall include, without limitation, penalty deducted for breach and co- location fee. As agreed between the Parties, Party B's business revenue and other payable expenses may be settled separately and apply different settlement process. + +7.9 Party B shall make timely update of its information of bank account and such other information necessary for payment as registered on the business management system. If Party B's failure to update such payment information in time renders Party A's payment to be rejected by the bank, or causes other difficulties that prevent Party A from making timely payment, then Party A will postpone such payment till the June or December closest to the time when Party A learns about the correct bank account of Party B without taking any breaching responsibility for overdue payment. + +7.10 Any change of Party B's corporate name shall be notified to Party A in time via the business management system or other appropriate means. After such change of Party B's corporate name, any amounts payable by Party A to Party B, whether incurred before or after such change, shall all be paid to the bank account with the changed name of Party B. If Party A fails to make the payment on time due to Party B's failure to properly complete the name change procedures, Party A will postpone such payment. + +7.11 If Party B terminates this Agreement pursuant to its terms, the Parties will settle the information service fee accrued prior to the termination. At the settlement, the Parties will determine the settlement method, cycle and process and implement the settlement by reference to the rules hereof regarding the deduction of information service fee or penalty fine in case of breach. 7.12 Each Party shall undertake its own due taxes. + +7.13 Party A may refuse to settle the information fee incurred by stolen user numbers as proved by public security department or acknowledged by both parties. + +7.14 The abnormal consumption that may be written off with the help of Party B shall be deducted from the Settled Information Service Fee of the current period after confirmed by the Parties, and Party A shall refund such fee to the relevant users. + +7.15 Party B shall be obliged to assist Party A in taking necessary effective steps to reduce the number of abnormal deals. + +7.16 Party B shall not make self-consumption and other violations detrimental to Party A's interests. Such violating acts, once discovered, shall grant Party A with a right to deduct all settlement amounts of the current month payable to Party B, and Party B will claim breaching responsibility against Party B according to the extent of impact, including penalty fines, suspension of settlement, suspension of business up to termination of cooperation. Page 16 of 29 + + + + + +Jiangsu Telecom Contract No.: JSXCS1200166CC000 Article 8 Relevant Undertakings + +8.1 Party B undertakes that the games, software, business, works, contents or services it provides are all in compliance with relevant laws, rules and regulations of the State and are free of any ownership defect, and Party B has executed necessary authorization/license agreement with the right owner and/or the agent thereof in accordance with applicable requirements. + +8.2 Party B will be deemed to have committed a breach hereunder if a third person initiates any legal or administrative proceedings (collectively the "Infringement Charges") alleging that Party A or any of its affiliated companies or entities has infringed on the legitimate rights and interests of such third person (including but not limited to intellectual property rights), or if Party A or any of its affiliated companies or entities is threatened with administrative penalties. Upon a notice to Party B, Party A shall have the right to freeze Party B's settlement account, and Party B will take responsibilities toward such third person and indemnify Party A or any of its affiliated companies or entities for all costs and expenses thus incurred, including, without limitation, any and all litigation fees, travelling costs, attorney fees, amount of settlement or any compensation provided in the final sentence. Such costs and expenses incurred may be deducted by Party A directly from the performance deposit or any unsettled payment under this Agreement or other agreements; any shortfall shall be paid by Party B within 3 working days upon the notice from Party A. This article shall survive the termination of this Agreement. + +8.3 The Parties may negotiate separately the terms regarding the use of Party A's enterprise name, service brand, business brand, trademark, markings or logo, etc. in the business hereunder. Party B shall not use any of the foregoing in any form whatsoever without reaching an agreement with Party A or obtaining Party A's prior written confirmation; otherwise, an infringement will be constituted. In such case, Party B shall eliminate the negative impact and compensate Party A for any losses thus caused. + +8.4 Party B shall not, in any manner whatsoever, mislead the users into believing that any game, software, business, works, content or service it provides on its own is provided by Party A or by both Parties. + +8.5 Neither Party shall use or imitate the other Party's business name, trademark, patterns, service logo, symbols, code, model or initials in its advertisements or in public places without the written permit of such other Party; neither Party shall claim its ownership over such other Party's business name, trademark, patterns, service logo, symbols, code, model or initials. + +Article 9 Security and Confidentiality + +9.1 Party A guarantees the completeness of all information/application service resources it provides, and Party A undertakes not to sell, transfer, duplicate, lease or hand over any content or app provided by Party B to any third party entity or individual in any form whatsoever (including in edited, abridged or added version), unless otherwise provided by laws. Page 17 of 29 + + + + + +Jiangsu Telecom Contract No.: JSXCS1200166CC000 9.2 Neither Party shall divulge or disclose this Agreement to any third party without written consent of the other Party. + +9.3 Each Party shall have the obligation of confidentiality with respect to any and all information and documents provided by the other Party over the course of business development and operation, and neither Party may disclose such information to a third party, or use such information for any purposes other than cooperation project development without the written consent of the other Party (except for the disclosure made in response to the requirements of laws, regulations or relevant regulators); otherwise, such Party shall assume relevant legal responsibility toward the other Party; provided, however, that any information that has already been possessed by a Party, has been obtained from a third party through lawful approaches, or has become publicly available prior to the disclosure shall not belong to the aforementioned confidential information. + +9.4 The obligation of confidentiality provided in this article shall survive the termination of this Agreement. + +Article 10 Liabilities for Breach of Agreement + +10.1 Both Parties shall strictly comply with the terms of this Agreement; a Party's failure to perform any of its own obligations, undertakings or covenants, or its violation of any of its statements hereunder, which brings damage to the interests of the other Party or renders the cooperation business impossible to be continued, shall be operated as a breach, and the breaching Party shall assume the liabilities for breach by indemnifying the other Party for any loss thus incurred and paying the penalty provided by relevant term hereof. In case of any damage to the other Party's reputation, the breaching Party shall also undertake such liabilities as stopping damage, making apologies and restoring reputation. + +10.2 In case this Agreement and its appendices is unable to be performed or fully performed due to a breach by a Party, the breaching Party shall assume the breaching liabilities and the non-breaching Party may terminate the cooperation business, and may further claim legal and economic responsibility from the breaching party if the breaching Party causes adverse social impact or economic losses to the non-breaching Party. In case of breach by both Parties, the Parties shall assume their respective due responsibilities according to the actual situation. + +10.3 If Party B unilaterally terminates this Agreement, or is penalized with termination of cooperation according to Management Measures for Game Partner Credit Points, or if Party A terminates this Agreement pursuant to the terms hereof, Party B agrees: + + (1) to offer one-month exit grace period during which Party B shall continue to provide services for customers and publish announcementin respect of the cease of its services at its website; + + (2) to pay off penalty fines and performance bond to Party A in full amount; and + + (3) that Party A shall have the right not to settle the outstanding and unsettled payments. Page 18 of 29 + + + + + +Jiangsu Telecom Contract No.: JSXCS1200166CC000 10.4 Neither Party shall assume any breaching liability if this Agreement is terminated due to the industry regulation by government (a written document shall be provided) or other event of force majeure. + +10.5 Party A will not be responsible to compensate Party A for any loss arising from the malfunction caused by Party A's equipment, system or network and such other non-human caused reasons, but shall be obliged to fix the malfunction as soon as possible. + +10.6 Party A will not take any responsibility if the conduct of business agreed herein is impacted when Party A is carrying out necessary construction or network building. + +10.7 If Party A discovers that Party B has violated the Integrity Agreement attached hereto by bribing Party A's working personnel, Party A may elect to impose a penalty of RMB10,000 to 100,000, suspend cooperation for 1-3 years or terminate the cooperation depending on the seriousness of the violation and the consequences thus brought about, and any loss thus incurred to Party A shall be borne by Party B. + +10.8 Any of the following acts by Party B shall constitute its breach hereunder, in which case Party A shall have the right to immediately stop the interface of Party B's system, suspend settlement, and require Party B to penalty at an amount equivalent to 100% of the total amount of its receivable information fee of the then-current month or RMB3,000, whichever is higher. Any loss thus incurred to party A shall be fully borne by Party B. If Party B manages to complete the remedy to the satisfaction of Party A within 10 working days, Party A will resume the interface of Party B's system and resume the settlement; if Party B fails to complete the remedy within such 10 working days, or the completed remedy still fails to reach Party A's requirements, or Party B has committed three breaches accumulatively, Party A may notify Party B to terminate this Agreement: + + (1) Party B's service has any content that is illegal, in violation of rules, reactionary or against the principle of public order and good socialcustoms; + + (2) Party A has received from different users over 15 (included) justified complaints within one day, or over 50 (included) justifiedcomplaints within 30 days about the same subject; + + (3) The user complaints incurred due to reasons attributable to Party B have caused adverse social impact, or have been reported to newsmedia, administration of telecommunication, AIC or other relevant government agency; + + (4) Party B is accused, or causes Party A to be accused of infringement, or Party or Party B is sued by others, penalized or reported bymedia for reasons attributable to Party B; Page 19 of 29 + + + + + +Jiangsu Telecom Contract No.: JSXCS1200166CC000 + + (5) Party B violates laws, rules or regulations of the sector, or any documents, management measures or policies of telecommunication orrelevant industry authority; + + (6) Any hardware, software, business or game provided by Party B in this business is held by Party A to fail to satisfy the businessrequirements upon its testing, or is withdrawn by Party B earlier than agreed; + + (7) Party B fails to have the relevant qualification, or provide its services beyond the permitted scope of its qualification; + + (8) Party B discretionally discloses Party A's trade secrets, technical files, marketing plan, customer files, cooperation agreement and otherkey secrets to any third party; + + (9) Party B unilaterally amends, terminates or refuses to perform, this Agreement without justified reason and without first reaching anagreement with Party A; + + (10) Party B fails to obey the business supervision or management of Party A, or fails to remediate as required by Party A; + + (11) Party B infringes on the communication secrets or personal privacy of users or other persons; (12) Party B delays or fails to fullyperform its obligations and duties hereunder; + + (13) Party B breaches the Undertakings on Network Access Information Safety; + + (14) Party B discretionally uses Party A's name, logo or other relevant information without Party A's consent, which causes adverse impactor economic loss to Party A; + + (15) Party B's illegal advertising or practices has resulted in indemnification or negative media reports of Party A; + + (16) Party B's 24-hour customer service call and other relevant information fails to match that existing on the service system, or fails to beaccessed normally, or fails to make response for a long time; + + (17) Party B fails to provide the customer service support as required by this Agreement and business management measures, shuffle responsibility to others, or fails to respond to any customer claims or complaints transferred by Party A in time as required by its commitments hereunder or Party A's management measures; + + (18) Party B's other breach, or acts that are illegal, violating or detrimental to Party A's interests. Page 20 of 29 + + + + + +Jiangsu Telecom Contract No.: JSXCS1200166CC000 10.9 In case of Party B's other breach of this Agreement or of Party A's relevant management rules, Party A may claim breaching liability from Party B pursuant to thereto, and may terminate this Agreement. At the same time, Party B shall take full responsibilities to compensate any loss incurred to Party A due to Party B's such breach. + +10.10 Notwithstanding anything herein is provided in contrary, Party A will not be responsible for any loss of expected benefits, goodwill loss, and data damage or loss arising from acts of Party B hereunder. + +10.11 If Party B should pay penalty fines and/or assume compensation liability according to this Agreement or Party A's relevant management rules, Party A shall have the right to deduct the relevant amount directly from any settlement payment or performance bond. + +Article 11 Force Majeure + +11.1 In case this Agreement is unable to be performed or fully performed due to any accident or event of force majeure, neither Party shall compensate the other Party for any economic loss thus suffered. The Party encountering such event of force majeure shall immediately inform the circumstances to the other Party in writing and within fifteen days, shall provide the detailed information of the event and a valid document evidencing the reasons why this Agreement cannot be performed or fully performed or the performance of this Agreement needs to be postponed. The Parties shall negotiate to decide whether to continue the performance of this Agreement or terminate this Agreement according to the extent of the effect on the performance hereof. + +Article 12 Dispute Resolution + +12.1 Any disputes between the Parties arising from the performance of this Agreement shall be resolved through amicable negotiations; in case such negotiations fail, both Parties agree to submit the dispute to the competent court where Party A is domiciled. + +12.2 In case of disputes between the Parties over certain provisions hereof, or when any such dispute is pending for resolution, the Parties shall continue to implement the other provisions hereof except the disputed provisions. + +Article 13 Effectiveness, Amendment and Termination of Agreement + +13.1 This Agreement shall come into force as of January 1, 2013 and remain valid for 1 year. As of the effective date hereof, the original cooperation of mobile game business executed between the Parties shall terminate automatically. Upon the expiry of this Agreement, this Agreement may be renewed automatically for one year (but can only be renewed once) if neither Party raises objection. Except otherwise agreed between the parties, the contents of this Agreement shall remain binding throughout the renewed period. Page 21 of 29 + + + + + +Jiangsu Telecom Contract No.: JSXCS1200166CC000 13.2 Throughout the effective term and renewed term hereof, this Agreement may be revised or amended upon mutual consent. The Parties may execute a supplemental agreement or execute a new agreement to reflect such revision or amendment. + +13.3 Any business rules, management measures, quality standards and/or customer service standards formulated by Party A during the term hereof shall be part of this Agreement, and if such rules, measures and/or standards conflict with the terms hereof, such rules, measures and/or standards shall prevail, unless the Parties deem it appropriate to apply this Agreement or deem it necessary to execute a separate agreement for such conflicts. + +13.4 Any Party who wishes to amend or revise this Agreement must provide a 30-day prior written notice to the other Party, and the Parties shall negotiate to amend or revise this Agreement in writing. + +13.5 During the term hereof, Party A may, depending on the business development and needs of management, evaluate and sort out Party B and its business according to unified rules. If Party B fails to reach the requirements in Party A's evaluation, sorting or other business management measures, Party A may terminate this Agreement. + +13.6 Throughout the performance of this Agreement, except otherwise expressly provided herein, neither Party may suspend or terminate the performance of this Agreement or unilaterally terminate this Agreement without the consent of the other Party. + +13.7 Any Party's failure to perform its obligations or duties hereunder, or serious violation of the provisions hereof, which has made the other Party unable to operate or normally conduct business cooperation hereunder, shall be deemed that such Party has unilaterally terminated this Agreement. The non-breaching Party shall have the right to claim compensation from the breaching Party for any economic loss incurred by its breach, and terminate this Agreement. + +13.8 This Agreement shall automatically terminate if Party B: + + (1) transfers or leases the numbers, trunk line, digital web address and such other resources acquired from Party A without approval ofParty A; + + (2) runs its business beyond the business operation area and business scope provided by its qualification permit; + + (3) has no qualification permit issued by the State competent authority but provides the content and category of the business that needssuch qualification permit; + + (4) provides fake copyright or qualification; + + (5) fails to pass the assessment of "survival of the fittest" organized by Party A, in which case this Agreement shall be automatically terminated. If Party B's receivable information fee of accumulatively 3 months is zero, this Agreement shall be automatically terminated (except the free games); Page 22 of 29 + + + + + +Jiangsu Telecom Contract No.: JSXCS1200166CC000 (6) disobeys Party A's business management or hurts Party A's interests; + + (7) otherwise disobeys the requirements of relevant authority or Party A's management. + +13.9 During the term hereof, any division, merger, dissolution, liquidation, bankruptcy or other events that lead to changes of Party B in the company nature, qualification and capacity for civil acts shall be notified to Party A in time, and subject to the provisions hereunder about the exit grace period. If Party B is deprived of the qualification or capacity to provide the wireless value added business hereunder due to its dissolution, liquidation or bankruptcy, this Agreement shall terminate accordingly. In case of division or merger of Party B, this Agreement shall terminate, and the successor company (or other entity) to Party B's wireless value added business hereunder shall re-apply for business opening to Party A, and timely modify Party B's enterprise identifier code and other information existing on Party A's business system or other business management system. + +13.10 In case of any change of Party B's company information, Party B shall go to the AIC, tax authority, bank or information industry authority to complete the procedures of company information change, exchange the original certificates for the valid ones, and submit the amended business license, organization code certificate, tax registration certificate and such other relevant documents and certificates to Party A for verification, the photocopies of which shall be filed for record. + +13.11 If Party B has to terminate this Agreement due to technical or operating difficulties, Party B shall serve an at least 3 month prior written notice to Party A, and after approved by Party B, offer a one-month exit grace period during which Party B shall continue to provide services for users and publish announcement in respect of the cease of game services at its website (Web/WAP) or through other channels at least 30 days in advance. Any loss thus incurred to Party A shall be compensated by Party B. + +13.12 During the effective term hereof, if the terms of this Agreement contravene any new fee rate policy or new document published by the supervisory authority of the Parties, the Parties may negotiate to amend or terminate this Agreement. + +Article 14 Miscellaneous + +14.1 Any matters not covered herein shall be subject to the relevant business standards, management measures, quality standards and/or customer service standards, or subject to written supplementary articles agreed by the Parties upon amicable negotiations, which shall be equally binding as this Agreement. + +14.2 If any term hereof becomes invalid at any time but will not fundamentally affect the validity of this Agreement, the other terms hereof shall not be affected. Page 23 of 29 + + + + + +Jiangsu Telecom Contract No.: JSXCS1200166CC000 14.3 The headings hereof are inserted for reference only. The contents of the terms shall be the basis to determine the rights and obligations of the Parties. + +14.4 Nothing herein shall be deemed or construed as joint venture, partnership or agency relationship between the Parties. + +14.5 This Agreement shall be made in four originals, two for each Party, which shall be equally effective. + +14.6 Any notices (information) between the Parties arising out of the implementation of this Agreement, or in connection with this Agreement must be sent to the addresses expressly specified herein in written form, including, without limitation, via facsimile, EMS or other form confirmed by the Parties. (End of body text) + +(The remainder of this page is intentionally left blank.) Page 24 of 29 + + + + + +Jiangsu Telecom Contract No.: JSXCS1200166CC000 [Signature and Stamp Page] + +Party A: Dazzle Interactive Network Technologies Co., Ltd. By authorized representative: Zhang Peng Signature and stamp: + +[Company seal is affixed] /s/ Zhang Peng + +Date: January 1, 2013 + +Party B: Shenzhen iDreamSky Technology Co., Ltd. By authorized representative: Chen Xiangyu Signature and stamp: + +[Company seal is affixed] /s/ Chen Xiangyu Date: January 1, 2013 Page 25 of 29 + + + + + +Jiangsu Telecom Contract No.: JSXCS1200166CC000 Appendix 1: + +Integrity Agreement + +In order to jointly safeguard the company interests of both Parties and cause the parties and their respective working staff to practice in an integral manner, in accordance with relevant laws and regulations, the Parties agree as follows: + +1 The Parties and their respective working staff shall consciously comply with the laws and regulations governing integral practices and prohibited commercial bribery of the State and government. + +2 Party A shall not privately ask for or accept any off-the-book rebates or other money or gifts provided by Party B. + +3 Party A's working staff shall not, in any form whatsoever, ask for or accept from Party B any rebates, money, valuable securities, valuable properties or other articles; nor shall they reimburse any expenses irrelevant to this project or request personal benefits from Party B. + +4 Party A's working staff shall not attend any treats or entertainment that may affect Party A's performance of its obligations and duties. + +5 Party A's working staff shall not privately discuss this project with Party B or reach a tacit understanding with Party B, nor disclose any bidding internal control information or corporate trade secrets. + +6 Party A's working staff shall not seek benefits for his/her family members, relatives or friends in the project by taking advantage of his/her powers or official capacity. + +7 Party B shall not privately offer Party A any off-the-book rebates or other money or gifts. + +8 Party B's working staff shall not, in any name or form whatsoever, provide Party A's working staff with any rebates, money, valuable securities, valuable properties or other articles; nor shall they reimburse any expenses irrelevant to this project for Party A's working staff. + +9 Party B shall not invite Party A's working staff to go trips or other luxury entertainment under the name of discussing business or executing economic contracts. + +10 If either Party discovers any violation hereof by any working staff of the other Party, it shall report such violation to the supervisor or the disciplinary department of such staff, and the staff so reported shall not retaliate to such Party under any excuses. Page 26 of 29 + + + + + +Jiangsu Telecom Contract No.: JSXCS1200166CC000 11 Liabilities for breach: + +If Party A discovers that Party B violates this Agreement, bribes Party A's working staff, or has committed any commercial bribery being investigated by judicial authority, Party A shall have the right to suspend the agreement and depending on the actual situation and consequences thereof, claim compensation from Party B for the economic loss thus incurred to Party A, record such bad acts of Party B, disallow Party B the access to Party A's full corporate scope to engage in the various services, supplies, construction and other project cooperation for 1 to 3 years, + +Call number for each Party to accept violation reporting: Party A: 025-86588790 Party B: 0755-86110235 Page 27 of 29 + + + + + +Jiangsu Telecom Contract No.: JSXCS1200166CC000 Appendix 2: + +Undertakings on Network Access Information Safety + +Each of the information source providers connected to the mobile communication network of Dazzle Interactive Network Technologies Co., Ltd., CHINANET of China Telecom or relevant business platform (including, without limitation, SMS gateway, WAP gateway, JAVA/BREW download server, location business server, etc.) shall undertake that: + +Article 1 it will comply with the relevant laws, administrative regulations and management rules of the State, and strictly implement the information safety management rules. + +Article 2 it will operate its business according to relevant laws, and provide the service only after obtaining relevant business permits; the business operation without permit is prohibited. + +Article 3 it will not make use of C114 or CHINANET of China Telecom or relevant business platform to (i) engage any illegal or criminal activities that endanger the national safety or divulge the secrets of the State, (ii) produce, consult, duplicate or disseminate any information that violates the Constitution or laws, impedes social security, damages national unity or sabotages solidarity among nationalities, or any pornographic or violent information, or (iii) post any information with any content that: + + 1 is against the fundamental principles enshrined in the Constitution; + + 2 compromises State security, divulges State secrets, subverts State power or damages national unity; + + 3 harms the dignity or interests of the State; + + 4 instigates hatred and discrimination among nationalities and sabotages solidarity among nationalities; + + 5 sabotages State religious policy or propagates heretical teachings or feudal superstitions; + + 6 spreads rumors, disrupts social order or social stability; + + 7 propagates obscenity, pornographic, gambling, violence, murder and terror and instigates crimes; + + 8 insults or slanders a third party or infringes upon the lawful rights and interests of a third party; + + 9 belongs to the thirteen vulgar online contents that violate social ethics and hurt the physical and mental health of youngsters, whichare the contents that: + + (a) depict or obscurely depict sex behavior, instigate sex association, or are provocative or insulting; + + (b) directly expose and describe the sex organ of human body; + + (c) describe sex behavior, sex process or sex manner or contain sexually suggestive or provocative language; + + (d) describe or expose the sex organs, or only use very small covering; + + (e) depict human body with the entire body or privacy places naked or only covered by limbs; + + (f) contain pictures of careless bare, candid shot, privacy place exposure with a nature of infringing personal privacy; + + (g) attract clicks with provocative headings; Page 28 of 29 + + + + + +Jiangsu Telecom Contract No.: JSXCS1200166CC000 + + (h) are pornographic, vulgar novels, audios and videos that are prohibited by relevant authority, including the deleted portions ofsome movies; + + (i) contain illegal social information about one-night stand, wife exchange or SM; (j) pornographic comics; + + (k) advertise bloody violence, malicious abuses, or insult others; + + (l) contain illegal sex products advertisements and venereal disease treatment advertisements; + + (m) maliciously disseminate others' privacy without permit from others or by using "Internet Mass Hunting"; + + 10 Otherwise prohibited by laws, administrative regulations, rules or relevant regulations. + +Any of the abovementioned illegal or criminal activities and/or posting of any harmful information, once discovered, shall be prevented by immediate measures and reported to relevant authority in time. + +Article 4 any information provided by it will comply with the relevant State laws, administrative regulations, rules or policies governing intellectual property rights. + +Article 5 it shall make sure, during its online testing and pilot running and after the business is officially opened, that the contents of the business it provides are safe and stable, and will cause damage to C114 or CHINANET of China Telecom or relevant business platform. + +Article 6 It shall establish efficient information safety and confidentiality management policies and technical protective measures, and accept the management, supervision and inspection of relevant competent authority of the relevant business of Dazzle Interactive Network Technologies Co., Ltd. + +Article 7 in case of any violations of the above, Dazzle Interactive Network Technologies Co., Ltd. may take necessary actions, close relevant information source access; in case of serious violation, Dazzle Interactive may terminate the cooperation business and claim legal responsibility from the information source provider. These undertakings will take effect upon executed by the information source provider and be kept in custody by Dazzle Interactive Network Technologies Co., Ltd. + +Information source provider (stamp): + +[Company seal is affixed] Responsible Person (signature): + +/s/ Chen Xiangyu Page 29 of 29 \ No newline at end of file diff --git a/full_contract_txt/IGENEBIOTECHNOLOGYINC_05_13_2003-EX-1-JOINT VENTURE AGREEMENT.txt b/full_contract_txt/IGENEBIOTECHNOLOGYINC_05_13_2003-EX-1-JOINT VENTURE AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..3d19edfd8cfed776f4869aa6d1a3e8396ffe79dc --- /dev/null +++ b/full_contract_txt/IGENEBIOTECHNOLOGYINC_05_13_2003-EX-1-JOINT VENTURE AGREEMENT.txt @@ -0,0 +1,621 @@ +Exhibit 1 + +Execution Copy + +JOINT VENTURE AGREEMENT + +BETWEEN + +TATE & LYLE FERMENTATION PRODUCTS LTD. + +AND + +IGENE BIOTECHNOLOGY, INC. + +Table of Contents + +1. + +2. + +DEFINITIONS + +CREATION OF THE JOINT VENTURE AND ITS STRUCTURE + +Page + +1 + +4 + +3. + +4. + +PARTIES' CONTRIBUTIONS TO THE JOINT VENTURE AND FINANCING + +PARTIES' INTERESTS IN THE JOINT VENTURE + +4 + +6 + +5. + +6. + +[INTENTIONALLY OMITTED] + +TAX CONSIDERATIONS + +6 + +6 + +7. + +8. + +PARTIES' WITHDRAWAL FROM THE FIELD OF AGREEMENT + +FUTURE PRODUCTS AND DEVELOPMENTS + +8 + +8 + +9. + +10. + +MANAGEMENT AND CONTROL OF THE JOINT VENTURE + +DAY-TO-DAY MANAGEMENT OF THE JOINT VENTURE + +10 + +12 + +11. SERVICES TO BE PROVIDED TO THE JOINT VENTURE BY THE PARTIES 12 + +12. RIGHT OF FIRST REFUSAL; TERMINATION OF THE JOINT VENTURE AFTER THE EFFECTIVE DATE 14 + +13. LIABILITIES 15 + +14. WARRANTIES BY THE PARTIES 16 + +15. CONDITIONS PRECEDENT; TERMINATION OF AGREEMENT 17 + + + + + +16. OPERATIONS UNTIL TRANSFER 18 + +17. ASSIGNMENT; PLEDGE OF JOINT VENTURE INTEREST 19 + +18. COSTS, FEES AND TAXES 19 + +19. NOTICES 19 + +20. LAW 20 + +21. MISCELLANEOUS PROVISIONS 20 + +22. DISPUTE RESOLUTION PROCEDURES; LIQUIDATION 23 + +23. JOINT VENTURE TO BE BOUND 24 + +JOINT VENTURE AGREEMENT + +This Joint Venture Agreement (as amended, restated, supplemented or otherwise modified in accordance herewith, this "Agreement") is entered into as of March 18, 2003 and is by and between Tate & Lyle Fermentation Products Ltd., a corporation organized under the laws of England ("T&L") and a subsidiary of Tate & Lyle PLC, and Igene Biotechnology, Inc., a Maryland corporation ("Igene"; collectively with T&L, the "Parties"). + +RECITALS + +A. Igene owns certain technology and expertise related to the manufacture and sale of Astaxanthin and derivative products, and T&L and its subsidiaries and affiliates possess expertise with respect to all aspects of the manufacture and production of numerous products through fermentation. + +B. In an effort to capitalize on their respective strengths and expertise, Igene and T&L wish to form a joint venture to manufacture and sell Astaxanthin and derivative products worldwide, all in accordance with the principles set out in this Agreement (including each of its relevant constituent entities, the "Joint Venture"). The Parties anticipate that the primary market for the product of the Joint Venture will initially be limited to Chile, parts of Europe, Japan and other parts of Asia. + +C. Such Joint Venture shall consist initially of two legal entities to be formed as soon after the execution as practicable which together will have sufficient financial, mechanical, technological and land rights, resources and assets, to allow them to operate with limited assistance from the Parties. + +D. Without derogating from the principles of Recital C, it is also understood and recognized by the Parties that, in order to minimize support and administrative costs associated with the operation of the Joint Venture, certain ongoing services will be provided to the Joint Venture by the Parties over various periods of time in consideration for payments from the Joint Venture as described in the appropriate agreements between the Joint Venture and the Parties. + +E. The Parties envision the Joint Venture continuing in effect for an indefinite period, subject to termination in accordance with this Agreement. + +AGREEMENT + +Now therefore, the Parties agree: + +1. DEFINITIONS. + +In this Agreement, the following words shall have the meanings set forth below: + + + + + +1.1. "AFFILIATE" means, with respect to any Party, any other entity controlling, controlled by or under common control with, such Party. The term "control" shall mean direct or indirect ownership of at least fifty percent (50%) of the outstanding voting stock of a corporate entity or voting interest in a non-corporate entity and shall also mean the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of an entity. + +1.2. "AVERAGE MARKET PRICE" means the spot price for Astaxanthin as determined by the weighted average market price over the 30 day period prior to purchase as set forth in the books and records of the Joint Venture. + +1.3. "BOARD" is defined in Article 9.1. + +1.4. "BOARD DISPUTE" is defined in Article 22.1. + +1.5. "COMMENCEMENT DATE" is the first business day after the first 30 consecutive days of production following the start-up phase in which 3 fermenters located at the Manufacturing Facility (constructed in accordance with the Construction Agreement) have been continuously operating. + +1.6. "CONSTRUCTION AGREEMENT" is defined in Article 3.6. + +1.7. "EVENT OF BANKRUPTCY" for any Person means (i) such Person files a petition in bankruptcy or insolvency, (ii) such Person files for reorganization or for the appointment of a receiver or trustee of all or a material portion of such Party's assets, (iii) such Person makes an assignment for the benefit of creditors, (iv) such Person admits in writing its inability to pay its debts as they fall due, (v) such Person seeks, consents to or acquiesces in the appointment of a trustee, receiver or liquidator of a material portion of its assets, (vi) such Person fails to have any petition in bankruptcy or insolvency, or for reorganization, or for the appointment of a receiver or trustee of all or a material portion of such Person's assets dismissed within sixty (60) days after the commencement of any proceeding as a result thereof or (vii) such Person fails to have any levy or attachment on all or a material portion of its assets released or discharged within sixty (60) days of imposition thereof. + +1.8. "DISCLOSING PARTY" is defined in Article 21.4. + +1.9. "EFFECTIVE DATE" means 12:01 a.m. Eastern Standard Time on March 3, 2003. + +1.10. "FACILITIES" means collectively, the Site and the Manufacturing Facility to be located thereon, as well as any other manufacturing facilities constructed, acquired or operated by the Joint Venture from time to time. + +1.11. "FIELD OF AGREEMENT" is defined in Article 2.1. + +1.12. "FORMATION" is defined in Article 3.3. + +1.13. "FORMATION DATE" means the business day immediately following the Formation. + +1.14. "GENERAL MANAGER" is defined in Article 18.5. + +1.15. "HSR ACT" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. + +1.16. "INDEMNIFYING PARTY" is defined in Article 13.1. + +1.17. "INFORMATION" is defined in Article 21.4. + +1.18. "LAWSUIT" is defined in Article 13.1. + +1.19. "LIQUIDATION NOTICE" is defined in Article 22.3. + +1.20. "MANAGEMENT" is defined in Article 10.1. + +1.21. "MANUFACTURING FACILITY" means the manufacturing facility to be constructed by Parent on behalf of the Manufacturing Company at the Site in accordance with the provisions of Article 3.6 which will be capable of producing 14,000 kg per annum of pure Astaxanthin. + +1.22. "NEUTRACEUTICAL" means a nutritional supplement for human consumption. + +1.23. "OFFER" is defined in Article 12.1. + +1.24. "OFFER PRICE" is defined in Article 22.2. + + + + + +1.25. "OFFEREE" is defined in Article 12.1. + +1.26. "OPTION PERIOD" is defined in Article 12.1. + +1.27. "PARENT" means Tate & Lyle Industries Ltd. + +1.28. "PARTY" shall mean each of T&L and Igene, and "PARTIES" shall mean both T&L and Igene. + +1.29. "PARTY HEADS" means the Chairman of the Board of Igene and the Chief Financial Officer of Tate & Lyle North America, Inc. respectively. + +1.30. "QUALIFIED EXPERT" is defined in Article 12.2(c). + +1.31. "RECIPIENT PARTY" is defined in Article 21.4. + +1.32. "SELLING PARTY" is defined in Article 12.1. + +1.33. "SITE" is defined in Article 3.5. + +1.34. "TECHNOLOGY" is defined in Appendix 3.2. + +1.35. "TRANSFERRED ASSETS" means the assets of Igene that are to be transferred to the Operating Company as more particularly described in Appendix 3.2. + +2. CREATION OF THE JOINT VENTURE AND ITS STRUCTURE. + +2.1. Subject to the terms and conditions stated in this Agreement, the Parties shall take all such steps and do all such things as are reasonably necessary to create between T&L and Igene a joint venture commencing from the date hereof until the date this Agreement is terminated with respect to (a) the manufacture of Astaxanthin and derivative products and (b) the marketing and sale of Astaxanthin and derivative products worldwide for all uses other than uses as a Neutraceutical or otherwise for direct human consumption (collectively, the "Field of Agreement"). Notwithstanding the foregoing, nothing herein shall, or shall be deemed to, form a partnership or any other entity other than the Operating Company and the Manufacturing Company (as defined below). + +2.2. The legal structure of the Joint Venture shall be (a) a limited liability company organized under the laws of Bermuda and owned by the Parties as set forth herein (the "Operating Company") which in turn will own all of the shares of (b) a corporation formed under the laws of the United Kingdom (the "Manufacturing Company"). T&L and Igene shall cause such entities to be formed promptly after the execution of this Agreement in a manner consistent with the terms of this Agreement. + +2.3. (a) Upon the terms and subject to the conditions of this Agreement, each of the Parties hereby agrees to use commercially reasonable efforts to take, or cause to be taken, all action and to do, or cause to be done, all things necessary or proper under applicable laws and regulations to consummate and make effective the transactions contemplated by this Agreement, including, without limitation, obtaining consent under the HSR Act (if necessary) and any other relevant governmental consents. The Parties shall share the cost of any filings required under this Article 2.3 equally. + +(b) Notwithstanding clause (a) above, nothing contained in this Agreement will require or obligate either Party to initiate any litigation to which any governmental authority is a party, although the Parties agree to use commercially reasonable good faith efforts to negotiate with the applicable governmental authority, as the case may be, in order to avoid any such litigation. + +(c) Notwithstanding clause (a) above, nothing contained in this Agreement will require or obligate either Party to agree or otherwise become subject to any limitations on the right of the Joint Venture to acquire, own, control or operate the Transferred Assets (including either Party or the Joint Venture being required to sell or otherwise dispose of, or hold separate, the Transferred Assets), if such Party reasonably believes in its good faith judgment as a result of any such limitation that it cannot substantially realize the material benefits that such Party reasonably expects to derive from the Joint Venture. The Parties agree to use commercially reasonable good faith efforts to negotiate with any applicable governmental authority in order to avoid any such limitations. + +3. PARTIES' CONTRIBUTIONS TO THE JOINT VENTURE AND FINANCING. + +3.1. Subject to the terms and conditions of this Agreement, T&L shall contribute, or cause to be contributed, to the Operating Company cash in the amount of $21,614,000. Subject to the terms and conditions of this Agreement, T&L further agrees to pay to Operating Company as a contribution to capital upon Formation (as defined below) $3,000,000. + +3.2. Subject to the terms and conditions of this Agreement, Igene shall transfer and assign, or cause to be transferred and assigned, + + + + + +to the Operating Company the Transferred Assets described in Appendix 3.2. + +3.3. The Parties intend that the transfer of the Transferred Assets to the Operating Company pursuant to Articles 3.1 and 3.2 and the other various transactions, transfers, contributions and agreements to be made or entered by and between Igene or T&L and the Operating Company in connection with the formation of the Joint Venture, shall be made promptly upon the formation of both the Operating Company and the Manufacturing Company ("Formation"). In the event that the Transferred Assets are not transferred to the Operating Company at such time or on such other date as is specified herein or in the Asset Transfer Agreement, the entity who is to make such transfer(s) shall, without any further cost to the Joint Venture or to the other Party, (a) ensure that the Joint Venture shall have all of the benefits and bear all of the burdens of such assets on and from Formation and (b) fully and legally assign to the Operating Company such assets as soon after Formation as practicable. + +3.4. Title to the Transferred Assets shall be passed to the Operating Company in accordance with Asset Transfer Agreement to be entered into by the Operating Company and Igene upon Formation. Such Asset Transfer Agreement shall be in the form set forth in Appendix 3.4. Such Transferred Assets shall be contributed free and clear of any and all indebtedness, liens and encumbrances. + +3.5. As promptly as possible after Formation, the Manufacturing Company shall enter into a lease with Parent with respect to the lease of certain real property located in Selby, England adjacent to the existing facility of an Affiliate of Parent (the "Site"), which lease will have a term of at least 50 years at an annual rent of $1 and shall grant to the Manufacturing Company all rights necessary to construct and operate the Manufacturing Facility. + +3.6. Upon Formation, the Manufacturing Company shall enter into an Engineering, Procurement and Construction Management Agreement in the form set forth in Appendix 3.6 (the "Construction Agreement"), pursuant to which Parent shall supervise and manage the construction of the Manufacturing Facility on a turnkey basis in consideration for a payment of $21,614,000. Upon the entering into of the agreements referred to in Articles 3.5 and 3.6, the Operating Company shall capitalize the Manufacturing Company through the contribution of equity received by it from T&L pursuant to Article 3.1 in an amount equal to at least $21,614,000. + +3.7. It is the intention of the Parties that any debt incurred by the Joint Venture shall be non-recourse against each Party. Each of the Parties agrees to use its reasonable best efforts to cause the Joint Venture to incur long-term indebtedness in an amount that is consistent with the business and cash desires of the Parties and the cash needs of the Joint Venture; provided, however, that neither Party shall be required to contribute any additional capital or guarantee, directly or indirectly, any debt of the Joint Venture including without limitation any leases or other direct or indirect obligations. + +4. PARTIES' INTERESTS IN THE JOINT VENTURE. + +4.1. The Parties shall each have a fifty percent (50%) interest in the Operating Company, and control of the Joint Venture shall be shared equally between the Parties. The Parties agree that their respective contributions to the Operating Company have equal value, and that no payment shall be made from one Party to the other Party in the event appraisals performed for tax accounting reasons of the Transferred Assets give rise or would give rise to different valuations. + +4.2. All profits and losses earned or incurred by the Operating Company shall be shared by the Parties in equal shares as long as each Party has a 50% interest in the Operating Company. Upon a reduction or increase in such interest, all profits and losses shall be shared in accordance with each Party's ownership interest in the Joint Venture. To the greatest extent permitted by applicable law and accounting provisions, (a) the Operating Company shall make distributions, dividends and returns of capital equally to each of the Parties and (b) Operating Company items of income, gain, loss and deduction shall be allocated equally to each of the Parties; provided, if for any reason, such distributions, dividends, returns of capital or allocations may not be made on an equal basis, the Operating Company shall make a special distribution, dividend, return of capital or allocation to one Party to balance the required distribution, dividend, return of capital or allocation to the other Party. + +4.3. Notwithstanding the foregoing, if for any reason the contribution of* T&L proves to have a value materially less than that attributed to it at the Effective Date as a result of the Facilities not being constructed as provided herein then either (a) T&L shall contribute a cash amount to the Operating Company to make up the shortfall or (b)(i) T&L's capital account shall be adjusted to reflect the revaluation of its contribution, (ii) T&L's interest in the Operating Company shall be adjusted to reflect its actual proportion of the contributions made upon the formation of the Joint Venture and (iii) the Joint Venture shall be liquidated as provided in Article 22.3. + +* Portions intentionally deleted pursuant to a request for confidential treatment. + +5. [INTENTIONALLY OMITTED] + + + + + +6. TAX CONSIDERATIONS. + +6.1. Each Party shall produce and submit to the Board, as promptly as possible, a reasonable estimate of their respective income tax liability with respect to the income of the Operating Company computed pursuant to the provisions of this paragraph as by a reasonably prudent taxpayer attempting to reduce the income tax payable by such taxpayer to the greatest extent permitted by law (a "Party Tax Estimate"). A Party Tax Estimate shall be calculated pursuant to United States and/or United Kingdom law and regulations (and the laws and regulations of any other jurisdiction under which the earnings of the Operating Company may be taxable to either Party) as may be applicable to either Party. The tax liability shall be calculated based on each Party's share of the income, gain, costs, expenses and deductions of the Operating Company in the prior year without consideration of items of income, gain, loss or deduction applicable to either Party derived from outside the Operating Company (including, without limitation, with respect to Igene, any Net Operating Loss that Igene may have accumulated prior to the formation of the Joint Venture), but shall include any items of income, gain, loss or deduction derived from the Operating Company in any previous year to the extent applicable to such year. Such Party Tax Estimate shall not be deemed to be final until it is approved by the Board; provided, that if the Board does not approve the higher Tax Estimate, and cannot resolve such a dispute within thirty days of the submission of such Tax Estimate to the Board, then the lesser Tax Estimate (the "Preliminary Minimum Distribution") shall be paid to both Parties pursuant to Article 6.2 as if it were the Minimum Distribution. After the expiration of such thirty day period, the Board shall promptly submit the higher Tax Estimate (the "Disputed Estimate") to PricewaterhouseCoopers (the "Neutral Auditor") who shall evaluate the reasonableness and accuracy of the Disputed Estimate in light of the provisions of this Article 6.1. The Party that submitted the Disputed Estimate shall promptly provide to the Neutral Auditor all information requested by the Neutral Auditor in order to perform the analysis required by this Article 6.1. Within thirty days of receiving all information it deems necessary to perform the analysis required herein, the Neutral Auditor shall inform the Board in writing that it either agrees or disagrees that the Disputed Estimate is reasonable and accurate in light of the provisions of this Article 6.1 and the tax information submitted to it. If the Neutral Auditor concludes that the Disputed Estimate is reasonable and accurate, the difference between the Disputed Estimate and the Preliminary Minimum Distribution shall be promptly paid to each Party. If the Neutral Auditor concludes that the Disputed Estimate is not reasonable and/or accurate then the Preliminary Minimum Distribution shall be deemed the Minimum Distribution for the applicable year; provided, however, that if the Neutral Auditor concludes that an amount greater than the Preliminary Minimum Distribution is appropriate, then such greater amount shall be deemed the Minimum Distribution for the applicable year. The costs of the Neutral Auditor shall be paid equally by the Parties. + +6.2. Subject to the provisions of Article 6.1, the Operating Company shall annually declare and pay by March 15 a distribution to each Party equal to the larger of the two estimated annual tax liabilities as reflected on the approved Party Tax Estimates (the "Minimum Distribution"). A portion of the Minimum Distribution shall be paid in advance on a quarterly basis should either Party be required to pay periodic mandatory payments of estimated taxes during any given year. In the event that such estimated taxes are required to be paid by either Party, such Party shall notify the Operating Company of the date of such required payments and the Operating Company shall pay to each Party, no later than 5 business days prior to the due date of each quarterly estimated tax payment specified in the notice above, an amount equal to 25% of the estimated Minimum Distribution. In the event that such distributions of estimate taxes are made within a given year, then the distribution on March 15 of the subsequent year shall be adjusted to reflect the advance distributions of related estimated taxes made prior to that date. + +6.3. The Operating Company shall annually within 90 days after the end of each fiscal year declare an additional distribution equal to 20% of the net income of the Operating Company, half of which is to be paid to each Party (the "Target Distribution"). The Target Distribution shall be paid except when the Board shall determine otherwise. + +6.4. The Board may pay other distributions at its discretion. + +6.5. Notwithstanding the foregoing, the Operating Company shall only pay distributions or dividends to the extent permitted by applicable law. + +7. PARTIES' WITHDRAWAL FROM THE FIELD OF AGREEMENT. + +7.1. Each Party shall, and shall cause each of its Affiliates to, do all such things and shall take all such steps as are reasonably necessary to effect its total withdrawal from the Field of Agreement. Such withdrawal shall be effective from the Effective Date. + +7.2. After the Effective Date and as long as Igene and T&L continue to own an interest in the Operating Company, neither of the Parties shall, or shall cause or permit any of their Affiliates to, directly or indirectly, as stockholders, consultants, members, partners or in any other capacity, engage in any enterprise or business anywhere in the world, which (a) manufactures Astaxanthin or (b) develops, markets, or sells products falling within the Field of Agreement. In the event that either (x) one Party shall transfer its entire interest in the Operating Company as permitted pursuant to this Agreement and the Operating Company shall remain a going concern after the closing of such transfer or (y) both Parties sell their interest in the Operating Company as permitted pursuant to this Agreement and the Operating Company shall remain a going concern after the closing of such transfer, then any Party which + + + + + +ceases to own an interest in the Operating Company as a result of such transfer shall remain subject to the terms of this Article 7.2 for a period of ten (10) years after the date of such transfer. Notwithstanding the foregoing, if a court of competent jurisdiction determines that the obligations set forth in this Article 7.2 are unreasonable in scope, time or geography, such court is hereby authorized by the Parties to enforce such provisions with narrower scope, shorter time or lesser geography as such court determines to be the maximum that is reasonable and proper in the circumstances. + +7.3. Except as set forth in Articles 7.1, 7.2, 8.1 and 8.2, it is explicitly agreed that nothing contained in this Agreement shall prevent either Party or any of their respective Affiliates from engaging, directly or indirectly, in any enterprise, which develops, manufactures, markets, or sells products that are not within the Field of Agreement, and except as set forth in Articles 7.1, 7.2, 8.1 and 8.2, either Party shall be free to engage in any business, enterprise, or undertaking, or to make any investment it chooses. + +8. FUTURE PRODUCTS AND DEVELOPMENTS. + +8.1. If, after the date of this Agreement and continuing as long as either Party is a partner, member, or shareholder of the Operating Company, such Party or any of its Affiliates receives or discovers any opportunity within the Field of Agreement, including without limitation developing or completing the development of, or discovering, or acquiring proprietary rights over, a product or process that falls within the Field of Agreement, the Operating Company then shall have exclusive rights to exploit such opportunity, but only within the Field of Agreement. The Party (or its Affiliate) that has developed, discovered or acquired such opportunity, product or process will, however, be entitled to exploit such opportunity, product or process for application outside the Field of Agreement. + +8.2. If, after the date of this Agreement and continuing as long as either Party is a partner, member, or shareholder of the Operating Company, such Party or any of its Affiliates receives or discovers any opportunity to use Astaxanthin as a Neutraceutical (a "Neutraceutical Opportunity"), including without limitation developing or completing the development of, or discovering, or acquiring proprietary rights over, a product or process that involves the use of Astaxanthin as a Neutraceutical, such Party shall (or shall cause its Affiliate to) present such opportunity to the Operating Company, providing the Operating Company with such narrative description and budgetary and other information as such Party (or its Affiliates) may have generated or gathered to the extent necessary to evaluate such Neutraceutical Opportunity. The Board shall consider the material presented by such Party and its Affiliates and shall elect whether the Joint Venture should pursue such Neutraceutical Opportunity. If the Board elects to pursue such Neutraceutical Opportunity, the Operating Company then shall have exclusive rights to exploit such Neutraceutical Opportunity, but solely with respect to use of Astaxanthin as a Neutraceutical, and, subject to Article 8.1, the Party (or its Affiliate) that has developed, discovered or acquired such opportunity, product or process will, however, be entitled to exploit such opportunity, product or process for application outside of use of Astaxanthin as a Neutraceutical. If however the Board does not elect to pursue such Neutraceutical Opportunity, the Party (or its Affiliate) that has developed, discovered or acquired such opportunity, product or process shall, subject to Article 8.1, be entitled to exploit such opportunity, product or process; provided, that subsequent developments or discoveries with respect to such Neutraceutical Opportunity would reasonably be expected to affect the Board's acceptance or rejection of such Neutraceutical Opportunity, such Party shall (or shall cause its Affiliate to) present such Neutraceutical Opportunity to the Board with reference to the pertinent subsequent developments or discoveries. + +8.3. If, after the date of this Agreement and continuing as long as a Party is a partner, member, or shareholder of the Operating Company, the Joint Venture develops or completes the development of, or discovers, or acquires proprietary rights over, a process or product which at, or after, the time of its development, discovery or acquisition has, or might have, some application outside of the Field of Agreement, then the appropriate entity of the Joint Venture shall offer to license the use of the process or product (or the production thereof) for such application to each of the Parties on reasonable commercial terms (including, without limitation, the possible payment of royalties at market rates) taking into account the time and money spent by the Joint Venture and taking into account other relevant commercial factors. The grant of licenses to any third parties shall be the prerogative of the Board provided that no such license shall be granted at terms more favorable to the third party than were offered to the member(s) of such Party. + +8.4. In the event either T&L or Igene wishes to market Astaxanthin for uses other than in the Field of Agreement, including but not limited to the use of Astaxanthin as a neutraceutical or otherwise for direct human consumption, either T&L or Igene, as the case may be, shall be permitted to purchase reasonable quantities of Astaxanthin from the Operating Company for use in the manufacture of such products at the Average Market Price. The Joint Venture will manufacture such Astaxanthin to the standard required for its business, and each Party desiring to market Astaxanthin for other uses shall process the product acquired from the Operating Company at its own cost and expense. + +9. MANAGEMENT AND CONTROL OF THE JOINT VENTURE. + +9.1. The Joint Venture will be managed and controlled by a board of directors comprised of six (6) members (the "Board"). Each Party shall appoint three (3) of such members (none of whom shall be residents of the United Kingdom) and shall be entitled to + + + + + +appoint any successor appointees as necessary such that the Board shall always be comprised of three members appointed by each Party. Each Party shall be entitled to appoint alternate directors on a periodic and temporary basis as needed. Each party agrees at all times to vote in favor of the directors appointed by the other Party or any successor appointees. + +9.2. The Board shall have a Chairman selected in odd-numbered years by Igene and in even-numbered years by T&L for the duration of the calendar year. The Party with the right to select the Chairman shall select the Chairman from among the members of the Board appointed by it. If for any reason the individual serving as the Chairman ceases to be a member of the Board, such individual shall also cease to serve as Chairman and the Party who appointed such individual to the Board may select another individual appointed by that Party to the Board to serve as Chairman through the remainder of such calendar year. The Chairman shall serve as the chairman of all meetings of the Board and shall serve in such other administrative capacities as may be appropriate or as the Board may determine from time to time, but the Chairman shall not have any additional vote or authority by virtue of being the Chairman. + +9.3. The Board shall have regular meetings at least once each calendar quarter which shall be called by the Chairman by written notice delivered to each Board member no later than five business days prior to the meeting specifying the date, time and place for such meeting. Either Party may at any time provide the Chairman with a written request that the Chairman convene a special meeting, whereupon the Chairman shall call a special meeting to be held within two weeks after receipt of such request by written notice delivered to each Board member no later than five business days prior to the meeting specifying the date, time and place for such meeting. Any member of the Board may attend a meeting by telephonic equipment if such member may hear and be heard by all present at that meeting (including others participating telephonically). + +9.4. The decisions of the Board shall be by majority vote of the members present at a meeting, provided that such majority vote includes the affirmative vote of at least one member appointed by each Party. Notwithstanding the foregoing, after either Party either has an Event of Bankruptcy or is and continues to be in material breach of this Agreement (unless such breach is being contested by the breaching party in good faith) and no director appointed by such Party attends a duly convened meeting of the Board (after notice delivered pursuant to Article 9.3), the affirmative vote of three members of the Board at a duly convened meeting of the Board shall constitute approval of the Board for all purposes hereunder, regardless of whether a member of the Board appointed by each Party approves such matter. + +9.5. The Board shall establish various authorizations and delegations for Management (as described below) to conduct the business of the Joint Venture as contemplated by Article 1.1 hereof. In addition, the Board shall: + +(a) select the officer who will manage the Joint Venture on a day-to-day basis (the "General Manager") subject to the direction of the Board who need not be an employee of the Joint Venture; + +(b) approve any and all individual capital investments to be made by the Joint Venture in excess of $50,000 or, at its discretion, delegate such approval to the General Manager with respect to capital investments that do not exceed amounts to be determined by the Board in such delegation; + +(c) approve any dividend or profit distribution to be made to the shareholders, members or partners, as the case may be, in excess of the Minimum Distribution in accordance with Article 6.2; + +(d) approve any merger of the Operating Company or any acquisition of another entity or all or substantially all of another entity's assets by the Operating Company; + +(e) the sale, disposition or purchase of individual assets for in excess of $50,000; + +(f) approve the closing of any plant or facility of the Joint Venture; + +(g) approve any related-party contracts, except as contemplated in this Agreement; + +(h) approve any incurrence of indebtedness for borrowed money; + +(i) change the business purpose of the Joint Venture; + +(j) approve the discontinuance of any operations of the Joint Venture; + +(k) determine the annual business plan and budget (including capital expenditures) and any material variance from such plan and budget; + + + + + +(l) approve any contract or commitment for a period greater than twelve months; + +(m) approve any capacity increase at any manufacturing site; + +(n) determine budgets for continuing research concerning the development of strains and process methods for Astaxanthin; + +(o) approve the material tax and accounting policies of the Joint Venture (which shall include for the Operating Company the application of U.S. generally accepted accounting principles); and + +(p) approve the issuance of new or additional interests in the Operating Company (but not including, in any case, any transfer of existing interests as otherwise provided herein). + +If the Board should be deadlocked on any matter, the dispute resolution procedures set forth in Article 22.1 shall apply. + +9.6. The Joint Venture shall be jointly controlled by the Parties who, as shareholders, members, or partners, shall have the exclusive power, by instructing the Board, to: (i) dissolve the Joint Venture, (ii) sell, or dispose of all or substantially all assets of the Joint Venture or permit the Joint Venture to place or grant any consensual lien or security interest on its assets (except liens for taxes and materialsmen's liens being contested in good faith which are not material in amount), or (iii) permit the Joint Venture to engage in material commerce outside the Field of Agreement or change the scope of the Field of Agreement. Upon receipt of such instructions, the Board shall act in accordance with this Article 9. + +10. DAY-TO-DAY MANAGEMENT OF THE JOINT VENTURE. + +10.1. Except as provided in Article 9.5, the Board shall delegate the conduct of the day-to-day business of the Joint Venture to the General Manager, together with the officers and employees of the companies providing the services set forth in Article 11 (collectively the "Management"). The General Manager shall also have whatever title is appropriate for each entity in the Joint Venture reflecting his or her role as the primary manager and officer of each entity. The initial General Manager will be Peter Boynton who will be secunded to the Joint Venture on a part-time basis. + +10.2. Subject to Article 9.5 and the direction of the Board, the Management shall direct, supervise and conduct the business of the Joint Venture in the following areas: + +(a) creation, development, and implementation of routine commercial policies and procedures; + +(b) creation, development, and implementation of sales and marketing strategies; + +(c) treasury and financial management; + +(d) manufacturing, maintenance and other operations; + +(e) legal services; and + +(f) research and development. + +11. SERVICES TO BE PROVIDED TO THE JOINT VENTURE BY THE PARTIES. + +11.1. Contemporaneously with the execution of this Agreement, each Party will enter into an agreement or agreements substantially in the form attached hereto as Appendix 11.1.1 and Appendix 11.1.2 pursuant to which each Party or its Affiliates shall provide the services identified for it below (the "Support Services Agreements", and each a "Support Services Agreement"). The Support Services Agreements shall provide that the parties will provide the following services to the Joint Venture: + +11.1.1.Igene or its Affiliates will provide to the Joint Venture: + +(i) Sales and marketing services related to the world-wide sale and marketing of Astaxanthin in the Field of Agreement; + +(ii) Research services related to further development of the Technology and improvement of manufacturing process efficiencies, as requested by the Board from time-to-time; and + + + + + +(iii) Administration of the contract for manufacturing of Axtaxanthin with Fermic S.A. de Mexico pursuant to the terms of the Support Services Agreement. + +11.1.2.T&L or its Affiliates will provide to the Joint Venture: + +(i) Engineering and operations services; + +(ii) Technical and research services related to the further development of the Technology and improvement of manufacturing process efficiencies, as requested by the Board from time-to-time; + +(iii) Transportation and logistics services; and + +(iv) Finance and accounting services. + +11.1.3.The charge for the services set forth in Article 11.1.1 and 11.1.2 is set forth in the appropriate Support Services Agreement and shall be paid by the Operating Company. + +11.1.4.T&L or its Affiliates shall also provide certain utilities and waste treatment services to the Joint Venture from its existing facility located at the Site. Such services shall be reimbursed by the Operating Company in an amount as more fully set forth in the appropriate Support Services Agreement. + +11.2. In the event that either Party conveys its interest in the Operating Company to the other or a third party during the five year period commencing on the Effective Date and the Joint Venture continues to operate as a going concern thereafter, each Party shall provide the services described in Article 11.1 to the Joint Venture at a price (that shall reasonably be consistent with the methodology used for determining prices prior to such conveyance) to be agreed upon by the Parties for a transition period to allow the owner or owners of the Operating Company to obtain such services for the Joint Venture independently. Such transition period shall not exceed 24 months for the services set forth in Article 11.1.1 and Article 11.1.2 and shall not exceed 36 months for the services set forth in Article 11.1.4; provided, however, if T&L shall give notice to Igene that it intends to close the Selby, England facility adjacent to the Site, T&L shall be required to provide the services set forth in Article 11.1.4 for a period not to exceed 24 months from the date Igene receives such notice. + +11.3. In the event of a contradiction between the terms of this Article 11 and any Support Services Agreement, the terms of the Support Services Agreement shall govern. + +12. RIGHT OF FIRST REFUSAL; TERMINATION OF THE JOINT VENTURE AFTER THE EFFECTIVE DATE. + +12.1. RIGHT OF FIRST REFUSAL; TAG-ALONG RIGHTS. + +Prior to one year from the Effective Date, a Party may not sell or otherwise transfer its interest in the Operating Company. Thereafter, any sale or other transfer may not be effectuated except pursuant to a good faith, arms' length offer to sell its entire ownership interest in the Operating Company for cash consideration to a party who is not affiliated with such Party (a "Third Party Offer"). If either Party has received a Third Party Offer that it intends to accept (the "Offer"), such Party (the "Selling Party") shall notify the other Party (the "Offeree") of the Offer, which notice shall include a copy of the Offer and any other information necessary to enable the Offeree to evaluate reasonably the Offer and the potential purchaser. The Offeree shall have thirty (30) days after receipt of the notice from the Selling Party (the "Option Period") to elect either (i) to purchase the Selling Party's interest in the Operating Company or (ii) to sell the Offeree's interest in the Operating Company to the Selling Party, in either case on the same terms and conditions as those contained in the Offer. If the Offeree makes one of such elections, the applicable purchase and sale shall take place within sixty (60) days after the date of the Offeree's election in accordance with the terms and conditions of the Offer or such other terms and conditions as the Selling Party and the Offeree shall mutually agree. If the Offeree does not make one of such elections within the Option Period, the Selling Party shall have the right to sell its interest to the person or entity who made the Third Party Offer for cash consideration only on terms and conditions no more favorable to such person or entity within sixty (60) days after the expiration of the Option Period. If such sale is not completed within such sixty (60) day period, the offer from the Selling Party shall be deemed to have been revoked and any subsequent offer from such Selling Party shall be subject to the right of first refusal described herein. + +12.2. TERMINATION OF THE JOINT VENTURE. + +(a) If there is an Event of Bankruptcy with respect to either Party, then the other Party may elect either to terminate the Joint + + + + + +Venture (and follow the liquidation procedures set forth in Article 22.3) or to purchase the interest of the Party who had an Event of Bankruptcy for a purchase price equal to the market value of such interest as determined pursuant to subsection (c). Such election shall occur within 60 days after the Event of Bankruptcy unless prohibited by a bankruptcy court or other court of competent jurisdiction; provided that once any such prohibition is no longer applicable, such election shall occur promptly thereafter. The other Party shall provide written notice to the Party who had an Event of Bankruptcy upon the election of the other Party, which notice shall specify the effective date of the action elected by the other Party. + +(b) If the Parties shall agree to terminate the Joint Venture pursuant to the terms of the Agreement, the Parties agree to terminate the Joint Venture and follow the liquidation procedures set forth in Article 22.3 unless the Parties otherwise agree. + +(c) Upon delivery by either Party of such Party's election to purchase the interest of the other Party upon the other Party having an Event of Bankruptcy, the Board shall meet for the purpose of retaining a mutually acceptable, qualified investment banking, accounting or appraisal firm of national reputation with no conflict of interest with respect to either Party or any Affiliate thereof (a "Qualified Expert") to determine the market value of the Operating Company. If the Board is unable to select by unanimous agreement a single Qualified Expert, then the appraisal shall be arrived at by mutual agreement of two Qualified Experts, one selected by each Party. If in such an instance either Party shall fail to appoint a Qualified Expert within fifteen (15) days after a written request to do so, such failure shall be deemed acceptance of the conclusions and appraisal of such Qualified Expert as has been appointed. If the Board unanimously selects a single Qualified Expert, the value of the Operating Company as determined by such Qualified Expert shall be final and binding upon both of the Parties. If two Qualified Experts are chosen, one by each Party, and such Qualified Experts either agree or the greater of the two valuations is no more than 110% of the lesser valuation, the average of the valuations of the Operating Company as determined by each such Qualified Expert shall be the value of the Operating Company for the purposes of this Article 12.2 and shall be final and binding upon both Parties. If two Qualified Experts are chosen, one by each Party, and such Qualified Experts cannot agree within thirty (30) days of the appointment of the second of such Qualified Expert (or their valuations differ by more than 10%), then (i) the two appointed Qualified Experts shall select a third Qualified Expert, (ii) if the determination of any of the three Qualified Experts is greater than the two smallest determinations or smaller than the two greatest determinations, in either case by more than 125% of the difference between such other determinations, such determination will be disregarded and the average of the two remaining determinations shall be final and binding upon both of the Parties and (iii) otherwise, the average of the three determinations of the three Qualified Experts shall be final and binding upon both of the Parties. The market value for the interest of the Party who has had an Event of Bankruptcy shall equal the market value of the Operating Company as determined above times the interest of such Party in the Operating Company as stated in Article 4.1. + +13. LIABILITIES. + +13.1. Igene (the "Indemnifying Party") shall indemnify and hold harmless T&L, its Affiliates, the Operating Company and the Manufacturing Company, and their respective officers, directors, shareholders and agents (collectively, the "Indemnified Parties") from and against any and all claims, demands, actions, lawsuits, proceedings, liabilities, losses, costs and expenses (including reasonable attorney's fees and disbursements incurred by any of the Indemnified Parties in respect of any such claims, demands, actions, lawsuits or proceedings) arising from any actual or alleged infringement of any patent, trademark, trade name, trade dress, copyright, trade secret or other proprietary right (whether under the laws of any country or of the European Union) resulting from the ownership or use of the Technology by Igene or as contemplated herein, including without limitation a failure of the Operating Company to have unencumbered rights in the Technology as a result of the pending lawsuit (the "Lawsuit") styled Archer Daniels Midland Corporation v. Igene Biotechnology, Inc., United States District Court for the District of Maryland, Case No. S97-2358, or any similar claim. + +* + +* Intentionally deleted pursuant to a request for confidential treatment. + +14. WARRANTIES BY THE PARTIES + +14.1. Each Party represents and warrants to the other Party that: + +14.1.1. General Corporate Matters. (i) it is duly formed and validly existing, and it is in good standing in the state of its incorporation and in each other state except where the failure to be in good standing would not have a material adverse effect on the formation or operation of the Joint Venture, (ii) it is duly authorized and has the requisite power to execute this Agreement and to form the Joint Venture and to do all other things necessary to implement the various agreements contemplated in and by this Agreement, (iii) this Agreement has been duly executed, and constitutes the legal, valid and binding obligation of such Party, enforceable against such Party in accordance with its terms, except + + + + + +to the extent that the enforceability thereof against such Party may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors' rights generally or by equitable principles of general application, (iv) none of such Party's Transferred Assets are subject to any liens or security interests (except liens for taxes and materialsmen's liens being contested in good faith which are not material in amount), and (v) it has disclosed to the other Party all material facts and circumstances existing on the date hereof which could reasonably be likely to, in such Party's commercially reasonable judgment, have a material adverse effect on the Joint Venture. + +14.1.2. Litigation. There are no suits, actions, arbitrations, or legal, administrative or other proceedings or governmental investigations pending or, to its knowledge, threatened against or affecting it or any of its shareholders or members that if decided adversely to it or its shareholders or members could reasonably be expected to have a material adverse effect on its business, operations or financial condition or that could reasonably be expected to prevent the consummation of the Joint Venture, except for the Lawsuit. + +14.1.3. Bankruptcy. There are no attachments, executions or assignments for the benefit of creditors, or voluntary or involuntary proceedings in bankruptcy, or under any other debtor relief laws, contemplated by or pending or threatened against it. Without limiting the generality of the foregoing, none of the following have been done by, against or with respect to it: (i) the commencement of a case under Title 11 of the U.S. Code, as now constituted or hereafter amended, or under any other applicable federal or state bankruptcy law or other similar law; (ii) the appointment of a trustee or receive of any property interest; (iii) an assignment for the benefit of creditors; (iv) an attachment, execution or other judicial seizure of a substantial property interest; (v) the taking of, failure to take, or submission to, any action indicating an inability to meet its financial obligations as they accrue; or (vi) a dissolution or liquidation. + +14.2. Igene represents and warrants to T&L (i) that the Technology, the Brands and all other Transferred Assets set forth in Appendix 3.2 constitute all know-how and intellectual property owned, used or possessed by Igene with respect to the Field of Agreement, (ii) that it has good and workable title to the Transferred Assets, free and clear of any and all liens, claims and encumbrances, except for the Lawsuit, and (iii) this Agreement and each document contemplated hereby is sufficient to transfer Igene's right, title and interest in the Transferred Assets to the Operating Company. + +14.3. Igene warrants to T&L that the Technology, the Brands and other Transferred Assets do not infringe on any third-party patent, trademark or other rights. + +14.4. T&L represents and warrants to Igene that (i) the Manufacturing Facility will be constructed in accordance with the terms of the Construction Agreement, free and clear of all liens, claims and encumbrances and (ii) the Manufacturing Facility will be a turnkey project capable of producing 14,000 kg per year of pure Astaxanthin. + +15. CONDITIONS PRECEDENT; TERMINATION OF AGREEMENT. + +15.1. The obligation of each Party to consummate the agreements and covenants set forth herein is subject to the satisfaction (or waiver) on the Effective Date of the following conditions: + +A. Subject to Article 2.3, if necessary, approval shall have been received under the HSR Act and any other applicable competition law, or the waiting period thereunder shall have expired; + +B. Any other necessary governmental approvals for the formation and operation of the Joint Venture as contemplated herein shall have been given (either expressly or by operation of law); and + +C. Approval of the Board of Directors of each of T&L and Igene shall have been given. + +15.2. Without prejudice to the foregoing, without liability to the other Party except in the case of a breach of this Agreement, either Party shall be entitled to terminate this Agreement at any time from the date hereof up to Formation, if: + +A. Subject to Article 2.3, an order of any court, arbitrator, or governmental, regulatory or administrative body, shall be in effect which restrains or prohibits the transactions contemplated hereby; + +B. Any final and nonappealable determination of the Lawsuit or any other claim subject to indemnification under Article 13 shall arise either of which, in the business judgment of T&L, restricts the ability of Igene to perform its obligations hereunder or with respect to the Operating Company or the Joint Venture; + + + + + +C. There has arisen, after the date of this Agreement, any bona fide claim or litigation involving, directly or indirectly, one or both of the Parties, of any member of either Party, or any shareholder, director, officer, employee, agent, consultant or representative of any Party, which may reasonably be expected to materially and adversely affect the Transferred Assets and/or the business falling with the Field of the Agreement; or + +D. There has been a material adverse change reasonably outside of the control of the Party seeking to terminate with respect to the Transferred Assets of the other Party. + +E. The Effective Date has not occurred on or prior to March 3, 2003. + +16. OPERATIONS UNTIL TRANSFER. + +From and after the date hereof, each Party will use its reasonable best efforts to ensure that (i) no liens or security interest shall be created or levied on the Transferred Assets (except liens for taxes and materialsmen's liens being contested in good faith which are not material in amount), and (ii) the assets to be transferred to the Operating Company, shall be operated in the ordinary course of business consistent with past business practices, and no portion thereof (except inventory sold in the ordinary course of business) shall be sold, conveyed, or otherwise transferred prior to transfer to the Operating Company. + +17. ASSIGNMENT; PLEDGE OF JOINT VENTURE INTEREST. + +Except as permitted pursuant to Article 13.1 hereof, neither Party shall assign or transfer this Agreement, or any and all related rights and obligations in the Joint Venture or all rights and all obligations in any related agreements, without the prior written consent of the other Party, which consent may not be unreasonably withheld or delayed; provided, however, any Party may assign any or all of its interests in this Agreement or the Operating Company to a wholly-owned subsidiary (which shall at all times remain a wholly-owned subsidiary, and such subsidiary may be a partnership, limited liability company, or corporation) or commonly-owned affiliate of Igene or T&L, as the case may be, provided that the ultimate parent company (e.g. Igene or T&L, as the case may be) shall guarantee such subsidiary's or affiliate's performance hereunder. Without the prior written consent of the other Party, neither Igene nor T&L, as the case may be, shall pledge, encumber, or grant a security interest in, any interest (stock, membership or partnership) in the Operating Company. Any permitted assignee shall, prior to the effectiveness of any assignment to such assignee, agree in writing to be bound by, and assume each obligation of the assigning Party under, this Agreement, and each other document and agreement relating to the Joint Venture to which the assignor (or its Party) is a Party, which such written agreement shall be in a form satisfactory to the Party not assigning its interest hereunder. + +18. COSTS, FEES AND TAXES. + +18.1. Unless the Parties agree otherwise in writing and except as otherwise provided herein, each Party shall bear and pay its own costs, expenses and fees incurred in connection with the making of this Agreement. + +18.2. Any and all stamp duties, transfer taxes, recording and filing fees, and other similar statutory costs, incurred or payable in connection, directly or indirectly, with the transfer to the Operating Company of any of the Transferred Assets, or the implementation of this Agreement and the formation of the Joint Venture, shall be borne and paid by the Joint Venture. Notwithstanding the previous sentence, any and all taxes relating to income, capital gains, or other similar taxes or charges shall be borne by the Party transferring the Transferred Assets to the Operating Company. + +19. NOTICES. + +19.1. Any notice to be served by one Party on the other in connection with this Agreement shall be validly served if delivered by overnight delivery service (costs pre-paid), confirmed fax, or delivered in person, to the following addresses (or such other address as a Party may specify from time to time in accordance with this Article): + +A. Tate & Lyle Fermentation Products Ltd. c/o Tate & Lyle North America Inc. 2200 E. Eldorado Street Decatur, Illinois 62521 Attn: General Counsel FAX: 217-421-4704 + +B. with a copy to: + +Tate & Lyle North America Inc. + + + + + +2200 E. Eldorado Street Decatur, Illinois 62521 Attn: Chief Financial Officer FAX: 217-421-4507 + +C. Igene Biotechnology, Inc. 9110 Red Branch Road Columbia, Maryland 21045-2024 Attention: Stephen F. Hiu FAX: 410-730-0540 TEL: 410-997-2599 + +with a copy to: + +Stroock & Stroock & Lavan LLP 180 Maiden Lane New York, New York 10038 Attention: Martin H. Neidell FAX: 212-806-7836 TEL 212-806-5836 + +After the Effective Date, the Operating Company shall give each of the Parties appropriate addresses for notices. + +19.2. Any notice validly served on a business day of the recipient and in accordance with Article 19.1 shall be deemed served on the day of receipt in the case of faxed, hand-delivered, and overnight delivery service notices. + +20. LAW. + +This Agreement shall be governed and construed in accordance with the laws of the State of Delaware, without reference to the conflicts of laws principles thereunder. + +21. MISCELLANEOUS PROVISIONS. + +21.1. THIRD PARTIES. Except as expressly stated herein with respect to members of each Party, no person or entity not a Party to this Agreement (including, without limitation, any employee of either Party or the Joint Venture) shall be a third-party beneficiary of any provision of this Agreement, and nothing contained herein shall be construed or deemed to confer any benefit or right upon any third party. + +21.2. BROKERS. Each Party agrees to indemnify and hold the other harmless against any and all liability to any broker retained by such Party in connection with this Agreement and the transactions contemplated by this Agreement. + +21.3. PRESS RELEASES. Except as required by law or securities exchange rules, public announcements and press releases concerning this Agreement and the transactions contemplated hereby shall be made only as mutually agreed by the Parties. + +21.4. ENTIRE AGREEMENT; CONFIDENTIALITY. + +A. This Agreement, including the Appendices attached to this Agreement and the Recitals set forth herein, constitutes the entire agreement between the Parties pertaining to the subject matter hereof, and all prior representations, discussions and negotiations between the Parties and/or their representatives pertaining to the subject matter of this Agreement are superseded. Notwithstanding the preceding sentence, the terms and provisions of the certain Nondisclosure Agreement dated as of March 19, 2001 as amended August 5, 2002 between the Parties shall remain in effect. + +B. Each Party (the "Recipient Party") agrees to hold in confidence and not to disclose either directly or indirectly to any third party any technical, financial, commercial or other information (the "Information") as may be revealed or disclosed orally, in writing or otherwise to it by the other Party or by the Joint Venture (the "Disclosing Party") and shall refrain from using any such Information for any purpose whatsoever other than for the purpose(s) for which the Information was disclosed or unless previously approved in writing by the Disclosing Party; provided, however, that these obligations shall not apply to Information: + + + + + +(i) which at the time of disclosure to the Recipient Party was in the public domain, + +(ii) which after disclosure to the Recipient Party becomes part of the public domain through no fault of said Party, + +(iii) which at the time of disclosure to the Recipient Party was in its possession or was independently developed by the Recipient Party (and the Recipient Party can demonstrate such by written documents dated before the time of disclosure), + +(iv) which disclosure is obtained by the Recipient Party from a third party which has not, either directly or indirectly, received the Information from the Disclosing Party; or + +(v) which disclosure is required otherwise by law, unless compelled to disclose such documents or information by judicial or administrative process. + +Specific Information shall not be deemed to be within the foregoing exceptions merely because such specific Information may be construed as being within broader, non- confidential information which is either in the public domain or in the possession of the Receiving Party at the time of the disclosure of such Information, nor shall a combination of features which form Information be deemed to be non-confidential merely because the individual features, without being combined, are non-confidential. In any such instance where disclosure appears to be compelled by law, the first Party will notify the other Party so that such Party may avail itself of such measures as may be available for protecting the confidentiality of such information; provided, however, that neither Party will be prohibited from using such documents and information in litigation against the other Party. + +C. The Parties shall cause the Operating Company and the Manufacturing Company to adhere to similar obligations of confidentiality as set forth above with respect to Information received by it from either Party. + +D. Unless otherwise agreed between the Parties, the provisions of this clause shall survive the termination of this Agreement and continue to be in force thereafter for a period of five (5) years. + +21.5. COUNTERPARTS. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument. Signatures to this Agreement may be given by facsimile or other electronic transmission, and such signatures shall be fully binding on the Party sending the same. + +21.6. AMENDMENT; WAIVER; HEADINGS. No waiver, modification or amendment of any provision, term, or condition of this Agreement shall be of any force or effect unless in writing and executed by each of the Parties. No usage of trade, course of dealing or performance shall modify the terms or conditions of this Agreement. The headings in this Agreement are for convenience only and shall not be deemed a part of this Agreement. + +21.7. AUDITORS. The Parties will agree on the independent auditors of the Joint Venture. From time to time, each Party shall have the right to have its own internal or external auditors review the books and records of the Joint Venture. + +21.8. SUPREMACY. Other than as set forth in this Agreement to the contrary, in the event of any conflict or inconsistency between the provisions of this Agreement and any other document related to the subject matter of this Agreement, which may be entered into by the Parties or between a member of any Party and the Joint Venture, from time to time, the provisions of this Agreement shall prevail in each case, unless the Parties otherwise expressly agree in writing. + +21.9. TAX MATTERS. Each Party shall prepare its tax reports and returns in a manner not inconsistent with the tax reports and returns of the Operating Company, except in the case of manifest error. + +21.10. GUARANTEE. Parent hereby guarantees the performance by T&L of all of its obligations hereunder. + +22. DISPUTE RESOLUTION PROCEDURES; LIQUIDATION. + +22.1. At any time for so long as both T&L and Igene own an interest in the Operating Company, at the request of either Party in a written notice to the other Party's appointees to the Board, the Parties agree to negotiate in good faith to resolve expeditiously any controversies, claims or disputes between the Parties that may arise from time to time under this Agreement or otherwise relating to the Joint Venture (each a "Board Dispute"). If, after a Board Dispute is addressed and recorded in the minutes in two regular + + + + + +quarterly Board meetings without resolution of such Board Dispute, then any such matter not so resolved shall be referred (by written notice by either Party to the other Party's general counsel and the other Party's appointees to the Board) to the Party Heads, who shall have an initial meeting with respect to such matters within ten days of the date of such referral notice, and who shall thereafter negotiate in good faith with each other for an additional twenty day period following the date of such initial meeting in an attempt to resolve any open issues. + +22.2. If any Board Dispute is not resolved through the procedure set forth in Article 22.1 after expiration of all of the time specified therefor, either Party, in the thirty day period beginning upon the end of the twenty day period described in Article 22.1, may provide the other Party with a written notice (the "Offer Notice") stating that such Board Dispute is not resolved and setting forth a price (the "Offer Price") and a list of three acceptable closing dates not less than ninety days after the expiration of the twenty-one day period referred to in the next sentence; provided, that an Offer Notice may not be served earlier than (i) with respect to a Board Dispute arising pursuant to Article 9.5(a) (General Manager Appointment), 9.5(k) (Operating Plans) (except as provided in subclause (ii) below), eighteen months from the Commencement Date, (ii) a Board Dispute arising pursuant to Article 9.5(b) (Capital Expenditures) or 9.5(k) (Operating Plans) that involves a contemplated expenditure which can be financed solely by the Joint Venture from its internal resources and/or using funds provided on normal commercial terms by any other party without any contribution or guaranty from either Party, eighteen months from the Commencement Date and (iii) with respect to any other Board Dispute, fifty-four months from the Effective Date. Upon receipt of an Offer Notice, the other Party must elect prior to the expiration of twenty-one days either to (a) sell its interest in the Operating Company for the Offer Price or (b) purchase the interest of the Party providing the Offer Notice for the Offer Price, which election in either case may be in a written notice which also specifies which of the closing dates identified in the notice delivered to such Party is preferred by such Party. On the closing date specified in the response notice, the Parties shall consummate the transaction selected in the response notice unless both Parties expressly agree otherwise. The Party initiating the notice provided herein, shall be required to provide such Support Services as agreed in the appropriate Support Services Agreement described in Article 11.1 to the surviving entity at a price (that shall be reasonably consistent with the methodology used for determining prices prior to such conveyance) to be agreed upon by the Parties for a transition period to allow the Operating Company to continue to obtain such services. Such transition period shall not exceed 12 months for the services set forth in Article 11.1.1 and Article 11.1.2 and shall not exceed 24 months for the services set forth in Article 11.1.4. The Party whose interest in the Operating Company is purchased shall take all reasonable steps to cooperate in the transition with the other Party so that the Joint Venture will be able to continue as an independent and functioning business after termination of the Support Services. For all purposes under this Article 22.2, if each Party delivers an Offer Notice to the other Party, the Offer Notice that is received on the earliest date shall be effective. If each Party receives an Offer Notice from the other Party on the same date, then the Offer Notice containing the highest cash Offer Price shall be effective. + +22.3. In the event the Parties (a) agree to liquidate the Joint Venture, (b) are required to liquidate the Joint Venture pursuant to Article 12.2 or (c) do not send any notice under Article 22.2 in the period allowed therefor, either Party may, by notice to the Board of such circumstance (the "Liquidation Notice"), commence the following liquidation process. Upon the Board's receipt of a Liquidation Notice, the Board shall meet to determine how to proceed. The Board may retain or appoint a Qualified Expert or any other person to value the Joint Venture and to advise it in liquidating the Joint Venture. Each Party may also retain or appoint such advisors and experts as it may deem appropriate to advise such Party with respect to the liquidation of the Joint Venture. From and after the Board's receipt of a Liquidation Notice, the Board shall proceed with the liquidation of the Joint Venture, and shall have no authority and shall not continue the regular operations of the Joint Venture except to the extent necessary or appropriate to preserve or increase the value of the assets of the Joint Venture; provided that, the Board may elect to, and upon express election by the Board thereby shall, for a specified period not to exceed six months, continue regular operations of the Joint Venture solely for the purpose of preserving its value while seeking to sell the Joint Venture as a whole, but if such period expires prior to the sale of the Joint Venture as a whole, the Board shall thereafter be required to sell the assets of the Operating Company reasonably expeditiously. The proceeds of any such liquidation shall be first used to pay the fees and expenses of the Qualified Experts and all remaining proceeds after payment of such fees shall be distributed between the Parties in proportion to their respective capital accounts. + +23. JOINT VENTURE TO BE BOUND. + +On the Formation Date, each of the Parties shall cause the Joint Venture (and each of its constituent entities) to agree to and be irrevocably bound by the terms and provisions of this Agreement, including, without limitation, Article 13. + +[remainder of page intentionally left blank] + +IN WITNESS of the foregoing, the Parties have signed this Agreement as to the date first written above. + +TATE & LYLE FERMENTATION PRODUCTS LTD. IGENE BIOTECHNOLOGY, INC. + +/s/ + + + + + +/s/ + +By: + +Its: + +Agreed and accepted for purposes of Section 21.10 hereof only: + +TATE & LYLE INDUSTRIES LTD. + +/s/ + +By: + +Its: + +By: + +Its: \ No newline at end of file diff --git a/full_contract_txt/IMAGEWARESYSTEMSINC_12_20_1999-EX-10.22-MAINTENANCE AGREEMENT.txt b/full_contract_txt/IMAGEWARESYSTEMSINC_12_20_1999-EX-10.22-MAINTENANCE AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..ce1f560f0ba9ce9d869e5f86b4590b4eda0cc9bf --- /dev/null +++ b/full_contract_txt/IMAGEWARESYSTEMSINC_12_20_1999-EX-10.22-MAINTENANCE AGREEMENT.txt @@ -0,0 +1,227 @@ +MAINTENANCE AGREEMENT + + BETWEEN + + XIMAGE + + AND + +SAGEM S.A., DEPARTEMENT MORPHO SYSTEMES + + Page 1 + + TABLE OF CONTENTS + + 1. Definitions...................................................................3 + +2. Term of Agreement.............................................................4 + +3. Software Maintenance Services.................................................4 + +4. Performance of Services.......................................................4 + +5. Customer Obligations and Warranties...........................................5 + +6. Charges.......................................................................5 + +7. Non disclosure................................................................5 + +8. Response by XIMAGE............................................................6 + +9. Intervention on site..........................................................6 + +10. Return and Repair.............................................................7 + +11. Injunctive Relief/Termination.................................................7 + +12. Indemnification...............................................................7 + +13. Termination...................................................................7 + +14. Disclaimer of Warranty........................................................8 + +15. Limitations of Liability......................................................8 + +16. Arbitration...................................................................9 + +17. Force Majeure.................................................................9 + +18. Successors and Assigns........................................................9 + +19. Amendments....................................................................9 + +20. Entire Agreement and Waiver...................................................10 + + Page 2 + +This Agreement is entered into this 31 January, 1994 by and between SAGEM S.A., Departement MORPHO Systemes whose address is 33, route de la Bonne Dame, 77300 FONTAINEBLEAU, FRANCE (hereinafter referred to as MORPHO) and XIMAGE corporation whose address is 1050 North Fifth Street, SAN JOSE, California 95112 (hereinafter referred to as XIMAGE) for the Customer Support and Software Maintenance. + + WITNESSETH + +WHEREAS, XIMAGE and MORPHO have signed the "ForceField PSS Agreement" for the purchase of services and the use of Software referred to hereafter as the ForceField PSS System. + +WHEREAS, XIMAGE has granted to MORPHO a perpetual and non-exclusive license, transferable only to the Kuwait Government and solely for use with the PSS to be installed and used as a portrait storage system in connection with the AFIS sold to the Kuwait Government in Kuwait. + +1. DEFINITIONS + +The terms defined in this Section shall have the meaning as follows: + + + + + +FIRST LEVEL OF MAINTENANCE means MORPHO will require the Kuwait Government to contact MORPHO maintenance personnel for all problems associated with the installed Force Field PSS System. MORPHO will respond with fixes and/or workarounds to keep the system operational. MORPHO personnel may document any software problems and refer them to XIMAGE for additional fixes or patches. + +SECOND LEVEL OF MAINTENANCE means if Morpho's personnel can not start or keep the system operational because of software problems, XIMAGE should be contacted to provide all documented and replicated software Errors. XIMAGE will make best efforts to support Morpho by any means available. Such an undertaking is made in the knowledge that a telecommunications line between the site and XIMAGE may not be in existance. + +PROGRAM means ForceField PSS software developed by XIMAGE including the Sybase and Focus software and includes all software provided under the Maintenance Agreement. + +PROGRAM SPECIFICATIONS means the specifications published by XIMAGE for a particular version of the Program (if no such specification is available, then the relevant documentation for a particular version of the Program). + +EFFECTIVE DATE shall mean the Date of Installation of the PSS in Kuwait, i.e. December 10, 1993. + +ERROR means any material failure to operate in accordance with the program specifications delivered from the specifications appended to the base agreement. Error includes malfunctions and defects. + + Page 3 + +2. TERM OF AGREEMENT + +XIMAGE's obligations hereunder shall become effective upon the "Effective Date" and, unless sooner terminated as provided herein, shall remain in full force and effect for at least one year thereafter. This Agreement shall automatically renew for consecutive one (1) year terms at XIMAGE's then prevailing rates at the end of each one (1) year term unless either party gives at least sixty (60) days prior written notice of the non-renewal of this Agreement. + +3. SOFTWARE MAINTENANCE SERVICES + +XIMAGE will provide to MORPHO during the term hereof "Software Maintenance Services" which shall include remedial maintenance service (i.e, error fixing and/or work arounds) for any significant error, malfunction or defect (collectively in "Error") in the Software so that the Software will operate in accordance with the specifications set forth in the related documentation. Correction of Errors is subject to MORPHO's prompt notification to XIMAGE of the nature and description of the Error provided that the Error is not caused by the abuse, misuse or neglect of the products by MORPHO. In addition, XIMAGE will provide the following as additional Customer Support Services: + +(a) telephone support as reasonably requested by MORPHO at the rate of $100 per hour for all hours in excess of 40 hours in any one-year term; + +(b) on-site visits to MORPHO's sites as determined to be necessary by Morpho for Error correction, unless error correction is normally performed via Dial up from the XImage facility in San Jose; + +(c) give title to all modifications and improvements to the PSS Software which XIMAGE generally makes available to its other customers (at no additional Charge) under standard software maintenance agreements relating to the Software. + +If MORPHO requests XIMAGE to perform any other services, the related terms and conditions shall be based on further separate agreement between the parties. This Agreement and the rights and duties contained herein are not be deemed to cover maintenance services with respect to hardware. Such may be decided in accordance with paragraph 9. + +4. PERFORMANCE OF SERVICES + +When XIMAGE provides Software Maintenance Services which require the use of the hardware portion of equipment which utilizes the Software (the "Equipment"), MORPHO shall make such Equipment available to XIMAGE at and for reasonable times, and in no event will MORPHO charge XIMAGE for such use of such Equipment. All Software Maintenance Services covered by the Maintenance Charges will be performed during the regular business hours of XIMAGE (Monday-Friday, exclusive holidays). If Software Maintenance Services are performed outside regular business hours, MORPHO will pay the additional charges, if any, as at XIMAGES then current charges. + + Page 4 + + + + + +5. CUSTOMER OBLIGATIONS AND WARRANTIES + +The obligations of XIMAGE to provide Software Maintenance Services are subject to MORPHO using the Equipment in accordance with their respective operating manuals and recommended procedures, and causing proper and recommended Equipment Maintenance Services to be performed, including selecting a site which complies with the environmental requirements suggested by the manufacturer of the Equipment or XIMAGE and utilizing appropriate back-up procedures with respect to the Software and data. + +6. CHARGES + +The total annual maintenance charge amounts to US $24502 for the first year of maintenance. MORPHO shall pay all charges under this Agreement, including the total Annual Maintenance Charge, within thirty (30) days after receipt of a valid invoice from XIMAGE. Thereafter, the then applicable Annual Maintenance Charge shall be invoiced to, and paid by MORPHO prior to the beginning of the next annual maintenance period. All other charges under this Agreement shall be invoiced by XIMAGE and shall be due and payable within thirty (30) days after receipt of the invoice. The Annual Maintenance Charge includes all federal, state, county, local, or other taxes arising in the United States or its states (or other internal jurisdictions), but does not include all taxes arising under any law other than that of the United States. MORPHO shall be responsible for all taxes arising under the law of any jurisdiction except the United States and its states (and other internal jurisdisctions). + +7. NON DISCLOSURE + +Each party agrees to maintain in confidence what it knows or has reason to know is regarded as confidential by the other party ("Confidential Information"). The Confidential Information will include, but will not be limited to, trade secrets, the structure, sequence and organization of the program, marketing plans, blueprints, techniques, processes, procedures and formulae. Each party will use the Confidential Information solely to accomplish the purposes of the Agreement. Each party will not disclose the Confidential Information to any person except its employees or consultants to whom it is necessary to disclose the Confidential Information for such purposes. Each party agrees that the Confidential Information will be disclosed or made available only to those of its employees or consultants who have agreed to receive it under termes at least as restrictive as those specified in this Agreement. Each party will use reasonable measures to maintain the confidentiality of the Confidential Information, but not less than the measures it uses for its confidential information or similar type. Each party will immediately give notice to the Disclosing Party of any unauthorized use or disclosure of the Confidential Information. The Recipient agrees to assist the disclosing party in remedying any such unauthorized use or disclosure of the Confidential Information. This obligation will not apply to the extent that the Recipient can demonstrate: + +(a) the disclosed information at the time of disclosure is part of the public domain; + + Page 5 + +(b) the disclosed information became part of the public domain, by publication or otherwise, except by breach of the provisions of this Agreement; + +(c) the disclosed information can be established by written evidence to have been in the possession of the Recipient at the time of disclosure; + +(d) the disclosed information is received from a third party without similar restrictions and without breach of this Agreement; or + +(e) the disclosed information is required to be disclosed by a government agency to further the objectives of this agreement, such as to obtain permission to distribute the Program of by a proper court of competent jurisdiction; provided, however, that the Recipient wil use its best efforts to minimize the disclosure of such information and will consult with and assist the Disclosing Party in obtaining a protective order prior to such disclosure. + +8. RESPONSE BY XIMAGE. + +XIMAGE will maintain a 24 hour a day reporting facility to accept calls from MORPHO. XIMAGE agrees to respond to any telephone call made, within 30 minutes. + +9. INTERVENTION ON SITE. + + + + + +In the event that MORPHO require the attendance of an XIMAGE engineer on site, XIMAGE shall upon such a demand (either written or verbal) make their best efforts to dispatch the engineer as expeditiously as possible. XIMAGE undertake to have an engineer on site in Kuwait within 72 hours from the time the request was made, exclusive of the time required to arrange for travel and obtain the required documents, and the actual travel time itself. In such cases where on site intervention is required MORPHO shall pay for all travel expenses (Business Class), hotel accomodation and reasonable subsistence. XIMAGE shall charge for the time of the engineer only when he/she is on site or in exceptional circumstances when away from the site but directly involved in work connected with the PSS. XIMAGE will not charge for travel time. + +All interventions on site are subject to a minimum total charge of $2,000. Hourly rate for intervention is $125.00 (one hundred and twenty five Dollars). + +Following any intervention on site XIMAGE shall provide a full written technical report to MORPHO. XImage is not required to send an engineer to the Kuwait site if either active or potentially pending hostilities exist in the region, and a reasonable person might fear the possibility of bodily harm. + + Page 6 + +10. RETURN AND REPAIR + +MORPHO may, at its option, return equipment to XIMAGE for repair. XIMAGE will make its best efforts to liaise with the supplier of the equipment and to expeditiously repair and return the equipment. XIMAGE reserves the right to charge an administration fee of $100 per shipment in such cases. + +11. INJUNCTIVE RELIEF/TERMINATION + +MORPHO acknowledges and agrees that any violation of the provisions of Section 7 herein by MORPHO will result in irreparable harm to XIMAGE and that money damages would provide inadequate remedy. Accordingly, in addition to any other rights and remedies available to XIMAGE hereunder or at law, XIMAGE shall be entitled to injunctive or other equitable relief to restrain any such violation and to such other and further relief as a court may deem proper under the circumstances. In addition to any other rights of XIMAGE hereunder, the rights granted MORPHO to use the Software by license or otherwise may be terminated by XIMAGE for any material breach of Section 7 upon written notice given to MORPHO and MORPHO shall return to XIMAGE all of the Software. + +12. INDEMNIFICATION + +MORPHO hereby indemnifies and holds XIMAGE harmless from any and all claims, suits, actions and procedures brought or filed by third parties and from all damages, penalties, losses, costs and expenses (including without limitation, attorney's fees) arising out of, or related to, any act or omission of MORPHO and its employees or agents in connection with MORPHO's obligation herein. + +XIMAGE hereby indemnifies and agrees to hold MORPHO harmless from any claim of any third party that any of the Software infringes any United States patent, copyright, trademark or other property right held by a third party provided that XIMAGE is notified promptly by MORPHO of any such claim (including any threatened claim) and XIMAGE shall have had sole control of the defense with respect to same (including the settlement of such claim). The foregoing indemnification by XIMAGE shall not apply with respect to any claim based, in whole or part, on any modification of the Software made by any person other than XIMAGE. + +13. TERMINATION + +Without prejudice to any other of its rights or remedies, either party may elect to terminate the rights and obligations contained in this Agreement: + + Page 7 + +(a) Upon sixty (60) days' written notice if the other party has failed to perform any material obligation required to be performed by it pursuant to this Agreement and such failure has not been cured within such a sixty (60) day period, or + +(b) Upon sixty (60) days' written notice if the other party has failed to make timely payment of any amounts required to be paid hereunder, or + + + + + +(c) Immediately, (i) if a petition in bankruptcy has been filed by or against the other party, (ii) if the other party has made an assignment for the benefit of creditors, (iii) if a receiver has been appointed or applied for by the other party, or (iv) if the other party has admitted in writing its inability to pay its debts as they become due and payable. + +14. DISCLAIMER OF WARRANTY + +XIMAGE MAKES NO WARRANTY OF ANY KIND, WHETHER EXPRESS OR IMPLIED (INCLUDING WARRANTIES OR MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE) WITH RESPECT TO THE SERVICES, SOFTWARE OR DOCUMENTS PROVIDED (OR TO BE PROVIDED) HEREUNDER. + +15. LIMITATIONS OF LIABILITY + +MORPHO agrees that XIMAGE's total liability to MORPHO for any damages suffered in connection with, or arising out of, this Agreement or MORPHO's use of any documentation, product or service provided (or to be provided) hereunder, regardless of whether any such liability is based upon contract, tort or other basis, shall be limited to an amount not to exceed the basic Monthly Maintenance Charges, for a sixty (60) day term under this Agreement. + +IN NO EVENT SHALL, XIMAGE BE LIABLE TO MORPHO FOR ANY INCIDENTAL, CONSEQUENTIAL, SPECIAL OR INDIRECT DAMAGES (INCLUDING WITHOUT LIMITATION, DAMAGES ARISING FROM LOSS OF BUSINESS, DATA, PROFITS OR GOODWILL) INCURRED OR SUFFERED BY MORPHO IN CONNECTION WITH, OR ARISING OUT OF, THIS AGREEMENT OR MORPHO'S USE OF ANY DOCUMENTATION OR SOFTWARE OR SERVICES PROVIDED, OR TO BE PROVIDED, HEREUNDER, EVEN IF XIMAGE HAS BEEN APPRISED OF THE LIKELIHOOD OF THE SAME. NO ACTION, REGARDLESS OF FORM, RELATED TO TRANSACTIONS OCCURRING UNDER, OR CONTEMPLATED BY, THIS AGREEMENT MAY BE BROUGHT BY EITHER PARTY MORE THAN ONE (1) YEAR AFTER THE CAUSE OF ACTION HAS ACCRUED. + + Page 8 + +16. ARBITRATION. + +Except as provided in Section 8 herein, in the event of any dispute or controversy between the parties hereto arising out of or relating to this Agreement or any transaction contemplated hereunder, such dispute or controversy shall be submitted to arbitration under the Commercial Rules of Arbitration of the American Arbitration Association sited in Washington State, USA for decision in any such matter in accordance with the then applicable rules of the American Arbitration Association or any successor organization. The determination of the arbitrators shall not be subject to judicial review, provided however, that any award or determination rendered by the arbitrators may be enforced any court of jurisdiction. + +17. FORCE MAJEURE. + +XIMAGE shall not be liable for any failure or delay in performing its obligation hereunder due to any cause beyond its reasonable control, including without limitation, fire, accident, acts of public enemy, war, rebellion, labor dispute or unrest, insurrection, sabotage, transportation delays (other than administrative oversights), shortage of raw material, energy or machinery, acts of God, government or the judiciary. + +18. SUCCESSORS AND ASSIGNS + +The interests of MORPHO in this Agreement are personal and shall not be assigned, transferred, shared or divided in any manner by MORPHO without a prior written consent of XIMAGE. Subject to the foregoing, this Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their heirs, representatives, successors and permitted assignees. + +19. AMENDMENTS + +No supplement, modification or amendment of any term, provision or condition of this Agreement shall be binding or enforceable unless executed in writing by the parties hereto. + + Page 9 + +20. ENTIRE AGREEMENT AND WAIVER + + + + + +This Agreement contains the entire agreement between the parties hereto and supersedes all prior contemporaneous agreements, arrangements, negotiation and understandings between the parties hereto, relating to the subject matter hereof except any prior or contemporaneous Software licenses between the parties. There are no other understandings, statements, promises or inducements, oral or otherwise, contrary to the terms of this Agreement. No representations, warranties, covenants or conditions, express or implied, whether by statute or otherwise, other than as set forth herein have been made by any party hereto. No waiver of any term, provision, or condition of this Agreement, whether by conduct or otherwise, in any one or more instances, shall be deemed to be, or shall constitute, a waiver of any other provision hereof, whether or not similar, nor shall such waiver constitute a continuing waiver, and no waiver shall be binding unless executed in writing by the party making the waiver. + +[Illegible], 31 January, 1994 - ----------------------------- + +/s/ [Illegible] /s/ [Illegible] - -------------------- ------------------ XIMAGE SAGEM + + Page 10 \ No newline at end of file diff --git a/full_contract_txt/IMMUNOMEDICSINC_08_07_2019-EX-10.1-PROMOTION AGREEMENT.txt b/full_contract_txt/IMMUNOMEDICSINC_08_07_2019-EX-10.1-PROMOTION AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..52b09073c5121c31423f77acfcf58344cf07b16c --- /dev/null +++ b/full_contract_txt/IMMUNOMEDICSINC_08_07_2019-EX-10.1-PROMOTION AGREEMENT.txt @@ -0,0 +1,1267 @@ +CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS NOT MATERIAL AND WOULD LIKELY CAUSE COMPETITIVE HARM TO THE REGISTRANT IF PUBLICLY DISCLOSED. [***] INDICATES THAT INFORMATION HAS BEEN REDACTED. + +PROMOTION AGREEMENT + +by and between + +JANSSEN BIOTECH, INC. + +and + +IMMUNOMEDICS, INC. + +Dated as of: April 5, 2019 + + + + + +TABLE OF CONTENTS + +ARTICLE 1 DEFINITIONS 1 + +ARTICLE II BRAND PLAN 10 2.1 Brand Plan Generally 10 2.2 Contents of Brand Plan 10 + +ARTICLE III PROMOTION 12 3.1 Scope 12 3.2 Detailing Requirements 13 3.3 Sales Representatives 14 3.4 Promotional Materials 15 3.5 Product Sales 16 3.6 Product Recall 16 3.7 Product Return 17 + +ARTICLE IV GOVERNANCE 17 4.1 Authority 17 4.2 Joint Commercial Team 17 4.3 BALVERSA Sales Advisory Team 18 + +ARTICLE V COMPENSATION 18 5.1 Definitions 18 5.2 Service Fees 18 5.3 Milestones 19 5.4 Costs 20 5.5 Reports and Payments 20 + +ARTICLE VI REGULATORY MATTERS 21 6.1 Regulatory Approvals 21 6.2 Pharmacovigilance Procedures 22 6.3 Product Complaints 22 6.4 Post-Marketing Surveillance 22 6.5 Product Medical Inquiries 22 6.6 Companion Diagnostic Inquiries 22 6.7 Access, Affordability and Patient Support Inquiries 23 + +ARTICLE VII BOOKS, RECORDS AND AUDIT RIGHTS 23 7.1 Books and Records 23 7.2 Books and Records Audits 23 + +ARTICLE VIII TERM AND TERMINATION 24 8.1 Term; Termination 24 8.2 Effect of Termination or Expiration 26 8.3 Suspension of Product Promotion 28 + + + + + +ARTICLE IX CONFIDENTIALITY; RESTRICTIVE COVENANTS 28 9.1 Confidentiality 28 9.2 Exclusivity 31 9.3 Restrictions on Promotions 31 9.4 Limitation on Soliciting Employees 31 + +ARTICLE X INTELLECTUAL PROPERTY 32 10.1 Use of Trademarks 32 10.2 Ownership of Intellectual Property Rights 32 10.3 Prosecution and Maintenance 33 10.4 Enforcement against Infringement 33 10.5 Third Party Infringement Claims 33 + +ARTICLE XI REPRESENTATIONS AND WARRANTIES; CERTAIN COVENANTS 33 11.1 Representations of Authority 33 11.2 Consents 33 11.3 No Conflict 33 11.4 Enforceability 33 11.5 Sales Representatives and Other Company Employees 34 11.6 Other Compliance Matters 34 11.7 Infringement of Third Party Intellectual Property; Clinical Trial Data 36 11.8 Disclaimer 36 + +ARTICLE XII INDEMNIFICATION; LIMITS ON LIABILITY 37 12.1 Scope of Indemnification 37 12.2 Notice and Control of Actions 38 12.3 Limitations on Liability 39 + +ARTICLE XIII DISPUTE RESOLUTION 39 13.1 Disputes 39 13.2 Negotiation 39 13.3 Mediation 40 13.4 Arbitration 40 13.5 Confidentiality 42 + +ARTICLE XIV MISCELLANEOUS 42 14.1 Press Announcements 42 14.2 Force Majeure Event 42 14.3 Independent Contractors 43 14.4 Performance by Affiliates 43 14.5 Notices 43 14.6 Entire Agreement 44 14.7 Amendments; Assignment 44 + + + + + +14.8 Non-Waiver of Rights 14.9 Further Assurances and Cooperation 14.1 Severability 14.11 Binding Effect 14.12 Counterparts; Facsimile Signatures 14.13 Third Party Beneficiaries 14.14 Governing Law 14.15 Construction + +Schedule 1.16 Janssen Universal Calendar + +Schedule 6.2 Pharmacovigilance Provisions + +Exhibit A Brand Plan + +Exhibit B Detailing Requirements + +Exhibit C Records and Information Management Requirements + +Exhibit D Health Care Compliance Provisions + + + + + +PROMOTION AGREEMENT + +This PROMOTION AGREEMENT (this "Agreement") dated as of April 5, 2019 (the "Effective Date"), is entered into by and between Janssen Biotech, Inc., a corporation organized under the laws of Pennsylvania ("Janssen") and Immunomedics, Inc., a corporation organized under the laws of Delaware ("Company"). + +WHEREAS, before the Effective Date, Janssen submitted an application for approval to market and/or sell the Product (defined below) for the Initial Indication (defined below) in the Territory (defined below); and + +WHEREAS, Janssen now wishes to engage Company to Promote (defined below) the Product for the Initial Indication in the Territory and Company wishes to be so engaged, subject to and upon the terms and conditions set forth in this Agreement; + +NOW, THEREFORE, in consideration of the mutual representations, warranties, covenants and undertakings contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, agree as follows: + +ARTICLE I DEFINITIONS + +Unless otherwise defined herein, capitalized terms used in this Agreement have the meanings set forth in this Article I. + +1.1 "Acquirer" has the meaning set forth in Section 9.2. + +1.2 "Acquisition" has the meaning set forth in Section 9.2. + +1.3 "Action" means any claim, action, cause of action or suit (whether in contract or tort or otherwise), litigation (whether at law or in equity, whether civil or criminal), assessment, arbitration, investigation, hearing, charge, complaint, demand, notice or proceeding from, by or before any Governmental Authority. + +1.4 "Affiliate" means with respect to a Party, any Person that is directly or indirectly controlling, controlled by or under common control with such Party at the time that the determination of affiliation is made. For the purposes of this definition, "control" of a Person means (a) beneficial ownership of at least fifty percent (50%) of the voting securities or other comparable equity interests of such Person (whether directly or pursuant to any option, warrant or other similar arrangement) or (b) the possession, directly or indirectly, of the power to direct the management and policies of such Person, whether through the ownership of voting securities, by contract, declaration of trust or otherwise, and the terms "controlling" and "controlled" shall have meanings correlative to the foregoing. + +1.5 "Agreement" has the meaning set forth in the preamble to this Agreement. + +1.6 "Approval Date" means the date upon which Marketing Approval is received for + + + + + +the Product for the Initial Indication. + +1.7 "Audit Report" has the meaning set forth in Section 7.2.2. + +1.8 "Audited Party" has the meaning set forth in Section 7.2.1. + +1.9 "Auditing Party" has the meaning set forth in Section 7.2.2. + +1.10 "Balversa-only Target" has the meaning set forth in Exhibit B. + +1.11 "Baseline" has the meaning set forth in Section 5.1.1. + +1.12 "Books and Records" has the meaning set forth in Section 7.1. + +1.13 "Brand Plan" has the meaning set forth in Section 2.1. + +1.14 "BSAT" has the meaning set forth in Section 4.3.1. + +1.15 "Business Day" means any day other than a Saturday or a Sunday or other day on which commercial banks are authorized or required to be closed in New York, New York. + +1.16 "Calendar Quarter" means a calendar quarter based on that certain universal calendar system used by Janssen and each of its Affiliates for internal business purposes (a copy of which calendar for 2019 and 2020 is attached hereto as Schedule 1.16), such that each Calendar Quarter ends on the last date of the calendar quarter indicated on Schedule 1.16 (the "Quarter End Date") and begins on the date following the Quarter End Date of the preceding Calendar Quarter. + +1.17 "Calendar Year" means a calendar year based on that certain universal calendar system used by Janssen and each of its Affiliates for internal business purposes (a copy of which calendar for 2019 and 2020 is attached hereto as Schedule 1.16), such that each Calendar Year ends on the fourth Quarter End Date for such year and begins on the date following the fourth Quarter End Date of the preceding Calendar Year. + +1.18 "Call" means an in-person visit by an adequately trained sales representative to the office of a health care professional in the Territory for the purpose of promoting or presenting one or more pharmaceutical products. + +1.19 "Call Plan" has the meaning set forth in Section 2.2.3. + +1.20 "CPR Mediation Procedure" has the meaning set forth in Section 13.3.1. + +1.21 "CPR Rules" has the meaning set forth in Section 13.4. + +1.22 "Companion Diagnostic" means the diagnostic test approved by FDA concurrently with the Product for use in conjunction with the Product. + + + + + +1.23 "Company" has the meaning set forth in the preamble to this Agreement. + +1.24 "Company Indemnified Parties" has the meaning set forth in Section 12.1.1. + +1.25 "Company Internal Detail Reporting System" means the data and records collected by Company and its Affiliates, in accordance with its standard business practice, to monitor Details made by Sales Representatives, which, with respect to the Product, include the date a Detail was made, the name of the Target to whom the Detail was made, the indication(s) for which the Product was presented, and the identity of the Sales Representative who delivered the Detail. + +1.26 "Company Product" means the drug that is being developed by Company on the Effective Date, known as "IMMU- 132" or sacituzumab govitecan. + +1.27 "Company Product Approval Date" means the date upon which Marketing Approval is first received in the Territory for the Company Product. + +1.28 "Company Trademark" means any Trademark owned by Company or any of its Affiliates. + +1.29 "Competing Product" means any pharmaceutical product that is (a) approved specifically for use, in the treatment of urothelial cancer in any patient population in the Territory or (b) a fibroblast growth factor receptor inhibitor. If the Parties agree to extend the Term beyond the Expiration Date, Competing Product shall not include Company Product after the Expiration Date. + +1.30 "Confidential Information" of a Party means (a) all non-public or proprietary information and data (including clinical data, technology, trade secrets, design specifications, dossiers, manufacturing formulae, manufacturing procedures and instructions, methods and processes, formats, designs, applications and programs, raw material supply arrangements, projections, prescriber and target data, pharmacy data, sales data, analyses, rebate agreements, promotion plans, detailing information, financial statements, customer and target lists, marketing plans, budgets, Third Party contracts, market research data, pricing, reimbursement and costs relating to the Product) that is disclosed by or on behalf of such Party or any of its Affiliates to the other Party, any of its Affiliates or any of their respective employees, agents or contractors pursuant to or in connection with this Agreement and (b) any other non- public or proprietary information and data that is expressly deemed in this Agreement to be Confidential Information of such Party, whether or not disclosed by or on behalf of such Party to the other Party, any of its Affiliates or any of their respective employees, agents or contractors, in each case ((a) and (b)) without regard to whether any of the foregoing is marked "confidential" or "proprietary," or in oral, written, graphic or electronic form. + +1.31 "Cumulative Net Sales" has the meaning set forth in Section 5.1.1. + +1.32 "Cure Period" has the meaning set forth in Section 8.1.4. + + + + + +1.33 "Detail" means an in-person presentation of the Product and its uses for the Initial Indication made by an adequately trained sales representative during a Call to one or more Health Care Professionals in the Territory during which the sales representative describes the Product and such use(s) in a fair and balanced manner consistent with (a) the Product Label and Insert and any Promotional Materials approved in accordance with this Agreement, and (b) the other requirements of this Agreement, the Promotion Rules and applicable Laws, but shall not include reminder details or e-details, as such terms are generally understood in the pharmaceutical industry in the Territory, or any presentations made at conventions, consulting programs or similar gatherings, other than a pre-arranged or scheduled meeting at such gathering between the sales representative and a Health Care Professional. When used as a verb, "Detail" means to deliver the presentation described in this definition. "Detailing" shall have a corresponding meaning. + +1.34 "Detailing Period" means each of the following periods: (a) the period beginning on the Start Date and ending on September 30, 2019; (b) October 1, 2019 through December 31, 2019; and (c) January 1, 2020 through March 31, 2020. + +1.35 "Diligent Efforts" means, with respect to an activity to be undertaken by a Party pursuant to this Agreement, the level of efforts and resources normally used by such Party with respect to a pharmaceutical product owned or controlled by such Party, or to which such Party has similar rights, which product is of similar market potential and strategic value and is at a similar stage in its development or life as is the Product, taking into account all relevant factors, including issues of safety, efficacy, product profile, the competitiveness of the marketplace, the proprietary position of the Product, regulatory matters, profitability of the Product and other relevant commercial factors. + +1.36 "Disclosing Party" has the meaning set forth in Section 9.1.3. + +1.37 "Disputes" has the meaning set forth in Section 13.1. + +1.38 "Dual Target" has the meaning set forth in Exhibit B. + +1.39 "Effective Date" has the meaning set forth in the preamble to this Agreement. + +1.40 "Expiration Date" means March 31, 2020. + +1.41 "FDA" means the United States Food and Drug Administration or any successor agency thereto. + +1.42 "Fee Notice" has the meaning set forth in Section 5.5.1. + +1.43 "First Position Detail" means, with respect to any product, a detail or presentation that is dedicated solely to such product and constitutes at least 70% of the total presentation time for all products presented during a Call in which such product is the first product presented to the health care professional. + + + + + +1.44 "Force Majeure" has the meaning set forth in Section 14.2. + +1.45 "GAAP" means United States generally accepted accounting principles applied on a consistent basis. Unless otherwise defined or stated, financial terms shall be calculated by the accrual method under GAAP. + +1.46 "Governmental Authority" means any government (including any national, federal, state or local government), or political subdivision thereof, or any multinational or other organization, authority, agency or commission entitled to exercise any administrative, executive, judicial, legislative, police, regulatory or taxing authority or power, any court or tribunal, or any governmental arbitrator or arbitral body (or any department, bureau or division of any of the foregoing). + +1.47 "Health Care Professional" means a health care professional with prescribing authority who treats urothelial cancer. + +1.48 "Indemnified Party" has the meaning set forth in Section 12.2.1. + +1.49 "Indemnifying Party" has the meaning set forth in Section 12.2.1. + +1.50 "Initial Indication" means the first indication for which the Product receives Marketing Approval in the Territory, which the Parties expect to be treatment of adult patients with locally advanced or metastatic urothelial carcinoma which has (a) susceptible FGFR 3 or 2 genetic alterations and (b) progressed during or following at least one line of prior platinum-containing chemotherapy including within 12 months of neoadjuvant or adjuvant platinum-containing chemotherapy, where patients are selected for therapy based on an FDA-approved companion diagnostic for the Product; provided, however, that, with respect to any such indication for which the Product receives Marketing Approval from the FDA, "Initial Indication" shall be defined by the exact wording used in the Product Label and Insert as so approved. + +1.51 "Janssen" has the meaning set forth in the preamble to this Agreement. + +1.52 "Janssen Brand Usage Guidelines" means Janssen's group guidelines on the Janssen brand visual and verbal identity as they apply to the Trademarks of Janssen and its Affiliates and the use of other companies' names and logos, as notified to Company by Janssen from time to time. + +1.53 "Janssen Indemnified Parties" has the meaning set forth in Section 12.1.2. + +1.54 "Joint Commercial Team" has the meaning set forth in Section 4.2.1. + +1.55 "Launch Date" means the date of the commercial launch of the Product in the Territory selected by Janssen. As of the Effective Date, the Parties expect that the Launch Date shall be on or about May 1, 2019. + + + + + +1.56 "Laws" means all laws, statutes, rules, regulations, ordinances and other pronouncements having the effect of law in any country, state, province, county, city or other political subdivision, and includes any rule or regulation of any Governmental Authority that may be in effect from time to time in the Territory. + +1.57 "License Agreement" means that certain Collaboration and License Agreement between Janssen Pharmaceutica N.V. and Astex Therapeutics Limited executed in June 2008, as amended, pursuant to which Janssen was granted a license under one or more patents covering the Product. + +1.58 "Losses" has the meaning set forth in Section 12.1.1. + +1.59 "Marketing Approval" means, with respect to any product, approval by the FDA of an NDA for such product. 1.60 "Milestone Event" has the meaning set forth in Section 5.3. + +1.61 "Milestone Payment" has the meaning set forth in Section 5.3. + +1.62 "Minimum Number of Details Requirement" has the meaning set forth in Exhibit B. + +1.63 "Minimum PDE Requirement" has the meaning set forth in Exhibit B. + +1.64 "Minimum Reach Requirement" has the meaning set forth in Exhibit B. + +1.65 "Minimum Top Target Requirement" has the meaning set forth in Exhibit B. + +1.66 "NDA" means, with respect to any product, a New Drug Application for such product and all supplements to such New Drug Application filed pursuant to the requirements of the FDA. + +1.67 "Net Sales" means [***]. + +1.68 "Other Company Employees" has the meaning set forth in Section 2.2.2(a). + +1.69 "Party" means each of Janssen and Company, which together are referred to as the "Parties". + +1.70 "Passing Score" has the meaning set forth in Section 2.2.2(c). + +1.71 "Payee Party" means, with regards to a payment pursuant to this Agreement, the Party that receives such payment from the other Party under this Agreement. + +1.72 "Paying Party" means, with regards to a payment pursuant to this Agreement, the Party that makes such payment to the other Party under this Agreement. + + + + + +1.73 "PDE" shall mean, with respect to any product, a primary detail equivalent, which consists of either a First Position Detail of such product or two Second Position Details of such product, such that a First Position Detail shall count as [***] PDE and a Second Position Detail shall count as [***] PDE. 1.74 "Performance Failure Notice" has the meaning set forth in Section 3.2.4(b). 1.75 "Person" means, as applicable, an individual, sole proprietorship, partnership, limited partnership, limited liability partnership, corporation, limited liability company, business trust, joint stock company, trust, incorporated association, joint venture or similar entity or organization, including a Governmental Authority. + +1.76 "PMS" has the meaning set forth in Section 6.4. + +1.77 "Product" means any or each of the tablets containing erdafitinib as its sole active ingredient in a dosage amount of 3 mg, 4 mg or 5 mg and that is currently expected to be approved by the FDA for the Initial Indication, as currently manufactured by or on behalf of Janssen or its Affiliate and planned to be marketed under the trademark BALVERSA™. + +1.78 "Product Complaint" means an oral, written or electronic communication from any Person that implies dissatisfaction regarding the identity, purity, quality or stability of the Product. + +1.79 "Product Label and Insert" means (a) all labels and other written, printed or graphic material affixed to any container, packaging or wrapper utilized with the Product; and (b) any written material physically accompanying the Product, including the Product package inserts. + +1.80 "Product-Specific Training" means training with respect to (a) sales and scientific materials regarding the disease state information on urothelial cancer, (b) currently available clinical data supporting use of the Product for the treatment of urothelial cancer, and (c) clinical data for products that compete with the Product. + +1.81 "Product Trademarks" means any Trademarks as may be selected by Janssen and its Affiliate, in their sole discretion, for use in connection with the Product in the Territory, including any Trademark owned or controlled by Janssen or its Affiliates that includes the name "BALVERSA". For purposes of clarity, the term "Product Trademark" shall not include the corporate names and logos of either Party. + +1.82 "Promotion" means the (a) Detailing of the Product in the Territory for the Initial Indication and (b) performance of the other promotional activities for the Product set forth in the Brand Plan. "Promote" and "Promoting," when used as a verb, means to engage in such Promotion. + +1.83 "Promotion Rules" means: (a) the PhRMA Code on Interactions with Health Care Professionals; and (b) upon reasonable notice by Janssen to Company, any other similar rules, + + + + + +policies or procedures with respect to the promotion of pharmaceutical products in the Territory that Janssen deems necessary or advisable to follow (including Janssen's compliance policies). + +1.84 "Promotional Materials" has the meaning set forth in Section 3.4.2. + +1.85 "Quarter End Date" has the meaning set forth in Section 1.16. + +1.86 "Receiving Party" has the meaning set forth in Section 9.1.3. + +1.87 "Regulatory Approval" means all technical, medical and scientific licenses, registrations, authorizations and approvals (including Marketing Approvals and labeling approvals) of all applicable Regulatory Authorities necessary for the commercial distribution, marketing, promotion, offer for sale, use, import and sale of a pharmaceutical product in a regulatory jurisdiction. + +1.88 "Regulatory Authority" means any authority, agency, commission, official or other instrumentality inside or outside the Territory, including the FDA, having jurisdiction over the manufacture of Product for sale in the Territory, or over the commercial distribution, marketing, promotion, offer for sale, use, import or sale of the Product in the Territory. + +1.89 "Remediation Plan" has the meaning set forth in Section 3.2.4(b). + +1.90 "Sales Force" has the meaning set forth in Section 3.3.2(a). + +1.91 "Sales Representative" means a sales representative used by Company to perform Details of the Product for the Initial Indication to Health Care Professionals in the Territory. Sales Representative shall not include any key account manager, medical science liaison or regional sales manager. + +1.92 "Second Position Detail" means, with respect to any product, a detail or presentation that is dedicated solely to such product and constitutes at least 30% of the total presentation time for all products presented during a Call in which such product is the second product presented to the health care professional. + +1.93 "Service Fee" has the meaning set forth in Section 5.1. + +1.94 "Start Date" means the first date upon which Sales Representatives are able to Detail the Product in accordance with this Agreement and as approved by Janssen, which may be before, on or after the Launch Date. + +1.95 "Supplementary Training" means supplemental training relating to a Product, including refresher training, training regarding any emerging Product safety information, or new Promotional Materials or Product messaging. + +1.96 "Target" means a Health Care Professional who treats patients for locally advanced + + + + + +or metastatic urothelial cancer and is included in the Target List in accordance with this Agreement. + +1.97 "Target List" has the meaning set forth in Section 2.2.1. + +1.98 "Tax" or "Taxes" means any present or future taxes, levies, imposts, duties, charges, assessments or fees of any nature (including interest, penalties and additions thereon or thereto) that are imposed upon a Party by a Governmental Authority or other taxing authority under any applicable Laws. + +1.99 "Term" has the meaning set forth in Section 8.1.1. + +1.100 "Territory" means the United States of America, including its territories and possessions. + +1.101 "Third Party" means any Person other than a party to this Agreement or any of its Affiliates. + +1.102 "Trademark" means any trademark, trade dress, trade name, brand name, logo, corporate name or service mark, used in connection with any product or service. + +1.103 "Training Activities Plan" has the meaning set forth in Section 2.2.2(a). ARTICLE II BRAND PLAN 2.1 Brand Plan Generally. A written plan for the marketing and promotion of the Product for the Initial Indication in the Territory pursuant to this Agreement for Calendar Year 2019 is attached to this Agreement as Exhibit A (the "Brand Plan"). If the Launch Date is delayed beyond May 1, 2019, Janssen shall update the Brand Plan to adjust the Parties' obligations appropriately to reflect such delay. Janssen shall have the sole authority and responsibility for updating the Brand Plan for Calendar Year 2020. Janssen shall use reasonable efforts to deliver the Brand Plan for Calendar Year 2020 to the Joint Commercial Team by no later than November 30, 2019. + +2.2 Contents of Brand Plan. The Brand Plan shall include: (a) a description of the Target List; (b) the Training Activities Plan; (c) a description of the Call Plan; and (d) a description of the sales and promotional materials (including Health Care Provider and patient education sales materials and, where applicable, non-personal promotional materials) to be used during the relevant year in connection with the Product. The Brand Plan shall also include plans for other non-Detailing activities, if any, to be conducted in relation to the Product during the period covered by the Brand Plan, such as attendance at medical conferences and Janssen sales meetings, marketing plans for advisory boards and publication plans. + + + + + +2.2.1 Target List. Prior to the Launch Date, Janssen shall provide to Company, in electronic form, a list that sets forth: (x) the name of each Target to which the Sales Representatives will perform Details; and (y) the priority classification of each such Target (high, medium or low). Such list, as amended from time to time by Janssen, shall be the "Target List". Janssen shall furnish with or as part of the Target List the claims data upon which the Target priority classification was based if (a) Janssen is able to obtain an agreement with the relevant Third Party to provide such data to Company and (b) the Parties agree on which Party will bear the costs of providing such data to Company. + +2.2.2 Training Activities Plan. + +(a) Training Activities Plan. The Brand Plan includes a plan that sets forth all of the training that Janssen deems necessary or advisable for the Sales Representatives and any other employees of Company conducting activities under this Agreement (such other employees, the "Other Company Employees") to complete prior to conducting activities under this Agreement (the "Training Activities Plan"). The Training Activities Plan shall indicate which Party is responsible for providing such training, when such training will be provided and how such training will be provided (e.g., in person or remotely, which may include live audio/video conference calls, or electronically such as via learning management systems). The initial Training Activities Plan includes a plan for conducting and completing the Product-Specific Training and (as applicable) state Law compliance training of the Sales Representatives before the Launch Date. The initial Training Activities Plan also includes a plan for conducting and completing before the Launch Date compliance training of the Sales Representatives and the Other Company Employees in a manner consistent with all applicable pharmaceutical industry standards. Janssen may update the Training Activities Plan from time to time to include any additional training that Janssen deems necessary or advisable to refresh or update the knowledge of the Sales Representatives and the Other Company Employees. + +(b) Training Responsibilities. Janssen shall conduct all Product-Specific Training to the Sales Representatives and Other Company Employees. Company shall at all times ensure that each Sales Representative and Other Company Employee (including Sales Representatives and Other Company Employee that are engaged after Launch Date) has received the Product- Specific Training and any other training set forth in the Training Activities Plan. + +(c) Examination. Janssen shall administer to each Sales Representative an examination of the Product- Specific Training topics and any other training topics that Janssen deems necessary or advisable. The first such examination of the Sales Representatives shall occur no later than the Launch Date. Janssen shall determine the minimum score that is considered a minimum passing score for each examination (the "Passing Score"). Company shall ensure that, before conducting any Detailing of the Product pursuant to this Agreement, each Sales Representative has completed the Product-Specific Training and other training described in the Training Activities Plan and has achieved a Passing Score on such examination. Upon Company's request, Janssen shall provide, as soon as reasonably practicable, additional remedial training and re-testing of Sales Representatives who fail to achieve a Passing Score. Any Sales Representative + + + + + +who does not obtain a Passing Score on such an examination shall not be permitted by Company to perform in-person presentations of the Product unless and until such Sales Representative is re-tested and achieves a Passing Score. + +2.2.3 Call Plan. Janssen shall develop and provide to Company an annual plan that describes the amount, frequency and reach of Detailing to be performed by the Sales Representatives to the Targets on the Target List (the "Call Plan"). + +ARTICLE III PROMOTION + +3.1 Scope. + +3.1.1 Engagement; Obligations. + +(a) Janssen hereby engages Company on a non-exclusive basis to Promote the Product for the Initial Indication in the Territory on the terms, and subject to the conditions, set forth in this Agreement, and Company hereby accepts such engagement. Company shall not Promote the Product for any indication other than the Initial Indication. Company shall not conduct any promotion or marketing activities with respect to the Product that are not set forth in the Brand Plan without the prior written consent of Janssen. Janssen and its Affiliates retain the right to Detail and otherwise promote the Product in the Territory. + +(b) Each Party shall perform the obligations and activities assigned to it in, and comply with the applicable provisions of, the Brand Plan and this Agreement. + +3.1.2 Retained Rights. Any rights of Janssen or any of its Affiliates related to the Product that are not expressly granted to Company hereunder shall be retained by Janssen or such Affiliate, including all decision-making and other authority relating to Product development, regulatory matters, medical affairs, distribution, manufacturing and supply, Product strategy, marketing, sales, pricing, discounting, reimbursement, life cycle management, positioning, marketing messages and other commercialization matters. Janssen shall book sales of the Product in the Territory and shall have the sole right and responsibility to manufacture the Product and to distribute the Product in the Territory. Company shall not distribute or sell the Product in the Territory, and nothing herein shall be construed to provide Company with any rights to develop, manufacture, supply, distribute or sell the Product in the Territory. + +3.1.3 Compliance with Laws. Company shall ensure that all of its personnel involved in the activities set forth under this Agreement comply with all applicable Laws and the Promotion Rules. Company shall ensure that the Sales Representatives and Other Company Employees Promote the Product at all times in accordance with applicable Laws and the Promotional Materials provided and approved by Janssen, refrain from making any false or misleading statements about the Product and refrain from discussing any unapproved uses of the Product. + + + + + +3.2 Detailing Requirements. + +3.2.1 General. Subject to Janssen fulfilling its obligations under Section 2.2.2(b) to provide the initial training and under Section 3.4 to deliver the Promotional Materials, Company shall begin promoting and Detailing the Product for the Initial Indication to the Targets on the Start Date. Company shall perform Detailing during the Term in accordance with this Section 3.2, the Call Plan and the Detailing requirements set forth on Exhibit B. For reference, the term "Detail" is defined in Section 1.33. + +3.2.2 Minimum Detailing Requirements. At a minimum, Company shall cause its Sales Force to satisfy the Minimum Number of Details Requirement, the Minimum Reach Requirement and, if applicable, the Minimum PDE Requirement and the Minimum Top Target Requirement set forth in Exhibit B in each Detailing Period. Company shall ensure that the Sales Force satisfies the Positioning Requirements set forth on Exhibit B. Details that do not satisfy the Positioning Requirements set forth on Exhibit B will not be counted for purposes of determining whether the Minimum Number of Details Requirement, the Minimum Reach Requirement, the Minimum PDE Requirement or the Minimum Top Target Requirement has been satisfied. + +3.2.3 Effects of Failure to Meet Minimum Detailing Requirements. If Company fails to achieve the Minimum Number of Details Requirement, the Minimum Reach Requirement or, if applicable, the Minimum PDE Requirement or the Minimum Top Target Requirement in any Detailing Period, Janssen shall have the right to terminate this Agreement by giving thirty (30) days' notice, unless: + +(a) Company complied with and performed its Detailing activities in accordance with any Remediation Plans developed by Company and approved by Janssen during such Detailing Period; or + +(b) if (i) neither Party provided a Performance Failure Notice under Section 3.2.4 during such Detailing Period and (ii) Company performs additional Details in the first month after such Detailing Period such that, if such Details had been performed during such Detailing Period, they would have been sufficient to cure the failure to achieve the Minimum Number of Details Requirement, the Minimum Reach Requirement, the Minimum PDE Requirement or the Minimum Top Target Requirement, as applicable. To avoid double-counting, such additional Details will not be taken into account when determining whether Company satisfies the Minimum Number of Details Requirement, Minimum Reach Requirement or, if applicable, the Minimum PDE Requirement or the Minimum Top Target Requirement in the then-current Detailing Period. + +For clarity, (i) Company must achieve all of the applicable foregoing minimum requirements in order to avoid giving rise to Janssen's rights and remedies under this Section 3.2.3, and (ii) such rights shall be in addition to any other rights and remedies that may be available to Janssen under applicable Laws in the event of any such failure on the part of Company. + +3.2.4 Monthly Detailing Reports. + + + + + +(a) No later than [***] ([***]) Business Days following the end of each month during the Term, Company shall report to Janssen the number of Details performed (and any other information necessary to determine whether the requirements set forth in Section 3.2.2 and Exhibit B have been satisfied) during such month by the Sales Representatives in accordance with this Agreement and the Call Plan, as reported by the Company Internal Detail Reporting System. The Joint Commercial Team shall review and discuss Company's performance of its Detailing obligations on a monthly basis. + +(b) In the event that either Party believes, based on such reports, review or discussion, that Company will fail to achieve the Minimum Number of Details Requirement, the Minimum Reach Requirement or, if applicable, the Minimum PDE Requirement or the Minimum Top Target Requirement under Section 3.2.2 for the then-current Detailing Period, such Party will promptly notify the other Party in writing (a "Performance Failure Notice") and Company shall develop a plan to avoid such a failure within fifteen (15) Business Days after the end of the applicable month, which plan will be subject to Janssen's approval, not to be unreasonably withheld or delayed (as so approved, a "Remediation Plan"). + +(c) For clarity, the Joint Commercial Team shall have no authority to extend the time for performance or reduce the Minimum Number of Details Requirement, the Minimum Reach Requirement or, if applicable, the Minimum PDE Requirement or the Minimum Top Target Requirement without an amendment to this Agreement. + +3.2.5 Ride-Alongs. Members of Janssen's team shall have the right to conduct ride-alongs with the Sales Representatives for purposes of monitoring the Details delivered by the Sales Representatives upon Janssen's request. Janssen will give reasonable notice to Company sales management of each request. + +3.3 Sales Representatives. + +3.3.1 Qualifications. Company shall ensure that each Sales Representative: (i) is a full-time employee of Company and a full-time member of its sales force; (ii) possesses skills, training and experience that are consistent with industry standards applicable to the promotion of an oncological pharmaceutical product; (iii) has completed the Product-Specific Training and other sales training described in this Agreement and the Brand Plan and achieved a Passing Score on an examination in accordance with Section 2.2.2(c); and (iv) has become adequately equipped and knowledgeable with respect to the Product, as determined in accordance with Company's then-current standards for sales personnel selling pharmaceutical products in the Territory. No sales representative or other individual may be used by Company to perform in-person presentations of + + + + + +the Product in the Territory unless and until such individual satisfies the conditions described in clauses (i) - (iv) above. + +3.3.2 Size of Sales Force. + +(a) At all times during the Term, Company shall use reasonable efforts to deploy and maintain a sales force (the "Sales Force") of at least [***] ([***]) Sales Representatives who satisfy the conditions described in Section 3.3.1. + +(b) Company shall notify Janssen (i) at least [***] ([***]) days in advance of any planned reduction by Company in the size of the Sales Force to less than [***] ([***]) Sales Representatives and (ii) promptly if the number of Sales Representatives on the Sales Force decreases to less than [***] ([***]). In either event, Company shall provide Janssen with a plan to continue meeting the Minimum Number of Details Requirements, Minimum Reach Requirements, Minimum PDE Requirements and, if applicable, Minimum Top Target Requirements under Section 3.2.2. + +(c) If the average number of Sales Representatives on the Sales Force is less than twenty-five (25) over any forty-five (45)-day period, Janssen will have the right to terminate this Agreement by giving thirty (30) days' notice. + +3.3.3 Subcontracting. Company may not subcontract with or otherwise use any Affiliate or Third Party to perform any Detailing or any of its other obligations under this Agreement without the prior written consent of Janssen. + +3.3.4 Compensation of Sales Force. In the event Company elects to provide incentives to Sales Representatives, such incentives will be appropriate, in accordance with the applicable Laws, and, in the aggregate, competitive in the marketplace with respect to the products promoted by the Sales Representatives. Janssen shall not have any responsibility for or authority over the hiring, supervision, termination or compensation of the Sales Representatives or any other Company employees or for any employee benefits of such employees. + +3.3.5 Additional Obligations. Company shall ensure that the Sales Representatives do not identify or represent themselves as employees or agents of Janssen or any Affiliate of Janssen. + +3.4 Promotional Materials. + +3.4.1 Positioning and Messages. Janssen shall develop and, as deemed advisable or necessary by Janssen from time to time, update product positioning and core selling messages for the Promotion of the Product. Janssen agrees to consider in good faith Company's feedback in the development of any such updates to such messaging. + +3.4.2 Promotional Materials Development and Approval. Janssen shall be solely responsible for developing and providing to Company (at Janssen's cost) all promotional materials + + + + + +for use in connection with the Promotion of the Product (the "Promotional Materials") and agrees to provide Company with sufficient quantities of the materials based on market demand and expected levels of Detailing efforts. Janssen agrees to consider in good faith Company's feedback in the development of any new promotional materials during the Term. Such Promotional Materials shall comply with all applicable Laws and may include written sales and advertising materials, detail aids, brochures, hand-outs, reprints, booth panels and any other promotional support items. Company shall use only the Promotional Materials provided by Janssen and the Product Label and Insert in its Promotion of the Product in the Territory. Company shall not add any Company Trademark to the Promotional Materials or otherwise alter the Promotional Materials in any way. Company shall not develop or use any other promotional materials in its Promotion of the Product. + +3.4.3 Janssen Right to Use Promotional Materials. Nothing in this Agreement shall restrict Janssen's right to use any Promotional Materials for the purposes of promoting the Product in the Territory. + +3.4.4 Revisions. Janssen may revise, update or develop additional Promotional Materials from time to time during the Term, as deemed necessary and appropriate by Janssen, including based on: (i) changes in the Product Label and Insert; (ii) requirements or mandates of the FDA or other Regulatory Authorities or any Laws; or (iii) changes in the Promotion Rules. + +3.4.5 Revocation of Approval. If, at any time, Janssen notifies Company in writing that it no longer approves the use of specified Promotional Materials, Company shall immediately take action to remove the Promotional Materials from use by Sales Representatives and either (i) destroy such materials or (ii) return them to Janssen. The cost of such return shall be borne by Janssen. + +3.5 Product Sales. Janssen shall have sole authority and responsibility for sale and distribution of the Product in the Territory. Company shall not, and shall not permit the Sales Representatives or Other Company Employees to, solicit or accept orders for the Product or otherwise engage in any distribution, sale or offer for sale of the Product, any Product samples or any other product containing erdafitinib, but rather shall promptly direct any orders that it receives for Product or Product samples, and cause the Sales Representatives and Other Company Employees to direct promptly any such orders they may receive, to Janssen or any Third Party designated by Janssen. + +3.6 Product Recall. Janssen shall have sole authority and responsibility for any recall or withdrawal of the Product in the Territory. Following a decision by Janssen to conduct any such recall or withdrawal of the Product: (a) Janssen shall immediately notify Company of such decision, (b) Company shall immediately cease Detailing and all other promotion of the Product and (c) as soon as reasonably practicable, Janssen provide Company with a prepared statement for use in response to any inquiries regarding such recall or withdrawal. Company shall use such prepared statement to respond to any inquiries received with regard to the recall or withdrawal and shall not make any other statement regarding such recall or withdrawal except as required by + + + + + +applicable Law. In the event of a recall or withdrawal, the obligations of the Parties under this Agreement (other than Janssen's obligation to pay Service Fees or Milestone Payments to Company) will be suspended solely to the extent and for so long as necessary until the circumstances that were the reasons for the recall or withdrawal have been resolved. + +3.7 Product Return. Janssen shall have the sole authority, right and responsibility to accept and handle, either directly or indirectly, any request to return Product in the Territory. Company shall not solicit the return of any Product and shall promptly direct any attempted returns and cause the Sales Representatives and Other Company Employees to direct promptly any attempted returns to Janssen or any Third Party designated by Janssen. + +ARTICLE IV GOVERNANCE + +4.1 Authority. Janssen shall have sole decision-making authority with respect to all matters relating to the promotion and Detailing of the Product in the Territory under this Agreement (including making changes to the Brand Plan), but Janssen may not exercise such decision-making authority with respect to a change to the Brand Plan that would materially increase Company's Detailing obligations or materially increase Company's non-Detailing obligations. + +4.2 Joint Commercial Team. + +4.2.1 Formation; Purpose. Simultaneously with the execution of this Agreement the Parties shall establish a joint commercial team (the "Joint Commercial Team") solely as a forum for the Parties' representatives to discuss Company's execution of the Brand Plan, potential changes to the Brand Plan and the promotion and Detailing of the Product to the Targets in the Territory. The Joint Commercial Team will have no decision-making authority. During the meetings of the Joint Commercial Team, the Parties may make recommendations to one another with respect to Company's execution of the Brand Plan, potential changes to the Brand Plan and the promotion and Detailing of the Product to the Targets in the Territory. + +4.2.2 Membership. The Joint Commercial Team shall consist of at least three (3) representatives of each Party, appointed by such Party from among its (or its Affiliates') employees that have a level of experience customary for a committee of this type. Either Party may remove and replace any member that it appointed, with or without cause, at any time by prior notice to the other Party. The Joint Commercial Team shall at all times be chaired by a representative of Janssen. The chairperson shall be responsible for calling meetings, preparing and circulating an agenda in advance of each meeting, and preparing and issuing minutes of each meeting within thirty (30) days thereafter or within a timeframe agreed by the Parties. + +4.2.3 Meetings. The Joint Commercial Team shall meet monthly. Meetings of the Joint Commercial Team may be held in person or by audio or video teleconference with the consent of each Party. Each Party shall bear its own costs associated with the attendance of its appointees at such meetings. Each Party shall ensure that at least two (2) of its appointed members + + + + + +(or their alternates) attend each meeting. Other employee representatives of each Party may attend meetings of the Joint Commercial Team. + +4.3 BALVERSA Sales Advisory Team. + +4.3.1 Formation; Purpose. Upon request by Janssen, the Parties shall establish a BALVERSA Sales Advisory Team (the "BSAT"). The BSAT will serve solely as an advisory forum and will have no decision-making authority. + +4.3.2 Membership. The BSAT shall consist of at least one Sales Representative per region, at least two (2) regional managers of Company and at least one representative of Janssen's BALVERSA marketing team. Either Party may remove and replace any member that it appointed, with or without cause, at any time by prior notice to the other Party. The BSAT shall at all times be chaired by a representative of Janssen. The chairperson shall be responsible for calling meetings. + +4.3.3 Meetings. The BSAT shall meet every other week during the first sixty (60) days after the Launch Date and monthly for the rest of the Term, with each meeting not to exceed ninety (90) minutes in duration. Meetings of the BSAT shall be held by audio or video teleconference and the parties agree to make reasonable efforts to ensure the meetings do not interfere with territory detailing time. Each Party shall bear its own costs associated with the attendance of its appointees at such meetings. Other employee representatives of each Party may attend meetings of the BSAT. + +ARTICLE V COMPENSATION + +5.1 Definitions. + +5.1.1 "Baseline" means (i) with respect to Calendar Year 2019, [***] Dollars ($[***]); and (ii) with respect to Calendar Year 2020, [***]Dollars ($[***]). + +5.1.2 "Cumulative Net Sales" means, with respect to any Calendar Quarter, the aggregate amount of Net Sales that were made during such Calendar Quarter and any prior Calendar Quarter(s) during the same Calendar Year. + +5.2 Service Fee. In partial consideration of Company's Promotion of the Product in accordance with the terms of this Agreement, and subject to the terms and conditions of this Agreement, with respect to each Calendar Quarter during Calendar Year 2019 and Calendar Year 2020, Janssen shall pay Company a service fee (the "Service Fee"), as follows: + +(a) with respect to each Calendar Quarter during Calendar Year 2019, an amount equal to (i) [***] percent ([***]%) of that portion of Cumulative Net Sales that is greater than the Baseline for Calendar Year 2019, less (ii) the total Service Fees that have been invoiced by Company to Janssen for all preceding Calendar Quarters of Calendar Year 2019; and + + + + + +(b) with respect to each Calendar Quarter during Calendar Year 2020, an amount equal to (i) [***] percent ([***]%) of that portion of Cumulative Net Sales that is greater than the Baseline for Calendar Year 2020, less (ii) the total Service Fees that have been invoiced by Company to Janssen for all preceding Calendar Quarters of Calendar Year 2020. + +Unless and until the Cumulative Net Sales exceed the Baseline for a particular Calendar Year, the Service Fee shall be zero. The foregoing calculation method is intended to ensure that each Service Fee for a Calendar Quarter includes a true-up amount of all Service Fees earned year-to-date in the same Calendar Year. + +5.3 Milestones. + +5.3.1 In partial consideration of Company's Promotion of the Product in accordance with the terms of this Agreement, and subject to the terms and conditions of this Agreement, Janssen shall pay Company milestone payments in accordance with this Section 5.3. Janssen shall notify Company in the applicable Fee Notice the first time the Cumulative Net Sales in the applicable Calendar Year exceed the amounts set forth in the following table (each, a "Milestone Event"). Janssen shall pay to Company the applicable milestone payments set forth in the table below (each, a "Milestone Payment") within [***] ([***]) days after receipt of an invoice from Company with respect to achievement of each Milestone Event. Each Milestone Payment shall be non-refundable and non-creditable. + +Milestone Event Milestone Payment Upon the first occasion that Cumulative Net Sales in Calendar Year 2019 exceed US$[***] US$[***] Upon the first occasion that Cumulative Net Sales in Calendar Year 2019 exceed US$[***] US$[***] Upon the first occasion that Cumulative Net Sales in Calendar Year 2019 exceed US$[***] US$[***] Upon the first occasion that Cumulative Net Sales in Calendar Year 2020 exceed US$[***] US$[***] + +5.3.2 Each Milestone Payment shall be payable only once upon the first occurrence of the relevant Milestone Event, even if the Milestone Event occurs multiple times. + +In the event Regulatory Approval of the Product for the Initial Indication in the Territory is delayed beyond May 18, 2019, or in the event commercial availability of the Product is delayed beyond June 1, 2019, Janssen agrees to make proportional adjustments to the Milestone Events in 2019, Milestone Payments in 2019 and the Baseline for 2019 + + + + + +consistent with the period of delay in Regulatory Approval or commercial availability, whichever is greater, as shown in the following sample calculation. + +Sample Calculation: + +Example: Regulatory Approval date is June 18, 2019 - 30 days delayed approval + +New Baseline for Calendar Year 2019: $[***] - ($[***] X [***] days / [***] days) = $[***] + +New Milestone Event and Payment for First 2019 Milestone: Cumulative Net Sales: $[***] - ($[***]X [***] days / [***] days) = $[***] Payment: $[***] - ($[***] X [***] days / [***] days) = $[***] + +5.4 Costs. Unless otherwise expressly stated in this Agreement, each Party shall bear and be responsible for all internal and out-of-pocket costs and expenses incurred by such Party in the performance of this Agreement. + +5.5 Reports and Payments. + +5.5.1 After the end of each Calendar Quarter of Calendar Year 2019 and 2020, Janssen shall calculate in good faith, based on Janssen's Books and Records and in accordance with Janssen's customary and consistently-applied accounting practices, the Net Sales in such Calendar Quarter and for such Calendar Year in the aggregate, as well as the Cumulative Net Sales and the Service Fee for such Calendar Quarter. Janssen shall deliver to Company, within thirty (30) days following the last day of such Calendar Quarter, a report setting forth the Cumulative Net Sales, the Service Fee and, if applicable, the Milestone Payment for such Calendar Quarter (the "Fee Notice"). + +5.5.2 Following receipt of a Fee Notice from Janssen pursuant to Section 5.5.1, Company shall invoice Janssen for the amount of the Service Fee payable with respect thereto, if any. + +5.5.3 Subject to Janssen obtaining appropriate consents from its Third Party specialty pharmacy partner, and the Parties reaching mutual agreement on the allocation between them of the associated costs, if any, Janssen shall provide prescriber level unit sales data generated from the specialty pharmacy partner on a weekly basis for the Company to track business trends, direct resources, measure sales force effectiveness, detailing sensitivity, and to design an effective sales incentive program. + +5.5.4 If a Party incurs any costs that are the responsibility of the other Party under this Agreement, such Party shall invoice the other Party for such costs promptly following the + + + + + +Calendar Quarter during which such costs were incurred. Such invoice shall include reasonable documentation of the costs for which the invoicing Party is seeking reimbursement. + +5.5.5 All invoices delivered in accordance with Section 5.5.2 or 5.5.4 shall be paid by the Paying Party within [***] ([***]) days after receipt of such invoice. + +5.5.6 All payments hereunder will be paid in U.S. Dollars and made available by bank wire transfer, in immediately available funds, to the account designated in writing by the Payee Party from time to time. Any changes to such account designation shall be made at least thirty (30) Business Days before the due date of the applicable payment. + +5.6 Tax Matters. The Paying Party shall make all payments to the Payee Party under this Agreement without deduction or withholding for any Taxes except to the extent that any such deduction or withholding is required by any Law in effect at the time of payment. Each Party shall otherwise be responsible for its own income taxes and corporate taxes and any other Taxes payable by such Party arising under or in connection with this Agreement and shall pay all such Taxes and file any applicable tax returns on a timely basis. Any Tax required to be withheld on amounts payable under this Agreement shall timely and promptly be paid by the Paying Party on behalf of the Payee Party to the appropriate Governmental Authority, and the Paying Party shall furnish the Payee Party with proof of payment of such Tax. Any such Tax required to be withheld shall be an expense of and borne by the Payee Party. If any such Tax is assessed against and paid by the Paying Party, then the amount of such Tax withheld shall be treated as paid by the Paying Party to the Payee Party and the Payee Party shall indemnify and hold harmless the Paying Party from and against such Tax. Both Parties will cooperate with respect to all documentation required by any taxing authority or reasonably requested by the Paying Party to secure a reduction in the rate of applicable withholding Taxes. + +ARTICLE VI REGULATORY MATTERS + +6.1 Regulatory Approvals. + +6.1.1 Obligations of Janssen. Janssen, either itself or through one of its Affiliates, shall use Diligent Efforts to obtain Regulatory Approval of the Product for the Initial Indication in the Territory and to maintain the validity of such Regulatory Approval throughout the Term, including the submission of any additional information requested by any Regulatory Authority in connection with such Regulatory Approval. Janssen shall have no obligation to file any application for Regulatory Approval for the Product in respect of any indication other than the Initial Indication. + +6.1.2 Rights of Janssen. Janssen shall be the holder of any and all Regulatory Approvals for the Product in the Territory and shall retain sole authority over all regulatory matters relating to the Product in the Territory. + + + + + +6.1.3 Communications with Regulatory Authorities. As between Janssen and Company, Janssen shall have the sole authority and responsibility for communicating with any Regulatory Authority regarding any Regulatory Approval of the Product in the Territory or any application or filing therefor, or regarding any other obligation to any Regulatory Authority in relation to the Product. Except as expressly set forth herein or as required by applicable Law or as approved in advance by Janssen in writing, Company shall not communicate directly with any Regulatory Authority regarding the Product or otherwise take any action concerning any application, registration, authorization or approval under which the Product is manufactured, imported, maintained, marketed, reimbursed or sold in the Territory. + +6.2 Pharmacovigilance Procedures. The Parties shall comply, and Company shall cause the Sales Representatives and Other Company Employees to comply, with the provisions set forth on Schedule 6.2, which govern the reporting of adverse events/adverse drug reactions associated with the Product, Product quality complaints associated with adverse events and other information concerning the safety of the Product within the Territory. + +6.3 Product Complaints. Janssen shall have the sole right and responsibility to accept and handle any Product Complaint associated with the use of the Product. Company shall, and shall cause each of its Sales Representatives and Other Company Employees to, notify Janssen as soon as possible, but no later than 24 hours after the time he or she becomes aware of any Product Complaint associated with the Product, which notice shall include the name of the person making such Product Complaint, the Target that prescribed the Product (if any), and the date the relevant Sales Representative or Other Company Employee received such Product Complaint. Details regarding the process for notifying Janssen of any such Product Complaints shall be as set forth in "product complaints standard operating procedures", a copy of which Janssen will provide to Company promptly following the Effective Date. + +6.4 Post-Marketing Surveillance. Janssen shall have the sole right to conduct any post marketing surveillance with respect to the Product ("PMS"), whether such PMS is elected by Janssen or required by applicable Law. + +6.5 Product Medical Inquiries. Janssen shall handle all medical questions from members of the medical profession regarding the Product in the Territory. Company shall refer all medical inquiries regarding the Product to Janssen through the established process outlined by Janssen for reporting of medical information requests, a copy of which Janssen will provide to Company promptly following the Effective Date. + +6.6 Companion Diagnostic Inquiries. Company shall direct all inquiries relating to the Companion Diagnostic in accordance with the procedures established by Janssen, a copy of which Janssen will provide to Company promptly following the Approval Date. + +6.7 Access, Affordability and Patient Support Inquiries. Company shall direct all inquiries relating to access, affordability, or patient support for the Product to the dedicated specialty pharmacy responsible for addressing such questions, in accordance with the procedures + + + + + +established by Janssen, a copy of which Janssen will provide to Company promptly following the Effective Date. + +ARTICLE VII BOOKS, RECORDS AND AUDIT RIGHTS + +7.1 Books and Records. Janssen and Company shall each maintain true and complete books and records with respect to the performance of its obligations hereunder, including the Company Internal Detail Reporting System and items underlying all payment obligations and invoices related to this Agreement (the "Books and Records"). Company shall maintain and manage its Books and Records in accordance with the records and information management requirements set forth on Exhibit C. + +7.2 Books and Records Audits. + +7.2.1 Right to Audit. Upon [***] ([***]) days prior notice from a Party (the "Auditing Party"), the other Party (the "Audited Party") will permit an independent certified public accounting firm of internationally recognized standing selected by the Auditing Party and reasonably acceptable to the Audited Party, to examine the relevant Books and Records of the Audited Party, as may be reasonably necessary to verify the accuracy of the reports provided by the Audited Party pursuant to Section 3.2.4 or Section 5.5.1, as applicable, and the payments made or invoiced under this Agreement. An examination by each Auditing Party under this Section shall occur not more than once with respect to the Term and will be limited to the pertinent Books and Records for Calendar Year 2019 and Calendar Year 2020. + +7.2.2 Scope of Audit. The independent certified public accounting firm will be provided access to the Books and Records of the Audited Party, and such examination will be conducted during the Audited Party's normal business hours. The Audited Party may require the accounting firm to sign a standard non-disclosure agreement before providing the accounting firm access to the Audited Party's facilities or Books and Records. The draft report of the accounting firm will be provided to the Audited Party so that justifying remarks can be included in the final report to be shared with the Auditing Party. Upon completion of the audit, the accounting firm will provide both Parties a final copy of the written report disclosing any discrepancies in the reports submitted by the Audited Party or the payments made or owed by the Audited Party, if any, and shall not include any confidential information (or additional information that is ordinarily not included in the Fee Notice or Detailing reports, as applicable) disclosed to the auditor during the course of the audit (such report, an "Audit Report"). + +7.2.3 Results of Audit. If an Audit Report shows that the Audited Party underpaid or failed to pay any amount due to the Auditing Party, then the Audited Party will pay to the Auditing Party the amount of such underpayment or non-payment. Such payment shall be made within [***] ([***]) days after the Audited Party's receipt of the Audit Report. If an Audit Report shows that Company overstated or otherwise misreported any information relating to Calls and Details, then Janssen shall be entitled to exercise any rights and seek any remedies it would have + + + + + +had if such information had been accurately reported. If the Audited Party disagrees with the findings of the Audit Report, the Parties will first seek to resolve the matter between themselves, and in the event they fail to reach agreement the dispute resolution provisions outlined in Article XIII shall be followed to resolve the dispute. Any unpaid Service Fees or Milestone Payments finally determined by such resolution to be payable shall be paid within [***] ([***]) days after such final resolution. If an Audit Report shows any overpayment by either Party, such Party will be entitled to receive, at its option, either a refund of such overpayment or a credit equal to such overpayment against the amounts otherwise payable by such Party to the other Party under this Agreement. + +7.2.4 Costs of Audit. If an Audit Report shows unpaid Service Fees or Milestones that exceeds [***] percent ([***]%) of the total amount owed by the Audited Party for the period being audited, then the reasonable and documented fees and expenses of such independent public accountant performing the examination shall be paid by the Audited Party, subject to reasonable substantiation thereof. Otherwise, the costs of the examination shall be solely borne by the Auditing Party. + +7.3 Compliance Audits. Janssen or an authorized representative of Janssen, and any governmental agency that regulates a Party, may, at reasonable times during the Term and upon reasonable notice to Company, inspect and audit the Books and Records of Company with respect to Company's obligations under this Agreement for the sole purpose of evaluating Company's compliance with Sections 3.1.3, 3.4.2, 11.5 and 11.6 of this Agreement, applicable Laws and the Promotion Rules. The costs of any such audit shall be borne by Janssen, unless such audit reveals noncompliance by Company due to a failure by Company that is not excused by Janssen under this Agreement, in which case Company shall reimburse Janssen for any out-of-pocket costs reasonably incurred in connection with the audit. + +ARTICLE VIII TERM AND TERMINATION + +8.1 Term; Termination. + +8.1.1 Term. This Agreement shall commence on the Effective Date and, unless earlier terminated, shall expire on the Expiration Date (the "Term"). For the avoidance of doubt, the Parties agree that Janssen's obligations under Section 5.2 (subject to Section 8.2.5) and Section 5.3 (subject to Section 8.2.5) shall remain in effect beyond the Expiration Date. + +8.1.2 Failure or Delay in Obtaining Regulatory Approval. This Agreement may be terminated by either Party, before the date that Marketing Approval has been obtained for the Product for the Initial Indication in the Territory, in the event that Janssen withdraws its application for Marketing Approval for the Product for the Initial Indication in the Territory or is notified by FDA that Janssen's application for such Marketing Approval in the Territory has been or will be denied. Further, this Agreement may be terminated by either Party in the event that Marketing Approval for the Product in the Territory is not obtained before June 30, 2019. Any such + + + + + +termination pursuant to this Section 8.1.2 shall be effective thirty (30) days following written notice of such termination being given to the non-terminating Party. + +8.1.3 Termination Scenarios Following Regulatory Approval. Without limiting either Party's rights under Section 8.3, this Agreement may be terminated by either Party with thirty (30) days' prior written notice to the other, in the event that (a) a Governmental Authority requires Janssen to withdraw permanently the Product from the market in the Territory for the Initial Indication or Regulatory Approval for the Product for the Initial Indication is otherwise withdrawn, (b) Janssen permanently withdraws the Product from the market in the Territory for the Initial Indication for safety reasons or (c) promotion and sale of the Product in the Territory for the Initial Indication has been suspended for more than three (3) months or is permanently suspended, in either case, as a consequence of and pursuant to Section 8.3. To the extent practicable, each Party will consult with the other Party before terminating this Agreement pursuant to this Section and will consider the other Party's input in good faith; provided, however, that the decision to withdraw the Product pursuant to clause (b) above will be made by Janssen in its sole discretion, acting in good faith. + +8.1.4 Material Breach. This Agreement may be terminated by either Party in the event that the other Party commits a material breach of this Agreement and (a) such breach shall not have been cured within thirty (30) days after the giving of notice of such material breach, unless (i) the specific provision to which such breach relates expressly provides for a different period, or (ii) the Parties mutually agree in writing to an extension of such period (the "Cure Period"); or (b) such breach, by its nature, is not curable. Unless such breach in clause (a) is cured during the Cure Period, such termination will be effective immediately upon the expiration of the Cure Period without any further action or notice by the non-breaching Party. In the case of a breach in clause (b), such termination will be effective thirty (30) days following written notice of such breach being given to the breaching Party. + +8.1.5 Performance Failure. This Agreement may be terminated by Janssen in accordance with Section 3.2.3 or 3.3.2(c). + +8.1.6 Competing Products. In the event that Company commits a breach of Section 9.2 or Section 9.3, then Janssen shall have the right to terminate this Agreement in its entirety at any time immediately upon written notice to Company. + +8.1.7 Insolvency Proceeding. This Agreement may be terminated by either Party, immediately and without notice, if the other Party at any time (a) commences a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar Law or seeking the appointment of a trustee, receiver, liquidator, custodian or similar official of it or of any substantial part of its property, or consents to any such relief or to the appointment of or taking possession by any such official in an involuntary case or other proceeding commenced against it, or makes a general assignment for the benefit of creditors, or takes any corporate action to authorize any of the foregoing, (b) has an involuntary case or other proceeding commenced against it seeking liquidation, reorganization or + + + + + +other relief with respect to it or its debts under any bankruptcy, insolvency or other similar Law or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property, and such involuntary case or other proceeding remains undismissed and unstayed for a period of ninety (90) days; or an order for relief is entered against such Party under applicable bankruptcy Laws, or (c) is insolvent or is generally unable to pay its debts as they become due. + +8.1.8 Force Majeure. This Agreement may be terminated by either Party in accordance with Section 14.2. + +8.1.9 Health Care Compliance. This Agreement may be terminated by Janssen in accordance with Section 2(d) of Exhibit D. + +8.1.10 Third Party Agreement. This Agreement may be terminated by Janssen with effect on December 31, 2019 or January 31, 2020, in either case with fifteen (15) days' advance written notice, and only in the event that Janssen has entered into an agreement with a Third Party that provides for (a) a license, sublicense, assignment, divestiture or other transfer or disposition of substantial rights or assets relating to the Product in the Territory, or (b) a collaboration involving the development and/or commercialization in the Territory of the Product or any other pharmaceutical product that contains erdafitinib. If Janssen terminates this Agreement pursuant to this Section 8.1.10, then Janssen shall, within [***] ([***]) days following the effective date of such termination, pay Company an amount equal to $[***] and, if the Milestone Event listed in the first line of the table in Section 5.3.1 has occurred, Janssen shall pay to Company an additional amount of $[***] (which shall be in addition to the Milestone Payment earned in respect of such Milestone Event). + +8.1.11 Company Product Additional Indication. This Agreement may be terminated by Janssen with thirty (30) days' prior written notice in the event that the Company Product is approved by the FDA for use in the treatment of urothelial cancer in any patient population in the Territory. + +8.2 Effect of Termination or Expiration. + +8.2.1 Materials. Upon the effective date of termination or expiration of this Agreement, Company shall immediately (a) cease, and cause the Sales Representatives and Other Company Employees to cease, all Promotion of the Product, (b) discontinue the use of any Promotional Materials, and (c) discontinue the use of any Janssen sales data, Target List and other documents and data related to the Product provided to Company by Janssen hereunder. As requested by Janssen, Company shall either maintain (subject to the provisions of Section 9.1 and Exhibit C) or promptly destroy (and certify to Janssen the destruction) or return to Janssen all Promotional Materials, all training materials and all other materials related to the Product provided by Janssen pursuant to this Agreement or the Brand Plan. With respect to any information, data, or reports provided by Janssen to Company under this Agreement, including Janssen sales data, that Janssen requests Company to destroy or return, Company shall upon the effective date of + + + + + +termination or expiration of this Agreement remove such information from its internal systems and certify to Janssen to such removal; provided, however, that such information shall not be required to be removed from inactive back-up computer files created pursuant to standard, automated archiving procedures. + +8.2.2 Confidential Information. Following the effective date of termination or expiration of this Agreement, without prejudice to Section 8.2.1, each Party shall use reasonable efforts to return, destroy or maintain (subject to the provisions of Section 9.1 and Exhibit C), at the Disclosing Party's election, all Confidential Information of the other Party (provided that the Receiving Party may keep one copy of such Confidential Information subject to an ongoing obligation of confidentiality for archival purposes only). + +8.2.3 Transition Plan. The Parties shall reasonably cooperate in good faith to effect the transition to Janssen of all Product promotional activities to minimize disruptions to customers and patients. In furtherance of the foregoing, and at the request of either Party, the Joint Commercial Team, reasonably in advance of the expected end of the Term shall develop and approve a transition plan that contains, among other things, a plan for notifying Targets and other customers or health care providers of such termination or expiration and transition, and, if applicable, provides for the completion of any events set forth in a Brand Plan which are already scheduled but will take place after the effective date of termination or expiration. + +8.2.4 Non-Exclusive Remedies. The consequences set forth in this Section 8.2 are not intended to be the exclusive remedies of the Parties in connection with the breach of or termination of this Agreement. + +8.2.5 Compensation in Certain Termination Events. If this Agreement is terminated pursuant to any of the following Sections, Janssen shall not be obligated to pay to Company (a) any Service Fees with respect to any period after the effective date of termination of this Agreement or (b) any Milestone Payments with respect to any Milestone Events that are achieved after the effective date of termination of this Agreement: Section 8.1.4 (if terminated by Janssen for breach by Company), 8.1.5, 8.1.6, 8.1.7 (if terminated by Janssen for the insolvency of Company), 8.1.8 (if terminated by Janssen for Force Majeure applicable to Company), 8.1.9, 8.1.10 (except that this Section 8.2.5 shall not affect Janssen's obligation to pay the amounts set forth in Section 8.1.10 as being payable in accordance with and subject to the conditions set forth in such Section 8.1.10) or 8.1.11. + +8.2.6 Survival. Termination or expiration of this Agreement shall not relieve a Party of any liability for any breach that occurred, or of any obligation to make payment that accrued, before or on the effective date of such termination or expiration, nor prejudice either Party's right to obtain performance of any obligation provided for in this Agreement that survives termination or expiration. All provisions of this Agreement which, in accordance with their terms, are intended to have effect after the expiration or termination of this Agreement shall survive such termination or expiration, including: Sections 3.1.2, 3.2.4(a) (with respect to the last month of the Term), 5.2 (subject to Section 8.2.5), 5.3 (subject to Section 8.2.5), 5.5.1, 5.5.2, 5.5.5, 5.5.6, 5.6, + + + + + +7.1, 7.2, 8.1.1 (last sentence only), 8.1.10 (only if the Agreement is terminated pursuant to Section 8.1.10), 8.2, 9.1, 10.2, 11.8, and Articles XII, XIII and XIV. + +8.3 Suspension of Product Promotion + +8.3.1 Right to Suspend. Janssen shall have the right to require that both Parties suspend the promotion of the Product in the Territory for the Initial Indication if Janssen decides, in its sole discretion, acting in good faith, that it is necessary to do so due to safety reasons, or to comply with applicable Law or a request or mandate of a Regulatory Authority, or because of any Third Party's claim or potential claim of intellectual property infringement in relation to the Product. In any such event, Company shall cease promoting the Product in the Territory immediately upon Company's receipt of notice from Janssen directing it to do so, and Janssen shall have the right to cease the sale and/or distribution of the Product for so long as promotion thereof is suspended. Janssen shall discuss its decision with Company as soon as it is practicable to do so and consider Company's input in good faith; provided, however, that all decisions regarding such matters shall be made by Janssen in its sole discretion. If Janssen decides to end any such suspension of the promotion, sale or distribution of the Product in the Territory, Janssen shall immediately notify Company of its decision. + +8.3.2 Adjustments Due to Suspension. In the event Janssen suspends the promotion and/or sale of the Product in the Territory for the Initial Indication pursuant to Section 8.3.1, and such suspension results in any restriction or prohibition on Detailing activities by Company for a period of one week or more, then the Parties will discuss and attempt to agree upon an appropriate adjustment to Company's Detailing obligations under the Brand Plan and/or the Baselines. + +ARTICLE IX CONFIDENTIALITY; RESTRICTIVE COVENANTS + +9.1 Confidentiality. + +9.1.1 Non-Disclosure and Non-Use. Except to the extent expressly authorized by this Agreement or otherwise agreed in writing, each of Janssen and Company agrees that, during the Term and until the conclusion of the [***] ([***]) year period beginning upon the expiration or earlier termination of this Agreement, such Party shall: (a) maintain in confidence the Confidential Information of the other Party using not less than the efforts such Party uses to maintain in confidence its own confidential or proprietary information of similar kind and value (but not less than reasonable efforts); (b) not disclose the Confidential Information of the other Party to any Third Party; and (c) not use the Confidential Information of the other Party for any purpose other than as provided for in this Agreement. + +9.1.2 Certain Information. The Brand Plan (including the Training Activities Plan and Call Plan), the Target List and all information and data contained within such documents is deemed to be the Confidential Information of Janssen. The reports of Details provided by Company pursuant to Section 3.2.4 and all data in the Company Internal Detailing System relating + + + + + +to the Product are deemed to be (a) the Confidential Information of both Parties during the Term and (b) the Confidential Information of Janssen after the Term. + +9.1.3 Exceptions. The obligations of Section 9.1.1 do not apply to any portion of the Confidential Information of a Party (the "Disclosing Party") that the other Party (the "Receiving Party") can show by competent written evidence: + +(a) is already known to the Receiving Party before the time of disclosure by the Disclosing Party, as evidenced by the Receiving Party's written records made or obtained before the date of disclosure; provided, however, that this clause (a) shall not apply to the reports and data described in the second sentence of Section 9.1.2; + +(b) is disclosed to the Receiving Party on a non-confidential basis by a Third Party who, to the knowledge of the Receiving Party, is under no obligation to the Disclosing Party (or any of its Affiliates) with respect to confidentiality, secrecy or restriction on the use of such information or data; + +(c) is now, or hereafter becomes, through no act or failure of the Receiving Party or any of its Affiliates in violation of this Agreement, generally known or available to the public; + +(d) is independently discovered or developed by or on behalf of the Receiving Party or any of its Affiliates (i) not pursuant to or in connection with this Agreement and (ii) without the use of or reference to the Confidential Information of the Disclosing Party as evidenced by the Receiving Party's written records; or + +(e) is publicly disclosed by the Disclosing Party, either before or after it is disclosed to the Receiving Party under this Agreement. + +9.1.4 Permitted Disclosure. The Receiving Party may disclose the Disclosing Party's Confidential Information only to the extent such disclosure is reasonably necessary in the following instances, or to the extent permitted under the other applicable provisions of this Agreement: + +(a) to those of the Receiving Party's Affiliates and its and their respective officers, directors, employees, agents, advisors and consultants who (a) are bound in writing (or, with respect to counsel to the Receiving Party, by professional or ethical obligations) by obligations of confidentiality and non-use substantially similar to and consistent with those of this Section 9.1, (b) need to receive the Confidential Information in order for the Receiving Party to exercise its rights, conduct the activities required by or fulfill its other obligations under this Agreement and (c) are made aware of the confidential nature of the information, and then only to the extent required for the Receiving Party to exercise its rights under, conduct the activities required by or fulfill its other obligations under this Agreement; provided that the Receiving Party shall be responsible and liable for any breach of the provisions of this Section 9.1 by any Person who receives Confidential Information pursuant to this Section 9.1.4(a); + + + + + +(b) with respect to Janssen as the Receiving Party, to the FDA or other applicable Regulatory Authority where such disclosure is required in connection with any filing, application, or request for any Regulatory Approval of the Product in the Territory; + +(c) to the extent that such disclosure is necessary to prosecute litigation for the protection, preservation, or return of Confidential Information or to enforce its rights under this Agreement; + +(d) to comply with applicable Law or the rules of any stock exchange on which such Party's securities (or the securities of a Party's Affiliate) are traded, subject to the terms of Section 9.1.5; + +(e) with respect to Janssen as the Receiving Party, to counterparties under the License Agreement to the extent such disclosure is required under the License Agreement or is advisable for the purpose of carrying out more fully Janssen's obligations under this Agreement or otherwise increasing Net Sales of the Product in the Territory; or + +(f) to comply with court orders or administrative orders pursuant to Law. + +In the case of disclosure pursuant to Section 9.1.4(c), 9.1.4(d) or 9.1.4(f), the Receiving Party (i) shall, to the extent reasonably practicable under the circumstances, give reasonable advance notice of the disclosure requirement to the Disclosing Party, so as to provide the Disclosing Party with the opportunity to secure, to the extent available, a protective order (or similar remedy) or other assurance of confidential treatment of the Confidential Information to be disclosed, and (ii) shall reasonably cooperate with the Disclosing Party, at its expense and request, in seeking such protective orders or other relief. + +Any permitted use of the Disclosing Party's Confidential Information by the Receiving Party for purposes of its performance hereunder will not be deemed a license or other right of the Receiving Party to use any such Confidential Information for any other purpose. The Receiving Party shall not acquire any right, title, or interest in or to any Confidential Information (including copies and summaries thereof and extracts therefrom, whether tangible or in electronic or other form) of the Disclosing Party by virtue of its disclosure hereunder. + +9.1.5 Terms of this Agreement. The terms of this Agreement are deemed to be, and shall be treated by each Party as, Confidential Information of each Party. Either Party may disclose the terms of this Agreement and other information relating to this Agreement or the transactions contemplated by this Agreement to the extent required, in the reasonable opinion of such Party's counsel, to comply with the rules and regulations promulgated by the United States Securities and Exchange Commission, New York Stock Exchange, Nasdaq Stock Market or similar security regulatory authorities or stock market in other countries. If a Party intends to disclose this Agreement or any of its terms or other Confidential Information of the other Party pursuant to this Section 9.1.5, such Party will, except where impracticable or not legally permitted, give reasonable advance notice to the other Party of such disclosure and seek confidential treatment + + + + + +of portions of this Agreement or such terms or information, as may be reasonably requested by the other Party in a timely manner. + +9.1.6 Prior Non-Disclosure Agreement. As of the Effective Date, the terms of this Section 9.1 supersede any prior non-disclosure, secrecy or confidentiality agreement between the Parties (or their Affiliates) relating to the subject matter of this Agreement, including the Mutual Confidentiality Agreement between the Parties dated February 1, 2019. Any information disclosed pursuant to any such prior agreement shall be deemed Confidential Information under this Agreement. + +9.2 Exclusivity. During the Term, neither Company nor any of its Affiliates (including, for the avoidance of doubt, any Third Party that becomes an Affiliate of Company after the Effective Date) shall, alone or in collaboration with any Third Party, market, promote, sell, distribute or otherwise commercialize in the Territory any Competing Product without the prior written consent of Janssen. In the event that, after the Effective Date, a Third Party (an "Acquirer") either (a) merges with Company, (b) acquires "control" (as defined in Section 1.4) of Company or (c) acquires substantially all the assets of the Company (each of (a), (b) and (c), an "Acquisition"), and such Acquirer or any of its Affiliates immediately prior to such Acquisition is commercializing a Competing Product in the Territory, then either Party shall have the right to terminate this Agreement on [***] ([***]) days written notice delivered within [***] ([***]) days of the closing of such Acquisition, and Company shall not be deemed to be marketing, promoting, selling, distributing or commercializing a Competing Product in breach of this Section for so long as it is conducting such activities solely through personnel who are not involved in any activities under this Agreement and do not have access to Janssen's Confidential Information hereunder. + +9.3 Restrictions on Promotion. During the Term, Company and its Affiliates (including, for the avoidance of doubt, any Third Party which becomes an Affiliate of Company after the Effective Date) (a) will not, whether alone or in collaboration with any Third Party or for itself or any Third Party, during the promotion of any product, compare such product (other than the Product) with the Product in any aspect nor disparage the Product in any manner, and (b) with respect to any such product that is a product of Company or its Affiliates and that Company or its Affiliates promotes, sells, distributes, or otherwise commercializes using or through a Third Party, will (i) cause any such Third Party, during the promotion of such product, not to compare such product with the Product in any aspect nor disparage the Product in any manner and (ii) not authorize any Third Party to make any such comparison or disparagement. + +9.4 Limitation on Soliciting Employees. During the Term, Janssen shall not directly or indirectly solicit for employment any Sales Representative who is an employee of Company, and Company shall not directly or indirectly solicit for employment any employee of Janssen with whom Company has had contact in the course of the evaluation or negotiation of this Agreement or with whom Company interacts during the Term; provided, however, that the foregoing provision will not prohibit either Party from (a) conducting general solicitations of employment in publications (including but not limited to websites, newspapers and/or journals) available to the public, or solicitations through the use of search firms, and which, in any case, are not directed + + + + + +specifically toward such employees of the other Party or (b) any contact with any such employee of the other Party (i) that was initiated by such employee without any solicitation prior thereto by the contacting Party (other than solicitation permitted by clause (a) of this sentence) or (ii) with whom the contacting Party is already in employment discussions as of the Effective Date, or (iii) by any person other than (A) one who was introduced to, or became aware of, the relevant employee of the other Party solely in connection with this Agreement, and (B) one who is acting at the direction or suggestion of a person described in (A). + +ARTICLE X INTELLECTUAL PROPERTY + +10.1 Use of Trademarks. Janssen and its Affiliates shall retain all right, title and interest in and to its and their respective Trademarks. Company shall Promote pursuant to this Agreement only under the Product name and other Product Trademarks used by Janssen in the Territory. Janssen hereby grants to Company, during the Term, a non-exclusive, royalty free right to use such Product name and Product Trademarks, and Janssen corporate names and logos, solely to the extent they are included on the Promotional Materials and solely for the purpose of using the Promotional Materials to Promote in the Territory under this Agreement. Company shall not, without the express, prior written consent of Janssen, alter or modify in any manner any Product Trademark or any other Trademark of Janssen. Company agrees to comply with such Janssen standard guidelines regarding the use of the Product Trademarks and any other Trademarks of Janssen, and any amendments thereto, as Janssen provides to Company from time to time after the Effective Date (including the Janssen Brand Usage Guidelines). + +10.2 Ownership of Intellectual Property Rights. Company acknowledges and agrees that Janssen or one of its Affiliates (a) is the sole and exclusive owner of all rights in and to the Product Trademarks and any other Trademarks of Janssen, including any form or embodiment thereof, and the goodwill now or hereafter associated therewith, (b) shall own the copyrights to all Promotional Materials and the Product Label and Insert, and (c) has the sole right to assert or control any action to enforce its rights in or to any of the Product Trademarks, any other Trademarks of Janssen or such copyrights and to receive the proceeds of any such action. Company further acknowledges and agrees that it does not, by virtue of this Agreement or its activities hereunder, obtain or acquire any right or interest in the Product Trademarks, any other Trademarks of Janssen, such copyrights, or any other intellectual property right of Janssen or its Affiliates. To the extent that Company, by operation of Law or otherwise, acquires any right (other than pursuant to this Agreement) to any of the Product Trademarks, any other Trademarks of Janssen, such copyrights or such other intellectual property rights, Company shall assign to Janssen all such rights at Janssen's cost and will not claim ownership. Company agrees that it shall not seek to register or obtain ownership rights in any of Janssen's corporate names, logos, or Product Trademarks (or any confusingly similar trademark). + +10.3 Prosecution and Maintenance. Janssen will have the right (and not the obligation) to prepare, file, prosecute and maintain any intellectual property right of Janssen or its Affiliates claiming or covering the Product or its use in its sole discretion and at its own cost. + + + + + +10.4 Enforcement against Infringement. Janssen and Company will each promptly notify the other in writing of any alleged or threatened infringement by a Third Party in the Territory of any intellectual property right of Janssen or its Affiliates claiming or covering the Product or its use in treating urothelial cancer, or any alleged or threatened assertion by a Third Party of invalidity of any of the intellectual property rights of Janssen or its Affiliates claiming or covering the Product or its use in treating urothelial cancer in the Territory, of which such Party becomes aware. Janssen and its Affiliates shall have the sole right (but not the obligation) to prosecute any such infringement in its sole discretion and at its sole cost. + +10.5 Third Party Infringement Claims. In the event that Janssen or its Affiliate(s) decides to obtain a license to intellectual property from a Third Party in the Territory in order to commercialize the Product, whether or not due to a Third Party claim, notice, or suit or other inter partes proceeding against Janssen, Company and/or their Affiliates alleging that the commercialization of the Product in the Territory infringes or misappropriates any intellectual property rights of such Third Party, Janssen and its Affiliate(s) shall be solely responsible for the costs associated with such license and Company shall provide reasonable cooperation to Janssen or its applicable Affiliate(s) in procuring and complying with such license. + +ARTICLE XI REPRESENTATIONS AND WARRANTIES; CERTAIN COVENANTS + +11.1 Representations of Authority. Janssen and Company each represents and warrants to the other Party that, as of the Effective Date, it has full right, power and authority to enter into this Agreement and to perform its respective obligations under this Agreement and that it has the right to grant to the other Party the rights granted pursuant to this Agreement as set forth herein. + +11.2 Consents. Janssen and Company each represents and warrants to the other Party that all necessary consents, approvals, and authorizations of all Government Authorities and other Persons required to be obtained by it as of the Effective Date in connection with the execution, delivery, and performance of this Agreement have been obtained by the Effective Date. + +11.3 No Conflict. Janssen and Company each represents and warrants to the other Party that the execution and delivery of this Agreement by it and the performance of its obligations hereunder (a) do not conflict with or violate any Laws existing as of the Effective Date as applicable to such Party and (b) do not conflict with, violate, breach, or constitute a default under any of its material contractual obligations existing as of the Effective Date. + +11.4 Enforceability. Janssen and Company each represents and warrants to the other Party that, as of the Effective Date, this Agreement is a legal and valid obligation binding upon it and is enforceable against it in accordance with its terms, subject to the laws of bankruptcy, insolvency, and creditors' rights. + + + + + +11.5 Sales Representatives and Other Company Employees. + +11.5.1 Company covenants to Janssen that: + +(a) with respect to the Product, the Sales Representatives and Other Company Employees in the Territory shall make no statements, claims, or undertakings to any health care provider with whom they discuss or promote the Product that are not consistent with, nor provide nor use any labeling, literature, or other materials other than, the Product Label and Insert and those Promotional Materials provided and approved for use pursuant to this Agreement; and + +(b) it shall ensure that all statements, comments and claims made by the Sales Representatives and Other Company Employees (i) about the Product, including as to efficacy and safety, are truthful and accurate and are consistent with and in strict compliance with the Product Label and Insert and all applicable Laws, and (ii) about Janssen in relation to the Product are truthful, accurate, and in strict compliance with all applicable Laws. + +Any statement, claim or comment that is contained in the Promotional Materials or the Product Label and Insert, in each case, as in effect when such statement, claim or comment is made, shall be deemed not to violate this Section 11.5.1. + +11.5.2 Company shall perform all Detailing and other promotional activities with respect to the Product in compliance with applicable Laws and the Promotion Rules. + +11.6 Other Compliance Matters. + +11.6.1 Company represents and warrants that it has established, and covenants that it will maintain during the Term, a compliance program consistent with the Compliance Program Guidance for Pharmaceutical Manufacturers published by the Office of Inspector General, U.S. Department of Health and Human Services. + +11.6.2 Company represents and warrants that it has implemented, and covenants that it will maintain during the Term, adequate systems, policies, and procedures governing (1) interactions with health care professionals, (2) material that can be distributed or discussed with health care professionals, (3) the manner in which personnel should handle unsolicited requests for off- label information, and (4) the review and approval of all marketing, promotion, and sales materials, call plans, and incentive compensation structures. Company represents and warrants that such policies and procedures are and will be consistent with applicable Law and with this Agreement. 11.6.3 Company represents and warrants that neither Company, nor any of its employees, officers, directors, or agents, has been debarred by the FDA, is the subject of a conviction described in 21 U.S.C. 335a, or is subject to any similar sanction. Company represents and warrants that it has not, and covenants that it will not engage, in any capacity in connection with this Agreement, any person who has been debarred by FDA, is the subject of a conviction + + + + + +described in 21 U.S.C. 335a, or is subject to any similar sanction. Company shall promptly inform Janssen in writing if it or any person performing services under this Agreement is debarred or is the subject of a conviction described in 21 U.S.C. 335a, or if any action, suit, claim, investigation, or legal or administrative proceeding is pending or threatened relating to the debarment or such conviction of Company or any such person performing services in connection with this Agreement. Upon written request from Janssen, Company shall, within ten (10) days, provide written confirmation that it has complied with the foregoing obligation. + +11.6.4 Company represents and warrants that it is in compliance, and covenants that it will continue to comply during the Term, with all applicable Laws, rules and regulations, including the federal anti-kickback statute (42 U.S.C. § 1320a-7b), the related safe harbor regulations, and the Limitation on Certain Physician Referrals, also referred to as the "Stark Law" (42 U.S.C. § 1395nn). + +11.6.5 Company shall conduct activities in accordance with applicable state and federal Laws and any applicable regulations regarding Medicare, Medicaid, and other third party-payer programs, if any. Company represents and warrants that (1) it is not excluded from, and has not been convicted of any crime or engaged in any conduct that could result in exclusion from, participation in any state or federal healthcare program, as defined in 42 U.S.C. §1320a-7b(f), for the provision of items or services for which payment may be made by a federal healthcare program; (2) it has not contracted, and will not contract, with any employee, contractor, agent, or vendor to perform work under the Agreement who is excluded from participation in any state or federal healthcare program; and (3) it is not subject to a final adverse action, as defined in 42 U.S.C.§ 1320a-7a(e) and 42 U.S.C. § 1320a- 7a(g), and has no adverse action pending or threatened against it. Company shall notify Janssen of any final adverse action, discovery of contract with an excluded entity or individual, or exclusion within thirty (30) days of such action. + +11.6.6 Company will comply with Exhibit D. + +11.6.7 Janssen represents and warrants that neither Janssen, nor any of its employees, officers, directors, or agents, has been debarred by the FDA, is the subject of a conviction described in 21 U.S.C. 335a, or is subject to any similar sanction. Janssen represents and warrants that it has not, and covenants that it will not engage, in any capacity in connection with this Agreement, any person who has been debarred by FDA, is the subject of a conviction described in 21 U.S.C. 335a or is subject to any similar sanction. Janssen shall promptly inform Company in writing if it or any person performing services under this Agreement is debarred or is the subject of a conviction described in 21 U.S.C. 335a, or if any action, suit, claim, investigation, or legal or administrative proceeding is pending or threatened relating to the debarment or such conviction of Janssen or any such person performing services in connection with this Agreement. + + + + + +11.6.8 Janssen represents and warrants that it has established, and covenants that it will maintain during the Term, Promotional Materials which are truthful, accurate, and in strict compliance with all applicable Laws. + +11.6.9 Janssen represents and warrants that it is in compliance, and covenants that it will continue to comply during the Term, with all applicable Laws, rules and regulations, including the federal anti-kickback statute (42 U.S.C. § 1320a-7b), the related safe harbor regulations, and the Limitation on Certain Physician Referrals, also referred to as the "Stark Law" (42 U.S.C. § 1395nn). + +11.6.10 Janssen shall conduct all activities hereunder in accordance with applicable state and federal Laws, including any applicable regulations regarding Medicare, Medicaid, and other third party-payer programs, if any. Janssen represents and warrants that (1) it is not excluded from, and has not been convicted of any crime or engaged in any conduct that could result in exclusion from, participation in any state or federal healthcare program, as defined in 42 U.S.C. §1320a-7b(f), for the provision of items or services for which payment may be made by a federal healthcare program; (2) it has not contracted, and will not contract, with any employee, contractor, agent, or vendor to perform work under the Agreement who is excluded from participation in any state or federal healthcare program; and (3) it is not subject to a final adverse action, as defined in 42 U.S.C.§ 1320a-7a(e) and 42 U.S.C. § 1320a-7a(g), and has no adverse action pending or threatened against it. + +11.7 Infringement of Third Party Intellectual Property; Clinical Trial Data. Janssen represents and warrants to Company that, to its knowledge, as of the Effective Date, the manufacture, use, import, or sale of the Product in the Territory for the Initial Indication does not, and will not during the Term, infringe or misappropriate any intellectual property rights of any Third Party. Janssen represents and warrants to Company that, as of the Effective Date, [***]. + +11.8 Disclaimer. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS ARTICLE XI, NEITHER JANSSEN NOR COMPANY, NOR ANY OF THEIR AFFILIATES, MAKES ANY REPRESENTATION OR EXTENDS ANY WARRANTY OF ANY KIND, EITHER EXPRESS OR IMPLIED, TO THE OTHER PARTY IN CONNECTION WITH THE PRODUCT, AND HEREBY DISCLAIMS ALL IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT WITH RESPECT TO THE PRODUCT. EACH PARTY HEREBY DISCLAIMS ANY REPRESENTATION OR WARRANTY THAT THE EXPLOITATION OF THE PRODUCT PURSUANT TO THIS AGREEMENT WILL BE SUCCESSFUL OR THAT ANY PARTICULAR SALES LEVEL WITH RESPECT TO THE PRODUCT WILL BE ACHIEVED. + + + + + +ARTICLE XII INDEMNIFICATION; LIMITS ON LIABILITY + +12.1 Scope of Indemnification. + +12.1.1 Janssen shall indemnify and hold harmless Company, its Affiliates and its and their respective directors, officers, employees, and agents (collectively, the "Company Indemnified Parties"), from, against, and in respect of any and all liabilities, costs, fines, penalties, orders of any Governmental Authorities, Taxes, expenses, or amounts paid as damages or in settlement (in each case, including reasonable attorneys' and experts fees and expenses), involving an Action asserted by a Third Party (collectively, "Losses"), incurred or suffered by the Company Indemnified Parties or any of them and arising out of or resulting from: + +(a) any breach by Janssen or any of the other Janssen Indemnified Parties of any representation, warranty or covenant under this Agreement; + +(b) the negligence or willful misconduct of Janssen or any of the other Janssen Indemnified Parties in connection with Janssen's performance under this Agreement; + +(c) any claim of death or bodily injury resulting from the use of the Product sold in the Territory; or + +(d) any recall, withdrawal, product return or suspension of product promotion under Section 3.6, 3.7 or 8.3. + +except, in each case ((a), (b) (c), and (d)), to the extent caused by the negligence or willful misconduct of Company or any of the other Company Indemnified Parties or the breach by Company of any of its representations, warranties or covenants set forth herein. + +12.1.2 Company shall indemnify and hold harmless Janssen, its Affiliates, and its and their respective directors, officers, employees, and agents (collectively, the "Janssen Indemnified Parties"), from, against and in respect of any and all Losses incurred or suffered by the Janssen Indemnified Parties or any of them and arising out of or resulting from: + +(a) any breach by Company or any of the other Company Indemnified Parties of any representation, warranty or covenant under this Agreement; or + +(b) the negligence or willful misconduct of Company or any of the other Company Indemnified Parties in connection with Company's performance under this Agreement; + +except in each case ((a) and (b)), to the extent caused by the negligence or willful misconduct of Janssen or any of the other Janssen Indemnified Parties or the breach by Janssen of any of its representations, warranties or covenants set forth herein. + + + + + +12.2 Notice and Control of Actions. + +12.2.1 A Person entitled to indemnification under this Article XII (an "Indemnified Party") shall give prompt written notification to the Person from whom indemnification is sought (the "Indemnifying Party") of the assertion of any Action by a Third Party for which indemnification may be sought (it being understood and agreed, however, that the failure by an Indemnified Party to give such notice of a Third Party Action as provided in this Section 12.2.1 shall not relieve the Indemnifying Party of its indemnification obligation under this Agreement except and only to the extent that such Indemnifying Party is actually prejudiced as a result of such failure to give notice). + +12.2.2 Within thirty (30) days after delivery of such notification, the Indemnifying Party may, upon written notice thereof to the Indemnified Party, assume control of the defense of such Action with counsel reasonably satisfactory to the Indemnified Party; provided, however, that the Indemnifying Party shall not have the right to control the defense of any Action against any Indemnified Party involving criminal charges or tax matters. If the Indemnifying Party does not assume control of the defense of an Action, the Indemnified Party shall control such defense. + +12.2.3 The Party not controlling such defense shall reasonably cooperate with the other Party at such other Party's request and expense, and may participate therein at its own expense; provided, however, that if the Indemnifying Party assumes control of such defense and the Indemnified Party reasonably concludes, based on advice from counsel, that the Indemnifying Party and the Indemnified Party have conflicting interests with respect to such Action, the Indemnifying Party shall be responsible for the reasonable fees and expenses of counsel to the Indemnified Party solely in connection with such Action; provided further, however, that in no event shall the Indemnifying Party be responsible for the fees and expenses of more than one counsel for all Indemnified Parties. + +12.2.4 The Party controlling such defense shall keep the other Party advised of the status of such Action and the defense thereof and shall consider recommendations made by the other Party with respect thereto. + +12.2.5 The Indemnified Party shall not agree to any settlement of such Action, consent to any judgment in respect thereof or admit any liability with respect thereto, without the prior written consent of the Indemnifying Party, which shall not be unreasonably withheld or delayed. + +12.2.6 The Indemnifying Party shall not agree to any settlement of such Action or consent to any judgment in respect thereof without the prior written consent of the Indemnified Party, which shall not be unreasonably withheld or delayed; provided, however, that no such consent shall be required with respect to any such settlement, compromise or consent to judgment that (a) involves solely the payment of money damages as to which the Indemnifying Party has acknowledged its obligation to indemnify hereunder, (b) does not involve any claim for injunctive + + + + + +or other equitable relief, and (c) effects a full and unconditional release of the Indemnified Party with respect to all claims related to the Action. + +12.3 Limitations on Liability. SUBJECT TO AND WITHOUT LIMITING THE INDEMNIFICATION OBLIGATIONS OF EACH PARTY WITH RESPECT TO THIRD PARTY ACTIONS UNDER SECTIONS 12.1 AND 12.2, AND EXCEPT WITH RESPECT TO LIABILITY ARISING FROM BREACH OF SECTION 9.1 BY A PARTY, NO PARTY OR ANY OF ITS AFFILIATES WILL BE LIABLE TO THE OTHER PARTY OR ITS AFFILIATES UNDER ANY CONTRACT, WARRANTY, NEGLIGENCE, TORT, STRICT LIABILITY OR OTHER LEGAL OR EQUITABLE THEORY FOR ANY SPECIAL, INDIRECT, INCIDENTAL, PUNITIVE, MULTIPLIED OR CONSEQUENTIAL DAMAGES, OR OTHER DAMAGES FOR LOSS OF PROFIT, SALES OR FEES, ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ITS SUBJECT MATTER. FURTHER, SUBJECT TO AND WITHOUT LIMITING THE INDEMNIFICATION OBLIGATIONS OF EACH PARTY WITH RESPECT TO THIRD PARTY ACTIONS UNDER SECTIONS 12.1 AND 12.2, AND EXCEPT WITH RESPECT TO LIABILITY ARISING FROM BREACH OF SECTION 9.1 BY A PARTY OR ARISING FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF A PARTY, EACH PARTY'S AGGREGATE LIABILITY TO THE OTHER PARTY FOR ALL CASES AND CONTROVERSIES ARISING OUT OF THE SUBJECT MATTER OF THIS AGREEMENT, REGARDLESS OF THE CAUSE OF ACTION AND WHETHER BROUGHT IN CONTRACT, TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY OR OTHERWISE, WILL BE LIMITED TO $[***]. THE AMOUNT OF SERVICE FEES AND MILESTONE PAYMENTS PAID OR DUE TO COMPANY UNDER THIS AGREEMENT WILL NOT BE INCLUDED IN THE CALCULATION OF SUCH AGGREGATE LIABILITY AMOUNT. + +12.4 Insurance. Company agrees to comply with Exhibit E attached hereto, which is incorporated herein by this reference. + +ARTICLE XIII DISPUTE RESOLUTION + +13.1 Disputes. All disputes, claims or controversies (other than matters that are expressly stated herein to require the consent of either or both Parties) arising from or related to this Agreement, or to the interpretation, application, breach, termination or validity of this Agreement, whether based on contract, tort, statute, or other theory of liability ("Disputes"), shall be resolved in accordance with this Article XIII. It is the intent of the Parties that all Disputes relating in any way to this Agreement should be resolved in accordance with this Article, including Disputes that may involve the parent companies, subsidiaries, and other Affiliates of any Party. + +13.2 Negotiation. Before any Dispute may be submitted to mediation or arbitration as provided below, the Dispute shall be referred to the President of Janssen and the Chief Executive Officer of Company for discussion and attempted resolution. No statements made by either Party during such discussions will be used by the other Party or admissible in arbitration or any other + + + + + +subsequent proceeding for resolving the dispute. If such executives do not resolve the Dispute within thirty (30) days of such referral by either Party, then either Party may, upon written notice to the other Party, submit the Dispute to mediation pursuant to Section 13.3 and binding arbitration pursuant to Section 13.4. + +13.3 Mediation. + +13.3.1 The Parties shall first attempt in good faith to resolve any Dispute that is not resolved pursuant to Section 13.2 by confidential mediation in accordance with the then current Mediation Procedure of the International Institute for Conflict Prevention and Resolution ("CPR Mediation Procedure") (http://www.cpradr.org) before initiating arbitration. The CPR Mediation Procedure shall control, except where the CPR Mediation Procedure conflicts with these provisions, in which case these provisions control. The mediator shall be chosen pursuant to the CPR Mediation Procedure. The mediation shall be conducted in English in New York, New York. At the request of either Party (and at the shared expense of the Parties), the mediation shall have simultaneous translation from and into English. + +13.3.2 Either Party may initiate mediation with respect to any Dispute that is not resolved pursuant to Section 13.2 by written notice to the other Party. The Parties agree to select the mediator within twenty (20) days of the notice and the mediation will begin promptly after the selection. The mediation will continue until the mediator or either Party, declares in writing, no sooner than after the conclusion of one full day of a substantive mediation conference attended on behalf of each Party by a senior business person with authority to resolve the Dispute, that the Dispute cannot be resolved by mediation. In no event, however, shall mediation continue more than sixty (60) days from the initial notice by a Party to initiate meditation unless the Parties agree in writing to extend that period. + +13.3.3 Any period of limitations that would otherwise expire between the initiation of mediation and its conclusion shall be extended until twenty (20) days after the conclusion of the mediation. + +13.4 Arbitration. If the Parties fail to resolve a Dispute by mediation under Section 13.3 and either Party desires to pursue resolution of the Dispute, the Dispute shall be submitted by either Party for resolution in arbitration pursuant to the then current CPR Rules for Non-Administered Arbitration of International Disputes ("CPR Rules") (http://www.cpradr.org), except where they conflict with these provisions, in which case these provisions control. CPR is designated as the Neutral Organization for all purposes. + +13.4.1 Language/Location. The arbitration shall be conducted in English in New York, New York. + +13.4.2 Selection of Arbitrators. + +(a) The arbitrators will be chosen from the CPR Panels of Distinguished Neutrals, unless a candidate not on the CPR Panels of Distinguished Neutrals is approved by both + + + + + +Parties. Each arbitrator shall be a lawyer with at least fifteen (15) years' experience with a law firm or corporate law department of over twenty-five (25) lawyers or who was a judge of a court of general jurisdiction. To the extent that the Dispute requires special expertise, the Parties will so inform CPR prior to the beginning of the selection process. + +(b) The arbitration tribunal shall consist of three (3) arbitrators, chosen in accordance with Rules 5.3 and 6 of the CPR Rules. If, however, the aggregate award sought by the Parties is less than five million United States dollars (USD $5,000,000) and equitable relief is not sought, a single arbitrator shall be chosen in accordance with Rules 5.3 and 6 of the CPR Rules. + +(c) Candidates for the arbitrator position(s) may be interviewed by representatives of the Parties in advance of their selection, provided that all Parties are represented. + +(d) The Parties agree to select the arbitrator(s) within forty-five (45) days of initiation of the arbitration. + +13.4.3 Conduct of Proceedings. + +(a) The hearing will be concluded within nine (9) months after selection of the arbitrator(s) and the award will be rendered within 60 days of the conclusion of the hearing, or of any post hearing briefing, which briefing will be completed by both sides within 45 days after the conclusion of the hearing. In the event the Parties cannot agree upon a schedule, then the arbitrator(s) shall set the schedule following the time limits set forth above as closely as practical. + +(b) The arbitrator(s) shall be guided, but not bound, by the IBA Rules on the Taking of Evidence in International Commercial Arbitration (www.ibanet.org). + +(c) The hearing will be concluded in ten hearing days or less. Multiple hearing days will be scheduled consecutively to the greatest extent possible. A transcript of the testimony adduced at the hearing shall be made and shall be made available to either Party. + +13.4.4 Applicable Law. The arbitrator(s) shall decide the merits of any Dispute in accordance with the law governing this Agreement, without application of any principle of conflict of laws that would result in reference to a different law. The arbitrator(s) may not apply principles such as "amiable compositeur" or "natural justice and equity." + +13.4.5 Award. + +(a) The arbitrator(s) shall render a written opinion stating the reasons upon which the award is based. The arbitrator(s) may award the costs and expenses of the arbitration as provided in the CPR Rules, but each Party shall bear its own attorney fees. + +(b) The award may be entered and enforced in any court of competent jurisdiction. If a court is called upon to enforce an award in a court proceeding, the Parties consent + + + + + +to the court's requiring the Party resisting enforcement to pay the reasonable attorneys' fees and costs incurred in that proceeding by the Party seeking enforcement. + +13.4.6 Provisional Relief. Any Party may seek emergency, interim, or provisional relief prior to the appointment of the arbitrator(s) from any court of competent jurisdiction, without waiver of the agreements to mediate and arbitrate. After appointment of the arbitrator(s), any request for emergency, interim, or provisional relief shall either be addressed to the arbitrator(s), which shall have the power to enter an interim award granting relief using the standards provided by applicable law, or to a court, but only with the permission of the arbitrator(s). Any interim award of the arbitrator(s) may be enforced in any court of competent jurisdiction. + +13.4.7 WAIVER. EACH PARTY HERETO WAIVES: (A) ITS RIGHT TO TRIAL OF ANY ISSUE BY JURY, (B) WITH THE EXCEPTION OF RELIEF MANDATED BY STATUTE, ANY CLAIM FOR THE TYPES OF DAMAGES EXCLUDED BY SECTION 12.3 (SUBJECT TO THE EXCEPTIONS SPECIFIED IN SUCH SECTION), AND (C) ANY CLAIM FOR ATTORNEY FEES, COSTS AND PREJUDGMENT INTEREST. + +13.5 Confidentiality. All proceedings and decisions of the mediator(s) and/or arbitrator(s) shall be deemed Confidential Information of each of the Parties and shall be subject to Section 9.1. + +ARTICLE XIV MISCELLANEOUS + +14.1 Press Announcements. Neither Party, nor any of its Affiliates, shall issue any press release or make any other public statement relating to the terms and conditions of this Agreement or the relationship contemplated hereunder without the prior written consent of the other Party. Notwithstanding the foregoing, each Party (or its applicable Affiliate) may make any disclosure relating to the Product or the terms and conditions of this Agreement that such Party (or Affiliate), in the opinion of its counsel, is obligated to make pursuant to Laws applicable to publicly-traded companies, including, inter alia, regulations of the Securities and Exchange Commission, the New York Stock Exchange or the Nasdaq Stock Market. In such event, the announcement shall be brief and factual (to the extent consistent with applicable Laws), and the Party required to make such disclosure shall, to the extent practicable, notify the other Party of the method and content of such disclosure a reasonable period of time (at least five (5) Business Days if possible) in advance thereof, so as to allow such other Party to review it for the use of its name and disclosure of Confidential Information. + +14.2 Force Majeure Event. All incidents of force majeure, being circumstances beyond the reasonable control of either Party and which have, or may have, a material effect on the ability of such Party to perform under this Agreement, including, failure of power or other utility or sanitary supplies; fire; flood; earthquake; other natural disaster; explosion; riot; strike or lock-out of such Party's workforce; civil insurrection or unrest; terrorist activity; war (whether declared or not); and regulations of any Governmental Authority, in each case, to the extent beyond the + + + + + +reasonable control of such Party ("Force Majeure"), shall, for the duration and to the extent of the effects caused thereby, release such Party from the performance of its contractual obligations hereunder. The Party who has suffered the Force Majeure shall notify the other Party without delay of any such incident(s) occurring, and the Parties shall discuss the effects and extent of such incident(s) on this Agreement and the measures to be taken. Each Party shall use Diligent Efforts to avoid or restrict Force Majeure and to mitigate any loss therefrom. In the event of an incident or incidents of Force Majeure, the Party whose performance has been affected thereby shall as soon as reasonably possible resume performance of its obligations hereunder. If any Force Majeure substantially prevents, hinders, or delays performance by a Party in a manner and to an extent that would, but for this Section, constitute a material breach or give rise to a right of termination hereunder, and the performance is not materially restored within one hundred eighty (180) days, the other Party may terminate this Agreement upon written notice to such Party. + +14.3 Independent Contractors. Nothing in this Agreement shall create or imply an association, partnership, or joint venture between the Parties, it being agreed and understood that the Parties are independent contractors; and neither Party, with respect to a Third Party, shall have the power or authority to bind or obligate the other Party in any way. Neither Party shall have any responsibility for the hiring, termination or compensation of the other Party's employees or for any employee benefits of such employee. No employee or representative of a Party shall have any authority to bind or obligate the other Party to this Agreement for any sum or in any manner whatsoever, or to create or impose any contractual or other liability on the other Party without said Party's approval. + +14.4 Performance by Affiliates. To the extent that this Agreement purports to impose obligations on the Affiliates of a Party, such Party agrees to cause its Affiliates to perform such obligations. Company shall not use an Affiliate to exercise any of its rights or perform any of its obligations or duties hereunder without Janssen's prior written consent. Janssen may use an Affiliate to exercise its rights or perform its obligations and duties hereunder with prior written notice to Company. If either Janssen or Company uses an Affiliate to exercise any of its rights or perform any of its obligations or duties hereunder, as the case may be, such Party shall remain liable hereunder for the prompt payment and performance of all of its obligations hereunder. + +14.5 Notices. + +14.5.1 All notices, statements, requests or other documents that either Party shall be required or shall desire to give to the other hereunder shall be in writing and shall be given by the Parties only as follows: (a) by personal delivery; (b) by facsimile, receipt confirmed; (c) by addressing it as indicated below, and by depositing it certified mail, postage prepaid, in the mail, first class (airmail if the address is outside of the country in which such notice is deposited); or (d) by addressing it as indicated below, and by delivering it toll prepaid to a recognized courier service (e.g., Federal Express or DHL). + +14.5.2 If so delivered, transmitted by facsimile, mailed, or couriered, each such notice, statement, request or other document shall, except as herein expressly provided, be + + + + + +conclusively deemed to have been given when personally delivered or faxed during a Business Day, or on the fifth (5th) Business Day after the date of mailing, or on the second (2nd) Business Day after delivery to a courier service, as the case may be. The address of a Party shall be the address of which the other Party actually receives written notice pursuant to this Section 14.5 and until further notice such addresses are: + +If to Janssen, to: + +Janssen Biotech, Inc. 800 Ridgeview Dr. Horsham, PA 19044 Attention: President, Oncology Facsimile: [***] + +With a copy (which shall not constitute notice) to: + +Office of the General Counsel Johnson & Johnson One Johnson & Johnson Plaza New Brunswick, NJ 08933 Attn: General Counsel, Pharmaceuticals Fax No.: [***] + +If to Company, to: + +Immunomedics, Inc. 300 The American Road Morris Plains, NJ 07950 Attn: General Counsel + +14.6 Entire Agreement. This Agreement, including the exhibits and schedules attached hereto (which are hereby incorporated by reference), sets forth the entire agreement and understanding between the Parties as to the subject matter hereof and supersedes all agreements or understandings, oral or written, made between the Parties before the Effective Date with respect to the subject matter hereof. 14.7 Amendments; Assignment. This Agreement may not be revised, amended, supplemented, or varied except by an instrument in writing signed by Janssen and Company. Neither this Agreement nor any rights or obligations of a Party may be assigned, delegated or otherwise transferred by such Party without the prior written consent of the other Party; provided, however, that Janssen may, without such consent but with prior written notice to Company, assign, delegate and transfer this Agreement or all or any of its rights and obligations under this Agreement to (a) any Third Party that acquires substantially all Janssen's assets relating to the Product in the + + + + + +Territory or (b) any Affiliate of Janssen. Any attempted assignment, transfer or delegation not in accordance with this Section shall be void. + +14.8 Non-Waiver of Rights. Failure of a Party to enforce any of the provisions of or any rights with respect to this Agreement shall in no way be considered a waiver of such provisions or rights or in any way affect the validity of this Agreement. The failure of either Party to enforce any of such provisions or rights shall not preclude or prejudice such Party from later enforcing or exercising the same or any other provisions or rights which it may have under this Agreement. The waiver of any provision, right or obligation under this Agreement shall be effective only if in a written instrument signed by the Party to be bound thereby. + +14.9 Further Assurances and Cooperation. Each Party agrees that after the Effective Date it will execute and deliver, or cause its Affiliates to execute and deliver, such further documents and instruments as may be reasonably necessary or proper to fully effectuate this Agreement and the transactions contemplated hereby. + +14.10 Severability. This Agreement is intended to be valid and effective under any Laws and, to the extent permissible under Law, shall be construed in a manner to avoid violation of or invalidity under any Laws. Should any provisions of this Agreement be or become invalid, illegal, or unenforceable under any Laws, the other provisions of this Agreement shall not be affected and shall remain in full force and effect, and, to the extent permissible under the Laws, any such invalid, illegal, or unenforceable provision shall be deemed amended lawfully to conform with the intent of the Parties. + +14.11 Binding Effect. This Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and permitted assigns. + +14.12 Counterparts; Facsimile Signatures. This Agreement may be executed in counterparts, each of which counterparts, when so executed and delivered, will be deemed to be an original, and all of which counterparts, taken together, will constitute one and the same instrument even if all parties have not executed the same counterpart. Signatures provided by any photocopy and transmitted by facsimile or other electronic means will be deemed to be original signatures. + +14.13 Third Party Beneficiaries. The provisions of this Agreement are not intended legally to benefit or be enforceable by any Person who is not a party to this Agreement, and no such Person shall obtain any right under any such provisions or shall by reason of such provisions make any claim against a party to this Agreement. + +14.14 Governing Law. The interpretation, construction and performance of this Agreement, and the rights granted and obligations arising hereunder, shall be governed in accordance with the substantive laws of the State of New York, without regard to its conflicts of law rules. + + + + + +14.15 Construction. Except where expressly stated otherwise in this Agreement, the following rules of interpretation apply to this Agreement: (a) "include", "includes", and "including" are not limiting and mean include, includes, and including, without limitation; (b) definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms; (c) references to an agreement, statute, regulation, or instrument mean such agreement, statute, regulation, or instrument as from time to time amended, modified, or supplemented; (d) references to a Person are also to its successors and permitted assigns; (e) references to an "Article", "Section", "Exhibit", or "Schedule" refer to an Article or Section of, or any Exhibit or Schedule to, this Agreement unless otherwise indicated; (f) the word "will" shall be construed to have the same meaning and effect as the word "shall"; (g) the use of any gender shall be applicable to all genders; and (i) the words "hereof" and "hereunder", and words of similar import, shall be construed to refer to this Agreement as an entirety and not to any particular provision. The captions of this Agreement are for convenience of reference only and in no way define, describe, extend, or limit the scope or intent of this Agreement or the intent of any provision contained in this Agreement. Any reference in this Agreement to a matter or action being subject to the "mutual agreement" or "mutual consultation" of the Parties, or words of similar import, shall not be construed as an agreement that the Parties shall agree to such matter or action. The language of this Agreement shall be deemed to be the language mutually chosen by the Parties and no rule of strict construction shall be applied against either Party on the basis that such Party drafted this Agreement or any portion hereof. + +[The remainder of this page is intentionally left blank.] + + + + + +IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date. + +JANSSEN BIOTECH, INC. By: /s/Reshema Keups-Polanco Name: Reshema Keups-Polanco Title: VP, Sales and Marketing, Solid Tumor + +IMMUNOMEDICS, INC. By: /s/Jared Freedberg Name: Jared Freedberg Title: General Counsel + + + + + +Schedule 1.16 + +Janssen Universal Calendar + + + + + + + + + +Schedule 6.2 + +Pharmacovigilance Provisions + +1 Definitions + +1.1 "Adverse Event" (AE) means any untoward medical occurrence in a patient or a clinical-trial subject administered a medicinal product and which does not necessarily have to have a causal relationship with this treatment. An adverse event can therefore be any unfavourable and unintended sign (for example, an abnormal laboratory finding), symptom, or disease temporally associated with the use of a medicinal product, whether or not considered related to this medicinal product. + +1.2 "Agreement" means the Promotion Agreement to which this Schedule is attached. + +1.3 "Applicable Law" means the applicable laws, rules, regulations, including any guidelines or other requirements of any Regulatory Authority in the relevant country of the Territory, and industry guidelines or codes of conduct that may apply to the review and analysis of safety information, the reporting of safety information to Regulatory Authorities and the maintenance of records thereof. + +1.4 "Company Employee" means any employee of Immunomedics, Inc. or any of its Affiliates conducting activities under the Agreement. + +1.5 "Date of First Receipt" means the date of receipt or coming into possession or control of safety information, which contains at a minimum a suspect medicinal product and a suspect event i.e. an incomplete case. Unless otherwise indicated in the Applicable Law the Regulatory Clock Start Date or Day Zero for regulatory reporting, is the date the minimum criteria for reporting as defined by the Applicable Law becomes available (i.e., an identifiable subject/ patient, identifiable reporter, suspect product, and event). + +1.6 "Incomplete Case" means a case that does not contain minimum criteria for reporting (as defined by the Applicable Law) to a Regulatory Authority (i.e., an identifiable subject/ patient, identifiable reporter, suspect medicinal product, and event), but at a minimum contains a suspect medicinal product and a suspect event. Such reports are entered on the safety database maintained by Janssen as potential cases of value for signal detection purposes. + + + + + +1.7 "Personal Data" means any information relating to an identified or identifiable natural person. + +1.8 "Product" has the meaning set forth in Section 1.77 of the Agreement. + +1.9 "Product Quality Complaint" (PQC) Any written, electronic or oral communication that alleges deficiencies related to the identity, quality, durability, reliability, safety, effectiveness or performance of a product after it is released for distribution. + +1.10 "Regulatory Authority" means any applicable federal, national, regional, state, provincial or local regulatory agencies, departments, bureaus, commissions, councils or other government entities regulating or otherwise exercising authority with respect to the Product in the relevant Territory. + +1.11 "Special Situation" Occurrences or reports that may not contain an adverse event, which must still be collected and reported in order to meet regulatory safety reporting requirements and Janssen policies: + +• Overdose of Product, • Pregnancy exposure (maternal and paternal), • Exposure to the Product from breastfeeding, • Suspected abuse/misuse of the Product, • Inadvertent or accidental exposure to the Product (including occupational exposure), • Any failure of expected pharmacological action (i.e. lack of effect) of the Product, • Unexpected therapeutic or clinical benefit from use of the Product, • Medication error (includes potential, intercepted or actual) involving the Product with or without patient/consumer exposure to the Product, (e.g. name confusion) OR that caused an unintended effect or could cause an intended effect (e.g. adult medicine given to a young child), • Suspected transmission of an infectious agent via Product, • Expired drug use and falsified medicine, + + + + + +• Off-label use - situations where the Product is intentionally used for a medical purpose not in accordance with the authorized product information. + +Off-label use without an associated AE, Special Situation, UE or AEPQC should be collected only when it is specifically and voluntarily brought to the attention of a Company Employee in an unsolicited manner by a reporter e.g., Health Care Professional or data obtained from databases where off-label use may be systematically collected (e.g., reimbursement database in US), and in accordance with local procedure in compliance with local laws and regulations. Follow-up of off-label use is not required. + +1.12 "Territory" means the United States of America, including its territories and possessions. + +1.13 "Undesirable Effect" (UE) shall mean an adverse reaction for human health attributable to the normal or reasonably foreseeable use of a cosmetic product. + +Note: All capitalized terms used but not defined in this Schedule shall have the meanings ascribed to them (if any) in the Agreement. + +2 Reporting Requirements + +2.1 If any Company Employee receives or otherwise comes into possession or control of any information about the Product, regardless of source, relating to an Adverse Event (AE), Special Situation, AE associated with a Product Quality Complaint (AEPQC), Undesirable Effect (UE) or an Incomplete Case, such Company Employee shall provide such information immediately, but in no case later than twenty-four (24) hours from the Date of First Receipt by the Company Employee, to Janssen by using the Janssen Online Complaint Form available at Janssensafety.com. For the avoidance of doubt, all information regarding Incomplete Cases should also be provided immediately, but in no case later than twenty-four (24) hours from the date the Company Employee receives such information. + +3 Training + +4.1 Company shall ensure that all Company Employees are trained in the reporting of AEs, Special Situations, AEPQC or UEs, prior to the start of performing services under the Agreement and at least annually thereafter if such services remain in effect, to ensure + + + + + +compliance with this Schedule and the Applicable Law. This includes, but is not limited to, monitoring applicable AE, Special Situation, AEPQC and UE training, and maintaining documentation of such training. Such training shall be conducted in the manner set forth in the Agreement using materials to be provided by Janssen. Janssen may require Company Employees to complete additional training provided by Janssen when there is a change in the governing contracts and/or processes or changes in Company's personnel. + +5 [Intentionally Omitted.] + +5 Retention Policy + +5.1 Company shall maintain and archive records of all source documentation generated by the activity (records, questionnaires, reports), personnel training records and other relevant information relating to its obligations under this Schedule for a period consistent with Section 7.1 of the Agreement (including Exhibit C thereto) and Applicable Law. Company must have appropriate storage capabilities (e.g., preventing accidental damage of physical records and appropriate back up of electronic storage systems) if storing original AE, Special Situations, AEPQC and UE documentation. Notwithstanding the above, before Company destroys any safety records it will notify Janssen of its intention to do so, affording Janssen the opportunity to retain such records if it so wishes. + +6 Audit + +6.1 Without prejudice to Section 7.5 of the Agreement, Janssen or its designee shall have the right to audit Company to verify Company's compliance with this Schedule and the Applicable Law, provided that Janssen provides Company with at least [***] ([***]) calendar days prior written notice. The Parties shall agree upon the scope of the audit with a written audit plan to be submitted by Janssen [***] ([***]) calendar days prior to the audit. Company will allow such access to its facilities, systems, personnel and records, in whatever form and in any location (including locations owned or operated by a third party) as may reasonably be necessary to enable Janssen or its designee to evaluate and ensure compliance with this Schedule and the Applicable Law. Janssen shall communicate audit findings in a written audit report in a timely manner. The Parties undertake to cooperate with each other to diligently investigate and resolve any such audit findings. + +7 Data Privacy + + + + + +7.1 In the performance of the above safety activities, both Parties will comply with all Applicable Laws in respect of data privacy in order to protect Personal Data. + +7.2 Each Party shall collect, use and disclose any Personal Data obtained in the course of performing the safety activities under this Schedule solely for the purposes of complying with the regulatory obligations as described in this Schedule, or as otherwise required by Applicable Law or by a court order. Both Parties will use electronic, physical and any other safeguards appropriate to the nature of the information to prevent any use or disclosure of Personal Data other than as provided for above. Both Parties will also take reasonable precautions to protect the Personal Data from accidental, unauthorised, or unlawful alteration or destruction. + +7.3 Each Party shall notify the other Party promptly of any accidental, unauthorised, unlawful destruction, loss, alteration, or disclosure of, or access to the Personal Data, and take immediate steps to rectify any such security breach. + +8 Follow Up + +8.1 Janssen will be responsible to diligently follow up on safety information. + +9 Miscellaneous + +9.1 Notwithstanding the above, in the event any Company Employee is informed of AE, Special Situations, AEPQC or UE related to the use of any other products of Janssen or its Affiliates that such Company Employee is aware of, such Company Employee shall report these to Janssen (in the same manner as any such report relating to the Products) within twenty-four (24) hours of the Date of First Receipt of such information by such Company Employee. + + + + + +CONTACT DETAILS + +For Janssen Name: Company: Telephone: Fax: Email: + +For Company Name: Company: Telephone: Fax: Email: + + + + + +EXHIBIT A + +Brand Plan + +[***] + + + + + +EXHIBIT B + +Detailing Requirements + +[***] + + + + + +EXHIBIT C + +Records and Information Management ("RIM") Requirements + +1. Maintenance. Company shall maintain and manage all paper and electronic records, files, documents, work papers and other information in any form provided by Janssen or generated pursuant to this Agreement (the "Files and Work Papers"): (a) in accordance with Janssen's records management policies (which may be changed by JBI from time to time and communicated to Company), including as set forth in "RIM Requirements" below, (b) separately from files generated, managed or maintained by Company under agreements with other customers, (c) as required by applicable statutes and regulations, and (d) as set out in any preservation request issued to Company by Janssen. + +2. Preservation. Company shall comply promptly and fully with any request from Janssen, for any reason, to preserve Files and Work Papers or to promptly deliver such materials to Janssen. Steps to comply include, when requested by Janssen, periodic meetings to identify and implement documented procedures to preserve or deliver such data. Files and Work Papers created or modified by Company in electronic format must be delivered to Janssen in the same electronic format or as otherwise directed by Janssen. + +3. Third Party Requests. Upon receipt from Third Parties of any request, demand, notice, subpoena, order, or other legal information- request for any Files and Work Papers, Company shall take all reasonable steps to protect Janssen's legal rights in any response to such request and, to the extent that Company legally may do so, shall immediately notify Janssen, shall provide Janssen with a copy of such request, and shall meet and cooperate with Janssen in the implementation of procedures to comply with the request. + +4. RIM Requirements. This section specifies RIM requirements applicable to Files and Work Papers that Company personnel create, maintain, manage or manipulate on behalf of Janssen. Company is responsible for understanding and complying with Janssen's RIM requirements. + +a. Records and Information Management requirements shall be applied consistently and regularly. + +b. Company's Files and Work Papers: + +i) shall be created, stored and managed throughout their lifecycle using proper protection; + +ii) shall be protected and access controlled according to their value as described in the Johnson & Johnson Supplier Information Security Requirements; + +iii) shall be retained in accordance with the Johnson & Johnson + + + + + +Enterprise Retention Schedule, which defines retention requirements for business, legal, regulatory and privacy purposes; and + +iv) relevant to litigation or an investigation and subject to a legal hold shall be retained and preserved, regardless of the retention requirement set forth in the Johnson & Johnson Enterprise Retention Schedule. + +c. Company shall ensure that the Files and Work Papers are retained upon the departure of personnel employed by Company. + +d. Janssen or the applicable Janssen Affiliate shall provide written approval prior to the disposition (disposal or deletion) of any Files and Work Papers. + +e. Company personnel with access to Janssen's network shall annually complete Records and Information Management training as specified by Janssen. + + + + + +EXHIBIT D + +Health Care Compliance Provisions + +1. "HCP" is defined as (i) any person who is licensed by a state to provide health care services directly or indirectly to patients, such as a physician, a nurse, a technician, a psychologist, or a lab specialist and/or (ii) any person or organization to whom a Party markets its products and services that is in a position to influence the selection of the products furnished or purchased, including but not limited to hospitals and health systems, administrators, procurement personnel, group purchasing organizations, pharmacy benefit managers, and business people. + +2. Company shall, with respect to each HCP engaged under this Agreement: + +a. Ensure that the HCP's services are provided in compliance with all applicable laws and regulations, including but not limited to laws and regulations pertaining to the promotion of products regulated by the United States Food and Drug Administration (FDA); laws, regulations and guidance pertaining to federal and state anti-kickback and submission of false claims to governmental or private health care payors (collectively, "Health Care Compliance" or "HCC"); state and federal laws and regulations relating to the protection of individual and patient privacy; and any other laws and regulations applicable to such services. + +b. Ensure that HCP's services are provided in compliance with Janssen's written policies and procedures of which Company is provided notice, including, but not limited to, policies and procedures related to FDA and Health Care Compliance and the protection of individual and patient privacy (collectively, "Janssen Policies"). The requirements of this Agreement and any additional policies attached to this Agreement shall constitute Janssen Policies of which Janssen provides notice to Company. + +c. Comply with professional and/or employment rules (such as conflicts of interest or ethics policies) established by Company or a professional organization or institution with which HCP is affiliated when the provision of services by an HCP is subject to such rules, including, as applicable, obtaining any required approval(s) prior to providing services and making any required reports. + +3. Company shall provide notice to each HCP of the following: + +The Physician Payments Transparency Requirements of the Patient Protection and Affordable Care Act of 2010 (codified at 42 U.S.C. 1320a-7h) and implementing regulations, require certain pharmaceutical, medical device, and other companies to annually report to the Centers for Medicare and Medicaid Services (CMS) certain information about payments and transfers of value provided directly or indirectly to U.S. physicians and teaching hospitals, which CMS will make publicly available. This includes any payments or transfers of value that Janssen provides indirectly through Company to U.S. physicians and teaching hospitals. As required by law, Janssen will report to CMS information about payments and transfers of value that Company + + + + + +provides to U.S. physicians and teaching hospitals pursuant to this Agreement. This includes any portion of any payment or transfer of value that Janssen furnishes to Company which Company then provides directly or indirectly to U.S. physicians or teaching hospitals, including its employees, agents, or contractors. Information that Janssen must report includes the identity and business address of each relevant U.S. physician or teaching hospital, the value and purpose of any payments or transfers of value that are furnished, and any other information as may be required by law. To enable Janssen to comply with its legal obligations, Company shall track, maintain, and provide Janssen information and data related to any payments or transfers of value that Company provides to U.S. physicians and teaching hospitals under this Agreement. Company shall provide such information and data in the form and manner that Janssen requests in a timely manner. Janssen may also report information about compensation, payments or transfers of value that Company provides to U.S. physicians and teaching hospitals as otherwise required by law and Janssen reserves the right to post on a website accessible to the public such information, whether or not required by law. + +4. In accordance with Janssen's request, Company shall, within thirty (30) days thereafter, provide or upload to Janssen's health care compliance data system (the "Totality Third Party Company Portal") or any similar system, all compliance documents and data templates related to services. Data requirements regarding Totality Third Party Company Portal can be found at https://totalitygateway.jnj.com. Compliance documents and data templates include the following: + +a. Copies of written agreements including compensation terms, with each HCP providing services. + +b. Documentation indicating that each HCP providing services is not excluded or debarred and, for any health care practitioner, duly licensed under state law, as set forth above. Company shall obtain such documentation prior to engaging such HCP to provide services. + +c. Documentation of services provided by such HCP (e.g., a written report, comments collected at a meeting, presentation materials, etc.). + +d. HCP data templates capturing details on HCP value exchange. Value exchanges shall include, without limitation, any gifts, meals, compensation, travel reimbursement and patient-related materials provided to HCPs in connection with this Agreement. + +e. Documentation that shows that Company provided notice to each HCP that information provided pursuant to this Agreement may be made publicly available at any time at the sole discretion of Janssen. + +f. Electronic report of overall expenses paid to or on behalf of each HCP and electronic copies of all original receipts documenting such expenses; and + + + + + +g. Written evidence of any required ethics or other authorizations allowing HCPs employed by federal, state or local government agencies, including but not limited to pharmacy and therapeutics committees, to provide services under this Agreement. + +5. In the event that Janssen is charged any fee or penalty because Company failed to comply with the requirements set forth in this Exhibit, Company agrees to reimburse Janssen for such fees or penalties. Janssen reserves the right to reduce or not pay any invoice in the event that Company fails to comply with the requirements set forth in this Exhibit. + +6. Company shall produce and send to Janssen electronic reports each month in which payments were made or gifts or meals were provided to HCPs by Company on behalf of Janssen, listing the following: + +a. value of any gifts, meals, compensation paid, and/or entertainment provided to HCPs, whether their services were obtained through a written agreement or not; + +b. nature, purpose and date of payments or other items of value provided; and + +c. names, addresses, and federal Tax I.D. number of HCPs who were paid remuneration for services relating to Janssen. + +7. Company shall report any violations of the compliance obligations set forth in this Agreement to Janssen at the name and address listed in Section 14.5 (Notices) or through the Vendor & Distributor Hotline at 1-800-556-2496. + +8. Company, at its expense, shall ensure that all personnel and subcontractors involved in providing services attend and participate in training and educational programs reasonably scheduled by Janssen. Company, at its expense, agrees to train and periodically provide refresher training to all its new and current personnel and subcontracted personnel providing services regarding the compliance obligations set forth in this Agreement, including any Janssen Policies applicable to services. Company shall, upon request, provide Janssen with a record of the training provided and the dates training was attended by any Company personnel and subcontractors. + + + + + +EXHIBIT E + +Insurance Requirements + +[***] \ No newline at end of file diff --git a/full_contract_txt/IMPCOTECHNOLOGIESINC_04_15_2003-EX-10.65-JOINT VENTURE AGREEMENT.txt b/full_contract_txt/IMPCOTECHNOLOGIESINC_04_15_2003-EX-10.65-JOINT VENTURE AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..aab921bf17a8d979d61369ba6fca4ca2d27aad7b --- /dev/null +++ b/full_contract_txt/IMPCOTECHNOLOGIESINC_04_15_2003-EX-10.65-JOINT VENTURE AGREEMENT.txt @@ -0,0 +1,257 @@ +Exhibit 10.65 JOINT VENTURE AGREEMENT MINDA IMPCO TECHNOLOGIES LIMITED This Joint Venture Agreement (Agreement) is made and executed on this the 18th day of May, 2001 BETWEEN IMPCO Technologies Inc., a company incorporated under the laws of the State of Delaware U.S.A. and having its principal office of business at 16804 Gridley Place, Cerritos, California 90703, U.S.A. (hereinafter referred to as 'IMPCO', which terms shall unless repugnant to the subject or context mean and include its successors and permitted assigns), through Ms. Pearl Kamdar a duly authorized person and Director of Asia-Pacific Operations, AND MINDA INDUSTRIES LIMITED, a company incorporated under the Companies Act, 1956 having its registered office at 36-A, Rajasthan Udyog Nagar, Delhi-110 033, India, (hereinafter referred to as 'MIL', which terms shall unless repugnant to the subject or context mean and include its successors and permitted assigns), through Mr. Nirmal K. Minda its Managing Director, AND Mr. Nirmal K. MINDA, s/o. Mr. S.L. Minda, r/o. A-15, Ashok Vihar, Phase-I, New Delhi-110 052 on in his individual capacity and on behalf of his relatives and associates listed in Schedule-I (hereinafter referred to as 'MINDA', which terms shall unless repugnant to the subject or context mean and include his heirs, executors, administrators or successors and permitted assigns). WHEREAS IMPCO is engaged in the business of development, manufacture and sale of alternate fuel management systems and components for operating motor vehicles, forklifts, industrial engines and other engines of various horsepower; and WHEREAS MIL is engaged in the manufacturing and sale of auto electrical parts such as switches, lamps and horns; and WHEREAS IMPCO and MIL/MINDA have entered into a joint venture to promote a company under the name of MINDA IMPCO LIMITED for manufacturing and selling alternate fuel management systems and components, including but not limited to CNG, LPG and Propane Kits for operating motor vehicles, forklifts, industrial engines and other engines of various horsepower in India ; and WHEREAS, MIL represents that it has the technical, marketing skills and financial wherewithal to install, sell and service the alternate fuel systems and components manufactured by MINDA IMPCO Limited and enjoys a respected business relationship with 1 + + + + + +cognizant governmental and industrial authorities, all of which may be advantageously employed in the safe and professional marketing of MINDA IMPCO Limited products, as specified above, in India with the approval of and in compliance with such governmental authorities; and WHEREAS the Parties hereto have agreed, subject to obtaining all necessary approvals, permissions, consents, validations, confirmations, licenses and any other authorizations required to incorporate a company in India ("the Joint Venture Company" or the "JVC") with the main object of inter alia marketing and selling of alternate fuel management systems, including but not limited to CNG, LPG and Propane Kits and its components for automobiles and other associated and incidental services to customers; and WHEREAS IMPCO will contribute to the JVC in cash and the JVC will issue equity shares to IMPCO; and WHEREAS MIL/MINDA will contribute to the JVC in cash and subject to IMPCO's consent in kind and the JVC will issue equity shares to MIL/MINDA; and WHEREAS the Parties hereto are ready, willing and able to assist each other and cooperate in the manner set out hereinafter, to ensure the establishment and success of the JVC. The Parties shall cooperate with each other in the highest degree in the performance of all such acts and the passing of all resolutions as are required for the purpose of achieving the terms, purposes and intent of this Agreement and the Parties shall in particular exercise their respective voting and other rights and power of control over the JVC so as to give effect to the rights conferred upon the respective Parties by the terms of this Agreement. NOW THEREFORE in consideration of the mutual promises and covenants hereby contained, this Agreement witnesses and the Parties hereto have agreed as follows: 2 + + + + + + ARTICLE - 1 DEFINITIONS 1.1 In this Agreement, unless the context otherwise requires, the following shall have the meaning as set forth against them below: "Act" shall mean the Companies Act, 1956, and includes, where the context so requires, any re-enactment or statutory modifications thereof for the time being in force. "Affiliate(s)" shall mean with respect to any Party to this Agreement any entity which controls, is controlled by, or is under common control with such Party. An entity controls another entity when it owns or controls, directly or indirectly, fifty-one percent (51%) or more of the equity share capital issued and outstanding of the other entity or when it controls, on its own or jointly, the majority of the composition of the Board of Directors of such other entity. "Agreement" or "this Agreement" shall mean this joint venture Agreement, alongwith all attachments annexed hereto, and shall include any subsequent modifications, alterations and additions and deletions therefrom made in writing after the date of execution of this Agreement. "Approval(s)" shall mean all government, statutory and/or regulatory permissions, consents, validations, confirmations, licenses and any other authorizations required to be obtained in order to implement the provisions of this Agreement including, but not limited to, all necessary approvals of the Government of India and the Reserve Bank of India. "Articles" or "Articles of Association" shall mean the Articles of Association of the MINDA IMPCO Technologies Limited. "Alternate Director" shall mean an Alternate Director appointed in terms of Article 3.7 herein to act for a Director during his absence for a period of not less than three (3) months from the State in which the registered office of the JVC is situated and such Alternate Director shall not hold office as such for a period longer than that permissible to the Director in whose place the Alternate Director has been appointed and shall vacate office when the Director returns to such State. "Financial Institutions" shall mean Indian financial institutions, including but not limited to, ICICI, Industrial Development Bank of India, Industrial Finance Corporation of India and shall also include foreign financial institutions. "Joint Venture Company" or "the JVC" shall mean the Indian company to be established and incorporated under the laws of India pursuant to the terms of this Agreement and, subject to the approval of the Registrar of Companies, Delhi and Haryana, with the name "MINDA IMPCO Technologies Limited" or such other name as may be agreed by the Parties, with the main object of, inter alia, marketing and selling of alternate fuel management systems, including but not limited to, CNG, 3 + + + + + +LPG and Propane Kits and its components for automobiles and other associated and incidental services to customers. "Memorandum" or "Memorandum of Association" shall mean the Memorandum of Association of the MINDA IMPCO Technologies Limited. "Products" shall mean alternate fuel management systems, including but not limited to, CNG Kits, Propane Kits and its components for automobiles to be marketed and sold by the JVC, adopting the existing, as well as future development(s) in the technical know-how of IMPCO, as per terms of the Technical Assistance Agreement and any other products as may be mutually agreed from time to time by the Parties to this Agreement. "Effective Date" shall mean the date on which the Parties sign and execute this Agreement . "Board" or "Board of Directors" shall mean the Board of Directors MINDA IMPCO Technologies Limited. "Parties" shall mean IMPCO, MIL and MINDA collectively, and the term "Party" shall individually refer to IMPCO, MIL and/or MINDA, as the case may be. "RBI" shall mean the Reserve Bank of India. "Technical Know-How" shall mean available secret, specialized and proprietary know-how, technical information, drawings, data, charts, graphs, procedure books, operation manuals and data, technical processes and other technical literature including but not limited to information of the type listed on Appendix A to the TAA, tangible or intangible, necessary for manufacture and testing of the Products which (i) is possessed and controlled by IMPCO at the date of this Agreement and (ii) IMPCO has the right to grant licenses to MINDA-IMPCO LTD. during the term of this Agreement. "Territory" shall mean the geographical area under the jurisdiction of the Government of the Republic of India. 1.2 Interpretation: In this Agreement, unless the contrary intention appears, a reference to: i) an "amendment" includes a supplement, novation, replacement or re-enactment and "amended" is to be construed accordingly; ii) "assets" includes properties (both present and future and whether tangible or intangible and including Intellectual Property and Intellectual Property Rights), revenues, investments, cash flows, rights, benefits, interests and titles of every description; iii) an "authorisation" includes an authorisation, consent, clearance, approval, resolution, license, permit, exemption, filing, registration or notarisation; 4 + + + + + + iv) "control" means: (a) the ability to appoint more than one half of the members of the board of directors or board of management (howsoever described) of an entity or to control more than 50 per cent of the voting rights of the members of such board; or (b) the power to direct or cause the direction of the management and policies of an entity, whether through the ownership of voting capital, by contract, laws and regulations or otherwise; v) a "law" includes any constitution, statute, law, rule, ordinance, judgment, order, decree, authorisation, or any published directive, guideline, requirement or governmental restriction having the force of law, or any determination by, or interpretation of any of the foregoing by any judicial authority, whether in effect as of the date of this Agreement or thereafter and each as amended or re-enacted from time to time; vi) a "month" is a reference to a period starting on one day in a calendar month and ending on the date immediately before the numerically corresponding day in the next calendar month, except that if there is no numerically corresponding day in the month in which that period ends, that period shall end on the last day in that calendar month; vii) a "person" includes: + + + +a) any individual, corporation, partnership, joint venture, association of persons, trust, unincorporated organisation, government (central, state or otherwise), sovereign state (or any agency, department, authority or political subdivision thereof), international organisation, agency, authority or other entity (in each case whether or not having separate legal personality) and includes any of its successors, transferees and assigns and, in particular: b) in the case of an individual, any legal representative, administrator, executor and heir of that individual; and c) in the case of a trust, any trustee of that trust; viii) a "regulation" includes any applicable regulation, rule, official directive, order, decree, request, guideline, requirement or restriction (whether or not having the force of law but if not, being of a kind with which it is customary for companies within the relevant industry to comply) of any governmental, inter-governmental or , agency, department or regulatory, self-regulatory or other authority or organisation, each as amended or re-enacted from time to time; ix) a clause, a schedule or an annex is a reference to a clause of or a schedule or annex to this Agreement; x) a schedule, an appendix or an annex to or of a document forms an integral part of that document; 5 + + + + + + xi) the singular includes a reference to the plural (and vice versa); xii) the masculine includes a reference to the feminine and neuter; xiii) a time of day is a reference to Indian Standard Time.; xiv) the term "including", "include" or "includes" shall be deemed to be followed by the phrase "but not limited to"; xv) the index to and the headings in this Agreement are for convenience only and are not to be relied upon in construing this Agreement. ARTICLE - 2 INCORPORATION OF JVC AND ITS SHARE CAPITAL 2.1 The Parties hereby agree to incorporate the JVC in accordance with the laws of India for the purpose of marketing and selling the Products. Subject to the approval of the Registrar of Companies, Delhi and Haryana, the name of the company will be 'MINDA IMPCO Technologies Limited' or such other name as may be agreed by the Parties. MINDA will take all necessary steps for the incorporation of MINDA-IMPCO Technologies Limited. 2.2 It is further agreed between the Parties that in order to fulfill the requirement of a minimum of seven (7) shareholders under the Act, the Memorandum and Articles of Association (hereinafter referred to as "M&A") of the JVC shall be subscribed to by seven (7) subscribers. 2.3 All reasonable costs, fees and other expenses necessary for the incorporation of the JVC, such as registration fee etc., excluding any legal fees, shall be paid by MIL and will be reimbursed by the JVC upon ratification by a resolution of the Board of Directors of the JVC. 2.4 The principal activities of the JVC shall be carried out in accordance with its object clause incorporated in the Memorandum and Articles of Association (M&A). 2.5 The initial authorized capital of the JVC shall be Rs. 5,00,000/- (Rs. Five lacs only) divided into 50,000 equity shares of the nominal value of Rs. 10 each. The initial seven (7) subscribers shall collectively subscribe to 50,000 equity shares of face value of Rs. 10 each. 2.6 Subject to the approval of the Government of India (`GOI'), Reserve Bank of India (`RBI') and other Government agencies, if any, the shares in the JVC shall be issued to the Parties in the following percentage of the total paid-up capital of the JVC. MIL, MINDA and its associates - 40% - In cash and /or in Kind. IMPCO - 60% - In cash 6 + + + + + + In consideration thereof, the JVC will issue equity shares either at par or at premium as mutually agreed by the Parties. 2.7 Subject to regulatory approvals, if any, and the provisions of the Act, the issue, transfer and/or transmission of shares or any other dealing with the shares of the JVC, shall be in the manner prescribed in the M&A. 2.8 (a) If in future the Parties agree that it is necessary for the JVC to raise finances by loans and/or equity or otherwise, the Board of the JVC shall decide the mode of contribution ( cash or kind ) and the extent of debt and equity. All capital contributions will be made by the Parties in proportion to their shareholding as mentioned in Article 2.6. In the event a Party fails to make its respective capital contribution to such extent, the other Party ('Acquiring Party') shall have the right to make additional capital contributions to such extent . The Party who failed to make contribution of additional capital shall provide full cooperation and assistance to the Acquiring Party in obtaining government and regulatory approvals, if any, and in executing necessary documents, including consents and no- objection certificates as may be required. In case finances are to be raised by way of loans, the Parties agree to take necessary steps to arrange for the same, including execution of corporate guarantees in favor of Financial Institutions, as and when required. + + + +(b) In future, subject to the terms of this Agreement and the M&A, if the share capital of the JVC increases as a result of issue of shares to a third party or to the public, the Parties hereto shall acquire shares of the JVC in the same proportion as mentioned in Article 2.6 or as otherwise mutually agreed in writing by them. It is understood that in case of a public issue of equity shares of the JVC, the percentage shareholding of MIL/MINDA and IMPCO will be reduced to the extent of additional shares allotted to the public. Provided, however, that in such a case the Parties hereto shall endeavor to avoid any substantial dilution of their collective control over the JVC. (c) Issue of shares in the JVC to IMPCO shall be after taking the requisite approval of RBI and/or other regulatory authorities if any. ARTICLE - 3 MEMORANDUM & ARTICLES OF ASSOCIATION OF THE JVC AND GOVERNANCE OF JVC 3.1 The M&A shall be in accordance with the law for the time being in force in India. Those provisions of this Agreement which are in conformity with the Act, shall be reflected in the M&A. 3.2 The Parties agree that the M&A shall, inter alia, to the extent possible and as permitted by law, incorporate and reflect the understanding contained in this Agreement and the Parties expressly agree that whether or not the M&A fully incorporates the stipulations hereof, or any of them, the Parties' rights and 7 + + + + + + obligations inter se shall be governed by this Agreement which shall also prevail in the event of any ambiguity or inconsistency between the two documents. 3.3 Unless otherwise agreed, between the Parties, the Board of Directors of the JVC shall consist of not less than five (5) and not more than twelve (12) Directors, including the Managing Director (MD). Out of the minimum number of five (5) Directors, the Parties shall be represented in the ratio of 3 : 2, i.e., three (3) Directors shall be nominated by IMPCO and two (2) Directors shall be nominated by MIL and MINDA The Directors nominated by MINDA and MIL will be referred as MINDA Directors and Directors nominated by IMPCO will be referred as IMPCO Directors. Subject to the terms of this Agreement, the representation of MIL/MINDA and IMPCO on the Board of the JVC shall always be maintained in the above mentioned ratio and IMPCO will always have a majority on the board. It is further agreed that the first four (4 ) Directors of the JVC shall be nominated by IMPCO . 3.4 a) IMPCO shall designate one (1) of its Directors as the Managing Director ('MD') of the JVC in accordance with the provisions of the Act. The MD shall have substantial powers of management of the JVC, subject to the supervision and control of the Board. b) The other Directors will hold appropriate positions in the JVC, as may be decided by the Board. 3.5 Subject to the supervision and control of the Board, the MD shall be in-charge of all day to day management of the JVC, including but not limited to all aspects of marketing, operations, sales promotion,, after sales services, personnel, employment or termination as well as remuneration of key executives, personnel, information services, customer services, marketing and sales, accounting, finance and credit collections. The MD and such other Director(s) shall conduct the business and the management operations of the JVC and the MD may, in writing, authorize officers in this behalf. 3.6 The remuneration of the MD and/or other whole time Director(s) shall be fixed and may be varied from time to time by the Board within the limits prescribed under the Act/Guidelines issued by the Government of India and subject to the approval of the shareholders and of the appropriate authorities. 3.7 a) In the event an IMPCO Director (hereinafter called "Original IMPCO Director") is away for a continuous period of not less than three (3) months from the State in which the registered office of the JVC is located, the IMPCO Director shall, during his absence, nominate a person to act as an Alternate Director on behalf of the Original Director. The Alternate Director shall not hold office for a period longer than that permissible to the Original IMPCO Director in whose place he has been appointed. 8 + + + + + + + + b) If the term of office of the Original IMPCO Director is determined before he so returns to the State as aforesaid, any provision for the automatic re- appointment of retiring Director, in default of another appointment, shall apply to the Original IMPCO Director and not to the Alternate Director. 3.8 The Parties to this Agreement shall at all times co-operate, act and vote at all meetings in support of the election of the nominee Directors to the Board. ARTICLE - 4 GENERAL MEETINGS 4.1 The JVC shall hold the General Meeting in the manner prescribed in the Act and the Articles. The remuneration payable to the, Managing or whole-time Directors and Managers shall be determined, in accordance with and subject to the provisions of the Act. 4.2 The quorum for a General Meeting shall be five (5) members present in person or through a duly authorised representative in case of a member which is a company, provided that there shall be no quorum unless one (1) representative of IMPCO and one (1) representative of MIL/MINDA is present. If within half an hour from the time appointed for holding a General Meeting a quorum as specified above is not present, the General Meeting shall stand adjourned by seven (7) days on the same time and place or to such other day and such other time as the Board may determine and if at such adjourned General Meeting a quorum is not present within half an hour from the time appointed for holding the General Meeting, the members present shall constitute a valid quorum . ARTICLE - 5 BOARD MEETING 5.1 It is hereby agreed and understood between the parties that the Directors present at the Board meeting will elect the Chairman of the Board ("the Chairman"), who shall be a IMPCO Director. The Chairman shall have a second vote or a casting vote as per the provisions of the Act. 5.2 The Board shall decide all important matters pertaining to the management and administration of the JVC subject to the provisions of this Agreement, the M&A and the Act. 5.3 The Board meeting shall be convened and conducted in the manner laid down in the M&A. 5.4 The quorum at and throughout meetings of the Board, including adjourned meetings, shall be one third of its total strength or two Directors, whichever is higher, of which at least one will be a MIL/MINDA Director and one will be an IMPCO Director. Provided that if an MIL/MINDA or an IMPCO Director fails to be present for two consecutive meetings of the Board as a result of which a meeting of the Board 9 + + + + + + cannot be held for want of quorum, then either the three IMPCO or the two MIL/MINDA Directors shall constitute the requisite quorum. 5.5 All management decisions of the JVC shall require the simple majority vote of the Board either at a meeting of the Board or by resolution passed by circulation subject to the provisions of the Article 5.6 Meetings of the Board shall take place in Delhi or such other place as may be decided by the Board. For calling a Board meeting, a notice of at least fourteen [14 ] days in advance in writing shall be given to each of the Directors, including those outside India. However, a meeting of Directors may be called by giving a shorter notice provided it is mutually agreed by the Directors. Subject to the provisions of the Act, a resolution circulated and signed by all Directors shall be effective, as a resolution duly passed at a meeting of Directors. Sitting fees, travel and stay expenses (incurred by the Directors) for attending the Board meeting, if claimed by the Director(s) shall be met by the JVC as per Articles of Association of the JVC. 5.6 IMPCO shall at all times be entitled to invite any of its Affiliates, managerial, technical or financial personnel to attend the Board meetings of the JVC. ARTICLE - 6 TRANSFER OF SHARES 6.1 (a) Each party hereto agrees not to transfer, sell, pledge, mortgage or make other disposition (whether by way of fixed or floating charge) or encumbrance on its shares in the JVC except as otherwise provided in this Agreement and/or except by consent of the Parties to this Agreement and in the manner laid out in the M&A. + + (b) It is agreed that MIL/MINDA may, inter se, transfer their shares in the JVC amongst their relatives and associates as mentioned in Schedule- I annexed hereto. . (c) No party hereto may transfer its shares in the JVC for a period of five (5) years from the date of allotment except as provided above. 6.2 After the expiry of the five (5) year period, if a Party intends to sell any or all of its shares of the JVC (the "Transferor"), it shall first make an offer by a written notice to the other Parties (the "Transferee") to purchase such shares and the other Parties shall have the right to purchase the offered shares in proportion of their existing shareholding. . If any of the Transferees intends to purchase all or any portion of the said shares so offered, such Party shall dispatch a written notice of acceptance to the transferor describing the number of the shares it intends to purchase within three (3) weeks after the date of receipt of the offer. The sale price of the shares shall be determined in terms of Article 6.3(c) hereof. 10 + + + + + + 6.3 a) Pursuant to Article 6.2, if a Transferee does not, in whole or in part, accept to purchase the shares offered in terms of Article 6.2 by the Transferor, the other Transferee may purchase all the shares offered by the Transferor at a price determined as per Article 6.3(c) hereof. If no Transferee accepts to purchase the shares offered by the Transferor, in whole or in part, the Transferor may sell such shares to a third party on terms and conditions no more favourable than those offered to the Transferees, including the price of the shares. + + b) Any transfer of the shares of the JVC to a third party shall be subject to the full unconditional assumption in writing by such third party of all obligations of the Transferor as provided in Article 6.4. + + c) The transfer of shares, as stated hereinabove, shall be subject to all the regulatory approvals that may be required in this behalf. Such shares shall be transferred at a price which shall be the price indicated in the offer notice to the extent the same is in accordance with, the regulations of the Securities and Exchange Board of India or the Reserve Bank of India, if applicable. 6.4 Transfer of shares to a Third Party In case of transfer of shares by the Transferor to any third party in pursuance of the above Articles, the following conditions will apply: i) The third party shall enter into a deed of adherence agreeing to be bound by the provisions of this Agreement; and ii) The third party shall not have a conflict of interest and should not be strategically incompatible to the other Parties to the Agreement. Notwithstanding the restriction on transfer of shares stipulated hereinabove, IMPCO and MIL/MINDA may transfer any of its holdings in the JVC to an Affiliate, without requiring the consent of the other Parties, provided that, such an Affiliate shall also be bound by the provisions of this Agreement and shall execute a deed of adherence as mentioned above. It is expressly agreed by MINDA and MIL that, in order to give effect to the provisions of Articles 6.4, they shall provide all necessary co- operation to IMPCO, including but not limited to assistance for obtaining the necessary RBI/FIPB and other regulatory or government approvals. Further, MINDA and MIL agrees to sign/execute/file any and all documents with the Government of India or its agencies, departments or any other third party to give effect to any transfer of shares in accordance with the provisions of this Agreement. 11 + + + + + + 6.5 Pledge of shares The Parties agree that the shares held by them shall not be pledged to a third party or otherwise encumbered during the term of this Agreement. In the event the pledge of shares of any Party is necessitated for the purposes of the JVC, such pledge will be made only with the prior written consent and on terms acceptable to the other Parties. ARTICLE - 7 BUSINESS ACTIVITIES 7.1 General Purpose: IMPCO and MIL/MINDA have entered into this Agreement for the purpose of establishing the JVC with the main objects of, inter alia, marketing and selling of the Products and providing other associated and incidental services to customers, and undertake other activities as mentioned in its M&A. 7.2 The JVC will be permitted to use the following words in Products which are manufactured by MINDA IMPCO Limited. "Manufactured by MINDA IMPCO Limited, an Indo American Joint Venture". Subject to the provisions of this Agreement, all products, will carry the trademark of MINDA IMPCO. ARTICLE - 8 ROLE OF CONTRACTING PARTIES 8.1 Each of the Parties to this Agreement shall give their assistance to the JVC according to their respective roles to make the JVC a successful venture. 8.2 MIL/MINDA at its sole discretion will assist without any legal obligation the JVC in the following: - Business contacts in India and the neighboring countries; - Access to Indian Know-how; - Procurement of Indian equipment; - Financing from Indian sources; - Personnel recruitment; and - Administration and fiscal. - Support for additional business from Indian/Foreign customers; and - Setting up of the business of the JVC. 8.3 a) IMPCO, at its sole discretion and without any legal obligation may assist the JVC with the following: i) Sales and service training ii) After sales services . + + b) IMPCO may assist the JVC in getting quotations from itself and from its Affiliates for equipment and components. IMPCO and MINDA agree to assist the JVC in adopting the most economical methods of procurement. 12 + + + + + + c) IMPCO may make available to the JVC the services of its international marketing and distribution network and of its Affiliates. + + d) IMPCO will provide, on the basis of a program to be mutually agreed with the Parties as to people and time, training to the JVC personnel in various fields like manufacturing, design, quality, testing, etc. IMPCO will not charge any cost from the JVC. However, all the travelling, boarding and lodging expenses of the personnel of MINDA IMPCO Technologies Limited will be borne by the JVC. ARTICLE - 9 EXPORTS 9.1 IMPCO understands and appreciates that the cost of production of products in India based on IMPCO technology could be attractive and competitive. IMPCO is confident that with their support and backing, the potential for export of the Products is likely to increase further. IMPCO may arrange for considerable export from India, subject to price competitiveness and quality. IMPCO may undertake to buy back substantial Products, subject to price competitiveness and quality. IMPCO also agrees that in accordance with their policy of global sourcing they might consider sourcing other products/components from the JVC. 9.2 Subject to the agreement of the Parties, the JVC may export the Products. Such export shall be through IMPCO. The Parties agree that any direct export of the Products would only be with the prior written consent of IMPCO. IMPCO agrees that they may consider sourcing the Products from the JVC for their Asia-Pacific operations. 9.3 Compliance with Laws. The Parties agree to comply with the Export Control Regulations of the United States Department of Commerce and other United States Government Regulations relating to the export and re-export of technical data and equipment and products produced therefrom. Each Party agrees that it will not take any action in violation of, and will not cause the Company to take any action in violation of: (i) applicable laws, rules and regulations of United States of America related to the subject matter of this Agreement, or + + (ii) the U.S. Foreign Corrupt Practices Act, 15 U.S.C. Sections 78dd-1 et seq. Which, in general, prohibits any person from making any payment of money or anything of value, directly or indirectly, to any government official and which requires the keeping of financial records in connection with foreign activities, or (iii) the export control laws of any country, with respect to products, services and technology obtained from such country, to the extent that any of such laws shall be applicable, or 13 + + + + + + (iv) the laws of the United States prohibiting or restricting business dealings with Persons of or in Cuba, Iran, Iraq, Libya, Federal Republic of Yugoslavia (Serbia and Montenegro), Republic of Bosnia and Herzegovina, North Korea and UNITA (Angola) or persons owned or controlled by any of the foregoing (including any of the "specially designated nationals" specified under such laws. ARTICLE - 10 BUSINESS INFORMATION 10.1 Books of Accounts, Records and Reports: The JVC will make and keep all books of accounts, records and reports in accordance with (i) Generally Accepted Accounting Principles and (ii) as required under the Companies Act, 1956 and other applicable laws. 10.2 Financial Statements: Promptly after the end of each financial year (as defined in 9.6 below) and without any charge, the JVC will submit to IMPCO and MIL/MINDA the annual financial statement including Balance Sheets and Profit and Loss account, related Auditors Reports for such year. 10.3 Availability of Business Records: During reasonable business hours IMPCO and MIL/MINDA will have the right to inspect, and make copies of any and all of the JVC 's business records, including but not limited to financial records, books, accounts and reports. In exercising such right IMPCO and MIL/MINDA will be reasonable. 10.4 Plant Inspection: During reasonable business hours IMPCO and MIL/MINDA will have the right to visit, enter and inspect each plant and other establishment at which the JVC manufactures and/or processes the Products. In exercising such right, the Parties will be reasonable. 10.5 The financial year of the JVC shall be from 1st April to 31st March of each year. ARTICLE - 11 SUCCESSORS & ASSIGNS Successors & Assigns: All provisions of this Agreement shall inure to the benefit of and be binding upon the respective successors, representatives, heirs and permitted assigns of the Parties hereto. ARTICLE - 12 INDEMNIFICATION 12.1 Indemnification by IMPCO: IMPCO hereby indemnifies MIL/MINDA and the JVC and agree to defend, and hold each of them harmless from and against any and all liabilities, damages, losses, claims, costs and expenses (including attorneys fees) arising out of or resulting from any misrepresentation or breach of covenant by 14 + + + + + + IMPCO or the non- performance of any obligation to be performed on the part of IMPCO under this Agreement. 12.2 Indemnification by MIL/MINDA: MIL/MINDA hereby jointly and severally indemnifies IMPCO and the JVC agree to defend and hold each of them harmless from and against any and all liabilities damages, losses, claims, costs and expenses (including attorney fees) arising out of or resulting from any misrepresentation or breach of covenant by MIL/MINDA or non performance of any obligations to be performed on the part of MIL/MINDA under this Agreement. ARTICLE - 13 TRADE MARK 13.1 MINDA IMPCO Limited shall register the Trademarks "IMPCO" and "MINDA-IMPCO", or such other Trademark as may be mutually decided. 13.2 MINDA IMPCO Limited has agreed to allow the JVC, the right to use the two trade marks in respect of the products, the first being under the name of "IMPCO" and the second being in the name of "MINDA IMPCO". Unless otherwise agreed between the parties, the MINDA IMPCO trademark will be used on the products for sale within the Territory and the products exported would be sold with the trademark IMPCO. 13.3 LEGEND: The JVC shall have the option to carry the following legend in product advertisements, on labels or packaging of Products manufactured by MINDA IMPCO Limited under this Agreement - "Manufactured by MINDA-IMPCO Limited, an Indo-American Joint Venture" ARTICLE - 14 NON-COMPETITION AND EXCLUSIVE RIGHTS 14.1 IMPCO expressly agrees that during the existence of this Agreement, IMPCO shall not enter into any other Joint Venture Agreement or Marketing/Distribution Agreement, with any company or person(s) in the Territory with respect to the Products. 14.2 MINDA/MIL, since it will have access to the Technical Know-How which it would not have had otherwise, expressly agree that: + + + +(a) during the term of the Agreement, and thereafter for a period of five (5) years after the termination of the Agreement (such termination being termination by IMPCO due to default by MINDA/MIL), MIL/MINDA shall not, directly or indirectly, either alone or collectively or through any of its associates, affiliates, including subsidiaries or any entity owned or controlled by it enter into another joint venture agreement or marketing/distribution agreement with any company or persons in respect 15 + + + + + + of the marketing and sale of goods similar to the Products in the Territory. by using the Technical Know-How + + + +(b) the damages that would be suffered by IMPCO as a result of breach of the provisions of this Article may not be calculable and that an award of a monetary judgment for such a breach would be an inadequate remedy. Consequently, IMPCO shall have the right, in addition to any other rights it may have, to obtain, in any court of competent jurisdiction, injunctive relief to restrain any breach or threatened breach of any provision of this Article or otherwise to specifically enforce any of the provisions hereof. This remedy is in addition to any remedy for, and not in lieu of damages, directly or indirectly suffered by IMPCO and reasonable attorney's fees. + + + +(c) the duration for which the covenants in this Article are to be effective is reasonable. In the event that any court finally determines that the time period or the geographic scope of any such covenant is unreasonable or excessive and any covenant is to that extent made unenforceable, the parties agree that the restrictions of this Article shall remain in full force and effect for the greatest time period and within the Territory that would not render it unenforceable. The Parties agree that each of the covenants in Article shall be deemed to be a separate or independent covenant. ARTICLE - 15 EVENTS OF DEFAULT AND CONSEQUENT TRANSFER OF SHARES 15.1 A party shall be deemed to be in default if: a) such party makes a material breach of any provision of this Agreement and fails to cure such breach within thirty (30) days after having received notice and demand for cure of such breach from one or more of the non-defaulting Parties; b) such party becomes insolvent; or c) such party passes a resolution to dissolve, to liquidate whether voluntary or involuntary (except for the purpose of bonafide reconstruction or amalgamation). 15.2 If any event of default provided in Article 15.1 above happens with respect to a party: If any event of default provided in Article 15.1 above occurs with respect to a party: + + + +a) The non-defaulting Party shall after the expiry of the thirty (30) day period referred to in Article 15.1 above, at its option, be entitled to purchase all of the shares of the JVC owned by the defaulting party. For this purpose, the non-defaulting Party would make a written offer to purchase the shares of the defaulting Party at the price determined in terms of Article 15.3, and the defaulting Party will be obliged to transfer its shares within one (1) month of 16 + + + + + + + +the receipt of the written notice from the non-defaulting Party. It is clarified that the time period required to obtain Government approvals, if any, for such transfer will not be included for the purpose of calculation of the period of one (1) month stated above. It is further clarified that such transfer shall be free of all liens, charges and encumbrances in return for the payment of the purchase price stated in the offer. OR After the expiry of the thirty (30) day period referred to in 15.1 (a) above, the non-defaulting Party at its option, shall be entitled to sell all the shares owned by it in the JVC to the defaulting Party at the price determined in accordance with Article 15.3 below. + + b) The Parties agree that they will render full co-operation and execute all necessary documents, including consents and no-objection certificates to the Government of India, to ensure that all necessary government approvals can be procured to give effect to the provisions of this Article. 15.3 The price per share in the sale described in Article 15.2 above shall be i) the price determined in accordance with the regulations of the Securities and Exchange Board of India or the Reserve Bank of India, if applicable or, ii) in case no Government Regulations apply to price determination, then fair market price as determined by an international auditing firm or other expert designated by the party who would purchase shares from the defaulting party, whichever is lower; and ARTICLE - 16 TERM AND TERMINATION 16.1 This Agreement shall become effective on the date of execution and shall continue in force and effect for an indefinite term thereafter unless terminated pursuant to the provisions of Article 16 or by all the Parties in writing. 16.2 A party shall be automatically excluded from the provisions of this Agreement if it ceases to be a shareholder in the JVC. In such event, such party shall cause all its Directors and other nominees and representatives to resign from their positions held in the JVC, immediately. 16.3 Even if this Agreement is terminated or a party is excluded from this Agreement, the claims and the liabilities of each party, existent at the time of the termination or exclusion or which shall be subsequently incurred by the cause(s) existent at the time of termination or exclusion, shall survive and be effective until they are fully performed/discharged. 16.4 If the JVC fails to sell [one million dollars (US$ 1,000,000.00)] worth of Products in the Territory within [eighteen (18)] months from the date of execution of this Agreement, both the Parties will mutually discuss whether to continue or terminate the Agreement. 17 + + + + + + 16.5 In addition to anything contained hereinabove, this Agreement may be terminated by either Party upon the following: + + (i) in the event of an enactment of any law or regulation in India, or the adoption by the Government of India or any political subdivision thereof of any policy, guideline or other similar direction which would have the effect of requiring any change in the terms of this Agreement adverse to IMPCO; or (ii) in the event that all or any portion of the facilities or other assets of the JVC are nationalised or expropriated by, or taken over for a period in excess of one (1) month by the Government of India or any political subdivisions thereof; or (iii) an event of Force Majeure preventing the JVC from carrying on its business for a continuous period of six (6) months. (iv) if any Party is required, other than in accordance with the provisions of this Agreement, to transfer all or part of its shares or to reduce its percentage of shareholding in the JVC due to a change in or enactment of any law or regulation in India. ARTICLE - 16A USE OF TECHNICAL KNOW-HOW AFTER TERMINATION 16A.1 The Parties agree that in the event of termination of this Agreement due to any of the reasons mentioned in Article 16 above (and consequent termination of the TAA) the JVC and/or MINDA/MIL will not be entitled to use the Technical Know-How for any reason whatsoever. Provided, however, that in the event the termination of this Agreement is followed by a sale of all of the shares held by IMPCO in the JVC to MINDA/MIL, the JVC will have a right to continue to use the Technical Know How already received and absorbed on the condition that royalty payments under the TAA have been paid by the JVC to IMPCO or will be paid, as the case may be, for a minimum period of five (5) years, as provided in the TAA. 16A.2 The Parties agree that in the event of termination of the JVA (and consequently the Technology License Agreement) neither Party is agreeable to the sale of its shareholding to the other party or conversely the purchase of the shareholding of the other party, the parties will proceed to dissolve the JVC by the mechanism of voluntary winding up. For this purpose, each party will provide full cooperation and execute necessary documents and make necessary filings with any Government authorities and/or judicial bodies to ensure that JVC can be voluntarily wound up in the most time and cost efficient manner. The Parties agree that during the pendency of the winding up, the JVC will be allowed to use the Technical Know How to the extent the same is necessary for the purpose of implementing any orders pending in favour of its customers. 18 + + + + + + ARTICLE - 17 REPRESENTATIONS AND WARRANTIES 17.1 As of the date of this Agreement, IMPCO represents and warrants that it is a company duly incorporated and in good standing under the laws of the State of Delaware USA with an office and legal address at 16804 Gridley Place, Cerritos, California 90703 USA; that it has full legal power and authority to execute this Agreement and to form and subscribe to the Venture under the terms of this Agreement; and that performance of and compliance with the terms, provisions, and conditions of this Agreement do not conflict with or will not result in any violation of any applicable bylaw, mortgage, indenture, contract, agreement, instrument, franchise, permit, judgment, decree, order, statute, rule or regulation. 17.2 As of the date of this Agreement, MINDA and MIL, hereby represent and warrant to IMPCO as follows: Warranties as to the Authority This Agreement has been validly executed by MINDA and MIL and constitutes a valid and binding obligation of MINDA and MIL, enforceable in accordance with its terms. The execution and performance by MINDA and MIL of this Agreement will not: + + (a) conflict with, or result in any breach, violation of or default under the Articles or any note, bond, mortgage, lease, license, permit, agreement or other instrument or obligation to which MINDA and MIL are a party; or (b) to the best of MINDA and MIL's knowledge, violate any law, order, rule or regulation applicable to the them. All actions, consents, conditions and things required to be taken, fulfilled and done (including the obtaining of any necessary consents or approvals) in order to enable MINDA and MIL to enter into, execute, and exercise its rights and perform and comply with its obligations under this Agreement as well as to ensure that those obligations are legally binding and enforceable have been obtained, fulfilled and done. That MINDA and MIL acknowledge that IMPCO has entered into this Agreement in reliance on the warranties and representations made herein, collectively and severally, by MINDA and MIL. MINDA and MIL represents and warrants that the statements given in this Agreement are correct. Warranties as to Organisation and Power That MIL is a company limited by Shares, duly incorporated and existing under the laws of India. That MIL was incorporated on September 16, 1992 under the provisions of the Act and has its registered office at 36A, Rajasthan Udyog Nagar, Delhi 110 033 (India). 19 + + + + + + That MIL has all requisite corporate power and authority to own and operate its properties and to carry out the Business. That MIL has all permits, licenses and authorisations required by the concerned governmental authorities for the conduct of its Business. Financial Information All Financial Information furnished by MIL/MINDA is accurate and complete. The Financial Statements of MIL/MINDA have been prepared in accordance with the generally accepted accounting principles, consistently applied, in India and present a true and fair representation of the financial position of MIL/MINDA as of March 31, 2001. The net worth of MIL/MINDA as at that date is equal to at least RS 100 million. Tax and other matters That MIL/MINDA has duly and timely filed all tax returns required to be filed by it and has paid all taxes which are due and payable and has paid all assessments and reassessments, and all other taxes, governmental or municipal charges or levies, penalties, interest and fines due and payable by MIL/MINDA on or prior to the date hereof, which will result in any liability on its part after the Effective Date. That MIL has not incurred any liabilities for taxes since March 31, 2000 other than those in the ordinary course of business. There are no actions, suits, proceedings, investigations or claims pending or, to the best knowledge MIL/MINDA, threatened against MIL/MINDA in respect of taxes, governmental, provincial or municipal charges, levies or assessments, nor are there any matters under discussion with any governmental, provincial or municipal charges, levies or assessments asserted by any such authority. Legal proceedings That no legal, administrative or other proceeding or governmental investigation or unresolved dispute is pending involving, directly or indirectly, MIL/MINDA, and no legal, administrative or other proceeding or governmental investigation is threatened, which might adversely affect the condition (financial or otherwise), Business, operations, prospects or properties of MIL/MINDA. That MIL/MINDA is not subject to any judgement or court order which adversely affects or might reasonably be expected to adversely affect, the Business, operations, prospects, properties or conditions (financial or otherwise) of MIL. 20 + + + + + + ARTICLE - 18 CONFIDENTIALITY 18.1 During the term of this Agreement and for a period of three (3) years thereafter, all the Parties to this Agreement shall take reasonable steps to prevent disclosure of any confidential or proprietary information to any third party, which it may have received from the JVC or other Parties to this Agreement. They shall not use for any purpose (other than authorized by the supplying party) the confidential information marked or designated as "confidential", except for the following information: (a) Which, at the time of disclosure, is in the public domain or publicly known or available; (b) Which, after disclosure to the recipient, becomes part of the public domain or publicly known or available, except by breach of the terms of this Agreement. (c) Which the recipient can establish by conclusive proof that the information was in its possession at the time of disclosure to the recipient; (d) Which, the recipient received rightfully without any confidentiality obligation from a third party, who is not prohibited from disclosing such information; (e) Which is independently developed by the receiving party; and + + (f) Which is information required to be disclosed by law or as per request of any Governmental body or court of Law. Provided that the disclosing party is given prior notice and such court or Government body is requested to keep such information confidential to the extent permissible under law. 18.2 Information disclosed under this Agreement should remain the property of the disclosing party. 18.3 Without the prior consent of the disclosing Parties, no party will disclose to any third party the fact that any such information has been made available to a Party hereto. 18.4 The Parties to this Agreement shall take all reasonable efforts to ensure that the officers, employees and agents of the JVC shall observe a similar obligation of confidentiality. ARTICLE - 19 ARBITRATION 19.1 Difference: All matters, questions, disputes, differences or claims arising between the Parties as to the effect, interpretation or application of this Agreement or as to their rights, duties or liabilities hereunder, or as to any act, matter or thing arising out of consequent to, or in connection with this Agreement (hereinafter called the Difference') will be resolved amicably through negotiations. Such negotiations will 21 + + + + + + commence within a period of seven (7) working days of the issue of notice in writing by either party calling for the same (hereinafter called 'the Notice'). 19.2 Arbitration: In the event that such negotiations fail to so resolve the difference within a period of ninety (90) working days from the date of receipt of the notice by the other party, such difference shall be finally settled under the rules of the International Chamber of Commerce by arbitrator(s) appointed in accordance with the said Rules. The arbitration proceedings shall be conducted at London, United Kingdom, in the English language. 19.3 Cost of Arbitration: The Parties hereto shall bear respective costs in connection with the arbitration proceedings. 19.4 Performance of undisputed obligations: The existence of the Differences between the Parties hereto, or the initiation or continuance of any arbitration proceedings referred to above, will not delay or postpone the performance of the undisputed obligations of the Parties hereto and the arbitrator will take full cognizance and give due consideration to such performance, if any, in the making of the final award. ARTICLE - 20 FORCE MAJEURE No Party shall be held liable or responsible to the other Party for failure or delay in fulfilling or performing any obligation in this Agreement in case such failure or delays are caused by actions or events which are beyond the reasonable control of the affected party, the effect of which is to prevent or interfere with that party's performance hereunder, including, without limitation, (i) any Act of God or public enemy, fire, explosion, accident, embargo, or any other circumstances of like or different character commonly referred to as force majeure; or (ii) interruption of or delay in transportation or shortage or failure of supply of materials or equipment, breakdowns, strikes, or other labor strife from whatever cause arising; or (iii) compliance by either party here to with any order, action, directive, or request of any governmental official, department, agency, or authority. Each party agrees to give the other party prompt written notice of the occurrence of any such condition, the occurrence and the extent to which the affected Party will be unable to fully perform its obligations hereunder. Each Party further agrees to use all reasonable efforts to correct such conditions as quickly as possible and to give the other Party prompt written notice when it is again fully able to perform such obligation. Provided further that, in the event of such prevention or delay as aforesaid, both Parties hereto, instead of exercising the aforesaid option, may consult with each other in order to mutually determine the course of action to be taken, in order to minimize the effects of such prevention or delay and continue the operation of this Agreement. 22 + + + + + + ARTICLE - 21 WAIVER Failure or delay by a party to require the performance of any provision of this Agreement shall not affect or impair that party's right to require full performance thereof at any time thereafter. Each party may specifically waive any breach of this Agreement by the other Party or Parties but no such waiver shall constitute a continuing waiver of similar or other breaches by the other Party or Parties. ARTICLE - 22 SEVERABILITY If any provision of this Agreement is determined by judicial decision to be unlawful, unenforceable or invalid, or is discovered to be so, such provision shall be severed from this Agreement. Such invalid provision(s) shall be replaced by a valid provision(s). Provided however, that the remaining provisions of this Agreement shall remain in effect and be binding on the Parties. ARTICLE - 23 NOTICES All notices, requests and other communications under this Agreement shall be in writing and shall be deemed to have been duly given if delivered by hand, at the time of receipt or, if communicated by cable or similar electronic means, at the time receipt thereof has been confirmed by return electronic communication or signal that the message has been clearly received, or if mailed seven (7) days after mailing, registered airmail return receipt requested, with postage prepaid. In case of IMPCO to: Mr. Don L. Dominic, Vice President and General Counsel IMPCO TECHNOLOGIES, INC. 6804 Gridley Place Cerritos, California 90703 U.S.A. Fax No.: 562 860-5106 + +In case of MIL to: Mr. Nirmal K. Minda Managing Director 36-A, Rajasthann Udyog Nagar, Delhi-110033 Fax No.: 0091 11 7241524 + +If to Nirmal K. Minda: Mr. Nirmal K. Minda and/or relatives & associates A-15, Ashok Vihar, Phase-I, Delhi-110 052. Fax No.: 0091 11 7241524 23 + + + + + + Provided, however, that if the party shall have designated a different address by notice to the other party, then to the last address, so designated. ARTICLE - 24 MISCELLANEOUS 24.1 English shall be used in all correspondence and communications between the Parties. This Agreement and the Associated Agreements shall be prepared and executed in English. Translation of this Agreement into any other language shall be for the convenience of the Parties and all questions arising from this Agreement shall be determined by reference to the official English-language version of the Agreement. 24.2 Governing Law: This Agreement shall be governed by and construed in accordance with the laws of India and the Delhi Courts shall have exclusive jurisdiction over any legal proceedings in respect of this Agreement. The Parties hereby stipulate irrevocably that they hereby submit to the exclusive jurisdiction of the above-referred courts and for such purpose hereby waive all and any challenges to the exclusive jurisdiction of the above referred courts. 24.3 Schedule or Exhibit: Each of the Schedule(s) or Exhibit(s) referred to herein be attached hereto as an integral part of this Agreement. 24.4 Entire Agreement: This Agreement sets forth the entire agreement between the Parties and supersedes all prior other agreements and understandings between the Parties, and their officers, directors, or employees as to the subject matter hereof. None of the Parties has relied upon any oral representation or oral information given to it by any representative of any of the other Parties. No change in this Agreement shall be effective either as a result of a course of conduct or oral statements, other than by an agreement in writing duly authorized by the representatives of each of the Parties hereto. 24.5 Counterparts: the Parties shall execute this Agreement hereto, in four counterparts and each executed copy thereof shall be deemed an original without production of the others. 24.6 Any amendment(s) to this Agreement shall be made in writing and signed by the Parties to this Agreement. 24.7 Legal Costs: The Parties agree that all legal costs, expenses and fees would be borne by the respective Parties. 24.8 Winding Up: In the event of termination of this Agreement and consequent winding up of the JVC, the Parties agree to cooperate with each other for adequate discharge and fulfillment of the JVC's liabilities, commitments and obligations as may be necessary. 24 + + + + + + ARTICLE - 25 NO THIRD PARTY PAYMENT 25.1 Definition of Third Parties. The Parties represent to each other that it has not made, and agrees that it will not make, in connection with the transactions contemplated by this Agreement, or in connection with any other business transactions involving the JVC, any payment or transfer of anything of any value, directly or indirectly, to the following: (a) to any government official or employee (including employees of government corporations), or to any political party or candidate; or (b) to any officer, director, employee or representative of any actual or potential JVC customer; or (c) to any other person or entity if such payment or transfer would violate the laws of the country in which such payment or transfer is made or violate the laws of the United States. 25.2 Anti-Kickback. It is the intent of the Parties that no payment or transfers of value shall be made which have the purpose or effect of public or commercial bribery, acceptance of or acquiescence in extortion, kickbacks or other unlawful or improper means of obtaining business. This section shall not, however, prohibit normal and customary business entertainment or the giving of business momentos of nominal value. 25.3 Anti-Government Official Ownership. MIL/MINDA affirms that it has disclosed to Company that no government official has an ownership interest, director indirect, in MIL/MINDA or in the contractual relationship established by this Agreement. In the event that during the term of this Agreement, there is the acquisition of an interest in MINDA/MIL, or in this Agreement by a government official, MIL/MINDA agrees to make immediate disclosure to IMPCO and agrees that this Agreement may become subject to immediate termination. For the purpose of this Article, "government official" means any officer or employee of the government or any department, agency, corporation or instrumentality thereof, or any political party, and includes immediate family members and nominees of such governmental officials. 25 + + + + + + IN WITNESS WHEREOF, the Parties hereto have executed this Agreement and caused their respective corporate seals to be affixed by their officers thereunto duly authorized as of the day and year first written above. Signed for & on behalf of : MINDA INDUSTRIES LIMITED + +/s/ Nirmal K. Minda + +Nirmal K. Minda Managing Director MR. NIRMAL K. MINDA & ASSOCIATES + +/s/ Nirmal K. Minda + +Nirmal K. Minda IMPCO TECHNOLOGIES INC. + +/s/ Pearl Kamdar + +Pearl Kamdar Director, Asia Pacific Operations WITNESS: + +1. + +/s/ Rob Mercer + +2. + +/s/ Don Dominic + +3. + + 26 + + + + + + SCHEDULE - I Schedule I to the Joint Venture Agreement (JVA) dated May 18, 2001 DETAILS OF MINDA AS REFERRED IN JVA; A. MINDA FAMILY A.1 MR. S.L. MINDA & FAMILY 1. MR. S.L. MINDA 2. MRS. SAVITRI DEVI MINDA 3. S.L. MINDA & SONS (HUF) A.2. MR. NIRMAL K. MINDA & FAMILY 1. MR. NIRMAL K. MINDA 2. MRS. SUMAN MINDA 3. PALAK MINDA 4. PRIDHI MINDA 5. NIRMAL K.MINDA (HUF) A.3. 1. MR. AND MRS. SHISHIR AGARWAL 2. MR. AND MRS. GAGAN AGARWAL B. ASSOCIATE COMPANIES B1. SWITCH AUTO PVT.LTD. B2. SOPAN INVESTMENT & AGRO FARMS PVT. LTD. B3. LATTU FINANCE & INVESTMENTS PVT.LTD. B4. PJPS FINANCE & INVESTMENTS PVT.LTD. 27 + + + + + + Signed for & on behalf of : MINDA INDUSTRIES LIMITED IMPCO TECHNOLOGIES INC. + +/s/ Nirmal K. Minda + +/s/ Pear Kamdar + +Nirmal K. Minda Pearl Kamdar Managing Director Director, Asia Pacific Operations + +MR. NIRMAL K. MINDA & ASSOCIATES + +/s/ Nirmal K. Minda + +Nirmal K. Minda + + + + + + 28 \ No newline at end of file diff --git a/full_contract_txt/INGEVITYCORP_05_16_2016-EX-10.5-INTELLECTUAL PROPERTY AGREEMENT.txt b/full_contract_txt/INGEVITYCORP_05_16_2016-EX-10.5-INTELLECTUAL PROPERTY AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..8678fcaa34084ba70b17a89220534fb8bf1ee2f0 --- /dev/null +++ b/full_contract_txt/INGEVITYCORP_05_16_2016-EX-10.5-INTELLECTUAL PROPERTY AGREEMENT.txt @@ -0,0 +1,191 @@ +Exhibit 10.5 INTELLECTUAL PROPERTY AGREEMENT This INTELLECTUAL PROPERTY AGREEMENT, dated as of May 14, 2016 (this "Agreement"), is by and between WestRock Company, a Delaware corporation ("Parent"), and Ingevity Corporation, a Delaware corporation ("SpinCo"). Capitalized terms used herein and not otherwise defined shall have the respective meanings assigned to them in Section 1 or the Separation Agreement. SpinCo and Parent may be individually referred to herein as a "Party" and collectively as the "Parties". R E C I T A L S WHEREAS, Parent and SpinCo have entered into that certain Separation and Distribution Agreement, dated as of even date herewith, (the "Separation Agreement"); WHEREAS, the Separation Agreement sets forth the principal corporate transactions required to effect the Separation; WHEREAS, Parent and SpinCo desire to enter into this Agreement to set forth the terms and conditions pertaining to the allocation of ownership and other rights associated with certain Intellectual Property; and WHEREAS, this Agreement is deemed to be an Ancillary Agreement under the Separation Agreement. NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, hereby agree as follows: 1. DEFINITIONS. For the purpose of this Agreement, the following terms shall have the following meanings: 1.1 "Mill Recovery Technology/Intellectual Property" shall mean all Technology, Software and Intellectual Property directed to mill-based recovery processes that generate biorefinery materials. 1.2 "Common Information" shall mean that Information that is related to, but not dedicated to, the SpinCo Assets, the SpinCo Liabilities, the SpinCo Business or the Transferred Entities. 1.3 "Control" or "Controlled" means, with respect to Intellectual Property, that SpinCo or a member of the SpinCo Group owns such Intellectual Property, in whole or in part, and/or has the right to grant a license to Parent with respect to such Intellectual Property as set forth herein and without incurring any financial or other obligations to any other Person, subject, in each case, to the terms of any license or other agreement to which SpinCo or any of the SpinCo Group is a party that relates to any such Intellectual Property. + + + + + + + + + + 1.4 "Improvements" means any improvements, derivative works, enhancements, refinements, advances or other modifications with respect to any Licensed SpinCo IP (whether or not patentable or reduced to practice). 1.5 "Intellectual Property" shall mean all of the following whether arising under the Laws of the United States or of any other foreign or multinational jurisdiction: (a) patents, patent applications (including patents issued thereon) and statutory invention registrations, including reissues, divisions, continuations, continuations in part, substitutions, renewals, extensions and reexaminations of any of the foregoing, and all rights in any of the foregoing provided by international treaties or conventions, (b) trademarks, service marks, trade names, service names, trade dress, logos and other source or business identifiers, including all goodwill associated with any of the foregoing, and any and all common law rights in and to any of the foregoing, registrations and applications for registration of any of the foregoing, all rights in and to any of the foregoing provided by international treaties or conventions, and all reissues, extensions and renewals of any of the foregoing, (c) Internet domain names, accounts with Facebook, LinkedIn, Twitter and similar social media platforms, registrations and related rights, (d) copyrightable works, copyrights, moral rights, mask work rights, database rights and design rights, in each case, other than Software, whether or not registered, and all registrations and applications for registration of any of the foregoing, and all rights in and to any of the foregoing provided by international treaties or conventions, (e) confidential and proprietary information, including trade secrets, invention disclosures, processes and know-how and (f) any other intellectual property rights, in each case, other than Software. The items listed in subsections (b) and (c) of this Section 1.5 are referred to herein as "Trademark-Related IP". 1.6 "Licensed SpinCo IP" means (i) the SpinCo Intellectual Property (excluding Trademark-Related IP), the SpinCo Software, and the SpinCo Technology, and (ii) all rights, interests and claims of either Party or any of the members of its Group as of the Effective Time with respect to Information that is exclusively related to the items of the aforementioned clause (i), in each case subject to the limitations set forth herein, and to the extent Controlled by SpinCo or any member of the SpinCo Group as of the Effective Time (including as a result of the assignments made by this Agreement). Licensed SpinCo IP shall exclude SpinCo Intellectual Property, SpinCo Software, SpinCo Technology, and Intellectual Property: (a) directed to chemically activated carbon products or any processes for manufacturing chemically activated carbon products (including, for the avoidance of doubt, activated carbon sheets); (b) directed to ex-mill processes for purifying crude tall oil and for isolating, purifying and derivatizing lignin from black liquor or any products created using any such processes; (c) licensed to Alberdingk Boley, Inc. ("ABI"), except to the extent outside the "Field," as that term is defined in the "License Agreement" dated February 3, 2006, by and between MeadWestvaco Corporation and ABI; (d) owned by Purification Cellutions, LLC, a joint venture between MeadWestvaco Corporation and Applied Ceramics, Inc.; (e) directed to any products utilizing specialty chemicals derived from co-products of the kraft pulping process sold by SpinCo into the paper or packaging field or any processes for manufacturing such products (including, for the avoidance of doubt, paper sizing); (f) owned by a third party (including for these purposes any joint venture or partnership or similar business entity of which SpinCo is a member or in which SpinCo has an ownership interest) and not sublicensable to Parent or any member of the Parent Group by SpinCo or any member of the SpinCo Group. + + -2- + + + + + + + + 1.7 "Other IP" shall mean all Intellectual Property, other than Registrable IP, that is owned by either Party or any member of its Group as of the Effective Time. 1.8 "Parent Field" shall mean the businesses (whether or not such businesses are or have been terminated, divested or discontinued) conducted at any time prior to the Effective Time, or actively pursued at the Effective Time, by the Parent or any member of the Parent Group, outside the SpinCo Field. 1.9 "Parent IP Liabilities" means all Liabilities relating to, arising out of or resulting from exploitation by, or on behalf of the Parent Group, of: (i) Intellectual Property, Software, Technology owned by Parent Group ("Parent IP Assets"); (ii) the Information that is exclusively related to the items of the aforementioned clause (i); and (iii) all Liabilities arising from the use by the Parent Group of Common Information. 1.10 "Parent Name and Parent Marks" shall mean the names, marks, trade dress, logos, monograms, domain names and other source or business identifiers of either Party or any member of its Group using or containing "WestRock", "MeadWestvaco" or "RockTenn" or their ticker symbols "WRK," "MWV," or "RKT", either alone or in combination with other words or elements, and all names, marks, trade dress, logos, monograms, domain names and other source or business identifiers confusingly similar to or embodying any of the foregoing either alone or in combination with other words or elements, together with the goodwill associated with any of the foregoing. 1.11 "Permitted Party" shall mean a third party (a) in which Parent or other member of the Parent Group has an ownership interest of greater than fifteen percent (15%); (b) with respect to whom SpinCo has provided its consent to be a sublicensee under the Licensed SpinCo IP, such consent not to be unreasonably withheld; or (c) who conducts business, operations, or activities within the Parent Field on behalf of Parent or other member of the Parent Group. 1.12 "Pre-applied Adhesive Technology/Intellectual Property" shall mean all Technology, Software and Intellectual Property relating to the methods and processes of applying adhesives to cellulose based materials (e.g., paper, paper board, liner board and corrugated materials) and packaging, including without limitation, related machine and press manufacturing processes, and the use of such cellulose based materials with adhesives applied thereon. Pre-applied Adhesive Technology/Intellectual Property does not include (a) the chemical formulations of adhesives; (b) the chemical formulations of tackifying resins, dilutents, and plasticizers used in such adhesives; or (c) any process Technology for making adhesives. 1.13 "Registrable IP" shall mean all patents, patent applications, statutory invention registrations, registered trademarks, registered service marks, trademark and service mark applications, registered Internet domain names and copyright registrations. 1.14 "Software" shall mean any and all (a) computer programs, including any and all software implementation of algorithms, models and methodologies, whether in source code, object code, human readable form or other form, (b) databases and compilations, including any and all data and collections of data, whether machine readable or otherwise, (c) descriptions, flow charts and other work products used to design, plan, organize and develop any of the + + -3- + + + + + + + + foregoing, (d) screens, user interfaces, report formats, firmware, development tools, templates, menus, buttons and icons and (e) documentation, including user manuals and other training documentation, relating to any of the foregoing. 1.15 "SpinCo Field" shall mean the businesses (whether or not such businesses are or have been terminated, divested or discontinued) conducted at any time prior to the Effective Time, or actively pursued at the Effective Time, by SpinCo or any member of its Group, outside the Parent Field. 1.16 "SpinCo Intellectual Property" shall mean (a) the Registrable IP set forth on Schedule 1.16 and (b) all Other IP owned by, licensed by or to, or sublicensed by or to either Party or any member of its Group as of the Effective Time that is dedicated to the SpinCo Business, including any Other IP set forth on Schedule 1.16; provided, however, that SpinCo Intellectual Property does not include any Registrable IP or Other IP that comprises (i) Mill Recovery Technology/Intellectual Property, or (ii) Pre-applied Adhesives Technology/Intellectual Property. 1.17 "SpinCo IP Assets" means all (i) SpinCo Intellectual Property, SpinCo Software, SpinCo Technology, and SpinCo IP Contracts, and (ii) all rights, interests and claims of either Party or any of the members of its Group as of the Effective Time with respect to Information that is exclusively related to the items of the aforementioned clause (i) or the SpinCo IP Liabilities. 1.18 "SpinCo IP Contracts" shall mean the following contracts and agreements to which either Party or any member of its Group is a party or by which it or any member of its Group or any of their respective Intellectual Property is bound, whether or not in writing; provided, that SpinCo IP Contracts shall not include any contract or agreement that is expressly contemplated to be retained by Parent or any member of the Parent Group from and after the Effective Time pursuant to any provision of the Separation Agreement, this Agreement or any other Ancillary Agreement: (a) any vendor contracts or agreements with a Third Party pursuant to which such Third Party (i) grants or receives a license, permission or use right to Intellectual Property, any covenant not to sue under any Intellectual Property, or access and use rights to information technology (for example, software as a service agreements), or (ii) undertakes an obligation to assign, or has a right to be assigned, Intellectual Property to or by either Party or any member of its Group exclusively for use or in connection with the SpinCo Business as of the Effective Time; (b) any contract or agreement pertaining primarily to Intellectual Property that is otherwise expressly contemplated pursuant to this Agreement, the Separation Agreement or any of the Ancillary Agreements to be assigned to, or be a contract or agreement in the name of, SpinCo or any member of the SpinCo Group; and (c) any other contract or agreement exclusively related to the SpinCo IP Assets. + + -4- + + + + + + + + 1.19 "SpinCo IP Liabilities" means all Liabilities relating to, arising out of or resulting from exploitation by, or on behalf of the SpinCo Group, of: (i) the SpinCo Intellectual Property, SpinCo Software, SpinCo Technology, and SpinCo IP Contracts; (ii) the Information that is exclusively related to the items of the aforementioned clause (i); and (iii) all Liabilities arising from the use by the SpinCo Group of Common Information. 1.20 "SpinCo Name and SpinCo Marks" shall mean the names, marks, trade dress, logos, monograms, domain names and other source or business identifiers of SpinCo or any member of its Group using or containing "Ingevity" or its symbol "NGVT", either alone or in combination with other words or elements, and all names, marks, trade dress, logos, monograms, domain names and other source or business identifiers confusingly similar to or embodying any of the foregoing either alone or in combination with other words or elements, together with the goodwill associated with any of the foregoing. 1.21 "SpinCo Software" shall mean all Software owned or licensed by either Party or member of its Group dedicated for use in the SpinCo Business as of the Effective Time; provided, however, that SpinCo Software does not include (i) any Software directed to Mill Recovery Technology/Intellectual Property, or (ii) any Software directed to Pre-applied Adhesive Technology/Intellectual Property. 1.22 "SpinCo Technology" shall mean all Technology owned or licensed by either Party or any member of its Group dedicated for use in the SpinCo Business as of the Effective Time; provided, however, that SpinCo Technology does not include any Technology that is (i) Mill Recovery Technology/Intellectual Property, or (ii) Pre-applied Adhesive Technology/Intellectual Property. 1.23 "Technology" shall mean all technology, designs, formulae, algorithms, procedures, methods, discoveries, processes, techniques, ideas, know-how, research and development, technical data, tools, materials, specifications, processes, inventions (whether patentable or unpatentable and whether or not reduced to practice), apparatus, creations, improvements, works of authorship in any media, confidential, proprietary or nonpublic information, and other similar materials, and all recordings, graphs, drawings, reports, analyses and other writings, and other tangible embodiments of the foregoing in any form whether or not listed herein, in each case only to the extent in existence as of the Effective Time, and, other than Software. 2. THE SEPARATION 2.1 Matters Governed Exclusively by this Agreement. This Agreement shall exclusively govern the allocation of Assets and Liabilities that are comprised of Intellectual Property of the Parent Group or the SpinCo Group. In the case of any conflict between the Separation Agreement and this Agreement in relation to any matters addressed herein, this Agreement shall prevail. + + -5- + + + + + + + + 2.2 Transfer of Assets and Assumption of Liabilities. (a) On or prior to the Effective Time, but in any case, prior to the Distribution, in accordance with the Plan of Reorganization: (i) Transfer and Assignment of SpinCo IP Assets. Parent shall, and shall cause the applicable members of its Group to, contribute, assign, transfer, convey and deliver to SpinCo, or to the applicable SpinCo Designees, and SpinCo shall, and shall cause such SpinCo Designees to, accept from Parent and the applicable members of the Parent Group, all of Parent's and such Parent Group member's respective direct or indirect right, title and interest in and to all of the SpinCo IP Assets (it being understood that if any SpinCo IP Asset shall be held by a Transferred Entity or a wholly owned Subsidiary of a Transferred Entity, such SpinCo IP Asset may be assigned, transferred, conveyed and delivered to SpinCo as a result of the transfer of all of the equity interests in such Transferred Entity from Parent or the applicable members of the Parent Group to SpinCo or the applicable SpinCo Designee); and (ii) Acceptance and Assumption of SpinCo IP Liabilities. SpinCo shall, and shall cause the applicable SpinCo Designees to, accept, assume and agree faithfully to perform, discharge and fulfill all the SpinCo IP Liabilities in accordance with their respective terms. SpinCo shall, and shall cause such SpinCo Designees to, be responsible for all SpinCo IP Liabilities, regardless of when or where such SpinCo IP Liabilities arose or arise, or whether the facts on which they are based occurred prior to or subsequent to the Effective Time, regardless of where or against whom such SpinCo IP Liabilities are asserted or determined (including any SpinCo IP Liabilities arising out of claims made by Parent's or SpinCo's respective directors, officers, employees, agents, Subsidiaries or Affiliates against any member of the Parent Group or the SpinCo Group) or whether asserted or determined prior to the date hereof, and regardless of whether arising from or alleged to arise from negligence, recklessness, violation of Law, fraud or misrepresentation by any member of the Parent Group or the SpinCo Group, or any of their respective directors, officers, employees, agents, Subsidiaries or Affiliates. 2.3 Approvals and Notifications. (a) Approvals and Notifications for SpinCo IP Assets. To the extent that the transfer or assignment of any SpinCo IP Asset or the assumption of any SpinCo IP Liability requires Approvals or Notifications, the Parties shall use their commercially reasonable efforts to obtain or make such Approvals or Notifications as soon as reasonably practicable; provided, however, that, except to the extent expressly provided in this Agreement or as otherwise agreed in writing between Parent and SpinCo, neither Parent nor SpinCo shall be obligated to contribute capital or pay any consideration in any form (including providing any letter of credit, guaranty or other financial accommodation) to any Person in order to obtain or make such Approvals or Notifications. (b) Delayed SpinCo Transfers. If and to the extent that the valid, complete and perfected transfer or assignment to the SpinCo Group of any SpinCo IP Asset or assumption by the SpinCo Group of any SpinCo IP Liability would be a violation of applicable Law or require any Approvals or Notifications in connection with the Separation that has not been obtained or made by the Effective Time, then, unless the Parties shall otherwise mutually agree + + -6- + + + + + + + + in writing, the transfer or assignment to the SpinCo Group of such SpinCo IP Assets or the assumption by the SpinCo Group of such SpinCo IP Liabilities, as the case may be, shall be automatically deemed deferred and any such purported transfer, assignment or assumption shall be null and void until such time as all legal impediments are removed or such Approvals or Notifications have been obtained or made. Notwithstanding the foregoing, any such SpinCo IP Assets or SpinCo IP Liabilities shall continue to constitute SpinCo IP Assets and SpinCo IP Liabilities for all other purposes of this Agreement. (c) Treatment of Delayed SpinCo IP Assets and Delayed SpinCo IP Liabilities. If any transfer or assignment of any SpinCo IP Asset (or a portion thereof) or any assumption of any SpinCo IP Liability (or a portion thereof) intended to be transferred, assigned or assumed hereunder, as the case may be, is not consummated on or prior to the Effective Time, whether as a result of the provisions of Section 2.3(b) or for any other reason (any such SpinCo IP Asset (or a portion thereof), a "Delayed SpinCo IP Asset" and any such SpinCo IP Liability (or a portion thereof), a "Delayed SpinCo IP Liability"), then, insofar as reasonably possible and subject to applicable Law, the member of the Parent Group retaining such Delayed SpinCo IP Asset or such Delayed SpinCo IP Liability, as the case may be, shall thereafter hold such Delayed SpinCo IP Asset or Delayed SpinCo IP Liability, as the case may be, for the use and benefit of the member of the SpinCo Group entitled thereto (at the expense of the member of the SpinCo Group entitled thereto). In addition, the member of the Parent Group retaining such Delayed SpinCo IP Asset or such Delayed SpinCo IP Liability shall, insofar as reasonably possible and to the extent permitted by applicable Law, treat such Delayed SpinCo IP Asset or Delayed SpinCo IP Liability in the ordinary course of business in accordance with past practice and take such other actions as may be reasonably requested by the member of the SpinCo Group to whom such Delayed SpinCo IP Asset is to be transferred or assigned, or which will assume such Delayed SpinCo IP Liability, as the case may be, in order to place such member of the SpinCo Group in a substantially similar position as if such Delayed SpinCo IP Asset or Delayed SpinCo IP Liability had been transferred, assigned or assumed as contemplated hereby and so that all the benefits and burdens relating to such Delayed SpinCo IP Asset or Delayed SpinCo IP Liability, as the case may be, including use, non- abandonment, avoidance from contribution to the public domain, risk of loss, potential for gain, and dominion, control and command over such Delayed SpinCo IP Asset or Delayed SpinCo IP Liability, as the case may be, and all costs and expenses related thereto, shall inure from and after the Effective Time to the SpinCo Group. (d) Transfer of Delayed SpinCo IP Assets and Delayed SpinCo IP Liabilities. If and when the Approvals or Notifications, the absence of which caused the deferral of transfer or assignment of any Delayed SpinCo IP Asset or the deferral of assumption of any Delayed SpinCo IP Liability pursuant to Section 2.3(b), are obtained or made, and, if and when any other legal or other impediments for the transfer or assignment of any Delayed SpinCo IP Asset or the assumption of any Delayed SpinCo IP Liability have been removed, the transfer or assignment of the applicable Delayed SpinCo IP Asset or the assumption of the applicable Delayed SpinCo IP Liability, as the case may be, shall be effected in accordance with the terms of this Agreement and/or the applicable Ancillary Agreement as soon as reasonably practicable. (e) Costs for Delayed SpinCo IP Assets and Delayed SpinCo IP Liabilities. Any member of the Parent Group retaining a Delayed SpinCo IP Asset or a Delayed SpinCo IP Liability due to the deferral of the transfer or assignment of such Delayed SpinCo IP Asset or the + + -7- + + + + + + + + deferral of the assumption of such Delayed SpinCo IP Liability, as the case may be, shall not be obligated, in connection with the foregoing, to expend any money unless the necessary funds are advanced (or otherwise made available) by SpinCo or the member of the SpinCo Group entitled to the Delayed SpinCo IP Asset or Delayed SpinCo IP Liability, other than reasonable out-of-pocket expenses, attorneys' fees and recording or similar fees, all of which shall be promptly reimbursed by SpinCo or the member of the SpinCo Group entitled to such Delayed SpinCo IP Asset or Delayed SpinCo IP Liability. 2.4 Novation of SpinCo IP Liabilities. (a) Each of Parent and SpinCo, at the request of the other, shall use its commercially reasonable efforts to obtain, or to cause to be obtained, as soon as reasonably practicable, any consent, substitution, approval or amendment required to novate or assign all SpinCo IP Liabilities and obtain in writing the unconditional release of each member of the Parent Group that is a party to any such arrangements, so that, in any such case, the members of the SpinCo Group shall be solely responsible for such SpinCo IP Liabilities; provided, however, that, except as otherwise expressly provided in this Agreement or any of the Ancillary Agreements, neither Parent nor SpinCo shall be obligated to contribute any capital or pay any consideration in any form (including providing any letter of credit, guaranty or other financial accommodation) to any third Person from whom any such consent, substitution, approval, amendment or release is requested. (b) If Parent or SpinCo is unable to obtain, or to cause to be obtained, any such required consent, substitution, approval, amendment or release as set forth in Section 2.4(a) and the applicable member of the Parent Group continues to be bound by such agreement, lease, license or other obligation or Liability (each, an "Unreleased SpinCo IP Liability"), SpinCo shall, to the extent not prohibited by Law, as indemnitor, guarantor, agent or subcontractor for such member of the Parent Group, as the case may be, (i) pay, perform and discharge fully all the obligations or other Liabilities of such member of the Parent Group that constitute Unreleased SpinCo IP Liabilities from and after the Effective Time and (ii) use its commercially reasonable efforts to effect such payment, performance or discharge prior to any demand for such payment, performance or discharge is permitted to be made by the obligee thereunder on any member of the Parent Group. If and when any such consent, substitution, approval, amendment or release shall be obtained or the Unreleased SpinCo IP Liabilities shall otherwise become assignable or able to be novated, Parent shall promptly assign, or cause to be assigned, and SpinCo or the applicable SpinCo Group member shall assume, such Unreleased SpinCo IP Liabilities without exchange of further consideration. 2.5 Disclaimer of Representations and Warranties. EACH OF PARENT (ON BEHALF OF ITSELF AND EACH MEMBER OF THE PARENT GROUP) AND SPINCO (ON BEHALF OF ITSELF AND EACH MEMBER OF THE SPINCO GROUP) UNDERSTANDS AND AGREES THAT, EXCEPT AS EXPRESSLY SET FORTH HEREIN OR IN THE SEPARATION AGREEMENT, NO PARTY TO THIS AGREEMENT OR OTHERWISE, IS REPRESENTING OR WARRANTING IN ANY WAY AS TO THE ASSETS, BUSINESSES OR LIABILITIES TRANSFERRED OR ASSUMED AS CONTEMPLATED HEREBY OR THEREBY, AS TO ANY CONSENTS OR APPROVALS REQUIRED IN CONNECTION THEREWITH, AS TO THE VALUE OR FREEDOM FROM ANY SECURITY INTERESTS + + -8- + + + + + + + + OF, OR ANY OTHER MATTER CONCERNING, ANY ASSETS OF SUCH PARTY, OR AS TO THE ABSENCE OF ANY DEFENSES OR RIGHT OF SETOFF OR FREEDOM FROM COUNTERCLAIM WITH RESPECT TO ANY CLAIM OR OTHER ASSET, INCLUDING ANY ACCOUNTS RECEIVABLE, OF ANY PARTY, OR AS TO THE LEGAL SUFFICIENCY OF ANY ASSIGNMENT, DOCUMENT OR INSTRUMENT DELIVERED HEREUNDER TO CONVEY TITLE TO ANY ASSET OR THING OF VALUE UPON THE EXECUTION, DELIVERY AND FILING HEREOF OR THEREOF. EXCEPT AS MAY EXPRESSLY BE SET FORTH HEREIN OR IN THE SEPARATION AGREEMENT, ALL SUCH ASSETS ARE BEING TRANSFERRED ON AN "AS IS," "WHERE IS" BASIS AND THE RESPECTIVE TRANSFEREES SHALL BEAR THE ECONOMIC AND LEGAL RISKS THAT (I) ANY CONVEYANCE WILL PROVE TO BE INSUFFICIENT TO VEST IN THE TRANSFEREE GOOD AND MARKETABLE TITLE, FREE AND CLEAR OF ANY SECURITY INTEREST, AND (II) ANY NECESSARY APPROVALS OR NOTIFICATIONS ARE NOT OBTAINED OR MADE OR THAT ANY REQUIREMENTS OF LAWS OR JUDGMENTS ARE NOT COMPLIED WITH. 3. LICENSES 3.1 License Grant to Parent. Subject to the terms and conditions of this Agreement, SpinCo hereby grants to each individual member of the Parent Group, on behalf of itself and the other members of the SpinCo Group, and shall cause the other members of the SpinCo Group to grant to each individual member of the Parent Group, a non-exclusive, worldwide, perpetual, irrevocable, fully paid-up, royalty-free right and license, for use in the Parent Field, to (i) use, reproduce, distribute, display, perform, make Improvements and exploit the Licensed SpinCo IP, and (ii) make, have made, use, sell, offer to sell and import any goods and services incorporating, embodying or utilizing the Licensed SpinCo IP. The foregoing license shall be transferable or sublicensable by Parent Group solely to a Permitted Party, and, subject to the restrictions herein, with any sale or transfer of a Parent business that utilizes the Licensed SpinCo IP. Any such transfer or sublicense shall require the Permitted Party or, in the case of a sale or transfer of a Parent business, the transferee, to agree pursuant to a written agreement to maintain any trade secrets and Information included in the Licensed SpinCo IP in strict confidence. Such agreement shall prohibit any further sublicensing or transfer of rights by the Permitted Party, or, in the case of a sale or transfer of a Parent business, the transferee, or any use of the Licensed SpinCo IP outside the scope of the license granted to Parent herein. Parent shall remain responsible and liable for the Permitted Parties' exercise of any rights sublicensed hereunder and any use of the Licensed SpinCo IP by such Permitted Party outside of the permitted scope of the license. Parent shall enforce material breaches of the terms of any such sublicense of rights and notify SpinCo of any material violation thereof by a Permitted Party. If Parent enters an agreement to transfer the license granted to it under this Section 3.1 in connection with any sale or transfer of a Parent business, then SpinCo and members of the SpinCo Group shall be made third party beneficiaries under such transfer agreement to enforce breaches of the license. 3.2 License Grant to SpinCo. Subject to the terms and conditions of this Agreement, Parent hereby grants to each individual member of the SpinCo Group, on behalf of itself and the other members of the Parent Group, and shall cause the other members of the Parent Group to grant to each individual member of the SpinCo Group, a non-exclusive, worldwide, perpetual, irrevocable, fully paid-up, royalty-free right and license, solely for use in the SpinCo Field, to (i) + + -9- + + + + + + + + use, reproduce, distribute, display, perform, make improvements and exploit Intellectual Property owned or controlled by Parent or a member of the Parent Group and currently used in the SpinCo Business, and (ii) make, have made, use, sell, offer to sell and import any goods and services incorporating, embodying or utilizing such Intellectual Property currently used in the SpinCo Business. Such license shall be transferrable subject to the foregoing restriction with any sale or transfer of a SpinCo business that utilizes such Intellectual Property, but, for the avoidance of doubt, such license shall not otherwise be sublicensable or transferable. Any transfer by SpinCo or a member of its Group shall require the transferee to agree pursuant to a written agreement to maintain any trade secrets and Information included in the transferred Intellectual Property in strict confidence. Such agreement shall prohibit any further transfer of rights by such party or any use of the transferred Intellectual Property outside the scope of the license granted to SpinCo herein. If SpinCo enters an agreement to transfer the license granted to it under this Section 3.2 in connection with any sale or transfer of a SpinCo business, then Parent and members of the Parent Group shall be made third party beneficiaries under such transfer agreement to enforce breaches of the license. 3.3 Neither Party shall make a trade secret of the other Party public or otherwise destroy or impair the trade secret status of such trade secret without the express, advance, written consent of the other Party. Any agreement by which a trade secret is transferred or sublicensed shall be subject to the same confidentiality requirements as stated herein. 3.4 No Implied Rights. As between the Parties, all right, title and interest in and to all Licensed SpinCo IP shall be owned by SpinCo and the other members of the SpinCo Group, and Parent shall not acquire, and nothing contained herein shall be construed as conferring, by implication, estoppel or otherwise, any license or other right, title or interest in or to such Licensed SpinCo IP or any other Intellectual Property owned by SpinCo or of any of its Group, except for the license granted to Parent pursuant to Section 3.1. 3.5 Improvements. For the avoidance of doubt, as between the Parties, Parent shall own all right, title and interest in and to any and all Improvements authored, developed, invented, reduced to practice or otherwise created by Parent or any member of the Parent Group and all Intellectual Property rights therein and thereto. 3.6 Enforcement of Licensed IP. (a) Control of Enforcement IP Actions. Except as may otherwise be mutually agreed by the Parties, as between the Parties, SpinCo shall have the right to enforce the Licensed SpinCo IP as follows: (i) SpinCo shall have the right, but not the obligation (through itself and/or through its designee), to control the initiation, conduct and, subject to this Section 3.6, settlement or other resolution, at its cost and expense and in its sole discretion, of any enforcement claim, demand, action, suit or proceeding, whether civil or criminal or in law or in equity (each, an "IP Action") relating to the Licensed SpinCo IP, including the right to communicate any objection or other form of challenge to any Third Party; and + + -10- + + + + + + + + (ii) if SpinCo does not initiate such an IP Action itself or through its designee with respect to infringement, misappropriation or other violation of any Licensed SpinCo IP within the Parent Field by a Third Party within ninety (90) days after receipt of a written request from Parent to assume control over the enforcement of such violation of such Licensed SpinCo IP inside the Parent Field, then Parent shall have, with the prior consent of SpinCo, which will not be unreasonably withheld, the right, but not the obligation, to bring and to control such IP Action (provided that if Parent does not do so within thirty (30) days after the end of such original ninety (90) day-deadline, the right to initiate and control an IP Action shall revert back to SpinCo and shall again be subject to the terms set forth above). For avoidance of doubt, Parent shall not have any right to initiate any IP Action with respect to infringement, misappropriation or other violation of any Licensed SpinCo IP by a Third Party except within the Parent Field. (b) Enforcement Action Process. (i) The Party initiating or otherwise controlling any enforcement IP Action hereunder (the "Enforcing Party"), including the right to communicate any objection or other form of challenge to any Third Party, shall, as between the Parties, have the right to select counsel for any IP Action initiated by it or its designee pursuant to this Section 3.6. The Party that is not the Enforcing Party (the "Non-Enforcing Party") shall, to the extent it is a necessary party to the IP Action (or is otherwise reasonably requested by the enforcing Party), join the Enforcing Party (and/or, if applicable, its designee(s)) at the Enforcing Party's expense and agree to be represented by counsel for the Enforcing Party in any infringement or other IP Action commenced by the Enforcing Party (or its designee) and shall, upon request of the Enforcing Party, execute such documents and perform such other acts as may be reasonably required and requested by the Enforcing Party at the Enforcing Party's expense in connection with such enforcement IP Action; provided, that the Non-Enforcing Party shall have the right to engage, at its cost and expense, independent counsel of its choice to advise such Non-Enforcing Party in connection with such assistance to the Enforcing Party. (ii) The Non-Enforcing Party shall cooperate with, and provide reasonable assistance to, the Enforcing Party (and its designees) in connection with any IP Action brought by the Enforcing Party (or its designee) hereunder to the extent relating to the Licensed SpinCo IP, as may be reasonably requested by the Enforcing Party, including by providing access to relevant documents and other evidence (provided that the Parties shall enter into a joint defense agreement with respect to the common interest privilege protecting such communications in a form reasonably acceptable to the Parties) and making its employees available, subject to the other Party's reimbursement of any costs and expenses incurred by the Non-Enforcing Party in providing such assistance. The Enforcing Party shall keep the Non-Enforcing Party reasonably informed of any determinations or significant developments in any IP Action initiated by it pursuant to this Section 3.6 and, if the Non-Enforcing Party is SpinCo, then the Parent shall reasonably consult with the SpinCo and take into consideration input provided to Parent by SpinCo to the extent reasonable and provided in a timely manner. (c) Allocation of Costs and Recoveries. Unless otherwise mutually agreed by the Parties, (i) the costs and expenses relating to any enforcement IP Action commenced pursuant to this Section 3.6 shall be borne by the Enforcing Party; and (ii) any settlement payments or + + -11- + + + + + + + + damages or other monetary awards ("Recoveries") recovered in any IP Action by the Enforcing Party, itself or through its designee, pursuant to this Section 3.6, whether by judgment or settlement, shall be allocated in the following order: (A) to reimburse the Enforcing Party for any costs and expenses incurred by or on behalf of the Enforcing Party and/or its designee(s) with respect to such IP Action, (B) to reimburse the Non-Enforcing Party for any costs and expenses incurred by such Party with respect to such IP Action to the extent the Non-Enforcing Party participated in an IP Action pursuant to this Section 3.6 (and has not already been reimbursed by the Enforcing Party), including if it joins such IP Action (but excluding, for the avoidance of doubt, the cost of any counsel employed by the Non-Enforcing Party), and (C) the remainder shall be allocated to the Enforcing Party. (d) Settlement of Enforcement IP Action. The Enforcing Party shall not settle, or enter into a voluntary consent judgment with respect to, any enforcement IP Action under this Section 3.6 in a manner that would include any admissions of invalidity or unenforceability against the Non-Enforcing Party, or wrongdoing by the Non-Enforcing Party or any of its Group, or imposes any liability or payment or other obligation on the Non-Enforcing Party or any of its Group, without the Non-Enforcing Party's written consent (such consent not to be unreasonably withheld, conditioned or delayed) and in any event, without notifying the Non-Enforcing Party of any such proposed settlement or voluntary consent judgment. For the avoidance of doubt, and without limiting the foregoing, as between the Parties, the Enforcing Party shall have the sole and exclusive right to settle, or enter into a voluntary consent judgment with respect to, any enforcement IP Action under this Section 3.6. For the avoidance of doubt, Parent shall not settle or enter into a voluntary consent judgment or enter into any other agreement that shall in any way impair the rights of SpinCo with respect to its Intellectual Property outside the Parent Field without SpinCo's consent, which may be withheld in its sole option. 3.7 Bankruptcy. In the event that this Agreement is terminated or rejected by SpinCo, a member of the SpinCo Group or its receiver or trustee under applicable bankruptcy laws due to such Party's bankruptcy, then all rights and licenses granted under or pursuant to this Agreement by SpinCo to Parent are, and shall otherwise be deemed to be, for purposes of Section 365(n) of the U.S. Bankruptcy Code (the "Code") and any similar laws in any other country, licenses of rights to "intellectual property" as defined under the Code for purposes of Section 365(n). The Parties agree that all intellectual property rights licensed hereunder, including, without limitation, any patents or patent applications in any country of SpinCo or a member of SpinCo Group covered by the license grants under this Agreement, are part of the "intellectual property" as defined under the Code for purposes of Section 365(n) subject to the protections afforded the non-terminating Party under Section 365(n) of the Code, and any similar law or regulation in any other country. 3.8 Trademark Disclaimer. Neither Parent nor SpinCo nor any member of the Parent Group or SpinCo Group grants any right or license to the other to use any Parent Name or Parent Mark or SpinCo Name or SpinCo Mark in any manner including, without limitation, use in commerce as a trade name, trademark or other designation of origin. Notwithstanding the foregoing, it is understood that signage, letterhead, invoices, business cards, promotional materials and similar items may reference the Parent Name or Parent Mark "MeadWestvaco" and "MWV" in the same manner as used by SpinCo prior to the Effective Time, during a twelve-month phase out period as SpinCo replaces such Parent Name and Parent Mark with the SpinCo Name and SpinCo Mark. + + -12- + + + + + + + + 4. MUTUAL RELEASES; INDEMNIFICATION 4.1 Release of Pre-Distribution Claims. (a) SpinCo Release of Parent. Except as provided in Sections 4.1(c) and 4.1(d), effective as of the Effective Time, SpinCo does hereby, for itself and each other member of the SpinCo Group, and their respective successors and assigns, and, to the extent permitted by Law, all Persons who at any time prior to the Effective Time have been shareholders, directors, officers, agents or employees of any member of the SpinCo Group (in each case, in their respective capacities as such), remise, release and forever discharge (i) Parent and the members of the Parent Group, and their respective successors and assigns, and (ii) all Persons who at any time prior to the Effective Time are or have been shareholders, directors, officers, agents or employees of any member of the Parent Group (in each case, in their respective capacities as such), and their respective heirs, executors, administrators, successors and assigns, and (iii) all Persons who at any time prior to the Effective Time are or have been shareholders, directors, officers, agents or employees of a Transferred Entity and who are not, as of immediately following the Effective Time, directors, officers or employees of SpinCo or a member of the SpinCo Group, in each case from (A) all SpinCo IP Liabilities and (B) all Liabilities arising from or in connection with actions, inactions, events, omissions, conditions, facts or circumstances occurring or existing prior to the Effective Time (whether or not such Liabilities cease being contingent, mature, become known, are asserted or foreseen, or accrue, in each case before, at or after the Effective Time), in each case to the extent relating to, arising out of or resulting from the SpinCo IP Assets or the SpinCo IP Liabilities. (b) Parent Release of SpinCo. Except as provided in Sections 4.1(c) and 4.1(d), effective as of the Effective Time, Parent does hereby, for itself and each other member of the Parent Group, and their respective successors and assigns, and, to the extent permitted by Law, all Persons who at any time prior to the Effective Time have been shareholders, directors, officers, agents or employees of any member of the SpinCo Group (in each case, in their respective capacities as such), remise, release and forever discharge (i) SpinCo and the members of the SpinCo Group, and their respective successors and assigns, and (ii) all Persons who at any time prior to the Effective Time are or have been shareholders, directors, officers, agents or employees of any member of the SpinCo Group (in each case, in their respective capacities as such), and their respective heirs, executors, administrators, successors and assigns, and (iii) all Persons who at any time prior to the Effective Time are or have been shareholders, directors, officers, agents or employees of a Transferred Entity and who are not, as of immediately following the Effective Time, directors, officers or employees of SpinCo or a member of the SpinCo Group, in each case from (A) all Parent IP Liabilities and (B) all Liabilities arising from or in connection with actions, inactions, events, omissions, conditions, facts or circumstances occurring or existing prior to the Effective Time (whether or not such Liabilities cease being contingent, mature, become known, are asserted or foreseen, or accrue, in each case before, at or after the Effective Time), in each case to the extent relating to, arising out of or resulting from the Parent IP Assets or the Parent IP Liabilities. + + -13- + + + + + + + + (c) Obligations Not Affected. Nothing contained in Section 4.1(a) or Section 4.1(b) shall impair any right of any Person to enforce this Agreement. Nothing contained in Section 4.1(a) or Section 4.1(b) shall release any Person from: (i) any Liability, contingent or otherwise, assumed, transferred, assigned or allocated to the Group of which such Person is a member in accordance with, or any other Liability of any member of any Group under, this Agreement; (ii) any Liability that the Parties may have with respect to indemnification or contribution or other obligation pursuant to this Agreement for claims brought against the Parties by third Persons, which Liability shall be governed by the provisions of the Separation Agreement; or (iii) any Liability the release of which would result in the release of any Person other than a Person released pursuant to this Section 4.1. In addition, nothing contained in Section 4.1(a) or Section 4.1(b) shall release any member of the Parent Group from honoring its existing obligations to indemnify any director, officer or employee of SpinCo who was a director, officer or employee of any member of the Parent Group on or prior to the Effective Time, to the extent such director, officer or employee becomes a named defendant in any Action (as defined in the Separation Agreement) with respect to which such director, officer or employee was entitled to such indemnification pursuant to such existing obligations; it being understood that, if the underlying obligation giving rise to such Action is a SpinCo IP Liability, SpinCo shall indemnify Parent for such Liability (including Parent's costs to indemnify the director, officer or employee) in accordance with the provisions set forth in this Section 4. (d) No Claims. Neither Parent nor SpinCo shall make, and shall not permit any member of the Parent Group or SpinCo Group, as the case may be, to make, any claim or demand, or commence any Action asserting any claim or demand, including any claim of contribution or any indemnification, against the other Party or any other member of the Parent Group or SpinCo Group, as the case may be, or any other Person released pursuant to Section 4.1(a) or Section 4.1(b), with respect to any Liabilities released pursuant to Section 4.1(a) or Section 4.1(b). (e) Execution of Further Releases. At any time at or after the Effective Time, at the request of either Party, the other Party shall cause each member of its respective Group to execute and deliver releases reflecting the provisions of this Section 4.1. 4.2 Indemnification. Except as otherwise specifically set forth in this Agreement, to the fullest extent permitted by Law, SpinCo shall, and shall cause the other members of the SpinCo Group to, indemnify, defend and hold harmless the Parent Indemnitees from and against any and all Liabilities of the Parent Indemnitees relating to, arising out of or resulting from, directly or indirectly, (a) any SpinCo IP Liability, and (b) any failure of SpinCo, any other member of the SpinCo Group or any other Person to pay, perform or otherwise promptly discharge any SpinCo IP Liabilities in accordance with their terms, whether arising prior to, on or after the Effective Time. Except as otherwise specifically set forth in this Agreement, to the fullest extent permitted by Law, Parent shall, and shall cause the other members of the Parent + + -14- + + + + + + + + Group to, indemnify, defend and hold harmless the SpinCo Indemnitees from and against any and all Liabilities of the Parent Indemnitees relating to, arising out of or resulting from, directly or indirectly, (a) any Parent IP Liability, and (b) any failure of Parent, any other member of the Parent Group or any other Person to pay, perform or otherwise promptly discharge any Parent IP Liabilities in accordance with their terms, whether arising prior to, on or after the Effective Time. 4.3 Other Terms and Conditions Incorporated by Reference. Each Party acknowledges and agrees that with respect to the indemnification obligations set forth in Section 4.2 above, the terms and conditions of Section 4.4 (Indemnification Obligations Net of Insurance Proceeds and Other Amounts) through Section 4.10 (Survival of Indemnities) of the Separation Agreement are hereby incorporated by reference and shall apply to such indemnification obligations. 5. EXCHANGE OF INFORMATION; CONFIDENTIALITY 5.1 Agreement for Transfer and Exchange of Information. (a) Each of Parent and SpinCo, on behalf of itself and each member of its Group, acknowledges and agrees that, with respect to Information that it will own as a result of the Separation, each is entitled to physical possession of Information that exists in tangible and intangible form, including Software, Technology, or electronic data that may exist on hard-drives, or other electronic storage means ("Tangible/Intangible Information"). Subject to subsections (i)-(iii) of this Section 5.1(a), each Party agrees that prior to the date that is six (6) months after the Effective Time ("Delivery Date"), it will deliver possession of any Tangible/Intangible Information of the other Party that is in its possession or control to the other Party, without retaining any copies. (i) To the extent that any Tangible/Intangible Information of SpinCo is in the possession of Parent, is comingled, and separation is not commercially reasonable, Parent will make such Tangible/Intangible Information available to SpinCo to separate at its own expense. If SpinCo chooses to separate such Tangible/Intangible Information, then Parent will deliver possession to SpinCo of any such separated Tangible/Intangible Information within one (1) month after such separation, without retaining any copies. (ii) To the extent that any Tangible/Intangible Information of Parent is in the possession of SpinCo, is comingled, and separation is not commercially reasonable, SpinCo shall, at its option, (x) separate such comingled Tangible/Intangible Information at its own expense and deliver possession to Parent of any such separated Tangible/Intangible Information by the Delivery Date, without retaining any copies or (y) deliver possession of all of such comingled Tangible/Intangible Information to Parent by the Delivery Date, without retaining any copies. (iii) To the extent Parent is in possession of any comingled Tangible/Intangible Information, that is not separated by SpinCo pursuant to Section 5.1(a)(i), then Parent shall be entitled to maintain possession of such Tangible/Intangible Information, but (A) shall provide reasonable access to SpinCo upon SpinCo's request, including the opportunity to make extracts or copies, and (B) Parent shall not use or otherwise access that portion of the + + -15- + + + + + + + + comingled Tangible/Intangible Information that is the property of SpinCo, and shall retain such Tangible/Intangible Information in confidence as set forth in the Section 6.9 of the Separation Agreement. To the extent practical, SpinCo shall be entitled to redact or obscure any of SpinCo's Tangible/Intangible Information that is so retained by Parent. (b) Subject to the applicable confidentiality obligations of the Separation Agreement, each of Parent and SpinCo, on behalf of itself and each member of its Group, agrees to use commercially reasonable efforts to provide or make available, or cause to be provided or made available, to the other Party and the members of such other Party's Group, at any time before, on or after the Effective Time, as soon as reasonably practicable after written request therefor, any Information (or a copy thereof) in the possession or under the control of such Party or its Group which the requesting Party or its Group requests, in good faith in order to evaluate or use such Information for commercial purposes within the Parent Field or SpinCo Field, as appropriate, to the extent that (i) such Information relates to any SpinCo IP Asset or SpinCo IP Liability, if SpinCo is the requesting Party; (ii) such Information is necessary for Parent or any member of Parent Group to exercise its rights under the license granted in Section 3.1 of this Agreement, if Parent is the requesting Party, (iii) such Information is required by the requesting Party to comply with its obligations under this Agreement; or (iv) such Information is required by the requesting Party to comply with any obligation imposed by any Governmental Authority; provided, however, that, for any of the foregoing (i) - (iv), in the event that the Party to whom the request has been made determines that any such provision of Information could be detrimental to the Party providing the Information, violate any Law or agreement, or waive any privilege available under applicable Law, including any attorney-client privilege, then the Parties shall use commercially reasonable efforts to permit compliance with such obligations to the extent and in a manner that avoids any such harm or consequence. The Party providing Information pursuant to this Section 5.1(b) shall only be obligated to provide such Information in the form, condition and format in which it then exists, and in no event shall such Party be required to perform any improvement, modification, conversion, updating or reformatting of any such Information, and nothing in this Section 5.1 shall expand the obligations of a Party under Section 5.4. 5.2 Ownership of Information. The provision of any Information pursuant to Section 5.1 shall not affect the ownership of such Information (which shall be determined solely in accordance with the terms of this Agreement, the Separation Agreement and the Ancillary Agreements), or constitute a grant of rights in or to any such Information (such grant of rights, to the extent they exist, are expressly addressed elsewhere in this Agreement). For the avoidance of doubt, no Party shall be required to provide to the other Party any updates, improvements, or additions to any Intellectual Property that it owns after the Effective Time. 5.3 Compensation for Providing Information. The Party requesting Information pursuant to Section 5.1(b) above agrees to reimburse the other Party for the reasonable costs, if any, of creating, gathering, copying, transporting and otherwise complying with the request with respect to such Information (including any reasonable costs and expenses incurred in any review of Information for purposes of protecting the Privileged Information of the providing Party or in connection with the restoration of backup media for purposes of providing the requested Information). Except as may be otherwise specifically provided elsewhere in this Agreement, the Separation Agreement, + + -16- + + + + + + + + any other Ancillary Agreement or any other agreement between the Parties, such costs shall be computed in accordance with the providing Party's standard methodology and procedures. 5.4 Other Rights and Obligations. The rights and obligations of the Parties under Section 6.4 (Record Retention), Section 6.5 (Limitation of Liability), Section 6.6 (Other Agreements Providing for Exchange of Information), Section 6.7 (Production of Witnesses; Records; Cooperation), Section 6.8 (Privileged Matters), Section 6.9 (Confidentiality), and Section 6.10 (Protective Arrangements) of the Separation Agreement are hereby incorporated into this Section 5 as if fully set forth herein. To the extent (a) Parent, or any member of the Parent Group, receives from SpinCo, or any member of the SpinCo Group, or (b) SpinCo, or any member of the SpinCo Group receives from Parent, or any member of the Parent Group, any Information that is trade secret under applicable law, the five (5) year confidentiality period of Section 6.9(a) of the Separation Agreement with respect to such Information shall be extended until such time as the received Information is no longer trade secret. 6. FURTHER ASSURANCES AND ADDITIONAL COVENANTS 6.1 Further Assurances. (a) In addition to the actions specifically provided for elsewhere in this Agreement, each of the Parties shall use its commercially reasonable efforts, prior to, on and after the Effective Time, to take, or cause to be taken, all actions, and to do, or cause to be done, all things, reasonably necessary, proper or advisable under applicable Laws, regulations and agreements to consummate and make effective the transactions contemplated by this Agreement. (b) Without limiting the foregoing, prior to, on and after the Effective Time, each Party hereto shall cooperate with the other Party, and without any further consideration, but at the expense of the requesting Party, to execute and deliver, or use its reasonable best efforts to cause to be executed and delivered, all instruments, including instruments of conveyance, assignment and transfer, and to make all filings with, and to obtain all Approvals or Notifications of, any Governmental Authority or any other Person under any permit, license, agreement, indenture or other instrument (including any consents or Governmental Approvals), and to take all such other actions as such Party may reasonably be requested to take by the other Party from time to time, consistent with the terms of this Agreement, in order to effectuate the provisions and purposes of this Agreement and the transfers of the SpinCo IP Assets and the assignment and assumption of the SpinCo IP Liabilities and the other transactions contemplated hereby and thereby. (c) On or prior to the Effective Time, Parent and SpinCo in their respective capacities as direct and indirect shareholders of the members of their Groups, shall each ratify any actions which are reasonably necessary or desirable to be taken by Parent, SpinCo or any of the members of their respective Groups, as the case may be, to effectuate the transactions contemplated by this Agreement. 7. TERMINATION 7.1 Termination. This Agreement may be terminated at any time prior to the Effective Time by Parent, in its sole and absolute discretion, without the approval or consent of + + -17- + + + + + + + + any other Person, including SpinCo. After the Effective Time, this Agreement may not be terminated except by an agreement in writing signed by a duly authorized officer of each of the Parties. 7.2 Effect of Termination. In the event of any termination of this Agreement prior to the Effective Time, no Party (nor any of its directors, officers, employees or agents) shall have any Liability or further obligation to the other Party by reason of this Agreement. 8. MISCELLANEOUS 8.1 Counterparts; Entire Agreement; Corporate Power. (a) This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement, and shall become effective when one or more counterparts have been signed by each of the Parties and delivered to the other Party. (b) This Agreement and the Separation Agreement and the Exhibits, Schedules and appendices hereto and thereto contain the entire agreement between the Parties with respect to the subject matter hereof and supersede all previous agreements, negotiations, discussions, writings, understandings, commitments and conversations with respect to such subject matter, and there are no agreements or understandings between the Parties with respect to this Agreement. (c) Parent represents on behalf of itself and each other member of the Parent Group, and SpinCo represents on behalf of itself and each other member of the SpinCo Group, as follows: (i) each such Person has the requisite corporate or other power and authority and has taken all corporate or other action necessary in order to execute, deliver and perform this Agreement and to consummate the transactions contemplated hereby; and (ii) this Agreement has been duly executed and delivered by it and constitutes a valid and binding agreement of it enforceable in accordance with the terms thereof. (d) Each Party acknowledges that it and each other Party may execute this Agreement by facsimile, stamp or mechanical signature, and that delivery of an executed counterpart of a signature page to this Agreement (whether executed by manual, stamp or mechanical signature) by facsimile or by email in portable document format (PDF) shall be effective as delivery of such executed counterpart of this Agreement. Each Party expressly adopts and confirms each such facsimile, stamp or mechanical signature (regardless of whether delivered in person, by mail, by courier, by facsimile or by email in portable document format (PDF)) made in its respective name as if it were a manual signature delivered in person, agrees that it will not assert that any such signature or delivery is not adequate to bind such Party to the same extent as if it were signed manually and delivered in person and agrees that, at the reasonable request of the other Party at any time, it will as promptly as reasonably practicable cause this Agreement to be manually executed (any such execution to be as of the date of the initial date thereof) and delivered in person, by mail or by courier. + + -18- + + + + + + + + 8.2 Other Incorporated Miscellaneous Terms. The terms and conditions set forth in Section 10.2 (Governing Law) through Section 10.19 (Mutual Drafting) of the Separation Agreement are hereby incorporated into this Section 8 as if fully set forth herein. [Remainder of page intentionally left blank] + + -19- + + + + + + + + IN WITNESS WHEREOF, the Parties have caused this Intellectual Property Agreement to be executed by their duly authorized representatives. WESTROCK COMPANY By: /s/ Robert B. McIntosh Name: Robert B. McIntosh Title: Executive Vice President, General Counsel INGEVITY CORPORATION By: /s/ D. Michael Wilson Name: D. Michael Wilson Title: President and Chief Executive Officer \ No newline at end of file diff --git a/full_contract_txt/INKTOMICORP_06_08_1998-EX-10.14-SOFTWARE HOSTING AGREEMENT.txt b/full_contract_txt/INKTOMICORP_06_08_1998-EX-10.14-SOFTWARE HOSTING AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..da18fcc3f0909e89b7b30ccf4125494e9bae4d2f --- /dev/null +++ b/full_contract_txt/INKTOMICORP_06_08_1998-EX-10.14-SOFTWARE HOSTING AGREEMENT.txt @@ -0,0 +1,685 @@ +EXHIBIT 10.14 + + SOFTWARE HOSTING AGREEMENT This Software Hosting Agreement (the "Agreement") is entered into and effective as of the later of the two signature dates below (the "Effective Date") INKTOMI CORPORATION ("Inktomi"), a California corporation, 1900 South Norfolk Street, Suite 110, San Mateo, California 94403, and MICROSOFT CORPORATION ("Microsoft"), a Washington Corporation, One Microsoft Way, Redmond, Washington 98052-6399, with reference to the facts set forth in the Recitals below. + + Recitals + + A. Inktomi develops and markets computer software products, including without limitation a "search engine" software for searching and indexing information accessible through the Internet. + + B. Microsoft develops, manufactures, distributes and markets computer software products and services. + + C. Pursuant to that certain Software Development Agreement between the parties executed as of the Effective Date (the "Software Development Agreement"), Inktomi is customizing its Internet search engine software for Microsoft. + + D. Microsoft desires that Inktomi host and maintain the customized search engine on servers owned by Inktomi and located at a facility selected by Inktomi in California, and Inktomi desires to provide such hosting and maintenance services, on the terms and conditions contained herein. + + Agreement + +Accordingly, Inktomi and Microsoft hereby agree as follows: + + 1. Definitions. ----------- + + 1.1 "Ancillary Agreements" shall mean the following agreements between Inktomi and Microsoft, and all amended versions thereof or successor agreements thereto: (i) the Software Development Agreement of even date herewith; (ii) the Information Services Agreement of even date herewith; (iii) the Loan Agreement of even date herewith, and any and all "Promissory Notes" and/or "New Note" executed pursuant thereto; (iv) the Security Agreement of even date herewith; and (v) the Escrow Agreement of even date herewith. + +[*]=CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. + + 1.2 "Deployment, Hosting and Maintenance Specifications" shall mean the specifications for the Services attached to this Agreement as Exhibit A, as it may be amended from time to time by mutual agreement of the parties, which agreement shall not be unreasonably withheld by either party; if and when the Deployment, Hosting and Maintenance Specifications are modified in accordance with Section 2.2 below, the parties shall initial the new Deployment, Hosting and Maintenance Specifications or amendments to the existing Deployment, Hosting and Maintenance Specifications, and immediately following the last initialing such new Deployment, Hosting and Maintenance Specifications or amendments shall automatically be deemed to supercede or supplement (as the case may be) Exhibit A. + + 1.3 "Hosting Servers" shall mean those servers (including both the search engine cluster and the crawling cluster) and other hardware and third party software identified in the Deployment, Hosting and Maintenance Specifications that shall be used to host or service the Microsoft Search Engine and Usage Data. + + 1.4 "Internet" means any systems for distributing digital electronic content and information to end users via transmission, broadcast, public display, or other forms of delivery, whether direct or indirect, whether over telephone lines, cable television systems, optical fiber connections, cellular telephones, satellites, wireless broadcast, or other mode of transmission now known or subsequently developed. + + 1.5 "Launch Date" will mean that date on which the Microsoft Search Engine (other than any so-called "beta" version) is first generally available for use by the public. + + 1.6 "Microsoft Search Engine" will mean those versions of the Product developed to Microsoft specifications pursuant to said Software Development Agreement and used to generate search results for Microsoft (or for third parties requesting searches through Microsoft) under said Information Services Agreement. + + 1.7 "Microsoft Site" means the Microsoft Web Site(s) or Microsoft application(s) which, when accessed by an end user, will permit the end user to conduct a search of the Internet (or a portion thereof) using the Product; if + + + + + +Microsoft sublicenses its rights to use the search results generated by the Product hereunder (as permitted under the Information Services Agreement), then the site(s) of such Microsoft sublicensee(s) will be deemed to be Microsoft Site(s). + + 1.8 "Product" shall mean that certain customized search engine software developed by Inktomi for Microsoft pursuant to the Software Development Agreement, as more specifically described in said Software Development Agreement. + + 2 + + 1.9 "Security Measures" shall mean those procedures and precautions described in Exhibit A, for maintaining the security of the Product and Usage Data required under this Agreement. + + 1.10 "Services" shall mean the deployment, hosting and maintenance of the Product as described under this Agreement. + + 1.11 "Term" means the period of time commencing on the Effective Date and continuing thereafter indefinitely until this Agreement is terminated pursuant to Section 10 below. + + 1.12 "Usage Data" means such data as Inktomi may collect relating to the usage of (i) the Product by Microsoft and end users, and/or (ii) the Hosting Servers. + + 1.13 "Web" means the so-called World Wide Web, containing, inter alia, Web Pages written in hypertext markup language (HTML) and/or any similar successor technology. + + 1.14 "Web Indexing Data" means such data as Inktomi may collect relating to the documents crawled by its crawling software in connection with its operation of the Product. + + 1.15 "Web Page" means a document on the Web which may be viewed in its entirety without leaving the applicable distinct URL address. + + 1.16 "Web Site" means a collection of inter-related Web Pages. + + 2. Services. -------- + + 2.1 Inktomi shall deploy, host and maintain the Product and Hosting Servers in accordance with the Deployment, Hosting and Maintenance Specifications and the other terms and conditions contained in this Agreement. Inktomi agrees that the Services shall be performed in a professional manner and shall be of a high grade, nature, and quality. + + 2.2 The parties contemplate that there may be additions, deletions or other changes which may affect the Deployment, Hosting and Maintenance Specifications from time to time during the Term. Subject to Sections 2.2.1 through 2.2.3 below, any such additions, deletions or other changes to the Deployment, Hosting and Maintenance Specifications shall be mutually agreed to by Inktomi and Microsoft. Upon such mutual agreement (or, if mutual agreement is not required, upon notice of any such changes desired by Microsoft), Inktomi shall alter the Services in order to accommodate the revised Deployment, Hosting and Maintenance Specifications. + + 3 + + 2.2.1 Inktomi and Microsoft will confer not less frequently than monthly regarding the appropriate size (including hardware requirements) and capacity of the Hosting Server cluster, and Inktomi will supply all available and relevant usage data it may have; Microsoft will specify its capacity desires, and, notwithstanding anything contained herein to the contrary, any and all changes in capacity (including without limitation, number of Hosting Servers and connectivity capacity) requested by Microsoft shall be deemed acceptable to Inktomi, and Inktomi shall conform to such new capacity requirements in accordance with the timetable specified by Microsoft. + + 2.2.2 Inktomi will deploy the capacity requested by Microsoft hereunder within the timeframe specified in the Deployment, Hosting and Maintenance Specifications, or as otherwise may be agreed by Microsoft and Inktomi at such time. + + 2.2.3 At each monthly conference referred to above in Section 2.2.1, Inktomi will state its good faith estimate of the hardware and capacity needs for itself and its other customers. At its sole cost and expense, Inktomi promptly will provision for such hardware and capacity needs, and supply Microsoft with a list of the hardware provisioned and an officer's certification that Inktomi has made such provisions. Upon Microsoft's request (but not more often than twice in any calendar year), Inktomi will supply Microsoft with documentation evidencing such provisioning. + + 2.3 In accordance with its performance of the Services, Inktomi may collect and/or possess Web Indexing Data and Usage Data. + + 2.3.1 As between Inktomi and Microsoft, Inktomi will own all rights in and to Web Indexing Data. However, Inktomi will provide Microsoft with access to the Web Indexing Data solely for purposes of managing, marketing and promoting the Microsoft Search Engine. + + 2.3.2 All Usage Data shall be owned jointly by Microsoft and + + + + + +Inktomi, and Inktomi hereby irrevocably assigns to Microsoft an [*] interest therein. However, Inktomi shall not have the right to share any of such Usage Data with third parties (except that Inktomi may include Usage Data as part of "gross" undifferentiated data which it shares with other search engine customers but does not indicate as Usage Data related to the Microsoft Search Engine). + + 2.4 Inktomi shall provide to Microsoft all reports described in the Deployment, Hosting and Maintenance Specifications, in accordance with the terms therein. + + 4 + +[*]=CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. + + 2.5 Inktomi shall strictly adhere to all Security Measures in performing the Services, including without limitation securing the Usage Data, which it may possess or have under its control from time to time, from unauthorized access and modification. + + 2.6 Microsoft will have the right, in its sole and absolute discretion, to require Inktomi to devote a separate cluster of Hosting Servers to servicing Microsoft hereunder, which Servers would not be used to service any needs of Inktomi and/or any third parties. The Hosting Servers purchased by Inktomi at Microsoft's request hereunder would be re-deployed to such separate cluster. + + 2.6.1 If Microsoft notifies Inktomi in writing that it desires such a separate cluster, Microsoft shall reimburse Inktomi for all actual, direct expenses incurred and paid by Inktomi for equipment (other than Hosting Servers, which shall be purchased by Inktomi with financing loaned by Microsoft as set forth elsewhere herein) and services of necessary subcontractors (but not services of Inktomi employees) required to create and set up such separate cluster, but Microsoft's obligations to make any payments to Inktomi pursuant to clause (a) of Section 4.1 below will cease and terminate effective on the date such separate cluster becomes operational. + + 2.6.2 Nothing contained in this Agreement will be deemed to require Microsoft to deploy the Product in Hosting Servers owned by Inktomi, or to require Microsoft to continue to utilize Inktomi's services to host the Product at any time during the Term; without limitation, Microsoft will have the right to deploy the Product, in whole or in part, at other site(s) (whether owned by Microsoft or third parties) during the Term. If Microsoft elects to deploy and operate the Product at other sites, Inktomi will take all steps necessary or appropriate to facilitate such other deployment and operation; without limitation, Inktomi will move any and all Hosting Servers to any location(s) designated by Microsoft (costs of relocation, including shipping and insurance, to be borne exclusively by Microsoft), and Inktomi will provide training to Microsoft personnel and/or others designated by Microsoft to enable them to satisfactorily operate and maintain the Product and Hosting Servers wherever located. Notwithstanding anything to the contrary contained in this Agreement, Microsoft will not be obligated to make any payments to Inktomi pursuant to clauses (a), (e) and/or (f) of Section 4.1 below if Microsoft exercises its rights to move the Hosting Servers under this Section 2.6.2. + + 2.7 Inktomi will assign two (2) full-time Inktomi employees exclusively dedicated to maintenance duties hereunder. Such employees are identified in Exhibit D attached hereto; and their replacements shall be subject to Microsoft's prior written approval (which approval Microsoft will not unreasonably withhold). Notwithstanding the foregoing, if Microsoft and Inktomi mutually agree in writing, additional Inktomi employees may be required to be assigned to maintenance duties hereunder. + + 5 + + 2.8 Microsoft acknowledges that Inktomi has customized and provided, and will continue to customize and provide, its software and technology to other parties for use in connection with a variety of applications, including search engine applications. Except as may be expressly provided to the contrary elsewhere in this Agreement, nothing in this Agreement will be deemed to (i) limit or restrict Inktomi from customizing and providing its software and technology to other parties for any purpose, including in connection with search engine applications, or (ii) in any way affect the rights granted to such other parties. Microsoft further acknowledges that in addition to utilizing the Hosting Servers to host the Product, Inktomi may also use the Hosting Servers to service its own needs and the needs of other third parties, unless Microsoft elects to use a separate cluster in accordance with Section 2.6 above (it being understood that Inktomi will estimate the capacity for servicing the needs of itself and its other customers in good faith and provision accordingly, in accordance with Section 2.2). + + 3. Hosting Servers. --------------- + + 3.1 Inktomi shall own all new Hosting Servers purchased by Inktomi pursuant to Microsoft's request hereunder. + + 3.1.1 To the extent Inktomi is required to do so in order to meet Microsoft's capacity requests under the Deployment, Hosting and Maintenance Specifications (as the same may change from time to time), Inktomi shall purchase new Hosting Servers. Prior to purchasing any such new Hosting Servers, Inktomi will seek bids from third parties, copies of which Inktomi will provide + + + + + +to Microsoft, and Microsoft will have the right to approve all such purchases and the applicable purchase prices. Inktomi shall use commercially reasonable efforts to minimize the purchase prices of such new Hosting Servers, but in any event such purchase prices will not be more than any comparable equipment purchased by Inktomi during the same time frame. Inktomi will consult with Microsoft regarding the proposed purchase prices of all new Hosting Servers prior to purchasing the same, and if Microsoft is aware of a vendor who is willing to sell Hosting Servers to Inktomi at a lower purchase price than as proposed by Inktomi, Inktomi agrees to purchase the applicable new Hosting Servers from such vendor. + + 3.1.2 Notwithstanding Section 3.1.1 above, Inktomi shall have no obligation whatsoever to purchase any new Hosting Servers unless Microsoft loans Inktomi an amount equal to the purchase price thereof pursuant to the Loan Agreement between Inktomi and Microsoft of even date herewith (the "Loan Agreement"). + + 3.2 Microsoft acknowledges that, pursuant to Inktomi's contractual arrangement with its subcontractor, Exodus Communications, Inc. ("Exodus"), Inktomi will locate the Hosting Servers at the facilities of Exodus, and Exodus will provide power and Internet telecommunications services to the Hosting Servers. However, Microsoft will have no obligations or liabilities to Exodus, Inktomi will remain liable for providing all + + 6 + + Services to Microsoft notwithstanding its arrangement with Exodus, and Inktomi will [*] and [*] against from any and all [*] to [*] (in accordance with the procedures specified in Section [*] below). A copy of the contract(s) between Inktomi and Exodus is/are attached hereto as Exhibit [*], and Inktomi shall not modify said contract(s) or replace Exodus as its subcontractor for the applicable services (including without limitation by having Inktomi perform the Services directly) without Microsoft's prior written approval (which approval Microsoft agrees to not unreasonably withhold). Inktomi shall provide Exodus with a copy of the Security Measures applicable under this Agreement and will use commercially reasonable efforts to ensure that Exodus strictly adheres to all such Security Measures. + + 3.3 Subject to Microsoft's rights under Section 2.6.2 above and/or the Security Agreement between Inktomi and Microsoft of even date herewith, executed in accordance with the Loan Agreement, Microsoft shall not have any access to the Hosting Servers, except as follows: (i) Microsoft will have electronic read-only access to "real time" system data on the status of the usage, accessibility and performance of the Microsoft Search Engine (via software developed by Inktomi in consultation with Microsoft), and (ii) Microsoft will have the right, upon reasonable notice and during normal business hours, to have representatives escorted by Inktomi employees tour the premises where the Hosting Servers are located as necessary to ensure Microsoft's satisfaction with the operation of the physical plant and equipment. Microsoft agrees to comply with the Security Measures at all times when accessing the Hosting Servers as permitted hereunder. + + 4. Payment For Services. -------------------- + + 4.1 As full and complete compensation for the Services, Microsoft shall pay to Inktomi the following monthly fees: + + (a) beginning with the Launch Date, the sum of [*] [*] Dollars ($[*]) (attributable to the use during the Term of the Hosting Servers owned by Inktomi as of the Effective Date), provided that in no event will Microsoft be obligated to make more than [*] ([*]) monthly payments pursuant to this clause (a), and if the Term extends beyond [*] years after the Launch Date, this clause (a) will be deemed deleted from this Agreement effective on the [*] anniversary of the Launch Date notwithstanding anything to the contrary contained herein; + + (b) an amount equal to [*] ([*]) of the [*], [*], [*], [*] thereon, incurred by Inktomi to purchase each new Hosting Server required to service Microsoft's needs in accordance with Section 3.1 above (attributable to the use during the Term of such new Hosting Servers); such payments will commence with respect to each new Hosting Server at such time as Inktomi's repayment obligations begin with respect to such new Hosting + + 7 + +[*]=CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. + + Server pursuant to the Loan Agreement and the applicable Promissory Note. Notwithstanding section 4.2 below, such payments shall be due in immediately available funds on the first business day of each month. The parties acknowledge that the monthly fee under this clause (b) will increase throughout the Term if and to the extent that Microsoft's Hosting Server requirements increase, but, notwithstanding anything contained herein to the contrary, no amounts shall be payable under this clause (b) attributable to any Hosting Server which is more than [*] years old; + + (c) an amount equal to the [*] and [*] of the new Hosting Servers purchased by Inktomi pursuant to Section 3.1 above ([*] any amounts paid by Inktomi to Exodus for such services or attributable to the employees referred to in clause (f) below), payable if and when Inktomi pays such maintenance + + + + + +costs; Inktomi will use its commercially reasonable efforts to ensure that the annual hardware and software maintenance costs for each such new Hosting Server are not more than [*] percent ([*]%) of the purchase price of such New Hosting Server, and Microsoft will not be obligated to pay higher maintenance costs than such [*]% annual estimate without its prior written consent; + + (d) an amount equal to [*] Percent ([*]%) of the sum of the amounts payable under clauses (b) and (c) above (attributable as Inktomi's management fee for providing the Services); + + (e) an amount equal to Microsoft's [*] of the [*] [*] by Inktomi to Exodus in connection with the applicable Hosting Servers cluster, computed in accordance with Exhibit [*], [*] the [*] new Hosting Servers are [*] at Exodus; and + + (f) an amount equal to [*] per month per person identified in Section 2.7 above, [*] of the new Hosting Servers. + +In addition, if the number of ADH (as defined in the Software Development Agreement and Information Services Agreement) should exceed the capacity requested by Microsoft, or if Inktomi's usage of its estimated capacity requirements should exceed its estimates as communicated to Microsoft in accordance with Section 2.2.1 above, then Microsoft's applicable payment(s) hereunder will be [*] in [*] with the [*] set forth in Exhibit [*] hereto. + + 4.2 Except as set forth in Section 4.1(b) above, Inktomi shall supply to Microsoft written invoices for all amounts due under this Agreement, and payments will be due net [*] ([*]) days from Microsoft's receipt of such invoice. Inktomi shall bear sole responsibility for all expenses incurred in connection with the performance of the Services, unless otherwise set forth herein or agreed to in writing by Microsoft. + + 8 + +[*]=CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. + + 4.3 Inktomi shall keep true and accurate books and records, in accordance with Generally Accepted Accounting Principles ("GAAP"), relating to all costs and expenses for which Inktomi is entitled to charge Microsoft pursuant to Section 4.1 above, throughout the Term and for eighteen (18) additional months thereafter. Inktomi will permit Microsoft to have access to, and to make copies of, all such books and records for purposes of auditing and verifying such costs and expenses, provided that Microsoft shall give Inktomi reasonable notice prior to each requested audit and shall perform such audit during normal business hours at Inktomi's office(s) where such records are normally kept. If any Microsoft audit should determine that Inktomi overcharged Microsoft by an amount of [*]% or more for the period audited, then in addition to any and all other rights and remedies Microsoft may have under the circumstances, Microsoft may require Inktomi to reimburse it for all costs it incurred relating to such audit. + + 4.4 Taxes. ----- + + 4.4.1 All amounts to be paid by Microsoft to Inktomi herein are exclusive of any federal, state, local, municipal or other governmental taxes, including, without limitation, taxes based on, imposed on or measured by net or gross income or receipts, franchise taxes, taxes on doing business, capital stock taxes (including any minimum taxes and taxes measured by any item of tax preference), sales, use, excise, property, withholding or similar taxes, duties, levies, fees, excises or tariffs (all such taxes and other charges collectively "Taxes") now or hereafter imposed on Inktomi under applicable law (the "Inktomi Taxes"). Microsoft is not liable to Inktomi for any Taxes incurred in connection with this Agreement, unless they are (i) owed by Microsoft under applicable law solely as a result of entering into this Agreement (ii) are based solely upon the amounts payable under this Agreement, and (iii) are required to be collected from Microsoft by Inktomi under applicable law, provided, however, that solely with respect to sales tax or use tax payable to those taxing jurisdictions that impose sales or use taxes under applicable law upon the vendor, rather than the purchaser, clause (i) above shall be modified to provide "sales taxes or use taxes that are owed by Inktomi under applicable law solely as a result of entering into this Agreement and clause (iii) shall be modified to provide "are permitted to be collected from Microsoft by Inktomi under applicable law." (Such Taxes as are described in clauses (i), (ii) and (iii) above, the "Invoiced Taxes".) The Invoiced Taxes shall be stated separately as applicable on Inktomi's invoices and shall be remitted by Microsoft to Inktomi. Inktomi shall promptly provide to Microsoft official tax receipts indicating that such Invoiced Taxes have been collected by Inktomi. Microsoft may provide to Inktomi an exemption certificate acceptable to Inktomi and to the relevant taxing authority (including without limitation a resale certificate) in which case Inktomi shall not collect the Taxes covered by such certificate. Inktomi agrees to take such steps as are reasonably requested by Microsoft to minimize such Invoiced Taxes in accordance with all relevant laws and to reasonably cooperate with and assist Microsoft, at Microsoft's request, in challenging the validity of any Invoiced Taxes or other Taxes paid directly by Microsoft to the relevant taxing authority. Inktomi shall indemnify and hold Microsoft + + 9 + +[*]=CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO + + + + + +THE OMITTED PORTIONS. + + harmless from any Taxes, penalties, interest, or additions to tax arising from amounts paid by Microsoft to Inktomi under this Agreement that are asserted or assessed against Microsoft to the extent such amounts are related to Invoiced Taxes paid to Inktomi by Microsoft under this section. Other than the Invoiced Taxes, all Inktomi Taxes shall be the responsibility of Inktomi and may not be passed on to Microsoft. Inktomi takes full responsibility for all such Inktomi Taxes, including penalties, interest and other additions thereon and agrees to indemnify, defend and hold Microsoft harmless from any claims, causes of action, costs (including without limitation, reasonable attorneys' fees), penalties, interest charges and other liabilities of any nature whatsoever associated therewith. All Taxes that are imposed on Microsoft under applicable law (the "Microsoft Taxes") shall be the responsibility of Microsoft and may not be passed on to Inktomi. Microsoft takes full responsibility for all such Microsoft Taxes, including penalties, interest and other additions thereon and agrees to indemnify, defend and hold Inktomi harmless from any claims, causes of action, costs (including without limitation, reasonable attorneys' fees), penalties, interest charges and other liabilities of any nature whatsoever associated therewith. + + 4.4.2 In the event that Taxes are required to be withheld on payments made hereunder by any U.S. (state, local or federal) or foreign government, Microsoft may deduct such Taxes from the amount owed Inktomi and pay them to the appropriate taxing authority. Microsoft shall in turn promptly secure and deliver to Inktomi an official receipt for any Taxes withheld. Inktomi may provide to Microsoft an exemption certificate acceptable to Microsoft and to the relevant taxing authority (including without limitation a resale certificate) in which case Microsoft shall not collect the Taxes covered by such certificate. Microsoft agrees to take such steps as are reasonably requested by Inktomi to minimize such Taxes in accordance with all relevant laws and to reasonably cooperate with and assist Inktomi, at Inktomi's request, in challenging the validity of any such Taxes. + + 4.4.3 Inktomi agrees and acknowledges that it will be responsible for all of its federal and state taxes, withholding, social security, unemployment and other related taxes, insurance, and other benefits, and all salaries, benefits, and other costs of its employees. + + 5. Ownership of the Product. The parties respective rights in and to the ------------------------ Product will be as set forth in the Software Development Agreement and the Information Services Agreement of even date herewith, and nothing contained in this Agreement shall be deemed to modify such rights allocation. + + 6. Confidentiality. --------------- + + 6.1 The parties hereby agree that all terms and conditions of that certain Microsoft Corporation Non-Disclosure Agreement between them dated March 18, 1997, shall govern the disclosure of confidential and proprietary information made under this + + 10 + + Agreement. In this connection, the parties hereby agree that the terms of this Agreement shall be treated as confidential in accordance with the terms of said Non-Disclosure Agreement. + + 6.2 Without having first sought and obtained Microsoft's written approval (which Microsoft may withhold in its sole and absolute discretion), Inktomi shall not, directly or indirectly, (i) trade upon this transaction or any aspect of Inktomi's relationship with Microsoft, or (ii) otherwise deprecate Microsoft technology. + + 6.3 Inktomi shall use its reasonable commercial efforts to cause Exodus to execute a non-disclosure agreement with Microsoft which includes substantially similar restrictions as are contained herein. + + 6.4 Neither party will issue any press release or make any public announcement(s) relating in any way whatsoever to this Agreement or the relationship established by this Agreement without the express prior written consent of the other party. However, the parties acknowledge that this Agreement, or portions thereof, may be required under applicable law to be disclosed, as part of or an exhibit to a party's required public disclosure documents. If either party is advised by its legal counsel that such disclosure is required, it will notify the other in writing and the parties will jointly seek confidential treatment of this Agreement to the maximum extent reasonably possible, in documents approved by both parties and filed with the applicable governmental or regulatory authorities. Notwithstanding the foregoing, Microsoft and Inktomi will cooperate to create a mutually approved joint press release regarding the non-confidential aspects of this Agreement, which press release shall be issued by each party on the Launch Date; provided, however, that the precise timing of such press release shall be subject to the approval of Microsoft (in its sole and absolute discretion). + + 7. Representations and Warranties. ------------------------------ + + 7.1 Microsoft warrants and represents that it has the full power to enter into this Agreement and perform its obligations hereunder. + + 7.2 Inktomi warrants and represents that: + + + + + + 7.2.1 It has the full power to enter into this Agreement and perform its obligations hereunder, and Inktomi's performance of such obligations will not violate any terms and conditions of other agreements entered into by Inktomi with [*] ([*]); + + 7.2.2 Inktomi's [*] and [*] of the Product shall [*] to the [*] and [*], 11 + +[*]=CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. + + provided, however, that a [*] and [*] to so [*] will not be [*] to be a [*] hereunder; and + + 7.2.3 Notwithstanding any [*] to [*] hereunder, or to any other [*], Inktomi shall remain [*] for the [*] hereunder in accordance with [*]. + + 8. Indemnification. --------------- + + 8.1 Each party shall, at the expense of such party (the "Indemnifying Party") and at the request of the other party (the "Indemnified Party"), defend [*] party claim or action brought against the Indemnified Party, and/or the [*] and [*] which, [*], (i) would constitute a [*] of [*], [*] or [*] made by the Indemnifying Party under this Agreement; or (ii) would [*] of the Indemnifying Party's [*]; and the Indemnifying Party will [*] and [*] the Indemnified Party [*] and [*], [*] and [*] incurred by the Indemnified Party, including but [*] to [*] of [*] and [*], that are attributable to such claim. The Indemnified Party shall: (x) provide the Indemnifying Party reasonably prompt notice in writing of any such claim or action and [*] the Indemnifying Party, through counsel [*] to Microsoft and Inktomi, to [*] and [*] such claim or action; and (y) provide the Indemnifying Party [*], [*] and [*] at the [*] Party's [*], to [*] the Indemnifying Party to [*] such claim or action. The Indemnifying Party will [*] for [*] made by the [*] Party without the [*] Party's [*], which [*] will [*]. + + 8.2 The Indemnified Party shall have the right to employ separate counsel and participate in the defense of any claim or action. The Indemnifying Party shall reimburse the Indemnified Party upon demand for any payments made or loss suffered by it at any time after the date hereof, based upon the judgment of any court of competent jurisdiction or pursuant to a bona fide compromise or settlement of claims, demands, or actions, in respect to any damages related to any claim or action under this Section 8. + + 8.3 The Indemnifying Party may [*] any claim or action under this Section 8 on the Indemnified Party's behalf [*] the [*], which [*] will [*]. In the event Microsoft and Inktomi agree to settle a claim or action, the each party agrees not to publicize the settlement without first obtaining the other party's written permission, which permission will not be unreasonably withheld. + + 12 + +[*]=CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. + + 9. LIMITATION OF LIABILITY. EXCEPT FOR [*] CAUSED BY A [*] OF ----------------------- SECTION [*], NEITHER PARTY SHALL BE [*] (IN [*] WITH OR PURSUANT TO THIS AGREEMENT AND THE ANCILLARY AGREEMENTS TAKEN AS A WHOLE) FOR ANY [*], [*] OR [*] [*] (INCLUDING [*]) [*] OF [*] ([*]) [*] OF THE [*] OF [*], EVEN IF [*] HAD BEEN [*] OF THE [*] OF SUCH [*]. 10. Termination and Other Remedies. ------------------------------ + + 10.1 Inktomi may terminate this Agreement without cause upon one year's prior written notice, provided that such notice may not be given prior to the second anniversary of the Launch Date. + + 10.2 Microsoft may terminate this Agreement at any time without cause upon [*] ([*]) days prior written notice. Upon receipt of such notice, Inktomi will discontinue all work hereunder. If Microsoft terminates this Agreement without cause pursuant to this Section 10.2, then Microsoft will pay for all services provided by Inktomi up until the date of termination under this Section 10.2. Notwithstanding anything contained herein to the contrary, should Microsoft exercise its termination right pursuant to this Section 10.2, then Inktomi will have the right to elect, in writing within fifteen (15) days after receipt of Microsoft's notice of termination hereunder, either one of the following two options for a early termination penalty: + + (a) Inktomi may require Microsoft to pay to Inktomi, in [*] immediately following the effective termination date, an amount equal to [*] ([*]) of all outstanding principal, interest and other amounts owed or owing to Microsoft by Inktomi on the date of termination under the Loan Agreement (and outstanding Promissory Notes issued thereunder); or + + (b) Inktomi may deliver that portion of the Collateral (as defined in the Loan Agreement) which was purchased with Advances evidenced by the then-outstanding Promissory Notes (as defined in the Loan Agreement) (the "Returned Collateral") to Microsoft, and assign all right, title and interest in + + + + + +and to said Returned Collateral to Microsoft, and promptly upon such delivery and assignment Inktomi may require Microsoft to pay to Inktomi, in [*] immediately following the effective date of termination, an amount equal to [*] ([*]) of all outstanding principal, interest and other amounts owed or owing to Microsoft by Inktomi on the date of termination under the Loan Agreement (and outstanding Promissory Notes issued thereunder); provided, however, that the following conditions must be satisfied for Inktomi to be entitled to elect this alternative (b)- + + 13 + +[*]=CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. + + (i) Inktomi then owns all of the Returned Collateral and has [*] the Returned Collateral [*], and [*] other than Lender; + + (ii) Inktomi obtains any [*] reasonably required by Microsoft from Inktomi's [*]; + + (iii) the Returned Collateral is returned in good condition and repair, without any waste or unusual or unreasonable depreciation of Returned Collateral; + + (iv) Inktomi has not committed any act for which any portion of the Returned Collateral might be confiscated by any governmental or private entity; + + (v) Inktomi has paid all taxes, assessments or similar obligations affecting the Returned Collateral that are then due or have then accrued; + + (vi) Inktomi [*] to Microsoft [*] that [*] of the [*] is [*] and [*]; and + + (vii) Inktomi, [*], arranges to deliver the Returned Collateral in a manner and to a location designated by Microsoft. + +In the event Inktomi elects this alternative (b), the Security Agreement executed in connection with the Loan Agreement shall terminate on the business day immediately following the date of delivery and assignment of all the Returned Collateral to Microsoft. + + 10.3 Subject to Section 12.9 below, in the event the Microsoft Search Engine is inaccessible to Microsoft, due to a problem other than one with Microsoft's servers or the telecommunication line from Microsoft to the Hosting Servers, for twenty-four (24) consecutive hours, or for forty-eight (48) hours or more in any seventy-two (72) hour period, or for seventy-two (72) hours or more in any one week period, and such inaccessibility is due to any reason other than Microsoft's breach of its obligations under this Agreement, then Microsoft may suspend performance and/or terminate this Agreement immediately with no further obligation. + + 10.4 Microsoft may suspend performance and/or terminate this Agreement immediately upon written notice at any time if: + + (a) Inktomi is in [*] of this Agreement (excluding Section [*]) and fails to cure that breach within [*] ([*]) days after written notice thereof; or + + (b) Inktomi is in material breach of Section [*]; or + + 14 + +[*]=CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. + + (c) Inktomi becomes insolvent or makes any assignment for the benefit of creditors or similar transfer evidencing insolvency; or suffers or permits the commencement of any form of insolvency or receivership proceeding; or has any petition under any bankruptcy law filed against it, which petition is not dismissed within sixty (60) days of such filing; or has a trustee or receiver appointed for its business or assets or any part thereof. + + 10.5 Inktomi may suspend performance and/or terminate this Agreement immediately upon written notice at any time if: + + (a) Microsoft is in [*] of this Agreement (excluding Section [*]) and fails to cure that breach within [*] ([*]) days after written notice thereof; or + + (b) Microsoft is in material breach of Section [*]; or + + (c) Microsoft becomes insolvent or makes any assignment for the benefit of creditors or similar transfer evidencing insolvency; or suffers or permits the commencement of any form of insolvency or receivership proceeding; or has any petition under any bankruptcy law filed against it, which petition is not dismissed within sixty (60) days of such filing; or has a + + + + + +trustee or receiver appointed for its business or assets or any part thereof. + + 10.6 If Inktomi is in material breach of this Agreement, then Microsoft will have the right to withhold payment of amounts otherwise owed by Microsoft to Inktomi pursuant to this and/or any Ancillary Agreement; provided, however, that Microsoft shall give Inktomi not less than [*] ([*]) days to cure such breach prior withholding any such payments. + + 10.7 A breach of this Agreement by either party will also constitute a breach by such party of each and every Ancillary Agreement; and a breach by either party of any Ancillary Agreement will also consitute a breach of this Agreement by such party. + + 10.8 In the event of termination or expiration of this Agreement for any reason, Sections 1, 2.3, 4.3, 4.4, 5, 6.1, 7, 8, 9 and 12 shall survive termination. Except as otherwise expressly provided in this Agreement, Inktomi shall turn over to Microsoft all work in progress, software, and any other materials provided by Microsoft to Inktomi under this Agreement promptly following termination or expiration. Neither party shall be liable to the other for damages of any sort resulting solely from such party terminating this Agreement in accordance with its terms. + + 15 + +[*]=CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. + + 10.9 The rights and remedies given to the parties under this Section 10 are in addition to any other rights and/or remedies that the parties may have under the circumstances, all of which are expressly reserved. + + 11. International Deployment, Hosting & Maintenance Obligations of -------------------------------------------------------------- Inktomi. Microsoft will have the right to require Inktomi to purchase new - ------- Hosting Servers, and/or to arrange for and perform such deployment, hosting and maintenance services, as Microsoft may determine in connection with international versions of the Product throughout the Term, on the same terms and conditions as applicable hereunder with respect to the original version of the Product directed toward the U.S. market, including without limitation requiring Inktomi to establish, deploy and maintain a cluster of Hosting Servers anywhere in the world (including [*]) designated by Microsoft. If and when Microsoft requires such undertakings by Inktomi, it will so notify Inktomi in writing, whereupon Inktomi will perform such undertakings as requested as expeditiously as reasonably possible. + + 12. Miscellany. ---------- + + 12.1 Neither party shall represent itself as the agent or legal representative of the other for any purpose whatsoever, and neither party shall have the right to create or assume for the other any obligation of any kind. This Agreement shall not create or be deemed to create an agency, partnership, franchise, employment relationship or joint venture between the parties. Each party's employees who perform services related to this Agreement shall remain under the exclusive direction and control of their respective employer and shall receive such salaries, compensation and benefits as their respective employer may from time to time determine. Each party shall have full and sole responsibility for its employees who perform any service related to this Agreement with regard to compliance with all applicable laws, rules and regulations governing such party relating to employment, labor, wages, benefits, taxes and other matters affecting its employees. + + 12.2 Any notice required or permitted to be given under this Agreement shall be made in writing and shall be deemed to have been given or made if it is in writing and is: (i) delivered in person, (ii) sent by same day or overnight courier, (iii) mailed by certified or registered mail, return receipt requested, postage prepaid, addressed to the party at its address set forth below or at such other address as such party may subsequently furnish to the other party by notice hereunder, or (iv) delivered by facsimile, the transmittal of which shall be confirmed by a telephone call to the other party and by dispatch of a confirming copy of the transmittal by registered or certified mail, postage prepaid. Notices will be deemed effective on the date of delivery in the case of personal delivery, or three (3) business days after mailing, or on the date of dispatch in the case of notification by facsimile (assuming confirmation of transmission). The parties' addresses for purposes of notice shall be as set forth above, provided that all notices to Inktomi shall be sent to the + + 16 + +[*]=CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. + + attention of General Counsel; and all notices to Microsoft shall be sent to the attention of Shirish Nadkarni, with a copy to: Law & Corporate Affairs, U.S. Legal. + + 12.3 This Agreement shall be construed, enforced, performed and in all respects governed by and in accordance with the laws in the State of Washington. In any action or suit to enforce any right or remedy under this + + + + + +Agreement the prevailing party shall be entitled to recover its reasonable attorneys' fees and costs. + + 12.4 In the event any provision of this Agreement is rendered null, void or otherwise ineffective, then (i) the parties agree to negotiate in good faith an acceptable alternative provision which reflects as closely as possible the intent of the unenforceable provision and (ii) notwithstanding, and regardless of whether the parties reach agreement after the good faith negotiations described in clause (i) immediately above, the validity, legality and enforceability of the remaining provisions of this Agreement shall not in any way be affected or impaired thereby and shall remain in full force and effect. Section and all other headings used herein are provided for convenience only and are not to be given any legal effect or considered in interpreting any provision of this Agreement. No provision of this Agreement shall be interpreted against any party because such party or its legal representative drafted such provision. + + 12.5 Except as expressly permitted hereunder or in Exhibit F hereto, neither party may transfer, assign or sublicense this Agreement, or any rights or obligations hereunder, whether by contract or by operation of law, except with the express written consent of the other party, and any attempted transfer, assignment or sublicense by a party in violation of this Section shall be void. For purposes of this Agreement, an "transfer" under this Section shall be deemed to include, without limitation, the following: (a) a merger or any other combination of an entity with another party (other than a reincorporation of Inktomi from the State of California to the State of Delaware), whether or not the entity is the surviving entity; (b) any transaction or series of transactions whereby a third party acquires direct or indirect power to control the management and policies of an entity, whether through the acquisition of voting securities, by contract, or otherwise; (c) in the case of Inktomi, the sale or other transfer of Inktomi's search engine business or any other substantial portion of Inktomi's assets (whether in a single transaction or series of transactions), or (d) the transfer of any rights or obligations in the course of a liquidation or other similar reorganization of an entity (other than a reincorporation of Inktomi from the State of California to the State of Delaware). Neither party will unreasonably withhold or delay its consent to a requested transfer, assignment or sublicense. Subject to the provisions of this Section, this Agreement shall be binding upon and inure to the benefit of each party and their respective successors and assigns. + + 12.6 All rights and obligations of the parties hereunder are personal to them. Except as otherwise specifically stated herein, this Agreement is not intended to benefit, nor shall it be deemed to give rise to, any rights in any third party. + + 17 + + 12.7 Each party shall be responsible for compliance with all applicable laws, rules and regulations, if any, related to the performance of its obligations under this Agreement. + + 12.8 No waiver of any breach of any provision of this Agreement shall constitute a waiver of any prior, concurrent or subsequent breach of the same or any other provisions hereof or thereof, and no waiver shall be effective unless made in writing and signed by an authorized representative of the waiving party. + + 12.9 Neither party shall be liable hereunder by reason of any failure or delay in the performance of its obligations hereunder during any event of force majeure. + + 12.10 The parties acknowledge that there may be instances during the Term when, notwithstanding the Non-Disclosure Agreement referred to in Section 6.1 above, Inktomi will not wish to disclose or have Microsoft become aware (through inspection or otherwise) of certain confidential and proprietary information of Inktomi relating to its business and/or technology. In those instances, the parties agree to work together in a spirit of cooperation to work around such disclosure so that Inktomi is able to perform the Services to Microsoft's reasonable satisfaction and otherwise discharge its obligations under this Agreement without making such disclosure. + + 12.11 This Agreement, along with the Ancillary Agreements, together contain the entire agreement of the parties with respect to the premises, and may not be modified or amended except by a written instrument executed by the party sought to be charged or bound thereby. + + 13. Insurance. Inktomi will maintain insurance (including but not limited --------- to liability and property insurance covering the Hosting Servers and Inktomi's operation thereof) in accordance with the requirements set forth in the Software Development Agreement and Loan Agreement between the parties of even date herewith. Executed as of the Effective Date on the signature dates below. + +INKTOMI CORPORATION MICROSOFT CORPORATION /s/ DAVID C. PETERSCHMIDT /s/ LAURA JENNINGS By: _________________________ By: _________________________ David C. Peterschmidt, CEO Laura Jennings ______________________________ ______________________________ (printed name and title) (printed name and title) + + + + + + July 24 7/27 Date: ____________________, 1997 Date: ____________________, 1997 + + 18 + + EXHIBIT A + + DEPLOYMENT, HOSTING AND MAINTENANCE SPECIFICATIONS AND SECURITY MEASURES (32 pages follow) + + EXHIBIT A --------- + +YUKON REQUIREMENTS FOR THE INKTOMI SEARCH SERVICE MICROSOFT CONFIDENTIAL - -------------------------------------------------------------------------------- + +VERSION: 1.0 STABILITY: High FILENAME: Yukon requirements for Inktomi search service.doc DATE: 07/07/97 3:57 PM AUTHOR(S): William Jones wjones + + Page i of 32 + + Table of Contents + +[*] + + Page ii of 32 + +[*]=CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. + + 1. OVERVIEW ================================================================================ + +The goal of this document is to provide a reasonably complete list of Yukon requirements for the Inktomi search service. Note that a number of the requirements in this document are met by the existing search service but are included anyway for the sake of completeness. + +The Section 2 lists all requirements according to area (Performance and Scalability, Reliability and Fault Tolerance, ...) together with information on Target Release and Due Date as defined below. The Appendix (Section 7) follows a similar organization and provides more detail on the requirements.. + +[*] + + Page 1 of 32 + +[*]=CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. + + [*] + + Page 2 of 32 + +[*]=CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. + + [*] + + Page 3 of 32 + +[*]=CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. + + + + + + [*] + + Page 4 of 32 + +[*]=CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. + + [*] + + Page 5 of 32 + +[*]=CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. + + [*] + + Page 6 of 32 + +[*]=CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. + + [*] + + Page 7 of 32 + +[*]=CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. + + [*] + + Page 8 of 32 + +[*]=CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. + + + +[*] + + Page 9 of 32 + +[*]=CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. + + [*] + + Page 10 of 32 + +[*]=CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. + + [*] + + Page 11 of 32 + +[*]=CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. + + + + + + + +[*] + + Page 12 of 32 + +[*]=CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. + + [*] + + Page 13 of 32 + +[*]=CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. + + [*] + + Page 14 of 32 + +[*]=CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. + + [*] + + Page 15 of 32 + +[*]=CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. + + + +[*] + + Page 16 of 32 + +[*]=CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. + + [*] + + Page 17 of 32 + +[*]=CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. + + [*] + + Page 18 of 32 + +[*]=CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. + + [*] + + Page 19 of 32 + +[*]=CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. + + [*] + + + + + + Page 20 of 32 + +[*]=CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. + + [*] + + Page 21 of 32 + +[*]=CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. + + [*] + + Page 22 of 32 + +[*]=CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. + + [*] + + Page 23 of 32 + +[*]=CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. + + [*] + + Page 24 of 32 + +[*]=CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. + + [*] + + Page 25 of 32 + +[*]=CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. + + [*] + + Page 26 of 32 + +[*]=CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. + + [*] + + Page 27 of 32 + +[*]=CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. + + [*] + + Page 28 of 32 + + + + + +[*]=CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. + + [*] + + Page 29 of 32 + +[*]=CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. + + [*] + + Page 30 of 32 + +[*]=CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. + + EXHIBIT B + + CONTRACT(S) BETWEEN INKTOMI AND EXODUS + + EXHIBIT C + + PRO-RATION METHODOLOGY + +ALLOCATION OF EXODUS OPERATING COSTS + +Exodus charges a monthly fee for facility space, fire suppression, air conditioning, security, electricity, support services and Internet connectivity. Inktomi is obliged to contract for this capacity in advance. The connectivity is currently itemized and charged at a current rate of [*]. + +[*] will be according to the [*] provisioned. + +Example: [*] - [*] per day, [*] per day [*]. [*] of Exodus charges, [*] of Exodus charges [*]. + +[*] will be charged to [*] only for their share of [*] + +Current estimate is that [*]; this would be [*]. + +[*]=CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. + + EXHIBIT D + + INKTOMI MAINTENANCE EMPLOYEES + + [*] and [*] + +[*]=CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. + + EXHIBIT E + + OVER-UTILIZATION ADJUSTMENT + +In the event that one party under-provisions its portion of the shared Inktomi hosting cluster such that its [*] are [*] by the [*], there will be a charge on a [*] levied against the under-provisioned party. + +If [*] for a [*] exceeds its agreed capacity provisioning (as determined in accordance with Sections 2.2 and 2.8, then Microsoft's [*] will be [*] ([*] if the [*] is by [*], or [*] if such [*] is by [*]) in accordance with the following computation: [*] the [*] ("[*]") times the [*] of the provisioned capacity ("[*]"). Note that the over-utilization could apply to [*] in any [*]. + +[*] will be calculated each month by taking the [*] of the Inktomi [*] without regard to [*] ([*]) [*] ([*]) [*] by the agreed total [*] provisioned. + +[*] will be calculated for each party each month by [*] the number of [*] ([*] the [*] in the [*]) from the number of [*] for the [*]. + + + + + +Example: + + Assumptions: 1. Microsoft provisioned capacity is [*] 2. Inktomi provisioned capacity is [*] 3. [*] in [*] is $[*] 4. [*] is [*] for a [*] 5. [*] is [*] for that [*] + + [*] = $[*] = $[*] + + [*] = [*] = [*] + + Over-Utilization Adjustment = [*] = $[*] [*] in such [*] payable by [*] + +Notwithstanding anything contained herein to the contrary, if a party shall have [*] its provisioned capacity by [*] in any month, such party shall be deemed [*] for its [*] during such month as soon as possible. + +[*]=CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. + + EXHIBIT F --------- + + Transfer by Inktomi ------------------- + +If Inktomi requests Microsoft's consent to a transfer as described in clause (a) of Section 12.5 of this Software Hosting Agreement to which this Exhibit F is appended, and Microsoft reasonably withholds its consent to such transfer (an "Unconsented Transfer"), then Inktomi will nevertheless have the right to transfer this Agreement in connection with its proposed Unconsented Transfer subject to the following conditions precedent to the Unconsented Transfer: + +(i) Inktomi, at its sole cost and expense, and without any financing supplied by Microsoft, will create a separate cluster of Hosting Servers for Microsoft required to service Microsoft's reasonably anticipated needs for a period of twelve months after the commencement of operation of such new and relocated cluster [provided however that Microsoft will purchase, or fund (in accordance with the Loan Agreement) Inktomi's of, (whichever Microsoft elects) any new hosting servers beyond the Hosting Servers purchased by Inktomi under said Software Hosting Agreement necessary to service Microsoft's reasonably anticipated needs as set forth above]; + +(ii) Inktomi will relocate, at its sole cost and expense (including, without limitation, indemnifying Microsoft and holding it harmless against any and all Taxes that arise as a direct or indirect result of the relocation of the Hosting Servers), all Hosting Servers referred to in clause (i) to a location designated by Microsoft, in its sole discretion; + +(iii) Inktomi, at its sole cost and expense, will provide training to Microsoft personnel to the extent requested by Microsoft, to enable such personnel to use and maintain the Microsoft Search Engine, and to create enhancements thereto, with reasonable competence (all as determined by Microsoft in its sole discretion); + +(iv) Inktomi will grant to Microsoft an irrevocable, non-exclusive, royalty-free license to use the Product (and all required underlying Inktomi Technology) solely in connection with Microsoft's operation of the Microsoft Search Engine (which license shall include the right to create enhancements and other derivative works based thereon for use in conjunction therewith) for such period as Microsoft may require to transition its search engine services to non-Inktomi technology (the "Transition Period"), and Inktomi will waive all royalties otherwise payable pursuant to the Software Development Agreement and/or the Information Services Agreement between the parties of even date herewith; for the purposes of this clause (iv), the Transition Period will commence at such time as Microsoft assumes control over said separate cluster and begins itself operating the Microsoft Search Engine, and will continue thereafter for eighteen months (18) or until the + + 24 + + termination of the Software Development Agreement and Information Services Agreement (whichever is longer); + +(v) Inktomi will direct the Escrow Agent to release to Microsoft all Confidential Materials held by the Escrow Agent, subject to Microsoft's agreement to use such Confidential Materials only in connection with its licensed rights under clause (iv) above; + +(vi) Inktomi will agree to reimburse Microsoft for all reasonable costs incurred by Microsoft in transitioning its search engine to non-Inktomi technology (whether created by Microsoft or by a third party); and + +(vii) Inktomi will cause the applicable proposed transferee of this Agreement to assume, jointly and severally with Inktomi, all of Inktomi's obligations hereunder. + +Microsoft will cooperate with Inktomi and use its reasonable best efforts so as + + + + + +to enable Inktomi to satisfy the foregoing conditions precedent in a timely manner. Upon satisfaction of the foregoing conditions precedent, this Software Hosting Agreement shall be deemed terminated pursuant to Section 10.1. Upon expiration of the Transition Period, all rights granted to Microsoft to use the Product (other than Microsoft Technology, Joint Derivative Technology and the Microsoft Derivative Technology) and/or any Inktomi Technology under the transitional license referred to in clause (iv) or otherwise shall cease, and Microsoft shall immediately return to Inktomi all Confidential Materials (and all copies thereof), provided however that, notwithstanding any provision of the Ancillary Agreements to the contrary, the undertaking by Inktomi to indemnify Microsoft and hold it harmless against Taxes as provided in clause (ii) above shall survive any such terminations. + + 25 \ No newline at end of file diff --git a/full_contract_txt/INNOVIVA,INC_08_07_2014-EX-10.1-COLLABORATION AGREEMENT.txt b/full_contract_txt/INNOVIVA,INC_08_07_2014-EX-10.1-COLLABORATION AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..eeb65754c14caebc51398348703da44e2fcac3c0 --- /dev/null +++ b/full_contract_txt/INNOVIVA,INC_08_07_2014-EX-10.1-COLLABORATION AGREEMENT.txt @@ -0,0 +1,545 @@ +Exhibit 10.1 COLLABORATION AGREEMENT by and between THERAVANCE, INC. and GLAXO GROUP LIMITED Dated: November 14, 2002 + + + + + + TABLE OF CONTENTS ARTICLE 1 DEFINITIONS 1 ARTICLE 2 RIGHTS AND OBLIGATIONS 11 2.1 License Grants from Theravance to GSK 11 2.1.1 Development License 11 2.1.2 Commercialization License 11 2.1.3 Manufacturing License 11 2.2 Sublicensing and Subcontracting 11 2.3 Trademarks and Housemarks 12 2.3.1 Trademarks 12 2.3.2 Housemarks 12 2.3.3 Ownership of Inventions 12 ARTICLE 3 GOVERNANCE OF DEVELOPMENT AND COMMERCIALIZATION OF PRODUCTS 13 3.1 Joint Steering Committee 13 3.1.1 Purpose 13 3.1.2 Members; Officers 13 3.1.3 Responsibilities 13 3.1.4 Meetings 14 3.1.5 Decision-Making 14 3.2 Joint Project Committee 15 3.2.1 Purpose 15 3.2.2 Members; Officers 15 3.2.3 Responsibilities 15 3.2.4 Meetings 16 3.2.5 Decision-Making 16 3.3 Minutes of Committee Meetings 16 3.3.1 Distribution of Minutes 16 3.3.2 Review of Minutes 16 3.3.3 Discussion of Comments 16 3.4 Expenses 17 + + + + + +3.5 General Guidelines and Initial Coordination Efforts 17 ARTICLE 4 DEVELOPMENT OF PRODUCTS 17 4.1 Pooling of Compounds 17 4.2 Obligations for Development 17 4.2.1 General; GSK 17 4.2.2 GSK's Funding Responsibility 18 4.2.3 Decisions with Respect to Products 18 4.2.4 Development Timelines 18 4.3 Replacement Compounds 19 4.4 Transfer of Data 19 4.5 LABA Activity Inside and Outside of the Collaboration 19 i + + + + + + ARTICLE 5 COMMERCIALIZATION 20 5.1 Global Marketing Plans 20 5.1.1 General 20 5.1.2 Contents of Each Marketing Plan 20 5.2 Obligations for Commercialization 20 5.3 Commercialization 20 5.3.1 GSK Responsibility 20 5.3.2 Semi-Annual Reports 21 5.3.3 Exports to the United States 21 ARTICLE 6 FINANCIAL PROVISIONS 21 6.1 Signing Payment; Equity Investment; One-Time Fee 21 6.1.1 Signing Payment 21 6.1.2 Stock Purchase 21 6.1.3 One-Time Fee for AMI-15471 21 6.1.4 One-Time Fee for Each Theravance New Compound 22 6.2 Milestone Payments 22 6.2.1 General 22 6.2.2 GSK to Theravance 22 6.2.3 Theravance to GSK 23 6.2.4 Notification and Payment 24 6.3 Payment of Royalties on Net Sales 24 6.3.1 Royalty on Single-Agent Collaboration Products and LABA/ICS Combination Products 24 6.3.2 Royalty Adjustment 25 6.3.3 Royalties on Other Collaboration Products Launched After the LABA/ICS Combination Product 25 6.4 Royalty Responsibilities; Net Sales Reports 26 6.4.1 Payments to Third Parties 26 6.4.2 Net Sales Report 26 6.5 GAAP 26 6.6 Currencies 26 6.7 Manner of Payments 26 6.8 Interest on Late Payments 27 + + + + + + 6.9 Tax Withholding 27 6.10 Financial Records; Audits 27 ARTICLE 7 PROMOTIONAL MATERIALS AND SAMPLES 28 7.1 Promotional Materials 28 7.1.1 Review of Core Promotional Materials 28 7.1.2 Markings of Promotional Materials 28 7.2 Samples 28 7.3 Statements Consistent with Labeling 28 7.4 Implications of Change in Control in Theravance 28 ii + + + + + + ARTICLE 8 REGULATORY MATTERS 29 8.1 Governmental Authorities 29 8.2 Filings 29 8.3 Exchange of Drug Safety Information 29 8.4 Recalls or Other Corrective Action 29 8.5 Events Affecting Integrity or Reputation 29 ARTICLE 9 ORDERS; SUPPLY AND RETURNS 30 9.1 Orders and Terms of Sale 30 9.2 Supply of API Compound and Formulated Collaboration Product for Development 30 9.2.1 Supply of API Compound for Development 30 9.2.2 Supply of Formulated Collaboration Products for Development 30 9.3 Supply of API Compound for Commercial Requirements 30 9.4 Supply of Collaboration Products for Commercialization 30 9.5 Inventories 31 ARTICLE 10 CONFIDENTIAL INFORMATION 31 10.1 Confidential Information 31 10.2 Permitted Disclosure and Use 31 10.3 Publications 31 10.4 Public Announcements 32 10.5 Confidentiality of This Agreement 32 10.6 Termination of Prior Confidentiality Agreements 32 10.7 Survival 32 ARTICLE 11 REPRESENTATIONS AND WARRANTIES; COVENANTS 33 11.1 Mutual Representations and Warranties 33 11.2 Additional GSK Representations and Warranties 34 11.3 Additional Theravance Representations and Warranties 34 11.4 Covenants 35 11.5 Disclaimer of Warranty 35 + + + + + + ARTICLE 12 INDEMNIFICATION 35 12.1 Indemnification by GSK 35 12.2 Indemnification by Theravance 35 12.3 Procedure for Indemnification 36 12.3.1 Notice 36 12.3.2 Defense of Claim 36 12.4 Assumption of Defense 37 12.5 Insurance 37 iii + + + + + + ARTICLE 13 PATENTS 37 13.1 Prosecution and Maintenance of Patents 37 13.1.1 Prosecution and Maintenance of Theravance Patents 37 13.1.2 Prosecution and Maintenance of Patents Covering Joint Inventions 38 13.1.3 Prosecution and Maintenance of GSK Patents 39 13.1.4 GSK Step-In Rights 39 13.1.5 Theravance Step-In Rights 40 13.1.6 Execution of Documents by Agents 40 13.1.7 Patent Term Extensions 40 13.2 Patent Infringement 40 13.2.1 Infringement Claims 40 13.2.2 Infringement of Theravance Patents 40 13.2.3 Infringement of GSK Patents 41 13.3 Notice of Certification 41 13.3.1 Notice 41 13.3.2 Option 41 13.3.3 Name of Party 41 13.4 Assistance 41 13.5 Settlement 41 ARTICLE 14 TERM AND TERMINATION 42 14.1 Term and Expiration of Term 42 14.2 Termination for Material Breach 42 14.3 GSK Right to Terminate Development of a Collaboration Product 42 14.4 GSK Right to Terminate Commercialization of a Collaboration Product Following First Commercial Sale 42 14.5 Termination of the Agreement Due to Discontinuation of Development of All Collaboration Products and All Pooled Compounds 43 14.6 Effects of Termination 43 14.6.1 Effect of Termination for Material Breach 43 14.6.2 Effect of Termination by GSK of Certain Terminated Development Collaboration Product(s) 44 14.6.3 Effect of Termination by GSK of a Terminated Commercialized Collaboration Product 45 14.6.4 Effect of Termination of the Agreement Due to Discontinuation of Development Prior to First Commercial Sale of All Collaboration Products and All Pooled Compounds 46 + + + + + +14.7 License Rights 47 14.8 Milestone Payments 47 14.9 Subsequent Royalties 47 14.10 Accrued Rights; Surviving Obligations 47 ARTICLE 15 LIMITATIONS RELATING TO THERAVANCE EQUITY SECURITIES 48 15.1 Purchases of Equity Securities 48 15.2 Exceptions for Purchasing Securities of Theravance 48 15.3 Voting 49 15.4 Theravance Voting Securities Transfer Restrictions 50 15.5 Termination of Purchase Restrictions 50 iv + + + + + + ARTICLE 16 MISCELLANEOUS 50 16.1 Relationship of the Parties 50 16.2 Registration and Filing of This Agreement 51 16.3 Force Majeure 51 16.4 Governing Law 51 16.5 Attorneys' Fees and Related Costs 51 16.6 Assignment 52 16.7 Notices 52 16.8 Severability 52 16.9 Headings 53 16.10 Waiver 53 16.11 Entire Agreement 53 16.12 No License 53 16.13 Third Party Beneficiaries 53 16.14 Counterparts 53 16.15 Single Closing Condition 54 Schedules 1.19 Criteria for Theravance New Compounds and Replacement Compounds 6.1.2 Preferred Stock Purchase Agreement v + + + + + + COLLABORATION AGREEMENT This COLLABORATION AGREEMENT ("Agreement") dated November 14, 2002, is made by and between THERAVANCE, INC., a Delaware corporation, and having its principal office at 901 Gateway Boulevard, South San Francisco, California 94080 ("Theravance"), and GLAXO GROUP LIMITED, a United Kingdom corporation, and having its principal office at Glaxo Wellcome House, Berkeley Avenue, Greenford, Middlesex, UB6 0NN, United Kingdom ("GSK"). Theravance and GSK may be referred to as a "Party" or together, the "Parties". RECITALS WHEREAS, Theravance is currently developing Long-Acting β2 Adrenoceptor Agonists such as but not limited to TD-3327 and AMI- 15471 for the treatment and/or prophylaxis of asthma and other respiratory diseases; WHEREAS, GSK is also currently developing Long-Acting β2 Adrenoceptor Agonists such as but not limited to GW 597901, GW 678007, GW 642444 and GW 774419, as well as other anti-inflammatory compounds, for the treatment and/or prophylaxis of respiratory disease; WHEREAS, GSK and Theravance desire to pool certain of their respective development compounds on an exclusive, worldwide basis to commercialize at least one Long-Acting β2 Adrenoceptor Agonist that can be used as a single agent and/or in combination with a Long-Acting Inhaled Corticosteroid and potentially other compounds for treatment and/or prophylaxis of respiratory disease; WHEREAS, GSK and Theravance are willing to undertake research and development activities and investment and to coordinate such activities and investment as provided by this Agreement with respect to the Collaboration Products; and WHEREAS, GSK and Theravance believe that a collaboration pursuant to this Agreement for the development and commercialization of Collaboration Products would be desirable and compatible with their respective business objectives. NOW, THEREFORE, in consideration of the foregoing premises and the representations, covenants and agreements contained herein, Theravance and GSK, intending to be legally bound, hereby agree as follows: ARTICLE 1 DEFINITIONS For purposes of this Agreement, the following initially capitalized terms, whether used in the singular or plural, shall have the following meanings: 1 + + + + + + 1.1 "AMI-15471" means the Long-Acting β2 Adrenoceptor Agonist designated as such by Theravance and all pharmaceutically acceptable salts and solvates thereof. 1.2 "Adverse Drug Experience" means any of: an "adverse drug experience," a "life-threatening adverse drug experience," a "serious adverse drug experience," or an "unexpected adverse drug experience," as those terms are defined at either 21 C.F.R.(S)312.32 or 21 C.F.R.(S)314.80. 1.3 "Affiliate" of a Party means any Person, whether de jure or de facto, which directly or indirectly controls, is controlled by, or is under common control with such Person for so long as such control exists, where "control" means the decision-making authority as to such Person and, further, where such control shall be presumed to exist where a Person owns more than fifty percent (50%) of the equity (or such lesser percentage which is the maximum allowed to be owned by a foreign corporation in a particular jurisdiction) having the power to vote on or direct the affairs of the entity. 1.4 "API Compound" means bulk quantities of active pharmaceutical ingredient compound prior to the commencement of secondary manufacturing resulting in a Collaboration Product. 1.5 "Breaching Party" shall have the meaning set forth in Section 14.2. 1.6 "Business Day" means any day on which banking institutions in both New York City, New York, United States and London, England are open for business. 1.7 "Calendar Month" means for each Calendar Year, each of the one-month periods. 1.8 "Calendar Quarter" means for each Calendar Year, each of the three month periods ending March 31, June 30, September 30 and December 31; provided, however, that the first calendar quarter for the first Calendar Year shall extend from the Effective Date to the end of the first complete calendar quarter thereafter. 1.9 "Calendar Year" means, for the first calendar year, the period commencing on the Effective Date and ending on December 31 of the calendar year during which the Effective Date occurs, and each successive period beginning on January 1 and ending twelve (12) consecutive calendar months later on December 31. 1.10 "Change in Control" means, with respect to a Party, any transaction or series of related transactions following which continuing stockholders of such Party hold less than 50% of the outstanding voting securities of either such Party or the entity surviving such transaction. 1.11 "Claim" means all charges, complaints, actions, suits, proceedings, hearings, investigations, claims and demands. 1.12 "Collaboration Product" means any of the Long-Acting β2 Adrenoceptor Agonists identified in Section 4.1 as Pooled Compounds (including any Theravance New Compounds and Replacement Compounds, as applicable) which may become Developed and Commercialized subject to and in accordance with the terms of this Agreement, which such Collaboration Product can be used as a single agent and/or in combination with other therapeutically active components, including but not limited to a Long-Acting Inhaled Corticosteroid, for the treatment and prophylaxis of respiratory diseases. The term 2 + + + + + + "Collaboration Product" shall also include any formulation of excipients, stabilizers, propellants, or other components necessary to prepare and deliver a pharmaceutically effective dose of the Pooled Compound and any other therapeutically active component together with any delivery device. 1.13 "Commercial Conflict" means a situation where Theravance determines that GSK's decision related to Development or Commercialization of a Collaboration Product is likely to result in a materially reduced financial return to Theravance from such Collaboration Product, and that such decision is not based on the technical profile of the Collaboration Product but primarily on commercial factors whereby GSK is likely to achieve an increased financial return from a Competing Product owned by GSK. 1.14 "Commercial Failure" means failure of a Collaboration Product for reasons other than Technical Failure, based on the determination that such product will result in a net present value that is materially worse than the net present value for GSK's other prescription pharmaceutical products, based on GSK's normal and customary procedures for determining net present value for its own portfolio products. The net present value of a Collaboration Product will be based on forecasted cash flow from such product not taking into account the cannibalization of sales or profit from any other GSK product. 1.15 "Commercialization" means any and all activities directed to marketing, promoting, distributing, offering for sale and selling a Collaboration Product, importing a Collaboration Product (to the extent applicable) and conducting Phase IV Studies. When used as a verb, "Commercialize" means to engage in Commercialization. 1.16 "Competing Product" means a product that is intended for the treatment and/or prophylaxis of respiratory diseases. 1.17 "Confidential Information" means all secret, confidential or proprietary information, data or Know-How (including GSK Know-How and Theravance Know-How) whether provided in written, oral, graphic, video, computer or other form, provided by one Party (the "Disclosing Party") to the other Party (the "Receiving Party") pursuant to this Agreement or generated pursuant to this Agreement, including but not limited to, information relating to the Disclosing Party's existing or proposed research, development efforts, patent applications, business or products, the terms of this Agreement and any other materials that have not been made available by the Disclosing Party to the general public. Confidential Information shall not include any information or materials that the Receiving Party can document with competent written proof: 1.17.1 were already known to the Receiving Party (other than under an obligation of confidentiality), at the time of disclosure by the Disclosing Party; 1.17.2 were generally available to the public or otherwise part of the public domain at the time of its disclosure to the Receiving Party; 1.17.3 became generally available to the public or otherwise part of the public domain after its disclosure or development, as the case may be, and other than through any act or omission of a Party in breach of such Party's confidentiality obligations under this Agreement; 3 + + + + + + 1.17.4 were disclosed to a Party, other than under an obligation of confidentiality, by a Third Party who had no obligation to the Disclosing Party not to disclose such information to others; or 1.17.5 were independently discovered or developed by or on behalf of the Receiving Party without the use of the Confidential Information belonging to the other Party. 1.18 "Country" means any generally recognized sovereign entity. 1.19 "Criteria" means the requirements set forth in Schedule 1.19 that the Replacement Compounds and Theravance New Compounds must meet to become a Pooled Compound. These requirements may be amended after the Effective Date by written agreement of the Parties (such agreement not to be unreasonably withheld by either Party) to take account of any newly established data or knowledge that has or have arisen since the Effective Date that affect or is likely to affect same. 1.20 "Designated Foreign Filing" shall have the meaning set forth in Section 13.1.2(b). 1.21 "Development" or "Develop" means preclinical and clinical drug development activities, including, among other things: test method development and stability testing, toxicology, formulation, process development, manufacturing scale-up, development-stage manufacturing, current Good Manufacturing Practices audits, current Good Clinical Practices audits, current Good Laboratory Practices audits, analytical method validation, manufacturing process validation, cleaning validation, scale-up and post approval changes, quality assurance/quality control development, statistical analysis and report writing, preclinical and clinical studies, regulatory filing submission and approval, and regulatory affairs related to the foregoing. When used as a verb, "Develop" means to engage in Development. 1.22 "Development Expenses" means the cost of all studies or activities performed by or on behalf of GSK or any of its Affiliates pursuant to this Agreement. 1.23 "Development Milestone" shall have the meaning set forth in Section 6.2.1. 1.24 "Development Plan" means the outline plan for each Collaboration Product designed to achieve the Development for such Collaboration Product, including, without limitation, the nature, number and schedule of Development activities as well as the estimated resources necessary to implement such activities as such may be amended in accordance with the terms of this Agreement. 1.25 "Diligent Efforts" means the carrying out of obligations in a sustained manner consistent with the efforts a Party devotes to a product of similar market potential, profit potential or strategic value resulting from its own research efforts, based on conditions then prevailing and as if there were no Competing Product owned by such Party, with the objective of launching a single agent Collaboration Product and a combination agent Collaboration Product in accordance with the Development principles more specifically outlined in Section 4.2.4. Diligent Efforts requires that: (i) each Party promptly assign responsibility for such obligations to specific employee(s) who are held accountable for progress and monitor such progress on an on-going basis, (ii) each Party set and consistently seek to achieve specific and meaningful objectives for carrying out such obligations, and (iii) each Party consistently make and implement decisions and allocate resources designed to advance progress with respect to such objectives. 4 + + + + + + 1.26 "Disclosing Party" shall have the meaning set forth in Section 1.17. 1.27 "Effective Date" means the first business day following the date on which the last of the conditions contained in Section 16.15 of this Agreement has been satisfied. 1.28 "Exchange Act" shall have the meaning set forth in Section 15.1.1. 1.29 "FDA" means the United States Food and Drug Administration and any successor agency thereto. 1.30 "Field" means human pharmaceutical use of Long-Acting β2 Adrenoceptor Agonists for the treatment and/or prophylaxis of respiratory diseases. 1.31 "First Commercial Sale" means the first shipment of commercial quantities of any Collaboration Product sold to a Third Party by a Party or its sublicensees in any Country after receipt of Marketing Authorization Approval for such Collaboration Product in such Country. Sales for test marketing, sampling and promotional uses, clinical trial purposes or compassionate or similar uses shall not be considered to constitute a First Commercial Sale. 1.32 "Force Majeure Event" shall have the meaning set forth in Section 16.3. 1.33 "Governmental Authority" means any court, tribunal, arbitrator, agency, legislative body, commission, official or other instrumentality of (i) any government of any Country, (ii) a federal, state, province, county, city or other political subdivision thereof or (iii) any supranational body, including without limitation the European Agency for the Evaluation of Medicinal Products. 1.34 "GSK Compound" means a GSK Initially Pooled Compound, any Replacement Compound offered up to the collaboration by GSK or a GSK non-LABA Compound utilised by GSK for Development purposes in relation to combination product activity under this Agreement currently owned or subsequently discovered by GSK and/or its predecessors in title or in-licensed from a Third Party by GSK and/or its predecessors in title. 1.35 "GSK Initially Pooled Compound" shall mean the chemical entities individually identified as GW 597901, GW 678007, GW 642444 and GW 774419 and all pharmaceutically acceptable salts and solvates thereof. 1.36 "GSK Invention" means an Invention that is invented by an employee or agent of GSK solely or jointly with a Third Party. 1.37 "GSK Know-How" means all present and future information directly relating to the Collaboration Products, a GSK Compound or the GSK Inventions, including without limitation all data, records, and regulatory filings relating to Collaboration Products, that is required for Theravance to perform its obligations or exercise it rights under this Agreement, and which during the Term are in GSK's or any of its Affiliates' possession or control and are or become owned by, or otherwise may be licensed to (provided there is no restriction on GSK thereof), GSK. GSK Know-How does not include any GSK Patents. 5 + + + + + + 1.38 "GSK non-LABA Compound" means any other compound contributed to the collaboration by GSK pursuant to Section 4.2.1 for the purpose of developing a combination product. 1.39 "GSK Patents" means all present and future patents and patent applications including United States provisional applications and any continuations, continuations-in-part, divisionals, registrations, confirmations, revalidations, reissues, Patent Cooperation Treaty applications, certificates of addition, utility models, design patents, petty patents as well as all other intellectual property related to the application or patent including extensions or restorations of terms thereof, pediatric use extensions, supplementary protection certificates or any other such right covering the Pooled Compounds, Collaboration Products, a GSK Compound or the GSK Inventions which are or become owned by GSK or GSK's Affiliates, or as to which GSK or GSK's Affiliates otherwise are or become licensed, now or in the future, where GSK has the right to grant the sublicense rights granted to Theravance under this Agreement, which such patent rights cover the making, having made, use, offer for sale, sale or importation of the Collaboration Products. 1.40 "Hatch-Waxman Certification" shall have the meaning set forth in Section 13.3. 1.41 "Hostile Tender Offer" shall have the meaning set forth in Section 15.2.6. 1.42 "Indemnified Party" shall have the meaning set forth in Section 12.3.1. 1.43 "Indemnifying Party" shall have the meaning set forth in Section 12.3.1. 1.44 "Invention" means any discovery (whether patentable or not) invented during the Term as a result of research, Development or manufacturing activities and specifically related to a Pooled Compound or Collaboration Product hereunder. 1.45 "Investigational Authorization" means, with respect to a Country, the regulatory authorization required to investigate a Collaboration Product in such Country as granted by the relevant Governmental Authority. 1.46 "Joint Invention" means an Invention that is invented jointly by employees and/or agents of both Theravance and GSK hereunder and the patent rights in such Invention. 1.47 "Joint Project Committee" shall have the meaning set forth in Section 3.2. 1.48 "Joint Steering Committee" shall have the meaning set forth in Section 3.1. 1.49 "LABA/ICS Combination Product" means a product that contains a Pooled Compound and a Long-Acting Inhaled Corticosteroid for the treatment and/or prophylaxis of respiratory diseases. A LABA/ICS Combination Product shall also be considered a Collaboration Product. 1.50 "Laws" means all laws, statutes, rules, regulations (including, without limitation, current Good Manufacturing Practice Regulations as specified in 21 C.F.R. (S)(S) 210 and 211; Investigational New Drug Application regulations at 21 C.F.R. (S) 312; NDA regulations at 21 C.F.R. (S) 314, relevant provisions of the Federal Food, Drug and Cosmetic Act, and other laws and regulations enforced by the FDA), ordinances and other pronouncements having the binding effect of law of any Governmental Authority. 6 + + + + + + 1.51 "Litigation Condition" shall have the meaning set forth in Section 12.3.2. 1.52 "Long-Acting β Adrenoceptor Agonist" or "LABA" means a chemical entity that (i) selectively binds to human β adrenoceptors and activates human β adrenoceptors at concentrations less than 100 nanomolar and (ii) has significantly longer activity than salmeterol after inhalation dosing as determined in a guinea pig acetylcholine bronchoprotection model or similar animal model. 1.53 "Long-Acting Inhaled Corticosteroid" or "ICS" means a corticosteroid that has duration of action of at least 24 hours demonstrated in clinical testing. 1.54 "Losses" means any and all damages (including all incidental, consequential, statutory an treble damages), awards, deficiencies, settlement amounts, defaults, assessments, fines, dues, penalties, costs, fees, liabilities, obligations, taxes, liens, losses, lost profits and expenses (including without limitation court costs, interest and reasonable fees of attorneys, accountants and other experts) incurred by or awarded to Third Parties and required to be paid to Third Parties with respect to a Claim by reason of any judgment, order, decree, stipulation or injunction, or any settlement entered into in accordance with the provisions of this Agreement, together with all documented out-of-pocket costs and expenses incurred in complying with any judgments, orders, decrees, stipulations and injunctions that arise from or relate to a Claim of a Third Party. 1.55 "Major Market Country" means each of the United States, Canada, Japan, France, United Kingdom, Italy, Germany and Spain. 1.56 "Marketing Authorization" means, with respect to a Country, the regulatory authorization required to market and sell a Collaboration Product in such Country as granted by the relevant Governmental Authority. 1.57 "Marketing Authorization Approval" shall mean approval by a Governmental Authority for sale of a Collaboration Product, including any applicable pricing, final labeling or reimbursement approvals. 1.58 "Marketing Plan" means for each relevant Collaboration Product the global plan prepared by GSK identifying the core strategic, commercial and promotional claims and objectives for the specific Collaboration Product as reviewed and approved under Section 5.1.1. 1.59 "NDA" means a new drug application or supplemental new drug application or any amendments thereto submitted to the FDA in the United States. 1.60 "NDA Acceptance" shall mean the written notification by the FDA that the NDA has met all the criteria for filing acceptance pursuant to 21 C.F.R.(S)314.101. 1.61 "Net Sales" means the gross sales price of a Collaboration Product sold by GSK, its Affiliates or their licensees (or such licensees' Affiliates) to a Third Party, less the following to the extent borne by the seller and not taken into account in determining gross sales price: (a) deduction of cash, trade and quantity discounts actually given; (b) discounts, refunds, rebates, chargebacks, retroactive price adjustments, and any other allowances actually given which effectively reduce the net selling price, including institutional rebate or discount such as Medicare or Medicaid provided in the United States or any similar organization elsewhere in the world; and 7 + +2 2 + +2 + + + + + + (c) credits and allowances for product returns actually made. Net Sales shall exclude Samples distributed in the usual course of business. 1.62 "Net Sales Report" shall have the meaning set forth in Section 6.4.2. 1.63 "Officers" shall have the meaning set forth in Section 3.1.5(b). 1.64 "Other Combination Product" means any product developed pursuant to this Agreement for the treatment and/or prophylaxis of respiratory disease that contains a Long-Acting β Adrenoceptor Agonist and another active agent which is a GSK Compound other than a Long- Acting Inhaled Corticosteroid. 1.65 "Patent Infringement Claim" shall have the meaning set forth in Section 13.2.1. 1.66 "Patent Infringement Notice" shall have the meaning set forth in Section 13.2.2. 1.67 "Person" means any natural person, corporation, general partnership, limited partnership, limited liability company, joint venture, proprietorship or other business organization. 1.68 "Phase I Studies" means that portion of the Development Plan or Development relating to each Collaboration Product which provides for the first introduction into humans of such Collaboration Product including small scale clinical studies conducted in normal volunteers to obtain information on such Collaboration Product's safety, tolerability, pharmacological activity, pharmacokinetics, drug metabolism and mechanism of action, as well as early evidence of effectiveness, as more fully defined in 21 C.F.R. (S) 312.21(a). 1.69 "Phase II Studies" means, subject to Section 6.2.2, that portion of the Development Plan or Development relating to each Collaboration Product which provides for well controlled clinical trials of such Collaboration Product in patients, including clinical studies conducted in patients with the condition, and designed to evaluate clinical efficacy and safety for such Collaboration Product for one or more indications, as well as to obtain an indication of the dosage regimen required, as more fully defined in 21 C.F.R. (S) 312.21(b). 1.70 "Phase III Studies" means that portion of the Development Plan or Development relating to each Collaboration Product which provides for large scale, pivotal, clinical studies conducted in a sufficient number of patients and whose primary objective is to obtain a definitive evaluation of the therapeutic efficacy and safety of the Collaboration Product in patients for the particular indication in question that is needed to evaluate the overall risk-benefit profile of the Collaboration Product and to provide adequate basis for obtaining requisite regulatory approval(s) and product labeling, as more fully defined in 21 C.F.R. (S) 312.21(c). 1.71 "Phase IV Studies" means a study for a Collaboration Product that is initiated after receipt of a Marketing Authorization for a Collaboration Product and is principally intended to support the marketing and Commercialization of such Collaboration Product, including without limitation investigator initiated trials, clinical experience trials and studies conducted to fulfill local commitments made as a condition of any Marketing Authorization. 1.72 "Pooled Compounds" means (i) the four Long-Acting Beta-2 Adrenoceptor Agonists provided by GSK as of the Effective Date (identified as GW 597901, GW 678007, GW 642444 and GW 774419), (ii) the two Long-Acting Beta-2 Adrenoceptor Agonists provided by 8 + +2 + + + + + + Theravance as of the Effective Date (identified as TD-3327 and AMI-15471), (iii) the Theravance New Compounds provided by Theravance pursuant to Section 4.1, and any Replacement Compounds provided by Theravance or GSK. 1.73 "Product Supplier" means any manufacturer, packager or processor of a Collaboration Product for development, marketing and sale. 1.74 "Promotional Materials" means the core written, printed, video or graphic advertising, promotional, educational and communication materials (other than Collaboration Product labeling) for marketing, advertising and promotion of the Collaboration Products. 1.75 "Receiving Party" shall have the meaning set forth in Section 1.17. 1.76 "Replacement Compound" means a Long-Acting β2 Adrenoceptor Agonist that meets the Criteria and is provided by Theravance or GSK, as applicable, (and "GSK Replacement Compound" and "Theravance Replacement Compound" shall be interpreted accordingly) after the Effective Date to replace a Pooled Compound for which Development has been discontinued due to Technical Failure. 1.77 "ROW" means Countries other than the Major Market Countries. 1.78 "Samples" means Collaboration Product packaged and distributed as a complimentary trial for use by patients in the Territory. 1.79 "SEC" shall have the meaning set forth in Section 15.1.2. 1.80 "Selectively" means the chemical entity binds human β adrenoceptors (a) with more than 100 fold greater affinity than it binds other protein targets in the human body as determined by receptor binding, radioligand displacement or functional in vitro assays, and (b) more than 5 fold greater than the other human β adrenoceptor subtypes. 1.81 "TD-3327" means the Long-Acting β2 Adrenoceptor Agonist so designated by Theravance and all pharmaceutically acceptable salts and solvates thereof contributed to the collaboration by Theravance. 1.82 "Taxes" shall have the meaning set forth in Section 6.9.1. 1.83 "Technical Failure" means the discontinuation of Development of a Collaboration Product for technical, scientific, medical or regulatory reasons, such as but not limited to unacceptable preclinical toxicity, or the inability to demonstrate sufficient Long-Acting β Adrenoceptor Agonist effect in humans, or demonstration of a side effect profile significantly worse than currently marketed products, or inability to manufacture API in an acceptable purity or crystalline form, or inability to produce a metered dose inhaler or dry powder inhaler formulation with acceptable aerosol performance and stability. 1.84 "Term" means, on a Country-by-Country and Collaboration Product-by-Collaboration Product basis, the period from the Effective Date until the later of (a) the expiration or termination of the last Valid Claim of a Patent Right covering the Pooled Compound in such Collaboration Product in such Country, and (b) fifteen (15) years from First Commercial Sale in such Country, unless this Agreement is terminated earlier in accordance with Article 14. 9 + +2 + +2 + + + + + + 1.85 "Terminated Collaboration Product" shall mean a Terminated Development Collaboration Product or a Terminated Commercialized Collaboration Product. 1.86 "Terminated Commercialized Collaboration Product" shall have the meaning set forth in Section 14.4. 1.87 "Terminated Development Collaboration Product" shall have the meaning set forth in Section 14.3. 1.88 "Territory" means worldwide. 1.89 "Theravance Compound" means TD-3327 and AMI-15471, (together the "Theravance Initially Pooled Compounds"), the two Theravance New Compounds and any Replacement Compound that is offered up to the collaboration by Theravance. 1.90 "Theravance New Compound" means each of the two chemical entities meeting the Criteria and provided by Theravance to the collaboration as Pooled Compounds after the Effective Date pursuant to Section 4.1. 1.91 "Housemark" means the name and logo of GSK or Theravance or any of their respective Affiliates as identified by one Party to the other from time to time. 1.92 "Theravance Invention" means an Invention that is invented by an employee or agent of Theravance solely or jointly with a Third Party. 1.93 "Theravance Know-How" means all present and future information directly relating to the Collaboration Products, a Theravance Compound or the Theravance Inventions that is required for GSK to perform its obligations or exercise its rights under this Agreement, and which during the Term are in Theravance's or any of its Affiliates' possession or control and are or become owned by, or otherwise may be licensed (provided there are no restrictions on Theravance thereof) by, Theravance. Theravance Know-How does not include any Theravance Patents. 1.94 "Theravance Patents" means all present and future patents and patent applications including United States provisional applications and any continuations, continuations-in-part, divisionals, registrations, confirmations, revalidations, reissues, Patent Cooperation Treaty applications, certificates of addition, utility models, design patents, petty patents as well as all other intellectual property related to the application or patent including extensions or restorations of terms thereof, pediatric use extensions, supplementary protection certificates or any other such right covering the Pooled Compounds, the Collaboration Products, a Theravance Compound or the Theravance Inventions which are or become owned by Theravance or Theravance's Affiliates, or as to which Theravance or Theravance's Affiliates are or become licensed, now or in the future, with the right to grant the sublicense rights granted to GSK under this Agreement, which patent rights cover the making, having made, use, offer for sale, sale or importation of Collaboration Products. 1.95 "Third Party" means a Person who is not a Party or an Affiliate of a Party. 1.96 "Third Party Claim" shall have the meaning set forth in Section 12.3.1. 1.97 "United States" means the United States, its territories and possessions. 10 + + + + + + 1.98 "Valid Claim" means any claim(s) pending in a patent application or in an unexpired patent which has not been held unenforceable, unpatentable or invalid by a decision of a court or other governmental agency of competent jurisdiction, unappealable or unappealed within the time allowed for appeal, and which has not has been admitted to be invalid or unenforceable through reissue or disclaimer. If in any country there should be two or more such decisions conflicting with respect to the validity of the same claim, the decision of the higher or highest tribunal shall thereafter control; however, should the tribunals be of equal rank, then the decision or decisions upholding the claim shall prevail when the decisions are equal in number, and the majority of decisions shall prevail when the conflicting decisions are unequal in number. 1.99 "Withholding Party" shall have the meaning set forth in Section 6.9.1. ARTICLE 2 RIGHTS AND OBLIGATIONS 2.1 License Grants from Theravance to GSK. 2.1.1 Development License. Subject to the terms of this Agreement, including without limitation Section 2.2, Theravance grants to GSK, and GSK accepts, an exclusive (except as to Theravance and its Affiliates) license in the Field under the Theravance Patents, Theravance Know-How and Theravance's rights in the Joint Inventions to make, have made, use and Develop Collaboration Products for Commercialization in the Territory. 2.1.2 Commercialization License. Subject to the terms of this Agreement, including without limitation Section 2.2, Theravance hereby grants to GSK, and GSK accepts, an exclusive license in the Field under the Theravance Patents, Theravance Know-How and Theravance's rights in the Joint Inventions to make, have made use, sell, offer for sale and import Collaboration Products in the Territory. 2.1.3 Manufacturing License. Subject to the terms of this Agreement, including without limitation Section 2.2, Theravance grants to GSK an exclusive license in the Field under the Theravance Patents, Theravance Know-How and Theravance's rights in the Joint Inventions to make and have made API Compound or formulated Collaboration Product in the Territory. 2.2 Sublicensing and Subcontracting. GSK may sublicense or subcontract its rights to Develop, Manufacture or Commercialize the Collaboration Products in whole or in part to one or more of its Affiliates, provided that the rights sublicensed or subcontracted to such Affiliate shall automatically terminate upon a change of control of such Affiliate in connection with which such Affiliate ceases to be an Affiliate of GSK. GSK may also sublicense or subcontract any of GSK's rights to Develop or Manufacture the Collaboration Products, in whole or in part, to one or more Third Parties. In the event GSK wishes to sublicense or subcontract any of GSK's rights to Commercialize the Collaboration Products, in whole or in part, to one or more Third Parties, GSK shall obtain the prior written consent of Theravance, such consent not to be unreasonably withheld, provided always that no such restriction shall apply in respect of those countries of the Territory wherein GSK is or has been required under applicable local laws to appoint a Third Party as its distributor or marketing partner. GSK shall secure all appropriate covenants, obligations and rights from any such sublicensee or subcontractor granted by it under this Agreement, including, but not limited to, intellectual property rights and confidentiality obligations in any such agreement or other relationship, to ensure that such sublicensee can 11 + + + + + + comply with all of GSK's covenants and obligations to Theravance under this Agreement. GSK's rights to sublicense, subcontract or otherwise transfer its rights granted under Section 2.1 are limited to those expressly set forth in this Section 2.2. 2.3 Trademarks and Housemarks. 2.3.1 Trademarks. The Collaboration Products shall be Commercialized under trademarks (the "Trademarks") and trade dress selected by the Joint Project Committee and approved by the Joint Steering Committee. Prior to any such proposed Trademark(s) being submitted to the Joint Project Committee, GSK shall be responsible for undertaking their preliminary selection. GSK shall exclusively own all Trademarks, and shall be responsible for the procurement, filing and maintenance of trademark registrations for such Trademarks and all costs and expenses related thereto. GSK shall also exclusively own all trade dress and copyrights associated with the Collaboration Products. Nothing herein shall create any ownership rights of Theravance in and to the Trademarks or the copyrights and trade dress associated with the Collaboration Products. 2.3.2 Housemarks. Each Party acknowledges the goodwill and reputation that has been associated with the other Party's Housemarks over the years, and shall use such Housemarks in a manner that maintains and promotes such goodwill and reputation and is consistent with trademark guidelines. Each Party shall take all reasonable precautions and actions to protect the goodwill and reputation that has inured to the other Party's Housemarks, shall refrain from doing any act that is reasonably likely to impair the reputation of such Housemarks, and shall cooperate fully to protect such Housemarks. 2.3.3 Ownership of Inventions. Each Party shall promptly disclose to the other Party all Inventions made by it during the Term; provided that GSK will be allowed a reasonable time to file patent applications covering GSK Inventions prior to disclosing the GSK Invention to Theravance, and Theravance will be allowed a reasonable time to file patent applications covering Theravance Inventions prior to disclosing the Theravance Invention to GSK. Theravance shall own all Theravance Inventions and GSK shall own all GSK Inventions. All Joint Inventions shall be owned jointly by Theravance and GSK, and each Party hereby consents to the assignment or license or other disposition by the other Party of its joint interests in Joint Inventions without the need to seek the consent of the other Party to such assignment or license or other disposition; provided that any such assignment, license or other disposition shall at all times be subject to the grant of rights and accompanying conditions under Sections 2.1 and 2.2 and Article 14. The determination of inventorship for Inventions shall be made in accordance with applicable laws relating to inventorship set forth in the patent laws of the United States (Title 35, United States Code). 12 + + + + + + ARTICLE 3 GOVERNANCE OF DEVELOPMENT AND COMMERCIALIZATION OF PRODUCTS 3.1 Joint Steering Committee. 3.1.1 Purpose. The purposes of the Joint Steering Committee shall be (i) to determine the overall strategy for this collaboration between the Parties and (ii) to coordinate the Parties' activities hereunder. The Parties intend that their respective organizations will work together and will use Diligent Efforts to assure success of the collaboration. 3.1.2 Members; Officers. Within thirty (30) days after the Effective Date, the Parties shall establish a joint steering committee (the "Joint Steering Committee"), which shall consist of four (4) members, two (2) of whom shall be designated by each of GSK and Theravance and shall have appropriate expertise, with at least one (1) member from each Party being at least at a vice president level or higher. Each of GSK and Theravance may replace any or all of its representatives on the Joint Steering Committee at any time upon written notice to the other Party. A Party may designate a substitute to temporarily attend and perform the functions of such Party's designee at any meeting of the Joint Steering Committee. GSK and Theravance each may, on advance written notice to the other Party, invite non-member representatives of such Party to attend meetings of the Joint Steering Committee. The Joint Steering Committee shall be chaired on an annual rotating basis by a representative of either Theravance or GSK, as applicable, on the Joint Steering Committee, with Theravance providing the first such chairperson. The chairperson shall appoint a secretary of the Joint Steering Committee, who shall be a representative of the other Party and who shall serve for the same annual term as such chairperson. 3.1.3 Responsibilities. The Joint Steering Committee shall perform the following functions: (a) Manage and oversee the Development and Commercialization of the Collaboration Products pursuant to the terms of this Agreement; (b) Review and approve the Development Plans and the Marketing Plans for Collaboration Products and any material amendments to the Development Plans and Marketing Plans; (c) At each meeting of the Joint Steering Committee, review Net Sales for the year-to-date as available; (d) Review and approve the progress of the Joint Project Committee; (e) Review and approve the Trademarks selected under Section 2.3; (f) Review and approve "go/no-go" decisions and other matters referred to the Joint Steering Committee, including, without limitation, the continued Development of a particular Collaboration Product or the inclusion of Replacement Compounds; (g) Life cycle management of, and intellectual property protection for, the Collaboration Products; 13 + + + + + + (h) In accordance with the procedures established in Section 3.1.5, resolve disputes, disagreements and deadlocks unresolved by the Joint Project Committee; and (i) Have such other responsibilities as may be assigned to the Joint Steering Committee pursuant to this Agreement or as may be mutually agreed upon by the Parties from time to time. 3.1.4 Meetings. The Joint Steering Committee shall meet in person at least once during every Calendar Year, and more frequently (i) as mutually agreed by the Parties or (ii) as required to resolve disputes, disagreements or deadlocks in the Joint Project Committee, on such dates, and at such places and times, as such Parties shall agree; provided that the Parties shall endeavor to have the first meeting of the Joint Steering Committee within thirty (30) days after the establishment of the Joint Steering Committee. The Joint Steering Committee shall arrange to meet in person or convene otherwise to assess and approve any Development Plans or Marketing Plans, if any, submitted to the Joint Steering Committee in each Calendar Year so that such plans will be reviewed and approved within thirty (30) days following submission to the Joint Steering Committee. To the extent any such Development Plans or Marketing Plans are not approved and need to be reformulated by the Joint Project Committee, such plans shall be reviewed by the Joint Steering Committee as soon as reasonably practicable after resubmission of same. Meetings of the Joint Steering Committee that are held in person shall alternate between offices of GSK and Theravance, or such other place as the Parties may agree. In addition to the annual face to face meetings the Joint Steering Committee may also be held by means of telecommunications or, video conferences as deemed appropriate by the Parties. 3.1.5 Decision-Making. (a) The Joint Steering Committee may make decisions with respect to any subject matter that is subject to the Joint Steering Committee's decision-making authority and functions as set forth in Section 3.1.3. Except as specified in Section 3.1.5(b), all decisions of the Joint Steering Committee shall be made by consensus, with the representatives from each Party presenting a unified position on behalf of such Party. The Joint Steering Committee shall use Diligent Efforts to resolve the matters within its roles and functions or otherwise referred to it. (b) With respect to any issue, if the Joint Steering Committee cannot reach consensus within ten (10) Business Days after the matter has been brought to the Joint Steering Committee's attention, then such issue shall be referred to the Chief Executive Officer of Theravance and the Chairman of R&D of GSK (collectively, the "Officers") for resolution. The Parties accept that the use of the Officers for resolution of any unresolved issues will be on an exceptional basis. In the event that the use of the Officers occurs on more than two occasions in any consecutive twelve (12) month period and such disputes are not related to Commercial Conflict issues, then GSK will from then on retain the final vote within the Joint Steering Committee for all issues other than Commercial Conflict. If the Officers are unable to reach consensus within thirty (30) days after the matter has been referred to them, the final decision on such disputed issue will reside with GSK; provided, however, that if the disputed issue involves a Commercial Conflict, then the final decision will be made by a mutually acceptable Third Party mediator. Either Party can initiate such mediation on 30 days written notice to the other Party. The Parties will use best efforts to agree on a mediator within such 30-day period. Such mediation will occur as promptly as practicable following selection of the mediator and will be held in New York, New York. The decision of the mediator will be final and binding on the Parties; provided that either party shall retain all rights to bring an action against the other for damages and other monetary relief related to or arising out of the issue decided by the mediator. 14 + + + + + + 3.2 Joint Project Committee. 3.2.1 Purpose. The purposes of the Joint Project Committee shall be to manage the Parties' day-to-day activities hereunder. 3.2.2 Members; Officers. Within thirty (30) days after the Effective Date, the Parties shall establish a Project Committee (the "Joint Project Committee"), and GSK and Theravance shall designate an equal number of representatives, up to a maximum total of eight (8) members on such Joint Project Committee, with a maximum of four (4) from each Party. Each of GSK and Theravance may replace any or all of its representatives on the Joint Project Committee at any time upon written notice to the other Party. Such representatives shall include individuals who have the relevant experience and expertise for the next twelve months as included in the Development Plan for the Collaboration Products. A Party may designate a substitute to temporarily attend and perform the functions of such Party's designee at any meeting of the Joint Project Committee. GSK and Theravance each may, on advance written notice to the other Party, invite non-member representatives of such Party to attend meetings of the Joint Project Committee. The Joint Project Committee shall be chaired by a representative of GSK. The chairperson shall appoint a secretary of the Joint Project Committee, who shall be a representative of Theravance. 3.2.3 Responsibilities. The Joint Project Committee shall perform the following functions: (a) Review the Development Plans as prepared by GSK; (b) On an annual rolling basis beginning within six months of the Effective Date, update and amend any initial Development Plan and review the Development Plan for each Collaboration Product for the following Calendar Year so that it can immediately thereafter submit such proposed Development Plan to the Joint Steering Committee for review and approval; (c) At each meeting of the Joint Project Committee, review the Development strategy for the Collaboration Products in the Territory; (d) At each meeting of the Joint Project Committee, review and recommend to the Joint Steering Committee any material amendments or modifications to the Development Plans; (e) Coordinate and monitor regulatory strategy and activities for the Collaboration Products in accordance with Article 8; (f) Review and recommend to the Joint Steering Committee "go/no-go" decisions for the Development of Collaboration Products; (g) Review the Marketing Plans where appropriate; (h) Review and recommend to the Joint Steering Committee any material amendments or modifications to the Marketing Plans; 15 + + + + + + (j) Discuss the state of the markets for Collaboration Products and opportunities and issues concerning the Commercialization of the Collaboration Products, including consideration of marketing and promotional strategy, marketing research plans, labeling, Collaboration Product positioning and Collaboration Product profile issues; (k) At each meeting of the Joint Project Committee, review the status of all Studies conducted on Collaboration Products and any results therefrom; (l) At each meeting of the Joint Project Committee, review Net Sales for the year-to-date, as available; and (m) Have such other responsibilities as may be assigned to the Joint Project Committee pursuant to this Agreement or as may be mutually agreed upon by the Parties through the Joint Steering Committee from time to time. 3.2.4 Meetings. The Joint Project Committee shall meet at least once during every Calendar Quarter, and more frequently as GSK and Theravance mutually agree on such dates, and at such places and times, as such Parties shall agree; provided that the Parties shall endeavor to have the first meeting of the Joint Project Committee as a face to face meeting within thirty (30) days after the establishment of the Joint Project Committee. Meetings of the Joint Project Committee that are held in person shall alternate between the offices of GSK and Theravance, or such other place as the Parties may agree and such face to face meetings shall occur no less than twice a year. The remaining meetings may be held by means of telecommunications or video conferences as deemed appropriate. Following Commercialization of a Collaboration Product in the first Major Market, the Joint Project Committee shall meet twice a year with only one annual face to face meeting required. 3.2.5 Decision-Making. The Joint Project Committee may make decisions with respect to any subject matter that is subject to the Joint Project Committee's decision-making authority and functions as set forth in Section 3.2.3. All decisions of the Joint Project Committee shall be made by consensus, with the representatives from each Party presenting a unified position on behalf of such Party. If the Joint Project Committee cannot reach consensus within ten (10) Business Days after it has first met and attempted to reach such consensus, the matter shall be referred on the eleventh (11 ) Business Day to the Joint Steering Committee for resolution. 3.3 Minutes of Committee Meetings. Definitive minutes of all committee meetings shall be finalized no later than thirty (30) days after the meeting to which the minutes pertain as follows: 3.3.1 Distribution of Minutes. Within ten (10) days after a committee meeting, the secretary of such committee shall prepare and distribute to all members of such committee draft minutes of the meeting. Such minutes shall provide a list of any issues yet to be resolved, either within such committee or through the relevant resolution process. 3.3.2 Review of Minutes. The Party members of each committee shall have ten (10) days after receiving such draft minutes to collect comments thereon and provide them to the secretary of such committee. 3.3.3 Discussion of Comments. Upon the expiration of such second ten (10) day period, the Parties shall have an additional ten (10) days to discuss each other's comments and finalize the minutes. The secretary and chairperson(s) of such committee shall each sign and date 16 + +th + + + + + + the final minutes. The signature of such chairperson(s) and secretary upon the final minutes shall indicate each Party's assent to the minutes. 3.4 Expenses. Each Party shall be responsible for all travel and related costs and expenses for its members and other representatives to attend meetings of, and otherwise participate on, a committee. 3.5 General Guidelines and Initial Coordination Efforts. In all matters related to the collaboration established by this Agreement, the Parties shall strive to balance as best they can the legitimate interests and concerns of the Parties and to realize the economic potential of Collaboration Products. In all matters relating to this Agreement, the Parties shall seek to comply with good pharmaceutical and environmental practices. The Parties intend, following the Effective Date, to organize meetings of internal staff to communicate and explain the provisions of this Agreement to ensure the efficient and timely Development and Commercialization of the Collaboration Products. ARTICLE 4 DEVELOPMENT OF PRODUCTS 4.1. Pooling of Compounds. Subject to and consistent with the further Development principles outlined herein, each Party will offer a minimum of four (4) identified LABA compounds to this collaboration, with the intention of commercializing at least one Long-Acting β2 Adrenoceptor Agonist as a single agent and/or as a LABA/ICS Combination Product. Upon commencement of the collaboration pursuant to this Agreement, GSK and Theravance will contribute the following LABA compounds as Pooled Compounds to the collaboration: GSK Compounds GW 597901, GW 678007, GW 642444 and GW 774419 and Theravance Compounds TD-3327 and AMI-15471. For the avoidance of doubt, it is agreed and hereby acknowledged by both Parties that the compounds GW 597901, GW 678007, GW 642444 and GW 774419, TD-3327 and AMI-15471 are hereby accepted as Pooled Compounds. Theravance will provide two (2) Theravance New Compounds to the collaboration within eighteen (18) months of the Effective Date in order to meet the requirement that Theravance contribute a total of four (4) LABA compounds to the Pooled Compounds. Without prejudice to the foregoing, GSK will endeavor to provide Theravance, upon Theravance's request and at GSK's expense and discretion, such assistance as may be reasonably required by Theravance to achieve this objective, including providing directly or through GSK's vendors, assistance in (i) chemical process development, (ii) salt selection, (iii) pharmaceutical formulation, (iv) toxicological evaluation, and (v) API preparation. 4.2 Obligations for Development. 4.2.1 General; GSK. Under the direction of the Joint Project Committee, specific Pooled Compounds will be identified from time to time and, as applicable, selected for Development as a Collaboration Product. The Joint Project Committee will determine the number and extent of Development of the Pooled Compounds and the criteria to be used for selecting among the eight Pooled Compounds and, subject to the other terms of this Agreement, will endeavor to move one or more such Collaboration Products forward in Development. In 17 + + + + + + relation to the foregoing, GSK shall have the overall responsibility for, and use Diligent Efforts in, the performance of all such Development activities which shall include, where applicable, relevant regulatory filings (as contemplated under Article 8) for any such Collaboration Product moved forward in Development. Further, GSK shall use Diligent Efforts to advance such Collaboration Product through Development in accordance with the Go/No-Go checkpoints identified in the then current Development Plan for such Collaboration Product. GSK shall also use Diligent Efforts to contribute at least one ICS and/or other non-LABA compound to the collaboration for the purpose of developing a combination product and Diligent Efforts to develop an optimal inhaled formulation of Collaboration Product in a device which may be either/or a dry powder inhaler formulation and/or a metered dose inhaler formulation of the Collaboration Compound and Development activities of such may continue in parallel. 4.2.2 GSK Funding Responsibility. GSK shall bear all costs and expenses associated with the Development of Collaboration Products for Commercialization including those incurred by Theravance (or to which it has become obligated) after the signature date of this Agreement and which previously have been discussed with and agreed to by GSK and, so far as the aforementioned Theravance costs are concerned, for the avoidance of doubt, the maximum amount shall not exceed U.S. $2,940,000. 4.2.3 Decisions with Respect to Products. (a) GSK shall have the sole discretion with respect to Development decisions for Collaboration Products subject to and in accordance with Sections 3.1.5, 3.2.5, and 4.3 . (b) Notwithstanding the foregoing, the Parties acknowledge that Theravance is about to initiate a Phase I Study in two parts, on TD-3327. The initiation of this study will be approved via the Joint Project Committee in accordance with all other Development activities. Theravance shall be responsible for the routine monitoring of this study and will transfer remaining clinical development responsibility for TD-3327 to the Joint Project Committee on completion of the TD-3327 Phase Ia and Phase Ib Studies. (c) GSK shall provide the Joint Project Committee with an update report within thirty days of (i) the initiation (i.e., first person dosed) of any Study involving a Collaboration Product, and (ii) the last person dosed/last visit in any Study relating to a Collaboration Product. GSK will provide the Joint Project Committee with a reasonably detailed "top line results" report within sixty days following the last person dosed/last visit in any Study involving a Collaboration Product. 4.2.4 Development Timelines. It is hereby acknowledged that GSK's strategic objective is to move one or more of the Collaboration Products into Development at the earliest opportunity. GSK will consult with the Joint Project Committee and will share, modify and further develop all applicable Development Plans and timelines in that forum. It is recognised that success can be optimised by pursuing a number of Collaboration Products through various phases of clinical Development up to the point of Technical or Commercial Failure, and/or until the first Collaboration Product for both single agent and combination therapy achieves regulatory agency approval. At a strategic level, GSK is committed to this objective. However, at an operational level it is recognised that internal and external resources will be constrained from time to time, resulting in the need to prioritise individual studies and activities relating to Collaboration Products. GSK will use Diligent Efforts to secure the necessary resource and will keep the Joint Project Committee informed on the progress of individual studies and activities relating to Collaboration Products as part of any changes to Development Plans and timelines. 18 + + + + + + The current objective of the Collaboration is to achieve Marketing Authorization Approval in the US and other Major Markets for a Collaboration Product from one of the eight Pooled Compounds which can be used as a single agent and/or in combination with other therapeutically active components (including but not limited to a Long Acting Inhaled Corticosteroid) for the treatment and/or prophylaxis of one or more respiratory diseases by end 2009 for the single agent and 2010 for the first combination product and Development Plans and timelines will be developed and/or refined in an effort to achieve this objective. 4.3 Replacement Compounds. If within two years after the Effective Date, the Development of Collaboration Products containing any two of the Pooled Compounds contributed by a Party is discontinued due to Technical Failure, it will be the option of the Party who contributed the discontinued compounds to discover and offer up to the collaboration two Replacement Compounds as replacements for the discontinued compounds within twelve months following the discontinuation of the second failed compound. For the avoidance of doubt, any such new compound that satisfies the Criteria will automatically be accepted as a Pooled Compound in place of the relevant Party's discontinued compound, subject to Joint Steering Committee approval pursuant to Section 3.1.3(f). Nothing in the foregoing shall preclude either Party from having the option of offering up a Replacement Compound for a Pooled Compound at any time during the period referred to in Section 14.5 (subject to the Criteria being met and Joint Steering Committee approval pursuant to Section 3.1.3(f)). 4.4 Transfer of Data. As soon as practicable but in no event more than thirty (30) days after the Effective Date, the Parties shall determine what data and materials relating to TD-3327 and AMI-15471 are necessary for GSK's Development obligations pursuant to this Article 4, including any technology transfer required for API Compound manufacturing activities contemplated by Article 9, and establish a process for transferring copies of such data and material to GSK (including, to the extent available, in appropriate electronic format) or provide means of access thereto reasonably acceptable to GSK. 4.5 LABA Activity Inside and Outside of the Collaboration. 4.5.1 The intent of the Parties in respect of the Pooled Compounds is that such Pooled Compounds remain exclusive to this Collaboration and, subject to Sections 4.5.2 — 4.5.4 and Article 14 below, no activity in respect of such Pooled Compounds shall be permitted outside of this Agreement. 4.5.2 Subject to Article 14 and to Section 4.5.4, if prior to First Commercial Sale of a GSK Initially Pooled Compound or a GSK Replacement Compound, Development of such compound is discontinued under this Agreement ("GSK Discontinued Compound"), all rights in respect of such GSK Discontinued Compound shall revert in full to GSK and such GSK Discontinued Compound shall automatically fall outside of this Agreement except that (i) GSK shall thereafter be prohibited from carrying out any further clinical Development work or clinical activity in respect of such GSK Discontinued Compound inside the Field for at least four (4) years after the termination of this Agreement, and (ii) for the avoidance of doubt, GSK shall pay to Theravance a royalty on Net Sales of any such GSK Discontinued Compound in accordance with Section 14.9. 4.5.3 Subject to Article 14 and Section 4.5.4, if prior to First Commercial Sale of a Theravance Compound, Development of such compound is discontinued under this Agreement ("Theravance Discontinued Compound"), all rights in respect of such Theravance Discontinued Compound shall revert in full to Theravance and such Theravance Discontinued Compound shall 19 + + + + + + automatically fall outside of this Agreement except that (i) Theravance thereafter shall be prohibited from carrying out any further clinical Development work or clinical activity in respect of such Theravance Discontinued Compound inside the Field until after the termination of this Agreement, and (ii) for the avoidance of doubt, Theravance shall pay to GSK a royalty on Net Sales of any such Theravance Discontinued Compound in accordance with Section 14.9. 4.5.4 Notwithstanding Sections 4.5.2 and 4.5.3, for so long as there is one Collaboration Product being Developed under this Agreement, neither Party shall carry out clinical Development inside the Field with any Long Acting B2 Adrenoceptor Agonist that is not a Pooled Compound under this Agreement; provided, however, that this restriction shall not apply to any compound or product (including new product line extensions and/or re-formulation work) where the original compound or product is, as of the date of signature of this Agreement, already Commercialized. ARTICLE 5 COMMERCIALIZATION 5.1 Global Marketing Plans. 5.1.1 General. The Joint Project Committee shall be responsible for reviewing and approving a Global Marketing Plan for each Collaboration Product ("Marketing Plan"). Each Marketing Plan shall define the goals and objectives for Commercializing the Collaboration Products in the pertinent Calendar Year consistent with the applicable Development Plan. 5.1.2 Contents of Each Marketing Plan. The Marketing Plan for each Collaboration Product shall be prepared during the Calendar Year wherein, and where applicable, Phase III Studies for such Collaboration Product have commenced and shall be a rolling, three year plan, updated annually and shall contain at a minimum and as appropriate to current knowledge: (a) Results of market research and strategy, including market size, dynamics, growth, customer segmentation, customer targeting, competitive analysis and global Collaboration Product positioning; (b) Annual sales forecasts for Major Market Countries; (c) For each major Market Country (as available): sales plans which will include target number of sales representatives, detail order and target number of details (d) Core, global advertising and promotion programs and strategies, including literature, media plans, symposia and speaker programs; and (e) Core Phase III/Phase IV Studies to be conducted 5.2 Obligations for Commercialization. GSK shall use Diligent Efforts to Commercialize the Collaboration Products. 5.3 Commercialization. 5.3.1 GSK Responsibility. GSK shall have the sole right and responsibility for Commercialization of Collaboration Products for distribution and sale. GSK shall bear all costs 20 + + + + + + and expenses associated with the Commercialization of Collaboration Products for sale or distribution. (a) GSK shall have the sole right and responsibility to distribute, sell, record sales and collect payments for Collaboration Products. (b) GSK shall have the sole right and responsibility for establishing and modifying the terms and conditions with respect to the sale of Collaboration Products, including, without limitation, the price or prices at which the Collaboration Products will be sold, any discount applicable to payments or receivables, and similar matters. (c) GSK will be responsible for storage, order receipt, order fulfillment, shipping and invoicing of Collaboration Products. 5.3.2 Semi-Annual Reports. GSK shall provide the Joint Project Committee reports semi-annually. Such reports shall set forth in summary form the results of GSK's Commercialization activities performed during such semi-annual period in the Major Markets. 5.3.3 Exports to the United States. To the extent permitted by Law, the Parties shall use Diligent Efforts to prevent the Collaboration Products distributed for sale in a particular Country other than the United States from being exported to the United States for sale. ARTICLE 6 FINANCIAL PROVISIONS 6.1 Signing Payment; Equity Investment; One-Time Fee. 6.1.1 Signing Payment. In partial consideration for the acquisition of license rights under the Theravance Patents and the Theravance Know-How by GSK under this Agreement, GSK shall on the Effective Date, pay to Theravance a non-creditable, non-refundable amount of Ten Million United States Dollars (U.S. $10,000,000). 6.1.2 Stock Purchase. On the Effective Date, GSK will purchase 4,000,000 shares of Theravance Series E Preferred Stock at a price of U.S.$10.00 per share for total consideration of Forty Million United States Dollars (U.S. $40,000,000). Such purchase will be made pursuant to the Preferred Stock Purchase Agreement attached hereto as Schedule 6.1.2. 6.1.3 One-Time Fee for AMI-15471. Within thirty days following receipt by GSK of Theravance's written notification of the decision by Theravance to nominate AMI-15471 as a "development candidate," and in further partial consideration for the acquisition of license rights under the Theravance Patents and the Theravance Know-How by GSK under this Agreement, GSK shall pay to Theravance a non-creditable, non-refundable amount of Five Million United States Dollars (U.S.$5,000,000). AMI-15471 will be declared a development candidate when Theravance (a) completes a study demonstrating lack of activity in the hERG assay (as per the Criteria in Schedule 1.19), and (b) establishes AMI- 15471 in a stable crystalline form. 21 + + + + + + 6.1.4 One-Time Fee for Each Theravance New Compound. Within thirty days following the acceptance by the Joint Project Committee or the Joint Steering Committee of each of the two Theravance New Compounds to be contributed to the collaboration pursuant to Section 4.1, and in further partial consideration for the acquisition of license rights under the Theravance Patents and the Theravance Know-How by GSK under this Agreement, GSK shall pay to Theravance a non-creditable, non-refundable amount of Five Million United States Dollars (U.S.$5,000,000) for each such Theravance New Compound. 6.2 Milestone Payments. 6.2.1 General. In further consideration of the covenants and agreements contained herein, the Parties shall also pay to each other the payments set forth below for each such Development milestone referred to therein (each, a "Development Milestone"); provided always that each such payment shall be made only one time for each Collaboration Product regardless of how many times such Development Milestones are achieved for such Collaboration Product, and no payment shall be owed for a Development Milestone which is not reached (except that, upon achievement of a Development Milestone for a particular Collaboration Product, any previous Development Milestone for that Collaboration Product for which payment was not made shall be deemed achieved and payment therefore shall be made); provided further that, in the event that more than one Development Milestone is achieved with respect to the same Collaboration Product at one time, then all applicable payments under Section 6.2 shall be made. For example, if TD-3327 as a single-agent Collaboration Product and a LABA/ICS Combination Product that contains TD- 3327 are approved in the same Marketing Authorization Approval, then in addition to the relevant milestone for the single-agent TD-3327 Collaboration Product, the relevant milestone for the LABA/ICS Combination Product shall be paid simultaneously. In the event of termination of development of a particular Collaboration Product and an alternative Collaboration Product replaces such Terminated Collaboration Product then milestone payments for such replacement compound shall not be paid in respect of milestones already achieved by the Terminated Collaboration Product. For example, if development of TD-3327 is terminated and TD-3327 is replaced by a another Collaboration Product which contains a Theravance compound, milestone payments for such replacement compound will only commence for milestones achieved that have not already been achieved by TD-3327. 6.2.2 GSK to Theravance. GSK shall make the following milestone payments to Theravance upon the achievement of the indicated Development Milestone for the first Collaboration Product in which the Long-Acting β2 Adrenoceptor Agonist is a Theravance Compound, and for the first LABA/ICS Combination Product in which the Long-Acting β2 Adrenoceptor Agonist is a Theravance Compound: Milestone + + Amount Initiation of Phase I * + + U.S.$10 Million Initiation of Phase IIa** + + U.S.$10 Million Initiation of Phase IIb** + + U.S.$5 Million Initiation of Phase III + + U.S.$25 Million 22 + + + + + + Milestone + + Amount Registration + + + + + + + +U.S. + + U.S.$30 Million Europe + + U.S.$15 Million Japan + + U.S.$10 Million Launch + + + + + + + +U.S. + + U.S.$30 Million Europe + + U.S.$15 Million Japan + + U.S.$10 Million Annual Worldwide Net Sales over U.S.$500 Million for single agent Collaboration Product + + + +U.S.$10 Million per year for first five years for single agent Collaboration Product + + Annual Worldwide Net Sales over U.S.$500 Million for LABA/ICS Combination Product + + + +U.S.$20 Million per year for first five years for LABA/ICS Combination Product + + + +* GSK will make a Phase I milestone payment for both TD-3327 and AMI-15471. The Phase I milestone for TD-3327 is defined as initiation of the methacholine challenge portion of the Phase I Study in normal volunteers and will trigger a payment of U.S. $10 Million. The Phase I milestone for AMI-15471 is defined as initiation of the first Phase I Study in normal volunteers and will trigger a payment of U.S. $10 Million. **Phase IIa is defined as initiation of the first single dose study in patients where such study is statistically powered for efficacy based on FEV . Phase IIb is defined as initiation of the first four (4) week dosing, safety and efficacy study in patients. Other Combination Products that contain a Long-Acting β2 Adrenoceptor Agonist that is a Theravance Compound are not subject to milestone payments by GSK only if all milestone payments through launch have otherwise been made to Theravance from any Collaboration Product as both a single-agent and as a combination product. The Parties intend that if the collaboration is successful in launching at least two Collaboration Products that contain a Theravance Compound, Theravance be paid the applicable milestones through launch for two products. If GSK, either individually or as a member of the Joint Steering Committee or Joint Project Committee, discontinues the Development of a single agent Collaboration Product that is a Theravance Compound for reasons other than Technical Failure, and such compound is the LABA in a LABA/ICS Combination Product or in an Other Combination Product, it will compensate Theravance for the unpaid milestone payments otherwise due to Theravance under Section 6.2.2 by adding the unpaid milestone amounts for such discontinued single agent product onto the corresponding milestone payments for the relevant Combination Product. 6.2.3 Theravance to GSK. Theravance shall make the following milestone payments to GSK upon the achievement of the indicated Development Milestone for the first Collaboration Product in which the Long-Acting β2 Adrenoceptor Agonist is a GSK Compound 23 + +1 + + + + + + and for the first LABA/ICS Combination Product in which the Long-Acting β2 Adrenoceptor Agonist is a GSK Compound: Milestone + + Amount Registration + + + + + + + +US + + U.S.$30 Million Europe + + U.S.$15 Million Japan + + U.S.$10 Million Launch + + + + + + + +US + + U.S.$30 Million Europe + + U.S.$15 Million Japan + + U.S.$10 Million Other Combination Products that contain a Long-Acting β2 Adrenoceptor Agonist that is a GSK Compound are not subject to milestone payments by Theravance only if all milestone payments through launch have otherwise been made to GSK from any Collaboration Product as both a single-agent and as a combination product. The Parties intend that if the collaboration is successful in launching at least two Collaboration Products that contain a GSK Compound, GSK be paid the applicable milestones through launch for two products. 6.2.4 Notification and Payment. In the event a Party achieves a Development Milestone, such Party shall promptly, but in no event more than ten (10) days after the achievement of each such Development Milestone, notify the other Party in writing of the achievement of same. For all Development Milestones achieved, each Party shall promptly, but in no event more than thirty (30) days after notification of the achievement of each such Development Milestone, remit payment to the other Party for such Development Milestone. 6.3 Payment of Royalties on Net Sales. 6.3.1 Royalty on Single-Agent Collaboration Products and LABA/ICS Combination Products. Within twenty (20) days after the end of each Calendar Quarter , GSK shall pay Theravance royalty payments based on Net Sales in such Calendar Quarter during the Term as follows: On total Annual Worldwide Net Sales up to and including U.S. $3 Billion: + + 15 % On total Annual Worldwide Net Sales greater than U.S. $3 Billion: + + 5 % it being understood that Net Sales of a single agent Collaboration Product will be combined with Net Sales of a LABA/ICS Combination Product for purposes of the foregoing royalty calculation. The quarterly royalty payments made under this Section 6.3.1 may be based on estimated Net Sales. Within thirty (30) days after the end of each Calendar Quarter, GSK shall calculate the actual amount of Net Sales for the previous Calendar Quarter and either credit or debit the difference between such actual and projected amount on the succeeding Calendar Quarter's royalty payment to Theravance. As soon as practical following the end of each Calendar Month, but in no event later than the 10 business day of the following month, GSK will provide Theravance with an estimate of Net Sales for such Calendar Month. 24 + +th + + + + + + The royalties payable under this Section 6.3 shall be paid on a Country-by-Country basis from the date of first commercial sale of each Collaboration Product in a particular Country for the Term of the Collaboration. 6.3.2 Royalty Adjustment. The 15% royalty payable on the first U.S. $3 Billion of total annual worldwide Net Sales under this Section 6.3 shall be reduced to 12% if all of the following occur: (i) all Theravance Compounds are discontinued by the collaboration for Technical Failure; (ii) Theravance only contributes one Theravance New Compound to the collaboration within 18 months following the Effective Date; and (iii) the Collaboration Product upon which the royalty is payable contains a LABA that is one of the GSK Initially Pooled Compounds. The 15% royalty payable on the first U.S. $3 Billion of total annual worldwide Net Sales under this Section 6.3 shall be reduced to 10% if all of the following occur: (i) all Theravance Compounds are discontinued by the collaboration for Technical Failure; (ii) Theravance fails to contribute any Theravance New Compound to the collaboration within 18 months following the Effective Date; and (iii) the Collaboration Product upon which the royalty is payable contains a LABA that is one of the GSK Initially Pooled Compounds. Nothing in the foregoing shall affect other royalties owed under this Agreement. 6.3.3 Royalties on Other Collaboration Products Launched After the LABA/ICS Combination Product. For any Other Collaboration Product launched after the LABA/ICS Combination Product, GSK shall within twenty (20) days after the end of each Calendar Quarter, pay Theravance royalty payments based on Net Sales in such Calendar Quarter during the Term as follows: + +Annual Net Sales + + + +Percentage Royalty + + Up to U.S.$750 Million + + 6.5 % Additional Net Sales up to U.S.$1.25 Billion + + 8.0 % Additional Net Sales up to U.S.$2.25 Billion + + 9.0 % Net Sales exceeding U.S.$2.25 Billion + + 10.0 % For the avoidance of doubt, the Parties agree that the royalty set forth in this Section 6.3.3 shall only be effective if GSK has launched and is selling a LABA/ICS Combination Product that is subject to the royalties under Section 6.3.1. If GSK is not selling a LABA/ICS Combination Product, then the royalty set forth in Section 6.3.1 shall apply to the first Other Combination Product launched by GSK, provided such Other Combination Product does not contain a product in-licensed by GSK; if such Other Combination Product contains a product in-licensed by GSK, then the royalty payable to Theravance will be reduced by 50% of any running royalties paid to a Third Party, provided that in no case will the royalty payable to Theravance be less than set forth in this Section 6.3.3. 25 + + + + + + 6.4 Royalty Responsibilities; Net Sales Reports. 6.4.1 Payments to Third Parties. (a) If, as a result of a settlement approved by both Parties or as a result of a final non-appealable judgment, GSK is required to pay any amounts to a Third Party directly because using or selling a Theravance Compound is found to infringe the rights of such Third Party, GSK shall deduct fifty percent (50%) of any such amount paid to such Third Party from the royalties otherwise due Theravance for the Collaboration Product containing such Theravance Compound, provided in no event shall such reduction reduce the royalties otherwise payable to Theravance during any Calendar Year by more than fifty percent (50%); provided, further, that any excess deduction shall be carried over into subsequent years of this Agreement until the full deduction is taken. (b) GSK shall pay any amounts owed to a Third Party as a result of the use of GSK Patents or GSK Know-How with respect to sales of Collaboration Products and shall not deduct any of such amounts from the royalties due Theravance. The foregoing is subject to Section 6.3.3. 6.4.2 Net Sales Report. Within thirty (30) days after the end of each Calendar Quarter, GSK shall submit to Theravance a written report setting forth Net Sales in the Territory on a Country-by-Country and Collaboration Product-by-Collaboration Product basis during such Calendar Quarter, total royalty payments due Theravance, relevant market share data and any payments made to any Third Party pursuant to Section 6.4.1(a) (each a "Net Sales Report"). 6.5 GAAP. All financial terms and standards defined or used in this Agreement for sales or activities occurring in the United States shall be governed by and determined in accordance with United States generally accepted accounting principles, consistently applied. Except as otherwise set forth herein, all financial terms and standards defined or used in this Agreement for sales or activities occurring outside the United States shall be governed by and determined in accordance with United Kingdom generally accepted accounting principles, consistently applied. 6.6 Currencies. Monetary conversion from the currency of a foreign country in which Collaboration Product is sold into US Dollars shall be calculated in accordance with either (a) the methodology referred to in GSK's then current Corporate Finance Reporting Policy or (b) as otherwise may be mutually agreed by the Parties. The following summarizes GSK's current methodology applied in accordance with its current Corporate Finance Reporting System: the cumulative year-to-date Average Rates are calculated by determining the average of (i) the preceding 31st December Spot Rate plus (ii) the Closing Spot Rates of the relevant months to date using the exact figures provided by the Reuters 2000 download. (By way of example, the Average Rate for the five months from January, 2002 to May, 2002 would be computed by taking the sum of the Spot Rates for the preceding 31st December, 2001, plus the month-end Spot Rates for the five months to May, 2002, divided by six). 6.7 Manner of Payments. All sums due to either Party under this Section 6 shall be payable in United States Dollars by bank wire transfer in immediately available funds to such bank account(s) as each of GSK and Theravance shall designate. GSK shall notify Theravance as to the date and amount of any such wire transfer to Theravance at least five (5) Business Days prior to such transfer. Theravance shall notify GSK as to the date and amount of any such wire transfer to GSK at least five (5) Business Days prior to such transfer. 26 + + + + + + 6.8 Interest on Late Payments. If either Theravance or GSK shall fail to make a timely payment pursuant to this Article 6, any such payment that is not paid on or before the date such payment is due under this Agreement shall bear interest, to the extent permitted by applicable law, at the average one-month London Inter-Bank Offering Rate (LIBOR) for the United States Dollar as reported from time to time in The Wall Street Journal, effective for the first date on which payment was delinquent and calculated on the number of days such payment is overdue or, if such rate is not regularly published, as published in such source as the Joint Steering Committee agrees. 6.9 Tax Withholding. 6.9.1 Any taxes, levies or other duties ("Taxes") paid or required to be withheld under the appropriate local tax laws by one of the Parties ("Withholding Party") on account of monies payable to the other Party under this Agreement shall, subject to Sections 6.9.2 and 6.9.3, be deducted from the amount of monies otherwise payable to the other Party under this Agreement. The Withholding Party shall secure and send to the other Party within a reasonable period of time proof of any such Taxes paid or required to be withheld by Withholding Party for the benefit of the other Party. 6.9.2 If GSK or any GSK Affiliate is or becomes liable to withhold any taxes from payments made to Theravance under Sections 6.1 and 6.2 of this Agreement, then GSK shall pay to Theravance an amount equal to the amount GSK or the applicable GSK Affiliate owes to the relevant tax authority provided always that if Theravance is able to obtain credit for any taxes withheld ("Creditable Taxes") against any liability to tax either in the year in which the receipt is taxable or any preceding years, Theravance shall reimburse to GSK an amount equivalent to the Creditable Taxes. Theravance shall provide GSK with such reasonable evidence as GSK may reasonably request to determine whether the taxes are creditable against taxes payable by Theravance. 6.9.3 If GSK or any GSK Affiliate is or becomes liable to withhold any taxes from payments made to Theravance under Section 6.3, then such taxes may be withheld by GSK or the applicable GSK Affiliate up to a limit of five percent (5%) of the relevant payment. GSK shall pay to Theravance an amount equal to the amount GSK owes to the relevant tax authority in excess of such five percent (5%) provided always that if Theravance is able to obtain credit for any taxes withheld ("Creditable Taxes") against any liability to tax either in the year in which the receipt is taxable or any preceding years, Theravance shall reimburse to GSK an amount equivalent to the Creditable Taxes. Theravance shall provide GSK with such reasonable evidence as GSK may reasonably request to determine whether the taxes are creditable against taxes payable by Theravance. 6.10 Financial Records; Audits. GSK shall keep, and shall cause its Affiliates and sublicensees to keep, such accurate and complete records of Net Sales as are necessary to determine the amounts due to Theravance under this Agreement and such records shall be retained by GSK or any of its Affiliates or sublicensees (in such capacity, the "Recording Party") for at least the three preceding Calendar Years to which the Net Sales relate. During normal business hours and with reasonable advance notice to the Recording Party, such records shall be made available for inspection, review and audit, at the request and expense of Theravance, by an independent certified public accountant, or the local equivalent, appointed by Theravance and reasonably acceptable to the Recording Party for the sole purpose of verifying the accuracy of the Recording Party's accounting reports and payments made or to be made pursuant to this 27 + + + + + + Agreement; provided, however that such audits may not be performed by Theravance more than once per Calendar Year. Such accountants shall be instructed not to reveal to Theravance the details of its review, except for (i) such information as is required to be disclosed under this Agreement and (ii) such information presented in a summary fashion as is necessary to report the accountants' conclusions to Theravance, and all such information shall be deemed Confidential Information of the Recording Party; provided, however, that in any event such information may be presented to Theravance in a summary fashion as is necessary to report the accountants' conclusions. All costs and expenses incurred in connection with performing any such audit shall be paid by Theravance unless the audit discloses at least a five percent (5%) shortfall, in which case the Recording Party will bear the full cost of the audit for such Calendar Year. Theravance will be entitled to recover any shortfall in payments due to it as determined by such audit, plus interest thereon calculated in accordance with Section 6.8, or alternatively shall have the right to offset and deduct any such shortfall in payments due to it against payments Theravance is otherwise required to make to the Reporting Party under this Agreement. The documents from which were calculated the sums due under this Article 6 shall be retained by the relevant Party during the Term. ARTICLE 7 PROMOTIONAL MATERIALS AND SAMPLES 7.1 Promotional Materials. 7.1.1 Review of Core Promotional Materials. Subject to applicable Law, in accordance with the direction of the Joint Project Committee, the Parties will jointly, through consultation and with the assistance of each other, review the core Promotional Materials. The relevant legal or regulatory personnel of each Party shall have the opportunity to review and comment on all such core Promotional Materials prior to use and such comments shall be considered by the Joint Project Committee in the review of such core Promotional Materials. 7.1.2 Markings of Promotional Materials. To the extent required by applicable Law, and further to the extent reasonably practicable, all Promotional Materials will indicate the contribution of the license from Theravance for the Collaboration Products. Subject to the foregoing, the Theravance Housemark and the GSK Housemark shall both be given exposure and prominence on all promotional materials, labelling, package inserts or outserts and packaging for the Collaboration Products. 7.2 Samples. Packaging, package inserts and outserts, Sample labels and labeling shall each contain reference to Theravance and GSK indicating, in the case of Theravance, the contribution of the license from Theravance for the Collaboration Products, if appropriate, and as may be required under applicable FDA rules and regulations. 7.3 Statements Consistent with Labeling. GSK shall ensure that its sales representatives detail the Collaboration Products in a fair and balanced manner and consistent with the requirements of the Federal Food, Drug and Cosmetic Act of the United States, as amended, including, but not limited to, the regulations at 21 C.F.R. (S) 202 in the United States. 7.4 Implications of Change in Control in Theravance. In the event that there is a Change in Control of Theravance and the references contemplated in Sections 7.1.2 and 7.2 are no longer made to "Theravance,", then other than to the extent required by applicable Law, GSK 28 + + + + + + shall have the right, not to be unreasonably exercised, to terminate its obligations under Sections 7.1 and 7.2. ARTICLE 8 REGULATORY MATTERS 8.1 Governmental Authorities. GSK shall be solely responsible for communicating with Governmental Authorities and will keep Theravance informed, through the Joint Project Committee and Joint Steering Committee, of any significant issue or issues arising therefrom. 8.2 Filings. GSK shall also be solely responsible for filing drug approval applications for Collaboration Products and will use Diligent Efforts in seeking appropriate approvals in those Countries of the Territory for Collaboration Products as GSK reasonably determines and sees fit. Such regulatory documents for each filing shall be centralized and held at the offices of GSK. Theravance shall provide such reasonable assistance as may be required by GSK where liaison between the Parties is, or may be, necessary to enable GSK to fulfill its responsibilities hereunder. GSK shall be responsible for maintaining the Approvals obtained under this Section and shall solely own all such Approvals in the Territory. GSK shall be fully responsible for bearing all costs and expense associated with undertaking and completing said registration activities in the Territory, including but not limited to the costs of preparing and prosecuting applications for such Approvals and fees payable to regulatory agencies in obtaining and maintaining same. 8.3 Exchange of Drug Safety Information. Subject to the second sentence of this Section 8.3, GSK shall be responsible for recording, investigating, summarizing, notifying, reporting and reviewing all Adverse Drug Experiences in accordance with Law and shall require that its Affiliates (i) adhere to all requirements of applicable Laws which relate to the reporting and investigation of Adverse Drug Experiences, and (ii) keep the Joint Project Committee apprised on a regular basis of such matters arising therefrom. The foregoing shall be subject to any of Theravance's own clinical safety obligations mandated by Law as a result of its ongoing Development activity related to TD-3327 (as such activity is more specifically referred to in Article 4) and, in acknowledgement of this, it is thereby contemplated that the Parties' respective clinical safety groups may need to discuss and agree, at the appropriate time after the Effective Date, appropriate safety data exchange procedures related to same. 8.4 Recalls or Other Corrective Action. Each Party shall, as soon as practicable, notify the other Party of any recall information received by it in sufficient detail to allow the Parties to comply with any and all applicable Laws. GSK shall promptly notify Theravance of any material actions to be taken by GSK with respect to any recall or market withdrawal or other corrective action related to a Collaboration Product prior to such action to permit Theravance a reasonable opportunity to consult with GSK with respect thereto. All costs and expenses with respect to a recall, market withdrawal or other corrective action shall be borne by GSK unless such recall, market withdrawal or other corrective action was due solely to the negligence, willful misconduct or breach of this Agreement by Theravance. GSK shall have sole responsibility for and shall make all decisions with respect to any recall, market withdrawals or any other corrective action related to the Collaboration Products. 8.5 Events Affecting Integrity or Reputation. During the Term, the Parties shall notify each other immediately of any circumstances of which they are aware and which could impair the integrity and reputation of the Collaboration Products or if a Party is threatened by the 29 + + + + + + unlawful activity of any Third Party in relation to the Collaboration Products, which circumstances shall include, by way of illustration, deliberate tampering with or contamination of the Collaboration Products by any Third Party as a means of extorting payment from the Parties or another Third Party. In any such circumstances, the Parties shall use Diligent Efforts to limit any damage to the Parties and/or to the Collaboration Products. The Parties shall promptly call a Joint Steering Committee meeting to discuss and resolve such circumstances. ARTICLE 9 ORDERS; SUPPLY AND RETURNS 9.1 Orders and Terms of Sale. Except as otherwise expressly stated in this Agreement, GSK shall have the sole right to (i) receive, accept and fill orders for the Collaboration Products, (ii) control invoicing, order processing and collection of accounts receivable for the Collaboration Products sales, (iii) record the Collaboration Products sales in its books of account, and (iv) establish and modify the commercial terms and conditions with respect to the sale and distribution of the Collaboration Products, including without limitation matters such as the price at which the Collaboration Products will be sold and whether any discounts, rebates or other deductions should be made, paid or allowed. 9.2 Supply of API Compound and Formulated Collaboration Product for Development. 9.2.1 Supply of API Compound for Development. Subject to the terms and conditions of this Agreement, GSK shall conduct or have conducted any chemical process development required to develop a commercially acceptable process for making API Compound and obtain supply for worldwide requirements of API Compound. Notwithstanding the foregoing, Theravance may transfer to GSK, at cost, whatever supply it has on hand of TD-3327 API and/or AMI-15471 API and/or intermediate materials for API manufacture, within specification as of the Effective Date, such cost not to exceed U.S. $1,230,000. API Compound requirements for Development activities shall be set forth in the relevant Development Plan and shall be periodically updated by the Joint Project Committee. 9.2.2 Supply of Formulated Collaboration Products for Development. Subject to the terms and conditions of this Agreement, GSK shall obtain supply for worldwide requirements of formulated Collaboration Products. Notwithstanding the foregoing, Theravance agrees to transfer to GSK whatever supply it has on hand of formulated TD-3327, within specification, at cost as of the Effective Date, such cost not to exceed U.S. $175,000. Formulated Collaboration Product requirements for Development activities shall be set forth in the relevant Development Plan and shall be periodically updated by the Joint Project Committee. 9.3 Supply of API Compound for Commercial Requirements. Subject to the terms and conditions of this Agreement, GSK shall obtain supply of API Compound. A forecast for API Compound requirements for Commercialization of the Collaboration Products shall be prepared and periodically updated by the Joint Project Committee and coordinated with the applicable Marketing Plans for Collaboration Products. 9.4 Supply of Collaboration Products for Commercialization. Subject to the terms and conditions of this Agreement, GSK shall obtain supply of the commercial requirements of formulated, packaged and labeled Collaboration Products. Such formulated, packaged and labeled Collaboration Products shall be manufactured and supplied in accordance with all 30 + + + + + + applicable Laws and current Good Manufacturing Practices. GSK shall be solely responsible for secondary manufacture, packaging and labeling of the Collaboration Product. 9.5 Inventories. GSK and its Product Suppliers shall maintain an inventory of API Compound and Collaboration Products in accordance with their normal practices and so as to ensure fulfillment of its respective supply obligations herein. ARTICLE 10 CONFIDENTIAL INFORMATION 10.1 Confidential Information. Each of GSK and Theravance shall keep all Confidential Information received from the other Party with the same degree of care it maintains the confidentiality of its own Confidential Information. Neither Party shall use such Confidential Information for any purpose other than in performance of this Agreement or disclose the same to any other Person other than to such of its agents who have a need to know such Confidential Information to implement the terms of this Agreement or enforce its rights under this Agreement. A Receiving Party shall advise any agent who receives such Confidential Information of the confidential nature thereof and of the obligations contained in this Agreement relating thereto, and the Receiving Party shall ensure that all such agents comply with such obligations as if they had been a Party hereto. Upon termination of this Agreement, the Receiving Party shall return or destroy all documents, tapes or other media containing Confidential Information of the Disclosing Party that remain in the Receiving Party's or its agents' possession, except that the Receiving Party may keep one copy of the Confidential Information in the legal department files of the Receiving Party, solely for archival purposes. Such archival copy shall be deemed to be the property of the Disclosing Party, and shall continue to be subject to the provisions of this Article 10. Notwithstanding anything to the contrary in this Agreement, the Receiving Party shall have the right to disclose this Agreement or Confidential Information provided hereunder if, in the reasonable opinion of the Receiving Party's legal counsel, such disclosure is necessary to comply with the terms of this Agreement, or the requirements of any Law. Where possible, the Receiving Party shall notify the Disclosing Party of the Receiving Party's intent to make such disclosure pursuant to the provision of the preceding sentence sufficiently prior to making such disclosure so as to allow the Disclosing Party adequate time to take whatever action the Disclosing Party may deem to be appropriate to protect the confidentiality of the information. The Receiving Party will cooperate reasonably with the Disclosing Party's efforts to protect the confidentiality of the information. Each Party will be liable for breach of this Article 10 by any of its Affiliates. 10.2 Permitted Disclosure and Use. Notwithstanding Section 10.1, a Party may disclose Confidential Information belonging to the other Party only to the extent such disclosure is reasonably necessary to: (a) obtain Marketing Authorization of a Collaboration Product; (b) enforce the provisions of this Agreement; or (c) comply with Laws. If a Party deems it necessary to disclose Confidential Information of the other Party pursuant to this Section 10.2, such Party shall give reasonable advance notice of such disclosure to the other Party to permit such other Party sufficient opportunity to object to such disclosure or to take measures to ensure confidential treatment of such information. The Receiving Party will cooperate reasonably with the Disclosing Party's efforts to protect the confidentiality of the information. 10.3 Publications. Subject to any Third Party rights existing as of the Effective Date, each Party shall submit to the Joint Project Committee for review and approval all proposed academic, scientific and medical publications and public presentations relating to a Collaboration Product or any research or Development activities under this Agreement for review in connection 31 + + + + + + with preservation of Patent Rights, and trade secrets and/or to determine whether Confidential Information should be modified or deleted from the proposed publication or public presentation. Written copies of such proposed publications and presentations shall be submitted to the Joint Project Committee no later than sixty (60) days before submission for publication or presentation and the Joint Project Committee shall provide its comments with respect to such publications and presentations within ten (10) Business Days of its receipt of such written copy. The review period may be extended for an additional sixty (60) days if a representative of the non-publishing Party on the Joint Project Committee can demonstrate a reasonable need for such extension including, but not limited to, the preparation and filing of patent applications. By mutual agreement of the Parties, this period may be further extended. The Parties will each comply with standard academic practice regarding authorship of scientific publications and recognition of contribution of other parties in any publications relating to the Collaboration Products or any research or Development activities under this Agreement. 10.4 Public Announcements. Except as may be expressly permitted under Section 10.3 or required by applicable Laws and subject to the final two sentences of this Section 10.4, neither Party will make any public announcement of any information regarding this Agreement, the Collaboration Products or any research or Development activities under this Agreement without the prior written approval of the other Party, which approval shall not be withheld unreasonably. Once any statement is approved for disclosure by the Parties or information is otherwise made public in accordance with the preceding sentence, either Party may make a subsequent public disclosure of the contents of such statement without further approval of the other Party. Notwithstanding the foregoing, within sixty (60) days following the Effective Date, appropriate representatives of the Parties will meet and agree upon a process and principles for reaching timely consensus on how the Parties will make public disclosure concerning this Agreement, the Collaboration Products or any research and Development activities under this Agreement. 10.5 Confidentiality of This Agreement. The terms of this Agreement shall be Confidential Information of each Party and, as such, shall be subject to the provisions of this Article 10. Either party may disclose the terms of this Agreement if, in the opinion of its counsel, such disclosure is required by Law. In such event, the disclosing Party will seek appropriate confidentiality of those portions of the Agreement for which confidential treatment is typically permitted by the relevant Governmental Authority. 10.6 Termination of Prior Confidentiality Agreements. Except as expressly provided in this Section 10.6, this Agreement supercedes the Mutual Confidential Disclosure Agreement (the "MCDA") between the Parties dated April 10, 2002. Except as expressly provided in this Section 10.6 and in Paragraph 8 of the Confidentiality Agreement between the Parties dated October 2, 2002 (the "Patent CDA"), this Agreement supersedes the Patent CDA. Except as set forth in Paragraph 8 of the Patent CDA, all information disclosed pursuant to the MCDA and the Patent CDA shall be subject to the provisions of this Article 10. 10.7 Survival. The obligations and prohibitions contained in this Article 10 shall survive the expiration or termination of this Agreement for a period of ten (10) years. 32 + + + + + + ARTICLE 11 REPRESENTATIONS AND WARRANTIES; COVENANTS 11.1 Mutual Representations and Warranties. Theravance and GSK each represents and warrants to the other as of the Effective Date that: 11.1.1 Such Party (a) is a company duly organized, validly existing, and in good standing under the Laws of its incorporation; (b) is duly qualified as a corporation and in good standing under the Laws of each jurisdiction where its ownership or lease of property or the conduct of its business requires such qualification, where the failure to be so qualified would have a material adverse effect on its financial condition or its ability to perform its obligations hereunder; (c) has the requisite corporate power and authority and the legal right to conduct its business as now conducted and hereafter contemplated to be conducted; (d) has or will obtain all necessary licenses, permits, consents, or approvals from or by, and has made or will make all necessary notices to, all Governmental Authorities having jurisdiction over such Party, to the extent required for the ownership and operation of its business, where the failure to obtain such licenses, permits, consents or approvals, or to make such notices, would have a material adverse effect on its financial condition or its ability to perform its obligations hereunder; and (e) is in compliance with its charter documents; 11.1.2 The execution, delivery and performance of this Agreement by such Party and all instruments and documents to be delivered by such Party hereunder (a) are within the corporate power of such Party; (b) have been duly authorized by all necessary or proper corporate action; (c) do not conflict with any provision of the charter documents of such Party; (d) will not, to the best of such Party's knowledge, violate any law or regulation or any order or decree of any court of governmental instrumentality; (e) will not violate or conflict with any terms of any indenture, mortgage, deed of trust, lease, agreement, or other instrument to which such Party is a party, or by which such Party or any of its property is bound, which violation would have a material adverse effect on its financial condition or on its ability to perform its obligations hereunder; 11.1.3 This Agreement has been duly executed and delivered by such Party and constitutes a legal, valid and binding obligation of such Party, enforceable against such Party in accordance with its terms, except as such enforceability may be limited by applicable insolvency and other Laws affecting creditors' rights generally, or by the availability of equitable remedies; and 11.1.4 All of its employees, officers, and consultants have executed agreements or have existing obligations under law requiring assignment to such Party of all Inventions made by such individuals during the course of and as the result of their association with such Party, and obligating such individuals to maintain as confidential such Party's Confidential Information. 11.1.5 Nothing contained in this Agreement shall give a Party the right to use the Confidential Information received from the other Party in connection with any activity other than Development and Commercialization of a Pooled Compound or Collaboration Product consistent with this Agreement. 11.1.6 As soon as practicably possible after the Effective Date, the Parties will each deliver to each other a schedule listing (i) in the case of GSK, GSK Patents as of the date of signature of this Agreement and (ii) in the case of Theravance, Theravance Patents as of the date of signature of this Agreement. 33 + + + + + + 11.2 Additional GSK Representations and Warranties. GSK further represents, warrants and covenants to Theravance that: 11.2.1 It has utilized its own scientific, marketing and distribution expertise and experience to analyze and evaluate both the scientific and commercial value of this collaboration and has solely relied on such analysis and evaluations in deciding to enter into this Agreement; 11.2.2 Neither GSK nor any of its Affiliates is a party to or otherwise bound by any oral or written contract or agreement that will result in any Person obtaining any interest in, or that would give to any Person any right to assert any claim in or with respect to, any of GSK's rights granted under this Agreement; 11.2.3 There is no claim or demand of any person or entity pertaining to, or any proceeding which is pending or, to the knowledge of GSK, threatened, that challenges the rights of Theravance in respect of any GSK Know-How or GSK Patents, or that claims that any default exists under any license with respect to any GSK Know-How or GSK Patents to which GSK is a party, except where such claim, demand or proceeding would not materially and adversely affect the ability of GSK to carry out its obligations under this Agreement; and 11.2.4 Having carried out and completed diligent searches in relation to the GSK Patents, and other than as disclosed to Theravance's counsel by GSK's counsel, GSK is not aware, nor has been made aware, of any conflict or likely future conflict with the intellectual property rights of any Third Party with respect to GSK Patents. 11.3 Additional Theravance Representations and Warranties. Theravance further represents and warrants to GSK as of the Effective Date that: 11.3.1 Having carried out and completed diligent searches in relation to the Theravance Patents, and other than as disclosed to GSK's counsel by Theravance's counsel, Theravance is not aware, nor has been made aware, of any conflict or likely future conflict with the intellectual property rights of any Third Party with respect to Theravance Patents. Theravance has not received notice from any Third Party of a claim that an issued patent of such Third Party would be infringed by the manufacture, distribution, marketing or sale of the Collaboration Products under this Agreement; 11.3.2 To Theravance's knowledge, the Theravance Patents are not subject to any pending or any threatened re-examination, opposition, interference or litigation proceedings; 11.3.3 Theravance has not received notice from any Third Party of a claim asserting the invalidity, misuse, unregisterability or unenforceability of any of the Theravance Patents, or challenging its right to use or ownership of any of the Theravance Patents or the Theravance Know-How, or making any adverse claim of ownership thereof; 11.3.4 Theravance has not received notice from any Third Party that any trade secrets or other intellectual property rights of such Third Party would be misappropriated by the development and reduction to practice of the Theravance Patents and Theravance Know-How; and 34 + + + + + + 11.3.5 Theravance has, up to and including the Effective Date, furnished GSK with all material information requested by GSK concerning the quality, toxicity, safety and/or efficacy concerns that may materially impair the utility and/or safety of the Compound or Collaboration Products. 11.4 Covenants. Each Party hereby covenants and agrees during the Term that it shall carry out its obligations or activities hereunder in accordance with (i) the terms of this Agreement and (ii) all applicable Laws. 11.5 Disclaimer of Warranty. Subject to the specific warranties and representations given under Sections 11.1 through and including 11.3, nothing in this Agreement shall be construed as a warranty or representation by either Party (i) that any Collaboration Product made, used, sold or otherwise disposed of under this Agreement is or will be free from infringement of patents, copyrights, trademarks, industrial design or other intellectual property rights of any Third Party, (ii) regarding the effectiveness, value, safety, non-toxicity, patentability, or non-infringement of any patent technology, the Collaboration Products or any information or results provided by either Party pursuant to this Agreement or (iii) that any Collaboration Product will obtain Marketing Authorization or appropriate pricing approval. Each Party explicitly accepts all of the same as experimental and for development purposes, and without any express or implied warranty from the other Party. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, EACH PARTY EXPRESSLY DISCLAIMS, WAIVES, RELEASES, AND RENOUNCES ANY WARRANTY, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. ARTICLE 12 INDEMNIFICATION 12.1 Indemnification by GSK. Subject to Sections 12.4 and 13.2, GSK shall defend, indemnify and hold harmless Theravance and its Affiliates and each of their officers, directors, shareholders, employees, successors and assigns from and against all Claims of Third Parties, and all associated Losses, to the extent arising out of (a) GSK's negligence or willful misconduct in performing any of its obligations under this Agreement, (b) a breach by GSK of any of its representations, warranties, covenants or agreements under this Agreement, or (c) the manufacture, use, handling, storage, marketing, sale, distribution or other disposition of Collaboration Products by GSK, its Affiliates, agents or sublicensees, except to the extent such losses result from the negligence or willful misconduct of Theravance. 12.2 Indemnification by Theravance. Subject to Sections 12.4 and 13.2, Theravance shall defend, indemnify and hold harmless GSK and its Affiliates and each of their officers, directors, shareholders, employees, successors and assigns from and against all Claims of Third Parties, and all associated Losses, to the extent arising out of (a) Theravance's negligence or willful misconduct in performing any of its obligations under this Agreement, or (b) a breach by Theravance of any of its representations, warranties, covenants or agreements under this Agreement. 35 + + + + + + 12.3 Procedure for Indemnification. 12.3.1 Notice. Each Party will notify promptly the other in writing if it becomes aware of a Claim (actual or potential) by any Third Party (a "Third Party Claim") for which indemnification may be sought by that Party and will give such information with respect thereto as the other Party shall reasonably request. If any proceeding (including any governmental investigation) is instituted involving any Party for which such Party may seek an indemnity under Section 12.1 or 12.2, as the case may be (the "Indemnified Party"), the Indemnified Party shall not make any admission or statement concerning such Third Party Claim, but shall promptly notify the other Party (the "Indemnifying Party") orally and in writing and the Indemnifying Party and Indemnified Party shall meet to discuss how to respond to any Third Party Claims that are the subject matter of such proceeding. The Indemnifying Party shall not be obligated to indemnify the Indemnified Party to the extent any admission or statement made by the Indemnified Party or any failure by such Party to notify the Indemnifying Party of the claim materially prejudices the defense of such claim. 12.3.2 Defense of Claim. If the Indemnifying Party elects to defend or, if local procedural rules or laws do not permit the same, elects to control the defense of a Third Party Claim, it shall be entitled to do so provided it gives notice to the Indemnified Party of its intention to do so within forty-five (45) days after the receipt of the written notice from the Indemnified Party of the potentially indemnifiable Third Party Claim (the "Litigation Condition"). The Indemnifying Party expressly agrees the Indemnifying Party shall be responsible for satisfying and discharging any award made to or settlement reached with the Third Party pursuant to the terms of this Agreement without prejudice to any provision in this Agreement or right at law which will allow the Indemnifying Party subsequently to recover any amount from the Indemnified Party to the extent the liability under such settlement or award was attributable to the Indemnified Party. Subject to compliance with the Litigation Condition, the Indemnifying Party shall retain counsel reasonably acceptable to the Indemnified Party (such acceptance not to be unreasonably withheld, refused, conditioned or delayed) to represent the Indemnified Party and shall pay the reasonable fees and expenses of such counsel related to such proceeding. In any such proceeding, the Indemnified Party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of the Indemnified Party. The Indemnified Party shall not settle any claim for which it is seeking indemnification without the prior written consent of the Indemnifying Party which consent shall not be unreasonably withheld, refused, conditioned or delayed. The Indemnified Party shall, if requested by the Indemnifying Party, cooperate in all reasonable respects in the defense of such claim that is being managed and/or controlled by the Indemnifying Party. The Indemnifying Party shall not, without the written consent of the Indemnified Party (which consent shall not be unreasonably withheld, refused, conditioned or delayed), effect any settlement of any pending or threatened proceeding in which the Indemnified Party is, or based on the same set of facts could have been, a party and indemnity could have been sought hereunder by the Indemnified Party, unless such settlement includes an unconditional release of the Indemnified Party from all liability on claims that are the subject matter of such proceeding. If the Litigation Condition is not met, then neither Party shall have the right to control the defense of such Third Party Claim and the Parties shall cooperate in and be consulted on the material aspects of such defense at each Party's own expense; provided that if the Indemnifying Party does not satisfy the Litigation Condition, the Indemnifying Party may at any subsequent time during the pendency of the relevant Third Party Claim irrevocably elect, if permitted by local procedural rules or laws, to defend and/or to control the defense of the relevant Third Party Claim so long as the Indemnifying Party also agrees to pay the reasonable fees and costs incurred by the Indemnified Party in relation to the defense of such Third Party Claim from 36 + + + + + + the inception of the Third Party Claim until the date the Indemnifying Party assumes the defense or control thereof. 12.4 Assumption of Defense. Notwithstanding anything to the contrary contained herein, an Indemnified Party shall be entitled to assume the defense of any Third Party Claim with respect to the Indemnified Party, upon written notice to the Indemnifying Party pursuant to this Section 12.4, in which case the Indemnifying Party shall be relieved of liability under Section 12.1 or 12.2, as applicable, solely for such Third Party Claim and related Losses. 12.5 Insurance. During the Term of this Agreement and for a period of one (1) year after the termination or expiration of this Agreement, GSK shall obtain and/or maintain at its sole cost and expense, product liability insurance (including any self-insured arrangements) in amounts which are reasonable and customary in the U.S. pharmaceutical industry for companies of comparable size and activities. Such product liability insurance or self-insured arrangements shall insure against all liability, including without limitation personal injury, physical injury, or property damage arising out of the manufacture, sale, distribution, or marketing of the Collaboration Products. GSK shall provide written proof of the existence of such insurance to Theravance upon request. ARTICLE 13 PATENTS 13.1 Prosecution and Maintenance of Patents. 13.1.1 Prosecution and Maintenance of Theravance Patents. Theravance shall have the exclusive right and the obligation to (subject to Theravance's election not to file, prosecute, or maintain pursuant to Section 13.1.4) or to cause its licensors to, prepare, file, prosecute in a diligent manner (including without limitation by conducting interferences, oppositions and reexaminations or other similar proceedings), maintain (by timely paying all maintenance fees, renewal fees, and other such fees and costs required under applicable Laws) and extend all Theravance Patents and related applications. Theravance shall consult with GSK prior to abandoning any Theravance Patents or related applications that are material to the matters contemplated in this Agreement. Theravance shall regularly advise GSK of the status of all pending applications, including with respect to any hearings or other proceedings before any Governmental Authority, and, at GSK's request, shall provide GSK with copies of all documentation concerning such applications, including all correspondence to and from any Governmental Authority. Subject to Section 2.3.3, Theravance shall solicit GSK's advice and review of the nature and text of such patent applications and important prosecution matters related thereto in reasonably sufficient time prior to filing thereof, and Theravance shall take into account GSK's reasonable comments related thereto; provided, however, Theravance shall have the final decision authority with respect to any action relating to any Theravance Patent. Within the priority period, Theravance shall agree with GSK regarding the countries outside the United States in which corresponding applications should be filed ("OUS Filings"). It is presumed that a corresponding Patent Cooperation Treaty ("PCT") application will be filed unless otherwise agreed by the Parties. Theravance shall effect filing of all such applications within the priority period. Subject to Section 13.1.4, Theravance shall be responsible for all costs incurred in the United States in connection with procuring Theravance Patents, including applications preparation, filing fees, prosecution, maintenance and all costs associated with reexamination and 37 + + + + + + interference proceedings in the United States Patent and Trademark Office and United States Courts. GSK shall be responsible for all out-of-pocket costs and expenses incurred by Theravance after the Effective Date that are associated with procuring corresponding OUS patents, including without limitation PCT and individual country filing fees, translations, maintenance, annuities, and protest proceedings. For all such OUS patent applications, Theravance will invoice GSK on a quarterly basis beginning April 1, 2003, setting forth all such expenses incurred. Reimbursement will be made to Theravance in United States Dollars within thirty (30) days of receipt of the invoice by GSK. GSK will within thirty (30) days following the Effective Date identify the GSK representative that should receive such invoices from Theravance. GSK's obligations hereunder are in addition to any obligations of GSK under Section 13.1.2(b) 13.1.2 Prosecution and Maintenance of Patents Covering Joint Inventions. (a) For Patents covering Joint Inventions, the Parties shall agree, without prejudice to ownership, which Party shall have the right to prepare and file a priority patent application, and prosecute such application(s) and maintain any patents derived therefrom, with the Parties equally sharing the reasonable out-of-pocket costs for the preparation, filing, prosecution and maintenance of such priority patent application. The Parties will reasonably cooperate to obtain any export licenses that might be required for such activities. Should the agreed upon Party elect not to prepare and/or file any such priority patent application, it shall (i) provide the other Party with written notice as soon as reasonably possible after making such election but in any event no later than sixty (60) days before the other Party would be faced with a possible loss of rights, (ii) give the other Party the right, at the other Party's discretion and sole expense, to prepare and file the priority application(s), and (iii) offer reasonable assistance in connection with such preparation and filing at no cost to the other Party except for reimbursement of reasonable out-of-pocket expenses incurred by the agreed upon Party in rendering such assistance. The other Party, at its discretion and cost, shall prosecute such application(s) and maintain sole ownership of any patents derived therefrom. (b) Within nine (9) months after the filing date of a priority application directed to an Invention, the Party filing the priority application shall request that the other Party identify those non-priority, non-PCT ("foreign") Countries in which the other Party desires that the Party filing the priority application file corresponding patent applications. Within thirty (30) days after receipt by the other Party of such request from the Party filing the priority application, the other Party shall provide to the Party filing the priority application a written list of such foreign countries in which the other Party wishes to effect corresponding foreign patent applications filings. The Parties will then attempt to agree on the particular countries in which such applications will be filed, provided that in the event agreement is not reached, the application will be filed in the disputed as well as the non-disputed countries (all such filings referred to hereinafter as "Designated Foreign Filings"). Thereafter, within twelve (12) months after the filing date of the priority application, the Party filing the priority application shall effect all such Designated Foreign Filings. It is presumed unless otherwise agreed in writing by the Parties, that a corresponding PCT application will be filed designating all PCT member countries. As to each Designated Foreign Filing and PCT application, GSK shall bear the costs for the filing and prosecutions of such Designated Foreign Filing and PCT application (including entering national phase in all agreed countries). Should the Party filing the priority application not agree to file or cause to be filed a Designated Foreign Filing, the other Party will have the right to effect such Designated Foreign Filing in its name. 38 + + + + + + (c) Should the filing Party pursuant to Section 13.1.2(a) or 13.1.2(b) no longer wish to prosecute and/or maintain any patent application or patent resulting from such application, the filing Party shall (i) provide the non-filing Party with written notice of its wish no later than sixty (60) days before the patent or patent applications would otherwise become abandoned, (ii) give the non-filing Party the right, at the non-filing Party's election and sole expense, to prosecute and/or maintain such patent or patent application, and (iii) offer reasonable assistance to the non- filing Party in connection with such prosecution and/or maintenance at no cost to the non-filing Party except for reimbursement of the filing Party's reasonable out-of-pocket expenses incurred by the filing Party in rendering such assistance. (d) Should the non-filing Party pursuant to Section 13.1.2(c) not wish to incur its share of preparation, filing, prosecution and/or maintenance costs for a patent application filed pursuant to Section 13.1.2(a) or 13.1.2(b) or patents derived therefrom, it shall (i) provide the filing Party with written notice of its wish, and (ii) continue to offer reasonable assistance to the filing Party in connection with such prosecution or maintenance at no cost to the filing Party except for reimbursement of the non-filing Party's reasonable out-of-pocket expenses incurred by the non-filing Party in rendering such assistance. (e) The Parties agree to cooperate in the preparation and prosecution of all patent applications filed under Section 13.1.2(a) and 13.1.2(b), including obtaining and executing necessary powers of attorney and assignments by the named inventors, providing relevant technical reports to the filing Party concerning the invention disclosed in such patent application, obtaining execution of such other documents which shall be needed in the filing and prosecution of such patent applications, and, as requested, updating each other regarding the status of such patent applications. 13.1.3 Prosecution and Maintenance of GSK Patents. GSK shall have the exclusive right and obligation to (subject to GSK's election not to file, prosecute or maintain pursuant to Section 13.1.5) or to cause its licensors to, prepare, file and prosecute in a diligent manner (including without limitation by conducting interferences, oppositions and reexaminations or other similar proceedings), maintain (by timely paying all maintenance fees, renewal fees, and other such fees and costs required under applicable Laws) and extend all GSK Patents and related applications. Consistent with Section 2.3.3, GSK will consult with Theravance within the priority period for any patent application that is material to this Agreement concerning Countries in which corresponding applications will be filed. In the event the Parties can not agree, GSK shall make the final decision. GSK shall consult with Theravance prior to abandoning any GSK Patents or related applications that are material to the matters contemplated in this Agreement. GSK shall regularly advise Theravance of the status of all pending applications, including with respect to any hearings or other proceedings before any Governmental Authority, and, at Theravance's request, shall provide Theravance with copies of documentation relating to such applications, including all correspondence to and from any Governmental Authority. Subject to Section 2.3.3, GSK shall solicit Theravance's advice and review of the nature and text of such patent applications and important prosecution matters related thereto in reasonably sufficient time prior to filing thereof, and GSK shall take into account Theravance's reasonable comments relating thereto; provided that GSK shall have the final decision authority with respect to any action relating to a GSK Patent. 13.1.4 GSK Step-In Rights. If Theravance elects not to file, prosecute or maintain the Theravance Patents or claims encompassed by such Theravance Patents necessary for GSK to exercise its rights hereunder in any Country, Theravance shall give GSK notice thereof within a reasonable period prior to allowing such Theravance Patents, or such claims encompassed by 39 + + + + + + such Theravance Patents, to lapse or become abandoned or unenforceable, and GSK shall thereafter have the right, at its sole expense, to prepare, file, prosecute and maintain such Theravance Patents in such Country. 13.1.5 Theravance Step-In Rights. If GSK elects not to file, prosecute or maintain the GSK Patents or claims encompassed by such GSK Patents necessary for Theravance to exercise its license rights hereunder in any Country, GSK shall give Theravance notice thereof within a reasonable period prior to allowing such GSK Patents, or such claims encompassed by such GSK Patents, to lapse or become abandoned or unenforceable, and Theravance shall thereafter have the right, at its sole expense, to prepare, file, prosecute and maintain such GSK Patents in such Country. In the event that GSK elects not to file, prosecute or maintain GSK Patents or claims that would affect the royalty owed Theravance pursuant to Section 6.3, GSK shall reimburse Theravance for all out-of-pocket expenses incurred by Theravance in connection with Theravance exercising its Step-In Rights under this Section. 13.1.6 Execution of Documents by Agents. Each of the Parties shall execute or have executed by its appropriate agents such documents as may be necessary to obtain, perfect or maintain any Patent Rights filed or to be filed pursuant to this Agreement, and shall cooperate with the other Party so far as reasonably necessary with respect to furnishing all information and data in its possession reasonably necessary to obtain or maintain such Patent Rights. 13.1.7 Patent Term Extensions. The Parties shall cooperate with each other in gaining patent term extension where applicable to Collaboration Products. The Joint Steering Committee shall determine which patents the Parties shall endeavor to have extended. All filings for such extension will be made by the Party to whom the patent is assigned after consultation with the other Party. In the event the Joint Steering Committee can not agree, the Party who is assigned the compound patent covering the LABA in the Collaboration Product will make the decision. 13.2 Patent Infringement. 13.2.1 Infringement Claims. With respect to any and all Claims instituted by Third Parties against Theravance or GSK or any of their respective Affiliates for patent infringement involving the manufacture, use, license, marketing or sale of a Collaboration Product in the United States during the Term (each, a "Patent Infringement Claim") as applicable, Theravance and GSK will assist one another and cooperate in the defense and settlement of such Patent Infringement Claims at the other Party's request. 13.2.2 Infringement of Theravance Patents. In the event that Theravance or GSK becomes aware of actual or threatened infringement of a Theravance Patent during the Term, that Party will promptly notify the other Party in writing (a "Patent Infringement Notice"). Theravance will have the right but not the obligation to bring an infringement action against any Third Party. If Theravance elects to pursue such infringement action, Theravance shall be solely responsible for the costs and expenses associated with such action and retain all recoveries. During the Term, in the event that Theravance does not undertake such an infringement action, upon Theravance's written consent, which shall not be unreasonably withheld, refused, conditioned or delayed, GSK shall be permitted to do so in Theravance's or the relevant Theravance Affiliate's name and on Theravance's or the relevant Theravance Affiliate's behalf. If Theravance has consented to an infringement action but GSK is not recognized by the applicable court or other relevant body as having the requisite standing to pursue such action, then GSK may join Theravance as party-plaintiff. If GSK elects to pursue such infringement action, Theravance may be represented in 40 + + + + + + such action by attorneys of its own choice and its own expense with GSK taking the lead in such action. 13.2.3 Infringement of GSK Patents. In the event that GSK or Theravance becomes aware of actual or threatened infringement of a GSK Patent during the Term, that Party will promptly notify the other Party in writing. GSK will have the right but not the obligation to bring an infringement action against any Third Party. If GSK elects to pursue such infringement action, GSK shall be solely responsible for the costs and expenses associated with such action and retain all recoveries. During the Term, in the event that GSK does not undertake such an infringement action, upon GSK's written consent, which shall not be unreasonably withheld, refused, conditioned or delayed, Theravance shall be permitted to do so in GSK's or the relevant GSK Affiliate's name and on GSK's or the relevant GSK Affiliate's behalf. If GSK has consented to an infringement action but Theravance is not recognized by the applicable court or other relevant body as having the requisite standing to pursue such action, then Theravance may join GSK as a party-plaintiff. If Theravance elects to pursue such infringement action, GSK may be represented in such action by attorneys of its own choice and at its own expense, with Theravance taking the lead in such action. 13.3 Notice of Certification. GSK and Theravance each shall immediately give notice to the other of any certification filed under the "U.S. Drug Price Competition and Patent Term Restoration Act of 1984" (or its foreign equivalent) claiming that a GSK Patent or a Theravance Patent is invalid or that infringement will not arise from the manufacture, use or sale of any Collaboration Product by a Third Party ("Hatch-Waxman Certification"). 13.3.1 Notice. If a Party decides not to bring infringement proceedings against the entity making such a certification, such Party shall give notice to the other Party of its decision not to bring suit within twenty-one (21) days after receipt of notice of such certification. 13.3.2 Option. Such other Party then may, but is not required to, bring suit against the entity that filed the certification. 13.3.3 Name of Party. Any suit by Theravance or GSK shall either be in the name of Theravance or in the name of GSK, (or any Affiliate) or jointly in the name of Theravance and GSK (or any Affiliate) , as may be required by law. 13.4 Assistance. For purposes of this Article 13, the Party not bringing suit shall execute such legal papers necessary for the prosecution of such suit as may be reasonably requested by the Party bringing suit. The out-of-pocket costs and expenses of the Party bringing suit shall be reimbursed first out of any damages or other monetary awards recovered in favor of GSK or Theravance. The documented out-of-pocket costs and expenses of the other Party shall then be reimbursed out of any remaining damages or other monetary awards. The Party initiating and prosecuting the action to completion will retain any remaining damages or other monetary awards following such reimbursements. 13.5 Settlement. No settlement or consent judgment or other voluntary final disposition of a suit under this Article may be entered into without the joint written consent of GSK and Theravance (which consent will not be withheld unreasonably). 41 + + + + + + ARTICLE 14 TERM AND TERMINATION 14.1 Term and Expiration of Term. Unless otherwise mutually agreed to by the Parties, this Agreement shall commence on the Effective Date and shall end upon expiration of the Term, unless terminated early as contemplated hereunder. Unless terminated early under this Article 14, the licenses granted by Theravance to GSK pursuant to Section 2.1 with respect to the Collaboration Products shall be considered fully-paid and shall become non-exclusive upon expiration of the Term. 14.2 Termination for Material Breach. Either Party may, without prejudice to any other remedies available to it at law or in equity, terminate this Agreement subject to Section 14.10 in the event that the other Party (as used in this subsection, the "Breaching Party") shall have materially breached or defaulted in the performance of any of its obligations. The Breaching Party shall, if such breach can be cured, have sixty (60) days after written notice thereof was provided to the Breaching Party by the non-breaching Party to remedy such default (or, if such default cannot be cured within such 60-day period, the Breaching Party must commence and diligently continue actions to cure such default during such 60-day period). Any such termination shall become effective at the end of such 60-day period unless the Breaching Party has cured any such breach or default prior to the expiration of such 60-day period (or, if such default is capable of being cured but cannot be cured within such 60-day period, the Breaching Party has commenced and diligently continued actions to cure such default provided always that, in such instance, such cure must have occurred within one hundred twenty (120) days after written notice thereof was provided to the Breaching Party by the non-breaching Party to remedy such default). 14.3 GSK Right to Terminate Development of a Collaboration Product. On a Collaboration Product-by-Collaboration Product basis, and at any time during Development and prior to First Commercial Sale of the applicable Collaboration Product, GSK shall have the right to terminate Development of such Collaboration Product (upon the provision of ninety (90) days written notice) for reasons of Technical Failure or Commercial Failure following communication to, and assessment of such proposed termination by, the Joint Project Committee and Joint Steering Committee (in which case such Collaboration Product shall be referred to as a "Terminated Development Collaboration Product"). For the avoidance of doubt, a "Terminated Development Collaboration Product" can be any of the following: (i) a Pooled Compound and/or (ii) a Replacement Compound and/or (iii) a single agent LABA Collaboration Product and/or (iv) a LABA/ICS Combination Product and/or (v) an Other Combination Product. 14.4 GSK Right to Terminate Commercialization of a Collaboration Product Following First Commercial Sale. On a Collaboration Product-by- Collaboration Product basis, and on a Country-by-Country basis, at any time after First Commercial Sale of the applicable Collaboration Product in such country, GSK shall have the right to terminate Commercialization of such Collaboration Product (upon the provision of one hundred and eighty (180) days written notice) for reasons of Commercial Failure or Technical Failure and following communication to, and assessment of such proposed termination by, the Joint Project Committee and Joint Steering Committee (in which case, such Collaboration Product shall be referred to as a "Terminated Commercialized Collaboration Product"). For the avoidance of doubt, a Terminated Commercialized Collaboration Product can be any of the following: (i) a single agent LABA Collaboration Product and/or (ii) a LABA/ICS Combination Product and/or (iii) an Other Combination Product. 42 + + + + + + 14.5 Termination of the Agreement Due to Discontinuation of Development of All Collaboration Products and All Pooled Compounds . Any time following the third anniversary of the Effective Date, either Party may terminate this Agreement, subject to Section 14.10, upon the provision of ninety (90) days written notice if Development of all Collaboration Products and all Pooled Compounds have been discontinued for Technical Failure and/or Commercial Failure. Notwithstanding the foregoing, in the event that (i) Development of all Collaboration Products and all Pooled Compounds (including any Replacement Compounds) has ceased for at least three (3) months, (ii) all such termination and/or discontinuance decisions have been validly approved by the Joint Steering Committee, and (iii) both parties have provided written notice to the other that such party does not intend to contribute any additional Replacement Compounds to the collaboration, then either Party shall be entitled to terminate this Agreement, subject to Section 14.10, upon the provision of ninety (90) days written notice. 14.6 Effects of Termination. 14.6.1 Effect of Termination for Material Breach. (a) Material Breach by Theravance. In the event this Agreement is terminated by GSK pursuant to Section 14.2 for material breach by Theravance, all licenses granted by Theravance to GSK under this Agreement shall survive, subject to GSK's continued obligation to pay milestones and royalties to Theravance hereunder. In such event, GSK shall retain all of its rights to bring an action against Theravance for damages and any other available remedies in law or equity, and shall be entitled to set-off against any monies payable to Theravance hereunder all amounts GSK reasonably believes constitute its damages incurred by such breach, subject to final judicial resolution or settlement. Also, Theravance shall, at its sole expense, promptly transfer to GSK copies of all data, reports, records and materials in its possession or control that relate to the Collaboration Products that contain a GSK Compound and return to GSK, or destroy at GSK's request, all relevant records and materials in its possession or control containing Confidential Information of GSK (provided that Theravance may keep one copy of such Confidential Information of GSK for archival purposes only in accordance with Section 10.1). (b) Material Breach By GSK. In the event that this Agreement is terminated by Theravance pursuant to Section 14.2 for material breach by GSK: (i) GSK shall, at its sole expense, promptly transfer to Theravance copies of all data, reports, records and materials in its possession or control that relate to the Theravance Compounds and return to Theravance, or destroy at Theravance's request, all relevant records and materials in its possession or control containing Confidential Information of Theravance (provided that GSK may keep one copy of such Confidential Information of Theravance for archival purposes only in accordance with Section 10.1). (ii) GSK shall, at its sole expense, transfer to Theravance, or shall cause its designee(s) to transfer to Theravance, ownership of all regulatory filings made or filed for any Collaboration Product that contains a LABA as a single agent (to the extent that any are held in GSK's or such designee(s)'s name), and such transfer to be as permitted by applicable Laws and regulations; otherwise GSK shall cooperate as necessary to permit Theravance to exercise its rights hereunder. (iii) Theravance shall have the non-exclusive right to access, use and cite in any regulatory filing any data relating to formulation of a LABA/ICS Combination Product or Other Combination Product. 43 + + + + + + (iv) All of the provisions of Section 14.6.2 shall apply for the benefit of Theravance for any Collaboration Product for which the first Phase III Study has been initiated at the effective date of such termination, subject to the limitations set forth in Section 14.6.2. (v) All the provisions of Section 14.6.3 shall apply for any Collaboration Product that has been Commercialized at the effective date of such termination. (vi) All licenses granted by Theravance to GSK with respect to the applicable Theravance Compounds under this Agreement shall terminate. (vii) Theravance shall retain all of its rights to bring an action against GSK for damages and any other available remedies in law or equity, and shall be entitled to set-off against any monies payable to GSK hereunder all amounts Theravance reasonably believes constitute its damages incurred by such breach, subject to final judicial resolution or settlement. 14.6.2 Effect of Termination by GSK of Certain Terminated Development Collaboration Product(s). If GSK terminates a Collaboration Product at any time after initiation of the first Phase III Study concerning such Collaboration Product, and Development of all other Collaboration Products and Pooled Compounds have been discontinued for Technical Failure and/or Commercial Failure, then at the sole election of Theravance, the following shall apply: (a) GSK shall, at its sole expense, promptly transfer to Theravance copies of all data, reports, records and materials in its possession or control that relate to the Theravance Compounds and return to Theravance, or destroy at Theravance's request, all relevant records and materials in its possession or control containing Confidential Information of Theravance (provided that GSK may keep one copy of such Confidential Information of Theravance for archival purposes only in accordance with Section 10.1). (b) GSK shall, at its sole expense, transfer to Theravance, or shall cause its designee(s) to transfer to Theravance, ownership of all regulatory filings made or filed for the Terminated Development Collaboration Product that contains a LABA as a single agent (to the extent that any are held in GSK's or such designee(s)'s name), such transfer to be as permitted by any Third Party licenses or other such prior rights and applicable Laws and regulations, otherwise GSK shall cooperate as necessary to permit Theravance to exercise its rights hereunder. (c) Theravance shall have the non-exclusive right to access, use and cite in any regulatory filing any data relating to formulation of a LABA/ICS Combination Product or Other Combination Product. (d) For such Terminated Development Collaboration Product (excluding the non-LABA component of a LABA/ICS Combination Product and/or Other Combination Product and GSK's Diskus delivery device and any information directed thereto), GSK shall grant to Theravance the appropriate licenses in the Territory under the GSK Patents, GSK Inventions and GSK Know- How related to the LABA compound, dry powder inhaler formulation, metered dose inhaler formulation, and metered dose inhaler device, as applicable, to enable Theravance to Develop and Commercialize the Terminated Development Collaboration Product in the Field. 44 + + + + + + (e) In the event of a Change in Control of Theravance prior to termination by GSK under Section 14.3, none of the provisions under this Section 14.6.2 shall survive as they pertain to any Collaboration Product other than a Theravance compound as a single agent LABA. 14.6.3 Effect of Termination by GSK of a Terminated Commercialized Collaboration Product. The provisions of this Section 14.6.3 shall apply only where a Terminated Commercialised Collaboration Product is not being or has not been replaced by an alternative Collaboration Product under this Agreement and provided that, in GSK's reasonable good faith judgment, exercise by Theravance alone or with a Third Party of any of the rights or activities contemplated by this Section 14.6.3 (which such rights or activities shall include access to a GSK compound and/or GSK proprietary formulations or devices including Diskus, (collectively "GSK Property")) will not materially damage GSK's continued development, regulatory or commercial use of such GSK Property. GSK will use reasonable efforts to assist Theravance in locating a mutually acceptable Third Party to carry out the rights and activities contemplated by this Section 14.6.3. Subject to the foregoing: (a) If GSK terminates a Collaboration Product after First Commercial Sale of such Collaboration Product in one or more of the Major Market Countries, Theravance shall have the right in its sole discretion and at its sole expense, for its own benefit or together with a Third Party, to commercialize such Terminated Commercialized Collaboration Product in any of such Major Market Countries where it has been terminated. (b) If GSK terminates Commercialization of a Collaboration Product in all Countries of the Territory following the first commercial sale in any Country of the Territory, Theravance shall have the right in its sole discretion and at it sole expense, for its own benefit or together with a Third Party, to Commercialise such Terminated Commercialized Collaboration Product in the Territory. (c) Subject to Section 14.6.3(a), GSK shall grant to Theravance the appropriate licenses in the Territory (or in the case of a Country-by-Country termination, in the relevant Countries) under the GSK Patents, GSK Inventions and GSK Know-How to enable Theravance by itself and/or through one or more Third Party sublicensees, to Commercialize the Terminated Commercialized Collaboration Product. GSK shall also provide Theravance with all such information and data which GSK, or its sublicensees reasonably have available in such Country, for example access to drug master file, clinical data and the like, and shall execute such instruments as Theravance reasonably requests, to enable Theravance to obtain the appropriate regulatory approvals to market such Terminated Commercialized Collaboration Product in such Country and for any other lawful purpose related to Commercialization of such Terminated Commercialized Collaboration Product in such Country. (d) In the event Theravance exercises its rights under Section 14.6.3(a) and (b) above, the Parties shall negotiate in good faith a separate commercialization and supply agreement for such Terminated Commercialized Collaboration Product which shall ensure that, based on commercially reasonable terms 45 + + + + + + (recognizing the Commercialized status of the Terminated Commercialized Collaboration Product), Theravance has a continuous and uninterrupted supply of such Terminated Commercialized Collaboration Product, for a suitable period of time to enable Theravance to secure Third Party supply. (e) In the event of a Change in Control of Theravance, prior to termination by GSK under Section 14.4, none of the provisions under this Section 14.6.3 shall survive as they pertain to any Collaboration Product other than to a single agent LABA, its dry powder inhaler formulation, metered dose inhaler formulation, and metered dose inhaler device, as applicable; and the Parties will meet in good faith to explore other potential commercial options e.g. use of one or more Third Parties for possible continued Commercialisation of such Terminated Commercialised Collaboration Product if it is a LABA/ICS Combination Product or Other Combination Product. (f) If GSK, in the exercise of its reasonable good faith judgment, determines that exercise by Theravance alone or with a Third Party of any of the rights or activities contemplated by this Section 14.6.3 will materially damage GSK's continued development, regulatory or commercial use of GSK Property, then GSK shall grant to Theravance, for such Terminated Commercialized Collaboration Product (excluding the non-LABA component of a Combination Product and/or Other Combination Product and GSK's Diskus delivery device and any information directed thereto), the appropriate licenses in the Territory under the GSK Patents, GSK Inventions and GSK Know-How related to the LABA compound, dry powder inhaler formulation, metered dose inhaler formulation, and metered dose inhaler device, as applicable, to enable Theravance to Commercialize a product containing the LABA Compound in the Field. 14.6.4 Effect of Termination of the Agreement Due to Discontinuation of Development Prior to First Commercial Sale of All Collaboration Products and All Pooled Compounds. In the event that the Agreement is terminated pursuant to Section 14.5, the following shall occur: (i) Return of Materials. GSK shall, at its sole expense, promptly transfer to Theravance copies of all data, reports, records and materials in its possession or control that relate to the Theravance Compounds and return to Theravance, or destroy at Theravance's request, all relevant records and materials in its possession or control containing Confidential Information of Theravance (provided that GSK may keep one copy of such Confidential Information of Theravance for archival purposes only in accordance with Section 10.1). Theravance shall, at its sole expense, promptly transfer to GSK copies of all data, reports, records and materials in its possession or control that relate to the GSK Compounds and return to GSK, or destroy at GSK's request, all relevant records and materials in its possession or control containing Confidential Information of GSK (provided that Theravance may keep one copy of such Confidential Information of GSK for archival purposes only in accordance with Section 10.1). (ii) Transfer of Regulatory Filings. GSK shall, at its sole expense, transfer to Theravance, or shall cause its designee(s) to transfer to Theravance, ownership of all regulatory filings made or filed for any Terminated Development Collaboration Product (to the extent that any are held in GSK's or such designee(s)'s name), but only where the Terminated Collaboration Product contains a Theravance Compound as a single agent and such transfer to be as permitted 46 + + + + + + by applicable Laws and regulations. GSK, at its sole discretion, shall also give due consideration to transferring to Theravance any additional regulatory filings for a Terminated Development Collaboration Product which contains a Theravance Compound as a Combination Product. (iii) License Rights. All licenses granted by Theravance to GSK with respect to the Collaboration Products under this Agreement shall terminate. (iv) Stock Return. GSK shall return to Theravance all available formulated and API stocks that contain a Theravance Compound and which are then held by GSK or cause such API stocks to be provided to Theravance if held by a vendor or other Third Party on behalf of GSK. (v) Limitations on Further Development by GSK. GSK shall not be permitted to continue or re-initiate clinical Development of any GSK Compound that is both a Terminated Collaboration Product and a LABA in the Field for a period of four (4) years after the date of such termination. 14.7 License Rights. Except as otherwise provided herein in, all licenses granted hereunder relating to Terminated Collaboration Products shall terminate. Also the Parties accept that nothing provided for in this Article 14 or elsewhere in this Agreement, grants any licenses (whether exclusive, semi-exclusive or otherwise) from GSK to Theravance for any (i) GSK Compound (ii) GSK Invention (ii) GSK Know How and (iv) GSK Patents, except for those rights essential and specific to enable Theravance to exercise those rights and carry out those activities contemplated under Section 14.6 above. 14.8 Milestone Payments. Neither Party shall be obligated to make a Development Milestone payment under Section 6.2 which is triggered by an event occurring after the effective date of termination of this Agreement with respect to a Collaboration Product. 14.9 Subsequent Royalties. If after termination of this Agreement either Party subsequently Develops and Commercializes any Long- Acting β2 Adrenoceptor Agonist for the treatment / prophylaxis of respiratory diseases which (i) was never a Pooled Compound or Collaboration Product or (ii) was a GSK Discontinued Compound or a Theravance Discontinued Compound, it will pay to the other Party a royalty on Net Sales of any such products at the rate of 3% for a single-agent product and 2% for the first combination product for a period of 15 years from the date of launch on a Country-by-Country basis; provided, however, that this royalty shall not apply to any compound or product (including new product line extensions and/or re-formulation work) where the original compound or product is, as of the date of signature of this Agreement, already Commercialized. 14.10 Accrued Rights; Surviving Obligations. Termination, relinquishment or expiration of this Agreement for any reason shall be without prejudice to any rights that shall have accrued to the benefit of any Party prior to such termination, relinquishment or expiration. Such termination, relinquishment or expiration shall not relieve any Party from obligations which are expressly or by implication intended to survive termination, relinquishment or expiration of this Agreement, including without limitation Article 10, and shall not affect or prejudice any provision of this Agreement which is expressly or by implication provided to come into effect on, or continue in effect after, such termination, relinquishment or expiration. 47 + + + + + + ARTICLE 15 LIMITATIONS RELATING TO THERAVANCE EQUITY SECURITIES 15.1 Purchases of Equity Securities. So long as this Agreement remains in effect and for a period of one (1) year thereafter, except as permitted by Section 15.2, or as otherwise agreed in writing by Theravance, GSK and its Affiliates will not (and will not assist or encourage others to) directly or indirectly in any manner: 15.1.1 acquire, or agree to acquire, directly or indirectly, alone or in concert with others, by purchase, gift or otherwise, any direct or indirect beneficial ownership (within the meaning of Rule l3d-3 under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) or interest in any securities or direct or indirect rights, warrants or options to acquire, or securities convertible into or exchangeable for, any securities of Theravance; 15.1.2 make, or in any way participate in, directly or indirectly, alone or in concert with others, any "solicitation" of "proxies" to vote (as such terms are used in the proxy rules of the Securities and Exchange Commission (the "SEC") promulgated pursuant to Section 14 of the Exchange Act); provided, however, that the prohibition in this Section 15.1.2 shall not apply to solicitations exempted from the proxy solicitation rules by Rule 14a-2 under the Exchange Act as such Rule 14a-2 is in effect as of the date hereof; 15.1.3 form, join or in any way participate in a "group" within the meaning of Section 13(d)(3) of the Exchange Act with respect to any voting securities of Theravance; 15.1.4 acquire or agree to acquire, directly or indirectly, alone or in concert with others, by purchase, exchange or otherwise, (i) any of the assets, tangible or intangible, of Theravance or (ii) direct or indirect rights, warrants or options to acquire any assets of Theravance, except for such assets as are then being offered for sale by Theravance; 15.1.5 enter into any arrangement or understanding with others to do any of the actions restricted or prohibited under Sections 15.1.1, 15.1.2, 15.1.3, or 15.1.4. 15.1.6 otherwise act in concert with others, to seek to offer to Theravance or any of its stockholders any business combination, restructuring, recapitalization or similar transaction to or with Theravance or otherwise seek in concert with others, to control, change or influence the management, board of directors or policies of Theravance or nominate any person as a director of Theravance who is not nominated by the then incumbent directors, or propose any matter to be voted upon by the stockholders of Theravance. 15.2 Exceptions for Purchasing Securities of Theravance. Nothing herein shall prevent GSK or its Affiliates (or in the case of Section 15.2.4, their employees) from: 15.2.1 purchasing the Series E Preferred Stock of Theravance on the Effective Date as contemplated herein. 15.2.2 purchasing additional equity securities of Theravance after the Effective Date if after such purchase GSK and its Affiliates would own in the aggregate no greater percent of the total voting power of all voting securities of Theravance then outstanding than GSK together with its Affiliates owned immediately after purchase of the Series E Preferred Stock on the Effective Date. 48 + + + + + + 15.2.3 acquiring securities of Theravance issued in connection with stock splits or recapitalizations or on exercise of pre-emptive rights afforded to Theravance stockholders generally. 15.2.4 purchasing securities of Theravance pursuant to (i) a pension plan established for the benefit of GSK's employees, (ii) any employee benefit plan of GSK, (iii) any stock portfolios not controlled by GSK or any of its Affiliates that invest in Theravance among other companies, or (iv) following an initial public offering of Theravance common stock, for the account of a GSK employee in such employee's personal capacity. 15.2.5 acquiring securities of another biotechnology or pharmaceutical company that beneficially owns any of Theravance's securities. 15.2.6 acquiring equity securities of Theravance without any limitation following initiation by a third party of an unsolicited tender offer to purchase twenty percent (20%) or more of any class or service of Theravance's publicly traded voting securities (a "Hostile Tender Offer"); provided that the exception provided by this Section 15.2.6 shall be limited to the classes or series of Theravance's securities that are the subject of the Hostile Tender Offer; provided, further, that, in the event that either (a) such Hostile Tender Offer is terminated or expires without the purchase of at least ten percent (10%) of any class or series of Theravance's publicly traded voting securities by such third party, or (b) the Theravance Board of Directors subsequently recommends that such offer be accepted, then following the date of such termination, expiration or recommendation the acquisitions by GSK and/or its Affiliates under this Section 15.2.6 prior to the events described in clauses (a) and (b) above shall not be considered a breach by GSK of the provisions of Section 15.2 as long as GSK, at its option, either: (i) divests (or cause to be divested) in one or more open-market transactions such number of shares of Theravance's securities acquired by it and its Affiliates pursuant to this Section 15.2.6 such that after such divestiture GSK and its Affiliates would own in the aggregate no greater percent of the total voting power of all voting securities of Theravance then outstanding than GSK together with its Affiliates owned immediately prior to the commencement of such Hostile Tender Offer, any such divestiture to be completed as expeditiously as possible consistent with applicable securities laws and regulations and in a manner intended to shield GSK and its Affiliates from liability for recovery of short swing profits under Section 16 of the Exchange Act and the rules promulgated thereunder; or (ii) enters into a voting agreement, proxy or similar arrangement pursuant to which (A) all Theravance voting securities acquired pursuant to this Section 15.2.6 are voted on all matters to be voted on by holders of Theravance voting securities, including, but not limited to, in favor of any transaction involving a proposed Change in Control (as defined below) of Theravance in the same proportion as the outstanding Theravance voting securities not held by GSK or any GSK Affiliate are voted, (B) no Theravance voting securities beneficially owned by GSK and/or any Affiliate abstain from such a vote, and (C) no dissenter or appraisal or similar rights are exercised with respect to any vote relating to a Change in Control of Theravance. 15.3 Voting. Until the date of an initial public offering of Theravance common stock, GSK shall ensure that all outstanding Theravance voting securities beneficially owned by GSK and/or any GSK Affiliate are voted for management's nominees to the Board of Directors of Theravance to the extent not inconsistent with Section 2.8 of the Investors' Rights Agreement. 49 + + + + + + 15.4 Theravance Voting Securities Transfer Restrictions. 15.4.1 So long as this Agreement remains in effect and for a period of one (1) year thereafter, neither GSK nor any of its Affiliates shall dispose of beneficial ownership of Theravance voting securities except (i) pursuant to a bona fide public offering registered under the Securities Act of either Theravance voting securities or securities exchangeable or exercisable for Theravance voting securities (in which the securities are broadly distributed and GSK does not select the purchasers); or (ii) pursuant to Rule 144 under the Securities Act (provided that if Rule 144(k) is available, such transfer nevertheless is within the volume limits and manner of sale requirements applicable to non-144(k) transfers under Rule 144); or (iii) in transactions that to the knowledge of GSK do not, directly or indirectly, result in any person or group owning or having the right to acquire or intent to acquire beneficial ownership of Theravance voting securities with aggregate voting power of five percent or more of the aggregate voting power of all outstanding Theravance voting securities. 15.4.2 Notwithstanding the foregoing, the restrictions on disposition under Section 15.4.1 shall not apply if, as a result of such disposition, (A) no filing by any Person (including, but not limited to GSK or any of its Affiliates) shall be required under any Law (including but not limited to the Exchange Act) that would identify GSK or any of its Affiliates as the seller of the securities, and (B) neither GSK nor any of its Affiliates (or any transferee thereof) would be required by Law (including without limitation the disclosure requirements of the Securities Act of 1933, as amended (the "Securities Act"), and the Exchange Act) to make any public announcement of the transfer or disposition. 15.4.3 So long as this Agreement remains in effect and for a period of one (1) year thereafter, neither GSK nor any of its Affiliates may make any public disclosure of any holdings of or disposition of beneficial ownership of Theravance voting securities unless such disclosure is approved in advance in writing by Theravance, such approval not to be unreasonably withheld or delayed. Notwithstanding the foregoing, no consent of Theravance shall be required for any filing that GSK or any of its Affiliates is required to make under applicable Law in any jurisdiction, including without limitation any Form 144 under the Securities Act, any Form 4 under the Exchange Act, or any Schedule 13D or 13G or any amendments thereto under the Exchange Act; provided that, prior to making any such filings, GSK shall use reasonable efforts to (i) to provide Theravance notice and a copy of such proposed filings and (ii) consult with Theravance on the content of such filings. 15.5 Termination of Purchase Restrictions. The limitations on purchase of equity securities set forth in Section 15.1 shall terminate immediately upon a transaction or series of related transactions following a Change in Control of Theravance. ARTICLE 16 MISCELLANEOUS 16.1 Relationship of the Parties. Each Party shall bear its own costs incurred in the performance of its obligations hereunder without charge or expense to the other except as expressly provided in this Agreement. Neither Party shall have any responsibility for the hiring, termination or compensation of the other Party's employees or for any employee benefits of such employee. No employee or representative of a Party shall have any authority to bind or obligate the other Party to this Agreement for any sum or in any manner whatsoever, or to create or impose any contractual or other liability on the other Party without said Party's approval. For all purposes, and notwithstanding any other provision of this Agreement to the contrary, GSK's legal 50 + + + + + + relationship under this Agreement to Theravance shall be that of independent contractor. This Agreement is not a partnership agreement and nothing in this Agreement shall be construed to establish a relationship of co-partners or joint venturers between the Parties. 16.2 Registration and Filing of This Agreement. To the extent, if any, that either Party concludes in good faith that it or the other Party is required to file or register this Agreement or a notification thereof with any Governmental Authority, including without limitation the U.S. Securities and Exchange Commission, the Competition Directorate of the Commission of the European Communities or the U.S. Federal Trade Commission, in accordance with Law, such Party shall inform the other Party thereof. Should both Parties jointly agree that either of them is required to submit or obtain any such filing, registration or notification, they shall cooperate, each at its own expense, in such filing, registration or notification and shall execute all documents reasonably required in connection therewith. In such filing, registration or notification, the Parties shall request confidential treatment of sensitive provisions of this Agreement, to the extent permitted by Law. The Parties shall promptly inform each other as to the activities or inquiries of any such Governmental Authority relating to this Agreement, and shall reasonably cooperate to respond to any request for further information there from on a timely basis. 16.3 Force Majeure. The occurrence of an event which materially interferes with the ability of a Party to perform its obligations or duties hereunder which is not within the reasonable control of the Party affected or any of its Affiliates, not due to malfeasance by such Party or its Affiliates, and which could not with the exercise of due diligence have been avoided (each, a "Force Majeure Event"), including, but not limited to, an injunction, order or action by a Governmental Authority, fire, accident, labor difficulty, strike, riot, civil commotion, act of God, inability to obtain raw materials, delay or errors by shipping companies or change in law, shall not excuse such Party from the performance of its obligations or duties under this Agreement, but shall merely suspend such performance during the continuation of the Force Majeure. The Party prevented from performing its obligations or duties because of a Force Majeure Event shall promptly notify the other Party of the occurrence and particulars of such Force Majeure and shall provide the other Party, from time to time, with its best estimate of the duration of such Force Majeure Event and with notice of the termination thereof. The Party so affected shall use Diligent Efforts to avoid or remove such causes of nonperformance as soon as is reasonably practicable. Upon termination of the Force Majeure Event, the performance of any suspended obligation or duty shall promptly recommence. The Party subject to the Force Majeure Event shall not be liable to the other Party for any direct, indirect, consequential, incidental, special, punitive, exemplary or other damages arising out of or relating to the suspension or termination of any of its obligations or duties under this Agreement by reason of the occurrence of a Force Majeure Event, provided such Party complies in all material respects with its obligations under this Section 16.3. 16.4 Governing Law. This Agreement shall be construed, and the respective rights of the Parties determined, according to the substantive law of the State of Delaware notwithstanding the provisions governing conflict of laws under such Delaware law to the contrary, except matters of intellectual property law which shall be determined in accordance with the intellectual property laws relevant to the intellectual property in question. 16.5 Attorneys' Fees and Related Costs. In the event that any legal proceeding is brought to enforce or interpret any of the provisions of this Agreement, the prevailing party shall be entitled to recover its reasonable attorneys' fees, court costs and expenses of litigation whether or not the action or proceeding proceeds to final judgment. 51 + + + + + + 16.6 Assignment. This Agreement may not be assigned by either Party without the prior written consent of the other Party; provided, however that either Party may assign this Agreement, in whole or in part, to any of its Affiliates if such Party guarantees the performance of this Agreement by such Affiliate; and provided further that either Party may assign this Agreement to a successor to all or substantially all of the assets of such Party whether by merger, sale of stock, sale of assets or other similar transaction. This Agreement shall be binding upon, and subject to the terms of the foregoing sentence, inure to the benefit of the Parties hereto, their permitted successors, legal representatives and assigns. 16.7 Notices. All demands, notices, consents, approvals, reports, requests and other communications hereunder must be in writing and will be deemed to have been duly given only if delivered personally, by facsimile with confirmation of receipt, by mail (first class, postage prepaid), or by overnight delivery using a globally-recognized carrier, to the Parties at the following addresses: Theravance: Theravance, Inc. 901 Gateway Boulevard South San Francisco, CA 94080 Facsimile: 650-827-8683 Attn: Senior Vice President, Commercial Development GSK: Glaxo Group Limited Glaxo Wellcome House Berkeley Avenue Greenford Middlesex UB6 0NN United Kingdom Attn: Company Secretary Facsimile: 011 44 208-047-6912 With a copy to: GlaxoSmithKline plc 980 Great West Road Brentford Middlesex TW8 9GS United Kingdom Attn: Corporate Law Facsimile: 011 44 208-047-6912 and with a copy to: Brentford Middlesex TW8 9GS United Kingdom Attn: Vice President, Worldwide Business Development Facsimile: 011 44 208-990-8142 or to such other address as the addressee shall have last furnished in writing in accord with this provision to the addressor. All notices shall be deemed effective upon receipt by the addressee. 16.8 Severability. In the event of the invalidity of any provisions of this Agreement or if this Agreement contains any gaps, the Parties agree that such invalidity or gap shall not affect 52 + + + + + + the validity of the remaining provisions of this Agreement. The Parties will replace an invalid provision or fill any gap with valid provisions which most closely approximate the purpose and economic effect of the invalid provision or, in case of a gap, the Parties' presumed intentions. In the event that the terms and conditions of this Agreement are materially altered as a result of the preceding sentences, the Parties shall renegotiate the terms and conditions of this Agreement in order to resolve any inequities. Nothing in this Agreement shall be interpreted so as to require either Party to violate any applicable laws, rules or regulations. 16.9 Headings. The headings used in this Agreement have been inserted for convenience of reference only and do not define or limit the provisions hereof. 16.10 Waiver. Any term or condition of this Agreement may be waived at any time by the Party that is entitled to the benefit thereof, but no such waiver shall be effective unless set forth in a written instrument duly executed by or on behalf of the Party waiving such term or condition. No waiver by any Party of any term or condition of this Agreement, in any one or more instances, shall be deemed to be or construed as a waiver of the same or any other term or condition of this Agreement on any future occasion. Except as expressly set forth in this Agreement, all rights and remedies available to a Party, whether under this Agreement or afforded by law or otherwise, will be cumulative and not in the alternative to any other rights or remedies that may be available to such Party. 16.11 Entire Agreement. This Agreement (including the exhibits and schedules hereto) constitutes the entire agreement between the Parties hereto with respect to the within subject matter and supersedes all previous agreements and understandings between the Parties, whether written or oral. This Agreement may be altered, amended or changed only by a writing making specific reference to this Agreement and signed by duly authorized representatives of Theravance and GSK. 16.12 No License. Nothing in this Agreement shall be deemed to constitute the grant of any license or other right in either Party, to or in respect of any Collaboration Product, patent, trademark, Confidential Information, trade secret or other data or any other intellectual property of the other Party, except as expressly set forth herein. 16.13 Third Party Beneficiaries. None of the provisions of this Agreement shall be for the benefit of or enforceable by any Third Party, including without limitation any creditor of either Party hereto. No such Third Party shall obtain any right under any provision of this Agreement or shall by reasons of any such provision make any Claim in respect of any debt, liability or obligation (or otherwise) against either Party hereto. 16.14 Counterparts. This Agreement may be executed in any two counterparts, each of which, when executed, shall be deemed to be an original and both of which together shall constitute one and the same document. 53 + + + + + + 16.15 Single Closing Condition. The obligation of each Party to consummate the transaction contemplated hereby is subject to the satisfaction of the following condition (the "Closing Condition"): All filings under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and any other similar competition or merger control laws that are necessary in any jurisdiction with respect to the transaction contemplated hereby shall have been made and any required waiting period under such laws shall have expired or been terminated and any Governmental Authority that has power under or authority to enforce such laws shall have, if applicable, approved, cleared or decided neither to initiate proceedings or otherwise intervene in respect of the transaction contemplated hereby nor to refer the transaction to any other competent Governmental Authority. Each Party shall use good faith efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with the other party in doing, all things necessary, proper or advisable to consummate and make effective the transaction contemplated by this Agreement, including, but not limited to satisfaction of the Closing Condition and each Party shall keep the other Party reasonably apprised of the status of matters relating to the completion of same. In connection with the foregoing, the Parties hereby agree to negotiate in good faith to make as soon as practicable any modification or amendment to this Agreement or any agreement related hereto that is required by the United States Federal Trade Commission, Department of Justice or equivalent Governmental Authority, provided that no Party shall be required to agree to any modification or amendment that, in the reasonable opinion of such Party's external legal or financial counsel, would be adverse to such Party. This Agreement may be terminated by either Party upon written notice any time after June 1, 2003 if the transactions contemplated by this Agreement shall not have been consummated by June 1, 2003 due to failure to satisfy the Closing Condition; provided, however, that the terminating Party shall not have breached in any material respect its obligations under this Agreement in any manner that shall have been the proximate cause of, or resulted in, the failure to satisfy the Closing Condition or otherwise to consummate the transactions contemplated by this Agreement by such date. 54 + + + + + + IN WITNESS WHEREOF, Theravance and GSK, by their duly authorized officers, have executed this Agreement on November 14, 2002. THERAVANCE, INC. + + + + GLAXO GROUP LIMITED By: /s/ Rick E Winningham + + + + + + By: /s/ Jean-Pierre Garnier + + Rick E Winningham + + + + + + + + Jean-Pierre Garnier + + Chief Executive Officer + + + + + + + + Chief Executive Officer 55 + + + + + + Schedule 1.19 Criteria for Theravance New Compounds and Replacement Compounds 1. Single optical isomer, which is patentable. 2. Potency in vitro and in vivo compatible with potential to develop in a DPI device. 3. Intrinsic agonist activity not less than that of salmeterol. 4. Selectivity at β adrenoceptors, relative to β and β adrenoceptors, similar or superior to that of formoterol, assessed in assays determining equi- potent molar ratios relative to that of isoprenaline (isoproterenol). 5. Selectivity at non-β adrenoceptors >100. 6. No significant inhibition of the hERG potassium channel at a concentration at least 30 fold greater than the anticipated therapeutic maximum concentration in plasma. 7. Duration of agonist activity in vivo to be clearly longer than that of salmeterol. This would be at least 72 hours in the Theravance model. The exact duration criterion for either the GSK or the Theravance model might be modified in the light of forthcoming clinical data from the program. 8. Stable compound suitable for formulation to pursue FTIM studies, with crystalline form identified. 9. Oral bioavailability to be less than 10% in the rat and less than 25% in the dog. 10. No significant generation of markedly active metabolite(s) in vitro. 11. Irritation to the respiratory tract no worse than salmeterol in a non-GLP 7-day inhaled rat study. 56 + +2 1 3 + +2 \ No newline at end of file diff --git a/full_contract_txt/INTELLIGENTHIGHWAYSOLUTIONS,INC_01_18_2018-EX-10.1-Strategic Alliance Agreement.txt b/full_contract_txt/INTELLIGENTHIGHWAYSOLUTIONS,INC_01_18_2018-EX-10.1-Strategic Alliance Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..fd3164d0cd443f8991612d61be70008d4fcd6fdc --- /dev/null +++ b/full_contract_txt/INTELLIGENTHIGHWAYSOLUTIONS,INC_01_18_2018-EX-10.1-Strategic Alliance Agreement.txt @@ -0,0 +1,27 @@ +Strategic Alliance Agreement This agreement is made and entered into this 10th day of January, 2018 by and between Bravatek Solutions, Inc., a corporation organized under the laws of the State of Colorado, ("Bravatek"), with an address at 2028 E. Ben White Blvd., Unit #240-2835, Austin, Texas 78741 and Fazync LLC, a limited liability company organized under the laws of the State of Colorado with an address at 2376 Gold River Drive, Rancho Cordova, CA 95670 ("Fazync"). Fazync is a wholly owned subsidiary of publicly traded company Intelligent Highway Solutions, Inc., ("IHSI"), a Nevada corporation. Whereas, Bravatek is a corporation, which has technical expertise in security-related software, tools and systems/services (including telecom services) to support, deploy and test its current and potential customers' most critical initiatives. Whereas, Fazync is a company engaged in the business of providing energy-saving solutions and capabilities to the Critical Infrastructure/Key Resources arena. Whereas, the parties desire to enter into a business relationship which will designate Bravatek as the project based business partnership channel for governmental and non-governmental departments / agencies / units for the purpose of promoting Fazync relevant capabilities, products and/or service solutions. Now therefore, the parties mutually agree to enter into a strategic alliance under the following terms and conditions: 1) Duties of Bravatek Bravatek agrees to serve as a non-exclusive project sales lead finder for Fazync. In this capacity, Bravatek will use its best efforts to provide the following services to Fazync a. Promote, market and introduce the Products to prospective clients in the government space nationwide. b. Provide a quarterly Pipeline or project information leads report to Fazync a monthly basis which contains a 3-month rolling forecast of potential sales. c. Follow-up on on-going project leads that Fazync actively engaged with or believes is appropriate. d. Provide Fazync with any promotional materials, technical papers, white papers, proposals, etc. prior to publication or delivery to prospective clients. + + + + + + 2) Duties of Fazync Fazync agrees to use its best efforts to promote and support project lead finding and after-sales support of Bravatek by: a. Listing Bravatek in all appropriate sales and marketing materials as a non-exclusive alliance partner (with focus of government customers) b. Provide timely responses to both technical and administrative questions posed by Bravatek. c. Promote Bravatek's product and service offerings whenever possible. d. Aid Bravatek in the writing of any technical/marketing/sales documents when requested and participate in mutually-agreed upon sales calls. e. Provide Bravatek with co-branded marketing material that can be emailed or handed to prospective clients. + + 3) Obligations of the Parties Bravatek and Fazync agree to jointly: a. Develop and implement a joint Product Solution and Application Strategy whereby targeted markets/potential client- types/applications are mutually agreed upon; b. Support each other in all agreed-upon technical, marketing and promotional efforts; c. Develop a joint strategy for developing new product/services/capabilities to mutually benefit both parties; d. Utilize each other as Preferred Vendors for services whenever possible upon mutual agreement. 4) Compensation When custom Products are designed, developed and to be delivered to Bravatek-identified perspective clients, the parties shall agree to a proposed sales price for use during the project in writing prior to the commencement of each project. + + + + + + For any Product or Solution sold to any perspective clients introduced by Bravatek registered with Fazync via email to IHSI's CEO, Devon Jones, and delivered through Bravatek or a Fazync -designated distribution affiliate(s) or sales channel(s), Bravatek will receive a lead-finder fee, to be mutually discussed and finally decided by Fazync at the range of minimum of 10% to maximum of 20% of project revenue, with an exact fee to be depending upon the overall project sales margin and cost of development and delivery of each project, payable NET 30 days after each client payment on delivered products received at Fazync bank account. 5) Confidentiality "Confidential information" shall mean any and all technical and non-technical information, documents and materials related to client projects of party and products, services and business of each of the parties. Fazync and Bravatek agree to maintain in strict confidence and not to disclose or disseminate, or to use for any purposes other than performance of the projects, the Confidential Information disclosed. The obligation of non-disclosure shall not apply to the following: a. Information at or after such time that is publicly available through no fault of either party b. Information at or after such time that is disclosed to either party by a third party entitled to disclose such information c. Information which is required by law to be disclosed to federal, state or local authorities. 6) Term of Confidentiality For a period of five (5) years after termination of this Agreement, the parties shall treat as confidential all information and take every reasonable precaution and use all reasonable efforts to prevent the unauthorized disclosure of the same. The parties agree to take all steps reasonably necessary and appropriate to ensure that their employees, agents, and/or assistants treat all information as confidential and to ensure that such employees, agents, and/or assistants are familiar with and abide by the terms of this Agreement. 7) Term The term of this Agreement is twelve (12) months from the date hereof, and will be automatically renewed for one (1) additional twelve month period unless either party shall notify the other in writing of its intention not to renew. Such notice must be given ninety (90) days prior to expiration of the original term. This Agreement may also be terminated by either party upon ninety (90) days written notice. + + + + + + 8) Notices Any notices required under this Agreement shall be delivered to: Bravatek Technologies, Inc. 2028 E. Ben White Blvd. Unit #240-2835 Austin, Texas 78741 Fazync, Inc. 2376 Gold River dr. Ranch Cordova, CA 95670 9) Governing Law This Agreement is entered into in the State of Texas and shall be interpreted according to the laws of the State of Texas. 10) Indemnification Fazync shall indemnify Bravatek, its directors, officers and employees, for any and all damages, costs, expenses, and other liabilities, including reasonable attorney's fees and court costs incurred in connection with any third-party claim, action or proceeding arising from the negligence or intentional misconduct of Fazync or breach of Fazync of any of its obligations under this Agreement. Bravatek shall indemnify Fazync, its directors, officers and employees, for any and all damages, costs, expenses, and other liabilities, including reasonable attorney's fees and court costs, incurred in connection with any third-party claim, action or proceeding arising from the negligence or intentional misconduct of Bravatek or breach of Bravatek of any of its obligations under this Agreement. 11) Modifications No changes or modifications of this Agreement or any of its terms shall be deemed effective unless in writing and executed by the parties hereto. 12) Assignment This Agreement shall not be assignable by either party without the prior written consent of the other party. 13) Entire Agreement This Agreement represents the complete and entire understanding between the parties regarding the subject matter hereof and supersedes all prior negotiations, representations, or agreements, either written or oral, regarding this subject matter. + + + + + + This Agreement shall not be considered accepted, approved or otherwise effective until signed by the appropriate parties. Bravatek Technologies, Inc. Fazync LLC By: By: Name: Thomas A. Cellucci Name: Devon Jones Title: CEO Title: Manager Date: January 10, 2018 Date: January 10, 2018 \ No newline at end of file diff --git a/full_contract_txt/INTERNATIONALFASTFOODCORP_04_04_1997-EX-99-FRANCHISE AGREEMENT.txt b/full_contract_txt/INTERNATIONALFASTFOODCORP_04_04_1997-EX-99-FRANCHISE AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..2c311772d194599a2f30cf118d340ec5f75fd583 --- /dev/null +++ b/full_contract_txt/INTERNATIONALFASTFOODCORP_04_04_1997-EX-99-FRANCHISE AGREEMENT.txt @@ -0,0 +1,861 @@ +FRANCHISE AGREEMENT + + TABLE OF CONTENTS + +I. INTRODUCTION + +II. AGREEMENT + + 1. Definitions + + 2. Franchise Grant; Term + + 2.1 Grant 2.2 Term 2.3 No Renewal Right: No Exclusivity 2.4 Continuous Operation 2.5 Best Efforts + + 3. Consideration for Franchise Grant + + 4. Management, Control and Corporate Documents of Franchisee + + 4.1 Managing Director 4.2 Director of Operations 4.3 Substitute Director of Operations 4.4 Restaurant Manager 4.5 Corporate Documents 4.5.1 Single Purpose Entity 4.5 2 Managing Director's Authority 4.5.3 Issuance and Transfer of Shares 4.5.4 Amendments + + 5. Standards and Uniformity 5.1 Strict Compliance 5.2 The MOD Manual 5.3 Building and Premises 5.3.1 Initial Construction 5 3 2 Repair and Maintenance 5 3.3 Current Image 5.4 Signs 5.5 Equipment 5.6 Vending Machines, Etc. + + 5 7 Menu Service and Hygiene 5.8 Hours of Operations 5.9 Uniforms 5.10 Advertising and Promotion Materials 5.11 Interference with Employment Relations of Others 5.12 Improvements 5.13 Self-Audit 5.14 Health Problems 5.15 Right of Entry, Inspection and Closure 5.16 Sources of Supply 5.16.1 Authorized Suppliers 5.16.2 Self-Supply 5.16.3 Limit on BKC Responsibility 5. 16.4 Franchisee's Responsibilities + + 6. Services to Franchisee + + 6.1 Services Provided By BKC 6.2 Services Not Provided By BKC 6.3 Optional Services + + 7. Location 7.1 Exclusive Purpose 7.2 Damage to Franchised Restaurant + + 8. Training and Staffing + + 8.1 Pre-Opening Training 8.2 New Director of Operations 8.3 Training Program + + 9. Royalty and Advertising Contribution + + + + + + 9.1 Royalty 9.1.1 Payment of Royalty 9.1.2 Inability to Remit Royalty 9. 2. Advertising and Sales Promotion 9.2.1 Franchisee's Administration of Ad Fund 9.2.2 BKC's Right to Administer Funds 9.2.3 Administration 9.2.4 Compliance with Laws and Policies 9.3 Gross Sales 9.4 Interest and Attorney's Fees + + ii + + 10. Accounting Procedures; Right of Audit. + + 10.1 Accounting 10.2 Annual Financial Statements 10.3 Audits 10.4 Release of Financial Information 10.5 Polling 10.5.1 POS Systems 10.5.2 Authorized Polling 10.5.3 Other Information + + 11. Limitations of Franchise 11.1 Trademarks, Trade Names, Service Marks and Trade Secrets 11.1.1 Registration Assistance by Franchisee 11.1.2 Ownership 11 1.3 Confidentiality of trade Secrets 11.1 4 Registered User Agreements 11.1.5 No Impairment of Marks 11.1.6 Assignment of Righits in Marks 11.1.7 Infringement, Etc. 11.1.8 Registered Marks 11.1 9 Franchisee Name 11.1.10 Registration of Agreement 11.2 Independent Contractor 11.2.1 No Agency 11.2.2 Public Notice of Independence + + 12. Unfair Competition + + 13. Insurance; Indemnification 13.1 General Liability Insurance 13.2 Workers Compensation, Etc. 13.3 Indemnity + + 14. Taxes 14.1 Payment When Due 14.2 Withholding Taxes 14.3 Election + + 15. Disposal 15.1 Transfer of Interest by Franchisee 15.2 Transfer of Interest by Principals 15.3 Notice of Proposed Transfer 15.4 Right of First Refusal + + iii + + 15.4.1 Notice; Exercise of Option 15.4.2 No Waiver 15.4.3 Unauthorized Transfer Void 15.4.4 Sale; BKC Consent + + 15.5 BKC Consent to Transaction 15.5.1Transfer of Substantially All Assets or Transfer of Stock by Principal 15.5.2 Securities Offerings + + + + + + 15.5.2 1 Compliance with BKC Requirements 15.5.2.2 Submission to BKC 15.5.2.3 Registration Rights: Secondary Offerings 15.5.2.4 BKC ' Expenses 15.5.3 Certain Exceptions + + 15.6 No Waiver 15.7 Death or Mental Incapacity of Principal 15.8 Corporate Documents 15.9 Assignment by BKC + + 16. The Principals + + 16.1 Stock Ownership 16.2 Compliance by Principals 16.3 Guaranty + + 17. Defaults and Effects of Termination + + 17.1.1 Events of Default by Franchisee 17.1.2 Event of BKC De fault 1 7.2 Termination 17.3 Effect of Termination 17.4 Post-Termination Option 17.5 Post-Termination Obligations of Franchisee 17.5.1 Options to Purchase Location 17.5.2 Deidentification 17.5.3 BKC Lien 17.5.4 Acceleration of Payments + + 17.6 Dispute Resolution + + 18. Restrictive Covenant + + iv + + 19. Miscellaneous: General Conditions 19.1 Interpretation 19.2 Non-Waiver 19.3 Governing Law/Jurisdiction 19.4 Licenses, Permits. Etc. 19.5 Compliance with Laws 19.6 Remedies 19.7 Severability 19.8 Notices 19.8.1 Notice to BKC 19.8.2 Notice to Franchisee/Principals 19.8.3 Delivery 19.9 Language 19.10 Modification 19.11 Binding Effect 19.12 Currency 19.13 Survival 19.14 Agency + + 20. Entire Agreement + + 21. independent Advice + +III. SCHEDULE 1 + +IV. SCHEDULE 2 + +V. EXHIBIT A - Poland Trademarks + + + + + + v + + FRANCHISE AGREEMENT ------------------- + + Corporate --------- AGREEMENT dated 199 + +Between BURGER KING CORPORATION a company incorporated in Florida, United States of America with its principal office and place of business at 17777 Old Cutler Road, Miami, Florida, United States of America ("BKC") + +AND The party specified as the Franchisee on SCHEDULE 1 attached hereto (the "Franchisee") + +AND The party or parties specified as the Principals on SCHEDULE 1 attached hereto (collectively, the "Principals" and individually, a "Principal") + + INTRODUCTION + + A. BKC has developed a system (the "Burger King System") for the operation of quick service restaurants ( "Burger King Restaurants"). The Burger King System includes proprietary designs for restaurant buildings, equipment and decor, a proprietary service format, standardized product and quality specifications, and such trademarks, service marks and other marks as BKC may authorize for use in connection with the operation of Burger King Restaurants (the "Burger King Marks"). + + B. The Franchisee possesses knowledge and market information concerning the operation of Burger King Restaurants in the Republic of Poland and the Franchisee recognizes that BKC has not made any representations concerning the level and extent of the awareness of the Burger King Marks or the Burger King System or the likelihood that any such awareness can or will be established in Poland or as to the availability of local sources of supply in Poland or the ability of any supplier to meet standards for approval by BKC. The Franchisee has requested a license to operate a Burger King Restaurant. The Franchisee represents that BKC has not made, and the Franchisee is not relying upon, any representation as to the profits and/or sales volumes which Franchisee might be expected to realize, or costs or levels of costs which Franchisee might be expected to incur, or the prospects of success for Franchisee or Burger King Restaurants in Poland. + + C. The Franchisee acknowledges and represents to BKC that it is entering into this Agreement after having made an independent investigation of BKC and its operations and of market and economic conditions in the Republic of Poland. The Franchisee represents that BKC has not made, and that the Franchisee + + 1 + +is not relying upon, any representation as to the profits and/or sales volumes which Franchisee might be expected to realize, or costs or levels of costs which the Franchisee might be expected to incur, or the prospects of success for the Franchisee or Burger King Restaurants in Poland, or the level or extent of the awareness of the Burger King Marks or the Burger King System or brand in Poland or the likelihood that any such awareness can or will be established in Poland, or the availability of local sources of supply in Poland or the ability of any such local sources of supply to meet standards for approval by BKC. The Franchisee further represents and agrees that BKC and persons acting on its behalf have not made, and the Franchisee is not relying upon, any representations or promises that are not contained in this Agreement. + + D. Each of the Principals owns an equity interest in the Franchisee. + + AGREEMENT + + In consideration of the fees and other sums payable by the Franchisee and the mutual covenants herein, the parties agree as follows: + +1. DEFINITIONS. For purposes of this Agreement, the following expressions shall have the meanings given to them below: + + 1.1 "Affiliate" means any company which is directly or indirectly controlled by BKC, controls BKC, or is controlled by a company which in turn controls BKC, and "control" for these purposes means de facto control. + + 1.2 "Burger King Marks" has the meaning ascribed to it in Paragraph A of the introduction. + + + + + + 1.3 "Burger King System" has the meaning ascribed to it in Paragraph A of the introduction. + + 1.4 "Current Image" means the then current, BKC approved physical appearance of new Burger King Restaurants as it relates to signage, fascia, color schemes, menu boards, lighting, furniture, finishes and other non-structural matters generally. + + 1.5 "Franchised Restaurant" means the buildings at the Location and the business carried out at the Location. + + 1.6 "Gross Sales" has the meaning ascribed to it in Subparagraph 9.3. + + 1.7 "Location" has the meaning ascribed to it on SCHEDULE 1. + + 2 + + 1.8 "Director of Operations" has the meaning ascribed to it in Subparagraph 4.1 and on SCHEDULE 1. + + 1.9 "Managing Director" has the meaning ascribed to it in Subparagraph 4.3 and on SCHEDULE 1. + + 1.10 "MOD Manual" means all volumes of the Manual of Operating Data setting out BKC's standards, specifications and procedures of operation, as revised from time to time by BKC including both required and recommended. + +2. FRANCHISE GRANT TERM. + + 2.1 GRANT. In reliance upon the application and information furnished by the Franchisee, and subject to the terms and conditions contained in this Agreement, BKC grants to the Franchisee a license to use the Burger King System and the Burger King Marks in the operation of a Burger King Restaurant at that Location. + + 2.2 TERM. The license hereby granted shall commence on the date the Franchised Restaurant opens for business (the "Commencement Date"), and, unless sooner terminated in accordance with the terms and provisions of this Agreement, shall continue for the period of years set forth on SCHEDULE 1 hereto (the "Term"). + + 2.3 NO RENEWAL RIGHT; NO EXCLUSIVITY. The Franchisee acknowledges and agrees that this license is a license for the operation of a Burger King Restaurant at the Location only and that the Franchisee has no right to any exclusive territory or to object to the location of an additional Burger King Restaurant at a site which is in the immediate proximity of the Franchised Restaurant and/or in the same trading area of the Franchised Restaurant Subject to the Restaurant Development Agreement between BKC and International Fast Food Corporation dated March 14, 1997, (the "Development Agreement"), the development and location of additional Burger King Restaurants shall be determined by BKC in its sole business judgment and BKC may develop or franchise additional Burger King Restaurants anywhere, including sites in the immediate proximity of the Franchised Restaurant and/or in the same trading area of the Franchised Restaurant, in its sole business judgment. The Franchisee hereby waives any right it has, may have, or might in the future have, to oppose such development and location, and any claim for compensation from BKC in respect of any and all detriment or los s suffered by it as a result of the development and location of additional Burger King Restaurants in the immediate proximity of the specified Location and/or in the same trading area of the Franchised Restaurant. + + 2.4 CONTINUOUS OPERATION. Franchisee shall continuously operate the Franchised Restaurant at the Location throughout the full term of this Agreement. Except as permitted under this Section 2.4, any failure to do so shall constitute an Event of Default under this Agreement and BKC shall be + + 3 + +entitled to alI rights and remedies available under Section 17.2 of this Agreement. Provided, however, that t he Franchisee may temporarily cease operations for a period of time reasonably necessary to comply with the requirement of any competent governmental authority that it repair, clean remodel, or refurbish the Location. The Franchisee may also temporarily cease operations on national holidays and for a period of time reasonably necessary to complete repairs or deal with an act of God, a labor strike, civil unrest, or other emergency situation which would endanger the public or the Franchisee's employees. However, in the event that any temporary closing or discontinuance of + + + + + +operation permitted under this Section 2.4 exceeds 180 days, BKC shall have the right to terminate this Agreement, whereupon all rights granted to Franchisee under this Agreement shall terminate, without liability to BKC. + + 2.5 BEST EFFORTS. Franchisee shall use its best efforts to diligently market and promote the Franchised Restaurant. + +3. CONSIDERATION FOR FRANCHISE GRANT. At least seven (7) days before the Commencement Date, the Franchisee shall pay to BKC the initial franchise fee described in SCHEDULE 1, which sum shall be fully earned by BKC and non-refundable upon execution of this Agreement. + +4. MANAGEMENT. CONTROL AND CORPORATE DOCUMENTS OF FRANCHISEE. + + 4.1 MANAGING DIRECTOR. The Franchisee shall, subject to BKC's approval, appoint an individual as the "Managing Director" who shall be responsible for the overall management of the Franchisee. The Managing Director and Director of Operations may be the same individual. + + 4.2 DIRECTOR OF OPERATIONS. Franchisee shall, subject to BKC's approval, appoint an individual as the "Director of Operations" who shall be trained in the Burger King System. The Director of Operations shall be granted the authority to direct any action necessary to ensure that the day-to-day operation of the Franchised: Restaurant is in compliance with all agreements with BKC relating to the Franchised Restaurant. The Director of Operations shall devote full time and best efforts to the overall supervision of the Franchised Restaurant and any other Burger King Restaurants owned by the Franchisee as to which he/she is designated as the "Director of Operations. " + + 4.3 SUBSTITUTE DIRECTOR OF OPERATIONS. If the position of Director of Operations becomes vacant for any reason, the vacancy shall be filled within ninety (90) days by a new Director of Operations approved by BKC. + + 4.4 RESTAURANT MANAGER. At all times during the Term of this Agreement, Franchisee shall employ at least one (1) individual (the "Restaurant Manager") who is responsible for the direct, personal supervision of the Franchise d Restaurant . + + 4 + + 4.5 CORPORATE DOCUMENTS. + + 4.5.1 SINGLE PURPOSE ENTITY. Franchisee's sole business activity shall be the development and operation of Burger King restaurants. The articles of incorporation, bylaws and other governing documents of Franchisee must provide that Franchisee is a single purpose entity formed solely for the purpose of developing and operating Burger King restaurants. + + 4.5.2 MANAGING DIRECTOR'S AUTHORITY. The articles of incorporation, bylaws and other governing documents of Franchisee must mandate the designation of a Managing Director and describe the Managing Director's authority to bind the Franchisee and to direct any actions necessary to ensure compliance with this Franchise Agreement and any ancillary agreements. + + 4.5.3 ISSUANCE AND TRANSFER OF SHARES. The articles of incorporation, the bylaws and each stock certificate of Franchisee shall restrict the issuance and the transfer of shares of Franchisee as provided in Paragraph 15.8 below. + + 4.5.4 AMENDMENTS. BKC must be immediately provided with any amendments, shareholder agreements, addenda, revisions or other alterations to the articles of incorporation, bylaws or constitution of Franchisee. No amendment to such governing documents may be made, nor may any resolution be adopted by the board of directors of Franchisee, without the written consent of an authorized officer of BKC, if such amendment or resolution would (1) change the description of the Franchisee's purpose or authorized activities; (2) change the designation of, or the procedures for designating, the Managing Director; (3) change the authority delegated to the Managing Director; or (4) materially alter promises or representations contained in the application approved by BKC. + +5. STANDARDS AND UNIFORMITY. + + 5.1 STRICT COMPLIANCE. The Franchisee agrees to comply strictly at all times with the Burger King System, which Franchisee acknowledges is a fundamental term of this Agreement and a necessary and reasonable requirement in the interests of the Franchisee and others operating under the Burger King System. In particular, the Franchisee shall at all times comply with the following provisions of this Section 5. + + 5.2 THE MOD MANUAL. The MOD Manual shall be kept at the Franchised Restaurant and all changes or additions shall be inserted upon receipt. The Franchisee agrees that changes in standards, specifications and procedures may become necessary and desirable from time to time and shall comply with such modifications, revisions and additions to the MOD Manual as BKC in the good + + + + + +faith exercise of its judgment believes to be desirable. The information + + 5 + +contained in the MOD Manual is confidential and the Franchisee shall use the MOD Manual only in connection with the operation of the Franchised Restaur ant and other licensed Burger King Restaurants + + 5.3 BUILDING AND PREMISES. + + 5.3.1 INITIAL CONSTRUCTION. The Franchised Restaurant shall be constructed and the premises initially improved in the manner approved by BKC, and shall be decorated, furnished, and equipped with equipment, furnishings, and fixtures which meet BKC's specifications and Current Image. The appearance of the Franchised Restaurant shall not thereafter be altered except as approved by BKC in writing. + + 5.3.2 REPAIR AND MAINTENANCE. The Franchisee shall, at its own expense, continuously throughout the Term of this Agreement, maintain the Franchised Restaurant in good condition and repair in accordance with BKC's then current repair and maintenance standards. + + 5.3.3 CURRENT IMAGE. During the year immediately following the expiration of one half of the Term of this Agreement (e.g., in the 11th year of a 20 year term), the Franchisee shall remodel, improve and alter the exterior of the Franchised Restaurant to conform with the Current Image in effect during the prior year . + + 5.4 SIGNS. The Burger King Marks will be displayed only in the manner and at such locations as are authorized by BKC. The Franchisee agrees to maintain and display signs conforming to the Current Image. The Franchisee shall discontinue the use of and destroy such signs as are declared obsolete by BKC. + + 5.5 EQUIPMENT. Only equipment and equipment layouts approved by BKC shall be used at the Location. All equipment shall be maintained in a condition that meets operational standards specified in the MOD Manual, and as equipment becomes obsolete or inoperable, the Franchisee will replace such items with the types and kinds of equipment as are then approved for use in new Burger King Restaurants at the time of replacement. If BKC determines that additional or substitute equipment is needed in any part of the Location due to a change in menu items or method of preparation and service, or because of health or safety considerations, the Franchisee will install the new equipment within such time as BKC may reasonably specify. + + 5.6 VENDING MACHINES, ETC. No telephone booths, newspaper racks, juke boxes, vending machines, games, rides or any other type of machines shall be installed without the prior written approval of BKC. + + 5.7 MENU, SERVICE AND HYGIENE. The Franchised Restaurant shall serve all menu items and brands specified by BKC, and shall not serve any items that are not set forth in the MOD Manual or otherwise authorized and approved by BKC in writing. The Franchisee shall adhere to all specifications contained in the MOD + + 6 + +Manual or as otherwise prescribed by BKC as to ingredients, storage, handling, method of preparation and service, weight and dimensions of products served, and standards of cleanliness, health, and sanitation. All food, drinks, and other items will be served and sold in packaging that meets BKC's specifications. Only food, paper products, packaging and supplies from sources approved by BKC (which expression includes sources of both product and distribution) shall be used in the Franchised Restaurant. + + 5.8 HOURS OF OPERATION. Subject to the provisions of Paragraph 2.4 above, or unless otherwise authorized or directed by BKC the entire Franchised Restaurant shall be open for business a minimum of the hours indicated on SCHEDULE 1 daily, seven (7) days a week, except where prohibited by law or government regulation. BKC recognizes that considerations peculiar to the location of the Franchised Restaurant may make it necessary to alter the aforesaid hours of operation, and BKC will not unreasonably withhold its consent to do so. + + 5.9 UNIFORMS. All employees at the Location shall wear uniforms previously approved by BKC as meeting the design, color and specification as are from time to time prescribed by BKC. + + + + + + 5.10 ADVERTISING AND PROMOTION MATERIALS. Only such advertising or promotional materials, slogans or other items as are authorized by BKC in writing prior to use shall be used, sold, or distributed, and no display or use of the Burger King Marks shall be made without the prior written permission of BKC. All materials on which Burger King Marks are used shall bear such notice of registration or license legend as BKC may specify. The Franchisee agrees to comply with the advertising and promotional standards established from time to time by BKC. + + 5.11 INTERFERENCE WITH EMPLOYMENT RELATIONS OF OTHERS. The Franchisee will not attempt, directly or indirectly, to entice or induce any employee of BKC or of an Affiliate of BKC or of another franchisee of BKC to leave such employment, nor to employ such employee within six (6) months after his or her termination of employment with such employer, except with the prior written consent of such employer. + + 5.12 IMPROVEMENTS. The Franchisee shall notify BKC of any potential improvements or new features which it identifies as capable of benefitting the Burger King System. The Franchisee shall not use potential improvements or new features at the Franchised Restaurant unless authorized by BKC in writing and at its sole discretion, but BKC is under no obligation to authorize such use. The Franchisee acknowledges and agrees that all such potential improvements and new features shall become the exclusive property of BKC without payment of any consideration to the Franchisee, and BKC is free to evaluate such potential improvements or new features in its own restaurants and introduce any such improvements or new features into the Burger King System for the benefit of BKC + + 7 + +and other franchisees. The Franchisee agrees to execute any additional documents which BKC may deem necessary to effect or perfect the provisions of this Paragraph 5.12. + + 5.13 SELF-AUDIt. The Franchisee shall participate in any self-audit scheme which may from time to time form part of the Burger King System. + + 5.14 HEALTH PROBLEMS. The Franchisee shall immediately notify BKC of any actual or suspected occurrence of any serious communicable disease or infection at or among staff or customers at the Franchised Restaurant. + + 5.15 RIGHT OF ENTRY, INSPECTION AND CLOSURE. BKC shall have the unrestricted right to enter the Franchised Restaurant to conduct such reasonable activities as it deems necessary to ascertain compliance with this Agreement. The inspections may be conducted without prior notice at any time when the Franchisee or any one of its responsible employees or representatives is at the Franchised Restaurant. The inspections shall be performed in a manner which minimizes interference with the operation of the Franchised Restaurant. BKC may require the removal of any items which do not comply with this Agreement at the Franchisee's cost. In the event that BKC identifies, or reasonably suspects the existence of, any significant risk to health or safety in any aspect of the operation at the Location, BKC may require the Franchisee immediately to close the Franchised Restaurant until the hazard as been eliminated. BKC shall specify the grounds for taking such action and such steps if any a it believes are necessary to eliminate the hazard and shall cooperate with the Franchisee to enable the Franchisee to re-open the Franchised Restaurant as soon as possible. + + 5.16 SOURCES OF SUPPLY. + + 5.16.1 AUTHORIZED SUPPLIERS. BKC may require that any item required for or used in the operation of the Franchised Restaurant shall be previously approved by BKC in its sole and absolute discretion and that the supplier and distributor of such items also be previously approved by BKC in its sole and absolute discretion. The Franchisee shall in such case purchase only from BKC authorized suppliers and distributors. Should the Franchisee propose an alternative supplier and distributor, BKC shall evaluate such supplier and distributor against its then-current criteria, as established by BKC in its sole discretion, and either approve or disapprove such supplier and distributor. Any supplier and distributor proposed by the Franchisee may be required to sign a suitable confidentiality undertaking before BKC's confidential specifications are disclosed. In approving or disapproving suppliers and distributors, the Franchisee acknowledges and agrees that BKC may devote such resources and time as BKC may reasonably determine is necessary to evaluate any such supplier or distributor in its sole discretion. BKC agrees that it will apply those criteria in good faith toward the Franchisee. If BKC denies the Franchisee's request for approval of a supplier or distributor BKC shall advise the Franchisee of the reasons for its decision. If BKC fails to approve or deny the Franchisee's + + 8 + + + + + +request for approval of a supplier or distributor within thirty (30) business days then approval shall be deemed to have been given. Approval of any suppler or distributor by BKC is subject to revocation in its sole discretion. + + 5.16.2 SELF-SUPPLY. Franchisee may, upon prior written notice to BKC, invest in BKC approved suppliers and/or distributors to the Franchised Restaurant or request approval from BKC to become an approved supplier and/or distributor to the Franchised Restaurant. BKC shall not unreasonably withhold its approval of the Franchisee as a supplier and/or distributor to the Franchised Restaurant and/or other Burger King Restaurants. Franchisee expressly acknowledges and agrees, however, that the Franchisee must meet all of BKC's then current conditions for supplier and/or distribution agreements. + + 5.16.3 LIMITS ON BKC RESPONSIBILITY. BKC shall NOT be responsible for the following: + + (a) Arranging, assuring, or facilitating the delivery or availability o labor, food, paper, equipment, furniture, fixtures, or any other goods or services in connection with the operation of the Franchised Restaurant. + + (b) Arranging, assuring, or facilitating the delivery or availability of labor, food, paper, equipment, furniture, fixtures or any other goods or services in connection with the operation of the Franchised Restaurant at a reasonable or at any other particular cost (whether stated as a percentage of sales or otherwise to the Franchised Restaurant or to the Franchisee). + + 5.16.4 FRANCHISEE'S RESPONSIBILITIES. Franchisee shall be responsible for locating and submitting to BKC for approval, pursuant to Section 5.16.1 above, suppliers and distributors capable of manufacturing and/or delivering all BKC required goods and services to the Franchised Restaurant on a consistent and reliable basis. + +6. SERVICES TO FRANCHISEE. + + 6.1 SERVICES PROVIDED BY BKC. BKC, its designee or an Affiliate of BKC shall periodically advise and consult with the Franchisee in connection with the operation of the Franchised Restaurant and shall provide to he Franchisee: + + (a) The MOD Manual, including all revisions and updates thereto, which will be loaned to the Franchisee for the term of this Agreement. The loaned copy of the MOD Manual and other specifications, standard and operating procedures furnished by BKC shall be written in English, and any translation to another language shall be at the Franchisee's responsibility and cost. + + 9 + +Franchisee shall translate the MOD Manual into the native language of the employees at the Franchised Restaurant upon request by BKC. The delivery of a copy of the MOD Manual, including all revisions and updates thereto, by BKC to the Franchisee satisfies and fulfills any obligation BKC may be deemed to have to provide the Franchisee with use of the Burger King System or expertise regarding he Burger King System. + + (b) A representative of BKC who shall make not less than two (2) one day visits to Poland per annum to provide the Franchisee with any requested reasonable operations or marketing guidance and advice. Franchisee shall have the option to participate, at its sole cost and expense, in any additional training pro grams offered by BKC to other franchisees generally. Such training programs shall be at locations designated by BKC. + + (c) Communication of new developments, techniques and improvements of BKC which BKC deems in its sole discretion to be relevant to the operation of the Franchised Restaurant and which BKC may otherwise make available to all other franchisees in Europe. + + 6.2 SERVICES NOT PROVIDED BY BKC. The Franchisee acknowledges and agrees that compliance by BKC with its obligations under Section 6.1 above shall satisfy all obligations of BKC to provide operational, marketing, and other support to the Franchisee, and that any other support provided by BKC shall be at BKC's sole discretion. The Franchisee further acknowledges and agrees that BKC shall have no obligation with regard to the establishment, development and for maintenance of consumer awareness or recognition of the Burger King Marks, Restaurants or System. + + 6.3 OPTIONAL SERVICES. BKC may, but shall under no circumstances be required to, offer the following services and/or assistance to Franchisee, in BKC's sole discretion: + + (a) If requested by Franchisee, BKC may, at its sole and absolute discretion, provide Franchisee with a pre-opening training program at Franchisee's sole cost and expense at whatever location BKC may designate in its sole discretion. + + + + + + (b) If requested by Franchisee, BKC may, in its sole and absolute discretion, provide Franchisee with pre-opening and opening supervision and assistance by personnel of BKC, its designee or an Affiliate of BKC at Franchisee's sole cost and expense at whatever location BKC may designate in its sole discretion. + +7. LOCATION. + + 7.1 EXCLUSIVE PURPOSE. During the term of this Agreement the Location shall be used exclusively for the purpose of operating a Burger King Restaurant. + + 10 + + 7.2 DAMAGE TO FRANCHISED RESTAURANT. In the event of the building being damaged or destroyed by fire or any other peril, or required to be repaired or altered by any competent authority, the Franchisee shall at its own expense repair or reconstruct the building within a reasonable time to reflect the then Current Image of Burger King Restaurants, having first submitted to BKC all plans and specifications related thereto for prior approval. Where the Franchised Restaurant is insured by a person other than the Franchisee, the Franchisee's obligations shall be limited to taking such steps as are reasonably available to the Franchisee to assure that any insurance moneys ar paid out in accordance with this subparagraph. Notwithstanding the foregoing, if (a) the building is leased, (b) the Franchisee is prohibited under the terms of the applicable lease from repairing or reconstructing the building as provided above, and (c) the Franchisee has exhausted its best efforts to convince the landlord to consent to such repair or reconstruction, then the Franchisee shall be released from its obligations under this Paragraph 7.2 and this Agreement shall terminate. + +8. TRAINING AND STAFFING. + + 8.1 PRE-OPENING TRAINING. Before the Franchised Restaurant opens, the Director of Operations and such members of the Franchisee's staff charged with the responsibility for the day to day operation of the Franchised Restaurant as BKC may determine must have successfully completed BKC's training program at such location in the U.S. or elsewhere as may be designated by BKC. Such members of t e Franchisee's restaurant staff as BKC may determine shall undertake and complete continuing raining programs from time to time as may be directed by BKC in order to implement current operational standards. There shall be no charge for participation in the training programs, but the Franchisee shall be responsible for all travel and living expenses, all compensation of the Franchisee's employee while enrolled in the training program, and any other personal expenses incurred. + + 8.2 NEW DIRECTOR OF OPERATIONS. Any new Director of Operations as BKC may approve shall successfully complete the above program before taking up such position. + + 8.3 TRAINING PROGRAM. The Franchisee shall implement a training program for Franchised Restaurant employees in accordance with training standards and procedures prescribed by BKC and shall staff the Franchised Restaurant at all times with a sufficient number of trained employees including the minimum number of managers required by BKC who have completed BKC's training program at an accredited location. + +9. ROYALTY AND ADVERTISING CONTRIBUTION. + + 9.1 ROYALTY. + + 9.1.1 PAYMENT OF ROYALTY. Except as otherwise provided in Section 5 3 of the Development Agreement, by the fifteenth (15th) day of each month, the + + 11 + +Franchisee shall deliver to BKC a return of Gross Sales for the preceding month and pay to BKC or its designee a royalty for the use of the Burger King Marks an the Burger King System calculated by applying the percentage set forth in SCHEDULE 1 against the Gross Sales for the preceding calendar month. All royalties shall be paid by the Franchisee to BKC or its designee in United States currency into such bank account in the United States of America or elsewhere as BKC shall designate by prior written notice to the Franchisee. Such payments shall be made by such method as BKC may from time to time stipulate including direct debit, in accordance with applicable law. Each conversion from local currency to United States currency shall be at the maximum selling rate of exchange quoted by Citibank, N.A. in New York, New York, U.S.A., or at the + + + + + +maximum selling rate of a nationally recognized bank in the country where the Franchised Restaurant is located, at the sole discretion of BKC, as of the last bank trading day of the month on which the royalty payment is based. The Franchisee will, at its expense, make all necessary and appropriate applications to such governmental authorities as may be requested by BKC or as may be required for transmittal and payment of United States currency to BKC. + + 9.1.2 INABILITY TO REMIT ROYALTY. In the event that the Franchisee shall at any time be prohibited from making any payment in the United States and in United States currency, the Franchisee shall immediately notify BKC of this fact and such payment shall thereupon be made at such place and in such currency as may be selected by BKC and acceptable to the appropriate governmental authorities of the country in which the Franchised Restaurant is located, all in accordance with remittance instructions furnished by BKC. If, having pursued every reasonable endeavor, the parties are thereafter unable to secure any method of payment to BKC as required in Subparagraph 9.1.1 above, then BKC may, in its sole discretion, either (a) accept subsequent payments in a manner and currency acceptable to BKC in its sole discretion, or (b) by one-hundred eighty (180) days prior written notice to the Franchisee, immediately terminate this Agreement without any claim being mad by either party against the other in respect to such termination. The acceptance by BKC of; ny payment pursuant to Subparagraph 9.1.2(a) above shall not excuse the Franchisee from its obligation to pay all subsequent payments as required under Subparagraph 9.1.1 and BKC remain free to exercise its right under Subparagraph 9.1.2(b) as each monthly royalty payment comes due. + + 9.2 ADVERTISING AND SALES PROMOTION. + + 9.2.1 FRANCHISEE'S ADMINISTRATION OF AD FUND. Pursuant to the terms of the Ad Fund Agreement dated March 14, 1997 between the Franchisee and BKC, the Franchisee shall expend monthly, in the country where the Franchised Restaurant is located, monies for advertising, sales promotion and public relation services for he benefit of Burger King Restaurants in the country where the Franchised Restaurant is locate, including creative, production, media and clearance costs of advertising and sales promotion materials, and marketing + + 12 + +research expenses directly related to the development and evaluation of the effectiveness of advertising and sales promotion. (SUBJECT TO A PENDING REQUEST FOR CONFIDENTIAL TREATMENT) + + 9.2.2 BKC'S RIGHT TO ADMINISTER FUNDS. Notwithstanding the language in Subparagraph 9.2.1 above, BKC and the Franchisee agrees that, in the event BKC develops company-owned Burger King Restaurants directly or through a subsidiary or joint venture in the country where the Franchised Restaurant is located or franchises Burger King Restaurants in the country where the Franchised Restaurant is located to someone other than the Franchisee, BKC shall have the right to terminate the Ad Fund Agreement pursuant to its terms and require that the Franchisee pay to BKC or its designee by the fifteenth (15th') day of each month, in the currency of the country where the Franchised Restaurant is located an amount equal to the amount calculated by applying the advertising percentage stated in SCHEDULE 1 to the Gross Sales for the preceding calendar month. Any monies received by BKC under this Subparagraph shall be administered by BKC as provided in Subparagraph 9.2.3 below. In the event BKC requires and the Franchisee makes these payments, the direct expenditure obligation of Subparagraph 9.2.1 above will be deemed fully satisfied. + + 9.2.3 ADMINISTRATION. Any amounts received by BKC pursuant to Subparagraph 9.2.2 above, less administrative expenses and any applicable taxes, will be combined with payments from other Burger King Restaurants to form an ad fund which will be used for (a) market research expenditures directly related to the development and evaluation of the effectiveness of advertising and sales promotions, (b) creative, production and other costs incurred in connection with the development of advertising sales promotions and public relations, both in the market area of the Franchised Restaurant as reasonably defined from time to time by BKC, and on a national basis and (c) various methods of delivering the advertising or promotional message, including without limitation, television, radio, outdoor and print. The allocation of the Advertising Contribution between international, national, regional, and local expenditures shall be made by BKC in its sole business judgment. All general and administrative expenses and overhead associated with the ad fund, including salaries of relevant BKC employees, shall be paid out of the assets of the ad fund. The Franchisee is encouraged to participate in the planning of advertising, sales promotions and public relations for the Franchised Restaurant, but all expenditures for such matters shall be the sole discretion of BKC. In addition to the percentage of Gross Sales, the Franchisee agrees to transfer to BKC or its designee for inclusion in the market fund all advertising or promotional allowances given by suppliers of products which are sold in the Franchised Restaurant uncle a brand name. Such payment to be made to BKC or its designee by the fifteenth (15th) day of the month following receipt of the said allowance. The market fund will be run by BKC directly or by delegation to its designee. + + + + + + 13 + + 9.2.4 COMPLIANCE WITH LAWS AND POLICIES. The Franchisee agrees to adhere to all applicable statutory regulations and to KC's advertising, sales promotion and public relations standards and all advertisements and other material published, circulated or exhibited shall first be approved by BKC. The Franchisee agree immediately to remove or discontinue the use of any objectionable advertising material upon receiving notice from BKC. + + 9.3 GROSS SALES. The term "Gross Sales" as used in this Agreement includes all sums charged for goods, merchandise, or services sold at or from the Location. The sale of Burger King products away from the Location is not authorized; however, should any such sales be approved in the future, they will be included within the definition of Gross Sales. Gross Sales shall not include any value added tax, turnover tax, or any similar tax collected by the Franchisee from customers based upon sales. + + 9.4 INTEREST AND ATTORNEY'S FEES. The Franchisee shall pay to BKC interest (in U.S. dollars in the United States) upon any sum overdue under this Agreement, calculated at three (3) percent per annum above the prime rate of merest charged by Citibank, N.A., against the overdue sum expressed in U.S. dollars. By way of exception, any overdue sum required to be paid in a currency other than U.S. dollars shall bear merest at three (3) percent per annum above the base lending rate of any nationally recognized bank within the relevant country designated by BKC. Nothing in this paragraph is meant to require the Franchisee to pay interest at a rate greater than that allowed by applicable law and, in the event that this paragraph would have such an effect, the Franchisee shall only be required to pay interest at the maximum rate allowable by law. If an excess amount is inadvertently collected, it shall be applied to reduce the amounts due under Subparagraph 9.1.1 above. The Franchisee shall pay all costs, including reasonable attorney's fees, incurred by BKC in enforcing the tern s of this Agreement. + +10. ACCOUNTING PROCEDURES; RIGHT OF AUDIT. + + 10.1 ACCOUNTING. The Franchisee agrees to keep complete records of the business and shall furnish BKC with monthly and fiscal year-to-date profit and loss statements for the Franchised Restaurant in the format prescribed by BKC. The Franchisee shall also submit to BKC quarterly balance sheets for the Franchisee itself and not merely of the Franchised Restaurant, the first of which shall be for the period ending forty-five (45) days after the expiration of the first calendar quarter after the Franchised Restaurant opens. All profit and loss statements and balance sheets shall be submitted to BKC within fifty-five (45) days after the end of the period covered by the report in a form acceptable to BKC. In addition, the Franchisee shall submit to BKC copies of tax returns relating to the Franchisee's sales at the Franchised Restaurant at the same time the returns are filed, and such other records as BKC may reasonably request from time to time. + + 14 + + 10.2 ANNUAL FINANCIAL STATEMENT. Within ninety (90) days after the close of each fiscal year and at any time on request, the Franchisee shall submit a full disclosure of all shareholders in the Franchisee, and of all persons with an interest in the Franchised Restaurant. ln addition, the Franchisee shall furnish an annual financial statement for the Franchisee and not merely the Franchised Restaurant, which statement shall be certified by a Certified Public Accountant or equivalent. + + 10.3 AUDITS. The Franchisee agrees that BKC or its representatives, at BKC's expense shall, at all reasonable times, have the right to examine or audit the books and accounts of the Franchisee. The Franchisee shall retain sales records for a period of at least twenty-four (24) months. In the event the reported Gross Sales are less than the actual Gross Sales, the Franchisee shall make an additional payment to BKC in the amount of the discrepancy. In the event that the discrepancy exceeds two percent (2%), th Franchisee shall also reimburse BKC for all costs of the audit including travel, lodging and wages. + + 10.4 RELEASE OF FINANCIAL INFORMATION. BKC is authorized to release financial and operational information on the Franchised Restaurant as part of any disclosure of information on the Burger King System in the country where the Franchised Restaurant is located or on the Burger King System as a whole. Except as required by law or regulation, BKC shall not specifically identify the Franchised Restaurant to which this information relates. + + 10.5 POLLING. + + 10.5.1 POS SYSTEMS. The Franchisee shall at all times operate at the Franchised Restaurant POS systems previously approved by BKC as meeting its performance standards and other criteria including compatibility with BKC's + + + + + +polling standards, provided that such POS system operates in accordance with applicable law. BKC shall have the right to call upon the Franchisee to upgrade the POS systems as BKC may deem necessary or desirable in the interest of proper administration of restaurants operating under the Burger King System, and the Franchisee shall comply with such requirement within such reasonable time as may be specified by BKC. Such authorized POS systems shall at all times be used to record and process such information as BKC may from time to time require, and such information shall be maintained in such format and kept available for access by BKC on such POS system for such minimum period as BKC may require. The Franchisee she effect the polling operation at such time or times as may be required by BKC, but BKC may itself initiate polling whenever it deems appropriate. BKC shall have no obligation to provide Franchisee with information, consultation or advice concerning POS systems or accounting or other financial systems for the operation of Franchisee's business. + + 10.5.2 AUTHORIZED POLLING. The Franchisee shall permit BKC or its duly authorized agents at all times and from time to time to poll any + + 15 + +information contained in such POS system. For the purposes of this Agreement the term "poll" or "polling" means any process acceptable to BKC by which information o data may be transmitted from a POS system operated by the Franchisee or its agents into a computer or system operated by BKC, it agents or Affiliates. If for any reason polling is not practicable, BKC may require the Franchisee to download such information into machine readable form compatible with the system operated by BKC, its agents or Affiliates and to derive such information to BKC by such method and within such timescale as BKC may reasonably determine. + + 10.5.3 OTHER INFORMATION. The Franchisee shall if requested and as long as polling is not possible provide to BKC such information as BKC may from time to time require regarding product volumes and production. + +11. LIMITATIONS OF FRANCHISE. + + 11.1 TRADEMARKS, TRADE NAMES, SERVICE MARKS AND TRADE SECRETS. + + 11.1.1 REGISTRATION ASSISTANCE BY FRANCHISEE. The Franchisee shall, upon request and at no expense to the Franchisee assist BKC in perfecting and obtaining registration of unregistered Burger King Marks. + + 11.1.2 OWNERSHIP. The Franchisee acknowledges that ownership of all right, title and interest to the Burger King System and the Burger King Marks (registered and unregistered) is and shall remain vested solely in BKC. The Franchisee acknowledges the uniqueness of the Burger King System an that the Franchisee has had no part in its creation or development, no prior knowledge of, and no proprietary or other rights or claims in or to any element of the Burger King System or the Burger King Marks. + + 11.1.3 CONFIDENTIALITY OF TRADE SECRETS. The Franchisee agrees that all materials made available to the Franchise and all disclosures made to the Franchisee, and not to the general public, by or at the direction of BKC at any time before or during the term of this Agreement, including the MOD Manual in its entirety and any translations thereof, are to be considered trade secrets of BKC for purpose of this Agreement and shall be kept confidential and used by the Franchisee only in the operation of the Franchised Restaurant and other licensed Burger King Restaurants. The Franchise agrees not to divulge any of the trade secrets to any person other than the Franchisee's employees and then only to the extent necessary for the operation of the Franchised Restaurant, an d not to permit anyone to reproduce, copy or exhibit any portion of the MOD Manual or any other confidential or proprietary information received from BKC, except for translating from English to the language of the country in which the Franchised Restaurant is located, if the Franchisee's employees cannot read and understand English. + + 16 + + 11.1.4 REGISTERED USER AGREEMENTS. The Franchisee shall, whenever requested by BKC, enter into one or more Registered User Agreements authorizing and permitting the use of the Burger King Marks as provided in this Agreement and to execute any documents and/or do such things as are requested to assist BKC in connection with registration of any Registered User Agreement. Nothing in any Registered User Agreement shall be construed as giving the Franchisee the right to transfer or sublicense the Franchisee's right to use the Burger King Marks. + + + + + + 11.1.5 NO IMPAIRMENT OF MARKS. The Franchisee will not directly or indirectly, at any time during the term of this Agreement or thereafter, do or cause to be done any act or thing disputing, attacking or in any way impairing the validity of and BKC's right, title or interest in the Burger King Marks and the Burger King System. + + 11.1.6 ASSIGNMENT OF RIGHTS IN MARKS. The Franchisee hereby assigns to BKC such rights (if any) as the Franchisee may hereafter acquire in any of the Burger King Marks or the Burger King System and shall execute such documents and do such acts at the cost of BKC as may be necessary to perfect such assignment. + + 11.1.7 INFRINGEMENT, ETC. The Franchisee shall immediately notify BKC of all infringements or imitations of the Burger King Marks which come to the Franchisee's attention, and all challenges to the Franchisee's use c f any of the Burger King Marks. BKC will take such action as it in its sole discretion deems appropriate to prevent unauthorized persons from using the Burger King Marks. The Franchisee agrees to cooperate in the prosecution of any action to prevent the infringement, imitation, illegal se or misuse of the Burger King Marks or the Burger King System and agrees to be named as a party in any such action if so requested by BKC. BKC agrees to bear the legal expenses and costs incidental to the Franchisee's participation in such action except for the cost and expenses of the Franchisee's personal legal counsel if the Franchisee elects to be represented by counsel of the Franchisee's own choosing. The Franchisee shall not institute any legal action or other kind of proceeding based upon Burger King Marks or the Burger King System without the prior written approval of BKC. + + 11.1.8 REGISTERED MARKS. BKC represents that the marks listed on Exhibit A are registered or applied for, but makes no expressed or implied warranty with respect to the validity of any of the Burger King Marks. The Franchisee accepts that the Franchisee may conduct business utilizing some Burger King Marks which have not been registered and that registration may not be granted for the unregistered marks and that some of the Burger King Marks may be subject to use by third parties unauthorized by BKC. + + 11.1.9 FRANCHISEE NAME. In the adoption of a trade, corporate or partnership name, the Franchisee shall not use any of the Burger King Marks, any variations or abbreviations or any words confusingly similar to any of the Burger King Marks. + + 17 + + 11.1.10 REGISTRATION OF AGREEMENT. If local law requires the registration or recordation of this Agreement with any local governmental agency, administrative board or banking agency, Franchisee shall request BKC's consent to do so. If BKC grants its consent, Franchise shall effectuate such registration(s) or recordation(s) at its sole cost and expense in strict compliance with local laws as soon as possible. + + 11.2 INDEPENDENT CONTRACTOR. + + 11.2.1 NO AGENCY. The franchisee is an independent business entity and is not an agent, partner, joint venture, representative, or employee of BKC, and no express or implied fiduciary relationship exists between the parties. The Franchisee shall not attempt to bind or obligate BKC in any way nor shall the Franchisee represent that the Franchisee has any right to do so. BKC shall have no control over the terms and conditions of employment of the Franchisee's employees. + + 11.2.2 PUBLIC NOTICE OF INDEPENDENCE. In all public records and in the Franchisee's relationship with other persons, on stationery, business forms and cheques, the Franchisee shall indicate the independent ownership of the Franchised Restaurant and that the Franchisee is a licensee of BKC. The Franchisee shall exhibit on the Location in such places as may be designated by BKC, a notification that the Franchised Restaurant is operated by an independent operator under license from BKC. + +12. UNFAIR COMPETITION. The Franchisee agrees, during the term of this Agreement and thereafter, not to directly or indirectly engage in the operation of any restaurant, except as licensed by BKC, which utilizes or duplicates the Burger King System or any part thereof. + +13. INSURANCE, INDEMNIFICATION. + + 13.1 GENERAL LIABILITY INSURANCE. Franchisee agrees to carry at its expense during the Term of this Agreement Comprehensive General Liability insurance, including Products Liability and Broad Form Contractual Liability, in an amount which is at all times the local equivalent of not less than One Million U.S. Dollars (U.S. $1,000,000.00) per occurrence for bodily injury and Five Hundred Thousand U.S. Dollars (U.S. $500,000.00) per occurrence for property damage, or in such increased amounts as BKC may reasonably request from time to time during the Term of this Agreement. Each policy will name BKC, and its subsidiaries, affiliated and parent companies as an additional insured, and will provide hat the policy cannot be canceled without thirty (30) days prior + + + + + +written notice to BKC, will insure against the liability of BKC for both its and Franchisee's acts or omissions, and will insure the contractual liability of Franchisee under paragraph 13.3 Additionally, Franchisee agrees to carry, at Franchisee's expense, umbrella coverage in an amount which is at all times the equivalent of One Million U.S. Dollars (U.S. $1,000,000) over the basic + + 18 + +Comprehensive General Liability insurance per restaurant; except that if Franchisee owns more than ten (10) Burger King Restaurants, the umbrella coverage applicable to all such restaurants need not exceed an mount which is at any time in excess of the equivalent of Ten Million U.S. Dollars (U.S. $10,000,000). The insurance afforded by the policy or policies respecting liability shall not exclude claims, actions or demands brought in the United States or anywhere else outside the country in which the Franchised Restaurant is located and shall not be limited in any way by reason of any insurance which may be maintained by BKC prior to the Commencement Date, Franchisee shall furnish to BKC Certificates of Insurance reflecting that the insurance coverage is in effect pursuant to the terms of this Agreement. All policies shall be renewed, and a renewal Certificate of Insurance mailed to BKC at its main office, or at such other location as may be specified by BKC prior to the expiration date of the policies. This obligation of Franchisee to maintain insurance is separate and distinct from its obligation to indemnify BKC under the provisions of Paragraph 13.3 and shall not be affected by reason of the negligence of or a claim of negligence against BKC. + + 13.2 WORKERS COMPENSATION, ETC. Franchisee agrees to participate in any governmental Worker's Compensation Program, unemployment insurance program, hospitalization program and any other similar program which may be required by the laws of the country where the Franchised Restaurant is located. + + 13.3 INDEMNITY. Franchisee is responsible for all losses or damages and contractual liabilities to third persons arising out of or in connection with possession, ownership or operation of the Franchised Restaurant, and for all claims or demands for damages to property or for injury, illness or death of persons directly or indirectly resulting therefrom. Franchisee agrees to defend, indemnify and save BKC, and its subsidiaries, affiliated and parent companies harmless of, from and with respect to any such claims, demands, losses, obligations, costs, expenses, liabilities, debts or damages, unless they are caused by the gross negligence of BKC itself BKC's right to indemnity under this Agreement shall arise and be valid notwithstanding that joint or concurrent liability may be imposed on BKC by statute, ordinance, regulation or other law. The indemnification of BKC by Franchisee for Franchisee's own negligence, acts or omissions, shall not be limited by the amount of insurance required under Paragraph 13.1, nor upon a claim that BKC is responsible for Franchisee's act or omissions or that Franchisee was acting in the capacity of an agent of BKC. This indemnity obligation shall include, but not be limited to, claims related to the employment of Franchisee's employees. This obligation of Franchisee to indemnify and defend BKC is separate and distinct from its obligation to maintain insurance under the provisions of Paragraph 13.1. + + BKC shall notify Franchisee of any claims, and Franchisee shall be given the opportunity to assume the defense of the matter, however, BKC shall have the right to participate in the defense of any claim or action against it which is assumed by Franchisee, at BKC's own cost and expense. If Franchisee fails to assume the defense, BKC may defend the action in the manner it deems + + 19 + +appropriate, and Franchisee shall pay to BKC all costs, including attorney's fees, incurred by BKC in effecting such defense, in addition to any sum which BKC may pay by reason of any settlement or judgment against BKC. No settlement of any claim against BKC shall be made by Franchisee which is in excess of the amount of insurance referred to in Paragraph 13.1 or which would subject BKC to liability in any amount not covered by such insurance without the prior written consent of BKC. Any final judicial determination of the negligence of BKC in an amount in excess of the policy limits of insurance required under Paragraph 13.1 shall be the responsibility of BKC. + +14. TAXES. + + 14.1 PAYMENT WHEN DUE. The Franchisee shall pay when due all taxes levied or assessed by reason of the Franchisee's possession, ownership or operation of the Franchised Restaurant or items loaned to the Franchisee by BKC including any value added tax. In the event of any bona fide dispute as to the liability for a tax assessed against it, the Franchisee may contest the validity or the amount of the tax in accordance with the procedures of the taxing authority, however, the Franchisee shall not permit a tax sale or seizure against the premises or + + + + + +equipment. + + 14.2 WITHHOLDING TAXES. lt is understood and agreed by the parties that any and all tax liabilities arising out of this Agreement will be paid by the party owing such taxes. ln the event that BKC incurs withholding tax liability in the country in which the Franchised Restaurant is located as a result of the franchise fee or the royalty payments set forth above, it shall be the responsibility and obligation of the Franchisee to withhold from such franchise fee or royalty payments such withholding taxes as are required by law. The Franchisee shall provide BKC with corresponding receipts from the relevant taxing authorities to evidence such payments or amounts withheld. Taxes, such as income taxes of the Franchisee, which are based on profits from operation of the Franchised Restaurant are the sole responsibility of the Franchisee. + + 14.3 ELECTION. Where the law permits an election regarding the treatment of any supply or deemed supply under this Agreement for the purposes of any value added or other tax chargeable thereon, the Franchisee shall make or join in any such election as BKC may from time to time require. + +15. DISPOSAL. + + 15.1 TRANSFER OF LNTEREST BY FRANCHISEE. Except with the prior written consent of an authorized officer of BKC, Franchisee shall not (a) directly or indirectly sell, assign, convey, give away, mortgage, pledge, hypothecate, charge, or otherwise transfer or encumber its rights or obligations under this Agreement, or assign any of Franchisee's rights or delegate any of its duties hereunder; (b) sell, issue, offer, transfer, convey, give away, or otherwise + + 20 + +grant or deliver any additional equity interests in the Franchisee, or (c) sell, assign, transfer, convey, or give away substantially all of the assets of the Franchised Restaurant. + + 15.2 TRANSFER OF INTEREST BY PRINCIPALS. Except with the prior written consent of an authorized officer of BKC, no Principal shall directly or indirectly sell, assign, convey, give away, mortgage, pledge, hypothecate, charge, or otherwise transfer or encumber any legal or beneficial equity interest in Franchisee. + + 15.3 NOTICE OF PROPOSED TRANSFER. Any proposed transferor shall notify BKC in writing of any proposed transfer of an interest referred to in Paragraph 15.1 or 15.2, as applicable, before the proposed transfer is to take place, and shall provide such information and documentation relating to the proposed transfer as BKC may reasonably require. + + 15.4 RIGHT OF FIRST REFUSAL. + + 15.4.1 NOTICE; EXERCISE OF OPTION. In the event Franchisee or the Principals wish to accept a bona fide offer from a third party to purchase all or substantially all of the assets constituting the Franchised Restaurant or of the majority of the voting stock of the Franchisee, the proposed transferor(s) shall give BKC written notice setting forth the name and address of the prospective purchaser, the price and terms of the offer together with a franchisee application completed by the prospective purchaser, a copy of the Purchase and Sale Agreement, executed by both the seller and purchaser, and all exhibits, copies of any real estate purchase agreement or agreements, proposed security agreements and related promissory notes, assignment documents, and any other information that BKC may request in order to evaluate the offer. BKC or its designee shall then have the prior option to purchase the interests covered by the offer at the price and upon the same terms of the offer. If the consideration is not money, the purchase price shall be the cash equivalent of the fair market value of the consideration. BKC shall have twenty (20) business days after receipt of the notice of offer and the furnishing of all reasonably requested information within which to notify Franchisee or the owners, as applicable, of BKC's intent to exercise its right hereunder. Silence on the part of BKC shall constitute rejection. If BKC rejects the offer, Franchisee shall have 90 days to sell the Franchised Restaurant upon the terms offered to BKC, subject to the approval of BKC a s required below. If the proposed sale includes assets of Franchisee not related to the operation of franchised Burger King Restaurants, BKC may, at its option, elect to purchase only the assets related to the operation of franchised Burger King Restaurants and an equitable purchase price shall be allocated to each asset included in the proposed sale. A bona fide offer from a third party includes any transfer, conveyance, assignment, consolidation, merger or any other transaction in which legal or beneficial ownership of the franchise granted by this Agreement is vested in other than the Franchisee. + + 21 + + + + + + 15.4.2 NO WAIVER. The election by BKC not to exercise its right of first refusal as to any offer shall not affect its right of first refusal as to any subsequent offer. + + 15.4.3 UNAUTHORIZED TRANSFER VOID. Any sale, attempted sale, assignment, or other transfer of the interests described in Subparagraph 15.4.1 without first giving BKC the right of first refusal described above shall be void and of no force and effect, and shall constitute an Event of Default under Paragraph 17.1(k). + + 15.4.4 SALE; BKC CONSENT. If BKC does not exercise its option under Subparagraph 15.4.1, Franchisee may conclude the sale to the purchaser who made the offer provided BKC's consent to the assignment or sale be first obtained as provided below. + + 15.5 BKC CONSENT TO TRANSACTION. BKC may impose reasonable conditions on its consent to the transfers contemplated in Subparagraphs 15.1 and 15.2 above. BKC is under no obligation to consent to the encumbrances contemplated in Subparagraphs 15.1 and 15.2 above, and may deny its consent to such encumbrances in its sole discretion. + + 15.5.1 TRANSFER OF SUBSTANTIALLY ALL ASSETS OR TRANSFER OF STOCK BY PRINCIPAL. Reasonable conditions in connection with (i) a transfer of the Franchisee's rights under this Agreement, the transfer of substantially all of the Franchisee's assets, or the delivery or grant of any additional equity securities, all pursuant to Subparagraph 15.1 above, or (ii) the transfer of the shares of the Franchisee pursuant to Subparagraph 15.2 above, shall include, without limitation, each of the following: + + (a) All of the Franchisee's accrued monetary obligations to BKC and its Affiliates must be paid at the time of the transfer; + + (b) The Franchisee must not be in default under this Agreement or any other agreement with BKC or its Affiliates at the time of transfer; + + (c) The transferee (and, if applicable, all owners of the transferee), must complete BKC's then current franchisee application procedures and meet all of BKC's then current criteria for approval as a BKC franchisee, including financial, character, managerial, credit, operational, and legal standards; + + (d) The transferee (and, if applicable, all owners of the transferee) must at BKC's option enter into (i) a written agreement, in a form acceptable to BKC, assuming (or guaranteeing) full performance of all obligations of the Franchisee under this Agreement, (ii) a substitute Franchise Agreement, for a term ending on the expiration date of this Agreement, in BKC's + + 22 + +then current form, except that royalty and advertising contribution or expenditure rates shall be the same as are provided for in this Agreement, and (iii) such ancillary agreements as BKC may require; + + (e) The Franchisee (and, if applicable, each owner of the Franchisee) must execute a general release, in a form acceptable to BKC, of any and all claims against BKC, its Affiliates, and their respective officers, directors, agents, and employees; + + (f) The transferee, its Director of Operations, and its Restaurant Manager must complete, at the transferee's expense, any applicable orientation and training programs required by BKC at the time of transfer; + + (g) BKC shall approve the terms and conditions of the sale which affect the sufficiency of cash flow from the business after payment of debt service necessary for reinvestment in the business for refurnishing, maintaining, and remodeling the Location; + + (h) The transferor must pay the transfer fee set forth on SCHEDULE 1 in consideration of BKC's expenses in reviewing the proposed transfer; + + (i) The transferee must meet with representatives of BKC in Miami, Dade County, Florida, U.S.A., or such other location as may be designated by BKC; + + (j) The Franchisee shall execute all documents necessary to cancel the entries of the Franchisee as a registered user and shall cooperate with BKC in effecting the cancellation of entries with the relevant registry of the Franchisee as a registered user. + + (k) The transferee shall, if BKC requests, enter into one or more registered user agreements authorizing and permitting the use of the + + + + + +Burger King Marks referred to in the agreements. + + (l) The transferor shall be jointly and severally liable with the transferee (and, if applicable, each owner of the transferee) to BKC for future royalty and advertising payments due under this Agreement if and so long as any part of the purchase money consideration remains owing from the transferee to the transferor. + + 15.5.2 SECURITIES OFFERINGS. Franchisee represents and agrees that: + + 15.5.2.1 COMPLIANCE WITH BKC REQUIREMENTS. In connection with any future offerings of debt or equity securities, Franchisee will comply with all of BKC's then current requirements with respect to such offerings. Without limiting the foregoing, in addition to BKC's then-current requirements + + 23 + +applicable to BKC's franchisees and their principals (or owners) generally, the requirements applicable to Franchisee will include the following: immediate written notice to BKC of any proposed securities offering (which notice in any event shall be no later than the time when a proposed letter of intent, memorandum of understanding or similar document is exchanged with any person respecting the underwriting or placement of securities of the Franchisee); submission, before or simultaneously with submission to the U.S. Securities and Exchange Commission ("SEC"), (or similar governmental agency of any other jurisdiction in which securities are offered), of registration statements and/or prospectuses to BKC for review in connection with trademark usage, inclusion of disclaimers, and otherwise; the execution by the principals and by underwriters, if any, of certificates required by BKC, and the execution of the Franchisees and the Principals of an indemnity of BKC, its affiliates, agents, attorneys and employees against any liability arising from or in connection with the offering. Within ten (10) business days after BKC's receipt of a copy of a registration statement filed with the SEC and which BKC wishes to review, BKC shall furnish the Franchisee with its comments, if any, on the prospectus, provided that failure of BKC to comment shall not relieve the Franchisee of its obligations to include in every prospectus such disclaimers as are required by BKC. BKC's then-current general requirements for offerings of equity securities shall also apply to offerings of debt securities by the Franchisee unless and until separate requirements are articulated by BKC for debt and equity securities offerings. + + 15.5.2.2 SUBMISSION TO BKC. Franchisee shall simultaneously file with BKC all reports and other documents that Franchisee may be required to file with the SEC pursuant to the Securities Exchange Act of 1934 and the rules and regulations promulgated thereunder, or with, any governmental agency pursuant to the laws and regulations of any other jurisdiction in which securities are offered, as and when due. + + 15.5.2.3 REGISTRATION RIGHTS: SECONDARY OFFERINGS. Franchisee agrees that it will not grant additional registration rights or modify any registration rights previously granted without prior written notice to BKC. The Franchisee further agrees that if it is required to effect a registration pursuant to any registration rights previously granted, then, in connection with any secondary offering of securities pursuant to such registration, it shall comply with BKC's then-current requirements, policies and procedures in connection with such offering and, without limiting the foregoing, shall indemnify BKC from liability arising from or in connection with the Offering, in the same manner as would be required in connection with an offering of securities by the Franchisee. + + 15.5.2.4 BKC EXPENSES. The Franchisee must, in connection with any proposed offering of securities requiring the review or consent of BKC, agree to pay BKC for certain of BKC's internal and external costs in connection with its review of the proposed securities offering. + + 24 + + 15.5.3 CERTAIN EXCEPTIONS. Notwithstanding any other provision of this agreement, the Franchisee shall not be required to submit to BKC for its review and comment any "S-3" or "S-8" filing by the Franchisee with the SEC, and the Franchisee shall not be required to obtain the prior written consent of BKC in connection with an issuance of securities pursuant to an S-8 filing with the SEC so long as the securities issued pursuant to such filing represent, per offering: (i) through December 31, 1998, less than three (3%) percent of the + + + + + +securities of that class issued and outstanding, and (ii) after December 31, 1998, less than one percent (1%) of the securities of that class issued and outstanding. + + 15.6 NO WAIVER. BKC's consent to a transfer shall not constitute a waiver of any claims it may have against the transferring party, nor shall it be deemed a waiver of BKC's right to demand exact compliance with any of the terms of this Agreement by the transferor or transferee. + + 15.7 DEATH OR MENTAL INCAPACITY OF PRINCIPAL. If the Principal is a natural person, upon the death or mental incapacity of a Principal, the executor, administrator, or personal representative of such Principal shall transfer the Principal's interest in Franchisee to a third party approved by BKC within a reasonable time after the Principal's death or mental incapacity. Transfers by devise or inheritance shall not be subject to BKC's right of first refusal under Paragraph 15.4 above, but shall be subject to the same conditions imposed on any INTER VIVOS transfer under Paragraph 15.5 above. All other transfers shall be subject to BKC's right of first refusal under Paragraph 15.4 above, or if such right is not exercised, the same conditions as may be imposed on any INTER VIVOS transfer under Paragraph 15.5 above. In the case of transfer by devise or inheritance, if the heir is not approved or there is no heir, the executor shall use best efforts to transfer the Principal's interest to another party approved by BKC within twelve (12) months from the date of the Principal's death. If the conveyance of the Principal's interest to a party acceptable to BKC has not taken place within the twelve (12) month period, BKC shall have the option, to purchase the Principal's interest at fair market value. + + 15.8 CORPORATE DOCUMENTS. The articles of incorporation, the bylaws and each stock certificate of the Franchisee must at all times provide that the issuance and transfer of shares in the Franchisee are restricted as provided above and may be done only in accordance with the terms and conditions of this Agreement. + + 15.9 ASSIGNMENT BY BKC. BKC may assign this Agreement to any person or company which acquires its Burger King business in the territory in which the Franchised Restaurant is located or a substantial part thereof, whether by outright acquisition or by way of a master franchise agreement. + + 25 + +16. THE PRINCIPALS. + + 16.1 STOCK OWNERSHIP. The Principals represent and warrant to BKC that SCHEDULE 2 contains a complete list of their respective shareholdings in the Franchisee on the date of this Agreement and that, unless otherwise stated, the Principals are the beneficial owners of their respective shares. + + 16.2 COMPLIANCE BY PRINCIPALS. Each Principal shall comply with the covenants, terms, conditions and acknowledgments contained in the following sections as if it were the party named therein in place of the Franchisee: Section 11 (Limitations of Franchise); Section 12 (Unfair Competition); Section 15 (Disposal); and Section 18 (Restrictive Covenant). + + Notwithstanding any other provision of this Agreement, including without Imitation Sections 15.1 and 15.5, so long as international Fast Food Corporation, ("IFFC") is a Principal of the Franchisee, BKC will not unreasonably withhold its consent to the sale or issuance of additional equity securities in IFFC provided that IFFC has complied with all reasonable conditions then established by BKC in connection with the proposed sale or issuance of equity securities by IFFC. + + 16.3 GUARANTY. Each Principal hereby agrees to jointly, severally, and unconditionally guaranty the payment and performance of all debts, obligations and liabilities of the Franchisee to BKC arising pursuant to this Agreement, or any other agreement with BKC relating directly or indirectly to the Franchised Restaurant (the "BKC Agreements"), together with all costs of collection, compromise or enforcement, including reasonable attorneys' fees, incurred with respect to any such debts, obligations or liabilities or with respect to this or any other guaranty thereof or any bankruptcy proceeding or other similar action affecting the rights of the Franchisee's creditors generally (all of the foregoing being referred to collectively as the "Obligations"). This guaranty by the Principals shall continue in full force and effect until the Franchisee has fully paid and performed all of the Obligations. In connection with the guaranties set forth above (collectively, the "Guaranties"), each of the parties to this Agreement hereby agrees as follows: + + (a) The Guaranties shall not be impaired by any modification, supplement, extension or amendment of the BKC Agreements or any of the Obligations, nor by any modification, release or other alteration of any of the Obligations hereby guaranteed, nor by any agreements or arrangements whatever with the Franchisee or any one else; + + (b) The liability of each Principal is primary, direct and unconditional and may be enforced without requiring BKC first to resort to any other right, remedy or security; + + + + + + 26 + + (c) No Principal shall have any right of subrogation, repayment, reimbursement or indemnity whatsoever, unless and until the Obligations are paid or performed in full and all debts owed by the Franchisee to any Principal are hereby subordinated to the Obligations; + + (d) If any Principal should at any time die, become incapacitated, become insolvent or make a composition, trust mortgage or general assignment for the benefit of creditors, or if a bankruptcy proceeding or any action under a similar law affecting the rights of creditors generally shall be filed or commenced by, against o r in respect of any Principal, any and all obligations of that Principal shall, at BKC's option, immediately become due and payable without notice, + + (e) If any payment or transfer to BKC which has been credited against any Obligation, is voided or rescinded or required to be returned by BKC, whether or not in connection with any event or proceeding described in Section 16.3(d), the Guaranties shall continue in effect or be reinstated as though such payment, transfer or recovery had not been made; + + (f) Except as otherwise provided in this Agreement, each of the Guaranties shall be construed as an absolute, unconditional, continuing and unlimited obligation of each Principal without regard to the regularity, validity or enforceability of any of the Obligations, and without regard to whether any Obligation is limited, modified, voided, released or discharged in any proceeding under any law affecting the rights of creditors generally; + + (g) Any termination of the Guaranties shall be applicable only to Obligations accruing after the termination or having their inception after the effective date of such termination and shall not affect Obligations having their inception prior to such date; + + (h) The death or incapacity of any Principal hereunder shall not result in the termination of the Guaranties; + + (i) Any and all present and future debts and obligations of the Franchisee to any Principal hereunder are hereby waived an id postponed in favor of and subordinated to the full payment and performance of the Obligations; and + + (j) Each Principal waives to the greatest extent permitted by law: notice of acceptance hereof; presentment and protest of any instrument, and notice thereof; notice of default; notice of foreclosure; notice of any modification, release or other alteration of any of the Obligations or of any security therefor and all other notices to which any Principal might otherwise be entitled. + + 27 + +17. DEFAULT AND EFFECTS OF TERMINATION. + + 17.1.1 EVENTS OF DEFAULT BY FRANCHISEE. Franchisee shall be in default under this Agreement upon the occurrence of any of the following events or conditions (individually, an "Event of Default" and collectively, the "Events of Default"): + + (a) If the Franchisee fails to pay when due any amount owed to BKC under this Agreement, and does not cure such failure within ten (10) days of delivery of written notice of such failure. + + (b) If the Franchisee fails to operate the Franchised Restaurant in full compliance with the terms of this Agreement and the MOD Manual (including without limitation the provisions regarding product specifications, cleanliness, health, sanitation and the use of the Burger King Marks), and does not cure such failure wh thin ten (10) days of delivery of written notice of such failure. + + (c) If the Franchisee fails to maintain the Franchised Restaurant in conformance with the Current Image as required by Sections 5.3.1 and 5.3.2 hereof, or to remodel, improve and alter the Franchised Restaurant as required in Section 5.3.3 hereof, and does not cure such failure within ninety (90) days of delivery of written notice of such failure. + + (d) If the Franchisee challenges the validity or ownership of + + + + + +the Burger King Marks or BKC's ownership rights to the Burger King System. + + (e) If the Franchisee fails to continuously operate the Franchised Restaurant as required by Section 2.4 of this Agreement. + + (f) If the Franchisee fails to continuously occupy the Location throughout the term of this Agreement, unless such failure is attributable to a proper exercise of governmental authority. + + (g) If the Franchisee should at any time become insolvent or make a composition, trust mortgage or general assignment for the benefit of creditors, or if a bankruptcy proceeding, receivership or any action under any similar law affecting the rights of creditors generally shall be filed or commenced by, against or in respect of the Franchisee or any portion of its property. + + (h) If the Franchisee makes any materially false statement in connection with any report of Gross Sales or in any other financial statement required hereby, other than an obvious and unintentional error. + + (i) If the Franchisee commits "persistent breaches" of the terms of this Agreement (whether or not material in isolation) after written + + 28 + +notice of such breaches has been delivered by BKC, any three breaches occurring within a period of six months shall be deemed to constitute "persistent breaches." + + (j) If the Franchisee for any reason other than an improper act or breach by BKC ceases to be entitled to remain registered as a registered user of any of the Burger King Marks. + + (k) If any events occur which are contrary to Section 15 hereof. + + (l) If the Franchisee engages in activities prohibited by Section 12 (Unfair Competition) or Section 18 (Restrictive Covenant), or discloses any trade secrets of BKC in violation of Section 11 (Limitations of Franchise). + + (m) If the Franchisee or any of its affiliates is in breach of any other obligation owed to BKC or any of its Affiliates whether under this or any other agreement. + + (n) If the Franchisee has knowingly made false or misleading statements in order to obtain execution of this Agreement by BKC. + + (o) If the Franchisee or any of its officers or directors is convicted of a criminal offense punishable by a term of imprisonment in excess of two (2) years. + + (p) The Franchisee fails to perform any obligation under this Agreement which is not capable of cure. + + (q) If the Franchisee fails to perform any other obligation under this Agreement and does not cure such failure within thirty (30) days of written notice of such failure. + + (r) If any of the above occurs in relation to any Principal. + + 17.2.1 EVENT OF BKC DEFAULT. BKC shall be in default under this Agreement if BKC fails to perform any of its obligations under this Agreement and does not cure such failure within sixty (60) days of written notice of such failure (an "Event of BKC Default"). + + 17.2 TERMINATION. Upon the occurrence of an Event of Default, this Agreement shall automatically terminate without any further notice or opportunity to cure under Section 17.1.1 above and BKC shall, subject to the provisions of Subsection 17.6 below, have the right to claim lost royalties and advertising contributions, and shall also have all other rights and remedies available under applicable law. Upon the occurrence of an Event of BKC Default under Section 17.1.2., this Agreement shall automatically terminate without further notice or opportunity to cure and the Franchisee shall have all other + + 29 + +rights and remedies available under applicable law. Subject to the provisions of Section 17.6 below, the rights of the parties set forth in this Section 17.2 + + + + + +shall be in addition to any other rights the parties may have under applicable law. + + 17.3 EFFECT OF TERMINATION. Upon expiration or termination for any reason of this Agreement, the Franchisee's right to use the Burger King Marks and the Burger King System shall terminate. The Franchisee shall not thereafter identify itself as a Burger King franchisee or former Burger King franchisee or use, any of BKC's trade secrets, operating procedures, promotional materials, Burger King Marks or any marks confusingly similar. The Franchisee will immediately return to BKC the MOD Manual loaned to the Franchisee including any translations thereof, together with all other materials containing trade secrets, restaurant operating instructions or business practices of BKC. Where applicable, BKC shall be entitled to take all steps necessary for the cancellation of the entries of the Franchisee with the Registrar of Trademarks, or its equivalent authority, as a registered user without opposition or hindrance of the Franchisee. The Franchisee will, at the request and cost of BKC, cooperate in any such steps. + + 17.4 POST-TERMINATION OPTION. The Franchisee grants to BKC or its designee upon termination or expiration of this Agreement, the option to purchase all usable paper goods, containers and printed menus bearing any of the Burger King Marks or trade names at the price paid by the Franchisee and to purchase the Franchisee's restaurant equipment, furniture, fixtures and signs at fair market value. + + 17.5 POST-TERMINATION OBLIGATIONS OF FRANCHISEE. + + 17.5.1 OPTIONS TO PURCHASE LOCATION. Upon termination or expiration of this Agreement, if the parties do not enter into a successor Franchise Agreement whereby the Franchisee shall continue to be a franchisee and operate the Franchised Restaurant at the Location, BKC or its designee shall have the option subject to obtaining any necessary governmental consent: + + (a) To purchase the Location and/or any related equipment at fair market value, if the Franchisee, any of the Principals or an affiliate of the Franchisee owns the Location and/or related equipment. + + (b) If the Location is leased by the Franchisee, any of the Principals or an affiliate of the Franchisee, subject to obtaining any necessary landlord's consent, to obtain an assignment of the leasehold interest at a price equal to the fair market value of the leasehold interest. + + 17.5.2 DEIDENTIFICATION. If BKC or its designee do not exercise this option the Franchisee agrees to immediately make such removals or changes in + + 30 + +signs and the building as BKC shall request so as to effectively distinguish the Location from its former appearance and from any other Burger King Restaurant. + + 17.5.3 BKC LIEN. To secure payment of any damages in the event of termination as a result of the Franchisee's default, BKC shall have a lien, on the personal property, machinery, fixtures and equipment owned by the Franchisee at the Location at the time of such default. + + 17.5.4 ACCELERATION OF PAYMENTS. All monies owed by Franchisee to BKC shall be immediately due and payable upon term nation. + + 17.6 DISPUTE RESOLUTION. + + (a) Subject to subparagraph (b) below, all controversies, disputes or claims arising between the Franchisee, the Principals, and their respective shareholders, officers, directors, agents and employees (in their respective capacity) (collectively, the "Franchisee Parties") and BKC arising out of or related to the relationship of the parties hereto, this Agreement or any provision hereof, any related agreement (including any development agreement), the validity of this Agreement or any provision hereof or the operation of the Franchised Restaurant shall be submitted to and settled by arbitration in the City of New York in accordance with the Commercial Arbitration Rules of the American Arbitration Association ("AAA") then obtaining. Such arbitration proceedings shall be conducted before a panel of three (3) arbitrators. The Franchisee Parties shall l appoint one arbitrator, between them, BKC shall each appoint one arbitrator and the two arbitrators so appointed shall appoint a third arbitrator to act as Chair. If said two arbitrators fail to nominate the Chair within thirty (30) days from the date of appointment of the second arbitrator to be appointed, the Chair shall be appointed by the AAA. Unless otherwise provided in this Paragraph, all matters within the scope of the Federal Arbitration Act of the United States of America (9 U.S.C. ss.ss.1 et seq.) shall be governed by it. The arbitrators shall have the right to award or include in their award any relief which they deem proper in the circumstances, including with out limitation, money damages (with interest on unpaid amounts from date due), specific performance, injunctive relief, legal fees and costs, provided that the arbitrators shall not award exemplary or punitive damages. The award and decision of the arbitrators shall be conclusive and binding upon the Franchisee Parties and BKC and judgment upon the award may be entered in any court of competent jurisdiction. The Franchisee Parties and BKC further expressly agree and consent to the jurisdiction of the courts of the State of New York for the purpose of entering judgment upon any such award of the + + + + + +arbitrators. The Franchisee Parties and BKC further agree to be bound by the provisions of any applicable limitation on the period of time in which claims must be brought under applicable law or this Agreement, whichever is less. The parties further agree that in connection with any such arbitration proceeding, they shall submit or file any claim which would constitute a compulsory counterclaim (as defined by Rule 13 of the United States Federal Rules of Civil + + 31 + +Procedure) within the same proceeding as the claim to which it relates. Any such claim which is not submitted or filed as described above shall be barred. This provision shall continue in full force and effect subsequent to and notwithstanding expiration or termination of this Agreement. + + (b) Notwithstanding subparagraph (a) above, BKC shall be entitled to seek the entry of temporary or preliminary injunctions, restraining orders and orders of specific performance enforcing the provisions of this Agreement or any development agreement relating to the use of BKC's Marks or proprietary in "formation by the Franchisee or any Principal upon the termination or expiration of this Agreement or any development agreement. The Franchisee's (or the Principal's) only remedy if an injunction is so entered will be the dissolution of that injunction, if warranted, upon due hearing, all other claims being subject to arbitration under subparagraph (a) above. + +18. RESTRICTIVE COVENANT. Neither the Principals nor the Franchisee shall directly or indirectly (through stock ownership, partnership, trust, joint venture, management contract, or otherwise) (a) have any interest in another "Fast Food Hamburger Restaurant" during the term of this Agreement, or (b) for a period of one ye ar after termination or expiration of this Agreement, have any interest in another Fast Food Hamburger Restaurant business at or within such distance of the Location as is stated SCHEDULE 1. For purposes of this Section, "Fast Food Hamburger Restaurant" shall mean any restaurant which (a) has hamburgers or hamburger based products which account for 50(degree)/o or more of total menu items or total Gross Sales, and (b) does not offer table service as the principal method of ordering or food delivery + +19. MISCELLANEOUS: GENERAL CONDITION. + + 19.1 INTERPRETATION. The Introduction shall be considered a part of this Agreement. Paragraph headings are used only for convenience and do not form part of this Agreement. A covenant on the part of the Franchisee not to do something includes a covenant not to permit others to do it; any right given to BKC includes the right to do it through servants or agents or third party contractors or to do it in conjunction with its servants, agents or third party contractors and includes any necessary rights of access. To the extent of any inconsistency, this Agreement prevails over the MOD Manual. References to the parties shall include their heirs, successors in title and assigns. + + 19.2 NON-WAIVER. The failure of BKC to exercise any right or option given to it hereunder, or to insist upon strict compliance by the Franchisee or the Principals or any person comprising the Franchisee or the Principals with the terms of this Agreement, shall not constitute a waiver of any terms or conditions of this Agreement with respect to any other or subsequent breach, nor a waiver by BKC of its right at any time thereafter to require exact and strict compliance with all the terms of this Agreement. The rights or remedies set forth in this Agreement are in addition to any other rights or remedies which may be granted by law. + + 32 + + 19.3 GOVERNING LAW/JURISDICTION. This Agreement shall become valid when executed and accepted by BKC in Miami, Florida; it shall be governed and construed under and in accordance with the laws of the State of Florida; U.S.A.; provided, however, that since the Franchisee is a corporation formed under the laws of the Republic of Poland which is not doing business in the State of Florida, the Florida Franchise Act, Florida Statutes Section 817.416(1971) shall not apply to this Agreement. The parties hereto acknowledge and agree that all disputes arising in connection with this Agreement shall be finally settled pursuant to the provisions set forth in Section 17.6 of this Agreement. However, in the event that Section 17.6(b) of this Agreement applies, then the United States District Court for the Southern District of New York or, if such court lacks jurisdiction, the Supreme Court for the State of New York, County of New York, shall be the venue and exclusive forum in which to adjudicate any case or controversy arising under said Section 17.6(b), and the parties further agree that in the event of any such litigation in these courts, they will not contest or challenge the jurisdiction or venue of these courts. + + + + + + 19.4 LICENSES, PERMITS, ETC. The Franchisee shall obtain and maintain all licenses and other permits required by the law of the governing bodies where the Franchised Restaurant is located and shall comply with all local governmental requirements relating to the construction, equipping and operation of the building and the preparation and sale of items in the Franchised Restaurant. + + 19.5 COMPLIANCE WITH LAWS. Notwithstanding anything herein to the contrary, the Franchisee shall operate the Franchised Restaurant in a lawful manner and faithfully comply with the applicable laws, regulations or legitimate administrative requirements of national, regional, and municipal governing bodies or other political subdivisions in which the Franchised Restaurant is located. + + 19.6 REMEDIES. If the Franchisee breaches this Agreement, BKC shall be entitled to injunctive relief in addition to all other rights and remedies available under Section 17.2 of this Agreement. + + 19.7 SEVERABILITY. The parties agree that if any provisions of this Agreement may be construed in two ways, one of which would render the provision illegal or otherwise voidable or unenforceable, and the other of which would render the provision valid and enforceable, such provision shall have the meaning which renders it valid and enforceable. The language of all provisions of this Agreement shall be construed according to its fair meaning and not strictly against any party. It is the intent of the parties that the provisions of this Agreement be enforced to the fullest extent and should any court or other public agency determine that any provision herein is not enforceable as written in this Agreement, the provision shall be amended so that it is enforceable to the fullest extent permissible under the laws and public policies of the jurisdiction in which the enforcement is sought. The provisions of this Agreement are severable and this Agreement shall be interpreted and enforced as + + 33 + +if all completely invalid or unenforceable provisions were not contained in the Agreement, and partially valid and enforceable provisions shall be enforced to the extent that they are valid and enforceable. + + 19.8 NOTICES. + + 19.8.1 NOTICE TO BKC. All notices to BKC shall be written in English and shall be sent by facsimile and hand delivered in person or by courier or sent by registered airmail, postage fully prepaid, addressed to BKC at 17777 Old Cutler Road, Miami, Florida 33157, U.S.A., Attention: General Counsel, Facsimile number (305) 378-7230, or at such other address as BKC shall from time to time designate in writing. + + 19.8.2 NOTICE TO FRANCHISEE/PRINCIPALS. All notices to the Franchisee or the Principals shall be written in English and shall be sent by facsimile and hand delivered in person or by courier, or sent by airmail, postage fully prepaid, and shall be addressed to the Franchisee and/or the Principals at the Franchised Restaurant premises, or the Franchisee's last known mailing address if the Franchised Restaurant has ceased operations, with a copy delivered to the Principal's address (but only so long as International Fast Food Corporation is the sole Principal). + + 19.8.3 DELIVERY. Notices which are sent by mail shall be deemed delivered on the earlier of actual receipt or the tenth (10th) day after being deposited in the mail. Notices sent by hand shall be deemed delivered upon actual receipt. + + 19.9 LANGUAGE. This Agreement is in the English language only, which language shall be controlling in all respects. + + 19.10 MODIFICATION. This Agreement may only be modified or amended by a written document signed by the parties. + + 19.11 BINDING EFFECT. This Agreement shall be binding upon the parties, their heirs, executors, personal representatives, successors or assigns. + + 19.12 CURRENCY. Unless otherwise provided all payments required under this Agreement shall be made in United States currency in the U.S.A. + + 19.13 SURVIVAL. Any provisions of this Agreement which impose an obligation after termination or expiration of this Agreement shall survive the termination or expiration of this Agreement and remain binding on the parties. + + 19.14 AGENCY. BKC shall be entitled to entrust the performance of any of its obligations under this Agreement to an Affiliate, and any notice required to be given by BKC shall be validly given if given by an Affiliate. + + 34 + + + + + +20. ENTIRE AGREEMENT. This Agreement together with any formal Development or Target Reservation Agreement constitutes the entire agreement of the parties and supersedes all prior negotiations, commitments, representations, warranties, and undertaking of the parties (if any) with respect to the subject matter of this Agreement and to the Franchised Restaurant. No term or condition shall be implied into this Agreement in derogation of, or in a manner which is inconsistent with or alters, the express terms set forth in this Agreement. + +21. INDEPENDENT ADVICE. THE FRANCHISEE AND EACH PRINCIPAL ACKNOWLEDGE THAT THEY HAVE BEEN ADVISED BY BKC OR ITS AGENTS TO TAKE INDEPENDENT PROFESSIONAL ADVICE ON ALL ASPECTS OF THIS AGREEMENT AND THE BURGER KING BUSINESS AND THAT THEY HAVE TAKEN SUCH INDEPENDENT ADVICE AS THEY DEEM NECESSARY AND HAVE INDEPENDENTLY SATISFIED THEMSELVES ON ALL RELEVANT MATTERS RELATING TO THIS AGREEMENT AND THE OPERATION OF BURGER KING RESTAURANTS BEFORE ENTERING INTO THIS AGREEMENT. + + The parties have executed this Agreement as of the date indicated on page one. + + BURGER KING CORPORATION + + By: /S/ Mark Gerasi ---------------------------------- Vice President + + Attest: + + /S/ Kim A. Goodhard ---------------------------------- Assistant Secretary + + (Corporate Seal) + + INTERNATIONAL FAST FOOD POLSKA SP ZO.O (the "Franchisee") + + By: /S/ Mitchell Rubinson ---------------------------------- Name: Mitchell Rubinson -------------------------------- Position: President ---------------------------- + + 35 + + THE PRINCIPAL: + + INTERNATIONAL FAST FOOD CORPORATION + + By: /S/ Mitchell Rubinson ---------------------------------- Name: Mitchell Rubinson -------------------------------- Position: President ---------------------------- + + + + + + 36 + + SCHEDULE 1 TO FRANCHISE AGREEMENT --------------------------------- + +The Franchisee: INTERNATIONAL FAST FOOD POLSKA SP ZO.0 + +The Principals: INTERNATIONAL FAST FOOD CORPORATION + +"The Location": means all the land, and any buildings from time to time thereon, known as + + -------------------------------------- __________________________ and more particularly delineated in the plan attached to the Franchisee's real estate package as finally approved by BKC. + +Director of Operations (name): ______________________________________ + +Managing Director (name): ______________________________________ + +Initial Franchise Fee: U.S. $______________________ + +Royalty percentage: 5% ------- Advertising percentage: 6% ------- Term: __________ (____) years + +Hours of Operation: 11:00 a.m. to 11:00 p.m. daily + +Transfer payment fee: U.S. $10,000 ---------------- Radius of restrictive covenant: Two Kilometers ---------------- Governing Law: State of New York, U.S.A. -------------------------- + + 37 + + SCHEDULE 2 TO FRANCHISE AGREEMENT + +Shares of the Franchisee owned by the Principals: + +================================================================================ | Number of | Class of | % of Class of | % of Total Principal | Shares | Shares | Shares | Shares - -----------------|--------------|-----------|-----------------|----------------- International | | | | Fast Food | | | | 80% Corporation | | | | - -----------------|--------------|-----------|-----------------|----------------- | | | | + + + + + + | | | | - -----------------|--------------|-----------|-----------------|----------------- | | | | | | | | ================================================================================ + + 38 + + EXHIBIT "A" TO FRANCHISE AGREEMENT + + POLAND TRADEMARKS ----------------- + +Marks registered in Poland: + + Date of Classes Reg. No. Registration ------- -------- ------------ + +Burger King Logo 16,29,30,32,42 7441 18 Feb., 1994 + +Whopper 16,29,30,32,42 7441 18 Feb., 1994 + +Burger King Wordmark 16,29,30,42 7442 18 Feb., 1994 + + 39 \ No newline at end of file diff --git a/full_contract_txt/INTERSECTENT,INC_05_11_2020-EX-10.1-SUPPLY AGREEMENT.txt b/full_contract_txt/INTERSECTENT,INC_05_11_2020-EX-10.1-SUPPLY AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..ba0340fffeb7a3c58eb7b785c1e8058737166afd --- /dev/null +++ b/full_contract_txt/INTERSECTENT,INC_05_11_2020-EX-10.1-SUPPLY AGREEMENT.txt @@ -0,0 +1,85 @@ +Exhibit 10.1 [*] Certain confidential information contained in this document, marked by brackets, is omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed. + +SUPPLY AGREEMENT + +THIS SUPPLY AGREEMENT (this "Agreement") is made this, 20t h day of January, 2020 (the "Effective Date"), by and between HOVIONE INTER AG, together with its subsidiaries and affiliates, and organized and existing under the laws of Switzerland and having its registered office at Pilatusstrasse 23, CH-6003, Luzern, Switzerland (hereafter referred to as "HOVIONE"), and INTERSECT ENT, Inc. together with its subsidiaries and affiliates, and organized and existing under the laws of Delaware and having its registered office at 1555 Adams Drive, Menlo Park, CA 94025 (hereafter referred to as "INTERSECT"). HOVIONE and INTERSECT are each sometimes referred to herein as a "Party" and together as the "Parties." + +WHEREAS, HOVIONE has developed and manufacturers the active pharmaceutical ingredient(s) identified in Exhibit A hereto (the "API"); and + +WHEREAS, INTERSECT develops and markets Finished Product based on the API, as defined herein; and + +WHEREAS, INTERSECT desires to acquire API from HOVIONE to incorporate into the Finished Product; and + +WHEREAS, HOVIONE is willing to supply such API for INTERSECT's use, on the terms and conditions set forth in this Agreement. + +NOW THEREFORE, in consideration of the promises and the mutual covenants set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree and covenant as follows: 1. Definitions 1.1. "Active Pharmaceutical Ingredient" or "API" shall have the meaning given such term in the preamble hereof. 1.2. "Affiliate" means any entity controlling, controlled by or under common control with either Party hereto. For purpose of this definition, "control" shall mean ownership of over fifty percent (50%) of the equity capital, the outstanding voting securities or other ownership interest of an entity, or the right to receive over fifty percent (50%) of the profits or earnings of an entity. In the case of non-stock organizations, the term "control" shall mean the power to control the distribution of profits. 1.3. "Applicable Law" shall mean the laws, regulations, rules and guidelines pertaining to the development, manufacture, packaging, labeling, storage, import, export, distribution, marketing, sale and/or intended use of the API or the Finished Product. 1.4. "Batch Record" shall mean a batch manufacturing record, prepared according to applicable cGMP guidelines, for every production batch of API. 1.5. "Confidential Information" shall mean all the technical information, whether tangible or intangible, including (without limitation) any and all data, techniques, discoveries, inventions, processes, know-how, patent applications, inventor certificates, trade secrets, methods of production and other proprietary information, that either Party or its Affiliates have ownership rights to (as either owner, licensee or sub-licensee), or may hereafter obtain rights. 1 + + + + + +1.6. "Current Good Manufacturing Practices" or "cGMP" shall mean current Good Manufacturing Practice as set forth by the US FDA as well as current good manufacturing practices applicable to the API, or the making thereof at HOVIONE's manufacturing facility, set forth by the relevant Regulatory Agency. 1.7. "Defect" with respect to the API shall mean failure of the API to comply with the Product Specifications. 1.8. "FDA shall mean the US Food and Drug Administration, and any successor thereto. 1.9. "Finished Product" shall mean the finished dosage form combination drug and device product that contains the API ready for clinical use or commercial sale. 1.10. "Firm Forecast" shall have the meaning given to such term in Section 3.2 hereof. 1.11. "Product Specifications" shall have the meaning given to such term in Section 2.2 hereof. 1.12. "Quality Agreement" shall mean that certain Quality Assurance Agreement, dated of even date herewith, by and between INTERSECT and HOVIONE, which sets forth (a) the roles and responsibilities of the Parties with respect to the quality assurance for the API and (b) how the Parties' quality operations shall interact with each other in connection with the same. 1.13. "Regulatory Agency" shall mean national, or other government entities regulating or otherwise exercising authority with respect to the API or the Finished Product in the United States including, without limitation, the US FDA 1.14. "Term" shall have the meaning assigned to such term in Section 10. 2. Manufacture and Sale 2.1. Supply. During the term of this Agreement and subject to the terms and conditions set forth herein, INTERSECT shall purchase [*] of its annual API requirement, from HOVIONE and HOVIONE shall manufacture and supply API to INTERSECT (or a third party designated by INTERSECT) in such quantities as from time to time may be ordered by INTERSECT. 2.2. Product Specifications. The specifications of the API as set out in in Exhibit B to this Agreement (the "Product Specifications"); as such Exhibit may be amended according to the terms of the quality agreement between the parties. 3. Costs. HOVIONE shall be responsible for all costs and expenses related to the maintenance of a US DMF or European CEP for the API. Any additional submissions, technical work, documents, data or materials requested by INTERSECT may be chargeable by HOVIONE. 4. Price, Orders and Terms of Payment 4.1. Pricing. The price for the API shall be as set forth on Exhibit C hereto. All sums shall be expressed in and payable in US Dollars. 4.2. Forecasting. For each calendar year during the term of this Agreement, INTERSECT shall submit a twelve (12) month rolling forecast updated on a quarterly basis, broken down on a quarterly basis covering INTERSECT's anticipated requirements of API, each such forecast to be provided to HOVIONE at least ninety (90) days prior to the start of the relevant twelve (12) month period. The rolling forecast shall be for information purposes only and non- binding so long as the INTERSECT provides a blanket purchase order covering their demand for the next six (6) months. In the case that INTERSECT does not provide a blanket purchase order, the forecast will be considered binding. INTERSECT shall place all purchase orders with HOVIONE at least ninety (90) days in advance of required delivery to INTERSECT. Within five (5) days of receipt of a purchase order, HOVIONE shall notify INTERSECT in writing of its acceptance of the purchase order and confirm the delivery date. If the purchase order exceeds the Firm Forecasted amount, HOVIONE shall use commercially reasonable efforts to fill such order but shall not be in breach of this Agreement if HOVIONE does not supply the excess. 2 + + + + + +4.3. Delivery Terms. Each purchase order shall specify: (i) an identification of the API ordered; (ii) quantity requested; (iii) the requested delivery date; and (iv) shipping instructions and address. HOVIONE agrees to deliver the API DDP Menlo Park, CA USA (Incoterms 2010). 4.4. Payment Terms. HOVIONE shall invoice INTERSECT upon dispatch of the API. INTERSECT shall pay the price to HOVIONE for API within thirty (30) calendar days of the date of invoice of such API. Payments shall be made to HOVIONE by wire transfer. 4.5. Scope of Agreement. In no event shall any terms or conditions included on any purchase order, invoice or acknowledgement thereof or any other document, whether paper, electronic or otherwise, relating thereto, apply to the relationship between the Parties under this Agreement, unless such terms are expressly agreed to by the Parties in writing. If there is a conflict between the terms of any purchase order or other document and this Agreement, the terms of this agreement shall apply. The Parties further agree that no course of dealing between the Parties shall in any way modify, change or supersede the terms and conditions of this Agreement. 5. Manufacture and Delivery of API. 5.1. Manufacture. The API shall be manufactured by HOVIONE at its facilities in accordance with all relevant current Good Manufacturing Practices ("cGMPs"), the Specifications, and Applicable Laws, and pursuant to HOVIONE's Drug Master File ("DMF"), prepared by HOVIONE and filed with the US FDA. HOVIONE shall advise INTERSECT in writing in advance of making any changes to the Product Specifications or any material changes in the methods, processes or procedures in manufacturing the API that could affect the quality, purity and/or physical properties of the API, any changes will be made according to the terms of the quality agreement between the parties. HOVIONE shall provide sufficient notice of any such change to INTERSECT to allow INTERSECT to make any required notices to and obtain any required approvals from any Regulatory Agency with respect to such change. 5.2. Right of Audit. See Quality Agreement. 5.3. Certificate of Analysis; Product Release. The quality control(s) and the release(s) of API (including documentation) shall be done by HOVIONE in accordance with the Quality Agreement. HOVIONE shall provide certificates of analysis to INTERSECT for each batch of API delivered under this Agreement. API shall have at least [*] remaining on the date of delivery. 5.4. Cooperation. During the term of this Agreement, HOVIONE shall assist and cooperate in a timely manner INTERSECT in its preparation of any documents or other materials which may be required by the US FDA to validate sell and/or distribute the API to be supplied by HOVIONE under this Agreement or the Finished Product. HOVIONE shall file with the US FDA and shall maintain at all times as current, a DMF for the API. HOVIONE shall also provide INTERSECT with a referral letter permitting INTERSECT to use HOVIONE's DMF. 5.5. Required Changes. INTERSECT shall deliver to HOVIONE written notice of any required changes to the Product Specifications requested by the Regulatory Authorities, and HOVIONE shall use its commercially reasonable efforts to make such changes to the Product Specifications. If any change to Product Specifications requested by INTERSECT materially affects HOVIONE's costs of producing the API, then HOVIONE shall promptly so inform INTERSECT in writing and the Parties shall negotiate, in good faith, an adjustment to the pricing paid by INTERSECT for API under this Agreement. If the Parties cannot mutually agree, following good faith negotiations, on an equitable adjustment to pricing, then either HOVIONE or INTERSECT may terminate this Agreement for business reasons on not less than ninety (90) days prior written notice, without any further obligation to the other party; provided, however, that INTERSECT shall remain liable for all sums owed to HOVIONE for orders of API that were placed prior to the date of termination. 3 + + + + + +5.6. Inspection of API. Within thirty (30) calendar days of the arrival of each lot of API at the manufacturing facility designated by INTERSECT, INTERSECT shall inspect and test each lot of API at its own cost and expense. If, upon inspecting and testing the API, INTERSECT determines that a lot of API does not conform to the Product Specifications, then INTERSECT shall, within such thirty (30) day period, give HOVIONE written notice of such non-conformity (setting forth the details of such non-conformity):Unless HOVIONE objects, within 20 working days from the notice by INTERSECT, to the non-conformity INTERSECT will return the non-conforming API to HOVIONE. Any API rejected by INTERSECT may not be reshipped to INTERSECT except if the API is reprocessed according to the DMF. HOVIONE sole responsibility shall be to replace any non-conforming API within thirty (30) days of receiving the notice of non- conformity. Disputes between the Parties as to whether all or any part of a shipment rejected by INTERSECT materially conforms to the Product Specifications shall be resolved by a mutually acceptable third-party testing laboratory located in a neutral country. HOVIONE shall pay all the fees of the third-party laboratory, unless the third-party testing laboratory determines that the delivered API materially conforms to the Product Specifications, in which case INTERSECT shall pay all the fees of such third-party laboratory and also any additional costs that HOVIONE incurred in providing replacement material. 5.7. Regulatory Communications. During the Term, HOVIONE shall notify INTERSECT after receipt of any communication from any Regulatory Agency in connection or that can affect INTERSECT Marketing Authorization. 5.8. Liability. It is understood that HOVIONE has no control over the ultimate use of the Finished Product once it leaves INTERSECT's manufacturing facility. HOVIONE shall have no liability arising out of or in connection with the sale or use of the API or any product or material made from or incorporating the API, except to the extent that the API was not manufactured in accordance with the Product Specifications, cGMPs or Applicable Law or the liability otherwise arises from a breach of this Agreement by HOVIONE. 5.9. Recall. INTERSECT shall be responsible for conducting any recall of Finished Product, and HOVIONE shall co-operate with and give all reasonable assistance to INTERSECT in conducting any such recall to the extent it relates to the API. HOVIONE shall bear the expense of any recall resulting from a material breach of its obligations hereunder and/or of the Quality Agreement and/or from its gross negligence or willful misconduct subject to the limits set out in 8.4. Otherwise, INTERSECT shall bear such expenses. In the event of such recall or similar action, each Party shall use commercially reasonable efforts to mitigate the costs associated therewith. In the case of a disagreement as to the existence or level of nonconforming API, then the matter shall be referred to an independent third-party laboratory. The decision of the laboratory shall be final and binding on the Parties. 5.10. Retention of Documentation. All documentation related to the manufacturing of the API shall be archived with HOVIONE after manufacturing in accordance with HOVIONE's document retention policies. 5.11. Safety of API. Each Party shall immediately notify the other Party of any unusual health or environmental occurrence relating to API. Each Party shall advise the other Party immediately of any safety or toxicity problems of which it becomes aware regarding API. 6. Warranties. 6.1. HOVIONE's Warranties. HOVIONE represents and warrants to INTERSECT that: (a) It has full right and power to enter into this Agreement and perform its obligations hereunder in accordance with its terms; (b) The API and all components and ingredients thereof shall be manufactured and delivered in strict compliance with: (i) the Product Specifications; (ii) the methods processes and procedures, including the site manufacture, set forth in the DMF, together with all applicable regulatory requirements relating to the manufacture of the API 4 + + + + + +(c) the plant(s) for manufacture of the API is and shall be in compliance with all applicable cGMPs and that such plant(s) is and shall continue to be available for inspection if and when the Regulatory Authorities so requests; 6.2. INTERSECT's Warranties. INTERSECT represents and warrants to HOVIONE that: (a) It has the full right and power to enter into this Agreement and perform its obligations hereunder in accordance with its terms; and (b) That it will purchase the API in strict compliance with the terms of this agreement. as set forth under Section 2.1 and 2.1. 6.3. DISCLAIMER. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, NEITHER PARTY MAKES ANY REPRESENTATION OR EXTENDS ANY WARRANTY OF ANY KIND, EITHER EXPRESS OR IMPLIED INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR NON-INFRINGEMENT. 6.4. Mutual Warranties. Each party represents and warrants to the other party that it holds all necessary and required permits and authorizations, including, but not limited to, those required by the FDA, and shall undertake throughout the term of this Agreement to maintain the same in full force and effect. Each party further covenants that it shall use commercially reasonable efforts to obtain all such other permits and authorizations as may be reasonably required from time to time in either case to operate their respective facilities and/or businesses in order to manufacture, provide, distribute and/or sell API hereunder. 7. Confidentiality. 7.1. Confidentiality. Each party agrees to retain in confidence all Confidential Information disclosed to it pursuant to this Agreement, whether such disclosure occurred before or after the date hereof. Disclosed information shall not be deemed Confidential Information hereunder if: (a) it is now or later becomes publicly known, other than through the fault of the receiving party; (b) it is lawfully known without restriction to the receiving party at the time of disclosure as evidenced by written documentation; (c) it is rightfully obtained by the receiving party from a third party without restriction and without breach of this Agreement or any similar agreement; and/or (d) it is independently developed by the receiving party without access to the disclosing party's information, as evidenced by written documentation. If either Party is required under Applicable Law to disclose Confidential Information by any court or to any Regulatory Agency, the Party required disclosing the Confidential Information shall, prior to such disclosure, notifying the other Party of such requirement and all particulars related to such requirement. The notified Party shall have the right, at its expense, to object to such disclosure and to seek confidential treatment of any Confidential Information to be so disclosed on such terms as it shall determine, and the other Party shall fully cooperate with the notified Party in this regard. The confidentiality of disclosed Confidential Information and the obligation of confidentiality hereunder shall survive any expiration or termination of this Agreement for a period of ten years. The Parties specifically agree that all terms of this Agreement, all sales and API requirements and costs and all purchase orders shall be deemed to be confidential. 7.2. Separate Confidentiality Agreement. If the Parties entered into one or more separate confidentiality agreements or non-disclosure agreements (each, a "Confidentiality Agreement"), such Confidentiality Agreement(s) shall be and remain in full force and effect as provided therein. In the event of any conflict between the terms of this Agreement and the terms of any such Confidentiality Agreement, the terms of such Confidentiality Agreement shall control. 7.3. Public Announcements. During the term of this Agreement, no party hereto shall issue or release, directly or indirectly, any press release, marketing material or other communication to or for the media or the public that pertains to this Agreement, the API, the Finished Product or the transactions contemplated hereby (collectively, a "Press Release") unless the content of such Press Release has been approved by the other party hereto, such approval not to be unreasonably withheld or delayed; provided, however, that nothing contained in this Agreement shall prevent or preclude any party from making such disclosures as may be required by applicable law, including, but not limited to, any disclosures required applicable securities laws. 5 + + + + + +8. Indemnification. 8.1. INTERSECT shall indemnify, defend and hold HOVIONE and its officers, directors, affiliates, agents and employees harmless from and against any and all claims, demands, costs, expenses, losses, liabilities and/or damages (including, but not limited to, reasonable attorneys' fees) of every kind and nature caused by, arising out of or resulting from INTERSECT's negligence relating to, or breach of, this Agreement, and any claim for personal or bodily injury arising from the use of the Finished Product or any substance, dosage composition or compound manufactured therefrom; provided, however, that in no event shall this Section apply to any claim covered by Section 8.2 below. 8.2. HOVIONE shall indemnify, defend and hold INTERSECT and its officers, directors, affiliates, agents and employees harmless from and against any and all claims, demands, costs, expenses, losses, liabilities and/or damages (including, but not limited to, reasonable attorneys' fees and court costs) of every kind and nature caused by, arising out of or resulting from HOVIONE's negligence relating to, or breach of, this Agreement and any claim for personal or bodily injury arising from the manufacture and/or distribution of API by HOVIONE. This indemnification obligation does not apply to any claim for personal or bodily injury arising from the use or administration of the API except to the extent such injury is attributable to a Defect in the API arising out of HOVIONE's gross negligence, willful misconduct, or failure to manufacture and deliver the API in accordance with the Product Specifications and all Applicable Law. 8.3. Each party will promptly notify the other of any actual or threatened judicial or other proceedings which could involve either or both parties. Each party reserves the right to defend itself in any such proceedings; provided, however, that, if indemnity is sought, then the party from whom indemnity is sought shall have the right to control the defense of the claim, and the indemnified party may participate with counsel of its choice at its own expense. The Parties shall cooperate with each other to the extent reasonably necessary in the defense of all actual or potential liability claims and in any other litigation relating to the API supplied pursuant to this Agreement. Each party will supply information to the other relevant to any product liability claims and litigation affecting the API and/or the Finished Product, as the case may be. 8.4. NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, IN NO EVENT WILL EITHER PARTY BE LIABLE FOR ANY SPECIAL, INCIDENTAL, CONSEQUENTIAL OR INDIRECT DAMAGES ARISING OUT OF THIS AGREEMENT, HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY. THIS LIMITATION WILL APPLY EVEN IF THE OTHER PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE; PROVIDED, HOWEVER, THAT THIS LIMITATION WILL NOT APPLY TO DAMAGES RESULTING FROM BREACHES BY A PARTY OF ITS DUTY OF CONFIDENTIALITY AND NON-USE IMPOSED UNDER THIS AGREEMENT OR THE CONFIDENTIALITY AGREEMENT OR SUCH PARTY'S INDEMNIFICATION OBLIGATIONS STATED ABOVE. FURTHER AND NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT, THE TOTAL LIABILITY PER YEAR OF HOVIONE SHALL BE LIMITED TO THE VALUE OF THE REVENUES COLLECTED IN THE PREVIOUS CONTRACTUAL YEAR. 9. Insurance. Unless the Parties otherwise agree in writing, the following terms shall apply: 9.1. During the term of this Agreement and for a period [*] after any expiration or termination of this Agreement, each of INTERSECT and HOVIONE shall maintain in full force and effect a comprehensive general liability insurance policy, including Products Liability coverage, with minimum limits of [*] for bodily injury including death. 6 + + + + + +10. Term and Termination. 10.1. Term. + +Unless terminated in accordance with the provisions of Section 10.2 below, the term of this Agreement shall commence on the Effective Date and shall continue in effect for a FIVE (5) year period. 10.2. Grounds for Termination. (a) Either party shall have the right to terminate this Agreement upon the occurrence of any of the following events: (i) the failure of the other party to comply with any of the terms of this Agreement or otherwise discharge its duties hereunder in any material respect, or the breach by the other party of any of its representations or warranties herein in any material respect, if such failure or breach is not cured within ninety (90) days of such breaching party's receipt of written notice specifying the nature of such failure or breach with particularity; or (ii) the making by the other party of an assignment for the benefit of its creditors, or the filing by or against such other party of any petition under any federal, state or local bankruptcy, insolvency or similar laws, if such filing has not been stayed or dismissed within sixty (60) days after the date thereof. 10.3. INTERSECT shall also have the right to suspend further performance under this Agreement and/or terminate this agreement in its entirety, without liability except for unpaid previously delivered API that conforms with the terms hereof, if: (i) HOVIONE loses any approval(s) from the US FDA required to perform its obligations under this Agreement or if HOVIONE is involved in felonious or fraudulent activities. 10.4. HOVIONE shall also have the right to suspend further performance under this Agreement, terminate this Agreement and demand compensation if INTERSECT fails to comply with any of the terms and conditions of this Agreement; provided, however, that if any such failure is disputed by INTERSECT in good faith, HOVIONE shall not have the right to terminate this Agreement with respect to such dispute until such dispute is adjudicated in favor of HOVIONE in accordance with Section 14.6. 10.5. Obligations on Termination: 10.5.1. Of HOVIONE. Upon termination of this Agreement pursuant to this Section 10, HOVIONE will not perform any further work, except the following: 10.5.1.1. perform only those services and other activities mutually agreed upon by INTERSECT and HOVIONE as being necessary or advisable to comply with issued and paid for purchase orders; 10.5.1.2. promptly return all Confidential Information of INTERSECT that it has received pursuant to this Agreement. 10.5.2. Of INTERSECT. Upon termination of this Agreement pursuant to this Section 10, COMPANY will: 10.5.2.1. promptly pay HOVIONE any monies due and owing HOVIONE, up to the time of termination, for API actually manufactured, all authorized expenses actually incurred and any uncancellable commitments made by HOVIONE in connection with the scope of this Agreement; and 10.5.2.2. promptly return all Confidential Information of HOVIONE that it has received pursuant to this Agreement. 11. Continuing Obligations; Survival. In no event shall any termination or expiration of this Agreement excuse either party from any breach or violation of this Agreement and full legal and equitable remedies shall remain available therefore, nor shall it excuse either party from making any payment due under this Agreement with respect to any period prior to the date of expiration or termination. 12. Agreement to Consummate; Further Assurances. Subject to the terms and conditions of this Agreement, each of the Parties hereto agrees to use commercially reasonable efforts to do all things necessary, proper or advisable under this Agreement, applicable laws and regulations to consummate and make effective the transactions contemplated hereby. If, at any time after the date hereof, any further action is necessary, proper or advisable to carry out the purposes of this Agreement, then, as soon as is reasonably practicable, each party to this Agreement shall take, or cause its proper officers to take, such action. 7 + + + + + +13. Force Majeure. Any delay in the performance of any of the duties or obligations of either party hereto (except for the payment of money) caused by an event outside the affected party's reasonable control shall not be considered a breach of this Agreement and the time required for performance shall be extended for a period equal to the period of such delay. Such events shall include, but will not be limited to, acts of God, acts of a public enemy, acts of terrorism, insurrections, riots, injunctions, embargoes, fires, explosions, floods, or other unforeseeable causes beyond the reasonable control and without the fault or negligence of the Party so affected. The Party so affected shall give prompt written notice to the other party of such event. The suspension of performance shall be of no greater scope and no longer duration than is reasonably required and the nonperforming Party shall use its commercially reasonable efforts to remedy its inability to perform; provided, however, that in the event the suspension of performance continues for sixty (60) days after the date of the occurrence, and such failure to perform would constitute a material breach of this Agreement in the absence of such force majeure event, the no affected Party may terminate this Agreement immediately by written notice to the affected Party. 14. General Provisions. 14.1. Assignment. Neither this Agreement nor any interest herein may be assigned, in whole or in part, by either party without the prior written consent of the other, which consent shall not be unreasonably withheld or delayed, except that either party may assign its rights and obligations under this Agreement: (a) to an affiliate, division or subsidiary of such party; and/or (b) to any third party that acquires all or substantially all of the stock or assets of such party, whether by asset sale, stock sale, merger or otherwise, and, in any such event such assignee shall assume the transferring party's obligations hereunder. However, notwithstanding any such assignment, in the case of an assignment to an affiliate, division or subsidiary, the transferring party shall remain liable under this Agreement (in addition to the transferee) unless such liability is specifically waived in writing by the other party hereto. Subject to the foregoing, this Agreement shall be binding upon and inure to the benefit of the Parties hereto, and their respective successors and permitted assigns. (a) Buyout. In the case that either company is acquired by, or merges with, another company which has reason to not wish to continue the relationship, that company may make a contract buyout payment [*] for the [*], with a [*] buyout payment amount of [*]. 14.2. Notice. Any notice or request required or permitted to be given under or in connection with this Agreement shall be deemed to have been sufficiently given if in writing and sent by: (a) personal delivery against a signed receipt therefore, (b) certified mail, return receipt requested, first class postage prepaid, (c) nationally recognized overnight delivery service (signature required), (d) confirmed facsimile transmission, or (e) electronic mail (with any notices to send by facsimile transmission or electronic mail to also be sent by one of the other methods set forth in this Section), addressed as follows: If to HOVIONE, then to: Hovione FarmaCiencia SA Attention: General Counsel Estrada do Paco do Lumiar Campus do Lumiar, Edificio R 1649-038 Lisboa, Portugal + +With a copy, sent as provided herein, to: gc@hovione.com If to INTERSECT, then to: 1555 Adams Dr., Menlo Park, CA 94025 Attn: Chief Operations Officer email: purchasing@intersectent.com 8 + + + + + +Any party may alter the address to which communications are to be sent by giving notice of such change of address in conformity with the provisions of this Section providing for the giving of notice. Notice shall be deemed to be effective, if personally delivered, when delivered; if mailed, at midnight on the third business day after being sent by certified mail; if sent by nationally recognized overnight delivery service, on the next business day following delivery to such delivery service; and if sent by confirmed facsimile transmission or electronic mail, on the next business day following transmission (so long as any notices sent by facsimile transmission or electronic mail are also sent by one of the other methods set forth in this Section). 14.3. Entire Agreement. This Agreement sets forth the entire agreement and understanding between the Parties as to the subject matter hereof and merges all prior discussions and negotiations between them, and neither party shall be bound by any conditions, definitions, warranties, understandings or representations with respect to such subject matter other than as expressly provided herein or as duly set forth on or subsequent to the date hereof in writing and signed by a proper and duly authorized officer or representative of the Parties to be bound thereby, except that this Agreement shall not supersede any separate confidentiality or non-disclosure agreement that may have been, or that may be, entered into by the Parties. To the extent that any conflict arises among the documents that comprise this Agreement (including any schedules or exhibits), the terms and conditions of this Agreement shall govern. The terms and conditions of this Agreement shall control over and supersede any contrary term in any purchase order, 14.4. Amendment and Modification. This Agreement may be amended, modified and supplemented only by written agreement duly executed and delivered by each of the Parties hereto. 14.5. Waiver. The failure of any party to exercise any right or to demand the performance by the other party of duties required hereunder shall not constitute a waiver of any rights or obligations of the Parties under this Agreement. A waiver by any party of a breach of any of the terms of this Agreement by any other party shall not be deemed a waiver of any subsequent breach of the terms of this Agreement. 14.6. Governing Law. This Agreement is to be governed by and construed in accordance with the laws of the State of New York, United States, notwithstanding any conflict of law provisions to the contrary. The United Nations Convention on Contracts for the International Sale of Goods shall not apply to this Agreement. Any action which in any way involves the rights, duties and obligations of either party hereto under this Agreement shall be brought in the courts of Geneva and the Parties to this Agreement hereby submit to the personal jurisdiction of any such court. The Parties waive any and all rights to have any dispute, claim or controversy arising out of or relating to this Agreement tried before a jury. 14.7. Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement or any action in any other jurisdiction, but this Agreement shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had not been contained herein. 14.8. Construction. The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event of any ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement. As used in this Agreement, the singular shall include the plural and vice versa, and the terms "include" and "including" shall be deemed to be immediately followed by the phrase "but not limited to." The terms "herein" and "hereunder" and similar terms shall be interpreted to refer to this entire Agreement, including any schedules attached hereto. 14.9. Parties/Relationship. Neither party shall hold itself out to third parties as possessing any power or authority to enter into any contract or commitment on behalf of any other party. This Agreement is not intended to, and shall not; create any agency, partnership or joint venture relationship between or among the Parties. Each Party is an independent contractor with respect to the others. No Party is granted any right or authority to assume or create any obligation or responsibility, express or implied, on behalf of, or in the name of any other Party hereto, or to bind any other party hereto in any manner or with respect to anything, whatsoever. 9 + + + + + +14.10. Captions. The captions and headings in this Agreement are inserted for convenience and reference only and in no way define or limit the scope or content of this Agreement and shall not affect the interpretation of its provisions. 14.11. Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. 14.12. Subcontractors. Any work that is to be done by any Party under this Agreement may be subcontracted to a third party in accordance with the approved Marketing Authorisation, cGMPs and any applicable PMDA guidelines which relate to the work to be performed under the direction and supervision of such party, as the case may be; provided, however, that the subcontracting party exercises reasonable diligence in selecting such subcontractor and, as between the parties hereto, the subcontracting party shall be and remain responsible for all acts and omissions of any such subcontractor. 14.13. Schedules and Exhibits. All Schedules and Exhibits referenced in this Agreement, if any, are hereby incorporated by reference into, and made a part of, this Agreement. 14.14. Currency. All sums set forth in this Agreement and ay appendices, exhibits or schedules hereto are, and are intended to be, expressed in US dollars. + +IN WITNESS WHEREOF, the parties have executed the Agreement as of the date first above written. HOVIONE INTER AG: + +By: /s/ Frederic Kahn Name: Frederic Kahn Its: VP Marketing and Sales 10 + + + + + +INTERSECT ENT, INC.: + +By: /s/ Thomas A. West Name: Thomas A. West Its: CEO 11 \ No newline at end of file diff --git a/full_contract_txt/INTRICONCORP_03_10_2009-EX-10.22-Strategic Alliance Agreement.txt b/full_contract_txt/INTRICONCORP_03_10_2009-EX-10.22-Strategic Alliance Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..28cd9d6211bc6768341d4b3a838248c3807db3e5 --- /dev/null +++ b/full_contract_txt/INTRICONCORP_03_10_2009-EX-10.22-Strategic Alliance Agreement.txt @@ -0,0 +1,656 @@ +Exhibit 10.22 + + + + 1 + + Strategic Alliance Agreement Intricon Corporation 1260 Red Fox Road Arden Hills, Minnesota 55112 United States and Dynamic Hearing Pty Ltd 2 Chapel Street, Richmond, VIC 3121 AUSTRALIA + + + + + + AGREEMENT This Agreement is entered into and is effective as of the 1st day of October, 2008 (Commencement Date) by and between IntriCon Corporation, a Pennsylvania Corporation having a place of business at 1260 Red Fox Road, Arden Hills, Minnesota 55112 USA (hereinafter IntriCon) and Dynamic Hearing Pty Ltd a Corporation organized under the laws of Victoria, Australia and having a place of business at 2 Chapel Street, Richmond, Victoria 3121, Australia (hereinafter Dynamic Hearing) agree to collaborate with each other as a Strategic Alliance. As such, this Strategic Alliance Agreement (SAA) outlines the principles and the understanding of the parties and defines related terms and conditions. WHEREAS, Dynamic Hearing has developed technology useful for products in the Hearing Health (HH) Assisted Listening Device (ALD) and Professional Communications (PADA) markets and DSP platforms which are hereinafter defined. WHEREAS, IntriCon has also developed technology for the HH, ALD and PADA markets and DSP platforms. + + 1.1 The purpose of this alliance is to exploit the parties' complimentary capabilities for producing DSP Technology products for the HH, ALD, and PADA markets. + + The following terms in the context of this SAA shall have the following meanings: + + An Assisted Listening Device ("ALD") is a + + + + Hearing Aids are amplification devices primarily designed to compensate for hearing loss, designed for listening only (through a microphone, telecoil, Direct Audio Input or other similar audio pathways and run on a low power hybrid circuit. Hearing Aids may include in-the- ear Hearing Aids (ITE), behind-the-ear Hearing Aids (BTE), or completely-in-the-canal Hearing Aids (CIC). + + Professional Audio/Communication Devices ("PADA") are wired or wireless headsets or other devices used for one-way or two-way communications in professional or industrial settings such as law enforcement, sport events, professional performances, search and rescue, and military operations. 2 + + 1.0 Purpose + + 2.0 Definitions + + 2.1 Assisted Listening Devices + + 1. One way communications device 2. Used for hearing protection or listening in challenging environments, and 3. Contains Ultra Low Power (ULP) DSP and or ULP Wireless technology + + 2.2 Hearing Aids: + + 2.3 Professional Audio/Communication Devices + + + + + + + + DSP means digital signal processing. More specifically, for the purposes of this SAA, DSP Technology shall mean ON Semiconductor hardware and firmware algorithms used for the HH, PADA and ALD markets. Hardware shall include the ON Semiconductor Ezairo DSP, and the Single Chip Hearing Amplifier (SCHA) from ON Semiconductor. + + IntriCon Technology is that technology: + + + + + + + + Dynamic Hearing Technology is that technology: + + + + + + + + K/S HIMPP (hereinafter HIMPP) is a Danish partnership that owns numerous patents relating to Hearing Aids and associated technologies. + + HIMSA otherwise known as Hearing Instruments Manufacturers' Software Association is a privately owned company that has developed a standardized hearing care software system. 3 + + 2.4 DSP Technology: + + 2.5 IntriCon Technology: + + (i) for which a patent(s) has been granted and all fees relating to the grant including any associated maintenance or annuity fees have been paid. A granted patent does not include pending applications including those pending applications which are associated with a granted patent through a claim of priority; + + (ii) or has a patent pending, or + + (iii) is Technology under "record of invention". + + 2.6 Dynamic Hearing Technology: + + (i) for which a patent(s) has been granted and all fees relating to the grant including any associated maintenance or annuity fees have been paid. A granted patent does not include pending applications including those pending applications which are associated with a granted patent through a claim of priority; or + + (ii) has a patent application pending, or + + (iii) is Technology under "record of invention". + + 2.7 K/S HIMPP: + + 2.8 HIMSA: + + + + + + + + Base Product means the DSP Technology including the ON Semiconductor Ezairo or SCHA chips, the EEPROM and the firmware loaded onto the EEPROM and the minimum printed circuit board package necessary to connect and house these items. The Base Product does not include additional PCB or flex circuits necessary to connect to other components of an Enhanced Product. + + Enhanced Product means a value added assembly or completed Hearing Aid or Assistive Listening Device which includes the Base Product as one of the component devices. The Enhanced Product may include other electronic components, flex circuitry, microphones, a receiver, plastic housings, volume controls, trimmer potentiometers, push button switches, programming connectors and other components. + + Contact Center means a group of people who use Contact Center Products and provide telemarketing, mail ordering, customer care, technical support and similar functions either directly for an enterprise or on an outsourced basis by using automatic call directors for inbound centers and predictive dialers for outbound centers. A Contact Center may also use software-based systems rather than physical equipment. + + Contact Center Products means any product, including without limitation, headsets (cordless or corded), amplifiers, telephones, soft phones, and software-based systems that are used in Contact Centers. For purposes of clarification, no product shall be deemed a "Contact Center Product" unless it is used in a Contact Center, including, without limitation, Bluetooth Products. + + + + + + + + + + + + 4 + + 2.9 Base Product + + 2.10 Enhanced Product + + 2.11 Contact Center + + 2.12 Contact Center Products + + 2.13 Miscellaneous Definitions: + + (a) headings are for convenience only and do not affect interpretation; + + (b) the singular includes the plural and conversely; + + (c) the meaning of general words introduced by including, or for example, or similar expressions is not limited by specific examples; + + (d) a reference to a person, corporation, trust, partnership, unincorporated body or other entity includes any of them; + + (e) a reference to a clause or Exhibit is a reference to a clause of, or an Exhibit to, this Agreement; + + + + + + + + + + + + + + + + unless the context requires otherwise terms in bold italics have the meaning given below: Business Day means a day other than a Saturday, Sunday or public holiday in Victoria, Australia; Confidential Information means information in relation to a party, including its business activities that + + in connection with this Agreement whether the information is in oral, visual or written form or is recorded or embodied in any other medium and includes all such information disclosed to, or accessed by, the other party before this Agreement commences; Exclusivity Date means October 1, 2008, the date Intricon makes its first quarterly payment of the Minimum Payment; Identified Party means a party identified in Exhibit C before January 1, 2009 and all other parties are unidentified parties; Improvements mean any modification, improvement, enhancement or development to the Licensed Subject Matter excluding always a development, modification, improvement or enhancement that is patentable in its own right or which is proprietary information of IntriCon. Key Personnel means Elaine Saunders and Anthony Shilton; 5 + + (f) a reference to an agreement or document (including a reference to this Agreement) is to the agreement or document as amended, varied, supplemented, novated or replaced, except to the extent prohibited by this Agreement or that other agreement or document; + + (g) a reference to a party to this Agreement includes the party's successors, permitted substitutes and permitted assigns (and, where applicable, the party's legal personal representatives); + + (h) a reference to legislation or to a provision of legislation includes a modification or re-enactment of it, a legislative provision substituted for it and a regulation or statutory instrument issued under it; + + (i) if a translation of this Agreement into any other language is produced, the original English version is to be the definitive version of this Agreement; + + (j) the term Related Body Corporate has the meaning given in the Corporations Act 2001 (C'th); and + + (a) is disclosed to the other party by or on behalf of the first party; (b) is acquired by the other party directly or indirectly from the first party; or (c) otherwise comes to the knowledge of the other party, + + + + + + Licensed Subject Matter means Dynamic Hearing's Technology, Software, and Documentation as described in Exhibit A and Exhibit B, in respect of which IntriCon is granted a license under this Agreement; Product means a Base Product Unit or an Enhanced Product Unit; For purposes of computing Royalty Payments, a sale shall occur when IntriCon receives payment from a customer for a Base Product Unit., or an Enhanced Product containing a Base Product; Services means technology transfer and other support provided to IntriCon by Dynamic Hearing; Base Product Unit means a single Base Product item; Territory means the world; and Use means, in relation to: + + 2.14 Additional definitions are provided in Exhibits A and B attached here to which are considered to be part of this Agreement. + + 3.1 Term: The initial term of this Agreement shall be five (5) years from the date of execution and may be extended subject to satisfactory agreement on ongoing commercial terms, to be agreed two (2) months prior to the expiration of this Agreement. 3.2 Dynamic Hearing grants to IntriCon in accordance with this Agreement, for the Term, a license, to Use Dynamic Hearing's Technology, Software and Documentation developed as of the Commencement Date to manufacture, import, sell and offer for sale throughout the Territory, Products containing Dynamic Hearing's Technology and Software. This grant specifically excludes products for Contact Centers, and the use of ADRO Technology in electrical stimulation of the auditory system. 3.3 IntriCon accepts that Dynamic Hearing owns all rights in relation to the Licensed Subject Matter except for those rights being specifically granted hereunder, and that Dynamic Hearing is under no obligation to provide the source code of any software. 3.4 Commencing on the Exclusivity Date, and continuing for so long as IntriCon continues to make such payments, the license granted to IntriCon under this Agreement will, subject to the terms and conditions of this Agreement, be exclusive for Hearing Aids. The exclusivity shall not prevent Dynamic Hearing entering into agreements with any Identified Party subject to the terms herein. On or before January 1, 2009, Dynamic Hearing will provide IntriCon with an updated version of Exhibit C which will include a complete list of identified parties. After January 1, 2009, no additions to Exhibit C are allowed unless agreed to by IntriCon in writing. 6 + + (a) the Technology, make, hire, sell or otherwise dispose of the product, offer to make, sell, hire or otherwise dispose of it, use or import it; and (b) the Software and Documentation to reproduce any copyright works subsisting in such software or documentation. + + 3.0 License Grant + + + + + + 3.5 IntriCon acknowledges that Dynamic Hearing's rights to license technology and software to companies manufacturing implantable devices is not restricted in any way. IntriCon acknowledges that Dynamic Hearing's rights to license any Dynamic Hearing Technology or Software to Identified Parties, and provide support as agreed with Identified Parties, is in no way restricted. 3.6 No further design support will be given to Sound Design Technologies, Ltd (hereinafter Sound Design) which includes the recent purchase of Gennum Corporation's hearing instrument business after 30 October 2009, if all conditions of IntriCon's exclusivity are met. 3.7 Intricon acknowledges that Dynamic Hearing is negotiating with several third parties regarding licensing Dynamic Hearing Technology and Software, relating to its Hearing Aid Designer™ and other products and services. The rights granted under such agreements shall be included as exceptions to the exclusivity of IntriCon's License Grant, if such agreements are executed by Dynamic Hearing and the third party before January 1, 2009. Such third parties and their relevant subsidiaries will be Identified Parties and added to the Exhibit C. Agreements with identified parties are allowed exceptions and no Agreements are allowed with unidentified parties. 3.8 Commencing on October 1, 2008, and continuing for so long as IntriCon continues to make minimum payments as defined in 4.3, Dynamic Hearing agrees that it will not license any Dynamic Hearing Technology for Hearing Aids, subject to Clause 3.5. 3.9 If any Identified Party, (with the exception of Sound Design) purchases DSP product sold or made by IntriCon with Dynamic Hearing's Hearing Aid Designer™ software and requests assistance to achieve HIMPP compliance for products using such DSP chips, IntriCon will use its best efforts to comply with the request for HIMPP compliance. 3.10 Where IntriCon supplies Products to a third party, IntriCon will, at its cost: + + + + 7 + + (a) obtain and maintain all governmental and regulatory approvals necessary for it to exercise, and comply with all laws and regulations applicable to the exercise of, its license rights under this Agreement; and + + (b) comply, and ensure that all Products comply, at all times with any technical standards as may reasonably be required by law, and any licensing requirements, standards, or protocols established by the Hearing Instrument Manufacturers' Software Association (HIMSA) and the Hearing Instrument Manufacturers' Patent Partnership (HIMPP), it being acknowledged that Dynamic Hearing makes no representation or warranty that the exercise of the rights granted under this Agreement will not infringe any rights held by HIMSA, HIMPP or any other third party. + + + + + + 3.11 Where Dynamic Hearing supplies Dynamic Hearing Technology directly to a customer on DSP chips supplied by IntriCon, then, IntriCon will use its best efforts to comply with the request for HIMPP compliance or notify the third party customer of the customers obligations, as per 3.10 (a) and (b). 3.12 Dynamic Hearing may continue indefinitely selling products and services to new customers using the ON Semiconductor DSP hybrid chip. For the absence of doubt, the Exclusivity grant of 3.2 does not restrict Dynamic Hearing from licensing Dynamic Hearing Technology and DSP Software on any ON Semiconductor platform, purchased by a third party or by Dynamic Hearing, from IntriCon. With the exception of the Identified Parties, Dynamic Hearing agrees that it will not sell the Dynamic Hearing DSP Software for Hearing Aids configured to run on any hardware other than that provided by ON Semiconductor, except in circumstances as described in this Agreement. Dynamic Hearing may continue to sell products and services to non-Hearing Aid Customers using the ON Semiconductor DSP hybrid chips including the Bela Signa. 3.13 Dynamic Hearing and IntriCon shall undertake a mutual roadmap review and agree whether or not the current ON Semiconductor chips will meet market requirements. If the Parties agree that the ON Semiconductor chips will not meet market requirements, IntriCon shall have six (6) months to correct the material deficiency. Material deficiency means that ON Semiconductors must have a chip that is within 10% of the best in class performance on each one of these characteristics: physical size, power supply current, computational capability and cost. If IntriCon is unable or unwilling to remedy such deficiency, IntriCon will lose its exclusivity under this license. 3.14 IntriCon agrees that nothing in this Agreement precludes Dynamic Hearing from licensing Dynamic Hearing Technology, including the ADRO™ Algorithm to manufacturers, including Siemens AG, Sonova Holdings AG, GN Resound Group, William Demant Holding A/S, Widex A/S, Starkey Laboratories Inc, and Cochlear Ltd. 3.15 Nothing herein shall preclude Dynamic Hearing from making and selling its own Hearing Aids. Nothing in this agreement prevents Dynamic Hearing from selling Hearing Aids manufactured by third parties in Dynamic Hearing's own clinics. 3.16 No other exception to IntriCon's exclusive license being granted herein shall exist unless such exception is specifically identified by a supplemental agreement between IntriCon and Dynamic Hearing. + + 4.1 IntriCon's payments to Dynamic Hearing will comprise two payment components. A first payment component (minimum payment) will be a technology access fee for access to Dynamic Hearing Technology on a non-exclusive basis. A second payment component hereinafter (Second Component) will be for exclusive rights to Dynamic Hearing Technology as such exclusive rights are defined herein. The second component may comprise a combination of a royalty payment and fees for services. 8 + + 4.0 Payments + + + + + + 4.2 IntriCon will pay to Dynamic Hearing a fixed technology access fee of US$300,000 annually (hereinafter "Access Fee"), the payment of the technology access fee to be paid on a quarterly basis at the beginning of each calendar quarter. Payment of the technology Access Fee will maintain IntriCon's non-exclusive rights to Dynamic Hearing Technology. 4.3 To maintain exclusive rights to Dynamic Hearing Technology for Hearing Aids IntriCon will make minimum annual payments to Dynamic Hearing as set out in the Minimum Payment Schedule. The Minimum Payment consists of the Access Fee of US$300,000 per annum and the Second Component that increases from year to year. Minimum Payment Schedule (All amounts are in US Dollars): + + The Minimum Payments will be paid quarterly in advance in equal installments at the beginning of each royalty quarter, as defined in 4.7. The first quarterly Minimum Payment (for the quarter beginning 1st October, 2008) shall be made at the date of signing of this Agreement and the second quarterly minimum payment shall be made at January 1, 2009 with all further quarterly Minimum Payments following the schedule as defined in 4.7. 4.4 Intricon is entitled to credit for any amounts payable to Dynamic Hearing arising from per unit royalties and fees for services up to the value of the corresponding quarterly Second Component. In quarters where the per unit royalties and fees for services are less than the corresponding quarterly Second Component, IntriCon may carry forward the remaining credit to be offset against future quarters per unit royalties and fees for services. Any amounts due from per unit royalties and fees for services that exceed the value of the corresponding quarterly payment of the Second Component, net of any carried forward credit, will be paid within 30 days of the end of that royalty quarter. 4.5 Once IntriCon has paid the minimum payments in 4.3, no further minimum payments, both Access Fee and Second Component, are required for access to Dynamic Hearing Technology or to maintain exclusivity over the term of this Agreement. IntriCon will continue to have the obligation to pay royalty payments under 4.9 and fees for services under 4.8. 4.6 In the event IntriCon has not yet paid the minimum payments and should IntriCon choose not to continue access to Dynamic Hearing Technology on an exclusive basis as referred to in 4.3, the following amounts will be payable: + + 9 + + PAYMENT YEAR + +MINIMUM PAYMENT ACCESS FEE SECOND COMPONENT + +Year 1 $400,000 $300,000 $100,000 Year 2 $700,000 $300,000 $400,000 Year 3 $1,100,000 $300,000 $800,000 Year 4 $1,600,000 $300,000 $1,300,000 Year 5 $2,100,000 $300,000 $1,800,000 + + (1) the technology Access Fee payable quarterly in advance in equal installments at the beginning of each royalty quarter and; + + + + + + + + 4.7 Payment year 1 of this agreement shall start at the commencement date and the first royalty quarter will be completed at the end of the calendar quarter. Subsequent royalty quarters will correspond with the calendar quarters ending on the last days of March, June, September and December respectively. 4.8 Dynamic Hearing shall provide engineering and other services (hereinafter "Fees For Services") to IntriCon on a timetable to be agreed upon in writing forming part of this agreement as an exhibit. Dynamic Hearing will invoice IntriCon on a quarterly basis 30 days from the end of the quarter for engineering and services that exceed 260 hours in a single month at the rate of $150 per hour. Payments for such services shall be due and payable within 30 days of the end of that royalty quarter. There will be no charge by Dynamic Hearing to IntriCon for the first 260 hours of engineering and services provided each month, however, any unused hours will not be carried forward as credit to subsequent months or be entitled to be offset against any future monthly amounts payable for engineering and services. IntriCon is entitled to utilize such engineering services for the HH, ALD or PADA markets. Other service support (e.g. marketing or audiology) may be contracted at the same rates. If Dynamic Hearing staff are required by IntriCon to travel to meetings, all airfares, ground transportation, hotel bills and other out of pocket expenses will be paid by IntriCon. 4.9 Royalty Payments will be made only on the Base Product Unit, or on the Base Product portion of an Enhanced Product for any Base Product included in an Enhanced Product. The initial base rate of royalty shall include the use of the DSP Framework. In no case shall IntriCon pay Royalty Payments on any product or portion of any product other than for revenue received for Base Product Unit or for the Base Product portion of an Enhanced Product, and in the case a Base Product portion of an Enhanced Product such Base Product portion shall not be given a value that is influenced by its inclusion in the Enhanced Product. Royalty Payment for HH, ALD and PADA units that incorporate Dynamic Hearing Technology shall be paid according to the table set forth below: + + The maximum royalty rate identified in the table herein includes an initial base rate of 3% for each Ezairo DSP platform and 1% for each Single Chip Hearing Aid (SCHA) sold. A 2% royalty rate per Base Product Unit shall be added to the initial base rate for each DSP feature/module that is based on Dynamic Hearing Technology and that is added to a Base Product Unit. However, such additional Royalty Payments when added to the initial base rate shall not exceed in total the stated maximum rates specified in the table herein. 10 + + (2) any monthly fees for services and royalties are payable in accordance with clause 4.8 and royalty payments under 4.4 and 4.9. + + Cumulative annual HH & ALD Volume that use the Framework + +Ezairo Maximum Royalty Rate SCHA Maximum Royalty Rate + +Less Than 20,000 Units 10% 8% 20,000-50,000 units 9% 7% 50,000-100,000 units 8% 6% 100,000-200,000 units 7% 5% 200,000-500,000 units 6% 4% 500,000 to 1,000,000 units 5% 3% Over 1,000,000 5% 1.5% + + + + + + 4.10 All amounts payable by IntriCon under this Agreement must be paid free and clear of and without any deduction or withholding for or on account of any present or future withholding tax, including any interest or penalties in relation to such tax (Withholding Taxes). If IntriCon is required to make any deduction or withholding for any Withholding Tax, then IntriCon must pay to Dynamic Hearing such additional amount to ensure that Dynamic Hearing receives such amount that would have been received by it as if no such withholding or deduction had been required. + + + + + + + + 5.1 Within thirty (30) days of the end of each payment quarter IntriCon must provide to Dynamic Hearing a statement of the actual number and value of Base Product Units Sold along with the number and value of DSP features/models sold with those Base Product Units by it or any Related Body Corporate. The statement must also include calculations of the per unit royalty in accordance with clause 4.9. Any royalty due for payment by IntriCon to Dynamic Hearing is payable at the same time the statement is provided. 5.2 A Royalty Payment will be due only once in respect of each Base Product Unit Sold, and the Royalty Payment will be due on the first Sale of the Base Product Unit by IntriCon or a Related Body Corporate. 5.3 Where, in any payment quarter, a Base Product Unit is, in good faith, returned to IntriCon, IntriCon is not required to pay any Royalty Payment on the Sale of that Base Product Unit. If IntriCon has paid a Royalty Payment on that Base Product Unit in a previous payment quarter, IntriCon may reduce the Royalty Payment due for the payment quarter in which the Base Product Unit is returned by the amount of any such Royalty paid. + + + + 1) IntriCon must bear all stamp duty that may be levied on this Agreement. IntriCon must bear any other taxes, levies, imposts, charges, rates and duties that may be levied or imposed by a governmental authority on any person (including fines, penalties and interest) in connection with this Agreement (other than income tax payable to the Commonwealth of Australia by Dynamic Hearing). + + 2) Each party must bear its own costs arising out of the negotiation, preparation and execution of this Agreement. + + 3) All amounts payable to Dynamic Hearing under this Agreement must be made without set-off, counterclaim or deduction. + + 5.0 Reports + + 6.0 Records and Audit + + + 6.1 IntriCon must keep accurate and complete records of orders received, Base Product Units / DSP Features/Modules Sold and returned and all other records reasonably necessary to substantiate all Royalty Payments to be made to Dynamic Hearing under this Agreement. 11 + + + 6.2 IntriCon must make all such records available for inspection, copying and audit by an independent auditor appointed by Dynamic Hearing (and to which IntriCon has no reasonable objection) during ordinary business hours at any time during the Term and for a period of one year following the expiration or earlier termination of this Agreement, provided that: + + + + + + + + 6.3 If in any audit, the auditor finds an underpayment or an overpayment of fees due under this Agreement, the party who has received the overpayment or has underpaid will within 7 days repay the excess or pay the shortfall (as the case may be) to the other party. + + 7.1 Each party must: + + + + + + + + + + 7.2 This Agreement is confidential and each party must not disclose any part of this Agreement to any person without the prior written consent of the other party. 12 + + (a) such inspection, copying or audit must only be made after at least one Business Day's written notice; + + (b) such audit must not unreasonably interfere with the day to day operations of IntriCon; and + + (c) such audit must be at Dynamic Hearing's expense unless the auditor finds an underpayment royalty due under this Agreement in excess of 5% in which case IntriCon must reimburse Dynamic Hearing's reasonable cost of such audit; and + + (d) Audits will be limited to one audit in any calendar year. + + 7.0 Confidentiality + + (a) not disclose any Confidential Information to any person, except in confidence as permitted by this Agreement; + + (b) not use any Confidential Information except as reasonably necessary for the purpose of putting this Agreement into effect (Permitted Purpose); + + (c) restrict access to Confidential Information to those of its employees and officers for whom such access is not reasonably necessary for the Permitted Purpose; + + (d) ensure that its employees and officers comply with this Agreement; and + + (e) not reproduce or record, or permit or cause any reproduction or recording of, any Confidential Information except to the extent reasonably necessary for the Permitted Purpose. + + + + + + 7.3 This clause 7.0 does not apply where the party receiving the Confidential Information can prove that: + + + + + + + + + + + + + + + + 8.1 Dynamic Hearing will be solely responsible at its cost and at its discretion for applying for, obtaining, maintaining, defending and enforcing all aspects of all rights in respect of the Licensed Subject Matter and IntriCon must: + + + + 8.2 IntriCon must notify Dynamic Hearing immediately upon becoming aware of: + + 13 + + (a) the information has become generally available to the public other than because of a breach of this Agreement, or any obligation of confidence owed to the disclosing party; + + (b) it has received the information from a third person, legally entitled to possess the information and provide it to that party, if that information is used, disclosed or otherwise dealt with in accordance with the rights or permission lawfully granted to that party by that third person; or + + (c) the disclosure of information is necessary to comply with any applicable law or legally binding order of any court, government, semi-government authority or administrative or judicial body or the applicable rules of any stock exchange, provided that before any such disclosure, the receiving party must, at its cost: + + (i) immediately notify the other party giving full details of the circumstances of the proposed disclosure and of the relevant information to be disclosed; + + (ii) give the other party a reasonable opportunity to protect or preserve the confidentiality of the relevant information; + + (iii) co-operate with the other party in any action taken under this paragraph (c); and + + (iv) in any event, take all reasonable steps to preserve the confidentiality of the information being disclosed. + + 8.0 Maintenance, Infringement and Third Party Proceedings + + (a) provide all reasonable assistance to Dynamic Hearing in any action which Dynamic Hearing may take in relation to any such matters; and + + (b) not take any action in relation to any such matters without the prior written consent of Dynamic Hearing, to be given at Dynamic Hearing's absolute discretion. + + (a) any claim or allegation that the exercise of the rights under this Agreement constitutes an infringement of the rights of any third party; and + + + + + + + + + + 9.1 Dynamic Hearing hereby represents that, as at the Commencement Date none of the Key Personnel has any actual knowledge that, save for any rights claimed to be owned or held by the HIMPP, any rights of any third person may be infringed by the exercise, in accordance with this Agreement of the rights licensed under clause 3. 9.2 IntriCon accepts that neither Dynamic Hearing nor any person acting on its behalf has made any representation that (a) any patent applications comprised in the Technology will be granted in any part of the Territory or (b) any registered rights arising should any such applications be granted, will be, or any registered rights comprised in the Technology are, valid or enforceable. 9.3 Dynamic Hearing will not be responsible for: + + + + + + 10.1 IntriCon must indemnify Dynamic Hearing and its Related Bodies Corporate and their respective directors, officers, employees and agents from and against any claims, losses, liabilities, costs, expenses (including investigative costs, court costs, legal fees, penalties, fines and interest) and damages of any kind (including those which are prospective or contingent) whatsoever and howsoever, directly or indirectly arising out of or in connection with this Agreement, including liability arising in connection with: + + + + + + 14 + + (b) any third party's infringement or threatened infringement of any rights subsisting in the Licensed Subject Matter. + + 9.0 Representations and Warranties + + (a) the delivery, installation, or support of the Software to end-users of any Product or any other third party; or + + (b) the supply, service, installation, and maintenance of any product (including any Product) or any ancillary software required for communication with any other software or device used by IntriCon in relation to the Applications Software Platform or the DSP Platform (including those known as the HiPro interface, the MicroCONNECT interface, the NOAH Hearing Aid fitting database and the NOAH link interface). + + 10.0 Indemnity and Limitation of Liability + + (a) any infringement of third party rights but only to the extent that such third party infringement results from the use of IntriCon Technology; + + (b) injury to any person (including death) or loss of or damage to property which may arise from or as a result of manufacture, importation, sale, offer for sale or use of any Product by IntriCon; or + + (c) any breach of this Agreement by IntriCon or its Related Bodies Corporate and their respective directors, officers, employees and agents or any unlawful or negligent act or omission of any of them but subject to the provisions of 10.3. + + + + + + 10.2 Dynamic Hearing must indemnify IntriCon and its Related Bodies Corporate and their respective directors, officers, employees and agents from and against any claims, losses, liabilities, costs, expenses (including investigative costs, court costs, legal fees, penalties, fines and interest) and damages of any kind (including those which are prospective or contingent) whatsoever and howsoever, directly or indirectly arising out of or in connection with this Agreement, including liability arising in connection with: + + + + 10.3 To the maximum extent permitted by law and notwithstanding anything to the contrary in this Agreement: + + (a) any infringement of third party rights that arise out of the exercise of the rights licensed under this Agreement; or + + (b) any breach of this Agreement by Dynamic Hearing or its Related Bodies Corporate and their respective directors, officers, employees and agents or any unlawful or negligent act or omission of any of them but subject to the provisions of 10.3. + + (a) all terms and warranties expressed or implied by any legislation, the common law, equity, trade, custom or usage or otherwise in relation to this Agreement are expressly excluded; + + (b) Dynamic Hearing is not liable in any way to IntriCon for any indirect, consequential, third party, special or incidental harm, liability, expense, cost, loss or damage, loss of profits, loss of data, exemplary damages or any other indirect commercial or economic loss of any kind whatsoever incurred by IntriCon whether in negligence, tort, equity, contract or otherwise, arising in connection with this Agreement; + + (c) IntriCon is not liable in any way to Dynamic Hearing for any indirect, consequential, third party, special or incidental harm, liability, expense, cost, loss or damage, loss of profits, loss of data, exemplary damages or any other indirect commercial or economic loss of any kind whatsoever incurred by Dynamic Hearing whether in negligence, tort, equity, contract or otherwise, arising in connection with this Agreement; + + (d) Dynamic Hearing's aggregate liability to IntriCon for direct loss and damages and all other liability not described herein arising in connection with this Agreement whether in negligence, tort, equity, contract or otherwise, is limited to payment of damages recoverable at law or equity up to a maximum of (and, for the sake of clarity must not exceed) $5m; and + + (e) if any legislation implies in this Agreement any term or warranty which cannot be excluded or modified, the liability of Dynamic Hearing for a breach of any such term or warranty is limited, at the option of Dynamic Hearing, to any one or more of the following: + + + + 15 + + + (i) if the breach relates to goods: + + (A) the replacement of goods or the supply of equivalent goods; or + + (B) the repair of such goods; and + + (ii) if the breach relates to services: the supplying of the services again. + + 11.0 Termination + 11.1 Notwithstanding any provision to the contrary in this Agreement, this Agreement may not be terminated by either party prior to two years from the commencement date other than for the failure to pay the first and second yearly minimum payments as defined in section 4.3. 11.2 Subject to the provisions of 11.1, either party may terminate this Agreement immediately by written notice to the other party if: + + 11.3 Dynamic Hearing may terminate this Agreement immediately by written notice to IntriCon if IntriCon: + + + + + + + + + + + + + (a) the other party breaches a material term of this Agreement (unless the breach is capable of remedy, in which case if the other party fails to remedy the breach within 30 days after being required by written notice to do so) + + (a) enters into any form of insolvency or administration including the following: + + (i) stops or suspends or threatens to stop or suspend payment of all or a class of its debts; or + + (ii) becomes insolvent, has an application or order made, proceedings commenced, a resolution passed or proposed in a notice of meeting, an application to a court made or other steps taken against or in respect of it for its winding up, deregistration or dissolution or for it to enter an arrangement, compromise or composition with or assignment for the benefit of its creditors, a class of them or any of them; + + (b) sells a significant portion of its assets or undertaking. + + + + + + + + + + 11.4 IntriCon may terminate this Agreement immediately by written notice to Dynamic Hearing if Dynamic Hearing: 16 + (a) enters into any form of insolvency or administration including the following: + + (i) stops or suspends or threatens to stop or suspend payment of all or a class of its debts; or + + (ii) becomes insolvent, has an application or order made, proceedings commenced, a resolution passed or proposed in a notice of meeting, an application to a court made or other steps taken against or in respect of it for its winding up, deregistration or dissolution or for it to enter an arrangement, compromise or composition with or assignment for the benefit of its creditors, a class of them or any of them; + + (b) sells a significant portion of its assets or undertaking. + + + 11.5 (a) Subject to the provisions of 11.1, IntriCon may terminate this Agreement upon three (3) months written notice to Dynamic Hearing, such notice stating that IntriCon will cease making payments, either minimum or second component payments or both, and such termination shall not be considered a breach of this Agreement. + + + + + + + + + + + + + + 17 + + + + (b) Subject to the provisions of 11.1, Dynamic Hearing may terminate this Agreement upon three (3) months written notice to IntriCon of such termination. + + 11.6 Termination or expiry of this Agreement will not affect: + + (a) any rights or remedies of the parties which may have accrued before the date of termination; + + (b) the rights and obligations of the parties which by their nature survive termination, including clauses 6, 7, 8, 9, and 10. + + 11.7 Upon the effective date of expiry or termination of this Agreement for any reason whatsoever: + + (a) IntriCon must return all original media and documentation and all copies thereof relating to the Licensed Subject Matter and Confidential Information and all associated documents supplied under this Agreement or otherwise in IntriCon's possession, custody or control except for such media and documentation necessary to continue selling existing products; + + (b) On Dynamic Hearing's request, IntriCon must procure one of its executive officers to certify (by way of statutory declaration) that it has complied with its obligations under clause 11.7(a). + + + + + + + + provided that IntriCon may + + + + + + + + 11.8 Upon the Effective Date of expiry or termination of this Agreement for any reason whatsoever: + + + + 11.9 Nothing in this clause 11.0 is intended to prevent end-users of Products continuing to use the Products or to require such end-users to return or destroy any Product. 18 + + (c) All rights granted under this Agreement in relation to the Licensed Subject Matter will cease except as otherwise provided herein as to existing products; + + (i) retain one copy of the Software until the fifth anniversary of such effective date; and + + (ii) Use such Software until the fifth anniversary of such effective date solely as reasonably necessary to repair and maintain any Base Product Units Sold under this Agreement on or before such effective date, for the period (if any, until such anniversary) while such Base Product Unit is covered by a warranty granted by IntriCon and as otherwise provided herein as to existing products. + + (d) Notwithstanding anything herein to the contrary, IntriCon shall have a right after termination to continue selling existing products that include the Dynamic Hearing Technology as long as IntriCon pays the appropriate royalties in accordance with the payment clauses in section 4.9 and, for the avoidance of doubt, such other clauses of this Agreement (including 4.3, 4.10, 5, 6 and 10.1 will continue to apply in respect of such sales. Existing products are those products that IntriCon is selling at the date of termination of this Agreement. + + (e) IntriCon is not obligated to pay any royalties, Minimum Payments or technology Access Fee after termination of this agreement if IntriCon stops selling Base Product Units, and/or Basic Product Units incorporated into Enhanced Products. + + (a) Dynamic Hearing must return all original media and documentation and all copies thereof relating to IntriCon's Technology and Confidential Information provided to Dynamic Hearing from IntriCon and all associated documents supplied under this Agreement to Dynamic Hearing from IntriCon under Dynamic Hearing's possession, custody control; + + (b) on IntriCon's request, Dynamic Hearing must procure one of its directors to certify (by way of statutory declaration) that it has complied with its obligations under clause 11.7(a). + + + + + + + + 12.1 Any notice, demand, consent or other communication (Notice) given or made under this Agreement: + + + + + + + + + + + + + + 12.2 This Agreement contains the entire agreement between the parties with respect to its subject matter and supersedes all prior agreements and understandings between the parties in connection with such subject matter. 12.3 No amendment or variation of this Agreement is valid or binding on either party unless made in writing and executed by both parties. 19 + +12.0 General Provisions + + (a) must be in writing and signed by a person duly authorized by the sender; + + (b) must be delivered to the intended recipient by prepaid post (or, if posted to an address in another country, by registered airmail or private air courier) or by hand or fax to the address or fax number below or the address or fax number last notified by the intended recipient to the sender: + + (i) to Dynamic Hearing: Chief Executive Officer 2 Chapel Street, Richmond, VIC 3121 AUSTRALIA Fax :+613 8420 8599 (ii) to IntriCon: President 1260 Red Fox Road Arden Hills, Minnesota 55112 United States Fax: +651 636 9503 + + (c) will be taken to be duly given or made: + + (i) in the case of delivery in person, when delivered; + + (ii) in the case of delivery by post, two Business Days after the date of posting (if posted to an address in the same country) or seven Business Days after the date of posting (if posted to an address in another country); and + + (iii) in the case of fax, on receipt by the sender of a transmission control report from the dispatching machine showing the relevant number of pages and the correct destination fax machine number or name of recipient and indicating that the transmission has been made without error, but if the result is that a Notice would be taken to be given on a day that is not a Business Day in the place to which the Notice is sent or is later than 4:00pm (local time) it will be taken to have been duly given or made at the commencement of business on the next Business Day in that place. + + + + + + 12.4 Any provision of this Agreement which is unenforceable or partly unenforceable is, where possible, to be severed to the extent necessary to make this Agreement enforceable, unless this would materially change the intended effect of this Agreement. 12.5 No failure to exercise or any delay in exercising any right, power or remedy by a party operates as a waiver. A single or partial exercise of any right, power or remedy does not preclude any other or further exercise of that or any other right, power or remedy. A waiver is not valid or binding on the party granting that waiver unless made in writing. 12.6 IntriCon may not assign or transfer any of its rights or obligations under this Agreement without the prior written consent of Dynamic Hearing. Likewise, Dynamic Hearing may not assign or transfer any of its rights or obligations under this Agreement without the prior written consent of IntriCon. 12.7 This Agreement may be executed in any number of counterparts. All counterparts together will be taken to constitute one instrument. 12.8 This Agreement is governed by the laws of Victoria, Australia and the parties submit to the jurisdiction of the courts of Victoria, Australia. The 1980 United Nations Convention on Contracts for the International Sale of Goods does not apply to this Agreement. + + 20 + + DYNAMIC HEARING PTY LTD INTRICON CORPORATION /s/ Elaine Saunders /s/ Mark S. Gorder Printed Name: Elaine Saunders Printed Name: Mark S. Gorder Title: CEO Title: President & CEO Dated: July 20, 2008 Dated: July 16, 2008 + + + + + + EXHIBIT A + + 21 + + Technology DSP FrameWorkTM means DSP software implementing program switching, volume control, reading and writing programs, program beeps, and battery monitoring. ADRO® Technology means the invention described in patent application PCT/AU99/00076 which is the subject of the following patents and patent applications: AU761865 EP11172020 US 6,731,767 CA 2,361,544 JP 2000-597976 and 32 channel ultra-low-delay ADRO ® amplification the subject of Patent application US11/283540. + + Note that Dynamic Hearing does not have rights to ADRO for electrical stimulation of the auditory system and that the rights to ADRO for electrical stimulation are thus explicitly excluded from this Agreement. Wide Dynamic Range Compression Technology means digital signal processing technology that provides level-dependent amplification of the input signal in multiple frequency bands. Adaptive Directional Microphone Technology means the technology that is the subject of Australian Patent Application 2004310722 entitled "Adaptive Directional Systems." Fixed Directional Microphone Technology means digital signal processing technology that implements a preferential fixed response to sound from a forward direction. + + + + + + + + 22 + + Omni-Directional Microphone Technology means digital signal processing technology that implements a fixed response to sound from all directions. + + The Adaptive Directional Microphone Technology, Fixed Directional Microphone Technology and Omni-Directional Microphone Technology are collectively known as the Microphone Technology. + + Single-channel Noise Reduction Technology means digital signal processing technology that reduces the output signal level by an amount related to the internal noise level in multiple frequency bands. + + Multi-channel Noise Reduction Technology means digital signal processing technology that reduces the output signal level by an amount related to the internal noise level in multiple frequency bands. + + Active Feedback Cancellation Technology means the technology of the subject of US patent 6876751. Oscillation Detection Technology means the technology of the subject of United States Patent 7302070. Oscillation Suppression Technology means digital signal processing technology that reduces the maximum gain temporarily, in an individual frequency band, when a sustained oscillation is detected in that band as more particularly described in European Patent Application 04734786.9 entitled "Oscillation Suppression". + + (The Active Feedback Cancellation Technology, Oscillation Detection Technology a n d Oscillation Suppression Technology are collectively known as the Feedback Technology). + + Datalogging Technology means software that allows recording of events occurring during use of the device to non-volatile memory. + + Dynamic Display is a feature that allows parameters of each DSP module to be accessed and displayed in real time without interrupting normal operation of the device. + + Environmental Noise Reduction means digital signal processing that suppresses environmental noise. + + + + + + EXHIBIT B HEARING AID DESIGNER SOFTWARE + + 23 + + Software The Hearing Aid DesignerTM is software comprising the DSP Software, the Manufacturers' Toolkit, the designCOMTM applications programming interface, and source code sufficient to enable the development and integration of new DSP modules by the Licensee. (DSP Software means the embedded software that implements the Technology on the DSP Platform.) Library Software means the designCOM software that runs on the Applications Software Platform to communicate with, and configure, the DSP Software on the DSP Platform, and the ADROpredict software that provides initial estimates of the ADRO fittings for a given audiogram and comfortable level measures. Manufacturers' Toolkit means the manufacturing software that allows configuration and calibration of Products. Unless expressly specified in this Exhibit, Dynamic Hearing will have no obligation to provide updates or revisions to, or new versions of, any software. (Collectively, the above software is known as the Hearing Aid Designer SoftwareTM). Applications Software Platform + +The Applications Software Platform for Library Software is: Windows 2000, Windows XP, or Windows Vista operating system running on a Personal Computer connected to the Hearing Aid via a HiPro, or NOAHLink interface device. + + + + + + EXHIBIT C Dynamic Hearing's Identified Customers GN RESOUND GROUP and INTERTON ELECTRONIC HÖRGERÄTE GMBH Existing License Agreement RION CO. LTD. Existing License Agreement SONIC INNOVATIONS INC. Existing License Agreement AUDIO CONTROLE INC. Existing License Agreement EARLENS CORPORATION Existing License Agreement AUSTRALIA HEARS PTY LTD Existing License Agreement + + + + + + 24 + + AMERICA HEARS INC. Existing License Agreement VITASOUND AUDIO INC. Existing License Agreement SONOMAX HEARING HEALTH INC. Existing License Agreement PANASONIC Commercial negotiations underway \ No newline at end of file diff --git a/full_contract_txt/IOVANCEBIOTHERAPEUTICS,INC_08_03_2017-EX-10.1-STRATEGIC ALLIANCE AGREEMENT.txt b/full_contract_txt/IOVANCEBIOTHERAPEUTICS,INC_08_03_2017-EX-10.1-STRATEGIC ALLIANCE AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..d2e7e345eff888280cd3afb85db6909dd9b47bf0 --- /dev/null +++ b/full_contract_txt/IOVANCEBIOTHERAPEUTICS,INC_08_03_2017-EX-10.1-STRATEGIC ALLIANCE AGREEMENT.txt @@ -0,0 +1,225 @@ +Exhibit 10.1 Text Marked By [* * *] Has Been Omitted Pursuant To A Request For Confidential Treatment And Was Filed Separately With The Securities And Exchange Commission. STRATEGIC ALLIANCE AGREEMENT Effective Date: April 17, 2017 THIS STRATEGIC ALLIANCE AGREEMENT (this "Agreement"), is entered into by and between Lion Biotechnologies, Inc., with a place of business located at 999 Skyway Road, Suite 150, San Carlos, CA 94070 ("LBIO"), and The University of Texas M. D. Anderson Cancer Center, with a place of business located at 1515 Holcombe Blvd., Houston, TX 77030 ("MD Anderson"), a member institution of The University of Texas System ("System"), as of the date set forth above (the "Effective Date"). MD Anderson and LBIO are hereinafter individually referred to as a "Party" and are collectively known as the "Parties". WHEREAS, as a comprehensive cancer research, treatment, and educational center, MD Anderson undertakes research and experimental activities in a variety of disciplines; and WHEREAS, the Parties hereby wish to establish a collaboration ("Collaboration") with respect to the performance of one or more research studies to be conducted pursuant to this Agreement (each such study, a "Study", and collectively the "Studies", and the activities to be performed with respect to the Studies collectively, the "Research"). NOW, THEREFORE, in consideration of the mutual covenants contained herein, the receipt and sufficiency of which are hereby acknowledged, LBIO and MD Anderson hereby agree to be legally bound as follows: 1. Governance. 1.1 Joint Steering Committee. The Parties will establish a joint steering committee ("JSC") of equal representation, comprised of three members from each Party, with the members of each Party collectively having one vote on all matters to be decided upon by the JSC. Each Party can appoint and replace its members in the JSC at its own discretion through timely written notice to the other Party. The Principal Investigators for each Study (as defined hereinafter) shall attend each JSC meeting, except in the event of exigent circumstances that do not permit such attendance. 1.2 JSC Meetings. The JSC will have meetings (either in person, by teleconference or via electronic means) at least quarterly. At least one meeting per year will be conducted in person or by videoconference (including the kick-off meeting), with the location alternating between a site a selected by LBIO and a site selected by MD Anderson. LBIO will choose the location of the first such in-person meeting. Subject to Section 1.4 below, the JSC will decide on matters by unanimous vote; provided, however, that no action may lawfully be taken at any meeting unless at least two members from each Party (including for this purpose any proxy member appointed as provided below) are present at the meeting. If a member of the JSC is unable to attend a meeting, he or she may appoint, in writing, a proxy to participate and vote in his or her stead. + + 1 + + + + + + + + 1.3 JSC Responsibilities. The main task of the JSC will be to oversee the Collaboration. In order to achieve the objectives of the Collaboration, the JSC will oversee each Study under the Collaboration. The JSC will provide technical, scientific, clinical, and regulatory guidance regarding the Studies and will be responsible for monitoring progress of the Studies. In addition, the JSC will be responsible for coordinating resolution of problems arising in the Studies or in the Collaboration as a whole. Additional members can be invited by the JSC on a case by case basis should discussion of certain topics require so; provided, that such members will be subject to obligations of confidentiality and non-use at least as strict as those set forth in Section 5 below. 1.4 Dispute Resolution. Decisions regarding Study design, changes and/or additions to the initially-agreed Protocols must be unanimous, with each Party exercising one vote each, and in the absence of such unanimity the status quo shall be maintained. For all other matters before the JSC, a unanimous decision, with each Party exercising one vote, is required; provided, that, if unanimity cannot be achieved regarding such other matters, then LBIO's chief executive officer may make the decision on behalf of the JSC, provided that LBIO's chief executive officer will first make a good faith effort to consult with a designated executive at MD Anderson to resolve such matter. 2. Performance of Studies. 2.1 Studies. (a) During the Term (as defined below), LBIO and MD Anderson may periodically agree to collaborate with respect to the performance of one or more Studies. In connection with each Study, the Parties shall execute, as applicable, a Study-specific clinical trial agreement or a pre-clinical work order where a clinical trial is not being conducted (each, a "Study Order"). Study Orders shall be numbered sequentially and, when executed, appended to this Agreement and made a part hereof. The first three Study Orders, when completed, will be incorporated into this Agreement as Exhibit I, Exhibit II, and Exhibit III, and the Studies that are the subject of such Study Orders are also referred to herein as the "Initial Studies". Each Study Order shall detail the specifics of the Study to be performed under such Study Order including (i) a detailed Study-specific protocol ("Protocol") that will be developed jointly by the Parties working together in good faith and (ii) any Study-specific resources or support to be provided by LBIO, including any financial consideration ("Collaboration Funding", but excluding financial support associated with the Initial Studies to the extent addressed in Section 4 of this Agreement). Any revisions or amendments to a Study Order or Protocol shall be implemented, if at all, solely in accordance with the terms of the relevant Study Order and shall be subject to the approval of the JSC. The Parties acknowledge and agree that MD Anderson will be the "sponsor" of the Initial Studies that are clinical studies, as defined at 21 C.F.R. §§ 50.3(f) and 312.3(b), and will be the holder of the investigational new drug applications (INDs) submitted to the FDA (as defined hereinafter) for such Initial Studies. (b) In the event of any conflict of any terms of this Agreement and the terms of a Study Order, the terms of this Agreement shall govern, unless the Study Order specifically and expressly supersedes this Agreement with respect to a specific term, and then only with respect to the particular Study Order and specific term. If there is any discrepancy or conflict between the terms contained in a Protocol and this Agreement and/or the relevant Study Order, the terms of the Protocol shall govern and control with respect to clinical matters and the terms of this Agreement and/or the relevant Study Order shall govern and control with respect to all other matters (e.g., legal and financial matters). + + 2 + + + + + + + + 2.2 Investigators. (a) Principal Investigator. Each Study Order will identify the individual that will serve as the "Principal Investigator" for the relevant Study at MD Anderson and shall be responsible for MD Anderson's administration and supervision of its portion of such Study. If the originally named Principal Investigator becomes unable or unwilling to continue a Study for any reason, MD Anderson shall propose a substitute Principal Investigator with comparable qualifications within two business days of MD Anderson becoming aware of such event. If the proposed candidate is not available or is not acceptable to LBIO, LBIO may terminate the applicable Study in accordance with Section 8.3(ii). (b) MD Anderson and Principal Investigator may appoint one or more collaborating physicians ("Sub-Investigators") to participate in a Study. Such Sub-Investigators shall work under the supervision of, shall report to and be the sole responsibility of Principal Investigator, and Principal Investigator and MD Anderson shall each ensure that all Sub-Investigators undertake all activity related to the Study in accordance with the terms of this Agreement, the applicable Study Order, and the Protocol. (c) On a Study Order-by-Study Order basis, in the event that a Principal Investigator leaves or is removed from MD Anderson (or is otherwise unwilling or unavailable to direct the applicable Study in accordance with this Agreement and the applicable Study Order), then MD Anderson shall, as soon as practicable but in any event within two (2) business days of such event, provide written notice of such event to LBIO. Any subsequently appointed principal investigator must be approved, in writing in advance, by LBIO and such new principal investigator shall be required to agree to all the terms and conditions of the applicable Study Order and this Agreement and to sign each such document as evidence of such agreement (although failure to so sign will not relieve such new principal investigator from abiding with all the terms and conditions of the applicable Study Order and this Agreement). If LBIO does not approve of the new principal investigator, or the new principal investigator does not sign this Agreement, then LBIO may terminate the applicable Study Order in accordance with Section 8.3(ii). 2.3 Performance; Compliance with Law. (a) MD Anderson shall, and shall cause each of its employees, agents, contractors, and subcontractors performing Research activities or other obligations under this Agreement, including the Principal Investigator (collectively, "Representatives") to, conduct such activities, and use, store and handle all materials used in the performance of activities under this Agreement and each Study Order, or cause the same to be done, in accordance with (i) all applicable laws, regulations, and guidelines, including, to the extent applicable, the Federal Food, Drug, and Cosmetic Act ("FFCDA"); the anti-kickback and related provisions of the Social Security Act; the Public Health Services Act; the regulations promulgated by the Food and Drug Administration ("FDA"), including 21 C.F.R. Parts 50, 56, and 58, and, with respect to clinical Studies, the requirements of the Statement of Investigator, FDA Form 1572 (as described in 21 312.53), the terms of which are incorporated by reference into any Study Order pertaining to a clinical Study (and the Principal Investigator for any such clinical Study shall complete, sign, and deliver a Form 1572 to LBIO prior to the commencement of such Study); the United States Health Insurance Portability and Accountability Act of 1996, as amended by the HITECH Act, including the Standards for Privacy of Individually Identifiable Health Information; the EU Data Protection Directive; and all other applicable privacy, security and data protection laws (collectively, this sub-clause (i), "Laws"), and, as applicable, the quality standards of "Good Clinical Practice" (which term shall mean generally accepted good clinical practices including those set out in the current version of the Declaration of Helsinki and the International Conference on Harmonization Guidelines for Good Clinical Practice in force from time to time and FDA's most recent guidance and regulations concerning current Good Clinical Practice), (ii) the provisions of this Agreement (including each applicable Study Order and Protocol), and (iii) all written instruction from LBIO, as well as MD Anderson's internal policies and procedures to the extent they do not conflict with the foregoing subsections (i) and (ii). + + 3 + + + + + + + + (b) LBIO is a United States corporation subject to the provisions of the Foreign Corrupt Practices Act (the "FCPA"). Under the FCPA it is unlawful to pay or to offer to pay anything of value, directly or indirectly, to foreign government officials, government employees, political candidates, or political parties, or to persons or entities who will offer or give such payments to any of the foregoing, in order to obtain or retain business or to secure an improper commercial advantage for LBIO. MD Anderson shall not, and MD Anderson shall ensure that its Representatives do not, take or permit any action, including paying or transferring anything of value, directly or indirectly, to any official or other person to influence any decision to obtain or retain business or gain an advantage in the conduct of business, or to induce such official or other person to perform a function in violation of any Laws, that will either constitute a violation under, or cause LBIO to be in violation of, the provisions of the FCPA or applicable local bribery and corruption Laws. (c) MD Anderson shall register each Study that is a clinical study with the relevant governmental authorities and government websites (including http://www.clinicaltrials.gov) and make all updates as required under the Laws, and shall identify LBIO as a financial collaborator (e.g., a "Collaborator" for the purposes of www.clinicaltrials.gov) in such registrations. (d) To the extent required by Law, MD Anderson and Principal Investigator shall be responsible for ensuring that the Research and all applicable documents, including any Protocol and informed consent and authorization forms are properly approved by applicable regulatory authorities and an Institutional Review Board ("IRB"). As may be required by Law, and with respect to any given applicable Study hereunder, MD Anderson and Principal Investigator shall further be responsible for making all reports and obtaining the continuing approval from the applicable IRB. Prior to making any submission to an IRB with respect to any given applicable Study hereunder (including a Protocol, and information to be provided to potential Study subjects including the informed consent and HIPAA authorization, and as applicable, the Case Report Forms ("CRFs") or supporting source documentation), MD Anderson shall provide the proposed submission to LBIO for LBIO's review and approval. MD Anderson shall promptly further provide LBIO with documentation of the IRB's initial and continuing review and approval with respect to any given applicable Study hereunder, as well as any other communications and/or interactions with the IRB (summaries in the case of oral interactions and/or communications) that is related to or which may impact the Research, prior to the commencement of the Research and promptly thereafter. In the event MD Anderson's IRB requires changes in any Protocol, informed consent or related forms for a Study after the Effective Date of the applicable Study Order, LBIO shall be advised in advance and all such modifications must be approved in advance and in writing by the JSC under this Agreement. MD Anderson and Principal Investigator shall not modify a Study described in a Protocol without the prior written approval of the JSC. + + 4 + + + + + + + + (e) MD Anderson and/or Principal Investigator shall be responsible for reporting and tracking of all adverse events with respect to a Study ("AEs") in compliance with all Laws and each applicable Protocol and Principal Investigator shall be responsible for updating all AEs, including any expedited safety reports. MD Anderson and LBIO will share information with each other of any findings that may impact the safety of a Study Drug including as Study Drug safety may adversely affect the health and safety of any Study subject, influence the conduct of a Study, alter an IRB's approval to continue a Study, or affect the willingness of a Study subject to continue participation in the Study. Principal Investigator and MD Anderson shall notify LBIO within twenty-four (24) hours after learning of any serious AE and any special situation report (both as defined in the applicable Protocol) incurred during or as the result of the Study, and provide a written confirmation report of such individual serious adverse event and special situation report promptly thereafter, as well as a monthly listing of all such serious adverse events and special situation reports, by electronic mail to: lionbiosafety@lionbio.com. LBIO shall have the ability to request additional information related to any such safety finding, serious AE or special situation report, if applicable, thereafter. Additionally, MD Anderson and/or Principal Investigator will promptly provide LBIO with all information in their possession or control as may be needed to assist LBIO in the identification and resolution of problems or unexpected occurrences involving the Study Drug or its use in the Study. 2.4 Facilities. MD Anderson shall cause its Representatives to perform the Research only at the facility(ies) identified in the applicable Study Order (the "Facility(ies)"). MD Anderson may not utilize any facility, other than the Facility(ies), for performing any portion of the Research without obtaining LBIO's prior written consent to do so. MD Anderson shall maintain, or cause to be maintained, the Facility(ies), all personal property, equipment, machinery, excipients, materials, systems, intangibles, intellectual property and contract rights in use at the Facility(ies) free of defects, except for defects attributable to wear and tear consistent with the age and usage of such assets, and except for such defects as do not and will not, in the aggregate, materially impair the ability to use such assets in connection with the Research. 2.5 No Inducement. MD Anderson agrees that LBIO's support of the Research is not conditioned on the value or volume of business generated between the Parties and is not being provided or received as a reward or in exchange for recommending, prescribing, dispensing, purchasing, supplying, selling, administering, referring, arranging for, or ordering any product that is manufactured, sold, or distributed by LBIO, or to induce recommending, prescribing, dispensing, purchasing, supplying, selling, administering, referring, arranging for, or ordering any product that is manufactured, sold, or distributed by LBIO in the future. + + 5 + + + + + + + + 3. Materials. 3.1 Study Materials and Equipment. Unless otherwise provided by this Agreement (including as expressly set forth in a Study Order), Principal Investigator shall conduct the Research with MD Anderson's materials and equipment. MD Anderson shall be responsible for the acquisition, purchasing, replacement, repair, maintenance, and calibration, to the extent applicable, of all materials and equipment, unless otherwise provided by this Agreement (including as expressly set forth in a Study Order), necessary for MD Anderson to conduct the Research. LBIO shall have no role, responsibilities, and or liability with regard to any materials and equipment necessary for MD Anderson and Principal Investigator to conduct the Research, except as provided in this Agreement (including as expressly set forth in a Study Order). 3.2 Informed Consent. MD Anderson shall ensure that all patients from whom Patient Materials (as defined below) were obtained, provided their informed consent and authorization for MD Anderson's and Principal Investigator's transfer of the applicable Patient Materials, data, and information to LBIO as called for in any applicable Study Order, LBIO's use of Patient Materials, data, and information, and LBIO's further transfer of the Patient Materials, data, and information to governmental or regulatory authorities and other third parties, as applicable. Upon LBIO's request, MD Anderson shall provide LBIO with copies of the patient informed consent and authorization forms for LBIO to confirm the provisions of this Section 3.2. 3.3 LBIO Materials. (a) "Material" shall mean the tangible materials, Patient Materials (as defined below) and equipment described in an exhibit to a given Study Order (such exhibit, if provided, the "Materials Exhibit"). The Parties will amend a given Materials Exhibit from time to time as additional Materials are provided by or to LBIO in connection with a given Study Order. The Parties shall provide, or cause to be provided, Materials, and rights with respect to associated intellectual property, to each other in the quantities described in the applicable Study Order (or if no such quantities are described, in reasonable quantities) and at the times set forth in the applicable Study Order (or if no such times are set forth, as soon as reasonably practicable and necessary after the effective date of the applicable Study Order). All Materials supplied to MD Anderson by or on behalf of LBIO shall, as between LBIO and MD Anderson, remain the exclusive property of LBIO. (b) THE MATERIALS PROVIDED TO INSTITUTION BY LBIO ARE PROVIDED BY LBIO ON AN "AS IS" BASIS. LBIO HEREBY DISCLAIMS ANY WARRANTIES, EXPRESS OR IMPLIED, CONCERNING THE MATERIALS, INCLUDING ANY WARRANTIES OF TITLE, INFRINGEMENT, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. NO OFFICER, EMPLOYEE, AGENT OR REPRESENTATIVE OF LBIO HAS ANY AUTHORITY TO BIND LBIO TO ANY AFFIRMATION, REPRESENTATION OR WARRANTY CONCERNING THE MATERIALS, EXCEPT AS SET EXPRESSLY FORTH HEREIN. THE MATERIALS PROVIDED TO LBIO BY INSTITUTION ARE PROVIDED BY INSTITUTION ON AN "AS IS" BASIS. INSTITUTION HEREBY DISCLAIMS ANY WARRANTIES, EXPRESS OR IMPLIED, CONCERNING THE MATERIALS, INCLUDING ANY WARRANTIES OF TITLE, INFRINGEMENT, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. NO OFFICER, EMPLOYEE, AGENT OR REPRESENTATIVE OF INSTITUTION HAS ANY AUTHORITY TO BIND INSTITUTION TO ANY AFFIRMATION, REPRESENTATION OR WARRANTY CONCERNING THE MATERIALS, EXCEPT AS SET EXPRESSLY FORTH HEREIN. + + 6 + + + + + + + + (c) The Materials provided by or on behalf of LBIO shall only be used as necessary to conduct the Research, in accordance with the Research Plan, this Agreement, all written instructions from LBIO and all Laws and not for any other uses or activities whatsoever, including in connection with research for any third person or entity. MD Anderson shall maintain control over Materials received by it from or on behalf of LBIO hereunder and shall not transfer any portion of such Materials to any third party for any purpose other than the purposes of performing its obligations under, and in accordance with, this Agreement, the Research Plan, all written instructions from LBIO and all Laws. MD Anderson shall maintain complete and accurate records relating to the disposition of all Materials provided by or on behalf of LBIO. MD Anderson shall return to LBIO all unused supplies of Materials provided by or on behalf of LBIO in accordance with Section 8.4 or at LBIO's earlier request. MD Anderson shall have no right to provide samples of the Materials provided by or on behalf of LBIO (or products created thereby) to any person or entity. 3.4 Patient Materials. "Patient Materials" shall mean those certain biological materials, and derivatives thereof and related patient data and information, received from individual patients and described in an applicable Materials Exhibit. Without limiting Section 3.3, MD Anderson shall further handle, transport, use and store Patient Materials exclusively at the Facility(ies) or otherwise in accordance with this Agreement, unless otherwise requested by LBIO in writing, and at all times strictly in accordance with (a) MD Anderson's standards of security and confidentiality and (b) all applicable privacy, security and data protection Laws (including the United States Health Insurance Portability and Accountability Act of 1996, as amended by the HITECH Act, including the Standards for Privacy of Individually Identifiable Health Information, and the EU Data Protection Directive). + + 7 + + + + + + + + 4. Certain Financial Matters. 4.1 Initial Funding. LBIO agrees to commit funding in an amount not to exceed $14,211,864.00 for the performance of the Studies during the Term (collectively, "Initial Funding"), with the Initial Funding specifically allocated as follows: (a) $[* * *] for an upfront payment, and a minimum of $[* * *] for enrollment and treatment of a minimum of 40 patients in the Study described in Exhibit I (i.e., the Minimum Enrollment Target as defined in Exhibit 1) or up to $[* * *] (an "Individual Study Budget") for enrollment and treatment of up to 60 patients in the Study described in Exhibit I (i.e., the Maximum Enrollment Target as defined in Exhibit 1); (b) $[* * *] (which shall also be considered an Individual Study Budget) for enrollment, manufacturing of product, and treatment of 30 patients in the Study described in Exhibit II; and (c) $[* * *] for the Study described in Exhibit III. LBIO shall pay the Initial Funding in accordance with Section 4.3. For clarity, the Initial Funding is Collaboration Funding. MD Anderson agrees that all costs of this Collaboration, with the sole exceptions of any costs to supply clinical-grade aldesleukin and 4-1BB agonist for use in the expansion of tumor infiltrating lymphocytes ("TILs"), and in the case of aldesleukin, for use in the treatment of patients, are included in the Initial Funding. Subject to the foregoing exceptions, MD Anderson shall be solely responsible for any costs it incurs in performing the Studies that are in excess of the Initial Funding. 4.2 Collaboration Funding Generally. MD Anderson shall use the Collaboration Funding solely to conduct the applicable Study and MD Anderson shall be responsible for managing cash flow between payments. It is understood and agreed that the Collaboration Funding shall cover all administrative, IRB review, patient recruitment, and all other fees, costs and expenses of MD Anderson and any of its Representatives for the conduct of the Studies or the provision of equipment or services to facilitate the Studies, and that no other form of compensation shall be paid to MD Anderson in connection with the Studies except as otherwise may be specifically and mutually agreed upon by the Parties in writing. 4.3 Payments. LBIO shall pay the Initial Funding to MD Anderson as follows. An upfront payment of $[* * *] (the "Upfront Payment") shall be invoiced by MDACC on the Effective Date. The remainder of the Initial Funding shall be paid as follows: (a) In the event that the Study Order covers the performance of a clinical trial, funding shall be invoiced based on Study patient enrollment as follows, based on the Maximum Enrollment Target as defined in each Study Order: + +Milestone (on Study Order-by-Study Order basis) + + Payment (% of the Individual Study Budget) to be provided in connection with such Study Order* Enrollment of [* * *]% of the target patient enrollment as set forth in the applicable Protocol [* * *]% + +Enrollment of [* * *]% of the target patient enrollment as set forth in the applicable Protocol [* * *]% + +Enrollment of [* * *]% of the target patient enrollment as set forth in the applicable Protocol [* * *]% + +Enrollment of final patient as set forth in the applicable Protocol [* * *]% Receipt by LBIO of both (a) the final clinical study report and (b) all raw clinical data (anonymized and without including any identifying information) + + [* * *]% + + *With respect to Exhibit 1, the Individual Study Budget shall be the one associated with the Minimum Enrollment Target (as defined in Exhibit 1), and in the event that the Parties move to the Maximum Enrollment Target (as defined in Exhibit 1) then this table shall be applied to the incremental additional patients as if the incremental additional patients constitute their own protocol/budget. For example, if LBIO decides to add ten (10) additional patients to the clinical study in Exhibit 1, each patient will be accrued at $[* * *] per patient, and LBIO will be invoiced for percentage enrollment of these ten (10) patients based on the table above. + + 8 + + + + + + + + (b) In the event that the Study Order covers activities other than the performance of a clinical trial, a payment schedule will be set forth in the relevant Study Order. (c) Notwithstanding the foregoing, LBIO may suspend payment if, in LBIO's reasonable opinion after review of the Reports (as defined below), MD Anderson has not been performing the Research diligently and in the manner agreed upon herein. (d) Upon the occurrence of one of the milestones identified in the table in Section 4.3(a), or described in an applicable Study Order for a non-clinical Study according to Section 4.3(b), MD Anderson shall invoice LBIO for the related payment amount. In each case, invoices shall be itemized, including by reference to Study Order title, and otherwise shall include such supporting documentation as LBIO may reasonably request. LBIO shall pay all undisputed invoices within thirty (30) days of receipt of such invoice. (e) If the Study described in Exhibit II is not commenced, the portion of the Upfront Payment that would have been applied to that Study ($[* * *]) will be credited by MD Anderson towards the Studies described in Exhibit I and Exhibit III. (f) All terms and payments of compensation, benefits, and any other conditions of engagement, including payment of taxes, for any person working with Principal Investigator and any other support staff who may be used in the performance of a Study (including any Sub- Investigator) shall be solely a matter between MD Anderson and such individuals. Principal Investigator and any MD Anderson personnel shall not be deemed to be employees of LBIO or entitled to any benefits offered by LBIO to LBIO's employees. 5. Records and Reports. 5.1 Records. MD Anderson shall, and shall cause its Representatives to, keep appropriate records of the Research, including laboratory notebooks, in accordance with MD Anderson policies and all Laws, sufficient to properly document the results of the Research and otherwise sufficient to determine identity and dates of inventorship of Inventions (as defined in Section 7.1(a)). MD Anderson shall make such records available to LBIO upon reasonable notice during MD Anderson's normal business hours. LBIO may use the records and Reports (as defined below) for any purpose, including interactions and communications with, and/or submissions and filings to the applicable governmental or regulatory authorities. + + 9 + + + + + + + + 5.2 Reports. MD Anderson, through the Principal Investigator, shall provide to LBIO (a) interim written reports regarding the Research, no less than once per calendar quarter, and (b) on Study-by-Study basis, (i) a draft final written Study report within thirty (30) days after completion (or earlier termination) of each such Study and (ii) a final written Study report within thirty (30) days after receipt of LBIO's comments to the draft final written Study report with respect to each such Study, which shall be given by LBIO not later than thirty (30) days after LBIO's receipt of the draft final Study report (collectively, the "Reports"); provided, that, if this schedule of reports differs from the reporting obligations provided in a Study Order, the schedule listed in the Study Order shall be followed. LBIO shall own all Reports and data compilations resulting from the Research, excluding the physical original lab notebooks themselves (but not excluding the data and data compilations contained therein, which shall be deemed to be owned by LBIO) and any patient medical records. 5.3 Electronic Transfer. In addition to MD Anderson's reporting obligations under Section 5.2, no less than once per calendar quarter, MD Anderson shall provide to LBIO an electronic transfer of all data and results (including all raw data and process data) generated through the performance of the Research. 5.4 Other Notifications. During the performance of the Research, MD Anderson shall notify LBIO promptly if the Research reveals any unexpected result or any accident or harm occurs, and shall also comply with any safety notifications required under each Study Order. + + 10 + + + + + + + + 6. Confidentiality and Publications. 6.1 Confidential Information. (a) "Confidential Information" means any proprietary or confidential information, technical data, trade secrets or know-how, including research, product plans, products, services, customer lists and customers, markets, software, developments, inventions, processes, formulas, technology, designs, drawings, engineering, marketing, distribution and sales methods and systems, sales and profit figures, finances and other business information disclosed by a Party or its Representatives ("Disclosing Party") to the other Party or its Representatives ("Receiving Party"), whether in writing, orally or by drawings or inspection of documents or other tangible property; provided that: (i) Confidential Information shall not include any of the foregoing items to the extent that (1) they are or have become publicly known and made generally available through no wrongful act of Receiving Party, (2) they were known to Receiving Party prior to disclosure by Disclosing Party, as evidenced by pre-existing written records promptly provided to Disclosing Party by Receiving Party, (3) they were disclosed to Receiving Party without an obligation of confidentiality by a third party having a lawful right to make such disclosure, or (4) they were developed by Receiving Party without use or aid of Disclosing Party's Confidential Information, and (ii) the results of the Research (including the contents of each Report and any Inventions) shall be deemed to be LBIO's Confidential Information, subject to MD Anderson's right to publish any Research data and information as set forth in and in accordance with Section 6.4, MD Anderson's right to use any Inventions (and any Work) as set forth in and in accordance with Section 7.2, and MD Anderson's right to use any Research data and information for internal research, academic, and non-commercial patient care purposes prior to publication or public disclosure and for any purpose thereafter. LBIO shall be deemed the Disclosing Party with respect to such results of the Research, regardless of the Party initially disclosing the same. (b) Receiving Party shall take reasonable steps to ensure that Disclosing Party's Confidential Information (as defined in Section 6.1(a)) is maintained in confidence, used only for the purpose of exercising rights and performing obligations under this Agreement, and disclosed only to persons and/or entities authorized under this Agreement. As used herein, "reasonable steps" means the steps that Receiving Party takes to protect its own, similar confidential and proprietary information, which shall not be less than a reasonable standard of care. Receiving Party further agrees not to reveal, publish or otherwise disclose Disclosing Party's Confidential Information to any third party without the prior written consent of Disclosing Party as described in Section 6.4 below, however, Receiving Party is permitted to disclose Confidential Information obtained under the terms of this Agreement to its Representatives on a need-to-know basis related to the exercise of rights and performance of its obligations under this Agreement and only if such Representatives are informed by Receiving Party of the confidential nature of such information and are bound by confidentiality obligations consistent with those set forth in this Section 6.1. Receiving Party shall ensure that its Representatives having a need- to-know Disclosing Party's Confidential Information observe these obligations of confidentiality. These obligations of confidentiality and nondisclosure shall remain in effect after the termination or expiration of this Agreement for a period of five (5) years. + + 11 + + + + + + + + (c) Neither Party shall improperly use or disclose to the other Party or any of its directors, officers, employees or agents, any confidential information of any current or former client or other person or entity with whom such Party has an agreement or duty to keep such information confidential, and such Party shall not bring onto the premises of the other Party any such information in any medium unless consented to in writing by such client, person or entity. In the event of a Party's breach of this Section 6.1(c), the breaching Party shall ensure that the other Party may freely and fully utilize the information so disclosed for any and all purposes. 6.2 Required Disclosure of Confidential Information. (a) If Receiving Party is required by Law or court order to disclose Disclosing Party's Confidential Information, Receiving Party shall give Disclosing Party prompt written notice of such requirement such that Disclosing Party shall have the opportunity to apply for a protective order, injunction or for confidential treatment of such Confidential Information. Receiving Party shall cooperate with Disclosing Party in seeking any Disclosing Party requested protective order, injunction or confidential treatment of such Confidential Information and shall only disclose the minimal amount of such Confidential Information required under Law or court order. Notwithstanding the forgoing, any information disclosed by Receiving Party pursuant to Law or a court order shall remain Confidential Information hereunder, and may not be disclosed under any other circumstances unless and until the Confidential Information so disclosed falls into one of the exceptions set forth in subclauses (1) through (4), inclusive, in Section 6.1(a). (b) If Principal Investigator is a member of or affiliated with any committee that sets formularies or develops clinical practice guidelines that could influence the prescribing of medicines or is otherwise affiliated with any other healthcare institution, medical committee, or other medical or scientific organization, Principal Investigator will inform the committee of the existence and nature of Principal Investigator's relationship with LBIO under this Agreement. Principal Investigator also agrees to disclose Principal Investigator's relationship with LBIO as needed to comply with any disclosure requirements of any healthcare institution, medical or formulary committee, or other medical or scientific organization with which Principal Investigator is affiliated and agrees to comply with any such entities' recusal or other requirements relating to the relationship with LBIO. This duty to disclose will continue during the term of this Agreement and for two years after its termination 6.3 LBIO Mandatory Disclosures. MD Anderson and Principal Investigator recognize that LBIO may be required under Law, including the Physician Payment Sunshine Act, to report to the relevant governmental or regulatory authorities or publicly disclose information related to this Agreement and/or the Research, including any payments, reimbursements, or other transfers of value made to MD Anderson or Principal Investigator. Nothing herein shall prevent LBIO from making any reports or disclosures required under Law or by a relevant governmental or regulatory authority. Moreover, nothing herein shall prevent LBIO from disclosing any information relating to this Agreement and/or the Research for the purpose of making any regulatory or other submissions, patent applications and pursuing patent prosecution. + + 12 + + + + + + + + 6.4 Publications. MD Anderson agrees to provide LBIO with a copy of any manuscript, abstract or other proposed publication or presentation relating to the Research or the Materials (a "Publication"), prior to submission thereof to a publisher or to any third party, and in any case, not less than 45 days prior to any public disclosure, for the purpose of protecting proprietary or intellectual property of LBIO that might be contained in such Publication. Following receipt of such proposed Publication, LBIO shall have the right to cause MD Anderson to (i) withhold publication or other public disclosure thereof for a period of up to 90 days in order to provide LBIO time to obtain appropriate intellectual property protection thereof, and (ii) remove any proprietary, or otherwise confidential, information of LBIO contained in such Publication (excluding Research results). In any event, MD Anderson will not disclose proprietary, or otherwise confidential, information in an "unblinded" manner when it can be done so in a "blinded" manner. In the event of any Publication (including any public presentation relating to the Research or the Materials), MD Anderson agrees to acknowledge LBIO and/or give credit to LBIO scientists, as scientifically appropriate, based on any contribution they may have made to the work which shall be in accordance with any relevant policies and guidelines of the publication, presentation forum, as well as policies and guidelines of general applicability, such as the International Committee of Medical Journal Editors recommendations. In addition, to the extent that it is legally able to do so, MD Anderson hereby grants LBIO a royalty-free right and license to use and reproduce any Publication. LBIO shall be acknowledged as a financial collaborator of the Study reported in a Publication. 6.5 Unauthorized Disclosure. Receiving Party shall be responsible for any breach of this Section 6 by any of its Representatives. Receiving Party shall take reasonable steps to ensure that unauthorized persons do not gain access to Disclosing Party's Confidential Information. Receiving Party shall promptly notify Disclosing Party of any unauthorized release of or access to Disclosing Party's Confidential Information. For clarity, such notice shall not remedy any breach of this Agreement resulting from such unauthorized release or access. 6.6 Prior CDA. This Agreement supersedes that certain Confidentiality Agreement between LBIO and MD Anderson, dated July 22, 2016 ("Prior CDA"), which is hereby terminated; provided, however, that all information disclosed or received by the Parties under the Prior CDA will be deemed Confidential Information hereunder (to the extent applicable) and will be subject to the terms and conditions of this Agreement. The Parties agree that this Agreement provides the written notice required for termination of the Prior CDA pursuant to Section 6.8 of the Prior CDA. 6.7 Publicity. LBIO shall be permitted to publicly disclose the existence of this Agreement, and the title and purpose of each clinical Study, in LBIO's electronic materials, printed materials, oral presentations, and press releases, and LBIO shall be permitted to include each clinical Study as a component of LBIO's clinical product pipeline. 6.8 Health Information. Notwithstanding anything to the contrary in this Agreement or any Study Order, all individually identifiable health information shall be treated as confidential by the Parties in accordance with all Laws governing the confidentiality and privacy of individually identifiable health information, including HIPAA, and any regulations and official guidelines promulgated thereunder, and the Parties agree to take such additional steps and/or to negotiate such amendments to this Agreement as may be required to ensure that the Parties are and remain in compliance with the HIPAA regulations and official guidance. + + 13 + + + + + + + + 7. Inventions. 7.1 Background Intellectual Property and Definitions. (a) Neither Party will, as a result of this Agreement, acquire any right, title or interest in, to, or under any Intellectual Property (as defined below) owned or controlled by the other Party or the other Party's affiliates prior to the Effective Date or developed independently of this Agreement ("Background Intellectual Property"), except for the licenses expressly granted under this Agreement. (b) "Invention" means any idea, invention or discovery, whether or not patented or patentable, that is first conceived, discovered, developed or reduced to practice by a Party in connection with this Agreement, including through MD Anderson's performance of the Research (solely or jointly with others) or that result, to any extent, from use of Confidential Information or the Study article that is the subject of a given Study, including any developments, discoveries, improvements, compositions, know-how, trade secrets, procedures, technical information, data, reports, processes, methods, devices, formulae, protocols, techniques, designs, drawings, methodologies, and biological or chemical material. (c) "Intellectual Property Rights" means any and all moral rights and intellectual property rights, including all patent rights, copyrights, trademarks, know-how and trade secrets and the rights to apply for the same. (d) "Fields" means the treatment of platinum resistant ovarian cancer, chondrosarcoma, and pancreatic ductal adenocarcinoma, and, solely for the purposes of Section 7.3(b), double refractory melanoma, such treatment being performed using TILs manufactured by MD Anderson using a 4-1BB agonist; provided that Fields shall also include the treatment of other diseases in the event that the JSC decides to amend or replace the initially-agreed clinical Protocol for the Study Order provided in Exhibit II to include the treatment of such other diseases. 7.2 Assignment of Inventions; Further Assurances. (a) MD Anderson shall promptly make full written disclosure to LBIO, shall hold in trust for the sole right and benefit of LBIO, and hereby assigns, transfers and conveys to LBIO, or its designee, all of MD Anderson's worldwide right, title and interest in and to any and all Inventions and all Intellectual Property Rights therein and relating thereto[, provided that MD Anderson shall retain the right to use any such Invention for internal research, academic, and patient care purposes]. MD Anderson further acknowledges and agrees that all original works of authorship that are made by MD Anderson (solely or jointly with others) in the performance of the Research, excluding any publication made in accordance with Section 6.4 (a "Work") and that are protectable by copyright are "works made for hire," as that term is defined in the United States Copyright Act. However, to the extent that any Work may not, by operation of any Laws, be a work made for hire, MD Anderson hereby assigns, transfers and conveys to LBIO all of MD Anderson's worldwide right, title and interest in and to such Work, including all Intellectual Property Rights therein and relating thereto, subject to MD Anderson's right to use such Work for internal research, academic, and non-commercial patient care purposes prior to publication or public disclosure. + + 14 + + + + + + + + (b) Upon the request and at the reasonable expense of LBIO, MD Anderson shall execute and deliver any and all instruments and documents and take such other acts as may be reasonably necessary to document or perfect the assignment and transfer described in Section 7.2(a) or to enable LBIO to secure its rights in the Inventions, Works and Intellectual Property Rights therein and relating thereto in any and all jurisdictions, or to apply for, prosecute and enforce Intellectual Property Rights in any and all jurisdictions with respect to any Inventions or Works, or to obtain any extension, validation, re-issue, continuance or renewal of any such Intellectual Property Right. (c) As between the Parties, and without limiting MD Anderson's assistance obligations under Section 7.2(b), LBIO shall have the sole and exclusive right to file patents covering or claiming Inventions and shall bear all costs with respect to the prosecution and maintenance thereof. In furtherance of the foregoing, the Parties shall work together in good faith to, as expeditiously as possible following the Effective Date, put in place a power of attorney granted by the System to LBIO for purposes of enabling LBIO to apply for or to pursue any application for any United States or foreign patent, trademark, copyright or other registration covering Inventions or Works assigned to LBIO hereunder in the event that LBIO is unable to secure MD Anderson's assistance in connection with the same. 7.3 Background Licenses. (a) MD Anderson hereby grants LBIO a non-exclusive, royalty free, perpetual license (with rights to sub-license) under, in and to all Background Intellectual Property that is: (a) owned by MD Anderson; (b) consists of and/or comprises the manufacturing protocol utilized by MD Anderson in the conduct of a Study; and (c) reasonably necessary to exploit (including developing, obtaining and maintaining regulatory approval for, manufacturing, or commercializing) any Invention, Study result, or Study article, or any improvement or derivative thereof, strictly limited to the Fields (collectively, the "Non-Exclusively Licensed MD Anderson Background Intellectual Property"), to the extent that such Non- Exclusively Licensed MD Anderson Background Intellectual Property does not include Third Party IP (as defined hereinafter). (b) MD Anderson also grants LBIO a non-exclusive, royalty free, perpetual license (with rights to sub-license) under, in and to any and all data generated by MD Anderson in conducting studies of TILs in double refractory melanoma outside of the Collaboration and as of the Effective Date, and LBIO shall have unrestricted rights to use such double refractory melanoma data in governmental and regulatory submissions, including submissions that may become public. 7.4 Third Party Intellectual Property. To the extent that MD Anderson controls any Background Intellectual Property that it will use in conducting a Study or manufacturing any Study article through a license agreement with a third party ("Third Party IP"), MD Anderson shall notify LBIO thereof as soon as any such Third Party IP is identified. MD Anderson shall not use any Third Party IP in performing activities under this Agreement or otherwise in connection with a Study unless and until the JSC approves the use thereof. In addition, MD Anderson shall provide such assistance as is reasonably requested by LBIO in connection with LBIO obtaining a license in and to any such Third Party IP. + + 15 + + + + + + + + 7.5 No Implied Licenses; Retained Rights. Except as explicitly set forth in this Agreement, neither Party grants any license, express or implied, under its intellectual property rights to the other Party, whether by implication, estoppel or otherwise, and each Party hereby agrees that it does not have rights under any intellectual property of the other Party that are broader than the licenses expressly granted herein. 7.6 Effectiveness. The provisions of Section 7 shall become effective upon payment by LBIO of the Upfront Payment and the approval by LBIO of the Study Orders in Exhibit I and Exhibit III. For clarity, the commencement of work, or the lack thereof, under the Study Order in Exhibit II shall have no effect upon the effectiveness of the provisions of Section 7. 8. Term and Termination. 8.1 Term. The term of this Agreement commences on the Effective Date and shall continue in effect until the later of (a) the fourth (4th) anniversary of the Effective Date, or (b) the completion or termination of the Research and receipt by LBIO of all deliverables due from MD Anderson hereunder, unless sooner terminated in accordance with the provisions of Section 2.2 or Section 9.14. 8.2 Termination. Either Party may terminate this Agreement for the material breach or default of any of the terms or conditions of this Agreement by the other Party upon thirty (30) days' written notice and the opportunity to cure during such notice period; and such termination shall be in addition to any other remedies that it may have at law or in equity. Additionally, LBIO may terminate this Agreement if MD Anderson is declared insolvent or enters into liquidation or has a receiver or an administrator appointed over all or any part of its assets or ceases or threatens to cease to carry on business, or a resolution is passed or a petition presented to any court for the winding up of the Party or for the granting of an administration order in respect of MD Anderson, or any proceedings are commenced relating to the insolvency or possible insolvency of MD Anderson. 8.3 Termination of a Study Order. LBIO may terminate a Study Order immediately upon written notice to MD Anderson if: (i) the applicable approvals, authorizations, and/or continuing reviews for a Study are not obtained or maintained; (ii) Principal Investigator is no longer available for the Study and a replacement deemed acceptable by LBIO is not provided; (iii) the Study is canceled, terminated, suspended, delayed or placed on hold for any reason; (iv) an Institutional Review Board or other review authority, including governmental or regulatory authorities, does not approve a Study or recommends the cancelation, termination, suspension, or hold of a Study for any reason; (v) immediate termination of the Study is necessary due to LBIO's evaluation of risks to Study subjects, such risks including the futility of treatment; or + + 16 + + + + + + + + (vi) MD Anderson or Principal Investigator materially breaches any obligations with respect to the Study, including failure to comply with this Agreement, the Protocol or the Study Order or any Law relevant to the Study. 8.4 Obligations upon Termination. Upon expiration or termination of this Agreement, in addition to its other obligations hereunder, including Section 5.2, MD Anderson shall return to LBIO all of its Confidential Information and all Materials or, at LBIO's option, destroy or completely delete such Confidential Information and Materials, at LBIO's option. With respect to each item of Confidential Information and Materials destroyed or completely deleted, such destruction or complete deletion shall be certified in writing to LBIO. In the event that this Agreement is terminated prior to MD Anderson's receipt of all internal approvals to commence work on the Study Orders in Exhibit I, Exhibit II and/or Exhibit III, MD Anderson shall refund the Upfront Payment to LBIO. 8.5 Effects of Termination. Termination of this Agreement by either Party shall not affect the rights and obligations of the Parties accrued prior to the effective date of termination. No termination of this Agreement, however effectuated, shall release the Parties, the Principal Investigator, or any other Representative of MD Anderson having access to Confidential Information from their respective rights and obligations under Sections 6, 7, and 9. 9. Miscellaneous. 9.1 Mutual Representations. Each Party hereto hereby represents, warrants and covenants to the other that: (a) it is duly incorporated or otherwise formed, validly existing and in good standing; (b) it has taken all necessary actions on its part to authorize the execution, delivery and performance of the obligations undertaken in this Agreement, and no other corporate or regulatory actions (e.g., obtaining permits, licenses or authorizations) are necessary with respect thereto; (c) it is not a party to, and will not become a party to, any agreement or understanding and knows of no law or regulation that would prohibit it from entering into and performing this Agreement, or that would conflict with this Agreement; and (d) when executed and delivered by it, this Agreement will constitute a legal, valid and binding obligation of it, enforceable against it in accordance with this Agreement's terms. 9.2 MD Anderson Representations. MD Anderson represents, warrants, and, to the extent applicable, covenants, that: (a) MD Anderson and all of its Representatives maintain as current the applicable licenses and permits, including medical practitioner licenses as required by the applicable national, state, and/or local licensing body and that no license or permit has been revoked, limited, suspended, or otherwise modified. (b) Neither MD Anderson nor any of its Representatives have (i) violated or caused a violation of any federal or state health care fraud and abuse or false claims statute or regulation, including the anti-kickback provisions of the Social Security Act, 42 U.S.C. § 1320a-7b(b), (ii) violated or caused a violation of any federal or state privacy or security law or regulation, including HIPAA, (iii) not been excluded or threatened with exclusion under state or federal statutes or regulations, including under 42 U.S.C. § 1320a-7 or relevant regulations in 42 C.F.R. Part 1001, or (iv) not been assessed or threatened with assessment of civil money penalties pursuant to 42 C.F.R. Part 1003, or any foreign equivalent. + + 17 + + + + + + + + (c) Neither MD Anderson nor any of its Representatives have been charged, named in an action, found liable, or convicted for conduct relating to the development or approval of, or otherwise related to the regulation of any healthcare product or the practice of medicine. (d) Neither MD Anderson nor any of its Representatives (i) have been found by the FDA or any other relevant governmental or regulatory authority to have violated any Laws, regulations or guidelines concerning the conduct of clinical investigations or related services; (ii) have been debarred, denied, or suspended by the FDA under 21 U.S.C. § 335a, disqualified or restricted by the FDA, named on any FDA list related to investigator disqualifications, restrictions, restrictions removed, or adequate assurances, or are otherwise ineligible to participate in federal procurement or non-procurement programs or any foreign equivalents of the above; and (iii) have any unresolved FDA warning letter, Form 483, or other regulatory enforcement action threatened against or issued to them; (e) MD Anderson and its Representatives will not make and have not made any untrue statement of material fact to or filed a false claim or report with any governmental or regulatory authority, or failed to disclose a material fact required to be disclosed to any governmental or regulatory authority, or have ever been investigated by the FDA, National Institutes of Health ("NIH"), Office of the Inspector General for the Department of Health and Human Services ("OIG"), Department of Justice or other comparable governmental or regulatory authority for data or healthcare program fraud. (f) There is no investigation, threat, pending, or proposed proceeding, notice, or action by a governmental or regulatory entity which could result in 9.2(a)-9.2(e) above. (g) MD Anderson has no knowledge of any facts or circumstances that may affect the accuracy or completeness of any the foregoing representations and warranties. MD Anderson is responsible for (i) requiring all of its Representatives to disclose the occurrence of 9.2(a)-9.2(f) above and (ii) reviewing on reasonable intervals all available public filings and lists to confirm that it and its Representatives are not subject to 9.2(a)-9.2(f) above. If MD Anderson becomes aware of any such facts or circumstances during the Term or otherwise determines that any representation or warranty made by it under this Agreement is no longer true, correct, or complete, MD Anderson will notify LBIO immediately, but in no case later than twenty-four (24) hours after MD Anderson becomes aware of such facts, circumstances, or determination. MD Anderson shall immediately remove any of its Representatives from performing activities relating to the Research to which the facts, circumstances, or determination relate. Any such facts, circumstances, or determinations shall be grounds for termination of this Agreement. (h) Each of MD Anderson's Representatives is under a written obligation to assign to MD Anderson all Inventions and any Intellectual Property Rights therein or relating thereto made by such Representative in the course of his or her employment. (i) Neither the United States government nor any agency thereof nor any other third party has funded or will fund any part of the Research. + + 18 + + + + + + + + (j) MD Anderson's applicable database applications and electronic records systems and facilities which are used in the performance of the Research, including the database to be used by MD Anderson and Principal Investigator for the tracking, handling, recording, reporting and transmitting of data generated during a Study, have been fully validated and are compliant with all Laws. (k) MD Anderson is not entering into this Agreement (i) as a result of any pre-existing or future business relationships between MD Anderson and/or Principal Investigator and LBIO, (ii) as a result of any business or other decisions MD Anderson and/or Principal Investigator have made or may make in the future relating to LBIO or LBIO products, or (iii) as a reward or in exchange for MD Anderson or Principal Investigator prescribing or purchasing LBIO products or to induce the prescription or purchase of LBIO products by MD Anderson or Principal Investigator. 9.3 Warranty of cGMP. LBIO represents and warrants that any Study Drug (as defined in an applicable Study Order) manufactured by and provided by it for any Study hereunder has been and will be manufactured in accordance with current Good Manufacturing Practice regulations. 9.4 Independent Status. MD Anderson shall not be considered a partner, co-venturer, agent, employee, or representative of LBIO by reason of this Agreement, but shall remain in all respects an independent contractor, and neither Party shall have any right or authority to make or undertake any promise, warranty or representation, to execute any contract or otherwise to assume any obligation in the name of or on behalf of the other Party. MD Anderson's employees, including the Principal Investigator and the other Representatives of MD Anderson, are not and shall not be deemed to be employees of LBIO, and MD Anderson shall indemnify and hold harmless LBIO from all liabilities arising from any allegation or determination to the contrary. 9.5 Notices. All notices and other communications required or permitted hereunder shall be in writing and deemed to have been given when hand delivered, or mailed by registered or certified mail or overnight courier with tracking capabilities, as follows or as a Party may otherwise notify to the other in accordance with this Section 9.5 (provided that such notice of change of address or recipient shall be deemed given only when received), with an electronic copy to an email address if specified below: If to LBIO, to: If to MD Anderson: Lion Biotechnologies, Inc. The University of Texas M.D. Anderson Cancer Center 999 Skyway Road, Suite 150 1515 Holcombe Blvd. San Carlos, CA 94070 Houston, TX 77030 Attention: Legal Department Attention: Chief Legal Officer With a copy to: legal@lionbio.com + + 19 + + + + + + + + 9.6 Assignment; No Third Party Beneficiaries. LBIO may assign or transfer this Agreement without the prior written consent of but with written notice to MD Anderson promptly following consummation of the relevant transaction. MD Anderson hereby acknowledges and agrees that the rights and obligations hereunder are of a personal nature and, therefore, neither this Agreement nor any right or obligation contained within shall be assignable, transferable or delegable in whole or in part by MD Anderson and MD Anderson shall not, without the prior written consent of LBIO, sub-contract or otherwise engage any consultant or other third party to perform any of MD Anderson's activities or obligations under this Agreement or any Study Order. All of the terms and provisions of this Agreement shall be binding upon, and inure to the benefit of and be enforceable by, the respective successors and permitted assigns of the Parties. Nothing in this Agreement, express or implied, is intended to confer on any person or entity, other than the Parties or their respective successors and permitted assigns, any benefits, rights or remedies. 9.7 Governing Law, Jurisdiction. This Agreement shall be governed by and interpreted in accordance with the laws of the State of Texas, United States of America, without giving effect to any conflict of laws provisions. The Parties agree that any dispute or controversy arising out of or relating to any interpretation, construction, performance or breach of this Agreement may be brought in a United States District Court in Texas, or if such court does not accept jurisdiction or will not accept jurisdiction, in any court of general jurisdiction in the State of Texas. 9.8 Equitable Relief. MD Anderson agrees that it may be impossible or inadequate to measure and calculate LBIO's damages from any breach of MD Anderson's obligations under Section 6 and/or Section 7 of this Agreement, and that a breach of such obligations could cause serious and irreparable injury to LBIO. Accordingly, LBIO shall have available, in addition to any other right or remedy available to it, the right to seek an injunction from a court of competent jurisdiction restraining such a breach (or threatened breach) and to specific performance of any such Section. MD Anderson further agrees that no bond or other security shall be required in obtaining such equitable relief. 9.9 Entire Agreement, Amendment and Waiver. This Agreement contains the entire understandings of the Parties and supersedes all previous agreements (oral and written), negotiations and discussions with respect to the subject matter herein. The Parties may modify any of the provisions hereof only by an instrument in writing duly executed by the Parties. No waiver of any rights under this Agreement shall be effective unless in writing signed by the Party to be charged. 9.10 Severability. In the event of the invalidity of any provisions of this Agreement containing any gaps, the Parties agree that such invalidity or gap shall not affect the validity of the remaining provisions of this Agreement. The Parties will replace an invalid provision or fill any gaps with valid provisions, which most closely approximate the purpose and economic effect of the invalid provision or, in the case of a gap, the Parties' presumable intentions. 9.11 Further Assurances. Each Party shall, as and when reasonably requested by the other Party, do all acts and execute all documents as may be reasonably necessary to give effect to the provisions of this Agreement. 9.12 Interpretation. The headings in this Agreement are intended solely for convenience or reference and shall be given no effect in the construction or interpretation of this Agreement. This Agreement shall be construed as if both Parties drafted it jointly, and shall not be construed against either Party as principal drafter. The words "include", "includes" and "including" (and words of similar meaning) shall be deemed to be followed by the phrase "without limitation". + + 20 + + + + + + + + 9.13 Counterparts. This Agreement may be executed in two (2) or more counterparts, including by "PDF" exchange, each of which shall be deemed to be an original as against any Party whose signature appears thereon, but all of which together shall constitute but one and the same instrument. 9.14 Texas State Agency. MD Anderson is an agency of the State of Texas and under the constitution and laws of the State of Texas possesses certain rights and privileges and only such authority as is granted to it under the constitution and laws of the State of Texas. Notwithstanding any provision hereof, nothing herein is intended to be, nor will it be construed to be, a waiver of the sovereign immunity of the State of Texas or a prospective waiver or restriction of any of the rights, remedies, claims, and privileges of the State of Texas. Moreover, notwithstanding the generality or specificity of any provision hereof, the provisions of this agreement as they pertain to MD Anderson are enforceable only to the extent authorized by the constitution and laws of the State of Texas. 9.15 DISCLAIMER OF SPECIAL DAMAGES. NEITHER LBIO NOR MD ANDERSON, NOR ANY OF THEIR AFFILIATES, NOR ANY OF THEIR RESPECTIVE DIRECTORS, OFFICERS, MEMBERS OR EMPLOYEES, SHALL HAVE ANY LIABILITY OF ANY TYPE, FOR ANY SPECIAL, PUNITIVE, INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES, INCLUDING THE LOSS OF OPPORTUNITY, LOSS OF USE, OR LOSS OF REVENUE OR PROFIT, IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY STUDY ORDER; PROVIDED, THAT, THE FOREGOING DISCLAIMER SHALL NOT APPLY WITH RESPECT TO (1) A PARTY'S INDEMNIFICATION OBLIGATIONS, (2) A PARTY'S BREACH OF ITS OBLIGATIONS UNDER THIS AGREEMENT WITH RESPECT TO CONFIDENTIALITY AND NON-USE OR INTELLECTUAL PROPERTY-RELATED MATTERS OR (3) A PARTY'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. [Signature Page Follows] + + 21 + + + + + + + + IN WITNESS WHEREOF, the undersigned, intending to be legally bound, have duly executed this Agreement as of the Effective Date. LION BIOTECHNOLOGIES, INC. THE UNIVERSITY OF TEXAS M. D. ANDERSON CANCER CENTER /s/ Maria Fardis /s/ Chris McKee Authorized Signature Authorized Signature Name: Maria Fardis Name: Chris McKee, M.H.A. Title: CEO & President Title: VP, Business Operations Date: April 17, 2017 Date: April 12, 2017 This Agreement is to be executed in duplicate. Please return one fully executed copy to LBIO at the address for notices set forth above. \ No newline at end of file diff --git a/full_contract_txt/IPAYMENT,INC_05_14_2007-EX-10.1-SPONSORSHIP AGREEMENT.txt b/full_contract_txt/IPAYMENT,INC_05_14_2007-EX-10.1-SPONSORSHIP AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..fb7406d97f999406300938c49e428838f3efd47e --- /dev/null +++ b/full_contract_txt/IPAYMENT,INC_05_14_2007-EX-10.1-SPONSORSHIP AGREEMENT.txt @@ -0,0 +1,1125 @@ +Exhibit 10.1 + +Execution Copy + +SPONSORSHIP AGREEMENT + +dated January 29, 2007 + +between + +FIRST DATA MERCHANT SERVICES CORPORATION, + +WELLS FARGO BANK, N.A. + +and + +iPAYMENT, INC. + + + + + + + +SPONSORSHIP AGREEMENT + +This Sponsorship Agreement (this "Agreement") dated as of January 29, 2007 (the "Effective Date") is by and between iPayment, Inc. ("ISO"), First Data Merchant Services Corporation ("FDMS"), and Wells Fargo Bank, N.A. ("Bank"). Under this Agreement, FDMS and Bank will collectively be referred to as "SERVICERS." + +RECITALS + +A. Bank is a Member of Visa and MasterCard, and, as such, is authorized to sign agreements enabling Merchants to accept Visa and MasterCard Bank Cards from their customers in accordance with the terms and conditions of their respective Rules and regulations. + +B. ISO is a registered "independent sales organization" with Visa and a registered "member service provider" with MasterCard and is in the business of developing and marketing Merchant Bank Card programs, originating Merchant relationships, and providing Merchant Bank Card management services. + +C. In conjunction with the processing services rendered to ISO by FDMS pursuant to the Service Agreement dated as of July 1, 2002 by and between ISO and FDMS, as amended (the "Service Agreement"), ISO and SERVICERS desire to establish the sponsorship of a Merchant processing Program on the terms and conditions set forth in this Agreement. + +D. ISO, as assignee of Transaction Solutions, LLC, and Concord Transaction Services, LLC, successor in interest to EFS National Bank and an Affiliate of FDMS, are parties to that certain ISO Services and Marketing Agreement dated as of April 17, 2002, as amended (the "TS ISO Agreement"). The parties now desire to terminate the TS ISO Agreement and to incorporate the services provided thereunder into this Agreement and the Service Agreement. + +E. ISO, as assignee of Petroleum Card Services, Inc., and CTS Holdings, LLC successor in interest to Concord Payment Systems, Inc. and National Payment Systems, Inc. and an Affiliate of FDMS, are parties to that certain Processing Service Agreement dated as of April 16, 2001, as amended (the "PCS ISO Agreement"). The parties now desire to terminate the PCS ISO Agreement and to incorporate the services provided thereunder into this Agreement and the Service Agreement. + +F. Bank is the acquiring bank for the transactions processed under the TS ISO Agreement and the PCS ISO Agreement. + +AGREEMENT + +In consideration of the foregoing and the covenants and conditions contained herein, the parties agree as follows: + +Page 1 + + + + + + + +SECTION 1 DEFINITIONS + +As used in this Agreement (including the recitals set forth above), the following terms shall have the meanings set forth below (each of which includes the singular and the plural): + +"ACH" shall mean the electronic transfer of funds through an automated clearing house system. + +"Affiliate" shall mean any entity that directly or indirectly controls, is controlled by or is under common control with a party. + +"Applicant" shall mean a Merchant who submits an Application. + +"Application" shall mean the Merchant application used by ISO, as provided by and/or approved by SERVICERS and ISO, and other existing Merchant applications assigned to Bank as part of the initial BIN/ICA transfer. + +"Application Materials" shall mean the Application and all other materials developed to facilitate the execution of Merchant Processing Agreements, as approved by SERVICERS and ISO. ISO shall cease its use of any Application Materials that become unacceptable to SERVICERS within ninety (90) days of receipt of written notice from SERVICERS or such shorter period of time as may be required to comply with the Rules or to prevent a loss to SERVICERS. + +"Approved Merchant" means any Merchant that: + + (a) Is solicited by ISO (or ISO's Other MSP's or IC's) for participation in the Program; + + (b) Meets the established criteria for participation in the Program, including the Merchant Processing Policy; and + + (c) Enters into a Merchant Processing Agreement. + +Approved Merchants may also include Merchants converted to the Program as part of the initial BIN/ICA transfer and/or subsequently acquired Merchants that meet the established criteria for participation in the Program, including the Merchant Processing Policy, and whose sponsorship is assigned to Bank. + +"Bank Card" shall mean a credit card or debit card issued by a member of MasterCard, Visa or any other association or card issuing organization (including Debit Networks) and bearing its respective trade names, trademarks, and/or trade symbols. + +"Business Day" shall mean any day on which Bank is open for business, other than Saturdays, Sundays, or state or federal holidays. + +Page 2 + + + + + + + + + +"Change of Control" means a change in the power to direct the management or affairs of ISO or the beneficial ownership of more than 51% of the equity securities; provided, however, that becoming a public company with the same management team or changing the beneficial ownership of more than 51% of the equity securities while maintaining the same management team will not constitute a change in control. + +"Confidential Information" shall mean non-public information about, and proprietary materials of, any party as defined and more fully described in Section 9.1. + +"Deconversion" shall mean the activities performed by SERVICERS at the request of ISO to effect a Program Transfer, which activities and associated fees/costs will be set forth in a written plan developed before any such activities are begun and in good faith by ISO and SERVICERS that is designed to complete the Program Transfer within 6 months, at SERVICERS' then-current fees/costs. If ISO requests no services from SERVICERS in connection with the deconversion, then there will be no fees/costs to ISO other than any pass-through Bank Card association fees, if any. + +"Effective Date" is defined in the first paragraph of this Agreement. + +"Eligible Merchant" shall mean a Merchant that meets the Merchant Processing Policy and is solicited for the Program by ISO or ISO's Other MSP's or IC's. + +"FFB" means FDMS's Affiliate, First Financial FFB, an industrial bank formed under the laws of the State of Colorado. + +"IC" shall have the meaning provided in Section 2.4. + +"Including" whether capitalized or not, means "including but not limited to." + +"Intellectual Property" shall mean copyrights, Marks, trade secrets, patents or other proprietary rights of a party. + +"ISO" includes ISO's wholly-owned subsidiaries that are either independently registered with Visa and MasterCard or solicit Merchants under the ISO's registration, and also includes, when the context so requires, ISO's Other MSP's and IC's. + +"Losses" shall mean any losses, damages, liabilities, judgments, orders of restitution, and penalties (including civil monetary penalties and Visa and MasterCard fines and penalties). + +"Marks" shall mean the trademarks or service marks of a party. + +"MasterCard" shall mean MasterCard International, Incorporated. + +Page 3 + + + + + + + +"Material" when used with reference to information, a fact or circumstance, a course of action, a decision-making process or other matter, shall be limited to information, facts and circumstances, courses of action, decision-making processes or other matters as to which there is a substantial likelihood that a reasonable person would attach importance. + +"Member" shall mean an acquiring member of Visa and MasterCard. + +"Merchant" shall mean an individual or entity that engages in, or desires to engage in, Bank Card transactions with its customers. + +"Merchant Account" shall mean the account relationship established between ISO, Bank and an Approved Merchant pursuant to a Merchant Processing Agreement. + +"Merchant Discount Amount" shall mean the portion of the face amount of Bank Card transactions submitted by Approved Merchants and processed through the Program that is paid to SERVICERS. Further, this portion shall be determined by application of the Merchant Discount Rate that is reflected in each Merchant Processing Agreement. + +"Merchant Discount Rate" shall mean a percentage rate to be applied to determine the portion of the face amount of a Bank Card transaction that will be charged to the originating Merchant, which rate shall be reflected in each Merchant Processing Agreement and subject to change from time to time pursuant to the terms of the Merchant Processing Agreement. + +"Merchant Portfolio" shall mean the group of Approved Merchants participating in the Program pursuant to this Agreement. + +"Merchant Processing Policy" shall mean the merchant policy, guidelines and standards established by SERVICERS under which SERVICERS will enter into a Merchant Processing Agreement with a Merchant as it may be modified by SERVICERS in their discretion from time to time during the term of this Agreement. Attached as Exhibit B is a list of certain categories of Merchants who are always unacceptable under the Merchant Processing Policy, along with a summary of other policy guidelines and standards. + +"Merchant Processing Agreement" shall mean a written agreement among ISO, Bank and an Approved Merchant that governs the Approved Merchant's participation in the Program, as provided by and/or approved by SERVICERS and ISO. ISO shall cease its use of any form of Merchant Processing Agreement that becomes unacceptable to SERVICERS within ninety (90) days of receipt of written notice from SERVICERS or such shorter period of time as may be required to comply with the Rules or to prevent a loss to SERVICERS. For the avoidance of doubt, ISO shall be responsible for effecting any necessary and appropriate amendments to the Merchant Processing Agreement that may become necessary as a result of subsequent amendments to the Rules or SERVICERS' requirements. In the event a Merchant refuses to consent to any such amendment during the applicable ninety (90) day period, ISO will notify SERVICERS, + +Page 4 + + + + + + + +and Bank or FFB will have the right to terminate its sponsorship of such Merchant and the applicable Merchant Processing Agreement. + +"Merchant Reserve Account" shall mean one or more accounts maintained by SERVICERS as security against Merchant liabilities to ISO or SERVICERS. + +"Minimum Balance" shall have the meaning provided in Section 6.1(a). + +"Net Program Participation Fees" shall mean, at any point in time, all Program Participation Fees minus the sum of: + + (a) All compensation and other amounts (including unreimbursed chargebacks and payments to the Reserve Account) due SERVICERS; + + (b) [***] + + (c) Pass-Through Costs and Interchange. + +"Offset Account" shall mean an account at Bank that is established and maintained by FDMS to allow SERVICERS to credit and debit funds as provided in Section 6. + +"Other MSP" shall have the meaning provided in Section 2.4. + +"Pass-Through Costs and Interchange" shall mean the amounts charged by MasterCard, Visa, and other networks or Bank Card associations (including interchange fees, dues and assessments) in connection with the Approved Merchant transactions, the liability for which shall be the sole responsibility of ISO except as otherwise described herein. + +"Payment Date" means: (i) for Merchant Accounts originally covered by the TS ISO Agreement and the PCS ISO Agreement, the [***] day (or first Business Day thereafter if such day is not a Business Day) of each calendar month during the term of this Agreement; and (ii) for all other Merchant Accounts on the FDMS "Omaha" platform covered by this Agreement, the first Business Day after the day the funds are available and in Bank's settlement account, but in no event later than [***] [***] days after the end of each month. + +"Processing Year 1" means the period commencing on the Effective Date and ending on June 30, 2007. + + + +*** Omitted pursuant to a confidential treatment request. The confidential portion has been filed separately with the SEC. + +Page 5 + + + + + + + +"Processing Year" means each twelve (12) calendar month period commencing on the first day of July and ending on the last day of the following June, except for Processing Year 1 which is specifically defined. + +"Program" shall mean ISO's sales and marketing activities on behalf of itself and SERVICERS, the processing of Merchant Applications, and the provision of Bank Card transaction processing services to Approved Merchants under the terms of their Merchant Processing Agreements. + +"Program Participation Fees" shall mean all fees owed by Merchants to Bank and ISO under the applicable Merchant Processing Agreements, including the Merchant Discount Amounts or transaction fees, which amounts shall be recommended by ISO, but in all cases will be subject to final approval by Bank, which approval shall not be unreasonably withheld or delayed. + +"Program Standards" means the policies and procedures established by SERVICERS to be used by ISO in connection with the solicitation of prospective Merchants and other policies, procedures, fines and penalties established by SERVICERS that are designed to promote the financial safety or soundness of the Program. The Program Standards may be modified by SERVICERS from time to time in their sole discretion; provided, however, that SERVICERS will discuss in good faith any concerns that ISO may have that any such change will adversely affect ISO's ability to add Approved Merchants to the Program. The current form of the Program Standards are attached hereto as Exhibit D. + +"Program Transfer" shall mean Bank's transfer and assignment of the Merchant Portfolio and the dedicated BINs/ICAs, including Bank's interest in all Merchant Processing Agreements, to a third party designated by ISO in accordance with Section 10.4. + +"Promotional Materials" shall mean all written solicitations and advertisements and other communications (including telemarketing scripts) used to market, promote, and solicit the establishment of Merchant Processing Agreements with Merchants. + +"PS ISO Agreement" is defined in Recital E of this Agreement. + +"Reserve Account" shall mean the account at Bank that is to be established by ISO and fully controlled by SERVICERS as described in Section 8.1 to insure payment of chargebacks, fees and other amounts due to SERVICERS. + +"Residual Account" shall mean an account established and maintained by (and in the name of) ISO to allow Bank to credit funds as provided in Section 6. + +"Rules" shall mean the by-laws, regulations and/or requirements that are promulgated by Visa, MasterCard, Debit Networks and/or other Bank Card associations. + +Page 6 + + + + + + + +"Service Agreement" is defined in Recital C of this Agreement. + +"Termination Reserve Account" shall mean a reserve account to be established upon notice of termination of this Agreement to insure the payment of chargebacks and credit/fraud losses related to transactions with an acquirer's processing date on or before the effective date of termination of this Agreement, fees and other amounts which may become due to SERVICERS following termination of this Agreement. + +"TS ISO Agreement" is defined in Recital D of this Agreement. + +"Visa" shall mean VISA USA Incorporated. + +SECTION 2 PROGRAM SERVICES + +2.1 SERVICERS' Services/Pricing. + + (a) SERVICERS shall provide the services specified in this Agreement and the exhibits and shall be compensated therefor as set forth in the Service Agreement and in Exhibit A hereto. Any and all processing and related services rendered by SERVICERS to an Approved Merchant in the Merchant Portfolio covered by this Agreement (including without limitation Merchants initially processed under the TS ISO Agreement and the PCS ISO Agreement) will be rendered pursuant to and billed at the rates set forth in the Service Agreement. Any and all sponsorship, clearing and related services rendered by SERVICERS in connection with an Approved Merchant in the Merchant Portfolio covered by this Agreement (including without limitation Merchants initially processed under the TS ISO Agreement and the PCS ISO Agreement) will be rendered pursuant to and billed at the rates set forth in this Agreement. Any Approved Merchant added to the Merchant Portfolio and Program covered by this Agreement will be subject to all terms and conditions of this Agreement. + + (b) Any service described in this Agreement is subject to periodic revision by SERVICERS to reflect changes (i) to the SERVICERS' systems or the services provided by SERVICERS and offered generally to SERVICERS' customers and (ii) in the specific services provided to ISO; provided, however, that SERVICERS will not implement any changes or improvements to the services if such action will materially degrade the quality of the services being provided to ISO by SERVICERS hereunder unless such change is required by the VISA or MasterCard rules and regulations. + + (c) SERVICERS may from time to time pass through to ISO actual increases in the Pass-Through Costs and Interchange, to reflect any increases in such fees, costs and charges to SERVICERS, upon thirty (30) days prior written notice to ISO (or, if SERVICERS receive less than thirty (30) days notice of such increase, as much prior notice as is practicable under the circumstances). + +Page 7 + + + + + + + + (d) In the event of any fee increases to ISO, SERVICERS shall provide reasonable assistance to ISO in passing such fee increases through to Merchants under the Merchant Processing Agreements. + + (e) From time to time and in their sole discretion, SERVICERS may also perform certain risk management services, such as periodic credit reviews, fraud reviews and monitoring and collections, with respect to Applicants and Approved Merchants; provided, however, that SERVICERS will not contact such Applicants or Approved Merchants directly and will request any reasonably necessary information or documentation from ISO. SERVICERS' participation in any such activity shall not in any way relieve ISO from its responsibility for credit and fraud losses which may result from or be related to the Program. + + (f) SERVICERS will provide ISO with a point of contact to address issues that arise in connection with this Agreement, which will be one or more employees of FDMS. + +2.2 ISO Obligations. + + (a) ISO shall perform all sales and marketing activities in furtherance of the Program, subject to the terms of this Agreement. It is understood that (at all times) SERVICERS have the ultimate approval right for ISO's solicitation procedures, Application Materials, Application processing procedures, Merchant qualification criteria, transaction processing procedures, Merchant Processing Agreements, Program terms, Program Participation Fees, and other Program policies, all of which must be approved in advance by SERVICERS in writing. + + (b) ISO shall also perform all initial Merchant credit review and underwriting on Applicants in a manner consistent with Section 4 of this Agreement, including the Merchant Processing Policy. ISO shall at all times comply with the Program Standards. + + (c) ISO will use reasonable efforts to convert the sponsorship and clearing of all Merchants processing on the FDMS system under the Service Agreement to the sponsorship and clearing of Bank under the terms and conditions of this Agreement; provided, however, that ISO will not be required to attempt to convert any such Merchants if the Merchant refuses to be sponsored by Bank, if the applicable Other MSP or IC refuses to board accounts on the FDMS System or be sponsored by Bank, or if the conversion of such merchants would not make economic or strategic business sense to ISO. + + (d) For the avoidance of doubt, the parties acknowledge that ISO may utilize SERVICERS' services under this Agreement on a non- exclusive basis and there are no minimum fees or utilization commitments under this Agreement. + +Page 8 + + + + + + + +2.3 BIN and ICA Assignment. SERVICERS will utilize BINs (Bank Identification Number) and ICAs (Interbank Card Association) dedicated solely to ISO to facilitate the Program, and no merchants other than Program Merchants will be under the dedicated BIN/ICA. The initial BINs/ICAs to be transferred to Bank from ISO's current sponsoring Member as part of the Program launch are listed on Exhibit E. ISO shall be responsible, and shall reimburse SERVICERS, for all actual, documented fees and costs imposed by third parties associated with obtaining, installing and maintaining the BIN/ICA on the FDMS system, including any Visa and MasterCard fees and assessments. Upon a Program Transfer in accordance with Section 10.4, Bank will transfer the dedicated BINs/ICAs used in connection with the Program to a Visa and MasterCard Member designated by ISO. + +2.4 Use of Other Independent Sales Organizations/Independent Contractors. + + (a) Except as expressly set forth herein, ISO shall not subcontract, assign, license or in any other manner extend or transfer to any third party any right or obligation ISO has with respect to SERVICERS' Program. If ISO desires to use the services of any other independent sales organization/member service provider ("Other MSP"), such Other MSP must be (i) reviewed and approved by SERVICERS, in their sole discretion, (ii) contracted with SERVICERS or Bank upon mutually agreeable terms, and (iii) registered with Visa and MasterCard by Bank in accordance with the Rules. If ISO desires to use the services of an individual independent contractor who represents himself or herself as working for ISO using ISO's legal/business name ("IC"), then ISO shall enter into a written agreement with each such IC that (i) requires the IC to comply with all applicable terms of this Agreement and all applicable Rules, laws and regulations, and (ii) prohibits the making of any representation or creating any liability on behalf of SERVICERS. + + (b) ISO's currently utilizes the Other MSP's and IC's listed on Exhibit E attached hereto in its Merchant processing business. The parties agree to work together expeditiously and in good faith to transfer the registration or re-register all such entities with the appropriate Bank Card associations as required under the Rules. All Other MSP's must be appropriately registered before boarding accounts under Bank's sponsorship. + +2.5 SERVICERS' Obligations. + + (a) Bank will sponsor ISO, at ISO's expense, as an ISO for Visa, as an MSP for MasterCard and, to the extent applicable, as similarly required for all other Bank Card associations and, to the extent required by any Bank Card association, Bank also agrees to sponsor for registration with Visa and/or MasterCard those Other MSP's, IC's, subsidiaries and marketing representatives of ISO which are approved by SERVICERS. Unless otherwise disallowed by a Bank Card association, Bank agrees to maintain such sponsorships throughout the term of this Agreement and until the first of either to occur: (i) [***] days after the + + + +*** Omitted pursuant to a confidential treatment request. The confidential portion has been filed separately with the SEC. + +Page 9 + + + + + + + + expiration or earlier termination of this Agreement, or (ii) the effective date of the assignment of all of the Merchant Processing Agreements or all of the BINs/ICAs and other items specified and contemplated in Section 10.4. + + (b) From time to time, and within a reasonable time from Bank's receipt of notice of an amendment to the Rules that is not otherwise available to ISO, Bank will advise ISO, who shall, in turn, notify each Merchant, of any change in the Merchant Program imposed by the Rules. + + (c) At ISO's request, Bank will obtain copies for ISO of any Bank Card association manuals and publications (including Rules) that are available to acquiring members and that are not otherwise available to ISO and that are allowed to be shared with ISO under the Rules. Bank will forward to ISO all information routinely provided by each Bank Card association that is not otherwise available to ISO that are allowed to be shared with ISO under the Rules that would be helpful to ISO in fulfilling its obligations under this Agreement. + + (d) Bank will maintain all cardholder information under its control and/or possession in a safe and secure manner in compliance with the Rules, and will report to Bank Card associations as required by the Rules relating to internal policies and procedures related to cardholder information security. Furthermore, Bank agrees to inform the ISO immediately regarding any breach of information security that may have an adverse effect to the ISO or to its Merchants. + + (e) Bank, as the acquiring principal member, agrees to represent ISO's interest in disputes that might arise from time to time with a Bank Card association over compliance with Rules and fines; provided, however, that ISO shall pay any fines or other charges imposed on Bank by a Bank Card association relating to the Merchant Program and any and all costs reasonably incurred by Bank in disputing the same, including reasonable associated legal fees. + + (f) FDMS has entered into an agreement with FFB, pursuant to which FFB will sponsor (or assume the sponsorship of) Merchants, FDMS and its customers, including ISO, into certain networks ("Debit Sponsorship"). ISO agrees to the additional terms and conditions relating specifically to the Debit Sponsorship, as set forth in Exhibit G. + +SECTION 3 MARKETING AND COMPLIANCE + +3.1 Application Materials. ISO shall use reasonable efforts to ensure that each Application completed by an Applicant is current and contains accurate and complete information. ISO's Application Materials shall comply with all applicable Rules, laws and regulations. All Application Materials and any changes to the form and content thereof must be approved in writing by SERVICERS prior to use by ISO, which approval will not be unreasonably withheld or delayed beyond [***] [***] days unless such changes + + + +*** Omitted pursuant to a confidential treatment request. The confidential portion has been filed separately with the SEC. + +Page 10 + + + + + + + + are voluminous. The initial approved Application Materials are attached hereto as Exhibit C. + +3.2 Compliance Responsibility. ISO shall be responsible for ensuring that the Application Materials, the marketing plans, the Promotional Materials and all services performed by ISO hereunder comply, and remain in compliance with, all applicable Rules, laws and regulations; provided, however, that SERVICERS will in good faith inform ISO of issues or concerns with ISO's materials or practices observed by SERVICERS that SERVICERS reasonably believe may be in violation of applicable Rules. All documents and any changes to the form and content thereof must be approved in writing by SERVICERS prior to use by ISO, which approval will not be unreasonably withheld or delayed beyond fifteen (15) days. + +3.3 Promotional Materials. ISO shall be responsible, at its sole expense, for the development of all Promotional Materials and shall bear the cost of the development and the printing and distribution of the Promotional Materials. The Promotional Materials shall comply with all applicable Rules, laws and regulations. All Promotional Materials and any changes to the form and content thereof must be approved in writing by SERVICERS prior to use by ISO, which approval will not be unreasonably withheld or delayed beyond fifteen (15) days. ISO and ISO's Other MSP's and IC's will not use SERVICERS' or SERVICERS' Affiliates' Marks in any advertising, promotional or display materials without SERVICERS' prior written approval, which approval will not be unreasonably withheld or delayed beyond fifteen (15) days. + +SECTION 4 APPLICATION AND UNDERWRITING PROCEDURES + +4.1 Applications. ISO shall solicit Applications from Eligible Merchants at ISO's sole expense and shall provide each Applicant with Application Materials. ISO shall collect completed and signed Application Materials and Merchant Processing Agreements from Applicants and shall forward them to SERVICERS within [***] [***] Business Days after the merchant is boarded (which may be accessed by SERVICERS online or forwarded to SERVICERS via ISO's automated application system or to a facsimile number designated by SERVICERS, provided such complies with the Rules and applicable laws, rules and regulations) or to any other place(s) as SERVICERS may designate for processing and document storage. ISO shall retain copies of all Application Materials, Merchant Processing Agreements and documents forwarded to SERVICERS. ISO shall provide SERVICERS with access to ISO's automated application system and ISO's online Merchant Account system (BAMS, or any such successor or replacement system) at no cost to SERVICERS. + +4.2 Underwriting. ISO shall underwrite, perform a credit review and conduct a site inspection, when applicable, for each Application as required by this Agreement, the Merchant Processing Policy and the Rules to determine whether each Applicant is an Eligible Merchant. ISO may conduct such credit review without notification to and participation by SERVICERS, except as otherwise provided below (i.e., for any + + + +*** Omitted pursuant to a confidential treatment request. The confidential portion has been filed separately with the SEC. + +Page 11 + + + + + + + + prospective Merchant that falls within the risk and volume parameters set forth in this Section 4.2), provided that ISO performs the credit review in accordance with the Merchant Processing Policy, the terms of this Agreement and the Rules. In accordance with and as permitted by this Agreement, a third-party service provider approved by SERVICERS may perform site inspections for ISO. In order to assist ISO in its underwriting hereunder, SERVICERS shall assist ISO with checking Merchants and prospective Merchants against the Terminated Merchant File/MATCH List or any similar list maintained by any entity. ISO shall be responsible for all credit and fraud losses associated with the Merchant Portfolio or the Program, regardless of any services or assistance that may be provided by SERVICERS. For any high risk Merchant who in good faith ISO anticipates will have annual Visa and MasterCard transaction volume equal to or greater than $[***] and any low risk Merchant who in good faith ISO anticipates will have annual Visa and MasterCard transaction volume equal to or greater than $[***], ISO shall advise SERVICERS and permit SERVICERS to conduct their own credit review prior to boarding the account. Upon receipt of a complete underwriting package from ISO, SERVICERS will respond to ISO within [***] [***] Business Days as to SERVICERS' acceptance or rejection of such Merchant. SERVICERS' participation in any credit review will not in any way relieve ISO from its responsibility for credit and fraud losses which may result from a Merchant's transaction processing. SERVICERS may at any time require that a Merchant relationship be terminated by ISO and Bank may cease the provision of services to any such Merchant pursuant to the terms of the Merchant Processing Agreement. SERVICERS shall have the right and authority to accept or reject any Application. ISO shall obtain prospective Merchants' authorization for ISO and/or SERVICERS to obtain all reports (including personal and business credit reports) and other information necessary in connection with the Application. ISO shall have the right, subject to and pursuant to the terms and conditions of the Merchant Processing Policy, to cause any Eligible Merchant with transaction card volume processing limits up to but not more than $[***] per month, that has been approved by ISO, to be activated immediately in SERVICES' systems. SERVICERS agree to provide ISO with a final approval decision (i.e., acceptance, rejection or required modification of the submitted Application) on submitted and complete Merchant Applications for Eligible Merchants that are not classified as "high risk" on the High Risk Merchant List attached hereto as Exhibit F and which seek approval for transaction card volume processing limits in excess of $[***] per month but not more than $[***] per month, within [***] [***] Business Days after SERVICERS' receipt of such completed Merchant Application and documentation. + +4.3 Credit Decisions. ISO shall employ the Merchant Processing Policy guidelines provided by SERVICERS in making credit evaluations. SERVICERS reserve the right, in their sole and absolute discretion, to: + + (a) Change the Merchant Processing Policy; + + (b) Reject the Application of any Applicant who SERVICERS determine does not satisfy SERVICERS' Merchant Processing Policy; and + + + +*** Omitted pursuant to a confidential treatment request. The confidential portion has been filed separately with the SEC. + +Page 12 + + + + + + + + (c) Terminate the Merchant Processing Agreement with respect to any Merchant at any time, according to the Merchant Processing Agreement terms. + +Notwithstanding anything contained herein, so long as all of the following are true with respect to a Merchant or Merchant Account, SERVICERS agree that, except as required by the Rules, SERVICERS shall neither terminate nor make any change with respect to the discount or reserve of said Merchant or Merchant Account that will have an adverse effect on the Merchant or Merchant Account without the prior written consent of ISO: + + (i) The Merchant or Merchant Account is not in a Bank Card association monitoring program; + + (ii) The Merchant or Merchant Account is not engaged in, or aiding and abetting, any illegal activity or fraud; + + (iii) The Merchant or Merchant Account is in compliance with the Merchant Processing Policy; + + (iv) The Merchant or Merchant Account is not processing transactions where products are delivered or services rendered more than one (1) year (on the average, based upon transactions of the immediately preceding three (3) months) following the date of the transaction; + + (v) No Bank Card association nor any regulatory agency has requested that the Merchant or Merchant Account be terminated; + + (vi) In its sole judgment, SERVICERS do not feel that they may be at financial risk as a result of the activity of a Merchant or Merchant Account; and + + (vii) The Merchant or Merchant Account is not causing reputational harm or risk to either of SERVICERS in their reasonable judgment. + +In the event SERVICERS decide to terminate or make any such adverse change with respect to a Merchant or Merchant Account, SERVICERS shall first attempt to give ISO notice of SERVICERS' decision. + +4.4 Merchant Reserve Accounts. ISO shall be responsible for determining the amount of any Merchant Reserve Accounts. ISO shall also be responsible for ensuring all Merchant Reserve Accounts are adequately funded. All Merchant Reserve Accounts, along with any other monies or collateral collected from Approved Merchants, shall be deposited with Bank. [***] ISO will monitor daily Merchant account activity and if in ISO's reasonable judgment certain Approved Merchants and/or certain transactions are possibly fraudulent or otherwise not in + + + +*** Omitted pursuant to a confidential treatment request. The confidential portion has been filed separately with the SEC. + +Page 13 + + + + + + + + compliance with the Rules or in violation of the Merchant Processing Agreement, ISO will instruct SERVICERS to change the Merchant bank account information to cause funds otherwise due such Merchant to be diverted and deposited into the Merchant Reserve Account for such Merchant. ISO will thereafter promptly investigate each such suspicious incident and, upon request, promptly notify SERVICERS of the result of any such investigation. If in any case ISO's investigation determines that no violation occurred, ISO will promptly request SERVICERS to release any funds diverted to the Merchant Reserve Account to the Merchant's deposit account. Once monies or other collateral are deposited in a Merchant Reserve Account, SERVICERS shall control the disbursements of such funds which are to be (a) paid to ISO or SERVICERS to cover losses incurred in connection with the applicable Approved Merchant or (b) returned to the applicable Approved Merchant upon a reduction in the potential risk to ISO and SERVICERS arising from the provision of services to such Merchant within two (2) Business Days after receipt of a written request by ISO. From time to time, ISO may request SERVICERS to disburse monies held in a Merchant Reserve Account to ISO or an Approved Merchant as set forth in the preceding sentence, and SERVICERS shall consider such requests in good faith. Bank may draw against any Merchant Reserve Account to cover any Losses or credit and fraud losses incurred by SERVICERS with respect to an Approved Merchant without the consent of ISO or the applicable Approved Merchant. + +4.5 Maintenance of Underwriting Staff. ISO shall at all times maintain an adequate and qualified staff to perform underwriting and credit reviews of Program Merchants. + +SECTION 5 PROPRIETARY RIGHTS + +5.1 General. To the extent required by the Rules, legal title to all Merchant Applications, Merchant Processing Agreements and Merchant Accounts and records shall be in the name of Bank, subject to its obligations to effect a Program Transfer pursuant to Section 10.4 of this Agreement; provided, however, that Bank acknowledges and agrees that ISO shall own and maintain the Merchant relationship during the term of this Agreement and thereafter. ISO acknowledges and agrees that all Merchant Applications, Merchant Processing Agreements and Merchant Accounts and records may not be transferred, assigned, sold or exchanged by ISO except as set forth in this Agreement or the applicable Merchant Processing Agreement. Bank shall be exclusively responsible and entitled to receive all payments, collections, and other amounts due from Merchants, subject to its payment obligations to ISO. Each of ISO's and Bank's rights shall survive the termination of this Agreement by either party and for whatever cause. For the avoidance of doubt, the parties acknowledge and agree that ISO owns all Merchant Processing Agreements, Merchant Accounts and Merchant relationships except as otherwise specifically set forth herein. + +SECTION 6 SETTLEMENT AND PAYMENT + +Page 14 + + + + + + + +6.1 Offset Account. + + (a) FDMS shall establish and maintain the Offset Account at Bank during the term of this Agreement to facilitate the making of all payments due to SERVICERS from ISO and to ISO from SERVICERS. ISO agrees that the initial amount of the Offset Account will be $[***] and, thereafter, the Offset Account will, at all times, maintain collected funds in an amount at least equal to the amount then due SERVICERS hereunder (which shall be referred to herein as the "Minimum Balance"). + + (b) If the collected funds on deposit in the Offset Account at any point in time are less than the Minimum Balance, SERVICERS may fund the Offset Account with any monies or funds belonging or payable to ISO which are in SERVICERS' possession. SERVICERS will promptly notify ISO after making any such transfer. + + (c) ISO hereby grants SERVICERS a security interest in the Offset Account to secure all of ISO's obligations to SERVICERS under this Agreement. + +6.2 Settlement Procedures. + + (a) SERVICERS shall settle each Merchant Account in accordance with the terms of the applicable Merchant Processing Agreement, remitting to each Approved Merchant, by ACH or other acceptable method, all settled funds due to the Approved Merchant after first deducting from such settled funds all applicable Program Participation Fees and any other amounts owed or withheld under the applicable Merchant Processing Agreement. Merchant Account settlement is included in the fees set forth in Exhibit A and will not incur an additional fee. + + (b) On each Payment Date, SERVICERS shall credit ISO's Residual Account in an amount equal to all Net Program Participation Fees collected by SERVICERS since the immediately preceding Payment Date and which have not otherwise been paid to ISO. + + (c) In the event that the Net Program Participation Fees are insufficient to pay any amounts due to SERVICERS' under this Agreement (including compensation, funding the Offset Account, funding the Reserve Account, or paying third party processing fees), then ISO shall provide sufficient additional funds to SERVICERS upon demand. + + (d) [***] + + + +*** Omitted pursuant to a confidential treatment request. The confidential portion has been filed separately with the SEC. + +Page 15 + + + + + + + + [***] + +6.3 Payment Deferrals. In addition to any rights now or hereafter granted under this Agreement or applicable law and not by way of limitation of any such rights, SERVICERS are hereby authorized by ISO, at any time and from time to time, without notice or demand to ISO or to any other person (any such notice and demand being hereby expressly waived), to setoff, recoup and to appropriate and to apply any and all monies or funds belonging or payable to ISO which are in Bank's possession against and on account of ISO's obligations to SERVICERS under this Agreement (including funding the Offset Account, the Reserve Account, the Termination Reserve Account or funding chargebacks), whether such obligations are liquidated, unliquidated, fixed, contingent, matured or unmatured. + +6.4 Expenses. Except as otherwise provided, each party shall bear its own administrative costs and overhead expenses arising out of its performance of this Agreement. + +6.5 Liability for Losses. Unless any Losses are caused by SERVICERS or are attributable to the negligence or willful misconduct of SERVICERS, SERVICERS shall have recourse from ISO, and ISO shall fully reimburse SERVICERS, for any Losses to SERVICERS that are caused by: + + (a) Chargebacks, purchase returns, refunds, credits, adjustments, fees or Bank Card association fines, costs and expenses related to Approved Merchants, Eligible Merchants, or any Merchant activity hereunder; and + + (b) Amounts remaining due to SERVICERS after the deduction of SERVICERS' compensation as provided herein. + +6.6 Bank Card Association Assessments/Fees. ISO shall pay or fund when due all Bank Card association assessments/fees, including any and all quarterly assessments/fees. + +6.7 Survival. The provisions of this Section 6 shall survive the termination or expiration of this Agreement. + + + +*** Omitted pursuant to a confidential treatment request. The confidential portion has been filed separately with the SEC. + +Page 16 + + + + + + + +6.8 Assignment of Merchant Losses. SERVICERS agree that after SERVICERS have been fully reimbursed by ISO for a Merchant loss pursuant to this Agreement, and provided that the Merchant Account resulting in the Merchant loss has been terminated, that SERVICERS will, at the request of ISO, assign to ISO any and all of SERVICERS' subrogation rights under or related to the Merchant Processing Agreement (including guarantees, security or otherwise) related to the indebtedness of such Merchant under the Merchant Processing Agreement (including guarantees, security or otherwise), so that ISO may pursue collection recovery activities in connection with such Merchant loss. Any such collection recovery activities shall be conducted in the name of ISO and shall be subject to the indemnification obligations of ISO. Bank agrees to execute and deliver to ISO such assignment documents as reasonably requested and required by ISO to vest such collection loss(es) recovery right to ISO and as reasonably required in connection with such collection recovery activities. + +SECTION 7 REPRESENTATIONS AND WARRANTIES OF ISO + + ISO represents and warrants to SERVICERS that, as of the date of this Agreement, the following are true and correct: + +7.1 Organization and Good Standing. ISO is a Delaware corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has full corporate power and authority to carry on its business as it is now being conducted. ISO is and will be qualified as a foreign corporation in good standing under the laws of each jurisdiction in which the conduct of its business or the ownership of its properties requires the qualification. + +7.2 Execution and Effect of Agreement. ISO has the corporate power and authority to enter into this Agreement and the execution and delivery of this Agreement and the performance of ISO's obligations hereunder have been duly authorized by all necessary corporate action. This Agreement has been duly executed and delivered by ISO and constitutes a legal, valid, and binding obligation of ISO, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, and other laws affecting the rights of creditors generally. + +7.3 Restrictions. Neither the execution and delivery of this Agreement nor the conduct of the Program contemplated hereby will: + + (a) Violate any of the provisions of the charter or by-laws of ISO; or + + (b) Conflict with, or result in a breach of, or give rise to a right of termination of, or accelerate the performance required by the terms of any judgment, court order or consent decree, or any agreement, including a restrictive covenant or covenant against competition, indenture, mortgage, or instrument to which ISO is a party or to which its property is subject, or constitute a default thereunder, except where the conflict, breach, right of termination, acceleration or default would not + +Page 17 + + + + + + + + prevent or have a Material adverse effect on the conduct of the activities contemplated hereby. + +7.4 Consents. Except for filings, consents, waivers, approvals, and authorizations that the failure to obtain or make would not have a Material adverse effect on ISO or the Program, no filing, consent, waiver, approval, or authorization of any governmental authority or of any third party other than Visa and MasterCard, or notice to, or filing with, any governmental authority or any third party on the part of ISO is required in connection with the execution and delivery of this Agreement or the conduct of the activities contemplated hereby. + +7.5 Litigation. To the knowledge of ISO and except as disclosed in public filings with the Securities and Exchange Commission, there is no action at law or in equity, arbitration, proceeding, or governmental investigation pending, or to the knowledge of ISO threatened, by or before any court, any governmental or administrative agency or commission, or arbitrator, against ISO regarding this Agreement or any of the transactions contemplated hereby that could reasonably be expected to prevent or have a Material adverse effect on the conduct of the activities contemplated hereby. + +SECTION 8 ADDITIONAL COVENANTS + +8.1 Reserve Account. + + (a) ISO expressly authorizes SERVICERS to establish a Reserve Account pursuant to the terms and conditions set forth in this Section 8.1. The initial amount of such Reserve Account shall be [***]. In addition, the amount of the Reserve Account may be increased by SERVICERS from time to time based upon any reasonably anticipated risk of loss to SERVICERS, material breach of the Agreement by ISO, or any material adverse change in the financial condition of ISO. Such Reserve Account shall be established and maintained at Bank. [***] + + (b) The Reserve Account shall be fully funded upon five (5) Business Days' notice to ISO. Such Reserve Account may be funded by all or any combination of the following: (i) one or more debits to the Offset Account or any other accounts of ISO held by Bank or any of its Affiliates; (ii) one or more deductions or offsets to any payments otherwise due to ISO; or (iii) ISO's delivery to SERVICERS of a letter of credit issued by a bank acceptable to SERVICERS and in a form acceptable to SERVICERS. + + + +*** Omitted pursuant to a confidential treatment request. The confidential portion has been filed separately with the SEC. + +Page 18 + + + + + + + + (c) If ISO's funds in the Reserve Account are not sufficient to cover the chargebacks, adjustments, fees and other charges due to SERVICERS from ISO or Merchants, or if the funds in the Reserve Account have been released, ISO agrees to pay SERVICERS such sums within five (5) Business Days of any such request by SERVICERS. In the event of a failure by ISO to fund the Reserve Account, SERVICERS may fund such Reserve Account in any of the manners set forth above. + + (d) To secure ISO's obligations to SERVICERS under this Agreement, ISO grants to SERVICERS a lien and security interest in and to any of ISO's funds in the Reserve Account or otherwise related to this Agreement now or hereafter in the possession of SERVICERS, whether now or hereafter due or to become due to ISO from SERVICERS. ISO agrees to duly execute and deliver to SERVICERS such instruments and documents as SERVICERS may reasonably request to perfect and confirm the lien, security interest, right of setoff, recoupment and subordination set forth in this Agreement. + +8.2 Inspection.ISO will, at any and all reasonable times, permit SERVICERS' employees, agents, attorneys, auditors, or bank regulators to inspect ISO's place of business to audit its operations for compliance with all Rules, laws, regulations, and directives of any governmental regulatory agency or Bank Card association, all at SERVICERS' expense. + +8.3 Cooperation.SERVICERS and ISO will each timely furnish to the other any and all information and materials that the other may, from time to time, reasonably request in connection with all matters contemplated by this Agreement. Each party also shall take the action as the other may, from time to time, reasonably request in order that the purposes of this Agreement will be fully accomplished and that all matters contemplated hereby will comply with all Rules or other applicable statutory, regulatory or other legal requirements. ISO shall promptly deliver to SERVICERS after receipt by ISO a copy of all non-routine notices or correspondence that it receives from MasterCard, Visa, or other networks or Bank Card associations, or any other third party, which in any way relates to any Merchant's or ISO's participation in MasterCard, Visa, and other networks or Bank Card associations under this Agreement. + +8.4 Compliance With Rules. ISO also covenants to the following: + + (a) ISO will obtain copies of all available Rules from Visa and MasterCard and any other Bank Card association that makes its Rules available to ISOs. For all Rules not reasonably available to ISO, SERVICERS will provide ISO with information regarding such Rules and compliance therewith. ISO understands and agrees to comply fully with all Rules and applicable laws and regulations. + + (b) On an ongoing basis, ISO will regularly provide SERVICERS with the current addresses for all its offices. + +Page 19 + + + + + + + + (c) In the event of any inconsistency between any provision of this Agreement and the Rules, the Rules in each instance shall be afforded precedence and shall apply. + + (d) ISO acknowledges and agrees that Visa and/or MasterCard are the sole and exclusive owner of Visa and/or MasterCard marks. ISO agrees to never contest the ownership of these marks and Visa and/or MasterCard may at any time immediately and without advance notice prohibit ISO from using their respective marks. + + (e) ISO acknowledges and agrees that Visa and/or MasterCard shall have the right, either in law or in equity, to enforce any provision of the Rules and to prohibit ISO's conduct that creates a risk of injury to Visa and/or MasterCard or that may adversely affect the integrity of Visa's and/or MasterCard's systems, information or both. ISO agrees to refrain from taking any action that would have the effect of interfering with or preventing an exercise of these rights by Visa and/or MasterCard. + + (f) ISO agrees not to use any marks of Visa and/or MasterCard on its own behalf in the furtherance of the Program. ISO also agrees not to suggest, imply or in any manner create an impression that it is a Member or an authorized representative of Visa and/or MasterCard or that it is other than an independent sales organization or member service provider for a Member. Further, ISO may not create an impression that Visa and/or MasterCard in any way endorses ISO or the Program it coordinates through SERVICERS. + + (g) ISO may use one or more of Visa's or MasterCard's marks under the following conditions: + + (i) The marks are used in accordance with the Rules; and + + (ii) The marks are used pursuant to the express written permission of Bank. + + (h) Except as expressly set forth herein, ISO may not subcontract, sublicense, assign, license, franchise or in any other manner extend or transfer to any third party any right or obligation ISO may have in connection with the Program. ISO agrees to provide services under the Program only with ISO's employees, Other MSP's or IC's in accordance with Section 2.4. An employee of ISO is defined as an individual who, while providing services for the Program (i) represents himself or herself as working for ISO while using only ISO's legal or "doing business as" name(s) as registered with Visa and/or MasterCard, and (ii) receives compensation for services rendered for the Program from ISO. An employee may not extend or transfer to any third party any right or obligation the employee may have regarding the Program as an employee of ISO. ISO will provide SERVICERS with a list of the names of all of its employees and IC's and such additional information as SERVICERS may reasonably request from time to time regarding any employee or IC. ISO will conduct appropriate background checks + +Page 20 + + + + + + + + (including credit and criminal background checks) on all employees, Other MSP's and IC's. + + (i) ISO further agrees to the following: + + (i) ISO will not use Visa's and/or MasterCard's equipment and software ("V/MC Systems") and Visa and/or MasterCard information identified or reasonably understood to be confidential or proprietary ("V/MC Confidential Information") for anything other than to perform its duties on behalf of SERVICERS and definitely not for its own use or for any other purpose; + + (ii) To treat the V/MC Systems and V/MC Confidential Information in at least as careful and confidential a manner as ISO treats its own or the SERVICERS' systems and confidential or proprietary information; + + (iii) To acknowledge that access to the V/MC Systems and V/MC Confidential Information does not convey to ISO any right, title, interest or copyright therein or any license to use, sell, exploit, copy or develop them further; + + (iv) To limit access to the V/MC Systems and V/MC Confidential Information to only those ISO employees and Other MSP's with a need to have access for the ISO to perform services under the Program and to implement and maintain reasonable and appropriate safeguards to prevent unauthorized access to or use of the V/MC Systems or V/MC Confidential Information; + + (v) Solely with respect to the Program and this Agreement, upon request by SERVICERS, or, absent such requests, upon termination of ISO's performance under the Program, to immediately cease any and all use of V/MC Systems and promptly thereafter deliver to SERVICERS all V/MC Confidential Information then in the possession or control of ISO or, upon request by Visa and/or MasterCard, to immediately cease any and all use of the V/MC Systems and promptly thereafter deliver all V/MC Confidential Information that was provided by SERVICERS then in its possession or control to Visa and/or MasterCard; and + + (vi) To immediately advise both SERVICERS and Visa and/or MasterCard if any unauthorized person or external entity seeks access to the V/MC Systems or V/MC Confidential Information whether by legal proceeding or otherwise. + + (j) Visa and/or MasterCard may at any time conduct financial and procedural audits of ISO. ISO agrees to cooperate with and promptly supply Visa and/or MasterCard with all information and material requested. + +Page 21 + + + + + + + + (k) ISO understands that all Program Materials including Merchant Applications, Merchant Processing Agreements, Merchant statements, and Promotional Materials (i) must be approved by SERVICERS before use, such approval not to unreasonably withheld or delayed beyond [***] [***] days, and (ii) may not state or imply that ISO is participating in or conducting any activity precluded by the Rules. + + (l) ISO recognizes that SERVICERS must approve (in advance) any fee associated with the Program which must be clearly and conspicuously disclosed in writing to the Merchant prior to any payment or Application. + +8.5 Registration as ISO. ISO and each Other MSP shall at all times, at ISO's and/or each Other MSP's cost and expense, maintain in effect during the term of this Agreement, a valid and effective registration as an independent service organization with Visa and a member service provider with MasterCard and shall provide any information as Visa and MasterCard may reasonably request in connection therewith or in connection with the services of ISO hereunder, and shall provide SERVICERS the information as it may reasonably request concerning compliance with all applicable Rules, laws, regulations and the requirements set forth herein in connection with this Agreement. The parties hereto will work together expeditiously and in good faith to register and maintain the registration of ISO and each Other MSP with the appropriate Bank Card associations as required under the Rules. + +8.6 Mark Restriction. ISO shall not make any use of SERVICERS' Marks or any other Intellectual Property without SERVICERS' prior written consent, which will not be unreasonably withheld or delayed beyond [***] [***] days. + +8.7 Financial Statements/Audit Rights. ISO shall make available (whether through public filings or directly) SERVICERS with annual audited financial statements prepared by an independent auditing firm within 90 days of the end of each fiscal year (and shall make available to SERVICERS quarterly financial statements upon request of SERVICERS). In addition, ISO will provide any shareholder/owner personal financial information as required by the Rules. ISO will, at any and all reasonable times, permit SERVICERS' employees, agents and/or auditors to inspect ISO's books and records at SERVICERS' expense prior request and notice and if for a particular need. + +SECTION 9 CONFIDENTIAL INFORMATION + +9.1 Confidential Information. Confidential Information is non-public and proprietary information relating to the business of ISO or its Affiliates that SERVICERS and their Affiliates acquire during the term of this Agreement, and information relating to the business of SERVICERS and their Affiliates. It includes, but is not limited to, the following, whether used in, or to be used in, the business of ISO or SERVICERS: physical systems for the operation of the business; all present and planned strategies, business plans, and projections; all market and sales and marketing information; all + + + +*** Omitted pursuant to a confidential treatment request. The confidential portion has been filed separately with the SEC. + +Page 22 + + + + + + + + financial, accounting, and credit information; and the terms and conditions of this Agreement. Neither party will disclose, furnish, sell, convey, or use for any purpose other than as contemplated under this Agreement any of the other parties' Confidential Information or materials without written authorization. For the avoidance of doubt, the parties acknowledge and agree that all Merchant information is the Confidential Information of ISO and (i) may not be used by SERVICERS for any purpose other than to provide the services contemplated hereunder during the term of this Agreement and thereafter, and (ii) will not be used by SERVICERS, directly or indirectly, to solicit any Merchants in the Merchant Portfolio. + +9.2 Exclusions. Nothing in this Section 9 shall restrict either party with respect to Confidential Information which: (a) the receiving party can demonstrate was rightfully possessed by it before it received the information from the disclosing party; (b) was in the public domain prior to the date of this Agreement or subsequently becomes publicly available through no fault of the receiving party or any person acting on its behalf; (c) was previously received by the receiving party from a third party or is subsequently furnished rightfully to the receiving party by a third party not known to be under restrictions on use or disclosure; (d) is independently developed by such party; (e) is required to be disclosed by the Rules, law, regulation or court order, provided that the disclosing party will exercise reasonable efforts to notify the other party prior to disclosure; or (f) is required to be disclosed to comply with or to enforce the terms of this Agreement. + +9.3 Ownership of Work Product. Each party shall have and retain all ownership rights (including ownership of any Marks) in the work product developed for the implementation of the Program, including the Application, Merchant Processing Agreement and Promotional Materials that it creates, prepares or produces in connection with this Agreement, and all the work products shall remain the exclusive property of that party. Upon termination of the Agreement, each party shall immediately cease using any materials using the other's Marks or Intellectual Property, and shall immediately destroy all such materials. + +9.4 Remedy; Survival. If any party breaches this Section 9, the non-breaching party will suffer irreparable harm and the total amount of monetary damages for any injury to such party will be impossible to calculate and therefore an inadequate remedy. Accordingly, the non-breaching party may (i) seek temporary and permanent injunctive relief against the breaching party or (ii) exercise any other rights and seek any other remedies to which the non-breaching party may be entitled to at law, in equity and under this Agreement for any violation of this Section 9. The provisions of this Section 9 shall survive the termination or expiration of this Agreement. + +SECTION 10 TERM AND TERMINATION + +10.1 Initial Term. The initial term of this Agreement shall be four (4) Processing Years commencing on the Effective Date of this Agreement and ending on June 30, 2010 unless + +Page 23 + + + + + + + + terminated earlier as provided in this Section 10. Thereafter, this Agreement shall automatically continue in effect until either party gives the other at least six (6) months prior written notice of termination. + +10.2 Termination by SERVICERS. SERVICERS may terminate this Agreement prior to its expiration for cause upon prior written notice to ISO as follows: + + (a) Upon a Material breach of any representation, warranty or covenant in this Agreement by ISO which is not cured by ISO within sixty (60) days of receipt of written notice from SERVICERS; provided however, that if ISO is attempting in good faith to cure such breach within said sixty (60) day cure period but the nature of the breach prevents a cure within sixty (60) days, then ISO shall be allotted an additional number of days to cure, provided the total number of days of the cure period shall be no greater than one hundred twenty (120) days; + + (b) Upon a breach of any Material Rule by ISO, or repeated breach of any Rule by ISO which is not cured by ISO within sixty (60) days of receipt of written notice from SERVICERS; provided however, that if ISO is attempting in good faith to cure such breach within said sixty (60) day cure period but the nature of the breach prevents a cure within sixty (60) days, then ISO shall be allotted an additional number of days to cure, provided the total number of days of the cure period shall be no greater than one hundred twenty (120) days; + + (c) Upon any commission of any fraudulent activity by ISO, or the illegal activity of ISO's employees in the performance of their duties in connection with this Agreement; + + (d) Upon any failure by ISO to pay (or make arrangements to pay that are acceptable to SERVICERS) any amount due under this Agreement to SERVICERS which does not give rise to the right to terminate under any other provision of this Agreement within ten (10) Business Days after written notice to ISO of its failure to pay the amount; + + (e) Upon the insolvency or bankruptcy of ISO; + + (f) Upon a Material adverse change in the business or financial condition of ISO; + + (g) Upon an assignment of this Agreement by ISO without SERVICERS' prior written consent; + + (h) Upon the failure by ISO to maintain good standing as an "independent sales organization" with Visa or a "member services provider" with MasterCard; + + (i) If SERVICERS are required by a governmental or regulatory body or agency or by any Bank Card association to terminate the Services on behalf of ISO with as much prior notice as is practicable under the circumstances; + +Page 24 + + + + + + + + (j) If ISO fails to fund the Offset Account or the Reserve Account as required under this Agreement within ten (10) Business Days after written notice to ISO of its failure to pay the amount; + + (k) Upon the termination of the Service Agreement for any reason with one hundred eighty (180) days prior written notice to ISO; or + + (l) Upon a Change of Control of ISO with one hundred eighty (180) days prior written notice to ISO, unless the SERVICERS had previously consented to such change in control. + +10.3 Termination by ISO. ISO may terminate this Agreement prior to its expiration for cause upon prior written notice to SERVICERS as follows: + + (a) Upon a Material breach of any representation, warranty or covenant in this Agreement by SERVICERS which is not cured by SERVICERS within sixty (60) days of receipt of written notice from ISO; provided however, that if SERVICES are attempting in good faith to cure such breach within said sixty (60) day cure period but the nature of the breach prevents a cure within sixty (60) days, then SERVICERS shall be allotted an additional number of days to cure, provided the total number of days of the cure period shall be no greater than one hundred twenty (120) days; + + (b) Upon any failure by SERVICERS to pay any amount due under this Agreement which does not give rise to the right to terminate under any other provision of this Agreement within five (5) Business Days after written notice to SERVICERS of its failure to pay the amount; + + (c) Upon the insolvency or bankruptcy of either of the SERVICERS; + + (d) Upon the termination of the Service Agreement for any reason; + + (e) Upon a Material adverse change in the business or financial condition of either of SERVICERS; + + (f) Upon an assignment of this Agreement by SERVICERS without ISO's prior written consent; + + (g) Upon the failure by SERVICERS to maintain good standing with Visa or a MasterCard; + + (h) If required by a governmental or regulatory body or agency or by any Bank Card association to terminate; + + (i) Upon cessation of Bank Card operations by SERVICERS; or + +Page 25 + + + + + + + + (j) At any time upon one hundred eighty (180) days prior written notice to the SERVICERS with no penalty. + +10.4 Effect of Termination. + + (a) Upon the expiration or termination of this Agreement for any reason, at the direction of ISO and pursuant to the plan of Deconversion, SERVICERS will transfer and assign all their interest in the Merchant Portfolio (including Merchant Processing Agreements and Merchant Accounts) and the dedicated BINs/ICAs to a Visa and MasterCard Member designated by ISO, provided first that: (a) all amounts due (or estimated to become due) in connection with each Merchant Processing Agreement and under this Agreement have been paid to SERVICERS; (b) the Termination Reserve Account has been adequately funded; (c) ISO provides full written indemnities to SERVICERS regarding actual and potential losses or other obligations arising out of operation of the Program or arising out of, or related to, this Agreement or any Merchant Processing Agreement; and (d) the Program Transfer complies with all applicable Rules, laws and regulations (the "Program Transfer"). [***] + + (b) Until the completion of the Deconversion of the Merchant Portfolio, the parties shall continue to operate under the terms and conditions of this Agreement; provided, however, that upon the effective date of expiration or termination of this Agreement, ISO will promptly discontinue its promotion and recommendation of the Program and will cease to board new accounts on Bank's BINs and ICAs or for sponsorship by Bank. ISO will reimburse SERVICERS for any Deconversion pursuant to the plan for Deconversion, regardless of whether such Deconversion occurs before or after the expiration or termination of this Agreement. ISO shall continue to hold all risks associated with transactions processed by SERVICERS prior to the effective date of Deconversion of each respective Merchant in the Merchant Portfolio, including all risk relating to chargebacks and fraudulent transactions. ISO shall pay SERVICERS any amounts associated with such risks immediately upon demand. + +10.5 Termination Reserve Account. Within ten (10) Business Days of the issuing of a notice of termination by any party, ISO shall fund a Termination Reserve Account. Except as specifically set forth otherwise in this Section 10.5, all provisions of Section 8.1 of this Agreement with regard to the Reserve Account shall also apply to the Termination Reserve Account. The amount of the Termination Reserve Account shall be the greater of (i) the most recent required amount for the Reserve Account prior to termination, or (ii) the amount calculated as follows: + + + +*** Omitted pursuant to a confidential treatment request. The confidential portion has been filed separately with the SEC. + +Page 26 + + + + + + + + (a) The amount of all chargebacks during the [***] [***] months preceding termination, plus + + (b) The amount of all assessed Bank Card association fines or penalties and all fees and contingent fees which are or shall become due to SERVICERS from ISO, plus + + (c) The estimated maximum amount of any known or likely significant loss events (defined as a credit or fraud loss that is likely to exceed $[***]). + + Upon termination, any balance in the Reserve Account shall be transferred to, and be applied toward, the Termination Reserve Account. The Termination Reserve Account will be held by SERVICERS until the completion of the Program Transfer or for such longer period of time as is consistent with SERVICERS' liability for Bank Card transactions in accordance with the Rules. SERVICERS will reduce the Termination Reserve Account balance to reflect any reductions in ISO's then-potential liability as the Program Transfer and Deconversion progress. [***] + +SECTION 11 INDEMNIFICATION ; EXCLUSIONS ; LIMITATIONS + +11.1 ISO's Indemnification. ISO shall indemnify, defend, protect, and hold SERVICERS, their Affiliates, and their respective officers, directors, employees, attorneys, and permitted assigns, harmless from and against any Losses and credit/fraud losses arising directly from: + + (a) Any failure by ISO to comply with any Material term or condition of this Agreement applicable to ISO, or the failure of any warranty or representations made by ISO in this Agreement to be true and correct; + + (b) Any claim for which ISO has otherwise agreed herein to pay or indemnify SERVICERS; + + (c) Credit or fraud losses, regardless of whether SERVICERS performed any underwriting, credit review, periodic review or fraud monitoring reviews on their own behalf; + + (d) Any negligence, misrepresentation or willful misconduct on the part of ISO or any of its employees, agents, Other MSP's or IC's related to this Agreement; and + + (e) Any claim by any third party related to this Agreement of a Merchant in the Merchant Portfolio that ISO's Intellectual Property violates or infringes any proprietary right of such third party, without any limitation of liability whatsoever. + + + +*** Omitted pursuant to a confidential treatment request. The confidential portion has been filed separately with the SEC. + +Page 27 + + + + + + + +11.2 SERVICERS' Indemnification. SERVICERS, jointly and severally, shall indemnify, defend, protect, and hold ISO, its Affiliates and their respective officers, directors, employees, attorneys, permitted assigns, Other MSP's and IC's harmless from and against any Losses and credit/fraud losses arising directly from: + + (a) Any failure by SERVICERS to comply with any Material term or condition of this Agreement applicable to SERVICERS, or the failure of any warranty or representations made by SERVICERS in this Agreement to be true and correct; + + (b) Any claim for which SERVICERS have otherwise agreed herein to pay or indemnify ISO; + + (c) Any Losses caused by SERVICERS' breach of a Merchant Processing Agreement; + + (d) Any negligence, misrepresentation or willful misconduct on the part of SERVICERS or any of their employees or agents related to this Agreement; and + + (e) Any claim by any third party related to this Agreement of a Merchant in the Merchant Portfolio that SERVICERS' Intellectual Property violates or infringes any proprietary right of such third party, without any limitation of liability whatsoever. + +11.3 Exclusion of Warranties, Limitations of Liability. + + (a) Except as expressly provided in this Agreement, SERVICERS specifically disclaim all warranties of any kind, express or implied, including any warranties regarding merchantability, fitness for a particular purpose, non-infringement or otherwise (regardless of any course of dealing, custom or usage of trade), arising out of or related to this Agreement, which are hereby excluded by agreement of the parties. The parties agree that this Agreement is a service agreement and is not subject to the provisions of the Uniform Commercial Code. + + (b) Notwithstanding anything in this Agreement to the contrary, in no event shall any party hereto, their respective Affiliates or any of their respective directors, officers, employees, agents or subcontractors, be liable under any theory of tort, contract, strict liability or other legal theory for lost profits, lost revenues, lost business opportunities, exemplary, punitive, special, incidental, indirect or consequential damages, each of which is hereby excluded by agreement of the parties, regardless of whether the damages were foreseeable or whether any party or any entity has been advised of the possibility of the damages. + + (c) Notwithstanding anything in this Agreement to the contrary, the cumulative liability of each of SERVICERS and ISO for all Losses, claims, suits, controversies, breaches or damages arising out of or related to this Agreement + +Page 28 + + + + + + + + regardless of the form of action or legal theory relating to events in any one Processing Year shall not exceed [***] [***] times the amount of clearing/sponsorship fees paid to SERVICERS by ISO pursuant to this Agreement during the immediately preceding [***] [***] full months; provided, however, that this limitation shall not apply to either party's obligation to indemnify the other for credit/fraud losses or Losses arising from or related to the indemnifying party's (or its agents, representatives, Merchants, Other MSP's or IC's) failure to comply with Rules. + + (d) The parties acknowledge and agree that no party will be obligated to indemnify the other party to the extent that the liability, lawsuit, penalty, claim, demand or Loss resulted from the negligence or intentional misconduct of the party to be indemnified. + + (e) Notwithstanding anything in this Agreement to the contrary, neither ISO nor SERVICERS nor their Affiliates shall have any liability under this Agreement for breach of their respective duties and obligations under this Agreement to the extent such breach was caused by labor disputes, strikes, acts of God, floods, terrorist acts, lightning, severe weather, shortages of materials, rationing, utility or communication failures or interruptions, failure of MasterCard, Visa, and other networks or Bank Card associations, earthquakes, war, revolution, civil commotion, blockade, embargo, or any law, order, proclamation, regulation, ordinance, demand or requirement having legal effect of any government or any judicial authority or representative of any such government, or any other act, omission or cause whatsoever, whether similar or dissimilar to those referred to in this clause, which are beyond ISO's, SERVICERS' or their Affiliates reasonable control. + +11.4 Survival. The provisions of this Section 11 shall survive the termination or expiration of this Agreement. + +SECTION 12 MISCELLANEOUS + +12.1 Books and Records. SERVICERS shall provide ISO promptly with monthly reports showing for the month the total number of active accounts and inactive accounts, the net sales processed for each Approved Merchant (provided ISO is either a party to the Merchant Processing Agreement (or assignee of a named party) or has obtained such Merchant's written authorization to obtain such information and SERVICERS' disclosure is not prohibited by any Rule, law, regulation or agreement with a governmental agency) and the net sales processed for all Approved Merchants. + +12.2 Relationship of the Parties. SERVICERS and ISO agree that in performing their responsibilities pursuant to this Agreement they are in the position of independent contractors. This Agreement is not intended to create, nor does it create and shall not be construed to create, a relationship of partnership or joint venture or agency or any + + + +*** Omitted pursuant to a confidential treatment request. The confidential portion has been filed separately with the SEC. + +Page 29 + + + + + + + + association for profit between SERVICERS and ISO. ISO is not authorized hereunder to hold itself out as an agent of SERVICERS or to inform or represent to any person that ISO has authority to bind or obligate SERVICERS or to otherwise act on behalf of SERVICERS except as expressly set forth herein. ISO shall not make any representation or warranty, or create any liability or potential liability on behalf of SERVICERS except as expressly set forth herein. + +12.3 No Third Party Beneficiaries. Nothing in this Agreement is intended to confer upon any person or entity other than the parties and their Affiliates any rights or remedies. + +12.4 Assignment and Transfer. Except as expressly set forth herein, ISO shall not assign or otherwise transfer this Agreement or any of its rights or obligations hereunder, by operation of law or otherwise, or contract with any third party (other than the third parties named herein) to perform any of its responsibilities or obligations relating to this Agreement without the prior written consent of SERVICERS, which consent will not be unreasonably withheld. In addition, ISO shall provide written notice to SERVICERS within three (3) Business Days of any Change of Control of ISO. + +12.5 Notices. Any notice, request, consent, waiver or other communication required or permitted to be given hereunder shall be effective only if in writing and shall be deemed sufficiently given only if delivered in person or sent by certified, registered, or overnight mail or overnight courier service, postage prepaid, return receipt requested, addressed as follows: + +If to FDMS: + +First Data Merchant Services Corporation 6902 Pine Street PS-11 Omaha, NE 68106 Attn: VP - Omaha Processing Facsimile Number: 402-222-6384 + +With a copy to: + +First Data Merchant Services Corporation 12500 E. Belford Avenue, Suite M5-C Englewood, CO 80112 Attn: General Counsel Facsimile Number: 720-332-0033 + +If to Bank: + +Wells Fargo Bank, N.A. 1200 Montego Way Walnut Creek, CA 94598 + +Page 30 + + + + + + + +Attn: EVP Merchant Card Services Facsimile Number: + +If to ISO: + +iPayment, Inc. 26707 West Agoura Hills Road, Suite 100 Calabasas, CA 91302 Attn: Operations Manager Facsimile Number: + +With a copy to: + +iPayment, Inc. 40 Burton Hills Boulevard, Suite 415 Nashville, TN 37215 Attn: General Counsel Facsimile: 615-665-8434 + + or to such other person or address as either party may designate by notice given to the other party as provided herein. The notice or communication shall be deemed to have been given as of the date so delivered. + +12.6 Prior Agreements, Entire Agreement, and Modifications. This Agreement, along with the Service Agreement, supersedes all prior agreements, whether verbal or in writing, and contains the entire Agreement between the parties regarding all matters, issues and claims relating to the subject matter of this Agreement, and any other written documents exchanged, verbal agreements reached and representations made by or between the parties in the course of the negotiation of this Agreement. This Agreement may be changed only by a written instrument specifically stating that it modifies this Agreement and it must be signed by all parties. + +12.7 Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to New York conflict laws. + +12.8 Waivers. No failure or delay by any party to exercise, and no course of dealing regarding any right of the party concerning an obligation of any other party to this Agreement, shall operate as a waiver unless agreed to in writing by all parties. The parties hereto waive their right to a jury trial in the event of any legal proceedings between them. + +12.9 Binding Effect, Remedies. This Agreement will not become legally binding and may not be enforced by any party until and unless executed by all parties hereto. This Agreement and the rights and obligations created hereunder shall be binding upon and inure solely to the benefit of the parties and their respective successors and permitted assigns, and no other person or legal entity shall acquire or have any rights under or by + +Page 31 + + + + + + + + virtue of this Agreement. The remedies provided for in this Agreement shall be cumulative in nature, not exclusive, and shall be in addition to any other remedy allowed in law or equity. + +12.10 Severability. If any provision of this Agreement is held illegal, invalid, void, or unenforceable in any jurisdiction where this Agreement or any part thereof is to be performed by reason of any rule of law, administrative or judicial proceeding or public policy, the provision shall be deemed deleted and the remaining provisions of this Agreement shall remain valid and binding. + +12.11 Headings. The Section headings of this Agreement are inserted as a matter of convenience only and shall in no way define, limit, extend or describe the scope of this Agreement or the intent of any provisions herein. + +12.12 Counterparts. Provided that all parties execute a copy of this Agreement, this Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. The parties acknowledge that delivery of executed copies of this Agreement may be effected by facsimile or other comparable means, as well as by delivery of manually signed copies. + +12.13 Construction. As used in this Agreement, any reference to the masculine, feminine or neuter gender shall include all genders, the plural shall include the singular, and the singular shall include the plural. + +12.14 Exhibits. All exhibits to this Agreement are incorporated by reference with the same force and effect as if fully set forth herein. This Agreement shall be given full force and effect without the exhibits or as to those exhibits that are attached, in the event less than all of the exhibits referenced herein are in fact attached. + +12.15 Termination of Other Agreements. The following agreements are herby terminated without penalty to any party and are of no further force and effect: (i) the TS ISO Agreement; and (ii) the PCS ISO Agreement; provided, however, that neither the termination of the TS ISO Agreement or the PCS ISO Agreement nor anything contained in this Agreement shall act as a waiver or otherwise preclude FDMS from reconciling and/or collecting any billing, residual or other fee-related issues under either the TS ISO Agreement or the PCS ISO Agreement except where otherwise agreed to by FDMS. + +IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective Date. + +iPAYMENT, INC. + +By: \s\ Greg Daily + +Name: Greg Daily + +Page 32 + + + + + + + +Title: Chief Executive Officer + +FIRST DATA MERCHANT SERVICES CORPORATION + +By: \s\ Rick Learch + +Name: Rick Learch + +Title: Senior Vice President + +WELLS FARGO BANK, N.A. + +By: \s\ Deirdre P. Cohen + +Name: Deirdre P. Cohen + +Title: Vice President + +Page 33 + + + + + + + +[***] + + + +*** Omitted pursuant to a confidential treatment request. The confidential portion has been filed separately with the SEC. + +Exhibit A, Page 1 + + + + + + + +EXHIBIT B UNACCEPTABLE BUSINESS + +The following industries are considered unacceptable merchant processing candidates due to Association prohibition; illegal or likely to be deemed illegal activity; high fraud potential; high potential for excessive chargebacks; or excessive risk exposure. + + • All sexually oriented or pornographic merchants: — Adult telephone conversations or Internet - Modeling agencies — Massage parlors - Adult book stores — Misc. entertainment (not elsewhere classified) - Topless bars/clubs + + • Any illegal products/services + + • Any service providing peripheral support of illegal activities (i.e., drugs) + + • Chain letters + + • Collection agencies or firms involved in recovering/collecting past due receivables + + • Drug paraphernalia + + • Free gift, prize, sweepstakes or contest as an inducement to purchase a product/service + + • "Get-rich-quick" schemes + + • Lotteries and/or illegal gambling, including Internet gambling + + • Sports forecasting or odds-making + + • Merchants offering rebates or special incentives + + • Credit card protection (including identity theft protection) + + • Extended warranty companies + + • Non-face to face tobacco sales + + • Non-face to face prescription drug sales + + • Non-face to face sales of firearms + + • Aggregators/Internet Payment Service Providers/Third Party Payment Processors + + • Audio/Video Text + + • Airlines + + • Cruise lines + + • Travel Agents/Tour Operators + + • Money transfer services + + • Check cashing + + • Currency exchange + + • Dating Services + + • Pseudo-pharmaceuticals (anti-aging pills, sex nutrients, etc.) + + • Outbound telemarketing + + • "Up-sell" Merchants + +Exhibit B, Page 1 + + + + + + + +EXHIBIT C APPLICATION MATERIALS + +See Attached. + +Exhibit C, Page 1 + + + + + + + +EXHIBIT D PROGRAM STANDARDS + +See Attached. + +Exhibit D, Page 1 + + + + + + + +EXHIBIT E LIST OF CURRENT BINs/ICAs and CURRENTLY ACTIVE OTHER MSP's and IC's + +See attached. + +Exhibit E, Page 1 + + + + + + + +EXHIBIT F HIGH RISK MERCHANT LIST (Not Elsewhere Classified As Unqualified / Unacceptable) MCC MERCHANT TYPE ALL Internet Merchants ALL Mail Order/ Telephone Order Merchants ALL Merchants Engaged In Extended Delivery 2741 Printing and Publishing Services — (Wholesale) 2791 Typesetting, Plate Making & Related Services-(Wholesale) 2842 Sanitation, Polishing & Specialty Cleaning Preparations 4121 Limousines, Taxis, Cabs 4784 Bridge and Tolls Fees 4812 Telecommunication Equipment and Telephone Sales, Beepers, Pagers, Paging Equipment, Cell Phones 4814 Telephone Services (Billing), Local and Long Distance Telecommunication Services, Cellular Telephone Services 4815 VisaPhone / MasterPhone 4816 Computer Network/Information Services. Internet Service Providers, Electronic Bulletin Boards 4821 Cablegrams, Telegrams 4899 Cable and Other Pay Television Services 5013 Parts — Motor Vehicle Supplies, New Parts — (Wholesale) 5021 Office, Commercial Furniture — (Wholesale) 5039 Construction Material — not elsewhere classified -(Wholesale) 5044 Copy Services — Photographic, Photocopy, Microfilm Supplies- (Wholesale) 5045 Computer, Computer Peripheral Equipment and Software — (Wholesale) 5046 Commercial Equipment — not Elsewhere classified (Wholesale) 5047 Equipment — Medical, Dental, Ophthalmic, Orthopedic, Hospital Equipment, Supplies — (Wholesale) 5051 Metal Service Centers and Offices — non-precious (Wholesale) 5065 Parts — Electrical, Equipment — (Wholesale) 5072 Hardware Equipment and Supplies — (Wholesale) 5074 Equipment — Heating Equipment, Supplies, Water Conditioning, Purification, Softening — (Wholesale) 5085 Industrial Supplies -Not elsewhere classified (Wholesale) 5094 Gemstones, Precious Stones, Metals, Watches, Jewelry (Wholesale) 5099 Durable Goods Not Elsewhere Classified (Wholesale) + +Exhibit F, Page 1 + + + + + + + + MCC MERCHANT TYPE 5111 Paper — Writing, Printing, Stationery, Office Supplies — (Wholesale) 5122 Pharmaceuticals — (Wholesale) 5131 Fabrics and Dry Goods — (Wholesale) 5137 Commercial Work Clothing and Uniform — (Wholesale) 5139 Footwear — Commercial (Wholesale) 5169 Chemicals & Allied products — (Wholesale) 5172 Petroleum and Petroleum Products — (Wholesale) 5192 Books, Periodicals & Newspapers — (Wholesale) 5193 Florist Supplies, Nursery Stock and Flowers — (Wholesale) 5198 Paints, Varnishes and Supplies — (Wholesale) 5199 Non-Durable Goods — Not Elsewhere Classified (Wholesale) 5521 Used Car & Truck Dealers 5712 Furniture, Home Furnishing, Bedding, Mattress Stores 5713 Carpet, Rugs, Floor Covering Stores 5719 Miscellaneous Home Furnishing Specialty Stores 5732 Computers, Electronics, Electronic Stores, Electronic Parts 5734 Computer Software 5932 Antiques, Collectible, Memorabilia Stores 5933 Pawnbrokers 5937 Antique Reproductions 5946 Camera & Photographic Supply Stores 5960 Direct Marketing — Insurance Services. 5963 Door-To-Door Sales 5968 Direct Marketing — Continuity/Subscription Merchant. 5969 Direct Marketing — Other Direct Marketers (Not Elsewhere Classified) Including Infomercials 5972 Stamp, Coin Stores, Stamp Collecting — Philatelic, Numismatic Supplies 6211 Securities Brokers, Mutual Funds, Stocks, Commodities, Bonds 6300 Insurance Sales, Underwriting, and Premiums 6513 Real Estate Agents, Brokers, Managers 7032 Camps — Sporting, Recreational 7033 Camping — Trailer Parks, Campgrounds 7273 Dating / Escort Services 7297 Massage Parlors 7298 Health & Beauty Spas 7372 Computer Programming, Data Processing, and Integrated Systems Design Services + + + + + + 7375 Information Retrieval Services 7379 Computer Maintenance, Repair & Services — (Wholesale) 7829 Motion Picture and Video Tape Production and Distribution — (Wholesale) 7922 Theatrical Producers/Productions (except Motion Pictures) and Ticket Agencies + +Exhibit F, Page 2 + + + + + + + + MCC MERCHANT TYPE 7929 Bands, Orchestras, and Miscellaneous Entertainers, Not Elsewhere Classified 7941 Commercial Sports, Professional Sports Clubs, Athletic Fields, and Sports Promoters 7997 Health Clubs, Country Clubs, Membership (Athletic, Recreation, Sports), Private Golf Courses 8241 Correspondence School 8244 Business & Secretarial Schools 8249 Trade & Vocational Schools 8299 Schools & Educational Services-Not Elsewhere Classified 8398 Organizations — Charitable, Social Service, Non-Political 8641 Associations — Civic, Social. Fraternal Associations 8651 Political Organizations 8661 Religious Organizations 8675 Automobile Associations, Automobile Clubs 8699 Membership Organizations — Not Elsewhere Classified 8734 Testing Laboratories (Non-Medical) 9211 Court Costs, Including Alimony, Child Support 9222 Fines 9223 Bail, Bond Payments 9311 Tax Payments 9399 Government Services — Not Elsewhere Classified 9401 Food Stamps 9402 Postal Services — U.S. Government 9700 Automated Referral Service + +Exhibit F, Page 3 + + + + + + + +EXHIBIT G ADDITIONAL TERMS AND CONDITIONS FOR POS NETWORKS MERCHANT SPONSORSHIP + +1. General. + + 1.1. ISO desires to deploy and service (or cause to be deployed and serviced), at merchant locations, terminals ("POS Terminals") that will be connected to the shared electronic funds transfer networks set forth on Schedule A to this Exhibit G, as it may be amended from time to time by FDMS in its sole discretion (the "Debit Networks"), to transmit point of sale transactions ("POS Transactions") generated by these POS Terminals through the Debit Networks' telecommunications and processing systems which effectuate the switching, processing and settlement of transactions ("Debit Network Systems"). (The services described in this paragraph shall be referred to in this Exhibit G as the "POS Services."). + + 1.2. ISO may offer qualified merchants the ability to provide, or have Customer provide on such merchant's behalf, merchants' ISOs with the option to pay their bills by initiating funds transfers through Debit Network Systems without PIN entry or verification, subject to additional terms and conditions agreed to by the ISO and FDMS ("PIN-less Debit"). (The services described in this paragraph shall be referred to in this Exhibit G as the "PIN-less Debit Services." The POS Services and PIN-less Debit Services, collectively, will be referred to in this Exhibit G as the "Debit Services"). + + 1.3. Debit Networks require that in order for ISO to provide the POS Services to merchants, merchants must be sponsored into the Debit Network by a member of such Debit Network ("Network Member"). Certain Networks ("Standard Networks") require that in order for ISO to provide the PIN-less Debit Services to merchants, merchants must be sponsored into the Debit Network by a Network Member. + +2. Duties of FDMS. Subject to the provisions of this Agreement, FDMS agrees to cause FFB, a Network Member, to: (a) sponsor Merchants into Debit Networks for provision of POS Services; (b) sponsor Merchants into Standard Networks for provision of PIN-less Debit Services through Standard Networks, subject to additional terms agreed upon by FDMS and ISO; provided, that FFB, in its absolute discretion, may refuse to sponsor any Merchant and may terminate its sponsorship of a Merchant or direct ISO to refuse to provide or terminate its provision of Debit Services to a Merchant. + + 2.1. Neither SERVICERS nor FFB will be responsible for the acts or omissions of any Debit Network or its agents or representatives. + +3. Conflict with Agreement. In the event of a conflict between this Exhibit G and the remainder of the Agreement as it relates to the subject matter hereof, the terms of this Exhibit G shall control. Otherwise, all terms and conditions of the remainder of the Agreement shall likewise apply to this Exhibit. + +Exhibit G, Page 1 + + + + + + + +Schedule A + +DEBIT NETWORKS + +1. All EDS networks, including; ACCEL, The Exchange, Instant Teller, Mpact, and TX. + +2. Alaska Option + +3. All Pulse networks, including; TYME, Money Station, and Gulfnet + +4. All Star networks, including; MAC, Cash Station, Alert, Avail, Bankmate, Cactus, Explore, Honor, Lynx, Most, and Relay + +5. NYCE + +6. Interlink + +7. Maestro + +8. Any other network added by FFB after the Effective Date. + +Schedule A to Exhibit G, Page 1 \ No newline at end of file diff --git a/full_contract_txt/IVILLAGEINC_03_17_1999-EX-10.16-SPONSORSHIP AGREEMENT.txt b/full_contract_txt/IVILLAGEINC_03_17_1999-EX-10.16-SPONSORSHIP AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..fe2c8eedf12bf6a8835e13b234615118e53cb3f9 --- /dev/null +++ b/full_contract_txt/IVILLAGEINC_03_17_1999-EX-10.16-SPONSORSHIP AGREEMENT.txt @@ -0,0 +1,159 @@ +* Confidential treatment has been requested for certain portions of this exhibit. Omitted portions have been filed separately with the Commission. + + SPONSORSHIP AGREEMENT + + This Sponsorship Agreement ("Agreement") is entered into as of December 18, 1998, by and between Ford Motor Media, a division of J. Walter Thompson ("FMM") with offices at 300 Renaissance Center, Detroit, Michigan 48243 and iVillage, Inc., ("iVillage") with offices at 170 Fifth Avenue, New York, New York 10010. FMM and iVillage may be referred to generically as a "Party", or collectively as "Parties". + + WHEREAS, iVillage operates a site on the World Wide Web and America Online (the "Network"), which contains channels including Parent Soup, ParentsPlace, Better Health and Armchair Millionaire as well as career, fitness & beauty, relationships, work from home, travel, money and food channels. + + WHEREAS, FMM seeks to promote the sale of its automotive products across the Network. + + NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, iVillage and FMM hereby agree as follows: + +1. Term and Termination. + + A. Term. The initial production period shall be for a period of two (2) months to commence on November 4, 1998 (the "Production Period"), and the remaining term of this Agreement shall be for a period of twenty four (24) months to commence on the tentative launch date of January 4, 1999, unless terminated earlier as provided herein (the "Promotion Period"), (The Production Period and the Promotion Period shall be collectively referred to as the "Initial Term"). The Parties agree that prior to July 1, 2000, iVillage will provide FMM with the opportunity to renew this Agreement (the "Renewal Term") on terms set forth in a proposal (the "Proposal) to be presented to FMM. FMM shall indicate its acceptance or rejection of the Proposal no later than August 31, 2000. If iVillage does not receive FMM's acceptance or rejection of the Proposal by August 31, 2000, iVillage may interpret FMM's non response as a rejection of the Proposal. The Proposal shall include maximum payment fees by FMM with respect to the Renewal Term. + + B. Termination. In the event of a material breach by either Party of any term of this Agreement, the non-breaching Party may terminate this Agreement by written notice to the breaching Party if the breaching Party fails to cure such material breach within thirty (30) days of receipt of written notice thereof. In addition, either Party may terminate this Agreement effective upon written notice stating its intention to terminate in the event the other Party (i) ceases to function as a going concern or to conduct operations in the normal course of business, or (ii) has a petition filed by or against it under any state or federal bankruptcy or insolvency law which petition has not been dismissed or set aside within sixty (60) days of its filing. In addition to the foregoing, if on or after January 31, 2000, either Party determines, based upon reasonable and mutually agreed upon measurable standards, that (x) the other Party has materially underperformed its obligations pursuant to this Agreement or (y) the expectations of such Party have been materially unfulfilled, such Party may terminate this Agreement upon ninety (90) days written notice to the other Party. Additionally, in the event of a prolonged and/or substantial + +strike which materially and adversely affects Ford's ability to produce and sell cars, the Parties will work together in good faith to amend or terminate this Agreement. + +2. Promotion. + + A. During the Production Period, iVillage will design, develop, construct and host a Ford bridge site (the "Bridge Site") which shall include approximately [*] pages of content and other interactive material such as a travel planner or a car design feature. During the Promotion Period, iVillage will continue to host, maintain and update the Bridge Site. Upon receipt from iVillage of the proposed Bridge Site design and content, FMM shall have no more than five (5) business days in which to provide iVillage with its acceptance or rejection of the design and content. If iVillage does not receive FMM's acceptance or rejection of such within the allotted time, iVillage shall deem FMM's silence as acceptance. The Parties shall work together to determine the content mix and delivery deadlines in order to maximize the effectiveness of the sponsorship campaign. + + B. During the Initial Term, iVillage will design, create and deliver [*] Ford-branded advertising units. The advertising units shall be subject to FMM's final approval. iVillage will deliver approximately [*] new advertising units each during the Promotion Period. For purposes of this Agreement, an advertising unit can include but shall not be limited to banners in the form of rich media, java-based, animated, daughter and/or pull-down banners, or a combination of appropriate technologies, and which shall represent and be defined by industry standards. + + C. + + (i) During the Promotion Period, iVillage will deliver a + + + + + + minimum of [*] advertising impressions, in an equal proportion each month. Subject to reasonable written notice to iVillage, FMM may request a reasonable reallocation of impressions as determined by FMM. The advertising units of Ford Division and other Ford Motor Company entities shall be served by a third party advertisement server, which shall be compliant with Net gravity, or Doubleclick or other compatible technology. + + (ii) During the Promotion Period, iVillage traffic shall be audited by a third party traffic auditor listed on Exhibit A and iVillage shall provide FMM with relevant reports on a biweekly basis. iVillage will provide ongoing marketing, creative, technical and editorial consultation to FMM. + + (iii) In the event that iVillage fails to deliver the advertising impressions during the Promotion Period, FMM shall have the option of either (a) extending the Initial Term of this Agreement for an additional three (3) month period to "make good" the undelivered impressions or (b) requiring iVillage to refund to FMM an amount equal to [*] for each [*] impressions which were not delivered. + + (iv) However, if iVillage falls to deliver the advertising impressions during the Promotion Period and FMM desires that iVillage "make good" the undelivered impressions and extend the Initial Term pursuant to option (a) set forth in Section 2.C.(iii), if the Parties have decided not to renew the Initial Term and iVillage desires to enter into an agreement with an entity whose business(es) would pose a conflict to FMM 2 + + or Ford Motor Credit, then iVillage, at iVillage's option, may refund the remaining impression deficiency to FMM, and immediately upon pavement of such, the "make good" obligation shall terminate. + + D. During the Initial Term, iVillage will design and administer, (i) a minimum of [*] online conferences which shall include live chats and the archiving of conference transcripts (dates of such conferences shall be determined by FMM and shall occur approximately once every two months, but not earlier than March 1, 1999 and FMM shall provide iVillage with not less than forty five (45) days advance notice of any conference); (ii) a minimum of [*] online polls; (iii) a minimum of [*] sixty-second surveys; (iv) a minimum of [*] online focus groups; and (v) a minimum of [*] customized turn-key Network sweepstakes (iVillage shall be responsible for all aspects of the sweepstakes other than the prize(s) which shall be provided by Ford Motor Company ("FMC")). FMM and FMC's respective advertising agencies shall be free to provide input with respect to the aforementioned promotional efforts set forth in this section and shall have the opportunity to reasonably approve such efforts. + + E. During the Initial Term, iVillage will develop and administer [*] message boards pertaining to topics mutually determined by the Parties. The first message board shall be live on or about January 4, 1999, or in conjunction with the launch of the Bridge Site. + + F. During the Promotional Period, iVillage will place special Ford-branded text links, newsletter mentions, hotlinks and taglines throughout the Network. FMC shall have prior approval over all iVillage uses of any, Ford Mark, as defined below. In the event that any of the Ford-branded links and/or mentions set forth in this Section 2.F. are, in FMC's reasonable judgment, materially injurious to FMC. FMC shall provide written notice of such offense to iVillage. iVillage shall then have one (1) business day in which to cure said offense. + +3. Reporting. During the Promotion Period, iVillage agrees to provide FMM with biweekly reports in connection with the promotional obligations set forth in this Agreement in addition to semi-annual executive reviews with iVillage management. All traffic reports shall be audited by the third party traffic auditor selected pursuant to Section 2.C.(ii). iVillage shall also provide, on a timely basis, impression tracking reports from a third party tracking system, confirming guaranteed impression delivery. + +4. Exclusivity. For the Initial Term of this Agreement, iVillage agrees that Ford shall be the exclusive automobile manufacturer sponsor and advertiser throughout the Network, with respect to entities whose primary business is that of an automotive manufacturer and/or retailer. For purposes of this Agreement, the term "retailer" shall refer to an entity which sells new and/or used vehicles. In addition, in the event that iVillage desires to form a sponsorship relationship with an automobile rental company during the term of this Agreement, iVillage shall notify Hertz and provide Hertz with an opportunity to enter into such a relationship with iVillage, on not less favorable terms than those offered to any other automobile rental company. Once presented with an opportunity, Hertz shall have five (5) business days in which to accept or reject such terms. If iVillage does not receive Hertz's acceptance or rejection of such within the allotted time, iVillage shall deem Hertz's silence as rejection. The terms of any such relationship shall be mutually determined by the Parties. Notwithstanding the foregoing, FMC shall, on a non-exclusive basis, + + 3 + +be permitted to offer Ford Motor Credit car financing products related to the purchase of Ford vehicles. + +5. Fee. + + + + + + A. FMC agrees to pay iVillage, upon signing of this Agreement, an upfront, non-refundable, non-recoupable production and set up fee in the amount of [*]. In addition, FMM shall pay iVillage [*] in equal quarterly payments of [*] each, within ten (10) days after the end of each calendar quarter during 1999. + + B. In addition, FMM agrees to pay iVillage, [*] in equal quarterly payments of [*] each, within ten (10) days after the end of each calendar quarter during the year 2000. + +6. Representations and Warranties. Each Party hereby represents and warrants that: (a) it is a corporation duly organized and validly existing and in good standing under the laws of the state of incorporation; (b) it has full power and authority to enter into this Agreement and to perform its obligations hereunder; (c) it has obtained all permits, licenses, and other governmental authorizations and approvals required for its performance under this Agreement, and (d) the services to be rendered and the materials provided by each Party under this Agreement neither infringe nor violate any patent, copyright, trade secret, trademark, or other proprietary right of any third party. + +7. Proprietary Rights. Upon execution and delivery of this Agreement, iVillage assigns to FMC all right, title and interest in and to the content, design and intellectual property, rights created specifically for and unique to the Bridge Site, advertising units, and other promotional elements set forth in this Agreement (collectively, the "Materials"). Notwithstanding the foregoing, iVillage expressly retains all right, title and interest in and to the programs and software that are used in connection with the creation and operation of, but are not created specifically, for and unique to the Materials (the "iVillage Proprietary Materials"). FMC acknowledges and agrees that the iVillage Proprietary Materials are used by iVillage in creating and developing Web sites for itself and other parties. FMC further acknowledges and agrees that iVillage will be using certain licensed programs and software owned by third parties for portions of the development and creation of the Materials and that FMC will not acquire any right in or to those copyrighted materials. iVillage agrees to execute any and all necessary further documents that FMC may reasonably request to fully vest the intellectual property rights related to the Materials in FMC and, if requested, to reasonable assist FMC in registering such rights in the name of FMC. + +8. Publicity. iVillage, FMC and FMM agree to collaborate on a joint press release ("Press Release") to include information regarding the subject matter of this Agreement and quotes from iVillage, FMC and FMM sources. The distribution list shall be approved by both Parties no less than five (5) business days prior to the release date. The Press Release and any quotes from either Party's sources must be approved by the other Party's public relations department, which also must be made aware of any pre-briefings with outside parties at least five (5) days in advance of any pre-briefing. In addition, the iVillage and FMM public relations department, FMC and FMM must be informed, no less than five (5) days before the release date, of any third party who expresses interest in the Press Release. + + 4 + +9. Licenses. FMM grants to iVillage, during the Initial Term of this Agreement, a royalty-free, non-exclusive, worldwide license to use, reproduce and display Ford's tradenames, trademarks, service marks and logos (collectively, the "Marks") in connection with this Agreement. No right, title, license, or interest in any Marks owned by Ford or any of its affiliates is intended to be given to or acquired by iVillage by the execution of or the performance of this Agreement. iVillage shall not use the Marks for any purpose or activity except as expressly authorized or contemplated herein; + +10. Confidentiality. Except as expressly set forth herein, iVillage and FMM shall maintain in confidence the terms of this Agreement. It is expected that, pursuant to discussions to date and to this Agreement, the Parties may disclose to one another certain information ("Confidential Information"), as defined herein, which is considered by the disclosing Party to be proprietary or confidential information. Confidential Information is defined as any, information, communication or data, in any form, including, but not limited to oral, written, graphic or electromagnetic forms, models or samples, which the disclosing Party desires to protect against unrestricted disclosure or use, including without limitation, business information, financial data and marketing data. All Confidential Information shall remain the sole property, of the disclosing Party and its confidentiality shall be maintained and protected by the receiving Party with the same degree of care as the receiving Party uses for its own confidential and proprietary information and the receiving Party shall not disclose such Confidential Information to any third party. The restrictions of the use or disclosure of any Confidential Information shall not apply to any Confidential Information: (i) after it has become generally available to the public without breach of this Agreement by the receiving Party; (ii) is rightfully in the receiving Party's possession prior to disclosure to it by the disclosing Party; (iii) is independently developed by the receiving Party; (iv) is rightfully received by the receiving Party from a third party, without a duty of confidentiality; or (v) is required to be disclosed under operation of law. + +11. LIMITATION OF LIABILITY. NEITHER PARTY SHALL HAVE ANY LIABILITY HEREUNDER FOR ANY INDIRECT, SPECIAL, PUNITIVE OR CONSEQUENTIAL DAMAGES INCLUDING, WITHOUT LIMITATION, LOSS OF PROFIT OR BUSINESS OPPORTUNITIES, WHETHER OR NOT THE PARTY WAS ADVISED OF THE POSSIBILITY OF SUCH. + + EXCEPT AS EXPRESSLY SET FORTH HEREIN, NEITHER PARTY MAKES ANY, AND EACH PARTY HEREBY SPECIFICALLY DISCLAIMS ANY REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, REGARDING THE SERVICES CONTEMPLATED BY THIS AGREEMENT, INCLUDING ANY + + + + + +IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE AND IMPLIED WARRANTIES AFJSING FROM COURSE OF DEALING OR COURSE OF PERFORMANCE. + +12. Indemnification. + + A. iVillage agrees to indemnify, defend and hold harmless FMM and its client Ford Motor Company and their respective parents, subsidiaries, affiliates, successors and assigns from any and all third party losses, liabilities, damages, actions, claims, expenses and costs (including reasonable attorneys' fees) which result or arise out of or in connection with the breach of this + + 5 + +Agreement by iVillage or which result or arise out of or in connection with any material supplied by iVillage pursuant to this Agreement. + + B. FMM agrees to indemnify, defend and hold harmless iVillage and its parent, subsidiaries, affiliates, successors and assigns from any and all third party, losses, liabilities, damages, actions, claims, expenses and costs (including reasonable attorneys' fees) which result or arise out of or in connection with the breach of this Agreement by FMM or which result or arise out of or in connection with any material supplied by FMM or its client Ford Motor Company pursuant to this Agreement. + +13. General Provisions. + + A. Relationship of the Parties. Nothing contained herein shall imply any partnership, joint venture or agency relationship between the Parties and neither Party shall have the power to obligate or bind the other in any manner whatsoever, except to the extent herein provided. + + B. Severability. If any provision of this Agreement shall be declared by any court of competent Jurisdiction to be illegal, void or unenforceable, all other provisions of this Agreement shall not be affected and shall remain in full force and effect. + + C. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument. + + D. Notices. All notices, requests, demands, payments and other communications which are required or may be given under this Agreement shall be in writing and shall be deemed to have been duly given if delivered personally, telecopied or sent by nationally recognized overnight carrier, or mailed by certified mail, postage prepaid, return receipt requested, as follows: + + If to FMM: + + Ford Motor Media 500 Woodward Avenue Detroit, Michigan 48226-3428 Attention: Carol Wright Tel: (313) 964-2954 Fax: (313) 964-2315 + + If to iVillage: + + iVillage, Inc. 170 Fifth Avenue New York, New York 10010 Attention: Vice President Business/Legal Affairs Tel: (212) 206-3106 Fax: (212) 604-9133 + + 6 + +E. Force Majeur. Except as otherwise expressly provided in this Agreement, neither Party shall be liable for any breach of this Agreement for any delay or failure of performance resulting from any cause beyond such Party's reasonable control, including but not limited to the weather, strikes or labor disputes (other than as set forth in Section 1.B), war, terrorist acts, riots or civil disturbances, government regulations, acts of civil or military authorities, or acts of God provided the Party affected takes all reasonably necessary steps to resume full performance. In the event that the Network or the Bridge Site are unavailable for a substantial period of time due an event of force majeur or otherwise, iVillage agrees to use commercially reasonable efforts to "make good" any impressions lost as a result of such circumstance. + +F. Entire Agreement. This Agreement (i) constitutes the binding agreement between the Parties, (ii) represents the entire agreement between the Parties and supersedes all prior agreements relating to the subject matter contained herein and (iii) may not be modified or amended except in writing signed by the Parties. + +G. Survival. The following sections shall survive any termination or expiration of this Agreement: 6, 7, 10, 11, 12 and 13. + +H. Governing Law. Agreement shall be governed by, and construed in accordance with the laws of the State of New York without regard to the conflicts of laws principles thereof. + + + + + +I. Assignment. Neither Party shall sell, transfer or assign this Agreement or the rights or obligations hereunder, without the prior written consent of the other Party, such consent not to be unreasonably withheld or delayed. Notwithstanding the foregoing, upon prior written notice by Ford Motor Company to iVillage, this Agreement may be assigned by FMM to another advertising agency, and in such event, FMM will be released from all financial and other obligations under this Agreement. + +J. Headings. The headings of the various sections of this Agreement have been inserted for convenience of reference only. + + IN WITNESS WHEREOF, the Parties hereto have executed and delivered this Agreement as of the date first above written. + + 7 + +FOR FORD CENTRAL MEDIA FOR iVILLAGE, INC. + + /s/ Mark A. Kaline /s/ Steven Elkes - -------------------------------------- --------------------------------------- (Name) (Name + +Media Manager Vice President Business/]Legal Affairs - -------------------------------------- --------------------------------------- (Title) (Title) + + 1/12/99 12/18/98 - -------------------------------------- --------------------------------------- (Date) (Date) + + /s/ Mark A. Kaline /s/ Steven Elkes - -------------------------------------- --------------------------------------- (Signature) (Signature) + + 8 + + EXHIBIT A --------- + + Third Party Traffic Auditors + + ABC I/PRO PWC DoubleClick + + 9 \ No newline at end of file diff --git a/full_contract_txt/IbioInc_20200313_8-K_EX-10.1_12052678_EX-10.1_Development Agreement.txt b/full_contract_txt/IbioInc_20200313_8-K_EX-10.1_12052678_EX-10.1_Development Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..9badd8895c0a4e327ad95b34ff6e87a422293a0b --- /dev/null +++ b/full_contract_txt/IbioInc_20200313_8-K_EX-10.1_12052678_EX-10.1_Development Agreement.txt @@ -0,0 +1,117 @@ +Exhibit 10.1 NOTE: Certain information indicated with [***] in this document has been omitted from this exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed. MASTER JOINT DEVELOPMENT AGREEMENT This Master Joint Development Agreement ("Agreement") is between iBio Inc., a Public corporation, with a location at iBio Inc., 600 Madison Ave, Suite 01601 NY, NY 10022-1735 and Beijing CC-Pharming Ltd. of Beijing, China ("CC-Pharming"), a Chinese Corporation with a location at Shunyi District, Beijing, China, 101312, each of the foregoing being individually referred to as a "Party" and collectively as the "Parties". WHEREAS, iBio and CC-Pharming wish to establish a long-term working relationship for various joint research and development projects ("Projects") related to the development of various products, with the work for each Project to be described in a separate Statement of Work ("SOW") agreed by the Parties; WHEREAS, iBio has developed and owns proprietary technology used to produce proteins using proprietary vector systems that support transient gene expression and protein production in plants, and iBio has developed and/or acquired additional proprietary biopharmaceutical technology, cGMP manufacturing expertise ("iBio's Technology"), and a facility design team that provides capabilities for application to the development of biotherapeutics; and WHEREAS, iBio and CC-Pharming, wish to develop one or more biopharmaceuticals Product(s) (each a "Product") based on iBio's proprietary and patented plant-based protein production technology and know-how; WHEREAS, iBio and CC-Pharming wish to develop a long-term, mutually beneficial relationship for the production and sale of biopharmaceuticals in China and to form a collaborative business venture to be majority owned and controlled by CC-Pharming and minority owned by iBio; and NOW, THEREFORE, for good and valuable consideration as stated herein, the sufficiency of which is hereby expressly acknowledged by each Party, iBio and CC-Pharming agree as follows: 1.0 Limited Technology License 1.1 iBio hereby grants to CC-Pharming for the term of this Agreement, a nonexclusive, non- assignable, non-sublicensable, limited right and license to use iBio's Technology in order to manufacture, process, prepare, and obtain regulatory approval for the development and production of Product(s) and work to be performed under this Agreement. Each Product will be set forth in a separate Statement of Work in the form set forth in Appendix A, which will be signed by representatives of each Party with signing authority. Each phase of the project(s) will be subject to the terms and conditions set forth in this Agreement unless otherwise provided for or in a Statement of Work ("SOW"), including but not limited to project purpose, project phases, and a project budget. + +Master Joint Development Agreement iBio CC-Pharming Page 1 of 12 + +Source: IBIO, INC., 8-K, 3/13/2020 + + + + + +1.2 No right or license is being conveyed to CC-Pharming to export Products or to otherwise use the Technology in any country other than China. 1.3 iBio will work with CC-Pharming to perform a thorough Manufacturing Development Program based from an initial comprehensive two- day charrette to be held at its subsidiary iBio CDMO LLC facility in Bryan, Texas with the goals of CC-Pharming understanding the definitive capital expenditure necessary and initiating a preliminary design for the first Product. iBio will provide an architect, construction supervisor, mechanical engineer and process engineer with knowledge of the iBio CDMO facility currently in operation in Bryan, Texas. 1.4 CC-Pharming hereby expressly acknowledges the validity and highly confidential and proprietary nature of iBio's Technology and technical information, know-how, documents, materials, software, vectors, constructs, trade secrets, and other valuable business or scientific information that iBio will share with CC-Pharming in order to fulfill the purpose of this Agreement, namely, to form a legal structure for a collaborative business venture in which CC-Pharming and iBio shall share revenue from product sales. iBio's double-digit percentage, minority interest in this structure will provide compensation to iBio for providing CC-Pharming with a license to use iBio's Technology and enabling know-how and will provide CC-Pharming with ongoing and mutually agreed technology transfer services relevant to the evolving business and Product(s) of the collaborative venture. 1.5 The parties agree that the first product focus of the joint business collaboration will be a bio-better or bio-similar version of the therapeutic monoclonal antibody, rituximab. iBio will provide all necessary gene expression and vector technology for the transient expression and cGMP manufacturing of this protein in plants and will also provide pilot plant design services, construction consulting, product and process development services, training, quality management system design, and clinical planning and regulatory consulting. The tasks to be conducted in the first stage of the joint business collaboration will apply specifically to the rituximab product candidate but will be applicable, in part, to additional products to be selected by mutual agreement for development, with the timeline for such work to be determined by CC-Pharming. 1.5 Any milestones or completion dates set forth in a Statement of Work will be estimates only, and are not binding on the Parties. 2.0 Coordinators and Governance Terms 2.1 Project Technical Coordinators will be appointed by each the Parties for each Statement of Work. The Project Technical Coordinators will be responsible for exchanging information with the other Party, coordinating any visits and arranging all other matters pertinent to that Statement of Work. + +Master Joint Development Agreement iBio CC-Pharming Page 2 of 12 + +Source: IBIO, INC., 8-K, 3/13/2020 + + + + + +2.2 Agreement Administration. The Agreement administrator for each Party must be contacted regarding all business-related matters, including any proposed modifications to this Agreement, the phasing plan of the SOW, for each project. An iBio Agreement Administrator is to be named on or before the Effective Date of the First Phase of the SOW. A CC-Pharming Agreement Administrator is to be named on or before the Effective Date of the First Phase of the SOW. 2.4 Governance Terms 2.4.1 The Agreement Administrators shall oversee the overall direction and management of this Agreement and to provide guidance and direction when needed, which agreement shall be unanimous. The responsibilities of the Agreement Administrator for iBio and CC- Pharming will include the following: a) Perform oversight for each of the ongoing projects, per phase, under the SOW's. b) Agreement on any modifications to the tasks and responsibilities for an ongoing project under the SOW's, will fall under the oversight of the Agreement Administrators. c) Neither Agreement Administrator is authorized to modify or change any term or condition of the Agreement or the overall scope of work for any SOW. d) Review any disputes between or among the Parties, and, if resolution of the dispute cannot be achieved, escalate the dispute to the Designated Executives of iBio and CC-Pharming. "Designated Executive" means the executive designated by iBio and by CC-Pharming, who will be responsible for general oversight of the Agreement and for resolving issues that require escalation under this Agreement. iBio and CC-Pharming shall each inform the other of the name and contact information of their respective Designated Executives on or before the Effective Date of the first SOW. 2.4.2 The Agreement Administrators may agree to change the tasks, task responsibilities and milestones as set forth in a Statement of Work, provided the changes do not alter the overall scope of work in a phase of the SOW, which agreement shall not be unreasonably withheld. Any modifications to the overall scope of work of phase of the SOW must be reduced to writing as an amendment to the SOW and signed by authorized representatives of iBio and CC-Pharming. 2.4.3 The Agreement Administrators shall meet regularly as required during the term of this Agreement, but at least two (2) times each calendar year, at a mutually agreeable location, which agreement shall not be unreasonably withheld. The face-to-face meetings may be replaced with conference calls or video conferences upon request by a Party. 2.4.4 The Parties shall be responsible for their own respective costs incurred relating to their participation in oversight meetings. + +Master Joint Development Agreement iBio CC-Pharming Page 3 of 12 + +Source: IBIO, INC., 8-K, 3/13/2020 + + + + + +2.5 Each Party may change its Agreement Administrators, at any time, with written notice to the other Party. 3.0 Costs and Expenses 3.1 Upon execution of this Agreement and acceptance of iBio's proposal for the development of a Plant-Made Rituximab, and in consideration for providing the technology transfer contemplated herein, CC-Pharming shall pay iBio [***], which shall be paid as follows: 3.1.1 First payment of [***] is required to initiate the project: [***]. 3.1.2 Second payment of [***]. Due upon presentation of the following deliverables: a) Detailed design drawings of the pilot plant; b) Schematic design of the commercial facility; c) Purified antibody for pre-clinical testing and development; and d) The quality management system (QMS) development up to and including governance documents and governance standard operating procedures (SOP's). 3.1.3 Final payment of [***], due upon presentation of the following deliverables: a) Detailed Design drawings for the commercial facility; b) Completion of QMS documentation for rituximab including batch records, release documents, and assay SOPs; c) Completion of all training sessions and training documentation; d) Delivery of antibody drug substance for clinical trials; and e) Completion of a chemistry, manufacturing, and controls (CMC) document to support an (investigational new drug application (IND) or equivalent. 4.0 Inventions 4.1 Inventorship of inventions, developments, or discoveries first conceived or actually reduced to practice under this Agreement ("Agreement Inventions") will be determined under U.S. Patent Law. All inventions, developments, or discoveries made solely by iBio prior to this Agreement is, and shall be, the sole property of iBio. All inventions, developments, or discoveries made solely by CC- Pharming thereof prior to this Agreement is, and shall be, the sole property of CC-Pharming. 4.2 All rights to inventions, patentable or non-patentable, made solely by employees of iBio during the term of this Agreement shall belong solely to iBio. All rights to inventions, patentable or non-patentable, made solely by employees of CC-Pharming during the term of this Agreement shall belong solely to CC-Pharming. All rights to Agreement Inventions, patentable or non-patentable, made jointly by employees of iBio and employees of CC-Pharming ("Joint Inventions") will belong jointly to iBio and CC-Pharming, with inventorship determined as described in 35 U.S.C. § 262 and (Chin Patent Law). The Parties contemplate that each will benefit from Joint Inventions, as such, iBio will be responsible for direct control over the drafting and prosecution of any patents to Joint Inventions, with copy to CC- Pharming. The parties shall share equally in the costs of patent protection for Joint Inventions. + +Master Joint Development Agreement iBio CC-Pharming Page 4 of 12 + +Source: IBIO, INC., 8-K, 3/13/2020 + + + + + +4.3 Each Party shall promptly provide to the other Party a written invention disclosure of each Agreement Invention made by its employees that results directly from the present Agreement for worked performed under the SOWs herein. The other Party agrees to delay making public, by publication or otherwise, until the earlier of (a) the first filing of a patent application claiming the Agreement Invention by the Inventing Party; or (b) six months after the date the Agreement Invention is disclosed to the other Party; or (c) mutual agreement of the Parties that neither will pursue legal protection of an Agreement Invention. 4.5 Each disclosure shall be held in confidence and not revealed to any third party without the written consent of the other Party. The other Party must advise the Inventing Party in writing within 60 days of each disclosure to the other Party whether or not the other Party elects to negotiate a license agreement to obtain commercial rights to such Agreement Invention. In the event that the other Party elects to negotiate for a commercial license to an Agreement Invention, the Parties must initiate negotiation of a license agreement, with negotiations not to extend beyond ninety (90) days from notice of election without the consent of both Parties. The Parties will negotiate in good faith a license containing reasonable business terms common to the other party's field of commercial interest and proposed application. 5.0 Copyrights 5.1 Title to and the right to determine the disposition of any copyrights or copyrightable material first produced or composed in the performance of this research program ("Copyright Materials") will remain with the Party whose employees solely created such materials or works of authorship (the "Creating Party"). Copyright Materials that are jointly created by the Parties shall be jointly owned. Either Party may license and assign its rights to jointly owned Copyright Materials without the consent of or accounting to the other Party, subject to the applicable confidentiality obligations set forth in Section 7 of this Agreement and/or a SOW. 5.2 The Creating Party grants to the other Party a time-limited first right to negotiate a commercial license to use, reproduce, display, and perform commercially valuable Copyright Materials for commercial purposes, and to distribute and/or sublicense such commercially valuable Copyright Materials to third parties. The other Party must advise the Creating Party in writing within sixty (60) days following disclosure or delivery of such commercially valuable Copyright Materials to the other Party whether or not the other Party elects to negotiate a license agreement to obtain commercial rights to the Copyright Materials. In the event that the other Party elects to negotiate for a commercial license to Copyright Materials, the Parties must initiate negotiation of a license agreement, the negotiations not to extend beyond ninety (90) days from notice of election without the consent of both Parties. The Parties will negotiate in good faith a license containing reasonable business terms common to the other Party's field of commercial interest and proposed application. + +Master Joint Development Agreement iBio CC-Pharming Page 5 of 12 + +Source: IBIO, INC., 8-K, 3/13/2020 + + + + + +6.0 Term and Termination 6.1 The term of this Agreement ("Term") will begin on the date this Agreement is signed by the last signatory ("Effective Date") and remain in effect for [***]; provided, however, that the terms of this Agreement shall remain applicable to any SOW that was executed by the Parties prior to the expiration or termination of this Agreement but whose period of performance extends beyond the expiration or termination of this Agreement. 6.2 The term of any SOW will be as provided in the Statement of Work. 6.3 If either Party to this Agreement fails to perform or violates any material obligation of this Agreement, then, upon thirty (30) days written notice to the breaching Party specifying such failure or violation, the non-breaching Party may terminate this Agreement without liability, unless: (a) the failure or violation specified in the default notice has been cured within the thirty (30) day notice period; or (b) the failure or violation reasonably requires more than thirty (30) days to correct, and the breaching Party has begun substantial corrective action to remedy the failure or violation within the thirty (30) day notice period and diligently pursues such action, in which event, termination shall not be effective unless sixty (60) days has expired from the date of the default notice without such corrective action being completed and the failure or violation remedied. 7.0 Confidentiality 7.1 Except as provided in a Statement of Work and Article 5.3 regarding non-disclosure of Agreement Inventions, any information provided by either Party under this Agreement or under any Statement of Work will be treated as follows. 7.2 "Confidential Information" includes but is not limited to, technologies, discoveries, inventions, know-how, methods, procedures, trade secrets, business information and other proprietary intellectual property ("Information"). All such Information is considered by the parties to be secret and confidential and constitutes valuable commercial assets. 7.3 Each of the parties agrees that for five (5) years from the date of disclosure, the receiving Party agrees to limit disclosure of the disclosing Party's Confidential Information to those of the receiving party's employees and contractors, and employees and contractors of its Subsidiaries, who have a need to know it, and the receiving Party agrees to use the same care and discretion to avoid disclosure, publication or dissemination outside of those employees and contractors as the receiving Party does with similar information of its own which it does not desire to publish, disclose or disseminate. 7.4 The receiving Party may disclose Confidential Information if the disclosure is required by law, but the receiving Party must give the disclosing Party reasonably prior notice to allow the disclosing Party an opportunity to obtain a protective order. The obligations of Article 7.3 will not apply to information that is: + +Master Joint Development Agreement iBio CC-Pharming Page 6 of 12 + +Source: IBIO, INC., 8-K, 3/13/2020 + + + + + +a) already rightfully in the possession of the receiving Party or its Subsidiaries without an obligation of confidence; b) independently developed by the receiving Party of its Subsidiaries as evidenced by written documentation; c) publicly available when received by the receiving Party, or becomes publicly available through no fault of the receiving Party or its Subsidiaries; d) disclosed by the disclosing Party without obligation of confidence; or e) inherently disclosed by the receiving Party or its Subsidiaries in the use, distribution or marketing of any product or service. 7.5 The Parties agree that the disclosure of Confidential Information under this Agreement does not limit either Party from assigning or reassigning employees in any way. 7.6 Confidential Information must be identified as Confidential at the time of disclosure, and all material containing Confidential Information must have a restrictive marking. Any Confidential Information disclosed orally or visually must be summarized by the disclosing Party in writing and the writing must be provided to the receiving Party within twenty (20) days after the disclosure. In the case of inadvertent disclosure of Confidential information that was not marked as Confidential, the Disclosing Party has ten (10) business days from the time they discover that the information should have been marked Confidential, to inform the other Party of such a designation, and the parties agree to retroactively mark any such information as Confidential. 7.7 The parties agree that limitations on disclosure of Confidential information under section 7.3 shall last 5 years from signing date. 8.0 Representations, Warranties, Disclaimers and Limitation of Liability 8.1 ANY PROTOTYPES, MATERIALS, COMPONENT PARTS, DESIGNS, SPECIFICATIONS, KNOW-HOW, PROCEDURES, PROCESSES, DATA, INFORMATION, INVENTIONS AND WORK PERFORMED UNDER THIS AGREEMENT BY EITHER PARTY, ARE PROVIDED "AS IS", WITHOUT WARRANTY OF ANY KIND, EXPRESS OR IMPLIED. EACH PARTY SPECIFICALLY DISCLAIMS THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, AND ANY WARRANTY OF NONINFRINGEMENT OF PATENTS, COPYRIGHTS, OR ANY OTHER INTELLECTUAL PROPERTY RIGHT. 8.2 EACH PARTY ALSO SPECIFICALLY DISCLAIMS ANY GUARANTEE THAT IT WILL BE ABLE TO SUCCESSFULLY ACHIEVE THE DESIRED RESULTS REGARDING THE WORK UNDER ANY STATEMENT OF WORK, OR THAT ANY PROTOTYPE(S) WHICH MAY BE DEVELOPED PURSUANT TO THIS AGREEMENT WILL MEET ANY DEVELOPMENT OBJECTIVES, OR ANY REQUIREMENTS OF EITHER PARTY. THE FOREGOING NOTWITHSTANDING, EACH PARTY WILL MAKE REASONABLE GOOD FAITH EFFORTS TO COMPLETE THE ACTIVITIES DESCRIBED IN THE STATEMENTS OF WORK. FAILURE TO ACHIEVE THE DESIRED RESULTS UNDER A STATEMENT OF WORK DOES NOT CONSTITUTE BREACH OF CONTRACT. + +Master Joint Development Agreement iBio CC-Pharming Page 7 of 12 + +Source: IBIO, INC., 8-K, 3/13/2020 + + + + + +8.3 Except for claims arising out of Articles 4.3 and 7.0, or as may be set forth in a SOW, neither Party will be liable for any consequential damages, lost profits, lost savings, loss of anticipated revenue, or any exemplary, punitive, special or indirect damages, even if advised of their possibility. 8.4 CC-Pharming represents and warranties that it shall maintain all of iBio's Technology and technical information, how-how, documents, materials, software, vectors, constructs, trade secrets, and other valuable business or scientific information strictly confidential at all times, and shall take all steps necessary to safe-guard iBio's Technology and technical information with reasonable business care and will be of the same types as currently practiced by iBio to maintain its highly confidential information. 8.5 Equitable Relief for iBio. CC-Pharming acknowledges that a breach by CC-Pharming of this Agreement shall cause iBio irreparable damages, for which an award of damages would not be adequate compensation, and agrees that, in the event of a breach or threatened breach, iBio will be entitled to seek equitable relief, including a restraining order, injunctive relief, specific performance and any other relief that may be available from any court, in addition to any other remedy to which iBio may be entitled at law or in equity. iBio's equitable remedies are not exclusive but are in addition to all other remedies available at law or in equity. 8.6 Attorney's Fees. In the event that any claim, suit, action or proceeding is instituted or commenced by any Party hereto against any other Party arising out of or related to this Agreement, the prevailing Party will be entitled to recover its reasonable attorneys' fees, expert fees, expenses and court costs from the non-prevailing Party. 9.0 General Provisions 9.1 Independent Contractor. Each Party is an independent contractor. Neither Party is, nor will claim to be, a legal representative, partner, franchisee, agent or employee of the other. Neither Party will assume or create obligations for the other. Each Party is responsible for the direction and compensation of its employees. 9.2 Trademarks. Except as otherwise provided herein, this Agreement does not confer any rights to use in advertising, publicity or other marketing activities any name, trade name, trademark, or other designation of either Party hereto, including any contraction, abbreviation, or simulation of any of the foregoing, without prior written agreement, and each Party agrees not to use or refer to this Agreement or its terms in any such activities without the express written approval of the other Party. + +Master Joint Development Agreement iBio CC-Pharming Page 8 of 12 + +Source: IBIO, INC., 8-K, 3/13/2020 + + + + + +9.3 Publication. iBio and CC-Pharming jointly, may publish and present technical presentations subject to Articles 5.2, 7.0 and this Article 9.2. 9.4 Notice. All notices shall be in writing and shall be valid and sufficient if sent by: (a) registered or certified mail, return receipt required, postage prepaid; (b) by facsimile (provided the receipt of the facsimile is evidenced by a printed record of completion of transmission); or (c) by express mail or courier service providing a receipt of delivery. Notice shall be effective upon receipt. The notices shall be addressed to: iBio, Inc. Beijing CC-Pharming Ltd. Robert L. Erwin Kevin Y. Wang President Chairman 600 Madison Ave, Suit 1601 Shunyi Distict New York, NY 10022-1737 U.S.A Beijing, China, 101312 Attn: Rober L. Erwin Attn: Kevin Y. Wang Either Party may change its address by a notice given to the other Party in the manner set forth above. 9.5 Force Majeure. Neither Party shall be liable for any failure or delay in the performance of its obligations under this Agreement if such failure or delay is due to acts of God, acts of the other Party, fire, flood, natural catastrophe, acts of any government or of any civil or military authority, national emergencies, riots, war, insurrection, strikes, or any occurrence beyond the reasonable control of such Party. 9.6 Export Restrictions. Each Party agrees to comply and to reasonably assist the other in complying with applicable government export and import laws and regulations. Further, each Party agrees that unless authorized by applicable government license or regulation, including but not limited to both US and China authorization, both Parties will not directly or indirectly export or re-export, at any time, any technology, software and/or commodities furnished or developed under this or any other, Agreement between the Parties, or its direct product, to any prohibited country (including release of technology, software and/or commodities to nationals, wherever they may be located, of any prohibited country) as specified in applicable export, embargo, and sanctions regulations. This section will survive after termination or expiration of this Agreement and will remain in effect until fulfilled. 9.7 No Implied Licenses. Except as expressly set forth in this Agreement, no license is granted, either directly or indirectly, by implication or estoppel or otherwise, to either Party under any patent, copyright or other intellectual property right of the other Party. 9.8 Assignment. Neither Party may assign its rights or delegate any of its duties under this Agreement without the prior written consent of the other Party. Any unauthorized assignment of this Agreement is void. 9.9 Intent. Neither Party relies on any promises, inducements, representations made by the other, or expectations of more business dealings except as expressly provided in this Agreement. This Agreement accurately states the Parties' agreement. + +Master Joint Development Agreement iBio CC-Pharming Page 9 of 12 + +Source: IBIO, INC., 8-K, 3/13/2020 + + + + + +9.10 Power to Enter Agreement. Each Party represents that it has, or will have, in place appropriate agreements with its employees or others whose services the Party may require, sufficient to enable such Party to comply with all the provisions of this Agreement. 9.11 Independent Parties. Each Party may have similar agreements with others, and may design, develop, manufacture, acquire or market competitive products and services, and conduct its business in whatever way it chooses. Each Party will independently establish prices and terms for its products and services. 9.12 Severability. If any provision of this Agreement is held to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall in no way be affected or impaired thereby so long as the intent of the Parties can be preserved. 9.13 Governing Law. This Agreement is governed by the laws of the State of Texas, without regard to the conflict of laws provisions thereof. Any proceedings to resolve disputes relating to this Agreement shall be brought only in the State of Texas and in a U.S. federal court if there is jurisdiction. The United Nations' Convention on International Sales of Goods does not apply. 9.14 Survival. Any rights and obligations which by their nature survive and continue after any expiration or termination of this Agreement shall survive and continue and shall bind the Parties and their successors and assigns, until such obligations are fulfilled. 9.15 No Oral Modifications. Any amendment or modification of this Agreement shall be in writing and shall be signed by authorized representatives of the Parties. No approval, consent or waiver will be enforceable unless signed by the granting Party. Failure to insist on strict performance or to exercise a right when entitled does not prevent a Party from doing so later for that breach, or a future breach. 9.16 Incorporation. This Agreement, Appendix A and SOW's added as Appendix A-x (where x is the sequential number of the respectively added SOW's) are the complete and exclusive agreement between the Parties regarding the subject matter hereof and supersedes any prior oral or written communications or understandings between the parties related to the subject matter hereof. 9.17 Independent Judgment. The Parties acknowledge that: (a) they had read this Agreement; (b) they understand the terms and conditions of this Agreement; (c) they have had the opportunity to seek legal counsel and advice; (d) are of equal bargaining power; and (e) they have relied on their own judgment in entering into this Agreement. Signature Page to Follow + +Master Joint Development Agreement iBio CC-Pharming Page 10 of 12 + +Source: IBIO, INC., 8-K, 3/13/2020 + + + + + +By signing below, the parties agree to the terms of this Agreement. iBio Inc. Beijing CC-Pharming Ltd. /s/ Robert L. Erwin /s/ Kevin Yueju Wang Name: Robert L Erwin Name: Kevin Yueju Wang Title: President Title: Chairman Date: August 07, 2018 Date: August 08, 2018 + +Master Joint Development Agreement iBio CC-Pharming Page 11 of 12 + +Source: IBIO, INC., 8-K, 3/13/2020 + + + + + +APPENDIX A-1 + +Proposal to Beijing CC-Pharming Ltd. Development of a Plant-Made Rituximab Prepared by iBio, Inc. for Beijing CC-Pharming Ltd., Beijing, China February 24, 2018 [***] Project Agreement Administrators For iBio: Robert L. Erwin For CC-Pharming: Kevin Y. Wang By signing below, the parties agree to the terms of this Statement of Work. IBio CC-Pharming /s/ Robert L. Erwin /s/ Kevin Yueju Wang Name: Robert L. Erwin Name: Kevin Yueju Wang Title: President Title: Chairman Date: August 7, 2018 Date: August 8, 2018 + +Master Joint Development Agreement iBio CC-Pharming Page 12 of 12 + +Source: IBIO, INC., 8-K, 3/13/2020 \ No newline at end of file diff --git a/full_contract_txt/IdeanomicsInc_20151124_8-K_EX-10.2_9354744_EX-10.2_Content License Agreement.txt b/full_contract_txt/IdeanomicsInc_20151124_8-K_EX-10.2_9354744_EX-10.2_Content License Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..3c819e234d9f03e85d2a7250813e21676244ea3c --- /dev/null +++ b/full_contract_txt/IdeanomicsInc_20151124_8-K_EX-10.2_9354744_EX-10.2_Content License Agreement.txt @@ -0,0 +1,173 @@ +Exhibit 10.2 FORM OF CONTENT LICENSE AGREEMENT THIS CONTENT LICENSE AGREEMENT (this "Agreement"), dated as of ___________, 2015 (the "Effective Date"), is entered into between Beijing Sun Seven Stars Culture Development Limited, a P.R.C. company with an address at Eastern Fangzheng Road, Southern Dongying Village, Hancunhe Town, Fangshan District, Beijing City, P.R.C. ("Licensor"), and YOU ON DEMAND HOLDINGS, INC., a Nevada corporation with an address at 375 Greenwich Street, Suite 516, New York, New York 10013 ("Licensee"). WHEREAS, Licensor and Licensee have agreed to enter into this Agreement, pursuant to which Licensor shall license to Licensee certain video programming on the terms and subject to the conditions contained in this Agreement. NOW, THEREFORE, in consideration of the foregoing, the mutual promises and covenants herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and incorporating the above recitals with and into this Agreement, the parties hereby agree as follows: TERMS AND CONDITIONS 1. Definitions. (a) "Additional Title" shall have the meaning specified in Section 5. (b) "Advertising" shall have the meaning specified in Section 9. (c) "Affiliate(s)" shall mean an entity controlling, controlled by or under common control with a party. "Control," for purposes of this definition, means direct or indirect ownership or control of more than 50% of the voting interests of the subject entity. (d) "Confidential Information" shall have the meaning specified in Section 14(a). (e) "Indemnified Party" shall have the meaning specified in Section 13. (f) "Indemnifying Party" shall have the meaning specified in Section 13. (g) "Licensor Marks" shall have the meaning specified in Section 11. (h) "Materials" shall have the meaning specified in Section 4(b). (i) "Mobile Sites" shall mean any and all versions of the Licensee Sites optimized for delivery and/or distribution via a wireless network. (j) "Reports" shall have the meaning specified in Section 8(b). + + 1 + +Source: IDEANOMICS, INC., 8-K, 11/24/2015 + + + + + + + + (k) "Share Consideration" has the meaning specified in Section 10. (l) "Sites" shall mean any and all websites, applications, products and other services through which Licensee (itself or through a third party) delivers content via the public Internet or an IP-based network, regardless of whether the device used to access such websites, applications, products or other services is a laptop or desktop computer, mobile device, tablet, mobile phone, set-top box, or other device. (m) "Term" shall have the meaning specified in Section 7. (n) "Territory" shall mean mainland China. (o) "Titles" shall mean the programming listed on Schedule A (as Schedule A may be amended in accordance with Section 5 from time to time). (p) "Users" shall mean all subscribers to Licensee's services. (q) "VOD" shall mean a system that allows for the exhibition of video programming chosen by a subscriber for display on that subscriber's video display unit on an on-demand basis, such that a subscriber is able, at his or her discretion, to select the time for commencement of exhibition, and shall include subscription VOD ("SVOD"), transactional VOD ("TVOD"), ad-supported VOD ("AVOD") and free VOD. 2. Rights Granted. (a) License Grant. In exchange for the Share Consideration, Licensor hereby grants to Licensee a non-exclusive, royalty-free, perpetual and non-perpetual license (subject to the duration for which Licensor has the rights to each Title as specified in Schedule A1-A5 of Schedule A) to: i. license, exhibit, distribute, reproduce, transmit, perform, display, and otherwise exploit and make available each Title within the Territory in any language by VOD (including SVOD, TVOD, AVOD and free VOD) for Internet, TV and mobile platforms (including, but not limited to, OTT streaming services, Sites and Mobile Sites), except that for Titles listed in Schedule A1-A2 of Schedule A, Licensor can only grant Licensee distribution rights to up to six (6) MSOs plus two (2) of China's Internet TV license holders or their OTT Internet- based video partners by VOD (including SVOD, TVOD, AVOD and free VOD). China's current Internet TV license holders include: CNTV (中国网络电视台/未来电视), BesTV (百视通), Wasu (华数), Southern Media Cooperation (南方传媒), Hunan TV (芒果TV), China National Radio/Galaxy Internet TV (GITV) (银河电视), and China Radio International (中国国际广播电台). + + 2 + +Source: IDEANOMICS, INC., 8-K, 11/24/2015 + + + + + + + + ii. copy and dub the Titles, and authorize any person to do the foregoing. Licensee shall also have the right to make (or have made on its behalf) translations of the Titles. iii. promote each Title in any manner or media, including, without limitation, the right to use and license others to use Licensor's name, the title of, trailers created for and excerpts from such Title (including but not limited to audio portions only), Materials and the name, voice and likeness of and any biographical material concerning all persons appearing in or connected with such Title for the purpose of advertising, promoting and/or publicizing such Title, Licensee and the program service on which the Title is exhibited; iv. use the Titles for (i) audience and marketing testing, (ii) sponsor/advertiser screening, and (iii) reference and file purposes; and v. include Licensee's name, trademark and logo in the Titles to identify Licensee as the exhibitor of the Titles. (b) Sublicensing. Licensee shall have the right to assign or sublicense any or all of its rights granted under this Agreement, in whole or in part, to third parties exhibiting the Titles in the ordinary course of Licensee's business with prior written notice to Licensor. Except as otherwise specified in the previous sentence, Licensee may not sublicense any of its rights under Section 2(a) without Licensor's prior written consent, which shall not be unreasonably withheld or delayed. (c) Display of Titles. Licensee agrees to display the Titles without material alteration to the content thereof. Licensee may modify or edit the format of the Titles for technical purposes. Nothing in this Agreement prevents Licensee from providing Users with the ability to use the Titles as permitted by law or in a manner for which a license is not required. (d) Removal of Titles. If Licensee receives written notice from Licensor that Licensor no longer has the rights to provide a Title to Licensee, Licensee shall use commercially reasonable efforts to remove such Title from Licensee's services. Nothing in this Agreement shall obligate Licensee to distribute, exhibit or otherwise use any Title. In addition, should Licensee deem any aspect of any Title as either inappropriate or otherwise objectionable or undesirable (whether for editorial, legal, business or other reasons), Licensee reserves the right, but does not assume the obligation, to discontinue distribution of such Title, without liability and without limiting any rights or remedies to which Licensee may be entitled, whether under this Agreement, at law, or in equity. (e) Profit Participation. For content listed in Schedule A6 of Schedule A, Licensor will only grant Licensee certain profit participation rights, for certain durations, as detailed and set forth in Schedule A6 of Schedule A. Licensee will not have distribution rights or any other rights to the content in Schedule A6 of Schedule A under Section 2(a)-(d). If for any reason the A6 projects do not get produced, SSS will + + 3 + +Source: IDEANOMICS, INC., 8-K, 11/24/2015 + + + + + + + + substitute comparable projects, to be mutually approved." [PRIOR TO EXECUTION OF THIS AGREEMENT, THE PARTIES WILL AGREE UPON APPROPRIATE LANGUAGE AND PROVISONS FOR THE PAYMENT OF PROFIT INTEREST, AUDIT RIGHTSS AND DISPUTE PROVISIONS.] 3. Licenses and Clearances. Licensor shall be solely responsible for the Titles and any and all legal liability resulting from the Titles, excluding any legal liability caused by Licensee's breach of this Agreement or gross negligence with regards to the Titles. Without limiting the generality of the foregoing, Licensor shall be solely responsible for any and all royalties and other fees payable to any applicable licensor(s) or any third party for distribution of the Titles by Licensee (including, without limitation, residuals and clearances or other payments to guilds or unions and rights for music clearances, such as performance rights, synchronization rights and mechanical rights), and all other fees, payments and obligations arising out of the activities contemplated by this Agreement, and Licensee shall have no responsibility or liability for any such royalties or fees. Licensor acknowledges that Licensee cannot and does not undertake to review, and shall not be responsible for Users' unauthorized use or exploitation of, the Titles. Should Licensee become aware of Users' unauthorized use or exploitation of the Titles, Licensee shall immediately report such use to Licensor. 4. Delivery Requirements; Customer Service. (a) Within fifteen (15) days after the Effective Date or on December 31, 2015 (whichever is earlier), Licensor shall (at Licensor's sole expense), make the Titles available either online or by hard drive to Licensee or the third-party vendor specified by Licensee to provide or deliver the Titles from Licensee's or its third-party vendor's facilities. Delivery of the Titles shall be deemed complete if Licensor makes the Titles available in accordance with the previous sentence. If, from time to time, Licensee requests an alternate delivery method for the Titles and/or the implementation of Licensee's technical specifications relating to the online delivery of the Titles, then Licensor will use commercially reasonable efforts to comply with each such request. (b) When Licensor delivers each Title to Licensee, Licensor shall provide Licensee (at the place specified by Licensee) with all available promotional materials for such Title, including, but not limited to, captioned photographs, brochures, a synopsis and description of such Title, a complete list of cast and credits, biographies of key performers, and any electronic press kits, trailers or featurettes created for such Title (collectively, the "Materials"). (c) In the event of technical problems with any of the Titles, each party shall use commercially reasonable efforts to notify the other and to remedy any such problems in a timely manner. + + 4 + +Source: IDEANOMICS, INC., 8-K, 11/24/2015 + + + + + + + + (d) Licensor will provide Licensee with reasonable assistance in responding to User inquiries regarding the Titles. 5. Additional Titles. If, during the Term, Licensor develops or obtains the rights to license any live action or animated feature-length motion picture (each an "Additional Title"), Licensor shall give Licensee the first right of negotiation for each Additional Title (i.e., the preferred vendor). Licensor will promptly provide written notice to Licensee in which Licensor lists each Additional Title. Should Licensee agree to be the vendor for an Additional Title, Licensor and Licensee will negotiate in good faith to mutually agree upon the pricing and terms for each Additional Title in an amendment to this Agreement. Licensor will deliver each Additional Title in accordance with Section 4(a). Unless otherwise expressly stated in such an amendment, each Additional Title listed in such an amendment will be deemed a "Title" and Schedule A will be deemed amended to include such Additional Title. 6. Expansion of Licensee's VOD Services. Licensor will use its partners and media channels to expand distribution of Licensee's VOD services to more cable MSOs and all other platforms for which Licensee is permitted to distribute the Titles under Section 2(a)(i). 7. Term and Termination. (a) The Term of this Agreement (the "Term") shall commence on the Effective Date listed above and continue for twenty (20) years, unless sooner terminated as provided in Section 7(b). (b) This Agreement may be terminated at any time by either party, effective immediately upon written notice, if the other party: (i) becomes insolvent; (ii) files a petition in bankruptcy; or (iii) makes an assignment for the benefit of its creditors. Either party may terminate this Agreement upon written notice if the other party materially breaches this Agreement and fails to cure such breach within thirty (30) days after the date that it receives written notice of such breach from the non-breaching party. (c) Sections 2(a), 2(b), 2(c), 2(d), 3, and 11 shall survive the expiration or termination of this Agreement: (i) in perpetuity with respect to Titles for which the licenses granted in Section 2(a) are perpetual; and (ii) for the duration of the applicable license term specified in Schedule A with respect to Titles for which the license term specified in Schedule A extends beyond the expiration or termination of this Agreement. Sections 1, 7, 8(a), 12, 13, 14, 15, 16 and 17 shall survive any expiration or termination of this Agreement in perpetuity. + + 5 + +Source: IDEANOMICS, INC., 8-K, 11/24/2015 + + + + + + + + 8. Privacy and Data Collection; Reports. (a) All User information (including, without limitation, any personally identifiable information and statistical information regarding Users' use and viewing of the Titles) generated, collected or created in connection with the display of the Titles through Licensee's services shall be considered Confidential Information of Licensee, and all right, title and interest in and to such information shall be owned by Licensee. (b) Licensee will provide Licensor with reports ("Reports") containing statistical information collected by Licensee on (i) Users' use of the Titles, (ii) distribution channels used by Licensee for the distribution of the Titles, (iii) sub-licensees to which the Titles were sub-distributed by Licensee and (if permitted under Licensee's agreements with the sublicensees) any relevant reports received by Licensee from those sublicensees, and (iv) any other information that the Licensor may request Licensee to gather from time to time, subject to mutual approval. The Reports will be delivered in a format that is mutually agreed upon by the parties. The Reports and all information contained in the Reports shall be considered Confidential Information of Licensee, and all right, title and interest in and to such Reports and information shall be owned by Licensee. 9. Advertising. The parties acknowledge and agree that Licensee's services may contain advertising, promotions and/or sponsorship material (collectively, "Advertising"). Such Advertising shall be determined by Licensee in its sole discretion and Licensee shall be entitled to retain all revenues resulting from the sale of Advertising. 10. Consideration. No royalty or fees of any kind shall be owed by Licensee under this Agreement. The consideration for the licenses granted by Licensor to Licensee under this Agreement is the issuance of the IP Common Shares as defined in the Securities Purchase Agreement, dated as of November 23, 2015, by and among the Licensee and the Licensor (the "Share Consideration"). 11. Use of Licensor Marks. Licensor hereby grants Licensee a non-exclusive license to use the logos, trademarks and service marks used by Licensor to identify the Titles (collectively, "Licensor Marks") in connection with the use of the Titles as set forth in this Agreement. Licensee acknowledges and agrees that Licensee's use of the Licensor Marks shall inure to the benefit of Licensor. Should Licensor find objectionable any use of the Licensor Marks by Licensee, Licensor shall have the right to revoke, with respect to the objectionable use, the rights granted to Licensee under this Agreement to use the Licensor Marks, and Licensee shall promptly cease using the Licensor Marks in the manner found objectionable by Licensor. + + 6 + +Source: IDEANOMICS, INC., 8-K, 11/24/2015 + + + + + + + + 12. Representations and Warranties. (a) Licensor represents and warrants that: i. The execution, delivery and performance of this Agreement have been duly authorized by all necessary corporate action on the part of Licensor and this Agreement constitutes a valid and legally binding agreement of Licensor enforceable against Licensor in accordance with its terms; ii. It will not take or authorize any action, or fail to take any action, by which any of the rights in any Title granted herein may be impaired in any way; iii. It has all rights and authority necessary to fully perform its obligations and grant the rights granted under this Agreement and all rights in and to the Titles and in and to all literary, artistic, dramatic, intellectual property and musical material included therein required for the exercise of rights granted in this Agreement without liability of any kind to any third party; provided however, that this representation and warranty shall not apply to non-dramatic performing rights in music to the extent that they are controlled by SESAC, ASCAP or BMI or to the extent that such music is in the public domain; iv. Each Title is and will be protected during the Term by copyright throughout the Territory; v. There are no taxes, charges, fees, royalties or other amounts owed to any party other than as set forth in this Agreement for the exercise of rights granted in this Agreement and Licensor has paid or will pay all charges, taxes, license fees and other amounts that have been or may become owed in connection with the Titles or the exercise of any rights granted under this Agreement; vi. Licensor shall make all payments which may become due to any union or guild and to any third parties who rendered services in connection with the production of the Titles by virtue of the use made of the Titles hereunder; vii. No claim or litigation is pending or threatened and no lien, charge, restriction or encumbrance is in existence with respect to any Title that would adversely affect or impair any of the rights granted under this Agreement; viii. The Titles, Materials and Licensor Marks will not violate or infringe any common law or statutory right of any person or other entity including, without limitation, any contractual rights, proprietary rights, trademark, service mark, copyright or patent rights, or any rights of privacy or publicity; ix. The Titles, Materials and the Licensor Marks will not be unlawful, slanderous or libelous; and x. To the extent that any Title makes any claims or renders any instruction or advice, such claim, instruction or advice shall comply with all federal, state and + + 7 + +Source: IDEANOMICS, INC., 8-K, 11/24/2015 + + + + + + + + other applicable laws and regulations and shall cause no harm to any person or entity following or acting in accordance with such instruction or advice. (b) Licensee represents and warrants that: i. The execution, delivery and performance of this Agreement have been duly authorized by all necessary corporate action on the part of Licensee and this Agreement constitutes a valid and legally binding agreement of Licensee enforceable against Licensee in accordance with its terms; ii. It will use the Titles solely as permitted under this Agreement; iii. It has the full right, capacity and authority to enter into this Agreement and to perform all of its obligations hereunder; and iv. As of the Effective Date, there is no claim, action, suit, investigation or proceeding relating to or affecting Licensee pending or threatened, in law or in equity, or any other circumstance which might adversely affect Licensee's ability to perform all of its obligations hereunder. 13. Indemnification. Each party shall defend, indemnify and hold the other party and its Affiliates, and their respective directors, officers, employees, agents, successors, assigns, licensees and distributors harmless from and against any and all judgments, settlements, damages, penalties, costs and expenses (including, but not limited to, reasonable attorneys' fees) arising out of any third party claims relating to the Indemnifying Party's breach or alleged breach of any of its representations, warranties, covenants or obligations hereunder. The party seeking indemnification (the "Indemnified Party") will give prompt notice to the indemnifying party (the "Indemnifying Party") of any claim for which the Indemnified Party seeks indemnification under this Agreement; provided, however, that failure to give prompt notice will not relieve the Indemnifying Party of any liability hereunder (except to the extent the Indemnifying Party has suffered actual material prejudice by such failure). The Indemnified Party will reasonably cooperate (at the Indemnifying Party's expense) in the defense of any claim for which the Indemnified Party seeks indemnification under this Section 13. The Indemnified Party shall have the right to employ separate counsel and to participate in (but not control) any such action, but the fees and expenses of such counsel will be at the expense of the Indemnified Party unless: (i) the employment of counsel by the Indemnified Party has been authorized by the Indemnifying Party; (ii) the Indemnified Party has been advised by its counsel in writing that there is a conflict of interest between the Indemnifying Party and the Indemnified Party in the conduct of the defense of the action (in which case the Indemnifying Party will not have the right to direct the defense of the action on behalf of the Indemnified Party); or (iii) the Indemnifying Party has not in fact employed counsel to assume the defense of the action within a reasonable time following receipt of the notice given pursuant to this Section 13, in each of which cases the fees and expenses of such counsel will be at the expense of the Indemnifying Party. The Indemnifying Party + + 8 + +Source: IDEANOMICS, INC., 8-K, 11/24/2015 + + + + + + + + will not be liable for any settlement of an action effected without its written consent (which consent will not be unreasonably withheld or delayed), nor will the Indemnifying Party settle any such action without the written consent of the Indemnified Party (which consent will not be unreasonably withheld or delayed). The Indemnifying Party will not consent to the entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving by the claimant or plaintiff to the Indemnified Party a release from all liability with respect to the claim. 14. Confidentiality. (a) Confidential Information. "Confidential Information" means all non-public information about the disclosing party's business or activities that is marked or designated by such party as "confidential" or "proprietary" at the time of disclosure or that reasonably would be understood to be confidential given the circumstances of disclosure. Notwithstanding the foregoing, Confidential Information does not include information that: (a) is in or enters the public domain without breach of this Agreement; (b) the receiving party lawfully receives from a third party without restriction on disclosure and without breach of a nondisclosure obligation; (c) the receiving party rightfully knew prior to receiving such information from the disclosing party; or (d) the receiving party develops entirely independently of, and without any access or reference to or use of, any Confidential Information communicated to the receiving party by the disclosing party. (b) Restrictions. Each party agrees that, during the Term and for two (2) years thereafter: (i) it will not disclose to any third party any Confidential Information disclosed to it by the other party except as expressly permitted in this Agreement; (ii) it will only permit access to Confidential Information of the disclosing party to those of its employees or authorized representatives or advisors (including, without limitation, the receiving party's auditors, accountants, and attorneys) having a need to know and who, prior to obtaining such access, are legally bound to protect the disclosing party's Confidential Information at least to the same extent as set forth herein; (iii) it will use any Confidential Information disclosed to it by the other party only for the purpose of performing its obligations or exercising its rights under this Agreement and not for any other purpose, whether for such party's own benefit or the benefit of any third party; (iv) it will maintain the confidentiality of all Confidential Information of the other party in its possession or control; and (v) that (x) upon the expiration or termination of this Agreement, or (y) at any time the disclosing party may so request, it will deliver promptly to the disclosing party, or, at the disclosing party's option, it will destroy, all Confidential Information of the disclosing party that it may then possess or have under its control. Notwithstanding the foregoing, each party may disclose Confidential Information of the other party to the extent required by a court of competent jurisdiction or other governmental authority or otherwise as required by law, provided that such party will, as soon as reasonably practicable, provide the disclosing party with written notice of such requirement so that the disclosing + + 9 + +Source: IDEANOMICS, INC., 8-K, 11/24/2015 + + + + + + + + party may seek a protective order or other appropriate remedy. The receiving party and its representatives will cooperate fully with the disclosing party to obtain any such protective order or other remedy. If the disclosing party elects not to seek, or is unsuccessful in obtaining, any such protective order or similar remedy and if the receiving party receives advice from reputable legal counsel confirming that the disclosure of Confidential Information is required pursuant to applicable law, then the receiving party may disclose such Confidential Information to the extent required; provided, however, that the receiving party will use commercially reasonable efforts to ensure that such Confidential Information is treated confidentially by each party to which it is disclosed. 15. Disclaimers. EXCEPT AS EXPRESSLY STATED IN SECTION 12, THE PARTIES HEREBY DISCLAIM ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, CONCERNING THE SUBJECT MATTER OF THIS AGREEMENT. 16. Limitation of Liability. EXCEPT FOR THE ABOVE INDEMNIFICATION OBLIGATIONS AND FOR BREACHES OF SECTION 14, NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY INCIDENTAL, CONSEQUENTIAL, SPECIAL OR PUNITIVE DAMAGES ARISING OUT OF THIS AGREEMENT (INCLUDING, BUT NOT LIMITED TO, LOSS OF PROFITS), WHETHER IN AN ACTION OR ARISING OUT OF BREACH OF CONTRACT, TORT OR ANY OTHER CAUSE OF ACTION EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. 17. Miscellaneous. (a) Governing Law. This Agreement shall be governed by and construed in all respects in accordance with the laws of the State of New York, without giving effect to any conflicts of laws principles. (b) Dispute Resolution. Any dispute, controversy and/or difference which may arise out of or in connection with or in relation to this Agreement, shall be solely and finally settled by binding arbitration pursuant to then-current rules of the International Chamber of Commerce. Such arbitration shall be held in New York, New York. The merits of the dispute shall be resolved in accordance with the laws of the State of New York, without reference to its choice of law rules. The tribunal shall consist of three arbitrators, each of whom shall be knowledgeable in the subject matter hereof. The arbitration shall be conducted in the English language, and all documents shall be submitted in English or be accompanied by a certified English translation. The arbitrators will provide a written explanation to the parties of any arbitration award. The award thereof shall be final and binding upon the parties hereto, and judgment on such award may be entered in any court or tribunal having jurisdiction, and the parties hereby irrevocably waive any objection to the jurisdiction of such courts based on any ground, + + 10 + +Source: IDEANOMICS, INC., 8-K, 11/24/2015 + + + + + + + + including without limitation, improper venue or forum non conveniens. The parties and the arbitration panel shall be bound to maintain the confidentiality of this Agreement, the dispute and any award, except to the extent necessary to enforce any such award. The prevailing party, if a party is so designated in the arbitration award, shall be entitled to recover from the other party its costs and fees, including attorneys' fees, associated with such arbitration. By agreeing to this binding arbitration provision, the parties understand that they are waiving certain rights and protections which may otherwise be available if a dispute between the parties were determined by litigation in court, including, without limitation, the right to seek or obtain certain types of damages precluded by this arbitration provision, the right to a jury trial, certain rights of appeal, and a right to invoke formal rules of procedure and evidence. Notwithstanding anything to the contrary herein, each party shall be entitled, at any time, without first resorting to the dispute resolution process set forth above, to seek injunctive or other equitable relief from any court of competent jurisdiction, wherever such party deems appropriate, in order to preserve or enforce such party's rights hereunder. (c) Non-Exclusivity. Nothing in this Agreement limits or restricts Licensee from entering into any similar agreements with any third party. (d) Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement. In the event that any provision of this Agreement is determined to be invalid, unenforceable or otherwise illegal, such provision shall be deemed restated, in accordance with applicable law, to reflect as nearly as possible the original intentions of the parties, and the remainder of the Agreement shall remain in full force and effect. (e) Waiver. No term or condition of this Agreement shall be deemed waived, and no breach shall be deemed excused, unless such waiver or excuse is in writing and is executed by the party against whom such waiver or excuse is claimed. (f) Entire Agreement. This Agreement contains the entire agreement and understanding between the parties with regard to the subject matter hereof, and supersedes all prior and contemporaneous oral or written agreements and representations with respect to such subject matter. This Agreement may be modified or amended only in a writing signed by all parties. (g) Jury Trial Waiver. THE PARTIES SPECIFICALLY WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY COURT WITH RESPECT TO ANY CONTRACTUAL, TORTIOUS, OR STATUTORY CLAIM, COUNTERCLAIM, OR CROSS-CLAIM AGAINST THE OTHER ARISING OUT OF OR CONNECTED IN ANY WAY TO THIS AGREEMENT, BECAUSE THE PARTIES HERETO, BOTH OF WHOM ARE REPRESENTED BY COUNSEL, BELIEVE THAT THE COMPLEX COMMERCIAL AND PROFESSIONAL ASPECTS OF THEIR DEALINGS WITH ONE ANOTHER MAKE A JURY DETERMINATION NEITHER DESIRABLE NOR APPROPRIATE. + + 11 + +Source: IDEANOMICS, INC., 8-K, 11/24/2015 + + + + + + + + (h) Assignment. Neither party may assign its rights, duties or obligations under this Agreement to any third party in whole or in part, without the other party's prior written consent, except that (i) Licensee may assign its rights and obligations to this Agreement to any of its Affiliate or subsidiaries with the prior written consent of the Licensor, and (ii) Licensor may assign its rights and obligations in this Agreement to its Affiliates or subsidiaries and either party may assign this Agreement in its entirety to any purchaser of all or substantially all of its business or assets pertaining to the line of business to which this Agreement relates or to any Affiliate of the party without the other party's approval. This Agreement will be binding upon, and inure to the benefit of, the respective permitted assignees, transferees and successors of each of the parties. (i) No Third Party Beneficiaries. The parties acknowledge and agree that there are no third party beneficiaries to this Agreement. (j) Interpretation. In interpreting the terms and conditions of this Agreement, no presumption shall be interpreted for or against a party as a result of the role of such party in the drafting of this Agreement. Sections headings are for convenience only and shall not be used to interpret this Agreement. (k) Notice. Any notice required or permitted by this Agreement shall be in writing and shall be delivered as follows, with notice deemed given upon receipt or refusal: (i) by overnight courier service; (ii) hand delivery; or (iii) by certified or registered mail, return receipt requested. Notice shall be sent to the addresses set forth below or to such other address as either party may specify in a notice given under this Section 17(k). If to Licensee: You On Demand Holdings, Inc. 375 Greenwich Street, Suite 516 New York, New York 10013 Attn: Mr. Xuesong Song With a copy (which shall not constitute notice or such other communication) to each of: Cooley LLP The Grace Building 1114 Avenue of the Americas New York, New York 10036-7798 Attn: William Haddad and Cooley LLP 101 California Street, 5th Floor San Francisco, California 94111-5800 Attn: Garth Osterman + + 12 + +Source: IDEANOMICS, INC., 8-K, 11/24/2015 + + + + + + + + If to Licensor: Beijing Sun Seven Stars Culture Development Limited Eastern Fangzheng Road Southern Dongying Village Hancunhe Town Fangshan District Beijing City, P.R.C. Attn: Zhang Jie With a copy (which shall not constitute notice or such other communication) to: Shanghai Sun Seven Stars Cultural Development Limited 686 WuZhong Road, Tower D, 9th Floor Shanghai, China 201103 Attn: Polly Wang (l) Press Releases. Unless required by law, neither party will, without the prior written approval of the other party, issue any press release or similar announcement relating to the existence or terms of this Agreement. (m) Counterparts. This Agreement may be executed in counterparts, all of which when taken together shall be deemed to constitute one and the same instrument. [Signature Page Follows] + + 13 + +Source: IDEANOMICS, INC., 8-K, 11/24/2015 + + + + + + + + IN WITNESS WHEREOF and intending to be legally bound hereby, the parties have executed this Content License Agreement as of the date first set forth above. LICENSOR: BEIJING SUN SEVEN STARS CULTURE DEVELOPMENT LIMITED By: Name: Bruno Wu Title: Chairman & CEO LICENSEE: YOU ON DEMAND HOLDINGS, INC. By: Name: Title: [SIGNATURE PAGE TO CONTENT LICENSE AGREEMENT] + + + +Source: IDEANOMICS, INC., 8-K, 11/24/2015 + + + + + + + + SCHEDULE A TITLES + + + +Source: IDEANOMICS, INC., 8-K, 11/24/2015 \ No newline at end of file diff --git a/full_contract_txt/IdeanomicsInc_20160330_10-K_EX-10.26_9512211_EX-10.26_Content License Agreement.txt b/full_contract_txt/IdeanomicsInc_20160330_10-K_EX-10.26_9512211_EX-10.26_Content License Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..de49c3740027357280471a9ddf2ff6fdbaa9659b --- /dev/null +++ b/full_contract_txt/IdeanomicsInc_20160330_10-K_EX-10.26_9512211_EX-10.26_Content License Agreement.txt @@ -0,0 +1,403 @@ +CONTENT LICENSE AGREEMENT + +THIS CONTENT LICENSE AGREEMENT (this "Agreement"), dated as of December 21, 2015 (the "Effective Date"), is entered into between Beijing Sun Seven Stars Culture Development Limited, a P.R.C. company with an address at Eastern Fangzheng Road, Southern Dongying Village, Hancunhe Town, Fangshan District, Beijing City, P.R.C. ("Licensor"), and YOU ON DEMAND HOLDINGS, INC., a Nevada corporation with an address at 375 Greenwich Street, Suite 516, New York, New York 10013 ("Licensee"). + +WHEREAS, Licensor and Licensee have agreed to enter into this Agreement, pursuant to which Licensor shall license to Licensee certain video programming on the terms and subject to the conditions contained in this Agreement. + +NOW, THEREFORE, in consideration of the foregoing, the mutual promises and covenants herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and incorporating the above recitals with and into this Agreement, the parties hereby agree as follows: + +TERMS AND CONDITIONS + +1. Definitions. + +(a) "Additional Title" shall have the meaning specified in Section 5. + +(b) "Advertising" shall have the meaning specified in Section 9. + +(c) "Affiliate(s)" shall mean an entity controlling, controlled by or under common control with a party. "Control," for purposes of this definition, means direct or indirect ownership or control of more than 50% of the voting interests of the subject entity. + +(d) "Confidential Information" shall have the meaning specified in Section 14(a) [Confidential Information]. + +(e) "Indemnified Party" shall have the meaning specified in Section 13. + +(f) "Indemnifying Party" shall have the meaning specified in Section 13. + +(g) "Licensor Marks" shall have the meaning specified in Section 11. + +(h) "Materials" shall have the meaning specified in Section 4(b) [4) For Titles listed in Schedule A5]. + +(i) "Mobile Sites" shall mean any and all versions of the Licensee Sites optimized for delivery and/or distribution via a wireless network. + +1 + +Source: IDEANOMICS, INC., 10-K, 3/30/2016 + + + + + +(j) "Reports" shall have the meaning specified in Section 8(b) [Privacy and Data Collection; Reports]. + +(k) "Share Consideration" has the meaning specified in Section 10. + +(l) "Sites" shall mean any and all websites, applications, products and other services through which Licensee (itself or through a third party) delivers content via the public Internet or an IP-based network, regardless of whether the device used to access such websites, applications, products or other services is a laptop or desktop computer, mobile device, tablet, mobile phone, set-top box, or other device. + +(m) "Term" shall have the meaning specified in Section 7. + +(n) "Territory" shall mean mainland China. + +(o) "Titles" shall mean the programming listed on Schedule A (as Schedule A may be amended in accordance with Section 5 from time to time). + +(p) "Users" shall mean all subscribers to Licensee's services. + +(q) "VOD" shall mean a system that allows for the exhibition of video programming chosen by a subscriber for display on that subscriber's video display unit on an on-demand basis, such that a subscriber is able, at his or her discretion, to select the time for commencement of exhibition, and shall include subscription VOD ("SVOD"), transactional VOD ("TVOD"), ad-supported VOD ("AVOD") and free VOD. + +2. Rights Granted. + +(a) License Grant. In exchange for the Share Consideration, Licensor hereby grants to Licensee a non-exclusive, royalty-free, perpetual and non-perpetual license (subject to the duration and scope, and format limitations for which Licensor has the rights to each Title as specified in Schedule A1-A6 of Schedule A) to: + +i. license, exhibit, distribute, reproduce, transmit, perform, display, and otherwise exploit and make available each Title within the Territory in any language by VOD (including SVOD, TVOD, AVOD and free VOD) for Internet, TV and mobile platforms (including, but not limited to, OTT streaming services, Sites and Mobile Sites), subject to these limitations for each of the Title in Schedule A1-A6: + +1) For Titles listed in Schedule A1-A2: + +Licensor can only grant Licensee distribution rights to up to six (6) MSOs plus two (2) of China's Internet TV license holders or their OTT Internet-based video partners by VOD (including SVOD, TVOD, AVOD and free VOD). China's current Internet TV license holders include: CNTV (中国网络电视台/未来电视), BesTV (百视通), Wasu (华数), Southern Media Cooperation (南方传媒), Hunan TV (芒果 TV), China National Radio/Galaxy Internet TV (GITV) (银河电视), and China Radio International (中国国际 广播电台); + +2 + +Source: IDEANOMICS, INC., 10-K, 3/30/2016 + + + + + +2) For Titles listed in Schedule A3: + +For "天下女人": No satellite TV broadcasting rights granted. Titles other than "猜 猜女人心", "赏深越慕" , "职场新女性挑战行动", " 杨澜访谈录" (自第192期及以后的节 目),"人生相对论 ", " 天下女人", and "正青春" cannot be edited in any way; + +3) For Titles listed in Schedule A4: + +Other than the versions (dubbed or translated) in which the Titles in Schedule A4 already exist in (and were delivered in), no further dubbing, translation, or editing may be performed by any party on Schedule A4's Titles. + +4) For Titles listed in Schedule A5 (except "Summer in February"): + +Limitations on Rights Granted: the following distribution methods are permitted: non-theatrical, public video, ship and hotel rights (all not earlier than the US theatrical release); home video rental, home video sell through, and commercial video rights (all not earlier than the US video release); cable TV (pay & free), terrestrial TV (pay & free), satellite pay TV; internet TV (pay & free), residential and non-residential pay-per-view, residential and non-residential internet pay-per-view, VOD, near VOD, and internet VOD (all no earlier than the corresponding exploitation in the USA). + +Contents are dubbed and subtitled in Cantonese and Mandarin languages. Exploitation of the Title over the internet must adhere to the following: 1) Distribution is limited to the dubbed or subtitled version, provided the subtitles shall be burnt in with no option to remove them, 2) Licensor must be notified prior to the first exhibition of the Title over the internet, and 3) Authorization to use excerpts, stills, trailers and soundtrack parts of the Title for the 3 promotion of the Title only on Licensor's or Licensor's authorized agent's web site online. + +Source: IDEANOMICS, INC., 10-K, 3/30/2016 + + + + + +Rights granted for "Summer in February", shall adhere to Section 2, not subject to the limitations in section 2(a)(i)(4). + +ii. copy and dub the Titles, and authorize any person to do the foregoing Licensee shall also have the right to make (or have made on its behalf) translations of the Titles with prior written approval by Licensor and subject to the applicable limitations (if any) in Section 2(a)(i) [License Grant]; + +iii. promote each Title in any manner or media, including, without limitation, the right to use and license others to use Licensor's name, the title of, trailers created for and excerpts from such Title (including but not limited to audio portions only), Materials and the name, voice and likeness of and any biographical material concerning all persons appearing in or connected with such Title for the purpose of advertising, promoting and/or publicizing such Title, Licensee and the program service on which the Title is exhibited subject to the applicable limitations (if any) in Section 2(a)(i) [License Grant] ; + +iv. use the Titles for (i) audience and marketing testing, (ii) sponsor/advertiser screening, and (iii) reference and file purposes, subject to the applicable limitations (if any) in Section 2(a)(i) [License Grant]; and + +v. include Licensee's name, trademark and logo in the Titles to identify Licensee as the exhibitor of the Titles. + +(b) Sublicensing. Licensee shall have the right to assign or sublicense any or all of its rights granted under this Agreement, in whole or in part, to third parties exhibiting the Titles in the ordinary course of Licensee's business with prior written notice to Licensor and subject to the applicable limitations (if any) in Section 2(a)(i) [License Grant]. Except as otherwise specified in the previous sentence, Licensee may not sublicense any of its rights under Section 2(a) [License Grant] without Licensor's prior written consent, which shall not be unreasonably withheld or delayed. + +(c) Display of Titles. Licensee agrees to display the Titles without material alteration to the content thereof. Licensee may make non-material modifications or edits the format of the Titles only for technical purposes with prior written approval by Licensor (such approval not to be unreasonably withheld or delayed) and subject to the applicable limitations (if any) in section 2(a)(i). Nothing in this Agreement prevents Licensee from providing Users with the ability to use the Titles as permitted by law or in a manner for which a license is not required. + +4 + +Source: IDEANOMICS, INC., 10-K, 3/30/2016 + + + + + +(d) Removal of Titles. If Licensee receives written notice from Licensor that Licensor no longer has the rights to provide a Title to Licensee, Licensee shall use commercially reasonable efforts to remove such Title from Licensee's services. Nothing in this Agreement shall obligate Licensee to distribute, exhibit or otherwise use any Title. In addition, should Licensee deem any aspect of any Title as either inappropriate or otherwise objectionable or undesirable (whether for editorial, legal, business or other reasons), Licensee reserves the right, but does not assume the obligation, to discontinue distribution of such Title, without liability and without limiting any rights or remedies to which Licensee may be entitled, whether under this Agreement, at law, or in equity. + +(e) Profit Participation. For content listed in Schedule A6 of Schedule A (each a "Project"), Licensor will only grant Licensee certain profit participation rights, for certain durations, as detailed and set forth in Schedule A6 of Schedule A. Licensee will not have distribution rights or any other rights to the content in Schedule A6 of Schedule A under Section 2(a) [License Grant]- (d). If for any reason the A6 projects do not get produced, SSS will substitute comparable projects, to be mutually approved. "Profit Participation" means a portion of Profits equal to the amount designated in Schedule A6 of Schedule A. "Profits" shall be defined and calculated as follows: + +i. "Profits" shall mean Gross Revenue received by Licensor in connection with the Project remaining after the deduction therefrom of Fees, Expenses, and Third Party Royalties (each as defined below). + +ii. "Gross Revenue" shall mean 100% of all sums actually received by or credited to Licensor in connection with the exploitation of the Project, for a period of 5 years from initial release, on a worldwide basis from the distribution and exploitation of the Project or any part thereof, provided that Gross Revenue shall not include (i) expenses in connection with collecting such Gross Revenue; (ii) actual, verifiable, third party, sales agency costs, fees and commissions which are mutually approved by the parties; (iii) customary "off the tops," including (without limitation) claims, insurance, accounting or other professional service costs actually paid by Producer or a reasonable reserve therefor. + +iii. "Fees" shall only apply to non-television, non-Internet exploitation of the Project (e.g., DVD, merchandise) and shall mean the actual, verifiable fee charged by a third party licensing agent or distributor, and mutually agreed to by Licensee and Licensor. + +iv. "Expenses" shall mean, collectively, all costs, charges and expenses incurred and/or paid (including without limitation residuals) in connection with the development, production, distribution, marketing, advertising and promotion of the Project. Expenses may include a producer or production fee to Licensor. + +5 + +Source: IDEANOMICS, INC., 10-K, 3/30/2016 + + + + + +v. "Third Party Royalties" shall mean any and all royalties and payments paid or payable to third parties for rights and/or services in connection with the Project. + +vi. Licensee shall have equal rights and access to all financial statements, records and/or data received from any entity in connection with the Project. Licensor shall compile this information (including information regarding approved budgets) on a annual basis and provide to Licensee in summary form, the calculation of Profit Participation for all of the parties, which shall be accompanied by the parties' share thereof, if any. Licensor will keep and maintain accurate books and records with respect to the Project. Until one (1) year after the expiration of the Profit Participation of each Project, the books and records will be available for inspection by a certified accounting firm or CPA once per year upon reasonable advance notice. Such books and records shall be made available at Licensor's normal place of business during normal business hours. If any examination of Licensor's books and records reveals that Licensor has failed to properly account for any Profits owing to the parties, Licensor will promptly pay such past due amounts. + +(f) Editing of Titles. Any edits to any Title will require the prior written approval by Licensor. + +3. Licenses and Clearances. + +Licensor shall be solely responsible for the Titles and any and all legal liability resulting from the Titles, excluding any legal liability caused by Licensee's breach of this Agreement or gross negligence with regards to the Titles. Without limiting the generality of the foregoing, Licensor shall be solely responsible for any and all royalties and other fees payable to any applicable licensor(s) or any third party for distribution of the Titles by Licensee (including, without limitation, residuals and clearances or other payments to guilds or unions and rights for music clearances, such as performance rights, synchronization rights and mechanical rights), and all other fees, payments and obligations arising out of the activities contemplated by this Agreement, and Licensee shall have no responsibility or liability for any such royalties or fees. Licensor acknowledges that Licensee cannot and does not undertake to review, and shall not be responsible for Users' unauthorized use or exploitation of, the Titles. Should Licensee become aware of Users' unauthorized use or exploitation of the Titles, Licensee shall immediately report such use to Licensor. + +4. Delivery Requirements; Customer Service. + +(a) Within fifteen (15) days after the Effective Date or on December 31, 2015 (whichever is earlier), Licensor shall (at Licensor's sole expense), make the Titles available either online or by hard drive to Licensee or the third-party vendor specified by Licensee to provide or deliver the Titles from Licensee's or its third-party vendor's facilities. Delivery of the Titles shall be deemed complete if Licensor makes the Titles available in accordance with the previous sentence. If, from time to time, Licensee requests an alternate delivery method for the Titles and/or the implementation of Licensee's technical specifications relating to the online delivery of the Titles, then Licensor will use commercially reasonable efforts to comply with each such request. + +6 + +Source: IDEANOMICS, INC., 10-K, 3/30/2016 + + + + + +(b) When Licensor delivers each Title to Licensee, Licensor shall provide Licensee (at the place specified by Licensee) with all available promotional materials for such Title, including, but not limited to, captioned photographs, brochures, a synopsis and description of such Title, a complete list of cast and credits, biographies of key performers, and any electronic press kits, trailers or featurettes created for such Title (collectively, the "Materials"). + +(c) In the event of technical problems with any of the Titles, each party shall use commercially reasonable efforts to notify the other and to remedy any such problems in a timely manner. + +(d) Licensor will provide Licensee with reasonable assistance in responding to User inquiries regarding the Titles. + +5. Additional Titles. + +If, during the Term, Licensor develops or obtains the rights to license any live action or animated feature-length motion picture (each an "Additional Title"), Licensor shall give Licensee the first right of negotiation for each Additional Title (i.e., the preferred vendor). Licensor will promptly provide written notice to Licensee in which Licensor lists each Additional Title. Should Licensee agree to be the vendor for an Additional Title, Licensor and Licensee will negotiate in good faith to mutually agree upon the pricing and terms for each Additional Title in an amendment to this Agreement. Licensor will deliver each Additional Title in accordance with Section 4(a) [4) For Titles listed in Schedule A5]. Unless otherwise expressly stated in such an amendment, each Additional Title listed in such an amendment will be deemed a "Title" and Schedule A will be deemed amended to include such Additional Title. + +6. Expansion of Licensee's VOD Services. + +Licensor will use its partners and media channels to expand distribution of Licensee's VOD services to more cable MSOs and all other platforms for which Licensee is permitted to distribute the Titles under Section 2(a)(i) [License Grant]. + +7. Term and Termination. + +(a) The Term of this Agreement (the "Term") shall commence on the Effective Date listed above and continue for twenty (20) years, unless sooner terminated as provided in Section 7(b) [Term and Termination]. + +7 + +Source: IDEANOMICS, INC., 10-K, 3/30/2016 + + + + + +(b) This Agreement may be terminated at any time by either party, effective immediately upon written notice, if the other party: (i) becomes insolvent; (ii) files a petition in bankruptcy; or (iii) makes an assignment for the benefit of its creditors. Either party may terminate this Agreement upon written notice if the other party materially breaches this Agreement and fails to cure such breach within thirty (30) days after the date that it receives written notice of such breach from the non-breaching party. + +(c) Sections 2(a) [License Grant], 2(b) [Sublicensing], 2(c) [Display of Titles], 2(d) [Removal of Titles], 3, and 11 shall survive the expiration or termination of this Agreement: (i) in perpetuity with respect to Titles for which the licenses granted in Section 2(a) [License Grant] are perpetual; and (ii) for the duration of the applicable license term specified in Schedule A with respect to Titles for which the license term specified in Schedule A extends beyond the expiration or termination of this Agreement. Sections 1, 7, 8(a) [Privacy and Data Collection; Reports], 12, 13, 14, 15, 16 and 17 shall survive any expiration or termination of this Agreement in perpetuity. + +8. Privacy and Data Collection; Reports. + +(a) All User information (including, without limitation, any personally identifiable information and statistical information regarding Users' use and viewing of the Titles) generated, collected or created in connection with the display of the Titles through Licensee's services shall be considered Confidential Information of Licensee, and all right, title and interest in and to such information shall be owned by Licensee. + +(b) Licensee will provide Licensor with reports ("Reports") containing statistical information collected by Licensee on (i) Users' use of the Titles, (ii) distribution channels used by Licensee for the distribution of the Titles, (iii) sub-licensees to which the Titles were sub- distributed by Licensee and (if permitted under Licensee's agreements with the sublicensees) any relevant reports received by Licensee from those sublicensees, and (iv) any other information that the Licensor may request Licensee to gather from time to time, subject to mutual approval. The Reports will be delivered in a format that is mutually agreed upon by the parties. The Reports and all information contained in the Reports shall be considered Confidential Information of Licensee, and all right, title and interest in and to such Reports and information shall be owned by Licensee. + +9. Advertising. + +The parties acknowledge and agree that Licensee's services may contain advertising, promotions and/or sponsorship material (collectively, "Advertising"). Such Advertising shall be determined by Licensee in its sole discretion and Licensee shall be entitled to retain all revenues resulting from the sale of Advertising. + +8 + +Source: IDEANOMICS, INC., 10-K, 3/30/2016 + + + + + +10. Consideration. + +No royalty or fees of any kind shall be owed by Licensee under this Agreement. The consideration for the licenses granted by Licensor to Licensee under this Agreement is the issuance of the IP Common Shares as defined in the Amended and Securities Purchase Agreement, dated as of December 21, 2015, by and among the Licensee and the Licensor (the "Share Consideration"). + +11. Use of Licensor Marks. + +Licensor hereby grants Licensee a non-exclusive license to use the logos, trademarks and service marks used by Licensor to identify the Titles (collectively, "Licensor Marks") in connection with the use of the Titles as set forth in this Agreement. Licensee acknowledges and agrees that Licensee's use of the Licensor Marks shall inure to the benefit of Licensor. Should Licensor find objectionable any use of the Licensor Marks by Licensee, Licensor shall have the right to revoke, with respect to the objectionable use, the rights granted to Licensee under this Agreement to use the Licensor Marks, and Licensee shall promptly cease using the Licensor Marks in the manner found objectionable by Licensor. + +12. Representations and Warranties. + +(a) Licensor represents and warrants that: + +i. The execution, delivery and performance of this Agreement have been duly authorized by all necessary corporate action on the part of Licensor and this Agreement constitutes a valid and legally binding agreement of Licensor enforceable against Licensor in accordance with its terms; + +ii. It will not take or authorize any action, or fail to take any action, by which any of the rights in any Title granted herein may be impaired in any way; + +iii. It has all rights and authority necessary to fully perform its obligations and grant the rights granted under this Agreement and all rights in and to the Titles and in and to all literary, artistic, dramatic, intellectual property and musical material included therein required for the exercise of rights granted in this Agreement without liability of any kind to any third party; provided however, that this representation and warranty shall not apply to non-dramatic performing rights in music to the extent that they are controlled by SESAC, ASCAP or BMI or to the extent that such music is in the public domain; + +9 + +Source: IDEANOMICS, INC., 10-K, 3/30/2016 + + + + + +iv. Each Title is and will be protected during the Term by copyright throughout the Territory; + +v. There are no taxes, charges, fees, royalties or other amounts owed to any party other than as set forth in this Agreement for the exercise of rights granted in this Agreement and Licensor has paid or will pay all charges, taxes, license fees and other amounts that have been or may become owed in connection with the Titles or the exercise of any rights granted under this Agreement; + +vi. Licensor shall make all payments which may become due to any union or guild and to any third parties who rendered services in connection with the production of the Titles by virtue of the use made of the Titles hereunder; + +vii. No claim or litigation is pending or threatened and no lien, charge, restriction or encumbrance is in existence with respect to any Title that would adversely affect or impair any of the rights granted under this Agreement; + +viii. The Titles, Materials and Licensor Marks will not violate or infringe any common law or statutory right of any person or other entity including, without limitation, any contractual rights, proprietary rights, trademark, service mark, copyright or patent rights, or any rights of privacy or publicity; + +ix. The Titles, Materials and the Licensor Marks will not be unlawful, slanderous or libelous; and + +x. To the extent that any Title makes any claims or renders any instruction or advice, such claim, instruction or advice shall comply with all federal, state and other applicable laws and regulations and shall cause no harm to any person or entity following or acting in accordance with such instruction or advice. + +(b) Licensee represents and warrants that: + +i. The execution, delivery and performance of this Agreement have been duly authorized by all necessary corporate action on the part of Licensee and this Agreement constitutes a valid and legally binding agreement of Licensee enforceable against Licensee in accordance with its terms; + +ii. It will use the Titles solely as permitted under this Agreement; + +iii. It has the full right, capacity and authority to enter into this Agreement and to perform all of its obligations hereunder; and + +iv. As of the Effective Date, there is no claim, action, suit, investigation or proceeding relating to or affecting Licensee pending or threatened, in law or in equity, or any other circumstance which might adversely affect Licensee's ability to perform all of its obligations hereunder. + +10 + +Source: IDEANOMICS, INC., 10-K, 3/30/2016 + + + + + +13. Indemnification. + +Each party shall defend, indemnify and hold the other party and its Affiliates, and their respective directors, officers, employees, agents, successors, assigns, licensees and distributors harmless from and against any and all judgments, settlements, damages, penalties, costs and expenses (including, but not limited to, reasonable attorneys' fees) arising out of any third party claims relating to the Indemnifying Party's breach or alleged breach of any of its representations, warranties, covenants or obligations hereunder. The party seeking indemnification (the "Indemnified Party") will give prompt notice to the indemnifying party (the "Indemnifying Party") of any claim for which the Indemnified Party seeks indemnification under this Agreement; provided, however, that failure to give prompt notice will not relieve the Indemnifying Party of any liability hereunder (except to the extent the Indemnifying Party has suffered actual material prejudice by such failure). The Indemnified Party will reasonably cooperate (at the Indemnifying Party's expense) in the defense of any claim for which the Indemnified Party seeks indemnification under this Section 13. The Indemnified Party shall have the right to employ separate counsel and to participate in (but not control) any such action, but the fees and expenses of such counsel will be at the expense of the Indemnified Party unless: (i) the employment of counsel by the Indemnified Party has been authorized by the Indemnifying Party; (ii) the Indemnified Party has been advised by its counsel in writing that there is a conflict of interest between the Indemnifying Party and the Indemnified Party in the conduct of the defense of the action (in which case the Indemnifying Party will not have the right to direct the defense of the action on behalf of the Indemnified Party); or (iii) the Indemnifying Party has not in fact employed counsel to assume the defense of the action within a reasonable time following receipt of the notice given pursuant to this Section 13, in each of which cases the fees and expenses of such counsel will be at the expense of the Indemnifying Party. The Indemnifying Party will not be liable for any settlement of an action effected without its written consent (which consent will not be unreasonably withheld or delayed), nor will the Indemnifying Party settle any such action without the written consent of the Indemnified Party (which consent will not be unreasonably withheld or delayed). The Indemnifying Party will not consent to the entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving by the claimant or plaintiff to the Indemnified Party a release from all liability with respect to the claim. + +14. Confidentiality. + +(a) Confidential Information. "Confidential Information" means all non-public information about the disclosing party's business or activities that is marked or designated by such party as "confidential" or "proprietary" at the time of disclosure or that reasonably would be understood to be confidential given the circumstances of disclosure. Notwithstanding the foregoing, Confidential Information does not include information that: (a) is in or enters the public domain without breach of this Agreement; (b) the receiving party lawfully receives from a third party without restriction on disclosure and without breach of a nondisclosure obligation; (c) the receiving party rightfully knew prior to receiving such information from the disclosing party; or (d) the receiving party develops entirely independently of, and without any access or reference to or use of, any Confidential Information communicated to the receiving party by the disclosing party. + +11 + +Source: IDEANOMICS, INC., 10-K, 3/30/2016 + + + + + +(b) Restrictions. Each party agrees that, during the Term and for two (2) years thereafter: (i) it will not disclose to any third party any Confidential Information disclosed to it by the other party except as expressly permitted in this Agreement; (ii) it will only permit access to Confidential Information of the disclosing party to those of its employees or authorized representatives or advisors (including, without limitation, the receiving party's auditors, accountants, and attorneys) having a need to know and who, prior to obtaining such access, are legally bound to protect the disclosing party's Confidential Information at least to the same extent as set forth herein; (iii) it will use any Confidential Information disclosed to it by the other party only for the purpose of performing its obligations or exercising its rights under this Agreement and not for any other purpose, whether for such party's own benefit or the benefit of any third party; (iv) it will maintain the confidentiality of all Confidential Information of the other party in its possession or control; and (v) that (x) upon the expiration or termination of this Agreement, or (y) at any time the disclosing party may so request, it will deliver promptly to the disclosing party, or, at the disclosing party's option, it will destroy, all Confidential Information of the disclosing party that it may then possess or have under its control. Notwithstanding the foregoing, each party may disclose Confidential Information of the other party to the extent required by a court of competent jurisdiction or other governmental authority or otherwise as required by law, provided that such party will, as soon as reasonably practicable, provide the disclosing party with written notice of such requirement so that the disclosing party may seek a protective order or other appropriate remedy. The receiving party and its representatives will cooperate fully with the disclosing party to obtain any such protective order or other remedy. If the disclosing party elects not to seek, or is unsuccessful in obtaining, any such protective order or similar remedy and if the receiving party receives advice from reputable legal counsel confirming that the disclosure of Confidential Information is required pursuant to applicable law, then the receiving party may disclose such Confidential Information to the extent required; provided, however, that the receiving party will use commercially reasonable efforts to ensure that such Confidential Information is treated confidentially by each party to which it is disclosed. + +15. Disclaimers. + +EXCEPT AS EXPRESSLY STATED IN SECTION 12, THE PARTIES HEREBY DISCLAIM ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, CONCERNING THE SUBJECT MATTER OF THIS AGREEMENT. + +12 + +Source: IDEANOMICS, INC., 10-K, 3/30/2016 + + + + + +16. Limitation of Liability. + +EXCEPT FOR THE ABOVE INDEMNIFICATION OBLIGATIONS AND FOR BREACHES OF SECTION 14, NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY INCIDENTAL, CONSEQUENTIAL, SPECIAL OR PUNITIVE DAMAGES ARISING OUT OF THIS AGREEMENT (INCLUDING, BUT NOT LIMITED TO, LOSS OF PROFITS), WHETHER IN AN ACTION OR ARISING OUT OF BREACH OF CONTRACT, TORT OR ANY OTHER CAUSE OF ACTION EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. + +17. Miscellaneous. + +(a) Governing Law. This Agreement shall be governed by and construed in all respects in accordance with the laws of the State of New York, without giving effect to any conflicts of laws principles. + +(b) Dispute Resolution. Any dispute, controversy and/or difference which may arise out of or in connection with or in relation to this Agreement, shall be solely and finally settled by binding arbitration pursuant to then-current rules of the International Chamber of Commerce. Such arbitration shall be held in New York, New York. The merits of the dispute shall be resolved in accordance with the laws of the State of New York, without reference to its choice of law rules. The tribunal shall consist of three arbitrators, each of whom shall be knowledgeable in the subject matter hereof. The arbitration shall be conducted in the English language, and all documents shall be submitted in English or be accompanied by a certified English translation. The arbitrators will provide a written explanation to the parties of any arbitration award. The award thereof shall be final and binding upon the parties hereto, and judgment on such award may be entered in any court or tribunal having jurisdiction, and the parties hereby irrevocably waive any objection to the jurisdiction of such courts based on any ground, including without limitation, improper venue or forum non conveniens. The parties and the arbitration panel shall be bound to maintain the confidentiality of this Agreement, the dispute and any award, except to the extent necessary to enforce any such award. The prevailing party, if a party is so designated in the arbitration award, shall be entitled to recover from the other party its costs and fees, including attorneys' fees, associated with such arbitration. By agreeing to this binding arbitration provision, the parties understand that they are waiving certain rights and protections which may otherwise be available if a dispute between the parties were determined by litigation in court, including, without limitation, the right to seek or obtain certain types of damages precluded by this arbitration provision, the right to a jury trial, certain rights of appeal, and a right to invoke formal rules of procedure and evidence. Notwithstanding anything to the contrary herein, each party shall be entitled, at any time, without first resorting to the dispute resolution process set forth above, to seek injunctive or other equitable relief from any court of competent jurisdiction, wherever such party deems appropriate, in order to preserve or enforce such party's rights hereunder. + +13 + +Source: IDEANOMICS, INC., 10-K, 3/30/2016 + + + + + +(c) Non-Exclusivity. Nothing in this Agreement limits or restricts Licensee from entering into any similar agreements with any third party. + +(d) Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement. In the event that any provision of this Agreement is determined to be invalid, unenforceable or otherwise illegal, such provision shall be deemed restated, in accordance with applicable law, to reflect as nearly as possible the original intentions of the parties, and the remainder of the Agreement shall remain in full force and effect. + +(e) Waiver. No term or condition of this Agreement shall be deemed waived, and no breach shall be deemed excused, unless such waiver or excuse is in writing and is executed by the party against whom such waiver or excuse is claimed. + +(f) Entire Agreement. This Agreement contains the entire agreement and understanding between the parties with regard to the subject matter hereof, and supersedes all prior and contemporaneous oral or written agreements and representations with respect to such subject matter. This Agreement may be modified or amended only in a writing signed by all parties. + +(g) Jury Trial Waiver. THE PARTIES SPECIFICALLY WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY COURT WITH RESPECT TO ANY CONTRACTUAL, TORTIOUS, OR STATUTORY CLAIM, COUNTERCLAIM, OR CROSS-CLAIM AGAINST THE OTHER ARISING OUT OF OR CONNECTED IN ANY WAY TO THIS AGREEMENT, BECAUSE THE PARTIES HERETO, BOTH OF WHOM ARE REPRESENTED BY COUNSEL, BELIEVE THAT THE COMPLEX COMMERCIAL AND PROFESSIONAL ASPECTS OF THEIR DEALINGS WITH ONE ANOTHER MAKE A JURY DETERMINATION NEITHER DESIRABLE NOR APPROPRIATE. + +(h) Assignment. Neither party may assign its rights, duties or obligations under this Agreement to any third party in whole or in part, without the other party's prior written consent, except that (i) Licensee may assign its rights and obligations to this Agreement to any of its Affiliate or subsidiaries with the prior written consent of the Licensor, and (ii) Licensor may assign its rights and obligations in this Agreement to its Affiliates or subsidiaries and either party may assign this Agreement in its entirety to any purchaser of all or substantially all of its business or assets pertaining to the line of business to which this Agreement relates or to any Affiliate of the party without the other party's approval. This Agreement will be binding upon, and inure to the benefit of, the respective permitted assignees, transferees and successors of each of the parties. + +14 + +Source: IDEANOMICS, INC., 10-K, 3/30/2016 + + + + + +(i) No Third Party Beneficiaries. The parties acknowledge and agree that there are no third party beneficiaries to this Agreement. + +(j) Interpretation. In interpreting the terms and conditions of this Agreement, no presumption shall be interpreted for or against a party as a result of the role of such party in the drafting of this Agreement. Sections headings are for convenience only and shall not be used to interpret this Agreement. + +(k) Notice. Any notice required or permitted by this Agreement shall be in writing and shall be delivered as follows, with notice deemed given upon receipt or refusal: (i) by overnight courier service; (ii) hand delivery; or (iii) by certified or registered mail, return receipt requested. Notice shall be sent to the addresses set forth below or to such other address as either party may specify in a notice given under this Section 17(k) [Notice]. + +If to Licensee: + +You On Demand Holdings, Inc. 375 Greenwich Street, Suite 516 New York, New York 10013 Attn: Board of Directors + +With a copy (which shall not constitute notice or such other communication) to each of: Cooley LLP The Grace Building 1114 Avenue of the Americas New York, New York 10036-7798 Attn: William Haddad + +and Cooley LLP 101 California Street, 5th Floor San Francisco, California 94111-5800 Attn: Garth Osterman + +If to Licensor: + +Beijing Sun Seven Stars Culture Development Limited Eastern Fangzheng Road Southern Dongying Village + +15 + +Source: IDEANOMICS, INC., 10-K, 3/30/2016 + + + + + +Hancunhe Town Fangshan District Beijing City, P.R.C. Attn: Zhang Jie + +With a copy (which shall not constitute notice or such other communication) to: Shanghai Sun Seven Stars Cultural Development Limited 686 WuZhong Road, Tower D, 9th Floor Shanghai, China 201103 Attn: Polly Wang + +(l) Press Releases. Unless required by law, neither party will, without the prior written approval of the other party, issue any press release or similar announcement relating to the existence or terms of this Agreement. + +(m) Counterparts. This Agreement may be executed in counterparts, all of which when taken together shall be deemed to constitute one and the same instrument. + +[Signature Page Follows] + +16 + +Source: IDEANOMICS, INC., 10-K, 3/30/2016 + + + + + +IN WITNESS WHEREOF and intending to be legally bound hereby, the parties have executed this Content License Agreement as of the date first set forth above. + +LICENSOR: + +BEIJING SUN SEVEN STARS CULTURE DEVELOPMENT LIMITED + +By: /s/ Bruno Wu Name: Bruno Wu Title:Chairman & CEO + +LICENSEE: + +YOU ON DEMAND HOLDINGS, INC. + +By: /s/ Shane McMahon Name: Shane McMahon Title:Chairman + +[SIGNATURE PAGE TO CONTENT LICENSE AGREEMENT] + +Source: IDEANOMICS, INC., 10-K, 3/30/2016 + + + + + +SCHEDULE A + +TITLES + +[Attached] + +Source: IDEANOMICS, INC., 10-K, 3/30/2016 \ No newline at end of file diff --git a/full_contract_txt/ImineCorp_20180725_S-1_EX-10.5_11275970_EX-10.5_Distributor Agreement.txt b/full_contract_txt/ImineCorp_20180725_S-1_EX-10.5_11275970_EX-10.5_Distributor Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..791708e9efac17aa3b7ddd98ca912bf364f8b4d6 --- /dev/null +++ b/full_contract_txt/ImineCorp_20180725_S-1_EX-10.5_11275970_EX-10.5_Distributor Agreement.txt @@ -0,0 +1,69 @@ +EXHIBIT 10.5 NON-EXCLUSIVE DISTRIBUTOR AGREEMENT This Non-Exclusive Distributor Agreement (the "Agreement") is made and entered into as of this 19th day of July 2018, by and between iMine Corporation, (hereinafter referred to as "JRVS") and SUNWAI Technology, a Taiwanese company, with its principal office at 6th Floor, No. 258, Section 3, Nanjing East Road, Songshan District, Taipei 10051 (hereinafter referred to as the "Distributor"). RECITAL WHEREAS, Distributor desires to be, a nonexclusive distributor of JRVS for certain cryptocurrency mining rig products; JRVS wishes to sell its products through Distributor on a continuing basis on the terms and conditions set forth below. AGREEMENT NOW, THEREFORE, in consideration of the mutual agreements and covenants, JRVS and the Distributor agree as follows: 1. DEFINITIONS 1.1 "Confidential Information" of a party shall mean any information disclosed by that party to the other party pursuant to this Agreement which is in written, graphic, machine readable or other tangible form. Confidential Information may also include oral information disclosed by one party to the other pursuant to this Agreement. 1.2 "Customers" shall mean the purchasers of the Products whose principal offices and operations are located in the Territory. 1.3 "iMine Products" shall mean those Products known as cryptocurrency mining rigs and its parts and components, as JRVS and the Distributor shall maintain and modify from time to time. 1.4 "House Accounts" shall mean those Customers in the Territory who purchase Products directly from JRVS. 1.5 "Non-standard Products" shall mean those Products that are not standard mining rigs that require special testing, packaging or otherwise to be modified as requested by the Distributor and approved by JRVS in writing. 1.6 "Proprietary Rights" shall mean all rights in the Products and JRVS's Confidential Information, including, but not limited to, patents, copyrights, trademarks, trade names, know-how, show-how, and trade secrets, irrespective of whether such rights arise under U.S. or international intellectual property, unfair competition or trade secret laws. 1.7 "Products" shall mean the products offered by JRVS for sale to the Distributor; the Products shall include iMine cryptocurrency mining rigs and its parts and components. 1.8 "Territory" shall mean the geographic area of Taiwan. 2. APPOINTMENT 2.1 Appointment of Nonexclusive Distributor. Subject to the terms and conditions of this Agreement, JRVS appoints the Distributor, and the Distributor hereby accepts such appointment, as JRVS'S non-exclusive authorized distributor for sale of the Products to the Customers (other than House Account) in the Territory (as these terms are defined in Section 1.8, above). Under no circumstances shall Distributor sell Products for use outside the Territory. 1 + +Source: IMINE CORP, S-1, 7/25/2018 + + + + + +2.2 Designation of House Account. In the event JRVS notifies the Distributor that JRVS has designated a Customer of the Distributor as a new House Account, such Customer will become a House Account effective Ninety (90) days following such notice. At JRVS's sole discretion, JRVS may compensate the Distributor for extraordinary sales and distribution efforts rendered prior to the designation of the new House Account. 3. DISTRIBUTOR RESPONSIBILITIES 3.1 Market Promotion. The Distributor shall use its best efforts, consistent with prudent business practice, and shall devote such time as may be commercially reasonably necessary, to conduct an aggressive marketing and selling program and to promote the sale of the Products. 3.2 No Product Change. The Distributor shall not modify or change the Products in any way without the express prior written consent of JRVS. 3.3 Conflict of Interest. The Distributor shall not, during the term of this Agreement, directly or indirectly market, sell, distribute, solicit orders within the Territory for any products which are competitive with the iMine Products unless JRVS consents thereto in writing in advance, based upon the Distributor's full disclosure of the material facts in seeking such consent. Any such marketing, sale, distribution or solicitation of the competitive products is considered to be a material breach of this Agreement. 3.4 Reports. Distributor shall submit periodical reports to iMine to include information on how many buyers or potential buyers were contacted. 3.5 Compliance with Laws. The Distributor shall comply at its own expense with all applicable laws and regulations currently existing in Taiwan relating to the sale, distribution and promotion of the Products. Distributor shall not export, directly or indirectly, any Products or related information outside of Taiwan. 3.6 Feedbacks. The Distributor shall provide JRVS with prompt written notification of any comments or complaints about the Products that are made by Customers, and of any problems with the Products or their use that the Distributor becomes aware of. Such written notification shall be the property of JRVS, and shall be considered to be part of JRVS's Confidential Information. 3.7 Referral. The Distributor agrees to refer all prospective customers to JRVS when the Distributor cannot aggressively pursue distribution to such customers because of geographic location or any other reason; provided, however, that if the Distributor cannot aggressively pursue distribution because of price and/or volume, the parties will negotiate a reasonable referral fee to be mutually agreed upon. The Distributor shall also refer directly to JRVS inquiries relating to bundling, partnership or other business opportunities with third party vendors, hardware and system manufacturers and software developers. 3.8 Inventory. The Distributor shall maintain an inventory of Products in reasonably sufficient quantities to provide adequate and timely delivery to the Customers. At a minimum, such inventory shall include not less than the quantity of Products necessary to meet Distributor's reasonably anticipated demands for a thirty (30) day period. 3.9 Audits. JRVS shall be entitled at any time to audit the Distributor's books and records upon reasonable notice in order to confirm the accuracy of the Reports set forth in Section 3.4; provided, that no more than one such audit may be conducted in any three-month period. Any JRVS-elected audit shall be performed at JRVS's own expense during normal business hours; Distributor shall provide reasonable assistance to JRVS for the audit. Additionally, the Distributor shall provide JRVS with its audited financial statements within three (3) months of the end of its fiscal year. 4. ORDERS AND ACCEPTANCE 4.1 Rolling Forecast. The Distributor shall provide JRVS at least one month in advance with a good faith rolling quarterly sales forecast for the units of the Products to be provided by JRVS to the Distributor hereunder during each month in such calendar quarter. Subject to Section 4.4, not later than the 15t h day of each month, Distributor will provide JRVS with a binding purchase order for the third month following the month in which the purchase order is placed and a non-finding forecast for the following three months (i.e., the fourth, fifth and sixth months following the month in which the forecast is given. 2 + +Source: IMINE CORP, S-1, 7/25/2018 + + + + + +4.2 Purchase Orders. The Distributor shall initiate purchases under this Agreement by submitting written purchase orders (each, an "Order") to JRVS. Such orders shall state unit quantities, unit descriptions, requested delivery dates, and shipping instructions. No purchase order shall be binding upon JRVS until accepted by JRVS in writing. JRVS reserves the right to reject orders in whole or in part. Partial shipment of an order shall not constitute acceptance of the entire order. In the event that JRVS is unable to fill an accepted purchase order in accordance with the schedule set forth therein as long as the purchase order does not exceed 110% of the iMine Products set forth on the most recent forecast for such month, JRVS will use commercially reasonable efforts to fill such order on an allotment basis. This Agreement shall govern all orders placed by the Distributor for units of the Product. No terms on purchase orders, invoices or like documents produced by the Distributor shall alter or add to the terms of this Agreement. Any other terms and conditions of sale in conflict with or inconsistent with the terms and conditions of this Agreement, whether contained in the Distributor's preprinted forms or otherwise, notwithstanding JRVS's acceptance otherwise, shall have no force or effect to the extent of such conflict or inconsistency. 4.3 Order Requirements. The Distributor's single purchase order amount shall be a minimum of five units. Non-standard Products may have higher minimum purchase requirements and longer lead time as determined by JRVS. 4.4 Lead Time. The Distributor shall submit purchase orders to JRVS in accordance with a lead time of twenty-eight (28) to one hundred and twenty (120) days according to the schedule advised by JRVS. In no event shall the lead time for Non-standard Products be less than two (2) months. JRVS shall use commercially reasonable efforts to deliver units of Product at the times set forth in JRVS's written acceptances of the Distributor's purchase orders. 4.5 Demonstration Units. Orders by Distributor for samples and/or pilot run may be subject to smaller amount and shorter cycle time as shall be requested by Distributor and accepted by JRVS. In such cases, products may be ordered in multiples of smaller units (calculated in number of reels or tubes), and in no events shall exceed three such units. 4.6 Cancellations. Except as provided herein, all Orders for Products are non-cancelable, and Products are non-returnable (NC/NR). Subject to JRVS's written approval, orders for mining rigs may be rescheduled or cancelled subject to the cancellation fees, which are based on the number of days in advance of the scheduled shipment date that the Distributor notifies JRVS of cancellation and shall be set by JRVS from time to time. The Nonstandard Products are at all times non-cancelable. Distributor shall contact JRVS in advance for pricing and delivery information for orders of Non-standard Products. 5.1 JRVS Price. Subject to the terms and conditions of this Agreement, the Distributor shall pay for the Products at the then current price of JRVS (the "JRVS Price") at the time of placement of the Order. 5.2 Price Change. JRVS shall have the right to revise JRVS Price at any time. Price changes shall apply to all purchase orders received after the effective date with the notice, except that any price increase shall be effective immediately upon notice to Distributor and apply to those accepted but undelivered orders. 5.3 Special Pricing. Notwithstanding the JRVS Price, special pricing on any one of the Products may be extended to the Distributor, in JRVS sole discretion, in situations where special pricing is necessary for the Distributor to obtain sale of the Products to a Customer. If JRVS elects to extend such special pricing, it will issue a confidential meet comp quote number documenting the special price quoted. Upon receipt of the meet comp quote number, the Distributor may ship the Products to the Customer from stock and debit JRVS for the difference between their invoiced amount, less any prior credits granted by JRVS, and the new special pricing. The meet comp quote number shall be included on all such debits. 5.4 Taxes. All JRVS Prices are exclusive of any export, withholding, federal, state and local taxes, duties or excises other than taxes based on JRVS's net income. If JRVS pays any taxes, duties or excises which are not included in the fees charged for the Product, JRVS shall itemize such taxes, duties or excises as a separate item on its invoices to the Distributor, and the Distributor shall reimburse JRVS for such taxes, duties or excises; provided, that the Distributor shall not be required to make any such reimbursement if it provides a valid tax exemption certificate to JRVS prior to shipment. 3 + +Source: IMINE CORP, S-1, 7/25/2018 + + + + + +6. TERMS OF PAYMENT 6.1 Payment Terms. JRVS shall submit an invoice to the Distributor upon shipment of Products to the Distributor. The invoice shall state the amount to be paid by the Distributor for all Products in such shipment, as well as any taxes, duties or excises paid by JRVS which shall be reimbursed by the Distributor in accordance with Section 5.4. Terms of payment shall be net thirty (30) days. All payments shall be in U.S. Dollars. 6.2 Late Payments. All amounts which are not timely paid by the Distributor as required by this Agreement shall be subject to a late charge equal to one and one-half percent (1.5%) per month (or, if less, the maximum allowed by applicable law). In the event that any payment due hereunder is overdue, JRVS reserves the right to suspend performance until such delinquency is corrected. 7. DELIVERY 7.1 Packing and Shipping. All Products to the Distributor shall be packaged in JRVS's standard containers, or, at the Distributor's expense, in accordance with instructions provided by the Distributor, and shall be shipped to the Distributor's address set forth above, or to an address specified in the purchase order. Unless otherwise agreed, shipment shall conform to JRVS's standard shipping procedures, or such terms as both shall agree. Title and risk of loss shall pass to the Distributor at the Delivery Point. All customs duties, freight, insurance and other shipping expenses from the Delivery Point, as well as any other special packing expenses requested by the Distributor, shall be borne by the Distributor. The Distributor agrees to satisfy all import formalities pertaining to shipment of units of the Product to destinations outside the United States. 7.2 Inspection and Acceptance. The Distributor shall have thirty (30) days (the "Inspection Period") upon receipt of each shipment to inspect and test the Products. If the Distributor determines any unit of Products defective, the Distributor shall promptly notify JRVS of such defects. Defective Products may be returned for retest, evaluation and examination subject to JRVS Returned Material Authorization ("RMA") procedure; provided, that such written notification and request for an RMA number must be received by JRVS during the Inspection Period. Returns must be prepaid by Distributor. When requesting a return authorization, Distributor must supply Distributor's purchase order number and JRVS's invoice number. Product description must include lot number and wafer numbers. 7.3 Exclusion. JRVS will inspect all Products returned pursuant to the foregoing RMA procedures, and JRVS will not replace products where the defect is due to misuse, neglect, alteration or improper storage by the Distributor. 8. PROPRIETY RIGHTS 8.1 Acknowledgement. The Distributor acknowledge and agree that JRVS owns all of the Proprietary Rights. The use by the Distributor of the Proprietary Rights is authorized only for the purposes herein set forth and upon termination of this Agreement for any reason, such authorization will cease. 8.2 No Other Rights. The Distributor may not, directly or through any person or entity, in any form or manner, copy, distribute, reproduce, incorporate, use or allow access to the Products or modify, prepare derivative works of, decompile, reverse engineer, disassemble or otherwise attempt to derive source code or object code from the Products, except as explicitly permitted under this Agreement or otherwise agreed in writing. 8.3 Proprietary Notice. The Distributor will ensure that all copies of the Products will incorporate copyright and other proprietary notices in the same manner that JRVS incorporates such notices in the Products or in any manner reasonably requested by JRVS. The Distributor will not remove any copyright or other proprietary notices incorporated on or in the Products by JRVS. 8.4 Use of Trademarks. During the term of this Agreement, the Distributor may (i) announce to the public that it is an authorized non-exclusive the Distributor of the Products, and (ii) advertise the Products under the trademarks, service marks, marks, and trade names that JRVS may adopt from time to time (the "JRVS Trademarks"). JRVS shall provide the Distributor JRVS Trademarks on disk or camera-ready art for production. The Distributor understands that JRVS has applied for applicable federal and state registration of certain of its trademarks and agrees, upon JRVS's request, to so indicate on the box containing the Products and, in any advertisement,, promotional materials or other documents that contain the Products' names. Nothing herein will grant to the Distributor any right, title or interest in JRVS Trademarks. At no time during or after the term of this Agreement will the Distributor challenge or assist others to challenge JRVS Trademarks or the registration thereof or attempt to register any trademarks, marks or trade names confusingly similar to those of JRVS. The Distributor shall follow reasonable trademark usage guidelines communicated by JRVS. Distributor's use of JRVS's trademarks and trade names shall be subject to JRVS' prior approval and shall be used only in a manner consistent with JRVS' trademark use policy. 4 + +Source: IMINE CORP, S-1, 7/25/2018 + + + + + +8.5 Use of Trade Names. The Distributor will present and promote the sale of the Products fairly. The Distributor may use JRVS's product names in the Distributor's advertising and promotional media provided (i) that the Distributor conspicuously indicates in all such media that such names are trademarks of JRVS and (ii) that the Distributor submits all such media to JRVS for prior approval and complies with the requirements set forth in Section 8.4. Upon termination of this Agreement for any reason, the Distributor will immediately cease all use of Products' names and JRVS Trademarks and, at the Distributor's election, destroy or deliver to JRVS all materials in the Distributor's control or possession which bear such names and trademarks, including any sales literature. The Distributor will not challenge any intellectual property rights claimed by JRVS in such trademarks. 9. CONFIDENTIAL INFORMATION 9.1 Nondisclosure, Non Use. Each party shall treat as confidential all Confidential Information of the other party, shall not use such Confidential Information except as set forth herein, and shall use reasonable efforts not to disclose such Confidential Information to any third party. Without limiting the foregoing, each of the parties shall use at least the same degree of care which it uses to prevent the disclosure of its own confidential information of like importance to prevent the disclosure of Confidential Information disclosed to it by the other party under this Agreement. Each party shall promptly notify the other party of any actual or suspected misuse or unauthorized disclosure of the other party's Confidential Information. 9.2 Exception. Notwithstanding the above, neither party shall have liability to the other with regard to any Confidential Information of the other which the receiving party can prove: (a) was in the public domain at the time it was disclosed or has entered the public domain through no fault of the receiving party; (b) was known to the receiving party, without restriction, at the time of disclosure, as demonstrated by files in existence at the time of disclosure; (c) is disclosed with the prior written approval of the disclosing party; (d) was independently developed by the receiving party without any use of the Confidential Information, as demonstrated by files created at the time of such independent development; (e) becomes known to the receiving party, without restriction, from a source other than the disclosing party without breach of this Agreement by the receiving party and otherwise not in violation of the disclosing party's rights; (f) is disclosed generally to third parties by the disclosing party without restrictions similar to those contained in this Agreement; or (g) is disclosed pursuant to the order or requirement of a court, administrative agency, or other governmental body; provided, however, that the receiving party shall provide prompt notice thereof to the disclosing party to enable the disclosing party to seek a protective order or otherwise prevent or restrict such disclosure. 9.3 Return of Confidential Information. Upon expiration or termination of this Agreement, each party shall return all Confidential Information received from the other party. 9.4 Remedies. Any breach of the restrictions contained in this Section 9 is a breach of this Agreement which may cause irreparable harm to the nonbreaching party. Any such breach shall entitle the nonbreaching party to injunctive relief in addition to all legal remedies. 5 + +Source: IMINE CORP, S-1, 7/25/2018 + + + + + +10. LIMITED WARRANTY 10.1 Sole Warranty. THE SOLE WARRANTY, IF ANY, PROVIDED IN CONNECTION WITH THE PRODUCT SHALL BE PROVIDED BY THE COMPONENT MANUFACTURER. JRVS MAKES NO WARRANTIES TO THE DISTRIBUTOR OR CUSTOMERS. 10.2 Warranty Period. JRVS shall NOT provide a warranty of any kind for each of the Products against defects in material and workmanship under normal use and service from the date of delivery to the Distributor. 10.3 No Other Warranty. EXCEPT AS EXPRESSLY PROVIDED IN THIS SECTION 10, JRVS PROVIDES NO WARRANTY, EXPRESS, IMPLIED, STATUTORY, OR OTHERWISE, AND SPECIFICALLY DISCLAIMS ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, WITH RESPECT TO THE PRODUCT AND DOCUMENTATION. 11. INDEMNIFICATION 11.1 Indemnification by the Distributor. The Distributor agrees to indemnify, defend and hold JRVS and its affiliated companies and their directors, officers, employees, and agents (collectively, "Protected Parties") harmless from and against any and all claims (including those for personal injury or death) and liabilities (including attorneys' and other professional fees and other costs of litigation) by any other party arising out of or attributable to the Distributor's representation of the Products in a manner inconsistent with JRVS's Product descriptions and warranties or from the Distributor's marketing, distribution, use or sale of the Products. 12. TERM AND TERMINATION 12.1 Term. This Agreement shall become effective upon the date first written above and shall remain in full force and effect for a period of two years (2), unless earlier terminated pursuant to the provisions in this Agreement. This Agreement shall expire unless extended by both parties in writing prior to the termination. 12.2 Termination for Convenience. This Agreement may be terminated by either party for any reason or no reason, whether or not extended beyond the initial term, by giving the other party written notice ninety (90) days in advance. 12.3 Termination for Cause. Except as set forth in the last sentence of this Section 12.3, if either party defaults in the performance of any material provision of this Agreement, then the non-defaulting party may give written notice to the defaulting party that if the default is not cured within thirty (30) days the Agreement will be terminated. If the non-defaulting party gives such notice and the default is not cured during the thirty (30) day period, then the Agreement shall automatically terminate at the end of that period. Notwithstanding the foregoing, if the Distributor breaches the provisions of Section 9 hereof, then JRVS shall be entitled to terminate this Agreement effective immediately upon delivery of written notice to the Distributor. 12.4 Termination for Insolvency and Other Events. This Agreement shall terminate, without notice, (i) upon the institution by or against either party of insolvency, receivership or bankruptcy proceedings or any other proceedings for the settlement of such party's debts, (ii) upon either party's making an assignment for the benefit of creditors, or (iii) upon either party's dissolution or ceasing to do business. 12.5 Effect of Termination. Upon termination of this Agreement, the Distributor shall make such disposition of price lists, advertising materials and other materials furnished by JRVS as JRVS may direct. JRVS's name, JRVS's Trademarks, and similar identifying symbols shall not be displayed or used by the Distributor thereafter. 12.6 No Liability. In the event of termination by either party in accordance with any of the provisions of this Agreement, neither party shall be liable to the other, because of such termination, for compensation, reimbursement or damages on account of the loss of prospective profits or anticipated sales or on account of expenditures, inventory, investments, leases or commitments in connection with the business or goodwill of either party. Termination shall not, however, relieve either party of any obligations incurred prior to the termination, including, without limitation, the obligation of the Distributor to pay JRVS for Products purchased prior to such termination. 12.7 Survival of Certain Terms. The provisions of Sections 1, 3.9, 5, 6, 8, 9, 10, 11, 12, 13, 14, and 15 of this Agreement, and all payment obligations incurred during the term of this Agreement, shall survive the expiration or termination of this Agreement for any reason. The provisions of Section 9 shall survive the expiration or termination of this Agreement for five (5) years. All other rights and obligations of the parties shall cease upon termination of this Agreement. 6 + +Source: IMINE CORP, S-1, 7/25/2018 + + + + + +13. LIMITATION OF LIABILITIES 13.1 Limitation of Liabilities. IN NO EVENT SHALL JRVS'S LIABILITY ARISING OUT OF THIS AGREEMENT EXCEED THE AMOUNT RECEIVED BY JRVS FROM THE DISTRIBUTOR HEREUNDER FOR THE PRODUCT GIVING RISE TO THE LIABILITY. IN NO EVENT SHALL JRVS BE LIABLE FOR COSTS OF PROCUREMENT OF SUBSTITUTE PRODUCTS OR SERVICES, LOST PROFITS OR ANY CONSEQUENTIAL, SPECIAL, INCIDENTAL, OR INDIRECT DAMAGES, HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY (INCLUDING NEGLIGENCE OR STRICT LIABILITY), ARISING OUT OF THIS AGREEMENT. THE DISTRIBUTOR ACKNOWLEDGES AND AGREES THAT THESE LIMITATIONS SHALL APPLY NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED REMEDY. 13.2 Limitation on Actions. NO ACTIONS, REGARDLESS OF FORM, ARISING OUT OF THIS AGREEMENT, MAY BE BROUGHT BY DISTRIBUTOR MORE THAN ONE (1) YEAR AFTER THE CAUSE OF ACTION HAS ARISEN. 14. NOTICES 14.1 All notices required or permitted hereunder shall be in writing and shall be delivered (a) by facsimile, (b) personally, or (c) mailed by certified or registered mail, return receipt requested and postage prepaid, addressed to the addressed below. Delivery by facsimile is effective upon receipt of successful fax transmission and shall be followed by delivery by mail as set forth above. Notice by personal delivery is effective upon receipt of the notice. Notice sent by mail shall for all purposes of this Agreement be treated as being effective or having been given ten days after mail. To JRVS: iMine Corporation 8520 Allison Point Blvd Ste. 223 #87928 Indianapolis, Indiana 46250 Attention: Mr. Daniel Tsai, Chief Executive Officer To DISTRIBUTOR: Sunwai Technology 6th Floor, No. 258, Section 3, Nanjing East Road, Songshan District, Taipei 10051 Attention: Mr. SEI-PENG TU, President 15. GENERAL 15.1 Authority. Both parties represent and warrant to each other that they have the right and lawful authority to enter into this Agreement. 15.2 Entire Agreement. This Agreement constitutes the entire agreement of the parties pertaining to the subject matter hereof, and merges all prior negotiations and drafts of the parties with regard to the transactions contemplated herein. Any and all other written or oral agreements existing between the parties hereto regarding such transactions are expressly canceled. 15.3 No Conflict. In the event of a conflict or inconsistency between the terms of this Agreement and those of any order, quotation, solicitation or other communication from one party to the other, the terms of this Agreement shall be controlling. 7 + +Source: IMINE CORP, S-1, 7/25/2018 + + + + + +15.4 Amendments and Waivers. No modification, change or amendment to this Agreement, or any waiver of any rights in respect hereto, shall be effective unless in writing signed by both parties in the case of a modification, change or amendment or by the party granting the waiver in the case of a waiver. 15.5 Successors and Assigns. The Distributor shall not assign any of its rights, obligations or privileges (by operation of law or otherwise) hereunder without the prior written consent of JRVS. JRVS shall have the right to assign its rights, obligations and privileges hereunder to an assignee that agrees in writing to be bound by the terms and conditions of this Agreement. The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective permitted successors and assigns of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement. 15.6 Independent Contractor. Neither party shall, for any purpose, be deemed to be an agent of the other party and the relationship between the parties shall only be that of independent contractors. Neither party shall have any right or authority to assume or create any obligations or to make any representations or warranties on behalf of any other party, whether express or implied, or to bind the other party in any respect whatsoever. 15.7 Export Control. Distributor understands that JRVS may be subject to regulation by agencies of the U.S. government, including the U.S. Department of Commerce, which prohibit export or diversion of certain products and technology to certain countries. Any and all obligations of JRVS to provide Products, as well as any technical assistance, will be subject in all respects to such United States laws and regulations and will from time to time govern the license and delivery of technology and products abroad by persons subject to the jurisdiction of the United States, including the Export Administration Act of 1979, as amended, any successor legislation, and the Export Administration Regulations issued by the Department of Commerce, International Trade Administration, or Office of Export Licensing. Distributor warrants that it will comply in all respects with the export and re-export restrictions for all Products shipped to Distributor. Distributor will take all actions which may be reasonably necessary to assure that no end-user contravenes such United States laws or regulations. 15.8 Force Majeure. In the event that either party is prevented from performing or is unable to perform any of its obligations under this Agreement (other than a payment obligation) due to any Act of God, fire, casualty, flood, earthquake, war, strike, lockout, epidemic, destruction of production facilities, riot, insurrection, material unavailability, or any other cause beyond the reasonable control of the party invoking this section, and if such party shall have used its best efforts to mitigate its effects, such party shall give prompt written notice to the other party, its performance shall be excused, and the time for the performance shall be extended for the period of delay or inability to perform due to such occurrences. Notwithstanding the foregoing, if such party is not able to perform within thirty (30) days after the event giving rise to the excuse of force majeure, the other party may terminate this Agreement. 15.9 Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable law, the parties agree to renegotiate such provision in good faith, in order to maintain the economic position enjoyed by each party as close as possible to that under the provision rendered unenforceable. In the event that the parties cannot reach a mutually agreeable and enforceable replacement for such provision, then (i) such provision shall be excluded from this Agreement, (ii) the balance of the Agreement shall be interpreted as if such provision were so excluded and (iii) the balance of the Agreement shall be enforceable in accordance with its terms. 15.10 Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement. 15.11 Choice of Law; Dispute Resolution. This Agreement shall be governed by and construed pursuant to the laws of the State of Indiana, U.S.A., without reference to principals of conflicts of laws. All disputes arising out of this shall be settled by final binding arbitration in Hamilton County, Indiana, pursuant to the Commercial Arbitration Rules of the American Arbitration Association. Judgment on the award rendered by the arbitrators may be entered in any court having competent jurisdiction thereof. Notwithstanding the foregoing, the parties may apply to any court of competent jurisdiction in Hamilton County, Indiana, U.S.A., for a temporary restraining order, preliminary injunction, or other interim or conservatory relief, as necessary, without breach of this arbitration agreement and without any abridgment of the powers of the arbitrators, and agree that such courts shall have exclusive jurisdiction of any such action. 15.12 Advice of Legal Counsel. Each party acknowledges and represents that, in executing this Agreement, it has had the opportunity to seek advice as to its legal rights from legal counsel and that the person signing on its behalf has read and understood all of the terms and provisions of this Agreement. This Agreement shall not be construed against any party by reason of the drafting or preparation thereof. 8 + +Source: IMINE CORP, S-1, 7/25/2018 + + + + + +IN WITNESS WHEREOF, THE PARTIES HERETO HAVE EXECUTED THIS AGREEMENT AS OF THE DATE FIRST WRITTEN ABOVE. Sunwai Technology iMine Corporation + +/s/ Sei-Peng Tu /s/ Daniel Tsai By: Sei-Peng Tu By: Daniel Tsai Title: President Title: Chief Executive Officer 9 + +Source: IMINE CORP, S-1, 7/25/2018 \ No newline at end of file diff --git a/full_contract_txt/ImperialGardenResortInc_20161028_DRS (on F-1)_EX-10.13_9963189_EX-10.13_Outsourcing Agreement.txt b/full_contract_txt/ImperialGardenResortInc_20161028_DRS (on F-1)_EX-10.13_9963189_EX-10.13_Outsourcing Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..a98590acc002862b339da6b53b0b283b0c1b5084 --- /dev/null +++ b/full_contract_txt/ImperialGardenResortInc_20161028_DRS (on F-1)_EX-10.13_9963189_EX-10.13_Outsourcing Agreement.txt @@ -0,0 +1,77 @@ +Exhibit 10.13 Outsourcing Contract on Development of Miaoli Royal Resort Hotel Planning Unit: Chang Chen-Bin Architects Office October 29, 2015 + + + +Source: IMPERIAL GARDEN & RESORT, INC., DRS (on F-1), 10/28/2016 + + + + + + + + Outsourcing Contract on Development of Miaoli Royal Resort Hotel The Covenanter: The HUANG JIA Country CLUB and Recreation Inc. (hereinafter referred to as Party A) and the Covenanter: Chang Chen- Bin Architects Office (hereinafter referred to as Party B) hereby agree to establish the following terms and conditions with regard to the development of Miaoli Royal Resort Hotel: Article I. Outsourced Project Development of Miaoli Royal Resort Hotel Article II. Project Range The base of the project is located on Lot No. 19 and so on in the Section of Laotianliao, Touwu Township, Miaoli County (refer to the attached map for more details) with an area about 29 hectares. Article III. Outsourced Work Outsourced work regarding this Contract is stated below: Part I: Establishment of Architectural Development Plan and Business Plan I. Establishment of documents and drawing relevant to the Architectural Development Plan and Business Plan II. Attendance of Concerned Work Coordination Meeting 1. Attendance of relevant review meetings and presentations 2. Reply to relevant consultations and revision of the development plan Part II: Development of Soil and Water Conservation Plan I. Establishment of documents and drawing relevant to the soil and water conservation plan. 1. Trunk sewer, calculation on water control and treatment and relevant design drawings. 2. Design of disasters prevention facilities during construction. 3. Design of desilting and detention basin. 4. Designs and drawings relevant to soil and water conservation. II. Attendance of Concerned Work Coordination Meeting 1. Attendance of review meetings and presentations 2. Reply to relevant consultations and revision of scheme drawings associated with soil and water conservation. III. Signing & Verification of Technicians Signing and verification relevant to land preparation and water discharge of the project. + + + +Source: IMPERIAL GARDEN & RESORT, INC., DRS (on F-1), 10/28/2016 + + + + + + + + Part III: Environmental Impact Assessment Report I. Program on runoff of Waste Water And Pollution Reduction on the Construction Site. II. Implementation Plan for Environmental Protection. III. Environmental Monitoring (Monitoring Report prior to Environmental Impact Assessment) IV. Establishment of Environmental Impact Statement And Assessment Report Part IV: Establishment of Documents Relevant to Change of Land Usage (I) Establishment of Documents and Drawings Relevant to Change of Land Usage. (II). Attendance of Concerned Work Coordination Meeting 1. Attendance of relevant review meetings and presentations. 2. Reply to relevant consultations and plan revision. Part V: Establishment of Documents and Drawings Relevant to Landscaping I. Principles, Concepts and Calculations on Landscaping II. Planting Scheme & Relevant Design Drawings III. Calculations & Drawings on Green Cover Rate Part VI: Planning, Design and Monitoring on Miscellaneous Works I. Basic Design. II. Establishment of Documents & Drawings Relevant to Miscellaneous Works 1. Trunk sewer, calculation on water control and treatment and relevant design drawings 2. Design of disasters prevention facilities during construction 3. Design of desilting and detention basin 4. Designs and drawings relevant to miscellaneous works III. Attendance of Miscellaneous Works Review Meetings 1. Attendance of project review meetings and presentations 2. Reply to relevant consultations and revision of relevant documents and drawings. IV. Signing & Verification of Technicians and Architects Signing & Verification of Miscellaneous Works Relevant to the Project (including signing and verification of geological technicians) V. Construction Monitoring VI. Submitting documents for obtaining miscellaneous license, providing structural design and signing and verification relevant to the miscellaneous works. Part VII: Planning and Design of Relevant Buildings and Construction Monitoring I. Planning & Design of Relevant Buildings. + + + +Source: IMPERIAL GARDEN & RESORT, INC., DRS (on F-1), 10/28/2016 + + + + + + + + II. Coordination on geological drilling and survey and arrangement of building structure, sewage treatment, water and electricity utility, fire protection, telecommunications and electrical and mechanical systems etc. for various professional technicians pursuant to relevant laws and regulations. III. Construction Drawings (involving building structure, interior decoration, water supply and drainage and electricity, telecommunication, monitoring, fire protection and air conditioning system). IV. Assistance in Works Quantity Counting & Valuation. V. Submitting of Construction License and Structure, Water, Electricity and Fire Protection Design for Reviewing, Signing and Verification. VI. Monitoring on Major Construction Parts. VII. Construction Monitoring (Survey on Major Parts). VIII. Solving Any Disputes & Problems Relevant to the Construction. IX. Other Items Agreed by the Two Parties Herein. Article IV. Service Fee The fees for services mentioned in Part I to Part VI are NTD 12 million ((SAY TWELVE MILLION ONLY) in total and the fees for planning and design of the buildings and construction monitoring shall be calculated based on the ratio of 3.50% of the legal construction cost hereof. Should Party A require a comprehensive modification on the development plan of the project outsourced and any subsequent extra cost occur in Party B; Party A shall bear the corresponding extra service fee. Article V. Payment Method With regard to the payment method regarding the project herein, Party A shall remit relevant cashes into the account designated by Party B by stages as per the following conditions: Stage 1: The service fee of NTD 1.2 million (SAY ONE MILLION AND TWENTY THOUSAND ONLY) shall be paid upon signing of the Contract herein. Stage 2: The service fee of NTD 1.2 million (SAY ONE MILLION AND TWENTY THOUSAND ONLY) shall be paid upon completion of the Business Plan and Architectural Development Plan and Relevant Drawings. Stage 3: The service fee of NTD 1.2 million (SAY ONE MILLION AND TWENTY THOUSAND ONLY) shall be paid after the soil and water conservation plan and relevant drawings are filed in the county government. Stage 4: The service fee of NTD 1.2 million (SAY ONE MILLION AND TWENTY THOUSAND ONLY) shall be paid after the Environmental Impact Assessment Report and relevant drawings are filed in the county government. + + + +Source: IMPERIAL GARDEN & RESORT, INC., DRS (on F-1), 10/28/2016 + + + + + + + + Stage 5: The service fee of NTD 1 million (SAY ONE MILLION ONLY) shall be paid after the Environmental Impact Assessment Report is adopted. Stage 6: The service fee of NTD 3 million (SAY THREE MILLION ONLY) shall be paid after the Development Plan is adopted. Stage 7: The service fee of NTD 1 million (SAY ONE MILLION ONLY) shall be paid after change of the non-urban land usage is completed. Stage 8: The service fee that is 3.00% of the legal construction cost shall be paid after documents and drawings for applying for the construction license of relevant buildings and the application is submitted to the competent authority. Stage 9: The service fee that is 0.5% of the legal construction cost shall be paid upon submitting the construction starting application to the competent authority. Stage 10: The final service fee shall be paid in a lump sum upon the completion of the structure of relevant buildings and submitting the usage license application to the competent authority. In case the Contract cannot be performed due to any reason other than the architect herein, the client agrees the fees paid will not be refunded. In case the Contract cannot be performed due to the architect herein, the architect shall refund the fees paid in full without taking any interest to the client. Article VI. Exclusions The service fee shall not include the fees for land measurement and boundary identification, geological drilling, meeting relevant land administration regulations, air pollution prevention, meeting relevant construction regulations, security system monitoring, scrivener service, deposit of soil and water conservation, review of the competent authority, attendance of concerned experts and scholars and meeting relevant administrative regulations. Article VII. Term Planned Party B shall make the most economical and effective arrangement for Party A with respect to the project based on the principle of alignment with the plan progress of Party A. The term planned is stated as following: I. Topographic survey and measurement, geological drilling and program evaluation (about 1.0 months); II. Establishment of architectural development plan and business plan (about 2.0 months); III. Development of soil and water conservation plan (about 2.0 months); IV. Establishment of environmental impact assessment report (about 8.0 months); V. Review of development plan (containing soil and water conservation plan and environmental impact assessment report) (about 4 - 6 months); + + + +Source: IMPERIAL GARDEN & RESORT, INC., DRS (on F-1), 10/28/2016 + + + + + + + + VI. Miscellaneous works review (about 2 - 4 months); VII. Change of usage zoning and category of the land (about 2 - 4 months); VIII. Application for miscellaneous license (about 1.0 month) IX. Application for construction license (including review on green construction materials and barrier-free facilities) (about 1.0 month) Article VIII. Duties of Party A Party A shall provide the following data during the term mentioned above: I. Data of rights relevant to the land. II. Data required by Party B and can be provided by Party A. (I) Basic data that must be provided in accordance with relevant regulations: 1. Name and business address of the developer; 2. Full name, address and ID card number of the person in charge; 3. Purpose and content of the development. Article IX. Duties of Party B I. Party B shall follow all instructions of Party A and ensure all plans and designs of the project to meet relevant construction laws and regulations. II. Party B shall take on a professional attitude for various services mentioned in Article III of the Contract, maintain benefits and interests of Party A all the time and adopt the most economical option under the precondition of safety and reliability. III. Party B is obligatory to report the latest progress and completed content to Party A. Article X. Special Terms I. With regard to the payment of all fees for professional services, the person appointed shall designate relevant professional institutions and pay the fees directly to them and the service fees due will be deducted after the payment foregoing is made. II. Any other items not specified in the Contract may be negotiated and formulated by the both Parties herein separately. + + + +Source: IMPERIAL GARDEN & RESORT, INC., DRS (on F-1), 10/28/2016 + + + + + + + + Article XI. Disputes Resolving Both parties herein agree to resolve any dispute regarding interpretation of the Contract in the following methods: I. Should both Parties be unable to reach an agreement within one month through negotiation, they may apply for an arbitration in Miaoli County and the arbitration result shall be compulsory. II. Should either Party herein initiate a legal proceeding for revoking any arbitration result regarding the Contract, both Parties herein agree to take the Miaoli District Court of Taiwan as the competent court of first instance pursuant to the laws of the R.O.C.. Article XII. The Contract shall be made in duplicate and Party A and Party B shall hold a copy respectively in witness thereof. Covenanters Party A: The HUANG JIA Country CLUB and Recreation Inc. Address: Floor 4, No. 106, Zhouzi Street, Neihu District, Taipei City Tel: 02-26582502 Party B:Chang Chen-Bin Architects Office Unified No: 95822673 Address: No. 1, Floor 10, No. 575, Jinhwa Road, Bei District, Taichung City Tel: 04-22373588 Fax: 04-22373388 October 29, 2015 + + + +Source: IMPERIAL GARDEN & RESORT, INC., DRS (on F-1), 10/28/2016 \ No newline at end of file diff --git a/full_contract_txt/ImpresseCorp_20000322_S-1A_EX-10.11_5199234_EX-10.11_Co-Branding Agreement.txt b/full_contract_txt/ImpresseCorp_20000322_S-1A_EX-10.11_5199234_EX-10.11_Co-Branding Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..e7d867aa877fff753d52eb822f6deeffcc415d89 --- /dev/null +++ b/full_contract_txt/ImpresseCorp_20000322_S-1A_EX-10.11_5199234_EX-10.11_Co-Branding Agreement.txt @@ -0,0 +1,353 @@ +[Confidential Treatment Requested] + + Exhibit 10.11 + +CO-BRANDING AGREEMENT + +This Co-Branding Agreement (this "Agreement") dated March 3, 2000 (the "Effective Date") is entered into between VerticalNet, Inc., a Pennsylvania corporation having a principal place of business at 700 Dresher Road, Suite 100, Horsham, Pennsylvania, 19044 ("VerticalNet"), and Impresse Corporation, a California Corporation, having a principal place of business at 1309 South Mary Avenue, Sunnyvale, California, 94087 ("Impresse"). + +BACKGROUND + +WHEREAS, VerticalNet owns and operates a series of Online Communities (defined below) that are accessible via the World Wide Web, each of which is designed to be an online gathering place for businesses of a certain type or within a certain industry; and + +WHEREAS, Impresse desires to provide its commercial printing services (the "Impresse Services") to Users (defined below) of VerticalNet Sites (defined below); and + +WHEREAS, Impresse and VerticalNet desire to create Co-Branded Site (defined below) where users will be able to register to review and utilize the Impresse Services and to promote such Co-Branded Site on VerticalNet Sites. + +NOW, THEREFORE, in consideration of the mutual covenants herein, and intending to be legally bound hereby, VerticalNet and Impresse agree as follows: + +1. DEFINITIONS + +1.1. AFFILIATE shall mean, when used with reference to a party, any individual or entity directly or indirectly controlling, controlled by or under common control with such party. For purposes of this definition, "control" means the direct or indirect ownership of at least 50% of the outstanding voting securities of a party, or the right to control the policy decisions of such party. + +1.2. BANNER shall mean a graphical image advertising the Impresse Site that is posted in an area reasonably designated by VerticalNet for similar banner advertisements and shall contain a Link (defined below) to the Co-Branded Site. + +1.3. CO-BRANDED CONTENT shall mean all materials, data and similar information presented on the pages of the Co-Branded Site. + +1.4. CO-BRANDED SITE shall mean the Site (defined below) that contains both a Frame (defined below) and a Window (defined below) which includes the Impresse Area (defined below) and the VerticalNet Area (defined below) of the Co-Branded Site. + +1.5. CONFIDENTIAL INFORMATION shall mean, subject to the provisions of Section 7.2 [EXCLUSIONS], all proprietary and confidential information of a party, including, without limitation, trade secrets, technical information, business information, sales information, customer and potential customer lists and identities, product sales plans, sublicense agreements, inventions, developments, discoveries, software, know-how, methods, techniques, formulae, data, processes and other trade secrets and proprietary ideas, whether or not protectable under patent, trademark, copyright or other areas of law, that the other party has access to or receives. For purposes of this Agreement, + +1 + +* Represents confidential information for which Impresse Corporation is seeking confidential treatment with the Securities and Exchange Commission. + +the Co-Branded Content shall not be considered Confidential Information of Impresse. For purposes of this Agreement, this Agreement shall be considered Confidential Information. + +1.6. E-COMMERCE CENTER shall mean a web page on a VerticalNet Site which is customized by VerticalNet to include a vendor's information, including the vendor's branding; a Link to the vendor's catalog, auction item listings; the vendor's career center including employment information; archives of; and Links to other related content locations. + +1.7. FRAME shall mean a portion of a Web page which surrounds a Window on the top and left. + +1.8. IMPRESSE AREA shall mean the Window portion of the Impresse Site (defined below) less the Frame that will be placed around the Window of the Co-Branded Site. + +1.9. IMPRESSE MARK shall mean any trademark, service mark, trade name, domain name, design or logo of Impresse or its Affiliates. + +1.10. IMPRESSE SITE shall mean the Site located at www.impresse.com (and any successor Site thereto). + +1.11. IMPRESSE-VERTICALNET REVENUE shall have the meaning defined in Section 4.6.2 [REVENUE SHARING]. + +1.12. INTELLECTUAL PROPERTY shall mean any and all trade secrets, patents, copyrights, trademarks, service marks, URLs, trade dress, brand features, know-how and similar rights of any type under the laws of any applicable governmental authority, including, without limitation, all applications and registrations relating to any of the foregoing. + +1.13. INTELLECTUAL PROPERTY RIGHTS shall mean all rights in and to Intellectual Property, including, without limitation, all patent rights, copyrights, trademarks, service marks, know-how and trade secrets. + +1.14. LAUNCH DATE shall mean the day on which the Co-Branded Site and the V-Solutions Area become fully operational and generally available on the Internet. + +1.15. LINK shall mean a link, including but not limited to a hyperlink, + +Source: IMPRESSE CORP, S-1/A, 3/22/2000 + + + + + +button or banner, that connects two Sites in a manner so that when a User clicks on the link, the User is transferred directly from one Site to a second Site. + +1.16. NEWSLETTER shall mean a text message containing information supplied by Impresse and approved by VerticalNet (which approval shall not be unreasonably withheld) that is transmitted via e-mail to Users of the VerticalNet Sites who have provided their e-mail addresses to VerticalNet along with permission to transmit such messages to the e-mail address. + +1.17. ONLINE COMMUNITY shall mean a VerticalNet Site that acts as a comprehensive source of information, dialogue and commerce for and links to E-Commerce Centers and other Sites for a particular industry or service market. + +2 + +1.18. PROPRIETARY FEATURE shall mean any name, trademark, service mark, trade name, domain name, navigational element, copyright, or logo which is proprietary to Impresse and/or VerticalNet, as appropriate. + +1.19. SITE shall mean a site located on the World Wide Web portion of the Internet. + +1.20. TERM shall have the meaning set forth in Section 5.1 [TERMINATION AND RENEWAL] + +1.21. URL shall mean a universal resource locator used for the purpose of identifying a Site located on the Internet. + +1.22. USER shall mean a single person who accesses and views a Site whether directly from a web browser or through a Link. + +1.23. USER DATA shall mean all data generated by an Internet server that relates to file requests, user identification, transaction logs, session times and other information regarding the Users generated or collected by or through a Co-Branded Site, but excluding any information that relates or refers to a particular project of such User. + +1.24. V-SOLUTIONS AREA shall mean a hub page accessible via a Link from the home page of each VerticalNet Site which shall contain a list of categories of business services, with each category further listing entities that provide such services. Each individual company listing shall contain a Link to a Web page hosted by VerticalNet that describes such company and the services it offers. The V-Solutions Area will also feature the V-Solutions Link (defined below). + +1.25. V-SOLUTIONS LINK shall mean the Link from the V-Solutions Area to the Co-Branded Site. + +1.26. VERTICALNET AREA shall mean the Frame area of the Co-Branded Site. + +1.27. VERTICALNET MARK shall mean any trademark, service mark, trade name, domain name, design or logo of VerticalNet. + +1.28. VERTICALNET-IMPRESSE USERS shall have the meaning defined in Section 4.6.1 ["VerticalNet Impresse Users"] + +1.29. VERTICALNET SITE shall mean a Site owned and operated by VerticalNet in the United States or a portion of such Site designated by VerticalNet. + +1.30. WINDOW shall mean a portion of a Web page that is surrounded by a Frame. + +1.31. YEAR 2000 COMPLIANT shall mean with respect to any computer software that to the extent that such software contains date-dependent functionality, will: (1) contain four digit year codes, (2) properly process dates and date values before, through and beyond January 1, 2000, including date calculations with dates both before and after January 1, 2000, and (3) not suffer any impact on performance as a result of dates beyond January 1, 2000; provided, however, that for this warranty to apply the operating systems on which such software is being run, and any network servers, Web browsers, databases and other software that is used in conjunction with such software must also be Year 2000 Compliant as defined herein. + +3 + +2. CO-BRANDED SITE + +2.1. Impresse shall be responsible for: (a) the design, layout, development, hosting and maintenance of the Impresse Area of the Co-Branded Site; (b) providing VerticalNet with reasonable instructions and information regarding the Impresse Services; (c) providing a tabbed area prominently featured in a user interface within the Impresse Area of the Co-Branded Site that points to a VerticalNet Online Community or Online Communities; (d) modifying the Impresse online registration forms and system available on the Co-Branded Site to require Impresse users to identify and match their business activities with a VerticalNet Online Community or Online Communities; and (e) providing VerticalNet with the URL addresses for the Co-Branded Site. + +2.2. VerticalNet shall be responsible for: (a) the design, layout, development, hosting and maintenance of the VerticalNet Area of the Co-Branded Site; and (b) the design, layout, development, hosting and maintenance of the V-Solutions Link. + +2.3. Beginning on the Launch Date and continuing during the Term, VerticalNet shall display the V-Solutions Area on the VerticalNet Sites. VerticalNet shall likewise, during the Term, implement and maintain the V-Solutions Link. + +2.4. Beginning on the Launch Date and continuing during the Term, VerticalNet shall not place advertising relating to the commercial printing entities listed on Exhibit "A," or other such entities subsequently identified by Impresse, on the VerticalNet Area of the Co-Branded Site. + +2.5. Impresse hereby grants to VerticalNet a non-exclusive, non-transferable, royalty-free, right and license to link to the Impresse Area of the Co-Branded Site. Impresse shall permit Users who access the Co-Branded Site to access and use Co-Branded Content from the Co-Branded Site for the personal use of such Users in accordance with the then-current terms of Impresse's standard license agreement governing the use of such Co-Branded Content. + +Source: IMPRESSE CORP, S-1/A, 3/22/2000 + + + + + +2.6. Nothing in this Agreement shall be construed as preventing Impresse or VerticalNet from developing other co-branded versions of their materials, data, information and content. + +3. ONGOING SUPPORT + +3.1. Impresse shall use commercially reasonable efforts to respond to all support requests by VerticalNet relating to the Co-Branded Site within one Business Day (as defined below) of Impresse's receipt of such notification. Impresse shall use reasonable efforts to cure the reported problem as soon as reasonably possible. VerticalNet shall provide Impresse with all information reasonably requested by Impresse in connection with a reported problem for which VerticalNet is requesting support under this Section 3.1 [ONGOING SUPPORT]. VerticalNet shall use commercially reasonable efforts to respond to all support requests by Impresse relating to the Co-Branded Site within one Business Day (as defined below) of VerticalNet's receipt of such notification. VerticalNet shall use reasonable efforts to cure the reported problem as soon as reasonably possible. Impresse shall provide VerticalNet with all information reasonably requested by VerticalNet in connection with a reported problem for which Impresse is requesting support under this Section 3.1 [ONGOING SUPPORT]. + +4 + +[Confidential Treatment Requested] + +3.2. Impresse will identify to VerticalNet primary and secondary contacts who will be familiar with the Co-Branded Site and this Agreement. VerticalNet will identify to Impresse primary and secondary contacts who will be familiar with the Co-Branded Site and this Agreement. + +3.3. VerticalNet shall have access to technical support from Impresse by telephone from 8 a.m. Pacific Standard Time to 5 p.m. Pacific Standard Time, Monday through Friday, Impresse holidays excluded (each a "Business Day," collectively "Business Days"). Impresse shall have access to technical support from VerticalNet by telephone from 6 a.m. Eastern Standard Time to 6 p.m. Eastern Standard Time, Monday through Friday, VerticalNet holidays excluded. + +4. THE COMMERCIAL TERMS + +4.1. DEVELOPMENT FEES. For the design, development and integration of the V-Solutions Area and the VerticalNet Area of the Co-Branded Site, Impresse shall pay to VerticalNet a one-time, nonrefundable development fee in the amount of [*] payable on the Effective Date. + +4.2. SLOTTING FEES. For the display of the V-Solutions Area and the V-Solutions Link, Impresse shall pay to VerticalNet a slotting fee in the amount of [*] payable pursuant to the terms of Section 4.5 [PAYMENT TERMS]. + +4.3. BANNER/NEWSLETTER PURCHASE COMMITMENT. During the Term of this Agreement, Impresse agrees to purchase from VerticalNet Banners and Newsletters for a total price of at least $[*] as set forth below in this Section 4.3 [BANNER/NEWSLETTER PURCHASE COMMITMENT]. All prices for such Banners and Newsletters shall be offered to Impresse at a [*]% discount off of VerticalNet's then current prices for similar Banners or Newsletters. All purchases shall be subject to VerticalNet's standard terms and conditions governing advertising on VerticalNet Sites. Impresse agrees to purchase at least $[*] of such Banners and Newsletters in each calendar quarter after the Effective Date until a total of $[*] have been purchased, provided, the total dollar amount purchased by Impresse in any calendar quarter shall not consist of greater than 70% of either Banners or Newsletters. Payment of the fees set forth in this Section shall be made pursuant to the terms of Section 4.5 [PAYMENT TERMS]. + +4.4. HOSTING FEE. Impresse shall pay VerticalNet a service fee of $[*] for the hosting and maintenance of the Co-Branded Site and the V-Solutions Link, payable pursuant to the terms of Section 4.5 [PAYMENT TERMS]. + +4.5. PAYMENT TERMS. Impresse shall pay the fees set forth in Sections 4.2 [SLOTTING FEES], 4.3 [BANNER/NEWSLETTER PURCHASE COMMITMENT] and 4.4 [HOSTING FEE] as an aggregate, totaling $[*] payable in four equal quarterly installments of $[*] beginning on May 31, 2000 and thereafter on August 31, 2000 November 30, 2000 and February 28, 2001, respectively. + +4.6. REVENUE SHARING. Impresse shall pay VerticalNet [*]of Impresse VerticalNet Revenue accruing during the term of this Agreement, payable to VerticalNet on or before the thirtieth day of the calendar quarter immediately following the quarter in which such revenue was collected by Impresse. Such payments shall be accompanied by a statement containing reasonable detail of the type and number of transactions from which the Impresse + +5 + +* Represents confidential information for which Impresse Corporation is seeking confidential treatment with the Securities and Exchange Commission. + +VerticalNet Revenue was derived, the total Impresse VerticalNet Revenue for such period and the total fees payable to VerticalNet pursuant to this Section 4.6 [REVENUE SHARING]. + +4.6.1. "VerticalNet Impresse Users" are the Users that register with Impresse through the Co-Branded Site, but specifically excluding those Users who have previously registered with Impresse other than through the Co-Branded Site. + +4.6.2. The "Impresse VerticalNet Revenue" is Impresse's total net transaction and subscription revenues collected by Impresse during the term of this Agreement from VerticalNet Impresse Users. + +4.6.3. If government regulations prevent Impresse from sharing any revenues associated with Impresse Services, VerticalNet and Impresse shall negotiate in good faith a compensation structure that seeks to provide VerticalNet with compensation equal to that set forth in Section 4.6 [REVENUE SHARING]. + +4.7. TAXES. All payments required under this Agreement are exclusive of federal, state, local and foreign taxes, duties, tariffs, levies and similar assessments. When applicable, such taxes shall appear as separate items on a party's invoice or statement to the other party. Payment of such taxes or charges shall be the responsibility of the party whose obligation it is under this Agreement to make the payment in respect of which such taxes are assessed, excluding any taxes based upon the other party's net income. In lieu thereof, a party shall provide the other party with a tax or levy exemption certificate acceptable to the taxing or levying authority. + +Source: IMPRESSE CORP, S-1/A, 3/22/2000 + + + + + +4.8. AUDITS. During the term of this Agreement and for one year thereafter, VerticalNet shall have the right to appoint a certified public accountant to audit Impresse's financial records relating to such payment to verify the accuracy of Impresse's financial records in order to verify the amount of the payments owed and/or paid hereunder, but no more frequently than once per year. If the amount owed by Impresse to VerticalNet was underpaid, the additional amount owed shall be paid to VerticalNet within 15 days of notice of such underpayment to Impresse. If the amount owed by Impresse to VerticalNet was underpaid in excess of 10% of the amount owed, the fees of such audit shall also be paid to VerticalNet within 15 days of notice of such to Impresse. If the amount owed by Impresse to VerticalNet was overpaid, the excess amount paid shall be returned by VerticalNet within 15 days of notice of such overpayment. VerticalNet shall give reasonable advance notice to Impresse of such audit and each audit shall be conducted in a manner that does not cause unreasonable disruption to the conduct of business by Impresse. The results of any such audit shall be deemed to be Confidential Information and may not be disclosed by either party or its certified public accountants except as may be necessary to enforce such party's rights. + +4.9. INTEREST. All payments not paid by the date such payments are due shall bear interest from the due date to the date payments are actually paid at the lower of (i) 1% per month or (ii) the maximum rate permitted by law. + +5. TERMINATION AND RENEWAL + +5.1. The Term of this Agreement shall begin on the Effective Date and shall end fifteen months therefrom. + +6 + +5.2. Either party may terminate this Agreement immediately upon written notice to the other party in the event of any material breach of a term of this Agreement by such other party that remains uncured 30 days after written notice of such breach was received by such other party or, if the breach is not reasonably capable of cure within 30 days, such longer period, not to exceed 60 days, so long as the cure is commenced within the 30-day period and thereafter is diligently prosecuted to completion as soon as possible and in any event within 60 days. + +5.3. Upon termination or expiration of this Agreement, (i) Impresse shall no longer have the right to use any VerticalNet Mark, (ii) VerticalNet shall no longer have the right to use any Impresse Mark; (iii) Impresse may no longer make any Co-Branded Content available for access and use through the Co-Branded Site; (iv) VerticalNet shall cease framing the Window in the Co-Branded Site; (v) VerticalNet shall remove the V-Solutions Link from the V-Solutions Area; and (vi) VerticalNet shall cease displaying or transmitting all Banners and Newsletters of Impresse. + +5.4. Following expiration or termination of this Agreement, the terms and provisions of Article 4 [THE COMMERCIAL TERMS] above shall continue to govern Impresse's payment obligations for any payment obligations accruing during the term of this Agreement. Following termination, Impresse shall provide VerticalNet with a final accounting with respect to this Agreement and tender payment of amounts due under Article 4 [THE COMMERCIAL TERMS] at the next scheduled payment date. + +6. DISPUTE RESOLUTION + +6.1. NEGOTIATION AND ESCALATION. If any controversy or claim arises relating to this Agreement, the parties will attempt in good faith to negotiate a solution to their differences, including progressively escalating any controversy or claim through senior levels of management. If negotiation does not result in a resolution within 30 days of the date one party first notifies the other of the controversy or claim, either party may resort to arbitration under Section 6.2 [ARBITRATION]. + +6.2. ARBITRATION. Any controversy or claim between the parties concerning any breach or alleged breach of this Agreement or performance or nonperformance of any obligation under this Agreement which cannot be resolved by negotiation will be resolved by binding arbitration under this Section 6.2 [ARBITRATION] and the then-current Commercial Rules and supervision of the American Arbitration Association (the "AAA"). If any part of this Section 6.2 [ARBITRATION] is held to be unenforceable, it will be severed and will not affect either the duty to arbitrate or any other part of this Section 6.2 [ARBITRATION]. The arbitration will be held before a sole disinterested arbitrator who is knowledgeable in business information and the Internet and experienced in handling commercial disputes. The arbitrator shall be appointed jointly by the parties hereto within 30 days following the date on which the arbitration is instituted. If the parties are unable to agree upon the arbitrator within such 30-day period, the AAA shall be instructed to select such arbitrator within 15 days thereafter. The arbitrator's award will be final and binding and may be entered in any court having jurisdiction. The arbitrator will not have the power to award punitive or exemplary damages, or any damages excluded by, or in excess of, any damage limitations expressed in this Agreement. Issues of arbitrability will be determined in accordance solely with the federal substantive and procedural laws relating to arbitration; in all other respects, the arbitrator will be obligated to apply and follow the substantive law of the State of Delaware. + +7 + +6.3. EQUITABLE RELIEF. Notwithstanding anything to the contrary in this Agreement, in the event of an alleged violation of Article 7 [CONFIDENTIALITY] of this Agreement by either party, the party alleging such a violation may seek temporary and permanent injunctive or other appropriate equitable relief from any court of competent jurisdiction pending appointment of an arbitrator. The party requesting such relief shall simultaneously file a demand for arbitration of the dispute, and shall request that the AAA proceed under its rules for an expedited hearing. + +6.4. COSTS. Unless the arbitrator, if any, determines otherwise, each party will bear its own attorneys' fees and other costs associated with the negotiation and arbitration provided for by this Article 6 [DISPUTE RESOLUTION], except that costs and expenses regarding the arbitrators shall be shared equally. If court proceedings to stay litigation or compel arbitration are necessary, the party who unsuccessfully opposes such proceedings will pay all associated costs, expenses and attorneys' fees that are reasonably incurred by the other party. To the extent that any claim in arbitration relates to the collection of amounts owed under Article 4 [THE COMMERCIAL TERMS], the party entitled to collect such amounts shall be entitled to recover all reasonable costs of collection, including expenses and attorneys' fees that are incurred. + +6.5. TWO YEAR LIMITATION. Except for claims under Sections 9.4 [INDEMNIFICATION BY IMPRESSE] and 9.5 [INDEMNIFICATION BY VERTICALNET] + +Source: IMPRESSE CORP, S-1/A, 3/22/2000 + + + + + +hereof, neither party may bring a claim or action regardless of form, arising out of or related to this Agreement, including any claim of fraud or misrepresentation, more than two years after the cause of action accrues or becomes known, whichever is later. + +6.6. CONFIDENTIALITY. In order to facilitate the resolution of controversies or claims between the parties with respect to each party hereto, such controversies or claims, including details regarding negotiations, arbitration and settlement terms, shall be treated as Confidential Information of the other party hereto in accordance with Article 7 [CONFIDENTIALITY]. + +6.7. REMEDIAL MEASURES. In the event of (a) any material remediable breach of this Agreement by the other party which remains uncured 30 days after notice of such breach was received by the other party or (b) any material breach which cannot be cured, the non-breaching party may take reasonable remediable measures upon prior written notice and at the cost and expense of the breaching party without prejudice and in addition to any other rights arising from such breach. In addition, the non-breaching party shall take reasonable steps to mitigate damages arising out of such breach. + +7. CONFIDENTIALITY + +7.1. CONFIDENTIALITY OBLIGATIONS. Except as permitted elsewhere under this Agreement, each party agrees to take Reasonable Steps (as defined below) (a) to receive and maintain the Confidential Information of the other party in confidence and (b) not to disclose such Confidential Information to any third parties, provided, the receiving party may disclose such Confidential Information to its employees, representatives and agents who have a need to know such information for purposes of carrying out the terms of this Agreement. Neither party hereto shall use all or any part of the Confidential Information of the other party for any purpose other than to perform its obligations under this Agreement. The parties will take Reasonable Steps (as defined below) to ensure that their employees, representatives and agents comply with this provision. As used herein, "Reasonable Steps" means at least the same degree of care that the + +8 + +receiving party uses to protect its own Confidential Information, and, in no event, not less than reasonable care. + +7.2. EXCLUSIONS. "Confidential Information" does not include information that (a) is or becomes publicly available through no fault of the receiving party; (b) was already known to the receiving party at the time it was disclosed to the receiving party, as evidenced by records of the receiving party; (c) is independently developed by employees of the receiving party who had no knowledge of or access to such information, as evidenced by records of the receiving party; (d) is received from a third party who is under no obligation of confidentiality to the disclosing party; or (e) must be disclosed pursuant to applicable laws, rules or regulations; provided, however, that the receiving party first gives the disclosing party notice and a reasonable opportunity to secure confidential protection of such Confidential Information. + +7.3. TERMINATION. Subject to Section 10.11 [SURVIVAL], upon termination of this Agreement, all Confidential Information shall be returned to the disclosing party or, at the request of the disclosing party, destroyed unless otherwise specified or permitted elsewhere under this Agreement. Subject to Section 7.6 [USER DATA], the confidentiality obligations contained in this Article 7 [CONFIDENTIALITY] shall survive termination of this Agreement for a period of three years. + +7.4. INJUNCTION. Each party acknowledges and agrees that the provisions of this Article 7 [CONFIDENTIALITY] are reasonable and necessary to protect the other party's interests in its Confidential Information, that any breach of the provisions of this Article 7 [CONFIDENTIALITY] may result in irreparable harm to such other party, and that the remedy at law for such breach may be inadequate. Accordingly, in the event of any breach or threatened breach of the provisions of this Article 7 [CONFIDENTIALITY] by a party hereto, the other party, in addition to any other relief available to it at law, in equity or otherwise, shall be entitled to seek temporary and permanent injunctive relief restraining the breaching party from engaging in and/or continuing any conduct that would constitute a breach of this Article 7 [CONFIDENTIALITY], without posting a bond or other security. + +7.5. PUBLICITY. Neither party will originate any press release concerning the relationship between the parties or the transactions described in this Agreement without the prior written consent of the other party, which consent shall not be unreasonably withheld or delayed. Notwithstanding the foregoing, as soon as reasonably practicable following the Effective Date, VerticalNet and Impresse shall jointly issue a press release with respect to entering into this Agreement. + +7.6. USER DATA. Impresse shall provide VerticalNet with User Data on each User that submits information through the Co-Branded Site by sending an email with such information to an email address designated by VerticalNet at the time the request occurs. User Data shall be maintained by each Party as Confidential Information of the other Party during the Term and 5 years thereafter, provided such User Data may be disclosed only as part of an aggregation or analysis of all User Data but not as independent data. Upon termination of the Agreement, VerticalNet and Impresse shall jointly own all User Data. Neither Party shall use the User Data other than in accordance with the VerticalNet privacy policy and all applicable laws during the Term and thereafter. + +9 + +8. REPRESENTATIONS AND WARRANTIES + +8.1. REPRESENTATIONS AND WARRANTIES. Each party hereby represents, covenants and warrants that: + +8.1.1. It has the corporate power to enter into this Agreement and to grant the rights and licenses granted herein and to otherwise perform this Agreement; + +8.1.2. It is not a party to any agreement or understanding and knows of no law or regulation that would prohibit it from entering into and performing this Agreement or that would conflict with this Agreement; + +8.1.3. When executed and delivered by it, this Agreement will constitute a legal, valid and binding obligation of it, enforceable against it in accordance with this Agreement's terms, except as enforcement may be limited by laws or regulations relating to bankruptcy, insolvency and creditors rights or by principles of equity; + +Source: IMPRESSE CORP, S-1/A, 3/22/2000 + + + + + +8.1.4. The portions of the Co-Branded Site provided by such party are and will continue to be Year 2000 Compliant; + +8.1.5. To the best of its knowledge, the portions of the Co-Branded Site provided by such party and its own Site do not and will not (i) contain any known viruses, Trojan Horse, worm or harmful code the purpose of which is to disable or interrupt the operating of a computer system or destroy, erase or otherwise harm any data, software or hardware, (ii) contain any false, misleading, libelous or defamatory statements, (iii) constitute an invasion of the rights of privacy or publicity of any third party, (iv) violate any applicable laws, rules and regulations or (v) infringe, violate or misappropriate any Intellectual Property Rights of any third party. + +9. DISCLAIMER OF WARRANTY, LIMITATION OF LIABILITY AND INDEMNIFICATION + +9.1. DISCLAIMER OF WARRANTIES BY VERTICALNET. EXCEPT AS EXPRESSELY SET FORTH IN THIS AGREEMENT, VERTICALNET HEREBY DISCLAIMS ALL WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, WITH RESPECT TO THE VERTICALNET SITES, THE V-SOLUTIONS AREA, THE V-SOLUTIONS LINK AND THE VERTICALNET AREA OF THE CO-BRANDED SITE, INCLUDING BUT NOT LIMITED TO ANY IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. VERTICALNET EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES AS TO THE USER INTERFACE OR USER EXPERIENCE ASSOCIATED WITH THE VERTICALNET SITES AND RESERVES THE RIGHT, IN ITS SOLE DISCRETION, TO MODIFY THE PLACEMENT OF ALL LINKS, URLS AND PROPRIETARY FEATURES; PROVIDED, HOWEVER, THAT IN THE EVENT VERTICALNET REDESIGNS THE USER INTERFACE, SUCH LINKS, URLS AND PROPRIETARY FEATURES SHALL RECEIVE MUTUALLY AGREEABLE PLACEMENT SUBSTANTIALLY SIMILAR TO THE ORIGINAL DESIGN. + +10 + +9.2. DISCLAIMER OF WARRANTIES BY IMPRESSE. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, IMPRESSE HEREBY DISCLAIMS ALL WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, WITH RESPECT TO THE IMPRESSE AREA OF THE CO-BRANDED SITE AND THE IMPRESSE SITE, INCLUDING BUT NOT LIMITED TO ANY IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. + +9.3. LIMITATION OF LIABILITY. EXCEPT IN CONNECTION WITH A BREACH BY EITHER PARTY OF ARTICLE 7 OR SECTION 8.1.5 [REPRESENTATIONS AND WARRANTIES] (v) AND THE INDEMNIFICATION OBLIGATIONS OF IMPRESSE UNDER SECTION 9.4(i)(d) [INDEMNIFICATION BY IMPRESSE] AND THE INDEMNIFICATION OBLIGATIONS OF VERTICALNET UNDER SECTION 9.5(i)(d) [INDEMNIFICATION BY VERTICALNET], NEITHER PARTY WILL BE LIABLE FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL, EXEMPLARY OR INCIDENTAL DAMAGES ARISING OUT OF OR RELATED TO THIS AGREEMENT, HOWEVER CAUSED AND UNDER ANY THEORY OF LIABILITY (INCLUDING NEGLIGENCE), EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. + +9.4. INDEMNIFICATION BY IMPRESSE. Subject to Section 9.6 [PROCEDURE], Impresse shall (i) defend at its sole expense VerticalNet and its officers, directors, employees and agents from and against any action, suit, proceeding or investigation brought by a third party and caused by, relating to, based upon, arising out of or in connection with (a) any breach by Impresse of the representations, warranties or agreements made by it in Section 8 of this Agreement, (b) negligence, recklessness or intentional misconduct on the part of Impresse or its officers, directors, employees, agents or consultants, (c) any claim arising out of VerticalNet's authorized use or possession of the portions of the Co-Branded Site provided by Impresse and the Impresse Site as permitted by this Agreement; or (d) any claim that any portion of the Impresse Site or the Impresse Area of the Co-Branded Site violates, infringes or misappropriates any Intellectual Property Right of any third party and (ii) pay all authorized costs, expenses and disbursements incurred in such defense, and any damages, liabilities, obligations, penalties or judgments awarded in any such action, or any settlement amount agreed to by Impresse. + +9.5. INDEMNIFICATION BY VERTICALNET. Subject to Section 9.6 [PROCEDURE], VerticalNet shall (i) defend at its sole expense Impresse and its officers, directors, employees and agents from and against any action, suit, proceeding or investigation brought by a third party, caused by, relating to, based upon, arising out of or in connection with (a) any breach by VerticalNet of the representations, warranties or agreements made by it in Section 8 of this Agreement, (b) negligence, recklessness or intentional misconduct on the part of VerticalNet or its officers, directors, employees, agents or consultants, (c) any claim arising out of Impresse's use or possession of the portions of the Co-Branded Site provided by VerticalNet and the VerticalNet Sites as permitted by this Agreement; or (d) any claim that any portion of the VerticalNet Site or the VerticalNet Area of the Co-Branded Site violates, infringes or misappropriates any Intellectual Property Right of any third party and (ii) pay all costs, expenses and disbursements authorized by the Indemnitor (defined below) incurred in such defense, and any damages, liabilities, obligations, penalties or judgments awarded in any such action, or any settlement amount agreed to by VerticalNet. + +11 + +9.6. PROCEDURE. If any action shall be brought against a party in respect to which indemnity may be sought from the other party pursuant to the provisions of this Article 9 [DISCLAIMER OF WARRANTY, LIMITATION OF LI...], the party seeking indemnity (the "Indemnitee") shall follow the procedures in this Section. If an Indemnitee receives any notice of a claim or other allegation with respect to which the other party (the "Indemnitor") has an obligation of indemnity hereunder, then the Indemnitee will, within 15 days of receipt of such notice, give the Indemnitor written notice of such claim or allegation setting forth in reasonable detail the facts and circumstances surrounding the claim. The Indemnitee will not make any payment or incur any costs or expenses with respect to such claim, except as requested by the Indemnitor or as necessary to comply with this procedure. The Indemnitee will not make any admission of liability or take any other action that limits the ability of the Indemnitor to defend the case. The Indemnitor shall immediately assume the full control of the defense or settlement of such claim or allegation, including the selection and employment of counsel, and shall pay all authorized costs and expenses of such defense. The Indemnitee will fully cooperate, at the expense of the Indemnitor, in the defense or settlement of the claim. The Indemnitee shall have the right, at its own expense, to employ separate counsel and participate in the defense or settlement of the claim; provided that the Indemnitor shall have no liability for costs or expenses incurred by the Indemnitee, except to the extent authorized by the Indemnitor pursuant to this procedure. + +9.7. ESSENTIAL PART OF BARGAIN. The parties acknowledge that the disclaimers and limitations set forth in this Article 9 [DISCLAIMER OF WARRANTY, LIMITATION OF LI...] are an essential element of this Agreement between the parties and that the parties would not have entered into this Agreement without such disclaimers and limitations. + +Source: IMPRESSE CORP, S-1/A, 3/22/2000 + + + + + +10. MISCELLANEOUS + +10.1. INTELLECTUAL PROPERTY. + +10.1.1. Except for the express rights granted to Impresse under this Agreement, Impresse acknowledges and agrees that the Intellectual Property of VerticalNet is and shall remain the sole property of VerticalNet and nothing in this Agreement shall confer in Impresse any right of ownership or license rights in VerticalNet's Intellectual Property. In addition, Impresse shall not now or in the future contest the validity of VerticalNet's ownership of its Intellectual Property; provided, however, that Impresse may contest the validity of VerticalNet's Intellectual Property in any proceeding brought against Impresse alleging infringement or misappropriation of VerticalNet's Intellectual Property. + +10.1.2. Except for the express rights granted to VerticalNet under this Agreement, VerticalNet acknowledges and agrees that the Intellectual Property of Impresse is and shall remain the sole property of Impresse and nothing in this Agreement shall confer in VerticalNet any right of ownership or license rights in Impresse's Intellectual Property. In addition, VerticalNet shall not now or in the future contest the validity of Impresse's ownership of its Intellectual Property; provided, however, that VerticalNet may contest the validity of Impresse's Intellectual Property in any proceeding brought against VerticalNet alleging infringement or misappropriation of Impresse's Intellectual Property. + +12 + +10.2. GOVERNING LAW. This Agreement shall be governed by and interpreted under the laws of the State of Delaware without regard to its conflicts of law provisions. + +10.3. NO ASSIGNMENT. Except as otherwise set forth herein, neither party shall transfer, assign or cede any rights or delegate any obligations hereunder, in whole or in part, whether voluntarily or by operation of law, without the prior written consent of the other party, which consent may be withheld at the other party's reasonable business discretion; provided, however, that either party may transfer this Agreement without prior written consent of the other to an Affiliate of such party, or to the surviving party in a merger or consolidation, or to a purchaser of all or substantially all of its assets. + +10.4. GOOD FAITH. The parties undertake to display to each other the utmost good faith, consistent with their respective rights and obligations set forth in this Agreement. + +10.5. INDEPENDENT CONTRACTORS. In connection with this Agreement, each party is an independent contractor. This Agreement does not, and shall not be construed to, create an employer-employee, agency, joint venture or partnership relationship between the parties. Neither party shall have any authority to act for or to bind the other party in any way, to alter any of the terms or conditions of any of the other party's standard forms of invoices, sales agreements, warranties or otherwise, or to warrant or to execute agreements on behalf of the other or to represent that it is in any way responsible for the acts, debts, liabilities or omissions of the other party. + +10.6. NOTICES. All notices, reports, payments and other communications required or permitted to be given under this Agreement (each, a "Notice") shall be in writing and shall be given either by personal delivery against a signed receipt, by express delivery using a nationally recognized overnight courier, or by facsimile. All Notices shall be properly addressed as follows, or to such other addresses as may be specified in a Notice given hereunder: + +IF TO VERTICALNET: + +Attn: General Counsel VerticalNet, Inc. 700 Dresher Road, Suite 100 Horsham, Pennsylvania 19044 Tel No.: (215) 315-3200 Fax No.: (215) 784-1962 + +IF TO IMPRESSE: + +Attn: Siva Kumar Impresse Corporation 1309 South Mary Avenue Sunnyvale, CA 94087 Phone No.: (408) 530-2022 Fax No.: (408) 245-8336 + +13 + +A Notice shall be deemed to be effective upon personal delivery or, if sent via overnight delivery, upon receipt thereof. A Notice sent via facsimile is deemed effective on the same day (or if such day is not a business day, then on the next succeeding business day) if such facsimile is sent before 3:00 p.m. Prevailing Eastern Time and on the next day (or if such day is not a business day, then on the next succeeding business day) if such Notice is sent after 3:00 p.m. Prevailing Eastern Time. + +10.7. AMENDMENT OR MODIFICATION. No subsequent amendment, modification or waiver of any of the provisions of this Agreement shall be effective unless in writing and signed by the parties. + +10.8. ENTIRE AGREEMENT. This Agreement sets out the entire agreement between the parties with respect to the subject matter of this Agreement and supersedes all prior agreements, proposals, arrangements and communications, whether oral or written, with respect to the subject matter hereof. + +10.9. SEVERABILITY. If any provision of this Agreement is held by a tribunal of competent jurisdiction to be illegal, invalid, or otherwise unenforceable in any jurisdiction, then to the fullest extent permitted by law (a) the same shall not effect the other terms or provisions of this Agreement, (b) such term or provision shall be deemed modified to the extent necessary in the tribunal's opinion to render such term or provision enforceable, and the rights and obligations of the parties shall be construed and enforced accordingly, preserving to the fullest extent the intent and agreements of the parties set forth herein and (c) such finding of invalidity, illegality or unenforceability shall not affect the validity, legality or enforceability of + +Source: IMPRESSE CORP, S-1/A, 3/22/2000 + + + + + +such term or provision in any other jurisdiction. + +10.10. NO WAIVER. Failure to enforce any term of this Agreement is not a waiver of future enforcement of that or any other term. No term or provision of this Agreement will be deemed waived and no breach excused unless such waiver or excuse is in writing and signed by the party against whom enforcement of such waiver or excuse is sought. + +10.11. SURVIVAL. Sections 5.3 [TERMINATION AND RENEWAL] and 5.4 [TERMINATION AND RENEWAL], and Articles 6 [DISPUTE RESOLUTION], 7, 8, 9 and 10, any payment obligations of the parties hereunder accruing prior to the date of termination; and any other provision herein expressly surviving termination or necessary to interpret the rights and obligations of the parties in connection with the termination of the term of this Agreement will survive the termination or expiration of this Agreement. + +10.12. NO THIRD PARTY BENEFICIARIES. Nothing in this Agreement is intended to confer benefits, rights or remedies unto any person or entity other than the parties and their permitted successors and assigns. + +10.13. WAIVER OF JURY TRIAL. Each party hereby irrevocably waives all rights a party may have to a trial by jury in any legal action or proceeding arising out of or in connection with this Agreement or the transactions contemplated hereby. + +10.14. TITLES. The headings appearing at the beginning of the Sections contained in this Agreement have been inserted for identification and reference purposes only and shall not be used to determine the construction or interpretation of this Agreement. The nomenclature of the + +14 + +defined terms in this Agreement shall only be used for the construction of this Agreement, and are not to be used for any other purpose, including, but not limited to, interpretation for accounting purposes. + +10.15. FORCE MAJEURE. Neither party shall be held to be in breach of this Agreement by reason of a force majeure event, including, but not limited to, act of God, delay in transportation, fire, flood, earthquake, storm, war, act of a public enemy, civil commotion or any law, rule, regulation, order or other action by any public authority or any other matter reasonably beyond a party's control. To the extent failure to perform is caused by such a force majeure event, such party shall be excused from performance hereunder so long as such event continues to prevent such performance, and provided the non-performing party takes all reasonable steps to resume full performance. + +10.16. COMPLIANCE WITH LAWS. Each party shall comply with all prevailing laws, rules and regulations and obtain all necessary approvals, consents and permits required by the applicable agencies of the government of the jurisdictions that apply to its activities or obligations under this Agreement. + +10.17. EXECUTION IN COUNTERPARTS, FACSIMILES. This Agreement may be executed in one or more counterparts, each of which when delivered to the other party shall be deemed an original and all of which together shall constitute one and the same instrument. This Agreement shall become binding when any one or more counterparts hereof, individually or taken together, bear the signatures of both parties hereto. For the purposes hereof, a facsimile copy of this Agreement, including the signature pages hereto, shall be deemed an original. + +IN WITNESS WHEREOF, the parties to the Agreement by their duly authorized representatives have executed this Agreement as of the date first written above. + +VERTICALNET, INC. IMPRESSE CORPORATION + +By: /s/ Michael Hagon By: /s/ Siva Kumar ------------------------------- ---------------------------- + +Name: Name: ----------------------------- -------------------------- + +Title: Title: ---------------------------- ------------------------- + +15 + +Source: IMPRESSE CORP, S-1/A, 3/22/2000 \ No newline at end of file diff --git a/full_contract_txt/InmodeLtd_20190729_F-1A_EX-10.9_11743243_EX-10.9_Manufacturing Agreement.txt b/full_contract_txt/InmodeLtd_20190729_F-1A_EX-10.9_11743243_EX-10.9_Manufacturing Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..28221a391544c590121a386a68bc69cc3edceca3 --- /dev/null +++ b/full_contract_txt/InmodeLtd_20190729_F-1A_EX-10.9_11743243_EX-10.9_Manufacturing Agreement.txt @@ -0,0 +1,149 @@ +Exhibit 10.9 TURN - KEY MANUFACTURING AGREEMENT This Turn - Key Manufacturing Agreement (the "Agreement") is effective as of the 1.4.2011 (the "Effective Date") by and between: INVASIX LTD., with a principal place of business at Tavor Building, Shaar Yokneam, POB 533, Yokneam 20692, Israel. Hereinafter referred to as "Customer" And FLEXTRONICS ISRAEL LTD. with a principal place of business at Industrial Zone Migdal Haemek 23108 P.O.B. 867, Israel. Hereinafter referred to as "Contractor." Whereas Customer designs, manufactures and sells the Products as defined in Exhibit A attached hereto, which includes subassemblies components and know- how, that is confidential and proprietary property of Customer; Whereas Customer desires to buy manufacturing services; Whereas Contractor is in the business of Turn - Key projects; Whereas Customer acknowledges that Contractor's expertise is manufacturing and that Contractor's responsibility related to the Customer's Products is limited to this extent; Whereas Contractor declares that it has all the capabilities to supply manufacturing services for Customer's Products; and Whereas Contractor desires to sell and deliver its manufacturing services in accordance with Customer specifications all subject to the terms and conditions contained herein. Now therefore, the parties hereto have agreed and do hereby agree as follows: 1. Precedence 1.1 The terms and conditions and appendices herein shall govern all services performed by Contractor pertaining to the subject matter. 1.2 It is the intent of the parties that this Agreement and its appendices represent the entire agreement and prevail over the terms and conditions of any purchase order, acknowledgment form or order instruction. 2. Term This Agreement shall commence on the Effective Date and shall continue for an initial term of year as of the Effective Date. This Agreement shall automatically be renewed for successive one (1) year increments unless either party request in writing, at least ninety (90) days prior to the anniversary date, that this Agreement not to be renewed. 3. Scope Of Work Contractor will, pursuant to the written specifications given by Customer and pre approved by Contractor ("Specifications"), perform manufacturing services on behalf of Customer. These manufacturing services shall include, but not be limited to, labor, materials, testing, packaging and delivery to Customer, all subject to the terms and conditions contained in this Agreement. + +Source: INMODE LTD., F-1/A, 7/29/2019 + + + + + +4. Contractor's Obligations 4.1 Contractor shall provide Customer with the following services: - Material planning - Material procurement - Incoming Inspection - Assembly of printed circuit boards & cables - Final assembly & integration of the Product - In Circuit test - Functional test - Packaging and delivery 4.2 Customer's production facilities Contractor will be obliged to allocate to Customer, production and storage space as well as trained production and testing personnel as an integral part of this Agreement. Contractor shall apply for and receive the ISO13488 standard for the production facility, by no later than . During the term of this Agreement, the manufacturing services provided by the Contractor hereto shall confirm in all material respects with the ISOl3488 standard. 5. Customer's obligations Customer will provide the following: - Technical specifications - Standard Operation Procedures - Drawings - Bill of Materials - Approved Vendors list - Gerber data, CAD files - Quality requirements - Technical support, as required - Any additional information reasonably requested by Contractor or otherwise required hereunder. 6. Material Procurement The material procurement undertaking, pursuant to this Agreement, will be carried-out by the Contractor. 6.1 Contractor is authorized to purchase materials using standard purchasing practices including, but not limited to acquisition of materials recognizing Economic Order Quantity, ABC buy policy and long lead time components management, in order to meet the requirements of Customer's orders and forecasts. + +2 + +Source: INMODE LTD., F-1/A, 7/29/2019 + + + + + +6.2 Economic Order Quantity ("EOQ") for items which are un-returnable to vendor or unusable for other clients of the Contractor must be pre- approved by Customer. For such pre-approved EOQ's, Customer shall advance to the Contractor sums on account of future deliveries equal to the cost attributed to the quantity ordered exceeding the 3 months forecast. 6.3 Long Lead Items In order to manage demand fluctuations Contractor shall suggest from time to time a list of LLI's to be approved by the Customer. Contractor shall maintain in inventory certain quantities of LLI. "LLI" shall mean Long Lead Item materials required in order to complete manufacture and supply of Products. For the avoidance of doubt Customer shall have no additional liability with respect to the holding of LLI other than the liability provided herein below. The usage of LLI by Contractor for the manufacture of Items shall be by a written order by Customer in accordance with this Agreement, stipulating the quantity Customer wishes Contractor to use. If Contractor holds LLIs based on any written requirement for more than three (3) months, Customer shall be required to purchase such LLIs at their direct costs plus a handling fee of 2% of Product price. The purchase terms of such LLI's, set forth in Section 8.2 hereof. 6.4 Contractor is responsible for monitoring supplier's quality, according to the Specifications provided by Customer for all purchased materials. 6.5 In the event of termination of this Agreement or a cancellation of a Purchase Order, and/or discontinuance of a Product, or excess materials created by an Engineering Change, Customer agrees to compensate Contractor for unused material inventory which are affected by such termination, cancellation or discontinuance, as follows: (i) The cost of material inventory, whether in raw form or work in process, which are not returnable to the vendor without charge (unless the charge was approved by Customer, or usable for other Contractor's customers, including EOQ of unique parts. (ii) The cost of materials on order which cannot be cancelled without charge (unless the charge was approved by Customer. (iii) To the above applicable compensation, the Contractor shall be entitled to a handling fee of 2% of the compensation due. The compensation under this Sub-section shall be the sole compensation due to Contractor with respect to handling the Products/materials. (v) Payment shall be made to Contractor against delivery of the compensated materials to Customer. The compensation for finished Products is as set out in Section 7.3 below. 6.6 Contractor shall use its commercially reasonable efforts to cancel all applicable materials purchase orders and reduce materials inventory through return for credit programs or allocate materials for alternate programs, if applicable. Without derogating from the aforesaid, Customer shall pay in advance the same amount it is obligated to pay under this Section 6, on account of such inventory. Such advance shall be non refundable except to the extent such inventory was consumed by Contractor in order to manufacturing Customer's Products under this Agreement. + +3 + +Source: INMODE LTD., F-1/A, 7/29/2019 + + + + + +7. Forecasts and Purchase Orders 7.1 Customer shall issue to Contractor, on a monthly basis, a six (6) month rolling forecast setting forth projected demand for the Products (the "Forecast"). Contractor shall use all reasonable commercial efforts, including expediting materials and allocating capacity, in order to support Customer's request for increased production. 7.2 Contractor will supply all orders that do not exceed the forecast at the delivery times set forth in each Purchase Order. In the event Contractor anticipates at any time that it will not deliver Products within the prescribed timetable as set forth in the applicable Purchase Order, Contractor shall promptly so inform Customer by written notice of such delay. Contractor shall submit proposed revisions to the timetable that reflect Contractor's best estimates of what can realistically be achieved and shall use its best commercial efforts to achieve such timeline, unless otherwise directed by Customer and confirmed by Contractor. 7.3 Purchase Orders. Customer will issue written purchase orders, which specify all Products to be delivered within a minimum three (3) months period commencing on the date of acceptance of the purchase order by Contractor ("Purchase Order"). Contractor shall accept or reject (in writing summarizing the rejection causes) each Purchase Order according to its terms (including the delivery date) within five (5) working days of receipt of such order, if an order has not been confirmed within such period it shall be deemed rejected. 7.4 Finished Goods Inventory 7.4.1 In order to manage demand fluctuations, Contractor shall maintain an amount of additional units of each Product as FGI, in a minimum level of two (2) weeks of supply and a maximum of four (4) weeks of supply of each Product set forth in the most recent Customer's Forecast. "FGI" shall mean rolling finished goods inventory that Contractor shall be obligated to hold in inventory for Customer in addition to any Purchase Order amounts. The actual quantity of FGI required to be held by Contractor will be specified on a monthly basis in a formal document provided by Customer to Contractor for this purpose. For the avoidance of doubt Customer shall have no additional liability with respect to the holding of FGI other than the liability provided in Section 7.4.3 below. 7.4.2 When Customer draws from the FGI, Contractor shall replenish the FGI no later than sixty (60) days from such date that Customer draws from FGI, provided the drawing of FGI shall be by the issuance of a written order by Customer in accordance with this Agreement, stipulating the quantity Customer wishes to withdraw from the FGI. 7.4.3 If Contractor holds any FGI based on any forecast for more than three (3) months from the original delivery date specified in the applicable purchase order, Customer shall be required to purchase any and all such goods from Contractor for 100% of Contract Price of such goods and Section 8.3 below shall not apply. + +4 + +Source: INMODE LTD., F-1/A, 7/29/2019 + + + + + +7.5 Customer tooling, etc. All Customers' materials, tooling and equipment furnished to Contractor or paid for by Customer in connection with this Agreement and all paid for Products shall be clearly marked and remain the Customer's property. Contractor will maintain the tooling as provided in Exhibit B. 8. Customer Liability for Forecasts 8.1 Customer's liability with respect to any and all demand signals provided by Customer, including but not limited to "purchase orders," "forecasts," "schedules," "pick lists," with respect to any Products manufactured, produced, procured, stored or delivered by Contractor, including, but not limited to, any direct or indirect costs related thereto or related to components, work in progress and/or raw materials shall be limited to the amounts set forth in this Section 8 with respect to finished Products and in Section 6 concerning components, work in progress and/or raw materials. 8.2 In the event that Customer has either cancelled or delayed delivery of a Purchase Order and Customer has not taken delivery of the Products ordered under that Purchase Order within three (3) months from the original delivery date, then; (i) Contractor shall submit a claim for reimbursement for such cancelled or delayed Products within thirty (30) days from the end of such three (3) month period; (ii) Customer shall be liable to pay Contractor 100% of the Contract Price of such cancelled or delayed Products and (iii) Contractor shall hold the cancelled or delayed Products in its inventory and make them available to Customer (upon Customer's request) for a period of six (6) months from receipt of payment for such Products free of charge. 30 days before the lapse of the 6 month period, the Contractor shall notify the Customer of the upcoming lapse of the term. In the event that Customer, at its sole discretion, decides to repurchase any (or all) of the Products in said Period, and subject to the fulfillment of all Customer's obligations in this Sections 8.2 (i.e. 100% of the Contract Price has been paid to Contractor), then the price for such repurchase shall be 0% of the Contract Price. Thereafter, the Customer shall pay Contractor all direct costs in connection therewith. Provided Customer hereby authorizes Contractor to transfer such Products to a warehouse operated by Contractor or a third party as instructed by Customer. 8.3 In the event that for any reason whatsoever, Customer has not ordered any Products for a period of three (3) months, then: (i) Contractor shall submit a claim for reimbursement for Products that were forecasted for the upcoming three months in the last Forecast sent three (3) months ago (the "Last Forecast"); (ii) Customer shall be liable to pay Contractor: 100% of the Contract Price of the Product s forecasted for days 0-30 in the Last Forecast which were not delivered to Customer; and (iii) Contractor shall hold the Forecasted Products in its inventory and make them available to Customer (upon Customer's request) for a period of six (6) months of receipt of payment for such Products free of charge. 30 days before the lapse of the 6 month period, the Contractor shall notify the Customer of the upcoming lapse of the term. In the event that Customer at its sole discretion decides to repurchase any (or all) of the Forecasted Products in said Period and subject to the fulfillment of all Customer's obligations in this Section 8.3 (i.e. 100% of the Contract Price has been paid to Contractor), then the price for such repurchase shall be 0% of the Contract Price. Thereafter, the Customer shall pay Contractor all direct costs in connection therewith. Provided Customer hereby authorizes Contractor to transfer such Products to a warehouse operated by Contractor or a third party as instructed by Customer. + +5 + +Source: INMODE LTD., F-1/A, 7/29/2019 + + + + + +9. Quality 9.1 Contractor shall permit Customer to audit its quality procedures, upon three (3) business day advance written notice to Contractor and shall provide all assistance which is reasonably necessary for Customer to evaluate the quality of the Products. 9.2 Contractor shall maintain quality assurance standards in accordance with ISO 13488, Seller's Quality Assurance, Control and Inspection shall be in compliance with all material ISO 13488 standards during the Terms of this Agreement. 9.3 If a Product did not pass Customer's Automatic Test Process then Contractor will perform two rounds of repairs on the Product, if after such two rounds the Product still did not pass the ATP then Contractor will send the Product with a qualified personnel to Customer for repair. If after Customer tried to repair the Product and failed Customer will be obligated to pay for such defected product (if the reason is other than workmanship). 10. Express Limited Warranty For the purpose of this Agreement, "Warranty Period" shall mean twelve (12) months as of the date of delivery to Customer. Contractor represents and warrants that, for the Warranty Period, the Products (i) will be free from defects in workmanship, material (only to the same extent as the original manufacturer of the material warrants the Contractor), and manufacture; (ii) will comply the Specifications IPC610.B standard (in all material respects and unless otherwise was instructed by Customer). Contractor further represents and warrants that the Product will consist of new materials. The warranty provided in this Section shall not apply to (1) Customer's materials, tooling and equipment (2) Products modified by Customer or any third party without Contractor's prior written consent, (2) Products installed or operated by Customer or any third party in a manner inconsistent with the Specifications or the terms and conditions of this Agreement, or (3) Products damaged, abused, altered or misused by Customer or any third party, or as the result of fire, casualty, or other external cause (4) defects resulting directly or indirectly, wholly or partially, from Customer's Specifications or the design of the Products, (5) First articles, prototypes, pre-production units, test units or other similar Products. Upon any failure of a Product to comply with the above warranty, Contractor's sole obligation, and Customer's sole remedy, is for Contractor, at its option, to promptly repair or replace such Product and return it to Customer freight prepaid. Customer shall return Products covered by the warranty freight prepaid after completing a failure report and obtaining a return material authorization number from Contractor to be displayed on the shipping container. Customer shall bear all risks, costs and expenses, associated with Products that have been returned to Contractor for which there is no defect found and/or with Products not covered under the warranty above. + +6 + +Source: INMODE LTD., F-1/A, 7/29/2019 + + + + + +Customer will not pass through to end users or other third parties the warranties made by Contractor under this Agreement. Furthermore, Customer will not make any representations to end users or other third parties on behalf of Contractor, and Customer will expressly indicate that the end users and third parties must look solely to Customer in connection with any problems, warranty claim or other matters concerning the Product. EXCEPT AS SPECIFICALLY SET FORTH HEREIN, CONTRACTOR MAKES NO OTHER WARRANTIES OR CONDITIONS ON THE PRODUCTS, EXPRESS, IMPLIED, STATUTORY, OR IN ANY OTHER PROVISION OF THIS AGREEMENT OR COMMUNICATION WITH CUSTOMER, AND CONTRACTOR SPECIFICALLY DISCLAIMS ANY IMPLIED WARRANTY OR CONDITION OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. 11. Engineering Changes 11.1 Customer may, upon advance written notice to Contractor, submit engineering changes for incorporation into the Products. Contractor will review the engineering change and report to Customer within two (2) working days of any implications of the proposed changes. The report should include all possible implications on materials, delivery schedule, manufacturing process, quality and product cost and shall also quote the Contractors costs for implementing the changes. Customer and Contractor will agree on all aspects of implications and shall accordingly make revisions in outstanding Purchase Orders - if requested by Customer and subject to Contractor's consent in writing. 11.2 Contractor shall assure quick implementation of engineering changes. 12. Delivery and Inspection, Title and shipping 12.1 Contractor undertakes to report to Customer once (1) a week, or per Customer request, the quantity of Products ready for delivery 12.2 Customer will notify Contractor, from time to time, quantities of Products and destinations to which to ship the Products. 12.3 If the delivery destination is within Israel, excluding port/airport ("Limited Delivery Territory") than the delivery shall be made by Contractor at no additional cost and to such destination of delivery Contractor shall incur insurance transport costs. Upon delivery or the placement of an invoice by Contractor, whichever is earlier, Risk of loss and title will pass to Customer. 12.4 The price for Deliveries to other destinations outside the Limited Delivery Territory, including for export will be agreed by the parties. All risk of loss, responsibility and cost shall be borne by the Customer Ex-Factory. 12.5 To each delivery, Contractor shall include all required documentation (e.g. bill of lading, QA/QC certificate). Upon delivery to Customer, Customer will sign the bill of lading. Such signature shall only be deemed as acknowledgement of receipt of the delivery and not confirmation as to the delivered Products' condition and quality. + +7 + +Source: INMODE LTD., F-1/A, 7/29/2019 + + + + + +12.6 Subject to the above limitations, the Contractor will ship and deliver the Products according to Customer's instructions in the best and safest means of transportation, to the extent commercially reasonable. 13. Price and Price Reviews 13.1 Pricing conditions for manufacturing services supplied under this Agreement are defined in Appendix C. All prices will be quoted in US Dollars. 13.2 Price Review. Contractor and Customer will meet every three (3) months, during the term of this Agreement to review pricing and determine the actions required by both sides in order to achieve cost reduction. The new prices that will be agreed to and the said new prices will come into effect, will be reflected in the Purchase Orders submitted after such review. 13.3 It is agreed that, for the sake of facilitating uninterrupted manufacturing, Contractor may purchase materials for Customer's Products at prices higher than those agreed to with the following limitations: 13.3.1 For price change which has a cost impact less than US $200, based on one (1) quarter consumption will not require prior authorization from Customer. Contractor will be obliged to submit comprehensive written report to Customer, subsequent to such event. 13.3.2 For price change which has cost impact greater than US $200, based on one (1) quarter consumption will require prior written authorization from Customer. 13.3.3 Customer shall answer urgent requests for approvals for price change, within three (3) working days. 13.3.4 Maintain Credit Line. Customer agrees to provide all necessary financial information required by Contractor from time to time and as available to Customer in order to make a proper assessment of the creditworthiness of Customer. That includes full annually audited financials statements and, subjected the credit limit analysis request, Quarterly financial statements (P&L, BS and Cash Flow statements). Contractor will, in good faith, review Customer's creditworthiness periodically and may provide more favorable terms once it feels it is prudent to do so. 13.3.5 Upon Contractor's request at any time during the term of this Agreement, Customer shall obtain and maintain appropriate securities, such as letter of credit, escrow account, bank guarantees and /or pre-payments in an amount equal to the total value of all risks associated with the performance of any of the services under this Agreement, on an aggregate basis. 14. Terms of Payments 14.1 Contractor will invoice Customer per each delivery or as provided in Sections 6 and 8 hereinabove. The invoice shall include all purchase order details. The invoice will be quoted in US Dollars. 14.2 Contractor and Customer agree to terms of payments of current plus thirty (30) days from the date of invoice. Payment shall be affected in US Dollars. + +8 + +Source: INMODE LTD., F-1/A, 7/29/2019 + + + + + +15. Termination 15.1 Termination for cause If either party fails to meet anyone or more of the terms and conditions as stated in either this Agreement or the Appendices, Contractor and Customer agree to negotiate in good faith to resolve such default. If the defaulting party fails to cure such default or submit an acceptable written plan to resolve such default within thirty (30) days following notice of default, the non-defaulting party shall have the right to terminate this Agreement by furnishing the defaulting party with sixty (60) days written notice of termination. 15.2 Termination without cause Notwithstanding anything to the contrary stated in this Agreement, either party may terminate this Agreement at any time without cause by giving to the other party, not less than four (4) months written notice. 15.3 A Party may immediately terminate this Agreement should the other party: (i) become insolvent; (ii) enter into or filing a petition, arraignment or proceeding seeking an order for relief under the bankruptcy/insolvency laws of its respective jurisdiction; (iii) enter into a receivership of any of its assets; or (iv) enter into a dissolution of liquidation of its assets or an assignment for the benefit of its creditors. 16. Effect of Termination 16.1 in the case of termination, unless otherwise stipulated and subject to Customer fulfillments of all its payments obligations under this Agreement, Contractor will deliver all Products, materials to Customer and Customer will pay all amounts due under this Agreement, for all Products, materials mentioned on a Purchase Order or Change Order accepted by Contractor before expiration or termination date. 16.2 Except where the termination is a result of Contractor's material default Customer agrees to compensate Contractor for Products and materials as stipulated in Sections 6 and 8 of this Agreement. 16.3 Each party will promptly return to the other party, all. technical documentation (e.g. drawings, work instructions, data and design sheets) and/or Confidential Documents related to the present Agreement 16.4 Subject to Customer fulfillments of all its obligations under this Agreement, Contractor will return to customer all consigned materials, equipment and tooling stipulated in section 7.5 of this Agreement. 17. Dispute Resolutions 17.1 In the spirit of continued cooperation, the parties intend to and hereby establish the following dispute resolution procedure to be utilized in the unlikely event any controversy should arise out of or concerning the performance of this Agreement. 17.2 It is the intent of the parties that any dispute be resolved informally and promptly through good faith negotiations between Contractor and Customer. Either party may initiate negotiation proceedings by written notice to the other party setting forth the particulars of the dispute. The parties agree to meet in good faith to jointly define the scope and method to remedy the dispute. If these proceedings are not productive of a resolution, then senior management of Contractor and Customer are authorized to and will meet personally to confer in a bona fide attempt to resolve the matter. + +9 + +Source: INMODE LTD., F-1/A, 7/29/2019 + + + + + +17.3 Should the foregoing procedure not bring a mutually satisfactory solution within 30 days, each party will be free to proceed according to applicable law. 18. Limitation of Liability 18.1 Customer shall defend, indemnify and hold harmless Contractor from all claims, liabilities, costs, damages, judgments and attorney's fees resulting from or arising out of any alleged and/or actual infringement or other violation of any patents, patent rights, trademarks, trademark rights, trade names, trade name rights, copyrights, trade secrets, proprietary rights and processes or other such rights elated to the Product or claims relating to Customer's instructions, tooling, specifications and designs ("Claims") provided that: (i) Contractor will provide the Customer with prompt written notice of any Claim no later than three (3) business days following receipt of notice by Contractor; (ii) Contractor will grant Customer sole control of the defense and settlement of Claims, taking into account any reasonable request of Contractor; and (iii) Contractor will provide Customer with reasonable assistance, at Customer's sole expense. Customer assumes no liability for any Claims made by any third party to the extent that such Claims result from the use of specifications other than the Specification, unaltered by Contractor or anyone on its behalf. If such Claim is brought, or Customer in good faith determines a Claim is likely to be made, Customer shall notify Contractor and either: (1) procure for Contractor the right to continue to perform this Agreement; (2) modify the Specification so that there will no longer be an infringement or misappropriation or (3) terminate this Agreement and pay Contractor the consideration due under this Agreement for all services performed until the date of termination, including all payments set forth in Sections 6 and 8. 18.2 Contractor shall defend, indemnify and hold harmless Customer from all claims, liabilities, costs, damages, judgments and attorney's fees resulting from or arising out of any alleged and/or actual infringement or other violation of any patents, patent rights, trademarks, trademark rights, trade names, trade name rights, copyrights, trade secrets, proprietary rights and processes or other such rights as a result of the manufacturing methods employed by Contractor but excluding Claims as defined above) ("Manufacturing Claims") provided that: (i) Customer will provide Contractor with prompt written notice of any Manufacturing Claim no later than three (3) business days following receipt of notice by Customer; (ii) Customer will grant Contractor sole control of the defense and settlement of Manufacturing Claims, taking into account any reasonable request of Customer; and (iii) Customer will provide Contractor with reasonable assistance, at Contractor sole expense. If a Manufacturing Claim is brought, or Contractor in good faith determines a Manufacturing Claim is likely to be made, Contractor shall notify Customer and either: (1) procure for Customer the right to continue to perform this Agreement; (2) modify its manufacturing methods so that there will no longer be an infringement or misappropriation or (3) terminate this Agreement. + +10 + +Source: INMODE LTD., F-1/A, 7/29/2019 + + + + + +18.3 THE FOREGOING STATES THE ENTIRE LIABILITY OF THE PARTIES TO EACH OTHER CONCERNING INFRINGEMENT OF PATENT, COPYRIGHT, TRADE SECRET OR OTHER INTELLECTUAL PROPERTY RIGHTS. 18.4 No Other Liability. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY INCIDENTAL, CONSEQUENTIAL, SPECIAL OR PUNITIVE DAMAGES OF ANY KIND OR NATURE ARISING OUT OF THIS AGREEMENT OR THE SALE OF PRODUCTS, WHETHER SUCH LIABILITY IS ASSERTED ON THE BASIS OF CONTRACT, TORT (INCLUDING THE POSSIBILITY OF NEGLIGENCE OR STRICT LIABILITY), OR OTHERWISE, EVEN IF THE PARTY HAS BEEN WARNED OF THE POSSIBILITY OF ANY SUCH LOSS OR DAMAGE. AND EVEN IF ANY OF THE LIMITED REMEDIES IN THIS AGREEMENT FAIL OF THEIR ESSENTIAL PURPOSE. IN ADDITION, NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN OR OTHERWISE, THE PARTIES ACKNOWLEDGE THAT AS AN ELECTRONIC MANUFACTURING SERVICES PROVIDER WORKING ON A COST PLUS BASIS SUPPLIER MUST LIMIT ITS LIABILITY IN CONNECTION HEREWITH AND THEREFORE, CONTRACTOR'S LIABILITY IS FURTHER LIMITED IN ANY EVENT, UNDER ANY LAW, RULE OR REGULATION, TO ANY AMOUNT IT ACTUALLY RECEIVED IN CONSIDERATION OF THE MANUFACTURING SUBJECT MATTER OF THE RESPECTIVE CLAIM OR DEMAND BY CUSTOMER OR ANY THIRD PARTY. 19. Confidentiality Customer's product and designs contain certain elements that are proprietary to Customer. Furthermore, in the course of this agreement, technical and commercial information of the Customer may be revealed or become known to the Contractor. Contractor shall keep in confidence all information relating to the foregoing, shall not use any part of it for any purpose except the performance of this Agreement or in connection therewith, and shall not enable any third party to use ft without the prior written consent of Customer or unless such information becomes public domain. Contractor shall ensure that all employees who directly participate in any of the services performed under this Agreement and may accordingly receive certain confidential information of the Customer are subject to similar non-disclosure and non-use undertakings and are made aware of the proprietary and confidential nature of the information. The provisions of this Section 19 shall survive termination or expiration of the Agreement. 20. Non-Competition 20.1 The Contractor and the Customer will not be allowed to employ employees of the other party, directly or indirectly, for one (1) year from the date the employee has ceased to be employed by the other party. The above mentioned restriction may be waived by either party provided that it is done by a written and specific consent. + +11 + +Source: INMODE LTD., F-1/A, 7/29/2019 + + + + + +20.2 During the Term, of this Agreement and for an additional period of two (2) years from the date of termination of this Agreement, the Contractor undertakes not to develop on its own account any Product. 21. General 21.1 Force Majeur. Neither party shall be liable for any failure or delay in its performance under this Agreement due to acts of God, acts of civil or military authority, fires, floods, earthquakes, riots, wars, sabotage, labor disputes, material unavailability due to unwarranted production stoppage by supplier or any other cause beyond the reasonable control of the delayed party provided that the delayed party, (i) gives the other party written notice of such cause, and (ii) uses its reasonable efforts to remedy such delay in its performance. 22.2 Severability. If any provision of this Agreement is held by a court of competent jurisdiction to be unenforceable, such provision shall be deemed null and void, and the remainder of the Agreement shall continue to be in full force and effect, while the parties shall negotiate in good faith to replace the provision with another enforceable one reflecting as closely as possible the parties initial intention. 22.3 Relationship of the Parties. Each of the parties shall at all times during the term of this Agreement act as, and shall represent itself to be, an independent contractor. Neither Party shall have any right or authority to assume or create any obligations or to make any representations or warranties on behalf of the other parry whether express or implied, or to bind the other party in a respect whatsoever. 22.4 Governing Law. The construction, interpretation and performance of this Agreement and all transactions under it shall be governed by the law of the State of Israel, without giving effect to choice of law rules, and both Parties consent to jurisdiction by the courts of the City of Haifa. 22.5 Choice of Language. The original of this Agreement has been written in English. Any notices provided by any party as required by this Agreement shall be written in the English language. 22.6 Notifications. Any and all notices and other communications whatsoever under this Agreement shall be in writing, sent by registered mail or by, email or facsimile to the address set forth above. Notices sent via registered mail shall be deemed to have been delivered within 3 business days after the date posted. With regards to the normal course of business, notices sent via email or facsimile shall be deemed to have been received 1 business day following the date of transmission. 22.7 Entire Agreement. No amendment of this Agreement will be valid unless made in writing signed by a duly authorized representative of both parties. No provision of this Agreement will be deemed waived and breach or default excused unless the waiver or excuse is in writing and signed by the party issuing it. The terms and conditions contained in this Agreement terminate and supersede all prior oral or written understanding between the parties and shall constitute the entire agreement between them concerning the subject matter of this Agreement. 22.8 This Agreement may be executed in one or more counterparts, each of which will be deemed the original, but all of which will constitute but one and the same document. + +12 + +Source: INMODE LTD., F-1/A, 7/29/2019 + + + + + +The parties agree that this Agreement and its appendices may not be modified except in writing, signed by both parties. 22.9 Set-off. Amounts due hereunder may not be set off except with mutual prior written consent. 22.10 Insurance. Customer specifically agrees to maintain insurance coverage for any finished Products or materials which passes to Customer pursuant to this Agreement and which is stored on the premises of Contractor. 22.11 Successors, Assignment. This Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective permitted successors, permitted assigns and legal representatives. Neither Party shall have the right to assign or otherwise transfer its rights or obligations under this Agreement except with the prior written consent of the other Party, not to be unreasonably withheld or delayed. Notwithstanding the foregoing, Contractor shall be entitled to assign its rights to be paid hereunder to banks or first tier financial institutions. In Witness whereof, the Parties have caused this Agreement to be duly executed for and on behalf of: Flextronics (Israel) Ltd. INVASIX LTD 514073618 Contractor Customer Date: Date: Name: Name: MOSHE MIZRAHY Title: Title: CEO + +Signature: Signature: /s/ Moshe Mizrahy + +13 + +Source: INMODE LTD., F-1/A, 7/29/2019 + + + + + +Exhibit A Product's Description Customer Flow Meter Assy PS Shelf Assy Pump Assy Heat Exchanger Assy Pump with Pneomatics Assy Controller to Speaker Harness DLP Controller Card Assy Distribution Card Assy Laser Driver Assy Folding Wheels Arms Assy DLP Controller Card + Compulab RF Connector Assy Touch Screen Assy Touch Panel Adaptor Assy EMERSON Kit Assy HP Fractora Firm Harness Harness for Dermablation Univer.HP Termistor PCB Card A InMode RF HPS Set InMode Laser Driver Card Assem Display Assy InMode IPL Card Reworked FootSwitch Preliminary Pack.Assy. Fractora Kit Pack. Fractora Plus Applicator Fractora Firm-Forma Firm-Forma Fractora 5pcs Box Set 24 Coat Fractora 5pcs box set 126 pin RF Card Assy 75W 2Temp Sensors LCD Adaptor Card AC Filter Card Assy + +Source: INMODE LTD., F-1/A, 7/29/2019 + + + + + +Fractora 5 Tips 60 Pin Pack. BodyTite II Controller Card As Fan Rework Assy Fractora 5 Tips 20 Pin Pack. Fractora Cabinet Front Cover A BodyTite II Cabinet Front Cov BodyTite - Shell Sample Fractora 5pcs Box Set 24 Pin DermAblate Electrode Connectio Body Tite Fractora-BodyFX Blue BodyTite RFAL Grey Platform BodyTite II Controller Card As T6 HP LED Card BodyTite System Packging Assy InMode System 2 Platform Only 24V PSU Card Assy. Gear Pump Assy. Heat Exchanger Assy Flow Meter Assy BodyTite II Top Assy InModeRF Color 1 Votiva InModeRF Color 2 BodyTite InModeRF Color 3 Contura BodyTite Color3 FRACTORA InMode System 2 Color1 Optimas InModeRF Color 5 BodyTite PRO InMode System 2 Color 2 Triton Fract.InitialTipsKit + +Source: INMODE LTD., F-1/A, 7/29/2019 + + + + + +Exhibit B Description HP HI-POT tester Blue wave-50(UV) RF tester Leakage current TOS3200 EARTH Continuity tester TOS6210 Tester controler.Programmer memory plag. Power Suply (For Leptop) Komputer (LEPTOP-DELL) Display MAG tos5052(Hi-POT) Load RF Load Burn-in Test Barcode reader(Argox) TITE FX Testing Adaptor Fractora-electrical test(five tips) Jig for clening FRACTORA TIPS Thermistor tester(FRACTORA FIRM,FRACTORA PLUS) Thermistor mounting Tool(FRACTORA FIRM) Tite FX Programmer Tite FX TESTER Hi-POT CLIP Thermistor mounting Tool(FRACTORA PLUS) Fen HL2010E.(Digital display). Lecroy wave ACE232 LCRY2101c02774(SCOPE) TEK P5000100(PROB_) PP016 ADAPTOR Cable Lable Applicatot J I G -In Mode(water system check) Jig screen assy Jig-Laser DUMMY Heat Exchanger washing Jig Diolaze-Testor CASE LAZER FootSwith Simulator TORC-GEDORE In Mode TESTER Laboratory DC POWER SUPPLY Model: LE3303 Tray For 3 Pcs Laser Printing BURNING(ברוצ) Tool for assembly of Cradle Stem Screw BODY TITE (AS601206A) BODY TITE (AS601206A) BODY TITE (AG600007A) InMode Main Connector Pin-Checker JIG InMode2 Pump Burn-in JIG Screen LOGO Placement Jig Side Label Placement Jig Front Label Placement Jig + +Source: INMODE LTD., F-1/A, 7/29/2019 \ No newline at end of file diff --git a/full_contract_txt/InnerscopeHearingTechnologiesInc_20181109_8-K_EX-10.6_11419704_EX-10.6_Distributor Agreement.txt b/full_contract_txt/InnerscopeHearingTechnologiesInc_20181109_8-K_EX-10.6_11419704_EX-10.6_Distributor Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..c1ac52a52424dc733d90fe0f98fd32d1e1f8f3a4 --- /dev/null +++ b/full_contract_txt/InnerscopeHearingTechnologiesInc_20181109_8-K_EX-10.6_11419704_EX-10.6_Distributor Agreement.txt @@ -0,0 +1,217 @@ +Exhibit 10.6 ATTACHMENT A ERCHONIA CORPORATION EXCLUSIVE DISTRIBUTOR AGREEMENT + +This agreement ("Agreement") is made by and between Erchonia Corporation. ("Erchonia") whose address is 650 Atlantis Rd., Melbourne, Florida, USA, 32904 and InnerScope Hearing Technologies Inc, ("Distributor") whose address is 2151 Professional Drive, Second Floor, Roseville, California, USA, 95661 hereafter referred to collectively as the ("Parties"). + +Recitals + +A. Erchonia is engaged in, among other things, the business of developing and promoting low level lasers. Erchonia desires to retain Distributor to promote, distribute and sell such equipment listed in Schedule A (the "Products"). B. Distributor is engaged in the business of, among other things, selling medical products and services, specifically for the treatment of hearing disorders. C. Distributor desires to obtain the exclusive right to distribute the Products pursuant to the terms set for in this Agreement. D. The parties agree that these recitals shall be considered a term of this Agreement. NOW, THEREFORE, the parties agree: + +1. Grant of License. + +a. Subject to the terms set forth in this agreement, Erchonia grants Distributor the exclusive, non- transferable right and license to promote, distribute and sell the Products identified in Exhibit A to those type of customer specified in Exhibit B and only within the Territory specified in Exhibit B. Distributor shall only distribute or sell the Products to customers who are licensed health care professionals and meet the other requirements set forth in Exhibit B. + +b. Erchonia retains the right, in its sole discretion, to add, delete, upgrade, or modify the Products from time to time. Upon receipt of notice of such change, Distributor shall cease to market and distribute earlier versions of the Products and/or Products deleted from Schedule A. Distributor will deliver, at Erchonia's expense, all recalled, discontinued or products otherwise rendered unmarketable (under the terms of this paragraph) to Erchonia. Erchonia will fully reimburse Distributor for all costs related to the cost of materials and products returned to Erchonia + +2. Obligations of Distributor. + +a. Distributor shall use its best efforts to market, promote and sell the Products to the authorized customers in the Filed of Use and in the Territory during the term of this agreement. + +b. Distributor agrees that during the term of this agreement it meet the minimum performance goals set forth in Exhibit C to this agreement. Failure to meet these minimum performance goals for any period, shall, at Erchonia's option (i) be considered a breach of this agreement for which Erchonia shall have all the rights and remedies provided for herein upon a breach of this agreement, including termination of this agreement, or (ii) shall give Erchonia to terminate or limit the exclusivity provisions of this agreement + +c. Upon Erchonia's reasonable request, Distributor shall consult with Erchonia regarding Distributor's marketing and promotion efforts in the Territory and Field of Use and shall cooperate with Erchonia's reasonable requests regarding Distributor's marketing and promotional efforts. + +d. Distributor shall maintain appropriate records concerning the sales of the Products. Such records shall include at a minimum the name, address and telephone number of each customer, the date of sale, a listing of the Products sold to each customer. Upon Erchonia's request, Distributor shall provide Erchonia with regular periodic reports including the information described in this paragraph. All such information shall be available for inspection by Erchonia, upon reasonable notice. Distributor shall also maintain such other records related to sales of the Products as Erchonia may reasonably request. + +e. Distributor shall pay for all products purchased in a timely manner. Source: INNERSCOPE HEARING TECHNOLOGIES, INC., 8-K, 11/9/2018 + + + + + +f. Distributor shall not, and may not permit any other person, including customers, to reproduce, distribute, sell or dispose of the Products, in whole or in part, except as expressly permitted under this Agreement. + +g. Distributor will at all times be and represent itself to be an independent distributor, not an agent or employee of Erchonia. + +h. Distributor may not make any contracts or commitments on behalf of Erchonia nor make any warranties or other representations regarding the Products other than those authorized herein. + +i. Distributor must adhere to and comply with any use recommendations or restrictions for the Products as indicated or recommended by Erchonia. Distributor shall not make any statements, representations, or recommendations inconsistent with any use restriction or limitation. + +j. Distributor shall not sell or export the Products outside the United States without prior written consent of Erchonia. To the extent sales of the Products outside the United States are permitted, Distributor will be solely responsible to comply with all applicable import and export laws and regulations. + +k. Distributor shall promptly notify Erchonia of any complaint about negative, unwanted, deleterious, or other side effects due to the use of the Products, including the complainant's name, contact information, and date of complaint. + +l. During the term of this agreement Distributor shall at all time act in responsible and professional manner. Distributor shall not do anything which is contrary to or which in Erchonia's reasonable business judgment is harmful to its honor, goodwill or reputation. + +m. Distributor shall at all times comply with all applicable laws and regulations. + +3. Restriction on Promotion of Competing Products. During the term of this agreement, Distributor shall not market, sell advertise or promote the sale or use of any product or device which is competitive with or substantially similar to the Products, without the prior express written consent of Erchonia, nor shall they assist any third party in doing so. Notwithstanding the foregoing, to the extent Distributor or Distributor's customer is a licensed health care professional or licensed health care practitioner, nothing in this paragraph shall prevent or limit Distributor or Distributor's customer from exercising their independent medical judgment with regard to the treatment of any patient. + +4. Orders, Payment, and Shipment. + +a. Erchonia agrees to provide Products to Distributor pursuant to orders placed by Distributor in the form of individual purchase orders issued by Distributor to Erchonia. Such purchase orders shall set forth the quantity of each product ordered, the required delivery date, and the point of delivery. The price for the Products shall be as designated in Schedule A. Erchonia may revise its prices from time to time and deliver a written 90 day notice of the reasonable price revision to Distributor; provided that Erchonia agrees that the prices listed in Exhibit A shall not be increased during the first 90 days of this agreement. + +b. Erchonia shall submit invoices to Distributor after or concurrent with shipment of Products to Distributor at the delivery address. Distributor shall pay half (1/2) of the purchase price prior to shipment and the remaining balance 30 days after shipment of the Products. Payments received after the 30 day calendar period will be subject to a late fee of 1.5% of the invoice amount. All payments shall be made in U.S. Dollars. + +c. Distributor is responsible for all shipping costs and applicable sales taxes. Distributor is also responsible for all customs and duties applicable to any sales of the Products outside the United States, to the extent such sales are authorized or permitted. + +5. Expenses and Taxes. + +a. Distributor is responsible for any out-of-pocket expenses incurred including but not limited to Products for demonstration, Products for treatment, sales and promotional material, seminar costs including room rental, and travel-related expenses. + +b. Distributor is responsible for all federal, state and local taxes attributable to compensation received + +Source: INNERSCOPE HEARING TECHNOLOGIES, INC., 8-K, 11/9/2018 + + + + + +pursuant to this Agreement, including sales, income, social security, and unemployment. + +6. Term and Termination. + +a. Unless terminated earlier as provided in this agreement, this Agreement shall have an initial term of three (3) years. This agreement shall automatically renew for a period of three (3) years and upon the parties mutual agreement on new minimum performance goals for the renewal period. + +b. Either party may terminate this Agreement in the event of a material breach by the other party, provided the breaching party is first given reasonably detailed, written notice of the breach. If the breach is not cured within ten days of such notice, the Agreement will terminate immediately. + +c. This Agreement may be terminated immediately by Erchonia under any of the following conditions: (a) if the Distributor is declared insolvent or bankrupt; (b) if a petition is filed in any court to declare Distributor bankrupt or for reorganization under the Bankruptcy Law or any similar statute and such petition is not dismissed within 30 days. + +d. Upon termination of this Agreement by either party, Distributor shall immediately cease using the Trademarks (defined below) and discontinue all representations that it is an authorized distributor of the Products or is in anyway affiliated with Erchonia. + +e. Except upon termination due to Distributors breach of this agreement, Erchonia will complete delivery of all purchase orders accepted by it prior to termination of this agreement; provided that Distributor shall remain liable for full payment of all such orders. + +f. The provisions of paragraphs 2 (c) (reporting), 7 (Confidentiality), 8 (Protection of Intellectual Property, 10 (Warranty; Limitation of Liability), 11 (Indemnification), 12 (General Provisions) shall survive termination of this agreement. + +7. Confidentiality. + +a. In connection with this Agreement, the Distributor will have disclosed to it or otherwise have access to information that is confidential and proprietary to Erchonia. Such information includes but is not limited to Product designs, methods and processes, know-how, business or marketing strategies, Product plans, plans for research and development, development tools, financial information, production costs and information, and supplier and customer lists and information and medical research conducted in pursuit of intended medical applications of the product. + +b. Distributor will not copy, reproduce, disclose, disseminate or provide any confidential information to any third party, without the prior written consent of Erchonia. In addition, Distributor agrees that it will use such confidential information only for the purpose of carrying out its obligations under this agreement. Upon termination of this agreement for any reason, Distributor will return all such confidential information and any copies of it to Erchonia and will remove and delete any such confidential information for any computers, computer systems or other electronic, magnetic or optical media in its possession or control. + +c. Notwithstanding the above, the following materials will not be deemed confidential: + +i. Information which was in the public domain at the time of disclosure + +ii. Information which was published or otherwise became part of the public domain after disclosure to the Distributor through no fault of the Distributor; and + +iii. Information which was received from a third party who did not acquire it, directly or indirectly, from Erchonia under an obligation of confidence except where required by law. + +8. Protection of Intellectual Property. + +a. Ownership of all applicable copyrights, trade secrets, patents and other intellectual property rights in the Products are and shall at all times remain vested in Erchonia, its licensors or assigns. + +b. Distributor shall promptly inform Erchonia of any suggested modifications or improvements to the Products and shall, upon Erchonia's request and at Erchonia's expense, execute any documents necessary or appropriate to assign or confirm that all intellectual property rights in any modification + +Source: INNERSCOPE HEARING TECHNOLOGIES, INC., 8-K, 11/9/2018 + + + + + +or improvement related to the Products are fully vested in Erchonia. + +c. Distributor shall not modify nor create or attempt to create, by reverse engineering or otherwise, the Products supplied hereunder, or adapt the Products in any way for other uses without Erchonia's prior written consent + +d. Several of the Products may be protected by one or more U.S. or international patents. Distributor shall take reasonable steps to ensure that all patent markings and/or notices for or related to the Products are properly placed on the Products, and on any advertising or marketing materials for the Products, and it shall not remove any such markings, notices or labels from any of the Products or related materials or related advertising or marketing materials. + +9. Use of Erchonia Trademarks. + +a. All trademarks, including service marks, trade names and trade address that Erchonia uses in connection with the license granted hereunder (the "Trademarks") are and remain the exclusive property of Erchonia. Nothing contained in this Agreement shall be deemed to give Distributor any right, title or interest in any Trademark. The Trademarks include but are not limited to: the names "Erchonia", "Erchonia Medical", the phrase "Erchonia, Designs Into the Future", the Erchonia logo, packaging design, and Product design. + +b. During the term of this Agreement, Erchonia grants Distributor a non-exclusive, non-transferable license to use the Trademarks for advertising and promotion of Products. Distributor shall use the Trademarks according to quality standards defined by Erchonia which shall be reasonable and shall be no greater than the standards used by Erchonia for its own advertising and promotion. + +c. Upon Erchonia's request, the Distributor shall at its expense deliver to Erchonia representative samples of labels, advertisements, catalogs, spec sheets, and the like, containing the Trademarks, and to inspect all of Distributors websites, social media accounts and any online information posted by Distributor, to ensure that such Trademarks are used only in a manner complaint with the quality standards. Should such material fail to meet the standards set by Erchonia, as determined by Erchonia in its sole discretion, Distributor shall not use and shall withdraw and retract any promotion or advertising that Erchonia finds unsuitable and will at its expense destroy such materials or make them compliant. + +d. All goodwill associated with such trademark use by Distributor inures to the benefit of Erchonia. + +10. Warranty; Limitation of Liability. + +a. Distributor Warranty. Distributor represents that it has requisite knowledge and experience to provide the products and services contracted for herein. + +b. Erchonia Warranty and Warranty Limitations: Other than the written warranty accompanying the Products, Erchonia DISCLAIMS ALL OTHER REPRESENTATIONS AND WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR NON-INFRINGEMENT OF THIRD PARTY INTELLECTUAL PROPERTY RIGHTS. + +c. IN NO EVENT SHALL Erchonia BE LIABLE FOR ANY LOSS OF PROFIT OR ANY OTHER COMMERCIAL DAMAGE, INCLUDING BUT NOT LIMITED TO SPECIAL, INCIDENTAL, CONSEQUENTIAL OR OTHER INDIRECT DAMAGES UNDER ANY CAUSE OF ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, CLAIMS ARISING FROM MALFUNCTION OR DEFECTS IN THE PRODUCTS. + +11. Indemnification. + +a. Erchonia shall indemnify, defend and hold Distributor harmless from any claims, demands, liabilities or expenses, including reasonable attorneys' fees, incurred by Distributor as a result of any claim or proceeding against Distributor arising out of or based upon: (i) a claim that the Products infringe upon any U.S. patent, trademark, copyright or other intellectual property rights of any third party, (ii) the products fail to comply with applicable federal law or regulation. + +b. Distributor shall promptly notify Erchonia of any suit or claim by a third party relating to the Products or use of the Products and Distributor shall promptly furnished Erchonia with a copy of each + +Source: INNERSCOPE HEARING TECHNOLOGIES, INC., 8-K, 11/9/2018 + + + + + +communication, notice or other action relating to said claim. Erchonia shall have the right to assume sole authority to conduct the trial or settlement of such claim or any negotiations related to any claim for which Erchonia is obligated to indemnify Distributor at Erchonia expense; and Distributor shall provide reasonable information and assistance requested by Erchonia in connection with such claim or suit. + +c. Distributor shall indemnify, defend and hold Erchonia harmless from any claims, demands, liabilities or expenses, including reasonable attorneys' fees, incurred by Erchonia as a result of any claim or proceeding against Erchonia arising out of or based upon (i) the combination, operation or use of the Products with any hardware, products, programs or data not supplied or approved in writing by Erchonia, if such infringement would have been avoided but for such combination, operation or use; (ii) the modification of the Products by Distributor or its Customers; (iii) any breach of this agreement by Distributor; or (iv) any negligent, grossly negligent, or willful or reckless acts by Distributor, or any of its officers, employees, agents or representatives. + +12. General Provisions: + +a. Assignment. Distributor may not assign to any person any duties or obligations arising under this Agreement without Erchonia's prior written consent (which consent may be withheld in Erchonia's sole discretion). Notwithstanding the foregoing, the Distributor may engage individuals, at the sole expense and responsibility of the Distributor, to assist the Distributor in performing any of the Distributor's duties or obligations arising under this Agreement. Erchonia may not assign any duties or obligations arising under this Agreement, except to a successor who acquires substantially all of the assets of Erchonia. + +b. Arbitration. The parties intend to negotiate in good faith and resolve any dispute arising under this Agreement. In the event the parties are unable to resolve any such dispute to binding arbitration for settlement in accordance with the rules of the American Arbitration Association, the arbitrator will determine the manner in which the parties are to pay the costs of such arbitration, including reasonable attorneys' fees + +c. Notices. All notices and communications required under this Agreement will be in writing and will be delivered in person, faxed or mailed, postage prepaid, by overnight express carrier, to the address of the parties listed at the beginning of this Agreement, or to any other address as such party designates in a written notice to the other party. All notices sent pursuant to the terms of this section will be deemed received on the date of delivery if personally delivered or faxed, or if sent by overnight express carrier, on the next business day immediately following the day sent + +d. Severability. The provisions of this Agreement will be deemed severable and the invalidity or unenforceability of any provision will not affect the validity or enforceability of any other provisions hereof. + +e. Governing Law. This Agreement shall be governed in all respects by the laws of the United States and the State of Florida, except for conflict of laws provisions. The parties agree that for any dispute, controversy or claim arising out of or in connection with this Agreement, venue and personal jurisdiction shall be in the federal or state court with competent jurisdiction located in Brevard Country, Florida. + +f. Entire Agreement. This Agreement constitutes and expresses the entire agreement and understanding between the parties hereto with respect to the subject matter, all revisions discussions, promises, representation, and understanding relative thereto, if any, being herein merged. + +Dated: . + +Erchonia Medical Corporation. By _____________________ Its _____________________ + +Distributor: ________________________ InnerScope Hearing Technologies, Inc. By _______________________ Its _______________________ Exhibits Exhibit A - Products and Pricing Exhibit B - Territory and Field of Use + +Source: INNERSCOPE HEARING TECHNOLOGIES, INC., 8-K, 11/9/2018 + + + + + +Exhibit C - Minimum Performance Goals Rev. IMS 8/29/2018 3:38 PM + +Source: INNERSCOPE HEARING TECHNOLOGIES, INC., 8-K, 11/9/2018 + + + + + +SCHEDULE A ERCHONIA CORPORATION Products and Pricing Erchonia 3LT Laser - Hearing Products Version (product may be renamed) All prices are per unit sold excluding freight, duty, and taxes. Prices will remain in effect for the period of the initial 5 year term. Wholesale Price Item To Be determined when successful research project is complete. The parties agree to cooperate in developing a private label version of the above products on the terms the parties may agree. The private label products shall be versions of the above products labeled and packaged to bear the Distributor's name or the Distributor's trade name. In addition, customized packaging for the private label products may also be developed on the terms agreed to by the parties. Pricing for the private labeled products may be modified due to any increased costs of production or packaging for the private labeled products. In addition, Erchonia may require reasonable minimum purchasing requirements for each run of private labeled products. + +Source: INNERSCOPE HEARING TECHNOLOGIES, INC., 8-K, 11/9/2018 + + + + + +EXHIBIT B + +Licensed Territory + +Worldwide + +Field of Use + +The products will be sold only for the use in the treatment of hearing disorders. + +Source: INNERSCOPE HEARING TECHNOLOGIES, INC., 8-K, 11/9/2018 + + + + + +Exhibit C + +Minimum Performance Goals + +Minimum Performance won't be determined until FDA 50k market clearance is obtained. At that time parties will operate in good faith to set performance goals. + +Note: Performance goals to begin 120 days after receipt of FDA market clearance. + +Source: INNERSCOPE HEARING TECHNOLOGIES, INC., 8-K, 11/9/2018 \ No newline at end of file diff --git a/full_contract_txt/IntegrityFunds_20200121_485BPOS_EX-99.E UNDR CONTR_11948727_EX-99.E UNDR CONTR_Service Agreement.txt b/full_contract_txt/IntegrityFunds_20200121_485BPOS_EX-99.E UNDR CONTR_11948727_EX-99.E UNDR CONTR_Service Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..b9c1c7048ad7a6f3624a1673a3933132ce848235 --- /dev/null +++ b/full_contract_txt/IntegrityFunds_20200121_485BPOS_EX-99.E UNDR CONTR_11948727_EX-99.E UNDR CONTR_Service Agreement.txt @@ -0,0 +1,59 @@ +DISTRIBUTION AND SERVICES AGREEMENT January 18, 2020 This is to confirm that, in consideration of the agreements hereinafter contained, the undersigned, the Integrity Short Term Government Fund, (the "Fund"), an open-end, diversified, management investment company organized as a series of The Integrity Funds, a Delaware statutory trust, has agreed that Integrity Funds Distributor, LLC, ("Integrity"), shall be, for the period of this distribution agreement (the "Agreement"), the principal underwriter of shares issued by the Fund, including such classes of shares as may now or hereafter be authorized (the "Shares"). SECTION 1. SERVICES AS UNDERWRITER Section 1.1 Integrity will act as principal underwriter for the distribution of the Shares covered by the registration statement, prospectus, and statement of additional information then in effect of the Fund (the "Registration Statement") under the Securities Act of 1933, as amended (the "1933 Act"), and the Investment Company Act of 1940, as amended (the "1940 Act"). Section 1.2 Integrity agrees to use its best efforts to solicit orders for the sale of the Shares at the public offering price, as determined in accordance with the Registration Statement, and will undertake such advertising and promotion as it believes is reasonable in connection with such solicitation. Integrity shall order Shares from the Fund only to the extent that it shall have received purchase orders therefore. Section 1.3 All activities by Integrity as underwriter of the Shares shall comply with all applicable laws, rules, and regulations, including, without limitation, all rules and regulations made or adopted by the Securities and Exchange Commission (the "SEC") or by any securities association registered under the Securities Exchange Act of 1934 and the Fund's Registration Statement. Section 1.4 Integrity will provide one or more persons during normal business hours to respond to telephone questions concerning the Fund. Section 1.5 Integrity acknowledges that, whenever in the judgment of the Fund's officers such action is warranted for any reason, including, without limitation, market, economic, or political conditions, those officers may decline to accept any orders for, or make any sales of, the Shares until such time as those officers deem it advisable to accept such orders and to make such sales. Section 1.6 Integrity shall be deemed to be an independent contractor and, except as specifically provided or authorized herein, shall have no authority to act for or represent the Fund. Integrity will act only on its own behalf as principal should it choose to enter into selling agreements with selected dealers or others. Integrity may allow commissions or concessions to dealers in such amounts as Integrity shall determine from time to time, as set forth in the Fund's Registration Statement. Except as may otherwise be determined by Integrity and the Fund from time to time, such commissions or concessions shall be uniform to all dealers. Shares sold to dealers shall be for resale by such dealers only at the public offering price(s) set forth in the Fund's then current Registration Statement. The price the Fund shall receive for all Shares purchased from the Fund shall be the net asset value used in determining the public offering price applicable to the sale of such Shares. + +Source: INTEGRITY FUNDS, 485BPOS, 1/21/2020 + + + + + +Section 1.7 In consideration of the services rendered pursuant to this Agreement, Integrity shall receive the excess, if any, of the sales price, as set forth in the Fund's Registration Statement, over the net asset value of Shares sold by Integrity, as underwriter. The Fund shall also pay Integrity any distribution and/or service fees applicable to the Shares as authorized by the Shareholder Services Plan (the "Plan") adopted by the Fund under Rule 12b-1 of the Investment Company Act of 1940 and set forth in the Fund's Registration Statement. Such fees shall be payable in the manner and terms set forth in the Plan. Section 1.8 Integrity will bear all expenses in connection with the performance of its services and the incurring of distribution expenses under this Agreement. For purposes of this Agreement, "distribution expenses" of Integrity shall mean all expenses borne by Integrity or by any other person with which Integrity has an agreement approved by the Fund, which expenses represent payment for activities primarily intended to result in the sale of Shares, including, but not limited to, the following: (a) payments made to, and expenses of, persons who provide support services in connection with the distribution of Shares, including, but not limited to, office space and equipment, telephone facilities, answering routine inquiries regarding the Fund, processing shareholder transactions, and providing any other shareholder services; (b) costs relating to the formulation and implementation of marketing and promotional activities, including, but not limited to, direct mail promotions and television, radio, newspaper, magazine, and other mass media advertising; (c) costs of printing and distributing prospectuses and reports of the Fund to prospective shareholders of the Fund; (d) costs involved in preparing, printing, and distributing sales literature pertaining to the Fund; (e) costs involved in obtaining whatever information, analyses, and reports with respect to marketing and promotional activities that the Fund may, from time to time, deem advisable; and 2 + +Source: INTEGRITY FUNDS, 485BPOS, 1/21/2020 + + + + + +(f) sales commissions and other fees paid, together with related financing costs to brokers, dealers or other selling entities with a dealer agreement in effect for the sale of Fund Shares. Distribution expenses, however, shall not include any expenditures in connection with services which Integrity, any of its affiliates, or any other person has agreed to bear without reimbursement. Section 1.9 Integrity shall prepare and deliver reports to the Treasurer of the Fund and to the Investment Adviser on a regular, at least quarterly, basis, showing the distribution expenses incurred pursuant to this Agreement and the Plan and the purposes therefore, as well as any supplemental reports as the Trustees, from time to time, may reasonably request. SECTION 2. DUTIES OF THE FUND Section 2.1 The Fund agrees at its own expense to execute any and all documents, to furnish any and all information, and to take any other actions that may be reasonably necessary in connection with the qualification of the Shares for sale in those states that Integrity may designate. Section 2.2 The Fund shall furnish from time to time, for use in connection with the sale of the Shares, such information reports with respect to the Fund and its Shares as Integrity may reasonably request, all of which shall be signed by one or more of the Fund's duly authorized officers; and the Fund warrants that the statements contained in any such reports, when so signed by one or more of the Fund's officers, shall be true and correct. The Fund shall also furnish Integrity upon request with: (a) annual audits of the Fund's books and accounts made by independent public accountants regularly retained by the Fund, (b) semi-annual unaudited financial statements pertaining to the Fund, (c) quarterly earnings statements prepared by the Fund, (d) a monthly itemized list of the securities in the portfolio of the Fund, (e) monthly balance sheets as soon as practicable after the end of each month, and (f) from time to time such additional information regarding the Fund's financial condition as Integrity may reasonably request. Section 2.3 The Fund shall pay to Integrity, as set forth in the Registration Statement, any distribution and service fee authorized by the Plan. SECTION 3. REPRESENTATIONS AND WARRANTIES Section 3.1 The Fund represents to Integrity that all registration statements, prospectuses, and statements of additional information filed by the Fund with the SEC under the 1933 Act and the 1940 Act with respect to the Shares of the Fund have been carefully prepared in conformity with the requirements of the 1933 Act, the 1940 Act, and the rules and regulations of the SEC thereunder. As used in this Agreement, the terms "registration statement," "prospectus," and "statement of additional information" shall mean any registration statement, prospectus, and statement of additional information filed by the Fund with the SEC and any amendments and supplements thereto which at any time shall have been filed with the SEC. The Fund represents and warrants to Integrity that any registration statement, prospectus, and statement of additional information, when such registration statement becomes effective, will include all statements required to be contained therein in conformity with the 1933 Act, the 1940 Act, and the rules and regulations of the SEC; that all statements of fact contained in any registration statement, prospectus, or statement of additional information will be true and correct when such registration statement becomes effective; and that neither any registration statement nor any prospectus or statement of additional information when such registration statement becomes effective will include an untrue statement of material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading to a purchaser of Shares. Integrity may, but shall not be obligated to, propose from time to time such amendment or amendments to any registration statement and such supplement or supplements to any prospectus or statement of additional information as, in the light of future developments, may, in the opinion of Integrity's counsel, be necessary or advisable. If the Fund shall not propose such amendment or amendments and/or supplement or supplements within fifteen days after receipt by the Fund of a written request from Integrity to do so, Integrity may, at its option, terminate this Agreement. The Fund shall not file any amendment to any registration statement or supplement to any prospectus or statement of additional information without giving Integrity reasonable notice thereof in advance; provided, however, that nothing contained in this Agreement shall in any way limit the Fund's right to file at any time such amendments to any registration statement and/or supplements to any prospectus or statement of additional information, of whatever character, as the Fund may deem advisable, such right being in all respects absolute and unconditional. 3 + +Source: INTEGRITY FUNDS, 485BPOS, 1/21/2020 + + + + + +SECTION 4. INDEMNIFICATION Section 4.1 The Fund authorizes Integrity and any dealers with whom Integrity has entered into dealer agreements to use any prospectus or statement of additional information furnished by the Fund from time to time in connection with the sale of Shares. The Fund agrees to indemnify, defend, and hold Integrity, its several officers and governors, and any person who controls Integrity within the meaning of Section 15 of the 1933 Act, free and harmless from and against any and all claims, demands, liabilities, and expenses (including the cost of investigating or defending such claims, demands, or liabilities and any counsel fees incurred in connection therewith) which Integrity, its officers and governors, or any such controlling person may incur under the 1933 Act, the 1940 Act, or common law or otherwise, arising out of or based upon any untrue statement or alleged untrue statement of a material fact contained in any registration statement, any prospectus, or any statement of additional information, or arising out of or based upon any omission or alleged omission to state a material fact required to be stated in any registration statement, any prospectus, or any statement of additional information, or necessary to make the statements in any of them not misleading; provided, however, that the Fund's agreement to indemnify Integrity, its officers or governors, and any such controlling person shall not be deemed to cover any claims, demands, liabilities, or expenses arising out of or based upon any statements or representations made by Integrity or its representatives or agents other than such statements and representations as are contained in any registration statement, prospectus, or statement of additional information and in such financial and other statements as are furnished to Integrity pursuant to paragraph 2.2 hereof; and further provided that the Fund's agreement to indemnify Integrity and the Fund's representations and warranties hereinbefore set forth in paragraph 3 shall not be deemed to cover any liability to the Fund or its shareholders to which Integrity would otherwise be subject by reason of willful misfeasance, bad faith, or gross negligence in the performance of its duties, or by reason of Integrity's reckless disregard of its obligations and duties under this Agreement. The Fund's agreement to indemnify Integrity, its officers and governors, and any such controlling person, as aforesaid, is expressly conditioned upon the Fund's being notified of any action brought against Integrity, its officers or governors, or any such controlling person, such notification to be given by letter or by telegram addressed to the Fund at its principal office in Minot, North Dakota, and sent to the Fund by the person against whom such action is brought, within ten days after the summons or other first legal process shall have been served. The failure so to notify the Fund of any such action shall not relieve the Fund from any liability that the Fund may have to the person against whom such action is brought by reason of any such untrue statement or omission or alleged omission otherwise than on account of the Fund's indemnity agreement contained in this paragraph 4.1. The Fund's indemnification agreement contained in this paragraph 4.1 and the Fund's representations and warranties in this Agreement shall remain operative and in full force and effect regardless of any investigation made by or on behalf of Integrity, its officers and governors, or any controlling person, and shall survive the delivery of any Shares. This agreement of indemnity will inure exclusively to Integrity's benefit, to the benefit of its several officers and governors, and their respective estates, and to the benefit of the controlling persons and their successors. The Fund agrees to notify Integrity promptly of the commencement of any litigation or proceedings against the Fund or any of its officers or trustees in connection with the issuance and sale of any Shares. 4 + +Source: INTEGRITY FUNDS, 485BPOS, 1/21/2020 + + + + + +Section 4.2 Integrity agrees to indemnify, defend, and hold the Fund, its several officers and trustees, and any person who controls the Fund within the meaning of Section 15 of the 1933 Act, free and harmless from and against any and all claims, demands, liabilities, and expenses (including the costs of investigating or defending such claims, demands, or liabilities and any counsel fees incurred in connection therewith) that the Fund, its officers or trustees, or any such controlling person may incur under the 1933 Act, the 1940 Act, or common law or otherwise, but only to the extent that such liability or expense incurred by the Fund, its officers or trustees, or such controlling person resulting from such claims or demands shall arise out of or be based upon (a) any unauthorized sales literature, advertisements, information, statements, or representations or (b) any untrue or alleged untrue statement of a material fact contained in information furnished in writing by Integrity to the Fund and used in the answers to any of the items of the registration statement or in the corresponding statements made in the prospectus or statement of additional information, or shall arise out of or be based upon any omission or alleged omission to state a material fact in connection with such information furnished in writing by Integrity to the Fund and required to be stated in such answers or necessary to make such information not misleading. Integrity's agreement to indemnify the Fund, its officers and trustees, and any such controlling person, as aforesaid, is expressly conditioned upon Integrity's being notified of any action brought against the Fund, its officers or trustees, or any such controlling person, such notification to be given by letter or telegram addressed to Integrity at its principal office in Minot, North Dakota, and sent to Integrity by the person against whom such action is brought, within ten days after the summons or other first legal process shall have been served. The failure so to notify Integrity of any such action shall not relieve Integrity from any liability that Integrity may have to the Fund, its officers or trustees, or to such controlling person by reason of any such untrue or alleged untrue statement or omission or alleged omission otherwise than on account of Integrity's indemnity agreement contained in this paragraph 4.2. Integrity agrees to notify the Fund promptly of the commencement of any litigation or proceedings against Integrity or any of its officers or governors in connection with the issuance and sale of any Shares. 5 + +Source: INTEGRITY FUNDS, 485BPOS, 1/21/2020 + + + + + +Section 4.3 In case any action shall be brought against any indemnified party under paragraph 4.1 or 4.2, and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate in, and, to the extent that it shall wish to do so, to assume the defense thereof with counsel satisfactory to such indemnified party. If the indemnifying party opts to assume the defense of such action, the indemnifying party will not be liable to the indemnified party for any legal or other expenses subsequently incurred by the indemnified party in connection with the defense thereof other than (a) reasonable costs of investigation or the furnishing of documents or witnesses and (b) all reasonable fees and expenses of separate counsel to such indemnified party if (i) the indemnifying party and the indemnified party shall have agreed to the retention of such counsel or (ii) the indemnified party shall have concluded reasonably that representation of the indemnifying party and the indemnified party by the same counsel would be inappropriate due to actual or potential differing interests between them in the conduct of the defense of such action. SECTION 5. EFFECTIVENESS OF REGISTRATION Section 5.1 None of the Shares shall be offered by either Integrity or the Fund under any of the provisions of this Agreement and no orders for the purchase or sale of the Shares hereunder shall be accepted by the Fund if and so long as the effectiveness of the registration statement then in effect or any necessary amendments thereto shall be suspended under any of the provisions of the 1933 Act or if and so long as a current prospectus as required by Section 5(b)(2) of the 1933 Act is not on file with the SEC; provided, however, that nothing contained in this paragraph 5 shall in any way restrict or have an application to or bearing upon the Fund's obligation to repurchase Shares from any shareholder in accordance with the provisions of the Fund's prospectus, statement of additional information, or declaration of trust. SECTION 6. NOTICE TO INTEGRITY Section 6.1 The Fund agrees to advise Integrity immediately in writing: 6 + +Source: INTEGRITY FUNDS, 485BPOS, 1/21/2020 + + + + + +(a) of any request by the SEC for amendments to the registration statement, prospectus, or statement of additional information then in effect or for additional information; (b) in the event of the issuance by the SEC of any stop order suspending the effectiveness of the registration statement, prospectus, or statement of additional information then in effect or the initiation of any proceeding for that purpose; (c) of the happening of any event that makes untrue any statement of a material fact made in the registration statement, prospectus, or statement of additional information then in effect or that requires the making of a change in such registration statement, prospectus, or statement of additional information in order to make the statement therein not misleading; and (d) of all actions of the SEC with respect to any amendment to any registration statement, prospectus, or statement of additional information which may from time to time be filed with the SEC. SECTION 7. TERM OF AGREEMENT Section 7.1 This Agreement shall continue until January 18, 2022, and thereafter shall continue automatically for successive annual periods ending on January 18th of each year, provided such continuance is specifically approved at least annually by (a) the Fund's Board of Trustees and (b) a vote of a majority (as defined in the 1940 Act) of the Fund's Trustees who are not interested persons (as defined in the 1940 Act) of the Fund and who have no direct or indirect financial interest in the operation of the Plan, in this Agreement, or any agreement related to the Plan (the "Qualified Trustees"), by vote cast in person at a meeting called for the purpose of voting on such approval. This Agreement is terminable with respect to the Fund, without penalty, (a) on 60 days' written notice, by vote of a majority of the Qualified Trustees or by vote of a majority (as defined in the 1940 Act) of the outstanding voting securities of the Fund or (b) on 90 days' written notice by Integrity. This Agreement will also terminate automatically in the event of its assignment (as defined in the 1940 Act). SECTION 8. MISCELLANEOUS Section 8.1 The Fund recognizes that governors, officers, and employees of Integrity may from time to time serve as directors, officers, and employees of corporations and business trusts (including other investment companies) and that Integrity or its affiliates may enter into distribution or other agreements with such other corporations and trusts. Section 8.2 It is expressly agreed that the obligations of the Fund hereunder shall not be binding upon any of the trustees, shareholders, nominees, officers, agents, or employees of the Fund, personally, but bind only the property of the Fund. The execution and delivery of this Agreement have been authorized by the Trustees and signed by an authorized officer of the Fund, acting as such, and neither such authorization by such Trustees nor such execution and delivery by such officer shall be deemed to have been made by any of them individually or to impose any liability on any of them personally, but shall bind only the property of the Fund. 7 + +Source: INTEGRITY FUNDS, 485BPOS, 1/21/2020 + + + + + +Section 8.3 This Agreement shall be construed in accordance with the laws of the State of Kansas. Section 8.4 This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original; but such counterparts shall, together, constitute only one instrument. Section 8.5 This Agreement may not be amended or modified in any manner except by both parties with the same formality as this Agreement and as may be permitted or required by the 1940 Act. Section 8.6 The captions of this Agreement are included for convenience of reference only and in no way define or delimit any of the provisions hereof or otherwise affect their construction or effect. In Witness Whereof, the parties hereto have caused this Agreement to be executed as of the date first set forth herein. Integrity Short Term Government Fund By: /s/ Shannon D. Radke Shannon D. Radke - President Accepted: Integrity Funds Distributor, LLC By: /s/ Shannon D. Radke Shannon D. Radke - President Dated: January 18, 2020 8 + +Source: INTEGRITY FUNDS, 485BPOS, 1/21/2020 \ No newline at end of file diff --git a/full_contract_txt/IntegrityMediaInc_20010329_10-K405_EX-10.17_2373875_EX-10.17_Co-Branding Agreement.txt b/full_contract_txt/IntegrityMediaInc_20010329_10-K405_EX-10.17_2373875_EX-10.17_Co-Branding Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..9a8886820d4d38fad189e4f492603f45c818adfd --- /dev/null +++ b/full_contract_txt/IntegrityMediaInc_20010329_10-K405_EX-10.17_2373875_EX-10.17_Co-Branding Agreement.txt @@ -0,0 +1,199 @@ +1 EXHIBIT 10.17 + + PRODUCT DEVELOPMENT AND CO-BRANDING AGREEMENT + + "SONGS 4 WORSHIP SERIES" + + EXCLUDING CONFIDENTIAL PORTIONS + +/1/ Indicates information which has been redacted pursuant to a request for confidential treatment. + +2 + + INDEX TO THE CONFIDENTIAL PORTIONS + + PAGE SECTION LINE(S) ---- ------- ------- 1 1(c) 3, 4, and 5 3 3(a) 4, 5, 10, 11, 12 and 13 4 4(c) 2, 4 and 5 4 4(d) 2, 3, 4 and 5 5 5 2 + +3 + + PRODUCT DEVELOPMENT AND CO-BRANDING AGREEMENT "SONGS 4 WORSHIP SERIES" + + This Agreement, entered into this the 10th day of January 2000, by and between INTEGRITY INCORPORATED, a Delaware corporation with principal offices at 1000 Cody Road, Mobile, Alabama ("Integrity") and TIME LIFE, INC., a Delaware corporation d/b/a Time Life Music, with principal offices located at 2000 Duke Street, Alexandria, Virginia 22314 ("TL"). The parties wish to produce a series of recorded compilations and companion song books featuring praise and worship repertoires, which will be co-branded and co-marketed throughout the world. Now, therefore, the parties agree as follows: + +1. Product Concept and Creation. + + a. Product description. The product to be created under the series trade name "Songs 4 Worship" will be a praise and worship continuity series, with each volume in the series containing approximately 22 songs. Each volume will be manufactured in Double CD, Double Cassette, and song book formats, with standard double jewel boxes, inlays, booklets and j-cards (the "Product"). TL and Integrity will jointly develop the repertoire, and all repertoire selections are subject to master, mechanical and print rights clearance in accordance with the financial terms established below. The exact songbook format, song selection and number of songbook volumes has not yet been determined, and TL has no obligation to sell any songbooks produced pursuant to this Agreement. + + b. Branding. The Product will prominently display the "Songs 4 Worship" logo and trademark (or other logo as mutually approved) and will also bear the labels of "Time Life Music" and "Integrity Music" in equal proportion on the exterior of Product packaging. The "Integrity Music" and "Time Life Music" logos will be used on advertising whenever possible, and it is understood that neither logo will be used without the other with reference to the Product. + + c. Integrity's responsibilities. Integrity will obtain master lease and print agreements with all third party owners of masters embodied in the Product at its own expense. Mechanical rates will not exceed [**]/1/ percent ([**]/1/%) of the then-current statutory rate, and Print licenses will not exceed a prorated portion of [**]/1/ percent ([**]/1/%) of the retail selling price, Integrity will also manufacture the Product and sell to TL its requirements for resale. + +--------------- /1/ Indicates information which has been redacted pursuant to a request for confidential treatment. + +4 + +Source: INTEGRITY MEDIA INC, 10-K405, 3/29/2001 + + + + + + d. TL's responsibilities. At its sole expense, TL will create all artwork for Product covers and packaging, and furnish Integrity with the same for manufacturing of the Products. All such artwork will be subject to Integrity's reasonable approval. (Integrity agrees to respond to any request for approval within five (5) business days after Integrity's receipt of request and samples.) In addition, TL will pay all mastering expense required in preparation for manufacturing. + + e. Shared expenses. The parties agree to share equally in costs of additional products created (excluding the Product, and song books, which such song books shall be created at Integrity's sole discretion and expense), by mutual agreement under the "Songs 4 Worship" branding. + +2. Marketing and Distribution. + + a. Time Life Distribution. TL will hold exclusive worldwide rights to promote and sell the product through the following distribution channels: Outgoing telemarketing, General Market retail, and General Market catalogs, and exclusive rights within the United States for Television Direct response. TL will have Internet and e-commerce rights with respect to its own web site and other General Market e-commerce. In addition, TL may cross-sell the products to its internal list by inserts placed in mailings for other TL products and services (but excluding direct mail campaigns for the Product.) TL may obtain television and/or direct response rights in certain international territories upon Integrity's agreement. + + b. Integrity Distribution. Integrity will hold exclusive worldwide rights to promote and sell the product to/through the following distribution channels: Christian retail (CBA or Christian Booksellers Association markets), direct mail (including continuity sales, church sales, digital and e-commerce sales.) Integrity will have Internet and e-commerce rights with respect to its own web site and other Christian e-commerce. Integrity shall have the right to license distribution of the Product through all channels of distribution throughout the remainder of the world. + + c. Selling Price. The parties agree that the initial suggested retail selling price for the products will be $19.95 for CD's, $17.95 for Cassettes, and $19.95 for song books. Any change in the suggested retail selling price will be mutually agreed by the parties. The parties acknowledge that they cannot control the prices set by independent retailers and resellers, but agree that sales by the parties hereto via e-commerce will be the same, and such will be mutually agreed. + + 2 + +5 + + d. Mailing Lists. The parties hereby agree that they will mutually share mailing list data of purchasers of the products created hereunder in exchange for names of equal value, (i.e., an expired name for an expired name, active buyer for active buyer.) TL specifically agrees to supply Integrity with data on former subscribers to its "Songs 4 Life" series, who have subsequently canceled for the express purpose of soliciting Product continuity subscriptions. + + e. Retail release. The, parties will mutually agree upon the date the products shall be released to retail (General Market and CBA); and it is hereby agreed that such release shall be simultaneous (i.e., television and direct response will have a period of exclusivity before the products are available at retail). + +3. Product sales to TL. + + a. Integrity will, upon receipt of approved purchase orders from TL, sell to TL in non-returnable box lot quantities, TL's requirements products rates calculated on the following basis (plus freight). The copyright royalty on recorded products is based on [**]/1/% of the then current statutory mechanical rate, and on song books, [**]/1/ percent ([**]/1/%) of the retail selling price (prorated to each copyright holder). Integrity may adjust the prices charged to TL on each volume to accurately reflect the then-current royalty obligation to all parties, including Integrity. + + CD Cassette Song book + +Source: INTEGRITY MEDIA INC, 10-K405, 3/29/2001 + + + + + + --------- -------- --------- Manufacturing $ [**]/1/ $ [**]/1/ $ [**]/1/ (May be adjusted if actual costs exceed above amounts) + + Master Lease royalty [**]/1/ [**]/1/ -None- + + Copyright royalty [**]/1/ [**]/1/ [**]/1/ (Based on 75% of $.075 statutory rate X 22) ----- ----- ----- + + Approximate Total $ [**]/1/ $ [**]/1/ $ [**]/1/ + + b. In consideration of the above pricing, TL guarantees to purchase from Integrity a minimum of ten thousand (10,000) units of each recorded Product during the first thirty-two (32) months of release. TL's initial order for each recorded Product shall be a minimum of five thousand (5,000) units. + +--------------- /1/ Indicates information which has been redacted pursuant to a request for confidential treatment. + + 3 + +6 + + c. TL may purchase from Integrity limited quantities of the Product for its promotional use, at the Manufacturing cost set forth in paragraph 3(a) above, provided the quantity of such purchases does not exceed seven percent (7%) of the total royalty bearing units of such Product title purchased by TL, TL warrants that any units so purchased, whether or not labeled "promotional only" or cut-out, will be given away for purposes of promotion of the Products, and will not be sold. If for any reason, Integrity and TL are subject to lower "free goods" limits by any third party license, the foregoing shall be adjusted to comply with any such license(s). + +4. Royalties payable by Integrity. + + a. Integrity will pay and be responsible for all royalties due to owners of the recorded masters, which such royalties will be inclusive of all performer, artist, producer and other fees. + + b. Integrity will pay and be responsible for all royalties to the copyright owners of the compositions embodied in the recorded masters (or song books), such royalties commonly known as mechanical royalties or print royalties. + + c. On sales of recorded products pursuant to this Agreement (less any returns) Integrity will pay to TL royalties in the amount of [**]/1/ ($[**]/1/) for each and every unit of the product sold by Integrity in the United States pursuant to this Agreement, and [**]/1/ the foregoing rate or [**]/1/ percent ([**]/1/%) of Integrity's net receipts, whichever is less, on subject products outside the United States. For purposes of this Agreement, "net receipts" shall be the amount received by a party in the United States, after deduction of any exchange fees, commissions, or expenses to collect. + + d. On sales of printed products (song books) pursuant to this Agreement (less any returns) Integrity will pay to TL royalties in the amount of [**]/1/ ($[**]/1/) for each and every unit of the product sold by Integrity in the United States pursuant to this Agreement, and [**]/1/ the foregoing rate or [**]/1/ percent ([**]/1/%) of Integrity's net receipts, whichever is less, on subject products outside the United States. No royalties will be paid to TL on printed products, until Integrity shall have recouped its out-of-pocket production costs from such royalties payable to TL pursuant to this subparagraph. + +--------------- /1/ Indicates information which has been redacted pursuant to a request for confidential treatment. + + 4 + +7 + +5. Royalties payable by TL. On sales of products pursuant to this Agreement (less any returns) TL will pay to Integrity royalties in the amount of [**]/1/ ($[**]/1/) for each and every unit of the product sold by it pursuant to this Agreement. + +Source: INTEGRITY MEDIA INC, 10-K405, 3/29/2001 + + + + + +6. Accountings. Accounting statements and, if applicable, royalty payments for products sold will be rendered by each party quarterly within sixty (60) days after the expiration of each calendar quarter. Only products which have been paid or credited to the account of the seller shall be deemed sold. No royalties will be payable on the sales of any products by any third-party distributors or licensees until such time as accountings and payment or final credit therefor has been received by the paying party. Either party, at its sole expense, upon at least thirty (30) days written notice (and not more than once in respect of any accounting period) will have the right to inspect the other party's books regarding the obligations hereunder for a period of two (2) years from the date on which any statement is rendered. Such auditing party must make specific written objection within such two (2) year period. Thereafter, it will be deemed to have consented to any such statements or accountings which will then be considered an account stated as between the parties, not subject to any objection for any reason whatsoever. Provided the objecting party has made timely written objection, as aforesaid, such party may file an action regarding same within two (2) years and six (6) months after the applicable statement is rendered, after which time any such action will be deemed barred. + +7. Sound Recording Copyright and Trademark License. + + a. Integrity Trademarks. Integrity hereby grants to TL the right to use its "Integrity Music" name and logo ("the Integrity Trademarks') in connection with the products produced during the Term of this Agreement for as long as the parties continue to sell and distribute such products at no additional cost to TL, and in accordance with the terms and conditions contained herein. TL will honor the notice requirement relating to the Integrity Trademarks and will place such trademarks on all products and advertising produced hereunder in accordance with the applicable regulations and Integrity guidelines. Integrity warrants that it has all rights to grant TL the right to use the Integrity Trademarks and will indemnify and hold TL harmless with respect thereto. TL recognizes Integrity's title to the Integrity Trademarks and will not at any time do or suffer to be done any act or thing which will in any way impair Integrity's rights in and to the Integrity Trademarks. It is understood that TL will not acquire and will not claim any title to the Integrity Trademarks adverse to Integrity by virtue of this license, or through TL's use of the Integrity Trademarks. + +--------------- /1/ Indicates information which has been redacted pursuant to a request for confidential treatment. + + 5 + +8 + + b. TL Trademarks. TL hereby grants to Integrity the right to use its "TL Music" name and logo ("the TL Trademarks") in connection with the products produced during the Term of this Agreement for as long as the parties continue to sell and distribute such products at no additional cost to Integrity, and in accordance with the terms and conditions contained herein. Integrity will honor the notice requirement relating to the Integrity Trademarks and will place such trademarks on all products and advertising produced hereunder in accordance with the applicable regulations and TL guidelines. TL warrants that it has all rights to grant Integrity the right to use the TL Trademarks and will indemnify and hold Integrity harmless with respect thereto. Integrity recognizes TL's title to the TL Trademarks and will not at any time do or suffer to be done any act or thing which will in any way impair TL's rights in and to the TL Trademarks. It is understood that Integrity will not acquire and will not claim any title to the TL Trademarks adverse to TL by virtue of this license, or through Integrity's use of the TL Trademarks. + + c. Sound Recording Copyright. The parties hereby agree that the copyright in the Product sound recording compilation will be jointly registered by Integrity in the names of Integrity and TL. + + d. Series Trademark. TL will trademark the series name in joint names of TL and Integrity. + +8. Term. This agreement shall commence as of date first above written, and shall Continue through December 31, 2004 ("the Term"). Thereafter, the parties must mutually agree in writing to extend the term for additional periods of time. + +Source: INTEGRITY MEDIA INC, 10-K405, 3/29/2001 + + + + + +9. Warranties; Suspension, Termination + + a. Each party hereto warrants, represents, covenants and agrees that it has the right and power to enter into this Agreement, to grant the rights herein granted by it, and to perform the services agreed to be performed by it hereunder, and that no materials, ideas or other properties furnished or designated by it is subject to any restriction whatsoever, or is violative of the rights of any person, firm or corporation, including, without limitation, contract rights, copyrights and rights of privacy. + + b. If, because of an act of God, inevitable accident, fire, lockout, strike or other labor dispute, riot or civil commotion, act of public enemy, enactment, rule, order or act of any government or governmental instrumentality (whether federal, state, local or foreign), failure of technical facilities, failure or delay of transportation facilities, illness or incapacity of any performer or producer, or other cause of a similar or + + 6 + +9 + + different nature not reasonably within either party's control, such party is materially hampered in the recording, manufacture, distribution or sale of phonograph records, or its normal business operations become commercially impractical, then without limiting its rights, it will have the option upon notice to suspend the Term of this Agreement for the duration of any such contingency. In the event of a suspension owing to a "force majeure," which suspension exceeds six (6) consecutive months, the non-suspending party may terminate this Agreement upon ten (10) days written notice to other, but only if such "force majeure" does not affect a substantial portion of the United States recording industry or the suspension is not lifted by the suspending party within ten (10) days of the receipt of the written notice from the other party. + +10. Indemnification. Each party hereto agrees to indemnify the other party and save and hold the other harmless from any and all claims, causes of action, damages, liabilities, costs, losses, and expenses (including legal costs and attorneys' fees) arising out of or connected with any claim, demand or action which is inconsistent with any of the warranties, representations, covenants or agreements which the indemnifying party has made in this Agreement. Pending the determination and settlement of any such claim, demand or action, the non-indemnifying party will have the right, at its election, to withhold payment to you of any monies otherwise payable hereunder, in an amount reasonably related to that claim, demand or action, and its estimated costs and expenses (including legal costs and attorneys' fees) in connection therewith. + +11. Notices. The respective addresses for each party for all purposes hereunder are set forth on page 1 hereof, unless and until notice of a different address is received by the party being notified of a change of address. All notices will be in writing and will either be served by personal delivery (to an officer of each company), by mail or by telegraph, in each case with all charges prepaid. Notices will be deemed effective when personally delivered, mailed certified mail or similar delivery requiring a signature upon delivery, all charges prepaid, except for notice of change of address, which will be effective only when received by the party notified. A copy of each notice to Integrity will be simultaneously sent to Business & Legal Affairs, Integrity Incorporated, 1000 Cody Road, Mobile, AL 36695, and a copy of each notice to TL will be simultaneously sent to Law and Business Affairs, Time Life Music, 2000 Duke Street, Alexandria, VA 22314. The failure to send courtesy copies of notices will not be deemed a breach of this Agreement nor will it diminish the effectiveness of such notice. + +12. Assignment. Either party may, at its election, assign this Agreement or any of its rights or delegate any of its obligations hereunder, in whole or in part, to any person, firm or corporation owning or acquiring all or a substantial portion of its assets, to any person, firm or corporation that is related to it as an affiliate, + + 7 + +10 + + subsidiary or otherwise, or to any person, firm or corporation into which or with it might merge or consolidate. In the event of such an + +Source: INTEGRITY MEDIA INC, 10-K405, 3/29/2001 + + + + + + assignment by either party of its rights to an unrelated third party, the other party shall be given written notice, then in such event the other party may upon six-months (6-months) written notice terminate this Agreement. + +13. Miscellaneous + + a. This Agreement contains the entire understanding of the parties hereto relating to the subject matter hereof and cannot be changed or terminated except by an instrument signed by the party to be bound. A waiver by either party of any term or condition of this Agreement in any instance will not be deemed or construed as a waiver of such term or condition for the future, or of any subsequent breach thereof. All remedies, rights, undertakings, obligations, and agreements contained in this Agreement will be cumulative and none of them will be in limitation of any other remedy, right, undertaking, obligation or agreement of either party. The headings of the paragraphs hereof are for convenience only and will not be deemed to limit or in any way affect the scope, meaning or intent of this Agreement or any portion thereof. + + b. This Agreement has been entered into in the State of Tennessee, and the validity, interpretation and legal effect of this Agreement will be governed by the laws of the State of Tennessee applicable to contracts entered into and performed entirely within the State of Tennessee. The venue for any controversy or claim arising out of or relating to this Agreement or breach thereof, shall be the appropriate state and federal courts located in Nashville, Tennessee. Accordingly, each party hereto consents and submits to the jurisdiction of such courts. The prevailing party in any such dispute arising hereunder will be entitled to recover from the other party its reasonable attorneys' fees in connection therewith in addition to the costs thereof. + + c. If any part of this Agreement will be determined to be invalid or unenforceable by a court of competent jurisdiction or by any other legally constituted body having jurisdiction to make such determination, the remainder of this Agreement will remain in full force and effect. + + d. EACH PARTY HAS BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL OR HAS HAD THE UNRESTRICTED OPPORTUNITY TO BE REPRESENTED BY INDEPENDENT LEGAL COUNSEL OF ITS CHOICE FOR PURPOSES OF ADVISING IT IN CONNECTION WITH THE NEGOTIATION AND EXECUTION OF THIS AGREEMENT. IF EITHER PARTY HAS NOT BEEN + + 8 + +11 + + REPRESENTED BY INDEPENDENT LEGAL COUNSEL OF ITS CHOICE IN CONNECTION WITH THIS AGREEMENT, SUCH PARTY ACKNOWLEDGES AND AGREES THAT ITS FAILURE TO BE REPRESENTED BY INDEPENDENT LEGAL COUNSEL IN CONNECTION WITH THIS AGREEMENT WAS DETERMINED SOLELY BY IT. + + IN WITNESS WHEREOF, the parties have signed below. + +INTEGRITY INCORPORATED TIME LIFE, INC. Tax ID#63-0952549 Tax ID# ----------------------------- + +By: /s/ Jerry W. Weimer By: /s/ Mark Stevens ----------------------------------- -------------------------------- Jerry W. Weimer, Ex. Vice President Mark Stevens, President Chief Operating Officer + +By: /s/ Don Mayes ----------------------------------- Don Mayes, Director Business and Legal Affairs + + 9 + +Source: INTEGRITY MEDIA INC, 10-K405, 3/29/2001 \ No newline at end of file diff --git a/full_contract_txt/InvendaCorp_20000828_S-1A_EX-10.2_2588206_EX-10.2_Co-Branding Agreement.txt b/full_contract_txt/InvendaCorp_20000828_S-1A_EX-10.2_2588206_EX-10.2_Co-Branding Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..12431137b0ee35d0ceb2e1717afe7eba7cdff10f --- /dev/null +++ b/full_contract_txt/InvendaCorp_20000828_S-1A_EX-10.2_2588206_EX-10.2_Co-Branding Agreement.txt @@ -0,0 +1,1053 @@ +1 *****Confidential Treatment has been requested for portions of this agreement. The copy file herewith omits information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this agreement has been filed separately with the Securities and Exchange Commission. + + Exhibit 10.2 + + E-CENTIVES - EXCITE@HOME CO-BRANDING AGREEMENT + +This agreement ("Agreement") is entered into as of the 16th day of February, 2000 ("Effective Date"), by and between the At Home Corporation ("Excite@Home" or "Excite"), located at 450 Broadway, Redwood City, California 94063, and e-centives, Inc., ("Application Provider" or "e-centives"), a Delaware corporation, located at 6903 Rockledge Drive, Suite 1200, Bethesda, MD 20817. + + RECITALS + +A. Excite@Home provides the @Home Service, maintains sites on the Internet, including http://www.excite.com, and owns and/or manages or labels related Web sites worldwide (collectively, the "Excite Network") which, among other things, allow its users to search for and access content and other sites on the Internet. + +B. Excite@Home also maintains and/or manages certain Web pages which may be delivered to users worldwide via email, desktop "channels" or Internet "push" technologies (collectively, "Broadcast Pages") and which may incorporate content supplied to Excite@Home by third parties for the purpose of providing value to Excite@Home users and providing access to the content, products and/or services of such third parties. + +C. Application Provider owns or has the right to distribute certain content consisting principally of coupons and offers for products and services, and maintains a related site on the Internet at http://www.ecentives.com (the "Application Provider Site"). + +D. Excite@Home and Application Provider wish to distribute Application Provider's content through the Excite Network and/or Broadcast Pages, establish and maintain related co-branded pages on the Application Provider Site, establish links between the Excite Network and the co-branded pages on the Application Provider Site, and promote the Application Provider on the Excite Network. + +Therefore, the parties agree as follows: + +1. DEFINITIONS + + a) "Co-Branded Application" shall mean an Internet application designed, hosted, and managed by Application Provider whose purpose is to allow for the customer-specific selection, provision, and dissemination of offers (both targeted and untargeted, as hereinafter defined in EXHIBIT A) and coupons for products and services offered by Application Provider's merchant partners. + + b) "Excite Content" shall mean all content, information and functionality provided by Excite to e-centives, including but not limited to, links to + + 1 + +2 *****Confidential Treatment has been requested for portions of this agreement. The copy file herewith omits information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this agreement has been filed separately with the Securities and Exchange Commission. + + Community Products, Excite controlled advertising and Excite sourced offers, as further defined herein. + + c) "e-centives Content" shall mean all content, information and functionality provided by e-centives through the Co-Branded Application, including but not limited to, e-centives controlled advertising and e-centives sourced offers, as further defined herein. + + d) "User(s)" shall mean an end-user customer of the Excite@Home Network of web-sites and services. + + e) "Excite@Home Member(s)" shall mean a User who has registered as a member of the Excite@Home Network, regardless of that User's stated preference regarding allowing their registration information to be shared with third parties. + + f) "Program Member(s)" shall mean an Excite@Home Member who has: + +Source: INVENDA CORP, S-1/A, 8/28/2000 + + + + + + i) Been provided access to the Co-Branded Application, and + + ii) Has opted-in to allow all his or her registration information to be shared with Application Provider and/or unspecified third parties. + + iii) Each Program Member shall be further classified into one of two mutually exclusive categories, General Program Member or Qualified Program Member, as defined below: + + (1) "General Program Member(s)" shall mean a Program Member who has not provided "Shopping Category Data" about him or herself, as defined below, and whose URS Data has been provided to e-centives no later than 5 days after the original date the User became an Excite@Home Member. + + (2) "Qualified Program Member(s)" shall mean a Program Member who has provided "Shopping Category Data" about him or herself, as defined below. + + g) "User Data" shall mean all information regarding an individual Program Member, as further broken into these distinct categories: + + i) "URS User Data" shall mean those data elements that are captured in the Excite@Home primary registration system via the Excite@Home Member registration form that is most commonly provided to new Excite@Home Members. URS User Data shall at a minimum include user-supplied ZIP Code, gender, date of birth, deliverable email address, and original Excite@Home registration date. + + 2 3 *****Confidential Treatment has been requested for portions of this agreement. The copy file herewith omits information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this agreement has been filed separately with the Securities and Exchange Commission. + + ii) "Superset Data" shall mean those data elements, independent of any specific purchase transaction, which are requested from all Qualified Program Members, irrespective of whether or not this information shall be collected in the Co-Branded Application. Solely for purposes of illustration, such data might or might not include categorical data elements such as Marital Status, Income, and Presence of Children in the Household. + + iii) "Shopping Category Data" shall mean the list of specific shopping categories that a Qualified Program Member has indicated interest in. Shopping Category Data shall be binary in nature (e.g. Yes/No selections) and shall be mutually agreed upon. Solely for purposes of illustration, such data might or might not include categories such as Automobiles, Electronics, or Clothing. + + iv) "Transactional Data" shall mean data elements descriptive of a specific purchase or purchase intent event which is enabled by the Co-Branded Application, such as purchase amount, payment method, items purchased, items selected but ultimately not purchased, etc. + + h) "Payment-Eligible User Data" shall mean URS User Data from both General Program Members and Qualified Program Members, and Shopping Category Data and, where available, Superset Data, from Qualified Program Members: + + i) Whose Excite@Home registration data is sent to e-centives for account creation, + + ii) Who do not have an existing account with e-centives (as determined by email address) as of the Effective Date, and + + iii) Who, in the case of Qualified Program Members, have provided shopping interest category, which data the Co-Branded Application shall use to allow or restrict access to Targeted Offers, and Co-Branded Application email opt-in selection during either (a) Excite@Home Member registration or Excite@Home login or (b) offer detail presentment by e-centives, or (c) other registration process by e-centives. + +2. CO-BRANDED APPLICATION + + a) Application Provider will, at its sole expense, develop, host and maintain the Co-Branded Application for Excite@Home. The primary function of the Co-Branded Application will be to present Users with coupons or other offers (both targeted and untargeted, as hereinafter defined in EXHIBIT A) for products and services provided by + +Source: INVENDA CORP, S-1/A, 8/28/2000 + + + + + + Application Provider's merchant partners with the intent of converting said Users into Program + + 3 4 *****Confidential Treatment has been requested for portions of this agreement. The copy file herewith omits information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this agreement has been filed separately with the Securities and Exchange Commission. + + Members. The Co-Branded Application will include offers and other content and functionality (Excite Content and e-centives Content, collectively "Application Content") as further described in EXHIBIT B. + + b) Application Provider will design and create web pages containing the Application Content ("Application Pages"). The Application Pages will be presented in accordance with guidelines that Excite@Home will provide Application Provider, which include, but are not limited to, page performance standards and header and other design/user interface standards. The Application Pages will prominently feature Excite@Home branding and will be presented in a "look and feel" consistent with the "look and feel" of the Excite Network. Excite@Home will have final approval over all Application Pages. The Application Pages shall be developed in accordance, in all material respects, with the requirements established by EXHIBIT B. + + c) Application Provider will develop its category/directory structures to be similar to those found on the Excite@Home Network and in accordance with the requirements established by EXHIBIT B, SECTION 4. + + d) Application Provider will host the Co-Branded Application on its Internet servers, but will serve the Co-Branded Application from an "excite.com" masked domain name (or such other domain as Excite@Home may elect at its sole option) so that Excite@Home can receive the reach and page view credit. Application Provider will have sole responsibility for providing and maintaining, at its expense, the Application Provider Site, the Co-Branded Application, the Application Content (excluding the provision of Excite Content), and any updates thereto. + + e) Each Co-Branded Page will include one or more links to the Excite Network, as set forth in Section 3(d) [INTEGRATION WITH EXCITE@HOME SERVICES]. Excite@Home will supply Application Provider with the URLs for these links. + + f) Other than updates to the Application Content and to advertising displayed on the Application Pages, Application Provider will not change the Co-Branded Application without Excite@Home's prior consent, which consent will not be unreasonably withheld. Excite@Home will respond to change requests within seven (7) days of receipt, and any failure to so respond shall be deemed an approval. + + g) Excite@Home may, upon fifteen (15) days prior notice to Application Provider, request reasonable revisions to the Co-Branded Application as needed to reflect changes that will not adversely affect Application Provider, such as changes to Excite@Home's name and/or brand or changes to the URLs for the links to the Excite Network. Application Provider will use reasonable efforts to accommodate Excite@Home's requested changes within the fifteen (15) day period. + +5 *****Confidential Treatment has been requested for portions of this agreement. The copy file herewith omits information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this agreement has been filed separately with the Securities and Exchange Commission. + + h) Excite@Home will have editorial control over all email or other similar communication with Excite@Home Members. Correspondence solely regarding the Co-Branded Application will only be presented to Program Members; communication with all other Excite@Home Members will be tied to regular Excite@Home email schedules, which may or may not be integrated with other email content at Excite@Home's sole option. Correspondence specific to the Co-Branded Application may be mailed on a schedule independent of other Excite@Home member mailings for those Qualified Program Members that specify a frequency of contact. Until an individual General Program Member specifies a frequency of email contact, he or she will by default receive email pursuant to the Co-branded Application's every-other-week email option setting. Any mailings to such General Program Members who have not specified a frequency of email contact will be mailed on a schedule that coordinates contact with other Excite@Home newsletter and promotional contacts, but at least with the frequency of every-other-week. Communications with Excite@Home Members shall further be subject to the requirements of EXHIBIT D. + +3. INTEGRATION WITH EXCITE@HOME SERVICES + +Source: INVENDA CORP, S-1/A, 8/28/2000 + + + + + + a) Application Provider will integrate the Co-Branded Application with Excite@Home's Universal Registration System ("URS") according to Excite@Home's technical and operational specifications. Each party will incur their own costs related to the integration. + + b) Information collected through the Co-Branded Application will include, but not be limited to, + + i) URS User Data, whose categories may be modified from time to time at Excite@Home's sole option; + + ii) Superset Data, whose categories shall be determined by mutual agreement but subject to Excite@Home's final approval; + + iii) Shopping Category Data, whose contents shall be determined by mutual agreement but subject to Excite@Home's final approval. + + c) All Information collected under this Agreement will be transmitted between the parties in a manner to be mutually agreed upon. + + d) The Co-Branded Application will include content with links that direct Users to other Excite@Home content, including but not limited to community products, which include message boards, chat, clubs, home pages, instant messaging, calendar, address book, email, photos and any other community products which Excite@Home may develop during the term of this Agreement ("Community Products"). The number of links to other Excite@Home content shall be consistent with the general quantity of links implemented on comparable portions of the Excite Network. 6 *****Confidential Treatment has been requested for portions of this agreement. The copy file herewith omits information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this agreement has been filed separately with the Securities and Exchange Commission. + + Application Provider will not feature non-Excite@Home Community Products on the Co-Branded Application without the written permission of Excite@Home. + + e) Application Provider will publish to Excite@Home subsets of its content in a mutually-agreed XML or pre-defined text format (e.g. URL's captions, brief two-sentence descriptions, news headlines, pointers into longer descriptions, and abstracts) in order for Excite@Home to integrate, at its option, portions of the content into its search results, directory results and other areas of Excite@Home in order to drive traffic to the Co-Branded Application, as deemed appropriate by Excite@Home in its sole discretion. Neither party will export to the other party any licensed third-party data for which the providing party does not have redistribution rights. + + f) Application Provider will provide and regularly update database mappings necessary to maximize search and directory integration for the Co-Branded Application into Excite@Home's services. + + g) Application Provider will provide Excite@Home with a regularly updated data feed of product information for integration into Excite@Home's commerce services. The data feed will be provided according to Excite@Home's then-applicable standard product data import specifications, which specifications shall be substantially similar to those required by similar service providers in the industry. + + h) Excite@Home will provide Application Provider with a regularly updated data feed of product information for integration into the Co-Branded Application. The data feed will be provided according to Excite@Home's standard product data export specifications, which specifications shall be substantially similar to those required by similar service providers in the industry. + + i) Excite@Home shall not offer any Excite-branded or Excite-co-branded service during the Term of this Agreement that is substantially similar in functionally to the Co-Branded Application. + +4. ADVERTISING ON THE CO-BRANDED APPLICATION + + a) Excite@Home will have the right to sell and serve Excite banner, sponsorship, and text link advertising on the Co-Branded Application, as limited by the terms of this Section. Excite@Home will have the right to sell and serve such advertising on all pages within the Co-Branded Application. Revenues from such advertising shall accrue wholly to Excite@Home. Application Provider will enable the ad-serving and accommodate Excite@Home's technical requirements, which shall be + + 6 7 *****Confidential Treatment has been requested for portions of this agreement. + +Source: INVENDA CORP, S-1/A, 8/28/2000 + + + + + +The copy file herewith omits information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this agreement has been filed separately with the Securities and Exchange Commission. + + consistent with those of Excite's other partners and the standards generally used in the industry, at its own expense. + +b) Banner advertising shall be limited to one standard-size banner below the Co-Branded Application's content area, as described in Section 2. + +c) Sponsorship modules will be present on the Co-Branded Application in a quantity consistent with the overall quantity within other shopping content areas of Excite. Each party shall have the right to sell and serve advertisements on 50% of the sponsorship tiles within the Co-Branded Application. As of the Effective Date of this Agreement, pages within Excite@Home's shopping service contain four sponsorship tiles arranged vertically on the right hand side of each page, though over time this may change at Excite@Home's sole option, but such changes shall not conflict with Application Provider's contractual obligations. Within this framework, Application Provider will have access to the first and third tiles from the top; Excite@Home will have access to the second and fourth tiles. Should additional tiles be added during the term of this Agreement, the first incremental tile shall be allocated to Application Provider, the following to Excite@Home, and so forth. Revenue generated by the parties from such activities shall not be shared but rather shall be retained by the respective party to whom the Sponsorship tile(s) are allocated. + +d) Excite@Home will not serve advertising on the Co-Branded Application for any "Application Provider Named Competitor," as specified in EXHIBIT E. Application Provider may designate no more than 10 companies as Named Competitors. Not more than once per quarter, Application Provider may update the list of Application Provider Named Competitors, but may not add to the list any company with which Excite@Home has a material existing relationship as of the Effective Date of this Agreement. Within three business days of receiving Application Provider's written update, Excite@Home will remove any advertising from Application Provider's listed competitors displayed on the Co-Branded Pages. + +e) Application Provider will not serve advertising on the Co-Branded Application for any "Excite@Home Named Competitor," as specified in EXHIBIT E. Excite@Home may designate no more than 10 companies as Named Competitors. Not more than once per quarter, Excite@Home may update the list of Excite@Home Named Competitors, but may not add to the list any company with which e-centives has a material existing relationship as of the Effective Date of this Agreement. Within three business days of receiving Excite@Home's written update, Application Provider will remove any advertising from Excite@Home's listed competitors displayed on the Co-Branded Pages. + + 7 8 *****Confidential Treatment has been requested for portions of this agreement. The copy file herewith omits information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this agreement has been filed separately with the Securities and Exchange Commission. + + f) Application Provider will not serve advertising on the Co-Branded Application that (i) violates any law, rule, or regulation, (ii) relates to pornography, gaming, tobacco, or alcohol, (iii) is the subject of a claim to trademark, trade name, service mark, or other proprietary rights, or Excite@Home may request removal of any such advertising from the Co-Branded Application, and Application Provider shall remove any such advertising within twenty-four (24) hours of receipt of any such written request. + +5. PROMOTION OF THE CO-BRANDED APPLICATION + + a) Excite@Home will provide promotion for the Co-Branded Application as described in EXHIBIT F. Excite@Home may provide additional links to, or other promotion for, the Co-Branded Application from elsewhere on or off the Excite Network at its sole discretion. + +6. USER DATA OWNERSHIP + + a) Ownership + + i) The operation of the Co-Branded Application will permit the collection of Payment-Eligible User Data. + + ii) Payment-Eligible URS User Data, Superset Data, and Shopping Category Data collected through the operation of the Co-Branded Application will be jointly owned by the parties. The parties' respective ownership shall be subject to the restrictions set forth in this Agreement. + +Source: INVENDA CORP, S-1/A, 8/28/2000 + + + + + + iii) Transactional Data, when available, shall be jointly owned by the parties, except in those cases where Application Provider's contractual agreement(s) with its merchant partner(s) prevent the sharing of said Transactional Data with third parties. In all cases Application Provider shall use commercially reasonable efforts to ensure that Transactional Data may be shared with and co-owned by Excite@Home. The parties' respective ownership rights shall be subject to the restrictions set forth in this Agreement. + + b) Restrictions + + i) During the Term of this Agreement, Application Provider shall own Payment-Eligible User Data solely for the purpose of providing the services of the Co-Branded Application. Application Provider may not use Payment-Eligible User Data to solicit User traffic to www.e-centives.com or any other co-branded version of www.e-centives.com with the intent of driving such Users away from using the Co-Branded Application. Notwithstanding the foregoing, solely for the period from the Effective Date of this + + 8 9 *****Confidential Treatment has been requested for portions of this agreement. The copy file herewith omits information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this agreement has been filed separately with the Securities and Exchange Commission. + + Agreement to the Launch Date for the Co-Branded Application, as hereinafter defined, Application Provider may use Payment Eligible User Data to solicit User traffic to the co-branded area currently in place at http://coupons.excite.com pursuant to the Sponsorship Agreement effective March 5, 1999 in force between the parties. + + ii) Application Provider may not sell, disclose, transfer, rent, or license Payment-Eligible User Data in a form identifiable to any particular user to any third party. Notwithstanding the foregoing, Application Provider may disclose User Data if it is aggregated in a non-associatable way with data from multiple online properties or in an anonymous format on a per user basis. + + iii) In no event may either party sell, disclose, transfer, rent, or license Payment-Eligible User Data to the other party's Named Competitors as listed in EXHIBIT E. Furthermore, Excite@Home may not sell, disclose, transfer, rent, or license Shopping Category Data or Superset Data to Data Restricted Named Companies as specified in EXHIBIT I. Not more than once per quarter, Application Provider may update the list of Application Provider Data Restricted Named Companies shown in EXHIBIT I, so long as such list shall not exceed twenty-five (25) companies. + + iv) Excite@Home may not sell, disclose, transfer, rent or license any Transactional Data regardless of Program Member preferences. + + v) The collection, storage, and usage of all classes of Payment-Eligible User Data shall comply with Excite@Home's then-current security and privacy guidelines. + + vi) Application Provider will not solicit any Excite@Home Member on behalf of any Excite@Home Named Competitor during the Term of this Agreement or thereafter. The list of Excite@Home Named Competitors is defined in EXHIBIT E. + +c) Effect of Termination or Expiration + + i) In the event that the Agreement is terminated pursuant to Section 16.a.v due to e-centives' acquisition by an Excite@Home Named Competitor, or by an entity controlling or controlled by an Excite@Home Named Competitor, e-centives shall transfer all of its right, title and interest in and to the Payment-Eligible User Data to Excite. Notwithstanding the foregoing, Payment-Eligible User Data that relates to users who have opted out in accordance with Section 5(a) of EXHIBIT D shall continue to be jointly owned by the parties. + + 9 10 *****Confidential Treatment has been requested for portions of this agreement. The copy file herewith omits information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this agreement has been filed separately with the Securities and Exchange Commission. + + ii) In the event that the Agreement expires or is terminated for any + +Source: INVENDA CORP, S-1/A, 8/28/2000 + + + + + + reason other than termination pursuant to Section 16.a.v, the parties shall continue to jointly own Payment-Eligible User Data in accordance with Section 6.a. The restrictions of Section 6.b shall continue to apply, with the exception of subsections 6.b.i and 6.b.v. + +7. PAYMENTS AND DELIVERY OF USER DATA + + a) Payments and delivery for General Program Member User Data records: + + i) Excite@Home will supply to Application Provider a minimum of ***** Payment-Eligible User Data records for General Program Members containing all available information set forth in Section 1(h) [DEFINITIONS] in each quarter during the Term of this Agreement, beginning with the quarter in which the Launch Date (as hereinafter defined) falls, for a minimum of ***** of these General Program Member User Data records during the Term of this Agreement. + + ii) Excite@Home shall provide in excess of ***** such General Program Member User Data records, to the extent such records are available. + + iii) The General Program Member User Data records supplied by Excite@Home to Application Provider shall consist solely of URS User Data. + + iv) e-centives will pay for these General Program Member User Data records to Excite@Home at a rate of $***** per unique User Data record. This rate will apply only to the first ***** records. e-centives will pay Excite@Home $***** in payments for these General Program Member User Data records over the Term of this Agreement, in accordance with the schedule set out in Section 7.d. In the event that more than ***** such General Program Member User Data records are supplied, payments for such additional records shall be governed by Section 7.e. + + v) The failure of Excite@Home to deliver at least ***** of these General Program Member User Data records shall not be deemed a breach of this Agreement. To the extent that Excite@Home fails to deliver at least ***** General Program Member User Data records, however, e-centives' total payment obligations under Section 7.a.iv shall be correspondingly reduced at the rate of $***** per record for any shortfall. In no event will any failure to deliver at least ***** General Program Member User Data records constitute cause to extend the Term of this Agreement. + + 10 11 *****Confidential Treatment has been requested for portions of this agreement. The copy file herewith omits information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this agreement has been filed separately with the Securities and Exchange Commission. + +b) Payments and delivery for Qualified Program Member User Data records: + + i) Excite@Home will supply to e-centives a minimum of ***** Payment-Eligible User Data records for Qualified Program Members containing all available information set forth in Section 1(h) [DEFINITIONS] in each quarter during the Term of this Agreement, beginning with the quarter in which the Launch Date (as hereinafter defined) falls, for a minimum of ***** of these Qualified Program Member User Data records during the Term of this Agreement. + + ii) Excite@Home shall provide in excess of ***** such Qualified Program Member User Data records, to the extent such records are available. + + iii) The Qualified Program Member User Data records supplied by Excite@Home to e-centives shall consist of URS User Data and Shopping Category Data and, if available, Superset Data. + + iv) e-centives will pay for these Qualified Program Member User Data records to Excite@Home at a rate of $***** per unique User Data record. This rate will apply only to the first ***** records. e-centives will pay Excite@Home $***** in payments for these Qualified Program Member User Data records over the Term of this Agreement, in accordance with the schedule set out in Section 7.d. In the event that more than ***** Qualified Program Member User Data records are supplied, payments for such additional records shall be governed by Section 7.e. + + v) The failure of Excite@Home to deliver at least ***** such Qualified Program Member User Data records shall not be deemed a breach of this Agreement. To the extent that Excite@Home fails to + +Source: INVENDA CORP, S-1/A, 8/28/2000 + + + + + + deliver at least ***** Qualified Program Member User Data records, however, e-centives' total payment obligations under Section 7.b.iv shall be correspondingly reduced at the rate of $***** per record for any shortfall. In no event will any failure to deliver at least ***** Qualified Program Member User Data records constitute cause to extend the Term of this Agreement. + +c) Conversion of General Program Members to Qualified Program Members + + i) It is anticipated that a substantial number of Program Members who started as General Program Members will subsequently become Qualified Program Members. Both parties stipulate that it is in their interests for this to occur. + + ii) If Excite@Home supplies e-centives with a Qualified Program Member User Data record for a Program Member for whom it has + + 11 + +12 *****Confidential Treatment has been requested for portions of this agreement. The copy file herewith omits information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this agreement has been filed separately with the Securities and Exchange Commission. + + previously submitted a General Program Member User Data record, the record shall be accounted for as follows: + + (1) If the Qualified Program Member User Data record is supplied in the same quarter in which the General Program Member User Data record was originally supplied to e-centives, the Program Member record shall be treated as always having been a Qualified Program Member record for purposes of both volume and payments. + + (2) If the Qualified Program Member User Data record is supplied in a quarter different from the one in which the General Program Member User Data record was originally supplied to e-centives, the Program Member record shall be treated as a Qualified Program Member record for purposes of both volume and payments, but a credit shall be applied against the General Program Member volume and payment guarantees. + + (3) Payments shall be based upon the total number of records delivered for each Program Member category. For payment purposes, Excite@Home shall be obligated to track only total records per category and shall not be obligated to track individual records. + +d) Payment Schedule + + i) Within ten (10) days of the Effective Date of this Agreement, e-centives shall make a non-refundable payment to Excite@Home of $***** as pre-payment for Payment-Eligible User Data records: + + (1) e-centives will pay Excite@Home $***** in pre-payments for ***** General Program Member User Data records. + + (2) e-centives will pay Excite@Home $***** in pre-payments for ***** Qualified Program Member User Data records. + + ii) During the Term of this Agreement, on the first day of each quarter following the quarter in which the Launch Date falls, e-centives shall make additional non-refundable payments for the Payment-Eligible User Data records. In the event that the Launch Date is delayed beyond March 31, 2000, the April 1, 2000, payment pursuant to this subsection shall be postponed and shall instead be made within (10) days of the Launch Date. Payments under this subsection shall be calculated as follows: + + 12 + +13 *****Confidential Treatment has been requested for portions of this agreement. The copy file herewith omits information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this agreement has been filed separately with the Securities and Exchange Commission. + + (1) General Program Member User Data: $*****, plus $***** times the total number of records previously delivered, less all amounts previously paid on account of General Program Member User Data. + + (2) Qualified Program Member User Data: $*****, plus $***** + +Source: INVENDA CORP, S-1/A, 8/28/2000 + + + + + + times the total number of records previously delivered, less all amounts previously paid on account of General Program Member User Data. + + iii) The amounts paid pursuant to subsection 7.d.ii shall be further subject to the following cap: at no point shall e-centives' total payments exceed an average of $***** per quarter. In the event that the payment amount dictated by the formulas in subsections 7.d.ii.(1) and (2) would raise e-centives' total payments to an average in excess of $***** per quarter, e-centives shall instead pay only that amount necessary to maintain an average quarterly payment of $*****. + + iv) A sample hypothetical payment schedule showing the effect of this provision is included solely for purposes of illustration in EXHIBIT G. + + e) In the event that Excite@Home delivers more than ***** Payment-Eligible General Program Member User Data records and/or more than ***** Payment-Eligible Qualified Program Member User Data records during the Term of the Agreement, e-centives will pay Excite@Home, on a quarterly basis, *****% of net revenue (gross revenue less direct third party commissions) generated from the delivery of offers to any such excess Program Members. This provision shall apply to net revenue generated during the year following the end of the calendar quarter in which the names were supplied, irrespective of the Term of this Agreement. + +8. USER DATA DELIVERY PERFORMANCE MEETINGS + + The parties will meet on a quarterly basis to review Program Member User Data record delivery goals and performance and adjust marketing plans and member signup goals as mutually agreed. + +9. EXCITE@HOME PURCHASES FROM E-CENTIVES + + a) Excite@Home will purchase in bulk a minimum of $3.75 million in e-centive packages from e-centives at the rate of $***** per e-centive delivered for the purpose of resale to Excite@Home's advertisers and partners. Within 5 days of Launch Date Excite@Home will pay e-centives a non-refundable minimum of $***** and will continue to pay a minimum of $***** each quarter, payable at the beginning of the quarter, during the Term of this Agreement for such packages. Unless + + 13 + +14 *****Confidential Treatment has been requested for portions of this agreement. The copy file herewith omits information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this agreement has been filed separately with the Securities and Exchange Commission. + + sold by Excite within 6 months of purchase, such purchased e-centives packages shall expire and no longer be available for resale by Excite@Home. Any purchases beyond the minimum shall be at Excite@Home's sole discretion. Such e-centive packages shall be governed by e-centives' standard terms and conditions. To the extent that Excite@Home elects in its sole discretion to purchase in excess of $***** in e-centive packages during any quarter, any such excess purchases shall constitute a credit which Excite@Home may apply against its minimum purchase obligations in any subsequent quarter(s). + + b) Excite@Home will determine, at its sole discretion, the size and nature of each e-centive package bought under these terms. Excite@Home shall not be limited to a standard package size. + + c) Excite@Home will pay e-centives *****% of net revenue (gross revenue less $***** purchase price and cost of sales not to exceed *****% of gross revenues) generated from sales of the e-centives packages. + + d) e-centives may not extend exclusive offers developed for Excite@Home by its advertisers to non-Excite@Home users of the e-centives service for a period of 30 days following the day on which the offer is first made available through Excite@Home. + +10. USAGE REPORTS + + a) Application Provider will provide usage reports to Excite@Home on a weekly basis in a mutually agreed upon format. At a minimum, usage reports will include: + + i) Transactional Data on all Excite@Home Members who transact through the Co-Branded Application (where available and as limited by Section 6.a.iii); + +Source: INVENDA CORP, S-1/A, 8/28/2000 + + + + + + ii) Individual Program Member data, including such information as user preferences, usage, and response rates; + + iii) Daily page views by category; and + + iv) Aggregate information on response rates. + + b) The usage reports will be co-owned by the parties. + +11. TRADEMARK OWNERSHIP AND LICENSE + + a) Application Provider will retain all right, title and interest in and to its trademarks, service marks and trade names worldwide, subject to the limited license granted to Excite@Home in Section 11(c) [TRADEMARK OWNERSHIP AND LICENSE] below. + + 14 15 *****Confidential Treatment has been requested for portions of this agreement. The copy file herewith omits information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this agreement has been filed separately with the Securities and Exchange Commission. + + b) Excite@Home will retain all right, title and interest in and to its trademarks, service marks and trade names worldwide, subject to the limited license granted to Application Provider in Section 11(c) [TRADEMARK OWNERSHIP AND LICENSE] below. + + c) Each party hereby grants to the other a non-exclusive, limited license to use its trademarks, service marks or trade names only as specifically described in this Agreement. All such use shall be in accordance with each party's reasonable policies regarding advertising and trademark usage as established from time to time. + + d) Upon the expiration or termination of this Agreement, each party will cease using the trademarks, service marks and/or trade names of the other except: + + i) As the parties may agree in writing; or + + ii) To the extent permitted by applicable law. + +12 CONTENT OWNERSHIP AND LICENSE + + a) Application Provider will retain all right, title and interest in and to the e-centives Content worldwide (including, but not limited to, ownership of all copyrights and other intellectual property rights therein). Subject to the terms and conditions of this Agreement, Application Provider hereby grants to Excite@Home a royalty-free, non-exclusive, worldwide license to use, reproduce, distribute, transmit and publicly display the e-centives Content in accordance with this Agreement and to sub-license the Application Content to Excite@Home's wholly-owned subsidiaries or to joint ventures in which Excite@Home participates for the sole purpose of using, reproducing, distributing, transmitting and publicly displaying the e-centives Content in accordance with this Agreement, provided that no such sublicensing shall be to Application Provider Named Competitors. + + b) Excite@Home will retain all right, title, and interest in and to the Excite Network worldwide (including, but not limited to, ownership of all copyrights, look and feel and other intellectual property rights therein). + +13. MAINTENANCE, CUSTOMER SUPPORT AND PERFORMANCE OBLIGATIONS + + a) Application Provider shall be responsible for providing all maintenance and technical support for all Co-Branded Application users as set forth in EXHIBIT H. + + b) Application Provider shall be responsible for meeting the performance and uptime guarantees for the Co-Branded Application as set forth in EXHIBIT H. + + 15 16 *****Confidential Treatment has been requested for portions of this agreement. The copy file herewith omits information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this agreement has + +Source: INVENDA CORP, S-1/A, 8/28/2000 + + + + + +been filed separately with the Securities and Exchange Commission. + +14. PUBLICITY + + It is the intention of both parties to publicly disclose the nature (but not the terms) of the relationship following the completion of the Agreement and other related documents. It is the intention of both parties to support public releases, whereby an authorized senior executive of both companies is quoted within the release. Both parties will provide reasonable and timely support of such releases. Neither party shall make any publication or issue any press release concerning this document or the arrangements contemplated without the other party's written approval prior to release. Notwithstanding the foregoing, Excite@Home agrees to allow reference to its name and disclosure of the terms of the relationship between the parties to potential investors and relevant regulatory authorities for purposes of funding activities by e-centives, which may include an initial public offering. + +15. TERM + + The term of this Agreement will begin on the Effective Date and will end three (3) years from the date the Co-Branded Application becomes accessible to Excite@Home Members ("Launch Date"). + +16. TERMINATION + + a) Basis for Termination: + + i) Either party may terminate if the other party breaches the Agreement and the breach remains uncured for thirty (30) days following receipt of written notice of intention to terminate from the other party. + + ii) Excite@Home may terminate the Agreement with thirty (30) days written notice if Application Provider does not meet the content and launch guidelines described in EXHIBIT B. + + iii) Excite@Home may terminate the Agreement if the Co-Branded Application is not at least comparable to any other source of Application Content on the Internet in accordance with the following provisions: + + (1) At any time during the Term of this Agreement, Excite@Home may determine, in its reasonable judgment, that the Co-Branded Application is not at least comparable to other sources of Application Content generally available on the Internet in terms of the following factors: + + (i) Breadth and depth of content; + + (ii) Tools and functionality; + + 16 17 *****Confidential Treatment has been requested for portions of this agreement. The copy file herewith omits information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this agreement has been filed separately with the Securities and Exchange Commission. + + (iii) Personalization; and + + (iv) User interface and ease of use. + + (2) If Excite@Home determines that the Co-Branded Application is not at least comparable to other sources of Application Content generally available on the Internet in terms of at least two of the four factors in Section 16.a.iii.1, Excite@Home may notify Application Provider in writing of said deficiency, which shall initiate a 28-day "Cure Period." If at the end of the Cure Period Excite@Home, in its reasonable judgment, determines that the deficiency still exists, then Excite@Home may terminate the Agreement without further delay. + +iv) Either party may terminate the Agreement without penalty upon thirty (30) days' written notice if regulations or applicable laws applied at the US federal level regarding privacy or User Data purchase and/or usage impede or prohibit said party from performing its services as contemplated by this Agreement or thereafter. + +v) In the event that a majority of Application Provider's assets are merged, acquired or sold to an Excite@Home Named Competitor, or to an entity controlling or controlled by an Excite@Home Named Competitor, then Excite@Home may terminate this Agreement by providing thirty (30) days written notice. This option to terminate this Agreement may only be exercised by providing written notice within ninety (90) days of Excite@Home's receiving notice of such transaction. Application Provider + +Source: INVENDA CORP, S-1/A, 8/28/2000 + + + + + + shall provide such notice at least twenty-four (24) hours before the public announcement of any such transaction. + +vi) The parties acknowledge that, due to the continually evolving nature of the Internet, substantive changes to the product plan and integration contemplated in the Agreement will likely be necessary during the Term. From time to time, Excite@Home may require that Application Provider provide extensions, incremental services and/or integration of the Co-Branded Application (collectively, "Modifications"). In the event that Application Provider is unable and/or unwilling to deliver such additions, or in the event that the parties disagree on the direction of the Co-Branded Application or its integration, Excite@Home may terminate the Agreement with no penalty by providing ninety (90) days written notice. Notwithstanding the foregoing, Excite shall not be entitled to terminate this Agreement in the event that the requested + + 17 + +18 *****Confidential Treatment has been requested for portions of this agreement. The copy file herewith omits information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this agreement has been filed separately with the Securities and Exchange Commission. + + Modifications exceed or are outside the scope of technology and/or service levels generally available on the Internet. + +b) Effects of Termination + + i) Each Party will promptly return all Confidential Information of the other party. + + ii) Each Party will pay all earned and undisputed outstanding amounts owed to the other Party under this Agreement within thirty (30) days after the effective date of such termination. Notwithstanding the foregoing, all payments for User Data records shall be due and accrue in accordance with terms of this Agreement. + + iii) For a period of up to sixty (60) days, Application Provider will provide consulting services to Excite@Home, as Excite@Home may reasonably request and for reasonable fees to be paid to Application Provider, such fees to be agreed upon in writing by the Parties, to assist Excite@Home in providing a seamless transition to Program Members. Application Provider will have no obligation to provide such services to Excite@Home to the extent that Application Provider's personnel and resources are unavailable in the amounts requested by Excite@Home or if the Parties are unable in good faith to agree on the reasonable fees to be paid to Application Provider for such services. Application Provider will not be required, in the course of providing such consulting services to Excite@Home, to disclose or transfer to Excite@Home any proprietary information, software, or Intellectual Property of Application Provider or any of its merchant partners. + + iv) To further ensure a seamless transition for Program Members, in the event of a termination based upon a material breach by e-centives or an acquisition pursuant to Section 16.a.v. only, Application Provider shall continue to host and maintain the Co-Branded Application for a period of one hundred twenty (120) days following either receipt or issuance of notice of intention to terminate this Agreement. Such hosting and maintenance of the Co-Branded Application shall be provided by Application Provider at such reasonable rates as are mutually agreed upon by the parties. + + v) The provisions of this Section (Termination), Section 17 (Post-Termination Communications), Section 18 (Confidentiality), Section 19 (Warranties and Indemnities), Section 20 (Limitation of Liability), and Section 21 (Dispute Resolution) shall survive any termination or expiration of this Agreement. 19 *****Confidential Treatment has been requested for portions of this agreement. The copy file herewith omits information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this agreement has been filed separately with the Securities and Exchange Commission. + +17. POST-TERMINATION COMMUNICATIONS + + a) Upon termination of this Agreement for reasons other than a relationship with an Excite@Home Named Competitor under Section 16.a.v., the parties will communicate with Program Members as follows: + + i) Excite@Home will email Program Members on e-centives' behalf up to a maximum of two times. Consistent with other communications envisioned during the Term of the Agreement, such mailings will be branded Excite@Home but will alert Program Members that this Agreement is to be terminated, the Co-Branded Application will + +Source: INVENDA CORP, S-1/A, 8/28/2000 + + + + + + continue with e-centives branding, and Program Members will continue as a participant in the e-centives service unless they explicitly opt out. The content and copy of such emails shall be mutually agreed upon. + + ii) The first email will be exclusive to e-centives (i.e., it will not mention similar services from Excite@Home or other third parties) and will alert Program Members of the continuation of the e-centives service directly from e-centives. Program Members shall be further alerted that their membership in the e-centives service shall continue unless they explicitly opt-out. Excite@Home shall not promote competing services in such contact or otherwise discourage Program Members from continuing to use the e-centives service as provided directly by e-centives. + + iii) The second email will not be exclusive to e-centives. It will include the same e-centives alerts as in the first email, but may offer a replacement Excite@Home service and a notification that the Program Member will remain in such an Excite@Home-provided service unless they specifically opt-out. Excite@Home shall not discourage Program Members from continuing to use the e-centives service directly from e-centives, but may offer an additional choice. It is conceivable that any one end user customer could use both services. + + iv) Any such communications will be subject to Excite@Home's then-current privacy policy. + + b) In the event that the Agreement is terminated pursuant to Section 16.a.v. due to e-centives' acquisition by an Excite@Home Named Competitor, or by an entity controlling or controlled by an Excite@Home Named Competitor, e-centives or its assigns or designates may not contact any Users for whom User Data has been provided pursuant to this Agreement, excluding those that have opted out in accordance with Section 5(a) of Exhibit D. In the event of such termination, e-centives will not be eligible for any refund of pre-termination payments made to Excite@Home. + + 19 + +20 *****Confidential Treatment has been requested for portions of this agreement. The copy file herewith omits information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this agreement has been filed separately with the Securities and Exchange Commission. + +18. CONFIDENTIALITY + + a) For the purposes of this Agreement, "Confidential Information" means information about the disclosing party's (or its suppliers') business or activities that is proprietary and confidential, which shall include all business, financial, technical and other information of a party marked or designated by such party as "confidential" or "proprietary"; or information which, by the nature of the circumstances surrounding the disclosure, ought in good faith to be treated as confidential. + + b) Confidential Information will not include information that (i) is in or enters the public domain without breach of this Agreement, (ii) the receiving party lawfully receives from a third party without restriction on disclosure and without breach of a nondisclosure obligation or (iii) the receiving party knew prior to receiving such information from the disclosing party or develops independently. + + c) Each party agrees (i) that it will not disclose to any third party or use any Confidential Information disclosed to it by the other except as expressly permitted in this Agreement and (ii) that it will take all reasonable measures to maintain the confidentiality of all Confidential Information of the other party in its possession or control, which will in no event be less than the measures it uses to maintain the confidentiality of its own information of similar importance. + + d) Notwithstanding the foregoing, each party may disclose Confidential Information (i) to the extent required by a court of competent jurisdiction or other governmental authority or otherwise as required by law or (ii) on a "need-to-know" basis under an obligation of confidentiality to its legal counsel, accountants, banks and other financing sources and their advisors. + + e) The information contained in the Usage Reports provided hereunder will be deemed to be the Confidential Information of each party and will not be disclosed without the written consent of the other party. + + f) The terms and conditions of this Agreement will be deemed to be the + +Source: INVENDA CORP, S-1/A, 8/28/2000 + + + + + + Confidential Information of each party and will not be disclosed without the written consent of the other party. + +19. WARRANTIES AND INDEMNITIES + + a) Application Provider's warranties and indemnities: + + i) Application Provider warrants that it owns, or has obtained the right to distribute and make available, as specified in this Agreement, any and all content provided to Excite@Home or made available to third parties (excluding the Excite Content) in connection with this Agreement. + + 20 21 *****Confidential Treatment has been requested for portions of this agreement. The copy file herewith omits information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this agreement has been filed separately with the Securities and Exchange Commission. + + ii) Application Provider warrants that the e-centives Content will comply, in all material respects, with the description and technical specifications contained in EXHIBITS A AND B. + + iii) Application Provider will indemnify, defend and hold harmless Excite@Home, its affiliates, officers, directors, employees, consultants and agents from any and all third party claims, liability, damages and/or costs (including, but not limited to, attorneys fees) arising from: + + (1) Its breach of any warranty, representation or covenant in this Agreement; or + + (2) Any claim (including, without limitation, claims for infringement of third party intellectual property, publicity, or privacy rights) arising from the e-centives Content, including, without limitation, e-centives' trademarks, but excluding claims based upon the Excite Content or any other materials provided by Excite in the form originally provided by Excite; or + + (3) Any claims (including, without limitation, claims for infringement of third party intellectual property, publicity, or privacy rights), by third parties arising out of or based upon e-centives' services and/or any other service provided by e-centives, but excluding claims based upon the Excite Content or any other information or materials provided by Excite in the form originally provided by Excite. + + iv) Application Provider's obligation to indemnify Excite@Home is conditioned upon Excite@Home promptly notifying Application Provider of any and all such claims. Notwithstanding the foregoing, Application Provider shall only be relieved of its obligation to indemnify Excite@Home to the extent that any such failure to notify materially and adversely affects Application Provider's defense. Excite@Home will reasonably cooperate with Application Provider in the defense and/or settlement thereof; provided that, if any settlement requires an affirmative obligation of, results in any ongoing liability to, or prejudices or detrimentally impacts Excite@Home in any way, and such obligation, liability, prejudice or impact can reasonably be expected to be material, then such settlement shall require Excite@Home's written consent (not to be unreasonably withheld or delayed), and Excite@Home may have its own counsel in attendance at all official proceedings and substantive negotiations relating to such claim at Excite@Home's sole cost and expense. + + 21 22 *****Confidential Treatment has been requested for portions of this agreement. The copy file herewith omits information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this agreement has been filed separately with the Securities and Exchange Commission. + +b) Excite@Home's warranties and indemnities: + + i) Excite warrants that it has the right to distribute and make available, as specified in this Agreement, any and all content and User Data provided to e-centives or made available to third parties (excluding the e-centives Content) in connection with this Agreement. + + ii) Excite warrants that the Excite Content will comply, in all material respects, with the description and technical specifications contained in EXHIBITS A AND B. + +Source: INVENDA CORP, S-1/A, 8/28/2000 + + + + + + iii) Excite@Home will indemnify, defend and hold harmless Application Provider, its affiliates, officers, directors, employees, consultants and agents from any and all third party claims, liability, damages and/or costs (including, but not limited to, attorneys fees) arising from: + + (1) Its breach of any warranty, representation or covenant in this Agreement; + + (2) Any claim (including, without limitation, claims for infringement of third party intellectual property rights) arising from the Excite Content, including, without limitation, Excite's trademarks, but excluding claims based upon the e-centives Content or any other materials provided by e-centives in the form originally provided by e-centives; or + + (3) Any claims (including, without limitation, claims for infringement of third party intellectual property rights), by third parties arising out of or based upon Excite@Home's services and/or any other service provided by Excite, but excluding claims based upon the e-centives Content or any other information or materials provided by e-centives in the form originally provided by e-centives. + + iv) Excite@Home's obligation to indemnify Application Provider is conditioned upon Application Provider promptly notifying Excite@Home of any and all such claims. Notwithstanding the foregoing, Excite shall only be relieved of its obligation to indemnify e-centives to the extent that any such failure to notify materially and adversely affects Excite@Home's defense. Application Provider will reasonably cooperate with Excite@Home in the defense and/or settlement thereof; provided that, if any settlement requires an affirmative obligation of, results in any ongoing liability to, or prejudices or detrimentally impacts + + 22 23 *****Confidential Treatment has been requested for portions of this agreement. The copy file herewith omits information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this agreement has been filed separately with the Securities and Exchange Commission. + + Application Provider in any way, and such obligation, liability, prejudice or impact can reasonably be expected to be material, then such settlement shall require Application Provider's written consent (not to be unreasonably withheld or delayed), and Application Provider may have its own counsel in attendance at all proceedings and substantive negotiations relating to such claim at Application Provider's sole cost and expense. + + c) Except as specified in this Section, neither party makes any warranty in connection with the subject matter of this Agreement and hereby disclaims any and all implied warranties, including all implied warranties of merchantability and fitness for a particular purpose regarding such subject matter. + +20. LIMITATION OF LIABILITY + + Except as provided by Sections 19(a)(iii)(2), (a)(iii)(3), (b)(iii)(2) and (b)(iii)(3): + + a) Neither party will have liability for any damages other than direct damages. In no event will either party be liable to the other for any special, incidental or consequential damages, whether based on breach of contract, tort (including negligence) or otherwise, whether or not that party has been advised of the possibility of such damage. + + b) Either party's liability for damages shall be limited to the amounts actually paid by the other party. + +21. DISPUTE RESOLUTION + + a) The parties agree that any breach of either of the parties' obligations regarding trademarks, service marks or trade names and/or confidentiality would result in irreparable injury for which there is no adequate remedy at law. Therefore, in the event of any breach or threatened breach of a party's obligations regarding trademarks, service marks or trade names or confidentiality, the aggrieved party will be entitled to seek equitable relief in addition to its other available legal remedies in a court of competent jurisdiction. For the purposes of this Section only, the parties consent to venue in either the state courts of the county in which Excite@Home has its principal place of business or the United States District Court for the Northern District of California. + +Source: INVENDA CORP, S-1/A, 8/28/2000 + + + + + + b) In the event of disputes between the parties arising from or concerning in any manner the subject matter of this Agreement, other than disputes arising from or concerning trademarks, service marks or trade names and/or confidentiality, the parties will first attempt to resolve the dispute(s) through good faith negotiation. In the event that the dispute(s) cannot be resolved through good faith negotiation, the parties will refer the + + 23 24 *****Confidential Treatment has been requested for portions of this agreement. The copy file herewith omits information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this agreement has been filed separately with the Securities and Exchange Commission. + + dispute(s) to a mutually acceptable mediator for hearing in the county in which Excite@Home has its principal place of business. + + c) In the event that disputes between the parties arising from or concerning in any manner the subject matter of this Agreement, other than disputes arising from or concerning trademarks, service marks or trade names and/or confidentiality, cannot be resolved through good faith negotiation and mediation, the parties will refer the dispute(s) to the American Arbitration Association for resolution through binding arbitration by a single arbitrator pursuant to the American Arbitration Association's rules applicable to commercial disputes. The arbitration will be held in the county in which Excite@Home has its principal place of business. + +22. GENERAL + + a) Governing Law. The Agreement will be governed by and construed in accordance with the laws of the State of California, notwithstanding the actual state or country of residence or incorporation of Application Provider. + + b) Assignment. Neither party may assign this Agreement, in whole or in part, without the other party's written consent (which will not be unreasonably withheld), except that no such consent will be required in connection with a merger, reorganization or sale of all, or substantially all, of such party's assets or capital stock. Any attempt to assign this Agreement other than as permitted above will be null and void. + + c) Notice. Any notice under this Agreement will be in writing and delivered by personal delivery, express courier, confirmed facsimile, confirmed email or certified or registered mail, return receipt requested, and will be deemed given upon personal delivery, one (1) day after deposit with express courier, upon confirmation of receipt of facsimile or email or five (5) days after deposit in the mail. Notices will be sent to a party at its address set forth below or such other address as that party may specify in writing pursuant to this Section. + + d) No Agency. The parties are independent contractors and will have no power or authority to assume or create any obligation or responsibility on behalf of each other. This Agreement will not be construed to create or imply any partnership, agency or joint venture. + + e) Audit Rights. A party obligated to make payments and/or provide User Data hereunder shall keep for 3 years proper records and books of account relating to the computation of such payments and/or the compilation and content of such User Data. Once every 12 months, the party receiving payment and/or User Data records or its designee may inspect such records to verify for accuracy. Any such inspection will be conducted in a + + 24 + +25 *****Confidential Treatment has been requested for portions of this agreement. The copy file herewith omits information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this agreement has been filed separately with the Securities and Exchange Commission. + + manner that does not unreasonably interfere with the inspected party's business activities. In the case of underpayments, the inspected party shall immediately make any overdue payments disclosed by the audit plus applicable interest. Such inspection shall be at the inspecting party's expense; however, if the audit reveals overdue payments in excess of 5% of the payments owed to date, the inspected party shall immediately pay the + +Source: INVENDA CORP, S-1/A, 8/28/2000 + + + + + + cost of such audit, and the inspecting party may conduct another audit during the same 12 month period. In the case of inaccurate and/or outdated User Data, the providing party shall immediately provide accurate User Data and/or updated User Data (to the extent such party has updated User Data. + +f) Force Majeure. Any delay in or failure of performance by either party under this Agreement will not be considered a breach of this Agreement and will be excused to the extent caused by any occurrence beyond the reasonable control of such party including, but not limited to, acts of God, power outages and governmental restrictions. + +g) Severability. In the event that any of the provisions of this Agreement are held by to be unenforceable by a court or arbitrator, the remaining portions of the Agreement will remain in full force and effect. + +h) Entire Agreement. This Agreement is the complete and exclusive agreement between the parties with respect to the subject matter or related matters hereof, superseding any prior agreements and communications (both written and oral) regarding such subject matter. Notwithstanding the foregoing, the Sponsorship Agreement effective on March 5, 1999 that currently is in force between the two parties to this Agreement shall remain in force, on an interim basis only, and will terminate at the end of the calendar month that the Co-Branded Application launches on the Excite@Home Shopping service without further compensation from either party. + +i) Waiver. The failure of either Party to require performance by the other Party of any provision of this Agreement will not affect the full right to require such performance at any time thereafter; nor will the waiver by either Party of a breach of any provision of this Agreement be taken or held to be a waiver of the provision itself. + +j) Modification. This Agreement may only be modified by a written document executed by both parties. + +k) Construction. The section headings appearing in this Agreement are inserted only as a matter of convenience and in no way define, limit, construe, or describe the scope or extent of such section or in any way affect this Agreement. + + 25 + +26 *****Confidential Treatment has been requested for portions of this agreement. The copy file herewith omits information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this agreement has been filed separately with the Securities and Exchange Commission. + + l) Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. + +IN WITNESS HEREOF, the Parties have caused this Agreement to be executed by their duly authorized representatives as of the date first written above. + +AT HOME CORPORATION e-centives, INC. + +By: ________________________________ By: ____________________________________ + +Name: ______________________________ Name: __________________________________ + +Title: _____________________________ Title: _________________________________ + +Date: ______________________________ Date: __________________________________ + +450 Broadway 6903 Rockledge Drive, Suite 1200 Redwood City, CA 94063 Bethesda, MD 20817 + + 26 27 *****Confidential Treatment has been requested for portions of this agreement. The copy file herewith omits information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this agreement has been filed separately with the Securities and Exchange Commission. + + EXHIBIT A + +Source: INVENDA CORP, S-1/A, 8/28/2000 + + + + + + UNTARGETED AND TARGETED OFFERS WITHIN THE CO- BRANDED APPLICATION + +1. DEFINITIONS + + a) "Untargeted Offers" are those offers generated from either party's network of merchant partners, to be extended to all Users for the benefit of attracting shoppers. + + b) "Targeted Offers" are e-centives offers made available only to Program Members. + +2. TREATMENT OF UNTARGETED OFFERS + + a) The parties shall establish by mutual agreement prices for the sale of Untargeted Offers for display in the Co-Branded Application. + + b) The parties will share equally all revenue from the sale of Untargeted Offers sold for display in the Co-Branded Application. This equal division of revenue shall not extend to any placement of Untargeted Offers outside the Co-Branded Application. For Untargeted Offers that appear both on the Co-Branded Application and elsewhere on the Excite Network, revenue attributable to placement on the Co-Branded Application shall be calculated based on the price to be established as set forth in Section 2.a of this Exhibit, and the parties will share equally such revenue. + + c) The price to be established as set forth in Section 2.a of this Exhibit shall not apply to mass listings of paper or local coupons. The parties will share equally all revenue from the listing of paper or local coupons in the Co-Branded Application. + + d) Each party shall receive without charge space for twenty (20) Untargeted Offers each month. This allocation of free Untargeted Offers may be modified as mutually agreed upon during the Term of the Agreement. + +3. TREATMENT OF TARGETED OFFERS + + a) Targeted offers may be viewed by Users, but may not be used by Users unless they become Program Members. + + b) Targeted offers shall be sold as e-centives and charged upon delivery or display to, or transaction by, a Program Member in the Co-Branded Application or its associated emails. + + 27 + +28 *****Confidential Treatment has been requested for portions of this agreement. The copy file herewith omits information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this agreement has been filed separately with the Securities and Exchange Commission. + + c) All Targeted Offers shall be placed above any Untargeted Offers. + + d) e-centives Co-Branded Application emails shall contain only Targeted Offers, and shall not contain Untargeted Offers. + + 28 + +29 *****Confidential Treatment has been requested for portions of this agreement. The copy file herewith omits information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this agreement has been filed separately with the Securities and Exchange Commission. + + EXHIBIT B + + CONTENT DESCRIPTION AND SPECIFICATIONS ("APPLICATION CONTENT") + +The following describes the general product plan for the Co-Branded Application: + +1. CUSTOMER OFFERS + +Source: INVENDA CORP, S-1/A, 8/28/2000 + + + + + + a) There shall be four distinct types of offers: + + i) Traditional e-centives offers, which are classified as Targeted Offers; + + ii) Excite@Home-exclusive e-centives offers, which are classified as Targeted Offers; + + iii) Other Excite@Home Member exclusive offers, which are classified as Untargeted Offers; + + (1) May be unrelated to e-centives and will have redemption off the e-centives-hosted experience. + + iv) As deemed appropriate by Excite@Home, other offers that may or may not be exclusive to Excite@Home which are provided as a feed to e-centives, which are classified as Untargeted Offers; + + (1) Required so that Members perceive e-centives-hosted content as a superset of Excite@Home's traditional content; + + (2) Important not to have a binary selection -- non-Excite@Home- Member-exclusive offers in one area and Excite@Home-Member- exclusive offers in another -- an unacceptable user experience. + + v) Design cues will be used to differentiate the different types of offers seen by Members, as shown below: + + Anonymous Users Excite@Home Members Served by e-centives e-centives Traditional e-centives offers Yes* Yes Excite-exclusive e-centives offers Yes* Yes + + 29 30 *****Confidential Treatment has been requested for portions of this agreement. The copy file herewith omits information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this agreement has been filed separately with the Securities and Exchange Commission. + + Other Excite@Home Member offers No Yes + + Non-Excite@Home-Member offers Yes Yes + + * Must convert to Excite@Home Member status to redeem + + b) e-centives will use commercially reasonable efforts to support up to a combined 10,000 initial offers from Section 1.a.iii and 1.a.iv of this Exhibit B on the Effective Date of this Agreement. Excite@Home shall have the right to specify an increased capacity of offer presentment at its sole option upon giving three months' advance notice to e-centives at any point during the Term of this Agreement, presuming such request shall be reasonable. + +4. OFFER PLACEMENT + + To ensure an opportunity for both parties to have a reasonable chance to display their own offers within the Co-Branded Application, the following prioritization of offers shall be made within any content area served by e-centives: + + a) For the first page presented within any shopping category area, + + i) All Targeted Offers shall have placement priority above any Untargeted Offers. + + ii) Within the Targeted Offers region, the top 30% of the offer placement locations on the first page within a category of the Co-Branded Application (not including banner or sponsorship placements) will be allocated to Excite@Home exclusive e-centives offers. The remaining 70% of such first pages, along with subsequent pages within each category, the offer placement locations will be split 50%/50% between Excite@Home and + +Source: INVENDA CORP, S-1/A, 8/28/2000 + + + + + + e-centives and will be served in an alternating order. + + iii) Similarly, within the Untargeted Offers region, the top 30% of the offer placement locations on the first page within a category of the Co-Branded Application (not including banner or sponsorship placements) will be allocated to Excite@Home. The remaining 70% of such first pages, along with subsequent pages within each category, the offer placement locations will be split 50%/50% between Excite@Home and e-centives and will be served in an alternating order. + + b) For the second and any following pages presented within any shopping category area, half of the offer placement positions will be allocated to Excite@Home and the other half will be allocated to e-centives and the position of said placements on the page shall be random. + + 30 + +31 *****Confidential Treatment has been requested for portions of this agreement. The copy file herewith omits information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this agreement has been filed separately with the Securities and Exchange Commission. + +5. CUSTOMER BRANDING EXPERIENCE + + a) Until offer selection is made, branding shall be, at Excite@Home's option, "Excite" or "Excite@Home" with a tag line "powered by e-centives." + + b) When offer management or redemption occurs, "Excite (or alternately, Excite@Home, as detailed in Section 3.a of this Exhibit) powered by e-centives" shall be replaced by cobranding, including full logo treatment for e-centives. For any branding at the merchant subject to final merchant approval, e-centives shall use commercially reasonable efforts to ensure that both Excite@Home and e-centives branding elements are present. + + c) Both traditional e-centives offers and Excite@Home e-centives offers will contain e-centives branding elements within an application that is otherwise Excite@Home branded. + + d) The Co-Branded Application shall conform to Excite@Home Third-Party Application standards, including: + + i) Page weight; + + ii) Presence of advertising banners and/or sponsorship placements served by Excite@Home/MatchLogic at Excite@Home's exclusive option; + + iii) Color, fonts, layout, design standards, header, footer, navigational elements, tabbing metaphors, etc.; + + iv) Navigational elements directing traffic to non-e-centives content (e.g., Excite@Home Mail and other Excite@Home Shopping destinations); + + v) Excite@Home's Third-Party Application Standards may change over the Term of this Agreement. As they do, e-centives may be required to make periodic design enhancements to comply with these Standards. Any such required changes shall be reasonable and shall be materially similar to changes required of other applications and application providers subject to Excite@Home's Third-Party Application Standards. + + e) The Co-Branded Application shall be designed to appear to the customer as being Excite@Home; analogs to the goal would be Excite@Home's sports content area at http://www.excite.com/sports, as it appears on the Effective Date of this Agreement (see Exhibit C), which is served by a third-party firm but carries only Excite@Home messaging cues. + + 31 + +32 *****Confidential Treatment has been requested for portions of this agreement. The copy file herewith omits information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this agreement has been filed separately with the Securities and Exchange Commission. + + f) Other Excite@Home Member Offers, and Non-Excite@Home-Member Offers, as highlighted in the matrix in Section 1.b of this Exhibit B, may also require third-party branding in their presentation. + +Source: INVENDA CORP, S-1/A, 8/28/2000 + + + + + +6. OFFER HIERARCHY SYNCHRONIZATION + + a) e-centives does not need to adopt Excite@Home's directory structure but must use similar categorization methodology. For example, Autos and Electronics may be categories at the same level in the hierarchy, but Autos and Cameras would not be at the same level. + + b) e-centives must map to Excite@Home's Shopping directory hierarchy, which may change from time to time during the Term of this Agreement. + + c) e-centives must adopt Excite@Home's naming conventions (e.g. Excite@Home's "Autos" label vs. e-centives' "Automotive" label). + + d) e-centives must provide product and/or offer search capabilities that are comparable to Excite Network offerings, including local (zip code) and off-line redemption. Any such required capabilities shall be reasonable and shall be materially similar to capabilities required of other applications and application providers subject to Excite@Home's Third-Party Application Standards. + +7. PLACEMENT + + a) During the first year of the Agreement a persistent "Above-the-Fold" link shall remain present in the Excite@Home Shopping content area, or its subsequent replacement, or an equivalent area as determined by Excite@Home, that directs end users to the Co-Branded Application, the phrasing of which shall be mutually agreed upon. "Above-the-Fold" shall mean in a position generally viewable by an end-user customer using an Internet browser which has been maximized to full screen on a computer displaying a minimum resolution of 600 x 800 dpi or higher. + + b) During the remainder of the Agreement, a prominent and persistent link shall remain present in the Excite@Home Shopping content area, or its subsequent replacement, or an equivalent area as determined by Excite@Home, that directs end users to the Co-Branded Application. The phrasing of the link shall be mutually agreed upon by the parties. + + 32 33 *****Confidential Treatment has been requested for portions of this agreement. The copy file herewith omits information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this agreement has been filed separately with the Securities and Exchange Commission. + + EXHIBIT C + + LOOK AND FEEL OF THE CO-BRANDED APPLICATION + + The screen shot(s) that follow are examples, solely for purposes of illustration, of the intended look and feel for the Co-Branded Application, as described in Exhibit B, Section 3.e: + + 33 34 *****Confidential Treatment has been requested for portions of this agreement. The copy file herewith omits information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this agreement has been filed separately with the Securities and Exchange Commission. + + EXHIBIT D + + OUTBOUND CUSTOMER CONTACTS + +1. EMAIL OF ACCOUNT STATUS TO MEMBERS ACQUIRED THROUGH EXCITE@HOME: + + a) Excite@Home shall control the look and feel of such emails, which shall be developed in cooperation with e-centives. + +2. WELCOME E-MAILS + +Source: INVENDA CORP, S-1/A, 8/28/2000 + + + + + + a) A Welcome email will be sent to all Qualified Program Members when they first access the Co-Branded Application, provided that Qualified Program Members are clearly notified concerning the sending of such emails at the time of Co-Branded Application use. All such Welcome emails shall be bound by Excite@Home's security and privacy guidelines. A Welcome email regarding the Co-Branded Application will be sent to all General Program Members. + +3. THEMATIC OR SUPPLEMENTAL E-MAILS: + + a) Excite@Home shall control the timing, strategy, and look and feel of Thematic and Supplemental emails. Notwithstanding the foregoing, Excite@Home agrees that emails shall be sent at least once per month to at least 50% of the Program Members with at least five (5) merchant offers. + + b) Excite@Home shall sell e-centives Thematic or Supplemental emails at no less than e-centives' then current standard or generally available discounted email rates. If Excite@Home does not sell such emails, or all positions within such emails, then e-centives may do so. + + c) Excite@Home and e-centives shall share equally all net revenue from such offers, defined as gross revenue minus third-party serving costs, which shall not exceed $0.01 per email piece delivered. + +4. RECIPROCAL DATA TRANSFER & REPORTING + + a) The parties will allocate the production and sending of emails between them based upon technical considerations to be addressed to both party's mutual satisfaction. In some instances e-centives will produce and send the outbound email pieces, and in other cases Excite@Home will produce and send the outbound email pieces. + + b) The determination of which emails shall be sent by which party shall be mutually determined. + + 34 + +35 *****Confidential Treatment has been requested for portions of this agreement. The copy file herewith omits information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this agreement has been filed separately with the Securities and Exchange Commission. + + c) In all cases, the primary branding on each email will be Excite@Home. + + d) Excite@Home will retain full editorial oversight for all mass distribution mailings contemplated under this Agreement, regardless of the sending source. + + e) Reporting and per-email recipient activity data is desired by both parties and shall be mutually agreed upon, with both parties agreeing to provide reporting and per-email recipient activity data that is reasonably equivalent to that offered by the other party. Each party shall assume its own costs in both sending outbound email and in providing necessary reporting and data to the other party. + +5. COMMUNICATIONS TO PROGRAM MEMBERS WHO OPT OUT OF FIRST-PARTY CONTACT + + a) Excite@Home maintains records concerning whether Excite@Home Users have opted in or opted out of receiving contacts from Excite@Home ("first-party contacts"). From time to time, Excite@Home Users who have opted in to first-party contacts may subsequently elect to opt out of first-party contacts. + + b) Excite@Home or a designated agent shall provide notice to Application Provider when Program Members whose User Data records have been licensed to Application Provider opt out of receiving any first-party contacts subsequent to licensing. This notice shall be provided on a schedule and in a format to be mutually agreed upon. + + c) Within forty-eight (48) hours of receiving notice that a Program Member has opted out of first-party contact, Application Provider shall: + + i) Ensure that future emails to the Program Member do not contain any Excite@Home branding; and + + ii) Ensure that future emails do not direct the Program Member to the Co-Branded Application. Application Provider may continue to direct Program Members to http://www.e-centives.com or its subsequent replacement. + +Source: INVENDA CORP, S-1/A, 8/28/2000 + + + + + + 35 36 *****Confidential Treatment has been requested for portions of this agreement. The copy file herewith omits information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this agreement has been filed separately with the Securities and Exchange Commission. + + EXHIBIT E + + EXCITE@HOME/APPLICATION PROVIDER NAMED COMPETITORS + +Excite@Home Named Competitors ----------------------------- + +AOL Time Warner Yahoo Go/Infoseek Lycos Snap/NBCi Ebay AltaVista + +Application Provider Named Competitors -------------------------------------- + +CoolSavings.com IQ.com BrightStreet.com ValPak HotCoupons Aduo SuperMarkets Online Coupons.com (Xadvantage) Dash ShoppingList.com + + 36 + +37 *****Confidential Treatment has been requested for portions of this agreement. The copy file herewith omits information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this agreement has been filed separately with the Securities and Exchange Commission. + + EXHIBIT F + + PROMOTION ON EXCITE@HOME NETWORK + +1. OFFERS + + a) The parties will work together to develop mutually agreed upon modules designed to promote the Co-Branded Application, which may appear on the Excite.com homepage for some Users. + + b) At its discretion, Excite@Home may include up to five rotating links on the My Excite Start Page ("MESP"). At Excite@Home's discretion, Excite@Home may include Excite@Home exclusive e-centives offers, non- exclusive e-centives offers may also get rotation on MESP, or general calls to action to the Co-Branded Application. + + c) At Excite@Home's discretion, links may be included in the "My Services" module. All decisions regarding this module remain Excite@Home's, including but not limited to the name and relative placement of the module on MESP. This module may not remain as a default module on the page over the entire length of the Agreement. + +Source: INVENDA CORP, S-1/A, 8/28/2000 + + + + + + d) No e-centives branding of any kind will be present on MESP. + +2. OFFER CATEGORIES + + a) This Section applies to the publicly accessible narrowband offering from Excite@Home, currently available at http://www.excite.com. + + b) Excite@Home intends to use a randomization function to surface offers on MESP in order to provide category specification by user and to support dynamic content delivery for each server-refreshed page view. This technique will support all e-centives categories and personalized user category filtering, but will not support offers that can appear in multiple categories or offer weighting. + + c) Of all e-centives implementation links on MESP, any single category can have only one link placement. + + d) For a category to be surfaced, there must be three unique offers in that category. The minimum of three offers per category must remain fresh; if more than one week has elapsed without new offers being available then a status message indicating no new offers in the category selected will appear. + + e) To prevent multiple appearances of a single offer on one MESP page view, every offer must be tagged to only one e-centives category. + + 37 38 *****Confidential Treatment has been requested for portions of this agreement. The copy file herewith omits information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this agreement has been filed separately with the Securities and Exchange Commission. + +3. USER TYPES + + a) Anonymous Users and Excite@Home Members with no personalization of the My Services module: + + i) Excite@Home may display two to five links at its sole option. All e-centives categories will be supported, but each category may have at most one link. + + b) Excite@Home Members with personalization of the My Services module and/or provision of an e-centives account: + + i) Excite@Home may display two to five links at its sole option. All e-centives categories will be supported, but each category may have at most one link per page view. + + ii) Category surfacing will be based upon users' submitted preferences. + + iii) Excite@Home Members shall retain unilateral control to turn all offer presentments off. + +4. IMPLEMENTATION + + a) e-centives shall write the necessary application for Excite@Home provided API to automate bulk update of available offers into Excite@Home's Concorde system. The targeted completion date shall be 12-16 weeks from the Effective Date of this Agreement. + + b) The placement of e-centives promotional links on the default front page will be implemented in a test mode for a pre-determined period of time. Specific success measures, including increases in the conversion rate of non-Excite@Home-Members to Excite@Home-Members, must be met prior to making the decision to continue default placement. + + c) Access to the e-centives organizer will be from links within Member Services and Shopping and potentially other locations as well, at Excite@Home's sole discretion. + + 38 + +39 *****Confidential Treatment has been requested for portions of this agreement. The copy file herewith omits information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this agreement has been filed separately with the Securities and Exchange Commission. + + EXHIBIT G + +Source: INVENDA CORP, S-1/A, 8/28/2000 + + + + + + PAYMENT SCHEDULE: EXEMPLAR + + The spreadsheet that follows is an example, solely for purposes of illustration, of the payment provisions set out by Section 7.d. + + 39 40 *****Confidential Treatment has been requested for portions of this agreement. The copy file herewith omits information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this agreement has been filed separately with the Securities and Exchange Commission. + + EXHIBIT H + + MAINTENANCE AND TECHNICAL SUPPORT STANDARDS + +1. MAINTENANCE + + a) Application Provider shall provide, during 6:00 AM - 6:00 PM Pacific Time on Application Provider's normal business days, telephone consulting services to Excite@Home's designated personnel to assist such personnel in resolving problems, obtaining clarification relative to the Co-Branded Application and providing assistance regarding suspected defects or errors in the Co-Branded Application. + + b) Application Provider shall also provide after-hours support to Excite@Home. Excite@Home's use of such support shall be confined to calls related to Severity 1 and Severity 2 issues as those terms are defined in this Exhibit I. Application Provider will make all reasonable efforts to respond to Excite@Home's after-hours support requests within the standards set out in this Exhibit I prior to the next business day following receipt of the request. + + c) By mutual agreement of the parties, Application Provider shall furnish qualified personnel for on site assistance to Excite@Home to resolve problems and to assist in customization. + + d) Application Provider agrees to diligently work to promptly correct defects and errors in the Co-Branded Application. Application Provider agrees to respond to Excite@Home by using a dedicated contact telephone number for each support call. + + e) Notwithstanding the foregoing, in the case of a system down condition, (i.e. Severity 1, as defined below) attributable to Application Provider, Application Provider may utilize other means of communication for both reporting of errors and the conditions thereof. + + f) Application Provider shall respond to and complete correction of errors, defects and malfunctions, in accordance with the following schedule: + + i) SEVERITY 1: Causes data corruption or system crash or Program Members or Excite@Home cannot make effective use of the Co-Branded Application. + + ii) SEVERITY 2: Feature does not work as documented, no reasonable work-around exists and Program Members or Excite@Home have a critical need for the feature; + + 40 41 *****Confidential Treatment has been requested for portions of this agreement. The copy file herewith omits information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this agreement has been filed separately with the Securities and Exchange Commission. + + iii) SEVERITY 3 Feature doesn't work as documented, but a reasonable work around exists or Excite@Home or Program Members do not have a critical need for the feature; + + iv) SEVERITY 4 Enhancement request. + + g) Provided that maintenance calls are received within Application Provider's maintenance hours, Application Provider shall make an initial response to a Severity 1 maintenance call within two (2) hours after receipt. Application Provider shall use best efforts to provide a fix, work around, or to patch Severity 1 bugs within twenty four (24) hours after the bug is replicated by Application Provider and confirmed as a bug by Application Provider. + +Source: INVENDA CORP, S-1/A, 8/28/2000 + + + + + + h) Provided that maintenance calls are received within Application Provider's maintenance hours, Application Provider shall make an initial response to Severity 2 maintenance calls within four (4) hours after receipt. Application Provider shall make commercially reasonable efforts to provide a fix or work around for Severity 2 bugs within five (5) business days. + + i) Provided that maintenance calls are received within Application Provider's maintenance hours. Application Provider shall make an initial response to Severity 3 maintenance calls within twenty-four (24) hours after receipt. Application Provider shall make reasonable efforts to identify a resolution to Severity 3 bugs within thirty (30) days. + + j) Provided that all maintenance calls are received within Application Provider's business hours, Application Provider shall make an initial response to Severity 4 maintenance call within forty-eight (48) hours after receipt. Severity 4 issues will be dealt with on a case-by-case basis and no blanket commitments will be made. + + k) Excite@Home shall appoint one (1) person as the principal point of contact for the communication of bugs and errors to Application Provider and for the receipt of bug and error fixes, work arounds and updates, if any. Additionally Excite@Home may appoint another person as a backup of the principal contact. + +2. UPTIME GUARANTEE + + a) The Co-Branded Application shall not experience more than two outages (unscheduled downtime) of more than two hours during any one month. In addition, the Co-Branded Application shall have at least the following uptime as measured monthly, excluding planned downtime: + + i) First six months after launch of the Co-Branded Application: 98.8%. + + 41 + +42 *****Confidential Treatment has been requested for portions of this agreement. The copy file herewith omits information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this agreement has been filed separately with the Securities and Exchange Commission. + + ii) Months 7-12 following launch of the Co-Branded Application: 99.4%. + + iii) Remainder of the Term of the Agreement: 99.5%. + + b) Application Provider will notify Excite@Home within fifteen (15) minutes of any known and verified unscheduled downtime of the Co-Branded Application and update the status to Excite@Home each and every hour until service is back up. Application Provider will immediately notify Excite@Home when service is restored. + +3. SYSTEM PERFORMANCE + + a) Latency of any data from the time Application Provider's server receives a request to serve data to the time when Application Provider's server begins to serve such data shall be less than or equal to three seconds, except that latency of login/account creation shall be no greater than five seconds in at least 90% of all cases, and in no case shall PIN presentment be in excess of ten seconds, independent of network or Internet conditions. + + b) Throughput of all data being served directly to the end user shall be sustained at least 50Kbits/sec as measured by Excite@Home's monitoring stations in at least 80% of all monitored cases. + +4. PERFORMANCE MEASUREMENT + + a) Application Provider shall provide outage reports to Excite@Home upon request. + + 42 43 *****Confidential Treatment has been requested for portions of this agreement. The copy file herewith omits information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this agreement has been filed separately with the Securities and Exchange Commission. + + EXHIBIT I + + APPLICATION PROVIDERS DATA RESTRICTED NAMED COMPANIES + +Source: INVENDA CORP, S-1/A, 8/28/2000 + + + + + + Netcentives MyPoints.com Cybergold beenz.com YesMail Lifeminders Net Creations Double Click 24/7 Net Perceptions Engage Technologies Broadvision Personify Andromedia Befree Linkshare Brodiq Q-Pass Younology + + 43 + +44 *****Confidential Treatment has been requested for portions of this agreement. The copy file herewith omits information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this agreement has been filed separately with the Securities and Exchange Commission. + +***** + +Source: INVENDA CORP, S-1/A, 8/28/2000 \ No newline at end of file diff --git a/full_contract_txt/IpassInc_20181203_8-K_EX-99.1_11445874_EX-99.1_Reseller Agreement.txt b/full_contract_txt/IpassInc_20181203_8-K_EX-99.1_11445874_EX-99.1_Reseller Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..bd48c2b6ae0345e7f5eb4d8a201b5bbbd233c8b3 --- /dev/null +++ b/full_contract_txt/IpassInc_20181203_8-K_EX-99.1_11445874_EX-99.1_Reseller Agreement.txt @@ -0,0 +1,289 @@ +Exhibit 99.1 [***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. + +CHANNEL PARTNER RESELLER AGREEMENT THIS CHANNEL PARTNER RESELLER AGREEMENT ("Agreement") is entered into and agreed upon as of the Effective Date by and between IPASS INC., having a principal place of business at 3800 Bridge Parkway, Redwood Shores, CA 94065 ("iPass"), and Pareteum Corporation, having a principal business address at 100 Park Avenue, Suite 1600, New York City, New York 10017 ("Channel Partner"). Capitalized terms used in this Agreement shall be defined as set forth herein. This Agreement is comprised of the Terms and Conditions together with all Exhibits attached hereto. The undersigned represent and warrant that they are authorized as representatives of the party on whose behalf they are signing this Agreement and that they have read and agree to adhere to the Terms and Conditions as well as the exhibits attached hereto and incorporated herein by reference. IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective Date. Channel Partner: iPass Inc.: By: /s/ Victor A. Bozzo By: /s/ Christine Gardner Victor A. Bozzo Christine Gardner Printed Name Printed Name Chief Executive Officer VP Finance Title Title 4/24/2018 04/25/2018 Date Date + +Source: IPASS INC, 8-K, 12/3/2018 + + + + + +TERMS AND CONDITIONS 1. APPOINTMENT OF CHANNEL PARTNER 1.1 General. iPass will make the Service available to Channel Partner in exchange for the fees referenced in the Exhibits attached hereto and incorporated herein by reference. Channel Partner may order Services using an iPass approved order form available via the iPass Portal. Each order form must reference this Agreement and each order form shall merge and incorporate the terms herein. Each order form is a separate and distinct contractual obligation. 1.2 Grant of Authority. iPass grants to Channel Partner a nonexclusive, terminable right to: (i) access and otherwise use the Licensed Software, and iPass Marks as provided in Exhibit F solely in furtherance of this Agreement and not for other internal business purposes, (ii) sell or re-license the Licensed Software, Documentation and Services to Business Entities and End Users, and (iii) install and execute the Server Software on up to three (3) designated servers and one backup server for Channel Partner and for each End User. Channel Partner accepts iPass as the exclusive provider to Channel Partner for all services of the nature of the Services. In no event may Channel Partner resell or otherwise provide the Service to any third party for purposes of further "down channel" resale of the Services, absent iPass' notice and consent. The license granted under this Section 1.2 does not include a license or other right to use the iPass domain name and does not include the right to use the trademark or trade name of any iPass supplier or partner. 1.3 Software Delivery iPass will provide the Licensed Software to Channel Partner electronically via the iPass Portal, an iPass FTP website or on-line app store. 1.4 Account and Password Information. iPass will assign to Channel Partner a unique password and identification code used to access the Channel Partner section of the iPass Portal. Channel Partner may not transfer or share this account information with any third party. Channel Partner is solely responsible for assigning user names and passwords ("Credentials") to End Users so that End Users may access the iPass Portal and for imposing reasonable limitations on the disclosure of such Credentials. 2. CHANNEL PARTNER RESPONSIBILITIES 2.1 General. Channel Partner will use its reasonable endeavours cooperate with iPass and assist with the implementation of this Agreement and performance of the Services. Prior to deployment of the Licensed Software in a production environment, Channel Partner agrees to implement processes that will allow the Licensed Software to successfully report as specified in the Documentation. If Channel Partner fails to implement such processes within a reasonable time following iPass' request, iPass may elect to terminate the Agreement or Channel Partner's use of the Licensed Software upon written notice to Channel Partner. In such an event, Channel Partner shall be responsible for payment of all undisputed amounts due and owing to iPass under the Agreement. In addition, Channel Partner agrees to ensure that prior to deployment of the Licensed Software in a Business Entity production environment, each Business Entity implements processes that will allow the Licensed Software to successfully report as specified in the Documentation. If Channel Partner's Business Entity fails to implement such processes within a reasonable time following iPass' or Channel Partner's request, iPass may elect to terminate the order for such Business Entity upon written notice to Channel Partner. In such an event, Channel Partner shall be responsible for payment of all undisputed amounts due and owing to iPass under the Agreement. 2.2 Acceptable Use Policy. Channel Partner agrees that it will not (and will not permit Business Entities) to use the Service in a manner contrary to the iPass acceptable use policy located at http://www3.ipass.com/wp-content/uploads/2010/01/Acceptable-Use-Policy.pdf/ , and incorporated herein by reference. + +Page 2 of 22 iPass Channel Partner Reseller Agreement 04.18.2018 iPass Confidential + +[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b- 2 of the Securities Exchange Act of 1934, as amended. + +Source: IPASS INC, 8-K, 12/3/2018 + + + + + +2.3 End User Realms. A realm is used to uniquely identify a user with a specific End User or group. (An example would be example.com). Realms are created by iPass in cooperation with Channel Partner and the relevant End User. Channel Partner does not own or control these realms by virtue of having registered them with iPass or having paid any fees associated with such registration. Upon request by Channel Partner or the End User, iPass may remove a realm from its system or re-assign a realm to another Channel Partner. 2.4 End User Support. Channel Partner will provide technical and End User support in accordance with Exhibit D. 2.5 End User Satisfaction. iPass may, upon reasonable notice to Channel Partner, directly contact End Users for any reason pertaining to such End User's use of the Service, subject to compliance with local privacy law. Should an End User communicate to Channel Partner or to iPass its dissatisfaction regarding the Services or related matters, the notified party shall promptly give notice to the other party, and iPass and Channel Partner shall work together in good faith to resolve the issue to End User's reasonable satisfaction. If in iPass' reasonable determination the issue is not resolved within thirty (30) days after Channel Partner's receipt of notice of End User's dissatisfaction, iPass may, in addition to other remedies available to iPass, revoke Channel Partner's appointment under Section 1.2 wholly or with respect to such End User and may refer such End User to another iPass channel partner or provide services directly to such End User without any liability to Channel Partner. 2.6 End User Agreements. Before making available any Services to an End User, Channel Partner will enter into an End User Agreement that is materially similar to the terms and conditions contained in Exhibit E. Channel Partner will enforce each End User Agreement with at least the same degree of diligence used in enforcing similar agreements pertaining Channel Partner's own services or products but in no event will Channel Partner provide a standard of care in this regard that is less than commercially reasonable. Channel Partner will not waive, amend, or agree to terms that would tend to negate or materially dilute the sample terms provided in Exhibit E. Channel Partner shall promptly notify iPass of any material breach of any End User Agreement and will cooperate with iPass and/or iPass suppliers in any legal action to mitigate iPass' damages in the event of any such breach. iPass may, and may require Channel Partner to suspend or terminate Services to an End User who breaches the terms of an End User Agreement. Upon request, Channel Partner will provide iPass a copy of each End User Agreement entered into by Channel Partner and End Users. A breach by an End User is deemed a breach by Channel Partner. 2.7 TRAINING. iPass may provide training in use of the Services. Such training and the applicable fees are indicated in Exhibit D. 3. SERVICE RATE PLAN 3.1 Fees. Channel Partner is solely responsible for billing End Users, and paying iPass for all usage of the Services. Channel Partner agrees to pay for usage of the Service on a monthly basis in accordance with the pricing set forth in Exhibit C. iPass may change the pricing in Exhibit C upon notice to Channel Partner, such changes to be effective within thirty (30) days after the date of such notice, such changes may include, by way of example only, the application of end of life fees. + +Page 3 of 22 iPass Channel Partner Reseller Agreement 04.18.2018 iPass Confidential + +[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b- 2 of the Securities Exchange Act of 1934, as amended. + +Source: IPASS INC, 8-K, 12/3/2018 + + + + + +3.2 Payment. All payments hereunder will be in US Dollars and are due and payable within thirty (30) days after the date of invoice. iPass may terminate or modify these payment terms with reasonable notice, when, in its reasonable discretion, iPass believes that its payments may be at risk. All rights of Channel Partner are expressly made conditional upon timely payment, without the right of set off, of all amounts due by Channel Partner under the Agreement. Without limiting iPass' other available rights and remedies, iPass reserves the right to suspend or to terminate any Services ten (10) days after sending written notice of a payment that is thirty (30) or more days past due. iPass may include on an invoice, and Channel Partner agrees to pay for: (i) any Services used within one hundred eighty (180) days before the date of the invoice; and (ii) any corrections to amounts invoiced within one hundred eighty (180) days after the date of the original invoice. If Channel Partner reasonably disputes an invoiced amount, Channel Partner may: (a) withhold such amount from Channel Partner's payment, provided that Channel Partner gives iPass written notice of the dispute and the reason for such dispute within thirty (30) days after the date of invoice, and pays all invoiced amounts not subject to such dispute by the due date; or (b) in the event that the invoiced amount has already been paid in full, submit a claim to iPass within sixty (60) days following the date of the original invoice. The parties will cause their authorized representatives to meet within fifteen (15) days after Channel Partner's notice of dispute to negotiate in good faith to resolve the dispute. If such representatives have not resolved the dispute within fifteen (15) days after their first meeting, the parties will either decide mutually to continue negotiations or, if either party does not desire to continue negotiations, each party may exercise its available remedies with respect to the disputed amounts. To the extent a dispute resolution requires payment of disputed amounts, Channel Partner shall pay such disputed amounts promptly after the dispute is resolved. 3.3 Late Fees. iPass reserves the right to charge interest of one and one-half percent (1.5%) per month compounded for the entire overdue period or the maximum amount allowed by law if fees are not paid by their due date. 3.4 Taxes. Channel Partner will pay all applicable transaction based taxes including but not limited to sales, use, gross receipts, excise, value-added, duties and other taxes and/or surcharges related to purchase of iPass Services and goods. As between iPass and Channel Partner, Channel Partner will be responsible for self-assessing and remitting all transaction based taxes unless otherwise invoiced by iPass. If Channel Partner is required by law in Channel Partner's respective country to withhold taxes on payments made to iPass, then Channel Partner shall gross up such payments by the amount of tax withheld. All prices are exclusive of tax. If required to do so by law, iPass will charge sales or value added tax where registered. Otherwise, Channel Partner is liable to self-assess or reverse charge applicable sales or value added tax. For tangible products shipped overseas iPass will not be importer of record. Channel Partner will provide and make available to iPass any resale certificates and other exemption certificates that are related to the taxes that may be due as a result of this Agreement. Upon receipt of any such resale or exemption certificate, iPass will exempt Channel Partner in accordance with the applicable law, effective on the date iPass receives the certificate(s). 4. BRANDING 4.1 Branding. Subject to the license grant in Section 1.2, Channel Partner agrees to incorporate and display the iPass trademarks and logos set forth in Exhibit F, Exhibit F may be amended from time to time by iPass ("iPass Marks"), on all Channel Partner web sites mentioning the Service, all help files relating to the Service and all printed collateral referring to the Service. Channel Partner may reproduce and publicly display any iPass web content as provided to Channel Partner by iPass on Channel Partner's web site. Channel Partner will not modify the iPass Web Content without iPass prior written approval. Channel Partner will have at a minimum one (1) web page describing the iPass Services. Channel Partner will follow the iPass Branding usage guidelines which will be provided by iPass on the secure iPass Portal. Use of the iPass Marks is subject to iPass' reasonable review and approval. Channel Partner shall state at the first instance of each use of an iPass Mark that the iPass Mark is iPass' trademark and shall include the symbols TM and ® as appropriate. Channel Partner shall not use any trademark, word, symbol, letter, or design in combination with the iPass Marks in a manner that would create a combination mark. Channel Partner shall not attempt to register the iPass Marks or adopt, use or attempt to register any confusingly similar mark or web site domain names. + +Page 4 of 22 iPass Channel Partner Reseller Agreement 04.18.2018 iPass Confidential + +[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b- 2 of the Securities Exchange Act of 1934, as amended. + +Source: IPASS INC, 8-K, 12/3/2018 + + + + + +4.2 Client Software Branding. Upon request, iPass will provide Channel Partner co-branding space on the Client Software interface in order to display a logo or trademark of Channel Partner or an End User. The placement and size of any Channel Partner mark included on the Client Software interface, if any, will be in iPass' sole discretion. Channel Partner may not remove, modify, or obscure the iPass Mark and iPass branding on the Client Software without the prior consent of iPass. iPass will supply Channel Partner with appropriate graphics for Client Software applications, web promotional banners, and logos for print and web uses. 4.3 Information Updates. Channel Partner agrees to update its information on the iPass Services on its website and in other materials at a minimum of once a quarter to reflect current information on the iPass Services as such information is provided by iPass. 4.4 Publicity and Channel Partner Lists. After the Effective Date and subject to approval from the Channel Partner first, iPass may issue a press release announcing that Channel Partner is a reseller of the iPass Service and announcing the existence of this Agreement. Channel Partner shall mention the iPass name in all press releases related to the Services. Channel Partner consents to (i) the use of its name and logo in iPass' Channel Partner lists, (ii) the use of its name in iPass' quarterly earnings announcement, and (iii) on the iPass website in order to assist potential End Users with locating an authorized iPass reseller. Channel Partners agrees to be a reference for iPass, upon iPass' reasonable request. Channel Partner will not issue any press release or other public communication related to this Agreement or Channel Partner's status as an iPass reseller without prior approval of the content by iPass. Channel Partner shall give iPass a reasonable amount of time to review and approve material distributed publicly. If iPass provides edits to content about iPass products, services, technology or any other content related to the iPass business, Channel Partner will incorporate those changes into the final document. 5. INTELLECTUAL PROPERTY 5.1 Channel Partner acknowledges that all iPass intellectual property referenced herein contains the valuable trade secrets of iPass, and Channel Partner agrees not to cause or permit the reverse engineering, translation, disassembly, or decompilation of the intellectual property, or otherwise to attempt to derive the source code thereof, whether in whole or in part. Channel Partner will not use, reproduce, modify, prepare derivative works of, distribute, sublicense, loan, sell, or otherwise transfer any such iPass intellectual property except as expressly permitted herein. 5.2 As between the parties, iPass and/or its suppliers will retain all title, copyright and other proprietary and intellectual property rights in and to the Service, the Server Software and Licensed Software, and any other technology, services, or materials that iPass may provide to Channel Partner hereunder. All rights in and to the foregoing not expressly granted to Channel Partner in this Agreement are reserved to iPass and its suppliers. In particular, but without limiting the generality of the foregoing, no right to or license in the source code for the Licensed Software or Server Software is granted hereunder. Channel Partner will not obfuscate, alter, or remove any copyright, trademark, or other proprietary notice or legend on or in the Licensed Software or Documentation and will include all such markings in all copies of such materials. + +Page 5 of 22 iPass Channel Partner Reseller Agreement 04.18.2018 iPass Confidential + +[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b- 2 of the Securities Exchange Act of 1934, as amended. + +Source: IPASS INC, 8-K, 12/3/2018 + + + + + +6. WARRANTY. 6.1 DISCLAIMER OF WARRANTY. iPASS AND ALL iPASS SUPPLIERS EXPRESSLY DISCLAIM ANY AND ALL WARRANTIES, CONDITIONS, AND REPRESENTATIONS OF ANY KIND, WHETHER EXPRESS, IMPLIED OR STATUTORY,INCLUDING ANY WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NEITHER iPASS NOR ANY iPASS SUPPLIER WILL BE LIABLE FOR ANY THIRD-PARTY NETWORK FAILURE. iPASS AND ITS SUPPLIERS SPECIFICALLY DO NOT WARRANT THAT THE SERVICES WILL MEET CHANNEL PARTNER'S OR END USER REQUIREMENTS, WILL BE UNINTERRUPTED, TIMELY, SECURE, ERROR FREE, AVAILABLE ON A SPECIFIED DATE OR TIME OR WILL HAVE THE CAPACITY TO MEET CHANNEL PARTNER'S OR END USER DEMAND DURING SPECIFIC HOURS. CHANNEL PARTNER ACKNOWLEDGES THAT IT HAS NOT ENTERED INTO THIS AGREEMENT IN RELIANCE UPON ANY WARRANTY OR REPRESENTATION. 6.2 iPass Warranty of Title. iPass has requisite title, permits, licenses and authority to grant Channel Partner the rights and licenses referenced herein. 6.3 No Pass-Through Warranty. Channel Partner shall make no representations or warranties concerning the Licensed Software or the Services on behalf of iPass or any iPass supplier. 6.4 Channel Partner Warranty. Channel Partner agrees that the quality of its products and services to be provided in connection with any of the iPass Marks will be substantially the same as the quality of such other Channel Partner products and services and shall otherwise comport with industry standards and in the event of breach of this Section 6.4, Channel Partner shall take prompt and urgent actions to remediate the breach. 7. CONFIDENTIAL INFORMATION. 7.1 For purposes of this Section 7, the "Disclosing Party" shall be the party which discloses Confidential Information and the "Receiving Party" shall be the party that receives the Confidential Information. The following is not considered Confidential Information: (i) information which the Receiving Party is authorized in writing by the Disclosing Party to use without restriction; (ii) information rightfully in the Receiving Party's possession or known to it without the duty of confidentiality prior to receipt of such information from the Disclosing Party; (iii) information which is rightfully disclosed to the Receiving Party by a third party, having proper possession of such information, without the duty of confidentiality; (iv) information which properly enters the public domain; or (v) information which is independently developed by the Receiving Party without reference to the Disclosing Party's Confidential Information. 7.2 The Receiving Party shall use the Disclosing Party's Confidential Information only for the purpose set forth in the Agreement, and shall cause its Users to keep Confidential Information confidential, sharing it on a "need-to-know" basis only. The Receiving Party may disclose Confidential Information in connection with a judicial or administrative proceedings to the extent such disclosure is required under law or a court order, provided that the Disclosing Party shall be given prompt written notice of such proceeding. Upon termination of this Agreement or Disclosing Party's request, Receiving Party shall return and at Disclosing Party's option, destroy any and all Confidential Information exchanged under this Agreement. 7.3 In addition to any other remedies, the Disclosing Party shall be entitled to seek equitable relief. 7.4 For Confidential Information pertaining to the Licensed Software, the obligations set forth in this Section 7 are indefinite. For all other Confidential Information, such obligations shall continue for five (5) years from the date of initial disclosure. + +Page 6 of 22 iPass Channel Partner Reseller Agreement 04.18.2018 iPass Confidential + +[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b- 2 of the Securities Exchange Act of 1934, as amended. + +Source: IPASS INC, 8-K, 12/3/2018 + + + + + +8. INDEMNIFICATION OBLIGATIONS. 8.1 By iPass. iPass agrees to indemnify Channel Partner or, at its option, settle, any third party claims that the Licensed Software or Services provided under this Agreement infringes a copyright, patent, trademark, trade secret or other intellectual property right. If the Licensed Software or Service becomes, or in iPass' opinion is likely to become, the subject of an infringement claim, iPass may, at its option and expense, either: (a) procure for Channel Partner the right to continue using the affected Licensed Software or Service;(b) replace or modify the Licensed Software or Service so that it becomes non-infringing; (c) accept return of the Licensed Software; or (d) terminate the Services. iPass shall have no liability under this Section 8.1 if: (i) the allegation of infringement is a result of a modification of the Licensed Software or Services; (ii) if the Licensed Software or Services is not being used in accordance with the Documentation; (iii) if the Licensed Software is no longer supported by iPass; (iv) if the alleged infringement could be avoided or otherwise eliminated by the use of an published Update; or (v) if the alleged infringement is a result of use of the Licensed Software or Services with any non-iPass supplied third party product or software. This indemnification does not include and/or apply to Internet connectivity or Internet access services. 8.2 By Channel Partner. Channel Partner agrees to indemnify iPass or, at its option, settle, any third party claims against iPass arising from or relating to Channel Partner's: (a) infringement of a copyright, patent, trademark, trade secret or other proprietary rights or rights of publicity or privacy; (b) violation of iPass' acceptable use policy, or (c) a violation of this Agreement. 8.3 Mechanics of Indemnity. The above indemnification obligations are contingent upon: (i) the indemnified party providing prompt written notice to the other party of any such claims and assistance in the defense thereof; (ii) the party indemnifying has sole right to control the defense or settlement of any such claim, provided that the settlement does not require a payment or admission of liability on the part of the indemnified party; and (iii) that indemnified party does not take any actions or refrain from taking actions that hinder the defense or settlement process as reasonably directed by the party indemnifying the other party. 8.4 SECTION 8 STATES THE ENTIRE LIABILITY AND OBLIGATIONS OF THE PARTIES WITH RESPECT TO ANY ACTUAL OR ALLEGED THIRD PARTY CLAIMS ARISING FROM OR RELATING TO THIS AGREEMENT. 9. LIMITATIONS OF LIABILITY. 9.1 DIRECT DAMAGES. EACH PARTY'S MAXIMUM LIABILITY FOR DAMAGES CAUSED BY ITS FAILURE TO PERFORM ITS OBLIGATIONS UNDER THE AGREEMENT IS LIMITED TO: (A) PROVEN DIRECT DAMAGES FOR CLAIMS ARISING OUT OF PERSONAL INJURY OR DEATH, OR DAMAGE TO TANGIBLE PROPERTY CAUSED BY THE PARTY'S NEGLIGENT OR WILLFUL MISCONDUCT; AND (B) PROVEN DIRECT DAMAGES FOR ANY AND ALL CLAIMS ARISING FROM OR IN CONNECTION WITH OR RELATING TO THIS AGREEMENT OR THE LICENSED SOFTWARE OR SERVICES, NOT TO EXCEED AN AMOUNT EQUAL TO THE AMOUNT OF FEES ACTUALLY PAID BY CHANNEL PARTNER TO IPASS DURING THE SIX (6) MONTHS PRECEDING THE FIRST EVENT GIVING RISE TO SUCH LIABILITY. ALL CLAIMS AGAINST THE PARTIES WILL BE AGGREGATED TO DETERMINE SATISFACTION OF THIS LIMIT, AND MULTIPLE CLAIMS WILL NOT ENLARGE THE LIMIT. 9.2 CONSEQUENTIAL DAMAGES. NEITHER PARTY WILL BE LIABLE FOR ANY SPECIAL, INCIDENTAL, INDIRECT, EXEMPLARY, PUNITIVE, OR CONSEQUENTIAL DAMAGES ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR THE USE OF THE LICENSED SOFTWARE, THE SERVICES OR DOCUMENTATION, WHETHER FROM BREACH OF CONTRACT OR WARRANTY, FROM NEGLIGENCE, STRICT LIABILITY OR OTHER CAUSE OF ACTION, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. + +Page 7 of 22 iPass Channel Partner Reseller Agreement 04.18.2018 iPass Confidential + +[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b- 2 of the Securities Exchange Act of 1934, as amended. + +Source: IPASS INC, 8-K, 12/3/2018 + + + + + +9.3 EXCLUSIONS. CHANNEL PARTNER'S PAYMENT OBLIGATIONS, LIABILITY FOR EARLY TERMINATION FEES OR CHARGES, BREACHES OF CONFIDENTIALITY BY EITHER PARTY, MISAPPROPRIATION OF INTELLECTUAL PROPERTY RIGHTS OF THE OTHER PARTY, AND THE PARTIES' INDEMNIFICATION OBLIGATIONS UNDER THIS AGREEMENT ARE EXCLUDED FROM THESE LIMITATIONS OF LIABILITY. 10. TERM AND TERMINATION 10.1 Term. This Agreement shall commence on the Effective Date and shall continue for a period of twelve (12) full calendar months ("Initial Term"). The Agreement shall automatically renew for successive one (1) year terms (each a "Renewal Term") unless either party provides the other party written notification of its intent to terminate the Agreement no later than sixty (60) days prior to the end of the then applicable term. Except in instances of termination of this Agreement in accordance with Sections 10.2 and 10.3 below, this Agreement shall continue, even if terminated, until the expiration of the last Business Entity Term. 10.2 Termination for Breach. If either party materially breaches this Agreement or terms or conditions within this Agreement, and such breach is not cured within thirty (30) days after written notice is given to the breaching party, then the other party may, by giving written notice to the breaching party, terminate this Agreement as of the end of such thirty (30) day notice period or such later date as is specified in such notice of termination 10.3 Termination in the Event of a Bankruptcy. If a party becomes insolvent or if bankruptcy or receivership proceedings are initiated by or against a party to this Agreement other than for the purposes of solvent reconstruction, the other party shall have the right to terminate this Agreement immediately for cause. 10.4 Economic Hardship. If iPass provides evidence that this Agreement is directly causing material financial losses ("Economic Hardship") to iPass, the Parties will work together to address and remedy such Economic Hardship. Should the Parties fail to reach a mutually agreeable solution within thirty (30) days after initial written notice to the Partner, iPass may terminate this agreement with ten (10) business days' written notice. In the event of such termination, Customer will only be liable for costs of current utilized subscriptions up to the time of the termination of the agreement. 10.5 Effects of Termination. Upon termination for reasons other than material breach by iPass, all fees and expenses (including but not limited to any minimum monthly commitments) to be paid by Channel Partner to iPass shall become due and payable immediately. All fees are non- cancellable and non-refundable. Termination of an order shall not terminate any other order or this Agreement absent a proactive termination of this Agreement in accordance with the applicable termination provisions herein. Upon expiration or termination of this Agreement, the order forms and the all licenses granted in the Agreement will immediately terminate, Channel Partner will immediately remove the Licensed Software and Documentation from its servers, return or destroy all Licensed Software and Documentation in its possession, and each party will return or destroy all copies of the other party's Confidential Information. Sections 3.4, 3.6, 6.1, 6.3, 7, 8.2, 8.3, 9, 12 and Exhibit A any terms of an Exhibit that should by its nature survive expiration or termination of this Agreement will survive. 11. PRIVACY 11.1 Any information that iPass collects from End Users, or that is made available by End Users to iPass hereunder, is subject to iPass' privacy policy located at http://www.ipass.com/privacy-policy/. This policy is expressly incorporated into and made a part of this Agreement. The Parties further agree that iPass may use End User emails to directly contact End Users for service support and updates. This is limited to providing assistance with service sign up, credential retrieval, troubleshooting network connectivity or application use, informational updates about hotspot additions/changes or planned outages (maintenance). + +Page 8 of 22 iPass Channel Partner Reseller Agreement 04.18.2018 iPass Confidential + +[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b- 2 of the Securities Exchange Act of 1934, as amended. + +Source: IPASS INC, 8-K, 12/3/2018 + + + + + +12. GENERAL TERMS 12.1 Neither party will be liable to the other for failure to fulfill its obligations caused by circumstances beyond its reasonable control. Such circumstances will include without limitation acts of God, strikes, lockouts, riots, terrorist attacks, acts of war, epidemics, civil disturbance, fire, communication line failures, power failures, earthquakes, floods or other natural disasters. In such event, the obligations of the parties (excluding payment obligations) will be temporarily suspended to such extent reasonable under the circumstances. 12.2 The relationship between the parties is that of independent contractors. 12.3 Channel Partner may not assign the Agreement, the use of any Licensed Software or Services or its rights and obligations under the Agreement without the prior written consent of iPass. Any such assignment is void. The Agreement shall be binding on the parties and all of their respective successors and assigns. 12.4 Any notices required or permitted hereunder will be given to the attention of the Legal Department at the address specified as the principal place of business of each company or at such other address as the parties specify in writing. Notice will be deemed given: upon personal delivery; if sent by confirmed facsimile, upon confirmation of receipt; if sent by overnight courier, upon receipt; or, if sent by certified or registered mail, postage prepaid, three (3) days after the date of mailing. Notwithstanding, all Business Entity notifications, including termination notifications, must be submitted though the iPass Portal. 12.5 If any provision of the Agreement is held to be invalid, illegal or unenforceable by any court or other competent tribunal then the remaining provisions of the Agreement shall remain in full force and effect. 12.6 The laws of California shall govern the construction and enforceability of the Agreement. The parties agree that any action arising under or relating to the Agreement or the Licensed Software or Services shall lie within the exclusive jurisdiction of the Courts located in San Mateo County, California, USA. The United Nations Convention on Contracts for the International Sale of Goods will not apply to the Agreement. 12.7 A person who is not a party to the Agreement has no rights to enforce any term of the Agreement but this does not affect any right or remedy of a third party which exists or is available under applicable law. 12.8 Channel Partner will comply with all applicable laws and regulations, including privacy, data protection, and exportation, regarding its activities related to this Agreement. 12.9 Channel Partner may not export or re-export the Licensed Software, any part thereof, to any country, person or entity subject to U.S. export restrictions. Channel Partner agrees not to export or re-export the Licensed Software: (i) to any country to which the U.S. has embargoed or restricted the export of goods or services, or to any national of any such country; (ii) wherever Channel Partner knows or has reason to know that the Licensed Software will be utilized in the design, development or production of nuclear, chemical or biological weapons; or (iii) to any entity who Channel Partner knows or has reason to know has been prohibited from participating in U.S. export transactions by any federal agency of the U.S. government. + +Page 9 of 22 iPass Channel Partner Reseller Agreement 04.18.2018 iPass Confidential + +[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b- 2 of the Securities Exchange Act of 1934, as amended. + +Source: IPASS INC, 8-K, 12/3/2018 + + + + + +12.10 Channel Partner represents that: (i) it is duly authorized to provide personal data to iPass; (ii) iPass, its affiliates and its subcontractors can process such data, and (iii) iPass may disclose such data to any affiliate and subcontractor for the purpose of: (a) providing Licensed Software and Services under the Agreement; (b) administering the Agreement; and/or (c) providing marketing and/or product information to Channel Partner through any medium including email. The Parties further agree that iPass may use End User emails to directly contact End Users for service support and updates. This is limited to providing assistance with service sign up, credential retrieval, troubleshooting network connectivity or application use, informational updates about hotspot additions/changes or planned outages (maintenance). 12.11 This Agreement constitutes the entire agreement between the parties concerning the parties with regard to the Licensed Software and Services provided hereunder. All purchase orders, prior agreements, proposals, representations and other understandings whether oral or written, are superseded in their entirety by this Agreement and any applicable order forms. A purchase order may not be used as an order form, and any pre-printed terms on any Channel Partner generated purchase order shall not apply. No alteration or modification of the Agreement will be valid unless made in writing and signed by the parties. In the event of a conflict between the Agreement and any terms and conditions in any other order form, the terms of this Agreement will control unless otherwise expressly stated. The person signing this Agreement represents that he/she is duly authorized to bind the company to the terms and conditions herein. 12.12 Without limiting any of the terms and conditions contained herein, Channel Partner will make available to iPass certain services in exchange for the fees and subject at all times to the terms and conditions referenced in Exhibit G, as same may be updated and amended from time to time. + +Page 10 of 22 iPass Channel Partner Reseller Agreement 04.18.2018 iPass Confidential + +[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b- 2 of the Securities Exchange Act of 1934, as amended. + +Source: IPASS INC, 8-K, 12/3/2018 + + + + + +EXHIBIT A DEFINITIONS "Access Point" means Internet access points to which a User connects via the Client Software. "Affiliate" means any entity which is controlled by, controls or is under common control with Channel Partner. For the purposes of this definition, control shall mean ownership of at least fifty percent (50%) of the outstanding voting equity interest. Channel Partner may appoint an Affiliate to perform resale services hereunder with written consent of iPass and in accordance with any iPass mandated contractual commitments and contractual documents. "Agreement" means this Channel Partner Reseller Agreement, including the Exhibits attached hereto, and orders placed pursuant to this Agreement. For clarity, each order constitutes a separate and distinct order for iPass Software and/or Services, and thus each order constitutes a separate contractual commitment. Each order incorporates the terms and conditions set forth herein. "Business Entity" means a corporation, partnership, or enterprise that acquires Services from Channel Partner for use by its employees and contractors. A Business Entity is not authorized to resell the Services to any third parties. 11. "Business Entity Minimum Monthly Commitment" means, for each Business Entity, a minimum monthly commitment of at least 250 Users, by Channel Partner for each Business Entity. iPass shall invoice Channel Partner on a monthly basis, the agreed upon price for the Services as set forth herein. If Channel Partner's total invoiced amount for the Services, for each Business Entity is less than the amount for the number of Users for the Business Entity's Minimum Monthly Commitment, iPass will invoice and Channel Partner will pay to iPass, the shortfall difference between the actual amount paid by Channel Partner to iPass and the amount for the number of Users for the Business Entity Minimum Monthly Commitment. "Business Entity Term" means, for each Business Entity, a period beginning at the beginning of the Business Entity Implementation Period and ending no less than twelve (12) months following the expiration of the Business Entity Implementation Period, as indicated in the order placed by Channel Partner for such Business Entity. Every Business Entity Term automatically renews for a period of no less than 12 months, unless otherwise agreed to in writing between the parties. "Certified iPass Engineer" means an employee of Channel Partner who has attended one RoamServer training session and successfully completed the following on-line training modules: iPass Orientation, Product Training, Technology Training, and Competitive Training. Successful completion means achieving a passing result on the on-line tests after each module. "Certified Help Desk Agent" means an employee of Channel Partner who has attended one RoamServer training session, one Help Desk training session, and one Broadband Support training session. "Certified Trained Sales Personnel" means an employee of Channel Partner who has successfully completed the following on-line training modules: iPass Orientation, Product Training, Technology Training, Competitive Training, and Sales Training. Successful completion means achieving a passing result on the on-line tests after each module. "Client Software" means the machine executable version(s) of the client software code, including any Updates thereto, that iPass provides Channel Partner hereunder to enable Channel Partner's End Users to use the Service. The Client Software currently consists of iPass' Open Mobile software as well as the iPassConnect software. "Confidential Information" means information maintained in confidence by a party, and which is marked as such, or information whether written or oral that by its nature would be to a reasonable person under the circumstances understood to be confidential or proprietary information of a party including but not limited to iPass' Software, Documentation, and the parties' product development and marketing plans, business methods and non-public financial and personnel dat "Device" means any machine, computer, smartphone or similar User apparatus on which Channel Partner or a Business Entity has installed the Client Software. "Documentation" means the standard published technical user manuals provided by iPass. + +Page 11 of 22 iPass Channel Partner Reseller Agreement 04.18.2018 iPass Confidential + +[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b- 2 of the Securities Exchange Act of 1934, as amended. + +Source: IPASS INC, 8-K, 12/3/2018 + + + + + +"Effective Date" means the date of last signature on this Agreement. "Enabled Devices" mean any device with the Channel Partner's app (iOS, Android, PC or Mac) which is enabled by Channel Partner to access the iPass services and also registered and enabled, by the Channel Partner to access Channel Partner's services. "End Users" or "User" means is any person who has an eligible subscriber ID that allows them to access the iPass Services and iPass Network. "End User Agreement" means a written agreement between Channel Partner and a Business Entity or an End User, containing terms and conditions at least as protective of iPass and its suppliers as the terms and conditions set forth in Exhibit E. "iPass Hosted Authentication Service" means a hosted, managed authentication service available within the iPass Portal and hosted by iPass. "iPass Portal" means the secure website accessible through http://www.ipass.com/ where Channel Partner may obtain information about iPass Services, including invoice, billing, ordering and account information, and submit technical support requests. "iPass Web Content" means the information and other materials/content provided to Channel Partner to use in developing Channel Partner's web site(s) or web pages to explain, promote and support the Service. "Licensed Software" "Software" means the Client Software and the Server Software and any Updates to the Client Software and the Server Software (if any). "Mobile Network" or "iPass Network" means iPass' multi-technology mobile access network which includes mobile broadband, Wi-Fi and Ethernet services. The iPass Network is subject to change by iPass upon notice to Partner, on condition that such changes do not materially degrade the network. The iPass Network does not include certain Wi-Fi services that are subject to supplier enforced restrictions. In addition, if any country is subject to a US embargo or other export restriction, it will not be deemed included in the foregoing list, the iPass Network will not be available from such country, and Customer agrees not to use the Licensed Software or the iPass Network in such country.. "Services" means the services and software provided by iPass as more fully described in Exhibit B attached hereto which allow access to the iPass Network. "Term" means the duration of the Agreement. "Update" means any bug fixes, patches or software updates for error corrections which iPass makes available to Channel Partner under this Agreement. + +Page 12 of 22 iPass Channel Partner Reseller Agreement 04.18.2018 iPass Confidential + +[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b- 2 of the Securities Exchange Act of 1934, as amended. + +Source: IPASS INC, 8-K, 12/3/2018 + + + + + +EXHIBIT B IPASS SERVICES iPass Services - includes the following services: iPass Mobile Services are delivered to End Users through a cloud-based platform (the "Platform") comprising software elements on the mobile device and available over the Internet. iPass´ Platform gives control over the definition and management of mobility services configured to a carrier's specific needs. This architecture gives an End User choice in access services and serves as a bridge to future functionality through use of extensible web services standards, while keeping the operational and financial burden on carriers low by not requiring them to purchase, deploy and manage on-premises infrastructure. iPass´ Platform is designed to provide Customer with reliability, flexibility, network security, policy enforcement, consolidated billing and scalability. The technology consists of the following principal components: i. Foundation Services. Provide the basic capabilities needed for a cloud-based platform, including the ability to manage users (add, remove, or change rights), authenticate users to access the platform, authorize access to particular functions, or track and audit use of the platform. ii. Operational Services. Are built on top of the iPass Foundation Services platform, enabling Customer to operate the various iPass´ market- facing offers, including user profile/configuration management, network directory management, account management, order management, usage management, support, billing and training. iii. Presentation Services. Impact how information is presented to users of the Platform, usually through a web based portal. Presentation Services include web presentation, data validation, access control (controlling who can see and enter what), and web analytics. iv. Client Services. Provide the core update functionality within the Platform, with the ability to update the iPass Client Software, configuration files, and network registries associated with it, and to receive the data that the client collects. v. Curation Services. Ability of iPass platform to collect information about Open Networks and be able to decode the hotspot information and automate steps to connect to that Network. vi. High-Availability and Scalable Authentication Architecture. iPass´ relationships with network service providers enables iPass to provide connectivity through multiple networks in over 100 countries on the Platform. As a result, the cloud-based Platform reduces the risk of service interruptions associated with depending on only one service provider. Furthermore, iPass´ geographically distributed transaction centers act as a unified and fault-tolerant system that provides scalable and highly-available user authentication and quality management information collection. Each point in the authentication process is designed with built-in redundancy and fail-over capabilities. + +Page 13 of 22 iPass Channel Partner Reseller Agreement 04.18.2018 iPass Confidential + +[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b- 2 of the Securities Exchange Act of 1934, as amended. + +Source: IPASS INC, 8-K, 12/3/2018 + + + + + +EXHIBIT C SERVICE FEES 1. Pricing. For each Business Entity where UTLD Pricing is elected, Channel Partner shall pay the fees based on the elected Business Entity User Base Package designated by Channel Partner for each order. The fees include the (i) use of the Mobility Management Services; (ii) unlimited iPass network access (except for certain premium in-flight Wi-Fi Services); and (iii) iPass Hosted Authentication Service. Additionally, no Business Entity Start Up Service Fees will be applied to new Business Entities electing the ULTD Pricing option. The fees for ULTD Pricing are defined in Table 1 below. The prices in Table 1 represent the transfer pricing from iPass to Channel Partner for ULTD Pricing. No further discounts are applied to this pricing. TABLE 1 + +Business Entity Committed Users Monthly Fee/User Minimum Monthly Fee + +[***] [***] [***] + +[***] [***] [***] + +[***] [***] [***] + +[***] [***] [***] + +[***] [***] [***] + +[***] [***] [***] + +[***] [***] [***] + +[***] [***] [***] + +[***] [***] [***] + +[***] [***] [***] + +[***] [***] [***] + +[***] [***] [***] + +[***] [***] [***] + +2. Channel Partner shall be charged a maximum rate of [***] per User ("Special Pricing") for all Business Entities signed up by Channel Partner during the first three (3) full calendar months following the Effective Date ("Introductory Period"). The "Special Pricing" is contingent on a minimum order size of [***] users. Following twelve months after the month, during the Introductory Period, a Business Entity was signed, each Business Entity will be charged according to Table 1 above. By way of example and for clarity: For a Business Entity order placed in the first month following the Effective Date and with [***] Users, Channel Partner would be invoiced at [***] per User per month from the first month following the Business Entity order and twelve (12) months thereafter. After the first twelve months, and thereafter, Channel Partner will be charged for [***] Users at the rate of [***] per User per month, pursuant to Table 1 above. + +Page 14 of 22 iPass Channel Partner Reseller Agreement 04.18.2018 iPass Confidential + +[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b- 2 of the Securities Exchange Act of 1934, as amended. + +Source: IPASS INC, 8-K, 12/3/2018 + + + + + +EXHIBIT D CUSTOMIZED SERVICES AND SUPPORT 1. SOFTWARE INSTALLATION SUPPORT . iPass personnel will work remotely with Channel Partner to assist the Channel Partner in the installation of the Server Software on Channel Partner's systems. iPass will provide the services indicated in Table 1 below in order to assist Channel Partner with implementation of Service for use by Channel Partner and End Users. Table 1-Start Up Services Service Access to iPass' expanding global network ¨ Automatic Phonebook updates ¨ Automatic Open Mobile updates ¨ RoamServer software updates ¨ Monthly Statement and Call Detail Records (CDRs) ¨ Help desk and deployment materials ¨ Monitoring for authentication failures ¨ Customized Open Mobile Client Software 1 Authentication realms (domains) 1 Technical Training Curriculum 1 Web-based session Sales and Marketing Training Curriculum 1 Web-based session Participation in open web conference training sessions scheduled by iPass ¨ Seats per year in open regional training scheduled by iPass 4 Access to self-paced training materials on iPass training portal ¨ 2. TECHNICAL SUPPORT 2.1 Definitions. Any capitalized terms used herein and not defined below are defined in the Agreement. (a) "First Level Technical Support" means taking End User calls, getting complete information from End Users regarding problems experienced by such End Users, testing the End User name and password, eliminating common End User errors, checking the network status page and escalating unresolved issues with written documentation detailing steps taken prior to escalation. (b) "Second Level Technical Support" means providing assistance to First Level Technical Support help desk for issues that cannot be resolved through First Level Technical Support. (c) "Third Level Technical Support" means providing technical assistance to Channel Partner's authorized Second Level Technical Support personnel for technical issues that cannot be resolved by Second Level Technical Support. 2.2 First Level Technical Support and Second Level Technical Support. Channel Partner or Business Entity will be responsible for providing its End Users First Level Technical Support. Channel Partner will be responsible for providing End Users Second Level Technical Support. Second Level Technical Support personnel who have received training regarding the Service and the Software from iPass pursuant to Section 2 of the Agreement will be authorized to contact the applicable Third Level Technical Support centers at iPass to resolve any problems that cannot be resolved by First Level Technical Support or Second Level Technical Support. Channel Partner may change its authorized contacts for Third Level Technical Support at any time upon written notice to iPass so long as any new authorized contacts have completed the requisite iPass training. 2.3 Third Level Technical Support. iPass will provide Channel Partner with Third Level Technical Support in accordance with iPass standard procedures. iPass will only be obligated to provide Third Level Technical Support for the Software if Channel Partner has installed all Updates released by iPass which fix errors in the Software in accordance with Section 2.4 below. Channel Partner must have its password and id available in order to access and submit a request, absent which iPass will have no obligation to provide Channel Partner with Third Level Technical Support. + +Page 15 of 22 iPass Channel Partner Reseller Agreement 04.18.2018 iPass Confidential + +[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b- 2 of the Securities Exchange Act of 1934, as amended. + +Source: IPASS INC, 8-K, 12/3/2018 + + + + + +2.4 Software Updates. iPass will notify Channel Partner regarding the availability of Updates and make any applicable Updates available to Channel Partner free of charge through the iPass portal and/or automatic downloads. Unless an Update has been delivered to Channel Partner as a patch to correct an urgent problem (in which case distribution to End Users will be immediate upon receipt), Channel Partner will distribute to its End Users all Updates within thirty (30) days of such Update being made available to Channel Partner. Failure to implement Updates may subject Channel Partner to various fees, including end of life fees, in iPass' sole discretion. Further iPass may implement end of life fees upon reasonable notice to Channel Partner. 2.5 Requested Changes. Should Channel Partner desire that any changes be made to the Software or implemented in the Service, Channel Partner may submit a written request to iPass detailing the nature of the requested change. iPass agrees to analyze such proposed changes in good faith and respond in writing detailing the feasibility, expense, and anticipated schedule for implementing such change; provided that nothing hereunder obligates iPass to agree to make such change. Should the parties so agree in writing, iPass will make such change to the Software or the Service in accordance with the terms mutually agreed upon by the parties. 3. TRAINING. iPass will perform training services as agreed upon by the parties and in accordance with the terms of this Agreement. 4. SERVICE LEVELS AND ESCALATIONS 4.1 Additional Definitions. "Availability" means End Users having access to, full functionality and usage of the service. "Service Levels" means the minimum service levels to be achieved by iPass in relation to iPass' performance of its obligations as set out herein. "Severity Level" means the impact of or nature of a problem as set forth herein. "Response" means the iPass' acknowledgment of its receipt of a Trouble Report from Channel Partner. 4.2 iPass Support Services. iPass will provide Help Desk to Help Desk support to Channel Partner on components of the iPass Service e.g. the iPass Open Mobile Portal, Hosted Authentication Infrastructure. 4.3 Support Process The following support process shall be followed by the Channel Partner HELPDESK to report or escalate issues to the iPass Support Teams: a. Issue Identified to Customer Help Desk (i) The End User contacts the Channel Partner Help Desk. (ii) Channel Partner Helpdesk follows troubleshooting guide and reviews information in the iPass online knowledge base (help.ipass.com) and determines if internal resources can resolve the issue. (iii) If internal resources cannot resolve the issue, then Channel Partner Help Desk contacts iPass Customer Care via web-based support request. b. Entering a web-based Support Request (i) Access the Portal via url: https://openmobile.ipass.com (ii) Enter your username and password and click login. (iii) Access is available on the Dashboard tab. (iv) Click on the "Manage Tickets" link. (v) On the "Cases" tab select the "Create New Case" button or dropdown link (vi) Enter the appropriate information as required. Channel Partner Helpdesk shall provide call-back details (contact name and phone number) in all web-based support requests. + +Page 16 of 22 iPass Channel Partner Reseller Agreement 04.18.2018 iPass Confidential + +[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b- 2 of the Securities Exchange Act of 1934, as amended. + +Source: IPASS INC, 8-K, 12/3/2018 + + + + + +c. Ticket Requirements At a minimum all Severity One and Severity Two problem reports shall contain the following in order to expedite investigation and verification of the problem: (i) Username and Description of observed behavior. (ii) Debug Logs if available. (iii) Steps to reproduce. (iv) Operating environment (Operating system, language, software version, profile number and hardware, as applicable.) (v) Dates / times of transaction failures. (vi) Name of network attempted. iPass may request additional information for verification of a reported problem as necessary. d. Customer Care Hotline For Severity One issues, iPass recommends that opening a web-based support request be followed by a phone call to iPass at one of the following Severity One Customer Care numbers: Inside the United States: +1-877-464-7277 Outside the United States: +1 650-232-4300 Dialing within Europe: +44 20 7010 8344 Phone numbers are available 24 hours a day, 7 seven days a week. Please note that in order to safeguard customers against unauthorized service activity, iPass will require that callers authenticate their credentials via the web based ticketing system prior to any action by iPass. All change requests MUST be in writing. In order to ensure that tickets are handled in order of receipt, by priority, calls of a nature which are not Severity One will be ticketed and placed in queue to be handled in order of receipt, by severity. 4.4 Service Levels (a) Support Request Response - For each Severity Level, iPass shall provide the following response Service Levels: For Channel Partner Helpdesk Support Requests submitted in accordance with the process defined herein. Problem Severity Response Service Level Severity One Targeted Response Time: Issues will receive a response from iPass within fifteen (15) minutes (1 hour on weekends and local public holidays) after submitting a Severity One support case followed by a phone call to iPass. Please note Severity One issues reported via a support case only will be responded to within 1 hour. Severity Two Targeted Response Time: Issues will receive a response from iPass within 8 hours of receipt of the request (except weekends and local public holidays.) Severity Three Targeted Response Time: Issues will receive a response from iPass within 12 hours of receipt of the request (except weekends and local public holidays.) (b) Problem Verification. iPass and Channel Partner will make reasonable efforts to verify any reported problem as soon as it is reported as well as any follow-up information that may be required. (c) Update Intervals. iPass will make reasonable efforts to keep Channel Partner's Second Level Technical Support personnel informed of the latest status on any problem submitted. In the event Channel Partner's Second Level Technical Support personnel requires more frequent updates, then these will be discussed and mutually agreed upon and will depend on the severity and complexity of the problem. + +Page 17 of 22 iPass Channel Partner Reseller Agreement 04.18.2018 iPass Confidential + +[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b- 2 of the Securities Exchange Act of 1934, as amended. + +Source: IPASS INC, 8-K, 12/3/2018 + + + + + +(d) Severity Reclassification. To ensure that severe problems receive highest priority, iPass may modify a ticket submitted as Severity One issue if it clearly does not meet the criteria for Severity One. 4.5 iPass Support Escalation Process (a) When to Escalate an Issue (i) If iPass fails to respond within the prescribed service level response time, the Channel Partner Help Desk is encouraged to escalate the issue to the Escalation Contact in the respective time zone (see escalation contacts below.) (ii) If the iPass Customer Care Representative and the Channel Partner Help Desk cannot agree on an action plan to resolve an issue (Severity One, Two or Three), then the iPass Customer Care Representative and the Channel Partner Help Desk are encouraged to escalate the issue to the Director of Customer Care. (iii) Once a plan has been agreed, iPass will work to resolve the issue. If the Channel Partner Help Desk is not satisfied with the progress that is being made to resolve an issue, they are encouraged to contact the Director of Customer Care. (b) How to Escalate an Issue (i) All escalations should be in writing (to the e-mail address listed below) or by phone followed up with a summary from Channel Partner 's Help Desk. (ii) Written documentation should outline the original issue and progress to date. It should also include impact to the customer and reason for the escalation. (c) Response to Escalation (i) The Director of Customer Care will respond upon receipt to any escalations. (ii) Escalations will take priority over any issue of the same severity level. Customer Care Escalation Contact Location/Time Zone London, UK (GMT) Regional Contact Richard Sabbarton email rsabbarton@ipass.com Office Phone +44 20 7010 8319 Location/Time Zone Redwood Shores, US (PST) Regional Contact Saritha Padubidri email spadubid@ipass.com Office Phone + 1 650 232 4127 Location/Time Zone Bangalore, IN (IST) Regional Contact Sujith Varijakshan email svarijakshan@ipass.com Office Phone +91 80 41380976 ESCALATION Manager - Director of Support Escalation Manager Alan Ridgewell email aridgewell@ipass.com Office Phone +44 20 7010 8304 + +Page 18 of 22 iPass Channel Partner Reseller Agreement 04.18.2018 iPass Confidential + +[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b- 2 of the Securities Exchange Act of 1934, as amended. + +Source: IPASS INC, 8-K, 12/3/2018 + + + + + +EXHIBIT E MINIMUM END USER TERMS Channel Partner when used herein has the same meaning as in the Agreement. Channel Partner should change the word "Channel Partner" herein to its name when drafting End User agreements. "You" referred to herein refers to the End User(s). iPass as referenced herein shall mean iPass Inc. Capitalized terms used herein shall have the same meaning ascribed to them in the Agreement. 1. By its very nature, the Internet contains offensive and/or harmful material, in some cases under descriptions that have been mislabeled or are otherwise deceptive. Neither Channel Partner, iPass nor their suppliers shall be responsible for any damages suffered by any person as a result of obtaining Internet access. Access to the Internet is provided solely on an "AS IS" basis. Neither Channel Partner, iPass, nor its suppliers warrant, nor do they assume responsibility for, any consequences suffered by any person as a result of Internet access including, without limitation, those suffered as a result of accessing Internet information and content, such as, by way of example only, the possibility of contracting computer viruses, accessing information with offensive, inaccurate or inappropriate content. Channel Partner, iPass and its suppliers exercise no control whatsoever over the content of the information passing through their systems. 2. You agree to be bound by the usage policies of iPass including, by way of example, its Privacy Policy. You acknowledge and agree that iPass may disclose your usage data to Channel Partner and other third parties as detailed in iPass' Privacy Policy (see http:www.ipass.com). You accept that certain uses of your data are necessary to enable provision of the Services to you and accordingly that if you withdraw your consent for iPass to use your data as is detailed in its Privacy Policy the supply of the Service to you may have to be terminated. You acknowledge and agree that all End Users must exercise their own due diligence before relying on any information available on the Internet, and must determine that they have all necessary rights to copy, publish or otherwise distribute any such information available on the Internet under copyright and other applicable laws. 3. NOTWITHSTANDING ANYTHING ELSE IN THIS AGREEMENT, TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, SERVICES ARE PROVIDED ON AN "AS IS" AND "AS AVAILABLE" BASIS, AND CHANNEL PARTNER, IPASS AND THEIR SUPPLIERS DISCLAIM AND MAKE NO REPRESENTATIONS OR WARRANTIES AND THERE ARE NO CONDITIONS OF ANY KIND, EITHER EXPRESS, IMPLIED OR STATUTORY, INCLUDING BUT NOT LIMITED TO ANY WARRANTIES OF NON-INTERFERENCE, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR USE, OR ARISING FROM COURSE OF DEALING OR USAGE OF TRADE. YOU ASSUME ALL RESPONSIBILITY AND RISK FOR USE OF SERVICES. ANY STATEMENTS MADE IN ANY PACKAGING, MANUALS, WRITTEN OR ELECTRONIC DOCUMENTS, OR BY ANY CHANNEL PARTNER OR IPASS EMPLOYEES, REPRESENTATIVES, OR AGENTS, ARE PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND NOT AS REPRESENTATIONS OR WARRANTIES OF ANY KIND. CHANNEL PARTNER, IPASS AND THEIR SUPPLIERS DO NOT WARRANT THAT SERVICES WILL BE UNINTERRUPTED, ERROR FREE, OR FREE FROM SERVICE DEGRADATION, OR THAT ANY INFORMATION, SOFTWARE, OR OTHER MATERIAL ACCESSIBLE ON THE SERVICES ARE FREE FROM VIRUSES, WORMS, TROJAN HORSES, OR OTHER CODE THAT MANIFESTS CONTAMINATING, INTERFERING, OR DESTRUCTIVE PROPERTIES. CHANNEL PARTNER, IPASS AND THEIR SUUPLIERS CANNOT AND DO NOT GUARANTEE THE SECURITY OR INTEGRITY OF DATA TRANSMISSION OR STORAGE, OR THAT VIRUSES, WORMS, TROJAN HORSES, OR OTHER CODE THAT MANIFESTS CONTAMINATING OR DESTRUCTIVE PROPERTIES WILL BE DETECTED OR REMEDIATED BY SERVICES. SERVICES ARE ONLY AVAILABLE WITHIN THE COVERAGE AREA OF THE IPASS NETWORK, WHICH IS SUBJECT TO CHANGE. YOU ACKNOWLEDGE THAT SERVICES MAY BE TEMPORARILY UNAVAILABLE FOR MAINTENANCE, EQUIPMENT MODIFICATIONS, OR UPGRADES, AND FOR OTHER REASONS WITHIN AND WITHOUT THE DIRECT CONTROL OF IPASS. 4. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, IN NO EVENT SHALL CHANNEL PARTNER, IPASS OR ITS SUPPLIERS BE LIABLE FOR ANY SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, OR FOR INTERRUPTED COMMUNICATIONS, LOST DATA OR LOST PROFITS, ARISING OUT OF OR IN CONNECTION WITH THE SERVICE. + +Page 19 of 22 iPass Channel Partner Reseller Agreement 04.18.2018 iPass Confidential + +[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b- 2 of the Securities Exchange Act of 1934, as amended. + +Source: IPASS INC, 8-K, 12/3/2018 + + + + + +5. You may not use the Services to take any actions or make any statements that, by way of example only: (a) infringe on any third party's copyright, patent, trademark, trade secret or other proprietary rights or rights of publicity or privacy; (b) violate any applicable law, statute, ordinance or regulation (including without limitation those regarding export control); (c) are defamatory, trade libelous or unlawfully threatening; (d) are pornographic or obscene; (e) violate any laws regarding unfair competition, antidiscrimination or false advertising, (f) result in the distribution of viruses, Trojan horses, worms, time bombs, cancelbots, chain letters or other similar harmful or deleterious programming routines, or (g) result in the unauthorized entry to any other machine accessible via the network. You may not use the Services to distribute any bulk unsolicited emails or otherwise cause an excessive or disproportionate load on Channel Partner's, iPass' or their suppliers' infrastructure. Any access to other networks connected to Channel Partner's, iPass' and its suppliers' networks must comply with the rules appropriate for such networks. Violation of the foregoing may result in termination of access. Given the current regulatory and technical environment you should not have an expectation of privacy in your online activities 6. iPass and its suppliers shall be deemed to be third-party beneficiaries of this agreement, with the right to enforce the terms of this agreement. You agree that this Agreement is expressly for the benefit of Channel Partner, iPass and its suppliers and may be enforced by them. 7. You may not resell or redistribute any of the Services to any third parties. 8. Subject to the terms and conditions of this agreement, Channel Partner grants to you a royalty-free, non-exclusive, non-transferable, limited license right exercisable solely during the term of this agreement to: (1) reproduce, exactly as provided by Channel Partner, object code copies of the Client Software, as needed for distribution to your End Users the iPass Software; and to install and use the iPass Licensed Software. You acknowledge that the Licensed Software contains the valuable information of iPass and its suppliers, and agree not to cause or permit the modification, reverse engineering, translation, disassembly, or decompilation of, or otherwise to attempt to derive the source code of such Licensed Software, whether in whole or in part (except to the extent permitted by applicable law). You will not obfuscate, alter or remove any copyright, trademark or other proprietary notice or legend on or in the Licensed Software and associated Documentation and will include all such markings in all copies of such materials. 9. The Services may be suspended or terminated if you breach these terms. Any breach of these terms by your End Users shall be deemed a breach by you. 10. This Agreement shall terminate upon termination of the agreement between Channel Partner and iPass. + +Page 20 of 22 iPass Channel Partner Reseller Agreement 04.18.2018 iPass Confidential + +[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b- 2 of the Securities Exchange Act of 1934, as amended. + +Source: IPASS INC, 8-K, 12/3/2018 + + + + + +EXHIBIT F IPASS MARKS + +iPass® iPass Open Mobile™ iPass Open Mobile Exchange™ iPass OMX™ iPass ULTD + +Page 21 of 22 iPass Channel Partner Reseller Agreement 04.18.2018 iPass Confidential + +[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b- 2 of the Securities Exchange Act of 1934, as amended. + +Source: IPASS INC, 8-K, 12/3/2018 + + + + + +EXHIBIT G PARATEUM SERVICES Subject to the terms and conditions below, Channel Partner (Pareteum Corporation) will provide on a non-exclusive basis the following services to iPass for resale to iPass' customers: Managed Services Platform and Global Cloud Mobility Platform (collectively, the "Pareteum Services"). Channel Partner (Pareteum Corporation) and iPass shall mutually agree upon the terms and conditions (which will include, without limitation, the scope and geography where the Pareteum Services may be resold, fees and support service and related user terms) upon the earlier to occur of: (i) iPass' first proposed resale of the Pareteum Services to one of its customers; or (ii) within ninety (90) days from the Effective Date. Once the parties have mutually agreed upon the foregoing terms and conditions, the parties will amend this Exhibit G to reflect the terms by which iPass may resell the Pareteum Services. + +Page 22 of 22 iPass Channel Partner Reseller Agreement 04.18.2018 iPass Confidential + +[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b- 2 of the Securities Exchange Act of 1934, as amended. + +Source: IPASS INC, 8-K, 12/3/2018 \ No newline at end of file diff --git a/full_contract_txt/JINGWEIINTERNATIONALLTD_10_04_2007-EX-10.7-INTELLECTUAL PROPERTY AGREEMENT.txt b/full_contract_txt/JINGWEIINTERNATIONALLTD_10_04_2007-EX-10.7-INTELLECTUAL PROPERTY AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..c3bcd415ca9cfec8686495a4e53d39880d9e7a53 --- /dev/null +++ b/full_contract_txt/JINGWEIINTERNATIONALLTD_10_04_2007-EX-10.7-INTELLECTUAL PROPERTY AGREEMENT.txt @@ -0,0 +1,177 @@ +INTELLECTUAL PROPERTY AGREEMENT + +This Intellectual Property Agreement (this "Agreement") is entered into in ShenZhen on February 08, 2007 between the following two parties: + +Party A: JingWei HengTong Technology (ShenZhen) Co., Ltd. (经纬恒通科技（深圳）有限公司 ) Registration Address: Room 1605 B,Tianan Hi-tech Plaza Tower A,Tian An Cyber Park,Futian District,Shenzhen,China + +Party B: ShenZhen JingWei Communication Co., Ltd.(深圳经纬通信技术有限公司) Registration Address: Tianxiang Building Block A 13th, Tian An Cyber Park, Futian District, Shenzhen. + +WHEREAS: + +1. Party A, a wholly foreign-owned enterprise incorporated under the laws of the People's Republic of China (the "PRC"), which has the right of the intellectual property (including but not limited to Trademark, the Ownership of Consumer Data Base, Software Copyright and License) specified in the Appendix I of this Agreement (the "intellectual property"). + +2. Party B is a limited liability company duly incorporated and validly existing under the PRC law, which is licensed by relevant government authorities to engage in the internet information service value-added telecommunication service; + +3. Party A agrees to license the non- exclusive right to use the intellectual property pursuant to this Agreement to Party B in accordance with the terms and conditions set forth herein and Party B agrees to accept the right to use the intellectual property on the same terms and conditions set forth herein. + +NOW THEREFORE, both Parties agree as follows: + +1. Grant of License + +1.1 The Intellectual Property + +1.1.1 Upon the terms and conditions hereinafter set forth, Party A hereby agrees to grant and Party B hereby agree to accept the right to use the intellectual property in PRC. The license under this Agreement is a non-exclusive, non-assignable and non-transferable license. + +1.1.2 Party A owns the sole and exclusive right of the intellectual property, including any improvement, upgrades and derived products, no matter whether such products are created by Party A or Party B. The right and obligation under 1.1.2 of this article shall survive upon termination of this Agreement. + +1.2 Scope + +Intellectual Property Agreement 1 + + + + + +1.2.1 The Intellectual Property granted to Party B shall only be used to the scope of Party B's Business operated by Party B. Party B shall not sub-license the Intellectual Property to others or use the Intellectual Property in the third party's training, business share, lease without the consent from Party A, unless there are opposite stipulations in this Agreement. + +1.2.2 The use right granted under this Agreement is only valid in the PRC. Party B agrees not to directly or indirectly use or authorize to use the Intellectual Property in the other regions. + +2. Terms of Payment: Party B agrees to pay Party A the Intellectual Property License fees (the "License Fees") and the specified amount of the license fees and the form of payment are set forth in Appendix 2. Party A has the right to exempt the obligation of payment or adjust the amount of the License Fees set forth in Appendix 2 according to the actual circumstances from time to time. + +3. Party A's Rights and Protection of the Party A's Rights + +3.1 Party B agrees, during the term of this Agreement, or thereafter, not to query the copyright or any rights of Party A in connection with the Intellectual Property, and conduct any actions that is deemed by Party A as harmful to its rights or license. + +3.2 Party B agrees to provide necessary assistances to help Party A to protect the rights of Intellectual Property. Party A may participate the lawsuits related to the claims of compensation with its own desire, on behalf of itself, Party B or both Parties, once any third party claims the compensation in connection with the Intellectual Property of Party A. If any third party infringes any right of Intellectual Property, Party B shall notify Party A immediately in written of such infringements within the scope that it knows, and only Party A has the right to take actions against such infringements. + +3.3 Party B agrees to use the Intellectual Property only pursuant to this Agreement and not to use the Intellectual Property by manner of deceit, misleading or others manners that are deemed by Party A as harmful to the Intellectual Property or the reputation of Party A. + +4. Confidentiality + +4.1 Party B shall protect and maintain the confidentiality of any and all confidential data and information acknowledged or received by Party B from Party A (collectively the "Confidential Information"). Upon termination of this Agreement, Party B shall return Confidential Information to Party A or destroy it itself and delete Confidential Information from any electronic devices and cease to use them as required by Party A. Party B shall not disclose, grant or transfer any Confidential Information to any third party and will not use the Confidential Information without Party A's written consent. + +4.2 Both Parties agree that the Article 4 shall survive whatever this agreement is amended, rescinded or terminated. + +5. Representations and Warranties + +5.1 Party A represents and warrants as follows: + +Intellectual Property Agreement 2 + + + + + +5.1.1 Party A is a wholly foreign-owned enterprise duly incorporated and validly existing under the laws of the PRC. + +5.1.2 Party A, subject to its company power and business scope, has taken necessary company actions to get the proper authorization and the consents or approvals (if necessary) from other third party or governments, without breaching any restricts of the laws and company that binds or affects Party A to execute and perform this Agreement. + +5.1.3 The Agreement will constitute a legal, valid and binding agreement of Party A and will be enforceable against Party A in accordance with its terms upon its execution. + +5.1.4 Party A owned copyright or license of the Intellectual Property. + +5.2 Party B represents and warrants as follows: + +5.2.1 Party B is a company duly registered and validly existing under the laws of the PRC and is licensed by relevant government authorities to engage in the internet information service value-added telecommunication service. + +5.2.2 Party B, subject to its company power and business scope, has taken necessary company actions to get the proper authorization and the consents or approvals (if necessary) from other third party or governments, without breaching any restricts of the laws and company that binds or affects Party B to execute and perform this Agreement. + +5.2.3 The Agreement will constitute a legal, valid and binding agreement of Party B and will be enforceable against Party B in accordance with its terms upon its execution. + +6. Effective Date and Term + +6.1 This Agreement has been duly executed as of the date first set forth above and shall be effective simultaneously. The term of this Agreement is five (5) years unless the early termination in accordance with this Agreement. However, Party A and Party B shall review this Agreement every six (6) months to determine whether any amendment or supplement to the Agreement is necessary by considering the circumstances after the executing of this Agreement. + +6.2 This Agreement may be extended by both Parties in writing upon the expiration of this Agreement. The term of extension will be decided by the consultation of both Parties. + +7. Termination + +7.1 Early Termination + +Without prejudice to any legal or other rights or remedies of the party who asks for termination of this Agreement, any Party has the right to terminate this Agreement immediately with written notice to the other party in the event the other party materially breaches this Agreement including but not limited to the obligation under Article 3 of this Agreement and fails to cure its breach within thirty (30) days from the date it receives written notice of its breach from the non-breaching party. During the term of this Agreement, Party A may terminate this Agreement at any time with a written notice to Party B 30 days before such termination. + +Intellectual Property Agreement 3 + + + + + +7.2 Effect of Termination or Expiration + +Upon and after the expiration or termination of this Agreement, Party B shall not have all rights granted pursuant to this Agreement and will refrain from further direct or indirect use of the Intellectual Property. + +8. Force Majeure + +8.1 Force Majeure, which includes but not limited to acts of governments, acts of nature, fire, explosion, typhoon, flood, earthquake, tide, lightning or war, means any event that is beyond the party's reasonable control and cannot be prevented with reasonable care of the affected party. However, any shortage of credit, capital or finance shall not be regarded as an event beyond the party's reasonable control. The party affected by Force Majeure and seeks for the exemption from performing the obligations under this Agreement shall inform the other party of such exemption and any action taken by it for performing this Agreement. + +8.2 In the event that the affected party is delayed in or prevented from performing its obligations under this Agreement by Force Majeure, only within the scope of such delay or prevention, the affected party will not be responsible for any damage by reason of such a failure or delay of performance. The affected party shall take appropriate manners to minimize or remove the effects of Force Majeure and attempt to resume the performance of the obligations delayed or prevented by the event of Force Majeure. Once the event of Force Majeure is removed, both parties agree to resume the performance of this Agreement with their best efforts. + +9. Settlement of Disputes: Both Parties shall strive to settle any dispute arising from the interpretation or performance through friendly consultation. In case no settlement can be reached through consultation within 30 days after one party ask for consultation, each party can submit such matter to China International Economic and Trade Arbitration Commission (the "CIETAC") in accordance with its rules, and the arbitration proceedings shall be conducted in Chinese and shall take place in Beijing. The arbitration award shall be final and conclusive and binding upon the parties and shall be enforceable in accordance with its terms. + +10. Notices: Notices or other communications required to be given by any party pursuant to this Agreement shall be written in English and Chinese and delivered personally or sent by registered mail or postage prepaid mail or by a recognized courier service or by facsimile transmission to the address of relevant each party or both parties set forth below or other address of the party or of the other addressees specified by such party from time to time. The date when the notice is deemed to be duly served shall be determined as the follows: (a) a notice delivered personally is deemed duly served upon the delivery; (b) a notice sent by mail is deemed duly served the tenth (10th) day after the date when the air registered mail with postage prepaid has been sent out (as is shown on the postmark), or the fourth (4th) day after the delivery date to the internationally recognized courier service agency; and (c) a notice sent by facsimile transmission is deemed duly served upon the receipt time as is shown on the transmission confirmation of relevant documents. Intellectual Property Agreement 4 + + + + + + Party A: JingWei HengTong Technology (ShenZhen) Co., Ltd. Address: Room 1605 B,Tianan Hi-tech Plaza Tower A,Tian An Cyber Park,Futian District,Shenzhen Attn: Ms. Wei Zhang Fax: 86-0755-82924449 Tel: 86-0755-82924488 + +Party B: ShenZhen JingWei Communication Co., Ltd. Address: Tianxiang Building Block A 13th, Tian An Cyber Park, Futian District, Shenzhen. Attn: Mr. Wei Li Fax: 86-0755-82924449 Tel: 86-0755-82924488 + +11. Assignment or Sublicense: This Agreement and all the rights and obligations of Party B hereunder shall not be assigned, pledged, sublicensed without the prior written consent of Party A. + +12. Applicable Law: The validity, implementation and interpretation of this Agreement shall be governed by the laws of PRC. + +13. Amendment and Supplement: Any amendment and supplement of this Agreement shall be made by both parties in writing. The amendment and supplement duly executed by both parties shall be deemed as a part of this Agreement and shall have the same legal effect as this Agreement. + +14. Severability: If any clause hereof is judged as invalid or non-enforceable according to relevant laws, such clause shall be deemed invalid only within the applicable area of the Laws and without affecting other clauses hereof in any way. + +15. Appendices: The Appendices referred to in this Agreement are an integral part of this Agreement and have the same legal effect as this Agreement. + +IN WITNESS THEREOF Both Parties hereto have caused this Agreement to be duly executed on their behalf by a duly authorized representative as of the date first set forth above. + +Party A: JingWei HengTong Technology (ShenZhen) Co., Ltd. Legal Representative/Authorized Representative: Seal: + +Party B: ShenZhen JingWei Communication Co., Ltd. Legal Representative/Authorized Representative: Seal: + +5 + + + + + +Appendix 1 + +List of Intellectual property + +Item Certificate Name Certificate number Issue date + +1 Product Registration Certificate (Operation analysisV1.0) (经篛分析炑件V1.0) 深 DGY - 2003 - 0164 2003.3.6 + +2 Product Registration Certificate (NGNbilling and operationV2.1)(NGN综合篛帐和瑟狇炑件V2.1) 深 DGY - 2005 - 0030 2005.1.27 + +3 Product Registration Certificate (YL-2000Telecom operation billingV3.X)(宇恧YL-2000电信业务瑟狇帐务系统V3.X) 深 DGY - 2001 - 0177 2001.6.15 + +4 Product Registration Certificate (YLDC-2000multiserver data collectionV2.10)(YLDC-2000羬机渹椺炑件V2.10) 深 DGY - 2003 - 0163 2003.3.6 + +5 Product Registration Certificate (YL-2001major account managementV2.0)(YL-2001大客户管理炑件V2.0) 深 DGY - 2003 - 0105 2003.3.6 + +6 Product Registration Certificate (Data ware housingV1.0)(新宇恧炑件数据仓库炑件V1.0) 深 DGY - 2006 - 0780 2006.3.16 + +7 Product Registration Certificate (GT800-OBSSoperationV3.0)新宇恧GT800-OBSS篛帐炑件V3.0) 深 DGY - 2006 - 0363 2006.4.29 + +8 software ownership certificate (NGNopeation and billingV2.1)(NGN综合篛帐和瑟狇炑件V2.1) 2005SR02400 2005.03.03 + +9 software ownership certificate (telecom operation strategic analysisV1.0)(电信决策支持系统V1.0) 2004SR03050 2004.04.08 + +List of Consumer Data Acquisition and Management Contracts + + Contract Contract Partner 1 Consumer Data Acquisition and Management Contract ShenZhen HongTian Hi-Tech Development Co, Ltd 深圳市宏天攨科技发展有榰公司 2 Consumer Data Acquisition and Management Contract ShenZhen Doubi Digital Tech Co, Ltd 深圳市多比数码技术有榰公司 3 Consumer Data Acquisition and Management Contract GuangDong FengDa Hi-Tech Co, Ltd 广东丰灂攨科技有榰公司 Intellectual Property Agreement 6 + + + + + +Appendix 2 Account and payment method of License Fee + +Party B should pay for All Intellectual Property RMB 1,000,000 per year to Party A as license fee. Party B shall pay the license fee to the account designated by Party A before December 31 each year. Party A has the right to determine whether or not to exempt the Party B's obligation to pay license fee at its discretion. Intellectual Property Agreement 7 \ No newline at end of file diff --git a/full_contract_txt/JOINTCORP_09_19_2014-EX-10.15-FRANCHISE AGREEMENT.txt b/full_contract_txt/JOINTCORP_09_19_2014-EX-10.15-FRANCHISE AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..5c2fa88e2aae5892b54dd0ca03c79b55a75efb62 --- /dev/null +++ b/full_contract_txt/JOINTCORP_09_19_2014-EX-10.15-FRANCHISE AGREEMENT.txt @@ -0,0 +1,653 @@ +Exhibit 10.15 + + THE JOINT CORP. FRANCHISE AGREEMENT + + + + + + + + + + TABLE OF CONTENTS SECTION PAGE 1. INTRODUCTION 1 2. GRANT OF FRANCHISE 2 2.1 Term; Reference to Exhibit 1 2 2.2 Full Term Performance 3 2.3 Management Agreement with Professional Corporation - Non-Licensed Franchisees 3 2.4 Waiver of Management Agreement 4 2.5 Selection of Premises; No Protected Territory; Reservation of Rights 5 2.6 Renewal of Franchise 5 2.7 Personal Guaranty by Principal Owners; Reference to Exhibit 2 6 3. DEVELOPMENT AND OPENING OF THE FRANCHISE 6 3.1 Site Approval; Lease or Purchase of Premises; Opening Timeline; Reference to Exhibit 3 6 3.2 Prototype and Construction Plans and Specifications 7 3.3 Development of the Franchise 7 3.4 Computer System 8 3.5 Equipment, Furniture, Fixtures, Furnishings and Signs 9 3.6 Franchise Opening 9 4. TRAINING 9 4.1 General Manager 9 4.2 Training 10 5. GUIDANCE; OPERATIONS MANUAL 11 5.1 Guidance and Assistance 11 5.2 Operations Manual 12 5.3 Modifications to System 12 5.4 Advisory Councils 12 6. FEES AND COSTS 13 6.1 Initial Franchise Fee 13 6.2 Royalty Fee 13 6.3 Regional and National Advertising Fee 14 6.4 Local Advertising 14 6.5 Grand Opening Costs 15 6.6 Software and Programming Fees 15 6.7 Relocation Fee 15 6.8 Late Payments 15 6.9 Electronic Funds Transfer 16 6.10 Application of Payments 16 6.11 Modification of Payments 17 6.12 Non-Compliance Charge 17 THE JOINT…THE CHIROPRACTIC PLACE™ FRANCHISE AGREEMENT + +i + + + + + + + + 7. MARKS 17 7.1 Ownership and Goodwill of Marks 18 7.2 Limitations on Franchise Owner's Use of Marks 18 7.3 Notification of Infringements and Claims 18 7.4 Discontinuance of Use of Marks 18 7.5 Indemnification of Franchise Owner 18 8. RELATIONSHIP OF THE PARTIES; INDEMNIFICATION 19 8.1 Independent Contractor; No Fiduciary Relationship 19 8.2 No Liability, No Warranties 19 8.3 Indemnification 19 9. CONFIDENTIAL INFORMATION; NON-COMPETITION 20 9.1 Types of Confidential Information 20 9.2 Non-Disclosure Agreement 21 9.3 Non-Competition Agreement 21 10. THE JOINT CORP. FRANCHISE OPERATING STANDARDS 22 10.1 Condition and Appearance of the Franchise 22 10.2 Franchise Services and Products 23 10.3 Approved Products, Distributors and Suppliers 24 10.4 Hours of Operation 25 10.5 Specifications, Standards and Procedures 25 10.6 Compliance with Laws and Good Business Practices 25 10.7 Management and Personnel of the Franchise 26 10.8 Insurance 27 10.9 Credit Cards and Other Methods of Payment 28 10.10 Pricing 29 11. ADVERTISING 29 11.1 By Company 29 11.2 By Franchise Owner 31 11.3 Regional Advertising Cooperatives 31 11.4 Websites and Other Forms of Advertising Media 31 12. ACCOUNTING, REPORTS AND FINANCIAL STATEMENTS 32 13. INSPECTIONS AND AUDITS 33 13.1 Company's Right to Inspect the Franchise 33 13.2 Company's Right to Audit 33 14. TRANSFER REQUIREMENTS 34 14.1 Organization 34 14.2 Interests in Franchise Owner; Reference to Exhibit 4 34 14.3 Transfer by Company 35 14.4 No Transfer Without Approval 35 14.5 Conditions for Approval of Transfer 36 14.6 Right of First Refusal 38 14.7 Death and Disability 39 14.8 Effect of Consent to Transfer 39 14.9 Consent Not Unreasonably Delayed 39 THE JOINT…THE CHIROPRACTIC PLACE™ FRANCHISE AGREEMENT + +ii + + + + + + + + 15. TERMINATION OF THE FRANCHISE 39 16. RIGHTS AND OBLIGATIONS OF COMPANY AND FRANCHISE OWNER UPON TERMINATION OR EXPIRATION OF THE FRANCHISE 41 16.1 Payment of Amounts Owed to Company 41 16.2 Marks 41 16.3 De-Identification 41 16.4 Confidential Information 41 16.5 Joint Software 42 16.6 Company's Option to Purchase the Franchise 42 16.7 Continuing Obligations 43 16.8 Management of the Franchise 43 17. ENFORCEMENT 43 17.1 Invalid Provisions; Substitution of Valid Provisions 43 17.2 Unilateral Waiver of Obligations 44 17.3 Written Consents from Company 44 17.4 Lien 44 17.5 No Guarantees 45 17.6 No Waiver 45 17.7 Cumulative Remedies 45 17.8 Specific Performance; Injunctive Relief 45 17.9 Arbitration 46 17.10 Waiver of Punitive Damages and Jury Trial; Limitations of Actions 46 17.11 Governing Law/Consent To Jurisdiction 47 17.12 Binding Effect 47 17.13 No Liability to Others; No Other Beneficiaries 47 17.14 Construction 47 17.15 Joint and Several Liability 48 17.16 Multiple Originals 48 17.17 Timing Is Important 48 17.18 Independent Provisions 48 18. NOTICES AND PAYMENTS 48 19. INDEPENDENT PROFESSIONAL JUDGMENT OF YOU AND YOUR GENERAL MANAGER 49 20. ENTIRE AGREEMENT 49 Exhibit 1 - Franchise Agreement Expiration Date/ Projected Franchising Opening Schedule Exhibit 2 - Owner's Guaranty and Assumption of Obligations Exhibit 3 - Addendum to Lease Agreement Exhibit 4 - Ownership Interests in Franchise Owner THE JOINT…THE CHIROPRACTIC PLACE™ FRANCHISE AGREEMENT + +iii + + + + + + + + + + THE JOINT CORP. FRANCHISE AGREEMENT This Franchise Agreement (this or the "Agreement") is being entered into effective as of the _____ day of _______________, 20__ (the "Agreement Date"). The parties to this Agreement are The Joint Corp., a Delaware corporation ("we," "us," the "Company," or "The Joint Corp."); _________________________________________, as Franchise Owner ("you," "Franchise Owner," or "Franchisee"), and, if you are a partnership, corporation, or limited liability company, your "Principal Owners" (defined below). 1. INTRODUCTION. This Agreement has been written in an informal style in order to make it more easily readable and to be sure that you become thoroughly familiar with all of the important rights and obligations the Agreement covers before you sign it. This Agreement includes several exhibits, all of which are legally binding and are an integral part of the complete Franchise Agreement. In this Agreement, we refer to The Joint Corp. as "we," "us," or the "Company." We refer to you as "you," "Franchise Owner" or "Franchisee." If you are a corporation, partnership or limited liability company, you will notice certain provisions that are applicable to those principal shareholders, partners or members on whose business skill, financial capability and personal character we are relying in entering into this Agreement. Those individuals will be referred to in this Agreement as "Principal Owners." Through the expenditure of considerable time, effort and money, we and our affiliates have devised a system for the establishment and operation of The Joint Corp. business model, a chiropractic location that specializes in affordable, convenient, and accessible chiropractic care. It is our mission "to improve your quality of life through affordable Chiropractic care." Our atmosphere is fun and upbeat, and no appointments are necessary (all of these characteristics are referred to in this Agreement as the "System"). This business model includes a location model offering all of our franchised services and products (individually, a "Location" and collectively, the "Locations"). We identify the System by the use of certain trademarks, service marks and other commercial symbols, including the marks "The Joint…A Chiropractic Place®", "The Joint…The Chiropractic Place™" and certain associated designs, artwork and logos, which we may change or add to from time to time (the "Marks"). THE JOINT…THE CHIROPRACTIC PLACE™ FRANCHISE AGREEMENT + +1 + + + + + + + + From time to time we grant to persons who meet our qualifications, franchises to own and operate a The Joint Corp. Location franchise business that will manage clinics that specialize in providing chiropractic services and products to the general public through licensed chiropractic professionals ("Clinic(s)"). This Agreement is being presented to you because of the desire you have expressed to obtain the right to develop, own, and be franchised to operate a The Joint Corp. Location (we will refer to your The Joint Corp. franchise as the "Franchise" or the "Franchised Business"). You may purchase and operate your Franchise as a new, start-up Location (a "Start-up Location"), or may convert an existing chiropractic practice to a The Joint Corp. Location (a "Conversion Location"). In signing this Agreement, you acknowledge that you have conducted an independent investigation of The Joint Corp. Franchised Business, and recognize that, like any other business, the nature of it may evolve and change over time, that an investment in a The Joint Corp. Franchised Business involves business risks, and that the success of this business venture is primarily dependent on your business abilities and efforts. We expressly disclaim making, and you acknowledge that you have not received or relied on, any guarantee, express or implied, as to the revenues, profits, or likelihood of success of The Joint Corp. Franchise venture contemplated by this Agreement. You acknowledge that there have been no representations by us or our affiliates or our or their respective officers, directors, members, employees, or agents that are inconsistent with the statements made in our current Franchise Disclosure Document concerning the Franchised Business, or the provisions of this Agreement. You further represent to us, as an inducement to our entering into this Agreement with you, that there have been no misrepresentations to us in your application for the rights granted by this Agreement, or in the financial information provided by you and your Principal Owners. 2. GRANT OF FRANCHISE. 2.1 Term; Reference to Exhibit 1. You have applied for a franchise to own and operate a The Joint Corp. Location, and we have approved your application in reliance on all of the representations you made in that application. As a result, and subject to the provisions of this Agreement, we grant to you a Franchise to operate a The Joint Corp. Location offering all products, services, and proprietary programs of ours, in accordance with all elements of the System, that we may require for The Joint Corp. Locations. You must operate the Franchise at a mutually agreeable site (the "Premises") to be identified after the signing of this Agreement, and to use the System and the Marks in the operation of that Franchise, for a term of 10 years (the "Initial Term"). The Initial Term will begin on the Agreement Date. (For convenience, the expiration date of the Initial Term is listed on Exhibit 1.) Termination or expiration of this Agreement will constitute a termination or expiration of your Franchise. (All references to the "term" of this Agreement refer to the period from the Agreement Date to the date on which this Agreement actually terminates or expires.) THE JOINT…THE CHIROPRACTIC PLACE™ FRANCHISE AGREEMENT + +2 + + + + + + + + 2.2 Full Term Performance. You specifically agree to be obligated to operate the Franchise, perform the obligations of this Agreement, and continuously exert your best efforts to promote and enhance the business of the Franchise for the full term of this Agreement. 2.3 Management Agreement with Professional Corporation - Non-Licensed Franchisees. If you are not a licensed chiropractor, prior to commencing operations of the Franchised Business, you must enter into a management agreement ("Management Agreement") with a chiropractic professional corporation (or a professional limited liability company, if permitted in the state in which the Clinic is located) (a "PC") whereby you will provide to the PC management and administrative services and support consistent with the System and as outlined in our form of Management Agreement, a copy of which is included as an Exhibit to our Disclosure Document, to support the PC's chiropractic practice and its delivery of chiropractic services and related products to chiropractic patients, consistent with all applicable laws and regulations. The PC shall employ and control the chiropractors and other chiropractic personnel that will provide the actual chiropractic services required to be delivered at and through the Clinic. You shall not provide any actual chiropractic services, nor shall you supervise, direct, control or suggest to, the PC or its chiropractors or employees the manner in which the PC provides or may provide chiropractic services to its patients. You acknowledge and agree that we will not provide any chiropractic services, nor will we supervise, direct, control or suggest to, the PC or its chiropractors or employees the manner in which the PC provide chiropractic services to its patients. Due to various federal and state laws regarding the practice of chiropractic medicine, and the ownership and operation of chiropractic practices and health care businesses that provide chiropractic services, you understand and acknowledge that that you, as non-chiropractor Location franchisee, shall not engage in any practices that are, or may appear to be, the practice of chiropractic medicine. You acknowledge that the PC must offer all chiropractic services in accordance with the Management Agreement and the System. You must use our standard form of Management Agreement, however, you may negotiate the monetary terms and, with our written consent, certain other terms of the relationship with the PC. We will not unreasonably withhold our approval to requested changes in the Management Agreement. You must obtain our written approval of the final Management Agreement prior to your execution. We must approve the PC candidate. You shall ensure that the PC offers all chiropractic services in accordance with the Management Agreement and the System. If you are not able to find a suitable chiropractor to create, own and staff the PC, we will attempt to help you find a suitable PC. You must have a Management Agreement in effect with a PC at all times during the operation of the Franchised Business and during the Initial Term of this Agreement. THE JOINT…THE CHIROPRACTIC PLACE™ FRANCHISE AGREEMENT + +3 + + + + + + + + If you are a licensed chiropractor, or part of a PC owned by licensed chiropractors, you do not need to execute a Management Agreement. However, you are still responsible for compliance with all laws application to the operation of a chiropractic Clinic and your Location franchise. 2.4 Waiver of Management Agreement. In certain states, it may be permissible under the existing laws that may be applicable to chiropractic professionals and/or practices, such as chiropractic clinics, for a non-chiropractor to both own and operate a Clinic and a Location Franchise, including hiring chiropractic and other professional personnel and providing chiropractic services to patients at the Clinic. If you determine that the laws that would apply to a Clinic in your state would permit you to do so, you may request that we waive certain of the requirements of the Franchise Agreement related to separating the operation of the chiropractic aspects of the Clinic from the management aspects. In particular, you (i) would not enter into a Management Agreement with a PC that, as a separate entity, would otherwise operate the Clinic and provide all chiropractic services, and (ii) you would not be restricted from hiring and supervising chiropractic professionals. Any waiver, or any modification of our standards, would be subject to compliance with all applicable laws and regulations. If we agree to do a waiver, you must enter into an Amendment to Waive Management Agreement ("Waiver Agreement"), a copy of which is attached as an exhibit to our Disclosure Document. Under the Waiver Agreement, you will agree that, instead of entering into the Management Agreement with a separate PC, you will (a) operate the Clinic, including performing all responsibilities and obligations of the "PC" under the Management Agreement, and (b) manage the Clinic as required in this Agreement and by performing all the responsibilities and obligations of the "Company" under the Management Agreement. You are responsible for operating in full compliance with all laws that apply to a Clinic, and you must make your own determination as to your legal compliance obligations. Additionally, the laws applicable to your Clinic may change, and if there are any chiropractic regulations or other laws that would render your operation of the Clinic through a single entity (or otherwise) in violation of any medical regulations, you must immediately advise us of such change and of the your proposed corrective action to comply with chiropractic regulations, including (if applicable) entering into a Management Agreement with a PC. Similarly, if we discover any such laws, upon providing you notice of such laws, you agree to make such changes as are necessary to comply with medical regulations, including (if applicable) entering into a Management Agreement with a PC. THE JOINT…THE CHIROPRACTIC PLACE™ FRANCHISE AGREEMENT + +4 + + + + + + + + 2.5 Selection of Premises; No Protected Territory; Reservation of Rights. You and we will mutually select the location of the Premises upon or after the signing of this Agreement. You acknowledge that the Franchise granted by this Agreement gives you the right to operate your Franchise only at the Premises. Although we will not seek to operate or grant others the right to operate a The Joint Corp. Location within the same general area as the Premises, we make no guarantee of any protected territory. Except as otherwise provided in this Paragraph 2.5, we retain all rights with respect to The Joint Corp. Location franchises, the Marks and the System, including (by way of example only and not as a limitation): (a) the right to operate or grant others the right to operate The Joint Corp. Location franchises in any location on terms and conditions we deem appropriate; and (b) the right to operate or offer other healthcare-related companies or franchises or enter into other lines of business offering similar or dissimilar products or services under trademarks or service marks other than the Marks, in any location. 2.6 Renewal of Franchise. (a) Franchise Owner's Right to Renew. Subject to the provisions of subparagraph 2.6(b) below, and if you have substantially complied with all provisions of this Agreement and all other agreements between us, on expiration of the Initial Term, if you refurbish and decorate the Premises, replace fixtures, furnishings, wall decor, furniture, equipment, and signs and otherwise modify the Franchise in compliance with specifications and standards then applicable under new or renewal franchises for The Joint Corp. Location franchises, you will have the right to renew the Franchise for one (1) additional term of ten (10) years (the "Renewal Term"). (b) Notice of Deficiencies and Other Requirements. At least one (1) year before the expiration of the Initial Term, we agree to give you written notice of any deficiencies in your operation or in the historical performance of the Franchise that could cause us not to renew the Franchise. If we will permit renewal, our notice will state what actions, if any, you must take to correct the deficiencies in your operation of the Franchise or of the Premises, and will specify the time period in which those deficiencies must be corrected or other requirements satisfied. Renewal of the Franchise will be conditioned on your continued compliance with all the terms and conditions of this Agreement up to the date of expiration. If we send a notice of non-renewal, it will state the reasons for our refusal to renew. THE JOINT…THE CHIROPRACTIC PLACE™ FRANCHISE AGREEMENT + +5 + + + + + + + + (c) Renewal Agreement; Releases. Should you choose to renew the Franchise, you must provide us with written notice of that intent no earlier than two (2) years and no later than one (1) year before the expiration of the Initial Term. To renew the Franchise, the Company, you and your Principal Owners must execute the form of Franchise Agreement and any ancillary agreements we are then customarily using in the grant or renewal of franchises for the operation of The Joint Corp. Location Franchises (with appropriate modifications to reflect the fact that the agreement relates to the grant of a renewal franchise), except that no initial franchise fee will be payable upon renewal of the Franchise. However, you must pay to us a renewal fee equal to 25% of our then-current initial franchise fee for Start-up Locations. You and your Principal Owners and your and their spouses must also execute general releases, in a form satisfactory to us, of any and all claims against us and our affiliates, and our and their respective owners, officers, directors, employees, and agents. 2.7 Personal Guaranty by Principal Owners; Reference to Exhibit 2. Each of the Principal Owners and their spouses (where applicable), will be required to execute a personal guaranty (the "Guaranty"), guaranteeing the Franchise's liabilities and obligations to the Company. A copy of the Guaranty is incorporated herein as Exhibit 2. 3. DEVELOPMENT AND OPENING OF THE FRANCHISE 3.1 Site Approval; Lease or Purchase of Premises; Opening Timeline; Reference to Exhibit 3. (a) You will use your best efforts to locate and select a proposed site for the Premises that is acceptable to us as suitable for the operation of the Franchise, which must be reviewed and approved by us within six (6) months of the Agreement Date. Our review and approval process may take up to thirty (30) days, so we recommend you submit your proposed site to us within one hundred fifty (150) days of the Agreement Date. You must submit to us, in the form we specify, a description of the site and such other information or materials as we may reasonably require. We will not unreasonably withhold approval of a site that meets our standards for general location and neighborhood, traffic patterns, parking size, layout and other physical characteristics, for The Joint Corp. Location franchises. Our approval of a site shall not constitute, nor be deemed, a judgment as to the likelihood of success of a The Joint Corp. Location at such location, or a judgment as to the relative desirability of such location in comparison to other locations. If you fail to identify a mutually-agreeable site within the aforementioned six (6) month period, we may terminate this Agreement. (b) Once we have approved the proposed site of the Premises for your Franchise, you must obtain lawful possession of the Premises through lease or purchase within thirty (30) days of our approval of the Premises. You agree that you will not execute a lease without our advance written approval of the lease terms. The lease for the Premises must include the Addendum to Lease, attached hereto as Exhibit 3, permitting us to take possession of the Premises under certain conditions if this Agreement is terminated or if you violate the terms of the lease. THE JOINT…THE CHIROPRACTIC PLACE™ FRANCHISE AGREEMENT + +6 + + + + + + + + (c) Unless we agree otherwise, you must open your franchise for business no later than nine (9) months from the Effective Date of this Agreement. 3.2 Prototype and Construction Plans and Specifications. We will furnish to you prototype plans and specifications for your Location, reflecting our requirements for design, decoration, furnishings, furniture, layout, equipment, fixtures and signs for The Joint Corp. Locations, which may be in the form of actual plans for an existing or proposed Location with which we are involved. Using an architect we designate or approve, it will then be your responsibility to have the plans and specifications modified to comply with all ordinances, building codes, permit requirements, and lease requirements and restrictions applicable to the Premises. You must submit final construction plans and specifications to us for our approval before you begin construction at the Premises, and must construct the Franchise location in accordance with those approved plans and specifications. 3.3 Development of the Franchise. You agree at your own expense to do the following by the Opening Deadline defined in Exhibit 1: (1) secure all financing required to fully develop the Franchise; (2) obtain all required building, utility, sign, health, sanitation and business permits and licenses and any other required permits and licenses; (3) construct the Franchise location according to the approved construction plans and specifications; (4) decorate the Franchise location in compliance with the approved plans and specifications; (5) purchase and install all required equipment, furniture, furnishings and signs; (6) cause the training requirements of Section 4 to be completed; (7) purchase an opening inventory of products and other supplies and materials; (8) provide proof, in a form satisfactory to us, that your operation of the Franchise at the Franchise location does not violate any applicable state or local zoning or land use laws, ordinances, or regulations, or any restrictive covenants that apply to such location; (9) provide proof, in a form satisfactory to us, that you (and/or your General Manager, as defined in Section 4.1, if any) are legally authorized and have all licenses necessary to perform all of the services to be offered by your Franchise, and that your organizational structure is consistent with all legal requirements; (10) provide proof, in a format satisfactory to us, that you have obtained all required insurance policies, and have name us, as an additional insurance under all such policies; (11) submit to us a completed copy of the grand opening checklist we provide to you; (12) do any other acts necessary to open the Franchise for business; (13) obtain our approval to open the Franchise for business; and (14) open the Franchise for business. THE JOINT…THE CHIROPRACTIC PLACE™ FRANCHISE AGREEMENT + +7 + + + + + + + + 3.4 Computer System. (a) General Requirements. You agree to use in the development and operation of the Franchise the computer terminals/billing systems and operating software ("Computer System") that we specify from time to time. You acknowledge that we may modify such specifications and the components of the Computer System from time to time. As part of the Computer System, we may require you to obtain specified computer hardware and/or software, including without limitation a license to use proprietary software developed by us or others. Our modification of such specifications for the components of the Computer System may require you to incur costs to purchase, lease and/or obtain by license new or modified computer hardware and/or software, and to obtain service and support for the Computer System during the term of this Agreement. You acknowledge that we cannot estimate the future costs of the Computer System (or additions or modifications thereto), and that the cost to you of obtaining the Computer System (or additions or modifications thereto), including software, may not be fully amortizable over the remaining term of this Agreement. Nonetheless, you agree to incur such costs in connection with obtaining the computer hardware and software comprising the Computer System (or additions or modifications thereto). Within sixty (60) days after you receive notice from us, you agree to obtain the components of the Computer System that we designate and require. You further acknowledge and agree that we and our affiliates have the right to charge a reasonable systems fee for software or systems installation services; modifications and enhancements specifically made for us or our affiliates that are licensed to you; and other maintenance and support Computer System-related services that we or our affiliates furnish to you. You will have sole responsibility for: (1) the acquisition, operation, maintenance, and upgrading of your Computer System; (2) the manner in which your Computer System interfaces with our computer system and those of third parties; and (3) any and all consequences that may arise if your Computer System is not properly operated, maintained, and upgraded. (b) Software. As a franchisee of The Joint Corp., we will provide to you The Joint Corp.'s proprietary office management software (the "Joint Software"), which you will be required to install onto the Computer System and use in the daily operation of the Franchise. In addition, we may, at any time and from time to time, contract with one or more software providers, business service providers, or other third parties (individually, a "Service Provider") to develop, license, or otherwise provide to or for the use and benefit of you and other The Joint Corp. Franchises certain software, software applications, and software maintenance and support services related to the Computer System that you must or may use in accordance with our instructions with respect to your Computer System. + +THE JOINT…THE CHIROPRACTIC PLACE™ FRANCHISE AGREEMENT + +8 + + + + + + + + 3.5 Equipment, Furniture, Fixtures, Furnishings and Signs. You agree to use in the development and operation of the Franchise only those brands, types, and/or models of equipment, furniture, fixtures, furnishings, and signs we have approved. 3.6 Franchise Opening. You agree not to open the Franchise for business until: (1) all of your obligations under Paragraphs 3.1 through 3.4 of this Section have been fulfilled; (2) we determine that the Franchise has been constructed, decorated, furnished, equipped, and stocked with materials and supplies in accordance with plans and specifications we have provided or approved; (3) you and any of your Franchise's employees whom we require complete our pre-opening Initial Training (as defined herein) to our satisfaction; (4) the Initial Franchise Fee (as defined herein) and all other amounts due to us have been paid; (5) you have furnished us with copies of all insurance policies required by Paragraph 10.8 of this Agreement, or have provided us with appropriate alternative evidence of insurance coverage and payment of premiums as we have requested; and (6) we have approved any marketing, advertising, and promotional materials you desire to use, as provided in Paragraph 11.2 of this Agreement. The Company will provide, at our expense, an opening supervisor to be on site at your Location to assist you with your operational efficiency, staff training, Location setup and grand opening. The opening supervisor will be on site one (1) day before the opening of your first Location and for one (1) day after the opening of your first Location franchise. 4. TRAINING. 4.1 General Manager. At your request, we may, but are not obligated to, agree for you to employ a general manager to operate the Franchise ("General Manager"). The term "General Manager" means an individual with primary day-to-day responsibility for the Franchise's operations, and may or may not be you (if you are an individual) or a Principal Owner, officer, director, or employee of yours (if you are other than an individual). We may or may not require that the General Manager have an equity interest in the Franchise. The General Manager will be obligated to devote his or her full time, best efforts, and constant personal attention to the Franchise's operations, and must have full authority from you to implement the System at the Franchise. You must not hire any General Manager or successor General Manager without first receiving our written approval of such General Manager's qualifications. Each General Manager and successor General Manager must attend and complete our Initial Training (as defined herein). No General Manager may have any interest in or business relationship with any business competitor of your franchise. Each General Manager must sign a written agreement, in a form approved by us, to maintain confidential our Confidential Information described in Paragraph 9.1, and to abide by the covenants not to compete described in Paragraph 9.3. You must forward to us a copy of each such signed agreement. If we determine, in our sole discretion, during or following completion of the Initial Training program, that your General Manager (if any) is not qualified to act as General Manager of the Franchise, then we have the right to require you to choose (and obtain our approval of) a new individual for that position. THE JOINT…THE CHIROPRACTIC PLACE™ FRANCHISE AGREEMENT + +9 + + + + + + + + 4.2 Training. You acknowledge that it is very important to the operation of the Franchise that you and your employees receive appropriate training. To that end, you agree as follows: (a) No later than thirty (30) days before the Franchise opens for business, you must attend our initial training program for your Franchise (the "Initial Training") at the time and place we designate. You (if you are an individual) or at least one of your Principal Owners (if you are a legal entity) must complete the Initial Training to our satisfaction. If you employ a General Manager other than yourself or one of your Principal Owners, that General Manager must also complete the Initial Training to our satisfaction. Other employees may complete the Initial Training at your sole discretion and expense, provided you first obtain our approval and subject to availability of facilities and materials. The Initial Training may include classroom instruction and Franchise operation training, and will be furnished at our training facility in Scottsdale, Arizona, a The Joint Corp. Franchise location we designate, your Franchise location, and/or at another location we designate. Our Initial Training programs may be different for each employee depending on their responsibilities at the Franchise. There will be no tuition charge for the persons whom we require to attend any Initial Training program or for any additional personnel of your choosing. All persons who attend our Initial Training must attend and complete the Initial Training to our satisfaction. If we, in our sole discretion, determine that any General Manager or employee whom we require to attend any Initial Training program is unable to satisfactorily complete such program, then you must not hire that person, and must hire a substitute General Manager or employee (as the case may be), who must enroll in the Initial Training program within fifteen (15) days thereafter, and complete the Initial Training to our satisfaction. (b) You agree to have your General Manager (if any) and/or other employees who attend our Initial Training complete additional training programs at places and times as we may request from time to time during the term of this Agreement. THE JOINT…THE CHIROPRACTIC PLACE™ FRANCHISE AGREEMENT + +10 + + + + + + + + (c) In addition to providing the Initial Training described above, we reserve the right to offer and hold such additional ongoing training programs and franchise owners meetings regarding such topics and at such times and locations as we may deem necessary or appropriate. We also reserve the right to make any of these training programs mandatory for you and/or designated owners, employees, and/or representatives of yours. We reserve the right to charge you a daily attendance fee in an amount to be set by us for each attendee of yours who attends any mandatory or optional training program or owners meeting. If we offer any such mandatory training programs, then you or your designated personnel must attend a minimum of seventy-five percent (75%) of the programs offered on an annual basis. In addition to any other remedies we may have, if you fail to attend any required training, we reserve the right to charge you a non-attendance fee of up to $400 per day for each day of mandatory training programs or meetings you miss or fail to attend. (d) You agree to pay all wages and compensation owed to, and travel, lodging, meal, transportation, and personal expenses incurred by, all of your personnel who attend our Initial Training and/or any mandatory or optional training we provide. (e) We may require your employees to take and pass an online computer training course. While there is no cost to take such training, we may require all employees and staff to pass such training to our satisfaction before they may begin working at your Franchise location. (f) The Franchise's General Manager (if any) and other employees shall obtain all certifications and licenses required by law in order to perform their responsibilities and duties for the Franchise. 5. GUIDANCE; OPERATIONS MANUAL. 5.1 Guidance and Assistance. During the term of this Agreement, we may from time to time furnish you guidance and assistance with respect to: (1) specifications, standards, and operating procedures used by The Joint Corp. Location franchises; (2) purchasing approved equipment, furniture, furnishings, signs, materials and supplies; (3) development and implementation of local advertising and promotional programs; (4) general operating and management procedures; (5) establishing and conducting employee training programs for your Franchise; and (6) changes in any of the above that occur from time to time. This guidance and assistance may, in our discretion, be furnished in the form of bulletins, written reports and recommendations, operations manuals and other written materials (the "Operations Manual"), and/or telephone consultations and/or personal consultations at our offices or your Franchise. If you request—and if we agree to provide—any additional, special on-premises training of your personnel or other assistance in operating your Franchise, then you agree to pay a daily training fee in an amount to be set by us, and all expenses we incur in providing such training or assistance, including any wages or compensation owed to, and travel, lodging, transportation, and living expenses incurred by, our Company personnel. THE JOINT…THE CHIROPRACTIC PLACE™ FRANCHISE AGREEMENT + +11 + + + + + + + + 5.2 Operations Manual. The Operations Manual we lend to you will contain mandatory and suggested specifications, standards, and operating procedures that we prescribe from time to time for your Franchise, as well as information relative to other obligations you have in the operation of the Franchise. The Operations Manual may be composed of or include audio recordings, video recordings, computer disks, compact disks, and/or other written or intangible materials. We may make all or part of the Manual available to you through various means, including the Internet. A previously delivered Operations Manual may be superseded from time to time with replacement materials to reflect changes in the specifications, standards, operating procedures and other obligations in operating the Franchise. You must keep your copy of the Operations Manual current, and if you and we have a dispute over the contents of the Manual, then our master copy of the Manual will control. You agree that you will not at any time copy any part of the Operations Manual, permit it to be copied, disclose it to anyone not having a need to know its contents for purposes of operating your Franchise, or remove it from the Franchise location without our permission. If your copy of the Operations Manual is lost, destroyed, or significantly damaged, then you must obtain a replacement copy for us at our then-applicable charge. 5.3 Modifications to System. We will continually be reviewing and analyzing developments in the healthcare, and chiropractic industries, as well as developments in fields related to small-business management, and based upon our evaluation of this information, may make changes in the System, including but not limited to, adding new components to services offered and equipment used by The Joint Corp. Location franchises. Moreover, changes in laws regulating the services offered by The Joint Corp. franchises may (a) require us to restructure our franchise program, (b) require your General Manager (if any) and employees to obtain additional licenses or certifications, (c) require you to retain or establish relationships with additional professionals and specialists in the chiropractic and/or healthcare industries, and/or (d) require you to modify your ownership or organizational structure. You agree, at our request, to modify the operation of the Franchise to comply with all such changes, and to be solely responsible for all related costs. 5.4 Advisory Councils. You agree to participate in, and, if required, become a member of any advisory councils or similar organizations we form or organize for The Joint Corp. Location franchises. + +THE JOINT…THE CHIROPRACTIC PLACE™ FRANCHISE AGREEMENT + +12 + + + + + + + + 6. FEES AND COSTS. 6.1 Initial Franchise Fee. You agree to pay us the initial franchise fee of Twenty-Nine Thousand and No/100 Dollars ($29,000.00) (the "Initial Franchise Fee") when you sign this Agreement. In recognition of the expenses we incur in furnishing assistance and services to you, you agree that we will have fully earned the Initial Franchise Fee, and that is due and non-refundable when you sign this Agreement. 6.2 Royalty Fee. You agree to pay us a continuing franchise royalty fee ("Royalty Fee") in the amount of seven percent (7%) of the gross revenues of the Franchise for all periods, with a minimum monthly amount of Seven Hundred and No/100 Dollars ($700.00). This fee will be payable on the 1st and 16t h of each month based on the Franchise's gross revenues. If the 1 st or 16t h of the month fall on a weekend or holiday, then the fee is payable on the next business day. If, at the end of any calendar month, the total Royalty Fee collected for the preceding month is less than $700.00, the difference between the amount collected and $700.00 shall be due on the tenth (10th) day of the following month. The terms "gross revenues" shall, for purposes of this Agreement, mean the total of all revenue and receipts derived from the operation of the Franchise, including all amounts received at or away from the site of the Franchise, or through the business the Franchise conducts (such as fees for chiropractic care, fees for the sale of any service or product, gift certificate sales, and revenue derived from products sales, whether in cash or by check, credit card, debit card, barter or exchange, or other credit transactions); and excludes only sales taxes collected from customers and paid to the appropriate taxing authority, and all customer refunds and credits the Franchise actually makes. For the avoidance of doubt, you specifically acknowledge that "gross revenues" includes the gross revenues of any P.C. or any of P.C.'s clinics that are managed by you pursuant to a Management Agreement, even if those revenues are not recognized on your books, and that you are responsible for determining those revenues and paying the Royalty Fee as if those revenues were recognized on your books. You and we acknowledge and agree that the Royalty Fee represents compensation paid by you to us for the guidance and assistance we provide and for the use of our Marks, Confidential Information (as defined herein), know-how, and other intellectual property we allow you to use under the terms of this Agreement. The Royalty Fee does not represent payment for the referral of customers to you, and you acknowledge and agree that the services we offer to you and our other The Joint Corp. franchisees do not include the referral of customers. + +THE JOINT…THE CHIROPRACTIC PLACE™ FRANCHISE AGREEMENT + +13 + + + + + + + + 6.3 Regional and National Advertising Fee. Recognizing the value of advertising to the goodwill and public image of The Joint Corp. Location franchises, we may, in our sole discretion, establish, maintain and administer one or more regional and/or national advertising funds (the "Ad Fund(s)") for such advertising as we may deem necessary or appropriate in our sole discretion. We may, however, choose to use only one Ad Fund to meet the needs of regional, multi- regional, and national advertising and promotional programs. If we establish an Ad Fund, you agree to contribute to the Ad Fund a percentage of gross revenues of the Franchise in an amount we designate from time to time by notice to you, up to a maximum of two percent (2%) of the gross revenues of the Franchise. As of the date of this Agreement, the current required contribution to the Ad Fund is one percent (1%) of the gross revenues of the Franchise. In the event we choose to change the required contribution amount, which we may do at our sole and absolute discretion, up to a maximum of two percent (2%) of gross revenues, we will provide you with thirty (30) days' advance written notice of the change. These advertising fees ("Advertising Fees") will be payable with and at the same time as your Royalty Fees payable under Paragraph 6.2 above. A further description of the Ad Fund and your obligations with respect to advertising and promoting the Franchise is found in Section 11 of this Agreement. 6.4 Local Advertising. (a) By Franchisee. In addition to the Advertising Fees set forth in Paragraph 6.3, which will be used by us to promote The Joint Corp. on a regional and national level, you agree to spend a certain amount on advertising in your local market area. This amount must equal the greater of (a) Three Thousand and No/100 Dollars ($3,000.00); or (b) five percent (5%) of the Franchise's gross revenues for each month during the term of this Agreement (the "Local Advertising Requirement"). All proposed local advertising must be submitted to and approved by us before you enter into any advertising agreements. At our request, you must provide us with any documentation we request showing that you have met your monthly Local Advertising Requirement. (b) Regional Advertising Cooperative. In the event that more than one The Joint Corp. Location franchise is located in an area of dominant influence ("ADI"), we reserve the right to form a regional advertising cooperative (the "Regional Ad Co-op"), require you to join the Regional Ad Co-op and contribute to its funding. An ADI is a geographic market designation that defines a broadcast media market, consisting of all counties in which the home market stations receive a preponderance of viewing. We reserve the right to determine the amount to be contributed by each member of the Regional Ad Co-op as necessary. The required contributions to any Regional Ad Co-op will not be credited against the Local Advertising Requirement set forth in Paragraph 6.4(a) or 11.2. THE JOINT…THE CHIROPRACTIC PLACE™ FRANCHISE AGREEMENT + +14 + + + + + + + + 6.5 Grand Opening Costs. During sixty (60) day period that begins thirty (30) days prior to the opening of your Franchise, and ending thirty (30) days after the opening of your Franchise (the "Grand Opening Period"), you will be required to expend at least Ten Thousand and No/100 Dollars ($10,000.00) in verifiable marketing costs to publicize the grand opening of your Franchise. These costs may include, but are not limited to, signage, local advertising, flyers, promotions, and giveaways. Upon conclusion of the Grand Opening Period, you must send to us a report detailing the amounts spent to publicize the grand opening of your franchise during the Grand Opening Period. All proposed grand opening advertising must be submitted to and approved by us. At our request, you must provide us with any documentation we request showing that you have met the required spend requirement for your Grand Opening. 6.6 Software and Programming Fees. The initial purchase and installation fee for the Joint Software is Four Hundred Ninety-Five and No/100 Dollars ($495.00), which is payable along with the Initial Franchise Fee. For each month during the term of this Agreement, the on-going license fee for the Joint Software is Two Hundred Seventy-Five and No/100 Dollars ($275.00), which will be debited from the Account on the fifth (5th) day of each month for the preceding month. 6.7 Relocation Fee. If you must relocate the Premises of your Location for any reason, you must pay to us a Franchise Relocation Fee (the "Relocation Fee") of Two Thousand Five Hundred and No/100 Dollars ($2,500.00). The Relocation Fee will help the Company defray the costs of approving a new location, reviewing and approving plans for the new location, and updating Company records and marketing materials to reflect the new location. 6.8 Late Payments. All Royalty Fees, Advertising Fees, amounts due from you for purchases from us or our affiliates, and other amounts which you owe us or our affiliates (unless otherwise provided for in a separate agreement between us or our affiliates) will begin to accrue interest after their respective due dates at the lesser of (i) the highest commercial contract interest rate permitted by state law, and (ii) the rate of eighteen percent (18%) per annum. In addition to any accruing interest, all late payments will incur a late charge of Fifty and No/100 Dollars ($50.00) per day until the payment is made. Payments due us or our affiliates will not be deemed received until such time as funds from the deposit of any check by us or our affiliates is collected from your account. You acknowledge that the inclusion of this Paragraph in this Agreement does not mean we agree to accept or condone late payments, nor does it indicate that we have any intention to extend credit to, or otherwise finance your operation of the Franchise. We have the right to require that any payments due us or our affiliates be made by certified or cashier's check in the event that any payment by check is not honored by the bank upon which the check is drawn. We also reserve the right to charge you a fee of One Hundred and No/100 Dollars ($100.00) for any payment by check that is not honored by the bank upon which it is drawn. THE JOINT…THE CHIROPRACTIC PLACE™ FRANCHISE AGREEMENT + +15 + + + + + + + + 6.9 Electronic Funds Transfer. We have the right to require you to participate in an electronic funds transfer program under which Royalty Fees, Advertising Fees, and any other amounts payable to us or our affiliates are deducted or paid electronically from your bank account (the "Account"). In the event you are required to authorize us to initiate debit entries, you agree to make the funds available in the Account for withdrawal by electronic transfer no later than the payment due date. The amount actually transferred from the Account to pay Royalty Fees and Advertising Fees will be based on the Franchise's gross revenues as reported in the Franchise's practice management software. If you have not properly input the Franchise's gross revenues for any reporting period, then we will be authorized to debit the Account in an amount equal to one hundred twenty percent (120%) of the Royalty Fee, Advertising Fee, and other amounts transferred from the Account for the last reporting period for which a report of the Franchise's gross revenues was provided to us. If at any time we determine that you have under-reported the Franchise's gross revenues or underpaid any Royalty Fee or Advertising Fee due us under this Agreement, then we will be authorized to initiate immediately a debit to the Account in the appropriate amount, plus applicable interest, in accordance with the foregoing procedure. Any overpayment will be credited, without interest, against the Royalty Fee, Advertising Fee, and other amounts we otherwise would debit from your account during the following reporting period. Our use of electronic funds transfers as a method of collecting Royalty Fees and Advertising Fees due us does not constitute a waiver of any of your obligations to provide us with weekly reports as provided in Section 12, nor shall it be deemed a waiver of any of the rights and remedies available to us under this Agreement. 6.10 Application of Payments. When we receive a payment from you, we have the right in our sole discretion to apply it as we see fit to any past due indebtedness of yours due to us or our affiliates, whether for Royalty Fees, Advertising Fees, purchases, interest, or for any other reason, regardless of how you may designate a particular payment should be applied. + +THE JOINT…THE CHIROPRACTIC PLACE™ FRANCHISE AGREEMENT + +16 + + + + + + + + 6.11 Modification of Payments. If, by operation of law or otherwise, any fees contemplated by this Agreement cannot be based upon gross revenues, then you and we agree to negotiate in good faith an alternative fee arrangement. If you and we are unable to reach an agreement on an alternative fee arrangement, then the Company reserves the right to terminate this Agreement upon notice to you, in which case all of the post-termination obligations set forth in Section 16 shall apply. 6.12 Non-Compliance Charge. In addition to our other rights and remedies, we may charge you a non-compliance charge in an amount up to five hundred dollars ($500) per violation by you of any term or condition of this Agreement, including, without limitation, failure to pay (or to have adequate amounts available for electronic transfer of) amounts owed to Franchisor or Franchisor's affiliates or failure to timely provide required reports, or failure to obtain prior approval from Franchisor whenever Franchisor approval is required (i.e., advertising). 7. MARKS. 7.1 Ownership and Goodwill of Marks. You acknowledge that your right to use the Marks is derived solely from this Agreement, and is limited to your operation of the Franchise pursuant to and in compliance with this Agreement and all applicable standards, specifications, and operating procedures we prescribe from time to time during the term of the Franchise. You understand and acknowledge that our right to regulate the use of the Marks includes, without limitation, any use of the Marks in any form of electronic media, such as Websites (as defined herein) or web pages, or as a domain name or electronic media identifier. If you make any unauthorized use of the Marks, it will constitute a breach of this Agreement and an infringement of our rights in and to the Marks. You acknowledge and agree that all your usage of the Marks and any goodwill established by your use will inure exclusively to our benefit and the benefit of our affiliates, and that this Agreement does not confer any goodwill or other interests in the Marks on you (other than the right to operate the Franchise in compliance with this Agreement). All provisions of this Agreement applicable to the Marks will apply to any additional trademarks, service marks, commercial symbols, designs, artwork, or logos we may authorize and/or license you to use during the term of this Agreement. THE JOINT…THE CHIROPRACTIC PLACE™ FRANCHISE AGREEMENT + +17 + + + + + + + + 7.2 Limitations on Franchise Owner's Use of Marks. You agree to use the Marks as the sole trade identification of the Franchise, except that you will display at the Franchise location a notice, in the form we prescribe, stating that you are the independent owner of the Franchise pursuant to a Franchise Agreement with us. You agree not to use any Mark as part of any corporate or trade name or with any prefix, suffix, or other modifying words, terms, designs, or symbols (other than logos and additional trade and service marks licensed to you under this Agreement), or in any modified form. You also shall not use any Mark or any commercial symbol similar to the Marks in connection with the performance or sale of any unauthorized services or products, or in any other manner we have not expressly authorized in writing. You agree to display the Marks in the manner we prescribe at the Franchise and in connection with advertising and marketing materials, and to use, along with the Marks, any notices of trade and service mark registrations we specify. You further agree to obtain any fictitious or assumed name registrations as may be required under applicable law. 7.3 Notification of Infringements and Claims. You agree to immediately notify us in writing of any apparent infringement of or challenge to your use of any Mark, or claim by any person of any rights in any Mark or similar trade name, trademark, or service mark of which you become aware. You agree not to communicate with anyone except us and our counsel in connection with any such infringement, challenge, or claim. We have the right to exclusively control any litigation or other proceeding arising out of any actual or alleged infringement, challenge, or claim relating to any Mark. You agree to sign any documents, render any assistance, and do any acts that our attorneys say is necessary or advisable in order to protect and maintain our interests in any litigation or proceeding related to the Marks, or to otherwise protect and maintain our interests in the Marks. 7.4 Discontinuance of Use of Marks. If it becomes advisable at any time in our sole judgment for the Franchise to modify or discontinue the use of any Mark, or use one or more additional or substitute trade or service marks, including the Marks used as the name of the Franchise, then you agree, at your sole expense, to comply with our directions to modify or otherwise discontinue the use of the Mark, or use one or more additional or substitute trade or service marks, within a reasonable time after our notice to you. 7.5 Indemnification of Franchise Owner. We agree to indemnify you against, and reimburse you for, all damages for which you are held liable in any trademark infringement proceeding arising out of your use of any Mark pursuant to and in compliance with this Agreement, and for all costs you reasonably incur in the defense of any such claim in which you are named as a party, so long as you have timely notified us of the claim, and have otherwise complied with this Agreement. THE JOINT…THE CHIROPRACTIC PLACE™ FRANCHISE AGREEMENT + +18 + + + + + + + + 8. RELATIONSHIP OF THE PARTIES; INDEMNIFICATION. 8.1 Independent Contractor; No Fiduciary Relationship. This Agreement does not create a fiduciary relationship between you and us. You and we are independent contractors, and nothing in this Agreement is intended to make either party a general or special agent, joint venture, partner, or employee of the other for any purpose whatsoever. You agree to conspicuously identify yourself in all your dealings with customers, suppliers, public officials, Franchise personnel, and others as the owner of the Franchise pursuant to a Franchise Agreement with us, and to place any other notices of independent ownership on your forms, business cards, stationery, advertising, and other materials as we may require from time to time. 8.2 No Liability, No Warranties. We have not authorized or empowered you to use the Marks except as provided by this Agreement, and you agree not to employ any of the Marks in signing any contract, check, purchase agreement, negotiable instrument or legal obligation, application for any license or permit, or in a manner that may result in liability to us for any indebtedness or obligation of yours. Except as expressly authorized by this Agreement, neither you nor we will make any express or implied agreements, warranties, guarantees or representations, or incur any debt, in the name of or on behalf of the other, or represent that your and our relationship is other than that of franchisor and franchisee. 8.3 Indemnification. We will not assume any liability or be deemed liable for any agreements, representations, or warranties you make that are not expressly authorized under this Agreement, nor will we be obligated for any damages to you or any person or property directly or indirectly arising out of the operation of the business you conduct pursuant to this Agreement, whether or not caused by your negligent or willful action or failure to act. We will have no liability for any sales, use, excise, income, gross receipts, property, or other taxes levied against you or your assets, or on us, in connection with the business you conduct, or any payments you make to us pursuant to this Agreement (except for our own income taxes). We will not assume any liability or be deemed liable for any agreements you enter with any third-parties, whether or not they are an approved or required vendor. You agree to indemnify, defend, and hold us, our affiliates and our and their respective owners, directors, officers, employees, agents, successors, and assigns (individually, an "Indemnified Party," and collectively, the "Indemnified Parties"), harmless against, and to reimburse such Indemnified Parties for, all such obligations, damages, and taxes for which any Indemnified Party may be held liable, and for all costs the Indemnified Party reasonably may incur in the defense of any such claim brought against the Indemnified Party, or in any such action in which the Indemnified Party may be named as a party, including without limitation actual and consequential damages; reasonable attorneys', accountants', and/or expert witness fees; cost of investigation and proof of facts; court costs; other litigation expenses; and travel and living expenses. Each Indemnified Party has the right to defend any such claim against the Indemnified Party. You further agree to hold us harmless and indemnify and defend us for all costs, expenses, and/or losses we incur in enforcing the provisions of this Agreement, defending our actions taken relating to this Agreement, or resulting from your breach of this Agreement, including without limitation reasonable arbitrator's and attorneys' fees (including those for appeal), unless, after legal proceedings are completed, you are found to have fulfilled and complied with all of the terms of this Agreement. Your indemnification obligations described above will continue in full force and effect after, and notwithstanding, the expiration or termination of this Agreement. THE JOINT…THE CHIROPRACTIC PLACE™ FRANCHISE AGREEMENT + +19 + + + + + + + + 9. CONFIDENTIAL INFORMATION; NON-COMPETITION. 9.1 Types of Confidential Information. We possess certain unique confidential and proprietary information and trade secrets consisting of the following categories of information, methods, techniques, products, and knowledge developed by us, including but not limited to: (1) services and products offered and sold at The Joint Corp. franchises; (2) knowledge of sales and profit performance of any one or more The Joint Corp. franchises; (3) knowledge of sources of products sold at The Joint Corp. franchises, advertising and promotional programs, and image and decor; (4) the Joint Software; (5) methods, techniques, formats, specifications, procedures, information, systems, and knowledge of, and experience in, the development, operation, and franchising of The Joint Corp. franchises; and (6) the selection and methods of training employees. We will disclose much of the above- described information to you in advising you about site selection, providing our Initial Training, the Operations Manual, the Joint Software, and providing guidance and assistance to you under this Agreement. In addition, in the course of the operation of your Franchise, you or your employees may develop ideas, concepts, methods, or techniques of improvement relating to the Franchise that you disclose to us, and that we may then authorize you to use in the operation of your Franchise, and may use or authorize others to use in other The Joint Corp. franchises owned or franchised by us or our affiliates. Any such information disclosed to or developed by you will be referred to in this Agreement as "Confidential Information". THE JOINT…THE CHIROPRACTIC PLACE™ FRANCHISE AGREEMENT + +20 + + + + + + + + 9.2 Non-Disclosure Agreement. You agree that your relationship with us does not vest in you any interest in the Confidential Information, other than the right to use it in the development and operation of the Franchise, and that the use or duplication of the Confidential Information in any other business would constitute an unfair method of competition. You acknowledge and agree that the Confidential Information belongs to us, may contain trade secrets belonging to us, and is disclosed to you or authorized for your use solely on the condition that you agree, and you therefore do agree, that you (1) will not use the Confidential Information in any other business or capacity; (2) will maintain the absolute confidentiality of the Confidential Information during and after the term of this Agreement; (3) will not make unauthorized copies of any portion of the Confidential Information disclosed in written form or another form that may be copied or duplicated; and (4) will adopt and implement all reasonable procedures we may prescribe from time to time to prevent unauthorized use or disclosure of the Confidential Information, including without limitation restrictions on disclosure to your employees, and the use of non-disclosure and non-competition agreements we may prescribe or approve for your shareholders, partners, members, officers, directors, employees, independent contractors, or agents who may have access to the Confidential Information. 9.3 Non-Competition Agreement. You agree that we would be unable to protect the Confidential Information against unauthorized use or disclosure, and would be unable to encourage a free exchange of ideas and information among The Joint Corp. franchises, if franchise owners of The Joint Corp. franchises were permitted to hold interests in any competitive businesses (as described below). Therefore, during the term of this Agreement, neither you, nor any Principal Owner, nor any member of your immediate family or of the immediate family of any Principal Owner, shall perform services for, or have any direct or indirect interest as a disclosed or beneficial owner, investor, partner, director, officer, employee, manager, consultant, representative, or agent in, any business that offers products or services the same as or similar to those offered or sold at The Joint Corp. Location franchises. The ownership of one percent (1%) or less of a publicly traded company will not be deemed to be prohibited by this Paragraph. Upon expiration or termination of this Agreement for any reason, you agree not to engage in a competitive business for a period of two (2) years after the termination or expiration and within twenty-five (25) miles of your Franchise Premises or any other The Joint Corp. Location franchise location. THE JOINT…THE CHIROPRACTIC PLACE™ FRANCHISE AGREEMENT + +21 + + + + + + + + 10. THE JOINT CORP. FRANCHISE OPERATING STANDARDS. 10.1 Condition and Appearance of the Franchise. You agree that: (a) neither the Franchise nor the Premises will be used for any purpose other than the operation of the Franchise in compliance with this Agreement; (b) you will maintain the condition and appearance of the Franchise; its equipment, furniture, furnishings, and signs; and the Premises in accordance with our standards and consistent with the image of a The Joint Corp. Location franchise as an efficiently operated business offering high quality services, and observing the highest standards of cleanliness, sanitation, efficient, courteous service and pleasant ambiance, and in that connection will take, without limitation, the following actions during the term of this Agreement: (1) thorough cleaning, repainting and redecorating of the interior and exterior of the Premises at reasonable intervals; (2) interior and exterior repair of the Premises; and (3) repair or replacement of damaged, worn out or obsolete equipment, furniture, furnishings and signs; (c) you will not make any material alterations to the Premises or the appearance of the Franchise, as originally developed, without our advance written approval. If you do so, we have the right, at our option and at your expense, to rectify alterations we have not previously approved; (d) you will promptly replace or add new equipment when we reasonably specify in order to meet changing standards or new methods of service; (e) you will expend at least Six Thousand and No/100 Dollars ($6,000.00) every four (4) years in remodeling, expansion, redecorating and/or refurnishing of the Premises and the Franchise, if deemed necessary by us (any changes to the decoration or furnishing of the Premises must be approved by us); (f) on notice from us, you will engage in remodeling, expansion, redecorating and/or refurnishing of the Premises and the Franchise to reflect changes in the operations of The Joint Corp. franchises that we prescribe and require of new franchisees, provided that (1) no material changes will be required unless there are at least two (2) years remaining on the Initial Term of the Franchise (any changes to the decoration or furnishing of the Premises must be approved by us); and (2) we have required the proposed change in at least twenty-five percent (25%) of all similarly situated Company and affiliate-owned The Joint Corp. Locations, and have undertaken a plan to make the proposed change in the balance of such Company and affiliate-owned Locations (any expenditures incurred pursuant to this Paragraph 10.1(f) shall apply to the requirement in Paragraph 10.1(e)); THE JOINT…THE CHIROPRACTIC PLACE™ FRANCHISE AGREEMENT + +22 + + + + + + + + (g) you will place or display at the Premises (interior and exterior) only those signs, emblems, designs, artwork, lettering, logos, and display and advertising materials that we from time to time approve; and (h) if at any time in our reasonable judgment, the general state of repair, appearance, or cleanliness of the premises of the Franchise or its fixtures, equipment, furniture, or signs do not meet our standards, then we shall have the right to notify you specifying the action you must take to correct the deficiency. If you do not initiate action to correct such deficiencies within (ten) 10 days after receipt of our notice, and then continue in good faith and with due diligence, a bona fide program to complete any required maintenance or refurbishing, then we shall have the right, in addition to all other remedies available to us at law or under this Agreement, to enter the Premises or the Franchise and perform any required maintenance or refurbishing on your behalf, and you agree to reimburse us on demand. 10.2 Franchise Services and Products. You agree that (a) the Franchise will offer for sale all services and products that we from time to time specify for Locations, (b) the Franchise will offer and sell approved services and products only in the manner we have prescribed; (c) you will not offer for sale or sell at the Franchise, the Premises, or any other location any services or products we have not approved; (d) all products will be offered at retail prices, and you will not offer or sell any products at wholesale prices; (e) you will not use the Premises for any purpose other than the operation of the Franchise; and (f) you will discontinue selling and offering for sale any services or products that we at any time decide (in our sole discretion) to disapprove in writing. In the event that you use, sell or distribute unauthorized products or services, and do not cease the use, sale, or distribution of unauthorized services or products within ten (10) days after written notice is given to you, we reserve the right to terminate this agreement and/or charge you a fee of One Hundred and No/100 Dollars ($100.00) for each day that you fail to comply with our demand to cease the use, sale or distribution of unauthorized products or services, which is a reasonable estimate of the damages we would incur from your continued use, sale or distribution of unauthorized products or services, and not a penalty. You agree to maintain an inventory of approved products sufficient in quantity and variety to realize the full potential of the Franchise. We may, from time to time, conduct market research and testing to determine consumer trends and the saleability of new services and products. You agree to cooperate by participating in our market research programs, test marketing new services and products in the Franchise, and providing us with timely reports and other relevant information regarding such market research. In connection with any such test marketing, you agree to offer a reasonable quantity of the products or services being tested, and effectively promote and make a reasonable effort to sell them. THE JOINT…THE CHIROPRACTIC PLACE™ FRANCHISE AGREEMENT + +23 + + + + + + + + 10.3 Approved Products, Distributors and Suppliers. We have developed or may develop various unique products or services that may be prepared according to our formulations. We have approved, and will continue to periodically approve, specifications for suppliers and distributors (which may include us and/or our affiliates) for products or services required to be purchased by, or offered and sold at, The Joint Corp. Location franchises, that meet our standards and requirements, including without limitation standards and requirements relating to product quality, prices, consistency, reliability, and customer relations. You understand and acknowledge we will not be liable to you or anyone else for any damages or claims arising out of or resulting from the acts or omissions any supplier and distributor of products or services, whether or not such supplier or distributor is an approved or required supplier or distributor of products or services. You agree that the Franchise will: (1) purchase any required products or services in such quantities as we designate; (2) utilize such formats, formulae, and packaging for products or services as we prescribe; and (3) purchase all designated products and services only from distributors and other suppliers we have approved. In the event we designate a required supplier or distributor during the term of this Agreement, or any subsequent franchise agreement, you must begin to use such required supplier or distributor with thirty (30) days of the date we notify you that you must use such supplier or distributor, unless we designate a longer period for you to switch or convert over to such supplier or distributor. Your failure or refusal to do so shall constitute a breach of this Agreement. We may approve a single distributor or other supplier (collectively "supplier") for any product, and may approve a supplier only as to certain products. We may concentrate purchases with one or more suppliers to obtain lower prices or the best advertising support or services for any group of The Joint Corp. Locations franchised or operated by us. Approval of a supplier may be conditioned on requirements relating to the frequency of delivery, concentration of purchases, standards of service (including prompt attention to complaints), or other criteria, and may be temporary, pending our continued evaluation of the supplier from time to time. If you would like to purchase any items from any unapproved supplier, then you must submit to us a written request for approval of the proposed supplier. We have the right to inspect the proposed supplier's facilities, and require that product samples from the proposed supplier be delivered, at our option, either directly to us, or to any independent, certified laboratory that we may designate, for testing. We may charge you a supplier evaluation fee (not to exceed the reasonable cost of the inspection and the actual cost of the test) to make the evaluation. We reserve the right to periodically re-inspect the facilities and products of any approved supplier, and revoke our approval if the supplier does not continue to meet any of our criteria. THE JOINT…THE CHIROPRACTIC PLACE™ FRANCHISE AGREEMENT + +24 + + + + + + + + We and/or our affiliates may be an approved supplier of certain products or services to be purchased by you for use and/or sale by the Franchise. We and our affiliates reserve the right to charge any licensed manufacturer engaged by us or our affiliates a royalty to manufacture products for us or our affiliates, or to receive commissions or rebates from vendors that supply goods or services to you. We or our affiliates may also derive income from our sale of products or services to you, and may sell these items at prices exceeding our or their costs in order to make a profit on the sale. 10.4 Hours of Operation. You agree to keep the Franchise open for business at such times and during such hours as we may prescribe from time to time. 10.5 Specifications, Standards and Procedures. You agree to comply with all mandatory specifications, standards, and operating procedures relating to the appearance, function, cleanliness, sanitation and operation of the Franchise. Any mandatory specifications, standards, and operating procedures that we prescribe from time to time in the Operations Manual, or otherwise communicate to you in writing, will constitute provisions of this Agreement as if fully set forth in this Agreement. All references to "this Agreement" include all such mandatory specifications, standards, and operating procedures. 10.6 Compliance with Laws and Good Business Practices. You agree to secure and maintain in force in your name all required licenses, permits and certificates relating to the operation of the Franchise. You also agree to operate the Franchise in full compliance with all applicable laws, ordinances, and regulations, including without limitation all government regulations relating to worker's compensation insurance, unemployment insurance, and withholding and payment of federal and state income taxes, social security taxes, and sales taxes. All advertising you employ must be completely factual, in good taste (in our judgment), and conform to the highest standards of ethical advertising and all legal requirements. You agree that in all dealings with us and any of our affiliates, other franchisees, your customers, your suppliers, and public officials, you will adhere to the highest standards of honesty, integrity, fair dealing and ethical conduct. You further agree to refrain from any business or advertising practice that may be harmful to the business of the Company, the Franchise, and/or the goodwill associated with the Marks and other The Joint Corp. franchises. THE JOINT…THE CHIROPRACTIC PLACE™ FRANCHISE AGREEMENT + +25 + + + + + + + + You must notify us in writing within 5 days of (1) the commencement of any action, suit, or proceeding, and/or of the issuance of any order, writ, injunction, award, or decree of any court, agency, or other governmental unit, that may adversely affect your and/or the Franchise's operation, financial condition, or reputation; and/or (2) your receipt or knowledge any notice of violation of any law, ordinance, or regulation relating to health or safety. 10.7 Management and Personnel of the Franchise. Unless we approve your employment of a General Manager to operate the Franchise as provided in Paragraph 4.1, you must actively participate in the actual, on-site, day-to-day operation of the Franchise, and devote as much of your time as is reasonably necessary for the efficient operation of the Franchise. If you are other than an individual, then at least one (1) Principal Owner, director, officer, or other employee of you whom we approve must comply with the this requirement. If we agree that you may employ a General Manager, then the General Manager must fulfill this requirement. Any General Manager shall each obtain all licenses and certifications required by law before assuming his or her responsibilities at the Franchise. You will ensure that your employees and independent contractors of the Franchise have any licenses as may be required by law, and hold or are pursuing any licenses, certifications, and/or degrees required by law or by us in the Operations Manual, as updated from time to time. You will be exclusively responsible for the terms of your employees' and independent contractors' employment and compensation, and for the proper training of your employees and independent contractors in the operation of the Franchise. You must establish any training programs for your employees and/or independent contractors that we may prescribe in writing from time to time. You must require all employees and independent contractors to maintain a neat and clean appearance, and conform to the standards of dress that we specify in the Operations Manual, as updated from time to time. Each of your employees and independent contractors must sign a written agreement, in a form approved by us, to maintain confidential our Confidential Information, proprietary information, and trade secrets as described in Paragraph 9.1, and to abide by the covenants not to compete described in Paragraph 9.3. You must forward to us a copy of each such signed agreement. All of your employees and independent contractors must render prompt, efficient and courteous service to all customers of the Franchise. You agree not to recruit or hire, either directly or indirectly, any employee (or a former employee, for sixty (60) days after his or her employment has ended) of any The Joint Corp. Location franchise operated by us, our affiliates, or another The Joint Corp. franchise owner without first obtaining the written consent of us, our affiliate, or the franchise owner that currently employs (or previously employed) such employee. If you violate this provision, in addition to any other right or remedy we may have, you agree to pay the employee's current or former employer twice the employee's annual salary, plus all costs and attorneys' fees incurred as a result of the violation. This amount is set at twice the employee's annual salary because it is a reasonable estimation of the damages that would occur from such a breach, and it will almost certainly be impossible to calculate precisely the actual damages from such a breach. THE JOINT…THE CHIROPRACTIC PLACE™ FRANCHISE AGREEMENT + +26 + + + + + + + + 10.8 Insurance. Before you open the Franchise and during any Term of this Agreement, you must maintain in force, under policies of insurance written on an occurrence basis issued by carriers with an A.M. Best rating of A-VIII or better approved by us, and in such amounts as we may determine from time to time: (1) comprehensive public, professional, product, medical malpractice and motor vehicle liability insurance against claims for bodily and personal injury, death and property damage caused by or occurring in conjunction with the operation of the Franchise or otherwise in conjunction with your conduct of the Franchise Business pursuant to this Agreement, under one or more policies of insurance containing minimum liability coverage amounts as set forth in the Operations Manual; (2) general casualty insurance, including theft, cash theft, fire and extended coverage, vandalism and malicious mischief insurance, for the replacement value of the Franchise and its contents, and any other assets of the Franchise; (3) worker's compensation and employer's liability insurance as required by law, with limits equal to or in excess of those required by statute; (4) business interruption insurance for a period adequate to reestablish normal business operations, but in any event not less than six (6) months; (5) any other insurance required by applicable law, rule, regulation, ordinance or licensing requirements; and (6) umbrella liability coverage with limits of not less than $1,000,000/$3,000,000 or such other amounts that we may establish in the Operations Manual. You must purchase such insurance coverage(s) only from our approved or designated supplier(s). We may periodically increase or decrease the amounts of coverage required under these insurance policies, and/or require different or additional kinds of insurance, including excess liability insurance, to reflect inflation, identification of new risks, changes in law or standards of liability, higher damage awards, or other relevant changes in circumstances. Each insurance policy must name us (and, if we so request, our members, directors, employees, agents, and affiliates) as additional insureds, and must provide us with thirty (30) days' advance written notice of any material modification, cancellation, or expiration of the policy. Deductibles must be in reasonable amounts, and are subject to review and written approval by us. You must provide us with copies of policies evidencing the existence of such insurance concurrently with execution of this Agreement and prior to each subsequent renewal date of each insurance policy, along with certificates evidencing such insurance. You are responsible for any and all claims, losses or damages, including to third persons, originating from, in connection with, or caused by your failure to name us as an additional insured on each insurance policy. You agree to defend, indemnify and hold us harmless of, from, and with respect to any such claims, loss or damage arising out of your failure to name us as additional insured, which indemnity shall survive the termination or expiration and non-renewal of this Agreement. THE JOINT…THE CHIROPRACTIC PLACE™ FRANCHISE AGREEMENT + +27 + + + + + + + + Prior to the expiration of the term of each insurance policy, you must furnish us with a copy of a renewal or replacement insurance policy and appropriate certificates of insurance. If you at any time fail or refuse to maintain any insurance coverage required by us or to furnish satisfactory evidence thereof, then we, at our option and in addition to our other rights and remedies under this Agreement, may, but need not, obtain such insurance coverage on your behalf, and you shall reimburse us on demand for any costs or premiums paid or incurred by us, including any administrative fees or surcharges that we may incur. If you fail to pay us within ten (10) days of our demand for reimbursement, we reserve the right to debit your account the amounts owed to us for any premiums paid on your behalf for such insurance coverage along with any other costs, surcharges expenses and fees we incur to obtain such coverage on your behalf or on behalf of your franchise. We reserve the right to require you to provide us with an application for insurance (in a form acceptable to our required supplier for insurance) for any medical professional that has been offered a position to work in a Franchise location so that we may, if you fail to do so, procure any necessary insurance coverage for such medical professional. Notwithstanding the existence of such insurance, you are and will be responsible for all loss or damage and contractual liability to third persons originating from or in connection with the operation of the Franchise, and for all claims or demands for damages to property or for injury, illness or death of persons directly or indirectly resulting therefrom; and you agree to defend, indemnify and hold us harmless of, from, and with respect to any such claims, loss or damage, which indemnity shall survive the termination or expiration and non-renewal of this Agreement. In addition to the requirements of the foregoing paragraphs of this Paragraph 10.8, you must maintain any and all insurance coverage in such amounts and under such terms and conditions as may be required in connection with your lease or purchase of the Premises. Your obligation to maintain insurance coverage as described in this Agreement will not be reduced in any manner by reason of any separate insurance we maintain on our own behalf, nor will our maintenance of that insurance relieve you of any obligations under Section 7 of this Agreement. 10.9 Credit Cards and Other Methods of Payment. You must at all times have arrangements in existence with Visa, Master Card, American Express, Discover and any other credit and debit card issuers or sponsors, check verification services, and electronic fund transfer systems that we designate from time to time, in order that the Franchise may accept customers' credit and debit cards, checks, and other methods of payment. We may require you to obtain such services through us or our affiliates. THE JOINT…THE CHIROPRACTIC PLACE™ FRANCHISE AGREEMENT + +28 + + + + + + + + 10.10 Pricing. To the extent permitted by applicable law, we may periodically establish maximum and/or minimum prices for services and products that the Franchise location offers, including without limitation, prices for promotions in which all or certain The Joint Franchise locations participate. If we establish such prices for any services or products, you agree not to exceed or reduce that price, but will charge the price for the service or product that we establish. You hereby agree to apply any pricing matrix or schedule established by us. If you wish to offer an alternate pricing matrix, you must obtain our prior written approval. In states where you must enter a Management Agreement (Section 2.3), this provision shall be modified, to the extent legally permissible, and/or legally construed to conform to the laws of the state where your Franchise location will be located. 11. ADVERTISING. 11.1 By Company. As stated in Paragraph 6.3, due to the value of advertising and the importance of promoting the public image of The Joint Corp. Location franchises, we will establish, maintain, and administer one or more Ad Funds to support and pay for national, regional, and/or local marketing programs that we deem necessary, desirable, or appropriate to promote the goodwill and image of all The Joint Corp. Location franchises. You will contribute to the Ad Fund the Advertising Fee set forth in Section 6.3. We agree that any Locations owned by us or our affiliates will contribute to the Ad Fund on at least the same basis as you do. We will be entitled to direct all advertising programs financed by the Ad Fund, with sole discretion over the creative concepts, materials, and endorsements used in them, and the geographic, market, and media placement and allocation of the programs. We will have the sole discretion to use the Ad Fund to pay the costs of preparing and producing video, audio, and written advertising materials; administering regional, multi- regional and/or national advertising programs; including purchasing direct mail and other media advertising; employing advertising agencies and supporting public relations, market research, and other advertising and marketing firms; and paying for advertising and marketing activities that we deem appropriate, including the costs of participating in any national or regional trade shows. and providing advertising and marketing materials to The Joint Corp. Location franchises. We may in our discretion use the Ad Fund to engage in advertising and promotional programs that benefit only one or several regionals, and not necessarily all Location franchises Ad Funds. The Ad Fund will furnish you with approved advertising materials at its direct cost of producing those advertising materials. The amounts you contribute to the Ad Fund will not be used for placement of advertising in television, radio, newspaper or other media. Rather, any collective media placement will be conducted through the local and regional advertising cooperatives described in Section 11.3. THE JOINT…THE CHIROPRACTIC PLACE™ FRANCHISE AGREEMENT + +29 + + + + + + + + The Ad Fund will be accounted for separately from other funds of the Company, and will not be used to defray any of our general operating expenses, except for any reasonable salaries, administrative costs, and overhead we may incur in activities reasonably related to the administration of the Ad Fund and its advertising programs (including without limitation conducting market research, preparing advertising and marketing materials, and collecting and accounting for contributions to the Ad Fund). We may spend in any fiscal year an amount greater or less than the total contributions to the Ad Fund in that year. We may cause the Ad Fund to borrow from us or other lenders to cover deficits of the Ad Fund, or to invest any surplus for future use by the Ad Fund. You authorize us to collect for remission to the Ad Fund any advertising monies or credits offered by any supplier to you based upon purchases you make. We will prepare an annual statement of monies collected and costs incurred by the Ad Fund and will make it available to you on written request. You understand and acknowledge that the Ad Fund will be intended to maximize recognition of the Marks and patronage of The Joint Corp. Location franchises. Although we will endeavor to use the Ad Fund to develop advertising and marketing materials, and to place advertising in a manner that will benefit all The Joint Corp. Location franchises, we undertake no obligation to ensure that expenditures by the Ad Fund in or affecting any geographic area are proportionate or equivalent to contributions to the Ad Fund by The Joint Corp. Location franchises operating in that geographic area, or that any The Joint Corp. Location franchise will benefit directly or in proportion to its contribution to the Ad Fund from the development of advertising and marketing materials or the placement of advertising. Except as expressly provided in this Paragraph, we assume no direct or indirect liability or obligation to you with respect to the maintenance, direction, or administration of the Ad Fund. We will have the right to terminate the Ad Fund by giving you thirty (30) days' advance written notice. All unspent monies on date of termination will be divided between the Company and the contributing The Joint Corp. Location franchisees in proportion to our and their respective contributions. At any time thereafter, we will have the right to reinstate the Ad Fund under the same terms and conditions as described in this Section (including the rights to terminate and reinstate the Ad Fund) by giving you thirty (30) days' advance written notice of reinstatement. THE JOINT…THE CHIROPRACTIC PLACE™ FRANCHISE AGREEMENT + +30 + + + + + + + + 11.2 By Franchise Owner. You must spend, in addition to any contributions to the Ad Fund, a minimum of the greater of (a) Three Thousand and No/100 Dollars ($3,000.00); or (b) five percent (5%) of the Franchise's gross revenues for each month during the term of this Agreement, as outlined in Paragraph 6.4, for local advertising, promotion and marketing. You must provide us (in a form we approve or designate) evidence of your required local advertising, marketing and promotional expenditures by the thirtieth (30th) day of each month, for the preceding calendar month, along with a year- to-date report of the total amount spent on local advertising. You agree to list and advertise the Franchise in each of the classified telephone directories distributed within your market area, in those business classifications as we prescribe from time to time, using any standard form of classified telephone directory advertisement we may provide. On each occasion before you use them, samples of all local advertising and promotional materials not prepared or previously approved by us must be submitted to us for approval. If you do not receive our written disapproval within fifteen (15) days from the date we receive the materials, the materials will be deemed to have been approved. You agree not to use any advertising or promotional materials that we have disapproved. You will be solely responsible and liable to ensure that all advertising, marketing, and promotional materials and activities you prepare comply with applicable federal, state, and local law, and the conditions of any agreements or orders to which you may be subject. 11.3 Regional Advertising Cooperatives. In the event that more than one The Joint Corp. Location franchise is located in an area of dominant influence ("ADI"), we reserve the right to form a regional advertising cooperative (the "Regional Ad Co-op"). We also reserve the right to require you to join the Regional Ad Co-op and to contribute to its funding. We reserve the right to determine the amount to be contributed by each member of the Regional Ad Co-op as necessary. The required contributions to any Regional Ad Co-op will not be credited against the Local Advertising Requirement set forth in Paragraphs 6.4(a) and 11.2. 11.4 Websites and Other Forms of Advertising Media. You acknowledge and agree that any Website or Other Forms of Advertising Media (as defined below) will be deemed "advertising" under this Agreement, and will be subject to, among other things, the need to obtain our prior written approval in accordance with Paragraphs 7.2 and 11.2. As used in this Agreement, the term or reference to "Website or Other Forms of Advertising Media" means any interactive system, including but not limited to all types of online communications, virtual applications, social media, or the like, including but not limited to Groupon, Living Social, Facebook, Twitter, etc., that you operate or use, or authorize others to operate or use, and that refer to the Franchise, the Marks, us, and/or the System. The term or reference Website or Other Forms of Advertising Media includes, but is not limited to, Internet and World Wide Web home pages. In connection with any Website or Other Forms of Advertising Media, you agree to the following: THE JOINT…THE CHIROPRACTIC PLACE™ FRANCHISE AGREEMENT + +31 + + + + + + + + (a) Before establishing any Website or Other Form of Advertising Media, you will submit to us a sample of such Website or Other Form of Advertising Media format and information in the form and manner we may require. (b) You will not establish or use any Website or Other Forms of Advertising Media without our prior written approval. (c) In addition to any other applicable requirements, you must comply with our standards and specifications for Website or Other Forms of Advertising Media as we prescribe in the Operations Manual or otherwise in writing, including any specifications relating to the use of organic and paid search engine optimization, keyword and landing page management. If we require, you will establish a website as part of our corporate website and/or establish electronic links to our corporate website. (d) If you propose any material revision to Website or Other Forms of Advertising Media or any of the information contained therein, you will submit each such revision to us for our prior written approval. 12. ACCOUNTING, REPORTS AND FINANCIAL STATEMENTS. You agree to maintain, at your own expense, the Joint Software and accounting software, to act as a bookkeeping, accounting, and record keeping system for the Franchise. The Joint Software includes the capability of being polled by our central computer system, which you agree to permit. With respect to the operation and financial condition of the Franchise, we will pull from the Joint Software (if available), or require you to provide from your accounting software in a form we designate, or in accordance with General Acceptably Accounting Principles ("GAAP"), as the case may be, the following: (1) by Tuesday of each week, an electronic report of the Franchise's gross revenues for the preceding week ending on, and including, Sunday, and any other data, information, and supporting records that we may require; (2) by the thirtieth (30 t h) day of each month, a profit and loss statement for the preceding calendar month, and a year-to-date profit and loss statement and balance sheet; (3) within ninety (90) days after the end of your fiscal year, a fiscal year-end balance sheet, and an annual profit and loss statement for that fiscal year, reflecting all year- end adjustments; and (4) such other reports as we require from time to time (collectively, the "Reports"). You agree to input all Franchise transactions into the Joint Software and your accounting software in a timely manner to ensure that all Reports are accurate. If it is determined that any information was omitted from the Joint Software or your accounting software was input inaccurately, or you have failed to provide us any required Reports, we may charge a non-refundable accounting fee of One Hundred and No/100 Dollars ($100.00), payable in a lump sum by the fifth (5th) day of the month following the month during which the inaccurate report was submitted or for any late Reports. You agree to maintain and furnish upon our request complete copies of federal and state income tax returns you file with the Internal Revenue Service and state tax departments, reflecting revenues and income of the Franchise or the corporation, partnership, or limited liability company that holds the Franchise. We reserve the right to require you to have audited or reviewed financial statements prepared by a certified public accountant on an annual basis. You agree to retain hard copies of all records for a minimum of four (4) years. THE JOINT…THE CHIROPRACTIC PLACE™ FRANCHISE AGREEMENT + +32 + + + + + + + + 13. INSPECTIONS AND AUDITS. 13.1 Company's Right to Inspect the Franchise. To determine whether you and the Franchise are complying with this Agreement and the specifications, standards, and operating procedures we prescribe for the operation of the Franchise, we or our agents have the right, at any reasonable time and without advance notice to you, to: (1) inspect the Premises; (2) observe the operations of the Franchise for such consecutive or intermittent periods as we deem necessary; (3) interview personnel of the Franchise; (4) interview customers of the Franchise; and (5) inspect and copy any books, records and documents relating to the operation of the Franchise. You agree to fully cooperate with us in connection with any of those inspections, observations and interviews. You agree to present to your customers any evaluation forms we periodically prescribe, and agree to participate in, and/or request that your customers participate in, any surveys performed by or on our behalf. Based on the results of any such inspections and audits and your other reports, we may provide to you such guidance and assistance in operating your Franchise as we deem appropriate. 13.2 Company's Right to Audit. We have the right at any time during business hours, and without advance notice to you, to inspect and audit, or cause to be inspected and audited, the business records, bookkeeping and accounting records, sales and income tax records and returns and other records of the Franchise, and the books and records of any corporation, limited liability company, or partnership that holds the Franchise. You agree to fully cooperate with our representatives and any independent accountants we may hire to conduct any inspection or audit. If the inspection or audit is necessary because of your failure to furnish any reports, supporting records, other information or financial statements as required by this Agreement, or to furnish such reports, records, information, or financial statements on a timely basis, or if an understatement of gross revenues for any period is determined by an audit or inspection to be greater than two percent (2%), then you agree to pay us all monies owed, plus interest of one and one-half percent (1.5%) per month, and reimburse us for the cost of such inspection or audit, including without limitation any attorneys' fees and/or accountants' fees we may incur, and the travel expenses, room and board, and applicable per diem charges for our employees or contractors. The above remedies are in addition to all our other remedies and rights under this Agreement or under applicable law. THE JOINT…THE CHIROPRACTIC PLACE™ FRANCHISE AGREEMENT + +33 + + + + + + + + 14. TRANSFER REQUIREMENTS. 14.1 Organization. If you are a corporation, partnership or limited liability company (or if this Agreement is assigned to a corporation, partnership or limited liability company with our approval), you represent and warrant to us that you are and will continue to be throughout the term of this Agreement, duly organized and validly existing in good standing under the laws of the state of your incorporation, registration or organization, that you are qualified to do business and will continue to be qualified to do business throughout the term of this Agreement in all states in which you are required to qualify, that you have the authority to execute, deliver and carry out all of the terms of this Agreement, and that during the term of this Agreement the only business you (i.e., the corporate, partnership or limited liability entity) will conduct will be the development, ownership and operation of the Franchise. 14.2 Interests in Franchise Owner; Reference to Exhibit 4. You and each Principal Owner represent, warrant and agree that all "Interests" in Franchise Owner are owned in the amount and manner described in Exhibit 4. No Interests in Franchise Owner will, during the term of this Agreement, be "public" securities (i.e., securities that require, for their issuance, registration with any state or federal authority). (An "Interest" is defined to mean any shares, membership interests, or partnership interests of Franchise Owner and any other equitable or legal right in any of Franchise Owner's stock, revenues, profits, rights or assets. When referring to Franchise Owner's rights or assets, an "Interest" means this Agreement, Franchise Owner's rights under and interest in this Agreement, any The Joint Corp. franchise, or the revenues, profits or assets of any The Joint Corp. franchise.) You and each Principal Owner also represent, warrant, and agree that no Principal Owner's Interest has been given as security for any obligation (i.e., no one has a lien on or security interest in a Principal Owner's Interest), and that no change will be made in the ownership of an Interest other than as expressly permitted by this Agreement or as we may otherwise approve in writing. You and each Principal Owner agree to furnish us with such evidence as we may request from time to time to assure ourselves that the Interests of Franchise Owner and each of your Principal Owners remain as permitted by this Agreement, including a list of all persons or entities owning any Interest, as defined above. If you have transferred your Interests in violation of this Agreement you shall be considered in breach of this Agreement. THE JOINT…THE CHIROPRACTIC PLACE™ FRANCHISE AGREEMENT + +34 + + + + + + + + 14.3 Transfer by Company. This Agreement is fully transferable by us and will inure to the benefit of any person or entity to whom it is transferred, or to any other legal successor to our interests in this Agreement. 14.4 No Transfer Without Approval. You understand and acknowledge that the rights and duties created by this Agreement are personal to you and that we have entered into this Agreement in reliance on the individual or collective character, skill, aptitude, attitude, business ability, and financial capacity of you and your Principal Owners. Accordingly, neither this Agreement nor any part of your interest in it, nor any Interest (as defined in Paragraph 14.2) of Franchise Owner or a Principal Owner, may be transferred (see definition below) without our advance written approval if such transfer will result in the Principal Owner(s) set forth in Exhibit 4 holding less than a seventy-five percent (75%) Interest in Franchise Owner. Any Transfer that is made without our approval will constitute a breach of this Agreement and convey no rights to or interests in this Agreement, you, the Franchise, or any other The Joint Corp. franchise. As used in this Agreement the term "Transfer" means any voluntary, involuntary, direct or indirect assignment, sale, gift, exchange, grant of a security interest, or occurrence of any other event which would or might change the ownership of any Interest, and includes, without limitation: (1) the Transfer of ownership of capital stock, partnership interest or other ownership interest (including the granting of options (such as stock options or any option which give anyone ownership rights now or in the future); (2) merger or consolidation, or issuance of additional securities representing an ownership interest in Franchise Owner; (3) sale of common stock of Franchise Owner sold pursuant to a private placement or registered public offering; (4) Transfer of an Interest in a divorce proceeding or otherwise by operation of law; or (5) Transfer of an Interest by will, declaration of or transfer in trust, or under the laws of intestate succession. We will not unreasonably withhold consent to a Transfer of an Interest by a Principal Owner to a member of his or her immediate family or to your key employees, so long as all Principal Owners together retain a "controlling Interest" (i.e., the minimum ownership percentage listed in Exhibit 4), although we reserve the right to impose reasonable conditions on the Transfer as a requirement for our consent. Interests owned by persons other than the Principal Owners ("minority owners") may be Transferred without our advance consent unless the Transfer would give that transferee and any person or group of persons affiliated or having a common interest with the transferee more than a collective twenty-five percent (25%) Interest in Franchise Owner, in which case our advance written approval for the Transfer must be obtained. Your formal partnership, corporation or other formation documents and all stock certificates, partnership units or other evidence of ownership must recite or bear a legend reflecting the transfer restrictions of this Paragraph 14.4. THE JOINT…THE CHIROPRACTIC PLACE™ FRANCHISE AGREEMENT + +35 + + + + + + + + 14.5 Conditions for Approval of Transfer. If you and your Principal Owners are in full compliance with this Agreement, we will not unreasonably withhold our approval of a Transfer that meets all the applicable requirements of this Section 14. The person or entity to whom you wish to make the Transfer, or its principal owners ("Proposed New Owner"), must be individuals of good moral character and otherwise meet our then-applicable standards for The Joint Corp. Location franchisees. If you propose to Transfer this Agreement, the Franchise or its assets, or any Interest, or if any of your Principal Owners proposes to Transfer a controlling Interest in you or make a Transfer that is one of a series of Transfers which taken together would constitute the Transfer of a controlling Interest in you, then all of the following conditions must be met before or at the time of the Transfer: (a) the Proposed New Owner must have sufficient business experience, aptitude, and financial resources to operate the Franchise; (b) you must pay any amounts owed for purchases from us and our affiliates, and any other amounts owed to us or our affiliates which are unpaid; (c) the Proposed New Owner's directors and such other personnel as we may designate must have successfully completed our Initial Training program, and shall be legally authorized and have all licenses necessary to perform the services offered by the Franchise. The Proposed New Owner shall be responsible for any wages and compensation owed to, and the travel and living expenses (including all transportation costs, room, board and meals) incurred by, the attendees who attend the Initial Training program; (d) if your lease for the Premises requires it, the lessor must have consented to the assignment of the lease of the Premises to the Proposed New Owner; (e) you (or the Proposed New Owner) must pay us a Transfer fee equal to seventy-five percent (75%) of the then current initial franchise fee we charge to new Start-up Location franchisees, and must reimburse us for any reasonable expenses incurred by us in investigating and processing any Proposed New Owner where the Transfer is not consummated for any reason; (f) you and your Principal Owners and your and their spouses must execute a general release (in a form satisfactory to us) of any and all claims you and/or they may have against us, our affiliates, and our and our affiliates' respective officers, directors, employees, and agents; THE JOINT…THE CHIROPRACTIC PLACE™ FRANCHISE AGREEMENT + +36 + + + + + + + + (g) we must approve the material terms and conditions of the proposed Transfer, including without limitation that the price and terms of payment are not so burdensome as to adversely affect the operation of the Franchise; (h) the Franchise and the Premises shall have been placed in an attractive, neat and sanitary condition; (i) you and your Principal Owners must enter into an agreement with us providing that all obligations of the Proposed New Owner to make installment payments of the purchase price (and any interest on it) to you or your Principal Owners will be subordinate to the obligations of the Proposed New Owner to pay any amounts payable under this Agreement or any new Franchise Agreement that we may require the Proposed New Owner to sign in connection with the Transfer; (j) you and your Principal Owners must enter into a non-competition agreement wherein you agree not to engage in a competitive business for a period of two (2) years after the Transfer and within twenty-five (25) miles of your Franchise Premises or any other The Joint Corp. Location franchise location; (k) the Franchise shall have been determined by us to contain all equipment and fixtures in good working condition, as were required at the initial opening of the Franchise. The Proposed New Owner shall have agreed, in writing, to make such reasonable capital expenditures to remodel, equip, modernize and redecorate the interior and exterior of the premises in accordance with our then existing plans and specifications for a The Joint Corp. Location franchise, and shall have agreed to pay our expenses for plan preparation or review, and site inspection; (l) upon receiving our consent for the Transfer or sale of the Franchise, the Proposed New Owner shall agree to assume all of your obligations under this Agreement in a form acceptable to us, or, at our option, shall agree to execute a new Franchise Agreement with us in the form then being used by us. We may, at our option, require that you guarantee the performance, and obligations of the Proposed New Owner; and (m) you must have properly offered us the opportunity to exercise our right of first refusal as described below, and we must have then declined to exercise it. THE JOINT…THE CHIROPRACTIC PLACE™ FRANCHISE AGREEMENT + +37 + + + + + + + + 14.6 Right of First Refusal. If you or any of your Principal Owners wishes to Transfer any Interest, we will have a right of first refusal to purchase that Interest as follows. The party proposing the Transfer (the "transferor") must obtain a bona fide, executed written offer (accompanied by a "good faith" earnest money deposit of at least five percent (5%) of the proposed purchase price) from a responsible and fully disclosed purchaser, and must submit an exact copy of the offer to us. You also agree to provide us with any other information we need to evaluate the offer, if we request it within five (5) days of receipt of the offer. We have the right, exercisable by delivering written notice to the transferor within fifteen (15) days from the date of last delivery to us of the offer and any other documents we have requested, to purchase the Interest for the price and on the terms and conditions contained in the offer, except that we may substitute cash for any form of payment proposed in the offer, and will not be obligated to pay any "finder's" or broker's fees that are a part of the proposed Transfer. We also will not be required to pay any amount for any claimed value of intangible benefits, for example, possible tax benefits that may result by structuring and/or closing the proposed Transfer in a particular manner or for any consideration payable other than the bona fide purchase price for the Interest proposed to be transferred. (In fact, we may in our sole and absolute discretion withhold consent to any proposed Transfer if the offer directly or indirectly requires payment of any consideration other than the bona fide purchase price for the Interest proposed to be transferred.) Our credit will be deemed equal to the credit of any other proposed purchaser, and we will have at least sixty (60) days to prepare for closing. We will be entitled to all customary representations and warranties given purchasers in connection with such sales. If the proposed Transfer includes assets not related to the operation of the Franchise, we may purchase only the assets related to the operation of the Franchise or may also purchase the other assets. (An equitable purchase price will be allocated to each asset included in the Transfer.) If we do not exercise our right of first refusal, the transferor may complete the sale to the Proposed New Owner pursuant to and on the terms of the offer, as long as we have approved the Transfer as provided in this Section 14. You must immediately notify us of any changes in the terms of an offer. Any material change in the terms of an offer before closing will make it a new offer, revoking any previous approval or previously made election to purchase and giving us a new right of first refusal effective as of the day we receive formal notice of a material change in the terms. If the sale to the Proposed New Owner is not completed within one hundred twenty (120) days after we have approved the Transfer, our approval of the proposed Transfer will expire. Any later proposal to complete that proposed Transfer will be deemed a new offer, giving us a new right of approval and right of first refusal effective as of the day we receive formal notice of the new (or continuing) proposal. We will not exercise a right of first refusal with respect to a proposed Transfer of less than a controlling interest to a member of a Principal Owner's immediate family or to your key employees. THE JOINT…THE CHIROPRACTIC PLACE™ FRANCHISE AGREEMENT + +38 + + + + + + + + 14.7 Death and Disability. Upon the death or permanent disability of you or a Principal Owner, the executor, administrator, conservator or other personal representative of the deceased or disabled person must Transfer the deceased or disabled person's Interest within a reasonable time, not to exceed forty-five (45) days from the date of death or permanent disability, to a person we have approved. Such Transfers, including without limitation transfers by a will or inheritance, will be subject to all the terms and conditions for assignments and Transfers contained in this Agreement. Failure to so dispose of an Interest within the forty-five (45) day period of time will constitute grounds for termination of this Agreement. 14.8 Effect of Consent to Transfer. Our consent to a proposed Transfer pursuant to this Section 14 will not constitute a waiver of any claims we may have against you or any Principal Owner, nor will it be deemed a waiver of our right to demand exact compliance with any of the terms or conditions of this Agreement by the Proposed New Owner. 14.9 Consent Not Unreasonably Delayed. If all the conditions are met to transfer the FA or any interest therein, we will not unreasonably delay granting our consent to the transfer. 15. TERMINATION OF THE FRANCHISE. We have the right to terminate this Agreement effective upon delivery of notice of termination to you, if: (1) you do not develop or open the Franchise as provided in this Agreement; (2) you abandon, surrender, transfer control of, lose the right to occupy the Premises of, or do not actively operate, the Franchise, or your lease for or purchase of the location of the Franchise is terminated for any reason; (3) you or your Principal Owners assign or Transfer this Agreement, any Interest, the Franchise, or assets of the Franchise without complying with the provisions of Section 14; (4) you are adjudged a bankrupt, become insolvent or make a general assignment for the benefit of creditors; (5) you use, sell, distribute or give away any unauthorized services or products, and do not cease the use, sale, or distribution of unauthorized services or products within ten (10) days after written notice is given to you; (6) you fail to maintain a valid license to practice and/or fail to maintain compliance with state and federal regulations and do not cure the failure within twenty (20) days after written notice is given to you; (7) you or any of your Principal Owners are convicted of or plead no contest to a felony or are convicted or plead no contest to any crime or offense that is likely to adversely affect the reputation of the Company, the Franchise, and/or the goodwill associated with the Marks; (8) you are involved in any action that is likely to adversely affect the reputation of the Company, the Franchise, and/or the goodwill associated with the Marks; (9) you or any of your employees violate any health or safety law, ordinance or regulation, or operate the Franchise in a manner that presents a health or safety hazard to your customers or the public; (10) you do not pay when due any monies owed to us or our affiliates, and do not make such payment within ten (10) days after written notice is given to you; (11) you fail to meet the minimum local advertising expenditures required in Section 11.2, and to provide the required proof of your expenditures; (12) you or any of your Principal Owners fail to comply with any other provision of this Agreement or any mandatory specification, standard, or operating procedure or you fail to make changes required to comply with applicable state or federal laws within twenty (20) days after written notice of such failure to comply is given to you; (13) you fail to procure or maintain any and all insurance coverage that we require, or otherwise fail to name us as an additional insured on any such insurance policies and failure to do so within ten (10) days after written notice is given to you; or (13) you or any of your Principal Owners fail on three (3) or more separate occasions within any twelve (12) consecutive month period to submit when due any financial statements, reports or other data, information, or supporting records; pay when due any amounts due under this Agreement; or otherwise fail to comply with this Agreement, whether or not such failures to comply are corrected after notice is given to you or your Principal Owners. THE JOINT…THE CHIROPRACTIC PLACE™ FRANCHISE AGREEMENT + +39 + + + + + + + + In addition, if, in the opinion of our legal counsel, any provision of this Agreement is contrary to law, then you and we agree to negotiate in good faith an amendment that would make this Agreement conform to the applicable legal requirements. If you and we are unable to reach such an agreement, or if fundamental changes to this Agreement are required to make it conform to the legal requirements, then we reserve the right to terminate this Agreement upon notice to you, in which case all of the post-termination obligations set forth in Section 16 shall apply. In the event that we terminate this Agreement under this Section or other applicable provisions of this Agreement, we shall be entitled, in those states in which such termination fees are enforceable, to receive from you a termination fee in the amount equal to one-half (1/2) of our then- current initial franchise fee for new The Joint Corp. Location franchises (the "Termination Fee"). The Termination Fee shall be payable by you in addition to any damages payable to us, including loss of future revenues, resulting from your improper or wrongful breach or other termination of this Agreement. We shall be entitled to recover all costs, including attorneys' fees, incurred in connection with the termination and collection of the Termination Fee. If you continue to operate the Franchise after termination of this Agreement, in addition to any other right or remedy we may have (including the Termination Fee), you agree to pay to us the amount of One Thousand and No/100 Dollars ($1,000.00) per day that you operate the Franchise in violation of this Agreement, plus all costs and attorneys' fees incurred as a result of the violation. This amount is set at $1,000 per day because it is a reasonable estimation of the damages that would occur from such a breach, and it will almost certainly be impossible to calculate precisely the actual damages from such a breach. THE JOINT…THE CHIROPRACTIC PLACE™ FRANCHISE AGREEMENT + +40 + + + + + + + + 16. RIGHTS AND OBLIGATIONS OF COMPANY AND FRANCHISE OWNER UPON TERMINATION OR EXPIRATION OF THE FRANCHISE. 16.1 Payment of Amounts Owed to Company. You agree to pay us within five (5) days after the effective date of termination or expiration of the Franchise, or any later date that the amounts due to us are determined, all amounts owed to us or our affiliates which are then unpaid. 16.2 Marks. You agree that after the termination or expiration of the Franchise you will: (a) not directly or indirectly at any time identify any business with which you are associated as a current or former The Joint Corp. franchise or franchisee; (b) not use any Mark or any colorable imitation of any Mark in any manner or for any purpose, or use for any purpose any trademark or other commercial symbol that suggests or indicates an association with us; (c) return to us or destroy (whichever we specify) all customer lists, forms and materials containing any Mark or otherwise relating to a The Joint Corp. franchise; (d) remove all Marks affixed to uniforms or, at our direction, cease to use those uniforms; and (e) take any action that may be required to cancel all fictitious or assumed name or equivalent registrations relating to your use of any Mark. 16.3 De-Identification. If you retain possession of the Premises, you agree to completely remove or modify, at your sole expense, any part of the interior and exterior decor that we deem necessary to disassociate the Premises with the image of a The Joint Corp. franchise, including any signage bearing the Marks. If you do not take the actions we request within thirty (30) days after notice from us, we have the right to enter the Premises and make the required changes at your expense, and you agree to reimburse us for those expenses on demand. 16.4 Confidential Information. You agree that on termination or expiration of the Franchise you will immediately cease to use any of the Confidential Information, and agree not to use it in any business or for any other purpose. You further agree to immediately return to us all copies of the Operations Manual and any written Confidential Information or other confidential materials that we have loaned or provided to you. Upon THE JOINT…THE CHIROPRACTIC PLACE™ FRANCHISE AGREEMENT + +41 + + + + + + + + 16.5 Joint Software. You agree that on termination or expiration of the Franchise, you will immediately cease to use the Joint Software and will uninstall it from all computer systems owned by the Franchise. 16.6 Company's Option to Purchase the Franchise. Upon the termination or expiration of the Franchise, we will have the option, but not the obligation, exercisable for thirty (30) days upon written notice to you, to purchase at fair market value all of the assets of the Franchise, including all approved equipment, fixtures, furniture and signs and all supplies, materials, and other items imprinted with any Mark, and to take an assignment of the lease for the Premises and any other lease or concession agreement necessary for the operation of the Franchise. If you and we cannot agree on the fair market value of the assets of the Franchise within a reasonable time, such value shall be determined by an average of the appraisals of two (2) independent appraisers, one of whom will be selected by you and one of whom will be selected by us. If the appraisals differ by more than ten percent (10%), then you and we will mutually agree on a value, or if you and we cannot agree, our appraisers will select a third appraiser whose determination of market value will be final. We shall not assume any liabilities, debts or obligations of the Franchise in connection with any such transfer, and you will indemnify us from any and all claims made against us arising out of any such transfer of the assets of the Franchise. All parties will comply with all applicable laws in connection with any such transfer, and you agree to cooperate with us in complying with all such requirements. The closing shall occur within thirty (30) days after we exercise our option to purchase the assets or such later date as may be necessary to comply with applicable bulk sales or similar laws. At the closing, you and we both agree to execute and deliver all documents necessary to vest title in the purchased assets and/or real property in us free and clear of all liens and encumbrances, except those assumed by us and/or to effectuate the lease of the Franchise Premises. You also agree to provide us with all information necessary to close the transaction. We reserve the right to assign our option to purchase the Franchise or designate a substitute purchaser for the Franchise. By signing this Agreement, you irrevocably appoint us as your lawful attorney-in-fact with respect to the matters contemplated by this Paragraph 16.6, with full power and authority to execute and deliver in your name all documents required to be provided by you under this Paragraph in the event you do not provide them in a timely and proper manner. You also agree to ratify and confirm all of our acts as your lawful attorney-in-fact, and indemnify and hold us harmless from all claims, liabilities, losses or damages suffered by us in so doing. THE JOINT…THE CHIROPRACTIC PLACE™ FRANCHISE AGREEMENT + +42 + + + + + + + + Once we give notice that we will purchase the Franchise assets, we will have the right to immediately take over the operations of the Franchise. From the date we take over the Franchise to the date of closing of the purchase of the Franchise assets, we will be entitled to use any gross revenues of the Franchise to operate the Franchise, and to retain as a management fee up to ten percent (10%) of the balance of such gross revenues after operating expenses are paid, plus any additional costs and expenses we may incur. 16.7 Continuing Obligations. All obligations of this Agreement (whether yours or ours) that expressly or by their nature survive the expiration or termination of this Agreement will continue in full force and effect after and notwithstanding its expiration or termination until they are satisfied in full or by their nature expire. 16.8 Management of the Franchise. In the event that we are entitled to terminate this Agreement in accordance with Section 15 above or any other provision of this Agreement, and in addition to any other rights or and remedies available to us in the event of such termination, we may, but need not, assume the Franchise's management. All gross revenues from the Franchise's operation while we assume its management will be kept in a separate account, and all of the Franchise's expenses will be charged to this account. We may charge you (in addition to the Royalty Fee and Advertising Fee contributions due under this Agreement) a reasonable management fee in an amount that we may specify, equal to up to ten percent (10%) of the Franchise's gross revenues, plus our direct out-of-pocket costs and expenses, if we assume management of the Franchise under this Paragraph. We have a duty to utilize only our reasonable efforts in managing the Franchise, and will not be liable to you for any debts, losses, or obligations the Franchise incurs, or to any of your creditors for any products or services the Franchise purchases, while we manage it pursuant to this Paragraph. 17. ENFORCEMENT. 17.1 Invalid Provisions; Substitution of Valid Provisions. To the extent that the non-competition provisions of Sections 9.3 and 14.5 are deemed unenforceable because of their scope in terms of area, business activity prohibited, or length of time, you agree that the invalid provisions will be deemed modified or limited to the extent or manner necessary to make that particular provisions valid and enforceable to the greatest extent possible in light of the intent of the parties expressed in that such provisions under the laws applied in the forum in that we are seeking to enforce such provisions. THE JOINT…THE CHIROPRACTIC PLACE™ FRANCHISE AGREEMENT + +43 + + + + + + + + If any lawful requirement or court order of any jurisdiction (1) requires a greater advance notice of the termination or non-renewal of this Agreement than is required under this Agreement, or the taking of some other action which is not required by this Agreement, or (2) makes any provision of this Agreement or any specification, standard, or operating procedure we prescribed invalid or unenforceable, then the advance notice and/or other action required or revision of the specification, standard, or operating procedure will be substituted for the comparable provisions of this Agreement in order to make the modified provisions enforceable to the greatest extent possible. You agree to be bound by the modification to the greatest extent lawfully permitted. 17.2 Unilateral Waiver of Obligations. Either you or we may, by written notice, unilaterally waive or reduce any obligation or restriction of the other under this Agreement. The waiver or reduction may be revoked at any time for any reason on ten (10) days' written notice. 17.3 Written Consents from Company. Whenever this Agreement requires our advance approval or consent, you agree to make a timely written request for it. Our approval or consent will not be valid unless it is in writing. 17.4 Lien. To secure your performance under this Agreement and indebtedness for all sums due us or our affiliates, we shall have a lien upon, and you hereby grant us a security interest in, the following collateral and any and all additions, accessions, and substitutions to or for it and the proceeds from all of the same: (a) all inventory now owned or after-acquired by you and the Franchise, including but not limited to all inventory and supplies transferred to or acquired by you in connection with this Agreement; (b) all accounts of you and/or the Franchise now existing or subsequently arising, together with all interest in you and/or the Franchise, now existing or subsequently arising, together with all chattel paper, documents, and instruments relating to such accounts; (c) all contract rights of you and/or the Franchise, now existing or subsequently arising; and (d) all general intangibles of you and/or the Franchise, now owned or existing, or after-acquired or subsequently arising. You agree to execute such financing statements, instruments, and other documents, in a form satisfactory to us, that we deem necessary so that we may establish and maintain a valid security interest in and to these assets. THE JOINT…THE CHIROPRACTIC PLACE™ FRANCHISE AGREEMENT + +44 + + + + + + + + 17.5 No Guarantees. If in connection with this Agreement we provide to you any waiver, approval, consent, or suggestion, or if we neglect or delay our response or deny any request for any of those, then we will not be deemed to have made any warranties or guarantees upon which you may rely, and will not assume any liability or obligation to you. 17.6 No Waiver. If at any time we do not exercise a right or power available to us under this Agreement or do not insist on your strict compliance with the terms of the Agreement, or if there develops a custom or practice that is at variance with the terms of this Agreement, then we will not be deemed to have waived our right to demand exact compliance with any of the terms of this Agreement at a later time. Similarly, our waiver of any particular breach or series of breaches under this Agreement, or of any similar term in any other agreement between us and any other The Joint Corp. franchisee will not affect our rights with respect to any later breach. It will also not be deemed to be a waiver of any breach of this Agreement for us to accept payments that are due to us under this Agreement. 17.7 Cumulative Remedies. The rights and remedies specifically granted to either you or us by this Agreement will not be deemed to prohibit either you or us from exercising any other right or remedy provided under this Agreement, or permitted by law or equity. 17.8 Specific Performance; Injunctive Relief. Provided we give you the appropriate notice, we will be entitled, without being required to post a bond, to the entry of temporary and permanent injunctions and orders of specific performance to (1) enforce the provisions of this Agreement relating to your use of the Marks and non-disclosure and non-competition obligations under this Agreement; (2) prohibit any act or omission by you or your employees that constitutes a violation of any applicable law, ordinance, or regulation; constitutes a danger to the public; or may impair the goodwill associated with the Marks or The Joint Corp. franchises; or (3) prevent any other irreparable harm to our interests. If we obtain an injunction or order of specific performance, then you shall pay us an amount equal to the total of our costs of obtaining it, including without limitation reasonable attorneys' and expert witness fees, costs of investigation and proof of facts, court costs, other litigation expenses and travel and living expenses, and any damages we incur as a result of the breach of any such provision. You further agree to waive any claims for damage in the event there is a later determination that an injunction or specific performance order was issued improperly. THE JOINT…THE CHIROPRACTIC PLACE™ FRANCHISE AGREEMENT + +45 + + + + + + + + 17.9 Arbitration. Except insofar as we elect to enforce this Agreement or to seek temporary or permanent injunctive relief as provided above, all controversies, disputes or claims arising between us, our affiliates, and our and their respective owners, officers, directors, agents, and employees (in their representative capacity) and you (and your Principal Owners and guarantors) arising out of or related to: (1) this Agreement, any provision thereof, or any related agreement (except for any lease or sublease with us or any of our affiliates); (2) the relationship of the parties hereto; (3) the validity of this Agreement or any related agreement, or any provision thereof; or (4) any specification, standard or operating procedure relating to the establishment or operation of the Franchise, shall be submitted for arbitration to be administered by the office of the American Arbitration Association. Such arbitration proceedings shall be conducted in Maricopa County, Arizona, and, except as otherwise provided in this Agreement, shall be conducted in accordance with then current commercial arbitration rules of the American Arbitration Association. The arbitrator shall have the right to award or include in his award any relief that he or she deems proper in the circumstances, including without limitation, money damages (with interest on unpaid amounts from date due), specific performance, injunctive relief, attorneys' fees, and costs. The award and decision of the arbitrator shall be conclusive and binding on all parties to this agreement, and judgment on the award may be entered in any court of competent jurisdiction, and each such party waives any right to contest the validity or enforceability of such award. The provisions of this Paragraph are intended to benefit and limit third-party non-signatories, and will continue in full force and effect subsequent to, and notwithstanding expiration or termination of, this Agreement. You and we agree that any such arbitration shall be conducted on an individual, not a class-wide basis, and shall not be consolidated with any other arbitration proceeding. 17.10 Waiver of Punitive Damages and Jury Trial; Limitations of Actions. Except with respect to your obligations to indemnify us and claims that we may bring under Sections 7, 9, 15, or 16 of this Agreement, and except for claims arising from your non-payment or underpayment of any amounts owed to us or our affiliates, (1) any and all claims arising out of or related to this Agreement or the relationship between you and us shall be barred, by express agreement of the parties, unless an action or proceeding is commenced within two (2) years from the date the cause of action accrues; and (2) you and we hereby waive to the fullest extent permitted by law, any right to or claim for any punitive or exemplary damages against the other, and agree that, except to the extent provided to the contrary in this Agreement, in the event of a dispute between you and us, each party will be limited to the recovery of any actual damages sustained by it. You and we irrevocably waive trial by jury in any action, proceeding or counterclaim, whether at law or in equity, brought by either you or us. THE JOINT…THE CHIROPRACTIC PLACE™ FRANCHISE AGREEMENT + +46 + + + + + + + + 17.11 Governing Law/Consent To Jurisdiction. Except to the extent governed by the United States Trademark Act of 1946 (Lanham Act, 15 U.S.C. §§ 1051 et seq.) and except that all issues relating to arbitrability or the enforcement or interpretation of the agreement to arbitrate set forth in Section 17.9 which will be governed by the United States Arbitration Act (9 U.S.C. § 1 et seq.) and the federal common law relating to arbitration, this Agreement and the Franchise will be governed by the internal laws of the State of Arizona (without reference to its choice of law and conflict of law rules), except that the provisions of any Arizona law relating to the offer and sale of business opportunities or franchises or governing the relationship of a franchisor and its franchisees will not apply unless their jurisdictional requirements are met independently without reference to this Paragraph. You agree that we may institute any action against you arising out of or relating to this Agreement (which is not required to be arbitrated hereunder or as to which arbitration is waived) in any state or federal court of general jurisdiction in Maricopa County, Arizona, and you irrevocably submit to the jurisdiction of such courts and waive any objection you may have to either the jurisdiction or venue of such court. 17.12 Binding Effect. This Agreement is binding on and will inure to the benefit of our successors and assigns and, subject to the Transfers provisions contained in this Agreement, will be binding on and inure to the benefit of your successors and assigns, and if you are an individual, on and to your heirs, executors, and administrators. 17.13 No Liability to Others; No Other Beneficiaries. We will not, because of this Agreement or by virtue of any approvals, advice or services provided to you, be liable to any person or legal entity that is not a party to this Agreement, and no other party shall have any rights because of this Agreement. 17.14 Construction. All headings of the various Sections and Paragraphs of this Agreement are for convenience only, and do not affect the meaning or construction of any provision. All references in this Agreement to masculine, neuter or singular usage will be construed to include the masculine, feminine, neuter or plural, wherever applicable. Except where this Agreement expressly obligates us to reasonably approve or not unreasonably withhold our approval of any of your actions or requests, we have the absolute right to refuse any request by you or to withhold our approval of any action or omission by you. The term "affiliate" as used in this Agreement is applicable to any company directly or indirectly owned or controlled by you or your Principal Owners, or any company directly or indirectly owned or controlled by us that sells products or otherwise transacts business with you. THE JOINT…THE CHIROPRACTIC PLACE™ FRANCHISE AGREEMENT + +47 + + + + + + + + 17.15 Joint and Several Liability. If two (2) or more persons are the Franchise Owner under this Agreement, their obligation and liability to us shall be joint and several. 17.16 Multiple Originals. This Agreement may be executed in two or more counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other parties hereto. This Agreement, once executed by a party, may be delivered to the other parties hereto by facsimile transmission or other electronic means of a copy of this Agreement bearing the signature of the party so delivering this Agreement. 17.17 Timing Is Important. Time is of the essence of this Agreement. "Time is of the essence" is a legal term that emphasizes the strictness of time limits. In this case, it means it will be a material breach of this Agreement to fail to perform any obligation within the time required or permitted by this Agreement. 17.18 Independent Provisions. The provisions of this Agreement are deemed to be severable. In other words, the parties agree that each provision of this Agreement will be construed as independent of any other provision of this Agreement. 18. NOTICES AND PAYMENTS. All written notices, reports and payments permitted or required under this Agreement or by the Operations Manual will be deemed delivered: (a) at the time delivered by hand; (b) one (1) business day after transmission by telecopy, facsimile or other electronic system; (c) one (1) business day after being placed in the hands of a reputable commercial courier service for next business day delivery; or (d) three (3) business days after placed in the U.S. mail by Registered or Certified Mail, Return Receipt Requested, postage prepaid; and addressed to the party to be notified or paid at its most current principal business address of which the notifying party has been advised, or to any other place designated by either party. Any required notice, payment or report which we do not actually receive during regular business hours on the date due (or postmarked by postal authorities at least two (2) days before it is due) will be deemed delinquent. THE JOINT…THE CHIROPRACTIC PLACE™ FRANCHISE AGREEMENT + +48 + + + + + + + + 19. INDEPENDENT PROFESSIONAL JUDGMENT OF YOU AND YOUR GENERAL MANAGER. You and we acknowledge and agree that the specifications, standards and operating procedures related to the services offered by the Franchise are not intended to limit or replace your or your General Manager's (if any) professional judgment in supervising and performing the services offered by your Franchise. The specifications, standards, and operating procedures represent only the minimum standards, and you and your General Manager (if any) are solely responsible for ensuring that the Franchise performs services in accordance with all applicable requirements and standards of care. Nothing in this Agreement shall obligate you or your General Manager (if any) to perform any act that is contrary to your or your General Manager's (if any) professional judgment; provided, however, that you must notify us immediately upon your determination that any specification, standard or operating procedure is contrary to your or your General Manager's (if any) professional judgment. 20. ENTIRE AGREEMENT. This Agreement, together with the introduction and exhibits to it, constitutes the entire agreement between us, and there are no other oral or written understandings or agreements between us concerning the subject matter of this Agreement. This Agreement may be modified only by written agreement signed by both you and us, except that we may modify the Operations Manual at any time as provided herein. However, nothing in this Agreement or any addendum shall have the effect of disclaiming any of the representations made in the Franchise Disclosure Document or any of its exhibits. IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the Agreement Date. "COMPANY" THE JOINT CORP., a Delaware corporation + +"FRANCHISE OWNER" ___________________, a_________________ By: By: Name: Chad Everts Name: Title: V.P. Franchise Development Title: THE JOINT…THE CHIROPRACTIC PLACE™ FRANCHISE AGREEMENT + +49 + + + + + + + + EXHIBIT 1 TO THE JOINT CORP. FRANCHISE AGREEMENT + +FRANCHISE AGREEMENT EXPIRATION DATE PROJECTED FRANCHISING OPENING SCHEDULE 1-1 Expiration Date. Unless sooner terminated in accordance with the provisions of this Agreement, this Agreement will expire on _______________________________________. 1-2 Franchising Opening Schedule. In signing the foregoing Agreement to which this Exhibit 1 is attached, you acknowledge that: You have purchased the Franchise to which the Agreement corresponds as a The Joint Corp. Location Franchise. You will establish this Franchise as a Start-up Location. 2. You must open the Franchise mentioned above within a certain time period specified by us, the length of which depends upon the number of Franchises you have purchased and the number of these Franchises that you have developed and opened for business before developing and opening the Franchise to which the Agreement corresponds. 3. You must open the Franchise to which this Agreement corresponds within the following time period (the "Opening Deadline"), subject to the requirements of Paragraphs 3.3 and 3.6, and any other applicable provision of the Agreement: THE JOINT…THE CHIROPRACTIC PLACE™ Exhibit 1 - Expiration Date and Opening Schedule FRANCHISE AGREEMENT + +1 + + + + + + + + EXHIBIT 2 TO THE JOINT CORP. FRANCHISE AGREEMENT OWNER'S GUARANTY AND ASSUMPTION OF OBLIGATIONS In consideration of, and as an inducement to, the execution of the Franchise Agreement, dated as of this _____ day of ____________________, 20__ (the "Agreement"), by and between The Joint Corp. ("us") and (the "Franchise Owner"), each of the undersigned owners of the Franchise Owner and their respective spouses ("you," for purposes of this Guaranty only), hereby personally and unconditionally agree to perform and keep during the terms of the Agreement, each and every covenant, obligation, payment, agreement, and undertaking on the part of Franchise Owner contained and set forth in the Agreement. Each of you agree that all provisions of the Agreement relating to the obligations of Franchise Owners, including, without limitation, the covenants of confidentiality and non-competition and other covenants set forth in the Agreement, shall be binding on you. Each of you waives (1) protest and notice of default, demand for payment or nonperformance of any obligations guaranteed by this Guaranty; (2) any right you may have to require that an action be brought against Franchise Owner or any other person as a condition of your liability; (3) all right to payment or reimbursement from, or subrogation against, the Franchise Owner which you may have arising out of your guaranty of the Franchise Owner's obligations; and (4) any and all other notices and legal or equitable defenses to which you may be entitled in your capacity as guarantor. Each of you consents and agrees that (1) your direct and immediate liability under this Guaranty shall be joint and several; (2) you will make any payment or render any performance required under the Agreement on demand if Franchise Owner fails or refuses to do so when required; (3) your liability will not be contingent or conditioned on our pursuit of any remedies against Franchise Owner or any other person; (4) your liability will not be diminished, relieved or otherwise affected by any extension of time, credit or other indulgence which we may from time to time grant to Franchise Owner or to any other person, including without limitation, the acceptance of any partial payment or performance, or the compromise or release of any claims; and (5) this Guaranty will continue and be irrevocable during the term of the Agreement and afterward for so long as the Franchise Owner has any obligations under the Agreement. If we are required to enforce this Guaranty in a judicial or arbitration proceeding, and prevail in such proceeding, we will be entitled to reimbursement of our costs and expenses, including, but not limited to, reasonable accountants', attorneys', attorneys' assistants', arbitrators' and expert witness fees, costs of investigation and proof of facts, court costs, other litigation expenses and travel and living expenses, whether incurred prior to, in preparation for or in contemplation of the filing of any such proceeding. If we are required to engage legal counsel in connection with any failure by you to comply with this Guaranty, you agree to reimburse us for any of the above-listed costs and expenses incurred by us. [Remainder of Page Left Intentionally Blank - Signature Page Follows] THE JOINT…THE CHIROPRACTIC PLACE™ Exhibit 2 - Owner's Guaranty and Assumption of Obligations FRANCHISE AGREEMENT + +1 + + + + + + + + This Guaranty is now executed as of the Agreement Date. OWNER: OWNER'S SPOUSE: Name: Name: OWNER: OWNER'S SPOUSE: Name: Name: OWNER: OWNER'S SPOUSE: Name: Name: THE JOINT…THE CHIROPRACTIC PLACE™ Exhibit 2 - Owner's Guaranty and Assumption of Obligations FRANCHISE AGREEMENT + +2 + + + + + + + + EXHIBIT 3 TO THE JOINT CORP. FRANCHISE AGREEMENT + +ADDENDUM TO LEASE AGREEMENT This Addendum to Lease Agreement (this "Addendum"), is entered into effective on this ______ day of _______________, 20___, (the "Effective Date") by and between __________________, a ________________________ (the "Lessor"), and __________________, a ________________________ (the "Lessee") (each a "Party" and collectively, the "Parties"). RECITALS WHEREAS, the Parties hereto have entered into a certain Lease Agreement, dated on the ______ day of _______________, 20___ (the "Agreement"), and pertaining to the premises located at _____________________________ (the "Premises"); WHEREAS, Lessor acknowledges that Lessee intends to operate The Joint franchise from the Premises pursuant to a Franchise Agreement (the "Franchise Agreement") with The Joint Corp. ("Franchisor") under the name The Joint or other name designated by Franchisor ("Franchised Business"); and WHEREAS, the Parties now desire to amend the Lease Agreement in accordance with the terms and conditions contained herein. NOW, THEREFORE, in consideration of the mutual covenants and agreements herein set forth and each act done and to be done pursuant hereto, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, do hereby represent, warrant, covenant and agree as follows: 1. Remodeling and Decor. The above recitals are hereby incorporated by reference. Lessor agrees that Lessee shall have the right to remodel, equip, paint and decorate the interior of the Premises and to display the proprietary marks and signs on the interior and exterior of the Premises as Lessee is reasonably required to do pursuant to the Franchise Agreement and any successor Franchise Agreement under which Lessee may operate a Franchised Business on the Premises. 2. Assignment. Lessee shall have the right to assign all of its right, title and interest in and to the Lease Agreement to Franchisor or its parent, subsidiary, or affiliate, (including another franchisee) at any time during the term of the Lease, including any extensions or renewals thereof, without first obtaining Lessor's consent, pursuant to the terms of the Collateral Assignment of Lease attached hereto as Exhibit A. However, no assignment shall be effective until such time as Franchisor or its designated affiliate gives Lessor written notice of its acceptance of the assignment, and nothing contained herein or in any other document shall constitute Franchisor or its designated subsidiary or affiliate a party to the Lease Agreement, or guarantor thereof, and shall not create any liability or obligation of Franchisor or its parent unless and until the Lease Agreement is assigned to, and accepted in writing by, Franchisor or its parent, subsidiary or affiliate. In the event of any assignment, Lessee shall remain liable under the terms of the Lease. Franchisor shall have the right to reassign the Lease to another franchisee without the Landlord's consent in accordance with Section 4(a). THE JOINT…THE CHIROPRACTIC PLACE™ Exhibit 3 - Addendum to Lease Agreement FRANCHISE AGREEMENT + +1 + + + + + + + + 3. Default and Notice. (a) In the event there is a default or violation by Lessee under the terms of the Lease Agreement, Lessor shall give Lessee and Franchisor written notice of the default or violation within ten (10) days after Lessor receives knowledge of its occurrence. If Lessor gives Lessee a default notice, Lessor shall contemporaneously give Franchisor a copy of the notice. Franchisor shall have the right, but not the obligation, to cure the default. Franchisor will notify Lessor whether it intends to cure the default and take an automatic assignment of Lessee's interest as provided in Paragraph 4(a). Franchisor will have an additional fifteen (15) days from the expiration of Lessee's cure period in which it may exercise the option to cure, but is not obligated to cure the default or violation. (b) All notices to Franchisor shall be sent by registered or certified mail, postage prepaid, to the following address: The Joint Corp. 16767 N. Perimeter Dr., Suite 240 Scottsdale, AZ 85260 Attention: Chad Everts E-mail: ceverts@thejoint.com Franchisor may change its address for receiving notices by giving Lessor written notice of the new address. Lessor agrees that it will notify both Lessee and Franchisor of any change in Lessor's mailing address to which notices should be sent. (c) Following Franchisor's approval of the Lease Agreement, Lessee agrees not to terminate, or in any way alter or amend the same during the Initial Term of the Franchise Agreement or any Interim Period thereof without Franchisor's prior written consent, and any attempted termination, alteration or amendment shall be null and void and have no effect as to Franchisor's interests thereunder; and a clause to the effect shall be included in the Lease. THE JOINT…THE CHIROPRACTIC PLACE™ Exhibit 3 - Addendum to Lease Agreement FRANCHISE AGREEMENT + +2 + + + + + + + + 4. Termination or Expiration. (a) Upon Lessee's default and failure to cure the default within the applicable cure period, if any, under either the Lease Agreement or the Franchise Agreement, Franchisor will, at its option, have the right, but not the obligation, to take an automatic assignment of Lessee's interest in the Lease Agreement and at any time thereafter to re-assign the Lease Agreement to a new franchisee without Lessor's consent and to be fully released from any and all liability to Lessor upon the reassignment, provided the franchisee agrees to assume Lessee's obligations and the Lease Agreement. Upon notice from Franchisor to Lessor requesting an automatic assignment, Lessor will, at the cost of Franchisor, take appropriate actions to secure the leased premises including but not limited changing the locks and granting Franchisor sole rights to the Premises. (b) Upon the expiration or termination of either the Lease Agreement or the Franchise Agreement (attached), Lessor will cooperate with and assist Franchisor in securing possession of the Premises and if Franchisor does not elect to take an assignment of the Lessee's interest, Lessor will allow Franchisor to enter the Premises, without being guilty of trespass and without incurring any liability to Lessor, to remove all signs, awnings, and all other items identifying the Premises as a Franchised Business and to make other modifications (such as repainting) as are reasonably necessary to protect The Joint marks and system, and to distinguish the Premises from a Franchised Business. In the event Franchisor exercises its option to purchase assets of Lessee or has rights to those through the terms and conditions any agreement between Lessee and Franchisor, Lessor shall permit Franchisor to remove all the assets being purchased by Franchisor. 5. Consideration; No Liability. (a) Lessor hereby acknowledges that the provisions of this Addendum are required pursuant to the Franchise Agreement under which Lessee plans to operate its business and Lessee would not lease the Premises without this Addendum. Lessor also hereby consents to the Collateral Assignment of Lease from Lessee to Franchisor as evidenced by Exhibit A. (b) Lessor further acknowledges that Lessee is not an agent or employee of Franchisor and Lessee has no authority or power to act for, or to create any liability on behalf of, or to in any way bind Franchisor or any affiliate of Franchisor, and that Lessor has entered into this Addendum with full understanding that it creates no duties, obligations or liabilities of or against Franchisor or any affiliate of Franchisor. THE JOINT…THE CHIROPRACTIC PLACE™ Exhibit 3 - Addendum to Lease Agreement FRANCHISE AGREEMENT + +3 + + + + + + + + 6. Sales Reports. If requested by Franchisor, Lessor will provide Franchisor with whatever information Lessor has regarding Lessee's sales from its Franchised Business. 7. Amendments. No amendment or variation of the terms of the Lease or this Addendum shall be valid unless made in writing and signed by the Parties hereto. 8. Reaffirmation of Lease. Except as amended or modified herein, all of the terms, conditions and covenants of the Lease Agreement shall remain in full force and effect and are incorporated herein by reference and made a part of this Addendum as though copied herein in full. 9. Beneficiary. Lessor and Lessee expressly agree that Franchisor is a third party beneficiary of this Addendum. [Remainder of Page Left Intentionally Blank - Signature Page Follows] THE JOINT…THE CHIROPRACTIC PLACE™ Exhibit 3 - Addendum to Lease Agreement FRANCHISE AGREEMENT + +4 + + + + + + + + IN WITNESS WHEREOF, the Parties have duly executed this Addendum as of the Effective Date. LESSOR: LESSEE: _____________________________, _____________________________, a _____________________________ a _____________________________ By: By: Name: Name: Its: Its: THE JOINT…THE CHIROPRACTIC PLACE™ Exhibit 3 - Addendum to Lease Agreement FRANCHISE AGREEMENT + +5 + + + + + + + + EXHIBIT A COLLATERAL ASSIGNMENT OF LEASE This COLLATERAL ASSIGNMENT OF LEASE (this "Assignment") is entered into effective as of the ___ day of _____, 20___ (the "Effective Date"), the undersigned, __________________________________, ("Assignor") hereby assigns, transfers and sets over unto The Joint Corp., a Delaware Corporation ("Assignee") all of Assignor's right, title and interest as tenant, in, to and under that certain lease, a copy of w h i c h i s a t t a c h e d h e r e t o a s Exhib i t 1 ( t h e " L e a s e A g r e e m e n t " ) w i t h r e s p e c t t o t h e p r e m i s e s l o c a t e d a t _______________________________________________________________ (the "Premises"). This Assignment is for collateral purposes only and except as specified herein, Assignee shall have no liability or obligation of any kind whatsoever arising from or in connection with this Assignment unless Assignee shall take possession of the Premises demised by the Lease Agreement pursuant to the terms hereof and shall assume the obligations of Assignor thereunder. Assignor represents and warrants to Assignee that it has full power and authority to so assign the Lease Agreement and its interest therein and that Assignor has not previously, and is not obligated to, assign or transfer any of its interest in the Lease Agreement nor the Premises demised thereby. Upon a default by Assignor under the Lease Agreement or under that certain franchise agreement for The Joint between Assignee and Assignor ("Franchise Agreement"), or in the event of a default by Assignor under any document or instrument securing the Franchise Agreement, Assignee shall have the right and is hereby empowered to take possession of the Premises, expel Assignor therefrom, and, in the event, Assignor shall have no further right, title or interest in the Lease Agreement. Assignor agrees it will not suffer or permit any surrender, termination, amendment or modification of the Lease Agreement without the prior written consent of Assignee. Through the Initial Term of the Franchise Agreement and any Renewal Period thereof (as defined in the Franchise Agreement), Assignor agrees that it shall elect and exercise all options to extend the term of or renew the Lease Agreement not less than thirty (30) days before the last day that said option must be exercised, unless Assignee otherwise agrees in writing. Upon failure of Assignee to otherwise agree in writing, and upon failure of Assignor to so elect to extend or renew the Lease Agreement as stated herein, Assignor hereby irrevocably appoints Assignee as its true and lawful attorney-in-fact, which appointment is coupled with an interest, to exercise the extension or renewal options in the name, place and stead of Assignor for the sole purpose of effecting the extension or renewal. THE JOINT…THE CHIROPRACTIC PLACE™ Exhibit 3 - Addendum to Lease Agreement FRANCHISE AGREEMENT + +6 + + + + + + + + IN WITNESS WHEREOF, Assignor and Assignee have duly executed this Collateral Assignment of Lease as of the Effective Date. ASSIGNOR: ASSIGNEE: , THE JOINT CORP., a__________________________ a Delaware corporation By: By: Name: Name: Chad Everts Its: Its: VP Franchise Development THE JOINT…THE CHIROPRACTIC PLACE™ Exhibit 3 - Addendum to Lease Agreement FRANCHISE AGREEMENT + +7 + + + + + + + + EXHIBIT 4 TO THE JOINT CORP. FRANCHISE AGREEMENT OWNERSHIP INTERESTS IN FRANCHISE OWNER 4-1. Full name and address of the owners of, and a description of the type of, all currently held Interests in Franchise Owner: 4-2. Minimum individual and aggregate Principal Owner ownership percentage required at all times during the term of this Agreement: 4-2.1 During the term of this Agreement, the Principal Owners together must have a "controlling interest" of no less than seventy-five percent (75%) of the equity, voting control and profits in the Franchise Owner. 4-2.2 Unless otherwise permitted, the required minimum "ownership interest" of each Principal Owner during the term of this Agreement is: + +Name Ownership Percentage THE JOINT…THE CHIROPRACTIC PLACE™ Exhibit 4 - Ownership Interests in Franchise Owner FRANCHISE AGREEMENT + +1 \ No newline at end of file diff --git a/full_contract_txt/KALLOINC_11_03_2011-EX-10.1-STRATEGIC ALLIANCE AGREEMENT.txt b/full_contract_txt/KALLOINC_11_03_2011-EX-10.1-STRATEGIC ALLIANCE AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..fe8b9d8489c77b386beaf6d419b61a12ca54758a --- /dev/null +++ b/full_contract_txt/KALLOINC_11_03_2011-EX-10.1-STRATEGIC ALLIANCE AGREEMENT.txt @@ -0,0 +1,995 @@ +Exhibit 10.1 + +KALLO Inc. + + + +STRATEGIC ALLIANCE AGREEMENT + +MOBILECARE + + + + + + + + + +STRATEGIC ALLIANCE AGREEMENT - MOBILE CARE This Agreement is made by and between: KALLO Inc. With principal offices at 15 Allstate Parkway, Suite 600, Markham, ON L3R 5B4., Canada ("KALLO") AND Petro data Management Services Limited., With principal offices at Motorways Center, Block-B, 1 Motorways Avenue Alausa, Ikeja, Lagos, Nigeria ("PDMS") AND Gateway Global Fabrication Ltd., With principal offices at No-2 Olodu Street, Off Oluobasanjo Road, Portharcourt, Rivers state, Nigeria. ("Gateway") As of the date set forth below. Whereas, Kallo is the developer, owner and licensor of certain Mobile Care Suite of Products packages designated as the subject matter of this Agreement: Whereas, PDMS and Gateway (Agent) desires to become a business associate of Kallo for the region of Nigeria, under the terms and conditions hereof; Now therefore, all the parties agree as follows: + + For the purposes of this Agreement, the following definitions will apply: "Business Associate" means the Kallo Authorized Agent who could be an individual, organization, or company that desires to represent the Kallo Mobile care suite of products of Kallo Inc., to the end user (customer) market. The Business Associate as it will be defined in this agreement sells the Kallo Mobile care product suite only. Kallo will be fully responsible for the training and implementation of the client + + KALLO - MOBILECARE + +1.DEFINITIONS + +Page 2 + + + + + + following the sale directly by Kallo Inc., or through it's wholly owned Canadian subsidiary, Kallo Technologies Inc., "KALLO" means Kallo Inc. and/or its wholly owned subsidiary Kallo Technologies Inc., "Customer" means the end user of the Kallo Mobile care suite of Products that enters into the Kallo Mobile care Suite of Products End User License Agreement (EULA). "Schedule A" means the Kallo supplied executable pricing proposal form which must accompany any EULA for the Kallo Mobile care suite of Products in order to be accepted by Kallo. "Kallo Mobile care suite of Products" means Kallo products as specified in Schedule A. "EULA" means the license agreement (headed "End User License Agreement") between the Customer (end-user) and Kallo that sets forth the terms and conditions governing the Customer's use of the Kallo Mobile care suite of Products. "Book of Business" means the sales made by the Agent with the flow of income from those sales paid under this Agreement, all of which belongs to the Agent in right, title and interest. The Book of Business is that portion of each sale belonging to the Agent under the commission percentage agreed to at the time of sale and the continuing flow of income produced so long as the customers pay to use the Kallo Mobile care suite of products license. "Material Breach" means the violation of the payment terms herein, copyright or trademarks, an attempt to replace or abet others to replace Kallo Mobile care suite of products or services at any existing or potential customer with competing products and any act of malicious conduct by the Agent to disparage Kallo without any justification and malicious conduct against Agent by Kallo. "Non Material Breach" means serious neglect of Agent's customers by the Agent in regards to support and services and any other breach of the terms of this agreement for which the cure of such shall be completed by the Agent within sixty days from written notice of violation. "Certified Sales Agent" means a Sales Agent who has completed the initial Sales and Technical Training program and any consecutive + + KALLO - MOBILECARE + +Page 3 + + + + + + training program provided and mandated by Kallo and who abides by the terms and conditions of the certification program as outlined herein. + + + + + + + + + + + + + + KALLO - MOBILECARE + +2.KALLO SALES AGENT PROGRAM TERMS AND CONDITIONS + +a) Appointment: Kallo hereby conditionally appoints Agent as a Sales Agent, and Agent accepts in accordance with the provisions of this Agreement the terms of the Kallo Sales Agent Program. + +b) Responsibilities: Responsibilities of the Agent (PDMS and Gateway) are defined in Schedule C. Failure to comply with this will be considered a material breach of this agreement. This also includes responsibilities for Kallo and the project management entity (BASCIC) appointed jointly by Kallo and the Agent. + +c) Certified Sales Agent: Agent accepts and acknowledges that the Kallo 3 day Sales and 5 day Technical Training Program is required to be completed by the Agent within 90 days of execution of this agreement. Agent is required to pay a Training program fee of $10,000.00 for the Kallo Mobile care suite of Products on or before the date of execution of this agreement for the Authorization of Agent under this agreement by Kallo. Agent shall pay $1000/- per day for any additional days of training requested by Agent and all travel expenses plus per diem for the Kallo representative instructing the program will be due and payable to Kallo on or before execution of this agreement. Certification is mandatory for Agent to become certified to represent the Kallo Mobile care suite of products licensed under this agreement and to benefit from commissions allocated to Agent as outlined in Schedule A of this agreement. Non-compliance of this Section (2), subparagraph (c) on the part of the Agent will automatically void this agreement. + +d)All sales made by the Agent of the Kallo Mobile care suite of products shall create a Book of Business owned by the Agent, which constitutes all funds due to Agent under this agreement flowing from each sale for a period not to exceed 36 months from the date of acceptance by Kallo of the Client EULA or until the EULA terminates under the provision that are outlined therein of the Kallo Mobile care suite of products. + +e)Agent is required bi-monthly to report all prospects, sales activity, activity reported on Kallo provided leads, and any current client + +Page 4 + + + + + + accounts relating to the Kallo Mobile care suite of products to the Kallo Sales and Marketing department in an electronic format following the execution of this agreement. Kallo offers and enforces lead and current account protection for Sales Agents. Kallo shall not allow another Agent to solicit the existing Agents book of business unless it is understood by all parties the end user client desires the transfer. Kallo shall use its best reasonable efforts to protect the Agent from aggressive solicitation by another Agent taking any part of the Agent's book of Business. The report MUST include the Business Name, Key Contact name, telephone number, and address. + + + + + + + + + + KALLO - MOBILECARE + +f) Exclusivity of territory (Nigeria): Agent's appointment shall be exclusive for the Kallo Mobile care suite of products and services marked in Schedule A to this Agreement. Such appointment constitutes a grant of specific territory of Nigeria. Exclusivity is granted for the region of Nigeria, The Agent is expected to confirm the first purchase order as per Schedule D with the down payment within thee (3) months of execution of this agreement and in order to retain the exclusivity of the territory the Agent shall achieve the target commitment in Schedule D. + +g)Agent shall be supplied with marketing material at no cost to agent in electronic format only. Print and mail expense are the responsibility of the Agent. Web design services, press release services, trade show design services, marketing content services, and listing services are provided at no cost to Agent as it relates to the Kallo Mobile care suite of products + +h) Marketing and Sales Plan: The Agent shall prior to the signing of this agreement submit and have approved by Kallo a Marketing and Sales Plan for no less than 3 years committing the sale of no less than 15 Mobile Medical Clinics, 5 Mobile Clinics in twelve month period following the signing of this agreement as referred to in Schedule D, with minimum growth per annum thereafter of 20% cumulative. Failure to do this will be considered a material breach of this agreement. + +i)Kallo shall not change the marketing and sales plan during this agreement without first discussing it with Agent and in the event that mutual agreement cannot be reached will provide at least 12 months' notice of any such change. Should agreement not be reached, Agent may maintain its existing "book of business" and cease making sales under this agreement without prejudice so + +Page 5 + + + + + + long as Agent meets its support obligations to its clients and financial obligations to Kallo. + + + + + + + + + + + + + + KALLO - MOBILECARE + +j) Competence: Agent agrees to comply in full with Section (2). Subparagraph (c) of this agreement and provide and acquire appropriate staffing, training and any other requirements for the marketing, and sales of the Kallo Mobile care suite of products, and to comply with the Kallo training, support, shipping and payment terms. + +k) Conduct: Agent shall undertake no acts injurious to the business or goodwill of Kallo. Agent shall use its best efforts to promote Kallo and its products and service and shall promptly report and follow up all leads provided. Agent may not offer or promote competitive products without the consent of Kallo. + +l) Independent Entities: Notwithstanding the use of the designation "Sales Agent". Agent is an independent contractor and shall at no time have the power i.to bind Kallo; ii.to alter or change any terms, conditions, warranties or covenants made by Kallo or iii.to create in favor of any person any rights, which Kallo has not previously agreed in writing. + +m) Form of Relationship: The relationship under this Agreement shall not create any legal partnership, franchise relationship, agency or other form of legal association between the parties, which would impose a liability of one party upon the other. + +n) Insurance: Agent or its successors shall maintain during the term of this Agreement and while it is still responsible for its Book of Business: i.All required workers' compensation or similar insurance; ii.Comprehensive general liability insurance. Agent shall promptly supply Kallo with proof of such insurance upon request. Kallo shall maintain comprehensive general liability and errors and omissions insurance for the Kallo Mobile care suite of products. Kallo shall promptly supply Agent with proof of such insurance upon request. + +o) Records: Agent shall supply to Kallo the full business data of each customer as a qualified prospect and at the time of sale and shall, during this Agreement and while it is still responsible for its + +Page 6 + + + + + + Book of Business, and for a period of one year after the termination of this Agreement maintain records sufficient for Kallo to verify amounts due under this Agreement relating to the contracts, invoices, accounts, complaints, and other transactions relating to the placement and licensing of the Kallo Mobile care suite of products. Kallo may directly, or through its Agent at any time during normal business hours, upon no less than 10 business days' notice, and for any reason inspect such records and other financial information relevant to Kallo Mobile care suite of products as sold by Agent to its end users, solely for the purpose of verifying amounts due under this Agreement. Any such information will be confidential information of Agent subject to the provisions of Section 4. + + + + + + + + Warranties: + + + + KALLO - MOBILECARE + +p) Sub-Agents: Agent shall not be permitted to establish sub-Agents without the express written consent of Kallo. + +q) Corrupt Practices: Agent represents that it will not make any payment or transfer anything of value, directly or indirectly, to any government official or employee; to any officer, director, employee, or representative, or Agent of any actual or potential customer; or to any other person or entity if such payments would violate applicable laws. + +r) Prospects: Agent will provide Kallo with a list of active prospects on a regular basis as outlined in Section (2) Subparagraph (e) of this agreement. Kallo will use its best efforts to protect these prospects from being solicited by its other Agents or distributors, and to refrain from solicitation directly by Kallo, while taking into account prospect's wishes, and in as much as allowed by applicable laws. Agent in return agrees to respect active prospect lists of Kallo's other Agents. For the above purposes, the Agent at least once every six (6) weeks and where details of each such contact are logged with Kallo define an active prospect as a prospect that is contacted. + +3.WARRANTY AND LIMITATIONS + +a)Kallo represents and warrants to Agent that; i.it has sufficient right, title and interest in and to the Kallo Mobile care suite of products to enter into this Agreement; and ii.all Kallo Mobile care suite of products distributed to Agent is free and clear of all liens. + +Page 7 + + + + + + + + Limitation of Warranties: + + + + + + + + + + + + KALLO - MOBILECARE + +b)Kallo Mobile care suite of products' Warranties Agent's exclusive warranty regarding the Kallo Mobile care suite of products is set forth in the applicable EULA provided with the Kallo Mobile care suite of products. + +c)Except as stated above, Kallo makes no other warranties regarding the Kallo mobile care suite of products and documentation, and any services provided by Kallo including, without limitation, express or implied warranties, and expressly disclaims the warranties of fitness for a particular purpose or merchantability, and any other warranty, express or implied. + +d)In no event shall Kallo be liable for indirect, consequential, or incidental damages (including damages for loss of business profits, business interruption, loss of business information, and the like) arising out of the relationship between Kallo and Agent even if it has been advised of the possibility of such damages. + +e)Kallo's cumulative liability under this agreement, including any cause of action in contract, tort or strict liability, shall be limited to the license fees paid by agent during the 12 months prior to such event. Kallo's limitation of liability is cumulative with all Kallo's expenditures to address liability being aggregated to determine satisfaction of the limit. Agent releases Kallo from all obligations, liabilities, claims or demands in excess of the limitation. The parties acknowledge that other parts of this agreement rely upon the inclusion of this section and the resulting allocation of risks. + +f) Agent Actions: Kallo shall have no obligation to any party under any warranty given by Agent, its Agents or employees. Agent shall not make any representation or warranty with respect to the Kallo Mobile care suite of products other than those stated by Kallo in its written warranty, documentation and literature. + +g) Agent Indemnification: Agent agrees to indemnify Kallo and to hold it harmless from and against any loss, damage, claims or demands whatsoever arising out of Agent's activities that are outside the scope of the EULA provided by Kallo to the end user regarding use of Kallo Mobile care suite of products. Kallo makes its representations and warrants to the end user and limits + +Page 8 + + + + + + of liability therein via the EULA. + + + + + + Each party agrees not to disclose any confidential information received from the other in any form to any employees who do not have a specific need to use such information or to any outside party (including contractors) without the other party's prior written consent. All employees or contractors who receive such confidential information must be bound by written agreement not to disclose such information to any other party. Each party acknowledges that the unauthorized disclosure or use of confidential information of the other party would cause irreparable harm and significant injury to the other party that may be difficult to compensate. Accordingly, each party agrees that the other party will have the right to seek and obtain temporary and permanent injunctive relief in addition to any other rights and remedies it may have. The obligations of confidentiality shall not apply to information which; + + + + KALLO - MOBILECARE + +h) Complaints: Agent shall make all reasonable efforts to handle all incidents of customer complaints or demands regarding the Kallo Mobile care suite of products and shall report promptly to Kallo all such incidents. + +i) Kallo indemnification: Kallo agrees to indemnify Agent and to hold it harmless from and against any loss, damage, claims or demands whatsoever arising out of: i.Intellectual property infringement arising from the Kallo Suite of Products; ii.Breach of implied warranty or negligence. iii.Activities that are outside the scope of the EULA provided by Kallo and issued to the customer through Agent regarding the use of the Kallo Mobile care suite of products. Kallo further agrees to indemnify AGENT and to hold it harmless from and against any loss, damage, claims, or demands whatsoever arising out of Kallo's activities that are outside the scope of this Agreement. + +4.CONFIDENTIALITY + +i.is in public domain at the time of disclosure, ii.has been released by the other party without restrictions, iii.has been lawfully obtained by the disclosing party from a third party under no obligation of confidentiality, or iv.is independently developed by employees of the disclosing party without access to the confidential information. + +Page 9 + + + + + + + + + + + +Kallo reserves the right to revoke or limit the use of Trademarks at any time upon reasonable notice. Non- Compliance with Trademark and Logo Policies shall be considered a material breach of this Agreement. + + + +If at any time Agent acquires any rights in, or any registration or application for, any of the Trademarks by operation of law or otherwise, it will immediately, upon request by Kallo and at no expense to Kallo, assign such rights, registrations, or applications to Kallo, along with any and all associated goodwill. + + + + KALLO - MOBILECARE + +5.TRADEMARKS + +a) Definition: "Trademarks" means any and all current or future company names, product names, marks, logos, designs, trade dress and other designations or brands used by Kallo in connection with its products and services and all marks similar thereto. + +b) License: Kallo grants Agent the right to use the Trademarks solely for the purpose of distributing and marketing the Kallo Mobile care suite of products provided that Agent: i.uses the appropriate Trademarks for the corresponding Kallo Mobile care suite of products; ii.Identifies all Trademarks are registered trademarks of Kallo; iii.take reasonable steps to modify all objectionable uses of the Trademarks. + +c) Ownership: Agent acknowledges that Kallo is the sole owner of the Trademarks and nothing herein shall grant to Agent any right or interest in the Trademarks. Agent shall not register, or attempt to register, any Trademarks or any marks confusingly similar thereto in any jurisdiction. + +d) Limitations: Except as stated above, Agent is granted no right, title, license or interest in the Trademarks. Agent acknowledges Kallo's rights in the Trademarks and agrees that any and all use of Trademarks by Agent shall inure to the sole benefit of Kallo. Agent agrees that it shall take no action inconsistent with Kallo ownership of the Trademarks and agrees not to challenge Kallo's rights in or attempt to register any of the Trademarks, or any other name or mark owned or used by Kallo or any mark confusingly similar thereto. + +e) Notification: Agent shall promptly notify Kallo of any use by any third party of Trademarks or any use by such third parties of + +Page 10 + + + + + + similar marks which may constitute an infringement or passing off of Trademarks. Kallo reserves the right, in its sole discretion, to institute any proceedings against such third party infringers and Agent shall refrain from doing so itself. Agent agrees to cooperate fully with Kallo in any action taken by Kallo against such third parties, provided that all expenses of such action shall be borne by Kallo and all damages which may be awarded or agreed upon in settlement of such action shall accrue to Kallo. Refer to Schedule B for available means of communication to all parties concerned. + + + + + + + + + + + + KALLO - MOBILECARE + +f) Co-Branding: Kallo agrees for co-branding needs with local government and sponsors logo. This is subject to: i.The submission to and approval by Kallo of the recommended Logo I Product Name. This is to ensure that the overall look and feel of the Kallo Mobile care product is maintained. ii.The supply of the Logo I Product Name in suitable high quality format allowing sufficient time as defined by Kallo to incorporate co-branding logo on the Mobile clinics. iii.Kallo agreeing to this will, in no way reduce, undermine, alter or limit their rights as outlined in section 5 and 6 of this agreement. + +6.PROPRIETARY RIGHTS + +a) Ownership: Agent understands and agrees that Agent takes title only to the media on which the Kallo Mobile care suite of products is provided. Title in and ownership of all copies of Kallo products and documentation, Trademarks and all property rights therein, shall remain at all times vested in Kallo. Agent acknowledges that the Kallo Mobile care suite of products is protected by domestic and international copyright and other forms of proprietary rights and agrees not to copy or otherwise reproduce (except as required for distribution to customers), modify, adapt, translate, reverse engineer, decompile, disassemble or create derivative works based on the Kallo Mobile care suite of products or the documentation. + +b) No Rights Granted: No provision in this Agreement shall be interpreted as an assignment or grant to Agent of any right, title or interest in the Kallo Mobile care suite of products, documentation or Trademarks. + +c) Protection: Agent agrees to take any reasonable step necessary to protect the proprietary rights of Kallo and its + +Page 11 + + + + + + suppliers or licensors, including, but not limited to, the proper display of copyright, trademark, trade secret and other proprietary notices on any copies of the Kallo Mobile care suite of products. Agent must reproduce and include any such notices, other legends and logos on any backup copies. + +Any printed reference to Kallo products must include the following notice (or such notice as required by Kallo) with: © Kallo Inc., [YEAR]. All Rights Reserved. + + + + + + + + + + + + KALLO - MOBILECARE + +d) Copyright Notice: Agent agrees not to remove and shall reproduce and include all copyright notices or confidential or proprietary legends in and on all copies of Kallo Mobile care suite of products or documentation. + +e) Breach: Agent understands and agrees that the protection of Kallo rights in and to the Kallo Mobile care suite of products, documentation and Trademarks and the prevention of any unauthorized copying, reproduction, modification, adaptation, translation, reverse engineering, de-compilation, disassembly and creation of derivative works, is of the essence of this Agreement and that any failure on its part, however minor, to discharge its obligations shall constitute a material breach of this Agreement. + +7.TERM AND TERMINATION + +a) Term: This Agreement shall enter into effect on the date it is signed by both parties as shown below. + +b) Termination: This agreement shall terminate: + +i.upon notification of a Material Breach that is not cured within 10 business days thereafter; ii.Failure to cure a non-material breach within sixty days of written notice; iii.Automatically, unless otherwise agreed between parties, in the event that Agent is the subject of a proceeding in bankruptcy which is not dismissed within 60 days, is placed in receivership, or makes an assignment for the benefit of its creditors; or by iv.Termination for "Cause" by giving 3 months written notice by the Agent or Kallo. If given by Kallo, "Cause" shall be defined as non-performance on the part of the Agent by failing to make sufficient efforts to market the Kallo Mobile care suite of products. Should the parties disagree as to what constitutes "sufficient marketing efforts", the issue will be submitted to binding arbitration. This course of action is not intended to be a means for + +Page 12 + + + + + + Kallo, its successors or assigns, to take over the successful operation of Agent's business generated under this agreement without fair and just compensation. + + + + + + + + + + KALLO - MOBILECARE + +c) On Termination: Notwithstanding any terms of this agreement to the contrary, upon termination of this Agreement for any reason whatsoever, Kallo, unless otherwise agreed, shall set aside the Agent's Book of Business to be held by Kallo. + +i.The revenue stream defined by the Book of Business at the time Kallo becomes the controlling party will remain constant except in as far as any elected reduction in use by its customers. Any increase in use will not be to the benefit of the Book of Business. ii.Kallo shall pay over all funds collected from the Book of Business and due to Agent, less a reasonable administration fee to be assessed and determined by Kallo, to Agent or its designees or assigns immediately upon receipt and act as a conduit for Agent funds, except in as far as Kallo or its assignees are required to support customers in the Book of Business in which case the cost of providing such support, will be reasonably assessed and appropriate deductions made before passing the balance to Agent. In the event Agent does not agree with the costs described in this section, the issue will be submitted to binding arbitration. iii.Kallo shall make an accounting of funds collected to Agent or their assigns monthly. Kallo shall permit Agent or its designated Agent(s) to inspect Kallo's books upon Agent's request at Agent's expense during normal business hours of Kallo. iv.Kallo's failure to perform its duties in the event it becomes the controlling party of the Agent's Book of Business is a non-material breach of this agreement. v.In any dispute or litigation over the terms of this agreement, the prevailing party shall have reasonable attorney fees in addition to any settlement or damages awarded. + +d) Rights: Upon termination of this Agreement for any reason and unless otherwise agreed, all rights granted to Agent shall immediately cease and Agent shall immediately return to Kallo all Kallo Products and confidential information provided by Kallo except as otherwise provided in this Agreement. + +e) No Compensation: In the event of an agreed termination of this Agreement by both parties, neither party shall be liable to the + +Page 13 + + + + + + other for damages, losses, or expenses of any kind or character on account of the termination of this agreement in accordance with its terms, whether such damage, loss, or expense may arise from the loss of prospective customers of Agent, or expenses incurred or investments made in connection with the establishment, development, or maintenance of Agent's business. Termination or expiration shall not affect any claim, demand, or liability of any party created or arising hereunder prior to such time. + + + + + + + + + + All Kallo Mobile care suite of products distributed by Agent shall be transferred solely in Kallo standard packaging and through the terms of the appropriate Kallo Mobile care suite of products EULA between the customer and Kallo provided by Kallo from time to time. Delivery of copies of the Kallo Mobile care suite of products to Agent is made solely to enable Agent to exercise this right. Agent shall not license or transfer any Kallo product for the purpose of retransfer by or to others. + + KALLO - MOBILECARE + +8.FORCE MAJEURE + +a) Definition: "Force Majeure" shall mean any event or condition not reasonably within the control of either party, which prevents in whole or in material part the performance by one of the parties of its obligations hereunder or which renders the performance of such obligations as difficult or costly as to make such performance commercially unreasonable. + +b) Notice: Upon giving notice to the other party, a party affected by an event of Force Majeure shall be released without any liability on its part from the performance of its obligations under this Agreement, except for the obligation to pay any amounts due and owing hereunder, but only to the extent and only for the period that its performance of such obligations is prevented by the event of Force Majeure. The other party may likewise suspend the performance of all or part of its obligations hereunder to the extent that such suspension is commercially reasonable. Refer to Schedule B for available means of communication to all parties concerned + +9.ADDITIONAL PROVISIONS + +a) Rights: Kallo grants to Agent the non-exclusive and non-transferable right to distribute the use of the Kallo Mobile care suite of products to commercial end user customers. Refer to section (2) subparagraph (f) for non-exclusive and exclusive status and qualifying requirements. + +Page 14 + + + + + + + + + + + + + + + + This Agreement is not assignable by Agent without prior written consent by Kallo. In the event Agent changes its legal structure or undergoes a substantial change in ownership of its stock or other ownership interest, Kallo shall have the option of immediate termination of this Agreement. Kallo may assign this Agreement and its interest in the Kallo Mobile care suite of products to any party without the consent of Agent. This Agreement shall inure to the benefit of any successor of Kallo and shall not be affected by any change in the ownership or control of Kallo. Agent shall re execute this agreement within 60 days of the effective date of the change in ownership or change in legal structure or change of name. "Substantial change" in ownership is defined as a change in at least 51% ownership of the Agent. + + KALLO - MOBILECARE + +b) Limitations: Agent shall distribute only Kallo Mobile care suite of products that Agent has obtained from Kallo and not from any other seller of the Kallo Mobile care suite of products. For Tax reasons such distribution is deemed to take place at the Agent's business location identified above. + +c) Pricing: The pricing given in Schedule A is the transfer price from Kallo to the Agent and the Agent shall, in its discretion establish a reasonable price for each of the Kallo Mobile care suite of products EULA as per Schedule A. For Maintenance Contract pricing and details refer to Schedule A, section (9), subparagraph (B). Kallo reserves the right to revise and republish prices as shown in Schedule A from time to time. + +d) Payment terms: For each Kallo Mobile care suite of products license ordered by Agent from Kallo, Agent shall pay to Kallo the transfer price set forth in Schedule A. 50% of the total amount to be paid with the signed purchase order, 35% upon shipping of the goods to the carrier at Canadian port and 15% upon completion of the installation. Upon delivery of the system the Agent is responsible for getting the signed EULA from the customer before the installation process starts. + +e) Taxes: All taxes from the country of origin and destination including customs duty, withholding taxes, any other levies - international / local and freight and insurance are to the end-user or customers account. The Agent will work with Kallo to add all applicable taxes to the pricing given in Schedule A and should be paid to Kallo along with the purchase order and the 50% of the value of the total system + +10.ASSIGNMENT + +Page 15 + + + + + + + + + + + + + + + + + + + + + + KALLO - MOBILECARE + +11.MISCELLANEOUS + +a) Complete Agreement: This agreement and the provisions of the current sales agent program guidelines, as amended from time to time, constitute the entire agreement of the parties with respect to the subject matter hereof and supersede all previous agreements by and between Kallo and agent as well as all proposals, oral or written and all prior negotiations, conversations or discussions between the parties related to this agreement. Agent acknowledges that it has not been induced to enter into this agreement by any representations or statements, oral or written, not expressly contained herein. + +b) Amendment: This Agreement shall not be deemed or construed to be modified, amended, rescinded, cancelled or waived, in whole or in part, except by written amendment signed by the parties hereto. Refer to Schedule B for available means of communication to all parties concerned. + +c) Unenforceability: If any provision of this Agreement is held to be invalid, illegal or unenforceable, such provision shall be considered severable from this Agreement and the remaining provisions shall continue in full force and effect. The parties will replace a severed provision by a provision, which is closest to the intent of the parties. + +d) Notices: Notices permitted or required to be given hereunder shall be deemed sufficient if given i.by registered or certified mail, postage prepaid, return receipt requested, addressed to the addresses given in schedule B or such other addresses as the respective parties may designate by like notice from time to time, or ii.by international courier, telefax to or by email, the details of which are given in Schedule B. iii.Any notice shall be deemed effective when received by the receiving party. + +e) Governing Law and Jurisdiction: The laws of the province of Ontario, Canada, govern this AGREEMENT and, in respect of any dispute, which may arise hereunder; Agent consents to the jurisdiction of the federal and provincial courts of Ontario, Canada. + +f) Counterparts: This Agreement shall be executed in two or more counterparts in the English language and each such counterpart shall be deemed an original hereof. + +Page 16 + + + + + + + + + + + + + + + + KALLO - MOBILECARE + +g) Waiver: No failure by either party to take any action or assert any right hereunder shall be deemed to be a waiver of such right in the event of the continuation or repetition of the circumstances giving rise to such right. + +h) Government: If Agent is acting on behalf of any unit or agency of the United States Government, the following provisions apply: i.any products Agent acquires under this Agreement for or on behalf of the United States Government are provided to the United States of America with restricted rights. Use, duplication, or disclosure by the U.S. Government is subject to restrictions as set forth in subparagraph (c)(l)(ii) of the Rights in Technical Data and Computer Kallo Mobile care suite of products clause at DFARS 252.277-7013 and paragraph (d) of the Commercial Computer Kallo Mobile care suite of products-Restricted Rights clause at FAR 52.227-19; ii.Kallo grants Agent the right to transfer Kallo Mobile care suite of products to the United States government subject to the following restrictions. With the exception of the Department of Defense, you will not distribute the Kallo Mobile care suite of products to the United States of America except: a.on terms at least as restrictive as those set forth in subparagraph (c)(l)(ii) of the Rights in Technical Data and Computer Kallo Mobile care suite of products clause at DFARS 252.227-7013 and paragraph (d) of the Commercial computer Kallo Mobile care suite of products -Restricted Rights clause at FAR 52.227-19, and b.in compliance with particular department or agency acquisition regulations that provide Kallo protection at least equivalent to that provided by the above-referenced DFARS and FAR provisions. + +i) Export Restrictions: Agent expressly agrees to neither directly or through third parties export nor transmit any Kallo Mobile care suite of Products to any country to which such export or transmission is restricted or prohibited by applicable regulations or statutes, or any country other than the United States of America or Canada. + +j) Non-Disparagement: During the term hereof and for a period of two years thereafter, each of Agent and Kallo agrees that it will refrain from making any representation, statement, comment or any other form of communication, whether written or oral (hereinafter collectively referred to as a "Communication"), to any third party, including but not limited to the principals, customers, suppliers and competitors of the other party, which Communication reflects any opinion, judgment, observation or + +Page 17 + + + + + + representation of fact, which has the effect or tendency to, or could have the effect or tendency to, disparage, denigrate, criticize or otherwise reflect negatively on the other party and/or the other party's products, services, officers, directors, shareholders, employees or investors (a "Disparaging Communication"). Each party agrees that it will use all reasonable commercial efforts to prevent its employees from making any Disparaging Communications regarding the other party and/or the other party's products, services, officers, directors, shareholders, employees or investors; provided, however, that nothing in this Section (11), subparagraph (j) shall restrict or impede the exercise of any rights or remedies of a Party under this Agreement. In Witness Whereof, the Parties hereto have executed this Agreement as of the date below. And confirm, we have read, understood and agree to the terms of the strategic alliance agreement - mobile care + + + + KALLO - MOBILECARE + +Kallo Inc. JOHN CECIL Signature John Cecil Name Chairman & CEO Title Markham, ON 24 OCT 2011 Place Date Petro data Management Services Limited Gateway Global Fabrication Ltd., BABAJIDE SOYODE AJAI KUNNATH Signature Signature Babajide Soyode Ajai Kunnath Name Name Chairman & CEO President & CEO Title Title Ikeja, Lagos, Nigeria 24 OCT 2011 River State, Nigeria 24 OCT 2011 Place Date Place Date + +Page 18 + + + + + + + +SCHEDULE - A Description of Kallo Mobile care suite of products + + The Kallo Mobile Medical Clinics are one of a kind in the world having all the diagnostic capability for basic to mid tier specialty medical care and these units can be used in the following areas to augment healthcare delivery services. Places where there is no hospitals or clinics and emergency situations The Mobile Medical Clinics can be taken by road to these areas and patients or causalities can be taken into the vehicle and treated immediately with effective and real-time consultation with specialists via satellite. Hospitals where there is no technology available for diagnosis and treatment The Kallo Mobile Medical Clinics can be driven to, and parked in existing hospitals and patients can get the latest in technology for diagnosis and treatment, thus many hospitals in villages and rural areas can be upgraded in their healthcare services with latest equipment for diagnosis and treatment with the specialist care through remote tele-consultation. The Kallo Mobile Medical Clinics are designed to take comprehensive health care services (preventive, promotive and curative) to rural remote villages and will reach out to the most underprivileged but needy people across the country. The services provided are outpatient services, Ante-natal/post-natal services, identification of difficult pregnancy and referral for institutional care, Immunization- Mother & children, Minor surgery, BP examination, X-ray, ECG, First Aid, Distribution of Iron Folic tablets, Vit-A Prophylaxis, Treatment of mal-nutrient cases, etc. + + KALLO - MOBILECARE + +1.Mobile Acute Care Clinic + +Page 19 + + + + + + + + The Mobile Chemotherapy Clinic serves as an extension to the chemotherapy administration in the regional Oncology departments of the teaching / general hospitals or dedicated Cancer hospitals. Blood work is performed the day before and a nurse is then able to contact the patient in advance to review test results and schedule treatment sessions and advise pre-treatment preparation of the patient. Chemotherapy drugs and related equipment, all individually packaged for each patient, is received from the Regional Cancer hospital command center. Chemotherapy chair that includes a chair-side touch-screen interactive system enabling patients to call a nurse, select a book for reading from the exhaustive electronic library. Integrative medicine services such as Reiki, acupressure, and massage therapy can be delivered chair-side by specially trained nurses on staff. Telemedicine system to enable patients to communicate with their physicians, nurses, and healthcare professionals from other disciplines and social work. + + The mobile dialysis clinic works exactly like a dialysis center. The vehicle has the clinical, technical and support staff and is well equipped with the necessary machinery required to perform the standard procedure for dialysis. This includes dialysis machine, recliner, power backup, and a water tank with water purified through reverse osmosis (RO) system. It has a fully automated and remote controlled dialysis chair, which works like a dialysis bed and there is a monitor defibrillator and an artificial respirator. It also carries accessories and equipment required to tackle emergencies. The machine and accompanying accessories can be moved into homes and patients can receive the treatment along the bedside. + + KALLO - MOBILECARE + +2.Mobile Chemotherapy Clinic + +3.Mobile Dialysis Clinic + +Page 20 + + + + + + + + Our Mobile care is equipped with a dedicated, affordable and accurate CD4+ T-cell and CD4% enumeration in HIV monitoring and patient follow-up. The CyFlow® Counter is a fully equipped portable and ultra compact desktop flow cytometer dedicated for routine CD4 and CD4% counting (as well as total lymphocyte and WBC counting). Equipped with Portable and Battery-Operated Fluorescence Microscope for Malaria diagnostics and monitoring. The Partec CyScope® is a microscope for fluorescence light detection employing incident UV light and transmitted light detection. Integrated with a CCD camera for taking images of the slide for further investigation by image analysis software. + + The Mobile Clinic Command Center is installed in Specialist / Teaching hospitals to provide real-time support for the Front line Medical officers and staff in the Mobile Clinics for Clinical care-plan, clinical treatment protocol, clinical diagnostic protocol and procedures to optimize the Mobile clinic function and to establish seamless continuum of care. Each Command Center, based on the throughput of patients in the Mobile clinics can manage on an average of 4-5 Mobile clinics. Note: + + + + + + KALLO - MOBILECARE + +4.Mobile HIV & Malaria Clinic + +5.Mobile Clinic Command Center + +a)Medications and medical consumables are not provided in the Mobile Medical Clinics and shall be provided at additional cost. b)Auxiliary equipment for the Mobile Clinics: + +i)Stretchers, backboards, collars, drugs, medications and other medical supplies can be provided at additional cost. ii)All medical supplies to the government shall be on a contract supply based on demand, negotiated after the principal purchase order is placed for the Mobile Clinic. + +Page 21 + + + + + + + + Paramedic staff in Kallo's Mobile Medical Clinics are provided a high level of pre-hospital medical training involving key skills not performed by technicians, including cannulation, cardiac monitoring, intubation etc., by Kallo's Internationally accredited doctors. + + Specialty training (Focused on providing specialty care in conjunction with Specialists at teaching hospitals or Specialist care hospitals such as Pediatrics, Cardiology, Nephrology etc.,) for Front line Medical officers and staff in the Mobile Clinic and the Command center provided at additional cost based on assessment of resources and training requirements. + + Basic training for Front line Medical officers and staff is included in the cost. This training is for the duration of 1 week and can hold 10 people. Student Material for ACLS for one student is US$80/- (Includes quick access algorithm cards) Text Book for Basic Trauma and life support for one student is US$120/- Cost of Training per any additional week of 5 days is US$ 40,000/- (For Doctors and Clinical/Biomedical Engineers travel stay and charges) + + + + + + KALLO - MOBILECARE + +6.Training: + +7.Specialty training: + +8.Basic training: + +9.Maintenance: + +A.Mobile Clinic and Command Center maintenance is included in the Five year Standard Mandatory Maintenance as per the Program description given in Schedule E + +Page 22 + + + + + + + +SCHEDULE - B Communication + + + + KALLO - MOBILECARE + +KALLO Inc., + +Attn: Mr. John Cecil Address: 15 Allstate Parkway, Suite #600 Markham, Ontario, L3R 5B4 Canada Telephone:+1-416-246-9997 Fax: +1-905-415-0332 Email: john@kalloinc.com anna.s@kalloinc.com Petro data Management Services Limited., Attn: Mr. Babajide A. Soyode Address: Motorways Centre Block 'B', Ground Floor 1 Motorways Avenue, Alausa, Lagos, Nigeria. Telephone:+234-01-2708786 Fax: + Email: info@petrodata.net Jide.soyode@gmail.com Gateway Global Fabrication Ltd., Gateway Canada and Gateway International Inc., Attn: Mr. Ajai Kunnath Address: GATEWAY GLOBAL FABRICATION LTD. No-2 Olodu Street, Off Oluobasanjo Road, Portharcourt, Rivers state, Nigeria. Address: Gateway Canada. 147 Spring Gate Blvd., Thorn hill, Ontario, L4J 2B2 Tel: +1-647-288-2763 Mobile: +1-647-9385471 Fax: + Email: ajai.kunnath@gvcal.com + +Page 23 + + + + + + + +SCHEDULE - C Roles and Responsibilities defined for Kallo's Mobile Care operations in Nigeria under this Strategic Alliance Agreement PETRODATA OPERATIONS + + ADMINISTRATIVE + + KALLO INC + + + + KALLO - MOBILECARE + +1.Customs clearance and delivery of Mobile Clinics. 2.Training of Client's Operations 3.Personnel of various cadres, doctors, nurses, paramedics, drivers, and medical technicians / technologists 4.Maintenance of medical equipment 5.Maintenance of the automobile and the engine of the Mobile Clinic and diesel generators 6.Procurement of communication channels such as satellite feed and high-speed internet connectivity for Command Centers 7.Provision of data acquisition and back-up storage systems 8.Supply of all local manpower, not provided by clients 9.Supply of residential accommodation, land transport, and general 10.Welfare amenities to all foreign personnel 11.Specialized IT and satellite communication support for Mobile Clinics + +1.Letters of invitation to Kallo personnel for visas 2.Procurement of all import permits and licenses 3.Accommodation, welfare, and security arrangements 4.Arrangements for meetings with various organizations 5.Local transportation and security 6.Employment of local operational support staff, as required + +1.Supply of Mobile Clinics and all operating equipment and software 2.Supply of all training personnel and materials for clinical staff (Doctors, Nurses and Front line Medical officers) and Biomedical Engineers and software Engineers. 3.Sourcing of backup foreign medical consultants, as required 4.Tele-health consulting for second opinion from medical specialists from US, Canada and UK 5.Procurement of all export permits and licenses 6.Supply of drugs/medications and spare parts during and after the warranty period. + +Page 24 + + + + + + GATEWAY + + BAS CONSULTANTS INTERNATIONAL CORPORATION (BASCIC) + + KALLO - MOBILECARE + +1.Purchasing and transportation of Mobile Clinics, operating equipment, spare parts, medical consumables, drugs/medications to various distribution centers in Nigeria to replenish stocks in the Mobile Clinic, from Kallo Inc. Canada. 2.Customs clearance and inland transportation 3.Assistance with local market development and liaison with clients + +(Engr. B. A. Soyode) + + + +SCHEDULE - D Mutually accepted Sales Target + + + +1.All Parties in this agreement appoint BASCIC as Project manager without prejudice. 2.Project development, management and coordination 3.Liaison with Governments and clients and responsible for payments to Kallo and supply chain management of Medical consumables and medications/drugs from Kallo. + +Mobile Clinics Year Estimated Value Remarks 2 Q4 2011 $14.575 Million To retain Exclusivity for Nigeria 3 Q1 - Q2 2012 $21.863 Million To retain Exclusivity for Nigeria 2 Q3 - Q4 2012 $14.575 Million To retain Exclusivity for Nigeria 3 Q1 - Q2 2013 $21.863 Million To retain Exclusivity for Nigeria 2 Q3 - Q4 2013 $14.575 Million To retain Exclusivity for Nigeria 3 Q1 - Q2 2014 $21.863 Million To retain Exclusivity for Nigeria 2 Q3 - Q4 2014 $14.575 Million To retain Exclusivity for Nigeria 3 Q1 - Q2 2015 $21.863 Million To retain Exclusivity for Nigeria 2 Q3 - Q4 2015 $14.575 Million To retain Exclusivity for Nigeria 3 Q1 - Q2 2016 $21.863 Million To retain Exclusivity for Nigeria 2 Q3 - Q4 2016 $14.575 Million To retain Exclusivity for Nigeria + +Page 25 + + + + + + + +SCHEDULE - E Mandatory Medical Equipment Service Program for Five-year Warranty All equipment provided in the Mobile Clinic are covered under this program and the service provision is a very unique model, where Senior Biomedical Engineers trained and certified by the manufacturers are to perform the following services located at Kallo Headquarters, coordinate with the manufacturers and the local onsite support Biomedical Technicians and provide the following services: + + + + This program has a set of planned routine maintenance schedule for each device of medical equipment based on the original equipment manufacturers' recommendations, applicable codes and standards given in section 7. + + This program has scheduled and unscheduled calibration of the medical equipment in the Mobile Clinic. Each medical device has a scheduled calibration of certain parts critical to the functional accuracy of the equipment, which is carried out as per the original equipment manufacturers' guidelines. The unscheduled calibration of the equipment is normally carried out if and when there is a request from the staff or doctors when they observe certain calibration errors. + + Safety of patients, staff, and environment is paramount to the success of the Mobile Care project. The Joint Commission on the Accreditation of Healthcare Organizations publishes annual lists detailing "National Patient Safety Goals" to be implemented by healthcare organizations. Goals are developed by experts + + KALLO - MOBILECARE + +1.Planned and Corrective Maintenance 2.Calibration of Medical Equipment 3.Patient, Staff and Environment safety 4.Breakdown Services and Maintenance 5.Application and operation support 6.Risk Management 7.Codes and Standards adherence for International compliance + +1.Planned and Corrective Maintenance + +2.Calibration of Medical Equipment + +3.Patient, Staff and Environment Safety + +Page 26 + + + + + + in patient safety, nurses, physicians, pharmacists, risk managers, and other professionals with patient-safety experience in a variety of settings. Patient safety is among the most important goals of every healthcare provider, and participation in a variety of committees and processes concerned with patient safety provides a way for biomedical managers and clinical engineering departments to gain visibility and positively affect their workplace. Kallo's Patient and Operator Safety Program uses a comprehensive software where in the actual work process within the Mobile Care Clinic is monitored by the onsite Biomedical Technicians guided by the Senior Biomedical Engineers at Kallo Headquarters qualified for managing the patient, staff, and environment safety to international standards. + + The program covers all equipment in the Mobile Clinic. The local onsite Biomedical technicians will be the first response team to attend to any and all breakdown calls from the Mobile Clinic. The Biomedical Technicians will then have Kallo Biomedical Engineer support to resolve the issues as quickly as possible. After the breakdown service is carried out and the equipment is fixed and recalibrated, the Senior Biomedical Engineers would then advise if a maintenance service has to be carried out to due to the nature of breakdown. + + The program covers all medical equipment in the Mobile Clinic. Kallos' Certified Clinical Engineers / Biomedical Engineers and Clinical Application support specialists will be available via Video/Teleconference/Telehealth systems in the Mobile clinic for all clinical application support in using technology for diagnostic and therapeutic healthcare services. This is a critical component of the program offered in order to make it successful in using technology at the front end which is normally neglected by all medical equipment manufacturers' when the equipment is deployed in remote areas with medical staff who are not exposed to technology as the case may be in urban areas, developed cites or countries. + + This program helps avoid the likelihood of equipment-related risks, minimize liability of mishaps and incidents, and stay compliant with regulatory reporting requirements. In addition, user error, equipment abuse, no problem/fault found occurrences + + KALLO - MOBILECARE + +4.Breakdown Service and Maintenance + +5.Application Support + +6.Risk management + +Page 27 + + + + + + must be tracked to assist risk management personnel in determining whether additional clinical staff training must be performed. Risk management for IT networks incorporating medical devices will be covered by the standard ISO/IEC 80001. Its purpose is: "Recognizing that MEDICAL DEVICES are incorporated into IT-NETWORKS to achieve desirable benefits (for example, INTEROPERABILITY), this international standard defines the roles, responsibilities and activities that are necessary for RISK MANAGEMENT of IT-NETWORKS incorporating MEDICAL DEVICES to address the KEY PROPERTIES". Such as ISO 20000 in the context of medical applications, e.g. configuration, incident, problem, change and release management, and risk analysis, control and evaluation according to ISO 14971. IEC 80001 "applies to RESPONSIBLE ORGANIZATIONS, MEDICAL DEVICE manufacturers and other providers of information technologies for the purpose of comprehensive RISK MANAGEMENT". 7. Codes and Standards adherence for International compliance: 1. JCAHO Comprehensive Accreditation Manual 2. AABB 3. NFPA 99 a. Gas and Vacuum Systems b. Electrical Systems 4. FDA 5. SMDA 6. OSHA + + KALLO - MOBILECARE + +Page 28 + + + + + + + +SCHEDULE - F Medical Equipment description Blood Chemistry Analyzer + + KALLO - MOBILECARE + +Advanced i-STAT Cartridge Technology or equivalent system Most Comprehensive Bedside Testing Platform: i-STAT cartridge technology streamlines traditional lab technology, yet contains many of the components found in complex lab testing systems. Each test cartridge contains chemically sensitive biosensors on a silicon chip that are configured to perform specific tests. To perform a test, 2 to 3 drops of blood are applied to a cartridge, which is then inserted into the i-STAT handheld. Prior to running a test, each cartridge initiates a series of preset quality control diagnostics, from monitoring the quality of the sample to validating the reagent. Each i-STAT single-use cartridge uses advanced biosensor technology that applies microfluidics to process the most comprehensive range of clinical tests in a single platform, allowing clinicians to access the time-sensitive diagnostic information they need, when and where they need it. Available tests include diagnostic indicators related to disease state and clinical practice guidelines. Test-specific, single-use i-STAT cartridges are available for a range of clinical tests, including cardiac markers, lactate, coagulation, blood gases, chemistries and electrolytes, and hematology. Delivers lab-quality test results to the clinician within minutes The portable i-STAT handheld makes patient-side testing easy: + + Patient-side testing is as easy as entering the operator and patient information into the handheld, inserting one of the several testing cartridges, and then viewing test results: + + + +·requires no special sample preparation or user calibration; maintenance is minimal ·weighs 18 ounces, making it completely portable ·features ergonomically designed soft keys for comfort and ease of use + +·The system prompts users step by step through the testing process ·Operator and patient information can be entered via barcode scanner ·Operator lockout prevents unauthorized users from performing or viewing test results + +Page 29 + + + + + + + +With over 50,000 handhelds placed in high-acuity settings worldwide-including over 1,800 hospitals-and over 35 million test cartridges produced annually, the i-STAT System is trusted to provide lab-quality results. i-STAT Integration Into Point-of-Care Data Management and Electronic Medical Records The i-STAT® System can integrate test results with your Lab Information System (LIS) and Electronic Medical Records (EMR). This is achieved through flexible connectivity and interfacing solutions, which serve to ensure your facility gets real-time results in the patient electronic chart. i-STAT System integration with Laboratory Information Systems (LIS)/Electronic Medical Records (EMR) + + The i-STAT System connects to the Point-of-Care Data Management System of your choice and then interfaces to the EMR via your LIS. Integration options include: + + Addressing Documentation Challenges with STATNotes™ STATNotes is a highly customizable documentation solution for the i-STAT 1 handheld. This unique feature facilitates timely documentation of complex and critical data by prompting the user to enter information into the i-STAT 1 during the testing process. The information is then automatically uploaded to the patient chart with the test results. Customizing your i-STAT System to prompt data entry: + + KALLO - MOBILECARE + +·Test results are uploaded automatically when the i-STAT handheld is placed in a downloader + +·The Central Data Station System from Abbott Point of Care ·Abbott Diabetes Care PrecisionWeb® ·Medical Automation Systems RALS+™ RALS® Plus ·Telcor Quick-Linc® + +Page 30 + + + + + + + +STATNotes can help guide users to be compliant with The Joint Commission National Patient Safety Goals and hospital policies. For example, many of our customers use STATNotes to capture comprehensive ventilator setting information, documentation of critical test notification, and "read back" acknowledgment of critical tests and critical values. Data Management and Laboratory Regulatory Compliance The i-STAT System gives you control over who can use the device and access test results. It also offers many features designed to help laboratories maintain regulatory compliance, such as: + + Abbott Point of Care will work with your team to ensure seamless integration with your data management system. Urine Chemistry Analyzer CLINITEK Status® Analyzer or equivalent system Intended Use + + Table of Results The results shown in shaded areas will be marked as positives, if "mark positive results" is selected in Instrument Set Up. The results will be marked by asterisks when displayed, when printed and when the data is transferred to a host computer. + + KALLO - MOBILECARE + +·streamlines workflow ·helps reduce errors ·allows for increased efficiency ·facilitates compliance + +·managing operator certification and device lockout ·reporting on operator performance ·reporting on both liquid and equivalent quality control ·reporting on reagent usage ·laboratory Information System interfacing + +·The Analyzer is for in vitro use in the semi-quantitative detection of albumin, bilirubin, blood (occult), creatinine, glucose, ketone (acetoacetic acid), leukocytes, nitrite, pH, protein, specific gravity and urobilinogen in urine samples, depending on the type of Siemens urinalysis strip used. ·The semi-quantitative calculation of albumin-to-creatinine and protein-to-creatinine ratios in urine samples, when Clinitek® Microalbumin and Multistix PRO® Reagent Strips for Urinalysis are used. ·The detection of human Chorionic Gonadotropin (hCG) in urine samples, when Clinitest® hCG cassettes are used. + +Page 31 + + + + + + + + KALLO - MOBILECARE + +Page 32 + + + + + + + + + + + + Urinalysis has become an indispensable tool in healthcare.
 + + In today's busy physician's office environment, interruptions are frequent and can contribute to timing errors and variability in results when urinalysis strips are read visually. Studies have shown that when urinalysis is performed with an instrument, sensitivity is increased and positives are correctly identified and reported.1 + + 1. Tighe P. Improving the quality of urine strip testing: The Clinitek 50 urine chemistry analyser. Euro Clin Lab, June 1997,16:20. + + KALLO - MOBILECARE + +·Provides important markers to detect early stages of many disease states, such as diabetes, kidney disease and urinary tract infections. ·Enhances disease monitoring and patient management. ·Semi-quantitative results have proven to be cost-effective and virtually immediate. + +Page 33 + + + + + + + + + + KALLO - MOBILECARE + +Page 34 + + + + + + Digital Radiography System RadPRO D2RS
Dynamic Digital Remote RF System or equivalent system Digital Radiography & Fluoroscopy Solutions + + Features + + + + KALLO - MOBILECARE + +•Canon CXDI-50RF Dynamic/Static Digital Radiography System
The RadPRO D2RS Dynamic Digital Remote RF System is compatible with the Canon CXDI-50RF Dynamic/Static Digital Radiography System that includes a Cesium Iodide scintillator. Including both dynamic and static capabilities, high resolution images are produced and may be previewed within 2-4 seconds after exposure in the radiography mode with the optional monitor. The radiography mode produces up to 15 frames per second (fps), and up to 30 fps in the fluoroscopy mode, depending on the image capture mode and size. The detachable cable allows the digital detector to be used in multiple rooms or multiple locations within the same room. •Dynamic and Static Imaging The Canon CXDI Control Software RF, designed specifically for the Canon CXDI-50RF Dynamic/Static Digital Radiography System, features a wide range of fluoroscopic procedures and includes all the standard DICOM functions. Exams include spine, Osteo-articular, Barium swallow and esophagus, stomach and small intestine, Barium enema and large bowel, Endoscopy/ERCP, Urography, Cystography, Hysterosalpingography, Myelography, Arthrography, Venography and more. The software also delivers high-resolution images, generator communication for preset X-ray parameters, provides actual exposure factors and patient dose information in the DICOM header. Studies that require full spine and long leg imaging are fully automated. With the automated stitching capability up to 4 images can be stitched together. + +Page 35 + + + + + + + + Digital Retina Scanner CR-2 PLUS or equivalent system Digital Non-Mydriatic Retinal Cameras + + Overview
The Canon CR-2 PLUS Digital Non-Mydriatic Retinal Camera provides Color and Fundus Autofluorescence (FAF) imaging within a small compact design. Geographic Atrophy, Macular Degeneration, Glaucoma, Diabetic Retinopathy and other conditions that can affect vision may also be identified and monitored using FAF mode. Using invisible infrared alignment light, the digital non-mydriatic camera may image patients with pupils as small as 3.3 mm (small pupil mode) without dilation drops. This is especially useful when performing retinal screenings or expediting routine retinal imaging exams during office visits. + + KALLO - MOBILECARE + +• High Quality Images
High resolution static images can be previewed within 3-5 seconds after exposure on a monitor (optional). Images may be configured automatically with post-processing and are ready to be printed or transmitted through the network using industry standard DICOM protocols. • Full Patient Coverage End-to-end table coverage is available when the motorized tube column angulation is combined with the motorized tube rotation. The motorized table adjusts the height, and the low minimum height simplifies access for patients with mobility issues. When patients arrive at the radiology room on a trolley or in a bed, Smart Access provides clear access to a 47 inch (120 cm) section of the table top to allow for a simplified transfer. The table loading capacity accommodates patients weighing up to 500 lbs (230 kg). • Auto-Positioning 
able movements, collimation and spectral filtration settings, exposure and digital acquisition parameters may be administered with the single touch, remote-controlled user-interface reducing the preparation time needed for exams. + +Page 36 + + + + + + Features + + + + KALLO - MOBILECARE + +•Non-Mydriatic Fundus Autofluorescence (FAF) Photography
Fundus Autofluorescence (FAF) helps monitor macular waste (e.g. lipofuscin) which can accumulate in the Retinal Pigment Epithelial (RPE) layer. The accumulation of macular waste can cause conditions such as Age-Related Macular Degeneration (AMD) which can lead to reduced vision. The FAF mode may be selected by pressing only one button. •Digital Filter Processing Red-Free and Cobalt digital filters are included and provide enhanced screening exams. Red-Free is used for evaluating the Retinal Nerve Fiber Layer (RNFL) and vascular structure of the retina associated with documenting Glaucoma, Diabetic Retinopathy or Hypertension. The Cobalt filter is also used for evaluating the RNFL, as well as Optic Disc and Optic Disc Drusen. Additionally, Green (Vascular view) and Red channel (Choroid view) digital filter views are also included. •Compact and Lightweight 
he small design of the CR-2 PLUS facilitates portability when needed using an optional hard shell transport case sold separately. Canon instrument tables (sold separately) may comfortably fit both the camera and computer workstation (sold separately). The space saving design also allows for use in limited office space environments. •Dedicated EOS Camera Technology 
Hgh quality diagnostic images are obtained using a dedicated camera for the CR-2 PLUS which incorporates a large, high-definition CMOS sensor with 18 megapixels. When the camera cover is removed, the LCD may be adjusted to a variety of titled angles to suit the user's point of view. •Low Flash Intensity and ISO Sensitivity 
Th low flash intensity of the CR-2 PLUS minimizes miosis, thus shortening the time required for taking multiple view exams or stereo images. The reduced brightness improves patient comfort and reduces the "ghost" image the patient sees after an exposure. A wide range of low ISO speeds are supported including ISO 200, 400, 800, 1600, 3200 and 6400. •Automatic Exposure Function 
TheCR-2 PLUS measures the volume of infrared light from the retina and automatically adjusts the flash intensity for observation and photography. This feature may be set to ON/OFF and can be adjusted using the operation panel. •Control Panel 
The implified design of the control panel can be easily handled by an examiner. The one-handed joystick may be used to position the camera to acquire the desired image. In darkly lit rooms, the operation panel illuminates for easier navigation. The short main body of the CR-2 PLUS provides minimal distance between the patient and the operator allowing easy access to adjust the patient's position or eyelids. •Retinal Imaging Control Software 
Usingthe Canon Retinal Imaging Control Software (RICS), images can be captured, viewed, processed, printed and saved to a permanent storage database. The Canon RICS complies with the DICOM®* Standard. Images may be stored as DICOM or JPEG files. For more information, visit Retinal Imaging Control Software. + +Page 37 + + + + + + Ultrasound Scanner LOGIQ 9 or equivalent system + + E-Series transducers
Incredible transducer technology makes imaging incredibly easy.

E-Series transducers set an entirely new standard in acquiring extraordinary images. The moment you put the transducer on the patient, these highly advanced, ergonomically designed transducers work with the agile architecture to maximize image quality. + + Highly advanced transducer technologies for high-quality images: + + Acoustic Amplifier Technology built into the new E-Series transducers achieves higher sensitivity by recycling the acoustic energy that used to pass through the transducer crystal. It redirects this previously wasted energy back into the piezoelectric crystal, adding significantly to the transducer sensitivity. + + KALLO - MOBILECARE + +·Acoustic Amplifier Technology ·Single Crystal Technology ·Matrix Array Technology ·Volume Hybrid Technology + +Page 38 + + + + + + Single Crystal Technology increases bandwidth, offering better signal to noise and improved axial resolution and penetration. Matrix Array Technology helps achieve uniform resolution throughout the field of view, eliminating the compromise between penetration and image resolution. Volume Hybrid Technology encompasses a new range of Volume transducers bringing an outstanding spatial and temporal resolution. LOGIQ E9 knows the next step of a scan and helps you get there like no other ultrasound system can. It's all part of the technologically advanced Scan Assistant, your customizable scanning protocol. Scan Assistant does things that an ultrasound system has never done before, including automatically steering color Doppler and setting up imaging controls and modes for you. Now you can truly concentrate less on keystrokes and more on patient care. Digital Smartscope + + KALLO - MOBILECARE + +Optomed Smartscope or equivalent system Optomed Smartscope is a digital camera that provides general, ophthalmoscope, otoscopic and dermatoscopic imaging with one hand -held device. + + + + + + + +Page 39 + + + + + + Multi Function Digital Stethoscope CMS VESD Digital Stethoscope or equivalent system + + CMS-VESD is a multi-functional visual stethoscope. On the basis of stethoscope function, it is added with ECG and SpO2 monitoring function. The multi-functional characteristic of the device makes it is effective on emergency treatment. + +Specification + +Stethoscope + + + + KALLO - MOBILECARE + +·Compact and portable, easy to use ·Suitable for adult, pediatric and neonatal patients. ·Heart, Lung, Heart and Lung sound models for Stethoscope. ·Large color LCD display of ECG, SpO2 and Pulse rate ·Adjustable audible and visual alarms ·Real-time monitoring.24 hours storage and review of data ·SD card memory, all data can be transferred to a PC ·Low power consumption. + +·Power Supply : Lithium Battery DC3.6~DC4.2V ·Display : 2.4" Color LCD + +·Heart：20～230Hz ·Lung：100～800Hz ·H& L：20～800Hz ·Accuracy:± 2 bpm + +Page 40 + + + + + + Heart Rate + + Pulse Rate + + SpO2 + + Patient Weighing Scale for Telehealth UC321 Digital Weighing scale or equivalent system Personal Scales for Telemonitoring + + + + An accurate and precise scale specifically designed for telemedicine applications. The UC-321 series provides highly accurate and precise measurements for telemedicine applications. These scales are one of the thinnest and lightest scales on the market. Measuring less than 1" thick, it is easy to step on and store. + + KALLO - MOBILECARE + +·Measurement range: 30bpm～300bpm; ·Accuracy: ± 2 bpm + +·Measurement range: 30bpm 250bpm; ·Accuracy: ± 2 bpm or ± 2% + +·Measurement range: 35%～100%; ·Accuracy: 70~100% (± 2% ) <70% unspecified. + +·Precise measurements ·Displays weight in either pounds or kilograms ·Memory recall with time/date stamp on select models ·Includes four attachable feet for carpet use ·Motion Tolerance Mode on select models + +Page 41 + + + + + + + + KALLO - MOBILECARE + +This sleek and stylish unit offers more precise readings and functionality compared to traditional scales. Available with wired or wireless communications. Digital Blood Pressure Monitor for Telehealth AND Digital Blood Pressure Monitor or equivalent system Blood Pressure Monitors for Telemonitoring + + + + A leading blood pressure monitoring system among telemonitoring service providers. This blood pressure monitor can send real-time blood pressure measurements to the Access Point. These devices can also operate in + +·Professional accuracy via oscillometric method ·Clinically validated ·One button operation ·Memory storage ·Provides time and date stamp ·Each monitor has unique serial number ·Meets ANSI/AAMI SP10 standards + +a batch-mode to send a number of measurements with time and date in a single request command. Available with wired or wireless communications. Page 42 + + + + + + Telepharmacy Solution Integrates remote or local pharmacist-controlled dispensing system cabinetry and software, pharmacy software and televideo technology into one system individually designed to meet all your needs. It brings real-time medication dispensing and pharmacist counseling to the point of care. + +Improves patient care and satisfaction + + + + KALLO - MOBILECARE + +·Provides immediate medication access - no more waiting or unnecessary trips. ·Enhances prescription fulfillment - resulting in greater patient compliance. ·System software/multiple barcode verifications virtually eliminate dispensing errors. + +Page 43 + + + + + + + +SCHEDULE - G Kallo Mobile care suite of products (Price is subject to change based on the requirement and configuration of various systems in the Mobile Clinic, and is exclusive of taxes, levies custom duties, freight and insurance.) + + KALLO - MOBILECARE + +Description Kallo Price Agent Markup End user price Mobile Acute Care Clinic - Base price $2,650,000 $265,000 $2,915,000 + + NOTE: PRICING INCLUDES TELE PHARMACY SYSTEM COSTING $150,000/ - FOR EACH MOBILE CLINIC. + +Standard Mandatory Maintenance Service for 5 years $2,915,000 $1,457,500 $4,372,500 $1,722,500 $7,287,500 Description Kallo Price Agent Markup End user price Mobile Chemotherapy Clinic - Base price $1,850,000 $185,000 $2,035,000 Standard Mandatory Maintenance Service for 5 years $2,035,000 $1,017,500 $3,052,500 $1,202,500 $5,087,500 Description Kallo Price Agent Markup End user price Mobile Dialysis Clinic - Base price $1,600,000 $160,000 $1,760,000 Standard Mandatory Maintenance Service for 5 years $1,760,000 $880,000 $2,640,000 $1,040,000 $4,400,000 Description Kallo Price Agent Markup End user price Mobile HIV & Malaria Clinic - Base price $1,800,000 $180,000 $1,980,000 Standard Mandatory Maintenance Service for 5 years $1,980,000 $990,000 $2,970,000 $1,170,000 $4,950,000 Description Kallo Price Agent Markup End user price Command Center for Mobile Clinics $550,000 $55,000 $605,000 Standard Mandatory Maintenance Service for 5 years $605,000 $302,500 $907,500 $357,500 $1,512,500 + +Page 44 \ No newline at end of file diff --git a/full_contract_txt/KENTUCKYUTILITIESCO_03_25_2003-EX-10.65-TRANSPORTATION AGREEMENT.txt b/full_contract_txt/KENTUCKYUTILITIESCO_03_25_2003-EX-10.65-TRANSPORTATION AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..74d78226e400f1eee4d709c631898ea5938383f5 --- /dev/null +++ b/full_contract_txt/KENTUCKYUTILITIESCO_03_25_2003-EX-10.65-TRANSPORTATION AGREEMENT.txt @@ -0,0 +1,251 @@ +EXHIBIT 10.65 EXHIBIT II NOVEMBER 1, 2002, RATE FT-A AGREEMENT BETWEEN LG&E AND TENNESSEE GAS PIPELINE COMPANY + + + + + + Service Package No: 40715 Amendment No: GAS TRANSPORTATION AGREEMENT (For Use under FT-A Rate Schedule) THIS AGREEMENT is made and entered into as of the 1st day of November, 2002, by and between TENNESSEE GAS PIPELINE COMPANY, a Delaware Corporation, hereinafter referred to as "Transporter" and LOUISVILLE GAS AND ELECTRIC COMPANY, a Kentucky Corporation, hereinafter referred to as "Shipper." Transporter and Shipper shall collectively be referred to herein as the "Parties." ARTICLE I - DEFINITIONS 1.1 TRANSPORTATION QUANTITY - shall mean the maximum daily quantity of gas which Transporter agrees to receive and transport on a firm basis, subject to Article II herein, for the account of Shipper hereunder on each day during each year during the term hereof, which shall be 51,000 dekatherms. Any limitations on the quantities to be received from each Point of Receipt and/or delivered to each Point of Delivery shall be as specified on Exhibit "A" attached hereto. 1.2 EQUIVALENT QUANTITY - shall be as defined in Article I of the General Terms and Conditions of Transporter's FERC Gas Tariff. ARTICLE II - TRANSPORTATION Transportation Service - Transporter agrees to accept and receive daily on a firm basis, at the Point(s) of Receipt from Shipper or for Shipper's account such quantity of gas as Shipper makes available up to the Transportation Quantity, and to deliver to or for the account of Shipper to the Point(s) of Delivery an Equivalent Quantity of gas. ARTICLE III - POINT(S) OF RECEIPT AND DELIVERY The Primary Point(s) of Receipt and Delivery shall be those points specified on Exhibit "A" attached hereto. ARTICLE IV 4.1 All facilities are in place to render the service provided for in this Agreement. 4.2 Pursuant to Article VIII, Section 1 of the General Terms and Conditions of Transporter's Tariff ("GT&C"), Transporter shall cause the delivery of natural gas to Shipper at the Shipper's Primary Point of Delivery as nearly as practicable to Transporter's line pressure, provided that such line pressure shall not be less than 500 pounds per square inch gauge at Monroe, meter number 020843, and 600 pounds per square inch gauge at Calvary, meter number 020844. Transporter shall be obligated to provide such minimum pressures only to the extent that capacity is reserved by Shipper and scheduled by Transporter at the Primary Delivery Point(s) described above. Such minimum pressure obligation is subject to the GT&C including, but not limited to, Article X - Excuse of Performances. In the event Transporter is unable to maintain the minimum pressure(s) described herein but Shipper is still able to take receipt of the scheduled quantity at the Primary Delivery Point(s) described above, then Shipper shall be considered unharmed by Transporter's inability to maintain such minimum pressure(s). Subject to the foregoing, any failure on Transporter's part to deliver the scheduled quantity at the Primary Delivery Point(s) 1 + + + + + + described above shall entitle Shipper to the limited remedy specified in Rate Schedule FT-A, Section 7 - Failure of Transporter. ARTICLE V - QUALITY SPECIFICATIONS AND STANDARDS FOR MEASUREMENT For all gas received, transported and delivered hereunder the Parties agree to the Quality Specifications and Standards for Measurement as specified in the General Terms and Conditions of Transporter's FERC Gas Tariff Volume No. 1. To the extent that no new measurement facilities are installed to provide service hereunder, measurement operations will continue in the manner in which they have previously been handled. In the event that such facilities are not operated by Transporter or a downstream pipeline, then responsibility for operations shall be deemed to be Shipper's. ARTICLE VI - RATES AND CHARGES FOR GAS TRANSPORTATION 6.1 TRANSPORTATION RATES - Commencing upon the effective date hereof, the rates, charges, and surcharges to be paid by Shipper to Transporter for the transportation service provided herein shall be in accordance with transporter's Rate Schedule FT-A and the General Terms and Conditions of Transporter's FERC Gas Tariff. Except as provided to the contrary in any written or electronic agreement(s) between Transporter and Shipper in effect during the term of this Agreement Shipper shall pay Transporter the applicable maximum rate(s) and all other applicable charges and surcharges specified in the Summary of Rates in Transporter's FERC Gas Tariff and in this Rate Schedule. Transporter and Shipper may agree that a specific discounted rate will apply only to certain volumes under the agreement. Transporter and Shipper may agree that a specified discounted rate will apply only to specified volumes (MDQ, TQ, commodity volumes, Extended Receipt and Delivery Service Volumes or Authorized Overrun volumes) under the Agreement; that a specified discounted rate will apply only if specified volumes are achieved (with the maximum rates applicable to volumes above the specified volumes or to all volumes if the specified volumes are never achieved); that a specified discounted rate will apply only during specified periods of the year or over a specifically defined period of time; and/or that a specified discounted rate will apply only to specified points, zones, markets or other defined geographical area. Transporter and Shipper may agree to a specified discounted rate pursuant to the provisions of this Section 6.1 provided that the discounted rate is between the applicable maximum and minimum rates of this service. 6.2 INCIDENTAL CHARGES - Shipper agreed to reimburse Transporter for any filing or similar fees, which have not been previously paid for by Shipper, which Transporter incurs in rendering service hereunder. 6.3 CHANGES IN RATES AND CHARGES - Shipper agrees that Transporter shall have the unilateral right to file with the appropriate regulatory authority and make effective changes in (a) the rates and charges applicable to service pursuant to Transporter's Rate Schedule FT-A, (b) the rate schedule(s) pursuant to which service hereunder is rendered, or (c) any provision of the General Terms and Conditions applicable to those rate schedules. Transporter agrees that Shipper may protest or contest the aforementioned filings, or may seek authorization from duly constituted regulatory authorities for such adjustment of Transporter's existing FERC Gas Tariff as may be found necessary to assure Transporter just and reasonable rates. 2 + + + + + + ARTICLE VII - BILLINGS AND PAYMENTS Transporter shall bill and shipper shall pay all rates and charges in accordance with Articles V and VI, respectively, of the General Terms and Conditions of the FERC Gas Tariff. ARTICLE VIII - GENERAL TERMS AND CONDITIONS This Agreement shall be subject to the effective provisions of Transporter's Rate Schedule FT-A and to the General Terms and Conditions incorporated therein, as the same may be changed or superseded from time to time in accordance with the rules and regulations of the FERC. ARTICLE IX - REGULATION 9.1 This Agreement shall be subject to all applicable and lawful governmental statutes, orders, rules and regulations and is contingent upon the receipt and continuation of all necessary regulatory approvals or authorizations upon terms acceptable to Transporter. This Agreement shall be void and of no force and effect if any necessary regulatory approval is not so obtained or continued. All Parties hereto shall cooperate to obtain or continue all necessary approvals or authorizations, but no Party shall be liable to any other party for failure to obtain or continue such approvals or authorizations. 9.2 The transportation service described herein shall be provided subject to Subpart G, Part 284 of the FERC Regulations. ARTICLE X - RESPONSIBILITY DURING TRANSPORTATION Except as herein specified, the responsibility for gas during transportation shall be as stated in the General Terms and Conditions of Transporter's FERC Gas Tariff Volume No. 1. ARTICLE XI - WARRANTIES 11.1 In addition to the warranties set forth in Article IX of the General Terms and Conditions of Transporter's FERC Gas Tariff, Shipper warrants the following: (a) Shipper warrants that all upstream and downstream transportation arrangements are in place, or will be in place as of the requested effective date of service, and that it has advised the upstream and downstream transporters of the receipt and delivery points under this Agreement and any quantity limitations for each point as specified on Exhibit "A" attached hereto. Shipper agrees to indemnify and hold Transporter harmless for refusal to transport gas hereunder in the event any upstream or downstream transporter fails to receive or deliver gas as contemplated by this Agreement. (b) Shipper agrees to indemnify and hold Transporter harmless from all suits, actions, debts, accounts, damages, costs, losses and expenses (including reasonable attorneys fees) arising from or out of breach of any warranty by Shipper herein. 11.2 Transporter shall not be obligated to provide or continue service hereunder in the event of any breach of warranty. 3 + + + + + + ARTICLE XII - TERM 12.1 This contract shall be effective as of November 1, 2002, and shall remain in force and effect, unless modified as per Exhibit B, until October 31, 2012. If the FERC or other governmental body having jurisdiction over the service rendered pursuant to this Agreement authorizes abandonment of such service, this Agreement shall terminate on the abandonment date permitted by the FERC or such other governmental body. 12.2 Any portions of this Agreement necessary to resolve or cash out imbalances under this Agreement as required by the General Terms and Conditions of Transporter's Tariff shall survive the other parts of this Agreement until such time as such balancing has been accomplished; provided, however, that Transporter notifies Shipper of such imbalance not later than twelve months after the termination of this Agreement. 12.3 This Agreement will terminate automatically upon written notice from Transporter in the event Shipper fails to pay all of the amount of any bill for service rendered by Transporter hereunder in accord with the terms and conditions of Article VI of the General Terms and Conditions of Transporter's FERC Gas Tariff. ARTICLE XIII - NOTICE Except as otherwise provided in the General Terms and Conditions applicable to this Agreement, any notice under this Agreement shall be in writing and mailed to the post office address of the Party intended to receive the same, as follows: + +TRANSPORTER: Tennessee Gas Pipeline Company P. O. Box 2511 Houston, Texas 77252-2511 + +Attention: Director, Transportation Control + +SHIPPER: + + + +NOTICES: Louisville Gas and Electric Company P. O. Box 32020 Louisville, Kentucky 40232 + +Attention: J. Clay Murphy, Dir - Gas Management, Planning and Supply + +BILLING: Louisville Gas and Electric Company P. O. Box 32020 Louisville, Kentucky 40232 + +Attention: J. Clay Murphy, Dir - Gas Management, Planning and Supply or such other address as either Party shall designate by formal written notice to the other. 4 + + + + + + ARTICLE XIV - ASSIGNMENTS 14.1 Either Party may assign or pledge this Agreement and all rights and obligations hereunder under the provisions of any mortgage, deed of trust, indenture, or other instrument which it has executed or may execute hereafter as security for indebtedness. Either Party may, without relieving itself of its obligation under this Agreement, assignment any of its rights hereunder to a company with which it is affiliated. Otherwise, Shipper shall not assign this Agreement or any of its rights hereunder, except in accord with Article III, Section 11 of the General Terms and Conditions of Transporter's FERC Gas Tariff. 14.2 Any person which shall succeed by purchase, merger, or consolidation to the properties, substantially as an entirety, of either Party hereto shall be entitled to the rights and shall be subject to the obligations of its predecessor in interest under this Agreement. ARTICLE XV - MISCELLANEOUS 15.1 THE INTERPRETATION AND PERFORMANCE OF THIS CONTRACT SHALL BE IN ACCORDANCE WITH AND CONTROLLED BY THE LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO THE DOCTRINES GOVERNING CHOICE OF LAW. 15.2 If any provision of this Agreement is declared null and void, or voidable, by a court of competent jurisdiction, then that provision will be considered severable at either Party's option; and if the severability option is exercised, the remaining provisions of the Agreement shall remain in full force and effect. 15.3 Unless otherwise expressly provided in this Agreement or Transporter's FERC Gas Tariff, no modification of or supplement to the terms and provisions stated in this Agreement shall be or become effective until Shipper has submitted a request for change through PASSKEY and Shipper has been notified through PASSKEY of Transporter's agreement to such change. 15.4 Exhibit "A" attached hereto is incorporated herein by reference and made a part hereof for all purposes. IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be duly executed as of the date first hereinabove written. + +TENNESSEE GAS PIPELINE COMPANY + +By: + +/s/ + + + +Agent and Attorney-in-Fact + +SHIPPER: LOUISVILLE GAS AND ELECTRIC COMPANY + +By: + +/s/ Chris Hermann + + + +Title: Senior Vice President - Distribution Operations + +Date: July 29, 2002 5 + + + + + +EXHIBIT "A" TO GAS TRANSPORTATION AGREEMENT DATED NOVEMBER 1, 2002 BETWEEN TENNESSEE GAS PIPELINE COMPANY AND LOUISVILLE GAS AND ELECTRIC COMPANY EFFECTIVE DATE OF AMENDMENT: RATE SCHEDULE: FT-A SERVICE PACKAGE: SERVICE PACKAGE TQ: 51,000 Dth METER + +METER NAME + +INTERCONNECT PARTY NAME + +COUNTY + +ST + +ZONE + +R/D + +LEG + +TOTAL-TQ + +BILLABLE-TQ 020844 + +Calgary + +Louisville Gas and Electric Co. + +Marion + +Ky + +2 + +D + +100 + +51,000 + +51,000 011306 + +Agua Dulce + +Channel Industries + +Nueces + +Tx + +0 + +R + +100 + +40,000 + +40,000 010723 + +Kiln Miss Exchange + +Gulfstream + +Hancock + +Ms + +1 + +R + +500 + +7,000 + +7,000 012241 + +Ship Shoal 108 + +Chevron USA + +OL + +La + +1 + +R + +500 + +4,000 + +4,000 + + + + + + + + + + + + + + + + + + + + + + + + + + + +Total + +51,000 + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + +TQ + + + + + + + + NUMBER OF RECEIPT POINTS: + +3 NUMBER OF DELIVERY POINTS: + +1 Note: Exhibit "A" is a reflection of the contract and all amendments as of the amendment effective date. GAS TRANSPORTATION AGREEMENT (For Use under FT-A Rate Schedule) EXHIBIT "B" TO GAS TRANSPORTATION AGREEMENT DATED November 1, 2002 BETWEEN TENNESSEE GAS PIPELINE COMPANY AND LOUISVILLE GAS AND ELECTRIC COMPANY BUYOUT/EARLY TERMINATION PROVISIONS* SERVICE PACKAGE: BUYOUT PERIOD(S) November 1, 2007 through October 31, 2012 AMOUNT OF TQ REDUCED 51,000 Dth FOR PERIOD(S) AMOUNT OF $0.00 BUYOUT PAYMENT FOR PERIOD(S) ANY LIMITATIONS ON THE EXERCISE OF THE BUYOUT/TERMINATION OPTION AS BID BY THE SHIPPER: Shipper must notify Transporter on or before October 31, 2006 of its intent to terminate the attached service agreement. Such termination shall become effective as of November 1, 2007. Notwithstanding the foregoing, if at any time Tennessee terminates the July 8, 2002, Negotiated Rate Agreement between Tennessee and Shipper for any reason, Shipper shall have the unilateral right to notify Tennessee of its intent to terminate this Agreement effective sixty days after the referenced Negotiated Rate Agreement terminates. + +*NOTICE MUST BE GIVEN AS PROVIDED FOR IN THE NET PRESENT VALUE STANDARD OF THE GENERAL TERMS AND CONDITIONS. 6 + + + + + + + + + + GAS TRANSPORTATION AGREEMENT (For Use under FT-A Rate Schedule) EXHIBIT "B" TO GAS TRANSPORTATION AGREEMENT DATED November 1, 2002 BETWEEN TENNESSEE GAS PIPELINE COMPANY AND LOUISVILLE GAS AND ELECTRIC COMPANY BUYOUT/EARLY TERMINATION PROVISIONS* SERVICE PACKAGE: BUYOUT PERIOD(S) November 1, 2007 through October 31, 2012 AMOUNT OF TQ REDUCED 51,000 Dth FOR PERIOD(S) AMOUNT OF $0.00 BUYOUT PAYMENT FOR PERIOD(S) ANY LIMITATIONS ON THE EXERCISE OF THE BUYOUT/TERMINATION OPTION AS BID BY THE SHIPPER: Shipper must notify Transporter on or before October 31, 2006 of its intent to terminate the attached service agreement. Such termination shall become effective as of November 1, 2007. Notwithstanding the foregoing, if at any time Tennessee terminates the July 8, 2002, Negotiated Rate Agreement between Tennessee and Shipper for any reason, Shipper shall have the unilateral right to notify Tennessee of its intent to terminate this Agreement effective sixty days after the referenced Negotiated Rate Agreement terminates. *NOTICE MUST BE GIVEN AS PROVIDED FOR IN THE NET PRESENT VALUE STANDARD OF THE GENERAL TERMS AND CONDITIONS. 7 \ No newline at end of file diff --git a/full_contract_txt/KINGPHARMACEUTICALSINC_08_09_2006-EX-10.1-PROMOTION AGREEMENT.txt b/full_contract_txt/KINGPHARMACEUTICALSINC_08_09_2006-EX-10.1-PROMOTION AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..70efd771ef3a6bac557752ee5fa2f4e9a10f609b --- /dev/null +++ b/full_contract_txt/KINGPHARMACEUTICALSINC_08_09_2006-EX-10.1-PROMOTION AGREEMENT.txt @@ -0,0 +1,1521 @@ +Exhibit 10.1 + + + +PROMOTION AGREEMENT + +by and between + +DEPOMED, INC. + +and + +KING PHARMACEUTICALS, INC. + +Dated as of June 27, 2006 + + + +Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company's application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934. + + + + + + + +EXECUTION COPY + +PROMOTION AGREEMENT + +This PROMOTION AGREEMENT (this "Agreement") is made as of June 27, 2006 (the "Effective Date"), by and between Depomed, Inc., a California corporation ("Depomed"), and King Pharmaceuticals, Inc., a Tennessee corporation ("King"). Each of Depomed and King is referred to herein individually as a "party" and collectively as the "parties." + +WHEREAS, Depomed desires to engage King to promote and market the Product in the Territory (each as defined below), and King desires to promote and market the Product, all in accordance with the terms and conditions contained herein; + +NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants herein contained, the parties hereto intending to be legally bound hereby agree as follows: + +ARTICLE I + +DEFINITIONS + +As used in this Agreement, the following terms shall have the following meanings: + +Section 1.1 "1000mg Formulation" has the meaning set forth in Section 6.8(a). + +Section 1.2 "Act" means the United States Federal Food, Drug and Cosmetic Act, 21 U.S.C. 301, et. seq., as it may be amended from time to time, and the regulations promulgated thereunder, including the Generic Drug Act. + +Section 1.3 "AcuForm Patent License" has the meaning set forth in Section 10.1. + +Section 1.4 "Adverse Drug Experience" means any "adverse drug experience" as defined or contemplated by 21 C.F.R. 314.80 or 312.32, associated with the Product. + +Section 1.5 "Adverse Drug Experience Report" means any oral, written or electronic report of any Adverse Drug Experience transmitted to any Person. + +Section 1.6 "Advertising/Marketing/Educational Expenses" means the direct, out-of-pocket expenses of directly Promoting the Product and conducting Educational Programs with respect to the Product, each clearly identified as such, pursuant to the Launch Plan or an Annual Plan. Advertising/Marketing/Educational Expenses will include (a) King's out-of-pocket costs for Samples incurred as contemplated by Section 6.5, (b) all out-of-pocket costs for Promotional Materials and training materials, and (c) out-of-pocket costs for the purchase of the Prescriber Data. Advertising/Marketing/Educational Expenses will not include (i) any expenses of the King Sales Force or Depomed Sales Force, (ii) any costs incurred by Depomed with respect to the Depomed Sales Force, including as described in Section 4.9(g), or (iii) any costs for the personnel of King or Depomed. + +Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company's application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934. + + + + + + + +Section 1.7 "Affiliate" means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by or is under common control with, such first Person. For the purposes of this definition, "control" (including, with correlative meanings, the terms "controlling," "controlled by" and "under common control with"), as applied to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of that Person, whether through the ownership of voting securities, by contract or otherwise. + +Section 1.8 "Agreement" has the meaning set forth in the preamble to this Agreement. + +Section 1.9 "Agreement Month" means each calendar month during the Term (including any partial calendar month in the case of the first and last calendar months of the Term). + +Section 1.10 "Agreement Quarter" means the Initial Agreement Quarter, each successive period of three months during the Term after the Initial Agreement Quarter and the Final Agreement Quarter. + +Section 1.11 "Altace Physician List" means the list of physicians or other health care practitioners to whom King's sales representatives present in-person, face-to-face sales presentations of King's Altace® product, as such list may be amended from time to time by King. + +Section 1.12 "Annual Plan" has the meaning set forth in Section 4.5. + +Section 1.13 "Baseline Percentage" means the percentage determined by dividing (a) the total amount of unit sales for Product based on prescriptions written by Professionals on the Depomed Physician List during the two complete Agreement Quarters prior to the delivery by Depomed of its intention to commence Promotion of the Product in the Territory pursuant to Section 4.9, by (b) the total amount of unit sales of Product based on all prescriptions written during such two complete Agreement Quarters, based on Prescriber Data for such two complete Agreement Quarters; as it may be amended pursuant to Section 4.9. + +Section 1.14 "BLS" means Biovail Laboratories International SRL. + +Section 1.15 "BLS Agreements" means that certain Amended and Restated License Agreement, dated as of December 13, 2005, by and between Depomed and BLS, the BLS Supply Agreements, and any other agreements between Depomed and BLS with respect to the Product, including the 1000mg Formulation. + +Section 1.16 "BLS Supply Agreements" means that certain Manufacturing Transfer Agreement, dated as of December 13, 2005, by and between Depomed and BLS and that certain Supply Agreement, dated as of December 13, 2005, between Depomed and BLS. + +Section 1.17 "BLS Fees" means, for any period, the sum of (a) [***] for such period, and (b) [***] for such period[***] but [***] such amount is payable (and is paid in or subsequent to such period) [***] In the event the amounts payable under either such agreement are reduced or terminate, the BLS Fees will correspondingly be reduced or terminate. + +Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company's application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934. 2 + + + + + + + +Section 1.18 "cGMP" shall mean current "Good Manufacturing Practices" as such term is defined from time to time by the FDA or other relevant Governmental Authority having jurisdiction over the manufacture or sale of the Product pursuant to its regulations, guidelines or otherwise. + +Section 1.19 "Co-Chairs" has the meaning set forth in Section 3.2. + +Section 1.20 "COGS" means, for any period, Depomed's expenses for cost of goods sold (calculated in accordance with Section 7.2(d)) for Product in the Territory for such period, including any expenses incurred directly in connection with the distribution of the Product in the Territory, multiplied by the Promotion Percentage for such period. + +Section 1.21 "Combination Product" has the meaning set forth in Section 13.2. + +Section 1.22 "Combination Product License" has the meaning set forth in Section 13.1(a). + +Section 1.23 "Confidentiality Agreement" means that certain Confidentiality Agreement, dated as of February 21, 2006, between Depomed and King. + +Section 1.24 "Control" or "Controlled" means, with respect to patents, know-how or other intellectual property rights of any kind, the possession by a party of the ability to grant a license or sublicense of such rights without the payment of additional consideration and without violating the terms of any agreement or arrangement between such party and any Third Party. + +Section 1.25 "DDMAC" means the FDA's Division of Drug Marketing, Advertising and Communications. + +Section 1.26 "Depomed" has the meaning set forth in the preamble to this Agreement. + +Section 1.27 "Depomed Net Sales" means, for a particular period, Net Sales for such Period, multiplied by the Depomed Percentage for such period. + +Section 1.28 "Depomed Percentage" means, for a particular period, the difference of (a) the percentage determined by dividing (i) the total amount of unit sales for Product based on prescriptions written during such period by Professionals on the Depomed Physician List, by (ii) the total amount of unit sales of Product based on all prescriptions written during such period, in each case based on Prescriber Data for the applicable period; minus (b) the Baseline Percentage; provided that the Depomed Percentage shall not be less than zero. + +Section 1.29 "Depomed Physician List" means the list of Professionals to whom the Depomed Sales Force may present Details, as such list may be amended from time to time as contemplated by this Agreement; provided that the list must conform to the requirements of Section 4.9. + +Section 1.30 "Depomed Promotional Materials" has the meaning set forth in Section 4.9(f). + +Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company's application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934. + +3 + + + + + + + +Section 1.31 "Depomed Sales Force" means the field force of Sales Representatives employed or contracted by Depomed. + +Section 1.32 "Depomed Supply Failure" means (a) with respect to the 500mg formulation of the Product, Depomed's failure to fill orders from its wholesalers and distributors for the 500mg formulation of the Product equal to or in excess of (i) [***] percent of the aggregate amount of 500mg formulation of the Product ordered during any period of three consecutive Agreement Months that does not exceed the then-current Volume Forecast for such period, or (ii) [***] percent of the amount of 500mg formulation of the Product ordered for three consecutive Agreement Months that does not exceed the then-current Volume Forecast for such period; and (b) with respect to the 1000mg Formulation, Depomed's failure to fill orders from its wholesalers and distributors for the 1000mg Formulation equal to or in excess of (i) [***] percent of the aggregate amount of 1000mg Formulation ordered during any period of six consecutive Agreement Months that does not exceed the then-current Volume Forecast for such period, or (ii) [***] percent of the amount of 1000mg Formulation ordered for twelve consecutive Agreement Months that does not exceed the then- current Volume Forecast for such period; provided, in each case, that (x) any back-up manufacturing rights in favor of Depomed pursuant to any exclusive supply arrangement relating to the applicable formulation of the Product are applicable as a result of such supply failure, and (y) Depomed is not diligently exercising such back-up manufacturing rights. + +Section 1.33 "Depomed Trademarks" means (a) the GlumetzaTM trademark, for which Depomed's licensor has sought registration for in the United States Patent and Trademark Office, (b) the AcuFormTM trademark, for which Depomed has sought registration for in the United States Patent and Trademark Office, and (c) Depomed®, and, in each case, all related domain names and other trademark related rights. The Depomed Trademarks are attached hereto as Schedule 1.33. + +Section 1.34 "Detail" means an in-person, face-to-face sales presentation of the Product made by a Sales Representative to a Professional, including a P1 Detail, P2 Detail, or P3 Detail. + +Section 1.35 "Educational Programs" means any activities undertaken with respect to the medical education of Professionals and customers regarding the Product and the market or funded by unrestricted educational grants, including educational programs and seminars and continuing medical education materials. + +Section 1.36 "Effective Date" has the meaning set forth in the preamble to this Agreement. + +Section 1.37 "Evaluation Period" has the meaning set forth in Section 13.2. + +Section 1.38 "Executive Officers" means the Chief Operating Officer of Depomed (or, if there is no such officer, its President or Chief Executive Officer) and the Chief Commercial Officer of King (or, if there is no such officer, its President or Chief Executive Officer). + +Section 1.39 "FDA" means the United States Food and Drug Administration or any successor agency performing comparable functions in the Territory. + +Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company's application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934. + +4 + + + + + + + +Section 1.40 "Final Agreement Quarter" means the period commencing on the first day following the last full Agreement Quarter during the Term and ending on the last day of the Term. + +Section 1.41 "Force Majeure Event" has the meaning set forth in Section 16.6. + +Section 1.42 "GAAP" has the meaning set forth in Section 7.2(c). + +Section 1.43 "Generic Drug Act" has the meaning set forth in Section 9.1(j). + +Section 1.44 "Governmental Authority" shall mean any court, agency, authority, department, regulatory body or other instrumentality of any government or country or of any national, federal, state, provincial, regional, county, city or other political subdivision of any such government or any supranational organization of which any such country is a member, which has competent and binding authority to decide, mandate, regulate, enforce, or otherwise control the activities of the parties contemplated by this Agreement. + +Section 1.45 "Gross Margin" means, for a particular period, (A) Promotion Net Sales for such period minus (B) all BLS Fees and COGS for such period. + +Section 1.46 "Initial Agreement Quarter" means the period commencing on the Effective Date and ending on September 30, 2006. + +Section 1.47 "JAMS" has the meaning set forth in Section 3.5(b). + +Section 1.48 "JCC" has the meaning set forth in Section 3.1. + +Section 1.49 "King" has the meaning set forth in the Preamble to this Agreement. + +Section 1.50 "King CCC" means King's Copy Clearance Committee. + +Section 1.51 "King Manufacturing Notice" has the meaning set forth in Section 6.6. + +Section 1.52 "King Physician List" means the list of Professionals to whom the King Sales Force presents Details agreed to in writing prior to the Effective Date, as such list may be amended from time to time as part of the Annual Plan or in accordance with Section 4.1(d). + +Section 1.53 "King Sales Force" means the field force of Sales Representatives employed or contracted by King. + +Section 1.54 "King Trademarks" means the trademarks set forth on Schedule 1.54, including the "King Pharmaceuticals" trademark and associated design + +Section 1.55 "Launch Period" means the period beginning on the Effective Date and ending on December 31, 2006. + +Section 1.56 "Launch Plan" means the plan and schedule for the commercial launch of the Product in the Territory during the Launch Period, including the parties' responsibilities for the activities associated with such commercial launch of the Product, a budget for the activities + +Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company's application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934. + +5 + + + + + + + +to be undertaken in connection with such commercial launch (taking into account Advertising/Marketing/Educational Expenses incurred by Depomed prior to the Effective Date), and the parties' responsibilities for the payment of such budgeted expenses. The initial Launch Plan describing a summary of the plan and schedule for commercial launch is attached hereto as Schedule 1.56, which plan will be amended by the JCC in accordance with Section 4.5. + +Section 1.57 "Launch Promotional Materials" has the meaning set forth in Section 4.4(c). + +Section 1.58 "Legal Requirements" means laws, rules and regulations of any Governmental Authority. + +Section 1.59 "Metformin Product Rights" has the meaning set forth in Section 13.2. + +Section 1.60 "Minimum Sales Force Level" has the meaning set forth in Section 4.3(a). + +Section 1.61 "NDA" means any "new drug application" (as such term is used under the Act) filed or acquired by Depomed or any Affiliate with the FDA with respect to the Product and all subsequent submissions, supplements and amendments thereto, including NDA No. 21-748 filed with the FDA on April 27, 2004 (as such NDA may be amended or supplemented subsequent to the Effective Date). + +Section 1.62 "Negotiation Period" has the meaning set forth in Section 13.2. + +Section 1.63 "Net Sales" means, for any period, the actual gross amount invoiced on sales of Product in the Territory by Depomed, its Affiliates, licensees, sublicensees and assigns to independent, unrelated Third Parties during such period in bona fide arms' length transactions, less the following deductions, so long as they conform with the requirements of Section 6.4, allowed and taken by Third Parties and not otherwise recovered by or reimbursed to Depomed, its Affiliates, licensees, sublicensees or assigns: (a) freight, insurance (but only insurance with respect to shipping the Product), and other transportation charges to the extent added to the sales price and set forth separately as such on the total amount invoiced; (b) any sales, use, value-added, excise taxes or duties or allowances on the selling price of Product which fall due and are paid as a consequence of such sale; (c) chargebacks, trade, quantity and cash discounts and rebates to the extent customary in the trade, including governmental rebates, in each case, accrued in accordance with GAAP; and (d) allowances or credits, including allowances or credits to customers on account of rejection, defects or returns of the Product or because of a retroactive price reduction, actually taken by customers that are customary in the trade. Net Sales shall not include (a) a sale or transfer to an Affiliate, licensee, sublicensee or assign of King or Depomed or if done for clinical, regulatory or governmental purposes where no consideration is received; but the resale by such Affiliate, licensee, sublicensee or assign of King or Depomed shall be considered a sale of such Product; or (b) a sale to a wholesaler or distributor during the Launch Period in connection with the initial stocking of the Product with respect to which (x) the invoice relating to such sale has not been paid as of the date on which a report setting forth Net Sales for such period is due pursuant to this Agreement, and (y) the wholesaler or distributor has the right to return the Product as of the date on which a report setting forth Net Sales for such period is due pursuant to this Agreement. + +Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company's application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934. + +6 + + + + + + + +Section 1.64 "Order" means any award, decision, injunction, judgment, decree, order, ruling, or verdict entered, issued, made, or rendered by any Governmental Authority or by any arbitrator. + +Section 1.65 "P1 Detail" means a Detail where the Product is the first item presented and comprises more than one-half of the presentation time. + +Section 1.66 "P2 Detail" means a Detail where the Product is the second item presented and comprises at least one-third of the presentation time. + +Section 1.67 "P3 Detail" means a Detail where the Product is not the first item presented and comprises at least 15% of the presentation time. + +Section 1.68 "PDE" means a Primary Detail Equivalent, and is equivalent to any of the following: (a) one P1 Detail; (b) two P2 Details; or (c) five P3 Details. Details other than P1 Details, P2 Details and P3 Details will have no effect on any calculation of PDEs. + +Section 1.69 "PDE Cost" means $[***] per PDE. + +Section 1.70 "PDE Minimum" has the meaning set forth in Section 8.2(a)(i). + +Section 1.71 "PDE Shortfall" has the meaning set forth in Section 8.2(a)(i). + +Section 1.72 "PDMA" means the Prescription Drug Marketing Act, as amended, and the rules and regulations promulgated thereunder. + +Section 1.73 "Person" means any individual, corporation (including any non-profit corporation), general or limited partnership, limited liability company, joint venture, estate, trust, association, organization, labor union, or other entity or Governmental Authority. + +Section 1.74 "Prescriber Data" means data provided by a Third Party which measures prescriptions filled for Product (by individual prescriber) in the Territory during a specified time period, from a source mutually agreed in writing by the parties (it being understood that IMS Health Incorporated is a source agreeable to the parties). + +Section 1.75 "Product" means any once-daily oral tablet formulation containing metformin as the sole active pharmaceutical ingredient, including the 1000mg Formulation. + +Section 1.76 "Product Complaints" means any report concerning the quality, purity, quantity, weight, pharmacologic activity, labeling, identity or appearance of the Product. + +Section 1.77 "Professional" means a physician or other health care practitioner who is permitted by law to prescribe Product. + +Section 1.78 "Promote," "Promotional" and "Promotion" mean, with respect to the Product, any activities undertaken to encourage sales or use of the Product, including Details, product sampling, detail aids, drop-offs, coupons, discount cards, journal advertising, direct mail + +Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company's application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934. + +7 + + + + + + + +programs, direct-to-consumer advertising, convention exhibits and all other forms of marketing, advertising, public relations or promotion. + +Section 1.79 "Promotion Commencement Date" has the meaning set forth in Section 4.1(c). + +Section 1.80 "Promotion Fees" has the meaning set forth in Section 7.1(a). + +Section 1.81 "Promotion Net Sales" means Net Sales multiplied by the Promotion Percentage. + +Section 1.82 "Promotion Percentage" means, for a particular period, 100% minus the Depomed Percentage for such period, if any Depomed Net Sales occur in such period. + +Section 1.83 "Promotional Effort" has the meaning set forth in Section 4.1(a). + +Section 1.84 "Promotional Materials" has the meaning set forth in Section 4.4(a). + +Section 1.85 "Proprietary Information" means any proprietary or confidential information communicated from one party to the other in connection or relating to this Agreement, which is identified as confidential or proprietary, or which the other party knows or has reason to know is confidential or proprietary, including the Technology and financial, marketing, business, technical and scientific information or data, information related to King's compensation of its Sales Representatives, information contained within the Annual Plan and Launch Plan, and the information described in Section 4.6, whether communicated in writing, orally or electronically. Proprietary Information shall not include information that the receiving party can show through written documentation: + +(a) at the time of disclosure, is publicly known; + +(b) after the time of disclosure, becomes part of the public domain, except by breach of an agreement between the disclosing party or any Affiliate thereof and the receiving party or any Affiliate thereof; + +(c) is or was in the possession of the receiving party or any Affiliate thereof at the time of disclosure by the disclosing party and was not acquired directly or indirectly from the disclosing party or any Affiliate thereof or from any other party under an agreement of confidentiality to the disclosing party or any Affiliate thereof; and + +(d) is or was developed by the receiving party or its Affiliates without use of or reference to the other party's Proprietary Information. + +Section 1.86 "Reconciliation Report" has the meaning set forth in Section 7.5(d). + +Section 1.87 "Regulatory Approval" means any and all consents or other authorizations or approvals required from a Governmental Authority to market and sell the Product in the Territory, but excluding any form of reimbursement approval. + +Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company's application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934. + +8 + + + + + + + +Section 1.88 "Safety Stock" has the meaning defined in Section 6.1 + +Section 1.89 "Sales Representatives" means sales representatives employed by King or Depomed, or a Third Party engaged by King or Depomed, to Promote the Product, who have been trained and equipped to Promote the Product in accordance with this Agreement. In the case of King, Third Parties may only be engaged as Sales Representatives if they are full-time contractors of King, exclusive to King, and carry King's business card. + +Section 1.90 "Samples" has the meaning set forth in Section 6.5. + +Section 1.91 "Serious Adverse Drug Experience" means any Adverse Drug Experience, including those subject to expedited reporting as defined in the regulations cited below, that is fatal or life-threatening, requires hospitalization or prolongation of existing hospitalization, results in persistent or significant disability or incapacity, is a congenital anomaly/birth defect, or is of comparable medical significance or any other event which would constitute a "serious" Adverse Drug Experience pursuant to the terms of 21 C.F.R. 314.80 or 312.32. + +Section 1.92 "Serious Adverse Drug Experience Report" means any Adverse Drug Experience Report that involves a Serious Adverse Drug Experience. + +Section 1.93 "Standard Cost" means, (a) with respect to COGS, the cost assigned from time to time, but at least annually, by Depomed to use in calculating Gross Margin under Section 7.1(a) for the purpose of facilitating timely reporting of Gross Margin; and, (b) with respect to Samples, the cost assigned from time to time, but at least annually, by Depomed to use in calculating Advertising/Marketing/Educational Expenses pursuant to Section 4.5(e); each determined in accordance with Section 7.2(e). + +Section 1.94 "Subcontracting" means subcontracting or sublicensing a party's rights or obligations hereunder (a) pursuant to which a Third Party will manufacture the Product; or (b) pursuant to which a Third Party Sales Representative is engaged to Promote the Product. "Subcontractor" means the Third Party with whom the Subcontracting agreement is entered into. + +Section 1.95 "Technology" means all pharmacological, toxicological, preclinical, clinical, technical or other information, data and analysis and know-how relating to the registration, manufacture, packaging, use, marketing and sale of the Product and all proprietary rights relating thereto owned by Depomed or its Affiliates or to which Depomed or its Affiliates has rights so as to be able to license, and relating or pertaining to the Product. + +Section 1.96 "Term" has the meaning set forth in Section 8.1. + +Section 1.97 "Territory" means the United States, including its possessions and Puerto Rico. + +Section 1.98 "Third Party" means any Person other than King or Depomed or their respective Affiliates. + +Section 1.99 "Unit" means a single tablet of the Product. + +Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company's application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934. + +9 + + + + + + + +Section 1.100 "United States Bankruptcy Code" shall mean the U.S. Bankruptcy Code, 11 U.S.C. §§ 101, et seq. + +Section 1.101 "Volume Forecast" has the meaning set forth in Section 6.3. + +ARTICLE II + +GRANT + +Section 2.1 Grant of Promotion Rights. During the Term, subject to the terms and conditions of this Agreement, Depomed hereby grants to King and its Affiliates and King and its Affiliates hereby accept a co-exclusive right to Promote the Product under the Depomed Trademarks in the Territory together with Depomed and its Affiliates only, on the terms and subject to the conditions set forth herein. Depomed agrees that its and its Affiliates' right to Promote the Product is limited to the rights set forth in Section 4.9. + +Section 2.2 Sublicense. Except pursuant to Section 16.9 or in connection with the use of Third Party Sales Representatives, King shall not assign, subcontract or otherwise transfer or delegate any of its rights or obligations under this Agreement without the express written consent of Depomed, which consent may be withheld by Depomed in its sole discretion. + +Section 2.3 Limitation on Metformin Promotion. Except as expressly contemplated by this Agreement (including Article XIII hereof) and subject to Section 13.1 hereof, King shall not promote, market or distribute any product containing metformin hydrochloride as the sole active ingredient in the Territory during the Term of this Agreement, other than the Product. + +Section 2.4 Retention of Rights. Depomed retains and shall retain all proprietary and property interests in the Product until the point of sale or, in the case of Samples, until delivered to King as contemplated by Section 6.5. King will not have nor represent that it has any control or proprietary or property interests in the Product, except for the licenses and rights specifically granted hereunder. Except as expressly set forth herein, nothing contained herein shall be deemed to grant King, by implication, a license or other right or interest in any patent, trademark or other similar property of Depomed or its Affiliates, except as may be necessary for King to Promote the Product pursuant to this Agreement or to manufacture the Product in accordance with Section 6.6. Except as expressly set forth herein, nothing contained herein shall be deemed to grant Depomed, by implication, a license or other right or interest in any patent, trademark or other similar property of King or its Affiliates, except as may be necessary for Depomed to Promote the Product pursuant to this Agreement. + +ARTICLE III + +JOINT COMMERCIALIZATION COMMITTEE + +Section 3.1 Establishment. The parties agree to establish, for the purposes specified herein, a Joint Commercialization Committee (the "JCC"). The parties acknowledge and agree that the JCC does not have the power to amend, modify or waive any of the terms or conditions of this Agreement. + +Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company's application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934. + +10 + + + + + + + +Section 3.2 Joint Commercialization Committee. The JCC shall be established by the parties and shall be comprised of eight members, four of whom shall be appointed by Depomed and four of whom shall be appointed by King. Each party's respective initial appointments to the JCC are set forth on Schedule 3.2 hereto. A party may change any of its representatives at any time if a new person is appointed to any of the foregoing positions by giving written notice to the other party. The total number of JCC members may be changed by unanimous vote of the JCC from time to time as appropriate; provided, that the JCC shall in all cases be comprised of an equal number of members from each of Depomed and King. King and Depomed each will designate one representative of such party to serve as co-chairs of the JCC (the "Co- Chairs"). The members appointed to the JCC by each party shall be employees of such party and shall be vested with appropriate decision-making authority and power by such party. The Chief Executive Officers of King and Depomed, the Chief Operating Officer of Depomed, and the Chief Commercial Officer of King shall not be members of the JCC. + +Section 3.3 JCC Responsibilities. Except as otherwise set forth herein, the JCC shall direct all Promotional and marketing activities for the Product hereunder. The responsibilities of the JCC shall be exercised consistent with this Agreement and shall include, but shall not be limited to: + +(a) reviewing and approving modifications to the Launch Plan (provided that no such modification may increase or reduce the Advertising/Marketing/Educational Expenses allocated to the parties under the Launch Plan, or modify any call plan or sampling plan set forth in the Launch Plan, without both parties' written approval). + +(b) reviewing and approving the Annual Plan as contemplated by Section 4.5, including developing the Advertising/Marketing/Educational Expenses associated with the Promotion activities under the Annual Plan; + +(c) monitoring and reviewing compliance with the Annual Plan and the Launch Plan; + +(d) reviewing and approving any modifications to the Annual Plan to address market or Product-related issues and opportunities (provided that, without the written approval of both parties, such modifications do not (i) result in a decrease of more than 10% of the annual budget set forth in the Annual Plan, or (ii) result in an increase of more than 5% of the Advertising/Marketing/Educational Expenses allocated to either party under the Annual Plan); + +(e) developing Product Promotion strategies and objectives, including Product positioning, messaging and branding, and reviewing and approving all material communications to Third Parties related to commercial matters for the purpose of Promoting the Product; + +(f) monitoring the Depomed Sales Force call plan for coordination with the King Sales Force; + +(g) monitoring advertising placement and market responses, including any post-implementation reviews; + +(h) reviewing and approving any Volume Forecasts and Sample forecasts; + +Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company's application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934. + +11 + + + + + + + +(i) establishing pricing for the Product, including the timing of any pricing changes; + +(j) reviewing, but not approving, sales incentive compensation for the King Sales Force related to the Product; + +(k) establishing contracting guidelines for the distribution of the Product; + +(l) overseeing the coordination of the parties' efforts in respect of managed care marketing strategies; + +(m) proposing any new packaging design for the Product (subject to Depomed's approval, and followed by and subject to applicable FDA and other Legal Requirements); + +(n) reviewing and approving reductions to the King Physician List (provided that, without the approval of both parties, (i) the King Physician List may not be reduced prior to the second anniversary of the Promotion Commencement Date, and (ii) the number of Professionals on the King Physician List may not be decreased such that the number of Professionals on the King Physician List is less than [***]% of the number of Professionals on the King Physician List as of the Effective Date); and + +(o) such other functions as may be mutually agreed upon by the parties from time to time. + +For the avoidance of doubt, (i) the JCC shall not have any review or approval rights with respect to any matters relating to the development of the Product and (ii) any decisions of the JCC with respect to matters which relate to Regulatory Approval for the Product shall require Depomed's prior written consent. + +Section 3.4 Meetings of the JCC. Meetings of the JCC may be called by the Co-Chairs of the JCC from time to time and, upon no less than five days' notice, shall otherwise be called when requested by a party; provided, however, that meetings of the JCC shall be held on at least a monthly basis during the first six months of the Term, and on at least a quarterly basis thereafter. If possible, the meetings shall be held in person or where appropriate, by video or telephone conference. Unless otherwise agreed, the location of any in-person meetings of the JCC shall alternate between the corporate offices of the parties. The parties shall determine the form of the meetings. Subject to Section 3.5, decisions shall be made unanimously, each party having one (1) vote regardless of the number of representatives present or voting; provided, that no such vote shall be valid unless each party is represented by at least two members either by written proxy or actual presence at the meeting at which the vote is taken. Subject to appropriate confidentiality undertakings where applicable, each party shall have the right, upon written notice to the other party, to have present at JCC meetings additional, non-voting participants (not to exceed ten such participants at any JCC meeting without the consent of the other party). Such additional participants shall not be deemed to be, or have any rights or responsibilities of, a member of the JCC. The parties shall cause their respective representatives on the JCC to use their reasonable efforts to resolve all matters presented to them as expeditiously as possible. The party hosting any meeting shall propose the agenda for the meeting and appoint a secretary to the meeting who shall record the minutes of the meeting. Such minutes shall be circulated to the parties promptly following the meeting for review and comment and for unanimous ratification + +Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company's application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934. + +12 + + + + + + + +by both parties. Each party shall bear its own travel and related costs incurred in connection with participation in the JCC. + +Section 3.5 JCC Disputes. + +(a) In the event that the JCC is, after a period of ten days, unable to make a decision due to a lack of required unanimity, either party may submit the matter being considered to the Executive Officers for a joint decision. In such event, either Co-Chair of the JCC, by written notice to the other party, shall formally request the dispute be resolved by the Executive Officers, specifying the nature of the dispute with sufficient detail to permit adequate consideration by the Executive Officers. The Executive Officers shall diligently and in good faith attempt to resolve the referred dispute expeditiously and, in any event, within fifteen days of receiving such written notification. + +(b) In the event that the Executive Officers are unable to reach a resolution of any referred dispute after good faith negotiations during the fifteen-day period referred to in Section 3.5(a) above and in the event such dispute is not related to compliance with this Agreement, regulatory matters, or the validity, breach or interpretation of this Agreement, either party may commence mediation within fifteen days after the conclusion of such fifteen-day period by providing to the other party a written request for non-binding mediation, setting forth the subject of the dispute and the relief requested (a "Mediation Notice"). The parties will cooperate with Judicial Arbitration and Mediation Services ("JAMS") and with one another in selecting a mediator from JAMS' panel of neutrals, and in scheduling the mediation proceedings. The parties shall endeavor to conclude any mediation under this Section 3.5 within thirty days after delivery by either party of Mediation Notice. The parties covenant that they will participate in the mediation in good faith and that they will share equally in its costs; provided that each party will be responsible for its own attorney's fees. Either party may seek equitable relief prior to the mediation to preserve the status quo pending the completion of that process. Except for such an action to obtain equitable relief, neither party may commence a civil action with respect to the matters submitted to mediation until after the completion of the initial mediation session, or thirty days after delivery of the Mediation Notice, whichever occurs first. + +(c) Any disputes referred to the Executive Officers for resolution pursuant to this Section 3.5 shall not be subject to any dispute resolution mechanism or procedure other than pursuant to this Section 3.5. + +ARTICLE IV + +PRODUCT PROMOTION + +Section 4.1 Product Promotion. + +(a) Subject to applicable Legal Requirements, as well as the provisions of this Agreement, King shall, from and after the Promotion Commencement Date, at its sole expense, use commercially reasonable efforts to Promote the Product within the Territory in accordance with the Launch Plan or Annual Plan (the "Promotional Effort"). For purposes of the preceding sentence, King's commercially reasonable efforts shall mean, until [***], at least the same + +Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company's application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934. + +13 + + + + + + + +degree of effort (including with respect to the reach and frequency of Details) that King would use for the Promotion of any of King's products that are promoted in the [***], are of a similar market size and patent life, and represent a similar commercial opportunity; thereafter, King will apply the same standard, except that it may fulfill its obligations by Promoting the Product in the [***]. All statements, core selling messages and materials to be utilized by King to Promote the Product shall be consistent in all material respects with the Annual Plan and the Launch Plan. King will cause the King Sales Force and King employees and agents acting on King's behalf to comply with this Agreement and all applicable Legal Requirements in connection with the Promotion of the Product. It is understood, and King agrees, that it will be accountable for the acts or omissions of the King Sales Force and its employees and agents to the extent such acts or omissions fail to comply with King's obligations under this Agreement. + +(b) From and after the Promotion Commencement Date, King shall perform at least [***] PDEs per calendar year, with such amount prorated over the initial and final calendar years of the Term if either such year is a partial year. In fulfilling its obligations under this Section 4.1(b), King will perform [***], as follows: King will perform no less than an average of [***], with such reach and frequency as the JCC determines as part of the Annual Plan each year. The determination of the [***] will be based on [***] used by King with respect to [***]; provided that the [***] by King will be [***] will be deemed the [***] Notwithstanding the foregoing, the parties acknowledge and agree that during the first month following the Commencement Date, King will be building its Promotional Efforts. + +(c) King shall commence (the date of such commencement, the "Promotion Commencement Date") Promotion (including Details by the King Sales Force) of the Product in accordance with this Agreement and the performance of the other obligations contained herein that are required to be performed from and after the Promotion Commencement Date as soon as practicable following the date hereof, but no later than September 5, 2006, or as soon thereafter as the Product (including Samples) is available in commercial quantities reasonably adequate to support the commercial launch of the Product in the Territory. The parties agree to cooperate with each other in good faith in furtherance of the preceding sentence. + +(d) Any Professional on the King Physician List who does not receive [***] Detail prior to the end of the Launch Period will be removed from the King Physician List at the end of the Launch Period. From time to time, King may Promote the Product to Professionals who are not on the King Physician List or the Depomed Physician List. At such time as King conducts [***] Details to any such Professional during a six-month period, such Professional will automatically be added to the King Physician List. + +Section 4.2 Representations to Customers. King will not make any false or misleading representations to Professionals, customers or others regarding Depomed or the Product and will not make any representations, warranties or guarantees with respect to the specifications, features or capabilities of the Product that are not consistent with the applicable then-current FDA approved labeling, package insert or other documentation accompanying or describing the Product, including Depomed's standard limited warranty and disclaimers. King agrees to undertake timely and complete corrective action for any deviations from this Section 4.2, subject to discussion and review by Depomed's regulatory affairs and quality assurance department. + +Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company's application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934. + +14 + + + + + + + +Section 4.3 Staffing; Training. + +(a) King agrees that from and after the Promotion Commencement Date, the King Sales Force will be staffed with at least [***] full-time Sales Representatives (subject to vacancies consistent with average vacancy rate experienced by King across its total sales force) who are actively promoting the Product in accordance with the Launch Plan or Annual Plan (the "Minimum Sales Force Level"); provided that King may meet such requirement to actively promote the Product by promoting the Product through P2 Details and P3 Details. Throughout the remainder of the Term, King shall use its commercially reasonable efforts to ensure that the number of Sales Representatives comprising the King Sales Force meets or exceeds the Minimum Sales Force Level, including by promptly filling all vacant positions in the King Sales Force resulting from resignations or terminations. + +(b) King shall be solely responsible for all costs and expenses of compensating its Sales Representatives. Consistent with applicable Legal Requirements, King shall pay incentive compensation to its Sales Representatives with respect to the Product in accordance with King's incentive compensation plan for King's own products; it being understood that, (i) through [***], King shall determine the target incentive payment for the Product in a manner consistent with the way in which King determines the target incentive payment for pharmaceutical drug products that are promoted in the [***], are of a similar market size and patent life, and represent a similar commercial opportunity; and (ii) thereafter, King shall determine the target incentive payment for the Product in a manner consistent with the way in which King determines the target incentive payment for pharmaceutical drug products promoted by King that are of a similar market size and patent life, and represent a similar commercial opportunity. King shall notify its Sales Representatives prior to the Promotion Commencement Date, or coinciding with the launch of the Product and consistent with its procedures for King's other products, of the total potential incentive compensation for the Product. Promptly after the adoption by King of an incentive compensation payment plan with respect to the Product pursuant to this Agreement and any material amendments thereto, King shall provide to Depomed [***] for the Product pursuant to such plan. + +(c) Depomed shall make available to King any training materials created by Depomed prior to the Effective Date at Depomed's out-of-pocket cost for such materials. In consultation with Depomed, King shall develop, [***], training materials for its Sales Representatives in other media or forms provided that such materials shall be subject to Depomed's review as Promotional Materials as provided in Section 4.4. King shall, at its own expense prior to the Promotion Commencement Date, train its Sales Representatives using such training materials, the other Promotional Materials and such programs as King shall deem appropriate that are in compliance with King's obligations hereunder and all other Legal Requirements and that have been approved by the JCC. Such programs shall include training with respect to reporting Adverse Drug Experiences and technical complaints. After the initial training, King shall periodically provide additional training to each of its Sales Representative, and shall update its training materials as appropriate in connection with such additional training, in accordance with this Section 4.3. + +Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company's application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934. + +15 + + + + + + + +Section 4.4 Promotional Materials; Educational Materials. + +(a) Subject to Sections 4.4(b), 4.4(c) and 4.9, King shall, [***], create, develop, produce or otherwise obtain, and utilize sales, promotional, advertising, marketing, educational and training materials ("Promotional Materials") which are necessary to support fully the Promotional Effort for the Product. Such Promotional Materials may include, by way of example, detailing aids; leave items; journal advertising; educational programs; formulary binders; appropriate reprints and reprint carriers; product monographs; patient support kits; convention exhibit materials; direct mail; market research survey and analysis; training materials; and scripts for telemarketing and teleconferences. All Promotional Materials used by the King Sales Force or bearing the King Trademarks will be subject to the review and approval of the King CCC. All Promotional Materials developed by King hereunder shall prominently display such Depomed Trademark(s) as shall be specified by Depomed to King following its review of the applicable prototype in accordance with Section 4.4(b). + +(b) Prior to the use thereof, King shall provide to Depomed a prototype of any Promotional Materials created by King for review. Depomed shall notify King of any objections it has to such prototype and the basis therefor as soon as reasonably practicable, but no later than ten business days following its receipt thereof (five business days during the Launch Period). King shall modify such Promotional Materials to the extent necessary to resolve any objections made by Depomed to such Promotional Materials on the grounds that such Promotional Materials are inconsistent with any Legal Requirements or this Agreement and shall in good faith consider and address any of Depomed's other objections. The final version of the Promotional Materials approved by the King CCC shall be provided to Depomed for its review and approval to confirm their consistency with the prototype approved by Depomed and the resolution of Depomed's objections in accordance with this Section 4.4(b), which review and approval shall occur, as soon as reasonably practicable, but no later than ten business days (five business days during the Launch Period) following its receipt by Depomed. Upon approval, the Promotional Materials may be produced in quantity, and King shall provide Depomed with the requisite number of copies of the final printed form in a timely manner so as to allow Depomed to satisfy its obligation to file such materials with the FDA prior to the first use of the Promotional Materials, and Depomed will make such filing with the FDA within five business days of its receipt of such copies. + +(c) Notwithstanding the provisions of Section 4.4(a), Depomed shall maintain responsibility for the creation and development of Promotional Materials to be utilized in connection with the commercial launch of the Product (the "Launch Promotional Materials"). Depomed shall provide to King prototypes of all Launch Promotional Materials for the review and approval of the King CCC. King shall notify Depomed of any objections it has to such prototype and the basis therefor within five business days following its receipt thereof. Depomed shall modify such Promotional Materials to the extent necessary to resolve any objections made by King to such Promotional Materials on the grounds that such Promotional Materials are inconsistent with any Legal Requirements or this Agreement, and shall in good faith consider and endeavor to resolve and address any of King's other objections. The final version of the Launch Promotional Materials shall be provided to King for the review and approval of the King CCC to confirm their consistency with the prototype approved by King and the resolution of King's objections in accordance with this Section 4.4(c), which review and + +Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company's application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934. + +16 + + + + + + + +approval shall occur, as soon as reasonably practicable, but no later than five business days following its receipt by Depomed. On or prior to the Promotion Commencement Date, Depomed shall deliver to King all King-approved Launch Promotional Materials created by Depomed in its inventory, less a reasonable amount thereof necessary to support Promotion efforts undertaken by Depomed. The Launch Promotional Materials supplied to King under this Section 4.4(c) shall be delivered to a single location specified by King in writing prior to such delivery. Depomed hereby grants to King the non-exclusive right, during the Term, to use the Launch Promotional Materials supplied to King pursuant to this Section 4.4(c) in the performance of its obligations under this Agreement. + +(d) Depomed shall own all copyrights to all Promotional Materials that are created during the Term of this Agreement in connection with the Promotion of the Product. King shall use commercially reasonable efforts consistent with accepted business practices to obtain such assignments from the authors and creators of such materials as may be necessary to vest ownership of the copyright in Depomed. Depomed shall, and does hereby, grant to King a royalty-free license to use and reproduce such materials solely in conjunction with its Promotion of the Product pursuant to this Agreement, which license shall not be assignable or transferable by King, except in accordance with the terms of Section 2.2. + +(e) All written materials relating to Educational Programs that are funded using Advertising/Marketing/Educational Expenses shall identify both Depomed and King as sponsors of such Educational Programs, unless otherwise agreed by the JCC. + +Section 4.5 Launch Plan; Annual Plan; Promotion Expenses. + +(a) The JCC shall use all reasonable efforts to refine the Launch Plan prior to the Promotion Commencement Date in order to set forth in detail the parties' responsibilities during the Launch Period, incorporating the components of an Annual Plan set forth in Section 4.5(b) below. + +(b) On or prior to September 1 of the preceding calendar year with respect to each calendar year during the Term beginning with the 2007 calendar year, King shall develop an annual commercialization plan (the "Annual Plan") and submit the Annual Plan to the JCC for review and approval; provided that the Annual Plan for the 2007 calendar year will be developed on or prior to December 1, 2006. The Annual Plan shall set forth the manner in which the Product is to be Promoted and commercialized during the period to which the Annual Plan relates and shall include, at a minimum: + +(i) the anticipated number of quarterly and annual Details (including P1 Details, P2 Details and P3 Details) to be provided by the King Sales Force; + +(ii) the King Physician List; + +(iii) Product positioning, strategy and tactics with supporting advertising and promotional activity to be undertaken, including all material communications to Third Parties related to commercial matters for the purpose of Promoting the Product; + +(iv) any training and/or sampling programs to be conducted; + +Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company's application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934. + +17 + + + + + + + +(v) medical education programs to be conducted; + +(vi) planned public relations activities; + +(vii) Product production forecasts; + +(viii) Sample forecasts and delivery schedules; + +(ix) pricing and contracting strategies; + +(x) format and quantity of sales, marketing and educational materials; + +(xi) managed health care strategies and tactics; + +(xii) customer targets; + +(xiii) Product manufacturing and distribution; + +(xiv) post-marketing clinical studies that Depomed, in its sole discretion, decides to conduct; and + +(xv) a detailed, itemized budget for all costs and expenses associated with the activities to be undertaken pursuant to the Annual Plan (including all Advertising/Marketing/Educational Expenses), and the allocation of such costs and expenses between the parties. + +(c) The JCC shall use all reasonable efforts to approve the Annual Plan not later than November 1 of each preceding calendar year; provided that the Annual Plan for the 2007 calendar year will be approved no later than January 1, 2007. The Annual Plan for 2007 shall incorporate tasks, activities and responsibilities in addition to any tasks, activities and responsibilities in the Launch Plan. The JCC shall endeavor to ensure the parties there are no tasks, activities or responsibilities in the Launch Plan inconsistent with those set forth in the Annual Plan for 2007. + +(d) Each party shall use its commercially reasonable efforts to perform all tasks, responsibilities and activities for which it is responsible under the Launch Plan and the Annual Plan. Neither party shall have any obligation to incur Advertising/Marketing/Educational Expenses in excess of those set forth in the Annual Plan; provided, that King shall be responsible for any and all costs and expenses associated with creating and approving any new Product packaging design proposed by King (and such costs and expenses shall be in addition to King's Advertising/Marketing/Educational Expenses). Furthermore, except to the extent the JCC has approved any payment in accordance with this Agreement, including approval as part of an Annual Plan, or except for a party's obligation to pay its portion of the Advertising/Marketing/Educational Expenses described in Section 4.5(e) below, neither party shall (i) be obligated to incur any costs or expend any funds that have not been approved by such party or (ii) have the authority to cause the other party to incur any costs or expend any funds that have not been approved by such other party. + +Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company's application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934. + +18 + + + + + + + +(e) All Advertising/Marketing/Educational Expenses incurred by a party on and after the Effective Date (and such expenses incurred prior to the Effective Date as are specifically set forth in the Launch Plan attached hereto as Schedule 1.56) shall be allocated between the parties according to the following percentages: [***]% will be allocated to King and [***]% will be allocated to Depomed; provided that the first $[***] of Advertising/Marketing/Educational Expenses set forth in the Launch Plan is allocated to, and shall be paid by, Depomed and the next $[***] of Advertising/Marketing/Educational Expenses set forth in the Launch Plan is allocated to, and shall be paid by, King. Without the prior written consent of each party, the aggregate Advertising/Marketing/Educational Expenses to be incurred by the parties each calendar year during the Term shall be as set forth on Schedule 4.5. With the prior written consent of each party, the JCC may increase or decrease the Advertising/Marketing/Educational Expenses above those amounts set forth on such schedule. + +(f) Each party will bear its own operating expenses associated with the Product and Promotion thereof, including all personnel, general and administrative and overhead costs. King will bear all King Sales Force expenses, and Depomed will bear all Depomed Sales Force expenses. Depomed will bear all costs associated with maintaining and continuing all Regulatory Approvals of the Product in the Territory, including all costs associated with Adverse Drug Experience reporting and all clinical and regulatory requirements. + +Section 4.6 King Promotion Reports. Within thirty (30) days following the end of each Agreement Quarter, King shall provide the JCC with a status report, which report will summarize King's Promotional activities pursuant to this Agreement for such prior Agreement Quarter and on a calendar year-to-date basis, including, to the extent King customarily creates the following reports for King's other products which are promoted by or on behalf of King: (a) the number of P1, P2 and P3 Details made and recorded by King's standard record keeping procedures; (b) the names and addresses of the Professionals called upon; (c) the percentage of Professionals Detailed who were provided with Samples; (d) the average number of such Samples delivered on each Detail; (e) a breakdown of all information required to be contained in each report on an aggregate basis; (f) any Professionals added to the King Physician List during such quarter; and (g) such other information as may be required in the then- current Annual Plan. + +Section 4.7 Medical Inquiries. The parties acknowledge that each may receive requests for medical information concerning the Product from members of the medical and paramedical professions and consumers regarding the Product. If such requests come from a Professional on the King Physician List or are otherwise received by King, the request will be handled by King's medical department. The King medical department will submit all form letters to the Depomed's development department for approval prior to use. King will comply with direction provided by Depomed as to the content of any such letters or communications. Depomed shall be responsible for responding to such requests that do not come from Professionals on the King Physician List or are not otherwise received by King, which responses shall be in compliance with all applicable Legal Requirements and the NDA. The parties shall use the same form of letter or communication for all such responses to Professionals and consumers. Each party shall promptly provide the other party with (i) copies of all written materials and (ii) written summaries of all oral advice, provided by such party in response to such inquiries. + +Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company's application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934. + +19 + + + + + + + +Section 4.8 Trademarks. + +(a) The "Depomed" trademark must appear on all Promotional Material that makes reference to the Product. The "AcuForm" trademark must appear on all Promotional Materials that make reference to the "AcuForm" drug delivery technology incorporated into the Product. Depomed hereby grants to King a non-assignable, non- sublicensable, non-exclusive, royalty-free right and license to use the Depomed Trademarks in the Territory solely in connection with King's Promotion of the Product in accordance with this Agreement; provided King may assign and sublicense such right and license in accordance with Section 2.2. Such license shall expire immediately upon the expiration or termination of this Agreement. Subject to this Section 4.8 and to applicable Legal Requirements, King shall have the right to use the King Trademarks, and include the name "King" or any variation thereof on the Promotional Materials developed by King; provided, that such King Trademarks shall not appear in such Promotional Materials in greater prominence or in greater frequency than the Depomed Trademark(s). In addition, the JCC will discuss including the King Trademarks, in equal prominence to the Depomed Trademarks and in accordance with all Legal Requirements, on all packaging for Samples distributed by the King Sales Force, with determination as to including such marks being based on the timing for implementing such change and the costs associated therewith, with all costs associated with creating and approving new packaging borne by King in accordance with Section 4.5(d). King recognizes Depomed's title to the Depomed Trademarks, and shall not at any time, during or after the Term, do or knowingly suffer to be done any act or thing which will in any way impair the rights of Depomed in or to the Depomed Trademarks. King acknowledges and agrees that it shall not acquire and shall not claim any title to the Depomed Trademarks adverse to Depomed by virtue of the rights granted under this Agreement or through King's use of the Depomed Trademarks, it being the intention of the parties that all goodwill and improved reputation generated by King and use of the Depomed Trademarks shall inure to the benefit of Depomed. + +(b) King hereby grants to Depomed a non-assignable, non-sublicensable (except to any Third Party acting as the Depomed Sales Force), non-exclusive, royalty-free right and license to use the King Trademarks in the Territory solely in connection with Depomed's Promotion of the Product. Such license shall expire immediately upon the expiration or termination of this Agreement. Subject to this Section 4.8 and to applicable Legal Requirements, Depomed shall have the right to use Depomed Trademarks, and include the name "Depomed," "AcuForm," or any variation thereof on the Promotional Materials developed by Depomed in accordance with this Agreement. Depomed recognizes King's title to the King Trademarks, and shall not at any time, during or after the Term, do or knowingly suffer to be done any act or thing which will in any way impair the rights of King in or to the King Trademarks. Depomed shall not be obligated to use the King Trademarks in the Depomed Promotional Materials. Depomed acknowledges and agrees that it shall not acquire and shall not claim any title to the King Trademarks adverse to King by virtue of the rights granted under this Agreement or through Depomed's use of the King Trademarks, it being the intention of the parties that all goodwill and improved reputation generated by Depomed and use of the King Trademarks shall inure to the benefit of King. + +(c) Each of King with respect to its use of the Depomed Trademarks and Depomed with respect to its use of the King Trademarks will maintain quality standards for all of its uses + +Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company's application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934. + +20 + + + + + + + +of the trademarks of the other party in connection with the Promotion of the Product that are substantially equivalent to those standards used by the owner of such trademarks in connection with pharmaceutical products. Subject to the foregoing and to the other provisions of this Agreement, each party acknowledges and agrees that the owner or licensee of the trademark has the right, at any time, to modify or supplement such quality standards and that the licensee or sublicensee must implement such new standards or changes following receipt of notice of such additions or changes; provided that the licensor agrees to bear all reasonable costs associated with such modifications and supplements. Compliance with this Section 4.8(c) shall be determined pursuant to the Promotional Material and Depomed Promotional Materials review and approval procedures set forth in Sections 4.4(b) and 4.9(e), as applicable. + +Section 4.9 Promotion by Depomed. + +(a) At Depomed's option, it may, but is not obligated to, have the Depomed Sales Force Promote the Product directly to Professionals who are (i) not on the King Physician List or (ii) are on the King Physician List but did not receive at least [***] Details in the four most complete Agreement Quarters following the Promotion Commencement Date (or, if Depomed desires to commence Details prior to March 31, 2008, at least [***] Details during the two Agreement Quarters on which the Baseline Percentage is determined). If Depomed desires to use the Depomed Sales Force for this purpose, it will inform King at least 90 days in advance of the commencement of Details by the Depomed Sales Force and provide King with the Depomed Physician List. During such 90-day period, King will be entitled to review the Depomed Physician List and confirm that such list does not contain any Professionals that are not, as of the date of King's receipt of the Depomed Physician List, eligible for inclusion on the Depomed Physician List. Following creation of the initial Depomed Physician List, from time to time but not more than two times per calendar year, Depomed may add Professionals to the Depomed Physician List pursuant to the procedure set forth above, so long as Depomed has conducted at least [***] Details to such Professional during the six-month period immediately prior to being added. Following the addition of such Professionals to the Depomed Physician List, the Baseline Percentage shall be adjusted to reflect prescriptions written by any such Professionals by adding to the then-current Baseline Percentage the quotient obtained by dividing (x) [***] prior to Depomed's commencement of providing Details to such Professionals, by (y) [***], based on Prescriber Data for such two complete Agreement Quarters. + +(b) Depomed will submit to the JCC a call plan setting forth the Details to be performed by the Depomed Sales Force. Such call plan may be taken into account in developing the Annual Plan. Any Professional on the Depomed Physician List who does not receive at least [***] Details in each full calendar year following the commencement of Promotion of the Product by the Depomed Sales Force will be excluded from the Depomed Physician List in subsequent calendar years for purposes of calculating Depomed Net Sales, and for purposes of calculating the Baseline Percentage. + +(c) During any period in which the Depomed Sales Force is making Details, efforts will be made at the local level to coordinate the Details by the Depomed Sales Force with Details by the King Sales Force to ensure the most effective coverage of the target audiences and to minimize non-productive efforts. Depomed will provide the JCC with such information related to Depomed's promotion activities as is reasonably necessary to assist in such efforts. + +Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company's application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934. + +21 + + + + + + + +(d) All Details made by the Depomed Sales Force will be reported to King. Such reports by Depomed will be made in the same manner as King's Details under Section 4.6 (to the extent Depomed customarily creates such reports for Depomed's other products which are promoted by or on behalf of Depomed). + +(e) Depomed may purchase from King, [***], copies of any Promotional Materials created by King for use by the Depomed Sales Force. Upon Depomed's request, King will provide to Depomed electronic copies of Promotional Materials created by or for King, which Promotional Materials may be modified for use by Depomed; provided that any modification must be approved in the same manner as approval of Depomed Promotional Materials (as defined below). King [***] for such Promotional Materials. Depomed may also create and develop its own Promotional Materials for use by the Depomed Sales Force ("Depomed Promotional Materials"). Prior to the use thereof, Depomed shall provide to the JCC a prototype of any Depomed Promotional Materials. The JCC may review such prototype for consistency with Legal Requirements and the Product positioning and messaging reflected in the then-current Annual Plan. If the JCC notifies Depomed within 10 business days after receipt of a prototype that is objects to such prototype on the grounds that it is inconsistent with the Product positioning and messaging reflected in the then current Annual Plan, Depomed shall modify such Depomed Promotional Materials to the extent necessary to resolve any objections made by the JCC to such Depomed Promotional Materials on such grounds. In addition, Depomed shall in good faith consider any other objections the JCC may have to any Depomed Promotional Materials. The Depomed Promotional Materials will not contain any King Trademark unless such materials are subject to the review and approval of the King CCC. King may purchase from Depomed, [***], copies of any Depomed Promotional Materials. Upon King's request, Depomed will provide to King electronic copies of Depomed Promotional Materials created by or for Depomed, which Depomed Promotional Materials may be modified for use by King; provided that any modification must be approved in the same manner as approval of Promotional Materials. + +(f) Depomed may purchase from King, [***], copies of training materials developed by King related to the Product for use by Depomed in the training of the Depomed Sales Force. Depomed shall be responsible for training of the Depomed Sales Force, and may, at its own expense, develop training materials for the Depomed Sales Force in other media or forms, provided that such materials shall be subject to King's review as Depomed Promotional Materials as provided in Section 4.9(e). Depomed shall, at its own expense, train the Depomed Sales Force using such training materials, the other Promotional Materials and Depomed Training Materials and such programs as Depomed shall deem appropriate that are in compliance with Depomed's obligations hereunder. Such programs shall include training with respect to reporting Adverse Drug Experiences and technical complaints. After the initial training, Depomed shall periodically provide additional training to each Sales Representative, and shall update its training materials as appropriate in connection with such additional training, in accordance with this Section 4.9(f). + +(g) [***] Depomed's costs or expenses related to any activities of the Depomed Sales Force, including costs for Depomed Promotional Materials, training or training materials or the purchase from King of Promotional Materials for the Depomed Sales Force, will be included in Advertising/Marketing/Educational Expenses or be reimbursable by King. + +Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company's application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934. + +22 + + + + + + + +(h) It is understood, and Depomed agrees, that it will be accountable for the acts or omissions of its employees and agents to the extent such acts or omissions fail to comply with Depomed's obligations under this Agreement. + +ARTICLE V + +CLINICAL AND REGULATORY AFFAIRS; DEVELOPMENT + +Section 5.1 Regulatory Approvals. Depomed shall use commercially reasonable efforts to maintain and continue all Regulatory Approvals currently in effect for the Product. King agrees that all Regulatory Approvals, applications therefor and any other submissions to a Governmental Authority with respect to the Product shall be in the name of, and shall be owned by, Depomed or its designee. + +Section 5.2 Compliance with Regulatory Requirements. Unless otherwise required by law or expressly required by this Agreement, Depomed will retain exclusive authority over and responsibility for complying with all regulatory requirements and maintaining all contacts with Governmental Authorities with respect to the Product, including maintaining and updating of the NDA, the development and submission of applications for new indications, the reporting of any adverse drug reactions to the FDA, the compliance of Promotional Materials with FDA rules and regulations and the filing of Promotional Materials with the FDA. + +Section 5.3 Compliance. In performing its duties hereunder, each party shall, and shall cause the King Sales Force or Depomed Sales Force, as applicable, and its employees and agents to, comply with all Legal Requirements, including the FDA's regulations and guidelines concerning the advertising of prescription drug products, DDMAC's promotional guidelines, the Department of Health and Human Services Office of the Inspector General Compliance Program Guidance for Pharmaceutical Manufacturers, the American Medical Association's Guidelines on Gifts to Physicians, the PhRMA Code on Interactions with Healthcare Providers, the Prescription Drug Marketing Act of 1987, as amended, and the rules and regulations promulgated thereunder, the ACCME Standards for Commercial Support of Continuing Medical Education, equal employment, non-discrimination and federal and state anti-kickback Legal Requirements, Legal Requirements with respect to submission of false claims to governmental or private health care payors, and all industry and professional standards, which may be applicable to the activities (including the warehousing, handling and distribution of Samples) to be performed by such party hereunder. None of King, Depomed, the King Sales Force, the Depomed Sales Force and either party's employees and agents shall offer, pay, solicit or receive any remuneration to or from Professionals in order to induce referrals of or purchase of the Product. The King Sales Force and the Depomed Sales Force shall have no direct contact with, nor shall the King Sales Force or the Depomed Sales Force be involved with the delivery of Product to patients, other than delivery of Samples directly to Professionals authorized to prescribe the Product. The King Sales Force and the Depomed Sales Force shall be trained in connection with compliance with Sec. 1128B(b) of the Social Security Act and the AMA Guidelines on Gifts to Physicians from Industry prior to engaging in Promotion of the Product. + +Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company's application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934. + +23 + + + + + + + +Section 5.4 Communications with Regulatory Authorities. + +(a) All communications with Government Authorities concerning the Product shall be the sole responsibility of Depomed. Depomed shall within two business days provide King with copies of all such communications (including summaries of all relevant verbal communications) related to Promotional Materials and Serious Adverse Drug Experiences (except that routine communications as to such matters (e.g., FDA 2253 correspondence) may be forwarded to King within 5 business days). Depomed will consult with King concerning adverse drug reaction reporting to the FDA that Depomed reasonably considers to be significant to the Product, including regulatory responses to follow up inquiries regarding adverse drug reactions. Depomed will provide to King a copy of all draft responses related to such matters as soon as practicable, and will endeavor to provide them at least five business days in advance of their submission (to the extent allowable under Legal Requirements), and will consider in good faith any comments provided to Depomed by King. + +(b) King shall not, without the consent of Depomed or unless so required by Legal Requirements (and then only pursuant to the terms of this Section 5.4, unless this Section 5.4 is inconsistent with Legal Requirements), correspond or communicate with the FDA or with any other Governmental Authority, whether within the Territory or otherwise, concerning the Product, or otherwise take any action concerning any Regulatory Approval under which the Product is sold or any application for Regulatory Approval of the Product; provided that during the Term, King shall have the right to communicate with the FDA or any other Governmental Authority regarding the Product if such communication is necessary to comply with the terms of this Agreement or any Legal Requirement, or if King made a request of such agency to communicate with Depomed instead, and such Governmental Authority denied such request (in any such case, King shall give Depomed notice as soon as reasonably practicable of such communication and, to the extent practicable, Depomed shall be permitted to accompany King, take part in any such communications and receive copies of all such communications). King shall, immediately upon receipt of any communication from the FDA or from any other Governmental Authority relating to the Product, forward a copy of the same to Depomed and respond to all inquiries by Depomed relating thereto. If King is required by law to communicate with the FDA or with any other Governmental Authority relating to the Product, then King shall so advise Depomed immediately (within one business day) and provide Depomed in advance with a copy of any proposed written communication, or a written summary of any proposed oral communication with the FDA or any other Governmental Authority. King shall comply with any and all reasonable direction of Depomed concerning any meeting or written or oral communication with the FDA or any other Governmental Authority relating to the Product unless otherwise required by Legal Requirements. + +Section 5.5 Product Complaints. King shall refer any oral or written Product Complaints which it receives concerning the Product to Depomed within four calendar days of its receipt thereof; provided, that all complaints concerning suspected or actual Product tampering, contamination or mix-up shall be delivered within twenty-four hours of its receipt thereof. King shall not take any other action in respect of any such complaint without the consent of Depomed unless otherwise required by Legal Requirements. If requested by Depomed, King will collaborate with Depomed to resolve any Product Complaints. All Product Complaints shall be directed to the attention of Depomed's Vice President, Regulatory Affairs, at + +Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company's application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934. + +24 + + + + + + + +Depomed's address set forth in Section 14.1. Depomed shall provide King with a summary of all Product Complaints received by Depomed within ten business days of its receipt thereof. + +Section 5.6 Adverse Drug Experience Reports. + +(a) Each party shall notify the other: (i) of all Serious Adverse Drug Experience Reports within forty-eight (48) hours of the time such Serious Adverse Drug Experience Report becomes known to such party (including its employees); and (ii) of all Adverse Drug Experience Reports within five (5) calendar days of the time such Adverse Drug Experience Report becomes known to such party (including its employees). + +(b) Except as may otherwise be required by Legal Requirements, (i) King shall not disclose any information concerning Adverse Drug Experience Reports or Serious Adverse Drug Experience Reports to any Person or Governmental Authority without the prior consent of Depomed; and (ii) Depomed shall have the sole discretion to determine whether any Product Complaint, Adverse Drug Experience Report or Serious Adverse Drug Experience Report must be reported to the FDA or any other Governmental Authority. + +(c) All follow-up investigations concerning Adverse Drug Experience Reports and Serious Adverse Drug Experience Reports shall be conducted by Depomed; provided that King shall have the right to participate in such investigations upon its request. King shall provide all reasonable cooperation with any such follow-up investigation as may be requested by Depomed from time to time. + +Section 5.7 Recalls or Other Corrective Action. Depomed shall have sole responsibility for and shall make all decisions with respect to any recall (including recall of packaging and promotion materials), market withdrawals or any other corrective action related to the Product. Depomed shall promptly notify King of any such actions taken by Depomed, including all actions that are reasonably likely to result in a material adverse effect on the marketability of the Product in the Territory. At Depomed's request, King shall provide assistance to Depomed in conducting such recall, market withdrawal or other corrective action (including retrieving Samples distributed by the King Sales Force to Professionals). With respect to any recall, market withdrawal or corrective action initiated by Depomed as a result of Depomed becoming aware of any manufacturing defect in Product (other than Product manufactured by King in accordance with Section 6.6), Depomed shall reimburse King for its reasonable, documented, direct, out-of-pocket costs incurred in connection with participating in such recall, market withdrawal or other corrective action provided that King's breach of its obligations hereunder is not a material cause of the recall, market withdrawal or other corrective action. Except as set forth above, Depomed shall be under no liability whatsoever to compensate King or make any other payment to King for any decision to recall, initiate a market withdrawal or take any other corrective action with respect to the Product. + +Section 5.8 Assistance. Each party agrees to provide to the other all reasonable assistance and take all actions reasonably requested by the other party that are necessary to enable the other party to comply with any Legal Requirement applicable to the Product. + +Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company's application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934. + +25 + + + + + + + +ARTICLE VI + +MANUFACTURING AND SUPPLY; SALES; PRICING; 1000MG FORMULATION + +Section 6.1 Obligations of Depomed. In accordance with the provisions of this Agreement and all applicable Legal Requirements, Depomed shall, at its cost and expense, use reasonable best efforts to perform or cause to be performed all Product manufacture, labeling, packaging, warehousing, distribution and return, order entry, customer services and all other activities to supply and distribute the Product in the Territory in order to fill orders for Product conforming to the then-current Volume Forecast in a timely and efficient manner. From and after the completion of the sixth full calendar month following the Promotion Commencement Date, Depomed shall use commercially reasonable efforts to maintain at least one month's safety stock of Product ("Safety Stock") to address unanticipated changes in demand for the Product (calculated on the basis of the Volume Forecast contained in the then-current Annual Plan). + +Section 6.2 Manufacturing Activities. The Product, including all Samples, to be manufactured by or for Depomed for sale in the Territory shall be manufactured to meet applicable specifications for the Product in accordance with the NDA, cGMP and in compliance with all other applicable Legal Requirements. + +Section 6.3 Volume Forecasts. At least 30 days prior to the beginning of each Agreement Quarter ending after the Promotion Commencement Date, King shall submit to the JCC a written forecast by month of the number of Units of Product expected to be sold in the Territory during the twelve (12) month period beginning with such Agreement Quarter, which forecast shall be prepared by King in good faith. In order to assist King in developing such forecasts, Depomed shall give King trade wholesaler stocking levels information within ten days following the beginning of each Agreement Quarter ending after the Promotion Commencement Date (or, if later, within two business days after such information becomes available to Depomed). The JCC shall review and discuss such forecast and shall make such modifications thereto as may be necessary for such forecast to be unanimously approved by the JCC and to be consistent with the forecasting and purchasing provisions of Depomed's Third Party supply agreement relating to the Product (as so modified and approved for the applicable twelve (12) month period, the "Volume Forecast"). Depomed shall use reasonable best efforts to manufacture and distribute, or cause to be manufactured and distributed, Product consistent with the Volume Forecast. The Volume Forecast for the twelve month period beginning on August 1, 2006 is attached hereto as Schedule 6.3. + +Section 6.4 Sales; Pricing. + +(a) Depomed or its Affiliates shall book all sales of the Product in the Territory and shall be responsible for entering into any contracts and other arrangements with any Person regarding the sale of the Product, and for establishing and approving the form, content and terms and conditions thereof, including any discount, allowance, rebate, chargeback or other term granted therein; provided, however, that (i) the pricing of the Product shall be consistent with the pricing established by the JCC in accordance with Section 3.3 hereof, (ii) the terms of such contract and other arrangement shall be consistent with the contracting guidelines established by the JCC in accordance with Section 3.3(k) and reflected in the Annual Plan, and (iii) any + +Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company's application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934. + +26 + + + + + + + +deductions from gross amounts invoiced pursuant to any such contract or arrangement shall correspond to one or more of the categories of deductions set forth in the definition of "Net Sales" in Article I. The parties have reviewed the initial pricing and contracting guidelines applicable to the Product. The parties agree to discuss among the JCC and finalize the initial pricing and contracting guidelines within two weeks after the Effective Date. + +(b) King will work on behalf of Depomed to provide necessary support for managed markets and trade customer groups with respect to the Product to enable Depomed to enter into such contracts and other arrangements described above. For purposes of clarity, all such contracts and arrangements supported by King must be executed and administered by Depomed. + +Section 6.5 Samples. + +(a) Depomed shall provide or cause to be provided to King, from time to time as contemplated by the Annual Plan, with samples of the Product that are not for sale and with no fee associated ("Samples") to be distributed by King solely in connection with the performance of Details. Depomed shall supply such Samples FOB Depomed's or its designee's warehouse, and the risk of loss and responsibility for handling and warehousing of the Samples shall pass to King upon delivery to a carrier designated by King. King shall be responsible for distributing the Samples to its Sales Representatives in a timely manner. Depomed shall invoice King for each shipment of Samples at its Standard Cost payable within 30 days of the invoice date. King shall also be responsible for securing the return and appropriate disposal of and reconciling existing Sample inventories from discontinued Sales Representatives. + +(b) Samples supplied by Depomed to King shall be used by King solely in performing Details to Professionals in accordance with this Agreement. Upon its receipt of Samples, King shall be solely responsible for accountability and compliance with the PDMA for the King Sales Force, and other applicable Legal Requirements relating to such Samples or the distribution of same by the King Sales Force, and shall be responsible for adherence by its Sales Representatives to such Legal Requirements. + +(c) Sampling volume shall be consistent with King's Promotional Effort and considered a component of the Advertising/Marketing/Educational Expenses. Sampling volume will be included as a part of each Annual Plan. + +Section 6.6 Inability to Supply. In the event that a Depomed Supply Failure occurs, notwithstanding its compliance with its obligations under Section 6.1, to fulfill all orders for the Product generated by King activities in a timely and efficient manner, upon written notice to Depomed (a "King Manufacturing Notice"), King shall have, and hereby grants King, exercisable only in accordance with the provisions hereof, the right, but not the obligation, to manufacture, or have manufactured, the Product on behalf of Depomed, at Depomed's expense, including expenses related to the technical transfer of the Product, and Depomed will provide reasonable assistance to King in connection therewith, including by transferring or licensing to King all Technology necessary or useful to give King the capability of manufacturing the Product so that King can undertake manufacture of the Product; provided, however, that Depomed shall not be required to reimburse King for more than [***] percent ([***]%) of Depomed's standard cost for such Product. Any such Product manufactured by King will be + +Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company's application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934. + +27 + + + + + + + +sold by Depomed in accordance with this Agreement. King's right to use the Technology to manufacture, or have manufactured, the Product under this Section 6.6 shall terminate upon the later to occur of (a) the second (2nd) anniversary of the date upon which King delivered the King Manufacturing Notice to Depomed and (b) the six (6) month anniversary of the date upon which Depomed shall have delivered to King a certification of its CEO as to Depomed's ability to fulfill all orders for the Product generated by King activities in a timely and efficient manner, but in any event on termination of this Agreement. + +Section 6.7 Manufacture by King. Depomed agrees to consider in good faith any proposal by King to manufacture the 500mg formulation of the Product at King's Bristol facility that would result in a reduction in the supply price applicable to the Product relative to Depomed's then current contract manufacturer, and would be suitable to Depomed's operations, regulatory affairs, and quality assurance groups. Any fixed and determinable savings in Product manufacturing cost to Depomed realized during the Term, and during the eight calendar quarters during which a payment is being paid pursuant to Section 7.4, that results from any definitive long-term supply arrangement between Depomed and King relating to the Product relative to Depomed's then current long-term supply arrangement [***]; provided that, in the event King continues to manufacture the Product for Depomed, the parties will negotiate in good faith with respect to adjusting the pricing mechanism for the manufacture of such Product following the Term, and such eight calendar quarter period, in order to compensate King for such savings and for any discounts King provided to Depomed as a result of the relationship of the parties hereunder. Any manufacture by King of the Product would be subject to regulatory approval of a supplemental NDA providing for such manufacture. + +Section 6.8 1000mg Formulation. + +(a) The parties acknowledge that Depomed will use commercially reasonable efforts to submit a supplemental new drug application to the FDA and to obtain Regulatory Approval for a 1000mg formulation using metformin as the sole active pharmaceutical ingredient (the "1000mg Formulation") to which Depomed has certain rights pursuant to the BLS Supply Agreements. + +(b) The provisions of Section 6.1 through 6.6 will not apply to the 1000mg Formulation unless and until Depomed obtains Regulatory Approval for the 1000mg Formulation, at which time such provisions will apply, except as follows: (i) Depomed shall have no obligation to continue to supply and distribute the 1000mg Formulation if Depomed, in the exercise of its reasonable business judgment after consultation with the JCC, determines that marketing the 1000mg Formulation in the Territory is not commercially feasible due to reasons related to intellectual property matters, safety, FDA, manufacturing or supply issues, or market conditions; and (ii) Depomed shall have no liability under this Agreement for any failure by BLS to timely deliver and supply the 1000mg Formulation under the BLS Supply Agreement in accordance with the terms thereof, and any such failure on the part of BLS shall not be a breach or default of this Agreement by Depomed (except to the extent that any such failure by BLS arises directly from Depomed's failure to comply with its obligations, including paying amounts due, under such agreement). + +Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company's application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934. + +28 + + + + + + + +Section 6.9 BLS Supply Agreements. The parties acknowledge that Depomed is subject to certain obligations under the BLS Supply Agreements. Depomed shall not amend, terminate or cause to be terminated any BLS Supply Agreement (or any other agreement between Depomed and BLS concerning rights to, or the supply or marketing of, the Product in the Territory) without the prior written consent of King, which consent shall not to be unreasonably withheld, delayed or conditioned; provided that Depomed shall have the right to amend any BLS Agreement without the consent of King if such amendment does not materially and adversely affect (a) Depomed's ability to maintain Regulatory Approval for the 1000mg Formulation, (b) Depomed's ability to purchase the 1000mg Formulation in commercial quantities under the BLS Supply Agreements, or (c) King's economic benefits hereunder. + +ARTICLE VII + +COMPENSATION + +Section 7.1 Promotion Fees. + +(a) In consideration for King's performance of its obligations under this Agreement, Depomed shall pay promotion fees (the "Promotion Fees") to King as follows: following each Agreement Quarter during the Term, Depomed shall pay to King 50% of the Gross Margin for such Agreement Quarter. + +(b) Within thirty (30) days following the end of each Agreement Quarter during the Term, Depomed shall provide King with a statement setting forth: + +(i) the aggregate number of Units of Product sold to customers in the Territory during such Agreement Quarter; + +(ii) Net Sales during such Agreement Quarter; + +(iii) Depomed Net Sales during such Agreement Quarter (if any); + +(iv) COGS during such Agreement Quarter (based on Depomed's Standard Cost); + +(v) Advertising/Marketing/Educational Expense with respect to the costs of Samples (based on Depomed's Standard Cost) during such Agreement Quarter; + +(vi) Gross Margin for such Agreement Quarter; and + +(vii) a calculation of the amount, if any, payable by Depomed to King in respect of such Agreement Quarter pursuant to Section 7.3(a). + +(c) Within 4 business days following the end of each Agreement Month (or if later, within two business days after such information becomes available to Depomed) during the Term, Depomed shall provide King with a statement setting forth the aggregate number of Units of Product sold to customers in the Territory during such Agreement Month. + +Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company's application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934. + +29 + + + + + + + +(d) Except as expressly specified otherwise, any amounts payable by one party to the other party in respect of any Agreement Quarter pursuant to this Agreement shall be paid within forty-five (45) days after the end of such Agreement Quarter. + +Section 7.2 Maintenance of Records. + +(a) Each party agrees to keep, for a period of at least three years after the date of entry (or such longer period as may be required by Legal Requirements) full and accurate records maintained in accordance with such party's accounting practices in sufficient detail to enable a Third Party to accurately calculate (i) in the case of Depomed, COGS, BLS Fees, Depomed's Advertising/Marketing/Educational Expenses, Net Sales and Depomed Net Sales reported, payments to be made under this Agreement and Details completed by the Depomed Sales Force, and (ii) in the case of King, King's Advertising/Marketing/Educational Expenses and PDEs completed by the King Sales Force. Upon 30 days prior written notice, such records shall be made available by the audited party for audit by an independent certified public accounting firm designated by the other party and reasonably acceptable to the party whose records are to be examined. The auditor will only examine such books and records during business hours but not more than once each fiscal year while this Agreement remains in effect and for three years thereafter in order to verify expenses, Net Sales, Depomed Net Sales, PDEs or Details completed, or payments due under this Agreement. The fees and expenses of the auditor performing such verification examination shall be borne by the party conducting the verification; provided, however, that if any verification reveals that the audited party has reported incorrectly, and the amount of such discrepancy is at least five percent of the aggregate amount that should have been reported for the period examined, then the audited party shall pay the entire amount of the fees and expenses for such verification. + +(b) Each party shall have the right, upon five business days' prior written notice, to audit all applicable records of the other party (other than records described in Section 7.2(a)) for the purpose of determining the audited party's compliance with the obligations set forth in this Agreement, including with respect to training programs and certifications and records reports for the Samples. The audit will be conducted during normal business hours, at convenient times. Any such audit may be conducted no more than once each fiscal year. The fees and expenses of the auditing party shall be borne by such party. This right to audit shall extend throughout the term of this Agreement and for one year after expiration or termination of this Agreement. + +(c) Whenever in this Agreement a party is required to report its costs, or is entitled to receive or obligated to make a payment based on its costs, such costs shall be determined in accordance with generally accepted accounting principles as applied in the United States ("GAAP"), consistent with the terms of this Agreement. The term "out-of-pocket" costs or expenses means cost or expenses paid to Third Parties and shall not include any fixed costs or expenses, personnel costs or expenses, overhead costs or expenses, or other costs or expenses of a similar nature. + +(d) COGS and all Advertising/Marketing/Educational Expenses, including Samples, shall be determined in accordance with GAAP, except as follows: (i) COGS and Samples shall be calculated at Depomed's Standard Cost for each Agreement Quarter and reconciled + +Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company's application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934. + +30 + + + + + + + +periodically as set forth in Section 7.5(d); and (ii) COGS shall include costs incurred by Depomed associated with achieving manufacturing efficiencies and ensuring Product supply. + +(e) Depomed shall calculate Standard Costs in good faith to approximate as closely as reasonably practicable such actual costs calculated in accordance with GAAP (e.g., the unit cost of finished goods by bottle size or packaged samples) and shall provide the JCC with its methodology for calculating such costs. The JCC shall review Depomed's methodology for calculating Standard Cost at least annually during the Term to ensure that Depomed's Standard Costs continue to approximate as closely as reasonably practicable such actual costs calculated in accordance with GAAP, and Depomed shall revise such methodology following such review in accordance with the recommendations of the JCC. + +Section 7.3 Payments. Any payments required to be made by either party under this Agreement shall be made in United States dollars via wire transfer of immediately available funds to such bank account as the other party shall designate in writing prior to the date of such payment. + +Section 7.4 Tail Promotion Fees. Following the termination of this Agreement at the conclusion of the initial five year term or any additional term, for each of the eight full calendar quarters following such termination, Depomed shall pay to King an amount equal to, in each of the first four such calendar quarters, [***]% of the Net Sales for each such quarter and, in each of the fifth through eighth such calendar quarters, [***]% of such Net Sales for each such quarter. + +Section 7.5 Expense Reimbursement. + +(a) If Depomed pays Advertising/Marketing/Educational Expenses allocated to King under the Launch Plan or the Annual Plan, Depomed shall notify King at least five business days in advance of the payment of such Advertising/Marketing/Educational Expenses, and, unless King objects in writing to Depomed before the end of such five business-day period, King shall reimburse Depomed for such Advertising/Marketing/Educational Expenses within thirty days' after receipt of a detailed invoice therefor. If King pays Advertising/Marketing/Educational Expenses allocated to Depomed under the Launch Plan or the Annual Plan, King shall notify Depomed at least five business days in advance of the payment of such Advertising/Marketing/Educational Expenses, and, unless Depomed objects in writing to King before the end of such five business-day period, Depomed shall reimburse King for such Advertising/Marketing/Educational Expenses within thirty days' after receipt of a detailed invoice therefor. + +(b) Within 15 days following the end of each Agreement Quarter, each party shall provide to the JCC a report setting forth in reasonable detail Advertising/Marketing/Educational Expenses incurred by such party in such Agreement Quarter in accordance with GAAP, including expenses incurred by a party but not reimbursed by the other party pursuant to Section 7.5(a) above or expenses reimbursed by a party pursuant to such section. Within 10 days thereafter, the JCC shall produce a report setting forth the calculation of Advertising/Marketing/Educational Expenses and its allocation between the parties in accordance with Section 4.5(e) above. The report shall also set forth the amount of any + +Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company's application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934. + +31 + + + + + + + +payments that a party must make to the other party in order to achieve such allocation between the parties. All such payments shall be made within 45 days following the end of the applicable Agreement Quarter. + +(c) At the end of each Agreement Quarter, the parties will reconcile their respective payments and expenses hereunder, including Promotion Fee payments and expense reimbursements pursuant to this Article VII, and, at the discretion of the party who has paid an amount greater than that allocable to such party for the relevant Agreement Quarter, such over-paying party will be reimbursed by the other party within 45 days following the end of the applicable Agreement Quarter, based on the report of the JCC described in Section 7.5(b) above or, at its discretion, will receive a credit against amounts payable by the over-paying party to the other party in the subsequent Agreement Quarter(s), which credit amount will be carried forward until fully credited or reimbursed. Reimbursement of expenses pursuant to this Section 7.5(c) shall be made based on Advertising/Marketing/Educational Expenses recorded in accordance with GAAP. + +(d) The statement submitted by Depomed pursuant to Section 7.1(b) for the final Agreement Quarter of each calendar year during the Term, and the final Agreement Quarter of the Term, shall be accompanied by a report created by Depomed (a "Reconciliation Report") that (i) reconciles Depomed's Standard Cost for COGS and Samples during such calendar year (or partial calendar year, as applicable) to Depomed's actual COGS and Depomed's actual out-of-pocket cost for Samples calculated in accordance with Section 7.2(d), (ii) sets forth any adjustment to Gross Margin for such calendar year (or partial calendar year, as applicable) on the basis of such reconciliation, and (iii) sets forth any adjustment to Advertising/Marketing/Educational Expenses for such calendar year (or partial calendar year, as applicable) based on reconciliation of actual costs for Samples. The report shall also set forth the amount of any payments that a party must make to the other party in order to achieve the proper allocation of the adjusted Gross Margin between the parties, pursuant to Section 7.1(a), for such calendar year and the proper allocation of Advertising/Marketing/Educational Expenses between the parties, pursuant to Section 4.5(e), for such calendar year. All such payments shall be made within 45 days following the receipt of the Reconciliation Report. Depomed may elect to submit Reconciliation Reports on a quarterly basis in accordance with the provisions of this Section 7.5(d), in which event (i) such quarterly Reconciliation Reports will accompany the statement submitted by Depomed pursuant to Section 7.1(b), and (ii) each reference in this Section 7.5(d) to a calendar year shall be deemed to be reference to an Agreement Quarter. + +Section 7.6 Depomed Percentage. If, prior to or following the commencement of Product Promotion by the Depomed Sales Force, Depomed reasonably determines that the Prescriber Data fails to, or is likely to fail to, reasonably accurately reflect the portion of Net Sales attributable to prescriptions written by Professionals on the Depomed Physician List (whether as a result of Professionals opting out of the American Medical Association's Physician Masterfile database or otherwise), the parties shall negotiate in good faith with respect to implementing a revised manner of measuring the portion of Net Sales attributable to prescriptions written by Professionals on the Depomed Physician List, and reflect any such modification in the definition of "Depomed Percentage" and the "Baseline Percentage." The parties shall consider in their discussions any other customary manner of determining similar + +Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company's application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934. + +32 + + + + + + + +information as may arise in light of Professionals opting out of the American Medical Association's Physician Masterfile database. + +ARTICLE VIII + +TERM AND TERMINATION + +Section 8.1 Term. The term of this Agreement shall commence on the Effective Date and shall continue, unless terminated sooner in accordance with this Article VIII, until June 27, 2011 (the "Term"). The Term of this Agreement shall be extended for subsequent one year periods upon the mutual agreement of the parties, which agreement shall be set forth in writing (in which event a party that desires to so extend the Term of this Agreement shall notify the other party at least 120 days prior to the termination of this Agreement). + +Section 8.2 Early Termination. + +(a) Depomed and King shall have the following rights with respect to the performance of PDEs: + +(i) In the event King performs more than [***] PDEs each Agreement Quarter (the "PDE Minimum") in any Agreement Quarter, such excess PDEs will be carried forward to the immediately following Agreement Quarter. In the event that King does not perform the PDE Minimum in any Agreement Quarter (the difference between such PDE Minimum and the number of PDEs actually conducted, the "PDE Shortfall"), King will have until the end of the Agreement Quarter immediately following to cure its failure by providing a sufficient number of excess PDEs in the immediately following Agreement Quarter. + +(ii) If King does not perform, in the aggregate, two times the PDE Minimum in any two consecutive Agreement Quarters, Depomed may demand that King cure such default by (A) [***] and (B) [***], in each case, prior to the end of the next succeeding Agreement Quarter following notice from Depomed. + +(iii) Upon the third failure by King to meet the PDE Minimum during any six consecutive Agreement Quarters, Depomed shall have the right to [***] or demand that King shall cure such default in the same manner outlined in clause (i) above for the first such default. + +(b) If, as of the end of any period of the immediately previous four consecutive Agreement Quarters, Promotion Net Sales for such period are less than $[***], either party shall have the right to terminate this Agreement on 120 days' prior written notice to the other party, which notice may not be given before the third anniversary of the Promotion Commencement Date. + +(c) If a party desires to exercise its option to terminate this Agreement pursuant to this Section 8.2 or demand any [***] or cure pursuant to Section 8.2(a), it must give written notice to the other party within 60 days after receiving the report of the Agreement Quarter or Agreement Month giving rise to the right to terminate this Agreement pursuant to Section 8.2. + +Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company's application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934. + +33 + + + + + + + +Section 8.3 Termination for Cause. Either party may terminate this Agreement, effective at any time after providing sixty days written notice and an opportunity to cure during such sixty day period (ninety days in the case of a breach by Depomed of Section 6.1), in the event of a material failure of the other party to comply with its material obligations contained in this Agreement. If such cure is effected, such notice with respect to such termination shall be null and void. + +Section 8.4 Termination for Bankruptcy or Force Majeure. To the extent permitted by law, each party will have the right to terminate this Agreement immediately upon notice to the other party, in the event of either of the following: + +(a) The entry of an order for relief under the United States Bankruptcy Code (or any corresponding remedy under successor laws) against the other party; the filing of a petition by or against the other party under any bankruptcy, insolvency or similar law (which petition is not dismissed within sixty days after filing), except Chapter 11 of the United States Bankruptcy Code or any successor statute that permits a corporation to continue its operation while protecting it from creditors; the appointment of a receiver for the other party's business or property; or the other party's making of a general assignment for the benefit of its creditors; or + +(b) Any Force Majeure Event affecting the other party beyond the other party's control which lasts for a period of at least six months and which is of sufficient intensity to interrupt or prevent the carrying out of such other party's material obligations under this Agreement during such period. + +Notwithstanding the occurrence of any of the event specified in subsection (a) of this Section 8.4, the parties acknowledge and agree that, to the extent Section 365(n) of the United States Bankruptcy Code applies to this Agreement, the non-insolvent party may elect to retain and exercise the rights granted to it hereunder with respect to the intellectual property owned or controlled by the insolvent party. + +Section 8.5 Force Majeure. Any Force Majeure Event of the type described in Section 16.7 affecting a party hereunder shall entitle the other party hereto, at any time after the expiry of the period of six months specified therein and upon sixty days written notice given after such six month period (such notice being, null and void if the Force Majeure Event is discontinued during such sixty-day period), in addition to the right to terminate this Agreement under Section 8.4, the right to (i) extend this Agreement for a period equal to the duration of the Force Majeure Event which occasioned the delay, interruption or prevention (subject to the maximum term of six months) or (ii) continue the Agreement in full force and effect without modification. In no circumstances will either party be liable to the other for its inability to perform under this Agreement due to any such Force Majeure Event. + +Section 8.6 Recall. Either party shall have the right to terminate this Agreement in the event of a large scale recall or withdrawal of the Product from the Territory resulting from a significant safety risk inherent in the Product and not due to tampering, a remediable manufacturing problem, or other defect that can be cured with respect to Products manufactured after such risk is discovered. + +Section 8.7 Effect of Termination. + +Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company's application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934. + +34 + + + + + + + +(a) No additional payment obligations arising under Article VII hereof shall accrue after the date of expiration or termination of this Agreement except as set forth in Section 7.4; provided, however, that expiration or termination of this Agreement shall not relieve either party of any obligations accruing prior to such expiration or termination. Certain provisions of this Agreement by their terms continue after the expiration or termination of this Agreement. In addition, any other provisions required to interpret and enforce the parties' rights and obligations under this Agreement shall also survive, but only to the extent required for the full observation and performance of this Agreement. + +(b) Except as indicated in Sections 8.5, expiration or termination of this Agreement shall be without prejudice to (a) any remedies which any party may then or thereafter have hereunder or at law; and (b) a party's right to receive any payment accrued under the Agreement prior to the termination date but which became payable thereafter; and (c) either party's right to obtain performance of any obligations provided for in this Agreement which survive termination by their terms or by a fair interpretation of this Agreement. Except as expressly set forth herein, the rights to terminate as set forth herein shall be in addition to all other rights and remedies available under this Agreement, at law, or in equity or otherwise. + +(c) Upon the expiration or termination of this Agreement pursuant to this Article VIII, each party shall promptly transfer and return to the other party all Proprietary Information of the other party (provided that each party may keep one copy of such Proprietary Information of for archival purposes only). Upon the expiration or termination of this Agreement, King shall provide to Depomed, at King's out-of-pocket cost therefor, all Promotional Materials in King's possession (including electronic files of all Promotional Materials); provided, however, that King may destroy any printed copies of Promotional Materials bearing the King Trademarks and may remove the King Trademarks from electronic files of Promotional Materials. + +ARTICLE IX + +REPRESENTATIONS AND WARRANTIES + +Section 9.1 Representations and Warranties of Depomed. Depomed hereby represents and warrants to King as of the date hereof as follows: + +(a) Organization. Depomed (i) is a corporation duly organized, validly existing and in good standing under the laws of the state of California, and (ii) has all necessary corporate power and corporate authority to own its properties and to conduct its business, as currently conducted. + +(b) Authorization. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby are within the corporate power of Depomed, have been duly authorized by all necessary corporate proceedings of Depomed, and this Agreement has been duly executed and delivered by Depomed. + +(c) No Conflict. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby do not: (i) conflict with or result in a breach of any provision of Depomed's organizational documents; (ii) result in a material breach + +Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company's application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934. + +35 + + + + + + + +of any material agreement to which Depomed is party; (iii) result in a violation of any Order to which Depomed is subject; (iv) require Depomed to obtain any material approval or consent from any Governmental Authority or Third Party other than those consents and approvals which have been obtained prior to the date hereof; or (v) violate any Legal Requirement applicable to Depomed in any material respect. + +(d) Enforceability. This Agreement constitutes the valid and binding obligation of Depomed, enforceable against Depomed in accordance with its terms, subject to bankruptcy, reorganization, insolvency and other similar laws affecting the enforcement of creditors' rights in general and to general principles of equity (regardless of whether considered in a proceeding in equity or an action at law). + +(e) Broker. Depomed has not employed any broker, finder, or agent with respect to this Agreement or the transactions contemplated hereby. + +(f) Depomed Intellectual Property. To the knowledge of Depomed, the Promotion and sale of Product in the Territory in accordance with this Agreement will not infringe any patents, trademarks or other intellectual property rights of any Third Party; provided, that Depomed makes no representation as to the King Trademarks. Depomed has the right, power and authority to grant the licenses granted by it hereunder, including the right, power and authority to license to King, pursuant to Section 6.6, all Technology necessary for the manufacture of the Product. + +(g) Litigation. There is no litigation, arbitration proceeding, governmental investigation, action or claims of any kind, pending or, to the knowledge of Depomed, threatened, by or against Depomed or any of its Affiliates relating to the Product or which would reasonably be expected to materially affect Depomed's ability to perform its obligations hereunder. + +(h) Documentation. Depomed has made available to King copies of substantially all clinical data and reports, medical information, competitive information, marketing research and other documentation related to the Product in Depomed's possession that have been requested by King in the course of King's due diligence investigation of the Product. + +(i) Supply. Depomed currently has access to sufficient supplies of Product to perform the manufacturing obligations required by it under this Agreement. All Product will be manufactured with reasonable due care and in conformity with current generally accepted standards and procedures for manufacturing the Product and cGMP. + +(j) Generic Drug Act. Pursuant to the Generic Drug Enforcement Act of 1992, 21 U.S.C. § 335a, as may be amended or supplemented (the "Generic Drug Act"), + +(i) none of Depomed, its Affiliates, or any Person under its direction or control is currently debarred by the FDA under the Generic Drug Act; + +(ii) none of Depomed, its Affiliates, or any Person under its direction or control is currently using or will use in any capacity in connection with the Product any Person that is debarred by FDA under the Generic Drug Act; and + +Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company's application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934. + +36 + + + + + + + +(iii) there have been no convictions of Depomed, its Affiliates, or any Person under its direction or control for any of the types of crimes set forth in the Generic Drug Act within the five years prior to the Effective Date. + +(k) Legal Requirements. None of Depomed, its Affiliates, or Person under its direction or control is currently excluded from a federal or state health care program under Sections 1128 or 1156 of the Social Security Act, 42 U.S.C. §§ 1320a-7, 1320c-5 as may be amended or supplemented. None of Depomed, its Affiliates, or Person under its direction or control is otherwise currently excluded from contracting with the federal government. None of Depomed, its Affiliates, or Person under its direction or control is otherwise currently excluded, suspended, or debarred from any federal or state program. Depomed shall immediately notify King if, at any time during the Term, Depomed, its Affiliates, or any Person under its direction or control is convicted of an offense that would subject it or King to exclusion, suspension, or debarment from any federal or state program. + +(l) NDA Acquisition. Depomed has not committed fraud in relation to the filing or acquisition of an NDA or used unfair methods of competition in connection with such filing or acquisition, including, in either case, in connection with any data supplied by Depomed to the FDA. The parties acknowledge that a breach of this representation is a material failure of a material obligation and is not subject to cure. + +(m) BLS Agreements. Depomed is not in material breach of the BLS Agreements and has not submitted to BLS any notice (written or oral) to the effect that BLS is in breach of the BLS Agreements. Depomed has not received from BLS any notice (written or oral) to the effect that Depomed is in breach of the BLS Agreements. The BLS Agreements are legal, valid, binding, enforceable and in full force and effect in all material respects. + +Section 9.2 Representations and Warranties of King. King hereby represents and warrants to Depomed as of the date hereof as follows: + +(a) Organization. King (i) is a corporation duly organized, validly existing and in good standing under the laws of the state of Tennessee, and (ii) has all necessary corporate power and corporate authority to own its properties and to conduct its business, as currently conducted. + +(b) Authorization. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby are within the corporate power of King, have been duly authorized by all necessary corporate proceedings of King, and this Agreement has been duly executed and delivered by King. + +(c) No Conflict. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby do not: (i) conflict with or result in a breach of any provision of King's organizational documents; (ii) result in a material breach of any material agreement to which King is party; (iii) result in a violation of any Order to which King is subject; (iv) require King to obtain any material approval or consent from any Governmental Authority or Third Party other than those consents and approvals which have been + +Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company's application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934. + +37 + + + + + + + +obtained prior to the date hereof; or (v) violate any Legal Requirement applicable to King in any material respect. + +(d) Enforceability. This Agreement constitutes the valid and binding obligation of King, enforceable against King in accordance with its terms, subject to bankruptcy reorganization, insolvency and other similar laws affecting the enforcement of creditors' rights in general and to general principles of equity (regardless of whether considered in a proceeding in equity or an action at law). + +(e) Broker. King has not employed any broker or finder with respect to this Agreement or the transactions contemplated hereby. + +(f) King Trademarks. To the knowledge of King, the use of the King Trademarks to Promote and sell Product in the Territory in accordance with this Agreement will not infringe any trademarks or other intellectual property rights of any Third Party. + +(g) Litigation. There is no litigation, arbitration proceeding, governmental investigation, action or claims of any kind, pending or, to the knowledge of King, threatened, by or against King or any of its Affiliates relating to the Product or which would reasonably be expected to materially affect King's ability to perform its obligations hereunder. + +(h) Generic Drug Act. Pursuant to the Generic Drug Act, + +(i) none of King, its Affiliates, or any Person under its direction or control is currently debarred by the FDA under the Generic Drug Act; + +(ii) none of King, its Affiliates, or any Person under its direction or control is currently using or will use in any capacity in connection with the Product any Person that is debarred by FDA under the Generic Drug Act; and + +(iii) there have been no convictions of King, its Affiliates, or any Person under its direction or control for any of the types of crimes set forth in the Generic Drug Act within the five years prior to the Effective Date. + +(i) Legal Requirements. None of King, its Affiliates, or Person under its direction or control is currently excluded from a federal or state health care program under Sections 1128 or 1156 of the Social Security Act, 42 U.S.C. §§ 1320a-7, 1320c-5 as may be amended or supplemented. None of King, its Affiliates, or Person under its direction or control is otherwise currently excluded from contracting with the federal government. None of King, its Affiliates, or Person under its direction or control is otherwise currently excluded, suspended, or debarred from any federal or state program. King shall immediately notify Depomed if, at any time during the Term, King, its Affiliates, or any Person under its direction or control is convicted of an offense that would subject it or Depomed to exclusion, suspension, or debarment from any federal or state program. + +Section 9.3 Depomed Disclaimer. EXCEPT AS EXPRESSLY PROVIDED HEREIN, DEPOMED DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, + +Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company's application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934. + +38 + + + + + + + +WITH REGARD TO THE PRODUCT, INCLUDING THE WARRANTY OF MERCHANTABILITY AND WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE. + +Section 9.4 King Disclaimer. EXCEPT AS EXPRESSLY PROVIDED HEREIN, KING DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING THE WARRANTY OF MERCHANTABILITY AND WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE. + +ARTICLE X + +INTELLECTUAL PROPERTY MATTERS + +Section 10.1 Third Party Competition. Expressly excluding Article XIII of this Agreement, nothing in this Agreement shall limit or restrict Depomed's ability to grant non-exclusive patent licenses to patents and patent applications included within the Technology or otherwise covering the Product in connection with the settlement of any pending, threatened or contemplated patent litigation with respect to extended release metformin products commercialized in the Territory prior to the Effective Date, including any such litigation against marketers of metformin products (each such license, an "AcuForm Patent License"). However, in recognition of the parties' agreement to co-exclusively Promote Products, in accordance with the terms and conditions of this Agreement, Depomed agrees that if Depomed or any Affiliate thereof grants to any Affiliate or Third Party a license, covenant not to sue, right of reference, right of supply or other intellectual right (in any case, other than AcuForm Patent Licenses and covenants not to sue and other rights in connection with the grant of AcuForm Patent Licenses for extended release metformin products commercialized in the Territory prior to the Effective Date) related to the manufacture, use, offer for sale, sale, importation, marketing or promotion of any Product that uses Depomed's or its Affiliate's proprietary drug delivery technology currently referred to as the AcuForm technology and described in U.S. Patent Nos. 6,340,475 and 6,635,280 or other drug delivery technology incorporated into any formulation of the Product, including any authorized generic version of any Product covered by any NDA, then the parties shall negotiate in good faith financial adjustments to this Agreement adequate to compensate King for any lost market share attributable to sales of product by or on behalf of such Third Party or Affiliate, taking into account the consideration received by Depomed or its Affiliates for the grant of such rights. + +Section 10.2 Infringement. + +(a) If either party shall learn of a claim or assertion that the manufacture, use or sale of the Product in the Territory infringes or otherwise violates the intellectual property rights of any Third Party or that any Third Party violates the intellectual property rights owned or Controlled by (i) Depomed in the Product and the Depomed Trademarks in the Territory or (ii) King in the King Trademarks, then the party becoming so informed shall promptly, but in all events within fifteen (15) business days thereof, notify the other party to this Agreement of the claim or assertion. + +(b) If warranted in the opinion of Depomed, after consultation with the JCC, Depomed shall take such legal action as is advisable in Depomed's opinion to restrain + +Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company's application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934. + +39 + + + + + + + +infringement of such Depomed patent rights or the Depomed Trademarks. King shall cooperate fully with, and as reasonably requested by, Depomed in Depomed's attempt to restrain such infringement, and Depomed shall reimburse King for its out-of-pocket expenses incurred in providing such cooperation. King may be represented by counsel of its own selection at its own expense in any suit or proceeding brought to restrain such infringement, but Depomed shall have the right to control the suit or proceeding. + +(c) If warranted in the opinion of King, King shall take such legal action as is advisable in King's opinion to restrain such infringement of the King Trademarks. Depomed shall cooperate fully with, and as requested by, King in King's attempt to restrain such infringement, and King shall reimburse Depomed for its out-of-pocket expenses incurred in providing such cooperation. Depomed may be represented by counsel of its own selection at its own expense in any suit or proceeding brought to restrain such infringement, but King shall have the right to control the suit or proceeding. + +ARTICLE XI + +INDEMNIFICATION; LIMITS ON LIABILITY + +Section 11.1 Indemnification. Each party will defend, at its own expense, indemnify and hold harmless the other party and its Affiliates from and against any and all damages, liabilities, losses, costs, and expenses, including reasonable attorneys' fees, arising out of any Third Party claim, suit or proceeding brought against the other party or its Affiliates to the extent such claim, suit, or proceeding is based upon a claim arising out of or relating to (i) any breach or violation of, or failure to perform, any covenant or agreement made by such indemnifying party in this Agreement, unless waived in writing by the indemnified party; (ii) any breach of the representations or warranties made by such indemnifying party in this Agreement; or (iii) the negligence or willful misconduct of the indemnifying party, except (under any of (i) or (ii)) to the extent arising out of the breach, violation, failure, negligence or willful misconduct of the indemnified party. In addition, Depomed will defend, at its own expense, indemnify and hold harmless King and its Affiliates from and against any and all damages, liabilities, losses, costs, and expenses, including reasonable attorneys' fees, arising out of any Third Party claim, suit or proceeding brought against King or its Affiliates to the extent such claim, suit, or proceeding is based upon a claim arising out of or relating to (w) any actions of the Depomed Sales Force, including any false or misleading representations to Professionals, customers or others regarding King or the Product; (x) any agreement between Depomed and BLS; or (y) any claim made by any Person that the manufacture, use or sale of the Product infringes or misappropriates the patent, trademark, or other intellectual property rights of such Person, except with respect to any claim relating to the King Trademarks; and (z) any product liability claim made by any Person with respect to the Product, except to the extent liability is based on a breach by King of Section 4.2. Each party agrees that it shall promptly notify the other in writing of any such claim or action and give the indemnifying party full information and assistance in connection therewith. The indemnifying party shall have the sole right to control the defense and the sole right to settle or compromise any such claim or action, except that the prior written consent of the other party shall be required in connection with any settlement or compromise which could (i) place any obligation on or require any action of such other party; (ii) admit or imply any liability or wrongdoing of such other party; or (iii) adversely affect the goodwill or public image of such + +Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company's application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934. + +40 + + + + + + + +other party. Notwithstanding the foregoing, the indemnified party may participate therein through counsel of its choice, but the cost of such counsel shall be borne solely by the indemnified party. The provisions of this Section 11.1 shall survive the termination of this Agreement for three years (except as to claims as to which a party has notified the other in writing prior to the third anniversary of the termination date of this Agreement, in which event, the indemnifying party's obligations under this Section 11.1 shall survive with respect to any such claim until its resolution). + +Section 11.2 Consequential Damages. NEITHER KING NOR DEPOMED (WHICH FOR THE PURPOSES OF THIS SECTION 11.2 SHALL INCLUDE THEIR RESPECTIVE AFFILIATES, DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS) SHALL HAVE ANY LIABILITY TO THE OTHER FOR ANY PUNITIVE DAMAGES, SPECIAL, INCIDENTAL, CONSEQUENTIAL OR INDIRECT DAMAGES, RELATING TO OR ARISING FROM THIS AGREEMENT, EVEN IF SUCH DAMAGES MAY HAVE BEEN FORESEEABLE; PROVIDED THAT SUCH LIMITATION SHALL NOT APPLY IN THE CASE OF FRAUD OR WILLFUL MISCONDUCT. + +ARTICLE XII + +CONFIDENTIALITY AND PUBLICITY + +Section 12.1 Proprietary Information. Pursuant to this Agreement, a party receiving Proprietary Information from the other, directly or indirectly, will treat such Proprietary Information as confidential, will use such Proprietary Information only for the purposes of this Agreement and will not disclose, and will take all reasonable precautions to prevent the disclosure of, such Proprietary Information to (a) any of its officers, directors, managers, equity holders, employees, agents, representatives, Affiliates or consultants who are not required to know such Proprietary Information or who are not bound by a like obligation of confidentiality or (b) to Third Parties. + +Section 12.2 Disclosures Required by Law. In the event the recipient party is required under applicable Legal Requirements to disclose Proprietary Information of the disclosing party to any Governmental Authority to obtain any Regulatory Approval for the Product, is required to disclose Proprietary Information in connection with bona fide legal process (including in connection with any bona fide dispute hereunder) or is required to disclose Proprietary Information under the rules of the securities exchange upon which its securities are traded, the recipient party may do so only if it limits disclosure to that purpose after giving the disclosing party prompt written notice of any instance of such a requirement in reasonable time for the disclosing party to attempt to object to or to limit such disclosure. In the event of disclosures required under applicable Legal Requirements, the recipient party shall cooperate with the disclosing party as reasonably requested thereby. + +Section 12.3 Publicity. Neither party will originate any publicity, news release, public comment or other public announcement, whether to the press, to stockholders, or otherwise, relating to this Agreement, without the consent of the other party, except for such announcement which, in accordance with the advice of legal counsel to the party making such announcement, is required by law; provided, however, that each party shall be entitled to refer publicly to the + +Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company's application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934. + +41 + + + + + + + +relationship of the parties reflected in this Agreement (i.e., Depomed as the developer of the Product and King as the co-promoter of the Product in the Territory) in a manner that is consistent with the joint press release issued by the parties and that is not damaging to the business or reputation of the other party. Except as otherwise permitted pursuant to the immediately preceding sentence, any party making any announcement which is required by law will, unless prohibited by law, give the other party an opportunity to review the form and content of such announcement and comment before it is made. Either party shall have the right to make such filings with governmental agencies, including the United States Securities and Exchange Commission, as to the contents and existence of this Agreement as it shall reasonably deem necessary or appropriate. The parties have agreed upon the form and content of a joint press release to be issued by the parties promptly following the execution of this Agreement. Once such press release or any other written statement is approved for disclosure by both parties, either party may make subsequent public disclosure of the contents of such statement without the further approval of the other party. The provisions of this Article 12 shall survive termination of the agreement and shall remain in effect until a date three years after the Term of this Agreement. + +ARTICLE XIII + +COMBINATION PRODUCTS; RIGHT OF FIRST NEGOTIATION + +Section 13.1 Combination Products. + +(a) Depomed agrees to grant and hereby grants to King an exclusive option (exercisable at King's sole discretion by providing written notice of intent at any time, but in no event later than 180 days after the Effective Date) to obtain an exclusive license in the Territory to certain of Depomed's proprietary drug delivery technology in combination with both metformin hydrochloride and any other active pharmaceutical ingredients (a "Combination Product License"). If King notifies Depomed in writing within 180 days after the Effective Date that King desires to exercise its option to obtain a Combination Product License, King and Depomed shall promptly commence good-faith negotiations regarding a definitive agreement providing for the Combination Product License, for a period of 60 days or such longer period as may be mutually agreed upon by the parties in writing; and it is agreed that, as part of such good faith negotiations, the parties will discuss, for inclusion in any definitive agreement, appropriate non-compete obligations for each party with respect to any product containing metformin hydrochloride as an active pharmaceutical ingredient. If Depomed and King fail to enter into such a definitive agreement during such period, then Depomed shall thereafter have the right to negotiate and enter into one or more agreements with Third Parties related to Depomed's proprietary drug delivery technology in combination with both metformin hydrochloride and other active pharmaceutical ingredients; provided that, for a period of 6 months, any such agreement may not be on terms and conditions materially more favorable to the Third Party than the terms and conditions last offered by King prior to the termination of discussions with Depomed. + +(b) In the event the parties are not able to enter a definitive agreement with respect to a Combination Product License, pursuant to Section 13.1(a), then prior to the expiration or termination of this Agreement, except pursuant to this Agreement, (i) neither party, nor any + +Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company's application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934. + +42 + + + + + + + +Person controlled by a party, will be entitled to commercially launch in the Territory (either directly or indirectly through a marketing partner) a product containing metformin as an active pharmaceutical ingredient, and (ii) no Affiliate of Depomed will be entitled to commercially launch in the Territory (either directly or indirectly through a marketing partner) a product that (A) contains metformin as an active pharmaceutical ingredient and (B) uses Depomed's or its Affiliate's proprietary drug delivery technology currently referred to as the AcuForm technology and described in U.S. Patent Nos. 6,340,475 and 6,635,280. + +Section 13.2 Right of First Negotiation. Depomed shall notify King in writing in the event that Depomed desires to divest itself of its rights to the Product in the Territory (e.g., by asset sale or product license to a Third Party), or of its rights in the Territory to a product owned or controlled by Depomed containing metformin and another active pharmaceutical ingredient in combination with Depomed's proprietary drug delivery technology incorporated within the Product (currently referred to as the AcuForm technology) (a "Combination Product"). If King notifies Depomed in writing within 30 days after receipt of such notice (the "Evaluation Period") that King is not interested in obtaining all of Depomed's rights in and to the Product or the applicable Combination Product (such rights, "Metformin Product Rights"), or if King fails to notify Depomed of King's interest in obtaining the Metformin Product Rights, in either case prior to the expiration of the Evaluation Period, then Depomed shall have no further obligation to King under this Agreement with respect to the applicable Metformin Product Rights. If King is interested in obtaining the Metformin Product Rights, it shall so notify Depomed in writing prior to the expiration of the Evaluation Period, and upon Depomed's receipt of such notice King and Depomed shall promptly commence good-faith negotiations, for a period of 30 days and such longer period as may be mutually agreed upon by the parties in writing in the event the parties have made material progress in the negotiations (the "Negotiation Period"), regarding the commercially reasonable terms of an agreement pursuant to which King shall obtain the Metformin Product Rights. If Depomed and King fail to enter into an agreement for the Metformin Product Rights prior to the expiration of the Negotiation Period, then Depomed shall thereafter have the right to negotiate and enter into an agreement with a Third Party granting the Metformin Product Rights to a Third Party; provided that, for a period of 6 months, any such agreement may not be on terms and conditions materially more favorable to the Third Party than the terms and conditions last offered by King prior to the termination of discussions with Depomed. The provisions of this Section 13.2 shall not apply to, and Depomed shall have no obligation to King under this Section 13.2 in respect of, any acquisition of Depomed by a Third Party, any merger or consolidation with or involving Depomed, any acquisition by a Third Party of any material portion of the stock of Depomed, or any acquisition by a Third Party of a material portion of the assets of Depomed in addition to the Product or any Combination Product; provided that such Third Party must remain bound by the terms and conditions of this Agreement, including this Section 13.2. + +ARTICLE XIV + +NOTICES + +Section 14.1 Notices. All notices required or permitted hereunder shall be given in writing and sent by facsimile transmission (with a copy sent by first-class mail), or mailed + +Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company's application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934. + +43 + + + + + + + +postage prepaid by certified or registered mail (return receipt requested), or sent by a nationally recognized express courier service, or hand-delivered at the following address: + +If to Depomed: + +Depomed, Inc. 1360 O'Brien Drive Menlo Park, California 94025 Attention: President Fax No.: (650) 462-9991 + +With a copy to: + +Heller Ehrman LLP 275 Middlefield Road Menlo Park, CA 94025 Attention: Julian Stern Fax No: (650) 324-0638 + +If to King: + +King Pharmaceuticals, Inc. 501 Fifth Street Bristol, Tennessee 37620 Attn: Legal Affairs Department Facsimile: (423) 990-2566 + +All notices shall be deemed made upon receipt by the addressee as evidenced by the applicable written receipt. + +ARTICLE XV + +INSURANCE + +Section 15.1 Insurance. + +(a) During the Term and for a period of two (2) years after any expiration or termination of this Agreement, each party shall maintain (i) a commercial general liability insurance policy or policies with minimum limits of $[***] per occurrence and $[***] in the aggregate on an annual basis and (ii) a product liability insurance policy or policies with minimum limits of $[***] per occurrence and $[***] in the aggregate on an annual basis; provided that the minimum product liability policy limits set forth above shall be increased to at least $[***] per occurrence and $[***] in the aggregate on an annual basis no later than December 31, 2006. Furthermore, Depomed will undertake to direct its insurance broker to conduct an analysis to determine the appropriate level of product liability insurance with respect to the Product to be maintained by Depomed, which analysis will be conducted prior to Depomed's next insurance renewal, currently scheduled to occur in October 2006. Such analysis will include, among other considerations, product risk characteristics, product litigation history, + +Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company's application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934. + +44 + + + + + + + +comparable company coverage and insurance availability. Depomed will share such analysis with King + +(b) Upon request, each party shall provide certificates of insurance to the other evidencing the coverage specified herein. Neither party's liability to the other is in any way limited to the extent of its insurance coverage. + +ARTICLE XVI + +MISCELLANEOUS + +Section 16.1 Headings. The titles, headings or captions and paragraphs in this Agreement are for convenience only and do not define, limit, extend, explain or describe the scope or extent of this Agreement or any of its terms or conditions and therefore shall not be considered in the interpretation, construction or application of this Agreement. + +Section 16.2 Severability. In the event that any of the provisions or a portion of any provision of this Agreement is held to be invalid, illegal, or unenforceable by a court of competent jurisdiction or a governmental authority, such provision or portion of provision will be construed and enforced as if it had been narrowly drawn so as not to be invalid, illegal, or unenforceable, and the validity, legality, and enforceability of the enforceable portion of any such provision and the remaining provisions will not be adversely affected thereby. + +Section 16.3 Entire Agreement. This Agreement, together with the schedules and exhibits hereto and the Confidentiality Agreement, all of which are incorporated by reference, contains all of the terms agreed to by the parties regarding the subject matter hereof and supersedes any prior agreements, understandings, or arrangements between them, whether oral or in writing. + +Section 16.4 Amendments. This Agreement may not be amended, modified, altered, or supplemented except by means of a written agreement or other instrument executed by both of the parties hereto. No course of conduct or dealing between the parties will act as a modification or waiver of any provisions of this Agreement. + +Section 16.5 Counterparts. This Agreement may be executed in any number of counterparts, each of which will be deemed an original as against the party whose signature appears thereon, but all of which taken together will constitute but one and the same instrument. + +Section 16.6 Waiver. The failure of either party to enforce or to exercise, at any time or for any period of time, any term of or any right arising pursuant to this Agreement does not constitute, and will not be construed as, a waiver of such term or right, and will in no way affect that party's right later to enforce or exercise such term or right. + +Section 16.7 Force Majeure. + +(a) In the event of any failure or delay in the performance by a party of any provision of this Agreement due to acts beyond the reasonable control of such party (such as, for example, fire, explosion, strike or other difficulty with workmen, shortage of transportation equipment, + +Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company's application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934. + +45 + + + + + + + +accident, act of God, declared or undeclared wars, acts of terrorism, or compliance with or other action taken to carry out the intent or purpose of any law or regulation) (a "Force Majeure Event"), then such party shall have such additional time to perform as shall be reasonably necessary under the circumstances. In the event of such failure or delay, the affected party will use its diligent efforts, consistent with sound business judgment and to the extent permitted by law, to correct such failure or delay as expeditiously as possible. In the event that a party is unable to perform by a reason described in this Section 16.7, its obligation to perform under the affected provision of this Agreement shall be suspended during such time of nonperformance. + +(b) Neither party shall be liable hereunder to the other party nor shall be in breach for failure to perform its obligations caused by a Force Majeure Event. In the case of any such event, the affected party shall promptly, but in no event later than 10 days of its occurrence, notify the other party stating the nature of the condition, its anticipated duration and any action being taken to avoid or minimize its effect. Furthermore, the affected party shall keep the other party informed of the efforts to resume performance. After sixty (60) days of such inability to perform, the parties agree to meet and in good faith discuss how to proceed. In the event that the affected party is prevented from performing its obligations pursuant to this Section 16.7 for a period of six (6) months, the other party shall have the right to terminate this Agreement pursuant to the provisions of Sections 8.4(b). + +Section 16.8 Successors and Assigns. Subject to Section 16.9, this Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns permitted under this Agreement. + +Section 16.9 Assignment. This Agreement and the rights granted herein shall not be assignable by either party hereto without the prior written consent of the other party. Any attempted assignment without consent shall be void. Notwithstanding the foregoing, a party may transfer, assign or delegate its rights and obligations under this Agreement without consent to (a) an Affiliate or (b) a successor to all or substantially all of its business or assets of the assigning party to which this Agreement relates, whether by sale, merger, consolidation, acquisition, transfer, operation of law or otherwise or (c) in the case of either party, to one or more financial institutions providing financing to such party pursuant to the terms of a security agreement relating to such financing. In connection with any assignment, or Subcontracting pursuant to which a Third Party Sales Representative is engaged to Promote the Product, of this Agreement or any of the rights granted herein pursuant to this Section 16.9, the assignor, or party Subcontracting to another, shall ensure that the assignee, or Subcontractor, represents and warrants the matters set forth in Sections 9.1(j) and (k) (in substantially the same form as set forth in Sections 9.1(j) and (k)), where Depomed (or one of its successors or assigns) is the assignor or Subcontracting party, or Sections 9.2(h) and (i) (in substantially the same form as set forth in Sections 9.2(h) and (i)), where King (or one of its successors or assigns) is the assignor or Subcontracting party. In connection with any Subcontracting pursuant to which a Third Party will manufacture the Product, the party Subcontracting to another shall use its commercially reasonable efforts to cause the Subcontractor to represent and warrant the matters set forth in Sections 9.1(j) and (k) (in substantially the same form as set forth in Sections 9.1(j) and (k)). Neither party shall knowingly engage any Third Party appearing on the FDA's debarment list or the list of excluded individuals/entities of the Office of Inspector General of the Department of Health and Human Services to perform, or assist such party in the performance of, its obligations + +Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company's application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934. + +46 + + + + + + + +under this Agreement, and each party shall review each such list prior to engaging any such Third Party. + +Section 16.10 Construction. The parties acknowledge and agree that: (a) each party and its representatives have reviewed and negotiated the terms and provisions of this Agreement and have contributed to its revision; and (b) the terms and provisions of this Agreement will be construed fairly as to each party hereto and not in favor of or against either party regardless of which party was generally responsible for the preparation or drafting of this Agreement. Unless the context of this Agreement otherwise requires: (i) words of any gender include each other gender; (ii) words using the singular or plural number also include the plural or singular number, respectively; (iii) the terms "hereof," "herein," "hereby," and derivative or similar words refer to this entire Agreement; (iv) the terms "Article," "Section," "Exhibit," "Schedule," or "clause" refer to the specified Article, Section, Exhibit, Schedule, or clause of this Agreement; (v) "or" is disjunctive but not necessarily exclusive; and (vi) the term "including" or "includes" means "including without limitation" or "includes without limitation." Whenever this Agreement refers to a number of days, such number shall refer to calendar days unless business days are specified. + +Section 16.11 Governing Law. This Agreement will be construed under and in accordance with, and governed in all respects by, the laws of the State of New York, without regard to its conflicts of law principles. + +Section 16.12 Equitable Relief. Each party acknowledges that a breach by it of the provisions of this Agreement may not reasonably or adequately be compensated in damages in an action at law and that such a breach may cause the other party irreparable injury and damage. By reason thereof, each party agrees that the other party is entitled to seek, in addition to any other remedies it may have under this Agreement or otherwise, preliminary and permanent injunctive and other equitable relief to prevent or curtail any breach of this Agreement by the other party; provided, however, that no specification in this Agreement of a specific legal or equitable remedy will be construed as a waiver or prohibition against the pursuing of other legal or equitable remedies in the event of such a breach. Each party agrees that the existence of any claim, demand, or cause of action of it against the other party, whether predicated upon this Agreement, or otherwise, will not constitute a defense to the enforcement by the other party, or its successors or assigns, of the covenants contained in this Agreement. + +Section 16.13 Relationship Between Parties. The parties hereto are acting and performing as independent contractors, and nothing in this Agreement creates the relationship of partnership, joint venture, sales agency, or principal and agent. Neither party is the agent of the other, and neither party may hold itself out as such to any other party. All financial obligations associated with each party's business will be the sole responsibility of such party. + +[Signature page follows] + +Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company's application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934. + +47 + + + + + + + +IN WITNESS WHEREOF, the parties have caused this Agreement to be executed in duplicate on the day and year first above written. DEPOMED, INC. By:/s/ John W. Fara Name:John W. Fara Title: President and CEO KING PHARMACEUTICALS, INC. By:/s/ Brian A. Markison Name:Brian A. Markison Title: President and CEO + +Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company's application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934. + + + + + + + +SCHEDULES + +Schedule 1.33 — Depomed Trademarks + +Schedule 1.54 — King Trademarks + +Schedule 1.56 — Initial Launch Plan + +Schedule 3.2 — JCC Members + +Schedule 4.5 — Advertising/Marketing/Educational Expenses + +Schedule 6.3 — Volume Forecast + +Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company's application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934. + + + + + + + +Schedule 1.33 + +Depomed Trademarks Mark Serial/Registration Numbers GLUMETZA Ser. No. 78340355 DEPOMED Reg. No. 2112593 DEPOMED (word and design mark) Ser. No. 78781903 ACUFORM Ser. No. 78781863 + +Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company's application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934. + + + + + + + +Schedule 1.54 + +King Trademarks Mark Serial/Registration Numbers KING PHARMACEUTICALS Reg. No. 2871392 KING PHARMACEUTICALS Reg. No. 2927079 KING PHARMACEUTICALS and Design Ser. No. 78-842125 Design Mark Ser. No. 78-842009 + +Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company's application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934. + + + + + + + +Schedule 1.56 + +Glumetza Initial Launch Plan + +Market Overview + +[***] affects [***] people in the US, and [***] have shown that [***]. The cost [***] or roughly [***], is spent [***] of the [***] with [***]. Of this, [***] is spent [***] that can [***] of the [***]. + +[***] has been well [***] to its [***] at [***] and its [***]. However, [***] have [***] frequently need [***] quickly, usually the [***]. Still, [***] per year. And although [***], there is an [***]. + +Product Background + +Glumetza[***] a full [***]. Although the [***]. + +• [***] were able to [***] + +• [***] of the [***] — significantly more than the [***] + +• Several [***] + +o Less [***] than [***] + +o Similar [***], but with [***] + +o [***] in minimal [***] + +Launch Overview + +Glumetza product will be [***] the first [***] by the 2nd or 3rd [***]. The [***], which will begin [***], and such [***]. The product [***] on called [***]. + +Positioning + +Glumetza is the [***] + +> Reaching [***] is a [***] — [***] is to [***] the most [***] from [***] + +> [***] various [***] that [***] in the [***] + +> Represents the [***] that [***], and [***] to the [***] + +Key areas of focus + +1. [***] + +[***]AcuFormTM as [***] factor: Glumetza [***] Depomed's AcuForm technology which is the [***] for its [***]. It has several [***] its better [***] [***]. [***]Glumetza[***] better [***] than all [***]. + +In [***] research, [***] onto the [***] as the reason to [***]Glumetza [***] better than [***]. Furthermore, [***] were willing [***] on how the [***] better [***]. + +[***] Need: [***] is commonly accepted as the [***] to its [***]. However, [***] how it [***], such as [***]. Ultimately the [***]. + +Our [***] on the [***]. At its [***] off a [***] for [***], even more [***]. + +Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company's application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934. + + + + + + + +[***]Glumetza will [***], and emphasize that its [***]. [***]Glumetza[***] that demonstrates [***], and we will [***]. + +[***], we will apply [***] and [***] to describe [***], yet do not [***]. + +Glumetza[***] goal: [***] goals is [***] and Glumetza will its [***] on how it [***]. Significantly [***]Glumetza (without any [***], because Glumetza[***]. + +Goal [***]: Together with [***] that [***] goals, [***] plan to [***]. One idea is to [***]Glumetza[***]. + +[***] the [***] + +[***]: Depomed has [***], to assist [***] that are [***] that is [***]. + +[***]: While Glumetza[***] have data that [***], where appropriate, [***]. + +Not only will the [***], but also will [***]. + +[***]: Glumetza already has [***]. We expect another [***]. + +[***]: Years of [***] for [***] that will [***]. Healthcare [***] will be done [***] is the [***] for which [***]. + +2. Point of Sale + +[***]: Glumetza currently has [***]. We anticipate [***], which should [***]. We plan to [***] in order to [***]. + +To support the [***], we have [***]Glumetza[***] emphasizes the [***] [***] — particularly in [***]. + +Depomed has [***] with the [***]. + +[***]: Glumetza[***]. There are [***]Glumetza. We plan to [***] through various [***], as determined [***]. We will [***] to encourage [***]. + +Glumetza is already [***], however we are [***]Glumetza receives a [***]. + +[***]: We have initiated [***] that will [***] will be [***]. + +Other launch plans + +Pricing: The [***] price range will be [***]. The pricing [***]. These [***], will further refine the price [***]. + +[***]: Depomed will have [***] with the [***]. The first [***] will be the [***] King Pharmaceuticals [***] to have [***] upon the [***]Glumetza. + +[***]: We are preparing a Glumetza[***] that [***]Glumetza and its [***]. This [***] general [***]. + +[***]: [***] will be a [***] of the [***] of the [***]. While the exact [***] to be [***] have begun [***]. + +[***]: Glumetza will be [***]. + +Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company's application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934. + +2 + + + + + + + +[***]: [***] over the [***]. + +Launch [***]: [***] will take [***], with many [***]. We expect [***]. + +[***]: [***] during [***][***]. [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] + +[***] [***] [***] [***] [***] + + + +[***] [***] [***] [***] [***] [***] [***] [***] + +Budget: The budget for the Launch Plan will [***] with the [***]the parties [***], with the [***]of which Depomed [***] King. The parties [***] will not [***]; provided that [***] Depomed [***]and included with the [***] will determine a [***]. + +Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company's application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934. + +3 + + + + + + + +Schedule 3.2 + +Depomed Initial JCC Representatives: + +[***] + +King Initial JCC Representatives: + +[***] + +Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company's application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934. + + + + + + + +Schedule 4.5 Year Advertising/Marketing/Educational Expenses 2006 $ [***] 2007 $ [***] 2008 $ [***] 2009 $ [***] 2010 $ [***] 2011 $ [***] + +Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company's application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934. + + + + + + + +Schedule 6.3 + +Volume Forecast + +Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company's application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934. + + + + + + + +Glumetza[***] Forecast for the 1st 12 Months after Launch (000s) Aug-06 Sep-06 Oct-06 Nov-06 Dec-06 Jan-07 Feb-07 Mar-07 Apr-07 May-07 Jun-07 Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07 Demand Fcst in [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] Adj to Demand Fcst [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] Ex-Factory Fcst in [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] Projected Inventory on Hand [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] Projected Inventory MOHs [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] 1st 12 Mths 2006 Total Total [***] [***] [***] [***] [***] [***] + +Assumptions: Stock in Quantity: [***] [***] = [***] Wholesalsers will reduce + +Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company's application requesting confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934. \ No newline at end of file diff --git a/full_contract_txt/KIROMICBIOPHARMA,INC_04_08_2020-EX-10.28-JOINT VENTURE AGREEMENT.txt b/full_contract_txt/KIROMICBIOPHARMA,INC_04_08_2020-EX-10.28-JOINT VENTURE AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..a18b2739120d5688070b9cbbf19e3b8717f6d664 --- /dev/null +++ b/full_contract_txt/KIROMICBIOPHARMA,INC_04_08_2020-EX-10.28-JOINT VENTURE AGREEMENT.txt @@ -0,0 +1,277 @@ +Exhibit 10.28 + +[*] Certain information in this document has been omitted from this exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed. + +JOINT VENTURE AGREEMENT + +BETWEEN + +KIROMIC BIOPHARMA Inc., a Delaware Company, Fannin South Professional Building, 7707, Fannin St. Suite 140, Houston TX 77054 USA, in person of the Legal Representative of the Chief Executive Officer dr. Prof. Maurizio Chiriva Internati, PhD + +AND + +MOLIPHARMA S.R.L. an Italian Company stated in Campobasso, Via del Castello n. 3, FISCAL CODE AND VAT NUMBER: 01655870705 in person of the Legal Representative Avv. Giovanni Meliadò; + +each a Party and, together, the Parties. + +WHEREAS A. Kiromic is a Company active in the fields of: + +Research and development, in the field of immunotherapy, immuno-oncology, infectious diseases, cardiovascular disease, auto immune diseases, inflammatory diseases and gene editing that develops highly effective and safe immuno-therapies to address and defeat different types of cancer and serious diseases and unmet medical needs; + +Research and development of Artificial Intelligence technologies and a multi-purpose computational platform capable of identifying new cancer immunological targets for T and B cells. B. Molipharma s.r.l. is a spin-off of the Università Cattolica del Sacro Cuore and active in the fields of: + +research, development, production and marketing, also through licensing, of new products, synthetic drugs and applications, new technologies and innovative process and product applications in the pharmaceutical, pharmacological, clinical and therapeutic fields, also -1- + + + + + +protectable under the regulations for intellectual property, with the consequent possibility of exploitation and industrial exploitation; + +analysis, research, reports, pre-clinical and clinical studies, consultancy, technical development activities, on its own behalf or for third parties, in the field of genetic, muscular, immune, haematological, oncological, gynecological, urological pathologies C. The Parties wish to collaborate for the common purposes about the research and development of at least two clinical trial programs: a. Pre-clinical validation and clinical trial development of several targets in different clinical indications, and particularly in Ovarian Cancer b. Pre-clinical validation and clinical trial development of countermeasures against Covid19 Sars CoV2 outbreak, including oral vaccines, as well as therapeutic and diagnostic solutions. + +NOW, THEREFORE, the Parties agree as follows: 1. SCOPE AND AREAS OF THE JV + +The Parties wish to collaborate to the Joint Venture ("JV"), with their respective efforts and possibilities of support, assistance, advice, co-operation, and resources for the common purposes about the research and development of the pre-clinical and clinical trial programs mentioned above. 2. PARTIES OBLIGATIONS + +Notwithstanding as referred to the point 1, the Parties wish to collaborate to the JV in the respective R&D areas; for the firsts two clinical trial programs, they undertake to collaborate as follow: + +Topic 1. Clinical trial program in Oncology. + +With regard to the JV between the Parties about the Clinical trial program in Oncology, the respective obligations are regulated below: - Molipharma, through a separate agreement with UCSC, undertakes to provide the tissue samples and parts of tumors; - Molipharma undertakes to make UCSC the site for clinical trials and in particular Molipharma undertakes to make UCSC the main site for clinical trials in cancer using -2- + + + + + +the specific isoforms CAR (Chimeric Antigen Receptor) and/or check inhibitor technology, Exhibit A - Kiromic is committed to bear all costs necessary for R&D, including all clinical development costs, according to the terms and conditions set out in point n. 3; + +Topic 2. Clinical trial program in Covid19 Sars CoV2 Vaccine + +With regard to the JV between the Parties about the clinical trial program in Covid19 Sars CoV2 Vaccine, the respective obligations are regulated below: - Kiromic is committed to sharing patents and know-how in relation to the following products which will be licensed to the JV exclusively for the application in the specific and limited field of sars-cov-2 threat and relative disease COVID-19: (i) VAPAs-Viral Antigen Proteins Associated © (Kiromic-2020) derived from Diamonds AI - Artificial Intelligence Platform for Discovery and Prediction Antigen Protein (ii) Platform of DC Vaccines (dendritic cell vaccine) - for therapeutic purposes - nominated BSK 01; (iii) Oral Delivery Platform for Prophylactic Vaccine - accompanying immuno-boosting therapy - therapeutic vaccine administration - nominated BSK02 (iv) Other patents eventually applicable in the specific field. - Molipharma provides skills, competencies, relationships, financial resources and means for development; - Molipharma is committed to ensuring that the development and testing of the vaccine and any associated clinical trial studies are carried out through the specialized structures of the UCSC. - Molipharma provides skills, competencies, relationships, financial resources and means for development; - Molipharma is committed to ensuring that the development and testing of the vaccine and any associated clinical trial studies are carried out through the specialized structures of the UCSC. - Molipharma undertakes to make UCSC the site for clinical trials and in particular - Molipharma, through a separate agreement with UCSC, undertakes to provide the biological samples necessary to carry out the Research and Development, such as, but not limited, blood, serum, saliva, clinical data, tissues samples of living and dead patients etc ; - Molipharma is committed to bear all costs necessary for R&D, including all clinical development costs, according to the terms and conditions set out in point n. 3; 3. STEERING COMMITTEE AND TECHNICAL CO-ORDINATION COMMITTEE + +The Parties agree to establish a "Steering Committee", which will remain in force for the entire period of the JV, composed of two members for each Company [e.g. Americo Cicchetti - To Be Nominated and Maurizio Chiriva - Gianluca Rotino], with the task of identifying the strategic objectives of the collaboration and providing general guidelines. + +The Steering Committee shall appoint, within 30 days of the signature of this JV, a Technical Committee composed of one representative of each of the Parties in relation to each specific -3- + + + + + +clinical trial program, which shall have the function of coordinating the technical and administrative activities to be undertaken in the framework of this JV. + +The tasks assigned to the Technical Committee are to: a. propose any new project to be developed to the Steering Committee; b. define the specific guidelines for each project and check the execution processes and timelines implemented under this JV; c. check at least quarterly the progress of the clinical development programs, the correct implementation of the commitments undertaken, including the economic ones; in the event of failure by one of the Parties to comply with these commitments, the Technical Committee shall promptly inform the Steering Committee; d. report, every six months, to the Steering Committee on the activities carried out and the results achieved under the Agreement; e. propose to the Steering Committee any changes in the projects referred to in point 2 and/or any changes in the economic commitments made and their utilization. + +The parties undertake, within 30 days from the signing of this JV, to grant a specific written and notarial mandate, which gives Molipharma the power to represent the JV vis-à-vis third parties for the performance of ordinary and extraordinary acts deemed necessary for the quickest and most profitable achievement of the objectives set forth in point 2, including the right to enter into partnership and/or collaboration contracts with external entities. 4. JV FUND + +Kiromic undertakes to financially support the entire research program in oncology; + +By way of example, Kiromic undertakes to finance the following items: a. The expenses for the supply of equipment and materials, as well as those related to their ordinary and extraordinary maintenance, necessary for the development of the program; b. Medical and subsistence expenses in favor of the patients who will be selected for the clinical trials and any expenses necessary for third party vendors (such as Contract Research Organizations, central labs, couriers, etc…) necessary for planning and executing such clinical trials; -4- + + + + + +c. Funding of scholarships and/or research grants for the staff who will be assigned to the research and development of the projects referred to in point 2; d. Funding of educational or training initiatives. + +Subsequent contributions will be provided by Kiromic to the common fund upon presentation of individual purchase orders and/or proofs of expenditure —which will be paid for each time starting upon the successful IPO (Initial Public Offering) of the Kiromic's common shares. + +Molipharma undertakes to financially support the entire research program against sars-cov-2. + +By way of example, Molipharma undertakes to finance the following items, either directly or indirectly through research grants or other non-diluting funds, awarded by European and/or Italian Institutions: a. The expenses for the supply of equipment and materials, as well as those related to their ordinary and extraordinary maintenance, necessary for the development of the program; b. Medical and subsistence expenses in favour of the patients who will be selected for the clinical trials and any expenses necessary for third party vendors (such as Contract Research Organizations, central labs, couriers, etc…) necessary for planning and executing such clinical trials; c. Funding of scholarships and/or research grants for the staff who will be assigned to the research and development of the projects referred to in point 2; d. Funding of educational or training initiatives. + +Subsequent contributions will be provided by Molipharma to the common fund upon presentation of individual purchase orders and/or proofs of expenditure - which will be paid for each time. 5. STAFF ACCESS + +Molipharma allows Kiromic's staff in charge of the above research programs to have access to its own structures, identified from time to time, as well as the possible use of its own equipment, in compliance with the law provisions and the regulations therein applied, in compliance and observance of the protection, safety and health standards therein applied. + +Alternatively, Kiromic allows Molipharma' staff in charge of the above programs to have access to its own structures and to its laboratory equipment, identified from time to time, in compliance -5- + + + + + +with the law provisions and the regulations therein applied, in compliance and observance of the protection, safety and health standards therein applied. + +The staff of each of the Parties to this JV who, by this Agreement, have access to the structures and equipment of the other company, shall be liable for any damage caused to such equipment and to third parties. + +The Parties shall provide civil liability insurance cover to their own personnel with respect to accidents and damages charged to them. 6. INTELLECTUAL PROPERTY RIGHTS AND PROHIBITION OF TRANSFER TO THIRD PARTIES + +The Parties undertake to promptly notify each other about the achievement of the Scope, as mentioned in point 2 ("the Results") , that may be subject to Industrial and Intellectual Property Rights, within 30 days from the achievement of such Results and to cooperate in the evaluation of the existence of the necessary requirements for the patenting/registration of such Results. + +The Industrial Property Rights on the Results, as well as the Intellectual Property Rights realized in the research activities covered by this JV, are due jointly to the parties in equal shares (50% for each Party), without prejudice to the possibility of agreeing in writing, during the course of every specific activity, about the modification of the respective shares of co-ownership, based upon the actual contribution of each of the Parties to the research activities, and also without prejudice to the recognition of the intellectual rights due to each inventor pursuant to current legislation. + +The parties will agree, by separate agreement, on the specific discipline relating to the management of rights in co-ownership; it is agreed that Molipharma may always use the Results for teaching and research purposes. + +If one of the Parties has no interest in applying for a patent, it will inform the other Party within 30 days from the communication of the Results referred to in paragraph 1. In this case the Party concerned shall have the right to proceed with the submission of the application on the Results at its own expense and in co-ownership with the other Party, subject to written notice. The Party which is not interested in the application shall undertake to transfer its own share of ownership to the other Party, free of charge once it has obtained the patent title. -6- + + + + + +Each Party is the owner of the Industrial and Intellectual Property Rights relating to its own: a. "Background": All knowledge, information and intangible assets protected under national Law System and international intellectual and industrial property laws and regulations, created or otherwise obtained by a Party prior to the begin of the activity covered by this Agreement. b. "Sideground": All knowledge, information and intangible property protected under national Law System and international intellectual and industrial property laws and regulations made or otherwise obtained by a Party during the term of this Agreement but not in the execution of this Agreement. + +Notwithstanding the foregoing, the Parties shall grant each other, free of charge, a non-exclusive right to use their respective Backgrounds in connection with the activities which will be carried out by this JV and by reason of their execution. This right is granted for the duration of the Agreement only, with the express denial of sublicensing or transferring it to any third party for any reason whatsoever. + +The Sideground of each Party may not be used by the other Party without the express written authorization of the owner. + +The sale, licensing or any other type of agreement providing for the transfer, even temporary, to third parties of intellectual and industrial property rights deriving from the research programs referred to in point 2 is excluded, unless there is prior agreement between the Parties. + +Kiromic assigns to Molipharma all the rights of publication of the research, unless they are considered confidential for patenting. To this purpose, before each publication, Molipharma will send in advance the text of the publication to Kiromic for approval. The consent of Kiromic will be tacitly granted after 30 days from receipt of the request for authorization of disclosure. + +The same procedure indicated in the previous paragraph will be also applied to Kiromic in case it wants to perform a publication on the research. 7. ECONOMIC RIGHTS + +The commercial rights arising from the research programs referred to in point 2 are divided as follows: + +Oncology + +All economics rights are solely owned by Kiromic Biopharma. + +Kiromic will grant to Molipharma the follows royalties: - *% of the realized turnover by the marketing of Ovarian Cancer research results in Italy; -7- + + + + + +- *% of the realized turnover by the marketing of Ovarian Cancer research results in Europe. + +Sars-cov-2 - The economic rights for Europa will be an exclusive ownership of Molipharma - The economic rights in the U.S. will be an exclusive ownership of Kiromic. - For the rest of the world, the economic rights will be divided as follows: *% Kiromic; *% Molipharma. 8. DURATION + +This JV Agreement shall become effective on the signing date and shall have a duration of * years, extendable for a further * years, unless notice of non- renewal is sent one year before the natural expiry date. + +This JV shall automatically cease to be effective on the date when the JV is wound-up or is the target of any kind of insolvency procedure. + +Termination of this JV Agreement shall not relieve the Parties of their obligations due at the time of such termination, nor shall such termination prejudice any claim of either Party accrued, or to accrue, on account of any default or breach by the other Party. 9. WITHDRAWAL AND RESOLUTION + +The Parties may withdraw from this JV only for serious and justified reasons or by mutual consent. The withdrawal must be exercised by written notice, to be sent to the other Party by certified letter or PEC, with minimum notice of 30 days. + +Withdrawal or termination by mutual consent shall only have effect for the future and shall not affect the part of the Agreement already executed. + +In case of withdrawal according to the previous paragraph, Kiromic is obliged to cover Molipharma for the expenses incurred and for those committed, related to the research programs being developed, until receipt of the notice of withdrawal. -8- + + + + + +Pursuant to art. 1456 of the Italian Civil Code, this JV shall be terminated by right in the following cases: a. Breach of confidentiality obligations; b. Unilateral and unagreed variation of the Scope of the JV; c. Failure of each Party to comply with its obligations, including the economic commitments. + +The Party concerned must communicate by registered letter with return receipt, or PEC, its intention to avail itself of the termination clause. + +In the event of termination of the Agreement pursuant to this clause or, in any case, to termination due to Kiromic's default, the same is required; in addition, Kiromic undertakes to the reimbursement of expenses incurred and/or committed by Molipharma, and agrees to recognize financially the additional damage suffered by Molipharma by such a default. + +Upon termination of the contract, the agreement set forth in clause 5 ("Intellectual property rights and prohibition of transfer to third parties") and clause 6 ("Economic rights") will remain into force. 10. TERMINATION + +Each Parties shall have the right to terminate its obligations, if one of the following events occurs: the Company (i) applies for or consents to the appointment of a receiver, trustee, custodian or liquidator of itself or substantially all of its property, (ii) becomes subject to the appointment of a receiver, trustee, custodian or liquidator of itself or substantially all of its property, (iii) makes an assignment for the benefit of creditors, (iv) institutes any proceedings under or state bankruptcy, reorganization, receivership, insolvency or other similar law affecting the rights of creditors generally, or files a petition or answer seeking reorganization or an arrangement with creditors to take advantage of any insolvency law, or files an answer admitting the material allegations of a bankruptcy, reorganization or insolvency petition filed against it, or (v) becomes subject to any involuntary proceedings under the state bankruptcy, reorganization, receivership, insolvency or other similar law affecting the rights of creditors generally, when proceeding is not dismissed within thirty (30) days of filing, or have an order for relief entered against it in any proceedings under Bankruptcy Code. -9- + + + + + +11. SENSITIVE INFORMATION + +The Parties shall keep confidential any information exchanged between them in connection with the negotiation, execution and performance of this JV Agreement; it is agreed that these confidentiality obligations shall not apply with respect to any information which: (a) becomes generally available to the public other than as a result of an unauthorised disclosure by a Party, (b) was available to a Party prior to its disclosure by the other Party, (c) is disclosed pursuant to a requirement of a court or other public authority or for the purpose of enforcing the rights and obligations set forth in this Agreement. 12. GENERAL PROVISIONS + +All notices, demands, requests or other communications which may be or are required to be given, served or sent by any Party to any other Party pursuant to this JV Agreement shall be in writing and shall be hand delivered, sent by DHL (or by comparable international air courier) or mailed by first- class, registered or certified mail, return receipt requested, postage prepaid, or transmitted by telecopy, and shall be addressed as follows: (i) If to KIROMIC: + +To the attention of the managing director + +Telephone (ii) if to MOLIPHARMA: + +To the attention of Mr. Giovanni Meliadò + +Telephone + +Each Party may designate by written notice an address to which any notice, demand, request or communication may thereafter be so given, served or sent. + +Each of the communications mentioned herein, given in the way described herein, shall be deemed sufficiently given, served, sent, received or delivered for all purposes at the time it is received, if made by hand delivery, or at the time indicate in the return receipt if made -10- + + + + + +by mail or courier, or at the time indicated in the answer-back of the telefax machine of the receiving Party in case it is made by telefax. + +No delay or failure on the part of any Party hereto in exercising any right, power or privilege under this JV Agreement or under any other documents in connection with or pursuant to this Agreement shall impair any such right, power or privilege or be construed as a waiver of any default or any acquiescence therein. No single or partial exercise of any such right, power or privilege shall preclude the further exercise of such right, power or privilege, or the exercise of any other right, power or privilege. No waiver shall be valid against any Party hereto unless made in writing and signed by the Party against whom enforcement of such waiver is sought and then only to the extent expressly specified therein. + +If any part of any provision of this JV Agreement or of any other document given pursuant to or in connection with this JV Agreement shall be invalid or unenforceable in any respect, such part shall be ineffective to the extent of such invalidity or unenforceability only, without in any way affecting the remaining parts of such provision or the remaining provisions. The void provision shall be substituted by a valid provision, the nature and economic consideration of which comes as close as possible to the void provision. In the event that matters relevant to the subject matter of this JV Agreement are not addressed herein, the Parties shall negotiate in good faith to agree a provision or provisions which, given the nature and economic considerations of the JV Agreement and related agreements, the Parties would have agreed upon had they considered the matter at the time of the execution of this JV Agreement. If the invalidity or unenforceability of any provision hereof is due to the excessive scope of such provision, such provision shall be deemed valid and enforceable to the greatest extent permitted by applicable law. + +This JV Agreement cannot be assigned by a Party, also as a result of the transfer of a business as a going concern, of a merger, of a de-merger or of a spin-off, without the prior written consent of the other Party. Subject to the above, this JV Agreement shall be binding upon and shall inure to the benefit of the Parties hereto and their respective successors, heirs, executors, administrators, legal representatives and assigns. + +Each of the Parties hereby agrees to take or cause to be taken such further actions, to make and receive or cause to be made and received any legal declarations, execute, deliver and file or cause to be executed, delivered and filed such further documents, and will obtain -11- + + + + + +such consents, as may be necessary or as may be reasonably requested in order to fully effectuate the purposes, terms and conditions of this JV Agreement mentioned. Without limiting the generality of the foregoing, in case the Commission of the European Union, or any other competent regulatory authority, both national and supranational, makes the clearance of any of the transactions contemplated by this JV Agreement conditional upon changes or additions to the regulation herein set forth, the Parties shall negotiate in good faith all those amendments that are necessary or proper to comply with such requests by keeping unaltered the spirit of this JV Agreement and the balance of interests herein reflected. + +Each of the Parties hereto guarantees to the other Party that it has not engaged any broker, finder or agent in connection with the transactions contemplated by this JV Agreement and has not incurred (and will not incur) any unpaid liability to any broker, finder or agent for any brokerage fees, finders' fees or commissions, with respect to the transactions contemplated by this JV Agreement. Each Party agrees to indemnify, defend and hold harmless the other Party from and against any and all claims asserted against it for any such fees or commissions by any persons purporting to act or to have acted for or on behalf of the indemnifying Party. + +Each Party hereto shall pay its own expenses incident to this JV Agreement and the transactions contemplated hereunder, including all legal and accounting fees and disbursements. 13. CONFIDENTIALITY + +In this Clause, Confidential Information means (without limitation) the existence and contents of the Documents and the existence and contents of any agreement or arrangement entered into pursuant to any of the Documents and information relating to: - the customers, suppliers, business, assets or affairs (including financial information) of any Party, + +including information relating to the marketing of any products or services (for example, customer names and lists and any other details of customers, sales targets, sales statistics, market share statistics, prices, market research reports and surveys and advertising) and other promotional materials; future projects; business development or planning; and -12- + + + + + +commercial relationships or negotiations, but excluding in any case the information in Clause 6.2. + +Information is not Confidential Information if: (a) it is or becomes generally available to the public (other than as a result of its disclosure in breach of this Agreement); (b) the disclosing Party can establish to the reasonable satisfaction of the other Party that it found out the information from a person not connected with the other Party or its Associated Companies or the Company and that such person is not under any obligation of confidence in respect of the information; or (c) the disclosing Party can establish to the reasonable satisfaction of the other Party that the information was known to the disclosing Party before the date of this Agreement and that it was not under any obligation of confidence in respect of the information. + +Each Party irrevocably agrees, undertakes and covenants with the other Party and the Company and any Subsidiary of the Company that it shall at all times keep confidential (and use all reasonable endeavours to ensure that its employees, agents and Associated Companies, and the employees and agents of such Associated Companies, and the Company shall keep confidential) any Confidential Information and shall not use such Confidential Information except for the purpose of exercising or performing its rights and obligations under or in connection with this Agreement, and shall not disclose such Confidential Information except: (a) to an Associated Company or to a Party's professional advisers where such disclosure is for a purpose related to the operation of this Agreement; (b) with the written consent of such of the Company or the Party or any Associated Company to which the information relates; (c) as may be required by law or by the rules of any recognized stock exchange, or governmental or other regulatory authority or by a court or other authority of competent jurisdiction, provided that, to the extent it is legally permitted to do so, it gives the other Party as much notice of such disclosure as possible; -13- + + + + + +(d) a Party may, provided it has reasonable grounds to believe that the other party is involved in activity that may constitute a criminal offence under the Anti-Corruption Rules, disclose Confidential Information to the relevant governmental or other regulatory authority without first informing the other party of such disclosure; (e) to any tax authority to the extent reasonably required for the purposes of the tax affairs of the party concerned or any of its Associated Companies; or (f) Confidential Information relating to the Company and any Subsidiary of the Company (including copies of the Documents) to a bank or financial adviser of a Shareholder and/or to any potential Buyer(s) in connection with a proposed sale pursuant to Clause 20, provided that: (i) such bank, financial adviser and/or potential Buyer shall first have entered into confidentiality undertakings for the benefit of the Company and any Subsidiary of the Company upon terms no less stringent that those set out in this Clause 10or otherwise in a form reasonably satisfactory to the Board; and (ii) the disclosing Party gives notice to the other Shareholder specifying, in general terms, the information to be disclosed. + +Each Party shall inform (and shall use all reasonable endeavors to procure that any of its Associated Companies and the Company shall inform) any officer, employee or agent or any professional adviser advising it in relation to the matters referred to in this Agreement, or to whom it provides Confidential Information, that such information is confidential and shall require them: (a) to keep it confidential; and (b) not to disclose it to any third party (other than those persons to whom it has already been disclosed in accordance with the terms of this Agreement). + +On termination of this Agreement, each Party shall (and shall use all reasonable endeavors to procure that its Associated Companies, and its officers and employees and those of its Associated Companies and the Company shall): (a) return to the other Party all documents and materials (and any copies) containing, reflecting, incorporating or based on the other Party's Confidential Information; and -14- + + + + + +(b) erase all the other Party's Confidential Information from computer and communications systems and devices used by it, including such systems and data storage services provided by third parties (to the extent technically and legally practicable), + +provided that a recipient party (and/or the Company, as the case may be) may retain documents and materials containing, reflecting, incorporating or based on the other Party's Confidential Information to the extent required by law or any applicable governmental or regulatory authority. + +The provisions of this Clause shall continue to apply after termination of this Agreement for any cause. 14. ANTI-CORRUPTION RULES + +Each Party recognizes and acknowledges that it is obliged to comply with the Anti-Corruption Rules. + +Kiromic acknowledges receipt of a copy of MOLIPHARMA's Anti-Corruption Policies and confirms that it has Anti-Corruption Policies in place that are at least comparable to MOLIPHARMA's. + +Each Party warrants and undertakes to the other that: (a) it has not, and to its best knowledge and belief none of its current or former directors, managers, officers or employees has, and, so far as it is aware, no other person who otherwise is or has been one of its Associated Persons has, at any time in the last [five (5)] years before the date of this Agreement: (i) made, given, authorized or offered, or promised to make, give, authorize or offer any Prohibited Advantage to any person in order to assist it or any of its Subsidiaries in improperly obtaining or retaining business for or with any person, in improperly directing business to any person or in securing any improper advantage; (ii) taken any other action which would violate applicable Anti-Corruption Rules; (iii) been the subject of any investigation, inquiry or litigation, administrative or enforcement proceedings by any Authority or any customer or other person regarding any offence or alleged offence under any Anti-Corruption Rules and no such investigation, inquiry, litigation or proceeding has been threatened or is pending and, so far as it is aware, -15- + + + + + +there are no circumstances likely to give rise to any such investigation, inquiry, litigation or proceeding; (b) for so long as it is a Party to this Agreement it will not, and to the extent it is legally able will procure that none of its Associated Persons will, engage in any of the conduct described in sub-Clauses (a)(i) or (a)(ii); (c) it is not ineligible or, so far as it is aware, treated by any Authority as ineligible to tender for any contract or business with, or be awarded any contract or business by, such Authority, or to tender for or perform any sub-contracting work under a contract with such Authority; (d) it has in place, and for so long as it is a Party to this Agreement will maintain, and, to the extent it is legally able will procure that the Company will maintain, adequate Anti-Corruption Policies; (e) it requires its Associated Persons to act in accordance with the requirements of applicable Anti-Corruption Rules and uses all reasonable endeavors to procure that they do so. So far as it is aware, each of its Associated Person which is a legal person has in place policies, systems, controls and procedures designed to prevent, and which are reasonably expected to continue to prevent it and its Associated Persons from violating applicable Anti-Corruption Rules; and (f) in performing its obligations under and carrying out the transactions contemplated by this Agreement and any other Document, neither it, nor any of its Subsidiaries nor any of their respective Associated Persons has engaged or will engage in any conduct described in sub- Clauses (a)(i) or (a)(ii). 15. DATA PROTECTION RULES PURSUANT TO REG.EU 679/2016 (GDPR) + +Pursuant to and for the purposes of the Privacy Code and EU Reg. 679/2016 ("GDPR") ("Law") on "Protection of persons and other subjects with regard to the processing of personal data", the Parties - as autonomous Data Controllers - acknowledge that they have exchanged information on the use of their personal data. + +The Parties undertake to communicate to each other - in execution of this Contract - only the common and/or sensitive personal data of third parties to whom they have given prior information and from whom they have previously acquired (where necessary) their -16- + + + + + +consent, in accordance with the Privacy Code. and EU Reg. 679/2016 ("GDPR") In particular, such consent must be informed, expressed, specific; documented in writing, in the case of common data; given in writing under penalty of nullity, in the case of sensitive data. + +Each Party shall be individually responsible for any communication of common and/or sensitive data made without the prior fulfilment of the aforementioned obligations. The Party to whom the communication is addressed will therefore be released from any responsibility and/or claim of third parties, related to the possible communication of common and/or sensitive data made in breach of the provisions of this clause and the Privacy Code and EU Reg. 679/2016. 16. GOVERNING LAW AND DISPUTE ACCORDANCE + +All disputes arising out of or in connection with this Agreement shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by one or more arbitrators appointed in accordance with the said Rules. Any such arbitration shall (i) be subject to the application of the Italian Law, (ii) take place in Paris, France and (iii) be conducted in English. + +Each of the parties to this Agreement consents to personal jurisdiction for any emergency injunction sought in the Court of Rome. However, subsequent to the emergency injunction hearing, the merits of the matter will be decided by the ICC as per the procedure set forth above. + +IN WITNESS WHEREOF, Parties have severally subscribed to these articles, or caused them to be subscribed in their name and on behalf by their respective officers thereunto duly authorized. + +Rome/Houston, 2 April 2020 Kiromic Biopharma Inc. Molipharma s.r.l. + +Prof Maurizio Chiriva Internati Avv. Giovanni Meliadò -17- \ No newline at end of file diff --git a/full_contract_txt/KIROMICBIOPHARMA,INC_05_11_2020-EX-10.23-CONSULTING AGREEMENT.txt b/full_contract_txt/KIROMICBIOPHARMA,INC_05_11_2020-EX-10.23-CONSULTING AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..08a66650eb5ec25f1fc41f043e529f5be58f9780 --- /dev/null +++ b/full_contract_txt/KIROMICBIOPHARMA,INC_05_11_2020-EX-10.23-CONSULTING AGREEMENT.txt @@ -0,0 +1,121 @@ +Exhibit 10.23 Corporate Address Fannin South Professional Building, Suite 140 7707 Fannin Street Houston, Texas 77054 t: 832.968.4888 + +CONSULTING AGREEMENT + +July 20, 2018 + +Gianluca Rotino + +Dear Gianluca: + +Kiromic, Inc, a Delaware corporation (the "Company"), is pleased to this offer to this Consulting Agreement (this "Agreement") to retain Gianluca Rotino ("Consultant") to perform certain consulting activities as described below on the following terms: + +1. Services and Compensation. Consultant agrees to act as a consultant to Company with respect to such matters and projects as are mutually agreed from time to time by and between Consultant and Company, and perform the services described on Exhibit A hereto (collectively, "Services"). + +Company agrees to pay Consultant the compensation set forth on Exhibit A hereto for the performance of the Services. + +2. Confidentiality. "Confidential Information" means any proprietary information technical data, trade secrets or know-how, including, but not limited to, research and product plans, products, services, markets, developments, inventions, processes, formulas, technology, marketing, finances or other business information disclosed to Consultant by Company either directly or indirectly in writing, orally or otherwise. Confidential Information also includes all Inventions (as defined below) and any other information or materials generated in connection with the Services. + +Consultant shall not, during or subsequent to the term of this Agreement, use any Confidential Information for any purpose whatsoever other than the performance of the Services on behalf of Company, or disclose Confidential Information to any third party. Consultant agrees that Confidential Information shall remain the sole property of Company. Consultant further agrees to take all reasonable precautions to prevent any unauthorized disclosure or use of Confidential Information. Notwithstanding the above, Consultant's obligation under this Section 2(b) relating to Confidential Information shall not apply to information which (i) is known to Consultant at the time of disclosure to Consultant by Company as evidenced by written records of Consultant, (ii) has become publicly known and made generally available through no wrongful act of Consultant, or (iii) has been rightfully received by Consultant from a third party authorized to make such disclosure. + +Consultant agrees that Consultant will not, during the term of this Agreement, improperly use or disclose to Company any proprietary information or trade secrets of any former or current employer or other person or entity to which Consultant has a duty to keep in confidence such information and that Consultant will not bring onto the premises of Company any unpublished document or proprietary information belonging to such employer, person or entity unless consented to in writing by the same. Consultant will indemnify Company and hold it harmless from 844.KEY.CURE | www.kiromic.com PAGE 1 + + + + + +and against all claims, liabilities, damages and expenses, including reasonable attorneys' fees and costs of suit, arising out of or in connection with any violation or claimed violation by Company of such third party's rights resulting in whole or in part from Company's use of the work product of Consultant under this Agreement. + +Consultant recognizes that Company has received and in the future will receive from third parties their confidential or proprietary information subject to a duty on Company's part to maintain the confidentiality of such information and to use it only for certain limited purposes. Consultant agrees that Consultant owes Company and such third parties, during the term of this Agreement and thereafter, a duty to hold all such confidential or proprietary information in the strictest confidence and not to disclose it to any person, firm or corporation or to use it except as necessary in carrying out the Services for Company consistent with Company's agreement with such third party. + +Upon the termination of this Agreement, or upon Company's earlier request, Consultant will deliver to Company all Confidential Information and Company's property relating thereto and all tangible embodiments thereof, in Consultant's possession or control. + +3. Ownership. Consultant hereby irrevocably assigns to Company all right, title and interest in and to any information (including, without limitation, business plans and/or business information), technology, know-how, materials, notes, records, designs, ideas, inventions, improvements, devices, developments, discoveries, compositions, trade secrets, processes, methods and/or techniques, whether or not patentable or copyrightable, that are conceived, reduced to practice or made by Consultant alone or jointly with others in the course of performing the Services or through the use of Confidential Information (collectively, 111nventions"). + +Consultant agrees to sign, execute and acknowledge or cause to be signed, executed and acknowledged without cost, but at the expense of Company, any and all documents and to perform such acts as my be necessary, useful or convenient for the purposes of perfecting the foregoing assignments and obtaining, enforcing and defending intellectual property rights in any and all countries with respect to Inventions. It is understood and agreed that Company or Company's designee shall have the sole right, but not the obligation, to prepare, file, prosecute and maintain patent applications and patents worldwide with respect to Inventions. + +Upon the termination of this Agreement, or upon Company's earlier requests, Consultant will deliver to Company all property relating to, and all tangible embodiments of, Inventions in Consultant's possession or control. + +Consultant agrees that if, in the course of performing the Services, Consultant incorporates into any Invention developed hereunder any invention, improvement, development concept, discovery or other proprietary subject matter owned by Consultant or in which Consultant has an interest ("Item"), Consultant will inform Company in writing thereof, and Company is hereby granted and shall have a non-exclusive, royalty-free, perpetual, irrevocable, worldwide license to make, have made, modify, reproduce, display, use and sell such Item as part of or in connection with the exploitation of such Invention. + +Consultant agrees that if Company is unable because of Consultant's unavailability, mental or physical incapacity, or for any other reason, to secure Consultant's signature to apply for or to pursue any application or registration for any intellectual property rights covering any Invention, then Consultant hereby irrevocably designates and appoints Company and its duly authorized officers and agents as Consultant's agent and attorney-in-fact, to act for and in Consultant's behalf 844.KEY.CURE | www.kiromic.com PAGE 2 + + + + + +to execute and file any such applications and to do all other lawfully permitted acts to further the prosecution and issuance of such intellectual property rights thereon with the same legal force and effect as if executed by Consultant. + +4. Reports. Consultant agrees, from time to time during the term of this Agreement, to keep Company advised as to Consultant's progress in performing the Services and, as reasonably requested by Company, prepare written reports with respect thereto. It is understood that the time required in the preparation of such written reports shall be considered time devoted to the performance of the Services by Consultant. All such reports prepared by Consultant shall be the sole property of Company. + +5. Term and Termination. This Agreement will commence on the Effective Date and will continue until termination as provided below. + +Either Consultant or Company may terminate this Agreement upon prior written notice thereof to the other party. + +Upon termination of this Agreement, all rights and duties of the parties hereunder shall cease except: + +Company shall be obliged to pay, within thirty (30) days after receipt of Consultant's final statement, all amounts owing to Consultant for unpaid Services completed by Consultant and related expenses, if any, in accordance with the provisions of Section 1 hereof, and Sections 2, 3, S(c), 6, 7, 8 and 10 shall survive termination of this Agreement. + +6. Independent Contractor. Nothing in this Agreement shall in any way be construed to constitute Consultant as an agent, employee or representative of Company, but Consultant shall perform the Services as an independent contractor. Consultant acknowledges and agrees that Consultant is obligated to report as income all compensation received by Consultant pursuant to this Agreement. + +7. No Debarment. Consultant represents and warrants that Consultant has not been debarred under Section (a) or (b) of 21 U.S.C. Section 335a and does not appear on the United States Food and Drug debarment list. Consultant represents and warrants that Consultant has not committed any crime or conduct that could result in such debarment or Consultant's exclusion from any governmental healthcare program. Consultant represents and warrants that, to Consultant's knowledge, no investigations, claims or proceedings with respect to any such crimes or conduct are pending or threatened against Consultant. Consultant agrees and undertakes to promptly notify the Company if Consultant becomes debarred or proceedings have been initiated against Consultant with respect to debarment, whether such debarment or initiation of proceedings occurs during or after the term of this Agreement. + +8. Conflicting Obligations. Consultant hereby certifies that Consultant has no outstanding agreement or obligation that is in conflict with any of the provisions of this Agreement, or that would preclude Consultant from complying with the provisions hereof, and further certifies that Consultant will not enter into any such conflicting agreement during the term of this Agreement. Subject to written waivers that may be provided by the Company upon request, which shall not be unreasonably withheld, Consultant agrees that, during the term of this Agreement, Consultant will not directly or indirectly (i) participate in the formation of any business or commercial entity in the Field of Interest or otherwise competitive with the Company. Without limiting the foregoing, Consultant agrees to use his or her best efforts (A) to segregate Consultant's 844.KEY.CURE | www.kiromic.com PAGE 3 + + + + + +Services performed under this Agreement from Consultant's work done for any other companies for whom Consultant is providing services so as to minimize any questions of disclosure of, or rights under, any inventions, (B) to notify the Company if at any time the Consultant believes that such questions may result from his or her performance under this Agreement and (C) to assist the Company in fairly resolving any questions in this regard which may arise. The Services performed hereunder will not be conducted on time that is required to be devoted to any other third party. The Consultant shall not use the funding, resources and facilities of any other third party, without the prior written consent of the Company, to perform Services hereunder and shall not perform the Services hereunder in any manner that would give any third-party rights or access to the product of such Services. + +9. General. This Agreement (together with the Exhibits hereto) is the sole agreement and understanding between Company and Consultant concerning the subject matter hereof, and it supersedes any and all prior agreements and understandings with respect to such matter, whether written or oral, provided, that, except as set forth in Exhibit B. Any required notice shall be given in writing by customary means with receipt confirmed at the address of each party set forth below, or to such other address as either party may substitute by written notice to the other. Consultant shall not subcontract any portion of Consultant's duties under this Agreement without the prior written consent of Company. Neither this Agreement nor any right hereunder or interest herein may be assigned or transferred by Consultant without the express written consent of Company. Company may assign this Agreement to any entity that succeeds to substantially all of the business or assets of Company. This Agreement shall be governed by the laws of the State of Texas, without reference to its conflicts of law principles. This Agreement may only be amended or modified by a writing signed by both parties. Waiver of any term or provision of this Agreement or forbearance to enforce any term or provision by either party shall not constitute a waiver as to any subsequent breach or failure of the same term or provision or a waiver of any other term or provision of this Agreement. In the event that any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue in full force and effect without said provision, provided that no such severability shall be effective if it materially changes the economic benefit of this Agreement to either Company or Consultant. + +10. Tax Matters. As follows: + +(a) Withholding. All forms of compensation referred to in this letter agreement are subject to reduction to reflect applicable withholding and payroll taxes and other deductions required by law. + +(b) Tax Advice. You are encouraged to obtain your own tax advice regarding your compensation from the Company. You agree that the Company does not have a duty to design its compensation policies in a manner that minimizes your tax liabilities, and you will not make any claim against the Company or the Board related to tax liabilities arising from your compensation. + +11. Background Check and Authorization to Work. This offer of employment is contingent on the Company's completion of a satisfactory background check of you. Please note that because of employer regulations adopted in the Immigration Reform and Control Act of 1986, within three (3) business days of starting your new position you will need to present documentation demonstrating that you have authorization to work in the United States. If you have questions about this requirement, which applies to U.S. citizens and non-U.S. citizens alike, please let us know. + +12. Interpretation, Amendment and Enforcement. This letter agreement will be effective as of July 1, 2018. This letter agreement and the Company's standard Proprietary Information and Inventions Agreement supersede and replace any prior agreements, representations or understandings (whether written, oral, implied or otherwise) between you and 844.KEY.CURE | www.kiromic.com PAGE 4 + + + + + +the Company and constitute the complete agreement between you and the Company regarding the subject matter set forth herein. This letter agreement may not be amended or modified, except by an express written agreement signed by both you and a duly authorized officer of the Company. + +13. Arbitration Agreement. Any controversy or claim arising out of or relating to this agreement or breach thereof, shall be settled by binding arbitration controlled by the rules of the American Arbitration Association. The number of arbitrator(s) shall be one. The seat of arbitration shall be Houston, Texas. Texas law shall also apply to the extent necessary to fill any gaps created by the rules of the American Arbitration Association. The arbitration award shall be final and binding on the parties. Judgement of the award rendered by the arbitrator(s) may be entered into any court of competent jurisdiction. If any provision of this Arbitration Agreement is held illegal or unenforceable in a arbitration proceeding, such provision shall be severed and shall be inoperative, and the remainder of this Agreement shall remain operative and binding on the Parties. The arbitrator(s) shall have sole kompetenz-kompetenz regarding this Arbitration Agreement. + +14. Severability. If any provision of this Agreement is held illegal or unenforceable in a judicial proceeding, such provision shall be severed and shall be inoperative, and the remainder of this Agreement shall remain operative and binding on the Parties. + +15. Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered will be deemed an original, and all of which together will constitute one and the same agreement. + +16. Entire Agreement. This Agreement and the documents referred to herein constitute the entire agreement and understanding of the parties with respect to the subject matter of this Agreement, and supersede all prior understandings and agreements, whether oral or written, between the parties hereto with respect to such subject matter. + +[SIGNATURE PAGE TO FOLLOW] 844.KEY.CURE | www.kiromic.com PAGE 5 + + + + + +IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the Effective Date. KIROMIC, INC: CONSULTANT: + +By: /s/ Scott Dahlbeck /s/ Gianluca Rotino Signature + +Name: Scott Dahlbeck Gianluca Rotino + +Title: President 844.KEY.CURE | www.kiromic.com PAGE 6 + + + + + +EXHIBIT A + +SERVICES AND COMPENSATION + +1. Services. Consultant will render to Company the following Services: • Provide business and statistical analysis of company metrics • Provide leadership role for business development strategies • Manage all in house consulting duties to maximize return for company objectives • Manage key marketing and communication campaigns • Prioritize and support clinical product pipeline business priorities • Work closely with executive team to ensure department initiatives are all aligned • Locate, evaluate and develop new business contacts and opportunities + +2. Compensation. The Company will compensate Consultant at the rate of $400 per hour (19 hours cap monthly; anything over these hrs must be preapproved by management), payable in accordance with the Company's standard payroll schedule, and subject to withholding as legally required. This compensation will be subject to adjustment pursuant to the Company's consultant compensation policies in effect from time to time. Consultants shall be given written notice of any adjustments to compensation at least fourteen (14) days prior to adjustments becoming effective. 844.KEY.CURE | www.kiromic.com PAGE 7 \ No newline at end of file diff --git a/full_contract_txt/KNOWLABS,INC_08_15_2005-EX-10-INTELLECTUAL PROPERTY AGREEMENT.txt b/full_contract_txt/KNOWLABS,INC_08_15_2005-EX-10-INTELLECTUAL PROPERTY AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..f985d5f67cb428fc264dace7190c5e1b9132ae45 --- /dev/null +++ b/full_contract_txt/KNOWLABS,INC_08_15_2005-EX-10-INTELLECTUAL PROPERTY AGREEMENT.txt @@ -0,0 +1,101 @@ +Exhibit 10.1 + + INTELLECTUAL PROPERTY AGREEMENT + + THIS AGREEMENT (the "Agreement"), dated June 16, 2004, is made and entered into by and between VISUALANT INCORPORATED, a Nevada corporation (the "Company") and KENNETH TURPIN ("Turpin"), + + WHEREAS, the Company is in the business of researching, developing, acquiring, and commercializing products and services related to color technology outside the visible spectrum, using specialized narrow band N-IR and N-UV sensors and spatial analysis software modeling which translate the invisible into the visible (the "Business"), and involving specialized and proprietary information and trade secrets which the Company considers to be amongst its most sensitive, confidential, and proprietary information; + + WHEREAS, Turpin has identified, researched and is developing the Business for and on behalf of the Company; + + NOW THEREFORE, in consideration of the sum of $10.00 paid by each party to the other, and the representations, warranties and covenants contained herein, the sufficiency of which is hereby acknowledged, the parties hereto agree as follows: + +1. Definitions. In this Agreement, the following words and phrases shall have the following meanings: + + (a) "Affiliate" shall have the same meaning as contained in the Canada Business Corporations Act; "Company Affiliate" shall mean any Affiliate of the Company; + + (b) "Company Property" means any and all information, equipment, hardware, components, documents and other property of the Company or any Company Affiliate provided to or used by Turpin, including all computers, monitors, laptops, personal digital assistants, mobile computing devices, computer peripherals, cell phones and other telephones, pagers, storage media, security cards, keys, calling cards, charge cards, reference materials, designs, specifications, schematics, drawings, diagrams, pictures, notes, memoranda, papers, manuals, records, and the like; + + (c) "Intellectual Property Rights" means any and all copyrights, design rights, trade-marks, trade secrets and confidential information, patent rights, and all other proprietary rights, which may subsist anywhere in the world, whether registered or unregistered, including all applications for registration or issuance of any of the foregoing, all priority and convention rights in any of the foregoing, and all rights to file any such applications; + + (d) "Research and Development" means information pertaining to any research, development, investigation, study, analysis, experiment or test carried on or proposed to be carried on by the Company or any Company Affiliate; + + (e) "Software" means any and all algorithms, data structures, code, instructions, scripts, tables, data, and other information used by a computer or processor to process information, such Software including, without limitation, (i) all source code, object code and executable code, and (ii) all routines, subroutines, program material, computer files, system architectures, models, flowcharts, requirements, specifications, notes, outlines, papers, descriptions and other + + 1 + + documents created or developed in connection with any of the foregoing, the resulting screen formats and other visual effects of the Software, and any formulae, processes, or ideas, whether or not protected by copyright; + + (f) "Work" means, with respect to the Business, any and all inventions, discoveries, designs, developments, modifications, improvements, products, methods, trade secrets, mid know- how that Turpin, solely or with others, conceives of, modifies, develops, contributes to, or reduces to practice, including without limitation Software, records, documents, photographs, video recordings, sound recordings, images, designs, animations, drawings, sketches, diagrams, plans, compilations, and analyses, and all parts, elements, combinations and derivative works thereof, and + + (g) "Work Product" means any and all Work and other items in any form that Turpin, solely or with others, conceives of, modifies, develops, contributes to, or reduces to practice during the period of Turpin's employment with the Company and which: + + (i) relate, directly or indirectly, to the Company's present or future foreseeable Business or Research and Development; or + + (ii) result from any work performed by Turpin for the Company; + + whether or not such are made during or after working hours, on or off the Company's premises. + +2. Ownership by the Company. Turpin acknowledges and agrees that all Work + + + + + + Product have been made for the Company and that the Company shall be the exclusive owner of all right, title, and interest in and to the Work Product and all Intellectual Property Rights therein. Turpin does hereby assign and transfer to the Company, effective upon creation, all right, title, and interest that Turpin may have in and to the Work Product and all Intellectual Property Rights therein and does hereby assign all of Turpin's future right, title, and interest that Turpin may have in and to each of the Work Product and Intellectual Property Rights therein, effective at the time each is created. Turpin hereby irrevocably and expressly waives as against any person all moral rights Turpin may have in any and all Work Product. + +3. Disclosure of Work Product. Turpin agrees to maintain at all times adequate and current records relating to the creation and development of the Work Product and Intellectual Property Rights therein, which records and all copies thereof shall be and shall remain the exclusive property of the Company, and to disclose all such records and copies to the Company promptly. + +4. Assistance. Turpin shall, at the Company's request, assist with, execute and deliver all further documents, applications, declarations, verifications, submissions, transfers and assignments and do all other things requested by the Company, acting reasonably, during the term hereof and thereafter, at the expense of the Company, but without additional compensation, to enable the Company or its nominees to apply for, acquire, prosecute, perfect, enforce and/or maintain any and all right, title and interest, in any country, in and to the Confidential Information, the Work Product and the Intellectual Property Rights in same. + + 2 + +5. Protection of Work Product. Turpin covenants that Turpin shall not at any time directly or indirectly contest or assist any third party in contesting the Company's right, title, and interest in and to the Work Product or any Intellectual Property Rights therein. Turpin shall not, directly or indirectly, apply for or seek registration of any Intellectual Property Rights in any Work Product in any jurisdiction without the express written approval of the Company. Turpin waives any and all existing and future moral rights with respect to the Work Product and all Intellectual Property Rights therein. + +6. Return of Company Property. Turpin shall deliver to the Company all Work Product and Company Property, including all originals and copies thereof, in Turpin's possession and/or control, at the request of the Company, or, in the absence of such a request, upon the termination of Turpin's employment with the Company. + +7. Term and Termination. This Agreement shall continue until terminated as provided herein. This Agreement may, with written notice, be terminated by either party should Turpin's employment with the Company terminate for any reason. Termination under this Section 12 shall be effective from the date written notice is delivered or the date specified in the written notice. whichever is later. + +8. Injunctive Relief. Turpin acknowledges that monetary damages would be inadequate to compensate the Company for any breach by Turpin of this Agreement and that any such breach would constitute irreparable harm to the Company. Accordingly, Turpin agrees that upon the breach or threatened breach of any terms of this Agreement, the Company shall, in addition to all other remedies, be entitled to an immediate injunction enjoining any breach of this Agreement or a decree for specific performance. + +9. Amendment. Waiver. Variation. No amendment, waiver, or variation of the terms, conditions, warranties, covenants, agreements or undertakings set out herein shall be of any force or effect unless reduced to writing duly executed by all parties hereto in the same manner and with the same formality as this Agreement is executed. + +10. Successors and Assigns. This Agreement shall be binding upon Turpin and the heirs and legal representatives of Turpin, and shall be binding upon and ensure to the benefit of the Company and its successors and assigns, including any corporation with which or into which the Company or its successors may be merged or which may succeed, to its assets or business. + +11. Employment by Affiliates. Turpin acknowledges and agrees that Turpin's employment with the Company may be succeeded by employment with a Company Affiliate, in which case the terms of this Agreement shall continue in effect with respect to such employment until an agreement relating to this subject matter is signed between Turpin and the Company Affiliate. + +12. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the Province of British Columbia (without regard to its conflict of laws provisions) which shall be deemed to be the proper law thereof. All disputes or claims arising out of or in relation to the Agreement may be submitted to and resolved by the Courts of the Province of British Columbia (including the Supreme Court of Canada). The parties hereby irrevocably submit and attorn to the non-exclusive jurisdiction of such Courts to finally adjudicate or determine any suit, action, or proceeding arising out of or in relation to this Agreement. + + 3 + +13. Terms Paramount. The terms of this Agreement are in addition to any other existing terms (the "Existing Terms") between the Company and Turpin. In + + + + + + the event of any inconsistency or conflict between the terms of this Agreement and any Existing Terms, the terms of this Agreement shall be paramount and shall supersede the Existing Terms to the extent of the inconsistency or conflict. + +14. Time. Time shall be of the essence for each and every term and condition hereof. + +15. Severability. The provisions of this Agreement, whether or not contained in the same section, are independent and separable. If any of the provisions of this Agreement shall be invalid or unenforceable under the laws of the jurisdiction where enforcement is sought, such invalidity or unenforceability shall not invalidate or render unenforceable the entire Agreement but rather the entire Agreement shall be construed as if not containing the particular invalid or unenforceable provision or provisions and the rights and obligations of the parties shall be construed and enforced accordingly, with the invalid or unenforceable provision modified so as to be limited and enforced to the fullest extent possible under the laws of that jurisdiction, with retroactive effect to the date of this Agreement. + +16. Interpretation. The language in all parts of this Agreement shall be in all cases construed simply according to its fair meaning and not strictly for or against any of the parties hereto. Any rule of construction that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement. Each of the terms "including", "include" and "includes", when used in this Agreement, is not limiting whether or not non-limiting language (such as "without limitation" or "but not limited to" or words of similar import) is used with reference thereto. + +17. Headings and Gender. The headings and subheadings contained in this Agreement are used solely for convenience and do not constitute a part of the Agreement, nor should they be used to aid in any manner in the construction or interpretation of this Agreement. Unless the context requires otherwise, words importing the singular include the plural and vice versa and words importing gender include all genders. + +18. Counterparts and Execution by Fax. This Agreement may be executed in any number of counterparts with the same effect as if' all the parties have signed the same document. All counterparts shall be construed together and shall constitute one agreement. This Agreement may be validly executed by means of transmission of signed facsimile. + +19. Acknowledgement. Turpin has carefully read and considered the terms of this Agreement and, having done so, understands the terms and agrees that the terms herein are fair and reasonable and are reasonably required for the protection of the interests of the Company. + + IN WITNESS WHEREOF the parties have duly executed this Agreement on the date first above written. + +VISUALANT INCORPORATED + +PER /s/ RONALD P. ERICKSON -------------------------- RONALD P. ERICKSON + +Authorized Signatory + +/s/ KENNETH TURPIN ------------------ KENNETH TURPIN + + 4 \ No newline at end of file diff --git a/full_contract_txt/KUBIENT,INC_07_02_2020-EX-10.14-MASTER SERVICES AGREEMENT_Part1.txt b/full_contract_txt/KUBIENT,INC_07_02_2020-EX-10.14-MASTER SERVICES AGREEMENT_Part1.txt new file mode 100644 index 0000000000000000000000000000000000000000..d43e56efa844eb601c942236921119335cb7e578 --- /dev/null +++ b/full_contract_txt/KUBIENT,INC_07_02_2020-EX-10.14-MASTER SERVICES AGREEMENT_Part1.txt @@ -0,0 +1,25 @@ +Exhibit 10.14 MASTER SERVICES AGREEMENT This Master Services Agreement (the "Agreement"), dated as of the 5th day of February, 2020 (the "Effective Date"), is by and between Kubient Inc., with offices located at 330 7th Avenue, 10th Floor, New York, NY 10001 ("Kubient") and The Associated Press, a New York not-for-profit corporation with principal place of business located at 200 Liberty Street, New York, NY 10281 (the "Customer"). Each of Customer and Kubient may be referred to herein individually as a "Party" and collectively as the "Parties". WHEREAS, Customer wishes to increase the revenue derived from its traffic, content, websites, applications, podcasts, audience and database, and would like to retain Kubient to support and assist in that process as described herein; For good and valuable consideration, the receipt of which is acknowledged by each Party, the Parties agree as follows: 1. Kubient Services. The services provided by Kubient pursuant to each specific engagement by Customer (the "Service" or "Services") shall be set forth and detailed in individual exhibits attached hereto (each an "Exhibit"), which shall be subject to the terms and conditions hereof and be incorporated as part of this Agreement. Kubient shall use reasonable efforts to provide to Customer the Services. Customer agrees to provide all reasonable and necessary access, support and cooperation for Kubient to provide the Services in a timely and effective manner. Nothing herein is intended nor shall be construed as creating an exclusive arrangement between Customer and Kubient. This Agreement will not restrict Customer offering Inventory via other agents or otherwise selling Inventory to any third parties. 2. Kubient License. In the event Customer shall utilize Kubient's ad serving technology as part of the Services, Kubient hereby grants to Customer a limited, royalty-free, non-exclusive, non-transferable, non-assignable, without right of sublicense, revocable license to access, participate in and use to the full extent the Auction Platform as hosted by Kubient, for the purpose of serving Inventory at Target Demand ("          "). The Auction Platform will place Creative from the Target Demand with the Winning Bid Price on Google Ad Manager for such Creative to be placed on Customer's websites. 3. Kubient License Definitions. Certain capitalized terms used in this Agreement shall have meanings set forth below. (a) "Auction" means a real-time auction through the Auction Platform for the placement of Creatives on Customer's websites and applications. (b) "Auction Platform" means that technology licensed or created by Kubient on which a Registered Bidder may Bid for Inventory. (c) "Bid" means a price for which a Registered Bidder is willing to pay for Impressions in an Auction via the Auction Platform. (d) "Creative" means, as applicable: (i) any Digital ad, or Companion ad as defined in the IAB's Portfolio and Guidelines. (e) "Impression(s)" means the number of times a Creative is served to, and received by, a visitor viewing the Inventory as measured by Kubient. (f) "Registered Bidder" means a person or entity that executed an agreement with Kubient in order to use the Auction Platform to participate in Auction and to deliver Impressions in Inventory. (g) "Request(s)" means the data sent from Customer to Kubient that is used in the auction to determine a Bid. (h) "Target Demand" means the Registered Bidder that has placed a Bid for Impressions to be delivered in Inventory. (i) "Inventory" means advertising space on, within or associated with premium content on web site(s) or app(s) offered through the Auction Platform by Customer. (j) "Winning Bid Price" means the price at which the Auction Platform awards Impressions to a bidding party which shall be no less than the minimum price that Customer has agreed to accept. 4. Term and Termination. (a) The initial term of this Agreement shall be one (1) year from the Effective Date (the "Initial Term"). This Agreement will automatically renew for additional 1-year terms unless earlier terminated pursuant to this Agreement's express provisions (together with the Initial Term, such additional periods the "Term"). Neither Party may terminate this Agreement during the Initial Term except as set forth in paragraph 4(b) or any Exhibit. Either Party may terminate this Agreement for any reason following the Initial Term upon ninety (90) days written notice to the other Party. Except for termination for material breach as detailed in paragraph 4(b), Kubient shall be entitled to all fees generated during the termination period regardless of which Party terminates the Agreement, (b) Either Party may terminate this Agreement if the other Party commits a material breach of the Agreement and upon thirty (30) days written notice to the other Party, such other Party hasn't cured the breach within such thirty (30) days. Either Party may terminate the Agreement immediately if the other party (i) becomes insolvent or makes a general assignment for the benefit of creditors; (ii) suffers or permits the appointment of a conservator or receiver for its business or assets or any similar action by a governmental entity for the purpose of assuming operation or control of the Party due to the financial condition of the Party; (iii) becomes subject to any proceeding under any bankruptcy or insolvency law whether domestic or foreign and such proceeding or action has not been dismissed within a sixty (60) period; or (iv) has wound up or liquidated its business, voluntarily or otherwise. + + + + + +(c) Upon termination of the Agreement: (i) Kubient will cease providing the Services; (ii) the license granted under section 3 shall be revoked, (iii) Customer will promptly cease use of the Services and the Auction Platform; (iv) and each Party will return or destroy any of the other Party's Confidential Information then in its possession. 5. Fees and Payment. The Parties agree to share any revenue generated as a result of this Agreement, or Customer's use of the Services or the Auction Platform, as set forth and detailed in each applicable Exhibit. Unless specified otherwise in an Exhibit, Kubient shall be responsible for contracting with all advertisers, agencies, media buyers, and/or sponsors (collectively "Advertisers") on Customer's behalf, including Advertisers with whom Customer has existing relationships. Pursuant to the doctrine of sequential liability, payment from Kubient to Customer shall be made within seven (7) days from Kubient's receipt of payment, regardless of when Customer submits an invoice. Customer acknowledges and agrees that Kubient shall proceed with recovery of the amounts due on a best effort basis but will not initiate any legal action against a delinquent party without the express written consent and support of Customer. Except of taxes associated with Kubient's income, Customer shall be responsible for paying all applicable sales, use or other taxes, duties, or tariffs applicable to its use of the Services. 6. Use of Service. (a) Customer will comply with all international, federal, state and local laws, rules, and regulations of any governmental or regulating authority ("Law") that are applicable to its business and use of the Service. Customer agrees that it will not transfer or (unless expressly and specifically approved by Kubient in advance and in writing) allow third-party access to the Service. Customer will not modify, translate, alter, tamper with, repair, or otherwise create derivative works of any software included in any Service; reverse engineer, disassemble, or decompile any software or Service or apply any other process or procedure to derive source code of any software included in any Service; or resell, transfer, assign, or use as a service bureau any Service. Customer will ensure that its stories, articles, polls, videos, pictures, photographs, images, broadcasts, and any other type of content (collectively the "Content"), and each of its websites, devices, applications, podcasts, ads, emails, databases or any other types of mediums for which the Service is engaged (collectively the "Properties") contains or is linked to a privacy policy in accordance with applicable Law. Customer shall be responsible and solely liable for all the Content (including without limitation all intellectual property rights therein) and the Properties. 7. Limitation of Liability. (a) EXCEPT WITH RESPECT TO THE PARTIES' LIABILITY FOR INDEMNIFICATION, OR LIABILITY FOR BREACH OF CONFIDENTIALITY, NEITHER PARTY SHALL BE LIABLE FOR ANY CONSEQUENTIAL, INCIDENTAL, INDIRECT, PUNITIVE, SPECIAL OR OTHER SIMILAR DAMAGES, WHETHER OR NOT CAUSED BY THE OTHER PARTY'S EMPLOYEES OR REPRESENTATIVES„ WHETHER UNDER TORT (INCLUDING NEGLIGENCE), CONTRACT OR OTHER THEORIES OF RECOVERY, EVEN IF THE OTHER PARTY WAS OR SHOULD HAVE BEEN AWARE OR WAS ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. 8. Arbitration. Each Party agrees and does waive trial by jury in any action, proceeding or counterclaim brought against the other Party for any matter whatsoever arising out of or in any way connected with this Agreement. No action, suit or proceeding shall be brought against a Party more than one year after the date of termination this Agreement. Any controversy or claim arising out of or relating to this Agreement, or the breach thereof, shall be settled by arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules, and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof + + + + + +9. Representations, Warranties, and Covenants. (a) Each Party represents, warrants and covenants to the other that (i) it has the full right, power, and authority to enter into this Agreement; (ii) the execution of this Agreement and performance of its obligations under this Agreement do not and will not violate any other agreement to which it is a party; and (iii) this Agreement constitutes a legal, valid and binding obligation when agreed to. (b) Kubient represents, warrants and covenants that: (i) the Service and any deliverables provided hereunder by Kubient do not and shall not infringe, misappropriate or violate any patent, copyright, trademark, trade secret, publicity, privacy or other rights of any third party; (ii) the Service will perform in all material respects to industry standards; (iii) the collection, maintenance, management and storage of visitor information (data), to the extent collected, directed by, maintained or stored by Kubient, as well as the performance of the Auction Platform, is and shall be in a secure manner using best practices of security technology and best practices to protect against loss, misuse or alteration of data and Kubient shall use measures in accordance with industry standards to ensure that all databases shall be accessible only by certain authorized personnel of Kubient or Customer; (iv) it will ensure that the product and service provided by Kubient shall be free of any viruses, Trojan Horses, worms, time bombs, trap doors, back doors, Easter eggs, cancelbots, or other computer programming routines that will damage, detrimentally interfere with, surreptitiously intercept or expropriate any system, data or information; (v) the execution and delivery of the Agreement and the performance of its obligations hereunder do not conflict with or violate applicable Laws or regulations; (vi) any services provided by it shall comply with the terms of this Agreement and shall be free from errors that materially affect their utility; (vii) it owns or controls the rights granted or licensed to Customer herein; (viii) it is the rightful owner or licensee of all intellectual property rights to the Service, the Auction Platform and products delivered hereunder; (ix) it is now and throughout the Term shall comply with all applicable Laws in connection with the operation of its business and the performance of its obligations hereunder or the provision of the Service, except to the extent that such failure would not, in the aggregate, reasonably be expected to have a material adverse effect on Customer's business, (x) it shall not place advertising for guns, tobacco products, pornography, illegal products and any products identified by the IAB as excluded categories for advertising and (xi) it will ensure that all Target Bidders have agreed to provide representations and warranties with respect to the Creative in accordance with industry standards, including, without limitation, that all Creative is supported by competent and reliable prior substantiation in accordance with Law and complies with applicable Law and is not defamatory, libelous, slanderous or otherwise unlawful. (c) Customer represents and warrants that: (i) it is the sole and rightful owner of all the Content and Properties, or has the necessary rights to the Content and Properties to meet its obligations hereunder; (ii) the Content and Properties do not and shall not infringe, misappropriate or violate any patent, copyright, trademark, trade secret, publicity, privacy or other intellectual property or other rights of any third party; (iii) the collection, maintenance, management and storage of visitor information (data), to the extent collected, maintained or stored by Customer or a third-party on Customer's behalf, is in a secure manner using best practices of security technology and best practices to protect against loss, misuse or alteration of data and Customer shall use measures in accordance with industry standards to ensure that all databases shall be accessible only by certain authorized personnel of Kubient or Customer in accordance with Customer's privacy policy and applicable Law; and (iv) the execution and delivery of the Agreement and the performance of its obligations hereunder do not and will not violate any applicable Law. 10. Indemnification. (a) Kubient agrees to indemnify, defend, and hold harmless Customer and its officers, directors, managers, members, agents, and employees from all third-party allegations, claims, actions, losses, expenses, damages, costs (including, without limitation, reasonable attorneys' fees) or liabilities ("Claims") arising out of or in connection with: (i) the Services; (ii) the Auction Platform; (iii) to the best of its knowledge the Creative placed onto Customer's platforms or websites by the Auction Platform; (iv) Kubient's breach of any representation or warranty under this Agreement or (v) the acts or omissions of Kubient or a third party hired by, employed, retained or under Kubient control with respect to Kubient's obligations hereunder. (b) Customer agrees to indemnify, defend, and hold harmless Kubient and its owners, shareholders, officers, directors, managers, agents, and employees from all third-party Claims arising out of or in connection with (i) Customer's unauthorized or inappropriate use of the Services, (ii) Customer's unauthorized or inappropriate use of the Auction Platform, (iii) Customer's breach of any representation or warranty under this Agreement, or (iv) the Content or Properties, including any allegation or claim that the Content or Properties violate or infringe on an y third party rig hts, or (v) the acts or omissions of Customer or a third party hired by, employed, retained or under Customer's control. 11. Indemnification Procedures. Any claim for indemnification hereunder shall be subject to the following provisions: (i) the party seeking indemnification shall provide prompt written notice of the claim to the indemnifying party, provided that any delay in providing notice shall not relieve the indemnifying party of its indemnity obligations ; (ii) the indemnifying party shall have the right to control the defense and all negotiations relative to the settlement of any such claim, provided that no settlement admitting liability on the part of the indemnified party may be made without the express written consent of the indemnified party; and (iii) the indemnified party shall reasonably cooperate with the indemnifying party and its counsel at the indemnifying party's cost and expense. 12. Confidentiality. "Confidential Information" means any tangible and intangible non-public information in any form (including written information, oral statements and electronically stored data) which a party discloses (the "Discloser") to the other party (the "Recipient") including, without limitation, information relating to trade secrets, systems, know-how, products, processes (including manufacturing processes), inventions, computer software programs, marketing or sales techniques, financial condition, costs, business interests, initiatives, objectives, plans, strategies, customers, suppliers, lenders, underwriters, or employees, that is marked as confidential or identified at the time of disclosure as being confidential or is otherwise disclosed under circumstances that would lead a reasonable person to conclude that such information is confidential, excluding information that: (a) was in Recipient's possession before receipt from the Discloser pursuant this Agreement; (b) is in or enters the public domain without a breach of this Agreement; (c) is rightfully received by Recipient from a third party who was not known by Recipient to be legally or contractually restricted from disclosing such information; or (d) is independently developed by Recipient without use of or reference to the Discloser's Confidential Information. Recipient will protect the Confidential Information, for one (1) year from the date of disclosure, by using at least the same degree of care as it uses to protect its own Confidential Information, but no less than a reasonable degree of care, to prevent unauthorized use, disclosure or publication. Notwithstanding the foregoing, if Recipient is required by applicable Law or a valid legal order to disclose any Confidential Information, Recipient shall, before such disclosure, notify Discloser of such requirements, if legally permissible and reasonably practicable, so that Discloser may seek a protective order or other remedy, and Recipient shall reasonably assist Discloser therewith (at Discloser's cost). If Recipient remains legally compelled to make such disclosure, it shall only disclose that portion of the Confidential Information Recipient is required to disclose. Without limiting the foregoing, Recipient: (x) will not use, disclose, make available or reproduce the Confidential Information (or permit others to do so) except as expressly authorized in this Agreement; (y) will not disclose any such Confidential Information to anyone except employees and directors of Recipient to whom disclosure is necessary for the performance of the Agreement; and (z) will appropriately notify such employees and directors that the disclosure is made in confidence and will be kept in confidence in accordance with this Agreement. If Recipient becomes aware of any loss or unauthorized disclosure of Confidential Information, Recipient will promptly notify Discloser of such and use reasonable efforts to retrieve such Confidential Information. + + + + + +13. Disclaimer. Except as expressly set forth herein, the Services are provided on an "as is," "where is," and "as available" basis, and, to the maximum extent permitted by Law, Kubient disclaims, and Customer hereby waives, all representations and warranties, express or implied, arising by operation of Law or otherwise, except for the representations and warranties set forth in this Agreement, including but not limited to the implied warranties of merchantability, fitness for a particular purpose, as well as any warranties arising from a course of dealing, usage or trade practice. Kubient makes no representation or warranty and expressly disclaims, and Customer understands and acknowledges, that there is no guarantee that any minimum level of revenue or profit will be generated by either Party as a result of the Services or this Agreement. 14. General Provisions. (a) This Agreement is governed in all respects by the laws of the State of Delaware without giving effect to its conflict of laws principles. Each Party hereby irrevocably submits for all disputes to the exclusive jurisdiction and venue of the state and federal courts located in New York, New York. (b) Each Party's names, trademarks and logos are the exclusive property of said respective Party, and neither Party will acquire any proprietary rights therein by reason of this Agreement or any other agreement. Neither Party may issue any publicity release or marketing materials identifying the other Party without the prior express written approval of such other Party, provided however, the Parties agree to issue a joint press release within ninety (90) days of the Effective Dave announcing the Agreement. (c) The relationship of the Parties is that of independent contractors, and nothing herein is intended, nor should be construed, to create a partnership, agency, joint venture or employment relationship. No act or statement of either Party will operate to bind the other and neither Party will hold itself out or have any authority as an agent of the other for any purposes whatsoever. (d) If any legal action, including, without limitation, an action for arbitration or injunctive relief, is brought relating to the Agreement or in breach hereof, the prevailing party in any final judgment or arbitration award shall be entitled to recover its reasonable expenses, including all court costs, arbitration fees and reasonable attorney's fees. (e) All notices provided pursuant to this Agreement will be in writing and will be deemed given (i) if by personal delivery, upon receipt thereof; (ii) if mailed five 5 days after deposit in the US mail, postage prepaid, certified mail return receipt requested; or (iii) if sent via overnight courier, upon receipt. All notices will be sent to the person who has signed this Agreement (at the address set forth above) or to such other person or address as either party may specify in writing. (f) If any provision of this Agreement is unenforceable, illegal or invalid under any applicable Law or court of competent jurisdiction, then such unenforceability or invalidity will not render the Agreement unenforceable or invalid. In such event, such provision will be deemed restated in accordance with applicable Law to reflect as nearly as possible the original intentions of the parties, and the remainder of the Agreement will remain in full force and effect. Provisions that should reasonably be considered to survive termination of the Agreement will survive and be enforceable after such termination or expiration, including without limitation provisions relating to confidentiality, proprietary rights, indemnification, limitations of liability, effects of termination, and governing Law. The delay or failure of either Party to exercise any right or power provided in this Agreement or to require performance by the other Party of any provision of this Agreement will not impair such right or power, or be deemed a waiver thereof. A waiver by either Party of any covenants to be performed by the other or any breach thereof will not be taken or held to be a waiver of any succeeding breach thereof or of any other covenant contained in this Agreement or under any agreement. (g) Neither Party will be liable under this Agreement by reason of any damages, failure or delays in the performance of its obligations under such Agreement (except for the payment of money) on account of any cause beyond the reasonable control of such Party, such as fire, explosion, power failures, pest damage, lightning or power surges, strikes or labor disputes, water, war, civil disturbances, terrorism, acts of civil or military authorities, inability to secure raw materials, transportation facilities, fuel or energy shortages, performance or availability of communications services or networks and network facilities failures of any suppliers or service providers, or other causes beyond the Party's reasonable control. (h) Neither Party may assign (voluntarily, by operation of law, or otherwise) this Agreement or any rights or obligations under this Agreement without the other Party's prior written consent, which shall not be unreasonably withheld, provided however, that either Party may assign this Agreement without approval or consent to any affiliate or purchaser of all or substantially all of said Party's assets related to the subject matter of this Agreement or to any successor by way of merger, stock sale, consolidation or similar transaction. Any attempted assignment other than in accordance herewith will be void. Subject to the foregoing, the Agreement will bind and inure to the benefit of the Parties and their respective successors and permitted assigns. The Agreement completely and exclusively states the agreement of the Parties regarding its subject matter. This Agreement supersedes, and its terms govern, all prior proposals, agreements, or other communications between the parties, oral or written, regarding its subject matter. (i) This Agreement is intended for the sole and exclusive benefit of the Parties hereto, is not intended to confer any rights or benefits on any third party, and only the Parties may enforce such Agreement. This Agreement shall be binding on both Parties when signed on behalf of each Party, and may be signed in one or more counterparts, each of which shall be deemed to be an original and both of which when taken together will constitute one and the same agreement. Fax or electronically scanned copies of such executed documents may be used in lieu of the originals for any purpose. + + + + + +IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed by their duly authorized representatives as of the dates written below. Kubient Signature: /s/ Paul Roberts By: Paul Roberts Its: CFO Date: 2-6-2020 Customer Signature: /s/ Paul Caluori By: Paul Caluori Its: VP, Global Products Date: 02-05-2020 \ No newline at end of file diff --git a/full_contract_txt/KUBIENT,INC_07_02_2020-EX-10.14-MASTER SERVICES AGREEMENT_Part2.txt b/full_contract_txt/KUBIENT,INC_07_02_2020-EX-10.14-MASTER SERVICES AGREEMENT_Part2.txt new file mode 100644 index 0000000000000000000000000000000000000000..bd090cc2936218eaeb0a3d157bc21f29e4e79d2f --- /dev/null +++ b/full_contract_txt/KUBIENT,INC_07_02_2020-EX-10.14-MASTER SERVICES AGREEMENT_Part2.txt @@ -0,0 +1,7 @@ +EXHIBIT 'B' This Exhibit B is entered into as of the 26th day of March 2020 by and between Kubient, Inc. ("Kubient"), and The Associated Press ("Customer"). This Exhibit is hereby incorporated into and made a part of the Master Services Agreement (the "Agreement") between the Parties (Effective Date: February 5, 2020). NATURE OF ENGAGEMENT: Customer has retained Kubient to help increase revenue from its consumer offerings, including but not limited to its websites, apps, videos, and podcasts. SERVICES: Kubient shall provide to Customer advertising and related business revenue consultation with respect to the AP News site, AP News mobile app, AP DNE sites and widgets. This includes all categories identified in the threshold table in Schedule 1 to Exhibit B. REVENUE SHARE/FEE: Commencing on March 1, 2020 and thereafter, the Parties shall share revenue generated from Customer's consumer offerings, including but not limited to its content, technology, traffic, data, websites, apps, videos and podcasts, without offset and regardless of which Party is responsible for securing such revenue, as per the attached Schedule 1. RECONCILIATION/PAYMENT TERMS: The Parties agree to reconcile revenue numbers and the revenue share calculations no later than 10 days following the end of each calendar month during which the Services were rendered. Subject to the doctrine of sequential liability, payment shall be made to the appropriate Party net 30 days from the end of the calendar month. NON-CIRCUMVENT: As part of the Services provided under the Agreement and any applicable exhibits, Kubient will be working with and introducing certain third-party advertisers, sponsors, agencies, media buyers, service providers, vendors, publishers, affiliates and/or media partners (collectively "Third-Party") with whom Customer does not have a pre-existing relationship. During the Term and any renewal terms of the Agreement, and for a period of one (1) year following the expiration or earlier termination thereof, Customer agrees not to work with, directly or indirectly, any Third-Party that Customer comes to know through disclosure by Kubient as part of the Services, without the express written consent of Kubient and compensation to Kubient under the applicable exhibit and/or schedule. Provided however, this provision shall not apply in the event Customer can establish, in writing, that it had a preexisting working relationship with such Third-Party prior to the Agreement and without Kubient's assistance. Customer acknowledges that this provision is reasonable and necessary for the protection of Kubient and that Kubient will be irrevocably damaged if such covenant is not specifically enforced. Customer further agrees that Kubient will be entitled to seek injunctive relief for the purpose of restraining Customer from violating this covenant (and no bond or other security shall be required in connection therewith) in addition to any other relief to which Kubient may be entitled under the Agreement. NON-SOLICITATION: During the Term and any renewal terms of the Agreement, and for a period of one (1) year following the expiration or earlier termination thereof, Customer shall not, without Kubient's prior written consent, directly or indirectly (i) solicit or encourage any person to leave the employment or other service of Kubient; or (ii) hire, on behalf of Customer or any other person or entity, any person who has left the employment of Kubient within the one (1) year period following the termination or end of that person's employment. During the Term and any renewal terms of the Agreement, and for a period of one (1) year following the expiration or earlier termination thereof, Customer shall not, whether for its own account or for the account of any other person or entity, interfere with the relationship of Kubient with, or endeavor to entice away from Kubient, any person or entity who was or is a an employee or Third-Party of Kubient. CONFLICTING TERMS: The Schedule 1 shall supersede the flat fee and Initial Revenue Share set forth in Exhibit A. The payment term provision above shall supersede the payment term provision set forth in Exhibit A. IN WITNESS WHEREOF, the parties hereto have caused this Exhibit A to be executed by their duly authorized representatives as of the 26th day of March, 2020. Kubient Signature: By: /s/ Paul Roberts Its: President Date: 3/27/2020 Customer Signature: By: /s/ Ted Mendelsohn Its: VP, Commercial Mkts Date: 3/27/2020 + + + + + +SCHEDULE 1 TO EXHIBIT 'B' This Schedule 1 to Exhibit B ("Schedule 1") is entered into as of the 26th day of March, 2020 by and between Kubient, Inc. ("Kubient"), and The Associated Press ("Customer"). This Schedule 1 is hereby incorporated into and made a part of Exhibit B to the Master Services Agreement between the Parties (Effective Date: February 5, 2020). Monthly Revenue* Below Threshold Above Threshold Type Threshold Customer Kubient Customer Kubient Programmatic/Display $ 300,000.00 90% 10%** 50% 50% Video $ 30,000.00 100% 0 % 50% 50% Direct Deals*** Undertone 100% 0 % 50% 50% Native**** $ 100,000.00 100% 0 % 50% 50% Data/Newsletter $ - 0 % 0 % 50% 50% Podcasts $ - 0 % 0 % 50% 50% Other $ - 0 % 0 % 50% 50% *All "Revenue" calculations shall refer to gross revenue actually received by the collecting party less client credits and allowances for returns, but without any deduction or offset for costs incurred by either Party, except for "Direct Deals". For "Direct Deals", "Revenue" shall refer to Net Revenue, defined as gross revenue actually received by the collecting party less client credits and allowances for returns and less any agreed upon costs incurred by either Party in support of a "Direct Deal" for such things as production, photography, video, content creation and/or media buying (i.e. Nativo). Programmatic/Display refers to revenue generated by the following clients and any additional clients that AP adds during the term: Google Adexchange, Index Exchange, OpenX, Smaata, Rhythm One; Rubicon; TripleLift; Amazon; DistrictM; AppNexus; Xandr; Media.net; Criteo; Sovm; Saamba; AOL Marketplace **Kubient "Below Threshold" monthly compensation shall act as a guaranteed draw against any Kubient "Above Threshold" monthly compensation generated from any/all Types of "Revenue". This compensation shall expire on September 1, 2020, such that Kubient shall not be entitled to or receive after the month of August. ***"Direct Deals" shall refer to any sort of sponsorship or customized off-platform opportunity (e.g., via AP's native or social media channels) introduced by Kubient. Kubient shall have no right to or interest in "Revenue" generated from Direct Deals with Regions Bank, Undertone, or Healthgrades. Kubient shall have no right to or interest in "Revenue" generated from Nativo, except for new "Direct Deals" introduced by Kubient that generate Net Revenue. ****"Native" ad-based revenue is generated by Taboola. Kubient shall have no right to or interest in any "Above Threshold" Native ad- based revenue generated by Taboola. ACKNOWLEDGEMENT: Customer acknowledges and agrees that the above calculations are based on its own revenue reports and present a fair, reasonable and accurate representation of its monthly average digital revenue. IN WITNESS WHEREOF, the parties hereto have caused this Exhibit B to be executed by their duly authorized representatives as of the 26th day of March, 2020. Kubient Signature: By: /s/ Paul Roberts Its: President Date: 3/27/2020 Customer Signature: By: /s/ Ted Mendelsohn Its: VP, Commercial Mkts Date: 3/27/2020 \ No newline at end of file diff --git a/full_contract_txt/KitovPharmaLtd_20190326_20-F_EX-4.15_11584449_EX-4.15_Manufacturing Agreement.txt b/full_contract_txt/KitovPharmaLtd_20190326_20-F_EX-4.15_11584449_EX-4.15_Manufacturing Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..86f100f4cc4d15e22770491314649e37c118bd2c --- /dev/null +++ b/full_contract_txt/KitovPharmaLtd_20190326_20-F_EX-4.15_11584449_EX-4.15_Manufacturing Agreement.txt @@ -0,0 +1,183 @@ +Exhibit 4.15 THE SYMBOL "****" DENOTES PLACES WHERE PORTIONS OF THIS DOCUMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. SUCH MATERIAL WILL BE FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. PRODUCT MANUFACTURING AGREEMENT This Product Manufacturing Agreement ("Agreement") is made as of the Effective Date by and between DEXCEL LTD., with its registered address at ****, Israel ("Dexcel") and KITOV Pharma Ltd., with its registered office at 132 Menachem Begin Road, Azrieli Center, Tel Aviv, 6701101, Israel ("Kitov"). Dexcel and Kitov are hereinafter jointly the "Parties" and individually a "Party." WHEREAS: Dexcel is a pharmaceutical company engaged in various activities including, but not limited to, the research, development, manufacture, and marketing of various drugs and pharmaceutical specialties in various dosage forms; WHEREAS: Kitov is a pharmaceutical company engaged in various activities including, but not limited to, the development of pharmaceutical products; WHEREAS: Kitov and Dexcel entered into a Development Services Agreement on April 1, 2014 ("Development Agreement"), pursuant to which Dexcel performed certain development services for Kitov with respect to the Product; WHEREAS: Kitov desires that Dexcel manufacture and package the Product for Kitov in accordance with the terms of this Agreement, and Dexcel is willing to manufacture and package the Product for Kitov in accordance with the terms of this Agreement. NOW, THEREFORE, in consideration of the mutual covenants herein contained, the Parties, intending to be legally bound, hereby agree as follows: 1 Definitions For the purpose of this Agreement, the terms set forth in this clause, whether used in singular or plural form, shall mean, unless otherwise expressly provided for in this Agreement or the context otherwise requires, the following: 1.1 "Affiliate" of a Party shall mean any corporation or other business entity directly or indirectly Controlled by, under common Control with, or in the Control of such Party. 1.2 "Anti-Corruption and Anti-Bribery Laws" shall mean the United States Foreign Corrupt Practices Act of 1977, as amended, the Bribery Act 2010 (2010 Chapter 23) of the Parliament of the United Kingdom, any rules or regulations under such acts, and any other anti-corruption or anti-bribery statutes, laws or regulations applicable to a Party. 1.3 "API" shall mean the active pharmaceutical ingredients Celecoxib and Amlodipine Besylate. + +Source: KITOV PHARMA LTD., 20-F, 3/26/2019 + + + + + +1.4 "Batch" shall mean the defined quantity of the Product processed in a single process or series of processes in a manner designed to be homogeneous. The Batch size for the Product is **** tablets. 1.5 "cGMPs" or "Good Manufacturing Practice" shall mean the part of quality assurance which ensures that the Product is consistently produced and controlled to the quality standards appropriate to their intended use, the principles and guidelines of which are specified in European Commission Directive 2003/94/EC and the FDA's current Good Manufacturing Practices, particularly 21 CFR § 210 et seq., and 21 CFR §§ 600-610, as both may be amended from time to time. 1.6 "Change of Control" shall mean (i) any change, sale, merger, reorganization, or any other event or action that results in a third party, which is a material competitor to the other Party to this agreement, acquiring: (a) all or substantially all of the business or assets of a Party relating to this Agreement, (b) Control, directly or indirectly, of such Party (and/or any corporate entity that Controls, directly or indirectly, such Party), or (ii) any assignment or delegation of, sale or transfer of a Party's rights and obligations under this Agreement (or any part hereof) to a third party. Notwithstanding anything in the immediately preceding paragraph to the contrary, where the Party in question is Dexcel, any of the foregoing events or actions shall not be considered a Change of Control where any one or more of the relevant third party or parties referred to in clause (i) above is (A) a Family Member, or (B) any entity Controlled by Mr. **** and/or a Family Member. 1.7 "Claims" shall mean any demands, claims, actions, causes of action, assessments, losses, damages, injuries, liabilities, costs and expenses (including, without limitation, reasonable attorneys' fees and expenses) filed, raised, initiated or made by any governmental authority and/or third party. 1.8 "Confidential Information" shall have the meaning set forth in Section ​7.1. 1.9 "Confirmed Order" shall have the meaning set forth in Section 3.3.2. 1.10 "Control" or "Controlled" shall mean possession of more than fifty percent (50%) of the share capital of a corporation or other business entity, and/or the power to direct or cause the direction of the management and policies of a corporation or other entity whether through the ownership of voting securities, by contract or otherwise. 1.11 "Delivery" shall mean the time when the Product is placed at the disposal of Kitov at Dexcel's Facility based on an **** (Incoterms® 2010). 1.12 "Distributors" shall mean any Person under contract with Kitov or any of its Affiliates for the distribution of the Product in a certain territory or territories. 1.13 "Effective Date" shall mean the date of signature of the last Party to execute this Agreement. 1.14 "EMA" means the European Medicines Agency or any successor entity. 1.15 "Family Member" shall mean ****. 1.16 "FDA" means the U.S. Food and Drug Administration or any successor entity. + +2 + +Source: KITOV PHARMA LTD., 20-F, 3/26/2019 + + + + + +1.17 "Force Majeure" shall mean an event beyond a Party's reasonable control which prevents such Party from performing its obligations hereunder, such events may include, but not be limited to, Acts of God (including fire, flood, earthquake, storm, hurricane or other natural disaster), war, invasion, act of foreign enemies, hostilities (regardless of whether war is declared), civil war, rebellion, revolution, insurrection, military or usurped power or confiscation, terrorist activities, any extraordinary military operation which requires a large military reserve mobilization, nationalization, governmental activities relating to emergency situations, blockage, embargo, strikes or lockouts. 1.18 "Human Trafficking" shall mean the recruitment, transportation, transfer, harboring, or receipt of men, women and/or children by improper means (such as force, abduction, fraud, or coercion) for an improper purpose including forced labor or sexual exploitation. 1.19 "Intellectual Property Rights" shall mean any inventions, information, results, data, hypotheses, discoveries, developments, know- how, production methods, laboratory test results, owned or in the possession of a Party, including, but not limited to, any patent, copyright, registered design, trademarks, trade secrets, or other industrial or intellectual property right, including any and all improvements, enhancements, derivatives and residuals, whether registered or unregistered and applications for any of the foregoing in any country, and any other intellectual property rights. 1.20 "Joint IP" shall have the meaning set forth in Section 8.3 of the Development Agreement as shown in Exhibit A 1.21 "Kitov Data" shall mean, Kitov Foreground IP, including Patent families embodied in Patents applications no. 13/026,741, 12/990,724, WO2009/154944 and WO2011/100659, and Kitov's Confidential Information.. 1.22 "Kitov Foreground IP" shall have the meaning set forth in Section 8.1 of the Development Agreement as shown in Exhibit A. 1.23 "Kitov Product IP" shall have the meaning set forth in Section ​2.1.1. 1.24 "Label", "Labeled" or "Labeling" shall refer to: (i) all labels and other written, printed or graphic matter on the Product or any Packaging utilized with the Product, or (ii) any written material accompanying the Product, including, without limitation, patient information leaflets ("PIL"). 1.25 "Livery" or "Liveries" shall mean the graphics and text appearing on each Pack of the Product, including the Trademark and any logos of Kitov and/or its Distributors, including, inter alia, the requirements for serialization, as notified by Kitov to Dexcel in writing from time to time. 1.26 "Marketing Authorization" shall mean an application to the appropriate Regulatory Authority for approval to market the Product in any particular jurisdiction and all amendments and supplements thereto 1.27 "Minimum Order Requirements" shall mean multiples of a full Batch. 1.28 "Pack" shall mean a bottle containing either **** or **** tablets of the Product, Labeled with the Livery. 1.29 "Packaging" shall mean all primary containers (including bottles or blisters) for the Product, plus cardboard cartons, PILs, shipping cases or any other like matter used in packaging and/or accompanying the Product. + +3 + +Source: KITOV PHARMA LTD., 20-F, 3/26/2019 + + + + + +1.30 "Person" means any individual, entity or corporation of any kind, domiciled in any jurisdiction. 1.31 "Product" shall mean tablets containing the APIs Celecoxib/Amlodipine in three dosage strengths (200/10mg, 200/5mg and 200/2.5mg), Labelled with the Livery and in Packs. 1.32 "Quality Agreement" shall mean the agreement to be entered into by the Parties pursuant to Section ​4.1 below, which allocates the pharmaceutical responsibilities and obligations of the Parties with respect to Product quality. 1.33 "Quarter" shall mean the relevant three (3) month period ending on 31 March, 30 June, 30 September and 31 December in any calendar year, and any shorter period commencing on a day following the end of a Quarter and ending on the expiration or termination of this Agreement. 1.34 "Regulatory Authority" shall mean, in a particular country or jurisdiction, any applicable governmental authority involved in granting a Marketing Authorization in such country or jurisdiction, including, inter alia, the FDA and EMA. 1.35 "Specifications" shall mean the pharmacochemical, manufacturing, stability and other specifications of a Product defined in such Product's Marketing Authorization, subject to change from time to time as reasonably required to meet any requirements of the relevant Health Authorities. 1.36 "Supply Commencement Date" shall mean the date upon which Dexcel makes the first Delivery of the Product to Kitov pursuant to an Confirmed Order. 1.37 "Supply Price" shall have the meaning set forth in Section ​3.4. 1.38 "Term" shall have the meaning set forth in Section ​5.1. 1.39 "Trademark" shall mean Kitov's trademark Consensi™. 1.40 "Working Day" shall mean a day excluding Friday and Saturday and, for the avoidance of doubt, excluding statutory holidays in the State of Israel. 1.41 "Year" shall mean the twelve (12) months following the Supply Commencement Date and each successive twelve (12) month period commencing on the anniversary of the Supply Commencement Date. 2 Basics of the Agreement 2.1 Grant of Rights; Exclusivity 2.1.1 Kitov hereby grants to Dexcel a fully paid, limited license right to use all of its Confidential Information and Intellectual Property Rights (including, inter alia, the Kitov Foreground IP, Kitov Data, Kitov's share of the Joint IP, and the Trademark ("Kitov Product IP")) necessary in order for Dexcel to manufacture, Label, package with the Livery, test and release the Product for shipment, exclusively for Kitov, for and during the Term. + +4 + +Source: KITOV PHARMA LTD., 20-F, 3/26/2019 + + + + + +2.2 Kitov shall be responsible (itself or through its Affiliates and Distributors) for all costs related to the maintenance of or changes to the Specifications, materials, suppliers of the API and/or other materials used for the manufacture or Packaging of the Product, regulatory dossiers, and/or the Marketing Authorizations for the Product. Dexcel shall provide any and all reasonable assistance to Kitov in this respect during the Term. 3 Purchase and Supply of Product 3.1 Packaging 3.1.1 Kitov shall provide Dexcel with reasonable Packaging and Labelling instructions for the Livery (by SKU), including, but not limited to, artwork for Labels and patient leaflets, as soon as practicable following the Effective Date; provided, however, that Kitov shall provide such instructions at least one hundred and twenty (120) days prior to the anticipated Supply Commencement Date. Kitov shall provide Dexcel with its Product Packaging and Labeling instructions, including, but not limited to, approved artwork, with respect to any new SKU (for a new Product Distributor or new country), as well as changes to or destruction of existing materials at least one hundred and fifty (150) days prior to the anticipated first supply of each such SKU. 3.1.2 Kitov shall ensure that the Packaging and Labelling instructions and the Livery shall comply in all respects with the relevant Marketing Authorizations. 3.1.3 In the event that Kitov has Packaging requirements that are not standard for Dexcel, the Parties shall discuss the implementation and costs of the same in good faith. Any additional costs and expenses incurred by Dexcel as a result of such additional requirements shall be borne solely by Kitov. 3.1.4 Dexcel shall order the Packaging materials required for the Product Packaging (including, but not limited to, all Labeling); provided that such orders shall not exceed the forecasted demand of such materials for the next following twelve (12) months. In the event that any Product artwork needs to be changed and/or discarded further to Kitov's written instructions or due to requirements of a relevant Regulatory Authority, Kitov shall fully bear any costs arising from any such changes, including the costs of any discarded Packaging materials and/or any destruction costs. However, if such changes are required to be carried out at Dexcel's request, the cost for such changes shall be assumed by Dexcel. 3.2 Kitov shall provide Dexcel with a twelve (12) month rolling forecast of its Product requirements (by SKU), no later than the fifteenth (15th) Working Day of each Quarter ("Forecast"). The first Forecast will be provided by Kitov to Dexcel at least six (6) months less one week prior to the anticipated Supply Commencement Date and shall represent Kitov's best estimates of the quantity of each Product SKU to be ordered during the twelve (12) months period covered by the Forecast;. 3.3 Purchase Orders 3.3.1 Kitov shall provide Dexcel with written purchase orders meeting the Minimum Order Requirements and in a form reasonably acceptable to Dexcel, and which shall specify at least the following: a description of the Product ordered, the quantity ordered, the current Supply Price, and the required delivery date thereof, such required delivery date to be not less than one hundred and twenty (120) days from the purchase order placement date (one hundred and eighty (180) days before the anticipated Supply Commencement Date and/or the launch of a new SKU). + +5 + +Source: KITOV PHARMA LTD., 20-F, 3/26/2019 + + + + + +3.3.2 All Kitov purchase orders are subject to confirmation in writing by Dexcel, which confirmation shall be delivered by e-mail within ten (10) Working Days of Dexcel's receipt of each purchase order (each, a "Confirmed Order"). If Kitov does not receive a response from Dexcel within such ten (10) Working Days, Kitov shall contact Dexcel to confirm that Dexcel has received the purchase order. Except as provided in Section ​3.3.3, Dexcel shall use its best endeavors to accept all purchase orders placed by Kitov, which meet the Minimum Order Requirements and the remaining terms and conditions of this Agreement. 3.3.3 In the event that a Kitov purchase order is greater than Kitov's Forecast by more than **** percent (****%), Dexcel shall make a good faith determination of its ability to accept such purchase order, consistent with its manufacturing schedule, the availability of the Product API and other materials, and its other planning requirements, in Dexcel's sole discretion. 3.3.4 Dexcel will supply the Product only on the terms of this Agreement or any additional terms specifically agreed upon in writing by both parties; in the event of any conflict, the provisions of this Agreement shall prevail. 3.3.5 Dexcel shall use reasonable commercial efforts to deliver the Confirmed Orders to Kitov in full on the required delivery date. Each shipment shall be accompanied by certificates of analysis and such other documents required to be included pursuant to the Quality Agreement. 3.3.6 Dexcel shall supply the Product with at least **** percent (****%) of the shelf life upon Delivery unless otherwise agreed by the Parties. 3.3.7 The Parties shall store and transport the Product in compliance with applicable laws and regulations for pharmaceutical products, the Quality Agreement and the relevant Marketing Authorization. Dexcel will be responsible for packaging the Product in a manner appropriate for shipment and for including data loggers with each such shipment in accordance with the provisions of the Quality Agreement. 3.3.8 Kitov shall be solely responsible, at its own cost and expense, for all activities related to the sale, marketing, shipping, distribution, storage following the delivery of the Products, order fulfilment, invoicing, collection, and any other activities directly or indirectly related to the promotion, marketing, distribution, or sale of the Product in any country. 3.4 The Supply Prices for the Product shall be: + +Strength Pack Size Supply Price/Pack (in US Dollars) 200/10mg Bottle **** tablets **** 200/10mg Bottle **** tablets **** 200/5mg Bottle **** tablets **** 200/5mg Bottle **** tablets **** 200/2.5mg Bottle **** tablets **** 200/2.5mg Bottle **** tablets **** + +6 + +Source: KITOV PHARMA LTD., 20-F, 3/26/2019 + + + + + +3.5 Supply Price modification 3.5.1 Commencing with ****, Dexcel may adjust the Supply Price for the next following Year not more often than ****. 3.5.2 Dexcel shall deliver to Kitov, ****, a revised Supply Price to be effective for Product delivered on or after the first day of the next Year; such revised Supply Price shall not be applicable to then-outstanding Confirmed Orders. 3.6 Payment Terms 3.6.1 All payments shall be made by bank transfer to such account as may be indicated by Dexcel, Dexcel and Kitov each bearing their own bank transfer costs, net thirty (30) days from Delivery. All payments shall be made in U.S. Dollars. 3.6.2 With the exception of amounts in legitimate dispute, in the event that Kitov is more than twenty one (21) Working Days late in meeting the payment schedule set forth in Section ​3.6.1, Dexcel may, upon seven (7) Working Days' written notice to Kitov (i) delay the delivery of Product ordered until the amounts in arrears are paid, (ii) charge penalties on late payment with interest at the rate of **** per month from the due date for payment until payment is actually made, and/or (iii) change or limit the terms of payment for future orders, including requiring the prepayment for new orders or the provision of a letter of credit by Kitov (at Kitov's expense) from a bank reasonably acceptable to Dexcel. 3.6.3 With the exception of amounts in legitimate dispute, in the event that Kitov fails to make any payment due hereunder within ninety (90) days following the original due date, it shall be deemed a material breach of this Agreement and shall entitle Dexcel, in its sole discretion, to terminate this Agreement with immediate effect. 3.7 Product Acceptance 3.7.1 The Product supplied by Dexcel to Kitov shall correspond to the respective Product Specifications and the relevant Marketing Authorization and shall be manufactured in compliance with cGMP and the Quality Agreement. 3.7.2 Kitov shall provide Dexcel with written notification of any shortfalls in shipment quantity, and (a) any out-of-specification temperature excursions based on the downloaded data logger information following compliance with the provisions of the Quality Agreement, and/or (b) any failure of the Product to meet the Specifications which are apparent upon visual inspection and/or identification testing of the Product delivered to it by Dexcel (each of (a) and (b) being an "Apparent Defect"), such notification to be provided within thirty (30) Working Days of receipt of the Product at Kitov's warehouse, accompanied by samples of any such allegedly defective Product and any such Product shall not be removed from quarantine until their status is resolved. In the event that a defect is not apparent upon visual inspection during the shelf life of the Product ("Hidden Defect"), Kitov shall use commercially reasonably best efforts to provide Dexcel with written notification within thirty (30) Working Days of discovering the same, to be accompanied by samples of any such allegedly defective Product, if such samples are available In the event of any failure by Kitov to provide Dexcel with written notification of any such shortfall, Apparent Defect or Hidden Defect within the respective aforementioned periods, it shall be deemed as Kitov having accepted the relevant consignment. + +7 + +Source: KITOV PHARMA LTD., 20-F, 3/26/2019 + + + + + +3.7.3 Dexcel shall use its best efforts to make up any shortfall in shipment quantity as soon as practicable after being notified by Kitov of such shortfall. In the event of Product which Kitov claims have Apparent Defects or Hidden Defects, Dexcel shall have up to thirty (30) Working Days after receipt of the samples to show that the Product in question meets the Specifications ("Period"). In the event that no agreement is reached by the end of the Period, Kitov shall have the right to submit a new purchase order, which Dexcel shall satisfy as soon as possible using reasonable commercial efforts ("Replacement Shipment"), and Dexcel shall require proof that Kitov has destroyed that part or all of the original shipment with claimed defective Product. In the event that Kitov has fully paid the Supply Price for the claimed defective Product, Dexcel shall supply the Replacement Shipment at no additional Transfer Price. In the event that Kitov has not fully paid the Supply Price for the claimed defective Product, Kitov will pay for the Replacement Shipment in accordance with the provisions of this Agreement (assuming the Replacement Shipment meets the Specifications). 3.7.4 Dexcel's responsibility for Product supplied by it to Kitov failing to meet the Specifications shall be limited to the replacement of the Product or the refund of the Supply Price paid by Kitov for such order, as agreed by the parties, except as otherwise provided under this Agreement. 3.7.5 In the event that the Parties do not agree on whether the Product meets the Specifications by the end of the Period, the Parties agree to nominate an independent, reputable laboratory approved by the Regulatory Authority ("Laboratory"), acceptable to both Parties, which shall examine representative samples taken from such consignment, using the methods of analysis agreed upon by both Parties. The result shall be binding upon both Parties. Any charges for such examination shall be borne by the Party found to be wrong in its assessment. In the event that Kitov receives a Replacement Shipment and the Laboratory decides that the first shipment failed to meet the Specifications, Kitov shall only have to pay Dexcel for the Replacement Shipment. In the event that Kitov receives a Replacement Shipment and the Laboratory decides that the first shipment met the Specifications, Kitov shall have to pay for both shipments. 4 Quality Agreement; Product Complaints and Recalls 4.1 The Parties shall conclude the Quality Agreement as soon as practicable after the Effective Date, but not later than ninety (90) days prior to the shipment of the initial order of the Product to Kitov. 4.2 In case of a conflict between this agreement and the Quality Agreement, this agreement shall prevail on any business matters, and the Quality Agreement shall prevail on any quality related matters. + +8 + +Source: KITOV PHARMA LTD., 20-F, 3/26/2019 + + + + + +4.3 Kitov shall have the right (at reasonable intervals, with reasonable prior written notice and during normal business hours, and not more often than annually) to inspect Dexcel's manufacturing facilities used in the manufacture, storage, testing, and/or release for shipment of the Product. 4.4 Kitov shall be responsible for the execution of Product recall and crisis management policies regarding Product issues in the Territory. In the event of a Product recall in the Territory, Kitov shall promptly advise Dexcel and the Parties shall reasonably cooperate with each other to take all necessary actions in that regard. 4.5 Kitov shall be responsible for bearing the cost and expenses of any recall resulting from any of the following: (i) damage to the Products which occurred after Delivery of the Products from Dexcel; (ii) any failure of the Livery for the Product to comply with local laws or regulations in the relevant Territory; or (iii) any other action or non-action of Kitov or a Distributor as promoter, marketer, distributor and seller of the Product in the Territory. 4.6 Dexcel shall be responsible for bearing the cost and expenses of any recall resulting from: (i) Dexcel's acts or omissions as manufacturer of the Product, or (ii) the Product supplied by Dexcel not being in conformity with the Specifications at Delivery. 5 Term and Termination 5.1 The Agreement shall commence on the Effective Date and remain in full force and effect for an initial term of **** from the Supply Commencement Date of the Product ("Initial Term"). Following the Initial Term, the Agreement shall automatically be renewed for additional periods of **** (each, a "Renewal Term," and, together with the Initial Term, the "Term")), unless a Party provides written notification of non-renewal to the other Party at least **** of the Initial Term or a Renewal Term. 5.2 This Agreement may be terminated: 5.2.1 by either Party, effective immediately upon written notice to the other Party, if (i) a receiver, trustee, or liquidator of the other Party is appointed for any of properties or assets of the other Party; (ii) the other Party makes a general assignment for the benefit of its creditors; (iii) the other Party files a petition under the relevant statute for the bankruptcy or reorganization of the other Party or any arrangement with its creditors or readjustment of its debt, or its dissolution or liquidation, or such a petition is filed against the other Party and is not dismissed within sixty (60) days thereafter; or (iv) the other Party ceases doing business generally or commences dissolution or liquidation proceedings; 5.2.2 in the event that a Party is in material breach of this Agreement or the Quality Agreement and fails to remedy such breach within thirty (30) calendar days from receipt of written notification of same, by the non-breaching Party; 5.2.3 by Dexcel, in the event that the provisions of Section ​3.6.3 is applicable; or 5.3 in the event of a Change of Control, the Party which was not subject to the Change of Control may terminate this Agreement upon six (6) months advance written notification. The affected Party is obligated to notify the other Party of its decision to terminate within thirty (30) days following notice of the Change of Control. + +9 + +Source: KITOV PHARMA LTD., 20-F, 3/26/2019 + + + + + +5.4 Rights and Obligations Following Expiration or Termination It is specifically understood by Dexcel and Kitov that, upon any expiration or termination of this Agreement for any reason, the rights and obligations of the Parties shall include the following: 5.4.1 Neither Party shall be relieved of its duty to discharge in full all obligations accrued or due prior to the date of termination, cancellation or expiration; all sums owed by either Party to the other shall become immediately due and payable thirty (30) days after such date. 5.4.2 Each Party shall remove all references to the other, if any, from its letterhead, business forms, advertising literature, websites and place of business, and shall not thereafter use any name or trademark suggesting that it has any current relationship with the other Party. 5.4.3 Each Party shall return to the other all of the other's Confidential Information and any other material, information or samples relating to the Product which have been provided or made available to the other and shall not retain any copies and the Parties further agree not to make any further use of each other's Confidential Information or any other information, data or samples relating to the Product provided or made available by the other Party, except as necessary to comply with its statutory, regulatory or licensing obligations; provided, however, that Kitov may retain such material, information and/or samples relating to the Product as may be necessary for Kitov to continue to sell the Product as permitted by Section ​5.4.4 below, following which, Kitov shall refrain from making any further use of Dexcel's Confidential Information or any other information, data or samples and shall return any remaining Confidential Information and material, information or samples relating to the Product. 5.4.4 The provisions of this Section ​5.4.4 shall not be applicable if Dexcel shall have terminated this Agreement pursuant to Sections ​5.2.2 or ​5.2.3. Any Confirmed Orders made by Dexcel on or before the expiration or termination of this Agreement but not yet delivered by Dexcel shall be delivered to Kitov and Kitov shall be liable to pay for the same in accordance with the provisions of the Agreement. Kitov shall be entitled to sell or otherwise dispose of its remaining stock of the Product until the end of the inventory's shelf life. 5.4.5 In no event shall any expiration or termination of this Agreement excuse either Party from any breach or violation of this Agreement and full legal and equitable remedies shall remain available therefor. The rights and obligations of the Parties to this Agreement set forth in 4, 5, 6, 7, 9 and 10 shall survive any expiration or termination of this Agreement. 6 Force Majeure 6.1 If a Party asserts the occurrence of an event of Force Majeure as an excuse for its failure or inability to perform such Party's obligations, then the obligations of the Parties hereunder shall be suspended for so long as the Force Majeure event renders performance of the Agreement impossible or impractical; provided, however, that (a) the nonperforming Party shall timely notify the other Party in writing of the likelihood or actual occurrence of an event of Force Majeure by the nonperforming Party; (b) the nonperforming Party must reasonably prove that it took all commercially reasonable steps to minimize delay or damages caused by such event; and (c) the nonperforming Party substantially fulfilled all non-excused obligations, unless the other Party has notified the nonperforming Party to the contrary. + +10 + +Source: KITOV PHARMA LTD., 20-F, 3/26/2019 + + + + + +6.2 In the event that such event of Force Majeure continues for a period in excess of sixty (60) days, the Parties agree to undertake good faith discussions with a view to reaching some other mutually acceptable and reasonable arrangement for alleviating the effects of such Force Majeure. In the event that the Parties are unable to agree on such an arrangement, either Party shall be entitled to provide immediate written notice of termination to the other Party. 7 Confidential Information 7.1 For the purposes of this Agreement, "Confidential Information" shall mean, with respect to a Party, all information of any kind whatsoever (including but not limited to, data, compilations, formulae, models, patent disclosures, procedures, processes, projections, protocols, results of experimentation and testing, specifications, strategies and techniques), and all tangible and intangible embodiments thereof of any kind whatsoever (including but not limited to apparatus; compositions; documents; drawings; machinery; patent applications; records and reports), which is proprietary to the disclosing Party or that is marked or identified by the disclosing Party or otherwise acknowledged by the recipient Party to be confidential to the disclosing Party at the time of disclosure to the other Party. 7.2 Confidential Information shall not include: 7.2.1 Information that, at the time of disclosure by the disclosing Party, is in the public domain or that, after disclosure, becomes part of the public domain except through a breach of this Agreement by the recipient Party; or 7.2.2 Information that, at the time of disclosure by the disclosing Party, was known to the recipient Party and was not acquired directly or indirectly from the disclosing Party and which the recipient Party can establish by competent proof was in its possession at the time of disclosure; or 7.2.3 Information that the recipient Party can establish by competent proof was lawfully received from a third Party 7.3 The Parties recognize that a Party within the framework of this Agreement may disclose Confidential Information only in accordance with the terms of this Agreement (including this section 7)and that such disclosure represents confidential and valuable proprietary information. Each Party promises and undertakes not to disclose the other Party's Confidential Information to any other person other than those of its and its Affiliates' employees, directors, officers, consultants, and Distributors ("Representatives") who must have access to such information in order to utilize it for the purposes of this Agreement. The recipient Party will take all reasonable steps to encourage and require its Representatives to preserve such trust and confidence. 7.4 The recipient Party shall accord the Confidential Information disclosed by the disclosing Party with at least as careful treatment as the recipient Party accords to its own trade secrets, know how, and other proprietary information, but no less than a reasonable level of care. + +11 + +Source: KITOV PHARMA LTD., 20-F, 3/26/2019 + + + + + +7.5 The recipient Party agrees not to use Confidential Information for any purpose other than within the framework of the co-operation with the disclosing Party and to exercise its rights and carry out its obligations under this Agreement. Upon any expiration or termination of this Agreement, at the disclosing Party's request, the recipient Party agrees to return to the disclosing Party all Confidential Information disclosed to the recipient Party by the disclosing Party. 7.6 Nothing in this Agreement, nor any disclosure of Confidential Information by the disclosing Party to the recipient Party before or after its execution, shall operate to confer any rights upon the recipient Party (other than the rights set forth in this Agreement) nor be effective to license or transfer to the recipient Party any right, title or interest in the Confidential Information, which rights shall remain the disclosing Party's exclusive property. 7.7 The Parties agree that neither Party may issue or release, directly or indirectly, any press release, marketing material or other communications to third parties, the media or the public regarding the terms of this Agreement, the other Party hereto, the Product, or the transactions contemplated hereby without the prior written approval of the other Party hereto, such approval not to be unreasonably withheld, delayed or conditioned; provided, however, that nothing contained in this Agreement shall prevent or preclude any Party from making such disclosures as may be required by applicable law, including, but not limited to, any disclosures required by applicable securities laws. 7.8 Required Disclosure. Notwithstanding the provisions of this Section 7, the recipient Party may disclose the Confidential Information of the disclosing Party to the extent that such disclosure is reasonably necessary to: 7.8.1 prosecute or defend litigation; 7.8.2 comply with applicable governmental laws and regulations (including, without limitation, the applicable laws, rules, regulations or requirements of a securities exchange or another similar regulatory body); or 7.8.3 respond to a valid order, inquiry or request of, or make filings and submissions to, or correspond or communicate with, any government authority. In the event that the recipient Party deems it reasonably necessary to disclose the Confidential Information of the disclosing Party pursuant to this sub-Section 7.8, the recipient Party shall, to the extent possible, provide the disclosing Party with reasonable advance notice of such disclosure to afford the disclosing Party a reasonable opportunity to take the necessary measures to prevent or otherwise limit the disclosure, and in any event, the recipient Party shall limit the disclosure to the extent necessary to fulfill the subject purpose described above and take reasonable measures to ensure confidential treatment of such information. 8 Warranties, Indemnities and Insurance 8.1 Kitov represents, warrants and covenants as follows: 8.1.1 All necessary actions have been taken to enable it to execute and deliver this Agreement and perform its obligations hereunder. + +12 + +Source: KITOV PHARMA LTD., 20-F, 3/26/2019 + + + + + +8.1.2 This Agreement is a valid and binding obligation of Kitov enforceable against it in accordance with its terms. Kitov has the unencumbered right to enter into this Agreement and to fulfill its duties hereunder. It is not and will not become Party to any agreement in conflict herewith. 8.1.3 No approval, consent, order, authorization or license by, giving notice to or taking any other action with respect to, any governmental or regulatory authority is required in connection with the execution and delivery of this Agreement by Kitov and the performance by Kitov of its obligations hereunder. 8.1.4 With respect to the Kitov Product IP, the Trademark and any remaining Kitov trademarks and logos, Kitov warrants that, to the best of its knowledge, it has not interfered with, infringed upon, misappropriated, or otherwise come into conflict with any valid intellectual property rights of any third party, nor has Kitov received, to the best of its knowledge, any communications alleging any such interference, infringement, misappropriation, or violation (including any claim that Kitov must license or refrain from using any intellectual property rights of any third party). 8.1.5 The corporate policy of Dexcel is that all business be conducted within the letter and the spirit of the law. Kitov warrants and represents that it will conduct the business contemplated hereunder in a manner which is consistent with the Anti- Corruption and Anti-Bribery Laws, and it further warrants and represent that it will not: a) Offer or give, either directly or indirectly, money or anything else of value to any person or organization (including any government official) that is intended to, or could be seen as an attempt to, improperly influence or reward such other person or organization in order to obtain or retain business or secure a business advantage for such person or organization, Kitov (including its Affiliates, Distributors, agents, or other person associated with or acting on its or their behalf) or Dexcel. b) Request or accept, directly or indirectly, money or anything else of value if it is intended, or could be seen as an attempt, to compromise Kitov's independence or judgment, or to improperly influence a business decision of Kitov or Dexcel. 8.1.6 Kitov warrants that it has established and maintains a compliance program and reasonable internal controls and procedures appropriate to ensure that Human Trafficking is not taking place in any part of its supply chain and in any part of its own business, including, inter alia, the following: a) Kitov and its Affiliates (and including any Distributors, agents, or other person associated with or acting on their behalf) do not employ any person younger than the applicable legal minimum age for working, and children and young people less than eighteen years of age are not employed in hazardous conditions. a) Kitov and its Affiliates (and including any Distributors, agents, or other person associated with or acting on their behalf) do not employ any person on an involuntary basis and do not use forced, prison, bonded, or indentured labor. + +13 + +Source: KITOV PHARMA LTD., 20-F, 3/26/2019 + + + + + +b) Kitov and its Affiliates (and including any Distributors, agents, or other person associated with or acting on their behalf) fairly compensate their employees by paying wages and providing benefits that meet or exceed the applicable, legally mandated minimum requirements in the countries in which they operate. 8.2 Dexcel represents, warrants and covenants as follows: 8.2.1 All necessary actions have been taken to enable it to execute and deliver this Agreement and perform its obligations hereunder. 8.2.2 Dexcel owns or has a valid license to all Dexcel IP rights relating to the Product. This Agreement is a valid and binding obligation of Dexcel enforceable against it in accordance with its terms. Dexcel has the unencumbered right to enter into this Agreement and to fulfill its duties hereunder. It is not and will not become Party to any agreement in conflict herewith. 8.2.3 No approval, consent, order, authorization or license by, giving notice to or taking any other action with respect to, any governmental or regulatory authority is required in connection with the execution and delivery of this Agreement by Dexcel and the performance by Dexcel of its obligations hereunder. 8.2.4 Dexcel warrants and represents that it will conduct the business contemplated hereunder in a manner which is consistent with the Anti-Corruption and Anti-Bribery Laws, and it further warrants and represent that it will not: a) Offer or give, either directly or indirectly, money or anything else of value to any person or organization (including any government official) that is intended to, or could be seen as an attempt to, improperly influence or reward such other person or organization in order to obtain or retain business or secure a business advantage for such person or organization, Kitov or Dexcel. b) Request or accept, directly or indirectly, money or anything else of value if it is intended, or could be seen as an attempt, to compromise Dexcel's independence or judgment, or to improperly influence a business decision of Kitov or Dexcel. 8.2.5 Dexcel warrants and represents that it has established and maintains a compliance program and reasonable internal controls and procedures appropriate to ensure that Human Trafficking is not taking place in any part of its supply chain and in any part of its own business. 8.2.6 Dexcel warrants that its facilities for manufacturing the Product are cGMP-approved and that it will manufacture the Product in accordance with this Agreement, cGMPs, the Marketing Authorization and the Specifications. 8.3 Any breach of warranty, representation or covenant hereunder shall constitute a breach of contract. + +14 + +Source: KITOV PHARMA LTD., 20-F, 3/26/2019 + + + + + +8.4 EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, DEXCEL MAKES NO WARRANTY, EXPRESSED OR IMPLIED, AND SPECIFICALLY MAKES NO WARRANTY OF MERCHANTABILITY OR WARRANTY OF FITNESS FOR ANY PARTICULAR PURPOSE, REGARDING THE PRODUCTS OR ANY OTHER MATTER WITH RESPECT TO THE TRANSACTIONS CONTEMPLATED HEREBY. 8.5 Indemnification 8.5.1 Dexcel agrees to defend, indemnify and hold Kitov and its Affiliates, and their respective officers, directors, and employees (collectively, the "Kitov Indemnitees") harmless from and against any Claims arising from (i) any product liability claims related solely to Dexcel's actions as the manufacture of the Product, or (ii) any breach by Dexcel or its Affiliates of its representations, warranties, covenants, agreements or obligations under this Agreement, in all cases except to the extent such damages give rise to an indemnification claim by Dexcel under Section ​8.5.2 below. 8.5.2 Kitov agrees to defend, indemnify and hold Dexcel and its Affiliates, and their respective shareholders, officers, directors, and employees (collectively, the "Dexcel Indemnitees") harmless from and against any Claims arising from (i) the handling, possession, use, marketing, distribution, promotion or sale of any Product by Kitov or its Affiliates or any of their Distributors, employees or subcontractors or agents following Delivery of the Product to Kitov, (ii) any breach by Kitov or its Affiliates of its representations, warranties, covenants, agreements or obligations under this Agreement, (iii) any intellectual property infringement claims with respect to the Product or the Trademark; or (iv) any product liability claims, whether arising out of warranty, negligence, strict liability (including manufacturing, design, warning or instruction claims) or any other product or quality based claims in relation to the Product, in all cases except to the extent such damages give rise to an indemnification claim by Kitov under Section ​​8.5.1 above. 8.5.3 Unless and to the extent otherwise specifically provided herein, in the event that the Dexcel Indemnitees or the Kitov Indemnitees intend to claim indemnification under this Section ​8.5 with respect to any third party claim or action (such one of the Dexcel Indemnitees or the Kitov Indemnitees being herein referred to as the "Indemnitee") shall promptly notify the other Party (the "Indemnitor") of any loss, claim, damage, or liability arising out of any third party claim or action in respect of which the Indemnitee intends to claim such indemnification, and the Indemnitor shall assume the defense thereof with counsel of its own choosing. Additionally, an Indemnitee shall have the right to retain its own counsel with the reasonable fees and expenses to be paid by the Indemnitor, however only in the event the representation of such Indemnitee by the counsel retained by the Indemnitor would be inappropriate due to an actual conflict of interest between such Indemnitee and any other Party represented by the Indemnitor's counsel in such proceedings. a) An Indemnitee shall not be entitled to indemnification under this Section ​8.5 if any settlement or compromise of a third party claim is concluded by the Indemnitee without the prior written consent of the Indemnitor, which consent shall not be unreasonably withheld, delayed or conditioned. b) An Indemnitor shall not enter into any settlement or compromise of any third party claim or consent to the entry of any judgment or other order with respect to any claim: (i) which does not contain, as a part thereof, an unconditional release of the Indemnitee for liability for all loss, cost or damage that may arise from such claim; or (ii) which contains any injunctive or other non-monetary relief that might in any way interfere with the future conduct of business by the Indemnitee, unless, in either case, the Indemnitee otherwise consents thereto in writing. + +15 + +Source: KITOV PHARMA LTD., 20-F, 3/26/2019 + + + + + +c) Any Indemnitee, and its employees, agents and representatives, shall cooperate fully with the Indemnitor and its legal representatives, at the Indemnitor's sole expense for out-of-pocket costs, in the investigation of any action, claim or liability covered by this indemnification provision. 8.6 Each Party shall maintain (a) comprehensive general liability insurance (including without limitation, coverage for bodily injury, personal injury, property damage, casualty loss and contractual and trademark liability); and (b) product liability insurance, providing full indemnification and defense against claims, liabilities, damages, demands and causes of action, alleged or actual, arising out of any defects in or use of the Product under this Agreement (including manufacturing, design, warning, or instruction claims), in such amounts as it customarily maintains for similar products and activities, but in no event less than $5,000,000 per individual claim and $10,000,000 in the aggregate. At the time of entering this Agreement, each Party shall be fully insured and shall duly maintain such insurance during the term of this Agreement and thereafter for so long as it customarily maintains insurance for itself for similar products and activities. Each Party shall provide the other Party with proof of such insurance upon request. Each Party shall cause such insurance policies to provide that the other Party shall be given at least thirty (30) days' notice of any cancellation, termination or change in such insurance. 8.7 Without prejudice to any other limitation (whether effective or not) of either Party's liability, neither Party shall be liable to the other Party (whether in contract, tort (including negligence) or for breach of statutory duty or otherwise) for any loss of profits, use, opportunity, goodwill, business or anticipated savings, for any indirect, incidental, special, indirect, punitive or consequential losses (in each case, irrespective of any negligence or other act, default or omission of a Party (or its employees or agents) and regardless of whether such loss or claim was foreseeable or not and whether the other Party has been informed of the possibility of such loss). Nothing in this Section ​8.7 shall operate to limit or exclude any liability under Section ​8.5 with respect to a Claim, or for fraud, or for breach by a Party of the provisions of Article ​7. 9 Intellectual Property Rights 9.1 It is agreed that the Parties shall keep each other informed, on a complete and timely basis, about any claim, demand, award, or damages, whether direct or consequential, that is asserted or assessed based upon any allegation, suit or judgment that the Kitov Product IP infringes any patent or other intellectual property right of a third party (an "IP Claim") and about any action resulting therefrom. The Parties shall exchange, free of charge, any documentation received from the third party filing the IP Claim, and shall also send each other copies of the documents issued by any of them, regarding such IP Claim. 9.2 In the event that any third party files, in or out of court, any IP Claim against Kitov or Dexcel, alleging infringement of intellectual property rights as a consequence of or derived from the performance of any of the operations contemplated in this Agreement, Kitov shall, in its reasonable judgment, decide the defense strategy, the means of proof, the choice of counsel, and the appeals. Neither Party shall settle and/or negotiate, or start conversations to seek a settlement or a negotiation, either in or out of court, any IP Claim without having obtained the prior written approval of the other Party. Both Parties shall collaborate on the necessary exchange of documentation and information available in order to be able for each Party to take action with respect to an IP Claim. + +16 + +Source: KITOV PHARMA LTD., 20-F, 3/26/2019 + + + + + +9.3 All of the Kitov Product IP, including the Marketing Authorizations (but excluding any of Dexcel's Intellectual Property Rights), shall be retained by Kitov at all times, and Dexcel shall have no rights with respect to the Kitov Product IP, except for any rights provided to it pursuant to the terms of this Agreement and the Development Agreement. 10 Governing Law; Venue 10.1 This Agreement shall be interpreted and enforced exclusively under the laws of the State of Israel, without regard to the conflict of laws provisions thereof. 10.2 The Parties submit to the exclusive jurisdiction of the competent courts of Tel-Aviv in any dispute related to this Agreement without giving effect to choice of law rules. Notwithstanding the aforesaid, the Parties shall endeavour in good faith to settle amicably any dispute which may arise between them under or in connection to this Agreement. 11 Miscellaneous 11.1 The provisions of this Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and assigns. Notwithstanding the aforesaid, either Party shall be entitled to assign, delegate, and/or subcontract its rights and obligation under this Agreement, in whole or in part, to one or more of its Affiliates on prior written notice to the other Party. For purposes of this Agreement, any merger, consolidation, or change of corporate structure following which there is a Change of Control of Kitov shall be considered as an assignment by Kitov, allowing Dexcel to terminate the Agreement as heretofore provided. 11.2 This Agreement (including all attachments hereto and the Quality Agreement), sets forth the entire agreement between the Parties relating to the subject matter contained herein and may not be modified, amended or discharged except as expressly stated in this Agreement or by a written agreement signed by the Parties hereto, except that this Agreement shall not supersede or serve to amend (i) any separate confidentiality or non-disclosure agreement that may have been entered into by the Parties, or (ii) the Development Agreement, each of which shall remain in effect in accordance with its terms. 11.3 The provisions of this Agreement shall be deemed separate. Therefore, if any part of this Agreement is rendered void, invalid or unenforceable, such rendering shall not affect the validity and enforceability of the remainder of this Agreement unless the part or parts which are void, invalid or unenforceable shall substantially impair the value of the whole Agreement to either Party. 11.4 Unless otherwise stated in this Agreement, any and all communications required as provided for in this Agreement shall be in writing to the addresses noted above and shall be sent by (i) Certified or Registered Mail, postage prepaid, return receipt requested, (ii) confirmed email or facsimile followed by a letter of confirmation sent by any of the methods stated in (i) and/or (iii) of this clause, or (iii) by an express overnight courier service (for example, Federal Express or Airborne), postage prepaid, return receipt requested and addressed as set forth above. Notices shall be deemed given three (3) days following mailing by Certified or Registered Mail, and one (1) day following overnight courier. Either Party may give written notice of a change of address. After such notice has been received, any notice thereafter shall be given to such Party as above provided at such changed address. + +17 + +Source: KITOV PHARMA LTD., 20-F, 3/26/2019 + + + + + +11.5 The headings used in this Agreement are for the convenience of the Parties only, and shall not be considered in interpreting or applying the provisions of this Agreement. 11.6 Nothing in this Agreement shall be deemed or construed to constitute between the Parties the relationship of principal and agent, or employer and employee, nor to create any partnership, joint venture or other form of legal association of any nature whatsoever. Neither Party is hereby constituted a legal representative of the other Party for any purpose whatsoever and neither is granted any right or authority hereunder to assume or create, whether in writing or otherwise, any obligation or responsibility, express or implied, or to make any representation, warranty or guarantee, or otherwise to act in any manner in the name of the other Party. 11.7 This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of which taken together shall be one and the same agreement. Signatures to this Agreement transmitted by facsimile, by electronic mail in "portable document format" (".pdf"), or by any other electronic means which preserves the original graphic and pictorial appearance of the Agreement, shall have the same effect as physical delivery of the paper document bearing the original signature. IN WITNESS WHEREOF, the Parties have caused their authorized officials to execute this Agreement as of the date first set forth above. Dexcel Ltd. Kitov Pharma Ltd. By: By: Name: Name: Title: Title: Date: Date: By: Name: Title: Date: + +18 + +Source: KITOV PHARMA LTD., 20-F, 3/26/2019 + + + + + +Exhibit A 8.1. Any Intellectual Property Rights or Confidential Information belonging to either Kitov or Dexcel prior to the execution of this Agreement will remain the sole property of either Kitov or Dexcel, respectively ("Kitov Foreground IP" and "Dexcel Foreground IP", respectively). 8.2. Kitov hereby grants to Dexcel a fully paid, limited, non exclusive, license to use Kitov Data in as much as required for the provision of the Services by Dexcel. 8.3. Subject to the provisions of sections 8.1 and 8.2 above and without derogating therefrom, any and all rights, title and interest in any Intellectual Property Rights resulting from any development made by Dexcel which is related to the Product and embodied in the Deliverables or conceived in connection with the services provided hereunder by Dexcel to Kitov, which is only applicable for the manufacture, research, development, making of, use, sale, production, commercialisation and distribution of the Product, shall be jointly and equally (50%/50%) owned by Dexcel and Kitov (the "Joint. IP"). 19 + +Source: KITOV PHARMA LTD., 20-F, 3/26/2019 \ No newline at end of file diff --git "a/full_contract_txt/LECLANCH\303\211 S.A. - JOINT DEVELOPMENT AND MARKETING AGREEMENT.txt" "b/full_contract_txt/LECLANCH\303\211 S.A. - JOINT DEVELOPMENT AND MARKETING AGREEMENT.txt" new file mode 100644 index 0000000000000000000000000000000000000000..714be8d396ee0bba5e5d5a94b63398140604ac5c --- /dev/null +++ "b/full_contract_txt/LECLANCH\303\211 S.A. - JOINT DEVELOPMENT AND MARKETING AGREEMENT.txt" @@ -0,0 +1,377 @@ +JOINT DEVELOPMENT AND MARKETING AGREEMENT + +BETWEEN + +LECLANCHÉ SA + +AND + +OAK RIDGE ENERGY TECHNOLOGIES, INC. + +1 + + + + + +1. 1.1. + +1.2. + +1.3. + +This AGREEMENT is made on April 6, 2014, ("Effective Date" between: + +LECLANCHÉ S.A., being a company organized and existing under the laws of Switzerland, having its registered office at Avenue des Sports 42, 1400 Yverdon-les-Bains, Switzerland ("Leclanché"), and + +OAK RIDGE ENERGY TECHNOLOGIES INC, being a company organized and existing under the laws of United States of America, having its registered office at 751 North Drive, Suite 9, Melbourne, FL 32934, United States ("Oak Ridge"), + +each a "Party"" and together "Parties". + +WHEREAS Oak Ridge focuses on the licensing, further development, manufacturing and marketing of products incorporating thin film battery technologies. + +WHEREAS Leclanché has developed and markets lithium-ion titanate cells using a proprietary technology and process and also designs and develops customized battery systems for OEM and other customers; + +WHEREAS Leclanché is interested in marketing its products and services in the United States; + +WHEREAS Oak Ridge is keen to develop its business and has the capability to market and support Leclanché market entry into the United States and is committed to allocate specific resources to provide such services; + +WHEREAS both Parties wish to collaborate together to better evaluate the opportunities in the United States, assess how best to address these and generally support each other's business efforts in furtherance of supporting their respective customers based in North America; + +NOW THEREFORE it is agreed as follows: + +Definitions The term "Affiliate" as used herein with respect to a party means any partnership, joint venture, corporation of other form of enterprise that directly or indirectly controls, is controlled by or is under common control with such entity or person. For purposes hereof, "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person or entity, whether through the ownership of voting securities, by contract or otherwise. + +The term "Subsidiary" as used herein with respect to a party means any partnership, joint venture, corporation of other form of enterprise that is directly or indirectly controlled by such entity or person. For purposes hereof, "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person or entity, whether through the ownership of voting securities, by contract or otherwise. + +2 + +"Confidential Information" means all information in relation to this Agreement in + + + + + +1.3. + +a) + +b) + +2. 2.1. + +a) + +b) + +c) + +d) e) f) + +g) + +"Confidential Information" means all information in relation to this Agreement in whatever form that is disclosed by the Parties to each other and shall include without limitation information disclosed orally or in writing or in any other form, tangible or intangible, and whether furnished prior to, on or after the date of this Agreement, that is described as or provided under circumstances that would reasonably indicate that it is confidential, proprietary or a trade secret, including, but not limited to, information relating to Leclanché's technology, intellectual property, financial or business plans, affairs, methodologies, financial statements or projections, internal management tools and systems, products and product development plans, released or unreleased hardware or software products, sales and marketing plans and materials, clients, contacts and contracts, all files, books, records, documents, specifications, schematics, employee suggestions, papers, drawings, models, sketches of any kind or description, including electronic data recorded or retrieved by any means now in existence or at any time hereinafter developed. Confidential Information shall also include documents transferred to Oak Ridge that are prepared by or on behalf of Leclanché incorporating Confidential Information received from a third party, which is itself required to be treated as confidential. Confidential Information shall not include information or data which was or becomes: + +generally available to the public, other than as a result of a breach of this undertaking; + +available to the recipient Party on a non confidential basis from a source other than the disclosing Party or its advisers, provided that such source is not, insofar as the recipient Party is aware, bound by any obligations of confidentiality in respect of such information or data; + +Market Evaluation - Phase 1 The Parties shall work together to better evaluate the market opportunities in the United States. A joint team shall be constituted, chaired by Anil Srivastava, a Board member of Oak Ridge, to undertake this study which shall be completed by May 31, 2014. The objectives of the study will be to: + +build a picture of the key market participants, in particular key customer groups, solution integrators, BMS providers, EPC contractors etc., identify what alliances could /should be formed to enhance the joint offering; identify target business applications where the Leclanché technology could be deployed; gather market information on pricing points and value add opportunities; build economic business cases for key business applications; identify what certification processes need to be undertaken before products and services can be marketed in the United States, what the timelines are and what the estimated costs might be; + +3 + +segregate opportunities by product groups (cells, home systems, industrial + + + + + +g) + +h) + +i) + +j) + +2.2. + +2.3. + +3. 3.1. + +4. 4.1. + +4.2. + +5. 5.1. + +5.2. + +5.3. + +5.4. + +5.5. + +5.6. + +segregate opportunities by product groups (cells, home systems, industrial systems, project related applications, e.g. frequency regulation); the structure that would be required to address the market in an effective manner; what element of the product assembly could be undertaken by Oak Ridge at its facility in Melbourne; how the trading relationship between the Parties should be structured i.e. whether Oak Ridge will be an agent or reseller and how this will be remunerated. + +The output from Phase 1 shall be a market entry plan, that shall be presented to the management of both Parties. The Parties shall decide on further steps based on the marked entry plan. + +Regular update calls will be organized by Oak Ridge and meetings shall be held in Melbourne, Florida. + +Costs The costs of Mr Srivastava shall be borne by Oak Ridge. Otherwise each Party bears its own costs for Phase 1 + +Leclanché's Products and Services The Products offered by Leclanché are set out in Annex I. Pricing will be determined after Phase 1 is completed. + +The Services offered by Leclanché include the customized design and development of battery systems to meet specific customer requirements. These Services are typically provided by Leclanché's Portable Business Unit. Examples of such Services are set out in Annex II. Oak Ridge Responsibilities Oak Ridge shall be responsible for developing the sales and marketing for the Products and Services; + +Oak Ridge shall dedicate sales and marketing personnel to develop the market; + +Oak Ridge shall identify commercial opportunities and work with Leclanché to qualify these opportunities and prepare bids and quotations as necessary; + +Oak Ridge shall participate at fairs and events and generally undertake all promotional activities that are required in order to promote the product; Oak Ridge shall maintain a regular watch on market developments and shall share this with Leclanché on a regular basis; + +Oak Ridge shall maintain a first level technical support capability to + +4 + + + + + +5.7. + +6. 6.1. + +6.2. + +6.3. + +6.4. + +6.5. + +6.6. + +7. 7.1. + +7.2. + +7.3. + +8. 8.1. + +8.2. + +9. 9.1. + +address customer requirements and deal with any field issues expeditiously; + +Oak Ridge shall arrange product liability and warranty insurance. + +Leclanché Responsibilities Leclanché shall supply the Products and Services; + +Leclanché shall provide training and documentation; + +Leclanché shall work with Oak Ridge to examine what elements of the Products and Services can be supplied locally by Oak Ridge (e.g. assembly of pre- designed modules); + +Leclanché shall generally support the commercial efforts of Oak Ridge in furtherance of the promotion and sales of the Products and Services; + +Leclanché shall define the warranty conditions for the Products and Services and work with Oak Ridge to provide the information necessary to secure product liability and warranty insurance cover. + +Leclanché shall assist Oak Ridge in preparing and submitting commercial bids. + +Exclusivity Where Oak Ridge has identified a specific market opportunity which has been qualified together with Leclanché pursuant to 5.3 above, the Parties shall undertake to work exclusively with each other on such opportunities; + +Otherwise there is no exclusivity expressed or implied by either Party. + +The Parties shall nonetheless share information as is reasonably necessary to ensure that there is no confusion in the market how customer requirements are addressed. If conflicts were to arise, the Parties shall use their reasonable efforts to resolve any such conflicts in a manner that benefits the end customer. + +Pricing Pricing for standard Products shall be defined after Phase 1 has been completed. Pricing for more complex projects shall be determined on a case by case basis. + +Pricing for Services shall be quoted on a case by case basis depending on the customer specification. + +Payment Terms In certain cases, Leclanché may request progress payments, including some element paid at the time of order. In the absence of a specific payment schedule, all payment terms are 30 days net from date of invoice. + +5 + + + + + +10. 10.1. + +11. 11.1. + +12. 12.1. + +13. 13.1. + +14. 14.1. + +Intellectual Property Each party's intellectual property ("IP") in existence as of the Effective Date shall remain such Party's property. Where appropriate and to the extent required, each party undertakes to grant a royalty free license to the other Party solely for the design and development of product(s) under this Agreement. There is no intended or implied transfer of either Party's Intellectual Property to the other. + +Confidentiality The Parties shall keep strictly secret and confidential any and all confidential information relating to each other's business and/or to the contents of this Agreement and shall not, in any manner whatsoever, disclose or permit any of its agents, representatives, employees, attorneys, accountants or advisors to disclose any confidential information to any person or entity whatsoever without the prior written consent of the other Party. The Parties shall take all necessary steps to safeguard the secrecy and confidentiality of all confidential information and all materials and to ensure that such confidential information and material obtained in connection with this Agreement is disclosed only to authorized persons who need to know such information for the purpose of performing their duties on behalf of the company. + +Non Solicitation The Parties are independent companies, and neither of them or anyone employed by them shall be deemed to be the employee, agent or legal agent of the other. Both Parties agree that during the Term of this Agreement and for a period of two (2) years following the termination, both Parties will not (i) solicit, encourage, or take any other action, which is intended, directly or indirectly, to induce any employee to terminate his or her employment with a Party; or (ii) interfere in any manner with the contractual or employment relationship between the Parties and any their employees. + +Assignment Neither Party may assign, delegate, or transfer this Agreement or any of its rights or duties hereunder, without the prior written consent of the other Party. Any attempted assignment or delegation in violation of this section shall be void. The provisions of this Agreement shall be binding upon and inure to the benefit of the Parties, their successors and permitted assigns. + +Force Majeure It is agreed that neither Party shall be liable for any delay or failure to perform its obligations hereunder in whole or in part when such delay or non- performance results from causes beyond such Party's control, including, but not limited to, fires, strikes, insurrections, riots, embargoes, shortages of motor vehicles, delays in transportation, inability to obtain + +6 + + + + + +14.2. + +15. 15.1. + +16. 16.1. + +17. 17.1. + +18. 18.1. + +19. 19.1. + +supplies of raw materials, or governmental requirements or regulations ("Force Majeure Event"). + +In the event of the occurrence of a Force Majeure Event, the Party unable to perform will, i) promptly notify the other Party, ii) provide an estimate of the duration of the delay, iii) use its bests efforts to resume performance as quickly as possible, and iv) suspend performance only for the period of time as is necessary as a result of the Force Majeure event. Notwithstanding the above, neither Party is relieved of any liability for any delay or failure to perform its defense obligations with respect to third Party intellectual property rights. The Party not delayed may act, in its sole discretion, to terminate the affected order, or any part of the order, or suspend this Agreement in whole or in part, for the duration of the delaying cause. + +Amendment No change, amendment or modification of any provision of this Agreement shall be valid unless set forth in a written instrument signed by the Parties. + +Construction In the event that any provision of this Agreement conflicts with the law under which this Agreement is to be construed, or if any such provision is held invalid by a court with jurisdiction over a Party to this Agreement, such provision shall be deemed to be restated to reflect as nearly as possible the original intentions of the Parties in accordance with applicable law, and the remainder of this Agreement shall remain in full force and effect. + +Severability If any of the provisions or clauses of this Agreement shall be or become void or be held invalid, all other provisions shall remain in full force and effect and the void or invalid provisions shall be forthwith replaced by other provisions to be agreed by the parties valid in form and substance and which shall accomplish as nearly as possible the purpose and intent of the void or invalid provisions in due course. + +Announcements No announcements of this Agreement or any subsequent Agreement may be made by one Party without the consent of the other, save if required to do so for legal or regulatory reasons, in which case the Party initiating the announcement shall use reasonable efforts to obtain the comments (if any) of the other, but for avoidance of doubt nothing in this provisions shall inhibit the disclosing party from complying with its legal or regulatory obligations as it sees fit. In the event that one party is required to make an announcement without the knowledge of the other, it shall promptly send a copy of the announcement to the other party for information purposes. + +No Waiver No waiver by either Party of any right or of a breach of any binding + +7 + + + + + +20. 20.1. + +21. 21.1. + +a) + +b) + +provision of this Agreement shall constitute a waiver of any other right or breach of any other provision, nor shall it be deemed to be a general waiver of such provision by such Party or to sanction any subsequent breach thereof by any other Party + +Notice Any notice, approval, request, authorization, direction, or other communication under this Agreement shall be given in writing, directed to the addresses of the Parties set forth above, and shall be deemed to have been delivered and given for all purposes: (a) on the delivery date if delivered personally to the Party to whom the same is directed; (b) one (1) business day after deposit with a commercial overnight carrier with written verification of receipt; or (c) five (5) business days after the mailing date whether or not actually received, if sent by registered or recorded delivery post or any other means of rapid mail delivery for which a receipt is available to the Contact at the address of the Party to whom the same is directed. + +Notices shall be addressed as follows: + +Attn: Chief Executive Leclanché SA Avenue des Sports, 42 Yverdon-les-Bains, CH 1400 Switzerland + +Attn: Chief Executive Oak Ridge Energy Technologies Inc., 751 North Drive, Suite 9, Melbourne, FL 32934, United States + +Standstill The Parties acknowledge that both companies are publicly quoted companies and may before and/or during the course of this Agreement be in receipt of nonpublic information (including any Confidential Information) (together, "Non Public Information") and agree to comply with all relevant laws and regulations applicable to market trading during the term of this Agreement and for a period of 12 months thereafter, and in particular agrees not to: + +directly nor indirectly engage in any transactions on any exchange, regulated market or over-the-counter in (i) any securities issued by the Leclanché or any affiliated company or (ii) any derivative products the price of which is derived in whole or in substantial part from any such securities; + +divulge directly or indirectly any Non Public Information to any third party without the written consent of Leclanché and if it is + +8 + + + + + +22. 22.1. + +a) b) + +c) + +22.2. + +22.3. + +22.4. + +22.5. + +23. 23.1. + +23.2. + +authorized to make such disclosure, shall impose standstill obligations on that third party consistent with this provision. + +Term and Termination Subject to Article 22.2, this Agreement shall remain in force for an Initial Period of 1 year, which may be renewed by mutual consent for such period as the Parties may agree ("Term"), unless it is terminated earlier in accordance with this Agreement or for any of the following reasons: + +if one Party is in default with its performance under this Agreement; in case of insolvency or bankruptcy of either Party, or in case of a change of control of one of the Parties; breach of any of the provisions of this Agreement by either Party that remains unremedied for a period of 30 days; + +In the event that after Phase 1, the Parties conclude that it would not be economically viable to enter the US market as envisaged, this Agreement shall terminate forthwith and the Parties shall use reasonable efforts to assess whether to proceed with an alternative agreement or not. + +If the Agreement is terminated, the Parties shall endeavour to ensure that assets contributed by each Party shall, so far as possible, be transferred back to that Party. + +In the event of termination of this Agreement, neither Party shall have any obligation to continue the activities set forth herein, and all obligations and rights of the Parties shall terminate, with the exception of provision of Articles 9-21, and Article 23 of this Agreement, which shall survive expiration or termination. + +Notwithstanding the above, termination of the Agreement will not have any effect on the rights and obligations of the Parties in respect of the assignment secured and or any RFQ at any stage of processing. + +Governing Law and Jurisdiction This Agreement shall be governed by and construed in accordance with Swiss law. The conflict of law rules and the United Nations Convention on Contracts for the International Sale of Goods do not apply. + +The Parties irrevocably agree that the courts of the city of Zurich have exclusive jurisdiction to settle any dispute or claim that arises out of or in connection with this Agreement. + +9 + + + + + +IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the dates written below. + +For Oak Ridge Energy Technologies Inc For Leclanché SA + +______________________________ Mr Craig Nelson Deputy CEO + +/s/ Eric Wilkinson Mr Eric Wilkinson Deputy CEO + +10 + + + + + +Annex I + +LECLANCHÉ PRODUCTS + +11 + + + + + +12 + + + + + +- - - + +Annex II LECLANCHÉ SERVICES + +Leclanché's Portable Business designs customized battery systems for original equipment manufacturers and other industrial / commercial customers. It focuses on three main markets: + +military medical equipment ruggerdized industrial equipment + +Examples of products that have ben developed for its customers include: + +13 \ No newline at end of file diff --git a/full_contract_txt/LEGACYTECHNOLOGYHOLDINGS,INC_12_09_2005-EX-10.2-DISTRIBUTOR AGREEMENT.txt b/full_contract_txt/LEGACYTECHNOLOGYHOLDINGS,INC_12_09_2005-EX-10.2-DISTRIBUTOR AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..39a808dd22e2c3330229beb5978eba3384178e8c --- /dev/null +++ b/full_contract_txt/LEGACYTECHNOLOGYHOLDINGS,INC_12_09_2005-EX-10.2-DISTRIBUTOR AGREEMENT.txt @@ -0,0 +1,99 @@ +EXHIBIT 10.2 + + DISTRIBUTOR AGREEMENT + +EXHIBIT 10.2 + + EXCLUSIVE DISTRIBUTOR AGREEMENT + + THIS EXCLUSIVE DISTRIBUTOR AGREEMENT (the "Agreement") shall be effective as of _Dec. 8, 2005 (hereinafter "Effective Date"), by and between LifeUSA/ Envision Health, Inc., a corporation (hereinafter collectively "ENVISION"), and Sierra Mountain Minerals, Inc., a Canadian company (hereinafter "SIERRA"), is made with reference to the following facts: + + Recitals + +A. SIERRA is the manufacture and producer of a joint health product called "SierraSil" (hereinafter "the Product") for human use. + +B. ENVISION is the manufacturer of certain nutritional supplements and is desirous of becoming an exclusive distributor for the Product in any blend with Krill Oil (hereinafter "the Finished Product") in all distribution channels in the Territory on the terms and conditions set forth herein. + +C. SIERRA is desirous of having ENVISION act as its exclusive distributor for the Product in any blend with Krill Oil in all distribution channels in the Territory on the terms and conditions set forth herein. + +NOW, THEREFORE, it is hereby agreed as follows: + +1. Incorporation of Recitals. The Recitals set forth in Paragraphs A through C, above, are incorporated herein as though set forth in full. + +2. Appointment. SIERRA hereby appoints ENVISION as its exclusive distributor for the Product in any blend with Krill Oil within the Territory subject to ENVISION fulfilling the terms and conditions of the best efforts marketing requirements set forth herein in Sections 4, 5, and 9. SIERRA shall cease making sales to any customer or distributor who, during the term of this Agreement, violates ENVISION's exclusivity. + +3. Territory. The Territory shall be the entire world. + +4. Prices and Terms. The price for the Product as set forth in Section 9 herein, sold by SIERRA to ENVISION, shall be subject to change due to changes in manufacturing costs and so as to maximize profits; any changes in price for the Product shall not be applicable to previously accepted orders and shall be made with at least ninety (90) days advance notice in writing and in good faith by conference of the parties. ENVISION shall not resell the Product alone. Terms of payment will be 1/3 upon placement of order and 2/3 balance net thirty (30) days or as mutually agreed upon in writing between the parties. Delivery will be F.O.B. ENVISION shall be responsible for all costs of shipping from SIERRA to ENVISION. + +5. Product Support. ENVISION will use its best efforts to market and sell the Finished Product throughout the Territory. The parties also agree that: + + o If SIERRA customers are interested in purchasing the Product in any blend with Krill Oil, SIERRA will refer them to ENVISION. + + o ENVISION will be responsible for all costs associated with developing and manufacturing the Finished Product. + +6. Sales Disclosures. ENVISION will provide SIERRA with demand projections for the Product and SIERRA will produce enough Product to meet such demand projections. ENVISION will inform SIERRA of committed sales and SIERRA will increase or scale up its production of the Product accordingly. SIERRA will not unreasonably withhold the Product, but shall not be liable for unfulfilled or partially fulfilled orders given just cause for such action. + +7. Term. The term of this Agreement shall be two (2) years from the Effective Date with automatic annual renewals thereafter provided either party does not provide sixty (60) days notice of termination prior to the renewal date or the Agreement is not otherwise terminated as set forth in Section 8. + +8. Termination. (a) Upon the occurrence of a material breach or default as to any obligation, term or provision contained herein by either party and the failure of the breaching party to promptly pursue (within thirty (30) days after receiving written notice thereof from the non-breaching party) a reasonable remedy designed to cure (in the reasonable judgment of the non-breaching party) such material breach or default, this Agreement may be terminated by the non-breaching party by giving written notice of termination to the breaching party, such termination + + + + + + being immediately effective upon the giving of such notice of termination. + + (b) Upon the occurrence of bankruptcy of the other party, breach of confidentiality, government legislative interference, or force majeure extending beyond sixty (60) days, either party may immediately terminate the Agreement. + +9. Purchase Requirements. During the term of this Agreement, ENVISION will exclusively purchase the Product from SIERRA. The parties mutually agree to the Purchase Price of: + + Product Purchase Price ----------------------------------------------- A. SierraSil Per Sierra Sil's wholesale price list. + +10. Intellectual Property. SIERRA is responsible for all Patent costs for the Product. SIERRA warrants it owns pending patents for the Product in the U.S. and internationally. SIERRA hereby grants ENVISION an exclusive, royalty-free sub-license of the Product's future patents, and patent applications to distribute, sell and market the Finished Product. SIERRA hereby agrees to indemnify, defend and hold ENVISION harmless from any claims that the Product infringes upon any other patent. + +11. Trademarks SIERRA is the owner of the trademark&sbsp; "SierraSil". This Agreement grants ENVISION a non-exclusive and non-royalty bearing license to use the mark "SierraSil". SIERRA shall at all times be the owner of the trademark and ENVISION shall acquire no rights thereto. Upon termination, ENVISION shall have eighteen (18) months to exhaust any inventories, packaging and advertising materials bearing the "SierraSil" trademark and SIERRA shall have first option to buy back any inventory at ENVISION's net purchase price. + +12. Independent Contractor Status. The parties acknowledge that ENVISION is an independent contractor and shall not be deemed to be an employee, agent, or joint venturer of SIERRA for any purpose, including federal tax purposes. + +13. Warranty. SIERRA warrants that the Product shall be free from defects in material and workmanship for the reasonable shelf life of the Product. In the event of any breach of this warranty or in the event any user of Product makes a claim that the Product was the cause of personal injury or property damage (product liability claim), SIERRA shall indemnify, defend and hold ENVISION harmless from any liability occasioned by a breach of warranty or a product liability claim. SIERRA warrants that it carries general liability insurance of not less than $2 million per occurrence and product liability insurance of not less than $5 million per occurrence and that, upon the execution of this Agreement, it will name ENVISION as an additional insured on such policies. SIERRA further warrants that the Product will not be adulterated or misbranded within the meaning of any federal, state, or local law or regulation or other applicable law. SIERRA agrees to promptly notify ENVISION of any problem, anomaly, defect or condition which would reasonably cause ENVISION's concern relative to stability, reliability, form, fit, function or quality of the Product. + + ENVISION warrants that the Finished Product will not be adulterated or misbranded within the meaning of any federal, state, or local law or regulation or other applicable law. In the event of any breach of this warranty or in the event any user of the Finished Product makes a claim that the Finished Product was the cause of personal injury or property damage (product liability claim), ENVISION shall indemnify, defend, and hold SIERRA harmless from any liability occasioned by a breach of warranty or a product liability claim. ENVISION warrants that it carries general liability insurance of $1 million per occurrence and product liability insurance of not less than $2 million per occurrence and that, upon execution of this Agreement, it will name SIERRA as an additional insured on such policies. + +14. Confidential Information. The parties acknowledge that, during the term of this Agreement, each may receive certain Proprietary Information of the other. Proprietary Information includes, without limitation, formula, scientific studies, processes, plans, formulations, technical information, new product information, methods of product delivery, test procedures, product samples, specifications, scientific, clinical, commercial and other information or data, customer lists, customer contacts, and other distributors within the Territory which are considered confidential in nature whether communicated in writing or orally. The parties agree that each will treat such information as confidential. Neither party shall have the right to disclose the Proprietary Information to any third party without the express written consent of the disclosing party. Neither party may use the proprietary information except in furtherance of the goals of this Agreement and is further prohibited from utilizing the Proprietary Information directly nor indirectly to engage in any business activity which is competitive with the other. + +15. Force Majeure. In no event shall any party be responsible for its failure to fulfill any of its obligations under this Agreement when such failure is due to fires, floods, riots, strikes, freight embargoes, acts of God or insurrection. In the event of a force majeure, the party affected thereby shall give immediate written notice to the other. If the event of force majeure continues for longer than + + + + + + sixty (60) days, the party not so affected shall have the right to terminate this Agreement. + +16. Non-Waiver of Default. The failure of either party at any time to require the performance by a party of any provision of this Agreement shall in no way affect the right to require performance at any time after such failure. The waiver of either party of a breach of any provision of this Agreement shall not be taken to be a waiver of any succeeding breach of the provision or as a waiver of the provision itself. + +17. Attorney's Fees. In the event either party is required to institute litigation to enforce any provision of this Agreement, the prevailing party in such litigation shall be entitled to recover all costs including without limitation, reasonable attorney's fees and expenses incurred in connection with such enforcement and collection. + +18. Venue. This Agreement is deemed to have been entered into in the State of Colorado, and its interpretation, construction, and the remedies for its enforcement or breach are to be applied pursuant to and in accordance with the laws of the State of Colorado. + +19. Notices. Any and all notices or other communication required or permitted to be given pursuant to this Agreement shall be in writing and shall be construed as properly given if mailed first class, postage prepaid to the address specified herein. Either party may designate, in writing, a change of address or other place to which notices may be sent. + + If to SIERRA: If to LIFEUSA/ENVISION: Mr. Michael Bentley Mr. Michael Schuett Sierra Mountain Minerals Inc. Envision Health, Inc. 1501 West Broadway, Suite 500 2475 Broadway, Suite 202 Vancouver BC V6J4Z6 Boulder, CO 80304 Canada + +20. Amendment. This Agreement shall not be modified or amended except by a written agreement executed by both parties. + +21. Entire Agreement. This Agreement constitutes the entire agreement between the parties with respect to the subject matter thereof and supersedes all prior agreements, whether written or oral. + +22. Assignment. The parties shall have the right to assign all, or part, of its rights under this Agreement to any wholly owned subsidiary or affiliate without the consent of the other Party. Any other assignment by the parties, requires the prior written consent of the other Party. + +ACKNOWLEDGEMENTS + + Each party acknowledges that he or she has had an adequate opportunity to read and study this Agreement. The understanding of the aforesaid articles causes no difficulty whatsoever and each party has retained a copy of this agreement immediately after the signing of it by all parties. + + IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the date and year first written above. + +SIERRA MOUNTAIN MINERALS LIFEUSA/ENVISION HEALTH + +By: /s/ Michael Bentley By: /s/ Michael Schuett ----------------------- ------------------------- Michael Bentley Michael Schuett + + December 8, 2005 December 7, 2005 ----------------------- ------------------------------ Date Date \ No newline at end of file diff --git a/full_contract_txt/LEJUHOLDINGSLTD_03_12_2014-EX-10.34-INTERNET CHANNEL COOPERATION AGREEMENT.txt b/full_contract_txt/LEJUHOLDINGSLTD_03_12_2014-EX-10.34-INTERNET CHANNEL COOPERATION AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..3057f16f8c151066b7993d36d0ac1cfb2441343f --- /dev/null +++ b/full_contract_txt/LEJUHOLDINGSLTD_03_12_2014-EX-10.34-INTERNET CHANNEL COOPERATION AGREEMENT.txt @@ -0,0 +1,109 @@ +Exhibit 10.34 INTERNET CHANNEL COOPERATION AGREEMENT Contract Number: 181015BD0120 + + Party A: + + Beijing Baidu Netcom Science and Technology Co., Ltd. + + Address: + + Baidu Building, 10 Shangdi 10 Street, Haidian District, Beijing + + Contact: + + HOU Gang + + Telephone: 010-59927171 Fax: 010-59920021 + + Party B: + + China Online Housing (Hong Kong) Co., Ltd. + + Address: + + 8/F, Ideal International Plaza, 58 Beisihuan Xilu, Haidian District, Beijing + + Contact: Telephone: 010-58951000 Fax: 010-58951005 Party C: Beijing Yisheng Leju Information Services Co., Ltd. Legal representative: ZHU Xusheng Authorized signatory: Address: 8/F, Ideal International Plaza, 58 Beisihuan Xilu, Haidian District, Beijing Contact: Telephone: 010-58951000 Fax: 010-58951005 In this Agreement, Party A, Party B and Party C individually a "Party", collectively the "Parties". The transaction contemplated to be jointly conducted by Party A and Party B hereunder is referred to as the "Operation". WHEREAS: 1. From its formation in January 2000, Party A has been providing search technology services with the mission to provide the public with easy access to information. it has completed transformation from a back-office technology provider to an independent search services provider for the public and is the first operator of competitive ranking in the PRC. The www.baidu.com operated by Party A has grown into the largest Chinese website and Chinese search engine in the world. 2. Party B is a leading online and offline real estate information and consulting services provider in the PRC. The SINA Leju operated by Party B is a leading real estate and home furnishing network information network in the PRC, having plentiful and quality database on real estate (including new, used and leased real estate), home and furniture. 3. Party A and Party B through negotiations agree to conduct comprehensive cooperation in real estate and home furnishing information services by capitalizing on their respective advantages, including their strategic cooperation on the formation of a real estate and home furnishing channel by Party A. Both Parties will jointly launch Baidu Leju Real Estate and Home Furnishing Channel for which Party B will be wholly responsible for its construction. Party B will form a dedicated team and, to the extent permitted by Party A, conduct a whole new design of all information, products and data of Party A on real estate, used homes, home and furniture, so as to present the existing services of Party B to the 1 + +th + + + + + + customers of Party A through the channels of Party A. Meanwhile, Party B will be responsible for all operations of the advertising or any other businesses in connection with the real estate and home furnishing channel of Party A according to agreement. Party A will use promotional resources to provide full assistance in Party B's efforts in customer development and traffic expansion. NOW, THEREFORE, the Parties agree as follows: ARTICLE I DEFINITION AND INTEPRETATION 1.1 Definition Unless otherwise defined in the context, in this Agreement: (a) PRC Laws mean any laws, regulations, rules and regulatory documents in the PRC which are current and will be issued going forward. (b) Business Secrets mean any technical, financial, commercial or any other information owned and treated as business secrets by one Party and/or its subsidiaries or affiliates, which have the following attributes: (i) It is unknown to the public; (ii) It may generate economic benefit for its owner; (iii) It is practical; and (iv) It is treated as business secrets with appropriate protection measures by its owner. (c) Effective Date means the date of this Agreement. (d) Force Majeure means the occurrence of any acts of God or man-made disasters or accidents during the term of this Agreement which is unforeseeable or, if foreseeable, unavoidable, or uncontrollable and make it impossible for one Party to perform this Agreement in a whole, including earthquakes, typhoons, floods, fires, wars, strikes, riots, hacker attacks, technical breakdown of telecommunication departments, and legal restrictions. (e) Baidu Net/Party A's Website means the Internet website owned by Party A whose domain name is http://www.baidu.com, through which Party A provides search services to its users. (f) Leju Net/Party B's Website means the Internet website owned by Party B whose domain name is http://www.leju.com. (g) First Tier Channel on Baidu Net means any of the channels with the headings of news; real estate and home furnishing; tie bar; Zhidao; and entertainment in the product lists of Baidu Net. (h) Second Tier Channel of Baidu Net means any of the channels with the headings of real estate, used homes, and decorations in the real estate and home furnishing channel of Baidu Net. 2 + + + + + + (i) Real Estate and Home Furnishing Channel/Cooperation Channel means a First Tier Channel on Baidu Net jointly constructed by Party A and Party B, whose channel name and domain name is Baidu Leju Real Estate and Home Furnishing Net (the "Baidu Leju") and leju.baidu.com, respectively. (j) Category means the webpage publishing a certain type of information under each level of the channels on Party A's Website. The homepage of each channel consists of multiple categories. 1.2 Interpretation (a) Any date in this Agreement means its calendar date. (b) The headings in this Agreement are for convenience only and will not affect the meaning or interpretation of any part of this Agreement. (c) Singular form of any word include its plural form as required in the context, and vice versa. (d) Any reference to the article, section and paragraph means the article, section and paragraph of this Agreement. ARTICLE II REPRESENTATIONS AND WARRANTIES 2.1 Legal Status Each Party represents and warrants to the other Parties that as of the date of this Agreement: (a) It is qualified to conduct the transaction contemplated under this Agreement, and such transaction is in line with its scope of business; (b) It has the full power to enter into this Agreement and perform its obligations hereunder; (c) Its authorized representative has full authority to sign this Agreement on its behalf (a photocopy of which authorization letter will be provided upon request of the other Parties); and (d) To its knowledge, it has disclosed all of the documents issued by the local government having jurisdiction over the place where it is incorporated or its business address is located which may have material adverse effect upon performance of its obligations under this Agreement; and it is not a party to any liquidation, dissolution or bankruptcy proceedings. 2.2 Legal Effect (a) As of the date of this Agreement, it is bound by this Agreement. (b) It warrants that none of its execution, delivery and performance of this Agreement or conduct of any transaction contemplated hereunder is in violation of any PRC laws or any agreement to which it is a party. (c) Prior to the date of this Agreement, it has presented its business license 3 + + + + + + which has passed annual inspection for the current year to the other Parties, the sealed copy of which business license will be provided to the other Parties. ARTICLE III TERM OF THIS AGREEMENT 3.1 Term (a) This Agreement will be effective as of the date of its execution, and term of the Cooperation will be four years from the date on which the channel is uploaded. (b) The channel is expected to be uploaded on August 1, 2010. (c) As of the date of this Agreement, both Party A and Party B will cooperate to complete all preparatory work in connection with the Cooperation channel contemplated under this Agreement, so as to ensure smooth upload of the Cooperation channel. 3.2 Extension Upon expiration of this Agreement, with all conditions being equal, Party B has the preferential right to continue Cooperation with Party A in respect of the real estate channel. If both Party A and Party B continue their Cooperation, they will negotiate to reach an agreement to that effect no less than one month prior to the expiration of this Agreement. 3.3 Phases of Cooperation (subject to the actual date of the upload of the channel) Phase I will commence on August 1, 2010 and end on July 31, 2011. Phase II will commence on August 1, 2011 and end on July 31, 2012. Phase III will commence on August 1, 2012 and end on July 31, 2013. Phase IV will commence on August 1, 2013 and end on July 31, 2014. ARTICLE IV CONTENT AND SCOPE OF COOPERATION It is agreed that the Cooperation contemplated under this Agreement will consist of: (i) formation of the Cooperation channel; (ii) advertising operation of the Cooperation channel; (iii) promotion of the Cooperation channel; and (iv) cooperation with any other products. The details of the Cooperation are as follows: 4 + + + + + + 4.1 Formation of the Cooperation Channel (a) During the term of this Agreement, Party B will use the Baidu's Real Estate and Home Furnishing Channel as the jointly formed channel of Party A and Party B. Party A grants all-round exclusive rights to Party B to construct, maintain and operate the Cooperation channel. As the owner of www.baidu.com, Party A has ownership and control over second tier domain names. Party A has the right to deprive Party B of the operating rights of the website without any liability if Party B is found in violation of any law. Party A is required to receive written consent from Party B prior to its adjustment of any second tier domain names which is under independent operation of Party B. (b) Party A authorizes Party B to maintain and construct all of the contents under the second tier domain names as follows: (i) Leju.baidu.com (ii) House.baidu.com (iii) Jiaju.baidu.com (iv) Fangyou.baidu.com (v) Esf.baidu.com (vi) Rent.baidu.com (vii) Dichan.baidu.com (viii) Jiancai.baidu.com (c) Party B will be solely responsible for the sponsorship, operation, upgrade, and maintain of Baidu Real Estate and Home Furnishing Channel, including provision of bottom-level webpage and systems, integration of the data, information and intelligence provided by users relating to real estate and home furnishing on the Cooperation channel, and provide related maintenance and support to end-users. Party B has the discretion to arrange the layout and linkage of the channels, categories, articles and data relating to real estate and home furnishing on the Cooperation channel. (d) The reformed Cooperation channel will still exist as a real estate and home furnishing channel, a First Tier Channel of Baidu Web, whose domain name is leju.baidu.com. The homepage of the Cooperation channel will be designed to give full presentation of the cooperation between the two Parties. (e) During the term of this Agreement, Party A will add the Cooperation channel to the linkage access to the real estate and home furnishing in the product list page of Baidu Net (http://www.baidu.com/more/). (f) Party B will be responsible for development of each level of webpage of the Cooperation channel, and has control, approval and discretion over its design, layout and appearance. It is agreed by both Parties that the homepage of the Cooperation channel will have a domain name of leju.baidu.com, which may be reformed according to the design and layout of Party B, or remains consistent with the overall style of Party A's Net. If it remains consistent with the style of Party A's Net, Party B will ensure no material change be made to the brand 5 + + + + + + image of Party A or any webpage relating thereto, provided that any design planned by Party B is subject to consent of Party A. (g) Except for the homepage of the Cooperation channel, any other sub-channels, categories and articles within the Cooperation channel is subject to design and layout of Party B at its sole discretion. Such sub-channels, categories and articles may all use the domain name of Party B's Net or Party A's Net, such as baidu.leju.com\esf or baidu.leju.com\jiaju. (h) The contents, operations, products, services, images, texts and super links of the Cooperation channel will be operated on the server of Party B. Party B will be solely responsible for the servers, bandwidth and any other facilities necessary for the Cooperation channel. Party B has sole control, approval and discretion over the contents, operations, products, services, images, texts and super links in or included in the Cooperation channel, as well as to include which and how to include any existing information or services on the Party B's Net into the Cooperation channel through super links. (i) Party B warrants that none of the articles, contents and web pages of the Cooperation channel is in violation of PRC laws or any international treaty to which the PRC is a signatory, including without limitation any content detrimental to national security, of pornographic, fraudulent, insulting, defamatory, hectoring or harassing nature, infringing upon the copyrights, personal rights or any other valid rights and interests of any other parties or in breach of any social customs, or any linkage thereto. If Party A receives any complaint regarding the content of the Cooperation channel, Party B shall resolve such complaint immediately, negotiate with or respond to any review or enquiry from any third party or competent authorities at its own expenses, and be liable for any loss incurred by Party A. (j) To ensure legality of the contents within the Cooperation channel, Party B will make the contact of its customer services conspicuously displayed at the homepage of the Cooperation channel, and keep its users of the way to file a complaint upon occurrence of any tort or law-breaching incidents. Party B will respond to any complaint within a reasonable upon receipt thereof, which response process is subject to approval of Party A. If Party B receives any complaint of any third party regarding the tort or breach of any content in the Cooperation channel which is forwarded from Party A, Party B will delete such content within 24 hours or notify Party A of its responsive measures. (k) Party A will cooperate with Party B to handle any agreement relating to cooperation regarding real estate and home furnishing channel which has not been fully performed by the date of this Agreement. It is agreed that party A will disclose to Party B all of its agreements regarding Cooperation Channel which are valid as of the date hereof, and Party B reserves the option to agree or waive its acceptance of such agreement according to its circumstances. If Party B agrees to accept part of such agreements, the confidentiality and transfer of debts and claims under such agreements will be subject to special agreement of the other party thereto, and Party A will perform the tasks set forth under Section 4.1(k) with reasonable care. (l) Party A hereby agrees to take all actions necessary for cooperation between the client of Cooperation Channel with Party B and the transfer mentioned above, including: (i) Within ten (10) business days upon execution of this Agreement, 6 + + + + + + provide to Party B a schedule listing all agreements regarding Cooperation Channel which are valid as of the date hereof as well as a copy of all such agreements; (ii) Within ten (10) business days upon execution of this Agreement, provide to Party B a correct and detailed financial statement reflecting all accounts receivable and payable, including any payment made by Party A or the client under any outstanding agreement with the note whether such payment is for completed or uncompleted services. (iii) Within ten (10) business days upon execution of this Agreement, provide to Party B a client document (including the name, position and the residence of its person in charge) for follow-up and maintenance efforts by Party B; and (iv) Introduce Party B to its clients as the new communicator and the successor of Party A. 4.2 Advertising on the Cooperation Channel (a) Party A agrees that the pricing, specifications and contents of the advertising on the Cooperation Channel is subject to sole discretion of Party B. Party B has absolute and sole control, approval and discretion regarding the advertising operation of the Cooperation Channel, may conduct and benefit from legal advertising operations at its sole discretion. (b) Party A will provide to Party B the authorization and any other legal documents necessary for Party B to conduct advertising operation on the Cooperation Channel, and provide good-faith support in connection with coordination and promotion necessary in such advertising operation. (c) Party A will provide assistance to Party B in installing and commissioning advertising management and release system on the Cooperation Channel to ensure smooth management of the advertising on the Cooperation Channel by Party B. Party B has sole discretion to use the advertising management and release system of its own or from Party A. (d) Party B will be liable for its advertising operation, and will handle and be held liable for any dispute, complaint or government investigation or penalty arising from the content or release of its advertising. Party B will be held liable for any loss incurred by Party A as owner of the website resulting from Party B's conduct. (e) Without prior consent of Party B and during the term of this Agreement, Party A may not release advertising or promotion information, or any other information or linkage against law or industrial standards on the Cooperation Channel. (f) Party B has the right to conduct marketing activity in the name of Baidu Leju Real Estate and Home Furnishing Net, provided that such conduct will not appear as if Party B represents Baidu or Party B and Baidu has any relationship other than that provided under this Agreement. (g) Party A represents and warrants that Party B will not be liable for any cost, expense, damage, loss, indemnity, tax, levy, action or claim regarding any client incurred prior to the date of this Agreement. 7 + + + + + + 4.3 Promotion of the Cooperation Channel (a) During the term of this Agreement, Party A undertakes to promote the key word (including any of the key words relating to real properties, building material products and home furnishing) involved in the Cooperation Channel. Party A warrants that such key word will be promoted on the open search platform of Baidu and preferentially displayed at the left side of the search result pages, the exact display position of which is subject to separate agreement between the Parties. The search results will link to the real estate and home furnishing channel under cooperation of the Parties. The key words will be provided to Party B to Party A, and the information included in any of the key words and their search results will be in compliance with laws and regulations, as well as business rules of Party A, including without limitation user's experience. Party B agrees that Party A may modify the display of search results out of consideration relating to user experience, provided that such modification will not materially change the display, content and position of the search results. Party A will be deemed in breach of this Agreement if it is required to modify search results pursuant to laws, regulations, court rulings or other mandatory documents. (b) During the term of this Agreement, Party A undertakes to provide to Party B Baidu network promotion resources equal to RMB10 million for each cooperation period from its commencement. Party A will provide such resources to Party B through a separate account for promotion of the Cooperation Channel at the discretion of Party B. Party B must use up the resources within the period provided under this Agreement and any remaining resources will be cancelled as of the commencement of the next cooperation period. Additionally, Party A agrees to provide support for Party B's promotion at Baidu picture search, Baidu Zhidao, Baidu Baike, Baidu Search Chart, Hao123 and other Baidu products. Party A will provide assistance for Party B in effective promotion of search results, the details of which are subject to separate agreement of the Parties. (c) Party A undertakes to provide support for Party B in marketing and promotional efforts, including without limitation joint promotional activities on Baidu leju Cooperation Channel. 4.4 Cooperation of Other Products (a) During the term of this Agreement, Party A and Party B will conduct cooperation regarding Tieba products, the details of which are subject to supplemental agreement of the Parties. Party A undertakes not to make additional charge from Party B regarding Tieba products. (b) During the term of this Agreement, Party A and Party B will conduct cooperation regarding Baidu Map products, the details of which are as follows: (i) Party B will provide real estate, home furnishing and life related data required by Party A, and Party A will use its technological means to provide display platform for Party B at map.baidu.com, the details of which are subject to separate agreement of the Parties. (ii) Subject to provision of relevant real estate information to Party A from Party B, Party A will display the real estate information, and any of its updates from time to time, provided by Party B on map.baidu.com 8 + + + + + + on preferential basis. Party A will deal with any failure to display such information as provided in the preceding sentence immediately upon notice for such effect from Party B in writing. (iii) Party A and Party B have entered into agreement regarding map cooperation prior to this Agreement. Party B has the option to continue performing such agreement, or terminate such agreement and perform the Cooperation provided hereunder. (c) During the term of this Agreement, Party A agrees to give preferential cooperation to Party B regarding Baidu news products. Cooperation Fee 1. Cooperation Fee The cooperation fee under this Agreement will be RMB200 million, of which RMB160 million will be channel cooperation fee and RMB40 million will be promotion fee for the Cooperation Channel. The cooperation fee will be payable in four installments as follows (a) Within 15 business days after the date hereof, Party B will pay RMB50 million to Party A. (b) Within 15 business days after the end of the first cooperation period, Party B will pay another RMB50 million to Party A. (c) Within 15 business days after the end of the second cooperation period, Party B will pay another RMB50 million to Party A. (d) Within 15 business days after the end of the third cooperation period, Party B will pay the remaining RMB50 million to Party A. 2. Payment of Cooperation Fee The channel cooperation fee provided under this Agreement will be payable by Party B or its designated entity to the following account of Party A at the expense of Party B, which payment could be in foreign currency at equivalent amount. Beneficiary: Beijing Baidu Netcom Science and Technology Co., Ltd. Bank: China Merhcants Bank, Beijing Branch, Beisihuan Sub-branch Account number: 866180198510001 ARTICLE V RIGHTS AND OBLIGATIONS 5.1 Each of the Parties warrants that its execution and performance of this Agreement is in no violation of any third party interests or PRC laws. 5.2 Party B will be responsible for server configuration, bandwidth, operation, maintenance, users and user services management and development necessary for the Cooperation Channel, as well as any expenses and liabilities arising thereof. 5.3 Party B warrants that any and all information provided or released onto the Cooperation Channel during the Cooperation is in no violation of PRC laws, general code of 9 + + + + + + ethics and intellectual property and/or other legal interests of any third party and, upon occurrence of such violation, Party B will delete the violating information from the Cooperation Channel, resolve any dispute and be liable for any consequence arising thereof, and indemnify Party A for any loss incurred by Party A thereof. 5.4 Any delay of service by Party B due to any force majeure will be notified to Party A immediately, and Party B will take prompt measures to ensure performance of this Agreement; 5.5 Party A allows Party B to conduct any activity in the name of real estate and home furnishing website of Party A's website without violation of any laws and provisions under this Agreement, provided that such conduct will not appear as if Party B represents Baidu or Party B and Baidu has any relationship other than that provided under this Agreement. 5.6 Party B will be responsible for advertising operation of the real estate channel. Party B has sole discretion to conduct advertising operation, and any gains, liabilities, duties, taxes and expenses arising therefrom will be owned or paid by Party B. 5.7 Party B will pay the channel cooperation fee provided under this Agreement. 5.8 Party A will provide to Party B the promotional resources provided under this Agreement, including Baidu network promotional resources, provide promotional support to Party B, and make promotion of Party B on its website. 5.9 Party B will embed Baidu search bar into the homepage of www.leju.com, and any income thereof will be shared between Party A or any of its affiliates and Party B on monthly basis, the details of which are subject to separate alliance agreement between Party B and Party A or any of its affiliates. 5.10 Party C will be severally and jointly liable for any and all obligations of Party B under this Agreement. ARTICLE VI OWNERSHIP Party A maintains its ownership of all rights, entitlements and interests of its websites and trademarks. Party B maintains its ownership of all rights, entitlements and interests of its websites, trademarks, and the information and data on the Cooperation Channel. ARTICLE VII EXCLUSIVITY During the term of this Agreement, Party B and its affiliates will be the exclusive cooperator of Party A's real estate and home furnishing cooperation channel. Party B and its affiliates will be the exclusive provider of real estate and home furnishing information, products and data in Party A's real estate and home furnishing channel. Party A may not make any identical or similar cooperation regarding the real estate and home furnishing information, products and data in its real estate and home furnishing channel with any competitor of Party B. ARTICLE VIII CONFIDENTIALITY 8.1 Unless with express prior written consent from the other Party (which consent 10 + + + + + + may not be withheld without reason), none of the Parties may make any public announcement or statement regarding this Agreement or any relationship with this Agreement. 8.2 Subject to written consent from the other Party, any Party may make press release or any other public presentation regarding the cooperation, cooperation channel and Party B's participation in the Cooperation Channel contemplated under this Agreement. 8.3 Any Party (the "Receiving Party') will keep in strict confidence any business secret received by it from the other Party (the "Disclosing Party") and, without prior written consent of the Disclosing Party, may not disclose such information to any third party or, if it fails to do so, be liable for any loss incurred by the Disclosing Party, unless such information: (a) Has been known to the Receiving Party without any non-disclosure obligation prior to its receipt of the same from the Disclosing Party; (b) Has been known to the public without fault of the Receiving Party; (c) Is legally received from any third party without non-disclosure obligation or use restriction; (d) Is developed independently by the Receiving Party; (e) Is disclosed without prior written consent from the Disclosing Party; and (f) Is disclosed under legal requirements having jurisdiction of the Receiving Party, provided that the Receiving Party will notify the Disclosing Party with prior written notice permitted under applicable laws and regulations of the exact business secret to be disclosed so as to enable the Disclosing Party to take effective protective measures. 8.4 The provisions under this Article VIII will have effect during and after the term of this Agreement. ARTICLE IX BREACH LIABILITY 9.1 If any Party fails to perform any of its obligations under this Agreement, the breaching Party will cease its breach of this Agreement immediately upon receipt of a written notice from the non-breaching Party requesting correction of such breach, and will continue to perform, take corrective measures, or indemnify any loss incurred by the non-breaching Party within ten business days. If the breaching Party continues with such breach or fails to perform any of its obligations, the non-breaching Party may terminate this Agreement with immediate effect upon written notice to the breaching Party, and hold the breaching Party liable for any loss incurred by the non-breaching Party. 9.2 If each of the Parties is liable for breach of this Agreement, it will be held liable according to the extent of its failure thereof. 11 + + + + + + ARTICLE X TERMINATION 10.1 Special Provisions The Parties agree that within three months prior to the 4 anniversary of the date hereof, Party B may conduct comprehensive review of the Cooperation contemplated hereunder and may elect to continue performing or terminate this Agreement. If Party B elects to terminate this Agreement, it will notify Party A in writing and this Agreement will terminate upon receipt of such written notice by Party A. Party B will settle any and all cooperation fee regarding the Cooperation Channel outstanding prior to 4 anniversary of the date hereof, and arrange appropriate transfer of all matters relating to the operation and construction of the Cooperation Channel to Party A. Such termination will not affect performance of any right and obligation occurred prior thereto. 10.2 This Agreement will terminate if: (a) The Parties decide not to extend it upon its expiry; (b) The non-breaching Party terminates this Agreement pursuant to Article IX; (c) Any of the Parties terminates this Agreement pursuant to Article XI; (d) Any of the Parties declares bankruptcy or is in the process of liquidation or dissolution; (e) Any force majeure event continues for more than 30 days and any of the Parties issues a termination notice pursuant to Article XIII of this Agreement and terminates this Agreement on the date of receipt provided under this Agreement; and (f) With agreement of the Parties. If any of the Parties terminates this Agreement unilaterally under any of the above circumstances, this Agreement will terminated immediately upon receipt of the termination notice by the other Party. 10.3 If any of the Parties declares bankruptcy or is in the process of liquidation or dissolution, any Party may terminate this Agreement with immediate effect upon notice to the other Party in writing. Any Party encountering such circumstance will immediately notify the other Party of such circumstance. 10.4 Post-Termination Matters (a) Unless otherwise provided under Section 10.1 of this Agreement, upon early termination of this Agreement, Party A will return to Party B the channel cooperation fee paid by Party B net part of the payment for the obligations which have been performed under this Agreement. If this Agreement is early terminated for any fault of Party B, Party B may not claim for any reason repayment of any channel cooperation fee paid to Party A. Termination of this Agreement will affect any settlement or payment obligation outstanding under this Agreement, or any obligation or right accrued prior to such termination. (b) Upon termination of this Agreement, Party B will arrange appropriate transfer of all matters relating to the operation and construction of the Cooperation Channel to Party A. (c) Upon termination of this Agreement, Articles VIII, IX and XII will 12 + +th + +th + + + + + + continue to have binding effect upon the Parties. ARTICLE XI ASSIGNMENT AND WARRANTY OF RIGHTS AND OBLIGATION'S 11.1 Without prior written consent of the other Parties, none of the Parties may assign any or all of its rights and obligations under this Agreement to any third party. 11.2 In the event of any merger or division involving any of the Parties, all rights and obligations of such Party will be assigned in conjunction with such merger or division, provided that such Party will warrant that the rights and obligations of the other Party under this Agreement will not be affected. Upon occurrence of any of the above circumstances which could affect performance of this Agreement, such Party is obligated to notify the other Party of such effect. If such merger or division could make it impossible to perform this Agreement, the Party against which this Agreement will not be performed may terminate this Agreement with a prior written notice to such Party. 11.3 Neither Party A or Party B may create any security interest upon any of its rights under this Agreement for any third party claim. 11.4 Any Party involving in any merger will notify the other Party immediately of such merger so that the Parties may reach further agreement regarding the assignment of the rights and obligations under this Agreement. ARTICLE XII GOVERNING LAW AND DISPUTE RESOLUTION 12.1 The execution, effect, interpretation and performance of this Agreement and resolution of any dispute arising from this Agreement will be governed by PRC Laws. 12.2 Any dispute arising from construction or performance of this Agreement will be firstly resolved through negotiations of the Parties. 12.3 If the Parties fail to resolve the dispute through negotiations, any of the Parties may submit the dispute for resolution by litigation at the local people's court having jurisdiction over Party A. ARTICLE XIII FORCE MAJEURE 13.1 Force Majeure will include without limitation any acts of God, such as earthquakes, fires, and rampant epidemics; government authority factors, such as laws, policies and administrative orders; and any other element subject to legal requirements. 13.2 In the event of any Force Majeure which prevents any of the Parties from performing this Agreement, the Party encountering such Force Majeure will notify the other Party with details of such Force Majeure as soon as reasonably possible. Any delay or failure to perform this Agreement due to Force Majeure will not operate as breach of this Agreement and ground to make any indemnity, claim or punishment. Under such circumstance, the Party encountering the Force Majeure will be obligated to perform this Agreement with reasonable measures to the extent practicable and, upon end of the Force Majeure, notify the other Parties of the end of the Force Majeure within five days. If the Force Majeure causes this Agreement un-performable, the Parties may negotiate to terminate this Agreement without any liability on any Party. Any issue post to such termination will be resolved by the Parties through negotiations. 13 + + + + + + ARTICLE XIV SUPPLEMENTAL PROVISIONS 14.1 Any failure or delay to perform any of the rights, powers or privileges under this Agreement will not operate as waiver thereof unless expressly made by the waiving Party in writing. Any single or partial exercise of any rights, powers or privileges hereunder by any Party will not preclude its further exercise of any rights, powers or privileges, unless without express waiver by such Party in writing. 14.2 If any of the provisions under this Agreement is held illegal, invalid or unenforceable under any applicable law, the Parties will modify such provision so that this Agreement could be valid, effective and enforceable according to the original intent of the Parties as closely as possible, and the remainder of this Agreement will remain valid and enforceable. 14.3 Any and all terms of this Agreement may not be changed or amended by any Party. Any matter not provided under this Agreement or any amendment, change or supplement hereto will be subject to supplemental agreement with signature and seal of the authorized representative of each of the Parties, which supplemental agreement will have the same effect with this Agreement. 14.4 Any matter not provided under this Agreement will be resolved under the PRC Laws. 14.5 This Agreement is made in six counterparts with two for each Party, and each original has the same effect. 14.6 This Agreement is dated April 29, 2010. (NO TEXT BELOW) Party A: /s/ Beijing Baidu Netcom Science and Technology Co., Ltd. Party B: /s/ China Online Housing (Hong Kong) Co., Ltd. Party C: /s/ Beijing Yisheng Leju Information Services Co., Ltd. 14 \ No newline at end of file diff --git a/full_contract_txt/LIGHTBRIDGECORP_11_23_2015-EX-10.26-STRATEGIC ALLIANCE AGREEMENT.txt b/full_contract_txt/LIGHTBRIDGECORP_11_23_2015-EX-10.26-STRATEGIC ALLIANCE AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..380cdf3201b49ee42ca54be461bda1bebb966ef4 --- /dev/null +++ b/full_contract_txt/LIGHTBRIDGECORP_11_23_2015-EX-10.26-STRATEGIC ALLIANCE AGREEMENT.txt @@ -0,0 +1,179 @@ +Exhibit 10.26 + +STRATEGIC ALLIANCE AGREEMENT + +This STRATEGIC' ALLIANCE AGREEMENT (including the exhibits and schedules hereto, this "Agreement") is made and entered into this 16 day of August. 2012 (the "Effective Date") by and between Lightbridge Corporation, a Nevada Corporation ("Lightbridge"), and Lloyds Register FNMA, acting through its office in Abu Dhabi ("Lloyds" and. together with Lightbridge. the "Parties"). + +BACKGROUND + +Lightbridge and Lloyds believe that, by cooperatively combining their considerable experience, expertise and financial and market resources, they can increase the volume of business they can conduct in in the area of nuclear consulting and strategic advisory services in the United Arab Emirates. Accordingly, in consideration of the foregoing and of the mutual representations, warranties, covenants and agreements contained in this Agreement and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound by this Agreement, agree as follows: + +ARTICLE I DEFINITIONS + +As used in this Agreement: + +"Affiliate" shall mean, with respect to any referenced Person, any other Person that directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with such referenced Person. + +"Business Day" shall mean any day other than a Saturday, a Sunday or a day on which commercial banks in New York or London are generally authorized or required to close. + +"Confidential Information" shall mean, as to any Party as a Recipient, (a) all non-public written, graphic, oral, electromagnetic or other information (including technical, financial and business information regarding models, market studies, business plans. clients' names, reports, plans. projections, data or any other information) relating to the business, strategy, prospects or plans of the other Party or any of the other Party's Affiliates and (b) any reproductions, copies, notes, analyses, work papers. compilations, studies, interpretations or any other document or information derived from any of the foregoing. + +"Project" shall mean any undertaking involving the provision of nuclear consulting or strategic advisory services to any entity in the United Arab Emirates. + +"Government Authority" shall mean any national, federal, provincial, state, prefectural or municipal governmental tribunal or organization, or any political subdivision. instrumentality. Ministry, department, legislative body, agency, court, tribunal, authority, corporation, commission or other body or entity of, or under the direct or indirect control of, any of the foregoing, including any central bank or other fiscal, monetary or other authority. + +- 1 - + + + + + +"Law" shall mean any law, statute, ordinance, act, legislation, bill, enactment, policy, treaty, international agreement, ordinance, judgment, injunction, award, decree, rule, regulation, interpretation, determination, requirement, writ or order of, or any term of any license or permit issued by, any Government Authority. + +"Person" shall mean any individual, corporation, partnership, limited liability company, joint venture, association, trust, unincorporated organization or other entity. + +"Recipient" shall mean each Party. whenever it has received or is receiving Confidential Information directly or indirectly from the other Party or any of its Affiliates. + +ARTICLE II GENERAL SCOPE; RELATIONSHIP OF THE PARTIES + +Section 2.1 General Scope. During the term of this Agreement, the Parties shall actively seek attractive Projects and, in pursuit of any potential Project, shall promote the Lightbridge-Lloyds strategic alliance whenever given the opportunity to do so. Each Party shall present to the other Party every potential Project which such Party desires to pursue. + +Section 2.2 Relationship of Parties. With respect to any Project, regardless of which Party identified such Project, the Parties agree that Lloyds shall act as prime contractor on any Project and that Lightbridge shall have a right of first refusal to participate in such Project as a sub- contractor to Lloyds, and shall be entitled to perform such work which would generate up to twenty-five percent (25%) of the total fees payable to Lloyds as general contractor under the Project. + +Section 2.3 Identification of Projects. Upon identification of a Project, the Parties shall jointly prepare a proposed plan for the acquisition and execution of the Project, which shall include a detailed forecasted budget therefore. Upon the award of a prime contract regarding a Project to Lloyds, the Parties shall attempt in good faith to negotiate and enter into a subcontract agreement whereby the scope of Lightbridge's services on the Project, and compensation to Lightbridge therefore, shall be specified. + +Section 2.4 No Commitment. Notwithstanding anything to the contrary, the Parties understand and agree that each Party shall have the right, at all times and in their sole and absolute discretion, to pursue or not pursue or continue with or not continue with a Project and that neither Party shall have any obligation or liability to the other Party arising out of or relating to a decision not to pursue a Project for any reason. Each Party agrees that it shall not pursue any damages against the other Party or any of its Affiliates arising out of or relating to a decision by such Party or any of its Affiliates not to pursue or continue with a Project, regardless of' the reason for such decision. + +ARTICLE III COMPLIANCE WITH LAWS + +Each Party shall, and shall cause its Affiliates to. at all times, comply in all respects with all applicable Laws in connection with the transactions contemplated by this Agreement. Without limiting the generality of the foregoing, each Party (the "Relevant Party") shall not, and shall cause its Affiliates not to, do or cause to be done any of the following in connection with the transactions contemplated by this Agreement: (a) directly or indirectly through any other Person. pay, offer to pay, promise to pay, or authorize the payment of any monies or anything of value to any official or employee of any Government Authority or any political party or candidate for political office for the purpose of illegally or improperly inducing or rewarding any action by such official, employee or candidate favorable to the Relevant Party or any of its Affiliate or (b) take any other action that, if taken by a Person subject to United States law, would violate the United States Foreign Corrupt Practices Act. Each Party acknowledges and agrees that is familiar with the United States Foreign Corrupt Practices Act. + +- 2 - + + + + + +ARTICLE IV CONFIDENTIALITY + +Section 4.1 Obligation to Maintain and Protect Confidentiality. The Recipient agrees that it shall receive, protect and maintain the Confidential Information in the strictest confidence. The Recipient agrees to keep all of the Confidential Information confidential, not to use that Confidential Information other than for the purpose of this Agreement and not to disclose the same to any Person other than in accordance with this Agreement without the prior written consent of the Party from whom such Confidential Information was received, unless: + +(a) the Recipient is required to make the disclosure by Law or under any administrative guideline or directive (whether or not having the force of Law) the observance of which, if not having the force of Law, is in accordance with the practice of responsible persons similarly situated; + +(b) the disclosure is necessary for the purpose of obtaining any consent, authorization, approval or license from any Government Authority with respect to the transactions effected pursuant to this Agreement; + +(c) it is necessary that the disclosure be made to any taxation or fiscal authority; + +(d) the disclosure is made in accordance with Section 4.3 to the officers, employees, or agents of the Recipient, or to the professional advisors of the Recipient for the purpose of obtaining professional advice in relation to this Agreement or any matter the subject thereof or otherwise for the purpose of consulting those professional advisors; + +(e) the disclosure is necessary or desirable in relation to any procedure for discovery of documents and any proceedings before any court, tribunal (including any arbitral tribunal) or regulatory body; or + +In respect of any Confidential Information to be disclosed by the Recipient pursuant to the exceptions referred to in this Section 4.1, the Recipient must, prior to such disclosure, notify the Party from whom the Confidential Information was received of the need or intention to disclose. + +Section 4.2 Exceptions to Confidentiality. The confidentiality provisions contained in this Agreement do not apply to information or details of the Confidential Information which: + +- 3 - + + + + + +(a) are part of the public domain at the time acquired by the Recipient; + +(b) are not acquired by the Recipient. either directly or indirectly, from the disclosing Party or its Affiliates; + +(c) are made known to the Recipient by a Person who did not acquire knowledge of the information or of the details, either directly or indirectly, under an obligation of confidentiality or has an independent right to disclose same; + +(d) after being made known to the Recipient, becomes part of the public domain through no fault of the Recipient or of any Person to which the Recipient has disclosed details of the Confidential Information; or + +(e) the Recipient can establish were in its possession prior to the date of disclosure of such details by the disclosing Party. + +Section 4.3 Disclosure to Affiliates; Safekeeping. The Recipient agrees that prior to disclosure of Confidential Information to any Affiliate, it will inform the Affiliate of the confidential nature of the Confidential Information and require such Affiliate to treat the Confidential Information as confidential according to this Agreement as if such Affiliate were a Recipient. The Recipient shall, and shall cause each of its Affiliate to, use its best endeavors to procure and ensure at all times the safe and confidential storage of Confidential Information in their possession or control. Without limiting the foregoing, the Recipient shall, and shall cause its Affiliate to, safeguard the Confidential Information to the same extent as if it were information of or pertaining to the Recipient. and the Recipient acknowledges that the release, publication or dissemination of the Confidential Information could be harmful to a Project or a Party. + +Section 4.4 Return of Confidential Information. The Recipient agrees that upon the written request of the disclosing Party it will promptly (a) return all Confidential Information and any and all copies thereof to the disclosing Party and shall require each of its Affiliate to do likewise or (b) destroy the same and deliver a certificate of destruction to the disclosing Party. + +Section 4.5 Survival of Confidentiality Obligations. This Article IV shall survive termination of this Agreement. + +ARTICLE V EVENTS OF DEFAULT; TERM AND TERMINATION + +Section 5.1 Events of Default. Each of the following events constitutes an event of default (an "Event of Default") by a Party (the "Defaulting Party") under this Agreement: + +5.1.1 the Defaulting Party fails to perform in any material respect any obligation under this Agreement. or any representation or warranty made by the Defaulting Party in this Agreement is untrue in any material respect, and such failure is not cured within 30 days after the non-Defaulting Party notifies the Defaulting Party of such failure; or + +- 4 - + + + + + +5.1.2 the Defaulting Party: + +(a) files a petition or otherwise commences, or authorizes or acquiesces in the commencement of. a proceeding or cause under any bankruptcy, winding up, liquidation. insolvency, receivership or similar law for the protection of creditors or has such a petition filed or proceeding commenced against it. which, in the case of an involuntary petition or proceeding, remains undismissed and unstayed for 90 days; or + +(b) is otherwise adjudicated insolvent or unable to pay its debts as they become due, otherwise makes an assignment for the benefit of its creditors or is dissolved or otherwise terminated. + +Section 5.2 Remedies. Upon the occurrence and during the continuation of any Event of Default, the non-Defaulting Party may immediately terminate this Agreement by giving notice to the Defaulting Party. The non-Defaulting Party's remedy set forth in the immediately preceding sentence is not intended to be exclusive and is in addition to, and may be exercised concurrently with, any other right or remedy that may otherwise be available to the Non-Defaulting Party at law or in equity. Without limiting the foregoing and for the avoidance of doubt, the Non-Defaulting Party may recover damages against the Defaulting Party even if this Agreement is terminated (including damages arising out of such termination). + +Section 5.3 Term and Termination. This Agreement is effective on the Effective Date and shah continue in effect until the earlier of (a) the fifth (5t h) anniversary of the Effective Date, and (b) termination by either Party for any reason upon thirty (30) days' written notice to the other Party; provided, however, that no Party shall be able to terminate this Agreement so long as such Party is a Defaulting Party under this Agreement. The occurrence of the Termination Date shall not relieve either Party of any unfulfilled obligation or undischarged liability of such Party relating to the period prior to the Termination Date. + +ARTICLE VI NOTICE + +Section 6.1 Notices. All notices, consents, demands or other communications (collectively, the "Notices") made pursuant to this Agreement shall be in writing, in the English language and signed and correctly dated by the Party sending same. All Notices shall he delivered personally (by courier or otherwise) or by facsimile to the receiving Party at the address given below: + +If to Lightbridge With copy to: Addressed to: Lightbridge Corporation Pillsbury Winthrop Shaw Pittman LLP 1600 Tysons Boulevard 2300 N Street, NW Tysons Corner, VA 22102 Washington, DC 20037 Attn: James D. Guerra Attn: Louis A. Bevilacqua Tel.: 571-730-1200 Tel.: 202-663-8158 + +- 5 - + + + + + +If to Lloyds With copy to: Addressed to: Energy Area Business Manager Global Nuclear Director Lloyd's Register, EMEA Lloyd's Register Festival Office Tower, Suite 2001 71 Fenchurch Street Dubai Festival City London Al Rebat Street EC3M 4BS Ras Al Khor, Deira United Kingdom Dubai Tel: +44 20 7423 1677 United Arab Emirates Tel.: +971 4 701 4236 + +Section 6.2 Effective Date of Notices. Any Notice delivered personally shall be deemed to have been given on the date it is so delivered, or upon attempted delivery if acceptance of delivery is refused, and any notice delivered by facsimile transmission shall be deemed to have been given on the first Business Day it is received (or on the first Business Day after it is received, if received on other than a Business Day). Notice given in any other manner shall be deemed to have been given on the first Business Day it is received (or on the first Business Day after it is received, if received on other than a Business Day). + +Section 6.3 Change of Address for Notices. A Party may change the address to which Notices hereunder are to be sent to it by giving Notice of such change of address in the manner provided in Section 11.1. + +ARTICLE VII MISCELLANEOUS + +Section 7.1 No Partnership; No Agency. Nothing contained in this Agreement shall be construed so as to create a partnership, joint venture or common enterprise between the Parties. Neither Party shall be liable for the debts or obligations of the other Party. Each Party shall limit its activities pursuant to the terms of this Agreement to that of the functions and related services expressly set forth herein. Without limiting the foregoing, neither Party is authorized to assume or create any obligation, liability, or responsibility, expressed or implied, on behalf of or in the name of the other Party or any of its Affiliates or to bind the other Party or any of its Affiliates in any manner whatsoever, and neither Party shall hold itself out as an agent or legal representative of the other Party or any of its Affiliates. + +Section 7.2 Governing Law. The terms of this Agreement shall be governed by and construed in accordance with the laws of England. + +- 6 - + + + + + +Amendment and Modifications. This Agreement may be amended, modified or supplemented at any time by the Parties but only pursuant to an instrument in writing signed by both of them. + +Section 7.4 Binding Effect. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns. + +Section 7.5 Assignment. No Party may assign this Agreement without the prior written consent of the other Party. + +Section 7.6 Entire Agreement. This Agreement, together with that certain Non-Circumvention and Confidentiality Agreement, dated December 16, 2011, between Lightbridge and Lloyd's Register Group Services Limited, contains the entire Agreement of the Parties with respect to the transactions contemplated hereby and supersedes all prior understandings and agreements of the Parties with respect to the subject matter hereof. + +Section 7.7 Severability. If any provision of this Agreement is held invalid or unenforceable. all other provisions will not be affected. With respect to the provision held invalid or unenforceable, the Parties will amend this Agreement as necessary to effect the original intent of the parties to this Agreement as closely as possible. + +Section 7.8 No Third-Party Beneficiaries. Nothing in this Agreement, expressed or implied, is intended to confer any rights or remedies under or by reason of this Agreement on any Person other than the Parties and their respective successors and permitted assigns, nor is anything in this Agreement intended to relieve or discharge any obligation of any third person to any Party or give any third person any right of subrogation or action against any Party. + +Section 7.9 Execution in Counterparts. This Agreement may be executed in any number of counterparts and by different Parties in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which taken together shall constitute but one and the same instrument. Delivery of an executed counterpart of the signature page of this Agreement by facsimile transmission shall he equally as effective as delivery of a manually executed counterpart of this Agreement. + +Section 7.10 Expenses. Each of the Parties shall pay its own costs incurred in connection with the negotiation, preparation and execution of this Agreement. + +[THE REST OF THIS PAGE IS LEFT INTENTIONALLY BLANK] + +- 7 - + + + + + +IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be duly executed as of the day and year first above written. + +Lightbridge Corporation By:/s/ James D. Guerra Name: James D. Guerra Title: COO + +Lloyds Register EMEZ By:/s/ N.D.A.M. Nooren Name: N.D.A.M. Nooren Title: AREA Business Manager - Energy MEAA + +- 8 - \ No newline at end of file diff --git a/full_contract_txt/LIMEENERGYCO_09_09_1999-EX-10-DISTRIBUTOR AGREEMENT.txt b/full_contract_txt/LIMEENERGYCO_09_09_1999-EX-10-DISTRIBUTOR AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..91dfc6f9e4cf7999131410fbea8018b6bede8c42 --- /dev/null +++ b/full_contract_txt/LIMEENERGYCO_09_09_1999-EX-10-DISTRIBUTOR AGREEMENT.txt @@ -0,0 +1,279 @@ +EXHIBIT 10.6 + + DISTRIBUTOR AGREEMENT + + THIS DISTRIBUTOR AGREEMENT (the "Agreement") is made by and between Electric City Corp., a Delaware corporation ("Company") and Electric City of Illinois LLC ("Distributor") this 7th day of September, 1999. + + RECITALS + + A. The Company's Business. The Company is presently engaged in the business of selling an energy efficiency device, which is referred to as an "Energy Saver" which may be improved or otherwise changed from its present composition (the "Products"). The Company may engage in the business of selling other products or other devices other than the Products, which will be considered Products if Distributor exercises its options pursuant to Section 7 hereof. + + B. Representations. As an inducement to the Company to enter into this Agreement, the Distributor has represented that it has or will have the facilities, personnel, and financial capability to promote the sale and use of Products. As an inducement to Distributor to enter into this Agreement the Company has represented that it has the facilities, personnel and financial capability to have the Products produced and supplied as needed pursuant to the terms hereof. + + C. The Distributor's Objectives. The Distributor desires to become a distributor for the Company and to develop demand for and sell and distribute Products solely for the use within the State of Illinois, including but not limited to public and private entities, institutions, corporations, public schools, park districts, corrections facilities, airports, government housing authorities and other government agencies and facilities (the "Market"). + + D. The Company's Appointment. The Company appoints the Distributor as an exclusive distributor of Products in the Market, subject to the terms and conditions of this Agreement. + + 1. ESTABLISHMENT OF DISTRIBUTORSHIP + + 1.1 Grant and Acceptance. Company hereby appoints Distributor as Company's exclusive distributor within the Market and grants to Distributor the exclusive right to sell and distribute Products within the Market, and Distributor hereby accepts such appointment and such grant, in accordance with the terms and conditions of this Agreement. Distributor acknowledges that customers of other distributors of the Products may have sites, locations or operations in the Market, which will use the Products. Distributor will sell any and all Products required by such customers in the Market to those customers. Distributor also acknowledges that if its customers have sites, locations or operations outside the Market, in the market of another exclusive distributor of the Products, those customers will be required to purchase products from the applicable exclusive distributor in that market; otherwise, Distributor shall be free to sell to its customers in any market which does not have another exclusive distributor. + + 1.2 License. The Company hereby grants the Distributor the right to do business and use the name "Electric City of Illinois" or a similar variation thereof (collectively the "Names") for use under this Agreement. Distributor may file with the appropriate state and local authorities assumed name certificates as required. Copies of all documents relating to the use of the Names shall be forwarded to the Company. Upon termination of this Agreement Distributor shall have no further right to the Names and said License to use the Names shall terminate. Distributor shall have no right to sublicense the Names or to do business under any other names without the Company's prior approval in writing. The parties acknowledge that the terms herein consist of there terms for Illinois. At the request of either party, a new agreement reflecting the terms and conditions of this Agreement, may be executed for each state or entity representing each state. + + + + + + 1.3 Term. The term of this Agreement shall be ten (10) years (the "Term") which shall commence on the date upon which the Company delivers to Distributor the last Sample, as defined hereinafter. If Distributor complies with all of the terms of this Agreement, the Agreement shall be renewable on an annual basis for one (1) year terms for up to another ten (10) years on the same terms and conditions as set forth herein. All renewals of this Agreement shall be on the same terms and conditions as are set forth herein. + + 1.4 Company's Obligation. Company shall sell and deliver as provided in Section 2.3 of this Agreement to Distributor on the price terms set forth in this Agreement or as amended from time to time such quantity of Products as Distributor from time to time orders from Company. Company shall promote and advertise the Products generally, at its own expense, and shall furnish Distributor copies at all advertisement and promotional materials. + + 1.5 The Distributor's Obligation. The Distributor, at its own expense, shall promote the distribution, sales, and use of Products in the Market. + + 1.6 Distributor's Terms and Minimum Expectations. In order to maintain the exclusive rights to sell, lease, distribute and service Products in the Market, the Distributor must use all commercially reasonably efforts to purchase for sale to subdistributors the following minimum quantities of the Products from the Company: + + On the commencement of the Term Distributor will issue to the Company an irrevocable letter of credit ("LC") in the amount of Five Hundred Thousand Dollars ($500,000), the form of which is attached hereto as Exhibit A and incorporated herein by reference. The LC shall have a two (2) month term, and shall be renewed for five (5) consecutive bimonthly periods. A minimum of a $250,000.00 purchase order must be received by Company by the first of each month for a total (12) month period. The Company may draw funds from the LC to pay for Distributor's purchases, which are not paid according to the terms in Section 2.7. Prices for the EnergySaver units are + + Page -2- + +provided by the Company as Exhibit C. The Company will be entitled to draw against the LC pursuant to the terms of the LC. + + (A) 375 units in the first Product Year (1999) + + (B) 750 units in the next succeeding Product Year; (2000) + + (C) 937 units in the next succeeding Product Year; (2001) + + (D) 1,171 units in the next succeeding Product Year; (2002) + + (E) 1,463 units in the next succeeding Product Year; (2003) + + (F) 1,828 units in the next succeeding Product Year; (2004) + + (G) 2,285 units in the next succeeding Product Year; (2005) + + (H) 2,856 unit each in the lat three years of the initial Term of this Agreement and any renewals thereof. + + For purposes of this Agreement, a Product Year shall be the twelve (12) month period following the commencement of the initial Term of this Agreement and each twelve (12) months thereafter. Distributor's expected sales shall include the purchase of the Samples as defined hereinafter. + + Sales in excess of the expected sales which are actually made in a Product Year may be applied to meet the expectations for the next Product Year. Any such carry-over from one year to the next Product Year may not be considered in determining whether there is a carry-over from that next Product Year. Thus, by way of example and not limitation, if there was an expectation of 50 in year one and 200 for year two and 60 units are sold in year one and 195 units are sold in year two, the expectation for year two will have been met, but there will be no carry-over to year three. If the Distributor shall fail to purchase the minimum number of units in any year, the Distributor's exclusive rights to sell and distribute the Product in the Market, may at Company's sole option, be reevaluated. + + Company agrees that Distributor shall not be liable or subject to reevaluation for failure to meet expectations due to any occurrence beyond Distributor's reasonable control, including, but not limited to, Acts of God, fires, floods, wars, sabotage, accidents in shipping, labor disturbances, + + + + + +weather conditions, governmental regulation, lack of Company performance, delay by Company, failure of Company to honor warranties or otherwise materially support the Products. + + The aggregate units to be sold on an annual basis described above are for the Illinois distributorship on an aggregate basis. + + 1.7 Relationship of Parties. The relationship between the Company and the Distributor + + Page -3- + + is that of vendor and vendee. This Agreement does not create the relationship of principal and agent between the Company and the Distributor for any purpose whatsoever. This Agreement shall not be construed as constituting the Distributor and the Company as partners, joint venturers, or as creating any other form of legal association or arrangement which would impose liability upon one party for the act or omission of the other party. Neither party is granted any express or implied right of authority by the other party to assume or to create any obligation or responsibility on behalf of or in the name of the other party, or to bind the other party in any manner or thing whatsoever. + +2. PURCHASE OF PRODUCTS + + 2.1 Orders. The Distributor shall order Products from the Company on a purchase order form mutually acceptable to the Company and Distributor and which is consistent with Exhibit B hereto, and which incorporates the terms and provisions of this Distributor Agreement. The Distributor shall not order or purchase Products from any source other than the Company. All orders shall be subject to acceptance and confirmation by the Company. Distributor may cancel an order that is properly cancelled by Distributor's customer, unless the Company has commenced production which is in any way customized for that customer. The Distributor shall annually provide the Company with a non-binding forecast of orders for Products for the succeeding 12-month period. + + 2.2 Shipment. The Company and the Distributor shall jointly determine shipment dates. The Company shall use commercially reasonable efforts to ship promptly all orders for Products received from the Distributor. In addition to any other remedy which this Agreement provides to Distributor against Company, if Company fails to deliver or delays in delivering Products as were ordered by Distributor within 45 days after their required delivery date, and if as a result of such failure or delay Distributor loses its customer's orders for those Products, the number of units which Distributor ordered but were not timely delivered to Distributor or to Distributor's customer will be credited against Distributor's minimum expectation as specified on Section 1.6 of this Agreement. The Company may refuse to accept a purchase order on the grounds that it cannot meet the delivery schedule therein, and if as a result of such failure or delay Distributor loses its customer's orders for those Products, the number of units which Distributor ordered but were not timely delivered to Distributor or to Distributor's customer will be credited against Distributor's minimum. Distributor shall make reasonable efforts to notify the Company of the proposed delivery schedule before accepting a customer order and shall give the Company written notice of any customer purchase orders which imposes liability for late shipment and neither the Distributor nor the Company shall have a liability for consequential or liquidated damages pertaining to late delivery unless Company specifically acknowledges and agrees in writing to the same. The Distributor agrees that the Company shall not be liable for its failure to perform due to any occurrence beyond the Company's reasonable control, including, but not limited to, acts of God, fires, + + Page -4- + + floods, wars, sabotage, accidents in shipping beyond the Company's control, labor strikes other than strikes against the Company itself, weather conditions or foreign or domestic government regulation or authority which directly affects Company's ability to deliver Product. + + 2.3 Delivery. Other than "drop ship" deliveries, all deliveries + + + + + + made pursuant to this Agreement shall be FOB the Company's facilities located within the continental United States by a carrier authorized by the Distributor. + + 2.4. Prices. + + (A) Prices For Basic Units. The prices for Products in the first Product Year are supplied by Company as Exhibit C. + + (B) Inflation Price Adjustment. The prices set forth in Section 2.4(a) shall be subject to adjustment annually on the first day of each Product Year beginning in the calendar year 2000 and on the first day of each succeeding Product Year for the remainder of the Term and all renewals of this Agreement in proportion to the increase or decrease in the Consumer Price Index (CPI) as compared to the CPI as it existed on the first day of the Term of this Agreement. The Company also reserves the right to increase or decrease the price per unit based on Company wide changes in unit prices to all distributors of the Company, provided however, that any price changes, other than those based on the CPI, shall be uniformly applied to all distributors of the Products and shall reasonably applied to all distributors of the Products and shall reasonably reflect Company's costs of manufacturing the Products and/or market demand for the Products, provided further than any increase in price based upon market demand shall not be so great as to deprive Distributor of its normal and customary profit margin. The Company agrees to exercise this right in good faith, and consider all circumstances of the Distributor and the Company. The CPI referred to herein in issued by the Bureau of Labor Statistics of the U.S. Department of Labor. Should the Bureau of Labor Statistics discontinue publication of the CPI, the parties shall accept comparable statistics on the purchasing power of the consumer dollar as published at the time of said discontinuation by responsible periodical or recognized authority to be chosen by the parties. + + 2.5. Resale Prices. The Distributor may resell Products at such price, as the Distributor, in its sole discretion, shall determine. While the Company has the right to suggest a range of manufacturer's suggested retail prices for the Products, the distributor is not obligated to set retail prices within the Company's suggested range of retail prices. + + 2.6 Product Returns. + + Page -5- + + (A) Non-defective Products. Unless the Company has first authorized or permitted the return of any non-defective Products and except as otherwise permitted or required herein, the Company shall not be obligated to accept the return from the Distributor of any non-defective Products, nor to make any exchanges therefor, nor to credit the Distributor therefor. If Company does not give Annual Notice pursuant to Section 3.1 hereof, Distributor may, within 90 days of modification, improvement or alteration, return the Products to the Company. The Company shall not have any obligation with respect to Products after 365 days following delivery to Distributor, except as provided herein. + + (B) Defective Products. In the event of any damages or other defect in a Product which is discovered by Distributor within 365 days of satisfactory installation of a Product at Distributor's or a subdistributor's customer, the Distributor shall promptly report the same to the Company and reasonably demonstrate the defect to the Company. If the Distributor reasonably demonstrates that the Company is responsible for such damage or defect, the Company shall promptly deliver and install at the Company's expense, additional or substitute Products to the subdistributor's customer without additional cost or charge to the Distributor or the customer for material, labor, shipping, insurance or any other charge. + + 2.7 Payment Terms. Distributor shall pay Company within thirty + + + + + + (30) days of Distributor's or, as the case may be, the end-user's receipt of Products. + + 2.8 Company Cooperation. The Company shall cooperate with the Distributor in obtaining all necessary permits and approvals to permit the use of the Products. The Company shall bear responsibility for any permits needed to manufacture the Products and Distributor shall bear responsibility for any permits needed to distribute the Products. + +3. PRODUCTS AND WARRANTY + + 3.1 Product Improvements by the Company. At the Company's sole discretion, and at any time, the Company may give the Distributor at least 90 days advance notice ("Annual Notice") of any modification, improvement or alteration of Products ("New Products") and development of new models of Products (collectively with "New Products", "Improved Products"). Except for the Improved Products for which the Distributor receives the Annual Notice, the Company shall sell Improved Products to Distributor only with the consent of the Distributor. Any Improved Products shall be subject to the provisions of this Agreement. Old Products will remain available unless + + Page -6- + + Improved Products perform at the same or better levels and are offered at reasonably similar prices or at prices increases, which reasonably reflect improvements in performance. + + 3.2 Product Improvements by the Distributor. The Distributor shall disclose to the Company any modifications to Products requested by end-users or other proposals for Product improvement from end-users or the Distributor, but shall have no right to make modifications without Distributor's consent. + + 3.3 Warranty. Company shall at all times make reasonable efforts to maintain quality control and to deliver Products to Distributor which, when received by Distributor, or, as the case may be, the end-user, are properly and adequately packaged and contained, fully assembled (except for miscellaneous components which may be shipped separately to prevent damage in transit), fully functional and otherwise in conformance with the warranties set forth herein. Company warrants that the Products will be designed, manufactured, constructed, assembled and packaged in a workmanlike manner and that such Products shall be fully functional and fit for their intended purposes. Company further warrants that the Products sold hereunder shall be free from defects in design, materials and workmanship for a period of twenty-four (24) months after delivery to Distributor's end-user. The Company shall not be liable for defective Products, except as provided in this Agreement. The Distributor at all times shall comply with all requirements of the Magnuson-Moss Warranty-Federal Trade Commission Improvement Act and similar federal and state laws and regulations. + + 3.4 Warranty Work. If, within the twenty-four (24) month warranty period set forth above, Company received from Distributor or any of Distributor's end-user's a notice which may be oral notice confirmed in writing) that any of the Products sold hereunder do not meet the Warranties specified above, Company shall thereupon correct each such defect by providing the necessary repairs, and/or replacement parts, or if necessary, Products. Company shall promptly respond to any timely notice of defect. Unless otherwise expressly agreed to in writing by Distributor or Distributor's and-user, Company shall bear the reasonable expense of all labor, materials and shipping expended or used in connection with the correction of any defects in the Products occasioned by the non-conformance of the Product with Company's warranty as set forth herein. Company shall be entitled to dispute whether a Product is defective. In the event that Company is unable or unwilling to promptly perform any warranty work without reasonable cause and following full and fair opportunity to do so, or in the event of the necessity for emergency repairs of a defective Product for which there is no reasonable possibility of performance by Company, Distributor may perform such warranty work or hire a third party to perform such warranty work and the reasonable cost thereof shall be paid by Company. + + Page -7- + + + + + + 3.5 Service of Products in Territory. Within thirty (30) days after the execution of this Agreement, the Company and the Distributor shall mutually agree upon a reasonable schedule of charges for after market parts and services provided by the Company or the Distributor so that such charges do not adversely affect the marketability of the Products. + + 3.6. Non-Disclosure of Confidential Information. None of the parties hereto nor their associated or affiliated or affiliated companies shall during the term of this Agreement or thereafter disclose any confidential information obtained or acquired by them in connection with the Products and the business of the other, including, without limitation, trade secrets, business techniques, technical information, customer and potential customer lists, marketing data and information, prices, improvements to the Products in various stages of development, processes, or other confidential information relating to the Products or the business of the Distributor, except that either party shall be permitted to disclose (x) all or portions of such confidential information on a strictly need-to-know basis to the extent required by an order of a court of competent jurisdiction or by the order or demand of a regulatory body having jurisdiction over one or both parties and (y) any of such confidential information that is the sole property of the party making the disclosure and does not include any information owned by the other party. The Distributor shall not disclose this agreement except upon consent of Company. Confidential information shall not include information which: + + (A) Is or becomes generally available to the party who desires to disclose such information (or its associated or affiliated companies) (a "Disclosing Party") other than as a result of a breach of this Agreement or some other unlawful means; + + (B) Becomes available to the Disclosing Party on a non-confidential basis from a third party who is under no confidentiality or nondisclosure obligation with respect to such information; or + + (C) Was known to the Disclosing Party on a non-confidential basis prior to the disclosure thereof to such disclosing Party by a party to this Agreement. + +4. DURATION AND TERMINATION + + 4.1 Duration. Unless earlier terminated otherwise provided therein, this Agreement, subject to the commencement date established in Section 1.3, shall be effective immediately. Distributor shall submit written reports to the Company each quarter during the first year of the Term, commencing ninety (90) days after execution of this Agreement, describing its efforts, the potential customers it has approached and the status of its efforts. + + 4.2 Termination for Cause. Either party may terminate this Agreement upon 30 days + + Page -8- + + prior written notice to the other upon the occurrence of any of the following events: (A) the Distributor's failure to make full and prompt payment to the Company of all sums due and owing to it; (b) either party's default in the performance of any of the material, terms, conditions, obligations, undertakings, covenants or liabilities set forth herein and such default is not cured within a commercially reasonable time after the defaulting party has been notified of the default by the other party and (c) as otherwise expressly provided herein. In the event either party (a) becomes adjudicated insolvent, (b) discontinues its business, (c) has voluntary of involuntary bankruptcy proceedings instituted against it, or (d) makes an assignment for the benefit of creditors, the other party shall be entitled to terminate this Agreement effective immediately upon written notice. + + 4.3 Accrued Obligations. In the event that either Distributor or Company fails to comply with the terms of this Agreement, both Distributor and Company acknowledge and agree that in addition to any claim for damages either party may have arising from the default of the other, they shall have the right to seek equitable relief by way of a temporary restraining order, preliminary injunction, permanent injunction and such other equitable relief as may be appropriate. In the event a party seeks the equitable relief of a temporary restraining order, preliminary injunction, permanent injunction, mandatory + + + + + + injunction or specific performance both parties acknowledge that they shall not be required to demonstrate the absence of an adequate remedy at law, and neither party shall be required to post bond as a precondition to obtaining a temporary restraining order or preliminary injunction. The termination of this Agreement shall not relieve either party hereto from obligations which have occurred pursuant to the provisions of this Agreement prior to its termination, nor shall it release either party hereto from any obligations which have been incurred as a result of operations conducted under this Agreement. + + 4.4 Repurchase of Products. Upon the expiration or termination of this Agreement, pursuant to Section 4.1 or 4.2 hereof, the Company may, at its option to be exercised within 30 days of the date of the termination of this Agreement, and in its sole discretion, repurchase any Products in the possession of the Distributor at the net invoice price paid by the Distributor to the Company less any applicable special allowances, discounts, shipping or allowances for cooperative advertising. If Company terminates the Agreement without cause and for reasons other than Distributor's failure to meet its minimum expectations; it shall repurchase from Distributor any unopened Product, and shall bear all shipping, handling and related costs notwithstanding any other remedies to which Distributor may be entitled. On demand and tender of the repurchase price, the Distributor shall be obligated to deliver such Products to the Company. The Company reserves the right to reject any Products that are not factory sealed and in new and unused condition. Repurchased Products shall be shipped at the Company's expense, and the Company may offset any indebtedness of the Distributor to the Company against the repurchase price of such Products. Following expiration or termination of this Agreement, the Distributor may continue to sell any Products in the Market which are in its inventory + + Page -9- + + and which the Company has not repurchased. + +5. REPRESENTATIONS AND WARRANTIES AND OTHER MATTERS + + 5.1 Representations and Warranties of Company. + + (A) The Company represents that, to the best of its knowledge, Products are in compliance with all laws, and that the Products will not be hazardous or dangerous when used for their intended purpose. Products do not cause harmful emissions or other environmental hazards and Products do not violate or infringe any patents, copyrights, trademarks or other rights of nay third party(ies). Company further represents and warrants that its Products will perform as advertised and promoted by the Company, and will be approved or certified by Underwriters Laboratory. + + (B) The Company will make available to Distributor comprehensive technical support for the first Product Year. Distributor will have direct access to (a) the Company's engineering consultants and (b) the patent holder's technicians. Company's representatives will make themselves available three days per month in the first Product Year to consult with and train Distributor. All costs and expenses associated with the services provided to Distributor hereunder, including travel, lodging, engineering consultants' fees and employee time will be paid by Distributor. + + (C) Company will timely furnish all of Distributor's requirements for Products within the Market, provided it is given adequate notice of Distributor's requirements and a full and fair opportunity to fulfill the same. + + 5.2 Representations and Warranties of Distributor. + + (A) Distributor shall be entirely responsible for learning, understanding and training about the Products, the costs of advertising and promoting the Products in the Market through the Term of this Agreement. Distributor shall not issue, print or disseminate any information about the Products in the first Product Year without the express written consent of the Company. + + (B) Distributor will not engage the services of any engineering or consulting firm without the express + + + + + + written consent of the Company. + + 5.3 Indemnification. Company and Distributor agree to indemnify, defend and hold each other harmless from any and all suits, claims, obligations, liabilities, damages, losses and the like (including attorneys' fees and costs) relating to or arising out of: (A) any breach of any material representations, warranties, covenants, obligations, agreements or duties in connection with this Agreement; (b) any negligence or fault; (c) any violation by either of them of the patent, copyright, trademark or other + + Page -10- + + intellectual property rights of third parties. In addition, Company agrees to indemnify, defend and hold harmless Distributor from and against all suits, claims, obligations, liabilities, damages, losses and the like (including attorneys' fees and costs) arising out of or related to Company's manufacture or design of the Products, provided that Distributor is not at fault in connection with the same, and Distributor agrees to indemnify, defend and hold harmless Company from and against all suits, claims, obligations, liabilities, damages, losses and the like (including a attorneys' fees and costs) arising out of or related to Distributor's sales, marketing practices or unauthorized Product alteration (provided that Company is not at fault in connection with same). + + 5.4 Product Liability Insurance. Company will carry a reasonable amount of product liability insurance through a reasonably acceptable products liability insurance company and will name the Distributor as an additional insured under that policy. Company will make reasonable efforts to procure a policy, which is non-cancelable, except upon thirty (30) days, advance notice to the Distributor. + + 5.5 No License. The Distributor acknowledges and agrees the except as provided by Section 1.2 of this Agreement, this Agreement will not be construed as granting by implication, estopped or otherwise any license or other right of use with respect to any present or future patent, copyright, trademark, trade name or other proprietary right owned by or licensed to the Company or any of its affiliates. + + 5.6 No Action to Invalidate. During the Term of this Agreement and for three years thereafter, the Distributor (on behalf of itself and each of its affiliates) agrees not to commence, or provide any information to or otherwise assist any person or entity in connection with, any suit, action or proceeding contesting the ownership, validity or enforceability of any patent, copyright, trademark, trade name or other propriety right owned by or licensed to the Company, whether currently existing or hereinafter invented, developed or acquired unless required to by court order. The Distributor agrees to inform the Company promptly and cooperate with the Company in the event the Distributor obtains knowledge of any such suit, action or proceeding which has been initiated or is contemplated by any other person or entity. + + 5.7 Nonsolicitation. + + (A) During the Term of this Agreement and for a period of twelve (12) months thereafter, the Distributor (on behalf of itself, each of its affiliates and each of their respective representatives) agrees that it will not directly or indirectly solicit or hire any executive, managerial or technical employee of the Company or any of its affiliates. + + (B) Distributor further agrees that it will not interfere with or otherwise disrupt the business relations between the Company or nay of its affiliates and any of their current or prospective customers, suppliers or distributors, during the + + Page -11- + + Term of the Agreement and for a period of eighteen + + + + + + (18) months thereafter, nor will Distributor solicit any customer or potential customer of Company to purchase a competitive product during that period. + + 5.8. Nonpublic Information. The Distributor acknowledges that is it aware that the securities laws prohibit any person who has material, non-public information concerning the Company or the matters which are the subject of this Agreement from purchasing or selling securities of the Company (or options, warrants and rights relating thereto) and from communicating such information to any other person under circumstances in which it is reasonably foreseeable that such person is likely to purchase or sell such securities. + +6. INTERPRETATION AND ENFORCEMENT + + 6.1 Assignment. No assignment of this Agreement or any right accruing hereunder shall be made by the Distributor in whole or in part, without the prior written consent of the Company, which consent shall not be unreasonably withheld. As a condition to obtaining such consent, the Assignee of Distributor's interest hereunder shall first agree in writing in form and substance satisfactory to the Company, that is shall assume and be liable for the performance of all obligations imposes by this Agreement on Distributor, whether such obligations have then accrued are owing, or are yet to be performed, and shall demonstrate that is has the economic, and with approval of the assignment, the legal capability to perform all of the obligations of Distributor hereunder. Company may assign its interest in this agreement to any person or entity which has authority to fulfill Company's obligations hereunder and which has the economic ability to perform its obligations hereunder. Upon the assignment of a party's interest and rights in this Agreement the assigning party shall be relieved of all further obligations imposed by this Agreement. 6.2 Nonwaiver of Rights. Failure of either party to enforce any of the provisions of this Agreement or any rights with respect thereto or failure to exercise any election provided for herein shall in no way be a waiver of such provisions, rights or elections or in any way affect the validity of this Agreement. The failure of either party to exercise any of said provisions, rights or elections shall not preclude or prejudice such party from later enforcing or exercising the same or any other provisions, rights or elections which is may have under this Agreement. + + 6.3 Invalid Provisions. If any terms, provision, covenant, or condition of this Agreement is held by a court of competent jurisdiction to be invalid, void, or unenforceable, the remainder of the provisions shall remain in full force and effect and shall in no way be affected, impaired or invalidated. + + 6.4 Notices. Any notice or other communication required or permitted hereunder shall be in writing and shall be delivered personally, telegraphed, telexed, or sent by facsimile transmission or sent by certified, registered or express mail, postage prepaid. Any such notice shall be deemed given when so delivered personally, + + Page -12- + + telegraphed, telexed or sent by facsimile transmission or, if mailed, two (2) business days after the date of deposit in the United States mail, by certified mail return receipt requested, as follows: + + If to the Distributor to: Electric City of Illinois L.L.C. 8628 Oketo Avenue Bridgeview, IL 60455 Facsimile No. (708) 598-4671 Attn: Jim Stumpe + + With a copy to: Thomas V. McCauley 200 W. Adams, Suite 2500 Chicago, IL 60606 Facsimile No. (312) 346-9316 + + If to Company to: Electric City Corp. 1280 Lanmeier Rd. Elk Grove Village, IL 60007 Attn: Joseph Marino, President + + With a copy to: Kwaitt & Ruben, Ltd. 211 Waukegan Road Suite 300 + + + + + + Northfield, Illinois 60093 Attn: Philip E. Ruben, Esq. + +6.5 Entire Agreement. This Agreement, together with all exhibits attached hereto which are hereby incorporated by reference, supersedes any and all other agreements, either oral or written, between the parties hereto with respect to the subject matter hereof and contains of the covenants and agreements between the parties with respect to said matter. This Agreement may not be altered, amended or modified, except by written instrument signed by the parties hereto. + +6.6 Sample Products. Company will, during the Term of this Agreement (and any renewal term), provide Distributor, at Distributor's cost pursuant to the terms of this Agreement, with five (5) sample units (the "Sample" or "Samples") for use by Distributor in promoting sales. Distributor shall use the Samples for purposes of permitting potential customers to use the Products in the field. The Samples purchased by Distributor hereunder shall count toward the minimum expectations under this Agreement. + +6.7 Time of the Essence. Time is of the essence of this Agreement. + + Page -13- + +6.8 Force Majeure. Neither party to this Agreement shall be liable to the other party, nor shall be subject to injunctive relief by the other party if that party's performance of its duties or obligations under this Agreement is the consequence of Force Majeure as defined in Section 2.2 hereunder. + +6.9 Governing Law. This Agreement is to be construed according to the laws of the State of Illinois. + +7. NEW PRODUCTS + + 7.1 Right of Option. Should Company introduce other products or devices as contemplated by recital paragraph "A", Distributor shall have the option of becoming Company's exclusive distributor of such other Products or devices within the Market. + + 7.2 Exercise of Option. Distributor shall exercise its option to become exclusive Distributor of other Products or devices by serving written notification on Company of its election to become exclusive distributor within thirty (30) days upon which Company informed Distributor in writing of Company's intention to introduce other Products or devices. If Distributor does not exercise its option as herein provided, Company may distribute the other Products or devices within the Market itself or through other distributors. + + 7.3 Other Agreements. The terms pursuant to which such other Products or devices shall be sold by Company to Distributor shall be determined by a separate agreement, but such agreement shall be essentially on the same terms and conditions as herein provided, understanding that such terms as price, quotas, and length of the term of the agreement shall be reasonably adjusted to reflect the nature of the other Product or device which is the subject of the agreement. + + In witness whereof the parties have executed this Agreement as of the date first abovementioned. + + Electric City Corp. Electric City of Illinois L.L.C. + +By: /s/Joseph Marino By: Jim Stump ------------------- ------------------------------- President + + Page -14- \ No newline at end of file diff --git a/full_contract_txt/LOGANSROADHOUSEINC_03_27_1998-EX-10.17-SPONSORSHIP AGREEMENT.txt b/full_contract_txt/LOGANSROADHOUSEINC_03_27_1998-EX-10.17-SPONSORSHIP AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..4b074c63590ef65a842cc374d99cae3e55d7c034 --- /dev/null +++ b/full_contract_txt/LOGANSROADHOUSEINC_03_27_1998-EX-10.17-SPONSORSHIP AGREEMENT.txt @@ -0,0 +1,163 @@ +1 Exhibit 10.17 + + SPONSORSHIP AGREEMENT + + THIS SPONSORSHIP AGREEMENT (the "Agreement") is made and entered into this the 24th day of February, 1998, by and between Southern Racing Promotions, Inc., ("SRP") a Tennessee corporation, and Logan's Roadhouse, Inc., a Tennessee corporation ("Logan's"), with its principal place of business in Nashville, Tennessee. + + WHEREAS, SRP is engaged in the business of operating an automobile racing team; + + WHEREAS, SRP is securing sponsorship funds to offset the direct costs of campaigning a NASCAR Late Model Stock Car ("LMSC") Racing Team (the "Team") in the 1998 racing season at Nashville Motor Speedway ("NMS"); + + WHEREAS, Logan's desires to become the primary sponsor of the Team to promote its restaurant concept in Middle Tennessee and the southeastern United States; and + + WHEREAS, the parties desire to set forth in this agreement their respective rights and obligations; + + NOW, THEREFORE, in consideration of the promises and Agreements set forth herein, the parties hereto agree as follows: + + 1. PRIMARY SPONSOR. For the 1998 racing season, Logan's shall be the primary sponsor of the Team, which fields a LMSC racing vehicle (the "Race Car") driven by Brad Baker. During the term of this Agreement, SRP will not represent any other product or company or accept as a primary, secondary, associate or contingent decal sponsor any other product reasonably deemed by Logan's to be competitive with Logan's. + + 2. TERM. The term of this Agreement shall commence on the date hereof and, unless terminated as provided herein, shall continue through November 30, 1998. + + 3. SERVICES TO BE PROVIDED BY SRP. SRP shall perform the following services for Logan's in connection with race programs: + + (A) THE DRIVER. Except as specifically provided in this Agreement, Brad Baker ("Baker") will be the only driver for the Team for the term of this Agreement. If Baker is unavailable to perform as driver as a result of injury, illness or any other disability, or cause beyond his control, SRP shall provide an alternate driver subject to the approval of Logan's ("Alternate Driver"), which approval shall not be unreasonably withheld. Baker and any Alternate Driver appointed by SRP and approved by Logan's pursuant to this Agreement are herein collectively + + 1 2 + +referred to as the "Driver." The Driver shall not drive for any other sponsor which competes with Logan's. The Driver shall not drive any other race vehicle for any other sponsor than Logan's without prior written notice from SRP to Logan's. + + (B) ADVERTISING, ENDORSEMENTS, ETC. Unless otherwise provided in this Agreement, Logan's shall have the right at no additional expense to use the name, likeness and voice of Baker for endorsements, advertising and promotions in all forms of media. + + (C) PUBLIC IMAGE. SRP shall be primarily responsible for developing and maintaining a positive public image for the Driver and the Team. To facilitate this aim and in recognition of Logan's sensitivity to any adverse publicity with respect to the Driver and the Racing Team, SRP shall be responsible for the public image of the Driver and the Racing Team at all times, including but not limited to any statement by the Driver or the Team in connection with press conferences, media contact and any contact of the Driver or Team with the general public, whether at a race or otherwise. + + (D) CAR DESIGN. Consistent with NASCAR rules and regulations and the terms of Articles 4 and 5 of this Agreement, SRP will develop a graphic design for the Race Car (the "Graphic Design"). SRP will purchase decals for the Race Car based upon the Graphic Design and shall be responsible for painting the Race Car in conformity with the Graphic Design. + + (E) UNIFORMS. SRP will provide race day uniforms for up to a maximum of 12 personnel and a driver suit for the Driver. Consistent with the NASCAR rules and regulations, and excluding any patches required by NASCAR, Logan's shall have the exclusive right to promote its Logan's logo on uniforms and Driver's suit on the areas depicted on Exhibit A to this Agreement. Logan's also shall have the exclusive right to promote its Logan's trademark on the side of the helmet, as shown on Exhibit B to this Agreement. Uniforms and Driver's suit may display one patch each for up to two secondary or associate sponsors, provided such secondary or associate sponsors have been approved in advance by Logan's, such patches to be located as mutually agreed upon by Logan's and SRP. The Driver shall not appear in a race uniform or driving suit other than the + + + + + +Logan's uniform/suit in connection with or portraying involvement in NASCAR LMSC racing, whether or not used in product advertising or promotion. + + (F) CREDENTIALS. At the request of Logan's and consistent with NASCAR and race track rules, regulations and procedures, SRP will use best efforts to secure credentials for the pre-race admissions of a maximum of four designees of Logan's to pit row and/or the garage area of each regularly scheduled or special LMSC event in which the Race Car competes. + + (G) SHOW CAR. SRP will build and provide to Logan's a 1997 Ford Thunderbird automobile ("Show Car") that will have an appearance identical to + + 2 + +3 + +that of the race car, to include full roll cage, race interior, paint, graphics and under-hood race look. Logan's will provide equipment and driver to transport the Show Car to destinations and according to schedules as determined by Logan's. At the expiration of this contract, Logan's will return the Show Car to SRP in substantially the same condition as when received by Logan's, normal wear and tear excepted. + + (H) TRANSPORTER. SRP is attempting to purchase or lease a 53 foot semi-trailer to be pulled by a Peterbilt class eight tractor which will function as the Race Car transporter (the "Transporter"). In the event SRP is successful in procuring the Transporter, it will be lettered and pictured with Logan's racing graphics by SRP up to a maximum cost allowance of Two Thousand Five Hundred and No/100's ($2,500.00), with Logan's retaining the right to apply more extensive graphics at its own expense if Logan's so chooses. Any associate sponsor graphics appearing on the Transporter will be displayed in a subservient manner to clearly reflect Logan's as the primary sponsor of the Team. + + (I) AUTHORITY OF SRP. SRP hereby warrants that it has the authority to grant all rights to Baker under this Article 3. + + 4. ASSOCIATE AND SECONDARY SPONSORSHIPS. SRP shall have the right to obtain secondary and associate sponsors for the Race Car and Team, subject to the approval of Logan's, which approval shall not be unreasonably withheld. SRP may not obtain any associate or secondary sponsors whose products or concepts compete with Logan's. Any associate and/or secondary sponsor may promote its role as a sponsor by signage, logos or trademarks on the Race Car, provided that such associate and/or secondary sponsors signage, logos or trademarks used on the Race Car, when viewed collectively, shall not cover any area greater than 25% of that of Logan's signage, logos or trademarks, nor conflict with the graphic design, or in other locations or on clothing as may be permitted by the terms of the Agreement. Logan's shall have the exclusive use of the hood, the rear quarter panel area above the tire and the bottom of the deck lid (rear facing panel, TV panel) of the Race Car, as shown on Exhibit C to this Agreement. All other areas permitted by NASCAR for sponsor signage, logos or trademarks and the "spoiler space" are reserved for NASCAR, SRP and the associate and secondary sponsors. All associate and secondary sponsors' graphic layouts for the Race Car are subject to Logan's approval, which shall not be unreasonably withheld. Furthermore, SRP shall not permit any associate or secondary sponsor to suggest in any manner that its sponsorship role is as great as that of Logan's. + + 5. CONTINGENT SPONSORS. SRP intends to participate in NASCAR and NMS decal sponsor programs such as a series sponsor, and race related products such as tires and fuel. Logan's acknowledges that NASCAR or NMS require the placing of certain decals on the Race Car as a prerequisite for competing in a racing event. SRP acknowledges that such required decals shall be placed forward of the + + 3 + +4 + +door panel, or as otherwise required by NASCAR rules and regulations, in a way not to detract from Logan's signage. + + 6. COMPENSATION. In consideration of the services provided, SRP shall be entitled to a base fee of Eighty Thousand Dollars and No/100's (580,000.00) payable as follows: + + (i) $40,000.00 payable upon execution of this contract; and + + (ii) the balance of $40,000.00 payable in eight equal monthly installments of $5,000 each, due the first day of March, April, May, June, July, August, September and October, 1998. + + 7. TRADEMARKS. It is expressly understood that SRP may use the Logan's trademarks, logos or other symbols only as directed or approved by Logan's and that Logan's may use the trademarks, logos, symbols, name, likeness, voice or signature of the Driver, the Team or any secondary or associate sponsor only as directed or approved by the Driver, or secondary sponsors, as appropriate. SRP may license and use the Logan's name and Trademark in promotions directly related to the Race Car or the Team, such as souvenir items, hats, shirts, etc. Upon termination of this Agreement, SRP and any associate or secondary sponsors shall immediately cease all use of all Logan's trademarks, trade names, service marks, logos, symbols or other designations, and Logan's shall immediately cease all use of trademarks, trade names, service marks, logos, symbols or other + + + + + +designation of SRP or any associate or secondary sponsors, as well as any and all use of name, likeness, voice or signature of the Driver. + + 8. CONFIDENTIALITY. Both parties shall exercise due care to protect the confidentiality of any information exchanged between them as a result of this Agreement, including information exchanged during the negotiation of this Agreement, and shall not use such information to the disadvantage of the other party. However, nothing contained herein will prevent either party from fully utilizing information already known to such party or information which is or becomes generally available to the public through no fault of such party that has the right to disperse such information without breaching any obligation to one of the parties to this Agreement. The parties each specifically agree not to share confidential information received from the other party with any agent, including their respective advertising agencies, unless the party wishing to share such information with this agent receives written approval from the other party. + + 9. POWER AND AUTHORITY. Logan's and SRP warrant they have full power and authority to enter into and perform this Agreement, and the transactions contemplated hereby have been duly and validly authorized by all necessary corporate action, and each has the ability to provide the services called for hereunder. Upon the execution and delivery of this agreement, it will be a valid and binding obligation of Logan's and SRP in accordance with its terms. Logan's and + + 4 + +5 + +SRP further warrant they have not made, nor will make, any Agreement or commitment which would prevent or interfere in any way with the full performance of the obligations hereunder or the full enjoyment of the other party hereunder. + + 10. SPECIAL RIGHT OF TERMINATION. Either party shall have the right to terminate this Agreement, subject to the following terms and conditions: + + (a) Either party ("the Terminating Party") may terminate this Agreement upon prior written notice to the other party (the "Defaulting Party") upon the occurrence of any of the following conditions: + + (i) In the event that such party materially breaches this Agreement or materially defaults in the performance of any obligation hereunder and fails to cure said breach within 30 days of written notice to the Defaulting Party by the Terminating Party; + + (ii) Immediately in the event that the Defaulting Party (including, for SRP, the Driver) commits any crime involving moral turpitude or otherwise commits any act or is involved in any situation bringing itself, the Terminating Party or the products of the Terminating Party into public hatred or contempt, or engages in conduct that shocks or insults the community or brings the Terminating Party, or its products into public disrespect, scandal or ridicule; or + + (iii) In the event the LMSC series at NMS is canceled. + + (b) In the event Logan's terminates this Agreement pursuant to this Article 10, Logan's shall be entitled to a pro rata refund of amounts prepaid for the current calendar year, with no further obligations under this Agreement. + + 11. FORCE MAJEURE. Neither party hereto will be considered in default of this Agreement or be liable for damages therefor, for any failure of performance hereunder occasioned by an Act of God, force of nature, physical casualty, accident, war or warlike activity, insurrection or civil disorder or other cause beyond its reasonable control, provided the party so affected gives prompt notice to the other. + + 12. RELEASE. Except as may be otherwise provided in this Agreement, including amounts due SRP from Logan's under Article 6 of this Agreement, neither SRP nor its employees or agents shall make any claims against Logan's with respect to any remuneration in the nature of salary or otherwise for any cost, damage, loss or expense incurred for any reason, including, but not limited to, damage, injury or death which may be suffered by SRP or its employees or agents, third parties, or any property of SRP or property of its agents or employees, or property of any third parties. SRP shall obtain from the Driver and from each of its employees who is a member of the Team a release in favor of Logan's from all liability with respect to any of the above. + + 5 + +6 + + 13. INSURANCE. SRP shall provide at its expense, and maintain throughout the term of this Agreement, comprehensive general liability insurance in the amount of Five Million Dollars and No/100's ($5,000,000.00) per occurrence with respect to any liability relating to the activities of SRP in the performance of this Agreement SRP shall supply Logan's with a copy of the Certificate of Insurance naming Logan's as an additional insured. Such policies shall provide for at least fifteen (15) days' written notice to Logan's of the cancellation or substantial modification thereof. Such insurance will be supplemental coverage in excess of the Five Million Dollars ($5,000,000.00) + + + + + +primary coverage provided to SRP and Logan's by the comprehensive liability policy of NMS. + + 14. NOTICES. All notices required or permitted hereunder shall be in writing and shall be deemed to be properly given: (a) when personally delivered to the party entitled to receive the notice; (b) upon receipt of facsimile message confirmed by first class mail, postage prepaid; (c) upon receipt of package delivered by overnight courier; or (d) when sent by certified or registered mail, postage prepaid properly addressed. + + 15. WAIVERS. A waiver of any provision of this Agreement shall be enforceable only if the waiver is in writing signed by the party against whom the waiver is sought to be enforced. A failure by a party at any time to exercise any rights hereunder shall not constitute a waiver of such rights at another time. + + 16. NATURE OF RELATIONSHIP. The parties expressly acknowledge and agree that SRP is acting as an independent contractor and not as a employee of, or partner or joint venturer with, Logan's. Each party is responsible for all taxes relating to its operation, including payroll taxes for its employees. + + 17. AMENDMENTS AND ASSIGNMENTS. This Agreement may not be modified or assigned except in writing signed by SRP and Logan's. + + 18. GOVERNING LAW. This Agreement shall be constructed under and governed by the laws of the State of Tennessee. + + 19. SEVERABILITY. In the event that any provision of this Agreement is for any reason found and declared to be invalid, illegal or unenforceable, then such provision shall be deemed amended only to the extent necessary to eliminate such invalidity, illegality or unenforceability. In any such event, the validity of the remaining portions or provisions of this Agreement shall not be affected. + + 20. BENEFITS. This Agreement shall inure to the benefit of and be binding upon the parties and their respective heirs, executors, administrators, successors and permitted assigns. + + 21. CAPTIONS. Sections, titles or captions contained in this Agreement are inserted as a matter of convenience and for reference and in no way define, limit, + + 6 + +7 + +extend or describe the scope of this Agreement or the intent of any provision thereof. + + 22. COUNTERPARTS. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, but all of which taken together shall constitute but one in the same instrument. + + 23. ENTIRE AGREEMENT. This Agreement contains the entire understanding between the parties with respect to the subject matter hereof and supersedes all prior written or oral agreements between them with respect to the subject to the subject matter hereof. + + IN WITNESS WHEREOF, the parties have executed this Agreement. + + Logan's Roadhouse, Inc. + + By: /s/ Edwin W. Moats, Jr. ------------------------------- + + Name: Edwin W. Moats, Jr. ------------------------------- + + Title: President and CEO ------------------------------- + + Southern Racing Promotions, Inc. + + By: /s/ Gary T. Baker ------------------------------- + + Name: Gary T. Baker ------------------------------- + + Title: President ------------------------------- + + 7 \ No newline at end of file diff --git a/full_contract_txt/LOOKSMARTLTD_07_20_2012-EX-99.(D)(I)-SPONSORSHIP AGREEMENT.txt b/full_contract_txt/LOOKSMARTLTD_07_20_2012-EX-99.(D)(I)-SPONSORSHIP AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..f848eded69de177f8b47522261aba6f9d0e7bbe3 --- /dev/null +++ b/full_contract_txt/LOOKSMARTLTD_07_20_2012-EX-99.(D)(I)-SPONSORSHIP AGREEMENT.txt @@ -0,0 +1,79 @@ +SPONSORSHIP AGREEMENT THIS SPONSORSHIP AGREEMENT ("Agreement") is entered into and effective as of the date first written above ("Effective Date") by and among PEEK Investments LLC, a Delaware limited liability company ("Purchaser"), and each other party hereto identified on the signature page(s) hereto (each, a "Sponsor"). Each term used and not otherwise defined herein shall have the meaning assigned to such term in the Offer. RECITALS WHEREAS, Purchaser is tentatively exploring, among other potential alternatives, a possible third-party tender offer to purchase all outstanding shares of common stock, $0.001 par value per share ("Shares"), of a Delaware corporation (the "Company") upon the terms and subject to the conditions set forth in the Offer to Purchase, related Letter of Transmittal, and other tender offer material provided by or on behalf of Purchaser to the Sponsors (which, collectively, as amended or supplemented, constitute the "Offer"); WHEREAS, as requested by Purchaser for purposes of the Offer, each Sponsor has provided to Purchaser, and Purchaser has accepted from such Sponsor, a commitment letter providing for a possible equity investment in Purchaser by such Sponsor (each, an "Equity Commitment Letter" and, with respect to any Sponsor(s), the Equity Commitment Letter(s) of such Sponsor(s)), which evidences the commitment of and by such Sponsor to contribute capital to Purchaser in amounts and proportions and upon the terms and subject to the conditions and otherwise as contemplated by such Equity Commitment Letter (each, a "Commitment" and, with respect to any Sponsor(s), the Commitment of such Sponsor (s)); WHEREAS, such capital contributions, if any, would be used to purchase Shares in the Offer and fund the payment or reimbursement of fees, expenses, and costs related to the Offer (collectively, "Transaction Costs"); and WHEREAS, each party hereto desires to establish certain terms and conditions related to the Offer and relationship among the Sponsors, the related equity financing commitments, and the Offer; NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, each party hereto ("Party"), intending to be legally bound, hereby agrees as follows: AGREEMENT 1. Pre-Acceptance Period. If and to the extent any such decision would or could (or would or could be reasonably foreseeable to) adversely affect any Sponsor in any manner, each decision to be made by or on behalf of Purchaser with respect to the Offer (or any similar transaction), any agreements related thereto ("Related Agreements"), or any transaction contemplated by the Offer or any Related Agreement ("Contemplated Transactions" and, together with the Offer and Related Agreements, "Offer Matters"), or any Offer Matter or combination of Offer Matters, in any case, on and from the Effective Date and until the Acceptance Time ("Pre-Acceptance Period") shall require the unanimous consent of the Sponsors, including, without limitation, any (a) announcement of intention, commencement, amendment, supplement, termination, extension, modification, or waiver of or related to the Offer or any term or condition thereof, including, without limitation, with respect to any commencement date, initial offering period, offer price, type or form of consideration to be offered or paid, timing or other term of acceptance for payment or payment of any subject security, withdrawal right, expiration date, subsequent offering period, or top-up option, (b) waiver of any condition to or of the Offer or determination as to whether or not any such condition has been, is, or will be satisfied, (c) filing, dissemination, or disclosure requirement or offering document or tender offer material, including, without limitation, with respect to any filing or exhibit, schedule, attachment, amendment, or supplement thereto, (d) agreement, instrument, document, or matter related to any borrowing, incurrence of indebtedness, or equity, debt, or other financing, (e) litigation or other legal proceeding, including, without limitation, with respect to any stockholder list or security holder listing or poison pill, rights plan, or similar right, or derivative or other litigation or legal proceeding related to the Company's capitalization, (f) designation, nomination, appointment, or election of any person as a member of the board of directors of the Company, or (g) agreement, arrangement, or understanding with the Company or any manager, director, officer, employee, stockholder, partner, affiliate, associate, or related party of the Company. + +Tender Offer Statement on Schedule TO - July 16, 2012 Exhibit (d)(i) Sponsorship Agreement - July 16, 2012 + + + + + + + + + + 2. Equity Commitments. Each Sponsor represents and warrants to each other Party that such Sponsor is bound by and has complied with, and agrees that such Sponsor shall continue to be bound by and comply with, the Equity Commitment Letter and that each other Sponsor (other than any Defaulting Sponsor) shall be entitled to enforce, or direct the enforcement of, such Equity Commitment Letter in accordance with this Agreement if and only if the Sponsors (other than any Defaulting Sponsor) have determined by unanimous written consent that the conditions of the Offer have been satisfied or to waive all such conditions remaining unsatisfied. No Party shall attempt to enforce any Equity Commitment Letter until the conditions set forth in this Section have been satisfied. Purchaser shall have no right to enforce any Equity Commitment Letter unless and until directed to do so by the unanimous written consent of the Sponsors (other than any Defaulting Sponsor). 3. Defaulting and Participating Sponsors. Each Sponsor that has complied with the Equity Commitment Letter and this Agreement ("Participating Sponsor") may terminate the participation in the Offer of any Sponsor that has not satisfied the funding requirements contemplated by the Equity Commitment Letter or otherwise failed to comply with the Equity Commitment Letter and this Agreement ("Defaulting Sponsor"); provided, however, that such termination shall not affect any right of any Participating Sponsor as against such Defaulting Sponsor with respect to such failure to fund or any such other non-compliance. If the Participating Sponsors unanimously consent to proceed (and whether or not any Participating Sponsor elects to seek specific performance as against any Defaulting Sponsor in connection herewith), the amount of the commitment of each Defaulting Sponsor shall be offered, first, to the Participating Sponsors pro rata (based on the commitments of such Participating Sponsors), and, thereafter, as applicable, to one or more other co-investors, unanimously approved by the Participating Sponsors. Notwithstanding anything herein to the contrary, from and after the time any Sponsor becomes a Defaulting Sponsor, the approval or consent of such Defaulting Sponsor shall not be required for any purpose hereunder; provided, however, that each Defaulting Sponsor that ultimately participates in the Offer (as a result of any Participating Sponsor electing to seek specific performance as against such Defaulting Sponsor) shall cease to be a "Defaulting Sponsor" and shall have approval and consent rights hereunder. 4. Transfer Restrictions. During the Pre-Acceptance Period, no Sponsor shall transfer any portion of the Commitment or any interest in Purchaser ("Unit") other than to any investment fund affiliated with such Sponsor; provided, however, that no such transfer shall relieve such Sponsor of any corresponding or other portion of any obligation of such Sponsor under the Equity Commitment Letter or hereunder unless and until such fund: (a) has committed equity or similar available capital in amounts sufficient to satisfy such obligation; (b) executes and delivers to Purchaser an appropriate equity commitment letter, a joinder signature page to this Agreement, and each other document reasonably requested by Purchaser (collectively, the "New Sponsor Documents") and agrees to be bound hereby as a "Sponsor" hereunder; (c) certifies to each Party that such fund is capable of performing the obligations of such fund under each such New Sponsor Document; and (d) is approved by each non- transferring Participating Sponsor, which approval may not be unreasonably withheld, conditioned, or delayed. 5. Interim Period and Continuing Sponsors. Each Party shall use commercially reasonable efforts to negotiate and enter into at or prior to the Acceptance Time: (a) an amended and restated limited liability company agreement of Purchaser ("Purchaser LLC Agreement"); and (b) one or more definitive agreements with the Participating Sponsors (collectively, "Security Holder Agreements") providing for the unanimous consent of the Continuing Sponsors with respect to all decisions to be made by or on behalf of Purchaser with respect to any Offer Matter or the Company or any security issued or to be issued by the Company during the period on and from the Acceptance Date and until the time there ceases to be at least two Continuing Sponsors ("Interim Period"), including without limitation, any matter described in or contemplated by Section 1 hereof. For purposes hereof, "Continuing Sponsor" shall mean and refer to each Participating Sponsor that becomes a member of Purchaser and a party to the Purchaser LLC Agreement and Security Holder Agreements (collectively, the "Management-Ownership Agreements"), in each case, as long as such Sponsor continues to be a member of Purchaser and comply with the Management-Ownership Agreements. 6. Voting Agreements. Purchaser shall (and each Sponsor shall cause each Unit owned by such Sponsor, if any, to be voted to cause Purchaser to) authorize, issue, sell, or exchange, as applicable, Units to Participating Sponsors pro rata (based on the Commitments of Participating Sponsors) and otherwise in accordance with the Equity Commitment Letters and this Agreement; provided, however, that each Unit of any class or series shall be issued at the same price(s) and in the same proportion(s) as all other Units of such class or series. + + + +Tender Offer Statement on Schedule TO - July 16, 2012 Exhibit (d)(i) Sponsorship Agreement - July 16, 2012 + + + + + + + + + + 7. Distribution, Redemption, and Other Transfer Rights. Notwithstanding anything herein or in any Management-Ownership Agreement to the contrary, each Continuing Sponsor may, at any time or from time to time in such Sponsor's sole discretion, cause Purchaser to distribute or otherwise transfer to such Sponsor all (but not less than all) of the amount of the Shares, if any, then owned by Purchaser equal to such Sponsor's pro rata share thereof (based on the Units then owned by all Sponsors) in redemption of or otherwise in exchange and as consideration for the Units then owned by such Sponsor. 8. Termination Fee. An amount equal to any termination or similar fee received by Purchaser, including, without limitation, any such fee paid by the Company or any affiliate, associate, or related party of the Company pursuant to a merger agreement or otherwise, or portion thereof remaining after making or confirming adequate provisions for the payment or reimbursement of Transaction Costs, shall be promptly distributed or otherwise paid to the Sponsors (other than any Defaulting Sponsor) or their designees, in any case, pro rata (based on the Commitments or Units of such Sponsors, as applicable). 9. Expenses. To the extent Purchaser has available funds, Purchaser shall promptly pay or reimburse, as applicable, all Transaction Costs incurred by or on behalf of Purchaser or the Sponsors in connection with the Offer as follows: (a) first, all such Transaction Costs reasonably incurred by or on behalf of Purchaser, including, without limitation, in connection with the formation or organization of Purchaser; and (b) second, all such Transaction Costs reasonably incurred by or on behalf of the Sponsors in connection with the Offer, which shall be paid or reimbursed pro rata (based on the Commitments or Units of such Sponsors, as applicable). Except as otherwise expressly provided hereby and to the extent Purchaser does not have available funds, each Sponsor shall be responsible for any and all fees, expenses, and other costs incurred by or on behalf of such Sponsor. 10. Disclosures; Legal Compliance. Each Party hereby represents and warrants to, and agrees with, each other Party that: (a) in connection with the Offer and this Agreement, such Party has not made, and shall not make, any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading; (b) all information provided by or on behalf of such Party to any other Party for inclusion or incorporation by reference in any Schedule TO or other filing with the Commission or any other tender offer material ("Provided Information") was, when provided, true, accurate, correct, and complete in all material respects; provided further, that such Sponsor shall cause such Provided Information and such filing and material, as applicable, to be amended and supplemented, in each case, as required by law and otherwise promptly and as necessary and appropriate to make the Provided Information and such filing and material, as applicable, true, accurate, correct, and complete in all material respects; (c) such Party shall not (and shall cause each related party of such Party not to) take any action or omit to take any action that would violate, or cause Purchaser to be deemed in violation of, any securities or other law applicable to the Offer, including, without limitation, (i) the U.S. Securities Exchange Act of 1934, as amended ("Exchange Act"), or Rule 14e-5 thereunder or (ii) with respect to tendering any security of the Company in the Offer or paying any consideration to, or entering into any contract, agreement, or arrangement with, any party in connection with or related to the Offer in violation of Rule 14d-10 under the Exchange Act; and (d) such Party shall use commercially reasonable efforts to cooperate with each other Party to establish protocols to ensure compliance with this Section. 11. Termination. This Agreement shall automatically terminate at and as of (the first to occur of): (a) 12:00 midnight, New York City time, on the 30th day after the Effective Date (if Purchaser has not commenced the Offer, with the unanimous consent of the Sponsors, by then); (b) the expiration of the Offer (if the Offer is not consummated pursuant to the terms of the Offer), subject to any extension or subsequent offering period; and (c) the expiration of the Interim Period (if the Offer is consummated pursuant to the terms of the Offer), in any case, unless sooner terminated by unanimous written consent of the Participating Sponsors; provided, however, that any liability for failure to comply with this Agreement shall survive any such termination. Notwithstanding the foregoing, each Section hereof (other than Sections 1 through 6 (inclusive) hereof) shall survive indefinitely following the termination of this Agreement. 12. Amendment. This Agreement may be amended or modified, and the provisions hereof may be waived, only by an agreement in writing signed by each of the Sponsors. + + + +Tender Offer Statement on Schedule TO - July 16, 2012 Exhibit (d)(i) Sponsorship Agreement - July 16, 2012 + + + + + + + + + + 13. Severability. In the event that any provision hereof would, under applicable law, be invalid or unenforceable in any respect, such provision shall be construed by modifying or limiting it so as to be valid and enforceable to the maximum extent compatible with applicable law. The provisions hereof are severable, and any provision hereof being held invalid or unenforceable shall not invalidate, render unenforceable or otherwise affect any other provision hereof. 14. Remedies. Except as otherwise provided herein, this Agreement shall be enforceable by all available remedies at law or in equity (including, without limitation, specific performance). Each Participating Sponsor shall be entitled, in their discretion, to either (a) specific performance of this Agreement and the Equity Commitment Letters, together with any costs of enforcement incurred by such Participating Sponsor in seeking to enforce such remedy against any Defaulting Sponsor or (b) payment by the Defaulting Sponsor in an amount equal to the out-of-pocket damages incurred by such Participating Sponsor. If any Participating Sponsor elects to enforce the remedy described in the preceding sentence against any Defaulting Sponsor, such Participating Sponsor shall do so against all Defaulting Sponsors. No party shall be entitled to recover lost profits or benefit of the bargain damages. If more than one Defaulting Sponsor is responsible for any damages, each such Defaulting Sponsor's liability for such damages shall be determined pro rata (based on the Commitments of such Defaulting Sponsors). 15. Indemnification. To the fullest extent permitted by law, each Sponsor shall indemnify, defend and hold harmless each other Sponsor and any of its affiliates or any direct or indirect partner, member, shareholder, employee, director, officer or agent of such Sponsor or any of its affiliates from and against any and all losses, liabilities, damages, claims, judgments, awards, settlements, demands, offsets, and expenses (including interest, penalties, court costs, arbitration costs and fees, witness fees and reasonable fees and expenses of outside attorneys, investigators, expert witnesses, accountants and other professionals) arising out of or relating to any material breach or inaccuracy of the representations, warranties or covenants of such Sponsor contained herein. 16. No Recourse. Notwithstanding anything that may be expressed or implied in this Agreement or any document or instrument delivered in connection herewith, and notwithstanding the fact that certain of the Sponsors may be partnerships or limited liability companies, by acceptance of the benefits of this Agreement, Purchaser and each Sponsor acknowledges and agrees that no Person other than each Party has any obligation hereunder and no Party has any right of recovery under this Agreement or in any document or instrument delivered in connection herewith, or for any claim based on, in respect of, or by reason of, such obligations or their creation, against, and no personal liability shall attach to, the former, current and future equity holders, controlling persons, directors, officers, employees, agents, affiliates, members, managers, general or limited partners or assignees of the Sponsors or any former, current or future stockholder, controlling person, director, officer, employee, general or limited partner, member, manager, affiliate, agent or assignee of any of the foregoing (collectively, "Non-Recourse Parties"), through Purchaser or otherwise, whether by or through attempted piercing of the corporate veil, by or through a claim by or on behalf of Purchaser against any Non- Recourse Party, by the enforcement of any assessment or by any legal or equitable proceeding, by virtue of any statute, regulation or applicable law, or otherwise. Nothing set forth in this Agreement shall confer or give or shall be construed to confer or give to any party other than the Parties any rights or remedies against any Person other than as expressly set forth herein. 17. Governing Law; Consent to Jurisdiction. This Agreement shall be governed by and construed in accordance with, the laws of the State of New York applicable to contracts executed in and to be performed in that State. All actions arising out of or relating to this Agreement shall be heard and determined exclusively in any New York state or federal court sitting in the Borough of Manhattan of The City of New York. The parties hereto hereby (a) submit to the exclusive jurisdiction of any state or federal court sitting in the Borough of Manhattan of The City of New York for the purpose of any action arising out of or relating to this Agreement brought by any party hereto, and (b) irrevocably waive, and agree not to assert by way of motion, defense, or otherwise, in any such action, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the action is brought in an inconvenient forum, that the venue of the action is improper, or that this Agreement or the transactions contemplated hereby may not be enforced in or by any of the above-named courts. + + + +Tender Offer Statement on Schedule TO - July 16, 2012 Exhibit (d)(i) Sponsorship Agreement - July 16, 2012 + + + + + + + + + + 18. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY. 19. Exercise of Rights and Remedies. No delay of or omission in the exercise of any right, power or remedy accruing to any party as a result of any breach or default by any other party under this Agreement shall impair any such right, power or remedy, nor shall it be construed as a waiver of or acquiescence in any such breach or default, or of any similar breach or default occurring later, nor shall any such delay, omission or waiver of any single breach or default be deemed a waiver of any other breach or default occurring before or after such waiver. 20. Other Agreements. This Agreement, together with the agreements referenced herein, constitutes the entire agreement, and supersedes all prior agreements, understandings, negotiations and statements, both written and oral, among the parties or any of their affiliates with respect to the subject matter contained herein except for such other agreements as are referenced herein which shall continue in full force and effect in accordance with their terms. 21. Cooperation. Each Party shall use commercially reasonable efforts to: (a) amend, supplement, or modify each Management-Ownership Agreement, as necessary or appropriate, to be consistent with, and provide for each transaction and other matter contemplated by, this Agreement; and (b) cooperate with each other Party, including, without limitation, as reasonably requested by any Party to jointly and mutually determine how best to structure and facilitate the Offer Matters and each agreement and transaction contemplated hereby and maximize value for all concerned Parties, taking into account speed, timing, deal certainty, administrative convenience, and applicable tax, legal, and business considerations and all other relevant issues. 22. Assignment. This Agreement may not be assigned by any party or by operation of law or otherwise without the prior written consent of each of the other parties. Any attempted assignment in violation of this Section shall be null and void. 23. No Representations or Duties. Each Sponsor specifically understands and agrees that no other Sponsor has made or will make any representation or warranty with respect to the terms, value or any other aspect of the transactions contemplated hereby, and explicitly disclaims any warranty, express or implied, with respect to such matters. In addition, each Sponsor specifically acknowledges, represents and warrants that it is not relying on any other Sponsor (a) for its due diligence concerning, or evaluation of, the Company or its assets or businesses, (b) for its decision with respect to making any investment contemplated hereby or (c) with respect to tax and other economic considerations involved in such investment. In making any determination contemplated by this Agreement, each Sponsor may make such determination in its sole and absolute discretion, taking into account only such Sponsor's own views, self-interest, objectives and concerns. No Sponsor shall have any fiduciary or other duty to any other Sponsor or to Purchaser except as expressly set forth in this Agreement. 24. Counterparts. This Agreement may be executed in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement. Remainder of Page Intentionally Left Blank. Signature Page(s) to Follow. + + + +Tender Offer Statement on Schedule TO - July 16, 2012 Exhibit (d)(i) Sponsorship Agreement - July 16, 2012 + + + + + + + + + + + + Remainder of Page Intentionally Left Blank. + + + +Tender Offer Statement on Schedule TO - July 16, 2012 Exhibit (d)(i) Sponsorship Agreement - July 16, 2012 + +IN WITNESS WHEREOF, this Agreement is executed and effective as of the Effective Date. PURCHASER: PEEK Investments LLC Date: July 16, 2012 By: /s/ Michael Onghai Name: Michael Onghai Title: President SPONSOR(S): Platinum Partners Value Arbitrage Fund L.P. By: Platinum Management (NY) LLC Its: Sole General Partner Date: July 16, 2012 By: /s/ Mark Nordlicht Name: Mark Nordlicht Title: Chief Investment Officer Snowy August Fund I LP Date: July 16, 2012 By: /s/ Michael Onghai Name: Michael Onghai Title: President + +Signature Page \ No newline at end of file diff --git a/full_contract_txt/LOYALTYPOINTINC_11_16_2004-EX-10.2-RESELLER AGREEMENT.txt b/full_contract_txt/LOYALTYPOINTINC_11_16_2004-EX-10.2-RESELLER AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..8e007b86db32ad554b492931f64a8bcee566a709 --- /dev/null +++ b/full_contract_txt/LOYALTYPOINTINC_11_16_2004-EX-10.2-RESELLER AGREEMENT.txt @@ -0,0 +1,809 @@ +EXHIBIT 10.2 + +[LOGO AMERICAN EXPRESS] INCENTIVE SERVICES + +-------------------------------------------------------------------------------- RESELLER INFORMATION + +Company Name: Schoolpop, Inc. Address:3885 Crestwood Parkway, Suite 550 + +City: Duluth State: GA Zip: 30096 Contact Name: Paul Robinson Phone: 770-638-5101 Fax: 770-638-5101 TAX ID #: E mail Add: probinson@Schoolpop.com + +AMERICAN EXPRESS INCENTIVE SERVICES STORED VALUE PRODUCTS RESELLER AGREEMENT + +This Distribution Agreement (the "Agreement") is entered into by and between American Express Incentive Services, L.L.C., a Missouri limited liability company ("AEIS"), and its Reseller, Schoolpop, Inc., a Delaware corporation ("Schoolpop"). This Agreement is effective as of August 1, 2004, (the "Effective Date") and shall terminate on July 31, 2009, (the "Termination Date") unless earlier terminated or extended as provided for herein. + +The following points outline this agreement: + +1. PURPOSE + +Under and subject to the terms of this Agreement: + +a. AEIS will provide Schoolpop for resale the following stored value cards: Encompass(R) Select, Persona(R) Select, Fill It Up(R), and Be My Guest(R), and any other stored value products developed by AEIS and mutually agreed upon by both parties, ("Cards"). The Cards shall be sold only to those of Schoolpop's clients and prospective clients (the "Clients"), in the United States who are nonprofit organizations, ("NPO Marketplace"), which are defined as organizations that are (i) a school, (ii) an organization formed as not-for-profit under its charter documents, or (iii) an organization related to (i) or (ii) such as a participating school's Parent Teacher Organization or other similarly related organization. + +b. Period One shall mean the Effective Date through the date that Schoolpop has met all of the Security Requirements as such term is defined herein and has received approval from AEIS to assume all Card inventory, distribution and fulfillment responsibilities as currently managed by AEIS. Period Two shall commence with the end of Period One through the Termination Date. + +2. EXCLUSIVITY + +a. Schoolpop shall have the exclusive right to resell Cards in the NPO Marketplace. Notwithstanding the foregoing, Schoolpop shall fund from AEIS a minimum of $52,000,000 of Cards (the "Guaranteed Minimum") in each Contract Year in order to maintain the exclusive right to sell Cards in the NPO Marketplace. A Contract Year shall be the period of August 1 through July 31 of the succeeding year. In any Contract Year in which Schoolpop fails to fund the Guaranteed Minimum, AEIS shall have the right, in its sole discretion, to (a) terminate the Agreement or (b) revoke the exclusivity. + +b. In consideration of the exclusivity referred to above, Schoolpop shall pay AEIS a marketing rights fee ("Marketing Rights Fee"), of $1,250,000. The Marketing Rights Fee shall be paid in five (5) equal installments of $250,000 on March 15th of each year with the first such payment being due on March 15, 2005 and with the final payment due on March 15, 2009. + +c. Schoolpop shall also pay AEIS a fee of $250,000, (the "Encompass(R) Select Fee") as consideration for the right to sell the Encompass(R) Select Card through December 31, 2004. The Encompass(R) Select Fee shall be payable concurrently with the execution of this Agreement. + +d. Schoolpop understands and agrees that this Agreement does not grant Schoolpop any exclusive right to market the Cards or any other AEIS products and services outside of the NPO Marketplace. AEIS, on its own behalf, reserves the right to market its Cards and other products and services directly as + +1 + +well as through additional firms on terms and conditions that it selects in its sole discretion, provided that no such sales shall take place within the NPO Marketplace. + + + + + +3. INVENTORY AND FORECASTING + +a. Schoolpop shall secure a physical location for maintaining, distributing, and fulfilling Card inventory no later than August 1, 2004 which location shall be subject to such security requirements (the "Security Requirements") as shall be required by AEIS or American Express Travel Related Services, Inc. all as further set forth in the Trust Agreement attached hereto as Exhibit 1. + +b. Schoolpop shall effectively manage its Card inventory and Ordering schedule such that all Cards are resold and distributed to the Client with the following Card expiration lives (the "Card Life") intact: + +i. Persona(R) Select - nine (9) months ii. Encompass(R) Select, Be My Guest(R), Fill It Up(R) - three (3) months The Card life of any Cards other than Cards specifically indicated in b(i). and b(ii) above ("New Cards"), shall be mutually agreed upon in writing. + +c. During Period One, Card expiration shall be determined by the date Schoolpop places an Order (the "Order") and provides full payment and clearance of funding. During Period Two, Card Life shall be determined by the date Schoolpop places an Order. + +d. Should any Card expire or lose Card Life prior to distribution, Schoolpop shall assume all loss associated with the Card funding, if applicable, and shall pay AEIS a $2.00 per Card destruction fee. Schoolpop shall not return such Cards to AEIS, and shall follow the destruction process as detailed in the Trust Agreement. + +e. Card Life shall be unaffected by the termination of this Agreement. + +f. From the Effective Date through September 30, 2004, Schoolpop may order non-standard Encompass(R) Select denominations (other than 25, 50, 75, and 100 Points) up to a maximum of 200 Points. Such non-standard Encompass(R) Select denominations require eight (8) weeks to fulfill and must be ordered in boxes of 100 Cards of like denominations. Schoolpop shall discontinue reselling Encompass(R) Select Cards on December 31, 2004 and shall effectively manage and forecast Encompass(R) Select Card needs to deplete such inventory as of December 31, 2004. In the event that any unsold Encompass(R) Select Cards remain in inventory by Schoolpop on December 31, 2004, Schoolpop shall provide to AEIS, no later than January 5, 2005, the Encompass(R) Select Card numbers, the respective expiration dates and denominations of the Cards. AEIS shall invoice Schoolpop for the applicable Card destruction fees which shall be payable by Schoolpop within thirty days (30) of receipt of invoice. Such Card list shall be submitted on a disk/CD and shall be sent via a form of shipment where signature is required upon delivery. + +g. Effective with Period Two, Schoolpop shall provide to AEIS a twelve (12) month sold Card forecast and Card inventory forecast (hereinafter defined). In addition, Schoolpop shall provide AEIS with a monthly forecast, no later than the third business day of each month, of the number of Cards to be sold to its clients, ("Sold Card Forecast") as well as the number of Cards to be stocked in inventory, ("Card Inventory Forecast"), (collectively referred to as the "Forecasts") for the month, ninety-days out. For example, Schoolpop shall provide AEIS with the Card Inventory Forecast and Sold Card Forecast in August for the month of November. The Forecasts will be relied on, ("Locked") at the time they are reported. + +h. Changes to the Forecasts within the Locked period are expected. However, any changes to Locked Forecasts will not impact any applicable penalties as detailed below in subsections (i) and (j). AEIS will place reliance on the Forecasts provided by Schoolpop to align resources and ensure adequate production, fulfillment and customer service capabilities. Schoolpop shall provide AEIS with any changes to the Locked Forecasts on a monthly basis including any respective changes to either Forecast for the remaining twelve (12) month period. + +i. In any consecutive three (3) month period in which the difference between the Card Inventory Forecast less the actual Card Order volume for that period is a shortage of ten percent or greater (10%+), AEIS reserves the right to assess a penalty, ("Card Inventory Penalty") of sixteen and one-half cents ($0.165) per Card for such difference as detailed in Examples 1 and 2 below. + +--------------------------------------------------------------------------------------------- EXAMPLE 1 --------------- --------------------- ------------------ ------------------ ----------------- FORECAST PERIOD ACTUAL VOLUME FORECASTED VOLUME DIFFERENCE --------------- --------------------- ------------------ ------------------ ----------------- + + + + + + MONTH 1 10/1/04-10/31/04 8,000 10,000 (2,000) 20% --------------- --------------------- ------------------ ------------------ ----------------- MONTH 2 11/1/04-11/30/04 8,500 10,000 (1,500) 15% --------------- --------------------- ------------------ ------------------ ----------------- MONTH 3 12/01/04-12/31/04 8750 10,000 (1,250) 12.5% ------------------------------------------------------- ------------------------------------- PENALTY 4,750 X $0.165 = $783.75 --------------------------------------------------------------------------------------------- + +2 + +--------------------------------------------------------------------------------------------- EXAMPLE 2 --------------- --------------------- ----------------- ------------------- ----------------- MONTH 1 12/1/04-12/31/04 10,500 11,000 (500) 4.5% --------------- --------------------- ----------------- ------------------- ----------------- MONTH 2 1/1/05-1/31/05 10,000 13,000 (3,000) 23% --------------- --------------------- ----------------- ------------------- ----------------- MONTH 3 02/01/05-02/28/05 12,000 12,500 (500) 4% ------------------------------------------------------- ------------------------------------- PENALTY NO PENALTY ------------------------------------------------------- ------------------------------------- + +j. In any given month where the difference between the Sold Card Forecast less the actual Card activation volume, ("Cards in Force") is a shortage of ten percent or greater (10%+), AEIS reserves the right to assess a penalty, the ("Customer Service Penalty") which shall be calculated by converting Cards in Force into call volume minutes as follows: + +i. Cards in Force times the call to card ratio times the average handle time equals the total call volume minutes. AEIS will calculate the respective product's average year-to-date call to Card ratio and the average year-to-date handle time monthly to calculate the call volume minutes. For purposes of example, the year-to-date through August 2004, Encompass(R) Select average call to Card ratio is 2.43 and the average handle time is 4.0 minutes. + +&sbsp; ii. Actual call volume minutes under 90% of the Card Sold Forecast will be charged at 90% of Locked Rolling Forecast at the standard rate of $0.50 per minute. Schoolpop's Customer Service Penalty shall be calculated at the difference between actual call volume minutes and 90% of Card Sold Forecast call volume minutes. + +iii. The Customer Service Penalty shall be calculated based upon the a) call volume minutes plus b) Cards in Force as detailed in the example below: + +-------------- ------------------- ----------------- ----------------- -------------------------------- FORECASTED CARDS CALL TO CARD TOTAL CARDS AVERAGE HANDLING TIME IN FORCE RATIO -------------- ------------------- ----------------- ----------------- -------------------------------- MONTH 1 10,500 2.43 255 4.00 minutes ------------------------------------------------------------------------------------------------------- (10,500 x 2.43 = 255) x 4.00 minutes = 1020 Call Volume Minutes ------------------------------------------------------------------------------------------------------- ACTUAL CARDS IN CALL TO CARD TOTAL CARDS AVERAGE HANDLING TIME FORCE RATIO -------------- ------------------- ----------------- ----------------- -------------------------------- MONTH 1 5,000 2.43 121 4.00 minutes ------------------------------------------------------------------------------------------------------- (5,000 x 2.43 = 121) x 4.00 minutes = 486 Call Volume Minutes ------------------------------------------------------------------------------------------------------- PENALTY: 90% x 1020 = 918, (918-486 = 432) x $.50 = $216 Total Penalty for the Month ------------------------------------------------------------------------------------------------------- + +l. Schoolpop shall pay AEIS all incurred penalties within thirty (30) days of receipt of invoice for such penalties by AEIS. + +m. At any given time during this Agreement, Schoolpop's inactive Card inventory shall be limited to $3,000,000 in Card value as determined by the Point denomination on each Card. This limit &sbsp; shall consist of a maximum Card value of $1,500,000 in Encompass(R) Select Cards and $1,500,000 Card value in any other product (s). Effective January 1, 2005, after which Encompass(R) Select shall no longer be available to Schoolpop, the maximum inactive Card value shall not exceed $3,000,000 in any combination of products at any given time. In the event that Schoolpop exceeds either of these limits, AEIS shall cease fulfilling Orders from Schoolpop until such time that Schoolpop's inventory returns to an acceptable level based on the established maximums. + + + + + +n. Any New Cards shall be excluded from the forecasting and penalty provisions of this Section 3 for the three (3) month period commencing on the date of the first order of such New Cards. + +4. CARD ISSUANCE + +a. Schoolpop agrees that it will review all requests for each Program requested by the Client and will use reasonable and customary business practices to qualify and recommend Clients proposed for a Program. Schoolpop shall take commercially reasonable efforts to ensure all information requested for a Client is true, accurate and correct. + +b. AEIS may, from time to time, provide Schoolpop with commercially reasonable qualification standards for Clients. Schoolpop shall not knowingly submit an Order to AEIS on behalf of any Client that does not meet any such standards. Schoolpop agrees that it will sell Cards only to Clients and only for use in connection with a bona fide fund raising program. Schoolpop will not knowingly sell Cards to any Client who does not meet any AEIS qualification standard(s) or to any + +3 + +Client or potential Client that Schoolpop has reason to believe would be unsatisfactory to AEIS. + +c. AEIS reserves the right at any time, with or without cause, with reasonable written notice to Schoolpop, to cancel or decline any Client's participation in the Program. + +d. AEIS may, at its sole discretion, decline to provide Cards to Clients. + +e. Cards are intended for use in the United States and must be designated for receipt of shipment within the United States. + +f. AEIS' designated vendor will be responsible for shipping Cards in accordance with Schoolpop's instructions. + +g. AEIS's designated vendor will ship the Cards as follows: + +i. During Period One, AEIS' designated vendor will use reasonable commercial efforts to ship the Cards as detailed below, following receipt and clearance by AEIS of Card Funding. + +ii. During Period Two, AEIS' designated vendor will use reasonable commercial efforts to ship the Cards as detailed below, following receipt of Card Order placed by Schoolpop. + +The initial Order of (a) standard non-branded Cards within 5 business days after set-up; subsequent Orders, (b) of less than 5,000 Cards per day within three (3) to five (5) business days of receipt of Order; (c) forecasted Orders of 5,000 or more Cards per day within eight (8) to thirteen (13) business days of receipt of Order; and (d) non-forecasted Orders of 5,000 or more Cards per day within twenty (20) to thirty (30) business days of receipt of Order. All shipment timelines are subject to change without notice due to seasonal or unforecasted production volume and AEIS shall work with its Card production vendor and use reasonable commercial efforts to secure the most favorable shipment date commitment and shall notify Schoolpop accordingly. + +h. One point is worth one (1) U.S. Dollar ($1.00 USD) ("Point"). + +i. AEIS shall ship Cards in bulk shipment via its designated vendor to Schoolpop, F.O.B. Atlanta, Georgia. Schoolpop shall distribute to each Cardholder the Cardholder agreement as provided with each Card and which includes instructions on "How to Use the Card". Should Schoolpop or its Client distribute Cards without such Cardholder agreement, Schoolpop shall indemnify and hold harmless AEIS, its parents, subsidiaries and their respective affiliates, officers, directors, employees and agents, against any and all Loss, hereinafter defined, that AEIS may incur or be subjected to as a result of such action, including, without limitation, any claims brought by any entity including but not limited to governmental entities and Cardholders. + +j. Purchases made with a Card having insufficient Points will be deemed a deniable transaction. The correct way to handle the purchase is described in the Cardholder agreement. If there is a purchase made on a Card where there are insufficient Points on the Card, the negative amount will be the responsibility of the person whose signature appears on the Card, as described in the Cardholder agreement. + + + + + +k. CARDS LOST OR STOLEN IN TRANSIT IN THE INITIAL SHIPMENT FROM AEIS WILL BE THE RESPONSIBILITY OF AEIS. The full risk of loss for ordered Cards shall pass to Schoolpop immediately upon their delivery to Schoolpop by AEIS and AEIS shall not reimburse Schoolpop or Client for any delivered Card that is lost, stolen, misappropriated, or that otherwise disappears or is fraudulently or inappropriately used (together referred to as "Loss"). Schoolpop shall remain solely liable for any Loss caused by the negligence or willful misconduct of its employees, agents or representatives after the shipment has been received by Schoolpop. AEIS will not reimburse Schoolpop or its Client or be responsible for any Loss in connection with or after delivery of Cards to Schoolpop, its Clients or the Cardholder whether they are shipped to Schoolpop, its Client, or to either of their pre-designated delivery agents. Only Cardholders are eligible to receive replacements from AEIS and replacements are given only in accordance with the agreement between the Cardholder and AEIS. Cards are usually shipped in packaging with AEIS' designated vendor as the return address. Notwithstanding the foregoing, AEIS shall bear no risk of Loss and of non-receipt of Cards by the intended Cardholder in the event that AEIS is instructed to use another address as the return address, the address provided to AEIS for Schoolpop or the Client was incorrect, the request for the Card was unauthorized, and/or any information received by AEIS with regard to the processing of the Order was fraudulent or incorrect. + +l. All agreements entered into between Schoolpop and its Clients, shall contain a provision substantially similar to the preceding Section 3 (k). + +4 + +m. During the term hereof, Schoolpop shall maintain at all times the following information with respect to Card resale and distribution to Client: + +i. For each box of Cards, or partial thereof, sent from AEIS's designated vendor to Schoolpop, the UPS(TM) Tracking number appearing on the shipping label of the box and the respective Card numbers for the Cards contained in the box (AEIS's shipping vendor shall include a list of Card numbers within each box.), and + +ii. The Client name and delivery date of each box of Cards or partial thereof, sent from Schoolpop via their designated shipping vendor, to the Client, including proof of signature and tracking number for the box, specific to Schoolpop's shipping vendor. + +n. Schoolpop shall comply with all applicable Federal, State and local laws concerning the use of Cards, including anti-money laundering and anti-terrorism laws, and currency control regulations. Schoolpop warrants it shall take measures to track information about its Clients which shall meet compliance requirements related to the above stated laws, track all Card shipment(s) to each such Client, and maintain appropriate records for its Clients for a period of seven (7) years after termination of the Agreement and to provide such records and other information to AEIS upon reasonable request and subject to applicable law. Schoolpop shall further inform in writing all of its Clients of their requirement to comply with all applicable laws concerning the use of Cards, including those laws stated in the previous sentence. School shall inform its Clients of the requirement to maintain records with respect to the Cards and Cardholders, and to verify the identity of Cardholders as required by law, to maintain records of the information used to verify each Cardholder's identity, to retain such records for at least seven (7) years following the date of distribution, including &sbsp; name, home address, Card number, and other identifying information, and the name, title and phone number of the individual responsible for maintaining such records, and to provide such records and other information to AEIS upon reasonable request and subject to applicable law. Schoolpop and Schoolpop's Clients shall establish and maintain an anti-money laundering program with an assigned compliance officer and compliance program. Details of such shall be provided to AEIS upon request. Schoolpop and Schoolpop's Clients shall not accept cash, coin or currency in exchange for Cards. Schoolpop shall indemnify and hold harmless AEIS its parents, subsidiaries and their respective affiliates, officers, directors, employees and agents, against any and all Loss that AEIS may incur or be subjected to as a result of or arising out of Schoolpop's failure to comply with such laws and regulations, including, without limitation, any Loss resulting from any claims brought by any entity including but not limited to governmental entities, unless due to the acts or omissions of AEIS. AEIS reserves the right, at its sole discretion, to monitor and enforce Schoolpop's compliance with all applicable laws and regulations, including but not limited to those contained in this Section 3 (n). Schoolpop shall monitor and use reasonable commercial efforts to enforce its + + + + + +Clients' compliance with all applicable laws and regulations including, but not limited to those contained in this Section 3 (n). All agreements entered into between Schoolpop and its Clients shall contain a provision substantially similar to this Section 3 (n). + +o. Schoolpop agrees that it will indemnify and hold AEIS harmless for any claims or losses resulting from its failure to comply with the requirements of Sections 4 (k), (m-n), unless due to the acts or omissions of AEIS. + +p. AEIS will not hold Schoolpop responsible for or seek to collect from Schoolpop any Loss caused by or resulting from any Cardholder's fraud, misuse, or negative balance transactions involving the Cards except to the extent such Loss was caused by Schoolpop's breach of a representation, warranty, or covenant of this Agreement or if Schoolpop (or Schoolpop's employees, agents or representatives) participated in or had knowledge of any deceptive, fraudulent or other illegal activity. + +q. Schoolpop acknowledges that Points must be used prior to the expiration date of the Cards. No refund will be made with respect to Points remaining on Cards at the time of expiration to Schoolpop, its Clients or the Cardholders, subject to applicable law. Schoolpop further acknowledges the Cardholder Agreement contains such notice to Cardholders. + +5. PAYMENT INSTRUCTIONS + +a. Effective Period One, Schoolpop shall provide full payment of Card funding via wire transfer for Orders placed through the end of Period One. AEIS shall fulfill such Orders upon receipt and clearance of funds. + +b. Effective Period Two, Schoolpop shall provide the full payment of Card funding via ACH Debit at the time Schoolpop requests activation of Cards. AEIS shall activate the Cards by loading the appropriate number of Points onto the Cards as determined by the denomination, and at which time the Cards shall be ready for use by Cardholders within two (2) business days. + +5 + +c. Schoolpop shall pay AEIS $25.00 each time a wire transfer is used for amounts under $5,000. + +d. The Schoolpop account number as detailed on Exhibit 3, attached hereto, must be on each form of payment along with the amount of funding to be applied to each account number. Failure to provide AEIS with this account number and funding detail may result in a delay in Funding. + +e. Schoolpop shall pay AEIS $15.00 for each returned ACH Debit payment. + +f. All instruments bearing funds for Cards should be made payable to American Express Incentive Services, L.L.C. AEIS' required payment method is in U.S. currency. AEIS reserves the right to decline payment made in any other currency. + +g. The following instructions should be used for Electronic Settlements to AEIS: + +American Express Incentive Services c/o Bank of America Dallas, TX Routing/ABA #111000012 Account #375-100-6936 Reference: XXXX (Client Name and Account #) + +All invoices for Schoolpop should be sent to the following address: + +Schoolpop, Inc. Attn: Paul Robinson Address: 3885 Crestwood Parkway, Suite 550 City, State, Zip: Duluth, GA 30096 Phone #: 770-638-5101 Fax #: 770-678-3334 Email address: probinson@Schoolpop.com + +Schoolpop agrees to notify AEIS promptly in the event the address or contact for invoice submission changes. + +6. ORDERING INSTRUCTIONS + +a. Effective Period One, Schoolpop's designated contact shall place Orders by submitting data in an electronic document via email to AEIS. + +b. Schoolpop will be assigned a user name and password that will be used for identification when placing Orders using easyorder(TM). Schoolpop authorizes AEIS to accept and process Orders from anyone using Schoolpop's password. AEIS will have + + + + + +no obligation or responsibility for verifying the identity of anyone using Schoolpop's password. Schoolpop shall have the responsibility of safeguarding Schoolpop's password and should not reveal its password to anyone. AEIS will not ask Schoolpop in an unsolicited telephone call or email for its password. In addition, Schoolpop should take precautions when using a computer that is not its own or in a public setting. If Schoolpop suspects that someone else may have had access to its password, Schoolpop shall notify AEIS immediately. + +c. Effective with Period Two, the following ordering terms and conditions apply: + +i. Schoolpop shall order Cards in increments of 100 per box and shall not place Orders for any partial box (es) of 100, nor request any partial activation of any box (es). + +ii. Cards within each box shall be of the same product and Point value. AEIS shall not mix products and/or Point values within any single box. + +iii. Upon receipt of Cards, Schoolpop shall confirm receipt of such Cards as detailed in the Trust Agreement. + +iv. AEIS shall use commercially reasonable efforts to activate each full box of Cards within two (2) &sbsp; business days upon receipt of the UPS(TM) Tracking number (used by AEIS's designated shipping vendor) for the box of Cards from Schoolpop along with the receipt and clearance of Card funding for the box of Cards. + +v. Once activated, all Cards become the property of Schoolpop, excluding all Marks as detailed in Section 8, and further defined within the Trust Agreement. + +vi. Activation terms for New Cards shall follow the process established for existing Cards. + +6 + +7. PROGRAM COMMUNICATIONS + +a. All rights to the name, logo, service marks and/or trademarks (the "Marks"), trade names, tag lines, or any other proprietary designation ("Proprietary Designation") of AEIS remains the sole property of AEIS. Certain use of the Marks and Proprietary Designation of American Express Travel Related Services Company and Maritz Inc. has been granted to AEIS under license agreements. It is understood that the Marks may be necessary to enhance the impact and clarity of Program communications. All use of Marks and Proprietary Designations of AEIS, American Express and Maritz Inc. requires prior written approval from AEIS and use of the Marks shall follow and be subject to requirements issued by AEIS and attached hereto as Exhibit 4 and 4.A and 4.B, including any such Marks used by Schoolpop's Clients. + +b. Camera-ready artwork is available from AEIS for inclusion of the AEIS logo or to display a picture of a Card in Program communications. Requests for camera-ready artwork should be directed to the address below. + +c. Schoolpop shall inform AEIS in writing, and obtain prior written consent (which consent shall not be unreasonably withheld), for any and all television, radio, newspaper, magazine, Internet, Intranet, or other advertising, promotional or marketing campaign or strategy using the Marks or when referring directly to American Express Travel Related Services Company, Maritz Inc. or AEIS or any American Express merchant. + +d. Schoolpop is solely responsible for ensuring that any names and/or logos, designs, pictures or other intellectual property, which are provided by Schoolpop to be used in the Program (including collateral material), does not infringe or violate the intellectual property rights of any other party and shall indemnify AEIS from any and all claims made by any third party respecting such infringement. + +e. Schoolpop shall discontinue its use and shall notify its Clients to discontinue use of the Marks, including all American Express merchant marks, and all associated promotions, including but not limited to Client promotions, upon termination of this Agreement. + +f. Schoolpop, at its option, may request that AEIS include in the shipment of Cards, Program specific collateral materials. Program specific collateral materials are subject to review and approval by AEIS and additional charges may apply. + +g. AEIS retains the right to immediately terminate this Agreement should Schoolpop distribute any promotional materials or + + + + + +communications that are not approved by AEIS and/or do not meet AEIS' branding guidelines, including American Express merchant marks. + +h. Schoolpop shall send all materials for review to: + +Branding and Product Communications Specialist American Express Incentive Services, L.L.C. 1309 N. Highway Drive Fenton, MO 63099 Tel: 636-226-2071 Fax: 636-226-2002 AEIS shall review all submissions within seven (7) business days. + +8. JOINT MARKETING AND COMMUNICATIONS + +a. AEIS shall provide standard Card plastic design and standard Card carrier design including pre-printed paper and electronic copy, and standard Card envelope design for all Card packaging (collectively "Card Packaging"). In the event Schoolpop or its Clients request any non-standard Card plastic design or Card Packaging, AEIS and Schoolpop shall mutually agree upon such materials. AEIS shall provide to Schoolpop pricing for non-standard materials + +b. AEIS shall provide standard promotional materials, and communication to provide market exposure for Cards. In the event Schoolpop or its Clients request any non-standard promotional or communication materials, AEIS and Schoolpop shall mutually agree upon such materials. AEIS shall provide to Schoolpop pricing for non-standard materials, which may or may not include Cardholder website customization. + +c. AEIS and Schoolpop shall mutually develop, market, and implement two (2) new Cards for Program use no later than October 1, 2004 as follows: + +i. A category Card, where AEIS shall put forth a commercially reasonable effort to secure contracts with a select group of merchants to participate in the Card program as identified on Exhibit 5, attached hereto, and to make changes to such categories and/or merchants. + +7 + +ii. A grocery Card, where AEIS shall put forth a commercially reasonable effort to secure contracts with a select group of merchants leveraging Schoolpop's existing relationships with grocery store companies, as identified on Exhibit 5.A, attached hereto, and to add other merchants as mutually agreed upon by both parties. + +iii. AEIS shall communicate and maintain participating merchants in the category and grocery Cards through the Card website, an Interactive Voice Response fax-back service listing of current merchants, and through a merchant listing that shall accompany each Card. + +iv. AEIS and Schoolpop mutually agree to pursue additional Card products, as market conditions warrant, for use in the NPO marketplace and shall document such products in a separate Agreement. + +d. The parties agree that the minimum number required for the category Card shall be not less than 70% of the consumer categories contained within Exhibit 5; and the grocery Card not less than 70% national coverage to launch each respectively. The parties shall mutually agree upon any New Card minimum numbers required for each&sbsp;New Card launch. + +9. PROGRAM TERMS + +a. From the Effective Date through September 30, 2004, Schoolpop may order non-standard Encompass(R) Select denominations (other than 25, 50, 75, and 100 Points) up to a maximum of 200 Points. Such non-standard Encompass(R) Select denominations require eight (8) weeks to fulfill and must be ordered in boxes of 100 Cards of like denominations. Schoolpop shall be limited to $26,500,000 in total Encompass(R) Select sales through December 31, 2004. Such limit may be increased in the event Persona Select actual sales exceed its forecasted sales for the period ending December 31, 2004. The limit increase shall be calculated on three-to-one ratio of Encompass Select sales to Persona Select Sales. Schoolpop shall discontinue reselling Encompass(R) Select Cards on December 31, 2004 and shall effectively manage and forecast Encompass(R) Select Card needs to deplete such inventory as of December 31, 2004. In the event that any unsold Encompass Select Cards remain in inventory by Schoolpop on December 31, 2004, Schoolpop shall provide to AEIS, no later than January 5, 2005, the + + + + + +Encompass(R) Select Card numbers, the respective expiration dates and denominations of the Cards. Such Card list shall be provided to AEIS by Schoolpop via disk/CD and sent via a form of shipment where signature is required upon delivery. AEIS shall invoice Schoolpop for applicable destruction fees of $2.00 per Card which shall be payable by Schoolpop within thirty (30) days upon receipt of invoice. + +b. Cards shall not be used to purchase gift certificates and/or gift cards at participating merchants. + +c. Schoolpop acknowledges it will be listed as a current Client of AEIS. Schoolpop agrees to be used as a reference to current and future AEIS Clients with prior approval from Schoolpop. + +d. Schoolpop agrees to an annual review to take place forty-five (45 days) prior to each contract anniversary, on or about June 15th of each contract year. This review will include, but is not limited to, a review of volume performance, economics of the products, and branding. + +e. Schoolpop agrees to product and program training as required by AEIS. + +f. The parties agree to jointly develop a Cardholder appeasement &bbsp; program. Such appeasement program shall require Schoolpop develop a process with its Clients to mutually resolve Cardholder appeasement issues prior to raising them with any third party(ies). + +g. AEIS may from time to time provide Schoolpop with certain reasonable terms and provisions to be included in the agreements to be entered into between Schoolpop and its Clients and Schoolpop agrees that any such terms and provisions shall be included in such agreements. + +10. PROGRAM SERVICING + +a. AEIS will provide: + +i. 24-hour customer service representation, via a 24x7 English speaking toll-free telephone number, for Program Cardholders who have questions concerning a Card. The toll-free numbers as of the drafting of this Agreement are: + +Persona(R) Select 800-259-9526 Encompass(R) Select 888-210-9821 Fill It Up(R) 800-575-7365 Be My Guest(R) 877-243-5082 + +8 + +ii. Cardholders with the ability to obtain point balance information through the following Cardholder Web sites: + +www.personaselect.com Persona(R) Select www.encompass-select.com Encompass(R) Select www.rewardearner.com/fillitup Fill It Up(R) www.rewardearner.com/bmg Be My Guest(R) + +iii. Merchant Management - includes the management of the authorization network, merchant settlement and dispute handling, and + +iv. AEIS will provide reasonable assistance to Schoolpop in managing the Program as needed and requested by Schoolpop. Additional charges may apply. + +v. AEIS and Schoolpop shall mutually agree upon a Client and/or Cardholder appeasement process and the respective financial responsibility. + +b. AEIS reserves the right to change program servicing from time to time. + +11. REPRESENTATIONS AND WARRANTIES + +a. Schoolpop and AEIS each represents and warrants that participation in the Program shall at all times conform to the highest standards of business ethics and practices and at no time will they permit any act to be done by their employees or representatives that will damage the name, reputation or goodwill of the other party or its affiliated companies. + +b. Schoolpop and AEIS each further represents and warrants that its participation in the Program is and will remain during the term of this Agreement in compliance with all laws, rules and regulations applicable to it. + +c. Schoolpop and AEIS each further represents and warrants that they are authorized to enter into this Agreement and that this Agreement does not violate any other agreement to which it is a party. + + + + + +12. CONFIDENTIALITY + +a. The terms, procedures, any applicable criteria for success and results of this Agreement and all information furnished by and between the parties in connection with this Agreement shall be confidential and shall not be disclosed by either party without the express written consent of the other party; provided that Schoolpop shall have the right to disclose such information as may be required to comply with applicable SEC regulations. + +b. Both parties acknowledge that they may have access to or receive confidential information, data, and materials about the other party, their Clients and Cardholders, and their entities, including, without limitation, marketing philosophies and objectives, pricing information, business materials and data, processes, customer lists, product information, financial data, competitive advantages and disadvantages, and other confidential information received ("Confidential Information"), and that disclosure or misuses of such Confidential Information, would be irreparably damaging to the other party. Accordingly, both parties agree to receive and hold in confidence all Confidential Information considered proprietary or confidential by the other party, and &sbsp; agree not to disclose or use such information in any manner except for uses contemplated by this Agreement unless permitted in writing in advance by the other party (except for information disclosed to Cardholders in accordance with the Cardholder Agreement). Both parties also agree to bind their employees, and subcontractors to compliance with this paragraph and to take all other reasonable action to ensure protection of the Confidential Information. + +c. Such Confidential Information is subject to the terms and conditions of this Agreement, if (a) such Confidential Information is either Party's marketing philosophies and objectives, financial and pricing information, Client lists, business processes or competitive advantages and disadvantages; (b) such Confidential Information is disclosed verbally and is verbally identified as proprietary or confidential at the time of disclosure, and there exists a written record that such Confidential Information was disclosed and identified verbally as proprietary or confidential; or (c) such Confidential Information is in written, graphic or electronic form when disclosed and the media that contains such Confidential Information is clearly marked "confidential" or "proprietary", or something substantially similar. Notwithstanding the foregoing, Confidential Information shall not include (d) information that is publicly known, already known by, or in the possession of the non-disclosing party, or (e) is independently developed by the non-disclosing party without use or reference to the other party's Confidential Information, or (f) is rightly + +9 + +obtained by the non-disclosing party from a source other than the disclosing party without such restrictions. + +d. Each party agrees that during the term of this Agreement and thereafter (a) it will use Confidential Information belonging to the other party solely for purposes outlined in this Agreement, (subject to the terms and conditions thereof), (b) it will not disclose Confidential Information belonging to the other Party to any third party other than the receiving Party's employees, affiliates, agents, permitted vendors, subcontractors and/or professional advisors on a need-to-know basis who are advised of the confidential nature of the Confidential Information and under a similar confidentiality agreement, and (c) each Party will treat the Confidential Information of the other Party with the same care that the receiving party normally affords its own proprietary and confidential information. If any such employee, affiliate, agent, subcontractor or professional advisor discloses or uses the Confidential Information in a manner not permitted under this Agreement, the party disclosing the Confidential Information to such employee, affiliate, agent, subcontractor or professional advisor will be liable therefore. If either party is required by law to disclose Confidential Information, it may be disclosed, provided that, unless prohibited, sufficient prior notice is given to the non-disclosing party to afford it an opportunity to take whatever steps it deems necessary to protect the confidential nature of the Confidential Information. In the event a party is required to disclose the other party's Confidential Information in connection with any judicial proceeding or government investigation, a notification of such requirement shall promptly occur allowing a reasonable time for the appropriate party to seek a protective Order from the appropriate court or government agency. Thereafter, Confidential Information may be disclosed to the extent required by law, subject to any applicable protective Order. + +e. Upon request of the other party, each party will promptly + + + + + +return to the other any or all Confidential Information of the other then in its possession or under its control provided, however, that each party may retain one copy of all such Confidential Information solely for its own internal records, such Confidential Information to remain subject to the restrictions on use and disclosure contained in this Agreement + +f. Authorized users, ("Authorized Users") include Schoolpop, its affiliates and its Client's personnel involved in administering the Program and eligible Cardholders of a Schoolpop Program. Schoolpop acknowledges that it will likely receive private information ("PI") from Authorized Users that will be subject to various privacy laws and regulations in the various States in which the Authorized Users and the parties hereto reside. Furthermore, Schoolpop, and/or its Client, will likely be providing such PI to AEIS for identification of such Authorized Users. Schoolpop shall, and shall cause its Client to, (a) comply with all applicable privacy laws and regulations, (b) shall provide to AEIS evidence of such compliance upon request, (c) and shall obtain such permissions, clearances, or other allowances as shall be necessary for AEIS to use such PI as contemplated hereunder. Schoolpop shall, and shall cause its Client to, (d) cooperate with AEIS with respect to complying and avoiding any claims based on PI rights of others including without limitation Schoolpop and/or its Client communicating to AEIS all necessary acts and safeguards required of AEIS in handling PI, (e) providing such notices and information to Authorized Users as required, (f) identifying all PI as PI at the time of its transmission to AEIS, (g) segregating any PI required to be handled differently as necessary to ensure its proper treatment including without limitation not providing PI to AEIS and, if applicable, (h) PI that has been "opted out" of Schoolpop's or its Client's permission for use hereunder. Schoolpop and its Client shall respectively bear the cost of compliance with all privacy laws and regulations. Schoolpop will, at its sole cost and expense, defend, indemnify and hold harmless AEIS and each of its respective officers, directors, employees, agents, contractors, affiliates, service providers and insurers (collectively, "AEIS Indemnified Parties") from and against any and all loss or liability, claims, demands, damages, losses and expenses including, without limitation, reasonable attorneys, accountants and expert witness fees, costs and expenses that the AEIS Indemnified Parties, or any one or more of them, may sustain or incur as a result of a claim of violation of any law or regulation or personal right directed to protecting the PI rights of individuals or the use, misuse, collection, loss of privacy or confidentiality, or other mishandling or improper or illegal act with respect to such PI including without limitation governmental enforcement action as well as civil claims involved with any such Schoolpop Program. Excluded from the obligation to defend and indemnify shall be any claims or damages attributable &bbsp; solely to the negligence or intentional misconduct of any AEIS Indemnified Party, and solely as to that AEIS Indemnified Party to which such negligence or intentional misconduct is attributable. The obligations under this Section 12 shall survive the termination, cancellation, and expiration of this Agreement. + +10 + +13. INSURANCE + +a. Schoolpop shall, during the term of this Agreement, at its own cost and expense, procure with sound and reputable insurers, the following insurance coverage's: (i) Workers' Compensation Insurance in an amount not less than the statutory limits for the state(s), country or province in where the services are to be performed; (ii) Employer's Liability Insurance not less than (a) $100,000 per occurrence, and not less than $100,000 aggregate limit of liability per policy year for disease, including death at any time resulting therefrom, not caused by accident or (b) such amount as required by law, whichever is higher; (iii) Comprehensive General Liability Insurance, including blanket extended coverage against all hazards, including personal injury and death resulting therefrom, for not less than $1,000,000 per occurrence, and not less than $2,000,000 aggregate; (iv) Automobile Liability insurance against liability arising from the maintenance or use of all owned, non-owned and hired automobiles and trucks used to provide services, with (a) a minimum limit of liability for bodily injury of $1,000,000 in the aggregate, and with a minimum limit of liability for property damage of $500,000 per accident, or (b) amount as required by law, whichever is higher; and (v) fidelity or crime policy of not less than $3,000,000 in the aggregate against misappropriation and/or destruction of Cards. + +b. Schoolpop's insurance shall be deemed primary. Schoolpop shall provide AEIS with certificates of insurance evidencing the coverage's required hereunder within fifteen (15) days after + + + + + +execution of this Agreement. Each policy required hereunder shall provide that AEIS shall receive thirty (30) days advance written notice in the event of a cancellation or material change in such policy. Each policy of insurance which Schoolpop is required to possess under this Agreement shall name AEIS, and its Directors, Officers, and Employees, as additional insured in the insurance policy limits herein required. In the event that any service under this Agreement is to be rendered by persons other than Schoolpop's employees, Schoolpop shall furnish AEIS with evidence of insurance for such persons subject to the same terms and conditions as set forth above and applicable to Schoolpop prior to commencement of service by such person(s). + +14. GENERAL TERMS & CONDITIONS + +a. This Agreement along with the Trust Agreement constitute the entire Agreement between the parties hereto and supersedes all prior communications and agreements between the parties with respect to the subject matter hereof. Except for changes in AEIS product rules and other procedural or operational changes in terms initiated by AEIS as described herein, this Agreement may not be modified or otherwise amended except by a further writing executed by both parties hereto, which writing makes specific reference to this Agreement. + +b. No right or interest in this Agreement shall be assigned by Schoolpop without prior written permission of AEIS, which shall not be unreasonably withheld. + +c. This Agreement shall be deemed to have been made and executed in the State of Missouri and any dispute arising thereunder shall be resolved in accordance with the laws of the State of Missouri, without reference to its rules governing conflicts of law. + +d. Either party may terminate this Agreement with written notice to the other party as follows: + +i. Should either party (1) admit in writing its inability to pay its debts generally as they become due; (2) make a general assignment for the benefit of creditors; (3) institute proceedings to be adjudicated a voluntary bankrupt; (4) consent to the filing of a petition or bankruptcy against it; (5) be adjudicated by a court of competent jurisdiction as being bankrupt or insolvent; (6) seek reorganization under any bankruptcy act; (7) consent to the filing of a petition seeking such reorganization; or (8) have a decree entered against it by a court of competent jurisdiction appointing a receiver, liquidator, trustee, or assignee in bankruptcy or in insolvency covering all or substantially all of such party's property or providing for the liquidation of such party's property or business affairs; then, in any such event, the other party, at its option and without prior notice, may terminate this Agreement effective immediately; or + +ii. Upon the occurrence of a breach by the other party, which breach has not been cured within (30) days after the date of written notice to the breaching party by the non-breaching party; or + +iii. For non-payment of any amounts due hereunder. In the event this Agreement is terminated for any reason prior to May 31, 2009, all unpaid Marketing Rights Fees incurred to the termination date, will be fully due and payable by Schoolpop to AEIS. Upon termination, each party will return to the other or destroy, and provide written certification of destruction of, all information furnished by such other party hereunder, prior to termination and follow necessary termination instructions detailed in the Trust Agreement. All Cards ordered by Schoolpop and supplied by AEIS shall be governed by the terms and conditions of this Agreement and the Trust Agreement. + +11 + +e. Notwithstanding anything contained herein to the contrary, the cumulative liability of the parties to one another for any claims, liabilities, losses, damages or expenses, direct or indirect, arising out of or related to this Agreement shall not exceed the lesser of $50,000 or (not including other funding amounts such as the Point value of Cards) or the amount paid by Schoolpop to AEIS for the immediately preceding twelve (12) months provided, however, that in no event shall this limitation of liability apply to any claims, liabilities, losses, damages, or expenses, direct or indirect, arising out of or related to this Agreement brought by the actions of Schoolpop pursuant to paragraphs 4(e), 4(i), 4(k), 4(p), 5(a), 5(b), 6(b), 7(a), 7(d), 14(d.iii), 9(f) and Sections 2, 3 11, 12, and 13, and Exhibit 1 of this Agreement. In no event shall + + + + + +either party be liable to the other, under any theory, for lost profits, exemplary, punitive, special incidental, indirect, or consequential damages. + +f. In the event that either party breaches or violates any covenant or agreement contained in this Agreement, or in the event of any breach or violation (or alleged breach or violation) of any covenants or agreement made by LoyaltyPoint with any Client or other third party, the breaching party shall indemnify and hold harmless the other party, its affiliates, parent company(ies), officers, directors, employees, and agents against and in respect of any and all costs, expenses, deficiencies, litigation, proceedings, taxes, levies, assessments, attorneys' fees, damages or judgments of any kind or nature whatsoever, related to, arising from, or associated with such breach or violation (or alleged breach of violation). The non-breaching party shall give the breaching party prompt notice of the non-breaching party's intention to make a claim for indemnification hereunder. the breaching party shall have the opportunity to defend the underlying claims, suit or proceeding by competent counsel of its own choosing, provided that non-breaching party has approved such counsel, which approval shall not be unreasonably withheld. The non-breaching party shall cooperate in the defense of such claim, suit or proceeding. The obligations under this Section 14 shall survive the termination, cancellation, and expiration of this Agreement. + +g. Any notice required or permitted under this Agreement will be effective if in writing and delivered personally, sent by certified U.S. Mail, return receipt requested, postage prepared, sent by a national overnight delivery service (such as Federal Express), or sent by telefax, in each instance addressed and delivered personally or sent for delivery as provided on the signature page of this Agreement. Any notice shall be deemed given (a) if personally delivered when received by the intended recipient, (b) if sent by telefax, when sent and receipt is confirmed, provided that the recipient is sent another copy by one of the other means of notice specified in this section, or (c) if sent by certified mail or overnight delivery, on the earlier of the date of receipt by the intended recipient or three (3) days after the date on which the notice is sent. + +h. Upon termination of this Agreement, Schoolpop shall have the right to continue to sell any Cards in its possession for a period of three (3) months following the effective date of termination, subject to compliance with the applicable terms and conditions set forth herein, provided however, that termination of the Agreement is not due to a breach of representation or warranty of the Agreement by Schoolpop in which case Schoolpop shall discontinue selling Cards immediately upon termination. + +[Signature Pages Attached] + +12 + +Signed for and on behalf of SCHOOLPOP INC. + +Name: Paul Robinson -------------------------------------------- Title: Chief Executive Officer + +Its duly authorized agent in the presence of: + +Witness -------------------------------------------- + +Printed name -------------------------------------------- + +Name: Sheree Herr -------------------------------------------- Title: VP, Legal Management + +Its duly authorized agent in the presence of: + +Witness -------------------------------------------- + +Printed name -------------------------------------------- + +13 + + + + + +EXHIBIT 1 + +TRUST AGREEMENT - FULL LIABILITY + +AGREEMENT between + +American Express Incentive Services, L.L.C. organized under the laws of the State of Missouri, USA, with an office at 1309 North Highway Drive, Fenton, MO 63099, USA ("AEIS") + +And + +Schoolpop, Inc., a Delaware corporation, with an office at 3100 Five Forks Trickum Road, Suite 410, Liliburn, GA 30047 USA ("Seller"). + +1. AEIS and Seller have entered into an American Express Stored Value Products reseller Agreement of even date herewith pursuant to which Seller is authorized to resell certain Cards as such term is defined therein. As such, AEIS hereby appoints Seller as trustee and agent to sell incentive cards issued by AEIS including Persona Select(R), Be My Guest(R), Fill It Up(R), Encompass Select(R), and any other incentive Card offered by AEIS (hereinafter collectively referred to as "Cards") in standard denominations of 25 Points, 50 Points and 100 Points according to the specific terms in the Reseller Agreement Effective August 1, 2004, and any amendments thereto. + +2. In consideration of its entitlement to the charges referred to in paragraph (g) below, Seller accepts appointment as such trustee and agent and agrees: + +a. To receive and hold in trust for AEIS, any Cards which are delivered to Seller until paid for by Seller. AEIS or their representatives or vendors may deliver Cards to any employee or representative of Seller and such employees and representatives are hereby authorized to accept such Cards on behalf of Seller. + +b. To acknowledge Seller's receipt of such Cards in writing to: (i) confirm and inform AEIS of the physical inventory of each Card delivery, and (ii) provide written confirmation of each Card delivery to an AEIS authorized representative by returning a completed Acknowledgement of Receipt form attached hereto as Schedule I and following the directions included thereon within 24 hours of receipt of each Card delivery received by or on behalf of Seller. + +c. To retain Cards in trust for AEIS in an "inactive" status as sent by AEIS until paid in full by Seller to AEIS. Inactive Cards do not have points loaded on the Cards and are not ready for sale to or use by any consumer. + +d. To prepay for each box of Cards to be sold by Seller. Upon clearance of funds for each box of Cards, AEIS shall activate the box of Cards at which time such box of Cards shall become property of Seller. Following such activation, each Card shall generally be ready for use at an appropriate establishment within two (2) business days. + +e. To sell the Cards in accordance with the written instructions of AEIS. + +f. To deliver to AEIS or their representatives any unsold Cards upon demand by AEIS. + +g. To collect any charges for the sale of Cards as may be established by Seller. + +h. To safeguard all Cards received by Seller at all times, including inactive and active Cards and when the Cards are in transit, as a prudent financial or commercial institution should safeguard a like amount of its own cash. All Cards kept on Seller's premises, both active and inactive, shall be kept locked in Seller's safe which safe must be satisfactory to AEIS. AEIS and/or their appointed representatives of AEIS or American Express Travel Related Services Inc. as solely determined by AEIS, shall be entitled to inspect and approve Seller's safekeeping facilities at any time during normal business hours. + +i. To notify AEIS at destination indicated on the Acknowledgement of Receipt Form, as soon as possible upon any loss of the Cards due to theft, burglary, fire or other cause. All notifications of loss must include the Card number for all lost Card stock. In the event an entire shipment was lost, the Card tracking number must also be provided. AEIS reserves the right to hold Seller liable for any loss, as to which Seller might not otherwise have been liable for under subparagraph 2(k) below, if Seller has unreasonably delayed reporting the loss to AEIS, and such delay has disadvantaged AEIS or prejudiced AEIS' ability to mitigate or eliminate its damages. + +14 + +j. To maintain accurate records of all Cards sold or held in inventory, including Card numbers, shipment tracking numbers, + + + + + +account numbers, and the Acknowledgement Receipt form, etc. + +k. To be responsible for any loss of any Cards received in accordance with subsection (a) above prior to the time such Cards are paid for by Seller, whether such loss occurs by theft, burglary, hold-up, fire, dishonesty of employees, mysterious disappearance, or any other cause irrespective of such cause. In the case of loss of Cards, Seller shall pay AEIS from time to time upon demand the amount of any Cards so reported as lost and later used at any merchant or other location or otherwise appear for sale for any reason whatsoever. Seller shall be fully liable for the amounts paid by AEIS and/or their affiliates with respect to such Cards together with any additional reasonable costs incurred by AEIS and/or their affiliates arising out of such Cards. Such liability shall survive termination of this Agreement. + +l. Not to sell Cards on credit or post-paid method of any kind to any individual, company, or entity whatsoever nor to utilize the Cards for the benefit of Seller, Seller's owners, officers, employees, representatives or any third party. + +m. To increase Seller's inventory of Cards by following AEIS' process. + +n. To destroy Cards for purposes of past expiration or reason other than termination that causes Seller to remove from inventory. Such Cards must be completely destroyed by cremating or shredding to the point where such Cards cannot be reconstructed in any way or Card numbers cannot be read in any way. Such destruction must be evidenced by execution of AEIS' Destruction Certificate, which is attached hereto as Schedule II. The Destruction Certificate shall be executed by Seller through two authorized signatures and shall particularly describe the Cards by (1) Card product name, (2) Card number, (3) denomination, (4) shipment tracking number, and (5) quantity by product and denomination, and account number. Seller shall pay AEIS associated destruction fees for such Card destruction as detailed within the Destruction Certificate. In the event any Cards certified as destroyed by Seller are later used at any establishment or other location or otherwise appear for sale for any reason whatsoever, Seller shall be fully liable for the amounts paid by AEIS and/or their affiliates with respect to such Cards together with any additional costs incurred by AEIS and/or their affiliates arising out of such Cards. In no event shall Seller throw away discard expired or spoiled or otherwise unwanted Cards in any other manner than described in this Section 2(n). Such liability shall survive termination of this Agreement. + +o. To pass to a security audit as performed by AEIS and/or their appointed representatives of AEIS or American Express Travel Related Services Inc. at a time and frequency solely determined by AEIS during the term of this Agreement. This Agreement shall be terminated by AEIS at AEIS' choice immediately upon Seller receiving a non-passing status of such security audit. AEIS may chose to allow Seller to conform to non-passing elements of security audit within a time so specified by AEIS in writing to Seller. Seller shall choose to make necessary changes to conform to the security audit or terminate the Agreement as so indicated in Section 4 below. + +3. This Agreement (a) may not be assigned by Seller without the written consent of AEIS, except to an entity controlling, controlled by or under common control with Seller, provided, however, Schoolpop shall remain liable for the obligations contained herein including the attachments and Exhibits thereto, and (b) may be modified only by an agreement in writing signed on behalf of AEIS by an executive officer. No other employees of AEIS have authority to modify or waive any term of this Agreement. This Agreement may be assigned by AEIS to any parent, subsidiary, affiliated or associate corporation without Seller's consent and shall, whether or not so assigned, inure to the benefit of any AEIS parent, subsidiary, associate or affiliate thereof which pays or becomes liable upon any Cards delivered to Seller under this Agreement. + +4. This Agreement shall remain in force until terminated by either party by notice given in accordance with paragraph 8, below and in accordance with Section 14(h) of the Agreement. + +a. Notices so given shall, unless otherwise specified therein, be effective upon receipt whereupon both parties shall cooperate in an effective wrap up of all outstanding issues and transition of inventory and other termination responsibilities as determined by AEIS. + +b. Upon such termination, Seller shall forthwith remit to AEIS or their agents all unsold Cards and shall safeguard such Cards during transit to AEIS in such a manner as detailed in Section 2(h) herein. + +15 + +5. The rights of AEIS hereunder shall not be prejudiced or restricted by + + + + + +any time given or forbearance extended to Seller in the enforcement of its rights and no waiver by AEIS of their rights in respect of any breach hereof by Seller shall be deemed to operate as a waiver in respect of any subsequent breach hereof. + +6. It is agreed between the parties that if any provision of this Agreement is held to be invalid, the remainder of this Agreement shall continue in full force and effect and shall be binding and effective on the parties thereto. + +7. This Agreement shall be subject to and governed by the laws of the State of Missouri, USA. + +8. All notices hereunder&sbsp;shall be mailed or faxed to the other party as follows: Notices to Seller shall be addressed or faxed to it at the address or fax number set forth on the first page hereof. Notices to AEIS shall be addressed or faxed as to: + + American Express Incentive Services, L.L.C. with a copy to: General Counsel's Office 1309 North Highway Drive American Express Fenton, MO 63099 200 Vesey Street Attn: Legal Management New York, N.Y. 10285-4908 Fax: (636) 226-2009 Attn: Marcy Wilkov Fax: (212) 640-0360 + +[Signature Pages Attached] + +16 + +Signed for and on behalf of SCHOOLPOP INC. + +Name: Paul Robinson -------------------------------------------- Title: Chief Executive Officer + +Its duly authorized agent in the presence of: + +Witness -------------------------------------------- + +Printed name -------------------------------------------- + +Name: Sheree Herr -------------------------------------------- Title: VP, Legal Management + +Its duly authorized agent in the presence of: + +Witness -------------------------------------------- + +Printed name -------------------------------------------- + +17 + +EXHIBIT 1.A + +ACKNOWLEDGEMENT OF RECEIPT FORM + +Schoolpop Inc., a for-profit company incorporated under the laws of the state of Delaware, USA with an office at 3885 Crestwood Parkway, Suite 550, Duluth, GA 30096 USA (hereinafter referred to as "Seller"). + +Seller, named above, as trustee and agent of AEIS, acknowledges receipt of the Cards listed on page 2 of the Acknowledgement of Receipt Form hereof ("Cards") and agrees: (1) to hold the Cards IN TRUST for AEIS pursuant to the terms of the Trust Agreement; (2) to sell the Cards only in accordance with written instructions from AEIS; (3) to collect such charges for the sale of Cards as Seller may establish from time to time; (4) to safeguard the Cards as a prudent person would safeguard a like amount of his own cash; (5) to notify AEIS promptly, at the address listed on page 2 of the Acknowledgement of Receipt Form hereof, of any loss of Cards due to theft, burglary, fire or any other cause. (6) (A) to be responsible for any loss of Cards unless the Cards were safeguarded in accordance with Section 2.h of the Trust Agreement and the loss occurred without Seller's fault. (B) to be absolutely responsible without regard to Seller's fault for any loss of Cards due to failure to safeguard the Cards in accordance with Section 2(h) of the Trust Agreement or due to the dishonesty of Seller's employees or agents or due to a disappearance which Seller cannot explain. (7) to pay AEIS upon demand for any Cards so lost which have been presented to any establishment or retailer in exchange for service(s) or product(s) so reported by Seller as lost and later used at any establishment or other location or otherwise appear for sale for any reason whatsoever, Seller shall be fully liable for an amount of money equal to the face value of amounts paid by AEIS and/or their affiliates with respect to such Cards together with any additional costs incurred by AEIS and/or their affiliates arising out of such Cards. and (8) that the terms hereof shall not relieve Seller of any obligation or liability under any other agreement relating to the sale of Cards + + + + + +existing between Seller and AEIS, its parent, subsidiaries or affiliates. WARNING: Except in the event of termination of the Agreement Do Not Return Any of the Cards Listed on page 2 of the Acknowledgement of Receipt Form. If it is necessary to reduce Seller's inventory of Cards, including spoiled or expired Cards, destroy such Cards by cremating or shedding and evidence their destruction by a Destruction Certificate attached to the Agreement as Exhibit 1.C, applicable destruction fees shall apply. The Destruction Certificate shall be (i) on the Seller's letterhead, (ii) executed by Seller through two authorized signatures and (iii) shall particularly describe the Cards by (a) name of Card product, (b) Card number, (c) denomination, (d) shipment tracking number, and (e) quantity by product, denomination and account number. Schoolpop shall forward the original Destruction Certificate to AEIS and Schoolpop shall confirm receipt by AEIS. If this procedure is not practical, contact AEIS Client Service Support for specific instructions regarding disposition. + +AMERICAN EXPRESS INCENTIVE SERVICES, L.L.C., is the designated servicing agent for the following Cards: + +Persona(R) Select, Be My Guest(R), Fill It Up(R), Encompass(R) Select, and any other pre-denominated incentive card offered by AEIS. + +18 + +ACKNOWLEDGEMENT OF RECEIPT FORM - PAGE 2 + +Schoolpop, Inc., a for-profit company incorporated under the laws of the state of Georgia, USA with an office at 3885 Crestwood Parkway, Suite 550, Duluth, GA 30096 USA (hereinafter referred to as "Seller") + +------------------ --------------- -------------- --------------- ------------------- --------------------- ----------------- DATE RECEIVED UPS TRACKING PRODUCT ACCOUNT # DENOMINATION BEGINNING CARD ENDING CARD NUMBER NUMBER NUMBER ------------------ --------------- -------------- --------------- ------------------- --------------------- ----------------- ------------------ --------------- -------------- --------------- ------------------- --------------------- ----------------- + +------------------ --------------- -------------- --------------- ------------------- --------------------- ----------------- + +------------------ --------------- -------------- --------------- ------------------- --------------------- ----------------- + +------------------ --------------- -------------- --------------- ------------------- --------------------- ----------------- + +------------------ --------------- -------------- --------------- ------------------- --------------------- ----------------- + +------------------ --------------- -------------- --------------- ------------------- --------------------- ----------------- + +------------------ --------------- -------------- --------------- ------------------- --------------------- ----------------- + +------------------ --------------- -------------- --------------- ------------------- --------------------- ----------------- + +------------------ --------------- -------------- --------------- ------------------- --------------------- ----------------- + +------------------ --------------- -------------- --------------- ------------------- --------------------- ----------------- + +------------------ --------------- -------------- --------------- ------------------- --------------------- ----------------- + +------------------ --------------- -------------- --------------- ------------------- --------------------- ----------------- + +------------------ --------------- -------------- --------------- ------------------- --------------------- ----------------- + +Fax completed Acknowledgement of Receipt Form to Gregg Baum, 636.226.2004, or by certified mail to 1309 North Highway Drive, Fenton, MO 63099, attention: Gregg Baum. + +19 + +EXHIBIT 1.B + +AMERICAN EXPRESS INCENTIVE SERVICES, L.L.C. 1309 N. HIGHWAY DRIVE FENTON, MO 63099 + +Seller, named above, as trustee and agent of CERTIFICATE OF INVENTORY DESTRUCTION FOR ANONYOMOUS CARDS ONLY + +MUST BE RECEIVED BY AEIS AT LEAST 15 DAYS PRIOR TO VALID THROUGH DATE ON CARD. + +CLIENT NAME: SCHOOLPOP, INC. DATE OF ORIGINATING ORDER:______________ + +CLIENT ADDRESS: 3885 CRESTWOOD PARKWAY, SUITE 550, DULUTH, GA 30096 USA + +CLIENT ACCOUNT #:______________ DESTROYING WHOLE OR PART OF AN ORDER____________ + +1. The undersigned hereby certifies that: + +[X] Each of the cards described on the attached Schedule A (the "Cards") has been destroyed; [X] Destruction of the Cards was necessary because _______________________________________________ [X] The Cards were destroyed by this Method:_____________________________________________________ [X] At the time of destruction, Schoolpop Inc. was the unconditional trustee of each of the Cards and was holding in trust for AEIS, and + + + + + +none of the Cards described herein have been assigned, transferred, or issued to any person, firm, or corporation. + +2. Schoolpop, Inc., on behalf of itself and its successors and assigns, agrees that should any charge(s) be incurred with respect to any of the Cards, Schoolpop, Inc. will, upon request of American Express Incentive Services, LLC ("AEIS"), pay AEIS the full amount of such charge(s) and Schoolpop Inc. shall indemnify AEIS, its officers, and members, and hold each of them harmless from and against any and all claims, actions and suits, whether groundless or otherwise, and from and against any and all liabilities, losses, damages, costs, charges and any other expenses (including but not limited to attorneys' fees and expenses) of every nature and character by reason of the cancellation and destruction of the Cards or the making of any payment or costs incurred as a result of any use of the Cards described herein. + +SCHOOLPOP INC. + +By: ----------------------------------- Return this original Destruction Certificate and completed Certificate of Name: Inventory Destruction to AEIS at the --------------------------------- above address via certified mail or &bbsp; other tracked shipment method. Title: -------------------------------- + +Date: --------------------------------- + +WITNESS WITNESS + +Name: --------------------------------- --------------------------------------- + +Title: -------------------------------- --------------------------------------- + +Date: --------------------------------- --------------------------------------- (Signature) (Signature) + +20 + +EXHIBIT 1.C CERTIFICATION OF INVENTORY DESTRUCTION FOR SCHOOLPOP, INC. + +If the number of Cards destroyed requires more rows, use multiple pages of this form or type the denomination and Card numbers into a spreadsheet and attach the printed spreadsheet to this form. + +----------------------- --------------------------------------------- ---------------------- DENOMINATION CARD # CARD STATUS (active or inactive) ----------------------- --------------------------------------------- ---------------------- ----------------------- --------------------------------------------- ---------------------- + +----------------------- --------------------------------------------- ---------------------- + +----------------------- --------------------------------------------- ---------------------- + +----------------------- --------------------------------------------- ---------------------- + +----------------------- --------------------------------------------- ---------------------- + +----------------------- --------------------------------------------- ---------------------- + +----------------------- --------------------------------------------- ---------------------- + +----------------------- --------------------------------------------- ---------------------- + +----------------------- --------------------------------------------- ---------------------- + +----------------------- --------------------------------------------- ---------------------- + +----------------------- --------------------------------------------- ---------------------- + +----------------------- --------------------------------------------- ---------------------- + +Total number of ACTIVE Cards:________________________________ + +Total number of INACTIVE Cards:______________________________ + +Total number of CARDS________________________________________ + +Destruction Date:____________________________________________ + +Aggregate total denomination of Cards:_______________________ + + + + + +Client Authorized Signature:_________________________________ + +Printed Name:________________________________________________ + +Title:_______________________________________________________ + +21 + +EXHIBIT 2 + +SCHOOLPOP CARD PRICING + +The following pricing is effective with the Effective date of this Agreement through the term of the Agreement and is subject to change as detailed in the Agreement. + +Off-face point value based on volume mix: + +Persona Select 8% Encompass Select 2% Fill It Up 4% Be My Guest 4% Category Card 3% (Contingent upon achieving a four and one-half percent (4.5%) weighted average commission via the contracted merchant.) Grocery Card 3% (Contingent upon achieving a four percent (4%) weighted average commission via the contracted merchant.) + +22 + +EXHIBIT 3 + +SCHOOLPOP ACCOUNT NUMBERS + +1. Effective with Period One, the following account numbers shall be used by Schoolpop when placing Orders for Cards. + +----------------------------------- ----------------------------------------- --------------------------- PRODUCT DENOMINATION ACCOUNT NUMBER ----------------------------------- ----------------------------------------- --------------------------- Persona(R) Select 25, 50, and 100 Points 8531 ----------------------------------- ----------------------------------------- --------------------------- Encompass(R) Select 25, 50, and 100 Points 8536 ----------------------------------- ----------------------------------------- --------------------------- Fill It Up(R) 25, and 50 Points 8533 ----------------------------------- ----------------------------------------- --------------------------- + +2. Effective with Period Two, the following account numbers are to be used by Schoolpop. + +----------------------------------- ------------------------------------------ -------------------------- PRODUCT DENOMINATION ACCOUNT NUMBER ----------------------------------- ------------------------------------------ -------------------------- Persona(R) Select 25 Points 8684 ----------------------------------- ------------------------------------------ -------------------------- Persona(R) Select 50 Points 8685 ----------------------------------- ------------------------------------------ -------------------------- Persona(R) Select 100 Points 8686 ----------------------------------- ------------------------------------------ -------------------------- + +----------------------------------- ------------------------------------------ -------------------------- Encompass(R) Select* 25 Points 8705 ----------------------------------- ------------------------------------------ -------------------------- Encompass(R) Select 50 Points 8687 ----------------------------------- ------------------------------------------ -------------------------- Encompass(R) Select 100 Points 8801 ----------------------------------- ------------------------------------------ -------------------------- + +----------------------------------- ------------------------------------------ -------------------------- Fill It Up(R) 25 Points 8681 ----------------------------------- ------------------------------------------ -------------------------- Fill It Up(R) 50 Points 8683 ----------------------------------- ------------------------------------------ -------------------------- + +----------------------------------- ------------------------------------------ -------------------------- Be My Guest(R) 25 Points 12095 ----------------------------------- ------------------------------------------ -------------------------- Be My Guest(R) 50 Points 12098 ----------------------------------- ------------------------------------------ -------------------------- + +3. Account numbers and effective dates for any products and/or denominations in addition to the account numbers detailed above will be provided to Schoolpop by AEIS upon completion of setup of such products and/or denominations. + + + + + +*Encompass(R) Select account numbers shall not be submitted with Orders effective December 31, 2004. + +23 + +EXHIBIT 4 + +BRANDING QUICK REFERENCE GUIDE + +1. All communication pieces/media referencing Gift Cheques, all AEIS Card products, American Express Incentive Services, AEIS, American Express, and/or any American Express merchant must be submitted for approval. Please allow five (5) to seven (7) business days for the branding review. Typical turnaround is three (3) to five (5) days, however, unusual circumstances may cause a delay in the typical turnaround. You will be notified of any delay. + +2. Types of communications that require approval: Web sites, audio/visual productions, printed materials (brochures, fact sheets, direct mailings, newsletters, point of purchase displays), news releases, etc. + +3. Our agreement with our parent company, American Express, is that they retain the authority to review every communication piece containing references to the sources in the first bullet above. These approvals are forwarded by AEIS to: + +The American Express Advertising Review Board ("ARB") who will review the following: Communications from an advertising perspective How the product is being communicated Card images General Counsel's Office ("GCO") who will review the following: Communications from a legal perspective Sweepstakes rules Charitable mentions Copyright infringements + +4. Product marks should be represented as follows: + +Persona(R) Select Encompass(R) Select Fill It Up(R) Be My Guest(R) + +5. Since American Express is not a bank and not affiliated with a bank, terminology implying as much should not be used. Please refer to the following examples: + +--------------------------------------------------------- --------------------------------------------------------------- DO NOT USE REPLACE WITH --------------------------------------------------------- --------------------------------------------------------------- American Express Gift Card; American Express Incentive Services gift card; American Express Reward Card; American Express Incentive Services reward card; Gift/Reward Card from American Express American Express branded reward card; Reward card with the American Express brand --------------------------------------------------------- --------------------------------------------------------------- Statement Transaction Summary --------------------------------------------------------- --------------------------------------------------------------- Deposit; Credit Load; add; fill --------------------------------------------------------- --------------------------------------------------------------- Available funds/points; Balance Remaining funds/points Point balance --------------------------------------------------------- --------------------------------------------------------------- Account Card --------------------------------------------------------- --------------------------------------------------------------- Merchants Establishments --------------------------------------------------------- --------------------------------------------------------------- Similar to a debit card; A prepaid Card; Debit/Credit Card &sbsp; Stored-value Card; Reward Card --------------------------------------------------------- --------------------------------------------------------------- + +6. The AEIS or American Express logos (Blue Box) are not to be used on Client pieces, as it implies that AEIS and/or American Express are more involved in the program than providing the reward product. The words "new" and "introducing" are limited to the first six months of use. + +24 + +7. Development of Cards or communication materials associated with the following industries (including showing images related to these industries, e.g. pictures of guns, cigarettes, etc.) must be reviewed on a case-by-case basis. Alcohol Tobacco Gambling Firearms Under no circumstances may any advertising appear in the following media: + + + + + +Howard Stern Rush Limbaugh Don Imus + +8. Development of Cards with company names or logos from adult entertainment or pornography industries is strictly prohibited. + +9. Use the correct service Mark or registered Mark the first mention of the name on each page. + +10. AEIS and American Express will treat communications sent through the branding process as confidential. + +11. This Quick Reference Guide is not all-inclusive. All communications are subject to the sole approval of American Express. + +25 + +EXHIBIT 4.A + +BRANDING APPROVAL PROCESS OVERVIEW + +GET READY You have the idea for the piece We send you a low-resolution card or Gift Cheque image, if needed, for placement purposes only (FPO) You develop the layout + +GET SET You send us the layout and copy We will review it in AEIS Branding and send to American Express Review Units You should allow a five (5) day turnaround* We will return any revisions with the high-resolution image, if needed + +GO! You produce and distribute the piece You send us three (3) copies of the final printed piece to keep on file You (and we) celebrate your success! + +* Standard turnaround is three to five business days, however, if unusual circumstances occur, the turnaround may take longer. Should this occur, we will notify you of any delay. + +26 + +EXHIBIT 4.B + +AEIS MERCHANT APPROVAL GUIDELINES AND PROCESS + +INTRODUCTION / OVERVIEW + +The AEIS Communications Group requires review of any new or revised materials, which include any mention of Merchant Partners -- in order to ensure proper merchant guidelines. This includes ALL advertising, promotional and marketing materials in any medium (INCLUDING: COMMUNICATIONS, ADVERTISING, SALES PROMOTION COLLATERAL, DIRECT MAIL, PRESS RELEASES, VIDEOS, WEB SITES, PROMOTIONAL ITEMS, SALES PRESENTATIONS AND SIMILAR MATERIALS.) Copy and layout should be submitted as early as possible. Due to the type of communications piece, approval could take anywhere from 3 to 10 business days. + +MERCHANT SUPPORTING DOCUMENTATION FOR APPROVAL GUIDELINES + +Consumer applications are typically more involved. Generally, consumer programs are targeted to a wider audience; therefore, the implications are greater for the merchant. For this reason, the merchants mandate that AEIS seek individual approvals from each and every merchant. + +Any standard applications using customized collateral should be reviewed by AEIS for content and accuracy. Even in the cases where standard program materials are to be used, AEIS will need to internally review any customized announcements and/or teasers. More than likely, these pieces feature only merchant names or merchant lists in print and can typically be approved within 24-48 hours. + +Pieces using only select groups of merchants, photos or logos will generally require a higher level of approval and depending on the merchants used, may require approval from the merchant as well. The approval timeline will range from three to ten (3-10) business days for existing/ongoing. + +Once, layout and copy are approved by AEIS Communications Group, Merchant Partnerships, Operations and American Express, any ongoing and additional changes must also be approved. + +IMAGES, LOGOS, PRODUCT PATENT, AND REGISTERED/SERVICE MARKS + +IMAGES AND LOGOS The following are examples of merchant image and logo usage, which require merchant approval through Merchant Partnerships: + +o Any communication or collateral, whether standard or customized, containing merchant images or logos must be reviewed by Merchant Partnerships o Any new design work of merchant logos and images not previously approved o Use of standard merchant logos in any color other than the original color o Unique positioning of merchant images - surrounding merchants, etc. + + + + + +o "Direct mail" pieces, which include merchant references when only "select" merchants are referenced. o Unusual type of creative print work such as posters o Borders around logos and busy backgrounds o Any copy or tag-lines not previously approved o Under no circumstances are press release photos to be used on or in association with any form of communication relating to incentive card programs unless approved by Merchant Partnerships' contact. o Images and/or logos are not to be altered (cropped, inset, or overlaid) unless approved by Merchant Partnerships' contact. o All images used in magazine format must be obtain merchant copy write information next to the image + +MERCHANT PARTNERSHIPS RESERVES THE RIGHT TO REMOVE IMAGES AT ANY TIME THAT MAY BE DEEMED INAPPROPRIATE REPRESENTATION OF THE MERCHANT (THIS INCLUDES OUTDATED OR SEASONAL IMAGES AND LOGOS). + +ALL QUESTIONS REGARDING MERCHANT COMMUNICATION APPROVAL SHOULD BE SUBMITTED TO ANN FINK AT ANN.FINK@AEIS.COM, 636-226-2043. + +27 + +EXHIBIT 5 + +CATEGORY CARD TARGET ACQUISITIONS + +---------------------------------------------------------------------------------------------- PRIMARY CARD MARKETING CATEGORIES TARGET MERCHANTS ---------------------------------------------------------------------------------------------- CONSUMER CATEGORIES: ---------------------------------------------------------------------------------------------- Entertainment - Electronics & Misc Electronics Best Buy ---------------------------------------------------------------------------------------------- Apparel & Services Apparel TJ Maxx, Marshalls ---------------------------------------------------------------------------------------------- Household Furnishings & Equipment - Major and Small Best Buy Major and Small Appliance & Misc Appliances household equipment ---------------------------------------------------------------------------------------------- Telephone Services Phones and Accessories Best Buy ---------------------------------------------------------------------------------------------- Household Furnishings & Equipment - Home furnishings and textiles and Furniture decorations Home Goods ---------------------------------------------------------------------------------------------- Restaurants Restaurants Darden (Red Lobster, Olive Garden, etc.) ---------------------------------------------------------------------------------------------- Gifts - combined from all categories Gifts Fossil Crabtree & Evelyn* Barnes & Nobles ---------------------------------------------------------------------------------------------- Entertainment - Tickets & Admissions Entertainment Regal Theatres, Hollywood Video, Ticketsnow.com ---------------------------------------------------------------------------------------------- Gasoline & Motor Oil Auto Accessories Autozone/TBD ---------------------------------------------------------------------------------------------- Entertainment - Toys Gifts Toys R Us ---------------------------------------------------------------------------------------------- Personal Care Products & Drugs Drugs Walgreens ---------------------------------------------------------------------------------------------- ALTERNATE CATEGORIES: ---------------------------------------------------------------------------------------------- Office Supplies Office Supplies Staples ---------------------------------------------------------------------------------------------- Sporting Goods Sporting Goods Sports Authority ---------------------------------------------------------------------------------------------- Entertainment Pet Supplies Petsmart ---------------------------------------------------------------------------------------------- + +28 + +EXHIBIT 5.A + +GROCERY CARD TARGET ACQUISITIONS + +Longs HEB Piggly Wiggly Save Mart ShopKo Safeway Staters + +29 \ No newline at end of file diff --git a/full_contract_txt/LUCIDINC_04_15_2011-EX-10.9-DISTRIBUTOR AGREEMENT.txt b/full_contract_txt/LUCIDINC_04_15_2011-EX-10.9-DISTRIBUTOR AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..daac0e5545871e2dfa265f9184374936660f75a2 --- /dev/null +++ b/full_contract_txt/LUCIDINC_04_15_2011-EX-10.9-DISTRIBUTOR AGREEMENT.txt @@ -0,0 +1,57 @@ +EXHIBIT 10.9 DISTRIBUTOR AGREEMENT This Distributor Agreement (the 'Agreement') dated [*] is between Lucid Inc., a New York corporation, having a principal place of business at 2320 Brighton Henrietta T/L Road, Rochester NY 14623 And [*] ('Distributor') For good and valuable consideration, the parties hereby agree: 1. Appointment A) Lucid appoints the Distributor and the Distributor accepts appointment as an exclusive authorized Lucid Distributor. The Distributor will be entitled to purchase certain Lucid products and resell them to End User customers within the following market segments:- hospital and medical research centres, including but not limited to dermatology, pathology, plastic surgery and mohs surgery departments, clinical research centres, small animal research facilities, cosmetic and cosmeceutical companies. B) The relationship of the parties under this Agreement is that of independent contractors and nothing contained herein shall be construed as creating any partnership, joint venture or agency relationship between the Distributor and Lucid. Under no circumstances shall any employees of one party be deemed the employees of the other for any purpose. The Distributor shall not have the authority to assume or create any obligation, or make any representation of any kind on behalf of Lucid. 2. Term A) The initial term of this Agreement shall be three (3) calendar years from the Agreement date. After the initial term, unless terminated, this Agreement will automatically renew for periods of one (1) calendar year each. 3. Products A) Lucid agrees to sell the following products to the Distributor: - VivaScope in-vivo Confocal Microscope Model VS1500 VivaScope ex-vivo Confocal Microscope Model VS2500 VivaSCOPE in-vivo Confocal Microscope Model VS3000 B) Further products manufactured by Lucid will be discussed with the Distributor and by agreement will be added to this Agreement. + + + + + + 4. Territory A) The Distributor is appointed as an exclusive Distributor within the following territories: [*]. B) The Distributor agrees to act as a Distributor for Lucid within the above Territories and not to solicit any sales of the Product(s) outside the above Territories. 5. Duties of The Distributor A) The Distributor will use his best efforts to actively promote and sell the Product to all relevant End Users within all relevant market segments within the Territory. B) The Distributor agrees to undertake detailed sales demonstrations of the Product(s) to potential End Users within all relevant market segments within the Territory. C) The Distributor agrees to allow the End User to undertake sales evaluations (trials) of the product(s), using the Distributor's own Demonstration Equipment as necessary. D) The Distributor agrees to promote the Product(s) at all relevant trade shows, seminars and exhibitions held within the Territory. Lucid may, at it's discretion, and in co-ordination with the Distributor when Lucid deems it necessary, at its own expense and in its own name, engage in advertising activities of or hold or participate in exhibitions of the Product in the Territory. E) The Distributors will not develop, manufacture or sell any equipment or service, which in any way can be considered to be competitive to the equipment or service offered by Lucid to the Distributor as Product. Lucid reserves the right to inform the Distributor from time to time of specific products and companies that Lucid considers to be competitive. A competitive product includes, but is not limited to, any product that would infringe any claim of any Lucid owned or licensed patent issued or pending worldwide, whether or not corresponding patent claims are in force in the Distributors territory or the sale of which would restrict sale of Lucid product. F) The Distributor will provide to the End User, full installation and customer training of the Product(s). + + + + + + 6. Personnel A) The Distributor will employ as a minimum one full-time Lucid dedicated Product Manager sales professional, giving one hundred per cent of their time to the promotion and sale of Lucid products. 7. Demonstration Equipment A) The Distributor agrees to purchase demonstration products as new products are released subject to special pricing. The Distributor agrees to use the demonstration equipment for the duties as noted in 5 A, B, C, D as above and not to re-sell this demonstration equipment to End Users. 8. Training A) The Distributor agrees to have all sales professionals employed on Lucid products undergo sales training at an agreed location and to a level approved by Lucid. B) The Distributor agrees to allow Lucid to accompany the Distributor sales professionals during sales calls within the Territory as required. C) The Distributor agrees to allow Lucid to participate in sales meetings for training purposes, held within the Distributor's facility. 9. Information A) The Distributor will supply to Lucid, on a monthly basis, a detailed listing of all sales prospects within the Territory. A sales prospect is considered by Lucid to be any End User who has expressed an interest in purchasing Lucid products. B) The Distributor agrees to supply to Lucid on a monthly basis a detailed sales forecast, highlighting potential order dates of product. C) The Distributor agrees to supply to Lucid, from time to time, with any competitive data emanating from the Territory. D) The Distributor agrees to supply Lucid, on an annual basis, with a detailed sales plan for the Product(s), broken down by sales for each individual country within the Territory. Any country or part of the territory that does not meet the sales expectations as forecasted by the Distributor will be subject to review by Lucid and may subsequently be removed from the Territory. The first sales plan will be presented to Lucid within three (3) months of the signing of this agreement and annual sales plans will be due on November 30 each year. + + + + + + E) The distributor agrees to keep Lucid informed of details of forthcoming and installed units together with customer details including customer name, address and email details at a level sufficient to fulfil all requirements of US Government Export Administration Regulations and Lucid quality audits. 10. Sub-Distribution The Distributor shall not be entitled to engage sub-distributors or any other third party as his sub-agent for sales of the Product, without having obtained Lucid's prior written approval. Such approval shall not be unreasonably withheld. 11. Intellectual Property A) Lucid is the sole owner of all trademark symbols and logos under which the products will be sold. Lucid agrees that the Distributor may use the appropriate trademarks to promote the sale of products in the Territory. Such use is only with Lucid's permission and must be related to the sale of Lucid products. The Distributor acquires no rights to Lucid trademarks by selling Lucid products. The Distributor may not use Lucid trademarks, symbols or logos as part of its business or corporate names. B) The Distributor will assist Lucid in protecting Lucid's patents, copyright, trademarks and logos. The Distributor will inform Lucid of any known or suspected violations of Lucid's patents, copyright, trademarks, symbols and logos. If Lucid requests, the Distributor will assist in protecting such intellectual property from infringement. 12. Duties of Lucid A) Lucid will supply to the Distributor, free of any charge, reasonable quantities of Product datasheets. B) Lucid will supply to the Distributor, free of charge, images of skin in vivo. Lucid will make every reasonable effort to supply images of skin to the Distributor, which are required by the Distributor for a particular End User application. C) Lucid will make available free of charge to the Distributor the services of at least one suitable sales professional. D) Lucid will make available free of charge to the Distributor the services of at least one Clinical Research Engineer. This person will normally reside at Lucid's USA Headquarters but may from time to time assist the Distributor within the Territory. + + + + + + E) Lucid will make its facility in the USA available, from time to time, to the Distributor and the Distributor's sales force for sales training purposes. Lucid will also offer this service to the Distributor for the introduction of potential End Users from the Territory. 13. Prices, Terms & Conditions of Sale A) The Distributor may purchase Products from Lucid at the price published by Lucid, from time to time, in the International Distributor price list (attached). Lucid agrees to allow the Distributor a discount of thirty (30) per cent against the published International Distributor price list. B) All orders from the Distributor to Lucid will be subject to Lucid's standard terms and conditions of sale. C) All prices are quoted by Lucid in US Dollars and are sold Ex Works, becoming the Distributor's property when despatched from the Lucid facility. 14. Minimum Purchase Obligation The Distributor agrees to purchase from Lucid minimum agreed quantity of product in the first, second and third years of the Agreement, excluding demonstration product. These quantities to be agreed by both parties in the initial detailed sales plan noted in clause 9D and amended with further agreement in subsequent annual sales plans 15. PAYMENT TERMS The Distributor agrees to abide by Lucid's standard payment terms, which are as follows; One Hundred (100) per cent of order value by sixty ( 90 ) day irrevocable letter of credit when order is placed on Lucid. 16. TERMINATION A) Either party may terminate this agreement by giving written Notice to the other party if: i) The other party fails to perform or satisfy any of the conditions, covenants or obligations of this Agreement. ii) The other party files or has filed against it, a petition seeking relief under any bankruptcy, insolvency, reorganisation, moratorium, liquidation or similar law affecting creditors' rights B) In addition, Lucid may terminate this agreement by giving the Distributor Written Notice if there is any change of control, ownership or management of the Distributor. + + + + + + C) Either party may terminate this agreement by providing Ninety days Written Notice. 17. EFFECT OF TERMINATION A) Upon the termination of this Agreement: 1. The Distributor shall terminate any registration it has made as a Lucid Distributor. 2. Distributor will immediately return any samples, sales literature, promotional materials and other documents supplied to the Distributor free of charge from Lucid. 3. Any right to use Lucid patents, copyrights, trademarks, symbols and logos shall immediately cease. B) If this Agreement is terminated Lucid shall not be liable for any incidental, indirect; special punitive of consequential damages of any kind, including any perceived or real market development costs. 18. Incident and Traceability Reporting A) DISTRIBUTOR will IMMEDIATELY report via telephone communication to Lucid any incidents that involve the use of PRODUCTS sold by the DISTRIBUTOR to end users that affect patient safety or well-being (an "INCIDENT"). Such oral incident reporting will be followed immediately by a written incident report that documents the detailed conditions that resulted in the INCIDENT and Distributor shall thereafter co-operate with Lucid in the investigation of any and all conditions that led to, or resulted from the INCIDENT. B) DISTRIBUTOR will routinely, but not less than annually, report in writing to Lucid, documenting the end users to which PRODUCTS have been sold, including the address, telephone number and name of a person who is the primary emergency contact. Lucid will use this information in the event of Lucid issuing a product recall of the PRODUCT for safety or other reasons. If such an event occurs, and upon Lucid's request, the DISTRIBUTOR will immediately provide Lucid with the names, addresses, telephone numbers and emergency contact personnel of any end user sites not previously reported to Lucid. 19. LIMITATION OF LIABILITY A) Lucid does not guarantee delivery of Product by any particular date. If Lucid accepts Distributor's order and fails to deliver ordered products, Distributors sole remedy will be limited to refund of money paid to Lucid for any undelivered products. B) Lucid will not have any liability or responsibility to Distributor or any other person or entity for any consequential, indirect, special, punitive or incidental damages or lost profits, whether foreseeable or unforeseeable, based on + + + + + + claims of Distributor or Distributor's customers (including but not limited to, claims for loss of data, goodwill, profits, use of money or use of product, interruption in use or availability of data stoppage or other work or impairment or assets) arising out of breach or failure of express or implied warranty, breach of contract, misrepresentation, negligence, strict liability in tort or otherwise, except only in the case of death or personal injury where and to the extent that applicable law requires such liability. In no event will the aggregate liability incurred by Lucid in any action or proceeding exceed the total amount actually paid to Lucid by Distributor for the purchase of the products that actually caused the damage or loss. 20. Governing Law A) This Agreement shall be governed by and interpreted in accordance with the laws of the State of New York, USA without regard to conflict of laws principles. 21. NOTICE A) All notices required herein ("NOTICE") shall be given in English language. Notices must be sent postage pre-paid, and (a) delivered personally against written receipt (b) transmitted via facsimile or (c) sent by nationally recognised overnight courier service, or (d) sent via first class certified mail, return receipt requested, to the address listed above. Any change of addresser fax number must be designated in writing and served in accordance with this Section. Notice shall be effective (a) upon receipt if personally delivered (b) upon confirmation of transmission if sent via facsimile and (c) two (2) business days after deposit with the courier or an official depository of the US Post Office, if sent via recognised overnight courier of via Certified Mail, as the case may be. 22 ENTIRE AGREEMENT: A) This Agreement, including the Price List attached hereto, as amended from time to time, constitutes the entire understanding between the parties with respect to the subject matter of this Agreement and supersedes and replaces all previous proposals, both oral and written, negotiations, representations, commitments, writings, contracts, agreements and all other communications between the two parties. Signatures on the next page + + + + + + IN WITNESS WHEREOF, the parties have duly executed this Agreement on the date first above written. + + + + + + LUCID Inc. [*] By By Marcy K. Davis-McHugh [*] TITLE TITLE: Corporate Vice President + + + + DATE [*] DATE: [*] + + + + SIGNATURE SIGNATURE \ No newline at end of file diff --git a/full_contract_txt/LeadersonlineInc_20000427_S-1A_EX-10.8_4991089_EX-10.8_Co-Branding Agreement.txt b/full_contract_txt/LeadersonlineInc_20000427_S-1A_EX-10.8_4991089_EX-10.8_Co-Branding Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..3924a97db8605abb5e8379e6c136882be09c3bbb --- /dev/null +++ b/full_contract_txt/LeadersonlineInc_20000427_S-1A_EX-10.8_4991089_EX-10.8_Co-Branding Agreement.txt @@ -0,0 +1,411 @@ +EXHIBIT 10.8 + + [Certain confidential information has been omitted from this Exhibit 10.8 ------------ pursuant to a confidential treatment request filed with the Securities and Exchange Commission. The omitted information is indicated by the symbol "***" at each place in this Exhibit 10.8 where the omitted information appeared in the ------------ original.] + + CO-BRANDING AGREEMENT --------------------- + + This Co-Branding Agreement (this "Agreement") dated March 15, 2000 (the "Effective Date") is entered into between VerticalNet, Inc., a Pennsylvania corporation having a principal place of business at 700 Dresher Road, Suite 100, Horsham, Pennsylvania, 19044 ("VerticalNet"), and LeadersOnline, Inc. a Delaware corporation having a principal place of business at 18401 Von Karman Avenue, Suite 500, Irvine, California, 92612 "(LeadersOnline") (each a "Party" and together the "Parties"). + + BACKGROUND + + WHEREAS, VerticalNet owns and operates a series of Online Communities (as defined below) that are accessible via the World Wide Web, each of which is designed to be an online gathering place for businesses of a certain type or within a certain industry; and + + WHEREAS, LeadersOnline desires to advertise its job placement services (the "LeadersOnline Services") on certain of VerticalNet's Online Communities through banner ads, newsletters and employer spotlights, to access VerticalNet's proprietary resume bank and to display and maintain a Link (as defined below) from the LeadersOnline Site (as defined below) to a VerticalNet Site (as defined below) to enable users of the LeadersOnline Site to access and utilize the VerticalNet Online Communities; and + + WHEREAS, VerticalNet desires to permit LeadersOnline to advertise the LeadersOnline Services on certain of VerticalNet's Online Communities through banner ads, newsletters and employer spotlights, to allow LeadersOnline access to VerticalNet's proprietary resume bank and to create a Link from the LeadersOnline Site to a VerticalNet Site to enable users of the LeadersOnline Site to access and utilize the VerticalNet Online Communities. + + NOW, THEREFORE, in consideration of the mutual covenants herein, and intending to be legally bound hereby, VerticalNet and LeadersOnline agree as follows: + +I. DEFINITIONS + + 1.1. Affiliate shall mean, when used with reference to a Party, any individual or entity directly or indirectly controlling, controlled by or under common control with such Party. For purposes of this definition, "control" means the direct or indirect ownership of at least 50% of the outstanding voting power of a Party, or the right to control the policy decisions of such Party. + + 1.2. Banner shall mean a graphical image advertising a Party's Site that is posted on the other Party's Site in an area designated by the Party controlling the Site on which the image is posted, and containing a Link to the Site of the Party which purchased the Banner. + + 1.3. Career Center shall mean that area of the VerticalNet Online Communities designated by VerticalNet in which VerticalNet offers various employment related services to Users of the VerticalNet Sites, including resume posting, career information and Employer Spotlights. + + 1 + + 1.4. Confidential Information shall mean, subject to the provisions of Section 9.2 [Exclusions], all proprietary and confidential information of a Party, including, without limitation, trade secrets, technical information, business information, sales information, customer and potential customer lists and identities, product sales plans, sublicense agreements, inventions, developments, discoveries, software, know-how, methods, techniques, formulae, data, processes and other proprietary ideas, whether or not protectable under patent, trademark, copyright or other areas of law, that the other Party has access to or receives. For purposes of this Agreement, this Agreement shall be considered Confidential Information. + + 1.5. Employer Spotlight shall mean a feature on the VeticialNet Sites containing company listings that Link to full-page company descriptions of employers actively recruiting candidates to fill open positions within their companies that is framed by VerticalNet Proprietary Features. + + 1.6. Home Page shall mean the first page presented when a User selects a Site or presence on the World Wide Web. + + 1.7. HR Site shall mean the VerticalNet Site located on the World Wide Web at HRHub.com, or any successor Sites thereto. + + 1.8. Intellectual Property shall mean any and all trade secrets, patents, copyrights, trademarks, service marks, URLs, trade dress, brand features, know- how and similar rights of any type under the laws of any applicable governmental authority, including, without limitation, all applications and registrations relating to any of the foregoing. + + 1.9. Intellectual Property Rights shall mean all rights in and to Intellectual Property, including, without limitation, all patent rights, copyrights, trademarks, service marks, know-how and trade secrets. + + 1.10. LeadersOnline Mark shall mean any trademark, service mark, trade name, domain name, design or logo of LeadersOnline or its Affiliates. + + 1.11. LeadersOnline Site shall mean the Site located at + +Source: LEADERSONLINE INC, S-1/A, 4/27/2000 + + + + + +www.LeadersOnline.com (and any successor Site thereto). + + 1.12. LeadersOnline-VerticalNet Revenue shall mean the total gross fees received by LeadersOnline from VerticalNet-LeadersOnline Clients for the use of LeadersOnline Services, exclusive of taxes and expense reimbursements. + + 1.13. Link shall mean a link, including but not limited to a hyperlink, button or banner, that connects two Sites in a manner so that when a User clicks on the link, the User is transferred directly from one Site to a second Site. + + 1.14. Listing Page shall mean a page on the VerticalNet Site that contains a listing of all currently available VerticalNet Online Communities and Links to each of such Online Communities. + + 2 + + 1.15. Newsletter Ads shall mean an advertising message comprised of text describing LeadersOnline and its services that is placed in an email transmission containing employment related information supplied by VerticalNet that is transmitted to Users of the HR Site who have provided their email addresses to VerticalNet along with permission to transmit such messages to the email address. + + 1.16. Online Community shall mean a VerticalNet Site that acts as a comprehensive source of information, dialogue and commerce for a particular industry or service market. + + 1.17. Proprietary Feature shall mean any name, trademark, service mark, trade name, domain name, navigational element, copyright, or logo which is proprietary to LeadersOnline and/or VerticalNet, as appropriate. + + 1.18. Site shall mean a site located on the World Wide Web portion of the Internet. + + 1.19. Resume Bank shall mean a collection of resumes stored in electronic form that have been posted in Career Centers by Users of the VerticalNet Sites. + + 1.20. Term shall mean the Effective Date through June 15, 2001 and any Renewal Term (as defined in paragraph 7.4 herein.) + + 1.21. URL shall mean a universal resource locator used for the purpose of identifying a Site located on the Internet. + + 1.22. User shall mean a single person who accesses and views a Site whether directly from a web browser or through a Link. + + 1.23. User Data shall mean all data generated by an Internet server that relates to file requests, user identification, transaction logs, session times and other information regarding the Users directed to the LeadersOnline Site through the Banner Links or Employer Spotlight, generated or collected by or through the LeadersOnline Site, but excluding any information that relates or refers to a particular project of such User. + + 1.24. VerticalNet Branded Link shall mean a Link (including but not limited to a hyperlink, button or banner) containing a VerticalNet Mark that will take Users of the LeadersOnline Site to the Listing Page. + + 1.25. VerticalNet Mark shall mean any trademark, service mark, trade name, domain name, design or logo of VerticalNet. + + 1.26. VerticalNet-LeadersOnline Clients shall mean the clients of LeadersOnline that utilize the LeadersOnline Services and pay commissions or other fees to LeadersOnline for the use of its Services, and make initial contact with the LeadersOnline Site through a Link from a VerticalNet Site or through direct access to the LeadersOnline Site if such access was prompted by information presented in a Banner, Newsletter Ad or Employer Spotlight containing information about the LeadersOnline Services. + + 3 + + 1.27. VerticalNet Site shall mean a Site owned and operated by VerticalNet or a portion of such Site designated by VerticalNet. + +2. VERTICALNET BRANDED LINK + + 2.1. Hosting and Maintenance. LeadersOnline shall be responsible for the hosting, display and maintenance of the VerticalNet Branded Link on the LeadersOnline Site. The VerticalNet Branded Link shall be located on the Home Page of the LeadersOnline Site and on the first page of each section of the Site, including the sections entitled "Becoming a Member", "Why You Should Join", "How it Works", "About LeadersOnline" and "Recruiter Information". The VerticalNet Branded Link shall be available on each of the foregoing pages as soon as reasonably practicable after the Effective Date, and throughout the Term. It shall be located in an area of the foregoing pages and in a size mutually agreeable to the Parties. + + 2.2. Mark License. VerticalNet hereby grants LeadersOnline a non-exclusive, nontransferable, royalty-free right and license for the Term of this Agreement to utilize a VerticalNet Mark in a form approved by VerticalNet for the design and display of the VerticalNet Branded Link. + + 2.3. Link License. VerticalNet hereby grants to LeadersOnline a non- exclusive, non-transferable, royalty-free right and license to link to the VerticalNet Site. The Link will access the Listing Page of the VerticalNet Site located at www.verticalnet.com. + +3. BANNER/NEWSLETTER PURCHASE COMMITMENT. + + 3.1. Purchase Commitment. During the Term of this Agreement, LeadersOnline agrees to purchase from VerticalNet Banners and Newsletter Ads for a total price of at least *** ($***). All prices for such Banners and Newsletter Ads shall be offered to LeadersOnline at a ***% discount off of VerticalNet's then current prices for similar Banners or Newsletters Ads. All purchases shall be subject to VerticalNet's standard terms and conditions governing advertising on VerticalNet Sites. + + 3.2. Purchase Requirements. LeadersOnline agrees to purchase at least *** ($***) of such Banners and Newsletter Ads in each calendar quarter after the + +Source: LEADERSONLINE INC, S-1/A, 4/27/2000 + + + + + +Effective Date (prorated for any partial quarters) until a total of $*** have been purchased, provided, the total dollar amount purchased by LeadersOnline in any calendar quarter shall not consist of greater than ***% (in dollars) of either Banners or Newsletter Ads until a total of $*** has been purchased. + + 3.3. Advertisement Placement. VerticalNet shall use commercially reasonable efforts to place a Banner purchased in accordance with Section 3.1 [Purchase Commitment] on the HR Site Home Page for a period of 6 months on a rotating, rather than fixed, basis. In addition, as part of the purchase commitment set forth in Section 3.1 [Purchase Commitment], VerticalNet shall provide LeadersOnline up to $*** worth of Banner placements on the Home Page of other VerticalNet Sites of LeadersOnline's choice. All Banner and Newsletter Ad placements shall be in locations mutually agreeable to the Parties, subject to space limitations and other contractual commitments of VerticalNet. + +___________ *** Omitted pursuant to a confidential treatment request filed separately filed separately. + + 4 + +4. EMPLOYER SPOTLIGHTS + + 4.1. Development. VerticalNet shall develop, host, display and maintain Employer Spotlights in each of its Online Communities containing information supplied by LeadersOnline. Each Employer Spotlight shall contain a LeadersOnline Mark, text information describing LeadersOnline and a hypertext Link to the LeadersOnline Site. + + 4.2. LeadersOnline Information. Upon execution of this Agreement, LeadersOnline shall supply VerticalNet with a graphical image in electronic form of its LeadersOnline Mark, a text file containing information describing LeadersOnline and the URL to which the hypertext Link shall be directed. VerticalNet shall use commercially reasonable efforts to launch the Employer Spotlights as soon as practicable after the Effective Date of this Agreement. VerticalNet may, in its sole discretion, reject or edit any text or other materials supplied by LeadersOnline for the creation of the LeadersOnline Employer Spotlights; provided that any edits will be subject to the prior approval of LeadersOnline. The design and appearance of the Employer Spotlights shall be determined by VerticalNet in its sole discretion. + + 4.3. Information License. LeadersOnline hereby grants VerticalNet a non- exclusive, nontransferable, royalty-free right and license for the Term of this Agreement to use, copy or modify the LeadersOnline Mark, text describing LeadersOnline and the URL address of the LeadersOnline Site for the design and display of the LeadersOnline Employer Spotlights, provided, VerticalNet shall not alter the appearance of the LeadersOnline Mark without the consent of LeadersOnline. + +5. RESUME BANK + + 5.1. Access License. Subject to the limitations set forth in Section 5.2 [Restrictions] hereof, VerticalNet hereby grants to LeadersOnline a non-exclusive, nontransferable right and license to access the Resume Bank. The foregoing license shall be for the limited purpose of contacting individuals posting resumes on VerticalNet's Career Centers ("Candidates") to inquire about interest in employment opportunities available through the LeadersOnline Services. + + 5.2. Restrictions. Any information concerning a Candidate contained in a resume included in the Resume Bank shall not be provided to any third party by LeadersOnline, including corporate Affiliates of LeadersOnline, without the written consent of the individual whose information would be disclosed. LeadersOnline shall limit contact with a Candidate to either one phone contact or one e-mail contact per calendar quarter, unless expressly agreed to by the Candidate. LeadersOnline shall immediately cease all contact upon the request of the Candidate. All information concerning a Candidate, whether in paper or electronic form, and whether originally contained in the Resume Bank or derived from information contained in the Resume Bank, shall be immediately returned to VerticalNet upon the termination of this Agreement. All information contained in the Resume Bank shall be handled by LeadersOnline in accordance with VerticalNet's standard Privacy Policy as it may be posted on the VerticalNet Sites from time to time. The foregoing restrictions shall cease to apply from and after the time that a Candidate registers through an online form or takes other affirmative action to become a member of the LeadersOnline "Candidate Community." + + 5 + +6. THE COMMERCIAL TERMS + + 6.1. Fees. As set forth in Section 6.2 [Payment of Fees], LeadersOnline shall pay to VerticalNet the following: + + 6.1.1. Slotting fees for the Employer Spotlights of $***; + + 6.1.2. Banner and Newsletter Ad sponsorship fees of $*** as provided in Section 3.1 [Purchase Commitment]; and + + 6.1.3. A license fee of $*** for access to the Resume Bank. + + 6.2. Payment of Fees. LeadersOnline shall pay the fees set forth in Section 6.1 [Fees] to VerticalNet as follows: + + 6.2.1. $*** upon the Effective Date of this Agreement; + + 6.2.2. $*** within 90 days after the Effective Date; + + 6.2.3. $*** within 180 days after the Effective Date; + + 6.2.4. $*** within 270 days after the Effective Date; and + + 6.2.5. $*** within 360 days after the Effective Date. + + 6.3. Revenue Sharing. + + 6.3.1. LeadersOnline shall pay VerticalNet *** percent (***%) of LeadersOnline- VerticalNet Revenue, payable to VerticalNet on or before the fifteenth day of the calendar month immediately following the month in which + +Source: LEADERSONLINE INC, S-1/A, 4/27/2000 + + + + + +such revenue was received by LeadersOnline. Such payments shall be accompanied by a statement containing reasonable detail of the number of VerticalNet-Leaders Online Clients generated during the month, the type and number of transactions from which the LeadersOnline VerticalNet Revenue was derived, the total LeadersOnline VerticalNet Revenue for such period and the total fees payable to VerticalNet pursuant to this Section 6.3.1 [Revenue Sharing]. + + 6.3.2. LeadersOnline shall pay VerticalNet a one time fee for each Candidate who is offered and accepts employment as a result of a contact made by LeadersOnline (each a "Placement"). The fee shall be payable upon receipt by LeadersOnline of its payment for the Placement, and shall be nonrefundable. Fees shall be based upon the annual salary (or hourly rate multiplied by 2080) of the Candidate accepting employment in the Placement in accordance with the following schedule: + + 6.3.2.1. $*** for Placements involving annual salaries of less than $***; + + 6.3.2.2. $*** for Placements involving annual salaries of $*** up to and including $***; and + +___________ *** Omitted pursuant to a confidential treatment request filed separately. + + 6 + + 6.3.2.3. $*** for Placements involving annual salaries of $*** or greater. + + 6.3.3. VerticalNet shall institute procedures to track information of Users of the VerticalNet Sites that utilize a Link to access the LeadersOnline Site. LeadersOnline agrees to add a request in its standard registration form to identify those Users who have accessed the LeadersOnline Site based upon information contained in any promotional materials with respect to LeadersOnline on a VerticalNet Site, including any Banner, Newsletter Ad or Employer Spotlight identifying LeadersOnline, and to maintain such information in a form that can be examined by VerticalNet pursuant to Section 6.6 [Audits]. + + 6.3.4. If government regulations prevent LeadersOnline from sharing any revenues associated with LeadersOnline Services, VerticalNet and LeadersOnline shall negotiate in good faith a compensation structure that seeks to provide VerticalNet with compensation equal to that set forth in Sections 6.3.1 [Revenue Sharing]. and 6.3.2. + + 6.4. Taxes. All payments required under this Agreement are exclusive of federal, state, local and foreign taxes, duties, tariffs, levies and similar assessments. When applicable, such taxes shall appear as separate items on a Party's invoice or statement to the other Party. Payment of such taxes or charges shall be the responsibility of the Party whose obligation it is under this Agreement to make the payment in respect of which such taxes are assessed, excluding any taxes based upon the other Party's net income. In lieu thereof, a Party shall provide the other Party with a tax or levy exemption certificate acceptable to the taxing or levying authority. + + 6.5. Guaranteed Revenues. VerticalNet agrees to guarantee that, during the initial Term of this Agreement, LeadersOnline shall earn LeadersOnline- VerticalNet Revenue of at least *** Dollars ($***) (the "Guaranteed Amount"), subject to the provisions of this Section 6.5 [Guaranteed Revenues]. *** Within thirty (30) days after the end of the initial Term, LeadersOnline shall submit a statement showing a reasonably detailed accounting of the LeadersOnline-VerticalNet Revenue received during the initial Term (or earned during the initial Term and paid within 30 days thereafter) along with payment of all such amounts up to the Guaranteed Amount. In the event this Agreement is terminated in accordance with Section 7.1 [DEFINITIONS], LeadersOnline shall make a payment of all amounts of LeadersOnline- VerticalNet Revenues received through the date of termination, up to the amount of the Guaranteed Amount ***. + + 6.6. Audits. During the 12 month period following the payment of any amount due under this Article 6, VerticalNet or its representative shall have the right to audit LeadersOnline's financial and other pertinent records relating to such payment in order to verify the amount of the payments owed and/or paid. If the amount owed by LeadersOnline to VerticalNet was underpaid, the additional amount owed shall be paid to VerticalNet within 15 days of notice of such underpayment to LeadersOnline. If the amount owed by LeadersOnline to VerticalNet was underpaid in excess of 10% of the amount owed, the fees of such audit shall also be paid to VerticalNet within 15 days of notice of such to LeadersOnline. If the amount owed by LeadersOnline to + +___________ *** Omitted pursuant to a confidential treatment request filed separately. + + 7 + +VerticalNet was overpaid, the excess amount paid shall be returned by VerticalNet within 15 days of notice of such overpayment. VerticalNet shall give reasonable advance notice to LeadersOnline of such audit and each audit shall be conducted in a manner that does not cause unreasonable disruption to the conduct of business by LeadersOnline. The results of any such audit shall be deemed to be Confidential Information and may not be disclosed by either Party or its certified public accountants except as may be necessary to enforce such Party's rights. Any dispute as to the amount of an underpayment or overpayment shall be resolved in accordance with Article 8, below. + + 6.7. Interest. All payments not paid by the date such payments are due shall bear interest from the due date to the date payments are actually paid at the lower of (a) 1% per month or (b) the maximum rate permitted by law. + +7. TERMINATION AND RENEWAL. + + 7.1. Either Party may terminate this Agreement immediately upon written notice to the other Party in the event of any material breach of a term of this Agreement by such other Party that remains uncured 30 days after notice of such breach was received by such other Party or, if the breach is not reasonably capable of cure within 30 days, such longer period, not to exceed 60 days, so long as the cure is commenced within the 30-day period and thereafter is diligently prosecuted to completion as soon as possible and in any event within 60 days. + +Source: LEADERSONLINE INC, S-1/A, 4/27/2000 + + + + + + 7.2. Upon termination or expiration of this Agreement, (i) LeadersOnline shall no longer have the right to use any VerticalNet Mark, (ii) VerticalNet shall no longer have the right to use any LeadersOnline Mark; (iii) all Links between the VerticalNet Sites and the LeadersOnline Site shall be removed; (iv) VerticalNet shall remove all LeadersOnline Employer Spotlights from its Sites; (v) VerticalNet shall cease displaying or transmitting all Banners and Newsletter Ads of LeadersOnline; and (vi) LeadersOnline shall return all information concerning Candidates in accordance with Section 5.2 of this Agreement. + + 7.3. Following expiration or termination of this Agreement, the terms and provisions of Section 6 above shall continue to govern LeadersOnline's payment obligations. Following termination, LeadersOnline shall provide VerticalNet with a final accounting with respect to this Agreement and tender payment of amounts due under Section 6 at the next scheduled payment date. LeadersOnline shall be obligated to pay VerticalNet the fees set forth in Section 6.3.2 [Revenue Sharing] for any Placement that occurs within six (6) months following termination of this Agreement. + + 7.4. LeadersOnline shall have the option, subject to VerticalNet's approval exercised in its sole and absolute discretion, to extend the Term of this Agreement for an additional 12 months (a "Renewal Term") on such terms and conditions as may be mutually agreed upon by the Parties. To exercise this option, LeadersOnline must notify VerticalNet in writing of its election no later than 90 days prior to the expiration of the initial Term. Unless VerticalNet notifies LeadersOnline of its intention to extend the initial Term of this Agreement for an additional year within 30 days of receiving such notice the Agreement shall terminate in accordance with the terms hereof. + + 8 + +8. DISPUTE RESOLUTION + + 8.1. Negotiation and Escalation. If any controversy or claim arises relating to this Agreement, the Parties will attempt in good faith to negotiate a solution to their differences, including progressively escalating any controversy or claim through senior levels of management. If negotiation does not result in a resolution within 30 days of the date one Party first notifies the other of the controversy or claim, either Party may resort to arbitration under Section 8.2 [Arbitration]. + + 8.2. Arbitration. Any controversy or claim between the Parties concerning any breach or alleged breach of this Agreement or performance or nonperformance of any obligation under this Agreement or otherwise with respect to this Agreement which cannot be resolved by negotiation will be resolved by binding arbitration under this Section 8.2 [Arbitration] and the then-current Commercial Rules and supervision of the American Arbitration Association (the "AAA"). If any part of this Section 8.2 [Arbitration] is held to be unenforceable, it will be severed and will not affect either the duty to arbitrate or any other part of this Section 8.2 [Arbitration]. The arbitration will be held in Philadelphia, Pennsylvania, before a sole disinterested arbitrator who is knowledgeable in business information and the Internet and experienced in handling commercial disputes. The arbitrator shall be appointed jointly by the Parties hereto within 30 days following the date on which the arbitration is instituted. If the Parties are unable to agree upon the arbitrator within such 30-day period, the AAA shall be instructed to select such arbitrator within 15 days thereafter. The arbitrator's award will be final and binding and may be entered in any court having jurisdiction. The arbitrator will not have the power to award punitive or exemplary damages, or any damages excluded by, or in excess of, any damage limitations expressed in this Agreement. Issues of arbitrability will be determined in accordance solely with the federal substantive and procedural laws relating to arbitration; in all other respects, the arbitrator will be obligated to apply and follow the substantive law of the Commonwealth of Pennsylvania. + + 8.3. Equitable Relief. Notwithstanding anything to the contrary in this Agreement, in the event of an alleged violation of Article 9 of this Agreement by either Party, the Party alleging such a violation may seek temporary and permanent injunctive or other appropriate equitable relief from any court of competent jurisdiction pending appointment of an arbitrator. The Party requesting such relief shall simultaneously file a demand for arbitration of the dispute, and shall request that the AAA proceed under its rules for an expedited hearing. + + 8.4. Costs. Unless the arbitrator, if any, determines otherwise, each Party will bear its own attorneys' fees and other costs associated with the negotiation and arbitration provided for by this Article 8, except that costs and expenses of the arbitrator shall be shared equally. If court proceedings to stay litigation or compel arbitration are necessary, the Party who unsuccessfully initiates or opposes such proceedings will pay all associated costs, expenses and attorneys' fees that are reasonably incurred by the other Party. To the extent that any claim in arbitration relates to the collection of amounts owed under Article 6, the Party entitled to collect such amounts shall be entitled to recover all reasonable costs of collection, including expenses and attorneys' fees that are reasonably incurred. + + 8.5. Two Year Limitation. Except for claims under Sections 11.4 [Indemnification by LeadersOnline] and 11.5 [Indemnification by VerticalNet] hereof, neither Party may bring a claim or action regardless of form, arising out of or related to + + 9 + +this Agreement, including any claim of fraud or misrepresentation, more than two years after the cause of action accrues or becomes known, whichever is later. + + 8.6. Confidentiality. In order to facilitate the resolution of controversies or claims between the Parties with respect to each Party hereto, such controversies or claims, including details regarding negotiations, arbitration and settlement terms, shall be treated as Confidential Information of the other Party hereto in accordance with Article 9. + + 8.7. Remedial Measures. In the event of (a) any material remediable breach of this Agreement by the other Party which remains uncured 30 days after notice of such breach (other than a breach of a payment obligation) was received by the other Party or (b) any material breach which cannot be cured, the non-breaching Party may take reasonable remediable measures upon prior written notice and at the cost and expense of the breaching Party without prejudice and in addition to any other rights arising from such breach. In addition, the non-breaching Party shall take reasonable steps to mitigate damages arising out of such breach. + +Source: LEADERSONLINE INC, S-1/A, 4/27/2000 + + + + + +9. CONFIDENTIALITY + + 9.1. Confidentiality Obligations. Except as permitted elsewhere under this Agreement, each Party agrees to take Reasonable Steps (as defined below) (a) to receive and maintain the Confidential Information of the other Party in confidence and (b) not to disclose such Confidential Information to any third parties, provided, the receiving Party may disclose such Confidential Information to its employees, representatives and agents who have a need to know such information for purposes of carrying out the terms of this Agreement. Neither Party hereto shall use all or any part of the Confidential Information of the other Party for any purpose other than to perform its obligations under this Agreement. The Parties will take Reasonable Steps (as defined below) to ensure that their employees, representatives and agents comply with this provision. As used herein, "Reasonable Steps" means at least the same degree of care that the receiving Party uses to protect its own Confidential Information, and, in any event, no less than reasonable care. + + 9.2. Exclusions. "Confidential Information" does not include information that (a) is or becomes publicly available through no fault of the receiving Party; (b) was already known to the receiving Party at the time it was disclosed to the receiving Party, as evidenced by records of the receiving Party; (c) is independently developed by employees of the receiving Party who had no knowledge of or access to such information, as evidenced by records of the receiving Party; (d) is received from a third party who is under no obligation of confidentiality to the disclosing Party; or (e) must be disclosed pursuant to applicable laws, rules or regulations; provided, however, that the receiving Party first gives the disclosing Party notice and a reasonable opportunity to secure confidential protection of such Confidential Information. + + 9.3. Termination. Subject to Section 12.12 [Survival], upon termination of this Agreement, all Confidential Information shall be returned to the disclosing Party or, at the request of the disclosing Party, destroyed unless otherwise specified or permitted elsewhere under this Agreement. The confidentiality obligations contained in this Article 9 shall survive termination of this Agreement for a period of three (3) years. + + 10 + + 9.4. Injunction. Each Party acknowledges and agrees that the provisions of this Article 9 are reasonable and necessary to protect the other Party's interests in its Confidential Information, that any breach of the provisions of this Article 9 may result in irreparable harm to such other Party, and that the remedy at law for such breach may be inadequate. Accordingly, in the event of any breach or threatened breach of the provisions of this Article 9 by a Party hereto, the other Party, in addition to any other relief available to it at law, in equity or otherwise, shall be entitled to seek temporary and permanent injunctive relief restraining the breaching Party from engaging in and/or continuing any conduct that would constitute a breach of this Article 9, without posting a bond or other security. + + 9.5. Publicity. Except as may be required by law in which case a party will provide as much advance notice as reasonably possible, neither Party will originate any press release concerning the relationship between the Parties or the transactions described in this Agreement without the prior written consent of the other Party, which consent shall not be unreasonably withheld or delayed. Notwithstanding the foregoing, as soon as reasonably practicable following the Effective Date, VerticalNet and LeadersOnline shall jointly issue a press release with respect to entering into this Agreement. + + 9.6. User Data. LeadersOnline shall provide VerticalNet with User Data on each User that enters the LeadersOnline Site through a Link from a VerticalNet Site and submits information through the LeadersOnline Site by sending an email with such information to an email address designated by VerticalNet at the time the request occurs. User Data shall be maintained by each Party as Confidential Information of the other Party during the Term and 5 years thereafter, provided such User Data may be disclosed only as part of an aggregation or analysis of all User Data but not as independent data. Upon termination of the Agreement, VerticalNet and LeadersOnline shall jointly own all User Data. Neither Party shall use the User Data other than in accordance with the VerticalNet privacy policy and all applicable laws during the Term and thereafter. + +10. REPRESENTATIONS AND WARRANTIES + + 10.1. Representations and Warranties. Each Party hereby represents, covenants and warrants that: + + 10.1.1. It has the corporate power to enter into this Agreement and to grant the rights and licenses granted herein and to otherwise perform this Agreement; + + 10.1.2. It is not a Party to any agreement or understanding and knows of no law or regulation that would prohibit it from entering into and performing this Agreement or that would conflict with this Agreement; + + 10.1.3. When executed and delivered by it, this Agreement will constitute a legal, valid and binding obligation of it, enforceable against it in accordance with this Agreement's terms, except as enforcement may be limited by laws or regulations relating to bankruptcy, insolvency and creditors rights or by principles of equity; and + + 10.1.4. To the best of its knowledge, its own Site and any information or materials supplied to the other Party hereunder does not and will not (i) contain any + + 11 + + known viruses, Trojan Horse, worm or harmful code the purpose of which is to disable or interrupt the operating of a computer system or destroy, erase or otherwise harm any data, software or hardware, (ii) contain any false, misleading, libelous or defamatory statements, (iii) constitute an invasion of the rights of privacy or publicity of any third party, (iv) violate any applicable laws, rules and regulations or (v) infringe, violate or misappropriate any Intellectual Property Rights of any third party. + +11. DISCLAIMER OF WARRANTY, LIMITATION OF LIABILITY AND INDEMNIFICATION. + +Source: LEADERSONLINE INC, S-1/A, 4/27/2000 + + + + + + 11.1. Disclaimer of Warranties by VerticalNet. EXCEPT AS EXPRESSELY SET FORTH IN THIS AGREEMENT, VERTICALNET HEREBY DISCLAIMS ALL WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, WITH RESPECT TO THE VERTICALNET SITES AND ALL MATERIALS CONTAINED THEREIN OR PROVIDED HEREUNDER, INCLUDING BUT NOT LIMITED TO ANY IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. VERTICALNET EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES AS TO THE USER INTERFACE OR USER EXPERIENCE ASSOCIATED WITH THE VERTICALNET SITES AND RESERVES THE RIGHT, IN ITS SOLE DISCRETION, TO MODIFY THE PLACEMENT OF ALL LINKS, URLS AND PROPRIETARY FEATURES; PROVIDED, HOWEVER, THAT IN THE EVENT VERTICALNET REDESIGNS THE USER INTERFACE, SUCH LINKS, URLS AND PROPRIETARY FEATURES SHALL RECEIVE PLACEMENT SUBSTANTIALLY SIMILAR TO THE ORIGINAL DESIGN. + + 11.2 Disclaimer of Warranties by LeadersOnline. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, LEADERSONLINE HEREBY DISCLAIMS ALL WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, WITH RESPECT TO THE LEADERSONLINE SITE AND ALL MATERIALS CONTAINED THEREIN OR PROVIDED HEREUNDER, INCLUDING BUT NOT LIMITED TO ANY IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. LEADERSONLINE EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES AS TO THE USER INTERFACE OR USER EXPERIENCE ASSOCIATED WITH THE LEADERSONLINE SITE AND RESERVES THE RIGHT, IN ITS SOLE DISCRETION, TO MODIFY THE PLACEMENT OF ALL LINKS, URLS AND PROPRIETARY FEATURES; PROVIDED, HOWEVER, THAT IN THE EVENT LEADERSONLINE REDESIGNS THE USER INTERFACE, SUCH LINKS, URLS AND PROPRIETARY FEATURES SHALL RECEIVE PLACEMENT SUBSTANTIALLY SIMILAR TO THE ORIGINAL DESIGN. + + 11.3. Limitation of Liability. EXCEPT IN CONNECTION WITH A BREACH BY EITHER PARTY OF ARTICLE 9 OR SECTION 10.1.4 [Representations and Warranties] (v) AND THE INDEMNIFICATION OBLIGATIONS OF LEADERSONLINE UNDER SECTION 11.4(i)(c) [Indemnification by LeadersOnline] AND THE INDEMNIFICATION OBLIGATIONS OF VERTICALNET UNDER SECTION 11.5(i)(c) [Indemnification by VerticalNet], NEITHER PARTY WILL BE LIABLE FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL, EXEMPLARY OR INCIDENTAL DAMAGES ARISING OUT OF OR RELATED TO THIS AGREEMENT, HOWEVER CAUSED AND UNDER ANY THEORY + + 12 + +OF LIABILITY (INCLUDING NEGLIGENCE), EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. + + 11.4. Indemnification by LeadersOnline. Subject to Section 11.6 [Procedure], LeadersOnline shall (i) defend at its sole expense VerticalNet and its officers, directors, employees and agents from and against any action, suit, proceeding or investigation brought by a third party and caused by, relating to, based upon, arising out of or in connection with (a) any breach by LeadersOnline of the representations, warranties or agreements made by it under this Agreement, (b) negligence, recklessness or intentional misconduct on the part of LeadersOnline or its officers, directors, employees, agents or consultants, or (c) any claim that any portion of the LeadersOnline Site or any materials provided to VerticalNet pursuant to this Agreement violates, infringes or misappropriates any Intellectual Property Right of any third party and (ii) pay all authorized costs, expenses and disbursements incurred in such defense, and any damages, liabilities, obligations, penalties or judgments awarded in any such action, or any settlement amount agreed to by LeadersOnline. + + 11.5. Indemnification by VerticalNet. Subject to Section 11.6 [Procedure], VerticalNet shall (i) defend at its sole expense LeadersOnline and its officers, directors, employees and agents from and against any action, suit, proceeding or investigation brought by a third party, caused by, relating to, based upon, arising out of or in connection with (a) any breach by VerticalNet of the representations, warranties or agreements made by it under this Agreement, (b) negligence, recklessness or intentional misconduct on the part of VerticalNet or its officers, directors, employees, agents or consultants, or (c) any claim that any portion of the VerticalNet Site or any materials provided by VerticalNet to LeadersOnline pursuant to this Agreement violates, infringes or misappropriates any Intellectual Property Right of any third party and (ii) pay all authorized costs, expenses and disbursements incurred in such defense, and any damages, liabilities, obligations, penalties or judgments awarded in any such action, or any settlement amount agreed to by VerticalNet. + + 11.6. Procedure. If any action shall be brought against a Party in respect to which indemnity may be sought from the other Party pursuant to the provisions of this Article 11, the Party seeking indemnity (the "Indemnitee") shall follow the procedures in this Section. If an Indemnitee receives any notice of a claim or other allegation with respect to which the other Party (the "Indemnitor") has an obligation of indemnity hereunder, then the Indemnitee will, as soon as reasonably possible after receipt of such notice, give the Indemnitor written notice of such claim or allegation setting forth in reasonable detail the facts and circumstances surrounding the claim. The Indemnitee will not make any payment or incur any costs or expenses with respect to such claim, except as requested by the Indemnitor or as necessary to comply with this procedure. The Indemnitee will not make any admission of liability or take any other action that limits the ability of the Indemnitor to defend the case. The Indemnitor shall immediately assume the full control of the defense or settlement of such claim or allegation, including the selection and employment of counsel, and shall pay all authorized costs and expenses of such defense. The Indemnitee will fully cooperate, at the expense of the Indemnitor, in the defense or settlement of the claim. The Indemnitee shall have the right, at its own expense, to employ separate counsel and participate in the defense or settlement of the claim; provided that the Indemnitor shall have no liability for costs or expenses incurred by the Indemnitee, except to the extent authorized by the Indemnitor pursuant to this procedure. The + + 13 + +Indemnitor will not agree to any settlement that does not include a complete release of the Indemnitee. + + 11.7. Essential Part of Bargain. The Parties acknowledge that the disclaimers and limitations set forth in this Article 11 are an essential element of this Agreement between the Parties and that the Parties would not have entered into this Agreement without such disclaimers and limitations. + +12. MISCELLANEOUS + + 12.1. Intellectual Property. + + 12.1.1. Except for the express rights granted to LeadersOnline under this Agreement, LeadersOnline acknowledges and agrees that the Intellectual Property of VerticalNet is and shall remain the sole property of VerticalNet and nothing in this Agreement shall confer in LeadersOnline any right of ownership or license rights in VerticalNet's Intellectual Property, including all + +Source: LEADERSONLINE INC, S-1/A, 4/27/2000 + + + + + +Intellectual Property arising from or created as a result of VerticalNet's performance of its obligations under this Agreement. In addition, LeadersOnline shall not now or in the future contest the validity of VerticalNet's ownership of its Intellectual Property; provided, however, that LeadersOnline may contest the validity of VerticalNet's Intellectual Property in any proceeding brought against LeadersOnline alleging infringement or misappropriation of VerticalNet's Intellectual Property. + + 12.1.2. Except for the express rights granted to VerticalNet under this Agreement, VerticalNet acknowledges and agrees that the Intellectual Property of LeadersOnline is and shall remain the sole property of LeadersOnline and nothing in this Agreement shall confer in VerticalNet any right of ownership or license rights in LeadersOnline's Intellectual Property, including all Intellectual Property arising from or created as a result of LeadersOnline's performance of its obligations under this Agreement. In addition, VerticalNet shall not now or in the future contest the validity of LeadersOnline's ownership of its Intellectual Property; provided, however, that VerticalNet may contest the validity of LeadersOnline's Intellectual Property in any proceeding brought against VerticalNet alleging infringement or misappropriation of LeadersOnline's Intellectual Property. + + 12.2. Parallel Agreement. VerticalNet agrees that during the term of this Agreement, it shall not enter into an agreement with Futurestep, Inc. to provide promotional opportunities to Futurestep throughout all of the VerticalNet Online Communities, nor enter into any agreement with Futurestep, Inc. for the joint marketing of each other's Sites or services. + + 12.3. Governing Law. This Agreement shall be governed by and interpreted under the laws of the Commonwealth of Pennsylvania without regard to its conflicts of law provisions. Subject to the provisions of Section 8, both Parties consent and submit to the exclusive personal jurisdiction of the United States District Courts and the state courts of the Commonwealth of Pennsylvania in and for Montgomery County, Pennsylvania + + 12.4. No Assignment. Except as otherwise set forth herein, neither Party shall transfer, assign or cede any rights or delegate any obligations hereunder, in whole or in part, whether voluntarily or by operation of law, without the prior written consent of the other Party, + + 14 + +which consent may be withheld at the other Party's reasonable business discretion; provided, however, that VerticalNet may transfer this Agreement without the prior written consent of LeadersOnline to an Affiliate of VerticalNet, or to the surviving Party in a merger or consolidation, or to a purchaser of all or substantially all of its assets. + + 12.5. Good Faith. The Parties undertake to display to each other the utmost good faith, consistent with their respective rights and obligations set forth in this Agreement. + + 12.6. Independent Contractors. In connection with this Agreement, each Party is an independent contractor. This Agreement does not, and shall not be construed to, create an employer-employee, agency, joint venture or partnership relationship between the Parties. Neither Party shall have any authority to act for or to bind the other Party in any way, to alter any of the terms or conditions of any of the other Party's standard forms of invoices, sales agreements, warranties or otherwise, or to warrant or to execute agreements on behalf of the other or to represent that it is in any way responsible for the acts, debts, liabilities or omissions of the other Party. + + 12.7. Notices. All notices, reports, payments and other communications required or permitted to be given under this Agreement (each, a "Notice") shall be in writing and shall be given either by personal delivery against a signed receipt, by express delivery using a nationally recognized overnight courier, or by facsimile. All Notices shall be properly addressed as follows, or to such other addresses as may be specified in a Notice given hereunder: + +If to VerticalNet: + +Attn: General Counsel or Chief Financial Officer VerticalNet, Inc. 700 Dresher Road, Suite 100 Horsham, Pennsylvania 19044 Tel No.: (215) 315-3200 Fax No.: (215) 784-1960 Email: legal@verticalnet.com + +with a copy to: + +Michael J. Hagan Executive Vice President VerticalNet, Inc. 700 Dresher Road, Suite 100 Horsham, Pennsylvania 19044 Phone No.: (215) 315-3115 Fax No.: (215) 784-1960 Email: MHagan@verticalnet.com + +If to LeadersOnline: + +Michael T. Christy LeadersOnline, Inc. + + 15 + +18401 Von Karman Ave. Suite 500 Irvine, California 92612 Phone No.: (949) 752-1000 Fax No.: (949) 752-1085 + +with a copy to: + +Ronald S. Beard, Esq. Gibson, Dunn & Crutcher LLP Jamboree Center, 4 Park Plaza + +Source: LEADERSONLINE INC, S-1/A, 4/27/2000 + + + + + +Irvine, CA 92614 Phone No.: (949) 451-4089 Fax No.: (949) 475-4730 + +A Notice shall be deemed to be effective upon personal delivery or, if sent via overnight delivery, upon receipt thereof. A Notice sent via facsimile is deemed effective on the same day (or if such day is not a business day, then on the next succeeding business day) if such facsimile is sent before 3:00 p.m. prevailing Eastern Time and on the next day (or if such day is not a business day, then on the next succeeding business day) if such Notice is sent after 3:00 p.m. prevailing Eastern Time. + + 12.8. Amendment or Modification. No subsequent amendment, modification or waiver of any of the provisions of this Agreement shall be effective unless in writing and signed by the Parties. + + 12.9. Entire Agreement. This Agreement sets out the entire agreement between the Parties with respect to the subject matter of this Agreement and supersedes all prior agreements, proposals, arrangements and communications, whether oral or written, with respect to the subject matter hereof. + + 12.10. Severability. If any term or provision of this Agreement is held by a tribunal of competent jurisdiction to be illegal, invalid, or otherwise unenforceable in any jurisdiction, then to the fullest extent permitted by law (a) the same shall not affect the other terms or provisions of this Agreement, (b) such term or provision shall be deemed modified to the extent necessary in the tribunal's opinion to render such term or provision enforceable, and the rights and obligations of the Parties shall be construed and enforced accordingly, preserving to the fullest extent the intent and agreements of the Parties set forth herein and (c) such finding of invalidity, illegality or unenforceability shall not affect the validity, legality or enforceability of such term or provision in any other jurisdiction. + + 12.11. No Waiver. Failure to enforce any term of this Agreement is not a waiver of future enforcement of that or any other term. No term or provision of this Agreement will be deemed waived and no breach excused unless such waiver or excuse is in writing and signed by the Party against whom enforcement of such waiver or excuse is sought. + + 12.12. Survival. Sections 5.2 [Restrictions], , 6.6, 6.7, 7.2, 7.3, 12.1, 12.3, 12.5, 12.6, 12.7, 12.9, 12.10, 12.11, 12.12, 12.14, 12.16 and 12.17 and Articles 8, 9, 10, 11, any payment obligations of the + + 16 + +Parties hereunder accruing prior to the date of termination; and any other provision herein expressly surviving termination or necessary to interpret the rights and obligations of the Parties in connection with the termination of the Term of this Agreement will survive the termination or expiration of this Agreement. + + 12.13. No Third Party Beneficiaries. Nothing in this Agreement is intended to confer benefits, rights or remedies unto any person or entity other than the Parties and their permitted successors and assigns. + + 12.14. Waiver of Jury Trial. Each Party hereby irrevocably waives all rights a Party may have to a trial by jury in any legal action or proceeding arising out of or in connection with this Agreement or the transactions contemplated hereby. + + 12.15. Titles. The headings appearing at the beginning of the Sections contained in this Agreement have been inserted for identification and reference purposes only and shall not be used to determine the construction or interpretation of this Agreement. The nomenclature of the defined terms in this Agreement shall only be used for the construction of this Agreement, and are not to be used for any other purpose, including, but not limited to, interpretation for accounting purposes. + + 12.16. Force Majeure. Neither Party shall be held to be in breach of this Agreement by reason of a force majeure event, including, but not limited to, act of God, delay in transportation, fire, flood, earthquake, storm, war, act of a public enemy, civil commotion or any law, rule, regulation, order or other action by any public authority or any other matter reasonably beyond a Party's control. To the extent failure to perform is caused by such a force majeure event, such Party shall be excused from performance hereunder so long as such event continues to prevent such performance, and provided the non-performing Party takes all reasonable steps to resume full performance, provided further that if such delay in performance exceeds 60 days, the other Party may terminate this Agreement upon written notice to the non-performing Party. + + 12.17. Compliance with Laws. Each Party shall comply with all prevailing laws, rules and regulations and obtain all necessary approvals, consents and permits required by the applicable agencies of the government of the jurisdictions that apply to its activities or obligations under this Agreement. + + 12.18. Execution in Counterparts, Facsimiles. This Agreement may be executed in one or more counterparts, each of which when delivered to the other Party shall be deemed an original and all of which together shall constitute one and the same instrument. This Agreement shall become binding when any one or more counterparts hereof, individually or taken together, bear the signatures of both Parties hereto. For the purposes hereof, a facsimile copy of this Agreement, including the signature pages hereto, shall be deemed an original. + + 17 + +IN WITNESS WHEREOF, the Parties to the Agreement by their duly authorized representatives have executed this Agreement as of the date first written above. + +VERTICALNET, INC. LeadersOnline, INC. + +By: /s/ James W. McKenzie, Jr. By: /s/ Michael T. Christy --------------------------------- -------------------------------- + +Name: James W. McKenzie, Jr. Name: MICHAEL T. CHRISTY ------------------------------- ------------------------------ + +Source: LEADERSONLINE INC, S-1/A, 4/27/2000 + + + + + +Title: Sr. Vice President Title: PRESIDENT ------------------------------- ------------------------------ + + 18 + +Source: LEADERSONLINE INC, S-1/A, 4/27/2000 \ No newline at end of file diff --git a/full_contract_txt/LegacyEducationAllianceInc_20141110_8-K_EX-10.9_8828866_EX-10.9_Endorsement Agreement.txt b/full_contract_txt/LegacyEducationAllianceInc_20141110_8-K_EX-10.9_8828866_EX-10.9_Endorsement Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..25caffba82a68fce97ce1dae6d920a09536ac955 --- /dev/null +++ b/full_contract_txt/LegacyEducationAllianceInc_20141110_8-K_EX-10.9_8828866_EX-10.9_Endorsement Agreement.txt @@ -0,0 +1,87 @@ +Exhibit 10.8 TALENT ENDORSEMENT AGREEMENT THIS SUPPLEMENTAL AGREEMENT is made as of this _____ day of ______________ 2013 by and between Tigrent Learning UK Limited of Boston House, 69 — 75 Boston Manor Road, Brentford, Middlesex, TW8 9.1J ("Company") and Celebrity Speakers of 90 High Street, Burnham, Buckinghamshire, SL1 7JT ("CSA") agent for Robbie Fowler ("Talent") in his individual capacity or his duly appointed Representative (collectively the "Parties"). WITNESSETH: WHEREAS, 1. Talent is currently a well-known public figure; 2. Company has entered into an agreement dated 2nd November 2012 with CSA ("Primary Agreement") to engage the services of the Talent to endorse the Company's new property training course "Property Academy" ("Property Training Course") to be launched in 2013 as specified in clause 5 of the schedule to the Primary Agreement. 3. Company is engaged in developing, creating and providing educational training, products and materials related to real estate, securities and options trading and investment, as well as general wealth building and investing strategies, principles and motivation. 4. It is hereby acknowledged by the Parties that the Company is desirous of acquiring the right and license to utilize Talent's name and brand, likeness and image to endorse by way of advertisement, promotion, and sale of a new property training brand ("Property Academy") to be launched by the Company and as defined in this Agreement and Talent is willing to grant such right and license as herein below provided. NOW, THEREFORE, in consideration of the mutual covenants set forth herein and for other good and valuable consideration, it is agreed as follows: 1. DEFINITIONS The following meanings shall apply to this agreement: 1. "Commencement Date" means: 1st January 2013. 2. "Materials" means: Power Point Presentations, Marketing Collaterals, Banners, Workbooks, Flyers or any other physical item required for the promotion and delivery of the Company's new Property Training Course "Property Academy". 3. "Product" means: The products and materials the Company develops, creates or provides in connection with its educational training, products and materials relating to the Property Training Course. 4. "Property" means: Talents name, initials, facsimile signature, photograph, video or images, likeness or other such pre-approved copy. + + + +Source: LEGACY EDUCATION ALLIANCE, INC., 8-K, 11/10/2014 + + + + + + + + 5. "Property Training Course" means: the property training course developed or to be developed by the Company to be called and marketed under the name/brand "Property Academy" or any other such name as agreed by the Parties. 6. "Territory" means: United Kingdom. 7. "Term" means: 1.5t January 2013 to 315t December 2013 or until terminated under the provisions of this Agreement or the Primary Agreement. 2. GRANT OF RIGHTS Subject to the terms and conditions and in consideration of the payments set forth herein and in the Primary Agreement, CSA as disclosed agent for Talent grants to Company from the Commencement Date the right and license during the Term of this Agreement in the Territory to use the "Property" in connection with the advertisement, promotion, and sale of the Property Training Course and the Product as well as the right to use such Property on the Product and related packaging. The above license grant shall apply to all material objects of the Property, in which the Property is fixed by any method now known or later developed, and from which the Property can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device. The parties further understand and agree that Company hereby reserves the right to display its copyright notice on advertisements, promotions or other materials as well as all Product, no matter what form or media, containing the Property subject always to all and any copyright or other interests of the Talent. CSA on behalf of Talent further grants and assigns to Company the right to enforce applicable copyright and intellectual property laws against third party infringers or malfeasors on Talent's behalf or in Talent's name. 2A. ADDITIONAL DUTIES AND PUBLIC APPEARANCES In accordance with the Primary Agreement, the Talent agrees that during the Term, he will make public appearances at the request of the Company, to include appearing at Company events and/or participating in photo shoots as requested by Company, not to exceed more than four such appearances or photo shoots per calendar year. Any public appearance and/or photo shoot must be approved by the Talent prior to his agreement to attend, which shall not be unreasonably withheld providing the Talent does not have any prior professional or other commitments and reasonable and adequate notice is given and received by CSA on behalf of Talent. The parties agree that Company will pay any necessary and reasonable travel and lodging expenses incurred by Talent in making such requested appearances as per "part 1" of the Primary Agreement. 3. TERM This Agreement shall be effective as of the date of execution by both parties. The period of license granted shall be for the Term and shall extend for a period of twenty four (24) months or until terminated as per clause 8 herein. It is agreed that the Term may be extended upon mutual agreement between the parties. + +2 + +Source: LEGACY EDUCATION ALLIANCE, INC., 8-K, 11/10/2014 + + + + + + + +4. COMPENSATION In consideration for the licenses granted hereunder, Company agrees to pay to CSA as follows: a. A [***]in the amount of [***]of Company's revenues from sales of the Property Training Course and all Products after deductions for VAT, returns, refunds b. Company shall be responsible for the tracking of sales of the Property Training Course and all Products containing the Property and providing to CSA: i. A monthly list of the sales of Property Training Course and Product (with supporting sales prices and reconciled reports). ii. Payment to CSA no later than thirty (30) days after receipt of invoice from CSA. CSA shall submit invoice to the Company no later than thirty (30) days after Company provides CSA with the list of the sales of Product (containing the Property with such supporting information that may be required or requested to be disclosed). c. CSA shall have the right to request an independent audit of the sales of the Product containing the Property which the Company agrees to assist within a reasonable period of time of such request. 5. REVIEW OF MATERIALS a. Talent shall have the right of approval in respect of all Product being proposed as any part of the Property appearing or integrated into it and all proposed use of the Property (including to whom the Property is distributed for sale if other than the general public) prior to public release and distribution. b. All Materials or any part thereof shall be sent by the Company to CSA for approval by Talent. c. Talent shall have seven (7) days following receipt of such Materials or any part thereof displaying the intended use of the Property to review and for CSA to provide to Company written approval for such use. d. In the event that Talent objects to the Products or any part thereof and/or any proposed use of the Property, CSA on behalf of Talent shall submit to Company, within seven (7) days following Company's official submission of materials, a written request for revisions. Talent shall not make any request for unreasonable revisions and shall not withhold consent for any proposed use of the Property unreasonably. e. In the event that Talent does not provide either written approval of materials or a written request for revisions of such materials containing a proposed use of the Property within ten (10) days following Company's submission of such materials to Talent for review, such non-response shall automatically be deemed to be an acceptance and approval of the proposed use of the Property. + +3 + +Source: LEGACY EDUCATION ALLIANCE, INC., 8-K, 11/10/2014 + + + + + + + + 6. RESERVATION OF RIGHTS a. Subject to the terms of this Agreement, Talent shall retain all rights in and to his name and in the Property, his right of publicity, and the endorsement and, whether during the Term or any extension thereof, Talent shall not be prevented from using, permitting, or licensing by whatever means ,others to use his name or endorsement in connection with the advertisement, promotion, and sale of any product or service other than the Product or those that are substantially similar to the Product, including but not limited to all real estate, securities and/or options trading and investment educational trainings, products, materials. Company and Talent agree that they shall take all necessary steps during the Term to protect the endorsement in connection with the advertisement, promotion, and sale of the Product, subject always to the Company bearing any costs or liabilities in taking such steps and fully indemnifying the Talent and his agent in respect thereof. b. It is understood and agreed that Talent shall retain all copyright and all other rights, title, and interest in the Property, including his likeness, name, and/or trademarks, where applicable, except as licensed hereunder. c. Subject to the terms of this Agreement and in particular 5 above, it is understood and agreed that Company shall retain all right, title, and interest, including but not limited to all copyright interest, in and to the Product and any advertising or marketing collateral and/or materials created utilizing the Property under the license granted herein. The Company agrees to defend and fully indemnify the Talent and/or his agents in respect of such rights retained by the Company. d. The parties agree to execute any documents reasonably requested by the other party to affect any of the above provisions. The Company agrees to defend and fully indemnify the Talent and/or his agents of any costs that may be incurred in complying with this provision. 7. REPRESENTATIONS, WARRANTIES AND INDEMNITY a. Talent represents and warrants that he has not granted nor will he grant to any other party any right, permission, or license to use the Property in connection with the advertisement, sale, or promotion of the Product or in connection with products that are identical or substantially similar to the Product. b. Talent further represents and warrants to Company that he has the full right, power, and authority to grant the Property herein. c. Talent further represents and warrants that he has not misrepresented or concealed anything with respect to his background that may have a prejudicial effect on the value of the endorsement, that he is in good health, and that he has not engaged nor will he engage during the Term of this Agreement in any activity (criminal or otherwise) that could potentially have a negative impact on the Product. + +4 + +Source: LEGACY EDUCATION ALLIANCE, INC., 8-K, 11/10/2014 + + + + + + + + d. Company agrees to defend, indemnify, and hold Talent harmless against all costs, expenses, and losses (including reasonable attorney fees and costs) incurred through claims of third parties against Talent based on the manufacture or sale of the Product including, but not limited to, actions founded on product liability. e. Talent agrees to defend, indemnify, and hold Company, and its officers, directors, agents, and employees, harmless against all costs, expenses, and losses (including reasonable legal fees and costs) incurred through claims of third parties against Company based on a breach by Talent of any representation and/or warranty made in this Agreement or with respect to any third-party claims for infringement involving the use of the Property by Company. 8. TERMINATION a. Except as provided in this Section 8, this Agreement shall terminate immediately upon the earlier of (i) the Term of this Agreement or (ii) dissolving of Company and/or Company's complete cessation of doing all business. b. Either party shall have the right to terminate this Agreement immediately in the event that Talent or the Company does any of the following: i. Engages in illegal, immoral, or criminal conduct resulting in a felony conviction; ii. Misrepresents or conceals anything in their background that could be detrimental to the value of the endorsement being made; iii. Engages in conduct contrary to the best interests of the other party; iv. Engages in conduct that reasonably offends the sensitivities of a significant portion of the population; or v. Engages in conduct that could bring the other party into public disrepute. c. Either party may terminate this provision at any time during the Term, in the event either party is guilty of a material breach of this Agreement, having been given notice of such breach and the breach not being rectified within a reasonable period of time. 9. POST-TERMINATION RIGHTS a. Talent agrees that Company shall, for a period of nine (9) months (Sell-Off Period) following the effective date of termination, have the right to continue to sell Product bearing the Property and/or utilize advertising materials and collateral bearing the Property. Such sales and use shall be made subject to all the provisions of this Agreement and in particular clause 4 hereof. b. Upon the expiration or termination of this Agreement, all rights granted to Company under this Agreement shall forthwith terminate and immediately revert to Talent, and Company shall, following the completion of the Sell-Off Period discontinue all use of and reference to the Property. + +5 + +Source: LEGACY EDUCATION ALLIANCE, INC., 8-K, 11/10/2014 + + + + + + + + 10. RELATIONSHIP OF THE PARTIES Nothing contained in this Agreement shall be construed as establishing a partnership, or a joint venture relationship between Talent and Company. 11. FORCE MAJEURE Neither party will be liable for, or will be considered to be in breach of or default under this Agreement on account of, any delay or failure to perform as required by this Agreement as a result of any causes or conditions that are beyond such Party's reasonable control and that such Party is unable to overcome through the exercise of commercially reasonable diligence. If any force majeure event occurs, the affected Party will give prompt written notice to the other Party and will use commercially reasonable efforts to minimize the impact of the event. 12. NOTICES Notice: Each notice, request or demand given or required to be given pursuant to this Agreement shall be in writing and shall deemed sufficiently given if both emailed and deposited in the United Kingdom mail, registered First Class, postage pre-paid, and addressed to the address of the intended recipient set forth below, or to such other address as may be specified in this Agreement or in writing by the parties and receipt shall be deemed if sent by (i) email on the same day if sent on a day open for business and (ii) post on the second day from posting, open for business. If to Company Name: lain Edwards Address: Tigrent Learning UK Ltd Boston House 69 — 75 Boston Manor Road Brentford Middlesex TW8 9.1.1 England Telephone: 02089 966700 Facsimile: 02089 966701 Email: iainedwards@tiRrent.com If to CSA Name: Sharon Bowler Address: Celebrity Speakers Ltd 90 High Street Burnham Buckinghamshire SL1 7JT England Telephone: 01628 601400 Facsimile: 01628 601401 Email: Sharon@speakers.co.uk If to Talent Name: Robbie Fowler Address: c/o Celebrity Speakers Ltd — As above + +6 + +Source: LEGACY EDUCATION ALLIANCE, INC., 8-K, 11/10/2014 + + + + + + + + 13. JURISDICTION/DISPUTES This Agreement shall be deemed to have been made in England. This Agreement shall be governed by the laws of England and Wales, and all actions brought hereunder whether at law or in equity shall be brought in England. The parties hereby agree that any and all claims arising from or in connection with the subject matter of this Agreement must be brought in England before the County Court or High Court. 14. AGREEMENT BINDING ON SUCCESSORS The provisions of the Agreement shall be binding upon and shall inure to the benefit of the Parties hereto, their heirs, administrators, successors and assigns. 15. ASSIGNABILITY The Parties may not assign this Agreement or the rights and obligations hereunder to any third party without the prior express written approval of the other Party. 16. WAIVER No delay, failure or waiver by either party to exercise any right or remedy under this Agreement, and no partial or single exercise, will operate to limit, preclude, cancel, waive or otherwise affect such right or remedy, nor will any single or partial exercise limit, preclude, impair or waive any further exercise of such right or remedy or the exercise of any other right or remedy. 17. SEVERABILITY If any term, clause or provision hereof is held invalid or unenforceable by a court of competent jurisdiction, such invalidity shall not affect the validity or operation of any other term, clause or provision and such invalid term, clause or provision shall be deemed to be severed from the Agreement. 18. SURVIVAL The parties' rights and obligations under the Primary Agreement and Articles 4, 6, 7, 9, 10, 12, 13, 14, and 15 shall survive any expiration or earlier termination of this Agreement. + +7 + +Source: LEGACY EDUCATION ALLIANCE, INC., 8-K, 11/10/2014 + + + + + + + + 19. HEADINGS All section and subsection headings contained in this Agreement are for convenience only and shall not be deemed to constitute a part of this Agreement nor affect the meaning of same. 20. NO DRAFTER Both parties warrant and represent that each have had equal input in drafting this Agreement and have had the opportunity to consult with independent legal counsel. 21. EXPENSES Bar those covered in clause 1A, each party shall bear all expenses incidental to the performance of its obligations under this Agreement. 22. SEPARATE COUNTERPARTS This Agreement may be executed in several counterparts, each of which shall be an original but all of which together shall constitute one and the same instrument. 23. ENTENT OF AGREEMENT This Agreement is subject to the terms of the Primary Agreement and both agreements supersede any and all other agreements, either verbal or in writing between the parties hereto with respect to the use of Talent's Property by Company, and contains all of the covenants and agreements between the parties with respect to such use in any manner whatsoever providing that the terms of the Primary Agreement shall remain effective at all times and such terms shall take precedence in the event of any conflict between the terms. Each party to this Agreement acknowledges that no representation, inducements, promises, or agreements, verbally or otherwise, have been made by any party, or anyone acting on behalf of any party, which are not embodied herein, and that no other agreement, statement, or promise not contained in this Agreement shall be valid or binding on either party, other than as expressed in the Primary Agreement and any other written agreement dated concurrent with or after this Agreement shall be valid as between the signing parties thereto provided always such agreement does not override or conflict with the terms of the Primary Agreement. IN WITNESS WHEREOF, the Parties hereto, intending to be legally bound hereby, have each caused to be affixed hereto its or his/her hand and seal the day indicated. COMPANY CSA on behalf of TALENT Tigrent Learning UK Limited lain Edwards (authorized signatory) Sharon Bowler (authorized signatory) Date Date 8 + +Source: LEGACY EDUCATION ALLIANCE, INC., 8-K, 11/10/2014 \ No newline at end of file diff --git a/full_contract_txt/LegacyEducationAllianceInc_20200330_10-K_EX-10.18_12090678_EX-10.18_Development Agreement.txt b/full_contract_txt/LegacyEducationAllianceInc_20200330_10-K_EX-10.18_12090678_EX-10.18_Development Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..cb1302de60e727333f9786bd893289e55de13230 --- /dev/null +++ b/full_contract_txt/LegacyEducationAllianceInc_20200330_10-K_EX-10.18_12090678_EX-10.18_Development Agreement.txt @@ -0,0 +1,173 @@ +Exhibit 10.18 Certain identified information has been excluded from this exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed. REAL ESTATE EDUCATION TRAINING PROGRAM DEVELOPMENT AGREEMENT This Real Estate Education Training Program Development Agreement (this "Agreement") by and between T&B Seminars, Inc., a California corporation f/s/o Tarek El Moussa ("T&B") and Legacy Education Alliance Holdings, Inc., a Colorado corporation ("LEA"), is entered into as of 12-23-2019 , 2019 (the "Effective Date"). WHEREAS, LEA is in the business of marketing, sales and distribution (including e-distribution) of any in-person product or service offerings in real estate investing strategies and techniques, asset protection, and entrepreneurship in any form of communication or media to one or more recipients, including, but not limited to, workshops, seminars, webinars, coaching, and mentorships, and related product or services; WHEREAS, T&B owns or has the right to license certain intellectual property associated with Tarek El Moussa: WHEREAS, T&B and LEA wish to conduct business to develop and operate a "Tarek's Real Estate 101" branded seminar style education business that uses, among other things, the names, images, and likenesses of Tarek El Moussa to market and sell customers real estate investing oriented education products. NOW, THEREFORE, in consideration of the mutual covenants and promises herein contained, the parties hereby agree as follows: 1. Definitions. Capitalized words and phrases used in this Agreement that are not otherwise defined herein shall have the meanings set forth below: 1.2. The term "Affiliate" means an entity controlling, controlled, or under common control with a party. For these purposes, "control" means: (a) the possession, directly or indirectly, of the power to direct the management or policies of an entity, whether through the ownership of voting securities, by contract or otherwise; or (b) the ownership, directly or indirectly, of at least fifty percent (50%) of the voting securities or other ownership interest of an entity. 1.2. The term "Business" means a branded real estate seminar style education business that uses the Licensed Intellectual Property, including a to-be-determined trademark for the Business, to market and sell customers Products through any form of communication or media. 1.3 The term "Cash Sales" shall mean the gross cash proceeds actually received by LEA or T&B from the sale of Products to persons responding to a Business-branded marketing campaign conducted by LEA that uses any or any combination of Licensed Intellectual Property. Cash Sales shall exclude any merchant fees, taxes, shipping, refunds (e.g., returns, right of rescission, NSF checks, and credit card chargebacks), rebates, and bad debt + +1 + +Source: LEGACY EDUCATION ALLIANCE, INC., 10-K, 3/30/2020 + + + + + +Certain identified information has been excluded from this exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed. 1.4. The term "Confidential Information" means any and all information which is not readily ascertainable by proper means and which derives economic value, actual or potential from not being generally known and which has been the subject of efforts that are reasonable under the circumstances to maintain its secrecy. All information relating to the products or operations of a party, which is provided to the other party, or to which the other party otherwise obtains access, pursuant to, or as a result of, this Agreement shall be treated as Confidential Information hereunder, except such information which the other party can clearly show: (a) at the time of this Agreement is publicly and openly known; (b) after the date of this Agreement becomes publicly and openly known through no fault of the other party; (c) comes into the other party's possession and lawfully obtained by the other party from a source other than from the party or a source deriving from the party, and not subject to any obligation of confidentiality or restrictions on use; or (d) is approved for release by written authorization of the other party 1.5 The term "Customer Data" means documents and other media (whether in human or machine-readable form) containing information, regarding customers and prospective customers. Without limiting the generality of the foregoing, the term "Customer Data" shall include customer lists and personally identifiable information about customers and prospective customers. 1.6 The term "Educational Materials" means all advertising and promotional materials, handouts, workbooks, presentations, manuals, software programs, and any other literature or material and other collateral items employed, provided, distributed, sold, or otherwise made available in connection with the Business, in any form of communication or media and whether or not in machine or human readable format. 1.7 The term "Exclusive Field of Use" means the marketing, sale and distribution (including e-distribution) of any in-person or remote (e.g., livestream of a live event, recording of a live event, and/or on-demand) service offerings in real estate investing strategies and techniques, asset protection, product and entrepreneurship in any form of communication or media to one or more recipients, including, but not limited to, workshops, seminars, webinars, coaching, and mentorships, and related product or services. 1.8. The term "Licensed Intellectual Property" means individually, collectively or in any combination, T&B's copyrights (whether registered or not), including, without limitation, the Educational Materials and any and all copyrightable literary works and audio-visual works developed for use in the Business, trademarks and trade names (whether registered or unregistered) used in connection with the Business; as well as customer lists, concepts, developments, trade secrets, methods, systems, programs, improvements, data and information (whether in perceivable or machine-readable form), and works of authorship including, but not limited to the (a) the Licensed Marks and (b) the name, image, and likeness of the T&B Personality. 1.9. The term "Licensed Marks" The term "Licensed Marks" shall mean T&B's current and future trademarks, service marks, and trade dress used in connection with the Business. + +2 + +Source: LEGACY EDUCATION ALLIANCE, INC., 10-K, 3/30/2020 + + + + + +Certain identified information has been excluded from this exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed. 1.10. The term "Products" shall mean any in-person remote (e.g., livestream of a live event, recording of a live event, and on-demand) product or service offerings in real estate investing strategies and techniques, asset protection, and entrepreneurship in any form of communication or media to one or more recipients, including, but not limited to, workshops, seminars, webinars, coaching, and mentorships, as may be offered by LEA in the conduct of the Business and for which a fee is charged by LEA. 1.11. The term "T&B Personality" shall mean Tarek El Moussa. 1.12 The term "Term" shall mean an initial term of five years, automatically renewable thereafter for successive 5-year terms unless either party provides prior written notice of termination not less than 90 days prior to the end of such five-year term; provided, however, T&B shall have the right to terminate the license after the first year of the Term if LEA does not conduct the Business so as to meet the Cash Sales benchmarks set by the parties for years two through five of the Term, as set forth in Section 3.3, below. 2. Grant of License. 2.1 T&B hereby grants to LEA, and LEA hereby accepts from T&B, during the Term, the sole and exclusive worldwide right and license in and to the Licensed Intellectual Property, which right and license shall be limited to that which is necessary for LEA to (i) develop and create Educational Materials and (ii) develop, promote and conduct the Business worldwide , unless the license is earlier terminated as provided herein. 2.2 LEA has the right to modify the Licensed Intellectual Property and to create derivative works (the "Derivative Works"); provided that such Derivative Works may be used, copied, distributed, performed and/or displayed only in connection with the Business; and provided further that LEA will not distribute Products embodying the Derivative Works other than to end users for personal use only in connection with the Business, and not for sale, distribution or re-licensing by such end users. For the avoidance of doubt, T&B shall remain the owner of all right, title and interest in and to the Derivative Works from inception. 2.3 T&B and LEA shall promptly notify one another in writing of any alleged infringement of the Licensed Intellectual Property by a third party. Within fifteen (15) days of the receipt of such notice or such other period as may be agreed to by the parties, T&B and LEA shall meet and confer to formulate a strategy for resolving the alleged infringement. T&B and LEA (to the extent permitted by law) each shall have the right to institute an action against such third party based upon such infringement of the Licensed Intellectual Property. 2.4 Should either T&B or LEA commence a suit under the provisions of this Section 15, and thereafter elect to abandon the same, it shall give timely notice of the other party who may, if it so desires, continue to prosecute such suit. 2.5 T&B and LEA shall cooperate in any legal proceeding concerning an alleged infringement of the Licensed Intellectual Property. Each party shall, to the fullest extent reasonable, make its employees, records, and information available to the other party as relevant to the legal process. + +3 + +Source: LEGACY EDUCATION ALLIANCE, INC., 10-K, 3/30/2020 + + + + + +Certain identified information has been excluded from this exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed. 3. Limitations, Restrictions and Covenants 3.1. During the Term, the LEA shall not use the Licensed Intellectual Property other than as permitted by this Agreement. 3.2. During the Term, T&B shall promptly disclose to LEA on an ongoing basis all additions, improvements, changes, replacements, or enhancements to T&B's Proprietary Rights not previously disclosed. 3.3 T&B shall not, during the Term, grant any third party a license to use the Licensed Intellectual Property within the Exclusive Field of Use. Further, during the Term, except as otherwise provided herein, neither T&B nor any of its Affiliates may (1) offer to sell or sell any product or service that is the same or similar to the Products in the Exclusive Field of Use, or (2) contact, solicit, or direct any person or entity to contact or solicit, any of the customers of (or customers set forth in the Customer Data) for the purpose of providing any products or services that are the same or similar to the Products; provided, however, that T&B, in its sole and absolute discretion, shall have the right to terminate this Agreement, including all rights and licenses granted to LEA herein, if and as of the date that any monthly Royalty Payment (as defined in 9.3, below) payable to T&B does not exceed the Minimum Guaranteed Royalty for six (6) consecutive months. 3.4. LEA may distribute goods and services embodying the Licensed Intellectual Property to end users for personal use only in connect with the Business, and for resale, distribution or re-licensing by such end users. 3.5 LEA acknowledges and agrees that, except as otherwise specifically provided for herein, this Agreement grants LEA no title or right of ownership in or to the Licensed Intellectual Property. LEA shall not at any time do or cause to be done any act, omission, or thing contesting or in any way impairing or tending to impair any part of T&B's right, title and interest in the Licensed Intellectual Property. 3.6 In the event LEA shall be deemed to have acquired any ownership rights in the Licensed Intellectual Property, the LEA shall assign, and agrees to execute all documents reasonably requested by T&B to assign, all such rights in the Licensed Intellectual Property to T&B or its nominee. 4. Conduct of the Business 4.1 LEA shall provide administrative and operational services for the conduct of the Business, including, marketing, event planning, sales, operations, information technologies, human resources, and class fulfillment. In consultation with T&B and subject to the licenses granted to LEA by T&B herein, LEA shall be responsible for branding the Business (including trademarks and trade dress) and creating and producing marketing collateral, sales presentations, course materials and other tangible work product and deliverables related to the conduct of the Business (collectively, "Work Product"). + +4 + +Source: LEGACY EDUCATION ALLIANCE, INC., 10-K, 3/30/2020 + + + + + +Certain identified information has been excluded from this exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed. 4.2 LEA and T&B shall jointly own all jointly-created work product including, but not limited to, ideas, any and all concepts, designs, Customer Data (including client lists) generated through the conduct of the Business, programs, software, reports, or other intellectual property and tangible work product, produced for the Business , regardless of whether such were incorporated into or used by the Business (collectively "Work Product"), shall be and remain the joint property of LEA and T&B when produced provided, however, (i) to the extent LEA has contributed distinct and divisible work product to the Business during the Term ("LEA Work Product"), such LEA Work Product shall remain frozen for a period not to exceed 90 days, during which time T&B may acquire a license for the LEA Work Product by reimbursing LEA direct and verifiable costs LEA incurred in producing the LEA Work Product during the Term and (ii) to the extent T&B has contributed distinct and divisible work product to the Business during the Term ("T&B Work Product"), such T&B Work Product shall remain frozen for a period not to exceed 90 days, during which time LEA may acquire license for the T&B Work Product by reimbursing T&B direct and verifiable costs T&B incurred in producing the T&B Work Product during the Term. No license or right is granted hereunder at any time from LEA to T&B, or by T&B to LEA, whether expressly or by implication, estoppel or otherwise, arising out of or related to LEA Work Product or T&B Work Product, respectively. LEA shall be the owner of all LEA Work Product when created and T&B shall be the owner of all T&B Work Product when created. 5. Brand Development and Launch 5.1 T&B shall assist LEA in developing the Business as reasonably requested by LEA from time to time, including, but not limited to, assisting in the development of sales presentations and course materials and consultation with LEA's sales and marketing organization to ensure that they reflect T&B Personality's investing philosophy. T&B shall provide factual substantiation of T&B Personality's biography and investing success stories provided by T&B for use by LEA in the conduct of the Business. 5.2 The initial launch of the Business is contemplated to occur in four (4) major test markets (e.g. Los Angeles and New York MSAs), with a preview event being conducted in each of weeks 4, 5, 6 and 7 of calendar year 2020 and the associated basic event being held in each of weeks 7, 8, 9, and 10, respectively. To facilitate the effective launch of the Business, T&B shall assist LEA by providing the items listed in Schedule 1 attached to this Agreement and incorporated herein by reference. 6. Personal Appearances 6.1 T&B Personality shall make six (6) public appearances each year of the Term, including an appearance at LEA's annual Hall of Fame Symposium, for the purpose of promoting the Business, which appearances may include autograph sessions, book signings, appearances at LEA's workshops, seminars and symposiums with each such session not to exceed four (4) hours. LEA shall compensate T&B Personality the sum of [$●] plus first-class air and hotel accommodations for up to three (3) additional persons for each such appearance. + +5 + +Source: LEGACY EDUCATION ALLIANCE, INC., 10-K, 3/30/2020 + + + + + +Certain identified information has been excluded from this exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed. 6.2 The parties may also conduct up to 10 "big stage" live events each year to market Products. LEA may request T&B Personality to appear at such events for not more than eight (8) hours each, subject to T&B Personality's availability. LEA shall compensate T&B Personality the sum of [$●] plus first-class air and hotel accommodations for up to three (3) additional persons for each such appearance. 7. New Product Development 7.1 Co-Developed Products. T&B and LEA shall meet and confer no less than quarterly to identify new Tarek's Real Estate 101 Product development, marketing and fulfillment initiatives, including, by way of example only, (i) mobile apps that provide investor resources and property evaluations, (ii) podcasts with T&B Personality that provide content to keep up to date with investing techniques and motivation, and (iii) tailored coaching programs and subscription services. The parties acknowledge that the development and fulfillment of such new Products may require substantial time and effort by the T&B Personality to fulfill such new Products such that the Marketing Royalty payable pursuant to V. B., above, is inadequate to compensate T&B Personality; therefore, in lieu of any other royalty, the parties shall share Cash Sales from the sale of such new Products as follows: [●%] to LEA [●%] to T&B 7.2 T&B Developed Products. In addition, T&B may independently develop Products to be marketed and sold by T&B and fulfilled by T&B. In lieu of any other royalty, the parties shall share Cash Sales from the sale of such independently developed T&B Products that are generated directly and independently by LEA as follows: [●%] to LEA [●%] to T&B 8. Confidentiality 8.1. Each party acknowledges the other's Confidential Information is unique and valuable and was developed or otherwise acquired by the other at great expense, and that any unauthorized disclosure or use of the other's Confidential Information would cause the other irreparable injury loss for which damages would be an inadequate remedy. The party agrees to hold such Confidential Information in strictest confidence, to use all efforts reasonable under the circumstances to maintain the secrecy thereof, and not to make use thereof other than in accordance with this Agreement, and not to release or disclose Confidential Information to any third party without the other's prior written consent, subject to a court order, or subject to a sublicense consistent with this Agreement and requiring the sublicensee to maintain the Confidential Information in strictest confidence, to use all efforts reasonable under the circumstances to maintain the secrecy thereof, not to make use thereof other than in accordance with the sublicense Agreement, and not to release or disclose Confidential Information to any third party without the other's prior written consent. + +6 + +Source: LEGACY EDUCATION ALLIANCE, INC., 10-K, 3/30/2020 + + + + + +Certain identified information has been excluded from this exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed. 8.2. Each party further acknowledges that any violation of this Section 5 shall constitute a material breach of this License Agreement resulting in irreparable injury to the non-breaching party and agree that, in addition to any and all other rights available to the non-breathing party by law or by this Agreement, the non-breaching party shall have the right to have an injunction entered against the party to enjoin any further violations of this Agreement. 9. Royalties and Reporting 9.1. In consideration of the rights to be granted by T&B to LEA, LEA agrees to pay T&B: 9.1.1 Base Royalty. In consideration of the License granted and other good and valuable consideration provided by T&B to LEA, LEA shall pay to T&B a base royalty ("Base Royalty") in the amount of [●%] of LEA's monthly Cash Sales for Cash Sales of up to [$●]. For monthly Cash Sales above [$●] and up to [$●] , the Base Royalty paid to T&B by LEA shall be [●%]of the LEA's Cash Sales. For monthly Cash Sales above [$●] and up to [$●] the Base Royalty paid to T&B by LEA shall be [●%] of the LEA's Cash Sales. For monthly Cash Sales above [$●] and up to [$●], the Base Royalty paid to T&B by LEA shall be [●%] of the LEA's Cash Sales. For monthly Cash Sales above [$●]the Base Royalty paid to T&B by LEA shall be [●%] of the LEA's Cash Sales. Payments will be made in U.S. Dollars. 9.1.2 Marketing Royalty: Marketing Royalty: In consideration of T&B Personality providing commercially reasonable, regular and periodic marketing support to LEA substantially in accordance with Schedule 2 attached to this Agreement and incorporated herein by reference, which LEA agrees to request and accept from T&B consistently during the Term, LEA will pay T&M a royalty in addition to the Base Royalty ("Marketing Royalty") which shall be comprised of and calculated at [●%] of LEA's Cash Sales made from the sale of Products at live events and [●%] of LEA's Cash Sales made from the sale of Products at on-line webinars. For the avoidance of doubt, the Base Royalty and Marketing Royalty shall be cumulative and calculated independently, without overlap. Further, nothing herein shall be construed to enable LEA to refuse to accept reasonable, regular and periodic marketing support from T&B as a means to avoid paying T&B a Marketing Royalty. In the event, T&B offers, but LEA refuses to request or accept reasonable, regular and periodic marketing support from T&B during the Term, LEA shall continue to be obligated to pay T&B a Marketing Royalty as if such marketing support had been requested and accepted by LEA. 9.2 Minimum Guaranteed Royalty: In consideration of the exclusivity rights granted to LEA, commencing with the seventh (7t h) month of the Term and continuing each year of the Term thereafter, the minimum Royalties payable to T&B each month shall be the greater of the (i) applicable monthly Base Royalty and Marketing Royalty or (ii) $200,000. 9.3 Base Royalties and Marketing Royalties shall be paid monthly to T&M within 15 days after the end of the applicable month. Payments will be made in U.S. Dollars. + +7 + +Source: LEGACY EDUCATION ALLIANCE, INC., 10-K, 3/30/2020 + + + + + +Certain identified information has been excluded from this exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed. 9.4. For each Base Royalty and Marketing Royalty payment (collectively, "Royalty Payment"), LEA shall render to T&B, a written statement, in such form as T&B may reasonably request, setting forth Cash Sales made during the period to which the Royalty Payment relates, and such other information as T&B may reasonably request to verify the Royalty Payments due hereunder. LEA shall keep such written records respecting Cash Sales as T&B may reasonably request so that Royalty Payments payable hereunder may be accurately determined and shall permit such records to be examined by T&B or its authorized representative upon reasonable prior written notice at any reasonable time during regular business hours to verify the records, reports and payments herein provided. 9.5. LEA shall be responsible for, and shall pay, all sales, value added and similar taxes, if any, which may be imposed on any receipts of the Trainings sold hereunder, as well as any other tax based upon LEA's use of the Licensed Intellectual Property in connection with the Business. 9.6 T&B ACKNOWLEDGES AND AGREES THAT NO REPRESENTATIONS OR STATEMENTS OF ACTUAL, AVERAGE, PROJECTED OR FORECASTED SALES, PROFITS, ROYALTIES, OR EARNINGS HAVE BEEN MADE WITH RESPECT TO THE BUSINESS CONTEMPLATED BY THIS AGREEMENT. 10. Warranties and Representations. 10.1 T&B warrants and represents that: 10.1.1 It is a corporation duly organized, validly existing, and in good standing under the laws of the state of California with all requisite power and authority to execute, deliver and perform this Agreement. 10.1.2 All necessary actions on the part of T&B have been duly taken to authorize the execution, delivery, and performance of the Agreement by T&B. 10.1.3 This Agreement has been duly authorized, executed, and delivered by T&B, constitutes the legal, valid, and binding obligation of T&B and is enforceable in accordance with its terms. 10.1.4 It has the right to grant the licenses and enter into this Agreement without seeking the approval or consent of any third party and without payments to any third party. 10.1.5 There are no existing or threatened claims or proceedings by any entity relating to the Licensed Intellectual Property or challenging T&B's ownership of the same. 10.1.6 None of the Licensed Intellectual Property are subject to any outstanding order, decree, judgment, stipulation, written restriction, undertaking or agreement limiting the scope or use of the Licensed Intellectual Property or declaring any of it abandoned. + +8 + +Source: LEGACY EDUCATION ALLIANCE, INC., 10-K, 3/30/2020 + + + + + +Certain identified information has been excluded from this exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed. 10.1.7 Licensed Intellectual Property, or any portion thereof, does not interfere with, infringe, or misappropriate, or violate the intellectual property right of any third party and T&B has not received any charge, complaint, claim, or notice alleging any such interference, infringement, misappropriation or violation nor does T&B have any knowledge that any such charge or claim may be forthcoming. 10.1.8 Any trade secrets comprising part of the Licensed Intellectual Property have been properly maintained as trade secrets. 10.2 LEA warrants and represents that: 10.2.1 It is a corporation duly organized, validly existing, and in good standing under the laws of the state of Colorado, with all requisite corporate power and authority to execute, deliver and perform this Agreement. 10.2.2 All necessary corporate proceedings of LEA have been duly taken to authorize the execution, delivery, and performance of the Agreement by LEA.] 10.2.3 This Agreement has been duly authorized, executed, and delivered by LEA, constitutes the legal, valid, and binding obligation of LEA and is enforceable in accordance with its terms. 10.2.4 This Agreement has been duly authorized, executed, and delivered by LEA, constitutes the legal, valid, and binding obligation of LEA and is enforceable in accordance with its terms. 10.2.5 There are no existing or threatened claims or proceedings by any entity against LEA that would impair LEA's ability to perform under this agreement. 10.2.6 That LEA will not contract with Christina Anstead during the Term. 11. Term and Termination. 11.1 The Term shall commence upon the Effective Date and shall continue for an initial term of five (5) years. The Term shall automatically renew thereafter for successive 5-year terms unless either party provides prior written notice of termination not less than 90 days prior to the end of such five-year term. 11.2 The Agreement may be terminated: (i) immediately by either party in the event of a breach of this Agreement by the other party that is susceptible of cure and such breach is not cured within the 30-day period after written notice of such breach to the breaching party. (ii) by either party, immediately, if the other party becomes insolvent, makes an assignment for the benefit of its creditors, or becomes the subject of any bankruptcy or insolvency proceedings, and such proceedings are not vacated within sixty (60) days of their initiation. + +9 + +Source: LEGACY EDUCATION ALLIANCE, INC., 10-K, 3/30/2020 + + + + + +Certain identified information has been excluded from this exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed. (iii) by either party, if the other party ceases to do business. (iv) by LEA, immediately, in the event LEA is enjoined by a court of competent jurisdiction from using any of the Licensed Intellectual Property. (v) by LEA if the T&B Personality engages in illegal, immoral, or criminal conduct resulting in a felony conviction; or misrepresents or conceals anything in his or her background that could be detrimental to the value of the endorsement being made. 11.3 Upon termination of the license hereunder, all rights and privileges in and to the Licensed Intellectual Property granted to the LEA herein shall automatically revert to T&B or its nominee, and the LEA shall immediately cease any use thereof. 11.4. LEA shall, for a period of six (6) months ("Sell-Off Period") following the effective date of termination of the license granted by T&B hereunder, have the right to fulfill commitments made to customers during the Term. The provisions of this Agreement shall apply with full force and effect during the Sell-Off Period. Upon expiration of the Sell-Off Period, LEA shall immediately cease and desist from using or displaying any forms of advertising containing any of the Licensed Marks. 11.5 Sections 4.2; 8 (Confidentiality); 10 (Warranties and Representations); 12 (Indemnification); and 14 (Miscellaneous) hereof shall survive the expiration or early termination (for any reason) of this Agreement. 12. Indemnification. 12.1 Each party shall defend, indemnify and hold harmless the other party and their respective Affiliates and their respective officers, directors, agents, contractors, employees, successor, and assigns from and against all claims, demands or causes of action, as well as any and all damages, expenses, costs, interest and reasonable legal fees, including such fees incurred on appeal, in any way related to, arising out of or connected with a breach of the indemnifying party's representations, warranties or covenants under this Agreement. Without limiting the generality of the foregoing, LEA shall defend, hold harmless and indemnify T&B and T&B's agents and employees from and against any and all claims, demands, losses, disputes, causes of action or damages, including, without limitation, FTC actions or other regulatory actions, and/or attorneys' fees arising out of or relating to the promotion, distribution and/or sale of any financial education programs, products or services, including (but not limited to) live presentations, print advertising, radio advertising, direct mail, outbound calls, email marketing, affiliate marketing, online advertising, infomercials and other marketing methods, by or through LEA, In any instance to which such indemnities pertain, LEA shall obtain and maintain necessary insurance, including, without limitation, Commercial General Liability Insurance, including product liability insurance, trademark infringement, copyright infringement, defamation, contractual liability and personal and advertising injury liability insurance in an amount no less than ten million dollars ($10,000,000.00) per occurrence and ten million dollars ($10,000,000.00) aggregate combined single limit. T&B and Tarek El Moussa shall be named as an additional insured on such insurance and proof of such inclusion shall be provided to T&B. + +10 + +Source: LEGACY EDUCATION ALLIANCE, INC., 10-K, 3/30/2020 + + + + + +Certain identified information has been excluded from this exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed. 12.2. EXCEPT FOR AMOUNTS PAYABLE TO THIRD PARTIES IN CONNECTION WITH CLAIMS SUBJECT TO THE INDEMNIFICATION PROVISIONS OF SECTION 9.1 OR A BREACH OF EITHER PARTY'S OBLIGATIONS UNDER SECTION 5 (CONFIDENTIALITY), NEITHER PARTY WILL, UNDER ANY CIRCUMSTANCES, BE LIABLE TO THE OTHER PARTY FOR ANY LOST PROFITS OR ANY OTHER SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES ARISING OUT OF OR RELATING TO THIS AGREEMENT EVEN IF THE PARTY HAS BEEN NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES. 13. Independent Development. Nothing in this Agreement shall be construed as restricting LEA's right or ability to acquire, license, develop, manufacture or distribute for itself, or have others acquire, license, develop, manufacture or distribute for LEA, adult education products and services, or technology performing the same or similar functions as the adult education products and services, or technology contemplated by this Agreement, or to market or distribute such same or similar adult education products and services, or technology in addition to, or in lieu of, the adult education products and services, or technology contemplated by this Agreement including, whether in the conduct of the Business or otherwise. 14. Miscellaneous. 14.1 Waiver. The failure of either party at any time or times to demand strict performance by the other party of any of the terms, covenants or conditions set forth herein shall not be construed as a continuing waiver or relinquishment thereof, and either party may at any time demand strict and complete performance by the other party of said terms, covenants and conditions. 14.2 Notices. All notices and other written communications required to be given under this Agreement shall be in writing and shall be delivered to the addressee in person, mailed by registered or certified mail, return receipt requested, or by reputable overnight courier. Any such notice shall be deemed to be delivered, given and received for all purposes as of the date so delivered, if delivered personally, or, if sent by certified or registered mail, three days following the date on which the same was deposited in a regularly maintained receptacle for the deposit of United States mail, postage and charges prepaid. The addresses of the parties (until written notice of change shall have been given) shall be as follows: To T&B T & B Seminars, Inc. 4411 East La Palma Avenue Anaheim, CA 92807 With a copy to: Roger N. Behle, Jr., Esq. FOLEY BEZEK BEHLE & CURTIS, LLP 575 Anton Boulevard, Suite 710 Costa Mesa, CA 92626 To LEA: Legacy Education Alliance Holdings, Inc. 1612 E. Cape Coral Parkway Cape Coral, FL 33904 Attn: VP/Operations With a copy to: Legacy Education Alliance Holdings, Inc. 1612 E. Cape Coral Parkway Cape Coral, FL 33904 Attn: General Counsel + +11 + +Source: LEGACY EDUCATION ALLIANCE, INC., 10-K, 3/30/2020 + + + + + +Certain identified information has been excluded from this exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed. 14.3 Binding Effect. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns. 14.4 Further Documents. The parties agree to execute and deliver all such further documents, agreements and instruments and take such other and further action as may be necessary or appropriate to carry out the purposes and intent of this Agreement. 14.5 Entire Agreement. This Agreement, along with any attachments, exhibits, schedules and documents specifically referenced herein, constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior communications, writings and other documents with regard thereto. No modification, amendment or waiver of any provision hereof shall be binding upon either party hereto unless it is in writing and executed by both of the parties hereto or, in the case of a waiver, by the party waiving compliance. 14.6 Relationship of the Parties. Nothing contained in this Agreement shall be deemed or construed by the parties hereto or by any third person to create the relationship of principal and agent or of partnership or of joint venture or of any association between the parties. None of the provisions contained in this Agreement nor any acts of the parties hereto shall be deemed to create any relationship between the parties other than the relationship specified in this Agreement. 14.7 Severability. In the event any provision of this Agreement or the application of any provision shall be held by a tribunal of competent jurisdiction to be contrary to law, then, the remaining provisions of this Agreement shall be unimpaired, and the illegal, invalid or unenforceable provision shall be replaced by a provision, which, being legal, valid and enforceable, comes closest to the intent of the parties underlying the illegal, invalid or unenforceable provision. In any event, an illegal, invalid or unenforceable provision shall not affect the enforceability or the validity of the remaining terms or portions thereof, and each such unenforceable or invalid provision or portion thereof shall be severable from the remainder of this Agreement. 14.8 Cost of Enforcement. If a party commences any action at law or in equity, or for declaratory relief to secure or protect any rights under, or to enforce any provision of, this Agreement, then, in addition to any judgment, order, or other relief obtained in such proceedings, the prevailing party shall be entitled to recover from the losing party all reasonable costs, expenses, and attorneys' fees incurred by the party in connection with such proceedings, including, attorneys' fees incurred for consultation and other legal services performed prior to the filing of such proceeding. + +12 + +Source: LEGACY EDUCATION ALLIANCE, INC., 10-K, 3/30/2020 + + + + + +Certain identified information has been excluded from this exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed. 14.9 No Assignment. Neither party may assign this Agreement without the other party's prior written consent. Notwithstanding the foregoing, either party may assign this Agreement without the other party's prior written consent in the event of a merger, acquisition, reorganization, change in control, or sale of substantially all of the assets or business of such assigning party. Any assignment in conflict with this provision shall be void. 14.10 Governing Law. This Agreement will be governed by and construed in accordance with the laws of the State of New York without regard to its provisions concerning the applicability of the laws of other jurisdictions, and specifically excluding the United Nations Convention on the International Sale of Goods. 14.11. Force Majeure. To the extent any event beyond the control of either party (such as an act of God, action of the elements, man-made or natural disaster, industry or supplier strike or other labor disturbance, or civil or military disturbance) shall prevent such party from performing any of its duties or obligations hereunder by the date provided or to be provided, the time for such performance shall be deemed extended for a period of time equivalent to the duration of such event; provided, however, that the party so prevented from performing must give prompt written notice to the other party of the nature of such event, the date when such event shall have taken place, and the date when the duration of such event shall have terminated; and further provided, however, that if performance shall be so prevented for a period of more than six months, the other party may terminate this Agreement by written notice of such termination, and thereafter neither party hereto shall be under any further liability or obligation to the other hereunder. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year written above. Legacy Education Alliance Holdings, Inc. T&B Seminars, Inc. By: /s/ James E. May By: /s/ Tarek El Moussa Name:James E. May Name:Tarek El Moussa Title: Chief Executive Officer Title: Owner + +13 + +Source: LEGACY EDUCATION ALLIANCE, INC., 10-K, 3/30/2020 + + + + + +Certain identified information has been excluded from this exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed. Inducement As a material inducement for Legacy Education Alliance Holdings, Inc. . ("LEA") to enter into the above Real Estate Education Training Program Development Agreement (the "Agreement") with T&B Seminars, Inc. ("T&B"), I hereby represent, warrant, and agree as follows: 1. I have entered into an agreement with T&B requiring me to render services to T&B for at least the full term of the term of the Agreement and authorizing T&B to enter into the Agreement and to furnish my rights and services to LEA upon the terms, covenants, and conditions contained in the Agreement. 2. I am familiar with the terms, covenants, and conditions of the Agreement. I hereby consent to the terms and conditions of, and agree to perform all of the duties, obligations and services required of T&B Personality under the Agreement as if I had executed it directly as an individual. 3. I hereby confirm that T&B has been granted all of the rights granted by T&B to LEA under the Agreement and I hereby join in and confirm all grants, representations, warranties and agreements made by T&B under the Agreement. /s/ Tarek El Moussa Tarek El Moussa, an individual Date: 12-23-2019 + +14 + +Source: LEGACY EDUCATION ALLIANCE, INC., 10-K, 3/30/2020 + + + + + +Certain identified information has been excluded from this exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed. Schedule 1 Brand Development and Launch To facilitate the effective launch of the Business, T&B shall assist LEA by providing the following: o Approved Images § Minimum 5 Hero image/poses (studio or in the field) of Tarek · Full length, 3/4 or straight, waist up and/or chest up o Hi-resolution: 8"x10" or 5"x 7" 300 dpi flattened file § File Format: .jpg, .psd, .tiff, .png. o Approved Videos § Minimum 3 Live Workshop Promotion · 1 30 second clip · 1 60 second clip · 1 3-minute video § Minimum 3 Online Workshop Promotion by topic · 1 30 second clip · 1 60 second clip · 1 3-minute video § Minimum 5 Nurturing/Event Reminder- Live and Online (10) · 1 Thank you for registering · 1 Workshop reminder/ content · 1 Motivational- Why/Purpose · 1 Call to action- Show up. Take action by doing. o What they'll learn/expectations · 1 Thank you for pursing education- post event § Video resolutions, formats and frame rates: (This also applies to future video specs) o 4K (3940x2160) o HDV (1440x1080) o HD (1920x1080) o HD (1280x720 minimum) · Containers/Format: o .MP4 (H.264, MPEG-4 Part 2, MPEG-2, MPEG-1) o .Mpg ( MPEG-1 part 1) o .AVI o .MTS (AVCHD) o .MOV § QuickTime Format: Cinepak, DV-NTSC, H.261, H.263, mpeg-4, Sorenson o NTSC preferred + +15 + +Source: LEGACY EDUCATION ALLIANCE, INC., 10-K, 3/30/2020 + + + + + +Certain identified information has been excluded from this exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed. · Frame Rate: o 24, 29.970, 50, 59.94 · All modern Phone Video is accepted above 720p resolution (Landscape mode preferred) o Approved Audio Recording Phrases § Save your Seat § Don't miss out on this event § Personal quotes or phrases o Approved Copy § Personal Story § 10 Motivational Quotes § Call to Action · Registration- Landing Page, Emails, Text and Mail · Attendance- Increase Attendance · Buyer- Next Steps · Motivation · Investing Content- Strategies & Designs · Copy of handwritten signature + +16 + +Source: LEGACY EDUCATION ALLIANCE, INC., 10-K, 3/30/2020 + + + + + +Certain identified information has been excluded from this exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed. Schedule 2 Marketing Support Requirements Social Platforms Content- Monthly o Suggested Design Concepts § Samples or ideas as needed o Approved Images § Minimum 5 Photos · Studio or in the field of Tarek o File Format: .jpg, .psd, .tiff, .png. o Approved Copy § Minimum 3 topics to post · 1-2 paragraphs of content o Event promotion, Motivational and Real Estate Content o Approved Videos § Minimum 3 Videos · 60 seconds to 3 minutes + o Studio or in the field of Tarek · Event promotion, Motivational and Real Estate Content o Personal Post § Minimum 1 social post on all platforms inviting people to events, products or services o Approval for Legacy to Repost Tarek's Social Media Content on all platforms Registration Landing Page Content- Quarterly o Suggested Design Concepts § Samples or ideas as needed o Approved Images § 3 Hero image/poses (studio or in the field) of Tarek · Full length, 3/4 or straight, waist up and/or chest up o Hi-resolution: 8"x10" or 5"x 7" 300 dpi flattened file § File Format: .jpg, .psd, .tiff, .png. o Approved Copy § Minimum 3 topics to post · 1-2 paragraphs of content o Event promotion, Motivational and Real Estate Content o Approved Videos § Minimum 3 Videos · 60 seconds to 3 minutes + o Studio or in the field of Tarek · Event promotion, Motivational and Real Estate Content + +17 + +Source: LEGACY EDUCATION ALLIANCE, INC., 10-K, 3/30/2020 + + + + + +Certain identified information has been excluded from this exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed. Email Invite Contact Method- Quarterly o Suggested Design Concepts § Samples or ideas as needed o Approved Images § 3 Hero image/poses (studio or in the field) of Tarek · Full length, 3/4 or straight, waist up and/or chest up o Hi-resolution: 8"x10" or 5"x 7" 300 dpi flattened file § File Format: .jpg, .psd, .tiff, .png. o Approved Copy § Minimum 3 topics to post · 1-2 paragraphs of content o Event promotion, Motivational and Real Estate Content o Approved Videos § Minimum 3 Videos · 60 seconds to 3 minutes + o Studio or in the field of Tarek · Event promotion, Motivational and Real Estate Content 18 + +Source: LEGACY EDUCATION ALLIANCE, INC., 10-K, 3/30/2020 \ No newline at end of file diff --git a/full_contract_txt/LejuHoldingsLtd_20140121_DRS (on F-1)_EX-10.26_8473102_EX-10.26_Content License Agreement1.txt b/full_contract_txt/LejuHoldingsLtd_20140121_DRS (on F-1)_EX-10.26_8473102_EX-10.26_Content License Agreement1.txt new file mode 100644 index 0000000000000000000000000000000000000000..b35312f8b462c38ed802f71f25c80dcacb18c578 --- /dev/null +++ b/full_contract_txt/LejuHoldingsLtd_20140121_DRS (on F-1)_EX-10.26_8473102_EX-10.26_Content License Agreement1.txt @@ -0,0 +1,163 @@ +Exhibit 10.26 EXECUTION VERSION CONFIDENTIAL DOMAIN NAME AND CONTENT LICENSE AGREEMENT This Domain Name and Content License Agreement (the "Agreement") is made and entered into, by and between Beijing SINA Internet Information Service Co., Ltd. (北京新浪互联信息服务有限公司), a limited liability company organized under the laws of the People's Republic of China (hereinafter "Licensor") and Beijing Yisheng Leju Information Services Co., Ltd., a limited liability company organized under the laws of the People's Republic of China ("Licensee" and together with Licensor, the "Parties" and each a "Party") and is made effective as of the Effective Date (defined below). RECITALS WHEREAS, SINA Corporation, a company organized under the laws of the Cayman Islands ("SINA"), and CRIC Holdings Limited, a company organized under the laws of the Cayman Islands ("CRIC"), entered into that certain Share Purchase Agreement dated July 23, 2009 (the "Share Purchase Agreement"), pursuant to which SINA subscribes from CRIC the Subscription Shares (as defined in the Share Purchase Agreement); WHEREAS, Licensor is the registrant of certain domain names as more particularly described below that are related to the Business which it desires to license to Licensee and Licensee desires to obtain a license from Licensor to such domain names to use in connection with its operation of the Business on the terms and conditions set forth herein; and WHEREAS, Licensor and Shanghai SINA Leju Information Technology Co. Ltd. ("SINA Leju") entered into that certain Domain Name License Agreement dated May 8, 2008 (the "Original Agreement") and (i) Licensor and SINA Leju desire to terminate the Original Agreement pursuant to the Mutual Termination Agreement attached hereto as Exhibit B and (ii) Licensee and Licensor desire to enter into this Agreement, on or prior to the consummation of the transactions contemplated by the Share Purchase Agreement. NOW, THEREFORE, for and in consideration of the mutual covenants and agreement of the Parties and the faithful performance thereof, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto agree as follows: ARTICLE I DEFINITIONS As used herein, the following terms shall have the meanings ascribed to them below. "Action" has the meaning set forth in Section 8.1. "Affiliate" means, when used with respect to any specified Person, a Person that directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such specified Person. For the purposes of this definition, "control" (including the terms "controlled by" and "under common control with") with respect to the + +Source: LEJU HOLDINGS LTD, DRS (on F-1), 1/21/2014 + + + + + + relationship between or among two or more Persons, means the possession, directly or indirectly or as trustee, personal representative or executor, of the power to direct or cause the direction of the affairs or management of a Person, whether through the ownership of voting securities, as trustee, personal representative or executor, by contract, credit arrangement or otherwise. "Agency Agreement" means that certain Advertising Sale Agency Agreement by and between SINA Corporation and China Online Housing Technology Corporation, dated as of the date hereof. "Business" means an online real estate media platform in the PRC that (i) provides information and updates related to real estate, home furnishing and construction in the PRC and provides real estate, home furnishing and construction advertising services, and (ii) operates a business-to-business and business-to-consumer Internet platform targeting participants in the PRC real estate industry, in each case, as currently conducted or contemplated to be conducted on the websites owned or operated by Licensee or any of Licensee's Affiliates in the PRC. "Business Day" means any day that is not a Saturday, a Sunday or other day on which banks are required or authorized by Law to be closed in Beijing. "Change of Control" means (i) the consummation of any acquisition or purchase, directly or indirectly, by any Person or related group of Persons, that results in a Competitor owning more ordinary shares in CRIC than E-House and SINA, and in each case, their respective controlled Affiliates, own in the aggregate or (ii) an event pursuant to which a Competitor acquires the right to nominate a member to the board of directors of CRIC. "Claimant" has the meaning set forth in Section 10.12. "Commission" has the meaning set forth in Section 10.12. "Competitor" means any Person whose business includes an online portal. "Confidential Information" has the meaning set forth in Section 9.1. "Content" means text, graphics, information and data and other content, whether supplied by Licensee, Licensor, end users or third party providers. "Dispute" has the meaning set forth in Section 10.12. "Effective Date" means the Closing Date as set forth in the Share Purchase Agreement. "E-House Licensed Data and Information" means the data and information licensed to CRIC Holdings Limited and its subsidiaries, for the operation of the CRIC system pursuant to the Master Transaction Agreement. 2 + +Source: LEJU HOLDINGS LTD, DRS (on F-1), 1/21/2014 + + + + + + "Governmental Authority" means any federal, national, supranational, state, provincial, local or other government, governmental, regulatory or administrative authority, agency or commission or any court, tribunal, or judicial or arbitral body. "Initial Term" has the meaning set forth in Section 6.1. "Law" means any federal, national, supranational, state, provincial, local or similar statute, law or ordinance, regulation, rule, code, order, requirement or rule of law (including common law). "Licensed Content" shall mean all Content (i) whose copyright is owned by Licensor; or (ii) owned by a third party provider but is sublicensable by Licensor to Licensee without requiring the payment of any additional fee to any third party and without violating the terms of any agreement with such third party provider, together with all updates to and substitutions therefor as may be implemented by Licensor or such third party provider. "Licensed Domain Names" means the domain names listed on Exhibit A attached hereto. "Licensee Parties" has the meaning set forth in Section 8.1. "Licensor Parties" has the meaning set forth in Section 8.2. "Master Transaction Agreement" means the Master Transaction Agreement entered into by and between E-House (China) Holdings Limited and CRIC Holdings Limited, dated as of July 27, 2009. "Operating Content" has the meaning set forth in Section 2.2. "Person" means any individual, partnership, firm, corporation, limited liability company, association, trust, unincorporated organization or other entity, as well as any syndicate or group that would be deemed to be a person under Section 13(d)(3) of the Securities Exchange Act of 1934, as amended. "PRC" means the People's Republic of China, excluding Hong Kong, Macau and Taiwan. "Recipient" has the meaning set forth in Section 9.1. "Respondent" has the meaning set forth in Section 10.12. "Rules" has the meaning set forth in Section 10.12. "Software License Agreement" means that certain Software License and Support Services Agreement by and between Beijing SINA Internet Information Service Co., Ltd. and SINA Leju dated as of [ ]. "Term" has the meaning set forth in Section 6.1. 3 + +Source: LEJU HOLDINGS LTD, DRS (on F-1), 1/21/2014 + + + + + + "Trademark License Agreement" means that certain Trademark License Agreement by and between Beijing SINA Internet Information Service Co., Ltd. and Licensee dated as of [ ]. ARTICLE II GRANT OF LICENSE 2.1. Grant of Licenses. (a) Subject to the terms and conditions of this Agreement, Licensor hereby grants to Licensee, and Licensee hereby accepts from Licensor, an exclusive, non-transferable (except as set forth in Section 10.7) and non-sublicensable (except as provided in Section 2.1(c)) license to use the Licensed Domain Names in connection with the Business during the Term. Except as provided in Section 2.3, Licensee's use of the Licensed Domain Names under the terms of this Agreement shall be free of any fees. (b) Subject to the terms and conditions of this Agreement, Licensor hereby grants to Licensee, and Licensee hereby accepts from Licensor, an exclusive, non-transferable (except as set forth in Section 10.7) and non-sublicensable (except as provided in Section 2.1(c)) license to use the Licensed Content in connection with websites associated with the Licensed Domain Names until the earlier of (i) termination or expiration of this Agreement, or (ii) termination or expiration of the Agency Agreement, provided, however, that in the event the Agency Agreement is amended or restated, such amendment or restatement shall not be deemed a termination or expiration of the Agency Agreement. Except as provided in Section 2.3, Licensee's use of the Licensed Content under the terms of this Agreement shall be free of any fees. (c) Notwithstanding anything in this Agreement to the contrary, Licensee has no right to sublicense any rights granted hereunder to any third party, or otherwise permit any third party to use any Licensed Domain Names or Licensed Content; provided, however, that any rights granted to Licensee hereunder shall be sublicensable, without the prior written consent of Licensor, to SINA Leju and Licensee's Affiliates that are controlled by SINA Leju solely for the purpose of operating the Business during the Term. All rights in and to the Licensed Domain Names and Licensed Content not expressly granted herein are hereby reserved exclusively by Licensor. Licensee shall be responsible for the compliance of the terms and conditions of this Agreement by all of its sublicensees. Without limiting the foregoing, in the event any sublicensee undertakes any action (or inaction) that would be deemed a breach of this Agreement had Licensee taken such action (or inaction), such action (or inaction) shall be deemed a breach by Licensee under this Agreement. 2.2. Other Content. Licensee may desire to use Content other than Licensed Content, from time to time, in connection with the websites associated with the Licensed Domain Names ("Operating Content"). Licensee may independently enter into an agreement with the owner of the Operating Content to secure Licensee's right to use such Operating Content, and shall be solely responsible for the cost and expense associated with procuring such Content. For the avoidance of doubt, Licensee shall be permitted to upload such Operating Content directly onto Licensee's websites or through use of the Licensor's software pursuant to the Software 4 + +Source: LEJU HOLDINGS LTD, DRS (on F-1), 1/21/2014 + + + + + + License Agreement. If Licensee requests Licensor to enter into such an agreement on behalf of Licensee and to provide the Operating Content to Licensee, Licensor and Licensee shall discuss such request in good faith; provided, however, if Licensor agrees to procure and provide such Operating Content, Licensee shall reimburse Licensor for all reasonable, incremental costs that Licensor incurs which are attributable to Licensee's request. For example, if Licensor, prior to the Effective Date, employs ten (10) full time employees dedicated to obtaining Content and, as a result of Licensee's request for Operating Content pursuant to this Section 2.2, must hire an additional full time employee to handle Licensee's request, Licensee shall reimburse Licensor for the costs related to such full time employee, provided that, if such full time employee also engages in work on behalf of Licensor or its Affiliates, Licensee shall reimburse Licensor on a pro rata basis only for the time spent by such full time employee in handling Licensee's requests. Licensee further acknowledges that Licensor has no obligation to fulfill any request by Licensee to procure Operating Content under this Section 2.2. Unless otherwise agreed to by the Parties, any Operating Content obtained on Licensee's behalf by Licensor shall be for Licensee's use only and shall not be used by Licensor or its Affiliates or provided or made available to any third parties by Licensor. 2.3. Fees. In the event E-House Research and Training Institute becomes entitled to charge, invoice, or otherwise receive from, Licensee any royalties, fees or other remuneration for use of the E-House Licensed Data and Information pursuant to amendments to the Master Transaction Agreement or through other means, Licensor and Licensee shall use good faith efforts to amend this Agreement such that Licensor becomes entitled to charge, invoice, or otherwise receive fees from Licensee to use the Licensed Domain Names and Licensed Content, such fees to be agreed upon by the Parties, provided that (i) such fees shall be commercially reasonable and (ii) such fees shall not exceed the fees charged by Licensor to unaffiliated third parties for use of the Licensed Content, taking into account any other consideration received by Licensor (including, but not limited to, discounted services offerings from the third party). ARTICLE III QUALITY CONTROL 3.1. Licensee Control. Subject to the terms and conditions of this Agreement, Licensee shall be entitled to exercise exclusive control over all aspects of the websites and the Business associated with the Licensed Domain Names including, without limitation, the operation, the look-and-feel and the Content of such websites. 3.2. Content Distribution. Licensor shall make available to Licensee the Licensed Content in substantially the same manner and with substantially the same speed and efficiency as such Licensed Content was made available to SINA Leju prior to the Effective Date, namely through Licensor's content database, but in no event with less speed, efficiency, or a lesser level of access than Licensor provides with respect to its own operations. Licensee agrees to use the Licensed Domain Names only in accordance with such content distribution policy that Licensor uses in connection with its own business, and as may be established by Licensor and communicated in writing in advance to Licensee from time to time or as may otherwise be agreed to by the Parties from time to time, provided that Licensee shall be afforded the same period of time to implement any such content distribution policy as is afforded to Licensor's Affiliates and other third parties. 5 + +Source: LEJU HOLDINGS LTD, DRS (on F-1), 1/21/2014 + + + + + + 3.3. Website Monitoring and Censoring. (a) Licensee Obligations. Licensee shall monitor and censor all Content on the websites associated with the Licensed Domain Names, including without limitation Content posted by end users. Licensor shall also have the right to monitor and censor Content of the websites associated with Licensed Domain Names. Licensee shall remove any offending Content, including, but not limited to, any illegal materials, pornographic, obscene or sexually explicit materials, materials of a violent nature, or politically sensitive materials, from such websites as soon as possible after it becomes aware of such offending Content but in no event later than the timeframe prescribed by the Governmental Authority after receipt of oral or written notice from Licensor or such Governmental Authority. Licensee's failure to comply with this Section 3.3(a) shall be deemed a material breach of this Agreement. Without limiting the foregoing obligations, Licensee acknowledges that Licensor shall have the right to remove such offending Content from the websites associated with Licensed Domain Names. (b) New Restrictions Imposed by Governmental Authority. In the event Licensor receives notice from any Governmental Authority that the websites associated with the Licensed Domain Names contain offending Content where (i) the basis or nature of such offense has not previously been identified by any Governmental Authority as offensive or inappropriate and (ii) Licensee has not also received notice from such Governmental Authority, Licensor shall promptly notify Licensee of Licensor's receipt thereof. Licensee shall then use best efforts to remove such Content as soon as possible in accordance with the instructions of such Governmental Authority. Notwithstanding the foregoing or anything in Section 8.2 to the contrary, in the event Licensor fails to notify Licensee of Licensor's receipt of such notice from a Governmental Authority, such that Licensee does not have sufficient time to remove such offending Content, Licensee shall not be liable for any fines or penalties imposed by a Governmental Authority in connection with such offending Content. 3.4. Compliance with Laws. Licensee shall ensure that the Business complies with all applicable Laws in respect of operation, advertising and promotion of the Business and use of the Licensed Domain Names and Licensed Content in connection therewith. 3.5. Restrictions. Except as expressly permitted under the Trademark License Agreement, Licensee shall not knowingly (a) use the Licensed Domain Names in any manner that tarnishes, degrades, disparages or reflects adversely on Licensor or Licensor's business or reputation, (b) in any jurisdiction, register or attempt to register any domain names that consist of, in whole or in part, or are confusingly similar to, the term "SINA", (c) contest, challenge or otherwise make any claim or take any action adverse to Licensor's interest in the Licensed Domain Names, (d) register any trademarks, trade names or company names that consist of, in whole or in part, or are confusingly similar to the term "SINA" in the name of Licensee or of any of its Affiliates, or (e) use the Licensed Content and other Content for any unlawful purpose, including but not limited to displaying or distributing any pornographic, obscene or sexually explicit material, materials of a violent nature, or politically sensitive materials. In the event that Licensor reasonably determines that any violation of the foregoing by Licensee poses an immediate harm to Licensor's business, reputation or goodwill, Licensee shall promptly, following receipt of notice from Licensor, cease and desist all such non-conforming uses. 6 + +Source: LEJU HOLDINGS LTD, DRS (on F-1), 1/21/2014 + + + + + + ARTICLE IV OWNERSHIP 4.1. Ownership. Licensee acknowledges that, as between the Parties, Licensor (or its third party providers) is the owner of all right, title and interest in and to the Licensed Domain Names and Licensed Content, and all such right, title and interest shall remain exclusively with Licensor (or its third party providers). 4.2. Prosecution and Maintenance. As between Licensee and Licensor, Licensor shall have the sole and exclusive right and obligation to maintain and renew registrations for the Licensed Domain Names during the Term, and shall do so at its own cost and expense during the Term. Licensee shall not engage in the foregoing affairs, in particular, Licensee shall not change or apply for change of the domain name registration service agency for the Licensed Domain Names during the Term of this Agreement. ARTICLE V ENFORCEMENT 5.1. Licensor Enforcement. (a) Licensor shall have the right, but not the obligation, to take action against third parties in the courts, administrative agencies or otherwise, at Licensor's cost and expense, to prevent or terminate misuse, infringement, dilution, misappropriation, imitation or illegal use by third parties of the Licensed Domain Names or Licensed Content. (b) Licensee shall reasonably cooperate with Licensor in any action, suit or proceeding that the Licensor may undertake under this Section 5.1 (including, without limitation, executing, filing and delivering all documents and evidence reasonably requested by the Licensor) and shall lend its name to such action, suit or proceeding if reasonably requested by the Licensor or required by applicable Law. All reasonable out-of-pocket expenses incurred by the Licensee in connection therewith shall be reimbursed by the Licensor. The Licensee shall have the right to participate and be represented in any such action, suit or proceeding by its own counsel at its own expense. (c) All damages or other compensation of any kind recovered in any action, suit or proceeding undertaken under this Article V, or from any settlement or compromise thereof, shall be for the benefit of the Licensor, provided, however, that any compensation granted or awarded in light of any losses incurred by Licensee shall be for the benefit of the Licensee after Licensor's reasonable expenses for taking such action, suit or proceeding have been paid. ARTICLE VI TERM AND TERMINATION 6.1. Term. The initial term of this Agreement (the "Initial Term") shall commence on the Effective Date and shall continue for a period of ten (10) years thereafter. Beginning twelve (12) months prior to the expiration of the Initial Term, the Parties shall use 7 + +Source: LEJU HOLDINGS LTD, DRS (on F-1), 1/21/2014 + + + + + + good faith efforts to negotiate an extension of the term of this Agreement (the Initial Term together with any applicable extension, the "Term"). 6.2. Termination for Bankruptcy. Either Party may immediately terminate this Agreement in the event that the other Party (a) becomes insolvent or unable to pay its debts as they mature; (b) makes an assignment for the benefit of its creditors; (c) seeks relief, or if proceedings are commenced against such other Party or on its behalf, under any bankruptcy, insolvency or debtors' relief law and such proceedings have not been vacated or set aside within seven (7) days from the date of commencement thereof. 6.3. Termination for Breach. (a) By Licensor. Licensor may terminate this Agreement at any time in the event that the Licensee is in material default or breach of any provision of this Agreement, and, if such default or breach is capable of cure, such default or breach continues uncured for a period of thirty (30) days after receipt of written notice thereof; provided, however, that in the event that the Licensee has in good faith commenced cure within such thirty (30) day period, but cannot practically complete such cure within such thirty (30) day period, the Parties shall negotiate a reasonable additional time to cure. (b) By Licensee. Licensee may terminate this Agreement at any time in the event that the Licensor is in material default or breach of any provision of this Agreement, and, if such default or breach is capable of cure, such default or breach continues uncured for a period of thirty (30) days after receipt of written notice thereof; provided, however, that in the event that the Licensor has in good faith commenced cure within such thirty (30) day period, but cannot practically complete such cure within such thirty (30) day period, the Parties shall negotiate a reasonable additional time to cure. 6.4. Termination for a Change of Control. Licensor may terminate this Agreement by providing prior written notice to Licensee upon the occurrence of a Change of Control. 6.5. Termination in the Event of Termination of Agency Agreement. In the event that the Agency Agreement is terminated pursuant to Section 9.02(c)(iii) or 9.02(d)(i) thereof, this Agreement shall automatically be terminated as of the effective date of the termination of the Agency Agreement and shall thereafter be of no further force or effect except as set forth in Section 6.7. 6.6. Effect of Termination. (a) Upon termination (but not expiration) of this Agreement for any reason, Licensee shall be entitled to use the Licensed Domain Names and Licensed Content for a limited period of time, not to exceed ninety (90) days, during which it shall diligently work to transition to another solution. Upon expiration of this Agreement or such 90-day period, (i) all rights granted to Licensee under this Agreement with respect to the Licensed Domain Names and Licensed Content shall immediately cease, and (ii) Licensee shall immediately discontinue all use of the Licensed Domain Names and Licensed Content. 8 + +Source: LEJU HOLDINGS LTD, DRS (on F-1), 1/21/2014 + + + + + + (b) Upon termination or expiration of the Agency Agreement (other than as described in Section 6.5), Licensee's rights under Section 2.1(b) are terminated and Licensee shall immediately discontinue all use of the Licensed Content, provided, however that in the event the Agency Agreement is amended or restated, such amendment or restatement shall not be deemed a termination or expiration of the Agency Agreement. 6.7. Survival. The duties and obligations of the Parties under Articles IV, VI, VIII, IX and X and Section 7.2 of this Agreement shall survive any termination or expiration of this Agreement. ARTICLE VII REPRESENTATIONS AND WARRANTIES 7.1. Representations and Warranties. (a) By Each Party. Each of Licensee and Licensor represents and warrants to each other Party that: (a) it is a corporation duly incorporated, validly existing and in good standing under applicable Law; (b) the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby are within its corporate powers; (c) it has taken necessary steps to obtain authority and all necessary consents and approvals of any other third party or Governmental Authority to execute and perform this Agreement; (d) this Agreement has been duly executed and delivered by it and constitutes its valid and binding obligation, enforceable against it in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, or other laws affecting the rights of creditors' generally or by general principals of equity; and (e) the execution, delivery and performance of this Agreement will not conflict with or result in any breach of its charter or certificate of incorporation, bylaws, or other governing document, or any instrument, obligation, or contract to which it or its properties is bound. (b) By Licensor. Licensor represents and warrants that: i. It has the right to grant the licenses granted to Licensee hereunder; and ii. The Licensed Content and the Licensed Domain Names are, and the rights granted hereunder in connection with the Licensed Domain Names and Licensed Content are, substantially similar to the Licensed Content and the Licensed Domain Names and the rights that were granted to SINA Leju in connection therewith prior to the Effective Date. 7.2. Disclaimer. LICENSEE HEREBY ACKNOWLEDGES AND AGREES THAT EXCEPT AS EXPRESSLY SET FORTH HEREIN OR IN THE SHARE PURCHASE AGREEMENT, THE LICENSED DOMAIN NAMES AND THE LICENSED CONTENT ARE PROVIDED WITHOUT WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY, VALIDITY, NONINFRINGEMENT, FITNESS FOR A PARTICULAR PURPOSE OR OTHER WARRANTIES, WHETHER EXPRESS OR IMPLIED, AND LICENSOR HEREBY DISCLAIMS ANY AND ALL SUCH WARRANTIES. 9 + + ARTICLE VIII INDEMNIFICATION 8.1. Indemnification by Licensor. Licensor shall defend, indemnify and hold harmless Licensee and its Affiliates, and their respective officers, directors, employees, agents, shareholders, successors and assigns, (collectively, the "Licensee Parties") from and against any claim, suit, demand or action ("Action"), and any and all direct losses suffered or incurred by Licensee in connection with any third party claims arising out of or resulting from any breach by Licensor of any provision of this Agreement. Licensor's obligation to indemnify Licensee shall be conditioned on (a) Licensee's provision to Licensor of prompt notice of such an Action (except where any delay does not materially prejudice Licensor); (b) Licensee's reasonable cooperation with Licensor in the defense and settlement of such an Action at Licensor's cost; and (c) Licensor having exclusive control of the defense, settlement and/or compromise of such an Action (provided that Licensor may not settle any Action in a manner that adversely affects Licensee without Licensee's prior written consent, not to be unreasonably withheld or delayed). 8.2. Indemnification by Licensee. Licensee shall defend, indemnify and hold harmless Licensor and its Affiliates, and their respective officers, directors, employees, agents, shareholders, successors and assigns, (collectively, the "Licensor Parties") from and against any Action, and any and all direct losses suffered or incurred by Licensor in connection with any third party claims (a) arising out of or resulting from any breach by Licensee of any provision of this Agreement, (b) regarding the Content (other than Licensed Content) of the websites associated with Licensed Domain Names, or (c) regarding any Content that was subject to a request for removal by a Governmental Authority, even if Licensee removes such Content within the time period proscribed by the Governmental Authority, provided that, in all cases, Licensee shall not be liable for any direct losses suffered or incurred by Licensor as a result of Licensor's failure to provide Licensee with a reasonable period of time to remove Content in cases where (i) the basis or nature of the offense has not previously been identified by any Governmental Authority as offensive or inappropriate and (ii) Licensee has not also received notice from the Governmental Authority. Licensee's obligation to indemnify Licensor shall be conditioned on (x) Licensor's provision to Licensee of prompt notice of such an Action (except where any delay does not materially prejudice Licensee); (y) Licensor's reasonable cooperation with Licensee in the defense and settlement of such an Action at Licensee's cost; and (z) Licensee having exclusive control of the defense, settlement and/or compromise of such an Action (provided that Licensee may not settle any Action in a manner that adversely affects Licensor without Licensor's prior written consent, not to be unreasonably withheld or delayed). ARTICLE IX CONFIDENTIALITY 9.1. Confidential Information. In performing its obligations under this Agreement, either Party (the "Recipient") may obtain certain Confidential Information of the other Party. For purposes of this Agreement, "Confidential Information" shall mean information, documents and other tangible things, provided by either Party to the other, in whatever form, relating to such Party's business and marketing, including such + +Source: LEJU HOLDINGS LTD, DRS (on F-1), 1/21/2014 + + + + + +Party's financial information, personal information, customer lists, product plans and marketing plans, whether alone or in its compiled form and whether marked as confidential or not. The Recipient shall maintain in 10 + +Source: LEJU HOLDINGS LTD, DRS (on F-1), 1/21/2014 + + + + + + confidence all Confidential Information and shall not disclose such Confidential Information to any third party without the express written consent of the other Party except to those of its employees, subcontractors, consultants, representatives and agents as are necessary in connection with activities as contemplated by this Agreement. In maintaining the confidentiality of Confidential Information, the Recipient shall exercise the same degree of care that it exercises with its own confidential information, and in no event less than a reasonable degree of care. The Recipient shall ensure that each of its employees, subcontractors, consultants, representatives and agents holds in confidence and makes no use of the Confidential Information for any purpose other than those permitted under this Agreement or otherwise required by Law. Upon request by the other Party, the Recipient shall return, destroy or otherwise handle as instructed by the other Party, any documents or software containing such Confidential Information, and shall not continue to use such Confidential Information. 9.2. Exceptions. The obligation of confidentiality contained in Section 9.1 shall not apply to the extent that (a) the Recipient is required to disclose information by order or regulation of a Governmental Authority or a court of competent jurisdiction; provided, however, that, to the extent permitted by applicable Law, the Recipient shall not make any such disclosure without first notifying the other Party and allowing the other Party a reasonable opportunity to seek injunctive relief from (or a protective order with respect to) the obligation to make such disclosure; or (b) the Recipient can demonstrate that (i) the disclosed information was at the time of such disclosure to the Recipient already in (or thereafter enters) the public domain other than as a result of actions of the Recipient, its directors, officers, employees or agents in violation hereof, (ii) the disclosed information was rightfully known to the Recipient prior to the date of disclosure (other than pursuant to disclosure by the other Party pursuant to other agreements in effect between the Parties), or (iii) the disclosed information was received by the Recipient on an unrestricted basis from a source unrelated to any Party and not under a duty of confidentiality to the other Party. ARTICLE X GENERAL PROVISIONS 10.1. Taxes. Each Party shall be responsible for taxes that should be borne by it in accordance with applicable Law. If any Party pays any taxes that should have been borne by the other Party in accordance with Law, such other Party shall reimburse such Party within seven (7) days after its receipt of documentation evidencing such tax payment so incurred by such Party. 10.2. Expenses. Except as otherwise specified in this Agreement, all costs and expenses, including, fees and disbursements of counsel, financial advisors and accountants, incurred in connection with this Agreement and the transactions contemplated by this Agreement shall be borne by the party incurring such costs and expenses, whether or not the Closing shall have occurred. 10.3. Notices. All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be deemed duly given, made or received (i) on the date of delivery if delivered in person or by messenger service, (ii) on the date of confirmation of receipt of transmission by facsimile (or, the first (1 ) Business Day following such receipt if (a) such 11 + +s t + +Source: LEJU HOLDINGS LTD, DRS (on F-1), 1/21/2014 + + + + + + date of confirmation is not a Business Day or (b) confirmation of receipt is given after 5:00 p.m., Beijing time) or (iii) on the date of confirmation of receipt if delivered by an internationally recognized overnight courier service or registered or certified mail (or, the first (1 ) Business Day following such receipt if (a) such date of confirmation is not a Business Day or (b) confirmation of receipt is given after 5:00 p.m., Beijing time) to the respective parties hereto at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 10.3): if to Licensor: SINA Corporation 20/F Beijing Ideal International Plaza No. 58 Northwest 4th Ring Road Haidian District, Beijing, 100090 People's Republic of China Facsimile: +86 10 8260 7166 Attention: Head of Legal Department (Xie Guomin) with a copy (which shall not constitute notice) to: Shearman & Sterling LLP 12 Floor East Tower, Twin Towers B-12 Jianguomenwai Dajie Beijing 100022 People's Republic of China Facsimile: +86 10 6563 6001 Attention: Lee Edwards, Esq. if to Licensee: Beijing Yisheng Leju Information Services Co., Ltd. c/o CRIC Holdings Limited No. 383 Guangyan Road Shanghai 200072 People's Republic of China Facsimile: + 86 (21) 6086 7111 Attention: President with a copy (which shall not constitute notice) to: Skadden, Arps, Slate, Meagher & Flom 42/F, Edinburgh Tower, The Landmark 12 Queen's Road Central, Hong Kong Facsimile: +852 3740 4727 Attention: Jonathan B. Stone, Esq. and Z. Julie Gao, Esq. 10.4. Public Announcements. Other than (i) the filing with the SEC of the Form F-1, any amendments thereto and any other documents filed in connection with the Form F-1, 12 + +s t + +th + +Source: LEJU HOLDINGS LTD, DRS (on F-1), 1/21/2014 + + + + + + including the filing of this Agreement or (ii) any communications with the relevant stock exchange or regulators in connection with the IPO, in each case, as deemed necessary or desirable in the sole discretion of CRIC, neither party to this Agreement shall make, or cause to be made, any press release or public announcement in respect of this Agreement or the transactions contemplated by this Agreement or otherwise communicate with any news media without the prior written consent of the other party unless otherwise required by Law or applicable stock exchange regulation, and the parties to this Agreement shall cooperate as to the timing and contents of any such press release, public announcement or communication. 10.5. Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any Law or public policy, all other terms and provisions of this Agreement shall nevertheless remain in full force and effect for so long as the economic or legal substance of the transactions contemplated by this Agreement is not affected in any manner materially adverse to either party hereto. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the transactions contemplated by this Agreement are consummated as originally contemplated to the greatest extent possible. 10.6. Entire Agreement. This Agreement constitutes the entire agreement of the Parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, both written and oral, with respect to the subject matter hereof and thereto (including the Original Agreement). 10.7. Assignment. This Agreement and any rights or authority granted hereunder shall not be assigned or transferred by either Party, including by operation of law, merger or otherwise, without the express written consent of the other Party, provided that Licensor may assign this Agreement without consent to any of its Affiliates and Licensee may assign this Agreement without consent to SINA Leju or an Affiliate of Licensee that is controlled by SINA Leju. 10.8. Amendment. This Agreement may not be amended or modified except (a) by an instrument in writing signed by, or on behalf of, both Parties or (b) by a waiver in accordance with Section 10.9. 10.9. Waiver. Either Party may (a) extend the time for the performance of any of the obligations or other acts of the other Party, (b) waive any inaccuracies in the representations and warranties of the other Party contained herein or in any document delivered by the other party pursuant hereto or (c) waive compliance with any of the agreements of the other Party or conditions to such Party's obligations contained herein. Any such extension or waiver shall be valid only if set forth in an instrument in writing signed by the Party to be bound thereby. No waiver of any representation, warranty, agreement, condition or obligation granted pursuant to this Section 10.9 or otherwise in accordance with this Agreement shall be construed as a waiver of any prior or subsequent breach of such representation, warranty, agreement, condition or obligation or any other representation, warranty, agreement, condition or obligation. The failure of either party hereto to assert any of its rights hereunder shall not constitute a waiver of any of such rights. 13 + +Source: LEJU HOLDINGS LTD, DRS (on F-1), 1/21/2014 + + + + + + 10.10. No Third Party Beneficiaries. Except for the provisions of Article VII relating to indemnified parties, this Agreement shall be binding upon and inure solely to the benefit of the Parties and their respective successors and permitted assigns and nothing herein, express or implied (including the provisions of Article VII relating to indemnified parties), is intended to or shall confer upon any other Person any legal or equitable right, benefit or remedy of any nature whatsoever, including any rights of employment for any specified period, under or by reason of this Agreement. 10.11. Governing Law. This Agreement and any dispute or claim arising out of or in connection with it or its subject matter shall be governed by, and construed in accordance with, the laws of the People's Republic of China (without regard to its conflicts of laws rules that would mandate the application of the laws of another jurisdiction). 10.12. Dispute Resolution. (a) Any dispute, controversy or claim arising out of or relating to this Agreement, or the breach, termination or invalidity thereof (each, a "Dispute"), shall to the extent possible be settled through friendly consultation among the Parties hereto. The claiming Party (the "Claimant") shall promptly notify the other Party (the "Respondent") in a dated written notice that a Dispute has arisen and describe the nature of the Dispute. Any Dispute which remains unresolved within sixty (60) days after the date of such written notice shall be submitted to the China International Economic and Trade Arbitration Commission (the "Commission") to be finally settled by arbitration in Beijing, PRC in accordance with the Commission's then effective rules (the "Rules") and this Section 10.12. The language of the arbitration shall be Mandarin Chinese. (b) The arbitration tribunal shall consist of three (3) arbitrators. The Claimant shall appoint one (1) arbitrator, the Respondent shall appoint one (1) arbitrator, and the two (2) arbitrators so appointed shall appoint a third arbitrator. If the Claimant and the Respondent fail to appoint one (1) arbitrator, or the two (2) arbitrators appointed fail to appoint the third arbitrator within the time periods set by the then effective Rules, the relevant appointment shall be made promptly by the Commission. (c) Any award of the arbitration tribunal established pursuant to this Section 10.12 shall be final and binding upon the Parties, and enforceable in any court of competent jurisdiction. The Parties shall use their best efforts to effect the prompt execution of any such award and shall render whatever assistance as may be necessary to this end. The prevailing Party (as determined by the arbitrators) shall be entitled to reimbursement of its costs and expenses, including reasonable attorney's fees, incurred in connection with the arbitration and any judicial enforcement, unless the arbitrators determine that it would be manifestly unfair to honor this agreement of the Parties and determine a different allocation of costs. (d) The foregoing provisions in this Section 10.12 shall not preclude any Party from seeking interim or conservatory remedies, including injunctive relief, from any court having jurisdiction to grant such relief. 10.13. No Presumption. The Parties acknowledge that each has been represented by counsel in connection with this Agreement and the transactions contemplated by this Agreement. Accordingly, any applicable Law that would require interpretation of any claimed 14 + +Source: LEJU HOLDINGS LTD, DRS (on F-1), 1/21/2014 + + + + + + ambiguities in this Agreement against the Party that drafted it has no application and is expressly waived. If any claim is made by a Party relating to any conflict, omission or ambiguity in the provisions of this Agreement, no presumption or burden of proof or persuasion will be implied because this Agreement was prepared by or at the request of any Party or its counsel. 10.14. Specific Performance. The parties hereto acknowledge and agree that irreparable damage would occur if any of the provisions of this Agreement are not performed in accordance with their specific terms and that any breach of this Agreement could not be adequately compensated in all cases by monetary damages alone. Accordingly, in addition to any other right or remedy to which a party hereto may be entitled, at law or in equity, it shall be entitled to enforce any provision of this Agreement by a decree of specific performance and to temporary, preliminary and permanent injunctive relief to prevent breaches or threatened breaches of any of the provisions of this Agreement, without posting any bond or other undertaking. 10.15. Force Majeure. Neither Party shall be liable for failure to perform any of its obligations under this Agreement during any period in which such Party cannot perform due to hacker attack, fire, flood or other natural disaster, war, embargo, riot or the intervention of any Governmental Authority, provided, however, that the Party so delayed immediately notifies the other Party of such delay. In no event shall such nonperformance by Licensee be excused due to any such event for longer than ninety (90) days. 10.16. Counterparts. This Agreement may be executed and delivered (including by facsimile transmission) in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement. 10.17. Termination of Original Agreement. Pursuant to the Mutual Termination Agreement set forth in Exhibit B attached hereto, the Original Agreement shall be terminated as of the Effective Date. Notwithstanding anything in this Agreement to the contrary, this Agreement shall not become effective unless and until the Mutual Termination Agreement set forth in Exhibit B is executed. [SIGNATURES ON NEXT PAGE] 15 + +Source: LEJU HOLDINGS LTD, DRS (on F-1), 1/21/2014 + + + + + + IN WITNESS WHEREOF, each Party hereto has caused this Agreement to be executed by its duly authorized representatives on the date first set forth above. + + Beijing SINA Internet Information Service Co., Ltd. + + By: /s/ Charles Chao + + + + Name: + + + + Title: + + Beijing Yisheng Leju Information Services Co., Ltd. + + By: /s/ Fei Cao + + + + Name: + + + + Title: 16 + +Source: LEJU HOLDINGS LTD, DRS (on F-1), 1/21/2014 + + + + + + EXHIBIT A LICENSED DOMAIN NAMES house.sina.com.cn jiaju.sina.com.cn construction.sina.com.cn 17 + +Source: LEJU HOLDINGS LTD, DRS (on F-1), 1/21/2014 \ No newline at end of file diff --git a/full_contract_txt/LejuHoldingsLtd_20140121_DRS (on F-1)_EX-10.26_8473102_EX-10.26_Content License Agreement2.txt b/full_contract_txt/LejuHoldingsLtd_20140121_DRS (on F-1)_EX-10.26_8473102_EX-10.26_Content License Agreement2.txt new file mode 100644 index 0000000000000000000000000000000000000000..f72454b70b973dc9e3f0d8cef588859cd1bab439 --- /dev/null +++ b/full_contract_txt/LejuHoldingsLtd_20140121_DRS (on F-1)_EX-10.26_8473102_EX-10.26_Content License Agreement2.txt @@ -0,0 +1,43 @@ +EXHIBIT B MUTUAL TERMINATION AGREEMENT THIS MUTUAL TERMINATION AGREEMENT ("Termination Agreement") is made and entered into this day of , 2009, by and between Beijing SINA Internet Information Service Co. ("Beijing SINA") and Shanghai SINA Leju Information Technology Co. Ltd. ("SINA Leju"). WITNESSETH: WHEREAS, Beijing SINA and SINA Leju entered into that certain Domain Name License Agreement dated May 8, 2008 (the "Original Agreement"); and WHEREAS, Beijing SINA and SINA Leju desire to mutually terminate the Original Agreement effective as of the date of this Termination Agreement. NOW, THEREFORE, in consideration of the mutual covenants and conditions contained herein, and other good and valuable consideration, receipt of which is hereby acknowledged by each of the parties hereto, the parties agree as follows: 1. Beijing SINA and SINA Leju agree that, upon the date of execution of this Termination Agreement, the Agreement shall terminate and be of no further force or effect, and, for the avoidance of doubt, no provisions of the Original Agreement survive such termination. 2. This Termination Agreement represents the complete, integrated, and entire agreement between the parties, and may not be modified except in writing signed by the parties. 3. This Termination Agreement shall be governed by the laws of the PRC, without regard to conflicts of law principles. 4. This Termination Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together will constitute one and the same instrument. 5. This Termination Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. [SIGNATURES ON NEXT PAGE] 18 + +Source: LEJU HOLDINGS LTD, DRS (on F-1), 1/21/2014 + + + + + + IN WITNESS WHEREOF, the undersigned have executed this Termination Agreement as of the date first set forth above. + + Beijing SINA Internet Information Service Co., Ltd. + + By: + + + + + + + + Name: + + + + Title: + + Shanghai SINA Leju Information Technology Co. Ltd. + + By: + + + + + + + + Name: + + + + Title: 19 + +Source: LEJU HOLDINGS LTD, DRS (on F-1), 1/21/2014 \ No newline at end of file diff --git a/full_contract_txt/LifewayFoodsInc_20160316_10-K_EX-10.24_9489766_EX-10.24_Endorsement Agreement.txt b/full_contract_txt/LifewayFoodsInc_20160316_10-K_EX-10.24_9489766_EX-10.24_Endorsement Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..6a110abd5f16d79cd5c08beab0d7a1bbdd83d427 --- /dev/null +++ b/full_contract_txt/LifewayFoodsInc_20160316_10-K_EX-10.24_9489766_EX-10.24_Endorsement Agreement.txt @@ -0,0 +1,29 @@ +EXHIBIT 10.24 ENDORSEMENT AGREEMENT + +This Endorsement Agreement ("Agreement") is made this 14th day of March, 2016 ("Effective Date"), by and between Lifeway Foods, Inc. ("Lifeway") with a principal business address of 6431 West Oakton Street, Morton Grove, IL 60053 and Ludmila Smolyansky("Individual") on her own behalf with an address of 182 N. Harbor Drive, Chicago, IL 60602. Lifeway and Individual are collectively referred to as the "parties," or individually as a "party." The terms of the Agreement are as follows: 1. License - Individual grants Lifeway together with its affiliates, subsidiaries, parent companies and their representatives and employees have an unlimited, perpetual, non-exclusive, worldwide and, except as set forth in Section 9, royalty-free, right to use, reuse, publish, reproduce, perform, copy, create derivative works, exhibit, broadcast, and display throughout the world the name, image and likeness of Individual in Marketing Materials (as defined below) in connection with marketing, advertising or otherwise promoting the Lifeway products and/or services and for historical reference and display purposes and other internal purposes, including without limitation, internal sales meetings. Notwithstanding anything herein to the contrary, Lifeway shall be under no obligation to cause the Marketing Materials to be displayed, published or performed. Individual further waives the right to inspect or approve the Marketing Materials. 2. Marketing Materials - Marketing Materials shall mean those marketing, sales, advertising, publicity and promotional materials produced by Lifeway or produced on Lifeway's behalf that contain Individual's biographical materials, name, nickname, likeness, voice, photograph, signature or facsimile thereof, reviews, endorsements, testimonials, demonstrations, depictions of the same, or other identifying personal characteristics made in any and all forms of media, that reflect the personal opinions and views of the Individual in connection with Lifeway products and/or services in whatever medium whether now known or hereafter created including, without limitation, websites, intranets, social media, radio and television commercials, video and audio tapes, digitally formatted computer media including but not limited to internet and CD-ROMs, product labels, product packaging, point-of-purchase materials, trade, direct mail, magazines, newspapers, coupons, free standing inserts, and posters. 3. Release - Individual hereby releases and discharges Lifeway from any and all claims, demands, or causes of action in law or equity that he or she may have or may hereafter acquire, including without limitation in connection with any prior use, reuse, publication, reproduction, performance, copy, creation of derivative works, exhibition, broadcast, and display of the name, image and likeness of Individual and any and all claims for libel, slander, invasion of privacy, copyright or trademark violation, right of publicity, or false light, that may arise out of or in connection with the use of the Marketing Materials in accordance with this Agreement. 4. Right to Edit - Lifeway may modify and vary the Marketing Materials produced hereunder, as it may elect, and to make additional versions of such Marketing Materials in any manner without approval from Individual; provided that Individual shall not be required to render any services in connection with the production of such modifications or variations. Moreover, Individual understands and agrees that Lifeway may use the Marketing Materials with or without her name. + +Source: LIFEWAY FOODS, INC., 10-K, 3/16/2016 + + + + + +5. Ownership - Individual agrees that she does not have, and shall not claim to have, either under this Agreement or otherwise, any right, title or interest of any kind or nature in and to the ideas, likenesses, images, announcements, phrases, titles, music or words used in the Marketing Materials, and that all rights therein, including the copyright, are recognized to be owned by Lifeway. 6. Non-Competing Services - Individual agrees that, during the Term hereof, she will not render similar services for, or permit the use of her name, nickname, likeness, voice, live or recorded performance, photograph, signature or facsimile thereof, and biographical materials in advertising or publicizing in any medium for any other Kefir product, yogurt product, cheese, frozen desserts and other products that compete with products manufactured or distributed by Lifeway and its affiliates, subsidiaries and parent companies other than those products manufactured or distributed by Lifeway and its affiliates, subsidiaries, and parent companies. 7. Representation - Individual represents and warrants that any testimonial or review provided reflects her own honest opinions, findings, beliefs, or experiences. Individual represents that she is a bona fide user of Lifeway products and/or services. 8. Indemnification - Individual agrees to indemnify, defend and hold harmless Lifeway from and against any and all claims, actions, causes or other expenses incurred arising from any misrepresentations or false statements made by the Individual in the Marketing Materials. 9. Compensation (a) In consideration of the rights granted by Individual hereunder, Lifeway agrees to pay Individual a royalty (the "Royalty") equal to $0.02 for each Lifeway product or individual item sold by Lifeway during each calendar month of the Term bearing Individual's first name, last name or other identifying personal characteristics; provided, however, the Royalty will cease being paid upon the death of Individual. Notwithstanding anything to the contrary herein, the Royalty will not exceed $50,000 in any month. All undisputed Royalty payments shall be made in U.S. dollars in cash or to the order of Individual and shall be due and payable within thirty (30) days after the end of each calendar month for sales during the previous month. (b) All amounts due under this Agreement are net of any applicable taxes, duties, fees or governmental charges, including without limitation, transfer tax, sales tax, use tax, consumption tax, value-added tax, excise tax, import tax, export tax, and custom duties (collectively "Taxes"). Accordingly, Lifeway will be solely responsible for the payment of all Taxes, together with any related liabilities (including interest and penalties), imposed upon it by law or any governmental authority for which Lifeway is primarily liable. (c) The Royalty due hereunder shall be paid to Individual at the address set forth above. 10. Confidentiality - With respect to this Agreement and any information supplied in connection with this Agreement and designated by the disclosing party as confidential, the recipient agrees to: (i) protect the confidential information in a reasonable and appropriate manner; (ii) use confidential information only to perform its obligations under this Agreement; and (iii) reproduce confidential information only as required to perform its obligations under this Agreement. This section shall not apply to information that is: (i) publicly known; (ii) already known to the recipient; (iii) disclosed to a third party without restriction; (iv) independently developed; or (v) disclosed pursuant to legal requirement or order. + +Source: LIFEWAY FOODS, INC., 10-K, 3/16/2016 + + + + + +11. Mutual Representations, Warranties and Covenants - Each party (the "Warranting Party"), to induce the other party to enter into this Agreement, represents, warrants and covenants that: (a) the Warranting Party has the full right and authority, and possesses all licenses, permits, authorizations and rights to intellectual property required to enter into this Agreement and to perform the acts required of it hereunder; (b) the performance by the Warranting Party pursuant to this Agreement and/or the rights in this Agreement granted to the other party will not conflict with or result in a breach or violation of any of the terms or provisions, or constitute a default under any agreement by which the Warranting Party is bound; and (c) with respect to the performance of its obligations hereunder, the Warranting Party will comply with all applicable laws, rules and regulation. 12. Assignment - Neither party will assign any of its rights or obligations under this Agreement without the prior written consent of the other party, such consent not to be unreasonably, conditioned, withheld or delayed. 13. Notice - Notices to the parties shall be sent via overnight mail or U.S. Certified Mail or overnight express or priority mail to the addresses listed in the Agreement. Either party may change its address upon written notice to the other party. Written notices for approvals under this agreement may be via email. 14. [Intentionally Omitted.] 15. Choice of Law and Forum - This Agreement will be construed and governed in accordance with the laws of the State of Illinois, without regard to conflict of laws principles. 16. Survival - Unless and to the extent otherwise specified herein, all terms of this Agreement which by their nature extend beyond its termination, remain in effect until fulfilled, and apply to respective successors and assigns. 17. Force Majeure - If performance hereunder is prevented, restricted or interfered with by any act or condition whatsoever beyond the reasonable control of a party, the party so affected, upon giving prompt notice to the other party, will be excused from such performance to the extent of such prevention, restriction or interference. 18. Waiver - The waiver by either party of a breach or a default of any provision of this Agreement by the other party will not be construed as a waiver of any succeeding breach of the same or any other provision. + +Source: LIFEWAY FOODS, INC., 10-K, 3/16/2016 + + + + + +19. Counterparts and Facsimile Signatures - This Agreement may be executed in multiple counterparts and via facsimile, each of which will be deemed to be an original, but all of which together constitute one and the same instrument. 20. Entire Agreement and Amendment - This Agreement, together with all exhibits, schedules and attachments, constitutes the entire agreement between the parties with respect to the subject matter hereof. This Agreement supersedes, and the terms of this Agreement govern, any prior agreements with respect to the subject matter hereof with the exception of any prior confidentiality agreements between the parties. This Agreement may only be changed by mutual agreement of authorized representatives of the parties in writing. IN WITNESS WHEREOF Lifeway has caused its duly authorized representatives to execute this Agreement and Individual has signed the Agreement on her own behalf as of the Effective Date. Lifeway Foods, Inc. Ludmila Smolyansky By: /s/ Julie Smolyansky By: /s/ Ludmila Smolyansky Name: Julie Smolyansky Title: CEO Date: March 14, 2016 Date: March 14, 2016 + +Source: LIFEWAY FOODS, INC., 10-K, 3/16/2016 \ No newline at end of file diff --git a/full_contract_txt/LinkPlusCorp_20050802_8-K_EX-10_3240252_EX-10_Affiliate Agreement.txt b/full_contract_txt/LinkPlusCorp_20050802_8-K_EX-10_3240252_EX-10_Affiliate Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..ec6596a77a76b8c0bcfa6550b915581085608607 --- /dev/null +++ b/full_contract_txt/LinkPlusCorp_20050802_8-K_EX-10_3240252_EX-10_Affiliate Agreement.txt @@ -0,0 +1,207 @@ +EXHIBIT 10.1 + + AFFLIATE AGREEMENT DATED JULY 15, 2005 + + AFFILIATE AGREEMENT + + This Agreement entered into as of the Effective Date by and between Link Plus Corporation and Axiometric, LLC. + + RECITALS + + WHEREAS, Axiometric has developed certain computer software including wireless mesh networking technology and AMR devices and systems; + + WHEREAS, LKPL has developed certain radio devices and systems along with hardware manufacturing capacities and plans to develop AMR devices and systems; + + WHEREAS, LKPL and Axiometric believe it will be in their mutual best interests to cooperate in further developing AMR product suites by creating a preferred provider relationship between themselves; + + WHEREAS, LKPL and Axiometric entered into a Letter of Intent dated May 3, 2005, and now desire to further describe their relationship as initially set forth in the non-binding portions of that Letter of Intent. + + NOW, THEREFORE, in consideration of the mutual promises contained herein, the fees to be paid in connection therewith, and other good and valuable consideration, the sufficiency of which is hereby acknowledged, the parties intending to be legally bound, hereby agree as follows: + +1. DEFINITIONS + + 1.1 Throughout this Agreement, and unless the context otherwise requires, the terms shown on Exhibit A (whether or not capitalized) shall have the meanings there specified. If other terms are defined in the text of this Agreement, then throughout this Agreement, those terms shall have the meanings respectively ascribed to them. + +2. OFFICE SPACE + + 2.1 During the term of this Agreement, LKPL will provide Axiometric with a license to use office space in LKPL's corporate facility in Columbia, Maryland, free of charge. + + 2.2 LKPL will allow Axiometric to use enough office space for two individuals and associated equipment in locations convenient for LKPL's purposes for as long as that space is available and not needed by LKPL for its own purposes. Axiometric will have access to LKPL's telephone system, internet connections, conference room, and printers. + + 2.3 If LKPL requires space used by Axiometric for LKPL's own purposes, then LKPL will attempt in good faith but without having any obligation to continue to provide Axiometric with comparable space. If LKPL deems itself unable to continue to provide Axiometric work space without expanding LKPL's facilities, and if LKPL determines it will be in its own best interests to expand its facilities, then LKPL will afford Axiometric the opportunity to lease space in the new facilities under a mutually acceptable separate commercial rental agreement. If Axiometric does not then wish to rent office space from LKPL, then LKPL may terminate Axiometric's license to use work space in LKPL's facility upon 60 days notice. + +Source: LINK PLUS CORP, 8-K, 8/2/2005 + + + + + + 2.4 Axiometric shall be solely responsible for providing all equipment, furniture, supplies and other personal property that Axiometric deems appropriate to operate its business. LKPL will have no obligation to provide any special facilities or infrastructure unless otherwise negotiated. + + 2.5 LKPL will have no liability whatsoever for any of Axiometric's equipment, furniture, supplies or other personal property; Axiometric will use the space at its sole risk. + + 2.6 Axiometric will have the right to terminate the license to use the office space and to move out of the office space at any time upon two weeks notice. + + 2.7 Axiometric must at all times use the office space strictly in accordance with terms and conditions stated in LKPL's lease for the space. + + 2.8 Axiometric must indemnify and hold LKPL and its officers, directors, stockholders, agents, contractors, employees and guests (collectively, the "Indemnified Parties") harmless from and against any and all Loss that the Indemnified Parties may incur arising from or relating to Axiometric use of the office space, including but not limited to any Loss suffered by the Indemnified Parties as a result of any negligent acts or omissions of Axiometric, its employees, agents, contractors and representatives, or anyone else working under Axiometric or in the office with the permission of Axiometric. + +3. AUTOMATIC METER READING + + Axiometric and LKPL agree to jointly pursue accessing and commercially penetrating the AMR market by developing a suite of qualified and commercially marketable product suites for that market, marketing and selling that suite of products. The following shall be the general roles and responsibilities of the two companies with respect to AMR efforts: + + 3.1 AMR Products + + 3.1.1 Water Meter Development: Axiometric and LKPL are jointly developing an AMR product for remote reading of residential water utility meters (hereafter the Water Meter). The Water Meter is a hardware device with integral software. The software includes, under license, the Axiometric wireless mesh networking intellectual property. The Water Meter is capable of interfacing with a variety of water meter registers, recording water usage, logging various exceptional conditions, and reporting them via a radio link. The Water Meter is also capable of forming a mesh network with other Water Meters to extend the radio reporting range using the aforementioned Axiometric mesh networking intellectual property. The Water Meter software and hardware are based on existing Axiometric electric meter AMR hardware and software products; joint ownership of the Water Meter does not convey joint ownership of those existing products or of the mesh networking intellectual property. + + New software and hardware designs and intellectual property developed in the course of the Water Meter development are jointly owned; specifically, the algorithms used to collect data directly from a Water Meter using a point-to-point link (drive-by data collection), the specific hardware designs related to water register interface, battery power management, and other intellectual property specifically + +Source: LINK PLUS CORP, 8-K, 8/2/2005 + + + + + + described and mutually agreed in writing as amendments to this Agreement. Joint ownership conveys to each party individually the right to use, sell, modify, and create derived works from said intellectual property, as well as the right to sub-license these rights to others. + + 3.1.2 Energy AMR Product Suite: Axiometric has developed an AMR product suite for use in energy (electric) metering consisting of a meter insert for interfacing to energy meters, recording usage and exceptional conditions, and transmitting the information via radio to a central collector. Axiometric has also developed mesh networking intellectual property to allow the meter inserts to relay information from insert to insert thus extending the range and reliability of such information transmissions. Axiometric has also developed a central collection unit (hereafter Mesh Controller or Gateway) capable of collecting usage and other information from a large number of meter inserts and relaying that information onto another communications medium (radio, GSM, etc.) for delivery to a processing system. Axiometric has also developed processing software for recording the collected data to a database, presenting + + and managing that information, and exporting the data to other processing systems. This collection of products forms an energy metering (electric) AMR Product Suite that is owned by Axiometric. + + 3.1.3 Axiometric and LKPL may develop other AMR Product Suites (e.g. for gas metering) and ownership of those AMR Product Suites will be held individually by the developer of the suite or jointly if mutually agreed to in writing. + + 3.2 Marketing and Sales: Regardless of ownership and in order to coordinate marketing and prevent overlap and confusion by customers and potential customers, all sales and marketing shall be conducted as follows: + + 3.2.1 Axiometric shall have the exclusive right to market and sell AMR Product Suites to entities whose corporate headquarters are physically located in the United States and U.S. territories with the exception of Datamatic as defined in 3.3.1 and 3.3.2 below + + 3.2.2 LKPL shall have the exclusive right to market and sell AMR Product Suites to Datamatic LTD, a Plano TX corporation (hereafter Datamatic). + + 3.2.3 LKPL shall have the exclusive right to market and sell AMR Product Suites to entities whose corporate headquarters are physically located outside the United States and its territories. + + 3.2.4 The proceeds of all sales shall be distributed pursuant to the terms of this Agreement as set forth in Section 3.3 [Proceeds] below. + + 3.3 Proceeds: As a result of the different ownership interests, marketing relationships, and this Agreement, the proceeds of sales of AMR Product Suites shall be as follows unless otherwise mutually agreed in writing: + + 3.3.1 For sales of Water Meter AMR Product Suites to Datamatic, LKPL shall set the price of Water Meter AMR Product Suite sales to Datamatic. LKPL shall pay + +Source: LINK PLUS CORP, 8-K, 8/2/2005 + + + + + + Axiometric the higher of a) five-percent (5%) of the Gross Proceeds or b) twenty-five-percent (25%) of the Net Proceeds of all Water Meter AMR Product Suite sales. + + 3.3.2 For sales of Electric Meter AMR Product Suites to Datamatic, Axiometric shall set the price of Electric Meter AMR Product Suite sales to Datamatic. LKPL shall pay Axiometric Net Proceeds less the higher of a) five-percent (5%) of the Gross Proceeds or b) twenty-five-percent (25%) of the Net Proceeds. + + 3.3.3 For sales of AMR Product Suites by LKPL, other than sales to Datamatic as defined above: LKPL shall pay Axiometric the higher of: + + a) five-percent (5%) of the Gross Proceeds OR b) twenty-percent (25%) of the Net Proceeds + + 3.3.4 For sales of AMR Product Suites by Axiometric, other than sales to Datamatic as defined above, and other than AMR product suites for use in electric/energy metering: Axiometric shall pay LKPL the higher of: + + a) five-percent (5%) of the Gross Proceeds OR b) twenty-percent (25%) of the Net Proceeds + + 3.3.5 Payments to Axiometric for sales of the AMR Product Suite shall be in lieu of any licensed IP Royalty payments for those products. + + 3.4 Manufacturing: During the term of this Agreement, Axiometric shall issue a Request for Manufacture (RFM) for any AMR hardware to be sold by Axiometric under the terms of this Agreement. The RFM shall specify delivered product cost, credit requirements, delivery schedules, warranty service, quality using industry standard terms, and other industry standard manufacturing requirements. As the preferred manufacturer, LKPL shall have first right of refusal on all such RFMs. If LKPL does not respond to an RFM within thirty (30) days, or cannot provide competitive terms (such as cost, credit, quality, schedule), Axiometric will be free to award the manufacturing contract to an alternate manufacturer. + + 3.5 Payments: As defined in section 3.3 above, selling parties may owe the other party some portion of the Proceeds. The payment of amounts owed shall be performed as follows: + + 3.5.1 Payments due shall be made within 45 days of the close of each calendar quarter. + + 3.5.2 Payments that are not received within thirty (30) days after their due date will bear interest at the rate of twelve percent (12.0%) per annum compounded monthly from the due date until such payment is received. + + 3.5.3 Payments not received within sixty (60) days after their due date will be considered a material breach of this Agreement and the party due payment may pursue any and all legal action to recover the payment and reasonable legal fees incurred in the pursuit of said payment. + +Source: LINK PLUS CORP, 8-K, 8/2/2005 + + + + + + 3.5.4 Both parties are entitled to reports of sales and to conduct periodic audits to ensure accuracy of Payments as follows: + + a. Each party will provide to the other a quarterly report (in hard copy and electronic copy (if applicable)) showing the AMR Product Suite sales including the Gross Proceeds and the Production Costs. + + b. Each party shall have the right to conduct an audit after the end of each calendar year to verify the accuracy of the other party's quarterly reports for that year, provided the audit must be initiated no later than June 30th of each year, and that if no such audit is conducted, then the quarterly reports for that year will be deemed accurate. + + c. In the event a Payee's audit shows that the Gross Proceeds or Production Costs of the Payor resulted in an under-payment to the Payee, then the Payor shall have the right, at the Payor's cost, to have its own auditor verify the Payee's audit. If the Payor audit confirms the report of the Payee's auditor, then the Payor will pay the deficiency within fifteen (15) days from the time Payee invoices for the deficiency. + + d. In the event a Payee's audit shows that the Gross Proceeds or Production Costs of the Payor resulted in an under-payment of more than three percent (3.0%) to the Payee, then the Payor shall have the right, at the Payor's cost, to have its own auditor verify the audit. If the Payor audit confirms the report of the Payee's auditor, then the Payor will pay the deficiency and the cost of the Payee's audit within fifteen (15) days from the time Payee invoices for those fees and provides standard proof of the time and expenses incurred. + +4. RELATIONSHIP OF THE PARTIES + + 4.1 The parties will be joint venturers only as to those activities that they jointly undertake for the AMR market as described in section 3 above; otherwise they shall be independent of each other, with full control over their respective activities without the need to account to the other, and independent contractors as to all work performed under separate agreements. Even though the parties will be joint ventureres as to the AMR market, neither party will have the right to bind the other in any way without the other party's express consent, and this Agreement shall not otherwise be construed to make any party the agent, assignee, employee, + + fiduciary, investor, joint venturer, partner, or representative of any other party. + +5. TERM + + This Agreement will remain in force for perpetuity or until and unless otherwise mutually agreed or amended in writing by both parties. + +6. NOTICES + +Source: LINK PLUS CORP, 8-K, 8/2/2005 + + + + + + All notices and communications required or permitted to be given under this Agreement will be deemed given after receipt when sent by United States Postal Service as registered or certified mail, postage prepaid, and addressed to the other party at the notice addresses set forth on the signature page (unless by such notice a different person or address shall have been designated) + +7. ADDITIONAL PROVISIONS. + + 7.1 This Agreement may not be assigned in whole or in part by either party without prior written consent of the other. + + 7.2 All actions, cases, suits and proceedings in connection with this Agreement shall be brought in Maryland. All persons affected by this Agreement specifically consent to the personal jurisdiction of and venue in said courts. No action, case, suit or proceeding, regardless of form, arising out of or related to this Agreement, may be brought by either party more than one (1) year after the cause of action has arisen, or in the case of nonpayment, more than two (2) years from the date of the last payment. ALL ACTIONS, CASES, SUITS AND PROCEEDINGS SHALL BE HEARD WITHOUT A JURY. ALL PERSONS AFFECTED BY THIS AGREEMENT SPECIFICALLY WAIVE ALL RIGHT TO A TRIAL BY JURY AND SPECIFICALLY CONSENT TO THE PERSONAL JURISDICTION OF AND VENUE IN SAID COURTS. + + 7.3 If suit or action is instituted to enforce any of the terms of this Agreement, then the prevailing party shall be entitled to recover from the other party such sums as the Court may adjudge reasonable as attorney's fees at trial on or appeal of such suit or action, in addition to all other sums provided by law. + + 7.4 This Agreement shall be construed and governed in accordance with the laws of the State of Maryland regardless of the place or places of its physical execution and performance. + + 7.5 This Agreement includes all Recitals, attachments, exhibits, schedules, the Software License Agreement, and contains the entire agreement of + + the parties. It may not be changed orally but only by agreement in writing signed by the party against whom enforcement of any amendment, waiver, change, modification, extension or discharge is sought. + +IN WITNESS WHEREOF, LKPL and Axiometric have executed this Agreement below. + +LINK PLUS CORPORATION AXIOMETRIC, LLC + +By: By: --------------------------- -------------------------------- Robert L. Jones, Jr. Frank Moody Chairman, CEO Managing Director + +Notice Addresses: + +Link Plus Corporation 6996 Columbia Gateway Drive, Suite 104 Columbia, MD 21046 Attention: Chief Operating Officer + +Axiometric, LLC 10718 Vista Road Columbia, MD 21044 + +Source: LINK PLUS CORP, 8-K, 8/2/2005 + + + + + + EXHIBIT A - SELECTED DEFINITIONS + +"Axiometric" means Axiometric, LLC. a Maryland limited liability company, having a principal place of business at 10718 Vista Road, Columbia, Maryland 21044. + +"Effective Date" means July 15, 2005. + +"Inventions" include creations, discoveries, hardware, inventions, prototypes, product suites, software, works of original authorship, and other intellectual property. + +"AMR Product Suite" is a collection of hardware and software products that together allow a utility to record, transmit, collect, and process utility (e.g. gas, water, electric) customer usage data and exceptional conditions. + +"LKPL" means Link Plus Corporation, a Delaware corporation having a principal place of business at 6996 Columbia Gateway Drive, Columbia, Maryland, 21046 + +"Loss" includes actions, claims, costs, debts, demands, encumbrances, expenses (including all reasonable attorneys fees, costs and litigation expenses), fines, liens, liabilities and obligations. + +"Gross Proceeds" means the actual sums collected for the sale of any and all products in an AMR Product Suite. + +"Net Proceeds" means the Gross Proceeds less the Production Cost (as defined below). + +"Production Cost" means actual cost (including reasonable and competitive allowances for: materials, labor, overhead, other fixed costs, delivery, profit, taxes and duties) incurred in manufacturing and delivering AMR products. Reasonable and competitive is defined as being at or below the costs of competing manufacturers with similar capabilities manufactured under similar terms. + +"Royalty" means the royalty payable by LKPL to Axiometric under the Software License Agreement between the parties. + +Source: LINK PLUS CORP, 8-K, 8/2/2005 \ No newline at end of file diff --git a/full_contract_txt/LiquidmetalTechnologiesInc_20200205_8-K_EX-10.1_11968198_EX-10.1_Development Agreement.txt b/full_contract_txt/LiquidmetalTechnologiesInc_20200205_8-K_EX-10.1_11968198_EX-10.1_Development Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..f68e3018f6e6fc1c3d68ea336fcb68e5eac698d6 --- /dev/null +++ b/full_contract_txt/LiquidmetalTechnologiesInc_20200205_8-K_EX-10.1_11968198_EX-10.1_Development Agreement.txt @@ -0,0 +1,211 @@ +Exhibit 10.1 BUSINESS DEVELOPMENT AGREEMENT THIS BUSINESS DEVELOPMENT AGREEMENT (the "Agreement") is effective as of , 2020 (the "Effective Date"), by and between LIQUIDMETAL TECHNOLOGIES, INC., a Delaware corporation having its principal place of business at 20321 Valencia Circle, Lake Forest, California 92630 ("Liquidmetal"), and EUTECTIX, LLC, a Delaware limited liability company having an address of 323 Main Street, Chatham, New Jersey 07928 ("Eutectix"). Liquidmetal and Eutectix are sometimes referred to herein individually as a "Party" or collectively as the "Parties." RECITALS WHEREAS, Liquidmetal is a global leader in the development and pursuit of applications for amorphous alloys and has developed relationships with various prominent corporations with respect to the development of parts and products made from amorphous alloys; WHEREAS, Eutectix is a global leader in the development and production of amorphous alloys and other high-quality technical alloys, and possesses certain intellectual property in connection therewith which is not provided for under this Agreement; WHEREAS, Liquidmetal and DongGuan Eontec Co., Ltd. ("Eontec") are parties to a Parallel License Agreement dated March 10, 2016 (the "Affiliate License Agreement"), pursuant to which Liquidmetal and Eontec license to each other certain technology and intellectual property relating to bulk metallic glasses as further described therein, a copy of which has been provided to Eutectix; WHEREAS, Liquidmetal desires to utilize Eutectix's capabilities with respect to amorphous alloy development and the manufacture of amorphous alloy parts, which Liquidmetal develops with, and intends to sell to, Liquidmetal's customers, and Eutectix is interested in providing such product development and manufacturing services to Liquidmetal; WHEREAS, Liquidmetal and Eutectix desire to further collaborate with respect to the advancement and commercialization of amorphous alloy materials and technologies; WHEREAS, Eutectix desires to utilize Liquidmetal processing equipment and methodologies to independently develop new metallic glass technologies, including, but not limited to, new metallic glass alloys and related products for sale, as further described herein; and WHEREAS, the Parties perceive an opportunity for shared growth in worldwide sales of products made from bulk metallic glasses. NOW THEREFORE, in consideration of the premises and the mutual covenants and agreements set forth herein and other good and valuable consideration, the receipt and sufficiency are hereby acknowledged, the Parties hereto hereby agree as follows: + +Source: LIQUIDMETAL TECHNOLOGIES INC, 8-K, 2/5/2020 + + + + + +AGREEMENT 1. TERM. The initial term of this Agreement shall commence on the Effective Date and shall continue until the fifth (5t h) anniversary of the Effective Date (the "Term"), unless the Agreement is sooner terminated in accordance with the terms of this Agreement. Upon the expiration of the Term, the Term shall automatically extend for successive 12-month periods until one Party terminates the Agreement by providing at least 180 days prior written notice to the other Party prior to the expiration of the then-current term or unless sooner terminated in accordance with the terms of this Agreement. 2. EQUIPMENT AND ALLOY. 2.1 Equipment License. Upon and subject to the terms and conditions stated in this Agreement, on the Effective Date, for the consideration described in this Agreement and Eutectix's performance of its other obligations under this Agreement, Liquidmetal grants to Eutectix the right and license to use the following equipment owned by Liquidmetal (the "Licensed Equipment") (i) solely for use on Liquidmetal's behalf, (ii) for Eutectix's own limited use in the production of Liquidmetal Products (as defined below) or Licensed Products (as defined below), (iii) for the continued development of applications utilizing bulk metallic glasses in cooperation between Liquidmetal and Eutectix, and (iv) independently by Eutectix pursuant to the terms of this Agreement: (a) Two (2) Engel e-motion 310/120 injection molding machines, and associated equipment; (b) Two (2) Eontec 300-C Die Casting Machines, and associated equipment; (c) One (1) Flow M21313B Waterjet Machine; (d) Two (2) DMG Mori Milltap 700 CNC machines, and associated consumables and fixtures; (e) Equipment for cut, mount, and polish analysis operations, including: i. One (1) Struers Accutom-10 cut-off machine ii. One (1) Struers Secotom-50 precision cutting machine iii. One (1) Struers Tegramin-30 tabletop grinding machine iv. One (1) Keyence VH X-S550E microscope (f) Equipment required for vibratory deburring operations, including: i. One (1) Rosler R 125 EC-KF rotary vibrator ii. One (1) Rosler R 125 EC rotary vibrator 2 + +Source: LIQUIDMETAL TECHNOLOGIES INC, 8-K, 2/5/2020 + + + + + +(g) Equipment required for passivation operations, including: i. One (1) ESMA, Inc. E782C ultrasonic cleaning system (h) One (1) Dry Cooler D455 chill water system; (i) One (1) MTS 810 MTS mechanical testing frame; and (j) Molds and fixtures needed for production of sample parts. 2.2 Alloys Purchase. Upon and subject to the terms and conditions of this Agreement, on the Effective Date, for such consideration as described in this Agreement and Eutectix's performance of its other obligations pursuant to this Agreement, Liquidmetal hereby sells, assigns, conveys, transfers, and delivers to Eutectix, and Eutectix hereby acquires from Liquidmetal, free and clear of all liens (other than and to the extent that liens may be imposed by or arise by operation of law), all of Liquidmetal's right, title, and interest in and to the following alloys (the "Transferred Alloy"), subject to Liquidmetal's right to use said Transferred Alloy or the corresponding replacement thereof as specified in this Agreement: (a) Approximately three thousand kilograms (3,000 kg) of "virgin" LM105 Alloy (b) Approximately one thousand kilograms (1,000 kg) of "virgin" 106C Alloy (c) Approximately two thousand kilograms (2,000 kg) of LM 105 Alloy revert 2.3 Shipment and Delivery. Licensed Equipment and Transferred Alloy shall be delivered to Eutectix Ex Works Lake Forest (as defined by Incoterms 2010). Title to the Transferred Alloy shall vest to Eutectix at the point of delivery. Eutectix will bear all delivery and shipping expenses with respect to the Licensed Equipment and Transferred Alloy from Liquidmetal's facility. THE LICENSED EQUIPMENT AND TRANSFERRED ALLOY ARE BEING PROVIDED "AS IS" AND "WITH ALL FAULTS" AND WITH NO WARRANTIES OF ANY KIND, INCLUDING WITHOUT LIMITATION WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE. 2.4 License. Liquidmetal grants to Eutectix during the Term of this Agreement and subject to the Field of Use Restrictions (as defined below), a royalty-bearing, worldwide, non-transferrable, non-exclusive license (or sublicense as the case may be) to the Licensed Patents (as defined below) and the Licensed Technical Information (as defined below) to make and have made, assemble and have assembled, use, sell, offer to sell, import and offer to import, export and offer to export, distribute and offer to distribute, repair, reconstruct, practice, and maintain Licensed Products in the Field (as defined below). The foregoing Licensed Patents and Licensed Technical Information shall not include the right to sublicense the Licensed Patents and Licensed Technical Information without the prior written consent of Liquidmetal. For purposes hereof, the following definitions and provisions shall apply: (a) "Field" shall mean all fields of use except as described in the Field of Use Restrictions. (b) "Field of Use Restrictions" shall mean the exclusions, conditions, limitations, and restrictions described on Schedule 1 to this Agreement. 3 + +Source: LIQUIDMETAL TECHNOLOGIES INC, 8-K, 2/5/2020 + + + + + +(c) "Licensed Patents" shall mean any and all Patents of Liquidmetal or any Affiliate of Liquidmetal in existence at any time during the term of this Agreement. (d) "Liquidmetal Product" shall mean any product or component made with one or more amorphous alloys or bulk metallic glasses (or composite materials containing amorphous alloys or bulk metallic glasses) (i) pursuant to an Order (as defined below) for and on behalf of Liquidmetal by Eutectix in connection with the Licensed Equipment; (ii) purchased by Liquidmetal from third party manufacturers other than Eutectix, and (iii) manufactured by Liquidmetal directly. (e) "Licensed Product" shall mean any metallic glass product produced by Eutectix for its customers (i) the manufacture, use, offer for sale, sale or importation of which by Eutectix or its permitted sublicensees would, but for this Agreement, infringe a valid claim of a Licensed Patent in a jurisdiction where such valid claim exists, (ii) that incorporates or uses any element of the Licensed Technical Information in its design or manufacture, or (iii) that is manufactured or processed in any respect, in whole or in part, with any part of the Licensed Equipment listed in Sections 2.1(a) and (b). (f) "Licensed Technical Information" shall mean all information as documented in Schedule 3 hereto, as may be amended from time to time, including but not limited to, unpublished research and development information, unpatented inventions, know-how, trade secrets, and technical data, of which Eutectix has no prior knowledge (where prior knowledge cannot be proven or documented) and is not generally available in the public domain, which such Licensed Technical Information is in the possession of Liquidmetal and is reasonably necessary or useful for using the Licensed Patents to produce Licensed Products within the Field, provided Liquidmetal has the right to disclose such items to Eutectix. Liquidmetal shall deliver all available Licensed Technical Information to Eutectix within ten (10) days of the Effective Date. (g) "Patents" shall mean any and all letters patents (including, but not limited to, patents of implementation, improvement, or addition, utility model and appearance design patents, and inventors certificates, as well as all divisionals, reissues, reexaminations, continuations, continuations-in-part, renewals, extensions, substitutions, foreign equivalents and counterparts, and any other forms of patent protection directed to the inventions covered by any of the foregoing), applications for letters patent (including, but not limited to, all foreign counterpart patent applications, and letters patent that may issue on such applications, all as of the Effective Date as documented in Schedule 3 hereto and any subsequent revisions to Schedule 3 by Liquidmetal during the Term of this Agreement. (h) Enforcement. Liquidmetal and its Affiliates shall have the sole right and discretion to prevent, abate, or seek legal recourse for any actual or threatened misappropriation or infringement and attempt to resolve any claims relating to Liquidmetal's Intellectual Property (as defined herein), including the Licensed Patents and Licensed Technical Information. 4 + +Source: LIQUIDMETAL TECHNOLOGIES INC, 8-K, 2/5/2020 + + + + + +2.5 Bailment of Equipment. Eutectix will provide facility space for the Licensed Equipment in a Eutectix-owned or leased secure and protected property that is restricted from unauthorized access or viewing (the "Eutectix Property"). Eutectix shall maintain the Licensed Equipment only in such designated Eutectix Property and shall not relocate the Licensed Equipment from such Eutectix Property without the prior written consent of Liquidmetal. Once Eutectix receives the Licensed Equipment, Eutectix will acknowledge in writing the receipt thereof. Eutectix's acknowledgement of receipt of the Licensed Equipment will constitute an acknowledgement that Eutectix has received and accepted and possesses the Licensed Equipment on bailment for the benefit of Liquidmetal and that such receipt of the Licensed Equipment is not subject to the terms and conditions of any applicable laws pertaining to sales and/or secured transactions. The Licensed Equipment: (a) is and shall remain the sole property of Liquidmetal, (b) shall be made available for reasonable inspection upon at least three (3) weeks prior written request by Liquidmetal, such inspection not to occur more than once per year during the Term, to be conducted with minimal business disruption to Eutectix and to be conducted at Liquidmetal's sole cost and expense and Eutectix shall, at its own expense: (c) keep the Licensed Equipment in a suitable place, safe from loss or damage; (d) subscribe to an insurance policy from an insurance company reasonably acceptable to Eutectix covering the Licensed Equipment at full replacement value against fire, theft and such other normal business risks, with a waiver of subrogation in favor of Liquidmetal and with Liquidmetal to be named as an additional insured and loss payee, and provide, upon receipt of a written request from Liquidmetal, a certificate evidencing such insurance, and comply with all requirements associated with such insurance policy; (e) keep the Licensed Equipment in good working order and condition, excepting normal wear and tear, and perform all regular and routine maintenance and repairs on the Equipment; (f) perform no act or omission inconsistent with Liquidmetal's sole ownership of the Licensed Equipment, nor attempt to sell, assign, loan, donate, mortgage, pledge or in any other manner permit the Licensed Equipment to be encumbered; (g) comply with all reasonable directions given by Liquidmetal regarding (A) the inspection of the Licensed Equipment, including upon termination or expiration of the Agreement and in connection with any non-ordinary or non-routine revisions or alterations to the Licensed Equipment, (B) the removal and shipment of the Licensed Equipment, including upon termination or expiration of the Agreement, and (C) protecting or perfecting Liquidmetal's interest in the Licensed Equipment, including by executing and permitting Liquidmetal to file financing statements and other documents with respect thereto, at Liquidmetal's expense; and (h) shall be liable for all loss or damage to Licensed Equipment, except for normal wear and tear of the Licensed Equipment. 5 + +Source: LIQUIDMETAL TECHNOLOGIES INC, 8-K, 2/5/2020 + + + + + +Eutectix may, with prior written consent of Liquidmetal (such consent not to be unreasonably withheld, conditioned or delayed), (i) transfer or move any Licensed Equipment, (j) make or cause to be made any non-ordinary or non-routine revisions or alterations to the Licensed Equipment. 2.6 Alloy Availability. During the initial three (3) years of the Term of this Agreement, Eutectix shall make available alloy raw materials equal in kind and quantity to the Transferred Alloy without cost, for use in Orders (as defined in Section 3.1 below) placed by Liquidmetal. 2.7 Royalty. In consideration of the license of Liquidmetal Technical Information and the Licensed Equipment granted by Liquidmetal, Eutectix agrees to pay Liquidmetal a cash royalty based on a percentage of the invoice price of any Licensed Products (but not including Liquidmetal Products) sold by Eutectix or its permitted sublicensees and for which payment was actually received by Eutectix. The cash royalty shall be an amount equal to six percent (6.0%) of the Net Sales Price of the invoice price of any Licensed Products and for which payment was actually received by Eutectix (the "Liquidmetal Royalty"). "Net Sales Price" is defined as the gross invoice price actually received by Eutectix or its permitted sublicensees on the sale of Licensed Products, less returns or refunds, but before deduction of cash discounts. The Net Sales Price shall be commercially reasonable, and in no case shall the Net Sales Price be less than the cost of material consumed in a single manufacturing cycle, divided by the number of Licensed Products produced by such single cycle. The Liquidmetal Royalty shall be paid in U.S. dollars within 30 days after the end of each calendar quarter, based on payments received for sales of Licensed Products made during a given quarter. Liquidmetal hereby waives the payment of any Liquidmetal Royalty otherwise due and payable pursuant to this Agreement until the one (1) year anniversary of the Effective Date. 2.8 Royalties for Transactions Not at Arm's Length. Eutectix agrees that in the event any Licensed Products shall be sold (1) to any Affiliate (as defined herein), or (2) to a corporation, firm, or association with which, or individual with whom Eutectix or its stockholders or Affiliates shall have any agreement, understanding, or arrangement (such as, among other things, an option to purchase stock, or an arrangement involving a division of profits or special rebates or allowances) without which agreement, understanding, or arrangement, prices paid by such a corporation, firm, association or individual for the Licensed Products would be higher than the Net Sales Price reported by Eutectix, or if such agreement, understanding, or arrangement results in extending to such corporation, firm, association, or individual lower prices for Licensed Products than those charged to outside concerns buying similar products in similar amounts and under similar conditions, then, and in any such events, the royalties to be paid hereunder in respect of such Licensed Products shall be computed based on an assumed or deemed Net Sales Price equal to those charged to such outside concerns. 2.9 Commission. From time to time, Liquidmetal may encounter, develop, and refer to Eutectix customer accounts for direct sales by Eutectix. Provided that such referred customer is not already a Eutectix customer, Eutectix may accept such customer referral, and in that case hereby agrees to pay Liquidmetal a cash commission based on a percentage of the invoice price of Licensed Products sold by Eutectix or its permitted sublicensees and for which payment was actually received by Eutectix, in addition to the Liquidmetal Royalty. The cash commission shall be an amount equal to six percent (6.0%) of the Net Sales Price of the invoice price of Licensed Products sold by Eutectix or its permitted sublicensees and for which payment was actually received by Eutectix (the "Liquidmetal Commission"). The Liquidmetal Commission shall be paid in U.S. dollars within 30 days after the end of each calendar quarter, based on payments received for sales of Licensed Products made during a given quarter. Liquidmetal hereby waives the payment of any Liquidmetal Commission otherwise due and payable pursuant to this Agreement until the one (1) year anniversary of the Effective Date. For the purposes of this Section, product development teams within a single corporation or group of corporations under common control are not the "same customer" as any other product development team unless they (i) are organized within the same legal entity and under the same product division, and (ii) operate within the same geographic territory. 6 + +Source: LIQUIDMETAL TECHNOLOGIES INC, 8-K, 2/5/2020 + + + + + +2.10 Report. Eutectix shall provide a report to Liquidmetal accompanying the Liquidmetal Royalty and Liquidmetal Commission stating whether the sales were to an Affiliate, the Net Sales Price actually received and the amount of Liquidmetal Royalty and Liquidmetal Commission due and owing. 3. ORDERS: PRICING, PAYMENT TERMS, AND CAPACITY. 3.1 Pricing. During the Term of this Agreement, Liquidmetal may from time to time purchase from Eutectix such "Liquidmetal Products" as specifically described in a purchase order issued by Liquidmetal (an "Order") to Eutectix at the prices set forth in the Order (the "Prices"). The Parties shall negotiate the Prices in good faith on a project-by-project basis, taking into consideration strategic value, competitiveness, profitability, design issues, cost-drivers including input material costs, export licensing of the Liquidmetal Products and payment of broker's fees, duties, tariffs and other similar charges, taxes, tariffs, or charges imposed by any taxing authority upon the sale, shipment, storage, "value add" or use of the Liquidmetal Products, set-up, tooling, non-recurring engineering activities, and any other relevant factors. Prices (a) are in U.S. Dollars, (b) include Eutectix's standard packaging, and (c) are based on the configuration set forth in the specifications provided to Eutectix by Liquidmetal (the "Specifications"). Consistent with Section 2.6 above, from the Effective Date, the Prices shall include zero U.S. dollars ($0.00) input materials cost factor for all Orders requiring LM 105 Alloy and 106C Alloy input materials until the earlier of the third anniversary of the Effective Date, or the date upon which Liquidmetal has consumed alloy, including revert (assuming the Transferred Alloy revert is suitable for use in such Orders), equivalent to the respective quantities listed in Section 2.2 above. 3.2 Payment Terms. Eutectix may issue an invoice for Liquidmetal Products any time after the shipment thereof to Liquidmetal. Payment terms are net 30 days after the date of the invoice, or the date of receipt by Liquidmetal of the invoice if the invoice is received more than 10 days after the date of the invoice. Unless otherwise stated in the applicable Order or as otherwise agreed in writing by the Parties, payment shall be made in U.S. Dollars. 3.3 Cost Reduction. Eutectix will work diligently with Liquidmetal in an effort to reduce waste, enhance productivity, and decrease Prices through reductions in the cost of producing Liquidmetal Products, all without adversely impacting quality or delivery times. Throughout the term of this Agreement, Eutectix and Liquidmetal will work cooperatively and take advantage of cost saving technologies and other cost reduction opportunities to assist in maintaining a competitive cost position. The Parties shall meet on a quarterly basis to discuss specific cost reduction and productivity enhancement activities (collectively, the "Activities"). In support of these efforts, Liquidmetal shall provide to Eutectix its own estimates of direct sales costs, including commissions, inspections, modifications, inventory, repackaging, shipping/receiving, duties & tariffs, warranty services, and current overhead rates. Notwithstanding any such estimates Liquidmetal may provide, Eutectix shall set Prices in accordance with its known costs and margins. 7 + +Source: LIQUIDMETAL TECHNOLOGIES INC, 8-K, 2/5/2020 + + + + + +3.4 Forecasts; Manufacturing Capacity. In connection with any Order, Liquidmetal may concurrent with such Order or subsequent thereto from time to time provide Eutectix with a six (6) month rolling forecast (each, a "Forecast") of its projected additional purchases of Liquidmetal Products covered by an Order ("Additional Product"). Forecasts will be prepared in good faith. Eutectix agrees to reserve sufficient manufacturing capacity to satisfy the supply of Additional Product in accordance with the applicable Forecast, provided that Eutectix shall not be required to reserve in excess of ten percent (10%) of its manufacturing capacity pursuant to this Section 3.4. 3.5 Quotation. Liquidmetal may from time to time request a price quote for certain Liquidmetal Products (each such request, a "RFQ"). Eutectix agrees to provide a timely response to Liquidmetal's RFQ either providing Liquidmetal with such requested quote (each, a "Quote"), or informing Liquidmetal of Eutectix's intent not to provide such requested quote. 3.6 Purchase Orders. Eutectix agrees to manufacture and deliver Liquidmetal Products pursuant to Orders (or any changes thereto timely and reasonably requested by Liquidmetal in writing and agreed to by Eutectix). Each Order shall be in the form of a written or electronic communication. Liquidmetal and Eutectix shall agree to the required Acceptance (as defined below) criteria before Eutectix accepts an Order. The Parties shall negotiate in good faith to resolve any disputed matter(s). 3.7 Shipments. Eutectix will make Liquidmetal Product shipments from Eutectix's facility of manufacture directly to Liquidmetal or, if directed by Liquidmetal in writing, to Liquidmetal's customers ("Customers") on behalf of Liquidmetal. In the event that Liquidmetal so directs, Eutectix will use packaging provided by Liquidmetal at Liquidmetal's cost indicating Liquidmetal as the seller of the Product. 3.8 Delivery. Unless otherwise agreed in writing or in the applicable Order, all Liquidmetal Product shipments shall be Ex Works (Incoterms 2010) Eutectix's facility of manufacture in Tolleson, Arizona. Title to and risk of loss or damage to the Liquidmetal Product shall pass to Liquidmetal upon Eutectix's tender of the Liquidmetal Product to the common carrier. 3.9 Acceptance. Acceptance of the Liquidmetal Product shall be based on characteristics that are measurable by a quality system and designed to demonstrate compliance with the Specifications. Unless Liquidmetal notifies Eutectix that the Liquidmetal Product does not meet the Specifications within thirty (30) calendar days after receipt of the Liquidmetal Product, then the Liquidmetal Product shall be deemed Accepted. 3.10 Changes. Liquidmetal may upon sufficient timely and reasonable written notice make changes within the general scope of an Order, if agreed to by Eutectix. Such changes may include, but are not limited to changes in (1) drawings, plans, designs, procedures, Specifications or test specifications, (2) methods of packaging and shipment, (3) quantities of Liquidmetal Products to be furnished, or (4) delivery schedule. If appropriate, Liquidmetal will prepare an Engineering Change Order ("ECO"), and Eutectix will communicate to Liquidmetal any change in Prices and/or delivery schedule. Each ECO shall be mutually agreed upon. Eutectix shall not make any changes to the design, material, or process of manufacturing the Liquidmetal Products or any changes to the Specifications, expect as may be agreed in writing by Liquidmetal in each instance. 8 + +Source: LIQUIDMETAL TECHNOLOGIES INC, 8-K, 2/5/2020 + + + + + +3.11 Supply. For avoidance of doubt, Liquidmetal may purchase Liquidmetal Products from third parties other than Eutectix, and/or manufacture Liquidmetal Products itself. Liquidmetal makes no commitment that it will purchase any particular volume of any Liquidmetal Products from Eutectix. 3.12 Quality Specifications. Eutectix shall comply with the quality specifications set forth by Liquidmetal and/or the Customer and agreed to in an Order. Eutectix shall comply with the standards set forth in ISO 9001. 3.13 Eutectix Warranty. Eutectix warrants that the Product (i) will conform to the Specifications, (ii) will be free from manufacturing defects (including all defects in workmanship and any defects in materials that were not specified by Liquidmetal or Customer), ) will be free and clear of all liens, encumbrances, charges, claims, or adverse interests of any kind, (iii) will comply with, in all stages of manufacture and distribution to Liquidmetal or Customer, the terms of Section 10. The foregoing representations and warranties shall survive delivery, inspection and payment and shall run in favor of Liquidmetal and its Affiliates, and their respective successors, assigns and customers, both direct and indirect. 3.14 Return Process. Liquidmetal and Eutectix shall concur in advance on all Liquidmetal Products to be returned for repair or rework. All returns shall state the specific reason for such return, and will be processed in accordance with the return policies and processes agreed to in writing by Eutectix and Liquidmetal. Eutectix shall pay all transportation costs for valid returns of Liquidmetal Products to Eutectix and for the shipment of repaired or replacement Liquidmetal Products to Customers, and Eutectix shall bear all risk of loss or damage to such Liquidmetal Products while in transit. 3.15 Exclusions from Warranty. This warranty does not include remedy for defects in Liquidmetal Products resulting from (a) Customer's design of Liquidmetal Products, (b) Eutectix's compliance with Liquidmetal's Specifications, or (c) accident, disaster, neglect, abuse, misuse or improper handling by Customer or Liquidmetal. 3.16 Organization and Qualification. Eutectix is an entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted. Eutectix is not in violation nor default of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational or charter documents. Eutectix is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could not have or reasonably be expected to result in: (i) a material adverse effect on the legality, validity or enforceability of any this Agreement, (ii) a material adverse effect on the results of operations, assets, business, prospects or condition (financial or otherwise) of Eutectix, or (iii) a material adverse effect on Eutectix's ability to perform in any material respect on a timely basis its obligations under this Agreement (any of (i), (ii) or (iii), a "Material Adverse Effect") and no proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification. 9 + +Source: LIQUIDMETAL TECHNOLOGIES INC, 8-K, 2/5/2020 + + + + + +3.17 Solvency. Eutectix does not intend to incur debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt). Eutectix has no knowledge of any facts or circumstances which lead it to believe that it will file for reorganization or liquidation under the bankruptcy or reorganization laws of any jurisdiction within one year from the Effective Date. 3.18 Remedy. THE WARRANTIES SET FORTH IN THIS ARTICLE 3 ARE THE SOLE WARRANTIES GIVEN BY EUTECTIX AND ARE IN LIEU OF ANY OTHER WARRANTIES EITHER EXPRESS OR IMPLIED. EUTECTIX DOES NOT MAKE ANY WARRANTIES REGARDING MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. Eutectix agrees to indemnify, defend and hold the Liquidmetal Indemnified Parties (as defined in Section 12.1) harmless from and against any and all claims, demands liabilities, losses, costs and expenses (including without limitation, costs of investigation and reasonable attorney's fees) irrespective of the theory upon which based, which Liquidmetal or any other Liquidmetal Indemnified Party may suffer or incur as a result of any breach of the representations or warranties of Eutectix set forth in this Article 3. 4. LIQUIDMETAL'S REPRESENTATIONS AND WARRANTIES. 4.1 Liquidmetal represents and warrants that it owns all right, title and interest in and to the Licensed Equipment, except for that equipment listed in Section 2.1(b). Liquidmetal represents and warrants that it has all necessary right and authority to deliver and provide to Eutectix the Licensed Equipment for Eutectix's sole retention, possession and use as permitted herein. Liquidmetal represents and warrants that it will perform no act or omission that is inconsistent with Eutectix's retention, possession and use of the Licensed Equipment during the Term. 4.2 Liquidmetal represents and warrants that there are no outstanding liens, security interests, mortgages, claims, pledges, obligations or other encumbrances of any kind against the Licensed Equipment and that Liquidmetal will not and will not permit any third party to place any liens, security interests, mortgages, claims, pledges, obligations or other encumbrances of any kind against the Licensed Equipment during the Term. 4.3 Liquidmetal represents and warrants that as delivered to Eutectix, Liquidmetal is not aware of any claim or assertion by any third party that the Licensed Equipment misappropriates or infringes upon any third party's Intellectual Property rights. 4.4 Liquidmetal represents and warrants that as of the delivery date to Eutectix of the Licensed Equipment, the Licensed Equipment was functional, operable, and usable. 4.5 Liquidmetal represents and warrants that Liquidmetal Products do not misappropriate or infringe upon any third party's Intellectual Property rights. Liquidmetal represents and warrants that it is not aware of any claim or assertion by any third party that the Liquidmetal Products misappropriates or infringes upon any third party's Intellectual Property rights. 4.6 Liquidmetal represents and warrants that it will maintain the Affiliate License Agreement in full force and effect during the Term and will perform no act or omission that would jeopardize the ongoing effectiveness of the Affiliate License Agreement during the Term. 10 + +Source: LIQUIDMETAL TECHNOLOGIES INC, 8-K, 2/5/2020 + + + + + +4.7 Organization and Qualification. Liquidmetal is an entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted. Liquidmetal is not in violation nor default of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational or charter documents. Liquidmetal is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could not have or reasonably be expected to result in: (i) a material adverse effect on the legality, validity or enforceability of any this Agreement, (ii) a material adverse effect on the results of operations, assets, business, prospects or condition (financial or otherwise) of Liquidmetal, or (iii) a material adverse effect on Liquidmetal's ability to perform in any material respect on a timely basis its obligations under this Agreement (any of (i), (ii) or (iii), a "Material Adverse Effect") and no proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification. 4.8 Solvency. Liquidmetal does not intend to incur debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt). Liquidmetal has no knowledge of any facts or circumstances which lead it to believe that it will file for reorganization or liquidation under the bankruptcy or reorganization laws of any jurisdiction within one year from the Effective Date. 4.9 THE WARRANTIES SET FORTH IN THIS ARTICLE 4 ARE THE SOLE WARRANTIES GIVEN BY LIQUIDMETAL AND ARE IN LIEU OF ANY OTHER WARRANTIES EITHER EXPRESS OR IMPLIED. LIQUIDMETAL DOES NOT MAKE ANY WARRANTIES REGARDING MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. Liquidmetal agrees to indemnify, defend and hold the Eutectix Indemnified Parties (as defined in Section 12.2) harmless from and against any and all claims, demands liabilities, losses, costs and expenses (including without limitation, costs of investigation and reasonable attorney's fees) irrespective of the theory upon which based, which Eutectix or any other Eutectix Indemnified Party may suffer or incur as a result of any breach of the representations and warranties of Liquidmetal set forth in this Article 4. 5. AGREEMENT TERMINATION. 5.1 Termination for Cause. Either Party may terminate this Agreement hereunder for default if the other Party materially breaches this Agreement; provided, however, no termination right shall accrue until thirty (30) days after the defaulting Party is notified in writing of the material breach and has failed to cure within the thirty (30) day period after notice of a material breach. 5.2 Termination for Convenience. Either Party may terminate this Agreement for any reason upon providing 180 days prior written notice to the other Party prior to the expiration of the then-current term or unless sooner terminated in accordance with the terms of this Agreement. 11 + +Source: LIQUIDMETAL TECHNOLOGIES INC, 8-K, 2/5/2020 + + + + + +5.3 Termination by Operation of Law. This Agreement shall immediately and automatically terminate should either Party (a) become insolvent; (b) enter into or file a petition, arraignment or proceeding seeking an order for relief under bankruptcy laws of its respective jurisdiction; (c) enter into receivership of any of its assets; or (d) enter into a dissolution or liquidation of its assets or an assignment for the benefit of its creditors. 5.4 Consequences of Termination. In the event this Agreement expires or is terminated for any reason other than a breach by Eutectix, Liquidmetal shall purchase from Eutectix existing raw material inventory at the purchase price (including delivery charges) paid by Eutectix to its suppliers in connection with the Orders accepted by Eutectix hereunder. Upon expiration or termination of this Agreement: (a) Liquidmetal shall i. Pay Eutectix any amounts rightfully owing under each outstanding Order in accordance with the payment terms set forth in this Agreement; ii. Subject to Eutectix's right to finish manufacturing work in process as set forth below, have the unconditional right to possess or repossess the Licensed Equipment (as defined in Section 2.1) and take all actions it deems appropriate to effect such possession or repossession at its own cost; and (b) Eutectix shall immediately i. cease all activities under this Agreement (including exercising its rights under the licenses granted hereunder), unless and to the extent otherwise agreed or requested in writing by Liquidmetal; ii. Notwithstanding the foregoing, with regard to orders received and accepted by Eutectix before expiration or notice of termination, Eutectix may finish making any products in process, may conclude any orders in process, including finishing manufacturing of such products and shipping such products to the customer for up to 6 months after termination or expiration of this Agreement; iii. Comply with Section 9.2 and iv. transfer title and deliver to Liquidmetal, in the manner and to the extent requested in writing by Liquidmetal, such completed or partially completed Liquidmetal Products, drawings and other information Eutectix has produced or acquired in connection with this Agreement. Liquidmetal shall not be responsible to Eutectix for any compensation, reimbursement, profits, expenses, losses or damages whatsoever as a result of any expiration or termination of the Agreement. Any such expiration or termination shall be without prejudice to any other rights and remedies that Liquidmetal may be entitled to at law or in equity. 12 + +Source: LIQUIDMETAL TECHNOLOGIES INC, 8-K, 2/5/2020 + + + + + +5.5 Right to Purchase. Upon expiration or termination of this Agreement for any reason, Eutectix shall have the option to purchase some or all of the Licensed Equipment at fair market value, less any amounts owed to Eutectix by Liquidmetal, except the equipment listed under Section 2.1(b) above. The following additional terms shall apply to Eutectix's exercise of this option: (a) Eutectix's option hereunder shall be exercisable by providing Liquidmetal with written notice of its intention to exercise its chosen option no later than the effective date of termination. Such notice shall include a description of the assets Eutectix will purchase (the "Optioned Assets"). (b) In the event that Eutectix and Liquidmetal cannot agree to a fair market value for the Optioned Assets, then the fair market value shall be determined by an independent third-party appraisal. Eutectix and Liquidmetal shall each select one independent, qualified appraiser, and the two so selected shall select a third appraiser, all three to independently from one another determine the fair market value of the Optioned Assets. The purchase price shall be the mean of the fair market values as determined by the three appraisers. (c) The closing for the purchase of the Optioned Assets will take place no later than sixty (60) days after the termination, unless the Parties cannot agree on the price, in which case, closing will take place no later than sixty (60) days after the three independent appraisals have been received. Eutectix will pay the purchase price in full at the closing. Liquidmetal must sign all documents of assignment and transfer as are reasonably necessary for purchase of the Optioned Assets by Liquidmetal. (d) In the event that Eutectix does not exercise its right to purchase the Optioned Assets as set forth above, Liquidmetal will be free to keep or to sell, after such termination to any third party, all of the Optioned Assets and shall be responsible for timely removing equipment not purchased by Eutectix at Liquidmetal's own expense. In the event Liquidmetal fails to timely remove such Optioned Assets, in light of the periods for continued operation in Section 5.4(b)(ii) and closing in Section 5.5(c), Eutectix may dispose of them, at Liquidmetal's cost, with no liability to Eutectix. 5.6 Survival. The terms of this Agreement that by their nature or their express terms are intended to survive its expiration or termination (including without limitation, indemnification, warranty, insurance, bailment, and confidentiality provisions), and any and all rights, remedies and obligations that arose or are incurred prior to expiration or termination, shall survive expiration or termination of this Agreement. 6. TRAINING AND OTHER SERVICES. 6.1 Training and Technical Assistance. At any time within one (1) year of the Effective Date, upon request by Eutectix, Liquidmetal shall remotely supply such of its then-existing engineering, facilities, or manufacturing experts to Eutectix, as shall be reasonably necessary to assist in the safe and effective installation, operation, troubleshooting, and maintenance of the Licensed Equipment. In the same period, upon request by Eutectix, and subject to availability, Liquidmetal shall provide on-site support of the same kind. Eutectix shall pay to Liquidmetal the reasonable documented travel and accommodation expenses associated with such on-site service. 6.2 DFM. Upon request by Eutectix, Liquidmetal, at its own cost, shall provide engineering support for the design of Liquidmetal Products and equipment molds for optimal manufacturability (that is, engineering the design of the Product in such a way that the Product is easy to manufacture). 13 + +Source: LIQUIDMETAL TECHNOLOGIES INC, 8-K, 2/5/2020 + + + + + +6.3 Research, Development, and Collaboration. Eutectix will meet with Liquidmetal on at least an annual basis to discuss ways in which Eutectix and Liquidmetal can collaborate on advancements and improvements to the composition, processing, and application of bulk metallic glasses and composites and derivatives thereof, and Eutectix will make available to Liquidmetal any information regarding processing technologies, bulk metallic glasses, amorphous alloys, and derivatives and compositions and improvements thereto used by Eutectix in the manufacture of Liquidmetal Products. The information exchanged at such meetings will be owned in accordance with Article 8. 7. FORCE MAJEURE. 7.1 Force Majeure Event. For purposes of this Agreement, a "Force Majeure Event" shall mean the occurrence of unforeseen circumstances beyond a Party's control and without such Party's negligence or intentional misconduct, including, but not limited to, any act by any governmental authority, act of war, natural disaster, strike, boycott, embargo, shortage, riot, lockout, labor dispute, and civil commotion. 7.2 Notice of Force Majeure Event. Neither Party shall be responsible for any failure to perform due to a Force Majeure Event provided that such Party gives notice to the other Party of the Force Majeure Event as soon as reasonably practicable, but not later than fifteen (15) days after the date on which such Party knew of the commencement of the Force Majeure Event, specifying the nature and particulars thereof and the expected duration thereof. 7.3 Termination of Force Majeure Event. The Party claiming a Force Majeure Event shall use reasonable efforts to mitigate the effect of any such Force Majeure Event and to cooperate to develop and implement a plan of remedial and reasonable alternative measure to remove the Force Majeure Event. Upon the cessation of the Force Majeure Event, the Party affected thereby shall immediately notify the other Party of such fact, and use its best efforts to resume normal performance of its obligations under the Agreement as soon as possible. 7.4 Limitations. Notwithstanding that a Force Majeure Event otherwise exists; the provisions of this Article shall not excuse (i) any obligation of either Party that arose before the occurrence of the Force Majeure Event causing the suspension of performance; or (ii) any late delivery of Product caused solely by negligent acts or omissions on the part of such Party. 7.5 Termination for Convenience. In the event a Party fails to perform any of its obligations for any reasons defined in this Article 7 for a cumulative period of ninety (90) days or more from the date of such Party's notification to the other Party, then the other Party at its option may extend the corresponding delivery period for the length of the delay, or terminate this upon written notice. 14 + +Source: LIQUIDMETAL TECHNOLOGIES INC, 8-K, 2/5/2020 + + + + + +8. OWNERSHIP OF INTELLECTUAL PROPERTY. 8.1 Definitions. 8.1.1 For purposes of this Agreement, "Amorphous Alloy" means any one or more amorphous alloys or bulk metallic glasses (or composite materials containing amorphous alloys or bulk metallic glasses) limited to the Liquidmetal Products, amorphous alloys marketed or sold under the Liquidmetal® brand, and Licensed Products. 8.1.2 "Intellectual Property" means any and all inventions (whether or not protected or protectable under patent laws), works of authorship, information fixed in any tangible medium of expression (whether or not protected or protectable under copyright laws), moral rights, trade secrets, developments, designs, applications, processes, know-how, discoveries, ideas (whether or not protected or protectable under trade secret laws), and all other subject matter protected or protectable under Patent, copyright, moral right, trademark, trade secret, or other laws, including, without limitation, all new or useful art, combinations, formulae, manufacturing techniques, technical developments, applications, data and research results. 8.1.3 "New Amorphous Alloy Technology" means, to the extent developed or acquired after the Effective Date by a Party, alone, with the other Party or with a third party, in connection with Orders under this Agreement, the Licensed Patents, or the Licensed Technical Information, all Amorphous Alloys and/or all Intellectual Property relating to the composition, processing, properties, or applications of Amorphous Alloys, and all patents therefor, including, but not limited to, improvements to patents. (a) "New Alloy Technology" means a New Amorphous Alloy Technology that concerns only the composition, properties, or raw material processing of Amorphous Alloys. (b) "New Process Technology" means a New Amorphous Alloy Technology that concerns only the process of converting Amorphous Alloy raw material into usable or saleable parts or components, or equipment related thereto. (c) "New Application Technology" means a New Amorphous Alloy Technology that concerns only customer end-uses for parts and components manufactured of Amorphous Alloys. 8.2 New Technology Ownership. Ownership over New Amorphous Alloy Technologies shall be determined as follows: 8.2.1 New Alloy Technology. New Alloy Technologies that have been developed by a Party alone or with a third party shall be solely owned by the developing Party. New Alloy Technologies that have been developed by cooperation of the Parties shall be jointly and equally owned by the Parties, and any royalties for the use thereof by third parties shall be shared equitably between the Parties. The Parties shall work cooperatively toward the appropriate patent or other legal protection of such jointly and equally owned Intellectual Property. 15 + +Source: LIQUIDMETAL TECHNOLOGIES INC, 8-K, 2/5/2020 + + + + + +8.2.2 New Process Technology. New Process Technologies that have been developed by Liquidmetal, alone or with a third party, shall be solely owned by Liquidmetal. New Process Technologies that have been developed by Eutectix, alone or with a third party, shall be solely owned by Eutectix, and, if permitted, Eutectix shall grant Liquidmetal a license to such New Process Technologies as set forth in Section 8.3 below. New Process Technologies that have been developed by cooperation of the Parties shall be jointly and equally owned by the Parties, and any royalties for the use thereof by third parties shall be shared equitably between the Parties. The Parties shall work cooperatively toward the appropriate patent or other legal protection of such jointly and equally owned Intellectual Property. 8.2.3 New Application Technology. New Application Technologies that have been developed by Liquidmetal, alone or with a third party, shall be solely owned by Liquidmetal. New Application Technologies that have been developed by Eutectix shall be solely owned by Eutectix, and Eutectix shall negotiate with Liquidmetal a license to such New Application Technologies as set forth Section 8.4 below. New Application Technologies that have been developed by Eutectix with a third party shall be owned by Eutectix and the third party, and, if permitted by such third party, Eutectix shall negotiate with Liquidmetal a license to such New Application Technology as set forth in Section 8.4 below in the case that (i) Eutectix retains the authority to grant a such license, and (ii) the New Application Technology is derived in whole or in part from Liquidmetal Intellectual Property. New Application Technologies that have been developed by cooperation of the Parties shall be jointly and equally owned by the Parties, and any royalties for the use thereof by third parties shall be shared equitably between the Parties. The Parties shall work cooperatively toward the appropriate patent or other legal protection of such jointly and equally owned Intellectual Property. 8.3 New Process Technology License. Eutectix hereby grants to Liquidmetal a fully-paid up, royalty-free, perpetual, world-wide, non-exclusive license to any New Process Technologies in which Eutectix acquires licensing rights pursuant to Section 8.2 above. 8.4 New Application Technology License Negotiation. The Parties shall negotiate in good faith a royalty-bearing, perpetual, world-wide, non-exclusive license to any New Application Technology in which they acquire rights as set forth in Section 8.2.3 above. Royalties and other terms shall be commercially reasonable and negotiated by the Parties in good faith. 8.5 Assignment & Cooperation. To the extent that the Parties have jointly developed any New Amorphous Alloy Technology and they have agreed that such New Amorphous Alloy Technology will be jointly owned, as set forth in Section 8.2 above, each Party hereby assigns to the other, and will cause its employees, contractors, representatives, successors, assigns, Affiliates, parents, subsidiaries, officers and directors to assign to the other, a co-equal right, title and interest in and to any such jointly developed New Amorphous Alloy Technology. The parties agree to cooperate and cause their employees and contractors to cooperate in the preparation and prosecution of patent applications relating to any joint development work concerning New Process Technology or New Application Technology. 16 + +Source: LIQUIDMETAL TECHNOLOGIES INC, 8-K, 2/5/2020 + + + + + +9. CONFIDENTIALITY. 9.1 Certain Definitions. For purposes hereof, "Confidential Information" shall mean any and all commercial, technical, financial, proprietary, and other information relating to a Discloser, its Affiliates, and their respective business operations, including, but not limited to, samples, data, technical information, know-how, formulas, ideas, inventions, discoveries, patents, patent applications, Intellectual Property, product development plans, demonstrations, business and financial information, applications and designs, and all manifestations or embodiments relating to the foregoing and all improvements made thereto, in whatever form provided, whether oral, written, visual, machine-readable, electronic, or otherwise. "Confidential Information" also includes any information described above which a Discloser obtains from a third party and which the Discloser treats as proprietary or designates as confidential, whether or not owned or developed by the Discloser. "Discloser" shall mean the Party that is disclosing Confidential Information under this Agreement, regardless of whether such Confidential Information is being provided directly by such Party, by a Representative of the Party, or by any other person that has an obligation of confidentiality with respect to the Confidential Information being disclosed. "Recipient" shall mean the Party receiving Confidential Information that is protected under this Agreement. "Representatives" shall mean the respective directors, officers, employees, financial advisors, accountants, attorneys, agents, and consultants of a Party. 9.2 Restrictions and Covenants. Except as otherwise provided herein, each Party agrees that, in its capacity as the Recipient of Confidential Information, it will (i) hold the Discloser's Confidential Information in strict confidence, use a high degree of care in safeguarding the Discloser's Confidential Information, and take all precautions necessary to protect the Discloser's Confidential Information including, at a minimum, all precautions the Recipient normally employs with respect to its own Confidential Information, (ii) not divulge any of the Discloser's Confidential Information or any information derived therefrom to any other person (except as set forth in Section 9.3 hereof), (iii) not make any use whatsoever at any time of the Discloser's Confidential Information except as is necessary in the performance of Recipient's specific duties under this Agreement, (iv) not copy, reverse engineer, alter, modify, break down, melt down, disassemble or transmit any of the Discloser's Confidential Information, (v) not, within the meaning of United States or other export control laws or regulations, export or re-export, directly or indirectly, including but not limited to export on the Internet or other network service, any of the Discloser's Confidential Information, (vi) notify the Discloser in writing immediately upon discovery by the Recipient or its Representatives of any unauthorized use or disclosure of the Discloser's Confidential Information, and (vii) upon the termination or expiration of this Agreement, immediately return to the Discloser or destroy (at the option of the Recipient) all such Confidential Information, including all originals and copies. 9.3 Disclosure to Representatives. The Recipient may only disseminate the Discloser's Confidential Information to its Representatives who have been informed of the Recipient's obligations under this Agreement and are bound by an obligation of confidentiality and non-use with respect to the Discloser's Confidential Information at least as broad in scope as the Recipient's obligations under this Agreement. The Recipient agrees to reasonably restrict disclosure of the Discloser's Confidential Information to the smallest number of the Recipient's Representatives which have a need to know the Confidential Information. The Recipient shall be responsible for enforcing this Agreement as the Recipient's Representatives and shall take such action (legal or otherwise) to the extent necessary to cause them to comply with this agreement. 9.4 Enforcement. The Recipient acknowledges and agrees that due to the unique nature of the Licensed Technical Information and other Confidential Information of the Discloser, there can be no adequate remedy at law for any breach of its obligations hereunder, which breach may result in irreparable harm to the Discloser, and therefore, that upon any such breach or any threat thereof, the Discloser shall be entitled to appropriate equitable relief, including injunction, without the requirement of posting a bond, in addition to whatever remedies it might have at law. 17 + +Source: LIQUIDMETAL TECHNOLOGIES INC, 8-K, 2/5/2020 + + + + + +9.5 Exceptions. The restrictions of the Recipient's disclosure and use of the Discloser's Confidential Information under this Article 9 will not apply to the extent of any Confidential Information: (a) that becomes publicly known without breach of the Recipient's or its Representatives' obligations under this Agreement; (b) that is rightfully acquired by Recipient from a third party which is not subject to any restriction or obligation (whether contractual, fiduciary, or otherwise) on disclosure or use of such Confidential Information; (c) that is independently developed by employees of the Recipient without knowledge of or reference to such Confidential Information, as evidenced by written documentation or other tangible evidence of Recipient; (d) that is required to be disclosed by law or by court order or government order, provided that the Recipient (a) promptly notifies the Discloser of any such disclosure requirement so that the Discloser may seek an appropriate protective order (or other appropriate protections) and (b) provides reasonable assistance (at no cost to the Recipient) in obtaining such protective order or other form of protection; or (e) as to which and to the extent to which the Recipient has received express written consent from an authorized officer of the Discloser to disclose or use. 10. COMPLIANCE. 10.1 Laws. Eutectix and its operations, facilities and business shall at all times comply with all applicable federal, national, state, provincial and local laws (including common law), statutes, ordinances, orders, rules, codes, standards and regulations of the U.S.A., the country(ies) in which Eutectix or its operations or facilities are located, customs and export controls, and all other relevant jurisdictions (each individually a "Law" and collectively "Laws"), including without limitation Environmental Laws as defined below. 10.2 Customs. Eutectix shall provide Liquidmetal with all information, certificates and records relating to the Liquidmetal Products (including Certificates of Origin) as necessary for Liquidmetal to: (a) fulfill any customs obligations, origin marking or labeling requirements, and certification or local content reporting requirements; (b) claim preferential duty treatment under applicable trade preference regimes; and (c) participate in any duty deferral or free trade zone programs of the country of import. Liquidmetal shall obtain all pre-delivery export licenses and authorizations and pay all pre-delivery export taxes, duties, and fees. 10.3 Environmental Laws. Eutectix shall promptly furnish to Liquidmetal upon request from time to time all information evidencing Eutectix's compliance with Laws, including Environmental Laws. "Environmental Laws" are Laws pertaining to the environment and its protection, and the toxic or hazardous nature of products or their constituents, and any other environmental, toxic or hazardous product compliance Laws and obligations. Eutectix represents and warrants that the Liquidmetal Products do not and shall not contain asbestos, and do not and shall not contain mercury or other chemicals, metals, or minerals in excess of amounts (if any) permitted by Laws. If Eutectix supplies Liquidmetal or its Customers with Liquidmetal Products containing hazardous materials as defined by Environmental Laws, including the provisions promulgated by the U.S. Department of Transportation, Eutectix shall warn, label, and ship such hazardous materials in accordance with Environmental Laws. Upon shipment and on an ongoing basis, Eutectix shall provide Liquidmetal with current Safety Data Sheets and all other information needed to comply with all Environmental Laws. Eutectix shall have no liability to or on behalf of Liquidmetal for any failure by Liquidmetal to comply with any Environmental Law. 18 + +Source: LIQUIDMETAL TECHNOLOGIES INC, 8-K, 2/5/2020 + + + + + +10.4 Product Corrective Actions. Each Party shall immediately notify the other Party, in writing, if it becomes aware of any circumstances indicating that a stop sale, Liquidmetal Product recall, corrective action, Liquidmetal Product or quality control action or retrofit, or regulatory action involving any Liquidmetal Products sold by Eutectix to Liquidmetal or its dealers or customers (each, a "Product Corrective Action") may be necessary under Laws or otherwise appropriate. Liquidmetal shall, to the extent practicable, provide to Eutectix for review any relevant data and comment upon any potential Product Corrective Action, and Liquidmetal and Eutectix will mutually decide when to conduct a Product Corrective Action and the scope of any such Product Corrective Action. 10.5 Anti-Bribery; Anti-Corruption. In addition to its other obligations under this Agreement, Eutectix will strictly comply with both the letter and the spirit of all Laws concerning corrupt practices, "anti-bribery", or which in any manner prohibit the giving of anything of value to any official, agent or employee of any government, political party or public international organization, including without limitation the U.S. Foreign Corrupt Practices Act, the UK Bribery Act and similar Laws of other countries. Eutectix represents and warrants to Liquidmetal that: (a) neither Eutectix nor any of its officers, directors, employees, representatives or agents will offer, promise, or give anything of value to a government official or an employee of a state-owned or controlled enterprise, or authorize the foregoing, directly or indirectly, in order to influence such a person to act or refrain from acting in the exercise of his/her official duties with respect to this Agreement; (b) Eutectix and its officers, directors, employees, representatives and agents will use only ethical, legitimate and legal business practices in commercial operations and in promoting the position of Liquidmetal on issues before governmental authorities (it being understood that Eutectix shall not promote any position of Liquidmetal before any such authorities unless Liquidmetal has specifically directed Eutectix in writing to do so); and that it and its officers, directors, employees, representatives and agents will comply with all applicable anti-corruption Laws; (c) Eutectix and its officers, directors, employees, representatives and agents will never bribe any employees of Liquidmetal by any means, including but not limited to providing or promising to provide an off-the-book rebate in secret, entertainment allowance, employment arrangement, travel home, present, discount for shopping, or any other material benefits for the employees of Liquidmetal or their relatives; Eutectix will also refuse any improper interests in any form required or requested by any of the employees of Liquidmetal and will provide relevant evidence to assist Liquidmetal to investigate and take action with respect to any such activities; and (d) Eutectix shall keep its books and records in such a fashion that its compliance with this Article may be readily audited. 19 + +Source: LIQUIDMETAL TECHNOLOGIES INC, 8-K, 2/5/2020 + + + + + +10.6 Components Disclosure; Special Warnings. If requested by Liquidmetal from time to time, Eutectix shall promptly furnish Liquidmetal in such form and detail as Liquidmetal may direct: (a) a bill of materials for or list of all ingredients, components or constituents in the Liquidmetal Products purchased hereunder, (b) the amount of one or more of such ingredients, components or constituents, and (c) information concerning any changes in or additions to any such ingredients, components or constituents. 11. AUDIT RIGHTS. Upon reasonable prior notice to Eutectix and at Liquidmetal's expense, no more than once per year, during the Term of this Agreement and for one (1) year following the expiration or termination of this Agreement, Liquidmetal or its designee shall have the right from time to time to confirm and validate: (a) that Eutectix has complied with the pricing provisions of this Agreement; (b) Eutectix's financial condition, successorship planning, and ability to continue operations; (c) that Eutectix's performance is consistent with the Agreement; (d) that Eutectix has complied with Article 10 (Compliance) of this Agreement. Upon reasonable and prior notice to Eutectix, Eutectix will also provide Liquidmetal or its designee from time to time with reasonable access to Eutectix's facility and the facilities of its sub-suppliers and other subcontractors to permit Liquidmetal to inspect the production, handling, and storage of Liquidmetal Products and the Licensed Equipment and inventories of raw materials and components. Eutectix shall maintain an orderly storage bookkeeping so that the respective inventory of the Licensed Equipment, Liquidmetal Products and property of Liquidmetal can be immediately recognized; and (e) such confirmation and validation to be conducted with minimal disruption to Eutectix's business operations and all information disclosed during such exercise to be deemed to be Confidential Information. 12. INSURANCE AND INDEMNIFICATION. 12.1 Indemnification by Eutectix. Eutectix shall indemnify, defend, and hold harmless Liquidmetal and its Affiliates, and its and their respective directors, officers, employees, agents, insurers, Customers (both direct and indirect), successors and assigns (collectively, the "Liquidmetal Indemnified Parties"), from and against any and all claims, losses, liabilities, damages and expenses (including without limitation attorneys' fees and legal costs and all costs associated with Product Corrective Actions that are a result or consequence of any negligent or willful misconduct of Eutectix) that they, or any of them, may sustain or incur as a result of (a) any actual or alleged breach of any representation, warranty or covenant made by Eutectix in this Agreement (including its Schedules); or (b) any actual or alleged injury to or death of any person, or any actual or alleged damage to or loss of any property, arising out of (i) any Liquidmetal Products or Licensed Products sold by Eutectix under the Agreement or that are in the possession or under the control of Eutectix, its employees, agents, sub-suppliers or other subcontractors, except to the extent of Liquidmetal's negligence or willful misconduct, or (ii) any services performed by Eutectix, its employees, agents, sub-suppliers or other subcontractors; or (c) the negligent acts or omissions, intentional misconduct, or breach of contract of or by Eutectix, its employees, agents, sub-suppliers or other subcontractors; or (d) any infringement by Eutectix's Intellectual Property on the Intellectual Property rights of a third party. 20 + +Source: LIQUIDMETAL TECHNOLOGIES INC, 8-K, 2/5/2020 + + + + + +12.2 Indemnification by Liquidmetal. Liquidmetal shall indemnify, defend, and hold harmless Eutectix and its Affiliates, and its and their respective directors, officers, employees, agents, insurers, Customers (both direct and indirect), successors and assigns (collectively, the "Eutectix Indemnified Parties"), from and against any and all claims, losses, liabilities, damages and expenses (including without limitation attorneys' fees and legal costs and all costs associated with Product Corrective Actions that are a result or consequence of any negligent or willful misconduct of Liquidmetal) that they, or any of them, may sustain or incur as a result of (a) any actual or alleged breach of any representation, warranty or covenant made by Liquidmetal in this Agreement (including its Schedules); or (b) any actual or alleged injury to or death of any person, or any actual or alleged damage to or loss of any property, arising out of (i) any Liquidmetal Products designed by Liquidmetal or that are in the possession or under the control of Liquidmetal, its employees, agents, sub-suppliers or other subcontractors, except to the extent of Eutectix's negligence or willful misconduct, or (ii) any services performed by Liquidmetal, its employees, agents, sub-suppliers or other subcontractors; or (c) the negligent acts or omissions, intentional misconduct, or breach of contract of or by Liquidmetal, its employees, agents, sub-suppliers or other subcontractors; or (d) any infringement by Liquidmetal's Intellectual Property on the Intellectual Property rights of a third party. 12.3 Insurance. Eutectix shall obtain, pay for, and maintain insurance meeting or exceeding the minimum insurance requirements set forth on Schedule 2 attached hereto, with policy terms satisfactory to Liquidmetal. 13. LIMITATION OF LIABILITY. NEITHER PARTY SHALL BE LIABLE TO OTHER PARTY FOR ANY LOST PROFITS, LOST REVENUES, OR ANY OTHER INCIDENTAL, INDIRECT, PUNITIVE, SPECIAL OR CONSEQUENTIAL DAMAGES WHATSOEVER ARISING OUT OF THIS AGREEMENT OR ANY ORDER, OR OUT OF THE PERFORMANCE OR BREACH OF THIS AGREEMENT OR ANY ORDER, EVEN IF THE PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. 14. MISCELLANEOUS. 14.1 Entire Agreement. This Agreement, including its Schedules, which are attached hereto and incorporated herein, constitutes the entire understanding and agreement of the Parties with respect to the subject matter hereof, and supersedes all prior and contemporaneous agreements, understandings, inducements or conditions, expressed or implied, written or oral, between the Parties relating to the subject matter hereof. No additional or different terms contained in any sales order, Quotes, acknowledgement, invoice or other communications. This Agreement shall not be changed or modified except by written agreement signed by Liquidmetal and Eutectix. 21 + +Source: LIQUIDMETAL TECHNOLOGIES INC, 8-K, 2/5/2020 + + + + + +14.2 Orders of Precedence. All Quotes, Orders, acknowledgements and invoices issued pursuant to this Agreement are issued for convenience of the Parties only and shall be subject to, and governed by, the provisions of this Agreement. 14.3 Assignment. Neither this Agreement nor any rights or obligations hereunder shall be transferred or assigned by either Party without the written consent of the other Party, which consent shall not be unreasonably withheld; provided, however, that Liquidmetal shall have the right, without the prior written consent of Eutectix, to assign its warranty rights and other rights hereunder with respect to specific Liquidmetal Products to the Customers of such Liquidmetal Products. 14.4 Severability. If any provision of this Agreement, or the application thereof, shall for any reason and to any extent be invalid or unenforceable, the remainder of this Agreement and application of such provision to other persons or circumstances shall be interpreted so as best to reasonably effect the intent of the Parties hereto. The Parties further agree to replace such void or unenforceable provision with a provision which will achieve, to the extent possible, the economic, business and other purposes of the void or unenforceable provision. 14.5 Notices. Wherever one Party is required or permitted or required to give written notice to the other under this Agreement, such notice will be given by hand, by certified U.S. mail, return receipt requested, by overnight courier, or by fax and addressed as follows: If to Liquidmetal: Liquidmetal Technologies, Inc. Attn: CEO and/or President 20321 Valencia Cir Lake Forest, CA 92630 Facsimile: (949) 635-2188 If to Eutectix: Eutectix, LLC 323 Main St. Chatham, NJ 07928 Attention: Fax: Email: 14.6 Definition of "Affiliate". For purposes of this Agreement, the term "Affiliate" means, with respect to any specified person or entity, any corporation, limited liability company or other legal entity which directly or indirectly controls, is controlled by, or is under common control with specified person or entity or its successors or assigns. For the purposes of this Agreement, "control" shall mean the direct or indirect ownership of more than fifty percent (50%) of the outstanding shares on a fully diluted basis or other voting rights of the specified entity to elect directors or managers, or the right to direct or cause the direction of the management and policies of the specified entity whether by contract or otherwise; and the terms "controlling" and "controlled" have meaning correlative to the foregoing. 14.7 Further Assurances. Each Party agrees to cooperate fully with the other and to execute such further instruments, documents and agreements and to give such further written assurances, as may be reasonably requested by another Party to better evidence and reflect the transactions described herein and contemplated hereby, and to carry into effect the intents and purposes of this Agreement. 22 + +Source: LIQUIDMETAL TECHNOLOGIES INC, 8-K, 2/5/2020 + + + + + +14.8 Disputes. The parties irrevocably agree that any legal actions or proceedings brought by or against them with respect to this Agreement shall be brought exclusively in the courts in and for Maricopa County, Arizona, and the United States District Court for the District of Arizona, and by execution and delivery hereof, the parties irrevocably submit to such jurisdiction and hereby irrevocably waive any and all objections which they may have with respect to venue in any of the above courts. Notwithstanding the foregoing, this paragraph shall not preclude or limit either Party's rights to pursue actions in the International Trade Commission, or for either Party to pursue an action with respect to a Licensed Patent before a foreign court or governmental agency if neither the federal courts nor the state courts have subject matter jurisdiction over the action. This Agreement, the legal relations between the parties, and any action, whether contractual or non-contractual, instituted by any party with respect to matters arising under or growing out of or in connection with or in respect of this Agreement shall be governed by and construed in accordance with the internal laws of the State of Arizona (U.S.A.), excluding any choice of law rules that may direct the application of the laws of another jurisdiction, and except that questions affecting the construction and effect of any Patent shall be determined by the law of the country in which the Patent has been granted. The parties agree that the United Nations Convention on Contracts for the International Sale of Goods (1980) is specifically excluded from application to this Agreement. THE PARTIES HEREBY EXPRESSLY WAIVE ANY AND ALL RIGHT TO A TRIAL BY JURY WITH RESPECT TO ANY ACTION, PROCEEDING OR OTHER LITIGATION RESULTING FROM OR INVOLVING THE ENFORCEMENT OF THIS AGREEMENT. IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed as of the Effective Date, by their officers, duly authorized. EUTECTIX, LLC LIQUIDMETAL TECHNOLOGIES, INC. By: /s/ Barry D. Russell By: /s/ Isaac Bresnick Name: Barry D. Russell Name: Isaac Bresnick Title: Chief Executive Officer Title: Executive Administrator 23 + +Source: LIQUIDMETAL TECHNOLOGIES INC, 8-K, 2/5/2020 + + + + + +Schedule 1 Field of Use Restrictions The licenses granted under this Agreement shall be subject to the following exclusions, conditions, restrictions, and limitations: 1. The "Field" shall exclude the following products and fields of use: a. Any Consumer Electronic Products (as defined below) or any components or sub-components suitable for use with any Consumer Electronic Products. For this purpose, "Consumer Electronic Products" means personal computers (portable and desktop); tablet or slate style computing devices; handheld electronic and/or communication devices (e.g., smartphones, digital music players, multi-function devices, etc.); any device whose function includes the creation, storage or consumption of digital media; any component or sub-component in any Consumer Electronic Product; and any accessory that is the same or similar (in the sole discretion of Apple, Inc.) to an accessory made or sold by or on behalf of Apple (regardless of when Apple sold or started to sell such accessory, including after date of the closing of the Proposed Transaction) that is suitable for use with any Consumer Electronic Product. b. Any watches or components for watches. c. Finished or semi-finished Jewelry, and also any other products that are sold under the name of a Luxury Brand or incorporated into products that are sold under the name of a Luxury Brand, including without limitation (a) buckles for belts, briefcases, handbags, and clothing; and (b) cigarette lighters and cigar cutters. For purposes hereof, the term "Jewelry" means rings, necklaces, pins, cufflinks, and other objects that are ornamental in nature and used for adornment of the human body. "Luxury Brands" shall not include brands owned or used by Nokia, Motorola, Samsung, LG, Sony-Ericsson, Apple, RIM, HTC or similar companies that supply mobile phones and accessories to the mass-market. Otherwise, "Luxury Brands" consist of the following brands and any other similar, renowned luxury brand which is used as the sole or primary brand on a competitive product sold at similar price point: LVMH Moet Hennessey Rolex Chanel Bentley Motors Chopard Compagnie Financiere Richemont Gucci Group Hermes IWC Jaeger LeCoultre Mercedes Benz Porsche ST DuPont The Swatch Group 24 + +Source: LIQUIDMETAL TECHNOLOGIES INC, 8-K, 2/5/2020 + + + + + +Tiffany & Co. IWC Cartier Montblanc TAG Heuer Louis Vuitton Bvlgari CHANEL Prada Dunhill Aspreys Porsche Ferrari Sellita Group Safilo Group Luxottica Group Ventura Ellicot 2. The licenses to Eutectix shall exclude any patents, technical information, know-how, or other Intellectual Property that Liquidmetal licenses from a third party (other than a third party that is an Affiliate of Liquidmetal) if and to the extent that the terms of the third- party license would prohibit the sublicensing of such Intellectual Property hereunder. 3. The Field shall exclude any products or services that are intended for use in, or likely to be used in, military or weapons/munitions applications, other than with the prior written consent of Liquidmetal. Such written consent shall not be unreasonably withheld, conditioned or delayed. 4. The licenses granted to Eutectix hereunder shall be subject to and limited by (and shall contain any exclusions required by) any applicable state or federal legal or regulatory requirements of any state or federal governmental or regulatory body. Specifically, the licenses granted hereunder, and the Field shall exclude, any Intellectual Property that would require an export license under the United States Export Administration Regulations (EAR) (15 CFR §§ 734.2(b)(2)(ii) and 734.2(b)(4)) or that would require any other consent or authorization of any United States federal or state governmental or regulatory body, unless and until the required export license or other governmental or regulatory consent or authorization is obtained, to the extent that the licenses concern the equipment listed under Section 2.1(b) of this Agreement. 5. Licensed Products may not be sold to any customer in, or to any customer for distribution into, the following countries, without Liquidmetal's prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed: Brunei, Cambodia, China (P.R.C and R.O.C.), East Timor, Indonesia, Japan, Laos, Malaysia, Myanmar, North Korea, Philippines, Singapore, South Korea, Thailand and Vietnam. 25 + +Source: LIQUIDMETAL TECHNOLOGIES INC, 8-K, 2/5/2020 + + + + + +Schedule 2 Minimum Insurance Requirements Eutectix shall obtain, pay for, and maintain in full force and effect throughout the term of this Agreement insurance as follows: (a) Workers' Compensation and Employers' Liability insurance with limits to conform with the greater of the amount required by applicable law or one million dollars ($1,000,000) each accident, including occupational disease coverage and an endorsement to the Workers' Compensation and Employers' Liability insurance policy, in form acceptable to Liquidmetal, containing a waiver of subrogation by the insurance carrier with respect to Liquidmetal and its parent, subsidiaries, divisions and Affiliates, and all of their respective directors, officers, shareholders, employees and representatives; (b) Commercial General Liability insurance with limits of not less than five million dollars ($5,000,000) combined single limit for bodily injury, death, and property damage, including personal injury, contractual liability, independent contractors, broad- form property damage, and products and completed operations coverage; and, (c) Commercial Automobile Liability insurance with limits of not less than one million dollars ($1,000,000) each occurrence combined single limit of liability for bodily injury, death, and property damage, including owned and non-owned and hired automobile coverages, as applicable. As evidence of insurance coverage, Eutectix shall deliver to Liquidmetal on the Effective Date and no less than annually thereafter (a) certificates of insurance issued by Eutectix's insurance carrier showing each of these policies in force during the term of this Agreement, and (b) an endorsement to each required policy, in form acceptable to Liquidmetal, naming Liquidmetal and its parent, subsidiaries, divisions and Affiliates, and all of their respective directors, officers, shareholders, employees and representatives as additional insureds (except under the Workers' Compensation policies). To the extent any insurance coverage required under this Agreement is purchased on a "claims-made" basis, such insurance shall cover all prior acts of Eutectix during the term of this Agreement, and such insurance shall be continuously maintained until at least two (2) years beyond the expiration or termination of the term of this Agreement, or Eutectix shall purchase "tail" coverage, effective upon termination of any such policy or upon termination or expiration of the term of this Agreement, to provide coverage for at least two (2) years from the occurrence of either such event. Eutectix shall give thirty (30) days' prior written notice to Liquidmetal of cancellation, non-renewal, or material change in coverage, scope, or amount of any of the required policies. Eutectix's liability under the Agreement shall not be limited or modified in any way by the amount or terms of any insurance it is required to maintain hereunder. 26 + +Source: LIQUIDMETAL TECHNOLOGIES INC, 8-K, 2/5/2020 + + + + + +Schedule 3 Licensed Technical Information and Patents Included in the Agreement 27 + +Source: LIQUIDMETAL TECHNOLOGIES INC, 8-K, 2/5/2020 \ No newline at end of file diff --git a/full_contract_txt/LohaCompanyltd_20191209_F-1_EX-10.16_11917878_EX-10.16_Supply Agreement.txt b/full_contract_txt/LohaCompanyltd_20191209_F-1_EX-10.16_11917878_EX-10.16_Supply Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..2ed1fbbde539ba7d4bca26342fc6d205f60a86ec --- /dev/null +++ b/full_contract_txt/LohaCompanyltd_20191209_F-1_EX-10.16_11917878_EX-10.16_Supply Agreement.txt @@ -0,0 +1,53 @@ +Exhibit 10.16 SUPPLY CONTRACT Contract No: Date: The buyer/End-User: Shenzhen LOHAS Supply Chain Management Co., Ltd. ADD: Tel No. : Fax No. : The seller: ADD: The Contract is concluded and signed by the Buyer and Seller on , in Hong Kong. 1. General provisions 1.1 This is a framework agreement, the terms and conditions are applied to all purchase orders which signed by this agreement (hereinafter referred to as the "order"). 1.2 If the provisions of the agreement are inconsistent with the order, the order shall prevail. Not stated in order content will be subject to the provisions of agreement. Any modification, supplementary, give up should been written records, only to be valid by buyers and sellers authorized representative signature and confirmation, otherwise will be deemed invalid. 2. The agreement and order 2.1 During the validity term of this agreement, The buyer entrust SHENZHEN YICHANGTAI IMPORT AND EXPORT TRADE CO., LTD or SHENZHEN LEHEYUAN TRADING CO, LTD (hereinafter referred to as the "entrusted party" or "YICHANGTAI" or "LEHEYUAN"), to purchase the products specified in this agreement from the seller in the form of orders. 2.2 The seller shall be confirmed within three working days after receipt of order. If the seller finds order is not acceptable or need to modify, should note entrusted party in two working days after receipt of the order, If the seller did not confirm orders in time or notice not accept orders or modifications, the seller is deemed to have been accepted the order. The orders become effective once the seller accepts, any party shall not unilaterally cancel the order before the two sides agreed . 2.3 If the seller puts forward amendments or not accept orders, the seller shall be in the form of a written notice to entrusted party, entrusted party accept the modified by written consent, the modified orders to be taken effect. 2.4 Seller's note, only the buyer entrust the entrusted party issued orders, the product delivery and payment has the force of law. + +1 + +Source: LOHA CO. LTD., F-1, 12/9/2019 + + + + + +3. GOODS AND COUNTRY OF ORIGIN: 4. Specific order: The products quantity, unit price, specifications, delivery time and transportation, specific content shall be subject to the purchase order issued by entrusted party which is commissioned the buyer. 5. PACKING: To be packed in new strong wooden case(s) /carton(s), suitable for long distance transportation and for the change of climate, well protected against rough handling, moisture, rain, corrosion, shocks, rust, and freezing. The seller shall be liable for any damage and loss of the commodity, expenses incurred on account of improper packing, and any damage attributable to inadequate or improper protective measures taken by the seller in regard to the packing. One full set of technical All wooden material of shipping package must be treated as the requirements of Entry-Exit Inspection and Quarantine Bureau of China, by the agent whom is certified by the government where the goods is exported. And the goods must be marked with the IPPC stamps, which are certified by the government agent of Botanical-Inspection and Quarantine Bureau. 6. SHIPPING MARK: The Sellers shall mark on each package with fadeless paint the package number, gross weight, net weight, measurements and the wordings: "KEEP AWAY FROM MOISTURE","HANDLE WITH CARE" "THIS SIDE UP" etc. and the shipping mark on each package with fadeless paint. 7. DATE OF SHIPMENT: According to specific order by YICHANGTAI or LEHEYUAN. 8. PORT OF SHIPMENT: + +2 + +Source: LOHA CO. LTD., F-1, 12/9/2019 + + + + + +9. PORT OF DESTINATION: SHENZHEN, GUANGDONG, CHINA 10. INSURANCE: To be covered by the Seller for 110% invoice value against All Risks and War Risk. 11. PAYMENT: Under Letter of Credit or T/T: Under the Letter of Credit: The Buyer shall open an irrevocable letter of credit with the bank within 30 days after signing the contract, in favor of the Seller, for 100% value of the total contract value. The letter of credit should state that partial shipments are allowed. The Buyer's agent agrees to pay for the goods in accordance with the actual amount of the goods shipped. 80% of the system value being shipped will be paid against the documents stipulated in Clause 12.1. The remaining 20% of the system value being shipped will be paid against the documents stipulated in Clause 12.2. The Letter of Credit shall be valid until 90 days after the latest shipment is effected. Under the T/T The trustee of the buyer remitted the goods to the seller by telegraphic transfer in batches as agreed upon after signing each order. 12. DOCUMENTS: 12.1 (1) Invoice in 5 originals indicating contract number and Shipping Mark (in case of more than one shipping mark, the invoice shall be issued separately). (2) One certificate of origin of the goods. (3) Four original copies of the packing list. (4) Certificate of Quality and Quantity in 1 original issued by the agriculture products base. (5) One copy of insurance coverage (6) Copy of cable/letter to the transportation department of Buyer advising of particulars as to shipment immediately after shipment is made. + +3 + +Source: LOHA CO. LTD., F-1, 12/9/2019 + + + + + +12.2 (1) Invoice in 3 originals indicating contract number and L/C number. (2) Final acceptance certificate signed by the Buyer and the Seller. 13. SHIPMENT: CIP The seller shall contract on usual terms at his own expenses for the carriage of the goods to the agreed point at the named place of destination and bear all risks and expenses until the goods have been delivered to the port of destination. The Sellers shall ship the goods within the shipment time from the port of shipment to the port of destination. Transshipment is allowed. Partial Shipment is allowed. In case the goods are to be dispatched by parcel post/sea-freight, the Sellers shall, 3 days before the time of delivery, inform the Buyers by cable/letter of the estimated date of delivery, Contract No., commodity, invoiced value, etc. The sellers shall, immediately after dispatch of the goods, advise the Buyers by cable/letter of the Contract No., commodity, invoiced value and date of dispatch for the Buyers. 14. SHIPPING ADVICE: The seller shall within 72 hours after the shipment of the goods, advise the shipping department of buyer by fax or E-mail of Contract No., goods name, quantity, value, number of packages, gross weight, measurements and the estimated arrival time of the goods at the destination. 15. GUARANTEE OF QUALITY: The Sellers guarantee that the commodity hereof is complies in all respects with the quality and specification stipulated in this Contract. 16. CLAIMS: Within 7 days after the arrival of the goods at destination, should the quality, specification, or quantity be found not in conformity with the stipulations of the Contract except those claims for which the insurance company or the owners of the vessel are liable, the Buyers, on the strength of the Inspection Certificate issued by the China Commodity Inspection Bureau, have the right to claim for replacement with new goods, or for compensation, and all the expenses (such as inspection charges, freight for returning the goods and for sending the replacement, insurance premium, storage and loading and unloading charges etc.) shall be borne by the Sellers. The Certificate so issued shall be accepted as the base of a claim. The Sellers, in accordance with the Buyers' claim, shall be responsible for the immediate elimination of the defect(s), complete or partial replacement of the commodity or shall devaluate the commodity according to the state of defect(s). Where necessary, the Buyers shall be at liberty to eliminate the defect(s) themselves at the Sellers' expenses. If the Sellers fail to answer the Buyers within one weeks after receipt of the aforesaid claim, the claim shall be reckoned as having been accepted by the Sellers. + +4 + +Source: LOHA CO. LTD., F-1, 12/9/2019 + + + + + +17. FORCE MAJEURE: The Sellers shall not be held responsible for the delay in shipment or non-delivery, of the goods due to Force Majeure, which might occur during the process of manufacturing or in the course of loading or transit. The Sellers shall advise the Buyers immediately of the occurrence mentioned above and within fourteen days thereafter, the Sellers shall send by airmail to the Buyers a certificate of the accident issued by the competent government authorities, Chamber of Commerce or registered notary public of the place where the accident occurs as evidence thereof. Under such circumstances the Sellers, however, are still under the obligation to take all necessary measures to hasten the delivery of the goods. In case the accident lasts for more than 10 weeks, the Buyers shall have the right to cancel the Contract. 18. LATE DELIVERY AND PENALTY: Should the Sellers fail to make delivery on time as stipulated in the Contract, with exception of Force Majeure causes specified in Clause 17 of this Contract, the Buyers shall agree to postpone the delivery on condition that the Sellers agree to pay a penalty which shall be deducted by the paying bank from the payment. The penalty, however, shall not exceed 5% of the total value of the goods involved in the late delivery. The rate of penalty is charged at 0.5% for every seven days, odd days less than seven days should be counted as seven days. In case the Sellers fail to make delivery ten weeks later than the time of shipment stipulated in the Contract, the Buyers have the right to cancel the contract and the Sellers, in spite of the cancellation, shall still pay the aforesaid penalty to the Buyers without delay, the seller should refund the money received and pay the 30% of the total goods price of the penalty 19. ARBITRATION: All disputes in connection with this Contract or the execution thereof shall be settled friendly through negotiations. In case no settlement can be reached, the case may then be submitted for arbitration to the Foreign Economic and Trade Arbitration Committee of the China Beijing Council for the Promotion of International Trade in accordance with its Provisional Rules of Procedures by the said Arbitration Committee. The Arbitration shall take place in Beijing and the decision of the Arbitration Committee shall be final and binding upon both parties; neither party shall seek recourse to a law court nor other authorities to appeal for revision of the decision. Arbitration fee shall be borne by the losing party. 20. This final price is the confidential information. Dissemination, distribution or duplication of this price is strictly prohibited. + +5 + +Source: LOHA CO. LTD., F-1, 12/9/2019 + + + + + +21. Law application It will be governed by the law of the People's Republic of China ,otherwise it is governed by United Nations Convention on Contract for the International Sale of Goods. 22. <> The terms in the contract are based on (INCOTERMS 2000) of the International Chamber of Commerce. 23. The Contract is valid for 5 years, beginning from and ended on . This Contract is made out in three originals in both Chinese and English, each language being legally of the equal effect. Conflicts between these two languages arising there from, if any, shall be subject to Chinese version. One copy for the Sellers, two copies for the Buyers. The Contract becomes effective after signed by both parties. THE BUYER: THE SELLER: SIGNATURE: SIGNATURE: 6 + +Source: LOHA CO. LTD., F-1, 12/9/2019 \ No newline at end of file diff --git a/full_contract_txt/Loop Industries, Inc. - Marketing Agreement.txt b/full_contract_txt/Loop Industries, Inc. - Marketing Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..977ccd137134e8bf1e1e05a36659a9d0c4200c7e --- /dev/null +++ b/full_contract_txt/Loop Industries, Inc. - Marketing Agreement.txt @@ -0,0 +1,101 @@ +EXHIBIT 10.3 Execution Copy MARKETING AGREEMENT This Marketing Agreement (this "Agreement") is made and entered into as of September __, 2018 (the "Effective Date"), between Loop Industries, Inc., a Nevada corporation with a principal place of business at 480 Fernand-Poitras, Terrebonne, Quebec, Canada ("Loop"), and Indorama Loop Technologies, LLC, a Delaware limited liability company with a principal place of business at [***] ("Joint Venture Company") (each of Loop and Joint Venture Company is a "Party"; together they are the "Parties"). BACKGROUND A. Loop and its Subsidiaries (collectively, "Loop Parties") have developed a proprietary depolymerization process that decouples plastic from fossil fuels, producing dimethylterepthalate ("DMT") and monoethylene glycol ("MEG") for the production of polyethylene terephthalate ("PET") plastic that can be used for a variety of polyester applications. B. Concurrently with the execution of this Agreement, Loop Innovations, LLC, a Delaware limited liability company and a subsidiary of Loop ("Loop Innovations"), and Indorama Ventures Holdings LP, a Delaware limited partnership ("IVH"), have formed Joint Venture Company to develop, construct, own and operate chemical upcycling polyester resin ("CUPET") plants through SPVs (as defined below), the initial of which will be at the facility of [***], a Delaware corporation and a subsidiary of IVH, located in [***], the United States of America (such facility, the "[***] Facility"), and to, among other things, manufacture Licensed Products (as defined below) at the [***] Facility, and potentially other facilities, for sale throughout the world (such contemplated venture, the "CUPET Project"). C. Concurrently herewith, Loop has entered into the License Agreement (as defined below) with Joint Venture Company to provide it and SPVs a license to use proprietary technology for the production of DMT and MEG to enable the production of Licensed Product. D. Loop retains its sole and exclusive right to enter into Loop Sales Contracts (as defined below) for the supply of Licensed Products to Authorized Customers (as defined below), subject to Joint Venture Company's rights in this Agreement. E. Loop desires to assign rights and obligations with respect to the fulfillment of a specific volume and delivery of Product (as defined below) under Loop Sales Contracts to Joint Venture Company, and Joint Venture Company desires to manufacture and fulfill such Product supply requirements, either directly or through an SPV, as determined by the Parties, all in accordance with the terms and conditions set forth in this Agreement. Now, therefore, in consideration of the mutual covenants and premises contained in this Agreement, and other good and valuable consideration, the Parties agree as follows. [***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission. + + + + + +ARTICLE 1 DEFINITIONS 1.1 [***] 1.2 "Acceptance Notice" has the meaning set forth in Section 2.3. 1.3 "Affiliate" means, with respect to a Party, any corporation or other entity that is directly or indirectly controlling, controlled by or under the common control with such Party. For the purpose of this definition, "control" means the direct or indirect ownership of at least fifty percent (50%) of the outstanding shares or other voting rights of the subject entity to elect directors (or, in the case of an entity that is not a corporation, for the election of the corresponding managing authority), or if not meeting the preceding, any entity owned or controlled by or owning or controlling at the maximum control or ownership right permitted in the country where such entity exists. 1.4 "Alternate Producer" has the meaning set forth in Section 2.3. 1.5 "Assignment" has the meaning set forth in Section 2.4. 1.6 "Assignment Date" has the meaning set forth in Section 2.4. 1.7 "Authorized Customer" means a Loop Party customer that is a party to a Transferred Contract, solely with respect to the Product quantities covered by the Transferred Contract. 1.8 "Business Day" means any day, other than a Saturday, Sunday or legal holiday, on which banks in Montreal or South Carolina are open for the conduct of their commercial banking business. 1.9 "Considered Contract" has the meaning set forth in Section 2.2. 1.10 "Contract Eligibility Framework" means, with respect to any Proposed Contract, those criteria set forth Exhibit B. 1.11 "Eligible Contract" has the meaning set forth in Section 2.2. 1.12 "Joint Venture Company" has the meaning set forth in the Recitals. 1.13 "Joint Venture Party" means each of Joint Venture Company and each SPV. 1.14 "License Agreement" means that certain License Agreement between Loop and Joint Venture Company dated as of the Effective Date, as amended, modified or supplemented from time to time (including, for the avoidance of doubt, any changes to the list of Licensed Facilities therein). 1.15 "Licensed Facilities" has the meaning set forth in the License Agreement. [***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission. -2- + + + + + +1.16 "Licensed Products" has the meaning set forth in the License Agreement. 1.17 "Licensed Subject Matter" has the meaning set forth in the License Agreement. 1.18 "LLC Agreement" means the Limited Liability Company Agreement of the Joint Venture Company between Loop Innovations and IVH, as amended, modified or supplemented from time to time. 1.19 "Loop Sales Contract" means a contract between a Loop Party and a third-party customer for the Loop Party's sale to the customer, and the customer's purchase from the Loop Party, of a specified quantity of Loop-branded Products produced using Licensed Subject Matter. 1.20 "Marketing and Sale Restriction" has the meaning set forth in Section 2.7. 1.21 "Products" means recycled or upcycled PET resins. 1.22 "Proposed Contract" has the meaning set forth in Section 2.2. 1.23 "Proposed Contract Notice" has the meaning set forth in Section 2.2. 1.24 "Rejection Notice" has the meaning set forth in Section 2.3. 1.25 "Review Period" has the meaning set forth in Section 2.3. 1.26 "SPV" means each Subsidiary of Joint Venture Company which operates a Licensed Facility. 1.27 "Subsidiary" means, with respect to a Party, any Affiliate of the Party that is directly or indirectly controlled by the Party (with "control" having the meaning provided in Section 2). 1.28 "Transferred Contract" means any Proposed Contract that is accepted or deemed accepted as a Transferred Contract pursuant to Section 2.3. ARTICLE 2 PRODUCT SALES 2.1 Loop Sales Contracts. As between the Parties, subject to Section 2.7, Loop shall have the sole and exclusive right to enter into agreements for the sale of Loop-branded Products or any Products produced using Licensed Subject Matter, and the exclusive right to set the price and quantity to be supplied under each Loop Sales Contract and other terms and conditions as determined by Loop in its commercially reasonable discretion. [***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission. -3- + + + + + +2.2 Proposed Contracts and Proposed Contract Notice. Loop shall give Joint Venture Company prompt written notice, in the form of Exhibit A attached to this Agreement, [***] and (b) pursuant to which Loop offers to assign all of its rights and obligations under such Loop Sales Contract to Joint Venture Company (each such notice, a "Proposed Contract Notice"). Along with each Proposed Contract Notice, Loop shall deliver to Joint Venture Company a complete copy of the executed Loop Sales Contract (the "Proposed Contract"). The Proposed Contract Notice shall contain information necessary to establish whether the Proposed Contract meets the criteria set forth in the Contract Eligibility Framework. Each such Proposed Contract that (i) meets the criteria set forth in the Contract Eligibility Framework and (ii) contains no other terms or conditions other than those set forth in the Contract Eligibility Framework or any form of Loop Sales Contract mutually agreed in writing to be acceptable by the Parties, shall be an "Eligible Contract." Each such Proposed Contract that does not qualify as an Eligible Contract shall be a "Considered Contract." 2.3 Acceptance of Proposed Contracts. All Eligible Contracts shall be deemed accepted by the Joint Venture Company and become a Transferred Contract on the date Loop delivers the Proposed Contract Notice for such Eligible Contract to the Joint Venture Company. In the event that the Proposed Contract Notice is a Considered Contract, the Joint Venture Company will have the right to review and determine whether to accept or reject the Considered Contract within ten (10) days following Joint Venture Company's receipt of the Proposed Contract Notice (the "Review Period"). Joint Venture Company shall provide Loop with a written acceptance or rejection of each Considered Contract ("Acceptance Notice" or "Rejection Notice," as applicable) within the Review Period, which acceptance or rejection shall be in Joint Venture Company's sole discretion. If Joint Venture Company does not provide an Acceptance Notice or Rejection Notice to Loop within the Review Period, the Considered Contract will be deemed rejected by Joint Venture Company. Loop shall be entitled to present any rejected Considered Contract (whether deemed rejected or by receipt of a Rejection Notice) to an Alternate Producer on the same terms and conditions as those presented to Joint Venture Company. If Joint Venture Company provides an Acceptance Notice to Loop with respect to a Considered Contract during the Review Period, that Considered Contract shall become a Transferred Contract on the date Joint Venture Company provides that Acceptance Notice. 2.4 Assignment of Transferred Contracts. Promptly after the date a Proposed Contract becomes a Transferred Contract (the "Assignment Date"), Loop and Joint Venture Company shall execute and deliver an assignment and assumption agreement substantially in the form of Exhibit C attached to this Agreement ("Assignment") pursuant to which Loop shall assign to Joint Venture Company all of Loop's right, title, and interest in the Transferred Contract and Joint Venture Company shall assume all such rights and obligations. Without diminishing Joint Venture Company's obligations to perform under a Transferred Contract pursuant to the assignment and assumption agreement, Joint Venture Company shall cause any applicable SPV to perform all of its assumed obligations under such Transferred Contract. 2.5 Customer Interface. Joint Venture Company shall fulfill all sales of Products under all Transferred Contracts, shall invoice Authorized Customers for all sales of Products under all Transferred Contracts, and shall use commercially reasonable efforts to collect the amounts due under such invoices. At Joint Venture Company's request from time to time, Loop shall provide reasonable assistance to Joint Venture Company in such invoicing and collection process at Joint Venture Company's expense. 2.6 Product Branding. Joint Venture Company shall, and shall cause each SPV to, mark and brand all containers, packaging and related collateral for the Licensed Products in accordance with the License Agreement. [***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission. -4- + + + + + +2.7 Exclusivity. Joint Venture Company shall not, and shall cause each SPV and each of their Affiliates not to, directly or indirectly, market or sell any Loop-branded Products or any Products produced using Licensed Subject Matter to any person or entity except to Authorized Customers pursuant to a Transferred Contract (the "Marketing and Sale Restriction"); provided that if at any time during the term of this Agreement, Loop has delivered Proposed Contract Notices that result in Transferred Contracts having binding purchase and supply obligations for less than [***] of the then existing actual production capacity of a Licensed Facility (taking into account Joint Venture Company's reasonable forecasts based on customer requirements, seasonal variations, and other factors) in the subsequent three months (the "[***]"), Joint Venture Company may market and solicit orders for Licensed Products produced in such Licensed Facility directly to customers and potential customers and enter into supply contracts for the sale of Loop-branded Products or any Products produced using Licensed Subject Matter produced in such Licensed Facility with customers without being restricted by the Marketing and Sale Restriction. If at any subsequent time during the term of this Agreement Loop gives Joint Venture Party written notice that Loop is then capable of meeting, and is prepared to meet, the [***] and provides reasonable supporting information and documentation to Joint Venture Party with such notice, then at a date selected by Joint Venture Company that is within ninety (90) days after Joint Venture Company receives such written notice, the Market and Sale Restriction and the other provisions of this Section 2.7 shall go back into force. Nothing in this Section 2.7 shall relieve Loop of any of its obligations under this Agreement. ARTICLE 3 LIMITATION OF LIABILITY 3.1 LIMITATION OF LIABILITY. IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER UNDER THIS AGREEMENT OR OTHERWISE FOR CONSEQUENTIAL, SPECIAL, INCIDENTAL, EXEMPLARY, STATUTORY, OR PUNITIVE DAMAGES ARISING OUT OF OR RELATED TO THIS AGREEMENT. JOINT VENTURE COMPANY'S TOTAL CUMULATIVE LIABILITY TO THE LOOP PARTIES WITH RESPECT TO A TRANSFERRED CONTRACT, IN ALL CIRCUMSTANCES AND REGARDLESS OF THE THEORY OF RECOVERY, SHALL BE LIMITED TO THE AMOUNT OF ACTUAL, DIRECT, AND DOCUMENTED DAMAGES THE APPLICABLE AUTHORIZED CUSTOMER ACTUALLY RECOVERS FROM THE LOOP PARTIES UNDER THE TRANSFERRED CONTRACT BASED SOLELY ON JOINT VENTURE COMPANY'S BREACH OF SUCH TRANSFERRED CONTRACT. JOINT VENTURE COMPANY SHALL NOT HAVE ANY LIABILITY TO ANY LOOP PARTY WITH RESPECT TO ANY ELIGIBLE CONTRACT THAT DOES NOT BECOME A TRANSFERRED CONTRACT AS PROVIDED IN SECTION 2.3. NOTWITHSTANDING THE FOREGOING, NONE OF THE FOREGOING LIMITATIONS OF LIABILITY SET FORTH IN THIS SECTION 3.1 SHALL BE AVAILABLE TO EITHER PARTY WITH RESPECT TO A BREACH OF SECTION 4, CONFIDENTIAL INFORMATION, OR FOR CLAIMS TO THE EXTENT THEY ARISE OUT OF A PARTY'S GROSS NEGLIGENCE, FRAUD, OR WILLFUL MISCONDUCT. [***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission. -5- + + + + + +ARTICLE 4 CONFIDENTIAL INFORMATION 4.1 Confidential Information. The term "Confidential Information" means any information disclosed by one Party to the other (i) prior to the date of this Agreement but with respect to the subject matter of this Agreement, or (ii) pursuant to this Agreement, in each case which is in written, graphic, machine readable or other tangible form and is marked "Confidential," "Proprietary" or in some other manner to indicate its confidential nature. Confidential Information may also include oral information disclosed by one Party to the other pursuant to this Agreement, pro-vided that such information is designated as confidential at the time of disclosure and reduced to a written summary by the disclosing Party, within thirty (30) days after its oral disclosure, which is marked in a manner to indicate its confidential nature and delivered to the receiving party. 4.2 Obligation. Each Party shall treat as confidential (as set forth herein) all Confidential Information of the other Party, and shall not use such Confidential Information except as contemplated in this Agreement or as otherwise authorized in writing. Each Party shall implement reasonable procedures to prohibit the unauthorized disclo-sure or misuse of the other Party's Confidential Information and shall not intentionally disclose such Confidential Information to any third party except as may be necessary or useful in connection with the rights and obligations of such Party under this Agreement, and subject to confidentiality obligations similar to those set forth in this Article 4. Each of the Parties shall use at least the same procedures and degree of care that it uses to prevent the disclosure of its own confidential information of like importance to prevent the disclosure of Confidential Information disclosed to it by the other Party under this Agreement, but in no event less than reasonable care. 4.3 Exclusions. Notwithstanding the foregoing, Confidential Information excludes information that: (a) was publicly available at the time it was disclosed or becomes publicly available through no fault of the receiving Party; (b) was known to the receiving Party, without similar confidentiality restriction, at the time of disclosure; (c) is disclosed with the prior written approval of the disclosing Party; (d) was independently developed by the receiving Party without any use of the Confidential Information of the disclosing Party; or (e) becomes known to the receiving Party, without similar confidentiality restriction, from a source other than the disclosing Party without breach of this Agreement by the receiving Party. 4.4 Compelled Disclosure. The receiving Party may disclose the Confidential Information of disclosing Party if compelled to do so by law, a court or other authority; provided that the receiving Party shall give the disclosing Party prompt written notice so that the disclosing Party may take steps to oppose such disclosure. [***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission. -6- + + + + + +4.5 Confidentiality of Agreement. Each Party agrees that the terms and conditions, but not the existence, of this Agreement shall be treated as the other's Confidential Information and that no public reference to the terms and conditions of this Agreement or to activities pertaining to this Agreement can be made without the prior written consent of the other Party; provided, however, that each Party may disclose the terms and conditions of this Agreement: (i) as required by any court or other governmental body; (ii) as otherwise required by law; (iii) to legal counsel of the Parties; (iv) in public documents, in connection with the requirements of an initial public offering, secondary offering, or debt offering or any securities filing of the Parties; (v) in confidence, to accountants, banks, and financing sources and their advisors; (vi) in confidence, in connection with the enforcement of this Agreement or rights under this Agreement; or (vii) in confidence, in connection with a merger or acquisition or proposed merger or acquisition, or the like. ARTICLE 5 TERM AND TERMINATION 5.1 Term. This Agreement begins on the Effective Date and shall continue indefinitely unless sooner terminated as provided in this Article 5. 5.2 Termination for Breach. If a Party commits a material breach of this Agreement, the non-breaching Party shall be entitled to terminate this Agreement if the breaching party does not cure the breach within thirty (30) days after the non- breaching party gives the breaching party written notice of the specific breach. 5.3 Other Termination. Either Party shall be entitled to terminate this Agreement by written notice to the other Party and IVH upon the dissolution of Joint Venture Company or upon termination of the License Agreement in accordance with its terms. 5.4 Effect of Termination; Survival. The rights and obligations of the Parties under the following Articles and Sections shall survive any expiration or termination of this Agreement: Article 1, Article 3, Article 4, Article 6 and Article 7, and this Section 5.4. ARTICLE 6 REPRESENTATIONS AND WARRANTIES 6.1 Mutual Representations and Warranties. Each Party hereby represents and warrants to the other Party that: (a) Organization. It is a corporation (or limited liability company) duly organized (or formed), validly existing and in good standing under the laws of its state of organization (or formation); (b) Authority; Enforceability. It has full corporate (or limited liability company) power and authority to enter into this Agreement, to carry out its obligations hereunder and to consummate the transactions contemplated hereby; its execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all its requisite entity action; and it has duly executed and delivered this Agreement, and (assuming due authorization, execution and delivery by the other Party) this Agreement constitutes its legal, valid and binding obligations, enforceable against it in accordance with their respective terms; and [***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission. -7- + + + + + +(c) No Conflicts; Consents. Its execution, delivery and performance of this Agreement, and the consummation of the transactions contemplated hereby, do not and will not (i) violate or conflict with its organizational documents or (ii) violate or conflict with any provision of law or governmental order applicable to it; and no consent, approval, waiver or authorization is required to be obtained by it from any person (including any governmental authority) in connection with its execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby. 6.2 NO OTHER REPRESENTATIONS. THE EXPRESS REPRESENTATIONS AND WARRANTIES STATED IN THIS AGREEMENT ARE IN LIEU OF ALL OTHER REPRESENTATIONS AND WARRANTIES, EXPRESS, IMPLIED, OR STATUTORY, REGARDING THE SUBJECT MATTER OF THIS AGREEMENT, INCLUDING WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND NON-INFRINGEMENT. ARTICLE 7 GENERAL PROVISIONS 7.1 Independent Contractors. The Parties are independent contractors. Nothing contained in this Agreement or done pursuant to this Agreement shall constitute either Party as the agent of the other Party for any purpose or in any sense whatsoever, or constitute the Parties as partners or joint venturers. 7.2 Amendment. No alteration, amendment, waiver, cancellation or any other change in any term or condition of this Agreement shall be valid or binding on either Party unless mutually assented to in writing by both Parties. 7.3 Notices. All notices required or permitted to be given under this Agreement shall be in writing and shall be delivered by electronic transmission (email or fax) or prepaid air express or registered airmail, postage prepaid, to the following: If to Loop: Loop Industries, Inc. 480 rue Fernand-Poitras Terrebonne, Quebec J6Y 1Y4 Canada E-mail: apenta@loopindustries.com Attention: Antonella Penta [***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission. -8- + + + + + +With a copy to: Wilson Sonsini Goodrich & Rosati 1700 K Street NW, 5TH Floor Washington, DC 20006 United States of America E-mail: jclessuras@wsgr.com Attention: James Clessuras If to Joint Venture Company: Indorama Loop Technologies, LLC [***] [***] Email: ________________________________ Attention: _____________________________ With copies to: Loop Innovations, LLC c/o Loop Industries, Inc. 480 rue Fernand-Poitras Terrebonne, Quebec J6Y 1Y4 Canada E-mail: apenta@loopindustries.com Attention: Antonella Penta Indorama Ventures Holdings LP 4235 South Stream Boulevard, Charlotte, NC 28217 Email: hunter.stamey@us.indorama.net Attention: Hunter Stamey Wilson Sonsini Goodrich & Rosati 1700 K Street NW, 5TH Floor Washington, DC 20006 United States of America E-mail: jclessuras@wsgr.com Attention: James Clessuras [***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission. -9- + + + + + +and Parker Poe Adams & Bernstein 401 S. Tryon Street Suite 3000 Charlotte, NC 28202 E-mail: stevehunting@parkerpoe.com Attention: Stephen R. Hunting Each Party may change its address set forth above by written notice to the other. 7.4 Choice of Law. This Agreement shall be governed by and interpreted in accordance with the laws of the State of Delaware, United States of America, without reference to conflict-of-laws principles. 7.5 Disputes. All disputes arising out of or in connection with this Agreement shall be finally settled in accordance with Section 13.11 of the LLC Agreement and such provisions shall be incorporated herein mutatis mutandis; provided that each reference to "Party" shall be deemed a Party hereunder notwithstanding them being different entities. 7.6 Waiver. Any failure by either Party to enforce at any time any terms and conditions of this Agreement shall not be considered a waiver of that Party's right thereafter to enforce such terms and conditions or any other terms and conditions of this Agreement. 7.7 Severability. Should any clause, sentence, section, article or paragraph of this Agreement judicially be declared to be invalid, unenforceable, or void, such decision shall not have the effect of invalidating or voiding the remainder of this Agreement. 7.8 Assignment. This Agreement shall inure to the benefit of, and shall be binding upon, the Parties and their respective successors and assigns, but neither Party may assign this Agreement without the prior written consent of the other except to a person into which it has merged or who has otherwise succeeded to all or substantially all of the business and assets of the assignor, and who has assumed in writing or by operation of law its obligations under this Agreement. 7.9 Entire Agreement. This Agreement (including its Exhibits) sets forth the entire agreement between the Parties as to the subject matter hereof and supersedes all previous negotiations, agreements and writings in respect thereto and any usage of trade, and shall not be extended, supplemented or amended except by an instrument in writing duly executed by an authorized officer or representative of each Party. 7.10 Counterparts. This Agreement may be executed in counterparts or duplicate originals, both of which shall be regarded as one and the same instrument, and which shall be the official and governing version in the interpretation of this Agreement. [***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission. -10- + + + + + +IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed in duplicate, as of the Effective Date, by their duly authorized officers or representatives. Loop Industries, Inc. Indorama Loop Technologies, LLC + +By: By: Name: Name: Title: Title: [***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission. -11- + + + + + +EXHIBIT A PROPOSED CONTRACT NOTICE Loop Sales Contract: Authorized Customer: Licensed Facility/SPV: Contract Eligibility Framework Criteria: ¨ Eligible Contract ¨ Considered Contract [***] Special terms and conditions of Considered Contract (i.e., terms and conditions materially affecting the above Commercial or Technical Aspects): [***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission. + + + + + +EXHIBIT B CONTRACT ELIGIBILITY FRAMEWORK [***] * The specific values for the criteria will be agreed by the Parties after the Effective Date, and may be revised from time to time upon the mutual written agreement of the Parties. [***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission. + + + + + +EXHIBIT C FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT This Assignment and Assumption Agreement (this "Assignment"), dated as of __, 2018 (the "Assignment and Assumption Date"), is made by and between Loop Industries, Inc., a Nevada corporation with a principal place of business at 480 Fernand-Poitras, Terrebonne, Quebec, Canada (the "Assignor"), and Indorama Loop Technologies, LLC, a Delaware limited liability company with a principal place of business at [***] (the "Assignee") (each of Assignor and Assignee is a "Party;" together they are the "Parties"). RECITALS A. On August __, 2018, the Parties entered into a Marketing Agreement (the "Marketing Agreement") pursuant to which the Assignor may assign its rights and obligations under certain Loop Sales Contracts to the Assignee (capitalized terms used herein but not defined herein shall have the respective meanings ascribed to them in the Marketing Agreement). B. Thereafter, the Assignor and [name of other party to sales contract] (the "Buyer") entered into the Loop Sales Contract attached as Exhibit A pursuant to which, inter alia, the Assignor agreed to manufacture and deliver Loop-branded Product to the Buyer. C. Pursuant to Section 2.4 of the Marketing Agreement, the Assignor desires to assign all rights and obligations under the Loop Sales Contract (the "Transferred Contract") to the Assignee, and the Assignee desires to accept such assignment and assume such obligations on the terms and conditions of this Assignment. In consideration of the mutual covenants in this Assignment, and other good and valuable consideration, the Parties agree as follows: AGREEMENT 1. Assignment and Assumption. a. The Assignor hereby assigns, transfers, and conveys to and in favor of the Assignee all of the Assignor's right, title, and interest in, to, and under the Transferred Contract, together with its related rights, warranties, remedies, powers, and privileges (collectively, the "Assigned Rights"). The Assignee hereby accepts the Assigned Rights. b. The Assignor hereby delegates and transfers to the Assignee all obligations of the Assignor under the Transferred Contract that accrue during the term of this Assignment (collectively, the "Assumed Obligations"). The Assignee hereby agrees to perform the Assumed Obligations in accordance with their terms. 2. Assignor Representations and Warranties. The Assignor represents and warrants that: a. The Transferred Contract is in full force and effect and is enforceable in accordance with its terms; [***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission. + + + + + +b. Exhibit A contains the entire agreement of the Assignor and Buyer relating to the Transferred Contract, and the Transferred Contract has not been amended or modified in any way; c. There are no disputes, pending or threatened, related to the Transferred Contract; d. No event or condition has occurred that is, or with the passage of time would be, a default under the Transferred Contract; and e. Buyer has consented in writing to this Assignment, either in the express terms of the Transferred Contract or in a separate signed consent the Assignor has delivered to the Assignee. 3. SPV. The Assignee may assign the Assigned Rights and may delegate the Assumed Obligations to an SPV in accordance with the terms of the Marketing Agreement. 4. Counterparts. This Assignment may be executed in counterparts or duplicate originals, all of which shall be regarded as one and the same instrument. 5. Governing Law. This Assignment shall be governed by and interpreted in accordance with the laws of the State of Delaware, United States of America, without reference to conflict-of-laws principles. 6. Further Assurances. Each Party shall, at its own expense, execute and deliver such other documents and perform such other acts as may be reasonably necessary to effect this Assignment. 7. Amendments. No alteration, amendment, waiver, cancellation, or any other change in any term or condition of this Assignment shall be valid or binding on either Party unless both Parties agree in writing. 8. Successors and Assigns. This Assignment shall inure to the benefit of, and shall be binding upon, the Parties and their respective successors and assigns, but, except as provided in Section 3 above, neither Party may assign this Assignment without the prior written consent of the other Party. 9. Severability. Should any clause, sentence, section, article or paragraph of this Assignment judicially be declared to be invalid, unenforceable, or void, such decision shall not have the effect of invalidating or voiding the remainder of this Assignment. 10. No Third Party Beneficiaries. This Assignment is solely for the benefit of the Assignor and the Assignee and their successors and permitted assigns, and no right or cause of action shall accrue by reason hereof for the benefit of any third party. (Signatures on next page) [***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission. 2 + + + + + +The Parties have caused this Assignment and Assumption Agreement to be executed in duplicate, as of the Assignment and Assumption Date, by their duly authorized officers or representatives. Loop Industries, Inc. Indorama Loop Technologies, LLC By: By: Name: Name: + +Title: Title: [***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission. 3 + + + + + +EXHIBIT A TO ASSIGNMENT AND ASSUMPTION AGREEMENT LOOP SALES CONTRACT [***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission. \ No newline at end of file diff --git a/full_contract_txt/MACROGENICSINC_08_02_2013-EX-10-COLLABORATION AGREEMENT.txt b/full_contract_txt/MACROGENICSINC_08_02_2013-EX-10-COLLABORATION AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..be5444a55e0e597c10470287fbcafa98d4936bcc --- /dev/null +++ b/full_contract_txt/MACROGENICSINC_08_02_2013-EX-10-COLLABORATION AGREEMENT.txt @@ -0,0 +1,1615 @@ +Exhibit 10.17 + +Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Triple asterisks denote omissions. + +COLLABORATION AGREEMENT + +This Collaboration Agreement ("Agreement"), effective as of June , 2010 (the "Effective Date"), is entered into by and between MacroGenics, Inc., a Delaware corporation with a place of business at 1500 East Gude Drive, Rockville, MD 20850 ("MacroGenics"), and Green Cross Corp., a Korean company with a place of business at 303 Bojeong­Dong, Giheung­Gu, Yongin, 446­770, Korea ("Green Cross"). MacroGenics and Green Cross may be referred to herein individually as a "Party" or collectively as the "Parties." + +Recitals: + +A. MacroGenics has expertise in, and platforms for, the discovery and development of products for the treatment of patients with cancer, inflammatory and infectious diseases. + +B. Green Cross conducts research and development with respect to, and sells, pharmaceutical products. + +C. Green Cross and MacroGenics desire to enter into collaboration for the development of MacroGenics' anti­HER2 Antibody known as MGAH22, and if approved for commercialization, the commercialization of a Product in South Korea, all upon the terms and conditions set forth in this Agreement. + +D. MacroGenics desires to grant to Green Cross, and Green Cross desires to receive, an exclusive license for all Indications for all pharmaceutical forms of MGAH22 for South Korea, upon the terms and conditions set forth in this Agreement. + +In consideration of the foregoing premises and the mutual covenants herein contained, the Parties hereby agree as follows: + +Agreement: + +1. DEFINITIONS. Unless specifically set forth to the contrary herein, the following capitalized terms, whether used in the singular or plural, shall have the respective meanings set forth below: + +1.1 "Affiliate" means with respect to any Party, any person or entity controlling, controlled by or under common control with such Party. For purposes of this Section 1.1, "control" means (a) in the case of a corporate entity, direct or indirect + + + + + +ownership of at least fifty percent (50%) or more of the stock or shares having the right to vote for the election of directors of such corporate entity and (b) in the case of an entity that is not a corporate entity, the possession, directly or indirectly, of the power to direct, or cause the direction of, the management or policies of such entity, whether through the ownership of voting securities, by contract or otherwise. + +1.2 "Allocable Overhead" means costs incurred by each Party that are attributable to that Party's *** reasonably allocated to the Party's departments or functions, or used to support activities under the Collaboration based on space occupied or headcount or other activity-based methods consistently applied by each Party. The Allocable Overhead shall not include any costs attributable to *** + +1.3 "Antibody" means a molecule comprising or containing: (a) one or more immunoglobulin variable domains; (b) fragments, variants, modifications or derivatives of such immunoglobulin variable domains; and (c) the nucleic acid consisting of a sequence of nucleotides encoding (or complementary to a nucleic acid encoding) the foregoing molecules in (a) or (b). The term "Antibody" shall include any monospecific antibodies; less than full­length antibody forms such as Fv, Fab, and F(ab'); single­chain antibodies; and an antibody bound to a drug, label or other moiety and any antibody that is conjugated or fused to any other composition, including for example, a toxin, radionucleotide, small molecule, polypeptide or polypeptide fragment. The term Antibody also includes, without limitation to its source or method of manufacture, any human, humanized, primatized, chimeric or other antibody. + +1.4 "Applicable Laws and Regulations" means all international, national, federal, state, regional, provincial and local government laws, rules, and regulations that apply to either Party or to the conduct of the Collaboration under this Agreement including without limitation cGMP, GCP, GBPS, and the laws, rules and regulations of the ICH, that may be in effect, as applicable and amended from time to time. + +1.5 "Arbitral Tribunal" has the meaning set forth in Section 17.7(a). + +1.6 "BLA" means (a) a Biologics License Application or New Drug Application ("NDA") filed with the FDA for marketing approval of a Product or any successor applications or procedures, and all supplements and amendments that may be filed with respect to the foregoing, or similar filings outside the Territory with applicable Regulatory Authorities, for approval to commercially market and sell a Product, or (b) similar filings in the Territory with applicable Regulatory Authorities, including the KFDA, for approval to commercially market and sell a Product. The term BLA shall exclude pricing and reimbursement approvals. + +1.7 "Calendar Quarter" means the respective periods of three (3) consecutive calendar months ending on March 31, June 30, September 30 and December 31. + +*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment. An unredacted version of this exhibit has been filed separately with the Commission. + +2 + + + + + +1.8 "Calendar Year" means the respective periods of twelve (12) months commencing on January 1 and ending on December 31. + +1.9 "cGMP" means current good manufacturing practices and general biologics products standards as promulgated under the FDCA or Applicable Law and Regulations in the Territory, as applicable. + +1.10 "Change in Control" means the occurrence of any of the following: + +(a) Either Party to this Agreement enters into a merger, consolidation, stock sale or sale or transfer of all or substantially all of its assets, or other similar transaction or series of transactions with another Person unless, following such transaction or transactions, (i) the individuals and entities who were the beneficial owners of the outstanding voting securities of the subject Party immediately prior to such transaction beneficially own, directly or indirectly, at least fifty percent (50%) of the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors or similar governing persons of the corporation or other entity resulting from such transaction ("Successor") in substantially the same proportions as their ownership immediately prior to such transaction of such outstanding voting securities, (ii) at least fifty percent (50%) of the members of the Board of Directors or similar governing body of the Successor were members of the Board of Directors of the subject Party at the time of the execution of the initial agreement, or the action of the Board of Directors of the subject Party, providing for such transaction; (iii) the subject Party retains title ownership after the transaction or transactions to properties and assets (x) representing more than fifty percent (50%) of such Person's consolidated total assets or (y) from which more than fifty percent (50%) of such Person's consolidated operating income for its most recent fiscal was derived, and (iv) the subject Party is the surviving entity in such transaction or transactions; + +(b) any transaction or series of related transactions in which any Person or group of Persons acquires beneficial ownership of securities of the subject Party representing more than fifty percent (50%) of the combined voting power of the then outstanding securities of the subject Party. + +1.11 "Clinical Data" means all data generated or arising from the conduct of a clinical trial or other Development efforts under this Agreement. + +1.12 "Clinical Material(s)" means MGAH22 and Product formulated in accordance with the specifications as adopted by the JSC and United States and Korean laws, rules and regulations (a) for preclinical activities, and (b) for administration to subjects in clinical trials. + +1.13 "CMC" means Chemistry Manufacturing and Controls. + +1.14 "Collaboration" means the program established under this Agreement, which includes collaborative development of Products. + +*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment. An unredacted version of this exhibit has been filed separately with the Commission. + +3 + + + + + +1.15 "Commencement" means the first dosing of a human subject with the applicable Product in the applicable human clinical trial. + +1.16 "Commercial Supply Costs" shall mean the costs paid by Green Cross to MacroGenics for the commercial supply of Product pursuant to Section 6.2(d), provided that Commercial Supply Costs for a Product shall not be deemed incurred by Green Cross for purposes of this Agreement until the Calendar Quarter in which such Product is sold by Green Cross or any of its Related Parties. + +1.17 "Commercialization" or "Commercialize" means activities taken before and after obtaining Regulatory Approval relating specifically to the pre-launch, launch, promotion, marketing, sales force recruitment, sale and distribution of a pharmaceutical product and post-launch medical activities, including without limitation: (a) distribution for commercial sale; (b) strategic marketing, sales force Detailing, advertising, and market and product support; (c) medical education and liaison and any Phase IV Clinical Trials, to the extent permitted by this Agreement; (d) all customer support and product distribution, invoicing and sales activities; and (e) all post-approval regulatory activities, including those necessary to maintain Regulatory Approvals. + +1.18 "Commercially Reasonable Efforts" means with respect to the efforts to be expended by a Party with respect to any objective under this Agreement, reasonable, good faith efforts to accomplish such objective as such Party would normally use to accomplish a similar objective of such Party under similar circumstances, it being understood and agreed that with respect to the Development or Commercialization of MGAH22 and Products, such efforts shall be similar to those efforts and resources commonly used by a Party for a similar biological or pharmaceutical product owned by it or to which it has rights, which product is at a similar stage in its development or product life and is of similar market potential taking into account efficacy, safety, approved labeling, the competitiveness of alternative products in the marketplace, the patent and other proprietary position of the product, and the likelihood of regulatory approval given the regulatory structure involved. + +1.19 "Competing Product" means any Antibody that binds to the protein termed "HER2/Neu", other than a Product. + +1.20 "Completion" or "Completed" for a clinical trial means the later of the following dates: (a) the date on which all patients have completed protocol-defined study drug administration, and (b) *** + +1.21 "Confidential Information" means any and all non­public scientific, pre­clinical, clinical, regulatory, manufacturing, marketing, financial and commercial information and data, in any tangible or intangible form, including all Know-how subject to Section 12. + +1.22 "Control," "Controls" or "Controlled by" means (except as used in Section 1.1), with respect to any item of or right under Patents or Know-how, the ability + +*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment. An unredacted version of this exhibit has been filed separately with the Commission. + +4 + + + + + +of a Party (whether through ownership or license, other than pursuant to this Agreement) to grant access to, or a license or sublicense of, such item or right as provided for herein without violating the terms of any agreement or other arrangement with any Third Party existing at the time such Party would be required hereunder to grant the other Party such access or license or sublicense. + +1.23 "CRO" means a clinical research organization. + +1.24 "CTA" means a Clinical Trial Application or its equivalent used to obtain approval to conduct human clinical investigations filed with or submitted to the KFDA in order to establish the clinical safety and/or efficacy of one or more investigational products in conformance with the requirements of the KFDA. + +1.25 "Data Exclusivity Period" means the period during which the FDA or KFDA (or, in countries other than the United States or South Korea, an equivalent regulatory agency) prohibits reference, without the consent of the owner of a BLA, to the clinical and other data that is contained in such BLA, and that is not published or publicly available outside of such BLA. + +1.26 "Details" or "Detailing" means face­to­face sales presentations made to physicians, nurses, pharmacists, and other individuals who provide healthcare services to patients, in their capacity as such. + +1.27 "Develop" or "Development" or "Developing" means research, discovery, process development, manufacturing for preclinical and clinical uses, and preclinical and clinical drug or biological development activities, including, without limitation, test method development and stability testing, toxicology, formulation, quality assurance/quality control development, statistical analysis, preclinical and clinical studies and regulatory affairs, approval and registration, in each case, of MGAH22 or a Product for therapy of human diseases. + +1.28 "Development Costs" means all costs incurred in connection with any Development activities. + +1.29 "FDA" means the United States Food and Drug Administration, or any successor agency thereto. + +1.30 "FDCA" means the Federal Food, Drug and Cosmetic Act, as amended. + +1.31 "Field" means all oncology therapies; provided, however, that in the case of any Products covered by a Patent or other intellectual property right licensed in one or more Upstream Licenses, "Field" shall be limited to the minimum extent necessary to comply with the terms of such Upstream License for so long as such limitation is necessary to avoid breach of the Upstream License. + +*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment. An unredacted version of this exhibit has been filed separately with the Commission. + +5 + + + + + +1.32 "Filing of a BLA" means the acceptance by a Regulatory Authority of such BLA for filing. + +1.33 "First Commercial Sale" means, with respect to any Product, the first sale to a Third Party for end use or consumption of such Product in the Territory after Regulatory Approval has been granted by the Regulatory Agency for the Product in the Territory. + +1.34 "Fully Burdened Manufacturing Cost" or "FBMC" means one hundred percent (100%) of MacroGenics' actual manufacturing cost of goods produced, as determined for each stage of the manufacturing process, in accordance with GAAP, including product quality assurance/control costs, failed lots, plus applicable Allocable Overhead. Such Fully Burdened Manufacturing Cost shall include, without limitation: (i) *** + +1.35 "GAAP" means U.S. Generally Accepted Accounting Principles as the same may be in effect from time to time. + +1.36 "GBPS" means the General Biological Products Standards as set forth in 21 C.F.R. Part 610, to the extent applicable to the Collaboration. + +1.37 cGMP" or "current Good Manufacturing Practices" means current Good Manufacturing Practices as set forth in the FDCA and the Public Health Service Act (the "PHS Act"), and in regulations at 21 C.F.R. Parts 210, 211 and 600, as in effect at the time when any clinical trial regarding a Product is being conducted, provided, and to the extent applicable to such clinical trial, as such regulations are interpreted and enforced by the FDA, including as set forth in applicable guidance documents issued by the FDA, and in accordance with applicable, generally accepted industry standards. + +1.38 "GCP" or "Good Clinical Practices" means current Good Clinical Practices as set forth in the Applicable Laws and Regulations, such as FDCA and the PHS Act and regulations set forth at 21 C.F.R. Part 312, as well as (but not limited to) the requirements set forth in Directive 2001/20/EC of the European Parliament and of the Council of 4 April 2001 and Commission Directive 2005/28/EC of 8 April 2005, to the extent applicable to a clinical trial regarding any Product, as such obligations are interpreted and enforced by the applicable Regulatory Authority (e.g., FDA and Member States of the European Union), and as interpreted under prevailing industry standards, including standards of medical ethics, applicable guidance documents issued by the FDA and any other Regulatory Authority, including ICH GCP, the informed consent requirements set forth in 21 C.F.R. Part 50 and the equivalent legal requirements in other applicable jurisdictions, the requirements relating to Institutional Review Boards set forth in 21 C.F.R. Part 56 and the equivalent legal requirements in other applicable jurisdictions, all as the same may be amended from time to time. + +1.39 "GLP" or "Good Laboratory Practices" means the recognized rules governing the conduct of non­clinical safety studies and ensuring the quality, integrity and reliability of study data as set forth in Applicable Laws and Regulations, such as 21 C.F.R. Part 58. + +*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment. An unredacted version of this exhibit has been filed separately with the Commission. + +6 + + + + + +1.40 "Green Cross Indemnitees" has the meaning set forth in Section 14.2. + +1.41 "Green Cross Licensed Know-how" means all Know-how (excluding any Patent) Controlled by Green Cross as of the Effective Date or at any time during the Term that is: (a) related to MGAH22 and (b) necessary for MacroGenics to exercise the rights licensed to it under this Agreement or perform its obligations under this Agreement. "Green Cross Licensed Know­how" shall also include Green Cross' interest in any Know-how deemed jointly owned pursuant to Section 15.1(c). + +1.42 "Green Cross Licensed Patents" means any and all Patents Controlled by Green Cross at any time during the Term that: (a) are related to any data, result or invention conceived or reduced to practice in the course of conducting the Collaboration solely by Green Cross specifically in relation to MGAH22 and (b) Green Cross' interest in any Patent deemed jointly owned pursuant to Section 15.1(c). + +1.43 "Health Insurance Portability and Accountability Act" or "HIPAA" means the act enacted by the U.S. Congress in 1996 and took effect in 2003 that strictly dictates the parameters that identifiable private health information (PHI) can be shared outside of the research environment, as amended. + +1.44 *** + +1.45 "ICH" means the International Conference on Harmonisation. + +1.46 "IND" means an Investigational New Drug application, or similar application or submission for approval to conduct human clinical investigations filed with or submitted to a Regulatory Authority in conformance with the requirements of such Regulatory Authority. + +1.47 "Indemnifying Party" means the Party that is obligated to indemnify the Indemnitee under Section 14. + +1.48 "Indemnitee" means either the Green Cross Indemnitee or the MacroGenics Indemnitee, as applicable. + +1.49 "Independent Ethics Committee" or "IEC" means an independent body (a review board or a committee, institutional, regional, national, or supranational), constituted of medical professionals and non-medical members, whose responsibility it is to ensure the protection of the rights, safety and well-being of human subjects involved in a trial and to provide public assurance of that protection, by, among other things, reviewing and approving / providing favorable opinion on, the trial protocol, the suitability of the investigator(s), facilities, and the methods and material to be used in obtaining and documenting informed consent of the trial subjects. The legal status, + +*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment. An unredacted version of this exhibit has been filed separately with the Commission. + +7 + + + + + +composition, function, operations and regulatory requirements pertaining to IEC may differ among countries, but should allow the Independent Ethics Committee to act in agreement with GCP as described in this guideline. + +1.50 "Indication" means a separate and distinct disease, disorder or medical condition in humans or non­human animals which a product is intended to treat, prevent, diagnose, monitor or ameliorate and which, for a Product, is intended to be reflected in the labeling for such Product as an approved Indication, and which, for an approved Product, is reflected in the labeling for such Product. + +1.51 "Informed Assent Form" or "IAF" means an agreement to participate by subjects who are not able to give consent, either because they are minors or because they are legally incompetent. + +1.52 "Informed Consent Form" or "ICF" means a document that outlines a patient's rights during participation in a clinical trial. It also discusses the potential risks and benefits associated with participation, including all available data on previous studies. The ICF must be signed by the patient or authorized caregiver before entrance is granted into a study. + +1.53 "Initial Public Offering" means the first completed offering of capital stock of MacroGenics registered under the Securities Act of 1933, as amended. + +1.54 "Investigational Review Board" or "IRB" means in accordance with 45 C.F.R. 46, Protection of Human Subjects (Revised November 13, 2001) and 21 C.F.R. 45, Subpart C, IRB Functions and Operations, (as amended June 18, 1991 and other applicable regulations), an independent body comprising medical, scientific, and nonscientific members, whose responsibility is to ensure the protection of the rights, safety, and well- being of the subjects involved in a clinical trial. It may also be referred to as an IEC in accordance with ICH E6, Section 1.27. + +1.55 "Jointly Owned IP" has the meaning set forth in Section 15.1(c). + +1.56 "Jointly Owned Patents" has the meaning set forth in Section 15.2(b)(i). + +1.57 "Joint Development Committee" or "JDC" has the meaning set forth in Section 2.2. + +1.58 "Joint Steering Committee" or "JSC" has the meaning set forth in Section 2.1. + +1.59 "KFDA" means Korean Food and Drug Administration, or any successor agency thereto. + +1.60 "Know-how" means (a) any proprietary scientific or technical information, results and data of any type whatsoever, in any tangible or intangible form whatsoever, including databases, practices, methods, techniques, specifications, + +*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment. An unredacted version of this exhibit has been filed separately with the Commission. + +8 + + + + + +formulations, formulae, knowledge, know-how, skill, experience, test data including pharmacological, medicinal chemistry, biological, chemical, biochemical, toxicological and clinical test data, analytical and quality control data, stability data, studies and procedures, and manufacturing process and development information, results and data and (b) any proprietary biological, chemical or physical materials. + +1.61 "Licensing Transaction" has the meaning set forth in Section 12.3(d)(ii)(C). + +1.62 "Losses" has the meaning set forth in Section 14.1. + +1.63 "MacroGenics Indemnitee" has the meaning set forth in Section 14.1. + +1.64 "MacroGenics Licensed Know-how" means the Know-how (excluding any Patents) that is Controlled by MacroGenics as of the Effective Date or at any time during the Term, that is: (a) related to MGAH22 and (b) necessary for Green Cross to exercise the rights licensed to it pursuant to this Agreement or to perform its obligations under this Agreement. + +1.65 "MacroGenics Licensed Patents" means the Patents Controlled by MacroGenics as of the Effective Date or at any time during the Term that: (a) claim the composition of matter of MGAH22 or a Product, (b) would be infringed but for the license granted hereunder by making, having made, selling, using, offering for sale or importing MGAH22 or any Product, or (c) are otherwise necessary for Green Cross to exercise the rights licensed to it under this Agreement, or to perform its obligations under this Agreement, as listed in Exhibit A attached hereto. "MacroGenics Licensed Patents" shall include MacroGenics' interest in any Patents deemed jointly owned pursuant to Section 15.1(c). + +1.66 "MacroGenics Licensed Technology" means the MacroGenics Licensed Patents and the MacroGenics Licensed Know-how. + +1.67 "MacroGenics Licensed Trademarks" means any and all Trademarks Controlled by MacroGenics as of the Effective Date or at any time during the Term, that are registered for or apply to a Product, as listed on Exhibit B. + +1.68 "MGAH22" means the therapeutic Antibody which binds to the HER2/Neu receptor described in IND # 107768. + +1.69 "Net Sales" means the gross amount invoiced for Products (or, as the case may be, a Competing Product) sold by Green Cross or its Related Parties in the Territory initially and directly to Third Parties which are not Related Parties after deducting, if not previously deducted, from the amount invoiced, the following, in each case to the extent included in the gross invoice price: + +(a) reasonable trade, quantity and cash discounts and rebates (including, but not limited to, wholesaler inventory management fees), chargebacks, and retroactive price reductions or allowances actually allowed or granted from the billed amount; + +*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment. An unredacted version of this exhibit has been filed separately with the Commission. + +9 + + + + + +(b) credits or allowances actually granted upon claims, rejections or returns of such sales of Products, including recalls and amounts credited or repaid because of retroactive price reductions specifically identifiable to the Product; + +(c) taxes imposed on the production, sale, import, delivery or use of the Product (including, without limitation, sales, use, excise or value added taxes but excluding income taxes), duties or other governmental charges (including, without limitation, charges for product testing required for importation) levied on or measured by the billing amount when included in billing, as adjusted for rebates and refunds; and + +(d) costs incurred for importing (including, but not limited to, transportation, freight and insurance, and warehousing in the Territory). + +Such amounts shall be determined from the books and records of Green Cross or its Related Party, maintained in accordance with International Financial Reporting Standards (IFRS) or such similar accounting principles, consistently applied. Green Cross further agrees, in determining such amounts, it will use Green Cross' then­current standard procedures and methodology, including Green Cross' then­current standard exchange rate methodology for the translation of foreign currency sales into U.S. Dollars or, in the case of Sublicensees, such similar methodology, consistently applied. + +1.70 "Patent(s)" means (a) all patents and patent applications in any country or supranational jurisdiction and (b) any provisionals, substitutions, divisions, continuations, continuations in part, reissues, renewals, registrations, confirmations, reexaminations, extensions, supplementary protection certificates and the like, of any such patents or patent applications. + +1.71 "Patent Prosecution" means the responsibility for (a) preparing, filing, prosecuting, and pursuing registration of, applications (of all types) for any Patent (b) for maintaining any Patent, and (c) for managing any interference or opposition proceeding relating to the foregoing. + +1.72 "Permitted Subcontractors" has the meaning set forth in Section 3.5. + +1.73 "Person" means an individual, sole proprietorship, partnership, limited partnership, limited liability partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture or other similar entity or organization, including a government or political subdivision, department or agency of a government. + +*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment. An unredacted version of this exhibit has been filed separately with the Commission. + +10 + + + + + +1.74 "Phase I Clinical Development Plan" means the plan set forth on Exhibit C. + +1.75 "Phase I Clinical Trial" means a human clinical trial of a Product in patients in any country that would satisfy the requirements of Applicable Laws and Regulations for such country, such as 21 C.F.R. § 312.21(a), relating to human clinical trials conducted in the United States. + +1.76 "Phase II Clinical Development Plan" means the plan set forth on Exhibit D, as amended pursuant to Section 4. + +1.77 "Phase II Clinical Trial" means a human clinical trial conducted in patients with a Product in accordance with GCP and intended to demonstrate efficacy and a level of safety in the particular Indication tested, as well as to obtain a preliminary Indication of the unit and/or daily dosage regimen required, or that would otherwise satisfy the requirements of Applicable Laws and Regulations of the country in which such human clinical trial is conducted, such as 21 C.F.R. § 312.21(b), relating to human clinical trials conducted in the United States, or any successor regulation thereto or foreign equivalents. + +1.78 "Phase III Clinical Trial" means a human clinical trial in any country that is conducted in accordance with GCPs and the results of which are intended to be used as a pivotal study to establish both safety and efficacy of a Product as a basis for a BLA submitted to the FDA, KFDA or the appropriate Regulatory Authority of such other country, or that would otherwise satisfy the requirements of 21 C.F.R. § 312.21(c), or any successor regulation thereto or foreign equivalents. + +1.79 "Phase IV Clinical Trial" means a human clinical trial conducted after the Regulatory Approval of a Product, which trial is conducted (a) voluntarily to enhance scientific knowledge of such Product (e.g., for expansion of product labeling or dose optimization); or (b) conducted due to a request or requirement of a Regulatory Authority. + +1.80 "Personal Information Protection and Electronic Documents Act" or "PIPEDA" or "PIPED Act" means the Canadian law relating to data privacy. + +1.81 "Product" means a product that incorporates a pharmaceutical form of MGAH22 as an active ingredient. + +1.82 "Product Brand" has the meaning set forth in Section 5.2. + +1.83 "Regulatory Approval" means all approvals from the relevant Regulatory Authority to market and sell a Product in any country (including all applicable pricing and reimbursement approvals), including a BLA. + +*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment. An unredacted version of this exhibit has been filed separately with the Commission. + +11 + + + + + +1.84 "Regulatory Authority" means any applicable government regulatory authority involved in granting approvals for the conduct of clinical trials or the manufacturing, marketing, reimbursement or pricing, as applicable, of a Product, including in the United States the FDA and in South Korea the KFDA, and any successor governmental authority having substantially the same function. + +1.85 "Related Party" means, with respect to a Party, its Affiliates and Sublicensees. + +1.86 "Requesting Party" has the meaning set forth in Section 9.2. + +1.87 "Royalty Term" means, with respect to sales of a Product in the Territory, the time period beginning on the First Commercial Sale of such Product in the Territory and expiring on the latest of the following dates: + +(a) *** + +(b) *** + +(c) *** + +1.88 "Securities Act" has the meaning set forth in Section 8.2(b). + +1.89 "Site Regulatory Package" or "SRP" means a set of investigational site specific regulatory documents requiring review and approval by the JDC. The SRP typically consists of the following documents: Form FDA 1572, principal investigator curriculum vitae, signed protocol signature page, site-specific ICF/IAF (back-translated into English if the local language is other than English), privacy requirements (e.g., HIPAA, PIPEDA), IRB/IEC membership, and country-specific requirements. + +1.90 "Sublicensee" means a Third Party that is granted a sublicense under the licenses granted to a Party under this Agreement, as permitted under this Agreement. + +1.91 "Successor" has the meaning set forth in Section 1.10. + +1.92 "Term" has the meaning set forth in Section 16.1. + +1.93 "Territory" means South Korea. + +1.94 "Third Party" means an entity other than (a) Green Cross and its Affiliates, and (b) MacroGenics and its Affiliates. + +1.95 "Third Party Royalties" means royalties (other than Upstream Royalties) paid by Green Cross to a Third Party to acquire any Third Party rights which would be infringed by the Development, manufacturing, importation, or Commercialization of any Product in the Territory. + +*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment. An unredacted version of this exhibit has been filed separately with the Commission. + +12 + + + + + +1.96 "Total Evaluable Patients" means, on a worldwide basis, those patients who have completed protocol­defined procedures and can be assessed for the primary endpoint of the trial. + +1.97 "Trademark(s)" means all trade names, logos, common law trademarks and service marks, trademark and service mark registrations and applications throughout the world. + +1.98 "Trademark Prosecution" means the responsibility for (a) preparing, filing, and seeking registration of, trademark applications (of all types) for any Trademark, (b) for maintaining any Trademark, and (c) for managing any interference or opposition proceeding relating to the foregoing. + +1.99 "United States" or "US" means the United States of America and its territories and possessions, including without limitation the Commonwealth of Puerto Rico and the U.S. Virgin Islands. + +1.100 "Upstream Agreements" means the license agreements with MacroGenics' Third Party licensors listed in Exhibit E or otherwise identified in writing by MacroGenics to Green Cross as such. + +1.101 "Upstream Licensors" means MacroGenics' Third Party licensors under the Upstream Agreements. + +1.102 "Upstream Royalties" has the meaning set forth in Section 8.6. + +1.103 "Valid Claim" means a claim of: (a) an issued and unexpired Patent included within the MacroGenics Licensed Patents in a country which has not been revoked or held unenforceable or invalid by a decision of a court or other governmental agency of competent jurisdiction, unappealable or unappealed within the time allowed for appeal, and has not been abandoned, disclaimed or admitted to be invalid or unenforceable through reissue, disclaimer or otherwise; or (b) *** + +2. GOVERNANCE + +2.1 Joint Steering Committee + +(a) Membership. The Parties hereby establish a Joint Steering Committee, or JSC, to coordinate and oversee activities on which the Parties collaborate under this Agreement. The Parties agree that participation in the JSC and any subcommittee of the JSC is a right, rather than an obligation of each Party under this Agreement. The JSC shall consist of three (3) representatives from each Party. MacroGenics shall designate one (1) of its representatives as the initial chairperson of the JSC. Thereafter, the role of chairperson will alternate between MacroGenics and Green Cross representatives on a yearly basis. Each Party may replace its appointed JSC representatives at any time upon reasonable written notice to the other Party. The initial + +*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment. An unredacted version of this exhibit has been filed separately with the Commission. + +13 + + + + + +representatives and chair of the JSC are set forth in Exhibit F attached hereto. The chair shall have the responsibility to call meetings, circulate meeting agendas at least ten (10) days prior to each regular JSC meeting, draft minutes for each JSC meeting and circulate such minutes for both Parties' written approval. The chair shall have no other authority or special voting power. + +(b) Responsibilities. The responsibilities of the JSC shall be: + +(i) to provide a vehicle by which the Parties may share information regarding the overall strategy for the Collaboration; + +(ii) to approve changes to the Phase I Clinical Development Plan and Phase II Clinical Development Plan; + +(iii) to facilitate the exchange of information between the Parties with respect to the activities hereunder and to establish procedures for the efficient sharing of information necessary for the Parties to fulfill their respective responsibilities with respect the Collaboration; + +(iv) to establish an overall regulatory strategy for Products in the Territory that is compatible with and complements the worldwide regulatory strategy being implemented by MacroGenics for the Products and to allocate the responsibility for regulatory activities between the Parties; + +(v) to oversee the activities of subcommittees created under this Agreement, and to seek to resolve any issues that such subcommittees cannot resolve; + +(vi) to perform such other functions as appropriate to further the purposes of this Agreement, as determined by the Parties; and + +(vii) to establish such subcommittees in addition to the JDC, as are agreed upon in writing by the Parties. + +(viii) to discuss any additional studies, including a Phase III Clinical Trial, in which Green Cross may desire to participate; + +(c) Decision-Making. The JSC shall make decisions unanimously, with each Party's representatives collectively having one (1) vote and at least one (1) representative from each Party present. + +(d) Disputes. In the event the JSC cannot reach an agreement regarding any matter within the JSC's authority for a period of ***, then the dispute shall be promptly submitted to the ***. If the dispute remains unresolved for *** after submission to such persons, then the ***; provided, however, that the *** shall have the ***; and provided further that the foregoing shall not be deemed to limit or otherwise alter any obligation of Green Cross or MacroGenics under this Agreement. + +*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment. An unredacted version of this exhibit has been filed separately with the Commission. + +14 + + + + + +(e) JSC Meetings. JSC meetings shall be held semi-annually, or on any other schedule agreed by the Parties. With the consent of the representatives of each Party serving on the JSC, other representatives of each Party may attend meetings as nonvoting observers (provided such non-voting observers have confidentiality obligations to such Party that are at least as stringent as those set forth in this Agreement). A JSC meeting may be held by audio, video or internet teleconference with the consent of each Party, but at least half (1/2) of the minimum number of meetings shall be held in person. Meetings of the JSC shall be effective only if at least one (1) representative of each Party is present or participating. Each Party shall be responsible for all of its own expenses of participating in the JSC meetings. The Parties will alternate hosting the in-person meeting, and the Party hosting is responsible for preparing and circulating the minutes of the JSC meetings. + +(f) Duration of JSC. The JSC shall continue to exist until the first to occur of (a) the Parties mutually agreeing to disband the JSC or (b) termination of this Agreement. + +(g) Limitations. The JSC shall have no authority other than that expressly set forth in this Section 2.1 and, specifically, shall have no authority (a) to amend or interpret this Agreement, or (b) to determine whether or not a breach of this Agreement has occurred. + +2.2 Joint Development Committee + +(a) Membership. Within thirty (30) days after the Effective Date, the Parties shall establish a Joint Development Committee, or JDC, as a subcommittee of the JSC, to coordinate the Development of Products as set forth in Section 2.2(b). The JDC shall consist of three (3) representatives from each Party. Each Party may replace its appointed JDC representatives at any time upon reasonable written notice to the other Party. The Parties shall alternate in designating a representative on the JDC as the chair of the JDC on an annual basis, with MacroGenics designating the first chair. The chair shall have the responsibility to call meetings, circulate meeting agendas at least ten (10) days prior to each regular JDC meeting, draft minutes for each JDC meeting and circulate such minutes for both Parties' written approval. The chair shall have no other special authority or voting power. + +(b) Responsibilities. The responsibilities of the JDC shall be: + +(i) to share and discuss the Parties' performance under the Phase I Clinical Development Plan and Phase II Clinical Development Plan, on a quarterly basis; + +(ii) to share and discuss the data generated by or on behalf of the Parties in the course of performance towards the goals set forth in the Phase I Clinical Development Plan and Phase II Clinical Development Plan; + +*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment. An unredacted version of this exhibit has been filed separately with the Commission. + +15 + + + + + +(iii) to coordinate Development strategies, allocate resources and set timelines, in each case to facilitate the activities under the Phase I Clinical Development Plan and Phase II Clinical Development Plan; + +(iv) to review and approve proposed clinical trial sites; + +(v) to facilitate the exchange of information between the Parties with respect to the activities under the Phase I Clinical Development Plan and Phase II Clinical Development Plan; and + +(vi) to perform such other functions as appropriate to further the purposes of this Agreement, as determined by the Parties. + +(c) Decision Making. The JDC shall make decisions unanimously, with each Party's representatives collectively having one (1) vote and at least one (1) representative from each Party present. + +(d) Disputes. In the event the JDC cannot reach an agreement regarding any matter within the JDC's authority for a period of ***, then at the option of either Party the matter shall be referred to the JSC for resolution pursuant to Section 2.1(c) and 2.1(d) above. + +(e) JDC Meetings. JDC meetings shall be held quarterly, or on any other schedule agreed by the Parties. With the consent of the representatives of each Party serving on the JDC, other representatives of each Party may attend meetings as nonvoting observers (provided such non-voting observers have confidentiality obligations to such Party that are at least as stringent as those set forth in this Agreement). A JDC meeting may be held by audio, video or internet teleconference with the consent of each Party, but at least half (1/2) of the minimum number of meetings shall be held in person. Meetings of the JDC shall be effective only if at least one (1) representative of each Party is present or participating. Each Party shall be responsible for all of its own expenses for participating in the JDC meetings. The Parties will alternate hosting the in-person meeting, and the Party hosting is responsible for preparing and circulating the minutes of the JDC meetings. + +(f) Duration of JDC. The JDC shall continue to exist until the first to occur of (a) the Parties mutually agreeing to disband the JDC or (b) termination of this Agreement. + +(g) Limitations. The JDC shall have no authority other than that expressly set forth in this Section 2.2 and, specifically, shall have no authority (a) to amend or interpret this Agreement, or (b) to determine whether or not a breach of this Agreement has occurred. + +*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment. An unredacted version of this exhibit has been filed separately with the Commission. + +16 + + + + + +3. DEVELOPMENT + +3.1 Overview. The Parties shall use Commercially Reasonable Efforts to Develop Products in the Territory in accordance with the Phase I Clinical Development Plan and Phase II Clinical Development Plan, as set forth below, with the goal of achieving regulatory approval for the marketing of Products. + +(a) MacroGenics Responsibilities. MacroGenics shall perform those activities for which it is identified as the responsible party in the Phase I Clinical Development Plan (unless such responsibility is transferred to Green Cross or a Third Party by MacroGenics), including, without limitation, ***, as appropriate, ***. + +(b) Green Cross Responsibilities + +(i) Green Cross shall perform those activities for which it is identified as the responsible party in the Phase I Clinical Development Plan (and such other activities for which responsibility is transferred to Green Cross), and shall conduct all activities described in the Phase II Clinical Development Plan. Without limiting the foregoing, in the Territory: + +(ii) Green Cross shall (A) support clinical trial site and CRO-related activities ***, (B) ***; (C) support clinical trial site and CRO- related activities for the ***, under a CTA filed by Green Cross in the Territory, and (D) support other additional Development activities responsive to unique regulatory or commercial requirements in Territory; and + +(iii) Green Cross' responsibilities shall include the submission of all CTAs; interaction with the KFDA; ***; provided, however, that with respect to the provision of data, information and materials, such obligation to assist shall require Green Cross to use Commercially Reasonable Efforts, and shall not require Green Cross to generate any data not within its possession. + +(c) Joint and Additional Responsibilities. For activities specified in the Phase I Clinical Development Plan for which both Parties are identified as the responsible Party, the Parties' respective obligations shall be as determined by the JSC. If it is determined that the performance of activities not identified in the Phase I Development Plan are required for Completion of the Phase I Clinical Trial, then the responsibility for such activities shall be determined by the JSC. + +3.2 Development Plans + +(a) Clinical Development Plans. The JDC shall review the progress of the conduct of the Phase I Clinical Development Plan and Phase II Clinical Development Plan at each meeting of the JDC. + +*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment. An unredacted version of this exhibit has been filed separately with the Commission. + +17 + + + + + +(b) Review of the Clinical Development Plans. On no less than an annual basis, the JDC shall review the Phase I Clinical Development Plan and Phase II Clinical Development Plan, as appropriate, and recommend any amendment, and any changes to such plans shall be subject to the approval by the JDC and, subsequently, by the JSC. + +3.3 Conduct of Development + +(a) General Obligation. Each Party shall use Commercially Reasonable Efforts to conduct the Development activities for which it is responsible, as described in the Phase I Clinical Development Plan and Phase II Clinical Development Plan, in compliance with: (a) the terms and conditions of this Agreement; (b) the Phase I Clinical Development Plan and Phase II Clinical Development Plan, as updated from time to time; (c) all applicable GLP, GCP and applicable cGMP requirements, including, without limitation those specified by the ICH; and (d) all Applicable Laws and Regulations. + +(b) Green Cross Diligence. Without limiting Section 3.3(a): + +(i) Green Cross shall ***; provided, however, that if all necessary documents required for Regulatory Approval of such Commencement in the Territory, if any, are not received within a reasonable period prior to such date, other than as a result of Green Cross' acts or omissions, then such period shall be equitably extended to account for such delay for a period mutually agreed upon in writing by the Parties; + +(ii) Green Cross shall ***; and + +(iii) Green Cross shall use ***; provided, however, that if all necessary documents required for Regulatory Approval of such Completion or filing in the Territory, if any, are not received within a reasonable period prior to such date, other than as a result of Green Cross' acts or omissions, then such period shall be equitably extended to account for such delay for a period mutually agreed upon in writing by the Parties. + +(c) Green Cross Rights. Green Cross shall have the option to participate in any additional studies, including a Phase III Clinical Trial, with respect MGAH22 to the extent that such studies are required by a Regulatory Authority in the Territory. + +3.4 Development Costs + +(a) Phase I Clinical Development Plan. Green Cross shall be responsible for all Development Costs incurred by Green Cross in connection with the conduct of the Phase I Clinical Development Plan, including, without limitation, Third Party costs for CRO-related activities for the Phase I Clinical Trial in the Territory. + +*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment. An unredacted version of this exhibit has been filed separately with the Commission. + +18 + + + + + +MacroGenics shall be responsible for all Development Costs incurred by MacroGenics in connection with the conduct of the Phase I Clinical Development Plan, including without limitation, Third Party costs for CRO-related activities for the Phase I Clinical Trial outside of the Territory, except as follows: + +(i) Clinical Materials. MacroGenics shall be responsible for the cost of the supply of all Clinical Materials for the initial Phase I Clinical Trial; + +(ii) Labor Costs. Each Party shall be responsible for its direct labor costs (e.g., salaries, wages, employee benefits, overtime costs, and shirt premiums) for the conduct of its obligations under the Phase I Clinical Development Plan; + +(iii) *** MacroGenics will invoice Green Cross at the end of the applicable Calendar Quarter for the amounts due hereunder, and all such amounts shall be paid to MacroGenics by Green Cross in US Dollars not later than sixty (60) days following the receipt of the applicable invoice. + +(iv) Data Management Costs. Each Calendar Quarter, Green Cross shall reimburse MacroGenics for *** of the costs incurred by MacroGenics in connection with the management of Clinical Data from the Phase I Clinical Trials during such Calendar Quarter. MacroGenics will invoice Green Cross at the end of the applicable Calendar Quarter for the amounts due hereunder, and all such amounts shall be paid to MacroGenics by Green Cross in US Dollars not later than *** following the receipt of the applicable invoice. + +(v) Insurance Costs. Each Calendar Quarter, Green Cross shall reimburse MacroGenics for all costs incurred by MacroGenics in connection with all insurance policies required for the conduct of the Phase I Clinical Trials in the Territory during such Calendar Quarter. MacroGenics will invoice Green Cross at the end of the applicable Calendar Quarter for the amounts due hereunder, and all such amounts shall be paid to MacroGenics by Green Cross in US Dollars not later than *** following the receipt of the applicable invoice. MacroGenics shall include Green Cross as a named insured on each such policy acquired by MacroGenics. + +(vi) Limitation on Reimbursement of ***. Notwithstanding anything to contrary set forth in Section 3.4(a)(iv) or 3.4(a)(v), in no event shall Green Cross be obligated to reimburse MacroGenics for any costs in connection with the *** + +(b) Phase II Clinical Development Plan. Green Cross shall be responsible for all Development Costs incurred in the Territory by either Party under the Phase II Clinical Development Plan, except for the cost of the supply of Clinical Materials, which shall be the responsibility of MacroGenics. + +3.5 Subcontractors. MacroGenics shall have the right to engage Third Party contractors to perform any portion of its obligations under this Agreement (provided that + +*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment. An unredacted version of this exhibit has been filed separately with the Commission. + +19 + + + + + +MacroGenics shall use Commercially Reasonable Efforts to require such Third Party contractors to cooperate with Green Cross, so as to permit Green Cross to comply with any of its development or commercial diligence obligations, and its reporting and payment obligations under any of the Upstream Agreements insofar as they relate to MGAH22 or any Product), and Green Cross shall have the right to engage a CRO in the Territory to support the conduct of the Phase I Clinical Trial *** (each such subcontractor, a "Permitted Subcontractor"). Any such Permitted Subcontractor used in the provision of services shall be required to agree in writing to be bound by terms regarding maintaining the confidentiality of proprietary information that are no less stringent than those contained in this Agreement and regarding ownership of intellectual property that are consistent with those contained in this Agreement. Either Party's use of Permitted Subcontractors shall not relieve such Party of any of its obligations pursuant to this Agreement. + +3.6 Clinical Trial Data. Except to the extent prohibited by any Applicable Law or Regulation, each Party shall provide all Clinical Data to the other on a schedule reasonably requested by the other. + +3.7 Information and Cooperation. In addition to the obligations under Section 3.6, each Party shall use Commercially Reasonable Efforts to keep the other Party informed of its research, Development and Commercialization (including promotional) activities hereunder, and shall provide to the other Party, as appropriate, regular summary updates. If reasonably necessary for a Party to perform its work under this Agreement or to exercise its rights under this Agreement, that Party may request that the other Party provide more detailed information and data regarding the updates it earlier provided, and the other Party shall promptly provide the requesting Party with information and data as is reasonably available and reasonably related to the work under this Agreement. Neither Party is required to generate additional data or prepare additional reports to comply with the foregoing obligation. All such reports, information and data provided shall be subject to Section 12.1. Prior to commencing the manufacture of Products or conduct of studies for the Product outside of the scope of this Agreement in the Territory, MacroGenics shall notify Green Cross of any such activity and consult with Green Cross with respect thereto; provided, however, that MacroGenics shall not undertake any such activity if and to the extent such activity would have a material adverse affect on Green Cross. + +4. ADJUSTMENT OF PHASE II CLINICAL DEVELOPMENT PLAN. If the Parties agree to add additional patients or Indications to the Phase II Clinical Development Plan, or replace the Indication specified therein as of the Effective Date with a new Indication, then the Parties shall negotiate in good faith to agree upon the terms applicable to such expansion or change. + +*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment. An unredacted version of this exhibit has been filed separately with the Commission. + +20 + + + + + +5. COMMERCIALIZATION + +5.1 Overview. Green Cross shall have full responsibility and authority for all aspects of the Commercialization of Products in the Territory at its sole expense, including, without limitation, developing and executing a plan for commercial launch, obtaining all required approvals from Regulatory Authorities for Commercialization (including, without limitation, reimbursement activities), marketing and promotion, booking sales and distribution and performance of related services, providing customer support, including handling medical queries, and performing other related functions. Green Cross shall use Commercially Reasonable Efforts to Commercialize the Products. Green Cross shall update MacroGenics regarding its Commercialization activities at regular meetings of the JSC as contemplated by Section 2.1.(e). As between Green Cross and MacroGenics, ***. Green Cross shall bear all of the costs and expenses incurred in connection with all such Commercialization activities in the Territory. Green Cross shall timely notify MacroGenics as to the occurrence of the First Commercial Sale in the Territory. + +5.2 Product Labeling; Promotional Materials. Green Cross shall Commercialize the Products in the Territory under the worldwide brand specified by MacroGenics ("Product Brand"), except to the extent such branding is not permitted by any applicable Regulatory Authority, or deemed culturally inappropriate, in the Territory, in which case MacroGenics shall specify an alternate Product Brand. Except for the depiction of trademarks, logos and other symbols that are intended to identify MacroGenics' as a company or the manufacturer or owner of a Product, Green Cross shall be responsible for designing and supplying the printable artworks of product labeling in electronic version and promotional materials for the Products for the Territory. Green Cross shall be responsible for how and the manner in which Products shall be presented and described in the Territory to the medical community in any promotional materials for a Product intended to be disseminated in the Territory, and the placement of the name and logos of Green Cross therein, in each case as permitted by applicable law and consistent with the Product Brand and labeling for the Products approved by the applicable Regulatory Authority. + +5.3 Sales and Distribution + +(a) Orders and Sales. Green Cross shall be solely responsible for handling all returns, order processing, invoicing and collection, distribution, and inventory and receivables for the Products throughout the Territory. Green Cross shall have the right and sole responsibility for establishing and modifying the terms and conditions with respect to the sale of the Products in the Territory, including any terms and conditions relating to or affecting the price at which the Products shall be sold, discounts available to any Third Party payers (including, without limitation, managed care providers, indemnity plans, unions, self insured entities, and government payer, insurance or contracting programs), any discount attributable to payments on receivables, distribution of the Products, and credits, price adjustments, or other discounts and allowances to be granted or refused; provided, however, that Green Cross shall act in good faith when doing the foregoing. + +*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment. An unredacted version of this exhibit has been filed separately with the Commission. + +21 + + + + + +(b) Pricing. Green Cross shall have the sole right to determine all pricing of the Products in the Territory. Notwithstanding anything in this Agreement express or implied to the contrary, MacroGenics shall not have any right to direct, control, or approve Green Cross' pricing of Products for the Territory. The provision to MacroGenics of any pricing data is for informational purposes only. Green Cross shall be responsible for preparing and implementing the reimbursement strategy for the Products in the Territory. However, except to the extent prohibited by Applicable Laws and Regulations, MacroGenics shall use Commercially Reasonable Efforts to provide all the necessary data so that Green Cross can file for the medical reimbursement price in the Territory; provided, however, that MacroGenics shall not be obligated to generate any data not within its possession. + +5.4 Compliance. Each Party shall comply with the terms of this Agreement and all Applicable Laws and Regulations relating to activities performed or to be performed by such Party (or its Affiliates, contractor(s) or Sublicensee(s)) under or in relation to the Commercialization of the Products pursuant to this Agreement. + +5.5 Commercialization Diligence + +(a) Prior to Submission of First BLA. For each Product under Development, prior to the submission of the first BLA to the first Regulatory Authority in the Territory, Green Cross shall submit to the JSC a written summary plan for the Commercialization for each such Product under Development. Thereafter, Green Cross shall regularly report on its Commercialization activities at meetings of the JSC or, if formed, the Joint Commercialization Committee. Such reports shall cover subject matter at a level of detail similar to that which Green Cross affords to its senior executives with respect to similar Green Cross products. All such plans and information shall be presented for discussion purposes, and Green Cross agrees to consider in good faith any comments or suggestions MacroGenics may make with respect to Commercialization of Products. + +(b) Launch. Green Cross shall launch each Product in the Territory ***, provided that MacroGenics has supplied Product ordered by Green Cross in accordance with Section 6.2(c) for such launch within a reasonable period prior to the planned launch date. + +(c) Following Regulatory Approval. Green Cross shall use Commercially Reasonable Efforts to Commercialize each Product in the Territory after obtaining Regulatory Approval for such Product. + +5.6 Upstream Agreements. Green Cross agrees to provide to MacroGenics such information as it reasonably requires, or otherwise cooperate with MacroGenics, so as to permit MacroGenics to comply with any of its development or commercial diligence obligations, and reporting and payment obligations under any of the Upstream Agreements insofar as they relate to MGAH22 or any Product. + +*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment. An unredacted version of this exhibit has been filed separately with the Commission. + +22 + + + + + +6. MANUFACTURE AND SUPPLY + +6.1 Clinical Supply of Products. MacroGenics shall be responsible for the manufacture of all Product required for the clinical trials described in the Phase I Clinical Development Plan, Phase II Clinical Development Plan and, if any, additional development plans, including any plan for a Phase III Clinical Trial, agreed upon in writing by the Parties for additional studies under this Agreement, either by itself or through one or more Third Parties, including all costs of such manufacture, as set forth in Section 3.4. + +6.2 Commercial Supply of Products + +(a) Responsibility. MacroGenics shall be responsible for the manufacture of all commercial supplies of Product required by Green Cross for the Commercialization of Products in the Territory, in accordance with this Section 6.2, except as the Parties may otherwise agree pursuant to Section 6.4. + +(b) Forecasts. For so long as MacroGenics is providing Product, Green Cross, through the JDC, shall furnish to MacroGenics *** forecast of probable quarterly orders for supplies of Product, to be updated quarterly based on Green Cross' good faith estimate of its need for Product. + +(c) Orders. Green Cross agrees to buy, and MacroGenics agrees to sell, such quantities of Product as may be set forth on purchase orders placed by Green Cross in accordance with the provisions of this Section 6.2. The Parties shall mutually agree upon an appropriate purchase agreement. Any purchase orders for Product will reference this Agreement and will be consistent with the terms contained herein. Each purchase order shall set forth a delivery date for the quantities of Product ordered, which date will in no event be less than *** from the date of the purchase order. MacroGenics will use Commercially Reasonable Efforts to deliver each order on or before the applicable deliver date. If a purchase order cannot be fulfilled or delivered as requested by Green Cross, then MacroGenics shall immediately inform Green Cross of such fact. If MacroGenics is unable to manufacture sufficient quantities of Products to deliver to Green Cross hereunder, then MacroGenics shall allocate any shortages among its customers, including, without limitation, Green Cross, on a pro-rata basis based on the comparative order volumes of all customers at the time of such shortage. MacroGenics shall use Commercially Reasonable Efforts to promptly resume production of Commercial Supply. + +(d) Price; Payment. The price of Product ordered by Green Cross under this Section 6.2 will be equal to *** of MacroGenics' Fully Burdened Manufacturing Costs for such material. All payments due hereunder to MacroGenics shall be paid to MacroGenics in US Dollars not later than *** following the receipt of the applicable invoice. + +*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment. An unredacted version of this exhibit has been filed separately with the Commission. + +23 + + + + + +6.3 Delivery. Unless otherwise agreed by the parties in writing, all shipments will be shipped F.O.B. MacroGenics' or its contract manufacturer's facility. + +6.4 Technology Transfer. If Green Cross requests, the Parties shall enter into good faith discussions regarding the possibility of a transfer to Green Cross of technology that is sufficient to enable Green Cross to manufacture commercial supplies of Product in accordance with the Applicable Laws and Regulations of the Territory, provided that nothing herein shall be deemed to obligate MacroGenics to enter into any agreement to transfer to Green Cross any such technology. + +6.5 Manufacturing Specifications. All Clinical Materials and commercial supplies of Product shall be manufactured in accordance with the specifications determined by MacroGenics and all Applicable Laws and Regulations. + +6.6 Change of Manufacturing Process. MacroGenics shall reasonably inform Green Cross of developments in matters of process development and manufacturing of Products, and shall consult with Green Cross with respect to the development and manufacturing processes of Products adopted by MacroGenics to the extent necessary to obtain Regulatory Approval(s) of the same in the Territory. Green Cross shall promptly notify MacroGenics of any information that will impact approvability of Products in the Territory. + +7. REGULATORY + +7.1 Overview. The JSC shall establish an overall regulatory strategy for obtaining Regulatory Approval of the Product in the Territory, and shall allocate regulatory responsibilities between the Parties in a manner consistent with the provisions contained herein. Green Cross shall participate in regulatory matters as determined by the JSC, including CMC and other manufacturing-related matters, nonclinical matters, and clinical matters. In addition, Green Cross will have access to adverse event and other safety related data. + +7.2 Regulatory Filings for Phase I Clinical Trial. MacroGenics shall hold the INDs in the Territory and be responsible for the filing of the INDs and all additional regulatory documents for the initial Phase I Clinical Trial with Regulatory Authorities in the Territory (such as INDs, and IND amendments), including, without limitation, all associated submissions (e.g., safety reports, protocol submissions, CMC updates), for responding to inquiries and correspondences from the Regulatory Authorities, and the submission of all required reports for the Phase I Clinical Trial until the Completion of the Phase I Clinical Trial. MacroGenics shall continue to hold INDs filed as of the Effective Date. MacroGenics will transfer its responsibilities for preparing the Korean IND and IND amendments to Green Cross, but Green Cross shall provide ***, Green + +*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment. An unredacted version of this exhibit has been filed separately with the Commission. + +24 + + + + + +Cross may submit such filing, submission or response to the KFDA at the same time as Green Cross submits the same to MacroGenics; provided that Green Cross uses Commercially Reasonable Efforts to obtain additional time. MacroGenics will transfer its responsibilities for interacting with the KFDA to Green Cross, but Green Cross shall attempt to include MacroGenics on any face-to-face meetings or teleconferences, if deemed necessary by Green Cross, and shall not commit to making any revisions to the Phase I Clinical Trial unless for an immediate safety issues, without prior agreement with MacroGenics. Green Cross shall allow MacroGenics to review any written correspondence to the KFDA before it is sent to the KFDA. + +7.3 Regulatory Filings Following Phase I Clinical Trial. Except as set forth in Section 7.2, Green Cross shall be responsible for the filing of all regulatory documents for MGAH22 and all Products with Regulatory Authorities in the Territory (such as INDs, NDAs and amended INDs and NDAs), including without limitation all associated submissions (e.g., safety alerts, protocol submissions), for responding to inquiries and correspondence from the Regulatory Authorities responsible for regulatory matters in the Territory, and the monitoring of all clinical experiences and submission of all required reports throughout clinical Development and Commercialization, in each case in compliance with all laws and regulations. MacroGenics shall be responsible for providing to Green Cross any revisions to the investigator's brochure and CMC information required for KFDA submissions. Green Cross may request MacroGenics to participate in meetings with the KFDA if it is foreseeable that there may be discussions about the Product beyond the scope of Green Cross' development of the Product in the Territory (e.g., CMC matters, data from clinical trials MacroGenics conducted). Each Party shall provide information to the other Party as necessary and reasonably consult with the other Party regarding any filings, and regarding significant or material notices, actions or requests from or by Regulatory Authorities. Each Party shall, at the other Party's request, review and comment on filings, submissions, and responses to Regulatory Authorities related to any Product. Green Cross shall hold and maintain all Regulatory Approvals for the Commercialization of the Product in the Territory, as set forth in Section 10.1(c). + +7.4 Records of Correspondence with KFDA. Following each communication (whether by phone or in person) with the KFDA regarding matters arising under this Agreement, Green Cross shall prepare a record of such meeting in accordance with its standard business practices (e.g., written minutes) and provide to MacroGenics a copy of such record. + +7.5 Safety Data Exchange Agreement. The Parties shall conduct in good faith and agree upon a safety data exchange agreement, the agreement setting forth the safety information required to be shared by each Party and the schedule for the sharing of such safety information and other appropriate procedures and matters, as detailed in Exhibit G. + +*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment. An unredacted version of this exhibit has been filed separately with the Commission. + +25 + + + + + +8. PAYMENTS + +8.1 Upfront Payment. Within thirty (30) days after the Effective Date, Green Cross shall pay to MacroGenics One Million Dollars ($1,000,000), which shall be non-refundable and non-creditable against any other payments due under this Agreement. + +8.2 Purchase of MacroGenics Stock Upon Initial Public Offering + +(a) If during the first three (3) years of the Term there is an Initial Public Offering which raises a ***, and if the underwriter(s) in such Initial Public Offering permit it, Green Cross is obligated to purchase a number of shares of the same class of capital stock, simultaneously with the closing(s) of, and at the same purchase price as the shares sold in, the Initial Public Offering that is equal to the number of shares that could be purchased for ***. + +(b) Green Cross acknowledges that any securities purchased in accordance with Section 8.2(a) shall not be registered under the Securities Act of 1933, as amended ("Securities Act"), and may not be sold, assigned, pledged, hypothecated, encumbered or an any other manner transferred or disposed of in the absence of an effective registration statement or an exemption from registration under the Securities Act. In connection with any Initial Public Offering, Green Cross agrees to enter into a lock-up agreement with the underwriter(s) if the managing underwriter(s) demands or requests such an agreement; provided, however, that such provisions will not be less favorable to Green Cross than the provisions of any lock-up agreements entered into by the managing underwriter(s) with other holders of securities issued by MacroGenics. + +8.3 Clinical Development Milestone Payments. Green Cross shall pay to MacroGenics the milestone payments listed below, which shall be non-refundable, and non-creditable (unless otherwise stipulated under this Agreement). Any such milestone payments are subject to any credits, offsets and waivers specified by this Agreement. + +(a) For the Commencement of the first Phase II Clinical Trial: ***; provided, however, that this milestone payment shall not be payable to MacroGenics if *** + +(b) For the Commencement of the first Phase III Clinical Trial: ***; provided, however, that this milestone payment shall not be payable to MacroGenics *** If all necessary documents required for Regulatory Approval of Completion of the Phase II Clinical Trial by Green Cross, if any, are not received within a reasonable period prior to the agreed upon projected Completion date, other than as a result of Green Cross' acts or omissions, then such *** period shall be equitably extended to account for such delay for a period mutually agreed upon in writing by the Parties. + +(c) Approval of BLA for first Indication for a Product by KFDA in the Territory: *** + +*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment. An unredacted version of this exhibit has been filed separately with the Commission. + +26 + + + + + +8.4 Commercial Milestone Payments. Green Cross shall pay to MacroGenics the Net Sales milestone payments set forth below, which shall be due and payable within *** after the end of the first Calendar Year during which such milestone is triggered. + +(a) First occurrence of aggregate Net Sales for a period of *** of all Products in the Territory *** ***. + +(b) First occurrence of aggregate Net Sales for a period of *** of all Products in the Territory exceeding *** + +8.5 Product Royalties. + +(a) Green Cross shall pay to MacroGenics a royalty at the rate determined in accordance with the royalty chart included in Exhibit H attached hereto on Net Sales of Products for the Royalty Term. + +(b) Green Cross shall pay to MacroGenics a royalty of *** on Net Sales of Competing Products for the Royalty Term. + +8.6 Upstream License Royalties. In addition to the other royalty payments set forth in this Section 8, Green Cross shall reimburse MacroGenics for royalty payments payable by MacroGenics as a result of the Collaboration pursuant to: (a) the Upstream Agreements identified on Exhibit E as of the Effective Date and (b) any additional Upstream Agreements identified by MacroGenics after the Effective Date that include a license to any patent(s) that has any claim(s) that would otherwise prevent MacroGenics from fulfilling its obligations under this Agreement or from supplying MGAH22 or any Product in the Territory (the "Upstream Royalties"). Green Cross' obligation under this Section 8.6 with respect to the payment of Upstream Royalties under an Upstream Agreement shall terminate upon termination of MacroGenics' obligation to pay royalties under the terms of such Upstream Agreement. + +8.7 Third Party Agreements. Green Cross (or its Affiliate or Sublicensee) shall be responsible, at its sole expense and discretion, for obtaining any agreements with Third Parties (other than the Upstream Agreements) for any Third Party rights which would be infringed by the Development, manufacturing, importation, or Commercialization of any Product in the Territory. + +8.8 Payment of Milestones. All milestone payments shall be due and payable within *** after the event for which the payment is due. + +8.9 Reports; Payments + +(a) Net Sales Quarterly Reports. During the Term, following the First Commercial Sale of a Product in the Territory, Green Cross shall furnish to MacroGenics: + +(i) a quarterly written report for the Calendar Quarter showing the Net Sales of all Products (and Competing Products) subject to royalty payments sold by Green Cross and its Related Parties in the Territory during the reporting period and the royalties payable under this Agreement; and + +*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment. An unredacted version of this exhibit has been filed separately with the Commission. + +27 + + + + + +(ii) a quarterly report for the Calendar Quarter showing Green Cross' Commercial Supply Costs, Third Party Royalties and Upstream Royalties for such Calendar Quarter, with such detail as shall reasonably allow MacroGenics to determine the basis for such quarterly costs. + +(b) Submission and Payment Schedule + +(i) Reports. Reports under this Section 8.9 shall be due on the ninetieth (90 ) day following the close of each Calendar Quarter. + +(ii) Royalties. Royalties shown to have accrued by each report shall, unless otherwise specified under this Agreement, be due and payable on the date such report is due. + +8.10 Payment Exchange Rate. All payments to be made by Green Cross to MacroGenics under this Agreement shall be made in United States dollars by bank wire transfer in immediately available funds to a bank account in the United States designated in writing by MacroGenics. For invoices that Green Cross shall forward to MacroGenics, Green Cross shall use an exchange rate equal to the Telegraphic Transfer (T/T) selling rate as published by Korean Exchange Bank as of the close of business on the last business day of the preceding month. + +8.11 Tax Withholding. If laws, rules or regulations require Green Cross to withhold income taxes or other taxes imposed upon payments set forth in this Section 8, Green Cross shall make such withholding payments as required and subtract such withholding payments from the payments set forth in this Section 8. Green Cross shall submit original receipts or other appropriate proof of payment of the withholding taxes to MacroGenics within a reasonable period of time to allow MacroGenics to document such tax withholdings for purposes of claiming foreign tax credits and similar benefits, and shall cooperate with reasonable requests of MacroGenics (without acting to the detriment of Green Cross) related to MacroGenics obtaining such credits and benefits. + +9. Record Keeping and Inspections and Audits + +9.1 Records + +(a) Collaboration Activities. Each Party shall maintain appropriate records of: (i) all significant research, Development, manufacturing and Commercialization events and activities conducted by it or on its behalf related to a Product, and all costs in connection therewith, as applicable; and (ii) all significant information generated by it or on its behalf in connection with research and development + +*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment. An unredacted version of this exhibit has been filed separately with the Commission. + +28 + +th + + + + + +of MGAH22 and Products under this Agreement, in each case in accordance with such Party's usual documentation and record retention practices. Such records shall be in sufficient detail to properly reflect, in good scientific manner, all significant work done and results of studies and trials undertaken, and further shall be at a level of detail appropriate for patent and regulatory purposes. + +(b) Green Cross Royalties. Green Cross shall keep complete and accurate records in sufficient detail to enable the royalties payable under Section 8 and its Commercial Supply Costs, Third Party Royalties and Upstream Royalties to be determined. + +(c) MacroGenics' Royalties. MacroGenics shall keep complete and accurate records of royalty payments due under the Upstream Agreements in sufficient detail to enable the Upstream Royalties payable by Green Cross under Section 8.6 to be determined. At the request of Green Cross, MacroGenics shall make such records available to Green Cross. + +(d) MacroGenics' FBMC. MacroGenics shall keep complete and accurate records with such detail as shall reasonably allow Green Cross to determine the basis for such FBMC. At the request of Green Cross, MacroGenics shall make such records available to Green Cross. + +9.2 Audit Rights. Upon the written request of a Party ("Requesting Party") with reasonable advance notice and not more than once in each Calendar Year, the other Party shall permit an independent certified public accounting firm of nationally recognized standing selected by Requesting Party and reasonably acceptable to the other Party, at its own expense, to have access during normal business hours to such of the records as may be reasonably necessary to verify the accuracy of the reports under Section 8 for any Calendar Year ending not more than thirty-six (36) months prior to the date of such request. The accounting firm shall disclose to the Requesting Party only whether the reports are correct or incorrect and the specific details concerning any discrepancies. No other information shall be provided to Requesting Party in connection with this audit right. This right to audit shall remain in effect throughout the life of this Agreement and for a period of three (3) years after the termination of this Agreement. + +9.3 Discrepancies. If such accounting firm identifies a discrepancy, the other Party shall pay Requesting Party the amount of the discrepancy within thirty (30) days of the date Requesting Party delivers to the other Party such accounting firm's written report so concluding, or as otherwise agreed upon by the Parties. The fees charged by such accounting firm shall be paid by Requesting Party unless the underpayment by the other Party exceeded five percent (5%) of the amount owed for such Calendar Year, in which case the other Party shall pay to Requesting Party the reasonable fees charged by such accounting firm. + +9.4 Confidentiality. Each Party shall treat all information of the other Party subject to review under this Section 9 in accordance with the confidentiality and non-use + +*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment. An unredacted version of this exhibit has been filed separately with the Commission. + +29 + + + + + +provisions of this Agreement, and shall cause its accounting firm to enter into an acceptable confidentiality agreement with the audited Party and any applicable Related Parties, obligating it or them to retain all such information in confidence pursuant to such confidentiality agreement. + +10. LICENSES + +10.1 License to Green Cross + +(a) License. Subject to the terms and conditions of this Agreement, MacroGenics hereby grants to Green Cross an exclusive, royalty- bearing (i) license, with the right to grant sublicenses (subject to Section 10.1(b)), under the MacroGenics Licensed Technology and the MacroGenics Licensed Trademarks; and (ii) to the extent needed under this Section 10.1(a), sublicense under the MacroGenics Licensed Technology licensed pursuant to the Upstream Agreements, in the case of each of (i) and (ii), to conduct the Phase I Clinical Development Plan and Phase II Clinical Development Plan, and to distribute, sell, offer for sale and import Products in the Field in the Territory during the Term. + +(b) Sublicensees. Green Cross may grant sublicensees solely for purposes of performing its Development obligations under this Agreement. In no event shall Green Cross grant any sublicense to any of the rights granted to it pursuant to Section 10.1(a) for any other purpose without MacroGenics' prior written consent. Each sublicense granted by Green Cross shall be consistent with this Agreement and subordinate thereto, and Green Cross shall remain responsible to MacroGenics for the compliance of each such Sublicensee with the financial and other obligations due under this Agreement. Green Cross shall provide a copy of each such sublicense to MacroGenics so that MacroGenics can confirm Green Cross' compliance with the foregoing. Each sublicense granted by Green Cross under this Agreement shall permit the conversion of such sublicense to a direct license with MacroGenics at MacroGenics' sole option in the event this Agreement is terminated and, upon such conversion, MacroGenics shall be responsible for all former obligations of Green Cross under such sublicense. Green Cross shall use Commercially Reasonable Efforts to include in each such sublicense a requirement obligating such sublicensees to cooperate with MacroGenics. + +(c) Regulatory Approvals. Green Cross shall hold and maintain all Regulatory Approvals for the Commercialization of the Product in the Territory. + +(d) MacroGenics Retained Rights. MacroGenics shall retain the following: (i) the right to conduct its obligations under the Phase I Clinical Development Plan and Phase II Clinical Development Plan in the Territory, including, without limitation, data management, monitoring, regulatory compliance and support and shipping requirements and all other requirements in connection with this Agreement; (ii) the right to manufacture or have manufactured MGAH22 and Products for uses pursuant to this Agreement as provided in Section 6 in the Territory; and (iii) all rights not otherwise granted to Green Cross inside and outside the Territory. + +(e) Opportunity ***. In the event that during the period between the ***, MacroGenics wishes to ***, MacroGenics shall provide Green Cross *** + +*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment. An unredacted version of this exhibit has been filed separately with the Commission. + +30 + + + + + +10.2 Upstream Agreements. Certain MacroGenics Licensed Know-how and MacroGenics Licensed Patents sublicensed under Section 10.1(a) above and identified on Exhibit A are licensed (or sublicensed, in some instances) to MacroGenics by certain Third Parties pursuant to the Upstream Agreements. Green Cross acknowledges and agrees that its sublicense to and any warranties and/or representations made by MacroGenics under this Agreement regarding such MacroGenics Licensed Technology granted under Section 10.1(a) are at all times subject to the applicable terms of the Upstream Agreements, current copies of which, for those in effect as of the Effective Date, have been provided to Green Cross as of the Effective Date, including restrictions on the type and nature of the antibodies licensed as Products thereunder, diligence requirements, and termination provisions thereof, and that MacroGenics is in no way licensing or purporting to license or sublicense to Green Cross rights under the Upstream Agreements that if sublicensed to Green Cross would be a violation of any Upstream Agreement. Green Cross covenants not to take or fail to take any action that violates the terms of such Upstream Agreements applicable to Sublicensees, or that would cause MacroGenics to be in breach of any of the terms of the Upstream Agreements. + +10.3 License to MacroGenics. Green Cross hereby grants to MacroGenics a royalty-free, worldwide license during the Term, with the right to grant sublicenses, under the Green Cross Licensed Patents and Green Cross Know-how that is incorporated into any Product, and all other intellectual property Controlled by Green Cross that is specifically related to MGAH22 to the extent needed by MacroGenics to research, identify, develop, make, have made, use, sell, offer for sale and import Products, including, without limitation, as contemplated by Section 10.1(c) above, in all cases without any obligation to obtain Green Cross' prior consent. The license granted pursuant to this Section 10.3 shall be non­exclusive in the Territory and exclusive in the rest of the world outside the Territory. After the Term, the Parties shall discuss in good faith whether future licenses are necessary for MacroGenics to continue to use Green Cross Licensed Patents or Green Cross Licensed Know-how, and determine reasonable terms and conditions for such license at MacroGenics' request. + +10.4 Clinical Data Licenses. Subject to the terms and conditions of this Agreement, Green Cross hereby grants to MacroGenics a non- exclusive, royalty-free, perpetual license, with the right to grant and authorize the grant of sublicenses, to use all Clinical Data and any data generated by Green Cross or any of its representatives or independent contractors pursuant to its performing its responsibilities under this Agreement for the research, Development, manufacture Commercialization and sales of MGAH22 and Products by MacroGenics outside the Territory and for MacroGenics to exercise its rights and fulfill its obligations under this Agreement. Subject to the terms and conditions of this Agreement, MacroGenics hereby grants to Green Cross a non-exclusive, + +*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment. An unredacted version of this exhibit has been filed separately with the Commission. + +31 + + + + + +royalty-free, license, with the right to grant sublicenses, during the Term to use all Clinical Data and other data generated by MacroGenics pursuant to its performing its responsibilities under this Agreement for Green Cross to fulfill its obligations under this Agreement. + +10.5 Negative Covenant. Each Party covenants that, except to the extent Third Parties generally are lawfully permitted to do so, it will not use or practice any of the other Party's intellectual property rights licensed to it under this Section 10 except for the purposes expressly permitted in the applicable license grant. + +10.6 No Implied Licenses. Except as explicitly set forth in this Agreement, neither Party grants any license, express or implied, under its intellectual property rights to the other Party. + +10.7 Diversion + +(a) Green Cross hereby covenants and agrees that it will not, either directly or indirectly, promote, market, distribute, import, sell or have sold Products, including via the Internet or mail order, to any Third Party, address or Internet Protocol address outside of the Territory. + +(b) If any of Green Cross' Products are diverted for use outside the Territory, the following shall apply: (i) if such Products were diverted by an identifiable customer, distributor, employee, consultant or agent of Green Cross then, upon the request of MacroGenics, Green Cross shall not sell such Products to, or allow the sale of such Products by, any such customer, distributor, employee, consultant or agent for the remaining Term and shall use Commercially Reasonable Efforts to buy back all such Products from such customer, distributor, employee, consultant or agent within *** of such request from MacroGenics; or (ii) Green Cross shall use Commercially Reasonable Efforts to investigate the location of such diverted Products and buy it back; but, if and to the extent that, Green Cross elects not to, or is unable to, buy back the applicable diverted Products, then MacroGenics may, in its sole discretion, buy back the applicable diverted Products, and Green Cross shall reimburse MacroGenics for all reasonable costs incurred by MacroGenics in connection with the buy-back or lost sales of any such diverted Products. + +11. EXCLUSIVITY. During the Term, Green Cross shall not (either by itself, or with or through a Related Party or Third Party) Develop or Commercialize any (i) Product outside of the scope of this Agreement or (ii) Competing Product. + +*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment. An unredacted version of this exhibit has been filed separately with the Commission. + +32 + + + + + +12. CONFIDENTIALITY; PUBLICATION + +12.1 Nondisclosure Obligation + +(a) Definition and Restrictions. All Confidential Information disclosed by one Party to the other Party at any time, including, without limitation, before the Effective Date or after the expiration or termination of this Agreement, shall be maintained in confidence by the receiving Party and shall not be disclosed by the receiving Party to any Third Party or used by the receiving Party for any purpose except as set forth herein without the prior written consent of the disclosing Party, *** The following shall not be deemed Confidential Information for purposes of the restrictions set forth in this Section 12.3(a): + +(i) Information that is known by the receiving Party at the time of its receipt, and not through a prior disclosure by the disclosing Party, as documented by the receiving Party's business records; + +(ii) Information that is or becomes part of the public domain through no fault of the receiving Party; + +(iii) Information that is subsequently disclosed to the receiving Party by a Third Party who may lawfully do so and is not under an obligation of confidentiality to the disclosing Party; and + +(iv) Information that is developed by the receiving Party independently of Confidential Information received from the disclosing Party, as documented by the receiving Party's business records. + +(b) Combinations. Any combination of features or disclosures shall not be deemed to fall within the exclusions set forth in Section 12.1(a) merely because individual features are published or available to the general public or in the rightful possession of the receiving Party unless the combination itself and principle of operation are published or available to the general public or in the rightful possession of the receiving Party. + +(c) Exceptions. Notwithstanding the restrictions set forth in Section 12.1(a), the receiving Party may disclose Confidential Information of the other Party to: + +(i) governmental or other regulatory agencies in order to obtain Patents or to gain or maintain approval to conduct clinical trials or to market Products, but such disclosure may be only to the extent reasonably necessary to obtain Patents or authorizations; or + +(ii) as the receiving Party deems necessary to be disclosed, to its Affiliates, agents, consultants, or other Third Parties for the Development or + +*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment. An unredacted version of this exhibit has been filed separately with the Commission. + +33 + + + + + +Commercialization of Product(s), or in connection with a licensing transaction related to such Product(s) or loan, financing or investment or acquisition, merger, consolidation or similar transaction (or for such entities to determine their interest in performing such activities) or in order to perform its obligations under this Agreement, in each case on the condition that any Third Parties, other than Regulatory Authorities, to whom such disclosures are made agree to be bound by confidentiality and non-use obligations substantially similar to those contained in this Agreement; provided that the term of confidentiality and non-use applicable to such Third Parties shall be no less than *** from the date of disclosure to them. + +(d) Disclosure Required by Judicial or Administrative Process. If a Party is required by judicial or administrative process to disclose Confidential Information of the other Party that is subject to the non-disclosure provisions of this Section 12.1, such Party shall promptly inform the other Party of the disclosure that is being sought in order to provide the other Party an opportunity to challenge or limit the disclosure obligations. Confidential Information that is disclosed by judicial or administrative process shall remain otherwise subject to the confidentiality and non-use provisions of this Section 12.1, and the Party disclosing Confidential Information pursuant to law or court order shall take all steps reasonably necessary, including without limitation obtaining an order of confidentiality, to ensure the continued confidential treatment of such Confidential Information. + +(e) Obligations Upon Termination. Upon the termination or expiration of this Agreement, or upon the earlier request of either Party, the receiving Party shall return to the disclosing Party, all of the disclosing Party's Confidential Information, including all copies thereof, provided that the receiving Party may retain one copy for archival purposes. + +12.2 Publication + +(a) Publication of Results. Green Cross and MacroGenics each acknowledge the other Party's interest in publishing the results of its activities under the Collaboration in order to obtain recognition within the scientific community and to advance the state of scientific knowledge. Each Party also recognizes the mutual interest in obtaining valid patent protection and in protecting business interests and trade secret information. Consequently, the JSC shall establish procedures for review of publications related to the Collaboration, ensuring that, except for disclosures permitted pursuant to Section 12.1, either Party and its employees wishing to make a publication related to work performed under this Agreement shall deliver to the other Party a copy of the proposed written publication or an outline of an oral disclosure at least *** prior to submission for publication or for presentation. + +(b) Review of Publications and Presentations + +(i) The reviewing Party shall have the right (a) to propose modifications to the publication or presentation for patent reasons, trade secret reasons, + +*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment. An unredacted version of this exhibit has been filed separately with the Commission. + +34 + + + + + +or for purposes of removing the Confidential Information of the reviewing Party, or (b) to request a reasonable delay in publication or submission for presentation in order to protect trade secret or patentable information. + +(ii) If the reviewing Party requests the removal of the reviewing Party's Confidential Information or a delay, the publishing Party shall remove such Confidential Information and delay submission for publication or submission for presentation for a period of *** to enable patent applications protecting each Party's rights in such Confidential Information to be filed in accordance with Section 15 below. + +(iii) Upon expiration of such *** and satisfaction of any other conditions imposed by the JSC, the publishing Party shall be free to proceed with the publication or submission for presentation. + +(iv) Upon request of the Party seeking publication, the reviewing Party shall consider expediting the time frames set forth in this Section 12.2. + +(v) If the reviewing Party requests modifications to the publication or submission for presentation, the publishing Party shall edit such publication to prevent disclosure of the Confidential Information of the reviewing Party or trade secret or proprietary business information prior to submission for publication or for presentation. + +12.3 Publicity; Use of Names + +(a) Press Releases. The Parties shall issue a mutually acceptable press release announcing the execution of this Agreement. A Party may issue any subsequent press release relating to this Agreement or activities conducted hereunder upon prior written approval of the other Party, such approval not to be unreasonably withheld or delayed; provided, however, that no approval of the other Party shall be required if a subsequent press release or SEC filing solely discloses the information that (1) a milestone under this Agreement has been achieved and/or any payments associated therewith have been received; (2) the filing and/or approval of a BLA generally has occurred (provided, however, that specific dates of filing shall not be disclosed); (3) initiation of any Phase II Clinical Trial or later clinical trial; and (4) commercial launch of a Product or any information that has previously been approved and disclosed as permitted by this Section 12.3(a). In the case of items (1)-(4) of the preceding sentence, the disclosing Party shall provide the other Party a copy of such proposed disclosures at least *** prior to the proposed release and consider in good faith any comments the other Party may make, where practicable, and in light of any reporting obligations of such disclosing Party under applicable laws, rules or regulations, including without limitation the rules and regulations promulgated by the United States Securities and Exchange Commission or any other governmental agency. + +*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment. An unredacted version of this exhibit has been filed separately with the Commission. + +35 + + + + + +(b) No Other Use of Company Names. Except as otherwise provided in this Section 12.3(b), neither Party shall use the name, trademark, trade name or logo of the other Party or its employees in any publicity or news release relating to this Agreement or its subject matter, without the prior express written permission of the other Party. + +(c) Approved Press Releases. In addition and notwithstanding anything to the contrary herein, (a) if the relevant text of a proposed press release has already previously been reviewed and approved for disclosure by the other Party then such text may be disclosed or republished in such proposed press release provided that the Party issuing such press release provides notice to the other Party of such press release at least four (4) business days prior to the issuance of such press release, where practicable, and (b) if the relevant text of a proposed public announcement such as a corporate presentation or comments to analysts or investors has already previously been reviewed and approved for disclosure by the other Party (whether in the form of an approved press release or prior approved presentation materials, Q&A script or the like) then such text may be included in such proposed public announcement (but not a press release) without resubmission and review by the other Party. + +(d) Existence of Agreement + +(i) No Disclosure. Neither Party shall disclose the existence or terms of this Agreement pursuant to a press release or otherwise except as provided in this Section 12.3(d). + +(ii) Permitted Disclosures + +(A) Notwithstanding the terms of this Section 12, either Party shall be permitted to disclose the existence and terms of this Agreement and the conduct of the Collaboration under this Agreement, to the extent required, in the reasonable opinion of such Party's legal counsel, to comply with applicable laws, rules or regulations, including without limitation the rules and regulations promulgated by the United States Securities and Exchange Commission or any other governmental agency. The disclosing Party shall take reasonable and lawful actions to avoid and/or minimize the degree of such disclosure. + +(B) Either Party may also disclose the existence and terms of this Agreement to its attorneys and advisors, and to potential acquirors, in connection with a potential acquisition or other change of control transaction and to existing and potential investors or lenders of such Party, as a part of their due diligence investigations, or to potential licensees or to permitted assignees in each case under an agreement to keep the terms of this Agreement confidential under terms of confidentiality and non-use substantially similar to the terms contained in this Agreement and to use such confidential information solely for the purpose of the contemplated transaction. + +*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment. An unredacted version of this exhibit has been filed separately with the Commission. + +36 + + + + + +(C) MacroGenics may also disclose the existence and terms of this Agreement pursuant to transactions related to the Commercialization or Development of MGAH22 or any Product ("Licensing Transactions"), in each case under an agreement to keep the terms of this Agreement confidential under terms of confidentiality and non-use substantially similar to the terms contained in this Agreement and to use such confidential information solely for the purpose of the contemplated transaction, provided that prior to the disclosure of the terms of this Agreement in connection with any Licensing Transaction, MacroGenics shall redact in any written summary or copy of this Agreement, all financial terms of this Agreement, in a manner substantially consistent with a form provided to Green Cross by MacroGenics on or before the Effective Date. The transactions described in Section 12.3(d)(ii)(B) shall not be deemed Licensing Transactions for purposes of this Section 12.3(d)(ii)(C). + +13. REPRESENTATIONS AND WARRANTIES + +13.1 Representations and Warranties of MacroGenics. MacroGenics represents and warrants to Green Cross that, as of the Effective Date: + +(a) it has the full right, power and authority to enter into this Agreement, to perform the Collaboration, and to grant the licenses contemplated under Section 10, and the fulfillment of its obligations and performance of its activities hereunder do not materially conflict with, violate, or breach or constitute a default under any contractual obligation or court or administrative order by which MacroGenics is bound; + +(b) all necessary consents, approvals and authorizations of all government authorities and other persons required to be obtained by MacroGenics as of the Effective Date in connection with the execution, delivery and performance of this Agreement have been obtained; + +(c) it is the exclusive licensee of or otherwise Controls the right, title and interest in and to the MacroGenics Licensed Technology and MacroGenics Licensed Trademarks, and has the right to grant to Green Cross the licenses that it purports to grant hereunder and has not granted any Third Party rights that would interfere or be inconsistent with Green Cross' rights hereunder; + +(d) to its knowledge, except for those licensed or sublicensed under the Upstream Agreements, the MacroGenics Licensed Patents and MacroGenics Licensed Know-how are not subject to any existing royalty or other payment obligations to any Third Party; and + +(e) as of the Effective Date, to its knowledge, the issued Patents in the MacroGenics Licensed Patents are valid and enforceable and it is not aware of any action, suit, inquiry, investigation or other proceeding threatened, pending, or ongoing brought by any Third Party that challenges or threatens the validity or enforceability of + +*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment. An unredacted version of this exhibit has been filed separately with the Commission. + +37 + + + + + +any of the MacroGenics Licensed Patents or that alleges the use of the MacroGenics Licensed Patents or the MacroGenics Licensed Know-how or the development, manufacture commercialization and use of the Products would infringe or misappropriate the intellectual property or intellectual property rights of any Third Party (and it has not received any notice alleging such an infringement or misappropriation). In the event that MacroGenics becomes aware of any such action or proceeding, it shall immediately notify Green Cross in writing. + +13.2 Representations and Warranties of Green Cross. Green Cross represents and warrants to MacroGenics that as of the Effective Date: + +(a) it has the full right, power and authority to enter into this Agreement, to perform the Collaboration, to grant the licenses granted hereunder, and the fulfillment of its obligations and performance of its activities hereunder do not materially conflict with, violate, or breach or constitute a default under any contractual obligation or court or administrative order by which Green Cross is bound; + +(b) all necessary consents, approvals and authorizations of all government authorities and other persons required to be obtained by Green Cross as of the Effective Date in connection with the execution, delivery and performance of this Agreement have been obtained. + +(c) it is the exclusive licensee of or otherwise Controls the right, title and interest in and to the Green Cross Licensed Patents and Green Cross Licensed Know-how, and has the right to grant to MacroGenics the licenses that it purports to grant hereunder and has not granted any Third Party rights that would interfere or be inconsistent with MacroGenics' rights hereunder; + +(d) to its knowledge, the Green Cross Licensed Patents and Green Cross Licensed Know-how are not subject to any existing royalty or other payment obligations to any Third Party; and + +(e) as of the Effective Date, to its knowledge, the issued Patents in the Green Cross Licensed Patents are valid and enforceable and it is not aware of any action, suit, inquiry, investigation or other proceeding threatened, pending, or ongoing brought by any Third Party that challenges or threatens the validity or enforceability of any of the Green Cross Licensed Patents or that alleges the use of the Green Cross Licensed Patents or the Green Cross Licensed Know-how or the development, manufacture commercialization and use of the Products would infringe or misappropriate the intellectual property or intellectual property rights of any Third Party (and it has not received any notice alleging such an infringement or misappropriation). In the event that Green Cross becomes aware of any such action or proceeding, it shall immediately notify MacroGenics in writing. + +13.3 Upstream Agreements. MacroGenics represents, warrants and covenants to Green Cross that: + +(a) Exhibit E lists all of the Upstream Agreements in existence as of the Effective Date. True and correct copies of the existing Upstream Agreements have previously been provided to Green Cross by MacroGenics, and copies of any additional Upstream Agreement entered following the Effective Date will be provided to Green Cross by MacroGenics. Notwithstanding the foregoing, prior to entering into additional Upstream Agreements, MacroGenics shall inform Green Cross to allow Green Cross to review the same. + +*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment. An unredacted version of this exhibit has been filed separately with the Commission. + +38 + + + + + +(b) The Upstream Agreements identified on Exhibit E are, to MacroGenics' knowledge, in full force and effect as of the Effective Date, and MacroGenics is not aware of any that it has committed any material breach of any of the provisions of any of such Upstream Agreements, nor does there exist any condition that, to the knowledge of MacroGenics, with passage of time or sending of notice would constitute a material breach by MacroGenics of any of the provisions of such Upstream Agreements, nor is MacroGenics aware of any material breach of such Upstream Agreements by any other party thereto. + +(c) To the extent required to grant the licenses in this Agreement, MacroGenics has the right under the Upstream Agreements listed on Exhibit E to enter into this Agreement and grant the licenses contemplated hereby. + +(d) MacroGenics will fulfill all of its material obligations under the Upstream Agreements and otherwise comply with the terms thereof. MacroGenics shall furnish to Green Cross copies of all notices received by MacroGenics relating to alleged breaches or defaults by MacroGenics of its obligations under the Upstream Agreements within five (5) business days of MacroGenics receipt thereof. + +(e) To the extent MacroGenics is permitted or required under the terms of the Upstream Agreements to participate in the prosecution, maintenance, or enforcement or defense of any Patent or other intellectual property right sublicensed to Green Cross under this Agreement, MacroGenics shall do so after consultation with Green Cross and, as and to the extent permitted by the Upstream Agreements, Green Cross shall have the same rights with respect thereto as set forth in Section 15 hereof. + +13.4 No Other Representations or Warranties. EXCEPT AS EXPRESSLY STATED IN THIS AGREEMENT, NO REPRESENTATIONS OR WARRANTIES WHATSOEVER, WHETHER EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT, OR NON-MISAPPROPRIATION OF THIRD PARTY INTELLECTUAL PROPERTY RIGHTS, IS MADE OR GIVEN BY OR ON BEHALF OF A PARTY. ALL REPRESENTATIONS AND WARRANTIES, WHETHER ARISING BY OPERATION OF LAW OR OTHERWISE, ARE HEREBY EXPRESSLY EXCLUDED. + +*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment. An unredacted version of this exhibit has been filed separately with the Commission. + +39 + + + + + +14. INDEMNIFICATION + +14.1 By Green Cross. Green Cross agrees to indemnify and hold harmless MacroGenics, its Affiliates, and their directors, officers, employees and agents (individually and collectively, the "MacroGenics Indemnitee(s)") from and against all losses, liabilities, damages and expenses (including reasonable attorneys' fees and costs) incurred in connection with any claims, demands, actions or other proceedings by any Third Party (individually and collectively, "Losses") first arising after the Effective Date to the extent arising from (a) activities performed by Green Cross or any of its Affiliates or Permitted Subcontractors with respect to the research, Development, manufacture, use, Commercialization or sale of MGAH22 or Products or any other exercise of their rights or performance of their obligations hereunder, (b) the use by Green Cross or any of its Related Parties or Permitted Subcontractors of the MacroGenics Licensed Patents or MacroGenics Licensed Know-how except as permitted in this Agreement, (c) the negligence, illegal conduct or willful misconduct of Green Cross, or (d) Green Cross' material breach of this Agreement, except to the extent such Losses arise out of any of MacroGenics Indemnitee's negligence, illegal conduct or willful misconduct, or breach of this Agreement. + +14.2 By MacroGenics. MacroGenics agrees to indemnify and hold harmless Green Cross, its Affiliates, and their directors, officers, employees and agents (individually and collectively, the "Green Cross Indemnitee(s)") from and against all Losses to the extent arising from (a) activities performed by MacroGenics or any of its Affiliates or Permitted Subcontractors with respect to the research, Development, manufacture, use, Commercialization or sale of Products, (b) any latent or hidden defect in a Product that is not caused by any act or omission of Green Cross, (c) the use by Green Cross or any of its Related Parties or Permitted Subcontractors of the MacroGenics Licensed Patents or MacroGenics Licensed Know-how or any intellectual property rights under Upstream Agreements as permitted under this Agreement, (d) the negligence, illegal conduct or willful misconduct of MacroGenics, or (e) MacroGenics' material breach of this Agreement, except to the extent such Losses arise out of any of Green Cross Indemnitee's negligence, illegal conduct or willful misconduct, or breach of this Agreement. + +14.3 Defense. If any such claims or actions are made, the Indemnitee shall be defended at the Indemnifying Party's sole expense by counsel selected by the Indemnifying Party and reasonably acceptable to the Indemnitee, provided that the Indemnitee may, at its own expense, also be represented by counsel of its own choosing. The Indemnifying Party shall have the sole right to control the defense of any such claim or action, subject to the terms of this Section 14. + +14.4 Settlement. The Indemnifying Party may settle any such claim, demand, action or other proceeding or otherwise consent to an adverse judgment (a) with prior written notice to the Indemnitee but without the consent of the Indemnitee where the only liability to the Indemnitee is the payment of money and the Indemnifying Party makes such payment, or (b) in all other cases, only with the prior written consent of the Indemnitee, such consent not to be unreasonably withheld. + +*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment. An unredacted version of this exhibit has been filed separately with the Commission. + +40 + + + + + +14.5 Notice. The Indemnitee shall notify the Indemnifying Party promptly of any claim, demand, action or other proceeding under Section 14.1 or Section 14.2 and shall reasonably cooperate with all reasonable requests of the Indemnifying Party with respect thereto. + +14.6 Permission by Indemnifying Party. The Indemnitee may not settle any such claim, demand, action or other proceeding or otherwise consent to an adverse judgment in any such action or other proceeding or make any admission as to liability or fault without the express written permission of the Indemnifying Party. Provided, however, that such permission shall not be required if such settlement does not involve (a) any admission of legal wrongdoing by the other Party's Indemnitee(s), or (b) the imposition of any equitable relief against the other Party's Indemnitee(s). + +14.7 Limitation of Liability. NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL, PUNITIVE, OR INDIRECT DAMAGES OR FOR LOST PROFITS ARISING FROM OR RELATING TO ANY BREACH OF THIS AGREEMENT, REGARDLESS OF ANY NOTICE OF THE POSSIBILITY OF SUCH DAMAGES. NOTWITHSTANDING THE FOREGOING, NOTHING IN THIS SECTION 14.7 IS INTENDED TO OR SHALL LIMIT OR RESTRICT THE INDEMNIFICATION RIGHTS OR OBLIGATIONS OF ANY PARTY UNDER ARTICLE 14, OR DAMAGES AVAILABLE FOR A PARTY'S BREACH OF CONFIDENTIALITY OBLIGATIONS IN ARTICLE 12. + +15. INVENTIONS; PATENT PROVISIONS + +15.1 Ownership of Intellectual Property + +(a) Ownership of MacroGenics IP. As between MacroGenics and Green Cross, MacroGenics shall remain the sole and exclusive owner of all MacroGenics Licensed Patents, MacroGenics Licensed Trademarks and MacroGenics Licensed Know-how that exist as of the Effective Date. + +(b) Ownership of Green Cross IP. As between Green Cross and MacroGenics, Green Cross shall remain the sole and exclusive owner of all Green Cross Licensed know-how that exists as of the Effective Date. + +(c) Ownership of Jointly Owned IP. MacroGenics shall own all data, results and inventions, whether patentable or not, conceived or reduced to practice in the course of conducting the Collaboration solely by MacroGenics or its consultants or subcontractors, together with all intellectual property rights therein. Green Cross shall own all data, results and inventions, whether patentable or not, conceived or reduced to practice in the course of conducting the Collaboration solely by Green Cross or its + +*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment. An unredacted version of this exhibit has been filed separately with the Commission. + +41 + + + + + +consultants or subcontractors, together with all intellectual property rights therein. MacroGenics and Green Cross shall jointly own all data, results and inventions, whether patentable or not, conceived or reduced to practice by MacroGenics and Green Cross jointly ("Jointly Owned IP"), together with all intellectual property rights therein, with each Party owning an undivided half interest and the right to exploit without the duty of accounting or seeking consent from the other Party to the extent to be permitted under Applicable Laws and Regulations. + +15.2 Patent and Trademark Filing, Prosecution and Maintenance + +(a) Overall Strategy. The JSC shall establish an overall strategy for the filing, prosecution and maintenance of MacroGenics Licensed Patents, MacroGenics Licensed Trademarks and Green Cross Licensed Patents in the Territory. + +(b) Prosecution + +(i) The responsibility for Patent Prosecution and Trademark Prosecution related to a Patent or Trademark that is within the MacroGenics Licensed Patents and MacroGenics Licensed Trademarks or the Green Cross Licensed Patents that is owned solely by a Party shall be the responsibility of such Party. Such Party shall keep the JSC and the other Party informed of the status of all such Patent Prosecution and Trademark Prosecution activities. MacroGenics shall be responsible for undertaking the Patent Prosecution with respect to Patents jointly owned by the Parties (the "Jointly Owned Patents"), and shall do as directed by the JSC. + +(ii) MacroGenics shall keep the JSC and Green Cross informed of the status of all matters affecting Patent Prosecution and Trademark Prosecution of MacroGenics Licensed Patents, MacroGenics Licensed Trademarks and Jointly Owned Patents in the Territory, including providing a copy of any correspondence from any governmental authorities to the JSC and Green Cross upon request, and consulting on the strategy and content of submissions to such governmental authorities in advance of any submissions. + +(iii) Any dispute regarding Patent Prosecution and Trademark Prosecution of MacroGenics Licensed Patents, MacroGenics Licensed Trademarks, or Jointly Owned Patents, shall be resolved by the JSC. + +(iv) Without limiting the generality of the foregoing, MacroGenics shall prosecute and maintain Jointly Owned Patents using outside counsel acceptable to Green Cross, and shall instruct such counsel to provide copies of correspondence and filings directly to Green Cross and otherwise permit Green Cross to participate with MacroGenics in any of the activities of such counsel with respect to the Patent and Trademark Prosecution of such Jointly Owned Patents. Before taking any material step in the Patent Prosecution or Jointly Owned Patents, MacroGenics and its counsel shall allow Green Cross a reasonable opportunity to comment on the action proposed to be taken, and agrees to incorporate in such filings all reasonable comments of Green Cross. + +(v) Green Cross acknowledges and understands that its rights and obligations under this Section 15.2 are secondary to and shall be subject to any Third Party rights and obligations under the Upstream Agreements. + +*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment. An unredacted version of this exhibit has been filed separately with the Commission. + +42 + + + + + +(c) Patent and Trademark Oppositions. The JSC will decide whether and how to participate in Patent and Trademark oppositions and undertake activities intended to invalidate Third Party Patents. + +15.3 Costs of Patent and Trademark Prosecution + +(a) Costs. All out­of­pocket costs for Patent Prosecution and Trademark Prosecution of a Party's solely owned Patent or Trademark and for maintaining a Party's solely owned Patent or Trademark shall be solely incurred by and the sole responsibility of that Party. All out­of­pocket costs for Patent Prosecution of Jointly Owned Patents and for maintaining Jointly Owned Patents in the Territory shall be shared equally by the Parties. The out­of­pocket costs of MacroGenics' participation in Patent and Trademark oppositions, interferences and similar actions, and activities intended to invalidate Third Party Patents and Trademarks in the Territory shall be borne solely by Green Cross. + +15.4 Patent and Trademark Prosecution Cooperation. With respect to all Patent Prosecution and Trademark Prosecution related to Patents and Trademarks included in MacroGenics Licensed Patents, MacroGenics Licensed Trademarks or Green Cross Licensed Patents, each Party shall: + +(a) execute all further instruments to document their respective ownership consistent with this Agreement as reasonably requested by the other Party; + +(b) make its employees, agents and consultants reasonably available to the other Party (or to the other Party's authorized attorneys, agents or representatives), to the extent reasonably necessary to enable the appropriate Party hereunder to undertake its Patent Prosecution and Trademark Prosecution responsibilities; + +(c) cooperate, if necessary and appropriate, with the other Party in gaining Patent and Trademark term extensions; provided, however, that any dispute regarding the same shall be submitted to the JSC for resolution; and + +(d) endeavor in good faith to coordinate its efforts under this Agreement with the other Party to minimize or avoid interference with the Patent Prosecution and Trademark Prosecution of the other Party's Patents and Trademarks. + +*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment. An unredacted version of this exhibit has been filed separately with the Commission. + +43 + + + + + +15.5 Enforcement + +(a) Notice. Each Party shall promptly provide, but in no event later than ***, the other with written notice reasonably detailing any known or alleged infringement of any Patent or Trademark owned by the other Party and subject to a license under this Agreement. + +(b) Enforcement of Intellectual Property Rights + +(i) The sole owner of a Patent, Trademark, Know-how or Confidential Information shall have the exclusive right to institute and direct legal proceedings against any Third Party believed to be infringing such Patent or Trademark or misappropriating or otherwise violating such Know-how or Confidential Information. Green Cross shall have the initial right to institute and direct legal proceedings against any Third Party believed to be infringing Jointly Owned Patents that claims or covers a Product sold in the Territory. If Green Cross has the right to direct legal proceedings pursuant to this Section 15.5(b)(i) and does not abate such violation of Jointly Owned Patents, including by commencement of a lawsuit against the accused person if necessary, within *** after receiving notice of such infringement of Jointly Owned Patents and immediately after notice of other violation of such Jointly Owned Patents, then MacroGenics shall be entitled (but shall not be obligated) to take all actions reasonably necessary to abate such violation in the Territory, including commencement of a lawsuit against the accused Third Party if necessary. + +(ii) MacroGenics shall have the initial right to institute and direct legal proceedings against any Third Party believed to be infringing Jointly Owned Patents that claims or covers a Product sold outside the Territory. If MacroGenics does not abate such violation of Jointly Owned Patents, including by commencement of a lawsuit against the accused person if necessary, within *** after receiving notice of such infringement of Jointly Owned Patents and immediately after notice of other violation of such Jointly Owned Patents, then Green Cross shall be entitled (but shall not be obligated) to take all actions reasonably necessary to abate such violation in the Territory, including commencement of a lawsuit against the accused Third Party if necessary. + +(iii) All amounts recovered from enforcement of any such rights by either Party in the Territory relating to the intellectual property licensed under this Agreement shall be first used to reimburse each Party's costs and expenses incurred in connection with such action, and any remainder of such recovery, other than amounts recovered as lost profits, shall be retained by the Party instituting the action, provided that any remainder retained by Green Cross shall be treated as Net Sales and shall be subject to Green Cross' royalty payment obligations at the applicable rate specified in Section 8.5. For amounts recovered as lost profits the amount of Net Sales represented by such lost profits and Green Cross shall be obligated to pay MacroGenics any amounts due under this Agreement if such projected Net Sales were actually made by Green Cross. All amounts recovered from + +*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment. An unredacted version of this exhibit has been filed separately with the Commission. + +44 + + + + + +enforcement of any such rights by either Party outside the Territory relating to Jointly Owned Patents shall be first used to reimburse each Party's costs and expenses incurred in connection with such action, and any remainder of such recovery, shall be retained by the Party instituting the action. + +(c) Cooperation in Enforcement Proceedings. For any action by a Party pursuant to subsection (b) above, in the event that such Party is unable to initiate or prosecute such action solely in its own name, the other Party will join such action voluntarily and will execute all documents necessary for such Party to initiate, prosecute and maintain such action. If either Green Cross or MacroGenics initiates an enforcement action pursuant to Section 15.5(b), then the other Party shall cooperate to the extent reasonably necessary and at the first Parties' sole expense (except for the expenses of the non­controlling Party's counsel, if any). Upon the reasonable request of the Party instituting any such action, such other Party shall join the suit and can be represented in any such legal proceedings using counsel of its own choice. Each Party shall assert and not waive the joint defense privilege with respect to all communications between the Parties reasonably the subject thereof. + +(d) Status; Settlement. The Parties shall keep each other informed of the status of and of their respective activities regarding any enforcement action pursuant to Section 15.5(b). Neither Party shall settle any litigation or legal proceeding in the Territory to enforce MacroGenics Licensed Patents or MacroGenics Licensed Trademarks without the other Party's written authorization. + +15.6 Defense + +(a) Notice of Allegations. Each Party shall notify the other in writing of any allegations it receives from a Third Party that the manufacture, production, use, development, sale or distribution of any Product or any technology or intellectual property licensed by a Party under this Agreement infringes the intellectual property rights of such Third Party. Such notice shall be provided promptly, but in no event after more than fifteen (15) business days, following receipt of such allegations. + +(b) Notice of Suit. In the event that a Party receives notice that it or any of its Affiliates have been individually named as a defendant in a legal proceeding by a Third Party alleging infringement of a Third Party's Patents or other intellectual property right as a result of the manufacture, production, use, development, sale or distribution of Products or any technology or intellectual property licensed by a Party under this Agreement, such Party shall immediately notify the other Party in writing and in no event notify such other Party later than *** after the receipt of such notice. Such written notice shall include a copy of any summons or complaint (or the equivalent thereof) received regarding the foregoing. Each Party shall assert and not waive the joint defense privilege with respect to all communications between the Parties reasonably the subject thereof. In such event, the Parties shall agree how best to mitigate or control the defense of any such legal proceeding; provided however, that if either Party or any of its Affiliates have been individually named as a defendant in a legal proceeding relating to + +*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment. An unredacted version of this exhibit has been filed separately with the Commission. + +45 + + + + + +the alleged infringement of a Third Party's Patents or other intellectual property right as a result of the manufacture, production, use, development, sale or distribution of Products, the other Party shall be allowed to join in such action, at its own expense. + +(c) Status; Settlement. The Parties shall keep each other informed of the status of and of their respective activities regarding any litigation or settlement thereof initiated by a Third Party in the Territory concerning a Party's manufacture, production, use, development, sale or distribution of Products or any technology or intellectual property licensed by a Party under this Agreement; provided, however, that no settlement or consent judgment or other voluntary final disposition of a suit under this Section 15.6(c) may be undertaken by a Party without the consent of the other Party which consent shall not be unreasonably withheld or delayed. + +16. TERMS AND TERMINATION + +16.1 Term. Unless earlier terminated, this Agreement shall continue in effect until the expiration of the Royalty Term as defined in Section 1.87 ("Term"), and thereafter Green Cross has no remaining payment obligations with respect to the Products pursuant to Section 8.5 above and MacroGenics shall have no further obligations hereunder. + +16.2 Termination for Change in Control of Green Cross. In the event of a Change in Control involving Green Cross, Green Cross shall provide prompt written notice to MacroGenics following such Change in Control, and MacroGenics may, in its sole discretion, terminate this Agreement by providing written notice to Green Cross within *** of MacroGenics' receipt of such written notice of the Change in Control. + +16.3 Termination for Change in Control of MacroGenics. In the event of a Change in Control involving MacroGenics, MacroGenics shall provide prompt written notice to Green Cross following such Change in Control, and Green Cross may, in its sole discretion, terminate this Agreement by providing written notice to MacroGenics within *** of Green Cross' receipt of such written notice of the Change in Control. + +16.4 Termination for Challenge to Patent Validity. MacroGenics may terminate this Agreement immediately upon written notice to Green Cross in the event Green Cross or any of its Affiliates: + +(a) directly or indirectly oppose, or assist any Third Party to oppose, in any patent office proceeding, the grant of any patent or patent application within the MacroGenics Licensed Patents, or, in any patent office proceeding, dispute or directly or indirectly assist any Third Party to dispute, the validity of any patent within the MacroGenics Licensed Patents or any of the claims thereof, including opposing any application for amendment thereto; + +*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment. An unredacted version of this exhibit has been filed separately with the Commission. + +46 + + + + + +(b) directly or indirectly oppose, or assist any Third Party to oppose, in any court proceeding, the grant of any patent or patent application within the MacroGenics Licensed Patents, or, in any court proceeding, dispute or directly or indirectly assist any Third Party to dispute, the validity of any patent within the MacroGenics Licensed Patents or any of the claims thereof; or + +(c) bring any claim or proceedings of whatever nature in relation to the MacroGenics Licensed Patents against MacroGenics and/or any of MacroGenics' Affiliates (or in respect of the foregoing their directors and officers) in respect of any activities carried out by them under any MacroGenics Licensed Patents which may be the subject of a Valid Claim of the MacroGenics Licensed Patents. + +16.5 Termination for Cause. This Agreement may be terminated at any time during the Term upon written notice by either Party if the other Party is in material breach of its other obligations under this Agreement and, in each case, has not cured such breach within *** after notice requesting cure of the breach (other than for non-payment which shall be cured within ***). + +16.6 Effect of Termination + +(a) If MacroGenics terminates this Agreement pursuant to Section 16.2, 16.4, or pursuant to Section 16.5 for cause based on material breach by Green Cross: + +(i) Green Cross shall pay any amounts due pursuant to Section 8 prior to the date of termination; + +(ii) For the avoidance of doubt, the licenses and sublicenses granted to Green Cross under Sections 10.1(a) and 10.4 shall terminate; + +(iii) Green Cross shall return to MacroGenics all Products (including, without limitation, all MGAH22) within its possession or control and arrange for the Green Cross Sublicensees to return to MacroGenics all Products (including, without limitation, all MGAH22) within such Green Cross Sublicensees' possession or control; + +(iv) Green Cross shall cease to research, develop, market and sell any Product that infringes a Valid Claim in a MacroGenics Licensed Patent; + +(v) for the Products (including, without limitation, MGAH22), Green Cross shall assign and promptly transfer to MacroGenics, at no expense to MacroGenics, all of Green Cross' right, title and interest in and to (A) all regulatory filings (such as INDs, CTAs and drug master files), Regulatory Approvals, and clinical trial agreements (to the extent assignable and not cancelled) for such Products(s), to the extent that MacroGenics elects to continue development of such Product(s); (B) all data, including clinical data, materials and information of any kind + +*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment. An unredacted version of this exhibit has been filed separately with the Commission. + +47 + + + + + +or nature whatsoever, in Green Cross' possession or in the possession of its Affiliates or its or their respective agents related to such Product(s); (C) all trademarks related to such Products (if such termination occurs after approval of such trademark by a Regulatory Authority); and (D) all material information, and any other information reasonably requested and required by MacroGenics, relating to the manufacture of such Products; + +(vi) all sublicenses under the rights granted pursuant to Section 10.1(b) shall terminate; and + +(vii) MacroGenics shall revoke (and Green Cross shall allow revocation of) any powers of attorney for any MacroGenics Licensed Patents that Green Cross holds as of the time of such termination; and + +(b) If Green Cross terminates this Agreement pursuant to Section 16.3: + +(i) The provisions of Section 16.6(a) shall apply; + +(ii) Notwithstanding anything to the contrary, MacroGenics shall continue to provide Green Cross, for up to ***, the Products (including, without limitation, all MGAH22), at the request of Green Cross in accordance with the terms of Section 6.2; and + +(c) If Green Cross terminates this Agreement pursuant to Section 16.5 for cause based on material breach by MacroGenics: + +(i) As full satisfaction of any claims Green Cross may have based upon such material breach and termination, ***: + +(1) Such material breach by MacroGenics results in a substantial reduction in the profit Green Cross would have received if such material breach and termination had not occurred; + +(2) MacroGenics committed such material breach other than as a result of a material breach committed by Green Cross; and + +(3) Both Parties agree in writing not to undertake arbitration in accordance with Section 17.7 to determine whether MacroGenics committed a material breach. + +(ii) For the avoidance of doubt, the license granted under Section 10.3 shall terminate; + +(iii) The provisions of Section 16.6(a) shall apply; + +(iv) Notwithstanding anything to the contrary, MacroGenics shall continue to provide Green Cross, for up to***, the Products (including, without limitation, all MGAH22), at the request of Green Cross in accordance with the terms of Section 6.2; and + +(v) Green Cross shall revoke (and MacroGenics shall allow revocation of) any powers of attorney for any Green Cross Licensed Patents that MacroGenics holds as of the time of such termination. + +*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment. An unredacted version of this exhibit has been filed separately with the Commission. + +48 + + + + + +(d) Return of Confidential Information. Upon expiration or termination of this Agreement, the Parties shall comply with Section 12.1(e). + +16.7 Survival. The following provisions shall survive the termination or expiration of this Agreement for any reason: Sections 1, 8.9, 8.11, 9, 10.4 (with respect to the license granted to MacroGenics), 12 (to the extent provided therein), 13, 14, 15.1, 16 and 17. + +17. MISCELLANEOUS + +17.1 Force Majeure. Neither Party shall be held liable to the other Party nor be deemed to have defaulted under or breached this Agreement for failure or delay in performing any obligation under this Agreement to the extent such failure or delay is caused by or results from causes beyond the reasonable control of the affected Party including, but not limited to, embargoes, war, acts of war (whether war be declared or not), insurrections, riots, civil commotions, strikes, lockouts or other labor disturbances, fire, floods, or other acts of God, or acts, omissions or delays in acting by any governmental authority or the other Party ("Force Majeure"). The affected Party shall notify the other Party of such force majeure circumstances as soon as reasonably practical, and shall promptly undertake all reasonable efforts necessary to cure such force majeure circumstances. In the event a Party is unable to perform its obligations under this Agreement due to Force Majeure for a period of ***, the other Party shall have the option of unilaterally terminating this Agreement upon providing *** written notice. + +17.2 Section 365(n) of the Bankruptcy Code. All rights and licenses granted under or pursuant to any section of this Agreement are, and shall otherwise be deemed to be, for purposes of Section 365(n) of the U.S. Bankruptcy Code, licenses of rights to "intellectual property" as defined under Section 101(35A) of the U.S. Bankruptcy Code. The Parties shall retain and may fully exercise all of their respective rights and elections under the U.S. Bankruptcy Code. The Parties agree that a Party that is a licensee of such rights under this Agreement shall retain and may fully exercise all of its rights and elections under the U.S. Bankruptcy Code, and that upon commencement of a bankruptcy proceeding by or against the licensing Party (such Party, the "Involved Party") under the U.S. Bankruptcy Code, the other Party (such Party, the "Noninvolved Party") shall be entitled to a complete duplicate of or complete access to (as such Noninvolved Party deems appropriate), any such intellectual property and all embodiments of such intellectual property, provided the Noninvolved Party continues to fulfill its payment or royalty obligations as specified herein in full. Such intellectual property and all + +*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment. An unredacted version of this exhibit has been filed separately with the Commission. + +49 + + + + + +embodiments thereof shall be promptly delivered to the Noninvolved Party (a) upon any such commencement of a bankruptcy proceeding upon written request therefor by the Noninvolved Party, unless the Involved Party elects to continue to perform all of its obligations under this Agreement or (b) if not delivered under (a) above, upon the rejection of this Agreement by or on behalf of the Involved Party upon written request therefor by Noninvolved Party. The foregoing is without prejudice to any rights the Noninvolved Party may have arising under the U.S. Bankruptcy Code or other applicable law. + +17.3 Assignment. Neither Party may assign its rights and obligations under this Agreement without the prior written consent of the other Party, provided that either Party may assign its rights and obligations under this Agreement, without such consent from the other Party, to its Affiliate or any successor in interest in connection with the sale of all or substantially all of its assets or a sale of all or substantially of the business related to MGAH22 or a Product, or a merger, acquisition or other similar transactions. For the avoidance of doubt, the terms and conditions of this Agreement shall be binding on the permitted successors and assignees of each Party. + +17.4 Severability. If any one or more of the provisions contained in this Agreement is held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby, unless the absence of the invalidated provision(s) adversely affects the substantive rights of the Parties. The Parties shall in such an instance use their best efforts to replace the invalid, illegal or unenforceable provision(s) with valid, legal and enforceable provision(s) which, insofar as practical, implement the purposes of this Agreement. + +17.5 Notices. All notices which are required or permitted hereunder shall be in writing and sufficient if delivered personally, sent by facsimile (and promptly confirmed by personal delivery, registered or certified mail or overnight courier), sent by nationally-recognized overnight courier or sent by registered or certified mail, postage prepaid, return receipt requested, addressed as follows: if to MacroGenics, to: + + + +1500 East Gude Drive Rockville, MD 20850 Attention: Chief Executive Officer Facsimile: *** + +with copy to: (which shall not constitute notice) + + + +Arnold & Porter, LLP 1600 Tysons Boulevard Suite 900 McLean, VA 22102 Attention: *** Facsimile: *** + +*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment. An unredacted version of this exhibit has been filed separately with the Commission. + +50 + + + + + +if to Green Cross, to: + + + +Green Cross Corporation 303 Bojeong-dong, Giheung-gu Yongin, 446-770, Korea Attn: President Facsimile: *** + +with copy to: + + + +Green Cross Corporation 303 Bojeong-dong, Giheung-gu Yongin, 446-770, Korea Attn: *** Facsimile: *** + +or to such other address as the Party to whom notice is to be given may have furnished to the other Party in writing in accordance herewith. Any such notice shall be deemed to have been given upon receipt. + +17.6 Applicable Law. All questions of inventorship will be determined in accordance with ***. In respect to all other Patent issues related to the enforceability or validity of a Patent, the laws of the jurisdiction in which the applicable Patent is filed or granted shall govern. Except as otherwise indicated, in all other respects, the right and obligations of the Parties under this Agreement shall be governed by and construed in accordance with the laws of the ***. + +17.7 Arbitration + +(a) All disputes arising out of or in connection with the Agreement shall be finally settled under the Rules of Arbitration of the *** by three (3) arbitrators ("Arbitral Tribunal"). + +(b) Each Party shall nominate one arbitrator. Should the claimant fail to appoint an arbitrator in the Request for Arbitration within *** days of being requested to do so, or if the respondent should fail to appoint an arbitrator in its Answer to the Request for Arbitration within *** days of being requested to do so, the other party shall request the *** to make such appointment. + +(c) The arbitrators nominated by the parties shall, within *** from the appointment of the arbitrator nominated in the Answer to the Request for Arbitration, and after consultation with the parties, agree and appoint a third arbitrator, who will act as a chairman of the Arbitral Tribunal. Should such procedure not result in an appointment within the *** time limit, either party shall be free to request the *** to appoint the third arbitrator. + +(d) *** shall be the seat of the arbitration. + +*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment. An unredacted version of this exhibit has been filed separately with the Commission. + +51 + + + + + +(e) The language of the arbitration shall be English. Documents submitted in the arbitration (the originals of which are not in English) shall be submitted together with an English translation. + +(f) This arbitration agreement does not preclude either party seeking conservatory or interim measures from any court of competent jurisdiction including, without limitation, the courts having jurisdiction by reason of either party's domicile. Conservatory or interim measures sought by either party in any one or more jurisdictions shall not preclude the Arbitral Tribunal granting conservatory or interim measures. Conservatory or interim measures sought by either party before the Arbitral Tribunal shall not preclude any court of competent jurisdiction granting conservatory or interim measures. + +(g) In the event that any issue shall arise which is not clearly provided for in this arbitration agreement the matter shall be resolved in accordance with the *** Arbitration Rules. + +17.8 Entire Agreement; Amendments. The Agreement contains the entire understanding of the Parties with respect to the Collaboration and licenses granted hereunder. All express or implied agreements and understandings, either oral or written, with regard to the Collaboration and the licenses granted hereunder are superseded by the terms of this Agreement. The Agreement may be amended, or any term hereof modified, only by a written instrument duly executed by authorized representatives of both Parties hereto. + +17.9 Headings. The captions to the several Sections hereof are not a part of the Agreement, but are merely for convenience to assist in locating and reading the several Sections and Sections of this Agreement. + +17.10 Independent Contractors. It is expressly agreed that MacroGenics and Green Cross shall be independent contractors and that the relationship between the two Parties shall not constitute a partnership, joint venture or agency. Neither MacroGenics nor Green Cross shall have the authority to make any statements, representations or commitments of any kind, or to take any action, which shall be binding on the other Party, without the prior written consent of the other Party. + +17.11 Waiver. The waiver by either Party of any right hereunder, or the failure of the other Party to perform, or a breach by the other Party, shall not be deemed a waiver of any other right hereunder or of any other breach or failure by such other Party whether of a similar nature or otherwise. + +17.12 Cumulative Remedies. No remedy referred to in this Agreement is intended to be exclusive, but each shall be cumulative and in addition to any other remedy referred to in this Agreement or otherwise available under law. + +*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment. An unredacted version of this exhibit has been filed separately with the Commission. + +52 + + + + + +17.13 Waiver of Rule of Construction. Each Party has had the opportunity to consult with counsel in connection with the review, drafting and negotiation of this Agreement. Accordingly, the rule of construction that any ambiguity in this Agreement shall be construed against the drafting Party shall not apply. + +17.14 Counterparts. The Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. + +17.15 Further Assurances. Each Party will duly execute and deliver, or cause to be duly executed and delivered, such further instruments and do and cause to be done such further acts and things, including the filing of such assignments, agreements, documents and instruments, as may be necessary or as the other Party may reasonably request in connection with this Agreement or to carry out more effectively the provisions and purposes, or to better assure and confirm unto such other Party its rights and remedies under this Agreement. + +17.16 Construction. Except where the context otherwise requires, wherever used, the singular will include the plural, the plural the singular, the use of any gender will be applicable to all genders, and the word "or" is used in the inclusive sense (and/or). The captions of this Agreement are for convenience of reference only and in no way define, describe, extend or limit the scope or intent of this Agreement or the intent of any provision contained in this Agreement. The term "including" as used herein means including, without limiting the generality of any description preceding such term. References to "Section" or "Sections" are references to the numbered sections of this Agreement, unless expressly stated otherwise. All dollars are United States Dollars. + +*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment. An unredacted version of this exhibit has been filed separately with the Commission. + +53 + + + + + +The Parties have executed this Agreement as of the Effective Date. Green Cross Corporation MacroGenics, Inc. + +By: /s/ B. G. Rhee By: /s/ Scott Koenig Name: B. G. Rhee Name: Scott Koenig Title: President Title: President and CEO + +*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment. An unredacted version of this exhibit has been filed separately with the Commission. + +54 + + + + + +Exhibit A + +MacroGenics Licensed Patents *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** + +*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment. An unredacted version of this exhibit has been filed separately with the Commission. + +55 + + + + + +Exhibit B + +MacroGenics Licensed Trademarks + +*** + +*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment. An unredacted version of this exhibit has been filed separately with the Commission. + +56 + + + + + +Exhibit C + +Phase I Clinical Development Plan + +****** *** *** *** + +A.*** 1. *** *** *** *** 2. *** *** *** 3. *** *** *** *** *** 4. *** *** 5. *** *** 6. *** *** 7. *** *** *** *** *** *** *** 8. *** *** *** *** *** *** *** *** *** 9. *** *** *** *** *** *** + +*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment. An unredacted version of this exhibit has been filed separately with the Commission. + +57 + + + + + +*** *** *** + +*** *** *** 10. *** *** *** *** *** *** *** *** *** 11. *** *** 12. *** *** 13. *** *** 14. *** *** 15. *** *** *** *** *** *** B. *** 1. *** *** 2. *** *** 3. *** *** *** 4. *** *** 5. *** *** 6. *** *** C. *** 1. *** *** 2. *** *** *** + +*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment. An unredacted version of this exhibit has been filed separately with the Commission. + +58 + + + + + +*** *** *** + +3. *** *** 4. *** *** 5. *** *** 6. *** *** 7. *** *** *** *** *** *** 8. *** *** D. *** 1. *** *** *** 2. *** *** *** 3. *** *** *** 4. *** *** *** 5. *** *** 6. *** *** E. *** 1. *** *** 2. *** *** 3. *** *** 4. *** *** *** 5. *** *** *** 6. *** *** *** + +*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment. An unredacted version of this exhibit has been filed separately with the Commission. + +59 + + + + + +*** *** *** + +7. *** *** 8. *** *** 9. *** *** *** 10. *** *** 11. *** *** 12. *** *** *** 13. *** *** 14. *** *** 15. *** *** *** 16. *** *** *** 17. *** *** *** F. *** 1. *** *** *** *** *** *** *** *** *** *** 2. *** *** *** *** *** 3. *** *** *** *** *** + +*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment. An unredacted version of this exhibit has been filed separately with the Commission. + +60 + + + + + +*** *** *** + +*** *** *** *** G. *** 1. *** *** 2. *** *** 3. *** *** 4. *** *** 5. *** *** 6. *** *** H. *** 1. *** *** 2. *** *** 3. *** *** 4. *** *** *** 5. *** *** 6. *** *** 7. *** *** 8. *** *** 9. *** *** 10. *** *** 11. *** *** 12. *** *** + +*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment. An unredacted version of this exhibit has been filed separately with the Commission. + +61 + + + + + +*** *** *** + +13. *** *** 14. *** *** I. *** 1. *** *** *** 2. *** *** 3. *** *** *** J. *** 1. *** *** 2. *** *** 3. *** *** 4. *** *** 5. *** *** 6. *** *** 7. *** *** 8. *** *** 9. *** *** 10. *** *** 11. *** *** 12. *** *** 13. *** *** *** 14. *** *** 15. *** *** *** + +*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment. An unredacted version of this exhibit has been filed separately with the Commission. + +62 + + + + + +*** *** *** + +16. *** *** 17. *** *** K. *** 1. *** *** 2. *** *** 3. *** *** 4. *** *** 5. *** *** 6. *** *** 7. *** *** *** *** 8. *** *** 9. *** *** 10. *** *** *** 11. *** *** 12. *** *** L. *** 1. *** *** *** 2. *** *** 3. *** *** *** 4. *** *** 5. *** *** *** + +*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment. An unredacted version of this exhibit has been filed separately with the Commission. + +63 + + + + + +*** *** *** + +6. *** *** M. *** 1. *** *** 2. *** *** 3. *** *** N. *** 1. *** *** 2. *** *** 3. *** *** 4. *** *** 5. *** *** 6. *** *** 7. *** *** 8. *** *** O. *** 1. *** *** 2. *** *** 3. *** *** 4. *** *** 5. *** *** 6. *** *** 7. *** *** *** + +*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment. An unredacted version of this exhibit has been filed separately with the Commission. + +64 + + + + + +*** *** *** + +8. *** *** 9. *** *** 10. *** *** 11. *** *** *** 12. *** *** 13. *** *** *** *** *** *** 14. *** *** 15. *** *** 16. *** *** 17. *** *** 18. *** *** 19. *** *** 20. *** *** 21. *** *** 22. *** *** 23. *** *** *** 24. *** *** 25. *** *** 26. *** *** + +*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment. An unredacted version of this exhibit has been filed separately with the Commission. + +65 + + + + + +*** *** *** + +27. *** *** 28. *** *** 29. *** *** 30. *** *** P. *** 1. *** *** 2. *** *** 3. *** *** 4. *** *** 5. *** *** 6. *** *** 7. *** *** 8. *** *** 9. *** *** 10. *** *** 11. *** *** 12. *** *** 13. *** *** Q. *** 1. *** *** 2. *** *** 3. *** *** + +*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment. An unredacted version of this exhibit has been filed separately with the Commission. + +66 + + + + + +*** *** *** + +4. *** *** *** *** 5. *** *** R. *** 1. *** *** 2. *** *** 3. *** *** 4. *** *** 5. *** *** *** 6. *** *** *** 7. *** *** 8. *** *** 9. *** *** *** *** *** *** 10. *** *** 11. *** *** 12. *** *** 13. *** *** 14. *** *** 15. *** *** 16. *** *** + +*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment. An unredacted version of this exhibit has been filed separately with the Commission. + +67 + + + + + +*** *** *** + +*** *** 17. *** *** 18. *** *** 19. *** *** 20. *** *** *** 21. *** *** 22. *** *** a. *** *** S. *** 1. *** *** 2. *** *** 3. *** *** 4. *** *** 5. *** *** 6. *** *** 7. *** *** 8. *** *** *** 9. *** *** 10. *** *** 11. *** *** 12. *** *** T. *** + +*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment. An unredacted version of this exhibit has been filed separately with the Commission. + +68 + + + + + +*** *** *** + +1. *** *** 2. *** *** 3. *** *** 4. *** *** 5. *** *** 6. *** *** 7. *** *** 8. *** *** 9. *** *** 10. *** *** 11. *** *** + +*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment. An unredacted version of this exhibit has been filed separately with the Commission. + +69 + + + + + +Exhibit D + +Phase II Clinical Development Plan + +****** *** • *** + +*** *** *** *** *** • *** + +*** *** *** • *** + +*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment. An unredacted version of this exhibit has been filed separately with the Commission. + +70 + + + + + +Exhibit E + +Upstream Agreements + +*** + +*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment. An unredacted version of this exhibit has been filed separately with the Commission. + +71 + + + + + +Exhibit F + +Joint Steering Committee + +MacroGenics: + + 1) *** + + 2) *** + + 3) *** + +Green Cross: + + 1) *** + + 2) *** + + 3) *** + +*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment. An unredacted version of this exhibit has been filed separately with the Commission. + +72 + + + + + +Exhibit G + +SAFETY DATA EXCHANGE AGREEMENT COMPONENTS + +*** + +*** + +*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment. An unredacted version of this exhibit has been filed separately with the Commission. + +73 + + + + + +Exhibit H Product Royalty Rates *** *** + +*** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** + +*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment. An unredacted version of this exhibit has been filed separately with the Commission. + +74 + + + + + +*** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** + +*** + +*** + +*** + +*** + +*** = Portions of this exhibit have been omitted pursuant to a request for confidential treatment. An unredacted version of this exhibit has been filed separately with the Commission. + +75 \ No newline at end of file diff --git a/full_contract_txt/MACY_S,INC_05_11_2020-EX-99.4-JOINT FILING AGREEMENT.txt b/full_contract_txt/MACY_S,INC_05_11_2020-EX-99.4-JOINT FILING AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..ee6f9186fdbfecadb866ca45a23950517b222abf --- /dev/null +++ b/full_contract_txt/MACY_S,INC_05_11_2020-EX-99.4-JOINT FILING AGREEMENT.txt @@ -0,0 +1 @@ +Exhibit 99.4 JOINT FILING AGREEMENT In accordance with Rule 13d-1(k)(1) promulgated under the Securities Exchange Act of 1934, as amended, the undersigned hereby agree to the joint filing with each of the Reporting Persons (as such term is defined in the Schedule 13D referred to below) on behalf of each of them of a statement on Schedule 13D (including amendments thereto and statements on Schedule 13G) with respect to the Common Stock, par value $0.01 per share of Macy's, Inc., a corporation organized under the laws of the State of Delaware, and that this agreement may be included as an exhibit to such joint filing. The undersigned acknowledge that each shall be responsible for the timely filing of any amendments, and for the completeness and accuracy of the information concerning the undersigned or contained herein and therein, but shall not be responsible for the completeness and accuracy of the information concerning the others. IN WITNESS WHEREOF, the undersigned hereby execute this agreement as of May 11, 2020. VESA EQUITY INVESTMENT S.À R.L. /s/ Marek Spurny By: Marek Spurny Title:Authorized Signatory /s/ Pascal Leclerc By: Pascal Leclerc Title:Authorized Signatory EP INVESTMENT S.À R.L. /s/ Marek Spurny By: Marek Spurny Title:Authorized Signatory /s/ Pascal Leclerc By: Pascal Leclerc Title:Authorized Signatory DANIEL KŘETÍNSKÝ /s/ Daniel Kretinsky By: Daniel Kretinsky \ No newline at end of file diff --git a/full_contract_txt/MANAKOASERVICESCORP_11_21_2007-EX-7.5-STRATEGIC ALLIANCE AGREEMENT.txt b/full_contract_txt/MANAKOASERVICESCORP_11_21_2007-EX-7.5-STRATEGIC ALLIANCE AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..509d92084071ebafe7971b86b24072f867288deb --- /dev/null +++ b/full_contract_txt/MANAKOASERVICESCORP_11_21_2007-EX-7.5-STRATEGIC ALLIANCE AGREEMENT.txt @@ -0,0 +1,165 @@ +Exhibit 7.5 + + + +STRATEGIC ALLIANCE AGREEMENT + +This Strategic Alliance Agreement is made and entered into this 14 day of June 2006, by and between UTEK Corporation ("UTEK"), a Delaware Corporation, 2109 Palm Avenue, Tampa, Florida 33605, and Manakoa Services Corporation ("MKOS"), a Nevada Corporation, 7203 W Deschutes Avenue, Suite B, Kennewick, Washington 99336. + +WITNESSETH: + +WHEREAS, MKOS desires to engage UTEK to provide the services as set forth in this Agreement, and + +WHEREAS, UTEK is agreeable to provide these services. + +NOW THEREFORE, in consideration of the mutual promise made in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows: + +I. SERVICES + + A. To identify technology acquisition opportunities for MKOS from research universities and government laboratories, while maintaining MKOS's confidentiality. + + B. In conjunction with the Services, UTEK agrees to: + + I. Make itself available at the offices of MKOS or at another mutually agreed upon place, during normal business hours, for reasonable periods of time, subject to reasonable advance notice and mutually convenient scheduling. + + II. Make itself available for telephone conferences with the principal officer(s) of MKOS during normal business hours. + + C. MKOS will have 30-days from receipt of information to determine if they wish to go forward with the technology license. UTEK, after 30 days, shall have the right to present the technology to other clients. + + D. MKOS acknowledges that the sources of technologies represented by UTEK are 3rd party research institutions for which UTEK does not control whether the technology will be shown to other parties by the licensor. + + E. At MKOS's request and upon mutual agreement between MKOS and UTEK, UTEK will negotiate and seek to acquire a license to the requested technology for subsequent sale to and acquisition by MKOS. + + F. On a case-by-case basis, at MKOS's request and UTEK's sole discretion, UTEK will propose an equity-financing plan for MKOS's consideration, to finance select technology acquisition opportunities for MKOS. + + G. MKOS will not seek to acquire any technologies presented to MKOS by UTEK from the technology developer directly or indirectly for a period of 24 months following the termination of this Strategic Alliance Agreement. - 1 - + + + + + + H. UTEK shall devote such time and efforts, as it deems commercially reasonable, under the circumstances to the affairs of MKOS, as is commercially reasonable and adequate to render the Services contemplated by this Agreement. + + I. UTEK cannot guarantee results on behalf of MKOS, but shall pursue all reasonable avenues available through its network of contacts. The acceptance and consumption of any transaction is subject to acceptance of the terms and conditions by in its sole discretion. + + J. MKOS will cooperate with UTEK and will promptly provide UTEK with all pertinent materials and requested information in order for UTEK to perform its Services pursuant to this Agreement + +II. INDEPENDENT CONTRACTOR + +UTEK shall be, and in all respects be deemed to be, an independent contractor in the performance of its duties hereunder. + + A. MKOS shall be solely responsible for making all payments to and on behalf of its employees and UTEK shall in no event be liable for any debts or other liabilities of MKOS. + + B. UTEK shall not have or be deemed to have, fiduciary obligations or duties to, and shall be able to pursue, conduct and carry on for its own account (or for the account of others) such activities, ventures, businesses and other pursuits as UTEK in its sole, absolute and unfettered discretion, may elect. + + C. Notwithstanding the above, no activity, venture, business or other pursuit of UTEK, during the term of this Agreement shall conflict with UTEK's obligations under this Agreement. + +III. EXPENSES + +It is expressly agreed and understood that each party shall be responsible for its own normal and reasonable out-of-pocket expenses. + +IV. COMPENSATION + + + +A. In consideration for providing these Services, MKOS shall pay UTEK $120,000 in the form of unregistered shares of common stock (923,077 shares) upon the execution of this Strategic Alliance Agreement. 1/12th of the shares (76,923) shall vest each month during the term of this Agreement. In lieu of payment of shares, MKOS shall have the option of paying UTEK $10,000 per month for the Services described in this Agreement. If this Agreement is terminated any unvested shares will be returned to MKOS. + + B. In consideration for the services to be provided herein, MKOS agrees that it will remit the agreed upon stock certificate or cash payment within five (5) days of both parties executing this Agreement. If no consideration is received in the timeline, UTEK has the unilateral option to terminate this Agreement. + + C. MKOS agrees that UTEK shall be entitled to additional compensation as follows: + +Technology Transfer: When a technology is shown to MKOS that MKOS wants to acquire, UTEK will seek to acquire the license to a technology through one of its subsidiaries. UTEK will then seek to provide a term sheet to MKOS outlining the consideration to be paid by MKOS for the acquisition of this technology. If MKOS executes the term sheet, agreeing to the terms set forth, UTEK shall transfer this subsidiary to MKOS in a stock for stock exchange under an "Agreement and Plan of Acquisition." The consideration to be paid by MKOS to UTEK will be based upon a markup to the value of the license and other assets in the subsidiary as determined by UTEK and agreed to by both parties. - 2 - + + + + + +V. TERM AND TERMINATION + +The term of the Agreement will be for 12 months unless terminated sooner. This Agreement may be renewed upon mutual, written agreement of the parties. Either party may terminate this Agreement at any time with 30 days written notice. + +VI. LEGAL COMPLIANCE + +MKOS agrees that it will put in place, if it has not already done so, policies and procedures relating to and addressing, with the commercially reasonable intent to ensure compliance with, applicable securities laws, rules and regulations, including, but not limited to: + + A. Disclosure requirements regarding the required disclosure of the nature and terms of UTEK's relationship with, including, but not limited to press releases, publications on its web site, letters to investors and telephone or other personal communication with potential or current investors. + + B. No press releases or any other forms of communication to third parties, which mention both UTEK and MKOS, shall be released without the prior written consent and approval of both UTEK and MKOS. + + + +C. UTEK represents to MKOS that a) it has the experience as may be necessary to perform all the required, b) all Services will be performed in a professional manner, and c) all individuals it provides to perform the Services will be appropriately qualified and subject to appropriate agreements concerning the protection of trade secrets and confidential information of which such persons may have access to over the term of this Agreement. + + D. Until termination of the engagement, MKOS will notify UTEK promptly of the occurrence of any event, which might materially affect the condition (financial or otherwise), or prospects of MKOS. + +VII. CONFIDENTIAL DATA + + + +A. UTEK shall not divulge to others, any trade secret or confidential information, knowledge, or data concerning or pertaining to the business and affairs of MKOS, obtained by UTEK as a result of its engagement hereunder, unless authorized, in writing by MKOS. UTEK represents and warrants that it has established appropriate internal procedures for protecting the trade secrets and confidential information of, MKOS including, without limitation, restrictions on disclosure of such information to employees and other persons who may be engaged in such information to employees and other persons who may be engaged in rendering services to any person, firm or entity which may be a competitor of. + + + +B. MKOS shall not divulge to others, any trade secret or confidential information, knowledge, or data concerning or pertaining to the business and affairs of UTEK or confidential information revealed by UTEK obtained as a result of its engagement hereunder, unless authorized, in writing, by UTEK, and agreed to be bound by any confidentiality agreement entered into by UTEK with any third party for the purpose of reviewing technology acquisition opportunities. + + + +C. UTEK shall not be required in the performance of its duties to divulge to MKOS, or any officer, director, agent or employee of MKOS, any secret or confidential information, knowledge, or data concerning any other person, firm or entity (including, but not limited to, any such person, firm or entity which may be a competitor or potential competitor of) which UTEK may have or be able to obtain other than as a result of the relationship established by this Agreement. - 3 - + + + + + +VIII. OTHER MATERIAL TERMS AND CONDITIONS + + A. INDEMNITY. + + + +1. UTEK shall indemnify, defend and hold harmless MKOS from and against any and all losses incurred by MKOS which arise out of or result from misrepresentation, breach of warranty or breach or non- fulfillment of any covenant contained herein or Schedules annexed hereto or in any other documents or instruments furnished by UTEK pursuant hereto or in connection with this Agreement. + + + +2. MKOS shall indemnify, defend and hold harmless UTEK from and against any and all losses incurred by UTEK which arise out of or result from misrepresentation, breach of warranty or breach or non-fulfillment of any covenant contained herein or Schedules annexed hereto or in any other documents or instruments furnished by MKOS pursuant hereto or in connection with this Agreement. + + B. PROVISIONS. Neither termination nor completion of the assignment shall affect the provisions of this Agreement, and the Indemnification Provisions that are incorporated herein, which shall remain operative and in full force and effect. + + + +C. SOLICITATION. MKOS agrees that for a twenty four months (24) following the execution of this Agreement, MKOS shall not, without UTEK's prior written consent, directly or indirectly solicit for employment any present employee of UTEK, or request, induce or advise any employee of UTEK to leave the employ of UTEK. In turn, UTEK agrees that it will not directly or indirectly solicit any present employee of MKOS. + + D. ADDITIONAL INSTRUMENTS. Each of the parties shall from time to time, at the request of others, execute, acknowledge and deliver to the other party any and all further instruments that may be reasonably required to give full effect and force to the provisions of this Agreement. + + + +E. ENTIRE AGREEMENT. Each of the parties hereby covenants that this Agreement, is intended to and does contain and embody herein all of the understandings and agreements, both written or oral, of the parties hereby with respect to the subject matter of this Agreement, and that there exists no oral agreement or understanding expressed or implied liability, whereby the absolute, final and unconditional character and nature of this Agreement shall be in any way invalidated, empowered or affected. There are no representations, warranties or covenants other than those set forth herein. + + + +F. ASSIGNMENTS. The benefits of the Agreement shall inure to the respective successors and assignees of the parties and assigns and representatives, and the obligations and liabilities assumed in this Agreement by the parties hereto shall be binding upon their respective successors and assigns; provided that the rights and obligations of UTEK under this Agreement may not be assigned or delegated without the prior written consent of MKOS and any such purported assignment shall be null and void. Notwithstanding the foregoing, UTEK may assign this Agreement or any portion of its Compensation as outlined herein to its subsidiaries in its sole discretion. + + G. ORIGINALS. This Agreement may be executed in any number of counterparts, each of which so executed shall be deemed an original and constitute one and the same agreement. + + H. NOTICES. All notices that are required to be or may be sent pursuant to the provision of this Agreement shall be sent by certified mail, return receipt requested, or by overnight package delivery service to each of the parties at the addresses appearing herein, and shall count from the date of mailing or the validated air bill. + + + +I. MODIFICATION AND WAIVER. A modification or waiver of any of the provisions of this Agreement shall be effective only if made in writing and executed with the same formality as this Agreement. The failure of any party to insist upon strict performance of any of the provisions of this Agreement shall not be construed as a waiver of any subsequent default of the same or similar nature or of any other nature. - 4 - + + + + + + + +J. INJUNCTIVE RELIEF. Solely by virtue of their respective execution of this Agreement and in consideration for the mutual covenants of each other, MKOS and UTEK hereby agree, consent and acknowledge that, in the event of a breach of any material term of this Agreement, the non-breaching party will be without adequate remedy-at-law and shall therefore, be entitled to immediately redress any material breach of this Agreement by temporary or permanent injunctive or mandatory relief obtained in an action or proceeding instituted in any court of competent jurisdiction without the necessity of proving damages and without prejudice to any other remedies which the non-breaching party may have at law or in equity. + + + +K. ATTORNEY'S FEES. If any arbitration, litigation, action, suit, or other proceeding is instituted to remedy, prevent or obtain relief from a breach of this Agreement, in relation to a breach of this Agreement or pertaining to a declaration of rights under this Agreement, the prevailing party will recover all such party's attorneys' fees incurred in each and every such action, suit or other proceeding, including any and all appeals or petitions there from. As used in this Agreement, attorneys' fees will be deemed to be the full and actual cost of any legal services actually performed in connection with the matters involved, including those related to any appeal to the enforcement of any judgment calculated on the basis of the usual fee charged by attorneys performing such services. + + L. INVESTMENT COMPANY STATUS. MKOS represents that it is not an investment company, registered or unregistered. + +APPROVED AND AGREED: UTEK Corporation Manakoa Services Corporation + +By: /s/ Doug Schaedler By: /s/ Chris Outwater Doug Schaedler Chris Outwater Chief Operating Officer President - 5 - \ No newline at end of file diff --git a/full_contract_txt/MANUFACTURERSSERVICESLTD_06_05_2000-EX-10.14-OUTSOURCING AGREEMENT.txt b/full_contract_txt/MANUFACTURERSSERVICESLTD_06_05_2000-EX-10.14-OUTSOURCING AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..8a1f9d3b81b36e8bd143d62090f0eb65f72922c1 --- /dev/null +++ b/full_contract_txt/MANUFACTURERSSERVICESLTD_06_05_2000-EX-10.14-OUTSOURCING AGREEMENT.txt @@ -0,0 +1,3507 @@ +Exhibit 10.14 + + OUTSOURCING AGREEMENT + + BETWEEN + + INTERNATIONAL BUSINESS MACHINES CORPORATION + + AND + + MANUFACTURERS' SERVICES WESTERN U.S. OPERATIONS, INC. + + EFFECTIVE DATE + + JUNE 1, 1998 + +---------- [*] = Information redacted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission. + + IBM Confidential + + OUTSOURCING BASE AGREEMENT + +This Outsourcing Base Agreement and the five (5) attachments listed below which are hereby incorporated by reference ("Agreement") is entered into by and between International Business Machines Corporation, a corporation incorporated under the laws of New York, U.S.A., having an office for the transaction of business at 8501 IBM Drive, Charlotte, North Carolina 28262 ("IBM"), and Manufacturers' Services Western US Operations, Inc., a corporation incorporated under the laws of California, U.S.A., having an office for the transaction of business at 5600 Mowry School Road, Newark, CA 94560 ("MSL"). + +WHEREAS, IBM desires to sell certain IBM assets and transition services to MSL and MSL desires to purchase certain IBM assets and transition services from IBM in order for MSL to manufacture and sell products to IBM, and + +WHEREAS, MSL desires to employ certain IBM personnel and lease certain IBM space in Charlotte, North Carolina, and IBM desires to make available certain IBM personnel and lease certain IBM space to MSL in order for MSL to manufacture and sell products to IBM, and + +WHEREAS, MSL desires to manufacture and sell products to IBM and IBM desires to purchase such products, + +NOW THEREFORE, in consideration of the promises contained herein, IBM and MSL (each a "Party" and together the "Parties") agree to the following terms and conditions: + +The Parties agree that this Agreement regarding this transaction consists of: + +a) the Outsourcing Base Agreement + +b) Attachment 1: Statement of Work and its Product Attachments, Appendices, and Supplements + +c) Attachment 2: Employee list and Benefits Information + +d) Attachment 3: Asset List + +e) Attachment 4: Expense Participation + +f) Attachment 5: Equipment and Program Loan List + +g) Agreement for Exchange of Confidential Information Number 4998S60076 + +h) IBM Purchase Orders + +i) IBM Customer Orders + +j) Equipment and Program Loan Agreement + +The following is a related agreement between MSL and IBM: + + IBM Corporation (Landlord) and MSL (Tenant) Lease Agreement + +Page 1 Dated 05/05/98 + + IBM Confidential + +By signing below, the Parties agree to the terms of this Agreement. Once signed, 1) any signed reproduction of this Agreement made by reliable means (for example, photocopy or facsimile) is considered an original, and 2) all products and services delivered by either Party to the other under this Agreement are subject to the terms and conditions of this Agreement. + +Agreed to: Agreed to: Manufacturers' Services Western U.S. International Business Machines + + + + + +Operations, Inc. Corporation + +By: /s/ Kevin C. Melia By: /s/ R. G. Richter -------------------- -------------------------- Authorized Signature Authorized Signature + +Name: Kevin C. Melia Name: R. G. Richter ------------------ ------------------------ + +Date: May 5, 1998 Date: May 5, 1998 ------------------ ------------------------ + +Page 2 Dated 05/05/98 + + IBM Confidential + +SECTION 1.0 DEFINITIONS........................................ Page 4 + +SECTION 2.0 ORDER OF PRECEDENCE................................ Page 5 + +SECTION 3.0 SCOPE OF WORK...................................... Page 6 + +SECTION 4.0 TERM............................................... Page 6 + +SECTION 5.0 TERMINATION........................................ Page 6 + +SECTION 6.0 PAYMENT............................................ Page 9 + +SECTION 7.0 AUDIT.............................................. Page 10 + +SECTION 8.0 PURCHASE OF ASSETS................................. Page 11 + +SECTION 9.0 PERSONNEL.......................................... Page 12 + +SECTION 10.0 LEASE OF PREMISES................................. Page 13 + +SECTION 11.0 MANUFACTURING, FULFILLMENT, AND INTEGRATION....... Page 13 + +SECTION 12.0 TRANSITION SERVICES............................... Page 13 + +SECTION 13.0 INTELLECTUAL AND INDUSTRIAL PROPERTY.............. Page 13 + +SECTION 14.0 WARRANTIES........................................ Page 15 + +SECTION 15.0 INDEMNIFICATION AND LIMITATION OF LIABILITY....... Page 18 + +SECTION 16.0 GENERAL........................................... Page 19 + +Page 3 Dated 05/05/98 + + IBM Confidential + +SECTION 1.0 DEFINITIONS + +1.1 "Effective Date" shall mean the time when the Parties have acknowledged in the certificate to be provided pursuant to Sections 14.1 and 14.2 that approval has been obtained for all Governmental Actions required by all Government Authorities necessary for each of the Parties to perform its obligations under this Agreement including expiration or early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. + +1.2 "Execution Date" shall mean the date this Agreement is signed by authorized representatives of both Parties. + +1.3 "Days" shall mean business days as followed by a particular Work Center (as defined below). + +1.4 "Delivery Date" shall mean the committed ship date on the IBM Customer Order or as specified by IBM. + +1.5 "GMSV" shall mean Global Manufacturers' Services Valencia S.A. (an MSL Related Company in Spain). + +1.6 "Governmental Actions" shall mean any authorizations, consents, approvals, waivers, exceptions, variances, franchises, permissions, permits, and licenses of, and filings and declarations with Governmental Authorities + +1.7 "Governmental Authority" shall mean any United States federal, state or local, or other non-US court, governmental or administrative agency or commission or other governmental agency, authority, instrumentality or regulatory body. + +1.8 "IBM Customer Order" shall mean orders from IBM and IBM customers that will trigger the MSL fulfillment, manufacturing and/or integration processes to meet the requested Delivery Date. Only orders received via IBM's AAS, GEMS, EOSE, IPLS, IPRS, Q-Ship or an IBM Purchase Order shall be authorization for MSL to build Products or provide services under this Agreement. + + + + + +1.9 "IBM" shall mean International Business Machines Corporation, Armonk, New York, USA, and its Subsidiaries. + +1.10 "Integration" shall mean a service associated with fulfillment for IBM Customer Orders that require special treatment. Special treatment usually consists of taking IBM and third party products and configuring the total system to meet the integration statement of work. + +1.11 "Miscellaneous Equipment Specification" ("MES") shall mean a set of Parts used to upgrade Products. + +1.12 "MSL Related Companies" shall mean Manufacturers' Services Limited (Delaware, USA) and its Subsidiaries, including Global Manufacturers' Services Valencia S.A. + +Page 4 Dated 05/05/98 + + IBM Confidential + +1.13 "Parts" shall mean parts, components, subassemblies and other materials used by MSL to fulfill orders for IBM. Parts shall also include the following: + + (a) IBM Parts are those Parts which are purchased by MSL from IBM,. + + (b) IBM Designated Parts are those Parts purchased by MSL from IBM nominated suppliers, + + (c) IBM Consigned Parts are those Parts owned by IBM or IBM customers which are consigned to MSL, and + + (d) MSL Procured Parts are those Parts which are directly procured by MSL and are other than IBM Parts or IBM Designated Parts. + +1.14 "Products" shall mean Parts, a MES, machine types, request for price quotation ("RPQ's"), model numbers and feature types purchased by IBM under this Agreement and as further described in the Product Attachments. + +1.15 "Product Attachment" shall mean Attachments A through G of the Statement of Work and Exhibit 1 to Supplement 1 of the Statement of Work to this Agreement which describes the details of a specific transaction or series of transactions. Product Attachments are incorporated into and made a part of this Agreement. + +1.16 "Product Group" shall mean those Products relating to a particular division's Product Attachment, each of which may include more than one Product family. + +1.17 "Purchase Order" shall mean a general order issued by IBM in which IBM Customer Orders will be placed from IBM or its customers to MSL. Such Customer Orders shall specify Products to be delivered to IBM, and shall include Product identification, Delivery Dates, quantity and specifications. + +1.18 "Subsidiary" shall mean an entity during the time that more than 50% of its voting stock (or, if no voting stock, decision-making power) is owned or controlled, directly or indirectly, by another entity. + +1.19 "Services" shall mean any services provided by one Party to the other, which is not included in the services for specific Products described in the applicable Product Attachment. + +1.20 "Transition Services" shall mean services performed from the Effective Date of Agreement through December 31, 1998, as described in Supplement 1 to the Statement of Work. + +1.21 "Work Center" shall mean the MSL or MSL Related Company plant site utilized to fulfill the obligations of this Agreement. + +SECTION 2.0 ORDER OF PRECEDENCE + +This Agreement replaces any prior oral or written communication between the Parties with respect to the subject matter of this Agreement. Order of precedence with regard to any conflict for this Agreement shall be as follows: + +Page 5 Dated 05/05/98 + + IBM Confidential + + 1) Product Attachments + + 2) Appendices + + 3) Supplements + + 4) Statement of Work + + 5) Outsourcing Base Agreement, Employee List and Benefits Information, Asset Lists + + + + + + 6) Purchase Orders + + Notwithstanding the order of precedence set forth above, the following sections of the Outsourcing Base Agreement shall not be modified or superseded by any of the listed documents unless amended by a written instrument duly executed by an authorized representative of each Party making specific reference to such section: + + i) Sections 5.1 and 5.2 of Termination, + + ii) Section 8.0, Purchase of Assets, + + iii) Section 13.0, Intellectual and Industrial Property, + + iv) Section 14.0, Warranties, and + + v) Section 15.0, Indemnification. + +SECTION 3.0 SCOPE OF WORK + + MSL will perform and manage selected manufacturing, Integration, and other Services, as well as sell Products to IBM, as stated in the Statement of Work and its Appendices, Attachments and Supplement for the Retail Store Solutions ("RS"), Global Embedded Production Solutions ("GEPS"), Finance Solutions, and other IBM business units. + +SECTION 4.0 TERM + + This Agreement shall become effective on the Effective Date and shall continue for a period of three (3) years unless terminated as provided in Section 5.0. This Agreement will automatically be renewed for periods of twelve (12) months unless either Party gives six (6) months written notice of its intent to terminate this Agreement. Such renewals shall continue for successive periods under the same terms and conditions, unless otherwise agreed in writing by both Parties. + +SECTION 5.0 TERMINATION + +5.1 Breach + + Notwithstanding anything in this Agreement to the contrary, this Agreement may be terminated by either Party for cause as follows: + +Page 6 Dated 05/05/98 + + IBM Confidential + + a) in the event of a material breach or default by the other Party of a material obligation of such Party under the Agreement which is not remedied within [*] Days after a written notice is given of such default or breach; + + b) upon the occurrence of any of the following: + + i) the other Party resolves to go into voluntary liquidation; + + ii) a court orders the other Party to cease doing business; + + iii) a receiver or administrative receiver is appointed over the whole or any part of the assets or property of the other Party; + + iv) the other Party becomes unable to pay its debts because it is subject to a suspension of payments order, bankruptcy, or other insolvency proceeding; or + + v) substantially all of the shares or assets of one Party are acquired by an entity that competes directly with the other Party. + + In the case of i to v above, termination may also be effected by serving notice on the liquidator, administrator, acquirer, or receiver, as the case may be. + + c) notice of the inability of the other Party to perform due to the existence of a Force Majeure event, as described in Section 16.17 of this Agreement, which is reasonably determined by the terminating Party to be a continuing condition. + + Provided, however, that no such termination under this section after the Effective Date shall operate to rescind the transfer of the assets, as listed in Attachment 3: Asset List, unless IBM terminates this Agreement pursuant to Section 5.0 for MSL's failure to pay for such assets, in which case MSL shall return, at its cost, all such assets in MSL's possession at termination. + +5.2 Rights Upon Termination + + + + + + a) Upon the expiration or termination for default of this Agreement, MSL will: + + i) within [*] Days after expiration or receipt of termination notice for default of this Agreement from IBM, cancel all Parts purchase orders, and within [*] Days, after such expiration or termination notice, prepare and submit to IBM a written inventory in reasonable detail of each of the following items in MSL's possession as of the date of termination: + + 1. All Parts and partially completed Products. MSL shall continue to provide a detailed listing of Parts purchase order cancellations weekly until all issues are agreed to and resolved by the Parties. + + 2. All labeling and packaging material used for Products. + + 3. All completed Products covered by a Purchase Order not previously shipped to IBM. + +Page 7 Dated 05/05/98 + + IBM Confidential + + 4. All IBM owned tooling. + + ii) assist in the transfer of MSL responsibilities and Products as described in Attachment 1: Statement Of Work, to IBM or to another party that IBM designates. + + iii) within [*] Days after expiration or termination of this Agreement, MSL shall return to IBM all copies of IBM Product documentation and all copies of any IBM confidential documents, discs, tapes and other media materials containing IBM confidential information of IBM. + + b) Upon termination by IBM due to a default by MSL pursuant to Section 5.1 above, IBM shall, at its option, elect to do one of the following: + + i) be entitled to terminate all outstanding Purchase Orders without liability for such termination and purchase MSL's inventory of Parts, including Parts to be delivered to MSL to meet IBM's forecasted requirements, subject to the Supply Flexibility set forth in Appendix 4 to the Statement of Work. This purchase shall not include any Parts that are cancelable or otherwise transferable to IBM: + + ii) require delivery of all partially completed, and completed Products and inventory of purchased Parts, and buy them. This shall include Parts purchased and to be delivered to MSL to meet IBM's forecasted requirements, subject to the Supply flexibility set forth in Appendix 4 to the Statement of Work, but shall not include any Parts that are cancelable or otherwise transferable to IBM; or + + iii) require completion and delivery of any remaining units of Products on order as of the date of termination including inventory of purchased Parts and Parts purchased and to be delivered to MSL to meet IBM's forecasted requirements, subject to the Supply Flexibility set forth in Appendix 4 to the Statement of Work, but not including any Parts that are cancelable or otherwise transferable to IBM, and buy them, in which case MSL's obligations under 5.2 a) iii will be suspended until [*] Days after the appropriate Delivery Date. + + c) Upon termination by MSL due to default by IBM, pursuant to Section 5.1 above, MSL shall complete Product(s) on order as of the date of termination, sell them to IBM, and deliver and sell to IBM Parts inventory. This shall include Parts purchased and to be delivered to MSL to meet IBM's forecasted requirements, subject to the Supply Flexibility set forth in Appendix 4 to the Statement of Work, but shall not include any Parts that are cancelable or otherwise transferable to IBM. + +5.3 Prices Upon Termination + + a) The price for completed Product(s) including provisions relating to IBM's [*] status shall be as described in Attachment 1; Statement of Work. The Parties agree to negotiate in good faith the price for partially completed Products, but in no + +Page 8 + + + + + + Dated 05/05/98 + + IBM Confidential + + event will MSL be required to accept a price for partially completed Product that is lower than the completed Product price multiplied by the "percentage of Product completion". Such a percentage shall equal [*] times a fraction, the numerator of which is the cost of [*] within, and the cost of [*] and [*] expended on, such partially completed Products to the date of termination, and the denominator of which is equal to the [*] cost, and [*] and [*] cost of the Product if completed, all as determined by MSL in good faith and subject to verification and agreement by IBM. In no event will IBM be required to pay more for a partially completed Product than the price for a completed Product. + + [*] + + b) The price for Parts, whether in inventory or on order to meet IBM's forecasted requirements, shall be an amount equal to MSL's cost for such [*] as provided in Apppendix I of the Statement of Work. This shall not be applicable to Parts that are cancellable or otherwise transferable to IBM. + +SECTION 6.0 PAYMENT + +6.1 IBM to MSL + + a) MSL will invoice IBM [*] for all completed Products, after shipping transactions have been processed by MSL. MSL will invoice IBM [*] for all Integration work after shipping transactions have been processed by MSL. For all other Services, MSL will invoice IBM [*]. IBM will pay MSL within [*] Days after receipt of an acceptable invoice. + + b) MSL may offset any amount owed IBM by MSL against any amounts owed MSL by IBM upon written approval of IBM, provided any such debts have been generated under this Agreement. + +6.2 MSL to IBM + + a) MSL will pay IBM within [*] Days of receipt of an acceptable invoice from IBM. + + IBM may offset any amounts owed IBM by MSL against any amounts owed MSL by IBM under this Agreement, upon written approval of MSL provided any such debts have been generated under this Agreement + + b) Invoices must reference this Agreement by name, date, and Purchase Order number. Invoices will be sent to the addresses below: + + IBM Corporation Accounts Payable 1701 North Street + +Page 9 Dated 05/05/98 + + IBM Confidential + + P.O. Box 8098 Endicott, NY. 13760 + + A copy of the invoice will be sent to: + + IBM Corporation 8501 IBM Drive Charlotte, N.C. 28262-8563 Attn: MSL Project Office + + c) Upon IBM request, MSL will send originals and copies of invoices to other IBM locations. + + d) Any amounts owed IBM should be sent to: + + IBM 8501 IBM Drive Charlotte, NC 28262 Attn: MSL Project Office + +6.3 Both parties agree to financially contribute to those activities defined in Attachment 4: Expense Participation and at the stated contribution, unless otherwise agreed to in writing. + +SECTION 7.0 AUDIT + + + + + + a) IBM may perform process audits at MSL's or an MSL Related Company's Work Center or MSL's subcontractors' facilities to assure that identified IBM specifications have been complied with. IBM shall advise MSL [*] Days in advance of the scope and method by which such audits are to be conducted. MSL will be given the opportunity to comment upon these procedures prior to the audit taking place. For all identified IBM specifications, MSL will maintain and produce for IBM process documentation for use in all audits performed by IBM and will have current copies of said documentation available prior to the start of an audit. + + b) Upon completion of all audits performed, IBM will provide written documentation to MSL of the audit results in the form of an audit report. MSL will be required to respond in writing to IBM on the completion status of all actions and or requirements identified in the audit report within [*] Days of receipt of the audit report. + +SECTION 8.0 PURCHASE OF ASSETS + + a) On the Effective Date, MSL shall purchase all tangible assets listed in Attachment 3: Asset List, Part 1A and non-capitalized hand tools used in the manufacture of Products for [*] U.S. dollars [*]. Within [*] days of the Effective Date, IBM shall give the tangible assets listed in Attachment 3: Asset List, Part 1B to MSL. On the Effective Date, MSL shall purchase + +Page 10 Dated 05/05/98 + + IBM Confidential + + the assets listed in Attachment 3: Asset List, Part 2 for the amount stated on the bill of sale for such assets and pay for such assets in full by or before December 1, 1998 (the "Payment Date"). + + b) The Parties acknowledge that the assets listed in Attachment 3: Asset List, are a pro forma listing only and that within 10 (ten) days of the Effective Date, both parties agree to perform a physical audit of these assets listed and in IBM's possession as of the Effective date to ascertain that the assets located during that physical audit are verified. Within 20 (twenty) days after the Effective Date, IBM will prepare a listing of the assets in Attachment 3: Asset List, Part 1B to verify IBM's net book value of the assets plus [*] for each non-capitalized printer. This listing shall contain the price for each asset listed separately. MSL shall notify IBM within 30 (thirty) days of the Effective Date if it does not wish to receive all of the available tangible assets in Attachment 3: Asset List, Part 1B by notifying IBM in writing of the types of equipment it does not wish to receive. IBM shall choose which equipment MSL will receive based on MSL's chosen equipment type. The startup and investment expense defined in Attachment 4, Section 3, shall be reduced by IBM's net book value of the assets in Part 1B for the equipment accepted by MSL plus [*] U.S. dollars [*] for each non-capitalized printer. In any event, the physical audit for all assets shall result in a new listing for the assets contemplated hereunder which listing shall be substituted for the Attachment 3: Asset List that is attached to this Agreement at the Effective Date. The amount stated on the bill of sale of the assets listed in Part 2 shall reflect the results of a physical audit and obsolescence review. Such adjustments shall be subject to the mutual agreement of the Parties. + + c) If by the Payment Date, MSL fails to pay IBM in full for the assets listed in Attachment 3: Asset List, Part 2 at the price specified in b) above, IBM may offset the balance owed by MSL as provided in Section 6.2(a) above, and without MSL's further consent, until IBM has recovered such balance. + + d) MSL acknowledges that IBM has not made any representations or warranties with respect to the assets listed in Attachment 3: Asset List, except those expressly set forth in this Agreement, including, but not limited to the representation and warranty of title. All assets delivered to MSL pursuant to this section shall be provided on an 'AS IS' basis. NO OTHER WARRANTIES, WHETHER EXPRESSED OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR THE WARRANTY OF NON-INFRINGMENT ARE PROVIDED HEREUNDER. + + e) In the event of termination or expiration of this Agreement pursuant to Section 5.0 above, IBM shall have an option, which shall expire [*] days after such termination or expiration, to purchase from MSL, at a reasonable price agreeable to the Parties, all assets used by MSL to perform the manufacturing and fulfillment functions + +Page 11 + + + + + + Dated 05/05/98 + + IBM Confidential + + outlined in Attachment 1: Statement of Work, to the extent owned or transferable by MSL, and required by IBM to perform such functions. + + f) Assets purchased by MSL and listed in Attachment 3: Asset List, Part 2 are to be used solely in Products purchased by IBM pursuant to the Attachment 1: Statement of Work. + +SECTION 9.0 PERSONNEL + + a) Attachment 2 contains a list of the individuals employed by IBM at the date hereof in connection with this Agreement, including active employees and employees who are on leave of absence or sick leave (herein the "Employees"). + + b) MSL will make an unconditional employment offer to the Employees, listed in Attachment 2, to be effective on the Effective Date of this Agreement. The Employees who accept employment offers from MSL and who have begun their employment with MSL ("Transferred Employees") will be employed by MSL in accordance with the terms set forth below. IBM will terminate all Employees, listed in Attachment 2, at the Effective Date of this Agreement and IBM will be responsible for any and all employment related liabilities up to the Effective Date, including, but not limited to, vacation and sick time, workers compensation claims, variable compensation, and severance. + + c) MSL agrees that all Transferred Employees will be continuously employed by MSL for at least [*] after the Effective Date, except as otherwise provided herein, and will receive a total compensation package as identified in Attachment 2: Employee list and Benefits Information. Furthermore, with respect to the Transferred Employees, MSL shall grant, to the extent granted by IBM, credit for service with IBM prior to the Effective Date for purposes of participation and eligibility to participate under MSL's employee benefit plans and other policies and programs of MSL. + + d) Nothing in this Agreement shall operate in any way to limit or prevent MSL from terminating any Transferred Employee at any time for reasons of cause related to poor job performance or conditions of employment. + + e) If MSL suffers a substantially adverse change in its business, related to a reduction in IBM's Products requirements, including reductions of Products requirements due to migration to a competitive supplier, for the [*] from the Effective Date of this Agreement, MSL may terminate such number of Transferred Employees as it deems necessary. However, IBM shall only reimburse MSL for termination benefits paid to such Transferred Employees, which are substantially similar to IBM's then severance package, and provided that all MSL subcontractors and other MSL non management employees assigned to the US Work Center have been terminated prior to or along with the termination of the Transferred Employees. + +Page 12 Dated 05/05/98 + + IBM Confidential + + f) IBM agrees that, for a period of [*] years from the Effective Date of this Agreement, it will not in any way solicit for employment any Transferred Employees without the prior written consent of MSL; provided, however, that the foregoing will not restrict or prevent IBM from a) employing any such person who contacts IBM on his or her own initiative without any solicitation or encouragement from IBM or b) by using general employment advertising or communications or independent search firms, hiring any person who responds thereto, provided that IBM does not direct or encourage such independent search firms to solicit such Transferred Employees. + +SECTION 10.0 LEASE OF PREMISES + + The Lease of Premises Agreement is a separate agreement governing the lease of certain IBM buildings to MSL, the execution of which is a condition precedent to the effectiveness of this Agreement. + +SECTION 11.0 MANUFACTURING, FULFILLMENT, AND INTEGRATION + + Attachment 1 is the Statement of Work that outlines the manufacturing, fulfillment, and Integration requirements and responsibilities of both parties. + +SECTION 12.0 TRANSITION SERVICES + + + + + + Supplement 1 to the Statement of Work identifies the Transition Services that the Parties are to perform in accordance with the prices set forth therein and starting on the Effective Date of the Agreement. All Transition Services will expire December 31, 1998. + +SECTION 13.0 INTELLECTUAL AND INDUSTRIAL PROPERTY + +13.1 IBM assumes and will assume ownership and MSL assigns and will assign all intellectual and industrial property rights for hardware, software, design and documentation of all Products delivered under this Agreement + + IBM will also own and MSL will assign any invention made by MSL on Products, and on any invention related to IBM processes and systems that MSL makes while MSL uses those processes and systems in the performance of this Agreement provided that nothing herein shall restrict MSL's right to use such inventions in the performance of its obligations hereunder. MSL shall not use any proprietary processes for the assembly, subassembly and final tests, and quality testing of the Products subject to this Agreement unless otherwise agreed to by the Parties in writing. + +13.2 Confidential Information and Advertising + +Page 13 Dated 05/05/98 + + IBM Confidential + + a) IBM shall not receive confidential information from MSL under this Agreement. However, if it becomes necessary for IBM to give certain confidential information to MSL, it will be done so pursuant to the Agreement for Exchange of Confidential Information ("AECI") Number 4998S60076. + + b) All information considered confidential by IBM will be marked confidential by IBM prior to the exchange. If the confidential information is to be disclosed orally, IBM will promptly provide MSL with a written summary following the disclosure. In the event, the information is not marked confidential, it shall not be deemed confidential. + + c) Each time IBM wishes to disclose specific information to MSL, IBM will issue a supplement to the above referenced AECI. All requests to disclose confidential information must be approved by the Relationship Managers. During the term of this Agreement and upon the request of IBM, MSL shall return all confidential information immediately. + + d) Neither Party shall disclose the terms of this Agreement to any third Party, including debt or financing institutions, without the prior written consent of the other Party, which consent shall not be unreasonably withheld or delayed, except as required by law. Each Party shall provide the other with prior written notice of any such required disclosure. + + e) Neither Party shall make any public announcements regarding this Agreement or matters pertaining hereto, other than as may be expressly agreed upon in advance by the Parties in writing. + +13.3 Licenses + + a) Notwithstanding anything to the contrary in this Agreement, nothing in this Agreement grants or may grant MSL any rights or licenses in any preexisting intellectual property of IBM except that IBM grants MSL a royalty-free license to use the confidential information disclosed in connection with this Agreement under the AECI referenced in 13.2 necessary to manufacture Products solely for IBM. Any other license to IBM's intellectual property must be accomplished through a separate written agreement signed by IBM. + + b) As of the Effective Date, to the best of IBM's knowledge, IBM has licenses and permits and other governmental authorizations and approvals required for IBM's use of the assets in Attachment 3: Asset List, except where the failure to have such licenses and permits would not have a material adverse effect on IBM's ability to use or operate the assets. All such licenses and permits held by IBM which are material to the operation of the assets are valid and in full force and effect and there are not pending or, to the knowledge of IBM, threatened in a writing to IBM, any proceedings which could result in the termination or impairment of any such license or permit which termination or impairment would materially interfere with the operation or use of the assets as + +Page 14 Dated 05/05/98 + + IBM Confidential + + presently operated or used by IBM. The Parties acknowledge that MSL may be required to seek and that IBM is not responsible for obtaining for MSL regulatory or other permitted transfers of, or obtain through separate application for itself, any applicable licenses and permits, including environmental licenses and permits, + + + + + + which are required for MSL's operation or perfection ownership of the assets. + +SECTION 14.0 WARRANTIES + +14.1 Representations and Warranties of IBM + + IBM represents and warrants to MSL that the statements contained in this Section 14.1 are correct and complete, and the following representations and warranties shall be deemed to have been made again on and as of the Effective Date. The effectiveness of this Agreement shall be subject to the condition that IBM deliver to MSL a certificate on and as of the Effective Date that such representations and warranties are correct and complete as of such date. + + "To the best of IBM's knowledge" shall be defined as the information available to IBM Charlotte Management after due inquiry as of the Effective Date. A materially adverse effect shall be defined as an outcome where MSL is unable to acquire appropriate title for assets to be purchased under this Agreement. + + a) Organization of IBM + + IBM is a New York corporation, duly organized, validly existing, and in good standing under the laws of New York. IBM has all corporate powers and all material governmental licenses, authorizations, permits, consents, and approvals required to carry on its business as now conducted. + + b) Authorization of Transaction + + IBM has the power and authority (including full corporate power and authority) to execute and deliver this Agreement and all other documents contemplated hereby and to perform its obligations hereunder. All corporate and other actions or proceedings to be taken by or on the part of IBM to authorize and permit the execution and delivery by IBM of this Agreement and the instruments required to be executed and delivered by IBM pursuant hereto, the performance by IBM of its obligations hereunder, and the consummation by IBM of the transactions contemplated herein, have been duly and properly taken. This Agreement has been duly executed and delivered by IBM and constitutes the legal, valid and binding obligation of IBM, enforceable in accordance with its terms and conditions. + + c) Noncontravention + + Neither the execution and the delivery of this Agreement, nor the consummation of the transactions contemplated hereby do or will + +Page 15 Dated 05/05/98 + + IBM Confidential + + i) conflict with or result in a breach of any provision of the certificate of incorporation or bylaws of IBM, or + + ii) result in or give rise to the imposition of any lien upon the assets listed in Attachment 3: Asset List that would have a materially adverse effect on the assets listed therein, or + + iii) violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling charge or other restriction of any Governmental Authority to which IBM is subject. + + Except for the required filings under the Hart-Scott-Rodino Act, IBM is not required by applicable law or other obligation to give any notice to, make any filing with, or obtain any authorization, consent, or approval of any Governmental Authority or other person in order for the Parties to consummate the transactions contemplated by this Agreement. + +d) Assets Used by IBM to Conduct Business + + The assets listed in Attachment 3: Asset List, Part 1 and in Attachment 5: Equipment and Program Loan List are the tangible assets used by IBM up until the Effective Date for the operation of the business to be conducted by MSL on and after the Effective Date and pursuant to Attachment 1: Statement of Work. + +e) Inventory + + The assets listed in Attachment 3: Asset Listing, Part 2 and in Attachment 5: Equipment and Program Loan List are the tangible assets used by IBM up until the Effective Date to build to the IBM specification and designs to be used by MSL in fulfilling its obligations on and after the Effective Date and pursuant to Attachment 1: Statement of Work. + +f) Title to Assets + + IBM has good and marketable title to all assets listed on Attachment 3: Asset Listing, free and clear of any liens or encumbrances and MSL shall acquire a bill of sale transferring good and marketable title to said + + + + + + assets, free of liens and encumbrances. However, in the event MSL discovers any materially adverse lien or encumbrance that prevents MSL from using or operating the assets, within sixty (60) days after such notice to IBM, IBM shall clear all such materially adverse lien or encumbrances. If IBM is unable to clear all such materially adverse liens or encumbrances within sixty (60) days after notice, IBM shall complete reasonable actions necessary, to provide MSL with materially unencumbered enjoyment of the assets. + +g) Employees + + To the best knowledge of the Charlotte Program Director of General Hardware and Communications, Procurement, no employee or group of employees has any plans to refuse to accept any offer of employment from MSL made in compliance with this Agreement. + +Page 16 Dated 05/05/98 + + IBM Confidential + +14.2 Representations and Warranties of MSL + + MSL represents and warrants to IBM that the statements contained in this Section 14.2 are correct and complete, and the following representations and warranties shall be deemed to have been made again on and as of the Effective Date. The effectiveness of this Agreement shall be subject to the condition that IBM deliver to MSL a certificate on and as of the Effective Date that such representations and warranties are correct and complete as of such date. + + a) Organization of MSL + + MSL is a California corporation, duly organized, validly existing, and in good standing under the laws of California. MSL has all corporate powers and all material governmental licenses, authorizations, permits, consents, and approvals required to carry on its business as now conducted. + + b) Authorization of Transaction + + MSL has the power and authority (including full corporate power and authority) to execute and deliver this Agreement and all other documents contemplated hereby and to perform its obligations hereunder. All corporate and other actions or proceedings to be taken by or on the part of MSL to authorize and permit the execution and delivery by MSL of this Agreement and the instruments required to be executed and delivered by MSL pursuant hereto, the performance by MSL of its obligations hereunder, and the consummation by MSL of the transactions contemplated here, have been duly and properly taken. This Agreement has been duly executed and delivered by MSL and constitutes the legal, valid and binding obligation of MSL, enforceable in accordance with its terms and conditions. + + c) Noncontravention + + Neither the execution and the delivery of this Agreement, nor the consummation of the transactions contemplated hereby do or will: + + i) conflict with or result in a breach of any provision of the certificate of incorporation or bylaws of MSL or MSL Related Companies, or + + ii) violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling charge or other restriction of any Governmental Authority to which MSL or MSL Related Companies is subject. + + Except for the required filings under the Hart-Scott-Rodino Act, neither MSL nor any of its subsidiaries is required by applicable law or other obligation to give any notice to, make any filing with, or obtain any authorization, consent, or approval of any Governmental Authority or other person in order for the Parties to consummate the transactions contemplated by this Agreement. + + d) I/T Solution Necessary to Conduct Business + + To the best of MSL's Vice President, Information Technology's knowledge and in reliance on IBM's representations in Section 14.1(d), MSL has an appropriate I/T + +Page 17 Dated 05/05/98 + + IBM Confidential + + Solution necessary to use the assets used by IBM as stated in Section 14.1(d) to fulfill its obligations under Attachment 1: Statement of Work. + +SECTION 15.0 INDEMNIFICATION AND LIMITATION OF LIABILITY + + + + + +15.1 Scope of MSL's Indemnity + + MSL agrees to protect, defend, hold harmless, and indemnify IBM from and against any and all claims, damages, liabilities, losses and expenses, arising out of the following, whether alleged or actual: + + a) infringement by MSL in rendering performance under this Agreement or any Product Attachments or by any MSL procured Parts, processes, designs, deliverables or any preexisting material contributed by MSL from which any Products are prepared, of any patent, trademark, trade name, copyright, mask work right or trade secret valid anywhere in the world, except that MSL shall have no indemnity obligation for any claim alleging infringement of any trademark including any trade name, product name or similar right resulting from the use of any name or mark selected by IBM; + + b) failure of MSL to comply with any governmental law, statute, ordinance, administrative order, rule or regulation relating to the manner of or carrying on of MSL's operations and/or parts and processes used in Products, + + c) failure of MSL to perform MSL's warranty described in the Statement of Work and support obligations or similar services as set forth in any Product Attachment issued hereunder. + + Notwithstanding the foregoing, MSL shall have no obligation to indemnify IBM under this Section 15.1 to the extent that such third party claim (i) is caused by MSL's material compliance with a written specification provided by an authorized representative of IBM or (ii) results from a defective design of a Product, to the extent that such defect is the result of the written specifications or designs provided by an authorized representative at IBM. + +15.2 Payment and Cooperation + + a) MSL shall pay all damages, settlements, expenses and costs, including court costs and attorneys' fees, reasonably incurred by IBM, arising out of the matters set forth in Section 15.1 provided that such payment shall be contingent on: + + i) prompt notice by IBM to MSL in writing of such claim to enable MSL to defend; + + ii) cooperation by IBM and MSL in the defense thereof; and + + iii) IBM allowing MSL to control the defense or settlement of the claim, provided that IBM may at its option participate in the proceeding with its own counsel and at its own expense, but MSL shall retain control of the defense of the claim. + +Page 18 Dated 05/05/98 + + IBM Confidential + + b) In the event that any occurrence within the scope of the indemnity set forth in 15.1 above is alleged or proved, MSL may, at its sole discretion and at its own expense in order to remedy any such infringement for the future, procure any necessary license rights, or make use of non-infringing designs, processes, Parts, deliverables or other materials, so long as such substitute items do not result in the Products failing to comply with the specifications, requirements, and warranties set forth in this Agreement. + +15.3 Limitations of Liability + + a) Neither Party will be liable to the other for lost profits, consequential, punitive, or incidental damages, even if informed of the possibility that such damages may be incurred. + + b) The total liability for either Party, regardless of the form of action, whether contract or tort, is limited to three percent (3%) of the value of the bill of materials contained in the Products delivered to IBM and IBM Customers by MSL in the period beginning with the Effective Date of the Agreement through the resolution of the action. . + +SECTION 16.0 GENERAL + +16.1 Product, Technology and Process Changes + + a) If IBM elects to amend the specification or the process for manufacturing Products, IBM will notify MSL of the changes in writing. MSL will promptly inform IBM of any changes to Delivery Dates, lead times, process changes, Parts requirements, Parts obsolescence, scrap, rework and any requested price changes that will result from the required changes. If IBM then elects to proceed in accordance with the changes proposed by MSL, IBM and MSL will agree to a plan to address the issues described in the proceeding sentence. MSL will thereafter implement the agreed to changes. + + + + + + b) MSL will not implement any change to its specifications, technology, materials or process that may affect form, fit, or function of characteristics of Products without IBM's prior written consent. IBM will make a reasonable effort to accommodate MSL's request for change; however, IBM is not obligated to accept any changes proposed by MSL. + + c) Once a plan described in a. above has been agreed to, MSL will not start any new units of Product which do not incorporate the agreed change. + +16.2 Assignment + + Neither Party may assign, transfer or subcontract any rights or duties under this Agreement without prior written approval by the other Party. MSL may assign or subcontract all or any part of this Agreement to any MSL Related Company with IBM's prior written consent which shall not be unreasonably withheld or delayed. MSL may not assign or transfer any rights or duties under this Agreement without prior written approval by IBM. MSL shall + +Page 19 Dated 05/05/98 + + IBM Confidential + + provide IBM with all relevant details prior to implementing any change to its use of subcontractors performing work relating to IBM's Purchase Orders. + +16.3 Gratuities + + Each Party agrees that it shall maintain and enforce a corporate policy designed to ensure that its employees, agents, or representatives will not offer any gratuity to the other Party's employees, agents, or representatives for any reason, including a view towards securing favorable treatment from such other Party. + +16.4 Compliance with Law + + In the performance of this Agreement and related Purchase Orders the Parties shall comply with the laws of the United States unless otherwise specified, including but not limited to, those affecting price, production, purchase, sale, use and export of Products, environmental and labor laws. + +16.5 Sale or Merger + + During the term of this Agreement, if MSL decides to sell a substantial portion of its assets or operations outside the ordinary course of its business, or to merge or transfer ownership of MSL to a third Party, MSL will immediately notify IBM. MSL warrants that any new company resulting from the sale or merger of MSL will accept and assume full responsibility for the performance of this Agreement. + +16.6 Trademark + + Nothing in this Agreement gives either Party the right to use the other Party's name, trademark, or logo except where necessary in the ordinary course to perform this Agreement or where otherwise authorized in writing by the other Party in conjunction with this Agreement. + +16.7 Assignees and Visits + + If IBM determines that there is a business need for employees of IBM to reside on the premises of MSL Work Centers. IBM will request MSL's approval, and will request that MSL provide suitable working office space and associated utilities for employees of IBM on the premises of MSL Work Centers. MSL's approval and MSL's provision of office space and utilities shall not be unreasonably withheld. MSL will also allow business visits by employees of IBM and IBM customers to facilities of MSL. The details of such visits will be agreed to between the Parties on a case-by-case basis. Where business visits are exceptional and primarily for the benefit of MSL, they will be paid for by MSL. + +16.8 Failure to Enforce + +Page 20 Dated 05/05/98 + + IBM Confidential + + The failure of either Party to enforce at any time or for any period of time the provisions of this Agreement shall not be construed to be a waiver of such provisions or of the right of such Party to enforce each and every provision in the future. + +16.9 Governing Law + + This Agreement and the performance of transactions under this Agreement shall be governed by the substantive laws of the state of New York. The parties expressly waive any right to a jury trail regarding disputes + + + + + + related to this Agreement. Any legal or other action related to a breach of this Agreement must be commenced no later than [*] years from the date of the breach in a court sited within the State of New York. + +16.10 Severability + + If any of the provisions of this Agreement shall be held by a court or other tribunal of competent jurisdiction to be unenforceable, the remaining portions of this Agreement shall remain in full force and effect. + +16.11 Notices + + Any notice which any Party desires or is obligated to give to the other shall be given in writing or by telecopy and sent to the appropriate address. Notices required under this section must be addressed to the address shown below. All other notices shall be sent to the address specified in the appropriate Product Attachment or, if none is specified, to the address shown below or to such other address as the Party to receive the notice may have last designated in writing. + + The addresses for notices shall be: + + IBM MSL 8501 IBM Drive 200 Baker Avenue Charlotte, NC 28262 Concord, MA 01742 Attn: MSL Project Office Attn: General Counsel + + Telephone: 704-594-1964 Telephone: 978-287-5630 Facsimile: 704-594-4108 Facsimile: 978-287-5635 + + Either Party may change its address for this section by giving written notice to the other Party. The notifying Party must receive a confirmation within seven (7) Days of notification. + +16.12 Agency + +Page 21 Dated 05/05/98 + + IBM Confidential + + This Agreement does not create either a principal to agent, employer to employee, partnership, joint venture, or any other relationship except that of independent contractors between MSL and IBM. + +16.13 Headings + + Headings to paragraphs and sections of this Agreement are for the convenience of the Parties only. They do not form a part of this Agreement and shall not in any way affect its interpretation. + +16.14 Records + + The Parties agree to keep complete and accurate records related to the manufacture of Products for a period of five (5) years after the termination or expiration of the Product Attachment to which they relate. + +16.15 Prohibited Suppliers + + IBM may provide MSL a lists of suppliers with whom MSL is prohibited from conducting any business in connection with this Agreement for the purposes of ensuring that IBM comply with the requirements of any governing laws. MSL agrees to abide by the reasonable requirements of these lists except to the extend that such compliance itself would constitute a violation of the laws of the United States or of any state or local government. + +16.16 Entire Agreement + + The provisions of this Agreement, including all Appendices, Supplements, Attachments, and Purchase Orders, and all documents expressly incorporated herein by reference, constitute the entire agreement between the Parties and supersede all prior intentions, proposals, understandings, and communications. + +16.17 Force Majeure + + Neither Party shall be liable to the other for its failure to perform any of its obligations hereunder during any period in which such performance is delayed by circumstances or events that were not foreseeable, or if foreseeable could not have been reasonably avoided including, but not limited to, fire, flood, war, embargo, strike, riot, prolonged scarcity of necessary raw materials, inability to secure transportation or the intervention of any governmental authority, provided that the Party suffering such delay immediately notifies the other Party of the delay. If such delay shall continue for more than [*] Days, the Party injured by the inability of the other to perform shall have the right upon written notice to either a) terminate this Agreement as set forth in Section 5.1 c or b) treat this Agreement as suspended during the delay and reduce any commitment in proportion to the duration of the delay. + + + + + +Page 22 Dated 05/05/98 + + IBM Confidential + +16.18 No Third Party Beneficiaries + + This Agreement shall not confer any rights or remedies upon any person other than the Parties and their respective successors or permitted assigns + +16.19 Expiration of Representations and Warranties + + All representations and warranties made by the Parties in this Agreement or in any schedule, document, certificate or other instrument delivered by or on behalf of the Parties pursuant to this Agreement shall expire on the [*] anniversary of the Effective Date. + +16.20 Remedies Cumulative + + The remedies set forth in this Agreement are cumulative and are in addition to any other remedies allowed at law or in equity. Resort to one form of remedy shall not constitute a waiver of alternate remedies. + +16.21 Excused Exceptions to MSL Performance + + a) Notwithstanding anything herein to the contrary, MSL may, upon written notice to IBM, delay or suspend performance to supply any Products or Services to IBM (i) if MSL has received notice from a third party, or based on the reasonable advice of legal counsel reasonably believes, that the supply of such Products or Services would subject MSL to liability for infringement or liability related to a defective design to a Product caused by MSL's material compliance with a written specification provided by an authorized representative of IBM or (ii) if IBM, pursuant to the Equipment Program and Loan Agreement, requires MSL to return a Loaned Item (as defined in said Equipment Program and Loan Agreement) which MSL reasonably believes is necessary to supply such Products or Services. MSL's decision not to supply Products or Services as provided in this Section 16.21 shall not constitute a breach or other violation of this Agreement. + + b) IBM may, at its sole discretion and at its own expense in order to remedy any such suspensions listed in a) above, procure any necessary license rights, or make use of non-infringing designs, processes, Parts, deliverables, equipment or other materials, so long as such substitute items do not result in the Products failing to comply with the specifications, requirements, and warranties set forth in this Agreement. + +Page 23 Dated 05/05/98 + + IBM Confidential + + [The remainder of this page intentionally left blank] + +Page 24 Dated 05/05/98 + + Amendment 001 to Outsourcing Agreement between IBM and MSL + +This document amends Attachment 4 to the Outsourcing Base Agreement between International Business Machines Corporation and Manufacturer's Services Western U.S. Operations, Inc. The effective date of this Amendment is the date executed by both parties. + +The parties agree to make the following change: + +Delete Item 3 a) of Attachment 4 to the Outsourcing Base Agreement in its entirety and replace it with the following: + +a) IBM shall pay MSL up to [*] U.S. dollars [*] for 1998 start up and investment expenses related to the US Work Center. MSL may submit invoices to IBM commencing on the Effective Date of the Agreement through March 31, 1999 for the following actual startup and investment expenses for the US Work Center: I/T application set up including related travel and consultant fees, hardware, software including application software and licenses, network infrastructure, line servers and user workstations and training. MSL shall, if requested by IBM, provide a projection of expenses by quarter. + +All other terms and conditions of the Outsourcing Base Agreement and it's attachments shall remain in full force and effect. + +IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective authorized representatives. + + + + + + ACCEPTED AND AGREED TO: ACCEPTED AND AGREED TO: + + International Business Manufacturer's Services Machines Corp. Western U.S. Operations, Inc + + By: /s/ Roy B. Covington III By: /s/ Kevin C. Melia ------------------------------ ---------------------------- + + Roy B. Covington III Kevin C. Melia ------------------------------ ---------------------------- Print Name Print Name + + Industry Solutions Production President, CEO ------------------------------ ---------------------------- Title Procurement Manager Title + + 6/15/98 6/15/98 ------------------------------ ---------------------------- Date Date + + Amendment 002 to Outsourcing Agreement between IBM and MSL + +The purpose of this document is to amend the Outsourcing Agreement between International Business Machines Corporation ("IBM") and Manufacturer's Services Western U.S. Operations, Incorporated ("MSL"), dated 05/05/98 ("Agreement"). The effective date of this Amendment is the date executed by authorized representatives of both parties. + +The parties agree to make the following changes: + +1. Delete Section 24.2(d) in Attachment 1, Statement of Work of the Agreement in its entirety and replace with the following: + +"d) MSL SLA (Service Level Agreement) requirements for local or remote systems availability and performance will be negotiated in compliance with IBM's service level expectation for a manufacturing process on or before October 31, 1998." + +2. Delete Section 3 (vii) in Supplement 1 Transition Services, Section II- Sale of IBM Services, Section 4.0 IBM Responsibilities in its entirety and replace with the following: + +"vii) create a net sum invoice to MSL weekly that represents monies owed to MSL by IBM and monies owed IBM by MSL. Lease payments will not be netted with this invoice." + +All other terms and conditions of the Agreement and its attachments shall remain in full force and effect. + +IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective authorized representatives. + + ACCEPTED AND AGREED TO: ACCEPTED AND AGREED TO: + + By: International Business By: Manufacturer's Services Machines Corp. Western U.S. Operations, Inc + + /s/ Roy B. Covington III /s/ Dale Johnson ------------------------------ ---------------------------- + + Roy B. Covington III Dale R. Johnson ------------------------------ ---------------------------- Print Name Print Name + + Industry Solutions Production Procurement Exec. Vice President ------------------------------ ---------------------------- Title Title + + 9/23/98 9/23/98 ------------------------------ ---------------------------- Date Date + + Amendment 003 to Outsourcing Agreement between IBM and MSL + +The purpose of this document is to amend the Outsourcing Agreement between International Business Machines Corporation ("IBM") and Manufacture's Services Western U.S. Operations, Incorporated ("MSL"), dated May 5, 1998 ("Agreement"). Once signed by both parties the effective date of this amendment is January 1, 1999. + +The parties agree to make the following changes: + +1. Delete paragraph 2 in Supplement 1 to Attachment 1, Statement of Work, to the Agreement in its entirety and replace with the following: + +"This is a Supplement to Attachment 1, Statement of Work ("SOW"), and outlines the Transition Services that will be performed by both Parties from the Effective Date of the Agreement through February 25, 1999." + + + + + +2. Delete Section 2.0 Term, SECTION I - Wedge Products in Supplement I to Attachment 1. Statement of Work, to the Agreement in its entirety and replace with the following: + +The following replaces Section 2.0 of the SOW in its entirety. + +This Supplement and its Attachments shall become effective upon execution of the SOW and expire February 26, 1999 unless terminated as provided in Section 5.0 of the Base Agreement. This Supplement may be extended for periods of three (3) months under mutually agreed to terms and conditions. Extensions will be mutually agreed to in writing by both parties. + +3. Delete Section 2.0 Term. SECTION II - Sale of IBM Services in Supplement 1 to Attachment 1, Statement of Work, to the Agreement in its entirety and replace with the following: + +"The following replaces Section 2.0 of the SOW in its entirety. + +This Supplement and its Attachments shall become effective upon execution of the SOW and expire February 26, 1999 unless terminated as provided in Section 5.0 of the Base Agreement. This Supplement may be extended for periods of three (3) months under mutually agreed to terms and conditions. Extensions must be mutually agreed to in writing by both parties. + +4. Delete paragraph 2, Section 24.0 Information Technology Services ("I/T Services"), Section II - Sale of IBM Services in Supplement 1 to Attachment 1, Statement of Work, to the Agreement in its entirety and replace it with the following: + +"Within sixty (60) Days after the Effective Date of this Agreement, IBM and MSL must develop a mutually acceptable written migration plan to migrate to an MSL I/T solution for the U.S. Work Center. The migration plan will include the systems and applications identified on the attached Application Matrix below. All migration is to be completed by February 26, 1999. Any changes or upgrades to the mutually acceptable written migration plan shall be negotiated separately." + +5. Delete Scope of Services: b), Section 24.0 Information Technologies Services ("I/T Services"), SECTION II - Sale of IBM Services in Supplement 1 to Attachment 1, Statement of Work, to the Agreement in its entirety and replace it with the following: + +"b) Any extension of the I/T Services beyond the February 26, 1999 date, due to an MSL delay, will be priced at IBM's then prevailing commercial rates." + + Amendment 003 to Outsourcing Agreement between IBM and MSL + +6. In addition to the above IBM and MSL agree to the following: + +a) Negotiate in good faith an adjustment to the payment amount stated in Section 7.0 Price, SECTION II--Sale of IBM Services in Supplement 1 to Attachment 1, Statement of Work, to the Agreement on or before January 15, 1999. At this time, it is as follows, + +"Commencing on the Effective Date of the Agreement through December 31, 1998, IBM will not charge MSL for the services provided under Transition Services Section II--Sale of IBM Services. During any extension, due to any MSL delay, of Transition Services beyond December 31, 1998, MSL's payment to IBM shall be as mutually agreed to in writing by both parties and shall be [*] dollars per month." + +b) Amend the Application Matrix of SECTION II--Sale of IBM Services in Supplement 1 to Attachment 1, Statement of Work, to the Agreement on or before January 15, 1999. + +All other terms and conditions of the IBM/MSL Outsourcing Agreement, its attachments, and amendments shall remain in force and effect. + +IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective authorized representatives. + + ACCEPTED AND AGREED TO: ACCEPTED AND AGREED TO: + + International Business Manufacturer's Services Machines Corp. Western U.S. Operations, Inc. + + By: /s/ Roy B. Covington III By: /s/ Dale Johnson ------------------------------- -------------------------------- + + Roy B. Covington III Dale R. Johnson ------------------------------- -------------------------------- Print Name Print Name + + Industry Solutions Production Proc Mgr Exec. V.P. ------------------------------- -------------------------------- Title Title + + January 12, 1999 January 12, 1999 ------------------------------- -------------------------------- Date Date + + + + + + Supplement I Transition Services (Amendment 003) + +------------------------------------------------------------------------------------------------------------------ Application Matrix ------------------------------------------------------------------------------------------------------------------ Application Name Description MSL Action ------------------------------------------------------------------------------------------------------------------ + + ------------------------------------------------------------------------------------------------------------------ AAS Corp Order Entry System Cont to Use via online access ------------------------------------------------------------------------------------------------------------------ Alternate Channel Planning Lotus Spreadsheets Cont to Use ------------------------------------------------------------------------------------------------------------------ ASPECT Eng for Technology Products N/A No longer ------------------------------------------------------------------------------------------------------------------ ATC EMLS transmission to Ger. Replace ------------------------------------------------------------------------------------------------------------------ Bwacs Box WAC Cost Application Replace ------------------------------------------------------------------------------------------------------------------ CADAM CAD Drawings Replace ------------------------------------------------------------------------------------------------------------------ Carrier Direct WT billing data & Mcs ships for Costs Replace ------------------------------------------------------------------------------------------------------------------ CATIA CAD Application MSL to use external license ------------------------------------------------------------------------------------------------------------------ Claim Ship Final Mach claims for Acct period Replace ------------------------------------------------------------------------------------------------------------------ COATS & Bridges COATS is corp bridges are local Replace ------------------------------------------------------------------------------------------------------------------ COLTS Purchasing Contracts Replace ------------------------------------------------------------------------------------------------------------------ Comp Trace Shell Plant Control Shell Replace ------------------------------------------------------------------------------------------------------------------ Conveyor Shell Plant Control Shell N/A No longer used ------------------------------------------------------------------------------------------------------------------ CPOPS Non Production Procurement Replace ------------------------------------------------------------------------------------------------------------------ CPQA CLT Product Quality Assurance Replace ------------------------------------------------------------------------------------------------------------------ CPS Common Purchasing Sys Replace ------------------------------------------------------------------------------------------------------------------ CPSLOCAL Common Purchasing Sys - Local Replace ------------------------------------------------------------------------------------------------------------------ CPS/CAPS Bridges CPOPS orders for RTP nightly Replace ------------------------------------------------------------------------------------------------------------------ DAE Distributed Application Environment Replace ------------------------------------------------------------------------------------------------------------------ DDB Boulder WT shipments Online Access ------------------------------------------------------------------------------------------------------------------ DDYS Distribution System Replace ------------------------------------------------------------------------------------------------------------------ DPRSBOX Development/Production Records Sys Replace w/DPRS Receiver ------------------------------------------------------------------------------------------------------------------ EMLS Demands Replace w/OEMLS interface ------------------------------------------------------------------------------------------------------------------ EMLS/EPRO Bridges EMLSBX for the Box plant Replace ------------------------------------------------------------------------------------------------------------------ EOSE Enterprise Order/Scheduling & Excc Interface ------------------------------------------------------------------------------------------------------------------ EPPS EXPRS Enterprise Prod Planning (feature planning) Replace ------------------------------------------------------------------------------------------------------------------ ERE Engineering Documentation Replace with EGLNET ------------------------------------------------------------------------------------------------------------------ ESDP Enterprise Supply & Demand Planning Interface ------------------------------------------------------------------------------------------------------------------ Financial MES MES Billing System Interface ------------------------------------------------------------------------------------------------------------------ Fourth Element Overhead Application Replace ------------------------------------------------------------------------------------------------------------------ FDR Financial Data Repository Interface ------------------------------------------------------------------------------------------------------------------ FQA Field Quality Assurance Replace ------------------------------------------------------------------------------------------------------------------ Gems Corp Order System Interface ------------------------------------------------------------------------------------------------------------------ Gems Billing Bridge Corp Order System Interface ------------------------------------------------------------------------------------------------------------------ Gems MPI Warranty Tracking Interface ------------------------------------------------------------------------------------------------------------------ ICS Inventory Control System N/A no longer used ------------------------------------------------------------------------------------------------------------------ IDS Code A system orders Replace ------------------------------------------------------------------------------------------------------------------ IPBILL Financial Billing System Replace ------------------------------------------------------------------------------------------------------------------ IPLS Corporate Interplant System Interface via EDI ------------------------------------------------------------------------------------------------------------------ IPOPS Interplant Parts Order Process Replace ------------------------------------------------------------------------------------------------------------------ L718 Trx Interface Pastes Serial # info into MCCS L718 scrn Replace + + + + + +------------------------------------------------------------------------------------------------------------------ MAC Mfg Auto Control Sys...controls UWIPS Replace ------------------------------------------------------------------------------------------------------------------ Mach/Scl Costs to MCCS Replace ------------------------------------------------------------------------------------------------------------------ Maptools Batch load of ME/PC data to DPRS Replace ------------------------------------------------------------------------------------------------------------------ MAXI Mfg Inventory (Large parts) Interface ------------------------------------------------------------------------------------------------------------------ MCCS Material Cost & Control Sys Replace ------------------------------------------------------------------------------------------------------------------ MES EDI EDI Replace ------------------------------------------------------------------------------------------------------------------ MES FC MES Forecasting Replace ------------------------------------------------------------------------------------------------------------------ MES Global Labels MES shipping label reqts Replace ------------------------------------------------------------------------------------------------------------------ MES Local Explode MES BOMs Replace ------------------------------------------------------------------------------------------------------------------ MFG Rel Shell Plant control Inter to rel UWIPS Replace ------------------------------------------------------------------------------------------------------------------ MODLOAD Machine ships for ACCT period Replace ------------------------------------------------------------------------------------------------------------------ MPL History MPL History pgms in 'C' N/A no longer used ------------------------------------------------------------------------------------------------------------------ Office products LNOTES.VM.servers MSL IT Solution ------------------------------------------------------------------------------------------------------------------ OPAL Manual orders Replace ------------------------------------------------------------------------------------------------------------------ P12l's FFI's Manual Interface ------------------------------------------------------------------------------------------------------------------ + +1/14199 Page 13 of 14 + + Supplement I Transition Services (Amendment 003) + + ------------------------------------------------------------------------------------------------------------------ Packaging Label set Label Printing Replace ------------------------------------------------------------------------------------------------------------------ Pallet Action set Serial Numbers per Pallet N/A not needed ------------------------------------------------------------------------------------------------------------------ Pallet Label Printing Prints label for NHD cust room & WH N/A No longer used ------------------------------------------------------------------------------------------------------------------ Pallet Shell Plant Control Shell Replace ------------------------------------------------------------------------------------------------------------------ PCA M'burg PCA data Interface ------------------------------------------------------------------------------------------------------------------ PCS Mach Shipping system Replace ------------------------------------------------------------------------------------------------------------------ PEP Paperless Eng Proc shadow Replace ------------------------------------------------------------------------------------------------------------------ Pick/Pack Validation Validates all comps picked thru MAC Replace ------------------------------------------------------------------------------------------------------------------ PIE Sourcing Approval System Interface ------------------------------------------------------------------------------------------------------------------ Plant Control Plant Floor Control System Replace ------------------------------------------------------------------------------------------------------------------ Plant Works MPL conveyor interface N/A no longer used ------------------------------------------------------------------------------------------------------------------ PLUMP Plant Local Update Min corp I/F MFI manual interface ------------------------------------------------------------------------------------------------------------------ PPP Interplant sourcing Replace ------------------------------------------------------------------------------------------------------------------ PM Product Manager/DPRS Receiver Interface via DPRS Receiver ------------------------------------------------------------------------------------------------------------------ PRP Procurement Planning data Interface ------------------------------------------------------------------------------------------------------------------ PTS (ELITE) Product Tracking System EDI interface(data services gateway) ------------------------------------------------------------------------------------------------------------------ QSHIP Shipping System Replace ------------------------------------------------------------------------------------------------------------------ RMAT Lotus Returns Tool Replace ------------------------------------------------------------------------------------------------------------------ RNB/BNR Rec'd not Billed/Billed not Rec'd Replace ------------------------------------------------------------------------------------------------------------------ Ship Audit Mach ships and Costs to PCS deltas Replace ------------------------------------------------------------------------------------------------------------------ TAXIS Engineering Development Manual lnterface ------------------------------------------------------------------------------------------------------------------ TEP Tracking Engineering Processes Replace ------------------------------------------------------------------------------------------------------------------ Transfer Price Financial Billing System Interface ------------------------------------------------------------------------------------------------------------------ User Tools SAS, QMF, Smartsuite MSL IT solution ------------------------------------------------------------------------------------------------------------------ USPS US Postal Orders Interface ------------------------------------------------------------------------------------------------------------------ VMMCCS VM Matr'l Cost & Cntl Sys Replace ------------------------------------------------------------------------------------------------------------------ + + + + + +WSC Workstation Integration Database Replace ------------------------------------------------------------------------------------------------------------------ WTBILL WT Billing/Ships to Boulder Interface ------------------------------------------------------------------------------------------------------------------ + +1/14199 Page 14 of 14 + + Amendment 004 to Outsourcing Agreement between IBM and MSL + +The purpose of this document is to amend the IBM/MSL Outsourcing Agreement between International Business Machines Corporation ("IBM") and Manufacture's Services Western U.S. Operations. Incorporated ("MSL"), dated May 5, 1998 ("Agreement"). This amendment will be effective upon execution by IBM and MSL (each a Party and together the "Parties"). + +The Parties agree to amend the Agreement as follows: + +1. Add to the Agreement as Attachment H, Product Attachment - Complementary Products, to Attachment 1, Statement of Work to the Agreement. Attachment H will be referred to as a Complementary Products. Complementary Products ("CP") is an IBM business unit. + +2. Delete the list of appendices, attachments, and supplements and associated attachments as listed on page 1 of Attachment 1, Statement of Work to the Agreement in its entirety and replace it with the following list: + +a) Appendix 1 Markup b) Appendix 2 Requirements Accuracy c) Appendix 3 Performance Specifications d) Appendix 4 Inventory Supply Flexibility e) Appendix 5 EC Process Flow and EC Cycle Time f) Attachment A - Product Attachment for RS g) Attachment B - Product Attachment for GEPS h) Attachment C- Product Attachment for Finance Solutions i) Attachment D - Product Attachment for OEM Agreement A j) Attachment E - Product Attachment for OEM Agreement B k) Attachment F - Product Attachment for OEM Agreement C l) Attachment G - Product Attachment for Security Products m) Attachment H - Product Attachment for Complimentary Products ('CP") n) Supplement 1 - Transition Services and associated Attachments as listed; o) Exhibit 1 to Supplement 1 - Product Attachment for Wedge Products p) Exhibit 2 to Supplement 1 - Wedge Inventory List q) Agreement Exchange of Confidential Information Number 4998S60076 r) IBM Purchase Orders s) IBM Customer Orders t) Equipment and Program Loan Agreement + +3. Delete the first sentence in Section 7.1 in Attachment 1, Statement of Work, to the Agreement in its entirety and replace with the following: + + MSL's price to IBM for the fulfillment of Products for RS and MSL's price to IBM for the manufacturing and fulfillment of GEPS, Finance Products, and CP will be determined according to the following formula: + + Amendment 004 to Outsourcing Agreement between IBM and MSL + +4. Delete the table in Section 7.3 a) in Attachment 1, Statement of Work, to the Agreement in its entirety and replace with the following: + +SHIPMENT PROFIT RATE + + RS GEPS, Finance, and CP GEPS, Finance and CP Fulfillment A-Sourced Mfg. and Fulfillment + + On Time [*] [*] [*] + + 1 Day delinquent [*] [*] [*] + + 2 or more Days delinquent [*] [*] [*] + +5. Delete the table in 1. a) of Appendix 1: Mark Up to Attachment 1, Statement of Work of the Agreement in its entirety and replace it with the following: + + a) Value Add and Profit Rates are per the following table: + + VALUE ADD RATES PROFIT RATES (*) --------------- ---------------- + + + + + + + + RS Fulfillment (US & VALENCIA Work Centers [*] [*] + + GEPS, Finance, CP, and Security Mfg & Fulfillment A-Sourced Products [*] [*] MSL Manufactured Products [*] [*] + + Spares to Mechanicsburg and Amsterdam US Work Center [*] [*] + + Valencia Work Center [*] [*] (Through September 30, 1998) Valencia Work Center [*] [*] (After September 30, 1998) + + *Profit Rates are subject to the adjustments of Section 7.3, Attachment 1, SOW + + Amendment 004 to Outsourcing Agreement between IBM and MSL + +All other terms and conditions of the Agreement, its attachments, and amendments shall remain in full force and effect. + +IN WITNESS WHEREOF, the Parties hereto have caused this amendment to be executed by their respective authorized representatives. + + ACCEPTED AND AGREED TO: ACCEPTED AND AGREED TO: + + International Business Manufacturer's Services Machines Corp. Western U.S. Operations, Inc. + + By: /s/ Roy B. Covington III By: /s/ Dale R. Johnson ---------------------------- ---------------------------- + + Roy B. Covington III Dale R. Johnson ---------------------------- ---------------------------- Print Name Print Name + + Industry Solutions Production Procurement Manager EXEC. V.P ---------------------------- ---------------------------- Title Title + + 2/9/99 2/10/99 ---------------------------- ---------------------------- Date Date + + Amendment 005 to Outsourcing Agreement Between IBM and MSL + +The purpose of this document is to amend the IBM/MSL Outsourcing Agreement between International Business Machines Corporation ("IBM") and Manufacture's Services Western U.S. Operations, Incorporated ("MSL"), dated May 5, 1998 ("Agreement"). This amendment will be effective upon execution by IBM and MSL (each a Party and together the "Parties"). + +The Parties agree to amend the Agreement as follow: + +1. Delete "October 31, 1998" from item 1. of Amendment 002 to the Agreement and replace it with the following: + +"April 3, 1999" + +2. Delete "through February 26, 1999" from the end of sentence of item 1. in Amendment 003 to the Agreement and replace it with the following: + + "Up to October 31, 1999 for SECTION I - WEDGE PRODUCTS to Supplement 1, - Transition Services to Attachment 1,Statement of Work to the Agreement and through April 3, 1999 for SECTION II - SALE OF IBM SERVICES to Supplement 1, - Transition Service to Attachment 1, Statement of Work to the Agreement." + +3. Delete the item 2 in Amendment 003 in its entirety and replace it with the following: + +"The following replace Section 2.0 of the SOW in its entirety. + + "This Supplement and its Attachments shall become effective upon execution of the SOW and will terminate upon [*] Days notice by IBM TO MSL. Termination will be with the period from August 31, 1999 to October 31, 1999 unless terminated as provided in Section 5.0 of the Base Agreement. This Supplement may be extended under mutually agreed to terms and conditions. Extensions will be in writing and signed by both Parties." + +4. Delete the wording in Section 7.0 Price, SECTION I Supplement 1, Transition Services to Attachment 1 Statement of Work to the Agreement in its entirety and replace it with the following: + + + + + +"The following replaces Section 7.0 of the SOW in its entirety. + + Commencing on the Effective Date of this Agreement, IBM shall pay MSL [*] dollars [*] on the first Day of each calendar month through March + + 31, 1999. Beginning April 1, 1999 and through the end of the period defined in Section + + Amendment 005 to Outsourcing Agreement between IBM and MSL + + 2.0 Term SECTION I - WEDGE PRODUCTS in Supplement 1 to Attachment 1, Statement of Work to the Agreement, as amended in item 3 of Amendment 005. IBM shall pay MSL [*] dollars [*] on the first day of each calendar month. For any period of less than one month, the above amount shall be apportioned based on the number of Days in the Month." + +5. Delete "February 26, 1999" from item 3. of Amendment 003 to the Agreement and replace it with the following: + +"April 3, 1999" + +6. Delete the last two sentences from item 3. of Amendment 003 to the Agreement and replace them with the following: + +"This Supplement may be extended under mutually agreed to terms and conditions. Extensions will be in writing and signed by both parties." + +7. Delete "February 26, 1999" from item 4. of Amendment 003 to the Agreement and replace it with the following: + +"April 3, 1999" + +8. Delete item 5. of Amendment 003 to the Agreement in its entirety and replace it with the following: + +"b) Any extension of the I/T Services beyond the April 3, 1999 date, due to an MSL delay, will be priced at IBM's then prevailing commercial rates. + +If the implementation of the MSL I/T solution for the U.S. Work Center is delayed beyond April 3, 1999 by IBM, other than for reasons attributable to MSL, then IBM shall continue to provide I/T Services to MSL at no cost and shall also bear all of MSL's incremental costs associated with such delay including without limitation, hardware, software and consulting costs subject to a maximum amount of [*] ([*] dollars) per month. For any period of less than one month, the above amount shall be apportioned based on the number of Days in that month." + +9. Add the following, as a new paragraph, to the bottom of Page 1, following the paragraph that reads "In addition, there may be associated features or accessory part numbers (not included in the Bill of Material listing)." of Exhibit 1, Product Attachment - Wedge Products to Supplement 1, Transition Services to Attachment 1, SOW to the agreement. + + Amendment 005 to Outsourcing Agreement between IBM and MSL + +"The Wedge Machine Types and the ARCTIC product set will be phased out of the transition services described in SECTION I - WEDGE PRODUCTS in Supplement 1 - Transition Services prior to October 31, 1999." + +Note: Wedge Machine Types 5308, 7429, 7526 no longer apply to Exhibit 1 - Product Attachment - Wedge Products as they have been phased out. + +10. Delete "January 15, 1999" from 6. a) from Amendment 003 to the Agreement and replace it with the following: + +"March 15, 1999" + +All other terms and conditions of the Agreement, its attachments, and amendments shall remain in full force and effect. + +IN WITNESS WHEREOF, the parties hereto have caused this Amendment 005 to be executed by their respective authorized representatives. + +ACCEPTED AND AGREED TO: ACCEPTED AND AGREED TO: + +International Business Machines Corp. Manufacturer's Services Western U.S. Operations, Inc. + +By: /s/ Roy B. Covington III By: /s/ Dale Johnson ------------------------------------- ----------------------------- + + + + + + Roy B. Covington III Dale R. Johnson ------------------------------------- ----------------------------- Print Name Print Name + + Ind. Solutions Production Procurement Exec. V.P. ------------------------------------- ----------------------------- Title Title + + 2/8/99 2/8/99 ------------------------------------- ----------------------------- Date Date + + Amendment 006 to Outsourcing Agreement between IBM and MSL + +The purpose of this document is to amend the IBM/MSL Outsourcing Agreement between International Business Machines Corporation ("IBM") and Manufacture's Services Western U.S. Operations, Incorporated ("MSL"), dated May 5, 1998 ("Agreement"). This amendment will be effective upon execution by IBM and MSL (each a Party and together the "Parties"). + +The Parties agree to amend the Agreement as follow: + +1. Delete the following Product Attachments to Attachment 1, Statement of Work to the Agreement in their entirety and replace them with the attached Product Attachments, of the same name: + + * Attachment A - Product Attachment - Retail Store Solutions ("RS") * Attachment B - Product Attachment - GEPS, Global Embedded Production Solutions * Attachment C - Product Attachment - Finance Solutions * Attachment D - Product Attachment - OEM A, Global Embedded Production Solutions * Attachment E - Product Attachment - OEM B, Global Embedded Production Solutions * Attachment F - Product Attachment - OEM C, Global Embedded Production Solutions * Attachment G - Product Attachment - Security Products + +2. Delete the table in 1. a) of Appendix 1: Mark Up, as amended by Amendment 004, to Attachment 1, Statement of Work of the Agreement in its entirety and replace it with the following: + + a) Value Add and Profit Rates are per the following table: + + VALUE ADD RATES PROFIT RATES (**) --------------- ----------------- RS Fulfillment (US & VALENCIA Work Centers [*] [*] + + GEPS, Finance, CP, and Security Mfg & Fulfillment [*] [*] [*] [*] [*] + + Spares to Mechanicsburg and Amsterdam US Work Center [*] [*] + + Valencia Work Center [*] [*] (Through September 30, 1998) Valencia Work Center [*] [*] (After September 30, 1998) + +* [*] [*] [*] + +** Profit Rates are subject to the adjustments of Section 7.3, Attachment 1, SOW + + Page 1 of 2 + + Amendment 006 to Outsourcing Agreement between IBM and MSL + +All other terms and conditions of the Agreement, its attachments, and amendments shall remain in full force and effect. + +IN WITNESS WHEREOF, the Parties hereto have caused this Amendment 006 to be executed by their respective authorized representatives. + +ACCEPTED AND AGREED TO: ACCEPTED AND AGREED TO: + +International Business Machines Corp. Manufacturer's Services Western U.S. Operations, Inc. + +By: /s/ Roy B. Covington III By: /s/ Dale Johnson + + + + + + ------------------------------------- ----------------------------- + + Roy B. Covington III Dale R. Johnson ------------------------------------- ----------------------------- Print Name Print Name + + Ind Solutions Procurement MGR Exec. V.P. ------------------------------------- ----------------------------- Title Title + + 3/15/99 6/25/99 ------------------------------------- ----------------------------- Date Date + + Page 2 of 2 + + Amendment 007 to Outsourcing Agreement between IBM and MSL + +The purpose of this document is to amend the IBM/MSL Outsourcing Agreement between International Business Machines Corporation ("IBM") and Manufacturer's Services Western U.S. Operations, Incorporated ("MSL"), dated May 5, 1998 ("Agreement"). This amendment will be effective upon execution by IBM and MSL (each a Party and together the "Parties"). + +The Parties agree to amend the Agreement as follow: + +1. Add Attachment I, Product Attachment - OEM Agreement D, and Attachment J, Product Attachment - OEM Agreement E, to Attachment 1, Statement of Work to the Agreement. + +2. Delete the list of appendices, attachments, and supplements and associated attachments as listed on page 1 of Attachment 1, Statement of Work to the Agreement, and as amended by Amendment 004, in its entirety and replace it with the following list: + +a) Appendix 1 Markup b) Appendix 2 Requirements Accuracy c) Appendix 3 Performance Specifications d) Appendix 4 Inventory Supply Flexibility e) Appendix 5 EC Process Flow and EC Cycle Time f) Attachment A - Product Attachment for RS g) Attachment B - Product Attachment for GEPS h) Attachment C - Product Attachment for Finance Solutions i) Attachment D - Product Attachment for OEM Agreement A j) Attachment E - Product Attachment for OEM Agreement B k) Attachment F - Product Attachment for OEM Agreement C l) Attachment G - Product Attachment for Security Products m) Attachment H - Product Attachment for Complimentary Products ('CP") n) Attachment I - Product Attachment for OEM Agreement D 0) Attachment J - Product Attachment for OEM Agreement E p) Supplement 1 - Transition Services and associated Attachments as listed; q) Exhibit 1 to Supplement 1 - Product Attachment for Wedge Products r) Exhibit 2 to Supplement 1 - Wedge Inventory List s) Agreement Exchange of Confidential Information Number 4998S60076 t) IBM Purchase Orders u) IBM Customer Orders v) Equipment and Program Loan Agreement + +3. Delete the following Product Attachments to Attachment 1, Statement of Work to the Agreement in their entirety and replace them with the attached Product Attachments, of the same name: + + Attachment F - Product Attachment - OEM C, Global Embedded Production Solutions Attachment H - Product Attachement - Complementary Products + + Page 1 of 3 + + Amendment 007 to Outsourcing Agreement between IBM and MSL + +4. Delete the table in 1 a) of Appendix 1: Mark Up, as amended by Amendment 006, to Attachment 1, Statement of Work of the Agreement in its entirety and replace it with the following: + + a) Value Add and Profit Rates are per the following table: + + VALUE ADD RATES PROFIT RATES (**) --------------- ----------------- + + RS Fulfillment (US & VALENCIA Work Centers [*] [*] + + GEPS, Finance, CP, and Security Mfg & Fulfillment [*] [*] [*] [*] [*] + + + + + + Spares to Mechanicsburg and Amsterdam US Work Center [*] [*] + + Valencia Work Center [*] [*] (Through September 30, 1998) Valencia Work Center [*] [*] (After September 30, 1998) + + * [*] [*] [*] * [*] [*] [*] * [*] [*] [*] * [*] [*] [*] * [*] [*] [*] + + ** Profit Rates are subject to the adjustments of Section 7.3, Attachment 1, SOW + +5. Delete in Section 17.0 b) to Attachment 1, Statement of Work to the Agreement, 12/31/98 and replace it with 12/31/99. + + Page 2 of 3 + + Amendment 007 to Outsourcing Agreement between IBM and MSL + +All other terms and conditions of the Agreement, its attachments, and amendments shall remain in full force and effect. + +IN WITNESS WHEREOF, the Parties hereto have caused this Amendment 006 to be executed by their respective authorized representatives. + + ACCEPTED AND AGREED TO: ACCEPTED AND AGREED TO: + + International Business Manufacturer's Services Machines Corp. Western U.S. Operations, Inc. + + By: /s/ Roy B. Covington III By: /s/ Dale R. Johnson ---------------------------- ---------------------------- + + Roy B. Covington III Dale R. Johnson ---------------------------- ---------------------------- Print Name Print Name + + Industry Solutions Production Procurement Manager EXEC. V.P ---------------------------- ---------------------------- Title Title + + May 20, 1999 6/25/99 ---------------------------- ---------------------------- Date Date + + Page 3 of 3 + + Amendment 008 to Outsourcing Agreement between IBM and MSL + +The purpose of this document is to amend the IBM/MSL Outsourcing Agreement between International Business Machines Corporation ("IBM") and Manufacturer's Services Western U.S. Operations, Incorporated ("MSL"), dated May 5, 1998 ("Agreement"). This amendment will be effective upon execution by IBM and MSL (each a Party and together the "Parties"). + +The Parties agree to amend the Agreement as follow: + +1. Add Attachment K, Product Attachment - IBM 5494 for NHD, to Attachment 1, Statement of Work to the Agreement. + +2. Delete the list of appendices, attachments, and supplements and associated attachments as listed on page 1 of Attachment 1, Statement of Work to the Agreement, and as amended by Amendment 007, in its entirety and replace it with the following list: + +a) Appendix 1 Markup b) Appendix 2 Requirements Accuracy c) Appendix 3 Performance Specifications d) Appendix 4 Inventory Supply Flexibility e) Appendix 5 EC Process Flow and EC Cycle Time f) Attachment A - Product Attachment for RS g) Attachment B - Product Attachment for GEPS h) Attachment C - Product Attachment for Finance Solutions i) Attachment D - Product Attachment for OEM Agreement A j) Attachment E - Product Attachment for OEM Agreement B k) Attachment F - Product Attachment for OEM Agreement C l) Attachment G - Product Attachment for Security Products m) Attachment H - Product Attachment for Complimentary Products ("CP") + + + + + +n) Attachment I - Product Attachment for OEM Agreement D o) Attachment J - Product Attachment for OEM Agreement D p) Attachment K - Product Attachment for IBM 5494 for NHD q) Supplement 1 - Transition Services and associated Attachments as listed; r) Exhibit 1 to Supplement 1 - Product Attachment for Wedge Products s) Exhibit 2 to Supplement 1 - Wedge Inventory List t) Agreement Exchange of Confidential Information Number 4998S60076 u) IBM Purchase Orders v) IBM Customer Orders w) Equipment and Program Loan Agreement + + Page 1 of 2 + + Amendment 008 to Outsourcing Agreement between IBM and MSL + +All other terms and conditions of the Agreement, its attachments, and amendments shall remain in full force and effect. + +IN WITNESS WHEREOF, the Parties hereto have caused this Amendment 008 to be executed by their respective authorized representatives. + + ACCEPTED AND AGREED TO: ACCEPTED AND AGREED TO: + + International Business Manufacturer's Services Machines Corp. Western U.S. Operations, Inc. + + By: /s/ Roy B. Covington III By: /s/ Dale R. Johnson ---------------------------- ---------------------------- + + Roy B. Covington III Dale R. Johnson ---------------------------- ---------------------------- Print Name Print Name + + Industry Solutions Production Procurement Manager EXEC. V.P ---------------------------- ---------------------------- Title Title + + 6/7/99 July 5, 1999 ---------------------------- ---------------------------- Date Date + + Page 2 of 2 + + Amendment 009 to Outsourcing Agreement between IBM and MSL + +The purpose of this document is to amend the IBM/MSL Outsourcing Agreement between International Business Machines Corporation ("IBM") and Manufacturer's Services Western U.S. Operations, Incorporated ("MSL"), dated May 5, 1998 ("Agreement"). This amendment will be effective upon execution by IBM and MSL (each a Party and together the "Parties"). + +The Parties agree to amend the Agreement as follow: + +1. Add Attachment 6: Software Installation Terms and Conditions to Outsourcing Base Agreement. + +2. Delete the list following the sentence "The Parties agree that this Agreement regarding this transaction consist of:" found on Page 1 of the Outsourcing Base Agreement in its entirety and replace it with the following: + +a) the Outsourcing Base Agreement b) Attachment 1: Statement of Work and its Product Attachments, Appendices, and Supplements c) Attachment 2: Employee list and Benefits Information d) Attachment 3: Asset List e) Attachment 4: Expense Participation f) Attachment 5: Equipment and Program Loan List g) Attachment 6: Software Installation Terms and Conditions h) Agreement for Exchange of Confidential Information Number 4998S60076 i) IBM Purchase Orders j) IBM Customer Orders k) Equipment and Program Loan Agreement + +All other terms and conditions of the Agreement, its attachments, and amendments shall remain in full force and effect. + +IN WITNESS WHEREOF, the Parties hereto have caused this Amendment 009 to be executed by their respective authorized representatives. + + ACCEPTED AND AGREED TO: ACCEPTED AND AGREED TO: + + International Business Manufacturer's Services Machines Corp. Western U.S. Operations, Inc. + + By: /s/ Roy B. Covington III By: /s/ Dale R. Johnson + + + + + + ---------------------------- ---------------------------- + + Roy B. Covington III Dale R. Johnson ---------------------------- ---------------------------- Print Name Print Name + + Industry Solutions Production Procurement Manager EXEC. V.P, GENERAL COUNSEL ---------------------------- ---------------------------- Title Title + + 6/7/99 6/9/99 ---------------------------- ---------------------------- Date Date + + Page 1 of 1 + + Amendment 010 to Outsourcing Agreement between IBM and MSL + +The purpose of this document is to amend the IBM/MSL Outsourcing Agreement between International Business Machines Corporation ("IBM") and Manufacturer's Services Western U.S. Operations, Incorporated ("MSL"), dated May 5, 1998 ("Agreement"). This amendment will be effective upon execution by IBM and MSL (each a Party and together the "Parties"). + +The Parties agree to amend the Agreement as follow: + +1. Delete "up to October 31, 1999 for SECTION I - WEDGE PRODUCTS to Supplement 1, Transition Services to Attachment 1, Statement of Work to the Agreement and through April 3, 1999 for SECTION II - SALE OF IBM SERVICES to Supplement 1, Transition Services to Attachment 1, Statement of Work to the Agreement.", as amended in Amendment 005, from the end of sentence in paragraph 2 in Supplement 1 to Attachment 1, Statement of Work, to the Agreement, in its entirety and replace with the following: + + "through March 31, 2000 for SECTION I-WEDGE PRODUCTS to Supplement 1, Transition Services to Attachment 1, Statement of Work to the Agreement and through April 3, 1999 for SECTION II - SALE OF IBM SERVICES to Supplement 1, Transition Services to Attachment 1, Statement of Work to the Agreement." + +2. Delete the wording in Section 2.0 Term, as last amended in Amendment 005, from SECTION I - WEDGE PRODUCTS to Supplement 1, Transitions Services to Attachment 1, Statement of Work to the Agreement, in its entirety and replace with the following: + +"The following replaces Section 2.0 of the SOW in its entirety. + + This Supplement and its Attachments shall become effective upon execution of the SOW and expire March 31, 2000 unless terminated as provided in Section 5.0 of the Base Agreement. This supplement may be extended under mutually agreed to terms and conditions. Extensions will be in writing and signed by both Parties." + +3. Delete the wording in Section 7.0 Price, as amended in Amendment 005, from SECTION I - WEDGE PRODUCTS to Supplement 1, Transitions Services to Attachment 1, Statement of Work to the Agreement, in its entirety and replace with the following: + +"The following replaces Section 7.0 of the SOW in its entirety. + + "Commencing on the Effective Date of this Agreement, IBM shall pay MSL [*] dollars ([*]) on the first Day of each calendar month through March 31, 1999. Beginning April 1, 1999 and through October 31, 1999, IBM shall pay MSL [*] dollars ([*]) on the first Day of each calendar month. Beginning November 1, 1999 and through the end of the period defined in Section 2.0 Term, SECTION I - WEDGE PRODUCTS in Supplement 1 to Attachment 1 of Work to the Agreement, IBM shall pay MSL [*] dollars ([*]) on the first day of each calendar month. For any period of less than one month, the above amount shall be apportioned based upon the number of Days in that month." + + Page 1 of 2 + + Amendment 010 to Outsourcing Agreement between IBM and MSL + +4. Delete the wording in the last paragraph of Specific Product Description as added by Amendment 005, of Exhibit 1, Product Attachment - Wedge Products to Supplement 1, Transition Services to Attachment 1, Statement of Work to the Agreement, in its entirety and replace it with the following: + + + + + + "The ARCTIC product set will be phased out of the transition services described in SECTION I - WEDGE PRODUCTS prior to October 31, 1999. The Wedge Machine Types will be phased out of the transitions services described in SECTION I - WEDGE PRODUCTS on or before March 31, 2000". + +5. Delete Attachment 5: Equipment and Program Loan List, to the Outsourcing Base Agreement dated October 01, 1998 and replace it in its entirety with the Attachment 5: Equipment and Program Loan List, to the Outsourcing Base Agreement dated July 20, 1999. + +All other terms and conditions of the IBM/MSL Outsourcing Agreement, its attachments, and amendments shall remain in full force and effect. + +IN WITNESS WHEREOF, the Parties hereto have caused this Amendment 010 to be executed by their respective authorized representatives. + + ACCEPTED AND AGREED TO: ACCEPTED AND AGREED TO: + + International Business Manufacturer's Services Machines Corp. Western U.S. Operations, Inc. + + By: /s/ Nigel D. Davis By: /s/ Dale R. Johnson ---------------------------- ---------------------------- + + Nigel D. Davis Dale R. Johnson ---------------------------- ---------------------------- Print Name Print Name + + [ILLEGIBLE] Procurement Mgr. EXEC. V.P ---------------------------- ---------------------------- Title Title + + 11-16-99 11/29/99 ---------------------------- ---------------------------- Date Date + + ATTACHMENT 1 + + IBM/MSL Outsourcing Base Agreement Statement of Work + +The Statement of Work ("SOW") is an Attachment issued under the IBM/MSL Outsourcing Base Agreement ("Base Agreement") for the manufacturing, fulfillment, Integration, and Services currently performed and managed by and for IBM that are to be performed and managed by MSL for the Retail Store Solutions ("RS"), Global Embedded Production Solutions ("GEPS"), Finance Solutions, other IBM business units, and current IBM OEM Agreements. + +By signing below, each of us agrees that the complete agreement between us regarding this transaction document consists of the Outsourcing Base Agreement and this SOW and associated Appendices, Attachments, and Supplements and associated Attachments as listed: + +a) Appendix 1 Markup b) Appendix 2 Requirements Accuracy c) Appendix 3 Performance Specifications d) Appendix 4 Inventory Supply Flexibility e) Appendix 5 EC Process Flow and EC Cycle Time f) Attachment A - Product Attachment for RS g) Attachment B - Product Attachment for GEPS h) Attachment C - Product Attachment for Finance Solutions i) Attachment D - Product Attachment for OEM Agreement A j) Attachment E - Product Attachment for OEM Agreement B k) Attachment F - Product Attachment for OEM Agreement C l) Attachment G - Product Attachment for Security Products m) Supplement 1 - Transition Services and associated Attachments as listed; n) Exhibit 1 to Supplement 1 - Product Attachment for Wedge Products o) Exhibit 2 to Supplement 1 - Wedge Inventory List p) Agreement Exchange of Confidential Information Number 4998S60076 q) IBM Purchase Orders r) IBM Customer Orders s) Equipment and Program Loan Agreement + +The following is a related agreement between MSL and IBM: + + IBM Corporation (Landlord) and MSL (Tenant) Lease Agreement + +IBM Confidential Page 1 of 39 sow501.lwp + + ATTACHMENT 1 + + IBM/MSL Outsourcing Base Agreement Statement of Work + +Any signed copy of this SOW and its Attachments made by reliable means (for example, photocopy or facsimile) is considered an original. + +Agreed To: Agreed To: + +Manufacturers' Services Western International Business Machines Corporation U.S. Operations, Inc. + + + + + +By: /s/ Kevin C. Melia By: /s/ R. G. Richter ----------------------------- ----------------------------- Authorized Signature Authorized Signature + +Name: KEVIN C. MELIA Name: R. G. Richter --------------------------- --------------------------- + +Date: May 5, 1998 Date: May 5, 1998 --------------------------- --------------------------- + +IBM Confidential Page 2 of 39 sow501.lwp + + ATTACHMENT 1 + + IBM/MSL Outsourcing Base Agreement Statement of Work + +SECTION 1.0 DEFINITIONS ............................................... Page 5 + +SECTION 2.0 TERM ...................................................... Page 6 + +SECTION 3.0 MSL RESPONSIBILITIES ...................................... Page 7 + +SECTION 4.0 IBM RESPONSIBILITIES ...................................... Page 8 + +SECTION 5.0 MUTUAL RESPONSIBILITIES ................................... Page 9 + +SECTION 6.0 PURCHASE OF PRODUCTS ...................................... Page 11 + +SECTION 7.0 PRICE ..................................................... Page 11 + +SECTION 8.0 PARTS PRICING ............................................. Page 16 + +SECTION 9.0 PREMIUM COST .............................................. Page 16 + +SECTION 10.0 ORDER MANAGEMENT, DELIVERY, AND SHIPMENT ................. Page 18 + +SECTION 11.0 PRODUCT FORECAST ......................................... Page 20 + +SECTION 12.0 ENGINEERING CHANGE ....................................... Page 21 + +SECTION 13.0 INVENTORY ................................................ Page 22 + +SECTION 14.0 INTEGRATION .............................................. Page 24 + +SECTION 15.0 DROP SHIPMENTS ........................................... Page 29 + +SECTION 16.0 PACKAGING ................................................ Page 30 + +SECTION 17.0 QUALITY .................................................. Page 30 + +SECTION 18.0 ACCEPTANCE TEST .......................................... Page 31 + +IBM Confidential Page 3 of 39 sow0501.lwp + + ATTACHMENT 1 + + IBM/MSL Outsourcing Base Agreement Statement of Work + +SECTION 19.0 WARRANTY ................................................. Page 32 + +SECTION 20.0 COMMON TOOLING ........................................... Page 34 + +SECTION 21.0 TOOLING TO BE ACQUIRED ................................... Page 34 + +SECTION 22.0 RETURN OF PRODUCT - US AND VALENCIA WORK CENTER. ......... Page 36 + +SECTION 23.0 DISASTER RECOVERY ........................................ Page 37 + +SECTION 24.0 INFORMATION TECHNOLOGIES SERVICES ("I/T") SYSTEMS ........ Page 37 + +IBM Confidential Page 4 of 39 sow0501.lwp + + ATTACHMENT 1 + + IBM/MSL Outsourcing Base Agreement Statement of Work + +SECTION 1.0 DEFINITIONS + + For purposes of this Attachment, the following capitalized terms shall have the following meaning All other capitalized terms not otherwise defined herein shall have the meaning assigned in the Agreement: + +1.1 "AP" shall mean Asia and Pacific geographies. + +1.2 "Bulk Shipment" shall mean a fulfillment sub process for Products identified by part numbers, by which aggregate IBM Customer Orders are delivered together to the IBM Customer. + + + + + +1.3 "Code A" shall mean a service available from MSL to IBM 6:00am to Midnight local Work Center time, and seven (7) days a week for the delivery of emergency Parts requested by IBM, IBM Document VFM043. + +1.4 "Delivery Point" shall mean the location where IBM is to take delivery of Products, excluding Products which are Drop Shipments, from MSL as described in the Product Attachments. This may be an MSL site, an IBM site or such location as required by the Product Attachment. If no Delivery Point is stated for a particular Product, it shall be the location described in a separate IBM notice. + +1.5 "Drop Shipment" shall mean a fulfillment sub process by which Products are directly delivered from the IBM supplier to an IBM Subsidiary or IBM customer. These Products do not pass physically through any MSL facility. + +1.6 "EMEA" shall mean the Europe, Middle East and Africa geographies. + +1.7 "End of Life" (EOL) shall mean the date after which IBM does not require MSL to provide Products and/or Services for specific Products. + +1.8 "Engineering Change" (EC) shall mean a mechanical or electrical design and/or specification changes which, if made, would in the good faith opinion of IBM, affect the schedule, performance, reliability, availability, serviceability, appearance, dimensions, tolerance, safety or cost of Products, and which, in IBM's good faith opinion, would eventually require additional approval tests. + +1.9 "Failure Analysis" shall mean first pass failure analysis investigation and testing performed by MSL to identify the failing Parts. The Part level to which MSL will conduct Failure Analysis is described in the Quality Section 17.0. + +1.10 "Field Bill of Materials" (FBM) shall mean a set of Parts for machine upgrade. + +1.11 "Follow on Product" shall mean a new IBM Product which has similar functional characteristics to current Products and that is intended to replace such current Products in the marketplace. + +IBM Confidential Page 5 of 39 sow0501.lwp + + ATTACHMENT 1 + + IBM/MSL Outsourcing Base Agreement Statement of Work + +1.12 "Hot line" shall mean a service available from 7:30 am to Midnight local Work Center time, Mondays through Fridays for emergency problem resolution requested from IBM customers, IBM Document VFM045. + +1.13 "IBM Classified Part(s)" shall mean a Part subject to be managed by MSL according to IBM asset control rule, IBM Document CP10.13. + +1.14 "IBM Nominated Supplier" shall mean a supplier from which MSL is specifically required by IBM to purchase specific Parts. + +1.15 "NIC" shall mean MSL's out of pocket costs for freight, duty, customs, clearance, and appropriate insurance, and any other costs it incurs to bring Product into a Work Center. + +1.16 "Order Fulfillment" shall mean MSL's disbursement of Products, including Pick & Pack, any Integration, shipment and delivery in order to satisfy an IBM Customer Order. + +1.17 "Order Desk" shall mean the function consisting of 1) receiving IBM Customer Orders, 2) communicating with the requesting IBM party to ensure the fulfillment commitments satisfy the request, 3) scheduling delivery of the order and 4) communicating with the necessary goods processing organizations to ensure the order is delivered at the committed date and place. + +1.18 "Pick & Pack" shall mean fulfillment a sub process for individual IBM Customer Orders, by which all items of an IBM Customer Order are consolidated into an over pack. Pick & Pack ensures that all items of the IBM Customer Order arrive together at the customer location. + +1.19 "Product Recall" shall mean a systematic effort to locate all Products in the field in order to repair or replace such Products. + +1.20 "Relationship Managers" shall mean the primary contact of the Parties with respect to this Agreement. The Relationship Managers or their delegates are solely authorized to make commitments between the parties. Each Party shall designate a Relationship Manager. + +1.21 "Request Price Quotation" (RPQ), shall mean a customized Product configuration. + +1.22 "Wedge Products" shall mean Products as described in a specific Product Attachment, which are fulfilled by MSL from IBM Consigned Parts from the Effective Date of this Agreement through December 31, 1998. + +SECTION 2.0 TERM + + + + + + This Attachment and its Product Attachments shall become effective on the Effective Date and shall continue for a period of three (3) years unless terminated as provided in Section 5.0 of the Base Agreement. This Attachment will automatically be renewed for periods of six (6) months unless either party gives twelve (12) months written notice of its intent to terminate this Agreement. Such renewals shall continue for successive periods under the same terms and conditions, unless otherwise agreed in writing by both Parties. + +IBM Confidential Page 6 of 39 sow0501.lwp + + ATTACHMENT 1 + + IBM/MSL Outsourcing Base Agreement Statement of Work + +SECTION 3.0 MSL RESPONSIBILITIES + + The following is a list of responsibilities that will be required of MSL in order to fulfill the requirements of this Agreement. This list may not be all inclusive. + + MSL shall: + + 1) provide suitable installations, common tools and equipment, skilled human resources, and adequate warehousing facilities at all delivery points listed in the Product Attachments as MSL may need for execution of this Agreement, 2) manage, control, and execute EC's, 3) qualify processes in accordance with IBM specified criteria, 4) review and update product inventory profiles semiannually, 5) purchase from IBM Nominated Suppliers based on IBM specified terms and conditions, 6) utilize product forecasts to determine requirements and plans to fulfill such requirement, 7) manage requirements generation for materials for Products, plan the procurement of materials from suppliers, and identify the Work Center where materials must be delivered, 8) commit sufficient supply for IBM business units for Products with Product Attachments hereto and subject to the parameters of Appendix 4 Supply Flexibility, 9) inspect incoming materials and supplies for compliance with IBM specified criteria, 10) maintain appropriate stock to satisfy IBM Customer Orders within the parameters of Appendix 4 Supply Flexibility, 11) manage inventory and associated liabilities, 12) manage inbound transportation and cost for all Part and Products excluding those Parts considered IBM Consigned Parts, 13) handle the reception and management of worldwide IBM Customer Orders, including new orders, alteration, reschedules, Integration as per customer requirements and cancellations, 14) handle order processing, fulfillment and delivery for Products and Bulk Shipments at defined Delivery Points, 15) provide account management, technical support and interface to IBM customers for Integration, 16) provide packing and packaging for all Products and Parts, 17) deliver complete assembled, inspected and tested Products that meet the requirements defined by the engineering documentation and specifications as defined in the Product Attachments, 18) fulfill all obligations as outlined in the Integration Section 14.0, + +IBM Confidential Page 7 of 39 sow0501.lwp + + ATTACHMENT 1 + + IBM/MSL Outsourcing Base Agreement Statement of Work + + 19) manage Drop Shipments of Products to designated IBM Subsidiaries and/or foreign companies and prepare invoice for the corresponding IBM country unit, 20) perform all distribution and shipping for Products from the US Work Center, arrange for carriers for all outbound shipments of Products to IBM customer destinations per the IBM Customer Order, 21) perform kitting of parts as required for IBM, 22) provide machine level control when required by Product specifications, 23) process returned Products in accordance with IBM criteria for the same, 24) perform first pass Failure Analysis on returned Products, 25) manage and control of Consigned Products and equipment, 26) provide detailed reporting as defined in the Performance Appendix, 27) fulfill obligations as outlined in the Transition Services Supplement from the Effective Date of the Agreement to 12/31/98, 28) manage all Products to EOL dates as defined by IBM, 29) provide Code A and Hot Line support for all Products as requested by IBM, + + + + + + 30) perform all forecasting for features, 31) supply spare Parts until EOL, 32) fulfill duties of Order Desk, 33) provide timely estimates of any new Product activity, and 34) support new Product introduction activities such as prototype build, sourcing, test and manufacturing process development. + +SECTION 4.0 IBM RESPONSIBILITIES + + The following is a list of responsibilities that will be required of IBM in order to fulfill the requirements of this Agreement. This list may not be all inclusive. + + IBM shall + + 1) negotiate and manage contracts and technical support with IBM Nominated Suppliers, 2) supply to MSL required IBM Parts and needed IBM Consigned Parts, 3) define allocation of IBM Customer Order deliveries if total demand cannot be supported for a period of time, 4) approve all EC's for Products prior to MSL's implementation of any change, 5) provide technical and business interface through the IBM Relationship Manager, 6) fulfill obligations as outlined in the Transition Services Supplement from the Effective Date to 12/31/98, 7) process qualification approval of all processes utilized by MSL, 8) provide engineering documentation and specifications as needed by MSL to manufacture and test Products as defined in the Product Attachments, 9) execute approve tooling agreements as needed, 10) provide maintenance for IBM IT systems that IBM requires MSL to use, + +IBM Confidential Page 8 of 39 sow0501.lwp + + ATTACHMENT 1 + + IBM/MSL Outsourcing Base Agreement Statement of Work + + 11) provide a forecast to MSL on a monthly basis for all machine types and models by geography, 12) approve/reject all requests for premium expenditures for materials, labor and other extraordinary items, 13) provide EOL dates for all Products, at least [*] months prior to desired EOL date, and 14) provide new product information required for estimates and new product introduction activities which are requested of MSL. + +SECTION 5.0 MUTUAL RESPONSIBILITIES + +5.1 Delivery/Quality/Cost Performance Process + + a) MSL and IBM will communicate weekly on measurements and reports for: + + i) Weekly shipments + + ii) On-time shipments + + iii) Responsiveness as defined in Appendix 3 + + iv) Order-to-ship lead-time, Pick and Pack + + v) Order-to-ship lead-time, Bulk Shipments + + vi) Product invoice information + + b) MSL and IBM will communicate monthly on measurements and reports for + + i) Monthly shipments + + ii) Inventory + + iii) Product quality + + iv) Serviceability to IBM plants as defined in Appendix 3 + + v) Serviceability to IBM services as defined in Appendix 3 + + c) MSL and IBM will perform monthly reconciliation of invoices for Product shipments and will determine payment adjustments as defined in Section 7.3 ,Payment Adjustments. Payments of credits and debits that may result from reconciliation and payment adjustments will take place within the month following the reconciled month. + + d) MSL and IBM will meet [*] at the US Work Center and/or the Valencia Work Center or a place to be mutually agreed to.: + +IBM Confidential Page 9 of 39 sow0501.lwp + + + + + + ATTACHMENT 1 + + IBM/MSL Outsourcing Base Agreement Statement of Work + + i) define prices for the coming [*] based upon procedures defined in Section 7.5 e)i) below, + + ii) determine credits and debits to material costs and NIC for the previous [*] caused by [*] to the material costs from those estimated at the prior [*] meeting, and + + iii) determine Requirements Accuracy liabilities for the previous [*] as defined in Section 13.0 Inventory and Appendix 2. + + e) Measurements, Targets and Reports to be provided by MSL are specified in Appendix 3. + +5.2 Relationship Management + + a) MSL expressly recognizes that only commitments made to MSL by the IBM Relationship Managers or their delegates are IBM commitments to MSL with respect to this Agreement. The following are some, but not all of, the communications that MSL can validly receive from the Relationship Managers or their delegates: requirements forecasts, price approval, orders for Products or Services, approval of EC applications, approval of premium expenses, and approval of price reconciliation. These communications must be in writing by IBM. + + b) In the event of a necessary or desired change in any material aspect of the Agreement, the Parties shall mutually agree to any such change in writing prior to its implementation. A proposed change shall be initiated by the proposing Party in a written notice to the other Party. + + c) MSL and IBM shall appoint program managers to handle communications specific to each Product Group related to this Agreement. Names of the program managers will be listed in each Product Attachment. + + d) Either Party may change its program manager by written notice. + + e) Both Parties recognize that efficiency of operation may frequently require direct communication between program managers, or other individuals working for the Parties, without the intermediation of the Relationship Managers. Notwithstanding the above, MSL accepts that only commitments issued by the IBM Relationship Managers or their delegates are valid IBM commitments with respect to this Agreement. Also, IBM accepts that only commitments issued by the MSL Relationship Managers or their delegates are valid MSL commitments with respect to this Agreement. + + f) The Relationship Managers or their delegates will also coordinate review meetings and will provide each other assessments of the performance and the business situation of the relationship throughout the duration of this Agreement. + + g) Each Party may at any time redesignate a person as Relationship Manager by written notice to the other. + + Relationship Managers: + +IBM Confidential Page 10 of 39 sow0501.lwp + + ATTACHMENT 1 + + IBM/MSL Outsourcing Base Agreement Statement of Work + + for US Work Center + + IBM: + + MSL: + + IBM will separately designate a Relationship Manager for EMEA. + +SECTION 6.0 PURCHASE OF PRODUCTS + + Subject to the terms and conditions of this Agreement, MSL agrees to produce and sell, and IBM agrees to purchase Products. This Agreement does not authorize MSL to produce or deliver any Product. + +6.1 Cancellation of Purchase Order + + IBM may cancel any and all Purchase Orders against this Agreement at any time. In the event IBM cancels Purchase Order as the result of MSL's default, no cancellation charge shall be applicable. IBM's termination of Purchase Orders for its convenience shall not relieve IBM of any cost reimbursements under the Price section. + +SECTION 7.0 PRICE + + Pricing for all Products and related services of this Agreement are as + + + + + + specified herein unless stated elsewhere in this Agreement. All prices stated herein are defined in United States dollars, unless otherwise noted. + +7.1 Manufacturing and Fulfillment Pricing + + MSL's price to IBM for the fulfillment of Products for RS and MSL's price to IBM for the manufacturing and fulfillment of GEPS and Finance Products will be determined according to the following formula: + + {P=A+B+C+D}, where the following values are assigned to such formula: + + a) 'P' shall mean 'Price' or the price IBM shall pay for Products under this Agreement. + + b) 'A' shall mean [*] or the cost of all MSL [*] and any [*] as determined by the [*] described in Section 7.5 e) i) below. For RS Products, manufactured by MSL, the cost of [*] shall be consistent with the terms of section 7.2, below. + +IBM Confidential Page 11 of 39 sow0501.lwp + + ATTACHMENT 1 + + IBM/MSL Outsourcing Base Agreement Statement of Work + + c) 'B' shall mean 'MSL [*]' or a value determined by multiplying the [*] times the [*]. [*] are listed in Markup Appendix 1. + + d) 'C' shall mean 'MSL [*]' or a value determined by multiplying the [*] times the [*]. [*] are listed in Markup Appendix 1. + + e) 'D' shall mean [*] or a value determined by multiplying the [*] times the [*]. [*] are listed in Markup Appendix 1. + +7.2 Prices for MSL Manufactured RS Products and RS Integration + + a) For RS Products, the cost of components manufactured by MSL, and not sourced from third party suppliers, will be determined by the following formula: {TMC = [*]}, where the following values are assigned to such formula: + + i) "TMC" shall mean Total Manufacturing Cost. + + ii) "1" shall mean [*] or the cost of all [*] and any [*] as determined by the [*] described in Section 7.5 e) i) below + + iii) "2" shall mean [*] to be determined by multiplying MSL's [*] by MSL's [*] rate per hour ([*] x MSL [*]). [*] are stated in Product Attachment A. MSL's [*] Rate Per Hour for [*] is as listed in the Markup Appendix 1. + + iv) "3" shall mean [*] to be determined by multiplying the [*] by the [*]. The [*] are as listed in the Markup Appendix 1. + + v) "4" shall mean the [*] to be determined by multiplying the [*]. The [*] are as listed in the Markup Appendix 1. + + b) For RS orders that include Integration, MSL will invoice IBM the Integration charges separately from the fulfillment price defined in this Section 7.1. The price for integration will be determined by multiplying the [*] times the [*] performed for the [*] services. [*]. [*] are listed in the Markup Appendix 1. [*] are the direct . + +IBM Confidential Page 12 of 39 sow0501.lwp + + ATTACHMENT 1 + + IBM/MSL Outsourcing Base Agreement Statement of Work + + [*] needed to integrate a unit for a specific Integration project. [*] will be agreed to between MSL and IBM prior to the start of each Integration project. + +7.3 Payment Adjustment for Delinquent Shipments and MSL not Achieving Responsiveness Objective. + + a) For any calendar month, if a Work Center fails to ship any machine type on at least a [*]% on time shipment rate to all committed Delivery Points, and such failure is not a result of Force Majeure + + + + + + activity under Section 16.17 of the Base Agreement, or a delay caused substantially by IBM, the Profit Rates defined in Section 7.1(d) and Appendix 1, shall be based on the following table for all delinquent shipments of such machine types, from that Work Center. + +SHIPMENT PROFIT RATE + + RS GEPS and Finance GEPS and Finance Fulfillment A-Sourced Mfg. and Fulfillment + +On Time [*] [*] [*] + +1 Day delinquent [*] [*] [*] + +2 or more Days delinquent [*] [*] [*] + + b) For any calendar month, if MSL fails to achieve a responsiveness, as defined in Appendix 3, of at least [*]% for any machine type, in a Work Center, a penalty of [*]% will be applied to that Work Center's monthly total material cost of that machine type multiplied by ([*]% minus actual responsiveness %). This penalty shall not apply if requirements accuracy for that machine type, as defined in Appendix 2, exceeds [*]% and demand, for that machine type, exceeds Supply Flexibility as defined in Section 13.2 and Appendix 4. The first month for which this penalty shall be effective is June 1998. + + c) Any price adjustments that are due per Sections 7.3 a) or 7.3 b) will be invoiced by IBM to MSL in the following calendar month. + +7.4 [*] + + Notwithstanding anything in this Agreement to the contrary, MSL represents and warrants that + + a) If MSL [*] to another [*] under similar terms and conditions including without limitation, [*], to those [*] to IBM and in [*] + +IBM Confidential Page 13 of 39 sow0501.lwp + + ATTACHMENT 1 + + IBM/MSL Outsourcing Base Agreement Statement of Work + + or [*] during the same period, those [*] shall be made known and available to IBM at the time of their availability to that [*]. + + b) In the event IBM reasonably questions whether it is receiving [*] treatment as described in Section 7.4 a), and MSL cannot otherwise provide IBM with proof of its compliance due to third party restrictions, both parties agree to have an independent party evaluate IBM's inquiry to determine whether IBM has received proper treatment under this Section. IBM and MSL agree that the information disclosed by MSL to the independent party pursuant to this Section 7.4 b), will be subject to the Confidentiality Agreement described in the Agreement. + + c) For purposes of this Section a [*] shall mean a [*] from a qualified third party [*] that contains an ongoing sustainable [*], which is more [*] than MSL's [*] and which is subject to comparable terms and conditions and for substantially similar [*], to build Product(s) as opposed to provide [*] services for the Products(s). + + i) If IBM gets a [*] from an [*] resulting in a [*] which demonstrates MSL [*], IBM will notify MSL. MSL shall have [*] Days after written notice of such [*] to [*] or [*] such [*]. If MSL is unable to [*] the [*] subject to the conditions set forth in ii) below, then IBM may [*] the Product to the [*], and IBM and MSL shall mutually agree on a [*] plan for such Product(s). In this case MSL shall have all remedies for [*] in accordance with [*] of the Agreement. + + ii) If MSL is unable or unwilling to [*] the [*] because IBM's [*] for the Product has been below the minimum [*] parameter for the prior [*] months, MSL shall have a grace period [*] months from written notice of the [*] to make adjustments it deems necessary to [*] the [*]. This grace period is contingent upon MSL making, within [*] Days of notice of the [*], a commitment to [*] the [*] at the end of the grace period. + + d) In the event, IBM Latin America or IBM Asian Pacific were to receive an [*] from a [*] that contains an ongoing [*], which is more [*] than MSL's [*] and which is subject to comparable terms and conditions and for substantially similar [*], to provide [*] services for the Product(s), IBM will notify MSL. MSL shall have [*] Days after written notice of such [*] to [*] or [*] such [*]. MSL shall have a grace period of [*] months from written notice of + + + + + + the [*] to make adjustments it deems necessary to [*] the [*] quote at the end of the grace period. If MSL is unable to [*] the [*] then IBM may [*] the [*] to the [*] and IBM and MSL shall mutually agree on a [*] plan for the Product(s). + +IBM Confidential Page 14 of 39 sow0501.lwp + + ATTACHMENT 1 + + IBM/MSL Outsourcing Base Agreement Statement of Work + + e) In the event, IBM were to receive an [*] from a [*] that contains an ongoing [*], which is more [*] than MSL's [*] and which is subject to comparable terms and conditions and for substantially similar [*], to provide Integration for the Product(s), IBM will notify MSL. MSL shall have [*] Days after written notice of such [*] to [*] or [*] such [*]. If MSL is unable to [*] the [*] then IBM may [*] the [*] to the [*] and IBM and MSL shall mutually agree on a [*] plan for the Product(s). + +7.5 [*] of Product [*]. The unit [*] and elemental [*], i.e., [*], and [*], listed in the Markup Appendix 1 and Product Attachments shall [*] during the term of this Agreement subject to the following: + + a) If [*] and/or elemental [*] are reduced by MSL or lower [*] are [*] by MSL to other [*] for a [*] that is similar to [*] under similar terms and conditions, including without limitation [*], MSL will reduce the [*], or reduce the [*] to IBM to the [*] as those [*] to other [*]. The [*] and [*] will apply to all [*] IBM [*] and to all [*] Product deliveries during the term of this Agreement. + + b) If IBM or MSL negotiate or schedule a [*] for [*], the corresponding [*] will be effective when MSL begins using and shipping the [*]. + + c) A negotiated [*] could result if there is a significant increase or decrease in the Product [*] from those assumed for [*] definition. If this occurs, the parties shall negotiate in good faith an appropriate adjustment to MSL's [*]. The revised [*] will apply to all [*] which have been [*] but not [*] and to all [*] releases during the term of this Agreement. + + d) A [*] increase or decrease may result if IBM makes an [*] to a Product. Any [*] change will be per the terms of [*] and the [*] of the changed Product will carry the same inherent [*] as the original Product. + + e) Proposals for updates to the initial [*] will be reviewed each [*] on a [*] day cycle. The schedule will be as follows: + + "T" shall be the date that MSL [*] and IBM [*] are ready for table load; it is the last day of a calendar [*] end [*]. + + [*] Days before T, MSL shall initiate an update proposal. + + [*] Days before T, MSL shall answer all IBM questions and issues and revise its proposal. + + Update reviews shall include: + + i) Updates of [*] costs, including [*] costs, with latest [*] of IBM [*] and MSL [*]. IBM [*] costs will + +IBM Confidential Page 15 of 39 sow0501.lwp + + ATTACHMENT 1 + + IBM/MSL Outsourcing Base Agreement Statement of Work + + be updated to the latest IBM [*]. For Parts with a low annual [*], the [*] costs will be updated to the latest [*] costs. + + ii) Update of MSL [*] for MSL [*] Product(s). + + iii) Changes in MSL [*] and [*], in accordance with the [*] and Product [*] conditions of Sections 7.4 and 7.5 a), b), c), and d). + + iv) Changes in [*] for specific Integration projects based on the latest IBM agreed to [*]. + + f) Any [*] or [*] necessary to update MSL [*] will be paid through a specific purchase order and an acceptable invoice. + + + + + + MSL [*] to be used will be the [*] costs used for [*] in the previous quarter. + + g) Any differences between [*] costs, as defined in Section 7.1, assumptions used in determining [*] at the beginning of a [*] and actual [*] by MSL during the [*] will be determined and agreed in the first month of the following [*]. NIC will be applied to [*] costs differences at the [*] defined in Appendix 1 to this SOW. No other components of [*] will be applied to [*] costs differences. Differences will be invoiced separately to MSL or to IBM as the case may be. + +SECTION 8.0 PURCHASE OF PARTS BY MSL + +8.1 IBM Parts, IBM Strategic Parts, and IBM Designated Parts + + MSL will purchase IBM Parts, IBM Strategic Parts, and IBM Designated Parts solely for use in IBM Products. MSL will provide IBM Strategic Parts and IBM Designated Parts as follows: + + a) IBM procurement may sell IBM Strategic Parts to MSL by specifying price, lead time and other terms with mutually agreed to ordering processes such as; + + i) MSL may order IBM Strategic Parts from IBM procurement through standard purchase orders, and/or + + ii) MSL may issue periodic blanket purchase orders to IBM procurement for lineside stocking and pull logistics requirements for IBM Strategic Parts. + + b) MSL may purchase IBM Designated Parts through IBM nominated suppliers, as agreed to by IBM. IBM will disclose, as confidential to MSL, terms and conditions contained in the subject IBM nominated supplier/IBM contract, which IBM determines are relevant to MSL's performance under the Agreement. MSL shall be responsible for all liabilities to IBM nominated suppliers for IBM Designated Parts ordered by MSL. If an IBM nominated supplier objects, MSL shall immediately inform IBM. IBM agrees to provide reasonable assistance to MSL in resolving the situation. If such IBM nominated supplier refuses to [*] to MSL at IBM's [*], IBM cannot use [*] from such supplier to determine MSL [*] described in Section 7.5 e) i) above, and upon written notice to IBM, MSL will be entitled to increase the [*] of the [*] to + +IBM Confidential Page 16 of 39 sow0501.lwp + + ATTACHMENT 1 + + IBM/MSL Outsourcing Base Agreement Statement of Work + + reflect MSL's actual increase in IBM [*]. The corresponding [*] increase will be effective when MSL begins using and shipping the higher [*] IBM [*]. + +8.2 Parts Cost Reductions + + a) In the event MSL can purchase the same parts as available through IBM Procurement or IBM Designated Suppliers at lower costs, MSL will identify those reduction opportunities to IBM on a monthly basis. + + b) The Parties agree that [*]% of all Parts price reductions will be [*] to IBM when MSL begins using and shipping the lower costs Parts. However, if a specific price reduction is the direct result of a previously IBM approved substantial engineering, design, or resourcing change by MSL, that price reduction will be [*] for a period of [*] months, then [*]% of the Parts price reduction will be [*] to IBM. + +SECTION 9.0 PREMIUM COST + + Premium costs may be incurred in order to meet Delivery Dates. + + a) MSL may submit premium costs to IBM for reimbursement that are in addition to prices defined in Sections 7.1, and 7.2. Premium costs include materials, labor and other extraordinary items. + + b) The Parties agree that [*] of all Parts price reductions will be [*] to IBM when MSL begins using and shipping the lower costs Parts. However, if a specific price reduction is the direct result of a previously IBM approved substantial engineering, design, or resourcing change by MSL, that price reduction will be [*] for a period of [*] months, then [*] of the Parts price reduction will be [*] to IBM. + + b) If Requirements Accuracy, as defined in Appendix 2, exceeds [*]% and if demand is beyond Supply Flexibility as defined in Section 13.2 and Appendix 4, premium costs resulting solely from unplanned + + + + + + demand shall be subject to reimbursement. + + c) Total premium costs for any single event which are equal to or exceed [*] must be pre-approved in writing by IBM prior to MSL authorizing or expending the premium. Total premium costs for any single event which are less than [*] may be incurred by MSL without IBM authorization to later be negotiated with IBM in good faith. + + d) MSL will use the following process for requesting authorization and/or reimbursement of premium costs from IBM: + + e) Premium Price + + i) Material + + MSL agrees to use commercially reasonable efforts to purchase materials at the lowest possible cost within the lead times required or authorized by IBM. However, when materials are not available with IBM's lead times, premium cost for materials may apply. Premium cost for Parts is the [*] (which will not exceed MSL's actual cost paid to it's suppliers to be paid by IBM when the + +IBM Confidential Page 17 of 39 sow0501.lwp + + ATTACHMENT 1 + + IBM/MSL Outsourcing Base Agreement Statement of Work + + Parts are required earlier than on the stated and mutually agreed upon lead time. MSL's request for authorization and/or reimbursement must state: + + (a) Cost variance due to [*]. + + (b) Product(s) part number affected. + + (c) Product(s) quantity affect. + + (d) Justification for Premium. + + ii) Labor + + MSL shall have sole responsibility for setting the compensation rates for its staff. MSL staff shall in no way be deemed to be employees of IBM. + + [*] rate is the rate at which [*] are charged to IBM (as required by IBM), and will be in accordance with the [*] basis. The [*] rate shall not exceed [*]([*]%) of [*] rate. The actual [*] will be negotiated on a case-by-case basis by IBM and MSL and will not exceed MSL's actual [*] paid to its [*] and [*]. MSL's request for authorization and/or reimbursement must state: + + (a) Purchase price variance due to [*] or [*]. + + (b) Quantity of [*] by Product(s) part number. + + (c) Quantity of units to be shipped due to [*]. + + (d) [*] Rate: US dollars/hour. + + (e) Justification for [*]. + + MSL agrees that it will invoice quoted Direct Labor Hours for actual Products Delivered. + + iii) Extraordinary Items + + MSL may propose premium rates for expedited tooling orders, premium transportation, and other extraordinary requirements. If IBM agrees that the resources are required, MSL and IBM will negotiate in good faith the price for such resources. + + MSL will report all open premium costs, which are subject to request for reimbursement by IBM as a part of monthly Measurements. + +IBM Confidential Page 18 of 39 sow0501.lwp + + ATTACHMENT 1 + + IBM/MSL Outsourcing Base Agreement Statement of Work + +SECTION 10.0 ORDER MANAGEMENT, DELIVERY, AND SHIPMENT + + + + + +10.1 Order Management + + a) IBM Customer Orders will be placed from IBM to MSL. MSL will fulfill these orders according to the Performance Appendix 3 unless IBM gives MSL specific written instruction otherwise. MSL will ship and deliver these Products in accordance with the ship and delivery dates stated on the order. In the case of Integration, shipments and deliveries will be made in accordance to the customer roll out schedules provided by IBM. MSL will conform to the stated lead times agreed to and published by IBM to the Delivery Point as long as the requested Delivery Date on the IBM Customer Order falls within MSL's commitment to the forecast. Product lead times are published in the Product Attachments. + + b) MSL will manage the applicable IBM Customer Order back logs. These include but are not limited to AAS, EOSE, GEMS, IPRs, Q-Ship, MES and others as defined by IBM. In conjunction with these IBM ordering channels MSL will perform Order Desk responsibilities. MSL will review all orders requesting delivery improvements, improving these order to satisfy the customer required delivery dates given supply continuity and available capacity. At [*] to IBM, MSL will accept [*]. Deferments will be requested of MSL through the IBM ordering systems mentioned above, or in writing from IBM. MSL will reschedule the deferred orders to meet the requested ship dates. In addition MSL will accept request to alter order content if Parts and capacity are available. MSL will respond to all request to improve, defer and/or alter orders in [*] Days. MSL agrees to maintain the above mentioned IBM Customer Order backlogs keeping these back logs up to date. MSL agrees to maintain local Order Desk support in the geography specific Work Center. + + c) MSL agrees to perform materials requirement planning ("MRP") on top level requirements input and acquire the appropriate Parts to support Delivery Dates and IBM Customer Orders. This includes the placing of purchase orders and/or IPRs on suppliers, some of which may be IBM locations. + + d) Due to the high commonality of Parts in IBM's Products, MSL will allow IBM to revise Product model mix as required. MSL will acknowledge IBM's Product mix changes within [*] Days after receipt of IBM's change notice. + +10.2 Schedule / On Time Delivery + + a) MSL will maintain [*] ([*]%) on time shipment. Specifically Product(s) are to arrive in full at the Delivery Points on the Delivery Date. + + b) MSL agrees to track and report on shipments/deliveries to IBM customers per the IBM Customer Orders at the request of IBM. + +IBM Confidential Page 19 of 39 sow0501.lwp + + ATTACHMENT 1 + + IBM/MSL Outsourcing Base Agreement Statement of Work + +10.3 Delivery + + a) Title and risk of loss to Products shall pass to IBM at the time of shipment from the Delivery Point unless otherwise stated in Section 15.0. + + b) If Product shipments are made prior to the Delivery Date without IBM's prior written approval, IBM may elect to delay passage of the title until the Delivery Date. If the delivery is late then transfer of Product title will be made on the later date. In addition MSL will not deliver Products in quantities in excess of those set forth in on the IBM Customer Order, without IBM's prior written approval. + +10.4 Delays in Shipment + + MSL shall notify IBM immediately of any anticipated late deliveries and any impending plant or facility shut downs for any reasons. If MSL fails to ship Product to the Delivery Point on schedule for any reason other than Force Majeure or delays caused substantially by IBM, MSL shall ship Product to the Delivery Point by air or in the most expeditious manner possible. After MSL delivers Product to the Delivery Point, MSL will ship Product to the designation stated on the IBM Customer Order by air or in the most expeditious manner possible. MSL will be responsible for any additional premium costs associated with the late shipment of Product not only to the [*] but also to the [*] stated on the IBM Customer Order. + +10.5 Shipment Terms + + + + + + a) The prices set forth in Section 7.0 Product Price include MSL's out of pocket costs for freight, duty, customs, clearance, and appropriate insurance, and any other costs related to the shipment, export, or import of the Products before delivery to IBM. The cost are the responsibility of MSL. The method of transportation shall be suitable surface or air transport to the Delivery Point, Customer location, or point of entry sufficient to meet IBM's Delivery Date. The Product Attachment(s) shall state the Delivery Points. + + b) MSL shall arrange shipment with IBM carriers that will deliver product to the destination on the IBM Customer Order in time for the product to arrive on the committed arrival date which is stated on the Customer Order. MSL shall utilize IBM carriers for all outbound shipments, unless prior written approval from IBM to do otherwise. IBM's approval will not be unreasonably withheld. Contractual conflict with IBM carriers, or added IBM cost are some, but not all, reasonable causes for denial of IBM approval. + +SECTION 11.0 PRODUCT FORECAST + +11.1 MSL agrees to participate in the IBM supply and demand process adhering to the IBM EMLS corporate calendar. MSL will utilize the EMLS regen and or provide the input into EMLS to insure a successful supply and demand interlock. The EMLS regen must include all part numbers consumed in the Charlotte Work Center. + +IBM Confidential Page 20 of 39 sow0501.lwp + + ATTACHMENT 1 + + IBM/MSL Outsourcing Base Agreement Statement of Work + +11.2 Each month IBM will provide MSL, one rolling [*] month forecast by machine type, model, and by geography. This forecast will be MSL's authorization to order/purchase Parts only for the fulfillment of orders, in accordance to the IBM published lead-times for such materials. Products shall be produced and delivered according to actual intake of IBM Customer Orders. MSL will participate in the process of requirements planning by giving the best Product supply projection and participating in cross functional meetings when required. + + The following will apply: + + a) The forecast will contain anticipated Delivery Dates for specified quantities of machine types, models and geographies and lead-time profile updates, as required, for specific Parts. + + b) MSL will notify IBM within [*] Days of receipt of a forecast if MSL is unable to meet the quantities and Delivery Dates. If MSL fails to notify IBM within the [*] Days, MSL will be deemed to have accepted the quantities and Delivery Dates and will be bound by them; provided, however, that MSL's actual or deemed acceptance of any forecast shall be subject to the availability of IBM Parts and IBM Designated Parts as needed, and MSL shall not be subject to any penalties (and IBM shall not be able to reject any proposed rescheduling of Delivery Dates) under this Agreement for failure to meet Delivery Dates due to the unavailability of such Parts at the times necessary to meet Delivery Dates, provided further however that such unavailability of IBM Parts or IBM Designated Parts is not due to MSL's failure to properly order such Parts or otherwise properly manage its relationship with the provider of such Parts. + + c) If MSL notifies IBM that it cannot meet the quantities and Delivery Dates in IBM's forecast, MSL's notification will include the quantities MSL can deliver within the forecast's Delivery Dates and proposed schedule of Delivery Dates for delivering the quantities MSL cannot deliver within the forecast. IBM shall notify MSL in writing, within [*] Days of receipt of MSL's notification, of its decision either, in its sole discretion to: + + i) agree to the quantities and Delivery Dates in MSL's notification, which will then become binding upon both parties; or + + ii) agree to the quantities that will meet the forecast's Delivery Dates, which will then become binding on both parties, and either begin good faith negotiations with MSL to resolve any shortfall or reject MSL's proposed schedule for the remaining quantities; or provided, however that IBM may not reject MSL's proposed schedules if the reason for MSL's inability to meet the Delivery Dates is directly attributable to a breach of this Agreement by IBM. MSL may, with IBM's prior written approval and at MSL's expense, employ another manufacturer for the quantities that MSL cannot deliver within the forecast for the affected products. Notwithstanding any other term of this Agreement, if IBM rejects all or any part of MSL's proposal, IBM shall also be free to seek + + + + + +IBM Confidential Page 21 of 39 sow0501.lwp + + ATTACHMENT 1 + + IBM/MSL Outsourcing Base Agreement Statement of Work + + another manufacturer (internally or externally) for the quantities MSL can not deliver within the forecast for the affected Products. + + iii) If good faith negotiations fail to resolve the shortfall within [*] Days, IBM shall have the option to reject MSL's whole proposal. + + d) The forecasts provided by IBM, or agreed to by IBM hereunder, do not obligate IBM to purchase any Product. + +11.3 Feature Forecast + + a) MSL agrees to perform all feature forecasting as part of their responsibilities. MSL agrees to forecast features in full support of the requirements forecast that IBM passes at a machine type level per Section 11.1 above. + + b) MSL will notify IBM within [*] Days of receipt of the monthly requirements forecast, at the machine type level, if MSL is unable to support the features necessary to meet the Delivery Dates of the machine types per Section 11.1 above of this Agreement. + +SECTION 12.0 ENGINEERING CHANGE + + a) MSL is required to inform IBM of any necessary or required EC which would be applicable to the Products in general. In no event shall MSL make any changes or incorporate any modification to Products without the prior written agreement of IBM. + + b) IBM may, at its option, propose ECs to the Products to be delivered, in which event MSL will be notified in writing. MSL agrees that IBM shall have the right to require the incorporation of such ECs and MSL shall, within [*] Days of such notification, give to IBM a written evaluation of EC stating the cost increase or cost decrease to the Products. In addition, this evaluation should include, but is not limited to, MSL's evaluation of the ECs effect on the inventory, delivery schedules and impact effect on function, reliability and performance of Products. If such evaluation cannot be completed within such period, notice to this effect shall be given by MSL as soon as MSL learns that such evaluation cannot be completed and in no event later than the [*] Days following notification. MSL will give IBM a future completion date and reason for delay in such notice. + + c) Upon completion of MSL's evaluation, IBM and MSL agree that 1) MSL will implement the EC after MSL has received IBM's consent in writing to the mutually agreed upon cost and delivery schedule, 2) MSL will provide additional information that IBM may reasonably require to further evaluate the EC, or 3) IBM will cancel the specific EC. + + d) ECs will be brought to the attention of MSL via Engineering Change Notifications (ECNs), that may have various forms, and may come from IBM or IBM designated parties. However, the ECN is not an authorization to execute the change. Upon receipt of an ECN, MSL will respond by quoting the cost of that EC to IBM. MSL will not implement any EC without an explicit authorization from IBM to implement it. The + +IBM Confidential Page 22 of 39 sow0501.lwp + + ATTACHMENT 1 + + IBM/MSL Outsourcing Base Agreement Statement of Work + + ECN will contain information such as priority of change (routine, expedited, emergency), description of change, machines effected, requested implementation date, marked up prints, marked up bill of materials, dispositions and recommended/specified sourcing. Appendix 5 contains requirements for EC process flow and EC cycle times. + + e) MSL will process ECs according to IBM rules and specific IBM requirements, and will enter corresponding data in EC application systems. MSL will need to have the capability to receive IBM development released ECs in both the Charlotte Work Center and the Valencia Work Center. + + f) EC administration cost are included in the prices as defined in Section 7.0. + + + + + +SECTION 13.0 INVENTORY + + a) MSL is fully responsible for inventory ownership, excluding consigned inventory, however MSL agrees to manage all inventories. MSL will manage the material in the supply pipeline, as well as own and manage work in process and finished goods until shipment of the Product to the IBM Customer Order. On the Effective Date, MSL will accept responsibility and liability for all open purchase orders and IPRs for Parts, excluding Consigned Parts, which are required by Products listed in the Product Attachments. MSL owns inventory, excluding consignment, until title transfer at the time of shipment. IBM will not be responsible for any associated carrying costs, warehousing costs, excess and or scrap of MSL owned inventory. If requested by IBM, MSL will subcontract to IBM the scrapping of Parts owned by MSL. Actual costs charged to IBM by certified scrap suppliers for the scrapping of Parts owned by MSL will be invoiced by IBM to MSL. + + b) MSL will control all inventories in support of this Agreement per IBM's guidelines concerning value classified parts, IBM Document CP10.13. + + c) MSL will also be responsible for the data management necessary to separate IBM consigned inventory from MSL inventory within the same facility and systems. + + d) MSL will perform Rotating Inventory Audits and Counts (RIA/RIC) on IBM consigned inventory in compliance to IBM's instructions. + + e) MSL and IBM will review inventory monthly, during this review MSL will provide a written report that includes the items detailed under Inventory in the Performance Appendix. + + f) MSL prices include charges for MSL inventory management and ownership. Both parties agree that IBM has no liability for inventories that MSL purchases for the purposes of this contract, providing that forecast (requirements) accuracy is equal to or greater than the level defined in Appendix 2. If Requirements Accuracy falls below [*]% liabilities for any machine type for any quarter, IBM will compensate MSL according to the method describe in Appendix 2. + +IBM Confidential Page 23 of 39 sow0501.lwp + + ATTACHMENT 1 + + IBM/MSL Outsourcing Base Agreement Statement of Work + +13.1 Consigned Products + + a) MSL acknowledges that it will manage inventory consigned to MSL by IBM. As it relates to Integration, MSL will manage not only IBM consigned inventory but also inventory consigned to MSL by IBM's customers. + + b) MSL will be [*]% for inventory accuracy within the logistics systems and related financial liability for all consigned Products under MSL's control. MSL will be responsible for all lost, damaged, or destroyed Parts. MSL will provide replacement value insurance coverage for consigned Products. IBM will be named as a joint insured with respect to consigned Products for its interest. IBM shall have the right at all reasonable times to audit and inspect the consigned Products. MSL will take no actions that might encumber IBM's consigned Products. + + c) MSL will also provide the following services as it pertains to managing IBM consigned Products; receiving, storage, disbursement, handling, order management, order fulfillment, packaging, light manufacturing, and shipping. + + d) MSL will provide inventory reports on all consigned Parts. These reports will contain at least the information required in the Performance Appendix 3. In case of Integration consigned inventory will be reported by customer account. + + e) MSL agrees to furnish resources, at no additional cost, as part of this agreement to assist in the annual physical inventory audit of consigned inventory that MSL is managing on IBM behalf. + + f) MSL must assist IBM in processing any scrap for consigned Products without additional charge to IBM. + + g) If IBM and MSL mutually agree to change a Part from a non-consigned Products to a consigned Products, the Parties agree that IBM will purchase MSL's inventory of affected Parts on the date of the change at MSL actual cost that was paid to the supplier plus NIC. + + h) MSL shall store all consigned Products in separate locations from all other Parts and or Products belonging to any other person or + + + + + + company so as to clearly identify the consigned Products as property of IBM. In the case of Integration consigned inventory will be stored and identified in logistics and physically by customer account. + + i) Work labor and materials applied to the management of the consigned inventory by MSL in the course of the performance of this Agreement shall be paid for by IBM, as defined in Section 7.0, in accordance with the terms of this Agreement and shall not at any time give rise to any claim over the consigned Products. MSL hereby waives any rights it may have to claim any liens against consigned Products. + + j) MSL will handle the scrapping of IBM consigned inventory per IBM's guidelines concerning scrap. + +IBM Confidential Page 24 of 39 sow0501.lwp + + ATTACHMENT 1 + + IBM/MSL Outsourcing Base Agreement Statement of Work + +13.2 Supply Flexibility + + a) MSL will ensure flexibility for volumes, as specified in the Supply Flexibility Appendix 4. + + b) Quarterly, MSL will update IBM on progress in improving Supplier Flexibility. + + c) IBM will use commercially reasonable efforts to transfer LSS and SSS arrangements with IBM suppliers to MSL. + + d) [*] months before EOL, MSL and IBM will agree on a transition plan to regulate the flexibility. + + e) Cost of the Supply Flexibility as defined in Appendix 4 is included in Product pricing per Section 7.0. IBM will have no liability for unused flexibility. + +13.3 End of Life ("EOL") Inventory + + a) IBM agrees to share an annual plan with quarterly updates on product EOL activity. Included will be the following scheduled events: product withdrawal, end of manufacture, and transfer to IBM, if applicable. + + b) MSL agrees to provide inventory planning support and squared set analysis on these inventories participating in EOL activities prior to any transfer to IBM. Any inventories not transferred to IBM will remain the sole responsibility of MSL. + +13.4 Sale of Inventory + + MSL agrees not to sell excess or surplus inventory purchased by MSL in support of this Agreement without the prior written approval of IBM which shall not be unreasonably withheld. + +SECTION 14.0 INTEGRATION + +14.1 Overview + + The typical Integration consists of: assembly, unit testing, code load, system test, personalization, repackaging and distribution. + +14.2 Customer Integration Statement of Work (Integration SOW) + + IBM will provide MSL with a work scope for Integration for each Integration project. Based on the work scope, MSL will provide IBM with a SOW and the associated direct labor hours. This will be the base from which future modification to the individual SOW will be based. + +IBM Confidential Page 25 of 39 sow0501.lwp + + ATTACHMENT 1 + + IBM/MSL Outsourcing Base Agreement Statement of Work + +14.3 MSL Account Coordinator + + The account coordinator is the primary interface with IBM project managers and/or customers for the delivery of Integration Products. This person will be responsible for insuring that the necessary IBM Products which are delivered by MSL are on order, that a roll out schedule is received by MSL, the necessary consigned Products are received in sufficient time prior to their need in the Integration process and/or delivery to the customer, the required software is received, the line processes are in place, the necessary pilots have been performed and the work is properly scheduled on the line to insure an on time delivery. They are the prime + + + + + + contact for problem resolution, issues, concerns, delivery tracking and all other issues which affect customer satisfaction. + +14.4 Responsibilities + + a) IBM will be responsible for defining the process to be used on the Integration line, for the assembly and test of those Products being customized, tested or passed through the process. MSL will be responsible for defining the process to be used on the Integration line, for the code load and system test of units requiring this work. + + b) MSL will be responsible for the implementation and execution of these processes. MSL will be responsible for maintaining the necessary technical support to implement these processes and identify problems in the integration process. Process deficiencies will be brought to the attention of the IBM Integration program manager staff for resolution. Deficiencies realized due to customer provided items will be resolved directly with the customer through the MSL account coordinator or by the technical staff, whichever is appropriate. + + c) MSL will own the entire manufacturing and delivery process and be the sole interface with the customer (IBM and/or end user) through the account coordinators. + +14.5 Inventory Management + + a) Provide a secure environment for the management and control of consigned Products. This area should be fenced, with limited access and within a reasonable distance from the manufacturing area and the receiving docks. + + b) An automated inventory management system must be used to track receipts, disposition and balance on hand at any point in time. Information required by IBM personnel performing project management activities for customers will be provided on an 'as required' basis and will be readily available to such personnel. This inventory must be labeled (bar coded) and separated by customer. + + c) Physical inventory counts are to be performed as needed for all consigned inventory, for each customer, counted at least every [*] Days with a accuracy target of [*]. This target is based on the delta between the actual inventory count and the inventory management system. Discrepancies are to identified, root cause analysis performed, results reported (quarterly) and corrective actions initiated. MSL is responsible for the cost associated with the replacement of IBM and/or IBM customer + +IBM Confidential Page 26 of 39 sow0501.lwp + + ATTACHMENT 1 + + IBM/MSL Outsourcing Base Agreement Statement of Work + + consigned Products which have been received by MSL and need to be replaced as the result of theft or negligence. + + d) All consigned inventory is the responsibility of MSL until Delivery. + +14.6 Manufacturing + + a) The integration line should use a line control system that ties to an automated ordering system that provides order accuracy, tracking, disposition and history. The work environment should be kept presentable and organized and available for customer tours. + + b) Incomplete shipments, with the customer approval, should use a deviation process and be documented with the customer authorization. + + c) The manufacturing process must continue to use the line break in, pilot and certification process currently in use unless mutually agreed to in writing. + +14.7 On Site Repairs + + a) The consigned Product set may include both IBM and non-IBM Products, new as well as used which may or may not be covered by a new product warranty, IBM maintenance or another maintenance provider. In the case of IBM logo Products, MSL will initiate repair of these Products in the most cost effective and efficient manner. In the case of repairs required to be performed by the third party maintainers, MSL will provide a suitable work area for these repairs and ensure that the necessary security requirements are met when visited by non IBM personnel. When consigned Product defects are to be returned to the manufacturer for either repair/replacement, MSL will control this process. + + b) Out of box failures of RS Products will be replaced from inventory or repaired as directed by IBM. These replacements are to be given priority over new orders during times of product constraints. + + + + + +14.8 Packaging + + Integrated machines may require unique packaging based on their configuration and the individual customers requirement. MSL will design these boxes in accordance with IBM design criteria to insure that they provide maximum protection against in route damage. All shipping containers must be labeled in accordance with the guidelines outlined in the Section 16.0 Packaging and in addition to any unique labeling customer requirements. + +14.9 Security + + a) Sufficient security must be provided for work in process items, customer and MSL/IBM provided. In addition, secured spaces will be required from time to time for individual customers depending on the nature of the work. Currently there is a contractual requirement for secured space to perform the US Postal Service, hard drive, code load program. + +IBM Confidential Page 27 of 39 sow0501.lwp + + ATTACHMENT 1 + + IBM/MSL Outsourcing Base Agreement Statement of Work + + b) All reasonable precautions must be exercised to prevent unauthorized access, use, modification, tampering or theft of software and hardware consigned to MSL for the execution of Integration. Also, these precautions must prevent unauthorized access to a customer's remote system used in the performance of Integration. + +14.10 Scheduling + + Product orders placed on MSL by IBM, in most cases, the CRAD (Customer Required Arrival Date) will tie to the Integration roll out delivery date. In those cases where there is a difference, MSL will validate the correct delivery date with the IBM project manager. If an improvement or deferral is required in the Product build schedule and based on Product availability, MSL will schedule the Product build to insure arrival by the required CRAD. + +14.11 Delivery + + MSL will maintain [*] percent ([*]%) on time delivery, measured against the CRAD date in the integration roll out schedule. Due to the nature of the integration orders, there is no [*] option, unless agreed to prior to shipment by the IBM project manager and/or the customer. + +14.12 Customer Satisfaction + + Customer satisfaction is the responsibility of MSL. IBM will measure the customer satisfaction via surveys. MSL commits to a customer satisfaction target of [*]. This will be a reflection of MSLs on time deliveries, flexibility in meeting the customers unplanned requirements, the quality of the services performed and MSL's relationship, in general with IBM's customers. The customer set will include the IBM Global Services project managers and IBM's customers. + +14.13 Integration Quality + + The service being performed is to be of high quality and free from process defects. The target objective will be [*]%, measured monthly. MSL will be responsible for the repair and/or replacement of Parts and Products which have been damaged during the performance of the Integration. MSL will be responsible for cost incurred by IBM as a direct result of MSL's failure to follow the Integration procedures subject to the limitations contained in Section 15.3 of the Base Agreement. + +14.14 Price + + a) IBM will establish a list of those items which are standard components of the Integration process. IBM and MSL will agree upon an execution time and a price, as stated in Section 7.2 b), for each standard item. Integration requirements outside of these standard items will be individually determined. Once these prices for these standard items are established they will remain in effect during the entire term of this Agreement. + +IBM Confidential Page 28 of 39 sow0501.lwp + + ATTACHMENT 1 + + + + + + IBM/MSL Outsourcing Base Agreement Statement of Work + + b) MSL will be responsible to track items which are beyond the individual Integration SOW being executed when performed at IBM's request and provide sufficient documentation to support the price along with IBM's authorization of the added cost. MSL will invoice IBM weekly for these costs. In those cases when a specific request becomes standard, or a change in effort is requested by a customer, a revision to the Integration SOW will be made and the contracted price between IBM and MSL will be updated. + + c) MSL will be responsible for any cost beyond the agreed to [*] if these costs were within the control of MSL. + +14.15 Transportation + + a) Premium outbound transportation may be used when requested by a customer. In these cases, MSL must provide sufficient documentation of the customer approval, and to support the cost. + + b) If premium outbound transportation is necessary due to MSL's failure to ship on time, this cost is the responsibility of MSL and IBM will invoice MSL for these costs. + +14.16 Integration SOW Completion + + At the completion of an individual Integration SOW, a complete reconciliation will be completed within 60 Days. This reconciliation will be between MSL and the IBM project manager/customer and will include, but not limited to, an inventory reconciliation, any outstanding cost and disposition of all customer software and hardware in MSL's possession. + +14.17 Equipment + + IBM will identify the current equipment, owned by IBM, needed to perform Integration and it will be made available to MSL at an agreed to price per Attachment 3 of the Base Agreement. If, at any time, MSL chooses to replace Integration support equipment and the associated programs, IBM's written concurrence will be required. + +14.18 Restrictions and Limitations + + Nothing in this Agreement authorizes MSL to use any of IBM's tangible, real or intangible property for the performance of any services contemplated hereunder on IBM Logo products or for Integration services of non-IBM Logo products related to a customer for whom Integration is being provided by IBM. In any event, MSL will ensure that the IBM customer delivery schedules will not be impacted based on other performance obligations it may have during the term of the Agreement. + +14.19 Measurements/Reports + + a) MSL will be required to provide IBM with monthly reports detailing their performance in relation to these Integration. + +IBM Confidential Page 29 of 39 sow0501.lwp + + ATTACHMENT 1 + + IBM/MSL Outsourcing Base Agreement Statement of Work + + These monthly report should provide at a minimum: + + i) On time delivery + + ii) Quality + + iii) Inventory management + + b) The specific targets are covered in this document under their appropriate sections. These measurements should include a root cause analysis, MSL actions to resolve and an action plan to achieve the targeted objectives when there are deficiencies. + +SECTION 15.0 DROP SHIPMENTS + + MSL will complete processes required to meet the following obligations within [*] Days following the Effective Date. + + a) For Drop Shipments to IBM, MSL will be responsible for all activities required to deliver the Products to the destination port of the IBM company in the destination country. MSL will issue an IBM invoice to the destination IBM company on behalf of the IBM business area invoiced by MSL for these deliveries. MSL will ensure that invoices and other required documentation are ready at the destination port for timely importation into the country, but, MSL will not be responsible for importation into the destination + + + + + + country. + + b) For Drop Shipments in AP, MSL will transfer title to IBM when Products are in "highseas" and after MSL has exported them through the customs of the country of origin of the goods. + + c) For Drop Shipments to IBM customers, MSL will be responsible for all activities required to deliver products to the customer in the destination country, independently of when MSL transfers title of property to IBM. MSL will be responsible for importation into the destination country and delivery of Products to the customer after clearing customs in that country. MSL will provide information to IBM to allow IBM to issue an invoice to the final customer. + + d) For Drop Shipments to IBM US or IBM CANADA customers, MSL will transfer title to IBM at the port of entry at USA or CANADA after MSL has imported them through USA or CANADA customs. + + e) MSL will ensure timely distribution operations, irrespective of whether MSL or another subcontractor is selected for outbound distribution. + + f) MSL will comply with the IBM Import/Export Operation Application and Instructions. + +IBM Confidential Page 30 of 39 sow0501.lwp + + ATTACHMENT 1 + + IBM/MSL Outsourcing Base Agreement Statement of Work + +SECTION 16.0 PACKAGING + + MSL must meet requirements of IBM specification GA219261. MSL must also package all Products according to packaging Specifications listed in the Product Attachments. Each delivered container must be labeled and marked so that the contents of the package can be identified without opening and all boxes and packages must contain packing sheets listing contents. IBM's part number, quantity and appropriate purchase order number must appear on all packing sheets and bills of lading. In addition to standard IBM packaging requirements, MSL must meet packaging, labeling and packing sheet requirements of OEM customers. + +SECTION 17.0 QUALITY + +17.1 Commitment + + MSL commits to provide all Products and related processes and material in conformance in all material respects with the requirements of all applicable IBM and MSL specifications. MSL shall ensure that with respect to assembly and workmanship, all material requirements, IBM's quality requirements and all applicable industry standards are met. + +17.2 Quality Requirements + + a) MSL's target is [*]% defect free production. MSL shall follow an established continuous improvement program directed toward zero defect production. MSL will report progress quarterly to IBM. MSL will provide quality reports monthly as defined in the Product Attachments. + + b) MSL shall at all times maintain ISO 9001 or 9002 registration. MSL will achieve ISO 14001 Environmental Management Certified, by 12/31/98, for all Work Centers that are active in the execution of this contract. Other specific standard compliance requirements are defined in the Product Attachments. + + c) For MSL's programs described in 17.2 a above, MSL will maintain pertinent control charts in fundamental variables or attributes that affect IBM's specifications. These charts will be updated on a periodic basis, and provided to IBM upon request. Exceptions to the limits will be highlighted to IBM along with corrective action plans. + + d) A philosophy of continuous improvement shall be stated and practiced. This means that effort will be expended to improved processes by reducing or eliminating causes of variability, even after the process is "in control" to meet specifications. + + e) Modifications, adds or deletions, to process steps by MSL must be done with concurrence by IBM. + + f) MSL will take demonstrable action whenever a process goes out of control parameters. The record of what was done and what results were achieved shall be clearly documented and related directly on the control charts. + +IBM Confidential Page 31 of 39 sow0501.lwp + + + + + + ATTACHMENT 1 + + IBM/MSL Outsourcing Base Agreement Statement of Work + + g) MSL will maintain an ongoing reliability test program for Products requested by IBM (quality plan attachments) and will submit reports as specified in the appropriate specification(s) listed in the Product Attachment(s). + + h) MSL shall supply a Failure Analysis report for rejected material within [*] weeks after receipt. After the Failure Analysis plan is completed, MSL shall forward a corrective action plan for MSL Procured Parts that is acceptable to IBM. MSL is responsible for first pass Failure Analysis (i.e. identification of the failure to the level of material provided to MSL by IBM) on IBM provided materials. IBM may provide engineering support to investigate any IBM Nominated Supplier components which are confirmed defective by MSL failure analysis, but which are reported NDF (No defect found) by the IBM Nominated Supplier. + + i) IBM and MSL will conduct regular meetings together to cover open issues. Both parties will share openly their problems relevant to the relationship. + + j) MSL shall follow the quality specifications identified in the Product Attachments. + +17.3 MSL Support for IBM Customer Warranty + + MSL agrees to: + + a) provide IBM a monthly shipment list by machine type and serial number, as listed in the attached Performance Appendix, + + b) identify at product level all units to facilitate recall or notification, + + c) obtain supplier support to implement needed changes, + + d) support IBM services planning groups on warranty cost reduction task forces as needed, + + e) receive warranty and quality claims from the field, including OEM customers, perform first pass failure analysis when needed, and forward data and materials to their sources, or to IBM under IBM instruction, + + f) provide warranty replacement support to OEM customers to include receiving, tracking; and fulfillment of parts replacement to OEM customers and, + + g) provide Part traceability to machine serial number as defined in Product Attachments. + +SECTION 18.0 ACCEPTANCE TEST + + a) IBM may conduct, at its own expense, source inspection, , and/or acceptance tests to assure that Products furnished by MSL conform to specification, samples and/or descriptions as set forth in this Agreement and the Product Attachment(s). IBM may reject any units of Product which it finds in good faith not to meet the specifications of this Agreement in any material respects. IBM should perform incoming inspection within [*] Days after receipt of goods by IBM. If IBM has not notified MSL of any defects in a unit of Product within [*] Days of receipt, such unit shall + +IBM Confidential Page 32 of 39 sow0501.lwp + + ATTACHMENT 1 + + IBM/MSL Outsourcing Base Agreement Statement of Work + + be deemed to be accepted. Acceptance by IBM of Product shall not relieve MSL of any responsibility for latent non-conformance with IBM specifications, fraud, negligence, title defects, or infringement or warranty. Failure by IBM to perform testing shall not be construed as a waiver to later asserting claims based on such above mentioned defects. + + b) Acceptance of new Products by IBM shall not occur until a letter documenting acceptance and any conditions of acceptance has been issued to MSL by IBM. New Products are not subject to the [*] Day from receipt requirement defined in the preceding paragraph. + +18.1 Nonconforming Acceptance + + a) IBM may choose to accept Products which fail to conform to the + + + + + + specifications established in a Product Attachment without prejudice to its right to reject nonconforming items in the future. If IBM so chooses, IBM will notify MSL of its intent to accept nonconforming items. MSL agrees to negotiate in good faith a price reduction for such items based upon IBM's reasonable added expense to correct and otherwise deal with such deficiencies. After the parties agree on a price, IBM will notify MSL that IBM has accepted the nonconforming items. No items for which IBM has issued a notice of nonconformance shall be deemed accepted, except as provided in the first sentence of this Section. + + b) IBM's payments for Products shall not signify that IBM has accepted Product. + +SECTION 19.0 WARRANTY + +19.1 Scope of Warranty + + a) MSL expressly warrants that all Products, MSL supplied materials and Parts, and work prepared for IBM will conform in all material respects to the specifications, drawings, or other descriptions furnished or adopted by IBM, and will be of specified quality, good workmanship, and free from defect subject to the following terms: + + i) MSL's warranty for IBM Designated Parts will be as long as, and will be on the same terms and conditions as the Parts supplier's warranty stated in the relevant purchasing contract. + + ii) MSL will not provide a warranty for IBM Parts. However, MSL will provide Failure Analysis for such parts. MSL will process such failed Parts as "Return to MSL for credit to IBM" in a timely manner. + + iii) MSL will not provide a warranty for consigned Products. However, MSL will provide failure analysis for such Products. MSL will process such failed Products per IBM's instruction in a timely manor. + + iv) MSL will warrant all MSL Procured Parts for [*] months unless otherwise stated in the applicable Product Attachment, or agreed to by IBM in writing. + +IBM Confidential Page 33 of 39 sow0501.lwp + + ATTACHMENT 1 + + IBM/MSL Outsourcing Base Agreement Statement of Work + + v) MSL will warrant its workmanship for [*] months unless other stated in the applicable Product Attachment. + + b) All of the above described warranty periods will commence on the date that the Products containing the above Parts are delivered to IBM. The above warranties shall survive acceptance test, and IBM's Product test procedure. MSL's warranty described above also covers latent defects resulting from MSL's specification, workmanship, process, and/or Parts purchased from MSL's suppliers and IBM's Nominated Suppliers. + +19.2 Defective Field Replaceable Units + + a) A defective FRU shall be a FRU that does not conform in all material respects to that Product's particular specifications. + + b) IBM will return defective FRUs that are under warranty to MSL freight collect. MSL will perform Failure Analysis and incoming inspection and testing as described in the applicable Product Attachment for FRU's rejected or returned to MSL which are still under warranty. If the rejected FRU passes all inspection and test criteria, the FRU shall be classified as NDF and such FRU shall be returned to IBM freight collect. + +19.3 Exclusions + + The warranty set forth above specifically excludes and does not apply to defects caused by a) the use or operation of the Product in an application or environment other than as described in or contemplated by the specifications issued by IBM or b) IBM or the end user through misuse, excessive shock or improper maintenance procedures. + +19.4 Title + + MSL warrants that the title to all Products purchased by and delivered to a Delivery Point under this Agreement shall be free and clear of all liens, encumbrances, security interests or other adverse interests or claims. Title and risk of loss shall pass from MSL to IBM at time of shipment per the IBM Customer Order, unless otherwise stated in Section 10.0. + + + + + +19.5 Returned Product Turn Around Time + + MSL shall set an objective to complete Failure Analysis, repair or replacement of defective Products, within [*] Days after receipt from IBM. Upon or before the [*] Day, MSL will ship the repaired or replaced Product, to IBM at MSL's expense. If repair or replacement is not possible, MSL will refund to IBM, MSL's price associated with the failed Product, that is under warranty and the price paid by IBM to MSL or any third parties or the intercompany transfer price for IBM Parts, for all Parts, if the price of such Parts were not included in MSL's price. + +19.6 Implied Warranties + + a) MSL'S WARRANTY OBLIGATIONS DESCRIBED IN THIS SECTION 19 ARE IN LIEU OF AND ENTIRELY REPLACE ALL OTHER TERMS AND CONDITIONS RELATING TO THE QUALITY, MERCHANTABILITY, CONFORMANCE TO + +IBM Confidential Page 34 of 39 sow0501.lwp + + ATTACHMENT 1 + + IBM/MSL Outsourcing Base Agreement Statement of Work + + SPECIFICATION AND/OR FITNESS FOR PURPOSE OF THE PRODUCTS, WHETHER EXPRESS OR IMPLIED, WHICH OTHER TERMS AND CONDITIONS ARE HEREBY EXPRESSLY EXCLUDED. + + b) IBM'S WARRANTIES CONTAINED HEREIN AND ANY PRODUCT ATTACHMENT WITH RESPECT TO PARTS, IF ANY, ARE IN LIEU OF AND ENTIRELY REPLACE ALL OTHER TERMS AND CONDITIONS RELATING TO THE QUALITY, MERCHANTABILITY, CONFORMANCE TO SPECIFICATIONS AND/OR FITNESS FOR PURPOSE WHETHER EXPRESS OR IMPLIED, WHICH OTHER TERMS AND CONDITIONS ARE HEREBY EXPRESSLY EXCLUDED. + +19.7 Epidemic Failure + + In the case where any specific Product, shipped to IBM from MSL within any [*] month experiences a defect rate of [*]% or greater, resulting from a common cause due to MSL's non-conformance to specifications, drawings, other descriptions furnished or adopted by IBM, or due to workmanship, MSL will accept the cost of a Product Recall. + +SECTION 20.0 COMMON TOOLING + + Tools commonly used in production and/or Integration will be owned and managed by MSL. + +SECTION 21.0 TOOLING TO BE ACQUIRED + +21.1 Purchase + + a) MSL will submit requests for additional tooling, if any, quarterly for inclusion in IBM's capital request process. + + b) MSL shall not purchase any tooling or other capital equipment on IBM's account without IBM's prior written approval. + + i) If specifically required in a Product Attachment, IBM will supply tooling for Products to MSL. It shall be IBM's option whether the tooling will be consigned by IBM to MSL or purchased by MSL. + + ii) If IBM elects to have MSL purchase tooling, MSL shall be responsible for the design, cost and build of all new or replacement tooling which shall be capable of producing Product in accordance with the IBM specification in the Product Attachment. MSL warrants that the tooling used under this Agreement shall be capable of producing the quantity of Product as specified by IBM. + + iii) If IBM elects to have MSL purchase the tooling, MSL shall invoice IBM for the cost of such tooling at such time as the tooling is placed into service. The cost of such tooling includes, but is not limited to, the cost of any purchased components (including parts and complete items), fully burdened MSL engineering and/or manufacturing labor use in the design and/or construction of such tools, duties, insurance, transportation, installation, costs and costs of + +IBM Confidential Page 35 of 39 sow0501.lwp + + ATTACHMENT 1 + + IBM/MSL Outsourcing Base Agreement Statement of Work + + money, if any. MSL agrees that MSL engineering will be priced to IBM on a "most favored customer" basis. + + + + + + iv) Both parties may agree to amortize the tooling and shall put such agreement in writing and any terms and conditions associated with such amortization. If IBM and MSL agree to amortize the tooling, IBM agrees to pay for the tooling and any associated carrying cost agreed to between the Parties via an amortization charge in addition to the respective Product price as defined in Section 7.0. The amortization period for each tool will be stated in the applicable Product Attachment and shall be triggered by the initial delivery of the Product(s) for which the tooling expenses are incurred. + + IBM will state the estimated ship quantity and maximum monthly ship rate for the amortization period. MSL will define the total tooling cost to support the maximum ship rate. The total tooling cost will be divided by the estimated ship quantity provided by IBM. This unit amortization cost will be itemized in MSL's quotes as "tooling adder". + + v) The tooling cost recovery, via the "tooling adder", will be analyzed during each quarterly review meeting between IBM and MSL. The intent is to adjust the "tooling adder" based upon volume changes, such that the total tooling cost will be recovered by the end of the amortization period. If at the end of the amortization period the tooling cost have been over or under recovered, an adjustment invoice will be processed accordingly. + + c) MSL acknowledges and agrees that its utilization of any tooling for other customers will not impact IBM's product requirements. MSL will obtain IBM's written approval prior to entering into a contract with a third party involving tooling for Products listed in the Product Attachment. + + d) In the event that MSL owns the tooling and has received a bona fide third party offer to purchase any or all of the tooling, before MSL may accept such offer, MSL shall notify IBM in writing, and IBM shall have [*] Days after such notice to agree to purchase such tooling on the same terms and conditions as such third party offer. + + e) All tools, dies, jigs, patterns, equipment or Parts purchased, furnished, charged to or paid for by IBM and any replacement thereof shall become and remain the property of IBM. IBM agrees to provide MSL appropriate technical support for IBM owned tooling at no charge to MSL. IBM shall have the option of removing IBM owned tooling from MSL directly, depending upon Product strategy and production. + +21.2 Care + + MSL is responsible for protection, calibration, maintenance and care of all tooling owned by IBM and shall be liable for loss or damage of such tooling while in MSL's possession or control. IBM agrees to insure tooling it owns. Where possible, MSL will be jointly insured with respect to the IBM owned tooling for its interest. This tooling shall be subject to inspection by IBM upon notice and shall be returned in an acceptable condition, reasonable wear and tear excepted, upon demand or notice by IBM. MSL will be responsible for + +IBM Confidential Page 36 of 39 sow0501.lwp + + ATTACHMENT 1 + + IBM/MSL Outsourcing Base Agreement Statement of Work + + removing and shipping IBM owned tooling from MSL's plant. IBM shall be responsible for transportation cost for the return of tooling to IBM's facility as designed by IBM. + +21.3 Inspection + + MSL will identify the location of tooling and at any reasonable time allow IBM or IBM's designee to inspect the equipment and to purchase related parts. MSL shall not mortgage, pledge, or take any other action that might encumber IBM owned tooling in any way. + +SECTION 22.0 RETURN OF PRODUCT - US AND VALENCIA WORK CENTER. + +22.1 Return to MSL by IBM + + a) MSL agrees to manage Products and Parts that can be returned to the US and Valencia Work Centers through the following, but not limited to, IBM processes, IBM Document PC 2801: + + i) shipped and uninstalled, + + ii) returns per IBM contracts with IBM Business Partners, and + + iii) new defective + + b) MSL will accept the return of all shipped Products returned to MSL within [*] Days from the Delivery Date. + + + + + + i) Products returned to the US Work Center will be shipped freight [*] to MSL. + + ii) For Products returned to the Valencia Work Center, MSL will pay IBM the NIC for the returned Products (NIC is the [*] multiplied by the NIC rates defined in Section 1.b)ii) of Appendix 1.) + + iii) MSL will buy back the returned Product at [*]% of the amount invoiced to IBM for such Product within [*] Days of receipt of the return by MSL. + + iv) MSL's price for the acceptance of returned non-warranty Products shall be [*]% of the amount invoiced to IBM for such Product [*] NIC (NIC is the [*] multiplied by the NIC rates defined in Section 1.b) ii) of Appendix 1). + + v) For the Valencia Work Center, 22.1 b) iii) and iv) will be processed as MSL buying back the returned Product at [*]% of the amount invoiced to IBM [*] NIC within [*] Days of receipt of the return by MSL. + +IBM Confidential Page 37 of 39 sow0501.lwp + + ATTACHMENT 1 + + IBM/MSL Outsourcing Base Agreement Statement of Work + + vi) IBM may use payments due IBM per 22.1 b) iii) and iv) to offset amounts owed to MSL or request reimbursement from MSL at IBM's sole discretion. + + vii) Any defective Product returned to MSL will be returned with a copy of any applicable IBM inspection report and will reference MSL's Return Material Authorization ("RMA"). + + viii) When replacement or repaired Products are shipped, MSL must submit a new invoice. + +SECTION 23.0 DISASTER RECOVERY + + MSL will have a documented disaster recovery program which would allow MSL to resume all responsibilities under the terms and conditions of this Agreement within [*] Days of a disaster. A copy of the MSL documented disaster recovery program will be submitted to IBM for IBM's approval within sixty (60) Days after the Effective Date. + +SECTION 24.0 INFORMATION TECHNOLOGIES SERVICES ("I/T") SYSTEMS + +24.1 System Access + + a) MSL's access to IBM applications, tools, licenses, networks, and equipment will be based upon business need determined by IBM. IBM shall grant MSL, under a separate written agreement, the right to use certain versions of IBM owned software resident on the workstations to be transferred from IBM to MSL during the Transition Period. MSL must obtain a license from the software owner of any nontransferable third party or IBM software identified by IBM. IBM retains the right to audit. IBM conveys to MSL no software title or license under the intellectual property rights of IBM or of any third party except as may be otherwise provided herein. MSL is responsible for obtaining all licenses for third party software. MSL conveys to IBM no software title or license under the intellectual property rights of MSL or of any third party. + + b) Neither IBM or MSL will be provided any license rights and/or source code to any software subject to this Agreement unless approved by the owning Party. + + c) No software may be installed on either IBM or MSL systems by its employees or contractors without the prior written consent of the owning Party. MSL may install software on MSL-owned or provided I/T assets which are isolated from and not a part of the networks. MSL will not install software that adversely impacts IBM systems or networks. + +24.2 General I/T + + a) MSL must provide the required information and interfaces to IBM's systems, as needed for execution of this Agreement. MSL must participate in any upgrade and testing of local and corporate applications, interfaces, and tools during its use of IBM owned + +IBM Confidential Page 38 of 39 sow0501.lwp + + ATTACHMENT 1 + + + + + + IBM/MSL Outsourcing Base Agreement Statement of Work + + applications or environments and insure continuous application operation as changes are made. IBM agrees to participate in the testing of IBM interfaces changed as a result of any upgrade activity. IBM will provide visibility and the necessary technical details on IBM system changes to ensure MSL is able to update their systems and processes. + + b) MSL prices for I/T costs are included in the prices as defined in Section 7.0 and Appendix 1 Markup. Costs for implementing any change requested by IBM after the Transition Period that substantially impact MSL's systems and processes will be sized separately. + + c) MSL will support IBM's EPRG/ECPS using a separate location code for Charlotte. + + d) MSL SLA (Service Level Agreement) requirements for local or remote systems availability and performance will be negotiated in compliance with IBM's service level expectation for a manufacturing process within sixty (60) Days of the Effective Date. + + e) MSL will be responsible for the service and support of any asset transferred from IBM ownership to MSL. System or end user software or requests for version upgrades will be under separate agreement. + + f) MSL will transmit reports and data files as IBM requires for history, audit, validation, and measurements as defined in Appendix 3. + + g) MSL will provide the necessary capability to accommodate non AAS/GEMS orders and provide confirmation/status information as required. + + h) Except as otherwise provided herein, MSL will obtain the systems , applications, and licenses they deem necessary by their own means. + + i) MSL agrees to have all MSL applications Year 2000 compliant prior to migrating any IBM data into it's applications or data bases. + + j) MSL must obtain IBM's Global Services' written permission prior to making any connection to any IBM network or system other than the networks and systems subject to the Agreement. + +IBM Confidential Page 39 of 39 sow0501.lwp + +APPENDIX 1: MARK UP + +1. Prices for manufacturing and fulfillment of Products will be per the formula of section 7.1 with the following rates: + +a) Value Add and Profit Rates are per the following table: + + VALUE ADD RATES PROFIT RATES(*) --------------- --------------- RS Fulfillment (US & VALENCIA Work Centers [*] GEPS, Finance, and Security Mfg & Fulfillment [*] + + Spares to Mechanicsburg and Amsterdam US Work Center + + Valencia Work Center (Through September 30, 1998) Valencia Work Center (After September 30, 1998) + + *Profit Rates are subject to the adjustments of Section 7.3, Attachment 1, SOW + +b) Other Cost Provision rate is equal to the Scrap Rate plus the NIC Rate where: + + i) The Scrap Rate is equal to [*] except no scrap provision will be applied to OEM Products + + ii) The following NIC rates will be multiplied by the material costs by geographical source to derive an average NIC Rate for each Product + + NIC RATE -------- US WORK CENTER: [*] + + Valencia to US work Center Far East to US Work Center + + + + + + US Suppliers to US Work Center Mexico/Canada to US Work Center South America to US Work Center Line Side Stocked Products to US Work Center Mfg to Fulf./Integration within US Work Center + +IBM Confidential Page 1 of 7 appls.lwp + + NIC RATE -------- VALENCIA WORK CENTER: [*] + + Far East to Valencia Work Center US to Valencia Work Center European (non-Spanish) Suppliers to VALENCIA Work Center Spanish Suppliers to Valencia Work Center Line Side Stocked Products to Valencia Work Center Mfg to Fulf./Integration within Valencia Work Center + + ** No NIC will be applied to the final assembly cost of a Product manufactured by MSL that is subsequently shipped against a Customer Order within the same Work Center (ie, fulfillment and/or Integration is within the same Work Center). NIC for the Parts used in a Product Manufactured by MSL will be calculated using the above NIC rates. + +2. For RS Products with components manufactured by MSL, the price for MSL manufacturing services will be per the formula of Section 7.2 with the following rates: + + a) Asm/Test/Handling, Unburden Labor Rate: + + US Work Center: [*] Valencia Work Center + + b) MBA burden absorption rate of [*] + + MBA will be reviewed by IBM and MSL if the annual volume of manufactured Products is less than [*] or greater than [*]. Adjustments shall be mutually agreed upon by IBM and MSL, and shall be based on but not limited to volumes, mix of Products, and costs. + + c) Component NIC rate is per Appendix 1, b) ii + +3. RS Integration prices will be per the formula of Section 7.2.b with the following rates: + + US Work Center [*] Valencia Work Center + + *Without MSL account coordinator. + +4. All prices are effective for the US Work Center on the Effective Date. All prices for Valencia Work Center manufactured Products and their fulfillment are effective on the Effective Date. All other prices excluding spares (see 1 a) above) are effective for the Valencia Work Center on June 1, 1998. + +IBM Confidential Page 2 of 7 appls.lwp + +APPENDIX 2: REQUIREMENTS ACCURACY + +The formula for measuring the accuracy of requirements placed on MSL for a given quarter accompanied with an explanation, is the following: + +Requirements Accuracy % = [*] + +Where [*] represents the performance [*] months prior to the last month of the quarter in which you are measuring the Requirements Accuracy. The Forecast represents the requirements that was passed by IBM [*] months prior, for the total volume by machine type for the quarter that is being measured. Actual Order Load represents the final amount of orders scheduled for the quarter being measured. For example when measuring the [*] for the first quarter in 1998 you would calculate [*] by taking the [*] that was passed [*] for the first [*] in [*] and subtract the actual [*] for that [*]. Then divide by the forcast and multiply by [*]. You follow the same methodology for [*] looking at the forecast [*] months prior to the last month of the quarter being measured. Once [*] through [*] is calculated you apply these results to the formula above. + + [*] + + + + + +The formula measures the accuracy of requirements placed on MSL for a given quarter, each month, starting [*] months prior to the end of the quarter, using a [*] weighted calculation. + +The following percentages will be multiplied by the material cost of the volume of the machine type shipped in the quarter that fell below [*]% of the Requirements Accuracy calculation. + + REQUIREMENTS ACCURACY INCREMENTAL % AS DEFINED ABOVE APPLIED TO MATERIAL COST [*] and Greater [*]% Less than [*]% [*]% + +Payments for these liabilities will be made via a separate invoice. + +IBM and MSL Confidential Page 3 of 7 + +APPENDIX 3: PERFORMANCE SPECIFICATIONS + +The following SPECIFICATIONS apply to MSL services at each work center: + +Measurement Period Target ------------------------ ------ ------ On-time shipment (a)(c) [*] Responsiveness (b)(c) Order to ship leadtime (Pick&Pack) (d) Order to ship leadtime (Bulk) (d) Product quality Serviceability to IBM Plants Serviceability to IBM Services + +(a) Percentage of finished orders that are shipped from MSL and delivered to IBM on the committed Delivery Date. (b) Percentage of finished orders that are shipped from MSL and delivered to IBM in line with the requested supply ship date, and according to the IBM Customer Order requested arrival date and the published IBM distribution lead times. (c) With IBM's approval, MSL may normalize this measurement for errors that are beyond MSL's control. Errors must be in the categories of: integration orders, IBM system errors, system updates that are IBM's responsibility, orders requesting delivery dates which exceed Requirements Accuracy, as defined in Appendix 2, of [*] and are not within Supply Flexibility as defined in Section 13.2 and Appendix 4. (d) These are IBM Customer Orders. Order to ship leadtime is the number of Days from MSL receipt of a valid IBM Customer Order to planned and committed MSL ship date. + +MSL will also provide to IBM the following information reports: + +REPORTS PERIOD --------------------- ------ Weekly shipments (1) [*] Monthly shipments (2) Inventory (3)(4)(5) Product Invoice Information (6) Product quality (7) Requirements accuracy (8) Consigned tooling MSL Procured Parts (9) Planning Parameters (10) + +(1) List of shipments by machine type, serial number and delivery program (COATS, Q Ship, IPR, industry standard, integration, other). (2) List of shipments by machine type and serial number, to requesting IBM organizations. + +IBM and MSL Confidential Page 4 of 7 + +(3) MSL will report, by business area, MSL owned inventory by machine type and/or part number, with detail of item quantity and value including Parts, work in process and finished goods. IBM Parts, IBM Designated Parts and MSL Procured Parts will be reported separately, IBM document CAI 97-11. MSL will report how each inventory price is formed monthly upon request. MSL will identify separately the inventory of all street value parts and IBM classified parts by using IBM's guidelines. + +(4) MSL will report, by business area, the inventory of IBM Consigned Parts by machine type and/or part number, with detail of item quantity and value including Parts, work in process and finished goods. MSL will report how each inventory price is formed monthly and upon request. All IBM Consigned Parts in Integration will be reported separately and by + + + + + + customer monthly and upon request. MSL will identify the location of IBM Consigned Parts by location within the MSL Work Center. MSL will identify separately the inventory of all street value parts and IBM classified parts by class using IBM's guidelines. + +(5) MSL will identify the volume and value in the LS, S, SSS, and MSL owned inventory buffers and additional information that would define MSL's inventory posture as it relates to product availability. This information will be reported for [*] months after the Effective Date. + +(6) For shipment invoices, MSL will provide validation information as follows: Invoice number Currency and currency rate Order type, order label IFC, Division, ITC, date, invoice type, ST., STALL MSL value of goods, MSL emergency, MSL special casing IBM value of goods, IBM emergency, IBM special casing This information will be supplied at invoice level, detail (S/A or P/N) and also at feature level. (7) As per the Product Attachments. (8) Formula for requirements accuracy is as per Requirements Accuracy Appendix. (9) At the beginning of each year of operation, MSL will identify to IBM the MSL sources from which MSL buys MSL Procured Parts and will provide latest source quotes for each one. At the beginning of each quarter, MSL will report to IBM any changes in MSL sources and any changes in their costs. (10) This note applies only to the Valencia Work Center. A report of the type regularly produced by the MSL Valencia Work Center as "EPRG parameters Exxx". The report contains values for parameters associated with a REGEN: + + a) Parameters defined at plant level, i.e. currency, value class start month, value class length, inventory carrying rate, box explosion offset, stock to dock time, effective code date, excess, surplus and scrap at start of month, unit price, % add value, dollar rate, etc. b) Parameters defined at source level, for each source, i.e. MS, FZI, FZO, FZC, MI, MO, CH, OAT, DTS, DEL COST, DEL R.OUT, NTT, ETT, LCT, AI, AC, etc. c) Parameters defined at Value-class level, for each value class, i.e. flags, PPS, PS, MIC, FDS, MAC, Min D Val, Max Del Val, FZI, FZO, ZC, MRI, MRO, CH, High Val Limit, DN, OH, etc. d) Parameters defined at P/N family level *(management group level), for each family/group, i.e. OPC, FDS, CII, NSI, PS, AI, mdq, Mdq, OAT, DI, OC, SED, description, etc. + +IBM and MSL Confidential Page 5 of 7 + +(11) In addition MSL will provide on demand a history of all shipments for a given period of time by order, configuration, ship to address, and date of shipment. + +MSL will report to IBM the measurements separately for each Work Center. + +REPORTING + +MSL will transmit the reports described in the Appendix 3, the Product Attachment and those agreed upon by the Parties by facsimile, electronic data interchange, or otherwise, as IBM reasonably requires. MSL also agrees to establish, maintain and link the related complete and accurate data base system to IBM's specified systems and other electronic communication links as are deemed necessary and agreed to by both parties. + +IBM and MSL Confidential Page 6 of 7 + +APPENDIX 4: SUPPLY FLEXIBILITY + +MSL agrees to maintain Supply Flexibility to meet requirements increase on forecasted volumes as follows: + +MONTH M(CURRENT MO.) M+1 M+2 M+3 M+4 M+5 Additional % on plan [*] + +The Supply Flexibility will be available at model and feature level. + +IBM and MSL Confidential Page 7 of 7 + + ATTACHMENT 4 - EXPENSE PARTICIPATION + +1. Valencia Product Engineering and New Program Management Support + + + + + + Commencing on the Effective Date of the Agreement, but not before July 1, 1998, IBM shall pay MSL [*] pesetas on the first day of each calendar month during the term of the Agreement for MSL's completion of the product engineering and new program management responsibilities defined in Product Attachment A of the Statement of Work. For any period of less that one month, the above amount shall be apportioned based on the number of days in that month. + +2. MVS License for the Valencia Work Center + + The terms and conditions, including pricing, governing the use of IBM's MVS software shall be granted under a separate licensing agreement between IBM Spain and MSL. For MVS software modules (including additions and upgrades) that IBM agrees in writing, before fees are incurred, are required by MSL to fulfill this Agreement, IBM shall reimburse MSL the actual MVS license charges through separate invoices and payments. MSL agrees that these payments will not take place before MSL has made the corresponding payment for the license fees. + +3. Startup and Investment Expenses for the US Work Center + + a) IBM shall pay MSL up to [*] U.S. dollars [*] for 1998 startup and investment expenses related to the US Work Center. MSL may submit invoices to IBM commencing on the Effective Date of the Agreement through December 31, 1998 for the following actual startup and investment expenses for the US Work Center: I/T application set up including related travel and consultant fees, AS 400 hardware and software, application software and licenses, network infrastructure, line servers and user workstations, training, radio frequency equipment, tooling, material handling equipment, shelving, furniture, line fitup and facilities fitup expenses. + + b) IBM has budgeted a total of [*] to relocate manufacturing lines from Building 103 to Building 002; and for non-manufacturing fit up. Relocation of the manufacturing lines is budgeted at [*], and non-manufacturing fit up is budgeted at [*]. MSL will be responsible for any overruns of these budgets incurred as a result of MSL's requests. + + c) MSL acknowledges and agrees that its utilization of any tooling and/or I/T systems for other customers shall not impact IBM's product requirements. MSL shall obtain IBM's written approval prior to entering into a contract with a third party involving tooling and/or I/T systems charged to IBM as part of the US Work Center startup. + + d) IBM reserves the right of first refusal to purchase any tooling and equipment, that was reimbursed by IBM as part of the US Work Center startup, at any time for MSL's [*] or [*], whichever is less. + +IBM Confidential Page 1 of 3 att4016.lwp + + ATTACHMENT 4 - EXPENSE PARTICIPATION + + e) MSL shall report all open startup and investment expenses, which are subject to request for reimbursement by IBM, as part of the monthly measurement reviews in 1998. + +4. Personnel Expense Participation + +4.1 Salary Participation + + a) Commencing on the Effective Date of the Agreement, IBM shall compensate MSL for the salaries of Transferred Employees, as defined in Attachment 2 of the Base Agreement, that are actually retained by the US Work Center and supporting this Agreement. IBM's payment to MSL shall be determined by the following formula: {Salary Payment = A x B}, where the following values are assigned to such formula: + + i) "A" shall mean actual Transferred Employees, as defined in Attachment 2 of the Base Agreement, that are retained by MSL at the US Work Center and supporting this Agreement as of the last day of a quarter. + + ii) "B" shall mean the IBM's salary participation rate as defined in Attachment 4,4.1 b). + + b) IBM's quarterly salary participation rates shall be: + + Year 1 Year 2 Year 3 ------ ------ ------ + + [*] [*] [*] + + c) For any period of less than [*], the amount determined by (a) above, shall be apportioned based on the actual number of days in that quarter. + + d) Payment for these liabilities shall be made via a separate invoice quarterly. + + + + + + e) IBM shall make no payments for any extension periods to the Agreement. + +4.2 Medical and Vision Plan Participation + + a) Commencing on the Effective Date of the Agreement, MSL shall offer to Transferred Employees medical and vision plans that have employee contribution rates equal to the IBM contribution rates that IBM offers to its employees for that calendar year. + + b) IBM shall pay MSL [*] dollars [*] on the Effective Date of the Agreement for IBM's participation in the medical and vision plans for Transferred Employees for the term of the Agreement. IBM shall make no payments for any extension periods to the Agreement. + +IBM Confidential Page 2 of 3 att4016.lwp + + ATTACHMENT 4 - EXPENSE PARTICIPATION + +4.3 401K Plan Participation + + a) Commencing on the Effective Date of the Agreement, MSL shall offer to Transferred Employees a 401K plan that reflects a [*] percent employer matching contribution. + + b) IBM's payment to MSL for a quarter shall be MSL's actual employer matching contributions for the Transferred Employees minus MSL participation as defined by Attachment 4, 4.3 c). IBM shall make no payments for Transferred Employees that are not retained by MSL at the US Work Center and supporting this Agreement as of the last day of the quarter. + + c) MSL's 401K Plan participation for the Transferred Employees shall be based on the following percentages of salary: + + Year 1 Year 2 Year 3 ------ ------ ------ + + [*] [*] [*] + + d) For any period of less than [*] months, the amount determined by (a) above, shall be apportioned based on the actual number of days in that quarter. + + e) Payment for these liabilities shall be made via a separate invoice quarterly. + + f) IBM shall make no payments for any extension periods to the Agreement. + +IBM Confidential Page 3 of 3 att4016.lwp + +ATTACHMENT 5: EQUIPMENT AND PROGRAM LOAN LIST July 20, 1999 + +HARDWARE + +ASSET IDENTIFIER OR SERIAL NUMBER DESCRIPTION QUANTITY COMMENT VERIFIED + + [*] [*] 1 verified Wayne Cato, 07/08/99 [*] [*] 1 verified Wayne Cato, 07/08/99 [*] [*] 1 verified Wayne Cato, 07/08/99 [*] [*] 1 verified Wayne Cato, 07/08/99 [*] [*] 1 verified Wayne Cato, 07/08/99 [*] [*] 1 verified Wayne Cato, 07/08/99 [*] [*] 1 verified Wayne Cato, 07/08/99 [*] [*] 1 verified Wayne Cato, 07/08/99 [*] [*] 1 verified Wayne Cato, 07/08/99 [*] [*] 1 verified Wayne Cato, 07/08/99 [*] [*] 1 verified Wayne Cato, 07/08/99 [*] [*] 1 verified Wayne Cato, 07/08/99 [*] [*] 1 verified Wayne Cato, 07/08/99 [*] [*] 1 verified Wayne Cato, 07/08/99 [*] [*] 1 verified Wayne Cato, 07/08/99 [*] [*] 1 verified Wayne Cato, 07/08/99 [*] [*] 1 verified Wayne Cato, 07/08/99 [*] [*] 1 verified Wayne Cato, 07/08/99 [*] [*] 1 verified Wayne Cato, 07/08/99 [*] [*] 1 verified Wayne Cato, 07/08/99 [*] [*] 1 verified Wayne Cato, 07/08/99 [*] [*] 1 verified Wayne Cato, 07/08/99 [*] [*] 1 verified Wayne Cato, 07/08/99 + + + + + +[*] [*] 1 verified Wayne Cato, 07/08/99 [*] [*] 1 verified Wayne Cato, 07/08/99 [*] [*] 1 verified Wayne Cato, 07/08/99 [*] [*] 1 verified Wayne Cato, 07/08/99 [*] [*] 1 verified Wayne Cato, 07/08/99 [*] [*] 1 verified Wayne Cato, 07/08/99 [*] [*] 1 verified Wayne Cato, 07/08/99 [*] [*] 1 verified Wayne Cato, 07/08/99 [*] [*] 1 verified Wayne Cato, 07/08/99 [*] [*] 1 verified Wayne Cato, 07/08/99 [*] [*] 1 verified Wayne Cato, 07/08/99 [*] [*] 1 verified Wayne Cato, 07/08/99 [*] [*] 1 verified Wayne Cato, 07/08/99 [*] [*] 1 verified Wayne Cato, 07/08/99 [*] [*] 1 verified Wayne Cato, 07/08/99 [*] [*] 1 verified Wayne Cato, 07/08/99 [*] [*] 1 verified Wayne Cato, 07/08/99 [*] [*] 1 verified Wayne Cato, 07/08/99 [*] [*] 1 verified Wayne Cato, 07/08/99 [*] [*] 1 verified Wayne Cato, 07/08/99 [*] [*] 1 verified Wayne Cato, 07/08/99 [*] [*] 1 verified Wayne Cato, 07/08/99 [*] [*] 1 verified Wayne Cato, 07/08/99 [*] [*] 1 verified Wayne Cato, 07/08/99 [*] [*] 1 verified Wayne Cato, 07/08/99 [*] [*] 1 verified Wayne Cato, 07/08/99 [*] [*] 1 verified Wayne Cato, 07/08/99 [*] [*] 1 verified Wayne Cato, 07/08/99 [*] [*] 1 verified Wayne Cato, 07/08/99 [*] [*] 1 verified Wayne Cato, 07/08/99 [*] [*] 1 verified Wayne Cato, 07/08/99 [*] [*] 1 verified Wayne Cato, 07/08/99 [*] [*] 1 verified Wayne Cato, 07/08/99 [*] [*] 1 verified Wayne Cato, 07/08/99 [*] [*] 1 verified Wayne Cato, 07/08/99 [*] [*] 1 [*] verified Wayne Cato, 07/08/99 [*] [*] 1 [*] verified Wayne Cato, 07/08/99 + +ATTACHMENT 5: EQUIPMENT AND PROGRAM LOAN LIST July 20, 1999 + +[*] [*] 1 [*] verified Wayne Cato, 07/08/99 [*] [*] 1 [*] verified Wayne Cato, 07/08/99 [*] [*] 1 [*] verified Wayne Cato, 07/08/99 [*] [*] 1 [*] verified Wayne Cato, 07/08/99 [*] [*] 1 [*] verified Wayne Cato, 07/08/99 [*] [*] 1 [*] verified Wayne Cato, 07/08/99 [*] [*] 1 [*] verified Wayne Cato, 07/08/99 [*] [*] 1 [*] verified Wayne Cato, 07/08/99 [*] [*] 1 [*] verified Wayne Cato, 07/08/99 [*] [*] 1 [*] verified Wayne Cato, 07/08/99 [*] [*] 1 [*] verified Wayne Cato, 07/08/99 [*] [*] 1 [*] verified Wayne Cato, 07/08/99 [*] [*] 1 [*] verified Gary Holman, 07/19/99 [*] [*] 1 [*] verified Gary Holman, 07/19/99 [*] [*] 1 [*] verified Gary Holman, 07/19/99 + +One (1) item is located in the Bldg. 002 structure but cannot be individually identified as a unit + +ASSET IDENTIFIER OR SERIAL NUMBER DESCRIPTION QUANTITY COMMENT VERIFIED + +[*] [*] 1 [*] verified Wayne Cato, 07/08/99 + +ATTACHMENT 5: EQUIPMENT AND PROGRAM LOAN LIST July 20, 1999 + +SOFTWARE + +ASSET IDENTIFIER OR SERIAL NUMBER DESCRIPTION QUANTITY COMMENT VERIFIED + +[*] [*] 1 [*] verified Donovan Dandurand, 6/16/99 [*] 1 [*] verified Donovan Dandurand, 6/16/99 [*] 1 [*] verified Donovan Dandurand, 6/16/99 [*] 1 [*] verified Donovan Dandurand, 6/16/99 [*] 1 [*] verified Donovan Dandurand, 6/16/99 [*] 1 [*] verified Donovan Dandurand, 6/16/99 [*] 1 [*] verified Donovan Dandurand, 6/16/99 [*] 1 [*] verified Donovan Dandurand, 6/16/99 [*] 1 [*] verified Donovan Dandurand, 6/16/99 [*] 1 [*] verified Donovan Dandurand, 6/16/99 [*] 1 [*] verified Donovan Dandurand, 6/16/99 [*] 1 [*] verified Donovan Dandurand, 6/16/99 [*] 1 [*] verified Donovan Dandurand, 6/16/99 [*] 1 [*] verified Donovan Dandurand, 6/16/99 [*] 1 [*] verified Donovan Dandurand, 6/16/99 [*] 1 [*] verified Donovan Dandurand, 6/16/99 + + + + + +[*] 1 [*] verified Donovan Dandurand, 6/16/99 [*] 1 [*] verified Donovan Dandurand, 6/16/99 [*] 1 [*] verified Donovan Dandurand, 6/16/99 [*] 1 [*] verified Donovan Dandurand, 6/16/99 [*] 1 [*] verified Donovan Dandurand, 6/16/99 [*] 1 [*] verified Donovan Dandurand, 6/16/99 + + ATTACHMENT 6 SOFTWARE INSTALLATION TERMS AND CONDITIONS + +The purpose of this Attachment 6 is to provide terms and conditions under which MSL may install IBM Software Packages on Products. MSL shall not prepare a preload image of an IBM Software Package or install any IBM Software Packages, unless authorized by IBM in writing or expressly instructed under this Attachment 6. All Appendices and Exhibits referred to in this Attachment 6 are incorporated herein by reference. If there is a conflict between the Agreement and this Attachment 6, the terms of this Attachment 6 will prevail. + +1.0. DEFINITIONS. For purposes of this Attachment 6 only, the following definitions shall apply: + +1.1 "Approved Location" is a location at which IBM has expressly authorized MSL in writing to perform its IBM Software Package installation responsibilities under the Agreement, and which has also been so authorized by Microsoft Corporation ("MS"); + +1.2 "Code" shall mean statements or instructions, whether in a human readable "source" form or machine readable "object" form of programming code, intended to bring about a certain result in the operation of a computer. Code shall include (a) all supporting documentation, including but not limited to all documentation needed to assist each Party in understanding all technical aspects of the Code and all applicable end user documents and materials, and (b) all corrections, modifications and enhancements to Code. + +1-3 "Customers" shall mean IBM, IBM subsidiaries, distributors, retailers, IBM authorized resellers, end users and others as may be specified by IBM. + +1.4 "Derivative Work" shall mean a work that is based upon one or more pre-existing copyrighted or patented works, such as a revision, enhancement, modification, translation, abridgment, condensation, expansion, compilation or any other form in which such pre-existing work may be recast transformed or adapted. + +1.5 "End User" is any one who acquires Products for its own use and not for resale. + +1.6 "Harmful Code" shall mean any computer code, programming instruction, or set of instructions that is constructed with the ability to damage, interfere with, or otherwise adversely affect computer programs, data, files, or hardware, without the consent or intent of the computer user. This definitions includes, but is not limited to, self-replicating and self propagating programming instructions commonly called viruses and worms. + +1.7 "IBM Software Package" shall mean a software package that is owned by or licensed to IBM, and is provided to MSL only for purposes of this Attachment 6 and the Agreement. + +IBM Confidential June 2, 1999 ATT6.1wp Page 1 of 19 + + ATTACHMENT 6 SOFTWARE INSTALLATION TERMS AND CONDITIONS + +1.8 "Preload," "Preloading," and "Preloaded" refer to the process by which MSL is authorized, subject to the terms and conditions of the Agreement, to load a single copy of the IBM Software Package only onto the hard drive of a Product; + +1.9 "Products" shall mean IBM and OEM machine types as defined in Product Attachments to the IBM/MSL Outsourcing Base Agreement Statement of Work. + +2.0. SOFTWARE PACKAGE REQUIREMENTS + +2.1. When authorized by IBM in writing or expressly instructed under this Attachment 6, MSL agrees to prepare the IBM Software Package Preload image in support of Products. + +2.2. MSL agrees to Preload IBM Software Packages (only at Approved Locations) on Products as set forth in this Attachment 6. + +2.3. MSL shall establish and maintain electronic installation records (as described in Exhibits 2, 3, and 4 of Appendix A to this Attachment 6) of all IBM Software Packages installed, and maintain adequate business controls to prevent unauthorized use or copies of any IBM Software Package. + +2.4. MSL shall establish, maintain and report to IBM the number of individual software programs (including operating systems and program applications) included in IBM Software Packages that are (a) installed on Products, (b) shipped with Products, and (c) shipped without Products for purposes of Product support. MSL shall secure IBM's prior written permission regarding + + + + + + any IBM Software Package shipped without the Product to ensure that all licenses to IBM are adhered to by MSL. + +2.5. MSL acknowledges that MS requires additional restrictions on its operating system Code and other Code and documentation from MS, and therefore, MSL agrees to also comply with the additional obligations set forth in Exhibit 5 of Appendix A of this Attachment 6 for all Code and documentation from MS. + +IBM Confidential June 2, 1999 ATT6.1wp Page 2 of 19 + + ATTACHMENT 6 SOFTWARE INSTALLATION TERMS AND CONDITIONS + +3.0. ADDITIONAL WARRANTIES + +MSL represents and warrants that at all times: + +3.1. MSL will not copy or permit the copying (including back-up copies) of all or any part of the IBM Software Packages, except to the extent required for MSL to perform its obligations hereunder for IBM's benefit; + +3.2. MSL will not sublicense, rent, lease, distribute, assign or otherwise transfer (including distributing back-up copies of) all or any part of the IBM Software Packages, except as expressly authorized by IBM in writing; + +3.3. MSL will not reverse engineer, disassemble, or decompile all or any part of the IBM Software Packages; + +3.4. MSL will not remove any intellectual property marking or identification code that may be in the IBM Software Packages; + +3.5. MSL will not add to, delete from, or otherwise modify any Code included in the IBM Software Packages, or create any Derivative Work therefrom, except as expressly authorized by IBM in this Attachment 6 or otherwise authorized herein. + +3.6. MSL will comply with the additional requirements set forth in this Attachment 6 and its Appendix A (including its Exhibits); + +3.7. MSL will not export any IBM Software Package to any country without IBM's prior express written permission (such permission, if any, shall not relieve MSL of its obligations hereunder, and MSL shall remain fully responsible for all such exporting). + +IBM Confidential June 2, 1999 ATT6.1wp Page 3 of 19 + + ATTACHMENT 6 SOFTWARE INSTALLATION TERMS AND CONDITIONS + +4.0. ADDITIONAL AUDIT RIGHTS + +IBM may regularly monitor, inspect and/or audit any software installation location utilized or planned to be utilized hereunder pursuant to Section 7.0 of the Outsourcing Base Agreement. + +MSL will not utilize any location in performance of this Attachment 6 which is not an Approved Location. MSL agrees to provide IBM at least ninety (90) calendar days advanced written notice for any MSL facility planned to be used (including the intended activity for each such facility) in the performance of work hereunder, to allow IBM, and/or MS, to inspect each such facility. MSL agrees to promptly correct any deficiencies discovered in such inspections. Such IBM inspections, approvals and deficiency corrections shall not in any way relieve MSL of its ongoing obligations under the Agreement. + +IBM shall have the option to monitor, inspect, audit and take other necessary actions in order to comply with IBM's requirements to MS regarding any of MS's Code, or documentation, used hereunder. + +IBM's right to audit hereunder shall continue for a period up to [*] years following expiration or termination of the Agreement. + +Any audit provided for herein shall be conducted during MSL's normal business hours, after reasonable advance notice, and shall not unreasonably interfere with MSL's normal operations. + +IBM Confidential June 2, 1999 ATT6.1wp Page 4 of 19 + + ATTACHMENT 6 SOFTWARE INSTALLATION TERMS AND CONDITIONS + + APPENDIX A + + + + + + ADDITIONAL OBLIGATIONS FOR MICROSOFT CODE AND DOCUMENTATION + +1. AUTHORIZATION. + +1.1. ATTACHMENT 6. The terms and conditions of this Attachment 6 are in addition to, and not in lieu of, the terms and conditions of the Agreement. + +1.2. SCOPE. The additional restrictions in this Appendix A shall apply to the MS Code referenced in Exhibit 1 of this Appendix A, including any and all revisions, enhancements, supplements or releases thereto (collectively, "MS Software Images") and related MS documentation, if such MS Software Images are made available by IBM to MSL. If required by MS, IBM has the right, without limitation, to include additional Code as "MS Software Images" and documentation by notifying MSL in writing. Provided that MSL complies fully with the terms and conditions of this Attachment 6 pursuant to the terms of the MS License to IBM ("MS License), IBM hereby authorizes MSL at Approved Locations only to Preload MS Software Images on Products and to distribute Preloaded Products as otherwise permitted in the Agreement. IBM may revoke these authorizations in whole or in part at any time in its sole discretion. + +1.3. MSL'S AUTHORIZED SUBSIDIARIES. With prior written approval from IBM, which approval may be withheld in IBM's sole discretion, MSL may authorize its Subsidiaries that are authorized to assemble and test Products pursuant to the Agreement to Preload MS Software Images only at Approved Locations in accordance with the terms, and conditions of the Agreement, including Attachment 6, PROVIDED THAT MSL hereby unconditionally guarantees each of its authorized SUBSIDIARIES' full and complete compliance with the terms and conditions of the Agreement, including Attachment 6. Pursuant to this guarantee, IBM shall not be required to make demand upon MSL's Subsidiary as a condition to making demand upon MSL. Each authorized Subsidiary shall execute an agreement with MSL sufficient to COMPLY with MSL's obligations to IBM under this Attachment 6, and the term "MSL" as used elsewhere herein shall include any authorized Subsidiaries who execute such an agreement and are approved in writing by IBM to Preload MS Software Images as provided herein. + +IBM Confidential June 2, 1999 ATT6.1wp Page 5 of 19 + + ATTACHMENT 6 SOFTWARE INSTALLATION TERMS AND CONDITIONS + + APPENDIX A ADDITIONAL OBLIGATIONS FOR MICROSOFT CODE AND DOCUMENTATION + +1.4. MS APPROVAL. Notwithstanding anything herein to the contrary, MSL, Subsidiaries of MSL, and Approved Locations, are subject to approval or immediate revocation in writing by MS as provided in the MS License. MSL is prohibited from Preloading the MS Software Image at any Preload location not approved by MS. MSL shall provide IBM with the addresses of its headquarters, the proposed Preload location(s) for which approval is requested, the business profiles in the English language (including years in business, ownership profile, nature of principal business activities, general description of site security procedures, any nonstandard reporting procedures from MSL site to IBM, and a summary of any prior experiences with installation or replication of MS products), and such other relevant information as MS or IBM may request, at least ninety (90) calendar days in advance of the anticipated first installation date for such location + +2. MSL'S RESPONSIBILITIES. MSL represents, warrants and agrees that it shall: + + (a) Comply full), and completely with all of the terms and conditions of this Attachment 6 and the MS License, including, but not limited to, all terms regarding Preloading MS Software Images and related MS documentation. Further, MSL represents, warrants and agrees: + + (i) to create an electronic assembly record for each Product in the format prescribed by IBM and transmit it to IBM prior to shipment of Product, via electronic data transmission after completion of assembly; + + (ii) to include, in unmodified form, all publications, license agreements, certificates of authenticity, labels and ship groups with each Product as set forth in the Product's Bill of Materials; + + (iii) to use the master media, and the MS Software Images obtained therefrom, only at an Approved Location and only to Preload, in a manner expressly permitted by IBM, a single copy of the Software Image designated for each Product in the Bill of Materials onto the approved Product, and for no other purpose whatsoever; + + (iv) to maintain adequate business controls for the master media, and the MS Software Images and supporting MS documentation obtained therefrom, to prevent unauthorized use or copies of any MS Software Image and supporting MS documentation; + +IBM Confidential June 2, 1999 ATT6.1wp Page 6 of 19 + + + + + + ATTACHMENT 6 SOFTWARE INSTALLATION TERMS AND CONDITIONS + + APPENDIX A ADDITIONAL OBLIGATIONS FOR MICROSOFT CODE AND DOCUMENTATION + + (v) not to copy or permit the copying (including back-up copies) of all or any part of any MS Software Image and MS supporting documentation, except as expressly authorized by this Attachment 6; and + + (vi) not to sublicense, rent, lease, distribute, assign or otherwise transfer (including distributing back-up copies of) all or any part of any MS Software Image including supporting documentation, except as expressly authorized by this Attachment 6; + + (b) When expressly authorized by IBM in writing, implement one, or more, of the following separate processes, which are described more fully in Exhibits 2, 3 and 4 of this Appendix A, at each Approved Location to ensure protection of the MS Software Image during the Preload process: + + (i) PROCESS ONE. An IBM or IBM contractor employee (who is not an employee of MSL) shall periodically monitor the Preload process, and the IBM or IBM contractor employee or an employee of MSL shall ensure that the master media containing the MS Software Image used for the Preload process is retained in a secure area accessible only to such IBM or IBM contractor employee or by MSL when not in use by the MSL (any oversight on the part of IBM shall not relieve MSL of any of its obligations hereunder); and/or + + (ii) PROCESS TWO. MSL may use the recovery CD for the product (if any) that ships with, or is designated by IBM for, the Product to Preload Software Images onto each such Product. MSL will maintain the recovery CD in a secure area until it is used for installation and returned to a secure place or packaged with the Product or its accompanying ship group. MSL shall run image verification testing on all Products Preloaded using a recovery CD; and/or + + (iii) PROCESS THREE. The master media containing the MS Software Image used for the Preload process shall be located exclusively on a server system where it will be accessible only by an IBM or IBM contractor employee or by MSL, replication of the MS Software Image shall be performed only under the authorization of IBM or MSL, and all copies shall be monitored and tracked to an individual Product serial number. + +IBM Confidential June 2, 1999 ATT6.1wp Page 7 of 19 + + ATTACHMENT 6 SOFTWARE INSTALLATION TERMS AND CONDITIONS + + APPENDIX A ADDITIONAL OBLIGATIONS FOR MICROSOFT CODE AND DOCUMENTATION + + If Process One or Process Two is selected, MSL shall take all necessary steps to ensure that only IBM and IBM contractor employees and designated MSL employees shall have access to such secured area where the master image or recovery CDs are maintained when not in use, including, without limitation, installing locks and ensuring no other possible access through doors, ceilings, walls, or floors. If Process Three is selected, MSL shall designate a dedicated server system for such purpose, and access to the data and master images stored on such server shall be limited to IBM and IBM contractor employees and designated MSL employees through passwords, keyboard lock, and a locked cover over all diskette drives and CD drives. Further, MSL shall take all necessary steps to protect such server system from unauthorized use. MSL's compliance with such processes will be subject to audit by IBM and/or MS as provided herein in this Attachment 6 and in the Agreement; + + (c) Comply fully and completely with the obligations of the MS License, including, but not limited to, those specifically set forth in Exhibit 5 of Appendix A, the Additional MS Provision: MS License Obligations Imposed On MSL hereto, in the same manner and to the same extent that IBM is required to comply with such obligations; provided, however, that, except as expressly provided in this Attachment 6 (including, but not limited to, any Appendices and Exhibits), this provision is not a sublicense or assignment of any rights of IBM under the MS License, and MSL shall not have any right or license to use, reproduce or distribute any MS Software Images. Copies of the MS License are available for review upon request, subject to the requirements of Subsection (d) below; + + (d) Prior to the receipt of any confidential information obtained from + + + + + + MS, execute a non-disclosure agreement sufficient to comply with IBM's confidentiality obligations to MS; + + (e) Provide access to MSL's premises during normal business hours (with prior notice of at least 48 hours) to inspection teams sent on behalf of MS and/or IBM if MS or IBM has reason to believe that MSL may be in violation of this Attachment 6, in order that such team may perform an inspection of the MSL'S procedures to determine compliance with the terms of this Attachment 6; + + (f) Immediately stop Preloading of all MS Software Images upon notice from IBM or MS of termination, as set forth in Section 7 of this Appendix A of this Attachment 6, the MS License, or the Agreement; + +IBM Confidential June 2, 1999 ATT6.1wp Page 8 of 19 + + ATTACHMENT 6 SOFTWARE INSTALLATION TERMS AND CONDITIONS + + APPENDIX A ADDITIONAL OBLIGATIONS FOR MICROSOFT CODE AND DOCUMENTATION + + (g) Distribute Products Preloaded with MS Software Images only to IBM or IBM Subsidiaries, or on behalf of IBM or IBM Subsidiaries to the extent permitted in the Agreement; + + (h) Reimburse MS's and IBM's reasonable attorney's fees and costs if MS or IBM employs attorneys to enforce any rights arising out of this Attachment 6; + + (i) Record, track and report to IBM (for consolidated reporting to MS) in the form, manner and at intervals required by IBM, information concerning MS Software Images Preloaded and supporting MS documentation, including without limitation, the number of units, the model number, the configuration, the name or part number of the MS Software Image Preloaded, and the unique serial number of the Products Preloaded and distributed with an MS Software Image. + +3. ADDITIONAL WARRANTY BY MSL. MSL further represents, warrants and agrees to notify IBM immediately in writing of any suspected or actual noncompliance with the terms and conditions of this Attachment 6 or the MS License by MSL, its employees, Subsidiaries, or agents. + +4. THIRD PARTY BENEFICIARY. Notwithstanding Section 16.18 of the Outsourcing Base Agreement, MS is an intended third party beneficiary of this Attachment 6 only, with full rights to enforce the terms of this Attachment 6 on its own behalf, but only to the extent that the terms of this Attachment 6 pertains to the MS Software Images and related MS documentation. + +5. ADDITIONAL INDEMNIFICATION. MSL agrees to indemnify and hold harmless MS and IBM, its Subsidiaries, employees, and directors, from all fines, claims and expenses of any kind (including reasonable attorneys' fees and expenses) incurred by IBM or MS arising from or connected with (a) any breach, default or noncompliance by MSL of its representations, warranties or obligations under this Attachment 6, (b) alteration or modification by MSL of any MS Software Image, (c) installation on a Product of an image or Code other than the IBM Software Package, and (d) any unauthorized use, reproduction or distribution of MS Software Images or related documentation by MSL, or its employees or agents, whether or not authorized by MSL; provided, however, that MSL shall not be liable only to the extent that any such fines, claims or expenses are attributable to IBM's gross negligence or willful misconduct or to written instructions provided by an authorized representative of IBM to MSL. + +IBM Confidential June 2, 1999 ATT6.1wp Page 9 of 19 + + ATTACHMENT 6 SOFTWARE INSTALLATION TERMS AND CONDITIONS + + APPENDIX A ADDITIONAL OBLIGATIONS FOR MICROSOFT CODE AND DOCUMENTATION + +6. ADDITIONAL MODIFICATION AND AMENDMENT RIGHTS. IBM may modify, add or delete terms or conditions of this Attachment 6 (including its Appendices and Exhibits) in response to a modification or amendment of the MS License by providing MSL thirty (30) calendar days advance written notice or the same period of time MS gives IBM to comply with a modification or amendment, if such period is less than thirty (30) calendar days. MSL agrees to comply with such modifications, additions, or deletions to this Attachment 6 if it continues to Preload MS Software Images on Products after such notice period. + +7. ADDITIONAL TERMINATION RIGHTS. In addition to the termination provisions provided in Section 5.0 of the Outsourcing Base Agreement, IBM may terminate this Attachment 6, in whole or in part ("in part" including any or all provisions regarding MS Software Images), without liability, due to: (a) the expiration or termination of the MS License; or (b) the expiration or termination of the Agreement, including without limitation, termination of this Attachment 6 as specified below: + + + + + + (i) IBM may, at IBM's sole discretion, terminate all rights granted to MSL under this Attachment 6 (and its associated Exhibits and Appendices), with cause immediately upon written notice to MSL; + + (ii) MS may terminate this Attachment 6 in part (i.e., to the extent MS Software Images are included in this Attachment 6) immediately upon written notice to MSL and IBM in the event that MS learns of any unauthorized use, reproduction or distribution of MS Intellectual property by MSL, or its employees or agents; + +IBM Confidential June 2, 1999 ATT6.1wp Page 10 of 19 + + ATTACHMENT 6 SOFTWARE INSTALLATION TERMS AND CONDITIONS + + EXHIBIT I OF APPENDIX A MS SOFTWARE IMAGES + +The term "MS Software Images" consists of the following Microsoft Corporation products: + +A. [*] + +B. [*] + +IBM Confidential June 2, 1999 ATT6.1wp Page 11 of 19 + + ATTACHMENT 6 SOFTWARE INSTALLATION TERMS AND CONDITIONS + + EXHIBIT 2 OF APPENDIX A EXTERNAL DOWNLOAD PROCESS + +EXTERNAL DOWNLOAD PROCESS. The following process shall comply with the requirements set forth in Subsection 2(c)(i) of Appendix A, Attachment 6: + +(a) download tools (which are "off the shelf products") used to perform installation process are not required to be in a secured area (1,2); + +(b) the master image is retained in a secured area (which is either a locked room or cabinet) when not in use; + +(c) the installation process is periodically monitored by an IBM employee or IBM contractor employee (who is not an employee of MSL); + +(d) if the image is installed on a hardfile prior to installation of the hardfile on the Product, such installed hardfile serial numbers will be separately tracked and any such hardfiles that are not installed in a Product by the end of the work session will be secured in the secured area; + +(e) the hardfile on which the image is installed is electronically verified and associated to the Product unit serial number; + +(f) MSL electronically tracks the system unit serial number, hardfile serial number, and designated model number; + +(g) access to the secured area where the master image is retained when not in use is limited to an IBM employee, IBM contractor employee, or MSL; + +(h) the MS Certificate of Authenticity (COA) serial number is electronically associated by MSL to the Product serial number; + +Notes: 1. Customer Product model and serial number electronically captured via the vital product data. 2. IBM proprietary software, maintained and accessible only by IBM or MSL, shall be used for the download process. + +IBM Confidential June 2, 1999 ATT6.1wp Page 12 of 19 + + ATTACHMENT 6 SOFTWARE INSTALLATION TERMS AND CONDITIONS + + EXHIBIT 3 OF APPENDIX A RECOVERY CD INSTALLATION + +RECOVERY CD INSTALLATION. The following process shall comply with the requirements set forth in subsection 2(c)(ii) of Appendix A, Attachment 6: + +(a) download tools (which are "off the shelf products") used to perform the installation process are not required to be in a secured area; + +(b) the recovery CDs are retained in a secured area when not in use; + + + + + +(c) the installation process is periodically monitored by an IBM employee or IBM contractor employee (who is not an employee of MSL); + +(d) the hardfile on which the image is installed is electronically verified and associated to the Product serial number; + +(e) MSL electronically tracks the Product serial number, hardfile serial number, and designated model number; + +(f) access to the secured area where the recovery CDs are retained when not in use is limited to an IBM employee, IBM contractor employee or MSL; + +(g) the MS Certificate of Authenticity (COA) serial number is electronically associated to the Product serial number by the MSL. + +IBM Confidential June 2, 1999 ATT6.1wp Page 13 of 19 + + ATTACHMENT 6 SOFTWARE INSTALLATION TERMS AND CONDITIONS + + EXHIBIT 4 OF APPENDIX A SECURED SERVER DOWNLOAD PROCESS + +SECURED SERVER DOWNLOAD PROCESS. The following process shall comply with the requirements set forth in Subsection 2(c)(iii) of Appendix A, Attachment 6: + +(a) the master image shall be maintained on a secured server with access limited to an IBM employee, an IBM contractor employee, or MSL; + +(b) the server shall be accessible only to an IBM employee, an IBM contractor employee, or MSL through keyboard locks and power-on passwords; + +(c) only operators with valid user ids and passwords are authorized to initiate download. The IBM employee or IBM contractor employee need not be present for installation process; + +(d) the server electronically logs the model number, serial number, user id, and image part number when the installation process is initiated; + +(e) MSL electronically tracks the Product serial number, hardfile serial number and designated model number; + +(f) the MS COA serial number is electronically associated by MSL to the Product serial number + +IBM Confidential June 2, 1999 ATT6.1wp Page 14 of 19 + + ATTACHMENT 6 SOFTWARE INSTALLATION TERMS AND CONDITIONS + + EXHIBIT 5 OF APPENDIX A ADDITIONAL MS PROVISIONS: MS LICENSE OBLIGATIONS IMPOSED ON MSL + +1. INSTALLATION OBLIGATIONS. MSL represents, warrants and agrees that when performing work pursuant to this Attachment 6, it shall: + + (a) install no more than one (1) copy of the MS Software Image on each Product system hard disk ("Preinstalled MS Software"); + + (b) unless expressly authorized by IBM in writing to perform otherwise, pre-install the MS Software Image as the "default" operating system on each Product distributed with the MS Software Image (i.e., the MS Software Image will set up and execute unless the End User Customer configures the Approved Product otherwise). MSL shall preinstall the MS Software Image solely in accordance with the installation instructions set forth in this Attachment 6 and as further directed by IBM in Appendices. MSL may use the tangible forms of the programming code (tools and software) provided by IBM solely to preinstall the MS Software Image in accordance with this Attachment 6 and for no other purpose; + + (c) distribute, to IBM and IBM's subsidiaries, Products with only one (1) copy each of the Preloaded MS Software and related documentation as directed by IBM in writing; PROVIDED, HOWEVER, that if IBM provides MSL with a recovery CD of the MS Software Image ("Recovery CD") or back-up copy of the MS Software Image on CD ("Back-up Copy") in a Product's ship group, MSL shall distribute one copy of such Recovery CD or Back-up CD along with the Product, if so directed by IBM in writing; + + (d) distribute MS Software Image(s) and MS Software Image documentation only with Product(s) and only inside the Product package; + + (e) except as expressly authorized by IBM in writing, not modify, in any way, or delete any aspects of the MS Software Image and MS related documentation provided by IBM to MSL; + + (f) except as provided in this Attachment 6 or expressly authorized by IBM in writing, not remove or modify the package contents of any MS Software + + + + + + Image package or modify or translate any related End User documentation; + +IBM Confidential June 2, 1999 ATT6.1wp Page 15 of 19 + + ATTACHMENT 6 SOFTWARE INSTALLATION TERMS AND CONDITIONS + + EXHIBIT 5 OF APPENDIX A ADDITIONAL MS PROVISIONS: MS LICENSE OBLIGATIONS IMPOSED ON MSL + + (g) include an IBM-specified MS Software Image package with each Product distributed with an MS Software Image; A COA must be affixed to or accompany each copy of the MS Software Image documentation, and the COA serial number must be registered with the Product during the assembly process as provided in Exhibits 2, 3, and 4 of Appendix A of this Attachment 6. + + (h) if expressly authorized by IBM to distribute the MS Software Images(s) on media other than installed on the Product hard disk, distribute the MS Software Image(s) on separate media (e.g., separate diskettes, CD-ROM disc, etc.) from other software, except for distribution of a Recovery CD approved by IBM and MS; + + (i) Preload MS Software Images on Products, and place MS Software Image packages in Product packages, only at an Approved Location and solely by MSL's employees or contractors; + + (j) not reverse engineer any MS Software Image provided by IBM to MSL, except as permitted by applicable law without the possibility of contractual waiver. Except as necessary to Preload MS Software Images or as otherwise permitted in Attachment 6, MSL shall not reproduce the MS Software Image or any part of the related documentation. MSL shall make no use of the tangible MS Software Image and related documentation except as expressly described in this Attachment 6; + + (k) not distribute MS Software Images or any part of the related documentation in encrypted form, unless provided by IBM in such form and expressly directed by IBM to distribute in such form; + + (l) where MSL distributes Preinstalled MS Software within the Products, place a notice over either the Product power switch in the "OFF" position or the power inlet connector which informs the End User that turning on the Product system indicates acceptance of the terms of the End User License Agreement ("EULA"), or comply with such other procedure authorized by IBM to ensure EULA acceptance; + +IBM Confidential June 2, 1999 ATT6.1wp Page 16 of 19 + + ATTACHMENT 6 SOFTWARE INSTALLATION TERM AND CONDITIONS + + EXHIBIT 5 OF APPENDIX A ADDITIONAL MS PROVISIONS: MS LICENSE OBLIGATIONS IMPOSED ON MSL + + (m) if IBM expressly authorizes MSL in writing to enter End User information on behalf of End Users in the boxes provided for the on-screen End User registration process for the MS Software Image, not to enter Supplier's own name or make any other false or fictional registrations. MSL shall not (A) relieve End Users of their obligations to enter COA registration numbers in the on-screen End User registration process and to reply to on-screen EULA inquiries or (B) insert COA registration numbers or reply to EULA inquiries for or on behalf of End Users; + + (n) unless expressly authorized by IBM in writing, not install multiple versions of MS Software Images; + + (o) except as expressly authorized by IBM in writing, not distribute more than one MS Windows operating system (i.e., [*]) with the same Product. + +2. INTELLECTUAL PROPERTY NOTICES. MSL will not remove, modify or obscure any copyright, trademark, patent, or mask work notices that appear on the MS Software Image or related documentation as delivered to MSL. + +3. OBLIGATIONS UPON TERMINATION. + + (a) Except as otherwise provided in Subsection 3(b) below, within [*] calendar days after termination or expiration of the Agreement (or this Attachment 6, in the event of termination in part) for any reason, MSL shall return to IBM all MS Software Image(s) master media and all MS Software Image documentation which has not been placed in a Product package prior to such termination or expiration, and MSL shall provide written notice to IBM signed by a representative certifying that MSL has fulfilled such requirements. + + (b) Except as otherwise provided in this Subsection 3(b), upon termination or expiration of the Agreement (or this Attachment 6, in the + + + + + + event of termination in part) for any reason, MSL's authority to Preload MS Software Images and to place MS Software Image documentation in Product packages shall immediately cease. + +IBM Confidential June 2, 1999 ATT6.1wp Page 17 of 19 + + ATTACHMENT 6 SOFTWARE INSTALLATION TERMS AND CONDITIONS + + EXHIBIT 5 OF APPENDIX A ADDITIONAL MS PROVISIONS: MS LICENSE OBLIGATIONS IMPOSED ON MSL + +4. ADDITIONAL AUDITS AND INSPECTIONS. + + (a) During the Term of the Agreement, and for [*] years thereafter, MSL agrees to keep all usual and proper records and books of account and all usual and proper entries relating to each MS Software Image sufficient to substantiate the number of copies of MS Software Image packages acquired and placed into Product packages, the number of copies of MS Software Images installed, and the number of Products distributed by MSL. MSL shall maintain on MSL's premises (or commercial archive facility) such records, and all other records required to be kept by this Attachment 6, for itself and for each Subsidiary of MSL that exercises rights under this Attachment 6. Any audit must be initiated within [*] years after termination or expiration of this Attachment 6, the Agreement, or of the MS License, whichever occurs last. + + (b) In order to verify statements issued by MSL and Subsidiaries of MSL and compliance with the terms and conditions of this Attachment 6, IBM or MS may, at IBM's or MS's sole discretion, cause (i) an audit to be made of MSL's and/or MSL's Subsidiaries' books and records and/or (ii) an inspection to be made of those portions of MSL's and/or MSL's Subsidiaries' facilities and procedures reasonably necessary to verify such compliance. Except as otherwise provided in the Agreement, any audit and/or inspection shall be conducted during regular business hours at MSL's and/or MSL's Subsidiaries' facilities, with at least forty-five (45) calendar days prior written notice. Any audit and/or inspection shall be conducted (other than on a contingent fee basis) by an independent certified public accountant which is either (1) jointly selected by MSL and IBM (or MS, as applicable), (2) has been agreed to by the Parties for any prior audit of any MSL/IBM (or MS, as applicable) license or agreement, or (3) has been agreed to by IBM and MS for any prior audit of any IBM/MS license or agreement. + + (c) MSL agrees to provide the audit or inspection team reasonable access to the relevant MSL's and/or MSL's Subsidiaries' records and facilities for the purpose of performing the audit. + +IBM Confidential June 2, 1999 ATT6.1wp Page 18 of 19 + + ATTACHMENT 6 SOFTWARE INSTALLATION TERMS AND CONDITIONS + + EXHIBIT 5 OF APPENDIX A ADDITIONAL MS PROVISIONS: MS LICENSE OBLIGATIONS IMPOSED ON MSL + + (d) Prompt adjustment shall be made to compensate for any errors or omissions disclosed by such audit. Any such audit shall be paid for by IBM (or MS, as applicable) unless material discrepancies are disclosed. "Material" shall mean an underaccounting of installed MS Software Images valued at more than [*]. If material discrepancies are disclosed, MSL agrees to pay IBM or MS for the costs associated with the audit. Further, MSL agrees to indemnify IBM and its subsidiaries for any additional costs incurred by IBM as a result of any unauthorized copies or copies which were not reported to IBM. In no event shall audits be made more frequently than semiannually unless the immediately preceding audit disclosed a material discrepancy. + +5. EXPORT OR RE-EXPORT. MSL agrees that it will not export or re-export an MS Software Image to any country to which such export is restricted by export administration regulations, without prior written consent, if required, of the Office of Export Administration of the U.S. Department of Commerce, or such other governmental entity as may have jurisdiction over such export. Restricted countries currently include, but are not necessarily limited to, Cuba, Sudan, Iran, Iraq, Libya, North Korea, and Syria. MSL warrants and represents that neither the U.S.A. Bureau of Export Administration nor any other federal agency has suspended, revoked or denied MSL's export privileges. MSL further agrees that it shall not export or re-export an MS Software Image in violation of applicable laws or regulations to (i) any End User who MSL knows will utilize an MS Software Image in the design, development or production of nuclear, chemical or biological weapons; or (ii) any End User who has been prohibited from participating in U.S.A. export transactions by any federal agency of the U.S.A. government. + +6. CONFIDENTIALITY. As provided in the Agreement, the terms and conditions of this Attachment 6 (including this Exhibit 5 of Appendix A of Attachment 6) are confidential, and MSL shall not disclose the terms or conditions to any third + + + + + +party without the prior written approval of IBM. + +IBM Confidential June 2, 1999 ATT6.1wp Page 19 of 19 + + IBM AGREEMENT FOR EXCHANGE OF CONFIDENTIAL INFORMATION + + Document Number: 4998S60076 + + International Business Machines Corporation Armonk, New York 10504 + + Page 1 of 5 + + [GRAPHIC OMITTED] + + Agreement for Exchange of Confidential Information + +IBM ============================================================================ + + Our mutual objective under this Agreement is to provide appropriate protection for Confidential Information (Information) while maintaining our ability to conduct respective business activities. Each of us agree that the following terms apply when one of us (Disclose) discloses Information to the other (Recipient) under this Agreement. + +SECTION 1 ASSOCIATED CONTRACT DOCUMENTS + + Each time one of the parties wishes to disclose specific Information to the other, the Discloser will issue a Supplement to this Agreement (Supplement) before disclosure. + + The Supplement will identify the Recipient's person designated to be its Point of Contact for the disclosure and will contain the Initial and Final Disclosure Dates. If either of these dates is omitted from the Supplement, such date will be deemed to be the actual date of disclosure. Information becomes subject to this Agreement on the Initial Disclosure Date. The Supplement will also contain a non-confidential description of the specific Information to be disclosed and any additional terms for that Information. + + The only time Recipient and Discloser are required to sign the Supplement is when it contains additional terms. When signatures are not required, the Recipient indicates acceptance of Information under the terms of this Agreement by participating in the disclosure, after receipt of the Supplement. + +SECTION 2 DISCLOSURE + + The Discloser and Recipient's Point of Contact will coordinate and control the disclosure. Information will be disclosed either: + + 1) In writing; 2) By delivery of items; 3) By initiation of access to information, such as may be contained in a data base; or 4) By oral and/or visual presentation. + + Information should be marked with a restrictive legend of the Discloser. If Information is not marked with such legend or is disclosed orally: + + 1) The Information will be identified as confidential at the time of disclosure, and 2) The Discloser will promptly provide the Recipient with written summary. + +SECTION 3 OBLIGATION + + The Recipient agrees to: + + 1) use the same care and discretion to avoid disclosure, publication or dissemination of the Discloser's Information as it uses with its own similar Information that it does not wish to disclose, publish or disseminate; and 2) use the Discloser's Information for the purpose for which it was disclosed or otherwise for the benefit of the Discloser. + + The Recipient may disclose Information to: + + Page 2 of 5 + + 1) its employees and employees of its parent and subsidiary companies who have a need to know; and 2) any other party with the Discloser's prior written consent. + + + + + + Before disclosure to any of the above parties, the Recipient will have a written agreement with such party sufficient to require that party to treat information in accordance with this Agreement. + + The Recipient may disclose Information to the extent required bylaw. However, the Recipient must give the Discloser prompt notice to allow the Discloser a reasonable opportunity to obtain a protective order. + +SECTION 4 CONFIDENTIALITY PERIOD + + Information disclosed pursuant to this Agreement will be subject to the terms of this Agreement for [*] years following the Final Disclosure Date. + +SECTION 5 EXCEPTIONS TO OBLIGATIONS + + The Recipient may disclose, publish, disseminate, and use Information that is: + + 1) already in its possession without obligation of confidentiality; 2) developed independently; 3) obtained from a source other than the Discloser without obligation of confidentially; 4) publicly available when received, or thereafter becomes publicly available through no fault of the Recipient; or 5) disclosed by the Discloser to another party without obligation of confidentially. + +SECTION 6 RESIDUAL INFORMATION + + The recipient may disclose, publish, disseminate, and use the ideas, concepts, know-how and techniques, related to the Recipient's business activities, which are contained in the Discloser's information and retained in the memories of Recipient's employees who have had access to the Information pursuant to this Agreement (Residual Information). + + Nothing contained in this Section gives the Recipient the right to disclose, publish, or disseminate, except as set forth elsewhere in this Agreement: + + 1) the source of Residual Information; 2) any financial, statistical or personnel data of the Discloser; or 3) the business plans of the Discloser. + +SECTION 7. DISCLAIMERS + + THE DISCLOSER PROVIDES INFORMATION ON AN "AS IS" BASIS. + + The discloser will not be liable for any damages arising out of use of Information disclosed hereunder. + + Neither this Agreement nor any disclosure of Information hereunder grants the Recipient any right or license under any trademark, copyright or patent now or hereafter owned or controlled by the Discloser. + + Disclosure of Information containing business plans is for planning purposes only. The Discloser may change or cancel its plans at any time. Use of such Information is at the Recipient's own risk. + + The receipt of Information pursuant to this Agreement will not preclude, or in any way limit, the Recipient from: + + Page 3 of 5 + + 1) providing to others products or services which may be competitive with products or services of the Discloser; 2) providing products or services to others who compete with the Discloser; or 3) assigning its employees in any way it may choose. + +SECTION 8 GENERAL + + This Agreement does not require either party to disclose or to receive Information. + + Neither party may assign, or otherwise transfer, its rights or delegate its duties or obligations under this Agreement without prior written consent. Any attempt to do so is void. + + The Recipient will comply with all applicable United States and foreign export laws and regulations. + + Only a written agreement signed by both of us can modify this Agreement. + + Either party may terminate this Agreement by providing [*] month's written notice to the other. Any provisions of this Agreement which by their nature extend beyond its termination remain in effect until fulfilled, and apply to respective successors and assignees. + + + + + + If there is a conflict between the terms of this Agreement and a Supplement, those of the Supplement prevail. Except as modified by a Supplement, the terms of this Agreement remain in full force and effect. + + The laws of the State of New York govern this Agreement. + + Page 4 of 5 + + This Agreement and its Supplements are the complete and exclusive agreement regarding our disclosures of Information, and replace any prior oral written communications between us. By signing below for our respective enterprises, each of us agrees to the terms of this Agreement. Once signed, any reproduction of this Agreement made by reliable means (for example, photocopy or facsimile) is considered an original. + + International Business Machines Manufacturer Services Limited Corporation 200 Baker Avenue Armonk, New York Concord, Massachusetts + +By: /s/ Craig Bloszinsky By: ---------------------------------- ---------------------------------- Authorized Signature Authorized Signature + +Name: Craig Bloszinsky Name: ---------------------------------- ---------------------------------- + +Date: 3/10/98 Date: ---------------------------------- ---------------------------------- + +Agreement Number 4998S60076 International Business Machines Corporation Armonk, New York 10504 + + Page 5 of 5 + + EQUIPMENT AND PROGRAM LOAN AGREEMENT + + between + + IBM Corporation + + and + + Manufacturers' Services Western US Operations, Inc. + + [GRAPHIC OMITTED] + +IBM Equipment and Program Loan Agreement ============================================================================ + +This is an Equipment and Program Loan Agreement ("EPLA") between International Business Machines Corporation (hereinafter called "IBM"), a New York corporation, with an address for the purpose of this Agreement at 8501 IBM Drive, Charlotte, NC 28262, and Manufacturers' Services Western US Operations, Inc. (hereinafter called "MSL"), with an address at 5600 Mowry School Road, Newark, CA 94560. + +IBM and MSL agree that the following terms and conditions apply when IBM loans MSL equipment and programs including associated user manuals and similar documentation (Loaned Items). Loaned Items may also be referred to as Loaned Equipment or Loaned Programs, as applicable. + +SECTION 1 ASSOCIATED CONTRACT DOCUMENTS + + Attachment 5 of the Outsourcing Agreement lists the Loaned Items. A revised Attachment 5 sets forth any additions or deletions to the listed Loaned Items. MSL's continued use of the Loaned Items or acceptance of additional Loaned Items after its receipt of a revised Attachment 5 will constitute its acceptance of such Attachment. + + The loan of Loaned Items is made in conjunction with the IBM and MSL Outsourcing Agreement dated _____________________ ("Referenced Agreement") for the purpose of MSL fulfilling its responsibilities and obligation as stated in the Reference Agreement. + +SECTION 2 TERM AND TERMINATION + + Unless otherwise mutually agreed, the EPLA will be in effect for as long as the Referenced Agreement is effective. + +SECTION 3 LOANED PERIOD + + IBM will provide the Loaned Items to MSL on or about the Effective Date of the Referenced Agreement. The Loan Period for each Loaned Item will extend from the actual date IBM delivers the Loaned Items(s) to MSL, until the + + + + + + earliest of: + + a) the applicable return date specified in the Attachment or revised return date specified in a revised Attachment; + + b) the date MSL acquires i) title to the Loaned Equipment or ii) a continuing license to the Loaned Program, should such acquisition or licensing be available to MSL under Section 12: or + + c) on the Referenced Agreement expiration date. + +SECTION 4 AUTHORIZED USE + + IBM provides Loaned Items to MSL solely for use in accordance with the terms of this Agreement and for the Purpose of the loan described either in this Agreement or in the Referenced Agreement (Authorized Use). There are no charges for Authorized Use of the Loaned Items. MSL may not use the Loaned Items for any other purposes. + +EPL00L(CLT-EPL 1.1-02/93) Page 2 of 7 + +SECTION 5 OWNERSHIP AND LICENSE + + IBM or another party retains title to all Loaned Items. MSL may not transfer Loaned Items to anyone else. For Loaned Programs which are not subject to IBM's or another supplier's or publisher's license agreement, IBM grants MSL a license to use, store, modify and make sufficient copies to support MSL's Authorized Use under this Agreement. Such copies will be deemed to be Loaned Items. For Loaned Programs which are subject to another supplier's or publisher's license agreement, however, the terms and conditions of that supplier or publisher are passed to MSL through IBM. Such terms and conditions will be shipped with the Loaned Program. For Loaned Programs which IBM licenses to others under an IBM license, the terms of the applicable IBM license which are not inconsistent with this Agreement apply. IBM will provide such terms to MSL upon request Any authorized copies made by MSL will be deemed to be Loaned Items. + +SECTION 6 LICENSED INTERNAL CODE + + If the Loaned Equipment contains Licensed Internal Code (Code), so identified by IBM, IBM grants MSL a license only to execute such Code to enable the Loaned Equipment to perform in accordance with IBM's official published specifications. MSL may not reverse assemble, reverse compile, decode, translate, or make any other copies of the Code. MSL must return the original copy of the Code to IBM at the conclusion of the Loan Period. + +SECTION 7 DELIVERY AND INSTALLATION + + IBM will deliver the Loaned Items to 8501 IBM Drive, Charlotte, NC 28262. + + MSL will: + + 1) set-up all Loaned Equipment, and + + 2) install all Loaned Programs + +SECTION 8 RISK OF LOSS OR DAMAGE + + IBM relieves MSL of the risk of loss of, or damage to, all Loaned Items, except for loss or damage resulting from MSL's breach of this Agreement including use other than Authorized Use. + +SECTION 9 SECURITY + + MSL will provide, at no cost to IBM, adequate security to protect the Loaned Items from theft, damage or misuse. + + MSL will use reasonable care in the use of all Loaned Items. MSL will provide an operating environment for the Loaned Items consistent with the related user documentation. + + MSL will keep the Loaned Items at the Installation Address specified in the Attachment. MSL will not move the Loaned Items to another location without IBM's prior written approval. + +SECTION 10 SERVICE AND SUPPORT + + During the time the Loaned Items are in MSL's possession, MSL shall, at its own expense: + + a) Develop and maintain the expertise to operate the Equipment independent of IBM and ensure that the Equipment complies at all times with all federal, state, and local governmental safety and other requirement (including OSHA regulations). If MSL determines that any of the Loaned Items received from IBM fails to comply with any such requirements, MSL shall promptly notify IBM, and IBM shall + +EPL00L(CLT-EPL 1.1-02/93) Page 3 of 7 + + either replace the Loaned Item or instruct MSL to modify the Loaned Item so that it compiles, at IBM's expense. + + + + + + b) Service the Loaned Items and maintain them in good operating condition at all times. + + c) Replace or repair all items lost, damaged or destroyed except to the extent MSL proves to IBM that such loss, damage or destruction is caused by circumstances beyond MSL's control. All replacement of Loaned Items Shall become IBM property and shall be Subject to all the terms and conditions of this Agreement. + + MSL will permit IBM personnel full, free and safe access to MSL's facilities, during normal business hours, after reasonable notice, for the purpose of inspection and inventory as IBM deems necessary. + +SECTION 11 ALTERATIONS AND ATTACHMENTS + + MSL may make an alteration to Loaned Equipment (e.g., a change in the structure of the equipment) only upon IBM's prior written approval. MSL may make an attachment to Loaned Equipment (e.g., coupling a printer to a loaned personal computer) without notice to IBM. + + MSL will remove any alteration or attachment and restore Loaned Equipment to its unaltered condition before its return to IBM or upon IBM's notice to MSL that the alteration or attachment creates a safety hazard or renders maintenance of the Loaned Equipment impractical. + +SECTION 12 DISPOSITION OF LOANED ITEMS + +12.1 Return to IBM + + MSL will return the Loaned Equipment to IBM at the end of the Loan Period, except as may be provided for in this Section. MSL will return the Loaned Equipment to IBM in the same condition as when delivered to MSL, reasonable wear and tear excepted. + + MSL will return the original and all copies of the Loaned Programs at the end of the Loaned Period, except as may be provided in this Section. + + MSL will permit IBM personnel access during IBM's normal business hours to allow IBM to remove the Loaned Items. + +12.2 Acquisition and Continued Licensing + + IBM will determine the availability of Loaned Equipment for MSL's acquisition and Loaned Programs for MSL's continued licensing beyond the applicable Loan Period. MSL must inform IBM, prior to the end of the applicable Loan Period, of MSL's interest in the acquisition of specific Loaned Equipment or the continued licensing of specific Loaned Programs. IBM will then notify MSL in writing either; + + 1) of the terms and conditions under which MSL may acquire such Loaned Equipment or continue to license such Loaned Programs, or + + 2) that the Loaned Items are not available for acquisition or continued licensing. + + Continued Licensing of Loaned Programs will be governed by the provisions of the applicable IBM license agreement or another supplier's or publisher's license agreement. IBM will identify to MSL the applicable agreement which governs such licensing. + +EPL00L(CLT-EPL 1.1-02/93) Page 4 of 7 + +SECTION 13 DISCLAIMER OF WARRANTY + + IBM PROVIDES LOANED ITEMS ON AN "AS IS" BASIS. IBM MAKES NO WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT TO SUCH ITEMS, INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. + +SECTION 14 PATENTS AND COPYRIGHTS + + If the operation of a Loaned Item becomes, or IBM believes is likely to become, the subject of a claim that it infringes a patent or copyright in the United States or Puerto Rico, MSL will permit IBM, at its option and expense, either to secure the right for MSL to continue using the Loaned Item or to replace or modify it so that it becomes noninfringing. However, if neither of the foregoing alternatives is available on terms which are reasonable in IBM's judgment, MSL will return the Loaned Item upon IBM's written request. + + IBM will have no obligation with respect to any such claim based upon MSL's modification of IBM equipment, programs or programming or their combination, operation or use with any non-IBM apparatus, data or programs. + + IBM will not have any liability regarding patent or copyright infringement for non-IBM Loaned Items. + + This Section states IBM's entire obligations to MSL regarding infringement or the like. + +SECTION 15 LIMITATION OF REMEDIES + + + + + + IBM's entire liability and MSL's exclusive remedy for actual damages from cause whatsoever relating to the subject matter of this Agreement will be limited to the amount of $25,000. This limitation will apply, except as otherwise stated in this Section, regardless of the form of action, whether in contract or in tort, including negligence. This limitation will not apply to claims by MSL for bodily injury or damage to real property or tangible personal property for which IBM is legally liable. + + In no event will IBM be liable for any lost profits, lost savings, incidental damages, or other economic consequential damages, even if IBM has been advised of the possibility of such damages. In addition, IBM will not be liable for any damages claimed by IBM based on any third party claim. + + In no event will IBM be liable for any damages caused by MSL's failure to perform MSL's responsibilities. + +SECTION 16 GENERAL + + MSL may not assign this Agreement without IBM's prior written consent. Any attempted assignment without such consent is void. + + Loaned Items are to be installed only in the United States or Puerto Rico. + + IBM will pay destination charges, both from and to IBM-designated locations, for each Loaned Item shipped in accordance with IBM's then current shipping practice. MSL will pay any rigging charges. MSL will furnish all labor for unpacking and packing except as IBM otherwise specifies or when performed at an IBM-designated location. + + IBM may provide services described in this Agreement by using IBM-selected independent contractors. + + Neither party is responsible for failure to fulfill its obligations under this Agreement due to causes beyond its control. + +EPL00L(CLT-EPL 1.1-02/93) Page 5 of 7 + + Neither party may bring an action, regardless of form, arising out of this Agreement more than [*] years after the cause of action arose. + + In the event of termination or expiration of this Agreement, the provisions of this Agreement which, by their nature, extend beyond the expiration or termination of this Agreement shall remain in effect beyond such expiration or termination until fulfilled. + + If there is a conflict between this Agreement and an Attachment, the terms and conditions of the Attachment will prevail. Except as modified by an Attachment the terms of this Agreement remain in full force and effect. The terms of any Attachment not inconsistent with a subsequent Attachment remain in full force and effect. + + This Agreement and the rights and obligations of the parties hereto shall be construed in accordance with the substantive laws of the State of New York. + +EPL00L(CLT-EPL 1.1-02/93) Page 6 of 7 + + IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective authorized representatives. + + ACCEPTED AND AGREED TO: ACCEPTED AND AGREED TO: + + IBM Corporation Manufacturers' Services Western US Operations, Inc. -------------------------------------------------------------------------- + + By: /s/ Craig A. Bloszinsky By: /s/ Kevin C. Melia -------------------------------------------------------------------------- + + CRAIG A. BLOSZINSKY KEVIN C. MELIA -------------------------------------------------------------------------- Print Name Print Name + + PURCHASING PROGRAM DIRECTOR PRESIDENT, CEO -------------------------------------------------------------------------- Title Title + + 5/1/98 MAY 5, 1998 -------------------------------------------------------------------------- Date Date + + + + + +EPL00L(CLT-EPL 1.1-02/93) Page 7 of 7 \ No newline at end of file diff --git a/full_contract_txt/MARSHALLHOLDINGSINTERNATIONAL,INC_04_14_2004-EX-10.15-ENDORSEMENT AGREEMENT.txt b/full_contract_txt/MARSHALLHOLDINGSINTERNATIONAL,INC_04_14_2004-EX-10.15-ENDORSEMENT AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..8e821ce8b59e15ff1652d56c8bada2b4d8c5cc3b --- /dev/null +++ b/full_contract_txt/MARSHALLHOLDINGSINTERNATIONAL,INC_04_14_2004-EX-10.15-ENDORSEMENT AGREEMENT.txt @@ -0,0 +1,107 @@ +EXHIBIT 10.15 + + ENDORSEMENT AGREEMENT + + This ENDORSEMENT AGREEMENT (the "Agreement") is made this 1st day of --- November, 2003 by and between Bruce Jenner, Individual ("CELEBRITY"), with his offices located in California; and The Right Solution, a Nevada Corporation (the COMPANY), with its offices located at 3035 East Patrick Lane, Suite 14, Las Vegas, Nevada 89120. + + WHEREAS, CELEBRITY has experience in public speaking and marketing and + + WHEREAS, the COMPANY desires to do business with the CELEBRITY and + + NOW, THEREFORE, in consideration of the mutual promises, covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the COMPANY and CELEBRITY agree as follows: + +1. ENGAGEMENT The COMPANY agrees to a one year engagement to contract the CELEBRITY to speak at the company meetings and seminars along with endorsement of the Company products. + +2. The CELEBRITY will be limited to six speaking engagements for the year and five conference calls per month at the company's discretion. + +3. The CELEBRITY will assist in getting a distributorship started through his contacts and fan mail. The CELEBRITY can designate the party placed in the distributorship direct to the Company. This distributorship will be independent of the endorsement terms of the agreement and will remain on going as long as the CELEBRITY maintains the annual membership fee. + +4. TERMS FOR THE COMPANY + + (i) The COMPANY will flag the CELEBRITY center at level six for a six month period. COMPANY will provide the necessary time to work with the business on products, strategies and opportunity. Jack Zufelt will coordinate all efforts and work direct with the CELEBRITY and or the designee. + + (ii) The COMPANY will provide products at no cost for use by the CELEBRITY for personal use throughout the duration of this agreement. COMPANY will pay $10,000 upfront to begin representation and support of the CELEBRITY. + + (iii) CELEBRITY will receive $6,000 per month for entire duration of the agreement. The COMPANY will give stock to the CELEBRITY which will be restricted for one year from issuance and will be as follows: + + Monthly Sales Volume Stock Options -------------------- ------------- $ 300,000 300,000 shares 600,000 600,000 shares 1,000,000 1,000,000 shares These stock options will remain in place until certificates are issued once volumes are met as long as the CELEBRITY maintains the distributorship by paying the annual dues of $15.00. + + (iv) The terms of this agreement will remain confidential between CELEBRITY and the COMPANY unless written permission is granted for release by both parties. + + (v) Travel arrangements and accommodations will be provided by the COMPANY. This will be first class accommodations when available. + + TERMS FOR THE CELEBRITY + +Work with Jack Zufelt to develop a business strategy that can be implemented within 30 days of the signing of this agreement. (i) Identify marketing platform to recruit new distributors (ii) Develop a recruiting packet for new recruits that are duplicable with most tools coming from the corporate website and / or inventory. (iii) CELEBRITY will be available for phone conferences and meeting participating at any level deemed necessary by the COMPANY. (iv) CELEBRITY will be available for conference calls not to exceed five per month and at the discretion of his schedule. (v) The terms of this agreement will remain confidential between CELEBRITY and the COMPANY unless written permission is granted for release by both parties. + +INDEPENDENT CONTRACTOR CELEBRITY and CELEBRITY Personnel will act as an independent contractor in the performance of its duties under this Agreement. Accordingly, CELEBRITY will be responsible for payment of all federal, state, and local taxes on compensation paid under this Agreement, including income and social security taxes, unemployment insurance, and any other taxes due relative to Distributor's Personnel and any and all business license fees as may be required. This Agreement neither expressly nor impliedly creates a --- relationship of principal and agent, or employee and employer, between Distributor's Personnel and the COMPANY. Neither CELEBRITY nor CELEBRITY Personnel are authorized to enter into any agreements on behalf of the + + + + + + COMPANY. The COMPANY expressly retains the right to approve, in its sole discretion, each Asset Opportunity or Business Opportunity introduced by CELEBRITY, and to make all final decisions with respect to effecting a transaction on any Business Opportunity. + +6. TERMINATION + + The COMPANY and CELEBRITY may terminate this Agreement under the following conditions: + + (A) By the COMPANY. -------------- + + (i) If during the Term of this Agreement the CELEBRITY is unable to provide the Services as set forth herein for thirty (30) consecutive business days because of illness, accident, or other incapacity of CELEBRITY Personnel; or, + + (ii) If CELEBRITY willfully breaches or neglects the duties required to be performed hereunder; or, + + (B) By CELEBRITY ------------ + + (i) If the COMPANY fails to make any payments or provide information required hereunder; or, + + (ii) If the COMPANY ceases business or, other than in an Initial Merger, sells a controlling interest to a third party, or agrees to a consolidation or merger of itself with or into another corporation, or enters into such a transaction outside + + of the scope of this Agreement, or sells substantially all of its assets to another corporation, entity or individual outside of the scope of this Agreement; or, + + (iii) If the COMPANY subsequent to the execution hereof has a receiver appointed for its business or assets, or otherwise becomes insolvent or unable to timely satisfy its obligations in the ordinary course of, including but not limited to the obligation to pay the Initial Fee, the Transaction fee, or the CELEBRITY Fee; or, + +7. INDEMNIFICATION + + Subject to the provisions herein, the COMPANY and CELEBRITY agree to indemnify, defend and hold each other harmless from and against all demands, claims, actions, losses, damages, liabilities, costs and expenses, including without limitation, interest, penalties and attorneys' fees and expenses asserted against or imposed or incurred by either party by reason of or resulting from any action or a breach of any representation, warranty, covenant, condition, or agreement of the other party to this Agreement. The CELEBRITY will have full release of liability in regards to product performance and/or law suites resulting from use of the product. This liability will remain the responsibility of the COMPANY and manufacturers. + +8. MISCELLANEOUS + + (i) Subsequent Events. CELEBRITY and the COMPANY each agree to notify the ----------------- other party if, subsequent to the date of this Agreement, either party incurs obligations which could compromise its efforts and obligations under this Agreement. + + (ii) Amendment. This Agreement may be amended or modified at any time and --------- in any manner only by an instrument in writing executed by the parties hereto. + + (iii) Further Actions and Assurances. At any time and from time to time, ------------------------------ each party agrees, at its or their expense, to take actions and to execute and deliver documents as may be reasonably necessary to effectuate the purposes of this Agreement. + + (iv) Waiver. The party to whom such compliance is owed may waive any ------ failure of any party to this Agreement to comply with any of its obligations, agreements, or conditions hereunder in writing. The failure of any party to this Agreement to enforce at any time any of the provisions of this Agreement shall in no way be construed to be a waiver of any such provision or a waiver of the right of such party thereafter to enforce each and every such provision. No waiver of any breach of or noncompliance with this Agreement shall be held to be a waiver of any other or subsequent breach or noncompliance. + + (v) Assignment. Neither this Agreement nor any right created by it shall ---------- be assignable by either party without the prior written consent of the other or as stated herein. + + + + + + (vi) Notices. Any notice or other communication required or permitted by ------- this Agreement must be in writing and shall be deemed to be properly given when delivered in person to an officer of the other party, when deposited in the United States mails for transmittal by certified or registered mail, postage prepaid, or when deposited with a public telegraph COMPANY for transmittal, or when sent by facsimile transmission charges prepared, provided that the communication is addressed: + + (A) In the case of the COMPANY: The Right Solution 3095 East Patrick Lane, Suite 14 Las Vegas, Nevada 89120 + + (B) In the case of the CELEBRITY: Bruce Jenner 2345 Elbury Court Lake Sherwood, CA 91361 + + or to such other person or address designated in writing by the COMPANY or CELEBRITY to receive notice. + +9. Governing Law. This Agreement was negotiated and is being contracted ------------- for in Nevada, and shall be governed by the laws of the State of Nevada, and the United States of America, notwithstanding any conflict-of-law provision to the contrary. + +10. Binding Effect. This Agreement shall be binding upon the parties -------------- hereto + +11. Entire Agreement. This Agreement contains the entire agreement ---------------- between the parties hereto and supersedes any and all prior agreements, arrangements, or understandings between the parties relating to the subject matter of this Agreement. No oral understandings, statements, promises, or inducements contrary to the terms of this Agreement exist. No representations, warranties, covenants, or conditions express or implied, other than as set forth herein, have been made by any party. + +12. Severability. If any part of this Agreement is deemed to be ------------ unenforceable the balance of the Agreement shall remain in full force and effect. + +13. Counterparts. A facsimile, telecopy, or other reproduction of this ------------ Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument, by one or more parties hereto and such executed copy may be delivered by facsimile or similar instantaneous electronic transmission device pursuant to which the signature of or on behalf of such party can be seen. In this event, such execution and delivery shall be considered valid, binding and effective for all purposes. At the request of any party hereto, all parties agree to execute an original of this Agreement as well as any facsimile, telecopy or other reproduction hereof. + + IN WITNESS WHEREOF, the parties have executed this Agreement on the date above written. + + The COMPANY CELEBRITY The Right Solution Bruce Jenner A Nevada Corporation Independent Contractor/COMPANY + + By ____________________________ By _________________________________ Rick Bailey President / CEO \ No newline at end of file diff --git a/full_contract_txt/MARTINMIDSTREAMPARTNERSLP_01_23_2004-EX-10.3-TRANSPORTATION SERVICES AGREEMENT.txt b/full_contract_txt/MARTINMIDSTREAMPARTNERSLP_01_23_2004-EX-10.3-TRANSPORTATION SERVICES AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..b9ba130863c1629119b93508f808ab11378d6fb2 --- /dev/null +++ b/full_contract_txt/MARTINMIDSTREAMPARTNERSLP_01_23_2004-EX-10.3-TRANSPORTATION SERVICES AGREEMENT.txt @@ -0,0 +1,121 @@ +EXHIBIT 10.3 + +TRANSPORTATION SERVICES AGREEMENT + +THIS MARINE TRANSPORTATION AGREEMENT (this "Agreement") is executed this 23rd day of December, 2003, by and between Martin Operating Partnership L.P., a Delaware limited partnership ("Owner"), and Midstream Fuel Service LLC, an Alabama limited liability company ("Charterer"), in order to evidence the agreement of such parties with respect to Owner's provision of marine transportation services with respect to #2 fuel oil and high sulfur diesel on board its marine vessels under the following terms and conditions. + + 1. TERM; TERMINATION + + + +The initial term of this Agreement shall be for 3 years (the "Initial Term") commencing on the date first set forth above (the "Commencement Date") and ending on the 3rd anniversary of the Commencement Date. This Agreement will automatically renew for successive one year terms (each a "Renewal Term", and together with the Initial Term, the "Term"), unless either Charterer or Owner elects not to renew this Agreement by providing the other party with written notice of such election 30 days prior to the expiration of the Initial Term or Renewal Term, as applicable, at which point this Agreement will automatically terminate. + + + +Within 30 days of the end of the Initial Term, and within 30 days of the end of each Renewal Term, both parties hereto shall have the right renegotiate the fee specified below for the use of the vessels. If no such agreement on such fee is reached by such parties by the commencement of a Renewal Term, this Agreement shall automatically terminate. + + + +Either party hereto shall have the right to terminate this Agreement in the event of a breach by the other party of its obligations hereunder, subject to 10 days prior written notice of such breach given by the non-breaching party to the breaching party and the opportunity for such breaching party to cure such breach during such 10 day period. Upon any such termination, this Agreement shall thereafter have no further force or effect except as to already accrued rights and obligations, which shall continue until satisfied. 2. GENERAL TERMS + + + +During the Term, Charterer agrees that Owner will be the sole and exclusive provider of marine transportation services for #2 fuel oil and high sulfur diesel owned by Charterer or owned by others and in transit for sale to Charterer so long as Owner has the required equipment available. Owner shall at all times provide sufficient and proper equipment for Charterer's performance of such transportation. Said equipment shall be manned, equipped, supplied and operated by Owner. The master and crew of said vessels shall be fully qualified, experience and, where necessary, certified and licensed. Owner agrees that said equipment shall be maintained in a seaworthy, staunch, tight and suitable condition and, to the best of Owner's knowledge, in compliance with all applicable laws and regulations. + + + +In connection with its use of any vessel, Charterer will follow Owner's normal scheduling, loading and offloading protocols established from time to time, subject to Owner's obligations set forth in this Agreement. + +1 + + + + + + + + + + 3. RATE + + + +Charterer agrees to pay to Owner a fee of $______ per gallon of product transported. Owner will invoice such fees to Charterer on a monthly basis and Charterer will pay such invoiced amounts within 30 days of invoice date. + + + +The fee stated above, unless otherwise adjusted by the parties pursuant to Section 1 above, shall be adjusted annually (both upward and downward), by a factor equal to the amount of increase or decrease, as the case may be, in the Consumer Price Index for the immediately proceeding month of November, over the Consumer Price Index for November of the preceding year. For purposes hereof, the term "Consumer Price Index" shall mean the "Consumer Price Index for Urban Wage Earners and Clerical Workers (1967=100)" specified for "All Items. United States" compiled by the Bureau of Labor Statistics of the United States Department of Labor (the "Index"). In the event the Consumer Price Index shall be converted to a different standard reference base or otherwise revised, the determination of the percentage change shall be made with the use of such conversion factor, formula or table for converting the Consumer Price Index as may be published by the Bureau of Labor Statistics or, if said Bureau shall not publish the same, then as shall be reasonably determined by the parties. 4. LOAD AND DISCHARGE + + + +The Load Port shall be FOB Refinery Offtake in the U.S. Gulf of Mexico. The Discharge Port shall be at the Owner's terminals located at Venice, LA; Port Forrochon, LA; Berwick, LA; Intracoastal City, LA; Cameron, LA; Sabine Pass, TX; Beaumont, TX; Galveston, TX; Houston, TX; Freeport, TX; Port O'Connor, TX; and Harbor Island, TX. 5. TITLE TO PRODUCT + + + +Title to all product handled shall remain at all times in the name of the Charterer. The Charterer agrees not to tender for load any product injurious to the vessels or which product would render the vessels unfit, after cleaning, for the proper storage of similar product. 6. ASSIGNMENT Neither party shall assign this Agreement without the express written consent of the other party. 7. ENTIRE AGREEMENT + + + +This Agreement shall constitute the entire agreement concerning the subject hereof between the parties superseding all previous agreements, negotiations and representations made prior or contemporaneous to the date hereof. This Agreement shall be modified or amended only by written agreement executed by both parties hereto. 8. GOVERNING LAW This Agreement shall be governed by and construed in accordance with the laws of the State of Texas. 9. ADDITIONAL TERMS The "Additional Terms" attached hereto as Exhibit A shall be deemed to be incorporated into this Agreement by this reference. + +2 + + + + + + + +IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first set forth above. + + MARTIN OPERATING PARTNERSHIP L.P. By: Martin Operating GP LLC, Its General Partner By: Martin Midstream Partners L.P., Its Sole Member By: Martin Midstream GP LLC, Its General Partner By: /s/ RUBEN S. MARTIN Ruben S. Martin Chief Executive Officer and President MIDSTREAM FUEL SERVICE LLC By: Martin Resource Management Corporation, its Sole Member By: /s/ RUBEN S. MARTIN + + Name: Ruben S. Martin Title: Chief Executive Officer and President + +3 + + + + + + + +EXHIBIT A + +ADDITIONAL TERMS + +These additional terms are deemed to be incorporated by reference into this Agreement. + +1. INVOICING & PAYMENT. All monthly Owner invoices to Charterer for rates and cost items will be paid by Charterer within 30 days of invoice date in accordance with Owner's normal payment protocols, which will be specified in the applicable invoice. Each monthly invoice shall be itemized to include charges by applicable vessel by day. + +2. DEMISE OF CHARTER. The Master of an applicable vessel, although appointed by and in the employ of Owner and subject to Owner's direction and control, shall observe the reasonable instructions of Charterer in connection with Charterer's transportation needs under this Agreement; PROVIDED, HOWEVER, THAT NOTHING IN THIS CLAUSE OR ELSEWHERE IN THIS AGREEMENT SHALL BE CONSTRUED AS CREATING A DEMISE OF THE APPLICABLE VESSEL TO CHARTERER OR AS VESTING CHARTERER WITH ANY CONTROL OVER THE PHYSICAL OPERATION OR NAVIGATION OF THE APPLICABLE VESSEL. + +3. POLLUTION PREVENTION. Owner will, in the case of an escape or discharge of products or threat of escape or discharge of same from the applicable vessel into the navigable waters of the United States, promptly undertake such measures as are reasonably necessary or which may be required by applicable laws, rules and regulations to mitigate the resultant pollution damage; provided, however, that Charterer may at its option, and upon notice to Owner and on the conditions hereinafter set forth, undertake such measures. Charterer shall keep Owner advised of any such measures to be undertaken by it under such circumstances. Any of such measures actually undertaken by Charterer shall be at Owner's expense (except to the extent that such escape or discharge was caused or contributed to by Charterer). If Owner believes that any such measures undertaken by Charterer should not be undertaken or should be discontinued, Owner may so notify Charterer and thereafter Charterer, if it elects to continue such measures, shall do so at its own risk and expense. + +4. INDEMNITY. Owner covenants and agrees to fully defend, protect, indemnify and hold harmless Charterer and its affiliates from and against each and every claim, demand, cause of action, liability, damage, cost or expense (including, but not limited to, reasonable attorney's fees and expenses incurred in the defense of Charterer), resulting from any damage to property or injury or death to persons caused, directly or indirectly, by Owner's acts or omissions in connection with Owner's provision of marine transportation services hereunder, except to the extent caused, directly or indirectly, by the acts or omissions of Charterer. + +Charterer covenants and agrees to fully defend, protect, indemnify and hold harmless Owner and its affiliates from and against each and every claim, demand, cause of action, liability, damage, cost or expense (including, but not limited to, reasonable attorney's fees and expenses incurred in the defense of Owner), resulting from any damage to property or injury or death to persons caused, directly or indirectly, by Charterer's acts or omissions in connection with Charterer's use of marine transportation services hereunder, except to the extent caused, directly or indirectly, by the acts or omissions of Owner. + +The foregoing indemnities shall expressly exclude any liability for consequential, punitive, special or similar damages, including, without limitation, lost profits. + +5. COMPLIANCE WITH LAW; INSURANCE: During the Term of this Agreement, Owner shall comply in all material respects with applicable laws, including, without limitation applicable environmental, health, safety and financial responsibility laws, rules and regulations, applicable to the use of the Vessel for bulk crude oil or finished lubricating products transportation. Owner covenants that it will maintain at all times during the Term of this Agreement insurance coverage for sudden and accidental pollution of $500,000,000. + +4 + + + + + + + +6. CHARTERER'S REPRESENTATIVES: Charterer's representatives may board any vessel used under this Agreement at any convenient place to observe cargo-handling operations, to inspect logs and certificates, and to confirm that Owner is fulfilling its obligations under this Agreement. + +7. DRUG & ALCOHOL ABUSE POLICY: Owner warrants that it will maintain and enforce at all times during the Term of this Agreement a drug and alcohol abuse policy applicable to the vessels which complies in all material respects with the minimum standards promulgated by the U.S. Coast Guard. + +8. CONDITION OF EQUIPMENT: Owner shall, before and at commencement of each voyage by any vessel under this Agreement, exercise commercially reasonable efforts to ensure that such vessel is seaworthy and in good operating condition, properly manned, equipped and supplied for the voyage, to ensure that the pipes, pumps and coils tight, staunch, are in good operating condition and fit for the voyage, and to ensure that the tanks and other spaces in which product is to be carried are in good operating condition and fit for the carriage and preservation of the same. To the extent required by applicable law, Owner will maintain at all times during the Term of this Agreement a valid and subsisting certificate or other permit issued by the U.S. Coast Guard (or other governmental bureau or department having jurisdiction) approving the applicable vessel for the transportation and carriage of inflammable liquids. + +9. SUBLET: Charterer shall not be permitted to sublet the use of any vessels to any third party. + +10. FORCE MAJEURE: The vessels, their captains and Owner shall not, unless otherwise in this Agreement expressly provided, be responsible for any loss or damage arising or resulting from: any act, default or barratry of the captain, pilots, mariners, or other servants of Owner in the navigation or management of such vessel; fire, unless caused by the personal design or neglect of Owner; collision, stranding or peril, danger or accident of navigable waters; saving or attempting to save life or property; wastage in weight or bulk, or any other loss or damage arising from inherent defect, quality or vice of the cargo; any act or omission of Charterer, Owner, any other shipper or any consignee of the cargo, their agents or representatives; insufficiency or inadequacy of marks; explosion, bursting of boilers, breakage of shafts, or any latent defect in hull, equipment or machinery; unseaworthiness of any vessel unless caused by want or due diligence on the part of Owner to make such vessel seaworthy or to have it properly manned, equipped and supplied; or from any other cause of whatsoever kind arising without the actual fault of Owner. And neither the vessels, their captains or Owner, nor the Charterer, shall, unless otherwise in this Agreement expressly provided, be responsible for any loss or damage or delay or failure in performing hereunder arising or resulting from; act of God, act of war; act of public enemies, pirates or assailing thieves; acts of terrorism; arrest or restraint of princes, rulers of people, or seizure under legal process provided bond is promptly furnished to release such vessel or cargo; strike or lockout or stoppage or restraint of labor from whatever cause, either partial or general, or riot or civil commotion. + +5 \ No newline at end of file diff --git a/full_contract_txt/MEDALISTDIVERSIFIEDREIT,INC_05_18_2020-EX-10.1-CONSULTING AGREEMENT.txt b/full_contract_txt/MEDALISTDIVERSIFIEDREIT,INC_05_18_2020-EX-10.1-CONSULTING AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..38834e20334e7b698f5c800225f597498f096b49 --- /dev/null +++ b/full_contract_txt/MEDALISTDIVERSIFIEDREIT,INC_05_18_2020-EX-10.1-CONSULTING AGREEMENT.txt @@ -0,0 +1,59 @@ +Exhibit 10.1 CONSULTING AGREEMENT This CONSULTING AGREEMENT ("Agreement") effective as of this 1st day of March 2020 is hereby entered into between Gunston Consulting, LLC ("CONSULTANT"), a Virginia limited liability company, and Medalist Diversified REIT, Inc. ("REIT" or the "Company"), a Maryland corporation, collectively the "Parties." NOW THEREFORE, in consideration of the mutual promises and other good and valuable consideration, the Parties hereby agree as follows: 1. Consulting Services. REIT hereby retains CONSULTANT and CONSULTANT hereby accepts appointment to serve as an independent contractor to the Company. During the term of this Agreement, CONSULTANT shall consult with REIT and provide the services outlined in the attached Statement of Work in a timely and professional manner in accordance with industry standards. CONSULTANT further agrees that it will not assign the responsibilities set forth in the attached Statement of Work to any other CONSULTANT, subcontactor or other individual without the express written agreement of the Company's Chief Executive Officer. 2. No Control by the Company. The Parties agree that CONSULTANT shall use its own judgment as to the time, place, details, and means by which CONSULTANT will accomplish the results of CONSULTANT's services under this Agreement, that CONSULTANT is not required to work set hours of the day or week established by the Company or perform specific services in a sequence determined by the Company, and that nothing contained herein shall be construed to create the relationship of employer and employee between the Company or CONSULTANT; provided, however, that CONSULTANT is expected to provide the services contemplated by this Agreement in a timely and competent manner in order to meet the needs and expectations of the Company. 3. Independent Contractor. The Parties expressly intend and agree that CONSULTANT is acting as an independent contractor and not as an employee of REIT. Under no circumstances shall CONSULTANT look to REIT as its employer, or as a partner, agent, or principal. CONSULTANT has no right or authority to act as an agent of REIT or for or on behalf of the Company in any capacity whatsoever or to assume or create any obligation of any kind - express or implied - on behalf of REIT. 4. Compensation and Reimbursement. CONSULTANT shall be compensated and reimbursed for the services as set forth in the attached Statement of Work. Completeness of work product shall be determined by REIT in its sole discretion, and CONSULTANT agrees to make all revisions, additions, deletions or alterations as requested by the Company. No other fees and/or expenses will be paid to CONSULTANT, unless such fees and/or expenses have been approved in advance by the appropriate Company executive. CONSULTANT shall be solely responsible for any and all taxes, Social Security contributions or payments, disability insurance, unemployment taxes, and other payroll-type taxes applicable to such compensation. + +1 + + + + + +5. Confidentiality. 5.1 Acknowledgment of Proprietary Interest. REIT now owns and will hereafter develop, compile, and own certain Proprietary Information, including proprietary techniques, trade secrets, and confidential information, which have great value in its business. As used herein, the term "Proprietary Information" includes any and all of REIT's confidential or proprietary information, including without limitation, the existence of, and the terms of, this Agreement, any and all confidential information of REIT encompassed in any and all reports, designs, devices, diagrams, software codes, test results, processes, research products and product development, technical memoranda and correspondence, work in progress, plans, proposals, marketing and sales information and data, financial projections, cost summaries, pricing formula, and all concepts or ideas, materials or information related to the business, products, or properties of REIT or REIT's tenants, suppliers, employees or contractors, which has not previously been released to the public at large by duly authorized representatives of REIT, whether or not such information would be enforceable as a trade secret or the copying of which would be enjoined or restrained by a court as constituting unfair competition, and any Work Product, as defined in Section 6 of this Agreement, developed or created by the CONSULTANT. CONSULTANT acknowledges and agrees that any and all Proprietary Information of REIT is the property of REIT. 5.2 Covenant Not to Divulge Proprietary Information. CONSULTANT acknowledges and agrees that REIT is entitled to prevent the disclosure of Proprietary Information of REIT. CONSULTANT agrees that at all times during or subsequent to the performance of the consulting services under this Agreement, CONSULTANT will keep confidential and will not divulge, communicate, or use Proprietary Information, except for CONSULTANT's own use during the Term of this Agreement to the extent necessary to perform the consulting services. CONSULTANT further agrees not to cause the transmission, removal or transport of tangible embodiments of, or electronic files containing, Proprietary Information from REIT's principal place of business, without prior approval of the Company. CONSULTANT shall disseminate Proprietary Information only to those employees of CONSULTANT with a special need to know such Proprietary Information. CONSULTANT warrants that such employees shall be informed of the proprietary nature of the Proprietary Information and shall be bound by this Agreement in the same manner that CONSULTANT is bound. 5.3 No Licenses. No rights or licenses in or to the Proprietary Information of REIT are granted to CONSULTANT by virtue of this Agreement. 6. Intellectual Property, Inventions and Patents. CONSULTANT acknowledges that CONSULTANT's rights in all discoveries, concepts, ideas, inventions, innovations, improvements, developments, methods, designs, analyses, drawings, reports, patent applications, copyrightable work and mask work (whether or not including any Proprietary Information) and all registrations or applications related thereto, all other proprietary information and all similar or related information (whether or not patentable) which relate to the Company's actual or anticipated business, research and development or existing or future products or services and which were or are conceived, developed, contributed to or made or reduced to practice by CONSULTANT (whether alone or jointly with others) while under contract with the Company, whether before or after the date of this Agreement ("Work Product"), belong to the Company. CONSULTANT shall promptly disclose such Work Product to the Chief Executive Officer of the Company and, at the Company's expense, perform all actions reasonably requested by the Chief Executive Officer of the Company (whether during or after the consultancy) to establish and confirm such ownership (including assignments, consents, powers of attorney and other instruments). CONSULTANT acknowledges that all copyrightable Work Product which is capable of being classified as "works made for hire" under the U.S. Copyright Act of 1976, as amended, shall be deemed "works made for hire" and that the Company shall be the author of, and own all rights therein. To the extent that any such copyrightable work is not a "work made for hire," CONSULTANT hereby assigns and agrees to assign to the Company all right, title and interest, including a copyright, in and to such copyrightable work. Furthermore, CONSULTANT agrees to sign any written instrument of transfer for any rights relating to the Work Product which may be required to effect or evidence the assignment of rights in the Work Product to the Company. The foregoing provisions of this Section 6 shall not apply to any invention that CONSULTANT developed entirely on CONSULTANT's own time without using the Company's equipment, supplies, facilities or trade secret information, except for those inventions that (i) relate to the Company's business or actual or demonstrably anticipated research or development, or (ii) result from any work performed by CONSULTANT for the Company. + +2 + + + + + +7. Restrictive Covenants. 7.1 Solicitation of Employees. CONSULTANT agrees that during its consultancy for REIT and for a period of twelve (12) months immediately following the termination of its consultancy with the Company for any reason, whether with or without cause, it will not, for itself or any other person or entity: (a) solicit, induce, recruit or encourage any of the Company's employees, contractors, independent contractors or any person who provides services to the Company to terminate or reduce their employment or other relationship with the Company; (b) hire any individual who is (or was within the six (6) months immediately preceding such hiring, unless such employee was terminated from such employment by Company) an employee, exclusive contractor, or exclusive independent contractor of the Company; or (c) attempt to do any of the foregoing. 7.2 Solicitation of Customers. CONSULTANT agrees that during its consultancy for REIT and for a period of twelve (12) months immediately following the termination of its consultancy with the Company for any reason, whether with or without cause, it will not: (a) solicit, entice or induce any Customer for the purpose of providing, or provide, products or services that are competitive with the products or services provided by the Company, or (b) solicit, entice, or induce any Customer to terminate or reduce its business with (or refrain from increasing its business with) the Company. As used in this Section 7.2, "Customer" means any person or entity to which the Company provided products or services, including any tenants of the Company's properties, (or was invested in real estate owned by the Company), and with which CONSULTANT had contact on behalf of the Company, within the last twelve (12) months of its consultancy with the Company. + +3 + + + + + +7.3 Noncompetition. CONSULTANT agrees that during its consultancy for REIT and for a period of twelve (12) months immediately following the termination of its consultancy with the Company for any reason, whether with or without cause, it will not: (a) have any ownership interest in, or participate in the financing, operation, management or control of, any Competitor; or (b) engage in or perform services for any Competitor, if such services either (1) are the same as or similar to (individually or in the aggregate) the services CONSULTANT performed for the Company during its consultancy with the Company, or (2) are performed with respect to products or services of the Competitor that are competitive with the products or services provided by the Company with which CONSULTANT was involved during its consultancy with the Company or about which it received Proprietary Information during its consultancy with the Company. As used in this section, "Competitor" means: (i) any private or publicly traded real estate investment trust, fund or other investment vehicle or program whose principal place of business is in Virginia or any other state in which the Company owns real estate and whose business strategy is based on investing in, acquiring or developing flex/industrial, retail, multifamily and limited service hotel real estate, whether directly or indirectly through joint ventures, or (ii) any entity whose principal place of business is in Virginia or any other state in which the Company owns real estate and that advises (including any external advisor) such investment vehicles or programs. It is agreed that ownership of no more than 1% of the outstanding voting stock of a publicly traded corporation will not constitute a violation of Section 7.3. 7.4 Non-Disparagement. CONSULTANT acknowledges that any disparaging comments by him against the Company are likely to substantially depreciate the business reputation of the Company. CONSULTANT agrees to act in good faith so as to not harm the business reputation of the Company in any way. CONSULTANT further agrees that it will not directly or indirectly defame, disparage, or publicly criticize the services, business, integrity, veracity or reputation of the Company or its owners, officers, directors, or employees in any forum or through any medium of communication. Nothing in this Agreement will preclude CONSULTANT from supplying truthful information to any governmental authority or in response to any lawful subpoena or other legal process. 8. Termination. This Agreement shall terminate immediately upon the occurrence of any of the following events: (a) upon the death or bankruptcy of CONSULTANT; or (b) upon the close of business on the date the Company gives CONSULTANT written notice of Termination for Cause (as defined below); (c) ninety (90) days following the date the Company gives CONSULTANT written notice of termination for any or no reason; or (d) CONSULTANT may terminate this Agreement by giving ninety (90) days' written notice to REIT. + +4 + + + + + +For purposes of this Agreement, "Termination for Cause" shall mean termination of this Agreement by the Company as the result of: (i) any act of fraud, dishonesty or neglect of services by CONSULTANT in connection with the services to be provided under this Agreement or against any Company customer, vendor or affiliated company; or (ii) the breach or prospective breach of any provision of this Agreement by CONSULTANT. 8.1 Return of Materials at Termination. In the event of any termination of CONSULTANT's appointment, with or without cause, CONSULTANT shall promptly deliver to REIT any and all materials, property, documents, data, and all other information belonging to REIT or pertaining to Proprietary Information, whether prepared by REIT or CONSULTANT, in CONSULTANT's possession or control, and regardless of how stored or maintained, including all originals, copies, and compilations, and all information stored or maintained on computer, PDAs, electronic or other devices, tapes, discs, or any other form of technology. CONSULTANT shall not take any materials, property, documents, or other information, or any reproduction or excerpt thereof, belonging to REIT or pertaining to any Proprietary Information. 8.2 Obligations Surviving Termination. The obligations of Sections 3, 5, 6 and 7 shall survive any termination of this Agreement. 8.3 Change of Control. In the event of a 'Change of Control' of Company, then if CONSULTANT's services are terminated without cause at any time within a twelve (12) month period following such Change of Control, CONSULTANT shall receive a termination fee equal to twelve (12) months compensation hereunder at the then current monthly rate, including any stock compensation. A Change of Control shall be any purchase of equity in the Company by a party that results in the party acquiring (i) voting control of the Company or (ii) the authority to replace or appoint, a majority of the Board, or the CEO or COO or CFO of the Company. 9. General Provisions. 9.1 Entire Agreement. This Agreement constitutes the entire and exclusive agreement between the Parties with respect to the subject matter hereof and supersedes any prior or contemporaneous agreements, representations, and understandings of the Parties regarding their consulting relationship. 9.2 Severability. In the event that a court of competent jurisdiction determines that any portion of this Agreement is in violation of any law or public policy, only the portions of this Agreement that violate such law or public policy shall be stricken. All portions of this Agreement that do not violate any statute or public policy shall continue in full force and effect. Further, any court order striking any portion of this Agreement shall modify the stricken terms as narrowly as possible to give as much effect as possible to the intentions of the parties under this Agreement. 9.3 Representations and Warranties. CONSULTANT represents and warrants to Company that (a) CONSULTANT has full power and authority to enter into this Agreement including all rights necessary to make the foregoing assignments to Company; that in performing under the Agreement; (b) CONSULTANT will not violate the terms of any agreement with any third party; and (c) the Services and any work product thereof are the original work of CONSULTANT, and to CONSULTANT's knowledge (i) do not and (ii) will not (unless noted to Company otherwise by CONSULTANT) infringe upon, violate or misappropriate any patent, copyright, trade secret, trademark, contract, or any other publicity right, privacy right, or proprietary right of any third party. For clarity, while CONSULTANT may create original ideas that are Work Product herein, CONSULTANT cannot, and does not warrant that those ideas can be exploited by Company with out infringing the rights of other parties. + +5 + + + + + +9.4 Successors and Assigns. The rights and obligations of REIT under this Agreement shall inure to the benefit of and shall be binding upon the successors and assigns of REIT. CONSULTANT shall not be entitled to assign any of CONSULTANT's rights or obligations under this Agreement. 9.5 Taxes, Fees and Benefits. Because this Agreement creates an independent contractor relationship, the parties understand that the Company has no obligation to withhold any state or federal income taxes, social security, or other taxes from payments to CONSULTANT, nor shall it make any workers' compensation or unemployment benefit payments, contributions or payroll tax payments on behalf of CONSULTANT. CONSULTANT agrees that it shall not be eligible for or entitled to participate in any PTO, benefit plans, retirement and insurance coverage provided by the Company or its subsidiary and affiliated entities to their respective employees. CONSULTANT also acknowledges and agrees that the Company will issue a Form 1099 for all compensation paid to CONSULTANT, and it is CONSULTANT's obligation to report and pay all federal, state and local income, payroll, self-employment and other taxes due for her on all compensation from the Company as may be required by law. CONSULTANT agrees to indemnify REIT for any claims, losses, costs, fees, liabilities, damages, or injuries suffered by REIT arising out of CONSULTANT's breach of this section. 9.6 Governing Law; Jurisdiction. This Agreement shall be interpreted, construed, governed, and enforced according to the laws of the Commonwealth of Virginia, without giving effect to its conflict of laws principles. The Parties hereby agree and consent that any and all causes of action arising under this Agreement shall only have jurisdiction and venue in the United States District Court for the Eastern District of Virginia and/or the Circuit Court for Chesterfield County. Each of the parties consents to the jurisdiction and venue of either court for the resolution of all causes of action arising under this Agreement upon proper service of process. 9.7 Indemnity. (a) Indemnity by the Company. The Company hereby agrees to indemnify and hold harmless Consultant against any and all losses, claims, damages, liabilities and expenses (including reasonable costs of investigation and legal counsel fees) to the extent not funded by applicable insurance, in addition to any liability the Company may otherwise have, arising out of, related to or based upon (i) any violation of law, rule or regulation by the Company or the Company's agents, employees, representatives or affiliates or (ii) any third party action or claim against the Company in which Consultant is alleged to be additionally liable. In this regard CONSULTANT shall be an additional insured under Company's applicable insurance coverages. Company shall provide CONSULTANT evidence of all such coverage. + +6 + + + + + +(b) Indemnity by Consultant. Consultant hereby agrees to indemnify and hold harmless the Company and each person and affiliate associated with the Company against any and all losses, claims, damages, liabilities and expenses (including reasonable costs of investigation and legal counsel fees) to the extent not funded by applicable insurance, in addition to any liability the Consultant may otherwise have, arising out of, related to or based upon: (i) Any breach by Consultant of any representation, warranty or covenant contained in or made pursuant to this Agreement; or (ii) Any violation of law, rule or regulation by Consultant or Consultant's agents, employees, representatives or affiliates. (c) Actions Relating to Indemnity. If any action or claim shall be brought or asserted against a party entitled to indemnification under this Agreement (the "Indemnified Party") or any person controlling such party and in respect of which indemnity may be sought from the party obligated to indemnify the Indemnified Party pursuant to this Section 9.7 (the "Indemnifying Party"), the Indemnified Party shall promptly notify the Indemnifying Party in writing, and the Indemnifying Party shall assume the defense thereof, including the employment of legal counsel and the payment of all expenses related to the claim against the Indemnified Party or such other controlling party. If the Indemnifying Party fails to assume the defense of such claims, the Indemnified Party or any such controlling party shall have the right to employ a single legal counsel, reasonably acceptable to the Indemnifying Party, in any such action and participate in the defense thereof and to be indemnified for the reasonable legal fees and expenses of the Indemnified Party's own legal counsel. (d) This Section shall survive any termination of this Agreement for a period of three (3) years from the date of termination of this Agreement. Notwithstanding anything herein to the contrary, no Indemnifying Party will be responsible for any indemnification obligation for the gross negligence or willful misconduct of the Indemnified Party. 9.8 Modification. This Agreement may not be amended except by an instrument in writing signed by or on behalf of all the Parties to this Agreement. IN WITNESS WHEREOF, the Parties have executed this Agreement as of the effective date set forth above. Gunston Consulting, LLC REIT: By: /s/ Brent Winn By: /s/ Thomas E. Messier NAME: Brent Winn NAME: Thomas E. Messier Its: Authorized Signatory Title: Chief Executive Officer + +7 + + + + + +STATEMENT OF WORK Nature of Services: CONSULTANT shall have the duties, authorities and responsibilities as are required by CONSULTANT's position commensurate with the duties, authorities and responsibilities of persons in similar capacities in similarly sized companies, and such other duties, authorities and responsibilities as may reasonably be assigned to CONSULTANT as the Chief Executive Officer or the Board of Directors of the REIT (the "Board of Directors" or the "Board") shall designate from time to time that are not inconsistent with CONSULTANT's position and that are consistent with the bylaws of the REIT and/or the limited partnership agreement of the REIT's operating partnership, Medalist Diversified Holdings, L.P., each as may be amended from time to time, including, but not limited to, managing the affairs of the Company. Term: twelve (12) months from the date of the Agreement which term shall automatically renew for an additional twelve (12) months on such date if the Agreement is not otherwise terminated according to Section 8 of the Agreement. Compensation: REIT agrees to pay CONSULTANT the following consulting fees, for services performed by CONSULTANT: 1. $200,000 annual fee payable in 12 equal monthly installments or 24 equal semi-monthly installments, at CONSULTANT's election. 2. Annual stock grants as awarded by the Compensation Committee of the Company's Board of Directors. 3. Except for limited authorized expenditures expressly agreed to and authorized by REIT, such as pre-approved, reasonable travel expenses, CONSULTANT shall be responsible for paying all expenses incurred by him/her in the performance of this Agreement. It is expressly understood that the Company will not wholly or partially reimburse non-authorized expenses. Moreover, invoices for approved expenses must be itemized and substantiated by appropriate receipts prior to payment. + +8 \ No newline at end of file diff --git a/full_contract_txt/MEDIWOUNDLTD_01_15_2014-EX-10.6-SUPPLY AGREEMENT.txt b/full_contract_txt/MEDIWOUNDLTD_01_15_2014-EX-10.6-SUPPLY AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..7af0a51a5e4fa4bd2b4283c53b71ec116d1def42 --- /dev/null +++ b/full_contract_txt/MEDIWOUNDLTD_01_15_2014-EX-10.6-SUPPLY AGREEMENT.txt @@ -0,0 +1,265 @@ +Exhibit 10.6 MediWound Ltd. and Challenge Bioproducts Corporation Ltd. Supply Agreement — As amended on February 28, 2010 + +*** Confidential treatment has been requested for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission. + + + + + + SUPPLY AGREEMENT This Supply Agreement ("Agreement") was made and entered into as of the 11 day of January, 2001 by and between MediWound Ltd., a corporation organized and existing under the laws of Israel (hereinafter referred to as "MediWound") and Challenge Bioproducts Corporation Ltd., a corporation organized and existing under the laws of the Republic of China (hereinafter referred to as "CBC") and amended by the parties on February 28, 2010 ("Amendment Effective Date"). WITNESSETH: THAT Whereas MediWound and CBC have originally entered into this Agreement on the date stated above (copy of which shall be attached hereto as Exhibit A); and Whereas, the parties hereto have agreed to amend and add certain terms and conditions to this Agreement as of the Amendment Effective Date, all as set forth and marked herein; and Whereas, CBC has invented and developed methods, processes and equipment to manufacture, and produce Bromelain SP (as such term is defined below), specially processed for transformation into a Bromelain-based pharmaceutical product derived from pineapple stems, known as Debridase (the "Product"); and Whereas, subject to the going into effect of a License Agreement dated September 27, 2000 between MediWound and Mark Klein (respectively, the "Klein Agreement" and "Klein") as amended on June 19, 2007, MediWound shall have an exclusive license under patents and other intellectual property, to develop, use, manufacture, market and sell the Product for burn treatment in humans; and Whereas, MediWound desires to utilize Bromelain SP in the development and commercialization of the Product and to subsequently purchase Bromelain SP in bulk form to make and have made Product and pharmaceutical preparations thereof; and Whereas, CBC is willing to supply Bromelain SP to MediWound for such purpose on the terms and conditions set forth hereunder. NOW THEREFORE IN CONSIDERATION OF THE MUTUAL PROMISES AND COVENANTS SET FORTH HEREIN IT IS HEREBY AGREED AS FOLLOWS: + +*** Confidential treatment has been requested for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission. 2 + + + + + + 1. Definitions Terms defined in this Section 1 and elsewhere, parenthetically, in this Agreement, shall have the same meaning throughout this Agreement. 1.1 "Affiliate" means any firm, person or company which controls, is controlled by or is under common control with a party to this Agreement and for the purpose of this definition the term "control" means the possession, directly or indirectly of the power to direct or cause the direction of the management and policies of such firm, person or company whether through the ownership of voting securities, by contract or otherwise or the ownership either directly or indirectly of 20% (twenty percent) or more of the voting securities of such firm, person or company. 1.2 "Approval" means the grant of all necessary governmental and regulatory approvals required for the marketing, distribution and sale of a pharmaceutical product in any particular country, by a Regulatory Authority, and approvals required for pricing and reimbursements (if appropriate). 1.3 "Bromelain SP" means material derived from pineapple stems, [having the specification as presented in exhibit 1.13] presently manufactured by CBC at the Facility by a special process and used as a raw material in the production of the Product. 1.4 "Conditions Precedent" means the cumulative conditions listed in Section 2.1. 1.5 "Effective Date" shall have the meaning ascribed to such term in Section 2.2. 1.6 "Facility" means CBC's production facility in Tou-Liu City, Yun-Lin Hsien, Taiwan, R.O.C. 1.7 "FDA" means the Food and Drug Administration of the United States Government or any successor thereto. 1.8 "Klein" means Mr. Mark C. Klein. 1.9 "LR" means either or both of L.R. R & D Ltd. and/or Professor Lior Rosenberg. 1.10 "Major Country" means the USA, and the major European and Asian countries listed in Exhibit 1.10 attached hereto. 1.11 "MOU" means the Memorandum of Understanding of January 18, 2000 between MediWound (as assignee of Clal Biotechnology Industries Ltd.), Klein and CBC. 1.12 "Regulatory Authority" means the FDA or similar governmental or other agency in any country having authority to grant Approval. 1.13 "Specifications" means the specifications for Bromelain SP set forth as Exhibit 1.13 hereto, as the same may be amended with the consent of both parties hereto, it being agreed that no amendment may be made thereto or refused which would + +*** Confidential treatment has been requested for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission. 3 + + + + + + render Product incapable of application on humans or the use, supply or sale thereof in breach of any regulations. 1.14 "Sub-Contractor" means any firm or company whose services are retained by MediWound to transform Bromelain SP into Product and to package, label and deliver pharmaceutical preparations of the Product in finished form to MediWound and its sub- licensees. All references to "MediWound" under Sections 3.1, 5, 6 and 7.1 shall be construed as being inclusive of Sub- Contractors, unless the context dictates otherwise. 1.15 "Technical Information" means that information in use at the Facility during the term of this Agreement, relating to the manufacture of Bromelain SP meeting the Specifications, in bulk, as more comprehensively described in Section 1.15 of the TT Agreement. 1.16 "TT Agreement" means the Technology Transfer Agreement dated January 11, 2001 between the parties hereto, whereby CBC undertakes to transfer the Technical Information to MediWound. 2. Conditions Precedent 2.1 Conditions Precedent to the provisions of this Agreement becoming effective shall be all of the following: 2.1.1 Execution of a License Agreement between MediWound and LR whereby MediWound shall license certain Product-related know-how from LR; and 2.1.2 Execution of the TT Agreement. 2.2 The date upon which MediWound shall have acknowledged in writing to CBC that the Conditions Precedent have all been met shall be the "Effective Date". Where the Conditions Precedent have not been met by January 31, 2001, for any reason whatsoever, then this Agreement and the MOU shall be deemed terminated as of that date with no further liability of either party, except for the obligation of confidentiality, as set forth in the MOU. 3. Grant of Rights 3.1 As from and subject to the Effective Date, and subject to the terms and conditions of this Agreement, CBC shall supply Bromelain SP to MediWound and MediWound shall acquire Bromelain SP from CBC, for transformation into the Product. 3.2 MediWound's rights as per Section 3.1 will be exclusive in the sense that CBC shall not nor shall permit any Affiliate or third party to manufacture, use, supply + +*** Confidential treatment has been requested for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission. 4 + + + + + + or sell Bromelain SP for utilization as an ingredient of any product which directly or indirectly competes with the Product. 4. Financial Provisions 4.1 In consideration for CBC's undertaking to supply Bromelain SP to MediWound and other obligations of CBC pursuant to this Agreement, MediWound has paid to CBC US$ [***] (US Dollars [***]) within 3 (three) business days of the Effective Date. 4.2 Payments for supply of Bromelain SP by CBC to MediWound as of the Amendment Effective Date shall be made in accordance with the following provisions: 4.2.1 The price of [***] Kg of an accepted batch of Bromelain SP (by MediWound pursuant to Section 6.4) shall be in accordance with the price per annual quantity table in Exhibit 4.2 attached hereto. The price used for invoicing during the year shall be based on the quantity in the Annual Forecast. At the end of each year the parties shall recalculate the amounts to be paid pursuant to the actual quantities purchased throughout the passing year and adjust the payments accordingly (for example: if the actual quantity purchased during the past year was higher than the Annual Forecast and such higher quantity should have been invoiced as per a lower price per Kg of Bromelain SP in accordance with price per annual quantity table in Exhibit 4.2, CBC shall recalculate the invoices for the past year as per the actual price that should have been invoiced and credit MediWound for the balance within [***] days accordingly. If the actual quantity purchased during the past year was lower than the Annual Forecast and such lower quantity should have been invoiced as per a higher price per Kg of Bromelain SP in accordance with price per annual quantity table in Exhibit 4.2, CBC shall recalculate the invoices for the past year as per the actual price that should have been invoiced and invoice MediWound for the balance within [***] days accordingly). 4.2.2 CBC may increase the prices only pursuant to an increase in its cost of manufacturing of the Bromelain SP. Any such increase shall be subject to MediWound's pre-approval, and no increase shall be executed more often than once every [***] months and any changes thereto shall be in-line with current market prices for Bromelain manufacturing except that (i) there is a change of cost of manufacturing of Bromelain SP due to a change requested by regulatory agency and confirmed by MediWound; and (ii) the Taiwan official Wholesale Price Index varies over [***]% within [***] months. When such exceptional situations arise, an increase + +*** Confidential treatment has been requested for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission. 5 + + + + + + of price shall be considered by MediWound at CBC's written request without the limit of no more often than once every [***] months. 4.2.3 MediWound shall make payment for each Bromelain SP batch that was supplied by CBC on a [***] days basis as of the date of delivery of the applicable batch at MediWound, provided that MediWound has provided CBC with an Acceptance Batch Notice for such purchased batch pursuant to Section 6.4. Payment for each purchase batch shall be effected by MediWound by swift to a bank account designated by CBC, or by other requested method as agreed between the parties. MediWound shall make down payment of USD[***]/kg for the [***]% of the amount of Annual Forecast before Dec.31 of the respective year for the insurance of components and materials and maintenance of manufacture and supply capacity of the requested [***]% of the next calendar year's Annual Forecast. The down payment will be then deducted respectively as every shipment is made to MediWound and listed in CBC's Invoice to MediWound. 4.2.4 Payment shall be made directly to CBC for payment for each order of Bromelain SP or, at CBC's written request, to Golden Life International Co., Ltd. on CBC's behalf, for payments other than any order of Bromelain SP ("Payee"); provided however, that any such payment to the Payee shall be considered as valid payment to CBC (as if made directly to CBC) in accordance with this Agreement, and that so long as such payment is made in accordance with CBC's said request, CBC shall have no claims or demands against MediWound for non-payment or in any other respect whatsoever in this regard. CBC solely shall be responsible to ensure that payment by MediWound to the Payee pursuant to CBC's request does not violate any applicable laws and regulations. Any tax implications due to payment to the Payee in accordance with CBC's request shall be borne by CBC. For avoidance of doubt, it is clarified that the Payee shall not be considered as a third party beneficiary under this Agreement and shall not have any rights to enforce payment or any other rights of CBC under this Agreement. 4.2.5 Invoices shall only be issued upon delivery of the Bromelain SP batch which shall take place only after CBC's quality control department has completed its testing and authorized delivery to MediWound, and MediWound's quality control department has provided CBC with an Acceptance Sample Notice for that batch and that the batch itself can be delivered. + +*** Confidential treatment has been requested for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission. 6 + + + + + + 4.2.6 The consideration to be paid pursuant to this Agreement is final and inclusive of all taxes and/or duties, of whatsoever nature. If applicable laws require the withholding of taxes, MediWound will deduct the taxes from the related payment otherwise due to CBC, and such taxes shall be paid to the proper taxing authority. For avoidance of doubt, payments will be made only after receiving exemption from tax deduction approval from the tax authority in Israel. Delay in payment as a result of not receiving such exemption will not constitute late payment or breach hereunder. 5. Manufacture of Bromelain SP 5.1 Without derogating from CBC's representations and warranties herein, CBC and MediWound shall work together in order to enable the CBC facility to accomplish all required standards, related to the manufacturing, packaging and delivering of Bromelain SP in accordance with the Specifications, GACP (Good Agricultural and Collection Practice) and cGMP (Current Good Manufacturing Practice) standards, ISO 22000 and all other applicable laws and regulations. For such purpose, and without derogating from other terms herein, CBC shall permit MediWound, and/or a consultant on MediWound's behalf, to access and inspect the CBC facility and advise MediWound and/or CBC on such actions to be taken for accomplishing such compliance. Such mutual regulatory preparations shall begin no later than the finalization of MediWound's current phase III clinical trial. CBC warrants and represents that all Bromelain SP shall be manufactured and supplied in compliance with the Specifications, quality control methods and test methods, all applicable SOP's and all applicable laws, and in accordance with GACP, cGMP, including the relevant guidelines, policies, codes, requirements, regulations, approvals and/or standards from time to time promulgated or issued by any relevant governmental and/or regulatory authority which relate to the manufacture of the Bromelain SP to be used for the production of a pharmaceutical agent as the Product. CBC warrants further that CBC has, and will for the duration of this Agreement retain, all applicable regulatory approvals required for the carrying out of its obligations hereunder, including without limitation the manufacturing, packaging and supply of the Bromelain SP. 5.2 All manufacturing, packaging and labeling activities done at CBC will be performed according to the pre-approved batch records. If CBC wishes to make changes to the Specifications, the production and/or packaging batch records, the SOPs related to the Bromelain SP, or the design of the manufacturing process or any other change during production which would effect the quality of the + +*** Confidential treatment has been requested for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission. 7 + + + + + + Bromelain SP or of the Product and/or otherwise would effect the Bromelain SP in any way or which might effect the regulatory approvals of the Product, then CBC shall (i) notify MediWound in writing at least 6 months in advance regarding such proposed changes, and (ii) represent that such change will not adversely effect the quality of the Bromelain SP or of the Product in any way, and (iii) not make such changes without MediWound's prior written approval, and (iv) will assure that such change will not delay or in any way effect any open orders for Bromelain SP. 5.3 MediWound shall participate and support the upgrade of the Facility and the generation of documentation for submission to the relevant Regulatory Authorities, all as may be determined to be necessary and appropriate, by independent regulatory consultants, designated by mutual consent. Such participation and support shall be in the form of an investment made by MediWound in the CBC facility, not to exceed $[***] (US Dollars [***]). 5.4 CBC undertakes to keep all records reasonably required by MediWound relating to the manufacture, quality control and testing of Bromelain SP. Such records shall include, but not be limited to, all records required by applicable laws and regulations, of the territories in which the Product is marketed and sold. MediWound (itself or through anyone on its behalf) or any relevant regulatory authority shall have the right to audit any such records and/or the relevant facilities of CBC (or any facilities of any CBC third party or subcontractor involved in the manufacture, quality control and/or supply of the Bromelain SP) with reasonable prior notice, during regular business hours, including the right to ask CBC to provide any relevant documents. CBC shall inform MediWound of any announced regulatory inspections that directly involve the Bromelain SP or the Product within 48 hours of the notification to CBC of such an inspection. 5.5 During the term of this Agreement, CBC shall make available to MediWound any and all information and data which it generates or which comes into its possession relating to any improvements in the manufacture and supply of the Bromelain SP. CBC shall, throughout the term of this Agreement, assist MediWound in all respects with regard to regulatory submission including but not limited to providing any information, data or documents in its possession. If any regulatory agency requests any changes to the Specifications or the manufacturing process, (including but not limited to any changes as a result of an audit performed) CBC shall (i) inform MediWound in advance and in writing of the changes needed to be made, and (ii) promptly advise MediWound as to any lead-time changes or other terms which may result therefrom, and (iii) make such changes, in coordination with MediWound as soon as possible. + +*** Confidential treatment has been requested for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission. 8 + + + + + + 5.6 Sampling and Testing Procedures 5.6.1 The sampling procedures of incoming raw materials, packaging materials, in process control and released Bromelain SP shall be agreed between CBC and MediWound and conducted by CBC as per CBC's signed SOP as approved by MediWound. 5.6.2 MediWound and CBC will jointly agree and update from time to time as applicable the incoming raw materials, in-process and release testing methods applicable to the Bromelain SP. 5.6.3 CBC will test each batch of Bromelain SP for conformance with the batch Specifications, and for each batch of the Bromelain SP supplied by CBC, CBC will provide a certificate of analysis signed and dated by the responsible person at CBC, who has released the batch. 5.6.4 For each batch provided, CBC shall provide to MediWound a copy of the batch production and packaging execution records and shall retain such original records for one (1) year beyond the shelf-life of the Bromelain SP unless required by MediWound or under applicable laws and regulations to maintain the records for a longer period of time. 5.7 Quality Assurance — Investigations 5.7.1 Any deviation from the production process during the manufacture thereof shall be explained and documented in batch records. Any deviation that may impact on the safety/quality of the Bromelain SP or the Products and on other related issues will be investigated by CBC, and communicated to MediWound within 48 hours from the time of discovery. Following the investigation, the relevant corrective actions shall be taken and implemented. 5.7.2 CBC shall perform an out-of-specifications investigation in respect of batches that do not meet the batch Specifications. 5.7.3 Each investigation shall be reviewed by a CBC designated quality representative, and will follow the procedures recommended by regulatory agencies and as set out in relevant CBC SOP's. All completed investigation reports and other written documentation relating to all investigations shall be provided to MediWound and shall be included in the applicable released and executed batch records. Any corrective actions shall be discussed and agreed by the parties before being executed by CBC. + +*** Confidential treatment has been requested for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission. 9 + + + + + + 5.8 Quality Complaints; Recall 5.8.1 MediWound and CBC shall notify each other immediately by an e-mail, of any information concerning the quality and/or malfunction of the Bromelain SP. The parties will investigate all complaints, and shall respond in accordance with mutually agreed SOP's. Both parties shall comply with requirements of all regulatory authorities in dealing with complaints. MediWound shall have the right to determine whether any adverse event should be reported to any applicable regulatory authority. All quality assurance and/or quality complaints shall be handled in accordance with this section above. 5.8.2 In the event that CBC has any reason to believe that the Bromelain SP or one or more Products should be recalled or withdrawn from distribution, CBC shall immediately notify MediWound in writing. In such event MediWound shall, at MediWound's sole discretion, determine whether to recall or withdraw the Product from the market. 5.8.3 If a recall of the Product is due to CBC or the Bromelain SP, then the recall shall be conducted by MediWound at CBC's expense, and CBC shall replace such Bromelain SP at no charge to MediWound or shall provide MediWound with a credit or refund of same, at MediWound's election. 5.9 Storage CBC shall store, in accordance with the applicable CBC SOP, free of charge, Bromelain SP batches at its premises in appropriate storage conditions, for up to ninety (90) days from the day of the Acceptance Sample Notice for the respective batch or longer if CBC was unable to deliver such batch to MediWound earlier following the Acceptance Sample Notice. The Bromelain SP shelf life and designated packaging shall be in accordance with CBC SOP and subject to the supportive results of a proper stability study. 5.10 Retention of Samples CBC shall retain samples of Bromelain SP stored at their original package from each batch for the duration of the Products' shelf- life and for a period of one (1) additional year thereafter, in quantities sufficient to enable the performance of two (2) CBC's full release tests in accordance with the CBC's release specifications and release methods. 6. Supply of Bromelain SP 6.1 MediWound undertakes to purchase, and CBC undertakes to furnish, supply and deliver Bromelain SP to MediWound, in bulk, on the terms and conditions hereinafter set forth. + +*** Confidential treatment has been requested for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission. 10 + + 6.2 MediWound shall furnish CBC with a non-binding forecast of its anticipated annual requirements of Bromeline SP by no later than November 1 of each year ("Annual Forecast"), for the next calendar year. Notwithstanding the foregoing, the first forecast for the calendar year that commenced on January 1, 2001, was furnished by MediWound to CBC by March 15, 2001. MediWound undertakes to order at least [***]% of the Annual Forecast per each year. CBC shall maintain, at all times, manufacture and supply capacity of at least [***]% of the Annual Forecast and shall maintain, in coordination with MediWound, inventory of Bromelain SP at its premises of (i) at least [***]% of the applicable Annual Forecast; and (ii) all Bromelain SP components and materials ("the BSP Components and Materials") needed for the manufacture and supply of the Bromelain SP such that CBC can guarantee continuous supply of the Bromelain SP in accordance with MediWound's complete Annual Forecasts. In addition, the inventory of the BSP Components and Materials shall not be less than needed to manufacture [***] months stock of Bromelain SP (compared to the open purchase orders and the applicable Annual Forecast) or longer (respectively) for BSP Components and Materials having a lead time of more than [***] months. CBC shall provide MediWound with quarterly inventory and production reports for Bromelain SP and BSP Components and Materials. Purchase orders issued by MediWound to CBC for quantities within the [***]% of the Annual Forecast shall be binding upon CBC and shall be deemed accepted upon delivery of the purchase order to CBC. Such purchase orders shall be supplied on the date specified in the applicable purchase order provided that the lead time in any purchase order shall be at least [***] days as of the purchase order's date. Purchase orders issued by MediWound to CBC during a certain year for quantities exceeding [***]% of the applicable Annual Forecast shall be binding upon CBC, except that with respect to any amounts exceeding [***]% of the applicable Annual Forecast, CBC's obligation to provide such exceeding quantities shall be based on best efforts and CBC shall have an extended lead time for delivery as shall be agreed upon by the parties on a case by case basis. CBC shall confirm in writing, within 5 days of its acceptance of such exceeding purchase order, and shall state the anticipated delivery date for the exceeding amounts. Without derogating from CBC's obligations under this Agreement, in the event that CBC is unable to supply all the Bromelain SP covered under any purchase order on the dates specified in the applicable supply plans, CBC shall promptly notify MediWound in writing in a separate notice to MediWound of such delay or noncompliance. In such event, and without prejudice to any other + + + + + +remedies + +*** Confidential treatment has been requested for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission. 11 + + + + + + available to MediWound, CBC shall use its best efforts to fully comply with the purchase order as soon as possible. 6.3 CBC shall be responsible to prepare the shipment of Bromelain SP in accordance with a shipment SOP. Such shipment SOP shall comply with the regulatory requirements as well as specify the documents that should accompany any shipment (i.e. pro forma invoice, value for customs, specific declaration, and specific requirement for investigational products). CBC shall provide MediWound with copies of documents and reports with respect to each shipment of Bromelain SP, for quality assurance, quality control and regulatory purposes. 6.4 Prior to delivery of each batch of Bromelain SP, CBC shall submit a batch sample to MediWound for inspection and approval. MediWound shall have the right, for a period of [***] days following receipt, to reject any Bromelain SP sample which: 6.4.1 fails to comply with MediWound's purchase order; or 6.4.2 fails to comply with the sample incoming inspection Specifications. Within the said [***] days, MediWound shall notify CBC of either: (i) its approval and acceptance of such batch sample ("Acceptance Sample Notice"); or (ii) its rejection of the batch sample in which case MediWound shall detail the reason(s) for the rejection of any such Bromelain SP sample. In the event of rejection by MediWound, CBC shall deliver complying Bromelain SP sample to MediWound within [***] days of rejection, free of cost (including transportation, duty, handling and insurance costs). For clarification purposes, MediWound's Acceptance Sample Notice in accordance with this section above shall in no event derogate from CBC's responsibilities hereunder. After CBC receives MediWound's Acceptance Sample Notice, CBC shall deliver the corresponding batch to MediWound for inspection and approval. MediWound shall have the right, for a period of [***] days following receipt, to reject any Bromelain SP batch which: 6.4.3 fails to comply with MediWound's purchase order; or 6.4.4 fails to comply with the batch incoming inspection Specifications. Within the said [***] days, MediWound shall notify CBC of either: (i) its approval and acceptance of such batch ("Acceptance Batch Notice"); or (ii) its rejection of the batch in which case MediWound shall detail the reason(s) for the rejection of any such Bromelain SP batch. In the event of rejection by MediWound, at CBC's request and expense, MediWound shall return any such Bromelain SP batch to CBC and CBC shall deliver complying Bromelain SP + +*** Confidential treatment has been requested for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission. 12 + + + + + + batch to MediWound within [***] days of rejection, free of cost (including transportation, duty, handling and insurance costs). For clarification purposes, MediWound's Acceptance Batch Notice in accordance with this section above shall in no event derogate from CBC's responsibilities hereunder. 6.5 If there is a dispute between the parties as to whether any Bromelain SP sample or batch complies with the sample or batch Specifications respectively and/or with the quality requirements set forth herein and/or under the law, then, without derogating from MediWound's remedies under this Agreement or at law, such dispute shall be resolved by mutual investigation of the parties which shall be conducted in good faith. If the parties are still unable to resolve such dispute, an independent, mutually agreed third party shall be retained as a consultant to review batch records and related documentation. Such consultant's determination in respect of the conformity of a sample or batch shall be binding upon the parties. The non-prevailing party shall bear the costs of consultant's services as well as for the production of the batch and corrective actions. If appropriate, pursuant to such investigation and/or consultant's determination, CBC shall replace the non-complying Bromelain SP within 30 (thirty) days thereafter, free of cost (including transportation, duty, handling and insurance costs). 6.6 CBC, at its own cost, shall obtain and shall cause to remain in effect, such licenses, permits, approval and consents as may be required for its performance hereunder, including, without limitation, export of Bromelain SP from the Republic of China. 7. Liability and Indemnity 7.1 CBC shall defend and assume responsibility for any suit, claim or other action by a third party alleging that MediWound's use of Bromelain SP infringes any patents or other rights of such third party. 7.2 MediWound shall be solely responsible for the commercialization of the Product, e.g. the completion of development, final formulation, the conduct of clinical trials (as necessary), labeling and packaging, as well as the due preparation and submission of all documentation required for the prosecution of registration and Approval of the Product in each of the countries in the Territory. MediWound shall assume all liabilities arising from the development, commercialization, use, offer for sale, sale or supply by, through or on behalf of MediWound or its Affiliates, of the Product (and related materials). 7A. Insurance In order to provide insurance coverage for CBC responsibilities, obligations and undertakings as set out under this Agreement and/or as required under any law with + +*** Confidential treatment has been requested for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission. 13 + + + + + + respect to the manufacturing of Bromelain SP, CBC undertakes, at its sole cost and expense, to take out and maintain an "All risk" insurance against loss of and destruction or damage to the Facility (including fire, theft and vandalism, etc.), third party liability insurance, product liability insurance for the Bromelain SP and employers liability insurance. Without prejudice to the above, CBC shall maintain, or shall cause to be maintained with respect to itself and each of its Affiliates, such types and levels of insurance (including, without limitation, third party and product liability insurance), as are customary in the pharmaceutical or manufacturing industry to provide coverage for their activities contemplated hereby. Upon request of MediWound, CBC shall keep MediWound informed of the general parameters of its liability insurance program and any proposed substantive changes therein. Upon request, CBC shall furnish MediWound certification of insurance (and/or true copies of policies) showing the above coverage, signed by an authorized agent of the insurance company, certifying that liability assumed under this Agreement is fully insured without exception, and providing for at least thirty (30) days prior written notice. 7B. Limitation of Consequential Damages EXCEPT FOR BREACH OF CONFIDENTIALITY OBLIGATION HEREUNDER, AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR SPECIAL, PUNITIVE, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES, INCLUDING WITHOUT LIMITATION LOSS OF USE, DATA OR LOST PROFITS, EVEN IF IT HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, WHETHER UNDER THIS AGREEMENT, IN TORT OR OTHERWISE. 8. Confidentiality 8.1 CBC and MediWound undertake to each other to keep, and shall procure that their respective Affiliates, employees, directors, officers, consultants and contractors (including those of any Affiliate) shall keep, confidential all information received from each other during or in anticipation of this Agreement however obtained and in whatever form (the "Confidential Information"). For clarification purposes, any information, materials and know-how related to the Product and/or provided by MediWound in connection with this Agreement including any related intellectual property rights, shall be owned solely by MediWound and shall constitute MediWound's Confidential Information which may be used by CBC solely for the purpose of manufacturing and supply of Bromelain SP to MediWound. Confidential Information shall not include the following: + +*** Confidential treatment has been requested for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission. 14 + + + + + + 8.1.1 information which at the time of disclosure by one party to the other is in the public domain; 8.1.2 information which after disclosure by one party to the other becomes part of the public domain by publication except by breach of this Agreement; 8.1.3 information which the receiving party can establish by competent proof was already in its possession at the time of its receipt and was not acquired directly or indirectly from the other party; and 8.1.4 information received from third parties who were lawfully entitled to disclose such information. 8.2 Any Confidential Information received from the other party shall not be disclosed or used for any purpose other than as provided or anticipated under this Agreement. 8.3 The confidentiality and non-use obligations contained in this Agreement shall continue for the duration of this Agreement and for a period of 5 (five) years after termination or expiry of this Agreement, provided however that any Confidential Information with respect to the Product, including without limiting, such information with respect to intellectual property rights in connection with and/or related to the Products shall remain confidential in perpetuity. 8.4 The provisions of this Section 8 shall in no event prevent MediWound from disclosing any Technical Information to Regulatory Authorities or other governmental agencies in support of any application for regulatory approvals of the Product or any amendments thereof or in general whenever required to disclose such information under any applicable law or regulation. MediWound shall make reasonable efforts to notify CBC of its intention and the identity of the intended recipient as soon as reasonably practicable and if possible, prior to the date of disclosure. 9. Duration This Agreement shall come into force on the Effective Date and the amendments herein shall be in effect as of the Amendment Effective Date. This Agreement as amended shall continue in force until terminated in accordance with the provisions of Section 10. 10. Termination 10.1 MediWound may terminate this Agreement at any time, by 6 (six) months prior notice in writing. + +*** Confidential treatment has been requested for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission. 15 + + + + + + 10.2 CBC may terminate this Agreement by no less than 24 (twenty four) months notice given in writing by CBC to MediWound, or such greater period as may be reasonable for MediWound to establish an alternative source of manufacture of Bromelain SP and/or to acquire sufficient inventory of Bromelain SP for a 24 (twenty four) months period. 10.3 In the event of any breach of this Agreement at any time, if the breach complained of shall not be corrected by the breaching party within 90 (ninety) days of the other party's notice, either party hereto may, at its option: 10.3.1 by giving 90 (ninety) days written notice, specifying the breach complained of, terminate this Agreement, and the party asserted to be in breach shall have the right to treat the alleged breach as a dispute under Section 15; or 10.3.2 regard the breach and any failure to cure as the basis for a dispute and proceed to dispute resolution under Section 15 and such legal or equitable remedy as shall be applicable. 11. Effects of Termination 11.1 Upon termination of this Agreement, the parties shall abide by and uphold any and all rights or obligations accrued or existing as of the termination date, including, without limitation with respect to outstanding orders for Bromelain SP placed hereunder. 11.2 Any rights or remedies of either party arising from any breach of this Agreement shall continue to be enforceable after termination of this Agreement, unless previously waived in writing. 12. Assignment 12.1 Subject to Section 12.2, neither party shall assign its rights or obligations hereunder, in whole or in part, except with the prior written consent of the other party, except to a party acquiring all of the business of the assigning party to which this Agreement relates. Prior to any such permitted assignment the party wishing to effect the transaction shall procure that the third party concerned covenants directly with the other party to this Agreement to comply with the provisions of this Agreement, which shall be binding on it as the successor and assign of such party. 12.2 MediWound may assign all of its rights and obligations under this Agreement or perform some or all of its obligations under this Agreement through its Affiliates and Sub-Contractors, provided that MediWound shall remain solely responsible for and be guarantor of the performance by its Affiliates and Sub-Contractors and + +*** Confidential treatment has been requested for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission. 16 + + + + + + procure that its Affiliates and Sub-Contractors comply fully with the provision of this Agreement in connection with such performance. 13. Miscellaneous 13.1 Failure or delay by either party in exercising or enforcing any right or remedy under this Agreement in whole or in part shall not be deemed a waiver thereof or prevent the subsequent exercise of that or any other rights or remedy. 13.2 CBC and its employees and MediWound and its employees shall at all times be considered as independent contractors of each other, and at no time or under any circumstances shall they be considered employees, representatives, partners or agents of each other. 13.3 This Agreement shall constitute the entire agreement and understanding of the parties relating to the subject matter of this Agreement and supersede all prior oral or written agreements, understandings or arrangements between them relating to such subject, except for the TT Agreement. The MOU shall be deemed so superseded by this Agreement only upon the Effective Date. 13.4 Other than as explicitly amended and marked herein, all applicable terms and conditions of the Agreement as originally executed by the parties shall remain without change and shall continue to be binding and in full force and effect. No change or addition may be made to this Agreement except in writing signed by the duly authorized representatives of both parties. 13.5 The provisions intended by their nature to survive the termination or expiration of this Agreement shall so survive including without limiting Sections 1, 3.2, 5.1, 5.2, 5.4, 5.8, 5.10, 7, 7A, 7B, 8, 11, 13 (as amended), 14 and 15. Without derogating from the foregoing, it is clarified that the restriction with respect to MediWound's intellectual property and CBC's obligations under the TT Agreement as well as MediWound's exclusive rights under this Agreement (as amended) shall continue to apply and survive the termination or expiration of the Agreement. 14. Notices 14.1 Any notice or other document given under this Agreement shall be in writing in the English language and shall be given by hand or sent by prepaid airmail, by facsimile transmission or electronic mail to the address of the receiving party as set out below unless a different address, facsimile number or e-mail address has been notified to the other in writing for this purpose. 14.2 MediWound's address for service of notices and other documents shall be:- + +*** Confidential treatment has been requested for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission. 17 + + + + + + MediWound Ltd. 42 Hayarkon St., 81227 Yavne Israel Tel: +972 8 932 4010 Fax: +972 8 932 4011 E-Mail: [***] 14.3 CBC's address for service of notices and other documents shall be:- Challenge Bioproducts Corporation, Ltd. 17 Tou-Kong 12 Rd., Tou-Liu City, Yun-Lin Hsien, Taiwan, R.O.C., ("CBC") Facsimile: +55-5572-045 E-Mail: [***] 15. Governing Law and Disputes 15.1 This Agreement is made under and subject to the provision of the substantive laws of the State of New York, without giving effect to its conflict of law rules. 15.2 Any disputes relating to this Agreement of whatever nature that cannot be resolved by negotiation between the parties shall be referred for final resolution to arbitration in New York City by 3 (three) Arbitrators under the Rules of the American Arbitration Association. The arbitration proceedings shall be conducted in English. The decision of the arbitrators shall be final and binding upon the parties and their legal successors. The arbitrators may at their discretion, provide for discovery by the parties not to exceed 4 (four) months from the date of notice of arbitration and the arbitrators shall notify the parties of their decision in writing within 30 (thirty) days of the completion of the final hearing. The arbitrators may at their discretion award costs and expenses in respect of the arbitration. 15.3 The parties submit to the exclusive jurisdiction of the courts of the State of New York. + +*** Confidential treatment has been requested for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission. 18 + + IN WITNESS WHEREOF, the parties, each by its duly authorized signatory, have caused this Agreement to be executed as of the date first above- mentioned. + + /s/ Gal Cohen + + + + /s/ Ching-Kuan Lin + + MediWound Ltd. + + + + Challenge Bioproducts Corporation Ltd. + + By: Gal Cohen + + + + By: Ching-Kuan Lin + + Its: Chief Executive Officer + + + + Its: President + + + + MediWound Ltd. + + + + Challenge Bioproducts Co., Ltd. + +*** Confidential treatment has been requested for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission. 19 + + + + + + List of Exhibits Exhibit 1.13 - Current Bromelain SP Specifications Exhibit 4.2 - Price list per annual quantity Exhibit A - a copy of this Supply Agreement as originally signed on 11/1/2001 + +*** Confidential treatment has been requested for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission. 20 + + + + + + Exhibit 1.13 — Current Bromelain SP Specifications [***] + +*** Confidential treatment has been requested for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission. + + + + + + Exhibit 4.2 — Price list per annual quantity + + + +MediWound Ltd. 42 Hayarkon Street, Yavne, Israel Tel: 972-8-9324010 www.mediwound.com + + + + + + Supply Agreement as amended on Feb 28 2010. Exhibit 4.2 — Price list per annual quantity The price of [***]Kg of released BSP below an annual ordered quantity of [***] Kg shall be USD[***]/Kg [***]. The price of [***]Kg of released BSP above an annual ordered quantity of [***] Kg shall be between USD[***]/Kg [***], as jointly agreed and set between CBC and MW, once the forecasted annual ordered quantity exceeds [***] Kg of released BSP. Challenge Bioproducts Corporation Ltd: Date: 2011.10.12 + + + + + + Signature: /s/ Ching-Kuan Lin + + + + + + MediWound Ltd. + + + + + + Date: + + + + + + + + Signature: /s/ Gal Cohen + + + + + + Chief Executive Officer + + + + + + MediWound, Ltd. + + + + + + + +*** Confidential treatment has been requested for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission. + +th + + + + + + Exhibit A - a copy of this Supply Agreement as originally signed on 11/1/2001 [Omitted: Agreement no longer in effect] + +*** Confidential treatment has been requested for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission. 1 \ No newline at end of file diff --git a/full_contract_txt/MEETGROUP,INC_06_29_2017-EX-10.1-COOPERATION AGREEMENT.txt b/full_contract_txt/MEETGROUP,INC_06_29_2017-EX-10.1-COOPERATION AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..da38b5cdd38b83477aad208b9cd3797ac1180170 --- /dev/null +++ b/full_contract_txt/MEETGROUP,INC_06_29_2017-EX-10.1-COOPERATION AGREEMENT.txt @@ -0,0 +1,133 @@ +CERTAIN PORTIONS OF THIS DOCUMENT HAVE BEEN OMITTED PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST. SUCH OMITTED PORTIONS, WHICH ARE MARKED WITH BRACKETS [ ] AND AN ASTERISK*, HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. Exhibit 10.1 EXECUTION COPY COOPERATION AGREEMENT This AGREEMENT, dated as of June 27, 2017 (this "Agreement"), is made and entered into by The Meet Group, Inc., a Delaware corporation (the "Company"), and each of the persons set forth on the signature page hereto (each, an "Investor" and collectively, the "Investors" or, with their respective affiliates and associates, the "Investor Group"), which presently are or may be deemed to be members of a "group" with respect to the common stock of the Company, $0.001 par value per share (the "Common Stock"), pursuant to Rule 13d-5 promulgated by the U.S. Securities and Exchange Commission (the "SEC") under the Securities Exchange Act of 1934, as amended (the "Exchange Act"); WHEREAS, the Investor Group is deemed to beneficially own shares of the Common Stock totaling, in the aggregate, 4,425,000 shares of the Common Stock outstanding as of the date hereof; and WHEREAS, the Company has agreed, at the request of the Investor Group, to cause Jim Parmelee ("New Director A") and a person to be selected from the Director Candidate Pool (as defined herein) ("New Director B") (collectively, the "New Directors") to be appointed to the Company's Board of Directors (the "Board"), and to come to an agreement with respect to certain other matters as provided in this Agreement. NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows: 1. Board Composition Matters. (a) Appointment of New Director A. The Company agrees that it shall take all action as is necessary (including, without limitation, calling a special meeting of the Board to approve all actions contemplated hereby), effective immediately following the execution of this Agreement, to (i) cause the Board to increase the size of its membership from six (6) to seven (7) members; (ii) accept the resignation of one existing member of the Board to become effective immediately prior to the appointment of New Director A; and (iii) appoint New Director A to the Board with a term on the Board expiring at the Company's 2018 Annual Meeting of Stockholders (the "2018 Annual Meeting") and until his successor is duly elected and qualified. The Company further agrees that without the unanimous approval of the Board, during the period from the execution of this Agreement until the expiration of the Standstill Period (as defined below), the size of the Board shall not be increased beyond seven (7) members. + + + + + + (i) Identification and Appointment of New Director B. No later than ninety (90) calendar days from the date of execution of this Agreement (the "New Director B Appointment Deadline"), the Company shall take the necessary steps to cause the Board to appoint one of the candidates set forth on Exhibit A (as the same may be supplemented or otherwise amended from time to time by the mutual constent of the Company and the Investor Group, the "Director Candidate Pool") as New Director B with a term on the Board expiring at the 2018 Annual Meeting and until his or her successor is duly elected and qualified. The Company agrees that, if New Director B is not appointed to the Board prior to the New Director B Appointment Deadline and none of the candidates included in the Director Candidate Pool are willing to serve on the Board by the New Director B Appointment Deadline, (1) the Company and Investor Group will discuss in good faith the identification and selection of a mutually agreed upon substitute person to be added to the Director Candidate Pool following the same process that they would follow pursuant to Section 1(f) hereof if either of the New Directors, following their appointment to the Board, is unable to serve as a director for any reason, resigns as a director, or is removed as a director prior to the end of the term of office; and (2) the New Director B Appointment Deadline shall no longer apply and, in lieu thereof, shall be replaced by the time periods set forth in Section 1(f) hereof. (b) Board's Review of Qualifications and Determination of Independence. Prior to the execution of this Agreement (i) the Nominating and Governance Committee of the Board (the "Nominating Committee") has reviewed the qualifications of New Director A and each of the individuals included within the Director Candidate Pool to serve as members of the Board and has determined that they are so qualified, and (ii) the Board has determined that each of the New Directors and each of the individuals included within the Director Candidate Pool are "independent" as defined by the listing standards of NASDAQ. (c) Committees. The Company agrees that, concurrent with the appointment of the New Directors to the Board, the Board shall take such action as is necessary such that each of the New Directors is appointed to at least one (1) of the three (3) standing committees of the Board that the Company is required to maintain in accordance with the NASDAQ listing standards; provided that, with respect to each such committee appointment, the New Director is and continues to remain eligible to serve as a member of such committee pursuant to applicable law and the rules of NASDAQ that are applicable to the composition of such committee. (d) Board Policies and Procedures. The Investor Group acknowledges that each of the New Directors shall be required to comply with all policies, processes, procedures, codes, rules, standards, and guidelines applicable to members of the Board, as in effect from time to time, including, but not limited to, the Company's Code of Conduct, and policies on confidentiality, ethics, hedging and pledging of Company securities, public disclosures, stock trading, and stock ownership, and that each of the New Directors shall be required to strictly preserve the confidentiality of Company business and information, including the discussion of any matters considered in meetings of the Board whether or not the matters relate to material non-public information, unless previously publicly disclosed by the Company. Further, the Investor Group acknowledges that the New Directors will be requested to provide the Company with such information as is reasonably requested by the Company concerning the New Directors as is required to be disclosed under applicable law or stock exchange regulations, including the completion of the Company's standard director and officer questionnaire, in each case as promptly as necessary to enable the timely filing of the Company's proxy statement and other periodic reports with the SEC. 2 + + + + + + (e) Rights and Benefits of the New Directors. The Company agrees that each of the New Directors shall receive (i) the same benefits of director and officer insurance, and any indemnity and exculpation arrangements available generally to the directors on the Board, (ii) the same compensation for his service as a director as the compensation received by other non-management directors on the Board, and (iii) such other benefits on the same basis as all other non-management directors on the Board. (f) Replacements. The Company agrees that, during the Standstill Period (as defined below), if any of the New Directors is unable to serve as a director for any reason, resigns as a director, or is removed as a director prior to the end of the term of office, and at such time the Investor Group beneficially owns in the aggregate at least three percent (3.0%) of the Company's then outstanding Common Stock (subject to adjustment for share issuances, stock splits, reclassifications, combinations and similar actions by the Company that increase the number of outstanding shares of Common Stock), then the Company and the Investor Group shall work together in good faith to identify and select a replacement director candidate to be appointed to the Board which shall only be appointed to the Board after having been mutually agreed upon by both the Company and the Investor Group. Any such mutually agreed upon replacement director candidate shall qualify as "independent" pursuant to NASDAQ's listing standards and have the relevant financial and business experience to fill the resulting vacancy. Each of the Investor Group and the Company shall determine, and inform the other party of its determination, whether any proposed replacement director candidate is acceptable and meets the foregoing criteria, within ten (10) business days after such party has conducted interview(s) of such proposed replacement director candidate. Each of the Company and the Investor Group shall use their respective reasonable best efforts to cause any interview(s) contemplated by this Section 1(f) to be conducted as promptly as practicable, but in any case, assuming reasonable availability of the proposed replacement director candidate, within ten (10) business days after the receipt of such director candidate's credentials, including, but not limited to, a completed copy of the Company's standard director and officer questionnaire. Upon acceptance of a replacement director candidate by both the Company and the Investor Group, the Board shall take such actions as to appoint such replacement director candidate to the Board no later than ten (10) business days after both parties have confirmed in writing that they have mutually agreed upon such candidate. Following the appointment of any director to replace a New Director in accordance with this Section 1(f), any reference to New Directors herein shall be deemed to include such replacement director. 3 + + + + + + 2. Actions by the Investor Group. (a) Voting Agreement. (i) Stockholders Meetings. At each annual and special meeting of stockholders held prior to the expiration of the Standstill Period (as defined below), each of the Investors agrees to (A) appear at such stockholders' meeting or otherwise cause all shares of Common Stock beneficially owned by each Investor and their respective Affiliates and Associates (as defined below) to be counted as present thereat for purposes of establishing a quorum; (B) vote, or cause to be voted, all shares of Common Stock beneficially owned by each Investor and their respective Affiliates and Associates on the Company's proxy card or voting instruction form in favor of each of the nominees for election as directors nominated by the Board and recommended by the Board (and not in favor of any other nominees to serve on the Board); and, except in connection with any Opposition Matter (as defined below) or Other Voting Recommendation (as defined below), each of the proposals listed on the Company's proxy card or voting instruction form as identified in the Company's definitive proxy statement or supplement thereto in accordance with the Board's recommendations, including in favor of all matters recommended by the Board for stockholder approval and against all matters which the Board recommends against stockholder approval; provided, however, in the event that Institutional Shareholder Services Inc. ("ISS") issues a recommendation with respect to any matter (other than with respect to the election of nominees as directors to the Board or the removal of directors from the Board) that is different from the recommendation of the Board, each of the Investors shall have the right to vote on the Company's proxy card or voting instruction form in accordance with the ISS recommendation (the "Other Voting Recommendation"); and (C) not execute any proxy card or voting instruction form in respect of such stockholders' meeting other than the proxy card and related voting instruction form being solicited by or on behalf of the Company or the Board. No later than five (5) business days prior to each annual or special meeting of stockholders held prior to the expiration of the Standstill Period, each Investor shall, and shall cause each of its Associates and Affiliates to, vote any shares of Common Stock beneficially owned by such Investors in accordance with this Section 2. No Investor nor any of its Affiliates or Associates nor any person under its direction or control shall take any position, make any statement or take any action inconsistent with this Section 2(a)(i). For purposes of this Agreement, "Opposition Matter" shall mean any of the following transactions but only to the extent submitted by the Board to the Company's stockholders for approval: (A) the sale or transfer of all or substantially all of the Company's assets in one or a series of transactions; (B) the sale or transfer of a majority of the outstanding shares of the Company's Common Stock (through a merger, stock purchase, or otherwise); (C) any merger, consolidation, acquisition of control or other business combination that results in a Change of Control (as defined below) of the Company; (D) any tender or exchange offer; (E) any dissolution, liquidation, or reorganization; (F) any changes in the Company's capital structure (but excluding any proposal regarding the adoption or amendment of equity plans, all of which shall not be deemed an Opposition Matter for purposes of this Agreement); or (G) any other transactions that would result in a Change of Control of the Company. (ii) Actions By Written Consent. In connection with any action by written consent that is sought to be taken by any party, other than the Company or the Board, prior to the expiration of the Standstill Period (as defined below), each of the Investors agrees not to vote and to take all necessary action, including, without limitation, the execution and completion of any consent revocation card solicited by the Company or the Board, in accordance with the recommendation of the Board, to cause not to be voted, any of their shares of Common Stock beneficially owned by each Investor and/or their respective Affiliates and Associates on any consent card related to or affecting the removal, replacement or election of Board members and solicited by any party, other than the Company or the Board. No Investor nor any of its Affiliates or Associates nor any person under its direction or control shall take any position, make any statement or take any action inconsistent with this Section 2(a)(ii). (iii) Special Meeting Demands. In connection with any demand by a stockholder of the Company that the Company call a special meeting of stockholders, made prior to the expiration of the Standstill Period (as defined below), each of the Investors agrees not to vote and shall take all necessary action, including, but not limited to, the execution and completion of any consent revocation card solicited by the Company or the Board in accordance with the recommendation of the Board, to cause not to be voted, any of their shares of Common Stock beneficially owned by each Investor and/or their respective Affiliates and Associates for any special meeting demand proposed or sought to be made by any party. No Investor nor any of its Affiliates or Associates nor any person under its direction or control shall take any position, make any statement or take any action inconsistent with this Section 2(a)(iii). 4 + + + + + + 3. Standstill. (a) Each Investor agrees that, from the date of this Agreement until the expiration of the Standstill Period (as defined below), without the prior written consent of a majority of the Board specifically expressed in a written resolution, neither it nor any of its Related Persons (as defined herein) will, and it will cause each of its Related Persons not to, directly or indirectly, alone or with others, in any manner: (i) propose or publicly announce or otherwise publicly disclose an intent to propose or enter into or agree to enter into, singly or with any other person, directly or indirectly, (x) any form of business combination or acquisition or other transaction relating to a material amount of assets or securities of the Company or any of its subsidiaries, (y) any form of restructuring, recapitalization or similar transaction with respect to the Company or any of its subsidiaries or (z) any form of tender or exchange offer for the Common Stock, whether or not such transaction involves a change of control of the Company; (ii) engage in any solicitation of proxies or written consents to vote any voting securities of the Company, or conduct any non-binding referendum with respect to any voting securities of the Company, or assist or participate in any other way, directly or indirectly, in any solicitation of proxies or written consents with respect to any voting securities of the Company, or otherwise become a "participant" in a "solicitation," as such terms are defined in Instruction 3 of Item 4 of Schedule 14A and Rule 14a-1 of Regulation 14A, respectively, under the Exchange Act, to vote any securities of the Company in opposition to any recommendation or proposal of the Board; (iii) acquire, offer or propose to acquire, or agree to acquire, directly or indirectly, whether by purchase, tender or exchange offer, through the acquisition of control of another person, by joining a partnership, limited partnership, syndicate or other group (including any group of persons that would be treated as a single "person" under Section 13(d) of the Exchange Act), through swap or hedging transactions or otherwise, any additional securities (including common and preferred equity interests and debt that is convertible into any equity interests) of the Company or any rights decoupled from the underlying securities of the Company, that would result, or could result, in the Investor Group owning, in the aggregate (amongst all of the Investors and any Affiliate or Associate thereof), in excess of 10% of the shares of Common Stock outstanding; (iv) seek to advise, encourage or influence any person with respect to the voting of (or execution of a written consent in respect of) or disposition of any securities of the Company, other than in a manner in accordance with Section 2; (v) sell, offer or agree to sell directly or indirectly, through swap or hedging transactions or otherwise, any securities (including common and preferred equity interests and debt that is convertible into any equity interests) of the Company or any rights decoupled from the underlying securities held by the Investors to any person or entity that would knowingly result in any third party, together with its Affiliates and Associates, owning, controlling or otherwise having any, beneficial, economic or other ownership interest representing in the aggregate 5% or more of the shares of Common Stock outstanding at such time; 5 + + + + + + (vi) sell, offer or agree to sell directly or indirectly, through swap or hedging transactions or otherwise, any securities (including common and preferred equity interests and debt that is convertible into any equity interests) of the Company or any rights decoupled from the underlying securities held by the Investors to any Affiliate or Associate of the Investors not a party to this Agreement; (vii) except as otherwise set forth in this Agreement, take any action in support of or make any proposal or request that constitutes: (A) advising, controlling, changing or influencing the Board or management of the Company, including any plans or proposals to change the number or term of directors or to fill any vacancies on the Board, (B) any material change in the capitalization, stock repurchase programs and practices or dividend policy of the Company, (C) any other material change in the Company's management, governance, policies, strategic direction, business or corporate structure, (D) seeking to have the Company waive or make amendments or modifications to the Company's Amended and Restated Certificate of Incorporation or Bylaws, or other actions that may impede or facilitate the acquisition of control of the Company by any person, (E) causing a class of securities of the Company to be delisted from, or to cease to be authorized to be quoted on, any securities exchange, or (F) causing a class of securities of the Company to become eligible for termination of registration pursuant to Section 12(g)(4) of the Exchange Act; (viii) call or seek to call, or request the call of, alone or in concert with others, any meeting of stockholders, whether or not such a meeting is permitted by the Company's Amended and Restated Certificate of Incorporation or Bylaws, including, but not limited to, a "town hall meeting;" (ix) seek, alone or in concert with others, representation on the Board, except as expressly permitted by this Agreement; (x) initiate, encourage or participate in any "vote no," "withhold" or similar campaign; (xi) deposit any Common Stock in any voting trust or subject any Common Stock to any arrangement or agreement with respect to the voting of any Common Stock (other than any such voting trust, arrangement or agreement solely among the members of the Investor Group that is otherwise in accordance with this Agreement); (xii) seek, or encourage any person, to submit nominations in furtherance of a "contested solicitation" for the election or removal of directors with respect to the Company or seek, encourage or take any other action with respect to the election or removal of any directors of the Company or with respect to the submission of any stockholder proposals (including any submission of stockholder proposals pursuant to Rule 14a-8 under the Exchange Act); 6 + + + + + + (xiii) form, join or in any other way participate in any "group" (within the meaning of Section 13(d)(3) of the Exchange Act) with respect to the Common Stock (other than the Investor Group); (xiv) demand a copy of the Company's list of stockholders or its other books and records, whether pursuant to Section 220 of the Delaware General Corporation Law (the "DGCL") or pursuant to any other statutory right; (xv) commence, encourage, or support any derivative action in the name of the Company, or any class action against the Company or any of its officers or directors in order to, directly or indirectly, effect any of the actions expressly prohibited by this Agreement or cause the Company to amend or waive any of the provisions of this Agreement; provided, however, that for the avoidance of doubt, the foregoing shall not prevent any Investor from (A) bringing litigation to enforce the provisions of this Agreement, (B) making counterclaims with respect to any proceeding initiated by, or on behalf of, the Company against an Investor, or (C) exercising statutory dissenters, appraisal or similar rights under the DGCL; provided, further, that the foregoing shall also not prevent the Investors from responding to or complying with a validly issued legal process in connection with litigation that it did not initiate, invite, facilitate or encourage, except as otherwise permitted in this Section (3)(a) (xv); (xvi) disclose publicly or privately, in a manner that could reasonably be expected to become public any intent, purpose, plan or proposal with respect to the Board, the Company, its management, policies or affairs, any of its securities or assets or this Agreement that is inconsistent with the provisions of this Agreement; provided, however, that nothing herein shall prohibit the Investor Group from engaging in private discussions with the Company concerning the Investor Group's views or suggestions concerning the Company; (xvii) enter into any negotiations, agreements or understandings with any person or entity with respect to any of the foregoing, or advise, assist, knowingly encourage or seek to persuade any person or entity to take any action or make any statement with respect to any of the foregoing, or otherwise take or cause any action or make any statement inconsistent with any of the foregoing; (xviii) make any request or submit any proposal to amend the terms of this Agreement other than through non-public communications with the Company that would not be reasonably determined to trigger public disclosure obligations for any party; (xix) take any action challenging the validity or enforceability of any of the provisions of this Section 3 or publicly disclose, or cause or facilitate the public disclosure (including, without limitation, the filing of any document with the SEC or any other governmental agency or any disclosure to any journalist, member of the media or securities analyst) of, any intent, purpose, plan or proposal to either (A) obtain any waiver or consent under, or any amendment of, any provision of this Agreement, or (B) take any action challenging the validity or enforceability of any provisions of this Section 3; or (xx) otherwise take, or solicit, cause or encourage others to take, any action inconsistent with the foregoing. 7 + + + + + + (b) Notwithstanding the foregoing, the provisions of this Section 3 shall not limit in any respect the actions of any director of the Company (including, but not limited to, the New Directors) in their capacity as such, recognizing that such actions are subject to such director's fiduciary duties to the Company and its stockholders (it being understood and agreed that neither the Investors nor any of their Affiliates or Associates shall seek to do indirectly through the New Directors anything that would be prohibited if done by any of the Investors or their Affiliates and Associates directly). For the avoidance of doubt, no provision in this Section 3 or elsewhere in this Agreement shall prohibit privately-negotiated transactions in the Common Stock solely between or among the Investors. (c) As of the date of this Agreement, none of the Investors are engaged in any discussions or negotiations with any person, and do not have any agreements, arrangements, or understandings, written or oral, formal or informal, and whether or not legally enforceable with any person concerning the acquisition of economic ownership of any securities of the Company, and have no actual and non-public knowledge that any other stockholders of the Company have any present or future intention of taking any actions that if taken by the Investors would violate any of the terms of this Agreement. The Investors agree to refrain from taking any actions during the Standstill Period to intentionally encourage other stockholders of the Company, or any other persons to engage in any of the actions referred to in the previous sentence. (d) As used in this Agreement, the terms "Affiliate" and "Associate" shall have the respective meanings set forth in Rule 12b-2 promulgated by the SEC under the Exchange Act; the terms "beneficial owner" and "beneficial ownership" shall have the same meanings as set forth in Rule 13d-3 promulgated by the SEC under the Exchange Act; the terms "economic owner" and "economically own" shall have the same meanings as "beneficial owner" and "beneficially own," except that a person will also be deemed to economically own and to be the economic owner of (i) all shares of Common Stock which such person has the right to acquire pursuant to the exercise of any rights in connection with any securities or any agreement, regardless of when such rights may be exercised and whether they are conditional, and (ii) all shares of Common Stock in which such person has any economic interest, including, without limitation, pursuant to a cash settled call option or other derivative security, contract or instrument in any way related to the price of shares of Common Stock; the terms "person" or "persons" shall mean any individual, corporation (including not-for-profit), general or limited partnership, limited liability company, joint venture, estate, trust, association, organization or other entity of any kind or nature; and the term "Related Person" shall mean, as to any person, any Affiliates or Associates of such person. (e) Notwithstanding anything contained in this Agreement to the contrary: (i) The provisions of Sections 1, 2, and 3 of this Agreement shall automatically terminate upon the occurrence of a Change of Control transaction (as defined below) involving the Company if the acquiring or counter-party to the Change of Control transaction has conditioned the closing of the transaction on the termination of such sections; provided, however, that the Company shall not directly or indirectly, propose, seek, encourage or otherwise influence such acquiring or counter-party to the Change of Control transaction to condition the closing of such transaction on the termination of Sections 1, 2, and 3 of this Agreement; and 8 + + + + + + (ii) For purposes of this Agreement, a "Change of Control" transaction shall be deemed to have taken place if (1) any person is or becomes a beneficial owner, directly or indirectly, of securities of the Company representing more than 50% of the equity interests and voting power of the Company's then outstanding equity securities or (2) the Company enters into a stock-for-stock transaction whereby immediately after the consummation of the transaction the Company's stockholders retain less than 50% of the equity interests and voting power of the surviving entity's then outstanding equity securities. (f) For purposes of this Agreement, "Standstill Period" shall mean the period commencing on the date of this Agreement and ending at 11:59 p.m. Eastern Time on the date of the certification of the vote of stockholders at the 2018 Annual Meeting. 4. Expenses. Each of the Company and the Investors shall be responsible for its own fees and expenses incurred in connection with the negotiation, execution, and effectuation of this Agreement and the transactions contemplated hereby, including, but not limited to attorneys' fees incurred in connection with the negotiation and execution of this Agreement and all other activities related to the foregoing. 5. Representations and Warranties of the Company. The Company represents and warrants to the Investors that (a) the Company has the corporate power and authority to execute this Agreement and to bind it thereto, (b) this Agreement has been duly and validly authorized, executed and delivered by the Company, constitutes a valid and binding obligation and agreement of the Company, and is enforceable against the Company in accordance with its terms, except as enforcement thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or similar laws generally affecting the rights of creditors and subject to general equity principles and (c) the execution, delivery and performance of this Agreement by the Company does not and will not violate or conflict with (i) any law, rule, regulation, order, judgment or decree applicable to it, or (ii) result in any breach or violation of or constitute a default (or an event which with notice or lapse of time or both could become a default) under or pursuant to, or result in the loss of a material benefit under, or give any right of termination, amendment, acceleration or cancellation of, any organizational document, or any material agreement, contract, commitment, understanding or arrangement to which the Company is a party or by which it is bound. 6. Representations and Warranties of the Investors. Each Investor, on behalf of itself, severally represents and warrants to the Company that (a) as of the date hereof, such Investor beneficially owns, directly or indirectly, only the number of shares of Common Stock as described opposite its name on Exhibit B and Exhibit B includes all Affiliates and Associates of any Investors that own any securities of the Company beneficially or of record and reflects all shares of Common Stock in which the Investors have any interest or right to acquire, whether through derivative securities, voting agreements or otherwise, (b) this Agreement has been duly and validly authorized, executed and delivered by such Investor, and constitutes a valid and binding obligation and agreement of such Investor, enforceable against such Investor in accordance with its terms, except as enforcement thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or similar laws generally affecting the rights of creditors and subject to general equity principles, (c) such Investor has the authority to execute this Agreement on behalf of itself and the applicable Investor associated with that signatory's name, and to bind such Investor to the terms hereof, (d) each of the Investors shall use its commercially reasonable efforts to cause its respective Affiliates and Associates to comply with the terms of this Agreement and (e) the execution, delivery and performance of this Agreement by such Investor does not and will not violate or conflict with (i) any law, rule, regulation, order, judgment or decree applicable to it, or (ii) result in any breach or violation of or constitute a default (or an event which with notice or lapse of time or both could become a default) under or pursuant to, or result in the loss of a material benefit under, or give any right of termination, amendment, acceleration or cancellation of, any organizational document, agreement, contract, commitment, understanding or arrangement to which such member is a party or by which it is bound. 9 + + + + + + 7. Mutual Non-Disparagement. (a) Each Investor agrees that, until the earlier of (i) the expiration of the Standstill Period or (ii) any material breach of this Agreement by the Company (provided that the Company shall have three (3) business days following written notice from such Investor of any material breach to remedy such material breach if capable of remedy), neither it nor any of its Affiliates or Associates will, and it will cause each of its Affiliates and Associates not to, directly or indirectly, publicly make, express, transmit, speak, write, verbalize or otherwise publicly communicate in any way (or cause, further, assist, solicit, encourage, support or participate in any of the foregoing), any remark, comment, message, information, declaration, communication or other statement of any kind, whether verbal or in writing, that might reasonably be construed to be derogatory or critical of, or negative toward, the Company or any of its directors, officers, Affiliates, Associates, subsidiaries, employees, agents or representatives (collectively, the "Company Representatives"), or that reveals, discloses, incorporates, is based upon, discusses, includes or otherwise involves any confidential or proprietary information of the Company or its subsidiaries or Affiliates or Associates, or to malign, harm, disparage, defame or damage the reputation or good name of the Company, its business or any of the Company Representatives. (b) The Company hereby agrees that, until the earlier of (i) the expiration of the Standstill Period or (ii) any material breach of this Agreement by an Investor (provided that such Investor shall have three (3) business days following written notice from the Company of any material breach to remedy such material breach if capable of remedy), neither it nor any of its Affiliates will, and it will cause each of its Affiliates not to, directly or indirectly, publicly make, express, transmit, speak, write, verbalize or otherwise publicly communicate in any way (or cause, further, assist, solicit, encourage, support or participate in any of the foregoing), any remark, comment, message, information, declaration, communication or other statement of any kind, whether verbal or in writing, that might reasonably be construed to be derogatory or critical of, or negative toward, the Investors or their Affiliates or Associates or any of their agents or representatives (collectively, the "Investor Agents"), or that reveals, discloses, incorporates, is based upon, discusses, includes or otherwise involves any confidential or proprietary information of any Investor or its Affiliates or Associates, or to malign, harm, disparage, defame or damage the reputation or good name of any Investor, its business or any of the Investor Agents. (c) Notwithstanding the foregoing, nothing in this Section 7 or elsewhere in this Agreement shall prohibit any party from making any statement or disclosure required under the federal securities laws or other applicable laws. (d) The limitations set forth in Section 7(a) and 7(b) shall not prevent any party from responding to any public statement made by the other party of the nature described in Section 7(a) and 7(b) if such statement by the other party was made in breach of this Agreement. 10 + + + + + + 8. Public Announcements. Promptly following the execution of this Agreement, the Company and the Investor Group shall issue a mutually agreeable press release (the "Mutual Press Release"), announcing certain terms of this Agreement, substantially in the form attached hereto as Exhibit C. Prior to the issuance of the Mutual Press Release, neither the Company nor any of the Investors shall issue any press release or make any public announcement regarding this Agreement or take any action that would require public disclosure thereof without the prior written consent of the other party. During the Standstill Period, neither the Company nor the Investor Group or any of its Affiliates or Associates shall make any public announcement or statement that is inconsistent with or contrary to the statements made in the Mutual Press Release, except as required by law or the rules of any stock exchange (and, in any event, each party will provide the other party, prior to making any such public announcement or statement, a reasonable opportunity to review and comment on such disclosure, to the extent reasonably practicable under the circumstances, and each party will consider any comments from the other in good faith) or with the prior written consent of the other party, and otherwise in accordance with this Agreement. 9. SEC Filings. (a) No later than two (2) business days following the execution of this Agreement, the Company shall file a Current Report on Form 8-K with the SEC reporting the entry into this Agreement and appending or incorporating by reference this Agreement as an exhibit thereto. The Company shall provide the Investor Group and its counsel a reasonable opportunity to review and comment on the Form 8-K prior to such filing, which comments shall be considered in good faith. (b) No later than two (2) business days following the execution of this Agreement, the Investor Group shall file an amendment to its Schedule 13D with respect to the Company that has been filed with the SEC, reporting the entry into this Agreement, amending applicable items to conform to their obligations hereunder and appending or incorporating by reference this Agreement as an exhibit thereto. The Investor Group shall provide the Company and its counsel a reasonable opportunity to review and comment on the Schedule 13D prior to such filing, which comments shall be considered in good faith. 10. Specific Performance. Each of the Investors, on the one hand, and the Company, on the other hand, acknowledges and agrees that irreparable injury to the other party hereto may occur in the event any of the provisions of this Agreement are not performed in accordance with their specific terms or are otherwise breached and that such injury would not be adequately compensable in monetary damages. It is accordingly agreed that the Investors or any Investor, on the one hand, and the Company, on the other hand (the "Moving Party"), shall each be entitled to seek specific enforcement of, and injunctive or other equitable relief to prevent any violation of, the terms hereof, and the other party hereto will not take action, directly or indirectly, in opposition to the Moving Party seeking such relief on the grounds that any other remedy or relief is available at law or in equity. 11 + + + + + + 11. Notice. Any notices, consents, determinations, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); (iii) upon confirmation of receipt, when sent by email (provided such confirmation is not automatically generated) or (iv) one (1) business day after deposit with a nationally recognized overnight delivery service, in each case properly addressed to the party to receive the same. The addresses and facsimile numbers for such communications shall be: If to the Company: The Meet Group, Inc. 100 Union Square Drive New Hope, PA 18938 Fax No.: (215) 862.7825 Email: fred@themeetgroup.com Attention: Frederic A. Beckley, Esq., General Counsel and Executive Vice President, Business Affairs With copies (which shall not constitute notice) to: Morgan, Lewis & Bockius LLP 1111 Pennsylvania Avenue, N.W. Washington, DC 20004 Fax No.: (202) 739-3001 Email: keith.gottfried@morganlewis.com Attention: Keith E. Gottfried, Esq. If to any Investor: Harvest Capital Strategies LLC 600 Montgomery Street, Suite 1700 San Francisco, CA 94111 Fax No.: (415) 869-4433 Email: investments@harvestcaps.com Attention: Jeffrey B. Osher, Managing Director With copies (which shall not constitute notice) to: Olshan Frome Wolosky LLP 1325 Avenue of the Americas New York, NY 10019 Fax No.: (212) 451-2222 E-mail: swolosky@olshanlaw.com afreedman@olshanlaw.com Attention: Steve Wolosky, Esq. Andrew Freedman, Esq. 12 + + + + + + 12. Governing Law. This Agreement shall be governed in all respects, including validity, interpretation, and effect, by, and construed in accordance with, the laws of the State of Delaware executed and to be performed wholly within the State of Delaware, without giving effect to the choice of law or conflict of law principles thereof or of any other jurisdiction to the extent that such principles would require or permit the application of the laws of another jurisdiction. 13. Jurisdiction. Each of the parties hereto (a) consents to submit itself to the personal jurisdiction of federal or state courts of the State of Delaware in the event any dispute arises out of this Agreement or the transactions contemplated by this Agreement, (b) agrees that it shall not bring any action relating to this Agreement or the transactions contemplated by this Agreement in any court other than the federal or state courts of the State of Delaware, and each of the parties irrevocably waives the right to trial by jury, (c) agrees to waive any bonding requirement under any applicable law, in the case any other party seeks to enforce the terms by way of equitable relief, and (d) irrevocably consents to service of process by first class certified mail, return receipt requested, postage prepaid, to the address of such party's principal place of business or as otherwise provided by applicable law. Each of the parties hereto irrevocably waives, and agrees not to assert, by way of motion, as a defense, counterclaim or otherwise, in any action, suit or other legal proceeding with respect to this Agreement, (a) any claim that it is not personally subject to the jurisdiction of the above-named courts for any reason, (b) that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment before judgment, attachment in aid of execution of judgment, execution of judgment or otherwise), and (c) to the fullest extent permitted by applicable law, that (i) such action, suit or other legal proceeding in any such court is brought in an inconvenient forum, (ii) the venue of such action, suit or other legal proceeding is improper or (iii) this agreement, or the subject matter hereof, may not be enforced in or by such court. 14. Waiver of Jury Trial. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES AND, THEREFORE, EACH SUCH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LEGAL ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY TO THIS AGREEMENT CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT SEEK TO ENFORCE THE FOREGOING WAIVER IN THE EVENT OF A LEGAL ACTION, (B) SUCH PARTY HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 14. 15. Representative. Each Investor hereby irrevocably appoints Jeffrey B. Osher as its attorney-in-fact and representative (the "Investor Group Representative"), in such Investor's place and stead, to do any and all things and to execute any and all documents and give and receive any and all notices or instructions in connection with this Agreement and the transactions contemplated hereby. The Company shall be entitled to rely, as being binding on each Investor, upon any action taken by the Investor Group Representative or upon any document, notice, instruction or other writing given or executed by the Investor Group Representative. 13 + + + + + + 16. Entire Agreement. This Agreement constitutes the full and entire understanding and agreement among the parties with regard to the subject matter hereof, and supersedes all prior and contemporaneous agreements, understandings and representations, whether oral or written, of the parties with respect to the subject matter hereof. There are no restrictions, agreements, promises, representations, warranties, covenants or undertakings, oral or written, between the parties other than those expressly set forth herein. 17. Headings. The section headings contained in this Agreement are for reference purposes only and shall not effect in any way the meaning or interpretation of this Agreement. 18. Waiver. No failure on the part of any party to exercise, and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of such right, power or remedy by such party preclude any other or further exercise thereof or the exercise of any other right, power or remedy. 19. Remedies. All remedies hereunder are cumulative and are not exclusive of any other remedies provided by law or equity. 20. Receipt of Adequate Information; No Reliance; Representation by Counsel. Each party acknowledges that it has received adequate information to enter into this Agreement, that it has had adequate opportunity to make whatever investigation or inquiry it may deem necessary or desirable in connection with the subject matter of this Agreement prior to the execution hereof, and that it has not relied on any promise, representation or warranty, express or implied not contained in this Agreement. Each of the parties hereto acknowledges that it has been represented by counsel of its choice throughout all negotiations that have preceded the execution of this Agreement, and that it has executed the same with the advice of said independent counsel. Each party cooperated and participated in the drafting and preparation of this Agreement and the documents referred to herein, and any and all drafts relating thereto exchanged among the parties shall be deemed the work product of all of the parties and may not be construed against any party by reason of its drafting or preparation. Accordingly, any rule of law or any legal decision that would require interpretation of any ambiguities in this Agreement against any party that drafted or prepared it is of no application and is hereby expressly waived by each of the parties hereto, and any controversy over interpretations of this Agreement shall be decided without regards to events of drafting or preparation. Further, any rule of law or any legal decision that would provide any party with a defense to the enforcement of the terms of this Agreement against such party shall have no application and is expressly waived. The provisions of this Agreement shall be interpreted in a reasonable manner to effect the intent of the parties. 21. Construction. When a reference is made in this Agreement to a Section, such reference shall be to a Section of this Agreement, unless otherwise indicated. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Whenever the words "include," "includes" and "including" are used in this Agreement, they shall be deemed to be followed by the words "without limitation." The words "hereof, "herein" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The word "will" shall be construed to have the same meaning as the word "shall." The words "dates hereof" will refer to the date of this Agreement. The word "or" is not exclusive. The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms. Any agreement, instrument, law, rule or statute defined or referred to herein means, unless otherwise indicated, such agreement, instrument, law, rule or statute as from time to time amended, modified or supplemented. 14 + + + + + + 22. Severability. If any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement shall remain in full force and effect. Any provision of this Agreement held invalid or unenforceable only in part or degree shall remain in full force and effect to the extent not held invalid or unenforceable. The parties further agree to replace such invalid or unenforceable provision of this Agreement with a valid and enforceable provision that will achieve, to the extent possible, the purposes of such invalid or unenforceable provision. 23. Amendment. This Agreement may be modified, amended or otherwise changed only in a writing signed by all of the parties hereto, or in the case of the Investors, the Investor Group Representative, or their respective successors or assigns. 24. Successors and Assigns. The terms and conditions of this Agreement shall be binding upon and be enforceable by the parties hereto and the respective successors, heirs, executors, legal representatives and permitted assigns of the parties, and inure to the benefit of any successor, heir, executor, legal representative or permitted assign of any of the parties; provided, however, that no party may assign this Agreement or any rights or obligations hereunder without, with respect to any Investor, the express prior written consent of the Company (with such consent specifically authorized in a written resolution adopted and approved by the unanimous vote of the entire membership of the Board), and with respect to the Company, the prior written consent of the Investor Group Representative. 25. No Third-Party Beneficiaries. The representations, warranties and agreements of the parties contained herein are intended solely for the benefit of the party to whom such representations, warranties or agreements are made, and shall confer no rights, benefits, remedies, obligations, or liabilities hereunder, whether legal or equitable, in any other person or entity, and no other person or entity shall be entitled to rely thereon. 26. Counterparts; Facsimile / PDF Signatures. This Agreement and any amendments hereto may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement shall become effective when each party hereto shall have received a counterpart hereof signed by the other parties hereto. In the event that any signature to this Agreement or any amendment hereto is delivered by facsimile transmission or by e-mail delivery of a portable document format (.pdf or similar format) data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or ".pdf" signature page were an original thereof. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] [SIGNATURE PAGE FOLLOWS] 15 + + + + + + [SIGNATURE PAGE TO COOPERATION AGREEMENT] IN WITNESS WHEREOF the parties have duly executed and delivered this Agreement as of the date first above written. THE MEET GROUP, INC. By: /s/ Frederic Beckley Name: Frederic Beckley Title: General Counsel & EVP Business Affairs HARVEST SMALL CAP PARTNERS MASTER, LTD. By: Harvest Capital Strategies LLC Investment Manager By: /s/ Jeffrey B. Osher Name: Jeffrey B. Osher Title: Managing Director HARVEST SMALL CAP PARTNERS, L.P. By: Harvest Capital Strategies LLC Investment Manager By: /s/ Jeffrey B. Osher Name: Jeffrey B. Osher Title: Managing Director HARVEST SMALL CAP PARTNERS GP, LLC By: Harvest Capital Strategies LLC Investment Manager of the Limited Partner By: /s/ Jeffrey B. Osher Name: Jeffrey B. Osher Title: Managing Director HARVEST CAPITAL STRATEGIES LLC By: /s/ Jeffrey B. Osher Name: Jeffrey B. Osher Title: Managing Director /s/ Jeffrey B. Osher JEFFREY B. OSHER 16 + + + + + + CERTAIN PORTIONS OF THIS DOCUMENT HAVE BEEN OMITTED PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST. SUCH OMITTED PORTIONS, WHICH ARE MARKED WITH BRACKETS [ ] AND AN ASTERISK*, HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. EXHIBIT A DIRECTOR CANDIDATE POOL [***] 17 + + + + + + EXHIBIT B STOCKHOLDERS, AFFILIATES, AND OWNERSHIP + +Investor Shares of Common Stock Beneficially Owned Harvest Small Cap Partners Master, Ltd. 2,763,182 + +Harvest Small Cap Partners, L.P. 1,661,818 + + + + + + + + + +Aggregate total beneficially owned by the Investor Group: 4,425,000 + + 18 + + + + + + EXHIBIT C FORM OF PRESS RELEASE THE MEET GROUP REACHES AGREEMENT WITH HARVEST CAPITAL Agrees to Appoint Two New Independent Directors to The Meet Group's Board NEW HOPE, PA, June 27, 2017 - The Meet Group, Inc. (NASDAQ: MEET), a public market leader in the mobile meeting space, today announced that it has entered into a cooperation agreement with Harvest Capital Strategies LLC and its affiliates, which, in the aggregate, beneficially owns approximately 6.3% of The Meet Group's outstanding shares, regarding the composition of The Meet Group's Board of Directors. Under the terms of the agreement, The Meet Group has agreed to appoint to its Board two new independent directors: Jim Parmelee, who has agreed to join the Meet Group Board effective immediately, and a second director mutually acceptable to The Meet Group and Harvest Capital to be identified within the next ninety days. Spencer G. Rhodes, The Meet Group's Chairman of the Board, stated, "We are pleased to have reached this cooperation agreement with Harvest Capital, as we believe this outcome serves the best interests of The Meet Group and its stockholders. We are also pleased to welcome Jim Parmelee to our Board and look forward to the insights and experience he will bring." Jeffrey B. Osher, the Managing Director of Harvest Capital, stated, "We have spent considerable time with The Meet Group's senior management team and strongly support their strategy of creating a compelling portfolio of mobile meeting apps. Under Geoff Cook's leadership, The Meet Group has methodically grown its global platform while delivering consistent profitability and cash flow. We look forward to continuing our collaboration with The Meet Group's Board and senior management team as they execute on their long-term growth initiatives and focus on shareholder value creation." Pursuant to the cooperation agreement, Harvest Capital has agreed that, until the certification of the shareholder vote at The Meet Group's 2018 Annual Meeting of Stockholders, it will abide by certain customary standstill provisions. The cooperation agreement between The Meet Group and Harvest Capital will be included as an exhibit to a Current Report on Form 8-K that The Meet Group will file with the Securities and Exchange Commission. Morgan, Lewis & Bockius LLP served as legal counsel to The Meet Group. Olshan Frome Wolosky LLP served as legal advisor to Harvest Capital. The Meet Group also announced today that it has appointed The Blueshirt Group to lead its investor relations communications and strategy. The Blueshirt Group is a leading tech-focused investor relations firm that specializes in investor relations, IPO advisory, financial communications, financial media relations and crisis management. About Jim Parmelee Mr. Parmelee brings over 25 years of technology industry experience. He is currently an advisor to Hamilton Robinson Capital Partners, a middle market focused private equity firm. Jim was previously a Managing Director in Peak Ten Management LLC, where he was responsible for the firm's investments in the software, Internet and technology infrastructure verticals. Before Peak Ten, Jim was a Partner in Union Square Advisors, an M&A advisory firm focused on the technology sector, where he led the firm's global Information Technology infrastructure practice. Jim was previously a leading data networking and telecom equipment equity research analyst at Credit Suisse First Boston (now Credit Suisse). Jim was highly ranked by external polls throughout his research career including being named six times to Institutional Investor Magazine's All America Research Team. 19 + + + + + + About The Meet Group The Meet Group (NASDAQ: MEET) is a fast-growing portfolio of mobile apps designed to meet the universal need for human connection. Using innovative products and sophisticated data science, The Meet Group keeps its approximately 2.8 million mobile daily active users engaged and originates untold numbers of casual chats, friendships, dates, and marriages. The Meet Group offers advertisers the opportunity to reach customers on a global scale with hundreds of millions of daily mobile ad impressions. The Meet Group utilizes high user density, economies of scale, and leading monetization strategies with the goal of maximizing adjusted EBITDA. Our apps - currently MeetMe , Skout , Tagged , and Hi5 - let users in more than 100 countries chat, share photos, stream live video, and discuss topics of interest, and are available on iPhone, iPad, and Android in multiple languages. For more information, please visit themeetgroup.com. MEET Investor Contact: The Blueshirt Group Allise Furlani allise@blueshirtgroup.com 20 + +® ® ® ® \ No newline at end of file diff --git a/full_contract_txt/MERCATAINC_03_09_2000-EX-10.21-SPONSORSHIP AGREEMENT.txt b/full_contract_txt/MERCATAINC_03_09_2000-EX-10.21-SPONSORSHIP AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..e279782a390e6576e6f1890b595c9bdaa6f0050b --- /dev/null +++ b/full_contract_txt/MERCATAINC_03_09_2000-EX-10.21-SPONSORSHIP AGREEMENT.txt @@ -0,0 +1,151 @@ +EXHIBIT 10.21 SPONSORSHIP AGREEMENT + + THIS AGREEMENT, dated for reference purposes as of July 12, 1999 (the "Agreement"), is by and between FOOTBALL NORTHWEST LLC, a Washington limited liability company ("FNW") and MERCATA, Inc., a Delaware corporation ("Sponsor"). + + R E C I T A L S --------------- + + A. Pursuant to that certain Consent to Assignment and Amendment of Use Agreement dated January 7, 1997, as amended, between King County, Washington ("King County") and FNW, FNW is granted the exclusive right to and revenue from all advertising both inside and outside the King County Domed Stadium (the "Kingdome") and the Kingdome Pavilion, including on adjacent parking lots. + + B. The Kingdome is located in Seattle, Washington and currently serves as the home venue for the National Football League ("NFL") franchise for the Seattle Seahawks. + + C. FNW owns and, during the term of this Agreement, FNW or its successor or assign will retain the exclusive signage and advertising rights for the Kingdome. + + D. Sponsor desires to acquire from FNW certain sponsorship rights in the areas described below and FNW is vested with the authority to grant and desires to grant such rights to Sponsor in accordance with the terms and provisions of this Agreement. + + NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereby agree as follows: + +1. Sponsorship Benefits. Sponsor shall during the term of this Agreement -------------------- receive the following sponsorship benefits: + + A. Television + + 1. Three (3) :30 second Sponsor produced commercials ("Concept Ads") to air within each of three (3) preseason telecasts. 2. Three (3) :30 second Seahawks produced commercials ("Products Ads") to air within each of three (3) preseason telecasts. Content shall be reviewed and approved by Sponsor. Shawn Springs will be featured in the commercial. 3. Opening/closing billboards in each of three (3) Seahawks preseason games including Sponsor logo. 4. Sponsorship of one (1) feature ("Instant Replay") in three (3) preseason games including billboard and Sponsor logo visual. Total of three (3) features, billboards and logo identifications. 5. Three (3) Sponsor logo exposures in the Hawk Box Scoreboards per quarter during three (3) preseason games. 6. Sponsor a minimum of three (3) "live" power buy announcements ("Live Ads") during the course of three (3) telecasts. Announcement format to be determined. 7. Production: Seahawks will cover all hard costs to create, direct and produce one (1) :30 second TV spot to be used in three (3) preseason telecasts. Sponsor + + 1. + + will provide creative direction for the production and shall have the right to use such commercial where appropriate in its general advertising campaign or within certain promotional material during the 1999 season. 8. The sequence of TV appearance should always be: . FIRST appearance: Concept Ad (before last commercial series prior to a break) . SECOND appearance: Products Ad (last commercial series prior to a break) . THIRD appearance: Live Ad (during the break) One sequence per quarter from 1st to 3rd quarter. + + B. Kingdome Promotion/DiamondVision + + 1. Two (2) DiamondVision announcements per game for three (3) games. Total of six (6) DiamondVision announcements. Content will have to be reviewed and approved by Sponsor. 2. Sponsor opportunity to run :30 second television spot on DiamondVision during pregame warm-ups for three (3) preseason games. Total of three (3) spots 3. Sponsor (Promotional) road trip for two (2) including airfare, hotel and game tickets. Must participate in Sponsor/Seahawks Sweepstakes to be eligible for road trip. Designated road trip: Seattle @ Chicago on September 19, 1999. The value of this package is less $5,000 and shall be provided by FNW. + + C Seahawks.com + + 1. One (1) rotating banner ad on Seahawks.com for sixty (60) days + + + + + + (August through September 1999) Extension beyond the sixty (60) days to offered to Sponsor at favorable cpm based rate. 2. Seahawks to promote Sponsor online store from Seahawks.com's front page by providing a graphic and a text link directing visitors to Mercata.com. Text and graphics to be provided by Sponsor, and reviewed and approved by Seahawks.com. 3. Sponsor acknowledgement on Seahawks Television network web page on Seahawks.com 4. Sponsor will feature an online Seahawks-themed store selling Seahawks merchandising at Mercata.com. + + D. VIP Benefits + + 1. Two (2) season tickets with option to purchase two (2) playoff tickets 2. Twenty (20) tickets to two (2) preseason home games, August 14 and August 28, 1999. 3. One half-page color ad in Seahawks Insider for the 1999 season. Deadline for ad July 23, 1999. If Sponsor cannot meet the deadline, Seahawks will provide similar opportunity to be determined (i.e.: letter to season ticket holders introducing Mercata). 4. One (1) trip for two (2) to Training Camp. Includes transportation, hotel and entertainment 5. One "Advertorial" in first pre-season issue of NFL Insider to explain the Mercata 'story' and groundbreaking partnership with the Seahawks (Mercata to write and provide advertorial). 6. Mercata's use of Seahawks trademarks for promotional purposes extends throughout the 1999 season. + + 2. + +2. Term. The term of this Agreement shall commence on July 19, 1999 and shall ---- thereafter continue until all above described Sponsor benefits are completed, but in no event beyond the end of the 1999 season (the "Term"). This Agreement is noncancellable by either party except for termination in accordance with Paragraph 7, below, and may be mutually extended by written agreement of the parties. + +3. Consideration. In consideration of the sponsorship rights and other services ------------- and products granted and provided to Sponsor by FNW hereunder, Sponsor hereby agrees to pay FNW a sponsorship fee in the amount of Forty thousand Dollars ($40,000 net) (the "Sponsorship Fee"). + + 3.1. Invoices and Payment. FNW will send Sponsor invoices Sponsorship Fee in -------------------- two (2) monthly installments beginning September 1, 1999. Invoices are payable thirty (30) days after receipt. A five percent (5%) late fee will be added to all invoices which become past due and interest at a rate of twelve percent (12%) per annum will be charged on all balances not paid within thirty (30) days of the date they are due. + +4. Sponsor's Content and Design. The content and design of Sponsor's creative ---------------------------- material shall be within the discretion of Sponsor. However, if FNW objects to any such material when it is provided or thereafter, it shall notify Sponsor as soon as possible and Sponsor shall take prompt action to address FNW's concerns. + +5. Trademarks ---------- + + 5.1. Use of Sponsor's Trademarks. FNW shall not, by this Agreement, obtain --------------------------- any right, title or interest in the trademarks or other proprietary property of Sponsor, nor shall this Agreement give FNW the right to use, refer to, or incorporate in marketing or other materials the name, logos, trademarks, designs, identifications, or copyrights of Sponsor in any manner except as authorized by Sponsor. Sponsor acknowledges that FNW and parties conducting events within the Kingdome may televise, videotape, or take still photographs of events occurring in the Kingdome. Sponsor hereby consents to the commercial exploitation of such television broadcasts, video tapes and still photographs notwithstanding the fact that the content and design of Sponsor's images may be visible in such television broadcasts, video tapes and still photographs. + + 5.2. Use of FNW and Seattle Seahawks Trademarks. Sponsor shall not, by this ------------------------------------------ Agreement, obtain any right, title or interest in the trade names or trademarks of FNW, the Seattle Seahawks, the NFL, NFL Enterprises, L.P., NFL Properties, Inc. or any affiliate of such, nor shall any such agreements give Sponsor the right to use, refer to, or incorporate in marketing or other materials the names, logos, trademarks, designs, identifications or copyrights of&bbsp;FNW, the Seattle Seahawks, the NFL, NFL Enterprises, L.P., and NFL Properties, Inc. without the prior written approval of FNW, which approval may be withheld in FNW's reasonable discretion. Sponsor may use Seahawks trademarks for promotional purposes as necessary to convey the Sponsor benefits described herein. However, all such rights shall expire at the end of the 1999 regular season. + +6. Indemnification. FNW agrees to defend, indemnify and hold Sponsor harmless --------------- from and against all claims, suits, liabilities, costs and expenses, + + + + + + including reasonable attorney costs and fees, for injury to, including death of, persons (whether they be third persons or employees of either of the parties hereto) or any loss of or damage to property in any manner arising from or relating to the rights + + 3. + + conveyed herein, with the understanding that this obligation shall not apply to, and Sponsor agrees to defend, indemnify and hold FNW and its officers, directors, employees and agents harmless from and against, all losses, claims, suits, demands, actions, liabilities, costs and expenses, including reasonable attorney costs and fees, for injury to, including death of, persons (whether they be third persons or employees of either of the parties hereto) or any loss of or damage to property in any manner arising from the content of any advertising copy supplied by Sponsor or the negligence or intentional misconduct of Sponsor or its officers, employees or agents. + +7. Termination. FNW and Sponsor shall each have the right but not the ----------- obligation to terminate this Agreement upon forty-five (45) days prior written notice, without further liability except as otherwise provided by this Paragraph 7 if any of the following shall occur: + + (a) Damage to or destruction of the Kingdome to the extent that the Kingdome is closed for a period of greater than thirty (30) days, in which case the refund provisions of this Paragraph 7 shall apply. + + (b) The cancellation or termination of FNW's NFL franchise or the relocation of FNW's NFL franchise to a location more than 50 miles from Seattle, Washington. + + (c) The other party materially defaults in the performance of its material obligations under this Agreement and such other party fails to correct such breach within thirty (30) days of written notice. + + If this Agreement is so terminated by Sponsor, Sponsor shall be entitled to a pro rata refund of any payments under this Agreement. + +8. Remedies -------- + + 8.1 Generally. In the event that either party fails to fully comply with --------- any of its obligations under this Agreement, the other party shall be entitled to all remedies set forth in this Agreement and, except as otherwise provided herein, all remedies otherwise available at law or in equity. + + 8.2 Limitation on Damages. In no event shall either party be liable for --------------------- any special, incidental or consequential damages arising out of or in connection with this Agreement or the performance thereof. FNW's liability for any breach of this Agreement shall be strictly limited to refunding to Sponsor that portion of any consideration paid by Sponsor for which Sponsor has not received the rights granted to it herein. + +9. Limitations.&sbsp; This Agreement is subject to the Constitution and Bylaws and ----------- other rules and regulations of the NFL, the statutes and regulations of the State of Washington, and the ordinances and rules of King County, Washington and the City of Seattle, Washington as they presently exist or as they may from time-to-time be amended, including without limitation, any rule or regulation of the NFL or any agreement to which the NFL is a party which restricts the visibility of signage within the Kingdome during NFL games which are televised nationally. The obligations of either party to perform under this Agreement shall be excused if such failure to perform or any delay is caused by matters such as acts of God, strikes, lockout, work stoppage, picketing, damage or concerted action by any employee or labor organization, civil commotion, riots, war, acts of government, or any other cause whether similar or dissimilar to those enumerated which are reasonably beyond the control of the party obligated to perform. Upon the occurrence of such + + 4. + + event, the duties and obligations of the party shall be suspended for the duration of the event preventing performance. + +10. Entire Agreement. The entire agreement between the parties pertaining to ---------------- the subject matter of this Agreement is incorporated into this document. This Agreement may not be modified or amended except by a writing duly executed by the parties hereto. This Agreement supersedes any and all prior agreements and understandings between the parties. + +11. Successor Interests. Neither this Agreement nor any of the rights or ------------------- obligations of either FNW or Sponsor hereunder may be assigned, transferred or conveyed by operation of law or otherwise by either party, nor shall such agreements or rights inure to the benefit of any trustee in bankruptcy, receiver, creditor, or trustee of either party's business or its properties whether by operation of law or otherwise, except with the prior written + + + + + + consent of the other party, which consent shall not be unreasonably withheld, and the delivery of a written document in which the assignee assumes all of the obligations of the assigning party and the assigning party acknowledges that it will continue to be bound to such obligations if not performed by the assignee. For purposes of this Paragraph 11, the transfer of a fifty percent (50%) or greater ownership interest in a party shall be deemed to be an assignment of this Agreement. Notwithstanding the foregoing, no assignment or attempted assignment by Sponsor shall be valid except to a party which intends to continue the business of Sponsor as presently conducted. Sponsor does hereby consent to any transfer or assignment by FNW of its rights under this Agreement to an affiliate of FNW without any additional prior consent of Sponsor. Subject to the foregoing, this Agreement shall be binding upon and shall inure to the benefit of all successors and assigns of the parties. + +12. Confidentiality. Each of the parties deems the provisions of this Agreement --------------- to be confidential and proprietary in nature. FNW and Sponsor each agree that the terms of this Agreement will be kept confidential and will not be disclosed in any manner whatsoever, in whole or in part, by either party without the prior written consent of the other party except to the extent necessary for such party to enforce its rights under this Agreement or as either party may be advised by its legal counsel that it is obligated to disclose the terms of such agreements. Moreover, each party agrees to disclose the terms of this Agreement only to its respective&sbsp;officers, employees, agents and representatives who need to know of such terms and who agree to be bound by the confidentiality terms of this Paragraph. Each party shall be responsible for any breach of this Paragraph by its respective officers, employees, agents and representatives. The terms of this Paragraph shall survive the expiration or termination of this Agreement for whatever reason for a period of three (3) years after such expiration or termination. Notwithstanding the foregoing, FNW may disclose the terms of this Agreement to King County, Washington and to lenders, legal counsel, and financial advisors. + +13. Washington Law. This Agreement shall be deemed to have been made in the -------------- state of Washington and shall be construed in accordance with the laws of the state of Washington. The exclusive venue for any suits or actions arising out of this Agreement shall be in the Superior Court for the State of Washington for King County or in the United States District Court for the Western District of Washington. + +14. Notices. All notices under this Agreement shall be in writing and shall be ------- deemed to have been duly given if personally delivered, sent by telecopier, sent by overnight courier service or sent by registered or certified mail, postage prepaid, and shall be deemed given upon the earlier of actual + + 5. + + receipt or one day after it is sent, if sent by overnight courier, or three days after it is sent by registered or certified mail. All notices or other communications shall be made as follows: + + To FNW: 11220 N.E. 53rd Street Kirkland, WA 98033 Attn: Scott Patrick V.P./Corporate Sales + + With a Copy to: Richard E. Leigh, Jr. Vice President/General Counsel 110 - 110th Ave. N.E., Suite 550 Bellevue, WA 98004 + + If to Sponsor. Jerome Pache, Director Business Development Leslie Wallis, General Counsel MERCATA, Inc. 110 110th Avenue NE Bellevue, WA 98004-5840 + +15. Arbitration. Any controversy or claim arising out of or relating to this ----------- Agreement, including, but not limited to a claim based on or arising from an alleged tort will, at the request of any party be determined by arbitration in accordance with the Federal Arbitration Act (9 U.S.C. Section 1, et seq.) under the auspices and rules of the American Arbitration Association ("AAA"). The AAA will be instructed by either or both parties to prepare a list of judges who have retired from the Superior Court of the State of Washington, a higher Washington court or any federal court. 'Within 10 days of receipt of this list, each party may strike one name from the list. The AAA will then appoint an arbitrator from the name(s) remaining on the list. The arbitration will be conducted from Seattle, Washington. Any controversy in interpretation or enforcement of this provision or whether a dispute is arbitrable, will be determined by the arbitrators. Judgment upon the award rendered by the arbitrator(s) may be entered in any court having jurisdiction. The institution and maintenance of an action for judicial relief or in pursuit of an ancillary remedy, does not constitute a waiver of the right of any party, including the plaintiff, to submit the controversy or claim to arbitration. + +16. Attorneys' Fees. In the event any suit or action is brought or an --------------- arbitration or bankruptcy proceeding is initiated (including, without + + + + + + limitation, appeals of the foregoing) to enforce or interpret any of the provisions of this Agreement, or which is based thereon, the prevailing party shall be entitled to reasonable attorney fees in connection therewith. The determination of who is the prevailing party and the amount of reasonable attorney fees to be paid to the prevailing party shall be decided by the court or courts, including any appellate court, in which such matter is tried, heard or decided, including the court which hears any exceptions made to an arbitration award submitted to it for confirmation as a judgment (with respect to attorneys' fees incurred in such confirmation proceedings), or by the arbitrator(s) (with respect to attorneys' fees incurred prior to and during the arbitration proceedings), as the case may be. + +17. Relationship of Parties. The parties are acting herein as independent ----------------------- contractors and independent employers. Nothing herein contained shall create or be construed as creating a partnership, joint venture or agency relationship between the parties and no party shall have the authority to bind the other in any respect. + + 6. + +18. Agreement Approval. Each party hereby represents and warrants that all ------------------ necessary approvals for this Agreement have been obtained, and the person whose signature appears below has the authority necessary to execute this Agreement on behalf of the parties indicated. + +19. Captions. Paragraph headings herein are for convenience only and shall not -------- affect the construction or meaning of this Agreement. + + 7. + + IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written: + +FOOTBALL NORTHWEST LLC MERCATA, INC. + +By: /s/ Scott S. Patrick By: /s/ Tom Van Horn ---------------------------- ---------------------------- + +Name: Scott S. Patrick Name: Tom Van Horn -------------------------- -------------------------- (printed or typed) (printed or typed) + +Title: VP/Corporate Sales Title: President & CEO ------------------------- ------------------------- + + 8. \ No newline at end of file diff --git a/full_contract_txt/MERITLIFEINSURANCECO_06_19_2020-EX-10.(XIV)-MASTER SERVICES AGREEMENT.txt b/full_contract_txt/MERITLIFEINSURANCECO_06_19_2020-EX-10.(XIV)-MASTER SERVICES AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..1e84a6dd3f422201f1f54e2a2b490c05da45ddc6 --- /dev/null +++ b/full_contract_txt/MERITLIFEINSURANCECO_06_19_2020-EX-10.(XIV)-MASTER SERVICES AGREEMENT.txt @@ -0,0 +1,75 @@ +Exhibit 10(xiv) + +MASTER SERVICES AGREEMENT Between RadialSpark, LLC and Clear Capital Page 1 of 10 + + + + + +THIS MASTER SERVICES AGREEMENT ("Agreement"), dated as of 09/24/2018 (the "Effective Date"), is between Clear Capital (the "Company") and RadialSpark, LLC (the "Contractor"). WHEREAS, Company desires from time to time to retain Contractor to perform certain management consulting services for Company; and WHEREAS, Contractor desires to perform such management consulting services for Company; NOW THEREFORE, in consideration of the foregoing premises, and the mutual covenants and agreements set forth herein, the parties hereto agree as follows: 1. PURPOSE OF ENGAGEMENT. (a) Company agrees to retain Contractor to perform the consulting services for Company, on a task by task basis (the "Services"), and Contractor agrees to furnish the Services on the terms and subject to the conditions set forth in this Agreement. During the term of this Agreement, Company and Contractor will develop and agree upon statements of work defining the Services and work product to be provided by Contractor, Contractor's compensation, additional terms and conditions, if any, applicable to a particular engagement and such other details as the parties deem appropriate (each a "Statement of Work"). A Statement of Work may provide specifications for deliverables to be provided thereunder (the "Specifications"). Statements of Work that are from time to time agreed upon shall reference this Agreement, and shall be executed by the parties and attached hereto and shall form a part hereof. In all instances of a conflict, between the provisions of this Agreement and the specific provisions set forth in a Statement of Work, the provisions of this Agreement shall control. (b) Contractor shall provide sufficient qualified personnel to perform the Services in a professional and workmanlike manner in accordance with industry standards. A Statement of Work may designate certain individuals as "Key Personnel" for an engagement, and the parties subsequently may agree in writing that additional individuals are Key Personnel for such engagement. If there are Key Personnel for an engagement, Contractor shall provide the Services through those personnel and such additional personnel of Contractor as Contractor may from time to time determine to be required for the performance of the Services. Company shall have the right to interview and approve such additional personnel at Company's request. If one or more Key Personnel terminate their employment with Contractor or otherwise become + +Page 2 of 10 + + + + + +unavailable to work on an engagement for reasons beyond Contractor's reasonable control, Contractor may provide the Services through other personnel with comparable training and experience. If Company becomes dissatisfied with any of Contractor's personnel providing the Services, Company may notify Contractor of the details of its dissatisfaction, and the parties shall cooperate to remedy the problem as soon as possible. If Company reasonably requests, Contractor shall reassign the individual who is the subject of Company's dissatisfaction and replace that person with other personnel in accordance with this Agreement. (c) Unless otherwise provided in a Statement of Work, Contractor shall provide the Services at Contractor's facility. Contractor shall provide computing equipment consistent with the Services to be provided under the Statement of Work. When services are provided at a Company facility, Company shall provide workspace and other facilities such as computer support consistent with the requirements of the Services to be provided under the Statement of Work. Contractor shall cause its personnel at Company's facility to comply with Company's (i) safety and security rules and other rules applicable to those working in the facility, and (ii) Company's policies concerning access to and security of any Company computer system to which Contractor may have access; provided, that Company has provided Contractor with copies of such rules and policies or has advised Contractor of the existence of such rules and policies. (d) Company may request changes that affect the scope or duration of the Services relating to any Statement of Work, including changes in the Specifications and changes in the deliverables to be delivered. Company acknowledges that any change in Specifications may result in changes to estimated fees and estimated timeline for creation of deliverables. Company also may request a change in the Schedule without changing the scope of the Services relating to the applicable Statement of Work. In either case, the parties shall negotiate in good faith a reasonable and equitable adjustment in the applicable fees, Schedule and Specifications. Contractor shall continue work pursuant to the existing Statement of Work, and shall not be bound by any change requested by Company, until such change has been accepted in writing by Contractor. (e) The obligations of Company in connection with a particular engagement shall be set forth in the applicable Statement of Work. Company agrees to perform such obligations in accordance with, and subject to, such Statement of Work. Company acknowledges that when a Statement of Work provides that Company's personnel are to work with Contractor's personnel in connection with an engagement, Company's failure to assign Company personnel having skills commensurate with their role with respect to such engagement could adversely affect Contractor's ability to provide the Services. + +Page 3 of 10 + + + + + +(f) To the extent Contractor provides any third party materials and products Contractor acknowledges that it shall be solely responsible for ensuring the functionality and specifications of such third party materials and products used in performing Services under this Agreement. 2. TERM. The term of this Agreement shall begin on the date hereof and shall continue until terminated by either party pursuant to Paragraph 6 hereof. 3. CONTRACTOR'S COMPENSATION. (a) During the term of this Agreement, Company agrees to compensate Contractor as set forth in each Statement of Work. Contractor will be compensated on a time and materials. In addition, Company shall reimburse Contractor its actual out-of-pocket expenses as reasonably incurred by Contractor in connection with its performance of the Services as negotiated in each Statement of Work. (b) Contractor shall bill Company as set forth in the relevant Statement of Work. Each invoice submitted by Contractor will provide supporting detail for the Services invoiced, including, to the extent applicable to a particular engagement, the dates of Services and hours worked at the applicable rate by Statement of Work. Invoices shall also include receipts or other supporting detail concerning related expenses within the billing cycle. Contractor reserves the right to change rates with 30 days notice to Company. (c) All fees, charges and other amounts payable to Contractor hereunder do not include any sales, use, excise, value added or other applicable taxes, tariffs or duties, payment of which shall be the sole responsibility of Company (excluding any applicable taxes based on Contractor's net income or taxes arising from the independent contractor relationship between Contractor and its personnel). In the event that such taxes, tariffs or duties are assessed against Contractor, Company shall reimburse Contractor for any such amounts paid by Contractor or provide Contractor with valid tax exemption certificates with respect thereto. 4. OWNERSHIP OF MATERIALS RELATED TO SERVICES; ACCEPTANCE. (a) The parties agree that all drawings, documents, designs, models, inventions, computer programs, computer systems, data, computer documentation and other tangible materials authored or prepared by Contractor for Company as the work product required by a Statement of Work (collectively, the "Works"), are the property of Company to the extent that such Works were created by Contractor for Company over a time period for which Company has been invoiced and said invoice has been paid. Contractor agrees to render, at Company's sole cost + +Page 4 of 10 + + + + + +and expense, all reasonably required assistance to Company to protect the rights herein above described, including executing other documents as requested by Company. (b) Company acknowledges that Contractor provides consulting and development services to other clients, and agrees that nothing in this Agreement shall be deemed or construed to prevent Contractor from delivering on such business. In particular, Company agrees that, notwithstanding anything to the contrary set forth herein: (i) as part of Contractor's provision of the Services hereunder, Contractor may utilize its own proprietary works of authorship, that have not been created specifically for Company, including without limitation software, methodologies, tools, specifications, drawings, sketches, models, samples, records and documentation, as well as copyrights, trademarks, servicemarks, ideas, concepts, know-how, techniques, knowledge or data, which have been originated, developed or purchased by Contractor or by third parties under contract to Contractor, and, (ii) Contractor's Information and Contractor's administrative communications and records relating to the Services shall not be deemed to be Works and are and shall remain the sole and exclusive property of Contractor and Company shall not resell or make use of said property in any other manner other than in connection with the software Company receives under this Agreement. (c) To the extent that Contractor incorporates any of Contractor's Information into the Works, Contractor hereby grants to Company a royalty-free, non- exclusive perpetual license (including the right to grant a sublicense) to use, copy, modify, create, derivative version, publicly perform and publicly display such Contractor's Information in connection with Company's business operations. (d) Consultant agrees that after Company pays Contractor in full, or after the termination of this agreement, Company may make any changes or additions to the software Consultant created for Company under this Agreement, which Company in Company's discretion may consider necessary, and Company may engage others to make any such changes or additions, without further payments to Consultant. 5. CONTRACTOR'S REPRESENTATIONS AND WARRANTIES AND WARRANTY DISCLAIMER. (a) Contractor represents and warrants to Company that Contractor's performance of the Services called for by this Agreement, to its knowledge, does not and shall not violate any applicable law, rule, or regulation; + +Page 5 of 10 + + + + + +(b) Contractor represents and warrants to Company that Contractor has full authority and sufficient rights, except for rights respecting programs, data and materials provided by Company or identified by Contractor as furnished to Company by third-party vendors, to grant and convey the rights granted to Company under Paragraph 4 hereof; (c) Contractor represents and warrants that the Works provided hereunder, including any Contractor Information and any third party products do not infringe any trade secret, trademark, copyright, patent or other proprietary right of any other third party. (d) Contractor covenants that it will not offer or pay any bribes (including any offer to provide improper gifts or entertainment) to secure or retain a business advantage (for the benefit of Contractor or for the benefit of Company) at any time during the term of this agreement. Specifically, Contractor agrees that it will not offer or pay any bribes to any person (including, in particular, to any government official) in connection with any aspect of the performance of services under this agreement. Contractor also covenants that at all times during the term of this agreement that it will maintain internal policies and procedures that are reasonably designed to ensure that Contractor's employees and representatives will not offer to pay or pay bribes (or offer or provide improper gifts or entertainment) to any person in connection with Contractor's performance under this agreement. Contractor also covenants that it will provide suitable training to its employees and representatives during the term of this agreement about Contractor's anti-corruption policies and procedures. Contractor represents and warrants to Company that Contractor has not offered or paid any bribes (or offered or provided any improper gifts and entertainment) to secure business under this agreement or otherwise in connection with the performance of its obligations under this agreement. Notwithstanding any other provision of this agreement, if Contractor offers or pays a bribe or provides improper gifts or entertainment to any government official or to any other person in connection with the performance of Contractor's obligations under this agreement, Company shall be entitled to elect to terminate this agreement effective immediately upon providing to Contractor written notice of such termination, in which case Company shall have no obligation to pay any fees or other consideration to Contractor under this agreement or otherwise. (e) THE EXPRESS WARRANTIES IN THIS AGREEMENT SHALL BE IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE. + +Page 6 of 10 + + + + + +6. TERMINATION. (a) At any time that there is no uncompleted Statement of Work outstanding, either party may terminate this Agreement for any or no reason upon fifteen (15) days advance notice to the other. (b) In addition, either party may terminate this Agreement or any outstanding Statement of Work, upon fifteen (15) days written notice to the other party, in the event such other party breaches a material term of this Agreement or any Statement of Work and such breach remains uncured at the end of such fifteen (15) day period. Upon any such termination, Contractor will be paid all fees and expenses that have been incurred or earned in connection with the performance of the Services through the effective date of such termination. Contractor shall provide to Company, and hereby assigns to Company, all right, title and interest to any Works in progress. 7. LIMITATIONS OF LIABILITY; INDEMNIFICATION OF CONTRACTOR. (a) EXCEPT WITH RESPECT TO CONTRACTOR'S OBLIGATIONS PURSUANT TO PARAGRAPH 9 HEREOF, CONTRACTOR'S MAXIMUM LIABILITY TO COMPANY ARISING FOR ANY REASON RELATING TO CONTRACTOR'S PERFORMANCE OF SERVICES UNDER A STATEMENT OF WORK SHALL BE LIMITED TO THE AMOUNT OF FEES PAID TO CONTRACTOR FOR THE PERFORMANCE OF SUCH SERVICES. COMPANYS' MAXIMUM LIABILITY TO CONTRACTOR FOR ANY REASON ARISING OUT OF THIS AGREEMENT SHALL BE LIMITED TO THE AMOUNT OF FEES PAID TO CONTRACTOR. (b) NEITHER PARTY SHALL HAVE ANY LIABILITY TO THE OTHER PARTY FOR ANY LOST PROFITS OR SPECIAL, INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. (c) IN ANY SUIT ARISING FROM THIS AGREEMENT EACH PARTY SHALL BE RESPONSIBLE FOR ITS OWN ATTORNEYS FEES. COMPANY AND CONTRACTOR HEREBY WAIVE ANY CLAIM TO AWARD OF ATTORNEYS FEES IN SUCH A SUIT. 8. CONFIDENTIAL INFORMATION. "Confidential Information" means all documents, software, reports, data, records, forms, conversations and other materials obtained by Contractor from Company in the course of performing any Services (including, but not limited to, Company records and information). Notwithstanding the foregoing, Confidential Information does not include information which: (i) is or becomes publicly known through no wrongful act of Contractor; or (ii) is independently developed by Contractor without benefit of Company's + +Page 7 of 10 + + + + + +Confidential Information. Contractor shall not use or disclose to any person, firm or entity any Confidential Information without Company's express, prior written permission; provided, however, that notwithstanding the foregoing, Contractor may disclose Confidential Information to the extent that it is required to be disclosed pursuant to a statutory or regulatory provision or court order. 9. INDEPENDENT CONTRACTOR. Contractor is performing the Services as an independent contractor and not as an employee of Company and none of Contractor's personnel shall be entitled to receive any compensation, benefits or other incidents of employment from Company. Subject to Section 3(c), Contractor shall be responsible for all taxes and other expenses arising from the employment or independent contractor relationship between Contractor and its personnel and the rendition of Services hereunder by such personnel to Company. Nothing in this Agreement shall be deemed to constitute a partnership or joint venture between Company and Contractor, nor shall anything in this Agreement be deemed to constitute Contractor or Company the agent of the other. Neither Contractor nor Company shall be or become liable or bound by any representation, act or omission whatsoever of the other. 10. NONASSIGNABILITY. Neither party shall assign, transfer, or subcontract this Agreement or any of its obligations hereunder without the other party's express, prior written consent, which will not be unreasonably withheld. 11. SEVERABILITY; GOVERNING LAW. In the event that any term or provision of this Agreement shall be held to be invalid, void or unenforceable, then the remainder of this Agreement shall not be affected, impaired or invalidated, and each such term and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. This Agreement shall be governed by and construed in accordance with the laws of the Arizona, without regard to the conflict of laws provisions thereof. (c) In the event of termination under either section 6(a) or 6(b) of this agreement, Contractor shall be paid all fees and expenses that have been incurred or earned in connection with the performance of the Services through the effective date of such termination. Upon receipt of final payment Contractor shall provide to Company, and will assigns to Company, all right, title and interest to any Works in progress. 12. INTEGRATION. This Agreement, including The Mutual Non-Disclosure Agreement and, any Statements of Work entered into pursuant hereto, constitutes the entire agreement of the parties hereto with respect to its subject matter and supersedes all prior and contemporaneous representations, proposals, discussions, and communications, whether oral or in writing. This + +Page 8 of 10 + + + + + +Agreement may be modified only in writing and shall be enforceable in accordance with its terms when signed by each of the parties hereto. 13. NON-SOLICITATION OF EMPLOYEES. Neither party shall, during the term of this Agreement and for one (1) year after its termination, solicit for hire as an employee, consultant or otherwise any of the other party's personnel who have had direct involvement with the Services, without such other party's express written consent, which shall not be unreasonably withheld. 14. INSURANCE. Throughout the term of this Agreement, Contractor shall maintain workers compensation insurance in the amount required by statute, comprehensive general liability insurance with coverage of at least one million dollars ($1,000,000) and professional errors and omissions insurance for bodily injury, property damage or other losses with coverage of at least one million dollars ($1,000,000), in connection with the provision of Services by Contractor pursuant to the terms of this Agreement. At Company's request, Contractor shall provide Company with certificates or other acceptable evidence of insurance or self-insurance evidencing the above coverage and shall provide Company with prompt written notice of any material change. 15. Force Majeure. Except for payment obligations hereunder, nonperformance by either party shall be excused to the extent that performance is rendered impossible by strike, acts of God, governmental acts or restrictions, failure of suppliers, or any other reason where failure to perform is beyond the control of the nonperforming party. 16. Counterparts. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. 17. Entire Agreement. This Agreement constitutes the complete and exclusive agreement between Company and Consultant concerning the work on this project, and it supersedes all other prior agreements, proposals, and representations, whether stated orally or in writing. 18. Severability. If any provision of this Agreement is invalid, illegal, or unenforceable, the remainder of this Agreement will remain in full force and effect. 19. Arbitration. Except as otherwise specified below, all actions, disputes, claims and controversies under common law, statutory law or in equity of any type or nature whatsoever, whether arising before or after the date of this Agreement, and whether directly or indirectly + +Page 9 of 10 + + + + + +relating to: (a) this Agreement and/or any amendments and addenda hereto, or the breach, invalidity or termination hereof; (b) any previous or subsequent agreement between the parties; and/or (c) any other relationship, transaction or dealing between the parties (collectively the "Disputes"), will be subject to and resolved by binding arbitration pursuant to the Arbitration Rules of U.S. Arbitration & Mediation, (www.usam.com). Any award or order rendered by the arbitrator may be confirmed as a judgment or order in any state or federal court of competent jurisdiction, which includes within the federal judicial district of the residence of the party against whom such award or order was entered. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized representatives as of the Effective Date. /s/ Michael Rockford /s/ John Marcum for RadialSpark, LLC for Clear Capital + +Page 10 of 10 \ No newline at end of file diff --git a/full_contract_txt/MFAFINANCIAL,INC_07_06_2020-EX-99.D-JOINT FILING AGREEMENT.txt b/full_contract_txt/MFAFINANCIAL,INC_07_06_2020-EX-99.D-JOINT FILING AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..785c43ff064b4a71476d0a67733bebf1fc4e46af --- /dev/null +++ b/full_contract_txt/MFAFINANCIAL,INC_07_06_2020-EX-99.D-JOINT FILING AGREEMENT.txt @@ -0,0 +1,19 @@ +EXHIBIT D JOINT FILING AGREEMENT MFA FINANCIAL, INC. In accordance with Rule 13d-1(k) under the Securities Exchange Act of 1934, as amended, the undersigned hereby confirm the agreement by and among them to the joint filing on behalf of them of the Statement on Schedule 13D and any and all further amendments thereto, with respect to the securities of the above referenced issuer, and that this Agreement be included as an Exhibit to such filing. This Agreement may be executed in any number of counterparts each of which shall be deemed to be an original and all of which together shall be deemed to constitute one and the same Agreement. IN WITNESS WHEREOF, the undersigned hereby execute this Agreement as of July 6, 2020. ATHENE ANNUITY AND LIFE COMPANY By: Apollo Insurance Solutions Group LP, its investment adviser By: AISG GP Ltd., its general partner By: /s/ Matthew S. O'Mara Matthew S. O'Mara Authorized Signatory ATHENE ANNUITY & LIFE ASSURANCE COMPANY By: Apollo Insurance Solutions Group LP, its investment adviser By: AISG GP Ltd., its general partner By: /s/ Matthew S. O'Mara Matthew S. O'Mara Authorized Signatory ATHENE USA CORPORATION By: Apollo Insurance Solutions Group LP, its investment adviser By: AISG GP Ltd., its general partner By: /s/ Matthew S. O'Mara Matthew S. O'Mara Authorized Signatory + + + + + +ATHENE LIFE RE LTD. By: Apollo Insurance Solutions Group LP, its investment adviser By: AISG GP Ltd., its general partner By: /s/ Matthew S. O'Mara Matthew S. O'Mara Authorized Signatory ATHENE HOLDING LTD. By: Apollo Insurance Solutions Group LP, its investment adviser By: AISG GP Ltd., its general partner By: /s/ Matthew S. O'Mara Matthew S. O'Mara Authorized Signatory APOLLO INSURANCE SOLUTIONS GROUP LP By: AISG GP Ltd., its general partner By: /s/ Matthew S. O'Mara Matthew S. O'Mara Authorized Signatory AISG GP LTD. By: /s/ Matthew S. O'Mara Matthew S. O'Mara Authorized Signatory APOLLO LIFE ASSET, L.P. By: Apollo Life Asset GP, LLC, its general partner By: /s/ William B. Kuesel William B. Kuesel Vice President + + + + + +APOLLO LIFE ASSET GP, LLC By: /s/ William B. Kuesel William B. Kuesel Vice President APOLLO CAPITAL MANAGEMENT, L.P. By: Apollo Capital Management GP, LLC, its general partner By: /s/ William B. Kuesel William B. Kuesel Vice President APOLLO CAPITAL MANAGEMENT GP, LLC By: /s/ William B. Kuesel William B. Kuesel Vice President APOLLO MANAGEMENT HOLDINGS, L.P. By: Apollo Management Holdings GP, LLC, its general partner By: /s/ William B. Kuesel William B. Kuesel Vice President APOLLO MANAGEMENT HOLDINGS GP, LLC By: /s/ William B. Kuesel William B. Kuesel Vice President OMAHA EQUITY AGGREGATOR, L.P. By: AP Omaha Advisors, LLC, its general partner By: Apollo Hybrid Value Advisors, L.P., its sole member By: Apollo Hybrid Value Capital Management, LLC, its general partner By: /s/ Joseph D. Glatt Joseph D. Glatt Vice President + + + + + +AP OMAHA ADVISORS, LLC By: Apollo Hybrid Value Advisors, L.P., its sole member By: Apollo Hybrid Value Capital Management, LLC, its general partner By: /s/ Joseph D. Glatt Joseph D. Glatt Vice President APOLLO HYBRID VALUE ADVISORS, L.P. By: Apollo Hybrid Value Capital Management, LLC, its general partner By: /s/ Joseph D. Glatt Joseph D. Glatt Vice President APOLLO HYBRID VALUE CAPITAL MANAGEMENT, LLC By: /s/ Joseph D. Glatt Joseph D. Glatt Vice President APH HOLDINGS, L.P. By: Apollo Principal Holdings III GP, Ltd., its general partner By: /s/ William B. Kuesel William B. Kuesel Vice President APOLLO PRINCIPAL HOLDINGS III GP, LTD. By: /s/ William B. Kuesel William B. Kuesel Vice President \ No newline at end of file diff --git a/full_contract_txt/MIDDLEBROOKPHARMACEUTICALS,INC_03_18_2010-EX-10.1-PROMOTION AGREEMENT.txt b/full_contract_txt/MIDDLEBROOKPHARMACEUTICALS,INC_03_18_2010-EX-10.1-PROMOTION AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..69d6f29dfa7a263bbdae9c216183f6b0ca9125f1 --- /dev/null +++ b/full_contract_txt/MIDDLEBROOKPHARMACEUTICALS,INC_03_18_2010-EX-10.1-PROMOTION AGREEMENT.txt @@ -0,0 +1,439 @@ +EXHIBIT 10.1 + +PROMOTION AGREEMENT + +This Promotion Agreement ("Agreement") is entered into as of February 3, 2010 ("Effective Date") by and between MiddleBrook Pharmaceuticals, Inc. ("MBRK") , a Delaware corporation with offices at 7 Village Circle, Suite 100, Westlake, TX 76262 and DoctorDirectory.com, Inc. ("DD") , a South Carolina Corporation, with offices at One Page Avenue, Suite 280, Asheville, NC 28801. + +WHEREAS DD provides advertising, promotion and marketing services to pharmaceutical companies that seek to market their products to physicians and other allied medical professionals including nurses, nurse practitioners, and physician assistants; and + +WHEREAS MBRK markets prescription drug products, including its product known as MOXATAG® ("MOXATAG") to licensed physicians, nurses, nurse practitioners, and physician assistants in the United States ("US") whose clinical practice is consistent with MOXATAG's approved labeling; and + +WHEREAS MBRK seeks to have MOXATAG promoted to as many licensed US physicians, nurse practitioners and physician assistants whose clinical practice is consistent with MOXATAG's approved labeling as is possible and practical. + +THEREFORE, for good and valuable consideration, the sufficiency and receipt of which is hereby acknowledged, the Parties agree that DD will promote MOXATAG to certain US physicians and others as identified in this Agreement subject to the terms and conditions as set forth below: + +Section 1 — Definitions + +The terms as used in this Agreement will have the meanings as follows: + +(a) "Actual DD Target Segment MOXATAG TRx" means the total actual number of MOXATAG prescriptions filled in the US during the applicable Promotional Measurement Period and written by DD Target Segment Prescribers as stipulated by the Prescriber Data. (b) "Actual DD Target Segment MOXATAG TRx Tablets" means the average number of tablets contained in all MOXATAG TRx during the applicable Promotional Measurement Period as stipulated by the Prescriber Data including the tablet quantities as reported by IMS NPA weekly EUTRx (tablets) data, multiplied by Actual DD Target Segment MOXATAG TRx. (c) "Change of Control" means the change of control of MBRK, as defined by any of the following events: A) any third party acquires directly or indirectly the beneficial ownership of any voting security of MBRK representing fifty percent (50%) of the total voting power of the then outstanding voting securities of MBRK; B) the consummation of a merger, consolidation, recapitalization, or reorganization of MBRK with or by a third party which + + + + + + + + would result in fifty percent (50%) or more of the total voting power of MBRK stock being transferred to a third party; or C) the stockholders or equity holders of MBRK approve a plan of complete liquidation of MBRK or an agreement for the sale or disposition of all or substantially all the assets of MBRK. + +(d) "Coupons" means those coupons or vouchers provided by MBRK and distributed through a MBRK designee and whose redemption is tracked by a MBRK designee, and redeemed by patients filling MOXATAG prescriptions written by DD Target Segment Prescribers. (e) "Cost of Coupon Redemption Amount" means the redemption amount and the costs associated with printing and processing those Coupons redeemed during the applicable Promotion Measurement period. (f) "Cost of Samples Amount" means the cost of manufacturing and delivering (including, without limitation, all applicable freight, packaging and shipping costs) and costs of any third party vendors used in connection with manufacturing and fulfillment of MOXATAG samples. (g) "Deposit" means that amount which MBRK shall deposit with DD upon the Promotion Commencement Date and as subject to the adjustment outlined in Section 5. (h) "DD Target Segment Prescribers" means the licensed prescribers as defined in EXHIBIT 1. (i) "Early Termination Fee" means that amount equal to the most recent month's Promotion Fee prior to termination, multiplied by the number of unexpired months remaining in the current year of the Agreement. (j) "End of Agreement Fee" means the fee, in addition to any other amounts due, payable to DD (when this Agreement is terminated as further described in Section 18(f)) that is equal to two (2) times the last month's Promotional Fee earned by DD during the last month of the Agreement. (k) "FDA" means the federal Food and Drug Administration. (l) "Gross Margin Per Tablet" means the Gross Margin calculated in accordance with GAAP and which excludes those non-recurring and unusual items that the Parties agree are not resulting from activities under this Agreement ("GM Adjustment Items") divided by the actual number of MOXATAG tablets (as report by IMS Health Rx data) during the applicable Promotional Period. By way of example, these GM Adjustment Items where appropriate may include inventory write-offs, changes to prior period reserve balances or foreign exchange gains or losses. MBRK agrees to provide a summary of any GM Adjustment Items to DD. The calculation of Gross Margin Per Tablet will be based on U.S. sales of MOXATAG only. For periods after September 30, 2010, if the Gross Margin per Tablet is less than $3.50, the Parties agree to re-evaluate the viability of the Agreement and if deemed necessary will use commercially reasonable efforts to re-negotiate an amendment to the Agreement. + + + + + + + +(m) "Gross Margin Per TRx" means the Gross Margin per MOXATAG Rx as calculated in accordance with GAAP and which exclude GM Adjustment Items. The calculation of Gross Margin Per TRx will be based on U.S. sales of MOXATAG only. For the period from the Effective Date through September 30, 2010, the Gross Margin per TRx shall be $36.50. (n) "Intellectual Property Rights" means any and all patents, copyrights, trade secrets, trademarks, and any and all other intellectual property rights or interests. (o) "Medical Professionals" means licensed nurses, nurse practitioners, and physician assistants. (p) "MOXATAG" means the prescription drug known as MOXATAG® (amoxicillin extended-release) Tablets 775 mg, approved by the FDA, having NDC numbers 110442-142-03 and 110442-142-02 which is marketed in the US, including currently and subsequently approved formulations, strengths, concentrations and delivery mechanisms. (q) "MOXATAG Labeling" shall mean (a) the FDA-approved full prescribing information for MOXATAG, including any required patient information, and (b) all labels and other written, printed or graphic matter upon any container, wrapper or any package insert or outsert utilized with or for MOXATAG. (r) "Parties" means DD and MBRK collectively. (s) "Prescriber Data" means the prescriber data supplied by a nationally recognized prescription data provider where permitted under federal and state law, which is currently provided to MBRK by IMS Health. (t) "Promotion Commencement Date" means the first day of the month in which DD commences its promotion of MOXATAG under this Agreement. (u) "Promotion Fees" means the Promotion Fees payable to DD by MBRK for the promotion services provided under this Agreement as is calculated by and stipulated in Section 5, which represent fair market value for such services. (v) "Promotional Materials" shall mean all MBRK-approved and available sales representative training materials and all MBRK-approved and available written, printed, graphic, electronic, audio or video matter, including, but not limited to, journal advertisements, sales aids, formulary binders, reprints, direct mail, direct-to-consumer advertising, Internet postings, broadcast advertisements and sales reminder aids (for example, scratch pads, pens and other such items), in each case created by a party or on its behalf and used or intended for use by DD and MBRK in connection with any promotion of MOXATAG hereunder, or disease state or indication for which MOXATAG is approved for treatment but excluding MOXATAG Labeling. (w) "Promotional Measurement Period" means that month during which prescription activity for MOXATAG is measured. (x) "Territory" shall mean the US, including all US territories, possessions and protectorates. (y) "Up-Front Payment" means the one-time payment of $50,000 to be made by MBRK to DD upon execution of this Agreement. + + + + + + + +Section 2 — Term + +This Agreement shall commence as of the Effective Date and shall continue in full force and effect for an initial term of three (3) years from the Promotion Commencement Date, divided into three one-year periods. Unless terminated in accordance with the provisions of Section 18, this Agreement shall automatically renew for each subsequent one-year term. + +Section 3 — Obligations of DD + +3.1 DD will promote MOXATAG to DD Target Segment Prescribers using its full suite of promotion solutions where DD and MBRK deem appropriate, including but not limited to DD's a) eSampling Platform, b) eLearning / eDetailing, c) Educational Email, d) Direct-to-Physician Bulletin Services, e) Physician Portal Promotions, f) Patient Portal Promotions, g) Direct Mail Advertising, h) Coupon Promotions, i) Consumer Condition Content, j) Search Engine Marketing and k) Mini Web Site Promotions where appropriate and with prior written approval from MBRK. MBRK shall have final approval as to the promotion solutions utilized by DD in the promotion of MOXATAG and DD will not deploy any promotion solution without such approval from MBRK. Such promotion solutions are as listed in EXHIBIT 4. In the event that the Parties mutually agree on the provision of additional services beyond those listed in EXHIBIT 4, such additional promotional solutions shall be approved by MBRK and additional Appendices numbered sequentially (1, 2, 3, 4 etc.) setting forth in detail the additional services shall be duly signed by authorized representatives of the Parties and attached to EXHIBIT 4 and incorporated herein. The services contained in EXHIBIT 4 and any related modifications thereto represent those services that are reasonably necessary to accomplish the promotion of MOXATAG. No services shall be provided by DD, or paid for by MBRK, except as agreed to in writing by the Parties. + +3.2. Notwithstanding any other provision of this Agreement, all Promotional Materials relating to MOXATAG that will be utilized by DD, as well as the use and placement of such Promotional Materials, are subject to written approval by MBRK prior to such use. DD agrees to provide draft and final versions of all Promotional Materials to MBRK for MBRK's review and approval prior to DD's use of such Promotional Materials, provided such materials are developed or modified by DD. MBRK has the authority to perform the final review of all Promotional Materials developed by DD. All Promotional Materials are subject to MBRK's legal, medical and regulatory review and approval process. DD agrees to make all the necessary changes and/or modifications requested by MBRK. DD shall not use Promotional Materials for any purpose outside of this Agreement without prior written authorization from MBRK. + +3.3. Notwithstanding any other provision of this Agreement, all MOXATAG sample request forms (hereinafter "Sample Request Forms") utilized by DD to document a prescriber's request for MOXATAG samples are subject to written approval by MBRK. DD agrees to provide draft and final versions of all Sample Request Forms to MBRK for MBRK's review and approval prior to DD's use of such Sample Request Forms. MBRK has the authority to perform the final review of all Sample Request Forms developed by DD or used in conjunct. All Sample Request Forms are subject to MBRK's legal, medical and regulatory review and approval process. DD agrees to make all the necessary changes and/or modifications requested by MBRK. DD shall not use Sample Request Forms for any purpose outside of this Agreement without prior written authorization from MBRK. + + + + + + + +3.4. Notwithstanding any other provision of this Agreement, DD shall not offer or provide any item to a DD Target Segment Prescriber, without prior written approval by MBRK. The provision of any items shall be subject to MBRK's legal, medical and regulatory review and approval process. In the event that MBRK authorizes the provision of items of nominal value to a DD Target Segment Prescriber, DD shall track and record the item provided, the associated value, the date of the transaction, and the recipient DD Target Segment Prescriber, including his or her credentials and the state in which he or she is licensed, where possible. + +3.5 DD shall use commercially reasonable efforts to promote MOXATAG to DD Target Segment Prescribers and agrees to efficiently perform the services as described in EXHIBIT 4 in compliance with MBRK's policies and procedures, and all applicable federal and state laws and regulations, including, without limitation, federal and state anti-kickback statutes, regulations contained in 21 CFR (Code of Federal Regulations) as they pertain to promotional activity of an FDA-approved pharmaceutical product and the US Department of Health and Human Services Office of Inspector General's ("OIG") Compliance Program Guidance for Pharmaceutical Manufacturers (2003). DD agrees that it shall not directly or indirectly offer, pay or transfer anything of value, in cash or in-kind, to induce DD Target Segment Prescribers to purchase, order, or recommend MOXATAG, nor shall DD exert undue influence on the medical decision-making of DD Target Segment Prescribers. + +3.6. Both Parties agree to assign sufficient resources and personnel to discharge their respective responsibilities under this Agreement in a timely manner and at all times operating using a professional standard of work as consistent with industry standards. + +3.7. DD shall select and shall have full and complete control of and responsibility for all actions of its agents, affiliates, officers, directors, employees or subcontractors (hereinafter "Representatives") and none of DD's Representatives are, or shall be deemed to be, the Representatives of MBRK for any purpose whatsoever by virtue of this Agreement. MBRK has no duty, liability or responsibility of any kind, to or for the acts or omissions of DD or any of DD's Representatives. DD hereby acknowledges and agrees that DD shall cause each of DD's Representatives who participate in rendering the services to comply with the terms of this Agreement. DD hereby acknowledges and agrees that DD is responsible for the failure of any of DD's Representatives to comply with the terms of this Agreement. + +3.8. DD shall be responsible for obtaining the necessary contracts and releases with or from all parties whose names, likenesses, testimonials, scripts, musical compositions or similar materials, assets or rights are used in MBRK's advertising, promotional, publicity or other materials prepared and produced by DD under this Agreement, except where MBRK undertakes to be responsible for obtaining the same. Notwithstanding the foregoing, without the prior written consent of MBRK, DD is not authorized hereunder or otherwise to enter into any contract or agreement in respect of the foregoing with a third party if such contract or agreement, directly or indirectly, imposes any obligations on MBRK. + +3.9. All records maintained by DD pertaining to DD's services to MBRK pursuant to this Agreement shall be provided to MBRK within 48 hours of MBRK's request. DD shall also make its records and other documents relevant to MBRK and this Agreement available for audit or review by MBRK upon MBRK's request at a mutually agreed upon time. Upon termination or expiration of this Agreement, if specifically requested by MBRK, DD shall provide originals or copies of such records to MBRK. + + + + + + + +Section 4 — Costs to Deliver DD Promotion + +All costs incurred by DD to deploy its services to promote MOXATAG to DD Target Segment Prescribers will be the responsibility of DD, except as provided in Section 6. + +Section 5 — Up-Front Payment, Deposit and Promotion Fees + +5.1. MBRK will pay DD an Up-Front Payment of $50,000 upon execution of this Agreement. + +5.2. Additionally, MBRK shall pay a Deposit to DD equal to $100,000 upon the Promotion Commencement Date. Each month the Parties will review the amount of the Deposit and where necessary MBRK will make an additional deposit payment to DD in order to maintain a total Deposit with DD of at least two (2) times the current month's Promotion Fees. For example, if in a month Promotion Fees are $105,000, then MBRK will increase the Deposit to two (2) times $105,000, equal to $210,000. The Parties agree to meet via conference call within five (5) business days of the end of each month to determine the necessary adjustment, if any, to the Deposit. If it is determined that the Deposit must be increased, within ten (10) business days of the date upon which the new Deposit is determined, MBRK shall send to DD the funds necessary to increase the Deposit. Notwithstanding the above, if during years 2 and 3 of this Agreement, in the event MBRK's then current annual form 10-K filed with the SEC does not contain an audit opinion that expresses doubt about MBRK's ability to continue as a going concern, then MBRK's requirement to maintain a Deposit is waived. In all cases the Deposit amount will be used to settle any outstanding amounts due to DD by MBRK at the end of the Agreement or at the time the Deposit requirement is waived. + +5.3. Additionally, on or before the last day of each month, DD will invoice MBRK for the Promotion Fees due for the prior month. Such Promotion Fees shall be calculated by: + +(a) the following formula for the period from the Effective Date through September 30, 2010: + +For example: if during the month of March 2010 (a) (A) above was 2,000 TRx and (B) above was $36.50 then MBRK would be remit $36,500.00 to DD. + +OR + +(b) the following formula for the period from October 1, 2010 through termination of this Agreement: + + (A) the Actual DD Target Segment MOXATAG TRx for the Promotional Measurement Period multiplied by: (B) the applicable Gross Margin Per TRx multiplied by: (C) 50%. + + (A) the Actual DD Target Segment MOXATAG TRx Tablets for the Promotional Measurement Period multiplied by: (B) the applicable Gross Margin Per Tablet multiplied by: (C) 50%. + + + + + + + +For example: if during the month of November 2010: + +MBRK would remit $89,425.00 to DD: + +These Promotion Fees represent fair market value payment for such services rendered. + +The Parties recognize that Promotion Fees are to be settled on a monthly basis which requires the use of an estimated Gross Margin Per Tablet amount until the actual Gross Margin Per Tablet for an applicable quarter can be determined. Accordingly, to facilitate the calculation and settlement of monthly Promotion Fees for periods after September 2010, the Parties agree that the Gross Margin Per Tablet used to settle the monthly Promotion Fees will be that as calculated using the previous calendar quarter's Gross Margin Per Tablet data and current period's Actual DD Target Segment MOXATAG TRx. Such Promotion Fees for the three months in any calendar quarter will be subject to a true-up process which will occur by the 15th of the second month of the following quarter. By way of example, Promotion Fees for each of the months of April, May and June will be settled using the Gross Margin Per Tablet amount that has been calculated for the quarter ended March 31 and will be subject to a true-up process to occur by August 15 with any adjustment to such Promotion Fees being settled between the parties within 15 days thereafter. + +5.4 In the event MBRK shall discontinue detailing prescribers in a territory that is not included in the then current DD Target Segment Prescribers set forth in EXHIBIT 1 to this Agreement or any amendments thereto ("New DD Target Segment Prescribers"), the Parties shall negotiate in good faith the Promotion Fee payable to DD should MBRK desire that DD add those New DD Target Segment Prescribers to the DD Target Segment Prescribers. + +5.5. The Promotion Fees shall be paid to DD by MBRK fifteen (15) days after the receipt of an invoice from DD by MBRK. + +5. 6. The basis for determining the Promotion Fees will be the Prescriber Data provided by MBRK to DD. + +5.7. DD agrees to submit invoices to MBRK at the following address: + +Attn: Accounts Payable MiddleBrook Pharmaceuticals, Inc. 7 Village Circle, Suite 100 Westlake, TX 76262 + + (A)= Actual DD Target Segment MOXATAG TRx (5,000) x an average tablet amount for the month of (9.8 tablets)= 49,000 (B)= 3.65 (C)= 50% + + + + + + + +Section 6 — Obligations of MBRK + +6.1. Subject to the terms of confidentiality set forth in Section 10, MBRK agrees to make available to DD to the best of its ability the items as stipulated in EXHIBIT 2. These items include the relevant portions of its marketing and communications plan, approved sales promotion materials in electronic format where available, sales and training aids relevant to MOXATAG and promotional items and packages for appropriate licensed physicians, nurses, nurse practitioners and physician assistants. Additionally, MBRK or its authorized designee shall be responsible for the provision of MOXATAG samples in response to a prescriber's request as documented on a Sample Request Form and MBRK or its authorized vendor shall be solely responsible for sample fulfillment in quantities agreed to by MBRK. At no time shall DD take physical possession of or title to MOXATAG samples. + +6.2. Notwithstanding any other provision of this Agreement, MBRK shall have the sole right and authority and in its sole discretion shall take any actions that it deems appropriate with respect to MOXATAG as would normally be done in accordance with accepted business practices and federal and state legal requirements to maintain the authorization and/or ability to market MOXATAG in the US, including, without limitation, the following: + +(a) manufacturing, storage, and distribution of MOXATAG trade and sample product; (b) the scope and strategies with respect to the marketing and promotion of MOXATAG, including, without limitation, any labeling or claims in connection therewith; (c) booking sales and distribution of MOXATAG hereunder and performance of related services; (d) handling all aspects of order processing, invoicing and collection, inventory and receivables; (e) providing customer support, including handling medical queries, and performing other functions consistent with consumer practice for prescription pharmaceuticals; (f) responding to product and medical complaints relating to MOXATAG; (g) handling all returns of MOXATAG trade and sample product; (h) handling all voluntary recalls and market withdrawals of MOXATAG. In such a situation, DD will make available to MBRK, upon request, all of DD's pertinent records on MOXATAG. Any and all reasonable and documented costs and expenses incurred by DD in the conduct of any such recall or market withdrawal of MOXATAG shall be reimbursed by MBRK, except to the extent such recall or market withdrawal was the direct result of the negligence or failure of DD to comply with its obligations under this Agreement; (i) communicating with any governmental agencies and satisfying their requirements regarding all regulatory approvals of MOXATAG; including the filing of marketing and promotion materials approved by MBRK under this Agreement with the FDA in compliance with all FDA pharmaceutical marketing regulations; (j) reporting adverse reaction reports to US regulatory authorities as required by applicable US law or regulation; + + + + + + + +6.3 Notwithstanding any other provision herein to the contrary, MBRK shall have the sole right and responsibility for establishing and modifying the terms and conditions with respect to the sale of MOXATAG, including, without limitation, the price at which MOXATAG will be sold, any discounts attributable to payments on receivables and distribution of MOXATAG. + +6.4. MBRK shall be responsible for the costs of obtaining, tracking, processing, formatting and reporting Prescriber Data. + +6.5. The Cost of Samples Amount and the Cost of Coupon Redemption Amount shall be paid by MBRK. + +Section 7 — Independent Contractor + +In the performance of DD's obligations under this Agreement, DD shall at all times act as and be deemed an independent contractor. Nothing in this Agreement shall be construed to render DD or any of its employees, agents, or officers, an employee, joint venturer, agent, or partner of MBRK. As an independent contractor, DD fees and expenses are limited to those expressly stated in this Agreement. DD is not authorized to assume or create any obligations or responsibilities, express or implied, on behalf of or in the name of MBRK, except as specifically defined herein. It is understood that the employees, methods, facilities, and equipment of DD shall at all times be under DD's exclusive direction and control. DD shall not participate in MBRK's fringe benefit plans or any other compensation or benefit plans MBRK maintains for its own employees. + +Section 8 — Representations and Warranties + +8.1. MBRK represents and warrants that it has the rights and authorizations required by federal and state agencies, including but not limited to the FDA granting it the right to market MOXATAG in the US. + +8.2. Each Party represents and warrants that it shall comply in all material respects with any and all applicable federal, state, and local laws and regulations and industry guidances and standards applicable to the conduct of business and the execution of any and all marketing and promotional services or activities pursuant to this Agreement, including but not limited to: the federal anti-kickback statute, 42 U.S.C. § 1320a-7b(b); federal Food, Drug and Cosmetic Act and relevant regulations; FDA promotional guidelines; FDA's Guidance on Industry-Supported Scientific and Educational Activities (1997); US Department of Health and Human Services OIG Compliance Program Guidance for Pharmaceutical Manufacturers (2003); the Pharmaceutical Research and Manufacturers of America ("PhRMA") Code on Interactions With Healthcare Professionals; and ethics opinions of the American Medical Association ("AMA"). + +(k) reporting significant losses and thefts of MOXATAG to the appropriate state and federal regulatory authorities, as required. In such a situation, DD will make available to MBRK, upon request, all of DD's pertinent records on MOXATAG. Any and all reasonable and documented costs and expenses incurred by DD in the conduct of such activities shall be reimbursed by MBRK, except to the extent such reporting obligations were the direct result of the negligence or failure of DD to comply with its obligations under this Agreement; and + +(l) negotiating any and all agreements with managed care organizations, payers, wholesalers, group purchasing organizations, and the like, regarding MOXATAG. + + + + + + + +8.3. Each Party represents and warrants that it shall comply with any and all applicable federal, state, and local laws and regulations related to the request and receipt of MOXATAG samples, including, but not limited to, the Prescription Drug Marketing Act of 1987 ("PDMA") of 1987, as amended, and the regulations promulgated thereunder. + +8.4. Each Party represents and warrants that it shall comply with any and all applicable federal, state, and local laws and regulations including, but not limited to, health, safety and security rules and regulations and all privacy laws and regulations, including but not limited to applicable state privacy laws and regulations and the privacy requirements set forth in the Health Insurance Portability and Accountability Act (HIPAA). + +8.5. DD represents and warrants that (i) it shall comply with all applicable MBRK policies and procedures, including MBRK policies governing interactions with physicians and other Medical Professionals; and (ii) it has the specific industry knowledge, experience and expertise to perform all of its obligations hereunder in good faith and to industry standards. + +8.6. DD represents and warrants that neither DD nor, to DD's knowledge, any person DD employs in connection with the services to be performed under this Agreement (i) have been debarred, suspended, proposed for debarment, declared ineligible or voluntarily excluded from participation in this transaction by any federal or state law, regulation, or action including, but not limited to, 21 U.S.C. § 335(a) and (b); (ii) have been convicted of a criminal offense related to healthcare; and (iii) have been listed by a federal department or agency as debarred, excluded, or otherwise ineligible for participation in federal healthcare programs as set forth in 42 U.S.C. § 1320a-7, or any similar state law or regulation. DD shall notify MBRK in writing immediately if it or any person it employs in connection with this Agreement or any obligations performed hereunder, including any of its employees or other representatives or member of its senior management, is debarred, is in the process of being debarred, , or if any action, suit, claim, investigation, or legal or administrative proceeding is pending or is threatened, relating to the debarment or conviction of DD or any person it employs in connection with this Agreement or any obligations performed hereunder. + +Section 9 — Indemnification + +9.1. DD shall indemnify and hold MBRK and its Representatives harmless from and against any and all claims, losses, demands, causes of action, and any and all related costs and expenses including, but not limited to reasonable attorneys' fees, costs, and expenses, incurred by them in connection with any claim, suit or proceeding (hereinafter "Legal Claims"), arising out of or in connection with: (1) any negligent or willful act or omission or error of DD, or any of its Representatives, to the extent such Legal Claim does not arise from the negligent or willful act or omission of MBRK or any of its Representatives; (2) any violation by DD, or any of its Representatives of any law, statute, ordinance or regulation; (3) any breach by DD of any of its representations, warranties or obligations under this Agreement; or (4) statements or representations by DD, or its Representatives, that are contrary to the MOXATAG Labeling or the approved Promotional Materials and/or outside the FDA-approved indication(s) for MOXATAG. + + + + + + + +9.2. DD warrants that any Promotional Materials developed by DD or its Representatives under this Agreement, do not infringe, misappropriate or otherwise violate any Intellectual Property Rights of any third party, and agrees to protect, indemnify and hold harmless MBRK and its Representatives against any and all claims, losses, demands, causes of action, and any and all related costs and expenses including, but not limited to reasonable attorneys' fees, costs, and expenses, incurred by them in connection with any assertion for such infringement, misappropriation or breach. + +9.3. DD warrants that any promotional services rendered by DD or its Representatives under this Agreement, do not infringe, misappropriate or otherwise violate any Intellectual Property Rights of any third party, and agrees to protect, indemnify and hold harmless MBRK and its Representatives against any and all claims, losses, demands, causes of action, and any and all related costs and expenses including, but not limited to reasonable attorneys' fees, costs, and expenses, incurred by them in connection with any assertion for such infringement, misappropriation or breach. + +9.4. MBRK warrants that MOXATAG does not infringe, misappropriate or otherwise violate any Intellectual Property Rights of any third party, and agrees to indemnify and hold harmless DD and its Representatives against any and all claims, losses, demands, causes of action, and any and all related costs and expenses including, but not limited to reasonable attorneys' fees, costs, and expenses, incurred by them in connection with any assertion for such infringement, misappropriation or breach. + +9.5. MBRK shall indemnify and hold DD harmless from and against any damages, loss or expenses, including reasonable attorneys' fees, DD may sustain or incur as the result of any Legal Claims made, brought, or threatened against DD, arising out of: (1) any negligent or willful act or omission of MBRK, or any of its Representatives, to the extent that such Legal Claim does not arise from the negligent or willful act or omission of DD, or any of its Representatives; (2) any adverse events relating to the use of MBRK products; (3) assertions made in Promotional Materials, provided MBRK approved such Promotional Materials prior to implementation, including those that DD prepared for MBRK, and there are no deviations in such Promotional Material from the time MBRK provides DD with approval of such Promotional Material to the time that such Promotional Material is produced, printed and/or distributed by DD or on behalf of DD or MBRK; or (4) any breach by MBRK of any of its representations, warranties or obligations under this Agreement. + +9.6. A party seeking indemnification hereunder (an "indemnified party") shall promptly notify the other party (the "indemnifying party") of any claim for which it intends to seek indemnification pursuant to this Section 9 (an "Indemnified Claim") , upon becoming aware thereof, shall permit the indemnifying party at the indemnifying party's cost to defend against such Indemnified Claim and to control the defense and disposition (including, without limitation, all decisions to litigate, settle subject to the settlement conditions set forth below, or appeal) of such Indemnified Claim and shall cooperate in the defense thereof. The indemnified party may, at its option and expense, have its own counsel participate in any such proceeding and shall cooperate with the indemnifying party and its insurer in the disposition of any such matter. Except with the prior consent of the indemnified party, which consent shall not be unreasonably withheld or delayed, the indemnifying party may not enter into any settlement of any Indemnified Claim unless such settlement includes an unqualified release of the indemnified party. + +9.7. The provisions of this Section 9 shall survive the termination of this Agreement. + + + + + + + +9.8. NOTWITHSTANDING THE FOREGOING, NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY, UNDER ANY LEGAL OR EQUITABLE THEORY, FOR ANY INCIDENTAL, SPECIAL OR INDIRECT DAMAGES OF ANY KIND, SUFFERED BY OR OTHERWISE COMPENSABLE TO SUCH OTHER PARTY, ARISING OUT OF, UNDER OR RELATING TO THIS AGREEMENT, WHETHER OR NOT ADVISED OF THE POSSIBILITY OF SUCH. + +Section 10 —Confidentiality + +Both Parties agree to be bound by the Confidentiality Agreement executed by DD and MBRK on December 8, 2009, and which is incorporated by reference as part of this Agreement. + +Section 11 — Intellectual Property + +11.1. All materials (including Promotional Materials), documents, information, descriptions and suggestions of every kind supplied to DD by MBRK or any other affiliate of MBRK in connection with and/or pursuant to this Agreement or relationship established between DD and MBRK (including, without limitation, any such materials (including Promotional Materials), documents, information, descriptions and suggestions supplied to DD by MBRK prior to the execution of this Agreement) shall be the sole and exclusive property of MBRK and MBRK shall have the right to make whatever use it deems desirable of any such materials, documents, information, descriptions and suggestions. Upon termination or expiration of this Agreement, DD shall promptly return such items, including all copies thereof, to MBRK or dispose of such items as directed by MBRK. + +11.2. DD agrees that any Intellectual Property Rights associated with Promotional Materials developed under this Agreement shall be the exclusive property of MBRK. + +11.3. Prior to presentation to MBRK of any work or work product produced by DD pursuant to this Agreement, DD, at its own expense, shall insure that all such work or work product does not violate or infringe upon the Intellectual Property Rights of any third party. + +11.4. All trademarks, service marks or logos developed under this Agreement shall be the exclusive property of MBRK. + +11.5. DD will not have the right to use the name of MBRK, MOXATAG, or MBRK's trademarks, service marks, logos, or other similar marks in any manner except with the prior written approval of MBRK; provided that the foregoing shall not prohibit DD's use of MBRK's names or marks in connection with the performance of the services in a manner consistent with this Agreement. Nothing in this Agreement shall be construed to assign or license any rights to DD. + +Section 12 — Assignment of Work Product + +12.1. For good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, DD hereby sells, assigns and transfers to MBRK and MBRK shall be the exclusive owner, assignee, and transferee of the entire right, title and interest, including all renewals for the entire world, in and to all work performed and work product developed or produced under this Agreement, including, but not limited to, materials (including Promotional Materials), writings, documents or other information conceived or reduced to practice or + + + + + + + +authored by DD or any of DD Representative's, either solely or jointly with others, in connection with and/or pursuant to this Agreement or the relationship established between DD and MBRK or with information, materials (including Promotional Materials) or facilities of MBRK received or used by DD or DD's Representatives during the period in which DD is retained by MBRK. + +12.2. In the event DD retains the service of a third party to perform any of DD's obligations hereunder DD shall, prior to commencement of any work by such third party, obtain the third party's written acknowledgement that all work done by such third party shall be deemed "work made for hire" and that the copyright in such material shall rest and remain with MBRK, or secure from such third party written assignment of all right, title and interest in and to the copyright in any material created by such third party. + +Section 13 — Governing Law / Choice of Forum + +The Parties agree that the venue for any action, injunctive application or dispute determinable by a court of law arising out of this Agreement and that this Agreement shall be governed by and construed and enforced in accordance with the laws of the State of North Carolina, without giving effect to choice of law or arbitration provisions, and that the federal and state courts therein shall have jurisdiction over the subject matter and the Parties. + +Section 14 — Survival of Certain Provisions + +The terms, provisions, representations, and warranties contained in Sections 3.7, 3.9, 9, 10, 11, 12, and 13 of this Agreement by their terms are intended to survive the performance thereof by either party or both Parties hereunder shall so survive the completion of performance, expiration, termination or cancellation of this Agreement. + +Section 15 — Entire Agreement / Amendments + +This Agreement, together with any exhibits and attachments hereto and any orders issued hereunder, constitutes the entire agreement between the Parties hereto and shall supersede and take the place of any and all agreements, documents, minutes of meetings or letters concerning the subject matter hereof that may, prior to the Effective Date, be in existence. Furthermore, this Agreement shall supersede any and all pre-printed terms on any orders, invoices, and other related documents and any and all orders issued by DD. This Agreement may only be amended by a statement in writing to that effect signed by duly authorized representatives of MBRK and DD. + +Section 16 — Severability + +If any provision of this Agreement is found invalid or unenforceable by a court of competent jurisdiction, the remainder of this Agreement shall continue in full force and effect. The Parties shall negotiate in good faith to substitute a valid, legal, and enforceable provision that reflects the intent of such invalid or unenforceable provision. + + + + + + + +Section 17 — Non Waiver + +Either party's failure to enforce any of the terms or conditions herein or to exercise any right or privilege, or either party's waiver of any breach under this Agreement shall not be construed to be a waiver of any other terms, conditions, or privileges, whether of a similar or different type. + +Section 18 — Termination and Fees + +This Agreement may be terminated as follows: + +(a) Either party hereto shall have the right to terminate this Agreement after thirty (30) days written notice to the other in the event the other is in breach of this Agreement unless the breaching party cures the breach before the expiration of such period of time. Each such notice shall set forth in reasonable detail the specifics of the breach. + +(b) Either party shall have the right to terminate this Agreement effective upon written notice to the other party in the event the non-notifying party becomes insolvent or makes an assignment for the benefit of creditors, or in the event bankruptcy or insolvency proceedings are instituted against the non-notifying party or on the non-notifying party's behalf. + +(c) Either party shall have the right to terminate this Agreement as per Section 19 below. + +(d) MBRK may terminate this Agreement upon 60 days notice for a Change of Control subject to the Fees outlined in paragraph (f) of this Section 18. + +(e) Upon the termination or expiration of this Agreement, all obligations and rights of both MBRK and DD hereunder shall terminate, except all obligations and rights (i) to make or receive payments becoming due prior to the date of termination or expiration, (ii) to pay or receive payments for any damages from any breach of the Agreement and (iii) otherwise provided in Section 14 of this Agreement. In addition to the foregoing, upon termination or expiration of this Agreement for any reason, each party shall continue to maintain accurate records necessary to demonstrate compliance with applicable laws, regulations and guidelines, including, without limitation, records relating to MOXATAG promotion to DD Target Segment Prescribers. + +(f) Termination for Change of Control and Fees — If MBRK terminates this Agreement in the first year of the Agreement for any reason, then MBRK will pay DD a) an Early Termination Fee plus b) the End of Agreement Fee. If MBRK terminates the Agreement in years 2 or 3 prior to the period 60 days before the anniversary date, then MBRK will pay DD only the Early Termination Fee. If the Agreement is terminated in years 2 or 3 by MBRK providing notice to DD within 60 days of the then current anniversary date of its intent not to renew, then MBRK will pay DD the End of Agreement Fee but no Early Termination Fee. + +Section 19 — Force Majeure + +Each party shall be excused from liability for the failure or delay in performance of any obligation under this Agreement by reason of any extraordinary, unexpected and/or unavoidable event, such as acts of God, fire, flood, explosion, earthquake, or other natural forces, war, civil unrest, accident, destruction or other casualty, any lack or failure of transportation facilities, any lack or + + + + + + + +failure of supply of raw materials, any strike or labor disturbance, or any other event similar to those enumerated above. Such excuse from liability shall be effective only to the extent and duration of the event(s) causing the failure or delay in performance and provided that the party has not caused such event(s) to occur. Notice by the failing party of such party's failure or delay in performance due to force majeure must be given to the other party within ten (10) calendar days after its occurrence. All delivery dates under this Agreement that have been affected by force majeure shall be tolled for the duration of such force majeure. In no event shall any party be required to prevent or settle any labor disturbance or dispute. Notwithstanding the foregoing and except as otherwise provided in Section 18 above with respect to MBRK's right to terminate this Agreement in the event that there is an inability to manufacture MOXATAG due to force majeure events, should the event(s) of force majeure suffered by a party extend beyond a ninety (90) day period, the other party may then terminate this Agreement by written notice to the non-performing party. + +Section 20 — Notices + +All notices or other communications, which are required or permitted hereunder shall be in writing and sufficient if delivered personally, sent by overnight courier with tracking capabilities, sent by first-class, registered or certified mail or sent by confirmed facsimile transmission. + +If notices to DD, to: + +Jay Grobowsky CEO DoctorDirectory.com, Inc. One Page Avenue, Suite 280 Asheville, NC 28801 Telephone: 888-796-4491 ext.101 Facsimile: 828-255-0442 + +If notices to MBRK, to: + +John Thievon CEO MiddleBrook Pharmaceuticals, Inc. 7 Village Circle — Suite 100 Westlake, TX 76206 Telephone: 817-837-1200 Facsimile: 817-582-0410 + +With copy to: + +Brad Cole General Counsel MiddleBrook Pharmaceuticals, Inc. 7 Village Circle — Suite 100 Westlake, TX 76206 Telephone: 817-837-1215 Facsimile: 817-582-0400 + + + + + + + +Section 21 — Disputes/Arbitration + +21.1. In the event of any controversy or claim arising from or relating to any provision of this Agreement, or any term or condition hereof, or the performance by a party of its obligations hereunder, or its construction or its actual or alleged breach, the Parties will try to settle their differences amicably between themselves in negotiations between the Parties' respective Presidents or their executive level designees. If the dispute has not been resolved to the mutual satisfaction of the Parties within sixty (60) days after delivery of written notice of such dispute, either party may request binding arbitration. + +21.2. Any dispute which is not resolved by executive level negotiations will be settled by final and binding arbitration before a single arbitrator in Asheville, NC and such arbitration will be conducted pursuant to then current rules of arbitration of commercial disputes of the American Arbitration Association. Judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. The prevailing party shall be entitled to recover from the losing party reasonable attorney's fees, expenses and costs. In no event will the arbitrator have any right or power to award punitive or exemplary damages. + +Section 22 — Assignment/Change of Control + +This Agreement shall bind the Parties hereto and their successors and assigns, provided that neither party shall have the right to assign this Agreement or any part thereof to a third party without the prior written consent of the other party, however such consent will not be unreasonably withheld. + +[Signature Page to Follow] + + + + + + + +IN WITNESS WHEREOF, the Parties hereto, each by a duly authorized representative, have executed this Agreement as of the date first written above. + +[Signature Page to Promotion Agreement] + + DoctorDirectory.com, Inc. MiddleBrook Pharmaceuticals, Inc. By: /s/ Jay Grobowsky By: /s/ John Thievon + + Name: Jay Grobowsky Name: John Thievon Title: CEO Title: President & CEO Date: February 3, 2010 Date: February 3, 2010 + + + + + + + +EXHIBIT 1 + +TO AGREEMENT BETWEEN DOCTORDIRECTORY.COM, INC. AND MBRK PHARMACEUTICALS, INC. DATED FEBRUARY 3, 2010 + +DD TARGET SEGMENT PRESCRIBERS + +The Parties agree that the list of DD Target Segment Prescribers (hereinafter, "DD Target List") will be provided to MBRK by DD. MBRK shall have final approval of the DD Target List. MBRK receipt and approval of the DD Target List shall be documented in writing by the Parties. DD Target Segment Prescribers shall consist of only those licensed prescribers whose clinical practice is consistent with MOXATAG's approved labeling, uses, and indication. + +It is anticipated that the DD Target List may exclude at MBRK's discretion, those prescribers that MBRK includes it its called upon healthcare practitioners, telemarketing program and as communicated to DD prior to the DD Target List being approved by MBRK. Any subsequent modifications to the DD Target List will be as approved in writing by the Parties. + + + + + + + +EXHIBIT 2 + +TO AGREEMENT BETWEEN DOCTORDIRECTORY.COM, INC. AND MBRK PHARMACEUTICALS, INC. DATED FEBRUARY 3, 2010 + +MBRK DELIVERABLES + +MBRK agrees to provide DD, to the best of its ability, with the following: + +The Cost of Samples Amount and the Cost of Coupon Amount shall be at the expense of MBRK. + + • Relevant portions of its MOXATAG marketing and communications plan, • MBRK-approved MOXATAG sales promotion materials in electronic format where available, • MOXATAG sales and training aids, including any eDetailing web site or relevant product materials, • All applicable MBRK policies and procedures that MBRK requires DD to comply with, including MBRK policies governing interactions with physicians and other Medical Professionals, • Analysis where available regarding promotion effectiveness of prior promotions, • Any available market research concerning MOXATAG, • Direct mail collateral pieces as shall be used from time to time by MBRK to promote MOXATAG to DD Target Segment Prescribers, • Timely review and approval of DD provided draft promotion material for use by DD, • The availability of MOXATAG Coupons and MOXATAG samples and the related fulfillment services as agreed to in advance by MBRK, • Monthly reporting, detailed by prescriber of redemption of MOXATAG Coupons, and • Monthly and quarterly attendance at status meetings, as appropriate, which may be via telephone, web based meeting/portal or face to face. + + + + + + + +EXHIBIT 3 + +TO AGREEMENT BETWEEN DOCTORDIRECTORY.COM, INC. AND MBRK PHARMACEUTICALS, INC. DATED FEBRUARY 3, 2010 + +PRESCRIBER DATA + +For purposes of this Agreement, Prescriber Data will be the prescription data for the activity within the U.S. for the USC Level 2 #15151 — Aminopenicillins category, in sufficient detail to identify periodic prescribing activity of MOXATAG. Such prescriber activity will be the basis for DD to calculate the Promotion Fees due as per Section 5 for the applicable Promotion Measurement Period. + + + + + + + +EXHIBIT 4 + +TO AGREEMENT BETWEEN DOCTORDIRECTORY.COM, INC. AND MBRK PHARMACEUTICALS, INC. DATED FEBRUARY 3, 2010 + +PROMOTION SOLUTIONS + +DD will provide promotional solutions to promote MOXATAG to DD Target Segment Prescribers as approved by MBRK. These services may include the following: + +eSampling Platform — DD has created an eSampling platform that provides eligible prescribers with a virtual sample closet. Eligible prescribers will be determined through an analysis of prescribers selected from the DD Target Segment. Only those prescribers who possess a valid state license to prescribe MOXATAG and practice in a clinical area consistent with MOXATAG's approved labeling will be eligible to receive MOXATAG samples. This closet will provide a vehicle for these prescribers to order MOXATAG samples utilizing business rules created by MBRK. DD will promote the availability of samples to agreed upon prescribers and all fulfillment of samples will be conducted by MBRK's designated sample fulfillment provider in accordance with MBRK policies and procedures. + +eLearning/eDetailing — DD may create an interactive learning platform that includes content of both an educational and promotional nature. All content would be consistent with MOXATAG's approved labeling and product positioning. The use of quizzes and interactive case presentations will be created to educate prescribers and promote interest in the eLearning platform. DD will link and/or incorporate a MOXATAG eDetail into the learning platform, if available. DD will attempt to use existing approved content for inclusion into the learning platform to expedite the MBRK approval process. All content will be as approved by MBRK. + +Educational Email — DD's philosophy is to use science to support the promotion of MOXATAG. Therefore, the promotional program could include a series of educational messages that focus on clinical results and studies. These messages may be non-branded or partially branded depending on the nature of the content and shall be consistent with MOXATAG's approved labeling. New educational messages may be created and added as a result of ongoing understanding of prescribers' attitudes and perceptions. All content shall be approved by MBRK. + +Direct-to-Physician Bulletin Services — Promotional emails may be used to communicate the primary, secondary and tertiary messages to the appropriate DD Target Segment Prescribers. The appropriate interval and frequency of messaging needed to ensure high response rates and interest level will be determined in consultation with MBRK. + + + + + + + +Promotional emails generally include one or more "calls-to-action" such as online sample offers, clinical data reprint offers, and links to product website, eLearning Platform and/or a product eDetail, if available. Promotional emails shall comply with the CAN-SPAM Act of 2003 (15 U.S.C. 7701 et. seq.). + +Physician Portal Promotions — DD may place MOXATAG-specific promotion in the DD Professional site within www.DoctorDirectory.com. Prescribers are required to logon or use an existing electronic communication to enter the site, which allows DD to target specific promotion to those prescribers whose practice area is consistent with MOXATAG's approved labeling. Promotion is in the form of rotating/flash tile ads and text links within the appropriate disease-state education and MOXATAG sample content areas. All Promotional Materials and their respective placement shall be approved by MBRK. + +Patient Portal Promotions — Where appropriate, DD may place standard banner ads on the DD website www.DoctorDirectory.com that can be made visible to patients researching physicians. The site can accommodate static and flash banners and business rules developed in conjunction with MBRK guide the number of ads served based upon the number of banner ads within the Directory. In addition to the Directory's landing page, banners can be also served within the appropriate prescriber search and return pages. Such banner ads will be linked only to those prescribers whose practice area is consistent with MOXATAG's approved labeling. All banner ads and their respective placement shall be approved by MBRK. + +Direct Mail Advertising — DD may use print mail to reach selected DD Target Segment Prescribers. Existing mail creative concepts may be used or if needed, DD may create new mail concepts in concert with and as approved by MBRK. At MiddleBrook's request, all direct mail advertising will include an opt-out option for recipient prescribers. + +Coupon Promotions — DD may deploy a program to promote and distribute Coupons to appropriate targets as determined by both DD and the MBRK. Coupons can be made available via email promotion, print mail, site promotion, and within the online sample closet. All coupon promotion will be as approved by MBRK and shall not be valid for purchases that are reimbursed in whole or in part by Medicare, Medicaid, or similar federal and state programs), or for residents of Massachusetts if the purchase is reimbursed by a health care insurer. + +Consumer Condition Content — DD may create pages of static disease and condition information consistent with MOXATAG's approved labeling that are appropriate for consumers. Pages may include PDF documents for printing of approved content such as "take along" pieces for patient office visits. All content will be as approved by MBRK. + +Search Engine Marketing — DD may explore the use of specific search terms and phrases that can be used to promote the product website and/or eLearning platform. Search terms shall be consistent with MOXATAG's approved labeling. All search terms and "sponsored link" content will be as approved by MBRK. + +Web Mini Site Promotion — DD may develop and deploy content rich "mini sites" that consist of static content but offer additional web properties in which to promote MOXATAG. Such mini sites may also be deployed as part of a search engine strategy as small content rich sites generally score well within search engine algorithms and place high within the natural return list. All content will be as approved by MBRK. + +DD will not deploy any promotional service relating to MOXATAG without prior written approval from MBRK. All related Promotional Materials and associated content, as well as the use and placement of such Promotional Materials, are subject to MBRK's legal, medical and regulatory review and approval process. \ No newline at end of file diff --git a/full_contract_txt/MJBIOTECH,INC_12_06_2018-EX-99.01-JOINT VENTURE AGREEMENT.txt b/full_contract_txt/MJBIOTECH,INC_12_06_2018-EX-99.01-JOINT VENTURE AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..e2d3ef6996ff30b73e7dc6d67866c12c4a053383 --- /dev/null +++ b/full_contract_txt/MJBIOTECH,INC_12_06_2018-EX-99.01-JOINT VENTURE AGREEMENT.txt @@ -0,0 +1,547 @@ +Exhibit 99.01 JOINT VENTURE AGREEMENT THIS JOINT VENTURE AGREEMENT (the "Agreement") made and entered into this 27th day of November 2018 (the "Execution Date"), + +BETWEEN: MJ Syndicated, Inc. a Florida Corporation of _______________________________, FL 33436 And + +SIMPLY HERBALS, Nervanah Herbal Medicine Company of _______________________________TN 37660 + +(individually and collectively the Joint Venture Participants "JVP"). + +BACKGROUND: + +The JVP wish to associate themselves in business of Selling a variety of Health- related products. + +This Agreement sets out the terms and conditions that govern the Joint Venture. + +IN CONSIDERATION OF and as a condition of the JVP entering into this Agreement and other valuable consideration, the receipt and sufficiency of which consideration is acknowledged, the parties to this Agreement agree as follows: + +Formation + +By this Agreement the Participants enter into a general Joint Venture (the "Joint Venture") in accordance with the laws of The State of Florida. The rights and obligations of the JVP will be as stated in the applicable legislation of The State of Florida except as otherwise provided in this Agreement. + +Name + +A. + +B. + +1. + + + + + +The firm name of the Joint Venture will be: TBD + +Purpose + +The purpose of the Joint Venture will be: Manufacturing and Selling Health Related products. + +The Joint Venture is a fixed term Joint Venture beginning November 27, 2018 and ending November 30th, 2019 or as otherwise provided in this Agreement. Where the Joint Venture is entered for a fixed term and the Joint Venture continues after the expiration of that term then in the absence of an express new agreement, the rights and duties of the Participants remain the same as they were at the expiration of that term so far as those terms are consistent with a Joint Venture at will. + +Place of Business + +The principal office of the business of the Joint Venture will be located at__________________________, FL 33434 or such other place as the Participants may from time to time designate. + +Capital Contributions + +Each of the Participants will contribute to the capital of the Joint Venture, in cash or property in agreed upon value. All Participants will contribute their respective Contributions as agreed. + +Withdrawal of Capital + +No participant will withdraw any portion of their Contribution without the express written consent of the other Participant. + +Additional Capital + +Capital Contributions may be amended from time to time, according to the requirements of the Joint Venture provided that the interests of the Participants are not affected, except with the unanimous consent of the Participants. No Participant will be required + +2. + +3. + +4. + +5. + +6. + +7. + +8. + + + + + +to make Additional Capital Contributions. Whenever additional capital is determined to be required and an individual Participant is unwilling or unable to meet the additional contribution requirement within a reasonable period, as required by Joint Venture business obligations, remaining Participants may contribute in proportion to their existing Capital Contributions to resolve the amount in default. In such case the allocation of profits or losses among all the Participants will be adjusted to reflect the aggregate change in Capital Contributions by the Participants. + +Any advance of money to the Joint Venture by any Participant in excess of the amounts provided for in th is Agreement or subsequently agreed to as Additional Capital Contribution will be deemed a debt owed by the Joint Venture and not an increase in Capital Contribution of the Participant. This liability will be repaid with interest at rates and times to be determined by a majority of the Participants within the limits of what is required or permitted in the Act. This liability will not entitle the lending Participant to any increased share of the Joint Venture's profits nor to a greater voting power. Such debts may have preference or priority over any other payments to Participants as may be determined by a majority of the Participants. + +Capital Accounts + +An individual capital account (the "Capital Accounts") will be maintained for each Participant and their Initial Capital Contribution will be credited to this account. Any Additional Capital Contributions made by any Participant will be credited to that Participant's individual Capital Account. + +Interest on Capital + +No borrowing charge or loan interest will be due or payable to any Participant on their agreed Capital Contribution inclusive of any agreed Additional Capital Contributions. + +9. + +10. + +11. + + + + + +Financial Decisions + +Decisions regarding the distribution of profits, allocation of losses, and the requirement for Additional Capital Contributions as well as all other financial matters will be decided by a unanimous vote of the Participants. + +Profit and Loss + +Subject to any other provisions of this Agreement, the net profits and losses of the Joint Venture, for both accounting and tax purposes, will accrue to and be borne by the Participants in proportion to the Participants' Capital Contributions inclusive of any Additional Capital Contributions (the "Profit and Loss Distribution"). + +Books of Account + +Accurate and complete books of account of the transactions of the Joint Venture will be kept in accordance with generally accepted accounting principles (GAAP) and at all reasonable times will be available and open to inspection and examination by any Participant. The books and records of the Joint Venture will reflect all the Joint Venture's transactions and will be appropriate and adequate for the business conducted by the Joint Venture. + +Annual Report + +As soon as practicable after the close of each fiscal year, the Joint Venture will furnish to each Participant an annual report showing a full and complete account of the condition of the Joint Venture. This report will consist of at least the following documents: + +a statement of all information as will be necessary for the preparation of each Participant's income or other tax returns; + +a copy of the Joint Venture's federal income tax returns for that fiscal year; + +12. + +13. + +14. + +15. + +a. + +b. + + + + + +supporting income statement; + +a balance sheet; + +a cash flow statement; + +a breakdown of the profit and loss attributable to each Participant; and + +any additional information that the Participants may require. + +Banking and Joint Venture Funds + +The funds of the Joint Venture will be placed in such investments and banking accounts as will be designated by the Participants. Joint Venture funds will be held in the name of the Joint Venture and will not be commingled with those of any other person or entity. + +Fiscal Year + +The fiscal year will end on the 31st day of December of each year. + +Audit + +Any of the Participants will have the right to request an audit of the Joint Venture books. The cost of the audit will be borne by the Joint Venture. The audit will be performed by an accounting firm acceptable to all the Participants. Not more than one (1) audit will be required by any or all of the Participants for any fiscal year. + +Management + +Except as all of the Participants may otherwise agree in writing, all actions and decisions respecting the management, operation and control of the Joint Venture and its business will be decided by a majority vote of the Participants. + +c. + +d. + +e. + +f. + +g. + +16. + +17. + +18. + +19. + + + + + +Contract Binding Authority + +All actions and decisions with respect to binding the Joint Venture in contract requires the consent of a majority of the Participants. + +Tax Matters Participant + +The tax matters Participant will be MJ Syndicated Inc. (the "Tax Matters Participant"). The Tax Matters Participant will prepare, or cause to be prepared, all tax returns and reports for the Joint Venture and make any related elections that the Participants deem advisable. + +A Tax Matters Participant can voluntarily withdraw from the position of Tax Matters Participant or can be appointed or replaced by a majority vote of the other Participants. In the event of a withdrawal of the Tax Matters Participant from the Joint Venture, the remaining Participants will appoint a successor as soon as practicable. + +Meetings + +Regular meetings of the Participants will be held quarterly. + +Any Participant can call a special meeting to resolve issues that require a vote, as indicated by this Agreement, by providing all Participants with reasonable notice. In the case of a special vote, the meeting will be restricted to the specific purpose for which the meeting was held. + +All meetings will be held at a time and in a location that is reasonable, convenient and practical considering the situation of all Participants. + +Admitting a New Participant + +A new Participant may only be admitted to the Joint Venture with a unanimous vote of the existing Participants. + +20. + +21. + +22. + +23. + +24. + +25. + +26. + + + + + +Any new Participant agrees to be bound by all the covenants, terms, and conditions of this Agreement, inclusive of all current and future amendments. Further, a new Participant will execute such documents as are needed to affect the admission of the new Participant. Any new Participant will receive such business interest in the Joint Venture as determined by a unanimous decision of the other Participants. + +Voluntary Withdrawal of a Participant + +Any Participant will have the right to voluntarily withdraw from the Joint Venture at any time. Written notice of intention to withdraw must be served in writing upon the remaining Participants at least Thirty (30) business days prior to the withdrawal date. + +The voluntary withdrawal of a Participant will result in the dissolution of the Joint Venture. + +A Dissociated Participant will only exercise the right to withdraw in good faith and will act to minimize any present or future harm done to the remaining Participants as a result of the withdrawal. + +Involuntary Withdrawal of a Participant + +Events resulting in the involuntary withdrawal of a Participant from the Joint Venture will include, but not be limited to: death of a Participant; Participant mental incapacity; Participant disability preventing reasonable participation in the Joint Venture; Participant incompetence; breach of fiduciary duties by a Participant; criminal conviction of a Participant; Expulsion of a Participant; Operation of Law against a Participant; or any act or omission of a Participant that can reasonably be expected to bring the business or societal reputation of the Joint Venture into disrepute. + +The involuntary withdrawal of a Participant will result in the dissolution of the Joint Venture. + +27. + +28. + +29. + +30. + +31. + +32. + + + + + +A trustee in bankruptcy or similar third party who may acquire that Dissociated Participant's interest in the Joint Venture will only acquire that Participant's economic rights and interests and will not acquire any other rights of that Participant or be admitted as a Participant of the Joint Venture or have the right to exercise any management or voting interests. + +Dissociation of a Participant + +Where the dissociation of a Participant for any reason results in the dissolution of the Joint Venture then the Joint Venture will proceed in a reasonable and timely manner to dissolve the Joint Venture, with all debts being paid first, prior to any distribution of the remaining funds. Valuation and distribution will be determined as described in the Valuation of Interest section of this Agreement. + +The remaining Participants retain the right to seek damages from a Dissociated Participant where the dissociation resulted from a malicious or criminal act by the Dissociated Participant or where the Dissociated Participant had breached their fiduciary duty to the Joint Venture or was in breach of this Agreement or had acted in a way that could reasonably be foreseen to bring harm or damage to the Joint Venture or to the reputation of the Joint Venture. + +Dissolution + +Except as otherwise provided in this Agreement, the Joint Venture may be dissolved only with the unanimous consent of all Participants. + +Distribution of Property on Dissolution of Joint Venture + +In the event of the dissolution of the Joint Venture, each Participant will share in any remaining assets or liabilities of the Joint Venture in proportion to the Participants' Capital Contributions inclusive of any Additional Capital Contributions (the "Dissolution Distribution"). + +33. + +34. + +35. + +36. + +37. + + + + + +Upon Dissolution of the Joint Venture and liquidation of Joint Venture Property, and after payment of all selling costs and expenses, the liquidator will distribute the Joint Venture assets to the following groups according to the following order of priority: + +in satisfaction of liabilities to creditors except Joint Venture obligations to current Participants; + +in satisfaction of Joint Venture debt obligations to current Participants; and then + +to the Participants according to the Dissolution Distribution described above. + +The claims of each priority group will be satisfied in full before satisfying any claims of a lower priority group. Any excess of Joint Venture assets after liabilities or any insufficiency in Joint Venture assets in resolving liabilities under this section will be shared by the Participants according to the Dissolution Distribution described above. + +Valuation of Interest + +In the absence of a written agreement setting a value, the value of the Joint Venture will be based on the fair market value appraisal of all Joint Venture assets (less liabilities) determined in accordance with generally accepted accounting principles (GAAP). This appraisal will be conducted by an independent accounting firm agreed to by all Participants. An appraiser will be appointed within a reasonable period of the date of withdrawal or dissolution. The results of the appraisal will be binding on all Participants. A withdrawing Part ic ipant 's interest wi l l be based on that Participant's proportion of the Dissolution Distribution described above, less any outstanding liabilities the withdrawing Participant may have to the Joint Venture. The intent of this section is to ensure the survival of the Joint Venture despite the withdrawal of any individual Participant. + +38. + +a. + +b. + +c. + +39. + +40. + + + + + +No allowance will be made for goodwill, trade name, patents or other intangible assets, except where those assets have been reflected on the Joint Venture books immediately prior to valuation. + +Goodwill + +The goodwill of the Joint Venture business will be assessed at an amount to be determined by appraisal using generally accepted accounting principles (GAAP). + +Title to Joint Venture Property + +Title to all Joint Venture Property will remain in the name of the Joint Venture. No Participant or group of Participants will have any ownership interest in such Joint Venture Property in whole or in part. + +Voting + +Any vote required by the Joint Venture will be assessed where each Participant receives one vote carrying equal weight. + +Force Majeure + +A Participant will be free of liability to the Joint Venture where the Participant is prevented from executing their obligations under this Agreement in whole or in part due to force majeure, such as earthquake, typhoon, flood, fire, and war or any other unforeseen and uncontrollable event where the Participant has communicated the circumstance of said event to any and all other Participants and taken any and all appropriate action to mitigate said event. + +Duty of Loyalty + +No Participant will engage in any business, venture or transaction, whether directly or indirectly, that might be competitive with the business of the Joint Venture or that would be in direct conflict of + +41. + +42. + +43. + +44. + +45. + +46. + + + + + +interest to the Joint Venture without the unanimous written consent of the remaining Participants. Any and all businesses, ventures or transactions with any appearance of conflict of interest must be fully disclosed to all other Participants. Failure to comply with any of the terms of this clause will be deemed an Involuntary Withdrawal of the offending Participant and may be treated accordingly by the remaining Participants. + +Duty of Accountability for Private Profits + +Each Participant must account to the Joint Venture for any benefit derived by that Participant without the consent of the other Participants from any transaction concerning the Joint Venture or any use by that Participant of the Joint Venture property, name or business connection. This duty continues to apply to any transactions undertaken after the Joint Venture has been dissolved but before the affairs of the Joint Venture have been completely wound up by the surviving Participant or Participants or their agent or agents. + +Duty to Devote Time + +Each Participant will devote such time and attention to the business of the Joint Venture as the majority of the Participants will from time to time reasonably determine for the conduct of the Joint Venture business. + +Actions Requiring Unanimous Consent of the Participants + +The following list of actions will require the unanimous consent of all Participants: + +committing the Joint Venture to new liabilities or obligations totaling To Be Determined; + +and + +incurring single expenditures that exceed "To Be Determined". + +47. + +48. + +49. + +a. + +b. + + + + + +Any losses incurred as a result of a violation of this section will be charged to and collected from the individual Participant that acted without unanimous consent and caused the loss. + +Forbidden Acts + +No Participant may do any act in contravention of this Agreement. + +No Participant may permit, intentionally or unintentionally, the assignment of express, implied or apparent authority to a third party that is not a Participant in the Joint Venture. + +No Participant may do any act that would make it impossible to carry on the ordinary business of the Joint Venture. + +No Participant may confess a judgment against the Joint Venture. + +No Participant will have the right or authority to bind or obligate the Joint Venture to any extent with regard to any matter outside the intended purpose of the Joint Venture. + +Any violation of the above Forbidden Acts will be deemed an Involuntary Withdrawal of the offending Participant and may be treated accordingly by the remaining Participants. + +Indemnification + +All Participants will be indemnified and held harmless by the Joint Venture from and against any and all claims of any nature, whatsoever, arising out of a Participant's participation in Joint Venture affairs. A Participant will not be entitled to indemnification under this section for liability arising out of gross negligence or wil l ful misconduct of the Participant or the breach by the Participant of any provisions of this Agreement. + +Liability + +50. + +51. + +52. + +53. + +54. + +55. + +56. + +57. + + + + + +A Participant will not be liable to the Joint Venture, or to any other Participant, for any mistake or error in judgment or for any act or omission done in good faith and believed to be within the scope of authority conferred or implied by this Agreement or the Joint Venture. + +Liability Insurance + +The Joint Venture may acquire insurance on behalf of any Participant, employee, agent or other person engaged in the business interest of the Joint Venture against any liability asserted against them or incurred by them while acting in good faith on behalf of the Joint Venture. + +Amendments + +This Agreement may not be amended in whole or in part without the unanimous written consent of all Participants. + +Jurisdiction + +The Participants submit to the jurisdiction of the courts of The State of Florida for the enforcement of this Agreement or any arbitration award or decision arising from this Agreement. + +Definitions + +For the purpose of this Agreement, the following terms are defined as follows: + +"Additional Capital Contributions" means Capital Contributions, other than Initial Capital Contributions, made by Participants to the Joint Venture. + +"Capital Contribution" means the total amount of cash or Property contributed to the Joint Venture by any one Participant. + +58. + +59. + +60. + +61. + +a. + +b. + + + + + +"Dissociated Participant" means any Participant who is removed from the Joint Venture through a voluntary or involuntary withdrawal as provided in this Agreement. + +"Expulsion of a Participant" can occur on application by the Joint Venture or another Participant, where it has been determined that the Participant: + +has engaged in wrongful conduct that adversely and materially affected the Joint Venture's business; + +has willfully or persistently committed a material breach of this Agreement or of a duty owed to the Joint Venture or to the other Participants; or + +has engaged in conduct relating to the Joint Venture's business that makes it not reasonably practicable to carry on the business with the Participant. + +"Initial Capital Contribution" means Capital Contributions made by any Participant to acquire an interest in the Joint Venture. + +"Operation of Law" means rights or duties that are cast upon a party by the law, without any act or agreement on the part of the individual including, but not limited to, an assignment for the benefit of creditors, a divorce, or a bankruptcy. + +Miscellaneous + +Time is of the essence in this Agreement. + +This Agreement may be executed in counterpart. + +Headings are inserted for the convenience of the parties only and are not to be considered when interpreting this Agreement. Words in the singular mean and include the plural and vice versa. Words in the + +c. + +d. + +i. + +ii. + +iii. + +e. + +f. + +62. + +63. + +64. + + + + + +masculine gender include the feminine gender and vice versa. Words in the neuter gender include the masculine gender and the feminine gender and vice versa. + +If any term, covenant, condition or provision of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, it is the parties' intent that such provision be reduced in scope by the court only to the extent deemed necessary by that court to render the provision reasonable and enforceable and the remainder of the provisions of this Agreement will in no way be affected, impaired or invalidated as a result. + +This Agreement contains the entire agreement between the parties. All negotiations and understandings have been included in this Agreement. Statements or representations which may have been made by any party to this Agreement in the negotiation stages of this Agreement may in some way be inconsistent with this final written Agreement. All such statements are declared to be of no value in this Agreement. Only the written terms of this Agreement will bind the parties. + +This Agreement and the terms and conditions contained in this Agreement apply to and are binding upon the Participant's successors, assigns, executors, administrators, beneficiaries, and representatives. + +Any notices or delivery required here will be deemed completed when hand-delivered, delivered by agent, or seven (7) days after being placed in the post, postage prepaid, to the parties at the addresses contained in this Agreement or as the parties may later designate in writing. + +All of the rights, remedies and benefits provided by this Agreement will be cumulative and will not be exclusive of any other such rights, remedies and benefits allowed by law. + +IN WITNESS WHEREOF the Participants have duly affixed their signatures under hand on this 27th day of November 2018. + +65. + +66. + +67. + +68. + +69. + + + + + +Simply Herbals + +Per: ____________________ + +CEO: MJ Syndicated, Inc CEO: Simply Herbals, Inc. + +MJ Syndicated, Inc. + +Per: __/s/ Maxine Pierson________ \ No newline at end of file diff --git a/full_contract_txt/MOELIS_CO_03_24_2014-EX-10.19-STRATEGIC ALLIANCE AGREEMENT.txt b/full_contract_txt/MOELIS_CO_03_24_2014-EX-10.19-STRATEGIC ALLIANCE AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..09f5c855112bee75cb75aadaf7a0a8aea7f1498d --- /dev/null +++ b/full_contract_txt/MOELIS_CO_03_24_2014-EX-10.19-STRATEGIC ALLIANCE AGREEMENT.txt @@ -0,0 +1,419 @@ +Exhibit 10.19 STRATEGIC ALLIANCE AGREEMENT + +Among SUMITOMO MITSUI BANKING CORPORATION, SMBC NIKKO SECURITIES INC. And MOELIS & COMPANY HOLDINGS LP, MOELIS & COMPANY HOLDINGS GP LLC Dated December 27, 2011 + + + + + + TABLE OF CONTENTS ARTICLE I. CERTAIN DEFINITIONS; INTERPRETATION. 1.1 Certain Definitions 2 1.2 Interpretations 5 ARTICLE II. STRATEGIC ALLIANCE. 2.1 Strategic Alliance 6 2.2 Obligations of the Parties 6 ARTICLE III. SCOPE. 3.1 Scope 6 3.2 Covered Businesses 6 3.3 Covered Regions 6 3.4 Japanese Companies 7 3.5 Client 7 3.6 Corporate Lending Business 7 ARTICLE IV. FEE ALLOCATION. 4.1 General Allocation 7 4.2 Certain Moelis Holdings Sell-side Assignments 7 + + + + + +4.3 Target Transactions 8 4.4 Discretionary Fee Sharing 8 4.5 Primary Fee Allocation Criteria 8 ARTICLE V. NON-CIRCUMVENTION/NON-SOLICITATION. 5.1 Non-Circumvention 8 5.2 Non-Solicitation 8 5.3 Japan Office 9 i + + + + + + ARTICLE VI. SENIOR SPONSORSHIP; ALLIANCE REVIEW COMMITTEE. 6.1 Alliance Review Committee 9 ARTICLE VII. TRAINING AND DEVELOPMENT. 7.1 Training and Development 9 7.2 Secondment Program 10 ARTICLE VIII. ENGAGEMENTS. 8.1 Engagement Letters and other Agreements 10 8.2 Expenses 11 8.3 Conflict Clearance 11 8.4 Compliance with Laws 11 ARTICLE IX. JOINT MARKETING. 9.1 Joint Marketing 11 ARTICLE X. CONFIDENTIALITY. + + + + + + 10.1 Confidentiality 11 ARTICLE XI. TERM 11.1 Term 12 11.2 Termination 13 11.3 Effect of Termination 13 ARTICLE XII. CERTAIN RIGHTS OF SMBC/NIKKO. 12.1 Advisory Board 14 12.2 Right of First Refusal 14 ii + + + + + + + + 12.3 Moelis General Partner's Consent to Certain Transfers 15 12.4 Certain Transfer Matters 15 12.5 Amendments to the Moelis Holdings Agreement 17 12.6 Percentage Interest Limit 18 ARTICLE XIII. REGISTRATION RIGHTS. 13.1 Registration 18 13.2 Piggyback Registration 19 13.3 Reduction of Size of Underwritten Offering 20 13.4 Registration Procedures 21 13.5 Conditions to Offerings 23 13.6 Suspension Period 24 13.7 Market Stand-Off Agreement 25 13.8 Registration Expenses 26 13.9 Indemnification; Contribution 26 13.10 Rule 144 29 13.11 Transfer of Registration Rights 29 13.12 Termination of Registration Rights 29 ARTICLE XIV. REPRESENTATIONS AND WARRANTIES; CONDUCT OF BUSINESS 14.1 Representations and Warranties of Moelis 29 14.2 Representations and Warranties of SMBC/Nikko 30 14.3 Survival of Covenants, Representations and Warranties 30 ARTICLE XV. + + + + + + MISCELLANEOUS 15.1 Expenses; No Partnership or Joint Venture 31 15.2 Notice 31 15.3 Entire Agreement; Amendment; Waivers; Counterparts 31 15.4 No Assignment 32 15.5 Obligation and Responsibilities of SMBC/Nikko 32 15.6 Separability 32 15.7 Compliance with Laws 32 15.8 Governing Laws; Jurisdiction 32 15.9 Effect on Prior Agreement 33 15.10 Good Faith Discussion; Further Assurances 33 iii + + + + + + STRATEGIC ALLIANCE AGREEMENT This Strategic Alliance Agreement is entered into as of December 27, 2011 by and among Sumitomo Mitsui Banking Corporation ("SMBC"), a Japanese corporation with its head office at 1-2, Marunouchi 1-chome, Chiyoda-ku, Tokyo 100-0006, Japan and its subsidiary SMBC Nikko Securities Inc. ("Nikko" and together with SMBC, "SMBC/Nikko"), a Japanese corporation with its head office at 3-1, Marunouchi 3-chome, Chiyoda-ku, Tokyo 100-8325, Japan, on the one hand, and Moelis & Company Holdings LP ("Moelis Holdings"), a Delaware limited partnership with offices at 399 Park Avenue, New York, NY 10022, United States, and Moelis & Company Holdings GP LLC, a Delaware limited liability company with offices at 399 Park Avenue, New York, NY 10022, United States ("Moelis General Partner", and together with Moelis Holdings, the "Moelis Entities"), on the other hand. SMBC, Nikko, Moelis Holdings and Moelis General Partner are each referred to herein as a "party" and collectively referred to as the "parties". W I T N E S S E T H: WHEREAS, on March 1, 2011, SMBC/Nikko and Moelis Holdings entered into that certain Strategic Alliance Agreement (Phase I) with respect to certain investment banking businesses in certain regions involving Japanese companies (the "Prior Agreement"); WHEREAS, on the date hereof, SMBC entered into an Investment and Subscription Agreement (as modified or amended, the "Subscription Agreement") with Moelis Holdings and Moelis General Partner, pursuant to which SMBC has agreed to acquire 57,364 newly issued Partnership Interests; WHEREAS, the parties wish to amend and restate the Prior Agreement to further set forth the understanding of the parties with respect to certain investment banking businesses in certain regions involving Japanese companies and to set forth certain agreements with respect to certain transfer and registration rights relating to the Partnership Interests as of the Effective Date; and WHEREAS, the execution and delivery of this Agreement is a condition to the closing of the transactions contemplated by the Subscription Agreement. NOW, THEREFORE, in consideration of the foregoing and the respective promises contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged: + + + + + + ARTICLE I. CERTAIN DEFINITIONS; INTERPRETATION. 1.1 Certain Definitions. "Agreement" means this Strategic Alliance Agreement, as amended or modified from time to time in accordance with Section 15.3, including all schedules and exhibits hereto. "Alliance Review Committee" has the meaning given in Section 6.1. "Client" has the meaning given in Section 3.5. "Closing" means the Closing as defined in the Side Letter. "Confidential Information" has the meaning given in Section 10.1. "control" shall mean possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of an entity whether through ownership of voting securities, by contract or otherwise, including the ability to elect the majority of the directors or the members of a similar governing body of such entity. "Covered Businesses" has the meaning given in Section 3.2. "Covered Regions" has the meaning given in Section 3.3. "Demand Notice" has the meaning set forth in Section 13.1(a)(i). "Demand Registration" has the meaning set forth in Section 13.1(a)(i). "Effective Date" has the meaning set forth Section 11.1. "Indemnified Party" has the meaning set forth in Section 13.9(c). "Indemnified Persons" has the meaning set forth in Section 13.9(a). "Indemnifying Party" has the meaning set forth in Section 13.9(c). "Introduces" and "Introduced" means that a party arranges or arranged an initial substantive meeting (in person or by phone) between a senior decision maker at the Client and the other party. "IPO" means an initial underwritten public offering and sale of Partnership Interests (or any securities of Moelis Holdings or any successor entity into which Partnership Interests are converted, exchanged or redesignated) for cash pursuant to an effective registration statement (other than on Form S-4 or S-8 or a comparable form). 2 + + + + + + "Issuer FWP" has the meaning assigned to "issuer free writing prospectus" in Rule 433 under the Securities Act. "Japanese Companies" has the meaning given in Section 3.4. "Japanese Competitors" means any Japanese financial institution that engages in an investment banking business or any other Covered Business in Japan or outside Japan. "KM" means Mr. Ken Moelis and any entity or person controlled by or affiliated with Mr. Moelis, including Moelis Manager, any family trust or otherwise, through which Mr. Ken Moelis holds his Partnership Interests. "Losses" has the meaning set forth in Section 13.9(a). "Main-Advisor Party" has the meaning set forth in Section 8.4. "Major Japanese Competitors" means the following entities together with any ultimate parents controlling such entities: Mitsubishi UFJ Financial Group, Inc., Mizuho Financial Group, Inc., Nomura Holdings, Inc., Daiwa Securities Group Inc., Sumitomo Mitsui Trust Holdings, Inc., Resona Holdings, Inc., Shinsei Bank, Limited., Orix Corporation, any of their respective subsidiaries as of the date of this Agreement that substantially engages in an investment banking business or any other Covered Business in Japan, and any respective successors of any of the entities set forth herein. "Minimum Aggregate Fees" has the meaning given in Section 4.3. "Moelis Competitor" means any business enterprise that is engaged in, or owns or controls a significant interest in any entity that, in either case, is engaged, primarily or in any substantial manner in, investment banking activities or any other business activities that Moelis Holdings and/or its affiliates are engaged in primarily or in any substantial manner; provided, however, that no private equity fund, sovereign wealth fund or merchant bank shall be deemed a "Moelis Competitor". "Moelis Entities" has the meaning set forth in the preamble to this Agreement. "Moelis General Partner" has the meaning set forth in the preamble to this Agreement. "Moelis Holdings" has the meaning set forth in the preamble to this Agreement. "Moelis Holdings Agreement" means that certain Limited Partnership Agreement of Moelis Holdings, dated as of July 1, 2011 (as amended). "Moelis Manager" means Moelis & Company Manager LLC, a Delaware limited liability company. "Nikko" has the meaning set forth in the preamble to this Agreement. "Nikko Affiliate" has the meaning set forth in Section 10.1. 3 + + + + + + "Non-Japanese Competitors" means the following entities together with any ultimate parents controlling such entities: Evercore Partners Inc., Hawkpoint Partners Limited, Perella Weinberg Partners LP, Sagent Advisors Inc., DC Advisory Partners Limited and Stifel Financial Corp. (which, for the avoidance of doubt, includes Stifel Nicolaus Weisel (f/k/a Thomas Weisel)). "Partnership Interests" means limited partnership interests and any securities of Moelis Holdings or any successor entity into which Partnership Interests are converted, exchanged or redesignated, including in connection with any recapitalization of Moelis Holdings for the purpose of conducting the IPO. "party" or "parties" has the meaning set forth in the preamble to this Agreement. "Piggyback Registration" has the meaning set forth in Section 13.2. "Prior Agreement" has the meaning set forth in the recitals to this Agreement. "Prospectus" means the prospectus (including any preliminary prospectus and any final prospectus) included in any Registration Statement, as amended or supplemented by any free writing prospectus, whether or not required to be filed with the SEC, prospectus supplement with respect to the terms of the offering of any portion of the Registrable Securities covered by the Registration Statement and by all other amendments and supplements to the prospectus, and all material incorporated by reference in such prospectus. "Registrable Securities" means all SMBC Units beneficially owned by the SMBC Unit-Holders at any time, and any securities of Moelis Holdings or any successor entity into which the SMBC Units are converted, exchanged or redesignated, including in connection with any recapitalization of Moelis Holdings for the purpose of conducting the IPO; provided, however, that an SMBC Unit shall cease to be a Registrable Security when (i) it has been effectively registered under the Securities Act and disposed of in accordance with the Registration Statement covering it, or (ii) it is distributed to the public pursuant to Rule 144. "Registration Statement" means any registration statement of Moelis Holdings that covers Registrable Securities pursuant to the provisions of this Agreement, including the prospectus, amendments and supplements to such registration statement, including pre- and post- effective amendments, and all exhibits and all material incorporated by reference in such registration statement. "Representative" means, with respect to any person, such person's, or such person's subsidiaries', directors, officers, employees, accountants, investment bankers, commercial bank lenders, attorneys and other advisors or representatives (including the employees or attorneys of such accountants, investment bankers or attorneys). "Rule 144" means Rule 144 promulgated under the Securities Act or any similar rule or regulation hereafter adopted by the Securities and Exchange Commission having substantially the same effect as such rule. 4 + + + + + + "Side Letter" means the letter from Moelis General Partner and Moelis Holdings to SMBC, re Investment in Moelis & Company Holdings LP, dated the date hereof. "SMBC" has the meaning set forth in the preamble to this Agreement. "SMBC Affiliate" has the meaning set forth in Section 10.1. "SMBC Competitor" means (i) any of the Japanese Competitors, (ii) each of the Non-Japanese Competitors, (iii) any entity that is controlled by any Japanese Competitor or any Non-Japanese Competitor and that engages in an investment banking business or any other Covered Business and (iv) any entity that is under common control with or controls any Major Japanese Competitor and that engages in an investment banking business or any other Covered Business. "SMBC Units" means all Partnership Interests, including Common Units, held by an SMBC Unit-Holder, which shall include all Partnership Interests acquired pursuant to the Subscription Agreement or thereafter. "SMBC Unit-Holders" has the meaning set forth in Section 13.1(a)(i). "Securities Act" means the Securities Act of 1933, as amended. "SMB C/Nikko" has the meaning set forth in the preamble to this Agreement. "Strategic Alliance" means the rights and obligations of the parties set forth in ARTICLE II to XII of this Agreement. "Sub-Advisor Party" has the meaning set forth in Section 8.4. "Subscription Agreement" has the meaning set forth in the recitals to this Agreement. "Suspension Period" has the meaning set forth in Section 13.6. "Underwritten Offering" means a public offering of securities registered under the Securities Act in which an underwriter, placement agent or other intermediary participates in the distribution of such securities. 1.2 Interpretations. (a) Capitalized terms used without definition herein shall have the respective meanings given to such terms in the Moelis Holdings Agreement. 5 + + + + + + ARTICLE II. STRATEGIC ALLIANCE. 2.1 Strategic Alliance. SMBC/Nikko and Moelis Holdings wish to continue their Strategic Alliance with respect to certain investment banking business in certain regions involving Japanese Companies as set forth herein, and will continue to offer the other the same quality or level of services that were offered under the Prior Agreement. SMBC/Nikko and Moelis Holdings will help the other continue the growth of the other party's investment banking business. 2.2 Obligations of the Parties. Each of the parties acknowledge and agree that each other party may, and at the reasonable request from another party, shall, cause one or more of such party's affiliates to act on behalf of such party in the performance of its duties or exercise of its rights under this Agreement. ARTICLE III. SCOPE. 3.1 Scope. Subject to the terms and conditions set forth in this Agreement and to the extent permitted by pre-existing arrangements of either party, SMBC/Nikko, on the one hand, and Moelis Holdings, on the other hand, shall use their commercially reasonable best efforts to work together on Covered Businesses involving Japanese Companies where all principal parties involved are located within Covered Regions. The Strategic Alliance shall continue to be non-exclusive. 3.2 Covered Businesses. "Covered Businesses" shall mean M&A advisory, restructuring advisory (such as advising on recapitalization and restructuring transactions), capital markets advisory (including agency private placements), risk advisory (such as advising on investing, structuring, managing, restructuring and divesting risk exposures and complex assets classes) and merchant banking businesses (such as principal investment) to the extent the applicable target transaction requirement set forth in Section 4.3 of this Agreement is satisfied, but specifically excludes (unless the parties mutually agree to include a specific transaction) (i) underwritten offerings and bank or similar committed financings, (ii) purely domestic Japanese transactions such as transactions solely between/among companies organized or headquartered in Japan (including any transactions of or by subsidiaries or affiliates of such companies located throughout the world conducted as part of any such transaction), (iii) any transactions introduced to a party by a person or entity (other than a principal party to the transaction) not affiliated with such party and (iv) transactions where a party, its subsidiary or controlled affiliate is a principal party. 3.3 Covered Regions. "Covered Regions" shall mean Japan, North America, Europe, the Middle East and North Africa, Australia, Hong Kong and China. For the avoidance of doubt, the definition of Covered Regions does not prohibit the parties from 6 + + discussing or working together on Covered Businesses in regions outside the Covered Regions, such as non-Japan/Hong Kong/China Asia. 3.4 Japanese Companies. "Japanese Companies" shall mean (i) companies organized or headquartered in Japan and their subsidiaries and controlled affiliates outside Japan, (ii) subsidiaries and controlled affiliates organized or headquartered in Japan of parent companies in the Covered Regions other than Japan and (iii) Japanese governmental and quasi-governmental entities and affiliates. 3.5 Client. A "Client" is (i) with respect to SMBC/Nikko, a Japanese Company or any other person or entity within Covered Regions that SMBC/Nikko Introduces to Moelis Holdings pursuant to this Agreement and (ii) with respect to Moelis Holdings, a Japanese Company or any other person or entity within Covered Regions that Moelis Holdings Introduces to SMBC/Nikko pursuant to this Agreement. 3.6 Corporate Lending Business. SMBC/Nikko and Moelis Holdings will continue to work together in good faith to seek ways to expand the Strategic Alliance to cover corporate lending opportunities where Moelis Holdings sources corporate lending opportunities for SMBC/Nikko to Moelis Holdings' clients and works with SMBC/Nikko to provide SMBC/Nikko clients and relationships access to Moelis Holdings capabilities in Covered Businesses. The parties may enter into additional agreements and/or addenda to this Agreement designed to elaborate upon and clarify the arrangements contemplated by this Section 3.6. ARTICLE IV. FEE ALLOCATION. 4.1 General Allocation. The parties agree to share fees 50%/50% on assignments within the scope of this Agreement set forth in Section 3.1 where SMBC or Nikko, on the one hand, and Moelis Holdings, on the other hand, are jointly retained as co-advisors by a Client for such assignments, except as otherwise mutually agreed with respect to a specific matter by the parties. The parties agree that the parties will generally seek to be jointly retained as co-advisors by a Client on assignments within the scope of this Agreement. 4.2 Certain Moelis Holdings Sell-side Assignments. In the case of M&A sell-side assignments originated by Moelis Holdings within the scope of this Agreement set forth in Section 3.1 for which SMBC or Nikko does not serve (together with Moelis Holdings) as a co-advisor to the seller, if SMBC or Nikko introduces the actual buyer, and neither SMBC nor Nikko obtains a mandate to serve as an advisor to such buyer in connection with such acquisition, Moelis Holdings will pay SMBC/Nikko an introduction fee equal to 15% of the sale transaction fee paid to Moelis Holdings. There will be no other sharing of fees received from the seller between Moelis Holdings and SMB C/Nikko on any such assignments. 7 + + + + + + + + + + 4.3 Target Transactions. The Strategic Alliance will target transactions on which both parties work together as co-advisors to a Client on the terms and conditions set forth in Section 3.1 with minimum aggregate fees (the "Minimum Aggregate Fees") of: (1) M&A advisory, $3 million, (2) restructuring advisory, $2 million and (3) capital markets advisory and risk advisory, $1 million. 4.4 Discretionary Fee Sharing. One or more senior representatives of Moelis Holdings or SMBC/Nikko, as the case may be, will consider on a case by case basis if requested by a senior representative of the other party, discretionary fee sharing when Moelis Holdings or SMBC/Nikko, as the case may be, provides demonstrable value. 4.5 Primary Fee Allocation Criteria. The parties may mutually agree on a fee allocation different from the foregoing allocations in good faith based on, among other things, the following criteria: (a) Whether one or both parties have an important relationship that is crucial to securing an assignment (b) Resource contribution (c) Product expertise (d) Industry expertise (e) Transaction size (f) Resource constraints ARTICLE V. NON-CIRCUMVENTION/NON-SOLICITATION. 5.1 Non-Circumvention. Subject to pre-existing arrangements of either party, each party agrees not to circumvent this Agreement and to act in good faith in the spirit of the Strategic Alliance. Each party shall ensure that its controlled affiliates comply with the terms and conditions of this Agreement. 5.2 Non-Solicitation. Each of SMBC/Nikko and Moelis Holdings agrees not to solicit or hire any employee of the other party during the term of this Agreement and for a period of 12 months thereafter; provided, however, that the foregoing restriction shall not apply to general solicitations to the public that are not specifically directed to employees of other party (or employment of applicants to such solicitations). Each of SMBC/Nikko and Moelis Holdings agrees, during the term of this Agreement (except pursuant to this Agreement) and for a period of 12 months thereafter, not to solicit any Client Introduced by the other party in connection with an assignment on Covered 8 + + + + + + Businesses involving Japanese Companies where all principal parties involved are located within Covered Regions. Notwithstanding the foregoing, this provision shall not prevent any party from soliciting or otherwise contacting any Client (i) for any purpose other than working on or obtaining an assignment on Covered Businesses involving Japanese Companies in Covered Regions where all principal parties involved are located within Covered Regions or (ii) with whom such party (or its employees or consultants) has had a pre-existing relationship, including, but not limited to, a pre-existing contractual or business relationship, prior to the Introduction of such Client in connection with an assignment covered by this Agreement. 5.3 Japan Office. Moelis Holdings agrees not to open an office in Japan conducting Covered Businesses during the term of this Agreement. ARTICLE VI. SENIOR SPONSORSHIP; ALLIANCE REVIEW COMMITTEE. 6.1 Alliance Review Committee. As soon as reasonably practicable following the Effective Date, SMBC/Nikko and Moelis Holdings shall form a six person committee comprised of two senior executives from each of SMBC, Nikko and Moelis Holdings to review and discuss the progress of the Strategic Alliance (the "Alliance Review Committee"). Each party shall notify the other parties if it replaces either of its designees to the Alliance Review Committee. The Alliance Review Committee will meet annually and will have the authority to recommend changes to the Strategic Alliance or this Agreement if deemed appropriate. For the avoidance of doubt, the recommendations of the Alliance Review Committee will not be binding upon any party unless and until this Agreement is amended or modified pursuant to Section 15.3. ARTICLE VII. TRAINING AND DEVELOPMENT. 7.1 Training and Development. During the term of this Agreement, Moelis Holdings shall offer certain full-time analysts and associates of SMBC/Nikko, or employees with similar responsibilities, the opportunity to participate annually in Moelis Holdings' training program for newly hired full-time analysts and associates, to the extent that Moelis Holdings' holds such a program. SMBC/Nikko shall reimburse Moelis Holdings for all out-of-pocket and allocated expenses incurred by Moelis Holdings in connection with SMBC/Nikko employees' attending the Moelis Holdings training program. 9 + + + + + + 7.2 Secondment Program. (a) During the term of this Agreement, SMBC/Nikko shall second 3 or 4 bankers to Moelis Holdings' New York office and second 2 or 3 bankers to Moelis Holdings' London office as local staff of Moelis Holdings. Moelis Holdings shall use its commercially reasonable best efforts to second a banker to SMBC/Nikko's Tokyo office as local staff of SMBC/Nikko. All secondees shall be investment bankers that serve in a position with responsibilities typically associated with an Associate or a Vice President at a major international investment bank, except as otherwise agreed between SMB C/Nikko and Moelis Holdings. (b) Each party shall be responsible for all out-of-pocket and allocated expenses incurred by its employees who are seconded. A party's secondee(s) must be reasonably acceptable to the other parties and shall agree to be subject to any policies and procedures, including without limitation, relating to confidential and proprietary information and securities and other trading activity limitations, that the party accepting such secondee may determine are necessary and/or appropriate. (c) SMBC/Nikko and Moelis Holdings will from time to time during the term of this Agreement, review and discuss the secondment program and such additions and changes the parties consider appropriate to further the Strategic Alliance. ARTICLE VIII. ENGAGEMENTS. 8.1 Engagement Letters and other Agreements. (a) Parties. Where the parties are executing an assignment together pursuant to this Agreement, it is anticipated that generally both parties (or one of their respective affiliates) will sign the engagement letter (and, where necessary, other relevant agreements) with the relevant Client in connection with the assignment. In certain limited circumstances mutually agreed upon by the parties, one party may sign the engagement letter with the Client and then such party would also sign an agreement with the other party or parties for such party or parties to provide services to the Client and receive compensation, indemnification and other protections after receiving the written consent of such Client. (b) Rights and Obligations. The engagement letters will (unless otherwise agreed) include a provision to the effect that: "The rights and obligations of SMBC, Nikko and Moelis Holdings are the several rights and obligations of SMBC, Nikko and Moelis Holdings and that each of SMBC, Nikko or Moelis Holdings shall not be liable or responsible for the actions or omissions of the others." (c) Payment. The engagement letters will (unless otherwise agreed) provide that payments would be made to either SMBC/Nikko or Moelis Holdings and SMBC/Nikko and Moelis Holdings will split the fees pursuant to this Agreement. 10 + + + + + + 8.2 Expenses. If only one party is engaged for an assignment, such party will submit expenses of the other parties for reimbursement by the Client. If there is an expense cap or any other expense reimbursement reduction, the parties will (unless otherwise agreed) bear the cost of such unreimbursed expenses in the same proportion as the parties agreed to split the fees from such assignment. 8.3 Conflict Clearance. Each party shall have its own separate conflict identification, business selection and client vetting procedures. The parties will cooperate to identify and resolve potential conflict issues. 8.4 Compliance with Laws. In the case where one party executes an engagement letter with a Client (the "Main-Advisor Party") and the Main-Advisor Party appoints and retains the other party or parties as a sub-advisor (the "Sub-Advisor Party"), each of the Main-Advisor Party and the Sub-Advisor Party shall comply in all material respects with all applicable laws or regulations, including the UK Bribery Act 2010, the US Foreign Corrupt Practices Act of 1977 and any other similar anti-bribery act in its execution and performance of its services for the Covered Businesses for such Client. If either of the Main-Advisor Party or Sub-Advisor Party breaches its obligations set forth in this Section 8.4, the non- breaching party shall have the right to immediately terminate its sub-advisor agreement or any other similar agreement entered into with respect to the Covered Businesses for such Client by providing a written notice to the breaching party that specifically identifies how the breaching party has breached this Section 8.4. ARTICLE IX. JOINT MARKETING. 9.1 Joint Marketing. The parties shall establish a joint marketing effort for the Strategic Alliance. Among other things, the parties shall agree upon a joint press release and communication strategy for announcing the Strategic Alliance and certain joint marketing materials which either party may use in marketing to Clients. ARTICLE X. CONFIDENTIALITY. 10.1 Confidentiality. The parties each agree to keep confidential all non-public information disclosed by another party or a Client or prospective Client or a representative thereof in connection with the Strategic Alliance (including this Agreement) ("Confidential Information"), (i) except to subsidiaries, affiliates or their professional advisors (and provided that the Party shall cause the recipient to assume and perform the confidentiality obligations equivalent to those imposed on such party under this Agreement and shall be responsible for breach of such obligations by such recipient) and (ii) except as required by judicial process or such party's regulatory authorities, and 11 + + + + + + to use such information only for purposes of the Strategic Alliance (including this Agreement); provided, however, that Confidential Information shall not include (i) information that is already in the receiving party's possession when it is received and not subject to a confidentiality agreement or other obligation of confidentiality to the disclosing party, (ii) information separately obtained by the receiving party from a third party that is not known or should not reasonably be known to the person receiving such information to be bound by a confidentiality agreement or other obligation of confidentiality to the disclosing party and (iii) information independently developed by the receiving party without any use of Confidential Information. In the event that any disclosure of Confidential Information is required by judicial process or such party's regulatory authorities, the party required to make such disclosure shall, to the extent commercially practicable and legally permissible, consult with the party that provided such Confidential Information prior to making any such disclosure. Nothing in this section shall restrict the receiving party's ability to make any legally required disclosures of Confidential Information to bank examiners or other supervisory authorities having jurisdiction over the receiving party. Each of Moelis Holdings and SMBC/Nikko shall also ask the other if it has internally cleared the receipt of non-public information regarding a Client or prospective Client before the party providing such information delivers any such information to the receiving party. Due to Japanese firewall restrictions, (i) SMBC will not disclose Confidential Information relating to its Clients to Nikko (ii) Nikko will not disclose Confidential Information relating to its Clients to SMBC and (iii) Moelis Holdings shall not disclose Confidential Information relating to a Client received from SMBC or any of its affiliates (excluding Nikko and any person that would be an affiliate of Nikko if Nikko were not an affiliate of SMBC) (an "SMBC Affiliate") to Nikko or its affiliates (excluding SMBC and any person that would be an affiliate of SMBC if Nikko were not an affiliate of SMBC) (a "Nikko Affiliate") or Confidential Information relating to a Client received from Nikko or any Nikko Affiliate to SMBC or any SMBC Affiliate, without first obtaining such Client's consent to such disclosure. This Section 10.1 shall terminate with respect to Confidential Information relating to a (prospective) Client, two years following receipt of such information, and with respect to any other Confidential Information, two years following the termination of this Agreement. ARTICLE XI. TERM 11.1 Term. This Agreement shall be effective as of January 1, 2012 (the "Effective Date"), provided, however, that, ARTICLE XII and ARTICLE XIII shall not be effective until after the Closing. The initial term of this Agreement shall begin on the Effective Date and continue for three (3) years, subject to the prior termination rights provided below. At the end of such initial term, and any renewed term, as applicable, this Agreement shall automatically renew for an additional one (1) year term, unless a party provides written notice to the other parties at least six (6) months prior to the end of the 12 + + + + + + initial term. At any time during a renewed term, this Agreement may be terminated by any party on six (6) months prior notice that it wishes to terminate the Agreement. 11.2 Termination. This Agreement may be terminated as follows: (a) effective immediately upon mutual agreement of each of the parties; (b) immediately by a non-breaching party, if either SMBC or Nikko, on the one hand, or Moelis Holdings, on the other hand, shall materially breach the terms and conditions of this Agreement, and such breach is continuing after written notice has been given by the non- breaching party to the breaching party that specifically identifies how the breaching party has breached this Agreement, and a reasonable period of time has elapsed in which to cure such breach, which period shall not be less than ninety (90) calendar days from the date that such breaching parties receive such notice; (c) immediately upon the bankruptcy, insolvency, or making of the assignment for the benefit of creditors by a party; unless such termination is waived by the parties in writing not subject to any of the foregoing proceedings; (d) by any party if the SMBC Unit-Holders cease to hold any Partnership Interests as a result of sale or transfer pursuant to Section 12.4 of this Agreement or Section 8.4 of the Moelis Holdings Agreement, such termination to be effective six (6) months following the date on which the other parties receive written notice of such party's election to terminate this Agreement; and (e) immediately by Moelis Holdings if the Closing has not occurred by March 1, 2012 or such later date if the Closing is delayed pursuant to the terms of the Subscription Agreement. 11.3 Effect of Termination. In the event of the termination of this Agreement, no party shall have any liability to any other party in respect of this Agreement except for any liabilities relating to any breach or any payment obligation hereunder and arising prior to such termination; provided, that, Sections 5.2 (Non-Solicitation) and 8.2 (Expenses) and ARTICLE X (Confidentiality), XII (Certain Transfer Rights of SMBC/Nikko) (other than Section 12.6, after the SMBC Unit-Holders no longer hold any Partnership Interests), XIII (Registration Rights) and XV (Miscellaneous) shall survive any expiration or termination of this Agreement; provided, however, if Moelis Holdings terminates this agreement pursuant to Section 11.2(b) due to a material breach by either SMBC or Nikko, or if this Agreement is terminated pursuant to Section 11.2(c) due to the bankruptcy, insolvency or making of the assignment for the benefit of creditors by either SMBC or Nikko, ARTICLE XII (Certain Transfer Rights of SMBC/Nikko) and XIII (Registration Rights) shall not survive such termination; provided, further, that, if this Agreement is terminated prior to the Closing, XII (Certain Transfer Rights of SMB C/Nikko), XIII (Registration Rights) shall not survive such termination. 13 + + + + + + ARTICLE XII. CERTAIN RIGHTS OF SMBC/NIKKO. 12.1 Advisory Board. During the term of the Strategic Alliance, SMBC/Nikko shall have the right to appoint one person to serve as a member of the Advisory Board of Moelis Holdings. 12.2 Right of First Refusal. (a) Prior to the IPO and during the term of the Strategic Alliance, SMBC shall have the right of first refusal to purchase all (but not less than all) Additional Units that Moelis Holdings proposes to issue to an SMBC Competitor, including (x) in a proposed issuance that is excepted from Section 3.4.2 of the Moelis Holdings Agreement as an issuance to a Strategic Investor, and (y) in a proposed issuance that is subject to Section 3.4.2 of the Moelis Holdings Agreement, to the extent that the Partners do not exercise in full their right of first refusal thereunder. The above rights are in addition to the pro rata right of first refusal granted to all Partners with respect to issuances of Additional Units in Section 3.4.2 of the Moelis Holdings Agreement. (b) In the event Moelis Holdings proposes to undertake an issuance of Additional Units to which clause (x) of Section 12.2(a) applies, it shall give SMBC written notice of its intention describing the price and terms upon which Moelis Holdings proposes to issue the same. SMBC shall have ten (10) days from the date of delivery of any such notice to agree to purchase all, but not less than all, of such Additional Units, for the price and upon the terms specified in the notice, by delivering written notice to Moelis Holdings. Following the expiration of such 10-day period, Moelis Holdings shall have one hundred and eighty- (180-) days to sell or enter into an agreement to sell the Additional Units with respect to which SMBC's right of first refusal was not exercised, at a price and upon terms no more favorable to the purchasers of such securities than specified in Moelis Holdings' notice. In the event Moelis Holdings has not sold the Additional Units or entered into an agreement to sell the Additional Units within such one hundred and eighty- (180-) day period, Moelis Holdings shall not thereafter issue or sell any Additional Units without first complying again with this Section 12.2. (c) In the event Moelis Holdings proposes to undertake any issuance of Additional Units to which clause (y) of Section 12.2(a) applies, SMBC shall specify in its notice delivered to Moelis Holdings pursuant to Section 3.4.2(b) of the Moelis Holdings Agreement, in addition to whether or not it elects to purchase its pro rata portion of such Additional Units, whether or not it shall exercise its right of first refusal to purchase all (but not less than all) of the Additional Units that other Partners do not purchase pursuant to their right of first refusal under Section 3.4.2 of the Moelis Holdings Agreement. (d) The right of first refusal granted hereunder may not be assigned or transferred, except that such right is assignable by SMBC to any of its respective Wholly-Owned Subsidiaries. 14 + + + + + + 12.3 Moelis General Partner's Consent to Certain Transfers. (a) Prior to the IPO and during the term of the Strategic Alliance, Moelis General Partner shall not consent to a sale or transfer by a Partner of its Partnership Interests to an SMBC Competitor unless the Moelis General Partner caused the Partner proposing to sell or transfer its Partnership Interests to provide SMBC with a right to purchase, on the same terms and conditions, including price, all (but not less than all) of the Partnership Interests that such Partner proposes to sell or transfer to an SMBC Competitor. (b) In the event a Partner proposes to undertake a sale or transfer of Partnership Interests to which the foregoing right applies, and Moelis General Partner must consent to the sale or transfer, Moelis General Partner shall require that Partner to give SMBC written notice of its intention to sell or transfer Partnership Interests to an SMBC Competitor describing the price and terms upon which such Partner proposes to sell or transfer its Partnership Interests. SMBC shall have ten (10) days from the date of delivery of any such notice to agree to purchase all, but not less than all, of such Partnership Interests, for the price and upon the terms specified in the notice, by delivering written notice to such Partner and Moelis Holdings. (c) Following the expiration of such 10-day period, the Partner proposing to sell or transfer Partnership Interests shall have one hundred and eighty- (180-) days to sell or transfer, or enter into an agreement to sell or transfer the Partnership Interests with respect to which SMBC 's right under Section 12.3(a) was not exercised, at a price and upon terms no more favorable to the purchasers of such securities than specified in the Partner's notice. In the event the Partner has not sold or transferred the Partnership Interests, or entered into an agreement to sell or transfer the Partnership Interests, within such one hundred and eighty- (180-) day period, Moelis General Partner shall not consent to the Partner's selling or transferring its Partnership Interests to an SMBC Competitor thereafter without first requiring the Partner to comply again with this Section 12.3. (d) The rights granted under this Section 12.3 may not be assigned or transferred, except that such right is assignable by SMBC to any of its respective Wholly-Owned Subsidiaries. (e) Nothing in this Section 12.3 shall affect the power of Moelis General Partner to withhold consent to any transfer of Partnership Interests in its sole discretion to the extent authorized under Section 8.1 of the Moelis Holdings Agreement. 12.4 Certain Transfer Matters. (a) During the term of the Strategic Alliance, if KM sells all or a portion of KM's Partnership Interests, the SMBC Unit-Holders may sell a pro rata portion of the SMBC Units without regard to any timing or transfer restrictions imposed by this Agreement or the Moelis Holdings Agreement, except that such sale or transfer may not be to a Moelis Competitor. In the event KM proposes to undertake a sale or 15 + + + + + + transfer of KM's Partnership Interests to which the foregoing right applies, KM shall give written notice to SMBC and Moelis General Partner at least ten (10) days in advance of such sale or transfer, describing the percent of KM's Partnership Interest being sold or transferred. KM shall give written notice to SMBC and Moelis General Partner within five (5) days of any cancellation or postponement of such sale. When an SMBC Unit- Holder elects to sell or transfer the SMBC Units pursuant to its rights granted under this Section 12.4(a), the SMBC Unit-Holder shall provide Moelis General Partner with a notice stating its intent to sell or transfer the SMBC Units pursuant to this Section 12.4(a). Within ten (10) days of receiving such notice from an SMBC Unit-Holder, Moelis General Partner shall deliver to such SMBC Unit-Holder its consent for the proposed sale or transfer, unless the proposed sale or transfer is to a Moelis Competitor. For the avoidance of doubt, if the transaction is subject to (i) a Drag- Along Right or a Tag-Along Right, and such right was exercised, the SMBC Unit-Holders shall be deemed to have sold its pro rata portion of its Partnership Interests with respect to such transaction and shall not have any additional rights under this Section 12.4(a) or (ii) Section 13.2 of this Agreement, and an SMBC Unit-Holder exercised its right thereunder, such SMBC Unit-Holder shall be deemed to have sold its pro rata portion of its Partnership Interests with respect to such transaction and shall not have any additional rights under this Section 12.4(a). The above right shall be in addition to the Drag-Along Right and the Tag-Along Right with respect to transfers by Moelis General Partner set forth in Sections 8.4.1 and 8.4.2, respectively, of the Moelis Holdings Agreement. (b) During the term of the Strategic Alliance, and after the first anniversary of Moelis Holdings' commencing a public registered share sale program for managing directors and other employees of Moelis Holdings or its affiliates, the SMBC Unit-Holders may sell or transfer Partnership Interests pursuant to such public registered share sale program for any given period in an amount equal to (i) the number of Partnership Interests that can be sold pursuant to the program in such period multiplied by (ii) a fraction whose numerator is the number of Partnership Interests the SMBC Unit-Holders have elected to sell in such program during such period and whose denominator is the total number of Partnership Interests the SMBC Unit-Holders have elected to sell plus the number of Partnership Interests all other persons have elected to sell in such program during such period (whether such Partnership Interests are held as outstanding common stock of a successor or parent company of Moelis Holdings or as interests in an affiliate of such public company) (for example, if 50 Partnership Interests can be sold during the period, the SMBC Unit-Holders has elected to sell 400 Partnership Interests and all persons other than the SMBC Unit-Holders have elected to sell 1,600 Partnership Interests, then the SMBC Unit-Holders may sell 10 Partnership Interests and the other persons may sell 40 Partnership Interests); provided, that, (1) the SMBC Unit-Holders shall be subject to the same conditions and terms as the other participants in the program; (2) such right under this Section 12.4(b) shall not apply to sales Moelis Holdings may permit certain of its managing directors and other employees to make under Rule 144 or otherwise; and (3) if both Section 12.4(a) and Section 12.4(b) apply to a sale or transfer of Partnership Interests, an SMBC Unit-Holder may sell the higher of the amount under Section 12.4(a) or Section 12.4(b). If such public registered share sale program as set forth in this Section 12.4(b) is established, Moelis Holding will provide the SMBC Unit-Holders with a monthly report which provides the number of Partnership Interests being 16 + + sold in such share sale program during the relevant month and the outstanding number of Partnership Interests that are left in the public sale registered sale program as of the end of the relevant month. (c) After the termination of the Strategic Alliance: (i) prior to the IPO, Moelis General Partner shall not unreasonably withhold its consent to an SMBC Unit-Holder's transferring all or a portion of the SMBC Units to any other person who is not a Moelis Competitor; and (ii) following the IPO, the SMBC Unit-Holders may freely transfer the SMBC Units, subject to applicable securities laws. (d) Following the third anniversary of the Closing, whether or not during the term of the Strategic Alliance, the SMBC Unit- Holders may sell up to 9,231 SMBC Units (i) prior to the IPO, with the consent of Moelis General Partner (which consent may not be unreasonably withheld), provided such sale is not to a Moelis Competitor, or (ii) following the IPO, without restriction, subject only to applicable securities laws. (e) During the term of the Strategic Alliance and prior to the IPO, Moelis Holdings shall notify SMBC in advance of publicly announcing the sale or issuance of any interests in Moelis Holdings (other than Management Units) to a Strategic Investor, provided, that Moelis Holdings shall notify SMBC in advance only to the extent and in such manner as it is permissible under any confidentiality agreement entered into in connection with such sale or issuance. 12.5 Amendments to the Moelis Holdings Agreement. Without the prior written consent of SMBC (which consent shall not be unreasonably withheld, delayed or conditioned), Moelis General Partner shall not enter into any side letter or agreement (other than the Vesting Agreement of any Management Partner) with any Limited Partner in respect of the issuance or holding of any class or type of interests in the Partnership that (i) modifies the limited liability of the SMBC Unit-Holders, (ii) materially and adversely affects in a disproportionate manner the interest of the SMBC Unit-Holders in Net Income, Net Loss or Available Assets, (iii) increases the Capital Contributions required to be made by the SMBC Unit-Holders, (iv) modifies the SMBC Unit-Holders' Drag-Along Rights or Tag-Along Rights under the Moelis Holdings Agreement, or (v) materially and adversely affects in a disproportionate manner the interest of the SMBC Unit-Holders in the distributions, regardless of whether such side letter or agreement is entered into by such Limited Partner in its capacity as such, and regardless of whether SMBC is entitled to participate or does participate in such issuance of or otherwise holds any such interests; provided, however, the foregoing consent of SMBC shall not be required if the side letter or agreement affects Management Units in a substantially similar manner. 17 + + + + + + 12.6 Percentage Interest Limit. Notwithstanding anything to the contrary in this Agreement or the Moelis Holdings Agreement, none of SMBC, Moelis Holdings or any of their controlled affiliates shall take any action, including with respect to the acquisition of any Partnership Interests pursuant to the exercise of any right under this Agreement or the Moelis Holdings Agreement, that would reasonably be expected to (i) cause SMBC, or any of its affiliates, to require approval of the Board of Governors of the Federal Reserve System under Section 4 of the U.S. Bank Holding Company Act of 1956, as amended (including Regulation Y promulgated thereunder), or otherwise, to acquire or retain any interest in Moelis Holdings or (ii) cause Moelis Holdings to be deemed to be or presumed to be "controlled" by SMBC, or any of its affiliates, for purposes of the U.S. Bank Holding Company Act of 1956, as amended (including Regulation Y promulgated thereunder). SMBC and Moelis Holdings shall cooperate with each other and use their reasonable best efforts to avoid any of the events in the preceding sentence by taking any and all actions necessary, including, without limitation, in connection with any restructuring to facilitate the IPO, which shall include, among other things, issuing a new class or series of Partnership Interests or alternative economic interests to SMBC, or its affiliates, as applicable. Notwithstanding anything to the contrary in this Section 12.6, nothing shall prevent SMBC, or its affiliates, from seeking a noncontrol determination from the staff of the Board of Governors of the Federal Reserve System with respect to any action that would otherwise be prohibited by this Section 12.6, and, after receiving a noncontrol determination, taking such action, including acquiring additional Partnership Interests. ARTICLE XIII. REGISTRATION RIGHTS. 13.1 Registration. (a) (i) Following the IPO and the termination of the Strategic Alliance, SMBC shall have the right to demand that Moelis Holdings register the sale of all, but not less than all, of the Registrable Securities held by SMBC and its affiliates (together the "SMBC Unit-Holders") under the Securities Act (the "Demand Notice"), provided, however, SMBC shall not be permitted to deliver the Demand Notice within (i) 180 days of the IPO or (ii) 60 days of any public offering and sale of Partnership Interests (and/or any securities of Moelis Holdings or any successor entity into which Partnership Interests are converted, exchanged or redesignated) for cash pursuant to an effective registration statement (other than on Form S-4 or S-8 or a comparable form), and subject to the terms of any agreement entered into by Moelis Holdings, SMBC or Nikko pursuant to Section 13.7. Within 60 days after Moelis Holdings receives a written notice to register the Registrable Securities, Moelis Holdings will 18 + + + + + + file a Registration Statement, on an appropriate form, to register the sale of the Registrable Securities, which Registration Statement will (if specified in the SMBC Unit-Holders' notice) contemplate the ability of the SMBC Unit-Holders to effect an Underwritten Offering (the "Demand Registration"). The Demand Notice shall specify the intended method of distribution of the Registrable Securities. Subject to Section 13.2, Moelis Holdings may include in any registration effected pursuant to this Section 13.1 any securities for its own account or for the account of holders (other than the SMBC Unit-Holders) of Partnership Interests; provided, that, Moelis Holdings shall pay a portion of all expenses of Moelis Holdings (including those set forth in Section 13.8) in connection with any such registration, in proportion to the aggregate selling price of all securities so included in any such registration. (ii) Moelis Holdings will use its commercially reasonable efforts (i) to cause any Registration Statement to be declared effective (unless it becomes effective automatically upon filing) as promptly as practicable after the filing thereof with the SEC and (ii) to keep such Registration Statement current and effective for a period of 90 days, or such shorter time necessary for the completion of the sale of Registrable Securities registered thereon. Moelis Holdings further agrees to use its commercially reasonable efforts to supplement or make amendments to such Registration Statement as may be necessary to keep such Registration Statement effective for the period referred to in clause (ii) above, including (A) to respond to the comments of the SEC, if any, (B) as may be required by the registration form utilized by Moelis Holdings for such Registration Statement or by the instructions to such registration form, (C) as may be required by the Securities Act, or (D) as may reasonably be requested in writing by the SMBC Unit-Holders or any underwriter and acceptable to Moelis Holdings. Moelis Holdings agrees to furnish to the SMBC Unit-Holders copies of any such supplement or amendment no later than the time it is first used or filed with the SEC. (b) If the Demand Notice specifies that the Registrable Securities will be sold in an Underwritten Offering, the parties shall mutually agree on the lead underwriter and any additional underwriters. (c) Any registration initiated pursuant to Section 13.1(a) shall not count as a Demand Registration (i) unless and until the Registration Statement with respect to the Registrable Securities has become effective and remained effective for a period of 90 days or, if a shorter time, until all of the Registrable Securities have been sold, or (ii) if the conditions to closing specified in the underwriting agreement, if any, entered into in connection with such registration are not satisfied or waived, other than by reason of a failure on the part of the SMBC Unit-Holders. 13.2 Piggyback Registration. If Moelis Holdings proposes to file a registration statement under the Securities Act (other than non- participating, non-convertible debt or 19 + + + + + + equity securities or securities to be issued pursuant to a registration statement on Form S-4 or S-8 or any comparable form) for its own account or for the account of a holder (other than the SMBC Unit-Holders) of Partnership Interests, including in connection with the IPO and where SMB C/Nikko (including an SMBC Unit-Holder) has the right to sell any or all SMBC Units under this Agreement, then Moelis Holdings shall give written notice of such proposed filing to the SMBC Unit-Holders as soon as commercially practicable but in no event less than (i) 20 days before the anticipated filing date or (ii) if Moelis Holdings determines to conduct a registration less than 20 days before the anticipated filing date, then on the date Moelis Holdings determines to proceed with such registration (a "Piggyback Registration"). If Moelis Holdings proposes to file the registration statement before the termination of the Strategic Alliance, the written notice to the SMBC Unit-Holders shall include the number of Partnership Interests to be sold by KM and the percentage of the total Partnership Interests held by KM represented by that number. Within 10 days after delivery of any such notice by Moelis Holdings, or such shorter period as Moelis Holdings specifies in such notice if Moelis Holdings determines to conduct a registration less than 10 days before the anticipated filing date, the SMBC Unit-Holders may request in writing that Moelis Holdings include any Registrable Securities held by the SMBC Unit-Holders in the proposed registration. The request by the SMBC Unit-Holders shall specify the number of Registrable Securities proposed to be included in the registration. Moelis Holdings will then, subject to Section 13.3, include such requested Registrable Securities in the proposed registration; provided, however, that if Moelis Holdings proposes to file the registration statement before the termination of the Strategic Alliance, the percentage of all Registrable Securities that may be included in the proposed registration may not exceed the percentage of KM's total Partnership Interests to be sold in the proposed registration, as stated in the notice by Moelis Holdings. The SMBC Unit-Holders may not withdraw any request for a Piggyback Registration involving an Underwritten Offering after the preliminary prospectuses for the proposed offering have been printed, or any "road show" has begun, or Moelis Holdings has made any public announcement with the consent of the SMBC Unit-Holders that assumes the participation of the SMBC Unit-Holders in the proposed offering, or in any event less than 24 hours before the pricing of such offering. The SMBC Unit-Holders shall have no right to select the underwriters in an Underwritten Offering in connection with a Piggyback Registration. Notwithstanding anything to the contrary in this Section 13.2, Moelis Holdings may, at any time at its sole option, choose not to proceed with the proposed registration that gives rise to the Piggyback Registration. 13.3 Reduction of Size of Underwritten Offering. Notwithstanding anything to the contrary contained herein, if the lead underwriter or underwriters in an Underwritten Offering pursuant to Section 13.1 or Section 13.2 advise Moelis Holdings that, in their good faith judgment, the number of Partnership Interests (including any Registrable Securities) that Moelis Holdings, the SMBC Unit-Holders and any other persons intend to include in any Registration Statement exceeds the number that can be sold in the offering in light of marketing factors or because the sale of a greater number would adversely affect the price of the Partnership Interests to be sold, then the number of Partnership Interests to be included in the Registration Statement for the account of Moelis Holdings, the SMBC Unit-Holders and any other persons will be reduced to the 20 + + + + + + extent necessary to reduce the total number of securities to be included in any such Registration Statement to the number recommended by the lead underwriter or underwriters, in accordance with the following priorities: (a) in the case of a Demand Registration pursuant to Section 13.1, priority will be (i) first, all Registrable Securities included in the Registration Statement, (ii) second, any Partnership Interests proposed to be offered by Moelis Holdings for its own account (iii) third, pro rata among any other holders of Partnership Interests requested to be registered pursuant to a contractual right, and (iv) fourth, pro rata among any other holders of Partnership Interests requested to be registered; (b) in the case of a registration statement initiated by Moelis Holdings for its own account that gives rise to a Piggyback Registration pursuant to Section 13.2, priority will be (i) first, Partnership Interests proposed to be offered by Moelis Holdings for its own account, (ii) second, pro rata among all holders of Partnership Interests requested to be registered pursuant to a contractual right and (iii) third, pro rata among any other holders of Partnership Interests requested to be registered; and (c) in the case of a registration statement initiated by Moelis Holdings for the account of holders (other than the SMBC Unit- Holders) of Partnership Interests, pursuant to registration rights afforded to such holders by contract, that gives rise to a Piggyback Registration pursuant to Section 13.2, priority will be (i) first, pro rata among the holders of Partnership Interests for whose account the registration statement was initiated, (ii) second, Partnership Interests offered by Moelis Holdings for its own account, (iii) third, pro rata among any other holders of Partnership Interests requested to be registered pursuant to a contractual right and (iv) fourth, pro rata among any other holders of Partnership Interests requested to be registered. 13.4 Registration Procedures. Subject to the provisions of Section 13.1 or Section 13.2, in connection with the registration of the sale of Registrable Securities pursuant to the Demand Registration or a Piggyback Registration hereunder, Moelis Holdings will: (a) furnish to the SMBC Unit-Holders without charge, no later than the time of filing of a Registration Statement, copies of such Registration Statement, and thereafter such number of copies of such Registration Statement, each amendment and supplement thereto (in each case including all exhibits thereto, including each preliminary prospectus), copies of any and all transmittal letters or other correspondence with the SEC relating to such Registration Statement and such other documents in such quantities as the SMBC Unit-Holders may reasonably request from time to time, for as long as Moelis Holdings is required to cause the Registration Statement to remain current, in order to facilitate the disposition of the Registrable Securities; (b) provide the SMBC Unit-Holders and their Representatives with the opportunity to participate in the preparation of the Registration Statement and the related Prospectus; 21 + + + + + + (c) use its commercially reasonable efforts to register or qualify the Partnership Interests being sold under such other securities or "blue sky" laws of such jurisdictions as the SMBC Unit-Holders reasonably request and do any and all other acts and things as may be reasonably necessary or advisable to enable the SMBC Unit-Holders to consummate the disposition of the Registrable Securities in such jurisdictions; provided, however, that Moelis Holdings shall in no event be required to (w) qualify generally to do business in any jurisdiction where it is not then so qualified, (x) subject itself to taxation in any jurisdiction where it is not otherwise then so subject, (y) take any action that would subject it to service of process in suits other than those arising out of the offer and sale of the securities covered by the Registration Statement or (z) consent to general service of process in any jurisdiction where it is not then so subject; (d) notify the SMBC Unit-Holders and the lead underwriter or underwriters, if any, at any time when a Prospectus relating to Registrable Securities is required to be delivered under the Securities Act, of the occurrence of any event as a result of which the Registration Statement, the Prospectus included in a Registration Statement or any amendment or supplement thereto relating to Registrable Securities contains an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, and Moelis Holdings will use its commercially reasonable efforts to prepare and file with the SEC a supplement or amendment to such Prospectus and Registration Statement (and comply fully with the applicable provisions of Rules 424, 430A and 430B under the Securities Act in a timely manner) so that, as thereafter delivered to the purchasers of the Registrable Securities, such Prospectus and Registration Statement will not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (e) advise the lead underwriter or underwriters, if any, and the SMBC Unit-Holders promptly and, if requested by such persons, confirm such advice in writing, of the issuance by the SEC of any stop order suspending the effectiveness of the Registration Statement under the Securities Act or of the suspension by any state securities commission of the qualification of the Registrable Securities for offering or sale in any jurisdiction, or the initiation of any proceeding for any of the preceding purposes. If at any time the SEC issues any stop order suspending the effectiveness of the Registration Statement, or any state securities commission or other regulatory authority issues an order suspending the qualification or exemption from qualification of the Registrable Securities under state securities or "blue sky" laws, Moelis Holdings shall use its commercially reasonable efforts to obtain the withdrawal or lifting of such order as promptly as practicable; (f) use its commercially reasonable efforts to cause the Registrable Securities to be registered with or approved by such other governmental authorities as may be necessary by virtue of the business and operations of Moelis Holdings to enable the SMBC Unit-Holders to consummate the disposition of the Registrable Securities; provided, however, that Moelis Holdings shall in no event be required to (w) qualify 22 + + + + + + generally to do business in any jurisdiction where it is not then so qualified, (x) subject itself to taxation in any jurisdiction where it is not otherwise then so subject, (y) take any action that would subject it to service of process in suits other than those arising out of the offer and sale of the securities covered by the Registration Statement or (z) consent to general service of process in any jurisdiction where it is not then so subject; (g) if requested by the SMBC Unit-Holders or the underwriter or underwriters, if any, promptly include in any Registration Statement or Prospectus, pursuant to a supplement or post-effective amendment if necessary, such information as the SMBC Unit-Holders and the underwriter or underwriters, if any, may reasonably request to have included therein, including information relating to the "Plan of Distribution" of the Registrable Securities, information about the number of Registrable Securities being sold to the underwriter or underwriters, the purchase price being paid therefor and any other terms of the offering of the Registrable Securities to be sold in such offering, and make all required filings of such Prospectus supplement or post-effective amendment as soon as practicable after Moelis Holdings is notified of the matters to be included in such Prospectus supplement or post-effective amendment; (h) for the period beginning a reasonable time before the filing of the Registration Statement and for as long as Moelis Holdings is required to cause the Registration Statement to remain current under Section 13.1(a)(ii), and except to the extent prohibited by applicable law and subject to entering into customary confidentiality agreements, after reasonable advance notice, make available for inspection by the SMBC Unit- Holders, any underwriter participating in any disposition of the Registrable Securities, and any Representative for the SMBC Unit-Holders or such underwriter, during business hours and at the location designated by Moelis Holdings, any financial and other records and corporate documents of Moelis Holdings as will be reasonably necessary to enable them to conduct reasonable and customary due diligence with respect to Moelis Holdings and the related Registration Statement and Prospectus, provided, however, that records, documents and information obtained hereunder will be used by such inspecting person only to conduct such due diligence; and (i) together with any other holder of Partnership Interests proposing to include securities in any Underwritten Offering, enter into a reasonable and customary written agreement with the underwriter or underwriters, if any, in such form and containing such provisions as are reasonable and customary in the securities business for such an arrangement between underwriters and companies of Moelis Holding's size and investment stature. 13.5 Conditions to Offerings. The obligations of Moelis Holdings to take the actions contemplated by Sections 13.1, 13.2 and 13.4 with respect to an offering of Registrable Securities will be subject to the following conditions: (a) Moelis Holdings may require each SMBC Unit-Holder to furnish to Moelis Holdings such information regarding such SMBC Unit-Holder, the Registrable Securities or the distribution of such Registrable Securities as Moelis Holdings may from time to time request, in each case to the extent reasonably required by the Securities Act 23 + + + + + + and the rules and regulations promulgated thereunder, or under state securities or "blue sky" laws; and (b) If an offering of Registrable Securities is an Underwritten Offering, each SMBC Unit-Holder must: (A) agree to sell its Registrable Securities on the basis provided in any underwriting agreement approved by Moelis Holdings in accordance with Section 13.4(i), (B) complete and execute, as applicable, all customary questionnaires, powers of attorney, underwriting agreements, lock-up agreements consistent with Section 13.7 and other documents customarily required under the terms of such underwriting agreement and (iii) agree to make customary representations and warranties (including as to due organization and good standing, corporate power and authority, due approval, no conflicts and ownership and transfer of Registrable Securities, and as to accuracy and completeness of those statements made in the applicable Registration Statement, Prospectus or other document in reliance upon and in conformity with written information furnished to Moelis Holdings or the underwriter or underwriters by such SMBC Unit-Holder) and covenants in such underwriting agreement. 13.6 Suspension Period. (a) Notwithstanding anything to the contrary contained in this Agreement, Moelis Holdings shall be entitled, by providing prior written notice to the SMBC Unit-Holders, to postpone the filing or effectiveness or suspend the use of any Registration Statement pursuant to Section 13.1 for a reasonable period of time not to exceed 60 days in succession or 120 days in any 365-day period (or a longer period of time with the prior written consent of SMBC, which consent shall not be unreasonably withheld) (a "Suspension Period") if (A) Moelis Holdings determines in good faith that effecting the registration (or permitting sales under an effective registration) would reasonably be expected to adversely affect an offering of securities of Moelis Holdings, (B) Moelis Holdings is in possession of material non-public information and deems it advisable not to disclose such information in a Registration Statement, or (C) due to a pending or contemplated financing, acquisition, disposition, corporate reorganization, merger, public offering of securities or other similar transaction or other material event or circumstance involving Moelis Holdings or its securities. Moelis Holdings will notify the SMBC Unit-Holders promptly upon the termination of the Suspension Period. Upon notice by Moelis Holdings to the SMBC Unit-Holders of any determination to commence a Suspension Period, the SMBC Unit-Holders shall, except as required by applicable law, including any disclosure obligations under Section 13 of the Exchange Act, keep the fact of any such Suspension Period strictly confidential, and during any Suspension Period, promptly halt any offer, sale (including sales pursuant to Rule 144), trading or transfer of any Partnership Interests for the duration of the Suspension Period until Moelis Holdings has provided notice that the Suspension Period has been terminated. (b) If Moelis Holdings suspends the use of a Registration Statement pursuant to Section 13.6(a), the holders of Registrable Securities shall receive an extension of the registration period under Section 13.1(a)(ii) and 13.1(c) equal to the number of days of the suspension. 24 + + + + + + (c) The SMBC Unit-Holders agrees that, upon receipt of any notice from Moelis Holdings of the occurrence of any event of the kind described in Section 13.4(d) or Section 13.4(e) or a condition described in Section 13.6(a), each SMBC Unit-Holder will forthwith discontinue disposition of Registrable Securities pursuant to the Registration Statement covering the sale of Registrable Securities until the SMBC Unit-Holders receive copies of the supplemented or amended Prospectus contemplated by Section 13.4(d) or Section 13.6(d) or notice from Moelis Holdings of the termination of the stop order or Suspension Period. (d) After the expiration of any Suspension Period and without any further request from a holder of Partnership Interests, Moelis Holdings shall use its commercially reasonably efforts to prepare a Registration Statement, or post-effective amendment or supplement to the Registration Statement or Prospectus or any document incorporated therein by reference, or file any other required document so that, as thereafter delivered to purchasers of the Registrable Securities included therein, the Prospectus will not include a material misstatement or omission or be not effective and useable for the sale of Registrable Securities. 13.7 Market Stand-Off Agreement. (a) In connection with any Underwritten Offering that is the IPO, or any Underwritten Offering in which the SMBC Unit-Holders are selling Registrable Securities pursuant to Sections 13.1 or 13.2, each SMBC Unit-Holder agrees that, during the period of duration (up to 180 days, subject to customary extensions as may be required by the underwriter or underwriters up to a maximum of 214 days) specified by Moelis Holdings and the underwriter or underwriters of Registrable Securities, following the date of the final prospectus or other offering document distributed in connection with the Underwritten Offering, it shall not, to the extent requested by Moelis Holdings and such underwriter or underwriters, directly or indirectly, sell, offer to sell, contract to sell (including any short sale or other hedging transaction), grant any option to purchase or otherwise transfer any Registrable Securities held by it at any time during such period except for such Registrable Securities as shall be included in such registration. Notwithstanding the foregoing, the obligations described in this Section 13.7(a) shall not apply (i) to a registration relating solely to employee benefit plans on Form S-1 or Form S-8, (ii) to a registration relating solely to an acquisition or similar transaction on Form S-4 or (iii) unless all holders then holding more than 3% of the issued and outstanding Partnership Interests (and/or any securities of Moelis Holdings or any successor entity into which the Partnership Interests are converted, exchanged or redesignated) with a contractual obligation enforceable by Moelis Holdings or its affiliates to do so and all of the then-current executive officers and directors (if applicable) of Moelis Holdings enter into similar agreements. (b) In order to enforce the foregoing covenant, Moelis Holdings may impose stop-transfer instructions with respect to the Registrable Securities of each SMBC Unit-Holder until the end of such period. 25 + + + + + + 13.8 Registration Expenses. All fees and expenses incident to Moelis Holding's performance of or compliance with the obligations of this ARTICLE XIII, including all fees and expenses incurred in complying with securities or "blue sky" laws, printing expenses, messenger and delivery expenses of Moelis Holdings, any registration or filing fees payable under any federal or state securities or "blue sky" laws, the fees and expenses incurred in connection with any listing or quoting of the securities to be registered on any national securities exchange or automated quotation system, fees of the Financial Industry Regulatory Authority, fees and disbursements of counsel for Moelis Holdings, its independent registered certified public accounting firm and any other public accountants who are required to deliver comfort letters (including the expenses required by or incident to such performance), fees of transfer agents and registrars, costs of insurance, and the fees and expenses of other persons retained by Moelis Holdings, will be borne by Moelis Holdings; provided, however; that the SMBC Unit-Holders shall pay all reasonable out-of-pocket expenses of Moelis Holdings (including, for the avoidance of doubt, all the fees set forth above in this section) in connection with the Demand Registration subject to Moelis Holdings' obligations set forth in Section 13.1(a)(i). The SMBC Unit-Holders will bear and pay any fees and expenses of SMBC or its affiliates or their Representatives, including their counsel, and any underwriting discounts, fees and commissions and any transfer taxes applicable to Registrable Securities offered for its account pursuant to any Registration Statement. 13.9 Indemnification; Contribution. (a) In connection with any registration of Registrable Securities, Moelis Holdings will indemnify, defend and hold harmless each SMBC Unit-Holder, its affiliates, directors, officers and SMBC Unit-Holders and each person who controls SMBC Unit-Holder within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act (collectively, the "Indemnified Persons") from and against any and all direct losses, claims, damages, liabilities, obligations, costs and expenses (including, without limitation, as a result of any notices, actions, suits, proceedings, claims, demands, assessments, judgments, awards, costs, penalties, taxes and reasonable expenses, including reasonable attorneys' and other professionals' fees and disbursements, but excluding any consequential damages) (collectively "Losses") caused by (i) any untrue or alleged untrue statement of material fact contained in any part of any Registration Statement or any Prospectus, including any amendment or supplement thereto, used in connection with the Registrable Securities or any Issuer FWP or (ii) any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein (in the case of a Prospectus, in the light of the circumstances under which they were made) not misleading; provided, however, that Moelis Holdings will not be required to indemnify any Indemnified Person for any Losses resulting from any such untrue statement or omission if such untrue statement or omission was made in reliance on and in conformity with information with respect to any Indemnified Person furnished to Moelis Holdings in writing by, or on behalf of, any of the SMBC Unit-Holders expressly for use therein. (b) In connection with any Registration Statement, Prospectus or Issuer FWP, each SMBC Unit-Holder, jointly and severally, will indemnify, defend and 26 + + hold harmless Moelis Holdings, its directors, its officers and each person, if any, who controls Moelis Holdings (within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act) to the same extent as the foregoing indemnity from Moelis Holdings to each SMBC Unit-Holder, but only with respect to information furnished to Moelis Holdings in writing by, or on behalf of, any SMBC Unit-Holder or any Indemnified Persons expressly for use in such Registration Statement, Prospectus or Issuer FWP; and provided, further, however, that in no event shall the liability for indemnity of any SMBC Unit-Holder under this Section 13.9(b) exceed the dollar amount of the proceeds (net of any underwriting discount or commission or other selling expenses) received by such SMBC Unit-Holder from the sale of the Registrable Securities giving rise to such indemnification. (c) In case any claim, action or proceeding (including any governmental investigation) is instituted involving any person in respect of which indemnity may be sought pursuant to Section 13.9(a) or 13.9(b), such person (the "Indemnified Party") will promptly, but in any event within 10 Business Days, notify the person against whom such indemnity may be sought (the "Indemnifying Party") in writing, and the Indemnifying Party shall have the right to participate in, and to the extent the Indemnifying Party so desires, to assume the defense thereof with counsel reasonably satisfactory to the Indemnified Party; provided, that the failure of any Indemnified Party to give notice within the time limit provided herein shall not relieve the Indemnifying Party of its obligations under Section 13.9(a) or 13.9(b), except to the extent that the Indemnifying Party is actually and materially prejudiced by such failure to give notice. In any such claim, action or proceeding where the Indemnifying Party has assumed the defense thereof, the Indemnified Party shall have the right, but not the obligation, to participate in any such defense and to retain its own counsel, but the fees and expenses of such counsel will be at the expense of such Indemnified Party unless the Indemnified Party and the Indemnified Party have been advised by counsel that representation of both parties by the same counsel would be inappropriate due to actual or potential conflicting interests between them. It is understood that the Indemnifying Party will not, in connection with any claim, action or proceeding or related claims, actions or proceedings in the same jurisdiction, be liable for the reasonable fees and expenses of more than one separate firm of attorneys (in addition to any local counsel) at any time for all such Indemnified Parties and that all such reasonable fees and expenses will be reimbursed as they are incurred. In the case of the retention of any such separate firm for the Indemnified Parties, such firm will be designated in writing by the Indemnified Parties. No Indemnified Party will, without the prior written consent of the Indemnifying Party, settle, compromise or offer to settle or compromise any pending or threatened proceeding in respect of which any Indemnified Party is seeking indemnity hereunder. The Indemnifying Party will not be liable for any settlement of any claim, action or proceeding effected without its written consent, but if such claim, action or proceeding is settled with such consent or if there has been a final judgment for the plaintiff, the Indemnifying Party agrees to indemnify the Indemnified Party from and against any Loss by reason of such settlement or judgment. No Indemnifying Party will, without the prior written consent of the Indemnified Party, settle, compromise or offer to settle or compromise any pending or threatened proceeding in respect of which any Indemnified Party is seeking indemnity hereunder, unless such settlement includes (i) an 27 + + + + + + unconditional release of such Indemnified Party from all liability in connection with such proceeding, (ii) no finding or admission of any violation of law or any violation of the rights of any person by the Indemnified Party or any of its Affiliates can be made as the result of such action, and (iii) the sole relief (if any) provided is monetary damages that are reimbursed in full by the Indemnifying Party. (d) If the indemnification provided for in this Section 13.9 from the Indemnifying Party is unavailable to an Indemnified Party hereunder or is insufficient in respect of any Losses referred to in this Section 13.9, then the Indemnifying Party, in lieu of indemnifying such Indemnified Party, will contribute to the amount paid or payable by such Indemnified Party as a result of such Losses (i) in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and Indemnified Party in connection with the actions that resulted in such Losses, as well as any other relevant equitable considerations, or (ii) if the allocation provided by clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative fault referred to in clause (i) but also the relative benefit of Moelis Holdings, on the one hand, and each SMBC Unit-Holder, on the other, in connection with the statements or omissions that resulted in such Losses, as well as any other relevant equitable considerations; provided, however, that in no event shall a SMBC Unit-Holder be required by this Section 13.9(d) to contribute an aggregate amount in excess of the dollar amount of proceeds (net of underwriting discounts and commissions and other selling expenses) received by such SMBC Unit-Holder from the sale of Registrable Securities giving rise to such contribution. The relative fault of such Indemnifying Party and Indemnified Party will be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, has been taken by, or relates to information supplied by, such Indemnifying Party or Indemnified Party, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such action. The amount paid or payable by a party as a result of the Losses referred to above will be deemed to include, subject to the limitations set forth in Section 13.9(c), any reasonable out of pocket legal or other out of pocket fees or expenses reasonably incurred by such party in connection with any investigation or proceeding. (e) The parties agree that it would not be just and equitable if contribution pursuant to Section 13.9(d) were determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to in Section 13.9(d). No person guilty of "fraudulent misrepresentation" (within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. Notwithstanding the provisions of this Section 13.9(e), a SMBC Unit-Holder shall not be required to contribute, in the aggregate, any amount in excess of the amount by which the net proceeds received by such SMBC Unit-Holder from the sale of the Registrable Securities exceeds the amount of any damages which such SMBC Unit-Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. 28 + + + + + + (f) If indemnification is available under this Section 13.9, the Indemnifying Party will indemnify each Indemnified Party to the fullest extent permissible under applicable law provided in Sections 13.9(a) and 13.9(b) without regard to the relative fault of said Indemnifying Party or Indemnified Party or any other equitable consideration provided for in Section 13.9(d) or 13.9(e). The obligations of Moelis Holdings under this Section 13.9 shall be in addition to any liability that Moelis Holdings may otherwise have to any Indemnified Person. (g) Notwithstanding anything to the contrary in this Agreement, each of the Indemnified Parties has relied on this Section 13.9, is an express third party beneficiary of this Section 13.9 and is entitled to enforce the obligations of the applicable Indemnified Parties under this Section 13.9 directly against such Indemnified Parties to the full extent thereof. 13.10 Rule 144. For so long as Moelis Holdings is subject to the requirements of Section 13, 14 or 15(d) of the Securities Act, Moelis Holdings agrees that it will use its reasonable best efforts to (i) make and keep public information available, as those terms are understood and defined in Rule 144 and (ii) file the reports required to be filed by it under the Securities Act and the Exchange Act. 13.11 Transfer of Registration Rights. The rights to cause Moelis Holdings to register securities granted to the SMBC Unit-Holders under this ARTICLE XIII may be assigned by the SMBC Unit-Holders with the consent of Moelis Holdings, except that the SMBC Unit-Holders may assign such rights to their Wholly-Owned Subsidiaries without the consent of Moelis Holdings. 13.12 Termination of Registration Rights. The registration rights contained in Section 13.1 shall automatically terminate when the SMBC Unit-Holders collectively hold Registrable Securities in an amount less than (i) 1% of the issued and outstanding Partnership Interests (and/or any securities of Moelis Holdings or any successor entity into which the Partnership Interests are converted, exchanged or redesignated) and (ii) the average weekly reported volume of trading in Partnership Interests (and/or any securities of Moelis Holdings or any successor entity into which the SMBC Units are converted, exchanged or redesignated) on all national securities exchanges and/or reported through the automated quotation system of a registered securities association for the four calendar weeks preceding the date on which such determination is made. ARTICLE XIV. + +REPRESENTATIONS AND WARRANTIES; CONDUCT OF BUSINESS 14.1 Representations and Warranties of Moelis. Moelis Holdings and Moelis General Partner each represent and warrant to SMBC/Nikko that: (a) Organization. Moelis General Partner has been duly formed and is validly existing as a limited liability company under the Delaware Limited Liability 29 + + + + + + Company Act. Moelis Holdings has been duly formed and is validly existing as a limited partnership under the Delaware Revised Uniform Limited Partnership Act. (b) Power, Authority, Etc. Each of Moelis Holdings and Moelis General Partner has all requisite power and authority to enter into this Agreement and to consummate the transactions contemplated herein. The execution, delivery and performance of this Agreement do not require any further consent of any third party or governmental authority. This Agreement has been duly authorized, executed and delivered by Moelis Holdings and Moelis General Partner and, when duly executed and delivered by the other parties hereto, will be the valid and binding obligation of Moelis Holdings and Moelis General Partner, enforceable in accordance with its terms, except (a) as may be limited by or subject to any bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors' rights generally and (b) that the remedies of specific performance, injunction and other forms of equitable relief may not be available because they are subject to certain tests of equity jurisdiction, equitable defenses and the discretion of the court before which any proceeding therefor may be brought. (c) Other. Each of the representations and warranties set out in Exhibit A of this Agreement are true and correct on the date hereof. 14.2 Representations and Warranties of SMBC/Nikko. SMBC and Nikko each represent and warrant to Moelis Holdings and Moelis General Partner that: (a) Organization. SMBC and Nikko have been duly formed and are validly existing as corporations under the laws of Japan. (b) Power, Authority, Etc. SMBC and Nikko have all requisite power and authority to enter into this Agreement and to consummate the transactions contemplated herein. The execution, delivery and performance of this Agreement by SMBC and Nikko does not require any further consent of any third party or governmental authority. This Agreement has been duly authorized, executed and delivered by each of SMBC and Nikko and, when duly executed and delivered by the other parties hereto, will be the valid and binding obligation of SMBC and Nikko, enforceable in accordance with its terms, except (a) as may be limited by or subject to any bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors' rights generally and (b) that the remedies of specific performance, injunction and other forms of equitable relief may not be available because they are subject to certain tests of equity jurisdiction, equitable defenses and the discretion of the court before which any proceeding therefor may be brought. 14.3 Survival of Covenants, Representations and Warranties. Each of the covenants, representations and warranties of the parties in this Agreement and the Subscription Agreement shall survive the Closing through and including the date thirty (30) days following the receipt by SMBC/Nikko of the audited financial statements of Moelis Holdings as of and for the year ended December 31, 2012. 30 + + + + + + ARTICLE XV. MISCELLANEOUS 15.1 Expenses; No Partnership or Joint Venture. Each party will bear its own legal, marketing, travel and other expenses in connection with the Strategic Alliance. No party is the partner, joint venture partner or agent of any other party with power to bind any other party contractually. This Agreement and the Strategic Alliance represent an agreement to cooperate and not a partnership or joint venture agreement. No party owes any other party a fiduciary duty by virtue of this Agreement or the operation of the Strategic Alliance. 15.2 Notice. Notice under this Agreement must be in writing and may be delivered by mail, overnight delivery service or email as follows: If to SMBC: 2-3, Otemachi 1-chome Chiyoda-ku, Tokyo 100-0004 Attention: Toshihiro Horiuchi, Senior Vice President, Securities Business Planning Dept., Planning Dept., Investment Banking Unit. Email address: horiuchi_toshihiro@ck.smbc.co.jp If to Nikko: Shin-Marunouchi Building 18F, 5-1, Marunouchi 1-chome, Chiyoda-ku, Tokyo 100-6518 Attention: Masami Hagiwara, Head of Mergers & Acquisitions Administration Email address: hagiwara_masami@smbcnikko.co.jp If to Moelis Holdings: Moelis & Company Holdings LP 399 Park Avenue, 5th Floor New York, NY 10022 Attention: Kate Pilcher Ciafone, Senior Vice President Email address: kate.ciafone@moelis.com, with a copy to: Attention: Osamu Watanabe, General Counsel Email address: osamu.watanabe@moelis.com 15.3 Entire Agreement; Amendment; Waivers; Counterparts. This Agreement and the Subscription Agreement (as modified by any letter agreement between the parties entered into on the date hereof), incorporates the entire understanding of the parties and supersedes all previous agreements with respect to the subject matter hereof. No 31 + + + + + + amendment or modification of this Agreement shall be effective unless it is made in writing and signed by each of the parties. No waiver, expressed or implied, by any party of a breach by another party of this Agreement, or of any terms and provisions of this Agreement, shall constitute a waiver of any subsequent such breaches or of future enforcement of any such terms or provisions. This Agreement may be executed in three or more counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same agreement. 15.4 No Assignment. This Agreement may not be assigned by any party without the written consent of the other parties, except to a subsidiary or controlled affiliate of such party which succeeds such party's conduct of Covered Businesses. 15.5 Obligation and Responsibilities of SMBC/Nikko. SMBC and Nikko shall be severally and not jointly responsible for any obligation or responsibilities incurred or assumed by SMB C/Nikko hereunder. 15.6 Separability. In case one or more of the provisions contained in this Agreement are for any reason held to be invalid, illegal or unenforceable in any respect under any such law or regulation, the invalidity, illegality, or unenforceability will not affect any other provisions of this Agreement, which will be construed as if contained in this Agreement, and each illegal, invalid or unenforceable provision will be construed as broadly as may be possible so that the original intent of the parties is given effect to the greatest extent possible. 15.7 Compliance with Laws. Each of the parties shall execute and perform this Agreement in compliance with all applicable laws or regulations. Notwithstanding the foregoing, a party shall not be obligated to take any action that violates, infringes or conflicts with or prohibited from taking any action required to be in compliance with any applicable laws or regulations. 15.8 Governing Laws; Jurisdiction. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York without regard to principles of conflict of laws. The parties irrevocably and unconditionally submit to the exclusive jurisdiction of any state or Federal court sitting in Manhattan, New York over any suit, action or proceeding arising out of or relating to this Agreement. The parties hereby agree that service of any process, summons, notice or document by U.S. registered mail addressed to such party at the address above shall be effective service of process for any action, suit or proceeding brought in any such court. The parties irrevocably and unconditionally waive any objection to the laying of venue of any such suit, action or proceeding brought in any such court and any claim that any such suit, action or proceeding brought in such a court has been brought in an inconvenient forum. Each party waives any right to trial by jury with respect to any proceeding arising out of this Agreement. Notwithstanding the foregoing, any matter relating to the SMBC Unit-Holders' rights or obligations as Limited Partners of Moelis Holdings shall be subject to Sections 10.4 and 10.10 of the Moelis Holdings Agreement and not to this Section 15.8. 32 + + + + + + 15.9 Effect on Prior Agreement. Commencing as of the Effective Date, the rights and obligations of the parties shall be determined pursuant to this Agreement and the Prior Agreement shall be of no further effect; provided, that, any fees and expenses due to a party outstanding thereunder shall be deemed to be outstanding under this Agreement. 15.10 Good Faith Discussion; Further Assurances. Should there be any dispute or disagreement with respect to any matters not set forth in this Agreement, the parties will discuss in good faith to resolve such dispute or disagreement. Each party shall use its reasonable efforts to cooperate with the other party if necessary for compliance with laws and regulations applicable to such other party in relation to the SMBC Unit- Holders' holding of SMBC Units or transactions or matters contemplated under the Subscription Agreement, the Side Letter, this Agreement and the Moelis Holdings Agreement. [signature page follows] 33 + + IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and delivered on the date first written above. SUMITOMO MITSUI BANKING CORPORATION + +By: + + + + Name: Takeshi Kunibe + + + + + + + +Title: President + + + + + + + + SMBC NIKKO SECURITIES INC. + + + + + + + + + +By: + + + + + + + +Name: Eiji Watanabe + + + + + + + +Title: President & CEO + + + + + + + + MOELIS & COMPANY HOLDINGS LP + + + + + + + + By: Moelis & Company Holdings GP LLC + + + + + + + +Its: General Partner + + + + + + + + + + + + + + + +By: + + + + + + + +Name: Kenneth D. Moelis + + + + + + + +Title: Chief Executive Officer + + + + + + + + MOELIS & COMPANY HOLDINGS GP LLC + + + + + + + + + +By: + + + + + + + +Name: Kenneth D. Moelis + + + + + + + +Title: Chief Executive Officer + + + + + + + + [Signature Page to the Strategic Alliance Agreement] + + Exhibit A Representations and Warranties of the Moelis Entities In addition to the representations and warranties set forth in the Subscription Agreement, and except as specifically set forth in the Disclosure Schedule delivered to SMBC/Nikko simultaneously with the execution hereof (the "Moelis Disclosure Schedule"), Moelis Holdings and Moelis General Partner represent and warrant to SMBC/Nikko that: (a) Organization and Authority. Each of the Moelis Entities has all requisite corporate or other entity power and authority to own or lease all of its properties and assets and to carry on its business as it is now being conducted and is duly licensed or qualified to do business in each jurisdiction in which the nature of the business conducted by it or the character or location of the properties and assets owned or leased by it makes such licensing or qualification necessary, other than any failure to be so licensed or qualified that would not reasonably be expected to have a material adverse effect on the Moelis Entities and their controlled affiliates, taken as a whole. (b) Moelis Holdings Agreement. The Moelis Holdings Agreement has been duly authorized, executed and delivered by Moelis General Partner and is a valid and legally binding agreement of Moelis General Partner, enforceable against it in accordance with its terms, except (i) as the enforceability thereof may be limited by bankruptcy, insolvency, reorganization or other similar applicable laws affecting the enforcement of creditors' rights generally and (ii) that the remedies of specific performance, injunction and other forms of equitable relief may not be available because they are subject to certain tests of equity jurisdiction, equitable defenses and the discretion of the court before which any proceeding therefor may be brought. The Moelis Holdings Agreement attached as Tab 5 of the Subscription Agreement is a true, correct and complete copy of the Moelis Holdings Agreement as currently in effect. (c) Affiliates. Each controlled affiliate of Moelis Holdings is duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation and has all requisite corporate or other entity power and authority to own or lease all of its properties and assets and to carry on its business as it is now being conducted and is duly licensed or qualified to do business in each jurisdiction in which the nature of the business conducted by it or the character or location of the properties and assets owned or leased by it makes such licensing or qualification necessary, other than any failure to be in good standing or to be so licensed or qualified that would not reasonably be expected to have a material adverse effect on the Moelis Entities and their controlled affiliates, taken as a whole. All the issued and outstanding shares of capital stock or other partnership, equity or ownership interests of such controlled affiliates have been duly authorized and validly + + + + + +issued, are fully paid and nonassessable with no personal liability attaching to the ownership thereof (except as provided for in the governing documents of such controlled affiliate), have been issued in compliance with all applicable securities laws, and were not issued in violation of any preemptive rights or other right to subscribe for or purchase securities. Except as set + + + + + + forth in the Moelis Disclosure Schedule, Moelis Holdings owns, directly or indirectly, all of the issued and outstanding equity interests of each of its controlled affiliates, free and clear of all liens or encumbrances. (d) Capitalization. (1) The Moelis Disclosure Schedule sets forth a true and complete list of the number, class and series of each issued and outstanding class and series of Partnership Interests as of the date of this Agreement. (2) All of the issued and outstanding Partnership Interests have been duly authorized and validly issued and are fully paid and nonassessable, and have been issued in compliance with all applicable securities laws, and were not issued in violation of any preemptive rights or other rights to subscribe for or purchase securities. (3) Except with respect to employees of Moelis Holdings or its controlled affiliates and except as set forth in the Moelis Holdings Agreement, none of Moelis Holdings or any of its controlled affiliates has or is bound by any outstanding subscriptions, options, warrants, calls, commitments or agreements of any character calling for the purchase or issuance of, or securities or options, warrants or rights convertible or exercisable into or exchangeable for, any Partnership Interests or other equity or synthetic ownership interests of Moelis Holdings or any controlled affiliate, or any securities representing or contractual right granting the right (i) to purchase or otherwise receive any equity interest in Moelis Holdings or any controlled affiliate (including any rights plan or agreement) or (ii) to receive any periodic or other distribution on net income or net loss or upon the liquidation and winding up of Moelis Holdings or any controlled affiliate. (4) (a) Except as set forth in the Moelis Disclosure Schedule, as of the date of this Agreement, there are no, written or oral, side letter, contract, memorandum of understanding and any other agreements entered into between any of Moelis Entities on one hand and any Limited Partner of Moelis Holdings on the other hand in respect to of the issuance or holding of any class or type of interest in Moelis Holdings, regardless of whether such side letter, written contract, memorandum of understanding and any other agreements are entered into by such Limited Partner in its capacity as such, except for any vesting agreements, employment agreements, offer letters or similar agreements entered into between the Moelis Entities and employees of Moelis Holdings or its controlled affiliates; and (b) as of the date of this Agreement, no preferential voting or economic right granted to any Limited Partner of Moelis Holdings pursuant to any Representation (d) Transaction Agreements (as defined in the Moelis Disclosure Schedule) would reasonably be expected to significantly and adversely affect any voting or economic right of the SMBC Unit-Holders under the Moelis Holdings Agreement, the Subscription Agreement, the Side Letter or this Agreement (as applicable), other than as a result of dilution in accordance with the Moelis Holdings Agreement from the issuance of additional Management Units pursuant to such Representation (d) Transaction Agreements. (5) The Moelis Disclosure Schedule sets forth a schedule of SMBC's pro forma ownership of Moelis Holdings, as of the date of this Agreement, after giving effect to the transactions contemplated by the Subscription Agreement and the methodology for calculating such pro forma ownership as described in such schedule. (e) Partnership Interests. The issuance of Partnership Interests to SMBC pursuant to the Subscription Agreement has been duly authorized by all necessary action on the part of Moelis Holdings. When issued, delivered and sold against receipt of A-2 + + + + + + the consideration therefor as provided in the Subscription Agreement, such Partnership Interests will be validly issued, fully paid and nonassessable and without any personal liability attaching to the ownership thereof (except as provided for in the Moelis Holdings Agreement), will not be issued in violation of or subject to preemptive rights of any other unitholder of Moelis Holdings and will not result in the violation or triggering of any price-based antidilution adjustments under any agreement to which Moelis Holdings is a party. The issuance of Partnership Interests to SMBC qualifies as an issuance of "Additional Units" to a "Strategic Investor" under Section 3.4.1 of the Moelis Holdings Agreement for which existing Common Partners will not have the right of first refusal as provided therein. (f) No Conflicts. Neither the execution and delivery by the Moelis Entities of the Strategic Alliance Agreement or the Subscription Agreement, nor the consummation of the transactions contemplated thereby, nor compliance by the Moelis Entities with any of the provisions thereof, will violate any applicable law or regulation or violate, conflict with, or result in a breach of any provision of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or result in the termination of, or result in the loss of any benefit or creation of any right on the part of any third party under, or accelerate the performance required by, or result in a right of termination or acceleration of, or result in the creation of any lien or encumbrance upon any of the material properties or assets of any of the Moelis Entities or any of their controlled affiliates under any of the terms, conditions or provisions of (i) their respective organizational documents or (ii) any note, bond, mortgage, indenture, deed of trust, license, lease, agreement or other instrument or obligation to which any of the Moelis Entities or any of their controlled affiliates is a party or by which it may be bound, or to which any of the Moelis Entities or any of their controlled affiliates or any of the properties or assets of any of the Moelis Entities or any of their controlled affiliates may be subject, except as would not reasonably be expected to have a material adverse effect on the Moelis Entities and their controlled affiliates, taken as a whole. (g) Consents. No consents or approvals of or prior filings or registrations with any governmental authority or with any third party are necessary in connection with the execution and delivery by the Moelis Entities of the Strategic Alliance Agreement, the Subscription Agreement or the Side Letter, or the consummation of the transactions contemplated thereby. (h) Financial Statements. The Moelis Entities have previously made available to SMBC/Nikko true and correct copies of (i) the consolidated balance sheets of Moelis Holdings as of December 31 for the fiscal years 2007 through 2010, inclusive, and the related consolidated statements of income, changes in total capital and of cash flows for the fiscal years then ended, in each case accompanied by the audit report of Deloitte and Touche LLP, independent public accountants with respect to Moelis Holdings and (ii) the September 30, 2011 unaudited consolidated balance sheet of Moelis Holdings and the related unaudited consolidated statements of income, changes in total capital and of cash flows for the nine-month period then ended (including the related notes, where applicable) (each of the above, the "Financial Statements"). The Financial Statements have been prepared from, are in accordance with and accurately reflect in all A-3 + + + + + + material respects, the books and records of Moelis Holdings and its controlled affiliates, have been prepared in all material respects in accordance with United States generally accepted accounting principles applied on a consistent basis during the periods involved (except as may be stated in the notes thereto), are true and complete and fairly present in all material respects the consolidated financial position and the consolidated results of operations and cash flows (and changes in financial position, if any) of Moelis Holdings and its controlled affiliates as of the times and for the periods referred to therein (subject, in the case of unaudited statements, to normally recurring year-end audit adjustments which are not material either individually or in the aggregate). (i) Business Plan. All estimates and pro forma financial information contained in the business plan included in the Moelis Disclosure Schedule, as of the date of the business plan were prepared in good faith by the Moelis Entities. (j) Properties and Leases. Moelis Holdings and its controlled affiliates have good and marketable title to all material properties and assets, real and personal, tangible or intangible, owned by them, in each case free from liens or encumbrances that would materially affect the value thereof or interfere with the use made or to be made thereof by them in any material respect. Moelis Holdings and its controlled affiliates own or lease all material properties as are necessary to their operations as now conducted. (k) Taxes. The Moelis Entities and their controlled affiliates have filed, or joined in the filing of, all material tax returns required to be filed by or with respect to them prior to the date of this Agreement, and to the best knowledge of the Moelis Entities all such tax returns are true, accurate and complete in all material respects and all material amounts of taxes shown to be due in such tax returns have been paid, collected or withheld, as the case may be. With respect to any completed taxable period for which such tax returns have not yet been filed, or for which taxes are not yet due or owing, the Moelis Entities and their controlled affiliates have made due and sufficient current accruals for any such taxes on their respective balance sheets in accordance with United States generally accepted accounting principles. To the best knowledge of the Moelis Entities, there are no material claims or assessments pending against the Moelis Entities or their controlled affiliates for any alleged deficiency in any tax, and the Moelis Entities and their controlled affiliates have not been notified of any material proposed tax claims or assessments against the Moelis Entities or their controlled affiliates. (l) No Undisclosed Liabilities. As of the date of this Agreement, neither Moelis Holdings nor any of its controlled affiliates has any liabilities or obligations of any nature (absolute, accrued, contingent or otherwise) except for (i) liabilities or obligations disclosed in the Financial Statements and current liabilities that have arisen since the date thereof in the ordinary and usual course of business and consistent with past practice, (ii) liabilities or obligations arising under contracts entered into by Moelis Holdings and/or its controlled affiliates prior to the date hereof, or (iii) liabilities or obligations that would not reasonably be expected to have a material adverse effect on Moelis Holdings and its controlled affiliates, taken as a whole. A-4 + + + + + + (m) Employment Agreements. Each managing director of Moelis Holdings or any of its controlled affiliates, as applicable, has entered into either an offer letter, agreement or term sheet setting forth the terms of such managing director's employment and vesting of Management Units granted to such managing director in connection with his or her employment. The forms of vesting agreements for the Management Units provided by Moelis Holdings to SMBC/Nikko, taken as a whole, are representative of the vesting agreements entered into by Moelis Holdings or each controlled affiliate, as applicable, with respect to the grant of Management Unit; except for differences that would not reasonably be expected to have a material adverse effect on the Moelis Entities and their controlled affiliates, taken as a whole, or the SMBC Unit- Holders' Partnership Interests. (n) Litigation. None of the Moelis Entities or any of their controlled affiliates is a party to any, and there are no pending or, to the Moelis Entities' knowledge, threatened, material legal, administrative, arbitral or other proceedings, claims, actions or governmental or regulatory investigations (i) of any nature against the Moelis Entities or any controlled affiliate except as would not reasonably be expected to have a material adverse effect on the Moelis Entities and their controlled affiliates, taken as a whole, or (ii) challenging the validity or propriety of the transactions contemplated by the Subscription Agreement. There is no material injunction, order, judgment, decree or regulatory restriction imposed upon the Moelis Entities, any controlled affiliate or any of their assets, except for regulatory restrictions of general application. (o) Compliance with Laws. Each of the Moelis Entities and each of their controlled affiliates have all permits, licenses, franchises, authorizations, orders and approvals of, and have made all filings, applications and registrations with, all governmental authorities that are required in order to permit them to own or lease their properties and assets and to carry on their businesses as they are now being conducted other than any failure that would not reasonably be expected to have a material adverse effect on the Moelis Entities and their controlled affiliates, taken as a whole. Except as would not be reasonably expected to have a material adverse effect on the Moelis Entities and their controlled affiliates, taken as a whole, each of the Moelis Entities and their controlled affiliates has complied with, and is not in default or violation of, and none of them is given notice of any violation or threat of violation of, to the knowledge of the Moelis Entities, under investigation with respect to or, to the knowledge of the Moelis Entities, has been threatened to be charged with, any applicable law, statute, ordinance, license, rule, regulation, policy or guideline, order, demand, writ, injunction, decree or judgment of any governmental authority. Except as would not be reasonably expected to have a material adverse effect on the Moelis Entities and their controlled affiliates, taken as a whole, and except for statutory or regulatory restrictions of general application, no governmental authority has placed any restriction on the business or properties of the Moelis Entities or any of their controlled affiliates. (p) Risk Management. The Moelis Entities and their controlled affiliates have in place risk management policies and procedures, of the type and in the form that the Moelis Entities and their controlled affiliates believe, in good faith, are sufficient in scope and operation to protect against risks of the type and in the form A-5 + + + + + + expected to be used by persons of similar size and in similar lines of business as such Moelis Entity or controlled affiliate. (q) Insurance. The Moelis Entities and their controlled affiliates maintain insurance underwritten by insurers of recognized financial responsibility, of the types and in the amounts that the Moelis Entities and their controlled affiliates believe, in good faith, are adequate for their respective businesses, all of which insurance is in full force and effect. (r) Permanent Disability. To the knowledge of the Moelis Entities, (i) KM has not (A) suffered and is not currently suffering any physical or mental incapacity or disability, total or partial, that would constitute or would reasonably be expected to result in a Key Man Event (as such term is defined in the Moelis Holdings Agreement) or (B) been absent from work for three or more consecutive months at any time since the inception of the Moelis Entities and (ii) no other circumstance or condition exists that would constitute or would reasonably be expected to result in a Key Man Event. Since the inception of the Moelis Entities, no Key Man Event has occurred. (s) Affiliate Party Transactions. Except as set forth in the Moelis Disclosure Schedule and except for agreements related to employment, (i) any material transactions between any of the Moelis Entities, on the one hand and the Management Partners of any of the Moelis Entities or any of their affiliates (other than any of the Moelis Entities and any controlled affiliate), on the other hand are on terms and conditions as favorable to each of the Moelis Entities as would have been obtainable by it in a comparable arm's-length transaction with an unrelated third party. (t) No Guarantee of Performance. None of the Moelis Entities or any of their controlled affiliates has guaranteed the future performance or results of, or is liable in connection with, on behalf of, or for, any obligation of (i) any pooled investment vehicle, open-end investment company, closed-end investment company, unit investment trust or business development company or other private or public fund (except, general partner liability to the extent imposed by applicable law) or (ii) any Person to which any of the Moelis Entities or any of their controlled affiliates provides investment management or investment advisory services, including any sub-advisory services, pursuant to an investment advisory contract. (u) Effect of Agreement. None of this Agreement, the Subscription Agreement or any other agreement entered into in connection therewith is subject to the disclosure rights under, or grant other Limited Partners rights pursuant to, Section 10.19 of the Moelis Holdings Agreement. A-6 \ No newline at end of file diff --git a/full_contract_txt/MOSSIMOINC_04_14_2000-EX-10.14-ENDORSEMENT AGREEMENT.txt b/full_contract_txt/MOSSIMOINC_04_14_2000-EX-10.14-ENDORSEMENT AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..1a06cd817588ad635842a0c75617c77feb021ccd --- /dev/null +++ b/full_contract_txt/MOSSIMOINC_04_14_2000-EX-10.14-ENDORSEMENT AGREEMENT.txt @@ -0,0 +1,163 @@ +ENDORSEMENT AGREEMENT + + THIS AGREEMENT, made and entered into as of this 1st day of January, 2000, by and between MOSSIMO, INC., 2450 White Road, 2nd Floor, Irvine, California 92614 ("Company"), and DAVID DUVAL ENTERPRISES, INC. c/o International Management, Inc., IMG Center, 1360 East 9th Street, Suite 100, Cleveland, Ohio 44114 ("Licensor"): + + WITNESSETH: + + WHEREAS, David Duval ("Duval") is recognized as a highly skilled professional golfer. + + WHEREAS, Company desires to obtain the rights to use the name, fame, image and athletic renown of Duval in connection with the advertisement and promotion of its products as provided herein; + + WHEREAS, Duval has licensed all such rights to Licensor, along with the right to sublicense such rights to third parties. + + NOW, THEREFORE, the parties agree as follows: + + 1. DEFINITIONS. As used herein, the following terms shall be defined as set forth below: + + (a) "Contract Period" shall mean that period of time commencing on January 1, 2000 and concluding December 31, 2003, unless terminated sooner as provided herein. + + (b) "Contract Year" shall mean the consecutive 12-month period beginning on any January 1st during the Contract Period. + + (c) "Products" shall mean casual apparel consisting of men's pants, shirts, sweaters, windshirts and raingear. + + (d) "Duval Identification" means the right to use, subject to the provisions hereof, Duval's name, fame, nickname, initials, autograph, voice, video or film portrayals, facsimile signature, photograph, likeness and image or facsimile image, and any other means of endorsement by Duval used in connection with the advertisement and promotion of Company's Products. + + (e) "Contract Territory" shall mean worldwide. + + (f) "Outerwear" shall mean the golf shirts, sweaters, windshirts and raingear worn by Duval when he plays professional golf. + + -1- + + (g) "Exempt Status" shall mean Duval has earned full playing privileges on the PGA Tour each year of the contract term. + + 2. GRANT OF RIGHTS. In consideration of the remuneration to be paid to Licensor pursuant hereto, Licensor grants to Company the right and license during the Contract Period to use the Duval Identification solely in connection with the advertisement and promotion of Company's Products within the Contract Territory as set forth herein. Licensor agrees not to grant the right to use the Duval Identification to anyone other than Company in connection with the advertisement and promotion of Products. It is understood that Company may not use the Duval Identification in connection with any items for sale or resale, other than Company Products as specified herein. + + 3. PRIOR APPROVAL. Company agrees that no use of the Duval Identification nor any item used in connection with the Duval Identification will be made hereunder unless and until the same has been approved by Licensor. Licensor agrees that any material, advertising or otherwise, submitted for approval as provided&sbsp;herein may be deemed by Company to have been approved hereunder if the same is not disapproved in writing within ten (10) business days after receipt thereof. Licensor agrees that any material submitted hereunder will not be unreasonably disapproved and, if it is disapproved, that Company will be advised of the specific grounds therefor. If Company desires immediate approval of advertising material hereunder, Company shall have the right to directly contact Licensor's authorized agent to obtain such approval. Company agrees to protect, indemnify and save harmless Licensor, Duval and their authorized agent, or any of them, from and against any and all expenses, damages, claims, suits, actions, judgments and costs whatsoever, arising out of, or in any way connected with, any advertising material furnished by, or on behalf of, Company. + + 4. REMUNERATION. (a) In consideration of the rights herein granted hereunder, Company shall pay to Licensor the annual fee set forth in the schedule below (the "Annual Fee"). + + Year Annual Fee ---- ---------- + + + + + + + + 2000 $850,000 2001 $850,000 plus amounts paid under Section 5 in 2000 2002 $850,000 plus amounts paid under Section 5 in 2000 and 2001 2003 $850,000 plus amounts paid under Section 5 in 2000-2002 + +One-half of the Annual Fee will be due on or before January 1 and July 1 of each Contract Year. + + (b) As additional remuneration hereunder, Company agrees to pay Licensor an Additional License Fee of One Million Five Hundred Thousand Dollars ($1,500,000) to be paid + + -2- + +in quarterly installments on or before January 1, April 1, July 1 and October 1 of the first Contract Year. + + (c) Licensor agrees that Duval must achieve and maintain Exempt Status on the PGA Tour throughout each Contract Year and must participate as a player in a minimum of fifteen (15) official PGA Tour events each Contract Year (Minimum Annual Performance Requirements). Licensor also agrees that the Additional License Fee set forth in Section 4 (b), is an advance payment earned at a rate of $375,000 on each annual anniversary date beginning December 31, 2000. In the event Duval does not meet the Minimum Annual Performance Requirements for a Contract Year, $375,000 of the Additional License Fee will be deemed to be unearned. Any unearned Additional License Fee is fully &bbsp; refundable and due Company no later then January 31st of the following year. In the event the Company terminates the Agreement in accordance with Section 16, any unearned Additional License Fee will be fully refundable and due the Company as set forth in Section 16. + + 5. ADDITIONAL REMUNERATION. It is agreed that should Duval achieve any of the accomplishments set forth in the following schedule during the Contract Period, then Company will pay Licensor the additional remuneration set forth below for each such accomplishment due to the increased value in the Duval Identification. + + Accomplishment Additional Remuneration -------------- ----------------------- + + PGA Tour Win $25,000 PGA Tour 2-5 place finish $10,000 + +World Championship Event Win $40,000 World Championship Event 2-5 place finish $15,000 + +Major Win (Masters, U.S. Open, British Open, PGA Championship) $100,000 Major 2-5 place finish $25,000 + +Named to Ryder Cup or President's Cup Team $15,000 + +Player of the Year $40,000 + +All additional remuneration will be due within thirty (30) days of each such accomplishment. Company agrees that all additional remuneration earned by Licensor during each Contract Year will be added to the Annual Fee for each remaining Contract Year during the Contract Period. + + 6. PAYMENTS. Licensor may elect to have payments made by check, wire transfer, or bank transfer. Unless such election has been made in writing, all payments shall be made by check drawn to the order of "David Duval Enterprises, Inc." and delivered to c/o IMG Center, + + -3- + +1360 East 9th Street, Cleveland, Ohio 44114, Attention: Treasurer. Past due payments hereunder shall bear interest at the rate of (a) one and one-half percent (1-1/2%) per month, or (b) the maximum interest rate permissible under law, whichever is less. All amounts herein are in United States Dollars. + + 7. MARKETING COMMITMENT. Company agrees that it will aggressively promote Duval and his association with Company and Company Products each Contract Year during the Contract Period. + + 8. SERVICES OF DUVAL. (a) If Company desires to utilize the services of Duval as a model in connection with Company advertising to promote its products or for personal appearances to promote Company, Licensor agrees, at the request of Company to provide the services of Duval upon a reasonable number&bbsp;of days as mutually agreed upon and at places reasonably convenient to his schedule. Company agrees that it will reimburse Licensor for all reasonable travel, lodging and meal expenses incurred by Licensor or Duval in connection with such + + + + + +services. Company further understands that failure to utilize services of Duval pursuant to this section shall not result in any reduction in payments to Licensor hereunder nor may the obligation to provide services be carried forward or backward to any Contract Year. The obligations of Licensor to provide services of Duval hereunder are subject to the condition that payments to Licensor are current and up to date. + + (b) Should Company use Duval in television advertising to promote Company's Products, Company will make all applicable required union scale and pension and welfare payments. Company and Licensor will mutually agree on the portion of the Annual Fee that shall be allocated for such broadcast services. + + (c) Licensor agrees to cause Duval to wear Company's Products sold by Company when playing professional golf, and while participating in golf exhibitions and outings, upon the condition that Company supply Duval with such amounts of properly fitting Products, in fabrics and styles approved by Duval and Company, as Duval may reasonably request which are suitable for his use in tournament competition. Company agrees to pay all charges in connection with the delivery of such Products to Duval, including shipping charges, air freight charges and customs charges. Company agrees to reimburse Licensor's authorized agent for all such expenses incurred by it in connection with the transfer of such Products to Duval. + + (d) Licensor agrees that Duval will consult with Company as reasonably requested regarding the development of a Company golf line of Products or a Duval Signature Line of Products as mutually agreed upon. Company agrees that Licensor will receive additional remuneration in connection with such golf line or signature line, whether as a royalty or otherwise, as mutually agreed upon. + + 9. COMPANY IDENTIFICATION. (a) It is agreed that the logo or name of Company (or Company's subsidiaries as mutually agreed upon) (the "Company Logo") shall be affixed to mutually agreed upon locations of Duval's Outerwear, excluding the right sleeve which is reserved for one of Licensor's other sponsors, which he wears when he plays professional golf. + + -4- + +Company agrees that it will be responsible for, and the cost of, affixing the Company Logo on all such Outerwear. Furthermore, Company understands that if Duval participates in a special team event where there is an official uniform, then Duval is permitted to wear such uniform during such event (e.g. Ryder Cup, President's Cup, etc.). + + (b) Company shall provide and maintain, at its own expense, commercial general liability insurance and advertising injury coverage, with limits of not less than One Million Dollars ($1,000,000.00), and shall cause such policy to be endorsed to state that Duval is an additional named insured thereunder. A certificate of insurance evidencing such coverage shall be furnished to Duval within thirty (30) days of the full execution of this Agreement. Such insurance policy shall provide that the insurer shall not terminate or materially modify such policy or remove Duval as an additional named insured without prior written notice to Duval at least twenty (20) days in advance thereof. + + 10. AUTHORIZED AGENT. Licensor hereby designates International Management, Inc., IMG Center, 1360 East 9th Street, Suite 100, Cleveland, Ohio 44114, Attention: Charley Moore as its authorized agent for all purposes hereunder. All notices or submissions to be made or delivered by Company to Licensor pursuant to this Agreement shall be delivered to said address free of all charges such as, for example, shipping charges and customs charges. In the event that any such charges are paid by Licensor or by its authorized agent, Company agrees to make prompt reimbursement. + + 11. DEFAULT. (a) If either party at any time during the Contract Period shall (i) fail to make any payment of any sum of money herein specified to be made, or (ii) fail to observe or&bbsp;perform any of the covenants, agreements or obligations hereunder (other than the payment of money), the nondefaulting party may terminate this Agreement as follows: as to (i) if such payment is not made within ten (10) days after the defaulting party shall have received written notice of such failure to make payment, or as to (ii) if such default is not cured within thirty (30) days after the defaulting party shall have received written notice specifying in reasonable detail the nature of such default. In order to be a sufficient notice hereunder, any such written notice shall specify in detail each item of default and shall specify the provision of this Agreement which applies to each item of default, and shall specify in detail the action the defaulting party is required to take in order to cure each item of default. The termination rights set forth in this section shall not constitute the exclusive remedy of the nondefaulting party hereunder, however, and if default is made by either party hereunder, the other may resort to such other remedies as said party would have been entitled to if this section had been omitted from this Agreement, subject to the terms of this Agreement. Termination under the provisions of this section shall be without prejudice to any rights or claims which the terminating party may otherwise have against the defaulting party, and if Company is the defaulting party, Company shall be responsible for any and all payments due under the terms of this Agreement in addition to other liabilities set forth above. + + (b) If Company shall become bankrupt or insolvent, or if Company's business shall be placed in the hands of a receiver, assignee or trustee, whether by voluntary act of Company or otherwise, the Contract Period shall, at the election of Licensor, immediately terminate. + + -5- + + + + + + 12. USE OF DUVAL IDENTIFICATION AFTER TERMINATION. From and after the termination of the Contract Period all of the rights of Company to the use of the Duval Identification shall cease absolutely and Company shall not thereafter use or refer to the Duval Identification in advertising or promotion in any manner whatsoever. It is further agreed that following termination of the Contract Period, Company shall not advertise, promote, distribute or sell any item whatsoever in connection with the use of any name, figure, design, logo, trademark or trade name similar to or suggestive of the Duval Identification. + + 13. TRADEMARKS. Company agrees that it will not file, during the Contract Period or thereafter, any application for trademark registration or otherwise obtain or attempt to obtain ownership of any trademark or trade name within the Contract Territory or in any other country of the world which consists of the Duval Identification or any mark, design or logo intended to make reference to Duval or to identify products endorsed by Duval. In the event that, prior to commencement of the Contract Period, Company has filed one or more applications for registration of any such trademark, or otherwise has obtained any rights to such trademark, Company agrees to cause such applications and/or trademarks to be assigned and transferred to Licensor forthwith. + + 14. RESERVATION OF RIGHTS. All rights not herein specifically granted to Company shall remain the property of Licensor to be used in any manner Licensor deems appropriate. Company understands that Licensor has reserved the right to authorize others to use Duval Identification within the Contract Territory and during the Contract Period in connection with all tangible and intangible items and services other than Products themselves. + + 15. INDEMNITY. Company agrees to protect, indemnify and save harmless Licensor, Duval and their authorized agent, or any of them, from and against any and all expenses, damages, claims, suits, actions, judgments and costs whatsoever, including reasonable attorneys' fees, arising out of, or in any way connected with, actions or omissions of Company, any advertising material furnished by, or on behalf of, Company or any claim or action for personal injury, death or other cause of action involving alleged defects in Company's Products or services. Company agrees to provide and maintain, at its own expense, general commercial and product liability insurance with limits no less than Three Million Dollars ($3,000,000) and naming Licensor and Duval as additional named insureds. Within thirty (30) days from the date hereof, Company will submit to Licensor evidence of such policy, requiring that the insurer shall not terminate or materially modify such without written notice to Licensor at least twenty (20) days in advance thereof. + + 16. SPECIAL RIGHT OF TERMINATION. Company shall have the right to terminate this Agreement upon written notice to Licensor if the commercial value of the Duval Identification is substantially reduced because Duval (i) has engaged in illegal or immoral conduct resulting in a felony conviction; or (ii) fails an officially sanctioned drug test or is criminally convicted of any drug related offense. Any termination pursuant to this paragraph shall become effective on the 30th day next following the date of receipt by Licensor of Company's written notice to so terminate. + + -6- + + 17. LIMITED LIABILITY. Notwithstanding anything to the contrary herein, in the event Company incurs any expenses, damages or other liabilities (including, without limitation, reasonable attorneys' fees) in connection with the performance or non-performance of any term or provision hereof, Licensor's liability to Company shall not exceed the remuneration, excluding reimbursement of expenses, actually paid to Licensor by Company. In no event will Licensor be liable for any indirect, incidental, reliance, special or consequential damages arising out of the performance or non-performance of this Agreement, whether or not Licensor had been advised of the possibility of such damages. It is understood that Duval is not a party hereto and has no liability hereunder but is an intended specific third party creditor beneficiary hereof. + + 18. WAIVER. The failure of either party at any time or times to demand strict performance by the other of any of the terms, covenants or conditions set forth herein shall not be construed as a continuing waiver or relinquishment thereof and each may at any time demand strict and complete performance by the other of said terms, covenants and conditions. Any waiver of such rights must be set forth in writing. + + 19. SEVERABILITY. If any provision of this Agreement shall be declared illegal, invalid, void or unenforceable by any judicial or administrative authority, the validity of any other provision and of the entire Agreement shall not be affected thereby. + + 20. ASSIGNMENT. This Agreement shall bind and inure to the benefit of Licensor, and the successors and assigns of Licensor. The rights granted Company hereunder are personal to it, shall be used only by it or its affiliate and shall not without the prior written consent of Licensor be transferred or assigned to any other party. In the event of the merger or consolidation of Company with any other entity, Licensor shall have the right to terminate the Contract Period by so notifying Company in writing within sixty (60) days following Licensor's receipt of notice of such merger or consolidation. + + 21. ARBITRATION/GOVERNING LAW. This agreement shall be governed by, and its provisions enforced in accordance with, the laws of the State of Ohio, without regard to its principals of conflicts of laws. In the event a dispute arises under this agreement which cannot be resolved, such dispute shall be submitted to arbitration and resolved by a single arbitrator (who shall be a lawyer not employed by or associated with either party to this agreement) in accordance with the Commercial Arbitration Rules of the American Arbitration Association then in effect. All such arbitration shall take place at the office + + + + + +of the American Arbitration Association located in Cleveland, Ohio. Each party is entitled to depose one (1) fact witness and any expert witness retained by the other party, and to conduct such other discovery as the arbitrator deems appropriate. The award or decision rendered by the arbitrator shall be final, binding and conclusive and judgment may be entered upon such award by any court. + + 22. SIGNIFICANCE OF HEADINGS. Section headings contained herein are solely for the purpose of&bbsp;aiding in speedy location of subject matter and are not in any sense to be given weight in the construction of this Agreement. Accordingly, in case of any question with respect to the + + -7- + +construction of this Agreement, it is to be construed as though such section headings had been omitted. + + 23. NO JOINT VENTURE. This Agreement does not constitute and shall not be construed as constituting an association, partnership, joint venture or relationship of principal and agent or employer and employee between Licensor and Company. Neither party shall have any right to obligate or bind the other party in any manner whatsoever, and, except as expressly set forth herein, nothing herein contained shall give, or is intended to give, any rights of any kind to any third person. + + 24. ENTIRE AGREEMENT. This writing constitutes the entire agreement between the parties hereto and may not be changed or modified except by a writing signed by the party or parties to be charged thereby. + + 25. EXECUTION AND DELIVERY. This instrument shall not be considered to be an agreement or contract nor shall it create any obligation whatsoever on the part of Licensor and Company, or either of them, unless and until it has been personally signed by a representative of Licensor and by a representative of Company and delivery has been made of a fully signed original. Acceptance of the offer made herein is expressly limited to the terms of the offer. + + IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first above written. + +MOSSIMO, INC. DAVID DUVAL ENTERPRISES, INC. + +By: /s/ Edwin Lewis By: /s/ David Duval ------------------------------- ------------------------------ Name: Edwin Lewis Name: David Duval Title: President and CEO + + -8- \ No newline at end of file diff --git a/full_contract_txt/MOVADOGROUPINC_04_30_2003-EX-10.28-ENDORSEMENT AGREEMENT.txt b/full_contract_txt/MOVADOGROUPINC_04_30_2003-EX-10.28-ENDORSEMENT AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..959cf887e6204448efb92c0f93ce736e511f0481 --- /dev/null +++ b/full_contract_txt/MOVADOGROUPINC_04_30_2003-EX-10.28-ENDORSEMENT AGREEMENT.txt @@ -0,0 +1,117 @@ +EXHIBIT 10.28 + + MOVADO GROUP, INC. + + ENDORSEMENT AGREEMENT + + WHEREAS, Movado Group, Inc. (the "Company") and the Trustees of the Grinberg Family Trust (the "Trust") entered into a Policy Collateral Assignment And Split Dollar Agreement, dated as of December 5, 1995 (the "Split Dollar Agreement"); and + + WHEREAS, pursuant to the Split Dollar Agreement, life insurance protection is provided to the beneficiaries of the Trust, upon the of the death of the survivor of Gedalio Grinberg ("Executive") and Sonia Grinberg (Executive and Sonia Grinberg are collectively referred to as the "Insureds") under a life insurance policy issued to the Trust by the New York Life Insurance Company, Policy No. 45660373 (hereinafter referred to as the "Policy"); and + + WHEREAS, pursuant to the Split Dollar Agreement, the Policy is owned by the Trust and collaterally assigned by it to the Company in order to secure the repayment of the amounts due to the Company in respect of the Company's loans to the Trust which have been used by the Trust to pay the premiums on the Policy (such loans totaling $5,186,860 on the date hereof and being represented by a Demand Note, dated December 5, 1995, between the Company and the Trust (the "Demand Note")); and + + WHEREAS, Section XIII of the Split Dollar Agreement provides that it may be amended at any time and from time to time by a written instrument by the parties thereto; and + + WHEREAS, Section 402 of the Sarbanes-Oxley Act of the 2002 (the "Act") prohibits certain public companies (including the Company) from directly or indirectly making or arranging for an extension of credit in the form of a personal loan to its executive officers on or after July 30, 2002; and + + WHEREAS, Executive and a Trustee and a beneficiary of the Trust are executive officers of the Company; and + + WHEREAS, counsel to the Company has advised the Company that the collateral assignment split-dollar life insurance arrangement reflected in the Split Dollar Agreement may violate the aforementioned prohibition on personal loans to executive officers set forth in Section 402 of the Act, in respect of loans made to the Trust on or after July 30, 2002, although there exists no authority on point and reasonable arguments may be made to the contrary; and + + WHEREAS, in order to best ensure that the Company does not violate the aforementioned prohibition on personal loans to executive officers set forth in Section 402 of the Act, the parties hereto wish to (i) amend and restate the Split Dollar Agreement, (ii) rename the amended and restated Split Dollar Agreement the "Movado Group, Inc. Endorsement Agreement" (hereinafter referred to as the "Endorsement Agreement" or the "Agreement"), and (iii) transfer the Policy to the Company in partial repayment of the outstanding $5,186,860 principal balance of the Demand Note, with such repayment being in an amount equal to the cash + + 2 + +surrender value of the Policy on the date hereof ($4,595,591), and with the remaining principal balance of the Demand Note ($591,269) continuing to be subject to the terms and conditions of the Demand Note. + + NOW, THEREFORE, in consideration for the mutual promises contained herein, the parties hereto agree to amend and restate the Split Dollar Agreement in its entirety as follows: + + 1. Transfer of Policy; Partial Repayment of Demand Note. The Trustees of the Trust hereby agree to promptly execute any and all documents required by the New York Life Insurance Company (the "Insurer") and the Company to transfer ownership of the Policy from the Trust to the Company in exchange for the Company's agreement to promptly execute any and all documents required to reflect the partial repayment of the outstanding principal balance of the Demand Note, as described in the recitals above. + + 2. Ownership of Policy. Except as otherwise provided in this Agreement, the Company shall be the sole and exclusive owner of the Policy. + + 3. Surrender, Withdrawals, Loans; Etc. Other than as specifically allowed herein, the Company shall not borrow from, hypothecate, withdraw cash value from, surrender in whole or in part, cancel, or in any other manner encumber the Policy without the prior written consent of the Trustees of the Trust. Unless the Company and the Trustees of the Trust otherwise agree, in the event there is a complete or partial surrender or cancellation of the Policy, the proceeds payable as a result of the surrender, cancellation, withdrawal or loan shall be paid to the Company in an amount equal to the aggregate premiums paid under the Policy since inception, and any remaining proceeds shall be payable to the Trust. + + 4. Investment of Cash Values. If the Policy provides the policy owner with a choice of investment funds for the Policy cash values, the Company shall select the funds in which to invest such cash values. + + 5. Payment of Premiums. Subject to the terms of this Agreement, the Company agrees to pay premiums on the Policy as provided under the Policy. In + + + + + +the event this Agreement is terminated in accordance with terms of Section 11, the Company shall not be liable for any premiums owed on the Policy after the date of termination. + + 6. Payment of Death Benefits. Upon the death of the survivor of the Insureds, the death benefit under the Policy (including any interest payable under the Policy in respect of such death benefit for the period from the date of death of such survivor until the payment of the death benefit) shall be divided as follows: + + (a) The Company shall be entitled to receive an amount equal to the aggregate premiums paid under the Policy since inception less the amount of the then outstanding principal balance of the Demand Note (the "Company Death Benefit"). (If the Policy provides for a death benefit equal to the sum of the face amount of the Policy and any cash account or accumulation value, the Company Death Benefit shall first be paid from the cash account or accumulation value portion of the death benefit.) + + 3 + + (b) The Trust shall be entitled to receive the excess, if any, of the Policy's death benefit over the Company Death Benefit. + + (c) If any interest is payable under the Policy in respect of the death benefit for the period from the date of death of such survivor until the payment of the death benefit, the Company and the Trust shall share in such interest in proportion that their respective share of such death benefit (as determined under Section 6(a) and (b) hereof) bears to the total death benefit, excluding any interest thereon. + + 7. Company Default. In the event of a "Company Default" (as defined below), the Trust shall have the right to require the Company to cure the Company Default by notifying the Company in writing within sixty (60) days after its receipt of notice of a Company Default, or if later, within thirty (30) days after a Trustee becomes aware of the Company Default. If the Company fails to cure the Company Default within sixty (60) days after being notified by the Trust of the Company Default, the Trust shall have the right to require the Company to transfer its interest in the Policy to the Trust. The Trust may exercise this right by notifying the Company, in writing, within sixty (60) days after the Company Default occurs. Upon receipt of such notice, the Company shall immediately transfer ownership of the Policy to the Trust and the Company shall thereafter have no rights with respect to the Policy. The Trust's failure to exercise its rights under this Section 7 shall not be deemed to release the Company from any of its obligations under this Agreement, and shall not preclude the Trust from seeking other remedies with respect to the Company Default. For purposes of this Agreement, a "Company Default" shall be deemed to have occurred with respect to the Policy if the Company fails to pay a premium on the Policy as required under the terms of this Agreement within sixty (60) days after the due date for such premium, or if the Company processes or attempts to process a policy loan, or a complete or partial surrender, or a cash value withdrawal without prior written approval from the Trustees of the Trust. The Company shall notify the Trustees of the Trust within five (5) business days of any event which constitutes a Company Default. + + 8. Notice. All notices hereunder shall be in writing and sent by certified mail with postage prepaid. Any notice to the Company shall be addressed to the attention of the General Counsel, with a copy to the Chief Executive Officer, at the principal office of the Company at 650 From Road; Paramus, New Jersey 07652. Any notice to the Trustees of the Trust shall be addressed to the Trustees of the Trust, 115 Central Park West, Apt. 4D, New York, New York 10023, with a copy to Andrew W. Regan, Esq. c/o Shearman & Sterling, 599 Lexington Avenue, New York, New York 10022. Any party may change his or its address by giving written notice of such change to the other party pursuant to this Section 8. + + 9. Entire Agreement. This Agreement is the entire agreement between the Company and the Trust with respect to the subject matter hereof and contains all of the agreements, whether written, oral, express or implied, between the Company and the Trust and supersedes any other agreement by and between the Company and the Trust except to the extent specifically set forth herein. + + 10. Amendment. The Company may amend or modify this Agreement at any time, but any such amendment or modification that would adversely affect the rights of the Trust + + 4 + +under this Agreement shall not be effective without the prior written consent of the Trustees of the Trust. + + 11. Termination. Notwithstanding any provisions of this Agreement to the contrary, this Agreement shall terminate upon the Trust's payment to the Company of the sum of the aggregate amount of the premiums paid under the Policy since inception (which amount includes the outstanding principal balance of the Demand Note). In the event this Agreement is terminated in accordance with this Section 11, the Company shall transfer the Policy to the Trust as soon as is administratively practicable. Payment of the foregoing amounts by the Trust to the Company will be full repayment of the Demand Note. + + 12. Governing Law. Except to the extent preempted by Employee Retirement Income Security Act of 1974, as amended ("ERISA"), all rights hereunder shall be governed by and construed in accordance with the laws of the State of New York without regard to its rules governing conflicts of laws, or the rules of any other jurisdiction which would cause the laws of any + + + + + +jurisdiction other than the State of New York to apply. If this Agreement is determined to be subject to ERISA, it is intended to be exempt from the reporting and disclosure provisions of ERISA pursuant to Section 104(a)(3) of ERISA and Department of Labor Regulation Section 2520.104-24. + + 13. Administration. If this Agreement is determined to be subject to ERISA, it shall be administered by the Company, or its designee (the "Plan Administrator"), which shall be the "named fiduciary" of this Agreement for purposes of ERISA. The Plan Administrator shall have the authority to make, amend, interpret, and enforce all rules and regulations for the administration of this Agreement and decide or resolve any and all questions, including interpretations of the Agreement, as may arise in connection with this Agreement. In the administration of this Agreement, the Plan Administrator from time to time may employ agents and delegate to them or to others (including executives of the Company) such administrative duties as it sees fit. The Plan Administrator from time to time may consult with counsel, who may be counsel to the Company. The decision or action of the Plan Administrator (or its designee) with respect to any question arising out of or in connection with the administration, interpretation and application of this Agreement shall be final and conclusive and binding upon all persons having any interest in this Agreement. The Company shall indemnify and hold harmless the Plan Administrator and any Company employee to whom administrative duties under this Agreement are delegated, against any and all claims, loss, damage, expense or liability arising from any action or failure to act with respect to this Agreement, except in the case of gross negligence or willful misconduct by the Plan Administrator or any such employee. + + 14. Claims Procedures. If this Agreement is subject to ERISA, any controversy or claim arising out of or relating to this Agreement shall be filed with the Plan Administrator or its designee which shall make all determinations concerning such claim. Any decision by the Plan Administrator denying such claim shall be in writing and shall be delivered to all parties in interest in accordance with the notice provisions of Section 8 hereof. Such decision shall set forth the reasons for denial in plain language. Pertinent provisions of the Agreement shall be cited and, where appropriate, an explanation as to how the claimant can perfect the claim will be provided. This notice of denial of benefits will be provided within ninety (90) days of the Plan Administrator's receipt of the claim for benefits. If the Plan + + 5 + +Administrator fails to notify the claimant of its decision regarding the claim, the claim shall be considered denied, and the claimant then shall be permitted to proceed with an appeal as provided for in this Section 14. + + A claimant who has been completely or partially denied a benefit shall be entitled to appeal this denial of his or her claim by filing a written statement of his or her position with the Plan Administrator no later than sixty (60) days after receipt of the written notification of such denial. The Plan Administrator shall schedule an opportunity for a full and fair review of the issue within thirty (30) days of receipt of the appeal. The decision on review shall set forth specific reasons for the decision, and shall cite specific references to the pertinent provisions of the Agreement on which the decision is based. + + Following the review of any additional information submitted by the claimant, either through the hearing process or otherwise, the Plan Administrator shall make its decision regarding the merits of the denied claim within sixty (60) days following receipt of the request for review (or within 120 days after such receipt, in a case where there are special circumstances requiring extension of time for reviewing the appealed claim). The Plan Administrator shall deliver the decision to the claimant in writing. If an extension of time for reviewing the appealed claim is required because of special circumstances, written notice of the extension shall be furnished to the claimant prior to the commencement of the extension. If the decision on review is not furnished within the prescribed time, the claim shall be deemed denied on review. + + 15. Successors. The terms and conditions of this Agreement shall inure to the benefit of and bind the Company, the Trust and their respective successors, assignees and representatives. + + 16. Gender. The masculine pronoun includes the feminine and the singular includes the plural where appropriate for valid construction. + + 17. No Contract of Employment. This Agreement shall not be deemed to constitute a contract of employment between Executive and the Company, nor shall any provision restrict the right of the Company to discharge Executive, or to restrict the right of Executive to terminate employment with the Company. + + 18. Counterparts. This Agreement may be executed by one or more of the parties hereto on any number of separate counterparts and all such counterparts shall be deemed to be one and the same instrument. Each party hereto confirms that any facsimile copy of such party's executed counterpart of this Agreement (or its signature page thereof) shall be deemed to + + 6 + +be an executed original thereof. + + IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of this 4th day of April, 2003. + + MOVADO GROUP, INC. + + + + + + By: /s/ Timothy F. Michno ------------------------------ Name: Timothy F. Michno Title: General Counsel + +THE GRINBERG FAMILY TRUST + +By: /s/ Efraim Grinberg ------------------------------------ Efraim Grinberg, Trustee + +By: /s/ Miriam G. Phalen ------------------------------------ Miriam G. Phalen, Trustee + +By: /s/ Alexander Grinberg ------------------------------------ Alexander Grinberg, Trustee \ No newline at end of file diff --git a/full_contract_txt/MPLXLP_06_17_2015-EX-10.1-TRANSPORTATION SERVICES AGREEMENT.txt b/full_contract_txt/MPLXLP_06_17_2015-EX-10.1-TRANSPORTATION SERVICES AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..9592b4d90624e8ce27611b74c9c0a334b22ff29b --- /dev/null +++ b/full_contract_txt/MPLXLP_06_17_2015-EX-10.1-TRANSPORTATION SERVICES AGREEMENT.txt @@ -0,0 +1,513 @@ +Exhibit 10.1 + +TRANSPORTATION SERVICES AGREEMENT + +THIS TRANSPORTATION SERVICES AGREEMENT (this "Agreement") is dated as of June 11, 2015, by and between Marathon Petroleum Company LP ("Shipper") and Marathon Pipe Line LLC, a Delaware limited liability company ("MPL"), both referred to jointly as the "Parties" and each individually as a "Party". + +WITNESSETH + +WHEREAS, MPL owns and operates a common carrier pipeline system originating in Ohio, as further depicted on Exhibit A, that will provide both interstate and intrastate common carrier transportation services; and + +WHEREAS, MPL also operates the assets of Ohio River Pipe Line LLC, a Delaware limited liability company ("ORPL") and an affiliate of MPL. ORPL is the owner of a common carrier pipeline system originating in Ohio, as further depicted on Exhibit A, that provides common carrier transportation services; and + +WHEREAS, MPL and ORPL desire to combine their systems (together referred to as the "Pipeline") under a Joint Agreement (as defined below) in order to undertake certain improvements to provide expanded capacity on portions of the Pipeline and install additional infrastructure to other portions of the Pipeline pursuant to a multi-phase capital project (the "Project"); and + +WHEREAS, MPL and ORPL conducted a joint binding open season with the understanding that MPL will file a joint tariff, commencing approximately 30 days prior to the in-service date of the Project, seeking binding commitments on the Pipeline; and + +WHEREAS, Shipper responded to the binding open season and desires to commit to transport a specified volume of Product (as defined below) on the Pipeline over a multi-year period to destinations as provided in Exhibit C, subject to and upon the terms and conditions of this Agreement; and + +WHEREAS, in exchange for the commitment by Shipper to transport a specific volume of Product on the Pipeline over a multi-year period, MPL will charge the rates as provided for in Exhibit B; and + +NOW THEREFORE, in consideration of the premises and mutual covenants set forth hereinafter, MPL and Shipper agree as follows: + +1. Definitions + +"Affiliate" means, with respect to any Person, any other Person that directly or indirectly through one or more intermediaries' controls, is controlled by or is under common control with, the Person in question. + +"Applicable Law" means any applicable statute, law, regulation, ordinance, rule, determination, judgment, rule of law, order, decree, permit, approval, concession, grant, franchise, license, requirement, or any similar form of decision of, or any provision or condition of any permit, license or other operating authorization issued by any Governmental Authority having or asserting jurisdiction over the matter or matters in question, whether now or hereafter in effect. "Barrel" means forty-two (42) U.S. gallons measured at sixty (60) degrees Fahrenheit. + +1 + + + + + +"Change in Law" means the adoption, implementation or amendment of any Applicable Law by any Governmental Authority after the Effective Date that causes MPL to incur additional expenses in order to operate the Pipeline in compliance with such Applicable Law. + +"Change in Law Event" means the occurrence of a Change in Law that necessitates the expenditure of Compliance Costs. + +"Compliance Costs" means the expenses in excess of $1,000,000 for a Change in Law Event, related specifically to the Department of Transportation, Pipeline and Hazardous Materials Safety Administration or Homeland Security, incurred by MPL to comply with a Change of Law, irrespective of whether such expenses are to be incurred as a onetime expenditure or periodically for an extended period. The definition for "Compliance Costs" shall in no way revise or modify the definitions of Change in Law or Change in Law Event. + +"Contract Year" means the period beginning on the project in-service date in conjunction with the FERC tariff filing, and ending 365 days later (366 days later for any such period that includes a February 29.) + +"Confidential Information" means any proprietary or confidential information that is competitively sensitive material or otherwise of value to a Party or its Affiliates and not generally known to the public, including trade secrets, scientific or technical information, design, invention, process, procedure, formula, improvements, product planning information, marketing strategies, financial information, information regarding operations, consumer and/or customer relationships, consumer and/or customer identities and profiles, sales estimates, business plans, and internal performance results relating to the past, present or future business activities of a Party or its Affiliates and the consumers, customers, clients and suppliers of any of the foregoing. Confidential Information includes such information as may be contained in or embodied by documents, substances, engineering and laboratory notebooks, reports, data, specifications, computer source code and object code, flow charts, databases, drawings, pilot plants or demonstration or operating facilities, diagrams, specifications, bills of material, equipment, prototypes and models, and any other tangible manifestation (including data in computer or other digital format) of the foregoing; provided, however, that Confidential Information does not include information that a receiving Party can show (a) has been published or has otherwise become available to the general public as part of the public domain without breach of this Agreement, (b) has been furnished or made known to the receiving Party without any obligation to keep it confidential by a third party under circumstances which are not known to the receiving Party to involve a breach of the third party's obligations to a Party or (c) was developed independently of information furnished or made available to the receiving Party as contemplated under this Agreement. + +"Construction Costs" means all costs and expenses incurred by MPL in connection with the Project, including, without limitation, those costs relating to design, asset modification or enhancement and developmental costs, whether internal or external. Such costs include all expenditures that have been committed to by MPL via purchase order, contract or otherwise, even if MPL has not remitted funds for the goods or services that are the subjects thereof. + +"Construction Cost Reimbursement" has the meaning set forth in Section 10.5. + +"Day" means a period of twenty-four (24) consecutive hours commencing 12:00 a.m. Central Standard Time, or such other period upon which the Parties may agree. + +2 + + + + + +"Deficiency Volume" has the meaning set forth in Section 3.5. + +"Deliveries" means the volume of Product delivered through the Pipeline. + +"Effective Date" has the meaning set forth in Section 2.1. + +"Election Deadline" has the meaning set forth in Section 6.6. + +"Expansion Notice" has the meaning set forth in Section 6.6. + +"Expansion Volume Commitment" has the meaning set forth in Section 6.6. + +"Extension Period" has the meaning set forth in Section 2.2. + +"FERC" means the Federal Energy Regulatory Commission. + +"Force Majeure" means acts of God, fires, floods, storms; compliance with orders of courts or Governmental Authorities; explosions, wars, terrorist acts, riots, strikes, lockouts or other industrial disturbances; accidental disruption of service; breakdown of machinery, storage tanks or pipelines and inability to obtain or unavoidable delays in obtaining material or equipment; and similar events or circumstances, so long as such events or circumstances are beyond the affected Party's reasonable control and could not have been prevented by the affected Party's due diligence; provided, however, that a Party's failure to pay any amounts due hereunder shall not constitute an event of Force Majeure. + +"Force Majeure Notice" has the meaning set forth in Section 5.1. + +"Force Majeure Period" has the meaning set forth in Section 5.1. + +"Governmental Authority" means any federal, state, local or foreign government or any provincial, departmental or other political subdivision thereof, or any entity, body or authority exercising executive, legislative, judicial, regulatory, administrative or other governmental functions or any court, department, commission, board, bureau, agency, instrumentality or administrative body of any of the foregoing. + +"Initial Term" has the meaning set forth in Section 2.2. + +"Joint Agreement" means the agreement between ORPL and MPL to undertake certain improvements to provide expanded capacity on portions of the ORPL systems and install additional infrastructure to portions of the MPL systems pursuant to a multi-phase capital project. This agreement will also establish a joint tariff between ORPL and MPL, which derives both entities local movements and rates. MPL will ultimately file the joint tariff. + +"Monthly Commitment" has the meaning set forth in Section 3.6. + +"Person" means any individual, partnership, limited partnership, joint venture, corporation, limited liability company, limited liability partnership, trust, unincorporated organization or Governmental Authority or any department or agency thereof. + +"Pre-Service Increase Request" has the meaning set forth in Section 3.9. + +"Prepaid Transportation Credits" has the meaning set forth in Section 3.6. + +3 + + + + + +"Product" means the commodities commonly associated as specialty petroleum products, specifically condensate, natural gasoline, and diluent. Product may also include liquefied petroleum gas commodities such as butane. Product, as designed in this Agreement, does not refer to finished gasoline and diesel products. + +"Project Capacity" means the aggregate of each system's total capacity that is made available for Product movements by means of the Project, by either expanding existing pipelines or building new pipelines. + +"Proportionate Share" means, at any given time, the percentage equal to Shipper's volume commitment divided by the total volume commitments at such time. + +"Quarter" means the three (3) calendar month periods, or portion thereof, commencing January 1, April 1, July 1 and October 1 of each year during Term hereof. + +"Quarterly Volume Commitment" means Shipper's commitment to ship, or otherwise pay for, each Contract Year of the fifteen (15) year term of this Agreement, at posted Pipeline Tariff Rates as set forth in Exhibit B, which equals a total annual Product volume as determined from Exhibit C. With respect to the required quarterly volume, the volume of Product is equal to: (a) volume per day multiplied by; (b) the number of Days in such Quarter. The Quarterly Volume Commitment will be reduced proportionately for any partial Quarter during the Term. + +"Representatives" has the meaning set forth in Section 7.1. + +"Requested Expansion Volume Commitment" has the meaning set forth in Section 6.6. + +"Shipper Deliveries" means the volume of Product that Shipper as the shipper of record delivered through the Pipeline. + +"Termination Notice" has the meaning set forth in 5.1. + +"Tariff" means the intrastate and/or interstate tariffs that set forth the rules, regulations and rates for services on the Pipeline, including supplements thereto and reissues thereof, under which Product is transported through the Pipeline. + +"Tariff Rates" means the rates set forth in the Tariffs for transportation of Product on the Pipeline. + +"Term" has the meaning set forth in Section 2.2. + +"Unsubscribed Capacity" has the meaning set forth in Section 3.9. + +1.1 The following Exhibits are attached to and incorporated into this Agreement: Exhibit A - Common Carrier Pipeline, including Origins and Destinations Exhibit B - Rate and Volume Commitment Table Exhibit C - Shipper's Submitted Capacity Request Form + +2. Effective Date and Term + +2.1 This Agreement is effective June 11, 2015 (the "Effective Date"). The Agreement shall continue through the project's in-service date and for a period of fifteen (15) years after the project's in-service date ("Initial Term"). MPL shall provide written notice to Shipper + +4 + + + + + +confirming the project's in-service date. Shipper acknowledges that the overall Project will be completed in several phases. New infrastructure will be completed first, with additional build-out projects and expansions completed in succession. MPL will provide a thirty (30) day notice to Shipper, notifying it of the actual in-service date for the included projects. + +2.2 This Agreement shall be binding upon the Parties under the same conditions and provisions for a time period commencing on the Effective Date and shall continue through the Initial Term. This Agreement will automatically renew for up to two (2) renewal terms of five (5) years each (each, an "Extension Period") unless either Party provides the other Party with written notice of its intent to terminate this Agreement at least six (6) months prior to the end of the Initial Term or the then current Extension Period. The Initial Term and Extension Period, if any, shall be referred to in this Agreement as the "Term". + +2.3 In the event Shipper does not wish to renew after the Initial Term or Extension Period or chooses to terminate the Agreement by written notice pursuant to Section 2.2, MPL reserves the option and right to hold a subsequent open season in which interested shippers can have opportunity to contract for resulting available volume, rate, and terms. + +3. Volume Commitment and Quarterly Deficiency Charges + +3.1 Shipper guarantees that during each Contract Year, Shipper will meet its Quarterly Volume Commitment or, in the event it fails to do so, shall remit to MPL the Quarterly Deficiency Payment pursuant to Section 3.5. All volumes moved by Shipper on the Pipeline will be subject to the applicable Tariff Rates and proration policies, as may be amended from time to time in accordance with FERC methodologies and as provided herein. + +3.2 Shipper will have the opportunity to fulfill its Quarterly Volume Commitment on a calendar quarter basis for condensate, natural gasoline, and diluent service. These three Products are interchangeable from a volume commitment standpoint and shipping a total volume of any one or combination of these Products will be applied towards the Quarterly Volume Commitment. Should MPL proceed with butane service, Shipper will also have the opportunity to fulfill its Quarterly Volume Commitment on a calendar quarter basis for butane service, separate from condensate, natural gasoline, and diluent service. + +3.3 Shipper shall be deemed to have shipped its Quarterly Volume Commitment on the Pipeline if the quantity of Product that Shipper ships on the Pipeline in any Quarter equals at least the Quarterly Volume Commitment for such Quarter. + +3.4 Shipper agrees to pay MPL monthly: (a) the Tariff Rates in effect for all Shipper Deliveries transported by MPL on the Pipeline during such month; and (b) any loading, handling, transfer and other charges incurred with respect to such Shipper Deliveries for such month in accordance with the provisions as set forth in the Tariffs (or any other tariffs that may be applicable to such Shipper Deliveries). If the amount owed by Shipper is the subject of a good faith dispute, Shipper shall be obligated to pay only the undisputed portion of such amount pending the resolution of such dispute in accordance with this Agreement. Late payments of undisputed amounts shall accrue interest at a rate equal to two percent (2%) per annum, until paid. Such payments will be paid by Shipper to MPL within fifteen (15) Days of the invoice date or resolution of any dispute, if applicable. + +5 + + + + + +3.5 Subject to the provisions of Section 5 of this Agreement, if the volume of each Product shipped by Shipper on the Pipeline during the Quarter is less than the applicable Quarterly Volume Commitment for that Product then, in addition to paying any amounts incurred by Shipper pursuant to Section 3.4 with respect to Shipper Deliveries for such Quarter, Shipper shall also pay MPL a deficiency payment (the "Quarterly Deficiency Payment"); equal to the product of: + +(a) the difference between the applicable Quarterly Volume Commitment for that Product for such Quarter and the volume of Shipper Deliveries of that Product on the Pipeline for such Quarter (the "Deficiency Volume"); and + +(b) the applicable Tariff Rate for that Product for such Quarter. + +Each Product to which the Shipper is obligated to move as part of its committed volumes will be added together for one total Quarterly Deficiency Payment. + +Shipper's transportation of commodities outside this Agreement's definition of Product will not satisfy the obligation to move committed Product volume. All Product barrels moved by Shipper in excess of its Quarterly Volume Commitment will be attributed to Shipper's movements on the Pipeline as a Regular Shipper, subject to the applicable Rules & Regulations of the Tariff. + +3.6 The dollar amount of any Quarterly Deficiency Payment paid by Shipper shall constitute prepayment for transportation of Product by Shipper on the Pipeline and will posted as a credit ("Prepaid Transportation Credits") to Shipper's account for that type of Product. If, during any Quarter of the Contract Year, Shipper deliveries on the Pipeline exceed the applicable Quarterly Volume Commitment requirements, Shipper shall be permitted to apply Prepaid Transportation Credits against any amount due from Shipper and payable to MPL with respect to the transportation of volumes on the Pipeline for such Quarter. Any Prepaid Transportation Credits that are not used by Shipper during the four (4) Quarters immediately following the Quarter for which said Prepaid Transportation Credits were posted to Shipper's account (the "Credit Period") will expire. Those Prepaid Transportation Credits that are in payment dispute in accordance with Section 3.4, shall be posted as a credit on the date the payment dispute is resolved. If during any such four (4) Quarter period the nominated volume on the Pipeline for any month equals or exceeds the applicable portion in the Quarterly Volume Commitment for the Pipeline for such month (the "Monthly Commitment"), but Shipper is prevented from shipping volumes in excess of the Monthly Commitment because of lack of available capacity, either because (a) the Pipeline is in allocation and Shipper is specifically subject to allocation per Exhibit C, (b) the Pipeline is undergoing testing, maintenance or repair, or (c) a Force Majeure has occurred that prevents MPL from transporting Shipper volumes on the Pipeline in excess of the Monthly Commitment, then the Credit Period shall be extended by an equivalent time period for which Shipper has been prevented from shipping volumes in excess of the Monthly Commitment. For the purposes of this Section 3.6, during the Term, if the Pipeline is in allocation for any portion of the month, the Pipeline will be considered to be in allocation for the entirety of such month. + +3.7 Notwithstanding anything in Section 3.5 to the contrary, upon the expiration or termination of this Agreement for any reason to the extent that Shipper, at the time of such expiration or termination, holds any unused Prepaid Transportation Credits, Shipper shall be permitted to apply such Prepaid Transportation Credits against any amounts incurred by Shipper and + +6 + + + + + +payable to MPL with respect to any Shipper deliveries on the Pipeline until the expiration of the applicable Credit Period with respect to such Prepaid Transportation Credits. This Section 3.7 shall survive the expiration or termination of this Agreement. + +3.8 Shipper may not apply Prepaid Transportation Credits on differing types of Products; i.e, a Shipper may not use Prepaid Transportation Credits received for butane service on condensate, natural gasoline, or diluent service, or vice versa. Condensate, natural gasoline, and diluent are interchangeable from a volume commitment standpoint and shipping a total volume of any one or combination of these Products will be applied towards the Quarterly Volume Commitment. Should MPL proceed with butane service, Shipper will also have the opportunity to fulfill its Quarterly Volume Commitment on a calendar quarter basis for butane service, separate from condensate, natural gasoline, and diluent service. + +3.9 If, following the binding open season and prior to the in-service date of the Tariff, MPL determines that it has available capacity not subscribed to during the binding open season, not to exceed 90% of Project Capacity ("Unsubscribed Capacity"), to the extent permitted by Governmental Authority; MPL will provide Shipper the right to increase its Quarterly Volume Commitment as submitted on its Capacity Request Form on Exhibit C. MPL will provide at least sixty (60) days' advance written notice, simultaneously, to all shippers (including Shipper) who have executed a transportation service agreement during the binding open season of the availability and volume of Unsubscribed Capacity for additional volume commitments (the "Additional Volume Commitments"). No later than thirty (30) days following the date of MPL's written notice, Shipper must provide MPL with a written binding commitment identifying the additional volumes to be added to its Quarterly Volume Commitment ("Pre-Service Increase Request"). In the event MPL receives Pre-Service Increase Requests that are, in aggregate, less than or equal to the Unsubscribed Capacity, each shipper's volume commitment shall be increased by the volume of its Pre-Service Increase Request. In the event MPL receives Pre-Service Increase Requests that would, in aggregate, exceed the Unsubscribed Capacity, all Shippers will be allocated their Pre-Service Increases pro rata based on their then- current volume commitments. If Shipper makes a Pre-Service Increase Request, MPL shall notify Shipper of its new Quarterly Volume Commitment within thirty (30) days following receipt of Shipper's Pre-Service Increase Request, and Exhibit C shall be deemed revised to reflect Shipper's new volume commitment, which shall equal the sum of its original Capacity Request Form volume commitment and its Pre-Service Increase Request or its allocated portion thereof pursuant to this Section 3.9. If there is still Unsubscribed Capacity after shippers (including Shipper) exercise Additional Volume Commitments as set forth above, MPL may conduct a second open season to obtain additional volume commitments for any remaining Unsubscribed Capacity. + +4. Transportation Charges + +4.1 Shipper shall pay MPL a transportation charge for each Barrel of Product shipped under the terms of this Agreement and Exhibit C, at the rates provided for in Exhibit B, which shall be the Tariff Rates for the volume commitment on the Day of delivery of Product. + +4.2 The rates in Exhibit B will be adjusted annually in accordance with the standard FERC annual oil pipeline indexing methodology in effect at the time of the escalation. There shall be no downward adjustment of the Rates in the event the annual FERC oil pipeline index rate is negative. Rates will typically be indexed during July of each year and would be first indexed in July of the year following project completion. + +7 + + + + + +4.3 If during the term of this Agreement, MPL becomes obligated as a result of a Change in Law Event to bear Compliance Costs, MPL shall have the right to increase the Tariff Rates on the Pipeline, including Shipper's committed rate as originally executed on Exhibit B in this Agreement or to impose a surcharge on its shippers (including Shipper) to recover such Compliance Costs. If MPL determines to recover any Compliance Costs from its shippers, it will do so in a manner that is reasonable and equitable to all shippers on the Pipeline. + +4.4 A "Committed Priority Shipper" will receive transportation service exempt from prorationing provisions under normal operating conditions for its contractually committed volumes, in exchange for a commitment to transport (or pay for) those volumes, pursuant to the terms of this Agreement executed during the open season process. The rates vary depending upon project options, but in all instances will be $0.01 per barrel above the rates for uncommitted service for the same origin and destination points. A Committed Priority Shipper will have the same rates as the Committed Non-Priority Shipper (as defined below), unless the system in under prorationing. When under prorationing, the Committed Priority Shipper's rate will be charged the premium rate of $0.01 above the posted uncommitted rate. Shipper shall not be a Committed Priority Shipper solely through this Agreement. Shipper must submit a Capacity Request Form during MPL's binding open season (Exhibit C) which confirms the Shipper has elected Committed Priority Shipper Status. + +4.5 A "Committed Non-Priority Shipper" will receive transportation service subject to prorationing provisions for its contractually committed volumes, in exchange for a commitment to transport (or pay for) those volumes, pursuant to the terms of this Agreement executed during the open season process. Those who elect to become a Committed Non-Priority Shipper will receive the benefit of discounted rates that will not be available to the Committed Priority Shippers or the uncommitted shippers. The rates will vary depending upon project options and commitment duration. MPL will not presume Shipper to be a Committed Non-Priority Shipper solely through this Agreement, unless the Capacity Request Form submitted by Shipper during MPL's binding open season (Exhibit C) shows the Shipper has elected Committed Non-Priority Shipper Status. + +5. Force Majeure + +5.1 As soon as possible upon the occurrence of a Force Majeure event, the affected Party shall provide the other Party written notice of the occurrence of such Force Majeure event (a "Force Majeure Notice"). A Party shall identify the full particulars and the approximate length of time that the Party reasonably believes in good faith such Force Majeure event shall continue (the "Force Majeure Period"). If a Party advises in any Force Majeure Notice that it reasonably believes in good faith that the Force Majeure Period shall continue for more than twelve (12) consecutive months, then, subject to Section 10 below, at any time after a Party delivers such Force Majeure Notice, either Party may terminate this Agreement, but only upon delivery to the other Party of a notice (a "Termination Notice") at least twelve (12) months prior to the expiration of the Force Majeure Period; provided, however, that such Termination Notice shall be deemed canceled and of no effect if the Force Majeure Period ends prior to the expiration of such twelve (12) months period. For the avoidance of doubt, neither Party may exercise its right under this Section 5.1 to terminate this Agreement as a result of a Force Majeure event with respect to any machinery, storage, tanks, lines of pipe or other equipment that has been unaffected by, or has been restored to working order since, the applicable Force Majeure event. + +8 + + + + + +5.2 Notwithstanding the foregoing, if Shipper delivers a Termination Notice to MPL and, within thirty (30) days after receiving such notice, MPL notifies Shipper that MPL reasonably believes in good faith that it shall be capable of fully performing under its obligations under this Agreement within a reasonable period of time, then the Shipper Termination Notice shall be deemed revoked and the applicable portion of this Agreement shall continue in full force and effect as if such Shipper Termination Notice had never been given. + +5.3 Subject to Section 6 of this Agreement, MPL's obligation to transport on the Pipeline may be temporarily suspended during occurrences of, and for the entire duration of, a Force Majeure event that prevents MPL from transporting on the Pipeline. If MPL is unable to transport due to a Force Majeure event or otherwise, then Shipper's obligation to ship the applicable Quarterly Volume Commitment and pay the applicable Quarterly Deficiency Payment shall be reduced to the extent that MPL is prevented from shipping the full applicable Quarterly Volume Commitment. At such time as MPL is capable of transporting volumes equal to the full applicable Quarterly Volume Commitment on the Pipeline, Shipper's obligation to ship the full Quarterly Volume Commitment shall be restored. + +6. Capabilities of the Pipeline System + +6.1 MPL shall use reasonable commercial efforts to minimize the disruption of service on the Pipeline and any portion thereof. MPL shall promptly inform Shipper of any anticipated partial or complete disruption of service on the Pipeline, including relevant information about the nature, extent, cause and expected duration of the disruption and the actions MPL is taking to resume full operations, provided that MPL shall not have any liability for any failure to notify, or delay in notifying, Shipper of any such matters except to the extent Shipper has been materially prejudiced or damaged by such failure or delay. + +6.2 Subject to Force Majeure, disruptions for routine repair and maintenance consistent with pipeline industry standards and any requirements of Applicable Law, MPL shall accept for shipment on the Pipeline in accordance with pipeline industry standard Product. Further, MPL shall maintain and repair all portions of the Pipeline in accordance with pipeline industry standards and in a manner which allows the Pipeline to be capable, subject to Force Majeure or temporary shutdown for pipeline testing and maintenance, of shipping, storing and delivering volumes of Product. + +6.3 If the Shipper has agreed to pay, pursuant to Exhibit B and Exhibit C, a premium rate for transportation of Product on the Pipeline, the Shipper Deliveries shall not be reduced under normal operating conditions if the capacity for Product shipments is otherwise subject to prorationing in accordance with the prorationing provisions in MPL's Rules and Regulations Tariff. + +6.4 If, for any reason, including without limitation a Force Majeure event, the capacity of the Pipeline is reduced, then (a) during such period of reduced capacity, Shipper's obligation shall be reduced as described above in this Section 6; and (b) within a reasonable period of time after commencement of such reduction, MPL shall make repairs to and/or replace the affected portion of the Pipeline to restore capacity. MPL shall use commercially reasonable efforts to continue to provide transportation of Product tendered by Shipper under the Tariffs while restoration is being completed. Any work performed by MPL pursuant to this Section 6.4 + +9 + + + + + +shall be performed and completed in a good and workmanlike manner consistent with applicable pipeline industry standards and in accordance with all applicable laws. + +6.5 Expansion of Pipeline. MPL reserves the right, at its sole discretion, to expand the capacity of the Pipeline at any time or from time to time. + +6.6 Right of Shipper to Secure Expansion Capacity. In the event that MPL decides in its sole discretion to expand the capacity of the Pipeline, then: + +(a) MPL will provide each Shipper with notice of such proposed expansion not less than one hundred and eighty (180) days prior to the expected in-service date of such proposed expansion ("Expansion Notice") and such Expansion Notice shall include: + +(i) the amount of the proposed expansion capacity; + +(ii) the expected rates and rules and regulations that will apply to such expansion capacity; + +(iii) the expected in-service date of such expansion/extension. + +The costs of any expansion shall not be rolled into the rates associated with any Pipeline capacity existing prior to such expansion. + +(b) To the extent permitted by Governmental Authorities, MPL will provide to each Shipper a first right, on terms and conditions specified by MPL that is consistent with this first right, to submit a binding nomination to ship, or otherwise pay for, a committed volume of Product on the expansion capacity ("Requested Expansion Volume Commitment"). The amount of expansion capacity available for volume commitments pursuant to this Section 6.6 shall not exceed ninety percent (90%) of the total expansion capacity. No later than sixty (60) days following the date of MPL's Expansion Notice, Shipper must commit to, in a form acceptable to MPL in MPL's sole discretion, its Requested Expansion Volume Commitment ("Election Deadline"). In the event that, pursuant to this first right, MPL receives binding commitments for volumes that exceed the expansion capacity available for committed volumes, each Shipper that submitted a binding commitment pursuant to this first right procedure shall be allocated the lesser of: (i) its Requested Expansion Volume Commitment, or (ii) the Shipper's pro-rata share of the expansion capacity available for committed volumes, which shall be calculated by multiplying (1) the Shipper's Proportionate Share, times (2) the expansion capacity available for committed volumes ("Expansion Volume Commitment"). MPL shall notify Shipper of its Expansion Volume Commitment within thirty (30) days following the Election Deadline, and the Parties shall promptly execute a new and separate transportation service agreement reflecting Shipper's Expansion Volume Commitment. Any calculation of an Expansion Volume Commitment shall be without regard to and shall not affect any Volume Commitment on pre-existing capacity. + +(c) In the event that any expansion capacity available for committed volumes remains after the procedure set forth in Section 6.6 is completed, MPL has the right, in its sole discretion, to offer such committed capacity pursuant to an open season in which all interested shippers will be given an opportunity to commit to transport a specified volume of Product on such remaining expansion capacity, subject to the terms and conditions specified by MPL pursuant to or in connection with such open season. + +10 + + + + + +7 Confidentiality + +7.1 From and after the Effective Date, each Party shall hold, and shall cause its Affiliates and its and their respective directors, managers, officers, employees, agents, consultants, advisors, contractors, and other representatives (collectively, "Representatives") to hold all Confidential Information of the other Party in strict confidence, with at least the same degree of care that applies to such Party's confidential and proprietary information and shall not use such Confidential Information except in connection with its performance or acceptance of services hereunder and shall not release or disclose such Confidential Information to any other Person, except its Representatives. Each Party shall be responsible for any breach of this Section 7 by any of its Representatives. + +7.2 If a Party receives a subpoena or other demand for disclosure of Confidential Information received from any other Party or must disclose to a Governmental Authority any Confidential Information received from such other Party in order to obtain or maintain any required governmental approval, the receiving Party shall, to the extent legally permissible, provide notice to the providing Party before disclosing such Confidential Information. Upon receipt of such notice, the providing Party shall promptly either seek an appropriate protective order, waive the receiving Party's confidentiality obligations hereunder to the extent necessary to permit the receiving Party to respond to the demand, or otherwise fully satisfy the subpoena or demand or the requirements of the applicable Governmental Authority. If the receiving Party is legally compelled to disclose such Confidential Information or if the providing Party does not promptly respond as contemplated by this Section 7, the receiving Party may disclose that portion of Confidential Information covered by the notice or demand. + +7.3 Each Party acknowledges that the disclosing Party would not have an adequate remedy at law for the breach by the receiving Party of any one or more of the covenants contained in this Section 7 and agrees that, in the event of such breach, the disclosing Party may, in addition to the other remedies that may be available to it, apply to a court for an injunction to prevent breaches of this Section 7 and to enforce specifically the terms and provisions of this Section 7. Notwithstanding any other section hereof, the provisions of this Section 7 shall survive the termination of this Agreement. + +8. Assignment + +8.1 Neither Party may assign its rights under this Agreement without prior written consent from the other Party, which consent shall not be unreasonably withheld; provided, however, that either Party may assign its rights under this Agreement to a successor in interest resulting from any merger, reorganization, consolidation or as part of a sale of all or substantially all of its assets. Subject to the foregoing, this Agreement shall bind and inure to the benefit of the successors and assigns of the Parties hereto. + +9. Representations and Warranties + +9.1 Each Party to this Agreement represents and warrants to the other that it is an entity duly organized, validly existing and in good standing under the laws of the state of its organization and has all requisite corporate power and corporate authority to enter into this Agreement and to carry out the terms and provisions hereof. + +11 + + + + + +9.2 MPL shall take reasonable steps to obtain all necessary approvals, and authorizations of all Governmental Authorities to modify and operate the Pipeline, including approval by FERC of the rate structure and any premium service, and all other approvals and authorizations necessary, in MPL's sole opinion, desirable in connection with the provision of Product transportation, in each case, in form and substance acceptable to MPL in its sole discretion. + +9.3 Shipper hereby agrees (a) to take all such actions and do all such things as MPL reasonably requests in connections with its application for, and the processing of necessary approvals and authorizations of the FERC and other governmental authorities, (b) at all times to support the rate and (c) to not, directly or indirectly, take any action that is designed to or may delay review or approval of the applications to FERC or any other Governmental Authority or indicate a lack of support for the modifications of the Pipeline or the rate. + +10. Termination and Amendment + +10.1 This Agreement may not be terminated, except as expressly provided herein, nor may any of its provisions be amended or waived without prior written consent of both Parties hereto. + +10.2 Neither failure nor delay by MPL or Shipper to exercise any right or remedy provided herein shall operate as a waiver with respect to a future exercise thereof, nor shall any single or partial exercise of any such right or remedy preclude any other or further exercise thereof or the exercise of any other right or remedy. + +10.3 Except as otherwise provided in Section 10.5, in the event of any breach of a term or condition of this Agreement by either Party, the other Party's remedy shall be limited to the direct damages caused thereby and in no event shall a Party be liable to the other Party for any consequential, indirect, pecuniary, punitive, or economic damages, howsoever caused. + +10.4 Upon termination of this Agreement for reasons other than a default by Shipper, pursuant to any provisions of this Agreement or any other termination of this Agreement initiated by Shipper pursuant to Section 5, Shipper shall have the right to require MPL to enter into a new transportation service agreement with Shipper that (a) is consistent with the terms and objectives set forth in this Agreement and (b) has commercial terms that are, in the aggregate, equal to or more favorable to Shipper than fair market value terms as would be agreed by similarly-situated parties negotiating at arm's length provided. + +10.5 Shipper acknowledges that MPL will incur certain building, expansion and improvement costs associated with its performance under this Agreement prior to the commencement of transportation service on the Pipeline. Shipper also acknowledges that MPL relied on the volume commitments received from Shipper on its Capacity Request Form in Exhibit C as part of an aggregate volume commitment received from all committed shippers during the binding open season to finalize the Project's ultimate scope, including but not limited to, pipe size, routing and destinations. If MPL is in compliance with the terms and conditions of this Agreement, and Shipper decides to terminate this Agreement after the Effective Date but prior to the commencement of transportation service on the Pipeline, Shipper shall notify MPL of its decision to terminate within one hundred and eighty (180) days of the Project's in-service date to allow MPL the opportunity to provide Shipper's unwanted capacity to other interested shippers as Unsubscribed Capacity as set forth in Section 3.8. If Shipper fails to notify MPL within one hundred and eighty (180) days of the Project's in-service date or if MPL is unsuccessful in obtaining additional volume commitments as provided for in Section 3.8 to + +12 + + + + + +fully replace Shipper's original volume commitment as submitted in its Capacity Request Form in Exhibit C, Shipper will reimburse MPL for Shipper's pro rata portion of actual and committed Construction Costs, plus, an administrative fee of ten (10) percent of said costs (such reimbursement is hereinafter referred to as the "Construction Cost Reimbursement"). The Parties agree that the Construction Cost Reimbursement shall be deemed liquidated damages and that such amount shall not be deemed a penalty, but rather represents a reasonable amount of liquidated damages in light of the anticipated or actual harm caused by Shipper's termination of this Agreement as stated, the difficulties of proof of loss, and the inconvenience or non- feasibility of otherwise obtaining an adequate remedy, and that the payment of such amount shall be MPL's sole and exclusive remedy for such termination by Shipper. + +10.6 The Parties acknowledge and agree that this Agreement may be contingent on the Shipper executing a reasonably acceptable commodity supply agreement. Shipper must notify MPL if it is unable to execute a reasonably acceptable commodity supply agreement within one hundred and eighty (180) days of the Project in-service date. Furthermore, Shipper must make commercially reasonable efforts to enter into a commodity supply agreement within the one hundred and eighty (180) days. Provided, however, that Shipper acknowledges and agrees that Shipper remains responsible for the Construction Cost Reimbursement provided for in Section 10.5 of this Agreement if it is unable to reach and execute a commodity supply agreement within the required timeframe. 11. Conditions Precedent + +Notwithstanding anything in this Agreement to the contrary, this Agreement is subject to the receipt by MPL of: + +11.1 All certificates, approvals and authorizations of any Governmental Authority deemed necessary or desirable by MPL in connection with this Agreement and, in each case, in form and substance acceptable to MPL in its sole discretion. + +11.2 Executed Transportation Service Agreements, in form and substance acceptable to MPL in its sole discretion, as MPL shall deem sufficient in its sole discretion to support the economic viability of the costs associated with the Project. + +11.3 Executed Transportation Service Agreements, in form and substance acceptable to both MPL and Shipper. + +If any terms of this Agreement are required to be modified in accordance with a decision, approval or authorization from FERC or any other governmental authority, the Parties agree to reasonably cooperate with one another in amending this Agreement to align with those decisions, approvals and authorizations from FERC or any other governmental agencies. If these conditions precedent are not satisfied for MPL after exercising commercially reasonable efforts to meet such condition precedent, MPL shall have the right to terminate this Agreement by written notice to Shipper. If this Agreement is terminated pursuant to this Section 11, MPL and Shipper shall be released from any and all obligations under this Agreement. + +12. Offer + +12.1 The submission of an unexecuted copy of this Agreement by MPL to Shipper shall not constitute an offer. + +13 + + + + + +12.2 Shipper acknowledges that, upon closing of the open season described in the notice of open season, MPL will undertake significant alterations and improvements and will incur significant expense in connection with the Project. In consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by Shipper, Shipper agrees that the submission of an executed Agreement to MPL shall constitute an offer by Shipper. Shipper further agrees that its offer shall remain irrevocable; provided, however, that if Shipper has not received an executed copy of this Agreement from MPL within sixty (60) days after the close of the Binding Open Season, Shipper may revoke its offer thereafter by written notice to MPL, and upon such revocation, this Agreement will become null and void. + +13. Notices + +13.1 Any notice, statement, or invoice provided for in this Agreement shall be in writing and shall be considered as having been given if hand carried, facsimiled, emailed, or if mailed by United States mail, postage prepaid, to the following address, respectively: + +Shipper : Name: Marathon Petroleum Company LP Address: 539 South Main Street Findlay, OH 45840 Attention: Optimization LP Manager Fax: (419) 421-4232 + +MPL : Name: Craig O. Pierson Address: 539 South Main Street Findlay, OH 45840 Attention: President Fax: (419) 421-3125 + +or to such other address as such Party may indicate by a notice delivered in accordance with this Section 13. + +14. Governing Law + +This Agreement shall be construed and interpreted in accordance with the laws of the State of Ohio, without recourse to any principles of law governing conflicts of law, which might otherwise be applicable. + +15. Severability + +In the event any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect by a court of competent jurisdiction, or by an empowered government agency, such findings shall not affect the remaining provisions of this Agreement, which are not found to be invalid, illegal or unenforceable, unless such construction would be unreasonable. + +14 + + + + + +16. Default + +16.1 Either Party hereunder shall be in default if such Party: (a) materially breaches any provision of this Agreement and such breach is not cured within fifteen (15) Days after notice thereof (which notice shall describe such breach in reasonable detail) is received by such Party; (b) becomes insolvent, enters voluntary or involuntary bankruptcy or makes an assignment for the benefit of creditors; (c) fails to pay any undisputed sums due hereunder; or (d) fails to provide satisfactory financial assurance as provided for in Section 17. + +16.2 If either Party is in default as described above, then the non-defaulting Party may: (a) terminate this Agreement upon notice to the defaulting Party; (b) withhold any payments due to the defaulting Party under this Agreement; and/or (c) pursue any other remedy at law or in equity if such breach is not remedied as provided for in Section 14.1. + +17. Credit Requirements and Financial Assurances + +17.1 Financial Information. Shipper shall provide to MPL, at any time: (i) upon MPL's request, information ("Financial Information") that will allow MPL to assess (or reassess) and establish creditworthiness and Shipper's capacity to perform any financial obligations that could arise from the transportation of Shipper's Crude Petroleum on the Pipeline; and (ii) upon MPL's good faith determination (which shall be no less than industry standards) of non-creditworthiness, MPL may request, financial assurance in respect of transportation or other services ("Financial Assurances"). Financial Assurances shall be limited to a guarantee from the parent company of Shipper in a form and substance acceptable to MPL and sufficient in amount to cover 6-months of Shipper's obligations to MPL so long as the guarantor has sufficient creditworthiness as set forth in this Section; and if not, MPL may then request an irrevocable standby letter of credit in a form and from an issuer acceptable to MPL, and in an amount no greater than 6-months of tolls based on the Quarterly Volume Commitment, plus all applicable taxes. + +17.2 As of the Project's in-service date, Shipper shall comply with the credit requirements and provide the financial assurances required in the Tariff so long as the Tariff is consistent with the terms of this Agreement. 17.3 Any failure of Shipper to comply with the provisions of this Section 17 will constitute an Event of Default under Section 16 of this Agreement. + +18. Miscellaneous + +18.1 Wherever possible, each provision hereof shall be interpreted in such a manner as to be effective and valid under Applicable Law, but in case any one or more of the provisions contained herein shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such provision or provisions shall be ineffective to the extent, but only to the extent, of such invalidity, illegality or unenforceability without invalidating the remainder of such provision or provisions or any other provisions hereof, unless such a construction would be unreasonable. + +18.2 This Agreement shall be binding upon and inure to the benefit of the Parties and their successors and permitted assigns; provided, however, that the rights and obligations of any Party under this Agreement shall not be assignable by such Party without the prior written consent of the + +15 + + + + + +other Party pursuant to Section 8.1. A Party's successors and permitted assigns shall include any permitted assignee as well as the successors in interest to such permitted assignee whether by merger, liquidation (including successive mergers or liquidations) or otherwise. + +18.3 No provision of this Agreement is intended to confer upon any third party any remedy, claim, liability, reimbursement or other right in excess of those existing without reference to this Agreement. + +18.4 Neither Party shall, without the approval of the other Party, make any press release or other public announcement concerning the transactions contemplated by this Agreement, except as and to the extent that either Party shall be so obligated by Applicable Law or the rules of any regulatory body, stock exchange or quotation system. + +18.5 EACH PARTY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY PROCEEDINGS RELATING TO THIS AGREEMENT OR ANY PERFORMANCE OR FAILURE TO PERFORM OF ANY OBLIGATION HEREUNDER. + +16 + + + + + +IN WITNESS WHEREOF, MPL and Shipper have caused this Agreement to be duly executed, all as of the date set forth above. + +MARATHON PIPE LINE LLC By: /s/ Craig Pierson 6/11/15 Name: Craig Pierson Title: President + +MARATHON PETROLEUM COMPANY LP By: MPC Investment LLC, its General Partner By: /s/ C. M. Palmer 4/13/15 Name: C. Michael Palmer Title: Sr. Vice President, Supply Distribution & Planning + +17 + + + + + +EXHIBIT A Common Carrier Pipeline, including Origins and Destinations + +Pipeline System New/Existing Pipeline Pipeline Owner Cornerstone Pipeline New MPL East Sparta to Lima Pipeline New MPL East Sparta to Heath Existing (Expansion) ORPL Heath to Findlay Existing (Expansion) ORPL RIO Existing (Reversal & Expansion) MPC Two Rivers Existing MPL Wabash Existing MPL + +The MPC RIO system is an existing private pipeline owned by Marathon Petroleum Company, LP (MPC). MPL may purchase the RIO system, with the intent to reverse and repurpose the system from common carrier movements. + +18 + + + + + +EXHIBIT B + +Tariff Rates + +19 + + + + + +EXHIBIT C + +Include copy of Shipper's submitted Capacity Request Form (CFR) indicating desired routes and destinations. + +Capacity Request Forms follow this page + +20 + + + + + +Appendix 5 - Capacity Request Form (CRF) - Ratable Volume(1) Please complete one form for each product type per delivery location + +Name of Shipper: Marathon Petroleum Company LP + +Term/Service [Priority, (5,10, 15 Year) Non-Priority] Priority 15 Year + +Product Type [Condensate, Natural Gasoline, Diluent or Butane]: Condensate + +Year Desired Volume Origination Location Delivery Location Rate 1 20,000 BPD Cadiz/Scio MPC Canton $ 2.26 2 20,000 BPD Cadiz/Scio MPC Canton $ 2.26 3 20,000 BPD Cadiz/Scio MPC Canton $ 2.26 4 20,000 BPD Cadiz/Scio MPC Canton $ 2.26 5 20,000 BPD Cadiz/Scio MPC Canton $ 2.26 6 20,000 BPD Cadiz/Scio MPC Canton $ 2.26 7 20,000 BPD Cadiz/Scio MPC Canton $ 2.26 8 20,000 BPD Cadiz/Scio MPC Canton $ 2.26 9 20,000 BPD Cadiz/Scio MPC Canton $ 2.26 10 20,000 BPD Cadiz/Scio MPC Canton $ 2.26 11 20,000 BPD Cadiz/Scio MPC Canton $ 2.26 12 20,000 BPD Cadiz/Scio MPC Canton $ 2.26 13 20,000 BPD Cadiz/Scio MPC Canton $ 2.26 14 20,000 BPD Cadiz/Scio MPC Canton $ 2.26 15 20,000 BPD Cadiz/Scio MPC Canton $ 2.26 (1) - Assumes shipper transports the same volume on a per day basis each month of the year Notes: Deliveries to Canton will begin in late 2016 and deliveries to other locations will begin in mid-2017 The tariff rate for the first year of movements can be found in Appendix 4 The tariff rate will be adjusted annually in accordance with the standard FERC annual oil pipeline indexing methodology + +Marathon Pipe Line LLC & Ohio River Pipe Line LLC CONFIDENTIAL AND PROPRIETARY + + + + + +Appendix 5 - Capacity Request Form (CRF) - Ratable Volume(1) Please complete one form for each product type per delivery location + +Name of Shipper: Marathon Petroleum Company LP + +Term/Service [Priority, (5,10, 15 Year) Non-Priority] Priority 5 Year + +Product Type [Condensate, Natural Gasoline, Diluent or Butane]: Natural Gasoline + +Year Desired Volume Origination Location Delivery Location Rate 1 10 MBPD Cadiz/Scio Hammond $ 6.96 2 10 MBPD Cadiz/Scio Hammond $ 6.96 3 10 MBPD Cadiz/Scio Hammond $ 6.96 4 10 MBPD Cadiz/Scio Hammond $ 6.96 5 10 MBPD Cadiz/Scio Hammond $ 6.96 6 0 MBPD Cadiz/Scio Hammond $ 6.96 7 0 MBPD Cadiz/Scio Hammond $ 6.96 8 0 MBPD Cadiz/Scio Hammond $ 6.96 9 0 MBPD Cadiz/Scio Hammond $ 6.96 10 0 MBPD Cadiz/Scio Hammond $ 6.96 11 0 MBPD Cadiz/Scio Hammond $ 6.96 12 0 MBPD Cadiz/Scio Hammond $ 6.96 13 0 MBPD Cadiz/Scio Hammond $ 6.96 14 0 MBPD Cadiz/Scio Hammond $ 6.96 15 0 MBPD Cadiz/Scio Hammond $ 6.96 (1) - Assumes shipper transports the same volume on a per day basis each month of the year Notes: Deliveries to Canton will begin in late 2016 and deliveries to other locations will begin in mid-2017 The tariff rate for the first year of movements can be found in Appendix 4 The tariff rate will be adjusted annually in accordance with the standard FERC annual oil pipeline indexing methodology + +Marathon Pipe Line LLC & Ohio River Pipe Line LLC CONFIDENTIAL AND PROPRIETARY + + + + + +Appendix 5 - Capacity Request Form (CRF) - Non-Ratable Volume(2) Please complete one form for each product type per delivery location + +Name of Shipper: Marathon Petroleum Company LP + +Term/Service [Priority, (5,10, 15 Year) Non-Priority] Priority 5 Year + +Product Type [Condensate, Natural Gasoline, Diluent or Butane]: Normal Butane + +(2) - Assumes shipper transports a different volume on a per day basis each month of the year Notes: Deliveries to Canton will begin in late 2016 and deliveries to other locations will begin in mid-2017 The tariff rate for the first year of movements can be found in Appendix 4 The tariff rate will be adjusted annually in accordance with the standard FERC annual oil pipeline indexing methodology + +Marathon Pipe Line LLC & Ohio River Pipe Line LLC CONFIDENTIAL AND PROPRIETARY + + + + + +Appendix 5 - Capacity Request Form (CRF) - Non-Ratable Volume(2) Please complete one form for each product type per delivery location + +Name of Shipper: Marathon Petroleum Company LP + +Term/Service [Priority, (5,10, 15 Year) Non-Priority] Priority 5 Year + +Product Type [Condensate, Natural Gasoline, Diluent or Butane]: Normal Butane + +(2) - Assumes shipper transports a different volume on a per day basis each month of the year + +Notes: Deliveries to Canton will begin in late 2016 and deliveries to other locations will begin in mid-2017 The tariff rate for the first year of movements can be found in Appendix 4 The tariff rate will be adjusted annually in accordance with the standard FERC annual oil pipeline indexing methodology + +Marathon Pipe Line LLC & Ohio River Pipe Line LLC CONFIDENTIAL AND PROPRIETARY + + + + + +Appendix 5 - Capacity Request Form (CRF) - Non-Ratable Volume(2) Please complete one form for each product type per delivery location + +Name of Shipper: Marathon Petroleum Company LP + +Term/Service [Priority, (5,10, 15 Year) Non-Priority] Priority 5 Year + +Product Type [Condensate, Natural Gasoline, Diluent or Butane]: Normal Butane + +(2) - Assumes shipper transports a different volume on a per day basis each month of the year Notes: Deliveries to Canton will begin in late 2016 and deliveries to other locations will begin in mid-2017 The tariff rate for the first year of movements can be found in Appendix 4 The tariff rate will be adjusted annually in accordance with the standard FERC annual oil pipeline indexing methodology + +Marathon Pipe Line LLC & Ohio River Pipe Line LLC CONFIDENTIAL AND PROPRIETARY \ No newline at end of file diff --git a/full_contract_txt/MRSFIELDSORIGINALCOOKIESINC_01_29_1998-EX-10-FRANCHISE AGREEMENT.txt b/full_contract_txt/MRSFIELDSORIGINALCOOKIESINC_01_29_1998-EX-10-FRANCHISE AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..7690617baa7646f249cdd32ed389bd123073e58a --- /dev/null +++ b/full_contract_txt/MRSFIELDSORIGINALCOOKIESINC_01_29_1998-EX-10-FRANCHISE AGREEMENT.txt @@ -0,0 +1,1593 @@ +FRANCHISE AGREEMENT TABLE OF CONTENTS + +1. INTRODUCTION AND DEFINITIONS.......................................1 1.A. INTRODUCTION..............................................1 1.B. DEFINITIONS...............................................3 + +2. GRANT OF FRANCHISE RIGHTS..........................................7 2.A. GRANT OF FRANCHISE........................................7 2.B. PRINCIPAL OWNERS' GUARANTY................................7 2.C. TERRITORIAL RIGHTS........................................8 2.D. RESERVATION OF RIGHTS.....................................8 2.E. OPTION TO DEVELOP OTHER SITES WITHIN THE TERRITORY........9 2.F. TERM OF FRANCHISE.........................................9 + +3. OTHER DISTRIBUTION METHODS........................................10 3.A. SPECIAL DISTRIBUTION ARRANGEMENTS........................10 + +4. FRANCHISE AND OTHER FEES..........................................10 4.A. INITIAL FRANCHISE FEE....................................10 4.B. DEFERRAL OF FRANCHISE FEE................................10 4.C. ROYALTY FEE..............................................10 4.D. ADVERTISING FUND FEE.....................................11 4.E. TRANSFER FEE.............................................11 4.F. FEES FOR ADDITIONAL FRANCHISES...........................11 4.G. FEES FOR RENEWAL OF FRANCHISE............................12 4.H. PAYMENT BY ELECTRONIC FUNDS TRANSFER.....................12 4.I. LATE CHARGE AND INTEREST. ...............................12 + +5. RENEWAL OF FRANCHISE TERM.........................................13 5.A. FRANCHISEE'S RIGHT TO A SUCCESSOR FRANCHISE..............13 5.B. RELEASES.................................................14 5.C. NOTICES..................................................15 + +6. TRADEMARKS AND LIMITATIONS........................................15 6.A. OWNERSHIP OF MARKS.......................................15 6.B. DISCONTINUANCE OF USE OF MARKS...........................16 6.C. CORPORATE NAME...........................................16 6.D. TERMINATION..............................................17 6.E. TRADEMARK ENFORCEMENT....................................17 6.F. USE OF SERVICE MARK......................................17 + +7. SELECTION OF FRANCHISE LOCATION...................................18 7.A. SITE SELECTION...........................................18 7.B. LEASE....................................................18 7.C. RELOCATION...............................................20 + +8. DEVELOPMENT OF UNIT...............................................21 8.A. UNIT DESIGN SPECIFICATIONS AND CONSTRUCTION PLANS........21 8.B. DEVELOPMENT OF THE UNIT..................................21 8.C. EQUIPMENT, FIXTURES, FURNISHINGS, AND SIGNS..............22 8.D. EXCEPTIONS TO EQUIPMENT OR FURNISHINGS...................22 8.E. CONSTRUCTION ASSISTANCE..................................23 8.F. LIMITATION ON LIABILITY..................................23 + +9. UNIT OPENING......................................................24 9.A. COMMENCEMENT OF OPERATIONS...............................24 + +10. FRANCHISEE TRAINING...............................................24 10.A. INITIAL TRAINING.........................................24 10.B. EMPLOYEE TRAINING........................................25 10.C. ON-SITE TRAINING...........................................26 10.D. COMPANY GROWTH...........................................26 10.E. RETRAINING PROGRAMS......................................26 10.F. OTHER GUIDANCE...........................................26 + +11. ADVERTISING AND OTHER PROMOTIONS..................................27 11.A. PROVIDING OF ADVERTISING MATERIALS.......................27 11.B. CONTROL OF ADVERTISING PROGRAMS AND CONCEPTS.............27 11.C. SEGREGATION OF ADVERTISING FUND..........................28 11.D. SUSPENSION OF ADVERTISING FUND FEES......................29 11.E. FRANCHISEE'S REQUIRED ADVERTISING EXPENDITURES...........29 11.F. USE OF TRADEMARK REFERENCES AND APPROVAL............... OF FRANCHISEE'S MARKETING..............29 + +12. ADHERENCE TO UNIFORM STANDARDS....................................30 12.A. STANDARDS AND OPERATIONS MANUAL..........................30 12.B. CONFIDENTIALITY OF OPERATIONS MANUAL.....................32 12.C. INCORPORATION OF OPERATIONS MANUAL INTO AGREEMENT........32 12.D. MODIFICATIONS/UPDATES OF OPERATIONS MANUAL...............33 + +13. UNIT IMAGE AND OPERATION..........................................33 13.A. CONDITION AND APPEARANCE OF UNIT.........................33 13.B. UNIT MENU..................................................35 13.C. ADHERENCE TO APPROVED ITEMS..............................35 13.D. EXCEPTION PROCESS........................................36 13.E. PROMOTIONAL ALLOWANCES.....................................37 + +14. FRANCHISEE OPERATIONS.............................................37 14.A. MANAGEMENT...............................................37 14.B. SUFFICIENT WORKING CAPITAL.................................38 14.C. FILING OF OPERATIONS AND SALES REPORTS.....................38 14.D. EMPLOYEE DRESS AND CUSTOMER SERVICE......................38 + + + + + + 14.E. COMPLIANCE WITH LAWS AND GOOD BUSINESS PRACTICES...........38 14.F. PAYMENT OF TAXES.........................................39 14.G. SALE OF PRODUCT..........................................39 14.H. COOPERATION..............................................39 14.I. INSURANCE................................................39 14.J. SUGGESTED RETAIL PRICES..................................40 + +15. ACCOUNTING, REPORTS AND FINANCIAL STATEMENTS......................41 15.A. ESTABLISHMENT OF ACCOUNTING SYSTEM.........................41 15.B. MAINTENANCE OF RECORDS....................................41 + +16. AUDITS AND INSPECTIONS............................................42 16.A. AUDITS...................................................42 16.B. RIGHT OF ENTRY AND INSPECTION............................42 + +17. TRANSFER, ASSIGNMENT AND REPURCHASE. .............................43 17.A. BY PRETZEL TIME............................................43 17.B. BY FRANCHISEE..............................................43 17.C. CONDITIONS FOR APPROVAL OF TRANSFER........................44 17.D. TRANSFER TO A WHOLLY-OWNED CORPORATION...................45 17.E. FORMATION OF A CORPORATION.................................46 17.F. DEATH OR DISABILITY OF FRANCHISEE..........................47 17.G. PRETZEL TIME'S FIRST RIGHT OF REFUSAL....................47 17.H. PUBLIC OR PRIVATE OFFERINGS..............................48 + +18. TERMINATION OF AGREEMENT BY FRANCHISEE............................49 18.A. FRANCHISEE'S RIGHT TO TERMINATE............................49 + +19. DEFAULT AND TERMINATION...........................................50 19.A. EXACT AND COMPLETE PERFORMANCE REQUIRED....................50 19.B. DEFAULT AND RIGHT TO CURE................................50 19.C. EXTENSION OF NOTICE........................................50 19.D. REPEATED BREACHES..........................................50 19.E. EVENTS OF DEFAULT - 30 DAYS NOTICE - CURABLE DEFAULTS....51 19.F. EVENTS OF DEFAULT - IMMEDIATE TERMINATION - NO RIGHT TO CURE............................................53 + +20. RIGHTS AND OBLIGATIONS OF PRETZEL TIME AND FRANCHISEE UPON TERMINATION OR EXPIRATION OF THE FRANCHISE..................................56 20.A. AMOUNTS OWED...............................................56 20.B. DISCONTINUANCE OF MARKS..................................56 20.C. RETURN OF MATERIALS......................................57 20.D. TELEPHONE COMPANY........................................57 20.E. CONFIDENTIAL INFORMATION.................................58 20.F. LEASING..................................................58 20.G. COVENANT NOT TO COMPETE..................................58 20.H. PRETZEL TIME'S RIGHT TO PURCHASE ASSETS OF THE UNIT........59 + +21. RELATIONSHIP OF THE PARTIES/INDEMNIFICATION.......................60 21.A. EXCLUSIVE RELATIONSHIP...................................60 21.B. NO LIABILITY FOR ACTS OF OTHER PARTY.......................61 21.C. TAXES....................................................61 21.D. INDEMNIFICATION..........................................62 21.E. INDEPENDENT CONTRACTOR.....................................62 + +22. PROTECTION OF TRADE SECRETS.......................................63 22.A. CONFIDENTIAL INFORMATION...................................63 22.B. DISCLOSURE OF IDEAS AND NEW PROCEDURES.....................64 + +23. ENFORCEMENT.......................................................65 23.A. UNAVOIDABLE DELAYS.......................................65 23.B. RIGHTS OF PARTIES ARE CUMULATIVE.........................65 23.C. WAIVER OF OBLIGATIONS....................................65 23.D. CONTINUING OBLIGATIONS...................................66 23.E. INVALID OR UNENFORCEABLE PROVISIONS......................66 23.F. INJUNCTIVE RELIEF..........................................66 23.G. APPLICABLE LAW...........................................67 23.H. ENTIRE STATUS OF AGREEMENT...............................67 23.I. AMENDMENT OF AGREEMENT...................................67 23.J. HEIRS, SUCCESSORS AND ASSIGNS............................67 23.K. CONDITIONS AND CONTINGENCIES.............................67 23.L. WAIVER BY PRETZEL TIME...................................68 23.M. COSTS AND EXPENSES OF ENFORCEMENT........................68 23.N. RIGHTS OF PARTIES ARE CUMULATIVE ........................69 23.O. WAIVER OF JURY TRIAL.....................................69 23.P. WAIVER OF PUNITIVE DAMAGES.................................69 23.Q. EXCLUSIVE JURISDICTION.....................................69 23.R. LIMITATIONS OF CLAIMS....................................69 + +24. ACKNOWLEDGMENTS AND REPRESENTATIONS...............................70 + +25. CONSTRUCTION......................................................70 25.A. HEADINGS.................................................70 25.B. TERMINOLOGY................................................70 25.C. COUNTERPARTS.............................................71 25.D. REASONABLENESS.............................................71 + +26. SECURITY AGREEMENT................................................70 26.A. SECURITY INTEREST........................................71 26.B. DEFAULT REMEDIES UNDER U.C.C...............................72 + +27. NOTICES...........................................................72 27.A. DELIVERY OF NOTICES......................................72 + + + + + +EXHIBITS + + FRANCHISE ACKNOWLEDGMENTS AND REPRESENTATIONS STATEMENT . . . . . . . . . . . . . . . . . . . . . . .. A + + PRINCIPAL OWNER, OTHER OWNERS, DESIGNATED PRINCIPAL OWNERS, UNIT AND MANAGER, SUPERVISING OWNERS AND INITIAL CAPITALIZATION . . . . . . . . . . . . . . . .. . . . B + + PERMITTED COMPETITIVE BUSINESSES, FORM DEVELOPMENT AGREEMENT (FOR SINGLE-UNIT FRANCHISES), IDENTITY OF DEVELOPER AND DATE OR DEVELOPMENT AGREEMENT . . . .C + + OWNER'S AND GUARANTOR'S UNDERTAKING AND ASSUMPTION OF OBLIGATIONS. . . . . . . . . . . . . . . . . . . . . . . . . . D + + AUTHORIZATION AGREEMENT FOR PREARRANGED PAYMENTS (DIRECT DEBITS). E + + UNIT SITE AGREEMENT . . . . . . . . . . . . . . . F + + COLLATERAL ASSIGNMENT OF TELEPHONE NUMBERS AND LISTINGS . . G + + MUTUAL CONFIDENTIALITY AGREEMENT . . .H + + TCBY YOGURT PRODUCTS ADDENDUM . . . . . . I + +FRAN.AGT 6.5.96 + + SATELLITE UNIT ADDENDUM . . . . . . . . . . . . . . J + + RELEASE AGREEMENT . . . . . . . . . . . . . . K + + THIRD PARTY ASSIGNMENT AGREEMENT . . . . . . . . . L + + SUBLEASE . . . . . . . . . . . . . . . . . M + + COLLATERAL ASSIGNMENT OF LEASE . . . . . . . . . N + + PRETZEL TIME, INC. FRANCHISE AGREEMENT + + This agreement is made and entered into this day of , 19 (hereinafter referred to as "Effective Date") by and between Pretzel Time, Inc., a Pennsylvania corporation with its principal place of business at 4800 Linglestown Road, Suite 202, Harrisburg, Pennsylvania 17112 trading and doing business as Pretzel Time (hereinafter referred to as Pretzel Time) and Franchisee (as defined below) who hereby agrees to the following: + +Franchisee: + +, + +a + +, + +with its principal address at: + + NOW THEREFORE, in consideration of the mutual covenants herein contained, and intending to be legally bound hereby, the parties agree as follows: + +1. INTRODUCTION AND DEFINITIONS. + + 1.A. INTRODUCTION. + + Pretzel Time and its Affiliates (as defined below) have developed and continue to develop methods of operating food service businesses, including the food service business referred to in this Agreement as a Pretzel Time Unit (defined below), which feature Products (defined below) for off premises consumption. Pretzel Time has established quality products and services which will continue to be a unique benefit to Pretzel Time and its Franchisees. In addition to off-premises dining, Pretzel Time may, in its sole discretion, offer to a Pretzel Time Unit the right to offer TCBY frozen yogurt and other TCBY yogurt products. Pretzel Time Units operate at locations that feature a distinctive food service format and Trade Dress (defined below) and utilize distinctive business formats, specifications, employee selection and training programs, signs, equipment, layouts, unit fronts, operation systems, recipes, + + + + + +methods, procedures, designs and marketing and advertising standards and formats, all of which Pretzel Time may modify from time to time in its sole discretion (the" Pretzel Time System"). Pretzel Time operates, and franchises certain qualified persons and entities to license and grants the privildge to operate, Pretzel Time Units using the Pretzel Time System and the Marks (defined below). + + Pretzel Time has developed and perfected a System for providing to the public, at retail, in an efficient manner, a variety of distinctive, hand-rolled soft pretzels, pretzel-related products (such as pretzel dogs), beverages, and complimentary pretzel toppings. These Products and services which comprise a part of the Pretzel Time System are delineated and set forth in detail in the Pretzel Time Operations Manual (hereinafter "Operations Manual"). These Pretzel Time Units, which may include stores, carts, and kiosks, are known as "Pretzel Time Units". + + Franchisee acknowledges and agrees that Pretzel Time has expended a considerable amount of time and effort in developing and refining the recipes for, the methods of preparation of, the Products. Pretzel Time may from time to time modify such recipes and methods of preparation, which may include requiring Franchisee to prepare pretzels and other Products from scratch mixes and to purchase prepared food products from Pretzel Time or an approved Pretzel Time Affiliate. Pretzel Time and its Affiliates currently operate and will continue to operate Pretzel Time Units offering and selling the Products. Pretzel Time franchises others to operate Pretzel Time Units and other outlets offering and selling the Products. Pretzel Time owns, uses, promotes and franchises certain trade names, trademarks, service marks and other commercial symbols, including the trade and service marks, "Pretzel Time" and associated logos, which have gained and continue to gain public acceptance and goodwill, and may hereafter create, use and franchise additional trademarks, service marks and commercial symbols in conjunction with the operation of Pretzel Time Units. + + The distinguishing characteristics of the Pretzel Time System include, but are not limited to, the following: + + (a) The Pretzel Time trade name and in combination with other commercial symbols owned by Pretzel Time with a color scheme pattern, Unit design, insignia, slogans, coordinating Pretzel Time's overall operation, retail facilities, advertising, training, and other related matters; + + (b) A developed marketing concept and uniform procedure for the operation of a Pretzel Time Unit, including stylized designs and display facilities to provide the highest quality of Pretzel Time pretzels, soft beverages, toppings and other Pretzel Time-approved products; and + + (c) Rules of operation and a procedure for operating and training Franchisees, managers and employees. + + Franchisee recognizes the benefits to be derived from being identified with and licensed by Pretzel Time, and being able to utilize the Pretzel Time System of retailing Pretzel Time Products and related products, service and trademarks which Pretzel Time makes available to its Franchisees. Franchisee has applied for a franchise to operate a Pretzel Time Unit at the Site (defined below). Franchisee's application and the Site have been approved by Pretzel Time in reliance upon all of the representations made in such application and the Franchisee's Acknowledgments and Representations Statement, a copy of which is attached hereto as Exhibit A, which shall be executed by Franchisee concurrently with this Agreement. Franchisee desires to operate a Pretzel Time Franchise pursuant to the provisions hereof and at the Site specified herein, and Franchisee has had a full and adequate opportunity to be thoroughly advised of the terms and conditions of this Franchise Agreement by legal counsel of its own choosing. + + 1.B. DEFINITIONS. + + For purposes of this Agreement, the terms listed below have the following meanings: Other terms used in this Agreement are defined and construed in the context in which they occur. + + "Affiliate" - Any person or legal entity that directly or indirectly owns or controls Pretzel Time, that is directly or indirectly owned or controlled by Pretzel Time, or that is under common control with Pretzel Time. For purposes of this definition, "control" means the power to direct or cause the direction of the management and policies of an entity. + + "Cart" - It is a type of Pretzel Time Unit which is free-standing and sells Pretzel Time pretzels and other Pretzel Time-approved Products which are produced or manufactured at a co-existing Kiosk (defined below) or Store (defined below) situated in the Territory. + + "Competitive Business" - A business or enterprise, other than a Pretzel Time Unit, that: (1) Offers food products which are the same as or similar to the products for consumer consumption off premises or other distribution channels; or (2) Grants or has granted franchises or licenses or establishes or has established joint ventures for the development and/or operation of a business or an enterprise described in the foregoing clause (1). + + "Controlling Interest" - An interest, the ownership of which empowers the holder thereof to exercise a controlling influence over the management, policies or personnel of an entity on any issue and shall prevent any other person, group, combination, or entity from blocking voting control on any issue or exercising any veto power. If a limited partnership, a general partnership interest or such percentage of limited partnership interests as shall permit the + + + + + +replacement or removal of any general partner. Without limiting the generality of the foregoing, ownership of forty percent (40%) or more of the equity or voting securities of a corporation or ownership of any general partnership interest in a partnership or joint venture shall be deemed conclusively to constitute a Controlling Interest in the corporation, partnership, or joint venture, as the case may be. + + "Area Developer's Agreement" - Agreement pursuant to which an area developer is granted the right to develop one (1) or more Pretzel Time Units in a geographic area in which the Unit is located. + + "Franchisee" - The party to whom the Franchise is granted by the Franchisor, Pretzel Time, Inc. The term is applicable to one or more persons, a corporation or a partnership, as the case may be. If two or more persons are at any time the Franchisee hereunder, their obligations and liabilities to Pretzel Time shall be joint and several. References to Franchisee and assignee which are applicable to an individual or individuals shall mean the Owner (defined below) or Principal Owners (defined below) of the equity or operating control of the Franchisee or the assignee, if the Franchisee or the assignee is a corporation or partnership. + + "Net Revenues" - For purposes of this Agreement, the term "Net Revenues" includes all gross sums, monies and other consideration received by Franchisee of every kind and nature from sales and services made in, upon, or from any and all retail Units operated by Franchisee under the Pretzel Time Marks in his Territory, whether upon credit or for cash, without reserve or deduction for inability or failure to collect, less all refunds and allowances, if any, given in good faith to customers, and any sales, use or excise taxes which are separately stated and which Franchisee pays to any federal, state or local tax authority. + + "Immediate family" - (1) The spouse of a person; and (2) the natural and adoptive parents and natural and adopted children and siblings of such person and their spouses; and (3) the natural and adoptive parents and natural and adopted children and siblings of the spouse of such person; and (4) any other member of the household of such person. + + "Interest" - Eighteen percent (18%) per annum for the number of days overdue or the highest applicable rate allowed by law. + + "Kiosk" - Is a type of Pretzel Time Unit, which is a free-standing enclosed area located within the common area of a mall which can manufacture and sell Pretzel Time pretzels and other Pretzel Time-approved Products without the co-existence of a Pretzel Time Store within the territory. + + "Marks" - The trademarks, service marks, logos and other commercial symbols which Pretzel Time authorizes Franchisee to use to identify the services and/or products offered by Pretzel Time Units, including the mark "Pretzel Time" and the Trade Dress (defined below); provided that such trademarks, service marks, logos, other commercial symbols and the Trade Dress are subject to modification and discontinuance at Pretzel Time's sole discretion and may include additional or substitute trademarks, service marks, logos, commercial symbols and Trade Dress as provided in this Agreement. + + "Owner" - Each person or entity holding direct or indirect, legal or beneficial Ownership Interests (defined below) in Franchisee and each person who has other direct or indirect property rights in Franchisee, this Agreement, the Franchise or the Unit and as designated in Exhibit B attached and incorporated herein. + + "Ownership Interests" - In relation to a: (i) corporation, the legal or beneficial ownership of shares in the corporation; (ii) partnership, the legal or beneficial ownership of a general or limited partnership interest; or (iii) trust, the ownership of a beneficial interest of such trust. + + "Permanent Disability" - A mental or physical disability, impairment or condition that is reasonably expected to prevent or actually does prevent Franchisee or an Owner of a Controlling Interest in Franchisee from supervising the management and operation of the Unit for a period of six (6) months from the onset of such disability, impairment or condition. + + "Permitted Competitive Business" - A business which constitutes a Competitive Business and is disclosed in Exhibit C which shall be made by Franchisee and Owners as of the date of this agreement provided that such business does not offer hard or soft pretzels, or yogurt on its menu. + + "Pretzel Time Unit" - A food service business that: + + (1) offers Products for consumer consumption off-premises, provided that Pretzel Time, may in its sole discretion, authorize and/or require such business to offer TCBY yogurt products pursuant to a Yogurt Product Addendum (defined below) or to operate Special Distribution Arrangements pursuant to a Special Distribution Agreement (defined below); and + + (2) operates using the Pretzel Time System and the Marks; and + + (3) is either operated by Pretzel Time or its Affiliates or pursuant to a valid franchise from Pretzel Time. + + Pretzel Time Units are of three types: stores, carts, and kiosks. + + "Principal Owner" - Each Owner which: + + + + + + (1) is a general partner in Franchisee; or + + (2) has a direct or indirect equity interest: + + (a) in Franchisee of twenty percent (20%) or more (regardless of whether such Owner is entitled to vote thereon); or + + (b) in any Pretzel Time unit; or + + (3) is designated as a Principal Owner in Exhibit B of this Agreement. + + "Products" - Products approved or required by Pretzel Time from time to time in its sole discretion for sale at or from Pretzel Time Units, including, without limitation, hand-rolled soft pretzels of various flavors including, without limitation, chocolate chip, raisin, honey-wheat, and cinnamon, frozen pretzels and other pretzel-related products and toppings, frozen yogurt, beverages, and other Pretzel Time-approved products, provided that the foregoing products are subject to modification or discontinuance in Pretzel Time's sole discretion from time to time and may + +include additional or substitute products. + + "Site" - The location of the Pretzel Time Unit as described in this Agreement. The term refers to the inside of the four walls of the Unit premises. + + "Special Distribution Agreement" - A separate agreement whereby Pretzel Time authorizes a Franchisee of a Pretzel Time Unit to operate a Special Distribution Arrangement at a Special Distribution Location designated by Pretzel Time. + + "Special Distribution Arrangement" - The sale of Products at or from a Special Distribution Location (defined below), whether or not by or through on-premises food service facilities or concessions, pursuant to Pretzel Time's standards and specifications for such sales, which Pretzel Time may change from time to time in its sole discretion. + + "Special Distribution Location" - A facility or location, which as by way of example and without limitation, a school, hospital, office, work site, military facility, grocery store, convenience store, supermarket, entertainment or sporting facility or event, bus or train station, park, toll road or limited access highway facility, shopping mall or other similar facility, at or from which Pretzel Time, in its sole discretion, authorizes the operation of a Special Distribution Arrangement pursuant to a Special Distribution Agreement, which facility may be located within or outside the Territory. + + "Store" - Is a traditional in-line Pretzel Time Unit where Pretzel Time Products are produced and sold to customers at retail for off-premises consumption. + + "Territory" - The geographic area described in this Agreement. + + "Trade Dress" - The unit design, decor and image which Pretzel Time authorizes and requires Franchisee to use in connection with the operation of Pretzel Time Units, as it may be revised and further developed by Pretzel Time or its Affiliates from time to time and as further described in the Manuals. + + "Transfer" - The voluntary, involuntary, direct or indirect assignment, sale, gift, pledge, mortgage, hypothecation, encumbrance or other disposition by Franchisee (or any of its Owners) or by operation of law of: + + (1) Any interest in this Agreement; + + (2) A Controlling Interest in Franchisee; or + + (3) Any interest in the Unit, equipment, furnishings or fixtures. + + A Transfer shall also be deemed to include a merger or consolidation of Franchisee with any other entity, the issuance of additional securities representing, or convertible into, an Ownership Interest in Franchisee and any Transfer as a result of death (subject to this Section), divorce, insolvency, corporate or partnership dissolution proceedings or otherwise by operation of law. + +"Unit" - The Pretzel Time Unit which Franchisee is franchised to operate at the Site pursuant to this Agreement. + + "Yogurt Product Addendum" - The form of addendum to the Franchise Agreement used by Pretzel Time attached hereto as Exhibit "I" from time to time to authorize or require, in its sole discretion, a franchisee of a Pretzel Time Unit to offer TCBY frozen yogurt and other TCBY frozen yogurt products. + +2. GRANT OF FRANCHISE RIGHTS. + + 2.A. GRANT OF FRANCHISE. + + Pretzel Time hereby grants to Franchisee and Franchisee agrees to undertake, during the term of this Agreement and upon the terms and conditions stated in this Agreement, the right, license and privilege to operate, conduct, + + + + + +and do business and to use certain trade names, trademarks, service marks, logos, and other commercial symbols, including Pretzel Time (referred to as "Marks") solely and exclusively for the operation of one retail franchise Unit (referred to as "Franchise"), which is in the form of a (Store/Kiosk/Cart), and to sell those Products known as Pretzel Time pretzels and other Pretzel Time-approved menu items and Products further described in Section 2 (hereinafter "Products") in accordance with the provisions of this Agreement and in accordance with rules, standards, systems, and procedures as prescribed by Pretzel Time which may be changed, improved and further developed from time to time, (hereinafter "Pretzel Time System"), at one (1) location only, such location to be + + (hereinafter "Site"). + + Pretzel Time will not, as long as this Agreement is in effect and Franchisee is not in default, enfranchise or operate any other Pretzel Time Franchise within the following enclosed mall or building except as otherwise provided herein (hereinafter referred to as "Territory"): none. Franchisee has no territory other than the actual store location. Franchisee acknowledges that Franchisee has no rights outside of the actual store location and that Pretzel Time has the right to sell certain frozen products as Pretzel Time desires and Pretzel Time may conduct Pretzel Time's business as Pretzel Time so desires without hinderance from Franchisee. + + Franchisee shall not conduct the business of the Unit from any Site other than the Site specified, except as otherwise provided under this Agreement. The form of addendum to the Franchise Agreement used by Pretzel Time is attached hereto as Exhibit "J" to be used from time to time to add a satellite unit pursuant to the Satelite Unit Addendum. + + 2.B. PRINCIPAL OWNERS' GUARANTY. + + Franchisee shall cause all Principal Owners, and their spouses, as of the Effective Date to execute and deliver to Pretzel Time concurrently with this Agreement, and all persons or entities which become Principal Owners, and their spouses, thereafter to execute and deliver to Pretzel Time promptly thereafter, the "Owner's and Guarantor's Undertaking and Assumption of Obligations," attached hereto as Exhibit D, or such other agreement as Pretzel Time prescribes from time to time, undertaking to be bound jointly and severally by, and to guarantee the payment and performance of, all provisions of this Agreement. Franchisee shall furnish to Pretzel Time, at any time upon request, in such form as Pretzel Time may require, a list of its shareholders or partners (of record and beneficially) reflecting their respective interests in Franchisee. + + 2.C. TERRITORIAL RIGHTS. + + Except as otherwise provided in this Agreement and provided that Franchise is in full compliance with this Agreement, Pretzel Time and its Affiliates will not during the term of this Agreement operate or grant franchises for the operation of Pretzel Time Units within the Territory other than the Franchise granted to Franchisee pursuant to this Agreement. Franchisee acknowledges that Franchisee shall have no right to any Territory unless Franchisee and Pretzel Time have entered into a separate Area Developer's Agreement. Franchisee shall have no exclusive Territory based on this Agreement. + + 2.D. RESERVATION OF RIGHTS. + + Except as expressly limited by Section 2.C., Pretzel Time (on behalf of itself, its Affiliates and its designees) retains all rights, in its sole and exclusive discretion, to offer to sell the Products and services authorized for Pretzel Time Units under the Marks hereinafter described in Section 6 or other trade names, trademarks, service marks and commercial symbols through similar or dissimilar channels of distribution and national accounts and pursuant to such terms and conditions as Pretzel Time deems appropriate. Pretzel Time and its Affiliates retain the right to offer for sale and sell, and franchise others to offer for sale and sell, any other Products or services under the "Marks" and own and operate and grant to others the right to operate Pretzel Time Units solely or in conjunction with TCBY stores or other snack food businesses at such locations and on such terms and conditions as Pretzel Time, in its sole discretion, deems appropriate. Such Products shall include, but not be limited to, soft pretzels, frozen pretzels and other pretzel-related products, frozen yogurt and other Pretzel Time-approved Products and such methods of distribution may include, but shall not be limited to, sales at sports arenas and stadiums, amusement parks, department stores, airports, toll road travel plazas, hospitals, office buildings, schools and colleges and other Non Traditional Unit venues as well as sales to wholesalers and/or distributors for resale. Notwithstanding the foregoing, Pretzel Time reserves the right both within and outside the Territory (if any) to sell at wholesale all Products and services which comprise a part of the Pretzel Time System. + + FRANCHISEE ACKNOWLEDGES AND AGREES THAT PRETZEL TIME HAS THE RIGHT TO PLACE UNITS AT ANY LOCATION, EXCEPT AS LIMITED BY THIS AGREEMENT, AT ITS SOLE DISCRETION AND WITHOUT REGARD TO THE IMPACT UPON THE FRANCHISEE'S BUSINESS. FRANCHISEE ACKNOWLEDGES THAT ABSENT A SEPARATE AREA DEVELOPER'S AGREEMENT, PRETZEL TIME HAS THE RIGHT TO PLACE UNITS AT ANY LOCATION, AT ITS SOLE DISCRETION, AND WITHOUT REGARD TO THE IMPACT UPON THE FRANCHISEE'S BUSINESS. + + Franchisee acknowledges that because complete and detailed uniformity under many varying conditions may not be possible or practical, Pretzel Time specifically reserves the right and privilege, at its sole discretion and as it may deem in the best interests of all concerned in any specific instance, to + + + + + +vary standards for any Franchisee based upon the peculiarities of the particular Site, landlords' requirements, business potential, or other conditions which Pretzel Time deems to be of importance to the successful operation of such Franchisee's business. + + 2.E. OPTION TO DEVELOP OTHER SITES WITHIN THE TERRITORY. + + If Franchisee seeks to add a different type of Pretzel Time Unit, such as a kiosk or a cart, within the Territory, then Franchisee must seek Pretzel Time's approval by notifying Pretzel Time, in writing, that he desires to develop and operate other units, including a cart or kiosk, within the Territory. If Pretzel Time has fully negotiated a lease agreement for such location, then Franchisee shall (1) obtain the consent of the landlord to execute such lease and execute such lease, if applicable; (2) execute Pretzel Time's then current form of Satellite Unit Addendum (containing Pretzel Time's then current fees and expense requirements) and such ancillary documents (including guarantees) as are then customarily used by Pretzel Time in the grant of franchises for Pretzel Time Units as modified for use in connection with the Site, as necessary, and (3) pay Pretzel Time's reasonable out-of-pocket expenses incurred in locating such additional Site and negotiating the lease agreement, all within ten (10) business days after Pretzel Time's delivery to Franchisee of the lease agreement and the franchise documents. + + If Franchisee timely notifies Pretzel Time in writing that Franchisee desires to develop and operate an additional Pretzel Time Unit, such as a kiosk or cart, within its Territory and Pretzel Time has not fully negotiated a lease agreement for such location, then Franchisee will have thirty (30) days in which to negotiate and deliver to Pretzel Time a lease agreement for such site in form for execution. If Pretzel Time disapproves the lease agreement for failure to meet Pretzel Time's requirements, Franchisee will have ten (10) days within which to negotiate and deliver to Pretzel Time a revised lease agreement for such location in form for execution. If Pretzel Time approves the lease agreement for such location as meeting Pretzel Time's requirements, then Franchisee will (1) execute such lease agreement; (2) execute the franchise documents; and (3) pay Pretzel Time's reasonable out-of-pocket expenses incurred, if any, in locating such additional Site and negotiating the lease agreement, all within ten (10) business days after Pretzel Time's delivery to Franchisee of the lease agreement and the franchise documents. + + 2.F. TERM OF FRANCHISE. + + The term of this Agreement shall commence on the Effective Date of this Agreement and shall expire twenty (20) years from the effective date of this Agreement. References in this Agreement to the term of this Agreement mean the initial term and any renewal term. + +3. OTHER DISTRIBUTION METHODS. + + 3.A. SPECIAL DISTRIBUTION ARRANGEMENTS. + + Franchisee acknowledges and agrees that (1) Franchisee is not granted any rights to operate Special Distribution Arrangements within or outside the Territory pursuant to this agreement; and (2) the right to operate or grant to others the right to operate Special Distribution Arrangements is reserved to Pretzel Time; and (3) Pretzel Time has no obligation to offer to Franchisee the right to operate Special Distribution Arrangements; and (4) Pretzel Time or its designees may instead operate or grant to others the right to operate Special Distribution Arrangements within and/or outside the Territory. + +4. FRANCHISE AND OTHER FEES. + + 4.A. INITIAL FRANCHISE FEE. + + The initial franchise fee is Twenty-Five Thousand Dollars ($25,000.00). Upon execution of this Agreement by Franchisee, Franchisee shall pay to Pretzel Time, in consideration of the franchise granted herein, Twenty-Five Thousand Dollars ($25,000.00) payable by certified check or cashier's check in United States currency due upon execution of the Franchise Agreement. The franchise fee is fully earned by Pretzel Time upon the payment in full thereof and is nonrefundable (except as specifically provided in this agreement) as consideration for expenses incurred by Pretzel Time in furnishing assistance and services to Franchisee and for Pretzel Time's lost or deferred opportunity to franchise others, and not as compensation for the use of the copyrighted works, Marks or Trade Dress. Franchisee acknowledges and agrees that this franchise fee is reasonable. The fee is not reduced if Pretzel Time is unable to obtain a TCBY Franchise. An additional $1,000 is payable by Franchisee to Pretzel Time as a Yogurt Fee if Yogurt Product is included in the Franchise. + + 4.B. DEFERRAL OF FRANCHISE FEE. + + Payment of the initial franchise fee is deferred for franchises to be located in Minnesota and for Minnesota residents until the franchise Unit opens at which time the franchise fee must be paid in full to Pretzel Time. Franchise fees for Maryland residents and franchises to be located in Maryland will be escrowed until the unit is opened. There may be other stores in which state administrators have required fees or royalties to be deferred or escrowed. + + 4.C. ROYALTY FEE. + + + + + + Franchisee, in partial consideration of the grant of a franchise, agrees to pay to Pretzel Time a continuing Royalty of seven percent (7%) of Franchisee's net revenues (as defined in Section 1) on a weekly basis as specified in this Section; provided only 4% Royalty shall be payable on TCBY frozen yogurt and other TCBY frozen yogurt products. The Royalty is not uniform as to all franchisees, it is fully earned, and is nonrefundable in any circumstance. Franchisee shall pay weekly by electronic funds transfer (ACH) without offset, defalcation, credit or deduction of any nature to Pretzel Time the royalty fee, the advertising fund fee and all other amounts due and payable on each Wednesday for the immediately preceding week. The Royalty shall be paid by electronic funds transfer from Franchisee's general operating account. The Royalty is paid, in part, to compensate Pretzel Time for various services provided to Franchisee after the Unit opens, including, but not limited to, quality, service, and cleanliness inspections. Pretzel Time, upon written notice to Franchisee, shall have the right to change the timing of Franchisee's payments of Royalty Fees and Advertising Fund Fees due under this Agreement. Franchisee shall not subordinate to any other obligation his obligation to pay the Royalty Fee or any other fee or charge hereunder. + + 4.D. ADVERTISING FUND FEE. + + Franchisee agrees to pay on a weekly basis to Pretzel Time, as partial consideration for the grant of the Franchise, an Advertising Fund Fee of one percent (1%) of Net revenues for the preceding week as defined in Section 1. Franchisee herein acknowledges that the Advertising Fund Fee is not uniform as to all franchisees. The Advertising Fund Fee is fully earned and nonrefundable. The Advertising Fund Fee shall be paid by electronic funds transfer from the Franchisee's general operating account on Wednesday of each week based on the preceding week's Net revenues. + + 4.E. TRANSFER FEE. + + If Franchisee desires to assign his rights under the Franchise to a new franchisee, Franchisee (Assignor of the Franchise), agrees to pay to Pretzel Time a transfer fee equal to the greater of SIX THOUSAND TWO HUNDRED FIFTY DOLLARS ($6,250.00) or the then current transfer fee being paid by franchisees upon the assignment, gift, bequeath or transfer of ownership of the Franchise to cover administrative costs and expenses. The transfer fee is non-refundable. The fee shall be due and payable by the current Franchisee to Pretzel Time five (5) days prior to the transfer of the Franchise to the assignee. Additionally, the assignee of the Franchisee shall pay Pretzel Time an additional amount of Twenty-Five Thousand Dollars ($25,000.00) (plus $1,000.00 if Yogurt Product is included), for any additional units that are not existing stores or the then current initial franchisee fee for traditional Pretzel Time Units. + + 4.F. FEES FOR ADDITIONAL FRANCHISES. + + In the event that Franchisee meets Pretzel Time's qualifications to open additional Franchises at sites acceptable to both Franchisee and Pretzel Time, which approval is at the sole discretion of Pretzel Time, the initial franchisee fee shall be the greater of FIVE THOUSAND DOLLARS ($5,000.00)(plus $1,000.00 if Yogurt Product is included) or the then current fee for additional franchises set by Pretzel Time, at its sole discretion. The decision to grant an additional franchise location shall be in the sole discretion of Pretzel Time and at no time does Pretzel Time promise or guarantee that additional franchises will be offered or approved. Such decisions will be made on a case-to-case basis, based on factors including, but not limited to the availability of suitable locations, quality of standards maintained in the Franchisee's current Units, the impact of additional locations upon the operations of the Franchisee's current Units, the geographical distance between the Franchisee's existing and proposed location, the business plan of Pretzel Time, national contracts with major corporations, the population of the area near the prospective site, the quality of the site, and other economic and business factors. Under no circumstances is Franchisee entitled to demand or require Pretzel Time to grant to Franchisee a Franchise or a similar variation thereof. + + 4.G. FEES FOR RENEWAL OF FRANCHISE. + + Franchisee agrees that in consideration of the grant of the "Successor Franchise" (defined in Section 5.A.), Franchisee shall pay the current renewal fee as of the date of renewal and execute a general release in the form prescribed by Pretzel Time in accordance with Section 5.B. The renewal fee is due and payable thirty (30) days prior to the renewal day. + + 4.H. PAYMENT BY ELECTRONIC FUNDS TRANSFER. + + Franchisee agrees to pay all Royalties, Advertising Fund Fees, amounts due Pretzel Time for purchases by Franchisee from Pretzel Time or its Affiliates and other amounts which Franchisee owes to Pretzel Time via electronic funds transfer from Franchisee's general account, which shall be initiated by Pretzel Time and any transfer fees shall be paid by Franchisee every Wednesday for the preceding week based upon the Net Revenues. Franchisee herein agrees to execute and complete all necessary documentation required by Pretzel Time to permit the wire transfer to Pretzel Time (in the form attached hereto as Exhibit E or such other form as Pretzel Time shall accept). Under this procedure, Franchisee shall authorize Pretzel Time to initiate debit entries and/or credit correction entries to Franchisee's general operating bank account for payments of Royalties, Advertising Fund Fees and other amounts payable under this Agreement and any late or interest charges due thereon. Franchisee shall make the funds + + + + + +available to Pretzel Time for withdrawal by electronic transfer no later than one day prior to the due date for payment therefor. The Royalty and Advertising Fund Fees amount actually transferred from Franchisee's account shall be based on the Unit's Net Revenues indicated on the reports submitted by Franchisee as required hereunder. If Franchisee has not reported the Unit's Net Revenues to Pretzel Time for any week as required herein, then Pretzel Time shall be authorized to debit Franchisee's account in an amount equal to the fees transferred from Franchisee's account for the last reporting period for which a report of the Unit's Net Revenues was provided to Pretzel Time as required hereunder. If, at any time, Pretzel Time determines that Franchisee has under-reported the Unit's Net Revenues, or underpaid Royalty or Advertising Fund Fees or other amounts due hereunder, Pretzel Time shall be authorized to initiate immediately a debit to Franchisee's account in the appropriate amount in accordance with the foregoing procedure, plus interest as provided for in this Agreement. Any overpayment shall be credited to Franchisee's account through a credit effective as of the first week after Franchisee and Pretzel Time determine that such credit is due. Notwithstanding any designation by Franchisee, Pretzel Time shall have the sole discretion to apply any payments by Franchisee to any past indebtedness of Franchisee for Royalty or Advertising Fund Fees, purchases from Pretzel Time and/or its Affiliates, interest or any other indebtedness, including, without limitation, payment of rental sums in arrears for the Unit. + + 4.I. LATE CHARGE AND INTEREST. + + To compensate Pretzel Time for the increased administrative expense of handling late payments, Pretzel Time may charge Franchisee a $50.00 late charge for each delinquent payment. All Royalty and Advertising Fund Fees, amounts due for purchases by Franchisee from Pretzel Time or its Affiliates, and other amounts which Franchisee owes to Pretzel Time or its Affiliates shall bear interest after their due date at a rate equal to the lesser of: (1) eighteen percent (18%) per annum for the number of days which such payment is due; or (2) the highest applicable legal rate permitted by applicable law. Franchisee acknowledges that this Section shall not constitute Pretzel Time's or its Affiliates' agreement to accept such payments after they are due or a commitment by Pretzel Time or its Affiliates to extend credit to or otherwise finance operation of the Unit. Notwithstanding the provisions of this Section 4.I., Franchisee acknowledges and agrees that his failure to pay all amounts when due shall constitute grounds for termination of this Agreement. + +5. RENEWAL OF FRANCHISE TERM. + + 5.A. FRANCHISEE'S RIGHT TO A SUCCESSOR FRANCHISE. + + Upon the expiration of the initial term of this Agreement, Franchisee shall have the one time right to obtain a successor franchise to operate a Pretzel Time Unit at the Site (a "Successor Franchise") for a single term of five (5) years immediately following the expiration of the initial term of the Franchise upon giving Pretzel Time six (6) months notice prior to the expiration of the then current term if: + + (1) Franchisee and its Owners have complied with this Agreement and any amendment during the initial term of this Agreement in all material respects; and + + (2) Franchisee maintains possession of the Site and agrees to remodel and/or expand the Unit, add or replace equipment, furnishings, fixtures and signs and otherwise modify the Unit to bring it into compliance with specifications and standards then applicable under new or Successor Franchises for Pretzel Time Units; or if Franchisee is unable to maintain possession of the Site, or if, in the judgment of Pretzel Time, the Unit should be relocated, Franchisee secures a substitute site approved by Pretzel Time and agrees to develop expeditiously such substitute site in compliance with specifications and standards then applicable under new or successor franchises for Pretzel Time units; and + + (3) Pretzel Time has not given notice of its election not to renew six (6) months prior to the expiration of the initial twenty (20) year term; and + + (4) Franchisee is not in default of any material term or condition of the lease agreement, or any other agreement between Pretzel Time and Franchisee; and + + (5) Franchisee executes Pretzel Time's then current Franchise Agreement and other ancillary agreements required and being offered to new Franchisees on the date of renewal, which agreements shall supersede in all respects this Agreement and the terms of which may differ from the terms of this Agreement, including, without limitation, Royalty Fees and Advertising Fund Fees, other fees and charges, performance criteria, and a provision which allows Pretzel Time and its Affiliates to reserve the right, both within and outside of the Territory, to offer and sell at wholesale or retail, through channels of distribution distinct from those of a Franchise, Products and services which comprise, or may in the future comprise a part of the Pretzel Time System, which Products may be resold at retail to the general public by such entities; and + + (6) Franchisee is in full compliance with Pretzel Time's Operations Manual; and + + (7) On renewal, Franchisee agrees to pay the current renewal fee, the Royalty and Advertising Fund fees specified in Pretzel Time's current + + + + + + Franchise Agreement then being offered new Franchisees on the date of renewal; and + + (8) Franchisee shall execute general releases, in form satisfactory to Pretzel Time, of any and all claims against Pretzel Time and its Affiliates and their officers, directors, employees, agents, successors and assigns arising under this Agreement; and + + (10) Franchisee has complied with Pretzel Time's then current qualification and training requirements. + + Following receipt of Franchisee's election to renew, Pretzel Time shall provide Franchisee with an execution copy of the form of Franchise Agreement to be entered into for the renewal term. If the Franchisee does not execute and return the renewal Franchise Agreement within thirty (30) days of receipt, then Franchisee shall be deemed to have withdrawn its notice of renewal, and this Agreement shall terminate at the end of the current term. + + Pretzel Time may, at its option, with reasonable cause and upon written notice, elect not to renew the Franchise Agreement. Pretzel Time shall notify Franchisee of the nonrenewal not less than six (6) months prior to the expiration of the term of this Agreement. If applicable law requires that Pretzel Time give longer notice to Franchisee prior to the expiration of the term than is specified in the Franchise Agreement, the Franchise Agreement will remain in effect on a month-to-month basis until the requisite notice has been given. + + 5.B. RELEASES. + + Franchisee and its Owners shall execute general releases, in form satisfactory to Pretzel Time (the general form of which is attached hereto as Exhibit "K"), of any and all claims against Pretzel Time and its Affiliates and their respective shareholders, officers, directors, employees, agents, successors and assigns. Failure by Franchisee and its Owners to sign and deliver to Pretzel Time, such agreements and releases within thirty (30) days after delivery thereof to Franchisee shall be deemed an election by Franchisee not to obtain a Successor Franchise. + + 5.C. NOTICES. + + Franchisee shall give Pretzel Time written notice of its election to obtain a Successor Franchise not more than twelve (12) months and not less than six (6) months prior to the expiration of this Agreement. Pretzel Time agrees to give Franchisee, written notice, not more than thirty (30) days after receipt of Franchisee's notice of (a) Pretzel Time's determination whether or not it will grant Franchisee a Successor Franchise pursuant to this Section and/or (b) any deficiencies in Franchisee's operation of the Unit (or any other failure to comply with the terms of this Agreement) which could cause Pretzel Time to refuse to grant a Successor Franchise. Such notice shall state what actions Franchisee must take to correct the deficiencies and shall specify the time period in which such deficiencies must be corrected. Pretzel Time shall give Franchisee written notice of a decision not to grant a Successor Franchise based upon Franchisee's failure to cure deficiencies not less than ninety (90) days prior to the expiration of the initial term of this Agreement. Such notice shall state the reasons for Pretzel Time's refusal to grant a Successor Franchise. In the event Pretzel Time fails to give Franchisee (a) notice of deficiencies in the Unit or in Franchisee's operation of the Unit, within thirty (30) days after receipt of Franchisee's timely election to obtain a Successor Franchise, or (b) notice of Pretzel Time's decision not to grant a Successor Franchise at least ninety (90) days prior to the expiration of the term of this Agreement, Pretzel Time may extend the term of this Agreement for such period of time as is necessary in order to provide Franchisee reasonable time to cure deficiencies or to provide ninety (90) days notice of Pretzel Time's determination not to grant a Successor Franchise. The grant of a Successor Franchise shall be conditioned upon Franchisee's continued compliance with all the terms and conditions of this Agreement until the date of expiration. + +6. TRADEMARKS AND LIMITATIONS. + + 6.A. OWNERSHIP OF MARKS. + + Franchisee acknowledges that Pretzel Time is the owner of all right, title and interest together with all the goodwill in and to the Marks. Franchisee acknowledges that his right to use the Marks is derived solely from this Agreement and is limited to his conduct of business pursuant to and in compliance with this agreement and all applicable standards, specifications and operating procedures Pretzel Time prescribes from time to time during its term. Franchisee shall not have nor assert any right, title or interest in Pretzel Time's Marks or any goodwill of Pretzel Time. Franchisee agrees that he will not register such trade name or marks in his own name or that of any other firm, person or corporation. The following Marks are currently authorized for Franchisee's use in the Franchised Business as follows: + + Pretzel TimeJ Pretzel Time Stylized7 Pretzel Time Clock DesignJ Pretzel Time StorefrontJ Fitness with a twist.J + + Franchisee acknowledges and recognizes Pretzel Time's interest and exclusive right to the concepts of the Pretzel Time System and its distinguishing characteristics, including the name and style of the unique decor + + + + + +of the Pretzel Time stylized literature, display and promotional materials, marketing methods, operating procedures, training program and the manufacture of Pretzel Time Products. Pretzel Time makes no representation or warranty, express or implied, as to the use, exclusive ownership, validity or enforceability of the Marks. Pretzel Time reserves the right to develop other trademarks, service marks, copyrights and patents for use in other businesses. Pretzel Time and Franchisee acknowledge and agree that it is not required to defend Franchisee against a claim against his use of Pretzel Time Marks. Pretzel Time may reimburse Franchisee for his liability and reasonable costs in connection with defending Pretzel Time's registered trademarks provided Franchisee has notified Pretzel Time immediately when he learned about the infringement or challenge. + + Franchisee agrees to use Pretzel Time's trade name and Marks as the sole trade identification of the Unit and in connection with, and exclusively for the promotion and conduct of the Franchise as provided hereunder and in accordance with instructions, rules, and procedures prescribed by Pretzel Time from time to time with respect thereto. Notwithstanding the foregoing, Franchisee shall identify himself as the independent owner of the Unit in the manner prescribed by Pretzel Time. Franchisee agrees to give such notices of trademark and service mark registrations as Pretzel Time may specify and to obtain such business name registrations as may be required under applicable law. Franchisee shall not at any time during the term of this Agreement or after its termination, contest the validity or ownership of any of the Marks or assist any other person in contesting the validity or ownership of the Marks. + + 6.B. DISCONTINUANCE OF USE OF MARKS. + + If it becomes advisable at any time, in Pretzel Time's sole discretion, for Pretzel Time or the Unit to modify or discontinue use of any Mark, and/or use of one or more additional or substitute trade names, trademarks, service marks, or other commercial symbols, Franchisee shall comply with Pretzel Time's directions within a reasonable time after notice to Franchisee by Pretzel Time. Neither Pretzel Time nor its Affiliates shall have any obligation to reimburse Franchisee for any expenditures made by Franchisee to modify or discontinue the use of a Mark or to adopt additional marks or substitutes for a discontinued Mark, including, without limitation, any expenditures relating to advertising or promotional materials or to compensate Franchisee for any goodwill related to the discontinued Mark. + + 6.C. CORPORATE NAME. + + Franchisee agrees not to use any Mark or trade name of Pretzel Time or any part thereof or with any prefix, suffix or other modifying words, terms, designs, or symbols or in any modified form as part of any corporate or trade name nor shall Franchisee use any Mark in connection with the sale of any unauthorized product or service or in any other manner not expressly authorized in writing by Pretzel Time. + + 6.D. TERMINATION. + + Immediately upon the termination of this Agreement, the Franchisee agrees to cease and forever abstain from using the Pretzel Time trade name and Marks and return to Pretzel Time all documents, manuals, instructions, display items and the like bearing the aforesaid trade names or any of the Marks. + + 6.E. TRADEMARK ENFORCEMENT. + + Pretzel Time shall police and enforce its rights with respect to its trademarks and other proprietary aspects of the Pretzel Time System with the cooperation of Franchisee, and shall bring appropriate actions or proceedings against infringers or other unlawful users at its sole expense. + + Franchisee agrees to immediately notify Pretzel Time of any claim, demand or suit based upon or arising from or of any attempt by any other person, firm or corporation to use Pretzel Time's trademarks, service marks, copyrights, trade secrets, or Systems licensed hereunder or colorable variation thereof in which Pretzel Time has a proprietary interest. Pretzel Time will take the action it thinks appropriate. In the event Pretzel Time undertakes any prosecution of litigation or defense relating to the proprietary Marks licensed hereunder, Franchisee agrees to execute any and all documents and do such acts and things as may in Pretzel Time's opinion, be necessary to carry out such defense or prosecution. Franchisee agrees that Pretzel Time has the right to control administrative proceedings or litigation with respect to this issue. + + Franchisee agrees to participate and cooperate in the prosecution of any action to prevent the infringement, imitation, illegal use or misuse of the Marks and agrees to be named as a party in any such action if requested by Pretzel Time. Pretzel Time agrees to bear the legal expenses incident to Franchisee's participation in such action, except for the cost of Franchisee's personal legal counsel if Franchisee elects to be represented by counsel of his own choosing. + + 6.F. USE OF SERVICE MARK. + + Except with the prior written consent of Pretzel Time, Franchisee agrees not to infringe upon, use or imitate Pretzel Time's System, or any of its distinguishing characteristics, and further agrees not to cause or allow any other person to infringe upon, use or imitate Pretzel Time's System, or any of its distinguishing characteristics. Franchisee agrees to use and display the Marks at all times only in accordance with the quality control standards set forth in this Agreement and in the Operations Manual. During the term of this Agreement, and renewal term, if any, Franchisee will operate the Unit only under the Marks . Franchisee will use or display the Marks only within the designated Territory. Franchisee will cause a sign bearing the name Pretzel Time which meets Pretzel Time's specifications for color, design and size, to be installed + + + + + +on the outside of the retail Unit. Franchise shall not, at any time during the term of this Agreement or after its termination or expiration use any Mark in connection with the sale of any unauthorized product or service or in any other manner not expressly authorized in writing by Pretzel Time. + +7. SELECTION OF FRANCHISE LOCATION. + + 7.A. SITE SELECTION. + + Franchisee shall be responsible for leasing a suitable site for the Franchise subject to Pretzel Time's approval. Pretzel Time agrees to assist Franchisee in locating and securing a location for the unit which is acceptable to both Pretzel Time and Franchisee. Franchisee shall submit to Pretzel Time a list of desired locations on the Location Agreement attached hereto as Exhibit W or if Pretzel Time directs on a form prepared by Pretzel Time and attached hereto as Exhibit F, and Pretzel Time shall contact the appropriate leasing representatives to determine the availability of sites at those locations. After obtaining information from appropriate leasing representatives, Pretzel Time shall notify Franchisee whether or not the sites made available to Pretzel Time are acceptable by Pretzel Time. In the event that a site for the franchise cannot be located which is acceptable and suitable to both Pretzel Time and Franchisee within One Hundred Twenty (120) days, then the Franchise Agreement shall be terminated and all franchise fees paid by Franchisee shall be refunded. + + Pretzel Time shall approve the site for the unit in reliance upon information furnished and representations made by Franchisee with respect to the size, appearance, and other physical characteristics of the site, photographs of the site, demographic characteristics, traffic patterns, competition from other businesses in the area, and other commercial characteristics. Pretzel Time's approval of the site indicates only that Pretzel Time believes that the site falls within acceptable criteria established by Pretzel Time as of the time period encompassing the evaluation. Franchisee agrees that Pretzel Time shall not be responsible for the failure of a franchise, site and/or premises approved by Pretzel Time to meet expectations as to potential revenue or operational criteria. Franchisee acknowledges and agrees that his acceptance of a Franchise for the operation of a Unit in the Territory is based on his own independent investigation of the suitability of the mall location. + + Franchisee acknowledges that Pretzel Time's approval of the lease or sublease for the Unit does not constitute a guarantee or warranty by Pretzel Time, express or implied, of the successful operation or profitability of a Unit operated at the designated Site. Such approval indicates only that Pretzel Time believes that the Unit and the terms of the lease fall within the acceptable criteria established by Pretzel Time as of the time period encompassing the evaluation. + + 7.B. LEASE. + + Pretzel Time and Franchisee further agree that Pretzel Time shall negotiate the basic economic terms of the lease in consultation with the Franchisee. Franchisee agrees to execute a letter of intent for the lease premises which outlines the basic economic terms of the lease and return it to Pretzel Time within five (5) days of receipt of same. Franchisee acknowledges and agrees that he is responsible for reviewing the terms of the agreement and making any necessary changes to the lease agreement. Franchisee shall not execute any lease agreement without the prior approval of Pretzel Time, which shall be conditioned upon inclusion of terms in the lease acceptable to Pretzel Time and at Pretzel Time's option shall contain such provisions, including, but not limited, to: + + (1). Notice to Pretzel Time of, and Pretzel Time's right to cure, Franchisee's default under the lease provided, however, that if Pretzel Time cures any such default, the total amount of all costs and payments incurred by Pretzel Time in effecting the cure shall be immediately due and owing to Pretzel Time by Franchisee; + + (2). Franchisee's right to assign his interest under the lease or sublease to Pretzel Time without the lessor's or sublessor's consent; + + (3). Allowing Franchisee to transfer the lease to Pretzel Time or another approved franchisee in the event that Franchisee sells his business (a copy of the form of the third party assignment agreement that Franchisee and the prospective purchaser would sign is attached hereto as Exhibit L); + + (4). Authorizing and requiring the Lessor or sublessor to disclose to Pretzel Time, upon its request, sales and other information that Franchisee furnishes to the lessor or sublessor; and + + (5). Providing that Pretzel Time (or one of its Affiliates or its Assignee) shall have the right (but not the obligation) to assume the lease or sublease: + + (i) Upon termination of this Agreement by Pretzel Time or upon expiration of this Agreement (unless a Successor Franchise is + + + + + + granted to Franchisee), or + + (ii) If Franchisee fails to exercise any options to renew or extend the lease or sublease or, + + (iii) If Franchisee commits a default that gives the lessor or sublessor the right to terminate the lease or sublease, or + + (iv) If Pretzel Time or one of its Affiliates or its designee/assignee purchases the Unit. + + (6). A provision allowing sampling in front of the retail Unit; + + (7). A provision that the premises are to be used exclusively for a Pretzel Time Unit only; and + + (8). A provision which permits alterations to the premises in a good and workman-like manner by Franchisee as required by Pretzel Time. + + Franchisee further agrees to execute and return the lease and any other riders, guaranties or sureties required by the Landlord within seven (7) days from receipt of the same and no later than sixty (60) days after signing of this Agreement. If any lease expires prior to the expiration of this Agreement, Franchisee will be required to arrange any necessary lease for the Unit and Pretzel Time shall have the right to approve the terms of the renewal lease for the Unit prior to Franchisee's execution thereof. Franchisee agrees that he will not execute a lease or sublease which Pretzel Time has disapproved. Franchisee shall deliver a copy of the signed lease to Pretzel Time for the Unit within five (5) business days after its full execution. The copy shall be complete and include copies of all signature pages and exhibits. + + A copy of the form of the sublease that Franchisee shall execute (if Pretzel Time is the tenant pursuant to the lease) is attached hereto as Exhibit M. A copy of the form of the collateral assignement of lease that Franchisee shall execute (if Franchisee is the tenant pursuant to the lease) is attached hereto as Exhibit N. + + Franchisee shall be responsible for all terms and conditions of the lease covering the franchise location, including any required security deposit and prepaid rent. Franchisee agrees to pay the Unit rent directly to the landlord at the rate and terms specified in the primary lease between landlord and Franchisee. Rent is generally paid monthly on the first day of the month and is non-refundable. Franchisee agrees that the Unit shall be used only as a Pretzel Time franchise. + + If Franchisee fails to obtain lawful possession of an approved Site (through a lease or assignment) within sixty (60) days after delivery of Pretzel Time's approval of the Site, Pretzel Time, may, in its sole discretion, withdraw approval of such Site at any time. + + 7.C. RELOCATION. + + In the event that Franchisee's lease is terminated, with or without fault of Franchisee, if the Site is damaged, condemned or otherwise rendered unusable as a Pretzel Time Unit in accordance with this Agreement, or if, in the judgment of Pretzel Time and Franchisee, there is a change in the character of the location of the Site sufficiently detrimental to his business potential to warrant its relocation, Pretzel Time will not unreasonably withhold permission for relocation of the Unit to another Site, which meets Pretzel Time's then-current site criteria, subject to the rights of existing Pretzel Time franchisees under their franchise agreements with Pretzel Time. Franchisee acknowledges and agrees that Pretzel Time is under no obligation to approve a relocation of the Franchise. However, upon written approval from Pretzel Time, Franchisee may relocate the Franchise to another location. Such approval shall not be granted unless Franchisee is in compliance with all terms and conditions of this Agreement and Franchisee has the financial resources available to relocate the Unit and construct a new and comparable Unit according to Pretzel Time's then current design standards. Any such relocation of the Franchise is subject to Pretzel Time's prior approval of the new Unit location. Relocation shall be at Franchisee's sole expense and Pretzel Time shall have the right to charge Franchisee for any and all costs incurred by Pretzel Time, and a reasonable fee for its services, in connection with any such approval, evaluation and relocation of the Franchise. The Unit shall re-open at the replacement Site as soon as reasonably practicable but in no event more than ninety (90) days after the closing of the original location. + +8. DEVELOPMENT OF UNIT. + + 8.A. UNIT DESIGN SPECIFICATIONS AND CONSTRUCTION PLANS. + + Franchisee shall be responsible for constructing and developing the Unit, including payment of all costs. Pretzel Time shall furnish to Franchisee prototypical plans and specifications for the Unit, reflecting Pretzel Time's requirements for dimensions, interior design and decor, layout, image, building materials, color scheme, exterior and interior finishes, fixtures, equipment, furnishings, and signs. + + Franchisee shall promptly after obtaining approval of the Site for the Franchise: + + (1). cause to be prepared by a Pretzel Time approved architect and + + + + + + submit for approval by Pretzel Time a site survey and any modifications to Pretzel Time's basic architectural plans and specifications for the Pretzel Time Unit (including requirements for dimensions, exterior design, materials, interior design and layout, equipment, fixtures, furniture, signs and decorating) required for the construction of the Franchise at the Site leased therefor. Franchisee shall have all such modifications approved by Pretzel Time and prior to obtaining permitting; + + (2). insure that such plans and specifications comply with applicable ordinances, building codes, and permit requirements and with lease requirements and restrictions and all modification to Pretzel Time's basic plans and specifications are modified to the extent necessary to comply with local ordinances and state laws, building codes, permit requirements, lease restrictions and federal law; and + + (3). Franchisee shall also submit all revised or "as built" plans and specifications during the course of such construction upon request of Pretzel Time. Franchisee agrees to pay for any and all architect fees and pay the architectural fees for the architect to review, approve and modify the plans. + + 8.B. DEVELOPMENT OF THE UNIT. + + Pretzel Time shall have the right to approve any contractor hired by Franchisee to develop the Unit. Within one-hundred twenty (120) days of the execution of the Franchise Agreement, Franchisee agrees, at his sole expense, to do or cause to be done the following with respect to developing the Unit: + + (1). Familiarizing himself with the physical condition of the property, local laws, ordinances and other requirements in connection with the construction of the Unit; + + (2). Secure all financing required to develop and operate the Unit; + + (3). Obtain all required building, utility, sign, health, sanitation, business, environmental and other permits and licenses required for construction and operation of the Unit; + + (4). Extending all utilities to the Site and constructing all required improvements to the Unit and decorate the Unit in compliance with plans and specifications Pretzel Time approves within four to six weeks of possession of the Site and two days prior to the commencement date set forth in the lease for the Unit; + + (5). Purchase and install all required fixtures, furnishings, equipment and signs required for the Unit (provided, however, that Pretzel Time shall have the right, in its sole discretion, to install all required signs at the Unit at Franchisee's sole expense); + + (6). Purchase an opening inventory of Products, materials, and supplies; + + (7). In accordance with Pretzel Time's standard specifications, Franchisee shall totally equip, ready and inventory the Site at its sole cost for opening to the public two (2) days prior to the opening date specified in the lease; and + + (8). Franchisee agrees that it will not open the Unit for business without Pretzel Time's prior approval and training. + + 8.C. EQUIPMENT, FIXTURES, FURNISHINGS, AND SIGNS. + + Franchisee agrees to use in developing and operating the Unit only such fixtures, furnishings, equipment, and signs that Pretzel Time requires and has approved for Pretzel Time Units as meeting its specifications and standards for quality, design, appearance, function and performance. Franchisee further agrees to place or display at the Unit only such signs, emblems, lettering, logos and display materials that Pretzel Time approves in writing from time to time; provided, however, that Pretzel Time shall have the right, in its sole discretion, to install all required signs at the Unit at Franchisee's sole expense. Franchisee shall purchase or lease approved brands, types or models of fixtures, furnishings, equipment and signs only from suppliers designated or approved by Pretzel Time (which may include Pretzel Time and/or its Affiliates). Franchisee further agrees that all fixtures, furnishings and equipment used in connection with the operation of the Unit shall be free and clear of all liens, claims and encumbrances whatsoever, except with respect to any such liens, claims or encumbrances asserted by Pretzel Time or third party purchase money security interests. + + 8.D. EXCEPTIONS TO EQUIPMENT OR FURNISHINGS. + + If Franchisee proposes to purchase any brand or type of construction or decorating material, fixture, equipment, furniture or sign not then approved by Pretzel Time, or any such item from a supplier which is not then approved by Pretzel Time, Franchisee shall first notify Pretzel Time, in writing, and shall submit to Pretzel Time, upon its request, sufficient specifications, photographs, drawings and other information or samples for a determination by Pretzel Time of whether such brand or type of construction or decorating material, fixture, equipment, furniture or sign complies with its specifications and standards or such supplier meets Pretzel Time's approved supplier criteria, which determination shall be made and communicated in writing to Franchisee within a reasonable time. Additionally, Franchisee shall pay all fees for said + + + + + +testing and be responsible for acquiring and submitting equipment necessary for such testing. + + 8.E. CONSTRUCTION ASSISTANCE. + + Upon request by Franchisee and without liability, Pretzel Time agrees to provide construction assistance to Franchisee in one or more of the following areas: + + (1). Assist Franchisee in finding an architect for the construction and development of the Unit; + + (2). Assist Franchisee in finding a general contractor for the construction and development of the Unit; and + + (3). Respond to a reasonable amount of questions from Franchisee's contractor relating to construction and development of the Unit in accordance with the requirements of Pretzel Time. + + 8.F. LIMITATION ON LIABILITY. + + Pretzel Time shall not be liable to Franchisee, the contractor, or any other person, and Franchisee waives all claims for liability or damages of any type whatsoever (whether direct, indirect, incidental, consequential, or exemplary), on account of the rendition of any services by Pretzel Time in accordance with this Section, except to the extent caused by the gross negligence or intentional misconduct of Pretzel Time, and then any such liability or damages shall be limited to five thousand dollars ($5,000.00). Without limiting the generality of the foregoing, Pretzel Time shall not have liability with respect to any of the following, all of which are the sole responsibility of Franchisee: + + (1). if construction of the Unit does not fully satisfy the requirements (if any) of the landlord, the architect, the contractor, and any governmental agency having jurisdiction or does not fully satisfy the criteria established by Pretzel Time for construction and development of Pretzel Time Units; + + (2). if the Unit improvements are not structurally sound or free from defects or deficiencies; + + (3). if there are any construction delays or cost overruns; or + + (4). if there are any disputes with any landlord, contractor, subcontractor, architect, supplier or governmental agency with respect to any aspect of the design, construction, provision, or equipping of the Unit. + +9. UNIT OPENING. + + 9.A. COMMENCEMENT OF OPERATIONS. + + Franchisee shall commence operation of the Franchise the earlier of: 1) one hundred fifty (150) days after the execution of this Agreement; (2) as specified in the lease for the Site; or (3) as otherwise required or approved in writing by Pretzel Time. Failure to open the Unit within the aforementioned time period shall result in the termination of this Franchise Agreement and all franchise fees paid by Franchisee shall be nonrefundable. Franchisee agrees not to open the Unit for business until the following has occurred: + + (1). Pretzel Time approves the Unit pursuant to its Pre-Opening Checklist; + + (2). Pre-opening training of Franchisee and Unit personnel has been completed to Pretzel Time's satisfaction; + + (3). The initial franchise fee and all other amounts then due to Pretzel Time have been paid in full; + + (4). Pretzel Time has been furnished with copies of all insurance policies required by this Agreement, or such other evidence of insurance coverage and payment of premiums as Pretzel Time requests; and + + (5) Franchisee has executed Pretzel Time's wire transfer agreement. + + Franchisee agrees to open the Unit for business on or before the opening date specified in the lease if it has the Landlord's approval and only after Pretzel Time notifies Franchisee that the conditions set forth in Sections 8 and 9 have been satisfied. + +10. FRANCHISEE TRAINING. + + 10.A. INITIAL TRAINING. + + Franchisee acknowledges and agrees that, while Pretzel Time's training program will provide Franchisee with the fundamental knowledge necessary to operate a unit, Franchisee cannot expect success unless he devotes his best personal efforts to the business and exercises good business judgment in dealing with customers, suppliers, and employees. Prior to the Unit's opening, Pretzel Time shall furnish an initial training program on the operation of a Pretzel Time Unit which shall take place at Pretzel Time's headquarters in Harrisburg, Pennsylvania, or at a location which will provide the best training for the + + + + + +Franchisee, which may or may not be close to Pretzel Time's headquarters. The Franchisee agrees that he and his Unit Manager shall attend the initial training session held four (4) to eight (8) weeks prior to the Unit's projected opening date. Pretzel Time will not charge for the initial training of the Franchisee or if a corporation or partnership, the Principal Owners of the Franchisee and the Unit Manager. All incidental expenses relative to the required training, including travel expenses, hotel/motel expenses, and meals shall be the responsibility of the Franchisee while attending training. Prior to the commencement of the operation of the Unit, the manager of the Unit ("Unit Manager") and the Franchisee or if a corporation or partnership, one Owner of the Franchisee as identified in Exhibit B, who will be personally overseeing the Unit shall attend and successfully complete the Pretzel Time initial training program to the satisfaction of Pretzel Time. + + The Franchisee and his Unit Manager must satisfactorily complete Pretzel Time's training as determined by Pretzel Time, in its sole opinion, before Franchisee is allowed to operate the Franchise. If Pretzel Time, in its sole discretion, determines that Franchisee is unable to satisfactorily complete the training program, Pretzel Time shall have the right to terminate this Agreement and no franchise fees shall be refunded. The initial training program shall cover material aspects of the operation of a Pretzel Time Unit, including financial controls, employee relations, food preparation, service and operational techniques, sampling, recipes and cooking procedures, marketing and public relations, cleanliness and maintenance procedures, and maintenance of Pretzel Time System standards. Franchisee shall receive one copy of the Operations Manual, which cannot be reproduced, in whole or in part. In the event that the Franchisee's copy is lost destroyed or significantly damaged, Franchisee shall be obligated to obtain from Pretzel Time, at Franchisee's expense a replacement copy of the Operations Manual. + + 10.B. EMPLOYEE TRAINING. + + Pretzel Time may provide to Franchisee, at Franchisee's request, guidance in the selection of a Unit Manager and may provide periodic evaluations of Franchisee's Unit, Managers and employees, but without any liability therefore to Pretzel Time. Franchisee shall hire all employees of the franchise, be exclusively responsible for the terms of their employment and compensation, and implement a training program for employees of the franchise. Franchisee agrees to maintain a staff of trained employees to operate the Unit in compliance with Pretzel Time's standards. + + In the event the Unit Manager ceases to hold such full-time position at the Unit, Franchisee shall have thirty (30) days in which to appoint a substitute or replacement Unit Manager, who must attend and successfully complete, to Pretzel Time's satisfaction the initial training program as specified above within sixty (60) days after employment as Unit Manager. If Pretzel Time in its sole discretion determines that the Unit Manager or any subsequently appointed Unit Manager has failed to satisfactorily complete the initial training program or any additional or refresher training program, Franchisee agrees to immediately hire a substitute Unit Manager and promptly arrange for such person to complete the initial training program to the satisfaction of Pretzel Time. Franchisee agrees to notify Pretzel Time of any new Unit Managers for the Unit within seven (7) business days of their employment. In the event Franchisee operates more than one (1) Unit, at least one (1) trained and competent Unit Manager referred to above shall act as a full-time manager in each Territory. Franchisee shall keep Pretzel Time informed at all times of the identity of any Unit Manager(s) of the Unit. + + All Unit Managers of the Unit must have successfully completed an initial training program as specified by Pretzel Time at the sole expense of the Franchisee, including, but not limited to, salary and incidental travel expenses attendant to any training provided by Pretzel Time. Franchisee and Unit Managers who successfully complete training will receive a Training Certificate from Pretzel Time. Pretzel Time shall make training available to Franchisee's Unit Manager during Pretzel Time's regularly scheduled training course. In no event, will Pretzel Time be under any obligation to provide individual training to Franchisee's Unit Managers. Franchisee agrees that each Unit Manager shall participate at Franchisee's expense in Pretzel Time's initial training program and all other mandatory training programs which may subsequently be offered by Pretzel Time. + + 10.C. ON-SITE TRAINING. + + Additionally, Pretzel Time will provide on-site training at Franchisee's business location for a period of five (5) days, generally to be commenced immediately prior to Franchisee's day of opening and continued the first three (3) days of operation. Franchisee herein agrees to notify Pretzel Time, in writing, of his opening date twenty (20) days prior thereto. This training will include all functions required for the proper operation of the franchise. + + Should Franchisee request additional assistance from Pretzel Time in order to facilitate the opening of the Franchise, and should Pretzel Time, in its discretion, deem it necessary, feasible and appropriate to comply with the request or should Pretzel Time determine that additional training is required, Franchisee shall reimburse Pretzel Time at Pretzel Time's then current daily training service fee, for the expense of Pretzel Time providing such additional assistance and for its training related expenses, which may include, travel, room and board. + + 10.D. COMPANY GROWTH. + + Throughout the term of this Agreement, Pretzel Time may provide Franchisee with information on company growth and operations as well as new + + + + + +techniques developed to reduce costs and/or enhance sales or profits. + + 10.E. RETRAINING PROGRAMS. + + Pretzel Time shall provide re-training programs at a location of Pretzel Time's choice from time to time for experienced franchisees and their managers and/or employees. Pretzel Time may charge fees for refresher training courses for previously trained and experienced managers. Fees for special programs will be based upon Pretzel Time's actual costs and attendance shall be required. Attendance at retraining programs or seminars shall be at Franchisee's sole expense, provided, however, that attendance will not be required at more than two (2) such programs in any calendar year and shall not collectively exceed ten (10) business days in duration during any calendar year. + + 10.F. OTHER GUIDANCE. + + Pretzel Time may advise Franchisee from time to time of operating problems of the Unit which come to Pretzel Time's attention and, at Franchisee's request but without any liability therefore to Pretzel Time, Pretzel Time shall furnish to Franchisee guidance in connection with: (i) Methods, standards, specifications and operating procedures utilized by Pretzel Time Units; + + (ii) Purchasing required fixtures, furnishings, equipment, signs, Products, materials and supplies; + + (iii) Advertising and Promotional programs; + + (iv) Employee training; and + + (v) Administrative, bookkeeping, accounting and general operating and management procedures. + +Such guidance shall, in Pretzel Time's discretion, be furnished in the form of Pretzel Time's Operations Manual, bulletins and other written materials, electronic computer messages, telephone conversations and/or consultations at Pretzel Time's offices or at the Unit. Pretzel Time will make no separate charge to Franchisee for such operating assistance as Pretzel Time customarily provides. From time to time, Pretzel Time may make special assistance programs available to Franchisee, however, Franchisee will be required to pay the per diem fees and charges that Pretzel Time establishes from time to time for such special assistance programs. + +11. ADVERTISING AND OTHER PROMOTIONS. + + 11.A. PROVIDING OF ADVERTISING MATERIALS. + + Franchisee and Pretzel Time agree and recognize the value of uniform advertising to the goodwill and public image of Pretzel Time Units. Pretzel Time has instituted and maintains and administers an advertising fund for such advertising or public relations programs as Pretzel Time, in its sole discretion, may deem necessary or appropriate to advertise or promote the Pretzel Time System, nationally or regionally. Pretzel Time will periodically provide Franchisee with programs, promotional concepts, and other information designed to enhance the operation of the Franchise. In addition, Pretzel Time may provide optional special promotions from time to time which will be at Franchisee's cost, which may be mandatory. At its initial opening, Pretzel Time, at Franchisee's expense, shall designate and supply an initial quantity of forms, literature, display, and promotional materials. Pretzel Time, in consideration of the Advertising Fund Fee, shall periodically provide Franchisee with camera ready advertising materials. Multiple copies of advertising materials will be furnished to Franchisee for an additional fee, including any related shipping, handling and storage charges. + + 11.B. CONTROL OF ADVERTISING PROGRAMS AND CONCEPTS. + + Pretzel Time shall direct all such programs, with sole discretion over the creative concepts, materials, endorsements, and media used therein, and the placement and allocation thereof. The manner, media and cost of such advertising, public relations and promotional mailings shall be solely and completely within the discretion of Pretzel Time. Pretzel Time shall have the right to determine, in its sole discretion, the target and market areas for the development and implementation of such programs. Pretzel Time may expend, disburse and use funds from the Advertising Fund, in its sole discretion, for the following purposes: + + (1) The creation and development of nonlocal advertising, promotional campaigns, and public relations to promote and enhance the value of the Service Marks and the business of all the Pretzel Time retail establishments; + + (2) Payments to Pretzel Time of such reasonable sums as may be necessary for actual costs of advertising production, direct mail purchases, and other media marketing tools; + + (3) Payment of salaries and benefits for staff personnel in the marketing and public relations department as well as other administrative costs and overhead expenses of the department incurred by Pretzel Time; + + (4) The costs of employing advertising, marketing, public relations and promotion agencies to assist in preparing and conducting media programs and activities and supporting public relations, market + + + + + + research and other advertising, promotion and marketing activities; + + (5) Market research expenditures related to the development and evaluation of the effectiveness of advertising and sales promotion; and + + (6) Costs of organizing and providing facilities for international, national, or regional franchisee conferences. + + Franchisee understands and acknowledges that the Advertising Fund is intended to maximize recognition of the Marks and patronage of Pretzel Time Units. Although Pretzel Time will endeavor to utilize the Advertising Fund to develop advertising and marketing materials and programs and to place advertising that will benefit all Pretzel Time Units, Pretzel Time undertakes no obligation to ensure that expenditures by the Advertising Fund in or affecting any geographic area are proportionate or equivalent to the contributions to the Advertising Fund by Pretzel Time Units operating in that geographic area or that any Pretzel Time Units will benefit directly or in proportion to its contribution to the Advertising Fund from the development of advertising and marketing materials or the placement of Advertising. + + 11.C. SEGREGATION OF ADVERTISING FUND. + + Pretzel Time herein agrees to administratively segregate the Advertising Fund on its books and records. Fees paid by Franchisee into the advertising fund shall not under any circumstance be used for the general operating expenses of Pretzel Time but shall and will be used exclusively for advertising as outlined herein. Pretzel Time may spend in any fiscal year an amount greater or less than the aggregate contributions of the franchisees to the fund in that year and Pretzel Time may make loans to the fund bearing reasonable interest to cover any deficits of the fund and cause the fund to invest any surplus for future use by the fund. It is anticipated, and it is the intent of Pretzel Time that all contributions to the Fund shall be expended for advertising and promotional purposes during Pretzel Time's fiscal year within which contributions are made. Any monies not expended in the fiscal year in which they were contributed shall be applied and used for Fund expenses in the following year. + + 11.D. SUSPENSION OF ADVERTISING FUND FEES. + + Pretzel Time reserves the right to suspend contributions/fees and operations of the Advertising Fund for one or more periods, and the right to terminate the Advertising Fund, upon thirty (30) days' prior written notice to Franchisee. All unspent monies on the date of termination shall be distributed to Pretzel Time's franchisees and Pretzel Time, its Affiliates and designees in proportion to their respective contributions to the Advertising Fund upon the same terms and conditions set forth herein upon thirty (30) days' prior written notice Franchisee. + + 11.E. FRANCHISEE'S REQUIRED ADVERTISING EXPENDITURES. + + In addition to any contributions by Franchisee to the Advertising Fund, Franchisee is required to spend on marketing and related programs such amount as is required pursuant to the terms and conditions of Franchisee's lease or sublease. Franchisee acknowledges such amounts will vary from lease to lease, and therefore, all Pretzel Time Unit franchisees will not be obligated to expend the same amount on local advertising and marketing of the Unit. + + 11.F. USE OF TRADEMARK REFERENCES AND APPROVAL OF FRANCHISEE'S MARKETING. + + Franchisee further agrees that all advertising, promotion and marketing by Franchisee shall be completely clear and factual and not misleading and shall conform to the highest standards of ethical marketing and promotion policies which may be prescribed from time to time by Pretzel Time. Franchisee agrees to use the registration symbol of "R" within a circle (7 ) in connection with its use of the Marks. Franchisee agrees to refrain from any business or marketing practice which may be injurious to the business of Pretzel Time and the good will associated with the Marks and other Pretzel Time Units. Prior to their use by Franchisee, all press releases, literature, and samples of all local advertising, marketing, point-of-purchase, and related materials not prepared or previously approved by Pretzel Time shall be submitted to Pretzel Time for approval, which shall not be unreasonably withheld. If written disapproval is not received within twenty (20) days from the date of receipt by Pretzel Time of such materials, Pretzel Time shall be deemed to have approved the materials. Franchisee agrees not to use promotional or advertising materials which have been disapproved by Pretzel Time or that have not been approved for use within the preceding twelve months. + + In addition, any pamphlets, brochures, cards or other promotional materials offering free Products may only be used if prepared by Pretzel Time, unless otherwise approved in advance by Pretzel Time. Notwithstanding the foregoing, Pretzel Time will give favorable consideration to Franchisee's use of free product cards developed by Franchisee, if the cards clearly state that they may only be redeemed at Pretzel Time Units owned by Franchisee. Franchisee agrees to list and advertise the Franchise in the regular white pages telephone directories distributed within Franchisee's metropolitan area. + + Franchisee agrees to distribute and display at Franchisee's location, literature, display and promotional materials including special promotional materials as Pretzel Time may from time to time make available. Franchisee agrees that only those advertising, promotional materials, or items which are authorized by Pretzel Time in writing prior to use shall be used, sold or + + + + + +distributed, and no alternate display or use of the Pretzel Time Service Mark shall be made without the prior written permission of Pretzel Time. Replacement or updated literature, display, point-of-purchase and promotional materials may be obtained from Pretzel Time for a fee including shipping. + +12. ADHERENCE TO UNIFORM STANDARDS. + + 12.A. STANDARDS AND OPERATIONS MANUAL. + + Franchisee acknowledges and agrees that the operation of the Pretzel Time Unit in accordance with the specifications, standards, operating procedures and rules Pretzel Time prescribes for the operation of Pretzel Time Units is the essence of this Agreement and is essential to preserve the goodwill of the Marks and all Pretzel Time Units. Franchisee agrees to operate his Unit in strict compliance and adhere to Pretzel Time's Unit design, signage, interior decor, equipment and inventory requirements and rules and standards and procedures (hereinafter referred to as "Standards") set forth in any Operations Manual or Training Manual, as periodically modified and supplemented by Pretzel Time in its discretion during the term of this Agreement ("Operations Manual") and acknowledges that the same are reasonable, necessary and essential to the image and success of each Unit and the Pretzel Time System and agrees to comply with all such requirements and procedures. The Operations Manual shall contain mandatory and suggested specifications, standards and operating procedures that Pretzel Time prescribes from time to time for Pretzel Time Units and information relating to Franchisee's other obligations under this Agreement. The Operations Manual sets forth Standards regulating and relating to certain important obligations on the part of franchisees and sanctions in the event of noncompliance with such obligations. Pretzel Time may regulate, designate or approve any one or more of the following with respect to the Pretzel Time Unit: + + (1) Design, layout, decor, appearance and lighting; periodic and daily maintenance, cleaning and sanitation; replacement of obsolete or worn-out fixtures, furnishings, equipment and signs; use of interior and exterior signs, emblems, lettering and logos and the illumination thereof; + + (2) Types, models, brands, maintenance and replacement of required equipment, fixtures, furnishings and signs; + + (3) Approved, disapproved and required Products and other items to be offered for sale; + + (4) Designated and approved suppliers (including Pretzel Time and/or its Affiliates) of equipment, fixtures, furnishings, signs, Products, materials and supplies; + + (5) Use and operation of an approved point of sale register; + + (6) Payment of vendors; terms and conditions of sale and delivery of and payment for Products, materials, supplies and services sold by Pretzel Time, its Affiliates or unaffiliated suppliers; + + (7) Marketing, advertising and promotional activities and materials required or authorized for use; + + (8) Use of the Marks; + + (9) Qualifications, training, dress, appearance and staffing of employees; + + (10) Minimum hours of operation; + + (11) Participation in market research and testing and Product and service development programs prescribed by Pretzel Time; + + (12) Management by Unit Managers who have successfully completed Pretzel Time's initial training program; communication to Pretzel Time of the identities of such Unit Managers; replacement of managers whom Pretzel Time determines to be unqualified to manage the Pretzel Time Unit; and other matters relating to the management of the Pretzel Time Unit and its management personnel; + + (13) Use of a designated computer hardware and software system and equipment with telecommunications capability, including the procedures for providing sales information of the Unit to Pretzel Time; + + (14) Bookkeeping, accounting, data processing and record keeping systems and forms, methods, formats, content and frequency of reports to Pretzel Time of sales, revenues, financial performance and condition; operational information; tax returns and other operating and financial information, including without limitation, audited yearly financial statements; + + (15) Types, amounts, terms and conditions and approved underwriters and brokers of public, product, business interruption, crime loss, fire and other required insurance coverage; Pretzel Time's rights under such policies as an additional named insured; required or impermissible insurance contract provisions; assignment of policy rights to Pretzel Time; Pretzel Time's right to obtain insurance coverage for the Unit at Franchisee's expense if Franchisee fails to obtain required coverage; Pretzel Time's right to defend claims; and similar matters relating to + + + + + + insured and uninsured claims; + + (16) Compliance with applicable laws; obtaining required licenses and permits; adherence to good business practices; observing high standards of honesty, integrity, fair dealing and ethical business conduct in all dealings with customers, suppliers and Pretzel Time and its Affiliates and/or designees; and notification of Pretzel Time in the event any action, suit or proceeding is commenced against Franchisee or relating to the Unit; and + + (17) Regulation of such other elements and aspects of the appearance, operation of and conduct of business by, Pretzel Time Units as Pretzel Time determines from time to time, in its sole discretion, to be required to preserve or enhance the efficient operation, image or goodwill of Pretzel Time Units and the Marks. + + 12.B. CONFIDENTIALITY OF OPERATIONS MANUAL. + + Pretzel Time will make available to Franchisee during the term of the Franchise (1) copy of the Operations Manual by loaning a copy of the Operations Manual to Franchisee. Franchisee acknowledges and agrees that all manuals loaned to Franchisee contain confidential and proprietary material and information of Pretzel Time provided to Franchisee is to be used by Franchisee only in connection with the operation of the franchised Unit and other Pretzel Time Units. The Operations Manual contains trade secrets and confidential information and will remain the property of Pretzel Time and shall be returned to it on termination of this Agreement. Franchisee covenants not to reveal the contents of the Operations Manual to unauthorized persons. Franchisee may not, at any time, copy the Operations Manual, in whole or in part, either physically or electronically. In the event Franchisee's copy of the Operations Manual is lost, destroyed or significantly damaged, Franchisee shall be obligated to obtain from Pretzel Time, at Pretzel Time's then applicable charge, a replacement copy of the Operations Manual. + + 12.C. INCORPORATION OF OPERATIONS MANUAL INTO AGREEMENT. + + The Operations Manual's specifications, standards, and operating procedures communicated to Franchisee in writing shall be deemed a part of this Agreement and are incorporated herein by reference. Such Operations Manual provisions and all reasonable modifications shall be binding upon Franchisee to the same extent as if set forth verbatim in this Franchise Agreement, and such provisions may be changed from time to time by Pretzel Time, in its sole discretion, provided that changes are reasonably designed to enhance Pretzel Time's Products, the Pretzel Time System, or franchise operation and are uniformly applied with respect to all franchisees. Any administrative or financial Section set forth in the Operations Manual shall be in addition to, and not in derogation or limitation of, any right or remedy granted to Pretzel Time under the Franchise Agreement, the Operations Manual, or any other document, or otherwise available to Pretzel Time, at law or in equity, including, without limitation, the right to terminate a franchise in the event of certain defaults or delinquencies. + + 12.D. MODIFICATIONS/UPDATES OF OPERATIONS MANUAL. + + Franchisee understands and agrees that the Pretzel Time System is constantly being modified and improved, and that such modifications and improvements require changes from time to time in the system of operations. Franchisee further agrees to accept and comply with such modifications, revisions, and additions to the Pretzel Time System and Operations Manual which Pretzel Time in the good faith exercise of its judgment believes to be desirable and reasonably necessary in the time period indicated by Pretzel Time. + + Franchisee agrees that Standards may be periodically modified by Pretzel Time and that such modifications may obligate Franchisee to invest additional capital in the Unit and/or incur higher operating costs. Pretzel Time will not obligate Franchisee to invest additional capital at a time when such investment cannot in Pretzel Time's reasonable judgment be amortized during the remaining term of this Agreement. Franchisee hereby agrees that standards and specifications prescribed from time to time in the Operations Manual, or otherwise communicated to Franchisee in writing or electronically, shall constitute provisions of this Agreement as if fully set forth herein. + +13. UNIT IMAGE AND OPERATION. + + 13.A. CONDITION AND APPEARANCE OF UNIT. + + Franchisee agrees that: + + (1) neither the Unit nor the Site will be used for any purpose other than the operation of a Pretzel Time Unit in full compliance with this Agreement or other agreements with Pretzel Time; and + + (2) Franchisee will maintain the condition and appearance of the Unit, its equipment, furnishings, fixtures, and signs in accordance with the specifications and standards of Pretzel Time and consistent with the image of a Pretzel Time Unit as a first-class, clean, sanitary, attractive and efficiently operated food service business; and + + (3) Franchisee will perform such maintenance (including, without limitation, maintenance procedures and routines which Pretzel Time prescribes from time to time) with respect to the decor, + + + + + + equipment, fixtures, furnishings, vehicles, and signs of the Unit and the Site, as may be required or directed by Pretzel Time from time to time to maintain such condition, appearance, and efficient operation, including, without limitation: + + (a) continuous and thorough cleaning and sanitation of the interior and exterior of the Unit; + + (b) thorough repainting and redecorating of the interior and exterior of the Unit and/or the Site at reasonable intervals; + + (c) interior and exterior repair of the Unit and/or Site; and + + (d) repair or replacement of damaged, worn out or obsolete furnishings, equipment, fixtures and signs, provided that Pretzel Time will not require Franchisee to replace any obsolete equipment unless Pretzel Time has initiated a program to replace such equipment as it becomes necessary in its company-owned Pretzel Time Units; and + + (4) Franchisee will not make any material alterations to the Site or to the appearance of the Unit as originally developed, without prior approval in writing by Pretzel Time; and + + (5) Upon notice from Pretzel Time, Franchisee shall remodel and conform Franchisee's building design, Trade Dress, color schemes, and presentation of Marks to Pretzel Time's then current public image within a reasonable amount of time, which shall not exceed six (6) months. Such a remodeling may include extensive structural changes to the Unit fixtures and improvements as well as such other changes as Pretzel Time may direct and Franchisee shall undertake such a program promptly upon notice from Pretzel Time; provided the remodeling shall not be required until such time as Pretzel Time has commenced or completed a similar program in at least fifty percent (50%) of those Pretzel Time Units owned and operated by Pretzel Time. This requirement shall not apply in the event notice from Pretzel Time is received during the last year of the term hereof or the term of any agreement by virtue of which Franchisee occupies the Unit. + + In addition to Pretzel Time's rights to terminate this Agreement as set forth herein, if Franchisee does not maintain the condition and appearance of the Unit as herein required, Pretzel Time, may, upon not less than ten (10) days' written notice (or, in cases of health or sanitation hazards or other public endangerment, immediately on oral or written notice) to Franchisee: + + (i) arrange for the necessary cleaning or sanitation, repair, remodeling, upgrading, painting or decorating; or + + (ii) replace the necessary fixtures, furnishings, equipment, signs. + + If Franchisee fails or refuses to initiate within ten (10) days after receipt of a notice that the general state of repair, appearance, and cleanliness of your store does not meet Pretzel Time's standards, and thereafter continue in good faith and with due diligence a bona fide program to undertake and complete required maintenance or refurbishing, Pretzel Time has the right, but is not obligated, to enter upon the premises of the Unit and effect such maintenance and refurbishing on Franchisee's behalf, and Franchisee shall pay the entire cost thereof to Pretzel Time on demand. + + 13.B. UNIT MENU. + + Franchisee agrees that the Unit shall offer for sale all Products and no other products, which Pretzel Time, in its sole discretion, may authorize and/or require from time to time for the Unit. Franchisee agrees that the Unit shall not offer for sale or sell any Products or services at or from the Unit which have not been approved in writing by Pretzel Time or use the Site or Unit for any purpose other than the operation of a Pretzel Time Unit. Franchisee agrees that the Unit shall not sell any Products at, from or away from the Site until Pretzel Time, in its sole discretion, has approved the same, provided the foregoing shall not limit Franchisee to sample in front of the lease line as limited in Franchisee's lease. Pretzel Time reserves the right to change the types of authorized Products and require Franchisee to offer to sell and sell the new, modified or substituted Products. Pretzel Time may develop new Products, methods of operations, and standards and may provide you with information about developments. Franchisee also acknowledges and agrees that if Pretzel Time requires the Unit to use new or substitute products not currently offered at Pretzel Time Units, Franchisee agrees to offer such Products in compliance with Pretzel Time's specifications, standards and procedures prescribed in the Operations Manuals or otherwise in writing and to diligently pursue obtaining any permits and take such actions (including, without limitation, constructing improvements and acquiring fixtures, furnishings, equipment, supplies, and materials) required to offer such Products. Franchisee acknowledges and understands that such modifications to the Products to be offered by the Unit may require Franchisee to incur additional costs and expenses to operate the Unit, including, without limitation, the purchase and/or lease of additional or substitute furnishings, furniture, fixtures or equipment and Franchisee agrees to incur such expenses in connection therewith. + + 13.C. ADHERENCE TO APPROVED ITEMS. + + + + + + The reputation and goodwill of all Pretzel Time Units are based upon, and can only be maintained by, the sale of distinctive, high-quality Products and the presentation, packaging and service of Products in an efficient and appealing manner. Pretzel Time has developed and shall continue to develop certain proprietary food products which will be prepared by or for Pretzel Time according to Pretzel Time's recipes and formulas. Pretzel Time has developed and shall continue to develop standards and specifications for fresh hand-rolled pretzels, frozen pretzels, pretzel toppings, beverages and other healthy snack food products, materials and supplies incorporated in or used in the preparation, baking, or serving of Products authorized by Pretzel Time. The need for quality and quantity control in the Products offered for sale at the Unit is acknowledged by Franchisee. All Products offered by Franchisee must be of uniform quality and quantity and offered for sale to the public in accordance with Pretzel Time's specifications as set forth in Pretzel Time's Operations Manual and as may be amended from time to time. + + Pretzel Time has approved and shall review and continue to approve suppliers and distributors of the foregoing Products, supplies, materials, equipment, fixtures and machines that meet Pretzel Time's standards and requirements including, without limitation, quality, quantity and portions, prices, output requirements, distribution methods and locations, standards of service, financial capability, customer service and other criteria. Franchisee agrees that minimum standards for items of inventory, Products, machines, and equipment may be recognized by brand name rather than by technical or engineering description. + + Franchisee agrees that it will use all equipment and Products, including, without limitation, food products, smallwares, equipment, and paper products as designated by Pretzel Time and shall purchase Pretzel Time's private label food products, materials, supplies and proprietary food products, ingredients, spices, sauces, mixes, beverages, materials and supplies used in the preparation of Products developed by or for Pretzel Time or its Affiliates whether or not pursuant to a special recipe or formula or bearing the Marks only from Pretzel Time, its Affiliates or non-affiliated sources designated by Pretzel Time. Franchisee further agrees to purchase only from distributors and suppliers approved or required by Pretzel Time. Franchisee agrees that the approved Products, equipment, smallwares, and inventory used on the premises may alter from time to time as Pretzel Time reasonably deems necessary. Franchisee agrees to offer for sale only those Products approved by Pretzel Time and no others without the prior written approval of Pretzel Time. Franchisee shall not, after receipt in writing of any modification of an approved or required supplier or distributor, manufacturer of equipment, products, materials, supplies or other items reorder any product from any supplier or distributor that is no longer approved. Pretzel Time may approve or require a single distributor or supplier for any Products, materials or supplies and may approve or require a distributor or supplier only as to certain products, materials and supplies, and such approval may be temporary pending a further evaluation of such distributor or supplier by Pretzel Time. Pretzel Time may concentrate purchases with one or more distributors or suppliers to obtain lower prices and/or advertising support and/or services for the benefit of Pretzel Time, the Pretzel Time System and/or Pretzel Time Units. + + Pretzel Time will loan to Franchisee a list of approved brand Products for use during the term of this Franchise Agreement at the initial training session. Franchisee agrees to not copy the list. Franchisee will, during the term of this Agreement and after its termination or expiration, maintain the list and its contents in strict confidence, and upon the expiration or termination of this Franchise Agreement, whichever is earlier, will immediately return it to Pretzel Time. Pretzel Time shall promptly provide Franchisee with any amendments to the designated list of inventory of available Products and supplies to be carried and sold at Franchisee's location. Franchisee shall at all times maintain an adequate inventory of approved Products sufficient in quality and variety to realize the full potential of the Unit. + + 13.D. EXCEPTION PROCESS. + + If Franchisee proposes to purchase materials or supplies not theretofore approved by Pretzel Time as meeting its specifications, or from a supplier or distributor not previously approved by Pretzel Time, Franchisee shall first notify Pretzel Time and request Pretzel Time's approval using the special exception form provided to Franchisee in its Operations Manual, and pay any reasonable fees that Pretzel Time designates therefor. Further, Franchisee agrees to use all forms specified and developed by Pretzel Time for requesting any exceptions in products or suppliers. Pretzel Time may require submission of sufficient information and samples to determine whether such materials, supplies or suppliers meet its specifications as well as financial information regarding the supplier. Pretzel Time will advise Franchisee within a reasonable time whether such + +materials or supplies meet its specifications. Pretzel Time does not maintain a formal criteria for approving materials, supplies or suppliers. All approvals, disapprovals and revocations of approval of suppliers will be communicated to Franchisee, in writing, and shall be in the sole discretion of Pretzel Time. Franchisee must comply with the following conditions in order to seek a substitution for a Pretzel Time approved Product: + + (1) Franchisee shall submit a written request to Pretzel Time + + + + + + for approval of a non-approved supplier or product; + + (2) Franchisee and supplier shall demonstrate to Pretzel Time's reasonable satisfaction that it is able to supply the commodity which meets Pretzel Time's specifications to Franchisee; and + + (3) The supplier shall demonstrate to Pretzel Time's reasonable satisfaction that the supplier is of good standing in the business community with respect to its financial soundness and the reliability of its product and service and shall request in writing to Pretzel Time to be named an approved supplier. + + 13.E. PROMOTIONAL ALLOWANCES. + + Franchisee acknowledges and agrees that Pretzel Time may, in its sole discretion, collect and retain all allowances, benefits, credits, monies, payments or rebates (collectively "Promotional Rebates"), whether for promotional, advertising or other purposes, offered to Franchisee or Pretzel Time or its Affiliates by manufacturers, suppliers and distributors based upon Franchisee's purchases of Products or other products and materials. Franchisee assigns to Pretzel Time or its designee all of Franchisee's right, title and interest in and to any and all such Promotional Allowances and authorizes Pretzel Time or its designee to collect any such Promotional Allowances for remission to the general operating funds of Pretzel Time. + +14. FRANCHISEE OPERATIONS. + + 14.A. MANAGEMENT. + + Franchisee agrees that he will at all times faithfully, honestly, and diligently perform his obligations hereunder, that he will continuously exert his best efforts and shall continually train and supervise his personnel to Pretzel Time's reasonable standards, in furtherance of the mutual business interests of both Pretzel Time and Franchisee and that he will not engage in any other business or activity that may conflict with his obligations hereunder. A Unit shall be under the direct, on-premises supervision of a trained and competent Franchisee or a trained and competent employee acting as a Unit Manager at all times. Franchisee shall remain active in overseeing the operations of the Unit conducted under the supervision of such Unit Manager. Pretzel Time shall have the right to deal with the Unit Manager and assistant managers on matters pertaining to the day-to-day operations of, and reporting requirements for the Unit. Franchisee shall be required to notify Pretzel Time within seven (7) business days of changing Unit Managers. Franchisee shall hire all employees of the Unit and shall be exclusively responsible for the terms of their employment and compensation and for the proper training of such employees in the operation of the Unit. + + If the Unit at any time is not being managed by you or a Unit Manager who shall have satisfactorily completed Pretzel Time's training program, Pretzel Time is authorized, but is not required to immediately appoint a Manager to maintain the operations of the Unit for you. Pretzel Time has the right to change a reasonable fee for such management services, not to exceed our costs, and to cease to provide such management services at any time. Pretzel Time's right to manage a Unit and obtain reimbursement for costs also applies in the event of your death or disability. + + 14.B. SUFFICIENT WORKING CAPITAL. + + Franchisee shall maintain an adequate sales force to serve properly all customers, and shall carry at all times a stock of merchandise of such size, character, quality and price to produce the maximum return to Franchisee and so as to produce all of the gross revenue which may be produced by such manner of operation. + + 14.C. FILING OF OPERATIONS AND SALES REPORTS. + + Franchisee's net revenues and operational analysis are to be reported on or before Tuesday at 12:00 P.M. Eastern Standard Time (or Eastern Daylight Savings Time) or any other time reasonably designated by Pretzel Time, to Pretzel Time on forms designated by Pretzel Time for the immediately preceding week. If the gross sales report is not submitted as herein specified, Pretzel Time may, at its option, charge a late fee of $50.00 to Franchisee. There will only be one late fee for each late report. + + 14.D. EMPLOYEE DRESS AND CUSTOMER SERVICE. + + The presentation of an uniform image is essential to a successful franchise system. Franchisee shall cause all employees of Franchisee while working at the franchise location to dress appropriately (in the specific uniform approved and designated by Pretzel Time) in keeping with the Pretzel Time image, as Pretzel Time may designate from time to time, to present a neat and clean appearance and to render confident and courteous service to the Franchise's customers. + + 14.E. COMPLIANCE WITH LAWS AND GOOD BUSINESS PRACTICES. + + Franchisee shall secure and maintain in force in his name all required licenses, permits, and certificates relating to the conduct of his business pursuant to this Agreement. Franchisee will conduct the Franchise in strict compliance with all applicable laws, ordinances, regulations, and other requirements of any federal, state, county, municipal or other government, including, without limitation, those laws and regulations pertaining to preparation, purchase and handling of food products, occupational hazards, + + + + + +health, safety and sanitation, worker's compensation insurance, unemployment insurance, and withholding and payment of all taxes. While Pretzel Time may advise Franchisee as a courtesy on any applicable laws, ordinances, or regulations, Pretzel Time undertakes no duty to do so and Franchisee hereby acknowledges it is Franchisee's sole duty to inquire regarding and concerning all laws, ordinances, and regulations affecting the Unit, its operations, employees and Franchisee. + + Franchisee shall in all dealings with its customers, suppliers, Pretzel Time, and public officials adhere to high standards of honesty, integrity, fair dealing and ethical conduct. Franchisee agrees to refrain from any business or advertising practice which may be injurious to the business of Pretzel Time and the goodwill associated with the Marks and other Pretzel Time Units. + + Franchisee shall notify Pretzel Time within three (3) business days after the commencement of any action, suit, proceeding or issuance of any order, writ, injunction, award or court decree which may adversely affect the operation or financial condition of Franchisee or the unit or immediately notify Pretzel Time of any notice of health or sanitation violation. + + 14.F. PAYMENT OF TAXES. + + Franchisee shall be solely responsible for payment of all taxes, including, but not limited to, real estate, sales, payroll, franchise, income, personal property, and gross receipts taxes which are assessed as a result of Franchisee's operation of the Franchise. + + 14.G. SALE OF PRODUCT. + + Franchisee agrees not to sell or offer to sell any materials, supplies, or inventory used in the preparation of any of the Products other than to Pretzel Time and that he shall not sell, dispense, give away or otherwise provide without Pretzel Time's prior written consent any product except by means of retail sales in the franchise location. Franchisee may only sell finished Products and may not sell any Products to any person or entity purchasing the Products for resale. Notwithstanding the foregoing, Franchisee may offer free samples of Products at or directly in front of the Unit to retail customers only. + + 14.H. COOPERATION. + + Franchisee agrees that he shall cooperate with Pretzel Time in taking any action, or refraining from any action, which in the judgment of Pretzel Time is necessary or desirable to promote and enhance the quality of the products of the Franchise location, the service provided by the Franchisee, or the image of the Franchise in the community. + + 14.I. INSURANCE. + + Franchisee shall maintain at Franchisee's expense, in form, amounts and with insurers satisfactory to Pretzel Time, which insurers must have an A.M. Best Company rating of "A-" or better and naming Pretzel Time an additional insured, insurance against all types of public liability with personal injury coverage and property damage coverage. In addition to coverage as aforesaid such insurance shall include coverages as set forth in the Operations Manual and shall contain a provision obligating all insurers to provide a written notice Pretzel Time of any cancellation or modification of coverage at least thirty (30) days prior to the effective date of such modification or cancellation. + + The insurance afforded by the policy or policies respecting liability shall not be limited in any way by reason of any insurance which may be maintained by Pretzel Time. Within sixty (60) days of the signing of this Agreement, but in no event later than the date on which Franchisee acquires an interest in the real property (by lease or purchase) on which it will develop and operate the Franchise, a Certificate of Insurance showing compliance with the foregoing requirements shall be furnished by Franchisee to Pretzel Time for approval. Such certificate shall state that said policy or policies will not be canceled or altered without at least thirty (30) days prior written notice to Pretzel Time and shall reflect proof of payment of premiums. Maintenance of such insurance and the performance by Franchisee of the obligations under this Section shall not relieve Franchisee of liability under the indemnity provision set forth in this Agreement. Minimum limits as required above may be modified from time to time, as conditions require by written notice to Franchisee. + + Should Franchisee not procure and maintain such insurance coverage as required by Pretzel Time, Pretzel Time shall have the right and authority, without any obligation to do so, immediately procure such insurance coverage and to charge same to Franchisee, which charges together with a reasonable fee for expenses incurred by Pretzel Time in connection with such procurement, shall be payable by Franchisee immediately upon notice. + + Franchisee shall fully cooperate with Pretzel Time in its efforts to obtain such insurance policies, promptly execute all forms or instruments required to obtain or maintain such insurance policies, allow inspections of the Unit or vehicles which are required to obtain and maintain insurance and pay Pretzel Time on demand for any costs or premiums. + + 14.J. SUGGESTED RETAIL PRICES. + + Pretzel Time may from time to time advise or offer guidance to Franchisee relative to prices for Products offered for sale by Franchisee that in Pretzel Time's judgment constitute good business practice. Franchisee shall not be obligated to accept any such advice or guidance and shall have the sole right to determine and to sell products at any price that it determines. + + + + + +Whenever Pretzel Time recommends a retail price, such recommendations are based on Pretzel Time's experience concerning all factors that enter into a proper price, but such recommendation is in no manner binding on Franchisee and no such advice or guidance shall be deemed or construed to impose upon Franchisee any obligation to charge any fixed, minimum or maximum prices for any product offered for sale by the Franchise. Pretzel Time reserves the right to advertise retail prices of Pretzel Time Products, provided that such retail prices are qualified as "suggested." The parties understand and agree that such advertising shall not be construed as requiring Franchisee to adhere to such prices but Franchisee shall have complete freedom to establish retail prices. + +15. ACCOUNTING, REPORTS AND FINANCIAL STATEMENTS. + + 15.A. ESTABLISHMENT OF ACCOUNTING SYSTEM. + + Franchisee shall establish at his own expense a complete and accurate bookkeeping, accounting, record keeping and data processing system prepared in accordance with generally accepted accounting principles and conforming to the requirements and formats that Pretzel Time prescribes from time to time. Pretzel Time shall provide Franchisee with forms on which to maintain certain sales and operational data. Franchisee shall furnish to Pretzel Time on said forms that Pretzel Time prescribes from time to time: + + (i) On Tuesday of each week, a report on the Unit's net revenues and sales and operations for the previous week; + + (ii) Every six calendar month period, a balance sheet and a profit and loss statement for the Unit for the previous semi-annual period and a year to-date statement of financial condition as of the end of such previous period; and + + (iii) Within thirty (30) days after Franchisee's year end, an annual financial report. + +The reports required in Section 15.A. (ii) and (iii) if not audited, should be signed by the Franchisee or its financial officer, attesting that (1) the reports are true and accurate, (2) they are prepared in accordance with GAPP on a basis consistent with prior periods, (3) they fully describe and completely disclose the information sought, and (4) the signer has made diligent efforts to ascertain the truth and completeness of the information. + + 15.B. MAINTENANCE OF RECORDS. + + Franchisee agrees, at all times, he shall keep and maintain adequate, accurate, true, and proper records, books, reports, data, and accounts relative to the franchise in the English language and in accordance with generally accepted accounting principles, and retain the records for a period of three (3) years after the date they were prepared, from which there may be readily determined the information required in the operating reports to be filed with Pretzel Time. Such records include, without limitation, daily cash reports, cash receipts journal and general ledger, cash disbursements journal and weekly payroll register, monthly bank statements and daily deposit slips and cancelled checks; tax returns, supplier invoices, dated cash register tapes, weekly inventories, sales reports, financial statements and tax returns. + + Franchisee hereby authorizes Pretzel Time to utilize the data supplied by Franchisee under this Section in any publication, discovery statement, Offering Circular, or advertisements related to the sale of Franchises or related entities by Pretzel Time, anywhere, at any time, without specific compensation therefor. + +16. AUDITS AND INSPECTIONS. + + 16.A. AUDITS. + + Pretzel Time or its designee shall have the right at any time during business hours and without prior notice to Franchisee, to inspect, audit and copy or the right to cause to be inspected, audited and copied, the business records, bookkeeping and accounting records, sales and income tax records and returns and other records of the Franchised Business, including but not limited to, daily cash reports, cash receipts journal and general ledger, cash disbursements journal and weekly payroll register, monthly bank statements and daily deposit slips and cancelled checks; tax returns, supplier invoices, dated cash register tapes, weekly inventories, sales reports, financial statements and tax returns and the books and records of any corporation or partnership which holds the Franchise including the personal financial records and tax returns of the Franchisee during and after the term of the Franchise Agreement. Franchisee agrees to maintain on the premises all sales and operational information for four weeks. + + Any such inspection or audit will take place at a time which will not interfere with Franchisee's normal business. Franchisee shall fully cooperate with Pretzel Time's representatives and independent accountants hired by Pretzel Time to conduct any such inspection or audit. If Pretzel Time deems necessary, Franchisee shall deliver to Pretzel Time or its designated agents copies of all bookkeeping records not already in the possession of Pretzel Time, including customer records, cash register tapes, sales and purchase records and tax records, to enable Pretzel Time or its representative or designee to adequately audit Franchisee's gross sales. Franchisee hereby waives any right to withhold tax records relative to the Franchise as privileged information. Each report and + + + + + +financial statement shall be signed and verified by Franchisee in the manner Pretzel Time prescribes. Pretzel Time reserves the right to require Franchisee to have audited or reviewed financial statements prepared on an annual basis. + + In the event that an audit discloses that Franchisee's actual net revenues exceed Franchisee's reported net revenues by two percent (2%) or more for any thirty day period, Franchisee is obligated to pay to Pretzel Time, within fifteen (15) days after receipt of the inspection or audit report, the royalty of seven percent (7%) and the Advertising Fund Fee of one percent (1%) of the amount of such understatement plus interest from the date such payments were originally due. The audit will be conducted at the expense of Pretzel Time, provided that if an audit disclosed an understatement of two percent (2%), as described above, Franchisee will bear the cost of the audit, including without limitation, the charges of attorneys and any independent accountants, their travel expenses, room and board, and compensation of Pretzel Time's representatives and independent accountants. Providing that in no case will Franchisee be obligated to pay more than ten thousand dollars ($10,000) for such inspection or audit costs. The foregoing remedies shall be in addition to Pretzel Time's other remedies and rights under this Agreement or applicable law. + + 16.B. RIGHT OF ENTRY AND INSPECTION. + + To determine whether Franchisee and the Unit are complying with this Agreement and with all Pretzel Time's standards and operations as prescribed by Pretzel Time, Pretzel Time or its designated agents shall have the right at any reasonable time and without prior notice to Franchisee to: + + a. Inspect the Unit; + + b. Observe, photograph and video tape the Unit's operations for such consecutive or intermittent periods as Pretzel Time deems necessary; + + c. Remove samples of any Products, materials or supplies for testing and analysis; + + d. Interview personnel of the Unit; + + e. Interview customers of the Unit; and + + f. Inspect and copy any books, records and documents relating to the operation of the Unit. Franchisee agrees to cooperate fully with Pretzel Time in connection with any such inspections, observations, photographing, video taping, Product removal and interviews. Franchisee shall present to his customers such comment or evaluation forms as Pretzel Time periodically prescribes and shall participate and/or request his customers to participate in any surveys performed by or on behalf of Pretzel Time. At the conclusion of his inspection, Pretzel Time's field representative shall prepare a written report which shall contain all of his observations and conclusions. If the field representative determines that a condition amounting to a default of this Agreement has occurred or exists, this conclusion shall be promptly communicated to Franchisee and Pretzel Time. + +17. TRANSFER, ASSIGNMENT AND REPURCHASE. + + 17.A. BY PRETZEL TIME. + + This Agreement is fully transferable by Pretzel Time and shall inure to the benefit of any assignee, transferee or other legal successor to Pretzel Time's interest herein. If Pretzel Time's assignee will perform any of Pretzel Time's obligations under this Agreement, then that assignee must be financially capable of performing those obligations and the assignee must expressly assume and agree to perform them. Franchisee agrees that Pretzel Time shall have the right, from time to time, to delegate the performance of any portion or all of its obligations and duties under this Agreement. + + 17.B. BY FRANCHISEE. + + Franchisee understands and acknowledges that the rights and duties created by this Franchise Agreement are personal to Franchisee (or if Franchisee is a corporation or partnership, to its Owners) and that Pretzel Time has granted the Franchise to Franchisee in reliance upon Pretzel Time's perceptions of the individual or collective character, skill, aptitude, attitude, business ability and financial capacity of Franchisee (or its Owners). Accordingly, Franchisee agrees no Transfer shall be made without Pretzel Time's prior written approval. Any Transfer without such approval shall constitute a breach of this Agreement and shall be void and of no effect. Pretzel Time's consent to the assignment shall neither constitute a novation or change in Franchisee's obligations under this agreement, nor constitute a waiver of any claims Pretzel Time may have against Franchisee (or its Owners) nor be deemed a waiver of Pretzel Time's right to demand the transferee's exact compliance with all of the terms or conditions of this Agreement. + + 17.C. CONDITIONS FOR APPROVAL OF TRANSFER. + + If Franchisee is in full compliance with this Agreement (and, if Franchisee is a corporation or partnership, its Owners are in full compliance with this Agreement), Pretzel Time shall not unreasonably withhold its approval of a Transfer that meets all of the following requirements: + + (1) The transferee and its Owners must meet Pretzel Time's then applicable standards for Pretzel Time Unit franchisees and must have had sufficient business experience, aptitude, and financial resources to operate the Unit; + + + + + + (2) Franchisee has paid such royalty, advertising fund fees, amounts owed for purchases by Franchisee from Pretzel Time and its Affiliates and all other amounts owed to Pretzel Time or its Affiliates and third party creditors and shall have submitted to Pretzel Time all required reports and statements; + + (3) Franchisee or the transferee has paid Pretzel Time's then current transfer fee to defray expenses Pretzel Time incurs in connection with the transfer, except that if the proposed Transfer is, to or among Owners of Franchisee, this provision shall not apply; + + (4) The Transferee and/or its Unit Manager have agreed to complete Pretzel Time's training program to Pretzel Time's satisfaction and prior to the date of transfer; + + (5) The Transferee has agreed to be bound by all of the terms and conditions of this Agreement and executes a current Franchise Agreement and other franchise documents, a sublease agreement, if any, and other documents required by Pretzel Time; + + (6) Franchisee (and its transferring Owners) have executed a general release, in form satisfactory to Pretzel Time, of any and all claims against Pretzel Time and its Affiliates and their officers, directors, employees and agents; + + (7) Pretzel Time has approved the material terms and conditions of such Transfer, including, without limitation, that the price and terms of payment are not so burdensome as to affect adversely the transferee's operation of the Unit; provided, however, that Pretzel Time's approval of such Transfer does not ensure the transferee's success as a Pretzel Time Unit franchisee, nor should the transferee rely upon Pretzel Time's approval of such Transfer in determining whether to acquire Franchisee's Pretzel Time Unit; (8) If Franchisee (and/or its Owners) finances any part of the sale price of the transferred interest, Franchisee and/or its Owners have agreed that all obligations of the transferee under or pursuant to any promissory notes, agreements or security interests reserved by Franchisee or its Owners in the assets of the Unit or the Premises shall be subordinate to the transferee's obligations to pay royalty and service fees and other amounts due to Pretzel Time and its Affiliates and otherwise to comply with this Agreement; + + (9) Franchisee (and its Owners) have executed a noncompetition covenant in favor of Pretzel Time and the transferee agreeing that, for a period of twelve (12) months commencing on the effective date of the Transfer, Franchisee, its Owners and members of the immediate families of Franchisee and each of its Owners will not hold any direct or indirect interest as a disclosed or beneficial owner, investor, partner, director, officer manager, employee, consultant, representative or agent, or in any other capacity, in a Competitive Business located or operating within three (3) miles of the Unit, and within three (3) miles of any other Pretzel Time Unit; + + (10) If consent is required, the lessor of the Premises consents to the assignment or sublease of the Premises to the transferee; + + (11) Franchisee has complied with all of its obligations to Pretzel Time, its Affiliates, suppliers, and distributors, and Franchisee is not in default under this Agreement or any other Agreement with Pretzel Time or Pretzel Time's Affiliates; + + (12) All improvements, including refurbishings, remodelings, new equipment must be made prior to the Transfer; and + + (13) Franchisee (and its Owners) has agreed that he will not directly or indirectly at any time or in any manner (except with respect to Pretzel Time Units owned and operated by Franchisee) identify himself or any business as a current or former Pretzel Time Unit, or as a franchisee, licensee or dealer of Pretzel Time or its Affiliates, use any Mark, any colorable imitation thereof or other indicia of a Pretzel Time Unit in any manner or for any purpose or utilize for any purpose any tradename, trade or service mark or other commercial symbol that suggests or indicates a connection or association with Pretzel Time or its Affiliates. + + 17.D. TRANSFER TO A WHOLLY-OWNED CORPORATION. + + Notwithstanding Section 17.B., if Franchisee is in full compliance with this Agreement, Franchisee may transfer this Agreement to a corporation which conducts no business other than the Pretzel Time Unit and in which Franchisee maintains management control and owns and controls one hundred percent (100%) of the equity and voting power of all issued and outstanding capital stock. Transfers of shares of such corporation will be subject to the provisions of Section 17.C.(2) and 17.C.(8). Notwithstanding anything to the contrary herein, Franchisee shall remain personally liable under this Agreement as if the Transfer to such corporation had not occurred. The articles of incorporation, by-laws and other organizational documents of such corporation shall recite that the issuance and assignment of any interest therein is restricted by the terms of Section 17 of this Franchise Agreement, and all issued and outstanding stock certificates of such corporation shall bear a legend reciting or referring to the restrictions hereof. + + 17.E. FORMATION OF A CORPORATION. + + + + + + In the event, Franchisee desires to form a corporation for the sole purpose of acting as a Franchisee under this Agreement, in addition to the conditions imposed under Section 17, the following terms and conditions must be complied with, unless otherwise agreed in writing by Pretzel Time: + + (1) Franchisee must be the owner of the majority interest in the voting stock of the corporation and the principal executive officer thereof; + + (2) Franchisee's shareholders shall enter into an agreement under seal with Pretzel Time, on Pretzel Time's standard form, guaranteeing the full payment of the corporation's money obligations to Pretzel Time as individual surety and agreeing to be bound individually by the non-competition obligation stated herein; and + + (3) Franchisee and all shareholders must continue to meet its obligations under the noncompetition provisions of this Agreement. + + In the event Franchisee or its successor is a corporation or partnership or similar entity, it is agreed as follows: + + (1) That the Articles of Incorporation and By-Laws or the Partnership Agreement, shall reflect that the issuance and transfer of voting stock or other ownership interest therein, is restricted by the terms of this Agreement. Franchisee shall furnish Pretzel Time at the time of the execution of this Agreement or of assignment to the corporation or partners of Franchisee, a written agreement stating that no stockholder or partner will sell, assign or transfer voluntarily or by operation of law any securities of Franchisee, or other ownership interest in Franchisee, to any person or entity other than existing shareholders or partnership, to the extent permitted hereunder, without the prior written consent of Pretzel Time. All securities issued by Franchisee will bear the following legend which shall be printed legibly and conspicuously on each stock certificate or other evidence of Ownership Interest: + + "The transfer of these securities is subject to the terms and conditions of a Franchise Agreement with Pretzel Time, Inc. dated , 199____. Reference is made to said Agreement and to the restrictive provisions of the Articles and By-laws or Shareholders or Partnership Agreement." + + (2) That if Franchisee or a successor, is a corporation, the majority of the capital stock thereof shall not at any time or in the aggregate be sold, assigned, pledged, mortgaged or transferred without the prior written consent of Pretzel Time. + + (3) Franchisee represents and warrants that its Owners are as set forth on Exhibit B attached to this Agreement and covenants that it will not vary from that ownership structure without the prior written approval of Pretzel Time. + + 17.F. DEATH OR DISABILITY OF FRANCHISEE. + + Upon the death or Permanent Disability of Franchisee or, if Franchisee is a corporation or partnership, the Owner of a Controlling Interest in Franchisee, the executor, administrator, conservator, guardian or other personal representative of such person shall transfer Franchisee's interest in this Agreement or such interest in Franchisee to a third party approved by Pretzel Time. Such disposition of this Agreement or such interest in Franchisee (including, without limitation, transfer by bequest or inheritance) shall be completed within a reasonable time, not to exceed six (6) months from the date of death or Permanent Disability, and shall be subject to all the terms and conditions applicable to Transfers contained in Section 17.B. and 17.C. Failure to transfer the interest in this Agreement or such interest in Franchisee within said period of time shall constitute a breach of this Agreement. + + 17.G. PRETZEL TIME'S FIRST RIGHT OF REFUSAL. + + If Franchisee (or its Owners) shall at any time determine to sell, assign or transfer for consideration this Agreement or an Ownership Interest in Franchisee or the Unit, Franchisee (or its Owners) shall obtain a bona fide, executed written offer and earnest money deposit from a responsible and fully disclosed purchaser (including lists of the Owners of record and beneficially of any corporate offeror and all general and limited partners of any partnership offeror and, in the case of a publicly-held corporation or limited partnership, copies of the most current annual and quarterly reports) and shall immediately submit to Pretzel Time a true and complete copy of such offer, which shall include details of the payment terms of the proposed sale and the sources and terms of any financing for the proposed purchase price. To be a valid, bona fide offer, the proposed purchase price shall be denominated in a dollar amount. The offer must apply only to an interest in this Agreement, Franchisee or the Unit and may not include an offer to purchase any other property or rights of Franchisee (or its Owners). However, if the offeror proposes to buy any other property or rights from Franchisee (or its Owners) under a separate, contemporaneous offer, the price and terms of purchase offered to Franchisee (or its Owners) for the interest in this Agreement, Franchisee or the Unit shall reflect the bona fide price offered therefore and shall not reflect any value for any other property or rights. + + + + + + Pretzel Time shall have the right, exercisable by written notice delivered to Franchisee (or its Owners) within sixty (60) days from the date of delivery of an exact copy of such offer to Pretzel Time, to purchase such interest for the price and on the terms and conditions contained in such offer, provided that Pretzel Time may substitute cash for any form of payment proposed in such offer, Pretzel Time's credit shall be deemed equal to the credit of any proposed purchaser and Pretzel Time shall have not less than sixty (60) days to prepare for closing. Without regard to the representations and warranties demanded by the proposed purchaser, if any, Pretzel Time shall be entitled to purchase such interest subject to all customary representations and warranties given by the Franchisee, seller of the assets of a business or voting stock of an incorporated business, as applicable, including, without limitation, representations and warranties as to ownership, condition and title to stock, and /or assets, liens and encumbrances relating to the stock and/or assets, validity of contracts and liabilities of the corporation whose stock is purchased and affecting the assets, contingent or otherwise. + + If Pretzel Time exercises its right of first refusal, Franchisee (and its Owners) agrees that, for a period of twelve (12) months commencing on the date of the closing, neither Franchisee (nor its Owners) shall have any direct or indirect interest (through a member of the immediate families of Franchisee or its Owners of otherwise) as a disclosed or beneficial owner, investor, partner, director, officer, employee, consultant, representative, or agent or in any other capacity in any Competitive Business located or operating within three (3) miles of the Unit, and/or three (3) miles of any other Pretzel Time Unit. The restrictions of this Section shall not be applicable to the ownership of shares of a class of securities listed on a stock exchange or traded on the over-the-counter market that represent two percent (2%) or less of the number of shares of that class of securities issued and outstanding. If Pretzel Time exercises its right of first refusal, Franchisee (and its Owners) further agrees that he will abide by the restrictions of Section 17.C.(13). + + If Pretzel Time does not exercise its right of first refusal, Franchisee or its Owners may complete the sale to such purchaser pursuant to and on the exact terms of such offer, subject to Pretzel Time's approval of the Transfer as provided in Section 17, provided that if the sale to such purchaser is not completed within 120 days after delivery of such offer to Pretzel Time, or if there is a material change in the terms of the sale (which Franchisee shall promptly communicate to Pretzel Time), Pretzel Time's right to first refusal shall be extended for thirty (30) days after the expiration of such 120 day period or after the material change in the terms of the sale so communicated to Pretzel Time. + + 17.H. PUBLIC OR PRIVATE OFFERINGS. + + In the event Franchisee (or any of its Owners) shall, subject to the restrictions and conditions of Transfer contained in Section 17, attempt to raise or secure funds by the sale of securities (including, without limitation, common or preferred stock, bonds, debentures or general or limited partnership interests) in Franchisee or any affiliate of Franchisee, Franchisee, recognizing that the written information may reflect upon Pretzel Time, agrees to submit any such written information used with respect thereto prior to its inclusion in any registration statement, prospectus or similar offering circular or memorandum and to obtain Pretzel Time's written consent to the method of financing prior to any offering or sale of such securities. Pretzel Time's written consent pursuant to this Section shall not imply or constitute Pretzel Time's approval with respect to the sale of the securities, the offering literature submitted to Pretzel Time or any other aspect of the offering. No information respecting Pretzel Time shall be included in any disclosure document unless such information has been furnished by Pretzel Time in writing pursuant to Franchisee's written request, in which Franchisee states the specific purposes for which the information is to be used. Should Pretzel Time, in its sole discretion, object to any reference to it or its business or to the relationship of Franchisee or a controlled affiliate in such offering literature or prospectus, such literature or prospectus shall not be used unless and until Pretzel Time's objections are withdrawn. Pretzel Time assumes no responsibility whatsoever for any offering. Franchisee shall pay Pretzel Time's expenses in connection with the offering or proposed offering. + + The prospectus or other literature utilized in any such offering shall contain the following language in bold-face type on the first textual page thereof: + + PRETZEL TIME, INC. IS NOT DIRECTLY OR INDIRECTLY THE ISSUER OF THE SECURITIES OFFERED HEREBY AND ASSUMES NO RESPONSIBILITY WITH RESPECT TO THIS OFFERING AND/OR THE SUFFICIENCY OR ACCURACY OF THE INFORMATION SET FORTH HEREIN, INCLUDING ANY STATEMENTS WITH RESPECT TO PRETZEL TIME, INC. PRETZEL TIME, INC. DOES NOT ENDORSE OR MAKE ANY RECOMMENDATION WITH RESPECT TO THE INVESTMENT CONTEMPLATED BY THIS OFFERING. + + Franchisee (and each of its Owners) agrees to indemnify, defend and hold harmless Pretzel Time, its parent company, subsidiaries, and Affiliates and their officers, directors, employees and agents from any and all claims, demands and liabilities, and all costs and expenses (including, without limitation, reasonable attorneys' fees) incurred in defending against such claims, demands or liabilities, arising from the offer or sale of such securities, whether asserted by a purchaser of any such security or by a governmental agency. Pretzel Time shall have the right (but not the obligation) to defend any such claims, demands or liabilities and/or to participate in the defense of any action to which it is named as a party. + +18. TERMINATION OF AGREEMENT BY FRANCHISEE. + + + + + + 18.A. FRANCHISEE'S RIGHT TO TERMINATE. + + If Franchisee is in substantial compliance with this Agreement and Pretzel Time substantially breaches a material provision of this Agreement and (1) fails to cure such breach within thirty (30) days after written notice thereof is delivered to Pretzel Time or (2) if such breach cannot reasonably be cured within thirty (30) days after Pretzel Time's receipt of such notice, undertake (within thirty (30) days after Pretzel Time's receipt of such notice and continue until completion), reasonable efforts to cure such breach, Franchisee may terminate this Agreement. Such termination shall be effective ten (10) days after delivery to Pretzel Time of notice that such breach has not been cured and Franchisee elects to terminate this Agreement. A termination of this Agreement by Franchisee for any reason other than a substantial breach of a material provision of this Agreement by Pretzel Time, and Pretzel Time's failure to cure such breach as provided above shall be deemed a termination by Franchisee without cause. + +19. DEFAULT AND TERMINATION. + + 19.A. EXACT AND COMPLETE PERFORMANCE REQUIRED. + + Franchisee acknowledges that complete performance of all the terms of this Agreement is necessary for the protection of Pretzel Time and its franchisees. It is therefore agreed that complete and exact performance by the Franchisee of each of his promises contained herein is a condition to the continuance of this Franchise. + + 19.B. DEFAULT AND RIGHT TO CURE. + + If Franchisee defaults in the performance of any of the terms of this Agreement or the Operations Manual, Pretzel Time, in addition to all other remedies available to it at law or in equity and without prejudice to any other rights or remedies, may immediately terminate this Agreement by delivering a written notice to Franchisee of any breach of this Agreement and a notice period of forty-five (45) days shall be given to Franchisee, unless such default is cured by the Franchisee within thirty (30) days after written notice thereof from Pretzel Time to Franchisee. Notwithstanding the foregoing, if the default is other than a failure to pay a monetary obligation to Pretzel Time or to a related company and of a nature that more than thirty (30) days are reasonably required to cure, Franchisee shall commence to cure the default within said thirty (30) day period and shall proceed with such cure with due diligence with a view to accomplishing the cure at the earliest possible moment, and within the period, if any, designated by Pretzel Time as the allowable additional time within which the cure must be accomplished. + + 19.C. EXTENSION OF NOTICE. + + If any applicable law or rule requires a greater prior notice of termination, the prior notice required by such law or rule shall be substituted for the notice requirements herein. + + 19.D. REPEATED BREACHES. + + Further, notwithstanding anything herein elsewhere contained, if Franchisee shall repeatedly fail to comply with the terms of this Agreement, or any of them, of any nature, even though such failures may be cured within the applicable grace periods, Pretzel Time shall have the right by written notice given to Franchisee immediately to declare this Agreement terminated, which right shall be in addition to and without prejudice to any other right or remedy to which Pretzel Time may be entitled under this Agreement or otherwise under applicable law. As used in this Agreement the term "repeatedly fail" shall mean three (3) defaults within any twelve (12) month period, even if the defaults are later cured. 19.E. EVENTS OF DEFAULT - 30 DAYS NOTICE - CURABLE DEFAULTS. + + The occurrence of any one of the following events shall constitute a default under this Agreement requiring a 30 day notice period of termination by Pretzel Time to Franchisee: + + (i) Franchisee fails to pay money when due to Pretzel Time as required under the Franchise Agreement, including, without limitation, the franchise fee, the renewal fee, the transfer fee, royalties, and the advertising fund fee; or + + (ii) If Franchisee or his Unit Manager fails to satisfactorily complete any mandatory training programs (except the initial training in which case, the Franchise Agreement can be terminated upon notice) offered by Pretzel Time; or + + (iii) If Franchisee fails to submit to Pretzel Time financial or other information when required under this Agreement or submits a financial statement which materially understates net revenues; or + + (iv) If Franchisee fails to develop or construct the Unit in accordance with this Agreement; Pretzel Time's plans and specifications or fails to equip and furnish the location in accordance with Pretzel Time's plans and specifications; or + + (v) A final judgment against Franchisee remains unsatisfied of record for thirty (30) days, unless a supersedeas or other appeal bond has been filed; or + + (vi) Franchisee or any of its Owners abandons, surrenders or + + + + + + transfers control of the operation of the Unit without the prior written approval of Pretzel Time, or threatens to abandon the same; or + + (vii) Franchisee fails to use Pretzel Time approved marketing and promotional materials or Franchisee fails to receive Pretzel Time's prior approval of marketing and promotional materials; or + + (viii) Failure to obtain Pretzel Time's prior written consent or approval where expressly required by the Franchise Agreement; or + + (ix) If Franchisee operates the franchise in such a manner so as to affect materially and adversely the goodwill or reputation of Pretzel Time or its System or any product manufactured by any Affiliate; or + + (x) Franchisee denies Pretzel Time the right to inspect the Unit or to examine or audit his books; or + + (xi) Franchisee misuses Pretzel Time's Marks or asserts any interest in Pretzel Time's Marks; uses Pretzel Time's tradename or any part thereof as part to of its corporate name; does not cooperate in the enforcement of any Mark; or challenges or seeks to challenge the validity of the Marks; or + + (xii) Franchisee fails to maintain and operate the Unit in accordance with standards and specifications established by Pretzel Time as to the services or maintenance of inventory; or + + (xiii) Franchisee fails to obtain all permits, insurance, licenses and other necessary documents for the opening of the Unit; or + + (xiv) Franchisee fails to maintain uniform Unit design and image, and/or fails to refurbish or remodel as required by Pretzel Time; or + + (xv) Franchisee attempts or does mortgage, pledge or otherwise assign as security the premises, any equipment, furnishings, fixtures or any interest Franchisee may have; or + + (xvi) Conduct by Franchisee which is of such a nature that a reasonably objective person would consider same to be deleterious to or to reflect unfavorably on Pretzel Time or the Pretzel Time Unit System; or + + (xvii) Failure by Franchisee to maintain a responsible credit rating by failing to make prompt payment of undisputed bills, invoices and statements from suppliers or distributors of goods and services to the Unit; or + + (xviii) Failure to comply with all of the terms of the Operations Manual as amended from time to time, the standards and specifications required by Pretzel Time or any other agreement between the Franchisee and Pretzel Time; or + + (xix) Fails to pay any federal or state income, sales or other taxes due on the Unit's operations unless Franchisee is in good faith contesting his liability for such taxes; or + + (xx) Franchisee knowingly sells any product or service that does not conform to Pretzel Time's specifications, uses or sells products other + + than in strict accordance with the requirements of the Franchise Agreement or the Operations Manual; fails to sell products or services approved by Pretzel Time or deals with vendors and suppliers not approved by Pretzel Time. + + (xxi) Franchisee fails to pay any subcontractor, contractor or other person to whom money is due and that subcontractor, contractor or other person demands said money from Pretzel Time. + + (xxii) Franchisee is late in paying rent to the landlord more than 2 times in any twleve month period. + + 19.F. EVENTS OF DEFAULT - IMMEDIATE TERMINATION - NO RIGHT TO CURE. + + The following acts of default will result in termination of the Franchise effective immediately upon delivery and receipt of written notice of same to Franchisee and with no right to cure where the grounds for termination or cancellation are: + + (i) Franchisee or a Owner fails to complete all phases of the initial training program to Pretzel Time's satisfaction; or + + + + + + (ii) Franchisee fails to commence operation of the Unit within the time specified in this Agreement; or + + (iii) Any affirmative act of bankruptcy or insolvency by Franchisee, or the filing by Franchisee of any petition or action in bankruptcy or insolvency, or for appointment of a receiver or trustee, Franchisee admits in writing his inability to pay his debts or an assignment by Franchisee for the benefit of creditors, or the failure to vacate or dismiss within five (5) days after filing any such proceedings commenced against Franchisee by a third party. Franchisee expressly and knowingly waives any rights that he may have under the provisions of the Bankruptcy Rules and consents to the termination of this Agreement or any other relief which may be sought in a complaint filed by Pretzel Time to lift the provisions of the automatic stay of the Bankruptcy Rules. Additionally Franchisee agrees not to seek an injunction order from any court in any jurisdiction relating to insolvency, reorganization of arrangement proceedings which would have the effect of staying or enjoining this provision. THIS PROVISION MAY NOT BE ENFORCEABLE UNDER FEDERAL BANKRUPTCY LAW (11 U.S.C.A. Sec. 101 et seq.); or + + (iv) Failure to cure within seventy-two (72) hours after delivery of written notice of default under the Franchise Agreement which materially impairs the goodwill associated with Pretzel Time's trade names, trademarks, service marks, logo types or other commercial + + symbols or the use by Franchisee of any name, mark, system insignia or symbol not authorized by Pretzel Time; or + + (v) The conviction of Franchisee, or any if its principals if it is a partnership or corporation, of a crime related to the business conducted pursuant to the franchise which may tend to affect adversely the goodwill or reputation of Franchisee, Pretzel Time or its System or the products of Pretzel Time's Affiliates; or + + (vi) Abandonment of the Franchise. For purposes of this agreement "Abandonment" shall mean Franchisee's failure (other than with Pretzel Time's prior written approval) to keep the franchise open and operating for business during the minimum opening hours specified in this Agreement or Lease Agreement; or + + (vii) Franchisee ceases to occupy the premises. If the loss of possession in the result of governmental exercise of eminent domain, destruction of the site, or termination of lease (except by reason of Franchisee's fault), Franchisee may (with Pretzel Time's consent and subject to availability) relocate to other premises in a comparable location. Failure to relocate to other Pretzel Time-approved premises within the time specified in this Agreement after loss of possession due to eminent domain, destruction of premises or termination of lease without Franchisee's fault shall constitute an act of Default with no right to cure and immediate termination upon notice; or + + (viii) The existence of an imminent danger to public health or safety or fails or refuses to comply with standards relating to the cleanliness or sanitation of the Unit or violates any health, safety or sanitation, law ordinance or regulation and does not correct such noncompliance within forty-eight (48) hours after written notice thereof is delivered to Franchisee; or + + (ix) The loss of the right to occupy the premises from which the franchise is operated by either Franchisee or Pretzel Time; or + + (x) Material falsification of business records and reports required by Pretzel Time; or + + (xi) Franchisee (or any of its Owners) makes an assignment, surrenders or transfers control of the Unit's operation in violation of this Agreement; or + + (xii) Franchisee (or any of its Owners) has made any material misrepresentation or omission in the application for the Franchise or in materials submitted relating to a transfer; or + + (xiii) Franchisee, (or its Owners) or members of their immediate family violate the restrictions on the operation of Competitive Businesses during the term of this Agreement; or + + (xiv) Franchisee (or any of its Owners or employees) makes an unauthorized use or disclosure of or duplicates any copy of + + + + + + any Confidential Information or uses, duplicates or discloses any portion of the Operations Manual in violation of this Agreement; or + + (xv) Failure on two (2) or more separate occasions within any period of twelve (12) consecutive months or on three (3) occasions during the term of this Agreement to submit when due reports or other data, information or supporting records or to pay when due the Royalty and fees or other payments due to Pretzel Time or its Affiliates or otherwise fails to comply with this Agreement, whether or not such failures to comply with this Agreement, Advertising Fund Fee are corrected after notice thereof is delivered to Franchisee; or + + (xvi) Fails to cure a default under this Agreement within the time specified or provide proof acceptable to Pretzel Time of efforts which are reasonably calculated to correct such failure within a reasonable time, which shall in no event be more than sixty (60) days after such notice, if such failure cannot reasonably be corrected within twenty (20) days after written notice of such notice of default is delivered to Franchisee; or + + (xvii) Franchisee terminates this Agreement without cause; or + + (xviii) Franchisee understates the Unit's net revenues in any report or financial statement by an amount greater than two (2) percent; or + + (xix) Franchisee causes or permits to exist a default under the lease or sublease for the Site and fails to cure such default within the applicable cure period set forth in the lease or sublease; or + + (xx) Franchisee (or any of its Owners) fails on three (3) or more separate occasions within any period of twenty-four (24) consecutive months to comply with this Agreement whether or not such failures to comply are corrected after notice of default is given, or failure on two (2) or more separate occasions within any period of twelve (12) consecutive months to comply within the same requirement under this Agreement, whether or not such failures to comply are corrected after notice of default is given. + +20. RIGHTS AND OBLIGATIONS OF PRETZEL TIME AND FRANCHISEE UPON TERMINATION OR EXPIRATION OF THE FRANCHISE. + + 20.A. AMOUNTS OWED. + + Unless otherwise authorized by Pretzel Time in writing, in the event of expiration or termination of this Agreement for any reason, or upon the sale, transfer or assignment of the Franchise by Franchisee, all of Franchisee's rights hereunder shall terminate and Franchisee shall cease to operate the Franchise. Franchisee agrees to pay Pretzel Time within fifteen (15) days after the effective date of termination or expiration of this Agreement, or such later date that the amounts due to Pretzel Time are determined, such Royalty Fees, Advertising Fund Fees, amounts owed for purchases by Franchisee from Pretzel Time or its Affiliates, interest due on any of the foregoing and all other amounts owed to Pretzel Time or its Affiliates which are then unpaid. + + Expiration or termination of this Agreement for any reason shall not affect, modify, or discharge any note, account receivable, or debt, contingent or otherwise, existing or arising under this Agreement, or any prior agreement, contract, or dealing between Pretzel Time and Franchisee. + + 20.B. DISCONTINUANCE OF MARKS. + + Franchisee agrees to immediately discontinue all use of trade names, trademarks, logotypes, forms of advertising and other commercial symbols of Pretzel Time, and forms of advertising indicative of Pretzel Time and cancel all assumed name registrations. Franchisee further shall remove or cause to be removed all signs and structures indicative of a Pretzel Time Unit and shall alter the premises occupied by Franchisee so as to distinguish the same from its former appearance and from a Pretzel Time franchise. Further, Franchisee shall discontinue the use of any and all printed goods and materials using said trade names, trademarks, logos and other commercial symbols of Pretzel Time. If Franchisee refuses to comply with the terms of this Section 20 after Pretzel Time requests compliance, Pretzel Time shall have the right to enter upon Franchisee's premises without being deemed guilty of trespassing or any other offense, and make or cause to be made such changes at Franchisee's expense, which Franchisee agrees to pay upon demand. + + Franchisee agrees to not directly or indirectly at any time or in any manner (except with respect to other Pretzel Time Units owned by the Franchisee) identify himself or any business as a current or former Pretzel Time Unit, or as a franchisee, licensee or dealer of Pretzel Time or its Affiliates. Franchisee further agrees to not use any Mark, any colorable imitation thereof or other indicia of a Pretzel Time Unit in any manner or for any purpose or utilize for any purpose any trade name, trade or service mark or other commercial symbol that suggests or indicates a connection or association with Pretzel Time or its Affiliates. Franchisee (or any of its Owners) agrees after termination he will not do business under any name or in any manner that might tend to give the general public the impression that he is associated, affiliated, licensed, franchised by or related to Pretzel Time. The Franchisee (or any of its Owners) may not thereafter use any name, logo type, or symbol confusingly similar to + + + + + +Pretzel Time's Service Mark, logo type or symbol. If Franchisee continues operating a business at the franchised location it will exert every reasonable effort to inform the public of his new status, including a change of telephone number and advertising materials. + + The Franchise granted to Franchisee hereunder to sell Products bearing Pretzel Time's Marks does not include the right to sell or advertise for sale of Franchisee's Franchise itself or of its business location. No advertisement by Franchisee or other public solicitation for sale of his interest in this Agreement may include a representation of Pretzel Time's trademark or any reference to Pretzel Time or its trademark system. + + 20.C. RETURN OF MATERIALS. + + Franchisee agrees to return to Pretzel Time all signs, sign-faces, forms, invoices, letterhead, and other materials containing any Mark or otherwise identifying or relating to a Pretzel Time Unit and allow Pretzel Time, without liability to remove all such items from the Unit. Franchisee also agrees to return all materials and confidential information loaned to Franchisee, including, without limitation, all Operations Manuals and Training Manuals and videos. Franchisee agrees to return all materials and supplies identified by the Marks in full cases or packages to Pretzel Time for credit and dispose of all other materials and supplies, but not equipment, identified by the Marks within thirty (30) days after the effective date of termination or expiration of this Agreement. + + 20.D. TELEPHONE COMPANY. + + Franchisee agrees to notify the telephone company and all telephone directory publishers of the termination or expiration of Franchisee's right to use any telephone and telecopy numbers and any regular, classified or other telephone directory listings associated with any Mark and to authorize the transfer thereof to Pretzel Time or at its direction. Franchisee acknowledges and agrees that as between him and Pretzel Time, Pretzel Time has the sole rights to and interest in all telephone and telecopy numbers and directory listings associated with any Mark. Franchisee authorizes Pretzel Time, and hereby appoints Pretzel Time and any of its officers as Franchisee's attorney in fact, to direct the telephone company and all telephone directory publishers to transfer any telephone and telecopy numbers and directory listings relating to the Pretzel Time Units to Pretzel Time or at its direction, should Franchisee fail or refuse to do so, and the telephone company and all telephone directory publishers may accept such direction or this agreement as conclusive of Pretzel Time's exclusive rights in such telephone and telecopy numbers and directory listings and Pretzel Time's authority to direct their transfer. Franchisee agrees to execute a collateral assignment of telephone numbers and listings agreement which is attached hereto as Exhibit G. In no event shall Pretzel Time be responsible for any charges incurred by Franchisee and associated with the telephone company prior to the date of transfer. + + 20.E. CONFIDENTIAL INFORMATION. + + Franchisee (and its Owners) agrees that upon termination or expiration of this Agreement, he will immediately cease to use any Confidential Information of Pretzel Time or its Affiliates disclosed to him pursuant to this Agreement in any business or otherwise. This provision is also applicable to the Owners if the Franchise is a corporation or partnership. + + 20.F. LEASING. + + If Franchisee has leased the premises, Pretzel Time may, in its sole discretion and without any obligation to do so, assume the lease. Franchisee will not be entitled to any refund of the initial franchise fee, royalties, or Advertising Fund Fees. + + 20.G. COVENANT NOT TO COMPETE. + + Upon termination of this Agreement, in accordance with its terms and conditions or by Franchisee without cause, or upon expiration of this Agreement (unless the Franchise is renewed as provided for in this Agreement), Franchisee and its Owners agree that for a period of TWELVE (12) months commencing on the effective date of termination or expiration or the date on which Franchisee complies with this Section, whichever is later, neither Franchisee, nor its Owners, nor any person or entity affiliated with Franchisee or Franchisee's shareholders or partners shall have any direct or indirect interest (through a member of the immediate families of Franchisee or its Owners or otherwise) as a disclosed or beneficial owner, investor, partner, director, officer, employee, consultant, representative, agent or in any other capacity in any Competitive Business located or operating: (1) at the Site; (2) within three (3) miles of the Unit; and/or (3) within three (3) miles of any other Pretzel Time Unit in operation or under development on the effective date of termination or expiration of this agreement for a period of one year after the termination or expiration. The restrictions of this Section shall not be applicable to the ownership of shares of a class of securities listed on a stock exchange or traded on the over-the-counter market that represent two percent (2%) or less of the number of shares of that class of securities issued and outstanding. Franchisee and its Owners expressly acknowledge that they possess skills and abilities of a general nature and have other opportunities for exploiting such skills. Consequently, enforcement of the covenants made in this Section will not deprive the Franchisee or its Owners or shareholders of their personal goodwill or ability to earn a living. + +The Franchise Agreement contains a covenant not to compete which extends beyond + + + + + +the termination of the franchise. Franchisee and its Owners acknowledge that the covenant not to compete is fair and reasonable, and will not impose any undue hardship, since the Franchisee (and its Owners) has other considerable skills, experience and education which will afford him the opportunity to derive income from other endeavors. + +Neither Franchisee nor any of its Owners shall divert or attempt to divert any business or any customers of any Pretzel Time Unit to any Competitive Business or employ or seek to employ any person who is employed by Pretzel Time, its Affiliates or a franchisee of Pretzel Time nor induce or attempt to induce any such person to leave said employment without the prior written consent of such person's employer. + + 20.H. PRETZEL TIME'S RIGHT TO PURCHASE ASSETS OF THE UNIT. + + Upon termination of this Agreement by Pretzel Time in accordance with its terms and conditions or by Franchisee without cause or upon expiration of this Agreement (unless the franchise has been renewed), Pretzel Time, its Affiliates or its assignee shall have the option (not the obligation), exercisable by giving written notice thereof within sixty (60) days from the date of such expiration or termination, to acquire from Franchisee all the assets in the Unit including the equipment, furnishings, signs, leasehold improvements, usable inventory of Products, materials, supplies and other tangible assets of the Unit and an assignment of the lease for the Unit. Pretzel Time shall have the unrestricted right to assign this option to purchase. Pretzel Time or its assignee shall be entitled to all customary warranties and representations in connection with its asset purchase, including, without limitation, representations and warranties as to ownership, condition of and title to assets, no liens and encumbrances on the assets, validity of contracts and agreements and liabilities inuring to Pretzel Time or affecting the assets, contingent or otherwise. + + (1) The purchase price for the assets of the Unit shall be equal to the greater of: + + The sum of the book value of the Unit's assets (including furnishings, fixtures, equipment, and leasehold improvements) amortized on a straight-line basis over a five (5) year period plus the lesser of costs and the then-current wholesale market value of all usable inventory of Products, materials and supplies (i.e. in good and saleable condition and not obsolete or discontinued), or + + The product of the Unit's average cash flow for the two (2) most recently completed fiscal years multiplied by two (2). "Cash flow" represents the Unit's net revenues less all pretzel unit-related costs (i.e., cost of goods sold, labor, occupancy and other Unit expenses) as well as annual administrative costs of ten thousand dollars ($10,000.00) and royalty and service fees, but not including interest and depreciation. + + (2) Pretzel Time and its Affiliates shall have the right to set off against and reduce the purchase price by any and all amounts owed by Franchisee to Pretzel Time and its Affiliates. Pretzel Time may exclude from the assets purchased hereunder any equipment, furnishings, signs, usable inventory of Products, materials or supplies of the Unit that Pretzel Time has not approved as meeting its standards for Pretzel Time Unit, and the purchase price shall be reduced by the replacement costs of such excluded items which are required in the operation of the Unit. + + (3) The purchase price shall be paid in cash at the closing of the purchase, which shall take place no later than ninety (90) days after receipt by Franchisee of Pretzel Time's notice of exercise of this option to purchase the Unit, at which time Franchisee shall deliver instruments transferring to Pretzel Time or its assignee good and merchantable title to the assets purchased, free and clear of all liens and encumbrances with all sales and other transfer taxes paid by Franchisee, and all licenses or permits of the Unit which may be assigned or transferred. In the event the closing of the purchase does not occur within said ninety (90) day period because Franchisee fails to act diligently in connection therewith, the purchase price shall be reduced by ten percent (10%). Franchisee further agrees that the purchase price shall be further reduced by ten percent (10%) per month for each subsequent month Franchisee fails to act diligently to consummate this transaction. In the event that Franchisee cannot deliver clear title to all of the purchased assets as aforesaid, or in the event there are other unresolved issues, at Pretzel Time's option, the losing of the sale shall be accomplished through an escrow. Prior to closing, Franchisee and Pretzel Time shall comply with the applicable Bulk Sales provisions of the Uniform Commercial Code as enacted in the state in which the Unit is located. + + (4) If Pretzel Time or its assignee exercises this option to purchase, pending the closing of such purchase, Pretzel Time may appoint a manager to maintain the operation of the Unit, at its option, require Franchisee to close the Unit during such time period without removing any assets. If Pretzel Time appoints a manager to maintain the operation of the Unit pending closing of such purchase, all funds from the Unit's operation during the period of management by a Pretzel Time appointed manager shall be kept in a separate fund and all expenses of the Unit, including compensation, other costs and travel and living expenses of the Pretzel Time appointed manager, shall be charged to such fund. As compensation for the management services provided, Pretzel Time shall charge such fund ten percent (10%) of the Unit's net revenues during the period of Pretzel Time's management. Operation of the Unit during any such period shall be for and on behalf of Franchisee, provided that Pretzel Time shall have a duty only to utilize its good faith efforts and shall not be liable to Franchisee or + + + + + +its Owners for any debts, losses or obligations incurred by the Unit or to any creditor of Franchisee for any merchandise materials, supplies or service purchased by the Unit during any period in which it is managed by Pretzel Time's appointed manager. Franchisee shall maintain in force all insurance policies required for the Unit until the date of closing. + +21. RELATIONSHIP OF THE PARTIES/INDEMNIFICATION. + + 21.A. EXCLUSIVE RELATIONSHIP. + + Franchisee acknowledges and agrees that Pretzel Time would be unable to protect Confidential Information against unauthorized use or disclosure and would be unable to encourage a free exchange of ideas and information among Pretzel Time Units if Franchisees of Pretzel Time Units were permitted to hold interests in or perform services for a Competitive Business except as specified in Exhibit C. Franchisee also acknowledges that Pretzel Time has granted the Franchise to Franchisee in consideration of and reliance upon Franchisee's agreement to deal exclusively with Pretzel Time. Franchisee therefore agrees that during the term of the Franchise Agreement, or the period of time which Franchisee operates a Unit under this Agreement, whichever is shorter, neither Franchisee nor any Affiliate, immediate family member, or in the event Franchisee is a corporation + +any Owner thereof and member of his immediate family or in the event Franchise is a partnership any partner (general or limited) thereof and any member of his immediate family, shall: + + (1) Have any direct or indirect interest as an owner, investor, partner, director, officer, employee, consultant, representative, agent or in any other capacity in any Competitive Business located or operating at the Site or within three (3) miles of any Pretzel Time Unit in operation or under development on the effective date of termination or expiration of this Agreement, except a Pretzel Time Unit operated by Franchisee under Franchise Agreements with Pretzel Time; or + + (2) Recruit or hire any employee who, within the immediately preceding six (6) month period, was employed by Pretzel Time or any Pretzel Time Unit operated by Pretzel Time, its Affiliates or another franchisee or licensee of Pretzel Time, without obtaining the prior written permission of Pretzel Time or such franchisee. + + Notwithstanding the foregoing, Franchisee shall not be prohibited from owning securities listed on a stock exchange or traded on the over-the-counter market that represents two percent (2%) or less of that class of securities. + + Covenants contained in this Section shall be construed as severable and independent, and shall be interpreted and applied consistent with the requirements of reasonableness. Any judicial reformation of these covenants consistent with this interpretation shall be enforceable as though contained herein and shall not affect any other provisions or terms of this Agreement. This non-compete provision may not be enforceable under the laws of your state. + + 21.B. NO LIABILITY FOR ACTS OF OTHER PARTY. + + Franchisee shall not employ any of the Marks in signing any contract or applying for any franchise or permit or in a manner that may result in Pretzel Time's liability for any of Franchisee's indebtedness or obligations, nor may Franchisee use the Marks in any way not expressly authorized by Pretzel Time. Except as expressly authorized in writing, neither Pretzel Time nor Franchisee shall make any express or implied agreements, warranties, guarantees or representations or incur any debt in the name or on behalf of the other, represent that their relationship is other than Pretzel Time and franchisee, or be obligated by or have any liability under any agreements or representations made by the other that are not expressly authorized in writing. Pretzel Time shall not be obligated for any damages to any person or property directly or indirectly arising out of the operation of the Unit or Franchisee's business authorized by or conducted pursuant to this Agreement. + + 21.C. TAXES. + + Pretzel Time shall have no liability for any sales, use, service, occupation, excise, gross receipts, income, property or other taxes, whether levied upon Franchisee, the Unit, Franchisee's property or upon Pretzel Time, in connection with the sales made or business conducted by Franchisee. Payment of all such taxes shall be Franchisee's responsibility. + + 21.D. INDEMNIFICATION. + + Franchisee agrees to indemnify and hold Pretzel Time and its subsidiaries, Affiliates, stockholders, directors, officers, employees, agents and assignees harmless against, and to reimburse them for, any loss, liability, judgment or damages (actual or consequential) and all reasonable costs and expenses of defending any claim brought against any of them or any action in which any of them is named as a party (including, without limitation, reasonable accountants, attorneys' and expert witness fees, costs of investigation, court costs, other litigation expenses, damages to Pretzel Time's reputation and good will, travel expenses) which any of them may suffer, sustain or incur by reason of, arising from or in connection with Franchisee's ownership or operation of the Unit, unless such loss, liability or damage is only due to the negligence of Pretzel Time (or its Affiliates, subsidiaries). Pretzel Time's right to indemnity under this agreement shall arise notwithstanding that joint or concurrent liability may be imposed on Pretzel Time by statute, ordinance, regulation or other law. Franchisee acknowledges and agrees that any action or inaction by any third party which is not an Affiliate of Pretzel Time shall not + + + + + +be attributable to or constitute negligence of Pretzel Time. The indemnities and assumptions of liabilities and obligations herein shall continue in full force and effect subsequent to and notwithstanding the expiration or termination of this Agreement. + + Pretzel Time shall notify Franchisee of any claims and Franchisee shall be given the opportunity to assume the defense of the matter. If Franchisee fails to assume the defense within three (3) days of notice thereof, Pretzel Time may defend the action in the manner reasonably appropriate, and Franchisee shall pay to Pretzel Time all reasonable costs, including without limitation attorney's fees, court costs, expert witness fees, travel and telephone expenses, incurred by Pretzel Time in effecting such defense, in addition to any such sum which Pretzel Time may pay by reason of any settlement agreed to by the parties or reasonably negotiated by Pretzel Time in the event Franchisee fails to assume the defense, or judgment against Pretzel Time. + + 21.E. INDEPENDENT CONTRACTOR. + + It is understood and agreed by the parties hereto that Franchisee is an independent contractor and is not an agent, partner, joint venturer, or employee of Pretzel Time. Pretzel Time and Franchisee agree that nothing in this Agreement is intended to create a fiduciary relationship between them. Franchisee shall have no right to bind or obligate Pretzel Time in any way nor shall he represent that he has any right to do so. Pretzel Time shall have no control over the terms and conditions of employment of Franchisee's employees. + + In all public records and in his relationship with other persons, on stationery, business forms and checks, Franchisee shall indicate his independent ownership of the franchised Unit and that he is a franchisee of Pretzel Time. Franchisee shall exhibit on the premises in such places as may be designated by Pretzel Time, a Pretzel Time approved notice that the franchised Unit is operated by an independent operator and not by Pretzel Time or Pretzel Time's Affiliates, which operate company owned franchises. Franchisee shall take all legal steps such as a fictitious name registration to ensure Franchisee's independent business status. + +22. PROTECTION OF TRADE SECRETS. + + 22.A. CONFIDENTIAL INFORMATION. + + Pretzel Time possesses and will further develop and acquire certain confidential and proprietary information and trade secrets relating to the operation of Pretzel Time Units, which includes, but not limited to the following categories of information, methods, techniques, procedures, and knowledge developed or to be developed by Pretzel Time, its consultants or contractors, its Affiliates or its designees, and/or franchisees ("Confidential Information"): + + (1) methods, techniques, equipment, specifications, standards, policies, procedures, information, concepts and systems relating to and knowledge of and experience in the development, operation and franchising of Pretzel Time Units: + + (2) site selection criteria; + + (3) marketing and promotional programs for Pretzel Time Units; + + (4) recipes, ingredients, formulas, mixes, spices, seasonings, sauces, recipes for, and methods for the preparation, cooking, and serving of the Products; + + (5) techniques, formats, specifications, systems, procedures, and knowledge of and experience in the development and operation of Pretzel Time Units; + + (6) knowledge of specifications for and suppliers of certain Products, materials, supplies, equipment, furnishings and fixtures; + + (7) sales data and information concerning inventory requirements for Products, materials and supplies, and specifications for and knowledge of suppliers of certain materials, equipment, and fixtures for Pretzel Time Units; + + (8) employee selection procedures, training and staffing levels; + + (9) Operations Manual and other Manuals prepared by Pretzel Time; and + + (10) information concerning Product sales, operating results, financial performance and other financial data of Pretzel Time Units. + + Pretzel Time will disclose such parts of the Confidential Information as Pretzel Time deems necessary or advisable from time to time in its sole discretion for the operation of a Pretzel Time Unit to Franchisee during training, and in guidance and assistance furnished to Franchisee during the term of the Franchise, and Franchisee may learn or otherwise obtain from Pretzel Time additional Confidential Information of Pretzel Time during the term of the Franchise. Franchisee acknowledges that the foregoing Confidential Information is highly confidential. Franchisee acknowledges and agrees that he will not acquire any interest in Confidential Information, other than the right to utilize Confidential Information disclosed to Franchisee in the operation of the Pretzel Time Unit during the term of this Agreement, and that the use or duplication of any Confidential Information in any other business would constitute an unfair method of competition. Franchisee, including its directors, + + + + + +officers, shareholders, and partners agree(s) that Confidential Information is proprietary, includes trade secrets of Pretzel Time and is disclosed to Franchisee solely on the condition that Franchisee agrees, and Franchisee (and its Owners) does hereby agree, that he: + + (1) shall not disclose any information pertaining to the Pretzel Time System, directly or indirectly, to any person, natural or corporate, without the express prior written consent of Pretzel Time. Franchisee may disclose to its Unit Manager such information deemed necessary to disclose, provided such Unit Manager has agreed to maintain such information in confidence in Pretzel Time's confidentiality agreement and Pretzel Time has received such executed agreement (attached hereto as Exhibit H); + + (2) Will not use Confidential Information in any other business or capacity; + + (3) Will maintain the absolute confidentiality of Confidential Information during and after the term of this Agreement; + + (4) Will not make unauthorized copies of any portion of Confidential Information disclosed in written or other tangible form; and + + (5) Will adopt and implement all reasonable procedures that Pretzel Time prescribes from time to time to prevent unauthorized use or disclosure of Confidential Information, including, without limitation, restrictions on disclosure thereof to his employees. + + This confidentiality requirement shall not apply in a judicial or administrative proceeding to the extent Franchisee is legally compelled to disclose such information, provided Franchisee shall have used his best efforts and shall have afforded Pretzel Time the opportunity to obtain an appropriate protective order or other assurance satisfactory to Pretzel Time of confidential treatment for the information required to be so disclosed. This restrictions on Franchisee's disclosure and use of the Confidential Information shall also not apply to the disclosure of information, methods, procedures, techniques and knowledge which are or become generally known in the food service business in the Territory, other than through disclosure (whether deliberate or inadvertent) by Franchisee. + + Notwithstanding the foregoing and any other provision of this Agreement, Franchisee may use the Confidential Information in connection with the operation of other Pretzel Time Units (in addition to the Unit) pursuant to other Franchise Agreements with Pretzel Time. + + 22.B. DISCLOSURE OF IDEAS AND NEW PROCEDURES. + + Franchisee shall fully and promptly disclose to Pretzel Time, all ideas, concepts, methods and techniques relating to the development and operation of a dessert or snack food business conceived or developed by the Franchisee and/or Franchisee's employees during the term of this Agreement. Franchisee agrees and grants to Pretzel Time and its Affiliates a perpetual and worldwide right to use and authorize other Pretzel Time Units or other food service businesses operated by Pretzel Time or its Affiliates, franchisees and designees to use such ideas, recipes, formulas, concepts, methods, and techniques relating to the development and/or operation of a dessert or snack food business. If incorporated into the Pretzel Time System for the development and/or operation of Pretzel Time Units, such ideas, recipes, formulas, concepts, methods and techniques shall become the sole and exclusive property of Pretzel Time without any further consideration to Franchisee. Pretzel Time shall have no obligation to make any lump sum or on-going payments to Franchisee with respect to any such idea, concept, method, technique or product. Franchisee agrees that Franchisee will not use nor will it allow any other person or entity to use any such concept, method, technique or product without obtaining Pretzel Time's prior written approval. + +23. ENFORCEMENT. + + 23.A. UNAVOIDABLE DELAYS. + + Delays in the performance of any duties hereunder which are not the fault of, and not within the reasonable preventive control of, the party due to perform, including but not limited to, fire, flood, labor disputes, natural disasters, acts of God, civil disorders, riots, insurrections, work stoppages, slowdowns or disputes, or other similar events, shall not cause a default in said performance, but the parties shall extend the time of performance for a period of time equivalent to the length of delay, or for such other reasonable period of time as agreed by the parties. + + 23.B. RIGHTS OF PARTIES ARE CUMULATIVE. + + The rights of Pretzel Time and Franchisee hereunder are cumulative and no exercise or enforcement by Pretzel Time or Franchisee of any right or remedy hereunder shall preclude the exercise or enforcement by Pretzel Time or Franchisee of any other right or remedy herein or which Pretzel Time or Franchisee is entitled by law to enforce. + + 23.C. WAIVER OF OBLIGATIONS. + + Pretzel Time may by written instrument unilaterally waive or reduce any obligation of or restriction upon Franchisee under this Agreement, and Franchisee may by written instrument unilaterally waive or reduce any obligation of or restriction upon Pretzel Time under this Agreement, effective upon delivery of written notice thereof to the other or such other effective date stated on the notice of waiver. Whenever this Agreement requires Pretzel Time's + + + + + +prior approval or consent, Franchisee shall make a timely written request therefore, and such approval shall be obtained in writing. Pretzel Time makes no warranties or guaranties upon which Franchisee may rely, and assumes no liability or obligation to Franchisee, by granting any waiver, approval or consent to Franchisee, or by reason of any neglect, delay, or denial of any request therefore. Any waiver granted by Pretzel Time shall be without prejudice to any other rights Pretzel Time may have, will be subject + +to continuing review by Pretzel Time, and may be revoked, in Pretzel Time's sole discretion, at any time and for any reason, effective upon delivery to Franchisee of ten (10) days' prior written notice. + + 23.D. CONTINUING OBLIGATIONS. + + All obligations of Pretzel Time and Franchisee which expressly or by their very nature survive the expiration or termination of this Agreement shall continue in full force and effect subsequent to and notwithstanding its expiration or termination and until they are satisfied or by their nature expire. + + 23.E. INVALID OR UNENFORCEABLE PROVISIONS. + + If any provisions of this Agreement, or its application to any person or circumstance, is deemed invalid or unenforceable by a court of competent jurisdiction, then the remainder of this Agreement or the application of such provision to other persons or circumstances shall not be affected thereby, provided, however, that if any provision or application thereof is invalid or unenforceable, the court shall substitute a suitable and equitable provision therefore in order to carry out, so far as may be valid and enforceable, the intent and purpose of the invalid or unenforceable provision. + + If any applicable and binding law or rule of any jurisdiction requires a greater prior notice of the termination of or refusal to enter into a successor Franchise Agreement to this Agreement than is required hereunder, or the taking of some other action not required hereunder, or if, under any applicable and binding law or rule of any jurisdiction, any provision of this Agreement or any standard or procedure outlined in the Operations Manual is invalid or unenforceable, the prior notice and/or other action required by such law or rule shall be substituted for the comparable provisions hereof, and Pretzel Time shall have the right, in its sole discretion, to modify such invalid or unenforceable operations procedure or standard to the extent required to be valid and enforceable. + + 23.F. INJUNCTIVE RELIEF. + + Franchisee recognizes and acknowledges the unique value and secondary meaning attached to the Pretzel Time system, its trademarks, service marks, standards of operation and Pretzel Time's property. Franchisee acknowledges and agrees that any noncompliance with the restrictive covenants contained herein, including without limitation those provisions pertaining to noncompetition, confidentiality and the improper or unauthorized use of Pretzel Time's Marks will cause irreparable damage to Pretzel Time and its franchisees. Franchisee therefore agrees that should it violate any restrictive covenant, or threaten to breach the restrictive covenants, then Pretzel Time shall be entitled to both permanent and temporary injunctive relief, without bond, from any court of competent jurisdiction in addition to any other remedies to which Pretzel Time may be entitled, at law or in equity, under this agreement or otherwise under applicable law. + + 23.G. APPLICABLE LAW. + + Except to the extent governed by the U.S. Trademark Act of 1946 (Lanham Act, 15 U.S.C. "1051 et seq.), this Agreement, the other agreements referred herein, and the offer and the sale of the franchise shall be governed in all respects and aspects by the laws of the Commonwealth of Pennsylvania and expressly excluding the laws pertaining to the choice of law and conflict of laws. + + 23.H. ENTIRE STATUS OF AGREEMENT. + + This Agreement contains the entire agreement of the parties and there are no other oral or written understandings or agreements between Pretzel Time and Franchisee relating to the subject matter of this agreement, except as set forth in Pretzel Time's Offering Circular required by Rule under the Federal Trade Commission Act, a copy of which has been provided to Franchisee and of which Franchisee acknowledges receipt, there are no representations, inducements, promises, agreements arrangements or undertakings, oral or written, between the parties hereto other than those set forth and duly executed in writing. No agreement of any kind shall be binding upon either party unless and until the same has been made in writing and duly executed by both parties. + + Upon acceptance of this Agreement by Pretzel Time, all previous agreements, contracts, arrangements or understandings of any kind, oral or written, relative to the franchise granted herein are cancelled, and all claims and demands thereon are fully satisfied. This agreement, although drawn by Pretzel Time, shall be construed fairly and reasonable, and not more strictly against one party than against the other party hereto. + + 23.I. AMENDMENT OF AGREEMENT. + + This Agreement shall not be modified or amended except by written + + + + + +agreement executed by both parties hereto. No oral amendment or waiver will be effective and that this provision cannot be orally amended or waived. No waiver of default or rights will be effective unless in writing. + + 23.J. HEIRS, SUCCESSORS AND ASSIGNS. + + Subject to the provisions hereof relating to transfer and assignment, this Agreement is intended to and does bind the heirs, executors, administrators and successors of any or all of the parties hereto. + + 23.K. CONDITIONS AND CONTINGENCIES. + + The obligations of the parties hereunder are expressly conditional and contingent upon the full execution of and performance of all obligations by the parties under this Agreement. This Agreement is expressly conditional upon Franchisee executing all documents required by this Agreement within ten (10) days of receipt of the document. Failure by Franchisee to execute any documents shall result in the Agreement being null and void. + + In addition during Franchisee's training, all documents pertaining to the franchising of Franchisee as a Pretzel Time Unit shall be held in escrow by Pretzel Time. Title in and to the Pretzel Time Unit shall not pass to Franchisee until Franchisee has been trained as a Pretzel Time franchisee to the satisfaction of Pretzel Time. If Franchisee fails to satisfactorily complete Pretzel Time initial training, the appointment of Franchisee as a Pretzel Time franchisee and the granting of the franchise business to Franchisee shall be null and void, all documents executed between Franchisee and Pretzel Time or its designees with respect to the transaction shall be terminated and cancelled. The Franchisee acknowledges and agrees that no portion of the Franchise fee shall be refunded if Franchisee fails to complete Pretzel Time's initial training class to the satisfaction of Pretzel Time. If the Franchisee completes the initial training to the satisfaction of Pretzel Time, Pretzel Time will provide to Franchisee fully signed copies of the Franchise Agreement. + + It is understood and agreed by the parties that the granting of the franchise and all contracts and agreements entered into by and between the parties with respect to the Unit are specifically contingent upon the signing of a lease for the Site. In the event that a lease for the Site cannot be obtained on or before sixty (60) days after delivery of Pretzel Time's approval of the Site at no fault or delay by Franchisee, then all contracts and agreements entered into by Pretzel Time, and Franchisee shall become null and void and of no effect, and all monies deposited by Franchisee less a nonrefundable fee of $2,500 shall be refunded. + + 23.L. WAIVER BY PRETZEL TIME. + + No waiver by Pretzel Time of any default or failure to perform by Franchisee, or of any breach of the terms of this Agreement or no failure, refusal or neglect of Pretzel Time to exercise any right, option or power given it under this Agreement, shall preclude Pretzel Time from thereafter requiring strict compliance or from declaring this Agreement and the franchise granted herein revoke or terminated. The failure of Pretzel Time to terminate this Agreement upon the occurrence of one or more Acts of Default will not constitute a waiver or otherwise affect the right of Pretzel Time to terminate this Franchise because of a continuing or subsequent failure to cure one or more of the aforesaid events of default or any other default. + + 23.M. COSTS AND EXPENSES OF ENFORCEMENT. + + If a claim for amounts owed by Franchisee to Pretzel Time or its Affiliates is asserted in any judicial or arbitration proceeding or later appeal, or if Pretzel Time is required to enforce the Franchise Agreement in a judicial or arbitration proceeding or later appeal, the prevailing party will be entitled to reimbursement of its costs and expenses, including reasonable arbitrators', accountants' and legal fees, whether incurred prior to, in preparation for or in contemplation of the filing of any written demand, claim, action, hearing or proceeding to enforce the obligations of the Franchise Agreement. If Pretzel Time incurs expenses in connection with your failure to pay when due amounts owing to Pretzel Time, to submit when due any reports, information or supporting records or otherwise to comply with the Franchise Agreement, including, but not limited to legal, arbitrators' and accounting fees, you are required to reimburse Pretzel Time for any such costs and expenses which it incurs. 23.N. RIGHTS OF PARTIES ARE CUMULATIVE + + THE RIGHTS OF FRANCHISEE AND PRETZEL TIME ARE CUMULATIVE AND NO EXERCISE OR ENFORCEMENT BY PRETZEL TIME OR FRANCHISEE OF ANY RIGHT OR REMEDY HEREUNDER SHALL PRECLUDE THE EXERCISE OR ENFORCEMENT BY PRETZEL TIME OR FRANCHISEE OF ANY OTHER RIGHT OR REMEDY TO WHICH THE PARTY IS ENTITLED. + + 23.O. WAIVER OF JURY TRIAL. + + BOTH PRETZEL TIME AND THE FRANCHISEE IRREVOCABLY WAIVES TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM, WHETHER AT LAW OR IN EQUITY, BROUGHT BY EITHER PARTY. THE PARTIES FURTHER AGREE THAT NEITHER SHALL DEMAND A JURY TRIAL IN THE EVENT OF LITIGATION. + + 23.P. WAIVER OF PUNITIVE DAMAGES. + + EXCEPT WITH RESPECT TO FRANCHISEE'S OBLIGATION TO INDEMNIFY PRETZEL TIME, THE PARTIES WAIVE TO THE FULLEST EXTENT PERMITTED BY LAW ANY RIGHT TO OR CLAIM FOR ANY PUNITIVE OR EXEMPLARY DAMAGES AGAINST THE OTHER AND AGREE THAT, IN THE EVENT OF A DISPUTE BETWEEN THEM, THE PARTY MAKING A CLAIM SHALL BE LIMITED TO RECOVERY OF ANY ACTUAL DAMAGES IT SUSTAINS. + + + + + + 23.Q. EXCLUSIVE JURISDICTION. + + BOTH PRETZEL TIME AND FRANCHISEE AGREE THAT ANY ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT, INCLUDING WITHOUT LIMITATION, THE OFFER AND GRANTING OF THE FRANCHISE RIGHTS HEREUNDER SHALL BE INSTITUTED AND MAINTAINED ONLY IN A STATE OR FEDERAL COURT OF GENERAL JURISDICTION IN DAUPHIN COUNTY, PENNSYLVANIA OR THE COUNTY IN WHICH PRETZEL TIME MAINTAINS ITS PRINCIPAL PLACE OF BUSINESS. + + FRANCHISEE IRREVOCABLY SUBMITS TO THE JURISDICTION OF SAID COURT AND WAIVES ANY OBJECTION FRANCHISEE MAY HAVE TO EITHER THE JURISDICTION OR VENUE OF SUCH COURT. + + 23.R. LIMITATIONS OF CLAIMS + + EXCEPT FOR CLAIMS BROUGHT BY PRETZEL TIME WITH REGARD TO FRANCHISEE'S OBLIGATIONS TO MAKE PAYMENTS TO PRETZEL TIME PURSUANT TO THIS AGREEMENT OR TO INDEMNIFY PRETZEL TIME PURSUANT TO THIS AGREEMENT, ANY AND ALL CLAIMS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE RELATIONSHIP OF FRANCHISEE AND PRETZEL TIME PURSUANT TO THIS AGREEMENT SHALL BE BARRED UNLESS AN ACTION IS COMMENCED WITHIN: (1) TWO (2) YEARS FROM THE DATE ON WHICH THE ACT OR EVENT GIVING RISE TO THE CLAIM OCCURRED OR (2) ONE (1) YEAR FROM THE DATE ON WHICH FRANCHISEE OR PRETZEL TIME KNEW OR SHOULD HAVE KNOWN, IN THE EXERCISE OF REASONABLE DILIGENCE OF THE FACTS GIVEN RISE TO SUCH CLAIMS, WHICHEVER OCCURS FIRST. + +24. ACKNOWLEDGMENTS AND REPRESENTATIONS. + + Franchisee acknowledges that he has read this Agreement and that he understands and accepts the terms, conditions and covenants contained in this Agreement as being reasonably necessary to maintain Pretzel Time's high quality and service and the uniformity of those standards at all Pretzel Time Units and thereby to protect and preserve the goodwill of the Marks. + + Pretzel Time disclaims and Franchisee acknowledges that he has not received or relied upon any representations, promises, guarantees or warranties, expressed or implied, made to induce the execution hereof or in connection herewith which is not expressly contained herein or in the disclosure statement. More specifically, Franchisee acknowledges and agrees that no person acting on behalf of Pretzel Time or its affiliated companies has made any written or oral claim, statement, assurance, promise or projection of any sort regarding the actual or prospective sales, earnings, gross profit or net profit of the franchise, which is the subject of this agreement. Franchisee acknowledges and agrees that Pretzel Time's officers, directors, employees and agents act only in a representative and not in a personal capacity in connection with any of their dealings with Franchisee. Franchisee recognizes that neither Pretzel Time nor any other person can guarantee Franchisee's success in the franchised business. Franchisee further represents to Pretzel Time, as an inducement to its entry into this Agreement, that all statements in Franchisee's application for the Franchise are accurate and complete and that Franchisee has made no misrepresentations or material omissions in obtaining the franchise. + +25. CONSTRUCTION. + + 25.A. HEADINGS. + + The Section headings throughout this Agreement are for the convenience and reference only of the parties and their attorneys, and the words contained therein shall not be held to expand, modify, limit, define, amplify or aid in the interpretation, construction or meaning of this Agreement. + + 25.B. TERMINOLOGY. + + All terms and words used in this Agreement, regardless of the number and gender in which they are used, shall be deemed and construed to include any other number, singular or plural, and any other gender, masculine, feminine, or neuter, as the context or sense of this Agreement or any Section or clause herein may require, as if such word had been fully and properly written in the appropriate number and gender. The term Franchisee as used herein is applicable to one or more persons, a corporation or a partnership, as the case may be. If two or more persons are at any time Franchisee hereunder, their obligations and liabilities to Pretzel Time shall be joint and several. References to Franchisee and assignee which are applicable to an individual or individuals shall mean the Owners of Franchisee or the assignee, if the Franchisee or the assignee is a corporation nor partnership. + + 25.C. COUNTERPARTS. + + This Agreement may be executed in one or more counterparts, any and all of which shall constitute one and the same instrument. + + 25.D. REASONABLENESS. + + Pretzel Time and Franchisee agree to act reasonably in all dealings with each other pursuant to this Agreement. Whenever the consent or approval of either party is required or contemplated, the party whose consent is required agrees not to unreasonably withhold the same, unless such consent is expressly subject to such party's sole discretion pursuant to the terms of this Agreement. In no event shall Pretzel Time's withholding of consent allow Franchisee a claim for money damages. + +26. SECURITY AGREEMENT. + + + + + + 26.A. SECURITY INTEREST. + + In order to secure full and prompt payment of the fees and other charges to be paid by Franchisee to Pretzel Time, and to secure performance of the other obligations and covenants to be performed by Franchisee, under this Agreement, Franchisee hereby grants Pretzel Time a valid and effectual security interest in, lien upon, and right of set off against all of Franchisee's interest in the improvements, fixtures, inventory, goods, appliances and equipment now or hereafter owned and located at the Unit (whether annexed to the Premises or not) or used in connection with the business conducted at the Unit, including, without in any manner limiting the generality of the foregoing, all machinery, materials, appliances and fixtures for generating or distributing air, water, heat, electricity, light, fuel or refrigeration, for ventilating, cooling or sanitary purposes, for the exclusion of vermin or insects and for the removal of dust, refuse or garbage; all engines, machinery, ovens, refrigerators, freezers, furnaces, partitions, doors, vaults, sprinkling systems, light fixtures, fire hoses, fire brackets, fire boxes, alarm systems, brackets, screens, floor tile, linoleum, carpets, plumbing, water systems, appliances, walk-in refrigerator boxes, cabinets, dishwashers, stoves, set-up tables, rolling counters, kitchen ranges, display counters and shelves, humidified cabinets, computers and computer software, and other equipment and installations; all other and further installations and appliances; all raw materials, work in process, finished goods and all inventory; and all replacements thereof, attachments, additions and accessions thereto, and products and proceeds thereof in any form, including but not limited to insurance proceeds and any claims against third parties for loss or damage to or destruction of any or all of the foregoing (collectively, the "Collateral"). Without the prior written consent of Pretzel Time, Franchisee agrees that no lien upon or security interest in the Collateral or any item thereof will be created or suffered to be created and that no lease will be entered into with respect to any item of Collateral. Franchisee will not sell or otherwise dispose of any item of Collateral, or remove any Collateral from the Premises, unless the same is replaced by a similar item of equal or greater value, and except for the sale of inventory in the ordinary course of business, without the prior written consent of Pretzel Time. Franchisee agrees to give to Pretzel Time advance notice in writing of any proposed change in Franchisee's name, identity or structure and not to make any such change without the prior written consent of Pretzel Time and compliance with the provisions of this Agreement. Franchisee agrees to execute for filing such financing statements and continuation statements as Pretzel Time may require from time to time. Pretzel Time agrees to pay all filing fees, including fees for filing continuation statements in connection with such financing statements. + + 26.B. DEFAULT REMEDIES UNDER U.C.C. + + In the event of a default by Franchisee under this Agreement, Pretzel Time shall have the remedies and rights available as a secured party with respect to the Collateral under the Uniform Commercial Code as in effect from time to time in the state where the premises are located. The grant of the security interest to Franchisee pursuant to this Section shall not be construed to derogate from or impair any other rights which Pretzel Time may have under this Agreement or otherwise at law or equity. + +27. NOTICES. + + 27.A. DELIVERY OF NOTICES. + + All written notices permitted or required to be delivered by the provisions of this Agreement or of the Operations Manual shall be deemed so delivered to the Franchisee: + + a. At the time delivered by hand; or + + b. One business day after transmission by facsimile, telecopy, telegraph or other electronic system; + + c. One business day after being placed in the hands of a commercial carrier service for next business day delivery; or + + d. Three (3) business days after placement in the United States mail by registered or certified mail, return receipt requested, postage prepaid and addressed to the party to be notified at the addresses listed below or the most current business address of which the notifying party has been notified. If Franchisee refuses delivery of the same then notice shall be deemed delivered when refused by Franchisee. + + IF TO PRETZEL TIME: + + Pretzel Time, Inc. Attn: Martin Lisiewski, CEO 4800 Linglestown Road, Suite 202 Harrisburg, Pennsylvania 17112 + + WITH COPIES TO: + + Rashti and Mitchell Attorneys at Law Attn: Timothy T. Mitchell 4422 Ridgeside Drive Dallas, Texas 75244 + + + + + + IF TO FRANCHISEE: + + IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day and year first written above. + +WITNESSES: PRETZEL TIME, INC. FRANCHISOR + +- ----------------------- BY: + +_______________________ NAME: ____________________ + + TITLE: _____________________ + +WITNESSES: FRANCHISEE: ---------------------------- + + BY: + +______________________ NAME: _____________________ + + TITLE: + + CORPORATE ACKNOWLEDGMENT + +STATE OF ) : ' COUNTY OF ) + +On this _____ day of ___________, 19 __, before me, (Name of Notary) + + the undersigned officer, personally appeared and , known personally to me to be the Presidentand Secretary, respectively, of the above-named corporation, and that they, as such officers, being authorized to do so, executed the foregoing instrument for the purpose therein contained, by signing the name of the corporation for themselves as such officers. + + IN WITNESS WHEREOF I have hereunto set my hand and official seal. + + (Notary Public) + +My Commission Expires: + +(Notary Seal) + + INDIVIDUAL OR PARTNERSHIP ACKNOWLEDGMENT + +STATE OF ) : ' COUNTY OF ) + + On this _____ day of ___________, 19 __, before me, (Name of Notary) + + the undersigned officer, personally appeared to me personally known and known to me to be the same person(s) whose name(s) is (are) signed to the foregoing instrument, and acknowledged the execution thereof for the uses and purposes therein set forth. + + IN WITNESS WHEREOF I have hereunto set my hand and official seal. + + (Notary Public) + +My Commission Expires: + + + + + +(Notary Seal) + +FRAN.AGT 6.5.96 FRANCHISE AGREEMENT + + By and between + + Pretzel Time, Inc., a Pennsylvania corporation as Franchisor + + and + + , Franchisee + + EXHIBIT C TO THE OFFERING CIRCULAR OF PRETZEL TIME, INC. + + FRANCHISE AGREEMENT + + Exhibit "M" + + Sublease + + [Substitute 2 page short form - Karen to send Tim the disk] \ No newline at end of file diff --git a/full_contract_txt/MSCIINC_02_28_2008-EX-10.10-.txt b/full_contract_txt/MSCIINC_02_28_2008-EX-10.10-.txt new file mode 100644 index 0000000000000000000000000000000000000000..90cdfac7ff0150bff12ccb54ec0ea61113ef46e4 --- /dev/null +++ b/full_contract_txt/MSCIINC_02_28_2008-EX-10.10-.txt @@ -0,0 +1,145 @@ +Exhibit 10.10 + +EXECUTION VERSION + +INTELLECTUAL PROPERTY AGREEMENT + +This Intellectual Property Agreement (the "Agreement"), is entered into as of November 20, 2007 (the "Effective Date"), by and between Morgan Stanley & Co. Incorporated, a Delaware corporation ("MS") and MSCI Inc., a Delaware corporation ("MSCI"). (MS and MSCI individually referred to as a "Party" and collectively as the "Parties"). 1. DEFINITIONS + + 1.1 Certain Definitions. + +As used in this Agreement: + + (a) "Including" and its derivatives, each whether or not capitalized in this Agreement, means "including but not limited to". + + (b) "Licensed Materials" means, as applicable, the MS Licensed Materials and the MSCI Licensed Materials. + + + +(c) "MS Licensed Materials" means collectively, to the extent owned by a member of the MS Provider Group, any hardware settings and configurations, generic software libraries and routines, and generic document templates not separately commercialized by the MS Provider Group (as defined below) and used by MSCI prior to the Trigger Date. For the avoidance of doubt, the MS Licensed Materials does not include (i) any patent, trademark or service mark of the MS Provider Group, or (ii) any infrastructure hardware or software (e.g., monitoring software and systems, customized operating systems (and components such as AFS, DNS, AD, etc.), and middleware). For the avoidance of doubt, the document templates do not include any references to members of the MS Provider Group or its personnel. + + + +(d) "MSCI Licensed Materials" means collectively, to the extent owned by a member of the MSCI Provider Group, any hardware settings and configurations, generic software libraries and routines, and generic document templates not separately commercialized by the MSCI Provider Group (as defined below) and used by MS prior to the Trigger Date. For the avoidance of doubt, the MSCI Licensed Materials does not include (i) any patent, trademark or service mark of the MSCI Provider Group, (ii) any infrastructure hardware or software (e.g., monitoring software and systems, customized operating systems and middleware), or (iii) any software or data separately licensed to MS by the MSCI Provider Group (such as the Barra Aegis software or the MSCI indices). For the avoidance of doubt, the document templates do not include any references to members of the MSCI Provider Group or its personnel. + + (e) "Trigger Date" means the date upon which Morgan Stanley shall cease to own more than 50% of the issued and outstanding shares of MSCI common stock. 1.2 Other Terms. + +Other terms used in this Agreement are defined in the context in which they are used and shall have the meanings there indicated. + + + + + +2. GRANT OF LICENSE + + 2.1 MS Grant. + +MS hereby grants (subject to any existing third party contractual obligations) to MSCI a non-exclusive, perpetual, irrevocable, world- wide, royalty-free license for MSCI to use, modify, copy, create derivative works of and sublicense, for any business purpose, the MS Licensed Materials. 2.2 MSCI Grant. + +MSCI hereby grants (subject to any existing third party contractual obligations) to MS a non-exclusive, perpetual, irrevocable, world- wide, royalty-free license for MS to use, modify, copy, create derivative works of and sublicense, for any business purpose, the MSCI Licensed Materials. 2.3 Internet and Subnet Addresses. + +For the avoidance of doubt, this Agreement does not address or affect any rights of the Parties in or to internet or subnet addresses. 3. DELIVERY + + 3.1 No Support or Maintenance or Obligation to Deliver. + +The Parties shall have no obligation to provide support or maintenance for the Licensed Materials, including any obligation to update or correct such Licensed Materials. The Parties shall have no obligation to provide copies of the Licensed Materials (including in the case of software, any source code and object code). 4. NO WARRANTIES + +THE LICENSE GRANTS HEREUNDER ARE PROVIDED "AS-IS" WITH NO WARRANTIES, AND THE PARTIES EXPRESSLY EXCLUDE AND DISCLAIM ANY WARRANTIES UNDER OR ARISING AS A RESULT OF THIS AGREEMENT, WHETHER EXPRESS, IMPLIED OR STATUTORY, INCLUDING, WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE, NON-INFRINGEMENT OR ANY OTHER WARRANTY WHATSOEVER. 5. LIMITATIONS OF LIABILITY + + + +(a) MSCI agrees that neither MS nor its affiliates or subsidiaries (other than MSCI) (collectively, the "MS Provider Group") and the respective directors, officers, agents, and employees of the MS Provider Group shall have any liability, whether direct or indirect, in contract or tort or otherwise, to MSCI for or in connection with this Agreement or the transactions contemplated hereby or any actions or inactions by or on behalf of the MS Provider Group in connection with this Agreement and such transactions. + + (b) MS agrees that neither MSCI nor its subsidiaries (collectively, the "MSCI Provider Group") and the respective directors, officers, agents, and employees of the MSCI Provider Group shall have any liability, whether direct or indirect, in contract or tort or 2 + + + + + + otherwise, to MS for or in connection with this Agreement or the transactions contemplated hereby or any actions or inactions by or on behalf of the MSCI Provider Group in connection with this Agreement and such transactions. + + + +(c) Notwithstanding the provisions of Section 5(a) and (b), none of the members of the MS Provider Group and the MSCI Provider Group shall be liable for any special, indirect, incidental, consequential or punitive damages of any kind whatsoever in any way due to, resulting from or arising in connection with the performance of or failure to perform MS's or MSCI's obligations under this Agreement. This disclaimer applies without limitation (i) to claims for lost profits, (ii) regardless of the form of action, whether in contract, tort (including negligence), strict liability, or otherwise, and (iii) regardless of whether such damages are foreseeable or whether any member of the MS Provider Group or the MSCI Provider Group has been advised of the possibility of such damages. + + (d) In addition to the foregoing, each Party agrees that it shall, in all circumstances, use commercially reasonable efforts to mitigate and otherwise minimize its damages, whether direct or indirect, due to, resulting from or arising in connection with any failure by the other Party to comply fully with its obligations under this Agreement. 6. MISCELLANEOUS + + 6.1 Governing Law; Jurisdiction; Dispute Resolution. + + (a) This Agreement shall be construed in accordance with and governed by the substantive internal laws of the State of New York. MSCI Inc. is registered to do business in New York under the name NY MSCI. + + + +(b) Any action seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby shall be brought in the United States District Court for the Southern District of New York or any other New York State court sitting in New York County, and each of the parties hereby consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding which is brought in any such court has been brought in an inconvenient forum. Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court. + + (c) THE PARTIES HERETO HEREBY IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. 6.2 Severability. + +If any provision of this Agreement shall be invalid or unenforceable, such invalidity or unenforceability shall not render the entire Agreement invalid. Rather, the Agreement shall be construed as if not containing the particular invalid or unenforceable provision, and the rights and obligations of each party shall be construed and enforced accordingly. 3 + + + + + + 6.3 Notices. + +Any notice, instruction, direction or demand under the terms of this Agreement required to be in writing shall be duly given upon delivery, if delivered by hand, facsimile transmission, or mail, to the following addresses: + +To Morgan Stanley & Co. Incorporated: + +Morgan Stanley 1585 Broadway New York, NY 10036 Attn: Martin M. Cohen, Director of Company Law Facsimile: (212) 507-3334 + +To MSCI: + +MSCl Inc. 88 Pine Street New York, New York 10005 Attn: General Counsel Facsimile: (212) 804-2906 + +or to such other addresses or telecopy numbers as may be specified by like notice to the other party. All such notices, requests and other communications shall be deemed given, (a) when delivered in person or by courier or a courier services, (b) if sent by facsimile transmission (receipt confirmed) on a business day prior to 5 p.m. in the place of receipt, on the date of transmission (or, if sent after 5 p.m., on the following business day) or (c) if mailed by certified mail (return receipt requested), on the date specified on the return receipt. 6.4 Entire Agreement. + +This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersede all prior agreements, understandings and negotiations, both written and oral, between the parties with respect to the subject matter hereof. 6.5 Third Party Beneficiaries. + +This Agreement is not intended to confer upon any person or entity other than the parties hereto any rights or remedies hereunder. 6.6 Amendments and Waiver. + + (a) Any provision of this Agreement may be amended or waived if, but only if, such amendment or waiver is in writing and is signed, in the case of an amendment, by each party to this Agreement, or in the case of a waiver, by the party against whom the waiver is to be effective. + + + +(b) No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law. 4 + + + + + + 6.7 Construction. + +References to a "Section" shall be references to the sections of this Agreement, unless otherwise specifically stated. The Section headings in this Agreement are intended to be for reference purposes only and shall in no way be construed to modify or restrict any of the terms or provisions of this Agreement. 6.8 Counterparts. + +This Agreement may be executed in separate counterparts, each of which shall be deemed an original and all of which, when taken together, shall constitute one agreement. + +[Remainder of this page is intentionally left blank] 5 + + + + + +IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. MORGAN STANLEY & CO. INCORPORATED + +By: /s/ MARTIN M. COHEN Name: MARTIN M. COHEN Title: MANAGING DIRECTOR + +MSCI INC. + +By: Name: Title: + +Signature Page to the Intellectual Property Agreement + + + + + +IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. MORGAN STANLEY & CO. INCORPORATED + +By: Name: Title: + +MSCI INC. + +By: /s/ Henry Fernandez Name: Henry Fernandez Title: CEO & President + +Signature Page to the Intellectual Property Agreement \ No newline at end of file diff --git a/full_contract_txt/MTITECHNOLOGYCORP_11_16_2004-EX-10.102-Reseller Agreement Premier Addendum.txt b/full_contract_txt/MTITECHNOLOGYCORP_11_16_2004-EX-10.102-Reseller Agreement Premier Addendum.txt new file mode 100644 index 0000000000000000000000000000000000000000..677b4e7d79b66d422e366517b8656ce6d397511d --- /dev/null +++ b/full_contract_txt/MTITECHNOLOGYCORP_11_16_2004-EX-10.102-Reseller Agreement Premier Addendum.txt @@ -0,0 +1,345 @@ +EXHIBIT 10.102 + +[McDATA LOGO] + +RESELLER AGREEMENT + +AGREEMENT NUMBER: 200-04-634-00 + +McDATA CORPORATION ("McDATA) "RESELLER" MTI TECHNOLOGY CORPORATION + +380 INTERLOCKEN CRESCENT ADDRESS: 14661 FRANKLIN AVE + +BROOMFIELD, CO 80021 ADDRESS: TUSTIN, CA 92780 + +ADDRESS: + +THE EFFECTIVE DATE OF THIS RESELLER AGREEMENT SHALL BE: Sept 29, 2004 + +The following documents are incorporated herein by reference: + +Reseller Agreement + +Premier Addendum + +This Agreement, and all Addendums and attachments hereto, identified above, and Channel Notification Documents as issued by McDATA from time to time constitute the entire agreement between McDATA and Reseller with respect to the subject matter hereof, and supersedes all prior and contemporaneous oral or written representations or agreements between the parties regarding the subject matter of this Agreement. + +ACCEPTED AND AGREED TO BY: ACCEPTED AND AGREED TO BY: + +McDATA CORPORATION(McDATA) RESELLER MTI TECHNOLOGY CORPORATION + +SIGNED: /s/ Bruce Chumley SIGNED: /s/ Ron Umagat --------------------------- ---------------------------------- NAME: Bruce Chumley NAME: Ron Umagat + +TITLE: VP Channel Sales TITLE: VP of Operations + +DATE: 9/29/04 DATE: 9/24/04 + +This Reseller Agreement (the "Agreement") is entered into by and between McDATA and Reseller. + +1. SCOPE + +This Agreement establishes the terms and conditions under which Reseller will purchase, market, sell, license or incorporate for resale the McDATA Products and End User Customer Services in the Territory and the non-exclusive terms under which McDATA will provide the Products and End-User Customer Services (as defined below). + +2. DEFINITIONS + +2.1 "CHANNEL NOTIFICATION DOCUMENT(S)" means McDATA's standard form, incorporated herein by reference, for notifying Resellers of price changes, new product announcements, discontinued/obsolete product announcements, engineering change notifications, product information, marketing and sales Incentive programs, and any other business matters affecting pricing, products and services. + +2.2 "END USER CUSTOMER SERVICES" means the collective reference to warranty and post warranty (maintenance) services, including standard and enhanced warranty services, made available by McDATA and provided directly to End User Customers. + +2.3 "PRODUCT(S)" means McDATA hardware, Software, and related features, conversions, and options, as listed in the Addendum and further provided through Channel Notification Documents. + +2.4 "SOFTWARE" means the computer software, In machine executable object code format only, that is delivered and licensed by McDATA with the Product. + +2.5 "TERRITORY" means the area designated on the first page of the incorporated Addendum to this Agreement in which Reseller may, on a non-exclusive basis, market and sell the Products and End User Customer Services. + +3. APPOINTMENT/TERRITORY + +3.1 Subject to the terms and conditions of this Agreement, McDATA hereby authorizes and appoints Reseller and Reseller accepts the appointment, as a non-exclusive reseller to purchase Products from McDATA and to market, sell, or incorporate for resale McDATA Products to End User Customers in the Territory. + +3.2 Reseller's authorization from McDATA to resell McDATA Products is limited to the Territory shown on the first page of this Agreement. Additional sales locations must be pre-approved by McDATA. Reseller may request that additional Reseller sales locations are added to this Agreement. Upon Reseller's request, McDATA will provide Reseller with the criteria and process for applying for authorization of additional sales locations. Reseller agrees that any additional + + + + + +McDATA authorized sales locations will be governed by the terms and conditions of this Agreement. + +3.3 McDATA reserves the right to revise the list of Products and End User Services at any time during the term of this Agreement. McDATA will notify Reseller of such revisions through a Channel Notification Document(s). + +4. TERM AND TERMINATION + +4.1 TERMINATION WITHOUT CAUSE. Either party may terminate this Agreement without cause upon sixty (60) days prior written notice to the other party. + +4.2 TERMINATION FOR BREACH. In addition to any other rights or remedies that may be available at law or in equity, either party may terminate this Agreement if the other party is in material breach of this Agreement and has not cured the breach within thirty (30) days of receiving written notice specifying the breach. If the breach is not cured within the thirty (30) day period, termination will become effective on the thirty-first (31st) day following the written notice. + +4.3 TERMINATION FOR INSOLVENCY. Either party, upon written notice to the other party, may elect to immediately terminate this Agreement upon the occurrence of any of the following events: (i) a receiver is appointed for either party or its property; (ii) either party makes, or attempts to make, an assignment for the benefit of its creditors; (iii) any proceedings are commenced by or for either party under any bankruptcy, insolvency, or debtor's relief law and such proceedings are not set aside within thirty days following their filing; and/or (iv) either party liquidates or dissolves or makes a good faith attempt to liquidate or dissolve. + +4.4 EFFECT OF TERMINATION. Termination of this Agreement shall not limit either party from pursuing any other remedies available to it, Inducing injunctive relief. The termination of this Agreement simultaneously terminates all programs and incentives McDATA offered to Reseller through Channel Notification Documents and voids any unused program account balances. Upon cancellation, termination or expiration of this + +McDATA Corporation Standard Terms OF Reseller Agreement JUNE 2004 + +2 + +Agreement, Reseller agrees to immediately pay all monies due to McDATA under this Agreement. + +The parties' rights and obligations under Sections 8,9 and 10 hereof shall survive termination of this Agreement. + +5. RESELLER OBLIGATIONS/RESPONSIBILITIES + +5.1 SALES. Reseller agrees to actively market, promote, demonstrate, sell and provide the Products and End User Customer Services only within the Territory during the term of this Agreement + +5.2 REPORTS. For warranty purposes, McDATA may require Reseller to provide McDATA with a written report containing, without limitation, the following information: End User Customer name, Reseller's authorization or location Number, End User Customer information, Product serial numbers, number of units, and level of warranty. McDATA will notify Reseller of reporting requirements, including content and format, in a Channel Notification Document. + +5.3 EDUCATIONAL REQUIREMENTS. Reseller agrees to participate in McDATA-speciflad educational courses for purposes of training Reseller's personnel. Educational course requirements will be provided in a Channel Notification Document and must be satisfied by Reseller to maintain its status as a McDATA authorized Reseller McDATA will provide to Reseller without tuition fee, at a McDATA designated training site, the required educational courses identified on the Addendum. + +5.4 END USER CUSTOMER TERMS AND CONDITIONS. Reseller will ensure that the terms of its executed agreements with End User Customers am not in conflict with this Agreement + +5.5 POINT OF SALE (POS) REPORTS. Beginning on the first month after the Effective Date, in order to qualify for certain McDATA channel partner program benefits, Reseller will provide McDATA with a written monthly point of sale report ("POS Report") listing the Products that Reseller has sold, by model and serial number, together with the names and addresses of all End User Customers. Detailed POS requirements will be communicated through Channel Notification Documents. + +5.6 FINANCIAL STATEMENTS. Reseller agrees to provide McDATA with its and its ultimate parent company's most recent financial statements prior to the Effective Date of the Agreement. + +6. McDATA OBLIGATIONS/RESPONSIBILITIES + +6.1 END USER CUSTOMER SERVICES + +McDATA will make available, for End User Customers, warranty, enhanced warranty, and post warranty services according to the terms and conditions of the applicable manufacturer's warranty and McDATA's then-current maintenance policies, McDATA, or an authorized McDATA service provider, will provide technical support and repairs during the warranty and post warranty periods to End User Customers. McDATA reserves the right to revise its technical support program. McDATA will notify Reseller of changes to McDATA's warranty and + + + + + +technical support and repairs policy through Channel Notification Document(s). + +6.2 PRODUCT DISCONTINUATION. McDATA reserves the right to discontinue Products. McDATA will notify Reseller of any Product discontinuance through Channel Notification Document(s). + +6.3 PRODUCT AND SERVICE ANNOUNCEMENTS. McDATA will notify Reseller of changes and innovations in performance, serviceability, uses and applications of Products and End User Services through Channel Notification Document(s). + +7. END USER CUSTOMER SOFTWARE LICENSE + +Product(s) that embody or include Software will be delivered with a shrink-wrap or click-through software license which shall govern End User Customer's use of the Software. McDATA or its suppliers retain title in and to the Software and all intellectual property rights, and no title to the Software or intellectual property rights is transferred to the End User Customers. Such Software is proprietary to, trade secret of, and copyrighted by McDATA or its suppliers. + +8. CONFIDENTIALITY + +8.1 As used herein, "CONFIDENTIAL INFORMATION" will mean any and all technical or business information, including third party information, furnished or disclosed, in whatever form or medium (regardless of whether tangible, Intangible, visual or oral), by one party to the other, including but not limited to information regarding patents and patent applications, trade secrets, works of authorship, software programs, software source documents, software architecture, algorithms, formulae, ideas, techniques, know-how, processes, inventions, apparatuses, equipment, models, information related to current, future and proposed products and services, research, experimental work, development, design details, specifications and engineering information, financial information, procurement, purchasing and manufacturing requirements, potential and actual customer lists, investors, employees, business and contractual relationships, business forecasts, sales and merchandising information, marketing plans; information regarding third parties; and any physical manifestations of Confidential Information (such as notes, reports, memoranda, etc.). + +McDATA Corporation Standard Terms of Reseller Agreement June 2004 + +3 + +8.2 Information will not be deemed Confidential Information hereunder if the receiving party can demonstrate that such Information: (a) is already known to the receiving party prior to disclosure; (b) is independently developed by the receiving party without the use of the disclosing party's Confidential Information; (c) is or becomes publicly available through no fault of the receiving party; or (d) is obtained by the receiving party from a third party other than one having an obligation to the disclosing party with respect to the Confidential Information disclosed. A party may disclose Confidential Information pursuant to the requirements of a governmental agency or by operation of law, provided that such party gives the other party reasonable prior written notice sufficient to allow the other party time to contest such disclosure. + +8.3 Each party agrees that for a period of three (3) years following the disclosure of Confidential Information, it (a) will not use, directly or indirectly, or reproduce the Confidential Information of the other party for any purpose except in accordance with the terms of the Agreement, (b) will not disclose the Confidential Information of the other party to any third parties except as expressly permitted in this Agreement, and (c) will take all reasonable security measures to maintain the confidentiality of all Confidential Information of the other party in its possession or control, which will in no event be less than the measures it uses to maintain the confidentiality of its own information of similar importance. + +8.4 Upon the termination or expiration of this Agreement, or upon any request of a party, all Confidential Information, together with any copies of same as may be authorized herein, will (at the election of the disclosing party) either be returned to the disclosing party or certified destroyed by the receiving party. Notwithstanding the termination or expiration of this Agreement, each party agrees the requirements regarding use, confidentiality and non-disclosure set forth herein will survive the termination or expiration of this Agreement for a period of three (3) years from the date of the disclosure of the Confidential Information. + +8.5 Each party acknowledges that its breach of this Section will cause irreparable damage and hereby agrees that the other party shall be entitled to seek injunctive relief under this Agreement, as well as such further relief as may be granted by a court of competent jurisdiction. + +9. TRADEMARKS. + +Subject to McDATA's prior written approval, McDATA grants Reseller a limited, nonexclusive, non-transferable, revocable license to use McDATA's Trademarks (defined as McDATA's name or any abbreviation thereof, its acronym, logotype or any other trademarks or trade names of McDATA) for the sole purpose of marketing and selling Products and End User Customer Services in the Territory during the term of this Agreement Reseller agrees to comply with McDATA's Logo Usage Guide, which is found at McDATA's web site, www.mcdata.com. By using McDATA's Trademarks, Reseller does not acquire any proprietary rights to such Trademarks, and Reseller agrees not to obtain or attempt to obtain, by any method, any rights, title or interest in or to any of the Trademarks. Additional provisions relating to the proper usage of the Trademarks are sat forth in Channel + + + + + +Notification Documents. + +10. LIMITATION OF LIABILITY AND DISCLAIMER OF WARRANTY + +10.1 EXCEPT FOR A BREACH OF SECTION 8 (CONFIDENTIALITY), IN NO EVENT WILL EITHER PARTY BE LIABLE FOR ANY INDIRECT, PUNITIVE, SPECIAL, INCIDENTAL, EXEMPLARY OR CONSEQUENTIAL DAMAGES, NOR FOR ANY DAMAGES RELATING TO LOST DATA, LOST PROFITS, ADVERTISING OR PROMOTIONAL COSTS, TERMINATION OF EMPLOYEES, SALARIES OF EMPLOYEES OR SEVERANCE PAYMENTS, CREATION OF CUSTOMER BASE, OR FUTURE EXPECTATIONS OR OTHER ECONOMIC ADVANTAGE, HOWSOEVER ARISING AND REGARDLESS OF THE FORM OF ACTION, WHETHER IN CONTRACT, WARRANTY OR TORT (INCLUDING NEGLIGENCE) OR UNDER ANY OTHER THEORY OF LIABILITY IN LAW OR IN EQUITY, EVEN IF SUCH PARTY HAS BEEN PREVIOUSLY ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. + +10.2 Notwithstanding any provision herein to the contrary, McDATA's entire liability in any given instance from any cause whatsoever, and regardless of the form of action, whether in contract, warranty or tort (including negligence) or any other theory of liability in law or in equity, will in no event exceed the lease, of (i) the purchase price for the specific Product that is the subject matter of or is directly relative the cause of action; or (ii) Five Hundred Thousand Dollars ($500,000). + +10.3 The foregoing limitations will not apply (i) to claims by either party for personal injury or damage to personal property, or (ii) claims by McDATA for negligent or misuse or unauthorized use by Reseller of any of McDATA's proprietary rights, including Trademarks and Software. + +10.4 THE WARRANTIES, IF ANY, PROVIDED IN THIS AGREEMENT (INCLUDING THE APPENDICES AND CHANNEL NOTIFICATION DOCUMENTS) OR AS PROVIDED WITH THE PRODUCTS ARE GIVEN IN LIEU OF ALL OTHER + +McDATA Corporation Standard Terms of Reseller Agreement June 2004 + +4 + +WARRANTIES, WHETHER EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY, NONINFRINGEMENT OR FITNESS FOR A PARTICULAR PURPOSE, ALL OF WHICH ARE HEREBY EXPRESSLY DISCLAIMED AND EXCLUDED. + +11. MARKETING + +McDATA and Reseller may publicly refer to the existence, but not the content, of this Agreement and may reference their business relationship by creating a hyper-link from one party's web site to the other party's web site. Reseller grants McDATA a license to use Reseller's trademarks and corporate logos solely for such marketing and reference purposes. Copies of each party's logo and authorized trademark(s) can be obtained from their respective marketing departments and may not be altered or changed by either party, its employees or agents, without prior written permission from an authorized representative of the other. + +12. GENERAL + +12.1 NO AMENDMENT OR WAIVER. No provision of this Agreement will be deemed waived, amended or modified by either party, unless such waiver, amendment or modification is made in writing and signed by authorized representatives of both parties. No waiver of rights under this Agreement by either party shall constitute a subsequent waiver of&sbsp;such rights or any other rights under this Agreement. Notwithstanding the foregoing, the parties agree to the use of Channel Notification Documents as set forth in this Agreement. + +12.2 SEVERABILITY. If any provision of this Agreement is held to be invalid or unenforceable by a proper authority having jurisdiction over this Agreement, the remaining provisions of this Agreement will remain in full force and effect. + +12.3 NO AGENCY CREATED. Nothing in this Agreement shall be construed to create a partnership, joint venture, or agency relationship between the parties. Neither party is granted the tight or authority to assume or create any obligation or responsibility, express or implied, on behalf of, or in the name of the other party, or to bind such other party in any manner to anything whatsoever. + +12.4 NO THIRD PARTY BENEFICIARIES. The parties agree that there shall be no third party beneficiaries to this Agreement, including but not limited to Reseller's End User Customers. + +12.5 ASSIGNMENT. Neither party will assign this Agreement or any rights hereunder without the prior written consent of the other party, which consent will not be unreasonably withheld. Notwithstanding the foregoing sentence, McDATA may assign this Agreement to any entity controlled by, controlling, or under common control with McDATA or to any successor by merger, divestiture, consolidation or reorganization, or to any purchasers of all or substantially all of the assets of the business of McDATA without consent of Reseller. + +12.6 GOVERNING LAWS. This Agreement shall be governed by and construed in accordance with the laws of the State of Colorado excluding its choice of law provisions. The United Nations Convention on Contracts for the International Sale of Goods (CISG) is specifically excluded and shall not be applicable to any transaction contemplated herein. + +12.7 DISPUTE RESOLUTION PROCESS. In case of any dispute between the parties relating to this Agreement, such dispute shall be finally resolved in Denver, Colorado (USA) by arbitration under the Commercial Rules of Arbitration of the American Arbitration Association, using three arbitrators, one selected by each of McDATA and Reseller and the third selected in accordance with such Rules. The + + + + + +arbitrators will decide the issues presented to them applying the substantive laws of the Sate of Colorado (USA). The award of the arbitrators may be granted notwithstanding the absence of any party and such award shall be in writing and shall be final and binding upon the parties and shall not be appealed from or contested in any court or tribunal. Any award rendered hereunder may be entered for enforcement, if necessary, in any court of competent jurisdiction. + +12.8 INJUNCTIVE RELIEF. Notwithstanding the above provisions relating to arbitration, the parties agree that in respect of any violation of any provision of this Agreement, including without limitation violation of any proprietary or confidential information, for which an award of damages is an inadequate remedy to project the injured party, the injured party is entitled to seek injunctive relief, including a preliminary injunction, in a court of competent jurisdiction, in addition to any other relief available to it under the arbitration procedures specified above in Section 12.7. + +12.9 OFFICIAL LANGUAGE. The official language of this Agreement and all transactions conducted under this Agreement is English. + +12.10 FORCE MAJEURE. Neither party will be liable for any failure or delay in its performance under this Agreement due to any cause beyond its reasonable control, including but not limited to acts of God, war, riot, embargoes, acts of civil or military authorities, fire, floods, accidents, strikes, delays by suppliers or shortages of transportation, facilities, fuel, energy, labor, or materials. + +McDATA Corporation Standard Terms of Reseller Agreement June 2004 + +5 + +12.11 COMPLIANCE WITH LAWS. McDATA and Reseller each agree to comply with all applicable laws and each understand and agree that the continuing rights and obligations of the parties hereunder are specifically conditioned upon compliance with such laws. These laws include, without limitation, the following: (i) the U.S. anti-boycott regulations, (ii) the U.S. Foreign Corrupt Practices Act ("FCPA"), (iii) the export control laws of the United States of America, (iv) the prevailing regulations which may be issued from time to time by the U.S. Department of Commerce and the Office of Munitions Control and the U.S. Department of State, and (v) any export or import laws of the agencies of the Territory or of any countries into or through which the Products purchased under this Agreement may be transported. + +12.12 NOTICES. Notices required hereunder will be in writing and will be deemed given when transmitted by facsimile (provided such facsimile is subsequently confirmed in writing within five (5) days of the facsimile date) or deposited with an express delivery service with guaranteed third-day delivery, prepaid, addressed as follows: + +NOTICES TO: McDATA CORPORATION: McDATA Corporation 380 Interlocken Crescent Broomfield, CO 80021 Attn: VP of Sales With a copy to: VP and General Counsel Fax:720-558-3235 + +NOTICES TO: RESELLER MTI Technology Corp 14661 Franklin Ave Tustin,CA 92780 Attn: CFO Fax : 714-481-4136 + +12.13 ENTIRE AGREEMENT. This Agreement, together with any and all attachments hereto and applicable Appendices, Addendums and Channel Notification Documents as issued from time to time by McDATA constitutes the entire agreement between McDATA and Reseller with respect to the subject matter hereof, and supersedes all prior and contemporaneous oral or written representations or agreements between the parties regarding the subject matter of this Agreement. + +12.14 COUNTERPARTS. This Agreement may be executed in counterparts or by facsimile, each of which shall be an original, and all of which together shall constitute one and the same instrument. + +12.15 NUCLEAR, AVIATION OR LIFE SUPPORT APPLICATION. McDATA specifically disclaims liability for use of McDATA Software in connection with the design, construction, maintenance, and/or operation of any (i) nuclear facility, (ii) aircraft, aircraft communication or aircraft ground support system, or (iii) life support system by Reseller or its End User Customers. Such use is entirely at the user's risk. McDATA shall not be liable to Reseller or its End User Customers, in whole or in part, for any claims arising out of such use. Reseller agrees to defend, indemnify, and hold McDATA harmless from and against any and all claims arising out of use of the Software in such applications by Reseller or its End User Customers. + +McDATA Corporation Standard Terms of Reseller Agreement June 2004 + +6 + +PREMIER RESELLER ADDENDUM + +RESELLER AGREEMENT + + + + + +This addendum applies to a Reseller that will purchase, market, sell license or incorporate Product to any commercial non-United States government entity, instrumentality or agency. + +TERRITORY: NORTH AMERICA + +1. SCOPE + +1.1 Sales to the US Government are not authorized under this Agreement. + +1.2 Reseller is authorized to procure McDATA Products and End User Customer Services through the source defined in Paragraph 2.3, "Product Provider." Reseller procurement of Product and End User Customer Services from sources other than the Product Provider is a material breach of this Agreement and may result in termination of this Agreement. In the event Reseller procures Product or End User Customer Services from sources other than its Product Provider, such procurements will not be included in any McDATA marketing and promotional programs made available to Reseller by McDATA. McDATA, at its sole discretion, may change this policy through a Channel Notification Document. + +2. DEFINITIONS + +2.1 "DISTRIBUTOR" means a business entity which is authorized by McDATA through a fully executed distributor agreement to market and sell, or incorporate for resale, the McDATA Products and End User Customer Services to McDATA authorized Resellers in its Territory. + +2.2 "END USER CUSTOMER" means any entity which, for its own use and not for resale, (i) purchase McDATA-manufactured Products; and/or (ii) licenses Software associated therewith from McDATA; and/or (iii) receives End User Customer Services from McDATA. + +2.3 "PRODUCT PROVIDER" means either a McDATA-authorized OEM and/or Distributor who provides Product(s) to the Reseller, as set forth in Appendix 1. + +2.4 "RESELLER" means a business entity which is authorized by McDATA through a fully executed Reseller Agreement to (i) market and resell Products; (ii) purchase McDATA-manufactured Products from a Product Provider, without the intention of purchasing such Products for its own use; and/or (iii) resell End User Customer Services from McDATA. + +3. TERM + +The initial term of this Agreement shall be for a period of one (1) year from the Effective Date unless sooner terminated pursuant to the termination provisions herein. Thereafter, this Agreement automatically renews for successive terms of one (1) year. + +4. RESELLER OBLIGATIONS/RESPONSIBILITIES + +For enhanced warranty and post warranty services, Reseller shall refer to McDATA's Product Offerings on its website. McDATA will notify Reseller of changes to the Product Offerings through its Channel Notification Documents. + +5. END USER CUSTOMER SOFTWARE LICENSE + +Product(s) that embody or include Software will be delivered with a shrink-wrap or click-through software license which shall govern End User Customer's use of the Software. Such Software is proprietary to, trade secret of, and copyrighted by McDATA or its suppliers. McDATA or its suppliers retain title in and to the Software and all intellectual property rights, and no title to the Software or intellectual property rights is transferred to the End User Customers. + +6. MARKETING + +Reseller agrees not to publish or advertise any price below Manufacturer's Suggested List Price on its web site or by means of any online communications or any other mass communications, including without limitation, catalogues, fax blasts, direct mail pieces, or e-mail blasts. + +7. GOVERNMENT FLOWDOWN PROVISIONS. + +Reseller agrees that flowdown provisions, including, but not limited to United States Government Federal Acquisition Regulations ("FARs"), Defense FARs or NASA FARs, shall not apply to McDATA and McDATA does not accept such provisions notwithstanding the existence of such provisions. In addition, McDATA is not responsible for fulfilling any contract obligations under any schedule contracts including those obligations under the United States Government General Service Administration ("GSA") contract and the California Multiple Award Schedule ("CMAS") contract. + +McDATA Corporation Standard Terms of Reseller Agreement June 2004 + +7 + +APPENDIX I RESELLER AGREEMENT PREMIER PARTNER PRODUCTS, PRODUCT PROVIDER AND REVENUE TARGETS + +PRODUCTS: + +Reseller is eligible to sell the McDATA Products listed below. McDATA will provide Product information including pricing, availability, features, + + + + + +accessories, services and support in the Channel Notification Documents. McDATA will update the Product listing from time-to-time through the Channel Notification Documents. + +- Fibre Channel Directors + +- Switches + +- Software + +- Fabricenter(TM) Cabinet + +004 ANNUALIZED REVENUE TARGET: $500,000 + +The 2004 Annualized Revenue Target to qualify as a Premier Reseller is $500,000. Reseller is eligible for Premier Reseller program benefits and responsible for the obligations as defined in the Channel Notification Documents. + +INITIAL EDUCATION REQUIREMENTS: + +Reseller must successfully complete both Sales and Technical Foundation training, for each McDATA authorized sales location, as follows, within ninety (90) days of the effective date of this Agreement. + +Sales: All Sales Reps/sales location McDATA Solution (web-based) Technical: 3 individuals Certified Professional Accelerated Track (CPAT) + +McDATA will waive the charges associated with the above listed required technical courses for three (3) individuals at Reseller's organization. McDATA may, at its sole discretion, provide additional education incentives to Reseller based upon sales performance. These incentives, if made available, will be communicated via Channel Notification Documents. + +McDATA Corporation Reseller Agreement Premier Partner Addendum June 2004 + +8 + +PRODUCT PROVIDER: + +Reseller will purchase Products directly from one of the Distributors listed on the next page below. Terms and conditions for purchase of Products from the Distributor are as agreed between Distributor and Reseller. + +Reseller may elect a new distributor annually by notifying McDATA thirty (30) days prior to renewal of the Agreement. If McDATA does not receive notice of a new distributor election and the Agreement is renewed, Reseller agrees that it will continue to purchase Products through the currently designated distributor. + +Under limited circumstances as approved by McDATA in writing, Reseller may purchase from another Product Provider as directed by McDATA. This may include a) critical customer need where Product is not available from Product Provider in the time frame required by End User, but available through another Authorized McDATA Product Provider or b) repeated, documented dissatisfaction with specified Product Provider during the term of the Agreement. + +PLEASE INDICATE WHICH ONE OF THE FOLLOWING DISTRIBUTORS YOU CHOOSE TO BUY FROM FOR THE FIRST YEAR OF YOUR AGREEMENT WITH McDATA: + +[ ] AVNET + +East Coast Sates - Elsa Neves Phone: 877-286-3879 X5815 Fax: 480-794-9324 Email: elsa.neves@avnet.com West Coast Sates - Jan Johnson Phone: 877-967-3664 Fax: 480-794-9324 Email: jan.johnson@avnet.com + +[ ] ARROW ESS + +Cindie Snell Phone: 303-824-3651 Fax: 303-824.3646 Email: csnell@arrow.com + +[ ] BELL MICROPRODUCTS,INC + +Lyle Freemen Phone: 952-345-7942 1941 Ringwood Ave Email: lfreerman@bellmicro.com San Jose, California 95131 -1721 + +[ ] MOCA + + + + + + + +Adrienne Hargrove Phone: 1 -800-786-3425 5230 Pacific Concourse Dr, 4th Flr, Fax: Los Angeles, CA 80045 Email: + +[X] TIDAL WIRE + +Cherie Vallone Phone: 781-332-1104 Email: cvallone@tidalwire.com + +McDATA reserves the right to change the Premier Partner criteria each January or upon sixty (60) days advanced notice through a Channel Notification Document. If Reseller fails to comply with any of the above requirements, McDATA reserves the right to change the Reseller Designation and Reseller will become eligible for only those programs applicable to the new Reseller Designation. + +McDATA Corporation Reseller Agreement Premier Partner Addendum June 2004 + +9 \ No newline at end of file diff --git a/full_contract_txt/Magenta Therapeutics, Inc. - Master Development and Manufacturing Agreement.txt b/full_contract_txt/Magenta Therapeutics, Inc. - Master Development and Manufacturing Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..15853079078e809f94bdd960bee633011765dab8 --- /dev/null +++ b/full_contract_txt/Magenta Therapeutics, Inc. - Master Development and Manufacturing Agreement.txt @@ -0,0 +1,403 @@ +Exhibit 10.10 + +CONFIDENTIAL TREATMENT REQUESTED. INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS OMITTED AND MARKED WITH "[***]". AN UNREDACTED VERSION OF THE DOCUMENT HAS ALSO BEEN FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION AS REQUIRED BY RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED. MASTER DEVELOPMENT AND MANUFACTURING AGREEMENT + +This Master Development and Manufacturing Agreement (including all appendices hereto, this "Agreement") is entered into as of February 13, 2018 (the "Effective Date") by and between Magenta Therapeutics, Inc., a Delaware corporation having offices at 50 Hampshire Street, 8t h Floor, Cambridge, MA 02139 ("Magenta"), and Bachem Americas, Inc., a California corporation, having offices at 3132 Kashiwa Street, Torrance, CA 90505 ("Bachem"). Magenta and Bachem may be referred to individually as a "Party" or collectively as the "Parties." + +RECITALS + +WHEREAS, Magenta is engaged in the development and research of certain pharmaceutical products and requires assistance in the development and manufacture of active pharmaceutical ingredients for its clinical trials; and + +WHEREAS, Bachem is a contract manufacturer that possesses the necessary technical capabilities and operates pharmaceutical process development facilities for both the development and manufacture of pharmaceutical products used in clinical trials, as required by Magenta; and + +WHEREAS, Magenta desires Bachem to provide the Services and manufacture the Products specified in Project Plans (as defined below); and + +WHEREAS, Bachem is willing to provide the Services, manufacture the Product, and fulfill the Project Plans on the terms and conditions set forth below. + +NOW, THEREFORE, in consideration of the mutual promises contained herein, and for other good and valuable consideration, the receipt and adequacy of which each of the Parties does hereby acknowledge, the Parties, intending to be legally bound, agree as follows. + +Section 1. DEFINITIONS + +As used herein, the following terms shall have the following meanings: + +1.1 "Affiliate" shall mean any corporation or other entity which controls, is controlled by, or is under common control with, a Party to this Agreement. A corporation or other entity shall be regarded as hi control of another corporation or entity if it owns or directly or indirectly controls more than fifty percent (50%) of the voting stock or other ownership interest of the other corporation or entity, or if it possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of the corporation or other entity or the power to elect or appoint fifty percent (50%) or more of the members of the governing body of the corporation or other entity. + +1.2 "Applicable Laws" means all relevant federal, state and local laws, statutes, rules, regulations, and ordinances and industry standards and guidelines as in effect on the Effective Date or adopted thereafter and which are applicable to a Party's activities hereunder in their respective countries, including, without limitation, the applicable regulations and guidelines of the FDA and all applicable GMPs together with amendments thereto. + + + + + +CONFIDENTIAL TREATMENT REQUESTED. INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS OMITTED AND MARKED WITH "[***]". AN UNREDACTED VERSION OF THE DOCUMENT HAS ALSO BEEN FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION AS REQUIRED BY RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED. 1.3 "Batch" means a specific quantity of Product that is intended to have uniform character and quality, within specified limits, and is produced according to a single manufacturing order during the same cycle of manufacture. + +1.4 "CMC" shall mean (i) manufacturing process development for Product; (ii) all chemistry, manufacturing and control procedures necessary for the manufacturing, testing and quality control release of Product; and (iii) sourcing and testing of all raw materials and components used in the production of any Product. + +1.5 "[***]" means the specific sequence(s) defined in Appendix B. + +1.6 "Development Specifications" shall mean the requirements of all Applicable Laws and the procedures, process parameters, analytical tests and other attributes and written specifications for the Development Work attached hereto as part of a Project Plan. + +1.7 "Development Work" shall mean those development Services that are to be performed by Bachem hereunder and which may include work related to identifying, formulating, developing and demonstrating cost effective, reproducible Product and manufacturing a feasibility Batch. + +1.8 "DMF" means a Drug Master File as described in 21 C.F.R. § 314.420. + +1.9 "Effective Date" has the meaning set forth in the introduction. + +1.10 "FDA" means the United States Food and Drug Administration or any successor entity thereto. + +1.11 "GMPs" shall mean current good manufacturing practices, including the regulations promulgated by the FDA under the United States Food, Drug and Cosmetic Act, 21 C.F.R. Part 210 et seq., as amended from time to time, applicable guidance documents issued by the FDA, applicable documents developed by the International Conference on Harmonization (ICH) to the extent that they are applicable to Product and the Parties hereunder. + +1.12 "Governmental Authority" means any court, including any political subdivision thereof, court instrumentality, or agency thereof, and any other federal, state, or public authority, domestic or foreign, exercising governmental powers and having jurisdiction over any activity of a Party under this Agreement. + +1.13 "IND" means an investigational new drug application relating to a Product, and includes such applications submitted to the FDA and equivalent applications submitted to a Governmental Authority outside of the U.S. + +1.14 "Latent Defect" means a defect which could have been detected (but was not) by the analytical test methods in operation at the date of shipment to Magenta, attributable to an act or omission of Bachem that causes a Product to fail to conform to the Specifications, which may not be discoverable upon the inspection and testing which Magenta would have been expected to carry out in its ordinary course of business, but is discovered at a later time. 2 + + + + + +CONFIDENTIAL TREATMENT REQUESTED. INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS OMITTED AND MARKED WITH "[***]". AN UNREDACTED VERSION OF THE DOCUMENT HAS ALSO BEEN FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION AS REQUIRED BY RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED. 1.15 "Product" means the product to be developed or manufactured by Bachem pursuant to a Project Plan. + +1.16 "Project Plant(s)" means a mutually agreed to project plan, statement of work, quotation or other ordering document that sets forth a description of the Services to be provided by Bachem, and related timeline(s), costs, and other relevant details, that references, and is expressly governed by this Agreement and is executed by an authorized representative of each Party. Notwithstanding, the Parties acknowledge and agree that the quotations identified in Appendix A attached hereto are Project Plans, and are governed by this Agreement, even though they do not expressly reference this Agreement. + +1.17 "Services" means, with respect to a Project Plan, those services (including Development Work and manufacture of Product) to be provided by Bachem, as described in such Project Plan. + +1.18 "Specifications" means the requirements of all Applicable Laws, the master batch record, current standard operating procedures and the procedures, process parameters, analytical tests and other attributes and written specifications for the Product attached hereto as part of a Project Plan, which the Parties agree are necessary for the manufacture and release of the Product for use in clinical trials. The Parties recognize that specifications for Product for a specific Project Plan are likely to change during the term of this Agreement, and the Parties agree to act in good faith and reasonably to effect such changes as may be required. Copies of such Specifications, as amended, shall be maintained by both Parties, and shall be incorporated into this Agreement and the Quality Agreement (as defined below). + +1.19 "Third Party" means any entity other than Magenta or Bachem. + +1.20 "U.S." means the United States of America, its territories, commonwealths, and possessions, including the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, and all other places under the jurisdiction thereof. + +Section 2. ENGAGEMENT OF BACHEM + +Magenta hereby engages Bachem to perform the Services and manufacture the Product in accordance with the applicable Project Plan(s) and in compliance with Applicable Laws and the terms and conditions set forth herein, and Bachem hereby accepts such engagement. Bachem will supply to Magenta all Product ordered by Magenta hereunder as set forth in the Project Plan and related purchase orders. + +Section 3. PROJECT PLANS + +3.1 Project Plans. All Project Plans entered into after the Effective Date shall be added to Appendix A after execution by the Parties of a written amendment in the form of the "Amendment to Appendix A", attached hereto (the "Amendment"). There shall be no limit to the number of Project Plans that may be added to Appendix A and governed by the terms and conditions of this Agreement. In the event of a conflict between the terms of a Project Plan or any attachments thereto or any purchase order issued in connection therewith and this Agreement, the terms of this Agreement will govern. 3 + + + + + +CONFIDENTIAL TREATMENT REQUESTED. INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS OMITTED AND MARKED WITH "[***]". AN UNREDACTED VERSION OF THE DOCUMENT HAS ALSO BEEN FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION AS REQUIRED BY RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED. 3.2 Content of Project Plans. Each Project Plan shall include a description of the Services to be provided, including, if applicable, the Development Work to be completed, the Product to be manufactured, relevant Development Specifications, relevant Specifications, deliverables, a corresponding budget, a schedule for completion of the Project Plan (which may be set forth for the entire Project Plan or stages thereof), a fee and payment schedule, delivery terms, and such other information as the Parties determine is necessary for Bachem to perform the Services and manufacture the Product. Magenta may amend any Project Plan before its completion, subject to prior written approval by Bachem, which approval shall not be unreasonably withheld. If such amendment entails additional expenses that will be incurred by Bachem, the Parties agree to reconsider in good faith the budget and the payment and fee schedule. + +3.3 Materials and Equipment. Unless otherwise agreed by the Parties in writing or specified in the applicable Project Plan, Bachem shall supply all materials and standard processing and manufacturing equipment needed to provide the Services and manufacture the Product in accordance with this Agreement and the applicable Project Plan, at its sole cost and expense. + +3.4 Change Orders. In the event that Magenta requests or requires Bachem to perform services that are outside the scope of this Agreement, or Magenta desires to amend a Project Plan, such changes must be mutually agreed upon by the Parties in a written change order (a "Change Order") prior to the provision of said services or implementation of such amendment by Bachem. Each such Change Order constitutes an amendment to the Agreement and/or the applicable Project Plan, and thereafter the services or amendments set forth therein shall be deemed Services hereunder. + +3.5 Project Manager. With respect to each Project Plan, an employee of Bachem shall be appointed as project manager by Bachem (the "Project Manager"). The Project Manager shall be the primary contact for Magenta and shall timely address all issues and concerns raised by Magenta, as well as provide to Magenta all information requested by Magenta concerning this Agreement or the Services. The Project Manager shall not be replaced without advanced written notice to Magenta. In the event that Bachem becomes aware that the Project Manager plans to leave the employment of Bachem or shall be unable to complete the Services due to dismissal, death or disability, it shall give immediate written notice of the same to Magenta so as not to impact ongoing manufacture or supply. Should Magenta not be satisfied with the services of Project Manager, Magenta may give notice of the same to Bachem and Bachem will assign a suitable replacement who is reasonably acceptable to Magenta within [***] of such notice. + +Section 4. COMPENSATION + +4.1 Generally. The fees to be paid to Bachem in connection with the Services shall be set forth in reasonable detail in each Project Plan. Bachem represents that it has included all of its costs, fees and expenses, including administrative overhead, in calculating the fee for the Services budget attached hereto as part of the applicable Project Plan, and that Magenta shall not be liable for or be charged for any other costs, fees or expenses of Bachem. No line item in any Project Plan budget shall be exceeded by Bachem without the prior written consent of Magenta. 4 + + + + + +CONFIDENTIAL TREATMENT REQUESTED. INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS OMITTED AND MARKED WITH "[***]". AN UNREDACTED VERSION OF THE DOCUMENT HAS ALSO BEEN FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION AS REQUIRED BY RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED. 4.2 Invoicing and Payment. Unless specifically agreed otherwise in writing by the Parties, including as agreed in a Project Plan, (i) all invoices and payments hereunder shall be in U.S. Dollars, (ii) payments will be made payable to Bachem at the address set forth in applicable Project Plan(s), and (iii) all undisputed payments shall be made within [***] of receipt of invoice by Magenta. + +4.3 Taxes. All prices are stated exclusive of VAT (or equivalent tax) that may or may not become due according to Applicable Law. Each Project Plan shall set forth an estimate of VAT that may become due thereunder and Bachem shall notify Magenta within a reasonable period of time upon becoming aware of a material deviation from such estimate. + +4.4 Bachem's Fees for Performance of Services. Bachem's fees for the performance of Services represent the entire cost for the provision of such Services. Magenta shall not be charged for any Service or deliverable that is not performed or delivered, as the case may be, in accordance with this Agreement or the applicable Project Plan(s). + +Section 5. BACHEM REPRESENTATIONS, WARRANTIES, AND CERTAIN COVENANTS + +5.1 Authority. Bachem represents and warrants mat it has full authority to enter into this Agreement and there is no provision contained in any other agreement to which it is party or arrangement or obligation to which it is bound that prohibits or restricts it from entering into or performing under this Agreement. + +5.2 Services. Bachem shall provide the Services in accordance with each Project Plan. Bachem will perform all Services in accordance with this Agreement and the agreed upon Specifications. All Products shall be packaged, labeled and shipped in accordance with this Agreement, the applicable Project Plan and all Applicable Laws. Bachem and its employees and agents have, and will continue to have, the knowledge, experience, facilities, equipment and skill to provide, and will provide, the Services in a professional and timely manner. Services will conform to consistently high standards of workmanship and the specifications applicable to each Project Plan. + +5.3 Material/Supplies. In situations where Magenta provides materials or supplies to Bachem in connection with this Agreement and/or a Project Plan(s), Bachem shall use such materials and supplies only in accordance with the applicable Project Plan for which it was received, and Bachem shall not use it for any other purpose. Bachem shall be responsible for all such materials and supplies provided by Magenta while they are in Bachem's control or the control of its agents, and Bachem shall promptly, at Magenta's direction, destroy or return to Magenta all unused quantities of its materials and supplies provided by Magenta. For the avoidance of doubt, Magenta shall retain title to all of its materials and supplies, including any API or intermediates, while it is in Bachem's facility (as of the Effective Date, this facility will [***]. Magenta shall be responsible for all such materials and supplies until delivered to Bachem at its facility. Any such materials or supplies shall be delivered in a timely manner and in accordance with the shipping instructions and specifications to be agreed upon by the Parties. 5 + + + + + +CONFIDENTIAL TREATMENT REQUESTED. INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS OMITTED AND MARKED WITH "[***]". AN UNREDACTED VERSION OF THE DOCUMENT HAS ALSO BEEN FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION AS REQUIRED BY RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED. 5.4 Deliverables. Each deliverable (including Product) developed or produced in connection with a Project Plan and this Agreement shall conform to the Specifications. The Development Work, as described in the Project Plan, shall conform to the Development Specifications. Bachem shall warrant compliance with the agreed acceptance criteria together with the results as reported on the Certificate of Analysis in conjunction with the analytical methods at the time of the release of Product. In no event shall Bachem be liable for any defects that could not have been detected by Bachem with the analytical test methods in operation at the date of product release. For reasons of clarity, the Parties acknowledge and agree that it shall remain solely the responsibility and liability of Magenta to determine the suitability of the Product for any intended or specific use of the Product. Bachem makes no expressed or implied guarantees, warranties or undertakings as to the use of the Product for an intended or specific purpose or use. + +5.5 Third Party IP. Bachem will not knowingly infringe or misappropriate any third party intellectual property rights in connection with the performance of its obligations hereunder. Materials delivered by Magenta to Bachem will not, to Magenta's knowledge, infringe any third party intellectual property rights. + +5.6 No Encumbrance. Bachem hereby (i) acknowledges and agrees that neither it, nor any of its affiliates or subsidiaries, nor any of its or their directors, officers, employees and agents has any interest in Magenta Pre-Existing Intellectual Property or Magenta Developed Intellectual Property (each as defined below) and (ii) covenants that it will not lien or encumber, or otherwise cause, permit or consent to the granting of a lien or encumbrance of Magenta Pre-Existing Intellectual Property or Magenta Developed Intellectual Property. + +5.7 Books and Records. Bachem shall maintain true, complete and accurate books, records, test and laboratory data, reports and all other information relating to Services performed and Product manufactured under this Agreement, including all information required to be maintained by Applicable Laws. + +5.8 Disclosures. Upon Magenta's reasonable request, Bachem shall also provide all information to Magenta that is specifically related to the Product and Services, including any information which is reasonably required to comply with any disclosure requirements of regulatory authorities. + +5.9 Regulatory Inspections. Bachem shall make its facilities and all records relating to the Product, and Services related thereto, available to the FDA or other regulatory authorities, as mutually agreed by the Parties, and shall notify Magenta immediately if the FDA or any other regulatory authority begins or schedules an inspection of Bachem's records, facilities, or manufacturing processes that are solely related to the Product or the Services related thereto. Bachem shall provide Magenta access to any documentation related to or resulting from each such inspection in accordance with the provisions of the Quality Agreement. If a regulatory authority in connection with a preapproval inspection of the Product inspects the Bachem facility used for production of Product, Bachem will notify Magenta in writing within [***] after learning of the inspection unless otherwise specified in the Quality Agreement. If an FDA Form 483 (or an equivalent foreign regulatory authority form) is issued in connection with the Product, Bachem will provide its proposed response to such Form 483 (or equivalent form) to Magenta 6 + + + + + +CONFIDENTIAL TREATMENT REQUESTED. INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS OMITTED AND MARKED WITH "[***]". AN UNREDACTED VERSION OF THE DOCUMENT HAS ALSO BEEN FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION AS REQUIRED BY RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED. for Magenta's review and (non-binding) input in accordance with the provisions of the Quality Agreement. Bachem will consider in good faith any comments and suggestions provided by Magenta with respect to such proposed response if received by Bachem in a timely manner. For the avoidance of doubt, nothing in this Agreement shall hinder Bachem from providing its answers to regulatory authorities within the timelines required by such authorities. + +5.10 Report of Noncompliance. In the event that an employee or agent of Bachem who is working on a Project Plan fails to comply with Applicable Laws, this Agreement or any applicable agreement as the same relates to the Services, and such failure is discovered by or comes to the attention of Bachem's COO or a supervisor of Bachem with respect to the applicable Project Plan, Bachem will immediately notify Magenta in writing. Appropriate action will be taken by Bachem at the direction of Magenta, after Bachem consults in good faith with Magenta, as to what actions might be undertaken by Bachem in view of the particular facts surrounding such noncompliance. + +5.11 Information. Upon request, Bachem shall provide to Magenta access to all information in Bachem's control that relates to the [***], Product and/or the Project Plan within a reasonable period of time. Copies of batch records will be provided on an electronic platform for a period of [***], or another period of time by mutual agreement of the Parties, and with restricted access rights only. + +5.12 Debarment. Bachem hereby certifies that it does not and shall not employ, contract with or retain any person directly or indirectly to perform Services under this Agreement or any Project Plan if such person is or has been debarred under 21 U.S.C. 335a (a) or (b) or other equivalent laws, rules, regulations or standards of any other relevant jurisdiction. Upon written request of Magenta, Bachem shall, [***], provide written confirmation that it has complied with the foregoing obligation. Bachem agrees to immediately disclose in writing to Magenta if any employee or agent is debarred, or if any action or investigation is pending or, to the best of Bachem's knowledge, is threatened in relation to the debarment of Bachem or any person performing Services in connection with this Agreement. + +5.13 Restrictions on Bachem. Bachem agrees to supply the Product(s) identified in each applicable Project Plan to Magenta pursuant to the terms and conditions of this Agreement and any applicable Project Plans. During the Initial Term and any Renewal Term, Bachem agrees not to sell, supply or otherwise distribute [***] for any clinical or commercial use to any Third Party without Magenta's prior written consent, for so long as Bachem remains Magenta's primary supplier of [***] for the Initial Term and any Renewal Term. + +5.14 Changes by Bachem. Bachem shall not make any major changes to the Development Specifications, the Specifications or any manufacturing process with a potential to adversely impact the quality of the Product in connection with a Project Plan without the prior written consent of Magenta. Notwithstanding, Magenta acknowledges and agrees that changes will be required for the development of the Product. Thus, during the development phase of a Product and up to the completion of the full validation of the manufacturing process of a Product, some quality assurance standards may not be fully implemented or applied in the manufacturing, release and supply of such Product. These limited quality assurance standards may relate to (i) the manufacturing and testing procedures in development and/or (ii) formalized 7 + + + + + +CONFIDENTIAL TREATMENT REQUESTED. INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS OMITTED AND MARKED WITH "[***]". AN UNREDACTED VERSION OF THE DOCUMENT HAS ALSO BEEN FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION AS REQUIRED BY RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED. Product specific procedures that may not be in place and generic procedures that may be applied instead and/or (iii) change control that may be less stringent during development and/or (iv) Product specific validation may not be available. However, Bachem will manufacture the Product according to applicable GMP guidelines as defined in the Quality Agreement. + +5.15 DMF/Amendment. Upon Magenta's reasonable request and order, Bachem will compile a DMF for the Product in cooperation and mutual agreement with Magenta. Bachem hereby grants to Magenta, at no additional cost, reference rights to the DMFs, which are necessary to support Magenta's regulatory submissions with respect to the Product. Bachem shall provide reasonable advance written notice to Magenta prior to amending any Bachem DMF that is referenced in a filed IND of Magenta or in a proposed IND filing of Magenta. Bachem will, at Magenta's expense, provide reasonable assistance as necessary so that the FDA (and/or equivalent foreign regulatory authority) can reference the relevant DMF. Bachem shall not permit the FDA or any other regulatory authority to reference its DMF in order to permit a Third Party to develop, manufacture or commercialize [***] or any products that incorporate [***] or compete with [***]. In the event that the Parties agree that Bachem will not file a DMF in connection with a Project Plan, Bachem shall instead fully cooperate with Magenta, and provide a quote (similar to the compiling of a DMF) to provide all information, data, and rights of reference reasonably required by Magenta in connection with its regulatory and governmental filings related to Product. + +5.16 Waste Disposal. Bachem shall generate, handle, store, ship and dispose of all wastes associated with its manufacture of Product in accordance with Applicable Laws. Notwithstanding the foregoing sentence, if any specially regulated waste must be removed pursuant to a given Project Plan, such specially regulated waste and the process for its removal shall be expressly set forth in such Project Plan. If the specially regulated waste is solely attributable to Magenta's Product and the Specifications and instructions for production of such Product, then unless the Parties otherwise agree, Magenta shall be responsible for the reasonable costs associated with the removal of such specially regulated waste. Such costs shall be included in the Project Plan or, if not specified therein, included in the price of the Services and Product. + +5.17 Audits. Magenta and its agents and designees shall have the right to audit Bachem's facilities, systems, records, procedures, and documentation related to this Agreement. In connection with any such audit, Bachem shall also provide Magenta access to its personnel. Magenta may conduct no more than one (1) technical visit and one (1) quality assurance audit per year, unless there is cause for an additional audit (i.e., a technical issue or quality issue). Such audits may be conducted upon reasonable notice during the term of this Agreement and for [***] thereafter. On-site technical discussions may also be requested and held at mutually agreeable times. + +5.18 Person-In-Plant. If reasonably requested by Magenta, at a mutually agreed day and time, Bachem will permit and provide working space for Magenta to staff one person on location at Bachem's premises, limited to no more than [***] days, during preparation for manufacturing and packaging of the Product. Such person shall be given reasonable access to all records, facilities and personnel working on any Services or Project Plans for the purpose or providing advice, coordinating reviews, approvals or any other actions required to ensure compliance with this Agreement to the extent that it does not compromise the confidentiality of other customers. 8 + + + + + +CONFIDENTIAL TREATMENT REQUESTED. INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS OMITTED AND MARKED WITH "[***]". AN UNREDACTED VERSION OF THE DOCUMENT HAS ALSO BEEN FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION AS REQUIRED BY RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED. 5.19 Quality Agreement. As reasonably required by Magenta in connection with Product manufacturing activities hereunder, Bachem shall enter into a written quality agreement with Magenta (the "Quality Agreement"). + +Section 6. ADDITIONAL PRODUCT SUPPLY TERMS + +6.1 Delivery. Unless otherwise agreed to between the Parties, delivery terms shall be DDP (Incoterms 2010) Magenta's facility located at 50 Hampshire Street, 8t h Floor, Cambridge, MA 02139, or such other destination as Magenta may instruct in writing, at which time risk of loss and responsibility for Product will transfer to Magenta. Bachem shall assume all risk and responsibility for handling, storing, rotating stock, packaging, loading and shipping all Product in accordance with applicable Incoterms. Bachem shall ship the Product in accordance with the applicable Project Plan. Delivery shall occur on the delivery dates set forth in each Project Plan and any related purchase orders or as otherwise agreed to in writing by the Parties. + +6.2 Acceptance and Rejection of Products. + +(a) Promptly following receipt of Product, Magenta shall have the right but not the obligation to test such Product to determine compliance with the Specifications. Magenta shall have [***] after receipt of the Product to notify Bachem in writing of any rejection of Product based on a sufficiently documented claim that the Product fails to meet the Specifications. In the event that Magenta does not inform Bachem within the [***] period that the Product does not meet the Specifications, Magenta shall be deemed to have accepted the Product. If there is no dispute between the Parties over a claim that the Product fails to meet the Specifications, Bachem shall (i) replace or (ii) with Magenta's prior written consent, reprocess or rework the rejected Product within an agreed upon time frame, after the notice of such rejection, and in any case as soon as reasonably possible after receiving such notice, provided that Magenta shall, at Bachem's expense, provide to Bachem sufficient quantities of supplies required to be supplied by Magenta under the relevant Project Plan, at no additional cost to Magenta (including transportation costs), and Bachem shall make arrangements with Magenta for the return or disposal of any rejected Product, such return shipping or disposal charges to be paid by Bachem. In the event of a discrepancy between Magenta's and Bachem's test results such that one Party's test results fall within relevant Specifications and the other Party's test results fall outside the relevant Specifications, or there exists a dispute between the Parties over the extent to which such failure is due to acts or omissions of Bachem, the Parties shall cause an independent GMP laboratory or appropriate experts promptly to review records, test data and perform comparative tests and/or analyses on samples of the alleged defective Product. Such independent laboratory shall be mutually agreed upon by the Parties. The independent laboratory's results shall be in writing and shall be final and binding save for manifest error. Unless otherwise agreed to by the Parties in writing, the costs associated with such testing and review shall be borne by the Party against whom the independent laboratory rules. 9 + + + + + +CONFIDENTIAL TREATMENT REQUESTED. INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS OMITTED AND MARKED WITH "[***]". AN UNREDACTED VERSION OF THE DOCUMENT HAS ALSO BEEN FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION AS REQUIRED BY RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED. (b) If Bachem shall fail to deliver to Magenta the full quantity of the Product as specified in a Project Plan by the delivery date specified therein, for any reason whatsoever other than a breach of this Agreement by Magenta, then at Magenta's election: (i) Bachem shall be relieved of any obligation to deliver the remaining quantity of the Product or (ii) Bachem shall deliver the remaining quantity of the Product as soon as reasonably possible after the date Magenta notifies Bachem of such election. Magenta and Bachem will agree upon the time period to deliver the remaining Product allowed under clause (ii) [***] of the missed delivery date (or, if applicable, the date on which Bachem notifies Magenta that such delivery will be late). + +6.3 Latent Defects; Contamination. + +(a) As soon as either Party becomes aware of a Latent Defect in any lot of Product, but in no case later than (i) within one (1) week after reaching such awareness or (ii) the end of the indicated retest period for the lot with the Latent Defect, whichever is earlier, it shall immediately notify the other Party. Bachem shall be fully responsible for all Latent Defects. At Magenta's election, the lot or batch with the Latent Defect shall be deemed rejected as of the date of such notice and the provisions of Section 6.2 shall apply. + +(b) Bachem shall be fully responsible for any Product and/or Product-related supplies that are adulterated, contaminated, damaged or destroyed while in Bachem's control. Bachem agrees, at the election of Magenta and in addition to any other remedies Magenta may have, to promptly replace such Product and/or Product-related supplies (as the case may be) or refund to Magenta the value of the Product or Product- related supplies. + +6.4 Stability, Record Keeping. Bachem shall retain such Product stability samples and keep manufacturing records, and any other records set forth in a Project Plan, for [***] from the expiration or termination of this Agreement. Bachem shall make accessible for review by Magenta during an audit or inspection, or following Product release by Bachem's Quality Assurance Department, either onsite or on an electronic platform with restricted access rights only (as reasonably requested by Magenta), at a mutually agreeable time, all specific Batch and lot records relevant to Bachem's performance hereunder, including written investigations of any deviations and "out-of-specification" events that may have been generated from manufacturing, packaging, inspection, or testing processes. + +6.5 CMC Responsibilities; Regulatory Submissions; Permits. Bachem shall be responsible for obtaining and maintaining, at its sole expense, any facility or other licenses or permits, and any regulatory approvals, necessary for the manufacture of Product, supply of Product, and performance of Services, all in accordance with the terms and conditions of this Agreement, At Magenta's request and expense, Bachem shall also compile the regulatory submissions documentation for the Product (i.e. CMC documentation and DMF) as reasonably requested by Magenta, including permitting the FDA to reference Bachem's DMF, once it is available, in connection with Magenta's IND. + +6.6 Recall. In the event of a recall of Product, Magenta shall be responsible for coordinating such recall. Magenta promptly shall notify Bachem if any Product is the subject of a recall and, to the extent required by Bachem, provide Bachem with a copy of all documents relating to such recall. Bachem shall cooperate fully with Magenta in connection with any recall. Magenta shall be responsible for all of the costs and expenses of such recall, except to the extent 10 + + + + + +CONFIDENTIAL TREATMENT REQUESTED. INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS OMITTED AND MARKED WITH "[***]". AN UNREDACTED VERSION OF THE DOCUMENT HAS ALSO BEEN FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION AS REQUIRED BY RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED. that Bachem is determined to be responsible for such recall. In such case, Bachem shall be responsible for such costs and expenses. Such determination of responsibility may be made by the governmental agency involved or by mutual agreement by the Parties following examination and review of all records pertinent to the manufacture of the Product subject to such recall. In case of shared responsibility, the costs should be allocated in accordance with each Party's share of responsibility. + +Section 7. TERM AND TERMINATION + +7.1 Term. This Agreement shall commence on the Effective Date and shall extend for a period of Five (5) years thereafter ("Initial Term"), unless this Agreement is terminated earlier as provided herein or is extended by mutual written agreement of the Parties. This Agreement may be renewed for additional periods of one (1) year (each such additional period, a "Renewal Term") unless either Party provides notice of nonrenewal upon not less than [***] prior written notice to the other Party. Notwithstanding the foregoing, each Project Plan may have separate term and termination provisions, so long as the term of any Project Plan does not extend beyond the Initial Term or a subsequent Renewal Term. + +7.2 Termination. This Agreement or any Project Plan may be terminated: + +(a) by Magenta for any reason upon [***] written notice to Bachem; + +(b) by either Party if the other Party materially breaches a provision of this Agreement or a Project Plan, and fails to cure such breach within [***] following receipt of written notification of such breach from the non-breaching Party; + +(c) by either Party, immediately, if the other Party becomes insolvent, is dissolved or liquidated, makes a general assignment for the benefit of its creditors, or files or has filed against it, a petition in bankruptcy that is not dismissed within sixty days after filing, or has a receiver appointed for a substantial part of its assets; and + +(d) by a Party or the Parties pursuant to Section 13. + +In the event of termination pursuant to Section 7.2(a) or a termination by Bachem pursuant to Section 7.2(b), Bachem shall be compensated for Services rendered up to the date of termination. In the event of any other termination, the Parties shall negotiate in good faith to determine the appropriate amount to be paid by Magenta to Bachem (or refunded to Magenta by Bachem, as the case may be), in light of the circumstances of such termination, in compensation for all Services rendered in accordance with this Agreement. In the event of Bachem's inability to supply the Product or a material breach by Bachem pursuant to Section 7.2(b), Bachem shall provide, without additional charge to Magenta, sufficient information and technology pertaining to its Services to Magenta and/or its technically competent designee, such that Magenta and/or its technically competent designee are enabled to continue Development Work and manufacture of the Product. The termination of any Project Plan may be independent of the termination of this Agreement. 11 + + + + + +CONFIDENTIAL TREATMENT REQUESTED. INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS OMITTED AND MARKED WITH "[***]". AN UNREDACTED VERSION OF THE DOCUMENT HAS ALSO BEEN FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION AS REQUIRED BY RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED. 7.3 Regulatory information and Compounds. On or before the effective date of any termination or expiration of this Agreement or upon the written request of Magenta, Bachem shall promptly transfer to Magenta all compounds and other materials and supplies provided to Bachem by or on behalf of Magenta in connection with this Agreement, as well as all works-in-process and raw materials purchased under a Project Plan. Upon the expiration or termination of this Agreement or upon the written request of Magenta, Bachem will also compile CMC documentation as provided for in the applicable Project Plan, which will contain all information necessary for Magenta for regulatory and manufacturing purposes related to the Product. The CMC documentation would also contain the information required for any competent Third Party manufacturing to assume manufacturing of the Product independently, if Magenta desires to transfer the process. Upon the request of and at the expense of Magenta, after termination of this Agreement, Bachem agrees to reasonably assist Magenta in identifying Third-Party manufacturers of the Product. If such termination is due to Bachem's inability to make the Product, or a material breach by Bachem pursuant to Section 7.2(b), Bachem will provide such assistance without charge. + +7.4 Project Plans in Progress. In the event of any termination or expiration of this Agreement, Bachem shall, upon the request of Magenta and notwithstanding the effective date of any termination or expiration, complete any Project Plans involving the manufacture of Product that were accepted by Bachem prior to such date, and Magenta shall pay Bachem for any Product produced or services completed, in accordance with the terms of the applicable Project Plans and this Agreement. If this Agreement is terminated by Magenta pursuant to Section 7.2(a) or by Bachem pursuant to Section 7.2(b) or (c), Magenta shall also pay to Bachem amounts for any services that cannot be reasonably stopped at the time of termination; provided, that, Bachem will take all reasonable steps necessary to wind down such work as promptly as practicable. + +7.5 Survival. The rights and obligations of each Party which by their nature survive the termination or expiration of this Agreement shall survive the termination or expiration of this Agreement, including Sections 4.2, 5, 6.3-6.6, 7.2-7.5, 8, 9, 10, 11, 12, 14, 15.1, 15.4-15.8, 15.10, 15.11 and 15.12. In addition, Bachem hereby acknowledges that neither expiration nor termination of this Agreement shall affect in any manner Magenta's right to manufacture and sell, or have manufactured and sold, the Product. + +Section 8. INTELLECTUAL PROPERTY + +8.1 Magenta Pre-Existing Intellectual Property. All intellectual property (including trademarks), including all data, information, know-how, reports and any and all related documentation, which are developed, generated or derived, directly or indirectly by or on behalf of Magenta prior to the Effective Date ("Magenta Pre-Existing Intellectual Property") shall remain the sole property of Magenta. + +8.2 Bachem Intellectual Property. All intellectual property (including trademarks), including all data, information, reports, manufacturing know- how and any and all related documentation, which are (a) developed, generated or derived, directly or indirectly by or on behalf of Bachem prior to the Effective Date or (b) any manufacturing know-how developed or generated by Bachem that is generally applicable to the field of peptide manufacturing and not specific to the Product or Magenta's Confidential Information (such items under the foregoing clauses (a) and (b), collectively, "Bachem Intellectual Property"), shall remain the sole property of Bachem. In the event that any Bachem Intellectual Property is incorporated into any 12 + + + + + +CONFIDENTIAL TREATMENT REQUESTED. INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS OMITTED AND MARKED WITH "[***]". AN UNREDACTED VERSION OF THE DOCUMENT HAS ALSO BEEN FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION AS REQUIRED BY RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED. deliverable (including Magenta Developed Intellectual Property (including Product)) or is otherwise necessary to fully exploit such deliverable, Bachem hereby grants to Magenta a perpetual, irrevocable, nonexclusive, worldwide, paid up, royalty-free license under such Bachem Intellectual Property (with the full right to sublicense directly or indirectly through multiple tiers) to (i) copy, distribute, display, perform and create derivative works of the Bachem Intellectual Property, in whole or in part; and (ii) to use Bachem Intellectual Property and/or practice the subject matter thereof, in each case solely in connection with manufacturing, marketing, promoting, using, selling, offering for sale, importing or distributing such deliverable (e.g., Product). Without limiting the foregoing, Magenta may use and disclose Bachem Intellectual Property to the extent necessary in connection with the prosecution, maintenance and enforcement of Magenta Developed Intellectual Property. + +8.3 Magenta Data. All data, images, information, documents, records in whatever form obtained, developed, recorded or compiled (i) in connection with this Agreement or any Project Plan that relates to the Development Work or the Product, including, but not limited to, its development, manufacture or use, expressly excluding any Bachem Intellectual Property, or (ii) based upon or utilizing Magenta Confidential Information (collectively, "Magenta Data") are and shall remain the sole and exclusive property of Magenta, and will be gathered, stored, secured, managed and maintained by Bachem in accordance with Applicable Laws. Bachem agrees to take such further acts as may be requested by Magenta in order to evidence the foregoing. Promptly upon the expiration or termination of this Agreement or any Project Plan, and otherwise upon Magenta's request, Bachem will promptly provide originals or a copy (as applicable) of all Magenta Data to Magenta in a form acceptable to Magenta, and, to the extent that Magenta so requests. Availability of batch records shall be provided as set forth in Section 5.11. At Magenta's request, Bachem will destroy all remaining Magenta Data in Bachem's possession or under Bachem's control, so long as not in contravention of Applicable Laws. Bachem will not utilize Magenta Data for any purpose other than the performance of Services, and will cease use of any Magenta Data after expiration or termination of this Agreement. Notwithstanding anything herein to the contrary, Bachem may retain any Magenta Data in electronically stored archives that cannot be deleted, subject to Bachem's document retention policies and to the terms of confidentiality and non- use set forth in this Agreement. + +8.4 Magenta's Developed Intellectual Property. Any invention (whether patentable or not), discoveries, improvements, works-of-authorship or other intellectual property made, conceived or reduced to practice by Bachem in connection with its performance under this Agreement or any Project Plan, which expressly excludes Bachem Intellectual Property ("Magenta Developed Intellectual Property"), shall be exclusively owned by Magenta. For the avoidance of doubt, Magenta Developed Intellectual Property includes Magenta Data. Bachem hereby assigns, and agrees to assign, to Magenta all of its right, title and interest to and in any Magenta Developed Intellectual Property, including all related intellectual property rights. Magenta grants to Bachem a limited, non-exclusive license to use any Magenta Developed Intellectual Property to manufacture and release the Product for Magenta in accordance with the terms and conditions of this Agreement and any applicable Project Plan. 13 + + + + + +CONFIDENTIAL TREATMENT REQUESTED. INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS OMITTED AND MARKED WITH "[***]". AN UNREDACTED VERSION OF THE DOCUMENT HAS ALSO BEEN FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION AS REQUIRED BY RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED. 8.5 Disclosure and Assignment. With respect to all Magenta Developed Intellectual Property, Bachem agrees (i) to disclose the same promptly to Magenta; (ii) to execute documents evidencing the rights of Magenta set forth in this Section 8; and (iii) upon the request of Magenta and at the sole expense, discretion and exclusive control of Magenta, to apply, or to assist and cooperate with Magenta in applying for, letters patent or like corresponding legal protection of any of the foregoing in the United States and all foreign countries (and for any extension, continuation, validation, reissue or renewal thereof). For that purpose, Bachem shall, and shall cause its employees and agents to, execute all papers necessary therefor, including assignments to Magenta or its nominee, without consideration, and also agrees without further consideration, but at Magenta's expense, to provide such information as may be required by Magenta and to assist Magenta, or its agents or designees, in the preparation and prosecution of any such patent application, the enforcement of any such resulting patent and the intellectual property protection of any such invention or discovery. + +Section 9. CONFIDENTIALITY + +9.1 Confidentiality Agreement. The Parties agree that the terms and provisions of this Agreement shall supersede all terms and provisions of that certain Confidentiality Agreement between the Parties dated February 9, 2016 (the "Confidentiality Agreement") and, as of the date hereof, the Confidentiality Agreement is hereby terminated and of no further force or effect. + +9.2 Confidential Information. As of the Effective Date, the Parties agree to treat all Confidential Information (as described herein) acquired by either of them from the other under this Agreement as being secret and confidential, and each Party agrees that it shall not, at any time, without the express written consent of the other Party, disclose to any third party any Confidential Information. Each Party agrees that it shall use the other Party's Confidential Information solely to conduct the activities contemplated under this Agreement and for no other purpose. Confidential Information of a Party shall only be disclosed to the those employees, agents and Affiliates of the other Party who have a need to know such Confidential Information and only to the extent necessary in order to fulfill the relevant Party's obligations under this Agreement, who have been informed of the confidential nature of such information and who are obligated by written agreement to comply with confidentiality provisions no less restrictive than those set forth in this Agreement. Notwithstanding the foregoing, Magenta may disclose Confidential Information of Bachem relating to a Project Plan(s), Services, or the manufacture of Product to entities with whom Magenta has or may have a marketing and/or development collaboration or partnership and who have a specific need to know such Confidential Information and who are bound by written agreements which contain restrictions regarding disclosure and use of such Confidential Information no less restrictive than those set forth herein. Each Party further agrees to take such reasonable precautions as it normally takes with its own Confidential Information to prevent any unauthorized disclosure or use of such Confidential Information. For the purposes of this Agreement, "Confidential Information" shall mean all confidential or proprietary materials or information not generally available to the public that is confidential and proprietary to Magenta or Bachem (as the case may be). Magenta's Confidential Information includes, but is not limited to, Magenta Pre-Existing Intellectual Property, Magenta Developed Intellectual Property, confidential information provided to Bachem prior to the date hereof, all information regarding Magenta's materials, processes, know-how, formulations, analytical procedures, clinical procedures, its INDs and any other regulatory filings, other information related to the Product or any other product that may or will be under development by Magenta and any other technical or business information of Magenta (in each case, expressly excluding 14 + + + + + +CONFIDENTIAL TREATMENT REQUESTED. INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS OMITTED AND MARKED WITH "[***]". AN UNREDACTED VERSION OF THE DOCUMENT HAS ALSO BEEN FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION AS REQUIRED BY RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED. Bachem Intellectual Property). Bachem's Confidential Information includes, but is not limited to, Bachem Intellectual Property, and all information regarding its business, customers, and price lists. As used in this Section 9, the Party in receipt of Confidential Information is the "Recipient" and the Party disclosing such information is the "Disclosing Party." + +9.3 Exceptions. The provisions of Section 9.2 shall not apply to any information disclosed hereunder that: + +(a) was known to Recipient prior to its date of disclosure by the Disclosing Party as evidenced by Recipient's written records; + +(b) is disclosed lawfully to Recipient either before or after the date of the disclosure by the Disclosing Party, without an obligation of confidentiality by a Third Party rightfully in possession of such information; + +(c) is published or generally known to the public, either before or after the date of disclosure by the Disclosing Party, through no act or omission on the part of Recipient; + +(d) is independently developed by Recipient without reference to or in reliance upon the Confidential Information of the Disclosing Party; and + +(e) is required to be disclosed by Recipient to comply with Applicable Laws, to defend or prosecute litigation, or to comply with governmental regulations; provided that Recipient provides prior written notice of such disclosure to the Disclosing Party and cooperates with the Disclosing Party to take reasonable and lawful actions to avoid and/or minimize the degree of such disclosure. + +9.4 Return of Confidential Information. Upon request by the Disclosing Party, Recipient shall promptly return to the Disclosing Party the originals and all copies of any Confidential Information then in the Recipient's possession or under the Recipient's control. Notwithstanding the foregoing, the Recipient may retain one (1) copy of such Confidential Information for legal archival purposes, provided that such copy shall be kept confidential after the termination or expiration of this Agreement. + +9.5 Handling and Reconstruction of and Access to Confidential Information. Bachem will establish and maintain rigorous safety and facility procedures, data security procedures and other safeguards against the destruction, loss, or alteration of Magenta's Confidential Information in the possession of Bachem. Bachem will be responsible for developing and maintaining procedures for the recovery and reconstruction of lost Confidential Information. Bachem will correct or remedy, at Magenta's request and sole discretion and at no charge to Magenta, any destruction, loss or alteration of any of Magenta's Confidential Information that occurs while such Confidential information is under the control of Bachem. Upon reasonable request by Magenta, Bachem will promptly retrieve any portion of Magenta's Confidential Information reasonably specified by Magenta. Magenta shall have the right to review and retain the entirety of, all computer or other files containing Magenta's Confidential Information. Bachem shall not withhold from Magenta any of Magenta's Confidential Information as a means of resolving a dispute. 15 + + + + + +CONFIDENTIAL TREATMENT REQUESTED. INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS OMITTED AND MARKED WITH "[***]". AN UNREDACTED VERSION OF THE DOCUMENT HAS ALSO BEEN FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION AS REQUIRED BY RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED. 9.6 Equitable Relief. In the event of a breach or threatened breach by a Party of any provision of Section 8 or 9 hereof, the other Party shall be authorized and entitled to obtain from any court of competent jurisdiction equitable relief, whether preliminary or permanent, including specific performance, in addition to any other rights or remedies to which such Party may be entitled in law or equity. + +9.7 Survival. The obligations of confidentiality set forth in this Agreement shall survive its termination or expiration for a period of [***]. + +Section 10. INSURANCE + +Bachem shall, during the Initial Term and any Renewal Terms, and [***] after the expiration of the last Product is delivered, obtain and maintain, at its own cost and expense and from a qualified insurance company, comprehensive general liability insurance including, but not limited to, contractual liability coverage and standard product liability coverage in an amount commensurate with industry standards. At Magenta's request, Bachem shall provide Magenta with proof of such coverage. Bachem shall provide, and shall cause its Affiliates and sublicensees who perform activities in connection with the manufacture of Product to provide, to Magenta, upon its reasonable request, a statement of coverages, amounts of insurance, and deductibles, and a copy of all policies including clauses within the policies that the insurance company has a duty to defend and indemnify. + +Section 11. INDEMNIFICATION + +11.1 By Magenta. Magenta agrees to indemnify, defend and hold harmless Bachem, its Affiliates, directors, officers, employees and agents from and against damages finally awarded or finally paid in settlement of any and all losses (including attorneys' fees and expenses), whether arising as a result of third party claims or a claim between the Parties ("Losses") arising out of or in connection with (i) the use or sale of the Product (ii) Magenta's labeling or improper handling and storage of Product, or (iii) any gross negligence, willful misconduct or misrepresentation by Magenta or material breach by Magenta of this Agreement, except to the extent that such Losses are attributable to the gross negligence or willful misconduct of or breach of this Agreement by Bachem. + +11.2 By Bachem. Bachem shall indemnify, defend and hold harmless Magenta, its Affiliates, directors, officers, employees and agents from and against Losses arising out of or in connection with: (i) any Product that does not meet the Specifications, (ii) Bachem's labeling or improper manufacturing, handling, use or storage of a Product, (iii) any gross negligence, willful misconduct or misrepresentation by Bachem or material breach by Bachem of this Agreement, or (iv) any Latent Defects in a Product, except to the extent that such Losses are attributable to the gross negligence or willful misconduct of or breach of this Agreement by Magenta. + +11.3 Limitation of Liability. NEITHER PARTY SHALL BE LIABLE, WHETHER BASED ON CONTRACT LAW, TORTS OR ANY OTHER AREA OF LAW, FOR ANY INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT OR ITS PERFORMANCE AND THE MAXIMUM TOTAL LIABILITY OF EITHER PARTY WHETHER BASED ON 16 + + + + + +CONFIDENTIAL TREATMENT REQUESTED. INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS OMITTED AND MARKED WITH "[***]". AN UNREDACTED VERSION OF THE DOCUMENT HAS ALSO BEEN FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION AS REQUIRED BY RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED. CONTRACT LAW, TORTS OR ANY OTHER AREA OF LAW SHALL BE LIMITED TO THE AMOUNT [***]. NOTWITHSTANDING THE FOREGOING, THESE LIMITATIONS SHALL NOT APPLY TO DAMAGES ARISING FROM A PARTY'S (I) INDEMNIFICATION OBLIGATIONS UNDER SECTION 11.1 OR SECTION 11.2 HEREOF, (II) GROSS NEGLIGENCE OR WILFUL MISCONDUCT, (III) BREACH OF ITS OBLIGATIONS UNDER SECTION 9 OR (IV) INFRINGEMENT OR MISAPPROPRIATION OF THE OTHER PARTY'S INTELLECTUAL PROPERTY. + +Section 12. PUBLICITY AND PUBLICATIONS + +Neither Magenta nor Bachem shall make any news release or other public statement, whether to the press or otherwise, disclosing the existence of this Agreement, the terms thereof or of any amendment thereto, or any Project Plan without the prior written approval of the other Party, except as required by Applicable Laws. To the extent, if any, that a Party concludes in good faith that it is required by Applicable Laws or regulations to file or register this Agreement or a notification thereof with any Governmental Authority, including the U.S. Securities and Exchange Commission, such Party may do so, and the other Party shall cooperate in such filing or notification and shall execute all documents reasonably required in connection therewith. In such situation, the filing Party shall request confidential treatment of sensitive provisions of the Agreement to the extent permitted by Applicable Laws. A Party may disclose this Agreement to a Third Party in connection with or in conjunction with a proposed merger, consolidation, sale of assets that include those related to this Agreement, an assignment of this Agreement or loan financing, raising of capital, or sale of securities; provided, however, that the disclosing Party obtains an agreement for confidential treatment thereof with a limitation on use solely for consideration of the relevant transaction. + +Section 13. FORCE MAJEURE + +If either Party shall be delayed or hindered in or prevented from the performance of any act required hereunder by reason of strike, lockouts, labor troubles, restrictive governmental or judicial orders or decrees, riots, insurrection, war, terrorist acts, acts of God, inclement weather or other reason or cause reasonably beyond such Party's control (each a "Force Majeure"), then performance of such act shall be excused for the period of such Force Majeure. The Party affected by the Force Majeure shall provide prompt written notice to the other Party of the commencement and termination of the Force Majeure. Should a Force Majeure continue for more than two (2) months, the Party unaffected by the Force Majeure may terminate this Agreement upon prior written notice to the affected Party. If the Force Majeure equally affects the ability of each Party to perform under this Agreement, then such termination shall only be by mutual written agreement. + +Section 14. NOTICES + +All notices or other communications that are required or permitted by this Agreement shall be in writing and shall be delivered personally, sent by fax (and promptly confirmed by overnight courier), sent by nationally recognized overnight courier, or sent by registered or certified mail, postage prepaid, return receipt requested, addressed as follows: 17 + + + + + +CONFIDENTIAL TREATMENT REQUESTED. INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS OMITTED AND MARKED WITH "[***]". AN UNREDACTED VERSION OF THE DOCUMENT HAS ALSO BEEN FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION AS REQUIRED BY RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED. If to Magenta: Magenta Therapeutics, Inc. Attn: [***] 50 Hampshire Street 8t h Floor Cambridge, MA 02139 [***] + +If to Bachem: Bachem Americas, Inc. Attn: [***] 3132 Kashiwa Street, Torrance, CA 90505 [***] + +All notices delivered pursuant to this Section 14 shall be considered delivered upon receipt by the intended recipient. + +Section 15. MISCELLANEOUS + +15.1 Further Actions. The Parties shall duly execute and deliver, or cause to be duly executed and delivered, such further instruments, and to do and cause to be done such further acts that may be necessary to carry out the provisions and purposes of this Agreement, notwithstanding any expiration or termination of this Agreement. + +15.2 Amendments; Assignment. This Agreement, including any Project Plans or other attachments, may not be altered, amended or modified except by a written document signed by both Parties. Bachem will not assign this Agreement without the prior written consent of Magenta, and any purported assignment in contravention of this Section 15.2 shall be null and void; provided, however, that either Party may assign this Agreement in connection with (i) the sale, transfer or other disposition of its assets related to this Agreement, (ii) a change in control of such Party, or (iii) the sale or transfer of substantially all of such Party's outstanding stock. + +15.3 Subcontracting. Bachem shall not assign, subcontract or delegate any of its rights or obligations under this Agreement without the express prior written authorization of Magenta, provided however, that Bachem may subcontract its rights and obligations hereunder to those subcontractors identified and agreed to by the Parties in the Quality Agreement. Bachem shall cause any such authorized subcontractor to be subject by contract to the same restrictions, exceptions, obligations, reports, termination provisions and other provisions contained in this Agreement and any applicable Project Plan(s). Bachem shall remain primarily obligated for all acts and omissions of any of its subcontractors as if Bachem had performed the subcontracted obligations itself, and shall guarantee the performance of the same. + +15.4 Successors; Assigns. This Agreement shall be binding upon and inure to the benefit of the Parties hereto and each of their respective successors and permitted assigns. + +15.5 Severability. All agreements and covenants contained herein are severable, and in the event any of them shall be held to be invalid by any competent court, this Agreement shall be interpreted as if such invalid agreements or covenants were not contained herein. + +15.6 Entire Agreement. This Agreement, including the attached Project Plans, constitutes the entire agreement between the Parties related to the subject matter hereof, and supersedes all prior communications, representations, or agreements, either verbal or written, between the Parties. Each Party confirms that it is not relying on any representations or warranties of the other Party except as specifically set forth herein. 18 + + + + + +CONFIDENTIAL TREATMENT REQUESTED. INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS OMITTED AND MARKED WITH "[***]". AN UNREDACTED VERSION OF THE DOCUMENT HAS ALSO BEEN FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION AS REQUIRED BY RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED. 15.7 Independent Contractor. This Agreement shall not be deemed to create any partnership, joint venture, or agency relationship between the Parties. Each Party shall act hereunder as an independent contractor, and its agents and employees shall have no right or authority under this Agreement to assume or create any obligation on behalf of, or in the name of, the other Party. All persons employed by a Party shall be employees of such Party and not of the other Party, and all costs and obligations incurred by reason of any such employment shall be for the account and expense of such Party. + +15.8 Waiver. The waiver by either Party of any right hereunder shall not be deemed a waiver of that same right in the future or a waiver of any other right hereunder. + +15.9 Counterparts. This Agreement may be executed by original or facsimile signature in two (2) or more counterparts, each of which shall be deemed an original, but all of which together shall constitute the same instrument. + +15.10 Headings. The headings used in this Agreement are for convenience only and are not a part of this Agreement. + +15.11 Governing Law. This Agreement will be construed and interpreted and its performance governed by the laws of the State of New York, without giving effect to its conflict of laws principles. The parties submit to the exclusive jurisdiction of the state and federal courts in New York for any suit, action or proceeding relating to this Agreement. + +15.12 Dispute Resolution. The parties shall attempt in good faith to resolve any dispute arising out of or relating to this Agreement promptly by negotiations between executives who have authority to settle the controversy. Any party may give the other party written notice of any dispute not resolved in the normal course of business. Within [***] after delivery of said notice, executives of both parties shall meet at a mutually acceptable time and place in the State of New York or as otherwise agreed and thereafter as often as they reasonably deem necessary to exchange relevant information and to resolve the dispute. Once the executive of either party determines that additional meetings are not likely to resolve the dispute, each of the parties shall be entitled to terminate such meetings and the dispute shall be submitted to binding arbitration. The binding arbitration shall be in accordance with the rules and procedures for commercial arbitration of the American Arbitration Association. Unless the parties to such dispute agree otherwise in writing, any such arbitration shall be conducted in New York pursuant to New York law, without any consideration of conflict of law issues, and the results of such arbitration shall be final and binding on the parties and enforceable in any court of competent jurisdiction. Notwithstanding the foregoing, the parties acknowledge and agree that each of them shall have the right to seek immediate injunctive and other equitable relief through the courts in the event of any material breach by the other party of any provision of this Agreement that would cause the non-breaching party irreparable injury for which there would be no adequate remedy at law. Any such legal proceeding will be brought in the applicable state or federal court of the State of New York, and the parties hereby consent to this exclusive jurisdiction for this purpose. + +* * * * * 19 + + + + + +CONFIDENTIAL TREATMENT REQUESTED. INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS OMITTED AND MARKED WITH "[***]". AN UNREDACTED VERSION OF THE DOCUMENT HAS ALSO BEEN FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION AS REQUIRED BY RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED. IN WITNESS WHEREOF, each of the Parties hereto has caused this Master Development and Manufacturing Agreement to be executed by its duly authorized representative as of the Effective Date. Magenta Therapeutics, Inc. + +By:/s/ Christina Isacson Name: Christina Isacson Title: CBO + +Bachem Americas, Inc. + +By:/s/ Brian Gregs Name: Brian Gregs Title: COO + +Acknowledged by Bachem AG + +By:/s/ Beat Sax Name: Beat Sax Title: Site Manager + +By:/s/ Boris Corpateaux Name: Boris Corpateaux Title: VP BD & Sales 20 + + + + + +CONFIDENTIAL TREATMENT REQUESTED. INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS OMITTED AND MARKED WITH "[***]". AN UNREDACTED VERSION OF THE DOCUMENT HAS ALSO BEEN FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION AS REQUIRED BY RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED. APPENDIX A + +List of Existing Project Plans [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] 21 + + + + + +CONFIDENTIAL TREATMENT REQUESTED. INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS OMITTED AND MARKED WITH "[***]". AN UNREDACTED VERSION OF THE DOCUMENT HAS ALSO BEEN FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION AS REQUIRED BY RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED. [Form of Amendment to Appendix A] + +AMENDMENT TO APPENDIX A + +This Amendment to Appendix A is dated as of [ ], 20[_], and made pursuant to Section 3.1 of the Master Development and Manufacturing Agreement (the "Master Agreement"), dated [ ] [ ], 20[ ], between Magenta Therapeutics, Inc. and Bachem Americas, Inc. In consideration of the mutual promises contained in the Master Agreement and for other good and valuable consideration, the receipt and adequacy of which each of the Parties does hereby acknowledge, the Parties hereby agree to amend Appendix A by adding the attached new Project Plan entitled [ ], which is designated as Project Plan A-[ ]. This Project Plan is effective as of [ ], 20[ ] and shall terminate on [ ], 20[ ], unless earlier terminated as permitted in the Master Agreement. + +Project Plan A-[ ] shall hereby be deemed incorporated into the Master Agreement referenced above. Magenta Therapeutics, Inc. + +By: Name: Title: + +Bachem Americas, Inc. + +By: Name: Title: 22 + + + + + +CONFIDENTIAL TREATMENT REQUESTED. INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS OMITTED AND MARKED WITH "[***]". AN UNREDACTED VERSION OF THE DOCUMENT HAS ALSO BEEN FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION AS REQUIRED BY RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED. APPENDIX B + +[***] [***] [***] Date Added [***] [***] Effective Date [***] [***] Effective Date [***] [***] Effective Date \ No newline at end of file diff --git a/full_contract_txt/MetLife, Inc. - Remarketing Agreement.txt b/full_contract_txt/MetLife, Inc. - Remarketing Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..876b3caf310ea22fa751703cec4bee016edd1900 --- /dev/null +++ b/full_contract_txt/MetLife, Inc. - Remarketing Agreement.txt @@ -0,0 +1,607 @@ +Exhibit 99.1 + +EXECUTION VERSION + +METLIFE, INC. + +Series E Senior Component Debentures, Tranche 1, due 2018 Series E Senior Component Debentures, Tranche 2, due 2045 + +REMARKETING AGREEMENT + +August 26, 2014 + +Deutsche Bank Securities Inc. 60 Wall Street New York, New York 10005 + +Ladies and Gentlemen: + +This Remarketing Agreement is dated as of August 26, 2014 (this "Remarketing Agreement"), among MetLife, Inc., a Delaware corporation (the "Company"), and Deutsche Bank Securities Inc. ("Deutsche Bank") (the "Remarketing Agents," which expression shall include any institution appointed as a Remarketing Agent in accordance with Section 8 hereof), and Deutsche Bank Trust Company Americas, not individually but solely as Stock Purchase Contract Agent (as defined below) and as attorney-in-fact of the holders of Stock Purchase Contracts (as defined below). The Company and the Remarketing Agents will enter into a Pricing Agreement, to be dated the Remarketing Date (as defined below) (the "Pricing Agreement"), which will set forth, inter alia, the final terms of the Remarketed Securities (as defined below) and the Remarketing Fee (as defined below). The Remarketing Agents are undertaking to remarket Series E Senior Component Debentures, Tranche 1, due 2018 (principal amount $1,000 per Series E Senior Component Debenture) (the "First Tranche Series E Debt Securities") and Series E Senior Component Debentures, Tranche 2, due 2045 (principal amount $1,000 per Series E Senior Component Debenture) (the "Second Tranche Series E Debt Securities"), whose terms will each be modified in the event of a Successful Remarketing (as defined below), as provided in the notice of remarketing from the Company, dated August 26, 2014 (the "Notice") pursuant to Section 3.3(a) of the Twenty-Second Supplemental Indenture (as defined below) and Section 5.2(a)(iv) of the Stock Purchase Contract Agreement (as defined below) (such securities, as so modified from and after a Successful Remarketing (whether or not such securities were remarketed by the Remarketing Agents), the "Securities"). Upon a Successful Remarketing, the Stated Maturity (as defined in the Indenture (as defined below)) of the First Tranche Series E Debt Securities will, effective October 8, 2014, automatically be adjusted to December 15, 2017 and the Stated Maturity of the Second Tranche Series E Debt Securities will, effective October 8, 2014, automatically be adjusted to December 15, 2044. + + + + + +The First Tranche Series E Debt Securities and Second Tranche Series E Debt Securities will be component securities of the Series E Senior Debentures due 2045 ("Series E Debt Securities") issued by the Company, pursuant to an Indenture, dated as of November 9, 2001 (the "Base Indenture"), between the Company and The Bank of New York Mellon Trust Company, N.A. (as successor in interest to J.P. Morgan Trust Company, National Association (as successor to Bank One Trust Company, N.A.)), as trustee (the "Trustee"), as supplemented by the Twenty- Second Supplemental Indenture, dated as of November 1, 2010 (the "Twenty-Second Supplemental Indenture" and, together with the Base Indenture, the "Indenture"), between the Company and the Trustee. Effective on September 15, 2014, the Series E Debt Securities will automatically convert, without any act of any holder, into units consisting of two tranches, with each $2,000 principal amount of Series E Debt Securities thereafter consisting of $1,000 principal amount of First Tranche Series E Debt Securities and $1,000 principal amount of Second Tranche Series E Debt Securities. + +A 1/40t h or 2.50% undivided beneficial ownership interest in each Series E Debt Security having a principal amount of $1,000 is part of a common equity unit (each, a "Unit"), which currently includes one stock purchase contract (the "Stock Purchase Contract") which was issued pursuant to the Stock Purchase Contract Agreement, dated as of November 1, 2010, as amended and supplemented by Supplemental Agreement No. 1, dated June 26, 2013, between the Company and the Stock Purchase Contract Agent (as so amended and supplemented, the "Stock Purchase Contract Agreement"), between the Company and Deutsche Bank Trust Company Americas, as stock purchase contract agent (the "Stock Purchase Contract Agent"), and under which the holder of the Unit is obligated to purchase from the Company on the Third Stock Purchase Date (as defined in the Stock Purchase Contract Agreement), for $25.00 per Stock Purchase Contract, a number of shares of common stock, par value $0.01 per share, of the Company (the "Common Stock"), equal to the applicable Settlement Rate as set forth in the Stock Purchase Contract Agreement. The ownership interests in the Series E Debt Securities or, if the holder has stripped such Unit, designated zero-coupon U.S. Treasury Securities, have been pledged to secure the obligations to purchase Common Stock on the Third Stock Purchase Date (as defined in the Stock Purchase Contract Agreement) pursuant to the Stock Purchase Contract. The terms and conditions of such pledge are set forth in the Pledge Agreement, dated as of November 1, 2010 (the "Pledge Agreement"), among the Company, Deutsche Bank Trust Company Americas, as collateral agent (the "Collateral Agent"), custodial agent (the "Custodial Agent") and securities intermediary (the "Securities Intermediary"), and the Stock Purchase Contract Agent. + +The Units were initially issued in a private placement to AM Holdings LLC (f/k/a ALICO Holdings LLC), a Delaware limited liability company (the "Selling Securityholder"), as part of the consideration paid by the Company to the Selling Securityholder in connection with the Company's acquisition of American Life Insurance Company and Delaware American Life Insurance Company from the Selling 2 + + + + + +Securityholder and American International Group, Inc. (the "Acquisition"). The Acquisition was completed on November 1, 2010. The Units were offered and sold by the Selling Securityholder in a registered public offering completed on March 8, 2011. + +Capitalized terms used and not defined in this Remarketing Agreement shall have the meanings set forth in the Stock Purchase Contract Agreement, the Pledge Agreement or the Indenture, as the case may be. + +The Remarketing (as defined below) of the First Tranche Series E Debt Securities and Second Tranche Series E Debt Securities is provided for in Article III of the Twenty-Second Supplemental Indenture. As used in this Remarketing Agreement, "Transaction Documents" shall mean, collectively, the Stock Purchase Contract Agreement, the Indenture, the Pledge Agreement, this Remarketing Agreement and the Pricing Agreement; the term "Remarketed Securities" means the First Tranche Series E Debt Securities and Second Tranche Series E Debt Securities subject to the Remarketing as notified to the Remarketing Agents by the Collateral Agent and the Custodial Agent, on or prior to the Remarketing Date; the term "Remarketing Procedures" means the procedures in connection with the Remarketing, described in the Stock Purchase Contract Agreement, the Pledge Agreement and the Twenty-Second Supplemental Indenture, as the case may be; the term "Remarketing" means the remarketing, offering, sale and delivery of the Remarketed Securities pursuant to the Remarketing Procedures; the term "Remarketing Date" means the date on which the Remarketing Agents price the Remarketed Securities in connection with the Remarketing, such date to occur on a Business Day (as defined below) during the period that begins on, and includes, September 25, 2014 and ends on, and includes, October 7, 2014; the term "Remarketing Settlement Date" means the date on which the purchase and sale of the Remarketed Securities closes and the delivery of such Remarketed Securities is made against payment therefor, such date to occur on a Business Day during the period that begins on, and includes, October 1, 2014 and ends on, and includes, October 8, 2014; and the term "Successful Remarketing" means a Remarketing that (i) was conducted in accordance with Article III of the Twenty-Second Supplemental Indenture; and (ii) results in (a) the sale of each Remarketed Security that is subject to such Remarketing by the Remarketing Agents by no later than 4:00 P.M., New York City time, on the Remarketing Settlement Date of such Remarketing; (b) the delivery of the aggregate cash gross proceeds from such sale to such Remarketing Agents no later than 4:00 P.M., New York City time, on such Remarketing Settlement Date; and (c) aggregate cash gross proceeds of not less than the Remarketing Price (as defined below) for such Remarketing. + +As used herein, "Business Day" means any day other than a Saturday, Sunday or other day on which banking institutions in New York, New York are authorized or required by law or executive order to remain closed. + +1. Appointment and Obligations of the Remarketing Agents. (a) The Company hereby appoints Deutsche Bank as the initial Remarketing Agent, and Deutsche 3 + + + + + +Bank hereby accepts appointment as Remarketing Agent, for the purpose of (i) Remarketing the Remarketed Securities on behalf of the holders thereof, (ii) establishing the Reset Rates (as defined below) for the Securities in connection with the Remarketing and (iii) performing such other duties as are assigned to the Remarketing Agents in the Remarketing Procedures, all in accordance with and pursuant to the Remarketing Procedures. + +(b) The Remarketing Agents agree (i) to use commercially reasonable efforts to remarket the Remarketed Securities tendered or deemed tendered to the Remarketing Agents in the Remarketing, (ii) to establish the Reset Rates in accordance with the Remarketing Procedures and to notify the Company, the Trustee and the Stock Purchase Contract Agent promptly of the Reset Rates and (iii) to carry out such other duties as are assigned to the Remarketing Agents in the Remarketing Procedures, all in accordance with the provisions of the Remarketing Procedures. + +(c) On the Remarketing Date, the Remarketing Agents shall use their commercially reasonable efforts to remarket the Remarketed Securities tendered or deemed tendered for purchase, at a price which results in cash proceeds equal to at least the sum of (i) the remarketing fee to be paid to the Remarketing Agents in connection with the Remarketing in an amount to be specified in the Pricing Agreement (such fee, the "Remarketing Fee"), (ii) 100% of the aggregate principal amount of such Remarketed Securities, (iii) the accrued and unpaid interest to, but not including, the Initial Scheduled Third Stock Purchase Date on such Remarketed Securities and (iv) the product of five basis points (0.05%) and the aggregate principal amount of such Remarketed Securities (such sum, the "Remarketing Price"). + +(d) On the Remarketing Date, the Remarketing Agents shall determine the rate per annum, rounded to the nearest one-thousandth of one percent (0.001%), that each tranche of Securities should bear (which rate will apply to all Securities of the applicable tranche whether or not such Securities were included in the Remarketing) (the "Reset Rate") in order for each tranche of the Remarketed Securities to generate cash proceeds from the Remarketing equal to at least the Remarketing Price allocable to that tranche and that in the sole reasonable discretion of the Remarketing Agents will enable them to remarket all Remarketed Securities of such tranche tendered or deemed tendered for purchase in such Remarketing at no less than the Remarketing Price allocable to that tranche; provided, that, each such Reset Rate need not, but may, be the same for each tranche of Securities; provided, however, that, unless such requirement has been validly waived by the Company, the Reset Rate may not exceed the prevailing market yield, as determined by the Remarketing Agents, of the benchmark U.S. treasury security having a remaining maturity that most closely corresponds to the period from the Remarketing Settlement Date until the Stated Maturity of the applicable tranche of the Securities (after giving effect to the change in the Stated Maturity of each tranche of the Securities on the Remarketing Settlement Date pursuant to the Indenture), plus 750 basis points per annum; provided, further, that neither Reset Rate may be less than 0% per annum. 4 + + + + + +(e) In the event of a Remarketing that is not a Successful Remarketing, the Remarketing Agents shall promptly remit (i) to the Custodial Agent the Remarketed Securities, if any, that are no longer a component of the Units ("Separate Securities"), and (ii) to the Collateral Agent the balance of the Remarketed Securities. + +(f) By no later than 4:30 P.M., New York City time, on the Remarketing Settlement Date, provided that there has been a Successful Remarketing, the Remarketing Agents shall advise, by telephone, the Company, the Stock Purchase Contract Agent and the Trustee that the Remarketing was a Successful Remarketing and of the Reset Rates determined in the Remarketing and the aggregate principal amount of Remarketed Securities sold in the Remarketing. + +(g) In accordance with The Depository Trust Company's (the "Depositary") normal procedures, on the Remarketing Settlement Date, the transactions described above with respect to each Remarketed Security tendered for purchase and sold in the Remarketing shall be executed through the Depositary, and the accounts of the respective Depositary participants shall be debited and credited and such Remarketed Securities delivered by book-entry as necessary to effect purchases and sales of such Remarketed Securities. + +(h) On the Remarketing Settlement Date, the tender and settlement procedures set forth in this Section 1, including provisions for payment by purchasers of the Remarketed Securities in the Remarketing, shall be subject to modification to the extent required by the Depositary or, if the book- entry system is no longer available for the Remarketed Securities at the time of the Remarketing, to facilitate the tendering and remarketing of the Remarketed Securities in certificated form. In addition, the Remarketing Agents may modify the settlement procedures set forth herein in order to facilitate the settlement process. + +(i) On the Remarketing Settlement Date, the Remarketing Agents shall deduct the Remarketing Fee from the gross proceeds of the Remarketing and shall remit any proceeds remaining after such deduction as follows: (i) to the extent such net proceeds relate to Remarketed Securities that form part of any Normal Common Equity Unit (as defined in the Stock Purchase Contract Agreement), to the Securities Intermediary and (ii) to the extent such net proceeds relate to the Separate Securities that were included in the Remarketing as Remarketed Securities to, or at the direction of, the Custodial Agent for payment to the holders of such Separate Securities. Holders whose First Tranche Series E Debt Securities and Second Tranche Series E Debt Securities are remarketed pursuant to this Remarketing Agreement will not otherwise be responsible for the payment of any Remarketing Fee in connection therewith. 5 + + + + + +(j) If fewer than all of the Remarketed Securities are remarketed in accordance with the terms hereof, the Remarketing shall be deemed to have failed as to all Remarketed Securities. + +(k) If at any time during the term of this Remarketing Agreement, any Event of Default (as defined in the Indenture) or event that with the passage of time or the giving of notice or both would become such an Event of Default has occurred and is continuing under the Indenture, then the obligations and duties of the Remarketing Agents under this Remarketing Agreement shall be suspended until such default or event has been cured. The Company will promptly cause the Trustee, the Stock Purchase Contract Agent and the Collateral Agent to give the Remarketing Agents notice of all such defaults and events of which such trustee or agent is aware. + +2. Representations and Warranties of the Company. The Company hereby represents and warrants that, unless otherwise specified (i) on and as of the Applicable Time (as defined below) (to the extent such representations and warranties are applicable as of such date), (ii) on and as of the Remarketing Date and (iii) on and as of the Remarketing Settlement Date that: + +(a) The Company has filed with the Securities and Exchange Commission (the "Commission") a registration statement on Form S-3 (No. 333-192366) under the Securities Act of 1933, as amended (the "Act"), which has become effective covering, inter alia, the Remarketing of the Remarketed Securities. The Company meets the requirements for use of Form S-3 under the Act. The Company proposes to file with the Commission pursuant to Rule 424 under the Act a supplement or supplements to the form of prospectus included in such registration statement relating to the Remarketed Securities and the plan of distribution thereof. Such registration statement, including the exhibits thereto, as amended at the Remarketing Date, is hereinafter called the "Registration Statement"; the Registration Statement at the time it originally became effective is herein called the "Original Registration Statement"; such prospectus in the form in which it appears in the Original Registration Statement is hereinafter called the "Base Prospectus"; and such supplemented form of prospectus, in the form in which it shall first be filed with the Commission pursuant to Rule 424 (including the Base Prospectus as so supplemented), is hereinafter called the "Final Prospectus." Any preliminary form of the Final Prospectus in the form in which it shall first be filed with the Commission pursuant to Rule 424 is hereinafter called a "Preliminary Prospectus." Any reference herein to the Registration Statement, the Base Prospectus, any Preliminary Prospectus, the Pricing Prospectus (as defined below) or the Final Prospectus shall be deemed to refer to and include the documents incorporated by reference therein pursuant to Item 12 of Form S-3 which were filed under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), on or before the Remarketing Date, or the issue date of the Base 6 + + + + + +Prospectus, any Preliminary Prospectus, the Pricing Prospectus or the Final Prospectus, as the case may be; and any reference herein to the terms "amend," "amendment" or "supplement" with respect to the Registration Statement, the Base Prospectus, any Preliminary Prospectus, the Pricing Prospectus or the Final Prospectus shall be deemed to refer to and include any document filed under the Exchange Act after the date of this Remarketing Agreement, or the issue date of the Base Prospectus, any Preliminary Prospectus, the Pricing Prospectus or the Final Prospectus, as the case may be, deemed to be incorporated therein by reference; each Preliminary Prospectus, the Pricing Prospectus and the prospectuses filed as part of the Registration Statement as originally filed or as part of any amendment thereto, or filed pursuant to Rule 424 under the Act, complied or will comply, as applicable, when so filed in all material respects with the Act and the rules thereunder and each Preliminary Prospectus, the Pricing Prospectus and the Final Prospectus delivered to the Remarketing Agents for use in connection with this offering will be identical to the electronically transmitted copies thereof filed with the Commission via the Electronic Data Gathering, Analysis and Retrieval ("EDGAR") system, except to the extent permitted by Regulation S-T. + +(b) (i) The Registration Statement, as amended as of any such time, and the Final Prospectus, as amended or supplemented as of any such time, and, in the case of Securities issued pursuant to the Indenture, such Indenture, will comply in all material respects with the applicable requirements of the Act, the Exchange Act and the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), as applicable, and the respective rules thereunder; + +(ii) (A) The Registration Statement does not and will not, as of the applicable effective date as to each part of the Registration Statement, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein not misleading and (B) the Final Prospectus does not and will not, as of its date and as of its filing date, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that for each of (A) and (B), the Company makes no representations or warranties as to (i) that part of the Registration Statement which shall constitute the trustee's Statement of Eligibility and Qualification (Form T-1) under the Trust Indenture Act or (ii) the information contained in or omitted from the Registration Statement or the Final Prospectus in reliance upon and in conformity with information relating to any Remarketing Agent furnished in writing to the Company by such Remarketing Agent expressly for use in the Registration Statement and the Final Prospectus; 7 + + + + + +(iii) As of the Applicable Time, the Issuer Free Writing Prospectus(es) (as defined below) listed on Schedule 1 hereto, if any, the Pricing Prospectus (as defined below), and the final term sheet relating to the Remarketed Securities set forth as Annex A to the Pricing Agreement (the "Final Term Sheet"), all considered together (collectively, the "Disclosure Package"), will not include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; and + +(iv) As of the Applicable Time, each Issuer Free Writing Prospectus listed on Schedule 1 hereto, if any, will not conflict with the information contained or incorporated by reference in the Registration Statement or the Disclosure Package, and each such Issuer Free Writing Prospectus, as supplemented by and taken together with the Disclosure Package and any other such Issuer Free Writing Prospectus, in each case as of the Applicable Time, will not include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; provided, however, it is understood and agreed that in no event shall any such Issuer Free Writing Prospectus, including but not limited to any electronic roadshow, be listed on Schedule 1 hereto unless the Company (i) has consented to the use thereof and (ii) shall have approved its contents before any such use, in each case in accordance with the provisions of this Remarketing Agreement. + +As used in this subsection and elsewhere in this Remarketing Agreement: + +"Applicable Time" means such time as is specified as the "Applicable Time" in the Pricing Agreement or such other time as agreed by the Company and the Remarketing Agents. + +"Issuer Free Writing Prospectus" means any "issuer free writing prospectus," as defined in Rule 433 under the Act ("Rule 433"), relating to the Remarketed Securities. + +"Pricing Prospectus" means the Base Prospectus, as amended or supplemented (including by any Preliminary Prospectus) immediately prior to the Applicable Time. 8 + + + + + +(c) At the time the Company or another offering participant first made a bona fide offer (within the meaning of Rule 164(h)(2) under the Act) of the Securities, the Company was not an "ineligible issuer" as defined in Rule 405 under the Act. + +(d) The Company has not distributed and will not distribute, prior to the later of the Remarketing Settlement Date and the completion of the Remarketing Agents' distribution of the Remarketed Securities, any offering material in connection with the Remarketing of the Remarketed Securities other than the Preliminary Prospectus, the Final Prospectus or any Issuer Free Writing Prospectus reviewed and consented to by the Remarketing Agents as provided in Section 3(j) of this Remarketing Agreement. + +(e) (i) At the time of filing the Registration Statement, (ii) at the time of the most recent amendment thereto for the purposes of complying with Section 10(a)(3) of the Act (whether such amendment was by post-effective amendment, incorporated report filed pursuant to Section 13 or 15(d) of the Exchange Act or form of prospectus), (iii) at the time the Company or any person acting on its behalf (within the meaning, for this clause only, of Rule 163(c) under the Act) relied on the exemption of Rule 163 under the Act, and (iv) as of the date and time that the Pricing Agreement is executed (the "Execution Time"), the Company was and will be a "well known seasoned issuer" as defined in Rule 405 under the Act. The Registration Statement is an "automatic shelf registration statement," as defined in Rule 405 under the Act, that automatically became effective not more than three years prior to the Execution Time; the Company has not received from the Commission any notice pursuant to Rule 401(g)(2) under the Act objecting to use of the automatic shelf registration statement and the Company has not otherwise ceased to be eligible to use the automatic shelf registration statement. The Company has paid or shall pay the required Commission filing fees relating to the Remarketed Securities within the time required by Rule 456(b)(1) under the Act and otherwise in accordance with Rules 456(b) and 457(r) under the Act. + +(f) Each document incorporated or deemed to be incorporated by reference in the Registration Statement, the Disclosure Package and the Final Prospectus, when they became effective or at the time they were or hereafter are filed with the Commission, complied and will comply in all material respects with the Act or the Exchange Act, as applicable. + +(g) Neither the Company nor any Significant Subsidiary (as defined below) of the Company has sustained since the date of the latest audited financial statements included or incorporated by reference in the Disclosure Package any loss or interference material to the business of the Company and its subsidiaries considered as a whole, other than as described in or contemplated by 9 + + + + + +the Disclosure Package, from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree; and, since the respective dates as of which information is given in the Disclosure Package, other than as described or contemplated in the Disclosure Package, there has not been any (i) material addition, or development involving a prospective material addition, to the liability of any Significant Subsidiary for future policy benefits, policyholder account balances and other claims, other than in the ordinary course of business, (ii) material decrease in the surplus of any Significant Subsidiary or material change in the capital stock or other ownership interests (other than issuances of common stock upon the exercise of outstanding employee stock options or pursuant to existing employee compensation plans or on the conversion or exchange of convertible or exchangeable securities outstanding on the date of this Remarketing Agreement) of the Company or any Significant Subsidiary or any material increase in the long- term debt of the Company or its subsidiaries, considered as a whole, or (iii) material adverse change, or development involving a prospective material adverse change, in or affecting the business, financial position, reserves, surplus, equity or results of operations (in each case considered either on a statutory accounting or U.S. generally accepted accounting principles ("GAAP") basis, as applicable) of the Company and its subsidiaries considered as a whole. As of December 31, 2013, the subsidiaries of the Company that would qualify as a "Significant Subsidiary" of the Company under Regulation S-X were Metropolitan Life Insurance Company ("MLIC"), MetLife Insurance Company of Connecticut, MetLife Investors USA Insurance Company, Exeter Reassurance Company, Ltd., MetLife Insurance K.K., American Life Insurance Company, MetLife Mexico S.A. and MetLife Reinsurance Company of Charleston, and each of such subsidiaries will be considered a "Significant Subsidiary" for purposes of this Agreement. + +(h) The Company and each Significant Subsidiary has good and marketable title in fee simple to all material real property and good and marketable title to all material personal property owned by it, in each case free and clear of all liens, encumbrances and defects that materially interfere with the use made and proposed to be made of such property by the Company or any Significant Subsidiary, except such as are described in the Disclosure Package or such as would not have a material adverse effect on the business, financial position, equity, reserves, surplus or results of operations of the Company and its subsidiaries, considered as a whole ("Material Adverse Effect"), and any material real property and material buildings held under lease by the Company or any of its subsidiaries are held under valid, subsisting and enforceable leases with such exceptions that do not materially interfere with the use made and currently proposed to be made of such property and buildings by the Company or any Significant Subsidiary. 10 + + + + + +(i) The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Delaware, with power and authority (corporate and other) to own its properties and conduct its business as described in the Disclosure Package and has been duly qualified as a foreign corporation for the transaction of business and is in good standing under the laws of each other jurisdiction in which its ownership or lease of property or the conduct of its business requires such qualification and good standing, except to the extent that the failure to be so qualified and in good standing would not have a Material Adverse Effect; MLIC was duly converted from a mutual life insurance company to a stock life insurance company on April 7, 2000 in accordance with the Plan of Reorganization of MLIC under Section 7312 of the New York Insurance Law; each Significant Subsidiary is validly existing as a corporation and is in good standing under the laws of its jurisdiction of incorporation, with power and authority (corporate and other) to own its properties and conduct its business as described in the Disclosure Package; and each Significant Subsidiary is duly qualified as a foreign corporation for the transaction of business and is in good standing under the laws of each other jurisdiction in which its ownership or lease of property or the conduct of its business requires such qualification and good standing, except to the extent that the failure to be so qualified and in good standing would not have a Material Adverse Effect. + +(j) The Company had or has, as applicable, the corporate power and authority to execute and deliver each Transaction Document and the Securities and to consummate the transactions contemplated hereby and thereby. + +(k) The Company has an authorized capitalization as set forth and described in the Disclosure Package, and all of the issued shares of capital stock of the Company have been duly authorized and validly issued and are fully paid and nonassessable; none of the outstanding shares of capital stock of the Company was issued in violation of the preemptive or other similar rights of any securityholder of the Company; except as disclosed in the Disclosure Package, there are no outstanding options or warrants to purchase, or any preemptive rights or other rights to subscribe for or to purchase, any securities or obligations convertible into or any contracts or commitments to sell shares of the Company's capital stock or any such options, rights, warrants, convertible securities or obligations; the description of the Company's stock option plans and the options or other rights granted and exercised thereunder set forth in the Disclosure Package accurately and fairly describe the information required to be shown with respect to such plans, arrangements, options and rights; except as disclosed in the Disclosure Package, there are no rights of any person, corporation or other entity to require registration of any shares of common stock or any other securities of the Company in connection with the filing of the Registration Statement and the 11 + + + + + +Remarketing of the Remarketed Securities by the Remarketing Agents pursuant to this Remarketing Agreement and the Pricing Agreement; all of the issued shares of capital stock or other ownership interests of MLIC have been duly and validly authorized and issued, are fully paid and nonassessable and are owned directly or indirectly by the Company free and clear of all liens, encumbrances, equities or claims. + +(l) Each Transaction Document has been duly authorized by the Company and has been or, at the Remarketing Settlement Date, will have been duly executed and delivered, will conform in all material respects to the description thereof in the Disclosure Package and the Final Prospectus, and each Transaction Document other than this Remarketing Agreement and the Pricing Agreement constitutes or, at the Remarketing Settlement Date, will constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance with its terms, subject, as to enforcement, to bankruptcy, insolvency, fraudulent transfer, moratorium and other similar laws relating to or affecting creditors' rights generally and to general principles of equity; and the Indenture has been duly qualified under the Trust Indenture Act. + +(m) The Series E Debt Securities have been duly authorized, executed, authenticated, issued and delivered and constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance with their terms, subject, as to enforcement, to bankruptcy, insolvency, fraudulent transfer, moratorium and other similar laws relating to or affecting creditors' rights generally and to general principles of equity, and are entitled to the benefits provided by the Indenture; the Series E Debt Securities are, and the First Tranche Series E Debt Securities and the Second Tranche Series E Debt Securities will be, substantially in the form contemplated by the Indenture. + +(n) The Securities have been duly authorized and will, on the Remarketing Settlement Date, have been duly executed, authenticated, issued and delivered (assuming their due authentication by the trustee) and constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance with their terms, subject, as to enforcement, to bankruptcy, insolvency, fraudulent transfer, moratorium and other similar laws relating to or affecting creditors' rights generally and to general principles of equity, and will be entitled to the benefits provided by the Indenture; and the Securities will be substantially in the form contemplated by the Indenture and will conform in all material respects to the description thereof contained in the Disclosure Package and the Final Prospectus. + +(o) Each Significant Subsidiary that is required to be organized or licensed as an insurance company in its jurisdiction of incorporation (each, an "Insurance Subsidiary" and collectively, the "Insurance Subsidiaries") is licensed 12 + + + + + +as an insurance company in its respective jurisdiction of incorporation and is duly licensed or authorized as an insurer in each other jurisdiction where it is required to be so licensed or authorized to conduct its business, in each case with such exceptions as would not have, individually or in the aggregate, a Material Adverse Effect; except as otherwise described in the Disclosure Package, each Insurance Subsidiary has all other approvals, orders, consents, authorizations, licenses, certificates, permits, registrations and qualifications (collectively, the "Approvals") of and from all insurance regulatory authorities to conduct its business, with such exceptions as would not have, individually or in the aggregate, a Material Adverse Effect; there is no pending or, to the knowledge of the Company, threatened action, suit, proceeding or investigation that could reasonably be expected to lead to any revocation, termination or suspension of any such Approval, the revocation, termination or suspension of which would have, individually or in the aggregate, a Material Adverse Effect; and, to the knowledge of the Company, no insurance regulatory agency or body has issued any order or decree impairing, restricting or prohibiting the payment of dividends by any Insurance Subsidiary to its parent which would have, individually or in the aggregate, a Material Adverse Effect. + +(p) The Company and each Significant Subsidiary has all necessary Approvals of and from, and has made all filings, registrations and declarations (collectively, the "Filings") with, all insurance regulatory authorities, all Federal, state, local and other governmental authorities, all self-regulatory organizations and all courts and other tribunals, which are necessary to own, lease, license and use its properties and assets and to conduct its business in the manner described in the Disclosure Package, except where the failure to have such Approvals or to make such Filings would not have, individually or in the aggregate, a Material Adverse Effect; to the knowledge of the Company, the Company and each Significant Subsidiary is in compliance with all applicable laws, rules, regulations, orders, by-laws and similar requirements, including in connection with registrations or memberships in self-regulatory organizations, and all such Approvals and Filings are in full force and effect and neither the Company nor any Significant Subsidiary has received any notice of any event, inquiry, investigation or proceeding that would reasonably be expected to result in the suspension, revocation or limitation of any such Approval or otherwise impose any limitation on the conduct of the business of the Company or any Significant Subsidiary, except as described in the Disclosure Package or except for any such non-compliance, suspension, revocation or limitation which would not have, individually or in the aggregate, a Material Adverse Effect. + +(q) Each Insurance Subsidiary is in compliance with and conducts its businesses in conformity with all applicable insurance laws and regulations of its respective jurisdiction of incorporation and the insurance laws and regulations of other jurisdictions which are applicable to it, in each case with such exceptions as would not have, individually or in the aggregate, a Material Adverse Effect. 13 + + + + + +(r) Each Significant Subsidiary which is engaged in the business of acting as a broker-dealer or an investment advisor (respectively, a "Broker-Dealer Subsidiary" and an "Investment Advisor Subsidiary") is duly licensed or registered as a broker-dealer or investment advisor, as the case may be, in each jurisdiction where it is required to be so licensed or registered to conduct its business, in each case, with such exceptions as would not have, individually or in the aggregate, a Material Adverse Effect; each Broker-Dealer Subsidiary and each Investment Advisor Subsidiary has all other necessary Approvals of and from all applicable regulatory authorities, including any self- regulatory organization, to conduct its businesses, in each case with such exceptions, as would not have, individually or in the aggregate, a Material Adverse Effect; except as otherwise described in the Disclosure Package, none of the Broker-Dealer Subsidiaries or Investment Advisor Subsidiaries has received any notification from any applicable regulatory authority to the effect that any additional Approvals from such regulatory authority are needed to be obtained by such subsidiary in any case where it could be reasonably expected that (x) any of the Broker-Dealer Subsidiaries or Investment Advisor Subsidiaries would in fact be required either to obtain any such additional Approvals or cease or otherwise limit engaging in a certain business and (y) the failure to have such Approvals or limiting such business would have a Material Adverse Effect; and each Broker-Dealer Subsidiary and each Investment Advisor Subsidiary is in compliance with the requirements of the broker-dealer and investment advisor laws and regulations of each jurisdiction which are applicable to such subsidiary, and has filed all notices, reports, documents or other information required to be filed thereunder, in each case with such exceptions as would not have, individually or in the aggregate, a Material Adverse Effect. + +(s) The Remarketing of the Remarketed Securities pursuant to this Remarketing Agreement and the Pricing Agreement, and compliance by the Company with all of the provisions of the Securities and the Transaction Documents, and the consummation of the transactions herein and therein contemplated, will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement, or other written agreement or similar instrument to which the Company or any Significant Subsidiary is a party or by which the Company or any Significant Subsidiary is bound or to which any of the property or assets of the Company or any Significant Subsidiary is subject, or which affects the validity, performance or consummation of the transactions contemplated by this Remarketing Agreement, nor will such action result in any violation of any statute or any order, rule or regulation of any court or insurance regulatory 14 + + + + + +authority or other governmental agency or body having jurisdiction over the Company or any Significant Subsidiary or any of their properties, in each case other than such breaches, conflicts, violations, or defaults which individually or in the aggregate, would not have a Material Adverse Effect and would not adversely affect the validity or performance of the Company's obligations, as applicable, under or with respect to the Remarketed Securities or any Transaction Document (in each case as to which the Company is or is to become a party); nor will such action result in any violation of the provisions of the certificate of incorporation or by-laws or other charter documents of the Company or any Significant Subsidiary; and no Approval of or Filing with any such court or insurance regulatory authority or other governmental agency or body is required for the execution, delivery and performance by the Company of any Transaction Document or for the issue or sale of the Securities, except, assuming the accuracy of the Remarketing Agents' representation in Section 9 of this Remarketing Agreement, (i) the registration under the Act of the Securities which registration has become effective and (ii) such Approvals or Filings as may be required under the Trust Indenture Act or state securities or Blue Sky laws in connection with the Remarketing of the Remarketed Securities by the Remarketing Agents. + +(t) Other than as set forth in the Disclosure Package, there are no legal or governmental proceedings pending to which the Company or any of its subsidiaries is a party or to which any property of the Company or any of its subsidiaries is subject, challenging the transactions contemplated by the Transaction Documents or which, if determined adversely to the Company or its subsidiaries, could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect or would materially and adversely affect the ability of the Company to perform its obligations under the Transaction Documents; and, to the knowledge of the Company, no such proceedings are threatened or contemplated by governmental authorities or threatened by others other than as set forth in the Disclosure Package. + +(u) Neither the Company nor any Significant Subsidiary is in violation of any of its certificate of incorporation or by-laws or in default in the performance or observance of any obligation, agreement, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement, lease or other agreement or instrument to which it is a party or by which it is bound or to which any of its property or assets is subject, which violation or default would have, individually or in the aggregate, a Material Adverse Effect. + +(v) The statements set forth in each of the Disclosure Package and the Final Prospectus under the captions "Description of Debt Securities" and "Description of Remarketed Series E Debentures" insofar as they purport to constitute a summary of the terms of the Transaction Documents and other 15 + + + + + +documents referred to therein, under the caption "Plan of Distribution," insofar as they purport to describe the documents referred to therein, and under the caption "Certain Material U.S. Federal Income Tax Considerations" (subject to the limitations and qualifications set forth therein), insofar as they purport to describe the provisions of the laws and documents referred to therein, are accurate and complete in all material respects. + +(w) Other than as disclosed in the Disclosure Package, the financial statements of the Company and its consolidated subsidiaries included or incorporated by reference in the Disclosure Package, together with the related schedules and notes, comply in all material respects with the requirements of the Act and the Exchange Act, as applicable, and present fairly in all material respects the financial position, the results of operations and the changes in cash flows of such entities in conformity with GAAP at the respective dates or for the respective periods to which they apply; and such financial statements and related notes and schedules, if any, have been prepared in accordance with GAAP consistently applied throughout the periods involved. + +(x) Deloitte & Touche LLP, which has audited certain consolidated financial statements of the Company and its subsidiaries, is an Independent Registered Public Accounting Firm as required by the Act and the rules and regulations of the Commission thereunder. + +(y) Neither the Company nor any Significant Subsidiary is, or after giving effect to the offer and sale of the Securities pursuant to the Pricing Agreement will be, an "investment company", as such term is defined in the Investment Company Act of 1940, as amended (the "Investment Company Act"), and the rules and regulations thereunder, although certain separate accounts of MLIC and of certain Insurance Subsidiaries are required to register as investment companies under the Investment Company Act. + +(z) None of the Company or its subsidiaries or, to the best of their knowledge, any of their directors, officers or affiliates, has taken or will take, directly or indirectly, any action designed to, or that might reasonably be expected to cause or result in stabilization or manipulation of the price of the Remarketed Securities in violation of Regulation M under the Exchange Act. + +(aa) The Company maintains a system of internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) that complies with the requirements of the Exchange Act and has been designed by the Company's principal executive officer and principal financial officer, or under their supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. As disclosed in the Company's 16 + + + + + +Annual Report on Form 10-K for the year ended December 31, 2013, the Company's internal control over financial reporting was effective as of December 31, 2013 and the Company is not aware of any material weaknesses in its internal control over financial reporting. + +(bb) The Company and its consolidated subsidiaries employ disclosure controls and procedures (as such term is defined in Rule 13a- 15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms, and is accumulated and communicated to the Company's management, including its principal executive officer or officers and principal financial officer or officers, as appropriate, to allow timely decisions regarding disclosure. As disclosed in the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2014, the Company's disclosure controls and procedures were effective as of June 30, 2014. + +(cc) No stop order suspending the effectiveness of the Registration Statement has been issued under the Act and the Registration Statement is not the subject of a pending proceeding or examination under Section 8(d) or 8(e) of the Act, the Company is not the subject of a pending proceedings under Section 8A of the Act in connection with the Remarketing of the Remarketed Securities and any request on the part of the Commission for additional information has been complied with. + +(dd) Except as would not individually or in the aggregate, reasonably be expected to have a Material Adverse Effect: (1) all tax returns required to be filed by the Company or any of its subsidiaries have been timely filed, (2) (x) all taxes (whether imposed directly or through withholding) including any interest, fine, sales and use taxes, all taxes which the Company and each of its subsidiaries is obligated to withhold from amounts owing to employees, creditors and third parties with respect to the period covered by such tax returns, additions to tax, or penalties applicable thereto due or claimed to be due from such entities have been timely paid, and (y) no deficiency assessment with respect to a proposed adjustment of the Company or its subsidiaries' federal, state, local or foreign taxes is pending or, to the best of the Company or its subsidiaries' knowledge, threatened, in each case of (x) and (y), other than such taxes or adjustments that are being contested in good faith or for which adequate reserves have been provided, and (3) to the Company and its subsidiaries' knowledge, there is no tax lien, whether imposed by any federal, state, foreign or other taxing authority, outstanding against the assets, properties or business of the Company or its subsidiaries. 17 + + + + + +3. Company Covenants. The Company agrees with each of the Remarketing Agents: + +(a) To prepare the Final Prospectus as amended and supplemented in relation to the Remarketed Securities in a form approved by the Remarketing Agents and to file timely such Final Prospectus pursuant to Rule 424(b) under the Act; to make no further amendment or any supplement to the Registration Statement or Final Prospectus as amended or supplemented after the Applicable Time and prior to the Remarketing Settlement Date for the Remarketed Securities unless the Remarketing Agents for such Remarketed Securities shall have had a reasonable opportunity to review and comment upon any such amendment or supplement prior to any filing thereof; to advise the Remarketing Agents, promptly after it receives notice thereof, of the time when any amendment to the Registration Statement has been filed or becomes effective or any supplement to the Final Prospectus or any amended Final Prospectus has been filed and to furnish the Remarketing Agents with copies thereof; to file promptly all reports and any definitive proxy or information statements required to be filed by the Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act for so long as the delivery of a prospectus is required in connection with the Remarketing of such Remarketed Securities and, during such same period, to advise the Remarketing Agents, promptly after it receives notice thereof, of (i) the issuance by the Commission of any stop order or of any order preventing or suspending the use of the Final Prospectus, (ii) the suspension of the qualification of such Remarketed Securities for Remarketing in any jurisdiction or of the initiation or threatening of any proceeding for any such purpose, or (iii) any request by the Commission for the amending or supplementing of the Registration Statement or Final Prospectus or for additional information; and, in the event of the issuance of any stop order or of any order preventing or suspending the use of the Final Prospectus or suspending any such qualification, promptly to use its best efforts to obtain the withdrawal of such order; + +(b) To give the Remarketing Agents notice of any filings made pursuant to the Exchange Act or the regulations of the Commission thereunder within forty-eight hours prior to the Applicable Time; to give the Remarketing Agents notice of its intention to make any such filing from the Applicable Time to the Remarketing Settlement Date and to furnish the Remarketing Agents with copies of any such documents a reasonable amount of time prior to such proposed filing. The Company shall prepare the Final Term Sheet and file such Final Term Sheet as an Issuer Free Writing Prospectus within two Business Days after the Remarketing Date; provided that the Company shall furnish the Remarketing Agents with copies of any such Final Term Sheet a reasonable amount of time prior to such proposed filing and will not use or file any such document to which the Remarketing Agents or counsel to the Remarketing Agents shall object; 18 + + + + + +(c) Promptly from time to time to take such action as the Remarketing Agents may reasonably request to qualify the Remarketed Securities for offering and sale under the securities laws of such jurisdictions as the Remarketing Agents may reasonably request and to comply with such laws so as to permit the continuance of sales and dealings therein in such jurisdictions for so long as may be necessary to complete the distribution of such Remarketed Securities, provided that in connection therewith the Company shall not be required to qualify as a foreign corporation, to file a general consent to service of process in any jurisdiction or to subject itself to taxation in respect of doing business in any jurisdiction in which it is not otherwise subject; + +(d) To furnish to the Remarketing Agents a copy of each proposed Issuer Free Writing Prospectus prepared by or on behalf of, used by, or referred to by the Company and not to use or refer to any proposed Issuer Free Writing Prospectus to which the Remarketing Agents reasonably object; if at any time following issuance of an Issuer Free Writing Prospectus there occurred or occurs an event or development as a result of which such Issuer Free Writing Prospectus conflicted or would conflict with the information contained in the Registration Statement, the Disclosure Package, the Final Prospectus or any Preliminary Prospectus or, when taken together with the Disclosure Package and any other such Issuer Free Writing Prospectus, included or would include an untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances prevailing at that subsequent time, not misleading, to promptly notify the Remarketing Agents and, if requested by the Remarketing Agents, to promptly amend or supplement, at its own expense, such Issuer Free Writing Prospectus to eliminate or correct such conflict, untrue statement or omission; provided, however, that this covenant shall not apply to any statements or omissions in an Issuer Free Writing Prospectus made in reliance upon and in conformity with information furnished in writing to the Company by any Remarketing Agent expressly for use therein; + +(e) To furnish the Remarketing Agents with copies of any Issuer Free Writing Prospectus or the Final Prospectus in such quantities as the Remarketing Agents may from time to time reasonably request, and if, at any time prior to the earlier of (i) the completion of the distribution of the Remarketed Securities and (ii) the expiration of nine months after the date of the Final Prospectus, any event shall have occurred as a result of which any Issuer Free Writing Prospectus or the Final Prospectus as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made when such Issuer Free Writing Prospectus or the Final Prospectus were delivered, not misleading, or, if for any 19 + + + + + +other reason it shall be necessary during such period to amend or supplement any Issuer Free Writing Prospectus or the Final Prospectus or to file under the Exchange Act any document incorporated by reference in any Issuer Free Writing Prospectus or the Final Prospectus in order to comply with the Act or the Exchange Act, (i) to notify the Remarketing Agents and (ii) upon their request to prepare and furnish without charge to each Remarketing Agent and to any dealer in securities as many copies as such Remarketing Agent may from time to time reasonably request of an amended Issuer Free Writing Prospectus or a supplement to the Final Prospectus or an amended Final Prospectus which will correct such statement or omission or effect such compliance; and any Issuer Free Writing Prospectus and the Final Prospectus and any amendments or supplements thereto furnished to the Remarketing Agents shall be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T; + +(f) To make generally available to securityholders of the Company as soon as practicable, but in any event not later than eighteen months after the effective date of the Registration Statement (as defined in Rule 158(c) under the Act), an earnings statement of the Company and its subsidiaries (which need not be audited) complying with Section 11(a) of the Act and the rules and regulations thereunder (including, at the option of the Company, Rule 158); + +(g) During the period beginning from the Applicable Time and continuing to and including the Remarketing Settlement Date for the Remarketed Securities, not to offer, sell, contract to offer or sell or otherwise dispose of any debt securities of the Company having pricing characteristics similar to the Securities exceeding an aggregate principal amount of $3 billion, except, for the avoidance of doubt, debt securities issued under the Global Medium Term Note Program of Metropolitan Life Global Funding I, Global Medium Term Note Program of MetLife Institutional Funding II, or any commercial paper program of, or sponsored by, the Company or any subsidiaries, without the prior written consent of the Remarketing Agents, which consent shall not be unreasonably withheld; + +(h) During a period of five years from the effective date of the Registration Statement, to furnish to the Remarketing Agents copies of all reports or other communications (financial or other) furnished to stockholders of the Company, and to furnish to the Remarketing Agents as soon as they are available, copies of any reports and financial statements furnished to or filed with the Commission or any national securities exchange on which the Securities or any class of securities of the Company is listed (such financial statements to be on a consolidated basis to the extent the accounts of the Company and its subsidiaries are consolidated in reports furnished to its stockholders generally or to the 20 + + + + + +Commission), provided that reports and financial statements furnished to or filed with the Commission, and publicly available on EDGAR, or furnished on the Company's website, shall be deemed to have been furnished to the Remarketing Agents under this Section 3(h); + +(i) The Company agrees that, unless it obtains the prior consent of the Remarketing Agents, and each Remarketing Agent represents and agrees that, unless it obtains the prior consent of the Company, it has not made and will not make any offer relating to the Remarketed Securities that would constitute an Issuer Free Writing Prospectus (other than, for the avoidance of doubt, any Bloomberg L.P. or other electronic communication regarding any preliminary term sheets or comparable bond prices and the Final Term Sheet filed pursuant to Section 3(b) hereto). Each Remarketing Agent agrees, unless it obtains the prior consent of the Company, not to take any action that would result in the Company being required to file with the Commission under Rule 433(d) under the Act a free writing prospectus prepared by or on behalf of each Remarketing Agent that otherwise would not be required to be filed by the Company thereunder but for the action of such Remarketing Agent (other than, for the avoidance of doubt, the Final Term Sheet filed pursuant to Section 3(b) hereto); and + +(j) The Company agrees to promptly notify the Remarketing Agents if A.M. Best & Co., Fitch Ratings, Ltd., Moody's Investors Service, Inc. or Standard & Poor's Ratings Services has given notice of any intended or potential downgrading or any review for a possible change of its rating of any debt security or the financial strength or the claims paying ability of the Company or any Significant Subsidiary. + +4. Fees and Expenses. The Company covenants and agrees with the Remarketing Agents that the Company will pay or cause to be paid the following: (i) the fees, disbursements and expenses of counsel and accountants to the Company in connection with the registration of the Securities under the Act and all other expenses in connection with the preparation, printing and filing of the Registration Statement, any Preliminary Prospectus, any Issuer Free Writing Prospectus and the Final Prospectus and any amendments and supplements thereto and the mailing and delivering of copies thereof to the Remarketing Agents and dealers; (ii) the cost of printing or producing the Transaction Documents, any Blue Sky Survey and any other documents in connection with the Remarketing of the Remarketed Securities; (iii) all expenses in connection with the qualification of the Remarketed Securities for offering and sale under state securities laws and insurance securities laws as provided in Section 3(b) hereof, including the reasonable fees and disbursements of counsel for the Remarketing Agents in connection with such qualification and in connection with the Blue Sky Survey; (iv) the filing fees incident to, and the fees and disbursements of counsel for the Remarketing Agents in connection with, securing any required review by the Financial Industry Regulatory 21 + + + + + +Authority of the terms of the sale of the Remarketed Securities; (v) any fees charged by securities rating services for rating the Remarketed Securities; (vi) the cost of preparing the Remarketed Securities; (vii) the fees and expenses of any trustee, paying agent or transfer agent and the fees and disbursements of counsel for any such trustee, paying agent or transfer agent in connection with the Remarketing; (viii) any travel expenses of the Company's officers and employees and any other expenses of the Company in connection with attending or hosting meetings with respect to this Remarketing; and (ix) all other costs and expenses incident to the performance of the obligations of the Company hereunder which are not otherwise specifically provided for in this Section. Except as provided in this Section, and Sections 6 and 13 hereof, the Remarketing Agents will pay all of their own costs and expenses, including the fees of their counsel, stock transfer taxes on resale of any of the Remarketed Securities by them and any advertising expenses connected with Remarketing of the Remarketed Securities that they may make. + +5. Conditions to Remarketing Agents' Obligations. The obligations of the Remarketing Agents shall be subject, in their discretion, to the condition that all representations and warranties and other statements of the Company herein or in certificates of any officer of the Company or any subsidiary of the Company delivered pursuant to the provisions hereof are, at the Applicable Time, the Remarketing Date and the Remarketing Settlement Date (in each case, to the extent such representations and warranties are applicable as of such date), true and correct, the condition that the Company shall have performed all of its covenants and other obligations included hereunder and in the other Transaction Documents to be performed at or before the date hereof, the Applicable Time, the Remarketing Date and the Remarketing Settlement Date, and the following additional conditions: + +(a) The Final Prospectus shall have been filed with the Commission pursuant to Rule 424(b) under the Act within the applicable time period prescribed for such filing by the rules and regulations under the Act and in accordance with Section 3(a) hereof; the Final Term Sheet shall have been filed with the Commission pursuant to Rule 433(d); no stop order suspending the effectiveness of the Registration Statement or any part thereof shall have been issued and no proceeding for that purpose shall have been initiated or threatened by the Commission; and all requests for additional information on the part of the Commission shall have been complied with to the Remarketing Agents' reasonable satisfaction; + +(b) All corporate proceedings and other legal matters incident to the authorization, form and validity of the Transaction Documents, the Remarketed Securities, the Securities, the Final Prospectus, the Registration Statement and all other legal matters relating to this Remarketing Agreement and the transactions contemplated hereby shall be reasonably satisfactory in all material respects to counsel to the Remarketing Agents, and the Company shall have furnished to such counsel all documents and information that they may reasonably request to enable them to pass upon such matters; 22 + + + + + +(c) Debevoise & Plimpton LLP, counsel for the Remarketing Agents, shall have furnished to the Remarketing Agents such written opinion, dated the Remarketing Settlement Date, as the Remarketing Agents may reasonably request, and such counsel shall have received such papers and information as they may reasonably request to enable them to pass upon such matters; + +(d) Willkie Farr & Gallagher LLP, counsel for the Company, shall have furnished to the Remarketing Agents their written opinions, each opinion dated the Remarketing Settlement Date, substantially in the form attached hereto as Annex I-A with respect to certain corporate and tax matters, and Annex I-B with respect to the Registration Statement, Disclosure Package and the Final Prospectus; + +(e) Matthew Ricciardi, Chief Counsel -General Corporate of MetLife Group, Inc., an affiliate of the Company, shall have furnished to the Remarketing Agents his written opinion, dated the Remarketing Settlement Date, substantially in the form attached hereto as Annex II; + +(f) The Company will furnish the Remarketing Agents with such conformed copies of such opinions, certificates, letters and documents as the Remarketing Agents reasonably request; + +(g) (i) On the Remarketing Date, Deloitte & Touche LLP shall have furnished to the Remarketing Agents a letter, dated the Remarketing Date, in form and substance reasonably satisfactory to the Remarketing Agents, confirming that they are independent registered public accountants with respect to the Company and the Company's subsidiaries within the meaning of the Act and the Exchange Act and the respective applicable published rules and regulations thereunder, and (ii) on the Remarketing Settlement Date, Deloitte & Touche LLP shall have furnished to the Remarketing Agents a letter, dated the Remarketing Settlement Date, in form and substance reasonably satisfactory to the Remarketing Agents, that reaffirms the statements made in the letter furnished pursuant to subclause (i) of this Section 5(g), except that the specified date referred to shall be a date not more than three Business Days prior to the Remarketing Settlement Date; + +(h) On or after the Remarketing Date, (i) neither the Company nor any Significant Subsidiary shall have sustained since the date of the latest audited financial statements included or incorporated by reference in the Disclosure Package any loss or interference with its business from fire, explosion, flood or 23 + + + + + +other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Disclosure Package, and (ii) since the respective dates as of which information is given in the Disclosure Package, there shall not have been any change in the surplus of any Significant Subsidiary or the capital stock of the Company or any increase in the long-term debt of the Company and its subsidiaries considered as a whole, or any change, or any development involving a prospective change, in or affecting the business, financial position, reserves, surplus, equity or results of operations of the Company and the Significant Subsidiaries considered as a whole, otherwise than as set forth or contemplated in the Disclosure Package, the effect of which, in any such case described in clause (i) or (ii), is in the judgment of the Remarketing Agents so material and adverse as to make it impracticable or inadvisable to proceed with the Remarketing of the Remarketed Securities on the terms and in the manner contemplated in the Final Prospectus; + +(i) On or after the Remarketing Date (i) no downgrading shall have occurred in the rating accorded the debt securities of the Company or any Significant Subsidiary or the financial strength or claims paying ability of any Significant Subsidiary by A.M. Best & Co., Fitch Ratings, Ltd., Moody's Investors Service, Inc. or Standard & Poor's Ratings Services, and (ii) no such organization shall have publicly announced that it has under surveillance or review, with possible negative implications, or shall have given notice of its intended or potential downgrading of, its rating of any debt security or the financial strength or the claims paying ability of any Significant Subsidiary, the effect of which, in any such case described in clause (i) or (ii), is in the judgment of the Remarketing Agents so material and adverse as to make it impracticable or inadvisable to proceed with the Remarketing of the Remarketed Securities on the terms and in the manner contemplated in the Final Prospectus; + +(j) On or after the Remarketing Date, there shall not have occurred any of the following: (i) a change in U.S. or international financial, political or economic conditions or currency exchange rates or exchange controls as would, in the reasonable judgment of the Remarketing Agents, be likely to prejudice materially the success of the Remarketing of the Remarketed Securities, whether in the primary market or in respect of dealings in the secondary market; (ii) a suspension or material limitation in trading in securities generally on the New York Stock Exchange; (iii) a suspension or material limitation in trading in the Company's securities on the New York Stock Exchange; (iv) a suspension or material limitation in clearing and/or settlement in securities generally; (v) a general moratorium on commercial banking activities declared by either Federal or New York State authorities; or (vi) the material outbreak or escalation of hostilities involving the United States or the declaration by the United States of a 24 + + + + + +national emergency or war or any other national or international calamity or emergency (including without limitation as a result of an act of terrorism) if the effect of any such event specified in this clause (vi) in the judgment of the Remarketing Agents makes it impracticable or inadvisable to proceed with the Remarketing of the Remarketed Securities on the terms and in the manner contemplated in the Final Prospectus; + +(k) The Company shall have complied with any request by the Remarketing Agents with respect to the furnishing of copies of the Final Prospectus in compliance with the provisions of Section 3(e), as the case may be; and + +(l) At the Remarketing Settlement Date, the Remarketing Agents shall have received a certificate of the Chief Accounting Officer of the Company, dated as of the Remarketing Settlement Date, substantially in the form of Annex IV hereto. + +6. Indemnification and Contribution. + +(a) The Company will indemnify and hold harmless each Remarketing Agent, its partners, directors and officers and each person, if any, who controls such Remarketing Agent within the meaning of either Section 15 of the Act or Section 20 of the Exchange Act, against any losses, claims, damages or liabilities, joint or several, to which such Remarketing Agent may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in (i) the Registration Statement or any amendment or supplement (when considered together with the document to which such supplement relates) thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading or (ii) any Preliminary Prospectus, Pricing Prospectus, any Issuer Free Writing Prospectus or the Final Prospectus or any amendment or supplement (when considered together with the document to which such supplement relates) thereto, or any "issuer information" filed or required to be filed pursuant to Rule 433(d) under the Act, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and will reimburse each Remarketing Agent for any legal or other expenses reasonably incurred by such Remarketing Agent in connection with investigating or defending any such action or claim as such expenses are incurred; provided, however, that the Company shall not be liable in any such case to the extent that any such loss, claim, damage or liability (or action in respect thereof) arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in any Preliminary Prospectus, any Issuer Free Writing Prospectus, Pricing Prospectus, the Registration Statement or the 25 + + + + + +Final Prospectus, or any such amendment or supplement(s) in reliance upon and in conformity with written information furnished to the Company by any Remarketing Agent expressly for use therein. + +(b) Each Remarketing Agent will, severally and not jointly, indemnify and hold harmless the Company, its directors and officers who sign the Registration Statement and each person, if any, who controls the Company within the meaning of Section 15 of the Act or Section 20 of the Exchange Act against any losses, claims, damages or liabilities (or actions in respect thereof) to which the Company may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus, any Issuer Free Writing Prospectus, Pricing Prospectus, the Registration Statement, or the Final Prospectus, or any amendment or supplement (when considered together with the document to which such supplement relates) thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in any Preliminary Prospectus, any Issuer Free Writing Prospectus, Pricing Prospectus, the Registration Statement, the Final Prospectus or any such amendment or supplement in reliance upon and in conformity with written information furnished to the Company by such Remarketing Agent expressly for use therein; and will reimburse the Company for any legal or other expenses reasonably incurred by the Company in connection with investigating or defending any such action or claim as such expenses are incurred. + +(c) Promptly after receipt by an indemnified party under subsection (a) or (b) above of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, notify the indemnifying party in writing of the commencement thereof; the omission so to notify the indemnifying party shall relieve it from any liability which it may have to any indemnified party under such subsection, to the extent the indemnifying party is actually materially prejudiced by such omission. In case any such action shall be brought against any indemnified party and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party or any other indemnified party), and, after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party shall not be liable to such indemnified party under such subsection for any legal expenses of other counsel or any other expenses, in each case subsequently incurred by such indemnified party, in connection with the defense thereof 26 + + + + + +other than reasonable costs of investigation, unless (i) the indemnifying party and such indemnified party shall have mutually agreed to the contrary, (ii) the indemnifying party has failed within a reasonable time to retain counsel reasonably satisfactory to such indemnified party or (iii) the named parties in any such proceeding (including any impleaded parties) include both the indemnifying party and such indemnified party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. No indemnifying party shall, without the prior written consent of the indemnified party, effect the settlement or compromise of, or consent to the entry of any judgment with respect to, any pending or threatened action or claim in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified party is an actual or potential party to such action or claim) unless such settlement, compromise or judgment (i) includes an unconditional release of the indemnified party from all liability arising out of such action or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act, by or on behalf of any indemnified party. In no event shall the indemnifying party be liable for fees and expenses of more than one counsel (in addition to any local counsel) separate from their own counsel for all indemnified parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same allegations or circumstances. + +(d) If the indemnification provided for in this Section 6 is unavailable to or insufficient to hold harmless an indemnified party under subsection (a) or (b) above in respect of any losses, claims, damages or liabilities (or actions in respect thereof) referred to therein, other than due to the express provisions thereof, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Remarketing Agents on the other from the Remarketing of the Remarketed Securities to which any such loss, claim, damage or liability (or action in respect thereof) relates. If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law, then each indemnifying party shall contribute to such amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company on the one hand and the Remarketing Agents of the applicable Securities on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Remarketing Agents on the other shall be deemed to be in the same proportion as the total net proceeds from such offering (before deducting expenses) received by the Company bear to the total Remarketing Fee received by the Remarketing Agents, as set forth in the table on the cover page of the Final Prospectus. 27 + + + + + +The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company on the one hand or the Remarketing Agents on the other and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Remarketing Agents agree that it would not be just and equitable if contributions pursuant to this subsection (d) were determined by pro rata allocation (even if the Remarketing Agents were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this subsection (d). The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to above in this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this subsection (d), no Remarketing Agent shall be required to contribute any amount in excess of the amount by which the total price at which the applicable Securities remarketed by it and distributed to the public were offered to the public exceeds the amount of any damages which such Remarketing Agent has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The obligations of the Remarketing Agents in this subsection (d) to contribute are several in proportion to their respective obligations with respect to such Remarketed Securities and not joint. + +(e) The obligations of the Company under this Section 6 shall be in addition to any liability which the Company may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls any Remarketing Agent within the meaning of the Act. The obligations of the Remarketing Agents under this Section 6 shall be in addition to any liability which the respective Remarketing Agent may otherwise have and shall extend, upon the same terms and conditions, to each officer and director of the Company (including any person who, with his consent, is named in the Registration Statement as about to become a director of the Company) and to each person, if any, who controls the Company within the meaning of the Act. + +7. Resignation and Removal of the Remarketing Agents. A Remarketing Agent may resign and be discharged from its duties and obligations hereunder, and the Company may remove any or all of the Remarketing Agents, by giving five (5) Business Days' prior written notice to the Stock Purchase Contract Agent and, in the case of a removal, to the Remarketing Agents; provided that no such resignation nor any removal of all the Remarketing Agents shall become effective until the Company shall have appointed at least one nationally recognized broker-dealer as successor to the Remarketing Agents, and such successor Remarketing Agent shall have entered into a 28 + + + + + +letter substantially in the form of Annex III hereof with the Company and the Stock Purchase Contract Agent in which it shall have agreed to conduct the Remarketing in accordance with the Remarketing Procedures. The provisions of this Section 7 shall survive the resignation or removal of the Remarketing Agents pursuant to this Remarketing Agreement. + +8. New Remarketing Agents. The Company may appoint any institution or institutions as new Remarketing Agent(s) hereunder (each a "New Remarketing Agent") in respect of the Remarketing in which event, upon the confirmation by such institution through a letter to the Company and the Stock Purchase Contract Agent confirming acceptance of such nomination by the New Remarketing Agent substantially in the form of Annex III hereof, such New Remarketing Agent shall become a party hereto, unless otherwise provided for herein, with all the authority, rights, powers, duties and obligations as if originally named as Remarketing Agent hereunder. The Company will notify the Remarketing Agent(s) appointed in respect of the Remarketing of the Remarketed Securities and the Stock Purchase Contract Agent of a change in the identity of other Remarketing Agents appointed or who have resigned in respect of the Remarketing of the Remarketed Securities generally as soon as reasonably practicable. + +9. Offering Restrictions. Each Remarketing Agent acknowledges, represents and agrees and each additional Remarketing Agent appointed pursuant to Section 8 of this Remarketing Agreement will be required to acknowledge, represent and agree that it has not remarketed or delivered and it will not remarket or deliver, any of the Remarketed Securities, in or from any jurisdiction except under circumstances that are reasonably designed to result in compliance with the applicable securities laws and regulations thereof. In particular, each Remarketing Agent acknowledges, represents and agrees and each additional Remarketing Agent appointed pursuant to Section 8 of this Remarketing Agreement will be required to acknowledge, represent and agree as set forth in Annex V to this Remarketing Agreement. + +10. Dealing in the Remarketed Securities. Each Remarketing Agent, when acting hereunder, or when acting in its individual or any other capacity, may, to the extent permitted by law, buy, sell, hold or deal in any of the Remarketed Securities. The Remarketing Agents may exercise any vote or join in any action which any beneficial owner of Remarketed Securities may be entitled to exercise or take pursuant to the Indenture with like effect as if they did not act in any capacity hereunder. The Remarketing Agents, in their individual capacities, either as principal or agent, may also engage in or have an interest in any financial or other transaction with the Company as freely as if they did not act in any capacity hereunder. + +11. Termination of Remarketing Agreement. This Remarketing Agreement shall terminate (i) in the event of a Remarketing that is not a Successful Remarketing or (ii) as to any Remarketing Agent who resigns or is removed, on the effective date of the resignation or removal of such Remarketing Agent pursuant to Section 7. In addition, the 29 + + + + + +obligations of the Remarketing Agents may be terminated by them by notice given to the Company prior to 12:00 noon, New York City time on the Remarketing Settlement Date if, prior to that time, any of the applicable conditions precedent to the obligations of the Remarketing Agents described in Section 5 hereof shall have failed to occur. + +12. Survival. Notwithstanding any such termination set forth in Section 11 hereof, the obligations set forth in Section 4 hereof shall survive and remain in full force and effect until all amounts payable under said Section 4 shall have been paid in full. In addition, the former Remarketing Agents shall be entitled to the rights and benefits under Section 6 of this Remarketing Agreement notwithstanding the replacement or resignation of the Remarketing Agents. The respective indemnities, agreements, representations, warranties and other statements of the Company and the several Remarketing Agents, as set forth in this Remarketing Agreement or made by or on behalf of them, respectively, pursuant to this Remarketing Agreement, shall remain in full force and effect, regardless of any investigation (or any statement as to the results thereof) made by or on behalf of any Remarketing Agent or any controlling person of any Remarketing Agent, the Company or any officer or director or controlling person of the Company and shall survive delivery of and payment for the Securities. + +13. Notices. All statements, requests, notices and agreements hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication; notices to the Remarketing Agents shall be directed to Deutsche Bank Securities Inc., 60 Wall Street, New York, NY 10005, with a copy to Debevoise & Plimpton LLP, 919 Third Avenue, New York, New York 10022, attention of Peter J. Loughran, Esq.; notices to the Company shall be delivered or sent by mail, telex or facsimile transmission to the address of the Company set forth in the Registration Statement, Attention: General Counsel, with a copy to Willkie Farr & Gallagher LLP, 787 Seventh Avenue, New York, NY 10019, attention John M. Schwolsky, Esq. and Vladimir Nicenko, Esq.; notices to the Trustee shall be delivered or sent by mail or facsimile transmission to The Bank of New York Mellon Trust Company, N.A., 2 North LaSalle Street, Suite 1020, Chicago, Illinois 60602, telecopy: (312) 827-8542; notices to the Stock Purchase Contract Agent shall be delivered or sent by mail or facsimile transmission to Deutsche Bank Trust Company Americas, Trust and Securities Services, 60 Wall Street, 16th Floor, MS: NYC60-2710, New York, NY 10005, telecopy: (732) 578-4635; and notices to the Collateral Agent or the Custodial Agent shall be delivered or sent by mail or facsimile transmission to Deutsche Bank Trust Company Americas, Trust and Securities Services, 60 Wall Street, 16th Floor, MS: NYC60-2710, New York, NY 10005, telecopy: (732) 578-4635. Any such statements, requests, notices or agreements shall take effect at the time of receipt thereof. + +14. Successors and Assigns. This Remarketing Agreement and the Pricing Agreement shall be binding upon, and inure solely to the benefit of, the Remarketing Agents and the Company, and, to the extent provided in Sections 6 and 12 hereof, the 30 + + + + + +officers and directors of the Company and each person who controls the Company or any Remarketing Agent, and their respective heirs, executors, administrators, successors and assigns, and no other person shall acquire or have any right under or by virtue of this Remarketing Agreement or the Pricing Agreement. No purchaser of any of the Securities pursuant to this Remarketing Agreement shall be deemed a successor or assign by reason merely of such purchase. + +15. GOVERNING LAW. THIS REMARKETING AGREEMENT AND THE PRICING AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT SUCH PRINCIPLES WOULD REQUIRE OR PERMIT THE APPLICATION OF LAWS OF ANOTHER JURISDICTION. + +16. Consent to Jurisdiction. The Company agrees that any legal suit, action or proceeding against the Company brought by the Remarketing Agents or by any person, if any, who controls the Remarketing Agents within the meaning of Section 15 of the Act or Section 20 of the Exchange Act, arising out of or based upon this Remarketing Agreement or the transactions contemplated hereby may be instituted in any state or Federal court in the Borough of Manhattan, The City of New York, New York, and, to the fullest extent permitted by applicable law, waives any objection which it may now or hereafter have to the laying of venue of any such proceeding, and irrevocably submits to the non-exclusive jurisdiction of such courts in any suit, action or proceeding. + +17. Amendment. This Remarketing Agreement may not be amended or modified except by an instrument in writing signed by, or on behalf of, each of the parties hereto; provided, however, that in the event that the Securities to be remarketed, or any portion thereof, are modified in such a way so that they no longer require registration under the Act, the Company, the Remarketing Agents and the Stock Purchase Contract Agent hereby agree to promptly enter into an amendment to this Remarketing Agreement containing such representations, warranties and covenants as would normally be required to more accurately reflect an offering of unregistered securities. + +18. Counterparts. This Remarketing Agreement and the Pricing Agreement may be executed by any one or more of the parties hereto and thereto in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same instrument. + +19. No Advisory or Fiduciary Relationship. The Company acknowledges and agrees that (a) the Remarketing of the Remarketed Securities pursuant to this Remarketing Agreement is an arm's-length commercial transaction between the Company, on the one hand, and the several Remarketing Agents, on the other hand, (b) in connection with any Remarketing contemplated by this Remarketing Agreement and the Pricing Agreement and the process leading to any such transaction, each Remarketing 31 + + + + + +Agent is and has been acting solely as a principal and is not the agent or fiduciary of the Company, or its stockholders, creditors, employees or any other party, (c) no Remarketing Agent has assumed or will assume an advisory or fiduciary responsibility in favor of the Company with respect to any such Remarketing contemplated hereby or the process leading thereto (irrespective of whether such Remarketing Agent has advised or is currently advising the Company on other matters) and no Remarketing Agent has any obligation to the Company with respect to such Remarketing contemplated hereby except the obligations expressly set forth in this Remarketing Agreement and the Pricing Agreement, (d) the Remarketing Agents and their respective affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Company, (e) the Company agrees that it will not claim that the Remarketing Agents, or any of them, have rendered advisory services of any nature or respect, or owe a fiduciary or similar duty to the Company, in connection with such transaction or the process leading thereto and (f) the Remarketing Agents have not provided any legal, accounting, regulatory or tax advice with respect to the offering contemplated hereby and the Company has consulted its own legal, accounting, regulatory and tax advisors to the extent it deemed appropriate. + +20. Entire Agreement. This Remarketing Agreement supersedes all prior agreements and understandings (whether written or oral) between the Company and the Remarketing Agents, or any of them, with respect to the subject matter hereof. + +21. Waiver of Jury Trial. The Company and each of the Remarketing Agents hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Remarketing Agreement or the transactions contemplated hereby. + +22. Rights of the Stock Purchase Contract Agent. Notwithstanding any other provision of this Remarketing Agreement, the Stock Purchase Contract Agent, in connection with its rights and duties hereunder, shall be entitled to all the rights, protections and privileges granted to the Stock Purchase Contract Agent in the Stock Purchase Contract Agreement. + +[Signature pages follow] 32 + + + + + +Very truly yours, + +METLIFE, INC. + +By: /s/ Marlene B. Debel Name: Marlene B. Debel Title: Senior Vice President and Treasurer + +[Signature page to the Remarketing Agreement] + + + + + +DEUTSCHE BANK TRUST COMPANY AMERICAS, as Stock Purchase Contract Agent + +By: /s/ Carol Ng Name: Carol Ng Title: Vice President + +By: /s/ Anthony D'Amato Name: Anthony D'Amato Title: Associate + +[Signature page to the Remarketing Agreement] + + + + + +Accepted as of the date hereof on behalf of the Remarketing Agents: DEUTSCHE BANK SECURITIES INC. + +By: /s/ Edward J. Sunoo Name: Edward J. Sunoo Title: Managing Director + +By: /s/ Adam Raucher Name: Adam Raucher Title: Director + +[Signature page to the Remarketing Agreement] + + + + + +SCHEDULE 1 TO REMARKETING AGREEMENT + +None. + + + + + +ANNEX I(a) + +FORM OF WILLKIE FARR & GALLAGHER LLP OPINION I(a)-1 + + + + + +ANNEX I(b) + +FORM OF WILLKIE FARR & GALLAGHER LLP NEGATIVE ASSURANCE LETTER I(b)-1 + + + + + +ANNEX II + +FORM OF MATTHEW RICCIARDI'S OPINION II-1 + + + + + +ANNEX III + +FORM OF ACCESSION LETTER + +METLIFE, INC. + +[Date] + +[New Remarketing Agent] [Address] + +Dear Sirs, + +Remarketing of Series E Senior Component Debentures, Tranche 1, due 2018 and Series E Senior Component Debentures, Tranche 2, due 2045 of MetLife, Inc. (the "Remarketed Securities") + +The undersigned refers to the Remarketing Agreement, dated as of August 26, 2014 (the "Remarketing Agreement") among ourselves as the Company, Deutsche Bank Trust Company Americas, as Stock Purchase Contract Agent (the "Stock Purchase Contract Agent"), and the Remarketing Agents from time to time party thereto, and have the pleasure of inviting you to become a Remarketing Agent subject to and in accordance with the terms of the Remarketing Agreement, a copy of which has been supplied to you by us. Please return to the Company a copy of this letter signed by an authorized signatory whereupon you will become a Remarketing Agent for the purposes of the Remarketing Agreement with all the authority, rights, powers, duties and obligations of a Remarketing Agent under the Remarketing Agreement. + +This letter is governed by, and shall be construed in accordance with, the laws of the State of New York. The provisions of Sections 14 and 15 of the Remarketing Agreement shall apply to this letter as if set out herein in full. III-1 + + + + + +Yours faithfully, METLIFE, INC. + +By: Name: Title: + +Acknowledged as of the date hereof: + +DEUTSCHE BANK TRUST COMPANY AMERICAS, as Stock Purchase Contract Agent By: Name: Title: By: Name: Title: III-2 + + + + + +CONFIRMATION + +We hereby accept the appointment as a Remarketing Agent and accept all of the duties and obligations under, and the terms and conditions of the Remarketing Agreement upon the terms of this letter. + +We confirm that we are in receipt of all the documents which we have requested and have found them to be satisfactory. + +For the purposes of the Remarketing Agreement our communications details are as set out below. [NEW REMARKETING AGENT] + +By: Name: Title: Date: [ ] + +Address: [ ] + +Telex: [ ] + +Facsimile: [ ] + +Attention: [ ] + +Copies to: + +(i) All existing Remarketing Agents who have been appointed in respect of the Remarketing of the Remarketed Securities. + +(ii) The Stock Purchase Contract Agent. III-3 + + + + + +ANNEX IV + +METLIFE, INC. CHIEF ACCOUNTING OFFICER CERTIFICATE + +METLIFE, INC. CHIEF ACCOUNTING OFFICER'S CERTIFICATE + +MetLife, Inc. a Delaware corporation (the "Company"), does hereby certify, pursuant to Section 5(l) of the Remarketing Agreement, dated August 26, 2014 (the "Remarketing Agreement"), by and among the Company, Deutsche Bank Trust Company Americas, as Stock Purchase Contract Agent, and Deutsche Bank Securities Inc. (together with the institutions appointed as Remarketing Agents pursuant to Section 8 of the Remarketing Agreement), that: + + (i) the representations and warranties of the Company contained in Section 2 of the Remarketing Agreement are true and correct in allrespects, as if made at and as of the date hereof; and + + (ii) the Company has complied in all respects with all agreements and all conditions on its part to be performed under the RemarketingAgreement and the other Transaction Documents at or prior to the date hereof. + +Willkie Farr & Gallagher LLP, counsel to the Company, may rely upon this certificate in delivering its opinion pursuant to Section 5(d) of the Remarketing Agreement. Debevoise & Plimpton LLP, counsel to the Remarketing Agents, may rely upon this certificate in delivering its opinion pursuant to Section 5(c) of the Remarketing Agreement. + +[Remainder of page intentionally left blank.] IV-1 + + + + + +IN WITNESS WHEREOF, the undersigned has hereunto signed his name as of , 2014. METLIFE, INC. + +By: Name: Peter M. Carlson + + Title: Executive Vice President, Finance Operations and Chief Accounting Officer IV-1 + + + + + +ANNEX V + +OFFERING RESTRICTIONS + +European Economic Area + +In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a "Relevant Member State"), each Remarketing Agent has represented and agreed that with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State it has not made and will not make an offer of Series E Debentures which are the subject of the offering contemplated by this prospectus supplement and accompanying prospectus to the public in that Relevant Member State other than: + +(a) to any legal entity which is a qualified investor as defined in the Prospectus Directive; + +(b) to fewer than 100 or, if the Relevant Member State has implemented the relevant provision of the 2010 PD Amending Directive, 150 natural or legal persons (other than qualified investors as defined in the Prospectus Directive), as permitted under the Prospectus Directive, subject to obtaining the prior consent of the other Remarketing Agents for any such offer; or + +(c) in any other circumstances falling within Article 3(2) of the Prospectus Directive, + +provided that no such offer of Series E Debentures shall require MetLife, Inc. or any Remarketing Agent to publish a prospectus pursuant to Article 3 of the Prospectus Directive or supplement a prospectus pursuant to Article 16 of the Prospectus Directive. + +For the purposes of the above, (i) the expression an "offer of Series E Debentures to the public" in relation to any Series E Debentures in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the Series E Debentures to be offered so as to enable an investor to decide to purchase or subscribe for the Series E Debentures, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State, (ii) the expression "Prospectus Directive" means Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in the Relevant Member State), and includes any relevant implementing measure in the Relevant Member State and (iii) the expression "2010 PD Amending Directive" means Directive 2010/73/EU. V-1 + + + + + +United Kingdom + +Each Remarketing Agent has represented and agreed that it has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the Financial Services and Markets Act 2000 ("FSMA")) received by it in connection with the issue or sale of the Series E Debentures which are the subject of the offering contemplated by this prospectus supplement and the accompanying prospectus in circumstances in which Section 21(1) of such Act does not apply to MetLife, Inc., and that it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to any Series E Debentures in, from or otherwise involving the United Kingdom. + +Hong Kong + +The Series E Debentures may not be offered or sold by means of any document other than (i) in circumstances which do not constitute an offer to the public within the meaning of the Companies Ordinance (Cap.32, Laws of Hong Kong), or (ii) to "professional investors" within the meaning of the Securities and Futures Ordinance (Cap.571, Laws of Hong Kong) and any rules made thereunder, or (iii) in other circumstances which do not result in the document being a "prospectus" within the meaning of the Companies Ordinance (Cap.32, Laws of Hong Kong), and no advertisement, invitation or document relating to the Series E Debentures may be issued or may be in the possession of any person for the purpose of issue (in each case whether in Hong Kong or elsewhere), which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the laws of Hong Kong) other than with respect to Series E Debentures which are or are intended to be disposed of only to persons outside Hong Kong or only to "professional investors" within the meaning of the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong) and any rules made thereunder. + +Japan + +The Series E Debentures have not been and will not be registered under the Financial Instruments and Exchange Act of Japan (Act No. 25 of 1948, as amended; the "Financial Instruments and Exchange Act") and each Remarketing Agent has represented and agreed that it has not offered or sold and will not offer or sell any Series E Debentures, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan (which term as used herein means any person resident in Japan, including any corporation or other entity organized under the laws of Japan), or to others for re- offering or resale, directly or indirectly, in Japan or to, or for the benefit of, a resident of Japan, except pursuant to an exemption from the registration requirements of, and otherwise in compliance with, the Financial Instruments and Exchange Act and any other applicable laws, regulations and ministerial guidelines of Japan. V-2 + + + + + +Singapore + +This prospectus supplement and the accompanying prospectus have not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this prospectus supplement, the accompanying prospectus, any free writing prospectus and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the Series E Debentures may not be circulated or distributed, nor may the Series E Debentures be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor under Section 274 of the Securities and Futures Act, Chapter 289 of Singapore (the "SFA"), (ii) to a relevant person pursuant to Section 275(1), or any person pursuant to Section 275(1A), and in accordance with the conditions specified in Section 275 of the SFA, or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA. + +Where the Series E Debentures are subscribed or purchased under Section 275 of the SFA by a relevant person which is: (a) a corporation (which is not an accredited investor (as defined in Section 4A of the SFA)) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor); or (b) a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary of the trust is an individual who is an accredited investor, securities (as defined in Section 239(1) of the SFA) of that corporation or the beneficiaries' rights and interest (howsoever described) in that trust shall not be transferred within 6 months after that corporation or that trust has acquired the Series E Debentures pursuant to an offer made under Section 275 of the SFA except: (1) to an institutional investor or to a relevant person defined in Section 275(2) of the SFA, or any person arising from an offer referred to in Section 275(1A) or Section 276(4)(i)(B) of the SFA; (2) where no consideration is or will be given for the transfer; (3) where the transfer is by operation of law; (4) as specified in Section 276(7) of the SFA; or (5) as specified in Regulation 32 of the Securities and Futures (Offers of Investments) (Shares and Debentures) Regulations 2005 of Singapore. + +South Korea + +The Series E Debentures may not be offered, sold and delivered directly or indirectly, or offered or sold to any person for re-offering or resale, directly or indirectly, in South Korea or to any resident of South Korea except pursuant to the applicable laws and regulations of South Korea, including the Financial Investment Services and Capital Markets Act and the Foreign Exchange Transaction Law and the decrees and regulations thereunder. The Series E Debentures have not been registered with the Financial Services Commission of South Korea for public offering in South Korea. Furthermore, the Series E Debentures may not be re-sold to South Korean residents unless the purchaser of the Series E Debentures complies with all applicable regulatory V-3 + + + + + +requirements (including but not limited to government approval requirements under the Foreign Exchange Transaction Law and its subordinate decrees and regulations) in connection with their purchase. V-4 \ No newline at end of file diff --git a/full_contract_txt/Microgenics Corporation - Collaborative Development and Commercialization Agreement.txt b/full_contract_txt/Microgenics Corporation - Collaborative Development and Commercialization Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..2c9c1a6223988415c506085752bc898763ae94eb --- /dev/null +++ b/full_contract_txt/Microgenics Corporation - Collaborative Development and Commercialization Agreement.txt @@ -0,0 +1,785 @@ +Exhibit 10.5 Confidential Treatment Requested by Achaogen, Inc. COLLABORATIVE DEVELOPMENT AND COMMERCIALIZATION AGREEMENT + + This Collaborative Development and Commercialization Agreement ("Agreement") is entered into as of April 26, 2016 ("Effective Date") by and between Microgenics Corporation (hereinafter "Microgenics"), having its principal place of business at 46500 Kato Road, Fremont, California 94538, and Achaogen Inc. (hereinafter "Achaogen"), having a place of business at 7000 Shoreline Court, #371, South San Francisco, California 94080. Both Microgenics and Achaogen are referred to herein individually as a "Party" and collectively as the "Parties." WHEREAS, Achaogen possesses certain intellectual property rights and know-how relating to drug compound Plazomicin; WHEREAS, Microgenics has certain expertise and know-how relating to the development, manufacture and sale of immunoassays for in vitro diagnostic use; WHEREAS, the Parties are undertaking, as of the Effective Date, activities under that certain Antibody Development Agreement, dated [***] (the "Antibody Development Agreement"), for the purpose of identifying and developing antibodies against Plazomicin and this Agreement is the "Assay Commercialization Agreement" referred to in Section 2.6 of the Antibody Development Agreement; and WHEREAS, the Parties desire to collaborate on the development and commercialization of a therapeutic drug monitoring assay for the measurement of concentrations of Plazomicin in biological fluids. NOW THEREFORE, in consideration of the foregoing premises and the covenants and promises contained herein, the Parties intending to be bound, hereby agree as follows: 1. Definitions For the purposes of this Agreement and the Exhibits hereto, the following words and phrases shall have the following meanings (words defined in the Agreement shall have the meaning ascribed to them in that Section): 1.1 "Achaogen Know-How" shall mean all proprietary, technical and clinical information, data and know-how relating to Plazomicin and haptens and polyclonal antibodies related directly to Plazomicin, whether or not patentable, which is Controlled as of the Effective Date or acquired during the Term by Achaogen. 1.2 "Achaogen Materials" shall mean the materials set forth in Exhibit A. 1.3 "Achaogen Patents" shall mean the Patents and Patent applications set forth in Exhibit B hereto. 1.4 "Affiliate" shall mean, with respect to a Party, any corporation, or other business entity which directly controls, is controlled by or is under common control with that Party. A person or entity shall be regarded as in control of another entity if it owns, directly or indirectly, fifty percent (50%) or more of the outstanding equity securities of the subject entity which is entitled to vote in the election of directors, or a fifty percent (50%) or greater interest in the net assets or profits of the subject entity if such entity is not a corporation. + +[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions. + + + + + +Confidential Treatment Requested by Achaogen, Inc. 1.5 "Applicable Law" shall mean all applicable provisions of all statutes, laws, rules, regulations, administrative codes, ordinances, decrees, orders, decisions, injunctions, awards judgments, permits and licenses of or from governmental authorities, including those relating to or governing the use or regulation of the subject item and the listing standards or agreements of any national or international securities exchange. 1.6 "Assay" shall mean an antibody-based immunoassay or immunoassays used for the in vitro measurement of Plazomicin concentration in human blood and other body fluids, [***], that (a) uses or otherwise would infringe Immunoassay Technologies, (b) is developed by Microgenics and its Affiliates under this Agreement, and (c) [***]. 1.7 "Commercially Reasonable Efforts" shall mean efforts and resources normally utilized by a Party for a product owned by it or to which it has rights, which is of similar market potential at a similar stage in its product life, taking into account the competitiveness of the marketplace, the proprietary position of the product, the regulatory structure involved, the profitability of the applicable products, the relative benefit that accrues to actual and potential patients and other relevant factors; provided, that, in any event, "Commercially Reasonable Efforts" under this Agreement require that a Party (a) [***], (b) [***], and (c) [***]. 1.8 "Confidential Information" shall mean all proprietary and confidential business, technical, scientific, and/or regulatory information relating to the Assay, Plazomicin, and/or the purpose of, or activities under, this Agreement, that is provided by or on behalf of a Disclosing Party to a Receiving Party hereunder, whether disclosed in writing or orally. 1.9 "Control" shall mean with respect to any (a) item of information, including know-how, or (b) intellectual property right, the possession (whether by ownership or license) by a Party of the ability to grant to the other Party access and/or a license as provided herein under such item or right without violating the terms of any agreement or other arrangements with any Third Party existing before or after the Effective Date. 1.10 "Development and Manufacturing Phase" shall mean that phase of the Research Program set forth in the Project Plan relating to the optimization of the Assay and the manufacture and validation of [***] ([***]) production lots of the Assay that meet the Specifications [***]. 1.11 "Feasibility Study Phase" shall mean that phase of the Research Program set forth in the Project Plan comprising all studies conducted by Microgenics to establish the feasibility for developing the Assay by demonstrating (a) [***], (b) [***], (c) [***], (d) [***], (e) [***], and (f) [***]. 1.12 "First Commercial Sale" shall mean (a) with respect to the Assay, the initial sale by or on behalf of Microgenics (or its Affiliates) of the Assay and (b) with respect to Plazomicin, the initial sale by or on behalf of Achaogen (or its Affiliates) of Plazomicin, in each case, to a Third Party in exchange for cash or some equivalent to which value can be assigned; provided, that a sale of the Assay or Plazomicin, as applicable, in connection with [***] of the Assay or Plazomicin, as applicable, or for [***] therefor will not constitute First Commercial Sale. 1.13 "Good Clinical Practice" or "GCP" shall mean the then current standard for clinical trials for assays, as set forth in the United States Federal Food, Drug and Cosmetics Act and applicable regulations + +Page 2 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions. + + + + + +Confidential Treatment Requested by Achaogen, Inc. promulgated thereunder, as amended from time to time and such standards of good clinical practice as are required by the European Union and other organizations and governmental agencies in countries where the Assay is intended to be sold, to extent such standards are no less stringent than United States GCP. 1.14 "Good Laboratory Practice" or "GLP" shall mean the then current standards for laboratory activities for assays, as set forth in the United States Federal Food, Drug and Cosmetics Act and applicable regulations promulgated thereunder, as amended from time to time and such standards of good laboratory practice as are required by the European Union and other organizations and governmental agencies in countries where the Assay is intended to be sold, to extent such standards are no less stringent than United States GLP. 1.15 "Good Manufacturing Practices" or "GMP" shall mean the then current standards for the manufacture of assays, as set forth in the United States Federal Food Drug and Cosmetics Act and applicable regulations promulgated thereunder, as may be amended from time to time and such standards of good manufacturing practice as are required by the European Union and other organizations and governmental agencies in countries where the Assay is intended to be sold, to extent such standards are no less stringent than United States GMP. 1.16 "Immunoassay Technologies" shall mean technologies, including any patentable or unpatentable intellectual property rights appurtenant thereto, Controlled by Microgenics or its Affiliates suitable for developing and manufacturing assays, calibrators and controls for application on [***], including [***] assay technology, [***] technology, [***] technology, [***] immunoassay, the Microgenics Cell Line, and Microgenics [***] Antibodies. 1.17 "Microgenics Cell Line" shall mean those certain cell lines (a) that were developed under the Antibody Development Agreement, or (b) that produce Microgenics [***] Antibodies and are Controlled by Microgenics and listed in Exhibit C, as such Exhibit may be amended from time to time upon the mutual written agreement of the Parties. 1.18 "Microgenics Know-How" shall mean all proprietary, technical information, data and know-how relating to the Assay or Immunoassay Technologies and reagents for use therewith which are Controlled as of the Effective Date or acquired or developed during the Term by Microgenics or its Affiliates. 1.19 "Microgenics [***] Antibodies" shall mean [***] antibodies developed by, or Controlled by, Microgenics or its Affiliates and directed to Plazomicin. 1.20 "Patent" shall mean any existing or future: (a) national, regional or international patent or patent application in any jurisdiction (including any provisional, divisional, continuation, continuation-in-part, non-provisional, converted provisional, or continued prosecution application, any utility model, petty patent, design patent and/or certificate of invention), (b) any extension, restoration, revalidation, reissue, re-examination and extension (including any supplementary protection certificate and the like) of any of the foregoing patents or patent applications, and (c) any ex-U.S. equivalents corresponding to any of the foregoing. 1.21 "Plazomicin" shall mean Achaogen's aminoglycoside antibiotic that is in Phase 3 clinical development as of the Effective Date and having the chemical structure shown on Exhibit D, and [***] thereof, regardless of commercial name. + +Page 3 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions. + + + + + +Confidential Treatment Requested by Achaogen, Inc. 1.22 "Primary Countries" shall mean (a) the countries set forth on Exhibit E and (b) any other country in the Territory which the Parties mutually agree in writing shall be a Primary Country in accordance with Section 4.2.5, in each case, for which the Parties intend to pursue initial registration, commercialization and launch of the Assay. 1.23 "Project Plan" shall mean the plan of work to be conducted under the Research Program pursuant to Section 2.1 (Project Plan) hereof as attached as Exhibit F. 1.24 "Regulatory Approval" shall mean all authorizations, registrations or clearances with or by the appropriate Regulatory Authorities which are required for the marketing, promotion, pricing and sale of either the Assay or Plazomicin, as applicable, in any country or regulatory jurisdiction in the Territory. 1.25 "Regulatory Authority" shall mean any national, supra-national, regional, state or local regulatory agency, department, bureau, commission, council or other governmental entity involved in the granting of Regulatory Approval, including the United States Food and Drug Administration. 1.26 "Research Program" shall mean the collaborative program of research relating to the development of the Assay to be carried out by the Parties pursuant to this Agreement. 1.27 "Secondary Countries" shall mean all countries in the Territory, other than the Primary Countries. 1.28 "Shortfall License" shall mean a temporary, fully-paid up, royalty-free, worldwide non-exclusive license granted by Microgenics (including on behalf of its Affiliates as appropriate), under Section 4.3.2.3, to (a) the Immunoassay Technologies and (b) all other intellectual property rights (including Patent applications, Patents, trade secrets, copyrights, and trademarks) (i) of Microgenics (or its Affiliates as appropriate) arising out of the performance of this Agreement or the Antibody Development Agreement, or (ii) Controlled by Microgenics (or its Affiliates as appropriate) that are necessary or desirable for or used in the manufacture and commercialization of the Assay, which license would be for the manufacture, use, sale, offer for sale and import of the Assay. Such license shall be fully sub-licensable to any Third Party for purposes of manufacturing and commercializing the Assay (including the components thereof) under Section 4.3.2.3. 1.29 "Specifications" shall mean the specifications applicable to the Assay, as set forth on Exhibit G. 1.30 "Territory" shall mean the world. 1.31 "Third Party(ies)" shall mean any person(s) or entity(ies) other than Achaogen, Microgenics or their respective Affiliates. 1.32 "Trademarks" shall mean all registered and unregistered trademarks (including all common law rights thereto), service marks, trade names, brand names, logos, taglines, slogans, certification marks, Internet domain names, trade dress, corporate names, business names and other indicia of origin, together with the goodwill associated with any of the foregoing and all applications, registrations, extensions and renewals thereof throughout the world, and all rights therein provided by international treaties and conventions. + +Page 4 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions. + + + + + +Confidential Treatment Requested by Achaogen, Inc. 1.33 "Transfer License" shall mean a royalty-bearing, worldwide exclusive license granted by Microgenics (including on behalf of its Affiliates as appropriate), under Section 9.4.4.1, to (a) the Immunoassay Technologies and (b) all Patent applications, Patents, trade secrets and other know-how, (i) of Microgenics (or its Affiliates as appropriate) arising out of the performance of this Agreement or the Antibody Development Agreement, or (ii) Controlled by Microgenics (or its Affiliates as appropriate) as of the termination date of this Agreement that are necessary for or used in the development, manufacture, and commercialization of the Assay, which license would be solely for the development, manufacture, use, sale, offer for sale and import of the Assay in connection solely with the use of Plazomicin. Such license shall be fully sub-licensable to any Third Party for purposes of manufacturing and commercializing the Assay (including the components thereof) [***]. 1.34 Additional Definitions. Each of the following definitions is set forth in the Section of the Agreement indicated below. Definition Section AAA 13.8.2 Abandoned Commercialization 4.2.7.1 Abandoned Development 4.2.7.1 Achaogen Preamble Achaogen Indemnified Parties 11.2 Achaogen Inventions 8.1 Agreement Preamble Alliance Manager 5.1.1 Antibody Development Agreement Recitals Assay Commercialization Plan 4.2.4 Audit Outcome 4.4.2 Back-up Supplier 4.3.2.2 Binding Forecast 4.2.2 Commercial Leader 5.3.1 Convicted Entity or Convicted Individual 10.4.4 Debarred Entity 10.4.2 Debarred Individual 10.4.1 Development Leader 5.3.1 Disclosing Party 12.1 Dispute 13.8.1 Effective Date Preamble Excluded Entity or Excluded Individual 10.4.3 FDA 10.4.5 FDA Disqualified/Restricted List 10.4.5 Force Majeure Event 13.1 Functional Leaders 5.3.1 Joint Project Team or JPT 5.3.1 JSC 5.2 [***] Products 8.1 Joint Patent 8.2.2 Launch Plan 4.2.4 Losses 11.1 + +Page 5 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions. + + + + + +Confidential Treatment Requested by Achaogen, Inc. Definition Section Microgenics Preamble Microgenics Indemnified Parties 11.1 Microgenics Inventions 8.1 Minimum Threshold 4.2.3 Minimum Threshold Period 4.2.3 Party or Parties Preamble Plazomicin Commercialization Plan 4.2.1 Receiving Party 12.1 Regulatory Finding 3.3.1.2 Regulatory Leader 5.3.1 Responsible Party 8.3.1 Review Party 8.3.1 Supply Resumption Date 4.3.2.2 Term 9.1 Third Party Claims 11.1 VAT 7.3.2 2 Research and Development Collaboration 2.1 Project Plan. The Parties shall collaborate on the Research Program in accordance with the Project Plan, as set forth as Exhibit F. As may be necessary or reasonable from time-to-time, the JPT may suggest appropriate revisions to the Project Plan to the JSC for its review in accordance with Section 5.3.2 and, if approved by the JSC in accordance with Section 5.1, the Project Plan may be amended from time to time by the JSC. 2.2 Party Responsibilities. 2.2.1 General. Microgenics and Achaogen shall each perform their respective obligations under the Research Program, using Commercially Reasonable Efforts, in accordance with the Project Plan and in compliance with Applicable Law. 2.2.2 Achaogen. Achaogen shall supply to Microgenics, [***], (a) Achaogen Materials, including Plazomicin and Plazomicin clinical patient samples, in such quantities as are set forth in Exhibit A or otherwise mutually agreed by the Parties or set forth in the Project Plan; and (b) all necessary and in Achaogen's possession Plazomicin pharmacological and biochemical information, including [***] etc., to enable the JPT to correctly design the Assay and Microgenics to work with the appropriate Regulatory Authorities to secure Regulatory Approval for the Assay. Microgenics shall not transfer any portion of the Achaogen Materials to any Third Party or use the Achaogen Materials for any purpose other than the purposes of performing its obligations under, and in accordance with, this Agreement and the applicable Project Plan. Microgenics shall hold, store and transport all supplies of the Achaogen Materials in compliance with all Applicable Laws and [***]. Microgenics shall maintain complete and accurate records relating to the disposition of all Achaogen Materials. 2.2.3 Microgenics. Subject to the provisions of this Agreement (including Article 3 (Regulatory Submissions and Meetings)), Microgenics shall be responsible for the research, development, manufacture and sale of the Assay. Microgenics shall manufacture the Assay according to the Specifications + +Page 6 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions. + + + + + +Confidential Treatment Requested by Achaogen, Inc. attached hereto as Exhibit G (which may be amended from time to time by the JSC in accordance with Section 5.1) and in accordance with the timelines set forth in the Project Plan. Without limiting the foregoing, Microgenics shall develop and commercialize the Assay such that it is capable of being run on no less than [***] ([***]) distinct [***] platforms, which [***] platforms shall be mutually agreed upon by the Parties in good faith. 2.3 Information Exchange, Records and Compliance. 2.3.1 Technology Transfer. Achaogen shall provide Microgenics with all Achaogen Know-How [***] reasonably necessary for Microgenics to carry out its responsibilities under the Research Program and to obtain Regulatory Approvals for the Assay. Microgenics shall provide Achaogen with all Microgenics Know-How [***] reasonably necessary for Achaogen to carry out its responsibilities under the Research Program and to conduct clinical trials of Plazomicin. All information exchanged shall be subject to the confidentiality requirements set forth in Article 12 (Confidentiality) hereof. 2.3.2 Record Keeping/Compliance. During the Term and for a period of [***] ([***]) years thereafter (or such longer period of time as required by Applicable Laws), each Party shall maintain records in sufficient detail and in good scientific manner appropriate for obtaining and maintaining Regulatory Approvals. Achaogen shall have the right (either by itself or through a Third Party reasonably acceptable to Microgenics), during normal business hours and upon reasonable notice, to inspect records pertinent to Microgenics' obligations under this Agreement. To the extent such records contain Confidential Information of Microgenics, Achaogen shall maintain such Confidential Information disclosed therein in confidence in accordance with Article 12. Achaogen shall have the right to arrange for its employee(s) and/or consultant(s) involved in the activities contemplated hereunder, during normal business hours and upon reasonable notice, to discuss the development activities and results contemplated under this Agreement in detail with the technical personnel and consultant(s) of Microgenics. Each Party shall comply with all applicable GLP, GCP, GMP, ISO 9001 and ISO 13485:2003 requirements and other Applicable Laws in the conduct of the Research Program and in the activities contemplated under this Agreement, including the development, manufacture and commercialization of the Assay. 2.4 Installation and Training. Upon Achaogen's request, Microgenics shall, [***], install any necessary equipment and train appropriate staff at clinical sites designated by Achaogen for the performance of clinical trials by Achaogen, in connection with obtaining Regulatory Approval for Plazomicin, and in order to enable such sites to use the Assay in connection with such use of Plazomicin and provide training for such sites' personnel on how to operate such equipment. For clarity, [***] shall be [***] responsible for the costs of (a) any clinical trials conducted for purposes of obtaining Regulatory Approval for the Assay (as opposed to Regulatory Approval for Plazomicin) and (b) any activities conducted in a given country in the Territory following the receipt of Regulatory Approval for the Assay for such country (e.g. commercial activities). 2.5 Quality Agreement. No later than [***] ([***]) days after the Effective Date (or such later date as may be otherwise agreed upon by the Parties in writing), the Parties shall enter into a quality agreement defining the commitments of both Parties to ensure that the Assay and related services developed and commercialized under this Agreement satisfy the quality and regulatory requirements required by this Agreement. Microgenics shall manage all Achaogen Materials (including clinical patient samples) according to customer property requirements described in such quality agreement. 2.6 BARDA Requirements. The Parties acknowledge and agree that Achaogen receives funding + +Page 7 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions. + + + + + +Confidential Treatment Requested by Achaogen, Inc. from the United States government through the Biomedical Advanced Research and Development Authority within the office of the Assistance Secretary for Preparedness and Response in the United States Department of Health and Human Services (BARDA) in connection with Achaogen's development of new antibacterial treatment of MDR gram-negative bacterial infection. In connection with the foregoing, the terms and conditions of this Agreement shall be subject in their entirety to the terms and conditions set forth on Appendix A of Exhibit H. In the event of any conflict between the terms and conditions of the main body of this Agreement and Appendix A of Exhibit H, Appendix A of Exhibit H shall control. 3 Regulatory Submissions and Meetings 3.1 Coordination. Achaogen and Microgenics shall [***] coordinate the therapeutic and diagnostic regulatory filings and communications with Regulatory Authorities in the Territory. Achaogen will be responsible for all activities regarding the Regulatory Approval of Plazomicin (and, as between the Parties, Achaogen shall retain ownership of all regulatory filings and Regulatory Approvals for Plazomicin), and, subject to the terms and conditions of this Agreement, [***] will be responsible for all activities regarding the Regulatory Approval of [***] (and, as between the Parties, [***] shall retain ownership of all regulatory filings and Regulatory Approvals for [***]). For the avoidance of doubt, the Parties acknowledge and agree that, notwithstanding anything herein to the contrary, but subject to Section 3.2 and Section 4.2.7, (a) Achaogen shall have the sole discretion, at any time during the Term, to determine whether to conduct any clinical trial or make any regulatory filing, submission or correspondence with respect to Plazomicin; and (b) [***], subject to Section 4.2.7, at any time during the Term, to conduct any clinical trial (provided, that, in the event of a clinical trial that involves the use or administration of [***], [***]) or make any regulatory filing, submission or correspondence with respect to [***]. 3.2 Reporting and Consultation. [***] shall keep [***] regularly informed in connection with the preparation of all regulatory filings, submissions or correspondence related to [***] and [***] shall have the right to review and comment on any regulatory filing, submission or correspondence related to [***] (including any [***]), to be submitted to any health authority by [***]. In connection therewith, [***] shall provide to [***] for review the text of any such regulatory filing, submission or correspondence for [***] prior to submission and [***] shall consider in good faith all comments provided by [***]; provided that any disputes with respect to comments provided by [***] shall be resolved by the JSC. In addition, [***] shall consult with [***] with respect to all material matters required for regulatory filings, submissions or correspondence, under this Agreement; provided, however, that, subject to Section 3.1, [***] shall have sole responsibility hereunder for all regulatory filings (including [***] or their ex-United States equivalent), submissions or correspondence, including preparing and analyzing all [***] information required pursuant to any and all Applicable Laws, and preparing and analyzing any additional data and information required by any applicable Regulatory Authority (other than any data or information regarding [***]). Upon written request from [***], [***] shall promptly provide to [***] copies of all submitted regulatory filings, submissions, and material correspondence to and from any Regulatory Authorities; provided, that [***] may redact from such copies information that does not relate to the Assay, Plazomicin or this Agreement and the activities hereunder. 3.3 Correspondence from Regulatory Authority. 3.3.1.1 If either Party receives any material communication from the Regulatory Authorities relating to [***] or has any meetings (telephonic or in person) with any Regulatory Authority for any material reason regarding [***], such Party shall promptly notify the other Party and, upon mutual agreement, decide whether it is necessary for the other Party to be present in any + +Page 8 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions. + + + + + +Confidential Treatment Requested by Achaogen, Inc. discussions with the Regulatory Authorities regarding [***]; provided, however, that, notwithstanding the foregoing, Achaogen shall have the right to participate in (a) [***], (b) [***], or (c) [***] pertaining to Achaogen Materials or Achaogen Know-How. For clarity, as between the Parties, [***] shall be responsible for leading any meetings or other discussions with the [***]. [***] shall not make any representations or discuss the uses of [***] with any Regulatory Authority except to the extent it relates to [***]. Neither Party shall disclose, without the other Party's prior written consent, Confidential Information of such other Party in any regulatory filing, submission or correspondence or at a meeting with any Regulatory Authority, except to the extent required by Applicable Laws or otherwise under the Project Plan. + +3.3.1.2 In addition, Microgenics shall notify Achaogen within [***] ([***]) business days of any regulatory finding or violation identified by a Regulatory Authority that may potentially impact the activities contemplated under the Project Plan or the development, manufacture or commercialization of the Assay (a "Regulatory Finding"). With respect to each Regulatory Finding, if any, Microgenics shall provide (1) (a) [***], or (b) [***], or (c) [***] and (2) Microgenics' [***]; provided, that, in each case of clauses (a), (b), and (c), Microgenics' may redact from such copies or reports information that does not relate to the Assay, Plazomicin or this Agreement and the activities hereunder. Without limiting the next to last sentence of Section 3.5, Microgenics shall notify Achaogen promptly of any notification or information received from a Regulatory Authority, that: (i) would reasonably be expected to impair the integrity or reputation of Plazomicin or the Assay; (ii) raises any material concerns regarding the safety or efficacy of Plazomicin or the Assay; (iii) indicates or suggests a potential material liability of either Party to Third Parties in connection with Plazomicin or the Assay; (iv) is reasonably likely to lead to a recall or market withdrawal with respect to Plazomicin or the Assay; or (v) [***]. + +3.4 Package Insert Information. Notwithstanding anything to the contrary contained herein, but subject to any applicable review and comment rights of the other Party, and dispute resolution escalation procedures set forth in Section 13.8, [***] shall have final decision making authority on all package insert language directed [***], and [***] shall have final decision making authority on all Assay package insert language directed [***]. 3.5 Filings. On a country-by-country basis, a Regulatory Approval from the applicable Regulatory Authority(ies) is required for the Assay prior to launch in such country. Upon Achaogen's request, Microgenics shall reasonably cooperate with Achaogen with respect to any regulatory filings, submissions, or correspondence made by Achaogen related to Plazomicin in any country in the Territory, including promptly providing data, information and advice regarding the Assay, including the manufacture (including any recall information) and use thereof. This Agreement generally assumes that there is a current 510(k) pathway for obtaining Regulatory Approval for the Assay; provided, that, if a PMA pathway is required, the Parties acknowledge and agree that [***] reviewed by the Parties and may need to be adjusted to the extent agreed upon between the Parties and subject to the proviso in the foregoing sentence. For the avoidance of doubt, Achaogen shall have sole right to control any such regulatory filings, submissions, correspondence or other matters related to Plazomicin including any joint submissions or filings, but not [***], and to communicate with Regulatory Authorities related thereto. No later than [***] (or such later date as otherwise agreed to by the Parties), the Parties shall enter into an agreement setting forth the Parties respective responsibilities for adverse event and complaint reporting, the exchange of safety data and, to the extent agreed by the Parties to be appropriate and relevant, recall matters. 3.6 Right of Reference. [***] hereby grants to [***] a non-exclusive, non-transferable (except + +Page 9 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions. + + + + + +Confidential Treatment Requested by Achaogen, Inc. in connection with a permitted assignment, sublicense or subcontract) "right of reference" (as defined in 21 CFR 314.3(b)) with respect to clinical trial data and results related to [***], solely as necessary for [***] to prepare, submit and maintain regulatory submissions related to [***] and Regulatory Approvals for [***]. [***] hereby grants to [***] a non-exclusive, non-transferable (except in connection with a permitted assignment, sublicense or subcontract) "right of reference" (as defined in 21 CFR 314.3(b)) with respect to [***] clinical trial data (including [***]), information (including the [***], as applicable) and results related to [***], solely as necessary for [***] to prepare, submit and maintain regulatory submissions related to [***] and Regulatory Approvals for [***]. 3.7 [***]. In connection with the [***] of [***] in any [***] in the Territory, [***] shall [***] of the [***] in [***] in [***] with such [***] of [***]. The Parties shall discuss in good faith (via the JPT) and mutually agree as to [***] shall [***] for [***], which discussion and decision shall occur no later than [***] ([***]) year [***]. In the event that the Parties later agree to [***] for [***] in a [***], the Parties (through the JPT and JSC) shall amend the Project Plan to [***], subject to [***], and [***] shall [***]. 4 Manufacture and Commercialization of Assay 4.1 Manufacture. Except as provided elsewhere in this Agreement, including Section 4.3 (Supply) and Section 9.4.4 (Effect of Termination), during the Term, Microgenics shall be solely and exclusively responsible for the worldwide manufacture of the Assay in accordance with GMP standards, the Specifications and Applicable Law. For clarity, from and after the expiration or termination of this Agreement, nothing in this Agreement shall restrict Microgenics from developing, manufacturing or commercializing the Assay as and to the same extent as any third party. 4.2 Commercialization. Upon successful completion of the Development and Manufacturing Phase and upon receipt of the applicable Regulatory Approval in a given country in the Territory required in order to sell the Assay in such country, Microgenics shall use Commercially Reasonable Efforts to exclusively commercialize and market the Assay, under the Thermo Scientific tradename and packaging and utilizing Microgenics' and its Affiliate's commercial infrastructure, in each country within the Territory in which Achaogen is commercializing Plazomicin for so long as Achaogen is commercializing Plazomicin in such country. Solely to the extent Achaogen elects to promote an assay which may be capable of measuring Plazomicin in a given Primary Country ([***]) in the Territory, and subject to receipt and conditions of any applicable Regulatory Approvals, Achaogen shall prioritize the promotion of the Assay relative to any other assay which may be capable of measuring Plazomicin, in its marketing and sales efforts in such Primary Country; provided, however, that in the event (a) Microgenics [***] is unable to supply the Assay in quantities sufficient to meet each applicable Binding Forecast, including [***], or (b) [***], Achaogen may prioritize the promotion of assays capable of measuring Plazomicin in the affected country(ies). For clarity, and notwithstanding anything to the contrary in this Agreement, including this Section 4.2, Achaogen expressly reserves and retains the right to, directly or indirectly (including through contractors or collaborators), research, develop, manufacture, use or commercialize assays capable of measuring Plazomicin other than the Assay; provided, that, Achaogen may not, directly or indirectly (including through contractors or collaborators) commercialize any immunoassay [***], other than the Assay in accordance herewith, [***]; provided, further, that the restriction on Achaogen's right to commercialize immunoassays [***], other than the Assay, shall be of no force or effect if Microgenics is unable to supply the Assay for [***] ([***]) days at any time [***] or if the Parties mutually determine that Microgenics will not be able to supply the Assay. Additional commercialization and supply terms may be added to this Agreement in the form of an amendment. Without limiting the foregoing: + +Page 10 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions. + + + + + +Confidential Treatment Requested by Achaogen, Inc. 4.2.1 Plazomicin Commercialization Plan. As soon as commercially reasonable, but no later than [***] ([***]) days after the Effective Date of this Agreement, Achaogen shall share its global commercialization plans for Plazomicin with Microgenics ("Plazomicin Commercialization Plan"). The Plazomicin Commercialization Plan shall include the list of countries consistent with the Primary Country list for commercialization of Plazomicin, anticipated launch timing, initial volume forecasts and such other information as may be determined by the JPT. Microgenics will develop timelines on a country basis to the extent it receives adequate Plazomicin Commercialization Plan details with respect to a given country. Achaogen agrees to keep such Plazomicin Commercialization Plan updated via regular communication with the JSC. For clarity, (a) the Plazomicin Commercialization Plan shall be Confidential Information of Achaogen hereunder, and (b) Achaogen [***] in preparing and conducting activities under the Plazomicin Commercialization Plan. + +4.2.2 Volumes and Pricing. + +4.2.2.1 On a regular basis, beginning at least [***] ([***]) months prior to the anticipated date of the First Commercial Sale of Plazomicin in the Territory, Achaogen will share confidential, non-binding (except as described below) good faith volume forecasts in units for the Assay and updates thereof in the Plazomicin Commercialization Plan through the JSC in order for the Parties to develop a [***] market introduction including achieving Regulatory Approval [***] for the Assay in all relevant countries and regions. Thereafter, and on a [***] basis, Achaogen shall supply Microgenics with a confidential, good faith rolling [***] ([***]) month forecast (in units, broken-down by country (or regions)) as to Achaogen's estimated unit demand for worldwide commercial demand for the Assay (it being agreed and understood that such forecasts shall be Confidential Information of Achaogen hereunder); provided, however, only the first [***] ([***]) months of each [***] ([***]) month forecast shall be binding (a "Binding Forecast") and the remaining [***] ([***]) months of such forecast shall be non-binding (for clarity, when each [***] forecast update is provided, [***] of the previous forecast (i.e., [***] of the Binding Forecast previously submitted) shall not be changed as they become [***] of the current forecast and [***] of the current Binding Forecast). For clarity, except as otherwise provided in this Agreement with respect to the Binding Forecast, Achaogen shall have no liability whatsoever with respect to such forecasts, including no liability for any Assay manufactured or materials ordered by or on behalf of Microgenics based on such forecasts. Microgenics shall supply the quantities of the Assay set forth in the applicable Binding Forecasts and shall use Commercially Reasonable Efforts to ensure that [***], in each case, in accordance with Section 4.3; provided, however, [***]. + +4.2.2.2 The Parties acknowledge and agree that [***] shall have [***] with respect to the pricing of the Assay in any country in the Territory; provided, however, [***] shall [***] to price the Assay in a given country at an amount no greater than (i) (a) $[***] in the United States or (b) $[***] in any other country, or (ii) [***] percent ([***]%) of the applicable list price of any other [***] assay marketed in such country; provided, further, that [***] shall [***] to take into account [***]. In the event that (x) [***] to price the Assay at an amount greater than the foregoing subclauses (i) and (ii), then the JSC shall review the available data and discuss the Assay price in accordance with Section 5.2.1(h), and/or (y) the Assay pricing [***], the JSC will review the available data and discuss various alternative solutions. + +4.2.3 Minimum Thresholds. In the event that, during the applicable Minimum Threshold Periods (as defined below), Microgenics does not receive the applicable Minimum Threshold Revenue (as defined below) during a given calendar year, Achaogen agrees to pay [***] Microgenics for such region during such calendar year (on a prorated basis, as applicable). For purposes of this Section 4.2.3, + +Page 11 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions. + + + + + +Confidential Treatment Requested by Achaogen, Inc. 4.2.3.1 The "First Minimum Threshold Period" shall begin on the [***] ([***]) anniversary of the date on which the First Commercial Sale of the Assay in [***] occurred and shall end on the [***] ([***]) anniversary of the date on which the First Commercial Sale of the Assay in [***] occurred. For example, if the First Commercial Sale of the Assay in [***] occurred on [***] then the First Minimum Threshold Period would begin on [***] and would end on [***]; + +4.2.3.2 The "Second Minimum Threshold Period" shall begin on the [***] ([***]) anniversary of the earlier of the date on which the First Commercial Sale of the Assay occurred in (i) [***] of the following countries - [***] (each an "[***] Country"); or (ii) an [***] Country and [***]; or (iii) [***] ([***]) of the Primary Country list ([***]) (subclause (i), (ii), or (iii), as applicable, the "Start Date"), and shall end on the earlier of (a) the [***] ([***]) anniversary of the Start Date or (b) the date this Agreement expires or terminates; + +4.2.3.3 "Minimum Threshold Revenue" shall mean, with respect to each of the First Minimum Threshold Period and the Second Minimum Threshold Period, USD $[***] of annual gross revenue received by Microgenics from sales of the Assay in the Territory (for clarity, during any overlap between the First Minimum Threshold Period and the Second Minimum Threshold Period, the total Minimum Threshold Revenue would be USD $[***]); provided, however, that the Minimum Threshold Revenue (i) shall be determined by [***] for a given Assay, less [***] directly associated with such sale and Assay and permitted to be taken in accordance with generally accepted accounting principles in the United States, and (ii) that in the event the Minimum Threshold Period begins or ends during a given calendar year, the Minimum Threshold Revenue for such calendar year shall be prorated accordingly. + +4.2.4 Market Introduction. The Parties will reasonably agree regarding details related to commercialization of the Assay once the [***] are clarified by Achaogen in the Plazomicin Commercialization Plan. Within [***] ([***]) months of receiving the initial Plazomicin Commercialization Plan, Microgenics will provide Achaogen with (a) a detailed market introduction plan for the Assay (the "Launch Plan") and (b) a global commercialization plan for the Assay, in a form to be determined by the JSC (the "Assay Commercialization Plan"). During the Term, Microgenics shall provide Achaogen [***] with (i) an updated Launch Plan [***], and (ii) an updated Assay Commercialization Plan [***]. For clarity, (i) the Launch Plan and Assay Commercialization Plan shall be Confidential Information of Microgenics hereunder, and (ii) Microgenics is [***] in preparing and conducting activities under the Launch Plan and Assay Commercialization Plan. + +4.2.5 Geographies. Other than the Primary Countries set forth on Exhibit E, the Parties shall mutually agree upon any Secondary Countries where Achaogen plans to introduce Plazomicin, which such Secondary Countries shall thereafter be deemed to be Primary Countries and included in the Plazomicin Commercialization Plan and the Assay Commercialization Plan, in all cases no later than [***] prior to the anticipated launch of Plazomicin in any such country; provided, however, the parties agree that actual product registration may take longer than [***] ([***]) months. + +4.2.6 Selling, Marketing and Customer Support to Clinical Labs. Microgenics will establish and maintain a commercial infrastructure for the supply of the Assay, as well as adequate product support, customer support and regulatory support in each market where the Assay is introduced, including [***]. For clarity, Achaogen [***] the Assay to physicians and other prescribers and related individuals and organizations; provided, that, for clarity, Microgenics [***] of the Assay to any such physicians or other prescribers or related individuals and organizations. + +Page 12 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions. + + + + + +Confidential Treatment Requested by Achaogen, Inc. 4.2.7 Abandoned or Uninitiated Development or Commercialization of Assay. + +4.2.7.1 If, during the Term, Achaogen determines in good faith that Microgenics has ceased to develop, commercialize and market the Assay in a specific country within the Territory in which Achaogen has obtained or is in the process of obtaining Regulatory Approval for Plazomicin for a period of at least [***] ([***]) months ("Abandoned Commercialization" or "Abandoned Development," as applicable), then Achaogen may deliver to Microgenics written notice that Achaogen deems Microgenics to have Abandoned Commercialization. If Achaogen delivers such written notice to Microgenics, such notice shall set forth the basis for Achaogen's good faith determination. If Microgenics disagrees with Achaogen's determination that Microgenics has Abandoned Commercialization, then the Parties will meet within [***] ([***]) business days to discuss such disagreement. If the Parties cannot agree after such discussion, then the terms of Section 13.8 shall apply to resolve such Dispute. + +4.2.7.2 If it is finally determined pursuant to the procedures set forth in Section 4.2.7.1 that Microgenics has Abandoned Commercialization, then, within [***] ([***]) business days of such determination, Microgenics will commercialize and market the Assay for [***] ([***]) months after the written determination is received. After the [***] ([***]) months period has expired, Microgenics will continue to supply the Assay to Achaogen or its distributor pursuant to the terms of a supply agreement that the Parties will negotiate during the first [***] ([***]) months of the [***] month period described in the prior sentence; provided, that such supply agreement shall include an initial (i.e., for a period of no less than [***] ([***]) months) supply price that is no greater than [***] ([***]%) of the lowest price at which Microgenics has made the Assay available to its distributors, or any Third Party if there is no distributor, in the affected country. Microgenics shall [***] promptly assist Achaogen (and/or its designee) in obtaining all necessary Regulatory Approvals and/or modifying and/or transferring existing Regulatory Approvals to enable Achaogen (and/or its designee) to develop, make, have made, use, market, distribute, import, sell and offer for sale the Assay ([***]) in any applicable country. + +4.2.7.3 Solely in the event of Abandoned Development, the Parties acknowledge and agree that this Agreement does not supersede Section 5.3 of the Antibody Development Agreement and that Achaogen reserves all of its rights under Section 5.3 of the Antibody Development Agreement, including in the event of Abandoned Development. + +4.3 Supply. 4.3.1 Clinical Supply. Microgenics shall supply to Achaogen the amount of Assay ordered by Achaogen, if any, for use in any clinical trials or other development of Plazomicin in accordance with the delivery and shipment terms set forth in the Project Plan to the extent applicable. Achaogen shall provide to Microgenics confidential, non-binding good faith clinical trial and other development supply forecasts for each [***] ([***]) month period starting on [***] and [***] of each calendar year and shall deliver each forecast in writing at least [***] ([***]) days prior to the commencement of the applicable [***] ([***]) month period. The Parties shall agree on the exact date for the delivery of such Assay. Achaogen shall reimburse Microgenics at (a) a price of USD $[***] per patient result used to make diagnostic decisions for the applicable patient or (b) in the event the Assay is being commercialized at the time of supply, [***]; provided, however, in each case, if Microgenics utilizes any data from any clinical trial or other study conducted by Achaogen with Assay supplied under this Section 4.3.1, Achaogen shall have no obligation to reimburse Microgenics for such Assay. + +Page 13 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions. + + + + + +Confidential Treatment Requested by Achaogen, Inc. 4.3.2 Continued Supply. + +4.3.2.1 Microgenics shall ensure the continued worldwide supply of the Assay in quantities at least sufficient to meet each applicable Binding Forecast. Without limiting the foregoing, Microgenics agrees to maintain a safety stock of rare reagents sufficient to meet each applicable Binding Forecast for the Assay. Microgenics shall provide Achaogen at least [***] ([***]) months (or [***]) prior written notice of any possible shortfall in meeting each applicable Binding Forecast or other commercial demand for the Assay, and the Parties shall promptly meet and discuss all reasonable commercial resolutions if Microgenics is unable to assure supply as needed to meet each applicable Binding Forecast pursuant to the terms set forth in Section 4.3.2.2. + +4.3.2.2 In addition, in order to ensure security of supply of the Assay, within [***] o f Microgenics' receipt of the first Regulatory Approval for the Assay in any country in the Territory, Microgenics shall designate [***] (the "Back-up Supplier") which such Back-up Supplier shall be and remain qualified as a manufacturer of the Assay for the supply of the Assay for sale in the Territory. Microgenics shall [***] ensure that the Back-up Supplier can supply the Assay for sale in the Territory within [***] days. Microgenics will develop a manufacturing transition plan that will highlight [***] needed to complete the transition to the back-up supplier. This plan will be presented to the JSC prior to first commercial launch of the Assay. + +4.3.2.3 If, for any reason, [***], both Microgenics and the Back-up Supplier (as applicable) are unable to supply the Assay in quantities sufficient to meet the quantities of the Assay either (a) as set forth in each applicable Binding Forecast or (b) based on such other measure of commercial demand as agreed to by the Parties in writing, in either case, during any given [***] ([***]) month period for a given country in the Territory, then Microgenics hereby grants Achaogen or its designee a Shortfall License, which license shall survive until [***] ([***]) months following the date that either Microgenics or the Back-up Supplier (as applicable) is in a position again to fulfill such demand (as such positioning is demonstrated [***]) (the "Supply Resumption Date"). The Shortfall License shall expire automatically [***] ([***]) months after the Supply Resumption Date; provided, however, that (a) Achaogen shall be entitled to use, sell, offer for sale, and import any assay that are in inventory prior to the expiration of the Shortfall License (even if such activity occurs after expiration of the Shortfall License). Additionally, [***], Microgenics shall (i) make its personnel available for a reasonable period of time (not to exceed [***] ([***]) months) to effect a successful technology transfer with respect to the manufacture and commercialization of such Assay under the terms of this paragraph, (ii) provide Achaogen with copies of the physical embodiment of all processes, protocols, procedures, methods, tests and other intellectual property rights licensed to Achaogen under the Shortfall License, as applicable, related to Assay (including the manufacture thereof), (iii) supply [***] (including [***]) reasonably required to perform [***] as may be required by the applicable Regulatory Authorities, and upon request by Achaogen, [***], provide Achaogen (and/or its designee) with [***] related to the Assay, and (iv) promptly assist Achaogen (and/or its designee) in obtaining all necessary Regulatory Approvals and/or modifying and/or transferring existing Regulatory Approvals to enable Achaogen (and/or its designee) to develop, make, have made, use, market, distribute, import, sell and offer for sale the Assay ([***]). + +4.4 Audit Rights. 4.4.1 [***] during the Term, commencing on the [***] ([***]) [***] of the Effective Date, Achaogen shall have the right to inspect and audit [***] per calendar year (either by itself or through a Third Party reasonably acceptable to Microgenics) the Assay manufacturing process, facilities, procedures, + +Page 14 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions. + + + + + +Confidential Treatment Requested by Achaogen, Inc. and records upon reasonable notice (which shall be no less than [***] ([***]) calendar days prior notice, unless a shorter period is mutually agreed to by the Parties), and during normal business hours. Notwithstanding the foregoing, Achaogen shall have the right to conduct "for cause" audits (either by itself or through a Third Party reasonably acceptable to Microgenics) [***] during normal business hours of the [***], including in the event of a failure to supply the Assay as specified under Section 4.3.2. Any information shared with Achaogen or a Third Party under this Section 4.4.1 shall be considered Confidential Information. In connection with any such inspection or audit, Microgenics shall have no obligation to provide Achaogen and/or a Third Party access to Microgenics' Confidential Information related to any product other than the Assay. 4.4.2 Additionally, during the Term, Microgenics shall inform Achaogen within [***] ([***]) business days after receipt of any notice of an audit or inspection by ay Regulatory Authority which directly or indirectly relates to the Assay or the Assay manufacturing or distribution operations and Microgenics shall promptly provide to Achaogen in writing the results of any such audit or inspection within [***] ([***]) business days of receipt, including (a) a copy of any inspection reports, Form 483s, warning letters or similar such reports or warnings ("Audit Outcome"), to the extent such Audit Outcome solely addresses the Assay, or (b) a summary of such Audit Outcome, including verbatim text copies of portions thereof pertaining to the Assay, to the extent such Audit Outcome addresses the Assay and other matters, or (c) a summary of such Audit Outcome, to the extent that the Assay is not mentioned in such Audit Outcome; provided, that, in each case of clauses (a), (b), and (c), Microgenics' may redact from such copies or reports information that does not relate to the Assay, Plazomicin or this Agreement and the activities hereunder, and a summary of Microgenics proposed strategy for addressing any issues or violations noted during the course of such audit or inspection. 4.5 Labeling. 4.5.1 Assay Labeling. Microgenics shall be responsible for ensuring that all Assay packaging and labeling are in compliance with its Regulatory Approvals and Applicable Law. 4.5.2 Information for Labeling and Promotional Materials for Plazomicin. At the request of Achaogen, Microgenics shall provide to Achaogen such information related to the Assay which is in Microgenics' possession, for Achaogen's use and reference in the packaging and labeling (including package insert) and promotional materials for Plazomicin. + +4.5.3 Changes to Labeling. Achaogen will promptly notify Microgenics of any changes to Plazomicin labeling relevant for the Assay, including [***]. [***], such changes will be implemented by Achaogen with [***] in order to allow Microgenics to change any labeling on the Assay as a result of such changes to Plazomicin labeling. Similarly, Microgenics will promptly notify Achaogen of any changes to the Assay labeling, and Microgenics will implement such changes with [***] in order to allow Achaogen to change any labeling on Plazomicin as a result of such changes to the Assay labeling; provided, however, that Microgenics shall not make any such changes directed to Plazomicin (including, [***]) or which would otherwise require a change to the labeling for Plazomicin, without Achaogen's prior written approval. + +5 Governance. 5.1 Alliance Managers. 5.1.1 No later than [***] ([***]) days after the Effective Date, each of the Parties shall + +Page 15 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions. + + + + + +Confidential Treatment Requested by Achaogen, Inc. appoint one (1) representative as its alliance manager ("Alliance Manager"). The Alliance Managers shall have the right to attend all JSC and JPT meetings as non-voting participants and may bring to the attention of the JSC or JPT any matters or issues either of them reasonably believes should be discussed, and shall have such other responsibilities as set forth in Section 5.1.2 or as the Parties may mutually agree. Each Party may replace its Alliance Manager at any time or may designate different Alliance Managers by notice in writing to the other Party. 5.1.2 The Alliance Managers shall have responsibility for creating and maintaining a constructive work environment between the Parties. Without limiting the generality of the foregoing, each Alliance Manager shall: 5.1.2.1 identify and bring disputes and issues, including disputes that cannot be resolved by the JPT, that may result in disputes to the attention of the JSC in a timely manner, and function as the point of first referral in all matters of conflict resolution. In doing so, it is not intended that the Alliance Manager(s) act as a substitute for, or insert any delay in, the formal dispute resolution mechanisms set forth in Section 13.8, but rather that the Alliance Manager(s) shall endeavor to maintain a positive and constructive relationship between the Parties at the working level; 5.1.2.2 provide a single point of communication for seeking consensus both internally within the Parties' respective organizations and between the Parties; + +5.1.2.3 plan and coordinate cooperative efforts, internal communications and external communications between the Parties with respect to this Agreement; and + +5.1.2.4 take responsibility for ensuring that meetings and the production of meeting agendas and minutes occur as set forth in this Agreement, and that relevant action items resulting from such meetings are appropriately carried out or otherwise addressed. + +5.2 Joint Steering Committee. The Parties agree that the Research Program shall be managed by a Joint Steering Committee ("JSC") and that the JSC shall otherwise have responsibility for the general oversight of activities hereunder. No later than [***] ([***]) days after the Effective Date, each of the Parties shall appoint two (2) representatives to the JSC. The JSC shall be led by two (2) co-chairs, one (1) appointed by Microgenics and one (1) appointed by Achaogen. The JSC will make decisions by consensus, with Microgenics and Achaogen each having one vote. In the event of an impasse, the matter shall be resolved pursuant to Section 5.2.3 (Decision-Making). A Party may change any of its representatives at any time by giving [***] ([***]) days prior written notice to the other Party. 5.2.1 Responsibilities. In addition to its general responsibility to oversee and coordinate the development of the Assay according to the Project Plan and to assure the regular flow of information between the Parties, the JSC shall: (a) develop the Project Plan, monitor the progress of the Research Program, and review and approve all proposed changes to the Project Plan; (b) amend the Specifications for the Assay; (c) review and approve the [***] in accordance with Section [***] hereof; (d) oversee the activities of the JPT; (e) review and approve the most appropriate regulatory pathway for obtaining Regulatory + +Page 16 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions. + + + + + +Confidential Treatment Requested by Achaogen, Inc. Approval of the Assay; (f) review and approve the contents of all applications for Regulatory Approval and related and supporting submissions to Regulatory Authorities; (g) develop and manage clinical samples supply; (h) discuss pricing policy for the Assay in the Territory, including [***] and similar matters, to the extent permitted under Applicable Law; provided that, for clarity, [***]; (i) resolve disputes escalated by the Alliance Managers; provided that, if after [***], the JSC is unable to resolve any such dispute, such dispute shall be resolved in accordance with Section 5.2.3.2; (j) confirm completion of each event described in Section 7.1 if the Joint Project Team has not agreed that a Milestone has been completed; and (k) manage and coordinate the supply and commercialization of the Assay, including the initial commercial launch of the Assay and monitoring the progress of the Assay Commercialization Plan and Launch Plan. 5.2.2 Meetings. The JSC shall meet at least [***] during the Term at such place and time as is agreed upon by the Parties; provided, however, that in the event of an emergent situation, including a situation in which a decision by the JSC is required, a meeting shall be held within [***] ([***]) days after written request for such meeting by either Party. Meetings of the JSC may be conducted in person, by telephone or videoconference as agreed by the JSC or the Parties. When held in person, the location of the meetings shall alternate between Achaogen's facilities and Microgenics' facilities, unless otherwise mutually agreed by the Parties. The Alliance Managers shall be responsible for planning and scheduling the meetings and preparing the agenda. The Alliance Managers will record the minutes of each meeting (alternating between Achaogen and Microgenics). Minutes of each meeting of the JSC shall be exchanged for review, comment and approval by the members; provided that, if after [***] ([***]) days following the distribution of the minutes, neither Party has raised any objection, the minutes shall be deemed to have been approved by the Parties. Thereafter, the minutes shall be signed by the co-chairs and distributed to each of the Parties. Additionally, upon invitation by the JSC, the Functional Leaders (or other JPT members) may attend JSC meetings as non-voting members, and each JSC member may reasonably invite other guests to the meetings, in order to discuss special technical or commercial topics relevant to the applicable agenda; provided, that any guests are subject to the confidentiality provisions set forth in Article 12 (Confidentiality). 5.2.3 Decision-Making. 5.2.3.1 All decisions of the JSC shall be made in good faith in the interest of furthering the purposes of this Agreement and the JSC members shall use good faith efforts to make decisions unanimously. 5.2.3.2 If the JSC is unable to agree on any matter after good faith attempts to resolve such disagreement [***], then for matters that are [***], the JSC may refer the disagreement to a meeting between a senior executive (other than a JSC member) representing each Party (currently [***] for Achaogen and [***] for Microgenics) which meeting shall take place as soon as practicable, but in no event later than [***] ([***]) days after the date of the relevant referral. If the senior executives for Achaogen and Microgenics cannot resolve such disagreement over such [***] matter in a mutually acceptable manner within [***] ([***]) business days after such meeting then the matter shall be decided in accordance with Section 13.8.2. Notwithstanding the foregoing, except as otherwise provided in, and subject to the terms and conditions of, this Agreement: (a) [***], with appropriate consideration of the interests of [***], will have [***] that impact the development, + +Page 17 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions. + + + + + +Confidential Treatment Requested by Achaogen, Inc. manufacture or marketing of [***] and (b) [***], with appropriate consideration of the interests of [***], will have [***] that [***] impact the development, manufacture or marketing of [***]; provided, that, [***] shall not have decision-making authority regarding (i) [***], or (ii) [***], which such decisions shall require the mutual agreement of the Parties, or (iii) [***] (which the Parties acknowledge will be ultimately dictated by [***]), or (iv) [***]. 5.2.4 Expenses. Microgenics and Achaogen shall be responsible for all expenses incurred by its JSC members in connection with performing their duties hereunder, including all costs of travel, lodging and meals. 5.2.5 No Authority to Amend. For the avoidance of doubt, the JSC (and any Party exercising decision-making authority under Section 5.2.3.2) shall not have the authority to amend this Agreement, but the JSC shall have authority to amend the Project Plan and the Specifications as expressly set forth herein (and, for clarity, [***] shall not have decision-making authority with respect to any [***]). 5.3 Joint Project Team; Functional Leaders. 5.3.1 Formation. The Parties shall form a joint project team (the "Joint Project Team" or "JPT"). The JPT shall be comprised of a total of six (6) project team members from Microgenics and Achaogen, with Microgenics and Achaogen each designating a development leader, a regulatory leader, and a commercial leader (respectively, the "Development Leader", the "Regulatory Leader" and the "Commercial Leader", and collectively, the "Functional Leaders") who shall be the principal point of contact for each Party for matters relating to its respective function, and shall be responsible for implementing and coordinating, on a day-to-day basis, all activities and facilitating the exchange of information between the Parties regarding the Project Plan for his or her function. Notwithstanding the foregoing, the Regulatory Leaders and Commercial Leaders may be appointed at such time as the Parties deem appropriate to facilitate the development of the Assay and a successful commercial launch of Plazomicin and the Assay. 5.3.2 Responsibilities. The JPT shall have responsibility for coordinating all development, regulatory, commercial and other business and technical activities under this Agreement. In addition to its general responsibility to deliver the development of the Assay according to the Project Plan and to assure the regular flow of information between the Parties, the JPT shall: (a) recommend changes to the Project Plan, Launch Plan and Assay Commercialization Plan to the JSC, (b) monitor the activities vs budget to the JSC, (c) recommend changes to the Specifications for the Assay to the JSC; (d) communicate progress to the JSC; (e) plan the regulatory pathway for obtaining Regulatory Approval of the Assay; and (f) prepare all applications for Regulatory Approval and related and supporting submissions to Regulatory Authorities. 5.3.3 Members. No later than [***] ([***]) days after the Effective Date, each Party shall provide the other with the names of its JPT members and Functional Leaders (other than the Regulatory Leaders and Commercial Leaders). Microgenics and Achaogen may replace its JPT members and Functional Leaders at any time and for any reason upon written notice to the other Party. 5.3.4 Sub-Teams. The JPT and Functional Leaders may delegate tasks and + +Page 18 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions. + + + + + +Confidential Treatment Requested by Achaogen, Inc. responsibilities to sub-managers, working groups and other team members as they deem appropriate to efficiently and effectively perform their respective obligations hereunder. 5.3.5 Meetings. The JPT shall meet as soon as practicable after the Effective Date and thereafter during the performance of the Project Plan, at least [***], and at such additional times as the JPT or the Parties reasonably deem appropriate; provided, that, following the completion of the Project Plan, the JPT shall continue to meet no less frequently than [***]. Meetings of the JPT may be conducted in person, by telephone or videoconference as agreed by the JPT or the Parties. Additionally, the JPT and the Functional Leaders (or their designees) shall maintain close regular communications with each other as to the status of the ongoing and planned activities under the Project Plan, Launch Plan and Assay Commercialization Plan. Each JPT member may reasonably invite other guests to the meetings, in order to discuss special technical or commercial topics relevant to the applicable agenda; provided, that any guests are subject to the confidentiality provisions set forth in Article 12. 5.3.6 No Authority to Amend. Neither the JPT nor the Functional Leaders (or their designees) shall have authority to amend this Agreement or the Project Plan, but may make recommendations regarding such amendments to the JSC. 5.3.7 Dispute Resolution. The JPT and the Functional Leaders will cooperate with each other and work in good faith to resolve any disagreements between them or their respective teams. Any such disagreements that are not resolved by the JPT shall be raised to the Alliance Managers for internal escalation if needed. 5.3.8 Records. The JPT shall keep accurate and complete records of their activities and meetings and shall, from time to time as requested by the JSC, provide the JSC with appropriate updates and information to keep the JSC apprised of the progress of the Project Plan, Launch Plan and Assay Commercialization Plan. All records of the JPT that are disclosed to the other Party and which relate to the Project Plan shall be available at all times to the JSC and to each Party on a confidential basis solely for use with respect to such Party's activities conducted pursuant to this Agreement. 5.3.9 Expenses. Microgenics and Achaogen shall be responsible for all expenses incurred by its JPT members in connection with performing their duties hereunder, including all costs of travel, lodging and meals. 5.4 Reporting. The Parties shall keep each other promptly informed on an ongoing basis through the Joint Project Team and the JSC on the progress of the Project Plan, the Launch Plan and the Assay Commercialization Plan, including forecasts of expected performance and completion of activities. Without limiting the foregoing, within [***] ([***]) days following [***] of each calendar year during the Term, Microgenics shall provide to Achaogen a written progress report in English, in a form to be agreed upon by the JSC, which shall include any information required under the Project Plan and as otherwise reasonably determined by the JSC relating to the progress of the goals or performance of the development, commercialization and other activities under the Project Plan, the Launch Plan and the Assay Commercialization Plan. 6 Grant of License 6.1 Exclusive License by Achaogen. During the Term, and without limiting Section 4.2, Achaogen hereby grants to Microgenics a royalty-free, exclusive, worldwide license to use the Achaogen + +Page 19 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions. + + + + + +Confidential Treatment Requested by Achaogen, Inc. Know-How, Achaogen Patents, and Achaogen Materials to research, develop, manufacture, use, market and sell the Assay in the Territory. [***]. 6.2 License by Microgenics. During the Term, Microgenics hereby grants to Achaogen and its Affiliates a royalty- free, non-exclusive, sub-licenseable, worldwide license, under and with respect to the Immunoassay Technologies, Microgenics Know- How and any Patents or Patent applications Controlled by Microgenics or its Affiliates to the extent reasonably necessary for Achaogen to perform its obligations or exercise its rights under this Agreement or as is otherwise reasonably necessary to make, have made, use, sell, offer for sale, import and otherwise commercialize Plazomicin. For the avoidance of doubt, the foregoing license grant does not provide any license or right for Achaogen to make, have made, use, sell, offer for sale, import or otherwise commercialize the Assay, except in connection with Achaogen's exercise of the Shortfall License or Transfer License. 6.3 [***] Products and Joint Patents. Each Party shall be entitled to grant non-exclusive licenses to any Third Party under its interest in a [***] Products or Joint Patent [***]. [***], and if in certain countries the grant of a license, in order to be effective, requires declarations from the other Party, the other Party shall reasonably cooperate and provide the necessary declarations. 6.4 No Implied License. Achaogen retains all rights in and to the Achaogen Patents and Achaogen Know-How. Microgenics retains all rights in and to the Immunoassay Technologies and Microgenics Know-How. Only the licenses and other rights expressly granted by one Party to the other Party under terms of this Agreement are of any legal force or effect. No other licenses or other rights are granted, conveyed or created (whether by implication, estoppel or otherwise). 7 Consideration to Microgenics 7.1 Development Payments. In consideration of the development efforts of Microgenics under the Research Program, Achaogen shall pay to Microgenics the following one-time payments upon the occurrence of the corresponding events: (a) USD $[***] upon the successful completion of Phase 0: [***] as determined in accordance with the Project Plan, including delivery by Microgenics of all deliverables required by the Project Plan for Phase 0; (b) USD $[***] upon the successful completion of Phase 1: [***] as determined in accordance with the Project Plan, including delivery by Microgenics of all deliverables required by the Project Plan for Phase 1; (c) USD $[***] upon the successful completion of Phase 2: [***] as determined in accordance with the Project Plan, including delivery by Microgenics of all deliverables required by the Project Plan for Phase 2; (d) USD $[***] upon the successful completion of Phase 3: [***] as determined in accordance with the Project Plan, including delivery by Microgenics of all deliverables required by the Project Plan for Phase 3; (e) USD $[***] upon the successful completion of the first milestone of Phase 4: [***] as determined in accordance with the Project Plan, including delivery by Microgenics of + +Page 20 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions. + + + + + +Confidential Treatment Requested by Achaogen, Inc. all deliverables required by the Project Plan for the first milestone of Phase 4; (f) USD $[***] upon the successful completion of the second milestone of Phase 4: [***] as determined in accordance with the Project Plan, including delivery by Microgenics of all deliverables required by the Project Plan for the second milestone of Phase 4; (g) USD $[***] upon the successful completion of the third milestone of Phase 4: [***] as determined in accordance with the Project Plan, including delivery by Microgenics of all deliverables required by the Project Plan for the third milestone of Phase 4; (h) [***], USD $[***] upon the successful completion of the fourth milestone of Phase 4: [***] a s determined in accordance with the Project Plan, including delivery by Microgenics of all deliverables required by the Project Plan for the fourth milestone of Phase 4; (i) USD $[***] upon the successful completion of the first milestone of Phase 5: [***] as determined in accordance with the Project Plan, including delivery by Microgenics of all deliverables required by the Project Plan for the first milestone of Phase 5; (j) USD $[***] upon the successful completion of the second milestone of Phase 5: [***] as determined in accordance with the Project Plan, including delivery by Microgenics of all deliverables required by the Project Plan for the second milestone of Phase 5; (k) [***]; and (l) [***] and assuming [***], USD $[***] upon [***]; provided, however, this amount [***]. Thereafter, no additional payments shall be due and payable to Microgenics by Achaogen for any Assay [***]. 7.2 Invoices; Mechanism of Payment. Upon the completion of each event as described in Section 7.1, Microgenics will invoice Achaogen within [***] ([***]) business days. Microgenics agrees to submit invoices to Achaogen (on a timely basis) for all payments due hereunder. Invoices shall reference Achaogen's contract number and the purchase order number. The invoices due under this Agreement shall be submitted to: Achaogen Inc. 7000 Shoreline Court, #371 South San Francisco, CA 94080 Reference: Achaogen Contract No. _____________, Attn.: _______ Email: All payments due Microgenics under this Agreement shall be made by Achaogen in United States dollars within [***] ([***]) days after receipt of the applicable invoice by ACH transfer to the credit and account of Microgenics at the following account: [***]. + +Page 21 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions. + + + + + +Confidential Treatment Requested by Achaogen, Inc. 7.3 Taxes. 7.3.1 Withholding. Microgenics shall be liable for all income and other taxes (including interest) imposed upon any payments made by Achaogen to Microgenics under this Agreement. In the event that any Applicable Law requires Achaogen to withhold taxes with respect to any payment to be made by Achaogen pursuant to this Agreement, Achaogen will notify Microgenics of such withholding requirement prior to making the payment to Microgenics and provide such assistance to Microgenics, including the provision of such documentation as may be required by a tax authority, as may be reasonably necessary in Microgenics' efforts to claim an exemption from or reduction of such taxes. Achaogen will, in accordance with such Law withhold taxes from the amount due, remit such taxes to the appropriate tax authority, and furnish Microgenics with proof of payment of such taxes within [***] ([***]) days following the payment. If taxes are paid to a tax authority, Achaogen shall provide reasonable assistance to Microgenics to obtain a refund of taxes withheld, or obtain a credit with respect to taxes paid. 7.3.2 VAT. All payments due to Microgenics from Achaogen pursuant to this Agreement shall be paid exclusive of any value-added tax ("VAT") (which, if applicable, shall be [***]). If Microgenics is required to report any such tax, Achaogen shall promptly provide Microgenics with applicable receipts and other documentation necessary or appropriate for such report. 8 Intellectual Property Rights; Ownership 8.1 Ownership of Discoveries and Inventions. Achaogen shall own all discoveries and inventions made by one or both of the Parties as part of the Research Program, whether or not patentable, relating (i) solely to Plazomicin, the Achaogen Patents, the Achaogen Know-How, and Achaogen Materials or (ii) [***] (each of (i) and (ii), "Achaogen Inventions"). Microgenics shall own all inventions and discoveries made by one or both of the Parties as part of the Research Program, whether or not patentable, relating solely to Microgenics Cell Lines, Microgenics [***] Antibodies, the Assay, Immunoassay Technologies and Microgenics Know-How ("Microgenics Inventions"). For all other inventions and discoveries, whether or not patentable, made by the Parties as part of the Research Program, whether individually or jointly, inventorship shall be determined pursuant to the inventorship principles arising under the patent laws of the United States of America, [***] ("[***] Products"). Each Party shall ensure that each of its employees and other representatives performing activities hereunder has agreed to assign to it all discoveries and inventions made by such employee or other representative in the course of his or her employment. 8.2 Patent Procurement. 8.2.1 Achaogen and Microgenics shall each disclose to the other any inventions and discoveries made during the course of the Research Program. Achaogen shall be responsible for the prosecution and maintenance of any Patent applications and Patents claiming or covering any Achaogen Inventions, and Microgenics shall be responsible for the prosecution and maintenance of any Patent applications and Patents claiming or covering any Microgenics Inventions; provided, that [***] shall not, without first obtaining [***] prior written consent, file any Patent claiming or covering the [***]; provided, further, that, in the event that any such Patent applications covering or claiming any [***] are filed without first obtaining [***] prior written consent, then [***] hereby grants [***] a perpetual, irrevocable, fully paid-up, royalty-free, worldwide, sublicenseable, non-exclusive license under such Patent applications and any Patents issuing therefrom or related thereto for the purpose of developing, manufacturing, using or commercializing [***]. + +Page 22 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions. + + + + + +Confidential Treatment Requested by Achaogen, Inc. 8.2.2 With respect to any Patent applications and Patents claiming or covering any [***] Products, the Parties shall meet to determine in what countries, if any, Patent applications claiming such [***] Products should be filed and the appropriate filing Party (a "Joint Patent"). The Parties shall [***] by the Party filing such patent applications in connection with any Joint Patents. If a Party elects [***] related to any Joint Patent, the other Party shall provide written notice upon the decision to [***] and the Party not giving such notice shall have the right to assume responsibility for any such prosecution or maintenance, [***]. 8.3 Prosecution, Review, Cooperation. 8.3.1 The Party responsible for prosecuting and maintaining a given Patent pursuant to Section 8.2.1 or 8.2.2 (i.e., Microgenics with respect to Patents claiming or covering any Microgenics Inventions and the Assay Patent and the Party agreed to by the Parties with respect to Joint Patents) (the "Responsible Party") shall keep the other Party (the "Review Party") reasonably informed regarding the status of the filing, prosecution and maintenance of each applicable Patents, and shall provide the Review Party with copies of all documentation concerning each applicable Patent, including all correspondence to and from any Governmental Authority relating thereto. Prior to filing an applicable Patent application for, or material prosecution documents or other submissions relating to, an applicable Patent, the Responsible Party shall provide the Review Party with a reasonable opportunity to review and comment on the proposed application, document or submission, and the Responsible Party shall reasonably consider all such comments and incorporate such comments. In the event that the Responsible Party elects to abandon any applicable Patent, the Responsible Party shall notify the Review Party in writing (such notice, an "Abandonment Notice") at least [***] ([***]) days prior to any filing or payment due date or any other due date that requires action to prevent loss of rights, and in the event that the Review Party provides the Responsible Party with written notice within [***] ([***]) days of receipt of the applicable Abandonment Notice, the Review Party shall thereafter have the right, [***], to conduct such filing, prosecution and maintenance for the applicable Patent. 8.3.2 Each of the Parties shall execute or have executed by its employees, representatives and agents such documents as may be reasonably necessary to obtain, perfect, or maintain any Patent rights which would be filed pursuant to this Agreement and to cooperate with the other Party, [***], as reasonably necessary with respect to the prosecution of such Patent rights. 8.4 Ownership. The Achaogen Patents, Achaogen Know-How and the Achaogen Materials shall at all times remain the sole property of Achaogen. Microgenics shall not use the Achaogen Know-How or the Achaogen Materials to develop or market, or have developed or marketed, any Assay for any Third Party. The Microgenics Cell Lines, Microgenics [***] Antibodies, Immunoassay Technologies and Microgenics Know-How shall remain the sole property of Microgenics. Except as may otherwise be expressly permitted pursuant to the terms and conditions of this Agreement, Achaogen shall not use the Microgenics Cell Lines, Microgenics Monoclonal Antibodies, Immunoassay Technologies and Microgenics Know-How to develop, manufacture, or market, or have developed, manufactured, or marketed, the Assay or any additional assay(s) for Plazomicin or any other compound/substance. 8.5 Enforcement. Each Party shall immediately notify the other if it becomes aware of any infringement, anywhere in the world, of any issued Patent within the Joint Patents. The Parties shall mutually determine whether to take action to obtain a discontinuance of infringement or bring suit against a Third Party infringer of any Joint Patents within [***] ([***]) days from the date of notice; provided that neither + +Page 23 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions. + + + + + +Confidential Treatment Requested by Achaogen, Inc. Party shall be obligated to join any such action. In the event that either Party does not want to join as a Party plaintiff, then the Party not seeking to enforce such infringement claims shall have the right to assign the relevant Joint Patents to the other Party; provided that such assignment is solely and sufficient for purposes of commencing and maintaining the action. The Party seeking to enforce such infringement claims [***] of any suit brought by it claiming infringement of any Joint Patent. The Parties will reasonably cooperate, at the expense of the Party seeking to enforce such infringement claim, in any such suit and shall have the right to consult with the other Party and to participate in and be represented by independent counsel in such litigation [***]. Any recoveries obtained by Achaogen or Microgenics, as applicable, as a result of any proceeding against such a Third Party infringer shall be allocated as follows: (a) such recovery shall first be used to reimburse each Party for all reasonable attorney fees and other litigation costs actually incurred in connection with such litigation by that Party, and (b) any remainder shall be shared [***] by the Parties. 8.6 Patent Infringement. Each Party shall immediately notify the other if a claim or other proceeding is brought against either Party alleging infringement of Third Party Patent rights based upon the manufacture, use or sale of the Assay. The Parties shall immediately consult on how to proceed with respect to defending against any such claim of infringement. 8.7 Third Party Licenses. Microgenics shall be solely responsible, at its own expense, for obtaining rights under any Third Party intellectual property necessary for Microgenics to perform its obligations under this Agreement and Achaogen shall be under no obligation to provide support therefor, financial or otherwise. 8.8 Trademarks. As between the Parties, Microgenics shall own all right, title and interest in and to any Trademarks developed by or for Microgenics for use in connection with the Assay. Microgenics hereby grants to Achaogen a royalty-free non- exclusive right to use such Trademarks in connection with advertising, promoting and marketing Plazomicin, subject to Section 12.5 (Non-Use of Names). All use of Microgenics' Trademarks by Achaogen shall inure to the sole benefit of Microgenics. As between the Parties, Achaogen shall own all right, title and interest in and to all Trademarks developed by or for Achaogen for use in connection with Plazomicin. 9 Term and Termination 9.1 Term. This Agreement shall be effective as of the Effective Date and unless terminated earlier by mutual written agreement of the Parties or pursuant to Section 9.2 (Termination At Will) or Section 9.3 (Termination for Cause) below, the term of this Agreement shall continue in effect until Achaogen ceases development and commercialization of Plazomicin ("Term"). 9.2 Termination At Will. Achaogen may terminate this Agreement in its entirety, for any reason, by providing at least sixty (60) days prior written notice to Microgenics. 9.3 Termination for Cause. This Agreement may be terminated in its entirety by written notice by either Party at any time: 9.3.1 For material breach by the other Party, which breach remains uncured for ninety (90) days from the date written notice of such breach is given to the breaching Party, or, if such breach is not susceptible of cure within such ninety (90) day period and the breaching Party uses diligent good faith efforts to cure such breach, for one hundred eighty (180) days after written notice to the breaching Party if such breach remains uncured; or + +Page 24 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions. + + + + + +Confidential Treatment Requested by Achaogen, Inc. 9.3.2 Upon the filing or institution of bankruptcy, reorganization, liquidation or receivership proceedings, or upon an assignment of a substantial portion of the assets for the benefit of creditors by the other Party, or in the event a receiver or custodian is appointed for such Party's business, or if a substantial portion of such Party's business is subject to attachment or similar process; provided, however, that in the case of any involuntary bankruptcy proceeding such right to terminate shall only become effective if the proceeding is not dismissed within sixty (60) days after the filing thereof. 9.4 Effect of Termination. Upon termination of this Agreement pursuant to Sections 9.1 (Term), Section 9.2 (Termination At Will) or 9.3 (Termination for Cause): 9.4.1 All rights and licenses granted under Section 6.1 (License by Achaogen) of this Agreement shall terminate and all rights to the Achaogen Patents and Achaogen Know-How shall revert to Achaogen. 9.4.2 All rights and licenses granted under Section 6.2 (License by Microgenics) of this Agreement shall terminate and, subject to Section 9.4.4, all rights to the Immunoassay Technologies and Microgenics Know-How shall revert to Microgenics. 9.4.3 Microgenics shall promptly return or destroy (as directed by Achaogen) to Achaogen all Achaogen Know- How and Achaogen Materials provided to Microgenics hereunder, and, subject to Section 9.4.4, Achaogen shall promptly return to Microgenics all Microgenics Know-How provided to Achaogen hereunder; 9.4.4 Solely in the case of termination of this Agreement by Achaogen under Section 9.3 (Termination for Cause): 9.4.4.1 Microgenics hereby grants Achaogen a Transfer License; provided, that, Achaogen covenants not to use the Transfer License beyond the scope set forth in Section 1.33. In the event that Microgenics reasonably believes that Achaogen has breached the foregoing covenant, Microgenics shall provide written notice thereof, including reasonable supporting evidence, and, in the event that Achaogen agrees with such written notice and does not indicate to Microgenics that it will conform its activities to the scope of the Transfer License within [***] ([***]) business days after receiving the written notice, then the Transfer License shall be void as of the end of [***] period described in this sentence. If Achaogen indicates that it will so conform its activities, then the Transfer License shall remain in full force and effect. In the event that Achaogen disagrees with such written notice and advises Microgenics of such disagreement, the Parties shall submit this matter to the Dispute resolution process in 13.8. For purposes of resolving any disputes regarding the Transfer License, the Parties agree to complete the Dispute resolution process in 13.8 within [***] from the date of Microgenics' first written notice of the breach of the covenant found in the proviso to the first sentence of this Section 9.4.4.1(i). If after concluding the Dispute resolution process in 13.8 it is determined that the covenant found in the proviso was breached, then the Transfer License shall terminate immediately. In the event that the Transfer License is granted, Achaogen shall owe no payments to Microgenics for the first [***] ([***]) months that any Assay commercialized under the Transfer License is commercialized and shall pay a [***] percent ([***]%) royalty on its net sales (i.e., gross sales less all deductions, reductions and offsets reasonably taken in accordance with generally accepted accounting principles in the United States) of Assays commercialized under the Transfer License following the end of such [***] ([***]) month + +Page 25 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions. + + + + + +Confidential Treatment Requested by Achaogen, Inc. period. 9.4.4.2 Microgenics shall (a) make its personnel available for a reasonable period of time (not to exceed [***] ([***]) months) to effect a successful technology transfer with respect to the manufacture and commercialization of the Assay, (b) provide Achaogen with copies of the physical embodiment of all processes, protocols, procedures, methods, tests and other intellectual property rights licensed to Achaogen under the Transfer License, as applicable, related to the Assay (including the manufacture thereof), (c) supply [***] (including [***]) reasonably required to perform [***] as may be required by the applicable Regulatory Authorities, and upon request by Achaogen, [***], provide Achaogen (and/or its designee) with [***] related to the Assay, and (d) promptly assist Achaogen (and/or its designee) in obtaining all necessary Regulatory Approvals and/or modifying and/or transferring existing Regulatory Approvals to enable Achaogen (and/or its designee) to develop, make, have made, use, market, distribute, import, sell and offer for sale the Assay ([***]). 9.4.4.3 If, at the date of the actual termination of this Agreement, Microgenics is commercializing the Assay, such termination shall be suspended, and Microgenics shall continue to supply the Assay to the market, until [***]; provided that (i) such period shall not extend beyond an additional [***] ([***]) months from the date of the actual termination of this Agreement, (ii) Achaogen, itself or through or in conjunction with a Third Party, may commercialize another assay for use in conjunction with Plazomicin (i.e., Microgenics shall lose its commercial exclusivity), and (iii) Section 4.2.3 shall be of no force or effect during any such suspended termination. 9.4.5 If this Agreement is terminated during the Term at any time by Achaogen under Section 9.2 (Termination At Will) or by Microgenics under Section 9.3 (Termination for Cause), the following terms shall apply: 9.4.5.1 Solely to the extent the expiration or termination of this Agreement occurs prior to the payment of all development payments described in Section 7.1, Achaogen shall pay to Microgenics an amount equal to the first applicable unpaid development payment as described in Section 7.1 (Development Payments) for the period in which the Agreement is terminated or expires (for illustrative purposes only, if Achaogen provides notice of termination under Section 9.1 (Term) prior to the completion of the Phase 3: [***], then Achaogen shall pay an amount equal to USD $[***] to Microgenics pursuant to the terms of Section 7.2 (Invoices; Mechanism of Payment)); provided, that, notwithstanding the foregoing, no payment shall be due under this Section 9.4.5.1 in the event that this Agreement is terminated by Achaogen under Section 9.2 (Termination At Will) at any time in connection with the failure to obtain, or maintain, Regulatory Approval for Plazomicin; and 9.4.5.2 for a period of two (2) years after the expiration or termination date of this Agreement pursuant to Section 9.4.5, in the event Achaogen decides to continue to develop and commercialize Plazomicin, Achaogen shall provide written notice thereof to Microgenics and, upon Achaogen's receipt of a written proposal from Microgenics, the Parties shall use good faith efforts to negotiate a definitive agreement for the continued development, manufacture, supply and sale of the Assay by Microgenics on commercially reasonable terms; provided, however, that nothing in this Section 9.4.5.2 shall (a) obligate Achaogen to enter into any new agreement with Microgenics with respect to the development, manufacture, supply or sale of the Assay or (b) prohibit Achaogen from negotiating or entering into an agreement with any Third Party with respect to the development, manufacture, supply or sale of any assay. + +Page 26 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions. + + + + + +Confidential Treatment Requested by Achaogen, Inc. 9.4.6 The termination, expiration or non-renewal of this Agreement shall not relieve either Party from any obligation that accrues pursuant to this Agreement before the effective date of the termination or expiration nor shall it release the Parties from any obligation that may have been incurred as a result of operations conducted under this Agreement. 9.5 Survival. Termination of this Agreement for whatever reason in accordance with the provisions hereof or expiration of this Agreement shall not affect the accrued rights of the Parties, and shall not limit remedies that may be otherwise available in law or equity. Article 1 (Definitions), Section 4.1 (Manufacture), 8 (Intellectual Property Rights; Ownership) (except for Section 8.8 (Trademarks) (unless Achaogen intends to commercialize the Assay upon termination)), 11 (Indemnification), 12 (Confidentiality), and 13 (Miscellaneous) and Section 3.6 (Right of Reference) (but only in the event that Achaogen intends to commercialize the Assay upon termination), 9.4 (Effect of Termination) and 9.5 (Survival) shall survive expiration or termination of this Agreement for any reason. All other rights and obligations will terminate upon expiration of this Agreement. 10 Representations and Warranties 10.1 Representations and Warranties of Each Party. Each of Achaogen and Microgenics hereby represents, warrants and covenants to the other Party hereto as follows: 10.1.1 it is a corporation or other entity duly organized and validly existing under the laws of the state or other jurisdiction of incorporation or formation; 10.1.2 the execution, delivery, and performance of this Agreement by such Party has been duly authorized by all requisite corporate action and does not require any shareholder action or approval; 10.1.3 no consent, approval, order or authorization of, or registration, declaration or filing with, or exemption by, any Third Party or any governmental entity is required by or with respect to such Party in connection with the execution, delivery and performance of this Agreement; 10.1.4 this Agreement constitutes a valid and legally binding obligation of such Party, enforceable against such Party in accordance with its respective terms, except as may be limited by (a) applicable bankruptcy, insolvency, reorganization or other laws of general application relating to or affecting the enforcement of creditors' rights generally and (b) the effect of rules of law governing the availability of equitable remedies; 10.1.5 the execution, delivery and performance of this Agreement do not and will not conflict with, or result in any violation of, or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation that would result in the creation of any encumbrance upon any of the assets owned by such Party under, any material provision of Applicable Law, of such Party's organizational documents or of any agreement, judgment, injunction, order, decree, or other instrument binding on such Party or any assets owned by such Party; and 10.1.6 it shall comply with all material Applicable Laws relating to its activities under this Agreement. 10.2 Representations and Warranties of Microgenics. In addition to the representations and + +Page 27 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions. + + + + + +Confidential Treatment Requested by Achaogen, Inc. warranties made by Microgenics under Section 10.1 (Representations and Warranties of Each Party) above, Microgenics further represents and warrants to Achaogen that: 10.2.1 it has the capacity and resources (including [***]) to (i) develop, manufacture and supply the Assay in and for the Territory, and (ii) commercialize the Assay in the Primary Countries; 10.2.2 and further covenants that, the Assay shall be developed, manufactured, commercialized, and shall function, in accordance with applicable GMP, Specifications and Applicable Laws; 10.2.3 it has the capacity and resources to develop (including [***]), manufacture and commercialize the Assay in accordance with this Agreement, including in accordance with the Project Plan; 10.2.4 to the best of its knowledge, the development, manufacture, use and sale of the Assay will not infringe any issued Patents in the Territory owned or controlled by any Third Party; and 10.2.5 it owns or controls all rights to the Microgenics Cell Lines, Microgenics [***] Antibodies, and Immunoassay Technologies. 10.3 Representations and Warranties by Achaogen. In addition to the representations and warranties made by Achaogen under Section 10.1 (Representations and Warranties of Each Party) above, Achaogen further represents and warrants to Microgenics that: 10.3.1 it owns, controls or has the right and ability to grant Microgenics the licenses under its (and its Affiliates) rights in the Achaogen Patents (as listed in Exhibit B hereto) related to the use of Plazomicin, pursuant to this Agreement; and 10.3.2 it owns, controls or has the right and ability to provide to Microgenics the Achaogen Materials for development, manufacture, marketing, and sale of the Assay pursuant to this Agreement. 10.4 Debarment and Exclusion. Achaogen and Microgenics represent and warrant that neither it, nor any of its employees or agents working on the subject matter of this Agreement, has ever been, is currently, or is the subject of a proceeding that could lead to it becoming, as applicable, a Debarred Entity or Debarred Individual, an Excluded Entity or Excluded Individual or a Convicted Entity or Convicted Individual, nor are they listed on the FDA's Disqualified/Restricted List for clinical investigators. Each Party further covenant, represent and warrant that if, during the Term, it, or any of its employees or agents working on their behalf, becomes or is the subject of a proceeding that could lead to that Party with respect to the subject matter hereof, becoming, as applicable, a Debarred Entity or Debarred Individual, an Excluded Entity or Excluded Individual or a Convicted Entity or Convicted Individual, or added to FDA's Disqualified/Restricted List for clinical investigators, the Party shall immediately notify the other Party. This provision shall survive termination or expiration of this Agreement. For purposes of this provision, the following definitions shall apply: 10.4.1 A "Debarred Individual" is an individual who has been debarred by the FDA pursuant to 21 U.S.C. §335a (a) or (b) from providing services in any capacity to a person that has an approved or pending drug product application. 10.4.2 A "Debarred Entity" is a corporation, partnership or association that has been debarred by the FDA pursuant to 21 U.S.C. §335a (a) or (b) from submitting or assisting in the submission of + +Page 28 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions. + + + + + +Confidential Treatment Requested by Achaogen, Inc. any abbreviated drug application, or a subsidiary or Affiliate of a Debarred Entity. 10.4.3 An "Excluded Individual" or "Excluded Entity" is (a) an individual or entity, as applicable, who has been excluded, debarred, suspended or is otherwise ineligible to participate in federal health care programs such as Medicare or Medicaid by the Office of the Inspector General (OIG/HHS) of the U.S. Department of Health and Human Services, or (b) is an individual or entity, as applicable, who has been excluded, debarred, suspended or is otherwise ineligible to participate in federal procurement and non- procurement programs, including those produced by the U.S. General Services Administration (GSA). 10.4.4 A "Convicted Individual" or "Convicted Entity" is an individual or entity, as applicable, who has been convicted of a criminal offense that falls within the ambit of 42 U.S.C. §1320a - 7(a), but has not yet been excluded, debarred, suspended or otherwise declared ineligible. 10.4.5 "FDA's Disqualified/Restricted List" is the list of clinical investigators restricted from receiving investigational drugs, biologics or devices if the United State Food and Drug Administration ("FDA") has determined that the investigators have repeatedly or deliberately failed to comply with regulatory requirements for studies or have submitted false information to the study sponsor. 10.5 Disclaimer. EXCEPT FOR THE EXPRESS REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS AGREEMENT, NEITHER MICROGENICS NOR ACHAOGEN MAKES, AND EACH HEREBY EXPRESSLY DISCLAIMS, ANY REPRESENTATIONS OR WARRANTIES, EITHER EXPRESS OR IMPLIED, WHETHER IN FACT OR IN LAW, INCLUDING ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR NON-INFRINGEMENT. 10.6 No Representations Regarding Approval or Commercial Success. Neither Party makes any representations or warranties as to: (a) whether Plazomicin or the Assay will be approved for commercial sale by the applicable Regulatory Authorities; or (b) the commercial potential or success of Plazomicin or the Assay. 11 Indemnification 11.1 Indemnification by Achaogen. Achaogen shall indemnify, defend and hold harmless Microgenics and its Affiliates and each of its and their respective employees, officers, directors and agents (each a "Microgenics Indemnified Party") from and against any and all liabilities, damages, penalties, expenses and/or losses (including reasonable legal expenses and attorneys' fees) (collectively, "Losses"), resulting from any Third Party suits, claims, actions or demands (collectively, "Third Party Claims"), to the extent arising out of or relating to: (a) the breach by Achaogen of any representation, warranty or covenant contained in this Agreement; (b) the willful misconduct or negligent acts or omissions of Achaogen, its Affiliates or any of their respective employees, officers, directors or agents; (c) the manufacture, promotion, distribution, use, testing, marketing or sale of pharmaceutical products containing Plazomicin by Achaogen or its Affiliates; or (d) claims of infringement of Third Party Patents based upon the manufacture, use or sale of Plazomicin; except, in each case, to the extent such Losses result from clauses (a), (b), (c) or (d) of Section 11.2 (Indemnification by Microgenics). 11.2 Indemnification by Microgenics. Microgenics shall indemnify, defend and hold harmless Achaogen and its Affiliates and each of its and their respective employees, officers, directors and agents (each a "Achaogen Indemnified Party") from and against any and all Losses, resulting from any Third Party + +Page 29 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions. + + + + + +Confidential Treatment Requested by Achaogen, Inc. Claims, to the extent arising out of or relating to: (a) the breach by Microgenics of any representation, warranty or covenant contained in this Agreement; (b) the willful misconduct or negligent acts of Microgenics, its Affiliates or any of their respective employees, officers, directors, or agents; (c) the manufacture, promotion, distribution, use, testing, marketing or sale of the Assay; or (d) claims of infringement of Third Party Patents based upon the manufacture, use or sale of the Assay; except, in each case, to the extent such Losses result from clauses (a), (b) (c) or (d) of Section 11.1 (Indemnification by Achaogen). 11.3 Conditions to Indemnification The obligations of the indemnified Party under Sections 11.1 (Indemnification by Achaogen) and 11.2 (Indemnification by Microgenics) are conditioned upon the delivery of written notice to the indemnifying Party of any potential liability promptly after the indemnified Party become aware of such potential liability; provided, however, that the failure to give such notice promptly shall not impair a Party's right to indemnification under this Section 11.3 (Conditions to Indemnification) unless the delay in providing such notice has a material adverse effect on the ability of the indemnifying Party to defend against such liability. The indemnifying Party shall have the right to assume the defense of any suit or claim relating to the liability if it has assumed responsibility for the suit or claim in writing; however, if in the reasonable judgment of the indemnified Party, such suit or claim involves an issue or matter which could have a material adverse effect on the business operation or assets of the indemnified Party, the indemnified Party may waive its rights to indemnity under this Agreement and control the defense or settlement thereof, but in no event shall any such waiver be construed as a waiver of any rights such indemnified Party may have against any Third Party at law or in equity. If the indemnifying Party defends the suit or claim, the indemnified Party shall cooperate with the indemnifying Party in such defense and the indemnified Party or Parties may participate in (but not control) the defense thereof at its sole cost and expense. 11.4 Settlements. Neither of the Parties may settle a claim or action related to a Third Party Claim without the consent of the other Party, if such settlement would impose any monetary obligation on the other Party, or would require the other Party to submit to an injunction or otherwise limit the other Party's rights under this Agreement. Any payments made by a Party to settle any such claim or action shall be at its own costs and expense, except in the event such payment was made with the prior written consent of an indemnifying Party, in which case such payment shall be subject to the obligations of the Parties as set forth in Sections 11.1 (Indemnification by Achaogen), 11.2 (Indemnification by Microgenics), and 11.3 (Conditions to Indemnification). 11.5 Limitation of Liability. EXCEPT WITH RESPECT TO DAMAGES THAT ARISE DUE TO A PARTY'S BREACH OF CONFIDENTIALITY (ARTICLE 12) OR INDEMNIFICATION OBLIGATIONS (ARTICLE 11), IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER FOR CONSEQUENTIAL, INDIRECT, SPECIAL, EXEMPLARY OR PUNITIVE DAMAGES FOR ANY CAUSE OF ACTION, WHETHER IN CONTRACT, TORT OR OTHERWISE, INCLUDING LOST REVENUES, PROFITS OR BUSINESS OPPORTUNITIES ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT, WHETHER OR NOT THE OTHER PARTY WAS OR SHOULD HAVE BEEN AWARE OF THE POSSIBILITY OF THESE DAMAGES. EXCEPT WITH RESPECT TO DAMAGES THAT ARISE DUE TO A PARTY'S BREACH OF CONFIDENTIALITY (ARTICLE 12) OR INDEMNIFICATION OBLIGATIONS (ARTICLE 11), THE LIABILITY OF EITHER PARTY UNDER THIS AGREEMENT (WHETHER BY REASON OF BREACH OF CONTRACT, TORT, OR OTHERWISE) WITH RESPECT TO A GIVEN CLAIM SHALL NOT EXCEED AN AMOUNT EQUAL TO [***]. 11.6 Insurance. Each Party shall maintain, through self-insurance or commercially-placed insurance, adequate commercial general liability and products liability insurance, including contractual liability coverage, necessary to satisfy its obligations hereunder and consistent with pharmaceutical and + +Page 30 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions. + + + + + +Confidential Treatment Requested by Achaogen, Inc. diagnostic industry practices. 12 Confidentiality 12.1 Nondisclosure. During the Term, and for a period of [***] ([***]) years thereafter, all Confidential Information disclosed to a Party hereto or its Affiliates (the "Receiving Party") by the other Party or its Affiliates (the "Disclosing Party") shall be deemed confidential and shall be treated as such by the Receiving Party (meaning that the Receiving Party shall take the same steps to protect such information as it does to protect its own confidential information, which in any event shall be no less than the reasonable protective measures for the industry) and shall only be used for the purposes of this Agreement. Notwithstanding the foregoing, Confidential Information shall not include information that is: (a) known by the Receiving Party at the time of its receipt and not through a prior disclosure by the Disclosing Party; (b) at the time of disclosure or thereafter, becomes published or otherwise part of the public domain through no breach of this Agreement by the Receiving Party; (c) subsequently disclosed to the Receiving Party by a Third Party having the right to make such a disclosure; or (d) developed by the Receiving Party, as evidenced by its records, independently of information received by it from the Disclosing Party hereunder. 12.2 Permitted Disclosure. Information provided under this Agreement may be disclosed to employees, agents or consultants of the Receiving Party, but only to the extent required to accomplish the purposes of this Agreement and only after the Receiving Party obtains the prior agreement of its employees, agents and consultants to whom disclosure is to be made to hold in confidence and not to make use of such information for any purpose other than that permitted by this Agreement. In addition to the foregoing exceptions, either Party may disclose Confidential Information to the extent it is required to be disclosed under Applicable Law, or in connection with any application by the Receiving Party for any Regulatory Approvals; provided, however, that the Receiving Party shall furnish the Disclosing Party with as much prior written notice of such disclosure requirement as reasonably practicable, so as to permit the Disclosing Party, in its sole discretion, and at its sole expense, to take appropriate action, including seeking a protective order, in order to prevent the Disclosing Party's Confidential Information from passing into the public domain or becoming generally available to the public. 12.3 Publicity. The Parties agree to make a joint public release of the having entered into this Agreement upon the successful completion of Phase I as described in Exhibit F. The public release must however not contain any Confidential Information of any kind such as scientific, commercial or financial which both Parties have not agreed to include in writing. No public announcement concerning the existence, terms or subject matter of this Agreement shall be made, either directly or indirectly, by any Party, without first obtaining the prior written approval of the other Party and agreement upon the nature and text of such public announcement which such agreement and approval shall not be unreasonably withheld. Notwithstanding the foregoing, if, in the opinion of legal counsel for the Party desiring to make such public announcement, such disclosure is required under Applicable Law, subject to Section 12.2 (Permitted Disclosure) above, the Party required to make such public announcement shall inform the other Parties of the proposed announcement or disclosure in reasonably sufficient time prior to public release, which shall be not + +Page 31 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions. + + + + + +Confidential Treatment Requested by Achaogen, Inc. less than [***] ([***]) business days (or such shorter period as may be required under Applicable Law) prior to release of such proposed public announcement, and shall provide the other Parties with a written copy thereof in order to allow such other Parties to comment upon such public announcement. The Receiving Party shall reasonably cooperate with the Disclosing Party (at the Disclosing Party's expense) with respect to all disclosures regarding this Agreement required under Applicable Law, including requests for confidential treatment of proprietary information of the Disclosing Party included in any such disclosure. 12.4 Applicable Law. Nothing in this Agreement shall be construed as preventing or in any way inhibiting any Party from complying with Applicable Law governing activities and obligations undertaken pursuant to this Agreement, in any manner which it reasonably deems appropriate, including, for example, by disclosing to Regulatory Authorities confidential or other information received from the other Parties, subject to Sections 12.2 (Permitted Disclosure) and 12.3 (Publicity). 12.5 Non-Use of Names. Except as otherwise provided in this Agreement, neither Party (or its Affiliates) shall use, either directly or indirectly, the Trademarks of the other Party (or their Affiliates), or the names of any of their officers, employees or board members in any publicity, marketing advertising or other documents (or other disclosures) unless (a) such use is consistent with, and permitted under, the Project Plan or (b) a copy or transcript of the proposed disclosure is submitted to and approved in advance in writing by the other Party (each in its sole discretion), except in the case in which a governmental authority requires the use of the Trademark by a Party in the sale or distribution of the Assay or Plazomicin. Each Party will use good faith efforts to review and approve any proposed disclosure within [***] ([***]) business days of its receipt from the other Party of a copy or transcript of the proposed disclosure. If a Party approves the other Party's usage of its Trademarks (or its Affiliates), or the names of any of their officers, employees or board members in accordance with this Section 12.5 (Non-Use of Names), the other Party shall comply with any usage guidelines or requirements imposed by the approving Party. 12.6 Publications. Publication in a journal, paper, magazine or any other such similar disclosure relating to the development, manufacture or commercialization of the Assay will not take place without the prior written agreement of both Achaogen and Microgenics, which shall not be unreasonably withheld. Any draft article intended to be submitted for publication by Microgenics or Achaogen (or a clinical trial site utilized by Achaogen) hereto shall first be sent to the other Party in order to allow such Party to preserve its intellectual property rights by delaying such publication (but not for more than [***] ([***]) days) and/or removing its Confidential Information. Achaogen's and/or Microgenics' contribution shall be acknowledged in any publication by co-authorship or acknowledgment, whichever is appropriate. Republication of any article, in whole or in part, which has previously been approved by the Parties shall not require subsequent approval, provided that the content is substantially unchanged. These restrictions are not applicable to Plazomicin; provided, however, that, for clarity, Microgenics shall have no right to publish with respect to Plazomicin. 12.7 Prior CDAs. This Agreement supersedes that certain Confidential Disclosure Agreement between the Parties dated [***]; provided, however, that all Confidential Information disclosed or received by the Parties thereunder will be deemed Confidential Information hereunder and will be subject to the terms and conditions of this Agreement. For clarity, this Agreement does not supersede the Antibody Development Agreement. 13 Miscellaneous 13.1 Force Majeure. Neither Party shall be liable to the other for delay or failure in the + +Page 32 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions. + + + + + +Confidential Treatment Requested by Achaogen, Inc. performance of the obligations on its part contained in this Agreement if and to the extent that such failure or delay is due to government action, war, terrorism, fire, explosion, flood, strike, lockout, embargo, shortage of materials or utilities, vendor failure to supply, act of God, or any other cause beyond the control and without the fault or negligence of the defaulting Party (a "Force Majeure Event"), provided that the Party claiming Force Majeure Event has exerted all Commercially Reasonable Efforts to avoid or remedy such force majeure. Such excuse shall continue as long as the condition preventing the performance continues. Upon cessation of such Force Majeure Event, the affected Party shall promptly resume performance hereunder. Each Party agrees to give the other Party prompt written notice of the occurrence of any such Force Majeure Event, the nature thereof, and the extent to which the affected Party will be unable to perform its obligations hereunder. Each Party further agrees to use all Commercially Reasonable Efforts to correct the Force Majeure Event [***] and to give the other Party prompt written notice when it is again fully able to perform its obligations hereunder. 13.2 Assignment. Neither Party may assign this Agreement to a Third Party unless both Parties have agreed to such assignment in a writing signed by an authorized representative of each Party hereto; provided, however, that upon providing written notice, (i) either Party may, without the other Party's consent, assign this Agreement to an Affiliate or to any Third Party entity that acquires all or substantially all of its assets to which this Agreement relates and (ii) Achaogen may, without Microgenics' consent, assign this Agreement (in whole or in part) to a Third Party licensee of Achaogen's rights with respect to Plazomicin. This Agreement shall be binding upon and inure to the benefit of the successors and permitted assigns of the Parties. Any assignment not in accordance with this Section 13.2 (Assignment) shall be void. 13.3 No Waiver. The failure of either Party to require performance by the other Party of any of that other Party's obligations hereunder shall in no manner affect the right of such Party to enforce the same at a later time. No waiver by any Party hereto of any condition, or the breach of any provision, term, representation or warranty contained in this Agreement, whether by conduct or otherwise, in any one or more instances, shall be deemed to be or construed as a further or continuing waiver of any such condition or breach, or of any other condition or of the breach of any other provision, term, representation or warranty hereof. 13.4 Severability. If a court or other tribunal of competent jurisdiction should hold any term or provision of this Agreement to be excessive, or invalid, void or unenforceable, the offending term or provision shall be deleted, and, if possible, replaced by a term or provision which, so far as practicable, achieves the legitimate aims of the Parties. In the event that such provisions cannot be agreed upon, the invalidity, illegality or unenforceability of one or more provision of this Agreement shall not affect the validity of this Agreement as a whole. 13.5 Relationship Between the Parties. Both Parties are independent contractors under this Agreement. Nothing herein contained shall be deemed to create an employment, agency, joint venture or partnership relationship between the Parties hereto or any of their agents or employees, or any other legal arrangement that would impose liability upon one Party for the act or failure to act of the other Party. Neither Party shall have any express or implied power to enter into any contracts or commitments or to incur any liabilities in the name of, or on behalf of, the other Party, or to bind the other Party in any respect whatsoever. + +Page 33 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions. + + + + + +Confidential Treatment Requested by Achaogen, Inc. 13.6 Correspondence and Notices. Correspondence, reports, documentation and any other communication in writing between the Parties in the course of implementation of this Agreement shall be in writing and sent by internationally recognized overnight delivery service that maintains records of delivery, or by facsimile confirmed by prepaid registered or certified air mail letter, and shall be deemed to have been properly served to the addressee upon the date delivered by hand or transmitted by facsimile (with transmission confirmed) or on the second business day (at the place of delivery) after deposit with an internationally recognized overnight delivery service. The proper address for communication and for all payments shall be: To Microgenics: With a copy to: Microgenics Corporation Thermo Fisher Scientific Attn: VP & General Manager Attn: SDG General Counsel 46500 Kato Road 81 Wyman Street Fremont, CA 94538 Waltham, MA 02451 Fax: Fax: (781) 622-1283 To Achaogen: With a copy to: Achaogen Inc. 7000 Shoreline Court, #371 South San Francisco, CA 94080 Fax: 13.7 Choice of Law. This Agreement is subject to and governed by the laws of the State of Delaware, U.S.A. (without regard to conflict of law principles). 13.8 Dispute Resolution. 13.8.1 Executive Resolution. In the event of a dispute with respect to (a) the validity, interpretation or construction of this Agreement, (b) compliance with this Agreement or (c) a breach of this Agreement (a "Dispute"), a Party may provide the other Party with written notice of the Dispute, and the Parties agree to exercise reasonable efforts to resolve the Dispute in good faith by promptly engaging in discussions with duly authorized representatives of the Parties. If the Dispute cannot be resolved by such authorized representatives of the Parties within [***] ([***]) business days, the authorized representatives shall refer the Dispute to a meeting between a senior executive representing each Party (currently the [***] for Achaogen, and the [***] for Microgenics), which such senior executives shall participate in at least one in person meeting as soon as practicable, but in no event later than [***] ([***]) days after the date of the relevant referral. If the senior executives for Achaogen and Microgenics cannot resolve such Dispute in a mutually acceptable manner within [***] ([***]) business days after such meeting, then the Dispute shall be resolved exclusively by final and binding arbitration in accordance with Section 13.8.2. 13.8.2 Arbitration. Arbitration will be conducted exclusively in the State of Delaware by arbitration administered by the American Arbitration Association ("AAA") under its Commercial Arbitration Rules and Supplementary Procedures for Large Complex Disputes, and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. [***]. Notwithstanding anything in this Agreement to the contrary, each Party shall have the right, at its election, to seek injunctive or other equitable relief in any court of competent jurisdiction to enforce or obtain compliance with any provision of + +Page 34 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions. + + + + + +Confidential Treatment Requested by Achaogen, Inc. this Agreement without first submitting such matter to arbitration. All rights and remedies hereunder shall be cumulative, may be exercised singularly or concurrently and, unless otherwise stated herein, shall not be deemed exclusive. 13.9 Entire Agreement; Amendment. Except as otherwise set forth in Section 12.7, this Agreement and the Antibody Development Agreement, including the Exhibits and Schedules hereto and thereto and all the covenants, promises, agreements, warranties, representations, conditions and understandings contained herein and therein sets forth the complete, final and exclusive agreement between the Parties and supersedes and terminates all prior and contemporaneous agreements and understandings between the Parties, whether oral or in writing. There are no covenants, promises, agreements, warranties, representations, conditions or understandings, either oral or written, between the Parties other than as are set forth in this Agreement and the Antibody Development Agreement. No subsequent alteration, amendment, change, waiver or addition to this Agreement shall be binding upon the Parties unless reduced to writing and signed by an authorized officer of each Party. No understanding, agreement, representation or promise, not explicitly set forth herein, or in the Antibody Development Agreement, has been relied on by either Party in deciding to execute this Agreement. Notwithstanding anything to the contrary contained herein or in the Antibody Development Agreement, nothing in the Antibody Development Agreement shall be deemed to modify or diminish the representations, warranties, covenants and obligations of the Parties under this Agreement and in the event of any conflict between the terms and conditions of this Agreement and the terms and conditions of the Antibody Development Agreement, this Agreement shall govern except with respect to Section 4.2.7.3 of this Agreement which shall be subject to the Antibody Development Agreement. 13.10 Headings. The headings and captions used in this Agreement are solely for the convenience of reference and shall not affect its interpretation. 13.11 Counterpart. This Agreement may be executed in one or more counterparts, each of which shall be an original, and all of which shall constitute together the same document. Each Party acknowledges that an original signature or a copy thereof transmitted by facsimile (or .pdf file) shall constitute an original signature for purposes of this Agreement. 13.12 Further Actions. Each Party agrees to execute, acknowledge and deliver such further instruments, and to do all other acts, as may be necessary or appropriate in order to carry out the purposes and intent of this Agreement including any filings with any antitrust agency which may be required. 13.13 Affiliates. Both Parties shall have the right, in their sole discretion, to perform some or all of its obligations and exercise some or all of its rights under this Agreement through its Affiliates. 13.14 Joint Negotiation. This Agreement is the joint product of Microgenics and Achaogen, and each provision hereof has been subject to the mutual consultation, negotiation and agreement of the Parties and their respective legal counsel and advisers and any rule of construction that a document shall be interpreted or construed against the drafting Party shall not be applicable. 13.15 Construction. Except where the context otherwise requires, wherever used, the singular shall include the plural, the plural the singular, the use of any gender shall be applicable to all genders and the word "or" is used in the inclusive sense (and/or). All references to a "business day" or "business days" in this Agreement means any day other than a day which is a Saturday, a Sunday or any day banks are authorized or required to be closed in the United States. The words "include", "includes" and "including" shall be deemed to be followed by the phrase "without limitation". The word "will" shall be construed to have the same + +Page 35 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions. + + + + + +Confidential Treatment Requested by Achaogen, Inc. meaning and effect as the word "shall." The words "herein", "hereof" and "hereunder", and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof. All currency herein shall refer to United States dollars, unless specifically provided otherwise. All exhibits to this Agreement are hereby made a part of this Agreement. 13.16 Use of Third Parties. All obligations under this Agreement shall be performed by the Party designated to perform such obligations under this Agreement and such obligations may not be performed by a Third Party on such Party's behalf, unless (a) the other Party has consented in writing which shall not be unreasonably be withheld or delayed, (b) the Party engaging such Third Party performs appropriate qualification and oversight of such Third Party in accordance with the Applicable Law, including applicable GMP, GCP, and GLP requirements, and (c) the Party engaging such Third Party ensures that such Third Party complies with the terms and conditions of this Agreement, and provided that such performance of activities by a Third Party is consistent with the rights and obligations of the Parties under this Agreement. Notwithstanding any such consent, each Party shall remain at all times fully liable for its respective responsibilities under this Agreement. Each Party hereby expressly waives any requirement that the other Party exhaust any right, power or remedy, or proceed against such subcontractor for an obligation or performance hereunder, prior to proceeding directly against the Party engaging such subcontractor. [Signature Page to Follow] + +Page 36 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions. + + + + + +Confidential Treatment Requested by Achaogen, Inc. IN WITNESS WHEREOF, duly authorized representatives of the Parties have duly executed this Agreement to be effective as of the Effective Date. ACHAOGEN INC. MICROGENICS CORPORATION By: /s/ Blake Wise By: /s/ Marc Tremblay + +Name: Blake Wise Name: Marc Tremblay + +Title: COO Title: President, Clinical Diagnostics + +Date: 4/26/16 Date: 4/26/2016 + + + +Signature Page to Collaborative Development and Commercialization Agreement DB2/ 26356633.19 + +[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions. + + + + + +Confidential Treatment Requested by Achaogen, Inc. Exhibit A Achaogen Materials + +Achaogen Materials Estimated Amount Estimated Development PhaseRequired [***] + + (1) [***] + +Page 38 of 60 DB2/ 26356633.19 + +[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions. + + + + + +Confidential Treatment Requested by Achaogen, Inc. Exhibit B Achaogen Patents [***] + + + +Page 39 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions. DB2/ 26356633.19 + + + + + +Confidential Treatment Requested by Achaogen, Inc. Exhibit C Microgenics' Cell Lines [***] + +Clone # Clone ID + +[***] [***] + +Clone # Clone ID + +[***] [***] + +Clone # Clone ID + +[***] + + [***] Rabbit Identity Immunogen [***] [***] + +Page 40 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions. DB2/ 26356633.19 + + + + + +Exhibit D Plazomicin Chemical Structure + + + + + +Page 41 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions. + + + + + +Confidential Treatment Requested by Achaogen, Inc. Exhibit E Primary Countries Achaogen Primary Country List Country Country [***] + +Page 42 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions. DB2/ 26356633.19 + + + + + +Confidential Treatment Requested by Achaogen, Inc. Exhibit F Project Plan Timeline and Deliverables Plazomicin TDM Immunoassay Development Project Plan Timeline and Deliverables Deliverables Start End Duration (M) Phase 0 [***] [***] [***] [***] [***] [***] Phase 1 [***] [***] [***] [***] •[***] •[***] Phase 2 [***] [***] [***] [***] [***] [***] Phase 3 [***] [***] [***] [***] [***] [***] [***] [***] Phase 4 [***] [***] [***] [***] Milestone 1: [***] [***] [***] [***] [***] Milestone 2: [***] [***] [***] [***] [***] Milestone 3: [***] [***] [***] [***] Milestone 3A: [***] [***] [***] [***] [***] Milestone 3B: [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] Phase 5 [***] [***] [***] [***] Milestone 1: [***] [***] [***] [***] [***] Milestone 2: [***] [***] [***] [***] [***] + +Page 43 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions. DB2/ 26356633.19 + + + + + +Confidential Treatment Requested by Achaogen, Inc. Exhibit G Specifications [***] Performance Attributes Desired Value(s) Acceptable Value(s) + +[***] + + 1 [***] + +Page 44 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions. DB2/ 26356633.19 + + + + + +Confidential Treatment Requested by Achaogen, Inc. Exhibit H - BARDA Requirements + +1.0 Additional Terms and Conditions for this Agreement as a Federal Subcontract + + 1.1 Purpose. This Agreement is a subcontract under the following Achaogen Government Contract(s): + + • Contract No. HHSO100201000046C (BARDA 0046C Contract) between Achaogen, Inc. and Department of Health and Human Services, Biomedical Advanced Research and Development Authority; + +The purpose of this Section 1.0 is to incorporate by reference certain government (" Government") contract clauses (flow downs) associated with the Achaogen Government Contract(s) specified above, that Achaogen, as a prime contractor, must include, and by which Microgenics, as a subcontractor, must abide. + + 1.2 Incorporated Government Contract Clauses + + (a) For BARDA Contract. This Agreement incorporates by reference Appendix A, "Government Provisions for Commercial Item Subcontracts Under Contract No. HHSO100201000046C (BARDA 0046C Contract)." Microgenics agrees to abide by all of the provisions listed in Appendix A hereto as a condition of performance of services pursuant to any duly-executed Exhibit under this Agreement. + + 1.3 Changes to Government Contracts Provisions + +Microgenics agrees that upon the request of Achaogen it will negotiate in good faith with Achaogen amendments to this Agreement to incorporate additional provisions herein or to change provisions hereof, as Achaogen may reasonably deem necessary in order to comply with the provisions of the applicable Achaogen Government Contract or with the provisions of amendment(s) to such Achaogen Government Contract. If any such amendment to this Agreement causes [***], an equitable adjustment shall be made pursuant to the "Changes" clause of this Agreement. + + 1.4 RESERVED [Not applicable] + + 1.5 Government Right to Inspection of Research and Development (Reference: FAR 52.246-9) + + (a) Microgenics recognizes that the Government has the right to inspect and evaluate work performed or being performed under the Achaogen Government Contract, including any such work performed or being performed under this Agreement, to the extent practicable at all reasonable places and times and in a manner that will not unduly delay the work, including the period of performance, and in any event before its termination. + + (b) If the Government performs any inspection or test on Microgenics' premises, Microgenics shall furnish all reasonable facilities and assistance for the safe and convenient performance of these duties. + + 1.6 Representations and Certifications + +Page 45 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions. DB2/ 26356633.19 + + + + + +By executing this Agreement, Microgenics represents and certifies that: + + (a) neither it, nor any of its Principals (as defined hereinafter), is presently debarred, suspended, proposed for debarment or otherwise declared ineligible for participating in any federal or state procurement action by any federal, state, or local government or agency; + + (b) neither it, nor any of its Principals, has within the last three years, been convicted of, or had a civil judgment rendered against it, for any of the following: (i) the commission of fraud or a criminal offense in connection with obtaining, attempting to obtain, or performing a federal, state or local government contract or agreement; (ii) a violation of federal or state antitrust statutes relating to the submission of offers; or (iii) the commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, tax evasion, or receiving stolen property; + + (c) it will comply with all applicable Federal laws and regulations regarding ethics in public acquisitions and procurement and performance of contracts; + + (d) RESERVED + + (e) it has not made or solicited and will not make or solicit kickbacks in violation of FAR 52.203-7 or the Anti- Kickback Act of 1986 (41 USC 51-58); + + (f) that (i) no federal appropriated funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress on his or her behalf in connection with the awarding of this Agreement; (ii) if any funds other than federal appropriated funds (including profit or fee received under a covered federal transaction) have been paid, or will be paid, to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress on his or her behalf in connection with this Agreement, Microgenics shall complete and submit, with its offer, OMB standard form LLL, Disclosure of Lobbying Activities, to the Contracting Officer; and (iii) it will include the language of this certification in all subcontract awards at any tier and require that all recipients of subcontract awards in excess of $150,000 shall certify and disclose accordingly (the definitions and prohibitions contained in the clause at FAR 52.203- 12, Limitation on Payments to Influence Certain Federal Transactions, included in this Subsection 12.7 (f) and will be included in all such certifications); + + (g) that (i) if Microgenics has participated in a previous contract or subcontract subject to the Equal Opportunity clause (FAR 52.222-26), Microgenics has filed all required compliance reports; and (ii) representations indicating submission of required compliance reports, signed by proposed subcontractors, will be obtained before subcontract awards; and + + (h) that to the best of the Microgenics's knowledge and belief, there are no relevant facts or circumstances which could give rise to an organizational conflict of interest, as defined in FAR Subpart 9.5. + +Microgenics agrees to provide immediate written notice to Achaogen if, at any time prior to termination, Microgenics learns that its certification was erroneous when submitted or has become erroneous by reason of changed circumstances. For the purpose of paragraphs (a) + +Page 46 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions. + + + + + +and (b) above, "Principal" means an officer; director, owner; partner; or a person having primary management or supervisory responsibilities within a business entity. + + + +2.0 Government Interface + + 2.1 Microgenics employees may not communicate with any Government employee, including Achaogen's contracting officer ("Contracting Officer"), Contracting Officer's representative or their respective support staff, concerning any work performed pursuant to this Agreement or any associated Exhibit or appendix, without advance written consent from Achaogen. + + 2.2 Under no circumstances may Microgenics accept Government instruction on behalf of Achaogen. Microgenics is not authorized to make offers, commitments, or otherwise negotiate with the Government on Achaogen's behalf or its own behalf in its capacity as a subcontractor to Achaogen. In case of occurrence of any such events, Microgenics shall: + + (a) suggest to the Government representative that Achaogen be involved in all such discussions, and + + (b) immediately report to Achaogen any attempt by Government personnel to provide such instruction or conduct such negotiations. + + 2.3 If Microgenics communicates with the Government regarding a Project, Microgenics's monthly contract management reports shall list all data exchanged and shall summarize each and every significant discussion with Government personnel during the reporting period. + +3.0 Disputes + + 3.1 Disputes Involving the Prime Contract and/or the Government + + (a) Any dispute arising under or related to this Agreement which relates to a matter for which Achaogen has recourse against the Government under the Achaogen Government Contract (also hereinafter sometimes referred to as the "Prime Contract") shall be resolved as follows unless the Parties otherwise agree in writing. + + (b) Microgenics shall give Achaogen a fully supported written request for equitable adjustment or claim concerning any such dispute within [***] years after the basis of the equitable adjustment arises or claim accrues, but in no event later than [***], or Microgenics shall be barred from any remedy for such claim. + + (c) Achaogen shall forward such request for equitable adjustment or claim to the Contracting Officer on Microgenics's behalf for final decision, subject to the limitations and other conditions contained in this provision. Achaogen shall in good faith consult with Microgenics concerning the forwarding of such request for equitable adjustment or claim to the Contracting Officer. + + (d) Any final decision of the Contracting Officer under the Prime Contract as it relates to this Agreement, whether or not it results from a claim under Section 3.1(b) and (c) of this Agreement submitted on Microgenics's behalf under the provision stated above, shall be binding upon Microgenics; provided however, that Achaogen shall notify Microgenics immediately of any such final decision of the Contracting Officer and if: (i) Achaogen elects not to appeal such decision pursuant to the + +Page 47 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions. + + + + + + "Disputes" clause of the Prime Contract; (ii) Achaogen thereafter receives, no less than [***] ([***]) days before the expiration of the period of appeal under the "Disputes" clause of the Prime Contract, a written request by Microgenics to appeal such decision, and (iii) Achaogen has the right of such appeal under the Prime Contract, then Achaogen shall file an appeal from the final decision on Microgenics's behalf. + + (e) If Achaogen appeals such a decision, whether at its election or at Microgenics's request, any decision upon such appeal by the Board of Contract Appeals, the United States Court of Federal Claims, or any other board or agency having jurisdiction over the appeal shall be binding upon Microgenics insofar as it relates to a claim under this Section 3.1 of this Agreement, provided however, that if Microgenics timely (i.e., no less than [***] ([***]) days before the expiration of the relevant period of appeal) requests Achaogen to bring a further appeal to obtain judicial review of such final decision by a court of competent jurisdiction, Achaogen shall do so, subject to the terms below. A final judgment in any such further appeal, if binding on Achaogen under the Prime Contract, shall in turn be binding on Microgenics insofar as it relates to a claim under this Section 3.1 of this Agreement. + + (f) In any appeal brought by Achaogen on behalf of Microgenics, or at Microgenics's request under the above provisions, [***] shall bear all costs and expenses incurred by Microgenics in prosecuting such appeal, including but not limited to, any legal fees or costs incurred. In any appeal taken or brought by Achaogen, whether at its election or at Microgenics request, Microgenics shall cooperate fully with Achaogen in its prosecution thereof in every reasonable manner and Microgenics shall be afforded reasonable opportunity to participate in the prosecution thereof to the extent Microgenics's interest may be affected. To the extent requested by Achaogen, Microgenics shall prosecute for Achaogen any appeal taken or brought at Microgenics request and, in such event, Achaogen shall assist Microgenics in every reasonable manner. + + (g) If Achaogen is required to certify any claim of Microgenics, Achaogen shall not forward such claim unless it is reasonably satisfied the claim is in good faith, and Achaogen can certify such claim to the Contracting Officer to the extent and manner required by the Contract Disputes Act, as applicable. Microgenics agrees to provide Achaogen with such information as Achaogen reasonably may deem necessary to make this determination, including but not limited to, its own certification in the form prescribed by the Contract Disputes Act or its implementing regulations. Such certification shall be executed by a person duly authorized to bind Microgenics. Microgenics agrees that, with respect to any claim or dispute that arises under or relates to the Prime Contract which, if it were Achaogen's claim, can properly be submitted for a decision of the Contracting Officer under the "Disputes" clause, its right of claim or appeal is limited to the procedures set forth in this provision. + + (h) Microgenics's failure to comply with the terms of this provision shall entitle Achaogen to terminate any such appeal on Microgenics's behalf. The rights and obligations described herein shall survive completion of and final payment under this Disputes section. + + 3.2 Other Disputes Any dispute arising under or related to this Agreement which relates to a matter for which Achaogen has recourse against the Government under the Prime Contract shall be resolved in accordance with Subsection 3.1. In the event of any dispute between the + +Page 48 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions. + + + + + + Parties arising out of or in connection with this Agreement that does not relate to a matter for which Sponsor has recourse against the Government under the Prime Contract, such dispute shall be resolved pursuant to Section 13.8 of the Agreement. + + 3.3 Choice of Law: This Agreement is subject to and governed by the laws of the State of Delaware, U.S.A. without regard to conflict of law principles, as applicable except that any provision in this Agreement that is (i) incorporated in full text or by reference from the Federal Acquisition Regulation (FAR) or (ii) incorporated in full text or by reference from any agency regulation that implements or supplements the FAR or (iii) substantially based on any such FAR provision or agency regulation, shall be construed and interpreted according to the federal common law of government contracts as enunciated and applied by federal judicial bodies, boards of contract appeals, and quasi- judicial agencies of the federal government. + +Page 49 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions. + + + + + +APPENDIX A Government Provisions for Commercial Item Subcontracts Under Contract Number HHSO100201000046C (BARDA Prime Contract) + +The following provisions, as they may be amended by the United States Government over time, are incorporated by reference with the same force and effect as if set forth in full text and shall be deemed to apply solely to such portions of work as are funded using Government funds. For the purposes of this Agreement, the term "contract" shall mean this Agreement; the terms "Contractor" and "Company" shall mean Microgenics; the term "prime contractor" shall mean Achaogen; and the terms "Government" and "Contracting Officer" may mean Achaogen or the United States Government as expressly indicated on this document. The dollar amount listed parenthetically in the titles of some referenced clauses in this Appendix A is the applicability threshold for the clause. If the total cumulative amount invoiced by Microgenics for all Government Sponsored Projects performed under the BARDA Prime Contract is expected to exceed this amount, the clause applies. + +FEDERAL ACQUISITION REGULATION + +Clause Date Title FAR 52.202-1 Jul-04 Definitions (Over $100,000) FAR 52.203-3 Apr-84 Gratuities (Over $100,000) FAR 52.203-5 Apr-84 Covenant Against Contingent Fees (Over $100,000). Substitute "Achaogen " for "Government" or "United States" in paragraph (a) of this clause, provided however that Achaogen may annul the contract or deduct amounts only to the extent of a Government annulment or deduction due to conduct of Microgenics. FAR 52.203-6 Sep-06 Restrictions on Subcontractor Sales to the Government (Over $100,000) FAR 52.203-7 Jul-95 Anti-Kickback Procedures (Over $100,000) FAR 52.203-8 Jan-97 Cancellation, Rescission, and Recovery of Funds for Illegal or Improper Activity (Over $100,000). Substitute "Achaogen " for "Government" or "United States" throughout this clause, provided however that Achaogen may rescind the contract and recover funds only to the extent of a Government rescission or recovery due to conduct of Microgenics. FAR 52.203-10 Jan-97 Price or Fee Adjustment for Illegal or Improper Activity (Over $100,000) Substitute "Achaogen " for "Government" or "United States" throughout this clause and "Achaogen" for "Contracting Officer" throughout this clause, provided however that Achaogen may make a reduction only to the extent that the Government makes a reduction due to conduct of Microgenics. FAR 52.203-12 Sep-07 Limitation on Payments to Influence Certain Federal Transactions (Over $100,000) FAR 52.203-13 Apr-10 Contractor Code of Business Ethics and Conduct (applies if Agreement is over $5,000,000 and has a performance period greater than 120 days). Disclosures made under this clause shall be made directly to the government entities listed in the clause. FAR 52.203-14 Dec-07 Display of Hotline Poster(s). (d) Subcontracts. The Contractor shall include the substance of this clause, including this paragraph (d), in all subcontracts that exceed $5,000,000, except when the subcontract-(1) Is for the acquisition of a commercial item; or (2) Is performed entirely outside the United States. + +Page 50 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions. + + + + + +Clause Date Title FAR 52.209-6 Sep-06 Protecting the Government's Interests When Subcontracting With Contractors Debarred, Suspended, or Proposed for Debarment (Over $30,000) FAR 52.215-2 Mar 09 Audit and Records- Negotiation (Over $100,000) (Only Government receives access and audit rights under this clause) FAR 52.215-21 Oct-97 Requirements for Cost or Pricing Data or Information Other Than Cost or Pricing Data-Modifications. Substitute "Achaogen" for "Contracting Officer" throughout this clause, provided however, that Achaogen may seek from Microgenics only such information as the Government has requested, and Microgenics shall deliver any such information directly and only to the Government. FAR 52.215-21 (as modified above) shall apply only with respect to modifications funded by the Government; FAR 52.215-21 shall not apply to modifications that are not funded by the Government. FAR 52.219-8 May-04 Utilization of Small Business Concerns (Over $100,000) FAR 52.222-3 Jun-03 Convict Labor FAR 52.222-21 Feb-99 Prohibition of Segregated Facilities FAR 52.222-26 Mar-07 Equal Opportunity (Over $10,000) FAR 52.222-35 Sept-06 Equal Opportunity for Special Disabled Veterans, Veterans of the Vietnam Era, and Other Eligible Veterans (Over $100,000) FAR 52.222-36 Jun-98 Affirmative Action for Workers with Disabilities (Over $10,000) FAR 52.222-37 Sep-06 Employment Reports on Special Disabled Veterans, Veterans of the Vietnam Era, and Other Eligible Veterans (Over $100,000) FAR 52.222-39 Dec-04 Notification of Employee Rights Concerning Payment of Union Dues or Fees. Applicable if value of this Agreement equals or exceeds $100,000. FAR 52.222-50 Feb-09 Combating Trafficking in Persons FAR 52.222-54 Jan-09 Employment Eligibility Verification. Applicable to services and construction subcontracts that: (1) exceed $3,000; and (2) include work performed in the United States. This clause does not apply to subcontracts for commercial services that are (a) part of the purchase of a Commercially Available Off the Shelf (COTS) item (or an item that would be a COTS item, but for minor modifications) (b) performed by the COTS provider, and (c) are normally provided for that COTS item. FAR 52.223-6 May-01 Drug-Free Workplace FAR 52.224-1 Apr-84 Privacy Act Notification (If subcontract requires design, development, or operation of a system of records) FAR 52.224-2 Apr-84 Privacy Act (If subcontract requires design, development, or operation of a system of records) FAR 52.225-1 Feb-09 Buy American Act- Supplies FAR 52.225-13 Jun-08 Restrictions on Certain Foreign Purchases FAR 52.227-1 Dec-07 Authorization and Consent, Alternate I (Apr 1984) (Over $100,000) FAR 52.227-2 Dec-07 Notice and Assistance Regarding Patent and Copyright Infringement (Over $100,000). Substitute "Achaogen" for "Contracting Officer" throughout this clause. Insert "or Achaogen" after "Government" throughout this clause. + +Page 51 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions. + + + + + +Clause Date Title FAR 52.227-11 Dec-07 Patent Rights -Ownership by the Contractor (Only Government receives license; Achaogen receives no license.) (Note: In accordance with FAR 27.303(b)(2), paragraph (e) is modified to include the requirements in FAR 27.303(b)(2)(i) through (iv). The frequency of reporting in (i) is annual. Microgenics shall provide to Achaogen a copy of any notice or election that Microgenics submits to the Contracting Officer pursuant to subparagraph (c)(1), (c)(2) and (e)(3). FAR 52.227-16 Jun-87 Additional Data Requirements. Substitute "Achaogen" for "Contracting Officer" throughout this clause, provided however, that Achaogen may order from Microgenics only such data that the Government has ordered and provided further that the following data are hereby specifically identified for purposes of FAR 52.227-16(b), and are not subject to disclosure obligations under FAR 52.227-16, and shall not be disclosed: (i) Immunoassay Technologies (as defined in Section 1.16); (ii) Microgenics Know-How (as defined in Section 1.18) related to Immunoassay Technologies; and (iii) any and all limited rights data (i.e., data that embody trade secrets or are commercial or financial and confidential or privileged, to the extent such data pertain to items, components, or processes developed at private expense, including minor modifications) not already included in (i) or (ii). FAR 52.242-15 Aug-89 Stop Work Order (April 1984) (Achaogen may issue stop work order only to the extent the Government issues a stop work order) Substitute "Achaogen" for "Contracting Officer" throughout this clause. FAR 52.244-5 Dec-96 Competition in Subcontracting FAR 52.244-6 Jun-10 Subcontracts for Commercial Items FAR 52.245-1 Aug-10 Government Property Applicable where government property involved in performance of subcontract; "Contracting Officer" means "Achaogen" except in the definition of Property Administrator and in paragraph h(1)(iii) and where it is unchanged, and in paragraphs (c) and (h)(4) where it includes Achaogen. "Government" is unchanged in the phrases "Government property" and "Government furnished property" and where elsewhere used except in paragraph (d)(1) where it means Achaogen and except in paragraphs (d)(2) and (g) where the term includes Achaogen. + +THE DEPARTMENT OF HEALTH AND HUMAN SERVICES SUPPLEMENTAL REGULATION PROVISIONS + +Clause Date Title HHSAR 352.203-70 Jan-06 Anti-lobbying HHSAR 352.223-70 Jan-06 Safety and Health HHSAR 352.224-70 Jan-06 Privacy Act (if subcontract requires design, development, or operation of a system of records) HHSAR 325.242-73 Jan-06 Withholding of Contract Payments HHSAR 352.270-4 Jan-06 Protection of Human Subjects HHSAR 352.270-5 Jan-06 Care of Live Vertebrate Animals HHSAR 352.270-6 Jan-06 Restriction on Use of Human Subjects + +Page 52 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions. + + + + + +HHSAR 352.227-70 Jan-06 Publications and Publicity + +Page 53 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions. + + + + + +BARDA REQUIRED PROVISIONS + +Prime Contract Provision + +Clause + +H.2: Human Materials The acquisition and supply of all human specimen material (including fetal material) used under this contract shall be obtained by Company in full compliance with applicable State and Local laws and the provisions of the Uniform Anatomical Gift Act in the United States, and no undue inducements, monetary or otherwise, will be offered to any person to influence their donation of human material. + +Company shall provide Achaogen with written documentation that all human materials obtained as a result of research involving human subjects conducted under this contract, by collaborating sites, or by subcontractors identified under this Agreement were obtained with prior approval by the Office for Human Research Protections of an Assurance to comply with the requirements of 45 CFR 46 to protect human research subjects. + +Provision by Company to Achaogen of a properly completed "Protection of Human Subjects Assurance Identification/IRB Certification/Declaration of Exemption," Form OMB No. 0990-0263 (formerly optional form 310), certifying IRB review and approval of the protocol from which the human materials were obtained constitutes the written documentation required. + +H.3: Research Involving Human Fetal Tissue + +All research involving human fetal tissue shall be conducted in accordance with the Public Health Service Act, 42 U.S.C. 289g-1 and 289g-2. Implementing regulations and guidance for conducting research on human fetal tissue may be found at 45 C.F.R. 46, Subpart B, and http://grants1.nih.gov/grants/guide/notice-files/not93- 235.html and any subsequent revisions to this NIH Guide to Grants and Contracts ("Guide") Notice. + +Company shall make available, for audit by Achaogen, the secretary, HHS, the physician statements and informed consents required by 42 U.S.C. 289g-1(b) and (c), or ensure HHS access to those records, if maintained by an entity other than the Contractor. + +H.4: Needle Exchange Company shall not use contract funds to carry out any program of distributing sterile needles or syringes for the hypodermic injection of any illegal drug. + +H.5: Press Releases Company shall clearly state, when issuing statements, press releases, requests for proposals, bid solicitations and other documents describing projects or programs funded in whole or in part with Federal money: (1) the percentage of the total costs of the program or project which will be financed with Federal money; (2) the dollar amount of Federal funds for the project or program; and (3) the percentage and dollar amount of the total costs of the project or program that will be financed by nongovernmental sources. + +H.7: Animal Welfare All research involving live, vertebrate animals shall be conducted in accordance with the Public Health Service Policy on Humane Care and Use of Laboratory Animals. This policy may be accessed at: http://grants1.nih.gov/grants/olaw/references/phspol.htm. + +H.8: Protection of Personnel who Work with Nonhuman Primates + +All Company personnel who work with nonhuman primates or enter rooms or areas containing nonhuman primates shall comply with the procedures set forth in NIH Policy Manual 3044-2, entitled, "Protection of NIH Personnel Who Work with Nonhuman Primates," located at the following URL: http://www1.od.nih.gov/oma/manualchapters/intramural/3044-2/ + +Page 54 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions. + + + + + +Prime Contract Provision Clause + +H.9: Publications and Publicity + +No information related to data obtained under this contract shall be released or publicized without the prior written consent of Achaogen and the Contracting Officer Technical Representative. + +In addition to the requirements of HHSAR 352.227-70, Publications and Publicity incorporated by reference in section I of this contract shall acknowledge the support of the Biomedical Advanced Research and Development Authority whenever publicizing the work under this contract in any media by including an acknowledgment substantially as follows: + +"This project has been funded in whole or in part with Federal funds from the Biomedical Advanced Research and Development Authority, office of the Assistant Secretary for Preparedness and response, Office of the Secretary, Department of Health and Human Services, Under Contract No. HHSO100201000046C." H.10: Reporting Matters Involving Fraud, Waste and Abuse + +Anyone who becomes aware of the existence or apparent existence of fraud, waste and abuse in BARDA funded programs is encouraged to report such matters to the HHS Inspector General's Office in writing or on the Inspector General's Hotline. The toll free number is 1-800-HHS-TIPS (1-800-447-8477). All telephone calls will be handled confidentially. The e-mail address is Htips@os.dhhs.gov and the mailing address is: Office of Inspector General Department of Health and Human Services TIPS HOTLINE P.O. Box 23489 Washington, D.C. 20026. H.11 Prohibition on Contractor Involvement with Terrorist Activities + +Company acknowledges that U.S. Executive Orders and Laws, including but not limited to E.O. 13224 and P.L. 107-56, prohibit transactions with, and the provision of resources and support to, individuals and organizations associated with terrorism. It is the legal responsibility of Company to ensure compliance with these Executive Orders and Laws. This clause must be included in all subcontracts issued under this contract. + +H.15: Privacy Act Applicability + +Notification is hereby given that Company and its employees are subject to criminal penalties for violation of the Privacy Act to the same extent as employees of the Government. + +H.16: Laboratory license requirement + +Company shall comply with all applicable requirements of Section 353 of the Public Health Service Act (Clinical Laboratory Improvement Act as Amended). This requirement shall also be included in any subcontract for services under this contract. + +The parties anticipate that no part of the performance of this Agreement will be subject to the Clinical Laboratory Improvement Act As Amended. + +H.17: Dissemination of Information + +Except for any application to the FDA for approval of a diagnostic, any publication in connection with such FDA filing or approval, and any filing in connection with obtaining patent protection, no information related to data obtained under this contract shall be released or publicized without the prior written consent of the Contracting officer, to be obtained through Achaogen. + +H.18: Identification and Disposition of Data + +Company will be required to provide certain data generated under this contract to the Department of Health and Human Services (DHHS). DHHS reserves the right to review any other data determined by DHHS to be directly related to and/or generated under this contract. Company shall keep copies of all data required by the Food and Drug Administration (FDA) relevant to this contract for the time period specified by the FDA. + +Page 55 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions. + + + + + +Prime Contract Provision + +Clause + +H.19: Information on Compliance With Animal Care Requirements + +Registration with the U.S. Dept. of Agriculture (USDA) is required to use regulated species of animals for biomedical purposes. USDA is responsible for the enforcement of the Animal Welfare Act (7 U.S.C. 2131 et. seq), http://www.nal.usda.gov/awic/legislat/awa.htm + +The Public Health Service (PHS) Policy is administered by the Office of Laboratory Animal Welfare (OLAW) http://grants2.nih.gov/grants/olaw/olaw.htm. An essential requirement of the PHS Policy, http://grants2.nih.gov/grants/olaw/references/phspol.htm is that every institution using live vertebrate animals must obtain an approved assurance from OLAW before they can receive funding from any component of the U.S. Public Health Service. + +The PHS Policy requires that Assured institutions base their programs of animal care and use on the Guide for the Care and Use of Laboratory Animals http://www.nap.edu/readingroom/books/labrats/ and that they comply with the regulations (9 C.F.R., subchapter A) http://www.nal.usda.gov/awic/legislat/usdaleg1.htm issued by the U.S. Department of Agriculture (USDA) under the Animal Welfare Act. The Guide may differ from USDA regulations in some respects. Compliance with USDA regulations is an absolute requirement of this Policy. + +The Association for Assessment and Accreditation of Laboratory Animal Care International (AAALAC) http://www.aaalac.org is a professional organization that inspects and evaluates programs of animal care institutions at their request. Those that meet the high standards are given accredited status. As of the 2002 revision of the PHS policy, the only accrediting body recognized by PHS is the AAALAC. While AAALAC Accreditation is not required to conduct biomedical research, it is highly desirable. AAALAC uses the Guide as their primary evaluation tool. They also use the Guide for the Care and Use of Agricultural Animals in Agricultural Research and Teaching. It is published by the American Science Societies. http://www.fass.org. + +Page 56 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions. + + + + + +Prime Contract Provision + +Clause + +H.20: Requirements for Adequate Assurance of Protection of Vertebrate Animal Subjects + +The PHYS Policy on Humane Care and Use of Laboratory Animals requires that applicant organizations proposing to use vertebrate animals file a written Animal Welfare Assurance with the Office for Laboratory Animal Welfare (OLAW), establishing appropriate policies and procedures to ensure the humane care and use of live vertebrate animals involved in research activities supported by the PHS. The PHS Policy stipulates that an applicant organization, whether domestic or foreign, bears responsibility for the humane care and use of animals in PHS-supported research activities. Also the PHS policy defines "animal" as "any live, vertebrate animal used, or intended for use, in research, research training, experimentation, biological testing or for related purposes." This policy implements and supplements the U.S. Government Principles for the Utilization and Care of Vertebrate Animals Used in Testing, Research, and Training, and requires that institutions use the Guide for the Care and Use of Laboratory Animals as a basis for developing and implementing an institutional animal care use program. This Policy does not affect applicable State or local laws or regulations that impose more stringent standards for the care and use of laboratory animals. All institutions are required to comply, as applicable, with the Animal Welfare Act, as amended and other Federal statutes and regulations relating to animals. These documents are available from the Office of Laboratory Animal Welfare, National Institutes of Health, Bethesda, MD 20892, (301) 496-7163. http://grants.nih.gov/grants/olaw/olaw.htm. + +No PHYS supported work or research involving vertebrate animals will be conducted by an organization, unless that organization is operating in accordance with an approved Animal Welfare Assurance and provides verification that the Institutional Animal Care and Use Committee (IACUC) has reviewed and approved the proposed activity in accordance with the PHS policy. Applications may be referred by the PHS back to the institution for further review in the case of an apparent or potential violations of the PHS policy. No award to an individual will be made unless that individual is affiliated with an assured organization that accepts responsibility for compliance with the PHS Policy. Foreign applicant organizations applying for PHS awards for activities involving vertebrate animals are required to comply with PHS Policy or provide evidence that acceptable standards for the humane care and use of animals will be met. Foreign applicant organizations are not required to submit IACUC approval, but should provide information that is satisfactory to the Government to provide assurances for the humane care of such animals. + +H.21: Approval of Required Assurance by OLAW + +Under governing regulations, federal funds which are administered by DHHS, Office of Biomedical Advanced Research and Development Authority (BARDA) shall not be expended by the contractor for research involving live vertebrate animals, nor shall live vertebrate animals be involved in research activities by Company under this award unless a satisfactory assurance of compliance with 7 U.S.C. 2316 and 9 CFR Sections 2.25-2.28 is submitted within 30 days of the date of this award and approved by the Office of Laboratory Animal Welfare (OLAW). Each performance site (if any) must also assure compliance, with the following restriction: Only activities which do not directly involve live vertebrate animals (i.e., are clearly severable and independent from those activities) may be conducted by the contractor or individual performance sites pending OLAW approval of their respective assurance of compliance. + +Page 57 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions. + + + + + +Prime Contract Provision + +Clause + +H.22: Registration with the Select Agent Program for Work involving the possession, use, and/or transfer of select biological agents or toxins + +Company shall not conduct work involving select agents or toxins under this contract until it and any associated subcontractor(s) comply with the following: + +For prime or subcontract awards to domestic institutions that possess, use, and/or transfer Select Agents under this contract, the institution must comply with the provisions of 42 C.F.R. part 73, 7 C.F.R. part 331, and/or 9 C.F.R. part 121 ( http://www.aphis.usda.gov/programs/ag_selectagent/FinalRule3-18-05.pdf ) as required, before using NIH funds for work involving a Select Agent or Toxin. No government funds can be used for research involving a Select Agent or Toxin at a domestic institution without a valid registration certificate. + +For prime or subcontract awards to foreign institutions that possess, use, and/or transfer a Select Agent or Toxin, before using NIH funds for any work directly involving a Select Agent or Toxin, the foreign institution must provide information satisfactory to the government that safety, security, and training standards equivalent to those described in 42 C.F.R. part 73, 7 C.F.R. part 331, and/or 9 C.F.R. part 121 are in place and will be administered on behalf of all Select Agent or Toxin work supported by these funds. The process for making this determination includes inspection of the foreign laboratory facility by a government representative. During this inspection, the foreign institution must provide the following information: concise summaries of safety, security, and training plans; names of individuals at the foreign institution who will have access to the Select Agents and procedures for ensuring that only approved and appropriate individuals, in accordance with institution procedures, will have access to the Select Agents under the contract; and copies of or links to any applicable laws, regulations, policies, and procedures applicable to that institution for the safe and secure possession, use, and/or transfer of select agents. No funds can be used for work involving a Select Agent or Toxin at a foreign institution without written approval from Achaogen. + +Listings of HHS select agents and toxins, and overlap select agents or toxins as well as information about the registration process for domestic institutions, are available on the Select Agent Program Web site at http:// www.cdc.gov/od/sap/ and http://www.cdc.gov/od/sap/docs/salist.pdf. + +Listings of USDA select agents and toxins as well as information about the registration process for domestic institutions are available on the APHIS/USDA website at: http://www.aphis.usda.gov/programs/ag_selectagent/ index.html and: http://www.aphis.usda.gov/programs/ag_selectagent/ag_bioterr_forms.html + +For foreign institutions, see the NIAID Select Agent Award information: http://www.niaid.nih.gov/ncn/clinical/default_biodefense.htm. + +H.23: EPA Energy Star Requirements + +All microcomputers, including personal computers, monitors, and printers purchased with government funds in the performance of a contract shall be equipped with or meet the energy efficient low-power standby feature as defined by the EPA Energy Star program unless the equipment always satisfies Energy Star efficiency levels. + +Page 58 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions. + + + + + +Prime Contract Provision Clause + +H.24: Acknowledgement of Federal Funding + +(a)Section 507 of P.L. 104-208 mandates that contractors funded with Federal dollars, in whole or in part, acknowledge Federal funding when issuing statements, press releases, requests for proposals, bid solicitations and other documents. Contractors are required to state (1) the percentage and dollar amounts of the total program or project costs financed with federal money, and (2) the percentage and dollar amount of the total costs financed by nongovernmental sources. This requirement is in addition to the continuing requirement to provide an acknowledgement of support and disclaimer on any publication reporting the results of a contract funded activity. (b)Publication and Publicity. The contractor shall acknowledge the support of the Department of Health and Human Service, Office of the Assistant Secretary for Preparedness and Response, Biomedical Advanced Research and Development Authority whenever publicizing the work under this contract in any media by including an acknowledgment substantially as follows: "This project has been funded in whole or in part with Federal funds from the Office of the Assistant Secretary for Preparedness and Response, Biomedical Advanced Research and Development Authority, under Contract no. HHSO100201000046C. (c)Press Releases. Pursuant to Section 508 of Public Law 105-78, the contractor shall clearly state, when issuing statements, press releases, requests for proposals, bid solicitations and other documents describing projects or programs funded in whole or in part with federal money that: (1) the percentage of the total costs of the program or project which will be financed with federal money; (2) the dollar amount of Federal funds for the project or program; and (3) the percentage and dollar amount of the total costs of the project or program that will be financed by nongovernmental sources. H.25: Manufacturing Standards + +The Current Good Manufacturing Practice Regulations ("cGMP") (21 C.F.R. Parts 210-211) and regulations pertaining to biological products (21 C.F.R. Part 600) will be the standard to be applied for manufacturing, processing, packing, storage, and delivery of this product. + +If at any time during the life of the contract, Company fails to comply with cGMP in the manufacturing, processing and packaging of this product and such failure results in a material adverse effect on the safety, purity or potency of this product (a material failure), the Contractor shall have thirty (30) calendar days from the time such material failure is identified to cure such material failure. If the Contractor fails to take such an action within the thirty (30) calendar day period, then the contract may be terminated for default. + +H.26: Export Control Notification + +Company is responsible for ensuring compliance with all export control laws and regulations that may be applicable to the export of and foreign access to their proposed technologies. + +Page 59 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions. + + + + + +Prime Contract Provision Clause + +H.27: Institutional responsibility Regarding Conflicting Interests of Investigators + +Company shall comply with the requirements of 45 CFR Part 94, Responsible Prospective Contractors, which promotes objectivity in research by establishing standards to ensure that investigators (defined as the principle investigator and any other person who is responsible for design, conduct, or reporting of research funded under BARDA contracts) will not be biased by any conflicting financial interest. For the purposes of this part relating to financial interest, "investigator" includes the investigator's spouse and dependent children. + +Company shall at a minimum: + +(a)Maintain a written, enforceable policy on conflict of interest and inform each investigator of the policy, the investigator's reporting responsibilities, and the applicable regulations. The contractor must take reasonable steps to ensure that investigators working as collaborators or subcontractors comply with the regulations. (b)Designate and official to review financial disclosure statements from each investigator participating in BARDA-funded research. Based on established guidelines consistent with the regulations, the designated official must determine whether a conflict of interest exists, and if so, determine what actions should be taken to manage, reduce, or eliminate such a conflict. (c)Require updating of financial disclosure statements during the period of award. (d)Maintain records taken under this provision for three years after final payment. (e)Establish adequate enforcement mechanisms. If a conflict of interest is identified, the Institution shall report to Achaogen the existence of the conflicting interest found. This report shall be made and the conflicting interest managed, reduced, or eliminated, at least on a temporary basis, within thirty (30) days of that identification. + + + +ORDER OF PRECEDENCE + +In the event of a conflict between the terms of this Appendix and any term of the Agreement or an Exhibit or other appendix issued there under, the terms of this Appendix shall govern. + + + +Page 60 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions. \ No newline at end of file diff --git a/full_contract_txt/MidwestEnergyEmissionsCorp_20080604_8-K_EX-10.2_3093976_EX-10.2_Content License Agreement.txt b/full_contract_txt/MidwestEnergyEmissionsCorp_20080604_8-K_EX-10.2_3093976_EX-10.2_Content License Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..6b2697151ac0f8868c4ac928b0d63c8bfde83653 --- /dev/null +++ b/full_contract_txt/MidwestEnergyEmissionsCorp_20080604_8-K_EX-10.2_3093976_EX-10.2_Content License Agreement.txt @@ -0,0 +1,465 @@ +CONTENT LICENSE AGREEMENT + + + +THIS AGREEMENT is made as of this 2nd day of June, 2008 by and among Digicorp, Inc., a corporation organized under the laws of the State of Delaware, United States of America with offices at 4143 Glencoe Avenue, Unit B, Marina Del Rey, California 90291, U.S.A. ("COMPANY") and New China Media LLC, a Florida limited liability company (a/k/a New China Media Limited) with offices at 400 Alton Road, Penthouse 7, Miami Beach, Florida 33139 ("NCM"); YGP, LLC, a Florida limited liability company with offices at 4000 Hollywood Blvd, Suite 485 South, Hollywood, Florida, 33021 ("YGP") and TWK Holdings, LLC with offices at Room 4301, 43/F, Jardine House , One Connaught Place, Central, Hong Kong ("TWK") (NCM, YGP and TWK shall be individually and collectively referred to as "CONTENT PROVIDER") (COMPANY and CONTENT PROVIDER are hereinafter sometimes collectively referred to as the "Parties"). + + + + W I T N E S S E T H: + + WHEREAS, COMPANY intends to build and maintain web sites based in the People's Republic of China which will include content provided to COMPANY by third parties for the purpose of providing information to users of the web site, and providing access to the products and/or services of such third parties; + + + + + +WHEREAS, CONTENT PROVIDER has acquired from one or more third parties (individually a "Licensor" and collectively the "Licensors") the right to distribute by means of the internet certain content described more fully in the attached Exhibit A (the "Current Content") and intends to acquire from Licensors in the future the right to distribute by means of the internet additional content (the "Future Content") (the Current Content and the Future Content are hereinafter sometimes collectively referred to as the "Content"); and, + + + + + + WHEREAS, COMPANY and CONTENT PROVIDER wish to distribute the Content through the web sitesreferred to above. + + + + NOW, THEREFORE, in consideration of the promises and the mutual covenants of this Agreement, the partieshereto agree as follows: + + + + 1. LICENSE + + + +A. Subject to the terms and conditions of this Agreement, CONTENT PROVIDER hereby grants and assigns by means of present assignment to COMPANY and COMPANY hereby assumes for the Term of this Agreement (as set forth in paragraph 8, below), CONTENT PROVIDER'S rights and obligations regarding the Content from Licensors as set forth in Exhibit A with respect to the right and license for the territory of the People Republic of China to use, reproduce, distribute, transmit and publicly display the Current Content and the Future Content by means of the internet in accordance with Exhibit A and this Agreement. In this regard, it is specifically understood and agreed that CONTENT PROVIDER will not during the Term of this Agreement take any action to exploit or otherwise use, reproduce, distribute, transmit and publicly display any of the Content via the internet to Universities and College students in the People's Republic of China except for the benefit of the COMPANY. + + + + + + + +B. CONTENT PROVIDER further grants to COMPANY (i) the right to sublicense the Content to COMPANY'S wholly-owned subsidiaries or to joint ventures in which COMPANY participates for the sole purpose of using, reproducing, distributing, transmitting and publicly displaying the Content in accordance with this Agreement; and, (ii) the right, in COMPANY'S discretion, to use and exploit the Content at one or more other web sites in addition to or in lieu of the web sites referred to in the recital above (the web sites referred to above and any other web sites in addition to or in lieu thereof where COMPANY, its subsidiaries or joint ventures in which it might participate might use or exploit the Content are hereinafter collectively referred to as the "Web site"). + + + +Source: MIDWEST ENERGY EMISSIONS CORP., 8-K, 6/4/2008 + + + + + + 2. CONSIDERATION + + + +A. In consideration for the license of rights granted hereunder in the Current Content, COMPANY hereby agrees to issue to YGP 16,200 shares of its Series A Convertible Preferred Stock for which YGP will pay COMPANY the sum of $1.00 per share or $16,200 in the aggregate; NCM 3,000 of its Series A Convertible Preferred Stock for which NCM will pay COMPANY the sum of $1.00 per share or $3,000 in the aggregate and TWK 12,000 of its Series A Convertible Preferred Stock for which TWK will pay COMPANY the sum of $1.00 per share or $12,000 in the aggregate. Prior to the execution hereof, CONTENT PROVIDER has been furnished with a copy of the Certificate of Designation for the Series A Convertible Preferred Stock and is fully familiar with the terms and conditions thereof. + + + + + + + +B. In addition to the foregoing, and subject to the terms and conditions of the applicable content agreement with such Licensor, COMPANY agrees to pay directly to each Licensor from whom CONTENT PROVIDER might obtain Content which CONTENT PROVIDER licenses to COMPANY pursuant hereto a royalty equal to that royalty which CONTENT PROVIDER might be obligated to pay to that Licensor with respect to the use and exploitation of that Content in the manner licensed to and actually used by COMPANY pursuant hereto provided, however, unless the Parties might agree in writing to the contrary, in no event will COMPANY be obligated to pay such Licensor for the use of such Content more than fifty percent (50.0%) of all revenues generated during the Term of this Agreement from banner advertising that appears on Web site pages that display that Content or any portion thereof and with respect to which at least a majority of the content (excluding advertisements) on such pages is composed of the Content (the "Net Advertising Revenue"). + + + + + + + +C. Subject to the terms and conditions of the applicable content agreement with such Licensor, the Net Advertising Revenue shall be calculated on a quarterly calendar basis (the "Net Advertising Revenue Period") and shall be payable no later than sixty (60) days after the termination of the preceding full quarter-annual period, i.e., commencing on the first (1st) day of January, April, July and October except that the first and last calendar periods may be "short," depending on the effective date of this Agreement. + + + + + + + +D. For each Net Advertising Revenue Period, COMPANY shall provide the Licensor of such Content with a written statement of account setting out the actual number of visits to the Web Site during the applicable Net Advertising Revenue Period. Such statement shall be furnished to the Licensor of such Content regardless of whether any visits to the Web site were made during the applicable period. + + + + + + E. COMPANY'S obligation for the payment of the Net Advertising Revenue shall survive expiration or termination of this Agreement and will continue for as long as COMPANY continues to use the Content. + + + + + +F. For the avoidance of doubt or confusion, the sole consideration paid or payable to CONTENT PROVIDER pursuant to this Agreement is that provided for in paragraph 2A hereof and in no event will CONTENT PROVIDER be entitled to receive any participation in any of the revenues which COMPANY might derive from the Content. + + + + 3. CONTENT PROVIDER'S RESPONSIBILITIES + + A. CONTENT PROVIDER will provide to COMPANY the Content, which will comply with thedescription attached hereto as Exhibit A. + + + + B. CONTENT PROVIDER will have sole responsibility for providing, at its expense, the Content to COMPANY. CONTENT PROVIDER and COMPANY will determine mutually agreeable methods for the transmission and incorporation of updates to the Content. + + + +Source: MIDWEST ENERGY EMISSIONS CORP., 8-K, 6/4/2008 + + + + + + 4. RIGHTS OF COMPANY + + + +A. Subject to the terms and conditions of the applicable content agreement with such Licensor, COMPANY may incorporate the Content into certain pages in the Web Site (the "Content Pages") and reasonable excerpts or portions of the Content may be incorporated into the Web site at COMPANY'S discretion. + + + + + + B. COMPANY shall have sole control over the content, composition, and "look and feel" of the Web site, and will have sole responsibility for providing, hosting and maintaining, at its own expense, the Web site. + + 5. RIGHTS OF CONTENT PROVIDER + + A. Subject to the terms and conditions of the applicable content agreement with such Licensor, CONTENT PROVIDER will have sole control and responsibility over the data and information contained in the Content. + + + + + +B. CONTENT PROVIDER will not alter the Content without COMPANY'S prior written consent; provided, however, that, subject to the terms and conditions of the applicable content agreement with such Licensor,CONTENT PROVIDER may promptly and without prior consent of COMPANY make any changes in the Content to correct errors and the like, or to remove any defamatory materials or any other materials that CONTENT PROVIDER can demonstrate are offensive to a reasonable number of users of the Web site. + + + + 6. RECORD INSPECTION, AUDIT AND INCONTESTABILITY PERIOD + + + +A. COMPANY will maintain accurate books and records with respect to the calculation of all payments due under this Agreement. The Licensors shall have the right, upon reasonable notice, to inspect COMPANY'S books and records and all other documents and material in COMPANY'S possession or control with respect to the Content each has or might license to CONTENT PROVIDER which becomes the subject matter of this Agreement (and only with respect to Content each has or might license to CONTENT PROVIDER which become the subject matter hereof). + + + + + + B. All books and records relative to COMPANY'S obligations to a particular Licensor hereunder shall be maintained and made accessible to that Licensor for inspection at a location in Los Angeles, California for at least twelve (12) months after termination of this Agreement. + + + + + +C. Each report rendered by COMPANY to a Licensor hereunder shall become final and incontestable twelve (12) months following the date COMPANY might render same to that Licensor unless prior to the expiration of that twelve (12) month period that Licensor provides COMPANY with a detailed written objection thereto. + + + + 7. OWNERSHIP + + + +A. CONTENT PROVIDER, LICENSORS or either of them, as appropriate, shall retain all worldwide rights, title and interest in and to the Content (including, but not limited to, ownership of all copyrights and other intellectual property rights therein), as well as all right, title and interest in and to their and each of their trademarks, service marks and trade names, worldwide, including any goodwill associated therewith, subject to the limited license granted to COMPANY hereunder. + + + + + + + +B. COMPANY will retain all worldwide rights, title, and interest in and to the Web Site (including, but not limited to, ownership of all copyrights, trademarks, look and feel and other intellectual property rights therein), as well as all right, title and interest in and to its trademarks, service marks and trade names worldwide, including any goodwill associated therewith, subject to the limited license granted + +Source: MIDWEST ENERGY EMISSIONS CORP., 8-K, 6/4/2008 + + + + + +to CONTENT PROVIDER hereunder. Any use of any such trademarks by CONTENT PROVIDER shall inure to the benefit of COMPANY and CONTENT PROVIDER shall take no action that is inconsistent with COMPANY'S ownership thereof. + + + +C. Each party hereby grants to the other a non-exclusive, limited royalty-free license to use its trademarks, service marks or trade names only as specifically described in this Agreement. All such use shall be in accordance with each party's reasonable policies regarding advertising and trademark usage as established from time to time. + + + + 8. TERM + + + +A. This Agreement and the provisions hereof, except as otherwise provided, shall be in full force and effect commencing on the date of execution by both Parties and shall extend for an initial term of two (2) years. This Agreement shall be automatically renewed for additional extended terms each of two (2) years duration unless either party notifies the other in writing of its intention not to renew the Agreement, such notification to be provided at least ninety (90) days prior to the expiration of the then in-effect term. The initial two (2) year term as it might be extended herein is referred to herein as the "Term." + + + + + + + +B. Notwithstanding anything in the foregoing paragraph to the contrary, with respect to each item of Current Content or Future Content the Term during which COMPANY may use and exploit same shall commence on the date hereof and continue for that period of time which is the longer of: (i) two (2) years following the date on which CONTENT PROVIDER might make full delivery of such Content to COMPANY; and (ii) the duration of the term of the license concerning that Content between CONTENT PROVIDER and its Licensor thereof. + + + + 9. TERMINATION + + A. This Agreement may be terminated by either party upon thirty (30) days written notice to the other in the event of a breach of a material provision hereof unless, during that thirty (30) day period, the party receiving the notice cures the breach. + + + + B. COMPANY may, in its unfettered discretion, terminate this Agreement at any time after first givingCONTENT PROVIDER ten (10) days advance notice thereof. + + 10. EFFECT OF TERMINATION + + A. The termination or expiration of this Agreement will in no way affect COMPANY'S obligation to render reports or pay sums shown as owing thereon for periods of time prior to the termination or expiration of this Agreement;. + + + + B. The warranties, representations and indemnity obligations of this Agreement will survive terminationor expiration of this Agreement. + + 11. CONFIDENTIALITY + + A. "Confidential Information" shall mean any confidential technical data, trade secret, know-how or other confidential information disclosed by any party hereunder in writing, orally, by drawing or otherwise. + + B. Notwithstanding the foregoing, Confidential Information shall not include information which: (i) is known to the receiving party at the time of disclosure or becomes known to the receiving party without breach of this Agreement; (ii) is or becomes publicly known through no wrongful act of the + +Source: MIDWEST ENERGY EMISSIONS CORP., 8-K, 6/4/2008 + + + + + + receiving party or any subsidiary of the receiving party; (iii) is rightfully received from a third partywithout restriction on disclosure; (iv) is independently developed by the receiving party or any of its subsidiaries; (v) is furnished to any third party by the disclosing party without restriction on its disclosure; (vi) is approved for release upon a prior written consent of the disclosing party; or, (vii) is disclosed pursuant to judicial order, requirement of a governmental agency or by operation of law. + + + + + + + +C. The receiving party agrees that it will not disclose any Confidential Information to any third party and will not use Confidential Information of the disclosing party for any purpose other than for the performance of the rights and obligations hereunder during the term of this Agreement and for a period of three (3) years thereafter, without the prior written consent of the disclosing party. The receiving party further agrees that Confidential Information shall remain the sole property of the disclosing party and that it will take all reasonable precautions to prevent any unauthorized disclosure of Confidential Information by its employees. No license shall be granted by the disclosing party to the receiving party with respect to Confidential Information disclosed hereunder unless otherwise expressly provided herein. + + + + + + D. Upon the request of the disclosing party, the receiving party will promptly return all ConfidentialInformation furnished hereunder and all copies thereof. + + + + + +E. The Parties agree that all publicity and public announcements concerning the formation and existence of this Agreement shall be jointly planned and coordinated by and among the Parties. Neither party shall disclose any of the specific terms of this Agreement to any third party without the prior written consent of the other party, which consent shall not be withheld unreasonably. Notwithstanding the foregoing, any party may disclose information concerning this Agreement as required by the rules, orders, regulations, subpoenas or directives of a court, government or governmental agency, after giving prior notice to the other party. + + + + + + + +F. If a party breaches any of its obligations with respect to confidentiality and unauthorized use of Confidential Information hereunder, the non-breaching party shall be entitled to equitable relief to protect its interest therein, including but not limited to injunctive relief, as well as money damages notwithstanding anything to the contrary contained herein. + + + + + + G. Except as otherwise set forth in this Agreement, neither party will make any public statement, press release or other announcement relating to the terms of or existence of this Agreement without the prior written approval of the other, which approval shall not be unreasonably withheld. + + 12. WARRANTIES AND REPRESENTATIONS A. CONTENT PROVIDER warrants and represents that + + + +(i) CONTENT PROVIDER has the full right, power, legal capacity and authority to enter into this Agreement, to carry out the terms and conditions hereof and to grant to COMPANY the rights, licenses and privileges herein granted to COMPANY. Except as otherwise provided herein, CONTENT PROVIDER does not need the consent or release of any other person, firm or entity in order for CONTENT PROVIDER to enter into this Agreement and to grant to COMPANY the rights granted pursuant to this Agreement. + + + + + + + +(ii) With respect to the Content and each item thereof, the execution, delivery and performance of this Agreement by CONTENT PROVIDER shall not violate or contravene any certificate of incorporation or by-laws of CONTENT PROVIDER or any agreement or other instrument to which CONTENT PROVIDER is a party. This Agreement has been duly authorized, executed and delivered by CONTENT PROVIDER. + + + + (iii) With respect to the Content and each item thereof, neither the Content nor anything contained therein (including, but not limited to, the title thereof and any music and sound synchronized + +Source: MIDWEST ENERGY EMISSIONS CORP., 8-K, 6/4/2008 + + + + + + + +therewith), nor any use or distribution or exploitation of the Content, nor any exercise by COMPANY of any or all of the rights granted to COMPANY pursuant to this Agreement, nor any materials delivered hereunder shall at any time during the Term as it might be extended, violate or infringe upon any right or interest of any person or entity, including, but not limited to, any copyright, literary right, dramatic right, privacy right, musical right, publicity right, artistic right, personal right, property right, civil right, trademark right, trade name, service mark or any other right or interest of any person or entity. + + + + + + + +(iv) With respect to the Content and each item thereof, during the Term as it might be extended, there shall not be any actual or threatened liens, claims, encumbrances, legal proceedings, restrictions, agreements or understandings which will conflict or interfere with, limit, derogate from, or be inconsistent with, or otherwise affect any of the provisions of this Agreement, any of the representations and warranties of CONTENT PROVIDER contained herein or the enjoyment by COMPANY of any or all of the rights granted to COMPANY hereunder. + + + + + + + +(v) With respect to the Content and each item thereof, CONTENT PROVIDER owns and controls and shall for the full Term as it might be extended own and control, any and all rights necessary to enable CONTENT PROVIDER to grant to COMPANY the rights granted pursuant to this Agreement and to enable COMPANY to exercise and enjoy the rights granted to COMPANY pursuant to this Agreement (without COMPANY incurring any obligation or liability to any person or entity) including, but not limited to, all performance rights and advertising rights and all other rights granted to COMPANY hereunder in and to all literary, dramatic, musical and other material contained in the Content and each item thereof. With respect to the Content and each item thereof, CONTENT PROVIDER has secured and obtained, and CONTENT PROVIDER shall maintain throughout the Term as it might be extended all rights as may be required for the full and unlimited exercise and enjoyment by COMPANY of each and all of the rights herein granted to COMPANY. + + + + + + + +(vi) All obligations and amounts payable with respect to the Content and each item thereof or with respect to the production, distribution and exploitation thereof, including, but not limited to, all salaries, royalties, license fees, laboratory charges, union obligations and the like, have been and shall be fully paid and satisfied by CONTENT PROVIDER or third parties. COMPANY shall have no obligation for past, current or future salaries, royalties, laboratory charges, or similar payments with respect to the Content and each item thereof. + + + + + + + +(vii) The Content and each item thereof are not in the public domain and are validly copyrighted in the territories in which CONTENT PROVIDER has licensed COMPANY rights in the Content. The Content and each item thereof will not fall into the public domain anywhere in the territories in which CONTENT PROVIDER has licensed COMPANY rights in the Content prior to the expiration of the Term as it might be extended. Each Program, as delivered, will contain all proper copyright notices required or permitted under any applicable statute, act or treaty. + + + + + + + +(viii) Each CONTENT PROVIDER understands that the Preferred Shares being acquired by each CONTENT PROVIDER hereunder and any underlying securities (collectively referred to herein as the "Securities"), have not been registered under the Securities Act of 1933, as amended (the "Act"), and are being issued under an exemption from registration provided by Section 4(2) of the Act. The Securities are being acquired by each CONTENT PROVIDER solely for its own account, for investment purposes only, and have not been acquired with a view to, or in connection with, any resale, distribution, subdivision or fractionalization thereof. Each CONTENT PROVIDER has no agreement or other arrangement, formal or informal, with any person to sell, transfer or pledge any part of the Securities. Each CONTENT PROVIDER understands that CONTENT PROVIDER must bear the economic risk of the investment for an indefinite period of time because the Securities cannot be resold or otherwise transferred unless they are subsequently registered under the Act or an exemption from such registration is available. + + + + Source: MIDWEST ENERGY EMISSIONS CORP., 8-K, 6/4/2008 + + + + + + + +(ix) CONTENT PROVIDER'S warranties, representations and agreements are of the essence of this Agreement and shall survive for the full Term as it might be extended. None of CONTENT PROVIDER'S representations, warranties or agreements shall in any way be limited by reason of any investigation made by COMPANY of any documents, agreements or other materials submitted to COMPANY by CONTENT PROVIDER hereunder. + + + + 13. INDEMNIFICATION + + + +A. CONTENT PROVIDER shall, at its sole cost and expense, indemnify, save and hold harmless COMPANY and its successors, subdistributors, sublicensees, assigns, agents, representatives and affiliates from and against any and all claims, demands, causes of action, liability, loss, damage, cost and expense (including reasonable attorney's fees and court costs) incurred or sustained by reason of or arising out of any breach or alleged breach of any of the warranties, representations or agreements herein made by CONTENT PROVIDER, or by reason of any action, claim or proceeding related to or arising out of such breach or alleged breach by CONTENT PROVIDER. In the event that any person or entity shall make any claim or institute any suit or proceeding, COMPANY shall notify CONTENT PROVIDER in writing, and CONTENT PROVIDER must assume, at it own cost and expense, the defense thereof; provided, however, that COMPANY'S failure to provide such notice shall not affect this indemnity unless CONTENT PROVIDER has been materially prejudiced by such failure. COMPANY may, at its sole discretion, engage its own counsel in connection with any such suit, claim or proceeding, and the cost thereof (including reasonable fees and expenses) shall be borne by CONTENT PROVIDER provided that CONTENT PROVIDER shall in any event fulfill its obligation to undertake COMPANY'S defense. The final control and disposition of any claim, whether by settlement, compromise or otherwise, shall remain with COMPANY pursuant to the terms of this indemnification paragraph. In the event that CONTENT PROVIDER fails to promptly make any required payment to COMPANY, COMPANY shall have the right to withhold for its own account any royalties or other monies payable to CONTENT PROVIDER by COMPANY pursuant to this Agreement or any other agreement between CONTENT PROVIDER and COMPANY. + + + + + + + +B. COMPANY shall, at its sole cost and expense, indemnify, save and hold harmless CONTENT PROVIDER and its successors, subdistributors, sublicensees, assigns, agents, representatives and affiliates from and against any and all claims, demands, causes of action, liability, loss, damage, cost and expense (including reasonable attorney's fees and court costs) incurred or sustained by reason of or arising out of any breach or alleged breach of any of the warranties, representations or agreements herein made by COMPANY, or by reason of any action, claim or proceeding related to or arising out of such breach or alleged breach by COMPANY. In the event that any person or entity shall make any claim or institute any suit or proceeding, CONTENT PROVIDER shall notify COMPANY in writing, and COMPANY must assume, at it own cost and expense, the defense thereof; provided, however, that CONTENT PROVIDER'S failure to provide such notice shall not affect this indemnity unless COMPANY has been materially prejudiced by such failure. CONTENT PROVIDER may, at its sole discretion, engage its own counsel in connection with any such suit, claim or proceeding, and the cost thereof (including reasonable fees and expenses) shall be borne by COMPANY provided that COMANY shall in any event fulfill its obligation to undertake CONTENT PROVIDER'S defense. The final control and disposition of any claim, whether by settlement, compromise or otherwise, shall remain with CONTENT PROVIDER pursuant to the terms of this indemnification paragraph. In the event that COMPANY fails to promptly make any required payment to CONTENT PROVIDER, CONTENT PROVIDER shall have the right to withhold for its own account any royalties or other monies payable to COMPANY by CONTENT PROVIDER pursuant to this Agreement or any other agreement between COMPANY and CONTENT PROVIDER. + + + + + + + +C. IN NO EVENT WILL CONTENT PROVIDER BE LIABLE TO COMPANY NOR WILL COMPANY BE LIABLE TO CONTENT PROVIDER FOR ANY SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, WHETHER BASED ON BREACH OF CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE, WHETHER OR NOT THAT PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE. TH LIABILITY OF CONTENT PROVIDER FOR DAMAGES HEREUNDER, WHETHER IN CONTRACT, TORT + + + +Source: MIDWEST ENERGY EMISSIONS CORP., 8-K, 6/4/2008 + + + + + +OR ANY OTHER LEGAL THEORY, IS LIMITED TO, AND SHALL NOT EXCEED $31,200.00. 14. NOTICE AND PAYMENT + + + +All notices, requests and other communications hereunder shall be in writing and shall be delivered by courier or other means of personal service (including by means of a nationally recognized courier service or professional messenger service), or sent by telex or telecopy or mailed first class, postage prepaid, by certified mail, return receipt requested, in all cases, addressed as indicated in the introductory recital of this Agreement. All notices, requests and other communications shall be deemed given on the date of actual receipt or delivery as evidenced by written receipt, acknowledgment or other evidence of actual receipt or delivery to the address specified above. In case of service by telecopy, a copy of such notice shall be personally delivered or sent by registered or certified mail, in the manner set forth above, within three (3) business days thereafter. Any party hereto may from time to time by notice in writing served as set forth above designate a different address or a different or additional Person to which all such notices or communications thereafter are to be given. + + + + 15. GOVERNING LAW AND VENUE + + + +This Agreement is to be governed by and construed in accordance with the Laws of the State of California applicable to contracts made and to be performed wholly within such State, and without regard to the conflicts of laws principles thereof. Any suit brought hereon, whether in contract, tort, equity or otherwise, shall be brought in the state or federal courts sitting in Los Angeles County, California, the parties hereto hereby waiving any claim or defense that such forum is not convenient or proper. Each party hereby agrees that any such court shall have in personam jurisdiction over it, consents to service of process in any manner prescribed or authorized by California Law, and agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner specified by Law. + + + + 16. ARBITRATION + + + +Any controversy or claim arising out of or relating to this Agreement, or any agreements or instruments relating hereto or delivered in connection herewith or the breach, termination, enforcement, interpretation or validity thereof, including the determination of the scope or applicablility of this agreement to arbitrate, will at the request of any party be determined by arbitration in Los Angeles, California before three (3) arbitrators under the rules of the JAMS. Judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction. The institution and maintenance of an action for judicial relief in pursuit of a provisional or ancillary remedy shall not constitute a waiver of the right of any party, including the plaintiff, to submit the controversy or claim to arbitration. + + + + 17. ATTORNEYS' FEES + + In any suit, action, arbitration or other proceeding to interpret or enforce this Agreement, the prevailing party therein shall, in addition to any other award of damage or other remedy, be entitled to recover its reasonable attorneys' fees and costs. + + 18. AGREEMENT BINDING ON SUCCESSORS + + The provisions of this Agreement shall be binding upon and shall inure to the benefit of the Parties hereto,their heirs, administrators, successors and assigns. + + 19. WAIVER + +Source: MIDWEST ENERGY EMISSIONS CORP., 8-K, 6/4/2008 + + + + + + No waiver by either party of any default shall be deemed as a waiver of prior or subsequent default of thesame of other provisions of this Agreement. + + 20. SEVERABILITY + + If any term, clause or provision hereof is held invalid or unenforceable by a court of competent jurisdiction, such invalidity shall not affect the validity or operation of any other term, clause o provision and such invalid term, clause or provision shall be deemed severed from this Agreement. + + 21. FURTHER ACTION + + Each of COMPANY and CONTENT PROVIDER agrees to execute and deliver such other documents or agreements and take such other action as may be reasonably necessary or desirable for the implementation of this Agreement and the consummation of the transactions contemplated hereby. + + 22. INTEGRATION + + + +This Agreement constitutes the entire understanding of the Parties, and revokes and supersedes all prior agreements between the Parties and is intended as a final expression of their Agreement. It shall not be modified or amended except in writing signed by the Parties hereto and specifically referring to this Agreement. This Agreement shall take precedence over any other documents which may conflict with this Agreement. + + + + + + IN WITNESS WHEREOF, the Parties hereto, intending to be legally bound hereby, have each caused to beaffixed hereto his or its hand the day indicated. + + + + "CONTENT PROVIDER" "COMPANY" New China Media, LLC Digicorp, Inc. By /s/ Dennis Pelino By /s/ Jay Rifkin Name: Dennis Pelino Name: Jay Rifkin Title: Chairman Title: CEO "CONTENT PROVIDER": YGP, LLC By /s/ Dennis Pelino Name: Dennis Pelino Title: Managing Partner "CONTENT PROVIDER": TWK Holdings, LLC + +Source: MIDWEST ENERGY EMISSIONS CORP., 8-K, 6/4/2008 + + + + + + By /s/ Beh Chong Wah Name: Beh Chong Wah Title: Managing Member + + + + + +EXHIBIT A TO CONTENT LICENSE AGREEMENT BY AND AMONG DIGICORP, INC. AND NEW CHINA MEDIA, LLC; YGP, LLC and TWK HOLDINGS, LLC DATED June 2, 2008 + + + + DESCRIPTION OF CONTENT + + Supply Agreement for Content dated May 31, 2008 among Yes Television (Hong Kong) Limited, New ChinaMedia Limited and Youth Media "HKG" Limited, a copy of which is annexed hereto. + + Content derived from AVP, Inc. and other film content on a non-exclusive basis + +Source: MIDWEST ENERGY EMISSIONS CORP., 8-K, 6/4/2008 \ No newline at end of file diff --git a/full_contract_txt/Monsanto Company - SECOND A_R EXCLUSIVE AGENCY AND MARKETING AGREEMENT .txt b/full_contract_txt/Monsanto Company - SECOND A_R EXCLUSIVE AGENCY AND MARKETING AGREEMENT .txt new file mode 100644 index 0000000000000000000000000000000000000000..3ea20bc673dee86e7097835c7fe1158c708eb14b --- /dev/null +++ b/full_contract_txt/Monsanto Company - SECOND A_R EXCLUSIVE AGENCY AND MARKETING AGREEMENT .txt @@ -0,0 +1,2409 @@ +Exhibit 10.14(a) + +SECOND AMENDED AND RESTATED EXCLUSIVE AGENCY AND MARKETING AGREEMENT by and between MONSANTO COMPANY + +and + +THE SCOTTS COMPANY LLC Effective as of September 30, 1998 + + + + + +TABLE OF CONTENTS + +Article 1 - DEFINITIONS AND RULES OF CONSTRUCTION 1 + + Section 1.1 Definitions 1 + + Section 1.2 Rules of Construction and Interpretation 9 + +Article 2 - EXCLUSIVE AGENCY AND DISTRIBUTORSHIP 9 + + Section 2.1 Appointment of the Exclusive Agent 9 + + Section 2.2 The Agent's Obligations and Standards 10 + + Section 2.3 Appointment of Sub-Agents and Sub-Distributors 13 + + Section 2.4 Limitations on Agent 13 + + Section 2.5 Changes to Markets 13 + + Section 2.6 Scotts Miracle-Gro Sale Procedures 15 + + Section 2.7 Compliance 15 + +Article 3 - ACCOUNTING AND CASH FLOW FOR THE ROUNDUP L&G BUSINESS 17 + + Section 3.1 Bookkeeping and Financial Reporting 17 + + Section 3.2 Ordering, Invoicing and Cash Flow Cycle 18 + + Section 3.3 Expenses and Allocation Rules 19 + + Section 3.4 Resolution of Disputes Arising under Article 3 20 + + Section 3.5 Fixed Contribution to Expenses 20 + + Section 3.6 Commission 20 + + Section 3.7 [Intentionally deleted] 21 + + Section 3.8 Additional Commission 21 + +Article 4 - ROUNDUP L&G BUSINESS MANAGEMENT STRUCTURE 23 + + Section 4.1 Underlying principles for the Roundup L&G Business Management Structure. 23 + + Section 4.2 Steering Committee 23 + + Section 4.3 Business Units 25 + + Section 4.4 Global Support Team 25 + +Article 5 - DUTIES AND OBLIGATIONS OF MONSANTO 26 + + Section 5.1 Monsanto's Obligations and Rights 26 + + Section 5.2 Warranties 27 + +Article 6 - REPORTS AND ADDITIONAL OBLIGATIONS OF THE PARTIES 27 + + Section 6.1 Cooperation 27 + + Section 6.2 Use of EDI 27 + +ii + + + + + + Section 6.3 The Agent's Systems and Reporting Obligation 27 + + Section 6.4 Employee Incentives 28 + + Section 6.5 Insurance 28 + + Section 6.6 Liens 28 + + Section 6.7 Promoting Safe Use-Practices 29 + + Section 6.8 Monsanto Inspection Rights 29 + + Section 6.9 Recalls 29 + + Section 6.10 New Roundup Products 29 + + Section 6.11 Additional Roundup Products 32 + + Section 6.12 Confidentiality 34 + + Section 6.13 Noncompetition 35 + + Section 6.14 Industrial Property 37 + + Section 6.15 Conflicts of Interest 38 + + Section 6.16 Records Retention 39 + + Section 6.17 Additional Covenant of the Agent 39 + + Section 6.18 Roundup Telephone Number 39 + + Section 6.19 Additional Obligations 39 + +Article 7 - [Reserved] 39 + +Article 8 - REPRESENTATIONS, WARRANTIES, AND COVENANTS 39 + + Section 8.1 The Agent's Representations and Warranties 39 + + Section 8.2 Monsanto's Representations and Warranties 40 + +Article 9 - INDEMNIFICATION 41 + + Section 9.1 Indemnification and Claims Procedures 41 + +Article 10 - TERMS, TERMINATION, AND FORCE MAJEURE 42 + + Section 10.1 Terms 42 + + Section 10.2 [Reserved] 42 + + Section 10.3 [Reserved] 42 + + Section 10.4 Termination by Monsanto 42 + + Section 10.5 Termination by the Agent 47 + + Section 10.6 Roundup Sale 50 + + Section 10.7 Effect of Termination 52 + + Section 10.8 Force Majeure 53 + +iii + + + + + + Section 10.9 [Intentionally deleted] 53 + +Article 11 - MISCELLANEOUS 53 + + Section 11.1 Relationship of the Parties 53 + + Section 11.2 Interpretation in accordance with GAAP 54 + + Section 11.3 Currency 54 + + Section 11.4 Monsanto Obligations 54 + + Section 11.5 Expenses 54 + + Section 11.6 Entire Agreement 54 + + Section 11.7 Modification and Waiver 55 + + Section 11.8 Assignment 55 + + Section 11.9 Notices 56 + + Section 11.10 Severability 57 + + Section 11.11 Equal Opportunity 57 + + Section 11.12 Governing Law 58 + + Section 11.13 Public Announcements 58 + + Section 11.14 Counterparts 59 + +LIST OF EXHIBITS Exhibit D: Permitted Products LIST OF SCHEDULES Schedule 1.1(a): Activated Included Markets Schedule 1.1(b): Roundup Products Schedule 2.2(a): Annual Business Plan Template Schedule 3.2 (d): Form of Reconciliation Statement Schedule 3.3(c): Income Statement Definitions and Allocation Methods Schedule 4.2 (a): Steering Committee Schedule 6.11(a): Additional Roundup Products Schedule 6.11(f): Additional Roundup Products Trademarks + +iv + + + + + +SECOND AMENDED AND RESTATED EXCLUSIVE AGENCY AND MARKETING AGREEMENT + +THIS SECOND AMENDED AND RESTATED EXCLUSIVE AGENCY AND MARKETING AGREEMENT by and between Monsanto Company, a Delaware corporation ("Monsanto"), and The Scotts Company LLC, an Ohio limited liability company (f/k/a The Scotts Company, an Ohio corporation) (the "Agent"), is entered into on August 31, 2017 (the "Execution Date"), and shall amend and restate and supersede in its entirety the Amended and Restated Exclusive Agency Marketing Agreement and all other agreements to the extent addressed by or incorporated into this Agreement, dated as of September 30, 1998, as amended and restated as of November 11, 1998, and as amended and/or restated from time to time (collectively, the "Original Agreement"), with respect to the countries and territories described in this Agreement. Other countries and territories included in the Original Agreement that, as of the Execution Date, will no longer be addressed in this Agreement will be addressed in a separate agreement, effective as of the Execution Date, with respect to such countries and territories by and between Monsanto and the purchaser of Agent's international business. Monsanto and the Agent are sometimes referred to herein as the "parties." + +WITNESSETH: + +WHEREAS, Monsanto is engaged in the research, development, and commercialization of certain agricultural products; + +WHEREAS, Monsanto has developed and sells Roundup Products (as defined below) and is the exclusive owner of all rights, patents, licenses, and trademarks associated therewith, and possesses the knowledge, know-how, technical information, and expertise regarding the process and manufacture of Roundup Products; + +WHEREAS, the Agent has certain expertise in the promotion, distribution, marketing, and sale of home and garden products; + +WHEREAS, Monsanto does not currently possess, nor desire to establish, a distribution system for Roundup Products; + +WHEREAS, the Agent's distribution system is well-suited for the promotion, distribution, marketing, and sale of Roundup Products; + +WHEREAS, Monsanto desires that the Agent serve as Monsanto's exclusive agent for the marketing and distribution of Roundup Products, and the Agent desires to so serve, all on the terms set forth in this Agreement; and + +1 + + + + + +NOW, THEREFORE, in consideration of the foregoing, the terms and provisions contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: + +ARTICLE 1 - DEFINITIONS AND RULES OF CONSTRUCTION + +Section 1.1 Definitions. As used herein, the following terms shall have the meanings ascribed to them below: + +"365 Gross Profits" shall mean the aggregate amount of all invoice sales of Roundup 365 less reasonable amounts for product returns and credits, trade allowances, Cost of Goods Sold applicable to Roundup 365 and 365 Distribution Costs of Roundup 365. + +"365 Distribution Costs" shall mean the aggregate costs for freight in, freight out, warehousing and distribution administration of Roundup 365. + +"Activated Included Markets" means those Included Markets that are currently being serviced by the Agent, which are listed on Schedule 1.1(a); provided, that the Activated Included Markets may be modified from time to time pursuant to Section 2.5. + +"Additional Commission Amount" shall have the meaning set forth in Section 10.5(d)(iv). + +"Additional Roundup Products" shall have the meaning set forth in Section 6.11(a). + +"Additional Roundup Products Formulation Data" shall have the meaning set forth in Section 6.11(a). + +"Additional Roundup Products Trade Dress" shall have the meaning set forth in Section 6.11(l). + +"Additional Roundup Products Trademarks" shall have the meaning set forth in Section 6.11(f). + +"Additional Roundup Products Trademarks License" shall have the meaning set forth in Section 6.11(g). + +"Affiliate" of a person or entity shall mean: (i) any other person or entity directly, or indirectly through one or more intermediaries, controlling, controlled by, or under common control with such person or entity, (ii) any officer, director, partner, member, or direct or indirect beneficial owner of any 10% or greater of the equity or voting interests of such person or entity, or (iii) any other person or entity for which a person or entity described in clause (ii) acts in such capacity. + +"Ag Competitor" means any company developing, manufacturing, selling, marketing and/or distributing agricultural herbicides with net sales of agricultural herbicides in excess of Three Billion Dollars ($3,000,000,000) including, without limitation, The Dow Chemical Company, Bayer + +2 + + + + + +AG, Syngenta AG, BASF SE and E. I. DuPont de Nemours and Company (or any Affiliate of any of such entities and its and their successors and assigns). + +"Ag Market" means professionals (which, for the avoidance of doubt, includes farmers) who purchase and use Roundup Ag Products for agricultural, professional and industrial uses. + +"Agent" shall have the meaning set forth in the preamble to this Agreement. + +"Agent Proposed Product" shall have the meaning set forth in Section 6.10(b). + +"Annual Business Plan" shall have the meaning set forth in Section 2.2(a) hereof. + +"Approved Expense" shall have the meaning set forth in Section 3.3(a) hereof. + +"Allocated" means allocated pursuant to the Allocation Rules set forth in Schedule 3.3(c) hereof. + +"Allocated Expense" shall have the meaning set forth in Section 3.3(c). + +"Brand Decline Event" shall have the meaning set forth in Section 10.5(d)(i). + +"Budget" shall have the meaning set forth in Section 3.3(a) hereof. + +"Business Unit" shall have the meaning set forth in Section 4.3(a). + +"Change of Control" means, with respect to a Person, (i) the acquisition after the date hereof by any individual (or group of individuals acting in concert), corporation, company, association, joint venture or other entity, of beneficial ownership of 50% or more of the voting securities of such Person; or (ii) the consummation by such Person of a reorganization, merger or consolidation, or exchange of shares or sale or other disposition of all or substantially all of the assets of such Person, if immediately after giving effect to such transaction the individuals or entities who beneficially own voting securities immediately prior to such transaction beneficially own in the aggregate less than 50% of such voting securities immediately following such transaction; or (iii) the consummation by such Person of the sale or other disposition of all or substantially all of the assets of such Person other than to an Affiliate of such Person; or (iv) the consummation by such Person of a plan of complete liquidation or dissolution of such Person. + +"Commission" shall have the meaning set forth in Section 3.6(a) hereof. + +"Commission Statement" means, for any given Program Year, the statement prepared by the Agent on behalf of Monsanto pursuant to Section 3.6(c) detailing Program EBIT and the amount of the Commission for such Program Year. + +"Contribution Payment" shall have the meaning set forth in Section 3.5(a) hereof. + +"Cost of Goods Sold" means, for any given Program Year, the aggregate cost, as determined in accordance with GAAP applied on a consistent basis, of Roundup Products sold for such Program + +3 + + + + + +Year; provided, however, in computing this amount, the cost of Glyphosate, which is a component of this Cost of Goods Sold, shall equal the amount set forth in the Transfer Price, for such Program Year. + +"Customers" means, with respect to the Activated Included Markets, any Lawn and Garden Channel purchaser of Roundup Products for resale to the Lawn and Garden Market. + +"EDI" means electronic data interchange. + +"Effective Date" means September 30, 1998. + +"Event of Default" shall have the meaning set forth in Section 10.4(b) hereof. + +"Excluded Markets" means (i) any country subject to a comprehensive U.S. trade embargo; (ii) countries subject to other relevant embargos and trade restrictions to the extent that such relevant embargos and trade restrictions would materially adversely impact either party's ability to fulfill such party's duties and obligations under this Agreement; (iii) each other country expressly excluded from Included Markets and (iv) the Excluded Specified Markets. The Excluded Markets may be modified from time to time pursuant to Section 2.5. + +"Excluded Specified Markets" means every country, other than Israel and China, throughout the continents of Europe, Africa, Asia, Australia and Antarctica. + +"Exclusive Mexican Businesses" shall have the meaning set forth in the definition of "Lawn and Garden Channels." + +"Expense(s)" shall mean any expense or cost, direct or Allocated, incurred by either party in connection with the Roundup L&G Business, including (i) general, marketing, administrative and technical costs or expenses which shall include (a) the Allocated portion of the salary and bonus of the members of the Global Support Team to the extent such members are working on matters related to the Roundup L&G Business and (b) the Allocated portion of the salary and bonus of the employees of Agent's Business Units to the extent such employees are working on matters related to the Roundup L&G Business, (ii) service costs directly related to the Roundup L&G Business and (iii) any capital expenses approved by the Steering Committee. + +"FIFRA" means the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C.A. §135, et seq., as amended. + +"Formulation Agreement" means that certain Amended and Restated Formulation Agreement, dated as of February 24, 2012, by and between Monsanto and the Agent for the manufacture and packaging by the Agent of Roundup Products solely for North America to be entered by the parties upon closing of the sale of the Non-Roundup Assets. + +"GAAP" means generally accepted accounting principles as applied as of the Effective Date, as referred to in paragraphs 10 and 11 of the American Institute of Certified Public Accountants Statement on Auditing Standards No. 69. + +4 + + + + + +"Global Support Team" shall have the meaning set forth in Section 4.4(a) hereof. + +"Glyphosate" means N-phosphonomethylglycine in any form, including, but not limited to its acids, esters, and salts. + +"Included Markets" means every country throughout the North American continent, South American continent, the Caribbean, Israel and China, other than the Excluded Markets; provided, that the Included Markets may be modified from time to time pursuant to Section 2.5. + +"Income Taxes" means federal, state, local, or foreign taxes imposed on net income or profits; provided, however, such term shall not include any "sales or use" or "ad valorem" taxes (as such terms are customarily used) imposed on or resulting from the sale of Roundup Products. + +"Industrial Property" shall have the meaning set forth in Section 6.14 hereof. + +"Insolvency" of the Agent means that the Agent is generally not paying its debts as they become due, or admits in writing its inability to pay its debts generally, or makes a general assignment for the benefit of creditors or institutes any proceeding or voluntary case seeking to adjudicate it a bankrupt or insolvent or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief or protection of debtors, or seeks the entry of any order for relief or the appointment of a receiver, trustee, custodian or other similar official for it or for any substantial part of its property; or the Agent takes any action to authorize any of the actions described above in this definition, or any proceeding is instituted against the Agent seeking to adjudicate it a bankrupt or insolvent or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief or protection of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee, custodian or other similar official for it or for any substantial part of its property, and, as to any such proceeding, if being contested by the Agent in good faith, such proceedings remain undismissed or unstayed for a period of sixty (60) days. + +"Lawn and Garden Channels" include: (i) retail outlets primarily serving the Lawn and Garden Market; (ii) independent nurseries and hardware co-ops; (iii) home centers (like Home Depot or Lowes); (iv) mass merchants (like Wal-Mart or K-Mart); (v) membership/warehouse clubs serving the Lawn and Garden Market; (vi) other current or future channels of trade generally accepted and practiced as Lawn and Garden channels in the industry as may be determined from time to time by the Steering Committee; and (vii) in Mexico, the following sales channels are deemed to be exclusively within the Lawn and Garden Channels: Wal-Mart, Grupo Chedraui, COSTCO, City Club, Soriana, HEB, Home Depot and Lowes (the entities described in this clause (vii), the "Exclusive Mexican Businesses"). + +"Lawn and Garden Employee" shall have the meaning set forth in Section 6.13(e). + +"Lawn and Garden Market" means non-professionals who purchase and use Roundup Products for Lawn and Garden Uses. + +5 + + + + + +"Lawn and Garden Use" means (a) Residential Use as defined in 40 C.F.R. 152.3(u), and (b) any use for which a pesticide can be registered for use under FIFRA or other statutes, rules and regulations throughout the Included Markets in connection with vegetation control in, on or around homes, residential lawns, and residential gardens. + +"Laws" shall mean, with respect to any country, such country's statutes, regulations, rules, ordinances, or all other applicable laws. + +"License Agreement" means the Lawn and Garden Brand Extension Agreement entered into as of May 15, 2015 by and between Monsanto and the Agent, as amended. + +"MM" means after each number million in U.S. Dollars. + +"Material Breach" shall mean: + +(a) as to the Agent, a breach of this Agreement, which, as initially determined by Monsanto, with the written agreement of the Agent, or as determined by the Arbitrators pursuant to Section 10.4(g) of this Agreement: (i) is material; (ii) has not been cured within ninety (90) days after written notice thereof has been provided to Agent in accordance with Section 11.9 hereof; and (iii) is not remediable either by the payment of damages by Agent to Monsanto or by a decree of specific performance issued against Agent. + +(b) as to Monsanto, a breach of this Agreement, which, as initially determined by Agent, with the written agreement of Monsanto, or as determined by the Arbitrators pursuant to Section 10.4(g) of this Agreement: (i) is material; (ii) has not been cured within ninety (90) days after written notice thereof has been provided to Monsanto in accordance with Section 11.9 hereof; and (iii) is not remediable either by the payment of damages by Monsanto to Agent or by a decree of specific performance issued against Monsanto. + +"Material Fraud" shall mean: + +(a) as to Agent, one or more fraudulent acts or omissions committed by Agent or its officers or employees, which, as initially determined by Monsanto, with the written agreement of the Agent, or as determined by the Arbitrators pursuant to Section 10.4(g) of this Agreement: (i) is material; (ii) was engaged in with the intent to deceive Monsanto; and (iii) either a) has not been cured within ninety (90) days after written notice thereof has been provided to Agent in accordance with Section 11.9 hereof, or b) cannot be cured in the commercially reasonable opinion of Monsanto, and, if applicable, the Arbitrators. + +(b) as to Monsanto, one or more fraudulent acts or omissions committed by Monsanto or its officers or employees, which, as initially determined by Agent, with the written agreement of Monsanto, or as determined by the Arbitrators pursuant to Section 10.4(g) of this Agreement: (i) is material; (ii) was engaged in with the intent to deceive Agent; and (iii) either a) has not been cured within ninety (90) days after written notice thereof has been provided to Monsanto in accordance with Section 11.9 hereof, or b) cannot be cured in the commercially reasonable opinion of Agent, and, if applicable, the Arbitrators. + +6 + + + + + +"Material Willful Misconduct" shall mean: + +(a) as to Agent, one or more acts or omissions committed by Agent or its officers or employees, which, as initially determined by Monsanto, with the written agreement of the Agent, or as determined by the Arbitrators pursuant to Section 10.4(g) of this Agreement: (i) is material; (ii) constitutes willful misconduct; and (iii) either a) has not been cured within ninety (90) days after written notice thereof has been provided to Agent in accordance with Section 11.9 hereof, or b) cannot be cured in the commercially reasonable opinion of Monsanto, and, if applicable, the Arbitrators. + +(b) as to Monsanto, one or more acts or omissions committed by Monsanto or its officers or employees, which, as initially determined by Agent, with the written agreement of Monsanto, or as determined by the Arbitrators pursuant to Section 10.4(g) of this Agreement: (i) is material; (ii) constitutes willful misconduct; and (iii) either a) has not been cured within ninety (90) days after written notice thereof has been provided to Monsanto in accordance with Section 11.9 hereof, or b) cannot be cured in the commercially reasonable opinion of Agent, and, if applicable, the Arbitrators. + +"Mexican Roundup Ag Products" shall mean Roundup Ag Products in the Ag Market in Mexico marketed under the brand names "Faena," "Faena Fuerte 360," "Rival" and "Roundup" (or any variation thereof) as well as any new Roundup Ag Products of any SKU size that are not labeled for the Lawn and Garden Market and are not ready-to-use products that Monsanto may, in its sole discretion, introduce into the Ag Market in Mexico. + +"Monsanto" means Monsanto Company, a Delaware corporation. + +"Monsanto CRC" shall have the meaning set forth in Section 5.1(c). + +"Netbacks" means the expenses related to the Roundup L&G Business specified as such in Schedule 3.3(c). + +"New Product" shall have the meaning set forth in Section 6.10 hereof. + +"North America" means the United States of America, Puerto Rico, Canada and Mexico. + +"North America Territories" means the United States of America, Puerto Rico, Canada, Mexico and the Caribbean countries. + +"Other Included Markets" means any Included Market other than the North America Territories. + +"Person" means an individual, partnership, limited liability company, joint venture, association, corporation, trust, or any other legal entity. + +"Prime Rate" means, on any given date, the prime rate as published in the Wall Street Journal, for such date or, if not published therein, in another publication having national distribution. + +7 + + + + + +"Product Offer" shall have the meaning set forth in Section 6.10 hereof. + +"Program EBIT" means, for any given Program Year, the amount of Program Sales Revenues for such Program year, less the amount of Program Expenses for such Program Year, provided, however, for purposes of determining the Agent's Commission. + +"Program Expenses" means, for any given Program Year, applied on a consistent basis and in accordance with GAAP and the terms of this Agreement, the sum (without duplication) of (i) the aggregate Approved Expenses for such Program Year and (ii) the Cost of Goods Sold for such Program Year. + +"Program Sales Revenue" means, for any given Program Year, applied on a consistent basis and in accordance with GAAP, all revenues received or accrued by any party hereto from the sale of Roundup Products, less reasonable amounts for returns and credits, consistent with past practice. + +"Program Year" means the period of time beginning on October 1st of a specific calendar year and ending on September 30th of the immediately following calendar year, or such shorter period if a particular Program Year starts or ends in the middle of such Program Year. + +"Quarter" means any consecutive three-month period of a calendar year. + +"Restricted Party" shall have the meaning as set forth in Section 2.7(f) hereof. + +"Roundup 365" means non-selective residual weed and grass killer to be sold under the name Roundup Max Control 365. + +"Roundup L&G Business" means the marketing, sale, and distribution of Roundup Products through Lawn and Garden Channels to the Lawn and Garden Market for Lawn and Garden Uses. + +"Roundup Offering Materials" means any and all written descriptions of, solicitations or proposals with respect to or any information delivered in connection with, in each case, a potential Roundup Sale that are provided by Monsanto to any third party, or finalized for provision to a third party, for their evaluation of participation in a potential Roundup Sale, including, without limitation, relevant historical financial information and projections, along with a written summary of any additional information supplied orally by Monsanto to such third parties. + +"Roundup P&L" shall have the meaning set forth in Section 3.1(a). + +"Roundup Products" means (i) for each of the specific countries part of the Activated Included Markets the products registered for sale solely for Lawn and Garden Uses under a primary or alternate brand now containing the Roundup trademarks as listed on Schedule 1.1(b) attached hereto in the specific container sizes and formulations described thereon, it being understood that any change of container size or formulation in any given country part of the Activated Included Markets shall require the approval of the Steering Committee, (ii) such products as may be added from time to time by mutual agreement of the parties in accordance with the terms of this Agreement and (iii) any Additional Roundup Products, to the extent provided for by Section 6.11. + +8 + + + + + +"Roundup Quiet Period" shall have the meaning set forth in Section 10.6(a)(iii)(A). + +"Roundup Records" shall have the meaning as set forth in Section 3.1(a). + +"Roundup Sale" means (i) any sale, transfer, assignment or other disposition of all or substantially all of the assets or capital stock of the Roundup L&G Business or (ii) the license of all or substantially all of the Industrial Property, in each case, to the extent related to the Included Markets. + +"Roundup Sale Notice" shall have the meaning set forth in Section 10.6(a)(i). + +"Roundup Sale Notice Trigger" shall have the meaning set forth in Section 10.6(a)(i). + +"Roundup Superior Offer" means a bona fide written offer with respect to a Roundup Sale, which the board of directors of Monsanto (or its authorized delegates) determines (i) is more favorable, taking into account all relevant legal, financial and regulatory aspects, to Monsanto's stockholders than the transactions contemplated by the most recent proposal made by the Agent with respect to a Roundup Sale, taking into account the contents of all information and documentation delivered in connection with such proposal; provided, that, in determining whether the price terms of such bona fide written offer are more favorable, the board of directors of Monsanto (or its authorized delegates) may not discount the Agent's most recent proposal as a result of the fact that the Termination Fee is an offset or credit against the total purchase price; (ii) the failure of the board of directors of Monsanto (or its authorized delegates) to approve or recommend such offer would be inconsistent with its fiduciary duties under applicable law; (iii) the financing for which is fully committed or reasonably likely to be obtained; and (iv) is reasonably expected to be consummated on a timely basis. + +"Scotts Miracle-Gro" means The Scotts Miracle-Gro Company, an Ohio corporation and the parent of the Agent. + +"Scotts Miracle-Gro Sale" means (a) any Change of Control of (i) Scotts Miracle-Gro, (ii) the Agent, or (iii) any entity directly or indirectly controlling the Agent or any other Affiliate of the Agent to whom this Agreement may be transferred pursuant to Section 11.8 of this Agreement (Scotts Miracle-Gro or any such other entity, the "SMG Target"), or (b) the assignment of this Agreement pursuant to Section 11.8(b)(4) of this Agreement. + +"Sell-Through Business" means, with respect to the Activated Included Markets, unit volume sales determined by Program Year point-of-sale unit movement at those Customers for which measurable data on a consistent basis is reasonably available and which (i) are among the top 20 Customers in the Activated Included Markets for each of the Program Years in question and (ii) provide measurable data on a consistent basis for each of the Program Years in question. Such point-of-sale information shall be based on census data gathered from such top 20 Customers and transmitted via electronic data interchange (EDI) on a weekly reported basis. + +"Significant Deviation" shall have the meaning set forth in Section 4.3(b). + +9 + + + + + +"SMG Target" shall have the meaning set forth in the definition of Scotts Miracle-Gro Sale. + +"Steering Committee" shall have the meaning set forth in Section 4.2. + +"Transfer Price" equals, for any given Program Year, $6.28 per kg ($2.85 per pound) of Glyphosate based on a 100% Glyphosate acid equivalent basis (which equals $1.31 per pound of 62% Glyphosate active ingredient (in the form of its isopropylamine salt)). Either party may initiate a review of the Transfer Price and upon such initiation, the parties will negotiate in good faith to reach a mutually agreeable adjusted Transfer Price (the "Adjusted Transfer Price"). The Adjusted Transfer Price shall be the Transfer Price for the three full Program Years following the date that the Adjusted Transfer Price is determined (the "Fixed Period") and the Transfer Price shall not be subject to review or adjustment during the Fixed Period. In the course of negotiations to determine the Adjusted Transfer Price, the parties will factor in, without limitation, the acquisition of Glyphosate acid sourced from China, the related ocean freight, export and import costs (including, without limitation, clearing costs, port fees, duties and taxes), inland freight costs and insurance, amination costs, broker fees, administration expenses and premium reflecting Monsanto's quality, reliability and MUP regulatory support, etc. + +"Unactivated Included Markets" shall have the meaning set forth in Section 2.5(b). + +"USEPA" means the United States Environmental Protection Agency. + +Section 1.2 Rules of Construction and Interpretation. + +(a) Section References. When a reference is made in this Agreement to an Article, Section, Paragraph, Exhibit or Schedule such reference shall be to an Article, Section or Paragraph of, or an Exhibit or Schedule to, this Agreement unless otherwise indicated. Unless otherwise indicated, the words "herein," "hereof," "hereunder" and other words of similar import refer to this Agreement as a whole, and not to any particular Article, Section, Paragraph or clause in this Agreement. + +(b) Construction. Unless the context of this Agreement clearly requires otherwise: (i) references to the plural include the singular and vice versa, (ii) "including" is not limiting and (iii) "or" has the inclusive meaning represented by the phrase "and/or." + +(c) Headings. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. + +(d) No Interpretation against Author. For purposes of contract interpretation the parties to this Agreement agree they are joint authors and draftspersons of this Agreement. + +(e) Conflicts with related Documents. The parties contemplate that various forms, including forms for submitting purchase orders, acceptance of orders, shipping and transportation, will be used in carrying out this Agreement. In the event of conflict between any such forms or other documents of like import and this Agreement, the provisions of this Agreement shall be controlling. + +10 + + + + + +ARTICLE 2 - EXCLUSIVE AGENCY AND DISTRIBUTORSHIP + +Section 2.1 Appointment of the Exclusive Agent. Subject to the terms and conditions hereof, Monsanto hereby appoints and agrees to use the Agent, and the Agent hereby agrees to serve, as Monsanto's exclusive agent in the Lawn and Garden Market, commencing on the Effective Date, to provide certain services in connection with Monsanto's marketing, sales, and distribution of Roundup Products to Customers. Except as otherwise provided in this Agreement, commencing on the Effective Date, Monsanto shall exclusively use the Agent for the performance of all of the services contemplated by this Agreement. + +Section 2.2 The Agent's Obligations and Standards. + +(a) Services to be Performed by the Agent. The Agent shall perform some or all of the following duties and obligations within the parameters and to the extent required to implement the Annual Business Plan approved by the Steering Committee: + +(1) Sales. Pursuant to the Annual Business Plan, the Agent shall perform selling, sales management, and other services related to the sale of Roundup Products. + +(2) Merchandising and In-Facility Services. The Agent shall perform in-store merchandising, store set-up, and other services related to the in-store promotion of Roundup Products. + +(3) Warehousing and Inventory. + +(i) Warehousing. The Agent shall arrange for warehouse services for all Roundup Products until such time as the products are delivered to proper carriers. The Agent agrees to comply with all applicable environmental rules and regulations in owning or operating any warehouse. + +(ii) Inventory. The Agent shall be responsible for: + +•coordinating and staffing annual physical inventory for all Roundup Products (including raw materials, packaging- when the Agent shall formulate under the Formulation Agreement- and finished goods). Physical inventories shall be conducted by September 30 of every calendar year and Monsanto shall have the right to request physical counts on specific product at any time upon reasonable request (which shall be at Monsanto's cost if there are more than two such counts in any Program Year) and to observe or conduct physical counts with Monsanto's representatives; + +•reconciling the physical inventory to perpetual records; + +•physically moving the Roundup Products out of the warehouse by following a First In, First Out ("FIFO") policy; and + +11 + + + + + +•arranging for warehousing of adequate inventory levels of Roundup Products in sufficient quantities to satisfy the criteria set forth in the Annual Business Plan. + +(4) Order and General Administration. The Agent shall have the authority and shall so perform all order taking, order processing, invoicing, collection, reconciliation, general administration, and other related services necessary for the marketing, sales, and distribution of Roundup Products, all of which shall be subject to the Annual Business Plan and the terms of this Agreement. Pursuant to the terms of this Agreement, the Agent shall be responsible for the following obligations: + +(i) The Agent shall offer to the Customers Roundup Products at such price and under such terms as set forth in the Annual Business Plan or as otherwise established by the Steering Committee. + +(ii) The Agent shall accept orders for the sale of Roundup Products; provided, however, the Agent shall accept all such orders subject to the availability of Roundup Products on the requested delivery dates. + +(iii) The Agent shall administer all claims and adjustments for Roundup Products which are damaged during shipment or warehousing. + +(iv) Subject to Section 5.1, the Agent shall (A) maintain or contract for adequate facilities and technologies to manage consumer information and complaint calls or written correspondence and (B) be responsible for all reports relating thereto, including (without limitation) reports to any regulatory or governmental authority pursuant to any applicable Law. + +(5) Returns of Roundup Products. The Agent shall manage requests by Customers that Roundup Products, previously sold or shipped, should be returned for credit, either because such Roundup Products are defective or for some other reason. The Agent shall receive any such returned Roundup Products into its warehouses and prepare the appropriate credit memos, subject to the joint approval of the Business Unit and the Global Support Team for any return exceeding $500,000. + +(6) Information on Roundup Products and Consumer Inquiries. The Agent shall provide Customers or potential customers with detailed information concerning the characteristics, uses and availability of Roundup Products as shall be supplied by the Global Support Team. + +(7) Promotion of Roundup Products. Continuously throughout the term of this Agreement, the Agent shall promote the sale of Roundup Products in a commercially reasonable manner generally consistent with other products or product lines, of similar volume or having similar margins (as compared to the overall Roundup P&L margins), of the Agent. + +12 + + + + + +(8) Advertising and Promotional Programs to Customers. The Agent shall provide Customers with detailed information concerning the advertising and promotional programs of Roundup Products and facilitate the use by its Customers of such programs to the fullest extent possible (as set forth in the Annual Business Plan). + +(9) Roundup Brand Image and Stewardship. The Agent, in consultation with the Global Support Team, shall promote, in accordance with the Annual Business Plan or as directed by the Steering Committee, the sales and consumer acceptance of Roundup Products using messages and vehicles that are not inconsistent with the brand image established by Monsanto's Ag division in support of its Roundup branded products and seeds, including but not limited to: + +(i) Advertising in local and national media, subject to the approval of Monsanto; + +(ii) Providing suitable training of the Agent's representatives or employees in the areas of product knowledge, product stewardship, sales training, display techniques, promotion and advertising; + +(iii) Determining the description of consumer and trade communication programs to Customers regarding the sales and distribution of Roundup Products; and + +(iv) The handling of product complaints with the intent of achieving consumer satisfaction and shall provide prompt notification to Monsanto of any significant complaints or significant number of similar complaints. + +(10) Retail Relationships. The Agent shall maintain retail relationships between the Agent and the Customers, including relationships at headquarters and regional stores. + +(11) Merchandising and Display Techniques. The Agent shall provide Customers with full information concerning the merchandising and display techniques as set forth in the Annual Business Plan. The Agent shall use, fully support and recommend, that Customers fully utilize all such merchandising and display techniques. + +(12) Annual Business Plan. The Business Units, jointly and in cooperation with the Global Roundup Support Team, shall, prepare and deliver to the Steering Committee (i) a preliminary draft for the annual business plan no later than June 15 of each Program Year and (ii) a definitive version thereof no later than September 15 of each Program Year (the "Annual Business Plan"), which establishes the general marketing, distribution, sales information, and specifications of Roundup Products for such Program Year (or shorter period, if applicable) including the Agent's short and long-term sales goals with respect to Roundup Products for such Program Year, an example template of which is described on Schedule 2.2(a), or as the parties may agree from time to time. Upon approval by the Steering Committee, the Annual Business Plan shall serve as the Agent's parameters for implementing the day-to-day operation of the Roundup Business; any Significant Deviations from such Annual Business Plan + +13 + + + + + +shall require the prior approval of the Steering Committee unless already approved by the Global Support Team and the Business Unit pursuant to Section 4.2(c). + +(13) Consumer Call Center. The Agent shall be responsible for maintaining a consumer call center relating to Roundup Products; provided, however, that if there is a medical response call (including human and animal health- related calls) and related FIFRA 6(a)(2) issues, the Agent shall immediately transfer such call to the Monsanto CRC and will immediately report such information to Monsanto. + +(14) Additional Actions. The Agent shall perform such additional actions, consistent with this Agreement, as directed by the Steering Committee, to implement any Significant Deviations from the Annual Business Plans. + +(b) Employee Performance Standards. The Annual Business Plan shall set forth the employee performance standards required in the parties' opinion to promote the achievement of the income targets for the Roundup L&G Business in each given Program Year. The Annual Business Plan shall also specify the impact which the failure to meet such performance standards may have on the incentive schemes and bonus plans of the individual members of the Global Support Team and those employees who are part of the Business Units in charge of the Roundup L&G Business. + +Section 2.3 Appointment of Sub-Agents and Sub-Distributors. The Agent shall have the right to delegate part of its obligations under this Article 2 to sub-agents and sub-distributors; provided, however, the Agent shall remain primarily liable for all of its obligations hereunder and shall be primarily liable for any act or omission of any such sub-agent or sub-distributor. To the extent this Agreement creates any obligations on the Agent, such obligations shall apply with respect to any sub-agents or sub- distributors, as the case may be. In connection with the foregoing, any reports or other information to be given to Monsanto shall be given by the Agent and shall include any information applicable to sub-agents or sub-distributors, as the case may be. + +Section 2.4 Limitations on Agent. Notwithstanding anything in this Agreement to the contrary, the Agent shall not, without the written consent of the Steering Committee, take (or initiate) any of the following actions: + +(a) Sell Roundup Products at a price or under terms not permitted under the Annual Business Plan; + +(b) Possess or use any property of Monsanto, except to the extent necessary for Agent to perform its duties and obligations hereunder (e.g., in-store displays); + +(c) Hold itself out as authorized to make on behalf of Monsanto any oral or written warranty or representation regarding Roundup Products other than what is stated on the applicable Roundup Products label or in other written material furnished to the Agent by Monsanto; or + +14 + + + + + +(d) Intentionally dilute, contaminate, adulterate, or substitute any Roundup Products. + +Section 2.5 Changes to Markets. + +(a) Subject to the terms of this Section 2.5, the Included Markets, the Activated Included Markets or the Excluded Markets may be amended from time to time as more particularly set forth below. + +(b) Monsanto agrees that it will not promote, distribute or sell Roundup Products in any Excluded Market (other than the Excluded Specified Markets) without first complying with the provisions of this Section 2.5(b) and Section 2.5(c). Either Monsanto or the Agent may propose to the Steering Committee moving an Excluded Market (other than the Excluded Specified Markets) to the list of Included Markets or commencing distribution of Roundup Products in an Included Market that is not currently being serviced by the Agent and adding such Included Market to Schedule 1.1(a) as an Activated Included Market (any Included Market that is not being serviced by the Agent are "Unactivated Included Markets") by providing a proposal (the "Included Markets Proposal") to the Steering Committee including the proposed (i) term (i.e., duration of amendment or transition period), (ii) adjustment to the calculation for the Commission, and (iii) adjustment to the Commission Thresholds. The parties agree to negotiate in good faith with respect to the terms of any such Included Markets Proposal with the goal of benefitting the Roundup P&L. + +(c) If the Agent affirmatively rejects an Included Markets Proposal made by Monsanto by delivering a written notice to Monsanto within sixty (60) days after the delivery of the Included Markets Proposal, then such proposed Included Market shall be considered an Excluded Market; and in all Excluded Markets Monsanto shall have the exclusive right to promote, distribute and sell Roundup Products in any such country or countries and otherwise expand Monsanto's Roundup L&G Business; provided, that if, after the Agent rejects an Included Markets Proposal, Monsanto materially changes the economic terms of such Included Markets Proposal in a manner that would have made the Included Markets Proposal more attractive to the Roundup P&L to offer it to another agent or distributor, such revised proposal shall be treated as a new Included Markets Proposal for purposes of this Section 2.5 except that the Agent shall have a thirty (30) day period in lieu of the sixty (60) day period set forth above. + +(d) The Steering Committee may either accept or reject any Included Markets Proposal made to the Steering Committee pursuant to Section 2.5(b) in its sole and reasonable discretion; provided, that the Steering Committee shall not reject any Included Markets Proposal unless it is reasonably demonstrable that the acceptance of such Included Markets Proposal would have an adverse effect on Monsanto balanced against the potential benefit to the Roundup P&L; provided, further, that, without the prior written consent of the Agent, the Steering Committee may not accept any proposal to remove an Included Market, unless Monsanto can reasonably demonstrate that the continued inclusion of such Included Market would have a significant adverse effect on Monsanto balanced against the benefits to the Roundup P&L. The parties agree that any disputes arising under this Section 2.5(d) will be resolved in the manner set forth in Section 10.4(g). + +15 + + + + + +(e) Subject to Section 2.5(d), if the Steering Committee accepts the proposal for modification, then the modifications to the Included Markets or Excluded Markets shall, without further action or amendment, be included within the definition of Included Markets or Excluded Markets, as the case may be, and subject to the terms and conditions of this Agreement unless the parties otherwise expressly agree in writing, and if such accepted proposal is to activate an Included Market, then such Included Market shall be added to Schedule 1.1(a). + +(f) Notwithstanding the foregoing, neither party shall have any obligation with respect to any Unactivated Included Market unless and until the Steering Committee approves commencement of distribution of Roundup Products in such market for purposes of this Agreement. + +Section 2.6 Scotts Miracle-Gro Sale Procedures. + +(a) Private or Public Sale Process. If, at any time or from time to time, Scotts Miracle-Gro initiates a public or private sale process involving the solicitation of two or more indications of interest in connection with a contemplated Scotts Miracle-Gro Sale, Scotts Miracle-Gro agrees to provide Monsanto timely notice of such process and to offer to include Monsanto in such process on the same basis as other participants therein. + +(b) Potential Sale to Ag Competitors. If Scotts Miracle-Gro (A) receives an unsolicited proposal with respect to a potential Scotts Miracle-Gro Sale with any Ag Competitor or (B) solicits or makes a formal determination to solicit or make any proposal with respect to a potential Scotts Miracle-Gro Sale or enters into an agreement relating to the provision of information with respect to a potential Scotts Miracle-Gro Sale with any Ag Competitor, Scotts Miracle-Gro agrees to provide Monsanto with timely notice of such proposal and to provide Monsanto with, in the case of (A) above, at least five (5) Business Days after the date of receipt of such notice to respond to such proposal or, in the case of (B) above, at least ten (10) Business Days after the date of receipt of such notice to respond to such proposal, prior to entering into a definitive agreement, letter of intent, memorandum of understanding or similar document with any such entity; and provided further, that during such five (5) or ten (10) Business Day period, Scotts Miracle-Gro and Monsanto shall conduct non-exclusive negotiations with respect to any potential Scotts Miracle-Gro Sale to Monsanto. + +Section 2.7 Compliance. + +(a) Anti-Corruption Compliance. Agent represents and warrants that it will take no action in relation to this Agreement that would be in violation of, or would subject Monsanto to any liability for, or penalty under, the applicable anti- corruption laws and regulations of any Included Market. + +(b) Compliance with Monsanto's Code of Conduct. Agent represents that it has received a copy of Monsanto's Supplier Code of Business Conduct (posted at http://www.monsanto.com/whoweare/pages/supplier-code-of-conduct.aspx), Anti- Corruption / FCPA Policy (http://www.monsanto.com/sitecollection documents/anti-corruption-policy.pdf) and the Monsanto Human Rights Policy (posted at http://www.monsanto.com /whoweare/pages/human-rights.aspx) and Agent warrants that its employees working in the Roundup L&G Business have + +16 + + + + + +read and will comply with the terms included in the Supplier Code of Business Conduct, Anti-Corruption/FCPA Policy and Human Rights Policy. + +(c) No Improper Payments. Agent represents that no payments of money or anything of value will be offered, promised or paid, directly or indirectly, to any Officials to influence the acts of such Officials (as defined below) to induce them to use their influence with a government or an instrumentality thereof, or to obtain an improper advantage in connection with any business venture or contract in which Monsanto is a participant. + +(d) Subcontractors and Agents. Agent agrees that it will alert any subsidiaries, sub-contractors, representatives, or agents that are retained in connection with this Agreement of their obligation to abide by any applicable anti-corruption laws. + +(e) Definition of "Official". For purposes of this Section 2.7, an "Official" shall include all employees of a government department or agency, whether in the executive, legislative or judicial branches of government and whether at the national, state/provincial or local level (or their equivalents). The term covers part-time workers, unpaid workers, any person "acting in an official capacity," and members of a royal family. Also included under the term "Official" are political parties, party officials, and candidates for political office. Moreover, Officials include employees of public international organizations (list posted at www.gpo.gov/fdsys) such as the United Nations ("U.N."), Food and Agriculture Organization of the U.N. ("FAO"), the International Cotton Institute, the International Monetary Fund, the International Wheat Advisory Committee, the Organization of Economic Cooperation and Development ("OECD"), the Organization of American States, the World Intellectual Property Organization, the World Trade Organization, the International Cotton Advisory Committee ("ICAC") and the International Food Policy Research Institute. Finally, the term "Official" covers officers and employees of public academic institutions and companies under government ownership or control, even if the companies or institutions (such as universities) are operated like privately owned entities. + +(f) Export Controls. The Agent acknowledges and agrees that the products, materials, software, technology and/or information provided under this Agreement are subject to the import, export control, and economic sanctions laws and regulations of the United States, potentially including but not limited to any requirements arising under the laws and regulations administered by U.S. Customs and Border Protection ("CBP"), the Export Administration Regulations ("EAR") administered by the U.S. Commerce Department's Bureau of Industry and Security ("BIS"), the International Traffic in Arms Regulations ("ITAR") administered by the U.S. State Department's Directorate of Defense Trade Controls ("DDTC"), and the various economic sanctions laws and regulations administered by the U.S. Treasury Department's Office of Foreign Assets Control ("OFAC"). The Agent agrees to comply with any applicable laws and/or regulations mentioned in the immediately-preceding sentence. The Agent shall not, without proper U.S. government authorization, export, reexport, or transfer products, materials, software, technology and/or information, either directly or indirectly, to any Restricted Party. For the purposes of this Agreement, "Restricted Party" means any country or any resident or national of any country subject to a comprehensive U.S. trade embargo or other sanction (including but not limited to Cuba, Iran, North Korea, Sudan, Syria, and the Crimea Region of the Ukraine), any person or entity designated + +17 + + + + + +on the list of "Specifically Designated Nationals and Blocked Persons," the "Entity List," or the "Denied Persons List." + +(g) In addition, products, materials, software, technology and/or information may not be exported, re-exported, or transferred to any end-user engaged in activities related to weapons of mass destruction. Such activities include but are not necessarily limited to activities related to: (1) the design, development, production, or use of nuclear materials, nuclear facilities, or nuclear weapons; (2) the design, development, production, or use of missiles or support of missiles projects; and (3) the design, development, production, or use of chemical or biological weapons. By accepting this Agreement, each Party certifies (1) they are eligible to receive the products, materials, software, technology and/or information provided by the other Party without first obtaining an export license from either BIS or OFAC, and (2) they are not a Restricted Party. The Parties shall not (1) participate in any economic boycott not sanctioned by the United States Government or (2) provide information that could be construed to support any such unsanctioned boycott. The Parties further agree that the assurances contained in this clause shall survive and remain in effect even after termination of this Agreement. + +ARTICLE 3 - ACCOUNTING AND CASH FLOW FOR THE ROUNDUP L&G BUSINESS + +Section 3.1 Bookkeeping and Financial Reporting. + +(a) Bookkeeping. The Agent shall, on behalf of Monsanto, be responsible for all the bookkeeping for the Roundup L&G Business, which shall include, but not be limited to, (i) setting up a separate set of accounting records reflecting all the items of income, profit, gain, loss and deduction with respect to the Roundup L&G Business, including a profit and loss statement ("Roundup P&L") and all other records relating to the Roundup L&G Business including sales invoices and customer data (the "Roundup Records") in accordance with the written set of accounting policies (including the currency exchange methodology used by Monsanto) as shall be provided by Monsanto; provided, that if any change in Monsanto's accounting policies would adversely affect the Agent's Commission (other than in a de minimis amount), the parties shall negotiate in good faith to change the thresholds and/or the Commission, as appropriate, to eliminate such adverse affect; (ii) collecting, recording and safeguarding receipts of all receivables and payables, costs or expenses either directly incurred by the Roundup L&G Business or Allocated thereto by either party pursuant to the terms of Section 3.3 hereof. At all times, the Agent shall make available via computer and/or original documentation, to the members of the Global Support Team continuous access to the Roundup Records as appropriate on a need-to-know basis, such access shall include, but not be limited to, daily sales updates and additional financial reporting with such detail as Monsanto may reasonably request from time to time. + +(b) Financial Reporting. The Agent shall provide Monsanto no later than the date that is the earlier of (i) four (4) business days after the last day of each of the Agent's fiscal months and (ii) the first business day of each calendar month (which corresponds to the first work day of Monsanto's closing period) a full, detailed report by country of the Roundup SKU's being sold during the past month, including but not limited to Monsanto SKU identifier, quantity sold, quantity of samples provided free of charge, total sales value by SKU (in local currency). The + +18 + + + + + +Agent shall provide to Monsanto monthly financial statements, including (i) the full Roundup P&L (from Gross Sales to EBIT), balance sheet and cash flow statements, (ii) the Netback expense detail (accruals and actuals), (iii) all other Expense detail (accruals and actuals), and (iv) Cost of Goods Sold detail. Such monthly financial statements shall be provided (i) in their preliminary form (due to the closing schedule, the parties acknowledge that these results may be preliminary or final and a subsequent true-up may occur in the following month) no later than the date that is the earlier of (i) four (4) business days after the last day of each of the Agent's fiscal months and (ii) the first business day of each calendar month (which corresponds to the first work day of Monsanto's closing period), and (ii) in their final form no later than ten (10) business days following the end of each calendar month. + +(c) Audit. Monsanto shall have the right to periodically audit or have an independent accountant audit, on Monsanto's behalf, all the Roundup Records. The audit shall be at the cost of Monsanto unless any material error has been committed by the Agent, in which case the Agent shall bear the cost of the audit. Upon exercise of its right of audit, and discovery of any disputed item, Monsanto shall provide written notice of dispute to the Agent. The parties shall resolve such dispute in the manner set forth in Section 3.4 hereof. + +Section 3.2 Ordering, Invoicing and Cash Flow Cycle. + +(a) Ordering and Invoicing. The Agent shall perform, on behalf of Monsanto, all order taking, order processing and invoicing for the Roundup Products, it being understood that orders filled for Roundup Products shall be invoiced on the invoices used by the Agent for its other non-Roundup Products provided such invoices or their EDI version shall (i) identify the Agent as an agent for Monsanto for the sale of all Roundup Products and Monsanto as the actual transferor of title to Roundup Products; (ii) direct payment of such invoice to be made directly to the account designated by the Agent; and (iii) include all taxes (other than Income Taxes), duties, and other charges imposed by governmental authorities based on the production or sale of Roundup Products or their ownership or transportation to the place and time of sale. Notwithstanding the foregoing, where the Agent utilizes a third-party distributor, in circumstances as the Agent and Monsanto may agree, Monsanto may perform order taking, order processing and/or invoicing for the Roundup Products as the Agent and Monsanto may mutually agree. + +(b) Customer Remittances. Customers of Roundup Products shall be directed, as per the invoices, to remit directly the invoiced amounts for all Roundup Products to the Agent's designated bank account. Notwithstanding the foregoing, with respect to customers that are invoiced by Monsanto in accordance with Section 3.2(a), such customers of Roundup Products shall be invoiced directly by Monsanto and shall remit payment directly to Monsanto the invoiced amounts for all Roundup Products to an account designated by Monsanto. + +(c) Cash Settlement. At the end of each week, the Agent shall verify the actual amount of the Customers' remittances for the Roundup Products received and Expenses paid over the past week and shall send to Monsanto a weekly reconciliation statement (the "Reconciliation Statement") setting forth such information in the form attached hereto as Schedule 3.2(c). Within three business days (or such other time period agreed to by the Agent and Monsanto) of the receipt by Monsanto of the Reconciliation Statement, Monsanto shall review and approve such + +19 + + + + + +Reconciliation Statement; provided, that (i) if Monsanto disputes the contents of the Reconciliation Statement, the Agent and Monsanto shall work in good faith to resolve any such disputes and (ii) any such dispute shall be reconciled and addressed by way of an adjustment to the cash settlement in the current month or a subsequent month, as mutually agreed to by the Agent and Monsanto. Upon the approval of the Reconciliation Statement (subject to any agreed to revisions), Monsanto or the Agent, as applicable, shall pay by wire transfer of immediately available funds the net amount due to the Agent or to Monsanto, as applicable. For the purpose of this Section 3.2(c), customer remittances shall be allocated by the Agent to Roundup Products in proportion to the amount payable by such customer to the Agent in relation Roundup Products to the total amount payable by such customer to the Agent. + +(d) Recognition. The parties acknowledge and agree that all sales by the Agent will be recognized for accounting purposes at the time when the product to be accounted for as sold has been shipped to the applicable account and its receipt confirmed. With respect to all buy/sell sales and all other direct account sales, whether by the Agent's sub-distributors or sub- agents, such sales will be recognized for accounting purposes at the time when the product to be accounted for as sold has been shipped to the applicable sub-distributor or sub-agent and its receipt confirmed. Any payments received by the Agent as Monsanto's agent for sales made in accordance with this Agreement will be remitted to Monsanto in accordance with the procedures set forth in this Agreement as modified by the course of performance of the parties. + +(e) Budget. The budget for the Roundup L&G Business shall include both buy/sell sales and direct account sales. + +Section 3.3 Expenses and Allocation Rules + +(a) Expenses. Each and every Expense, either as a direct expense or an allocated one, shall only be charged to the Roundup L&G Business and consequently taken into account in the Program EBIT statements set forth in Section 3.6(c) hereto if part of a category of Expenses specifically authorized by the terms of the Annual Business Plan and within the aggregate amount prescribed in the Annual Business Plan for such category of Expense ("Budget") ("Approved Expense"). Any Expense which shall exceed its prescribed Budget shall solely be the responsibility of the party incurring it unless such expense is required to implement an approved Significant Deviation from the Annual Business Plan or is necessary to support sales orders above budgeted sales pursuant to sales programs contemplated by the Annual Business Plan. Expenses shall be classified into (i) direct expenses of the Roundup L&G Business payable to vendors, or (ii) as Allocated Expenses agreed upon during the Annual Business Plan. Payment of any direct expenses incurred by either party on behalf of the Roundup L&G business shall be made as they become due in accordance with the applicable commercial terms agreed upon with each vendor. + +(b) Expense Verification. Each party shall have the right to verify whether any particular Expense is an Approved Expense by sending a written inquiry to that effect to the Agent's nominee. The party incurring an Expense shall endeavor to promptly provide upon request of the Agent's nominee the appropriate documentary evidence supporting such Expense. Upon failure by the said party to provide the appropriate documentary evidence, the inquiring party shall have the right to send a written notice of dispute to the other party and the parties shall resolve such dispute + +20 + + + + + +in the manner set forth in Section 3.4 hereof. Upon determination by such Independent Accountant (as defined below) that the Expense was not an Approved Expense, such Expense shall be deducted from the Program Expenses and the Agent and Monsanto shall include an appropriate adjustment in accordance with the procedures set forth in Section 3.2(c). Allocated Expenses shall be paid no more than three weeks after months' end in accordance with the procedures set forth in Section 3.2(c). + +(c) Allocation Rules. In the performance of their obligations under this Agreement, each party shall incur Allocated Expenses directly related to the Roundup L&G Business. Each allocated Approved Expense, regardless of the party incurring it, shall be reimbursed provided such expense shall be allocated in accordance with the Allocation Rules set forth for each category of cost and service per country or region, as the case may be, in Schedule 3.3(c) attached hereto ("Allocated Expense"). + +Section 3.4 Resolution of Disputes Arising under Article 3. Unless otherwise agreed by the parties, each party shall have the right, within twenty (20) days of receipt of the quarterly or annual financial statements to send a written notice of dispute to the other party. Upon receipt of such notices of dispute, the parties shall undertake the following steps: + +(a) First, for a period of fifteen (15) days, the parties shall negotiate in good faith for the purposes of attempting to mutually agree upon the item in dispute; + +(b) Second, if parties are unable to mutually agree upon the item in dispute, then within seven (7) business days following the expiration of such fifteen (15) day period, the parties shall agree in writing upon the selection of a nationally recognized independent accounting firm (the "Independent Accountant") to resolve the dispute. If the parties cannot agree upon such Independent Accountant within such time frame, then the Independent Accountant shall thereupon be selected by the American Arbitration Association (the "AAA"), with preference being given by the AAA in making such selection to any one of the "Big Four" accounting firms (except for any firm which performs accounting services for either party) willing to perform the services required hereunder. The Independent Accountant shall be instructed to act within thirty (30) days to resolve the dispute, and its decisions with respect to the dispute shall be final and binding upon the parties. The fees and expenses of the Independent Accountant with respect to the settlement of the dispute shall be borne equally by the parties. + +Section 3.5 Fixed Contribution to Expenses. + +(a) Amount and Purpose. Each Program Year the Agent shall make a fixed contribution to the overall Expenses of the Roundup L&G Business in an amount equal to eighteen million U.S. Dollars ($18,000,000) ("Contribution Payment"). Such Contribution Payment shall be payable by the Agent to Monsanto in twelve equal monthly installments which shall be due on the first day of each month and shall not be subject to any "set-off". + +Section 3.6 Commission. + +21 + + + + + +(a) Amount of Commission. In consideration to the Agent for performance of its duties and obligations hereunder, the Agent shall be entitled to a Commission ("Commission"). Such Commission shall represent a percentage of the Program EBIT realized by the Roundup L&G Business which percentage shall be (i) for Program Years 2017 and 2018, 50% of the Program EBIT and (ii) for Program Years 2019 and thereafter, 50% of the Program EBIT in excess of $40MM (such $40MM threshold, the "Commission Threshold"). The parties agree that the Commission Threshold may be amended from time to time by mutual agreement of the parties following the inclusion or exclusion of either new or existing countries in the Included Markets, including Activated Included Markets, or Excluded Markets, as applicable. + +(b) Payment of Commission. Within thirty (30) days following the end of each month, the Agent, on behalf of Monsanto shall determine whether a Commission becomes payable, i.e., whether the cumulative Program EBIT for the Program Year up to the preceding month equals an amount in excess of the First Commission Threshold. If so, the Agent, on behalf of Monsanto shall by check or wire transfer, to the Agent's designated account for the payment of the applicable Commission pursuant to the formula set forth in Section 3.6(a) subject to any adjustments pursuant to Section 3.6(c). + +(c) Final Determination. Within fifteen (15) days following the end of each Program Year, the Agent shall deliver to Monsanto a Commission Statement which shall contain the final determination of the Commission due at the expiry of the Program Year and shall set forth any eventual adjustments, to the amounts paid up to the Agent under Section 3.6(b) during the preceding Program Year. If within fifteen (15) days following the receipt of such Commission Statement by the Agent, Monsanto does not provide the Agent written notice of objection to the Commission Statement, the amount of the Commission for such Program Year shall be as provided thereon. If within such fifteen (15) days following receipt of such Commission Statement by Monsanto, Monsanto does provide the Agent written notice of objection to the Commission Statement, the parties shall resolve such dispute in the manner set forth in Section 3.4 hereof. + +Section 3.7 [Intentionally deleted] + +Section 3.8 Additional Commission. + +(a) The parties acknowledge that Monsanto currently sells Glyphosate-based products under the Roundup trademark, directly or indirectly, to professional, industrial and agricultural users ("Roundup Ag Products"). Monsanto acknowledges that one of such Roundup Ag Products, the 2.5 gallon SKU containing 41% concentration of Glyphosate with the Brand name Roundup Pro (the "Roundup Pro SKU"), is currently being sold through Lawn and Garden Channels in the United States and may be purchased by consumers in the Lawn and Garden Market. Monsanto also acknowledges its obligations pursuant to Section 6.13(b) hereof. + +(b) The Agent is exclusively distributing and managing the sale of the Roundup Pro SKU in Lawn and Garden Channels in the United States. The parties acknowledge that the Agent purchases the Roundup Pro SKU from Monsanto (or a successor entity which holds the rights to manufacture, sell or commercialize the Roundup Pro SKU) for the Agent's own account in its capacity as a distributor and not as a marketing agent, and the sales resulting from such Roundup + +22 + + + + + +Pro SKU shall not be included in the Program Sales Revenues hereunder. In the event that the Agent is terminated as an exclusive distributor of the Roundup Pro SKU by Monsanto (or by a successor entity which holds the rights to manufacture, sell or commercialize the Roundup Pro SKU), any subsequent sales of the Roundup Pro SKU by parties other than Agent in the Lawn and Garden Channels in the United States will be subject to the provisions of Section 3.8(c) below. + +(c) Except to the extent provided in Section 3.8(b) above, on and after the Effective Date, Monsanto shall use its reasonable efforts to ensure that Roundup Ag Products are not sold, directly or indirectly, through Lawn and Garden Channels to consumers in the Lawn and Garden Market in the Included Markets. In the event that in the normal course of business the Agent determines based on satisfactory evidence that a material amount of additional Roundup Ag Products, above Program Year 2016 sales levels (such amount, the "Historical Threshold"), are being sold directly by Monsanto (or directly by any successor entity which holds the rights to manufacture, sell or commercialize the Roundup Pro SKU) through Lawn and Garden Channels in the Included Markets, the parties shall negotiate in good faith to include, subject to the principles set forth in Section 3.8(d), an appropriate percentage of such incremental sales that exceed the Historical Threshold to reflect such Lawn and Garden Use within the definition of Program Sales Revenues so that the Agent receives credit therefor for purposes of calculating the Agent's Commission, or such other compensation as required to fully compensate the Agent for lost Commission as a result of such sales of Roundup Ag Products above the Historical Threshold as the Parties may agree (collectively, the "Additional Amount"). + +(d) In implementing the foregoing, the parties shall follow the following principles: (i) that Monsanto's sales of Roundup Ag Products are not intended for Lawn and Garden Use and that Monsanto shall not sell Roundup Ag Products directly or promote the indirect sale thereof, through Lawn and Garden Channels to consumers for Lawn and Garden Use in the Included Markets and (ii) that there shall be no transfer of historical or future sales of Roundup Ag Products in the Ag Market into Program Sales Revenues. Furthermore, the parties acknowledge that Roundup Ag Products having a formulation consisting of 41% or more Glyphosate and in container sizes over 2.5 gallons in the United States or over one liter in the other Included Markets shall be presumed to have no Lawn and Garden Use and therefor that sales of such Roundup Ag Products shall not be deemed to compete with Roundup Products in a manner that would justify adjustment of the calculation of Program Sales Revenues; provided that if the Agent is able to demonstrate to the Steering Committee that a material change in the amount of such Roundup Ag Products above the Historical Threshold are being sold through Lawn and Garden Channels to consumers for Lawn and Garden Use in the Included Markets, the parties shall negotiate in good faith pursuant to Section 3.8(c) to adjust the calculation of Program Sales Revenues. Notwithstanding the foregoing, to the extent that the Agent, any of its Affiliates and/or Seamless Control LLC ("Seamless Control"), but only if Seamless Control is then controlled by Agent or an Affiliate of Agent, sells, directly or indirectly, Roundup Ag Products through Lawn and Garden Channels to consumers in the Lawn and Garden Market in the Included Markets above the Historical Threshold, sales of such Roundup Ag Products shall (i) to the extent in excess of the Historical Threshold, be added to the Historical Threshold and (ii) not be considered by Monsanto or the Agent when determining the Additional Amount. + +23 + + + + + +(e) During the 2014 Program Year and for each Program Year thereafter, in consideration for the Agent's marketing, distribution and sales of Roundup 365, for the 2014 Program Year, and for each Program Year thereafter, if 365 Gross Profits exceed USD $10MM in a Program Year, the Agent shall be paid an amount equal to 7% of the 365 Gross Profits for such Program Year (including, for the avoidance of doubt, the first USD $10MM of the 365 Gross Profits). The amount that becomes payable under this Section 3.8(e) with respect to a Program Year shall be included as a separate line item in the Commission Statements delivered by Agent to Monsanto and the payment of such amount shall be in addition to the Commission otherwise payable under Section 3.6(b) and shall be subject to all other terms and conditions of this Agreement except as otherwise expressly stated in this Section 3.8(e). + +ARTICLE 4 - ROUNDUP L&G BUSINESS MANAGEMENT STRUCTURE + +Section 4.1 Underlying principles for the Roundup L&G Business Management Structure. + +(a) The Roundup L&G Business management structure, as described in this Article, has been created for the purposes of fostering and promoting the following interests of the parties: + +(i) Common Interests: + +(A) achieve the maximum volume and profit levels for the Roundup Business; + +(B) continue to strengthen the Roundup brand; and + +(C) leverage the strengths of both parties while working together in a constructive and harmonious way. + +(ii) Monsanto's Interests: + +(A) retain ability to resume full management of the Roundup Business upon termination of this Agreement; + +(B) retain control over key business decisions; and + +(C) provide global stewardship of the Roundup brand. + +(iii) The Agent's Interests: + +(A) manage the Roundup Business within the parameters of approved Annual Business Plans. + +(b) The parties understand that such structure may be amended from time to time by mutual agreement of the parties provided any such change shall take into account the respective interests of each party as described hereunder. + +24 + + + + + +Section 4.2 Steering Committee. + +(a) Appointment. Monsanto and the Agent shall each appoint by April 1 of each year two (2) executives to a steering committee ("Steering Committee") provided, however, any vacancy shall be filled in such a manner that the parties shall maintain their respective proportionate representation on the Steering Committee and that upon failure by either party to appoint said two (2) executives by such time, the two (2) executives previously appointed by such party shall be deemed appointed for another Program Year. Notwithstanding the foregoing, the members of the Steering Committee for the Program Year 2017 shall be the individuals whose names are set forth as Schedule 4.2(a) attached hereto. Either party may also invite a reasonable number of additional members from their respective organizations to attend meetings of the Steering Committee as they deem appropriate; provided, that, except to the extent provided under this Agreement, such additional members in attendance shall not have any voting rights. + +(b) Meetings, Quorum and Voting Requirements. + +(1) Meetings. The Steering Committee shall meet at least once a year for purposes of approving the Annual Business Plan no later than September 15 of every calendar year. Any member of the Steering Committee shall have the right to call a special meeting of the Steering Committee provided a prior written notice of at least fifteen (15) days shall be given to each member together with an agenda for such meeting. + +(2) Quorum and Voting Requirements. The quorum for any meeting of the Steering Committee shall require the participation of all four (4) members except that any member shall be deemed present when participating via phone or video conference. Any decisions by the Steering Committee may be taken by the affirmative vote of a majority of three of the members of the Steering Committee. In the event of a deadlock, when a particular vote is divided equally between the four members, the matter shall be submitted to Monsanto's senior executive responsible for the oversight of the Roundup L&G Business (as determined by Monsanto) (the "Monsanto Senior Executive"), who shall have the exclusive discretion to resolve the matter and such decision shall bind the Steering Committee to such action or inaction. Notwithstanding any future assignment of this Agreement to a third party by reason of a Roundup Sale, the Monsanto Senior Executive shall retain its right of veto in case of deadlock of the Steering Committee. + +For every meeting of the Steering Committee, minutes shall be kept and circulated for approval to all four members. Every decision of the Monsanto Senior Executive shall also be recorded in writing and distributed to the members of the Steering Committee. + +(c) Authority. The Steering Committee shall: + +(i) approve all Annual Business Plans, and any Significant Deviations (as described in Section 4.3(b)) therefrom not previously approved jointly by the Business Units and the Global Support Team; + +(ii) approve any and all strategic plans; + +25 + + + + + +(iii) review monthly reports submitted by the Business Units for the purposes of monitoring achievement and redirecting the Business Units by issuing a formal amendment to the Annual Business Plan then in effect; + +(iv) monitor and redirect, if need be, the performance of the Global Support Team; + +(v) approve any decisions relating to key personnel assigned to the Roundup Business within the Business Units, including Monsanto's and the Agent's employees; + +(vi) resolve any disagreement occurring between a Business Unit and the Global Support Team; and + +(vii) decide any other matter mutually agreed upon by Monsanto and the Agent. + +Section 4.3 Business Units. + +(a) Role and Reporting. The Roundup L&G Business shall be managed, on behalf of the Agent, by its respective pesticide business units for each of the Included Markets ("Business Units") provided that, for the management of the Roundup L&G Business, the head of each of the Business Units shall report directly to the Steering Committee. + +(b) Duties. The Business Units shall be responsible for: + +(i) taking any and all necessary actions to implement the approved Annual Business Plan and strategic plans, as may be amended from time to time, either by mutual agreement of the Business Unit and the Global Support Team or by the Steering Committee as described in Section 4.2(c); + +(ii) managing the day-to-day Roundup L&G Business; + +(iii) developing and submitting, in cooperation with the Global Support Team all strategic and Annual Business Plans; + +(iv) communicating, in writing or via meetings, on a regular basis, with the Global Support Team on all significant issues affecting the Roundup L&G Business; and + +(v) notifying the Global Support Team of any deviation to the Annual Business Plan, which, in their view, is reasonably likely to have a financial impact on the Program EBIT of at least $500,000 or constitutes a significant deviation from a non-financial item approved in the Annual Business Plan ("Significant Deviation"). + +Section 4.4 Global Support Team. + +(a) Appointment. Monsanto shall maintain a team of up to 10 employees, or such number as the Agent and Monsanto may agree to from time to time, to support the Roundup + +26 + + + + + +L&G Business on a full-time basis as well as other employees who will support the Roundup L&G Business on a part-time basis (the "Global Support Team"). Monsanto may from time to time substitute any individual serving on the Global Support Team, with the written approval of the Agent, by providing a prior written notice to the Agent to such effect. + +(b) Duties. The Global Support Team shall be responsible to: + +(i) participate actively in the development of all strategic and Annual Business Plans; + +(ii) act as a liaison between any of Monsanto's functions or departments providing a support service to the Roundup Business (such as R&D, regulatory, etc.) and monitor the quality of services rendered; + +(iii) provide stewardship for the Roundup brand image worldwide; + +(iv) prepare internal assessments of the performance of the Roundup L&G Business for Monsanto management; + +(v) participate in planned key customer interactions and program presentations, either by participation in meetings or in preparatory sessions therefor; + +(vi) review and approve any material change or deviation in consumer communication, mass media, packaging design or any other marketing tactic that directly impacts the consumer perception and interface with the brand which may occur from time to time; and + +(vii) review and approve any Significant Deviation from the Annual Business Plan; and upon failure to agree with the Business Unit, prepare a recommendation to submit to the Steering Committee for resolution, provided that the Business Unit may similarly prepare a recommendation to submit to the Steering Committee. + +ARTICLE 5 - DUTIES AND OBLIGATIONS OF MONSANTO + +Section 5.1 Monsanto's Obligations and Rights. Subject to Article 3, unless and until expressly directed otherwise by the Business Units, with the prior written approval of the Steering Committee Monsanto shall continue to support the Roundup L&G Business by performing necessary services. Notwithstanding the foregoing, at all times during the term of this Agreement, Monsanto shall be solely responsible for the following functions: + +(a) Research and Development. Monsanto shall (i) in its sole discretion, continue to develop new Glyphosate- based non-selective herbicide formulations and (ii) exercise commercially reasonable efforts and cooperate in good faith with the Agent to develop other non-selective herbicide formulations, in each case, as more particularly as described in Section 6.10 hereof; + +27 + + + + + +(b) Regulatory Compliance. Monsanto shall be responsible for ensuring that all Roundup Products and the labels for such products comply with the USEPA and applicable Laws of each state and country within the applicable Activated Included Markets, including obtaining and maintaining all applicable governmental registrations, registration applications, temporary registrations, all data pertaining to such registrations as submitted to governmental agencies, experimental use permits, applications and emergency use exemptions, all with respect to the Roundup Products; and + +(c) Medical Response. Monsanto shall be responsible for maintaining a customer response center relating to Roundup Products, which will solely manage the medical response calls (including human and animal health-related calls) and related FIFRA 6(a)(2) issues (the "Monsanto CRC"). Monsanto shall be responsible for all reports related thereto, including (without limitation) reports to any regulatory or government authority pursuant to any applicable Law. + +(d) Sales Promotion. Monsanto shall, in accordance with the Annual Business Plan, promote the sales and consumer acceptance of Roundup Products by: + +(i) providing suitable training to the Agent's representatives or employees in the areas of product knowledge and product stewardship; and + +(ii) providing the Agent and Customers with technical and product information, manuals, promotional bulletins, presentation kits and other sales aid materials. + +Section 5.2 Warranties. For Roundup Products with which Monsanto offers a "written warranty," whether within the meaning of the Magnuson-Moss Warranty--Federal Trade Commission Improvement Act, 15 United States Code Annotated, Section 2301, or otherwise, Monsanto shall honor those warranties in accordance with such terms. + +ARTICLE 6 - REPORTS AND ADDITIONAL OBLIGATIONS OF THE PARTIES + +Section 6.1 Cooperation. The Agent and Monsanto shall cooperate with each other so as to facilitate the objectives set forth in this Agreement and shall act in good faith and in a commercially reasonable manner in performing their respective duties hereunder. + +Section 6.2 Use of EDI. Monsanto, the Agent, the Steering Committee, and the Global Support Team will exchange a broad range of operating data on a periodic basis. The method of exchange will be approved by the Steering Committee and will include file transfer, e-mail and EDI protocol. + +Section 6.3 The Agent's Systems and Reporting Obligation. The Agent shall establish and maintain all such systems and procedures (financial, logistical, or otherwise) as reasonably requested by Monsanto or the Steering Committee in connection with the Agent's performance under this Agreement. For all reports, the data will include current period and current YTD, forecasts and budgets; and comparisons with same period and YTD and forecasts and budgets for the year previous. Specifically, the Agent shall provide the following reports: + +28 + + + + + +(a) Weekly Reports. On the second business day of each week, the Agent shall provide to the Global Support Team update reports for the prior week, showing: (i) dollar and case shipments by the top 25 Customers and by SKU (stock keeping unit), (ii) inventory levels by SKU for North America, (iii) collection activities by the top 25 Customers, (iv) agency fill rate for the top 10 Customers (Roundup Products ordered by Customers and shipped by the Agent by line item, unit and dollar amount), and (v) POS sell-through by SKU by the top 7 Customers that provide such information. + +(b) Monthly Reports. On the sixth business day of each Month, the Agent shall provide to the Steering Committee and Monsanto (i) the type of data contained in the weekly reports (as set forth in Section 6.3(a)) for the prior calendar month and the current year-to-date, (ii) full P&L, balance sheets and cash flow statements, (iii) Netback expense detail (accruals and actuals), (iv) Expense detail (accruals and actuals), (v) Cost of Goods Sold detail, in each case comparing such information against budget, and against the previous year. + +(c) Quarterly Reports. The Agent shall provide to the Steering Committee and Monsanto, on a Quarterly basis and on a form provided by the Steering Committee (i) a summary of purchases of Roundup Products, in total cases or units, made by each Customer which is designated by the Steering Committee, (ii) inventory level by SKU by Customer and (iii) updated full year forecast. + +(d) Annual Reports. The Agent shall provide to the Steering Committee and Monsanto, on an Annual basis and on a form provided by the Steering Committee (i) bridge and tracking capability from Program Year to calendar year, (ii) a budget and (iii) a long range plan. + +(e) Other Reports. In addition, the Agent shall provide Monsanto or the Steering Committee with such other reports as may be reasonably requested within a period not to exceed thirty (30) days from such request. + +Section 6.4 Employee Incentives. Recognizing that, as Monsanto's exclusive agent for sale and distribution of Roundup Products, the Agent is to promote the sale of Roundup Products in the manner described in Section 2.2(a)(7), the Agent shall cause its appropriate officers and other management to devote an appropriate portion of their personal efforts to the sale and distribution of Roundup Products covered by this Agreement. Further, the Agent shall ensure that the appropriate personnel are compensated in a manner reasonably intended to encourage them to promote the sale of Roundup Products in a commercially reasonable manner generally consistent with other products or product lines, of similar volume or having similar margins (as compared to the overall Roundup P&L margins), of the Agent. + +Section 6.5 Insurance. The Agent, shall, during the term of this Agreement, maintain full insurance against the risk of loss or damages to the Roundup Products for any Agents' warehouse where Roundup Products are under the custody of the Agent and, upon request, shall furnish Monsanto with satisfactory evidence of the maintenance of said insurance. Further, each party shall make all contributions and pay all payroll taxes required under federal social security laws and state unemployment compensation laws or other payments under any laws of a similar character as to its own personnel involved in the Roundup L&G Business (including any purported "independent + +29 + + + + + +contractors" subsequently classified by any authority under any Law, as an employee) in connection with the performance of this Agreement. + +Section 6.6 Liens. Subject to the provisions of any existing intercreditor agreement to which Monsanto is currently a party (as the same may be amended, modified or terminated) and except as may otherwise be agreed to by Monsanto, which agreement shall not be unreasonably withheld in the case of similar arrangements with existing or future institutional lenders, the Agent agrees not to allow any liens or encumbrances of any nature to attach to Roundup Products. At Monsanto's request, the Agent, sub-agent, or sub-distributor shall execute such financing statements, security agreements and other documents as Monsanto may reasonably request to create, perfect, and continue in effect its security interests hereunder. + +Section 6.7 Promoting Safe Use-Practices. Roundup Products may be or become hazardous unless used in strict accordance with Monsanto's product labels. The Agent shall use commercially reasonable methods to inform and familiarize its employees, agents, Customers, contractors (including warehousemen and transporters) and others who may handle or use Roundup Products of the potential hazards pertaining thereto (including accidental breakage or fire), and shall stress the safe use and application of Roundup Products in strict accordance with Monsanto's product labels. In addition, the Agent shall provide HM126F training to its personnel as required by the United States Department of Transportation (and such other training as may be required by other countries within the Included Markets). The Agent shall have the responsibility to dispose of waste materials in accordance with all applicable Laws. + +Section 6.8 Monsanto Inspection Rights. From time to time, as Monsanto or the Steering Committee may request, the Agent shall permit, upon reasonable request and during normal business hours, representatives of Monsanto or the Steering Committee to inspect, with regard to Roundup Products, the Agent's inventories, warehousing, and shipping procedures. + +Section 6.9 Recalls. The Agent shall cooperate with Monsanto, and promptly take such actions as requested by Monsanto, with respect to any defective product including any "stop-sales" or recalls for Roundup Products. + +Section 6.10 New Roundup Products. + +(a) During the term of this Agreement, Monsanto covenants and agrees to first offer (the "Product Offer") to the Agent, with respect to the Included Markets, the exclusive agency and distribution rights to any newly created non-selective herbicide product, which is not marketed for Lawn and Garden Use as of the date of this Agreement, and which Monsanto, in its exclusive, reasonable discretion, determines to be suitable for sale as a new product for Lawn and Garden Use (the "New Product"); provided, however, that for the Lawn and Garden Market, that any new product containing Glyphosate or another non- selective herbicide shall be considered to be a New Product. The Product Offer shall be in writing, shall be in sufficient detail describing such New Product, and shall be made within sixty (60) days of the date of commercialization of such New Product for uses other than Lawn and Garden Use. In no event shall Monsanto, directly or indirectly, commercialize any New Product for Lawn and Garden Use in the Included Markets without first offering such New Product to the Agent pursuant to the terms of this Section 6.10. If the Agent agrees in writing + +30 + + + + + +within ninety (90) days of receipt of the Product Offer to accept the New Product, then such New Product shall be, without further action or amendment, included within the definition of Roundup Products and be subject to the terms and conditions of this Agreement. In such event, the parties shall adjust the Commission Thresholds to reflect this additional source of revenue unless the New Product is a Glyphosate-based product or an improvement of any existing Roundup Products in which case the Commission Thresholds shall remain the same. If the Agent fails to agree in writing to accept the Product Offer within such ninety (90) days of receipt, then Monsanto shall have the exclusive right to manufacture, package, promote, distribute, and sell such New Product in the Included Markets, regardless of any actual or potential conflict with the terms of Agreement. + +(b) During the term of this Agreement, the Agent may, from time to time, propose that Monsanto utilize a different formulation of non-selective herbicide product for Lawn and Garden Use in the Included Markets that may or may not contain Glyphosate (an "Agent Proposed Product") and offer the Agent the exclusive agency and distribution rights to such Agent Proposed Product under this Agreement. Any Agent Proposed Product proposal shall contain supporting detail describing the Agent Proposed Product. The Agent shall supply Monsanto with any information Monsanto reasonably requests as part of its evaluation. Monsanto shall not unreasonably delay its evaluation of an Agent Proposed Product following receipt of any such information. Monsanto shall give good faith consideration to all Agent Proposed Products, and provided that Monsanto shall have the sole discretion in branding any Agent Proposed Product, Monsanto shall not unreasonably refuse to submit to the Agent a Product Offer for an Agent Proposed Product under Section 6.10(a) that is, in Monsanto's reasonable discretion, commercially attractive, taking into account all relevant legal, financial, regulatory and other material aspects, including, without limitation, any possible effect of such Agent Proposed Product on Monsanto's overall business and business prospects. + +(c) The Agent hereby grants Monsanto an exclusive (even with respect to the Agent and its Affiliates), non- transferrable, royalty-free license and right to use the trademarks EcoSense and Path Clear (Trademark Application No. 1430287) in Canada (such trademarks, the "Canada Marks"), only in connection with Natural Products (as defined below) in the natural non-selective weedkiller category for Lawn & Garden Use during the term of this Agreement. Monsanto agrees to use the Canada Marks in a manner consistent with the form and style of such trademarks as used by the Agent, or as otherwise agreed in writing with the Agent. For the avoidance of doubt, the Agent currently uses and/or may in the future use the Canada Marks on products in categories other than non-selective weedkillers for Lawn & Garden Use, and the license granted to Monsanto herein shall not affect or restrict the Agent's rights in such other categories. Such license shall terminate automatically upon any expiration or termination of the term of this Agreement applicable to Canada. Notwithstanding the foregoing, nothing herein shall be interpreted as granting Monsanto a license to the Canada Marks outside of Canada or outside the category specified in this Section 6.10(c). The Agent represents and warrants that it is a licensee with the right to sublicense the Canada Marks, and that Monsanto's use of the Canada Marks, as described herein, shall not infringe upon the rights of any third party. The Agent agrees to hold harmless, indemnify, and defend Monsanto from any and all claims, demands, damages, losses, liabilities, costs and expenses (including reasonable attorneys' fees) arising from a breach of this warranty by the Agent. The Agent agrees to carry out at its expense, all procedures necessary to register and maintain the Canada + +31 + + + + + +Marks in full force and effect and Monsanto agrees to cooperate with the Agent in providing any product sample or other required information to assist in the maintenance and renewal of the Canada Marks. Monsanto acknowledges OMS Investments, Inc.'s exclusive ownership of all right, title and interest in and to the Canada Marks and agrees that Monsanto's use of the Canada Marks shall inure to the benefit of OMS Investments, Inc. Monsanto further agrees that it will in no way dispute, impugn or attack the validity of said Canada Marks or OMS Investments, Inc.'s or the Agent's rights thereto. + +(d) The Agent hereby grants to Monsanto exclusive access to the registrations for an acetic acid/citric acid nonselective weedkiller formulation in Canada. The parties will agree on the mutually acceptable details and mechanics of access and appropriate registration/labeling rights, the cost of which will be included in the Roundup P&L. Access to the then-current registrations shall continue in perpetuity, on a nonexclusive basis, following any future termination or expiration of this Agreement, enabling Monsanto or its successors to market and sell such formulations following such termination under trademarks that are different from the trademarks licensed to Monsanto pursuant to Section 6.10(c). + +(e) Together, the respective trademark licenses and registration access provided pursuant to this Section 6.10 result in the following product: an acetic acid/citric acid nonselective weedkiller formulation under the EcoSense brand in Canada and an acetic acid nonselective weed killer formulation under the Path Clear brand in Canada (collectively, the "Natural Products"). Any Natural Product marketed and/or sold under a different brand name in Canada shall be deemed to be a Natural Product and subject to the terms of this Agreement. The Natural Products will be included in the Roundup P&L and shall be subject to the same terms, rights and obligations set forth in this Agreement as are the Roundup Products, except as modified by this Section 6.10. In the event that the Agent develops, or obtains access to, any improvements to the existing Natural Products formulations in Canada during the respective term of this Agreement, the Agent will grant Monsanto access to such improvements and the improved products will be included in the Roundup P&L on the same terms as agreed for the current formulations of the Natural Products. In the event that the Agent develops, or obtains access to, any new natural nonselective weedkiller products (including, without limitation, any herbicidally active substances which are plant extracts, including those derived from oleic acid or which are derived from plant extracts by processing including active substances) in Canada during the respective term of this Agreement, the Agent will grant Monsanto a right of first refusal to include such new products in the Roundup P&L on the same terms as agreed for the current Natural Products, and if accepted, such new products will become Natural Products. In the event that the Agent offers in writing a product to Monsanto pursuant to the terms of this Section 6.10(e) and Monsanto does not accept such product in writing within 90 days of the Agent's offer, the Agent may market such product at its own discretion utilizing an alternative trademark from those licensed to Monsanto pursuant to Section 6.10(c) (which alternative trademark is not identical or materially similar to the Canada Trademarks. + +(f) The marketing, sale and distribution of each of the Natural Products in Canada shall be governed in all respects by the terms and conditions of this Agreement, including without limitation, the calculation of the Commission pursuant to Section 3.6 hereof. Following the inclusion of the Natural Products in the Roundup L&G Business in Canada, and fully consistent + +32 + + + + + +with the performance standards and requirements of Section 2.2(b) of this Agreement, the performance of the Roundup L&G Business will be evaluated based on the total results of the business, including from current Roundup Products, the added Natural Products, and any future products added to the Roundup L&G Business. Subject to the provisions of the applicable Annual Business Plan, the Agent shall continue to promote Roundup Products in the manner described in Section 2.2(a)(7). The parties will ensure that marketing, promotional and selling plans promote the sale of the Natural Products in a manner that is consistent with this Agreement and complementary to Roundup Products, and does not directly or indirectly disparage or advertise against Roundup Products, as set forth in this Agreement. Furthermore, in addition to marketing and selling the Natural Products in such a manner to existing Customers, the Agent will use its best efforts to target retailers and customers who do not currently purchase Roundup Products. Without limiting the foregoing, the Agent hereby agrees that matters relating to the Naturals Products shall be included in the Annual Business Plan. + +(g) Notwithstanding anything in this Agreement to the contrary, the letter agreement dated February 26, 2010 between the Agent and Monsanto shall survive in full force and effect in its entirety. + +(h) No provision of this Section 6.10 should be understood, explicitly or implicitly, as an amendment of the noncompetition provisions of this Agreement, or a relinquishment by either party of their rights or waiver of their obligations except as expressly set forth in this Section 6.10. + +Section 6.11 Additional Roundup Products. + +(a) Each product listed in Schedule 6.11(a) (an "Additional Roundup Product") shall be included in the definition of "Roundup Products" for the purposes of this Agreement; provided, that, such Additional Roundup Products shall only be considered "Roundup Products" with respect to those countries set forth in the column titled "Included Markets" opposite such Additional Roundup Product in Schedule 6.11(a). + +(b) For purposes hereof, "Additional Roundup Products Formulation Data" shall mean the formula for the Additional Roundup Products, the raw material specifications, analytical methods, and other information as provided in the Quality Assurance Manual (as defined in the Formulation Agreement), the instructions and know how associated with formulating the Additional Roundup Products and any and all data related to the Additional Roundup Products required to make, sell, offer for sale, register with federal, state, or territorial government authorities (as may be required by law), and support and defend marketing claims for, the Additional Roundup Products in the United States and its territories. Such data may include, but is not limited to, validations of field efficacy, stability testing data, and toxicology studies. The Agent shall make all Additional Roundup Products Formulation Data available to Monsanto. For the avoidance of doubt, Additional Roundup Products Formulation Data shall not include any data which originated with Monsanto. + +(c) The Agent hereby grants to Monsanto, during the term of this Agreement, a non-exclusive, royalty-free, non- transferable and non-assignable license (without the right to + +33 + + + + + +sublicense, except as specifically set forth in Section 6.11(h)) to use the Additional Roundup Products Formulation Data for the purpose of and to the limited extent necessary to register each of the Additional Roundup Products with federal, state, or territorial government authorities (as may be required by law) in the United States and its territories. To the Agent's knowledge, the Additional Roundup Products Formulation Data does not infringe or otherwise conflict with any trademarks, registrations, or other intellectual property or proprietary rights of any third party and none of the Additional Roundup Products Formulation Data is being infringed upon by a third party. + +(d) Upon the termination of this Agreement, the license granted in Section 6.11(c) above shall convert to a perpetual, non-exclusive, royalty-free, non-transferable and non-assignable license (without the right to sublicense, except as specifically set forth in Section 6.11(h) below) to use the Additional Roundup Products Formulation Data to make, sell and offer for sale, in the Included Markets for each such Additional Roundup Product, products comparable to such Additional Roundup Products, and to the limited extent necessary, to register such products with federal, state or territorial government authorities (as may be required by law) in the United States and its territories. + +(e) Notwithstanding anything in this Agreement to the contrary, the Agent at all times shall own and retain all rights, title and interest in and to the Additional Roundup Products Formulation Data. + +(f) The Agent hereby represents and warrants that it is a licensee, with the right to sublicense, the trademarks used in connection with the Additional Roundup Products as set forth on Schedule 6.11(f) in the column titled "Additional Roundup Products Trademarks" set forth opposite each Additional Roundup Product in Schedule 6.11(f) (the "Additional Roundup Products Trademarks") and that it has the right to sublicense each of the Additional Roundup Products Trademarks for the term of the Additional Roundup Trademarks Licenses and for the purposes set forth therein without reservation. To the Agent's knowledge, Monsanto's use of the Additional Roundup Products Trademarks in accordance with the terms and conditions of the Additional Roundup Trademarks Licenses shall not, and the Additional Roundup Products Trademarks do not, infringe any trademarks, registrations, or other intellectual property or proprietary rights of any third party and none of the Additional Roundup Products Trademarks are currently being infringed upon by a third party. The Agent agrees to hold harmless, indemnify, and defend Monsanto from any and all claims, demands, damages, losses, liabilities, costs and expenses (including reasonable attorneys' fees) arising from (i) a breach of this warranty by the Agent and (ii) a claim of infringement of the Additional Roundup Products Trademarks as used by Monsanto pursuant to the Additional Roundup Trademarks Licenses, provided that such use is in accordance with the terms and conditions of the Additional Roundup Trademarks Licenses. + +(g) Agent hereby grants to Monsanto, during the term of this Agreement, a non-exclusive, royalty-free, non- transferable and non-assignable license (without the right to sublicense, except as specifically set forth in Section 6.11(h)) to use the Additional Roundup Products Trademarks for the purpose of and to the limited extent necessary to register the Additional Roundup Products with federal, state, or territorial government authorities (as may be required by law) in the United States and its territories (the "Additional Roundup Products Trademarks + +34 + + + + + +License"). Upon the expiration or termination of this Agreement, Monsanto shall have no right to use the Additional Roundup Products Trademarks. Upon such expiration or termination, the Agent will purchase any remaining inventory of the Additional Roundup Products, including any components thereof, at cost. + +(h) Notwithstanding the foregoing, Monsanto, or a subsequent successor, may assign the license for the Additional Roundup Products Formulation Data upon a Change of Control with respect to Monsanto or a Roundup Sale. In addition, notwithstanding the foregoing, Monsanto, or a subsequent successor, may assign the licenses for the Additional Roundup Products Trademarks upon a Change of Control with respect to Monsanto or a Roundup Sale, provided that Monsanto has provided the Agent with prior written notice of, and has obtained the Agent's prior written consent to, such assignment, which consent shall not be unreasonably withheld. + +(i) The Agent agrees to carry out at its expense, or to ensure the completion of at its expense, all procedures necessary to register and maintain the Additional Roundup Products Trademarks in full force and effect, and Monsanto agrees to cooperate with the Agent in providing any required information to assist in the maintenance and renewal of the Additional Roundup Products Trademarks. + +(j) Monsanto will use the Additional Roundup Products Trademarks in a manner consistent with the form and style of other products sold by the Agent under the Additional Roundup Products Trademarks, or as otherwise agreed to in writing between the parties. + +(k) Monsanto acknowledges each of the Additional Roundup Products Trademarks owners' exclusive ownership of all right, title and interest in and to the Additional Roundup Products Trademarks and agrees that Monsanto's use of the Additional Roundup Products Trademarks shall inure to the benefit of each such owner. Monsanto further agrees that it will in no way dispute, impugn or attack the validity of the Additional Roundup Products Trademarks or the respective owner's rights thereto. + +(l) Monsanto further acknowledges that the designs, graphics, packaging designs and other intellectual property, including trade dress and copyright, in the labels and packaging for the Additional Roundup Products or in association with the Additional Roundup Products Trademarks (the "Additional Roundup Products Trade Dress") are the exclusive property of the respective trade dress owners and that Monsanto has no right, title or interest in or to the Additional Roundup Products Trade Dress. + +(m) To the extent feasible, the Agent shall notify Monsanto in advance of any meetings with regulatory authorities relating to regulatory, scientific or safety issues concerning the Additional Roundup Products and shall provide Monsanto with the opportunity to participate in such meetings. To the extent such advance notice is not feasible, the Agent shall provide Monsanto with notice of any such meeting within a reasonable period following the conclusion of the meeting. + +(n) To the extent feasible, Monsanto shall notify the Agent in advance of any meetings with regulatory authorities relating to regulatory, scientific or safety issues concerning the Additional Roundup Products and shall provide the Agent with the opportunity to participate + +35 + + + + + +in such meetings. To the extent such advance notice is not feasible, Monsanto shall provide the Agent with notice of any such meeting within a reasonable period following the conclusion of the meeting. The parties agree that the provisions of this Section 6.11(n) will not apply to routine day-to-day regulatory activities. + +(o) The Agent shall not modify the formula of the Additional Roundup Products in any manner without Monsanto's written consent, which will not be unreasonably withheld. + +Section 6.12 Confidentiality. Except as necessary for its performance under this Agreement, except as may be required by the federal securities laws or other applicable laws and except to the extent required under certain existing agreements to which Monsanto is a party (i.e., AHP Merger Agreement), neither party shall at any time or in any manner, either directly or indirectly, and neither party shall permit its employees to use, divulge, disclose or communicate to any person or entity any "confidential information" of the other party. For purposes of this Section 6.12, "confidential information" includes any information of any kind, nature, or description that is proprietary, treated as confidential by, owned by, used by, or concerning any matters affecting or relating to the business of a party or the subject matter of this Agreement, including but not limited to, the names, business patterns and practices of any of its customers, its marketing methods and related data, the names of any of its vendors and suppliers, the prices it obtains or has obtained or at which it sells or has sold products or services, lists, other written records, and information relating to its manner of operation. Notwithstanding the foregoing, "confidential information" shall not include any information which (i) is or becomes public knowledge through no fault or wrongful act of the party disclosing such information or its employees, (ii) was known by such party prior to any agency or distributor relationship with the other party or any predecessor, (iii) is received by such party pursuant to the Formulation Agreement and which is not otherwise confidential information, or (iv) is received from a third party who is not obligated to keep such information confidential. All "confidential information" in any form (electronic or otherwise) shall be and remain the sole property of the party possessing such information and shall be returned to such party upon the termination of this Agreement upon such party's reasonable request. + +Section 6.13 Noncompetition. + +(a) Noncompetition Period. The "Noncompetition Period" shall be the term of this Agreement, and for the two- year period following the termination, cancellation or non-renewal of this Agreement; provided, however, that in the event (i) Monsanto terminates this Agreement pursuant to Section 10.4(a)(2) or (ii) the Agent terminates this Agreement pursuant to Section 10.5(a), the Noncompetition Period shall be deemed to terminate simultaneously upon the effective date of the termination of this Agreement. + +(b) Monsanto Covenant. Except as provided for in Section 3.8, Monsanto covenants and agrees that for the Noncompetition Period, Monsanto will not, nor will it permit any Affiliate to, directly or indirectly, own, manage, operate or control, or participate in the ownership, management, operation or control of, or be connected with or have any interest in, as a shareholder, partner, creditor or otherwise, any "Competitive Business." A Competitive Business shall be any business which, anywhere within the Included Markets, (x) manufactures, sells, markets or + +36 + + + + + +distributes any non-selective weed control product, whether residual or non-residual, for Lawn and Garden Use or (y) competes with the Roundup L&G Business; provided, however, this Section 6.13(b) shall not apply to those actions of Monsanto or any Affiliate (i) to the extent such actions are expressly contemplated by this Agreement, for the duration of this Agreement, (ii) to the extent that immediately upon termination of this Agreement for whatever reason Monsanto or any Affiliates or successor to the Roundup L&G Business shall continue to operate the Roundup L&G Business without infringing this covenant, or (iii) to the extent that Monsanto's interest in a Competitive Business, as a shareholder, partner, creditor or otherwise, is equal to or less than 5%. + +(1) In the event any Exclusive Mexican Business makes a material change in its business model to target sales to consumers outside of the Lawn and Garden Market, Monsanto will notify the Agent in writing that it wishes to begin selling Mexican Roundup Ag Products to such identified business. The Agent will have thirty (30) days to provide any written objection to Monsanto's request. If the Agent does not object to the request, such identified Exclusive Mexican Business will no longer remain exclusive to the Agent. If the Agent objects to Monsanto's request, Monsanto shall have the ability to raise its request to the Steering Committee for final determination. Monsanto shall continue to maintain the right to sell Mexican Roundup Ag Products, labeled for the Ag Market, regardless of size, to any business that markets and makes sales to the Ag Market in Mexico, regardless of whether that business also markets and makes sales to consumers for use in, on or around residential homes, residential lawns and residential gardens, and such sales shall not constitute a violation of Section 6.13(b) of this Agreement. Monsanto's Mexican Roundup Ag Products shall not be included in the Program Sales Revenue, regardless of SKU size. + +(c) Agent's Covenant. The Agent covenants and agrees that during the Noncompetition Period, the Agent will not, nor will it permit any Affiliate to, directly or indirectly, own, manage, operate or control, or participate in the ownership, management, operation or control of, or be connected with or have any interest in, as a shareholder, partner, creditor or otherwise, any Competitive Business; provided, however, this Section 6.13(c) shall not apply to those actions of the Agent or any Affiliate (i) to the extent such actions are expressly contemplated by this Agreement, for such term of this Agreement; (ii) to the extent such actions relate to the products listed on Exhibit D hereto in the countries listed therein, the products that the Agent either owns, has contracted to purchase or entered into a letter of intent with respect to as of the Effective Date and such additional products as the parties may from time to time agree (the "Permitted Products"); (iii) to the extent that the Agent's interest in a Competitive Business, as a shareholder, partner, creditor or otherwise, is equal to or less than 5%; or (iv) to any separate agreement with Monsanto with respect to transgenic technology sharing. Notwithstanding the foregoing provisions of this Section 6.13(c), the Agent shall have the right to market and make sales of Roundup Products labeled for Lawn and Garden Use to any business that markets and makes sales to Lawn and Garden Channels in Mexico regardless of whether that business also makes sales to the Ag Market in Mexico, and such sales shall not constitute a violation of Section 6.13(c) of this Section 6.13(c). + +(d) Non-Solicitation by Monsanto. Monsanto agrees that for the duration of the Noncompetition Period and for the two years thereafter, without the prior written consent of the Agent, it will not, nor will it permit any of its Affiliates to (i) solicit for employment any person + +37 + + + + + +then employed by the Agent or any of its Affiliates or (ii) knowingly employ any employee of the Agent or any of its Affiliates who voluntarily terminates such employment with the Agent (or such Affiliate) after the Effective Date, until three months have passed following termination of such employment. + +(e) Non-Solicitation by the Agent. The Agent agrees that for the duration of the Noncompetition Period, without the prior written consent of Monsanto, it will not, nor will it permit any of its Affiliates to (i) solicit for employment any person then employed who works primarily with Roundup Products or with other products with Lawn & Garden Uses ("Lawn & Garden Employee") by Monsanto or any of its Affiliates or (ii) knowingly employ any Lawn & Garden Employee of Monsanto or any of its Affiliates who voluntarily terminates such employment with Monsanto (or such Affiliate) after the Effective Date, until three months have passed following termination of such employment. + +(f) Consideration. The consideration for the agreements contained in this Section 6.13 are the mutual covenants contained herein, the agreement of the parties to consummate the purchase of the Non-Roundup Assets, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged. + +(g) Modification. In the event a court (or other authority) refuses to enforce the covenants and agreements contained in this Section 6.13, either because of the scope of the geographical area specified in this Section 6.13, the duration of the restrictions, or otherwise, the parties hereto expressly confirm their intention that the geographical areas covered hereby, the time period of the restrictions, or such other provision, be deemed automatically reduced to the minimum extent necessary to permit enforcement. + +(h) Injunctive Relief. The parties acknowledge and agree that the extent of damages to one party (the "non- breaching party") in the event of an actual or threatened breach of this Section 6.13 by the other party (the "breaching party") may be impossible to ascertain and there may be available to the non-breaching party no adequate remedy at law to compensate the non-breaching party in the event of such an actual or threatened breach by the breaching party. Consequently, the parties agree that, in the event that either party breaches or threatens to breach any such covenant or agreement, the non-breaching party shall be entitled, in addition to any other remedy or relief to which it may be entitled, including without limitation, money damages, to seek to enforce any or all of such agreements or covenants against the breaching party by injunctive or other equitable relief ordered by any court of competent jurisdiction. + +Section 6.14 Industrial Property. + +(a) Monsanto represents and warrants that Monsanto or Affiliates are the exclusive owners of the trademarks, trade names, packages, copyrights and designs used in the sale of Roundup Products (hereinafter referred to as "Industrial Property"). To Monsanto's knowledge, the conduct of the Roundup L&G Business as now being conducted and the use of the Industrial Property in the conduct of the Roundup L&G Business, do not infringe or otherwise conflict with any trademarks, registrations, or other intellectual property or proprietary rights of others, nor has any claim been made that the conduct of the Roundup L&G Business as now being conducted + +38 + + + + + +infringes or otherwise is covered by the intellectual property of a third party, except for any conflict or infringement which would not have a material adverse effect. To the knowledge of Monsanto, none of the Industrial Property is currently being infringed upon by a third party. + +(b) The Agent acknowledges the validity of the trademarks which designate and identify Roundup Products. The Agent further acknowledges that Monsanto is the exclusive owner of the Industrial Property. + +(c) The Agent agrees that, to the extent it uses Industrial Property, such Industrial Property shall be used in its standard form and style as it appears upon Roundup Products or as instructed in writing by Monsanto. No other letter(s), word(s), design(s), symbol(s) or other matter of any kind shall be superimposed upon, associated with or shown in such proximity to the Industrial Property so as to tend to alter or dilute such Industrial Property, and the Agent further agrees not to combine or associate any of such Industrial Property with any other industrial property. The generic or common name of the type of product (e.g., "non-selective herbicide") must always follow Roundup Products' trademarks. + +(d) In all advertisements, sales and promotional or other printed matter in which any Industrial Property appears, the Agent shall identify itself by full name and address and state its relationship to Monsanto. In all such material, the Roundup trademark shall be identified as a trademark owned by Monsanto Company. In the case of a registered trademark, a ® shall be placed adjacent to the trademark with the ® referring to a footnote reading "® Registered trademark of Monsanto Company." In the case of unregistered trademarks, a "TM" shall be placed adjacent to the trademark with the "TM" referring to a footnote reading "TM Trademark of Monsanto Company." + +(e) On its letterheads, business cards, invoices, statements, etc., the Agent may identify itself as a distributor for the Industrial Property. + +(f) The Agent agrees that it will never use any Industrial Property or any simulation of such Industrial Property as part of the Agent's corporate or other trading name or designation of any kind. + +(g) Upon expiration or in the event of any termination of this Agreement, the Agent shall promptly discontinue every use of the Industrial Property and any language stating or suggesting the Agent is a distributor for Roundup Products. All advertising and promotional materials which use Industrial Property shall be destroyed. + +(h) The Agent shall not use or facilitate the use of promotional materials which disparage Roundup Products or Industrial Property. If the Agent should become aware of any suspected counterfeiting of Roundup Products or Industrial Property, the Agent shall promptly notify Monsanto of such suspected counterfeiting. The Agent shall cooperate in any investigation or legal proceedings that Monsanto deems desirable to protect its rights in the Industrial Property. The Agent shall not promote the sale of products using trademarks, packages or designs which are in Monsanto's opinion deceptively similar to Industrial Property. + +39 + + + + + +Section 6.15 Conflicts of Interest. Conflicts of interest relating to this Agreement are strictly prohibited. Except as otherwise expressly provided herein, neither party nor any of its directors, employees or agents, or its subcontractors or vendors shall give to or receive from any director, employee or agent of the other party any gift, entertainment or other favor of significant value, or any commission, fee or rebate. Likewise, neither party nor its directors, employees or agents or its subcontractors or vendors shall, without prior written notification thereof to the other party, enter into any business relationship with any director, employee, or agent of the other party or any of its Affiliates unless such person is acting for and on behalf of such party. Each party shall promptly notify the other of any violation of this Section 6.15 and any consideration received as a result of such violation shall be paid over or credited to the other party. + +Section 6.16 Records Retention. The Agent and Monsanto shall each maintain true and complete records in connection with this Agreement and shall retain all such records for at least forty-eight (48) months following the termination or expiration of this Agreement. This obligation shall survive the termination or expiration of this Agreement. + +Section 6.17 Additional Covenant of the Agent. The Agent shall not take any action or fail to take any action that materially adversely impacts the Roundup brand or the Ag Market; provided, however, that the Agent shall have no liability for any event resulting primarily by an act or omission of Monsanto or its Affiliates. + +Section 6.18 Roundup Telephone Number. The parties acknowledge and agree that the Agent currently is the party of record for the tollfree service number 1-888-768-6387 (1-888-ROUNDUP). The Agent hereby acknowledges and agrees that it will transfer the right to use such telephone number back to Monsanto within thirty (30) days of Monsanto providing notice to the Agent of Monsanto's decision to become the party of record for such telephone number. + +Section 6.19 Additional Obligations. Unless expressly agreed by the parties in writing on a country-by-country basis, Monsanto shall not sell, or promote the indirect sale of, the 1.67 Gallon Roundup Pro Max SKU through Lawn and Garden Channels in the Included Markets; provided, that the foregoing shall not be deemed an acknowledgement by Monsanto that a 1.67 Gallon package product or any other package size cannot have agricultural uses. + +ARTICLE 7 - [RESERVED] + +ARTICLE 8 - REPRESENTATIONS, WARRANTIES, AND COVENANTS + +Section 8.1 The Agent's Representations and Warranties. The Agent hereby represents and warrants that all of the following are true: + +(a) The Agent is a limited liability company duly organized, validly existing and in full force and effect under the laws of Ohio and has all requisite limited liability company + +40 + + + + + +power and authority to carry on and conduct its business as it is now being conducted, to own or lease its assets and properties and is duly qualified and in good standing in every jurisdiction in which the conduct of its business or ownership of its assets requires it to be so qualified. + +(b) (i) The Agent has the full authority and legal right to carry out the terms of this Agreement; (ii) the terms of this Agreement will not violate the terms of any other material agreement, contract or other instrument to which it is a party, and no consent or authorization of any other person, firm, or corporation is a condition precedent to the Agent's execution of this Agreement; (iii) it has taken all action necessary to authorize the execution and delivery of this Agreement; and (iv) this Agreement is a legal, valid, and binding obligation of the Agent, enforceable in accordance with its terms. + +(c) The Agent is in compliance in all material respects with all applicable Laws relating to its business. + +(d) There is no material suit, investigation, action or other proceeding pending or threatened before any court, arbitration tribunal, or judicial, governmental or administrative agency, against the Agent which would have a material adverse effect on the ability of the Agent to perform its obligations hereunder or which seeks to prevent the consummation of the transactions contemplated herein. + +(e) There are no material disputes with underwriters under the Agent's insurance policies; each such policy is valid and enforceable in accordance with its terms and is in full force and effect; there exists no default by the Agent under any such policy, and there has been no material misrepresentation or inaccuracy in any application therefor, which default, misrepresentation or inaccuracy would give the insurer the right to terminate such policy, binder, or fidelity bond or to refuse to pay a claim thereunder; and the Agent has not received notice of cancellation or non-renewal of any such policy. + +Section 8.2 Monsanto's Representations and Warranties. Monsanto hereby represents and warrants that all of the following are true: + +(a) Monsanto is a corporation duly incorporated, validly existing and in good standing under the laws of Delaware and has all requisite corporate power and authority to carry on and conduct its business as it is now being conducted, to own or lease its assets and properties and is duly qualified and in good standing in every jurisdiction in which the conduct of its business or ownership of its assets requires it to be so qualified. + +(b) (i) Monsanto has the full authority and legal right to carry out the terms of this Agreement; (ii) the terms of this Agreement will not violate the terms of any other material agreement, contract or other instrument to which it is a party, and no consent or authorization of any other person, firm, or corporation is a condition precedent to this Agreement; (iii) it has taken all action necessary to authorize the execution and delivery of this Agreement; and (iv) this Agreement is a legal, valid, and binding obligation of Monsanto, enforceable in accordance with its terms. + +41 + + + + + +(c) Monsanto is in compliance, in all material respects, with all applicable Laws relating to its business. + +(d) There is no material suit, investigation, action or other proceeding pending or threatened before any court, arbitration tribunal, or judicial, governmental or administrative agency, against Monsanto which would have a material adverse effect on the ability of Monsanto to perform its obligations hereunder or which seeks to prevent the consummation of the transactions contemplated herein. + +ARTICLE 9 - INDEMNIFICATION + +Section 9.1 Indemnification and Claims Procedure. + +(a) Indemnification. Each party hereto agrees to indemnify, defend and hold harmless the other party and its employees, officers, directors, agents and assigns from and against any and all loss (including reasonable attorneys' fees), damage, injury or liability, whether incurred as a party or non-party to any action or proceeding, that may arise out of any actual or threatened claim asserted or action brought by or on behalf of a third party for injury to or death of a person for loss of or damage to property, including employees and property of the indemnified party ("Loss"), to the extent resulting directly or indirectly from the indemnifying party's actual or alleged (i) breach of a duty, representation, or obligation of this Agreement, or (ii) negligence or willful misconduct in the performance of its obligations under this Agreement, except to the extent that such indemnification is void or otherwise unenforceable under applicable law in effect on or validly retroactive to the date of this Agreement. + +(b) Claims Procedure. Promptly after receipt by either party hereto (the "Indemnitee") of any notice of any demand, claim or circumstances which, with the lapse of time, would or might give rise to a claim or the commencement (or threatened commencement) of any action, proceeding or investigation (an "Asserted Liability") that may result in a Loss, the Indemnitee shall give notice thereof (the "Claims Notice") to the party obligated to provide indemnification pursuant to Section 9.1(a). The Claims Notice shall describe the Asserted Liability in reasonable detail, and shall indicate the amount (estimated, if necessary to the extent feasible) of the Loss that has been or may be suffered by the Indemnitee. Thereafter, the following procedures shall apply: + +(1) Subject to Section 9.1(b)(2), 9.1(b)(3), 9.1(b)(4) and 9.1(b)(5), the indemnifying party may elect to compromise or defend, at its own expense by its own counsel, and shall control any such compromise or defense; + +(2) If the indemnifying party elects to compromise or defend such Asserted Liability it shall (i) within thirty (30) days after confirmed receipt of the Claims Notice notify the Indemnitee of its intent to do so, and the Indemnitee shall cooperate, at the expense of the indemnifying party, in the compromise of, or defense against, such Asserted Liability, and shall make available to the indemnifying party any books, records or other documents within its control that are necessary or appropriate for such defense, (ii) select counsel and, if applicable, consultants and contractors, reasonably acceptable to Indemnitee in connection with conducting the defense of such Asserted Liability, and (iii) defend or settle such Asserted Liability in + +42 + + + + + +consultation with Indemnitee, including, without limitation, consulting Indemnitee on litigation strategy and keeping Indemnitee reasonably informed of all proceedings and settlement demands and negotiations; + +(3) The indemnifying party shall not consent to a settlement of any such Asserted Liability without the prior written consent of Indemnitee, which consent shall not be unreasonably withheld; provided, that the indemnifying party may enter into a settlement without the consent of Indemnitee after providing at least thirty (30) days' prior written notice to Indemnitee if the terms of such settlement (x) include only money damages as a remedy and such money damages are paid in full by the indemnifying party, (y) do not impose material obligations or restrictions on Indemnitee's business and (z) do not include any admission of wrongdoing by Indemnitee; + +(4) If the indemnifying party elects not to compromise or defend the Asserted Liability, fails to notify the Indemnitee of its election as herein provided, or contests its obligation to indemnify under this Agreement, the Indemnitee may pay, compromise or defend such Asserted Liability, with a reservation of all rights to seek indemnification hereunder against the indemnifying party; provided, that Indemnitee may enter into a settlement without the consent of the indemnifying party after providing at least thirty (30) days' prior written notice to the indemnifying party, if the terms of such settlement (i) include only money damages as a remedy, (ii) do not impose material obligations or restrictions on the indemnifying party's business and (iii) do not include any admission of wrongdoing by the indemnifying party; and + +(5) Notwithstanding the foregoing, the Indemnitee and the indemnifying party may participate, in all instances, and at their own expense, in the defense of any Asserted Liability. + +ARTICLE 10 - TERMS, TERMINATION, AND FORCE MAJEURE + +Section 10.1 Terms. This Agreement shall commence as of the Effective Date and shall continue unless and until terminated as provided herein. + +Section 10.2 [Reserved]. + +Section 10.3 [Reserved]. + +Section 10.4 Termination by Monsanto. + +(a) Termination Rights. In addition to its right to terminate this Agreement pursuant to Section 10.9, Monsanto shall have the right to terminate this Agreement by giving the Agent a termination notice specified for each termination event upon the occurrence and continuance of either of the following: + +(1) An Event of Default occurring at any time; or + +43 + + + + + +(2) A Change of Control with respect to Monsanto or a Roundup Sale, in each case, by giving the Agent a notice of termination, such termination to be effective at the end of the fifth (5th) full Program Year after such notice is provided. + +(b) Event of Default. An Event of Default shall mean any of the following occurrences: + +(1) a Material Breach of this Agreement committed by the Agent and established in accordance with the provisions of Section 10.4(g) of this Agreement; + +(2) a Material Fraud committed by the Agent and established in accordance with the provisions of Section 10.4(g) of this Agreement; + +(3) Material Willful Misconduct committed by the Agent and established in accordance with the provisions of Section 10.4(g) of this Agreement; + +(4) [Intentionally omitted.]; + +(5) [Intentionally omitted.]; + +(6) the Insolvency of Agent; + +(7) the occurrence of a Change of Control of an SMG Target without the prior written consent of Monsanto, unless the Agent has determined in its reasonable commercial opinion that such acquiror can and will fully perform the duties and obligations of the Agent under this Agreement; + +(8) [Intentionally omitted.]; or + +(9) except to the extent permitted herein, (i) the assignment of all, or substantially all, of the Agent's rights, or (ii) the delegation of all, or substantially all, of the Agent's obligations hereunder, in either instance without the prior written consent of Monsanto. + +As to any Event of Default defined in Sections 10.4(b)(1)-(3), such termination shall take effect on the later of the first business day following the thirtieth (30th) day after the sending of a termination notice to the Agent in accordance with the provisions of Section 11.9, or the date designated by Monsanto in said termination notice. As to any Event of Default defined in Sections 10.4(b)(6), (7) and (9), such termination shall take effect on the later of the first business day following the seventh (7th) day after the sending of a termination notice to Agent, or the date designated by Monsanto in said notice of termination. + +(c) Payment of Termination Fee. Except for termination of this Agreement by Monsanto upon any Event of Default, a Termination Fee (as specified in Section 10.4.(d)) shall only be paid either by Monsanto or by the successor to the Roundup Business, as the case may be, upon the following terms and conditions: + +44 + + + + + +(1) in the event the Agreement is effectively terminated by either Monsanto or its successor or by the Agent upon Material Breach, Material Fraud or Material Willful Misconduct by Monsanto as provided for in Section 10.5.(c); + +(2) no later than the effective date of the applicable termination notice and no later than the effective date of the termination; and + +(3) only in the event the Agent does not become the successor to the Roundup Business, in which case the Termination Fee shall not be paid but shall be credited against the purchase price as described in Section 10.4(d). + +(d) Termination Fee. Monsanto and the Agent stipulate and agree that the injury which will be caused to the Agent by the termination of this Agreement under the circumstances which shall give rise to the payment of the Termination Fee are difficult or impossible of accurate estimation; that by establishing the Termination Fee they intend to provide for the payment of damages and not a penalty; and that the sum stipulated for the Termination Fee is a reasonable pre-estimate of the probable loss which will be suffered by the Agent in the event of such termination. + +The Termination Fee payable shall vary in accordance with the Table hereunder: + +Program Year Termination Fee + +2015 P rog ram Yea r and thereafter The greater of (i) $175MM or (ii) four (4) times an amount equal to (A) the average of the Program EBIT for the three (3) trailing Program Years prior to the year of termination, minus (B) the 2015 Program EBIT (excluding Europe and Australia) of $186.4MM. + +For example, if the Roundup Sale occurs in 2033 (all expressed in $MM): + +2015 2030 2031 2032 3 year Avg Termination Fee $186.4 $310 $309 $314 $311 $498.4 + +(e) Remedies for Monsanto. Subject to Section 10.4(g), in case of termination by Monsanto upon any of the Events of Default by the Agent specified in Section 10.4(b)(1)-(3), Monsanto shall be entitled to exercise all remedies available to it, either at law or in equity. In the case of termination by Monsanto upon any of the Events of Default specified in Sections 10.4(b) (6), (7) and (9), the remedies of Monsanto shall be limited to (i) termination of this Agreement and (ii) the recovery of reasonable and customary out-of-pocket expenses incurred by Monsanto in transferring the Agent's duties hereunder to a new agent; provided that in no case shall the amount of expenses recoverable under this provision exceed $20MM. + +(f) Exclusive Remedy. The payment of a Termination Fee to the Agent under Section 10.4(c) shall be deemed to constitute the exclusive remedy for any damages resulting out of the termination of this Agreement by Monsanto or the successor to the Roundup Business pursuant + +45 + + + + + +to Section 10.4(c) and the Agent shall waive its right to exercise any other remedies otherwise available at law or in equity. + +(g) Arbitration. In the event either party claims that a Material Breach, a Material Fraud, or Material Willful Misconduct has been committed by the other party (the "Breaching Party"), or this Agreement otherwise explicitly provides that the provisions of this Section 10.4(g) apply, the following procedures shall apply: + +(1) After the asserted occurrence of a Material Breach, a Material Fraud, or Material Willful Misconduct, the party who contends that such breach, fraud or misconduct has occurred (the "Claimant") shall send to the Breaching Party a notice, in accordance with the notice provisions of Section 11.9 of this Agreement, in which the Claimant shall: (i) identify the Material Breach, Material Fraud, or Material Willful Misconduct which it contends has occurred; (ii) appoint an arbitrator; and (iii) demand that the Breaching Party appoint an arbitrator. + +(2) Within fifteen (15) days after receipt of the notice, the Breaching Party shall send a response to the Claimant, in accordance with the notice provisions of Section 11.9 of this Agreement, in which the Breaching Party shall: (i) indicate whether it contests the asserted occurrence of the Material Breach, Material Fraud, or Material Willful Misconduct, as the case may be; and (ii) if it does contest such asserted occurrence, appoint a second arbitrator. The failure on the part of the Breaching Party to timely respond to the notice, and/or to timely appoint its arbitrator, shall be deemed to constitute acceptance of the arbitrator designated by the Claimant as the 'sole arbitrator. + +(3) If the Breaching Party appoints an arbitrator, then within fifteen (15) days after the receipt of the Breaching Party's response by the Claimant, the two arbitrators shall jointly appoint a third arbitrator. If the arbitrators selected by the parties are unable or fail to agree upon the third arbitrator, the third arbitrator shall be selected by the American Arbitration Association. Upon their selection by either means, the three arbitrators (the "Arbitrators") shall expeditiously proceed to determine whether a Material Breach, Material Default or Material Willful Misconduct has occurred, in accordance with the procedures hereafter set forth. + +(4) Except as specifically modified herein, the arbitration proceeding contemplated by this section (the "Arbitration") shall be conducted in accordance with Title 9 of the US Code (United States Arbitration Act) and the Commercial Arbitration Rules of the American Arbitration Association, and judgment on the award rendered by the arbitrators may be entered in any court having jurisdiction thereof. The cost of the Arbitration shall be borne equally by the parties, with the understanding that the Arbitrators may reimburse the prevailing party, if any, as determined by the Arbitrators for that party's cost of the Arbitration in connection with the award made by the Arbitrators as described below. + +(5) The award shall be made within three (3) months after the appointment of the third Arbitrator, and each of the Arbitrators shall agree to comply with this schedule before accepting appointment. However, this time limit may be extended by agreement of the parties or by the Arbitrators, if necessary. + +46 + + + + + +(6) Consistent with the expedited nature of arbitration, each party will, upon the written request of the other party, promptly provide the other with copies of documents relevant to the issues raised by the notice or the response, including those documents on which the producing party may rely in support of or in opposition to any claim or defense. Any dispute regarding discovery, or the relevance or scope thereof, shall be determined by the Arbitrators, which determination shall be conclusive. All discovery shall be completed within 60 days following the appointment of the third Arbitrator. + +(7) At the request of a party, the Arbitrators shall have the discretion to order examination by deposition of witnesses to the extent the Arbitrators deem such additional discovery relevant and appropriate. Depositions shall be held within 30 days of the making of a request, and shall be limited to a maximum of number of hours' duration as may be mutually agreed to by the parties, or in the absence of such agreement as may be determined by the Arbitrators. All objections are reserved for the arbitration hearing, except for objections based on privilege and proprietary or confidential information. + +(8) Either party may apply to the Arbitrators seeking injunctive relief until the arbitration award is rendered or the controversy is otherwise resolved. Either party also may, without waiving any remedy under this Agreement, seek from any court having jurisdiction any interim or provisional relief that is necessary to protect the rights or property of that party, pending the establishment of the arbitral tribunal (or pending the arbitral tribunal's determination of the merits of the controversy). + +(9) The scope of the Arbitration shall include the following: + +(i) a determination as to whether the act(s) or omission(s) set forth by the Claimant have occurred; + +(ii) a determination as to whether those act(s) or omissions(s) determined to have occurred constitute a breach of this Agreement, fraudulent conduct in connection with this Agreement, or willful misconduct in connection with this Agreement, as the case may be; + +(iii) a determination as to whether those act(s) or omissions(s) determined to have occurred constitute a Material Breach, a Material Fraud, or Material Willful Misconduct, as the case may be; + +(iv) a determination as to the amount of monetary damages, if any, suffered by the Claimant, as a result of those act(s) or omissions(s) determined to have occurred which constitute a breach of this Agreement, fraudulent conduct in connection with this Agreement, or willful misconduct in connection with this Agreement, as the case may be, regardless of whether such act(s) or omission(s) rise to the level of Material Breach, Material Fraud, or Material Willful Misconduct, as the case may be; + +(v) a determination, to the extent applicable, of the specific performance which could and should be decreed to correct any breach, fraud or material misconduct which the Arbitrators determine can be cured by the issuance of such decree; + +47 + + + + + +(vi) a determination as to which party, if any, is the prevailing party in the Arbitration, and the amount of such party's costs and fees. "Costs and fees" means all reasonable pre-award expenses of the arbitration, including the arbitrators' fees, administrative fees, travel expenses, out-of-pocket expenses such as copying and telephone, court costs, witness fees, and attorneys' fees; and + +(vii) a determination as to such matters as the Arbitrators deem necessary and appropriate to carry out their duties in connection with the Arbitration. + +(10) The Arbitrators' award shall be in writing, shall be signed by a majority of the Arbitrators, and shall include a statement regarding the reasons for the disposition of any claim. + +(11) The Arbitrators' award shall, as applicable, include the following: + +(i) to the extent that the Arbitrators determine that the Claimant has suffered monetary damages as a result of those act(s) or omissions(s) determined to have occurred which constitute a breach of this Agreement, fraudulent conduct in connection with this Agreement, or willful misconduct in connection with this Agreement, as the case may be, a monetary award in the amount of those damages; + +(ii) to the extent that the Arbitrators determine that the harm resulting from those act(s) or omissions(s) determined to have occurred can be cured, in whole or in part by a decree of specific performance, such a decree of specific performance implementing such determination as can be submitted to and made the order of a Court of competent jurisdiction; + +(iii) to the extent that the Arbitrators determine that those act(s) or omissions(s) determined to have occurred constitute a Material Breach, a Material Fraud, or Material Willful Misconduct, as the case may be, an award authorizing the Claimant to immediately terminate this Agreement, together with damages or specific performance, if determined by the Arbitrators to be appropriate; + +(iv) to the extent that the Arbitrators determine that there is a prevailing party, and that said prevailing party should receive an award of its Costs and Fees, such award to the prevailing party; and + +(v) such other matters as the Arbitrators deem necessary and appropriate to implement their determinations made in the Arbitration. + +(12) The written determination of the Arbitrators shall be made and delivered promptly to the parties to the Arbitration and shall be final and conclusive upon the parties to the Arbitration. + +(13) Except as may be required by law, neither a party nor an Arbitrator may disclose the existence, content, or results of any Arbitration hereunder without the prior written consent of both parties. + +48 + + + + + +Section 10.5 Termination by the Agent. + +(a) Material Breach, Material Fraud and Material Willful Misconduct. The Agent may terminate this Agreement in accordance with the provisions of Section 10.4(g) upon: + +(1) a Material Breach of this Agreement committed by Monsanto and established in accordance with the provisions of Section 10.4(g) of this Agreement; + +(2) a Material Fraud committed by Monsanto and established in accordance with the provisions of Section 10.4(g) of this Agreement; + +(3) Material Willful Misconduct committed by Monsanto and established in accordance with the provisions of Section 10.4(g) of this Agreement. Such termination shall take effect on the later of the first business day following the thirtieth (30th) day after the sending of a termination notice to Monsanto in accordance with the provisions of Section 11.9, or the date designated by the Agent in said termination notice. + +(b) Roundup Sale. The Agent may terminate this Agreement by written notice thereof to Monsanto upon receipt of notice of a Roundup Sale as described in Section 10.6. + +(c) Termination Fee. Upon termination of this Agreement by the Agent pursuant to Section 10.5(a), Monsanto shall pay to the Agent the Termination Fee applicable pursuant to the Table set forth in Section 10.4(d). + +(d) Brand Decline Event. + +(i) If prior to Program Year 2023 + +(A) the Sell-Through Business has declined by more than twenty-five percent (25%) as compared to the Sell-Through Business for Program Year 2014 due to legal, regulatory, governmental or non-governmental organization actions adversely affecting the market for Roundup Products or due to diminished consumer or retailer acceptance of Roundup Products due to anti-Monsanto or anti-glyphosate sentiment, or + +(B) there has been a significant decline in the overall health and goodwill of the Roundup brand, as measured by industry standard market research and best practices such as attitude and usage studies (provided that the decline is not primarily due to the acts or omissions of the Agent or its Affiliates), and, in the case of (A) or (B), + +(C) such declines cannot be remedied by the end of the next full Program Year, + +then the Agent may provide notice to Monsanto of such alleged declines (such declines, a "Brand Decline Event"). + +(ii) If Monsanto does not contest the occurrence of the alleged Brand Decline Event by submitting such alleged Brand Decline Event to resolution through + +49 + + + + + +arbitration in accordance with the provisions of Section 10.4(g) of this Agreement within ninety (90) days of receipt of such notice from the Agent, then that Brand Decline Event shall be deemed to have occurred as of the date of such notice, and thereafter the Agent shall be entitled to either, as the Agent's sole remedy, (x) terminate this Agreement, which termination shall be effective at the end of the third (3rd) full Program Year following the Program Year in which the Agent delivers notice of termination pursuant to this Section 10.5(d)(ii), or (y) not terminate this Agreement and be entitled to the Additional Commission Amount (in addition to the Commission) set forth in Section 10.5(d)(iv) below, which Additional Commission Amount shall be subject to all other terms and conditions of this Agreement with respect to the Commission, except as otherwise expressly stated in this Section 10.5(d). + +(iii) If Monsanto does contest the occurrence of the alleged Brand Decline Event by submitting such alleged Brand Decline Event to resolution through arbitration in accordance with the provisions of Section 10.4(g) of this Agreement within ninety (90) days of receipt of such notice from the Agent, then the question of whether a Brand Decline Event has occurred will be finally determined in accordance with the provisions of Section 10.4(g) of this Agreement, and if a Brand Decline Event is finally determined to have occurred, then the Brand Decline Event shall be deemed to have occurred as of the date of such notice, and thereafter the Agent shall be entitled to either, as the Agent's sole remedy, (x) terminate this Agreement, which termination shall be effective at the end of the third (3rd) full Program Year following the Program Year in which the Agent delivers notice of termination pursuant to this Section 10.5(d)(iii), or (y) not terminate this Agreement and be entitled to the Additional Commission Amount (in addition to the Commission) set forth in Section 10.5(d)(iv) below, which Additional Commission Amount shall be subject to all other terms and conditions of this Agreement with respect to the Commission, except as otherwise expressly stated in this Section 10.5(d). + +[Remainder of page intentionally left blank] + +50 + + + + + +(iv) The amounts of the "Additional Commission Amount" mean, depending on the Program Year in which the Brand Decline Event occurs, the amounts indicated in the table below for the Program Years indicated: + +Year of Brand Decline Event => Program Year 2018 Program Year 2019 Program Year 2020 Program Year 2021 Program Year 2022 + +Additional Commission Amount in Program Year 2018 $10MM + + Additional Commission Amount in Program Year 2019 $10MM $10MM + + Additional Commission Amount in Program Year 2020 $10MM $10MM $10MM + + Additional Commission Amount in Program Year 2021 $10MM $10MM $10MM $8MM + + Additional Commission Amount in Program Year 2022 $10MM $10MM $10MM $8MM $6MM + +Additional Commission Amount in Program Year 2023 $10MM $10MM $10MM $8MM $6MM + +Additional Commission Amount in Program Year 2024 $10MM $10MM $10MM $8MM $6MM + +Additional Commission Amount in Program Year 2025 + + + +$8MM $6MM + +Additional Commission Amount in Program Year 2026 + + + +$6MM + +Section 10.6 Roundup Sale. + +(a) Roundup Sale Procedures. + +(i) Right of First Offer. If Monsanto (A) receives an unsolicited proposal with respect to a potential Roundup Sale and responds in any manner, other than rejecting such proposal, (B) solicits or makes a formal determination to solicit or make any proposal with respect to a potential Roundup Sale or (C) enters into an agreement relating to the provision of information with respect to a potential Roundup Sale (each a "Roundup Sale Notice Trigger"), the Agent shall have the rights as set forth in this Section 10.6 with respect to any such Roundup Sale and Monsanto shall promptly provide written notice to the Agent of such Roundup Sale as set forth + +51 + + + + + +in Section 10.6(a)(ii) (a "Roundup Sale Notice"). For the avoidance of doubt, the provisions of this Section 10.6(a) shall apply to any and all potential Roundup Sales. + +(ii) Roundup Sale Notice. Upon the occurrence of a Roundup Sale Notice Trigger, Monsanto shall promptly provide a Roundup Sale Notice to the Agent along with all Roundup Offering Materials (subject to Monsanto entering into a confidentiality agreement on commercially reasonable terms with the Agent with respect to such Roundup Offering Materials). After the occurrence of a Roundup Sale Notice Trigger, if Monsanto delivers any Roundup Offering Materials to a third party that contain material deviations from the Roundup Offering Materials previously provided to the Agent, Monsanto shall provide copies of such Roundup Offering Materials to the Agent promptly after such delivery. + +(iii) Exclusivity. + +(A) For a period of sixty (60) days from the last date of receipt by the Agent of the Roundup Sale Notice and any related Roundup Offering Materials as set forth in Section 10.6(a)(ii) (the "Exclusive Roundup Sale Period"), Monsanto agrees to negotiate in good faith with the Agent on an exclusive basis with respect to any potential Roundup Sale. If and only if Monsanto has complied with the provisions of the preceding sentence and no definitive agreement has been entered into with the Agent or one of its Affiliates with respect to a Roundup Sale, then following the Exclusive Roundup Sale Period, Monsanto may then make solicitations to, or otherwise negotiate with, a third party or parties with respect to a Roundup Sale and may provide the Roundup Offering Materials previously provided to the Agent to any such third party or parties in connection with a process to pursue a Roundup Sale. In the event that Monsanto engages in a process in which it seeks bids or proposals from more than one third party in connection with a contemplated Roundup Sale, the Agent shall be entitled to a fifteen (15) day exclusive negotiation period following the receipt and review by Monsanto of all bids or proposals (the "Roundup Quiet Period"), provided that, in determining the value of the price terms of the Agent's bid, Monsanto shall not discount the Agent's bid as a result of the fact that the Termination Fee is an offset or credit against the total purchase price, and that, during the Roundup Quiet Period, the Agent shall have the right to revise its original bid but shall not have the right to review the terms of any other bids or proposals. Monsanto may consummate a Roundup Sale with any third party only if such Roundup Sale is made pursuant to the acceptance by Monsanto of a Roundup Superior Offer. + +(B) During the Exclusive Roundup Sale Period, neither Monsanto nor any of its Affiliates shall, directly or indirectly through its or their agents, employees or representatives or otherwise, solicit, or cause the solicitation of, or in any way encourage the making of, any offer, proposal or indication of interest involving a Roundup Sale or negotiate with, respond to any inquiry from (except for "no comment" or another statement agreed to by the Agent), cooperate with or furnish or cause or authorize to be furnished any information to, any third party or its agents, employees or representatives with respect thereto, or disclose to any third party that a Roundup Sale Notice has been provided to the Agent. Monsanto will immediately advise the Agent of any offer, proposal or indication of interest received by Monsanto or its Affiliates with respect to a Roundup Sale during the Exclusive Roundup Sale Period. + +52 + + + + + +(b) Credit of Termination Fee. In the event that the Agent or any of its Affiliates acquires the Roundup Business in a Roundup Sale, the Termination Fee that would have been payable to the Agent upon a termination pursuant to Section 10.4(a) (2) shall be credited against the purchase price to be paid by the Agent or such Affiliate in the Roundup Sale. + +(c) Agent's Election. In the event that Monsanto determines to consummate a Roundup Sale with a party other than the Agent, Monsanto shall deliver the Agent notice thereof and of the identity of such other party. Within thirty (30) days of receipt of such notice, the Agent shall deliver written notice to Monsanto stating either that: + +(1) The Agent intends to terminate this Agreement pursuant to Section 10.5(b), in which case such notice shall constitute a termination notice for purposes of this Agreement provided that the termination shall be effective at the end of the Third Program Year following the Program Year in which the Agent delivers its Notice of Termination pursuant to this provision; or + +(2) The Agent will not terminate this Agreement pursuant to Section 10.5(b) and agrees to continue the performance of its obligations under the Agreement unless and until the Agent receives a termination notice delivered in accordance with the terms of this Agreement by the successor to the Roundup Business. + +(d) Successor. Upon consummation of a Roundup Sale to a party other than the Agent, Monsanto's successor to the Roundup L&G Business shall assume all rights and responsibilities of Monsanto under this Agreement. + +(e) Noncompetition Upon Termination. In the event of a termination of this Agreement by Monsanto pursuant to Section 10.4(a)(2) hereof, or by the Agent pursuant to Section 10.6(c)(1) hereof, then notwithstanding the provisions of Section 6.13 hereof, either party may, no earlier than three (3) years prior to the expiration of the Noncompetition Period, commence non- commercial activities (including formulation development, regulatory registrations, packaging and delivery systems development, and advertising and promotional material development and any other activities not prohibited by Section 6.13 of this Agreement during the Noncompetition Period, but excluding consumer-facing efforts or communications) for the sole purpose of such party's preparation to launch any competing product upon expiration of the Noncompetition Period; and provided, that either party may, no earlier than twelve (12) months prior to the expiration of the Noncompetition Period, engage with retail customers for the sole purpose of selling-in competing products (provided that no product may be shipped to a retail customer or distributor prior to the end of the Noncompetition Period). + +Section 10.7 Effect of Termination. + +(a) Reserved. + +(b) Prior Obligations and Shipments. Termination shall not affect obligations of Monsanto or of the Agent which have arisen prior to the effective date of termination. + +53 + + + + + +(c) Representations and Materials. Upon termination of this Agreement for any reason, the Agent shall not continue to represent itself as Monsanto's authorized agent to deal in Roundup Products, and shall remove, so far as practical, any printed material relating to such products from its salesperson's manuals and shall discontinue the use of any display material on or about the Agent's premises containing any reference to Roundup Products. + +(d) Return of Books, Records, and other Property. To the extent not otherwise provided herein, upon termination of this Agreement, the Agent shall immediately deliver to Monsanto all records, books, and other property of Monsanto. + +Section 10.8 Force Majeure. If either party is prevented or delayed in the performance of any of its obligations by force majeure and if such party gives written notice thereof to the other party within twenty (20) days of the first day of such event specifying the matters constituting force majeure, together with such evidence as it reasonably can give, then the party so prevented or delayed will be excused from the performance or punctual performance, as the case may be, as from the date of such notice for so long as such cause of prevention or delay continues. For the purpose of this Agreement, the term "force majeure" will be deemed to include an act of God, war, hostilities, riot, fire, explosion, accident, flood or sabotage; lack of adequate fuel, power, raw materials, containers or transportation for reasons beyond such party's reasonable control; labor trouble, strike, lockout or injunction (provided that neither party shall be required to settle a labor dispute against its own best judgment); compliance with governmental laws, regulations, or orders; breakage or failure of machinery or apparatus; or any other cause whether or not of the class or kind enumerated above, including, but not limited to, a severe economic decline or recession, which prevents or materially delays the performance of this Agreement in any material respect arising from or attributable to acts, events, non-happenings, omissions, or accidents beyond the reasonable control of the party affected. + +Section 10.9 [Intentionally deleted] + +ARTICLE 11 - MISCELLANEOUS + +Section 11.1 Relationship of the Parties. Notwithstanding anything herein to the contrary, the parties' status with respect to each other shall be, at all times during the term of this Agreement, that of independent contractors retaining complete control over and complete responsibility for their respective operations and employees. Except as expressly provided herein, this Agreement shall not confer, nor shall be construed to confer, on either party any right, power or authority (express or implied) to act or make representations for, or on behalf of, or to assume or create any obligation on behalf of, or in the name of the other party. Nothing in this Agreement shall confer, or shall be construed to: (i) confer on the Agent any mutual proprietary interest in, or subject the Agent to any liability for, the business, assets, profits, losses, or obligations associated with Monsanto's manufacture, marketing, distribution and sales of Roundup Products; (ii) otherwise make either party a partner, member, or joint venturer of the other party (A) for purposes of the tax laws of the United States or any other country, or (B) for any other purposes under any other Laws; or (iii) create a franchise relationship between the parties. The parties expressly agree that at no time during the term of this Agreement, shall either party through its officers, directors, agents, employees, independent contractors or other representatives or through their respective representatives on the + +54 + + + + + +Steering Committee or Global Roundup Team take any action inconsistent with the foregoing expression of the nature of their relationship, except as required pursuant to applicable governmental authority under applicable Law or with the express written consent of the other party. Accordingly, the parties expressly agree to cooperate and communicate with the Steering Committee and the Global Roundup Support Team from time to time and in all events, annually, to ensure that both parties' actions are in compliance with this Section 11.1. + +Section 11.2 Interpretation in accordance with GAAP. The parties acknowledge that several terms and concepts (such as various financial and accounting terms and concepts) used or referred to herein are intended to have specific meanings and are intended to be applied in specific ways, but they are not so expressly and fully defined and explained in this Agreement. In order to supplement definitions and other provisions contained in this Agreement and to provide a means for interpreting undefined terms and applying certain concepts, the parties agree that, except as expressly provided herein, when costs are to be determined or other financial calculations are to be made, GAAP as well as the party's past accounting practices shall be used to interpret and determine such terms and to apply such concepts. For example, when actual costs and expenses are referred to herein, they are not intended to contain any margin or profit for the party incurring such costs or expenses. + +Section 11.3 Currency. All amounts payable and calculations under this Agreement shall be in United States dollars. As applicable, Program Sales Revenue, Program Expenses, Cost of Goods Sold, Service Costs, and Program EBIT shall be translated into United States dollars at the rate of exchange at which United States dollars are listed in International Financial Statistics (publisher, International Monetary Fund) or if it is not available, The Wall Street Journal for the currency of the country in which the sales were made or the transactions occurred at the average rate of exchange for the Quarter in which such sales were made or transactions occurred. + +Section 11.4 Monsanto Obligations. All permits, licenses, and registrations needed for the sale of Roundup Products shall be obtained by Monsanto. Monsanto shall assume the cost of all federal and state registration fees related to the sale of Roundup Products, with such costs being included within Program Expenses. + +Section 11.5 Expenses. Except as otherwise specifically provided in this Agreement, the Agent and Monsanto will each pay all costs and expenses incurred by each of them, or on their behalf respectively, in connection with this Agreement and the transactions contemplated hereby, including fees and expenses of their own financial consultants, accountants and counsel. + +Section 11.6 Entire Agreement. Subject to Section 6.10(g) of this Agreement, this Agreement, together with all respective exhibits and schedules hereto, constitutes the entire agreement between the parties hereto pertaining to the subject matter hereof and supersedes all representations, warranties, understandings, terms or conditions on such subjects that are not set forth herein or therein. Agreements on other subjects, such as security and other credit agreements or arrangements, shall remain in effect according to their terms. The parties recognize that, from time to time, purchase orders, bills of lading, delivery instructions, invoices and similar documentation will be transmitted by each party to the other to facilitate the implementation of this Agreement. Any terms and conditions contained in any of those documents which are inconsistent + +55 + + + + + +with the terms of this Agreement shall be null, void and not enforceable. This Agreement is for the benefit of the parties hereto and is not intended to confer upon any other person any rights or remedies hereunder. The provisions of this Agreement shall apply to each division or subsidiary of the Agent and Monsanto and either the Agent or Monsanto may seek enforcement of the provisions of this Agreement on behalf of or with respect to a particular subsidiary or division without changing the rights and obligations of the parties under this Agreement as to other aspects of the Agent's or Monsanto's business. + +Section 11.7 Modification and Waiver. No conditions, usage of trade, course of dealing, or performance, understanding or agreement purporting to modify, vary, explain or supplement the terms or conditions of the Agreement and no amendment to or modification of this Agreement, and no waiver of any provision hereof, shall be effective unless it is in writing and signed by each party hereto. No waiver by either Monsanto or the Agent, with respect to any default or breach or of any right or remedy, and no course of dealing shall be deemed to constitute a continuing waiver of any other breach or default or of any other right or remedy, unless such waiver be expressed in writing signed by the party to be bound. + +(a) The parties may, from time to time, enter into Commissionaire and Distributorship Agreements ("Commissionaire Agreements") in order to implement this Agreement on a local basis and/or to comply with local legal requirements and, unless a contrary intent is expressly set forth in the Commissionaire Agreements, the terms of the Commissionaire Agreements shall in no way modify, amend, replace or supersede any terms of this Agreement. The parties agree that Section 11.12(b) (but not Section 11.12(a)) of this Agreement shall apply to any dispute arising out of any such Commissionaire Agreements. + +Section 11.8 Assignment. + +(a) This Agreement and the various rights and obligations arising hereunder shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, legal representatives, successors, and permitted assigns. Except as set forth in this Section 11.8 or Section 2.3, and except for a Change of Control under Section 10.4(b)(7) that does not provide Monsanto termination rights under this Agreement, neither this Agreement nor any of the rights, interests, or obligations hereunder shall be transferred, delegated, or assigned by a party (by operation of law or otherwise) without the prior written consent of the other party. + +(b) Notwithstanding the foregoing: + +(1) Monsanto shall have the right to transfer and assign its rights, interests and obligations hereunder to any of its Affiliates; provided, that Monsanto shall remain liable for the performance of its obligations hereunder, and provided, further, that any such Affiliate shall be subject to the provisions of this Agreement as if it were the original party hereto, including, without limitation, this Section 11.8; + +(2) Subject to Agent's rights set forth in Section 10.6, Monsanto shall have the right to transfer and assign all or a portion of its rights, interests and obligations hereunder to a Person that acquires all or a portion of Monsanto's business related to the Lawn and Garden + +56 + + + + + +Market (whether by sale or transfer of equity interests or assets, merger or otherwise); provided, that any such assignee shall be subject to the provisions of this Agreement as if it were the original party hereto, including, without limitation, this Section 11.8; + +(3) the Agent shall have the right to transfer and assign its rights, interests and obligations hereunder to any of its Affiliates; provided, that the Agent shall remain liable for the performance of its obligations hereunder, and provided, further, that any such Affiliate shall be subject to the provisions of this Agreement as if it were the original party hereto, including, without limitation, this Section 11.8; and + +(4) the Agent shall be entitled to transfer and assign its rights, interests and obligations hereunder and under the License Agreement with respect to the Included Markets; provided, that (A), the Agent may only make one (1) assignment pursuant to this Section 11.8(b)(4) with respect to the North America Territories and one (1) assignment pursuant to this Section 11.8(b)(4) with respect to any Other Included Markets, (B) the Agent determines in its reasonable commercial opinion that the assignee of such rights pursuant to this Section 11.8(b)(4) can and will fully perform the duties and obligations under the License Agreement and with respect to the Roundup L&G Business in such Included Markets as specified in the License Agreement and this Agreement and (C) that any such assignee shall be subject to the provisions of the License Agreement and this Agreement as if it were an original party to each agreement. + +(c) Notwithstanding anything in this Agreement to the contrary, the Agent may not transfer or assign any rights, interests or obligations (i) under this Agreement to any Restricted Party or (ii) that are provided pursuant to Sections 10.5(d) or 10.6 of this Agreement. + +(d) For the avoidance of doubt, in no event shall this Agreement be transferred, delegated, or assigned by a party (by operation of law, Change of Control, or otherwise) to a third party unless the applicable portions of the License Agreement are also transferred to such third party. Any transfer or assignment not permitted by this Section 11.8 shall be null and void. + +Section 11.9 Notices. All notices and other communications hereunder shall be in writing and shall be deemed given on the same business day if delivered personally or sent by telefax with confirmation of receipt, on the next business day if sent by overnight courier, or on the earlier of actual receipt as shown on the registered receipt or five business days after mailing if mailed by registered or certified mail (return receipt requested) to the parties at the addresses set forth below (or at such other address for a party as shall be specified by like notice): + +57 + + + + + +If to the Agent, to: The Scotts Company LLC 14111 Scottslawn Road Marysville, OH 43041 Attn: President Telephone: (937) 644-0011 Facsimile No.: (937) 644-7568 + +with a copy to The Scotts Company LLC 14111 Scottslawn Road Marysville, OH 43041 Attn: General Counsel Telephone: (937) 644-0011 Facsimile: (937) 644-7568 + +If to Monsanto, to: Monsanto Company 800 North Lindbergh Boulevard St. Louis, MO 63167 Attn: Kerry Preete Telephone: (314) 694-1000 Facsimile: (314) 694-7030 + +with a copy to Monsanto Company 800 North Lindbergh Boulevard St. Louis, Missouri 63167 Attn: Martin Kerckhoff Telephone: (314) 694-1536 Facsimile: (314) 694-9009 + +If any notice required or permitted hereunder is to be given a fixed amount of time before a specified event, such notice may be given any time before such fixed amount of time (e.g., a notice to be given 30 days prior to an event may be given at any time longer than 30 days prior to such event). + +Section 11.10 Severability. If any provision of this Agreement is determined to be invalid or unenforceable, in whole or in part, under a judgment, Law or statute now or hereafter in effect, the remainder of this Agreement shall not thereby be impaired or affected. + +Section 11.11 Equal Opportunity. To the extent applicable to this Agreement, Monsanto and the Agent shall each comply with the following clauses contained in the Code of Federal Regulations and incorporated herein by reference: 48 C.F.R. §52.203-6 (Subcontractor Sales to Government); 48 C.F.R. §52.219-8, 52.219-9 (Utilization of Small and Small Disadvantaged Business Concerns); 48 C.F.R. §52.219-13 (Utilization of Women-Owned Business Concerns); 48 C.F.R. §52.222-26 (Equal Opportunity); 48 C.F.R. §52.222-35 (Disabled and Vietnam Era Veterans); 48 C.F.R. §52.222-36 (Handicapped Workers); 48 C.F.R. §52.223-2 (Clean Air and Water); and 48 C.F.R. §52.223-3 (Hazardous Material Identification and Material Safety Data). Unless previously provided, if the value of this Agreement exceeds $10,000, the Agent shall provide a Certificate of Nonsegregated Facilities to Monsanto. Furthermore, Monsanto and the Agent shall each comply with the Immigration Reform and Control Act of 1986 and all rules and regulations issued thereunder. + +58 + + + + + +Each party hereby certifies, agrees and covenants that none of its employees or employees of its subcontractors who perform work under this Agreement is or shall be unauthorized aliens as defined in the Immigration Reform and Control Act of 1986, and each party shall defend, indemnify and hold the other party harmless from any and all liability incurred by or sought to be imposed on the other party as a result of the first party's failure to comply with the certification, agreement and covenant made by such party in this Section. + +Section 11.12 Governing Law. + +(a) The validity, interpretation and performance of this Agreement and any dispute connected with this Agreement will be governed by and determined in accordance with the statutory, regulatory and decisional law of the State of Delaware (exclusive of such state's choice of laws or conflicts of laws rules) and, to the extent applicable, the federal statutory, regulatory and decisional law of the United States. + +(b) Any suit, action or proceeding against any party hereto with respect to the subject matter of this Agreement, or any judgment entered by any court in respect thereof, must be brought or entered in the United States District Court for the District of Delaware, and each such party hereby irrevocably submits to the jurisdiction of such court for the purpose of any such suit, action, proceeding or judgment. If such court does not have jurisdiction over the subject matter of such proceeding or, if such jurisdiction is not available, then such action or proceeding against any party hereto shall be brought or entered in the Court of Chancery of the State of Delaware, County of New Castle, and each party hereby irrevocably submits to the jurisdiction of such court for the purpose of any such suit, action, proceeding or judgment. Each party hereto hereby irrevocably waives any objection which either of them may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement brought as provided in this subsection, and hereby further irrevocably waives any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. To the extent each party hereto has or hereafter may acquire any immunity from jurisdiction of any court or from legal process with respect to itself or its property, each party hereto hereby irrevocably waives such immunity with respect to its obligations under this subsection. Except as otherwise provided herein, the parties hereto agree that exclusive jurisdiction of all disputes, suits, actions or proceedings between the parties hereto with respect to the subject matter of this Agreement lies in the United States District Court for Delaware, or the Court of Chancery of the State of Delaware, County of new Castle, as hereinabove provided. The Agent hereby irrevocably appoints CT Corporation, having an address at 1209 Orange Street, Wilmington, Delaware 19801 and Monsanto hereby irrevocably appoints Corporation Service Corporation, having an address at 2711 Centerville Rd, Suite 400, Wilmington, Delaware 19808, as its agent to receive on behalf of each such party and its respective properties, service of copies of any summons and complaint and any other pleadings which may be served in any such action or proceedings. Service by mailing (by certified mail, return receipt requested) or delivering a copy of such process to a party in care of its agent for service of process as aforesaid shall be deemed good and sufficient service thereof, and each party hereby irrevocably authorizes and directs its respective agent for service of process to accept such service on its behalf. + +59 + + + + + +Section 11.13 Public Announcements. No public announcement may be made by any person with regard to the transactions contemplated by this Agreement without the prior consent of the Agent and Monsanto, provided that either party may make such disclosure if advised by counsel that it is required to do so by applicable law or regulation of any governmental agency or stock exchange upon which securities of such party are registered. The Agent and Monsanto will discuss any public announcements or disclosures concerning the transactions contemplated by this Agreement with the other parties prior to making such announcements or disclosures. + +Section 11.14 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which taken together shall be constitute one and the same agreement. + +[signature page to follow] + +60 + + + + + +IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized representatives as of the day and year first above mentioned. + +THE MONSANTO COMPANY By: /s/ KERRY PREETE Name: Kerry Preete Title: EVP and Chief Strategy Officer + +THE SCOTTS COMPANY LLC By: /s/ RANDY COLEMAN Name: Randy Coleman Title: EVP and CFO + +61 + + + + + +EXHIBIT D + +PERMITTED PRODUCTS + +United States + +GroundClear, including all sizes, formulations and SKUs, present and future, within the entire GroundClear product line, regardless of package size, label, or marketing + +Ortho Max Poison Ivy & Tough Brush Killer, including all sizes, formulations and SKUs, present and future, within the entire product line, regardless of package size, label, or marketing + +62 + + + + + +SCHEDULE 1.1(a) + +ACTIVATED INCLUDED MARKETS + +The United States of America + +Canada + +Puerto Rico + +Mexico + +Provided, that with respect to all matters related to Roundup 365, only the United States of America + + + + + +SCHEDULE 1.1(b) + +ROUNDUP PRODUCTS + + + +United States, Mexico and Puerto Rico Formulation Size + +Roundup Ready-to-Use Products 2% glyphosate or less 2 gal or less Roundup Concentrated Products 18% - 41% glyphosate 1 gal or less + +Canada Formulation Size Roundup Ready-to-Use 2% Glyphosate or less 2 liter or less Roundup Concentrate 18% - 41% Glyphosate 2 liter or less EcoSense Path Clear Ready-to-Use x% or less 2 liter or less EcoSense Path Clear Concentrate x% or less 2 liter or less + + + + + +SCHEDULE 2.2(a) + +ILLUSTRATIVE EXAMPLE ANNUAL BUSINESS PLAN TEMPLATE + +1) Mission Statement and Explanation: Answers questions: What business are we in? Why does the business exist? + +2) Category Definition/Growth Trend: Also need to address related categories and their potential interaction with the target category + +a) Assessment of growth potential + +b) Competitor evaluation/assessment of threat + +3) Business Review: Summary of a process that will occur in each preceding January + +a) Critical learning from prior year + +b) Key Implications from learning: Arranged by key functional area + +4) Brand Positioning: + +a) Consumer Target: Demographics, Psychographics, use Segmentation + +b) Key feature(s), Attribute(s) and Benefits delivered (for brand and sub-brands) + +c) Brand Character/Imagery: Describe the personification of the brand/sub-brands + +i) This section should also specifically address the degree to which the proposed positioning consistent with the Brand's historical image + +5) Key Business Goals + +a) Financial: Historical trend and three year projections of Equivalent Case Volume, Net Sales, EBIT and ACM + +b) Competitive: + +i) Market Share Goal and trend + +ii) Advertising Share of Voice Goal and trend + +c) Consumer: Critical behavioral and attitudinal measures that describe the development of the Brand which could include: + +i) Penetration + +ii) Unaided awareness + + + + + +iii) Annual usage + +iv) Seasonal usage + +d) Customer: + +i) % ACV Distribution by Channel + +ii) Fill Rates by Top 10 customers (with detailed definition of what constitutes an on-time shipment) + +iii) Display achievement + +iv) Other measurable customer satisfaction measures + +6) Major Strategies to achieve Key Goals (some examples include...) + +a) Product Line: What products/drive groups/lines to focus on + +b) Significant new product launches + +c) Private Label at a Key Account(s) + +d) Marketing Support focus: Example would be a shift from advertising to promotion + +e) New Consumer Uses: Extended use campaign, new forms + +f) Geographic focus including a new regional/market emphasis. CDI/BDI analysis + +g) Seasonal focus including new emphasis if relevant. Weekly seasonality by region and drive group/item. + +h) Channel/Customer including new/alternative channels if relevant + +i) Operational strategies to address quality, capacity, cost position, service, technology application, etc., including fill rates, inventory levels and turns + +j) Acquisition/divestiture strategies to improve market position + +7) Functional Operating Plans: This is a lengthy section that lays out a detailed annual operating plan for each functional area in the business (including rationale where appropriate) and that pays particular attention to changes in that plan from the prior year's plans and results. Each section will contain a detailed budget with direct and assigned expenses shown. + +a) General Management: Description of Business Unit Management team and planned + +costs + + + + + +i) Performance standards for all employees + +ii) Description of employee performance incentives and link to performance standards + +b) Marketing: + +i) Organization Plan + +ii) Spending allocation: Total spending by marketing support category including working and non-working media, consumer promotion, public relations, market research, etc. + +iii) Advertising: Preliminary media plan including spending trends, creative strategy and discussion of any planned/contemplated changes to that strategy. + +iv) Consumer Promotion: Promotion objectives, key plan elements and payout calculations + +v) POP Plan: Focus on Key changes versus prior year plan + +vi) Pricing: To include trends and competitive benchmarks + +vii) Packaging - graphic and physical: Changes planned along with specific costs, implementation timing and risk factors + +viii) Market Research plan: List all studies, cost estimate and rationale for each, including tracking + +ix) Public Relations + +x) Test plans (applies to all of above) + +c) Sales: + +i) Organization Plan + +ii) Top 5 Account Plans + +(i) Program changes anticipated + +(ii) Planned Net Sales trend by drive group/item (with historical trend) + +(iii) Profitability analysis + +(iv) Category Management plans + +iii) Five year sales goal + + + + + +iv) Private Label/control brand opportunities + +v) Headquarters Sales Presentation plan with a focus on what the key messages are and discussion of any unique methods of communication to customers + +vi) Retail Merchandising Support including planned in-house, distributor and contracted merchandising services. Focus on in-store merchandising and display techniques as well as pre-season store set plans + +(i) Share of shelf + +(ii) Share of off-shelf + +vii) Other selling services plans as appropriate + +viii) Product Knowledge Plan including principle target(s) and vehicles + +d) Operations: + +i) Organization Plan + +ii) Key Manufacturing initiatives such as: Cost savings, capacity planning, make/buy analyses, etc. + +iii) Distribution/Warehousing Plan + +iv) Inventory plan by month (versus prior year) that balances the need for high fill rates with a product utilization of working capital. Targets to be included in plan. + +v) Purchasing: Including Key supplier relationship development + +vi) Quality: Measurement and delivery against objectives from balanced scorecard + +vii) Capital Plan with capital expenditure detail + +e) Research & Development: + +i) Organization/Staffing Plan + +ii) Priority projects and innovation pipeline - new product portfolio review + +iii) Innovation launch timeline + +iv) Product specifications and planned changes + +v) Pioneering Research + +f) Customer Service: + + + + + +i) Organization Plan + +ii) Special Programs such as telemarketing + +iii) Discussion of and key changes to order taking, order processing invoicing, collection, reconciliation (to original PO and program) procedures + +g) Consumer Service: + +i) Organization plan including a discussion of outscored versus in-house services + +ii) Call volume and measurement of answering efficiency and effectiveness + +iii) Plan for communicating to marketing and operations any significant consumer complaints + +8) Detailed Financials - Prior Year, Current Year, Future Year + +a) Income Statement (annual and monthly), cash flow and balance sheet + +b) Net Sales and margins by key drive group/item, and including product mix analysis + +c) Selling and Marketing Expenses by key line item + +d) Assignment of Shared Services: This section will discuss the agreed upon allocation + +methodology for shared services to their respective Business Unit statements and highlights any proposed changes to that methodology + +e) Anticipated changes form prior year + +f) Financial Metrics + +i) Invoice accuracy + +ii) Days Sales Outstanding (DSO) + +iii) Obsolete inventory charge + +iv) Bad debt allowance + +v) Netbacks, MAT and COGS detail prior, current and next year + +9) Approved amendments: This section will show any amendments approved by senior management (or the Steering Committee) + +a) Includes spending at levels above those established in the annual business plan. + + + + + +SCHEDULE 3.2(c) + +FORM OF RECONCILIATION STATEMENT + + + + + +Schedule 3.3(c) Allocations Monsanto and Scotts Exclusive Agency and Marketing Agreement for Roundup Schedule 3.3(c) Income Statement Definitions and Allocation Methods 1 of 10 + +The Determination/Allocation Method for the Revenue/Expense Categories set forth on this Schedule 3.3(c) will be reviewed and approved through the Annual Business Plan + + Anticipated Source + +Revenue/Expense Category Definition Determination/Allocation Method Roundup SMG MTC + +Gross sales Gross revenues for all sales of Roundup L&G products in defined markets Direct; minor allocations as necessary; default based on % of gross sales X + + Markdowns & allowances Discounts or other allowances provided to customers as reductions of gross sales same as gross sales X + + Product returns Any product returns and related allowances provided customers for previously billed gross sales + +same as gross sales X + + Trade Deductions from gross sales + + Cash discounts Any early payment discounts offered to customers Direct; minor allocations as necessary; default based on % of gross sales X + + MDF Marketing Development Funds - display and merchandising allowances, volume discounts, and any other incentives provided to customers for the purpose of promoting Roundup sales + +Actual; default based on % of gross sales to specific customer X + + Merchandising In store product display, housekeeping and general store level relationship management Actual; default based on % of gross sales to specific customer + + + +X + + Cost to serve Discount to reduced invoiced sales depending on the customer's delivery method. Plant and Mixing Warehouse collection offer the highest discount and direct-to-store shipments offer the lowest discount.Services include warehousing and handling, and product distribution and logistics. + +For distribution and warehousing activities, if allocations are necessary, split will be based on a reasonable driver (e.g. cubic feet or hundred weight) shipped and stored. + +X X + + Other Sales Program Other programs directed at retailers to increase product movement Actual; default based on % of sales attributable to specific program X X + + Net Sales Gross sales less trade, as defined + + Product Costs Direct materials and supplies, plus direct and indirect costs of producing finished goods to be sold + +Based on standard costs as defined in formulation agreement X X + + + + + + + +Schedule 3.3(c) Allocations Monsanto and Scotts Exclusive Agency and Marketing Agreement for Roundup Schedule 3.3(c) Income Statement Definitions and Allocation Methods 2 of 10 + +The Determination/Allocation Method for the Revenue/Expense Categories set forth on this Schedule 3.3(c) will be reviewed and approved through the Annual Business Plan + + Anticipated Source + +Revenue/Expense Category Definition Determination/Allocation Method Roundup SMG MTC + +Non-Standards Costs associated with product production not included in standard costs or variances from established standard costs + + Purchasing Functional area responsible for negotiating prices and procuring production materials, and negotiating agreements with toll manufacturers + +Based on management's assessment of % of time spent on Roundup activities as agreed upon in the Annual Business Plan + + + +X + + Quality Functional area responsible for establishing, monitoring and enforcing product quality standards + +Based on management's assessment of % of time spent on Roundup activities as agreed upon in the Annual Business Plan + + + +X + + Manufacturing Functional area responsible for managing arrangements with toll manufacturers Based on management's assessment of % of time spent on Roundup activities as agreed upon in the Annual Business Plan + + + +X + + Packaging Functional area responsible for engineering aspects of package design and development. Group works closely with marketing and production management + +Based on management's assessment of % of time spent on Roundup activities as agreed upon in the Annual Business Plans + + + +X + + Planning & logistics Functional area responsible for product demand and distribution planning. Group works closely with marketing, sales, manufacturing and distribution management in developing demand forecasts, and production and product deployment plans + +Based on management's assessment of % of time spent on Roundup activities as agreed upon in the Annual Business Plan + + + +X + + Freight Costs associated with storing and transporting products Direct; allocations based on a reasonable driver (e.g. cubic feet or hundred weight) shipped and stored. + +X X + + Warehousing Costs directly incurred for handling and warehousing of finished goods inventory. When warehousing costs are not directly assigned by product, they are allocated based on percent of Roundup pounds within the warehouse. At sites where storage or handling costs are given a variable rate, they are assigned directly to Roundup skus. + + + +X + + + + + + + +Schedule 3.3(c) Allocations Monsanto and Scotts Exclusive Agency and Marketing Agreement for Roundup Schedule 3.3(c) Income Statement Definitions and Allocation Methods 3 of 10 + +The Determination/Allocation Method for the Revenue/Expense Categories set forth on this Schedule 3.3(c) will be reviewed and approved through the Annual Business Plan + + Anticipated Source + +Revenue/Expense Category Definition Determination/Allocation Method Roundup SMG MTC + +Product liability Insurance and direct costs associated with product liability1 Direct, based on claims activity. X X X + +Poison Tax Taxes imposed by various governmental bodies for specific substances Actual; default based on % of sales X + + Defective Goods Costs incurred related to mitigating defective goods. Costs include the finished goods value and all costs related with disposing defective products + +Actual; default based on % of sales X X + + Inventory tax Property and other taxes associated with holding inventories Actual; default based on cases produced X + + Stud Pallets Costs associated with retailer special pellet requests, not otherwise included in standard costs + +Based on cases produced, including production activity at toll manufacturers + +X X + + Inventory write-offs & other Reductions in carrying value and other write-offs associated with slow-moving, and excess and obsolete inventory + +Actual X + + Rebates Volume and other rebates provided by vendors associated with raw and packaging material purchases + +Actual; default based on % of purchases for specific material for Roundup + +X + + Ft. Madison and Pearl yield & production variances Differences between actual and standard costs of production at the Ft. Madison and Pearl facilities + +Based on cases produced at the facilities; subject to terms of the Formulation Agreement between Monsanto and the Agent + +X X + + Toller variances Differences between actual and standard costs of products produced at toll manufacturers Direct; default based on % of Roundup cases produced at specific toll manufacturer + +X X + + Price variances Differences between actual and standard costs of raw and packaging materials acquired for production + +Direct; default based on % of Roundup purchases related to price variance drivers + +X X + + + +"direct costs" refers to the costs related to product replacement, product recall, product rework, etc., and does not include (i) indemnification paid under Section 9 of this Agreement, or (ii) costs arising from any third party claim, action, suit, inquiry, proceeding, notice of violation or investigation, whether written or oral, formal or informal, or any other arbitration, mediation or similar proceeding, whether public or private, judicial or extrajudicial. + + + + + + + + + +Schedule 3.3(c) Allocations Monsanto and Scotts Exclusive Agency and Marketing Agreement for Roundup Schedule 3.3(c) Income Statement Definitions and Allocation Methods 4 of 10 + +The Determination/Allocation Method for the Revenue/Expense Categories set forth on this Schedule 3.3(c) will be reviewed and approved through the Annual Business Plan + + Anticipated Source + +Revenue/Expense Category Definition Determination/Allocation Method Roundup SMG MTC + +Gross Profit Net sales less product and non-standard cost of good sold + + MAT-Marketing Functional areas responsible for creating brand image, developing brand awareness strategies and promotions. Also includes all sales activities performed by business unit personnel. + + Direct Marketing Marketing activities and associated expenses which can be directly traced to Roundup + + Advertising Includes network, spot and cable TV, radio, print media, advertising production costs, and advertising agency fees + +Actual; default based on % of direct media spending X + + Public relations Includes expenses related to public relations (indirect advertising) and related agency fees Actual X + + Consumer promotion Includes consumer directed rebates, in-stores promotional activities and give-aways, and point-of-purchase materials + +Actual X + + Trade promotion Any trade directed promotions (not already included in MDF), including related agency fees Actual X + + Brand specific market research Market research directed toward the Roundup brand Actual X + + Brand specific marketing management Primarily personnel and related support costs (salaries, incentives, fringes, travel & entertainment, computers, communications, and space & supplies) of marketing personnel dedicated to L&G Roundup + +Actual X X X + +Allocated marketing Marketing activities managed on a shared services basis + + + + + + + +Schedule 3.3(c) Allocations Monsanto and Scotts Exclusive Agency and Marketing Agreement for Roundup Schedule 3.3(c) Income Statement Definitions and Allocation Methods 5 of 10 + +The Determination/Allocation Method for the Revenue/Expense Categories set forth on this Schedule 3.3(c) will be reviewed and approved through the Annual Business Plan + + Anticipated Source + +Revenue/Expense Category Definition Determination/Allocation Method Roundup SMG MTC + +Marketing management Primarily personnel and related support costs (salaries, incentives, fringes, relocation, travel & entertainment, computers, communications, and space & supplies) of the marketing management group overseeing L&G Roundup and related products + +Based on management's assessment of % of time of general marketing management group spend on Roundup activities as agreed upon in the Annual Business Plan + + + +X + + Marketing support functions Functions include innovation, market research and creative services. Principally personnel costs (salaries, incentives, fringes, travel & entertainment, computers, communications, and space & supplies) of the marketing support functions + +Based on management's assessment of % of time marketing support function groups spend on Roundup activities as agreed upon in the Annual Business Plan + + + +X + + Other marketing expenses All other marketing related expenses, excluding advertising, promotions and personnel costs + + Innovation projects Consulting, materials and other non-personnel related costs associated with innovation projects Direct; default based on overall % of innovation group activities directed toward Roundup + +X X X + +Package design Agency fees, supplies and materials, and other non-personnel related costs associated with package design + +Direct; default based on overall % of creative service group activities directed toward Roundup + +X X + + Market research services Fees and other non-personnel costs associated with non-brand specific market research (POS data, usage and attitudes studies, etc) + +Direct; default based on overall % of market research group activities directed toward Roundup + +X X + + Sales & promotional literature Non-personnel costs associated with developing, publishing and disseminating sales materials and other non-POP related promotional literature + +Direct; default based on overall % of total sales & promotional space employed for Roundup + +X X + + Consumer services Costs related to handling consumer inquiries. Function maybe performed by Scotts personnel or outsourced. In handled internally costs will include personnel related expenses, communications expenses (toll-free numbers and internet), and other costs necessary to maintain this function + +Direct; default based on overall % of consumer service activities directed toward Roundup + +X X + + + + + + + +Schedule 3.3(c) Allocations Monsanto and Scotts Exclusive Agency and Marketing Agreement for Roundup Schedule 3.3(c) Income Statement Definitions and Allocation Methods 6 of 10 + +The Determination/Allocation Method for the Revenue/Expense Categories set forth on this Schedule 3.3(c) will be reviewed and approved through the Annual Business Plan + + Anticipated Source + +Revenue/Expense Category Definition Determination/Allocation Method Roundup SMG MTC + +Consumer guarantee If offered, costs associated with guaranteeing product performance to consumers Direct X X + + Sales management Primarily personnel and related support costs (salaries, incentives, fringes, relocation, travel & entertainment, computers, communications, and space & supplies) of the sales management group + +Based on weighting of factors including selling, display servicing and shelf work. If shared service arrangements change, allocation percentages will be re-established based on then current facts and circumstances. + + + +X + + Field sales/merchandisers Primarily personnel and related support costs (salaries, incentives, fringes, travel & entertainment, computers, communications, and space & supplies) of the fields sales force + +Based on weighting of factors including selling, display servicing and shelf work. If shared service arrangements change, allocation percentages will be re-established based on then current facts and circumstances. + + + +X + + Category management Primarily personnel and related support costs (salaries, incentives, fringes, travel & entertainment, computers, communications, and space & supplies) of the teams assigned to work closely with specific retailers (e.g. Home Depot, Wal*Mart, Lowe's, , etc) to assist in the management of their lawn and garden operations. + +Based on weighting of factors taking into consideration the category management activities at each retailer or group which these functions are performed. If shared service arrangements change, allocation percentages will be re-established based on then current facts and circumstances. + +X + + Customer Service/OTC Principally personnel and related support costs (salaries, incentives, fringes, travel & entertainment, computers, communications, and space & supplies) related to customer service (order-to-cash) function. Scotts may include some of these functions (credit, cash application, collections and claims management) as a Finance function + +Based on management's assessment of % of time support function groups spend on Roundup activities as agreed upon in the Annual Business Plan + + + +X + + MAT-Administration Personnel and related support costs (salaries, incentives, fringes, travel & entertainment, computers, communications, and space & supplies) of the general and administrative functions supporting the business unit, part of whose responsibility includes managing the L&G Roundup brand. Also includes other general and administrative support costs necessary to run the business unit, not otherwise assigned. + + + + + + + +Schedule 3.3(c) Allocations Monsanto and Scotts Exclusive Agency and Marketing Agreement for Roundup Schedule 3.3(c) Income Statement Definitions and Allocation Methods 7 of 10 + +The Determination/Allocation Method for the Revenue/Expense Categories set forth on this Schedule 3.3(c) will be reviewed and approved through the Annual Business Plan + + Anticipated Source + +Revenue/Expense Category Definition Determination/Allocation Method Roundup SMG MTC + +SVP and general management Primarily personnel and related support costs (salaries, incentives, fringes, travel & entertainment, computers, communications, and space & supplies) of the business unit general management group. Also includes general costs of operating the business unit not otherwise assigned or classified + +Direct for Roundup assigned employees, including reasonable charges for fringe benefits and related support costs. + +Scotts costs will be allocated based on agreed to % of actual business unit general support costs + +X X + +Information technology Personnel and related support costs (salaries, incentives, fringes, travel & entertainment, computers, communications, and space & supplies) of the information technology function supporting the business unit which manages the L&G Roundup brand. Costs also include depreciation and annual software license fees, hardware depreciation and rental, outside service fees and contracts and other non-personnel costs associated with operating the information technology group. + +Scotts costs will be allocated based on agreed to % of actual business unit information technology costs, net of developmental costs, but including service costs + + + +X + + Finance and accounting Personnel and related support costs (salaries, incentives, fringes, travel & entertainment, computers, communications, and space & supplies) of the finance and accounting functions supporting the business unit which manages the L&G Roundup brand. Functions include financial planning and analysis, general accounting, order-to-cash functions assigned to finance, accounts payable and payroll. Costs will also include internal and external audit Tees, specialized IT services, and corporate treasury, tax and controllership functions. + +Direct for Roundup seconded people, including reasonable charges for fringe benefits and related support costs. + +Scotts costs will be allocated based on agreed to % of actual business unit finance and accounting costs + + + +X X + +Human resources Personnel and related support costs (salaries, incentives, fringes, travel & entertainment, computers, communications, and space & supplies) of the human resource function supporting the business unit which manages the L&G Roundup brand. Costs also include external fees and consulting related to human resource matters not assigned to other functional areas. + +Scotts costs will be allocated based on agreed to % of headcount for actual business unit related human resource costs + + + +X + + + + + + + +Schedule 3.3(c) Allocations Monsanto and Scotts Exclusive Agency and Marketing Agreement for Roundup Schedule 3.3(c) Income Statement Definitions and Allocation Methods 8 of 10 + +The Determination/Allocation Method for the Revenue/Expense Categories set forth on this Schedule 3.3(c) will be reviewed and approved through the Annual Business Plan + + Anticipated Source + +Revenue/Expense Category Definition Determination/Allocation Method Roundup SMG MTC + +Site/administrative services Costs associated with procuring and maintaining general office space, not otherwise assigned to functional areas. Costs include lease/rental fees, heating and cooling, lighting, telecommunications, general and grounds maintenance, amortization of leasehold improvements, and depreciation of furniture and fixtures. Will also include personnel costs to manage these functions. + +Scotts costs will be allocated based on agreed to % of headcount for actual business unit site/administrative service costs + + + +X + + Legal services Primarily personnel and related support costs (salaries, incentives, fringes, travel & entertainment, computers, communications, and space & supplies) of the legal services group supporting the business unit which manages the L&G Roundup brand. Also includes other expenses of maintaining in-house legal counsel and any outside attorney's fees for work on the L&G Roundup brand. + +Direct for specific outside legal fees and services. Scotts costs will be allocated based on agreed to % of actual business unit general legal costs + +X X + + Scotts or Monsanto corporate services Any other Scotts or Monsanto corporate services used to support the L&G Roundup brand, not otherwise assigned to a functional area. + +If the business unit managing the L&G Roundup brand uses services supplied by either Scotts or Monsanto, either party has the right to bill for such services, provided the cost of such services was agreed to in advance by business unit management. Allocation of such services to the L&G Roundup business will be based on agreed to % of the actual costs billed to the business unit. + + + +X X + +MAT-Technical Functional areas responsible for product development, product registration and regulatory activities, field research and environmental matters. + + Product development Personnel and related support costs (salaries, incentives, fringes, travel & entertainment, computers, communications, and space & supplies) of the product development group supporting the business unit which manages the L&G Roundup brand. Also includes other expenses related to product development work on the L&G Roundup brand. + +Direct for Roundup assigned employees, including reasonable charges for fringe benefits and related support costs. Direct for specific outside services related to L&G Roundup product development. Scotts costs will be allocated based on agreed to % of actual business unit general product development costs. + +X X X + + + + + +Schedule 3.3(c) Allocations Monsanto and Scotts Exclusive Agency and Marketing Agreement for Roundup Schedule 3.3(c) Income Statement Definitions and Allocation Methods 9 of 10 + +The Determination/Allocation Method for the Revenue/Expense Categories set forth on this Schedule 3.3(c) will be reviewed and approved through the Annual Business Plan + + Anticipated Source + +Revenue/Expense Category Definition Determination/Allocation Method Roundup SMG MTC + +Registration and regulatory Product registration fees, tonnage taxes and other direct regulatory costs. Personnel and related support costs (salaries, incentives, fringes, travel & entertainment, computers, communications, and space & supplies) of the registrations and regulatory group supporting the business unit which manages the L&G Roundup brand. + +Direct for Roundup assigned employees, including reasonable charges for fringe benefits and related support costs. Direct for product registrations and regulatory activities specifically identified to L&G Roundup. Scotts costs will be allocated based on agreed to % of actual business unit general registration and regulatory costs. + +X X X + +Field research Personnel and related support costs (salaries, incentives, fringes, travel & entertainment, computers, communications, and space & supplies) of the field research group supporting the business unit which manages the L&G Roundup brand. Also includes other expenses related to field research activities on the L&G Roundup brand. + +Direct for field research activities specifically identified to L&G Roundup. Scotts costs will be allocated based on agreed to % of actual business unit general field research costs. + +X X + + Environmental engineering Personnel and related support costs (salaries, incentives, fringes, travel & entertainment, computers, communications, and space & supplies) of the environmental engineering group supporting the business unit which manages the L&G Roundup brand. Also includes other expenses related to environmental engineering activities on the L&G Roundup brand. + +Direct for environmental engineering activities specifically identified to L&G Roundup. Scotts costs will be allocated based on agreed to % of actual business unit general environmental engineering costs. + +X X + + Other (income) and expense Other (income) and expense items generally accepted as being included in determining operating income + + Foreign exchange Income statement impact of foreign exchange activities and translating the results of foreign operations into U.S. dollars. + +Direct X + + Royalty (income)/expense (Income) or expense associated with licensing the L&G Roundup name in the markets included in the agency agreement + +Direct X + + Fixed asset write-downs and disposals The net book value and associated costs related to fixed asset write-downs and disposals Direct X + + + + + + + +Schedule 3.3(c) Allocations Monsanto and Scotts Exclusive Agency and Marketing Agreement for Roundup Schedule 3.3(c) Income Statement Definitions and Allocation Methods 10 of 10 + +The Determination/Allocation Method for the Revenue/Expense Categories set forth on this Schedule 3.3(c) will be reviewed and approved through the Annual Business Plan + + Anticipated Source + +Revenue/Expense Category Definition Determination/Allocation Method Roundup SMG MTC + +Other Any other items reasonably included in determining EBITA/operating profit, not otherwise classified + +Direct X + + EBITA/Operation profit Earnings before interest, taxes and amortization. Excludes interest expense, income and franchise taxes, amortization of intangible property, agreed upon non-recurring items, and pre-agreement legal, environmental and other contingencies above the defined amount. + + + + + + + +SCHEDULE 4.2(a) + +STEERING COMMITTEE + +For the Agent: + +Michael Lukemire, President, Chief Operating Officer + +Randy Coleman, Executive Vice President, Chief Financial Officer + +For Monsanto: + +Mike Demarco, Strategy, Finance and Operations Lead + +Jim Guard, Global Lawn and Garden Lead + + + + + +SCHEDULE 6.11(A) + +ADDITIONAL ROUNDUP PRODUCTS + +Additional Roundup Products Included Markets + +Smith & HawkenTM Grass & Weed Killer (RTU formula: 18.75% Soybean Oil); and + +Whitney FarmsTM Weed & Grass Killer (RTU formula: 18.75% Soybean Oil). + +United States and its territories + + + + + +SCHEDULE 6.11(F) + +ADDITIONAL ROUNDUP PRODUCTS TRADEMARKS + +ADDITIONAL ROUNDUP PRODUCT MARK U.S. Application No. + + + +SMITH & HAWKEN SMITH & HAWKEN SMITH & HAWKEN & Design WHITNEY FARMS + +77/95 1348 77/578659 85/004995 77/927438 \ No newline at end of file diff --git a/full_contract_txt/MorganStanleyDirectLendingFund_20191119_10-12GA_EX-10.5_11898508_EX-10.5_Trademark License Agreement.txt b/full_contract_txt/MorganStanleyDirectLendingFund_20191119_10-12GA_EX-10.5_11898508_EX-10.5_Trademark License Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..62c6d98df98cc527c4b433df35f31873d6081294 --- /dev/null +++ b/full_contract_txt/MorganStanleyDirectLendingFund_20191119_10-12GA_EX-10.5_11898508_EX-10.5_Trademark License Agreement.txt @@ -0,0 +1,53 @@ +Exhibit 10.5 TRADEMARK LICENSE AGREEMENT This TRADEMARK LICENSE AGREEMENT (the "Agreement") is effective as of the [·] day of [·], 2019 ("Effective Date") between Morgan Stanley Investment Management Inc. ("Licensor"), and Morgan Stanley Direct Lending Fund, a Delaware corporation ("Licensee"). WHEREAS, Licensor is the owner of all rights to the trademark "Morgan Stanley" and the "Morgan Stanley" design (collectively, the "Brand"); WHEREAS, Licensee is a closed-end investment company that has elected to be treated as a business development company under the Investment Company Act of 1940, as amended (together with the rules promulgated thereunder) (the "Licensee Business"); WHEREAS, in connection with Licensee's public filings, requests for information from state and federal regulators, offering materials and advertising materials, and press releases, Licensee desires to state in such materials that investment advisory services are being provided by Licensor (or an affiliate thereof) to Licensee (collectively, the "Permitted Activity"); and WHEREAS, Licensor is willing to permit Licensee to use the Brand for the Permitted Activity, subject to the terms and conditions herein. NOW, THEREFORE, in consideration of the premises and the mutual promises and covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows: 1. Grant of Rights; Sublicensing. Section 1.1. License Grant. Subject to the terms and conditions herein, Licensor hereby grants to Licensee a non-exclusive, non- transferable, and (subject to Section 1.2 hereof) non-sublicensable license for the use of the Brand solely for the Permitted Activity. Section 1.2. Sublicensing. Licensee may sublicense its rights under Section 1.1 solely to a current or future wholly owned subsidiary of Licensee, and then only with the prior written consent of Licensor (which shall not be unreasonably withheld), provided that any such sublicense shall terminate automatically, with no need for written notice to the sublicensee, if (a) such entity ceases to be a wholly owned subsidiary of Licensee, (b) this Agreement terminates for any reason or (c) such sublicensee materially breaches its sublicense in a manner that harms the Brand and does not cure the same within 15 days after notice from Licensor or Licensee. Licensee shall notify Licensor promptly after becoming aware that any sublicensee has breached its sublicense and shall ensure that all sublicenses provide (i) for the foregoing termination rights of Licensor and (ii) obligations for sublicensee with respect to the Brand that are consistent with those of Licensee herein. Any act or omission by a sublicensee that would breach this Agreement if committed by Licensee shall constitute a breach of this Agreement by Licensee. 2. Ownership. Licensee acknowledges and agrees that, as between the parties, Licensor is the sole owner of all right, title and interest in and to the Brand. Licensee agrees not to do anything inconsistent with such ownership, including (i) filing to register any trademark or service mark containing the Brand or (ii) directly or indirectly challenging, contesting or otherwise + +Source: MORGAN STANLEY DIRECT LENDING FUND, 10-12G/A, 11/19/2019 + + + + + +disputing the validity, enforceability or Licensor's ownership of the Brand (and the associated goodwill), including without limitation, in any claim, allegation, action, demand, proceeding or suit ("Action") regarding enforcement of this Agreement or involving any third party. The parties intend that any and all goodwill in the Brand arising from Licensee's or any applicable sublicensees' Permitted Activity shall inure solely to the benefit of Licensor. Notwithstanding the foregoing, in the event that Licensee or any sublicensee is deemed to own any rights in the Brand, Licensee hereby irrevocably assigns (or shall cause such sublicensees to assign), without further consideration, such rights to Licensor together with all goodwill associated therewith. 3. Use of the Permitted Activity. Section 3.1. Quality Control. Licensee's Permitted Activity shall be in a manner consistent with Licensor's high standards of and reputation for quality, and in accordance with good trademark practice wherever any of the same are used. Licensee shall not take any action that could reasonably be expected to harm the Brand or the goodwill associated therewith. Licensee shall use with the Brand any applicable trademark notices as may be requested by Licensor or required under applicable laws, regulations, stock exchange and other rules ("Laws") and reputable industry practice. Section 3.2. Prior Written Approval. Prior to using the Brand in any manner, Licensee shall submit all proposed uses to Licensor for prior written approval. Section 3.3. Compliance with Laws. Licensee shall, at its sole expense, comply at all times with all applicable Laws and reputable industry practice pertaining to the Licensee Business and Permitted Activity. 4. Termination. Section 4.1. Term. The term of this Agreement commences on the Effective Date and continues in perpetuity, unless termination occurs pursuant to Sections 4.2 through 4.4. Section 4.2. Termination for Convenience. Licensor reserves the right to terminate this Agreement immediately upon written notice for any reason, including if the usage of the Brand is not in compliance with the standards and policies. Section 4.3. Termination for Breach. If either party materially breaches one or more of its obligations hereunder, the other party may terminate this Agreement, effective upon written notice, if the breaching party does not cure such breach within 15 days after written notice thereof (or any mutually agreed extension). Licensor may terminate this Agreement immediately, effective upon written notice, if (i) Licensee attempts to violate Section 8 or (ii) a sublicensee materially breaches its sublicense in a manner that harms the Brand, and (a) such sublicensee does not cure the same within 15 days after notice from Licensor or Licensee or (b) Licensee does not terminate such sublicense within 15 days after notice from Licensor. Section 4.4. Termination of Advisory Agreement. This Agreement shall terminate automatically without notice and immediately (a) if MS Capital Partners Adviser Inc. or another affiliate of Licensor is no longer acting as the investment adviser (any such entity, the "Advisor") to Licensee under the Investment Advisory Agreement, dated as of [·], 201[9] (as the same may 2 + +Source: MORGAN STANLEY DIRECT LENDING FUND, 10-12G/A, 11/19/2019 + + + + + +be amended, modified or otherwise restated, the "Investment Advisory Agreement"), or a similar agreement, or (b) the Advisor is no longer an affiliate of Licensor. Further, Licensor may terminate this Agreement, effective upon written notice, at any time after 30 days from the date that Licensee notifies Licensor that the Investment Advisory Agreement has terminated or is not being renewed. The term "affiliate" as used herein shall have the meaning given to such term in the Investment Advisory Agreement. Section 4.5. Effect of Termination; Survival. Upon termination of this Agreement for any reason, (a) Licensee shall immediately, except as required by applicable Law, (i) cease all use of the Permitted Activity; and (b) the parties shall cooperate so as to best preserve the value of the Brand. Section 2, this Section 4.5, and Sections 6.2, 6.3, 7 and 9 shall survive termination of this Agreement. 5. Infringement. Licensee shall notify Licensor promptly after it becomes aware of any actual or threatened infringement, imitation, dilution, misappropriation or other unauthorized use or conduct in derogation ("Infringement") of the Brand. Licensor shall have the sole right to bring any Action to remedy the foregoing, and Licensee shall cooperate with Licensor in same, at Licensor's expense. 6. Representations and Warranties; Limitations. Section 6.1. Each party represents and warrants to the other party that: (a) This Agreement is a legal, valid and binding obligation of the warranting party, enforceable against such party in accordance with its terms, subject to the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors' rights and remedies generally, and subject, as to enforceability, to the effect of general principles of equity (regardless of whether enforcement is considered in a proceeding at law or in equity); (b) The warranting party is not subject to any judgment, order, injunction, decree or award that would interfere with its performance of any of its obligations hereunder; and (c) The warranting party has full power and authority to enter into and perform its obligations under this Agreement in accordance with its terms. Section 6.2. EXCEPT AS EXPRESSLY SET FORTH IN SECTION 6.1, LICENSOR MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO THIS AGREEMENT AND THE BRAND, AND EXPRESSLY DISCLAIMS ALL SUCH REPRESENTATIONS AND WARRANTIES, INCLUDING ANY WITH RESPECT TO TITLE, NON-INFRINGEMENT, MERCHANTABILITY, VALUE, RELIABILITY OR FITNESS FOR USE. LICENSEE'S USE OF THE PERMITTED ACTIVITY IS SOLELY ON AN "AS-IS" BASIS. Section 6.3. EXCEPT WITH RESPECT TO LICENSEE'S INDEMNIFICATION OBLIGATIONS UNDER SECTION 7, NEITHER PARTY WILL BE LIABLE TO THE OTHER PARTY FOR SPECIAL, INDIRECT, CONSEQUENTIAL, EXEMPLARY, PUNITIVE OR INCIDENTAL DAMAGES (INCLUDING LOST PROFITS OR GOODWILL, BUSINESS 3 + +Source: MORGAN STANLEY DIRECT LENDING FUND, 10-12G/A, 11/19/2019 + + + + + +INTERRUPTION AND THE LIKE) RELATING TO THIS AGREEMENT, EVEN IF IT HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. 7. Indemnification. Section 7.1. Indemnity by Licensee. Licensee will defend at its expense, indemnify and hold harmless Licensor and its affiliates and its and their respective directors, officers, employees, shareholders, investors, agents and representatives from any losses, liabilities, obligations, damages, awards, settlements, judgments, fees, costs or expenses (including reasonable attorneys' fees and costs of suit) arising out of or relating to any third-party Action against any of them that arises out of or relates to (i) any breach by Licensee of this Agreement or its warranties, representations, covenants and undertakings hereunder, (ii) Licensee's operation of the Licensee Business or (iii) any claim that Licensee's use of the Brand, other than as explicitly authorized by this Agreement, Infringes the rights of a third party. Section 7.2. Indemnification Procedure. Licensor will promptly notify Licensee in writing of any indemnified claim and promptly as practicable tender its defense to Licensee. Any delay in such notice or tender will not relieve Licensee from its obligations to the extent it is not prejudiced thereby. Licensor will cooperate with Licensee at Licensee's expense in the defense of any indemnified claim. Licensee may not settle any indemnified claim without Licensor's prior written consent in Licensor's sole discretion. Licensor may participate in its defense of an indemnified claim with counsel of its own choice at its own expense. 8. Assignments. Licensee may not assign, transfer, pledge, mortgage or otherwise encumber this Agreement or its right to use the Brand (or assume this Agreement in bankruptcy), in whole or in part, without the prior written consent of Licensor in its sole discretion, except for an assignment outside of bankruptcy to a successor organization that is solely the result of a name change by Licensee. For the avoidance of doubt, a merger, change of control, reorganization or sale of all or substantially all of the stock of Licensee shall be deemed an "assignment" requiring the above consent, regardless of whether Licensee is the surviving entity or whether such transaction constitutes an assignment under applicable law. Licensee acknowledges that its identity is a material condition that induced Licensor to enter into this Agreement. Any attempted action in violation of the foregoing shall be null and void ab initio and of no force or effect, and shall result in immediate termination of this Agreement. In the event of a permitted assignment hereunder, this Agreement shall be binding upon and inure to the benefit of the parties and their respective permitted assigns. 9. Miscellaneous. Section 9.1. Notice. Any notices herein shall be deemed to have been duly given if (i) delivered or delivered by facsimile, when received, (ii) sent by U.S. Express Mail or recognized overnight courier, on the following business day or (iii) delivered by electronic mail, when received: 4 + +Source: MORGAN STANLEY DIRECT LENDING FUND, 10-12G/A, 11/19/2019 + + + + + +LICENSOR: Morgan Stanley Investment Management Inc. 1585 Broadway New York, NY 10036 Attention: [·] Facsimile: [·] Email: [·] + +LICENSEE: Morgan Stanley Direct Lending Fund 1585 Broadway New York, NY 10036 Attention: [·] Facsimile: [·] Email: [·] Section 9.2. Integration. This Agreement contains the entire agreement among the parties with respect to the subject matter hereof, and supersedes all prior and contemporaneous agreements and understandings (including, without limitation, any prior agreements between Licensee and Licensor), with respect thereto. Section 9.3. Amendments. Neither this Agreement, nor any terms hereof, may be amended except in an instrument in writing executed by the parties. Section 9.4. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. EACH OF THE PARTIES IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED IN NEW YORK CITY FOR THE PURPOSE OF ANY ACTION RELATING TO OR ARISING OUT OF THIS AGREEMENT. Section 9.5. Waiver of Jury Trial. EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT TO ANY ACTION RELATING TO OR ARISING OUT OF THIS AGREEMENT. LICENSEE AGREES THAT LICENSOR WOULD BE IRREPARABLY HARMED BY ANY BREACH OF THIS AGREEMENT BY LICENSEE THAT HARMS THE BRAND, AND THAT LICENSOR MAY (IN ADDITION TO ITS OTHER RIGHTS AND REMEDIES HEREIN) SEEK TEMPORARY, PRELIMINARY OR PERMANENT INJUNCTIVE RELIEF (INCLUDING SPECIFIC PERFORMANCE) TO ENJOIN OR PREVENT ANY SUCH BREACH, WITHOUT POSTING BOND OR OTHER SECURITY. Section 9.6. No Waiver; Cumulative Remedies. No failure or delay by a party to exercise any right hereunder, in whole or in part, shall operate as a waiver thereof. The parties' rights and remedies herein are cumulative and not exclusive of any other rights and remedies provided by applicable Law. Section 9.7. Costs and Expenses. Each party shall bear its own costs and expenses (including the fees and disbursements of counsel) incurred in connection with the negotiations and preparation of this Agreement. Section 9.8. Section Headings. The section headings in this Agreement are for convenience only and shall not affect its interpretation. This Agreement shall be construed as if it were drafted jointly by the parties. 5 + +Source: MORGAN STANLEY DIRECT LENDING FUND, 10-12G/A, 11/19/2019 + + + + + +Section 9.9. Counterparts. This Agreement may be executed in counterparts. PDF or facsimile signatures shall serve as originals to bind the parties to the Agreement. Section 9.10. Severability. Any provision of this Agreement that is held to be invalid or unenforceable shall not invalidate or render unenforceable any other provision hereof. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 6 + +Source: MORGAN STANLEY DIRECT LENDING FUND, 10-12G/A, 11/19/2019 + + + + + +IN WITNESS WHEREOF, each of the parties has executed this Agreement as of the date first written above. MORGAN STANLEY DIRECT LENDING FUND a Delaware corporation By: Name: Title: MORGAN STANLEY INVESTMENT MANAGEMENT INC. a Delaware corporation By: Name: Title: [Signature Page to Trademark License Agreement] + +Source: MORGAN STANLEY DIRECT LENDING FUND, 10-12G/A, 11/19/2019 \ No newline at end of file diff --git a/full_contract_txt/MphaseTechnologiesInc_20030911_10-K_EX-10.15_1560667_EX-10.15_Co-Branding Agreement.txt b/full_contract_txt/MphaseTechnologiesInc_20030911_10-K_EX-10.15_1560667_EX-10.15_Co-Branding Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..46cc5d5c5aec68a6e624644f4ae6fc7236602134 --- /dev/null +++ b/full_contract_txt/MphaseTechnologiesInc_20030911_10-K_EX-10.15_1560667_EX-10.15_Co-Branding Agreement.txt @@ -0,0 +1,103 @@ +EXHIBIT 10.15 + +CO-BRANDING AGREEMENT + +This Agreement is made this 21st day of January 2003 by and between Lucent Technologies Inc., a Delaware corporation having a principal place of business at 600 Mountain Avenue, Murray Hill, New Jersey 07974 ("Lucent") and mPhase Technologies Inc., a New Jersey corporation located at 587 Connecticut Avenue, Norwalk, Connecticut 068545 ("mPhase") (each individually, "a Party" and, collectively, "the Parties"}. + +WHEREAS, mPhase wishes to use the Lucent Technologies name and Logo and the slogan TECHNOLOGY BY LUCENT TECHNOLOGIES on printed circuit boards, product packaging and in printed marketing materials ("Approved Uses") in connection with its multi-access product (the "Goods") and Lucent wishes to permit mPhase to do so. + +NOW THEREFORE, the Parties, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, agree as follows: + +1. mPhase may apply only the exact logo shown on Schedule A of this Agreement (the "Lucent Co-Branding Logo"} in Approved Uses for mPhase's Goods. + +2. mPhase agrees to abide by the guidelines appearing on Schedule B of this Agreement specifying the dimensions, requirements and specifications, and the review process related to use of the Lucent Co-Branding Logo. mPhase understands that these guidelines may be updated from time to time and agrees to abide by those updates as well as the guidelines provided herein. + +3. In the event that mPhase's use of the Lucent Co-Branding Logo, in the sole judgment of Lucent, may adversely affect Lucent's rights to the mark shown on Schedule A or the marks and names LUCENT, LUCENT TECHNOLOGIES or LUCENT INNOVATION RING DESIGN, Lucent may upon written notification to mPhase, terminate this Agreement. + +4. mPhase agrees that it acquires no rights to the Lucent Co-Branding Logo nor to the marks LUCENT, LUCENT TECHNOLOGIES or LUCENT INNOVATION RING DESIGN, by its use and that any use of the Lucent Co-Branding Logo by mPhase inures to the benefit of Lucent. + +5. mPhase agrees not to adopt any designation which is confusingly similar to the Lucent Co-Branding Logo or Lucent's marks LUCENT, LUCENT TECHNOLOGIES or LUCENT INNOVATION RING DESIGN. Any attempt to do so shall be a breach of this Agreement and Lucent may terminate this Agreement without notice in the event of such a breach. + +6. This Agreement shall terminate in the event of a significant change in the management or ownership of mPhase or in the event mPhase is the subject of any bankruptcy proceedings. + +7. Lucent is generally aware of the current quality of mPhase's Goods. mPhase agrees to maintain the quality of its Goods associated with the Lucent Co-Branding Logo to a level of quality comparable to the current quality of their Goods. + +8. If Lucent determines that mPhase's Goods are no longer maintained at the current level of quality, Lucent shall so notify mPhase, in writing, and Lucent shall have the right to terminate this Agreement. + +9. mPhase agrees to allow Lucent to inspect the Approved Uses bearing the Lucent Co-Branding Logo, to ensure that those uses reviewed and approved pursuant to the procedure set forth in Schedule B continue to be in compliance with the terms of this Agreement. + +10. In the event that mPhase becomes aware of any unauthorized use of the Lucent Co-Branding Logo or other Lucent marks by third parties, mPhase agrees to promptly notify Lucent and to cooperate fully, at Lucent's expense, in any enforcement of Lucent's rights against such third + +Source: MPHASE TECHNOLOGIES INC, 10-K, 9/11/2003 + + + + + +parties. Nothing contained in this paragraph shall be construed to require Lucent to enforce any rights against third parties or to restrict Lucent's rights to license or consent to such third parties' use of the Lucent Co-Branding Logo or any other Lucent marks. + +11. The Term of this Agreement will commence on the date above, and shall continue for a term of one (1) year. mPhase shall have the right to annually renew this agreement for a period of one year upon each annual expiration with the written consent of Lucent, which written consent shall not be unreasonably withheld. Either party wishing to terminate the Agreement must give written notice to the other party at least thirty (30) days prior to the desired date of termination. + +12. Upon termination of this Agreement, mPhase shall immediately cease use of the Lucent Co-Branding Logo, provided, however, that mPhase shall have no obligation to remove such Co-Branding Logo from any Goods sold prior to the date of such termination. + +-2- + +13. Neither Party shall be liable to the other for special, incidental, or consequential damages, even if such Party has been advised of the possibility of such damages. + +14. This Agreement shall not be assigned by mPhase without the prior written consent of Lucent. + +15. The validity, construction and performance of this Agreement shall be governed by the laws of the State of New York. + +16. This Agreement, including the Schedules and Addenda hereto, constitutes the entire Agreement between the Parties concerning the subject matter hereof and supersedes all proposals, oral or written, all negotiations, conversations, and/or discussions between the Parties relating to this Agreement and all past courses of dealing or industry customs. + +IN WITNESS WHEREOF, the Parties by their duly authorized representatives, have executed this Agreement on the respective dates indicated below. + +Lucent Technologies Inc. mPhase, Inc. + +By: /s/ D. Laurence Padilla By: /s/ Ron Durando ----------------------- ---------------------- D. Laurence Padilla Ron Durando President - Chief Executive Officer Intellectual Property Business + +Date: 1/28/03 Date: 01/21/03 ----------------------- ---------------------- + +-3- + +Schedule A ---------- + +------------------ + +Technology By + +[graphic] Lucent Technologies + +------------------ + +-4- + +Source: MPHASE TECHNOLOGIES INC, 10-K, 9/11/2003 + + + + + +Schedule B ---------- + +Co-Branding Guidelines + +Control Specifications + +o Consistent with our guidelines, 'Bell Labs Innovations' from the Lucent Logo can never appear on co-branded offers. + +o The 2-logos of each company can never be combined to form a compositE logo or suggest the "two company's" are part of one company. + +o Our Logo must always maintain a staging of 1/2 the diameter of the Innovation Ring of clearspace. + +o The Lucent Logo may be reproduced in black or with the Innovation Ring in Lucent Red with black type. + +o The Lucent co-branding Art shown in Schedule A above may not be altered in any way from the form in which it is provided to mPhase by Lucent Technologies. + +o Since our mark is prominent, it is important that a form of each new or initial use of the Lucent Co-Branding Logo be reviewed individually prior to implementation. Although mPhase may receive Co-branding approval for one application, it has not been granted 'blanket use' of the Co-Branding Logo or the Lucent Marks on all other applications. + +o Samples of each new or initial use of the Lucent Co-Branding Logo should be sent to Corporate Identity, Lucent Technologies, Attn: Bob Cort, Room 3A 405, 600 Mountain Avenue, Murray Hill, NJ 07974-0636; and to Lucent Technologies Inc., Attn: Trademarks & Copyrights, Room 2F 181, 600 Mountain Avenue, Murray Hill, NJ 07974-0636 for approval prior to any use of the materials. + +-5- + +Source: MPHASE TECHNOLOGIES INC, 10-K, 9/11/2003 \ No newline at end of file diff --git a/full_contract_txt/MusclepharmCorp_20170208_10-KA_EX-10.38_9893581_EX-10.38_Co-Branding Agreement.txt b/full_contract_txt/MusclepharmCorp_20170208_10-KA_EX-10.38_9893581_EX-10.38_Co-Branding Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..3d29a68e96d7bb5e8983f9e5bcfa89a04ffc3059 --- /dev/null +++ b/full_contract_txt/MusclepharmCorp_20170208_10-KA_EX-10.38_9893581_EX-10.38_Co-Branding Agreement.txt @@ -0,0 +1,419 @@ +ENDORSEMENT LICENSING AND CO-BRANDING AGREEMENT This ENDORSEMENT LICENSING AND CO-BRANDING AGREEMENT is entered into on July 26, 2013 (the "Effective Date") by and between Marine MP, LLC ("Lender"), for services of Arnold Schwarzenegger ("Endorser"), and Fitness Publications, Inc. ("Fitness") (collectively, Lender, Endorser, and Fitness are referred to as the "AS Parties") and MusclePharm Corporation with its principal place of business in Denver, Colorado and its subsidiaries, (collectively, "MusclePharm" or the "Company"). RECITALS WHEREAS, the AS Parties have the rights necessary to license the use of the rights of publicity with respect to name, voice, approved signature, approved photographs, approved images, and approved likenesses of Arnold Schwarzenegger (the "Name and Appearance Rights") and the use of the Name and Appearance Rights as trademarks or service marks (the "Trademarks"); and WHEREAS, MusclePharm is engaged in the business of developing and marketing nutritional products for athletes and fitness enthusiasts, and WHEREAS, MusclePharm from time to time uses consumer, celebrity, and expert endorsements or testimonials to promote MusclePharm Products (as defined in Section 2(b) of this Agreement) in marketing and advertising materials, and WHEREAS, MusclePharm desires to develop, market, promote and sell in conjunction and in cooperation with the Endorser a unique Arnold Schwarzenegger customized product line approved by the Endorser initially comprised of between four to eight (4 to 8) products, subject to Section 2(b) below), that will be marketed and advertised under the Endorser's name and likeness, all subject to the Endorser's approval, as described in Section 12, (the "AS Product Line"); and WHEREAS, MusclePharm desires to engage Endorser, and Endorser desires to accept the engagement, as more fully described in this Agreement, whereby Endorser will lend his name, reputation, and appearance to (i) endorse and promote MusclePharm and its Products and (ii) to develop the AS Product Line and several related promotional giveaway items that will depict the Endorser's name and likeness solely in conjunction with the MusclePharm logo or images of the AS Product Line on the permitted promotional products (the "Promotional Products") set forth on Exhibit A attached hereto, as may be amended in writing by the parties hereto from time to time (collectively, the Promotional Products and the AS Product Line are referred to as the "Licensed Products"). NOW, THEREFORE, in consideration of the mutual promises and agreements set forth below, the parties agree as follows: + + + +Source: MUSCLEPHARM CORP, 10-K/A, 2/8/2017 + + + + + + + + 1. Term: (a) This Agreement shall have an Initial Term of three (3) years. The Term shall commence on July 23, 2013 and shall expire on July 22, 2016, unless otherwise terminated earlier pursuant to Section 9 of this Agreement. The period from July 23, 2013 to July 22, 2014 shall be referred to as the "First Contract Year". The period from July 23, 2014 to July 22, 2015 shall be referred to as the "Second Contract Year". The period from July 23, 2015 to July 22, 2016 shall be referred to as the "Third Contract Year". (b) In the event that MusclePharm shall achieve Net Sales (as defined below) of $20 million (the "First Renewal Threshold") in the aggregate during the Third Contract Year, then this Agreement shall automatically be renewed for an additional term of three (3) years (the "First Additional Term") on the same terms and conditions for the Initial Term except that: (i) no additional Stock Compensation (as defined below) shall be issued in connection with the renewal Term, (ii) the Cash Compensation for the First Additional Term shall be as set forth in Section 7 and Exhibit "C" Section (2) attached hereto, (iii) Endorser shall only be obligated to make two (2) Appearances in each Contract Year during the First Additional Term pursuant to Section 4(a)(ii) below and (iv) the marketing budget to promote the Licensed Products shall be $5.0 million during each Contract Year of the First Additional Term (subject to Section 12(b) of this Agreement). If this Agreement is renewed for the First Additional Term, then the First Additional Term shall commence on July 23, 2016, and the Agreement shall expire and terminate automatically without further notice on July 22, 2019. (c) In the event that MusclePharm shall achieve Net Sales of $50 million (the "Second Renewal Threshold") in the aggregate during the sixth Contract Year, then this Agreement shall automatically be renewed for an additional term of three (3) years (the "Second Additional Term") on the same terms and conditions for the initial Term except that: (i) no additional Stock Compensation (as defined below) shall be issued in connection with the renewal Term, (ii) the Cash Compensation for the renewal Term shall be as set forth in Section 7 and Exhibit "C" Section (3) attached hereto, (iii) Endorser shall only be obligated to make two (2) Appearances in each Contract Year during the Second Additional Term pursuant to Section 4(a)(ii) below and (iv) the marketing budget to promote the Licensed Products shall be $5.0 in each Contract Year of the Second Additional Term (subject to Section 12(b) of this Agreement). If this Agreement is renewed for the Second Additional Term, then the Second Additional Term shall commence on July 23, 2019 and the Agreement shall expire and terminate automatically without further notice on July 22, 2022. 2. Engagement: (a) MusclePharm hereby engages Endorser and Endorser promises and agrees to hold himself available to use, evaluate, advertise and promote certain MusclePharm Products, as may be reasonably requested by MusclePharm in accordance with the terms and conditions set forth herein on a world-wide basis. Endorser also agrees to the use on a world-wide basis (as specified pursuant to Section 6 below and subject to the terms and conditions of this Agreement), during the Term, of his Name and Appearance Rights to advertise and promote the business of MusclePharm, its Products, and the Licensed Products. + + + +Source: MUSCLEPHARM CORP, 10-K/A, 2/8/2017 + + + + + + + + (b) Products. As used in this Agreement, "Products" shall mean dietary supplements manufactured within the fifty states of the United States of America; provided, however, MusclePharm shall not produce during the Term (and any renewal Term, if any) any diet pills and/or sexual enhancement products; provided, further, that fat burning products, Shred Matrix and Live Shredded products and products that increase testosterone levels currently produced by MusclePharm as of the date hereof shall be part of the definition of Products for the purpose of this Agreement. (c) New Products. During the Term (including any renewal Term, if any), in the event that MusclePharm shall determine to develop and introduce a new Product into the market, MusclePharm shall provide the AS Parties with a sample of the name, design, marketing plan and an actual sample of such new Product (the "Sample") and the AS Parties shall have a right of first refusal (exercisable by written notice to MusclePharm within 15 days after receipt of the Sample) to include such new Product in the AS Product Line, it being understood that there shall initially be no less than four (4) Products at the start of the Term and thereafter no more than 8 (eight) Products in the AS Product Line without the mutual written agreement of the parties hereto. (d) Distribution Channels - Licensed Products. Subject to the terms and conditions herein (including the Exhibits), the license to MusclePharm with respect to distribution and promotion of the Licensed Products is on a worldwide basis through the Distribution Channels (as defined below) subject to approval rights set forth in Section 13 herein. For the purposes of this Agreement, "Distribution Channels" means the distribution of the Licensed Products through GNC retail and online chains worldwide during the First Contract Year and, thereafter, through MusclePharm's other worldwide distribution channels, as mutually determined by MusclePharm and the AS Parties. 3. Endorsement of Products: Endorser agrees that he will use and evaluate the Products and Licensed Products according to the recommended use and dose guidelines. Based on Endorser's knowledge, personal use and experience with the Products and Licensed Products that he shall from time to time during the Term of this Agreement provide his honest evaluation, opinion, and findings about the Products and Licensed Products he is endorsing and promoting. The endorsements must be based on Endorser's knowledge and/or personal use and experience with the Products and Licensed Products at or about the times the endorsements are made. Endorser's statements and endorsements, or paraphrases thereof, may be used by MusclePharm to advertise, promote and publicize its business, Products and Licensed Products as provided herein. Endorser's endorsements of the Products and Licensed Products will be in accordance with the guidelines established by the Federal Trade Commission for endorsements in advertising. If requested by MusclePharm, Endorser shall provide a signed affidavit in form satisfactory to MusclePharm confirming Endorser's compliance with the FTC standards in connection with his endorsements and endorsement activities. + + + +Source: MUSCLEPHARM CORP, 10-K/A, 2/8/2017 + + + + + + + + 4. Appearances, Advertising and Promotional Activities: (a) Appearances and Video. (i) In order to ensure the success of the co-branded Licensed Products and maximize Net Sales of such Licensed Products to the mutual benefit of the parties hereto, the Endorser agrees that he shall make four (4) personal appearances ("Appearances") in the First Contract Year on dates, times and places mutually agreed upon by the parties hereto. Endorser acknowledges that such Appearances in the First Contract Year shall consist of: (i) one (1) appearance at an industry tradeshow to be mutually agreed by the parties, (ii) one (1) charity event with Arnold's All-Stars, (iii) one (1) appearance at the Arnold Classic, and (iv) one (1) corporate and public relations event(s) in 2013 to be mutually agreed by the parties. (ii) The Endorser and MusclePharm may also agree to produce on dates, times and places mutually agreed upon by the parties hereto a GetSwole training video (the "Training Video") during a production session (the "Production Day"). In the event that Endorser shall agree to produce the Training Video (such decision shall be made by the Endorser exercisable in his sole discretion) and Products (other than the Licensed Products) are featured and sold in connection with such Training Video then Endorser shall receive ten percent (10%) of Net Sales (as defined below) from the sale of any Products other than the Licensed Products featured and sold directly in conjunction with the Training Video. (iii) In order to ensure the success of the co-branded Licensed Products and maximize Net Sales of such Licensed Products to the mutual benefit of the parties hereto, the Endorser agrees that he shall make two (2) Appearances in each of the Second Contract Year and Third Contract Year (and any subsequent Contract Years if applicable) on dates, times and places mutually agreed upon by the parties hereto (one such appearance to include the Arnold Classic in each such Contract Year). (iv) Each Appearance may be up to two (2) hours in length not including travel time to and from the Appearance, as scheduled by MusclePharm, for the purpose or promoting MusclePharm, its Products and the Licensed Products. The Production Day shall be for the purpose of MusclePharm shooting the Training Video. In the event that the Endorser agrees to participate in the Training Video, the Production Day for the Training Video may be up to two (2) hours in duration. (v) In the event Endorser agrees to appear in the Training Video on television promoting the Licensed Products during the Term hereof, the Training Video shall be produced by a production company that is a SAG signatory and such production company shall pay on behalf of the Endorser all pension, health & welfare benefit payments. For the purpose of computing such pension, health and welfare benefit contributions and any other payments under any SAG or AFTRA contracts applicable to Endorser's appearance in such Training Video, 25% of the compensation payable to Endorser under this Agreement shall be allocated as fair and reasonable consideration for Endorser's work and appearance in the Training Video during the Term or thereafter during the Use-Up Period defined below. + + + +Source: MUSCLEPHARM CORP, 10-K/A, 2/8/2017 + + + + + + + + (b) Advertisements, Print Media, and Promotional Items. Endorser agrees that during the Term MusclePharm shall have the right to use, worldwide, Endorser's Name and Appearance Rights (as specified in Section 6) to advertise MusclePharm and its Products and Licensed Products in print media, and in all other forms of media (other than telephone marketing or texting campaigns) including, but not limited to, point of sale material, premiums and novelties, direct marketing material, and radio, television, electronic, and computer media (including but not limited to MusclePharm's Internet and social media websites). Print media will also include promotional items on which Endorser's approved picture; approved likeness, or facsimile signature may appear. Endorser will have the right to approve, in writing via his representative's office, all advertising materials which utilize Endorser's Name and Appearance Rights, but Endorser will not unreasonably withhold approval and will promptly respond to all approval requests. (c) Use of Endorsements. During the Term, MusclePharm also shall have the right to use, worldwide, Endorser's oral or written endorsements of Products and Licensed Products, or paraphrases thereof, to promote MusclePharm, its business, Products, and Licensed Products. Endorser shall have the right to approve such oral or written endorsements and the use thereof, such approval not to be unreasonably withheld or delayed. (d) Use-Up Period. During the Term, the right to use Endorser's Name and Appearance Rights granted to MusclePharm in this Section shall extend for six (6) months beyond the expiration of this Agreement (the "Use-up Period"). MusclePharm shall create no new advertising during the Use-up Period using Endorser's Name and Appearance, but shall have the right to use during the Use-up Period Endorser's Name and Appearance in advertisements and promotional materials created before the expiration date of this Agreement. (e) Promotional Products. During the Term, MusclePharm shall have the right to create and distribute the Promotional Products world- wide. MusclePharm shall be permitted to sell the Promotional Products at its cost to third parties and Endorser shall not be entitled to any additional compensation with respect to the Promotional Products. In the event that MusclePharm shall sell any Promotional Products above its cost then Endorser shall be entitled to receive 10% of Net Sales from the sale of such Promotional Products. (f) Online content. During the Term, Endorser will use good faith efforts to provide online content for MusclePharm's websites and social media websites as reasonably requested by MusclePharm. This will be in a form agreed to by the parties (e.g. training video or video interview with a MusclePharm representative). This will be scheduled so as to not interfere with Endorser's movie and other obligations. Endorser will use good faith efforts to promote MusclePharm on his website (e.g. www.schwarzenegger.com). (g) GetSwole. Endorser, in conjunction with MusclePharm's management and fitness experts will help in the design of the GetSwole Diet and Weight Training Program. (h) Autographed Items. Endorser shall also supply MusclePharm with at least fifty (50) signed items for each Contract Year, on the Licensed Products or on other items to be mutually agreed upon by the parties hereto, to be used by MusclePharm in connection with the promotion of the Products and/or Licensed Products. + + + +Source: MUSCLEPHARM CORP, 10-K/A, 2/8/2017 + + + + + + + + (i) Representations and Warranties. Endorser expressly represents and warrants that he is not subject to any restriction or limitation by way of employment or contractual obligation that may impair or limit his performance of the advertising and promotional activities described above, and that Endorser has the express approval of any third party to make the promises and commitments set forth herein, and will advise any future employer of his obligations hereunder. 5. Scheduling: (a) The Appearances, the Production Day, the Licensed Product launch and related media campaign, the interview of Endorser by MusclePharm, and all advertising and promotional activities requested by MusclePharm and approved by Endorser shall be scheduled by mutual agreement and subject to Endorser's other business activities and commitments occurring during the Term of this Agreement. Endorser's commitments pursuant to this Agreement shall be scheduled so as not to conflict with Endorser's other commitments. Endorser agrees that he will in good faith make every reasonable effort, given his other commitments, to give priority to the fulfillment of his obligations pursuant to this Agreement. The parties shall confer periodically for the purpose of coordinating and scheduling Endorser's advertising and promotional activities and services. 6. Right of Publicity: (a) Name and Appearance Rights. As provided below, during the Term, the AS Parties grant to MusclePharm the right to use the Trademarks as defined in this Agreement and the Name and Appearance Rights, which shall include Endorser's name, approved photograph, approved picture (including, without limitation, any copyrighted pictures and video images of the Endorser owned by the Endorser which Endorser agrees to make available for use hereunder), approved appearance, or approved likeness, including video and other recordings of Endorser's appearance, along with the right to use Endorser's voice, including audio or other recordings of Endorser's voice, Endorser's signature, personal or professional background and experience, reputation, approved quotations and approved endorsements, or approved paraphrases of Endorser's approved quotations and endorsements, including approved touch-ups, approved simulations or approved compositions of any of the above whether generated by computer or by any other means, for the period of time and for the purposes set forth in this Agreement. MusclePharm acknowledges that the use of some works may require that MusclePharm obtain a copyright license from third parties. (b) Promotional Uses. During the Term of this Agreement, the AS Parties grant to MusclePharm and consent to MusclePharm's commercial use of the Name and Appearance Rights to advertise, promote, endorse and publicize Products, Licensed Products, and MusclePharm's business, worldwide in any media selected by MusclePharm (excluding telephone or texting campaigns), including but not limited to print, radio, television, electronic, wireless or internet, pursuant to the terms and conditions set forth herein. MusclePharm acknowledges that any use on products requires approval and that use of the Name and Appearance Rights on products is limited to the Licensed Products. + + + +Source: MUSCLEPHARM CORP, 10-K/A, 2/8/2017 + + + + + + + + (c) Editorial Uses. Endorser also grants to MusclePharm and consents to MusclePharm's editorial use world-wide of Endorser's Name and Appearance in MusclePharm published materials approved by Endorser. For purposes of this Agreement, MusclePharm's editorial use of Endorser's Name and Appearance shall mean a use that does not directly promote, advertise or endorse MusclePharm's business, its Products or Licensed Products. Nothing in this Section 6(c) shall entitle MusclePharm to reduce Endorser's compensation pursuant to Section 7 and Section 8 of this Agreement (including, without limitation, with respect to any renewal Term, if any). (d) Discretion to Utilize. Except as otherwise provided in this Agreement, MusclePharm may in its sole discretion exercise some or all of the rights granted by Endorser in this Agreement, but MusclePharm shall have no obligation to exercise or use the rights Endorser has granted. If MusclePharm elects to not exercise or use all the rights granted by Endorser, MusclePharm's election shall not be interpreted or construed as a waiver or release of such rights. MusclePharm shall have the rights to use Endorser's Name and Appearance Rights and the Right to Publicize Endorser's Name and Appearance, as provided in this Agreement, unless Endorser and MusclePharm enter into a separate written agreement in which MusclePharm waives or releases some or all of the rights Endorser has granted in this Agreement. (e) Representations and Warranties. Endorser expressly represents and warrants that he is not subject to any restriction or limitation by way of employment or contractual obligation that may impair or limit the right of publicity granted herein by Endorser, and that Endorser has the express approval of his employer to make the promises and commitments set forth herein. 6A. News Releases and Public Announcements: Neither party may, without the other party's prior written consent, make any news release or public announcement of the existence or value of this Agreement or its terms and conditions, or in any other manner advertise or publish its value, or its terms and conditions and neither party shall issue any press release or other public announcement which includes the name of the other party without such party's prior written consent, such consent not to be unreasonably withheld or delayed. The parties hereby agree that within four (4) business days after the execution and delivery of this Agreement and within four (4) business days after the launch of the Licensed Products, the parties hereto shall issue a joint press release in form and substance mutually agreeable to the parties hereto. Notwithstanding the foregoing, a party may make any filing of this Agreement or description of this Agreement in a current report on Form 8-K or similar requisite filing with the Securities and Exchange Commission that it believes in good faith and upon a reasonable basis is required by applicable law or any listing or trading agreement concerning its publicly traded securities. 6B. Sample Products for Endorser's Use: MusclePharm shall provide a reasonable supply of Products, Licensed Products, and Promotional Products for Endorser's personal use and endorsement as contemplated by this Agreement. + + + +Source: MUSCLEPHARM CORP, 10-K/A, 2/8/2017 + + + + + + + + 7. Compensation: (a) Cash: (i) During the Term of this Agreement and during any sell-off period, MusclePharm shall pay Lender a royalty (the "Royalty") of 10% on Net Sales (as defined below) of Licensed Products sold through its wholesale Distribution Channels or retail Distribution Channels, as the case may be and 10% on Net Sales of the Training Video and any Products sold in connection with any Training Video as contemplated pursuant to the last sentence of Section 4(a)(i) above. For purposes of this Agreement, "Net Sales" shall mean MusclePharm's gross sales (the gross invoice amount billed customers) of the Licensed Products, less discounts and allowances actually shown on the invoice (except cash discounts, transportation costs and commissions not deductible in the calculation of Royalty) and less any bona fide returns (net of all returns actually made or allowed as supported by credit memoranda actually issued to the customers not to exceed 5% in any reporting cycle), the aggregate of which discounts and allowances shall not exceed 5% in any reporting cycle. No other costs incurred in the manufacturing, selling, advertising, and distribution of the Licensed Products shall be deducted nor shall any deduction be allowed for any uncollectible accounts, allowances or bad debt. (ii) A Royalty obligation shall accrue upon the sale of the Licensed Products regardless of the time of collection by MusclePharm. For purposes of this Agreement, Licensed Products shall be considered "sold" upon the date when such Licensed Products are billed, invoiced, shipped, or paid for, whichever event occurs first. (iii) If MusclePharm sells any Licensed Products to any party affiliated with MusclePharm, or in any way directly or indirectly related to or under the common control with MusclePharm, at a price less than the regular price charged to other parties, the Royalty payable to Lender shall be computed on the basis of the regular price charged to other parties. (iv) All payments due hereunder shall be made in United States currency drawn on a United States bank, unless otherwise specified between the parties. (v) During the Term and during the sell-off period, MusclePharm shall make royalty payments in U.S. dollars for the respective quarters ending on the last day of September, December, March and June (each, a "Royalty Period") within thirty (30) days from the end of each quarterly period. Each such royalty payment shall include an itemized statement showing the nature and source of such royalties, including (i) the number of units of Licensed Products sold (by country and customer); (ii) the total number of units returned for which credit was given and the total dollar amount of such credits, and (iii) the total gross sales and the total royalties due with respect to such gross sales, and each itemized statement shall be certified by a duly authorized officer of MusclePharm. Such statements shall be in the form attached hereto as Exhibit "B" and furnished to Lender whether or not any Licensed Products were sold during the Royalty Period. + + + +Source: MUSCLEPHARM CORP, 10-K/A, 2/8/2017 + + + + + + + + (vi) MusclePharm will send all statements and payments, including all royalties, to the Lender to the address set forth in Section 20 below. MusclePharm will make all payments payable to the Lender. (vii) Receipt or acceptance by Lender (or its authorized representative) of a royalty statement or receipt or acceptance of any accompanying royalty payment shall not prevent Lender from at any time within three years after the Term of this Agreement questioning the validity or accuracy of such royalty statement or payment. (viii) MusclePharm's obligations for the payment of a Royalty and the Guaranteed Minimum Royalty (as defined below) shall survive expiration or termination of this Agreement and will continue for so long as MusclePharm continues to manufacture, sell or otherwise market the Licensed Products. Notwithstanding the foregoing, Lender shall be entitled to receive a guaranteed minimum royalty for each Contract Year including the Additional Term, if any (the "Guaranteed Minimum Royalty"), payable in accordance with Exhibit "C" attached hereto. 8. Stock: (a) Within three (3) days of the execution and delivery of this Agreement and prior to any news release or public disclosure of the existence of this Agreement, its terms and conditions, or the relationship of the parties hereto, whether pursuant to a press release, a current report on Form 8-K or other filing with the Securities and Exchange Commission or otherwise (the "Issuance Date"), MusclePharm shall issue Lender 780,000 shares of MusclePharm's restricted stock (the "Compensation Shares"), for services performed and to be performed pursuant to this Agreement. All Compensation Shares will be fully vested upon issuance, and for a period of six (6) months following the date hereof, Lender may not sell in excess of fifty percent (50%) of the Compensation Shares without the prior consent of MusclePharm; provided, that, the Lender shall be entitled, without the prior consent of MusclePharm, to transfer the Compensation Shares at any time to affiliates and family members so long as such transfers are in compliance with state and federal securities laws and such transferees agree to be bound by foregoing transfer restrictions for the six (6) month period following the date hereof with respect to the Compensation Shares. MusclePharm agrees that (i) with respect to the Compensation Shares, Lender shall be entitled to all rights and benefits under the registration rights agreement, dated as of March 28, 2013 (the "Registration Rights Agreement"), by and among MusclePharm and the investors party thereto as if it were an investor party thereto, mutatis mutandis. MusclePharm shall promptly file (and in no event later than August 14, 2013) a registration statement on Form S-1 pursuant to the Securities Act (as defined below) (the "Registration Statement") with the SEC and will include therein the offering of all of the Compensation Shares and no other securities of the Company. MusclePharm agrees that if the SEC shall issue comments on the Registration Statement, MusclePharm shall in good faith respond to such comments as soon as practicable. MusclePharm will cause the Registration Statement to be declared effective as promptly as practicable. + + + +Source: MUSCLEPHARM CORP, 10-K/A, 2/8/2017 + + + + + + + + (b) MusclePharm and Lender agree that, for purposes of determining the taxable income of Lender and the tax expense, deduction or other corresponding charge of MusclePharm, in each case in connection with the issuance of the Compensation Shares in accordance with this Section 8, the fair market value of the Compensation Shares shall be the amount set forth in any third-party valuation report delivered by Lender to MusclePharm within forty-five (45) days following the Issuance Date. MusclePharm will promptly provide all information reasonably requested by Lender and/or its valuation firm in connection with the preparation and delivery of such report. MusclePharm shall not take any position for tax purposes inconsistent with such fair market value as so determined without the consent of Lender; provided, however, that nothing herein shall preclude MusclePharm from utilizing a different method of calculating the fair market value of the Compensation Shares for financial accounting purposes if MusclePharm's Chief Financial Officer, audit committee and independent auditors shall determine in good faith that such alternative calculation of the fair market value of the Compensation Shares is required under generally accepted accounting principles in the United States. (c) In connection with the issuance of the Compensation Shares, but without limitation of Section 8(a) or the other terms and conditions in this Agreement, Lender hereby makes the following representations to MusclePharm regarding the Compensation Shares: (i) Lender understands that, as of the date hereof, none of the Compensation Shares have been registered under the Securities Act of 1933, as amended ("Securities Act"), by reason of a specific exemption from the registration provisions of the Securities Act, the availability of which depends upon, among other things, the bona fide nature of the investment intent and the accuracy of Lender's representations as expressed herein. Lender is acquiring all of the Compensation Shares for its own account, not as a nominee or agent, for investment and not with a view to, or for resale in connection with, any distribution or public offering thereof within the meaning of the Securities Act. (ii) Lender understands that all of the Compensation Shares will constitute "restricted securities" under the federal securities laws, inasmuch as it is being acquired from MusclePharm or such other company in one or more transactions not involving a public offering and that under such laws the Compensation Shares may not be resold without registration under the Securities Act or an exemption therefrom. The certificates representing the Compensation Shares will be endorsed with a legend to such effect. Lender has been informed and understands that (i) there are substantial restrictions on the transferability of the Compensation Shares, and (ii) no federal or state agency has made any finding or determination as to the fairness for public investment, nor any recommendation nor endorsement, of the Compensation Shares. (iii) Lender, or Lender's business and financial advisors, have substantial experience in evaluating and investing in private transactions of securities in companies similar to MusclePharm and such other company and Lender acknowledges that it can protect its own interests. Lender, or such advisors, have such knowledge and experience in financial and business matters so that it is capable of evaluating the merits and risks of its acceptance of all of the Compensation Shares of MusclePharm as compensation or otherwise. + + + +Source: MUSCLEPHARM CORP, 10-K/A, 2/8/2017 + + + + + + + + (iv) Lender is an "accredited investor" within the meaning of Rule 501 of Regulation D promulgated under the Securities Act. (v) Lender understands that all books, records, and documents of MusclePharm relating to it have been and remain available for inspection by him or his business and financial advisors upon reasonable notice. Lender confirms that all documents requested have been made available, and that it or such advisors have been supplied with all of the information concerning MusclePharm that has been requested. Lender confirms that it or such advisors have obtained sufficient information, in its and their judgment to evaluate the merits and risks of receipt of the Compensation Shares as compensation or otherwise. Lender confirms that it has had the opportunity to obtain such independent legal and tax advice and financial planning services as it has deemed appropriate prior to making a decision to enter this Agreement. In making each such decision, Lender has relied exclusively upon its experience and judgment, or that of such advisors, upon such independent investigations as it, or they, deemed appropriate, and upon information provided by MusclePharm in writing or found in the books, records, or documents of MusclePharm. (vi) Lender is aware that the economic ownership of the Compensation Shares is highly speculative and subject to substantial risks. Lender is capable of bearing the high degree of economic risk and burdens of this venture, including, but not limited to, the possibility of a complete loss, the lack of a sustained and orderly public market, and limited transferability of the Compensation Shares, which may make the liquidation thereof impossible for the indefinite future. (vii) The offer to issue the Compensation Shares as compensation to Lender was directly communicated to Lender or its business or financial advisors by such a manner that it or such advisors were able to ask questions of and receive answers from MusclePharm or a person acting on its behalf concerning this Agreement. At no time was Lender presented with or solicited by or through any leaflet, public promotional meeting, television advertisement, or any other form of general advertising. (viii) None of the following information has ever been represented, guaranteed, or warranted to Lender, expressly or by implication by any broker, MusclePharm, or agent or employee of the foregoing, or by any other person: (1) The approximate or exact length of time that Lender will be required to remain as a holder of any of the Compensation Shares; (2) The amount of consideration, profit, or loss to be realized, if any, as a result of owning any of the Compensation Shares; or (3) That the past performance or experience of MusclePharm, its officers, directors, associates, agents, affiliates, or employees or any other person will in any way indicate or predict economic results in connection with the plan of operations of MusclePharm or the return on any of the Compensation Shares. + + + +Source: MUSCLEPHARM CORP, 10-K/A, 2/8/2017 + + + + + + + + (d) MusclePharm represents, warrants and covenants to Lender that: (i) It has the full right, power and authority to enter into this Agreement and to perform its obligations hereunder; (ii) it has acquired all rights necessary to perform this Agreement and exploit the Licensed Products as contemplated herein; (iii) the Licensed Products, any element thereof, or any advertising, promotional or publicity materials supplied by Licensee or third parties hereunder will not contain any language or material which is obscene, libelous, slanderous or defamatory; and (iv) the use of the Licensed Product and the Lender's Name and Appearance rights as contemplated herein will not violate or infringe the copyright, trademark, or other rights of any third party. (ii) It has duly executed and delivered this Agreement and, assuming due authorization, execution and delivery by Lender, this Agreement constitutes its legal, valid and binding agreement, enforceable against it in accordance with its terms. (iii) It is duly organized, validly existing and in good standing under the laws of the State of Nevada. It has all requisite power to own its properties and to carry on the business as it is now being conducted and is intended to be conducted and is duly licensed or qualified to do business in each jurisdiction in which the nature of its business or the ownership or leasing of its properties makes such license or qualification necessary. (iv) Neither the execution, delivery nor performance by it of this Agreement does or will (a) violate, conflict with or result in the breach of any provision of its organizational documents, (b) conflict with or violate any law or governmental authorization applicable to it or any of its assets or its business, or (c) conflict with, result in any breach of, constitute a default (or event which with the giving of notice or lapse of time, or both, would become a default) under, require any consent under, or give to others any rights of termination, amendment or acceleration of, or result in the creation of any encumbrance on any of its assets pursuant to, any note, bond, mortgage or indenture, contract, agreement, lease, license, permit or franchise to which it is a party or by which any of its assets is bound or affected. (v) It has timely filed all reports, schedules, forms, statements and other documents required to be filed by it with the SEC pursuant to the reporting requirements of the Exchange Act (all the foregoing filed prior to the date hereof and all exhibits included or incorporated by reference therein and financial statements and schedules thereto and documents included or incorporated by reference therein being sometimes hereinafter collectively referred to as the "SEC Reports"). As of their respective filing dates, the SEC Reports complied in all material respects with the requirements of the Exchange Act applicable to the SEC Reports (as amended or supplemented), and none of the SEC Reports, at the time they were filed with the SEC, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. + + + +Source: MUSCLEPHARM CORP, 10-K/A, 2/8/2017 + + + + + + + + (vi) Set forth on Schedule 8(c) attached hereto is a true, complete, and accurate capitalization table of MusclePharm as of the date hereof on a fully diluted basis, taking into account all equity interests of MusclePharm issued or outstanding, or issuable upon conversion or exchange of any security, and any rights, options, or warrants or other agreements to acquire any such equity interests. 9. Termination: (a) This Agreement may be terminated by MusclePharm only: (i) In the event Endorser is convicted of a felony. (ii) In the event Endorser is in material breach or default of this Agreement, then MusclePharm may give written notice to Endorser of its intent to terminate this agreement and in such notice shall set forth in reasonable detail the facts, circumstances or events causing the alleged breach or default ("Endorser Events of Default"). The Endorser shall have thirty (30) days' notice in which to cure the Endorser Events of Default to the reasonable and objective satisfaction of Musclepharm. If the Endorser fails, refuses or is unable for any reason to cure the Endorser Events of Default to the reasonable and objective satisfaction of MusclePharm, then MusclePharm may terminate this Agreement by giving a written termination notice which shall be effective on third calendar day after the date of such termination notice. (iii) This Agreement may also be terminated by MusclePharm, upon fifteen days prior written notice, if death, or physical disability, physical injury, or other incapacity lasting more than eight (8) weeks, causes Endorser to be unable to perform a material amount of the personal or consulting services described in this Agreement. (b) This Agreement may be terminated by the AS Parties only: (i) In the event MusclePharm shall default under any indebtedness or financial obligations owed by MusclePharm in an amount in excess of $1,000,000 including, without limitation, any failure to pay principal or interest thereon, and such event of default or condition shall continue after any applicable grace period specified in such agreement or instrument, and the effect of such event or condition results in an actual acceleration of the maturity of such indebtedness or obligations; and/or (ii) If MusclePharm (A) dissolves, liquidates or otherwise terminates its business or operations; (B) shall generally not pay its debts or obligations as the same become due; (C) commences or becomes the subject of any case or proceeding under the bankruptcy, insolvency or equivalent laws of the United States or any other jurisdiction in the Territory which is not dismissed within 45 days; (D) has appointed for it or for any substantial part of its property a court-appointed receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official which is not dismissed within 45 days; (E) makes an assignment for the benefit of its creditors; or (F) takes corporate action in furtherance of any of the foregoing; and/or + + + +Source: MUSCLEPHARM CORP, 10-K/A, 2/8/2017 + + + + + + + + (iii) If the Company shall have (or with respect to the Company, the Chief Executive Officer or the Chief Financial Officer of the Company shall have) (A) been charged with respect to a felony; (B) been sued by a governmental agency; (C) received a subpoena from a governmental entity relating to an investigation of the Company; or (D) become the subject of an investigation by a governmental agency that, in each case, if adversely determined, could have, as determined by Endorser in good faith (or, solely with respect to clause (D), as reasonably determined by the Endorser), a material adverse effect on the Company's reputation or financial performance; and/or (iv) If the AS Parties reasonably determine (based either on (A) internal MusclePharm information; (B) reports or other credible information produced by established medical or scientific experts; or (C) multiple adverse events reported to MusclePharm or in the media) that any of MusclePharm's products are harmful to the human body or unsafe. (v) In the event Musclepharm is in material breach or default of this Agreement, the AS Parties may give written notice to Musclepharm of intent to terminate, and such notice shall set forth in reasonable detail the facts, circumstances or events causing the alleged breach or default ("MusclePharm Events of Default"). Musclepharm shall have thirty (30) days' notice in which to cure the MusclePharm Events of Default to the reasonable and objective satisfaction of the terminating party. If Musclepharm fails, refuses or is unable for any reason to cure the MusclePharm Events of Default to the reasonable and objective satisfaction of the terminating party, then the the AS Parties may terminate this Agreement by giving a written termination notice which shall be effective on third calendar day after the date of the termination notice (c) Effect of Expiration/Termination: Upon expiration or termination of the Agreement for pursuant to Section 9 herein, Endorser shall have no further obligation to render any services whatsoever. MusclePharm shall have no further right to use the rights granted to MusclePharm hereunder and all such rights (including without limitation the rights to use the Name and Appearance Rights and Trademarks) shall immediately and automatically be revoked and shall terminate and revert to the AS Parties immediately with no "use-up period". Notwithstanding the foregoing, in the event the expiration of this Agreement or termination of this Agreement by Musclepharm pursuant to paragraph 9(a), MusclePharm shall be entitled to sell-off the remaining Licensed Products for six (6) months after such expiration of this Agreement pursuant to paragraph 4(d) herein and shall continue to pay Endorser the Royalty set forth in paragraph 7 herein. MusclePharm shall not be liable to pay any compensation for services performed after the expiration or termination. In the event of a termination by MusclePharm pursuant to paragraph 9(a)(i)-(ii), Musclepharm shall not be required to pay Endorser any further compensation except for Royalties earned up until such termination date, and provided, however, that if Musclepharm terminates this Agreement because of death, disability, physical injury, or other incapacity of Endorser, if Endorser has performed all services required by this Agreement for a particular Contract Year, then MusclePharm shall continue to be obligated to compensate Lender with the full compensation amount of this Agreement for such Contract Year. Notwithstanding anything contained herein, irrespective of the expiratation or termination of this Agreement, the AS Parties shall always be entitled to retain and shall never be obligated to return any monies paid and/or stock issued to Lender and/or Endorser pursuant to this Agreement. All formulas used in the Licensed Products shall remain the property of MusclePharm, but all rights in any packaging, promotional materials, and websites of the Licensed Products (including, without limitation, pictures, the name, logos and trade dress) and all intellectual property of the AS Parties shall revert back or otherwise be vested in the AS Parties; provided, however, that the MusclePharm trade name, any MusclePharm trademarks, and MusclePharm logo used on the Licensed Products shall remain the property of MusclePharm. The AS Parties shall also have the right to purchase from MusclePharm the Arnold.com domain name for a purchase price equal to MusclePharm's actual cost in acquiring such domain name (in the amount of Twenty Seven Thousand Five Hundred ($27,500) plus interest accruing at an annual rate of five percent (5%) from April 27, 2013 the date of acquisition of such domain name through the date of the sale of such domain name. + + + +Source: MUSCLEPHARM CORP, 10-K/A, 2/8/2017 + + + + + + + + 10. Expenses: In connection with any Appearance or Production Day that Endorser shall be required to specifically travel solely for MusclePharm to make such Appearance or Production Day and shall not already be in such geographic location for another commitment, MusclePharm shall be required to pay the expenses associated with Endorser's travel, lodging, security and other expenses as set forth on Exhibit "D" attached hereto. 11. Audit Rights: (a) The AS Parties shall have the right, upon at least five (5) days written notice and no more than once each Contract Year of the Term to inspect MusclePharm's books and records and all other documents and material in the possession of or under the control of MusclePharm with respect to the Licensed Products at the place or places where such records are normally retained by MusclePharm. The AS Parties shall have reasonable access thereto for such purposes and shall be permitted to be able to make copies thereof and extracts therefrom. (b) MusclePharm shall keep complete and accurate books of account for the preceding three years from the date of termination and expiration. In the event that any shortfalls, inconsistencies or mistakes are discovered, they shall immediately be rectified by MusclePharm at its sole cost and expense. (c) In the event a shortfall in the amount of five percent (5%) or more is discovered, MusclePharm shall reimburse the AS Parties for the cost of the audit including any reasonable attorney's fees incurred in connection therewith. (d) MusclePharm agrees to preserve and keep accessible and available to the AS Parties all relevant books and records for a period of at least three (3) years following the expiration or termination of the Agreement. 12. Sales and Marketing Plan And AS Product Line and Trademarks: (a) MusclePharm shall utilize its commercially reasonable efforts to advertise and promote the Licensed Products at its own expense and to sell the Licensed Products through the Distribution Channels worldwide as contemplated herein during the Term and to promote both the goodwill of the Endorser and the market reputation of the Licensed Products. MusclePharm will conduct its activities relating to the marketing of the Licensed Products in a professional manner. In that connection: + + + +Source: MUSCLEPHARM CORP, 10-K/A, 2/8/2017 + + + + + + + + (b) Prior to the execution and delivery of this Agreement with respect to the First Contract Year and at least ninety (90) days prior to the beginning of each Contract Year of the Term, MusclePharm will provide the AS Parties with a detailed marketing plan (the "Marketing Plan"). The AS Parties shall be entitled to approve the Marketing Plan, such approval not to be unreasonably withheld or delayed. MusclePharm shall use its commercially reasonable efforts to market and distribute the Licensed Products, and MusclePharm shall allocate between $3,000,000 and $5,000,000 in the First Contract Year and $5,000,000 in each subsequent Contract Year (including any renewal terms if any) toward the marketing of the Licensed Products (the "Marketing Budget"); it being understood that the parties may mutually decide not to deploy the full Marketing Budget in any Contract Year if in the good faith determination by the parties that the deployment of the full Marketing Budget is unnecessary to achieve its projected revenue targets in connection with the sale of the Licensed Products. Notwithstanding the foregoing, MusclePharm shall be entitled to re-allocate marketing dollars in its good faith judgment exercisable in its sole discretion from the media forms set forth in the Marketing Plan to promote the Licensed Products in other media forms. (c) AS Product Line and Trademarks. The parties hereto agree and understand that the AS Product Line will be marketed and promoted as a distinct product line from MusclePharm's overall product lines. Any trademarks and trade dress used as the brand of the AS Product Line shall be owned by the AS Parties (as among them, to be determined among them) and shall be included within the defined term Trademarks as used in this Agreement. Any trademark used as a brand for an individual product in the AS Product Line, as opposed to a brand for the line of products, whether or not is based upon or derived from the Name and Appearance Rights or is independently developed also shall be owned by the AS Parties (as among them, to be determined among them) and as shall be included within the defined term Trademarks as used in this Agreement. Notwithstanding the foregoing, the MusclePharm trade name, any MusclePharm trademarks, and MusclePharm logo used on the Licensed Products shall remain the property of MusclePharm. 13. Quality Control: (a) MusclePharm acknowledges and agrees that, in order to maintain the goodwill and integrity of the Endorser, the Name and Appearance Rights, and the Trademarks (the "Endorser IP"), the Licensed Products shall be of a standard and of such style, appearance and quality as to protect and enhance the goodwill associated with the Endorser IP, which standard the AS Parties may from time to time prescribe and which, in any event, shall be of substantially the same or better quality than the samples previously provided by MusclePharm to Endorser. To this end, MusclePharm will use the approval form attached hereto as Exhibit "E" to obtain required approvals under this Agreement (including, ingredients contained in the Licensed Products). Prior to any use of any of the Endorser IP, MusclePharm shall submit to the AS Parties for the AS Parties' prior written approval all artwork, photos, images, writings, advertising campaigns, slogans, claims made and other Name and Appearance Rights associated with the Endorser IP, samples of materials and design of the Licensed Products on which the Endorser IP are to appear and of all advertising, press and promotional literature which MusclePharm intends to use in the marketing or merchandising of the Licensed Products using the submission form in Exhibit "E" attached hereto. The AS Parties shall respond to any such approval request within ten (10) business days. To the extent that the AS Parties shall fail to respond within such ten (10 day) period, the submissions shall be deemed disapproved. Should MusclePharm desire to submit the same request for approval, the AS Parties shall respond within five (5) days detailing the reason for disapproval. Should the AS Parties fail to respond in this last Five (5) business day period, submission shall be deemed approved. In addition, MusclePharm shall send, at its expense, at a minimum, two (2) representative samples of each Licensed Products, at each of the concept, pre-production and production stages, to the AS Parties at the address set forth in Section 20 below for prior approval. During the Term, MusclePharm will also send two (2) representative samples of the Licensed Products to the AS Parties at the address set forth in Section 20 below upon request so that the AS Parties can determine whether the quality of the Licensed Products bearing the Endorser IP is being maintained. + + + +Source: MUSCLEPHARM CORP, 10-K/A, 2/8/2017 + + + + + + + + (b) MusclePharm shall at all reasonable times during the Term (but no more than once during each Contract Year of the Term), and upon reasonable notice, permit the AS Parties to send their authorized representatives to inspect the facilities of MusclePharm or its agents in order to confirm that the production of the Licensed Products hereunder is in compliance with the quality standards set out herein and, at MusclePharm's expense, randomly test the formulas of the Licensed Products for quality control purposes, although the AS Parties will have no obligation to do so. (c) The Licensed Products shall be of the highest quality and manufactured, produced, sold, distributed and promoted in strict compliance with all applicable laws and regulations, and be of substantially the same or better quality as the samples previously submitted by MusclePharm. MusclePharm shall be responsible for ensuring that the products are properly designed and manufactured for safe use and shall promptly and fairly address and resolve all consumer complaints and warranty claims. MusclePharm hereby acknowledges that the AS Parties are not competent to determine whether the products are safe for sale and/or distribution to the public at large. Accordingly, the AS Parties' approval rights relate to aspects of quality and not to a determination of the safety of the products and any approvals given by the AS Parties of the products shall in no way detract from the MusclePharm's obligations hereunder. (d) The License Products will be doctor-formulated and clinically tested at Stanford University or North Carolina University or another university mutually acceptable to the parties hereto to prove the effectiveness of the Licensed Products. All Licensed Products will be tested by Informed Choice or another independent testing laboratory mutually acceptable to the parties hereto to be certified "Banned Substance Free" for athletes. (e) Manufacturers will comply with the requirements set forth in this Section 13(e): (i) MusclePharm and the manufacturers will not use child labor (not including child actors or models) in the manufacturing, packaging, marketing, advertising, or distribution of the Licensed Products. + + + +Source: MUSCLEPHARM CORP, 10-K/A, 2/8/2017 + + + + + + + + (ii) MusclePharm and the manufacturers will only employ persons whose presence is voluntary. MusclePharm and the manufacturers will not use any forced or involuntary labor. (iii) MusclePharm and the manufacturers will treat each employee with dignity and respect, and will not use corporal punishment, threats of violence, abuse, or other forms of physical, sexual, psychological, or verbal harassment. (iv) MusclePharm and the manufacturers will not unlawfully discriminate in any hiring or employment practices. (v) MusclePharm and the manufacturers will, at a minimum, materially comply with all applicable wage and hour laws, rules, regulations, and industry standards. MusclePharm and the manufacturers agree that, where local industry standards are higher than applicable legal requirements, MusclePharm and manufacturer will meet the higher local standards. (vi) MusclePharm and the manufacturers will materially comply with all applicable workplace laws, rules, regulations, and industry standards, ensuring, at a minimum, reasonable access to potable water and sanitary facilities, fire safety, and adequate lighting and ventilation. (vii) MusclePharm and the manufacturers will respect the rights of employees to associate, organize, and bargain collectively in a lawful and peaceful manner, without penalty or interference. (viii) MusclePharm and the manufacturers will materially comply with all applicable environmental laws, rules, regulations, and industry standards. (ix) If MusclePharm becomes aware that any manufacturer has used or is using Endorser IP for any unauthorized purpose, MusclePharm, will immediately notify the AS Parties and, if so instructed by the AS Parties, will cause such manufacturer to cease such use immediately. (f) Unless the AS Parties expressly agree in advance and in writing otherwise, all Licensed Products shall be manufactured within the fifty states of the United States of America and in no other locations. 13A. Ownership and Registration of Trademarks and Name and Appearance Rights: (a) During the Term and after expiration or termination of this Agreement, MusclePharm shall not contest or otherwise challenge or attack the AS Parties' rights in the Trademarks or Name and Appearance Rights or the validity of the license being granted herein. (b) During the Term and after expiration or termination of this Agreement, MusclePharm shall not use any trademark which so substantially resembles any of the Trademarks or Name and Appearance Rights as to be likely to deceive or cause confusion or mistake or which might amount to passing-off; provided however, nothing herein shall preclude MusclePharm from using any of the intellectual property to be retained by MusclePharm contemplated pursuant to Section 9(f) of this Agreement after the termination of this Agreement. + + + +Source: MUSCLEPHARM CORP, 10-K/A, 2/8/2017 + + + + + + + + (c) MusclePharm recognizes the value of the good will associated with the Trademarks and Name and Appearance Rights and acknowledges that the Trademarks and Name and Appearance Rights, and all rights therein and the good will pertaining thereto, belong exclusively to the AS Parties. (d) MusclePharm agrees that its use of the Trademarks and Name and Appearance Rights shall inure to the benefit of the AS Parties and that MusclePharm shall not, at any time, acquire any rights in the Trademarks and/or Name and Appearance Rights by virtue of any use it may make of the Trademarks and/or Name and Appearance Rights. (e) MusclePharm agrees that any copyrights in works created based upon the Trademarks and/or Name and Appearance Rights shall become the rights of the AS Parties (as among them to be determined among them). MusclePharm irrevocably and unconditionally transfers and assigns to the AS Parties in perpetuity and throughout the universe any and all of MusclePharm's right, title, and interest, if any (including, without limitation, the rights generally known as 'moral rights') in and to all works, including any packaging, advertising and promotional materials, and other materials based upon the Trademarks and/or Name and Appearance Rights, all of which shall, upon their creation, become and remain the property of the AS Parties. All such works based upon the Trademarks and/or Name and Appearance Rights shall be prepared by an employee-for- hire of MusclePharm (under MusclePharms's sole supervision, responsibility, and monetary obligation) or as a work-for-hire by a third party who assigns to the AS Parties in writing and in perpetuity throughout the universe all right, title, and interest in the same provided however, nothing herein shall preclude MusclePharm from using any of the intellectual property to be retained by MusclePharm contemplated pursuant to Section 9(f) of this Agreement after the termination of this Agreement. (f) Injunctive Relief. MusclePharm acknowledges that the unauthorized use of the Name and Appearance Rights and Trademarks will result in immediate and irreparable damages to the AS Parties and that the AS Parties would have no adequate remedy at law for such authorized use. MusclePharm further agrees that in the event of any unauthorized use of the Name and Appearance Rights and/or the Trademarks, the AS Parties, in addition to all other remedies available to them hereunder, shall be entitled to injunctive relief against any such unauthorized use as well as such other relief as any court with jurisdiction may deem just and proper. (g) Registration. If the AS Parties decide in their sole discretion after consulting with MusclePharm to register the Trademarks and/or Name And Appearance Rights as a trademark for the Licensed Products and/or any Promotional Products or to register the copyrights in any works based upon the Trademarks and/or the Name And Appearance Rights, MusclePharm will cooperate to provide information, samples, and documents as reasonably requested by the AS Parties to enable the AS Parties to comply with the application, registration, license recordal, and other requirements of any applicable jurisdictions. If the AS Parties decide to register Trademarks and/or Name And Appearance Rights as a trademark for the Licensed Products, MusclePharm will reimburse the AS Parties for any reasonable expenses incurred in registering in the United States and Canada and such other countries as the parties shall mutually agree upon. + + + +Source: MUSCLEPHARM CORP, 10-K/A, 2/8/2017 + + + + + + + + 14. Independent Contractor: It is expressly agreed that Endorser is acting as an independent contractor in performing his services hereunder. MusclePharm shall carry no worker's compensation insurance or any health, accident or disability insurance to cover Endorser. MusclePharm shall not pay any contributions to Social Security, unemployment insurance, federal or state withholding taxes, nor provide any other contributions or benefits that might be expected in an employer-employee relationship. Endorser shall be solely responsible and liable for reporting and paying all federal and state income or other taxes applicable to the Endorser's compensation under this Agreement and MusclePharm will provide Lender with an IRS Form 1099 at the end of each calendar year in which compensation is paid to Lender. It is further understood and expressly agreed by Endorser that he has no right or authority to incur expenses, obligations or liabilities in the name of or binding on MusclePharm, and he shall not represent to third parties that he has any relationship (e.g., employer-employee or principal-agent) with MusclePharm other than the independent contractor arrangement set forth in this Agreement. 15. Indemnification. (a) By the AS Parties. The AS Parties will at all times indemnify and hold MusclePharm and its agents and licensees harmless from and against any and all claims, damages, liabilities, costs and expenses (including reasonable outside attorneys' fees), arising out of any breach by the AS Parties of any warranty or agreement made by the AS Parties hereunder. In no event shall the AS Parties' indemnification obligations to MusclePharm hereunder exceed the after-tax value of the Cash Consideration received by Lender under this Agreement. (b) By MusclePharm. MusclePharm agrees to protect, indemnify, save, defend, and hold harmless the AS Parties, their related companies, affiliates, and partners, and each of their assigns, agents, representatives, officers, directors, shareholders, and employees from and against any and all expenses, damages, liabilities, claims, suits, actions, judgments, costs and expenses whatsoever (including reasonable attorney's fees; both those incurred in connection with the defense or prosecution of the indemnifiable claim and those incurred in connection with the enforcement of this provision), caused by, arising out of, or in any way connected with (i) any injury, death, or other harm or claim connected with, or claimed defect in, Products or Licensed Products provided, manufactured, produced, marketed, promoted, sold, and/or distributed by MusclePharm (including any party affiliated with MusclePharm); (ii) any material inaccuracy or misrepresentation by MusclePharm in this Agreement; (iii) any advertisement and/or promotion of MusclePharm, its Products, or Licensed Products, including but not limited to any use of the materials produced pursuant to this Agreement, as well as MusclePharm's advertising/promotion campaign described above in this Agreement and/or (iv) any breach of this Agreement and/or in connection with this Agreement. No settlement will be entered into by the AS Parties without MusclePharm's prior written approval. + + + +Source: MUSCLEPHARM CORP, 10-K/A, 2/8/2017 + + + + + + + + 16. Exclusivity; Non-Competition: (a) During the term of this Agreement, or any extensions of this Agreement, Endorser and the Lender hereby agree and warrant that it will not enter into any other endorsement agreement for the use of Endorser's name, image and/or likeness for advertising, marketing and/or endorsement of any other dietary supplements during the Term of this Agreement. Notwithstanding the foregoing, the following will not be a breach of this Agreement: (i) Endorser's performance of services or appearing in the news or informational portion of any radio, TV or film or entertainment program regardless of products or services therein or sponsorship thereof; (ii) Endorser's participation in movies or TV programs as well as merchandising, commercial tie-ins and/or product placements utilizing Endorser, or (iii) Endorser's performance of services, appearance or use of his name, likeness in connection with charitable events, sports events, organizations, regardless of usage of products or services and/or sponsorship thereof. (b) Endorser shall not use or provide endorsements or testimonials for products that compete with MusclePharm Products or the Licensed Products. Any failure of Endorser to disclose such conflicting interests, or any breach of this Section, shall be deemed a material breach of the Agreement. Endorser's duty not to compete with the business of MusclePharm shall continue for a period of one year following the expiration or termination of this Agreement. Endorser's non-competition obligation shall not be required in the event of a material breach of this Agreement by MusclePharm. (c) Notwithstanding the foregoing or anything else contained herein, this Agreement shall not prevent or shall in any manner restrict Endorser from advertising, marketing and or endorsing products (or other companies which manufacture such products) which incidentally contain dietary supplements (including without limitation protein, vitamins, minerals, amino acids, herbs, legal performance enhancing substances) provided the primary purpose of such product or company is not to sell or market a dietary supplement. 17. [RESERVED.] 18. Assignment: The license granted by this Agreement is personal to MusclePharm. Except as set forth below, MusclePharm shall not assign or otherwise transfer, license, sublicense, or delegate any rights or obligations under this Agreement without the express prior written consent of the AS Parties. Neither party shall voluntarily or by operation of law assign or otherwise transfer the rights and/or obligations incurred pursuant to the terms of this Agreement without the prior written consent of the other party. Any attempted assignment or transfer by a party of their rights and/or obligations without such consent shall be void. Nothwithstanding the foregoing, this Agreement may be assigned without the AS Parties' consent by MusclePharm in connection with a change of control transaction; provided that the acquirer of MusclePharm shall have financial resources substantially similar or greater than MusclePharm and shall specifically assume the obligations of MusclePharm under this Agreement in writing prior to the consummation of the change of control transaction. In addition, notwithstanding the foregoing, the Endorser and the Lender shall be entitled to sell, transfer and assign the Cash Compensation and the Compensation Shares (subject to compliance with the restrictions set forth in Section 8(a) above and federal and state securities laws) to third parties; provided, however, that Endorser shall remain solely liable to fulfill all of his obligations under this Agreement. + + + +Source: MUSCLEPHARM CORP, 10-K/A, 2/8/2017 + + + + + + + + 19. Modification of Agreement: The parties may modify this Agreement hereto only by a written supplemental agreement executed by both parties. 20. Notice: Any notice required or permitted to be given hereunder shall be sufficient if given in writing, and sent by registered or certified mail, postage prepaid, or by courier such as FedEx, addressed as follows: If to MusclePharm: MusclePharm Attn: Brad Pyatt; CEO 4721 Ironton Street Denver, CO 80237 With a copy to: Sichenzia Ross Friedman Ference LLP 61 Broadway, 32nd Floor New York, NY 10006 Attn: Harvey J. Kesner, Esq. Edward H. Schauder, Esq If to the AS Parties: Arnold Schwarzenegger c/o Main Street Advisors, Inc. 3110 Main Street, Suite #310 Santa Monica, CA 90405 Marine MP, LLC 3110 Main Street, Suite #300 Santa Monica, CA 90405 ATTN: Arnold Schwarzenegger Fitness Publications, Inc. 3110 Main Street, Suite #300 Santa Monica, CA 90405 ATTN: Arnold Schwarzenegger + + + +Source: MUSCLEPHARM CORP, 10-K/A, 2/8/2017 + + + + + + + + With a copies to: Main Street Advisors 3110 Main Street, Suite 310 Santa Monica, CA 90405 Attn: Paul Wachter & Alex Cohen and Bloom Hergott Diemer Rosenthal LaViolette Feldman Schenkman & Goodman, LLP 150 South Rodeo Drive, 3rd Floor Beverly Hills, CA 90212 Attn: Patrick M. Knapp, Esq. and Loeb & Loeb LLP 10100 Santa Monica Blvd., Suite 2200 Los Angeles, Ca 90067 Attn: David W. Grace or to such other address as the parties hereto may specify, in writing, from time to time. Written notice given as provided in this Section shall be deemed received by the other party two business days after the date the mail is stamped registered or certified and deposited in the mail, or deposited with courier. 21. Governing Law: This Agreement has been executed and delivered in Los Angeles County in the State of California, and its interpretation, validity and performance shall be construed and enforced in accordance with the laws of the State of California. The exclusive venue for any proceeding to interpret, construe or enforce this Agreement in accordance with Section 22 below shall be Los Angeles County, California. 22. Dispute Resolution and Attorneys' Fees: (a) Any dispute, claim or controversy arising out of or relating to this Agreement or the breach, termination, enforcement, interpretation or validity thereof, including the determination of the scope or applicability of this agreement to arbitrate, shall be determined by arbitration in Los Angeles County before an arbitrator who is a retired U.S. District Court judge. The arbitration shall be administered by JAMS pursuant to its Comprehensive Arbitration Rules and Procedures. Judgment on the Award may be entered in any court having jurisdiction. The parties adopt and agree to implement the JAMS Optional Arbitration Appeal Procedure (as it exists on the effective date of this Agreement) with respect to any final award in an arbitration arising out of or related to this Agreement. Nothing in this agreement clause shall preclude parties from seeking provisional or injunctive relief remedies in aid of arbitration from a court of appropriate jurisdiction. + + + +Source: MUSCLEPHARM CORP, 10-K/A, 2/8/2017 + + + + + + + + (b) In any arbitration arising out of or related to this Agreement, the arbitrator(s) shall award to the prevailing party, if any, the costs and attorneys' fees reasonably incurred by the prevailing party in connection with the arbitration. If the arbitrator(s) determine a party to be the prevailing party under circumstances where the prevailing party won on some but not all of the claims and counterclaims, the arbitrator(s) may award the prevailing party an appropriate percentage of the costs and attorneys' fees reasonably incurred by the prevailing party in connection with the arbitration. 23. Binding Effect: This Agreement when signed by the parties shall be binding upon the parties, and their respective heirs, successors or legal representatives. 24. Representations, Warranties and Covenants: (a) The AS Parties represent and warrant that (i) they hold all such rights, title, and interest in his Name and Appearance Rights as are required to permit them to enter into this Agreement; (ii) they have the full right, power and authority to enter into this Agreement; (iii) they have not authorized any third party to create products similar to the AS Product Line, and (iv) they do not own any equity interest in any companies that produce nutrition and/or supplement products. MusclePharm expressly acknowledges that the AS Parties have not ascertained the worldwide availability of the Name and Appearance Rights and related Trademarks for use as trademarks on the Licensed Products or whether such use would infringe the rights of any other entities. EXCEPT AS SPECIFICALLY SET FORTH HEREIN, THE AS PARTIES EXPRESSLY DISCLAIM ALL REPRESENTATIONS AND WARRANTIES, EXPRESS OR IMPLIED, IN CONNECTION WITH THE TRADEMARKS AND NAME AND APPEARANCE RIGHTS, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF TITLE, NON-INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS, MERCHANTABILITY, AND FITNESS FOR A PARTICULAR PURPOSE. THE AS PARTIES SHALL NOT BE LIABLE TO MUSCLEPHARM OR ANY THIRD PARTY FOR ANY DAMAGES ARISING FROM OR RELATING TO MUSCLEPHARM'S USE OF THE TRADEMARKS AND NAME AND APPEARANCE RIGHTS. IN NO EVENT SHALL THE AS PARTIES BE LIABLE FOR SPECIAL, CONSEQUENTIAL, OR PUNITIVE DAMAGES. (b) MusclePharm represents, warrants and covenants that (i) it has the full right, power and authority to enter into this Agreement; (ii) it has acquired all rights necessary to perform this Agreement and exploit the Licensed Products as contemplated herein; (iii) the Licensed Products, any element thereof, or any advertising, promotional or publicity materials supplied by Licensee or third parties hereunder will not contain any language or material which is obscene, libelous, slanderous or defamatory; (iv) the use of the Licensed Product and the Name and Appearance Rights as contemplated herein will not violate or infringe the copyright, trademark, or other rights of any third party; (v) the Products and Licensed Products will comply in all material respects with all applicable laws and regulations and will be safe for human consumption. + + + +Source: MUSCLEPHARM CORP, 10-K/A, 2/8/2017 + + + + + + + + 25. Payments: All cash payments shall be made via wire transfer to the Lender to an account provided by Lender or his representative. 26. Confidentiality: The parties acknowledge that during the course of this Agreement the parties will provide to each other certain proprietary and confidential information that is held and maintained confidentially by each party. Each party shall be entitled to share such confidential information received by such party only with such party's representatives, legal and accounting advisors who shall agree to be bound by the confidentiality obligations set forth in this Section 26. During the term of this Agreement and for three (3) years thereafter, each party shall hold in strict confidence all such information. This obligation shall not apply to any information which: (a) becomes known to the general public through no fault of either party; (b) is required to be disclosed in the enforcement of rights hereunder, or (c) is required to be disclosed by any state or federal statue, regulation or court order. 27. Insurance: MusclePharm shall, throughout the Term of the Agreement and for a period of not less than four years thereafter, obtain and maintain at its own cost and expense from a qualified insurance company licensed to do business in California and New York, a commercial general liability insurance policy including coverage for contractual liability (applying to the terms and conditions of this agreement), product liability, personal injury liability, and advertiser's liability, in a form approved by the AS Parties, in the amount of at least Five Million Dollars (US$5,000,000) per occurrence naming the AS Parties (for the avoidance of doubt, specifically including each of Lender, Endorser, and Fitness) as additional named insureds. Without limiting the generality of the foregoing, such policy shall provide protection against any and all claims, demands, and causes of action arising out of any defects or failure to perform, alleged or otherwise, of the Products and Licensed Products or any material used in connection therewith or any use thereof. The policy shall provide for ten (10) days notice to the AS Parties from the insurer by Registered or Certified Mail, return receipt requested, in the event of any modification, cancellation, or termination thereof. MusclePharm agrees to furnish the AS Parties a certificate of insurance evidencing same within thirty (30) days after execution of this Agreement and, in no event, shall MusclePharm manufacture, distribute, advertise, or sell the Licensed Products prior to receipt by the AS Parties of such evidence of insurance. MusclePharm shall be responsible to provide for any appearances pursuant to this Agreement by Endorser appropriate certificates of insurance with coverage limits of at least Five Million Dollars (US$5,000,000) per occurrence endorsed to name the AS Parties as additional named insureds with respect to claims arising out of appearances by Endorser. MusclePharm shall be responsible to pay the deductible under any such insurance policies with respect to any claims made under such policies. + + + +Source: MUSCLEPHARM CORP, 10-K/A, 2/8/2017 + + + + + + + + 28. Entire Agreement: This Agreement contains the entire contract of the parties with respect to the subject matter hereof and supersedes all agreements and understandings between the parties concerning the subject matter hereof. The language in all parts of this Agreement shall in every case be construed simply according to its fair meaning. 29. Infringement: (a) The AS Parties shall have the exclusive right, but not the obligation, to prosecute, defend, and/or settle at their own cost and expense and in their sole discretion, all actions, proceedings and claims involving an infringement of the Name and Appearance Rights or Trademarks and to take any other action that they deem proper or necessary in their sole discretion for the protection and preservation of such rights. In their sole option, the AS Parties may take any action described above in one or more of their own names and MusclePharm will cooperate fully therewith. MusclePharm shall have the exclusive right, but not the obligation, to prosecute, defend and/or settle at its own cost and expense and in its sole discretion, all actions, proceedings and claims involving an infringement of the MusclePharm trade name, trademarks, and logo even if the matter involves the Licensed Products and to take any other action that its deem proper or necessary in its sole discretion for the protection and preservation of such rights. In its sole option, MusclePharm may take any action described above in its own name and the AS Parties will cooperate fully therewith if the matter involves the Licensed Products. All expenses of any action taken by a party hereto as contemplated above shall be borne by such party, and all relief granted in connection therewith shall be solely for the account of such party. A party hereto will not claim or reserve any rights against the other party as the result of any such action contemplated above. (b) Each party shall notify the other party promptly of any adverse, pending or threatened action in respect of an infringement of the Name and Appearance Rights or Trademarks or any infringement of the Licensed Products, as the case may be, and of any use by third parties that would or might tend to be adverse to the rights of the parties hereto, as applicable. * * * THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK. * * * + + + +Source: MUSCLEPHARM CORP, 10-K/A, 2/8/2017 + + + + + + + + This Agreement when signed and dated by all parties shall be deemed to be made, accepted and delivered in the City and County of Los Angeles, California, regardless of where the Agreement is executed by the parties. MusclePharm Corporation By: /s/Brad Pyatt Name: Brad Pyatt Title:CEO Dated: July 26, 2013 Marine MP, LLC By: /s/ Paul Wachter Name: Paul Wachter Title: Manager Dated: July 26, 2013 By: /s/Arnold Schwarzenegger Arnold Schwarzenegger Dated: July 26, 2013 Fitness Publications, Inc. By: /s/Arnold Schwarzenegger Name: Title: Dated: July 26, 2013 + + + +Source: MUSCLEPHARM CORP, 10-K/A, 2/8/2017 + + + + + + + + EXHIBIT A PROMOTIONAL PRODUCTS Promotional Products shall include the following products: · T-Shirts; · Golf Shirts; · Hats; · Visors; · Wristbands and Headbands; and · Shakers. Each and every of the foregoing Promotional Products must be specifically approved in advance and in writing by the AS Parties and shall always prominently include the MusclePharm logo or images of the Licensed Products. + + + +Source: MUSCLEPHARM CORP, 10-K/A, 2/8/2017 + + + + + + + + Exhibit "B" Royalty Statement Company Name:MusclePharm Corporation Licensee Address:4721 Ironton Street, Unit A, Denver, Colorado 80239 For Quarter Ending:____________________ + +Customer Name + + Item/SKU Number or Description + + Invoice Price + + No. Units Sold + + Sales Invoice + + Less Returns + + Net Sales + + Royalty Percentage + + Royalty Amount Total Royalty Earned This Quarter: $ Total Earned Royalty To Date (This Contract Year): $ TOTAL $ Less Paid and Un-Recouped Minimum Guarantee: $ ([ ]) Balance Due From the Company and Payable This Quarter: $ I hereby certify that the above is accurate and complete. Signature Date Title Printed Name Submit to: Name: Email: Tel: Date Received: + + + +Source: MUSCLEPHARM CORP, 10-K/A, 2/8/2017 + + + + + + + + Exhibit "C" Section (1) Guaranteed Minimum Royalty during the initial Term: Contract Year Minimum Royalty Timing of Payment One $1,500,000 $500,000 payment due on the following dates: July 23, 2013; October 1, 2013; February 1, 2014 Two $2,000,000 $666,666.66 payment due on the following dates: July 23, 2014; October 1, 2014; February 1, 2015 Three $2,500,000 $833,333.33 payment due on the following dates: July 23, 2015; October 1, 2015; February 1, 2016 + + + +Source: MUSCLEPHARM CORP, 10-K/A, 2/8/2017 + + + + + + + + Section (2) Guaranteed Minimum Royalty during the First Additional Term: In the event that the Renewal Threshold is achieved in the Third Contract Year, during the First Additional Term the Minimum Royalty and Timing of Payment shall be as follows: Contract Year Minimum Royalty Timing of Payment Four $2,500,000 $833,333.33 payment due on the following dates: July 23, 2016; October 1, 2016; February 1, 2017 Five $2,500,000 $833,333.33 payment due on the following dates: July 23, 2017; October 1, 2017; February 1, 2018 Six $2,500,000 $833,333.33 payment due on the following dates: July 23, 2018; October 1, 2018; February 1, 2019 + + + +Source: MUSCLEPHARM CORP, 10-K/A, 2/8/2017 + + + + + + + + Section (3) Guaranteed Minimum Royalty during the Second Additional Term: In the event that the Second Renewal Threshold is achieved in the Sixth Contract Year, during the Second Additional Term the Minimum Royalty and Timing of Payment shall be as follows: Contract Year Minimum Royalty Timing of Payment Seven $5,000,000 $1,666,666.66 payment due on the following dates: July 23, 2019; October 1, 2019; February 1, 2020 Eight $5,000,000 $1,666,666.66 payment due on the following dates: July 23, 2020; October 1, 2020; February 1, 2021 Nine $5,000,000 $1,666,666.66 payment due on the following dates: July 23, 2021; October 1, 2021; February 1, 2022 + + + +Source: MUSCLEPHARM CORP, 10-K/A, 2/8/2017 + + + + + + + + Exhibit "D" Endorser Expenses MusclePharm shall be responsible for the following expenses: · Exclusive private jet transportation (Netjets, or as otherwise indicated by Endorser) to be arranged through M. Paul Wachter or Alex Cohen; · A first class suite at a hotel of Endorser's choice; · A security detail; and · A reasonable per diem expense allowance while Endorser is on location. + + + +Source: MUSCLEPHARM CORP, 10-K/A, 2/8/2017 + + + + + + + + Exhibit "E" Approval Request Response Tracking Number: _____________________ CONCEPT: ________________________________ Date: __________________ Approved. Supply pre-production sample as soon as available for approval. Not approved, pending changes indicated. Re-submit concept sample for approval. Not approved. PRE-PRODUCTION SAMPLE: _____________________ Date: _____________ Approved. Supply production sample as soon as available for approval. Not approved, pending changes indicated. Re-submit pre-production sample for approval. Not approved. PRODUCTION SAMPLE: _______________________ Date: ______________ Approved. Supply production sample for Arnold Schwarzenegger's records. Approved with changes for next production run - please re-submit. Not approved, pending changes indicated. Re-submit production sample for approval. Not approved. Cease all manufacture, sale, display, marketing, and distribution. COMMENTS: Signature: Title: + + + +Source: MUSCLEPHARM CORP, 10-K/A, 2/8/2017 \ No newline at end of file diff --git a/full_contract_txt/N2KINC_10_16_1997-EX-10.16-SPONSORSHIP AGREEMENT.txt b/full_contract_txt/N2KINC_10_16_1997-EX-10.16-SPONSORSHIP AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..f76f1f1bfbebccd03bd0c016c1be1614e88a6560 --- /dev/null +++ b/full_contract_txt/N2KINC_10_16_1997-EX-10.16-SPONSORSHIP AGREEMENT.txt @@ -0,0 +1,355 @@ +1 Exhibit 10.16 + + CONFIDENTIAL Portions of this Exhibit have been omitted pursuant to a request for confidential treatment. The omitted portions, marked by [****], have been separately filed with the Commission. + + SPONSORSHIP AGREEMENT + +This agreement ("Agreement") is entered into as of the 23rd day of September, 1997 ("Effective Date"), by and between Excite, Inc., a California corporation, located at 555 Broadway, Redwood City, California 94063 ("Excite"), and N2K Inc., a Pennsylvania corporation, located at 55 Broad Street, 26th Floor, New York, New York, 10004 ("Sponsor"). + + RECITALS + +A. Excite maintains a site on the Internet at http://www.excite.com (the "Excite Site") and owns and/or manages related Web Sites worldwide (collectively, the "Excite Network") which, among other things, allow users to search for and access content and other sites on the Internet. + +B. Excite also maintains and/or manages certain Web pages which may be delivered to users via email, desktop "channels" or Internet "push" technologies (collectively, "Broadcast Pages") which may incorporate content supplied to Excite by third parties for the purpose of providing value to Excite users and providing access to the content, products and/or services of such third parties. + +C. Sponsor is in the business of distributing certain online retail music merchandise and related content and maintains a Web site at http://www.musicblvd.com (the "Sponsor Site") and other Web sites through which it makes this merchandise and this content available to its users. + +D. Sponsor wishes to be the exclusive retail store music sponsor of the Excite Site and the Excite Broadcast Pages, to distribute its music-related content through the Excite Site and the Excite Broadcast Pages and to promote its online retail music merchandise business to Excite.com users. + +Therefore, the parties agree as follows: + +1. EXCLUSIVITY, TERM AND RIGHT OF FIRST REFUSAL + + a) Sponsor will be the exclusive retail music store sponsor of the Excite Site and the Excite Broadcast Pages. Excite will not permit the display of advertising banners, promotional buttons, promotional links or other promotional materials for any retail sale of Music Products on the Excite Site, except those Music Products offered by Sponsor, nor advertising by any other Retail Music Store. "Retail Music Store" shall mean any entity which is primarily engaged in the sale of Music Products at retail to consumers. "Music Products" 2 CONFIDENTIAL + + shall mean pre-recorded music hard goods, digitally distributed music (except live and/or cybercast events), music books (to the extent this Agreement does not conflict with Excite's existing agreement with Amazon.com), music-related t-shirts and apparel, and music videos (except live and/or cybercast events). + + Notwithstanding the foregoing, Excite may make available opportunities on the Excite Site to purchase Music Products from parties other than Sponsor if such Music Products are not available from Sponsor so long as, prior to entering into arrangements to make available opportunities to purchase Music Products from parties other than Sponsor, Excite notifies Sponsor of its interest in the Music Products and gives Sponsor thirty (30) days to make the desired Music Products available through the Sponsor Site. Excite and Sponsor acknowledge that certain market opportunities may arise in which the desired Music Products must be made available on less than thirty (30) days advance notice and will work together in good faith to maximize those opportunities. In no event will Excite enter into arrangements to make available opportunities to purchase Music Products from parties other than Sponsor that would prevent Sponsor from being the exclusive source of such Music Products on the Excite Site once the Music Products become available through Sponsor. + + b) The term of this Agreement will begin on the Effective Date and will end on the second (2nd) anniversary of the Commencement Date. The "Commencement Date" means the date on which Excite commences delivery of Impressions (defined below). The parties anticipate the Commencement Date will be on or about October 15, 1997. + + c) The parties' existing agreements regarding sponsorship of the WebCrawler Web site (http://webcrawler.com) and all of the existing advertising buys on the Excite Network will be terminated as of the Commencement Date. Excite will credit Sponsor in an amount equal to [****]. This credit will be + + + + + + applied to reduce the first year exclusivity fee described in Section 7(b) and will be reflected in a reduction of Sponsor's December 31, 1997 payment to Excite described in Section 7(e). + + d) Excite will offer Sponsor the right of first refusal to negotiate with Excite for renewal of this sponsorship. + + 2 3 CONFIDENTIAL + + i) Excite will not propose, solicit or negotiate offers from entities other than Sponsor for any retail music store sponsorships of the Excite Site, if at all, until [****] prior to the expiration of the term of this Agreement. + + ii) Commencing not later than [****] prior to the expiration of the term of the Agreement, Excite will negotiate with Sponsor in good faith with respect to the terms and conditions under which this Agreement would be renewed. Excite will negotiate exclusively with Sponsor for the next [****] in good faith effort to negotiate and execute a written sponsorship renewal agreement. If, [****] prior to the expiration of the term of the Agreement, the parties have not entered into a written sponsorship renewal agreement. Excite may enter into negotiations with any third party with respect to retail music store sponsorships of the Excite Site. + + iii) In the event that Excite intends to enter into an agreement with a third party with respect to retail music store sponsorships of the Excite Site before the expiration of the term of the Agreement, Excite will deliver to Sponsor a written notice describing the relevant opportunity. Although Excite will not be required to disclose any information in violation of any nondisclosure agreement between Excite and any third party, the notice will include information sufficient to permit Sponsor to evaluate the requirements for meeting the competing offer for retail music store sponsorship of the Excite Site and to formulate a meaningful response. Sponsor will have [****] after receipt of such written notice to provide notice to Excite that it is prepared to enter into an agreement with Excite on the same terms and conditions as Excite proposes to accept from such third party. Excite and Sponsor will then promptly commence good faith negotiations to conclude the agreement. + + iv) If Sponsor rejects said offer or fails to notify Excite of its acceptance within the [****] period, Excite shall have the right thereafter to enter into the agreement with such third party, provided the terms and conditions of the agreement (if entered into within the subsequent ninety (90) days) are not less favorable to Excite than previously offered by Sponsor. + + 3 4 CONFIDENTIAL + +2. IMPRESSIONS + + a) "Impression" means any appearance of a link to the Sponsor Site whether graphic, text or any combination of graphic and text. More than one Impression may appear on a page, except, however, not more than three (3) Impressions per Channel page will count towards delivery of guaranteed Impressions and, of these 3 Impressions, at least two (2) will link to pages in the Sponsor Site offering Music Products; not more than two (2) Impressions per generic search results page will count towards delivery of guaranteed Impressions and, of these 2 Impressions, at least one (1) will link to pages in the Sponsor Site offering Music Products; and no more than one (1) Impression per specific search results page will count towards delivery of guaranteed Impressions. In all events, Excite will make a good faith effort to avoid duplicate Impressions on a single page, but in no event will more than one (1) Impression for the same artist on a Music Product page count towards delivery of guaranteed Impressions. For the purposes of this Agreement, "generic search results page" is an Excite Search results page displayed in response to a query concerning generic music topics and a "specific search results page" is an Excite Search results page displayed in response to a query concerning a specific music artist or specific album title. + + b) Excite and Sponsor will work together in good faith to define mutually agreeable Impressions in the Excite Site designed to provide content of interest (defined below) to Excite users and/or promote the Sponsor Site, in numbers sufficient to meet the Impression guarantees stated in Section 3. + + c) Excite and Sponsor will collaborate on the design, appearance, and placement (the "look and feel") of all Impressions. Excite + + + + + + will have final approval over the look and feel of the promotional Impressions, which approval will not be unreasonably withheld. + +3. IMPRESSION GUARANTEES + + a) During the first year of the sponsorship following the Commencement Date, Excite will deliver not less than [****] Impressions on the Excite Site. + + b) During the second year of the sponsorship following the first anniversary of the Commencement Date, Excite will deliver not less than [****] Impressions on the Excite Site. + + 4 5 CONFIDENTIAL + + c) Excite will report traffic, Impressions and click-thrus to Sponsor on a monthly basis. + +4. CONTENT PROVIDED TO EXCITE + + a) Sponsor will provide to Excite the content described in Exhibit A ("Content"), subject to the terms and conditions hereunder. Excite may incorporate music-related content on the Excite Site from parties other than Sponsor so long as any links in or associated with such third-party content relating to opportunities to purchase Music Products will link to pages in the Sponsor Site. Any Content which appears in the Excite Site will be accompanied by attribution or branding identifying Sponsor as the source of the Content and linking to the Sponsor Site. + + b) Sponsor will ensure that the Content will at all times feature the full array of content and functionality as made generally available by Sponsor at the Sponsor Site and its related Web sites, through any other means of distribution of Sponsor's own branded service or through any other third-party relationship, where Sponsor controls the Content. + + c) Sponsor and Excite will determine mutually agreeable methods for the transmission and incorporation of updates to the Content. + + d) Excite will have sole control over the "look and feel" of the Excite Site and the Excite Network. Excite will have sole control over the content, composition, "look and feel" and distribution of the Broadcast Pages. Excite will have sole responsibility for providing, hosting and maintaining, at its expense, the Excite Network and for providing and delivering the Broadcast Pages and for integration of Content into the Broadcast Pages. + + e) Sponsor will have sole responsibility for providing, at its expense, the Content to Excite. + +5. THE CO-BRANDED AREA OF THE SPONSOR SITE AND DISTRIBUTION THROUGH THE EXCITE SITE AND THE BROADCAST PAGES + + a) Sponsor will design and create Web pages ("Co-Branded Pages" or, collectively, the "Co-Branded Area") in the Sponsor Site incorporating music-related content to be mutually determined by the parties including but not limited to Content described in Exhibit A, subject to the terms and conditions hereunder. Each Co-Branded Page will display the name and/or brands of Sponsor and Excite. + + 5 6 CONFIDENTIAL + + Sponsor and Excite will collaborate on the "look and feel" of the Co-Branded Pages including, but not limited to, the display, appearance and placement of the parties' respective names and/or brands and of advertising displayed on the Co-Branded Pages. Excite will have final approval over the "look and feel" of the Co-Branded Pages, which approval will not be unreasonably withheld. + + b) The Co-Branded Area will reside completely on the Sponsor Site. Sponsor will have sole responsibility for providing and maintaining, at its expense, the Sponsor Site, the Co-Branded Area, the content displayed on the Co-Branded Site and any updates thereto. + + c) Each Co-Branded Page will include one or more links to the Excite Site. Excite will supply Sponsor with the URLs for these links. + + d) Excite may, upon fifteen (15) days prior notice to Sponsor, request reasonable revisions to the Co-Branded Area as needed to reflect changes that will not adversely affect Sponsor, such as changes to Excite's name and/or brand or changes to the URLs for the links to the Excite Site. Sponsor will use reasonable efforts to accommodate Excite's requested changes + + + + + + within the fifteen (15) day period. + + e) Excite may incorporate reasonable portions of the Content on the Excite Site. Each such display of the Content will count as an Impression, as defined in Section 2(a). Excite will provide links to the Co-Branded Area from any pages on the Excite Site on which the Content appears. In its discretion, Excite may elect to provide additional links to the Co-Branded Area from other locations on the Excite Network and/or Broadcast Pages. + + f) Reasonable excerpts or portions of the Content may be incorporated into Broadcast Pages, at Excite's discretion. Excite will have sole control over of the content, composition, "look and feel" and distribution of the Broadcast Pages. + +6. PROMOTIONS + + a) Excite and Sponsor will work together in good faith to create promotions specifically for customers of the Co-Branded Area. Such joint promotions, when possible and where Sponsor controls any applicable rights, will include but not be limited to the following: + + 6 7 CONFIDENTIAL + + - [****] + + - [****] + + - [****] + + - [****] + + - [****] + + - [****] + + - [****] + + - [****] + + - [****] + + - [****] + + b) Neither party will make any public statement, press release or other announcement relating to the terms of or existence of this Agreement without the prior written approval of the other. Notwithstanding the foregoing, Sponsor hereby grants to Excite the right to issue an initial press release, the timing and wording of which will be subject to Sponsor's reasonable approval, regarding the relationship between Excite and Sponsor. + +7. SPONSORSHIP FEES AND TRANSACTION COMMISSIONS + + a) [****] will be due to Excite on the Effective Date as compensation for Excite's costs of initiating access to the Excite Site, programming costs, set-up costs and other expenses associated with Excite's initiation of the links, placements, advertisements and promotions contemplated by the Agreement. + + b) Sponsor will pay Excite [****] per year as compensation for being the exclusive online retail music store sponsor of the Excite Site. + + 7 8 CONFIDENTIAL + + c) Sponsor will pay Excite [****] in the first year of the term of the Agreement as compensation for on-going programming, links, placements, advertisements and promotions contemplated by this Agreement. + + d) Sponsor will pay Excite [****] in the second year of the term of the Agreement as compensation for on-going programming, links, placements, advertisements and promotions contemplated by this Agreement. + + e) Sponsor will make payments to Excite according to the following schedule: + + DATE PAYMENT ---- ------- Effective Date [****] Commencement Date [****] 12/31/97 [****] + + + + + + 1/1/98 [****] 4/1/98 [****] 7/1/98 [****] 10/1/98 [****] 1/1/99 [****] 4/1/99 [****] 7/1/98 [****] + + f) Sponsor will pay Excite a share of all gross margins Sponsor realizes on transactions, advertising, sponsorship, promotions and any other revenue generated during each year of the term of the Agreement on the Sponsor Site as a result of users referred from the Excite Site ("Total Revenue"), subject to the following conditions: + + i) "Gross margin" is defined as [****]. + + ii) Total Revenue will be measured at the end of every three months after the Commencement Date. This three-month Total Revenue amount will be compared to an amount equal to two (2) times the corresponding three-month share of the applicable sponsorship fee described in Sections 6(c) and 6(d) (each pro rata share a "Revenue Floor"). + + 8 9 CONFIDENTIAL + + iii) If the Total Revenue earned by Sponsor during the three-month period exceeds the total of the Revenue Floor applicable to the same three-month period, Sponsor will pay Excite [****] of the gross margin Sponsor realizes on the gross revenue amount equal to the excess of the Total Revenue over the Revenue Floor during the three-month period. iv) If the Total Revenue earned by Sponsor during the three-month period does not exceed the Revenue Floor applicable to the same three-month period, Sponsor will not be obligated to pay Excite any share of the gross revenue realized during the three-month period. + + g) Payments of shared gross margin will be due to Excite within thirty (30) days of the end of each calendar quarter in which the revenue is recognized by Sponsor. + + h) With each payment, Sponsor will provide to Excite documentation reasonably detailing the calculation of the payment. + + i) Sponsor will maintain accurate records with respect to the calculation of all payments due under this Agreement. Excite may, upon no less than thirty (30) days prior written notice to Sponsor, cause an independent Certified Public Accountant to inspect the records of Sponsor reasonably related to the calculation of such payments during Sponsor's normal business hours. The fees charged by such Certified Public Accountant in connection with the inspection will be paid by Excite unless the payments made to Excite are determined to have been less than ninety percent (90%) of the payment owed to Excite, in which case Sponsor will be responsible for the payment of the reasonable fees for such inspection. + +8. USER DATA AND USAGE REPORTS + + a) All data concerning users and their behavior relating to the use of the Excite Site will be owned solely by Excite. Data relating to the use of Sponsor's Site (excluding users referred from the Excite Site) will be owned solely by Sponsor. Data relating to the use of the Co-Branded Pages will be jointly owned and shared by both parties. + + b) All jointly owned and shared data will be held in confidence and will not be used except in accordance with reasonable guidelines to be mutually agreed upon by the parties. + + 9 10 CONFIDENTIAL + + c) Sponsor and Excite will each provide the other via email usage reports containing the information set forth in Exhibit B ("Usage Reports"). Each Usage Report will cover a calendar month and will be delivered within fifteen (15) days following the end of the applicable month. The parties may, by mutual written agreement, alter the content of the Usage Reports. + + d) SPONSOR AND EXCITE WILL USE REASONABLE EFFORTS TO ENSURE THE ACCURACY OF THE USAGE REPORTS BUT NEITHER PARTY WARRANTS THAT THE USAGE REPORTS WILL CONFORM TO ANY SPECIFICATIONS AT ANY GIVEN TIME. NEITHER PARTY WILL BE HELD LIABLE FOR ANY CLAIMS AS THEY RELATE TO SUCH USAGE REPORTS, EXCEPT TO THE EXTENT THAT SUCH USAGE REPORTS SERVE AS THE BASIS FOR PAYMENTS UNDER THIS AGREEMENT. + + + + + +9. CONTENT OWNERSHIP AND LICENSE + + a) Sponsor will retain all right, title and interest in and to the Content worldwide (including, but not limited to, ownership of all copyrights and other intellectual property rights therein). Subject to the terms and conditions of this Agreement, Sponsor hereby grants to Excite a royalty-free, non-exclusive, worldwide license to use, reproduce, distribute, transmit and publicly display the Content in accordance with this Agreement and to sub-license the Content to Excite's wholly-owned subsidiaries or to joint ventures in which Excite participates for the sole purpose of using, reproducing, distributing, transmitting and publicly displaying the Content in accordance with this Agreement + + b) Excite will retain all right, title, and interest in and to the Excite Site and the Excite Network and the Broadcast Pages worldwide (including, but not limited to, ownership of all copyrights, look and feel and other intellectual property rights therein). + +10. TRADEMARK OWNERSHIP AND LICENSE + + a) Sponsor will retain all right, title and interest in and to its trademarks, service marks and trade names worldwide, subject to the limited license granted to Excite hereunder. + + b) Excite will retain all right, title and interest in and to its trademarks, service marks and trade names worldwide, subject to the limited license granted to Sponsor hereunder. + + 10 11 CONFIDENTIAL + + c) Each party hereby grants to the other a non-exclusive, limited license to use its trademarks, service marks or trade names only as specifically described in this Agreement. All such use shall be in accordance with each party's reasonable policies regarding advertising and trademark usage as established from time to time. + + d) Upon the expiration or termination of this Agreement, each party will cease using the trademarks, service marks and/or trade names of the other except: + + i) As the parties may agree in writing; or + + ii) To the extent permitted by applicable law. + +11. TERMINATION a) If Excite fails to deliver the guaranteed number of Impressions on the Excite Site during the first year, Excite will use commercially reasonable efforts to "make good" the shortfall. If Excite fails to "make good" the shortfall within [****] following the first year end, Sponsor may terminate the Agreement in accordance with Section 11 (b). + + b) If Excite fails to deliver the guaranteed number of Impressions on the Excite Site during the second year, Excite will use commercially reasonable efforts to "make good" the shortfall within [****] following the second year end. However, the term of this Agreement will continue until Excite has made good the guaranteed number of Impressions on the Excite Site. Sponsor will not be obligated to make sponsorship, advertising or exclusivity payments to Excite during the "make good" period after the second year of the Agreement, but Sponsor will continue to make revenue sharing payments as described in Section 7(e). For the purposes of the calculation of revenue sharing during this "make good" period only, the "Revenue Floor" from the last quarter of the second year of the term of the Agreement will apply. c) Either party may terminate this Agreement if the other party materially breaches its obligations hereunder and such breach remains uncured for thirty (30) days following the notice to the breaching party of the breach, with the following exceptions: + + i) Excite will promptly notify Sponsor of any errors, failures or outages of the Content. Sponsor will promptly notify Excite of any errors, failures or outages of the Co-Branded Area. + + 11 12 CONFIDENTIAL + + Sponsor will take all reasonable measures to correct any such errors or outages as soon as reasonably possible. In the event of three or more errors, failures or outages of the Content or the Co-Branded Area in any thirty (30) day period, Excite may elect to terminate this Agreement upon fifteen days written notice to Sponsor, unless Sponsor demonstrates to Excite's reasonable satisfaction before the + + + + + + expiration of the fifteen (15) day notice period that the cause(s) of the errors, failures or outages have been corrected; or + + ii) Sponsor will ensure that the Content will at all times be at least substantially similar to any other source of comparable topical content available on the Internet in terms of the following factors, taken as a whole: (i) breadth and depth of coverage, (ii) timeliness of content updates and (iii) reputation and ranking based on a cross-section of third party reviewers in terms of features, functionality, quality and other qualitative factors. In the event that Sponsor fails to meet these quality criteria, Excite may terminate this agreement on thirty (30) days written notice and enter into an other arrangements for the acquisition of similar content, unless Sponsor demonstrates to Excite's reasonable satisfaction before the expiration of the thirty (30) day notice period that the deficiencies in the Content have been corrected. + + d) All payments that have accrued prior to the termination or expiration of this Agreement will be payable in full within thirty (30) days thereof. + + e) The provisions of Section 12 (Confidentiality), Section 13 (Warranty and Indemnity), Section 14 (Limitation of Liability) and Section 15 (Dispute Resolution) will survive any termination or expiration of this Agreement. + +12. CONFIDENTIALITY + + 12 13 CONFIDENTIAL + + a) For the purposes of this Agreement, "Confidential Information" means information about the disclosing party's (or its suppliers') business or activities that is proprietary and confidential, which shall include all business, financial, technical and other information of a party marked or designated by such party as "confidential" or "proprietary"; or information which, by the nature of the circumstances surrounding the disclosure, ought in good faith to be treated as confidential. + + b) Confidential Information will not include information that (i) is in or enters the public domain without breach of this Agreement, (ii) the receiving party lawfully receives from a third party without restriction on disclosure and without breach of a nondisclosure obligation or (iii) the receiving party knew prior to receiving such information from the disclosing party or develops independently. + + c) Each party agrees (i) that it will not disclose to any third party or use any Confidential Information disclosed to it by the other except as expressly permitted in this Agreement and (ii) that it will take all reasonable measures to maintain the confidentiality of all Confidential Information of the other party in its possession or control, which will in no event be less than the measures it uses to maintain the confidentiality of its own information of similar importance. + + d) Notwithstanding the foregoing, each party may disclose Confidential Information (i) to the extent required by a court of competent jurisdiction or other governmental authority or otherwise as required by law or (ii) on a "need-to-know" basis under an obligation of confidentiality to its legal counsel, accountants, banks and other financing sources and their advisors. + + e) The information contained in the Usage Reports provided by each party hereunder will be deemed to be the Confidential Information of the disclosing party. + + f) The terms and conditions of this Agreement will be deemed to be the Confidential Information of each party and will not be disclosed without the written consent of the other party. + +13. WARRANTY AND INDEMNITY + + 13 14 CONFIDENTIAL + + a) Sponsor warrants that it owns, or has obtained the right to distribute and make available as specified in this Agreement, any and all content provided to Excite or made available to third parties in connection with this Agreement. + + b) Sponsor warrants that the Content will comply with the description and technical specifications contained in Exhibit A. + + c) Excite will indemnify, defend and hold harmless Sponsor, its + + + + + + affiliates, officers, directors, employees, consultants and agents from any and all third party claims, liability, damages and/or costs (including, but not limited to, attorneys fees) arising from the breach of any warranty, representation or covenant in this Agreement. Sponsor will promptly notify Excite of any and all such claims and will reasonably cooperate with Excite with the defense and/or settlement thereof; provided that, if any settlement requires an affirmative obligation of, results in any ongoing liability to or prejudices or detrimentally impacts Sponsor in any way and such obligation, liability, prejudice or impact can reasonably be expected to be material, then such settlement shall require Sponsor's written consent (not to be unreasonably withheld or delayed) and Sponsor may have its own counsel in attendance at all proceedings and substantive negotiations relating to such claim. + + d) Sponsor will indemnify, defend and hold harmless Excite, its affiliates, officers, directors, employees, consultants and agents from any and all third party claims, liability, damages and/or costs (including, but not limited to, attorneys fees) arising from: + + i) The breach of any warranty, representation or covenant in this Agreement; or + + ii) Any claim that the Content infringes or violates any third party's copyright, patent, trade secret, trademark, right of publicity or right of privacy or contains any defamatory content. + + Excite will promptly notify Sponsor of any and all such claims and will reasonably cooperate with Sponsor with the defense and/or settlement thereof; provided that, if any settlement requires an affirmative obligation of, results in any ongoing liability to or prejudices or detrimentally impacts Excite in any way and such obligation, liability, prejudice or impact can reasonably be expected to be material, then such settlement shall require Excite's written consent (not to be unreasonably withheld or + + 14 15 CONFIDENTIAL + + delayed) and Excite may have its own counsel in attendance at all proceedings and substantive negotiations relating to such claim. + + e) EXCEPT AS SPECIFIED IN THIS AGREEMENT, NEITHER PARTY MAKES ANY WARRANTY IN CONNECTION WITH THE SUBJECT MATTER OF THIS AGREEMENT AND HEREBY DISCLAIMS ANY AND ALL IMPLIED WARRANTIES, INCLUDING ALL IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE REGARDING SUCH SUBJECT MATTER. + +14. LIMITATION OF LIABILITY + + EXCEPT UNDER SECTION 13(c) and (d), IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, WHETHER BASED ON BREACH OF CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE, WHETHER OR NOT THAT PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE. THE LIABILITY OF EXCITE FOR DAMAGES OR ALLEGED DAMAGES HEREUNDER, WHETHER IN CONTRACT, TORT OR ANY OTHER LEGAL THEORY, IS LIMITED TO, AND WILL NOT EXCEED, THE AMOUNTS ACTUALLY PAID BY SPONSOR TO EXCITE HEREUNDER. + +15. DISPUTE RESOLUTION + + a) The parties agree that any breach of either of the parties' obligations regarding trademarks, service marks or trade names and/or confidentiality would result in irreparable injury for which there is no adequate remedy at law. Therefore, in the event of any breach or threatened breach of a party's obligations regarding trademarks, service marks or trade names or confidentiality, the aggrieved party will be entitled to seek equitable relief in addition to its other available legal remedies in a court of competent jurisdiction. + + b) In the event of disputes between the parties arising from or concerning in any manner the subject matter of this Agreement, other than disputes arising from or concerning trademarks, service marks or trade names and/or confidentiality, the parties will first attempt to resolve the dispute(s) through good faith negotiation. In the event that the dispute(s) cannot be resolved through good faith negotiation, the parties will refer the dispute(s) to a mutually acceptable mediator. + + 15 16 CONFIDENTIAL + + c) In the event that disputes between the parties arising from or concerning in any manner the subject matter of this Agreement, other than disputes arising from or concerning trademarks, + + + + + + service marks or trade names and/or confidentiality, cannot be resolved through good faith negotiation and mediation, the parties will refer the dispute(s) to the American Arbitration Association for resolution through binding arbitration by a single arbitrator pursuant to the American Arbitration Association's rules applicable to commercial disputes. + +16. GENERAL + + a) Assignment. Neither party may assign this Agreement, in whole or in part, without the other party's written consent (which will not be unreasonably withheld), except that no such consent will be required in connection with (i) a merger, reorganization or sale of all, or substantially all, of such party's assets or (ii) either party's assignment and/or delegation of its rights and responsibilities hereunder to a wholly-owned subsidiary or joint venture in which such party holds a controlling interest. Any attempt to assign this Agreement other than as permitted above will be null and void. + + b) Governing Law. This Agreement will be governed by and construed in accordance with the laws of the State of New York + + c) Notice. Any notice under this Agreement will be in writing and delivered by personal delivery, express courier, confirmed facsimile, confirmed email or certified or registered mail, return receipt requested, and will be deemed given upon personal delivery, one (1) day after deposit with express courier, upon confirmation of receipt of facsimile or email or five (5) days after deposit in the mail. Notices will be sent to a party at its address set forth below or such other address as that party may specify in writing pursuant to this Section. + + d) No Agency. The parties are independent contractors and will have no power or authority to assume or create any obligation or responsibility on behalf of each other. This Agreement will not be construed to create or imply any partnership, agency or joint venture. + + e) Force Majeure. Any delay in or failure of performance by either party under this Agreement will not be considered a breach of this Agreement and will be excused to the extent caused by any occurrence beyond the reasonable control of such party including, + + 16 17 CONFIDENTIAL + + but not limited to, acts of God, power outages and governmental restrictions. + + f) Severability. In the event that any of the provisions of this Agreement are held by to be unenforceable by a court or arbitrator, the remaining portions of the Agreement will remain in full force and effect. + + g) Entire Agreement. This Agreement is the complete and exclusive agreement between the parties with respect to the subject matter hereof, superseding any prior agreements and communications (both written and oral) regarding such subject matter. This Agreement may only be modified, or any rights under it waived, by a written document executed by both parties. + +N2K Inc. Excite, Inc. By: /s/ Jonathan Diamond By: /s/ George Bell -------------------------- ------------------------ Name: Jonathan Diamond Name: George Bell -------------------------- ------------------------ Title: Vice Chairman Title: Pres. and CEO -------------------------- ------------------------ Date: 9/23/97 Date: 9/23/97 -------------------------- ------------------------ + +55 Broad Street, 26th Floor 555 Broadway New York, New York, 10004 Redwood City, California 94063 415.568.6000 (voice) 415.568.6030 (fax) + + 17 18 CONFIDENTIAL + + EXHIBIT A + + CONTENT DESCRIPTION AND TECHNICAL SPECIFICATIONS + + FOR THE CONTENT + +Sponsor content shall be defined as any or all content and services controlled by N2K available via the main Music Boulevard site (http://www.musicblvd.com), the Music Store. In addition, Excite reserves the right to draw upon the editorial content controlled by N2K and available via N2K's network of music-related sites including, but not limited to the following: + + + + + +Music News AllStar Mag - www.allstarmag.com + +Labels N2K record label, N2K Encoded Music - www.n2kencodedmusic.com + +Music Genre Sites Classical Insites - www.classicalinsites.com Leonard Bernstein - www.leonardbernstein.com Rocktropolis - www.rocktropolis.com Jazz Central Station - www.jazzcentralstation.com + +N2K will make good faith efforts to assist Excite in obtaining access to music-related content under the control of third parties with which N2K has existing relationships. + + 18 19 CONFIDENTIAL + + EXHIBIT B + + USAGE REPORTS \ No newline at end of file diff --git a/full_contract_txt/NANOPHASETECHNOLOGIESCORP_11_01_2005-EX-99.1-DISTRIBUTOR AGREEMENT.txt b/full_contract_txt/NANOPHASETECHNOLOGIESCORP_11_01_2005-EX-99.1-DISTRIBUTOR AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..9248c657bd07b1cf14b3077156d594cc03a4fa6f --- /dev/null +++ b/full_contract_txt/NANOPHASETECHNOLOGIESCORP_11_01_2005-EX-99.1-DISTRIBUTOR AGREEMENT.txt @@ -0,0 +1,133 @@ +Exhibit 99.1 DISTRIBUTOR AGREEMENT THIS AGREEMENT, dated as of October 24, 2005 is between JOHNSON MATTHEY CATALOG COMPANY, INC., a Delaware corporation, d/b/a ALFA AESAR (hereinafter referred to as "ALFA AESAR"), having a mailing address of 30 Bond Street, Ward Hill, MA 01835-8099 and Nanophase Technologies Corporation, a Delaware corporation ("NTC"), having its principal offices at 1319 Marquette Drive, Romeoville, IL 60446. Whereas NTC is in the business of manufacturing and selling nanoparticles and nanoparticle dispersions (collectively "nanomaterials") and wishes to expand the availability and marketing of nanomaterials for research purposes, and Whereas ALFA AESAR is in the business of efficiently packaging, marketing, selling and distributing research materials, and NTC desires to appoint and name ALFA AESAR, and ALFA AESAR desires to be appointed and named, exclusive distributor of the Products (as defined below) on a worldwide basis in research quantities for research purposes. NOW, THEREFORE, in consideration of the mutual promises herein contained, the parties hereto, each intending to be legally bound hereby, agree as follows: 1. Definitions: 1.1 "Product" or "Products" mean those nanomaterials, coated nanomaterials and dispersions of nanomaterials listed in Schedule A, as amended from time to time by mutual written agreement signed by the parties. 1.2 "Product Price" means the price for Products listed in Schedule A sold by NTC to ALFA AESAR. 1.3 "Research Quantities" means, in the case of nanomaterials and coated nanomaterials, quantities purchased and distributed in individual orders of 54 kilograms or less, and, in the case of dispersions of nanomaterials, quantities purchased and distributed in individual orders of 60 kilograms or less. 1.4 "Commercial Quantities" means in the case of nanomaterials and coated nanomaterials, quantities purchased and distributed in individual orders greater than 54 kilograms, and, in the case of dispersions of nanomaterials, quantities purchased and distributed in individual orders greater than 60 kilograms. 1.5 "Custom Services" is any program or product offered by NTC other than the manufacture of Products as listed in Schedule A. 1.6 "Territory" is all areas in which ALFA AESAR markets, sells or distributes chemicals or other materials through its various sales channels, including but not limited to its present and future catalog distribution networks, Internet web sites, and other distribution channels. 1 + + + + + +1.7 "Trademark" means all common law, registered and unregistered state, federal and foreign trade names, trademarks, and service marks, including without limitation any logos and slogans. 1.8 "Net Sales" means the cost charged to a customer for goods and services less the costs for shipping, handling, taxes, duties and credits. 2. Appointment; Reservation of Rights; Referrals. 2.1 NTC hereby grants to ALFA AESAR, and its subsidiaries and affiliates, the exclusive right to market, sell and distribute Research Quantities of the Products within the Territory, ALFA AESAR hereby accepts such right and agrees to use its reasonable efforts to promote the marketing, sale and distribution of Research Quantities of the Products throughout the Territory in accordance with the terms and conditions of this Agreement using normal and standard practices. ALFA AESAR shall have the right, in its sole discretion, to sell Products outside of the Territory. ALFA AESAR agrees that, so long as NTC provides ALFA AESAR with Products for ALFA AESAR' S marketing, sale and distribution of Research Quantities of the Products within the Territory, ALFA AESAR shall purchase all its requirements of the Products (including nanomaterials with physical or chemical properties substantially the same as the Products) exclusively from NTC during the term of this Agreement, ALFA AESAR shall: i) buy the Products in quantities listed in Schedule A and repackage into the research sample quantities as it deems reasonable and appropriate for distribution and sale on a worldwide basis at such resale prices it shall determine from time to time, provided that any such repackaging shall comply with applicable safety laws and regulations; ii) attempt to keep reasonably sufficient stocks of the Products to meet customer orders and to store such stocks in such conditions as NTC may recommend from time to time to prevent deterioration or damage. 2.2 NTC reserves for itself the right (i) to sell Commercial Quantities of the Products in individual order quantities of single commercial packages or greater, subject to Section 6; and (ii) to provide samples of the Products in any quantity, free of charge, to its commercial partners or potential partners. 3. Pricing, Exclusions and Purchase Orders. 3.1 Subject to Section 2.2, NTC shall sell Products to ALFA AESAR, at the Product Price as amended from time to time pursuant to this Section 3.1. NTC agrees that the Product Prices, benefits and allowances offered to ALFA AESAR shall not be less favorable than those offered on Products provided to agents, distributors or marketed directly by NTC to any customers, other than the Product Prices existing as of the date of this Agreement with NTC's commercial partners. Subject to the preceding sentence, NTC may increase the Product Price set forth in Schedule A at the end of the first full calendar year of this Agreement and from year to year thereafter, by providing ALFA AESAR with 90 days prior written notice of the changes to the 2 + + + + + +Product Prices. Any such increase in the Product Price shall not be effective for any unshipped portion of an order previously placed by ALFA AESAR prior to the end of the calendar year in which such notice is provided. NTC may decrease the Product Price at any time by providing ALFA AESAR with 30 days prior written notice. 3.2 NTC's prices do not include sales, use, excise, or similar taxes. The amount of any valid present or future sales, use, excise, or other similar tax that is attributable to ALFA AESAR shall be paid by ALFA AESAR; or in lieu thereof, ALFA AESAR shall provide NTC with a tax exemption certificate acceptable to the taxing authorities. Product Prices do not include any transportation or shipping expenses. NTC shall ship Products at ALFA AESAR's expense FOB/FCA (Incoterms 2000) NTC's facilities. 3.3 Subject to Section 2.2, NTC agrees to sell to ALFA AESAR such quantities of Products ordered by ALFA AESAR by written purchase orders. Purchase orders for Products shall be initiated by facsimile transmission, electronic mail or other written communication and shall be binding upon the parties upon acceptance by NTC. NTC shall be deemed to have accepted a purchase order unless NTC provides written notice of rejection to ALFA AESAR within three (3) days of NTC's receipt of such order, not including weekends and nationally recognized holidays. 4. Payment and Delivery. 4.1 Subject to Section 2.2, NTC shall use all reasonable commercial efforts to fill orders placed by ALFA AESAR with all reasonable promptness provided, however, that NTC shall have no obligation to furnish any Products hereunder which have been discontinued. In the event any order is not filled within thirty (30) days of receipt by NTC, ALFA AESAR has the right, but not the obligation, to seek alternative sourcing from a third- party without liability to NTC. 4.2 NTC shall ship Products FOB/FCA its facilities and will arrange delivery of the Products to ALFA AESAR using a nationally recognized carrier. Title to the Products, and the risk of loss or damage to the Products, each will pass to ALFA AESAR upon shipment from NTC's dock in compliance with United States D.O.T. requirements and all applicable laws and regulations. 4.3 NTC shall invoice ALFA AESAR for payment of Products delivered to ALFA AESAR on a Net 30 day basis. Excepting any amounts disputed in good faith, balances unpaid after such period will be subject to a finance charge of 1% per month or may be offset against any balances owed by NTC to ALFA AESAR. The parties agree to work in good faith to resolve any disputed invoice. In the event such efforts do not resolve the dispute within sixty (60) days, either party may initiate Arbitration proceedings pursuant to Section 16. 5. Returns; Discontinued Products. 5.1 Return Rights. Subject to the protocol described below, ALFA AESAR shall have the right to return at NTC's expense, and for full credit of ALFA AESAR's cost, any Products (i.) for which a legitimate and credible allegation is made that the use of such Products infringes on any patent, trademark, trade secret, copyright, right of privacy or publicity, or any other tangible or 3 + + + + + +intangible proprietary or intellectual property right; (b) that are not manufactured, packaged, or labeled in accordance with specifications or industry standards; (c) that are shipped in error or in non-conformance with ALFA AESAR's purchase order; or (d) that are damaged or defective. In the event that ALFA AESAR believes that it is entitled to return any Products delivered under this Agreement, the parties will adhere to the following protocol: (w) ALFA AESAR will contact NTC's Quality Director and then forward to the Quality Director, via a carrier selected by and at NTC's expense, a sample of the Product that ALFA AESAR believes is non-conforming; (x) upon receipt of the sample, NTC will test it and then notify ALFA AESAR of the test results; (y) where the test results confirm that the sample is non-conforming, NTC will provide ALFA AESAR with NTC's Return Authorization Number ("RAN"); and (z) any returned non-conforming Product must be in its original container, with original labels in act, and all paperwork concerning the returned Product must include NTC's RAN. 5.2 NTC may discontinue offering any Product for any reason by providing six (6) months advance written notice to ALFA AESAR, provided however, NTC shall continue supplying ALFA AESAR with such discontinued Product until the expiration of such six (6) month notice period. Notwithstanding the foregoing, NTC may discontinue any Product immediately upon written notice to ALFA AESAR if such discontinuation is due to any actual or alleged Product defect which may actually or allegedly cause damage to person, property rights or property, With respect to ALFA AESAR's existing inventory of discontinued Product, ALFA AESAR may, its sole discretion, return such Product at any time to NTC for full credit or refund. 6. ALFA AESAR Referrals. 6.1 The following shall be deemed referral sales for which NTC shall pay a commission in accordance with Section 6.2. a. ALFA AESAR shall refer to NTC the following sales requests either directly or by navigation on ALFA AESAR's Web site: i) any sales for single Product orders in excess of Research Quantities; or ii) any sales inquiries for Custom Services. 6.2 NTC shall pay ALFA AESAR a commission for all sales under Section 6.1 as follows. The terms of this Section 6.2 shall survive any expiration or termination of this Agreement. + + + +a) For all referrals under Section 6.1, except where NTC has evidence that it referral the customer (including its affiliates) to ALFA AESAR to purchase a prior sample of the Product in question, or where NTC has made sales to the customer (including its affiliates) referred to NTC by ALFA AESAR within a period of twelve (12) months before ALFA AESAR's referral under Section 6.1, NTC shall pay ALFA AESAR a commission at the rate of [***] on the Net Sales made to each such customer so referred to NTC under Section 6.1. NTC shall pay ALFA AESAR on a monthly basis for all such commissions for a period of three (3) years from the date of such referred customer's first order of Products or Custom Services from NTC. + +*** CONFIDENTIAL TREATMENT REQUESTED—This confidential portion has been omitted from this document and filed separately with the Commission. 4 + + + + + +6.3 NTC shall maintain adequate records of its invoices and accounting records reflecting all such sales in accordance with standard accounting principles. Within twelve (12) months after the date this Agreement has been terminated by the parties, ALFA AESAR may engage an independent certified public accounting firm reasonably acceptable to NTC to audit the NTC invoices and accounting records pertaining to those customers identified as referrals under Section 6.1 at NTC's offices during normal business hours by providing thirty (30) days advance notice of such audit for the purpose of determining the accuracy of the commissions paid or payable to ALFA AESAR hereunder. NTC shall promptly pay ALFA AESAR for any deficiencies between the commission earned and the commission paid to ALFA AESAR. 7. Trademarks. 7.1 Each party hereby covenants and agrees that the Trademarks, copyrights and other proprietary rights of the other party are and shall remain the sole and exclusive property of that party and neither party shall hold itself out as having any ownership rights with respect to or, except as specifically granted hereunder, in any other rights therein. Any and all goodwill associated with any such rights shall inure directly and exclusively to the benefit of the owner thereof. 7.2 ALFA AESAR hereby grants to NTC a limited non-exclusive license to use the ALFA AESAR Trademarks in the form provided by ALFA AESAR during the Term of this Agreement in accordance with the terms set forth herein. Such license is granted solely in connection with NTC's rights and obligations under this Agreement and, in particular, for the purpose of licensing NTC to use the ALFA AESAR Trademark on the NTC web site as expressly contemplated herein for referral of customers of Research Quantities to ALFA AESAR and is a link/navigational button to the ALFA AESAR Site. All such uses will be subject to ALFA AESAR's approval as to the manner and/or form of use. NTC will not be allowed to use or reproduce the ALFA AESAR Trademark for any other purpose, including the general promotion of the NTC Site, without the prior written approval of ALFA AESAR. 7.3 NTC hereby grants ALFA AESAR a limited non-exclusive license to use, exhibit, excerpt, reproduce, publish, publicly perform and transmit via the Internet and otherwise use the NTC Trademarks in substantially the form as NTC may provide to ALFA AESAR from time to time during the Term of this Agreement in accordance with the terms set forth herein. Such license is granted solely in connection with ALFA AESAR's rights and obligations under this Agreement and, in particular, for the purpose of licensing ALFA AESAR to use the NTC Trademarks in ALFA AESAR's marketing, sales and distribution materials relative to the Products, including without limitation on the ALFA AESAR's Web site as a link/navigational button to the NTC Web site as posted by NTC. All such uses shall be subject to NTC's prior written approval as to manner and/or form of use. 7.4 Except as provided for in this Agreement, each party understands that the Web site links contemplated above to the other party's site may not be used in any manner to provide viewers access to the other party's Site via any caching, framing, layering or other techniques that cause 5 + + + + + +intermediate copying of the other party's Site (or elements thereof) or display of the other party's site or portions thereof in any manner unintended by the owner of the Site. 7.5 Upon termination of this Agreement, ALFA AESAR may continue to advertise and promote the Products, using the NTC's Trademarks and NTC content until ALFA AESAR's inventory depletion. 8. Training; Product Material. 8.1 NTC will provide training to ALFA AESAR's personnel on ALFA AESAR's premises as reasonably necessary, but no less than once annually, at mutually agreed upon times and dates to provide ALFA AESAR's sales and service personnel with adequate knowledge with respect to the Products. 8.2 NTC will provide to ALFA AESAR marketing and technical support for products as reasonably necessary and requested by ALFA AESAR, including providing Product materials which shall include, without limitation, Product specifications, images, and other textual, graphical and/or multimedia content regarding the Products for use in preparing advertising and promotional material. Subject to any limitations which NTC communicates to ALFA AESAR in writing, NTC hereby grants ALFA AESAR a license to use, exhibit, excerpt, reformat, modify, reproduce, publish, publicly perform and transmit via the Internet and otherwise use such NTC content for the purpose of marketing, advertising and promoting the Products, provided that ALFA AESAR obtains NTC's prior written approval for NTC content to be included in such literature. 9. Representations; Limited Warranty; Remedies. 9.1 NTC represents and warrants that i) the execution and delivery of this Agreement has been authorized by all requisite corporate action, ii) subject to Section 2.2, it in under no contractual or other obligation or restriction that is inconsistent with its execution or performance of this Agreement, iii) subject to Section 2.2, NTC will not enter into any agreement, either written or oral, that would conflict with NTC's responsibilities under this Agreement, iv) the Products do not infringe the intellectual property rights of any third party and NTC is not aware of any infringement claims relating to the Products, v) it will comply with all applicable laws, rules, regulations of any US or foreign laws, rules, or regulations in the manufacture and supply of Product, and vi) Products sold hereunder will be in compliance with the current Product description set forth in Schedule A, as amended from time to time by agreement of the parties. NTC shall further grant to ALFA AESAR the same warranty, as set forth in NTC's General Terms and Conditions of Sale for its products set forth in Schedule B. The foregoing warranties shall apply only to, and is intended for the benefit of, ALFA AESAR's customers. 9.2. Subject to the protocol in Section 5.1, ALFA AESAR may return to NTC any Product that is defective or that fails to comply with the purchase order provided by ALFA AESAR. NTC shall return to ALFA AESAR as promptly as possible, a working replacement or, in the event such replacement is not possible or at ALFA AESAR's election, it shall credit ALFA AESAR's account for the invoiced price and shipping charges of the defective Product. The 6 + + + + + +correction of such defective Product shall be at no cost to ALFA AESAR. The cost of shipping the replacement Product back to ALFA AESAR shall be paid by NTC. THE CORRECTION OF SUCH DEFECT BY REPAIR OR CREDITING ALFA AESAR'S ACCOUNT FOR THE COST OF THE PRODUCT IN THE MANNER SET FORTH ABOVE SHALL CONSTITUTE THE SOLE AND EXCLUSIVE REMEDY OF DISTRIBUTOR WITH RESPECT TO ANY WARRANTY GIVEN HEREIN RELATING TO ANY PRODUCT SOLD OR DELIVERED HEREUNDER. 9.3 ALFA AESAR represents and warrants that i) the execution and delivery of this Agreement has been authorized by all requisite corporate action, ii) it is under no contractual or other obligation or restriction that is inconsistent with its execution or performance of this Agreement, iii) ALFA AESAR will not enter into any agreement, either written or oral, that would conflict with ALFA AESAR's responsibilities under this Agreement, iv) it will comply with applicable safety laws and regulations for the repackaging and storage of Products, and v) excepting such warranties provided by NTC herein, it will make no warranties or other representations of any kind about the merchantability or fitness for any particular purpose of any Products, whether used alone or in connection with any other substance. 10. Indemnification. 10.1 NTC shall protect, defend, indemnify and hold ALFA AESAR, its directors, officers, employees, and agents harmless from any and all claims, actions, causes of action, liabilities, losses, damages, costs or expenses, including reasonable attorneys' fees, which directly or indirectly arise out of or relate to i) NTC's breach of warranties in Section 9.1, or ii) NTC's gross negligence or willful misconduct arising out of its manufacture, sale or transfer of the Products to ALFA AESAR, excepting indemnification for which ALFA AESAR is obligated under 10.3. 10.2 ALFA AESAR agrees to give NTC (i) prompt written notice of any claims made for which NTC might be liable under the foregoing indemnification, and (ii) the opportunity to defend, negotiate, and settle such claims. ALFA AESAR shall provide NTC with all information in its possession, all authority, and all assistance reasonably necessary to enable the indemnifying party to carry on the defense of such suit; provided, however, that each party shall have the right, at its own expense, to retain its own counsel to defend itself in such suit. 10.3 ALFA AESAR shall protect, defend, indemnify and hold NTC, its directors, officers, employees, and agents harmless from any and all claims, actions, causes of action, liabilities, losses, damages, costs or expenses, including reasonable attorneys' fees, which directly or indirectly arise out of or relate to i) ALFA AESAR's breach of warranties in Section 9.3, (iii) ALFA AESAR's gross negligence or willful misconduct arising out of its sale or transfer of the Products to ALFA AESAR's customers, excepting indemnification for which NTC is obligated under 10.1. 10.4 NTC agrees to give ALFA AESAR (i) prompt written notice of any claims made for which ALFA AESAR might be liable under the foregoing indemnification, and (ii) the opportunity to defend, negotiate and settle such claims. NTC shall provide ALFA AESAR with all information in its possession, all authority, and all assistance reasonably necessary to enable the indemnifying party to carry on the defense of such suit; provided, however, that each party shall have the right, at its own expense, to retain its own counsel to defend itself in such suit. 7 + + + + + +11. Relationship and Conduct of Business. 11.1 ALFA AESAR shall use its reasonable efforts and devote such time as may be reasonably necessary to sell and promote the sale of Products within the Territory. 11.2 ALFA AESAR agrees not to manufacture, buy, sell, distribute, deal in or be the agent for any products with the specifications of any of the Products, excluding any preexisting ALFA AESAR products. 12. No Joint Venture. 12.1 This Agreement does not in any way create the relationship of franchisor and franchisee, joint venture, partnership, employment or principal and agent between ALFA AESAR and NTC. Neither party, nor any person acting on behalf of a party, is or shall be considered an employee of the other party for any reason whatsoever, and does not and shall not have any rights to, or participate in, any pension or welfare plans, or any other benefits which now or hereafter maintains for or provides to its employees. Neither party, or any person acting on behalf of a party, is or shall be deemed to be the legal representative or agent of the other party for any purpose whatsoever, and is not authorized to transact business, incur obligations, express or implied, or otherwise act in any manner, in the name or on behalf of the other party, or to make any promise, warranty or representation with respect to Products (except as provided herein by NTC or as NTC otherwise expressly approves as to its Products) or any other matter in the name of or on behalf of the other party. 13. Term. 13.1 The initial term of this Agreement shall be for a period of five (5) years from the date first set forth above and shall thereafter automatically renew for additional two (2) year terms unless a party provides the other party with notice of non-renewal no less than 6 months prior to the expiration of the initial term or any renewal term unless earlier terminated as follows: 13.1.1 In the event of material breach, the non-breaching party shall give the breaching party sixty (60) days written notice of such breach. If substantial efforts to cure the breach are not taken within the sixty (60) day notice period, the non-breaching party may, at its sole discretion, terminate the agreement. 13.1.2 In the event a party becomes insolvent or if a party is declared bankrupt or makes an assignment for the benefit of creditors or in the event a receiver is appointed or any proceeding is demanded by, for or against a party under any provision of any bankruptcy law which is not withdrawn within sixty (60) days, the other party to this Agreement shall have the sole right to immediately terminate; or 13.1.3 By either party for any reason by providing six (6) months prior written notice expressly terminating this Agreement. Such notice may be by facsimile transmission or other written communication. 8 + + + + + +13.2 Termination of this Agreement shall not affect the rights or obligations of the parties accrued as of the date of termination. The provisions of Sections 6, 9, 10, 15 will survive termination of the Agreement. 13.3 Upon termination of this Agreement for any reason, ALFA AESAR may i) return its current inventory of Products for reimbursement by NTC or ii) keep its current inventory of Products and continue to sell such Products pursuant to the terms hereof until depletion of inventory. Upon termination of this Agreement, NTC shall promptly refund to ALFA AESAR all outstanding credits accrued on ALFA AESAR's account. 14. Insurance. Each party agrees to maintain and provide the other with evidence of insurance coverage for comprehensive general liability in an amount no less than $2,000,000.00 U.S. dollars. 15. Confidentiality. The parties agree as follows; "Confidential Information" shall mean trade secret, technical, commercial, or financial information and all other nonpublic proprietary or confidential information. Each party receiving Confidential Information from the other party agrees to maintain in confidence and not divulge such Confidential Information, in whole or in part, to any third party, including subsidiaries or affiliates, licensees or clients anywhere, and not make use of such Confidential Information other than in relation to its performance under this Agreement. This obligation shall not apply to: (i) Confidential Information which at the time of disclosure by the disclosing party is in the public domain; or (ii) Confidential Information which, after disclosure by the disclosing party, becomes part of the public domain by publication or otherwise, other than by an unauthorized act or omission by the receiving party; (iii) Confidential Information which receiving party can show by contemporary written records was in its possession at the time of the disclosure and which was not acquired, directly or indirectly from disclosing party; or (iv) Confidential Information which receiving party rightfully receives from a third party and which was not acquired, directly or indirectly, from the disclosing party; (v) information which is developed independently without reference to the Confidential Information of the other party; or (v) Confidential Information which, if disclosed in written or other tangible form, is not marked "Confidential", or if disclosed orally is not summarized in a writing identifying the Confidential Information and submitted to the receiving party within thirty (30) days of the oral disclosure; or (vi) Confidential Information which is compelled by law to be disclosed by the receiving party, provided that the receiving party shall use its best efforts to give the disclosing party ten (10) days prior written notice of any such compelled disclosure. Each party agrees that it shall restrict its disclosures of the disclosing party's Confidential Information within its own organization to those persons having a need to know it for the purposes of performance under this Agreement and that such persons shall be advised of the obligations of confidentiality set forth herein and shall be obligated in like fashion. Upon request on termination or expiration of this Agreement, the receiving party shall promptly return to the disclosing party all Confidential Information and shall retain no copies except that one copy may be retained for purposes of determining such receiving party's compliance with the terms of this paragraph. 16. Disputes and Arbitration. The parties shall first seek to resolve any dispute by negotiations between their senior executives. When a party believes there is a dispute under this Agreement, that party will give the other party written notice of the dispute. Failing settlement of the dispute within 60 days of notice, either party may initiate binding arbitration proceeding; by 9 + + + + + +written notice to the other party, provided however, no dispute arising from any actual or threatened breach of any provisions in Sections 10 or 15 of this Agreement shall be subject to Arbitration. However, any other claims or disputes arising hereunder, including the construction or application of this Agreement, shall be settled by arbitration before a single arbitrator in accordance with the Rules for Commercial Arbitration of the American Arbitration Association ("AAA") then in force. The place of arbitration shall be the location of the party hereto against whom the claim is made. If the parties cannot agree on an arbitrator within 10 days after demand by either of them, then the arbitrator shall be selected pursuant to the AAA's Commercial Arbitration rules. The decision of the arbitrator shall be final and binding upon the parties and may be submitted to any court of competent jurisdiction for entry of a judgment thereon in accord with the Federal Arbitration Act or the Uniform Arbitration Act. The expense of the arbitration shall be shared equally by both parties. Each party shall bear its own "other" costs, i.e. fees and costs of its own lawyers and witnesses. 17. Notices. Any notice required or permitted to be given hereunder shall be deemed to have been duly given if delivered by hand, overnight courier delivery or mailed, certified and registered mail, with postage prepaid to the addresses first set forth above or at such other addresses as either party may designate in writing to the other, and if to ALFA AESAR with a copy to Johnson Matthey, 435 Devon Park, Suite 600. Wayne PA 19087, Attention: Vice President & General Counsel. This section is not intended to govern the day-to-day business communications necessary between the parties in performing their duties, in due course, under the terms of this Agreement. 18. Severability. The provisions of this agreement shall be severable, and if any provision of this Agreement is held to be invalid or unenforceable, it shall be construed to have the broadest interpretation which would render it valid and enforceable. Invalidity or unenforceability of one provision shall not affect any other provision of this Agreement. 19. Entire Agreement. This Agreement contains the entire agreement with respect to the subject matter hereof, and there are no other agreements or understandings, express or implied, written or oral, as to the subject matter hereof. This Agreement may not be amended or altered except by a written instrument signed by both parties, expressly stating that it is intended as an amendment hereto. No purchase order or other written order or acknowledgment issued by either party shall serve to vary the terms and conditions of this Agreement, or otherwise alter the obligations of the parties provided herein. 20. Waiver. The waiver by either party of any breach or failure to enforce any of the terms and conditions of this Agreement at any time shall not in any way affect, limit or waive either party's rights thereafter to enforce and compel strict compliance with every term and condition of this Agreement. 21. Counterparts. This Agreement may be executed in one or more counterpart copies, each of which shall be deemed an original and all of which shall together be deemed to constitute one agreement. 22. Governing Law. This Agreement shall be governed by and interpreted under and in accordance with the laws of the State of Delaware without regard to principles of conflicts of laws. 10 + + + + + +23. Public Announcements. Upon execution and at any time during the term of this Agreement, the parties shall cooperate in preparing a joint press release announcing this Agreement and the availability of NTC Products in Research Quantities through ALFA AESAR, provided that no such joint press release shall be issued without both parties' prior approval. 24. Headings. The headings in this Agreement are for convenience only and do not in any way limit or amplify the terms or conditions of this Agreement. IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date first set forth above. NANOPHASE TECHNOLOGIES CORPORATION JOHNSON MATTHEY CATALOG COMPANY, INC. + +By: /s/ W. Ian Roberts By: /s/ Barry Singelais W. Ian Roberts Barry Singelais V.P. U.S. & International Sales General Manager + +Dated: October 14, 2005 Dated: October 24, 2005 11 + + + + + +Schedule A List of Products to be offered by ALFA AESAR. Quantities and NTC pricing to ALFA AESAR are included. All prices are USD, FOB Romeoville IL, net 30. Product Specification Nanopowders: Name + + + +Product Code + + + +Quantity + + + +Price/kg + +NanoTek® Aluminum Oxide 0115 [***] $[***] NanoDur™ Aluminum Oxide 0119 [***] $[***] NanoTek® Antimony Tin Oxide 2400 [***] $[***] NanoArc® Bismuth Oxide EXP 0250 [***] $[***] NanoArc® Copper Oxide EXP 0502 [***] $[***] NanoTek® Indium Tin Oxide 0600 [***] $[***] NanoArc® Cosmetic Iron Oxide EXP 0807 [***] $[***] NanoArc® Magnetic Iron Oxide EXP 0806 [***] $[***] NanoTek® Tin Oxide 1400 [***] $[***] NanoGard® Zinc Oxide 1700 [***] $[***] NanoTek® Zinc Oxide 1701 [***] $[***] NanoTek® Zinc Oxide C1 1716 [***] $[***] NanoTek® Zinc Oxide C2 EXP 1726 [***] $[***] + +Nanoparticle dispersions: Name + + + +Product Code + + + +Quantity + + + +Price/kg + +NanoDur™ X1121W, 50wt% EXP 0187 [***] $[***] NanoDur™ X1130PMA, 50wt% EXP 0151 [***] $[***] NanoShield® ZN-2000, 50wt% EXP 1754 [***] $[***] NanoShield® ZN-3010, 50wt% EXP 1769 [***] $[***] NanoTek® Z1102PMA, 50wt% EXP 1707 [***] $[***] NanoTek® AL-6081, 23wt% EXP 0180 [***] $[***] NanoTek® AL-6051, 23 wt% EXP 0142 [***] $[***] NanoTek® CE-6042, 18wt% 0311 [***] $[***] NanoTek® CE-6080, 20wt% 0315 [***] $[***] NanoTek® CE-6082, 18wt% 0314 [***] $[***] NanoTek® CE-6086, 18wt% EXP 0333 [***] $[***] + +*** CONFIDENTIAL TREATMENT REQUESTED—This confidential portion has been omitted from this document and filed separately with the Commission. 12 + + + + + +Schedule B NANOPHASE TECHNOLOGIES CORPORATION STANDARD TERMS AND CONDITIONS 1. General Terms: As used in these Terms and Conditions, the terms (a) "Seller" shall mean Nanophase Technologies Corporation and (b) "Buyer" shall mean the party ordering shipment of Seller's products under the Order. These Terms and Conditions, including the provisions on the face hereof, constitute the exclusive contract between the parties for the products provided by Seller ("Order" or "Agreement"). Seller will be deemed to have accepted this Order when Seller returns an acknowledged copy of this Order, or, at Seller's option, when Seller begins substantial performance under this Order. Buyer accepts this Order by acknowledging a copy of this Order, by confirming this Order by its purchase order, purchase requisition or confirmation, or by accepting for shipment the products hereunder. Notwithstanding the manner in which Buyer accepts, Buyer's acceptance is limited exclusively to the acceptance of Seller's terms and conditions set forth in this Order only. Seller hereby rejects any proposal by Buyer for additional or different terms in connection with the products or services provided. Buyer may acknowledge this Order by purchase order, but any and all terms, conditions and provisions contained in said purchase order, acknowledgment form or other communications with respect to the transaction contemplated by this Order, or subsequent to the date hereof, are agreed to be superfluous and without any force and effect. This Order, which includes all terms and conditions hereof, is intended to be the exclusive and final statement of the terms and understandings relative to the subject matter hereof, merging herein and superseding all negotiations and prior written or oral agreements between the parties as to the subject matter of the purchase of the products hereunder. There are no promises, representations or understandings made in connection with this Order or contemporaneous with the execution hereof, except as set forth herein. 2. Prices and Taxes: All prices are set forth on the face of this Order. Seller is entitled to defer shipment of products in the event all amounts due it under this or any other Agreement are not paid in full. All payments shall be made to Seller at its offices. The failure to make prompt payment shall be a material breach of this Agreement. The price of the products specified in this Order does not include federal taxes, state or local sales taxes, value added taxes, use taxes or occupational taxes. Unless prohibited by law, Buyer is responsible for and shall pay all applicable sales, use, occupational, excise, value added or other similar taxes applicable to the manufacture, sale, price, shipment or use of the products provided by Seller. 3. Delivery and Risk of Loss: All sales are FOB Seller's premises in Burr Ridge or Romeoville, Illinois. Seller shall have no liability or responsibility for the late or non-shipment of products hereunder. Title to, risk of loss, destruction of or damage to the products shall be Seller's until delivery of the products to a carrier at the Seller's premises in Burr Ridge, Illinois. Thereafter, Buyer shall be fully responsible for and assume all ownership, risk of loss, destruction of or damage to the products. Loss or damage to the products after title and risk of loss have passed to Seller will not release or excuse Buyer from its obligations under this Order to Seller, including the obligation to make full payment. 4. Short Shipments/Damage Claims: Seller will endeavor to ship all Orders complete or as complete as reasonably possible. Seller will, however, ship incomplete orders upon written authorization by Buyer. In that event, Seller shall have no liability for short, incomplete or delayed orders. All damage claims shall be made within fourteen (14) days of delivery and shall be in writing. 5. Rejection and Revocation of Acceptance: Any rejection or revocation of acceptance by Buyer (a) must be made within thirty (30) days of the products being made available for shipment to Buyer, (b) any attempted rejection or revocation of acceptance made thereafter shall be null and void, and (c) any rejection or revocation of acceptance shall comply with Seller's return protocol. + + + + + +6. Compliance with Governing Laws: Buyer warrants that its performance hereunder, including the use of the products hereunder, shall comply with all applicable state, federal and foreign law, regulations, environmental regulations, statutes or requirements, including, but not limited to, FDA approvals or any other approvals or certifications required by law 7. Assignment and Modification: The rights and obligations of the parties under this Agreement shall not be assignable unless consent to the assignment is in writing and signed by the parties. This Order shall not be modified, altered or amended in any respect except by a writing signed by the parties. Any variation, modification, or addition to the terms set forth in this Order shall be considered a material modification and shall not be considered part of this Agreement. 8. Limited Warranty and Disclaimer of All Other Warranties: EXCEPT FOR THE EXPRESS WARRANTY, IF ANY, THAT THE PRODUCTS COMPLY WITH THE SPECIFICATIONS IDENTIFIED IN WRITING ON THE FACE OF OR ACCOMPANYING THIS ORDER, SELLER MAKES NO EXPRESS OR IMPLIED WARRANTIES IN THIS ORDER OR OTHERWISE. TO THE FULLEST EXTENT PERMITTED BY LAW, SELLER DISCLAIMS ALL WARRANTIES, WRITTEN, EXPRESS OR IMPLIED, INCLUDING ALL WARRANTIES OF MERCHANTABILITY AND/OR FITNESS FOR A PARTICULAR PURPOSE. SELLER EXPRESSLY DISCLAIMS ANY AND ALL LIABILITY TO BUYER FOR ANY CONSEQUENTIAL DAMAGES, DAMAGES FOR LOSS OF USE, LOSS OF PROFITS, INCOME, OR REVENUE, LOSS OF TIME OR INCONVENIENCE, LOSS OR DAMAGE TO ASSOCIATED EQUIPMENT, COST OF SUBSTITUTED OR REPLACEMENT EQUIPMENT, LOSS TO FACILITIES, LOSS OF CAPITAL, LOSS OF SERVICES OR ANY OTHER INCIDENTAL, CONSEQUENTIAL OR SPECIAL DAMAGE ARISING OUT OF THIS ORDER OR THE OPERATION, FUNCTION OR CHARACTERISTICS OF THE PRODUCTS PURCHASED HEREUNDER OR OTHERWISE PROVIDED BY SELLER. IN THE EVENT THAT PRODUCTS DO NOT SATISFY SPECIFICATIONS, THEY WILL BE REPLACED, AT SELLER'S OPTION, WITH PRODUCTS THAT DO SATISFY THE SPECIFICATIONS AT SELLER'S SOLE EXPENSE. SAID REPLACEMENT IS THE SOLE AND EXCLUSIVE REMEDY OF BUYER. 9. Limitation of Liability: To the fullest extent permitted by law, the parties waive and relinquish any claims, demands, causes of action or recoveries for punitive damages, exemplary damages, or statutory damages. Seller shall not be liable for indirect, special, incidental or consequential damages arising under this Agreement or otherwise with respect to the sale of the products, including any lost revenues or profits, consequential and/or incidental damages, business interruption or damage to business reputation, regardless of the theory upon which any claim may be based, including any statutory causes of action or claims. In no event will Seller's entire liability to Buyer, including any liability in the event the exclusive remedy set forth in this Agreement fails of its essential purpose, exceed the purchase price actually paid by Buyer for the products hereunder, or any defective portion thereof, whichever is the lesser amount. 10. Force Majeure: Seller shall have no liability or obligation to Buyer of any kind, including but not limited to any obligation to ship products, arising from any delay or failure to perform all or any part of this Order as a result of causes, conduct or occurrences beyond Seller's reasonable control, including, but not limited to, commercial impracticability, fire, flood, act of war, civil disorder or disobedience, act of public enemies, terrorist acts, terrorism generally affecting commerce, problems associated with transportation (including car or truck shortages), acts or failure to act of any state, federal or foreign governmental or regulatory authorities, labor disputes or strikes. 11. Relationship: The relationship between Seller and Buyer shall be that of independent contractors. Seller, its agents and employees, shall under no circumstances be deemed the employees, distributors, franchisees, agents or representatives of Buyer. + + + + + +12. Default: The failure of Buyer to perform any obligations hereunder, including without limitation, the payment of the purchase price for products and all other amounts due hereunder, the failure to materially perform other agreements between Buyer and Seller, or Buyer's bankruptcy or insolvency, shall constitute a default under this Agreement and shall, in addition to any other remedies, afford Seller all of the remedies of a secured party under the Uniform Commercial Code of the State of Illinois. In the event of default, Seller may, in addition to pursuing any of the remedies provided by law, equity or as set forth in this Agreement, refuse to make available for shipment products under this or any other agreement relating to the products, and may also cancel this Order and any pending orders without liability to Buyer. It is expressly understood that Seller's remedies are cumulative to the fullest extent permitted by law. 13. Attorneys' Fees: In the event it becomes necessary for Seller to enforce the terms and conditions of this Order by litigation or otherwise, or to defend itself in any Controversy (as defined herein), litigation, claim, demand or cause of action arising out of or as a result of this Order or the products or services provided hereunder, and if Seller is the substantially prevailing party in said Controversy, litigation, claim, demand or cause of action, then Seller shall be entitled to recover, in addition to any other relief granted or damages assessed, its reasonable attorneys' fees, expert witness fees, costs, and all expenses of litigation. 14. Waiver: No claim or right arising out of a breach of this Order can be discharged in whole or in part by a waiver or renunciation of the claim or right unless the waiver or renunciation is supported by consideration and is in writing signed by the aggrieved party. 15. Severability: If any term, covenant, warranty or condition of this Order, or the application thereof to any person or circumstance shall, to any extent, be held or deemed invalid or unenforceable, the remainder of this Order or the application of such term, covenant or provision, to persons or circumstances other than those to which it is held invalid or unenforceable, shall not be affected thereby, and each remaining term, covenant or provision of this Order shall be deemed valid and enforced to the fullest extent permitted by law. 16. Indemnification: To the fullest extent permitted by law, Buyer shall defend, indemnify and hold Seller harmless from any and all claims, demands, subrogation claims by Buyer's insurers, causes of action, liabilities, fines, regulatory actions, seizures of product, losses, costs, expenses (including, but not limited to attorneys' fees, expert witness expenses and litigation expenses) (hereinafter "Claim"), arising from or in connection with any Claim asserted against Seller for any damage, injury, death, loss, property damage, environmental liability, or any other Claim, whether in tort, contract, or otherwise, relating to this Order, the business relationship between the parties or the goods provided hereunder. Notwithstanding the foregoing, Buyer has no indemnity obligation to Seller with respect to any Claims that result solely from the negligence of Seller and this indemnity provision does not purport to indemnify Seller solely for its own negligence, but rather for the negligence or conduct, whether sole or concurrent, of Buyer. Buyer, for itself and its insurers, expressly waives any and all limitations or liability caps, if any, on Buyer's contribution liability to Seller, and any and all statutory or common law lien rights or Claims against Seller arising from any applicable workers compensation or disability acts, which Buyer might or could assert against Seller or Seller's insurers in the event of the personal injury or death of Buyer's employees, representatives or servants. Without limiting the foregoing, Buyer, for itself and its insurers, also waives any liens, claims or other rights it may have as a result of being subrogated to any rights of its employees, representatives or servants. 17. Insurance: Buyer shall obtain comprehensive general liability coverage, including contractual liability coverage, naming Seller as an additional named insured, in amounts sufficient to fully protect Seller under this Agreement from loss, damage or casualty caused by Buyer or incurred by Seller under this Agreement. 18. Governing Law and Forum Selection: This agreement shall be governed by and subject to the internal laws (exclusive of the conflicts of law provisions) and decisions of the courts of the State of Illinois. The parties consent to the exclusive jurisdiction of the federal court in Chicago, Illinois or the state court located in DuPage County, Illinois with respect to all litigation, claims, causes of action, demands, Controversies (as defined + + + + + +herein) or disputes among the parties. The only exception to this forum selection provision is a claim by Seller seeking the replevin of the products in the event the courts specified in this provision will not or cannot assert jurisdiction. All counterclaims, if any, in connection with the replevin claim, shall be subject to this forum selection provision. \ No newline at end of file diff --git a/full_contract_txt/NATIONALPROCESSINGINC_07_18_1996-EX-10.4-SPONSORSHIP AGREEMENT.txt b/full_contract_txt/NATIONALPROCESSINGINC_07_18_1996-EX-10.4-SPONSORSHIP AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..aff8bc271ce95f7b98a498a77f47140de3bef8a9 --- /dev/null +++ b/full_contract_txt/NATIONALPROCESSINGINC_07_18_1996-EX-10.4-SPONSORSHIP AGREEMENT.txt @@ -0,0 +1,223 @@ +1 EXHIBIT 10.4 + + SPONSORSHIP AGREEMENT --------------------- + + This Sponsorship Agreement is made between National Processing Company ("NPC") and National City Bank of Kentucky ("NCB") effective June 30, 1996 ("Effective Date"). + + WITNESSETH: + + WHEREAS, NCB is a member in good standing of Visa U.S.A., Inc. ("Visa") and a member in good standing of MasterCard International, Incorporated ("MasterCard"); and + + WHEREAS, NPC, pursuant to its arrangements with NCB, a member of Visa and MasterCard, provides data processing, settlement and authorization services for merchants who participate in the Visa and MasterCard bankcard programs (such activities being referred to as "Merchant Bankcard Business"); and + + WHEREAS, NPC and NCB have concluded that it is in their mutual best interests for NPC to continue to act as an agent of NCB for purposes of providing data processing, settlement and authorization services for merchants with respect to their Visa and MasterCard transactions and in connection with such agency arrangement, for NPC to continue to use NCB for certain banking relationships; and + + WHEREAS, the parties desire to formalize the terms and conditions on which NPC will act as agent of NCB, and NPC will perform certain functions, for purposes of conducting Merchant Bankcard Business; + + NOW, THEREFORE, in consideration of the premises, the representations, acknowledgments, and mutual agreements set out in this Agreement and other good and valuable consideration, the receipt and sufficiency of which are acknowledged by the parties, NPC and NCB represent, acknowledge and agree as follows: + + ARTICLE I - MERCHANT PROCESSING, SETTLEMENT AND AUTHORIZATION SERVICES ---------------------------------------------------------------------- + + 1.1 APPOINTMENT AS AGENT. NCB appoints NPC, and NPC agrees to serve, as NCB's sole agent (i) to provide authorization, processing and settlement services with respect to Visa and MasterCard transactions ("Merchant Processing Services") to merchants who desire to receive Merchant Processing Services from NCB or NPC ("Merchants") and (ii) to enter into contracts with merchants ("Merchant Contracts") for the provision of Merchant Processing Services as agent of NCB; provided, however, that nothing herein shall limit NPC's right to provide, as agent for other members of Visa and MasterCard, Merchant Processing Services to merchants who desire to receive such services from NCB or others. NCB agrees that NPC may use NCB's name and its BIN, ICA and any other Visa and MasterCard identification numbers to the extent necessary or appropriate to perform the Merchant Processing Services. + + 1.2 PERFORMANCE BY NPC. NPC shall have full responsibility for the proper performance of the Merchant Processing Services under each Merchant Contract except for the obligations and responsibilities which NCB assumes hereunder. Without limiting the foregoing, NPC shall provide authorization services to the Merchants, perform data capture services with respect to all credit card transactions by the Merchants, submit such data to the applicable Interchange, process retrievals and chargebacks, and direct the settlement of such transactions. In providing Merchant Processing Services, NPC agrees to comply with: (i) all Visa and MasterCard Bylaws, Manuals, Operating Regulations and other written materials as they may from time to time be amended which bind or apply to NCB as a member of Visa and MasterCard with respect to Merchant Processing Services or to NPC as a third party processor with respect to Merchant Processing Services ("Rules"), (ii) all agreements between Merchants and NCB with respect to Merchant Processing Services, and (iii) all applicable laws and regulations, whether state or federal. NPC agrees to enter into any agreements with Visa and MasterCard necessary to perform this Agreement + + 1 2 + +in accordance with its terms, subject to the rights of NPC to terminate this Agreement pursuant to Section 6.2. Without in any way limiting the foregoing, NPC agrees as follows: (a) any material containing any of the Visa Card Program Marks used by it in performing this Agreement will prominently identify NCB by name and city adjacent to such marks and, in identifying NPC, will specify that NPC is acting as agent or representative of NCB; (b) any solicitation material used by NPC shall clearly disclose that NPC is acting as agent or representative of NCB; and (c) NPC acknowledges that it does not have authority to permit the use of Visa Card Program Marks by any of its own agents. NPC and NCB agree that the foregoing clauses shall be deemed modified from time to time to reflect any changes in Visa's requirements applicable to NPC's use of Visa Card Program Marks and solicitation material or to the terms required herein. + + + + + + 1.3 MERCHANT CONTRACTS. NPC, as agent of NCB, shall be responsible for establishing the terms and conditions of the Merchant Contracts, including all changes thereunder, subject to Section 1.7 below. Without in any way limiting the authority granted in Section 1.1, NCB hereby authorizes NPC to use NCB's name to the extent necessary or appropriate in accordance with the terms of this Agreement to enter into and to renew Merchant Contracts, to modify Merchant Contracts to the extent necessary to assign them to NCB, to perform the Merchant Contracts and to take other necessary or appropriate actions with respect to the Merchant Contracts, all in accordance with requirements of Visa and MasterCard. As between NPC and NCB, NPC shall be responsible for all credit, fraud and other risks associated with each Merchant Contract. + + 1.4 AUTHORIZATION SERVICES. NPC, or its designated third parties, shall provide the Merchants with telephonic or electronic authorization for all Visa and MasterCard transactions exceeding any floor amount specified pursuant to such Merchant's contract. + + 1.5 PROCESSING AND SUBMISSION TO INTERCHANGE. NPC shall process all data received by it reflecting the Visa and MasterCard sales transactions and any related return credits by the Merchants and shall submit to the applicable Visa or MasterCard interchange networks ("Interchange") "Settlement Files" reflecting such transactions and directing the applicable Interchange to pay the net amount due to an account established by NCB for the purpose of receiving all settlement amounts paid by Visa and MasterCard with respect to the transactions processed by NPC pursuant to this Agreement and effecting appropriate payments to the Merchants and NPC in accordance with this Agreement ("the NCB Account"). + + 1.6 ACCOUNT SETTLEMENT. + + (a) PAYMENT INSTRUCTIONS. NPC shall prepare and transmit to NCB, in a mutually acceptable format, instructions specifying the payments to be made from the NCB Account to the Merchants and to NPC pursuant to this Agreement (the "Payment Instructions"). Payment Instructions shall be delivered to NCB in accordance with the schedule and procedures established from time to time by the parties. + + (b) PAYMENT. In accordance with the Payment Instructions, NCB shall pay the Merchants on a timely basis the net settlement amounts due to them and shall credit NPC's account at NCB for the fees due to NPC hereunder. Such payments to Merchants shall be effected through mutually acceptable procedures which are consistent with the payment procedures established pursuant to the Merchant Contracts. NPC shall perform on NCB's behalf all of the administrative and bookkeeping functions necessary to effect payment in such manner. + + 1.7 DUE DILIGENCE BY NCB; NPC'S STANDARDS. + + (a) DUE DILIGENCE PRIOR TO EXECUTION OF AGREEMENT. Senior management officials of NPC have met with senior management officials of NCB and have discussed with the NCB officials the credit and financial review procedures and standards used by NPC in deciding whether to accept or retain Merchants as customers for Merchant Processing Services, as well as NPC's experience with respect to any losses resulting from financial failures or fraud by its merchant customers. Schedule A attached hereto outlines the credit and financial review procedures and standards currently used by NPC. NPC represents + + 2 3 + + to NCB, and has provided NCB's senior management with financial information showing, that for 1994 and 1995 combined, the losses incurred by NPC as a result of financial failures or fraud by its merchant customers have averaged less than .60% of NPC's net revenues from Merchant Processing Services. + + (b) CONTINUING DUE DILIGENCE: NPC'S RISK STANDARDS. NPC shall keep NCB's senior management advised of any material changes in the credit and financial review procedures and standards and of any material exceptions to such procedures and standards which may from time to time be made with respect to particular Merchants. NPC shall not make any such changes or exceptions until its management committee has approved such changes or exceptions after carefully evaluating the relative advantages and disadvantages expected to result from such changes or exceptions. NPC also shall continue to advise senior management officials of NCB on a timely basis with respect to any substantial loss (meaning any loss of $1,000,000 or more with respect to a single Merchant or $3,000,000 or more in the aggregate in any twelve month period) incurred by NPC as a result of any financial failures or fraud by its merchant customers. If NCB's senior management officials reasonably determine from time to time that any changes are needed in NPC's credit and financial review procedures and standards or in the implementation thereof in order to avoid any significant increase in NPC's losses from financial failures or fraud by its merchant customers, then NCB shall so notify NPC in writing, and NPC and NCB shall mutually agree upon, and NPC shall implement appropriate changes. + + (c) DUE DILIGENCE BY NCB FOR NPC PRICING STANDARDS. Senior management officials of NPC have met with senior management officials of NCB and have discussed with the NCB officials the pricing procedures and standards used for Merchants as customers for Merchant Processing Services. NPC shall keep NCB's senior management advised of any + + + + + + material changes in its pricing procedures and standards and of any material exceptions to such procedures and standards which may from time to time be made with respect to particular Merchants. NPC shall not make any such changes or exceptions until its management committee has approved such changes or exceptions after carefully evaluating the relative advantages and disadvantages expected to result from such changes or exceptions. If NCB's senior management officials reasonably determine from time to time that any changes are needed in NPC's pricing procedures and standards or in the implementation thereof, then NCB shall so notify NPC in writing, and NPC and NCB shall mutually agree upon, and NPC shall implement appropriate changes. + + ARTICLE II - AUTHORITY OF JOINT OFFICERS ---------------------------------------- + + 2.1 JOINT OFFICERS. In order to enhance NPC's effectiveness as an agent of NCB, the parties agree and acknowledge that it is desirable for one or more officers of NPC to serve also as an officer of NCB (the "Joint Officers") so that such persons shall have clear authority to represent NCB on matters relating to Merchant Processing Services. Accordingly, the Board of Directors of NCB shall elect the NPC officers named in Schedule B as Contracting Officers of NCB only with respect to matters pertaining to Merchant Processing Services. From time to time during the term of this Agreement, the Board of Directors of NCB may elect other officers of NPC as officers of NCB in addition to or in lieu of the Joint Officers. The authority of each Joint Officer to act as an officer of NCB shall terminate immediately upon termination of this Agreement or the termination or suspension of employment of that person by NPC for whatever reason or the removal of that person by the Board of Directors of NCB as an officer of NCB. + + 2.2 AUTHORITY TO REPRESENT NCB. Each Joint Officer or its designated representative shall have authority to be the designated recipient of all letters, correspondence and other material from Visa and MasterCard to NCB as a member which relate to Merchant Processing Services, to attend as NCB's representative those meetings for members of Visa and MasterCard which relate to Merchant Processing Services, to maintain on behalf of NCB copies of all Merchant Contracts to which NCB is a party, to act generally as the NCB representative with respect to Merchant Processing Services in discussions, meetings and otherwise between NCB as a member and Visa or MasterCard, and to take such other actions on behalf of NCB That may be required by applicable Visa or MasterCard rules to be performed by a member and that are necessary or appropriate in order to perform this Agreement and effect the parties' intent with respect to this Agreement. NPC shall keep NCB, or such other person + + 3 4 + +as may be designated by NCB, advised of all material, non-routine actions taken on behalf of NCB by any of the Joint Officers and shall consult in advance with NCB or such other designated person with respect to any material, non-routine actions to be taken by any of the Joint Officers on behalf of NCB. + + 2.3 COMPENSATION. Except to the extent NCB and NPC otherwise agree, all compensation of the Joint Officers shall be paid by NPC, and NCB shall have no obligation to compensate any of the Joint Officers. + + ARTICLE III - BANKING SERVICES ------------------------------ + + 3.1 MERCHANT PROCESSING - BANKING SERVICES. As soon as practicable after the Effective Date NPC shall enter into agreements or make other mutually acceptable arrangements with NCB pursuant to which NCB will provide those banking services which are necessary for NPC to provide the Merchant Processing Services and which the parties wish NCB to provide. + + 3.2 AUTHORITY TO ESTABLISH BANK ACCOUNTS. Each Joint Officer shall have authority to establish at NCB or any other mutually acceptable financial institution any deposit accounts on behalf of NCB as may be necessary to provide some or all of the Merchant Processing Services contemplated by this Agreement for such periods as NCB and NPC agree. No provision of this Agreement authorizes or shall be construed to authorize any Joint Officer or NPC to incur any debt to NCB or any other financial institution, or to create any overdraft, which NCB is obligated directly or indirectly to repay. + + 3.3 LOANS AND OVERDRAFTS. Nothing in this Agreement shall be deemed to create any obligation on the part of NCB to loan or advance to NPC any amounts in connection with Merchant Processing Services for any period of time. + + ARTICLE IV - FEES AND EXPENSES ------------------------------ + + 4.1 CHARGES TO MERCHANTS. As between NPC and NCB, NPC shall receive all fees, discounts and other amounts payable by Merchants for Merchant Processing Services with respect to Merchant Contracts. + + 4.2 EXPENSES. NPC shall bear all expenses of maintaining facilities and connections necessary to provide Merchant Processing Services except for the facilities and connection maintained by NCB for purposes of effecting payments pursuant to Section 1.6(b). In addition, NPC agrees to pay or reimburse NCB in full all interchange or issuer reimbursement fees on outgoing + + + + + +merchant sales volume, as well as all fee assessments or charges imposed on NCB by Visa or MasterCard as a result of the Merchant Processing Services performed by NPC. Such fees shall be paid by NPC directly when due or shall be paid by NPC to NCB on the banking day immediately prior to the day on which NCB must pay such fees. All such fees, assessments and charges for which NCB seeks payment by NPC shall, upon request, be documented to NPC's reasonable satisfaction as being attributable to NPC's Merchant Processing Services. + + ARTICLE V - INDEMNIFICATION --------------------------- + + 5.1 INDEMNIFICATION. NPC agrees to indemnify, defend and save NCB, its directors, officers and employees harmless from all losses, claims, judgments, awards, penalties, expenses and other amounts of any nature arising out of: + + (a) NPC's failure to perform this Agreement in accordance with its terms, including, but not limited to, the failure to pay expenses, charges and other amounts in accordance with the provisions of this Agreement, + + 4 5 + + (b) The negligent exercise of or the exceeding by any Joint Officer of the authority granted pursuant to this Agreement to act as an officer of NCB, or, + + (c) NCB's grant of authority to NPC pursuant to this Agreement, + +including, but not limited to, all court costs, investigation expenses and the reasonable fees and expenses of separate counsel for NCB selected by NCB, provided, however, that NCB shall not be entitled to indemnification as to amounts arising from the negligence or willful misconduct of NCB. + + ARTICLE VI - COMPLIANCE MODIFICATIONS ------------------------------------- + + 6.1 COMPLIANCE MODIFICATIONS. In the event that: + + (a) the laws, rules and/or regulations or any official interpretations thereof applicable to NCB as a National Bank or the Visa or MasterCard rules and/or regulations or any official interpretations thereof applicable to NCB and the matters covered by this Agreement are modified such that + + (i) any modifications in the relationship or transactions contemplated hereby between NCB and NPC or in the provisions of this Agreement are needed to comply with any such laws, rules, regulations or official interpretations thereof, or + + (ii) some or all of the activities contemplated by this Agreement are prohibited, or + + (b) Visa or MasterCard requires, as a condition to performance of this Agreement, that NPC enter into an agreement with Visa or MasterCard that NPC considers unacceptable, + +then at NPC's request, NCB will cooperate in making any modifications to this Agreement and to the parties' relationship hereunder to the extent any such modifications will permit NPC to continue processing, settling and authorizing bankcard transactions (or continue performing some of such functions) in compliance with the laws, rules, regulations or any official interpretations thereof applicable to NCB as a National Bank and the Visa and MasterCard rules, regulations, and interpretations thereof and any contractual terms required by Visa or MasterCard and acceptable to NPC (any such modifications being referred to as "Compliance Modifications") provided that such Compliance Modifications are reasonable and are not unduly burdensome to NCB, and NPC reimburses NCB for any additional costs reasonably incurred by NCB in connection with such Compliance Modifications. + + 6.2 FAILURE TO MAKE COMPLIANCE MODIFICATION. If NPC does not request any Compliance Modifications or the parties cannot agree upon the terms of any Compliance Modifications, then either party may terminate this Agreement upon prior written notice to the other party effective at the later of: (a) the deadline imposed by Visa or MasterCard for complying with any such rule, regulation, official interpretation or contract requirement or (b) 120 days after actual notice to NPC of such rule, regulation, interpretation or contract requirement. + + ARTICLE VII - TERM AND TERMINATION ---------------------------------- + + 7.1 TERM. The term of this Agreement shall be five years commencing on the Effective Date and ending at the close of business on the fifth anniversary of the Effective Date. This Agreement shall automatically renew for successive one-year terms unless one party gives the other party written notice of non-renewal at least six months prior to automatic renewal. + + + + + + 5 6 + + 7.2 TERMINATION. Either party may terminate this Agreement without penalty and without prejudice to any claims arising prior to termination as follows: + + (a) Upon the written agreement of both parties. + + (b) Upon the other party's breach of this Agreement provided the terminating party has given written notice of the breach to the other party specifying the breach, the action necessary to cure the breach and the breaching party has not cured the breach within five business days after notice is given of any failure by NPC to provide any funds required hereunder to be provided by NPC to pay Merchants or within thirty business days after notice is given of any other breach. + + (c) By NCB immediately upon NPC's voluntary filing of any petition or complaint seeking relief under any federal or state bankruptcy or other debt relief statute or upon an involuntary petition in bankruptcy being filed against NPC if such petition is not dismissed within sixty days after it is filed. + + (d) By NPC immediately in the event that any agreements between NCB and Visa and/or MasterCard or NCB's membership in either such bankcard association shall be terminated or materially limited which termination or material limitation would impair the ability of NPC to authorize, process or settle merchant bankcard transactions. + + 7.3 SURVIVAL. The provisions of Sections 3.3, 4.2, 5.1, 8.1 and 10.6 of this Agreement shall survive any termination. No termination shall prejudice any claim or rights of any party which accrued prior to termination. + + ARTICLE VIII - CONFIDENTIALITY ------------------------------ + + 8.1 CONFIDENTIALITY. In performing this Agreement, each party will have access to confidential information of the other. Each party agrees to hold in confidence and to instruct its employees and agents to hold in confidence all information and materials, in whatever form, reasonably designated as confidential by the party requesting confidentiality. NPC agrees to comply with all laws and regulations relating to confidentiality of customer lists and other information which are applicable to NCB and its agents or to NPC. NCB agrees to comply with all contractual obligations of NPC actually known to NCB and all laws and regulations applicable to NCB or NPC relating to confidentiality of customer lists and other information. + + ARTICLE IX - NOTICES -------------------- + + 9.1 NOTICES. All notices which are required or permitted by this Agreement shall be in writing and shall be (i) delivered personally to the designated addressee, (ii) sent by the United States Mail addressed to the designated person by certified mail, return receipt requested, all postage prepaid, or (iii) sent by overnight delivery service addressed to the designated person, all charges prepaid, or (iv) by other means such as facsimile machine if the designated addressee acknowledges receipt in writing. Notices shall be addressed as follows: + +If to NPC: Louis Parker Executive Vice President National City Processing Company 1231 Durrett Lane Louisville, KY 40285-0001 + + 6 7 + +with copies to: Kurt Knipp Executive Vice President National City Processing Company 1231 Durrett Lane Louisville, KY 40285-0001 + +If to NCB: Peter J. Barrick Senior Vice President National City Bank of Kentucky 101 S. 5th Street Louisville, KY 40202 + +with copies to: Curtis M. Jacobs Senior Vice President and Counsel National City Bank of Kentucky 101 S. 5th Street Louisville, KY 40202 + + + + + +Notices personally delivered are given when received. Notices sent by United States Mail, certified mail, return receipt requested, are given five business days after delivery to the United States Postal Service unless prior actual receipt by the addressee is proven. Notice sent by overnight delivery service is deemed given one business day after delivery to and acceptance by overnight delivery service for next day delivery. Notices sent by other means and acknowledged are deemed given when acknowledged in writing. + + ARTICLE X - MISCELLANEOUS ------------------------- + + 10.1 HEADINGS. The headings are for information and are not part of this Agreement. + + 10.2 ENTIRE AGREEMENT, MODIFICATION. This Agreement and the attachments to it represent the entire agreement of the parties with respect to the subject matter of the Agreement. This Agreement may not be modified except by a written agreement which expressly refers to the Agreement and is signed by both parties. + + 10.3 SEVERABILITY. If any section of this Agreement is deemed void, illegal or unenforceable, that section shall be severed and the balance shall remain in effect. + + 10.4 GOVERNING LAW. This Agreement and its interpretation shall be governed by the laws of the United States and, to the extent not inconsistent therewith, by the laws of the Commonwealth of Kentucky without regard to conflicts of laws rules. + + 10.5 BINDING AGREEMENT, ASSIGNMENT PROHIBITED. This Agreement shall bind the parties, their successors and permitted assigns. Neither party shall assign this Agreement or any rights under it except with the prior written consent of the other. + + 10.6 MONITORING BY NCB. NPC shall admit properly identified and authorized NCB employees and agents onto its premises for purposes of monitoring NPC's compliance with this Agreement. It is understood that such monitoring will occur during normal business hours, will be preceded by reasonable notification to NPC, and must not interfere with NPC's normal operations. + + 7 8 + + IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized officers as of the Effective Date. + + NATIONAL PROCESSING COMPANY + + By: /s/ Mark D. Schatz -------------------------------- Name: Mark D. Schatz ------------------------------ Title: Vice President ----------------------------- + + NATIONAL CITY BANK OF KENTUCKY By: /s/ Peter J. Barrick -------------------------------- Name: Peter J. Barrick ------------------------------ Title: Senior Vice President ----------------------------- + + 8 9 + + SCHEDULE A to the SPONSORSHIP AGREEMENT BETWEEN NCB and NPC dated June 30, 1996 + +1. BUSINESSES GENERALLY NOT SOLICITED. NPC does not generally solicit customers engaged in any of the following businesses, but in special circumstances it sometimes accepts customers engaged in one of these businesses. Such exceptions occur primarily when NPC acquires another processor's customer base or when NPC enters into a processing agreement with an ISO/MSP which maintains merchant customers engaged in such businesses. - Telemarketing (In-bound or out-bound) + + + + + + - Pawn Shops - Door-to-Door Sales - Massage Parlors - Bail & Bond Payments - Business operated out of Residence - Flea Markets - Fulfillment Houses - Timesharing - Travel Clubs/Packages + +2. DOCUMENTATION REQUIRED FOR MERCHANT CUSTOMERS - Merchant Application - all pertinent personal and business information, including previous processor - Site Visitation Report (when applicable) - Bankcard Agreement - signed by Principal/Officer - Personal Guarantee - signed by Principal (when applicable) - Business Financial Statements (when applicable) - Business and/or Personal Income Tax Filings if Financial Statements unavailable (when applicable) - Catalogues, Advertising Copy, etc. - as needed + +3. CREDIT REVIEW PROCEDURES. The following credit review procedures are completed by NPC before a Merchant is accepted as a new customer. These procedures may be repeated with respect to any existing Merchant customer if such Merchant has unusual credit card activity, unusual or higher than normal chargebacks, or if other circumstances arise which, in the judgment of NPC's management, warrant a new or on-going credit review. - Inquire against Terminated Merchant File - Obtain and Review Personal Credit Reports on Principal(s) (when applicable) - Obtain and Review Dun & Bradstreet Report (when applicable) - Review of Financial Statements, Tax Returns and all other pertinent data (when applicable) - Investigation of previous processing relationship + +4. REASONS FOR DECLINING A MERCHANT. - Listed on the terminated merchant file - Insufficient credit history established - Significant derogatory credit - personal or business - Poor financial condition of business - Derogatory report from previous processor - Unacceptable line of business + + 9 10 + + SCHEDULE B to the SPONSORSHIP AGREEMENT BETWEEN NCB and NPC dated June 30, 1996 + + NAME NCB TITLE ---- --------- Tony G. Holcombe Contracting Officer + + Kurt S. Knipp Contracting Officer + + Wayne A. Chatham, Jr. Contracting Officer + + 10 \ No newline at end of file diff --git a/full_contract_txt/NELNETINC_04_08_2020-EX-1-JOINT FILING AGREEMENT.txt b/full_contract_txt/NELNETINC_04_08_2020-EX-1-JOINT FILING AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..de50d1f6fc3cee2984a97e6f5a06e778950c7056 --- /dev/null +++ b/full_contract_txt/NELNETINC_04_08_2020-EX-1-JOINT FILING AGREEMENT.txt @@ -0,0 +1,15 @@ +Exhibit 1 + +JOINT FILING AGREEMENT + +The undersigned hereby agree to jointly prepare and file with the applicable regulatory authorities this Schedule 13G or Schedule 13D and any future amendments thereto reporting each of the undersigned's ownership of securities of the issuer named herein, and hereby affirm that such Schedule 13G or Schedule 13D is being filed on behalf of each of the undersigned pursuant to and in accordance with the provisions of Rule 13d-1(k) under the Securities Exchange Act of 1934. The undersigned acknowledge that each shall be responsible for the timely filing of such amendments, and for the completeness and accuracy of the information concerning her or it contained therein, but shall not be responsible for the completeness and accuracy of the information concerning the other, except to the extent that she or it knows or has reason to believe that such information is inaccurate. + +Dated: March 27, 2020. + +/s/ Shelby J. Butterfield Shelby J. Butterfield + +BUTTERFIELD FAMILY TRUST + +By: /s/ Shelby J. Butterfield Shelby J. Butterfield Co-Trustee + +1 \ No newline at end of file diff --git a/full_contract_txt/NEOMEDIATECHNOLOGIESINC_12_15_2005-EX-16.1-DISTRIBUTOR AGREEMENT.txt b/full_contract_txt/NEOMEDIATECHNOLOGIESINC_12_15_2005-EX-16.1-DISTRIBUTOR AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..896093aa4b938569e614344f635bfe095255eed2 --- /dev/null +++ b/full_contract_txt/NEOMEDIATECHNOLOGIESINC_12_15_2005-EX-16.1-DISTRIBUTOR AGREEMENT.txt @@ -0,0 +1,287 @@ +Exhibit 16.1 + + AUTOMOTIVE REFINISH DISTRIBUTOR AGREEMENT (P.R.China) + +THIS AGREEMENT, made as of the 1st day of December, (the "Effective Date") by and between: + +PPG Paints Trading (Shanghai) Co Ltd hereinafter referred to as ("PPG Shanghai") + +Address : Suite 2512, 5th Floor No. 2 Xin Kang Building, 28 Jia Feng Road Wai Gao Qiao Free Trade Zone Shanghai, P. R. China + +Tel. : (86-21) 6291 3500 + +Fax : (86-21) 6291 2100 + +Business liscence no. : 0537762 + +Legal representative : Viktoras R. Sekmakas and + +NeoMedia Micro Paint Repair hereinafter referred to as ("DISTRIBUTOR") + +Address : 2201 Second Street, Suite 600 Ft. Myers, Florida, 33901 + +Tel. : 239-337-3434 + +Fax : 239-337-3668 + +Business licence no. : 2648151 + +Legal representative : Charles T. Jensen + +WITNESSETH: + +WHEREAS: + +A. PPG SHANGHAI desires DISTRIBUTOR to market and sell PPG's "Deltron" and "ACS" brand products, as hereinafter defined in Section 2 (the "Products"), to the repair chain shops in P.R.China as listed on Appendix 4 (the "Territory"); + +B. DISTRIBUTOR has the means to market Products in the Territory. As soon as Distributor's China subsidary, NeoMeida Micro Paint Repair China, a Wholley Foreign Owned Enterprise ("WFOE") registered under the Chinese laws and regulations, will be established, this title of Distributor will be automatically switched to the WFOE. + +C. PPG SHANGHAI desires to appoint DISTRIBUTOR as a PPG SHANGHAI distributor in the Territory and DISTRIBUTOR desires to be such distributor; and + +D. Accordingly, PPG SHANGHAI and DISTRIBUTOR have reached an agreement as hereinafter set forth. + +In consideration of the mutual covenants and agreements herein contained, the parties hereto, intending to be legally bound hereby, covenant and agree as follows: + +1. APPOINTMENT + +1.1 PPG SHANGHAI does hereby appoint DISTRIBUTOR to distribute in the Territory the Products (as defined in paragraph 2, below) upon the terms and conditions hereinafter set forth. DISTRIBUTOR does hereby accept such appointment. + +1.2 It is agreed that such appointment is nonexclusive and PPG SHANGHAI may, without obligation to pay DISTRIBUTOR any commission or other compensation, make direct sales of Products to other customers in the Territory and/or appoint additional distributors of Products in the Territory. During the term of this Agreement, DISTRIBUTOR shall have the exclusive right for selling the Products to Beijing Sino-US Jinche Yingang Auto Technological Services Limited (the "Auto Center"). PPG Shanghai or any of its direct or indirect affiliates shall not sell any of its products directly to the Auto Center or to any of the Auto Center's affiliates in China or throughout the world, unless PPG Shanghai obtains Distributor's written approval. It is understood and agreed that as used herein the term "PPG" shall mean PPG Industries Inc. and/or one or more affiliated companies of PPG Industries Inc. as the context may require. + +1.3 Notwithstanding anything to the contrary in this Section 1, PPG SHANGHAI may also sell Products to any person or entity located outside the Territory without being obligated to consider whether such Products may be resold in the Territory. DISTRIBUTOR shall not be entitled to any commission or other compensation in such event. + + + + + +1.4 Deleted. + +1.5 DISTRIBUTOR warrants that it will not handle any counterfeit, passing-off products or products other than those purchased directly from PPG SHANGHAI. + +1.6 DISTRIBUTOR warrants and represents that it is a corporation duly organized, validly existing, and in good standing under the applicable laws, that it has full legal right, power, and authority to enter into this Agreement and to consummate or cause to be consummated all of the transactions contemplated hereby, and that the execution, delivery, and/or performance of this Agreement do not or will not conflict with or result in a breach of any provision of any articles of incorporation or by-laws, or any written undertaking to which it is a party or by which it, or any of its assets, may be bound or affected, or result in a violation of any law, regulation, order, or award of any authority or body having jurisdiction over the assets and operations of it. + +2. PRODUCTS + +2.1 The Products and subject matter of this Agreement shall be the products listed below manufactured and sold by PPG SHANGHAI or affiliated companies of PPG SHANGHAI. Additional Products may be added to or deleted from the list at the sole discretion of PPG SHANGHAI: + +(a) Global Deltron Refinish Products. + +(b) ACS Products. + +(c) Ancilliaries confirmed in writing for distribution by PPG SHANGHAI. + +(d) Mixing equipment and related accessories as approved and supplied by PPG SHANGHAI. + +(e) Any other products as PPG SHANGHAI may launch from time to time, at its absolute discretion. + +2.2 Specific product codes for above category a, b, c, d, and e shall reference PPG SHANGHAI Price List in effect as of January 1, 2005 on Appendix 5. + +3. REPRESENTATIONS AND WARRANTIES BY DISTRIBUTOR + +DISTRIBUTOR represents and warrants to PPG SHANGHAI that(pound)(0) + +(a) it is a business entity duly incorporated and registered and validly existing under the relevant PRC laws and regulations; + +(b) it has been issued a valid business licence in its name by the relevant local branch of the State Administration of Industry and Commerce, and that business licence shall be valid within the duration of this Agreement; + +(c) it is permitted to distribute chemical products pursuant to this Agreement under its approved business scope; + +(d) it has a Dangerous Goods Business Permit Licence issued by the appropriate local government; + +(e) it has the qualification of a general taxpayer and is able to issue value added tax invoices; + +(f) it shall comply with all the relevant laws, regulations and permits, which have jurisdiction over its business, in relation to the sale of Products, + +4. DISTRIBUTOR'S RESPONSIBILITY + +4.1 DISTRIBUTOR shall promote the sale of the Products in the Territory. DISTRIBUTOR will conduct its operations in the Territory through offices or agencies to be maintained by DISTRIBUTOR at its sole cost and expense. + +4.2 If DISTRIBUTOR sells or distributes the Products outside the Territory, whether directly or indirectly through DISTRIBUTOR's cooperation or in conjunction with other third parties, or to customers outside the Territory without the prior knowledge and consent of PPG SHANGHAI, PPG SHANGHAI shall have the right to terminate with immediate effect this Agreement and any existing incentive arrangements between PPG SHANGHAI and DISTRIBUTOR, whether entered into before or after the commencement of the Agreement. + +4.3 DISTRIBUTOR agrees to satisfy the annual and quarterly sale targets for the Products set forth in Appendix 3 herein as mutually agreed to by the parties hereof. + +4.4 DISTRIBUTOR and PPG Shanghai shall be responsible for providing technical support and after sale services to the Territory. PPG Shanghai's responsibility under this Section 4.4 is defined in Section 8. + +5. PRICES AND TERMS + + + + + +5.1 PPG SHANGHAI agrees that PPG SHANGHAI will sell and DISTRIBUTOR agrees to buy the Products at the prices agreed to by the parties from time to time and subject to the terms and conditions stated herein. The prices in effect as of the Effective Date of the Agreement are set forth on Appendix 5. The prices for the Products must be agreed upon by PPG SHANGHAI at the time of PPG SHANGHAI's written acceptance of an order hereunder. Unless otherwise agreed by PPG SHANGHAI in writing, DISTRIBUTOR shall prepay all the invoiced amount in the currency and manner as indicated by PPG Shanghai. DISTRIBUTOR shall be deemed to complete its payment obligation upon full payment of the invoiced sum, and such amount has been allocated into the account as directed by PPG SHANGHAI. PPG SHANGHAI shall only have the obligation to deliver the Products upon full and due payment. + +5.2 PPG SHANGHAI reserves the right to adjust its selling prices based on local market situation. + +5.3 PPG SHANGHAI shall bear the cost of transportation from overseas to its own warehouse, insurance and export / import duty for any Products to be sold to Distributor hereunder. DISTRIBUTOR shall pick up the ordered Products from PPG SHANGHAI by its own transport agency to its own places at its own expenses. + +6. INTENT + +It is the intent of this Agreement, and PPG SHANGHAI and DISTRIBUTOR agree, that: + +(a) no consignment shipments shall be made to DISTRIBUTOR; + +(b) DISTRIBUTOR is not authorized to sell the Products in any area outside the Territory or to establish or operate a "permanent establishment" in any country on behalf of PPG SHANGHAI; + +(c) DISTRIBUTOR shall take no action which would cause PPG SHANGHAI to be classified or to be considered as doing business in any country under the laws of any country, or which would cause PPG SHANGHAI to become subject to the income tax, excess profits tax, corporation receipts tax, or any other tax of any country; + +(d) DISTRIBUTOR has no authority to conclude contracts on behalf of or in the name of PPG SHANGHAI; + +(e) DISTRIBUTOR shall hold PPG SHANGHAI harmless from any taxes or other liability of any type, kind or nature, assessed against PPG SHANGHAI because of DISTRIBUTOR taking any action prohibited by subparagraphs (b), (c) and (d) above; + +(f) DISTRIBUTOR distributes the Products solely as an independent contractor and is not a franchisee, employee, partner or agent of PPG SHANGHAI and agrees not to represent the relationship as otherwise; + +(g) No fee or other mandatory consideration has been paid by DISTRIBUTOR to PPG SHANGHAI for issuance of this Agreement. + +8. PPG SHANGHAI'S RESPONSIBILITIES + +(a) PPG SHANGHAI shall use reasonable commercial efforts to support DISTRIBUTOR in its sale and marketing. PPG SHANGHAI shall provide its assistance in sale by providing DISTRIBUTOR with its usual and newly developed sale materials, samples and sale items from time to time through its sale/technical representatives. + +(b) Upon request by DISTRIBUTOR, PPG SHANGHAI shall provide DISTRIBUTOR with extra support by generally providing the relevant technique and other manner of consultation in relation to sale and use of Products. + +(c) In pursuance to the reasonable request of DISTRIBUTOR, PPG SHANGHAI shall arrange training for DISTRIBUTOR in accordance with the product training generally provided by PPG SHANGHAI at its Training Centers or other pre-agreed venues. + +(d) PPG SHANGHAI shall use reasonable commercial efforts to provide forthwith DISTRIBUTOR with the quantity of Products ordered by it and accepted by PPG SHANGHAI. The supplying responsibility of PPG SHANGHAI shall be subject to the stock of the ordered products at the time when DISTRIBUTOR's order is made with PPG SHANGHAI. + +(e) PPG SHANGHAI shall provide DISTRIBUTOR Quarterly and Annual Rebate as listed in Appendix 3 if agreed targets are achieved on time. + +9. DISTRIBUTOR'S RESPONSIBILITIES + +DISTRIBUTOR agrees that DISTRIBUTOR shall, use all reasonable efforts , do the following: + +(a) provide its customers with services regarding the Products, including the safety and toxicological aspects of Products handling and ensure that delivery to customers is made of technical information provided by PPG SHANGHAI regarding Products, including the safety precautions and toxicological aspects of Products handling; + + + + + +(b) maintain an adequate supply of Products to expedite customer deliveries and give prompt and efficient service to its customers in the Territory; + +(c) maintain knowledge of the market in the Territory and regularly communicate such knowledge to PPG SHANGHAI; + +(d) be responsible that the labels for the Products meet all governmental and all applicable laws of the Territory regulatory requirements and comply with all applicable laws of the Territory; + +(e) provide to its customers, Product technical support and training and ensure its customers maintain technical support and training to end-users. + +(f) plan and develop promotional and advertising strategies to enhance PPG SHANGHAI's image and sales value in the region. + +(g) Achieve agreed and signed sales target (Appendix 3). + +10. PPG SHANGHAI TRADEMARKS + +10.1 PPG SHANGHAI represents that it has rights and interests in the trademarks used on the Products, including, without limitation, the PPG logo listed on Appendix 2 hereto which shall herein be collectively referred to as the "PPG Trademarks." PPG SHANGHAI hereby grants to DISTRIBUTOR during the Term, subject to the terms and conditions hereinafter specified, a limited, nonexclusive, nonassignable and nontransferable right to use the PPG Trademarks in the Territory for or in connection with its advertisement, promotion, sale and distribution of Products. In connection with any use of the PPG Trademarks, DISTRIBUTOR shall prominently indicate that DISTRIBUTOR is an independent distributor for PPG SHANGHAI. DISTRIBUTOR's use shall be subject to PPG SHANGHAI's approval and shall be limited to labels and advertisements of the Products in the Territory and shall be at the expense of DISTRIBUTOR. DISTRIBUTOR agrees to submit proposed uses of the PPG Trademarks on labels to the Director of Automotive Refinish (Asia Pacific region), or such other person as PPG SHANGHAI may designate from time to time, for review and approval. DISTRIBUTOR agrees that if it uses the PPG Trademarks on its labels and in its advertisements, it shall only be in the form approved in writing by PPG SHANGHAI. PPG SHANGHAI agrees that it will not unreasonably withhold approval of any labels or advertising material submitted to it by DISTRIBUTOR for approval and use pursuant to the provisions hereof. DISTRIBUTOR will not seek to obtain any registration of any of the PPG Trademarks. Upon termination of this Agreement, DISTRIBUTOR shall forthwith cease all further use of the PPG Trademarks and shall destroy all unused labels and advertisements containing the PPG Trademarks. Thereafter, DISTRIBUTOR shall not use any PPG Trademarks or trade or corporate names similar thereto. + +10.2 DISTRIBUTOR acknowledges PPG SHANGHAI's exclusive right and interests in relation to the PPG Trademarks and further acknowledges that all copyrights, patent, utility model rights and all other industrial property rights of whatever kind used in or in connection with the Products are the sole and exclusive property of PPG SHANGHAI or PPG and that DISTRIBUTOR will not, whether during the Term of this appointment or after its expiry or termination, knowingly do or cause to be done any act or thing directly or indirectly, contest or in any way impair or attempting to impair PPG SHANGHAI or PPG's rights, titles or interests in the PPG Trademarks. + +10.3 DISTRIBUTOR shall not apply for registration of the PPG Trademarks in the People's Republic of China or in any other countries. + +11. WARRANTY AND LIMITATION + +11.1 PPG SHANGHAI warrants only its title to the Products and that the &bbsp; Products will be as set forth in the warranty statement, if any, on the Products' labeling or in the absence of any such warranty statement that the Products will conform to PPG SHANGHAI's standard warranty when they are taken from PPG SHANGHAI's warehouse by DISTRIUTOR or its transport agent. DISTRIBUTOR is not authorized to make warranties or representations on behalf of PPG SHANGHAI and shall make no such warranties or representations. THESE ARE THE ONLY REPRESENTATIONS OR WARRANTIES THAT PPG SHANGHAI MAKES, AND ALL OTHER EXPRESS OR IMPLIED WARRANTIES UNDER STATUTE OR ARISING OTHERWISE IN LAW FROM A COURSE OF DEALING OR USAGE OF TRADE, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTIBILITY, FITNESS FOR A PARTICULAR PURPOSE OR USE, ARE DISCLAIMED BY PPG SHANGHAI. In the event that the Product fails to conform to the warranties herein given, DISTRIBUTOR's exclusive remedy and PPG SHANGHAI's sole responsibility is, at PPG SHANGHAI's option, limited to the replacement of such nonconforming Product at PPG SHANGHAI's expense or the refund of the purchase price attributable to a specific delivery as to which a claim is made. For the avoidance of doubt, PPG SHANGHAI hereby declares and represents that PPG SHANGHAI is not responsible for any damage to the Products after they have been taken away from PPG SHANGHAI's warehouse and caused by DISTRIBUTOR or its transport agent. + +11.2 It is PPG SHANGHAI's responsibility to ensure that mis-delivery of Product is kept to the minimum. DISTRIBUTOR shall inspect the Products within 48 hours upon delivery. In case of discrepancy found in Products + + + + + + delivered, DISTRIBUTOR shall report to PPG SHANGHAI in writing, detailing all the discrepancies within 48 hours after delivery. PPG SHANGHAI will not accept any claims for discrepancy in delivery beyond the 48 hours period. If Products are found damaged upon delivery, DISTRIBUTOR or its customers who directly receive the delivery shall report to PPG SHANGHAI in writing within 48 hours. The necessary and sufficient evidence (and photos) required for insurance claim must be submitted altogether. None of the damaged Products shall be disposed of until the claim is settled by the insurance company or PPG SHANGHAI. + +11.3 DISTRIBUTOR assumes all responsibility, risk and liability arising from (i) the unloading, discharge, storage, handling and use of the Products, including use thereof alone or in combination with other substances; (ii) the improper functioning or failure of unloading, discharge, transportation or storage systems equipment used by DISTRIBUTOR, whether furnished or recommended by PPG SHANGHAI or not; and (iii) the failure to comply with laws, rules and regulations governing unloading, discharge, storage, handling and use of the Products. + +12. FORCE MAJEURE + +PPG SHANGHAI's failure or inability to make, or DISTRIBUTOR's failure or inability to take, any delivery or deliveries when due, or the failure or inability of either party to effect timely performance of any other obligation required of it hereunder, if caused by "force majeure" as hereinafter defined, shall not constitute a default hereunder or subject the party affected by force majeure to any liability to the other; provided, however, that the party so affected shall promptly notify the other of the existence thereof and of its expected duration and the estimated effect thereof upon its ability to perform its obligations hereunder. Such party shall promptly notify the other party when such force majeure circumstance has ceased to affect its ability to perform its obligations hereunder. The quantity to be delivered hereunder shall be reduced to the extent of the deliveries omitted for such cause or causes, unless both parties agree that the total quantity to be delivered hereunder shall remain unchanged. For so long as its ability to perform hereunder is affected by such force majeure circumstance, PPG SHANGHAI may, at its option, elect to allocate its total production of Product among its various requirements therefor (e.g., manufacturing and sales) in such manner as PPG SHANGHAI deems practicable and which, in the opinion of PPG SHANGHAI, is fair and reasonable. During the time that PPG SHANGHAI is unable to make deliveries or otherwise perform, it shall not be obligated to procure, or to use its best efforts to procure, any quantity of Product sold hereunder from any alternate producer or supplier. As used herein, the term "force majeure" shall mean and include any act of God, nature or the public enemy, accident, explosion, operation malfunction or interruption, fire, storm, earthquake, flood, drought, perils of the sea, strikes, lockouts, labor disputes, riots, sabotage, embargo, war (whether or not declared and whether or not the United States of America is a participant), federal, state or municipal legal restriction or limitation or compliance therewith, inability to obtain export licenses, failure or delay of transportation, shortage of, or inability to obtain, raw materials, supplies, equipment, fuel, power, labor, or other operational necessity, interruption, or curtailment of power supply, or any other circumstance of a similar or different nature beyond the reasonable control of the party affected thereby. In this connection, a party shall not be required to resolve labor disputes or disputes with suppliers of raw materials, supplies, equipment, fuel or power, except in accordance with such party's business judgment as to its best interest. + +13. PRODUCT HANDLING + +DISTRIBUTOR acknowledges that it has experience and expertise in handling and storing the Products, and that DISTRIBUTOR has the obligation to handle, store and distribute the Products safely and properly. + +14. PRODUCT SAFETY + +PPG SHANGHAI and DISTRIBUTOR recognize the importance of product safety considerations and the need to protect persons and property against unsafe conditions that could occur from the improper use, transportation, storage, handling, distribution or disposal of the Products sold hereunder. PPG SHANGHAI and DISTRIBUTOR will follow PPG's Responsible Care(R) Distributor Guidelines as set forth in the attached Appendix I (Responsible Care(R) is a registered trademark in the United States of the American Chemistry Council ). Accordingly, PPG SHANGHAI will furnish certain information to DISTRIBUTOR regarding product safety and handling aspects of the Products, and DISTRIBUTOR, in addition to its independent responsibility to obtain and implement a product safety program regarding the Products, will implement and conform to PPG SHANGHAI's product safety recommendations and Responsible Care(R) Distributor Guidelines, DISTRIBUTOR will also provide its customers, employees and other third parties foreseeably exposed to the Products with appropriate warnings, advice and other material regarding the Products, including all product safety and handling material provided by PPG SHANGHAI, and will ensure that the Products are used, stored, handled, distributed, transported and disposed of in a manner consistent with all of the above recommendations. + +15. PRODUCT DISCONTINUANCE + +DISTRIBUTOR acknowledges that it has express notice that PPG or PPG SHANGHAI may at any time discontinue the production and/or sale of any of the Products. If PPG or PPG SHANGHAI does discontinue the production and/or sale of any of the Products, this Agreement shall automatically terminate with respect to such discontinued Product, and DISTRIBUTOR shall not be entitled to claim or receive + + + + + +from PPG or PPG SHANGHAI any compensation, reimbursement or damages of any nature as a result (direct or indirect) of PPG or PPG SHANGHAI's discontinuance of the production and/or sale of the affected Product. + +16. LIMITATION OF DAMAGES + +Notwithstanding the provisions of any law, rule, or regulation to the contrary, on the termination of this Agreement for any cause whatsoever, DISTRIBUTOR shall not be entitled to claim or receive from PPG SHANGHAI any compensation, reimbursement, or damages on account of any expenditure or commitment of any kind in connection with its business or on account of goodwill or on account of loss of prospective profits or otherwise. In no event shall PPG SHANGHAI be liable for consequential damages. + +17. BUSINESS CONDUCT + +17.1 In the performance of its responsibilities pursuant to this Agreement, DISTRIBUTOR agrees to make every effort to operate as a good, responsible and ethical corporate entity in the Territory and will comply with the laws of the Territory, the applicable laws of the United States of America and the countries of origin of the Products. DISTRIBUTOR further agrees that it will not, in connection with this Agreement or its performance hereunder, directly or indirectly offer, pay, promise to pay or authorize the payment of any money or thing of value to any employee of a customer or to any government official or to any person, + + (a) to improperly or unlawfully influence any act or decision of such customer employee or governmental official, including a decision to fail to perform his/her official functions, or + + (b) to induce such customer employee or government official to use his/her influence with the customer or the government (or instrumentality thereof), respectively, to affect or influence any act or decision of such customer or government (or instrumentality), in order to assist PPG SHANGHAI or DISTRIBUTOR in obtaining or retaining business or directing business to any other party. As used in this Section, the term "government official" means any officer or employee of any government or any department, agency, instrumentality or wholly-owned corporation thereof, or any person acting in an official capacity for or on behalf of any such government or department, agency, instrumentality or wholly-owned corporation thereof, or any candidate for political office. + +17.2 DISTRIBUTOR agrees to notify PPG SHANGHAI immediately of any solicitation, demand or other request for anything of value, by or on behalf of any employee of a customer, government official or employee of any government which is directed to itself or to PPG SHANGHAI related to the sale and/or service of the Products. + +17.3 DISTRIBUTOR agrees to require any sub-distributor or other person which it hires or engages to assist in the performance of this Agreement to comply with the provisions of this Section 17. + +18. TERM OF AGREEMENT + +18.1 The term of this Agreement (the "Term") shall commence on the date first above written and shall terminate on 31 December 2006, unless sooner terminated in accordance with the provisions hereof. + +18.2 The parties hereof intend to form a long-term relationship. To this end, if both parties wish to renew this Agreement, the parties shall agree on such intention in writing at least thirty(30) days before the expiry of the current Term of the Agreement. The parties shall agree on the terms and conditions of the renewal, and enter into a new agreement within sixty(60) days from the expiry of this Agreement. During this sixty(60) days period, both parties shall continue to perform their respective obligation under the same terms and conditions of this Agreement. + +18.3 In the event that there is no written notice issued by either party to show the intention to renew this Agreement in the said thirty(30) days before the expiry of the current Term of the Agreement, the Agreement shall terminate at the end of the said thirty(30) days. In the event that such a notice of intention to renew is issued, but the parties are not able to enter into a new agreement within that sixty(60) days from the expiry of this Agreement, this Agreement shall terminate at the end of the said sixty(60) days. + +19. DEFAULT AND TERMINATION + +19.1 If either party be in default with respect to any of the terms or conditions of this Agreement, including, without limitation, DISTRIBUTOR's failure to pay any invoice of PPG SHANGHAI in accordance with its terms, and if it fails to correct such default or failure within ten (10) business days following written notice thereof from the other, the party serving such notice may, without prejudice to any other right or remedy, defer further performance hereunder until such default be remedied or terminate this Agreement by written notice to the other, and the same shall terminate immediately upon the giving of such notice. + + + + + +19.2 PPG SHANGHAI shall have the right to terminate this Agreement and/or suspend its performance hereunder immediately upon giving notice to DISTRIBUTOR, which termination shall be effective upon receipt of notice, if any one of the following occurs: (i) DISTRIBUTOR engages in fraudulent conduct in its dealings with PPG SHANGHAI or the Products; (ii) DISTRIBUTOR, or any principal owner of DISTRIBUTOR, is convicted of a crime which, in PPG SHANGHAI's reasonable judgment, may adversely affect the goodwill or interest of DISTRIBUTOR or of PPG SHANGHAI; (iii) DISTRIBUTOR becomes insolvent, assigns or attempts to assign its business assets for the benefit of creditors, institutes or has instituted against it proceedings in bankruptcy, or dissolves or liquidates the business of DISTRIBUTOR; or (iv) the business licence of DISTRIBUTOR is cancelled by the State Administration of Industry and Commerce. + +20. DISPUTE RESOLUTION + +20.1 All disputes, controversies and claims arising from or incidental to this Agreement shall be resolved by both parties through friendly consultation. If no resolution can be reached within thirty (30) days following the date on which one party informed the other party his intention to refer the disputes, controversies and claims for arbitration, such disputes, controversies and claims shall be referred to the China International Economic and Trade Arbitration Committee ("Arbitration Committee") for a final and binding arbitration in pursuance to the arbitration rules which is effective on the date hereof. + +20.2 The venue of arbitration shall be in Shanghai or Beijing, China (to be decided by PPG SHANGHAI). + +20.3 The arbitration shall be conducted in English and Chinese. + +20.4 There shall be three arbitrators. Each of PPG SHANGHAI and DISTRIBUTOR shall select one; the chief arbitrator shall be selected by the first two arbitrators, provided that where the first two arbitrators are not able to agree on the appointment of the chief arbitrator within ten (10) days of the later of their appointments, the chief arbitrator shall be selected by the chairman of the Arbitration Committee. + +20.5 The chief arbitrator shall not be a PRC national or a national of the United States. + +20.6 The arbitration award shall be final and binding on both parties. Each party agree to be bound by the arbitration award. The arbitration fees and enforcement costs (including witness fees and reasonable legal fees) shall be borne by the losing party unless provided otherwise in the arbitration award. + +20.7 During the occurrence of the dispute and the arbitration, other than the issues in dispute, each party shall continuously exercise its undisturbed rights and discharge its undisturbed obligations under this agreement. + +21. GOVERNING LAW + +The validity, construction, and performance of this Agreement shall be governed by and interpreted in accordance with the laws of the People's Republic of China. + +22. LANGUAGE AND COUNTERPART + + This Agreement shall be executed in two (2) counterparts of the Chinese language text. + +23. ENTIRE AGREEMENT + +This writing, including all documents attached to and/or referenced herein, constitutes the entire agreement between PPG SHANGHAI and DISTRIBUTOR regarding the subject matter hereof, terminating and superseding any prior agreements relating to the subject matter hereof, and there are no understandings, representations, or warranties of any kind except as expressly set forth herein. No modification, amendment or change in this Agreement or addition hereto shall be effective or binding on either of the parties hereto unless set forth in a writing which specifically references this Agreement and is executed by the respective duly authorized representatives of PPG SHANGHAI and DISTRIBUTOR and, if required, upon approval by competent governmental authorities, and no modifications shall be effected by any DISTRIBUTOR purchase order forms or other documents containing terms or conditions at variance with or in addition to those in this Agreement. + +IN WITNESS WHEREOF, PPG SHANGHAI and DISTRIBUTOR have executed this Distributor Agreement effective the day, month, and year first above written. + +Witness: PPG Paints Trading (Shanghai) Co., Ltd. + + + + + +/s/ Ju dian By: /s/ Yuen Kit Yeg, Pauline ---------------------------- ------------------------------ Name: Yuen Kit Yeg, Pauline ---------------------------- Title: General Manager --------------------------- + +Witness: [DISTRIBUTOR] + +/s/ Paul Grzebielucha By /s/ Charles T. Jensen ---------------------------- ------------------------------- Name: Charles T. Jensen ---------------------------- Title: CEO --------------------------- \ No newline at end of file diff --git a/full_contract_txt/NEONSYSTEMSINC_03_01_1999-EX-10.5-DISTRIBUTOR AGREEMENT_Amendment.txt b/full_contract_txt/NEONSYSTEMSINC_03_01_1999-EX-10.5-DISTRIBUTOR AGREEMENT_Amendment.txt new file mode 100644 index 0000000000000000000000000000000000000000..b196fc3f40b9dd6b0b5aeccce8339ac17b37bb80 --- /dev/null +++ b/full_contract_txt/NEONSYSTEMSINC_03_01_1999-EX-10.5-DISTRIBUTOR AGREEMENT_Amendment.txt @@ -0,0 +1,153 @@ +21 + + EXHIBIT C FORM OF SUBLICENSE + + [Form follows.] + + 22 + + EXHIBIT D FORM OF AGREEMENT FOR TRIAL + + [Form follows.] + + 23 + + FIRST AMENDMENT TO DISTRIBUTOR AGREEMENT + + THIS FIRST AMENDMENT TO DISTRIBUTOR AGREEMENT (this "Amendment") is made and entered into as of the 1st day of January, 1999, by and between Peregrine/Bridge Transfer Corporation, a Delaware corporation ("Licensor"), and NEON Systems, Inc., a Delaware corporation ("Licensee"). + +RECITALS: + + Licensor and Licensee are parties to that certain Distributor Agreement dated as of January 1, 1996 (the "Distributor Agreement"). Licensor and Licensee desire to amend the Distributor Agreement as set forth herein. + + NOW, THEREFORE, for and consideration of the mutual covenants of the parties set forth herein, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follow: + + 1. AMENDMENT OF DEFINITIONS. Article 1 of the Distributor Agreement is hereby amended to add thereto the following: + + 1.11 "Annual Royalty Advance Requirement" shall mean (i) $1,000,000 in respect of Licensee's fiscal year beginning April 1, 1999, (ii) $2,000,000 in respect of Licensee's fiscal year beginning April 1, 2000, (iii) $3,000,000 in respect of Licensee's fiscal year beginning April 1, 2001, (iv) $4,000,000 in respect of Licensee's fiscal year beginning April 1, 2002 and (v) $5,000,000 in respect of Licensee's fiscal year beginning April 1, 2003. In the event that the term hereof extends beyond Licensee's fiscal year beginning April 1, 2003, the amount of the Annual Royalty Advance shall increase by $1,000,000 for each such fiscal year thereafter. + + 1.12 "Royalty Advance" shall have the meaning provided therefor in Section 3.2 hereof. + + 1.13 "Specified Royalty Percentage" shall mean fifty percent (50%) for the period from and including January 1, 1999 through and including March 31, 1994. Thereafter, the term "Specified Royalty Percentage" shall mean (i) fifty percent (50%) from and after the first day of each quarter of each fiscal year of Licensee + + commencing with Licensee's fiscal year beginning April 1, 1999) until such time, if any, during such quarter that the aggregate amount of all Royalty Advances outstanding as of the first day of such quarter (including the Royalty Advance payable on such first day) has been credited against royalties earned hereunder (a "Satisfaction Date"), and (ii) forty percent (40%) from and after a Satisfaction Date through and including the last day of the fiscal quarter in which such Satisfaction Date occurs. + + 2. AMENDMENT OF SECTIONS 3.1 AND 3.2. Sections 3.1 and 3.2 of the Distributor Agreement are hereby amended to read in their entirety as follows: + + Section 3.1 ROYALTIES TO LICENSOR. + + (a) Licensee shall pay to Licensor for each Licensed Product licensed to a Redistributor or a Customer a + + + + + + royalty equal to the Specified Royalty Percentage of all revenues received (without deduction for value added tax, if any, but excluding any revenues for maintenance and support or upgrade services, which revenues are covered in paragraph (b) below) by Licensee under the Redistributor Agreement or Sublicense applicable to such Licensed Product. + + (b) Licensee shall pay to Licensor for maintenance and support and upgrade services provided under the applicable Sublicense or other written maintenance and support agreement with or approved by Licensee for each of the Licensed Products a royalty equal to the Specified Royalty Percentage of all revenues received (without deduction for value added tax, if any) by Licensee from a Redistributor or Customer relating to maintenance and support services or services for Upgrades or upgrades of systems for such Licensed Products. + + Section 3.2 TERMS OF PAYMENT. The royalties payable to Licensor pursuant to Section 3.1 shall be payable in accordance with the provisions of this Section 3.2. On or before the first day of each fiscal quarter of each fiscal year during the term hereof, commencing with the Licensee's fiscal year which begins on April 1, 1999, Licensee shall pay to Licensor, as an advance (a "Royalty Advance") of royalties anticipated to be paid hereunder during such fiscal year, an amount equal to twenty-five percent (25%) of the Annual Royalty Advance Requirement for such fiscal year. The aggregate amount of Royalty Advances outstanding from time to time shall be credited against royalties payable hereunder pursuant to Section 3.1 as and when such royalties are recognized as earned in accordance with generally accepted accounting principles. Royalty Advances made hereunder shall be made in respect of royalties that may become payable in respect of any and all Licensed Products and shall not be deemed made in respect + + 2 + + of any particular Licensed Product. With respect to any royalty payments due hereunder from Licensee to Licensor in excess of the amount of Royalty Advances made by Licensee from time to time hereunder, such payments shall be payable on the later of (i) sixty (60) days after the date of the applicable invoice to a Redistributor or Customer, as the case may be, or (ii) five (5) business days following Licensee's receipt of payment from a Redistributor or Customer, as the case may be. Any royalty payment that is not paid when due will bear interest from the date such amount is due until the date payment is made at a rate equal to ten percent (10%) per annum. All royalty payments due to Licensor under this Agreement shall be paid in U.S. Dollars. Upon the expiration or any termination of this Agreement, Licensor shall repay to Licensee the aggregate amount of all Royalty Advances then outstanding. + + 3. AMENDMENT OF TERM. Section 14.1 of the Distributor Agreement is hereby amended to read in its entirety as follows: + + Section 14.1 TERM. This Agreement shall be effective through and including March 31, 2004. Upon the expiration of such term, this Agreement will renew automatically for successive terms of one (1) year each unless either party to this Agreement delivers written notice of termination to the other party to this Agreement at least sixty (60) days prior to the end of the original or any renewal term. 4. AMENDMENT OF TERMINATION PROVISIONS. The provisions of Section 14.2 are amended by deleting in its entirety subsection (b) thereof and by amending Section 14.2(a)(2) to read in its entirety as follows: + + (2) Immediately upon written notice if the other party defaults in the performance of any obligation under this Agreement, including failure to promptly pay any amount due hereunder, and fails to cure such default within thirty (30) days after delivery of written notice specifying the default (with any termination as a result of Licensee's failure to pay amounts due under this Agreement resulting in acceleration of Licensee's obligation to pay all sums accrued and payable to Licensor under this Agreement as of the date of such termination). + + 5. AMENDMENT OF NATURE OF DISTRIBUTORSHIP. Licensor and Licensee do hereby agree that this Amendment shall effect a change in the nature of the distributorship granted to Licensee pursuant to the Distributor Agreement from a non-exclusive to an exclusive distributorship (provided, however, that with respect to Licensor's Partitioned Database Facility product, Licensor also may license such product to International Business Machines Corporation for sublicensing and distribution). Any and all references in the Distributor Agreement to the rights granted to Licensee as non-exclusive rights are hereby amended to provide that such rights are + + 3 + +exclusive rights (including without limitation such references in Sections 2.1 + + + + + +(Use of Master Copy), 2.2 (Sublicensing) and 2.8 (Trademarks and Copyright).). + + 6. AMENDMENT OF SECTION 13.1. The Distributor Agreement is hereby amended by adding the following sentence to the end of Section 13.1: + + Notwithstanding the foregoing, the foregoing limitation on liability shall not be applicable in respect of any liability of Licensor to Licensee resulting from any misrepresentation in, or breach of, the terms of Section 6.2 hereof or in respect of Licensor's obligation to repay Royalty Advances pursuant to Section 3.2 hereof. + + 7. CHANGE OF ADDRESSES FOR NOTICE. Section 15.2 of the Distributor Agreement is hereby amended by changing the address for notice to each of Licensor and Licensee to the following: + + 14100 Southwest Freeway, Suite 500 Sugar Land, Texas 77478 Attn: President + + 8. ADDITION OF RIGHT OF FIRST REFUSAL. The Distributor Agreement is hereby amended by adding thereto a new Section 15.11 and a new Section 15.12, which shall read in their entirety as follows: Section 15.11 Right of First Refusal. If, at any time or from time to time during the term hereof, Licensor or any stockholder in Licensor shall have received a bona fide offer from any person or entity to sell, transfer or otherwise convey all or any stock in, or assets of, Licensor which Licensor or such stockholder, as the case may be (the "Offeree"), desires to accept, the Offeree shall first give written notice (the "Offering Notice") to Licensee of the financial and other terms and conditions (the "Terms and Conditions") of such offer. Licensee shall have the right and a first opportunity to purchase, lease or otherwise acquire, as the case may be, all or the applicable portion of such stock or assets (as specified in the applicable Offering Notice) on the Terms and Conditions set forth in the Offering Notice, such right to be exercised by notice in writing to the Offeree within ninety (90) days after the giving of the Offering Notice. If Licensee shall have exercised such right, the closing shall be held at the corporate offices of Licensee on the closing date specified in the Offering Notice or the date that is ninety (90) days after the date of Licensee's notice of its exercise of such right, whichever is later. If either party shall default under this Section, the other party shall be entitled to specific performance. If Licensee shall fail to give notice of the exercise of its right of first + + 4 + + refusal under this Section within such ninety (90) day period, or if Licensee shall notify the Offeree within such ninety (90) day period that Licensee has waived such right, then the Offeree shall have the right to sell, transfer or convey all or the applicable portion of the stock in, or assets of, Licensor (as specified in the Offering Notice) pursuant to the terms of the specific offer described in the applicable Offering Notice, but not otherwise. If such sale, transfer or conveyance is not consummated in accordance with the offer and the Terms and Conditions specified in the applicable Offering Notice, the rights of Licensee to an Offering Notice shall be reinstated. No exercise or waiver by Licensee of any of its rights hereunder shall modify, abridge, impair or affect any of Licensee's rights under any of the other terms or provisions of this Agreement. Any sale, transfer or other conveyance of all or any part of the stock in, or assets of, Licensor in violation of this Section shall be null and void. Skunkware, Inc., a Delaware corporation and the sole stockholder of Licensor ("Skunkware"), is joining in this Agreement for the purpose of agreeing to the terms of this Section and Section 15.12. + + Section 15.12 OPTION TO PURCHASE. Skunkware and Licensor hereby grant to Licensee the exclusive and irrevocable right and option to purchase (the "Option"), at Licensee's election, either (i) all of the assets of Licensor or (ii) all of the issued and outstanding stock of Licensor. Such option shall be exercisable during a period (the "Option Period") commencing on and including the earlier of (i) the date upon which Licensee shall have paid to Licensor, in any single fiscal year of Licensee, royalty payments hereunder in the aggregate amount of $10,000,000 or (ii) January 1, 2002, and ending upon the expiration or sooner termination of this Agreement. Licensee's exercise of the Option is at its sole discretion. Licensee may exercise the Option by written notice to Licensor and Skunkware at any time during the Option Period. Upon any such exercise of the Option, Licensee and Licensor or Skunkware (as the case may be) shall proceed to diligently and in good faith negotiate and execute a definitive purchase and sale agreement for Licensor's acquisition of all of the assets of, or outstanding capital stock in, Licensor, as the case may be. In the event that Licensee and Licensor or Skunkware, as the case may be, are unable to agree on any terms or conditions for such acquisition, the same shall be submitted to arbitration in accordance with the rules and procedures of the American Arbitration Association, with the arbitrator(s) to be experienced in the mainframe software industry. Notwithstanding the foregoing provision for arbitration concerning the terms of any purchase and sale agreement, and without + + + + + + limiting any other + + 5 + + conditions that may be included in any such purchase and sale agreement, Licensee shall have no obligation to consummate the acquisition of the assets of, or stock in, Licensor pursuant to its exercise of the Option if Licensee's board of directors should determine, in its sole discretion, that such acquisition would not be accretive to the value of Licensee. The definitive purchase and sale agreement shall provide that License may pay the purchase price thereunder in cash, in shares of its Common Stock or in some combination thereof. So long as the Option shall be in existence (whether or not exercisable), Skunkware and Licensor agree that Licensor will conduct its business in the ordinary course and will not, without the prior written consent of Licensee, merge or consolidated with any other entity, sell all or substantially all of its assets, grant or permit to exist any lien or encumbrance on any material portion of its assets, issue any securities to any person other than Skunkware or engage in any other transaction or enter into any other agreement other than in the ordinary course of business. Skunkware further agrees that, so long as the Option shall be in existence (whether or not exercisable), it shall be and remain the sole Stockholder Licensor, and Licensor shall not issue to any other person or entity any stock, warrants or similar rights to acquire equity interests in Licensor. + + 9. MISCELLANEOUS. + + (a) Capitalized terms used in this Amendment that are not defined herein shall have the meanings provided therefor in the Distributor Agreement. + + (b) The captions used for the Sections in this Amendment are inserted only as a matter of convenience and for reference and in no way define, limit or describe the scope or the intent of this Amendment or any Section hereof. + + (c) This Amendment may be executed in one or more counterparts, each of which shall be deemed an original and all of which, taken together, shall be construed as a single instrument. + + (d) In the event any provision of this Amendment is declared or adjudged to be unenforceable or unlawful by any court, then such unenforceable or unlawful provision shall be excised herefrom, and the remainder of this Amendment, together with all rights and remedies granted thereby, shall continue and remain in full force and effect. + + 6 + + (e) The Distributor Agreement, as amended by this Amendment, constitutes the entire agreement between the parties hereto with respect to the matters covered hereby and thereby. All prior negotiations, representations and agreements with respect thereto not incorporated in this Amendment or the Distributor Agreement are hereby canceled. As modified hereby, the Distributor Agreement shall continue in full force and effect and be binding upon the parties hereto and their respective successors and permitted assigns. References to the Distributor Agreement after the date hereof shall mean the Distributor Agreement as amended pursuant to this Amendment. The amendments to the Distributor Agreement effected by this Amendment shall be effective from and after the date hereof. + + (f) This Amendment shall be governed by and construed under the law governing the Distributor Agreement. + + [The remainder of this page is intentionally left blank.] + +7 + + IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date first set forth above. + + PEREGRINE/BRIDGE TRANSFER CORPORATION + + By: /s/ Joe Backer ---------------------------- Name: Joe Backer -------------------------- Title: CEO ------------------------- + + NEON SYSTEMS, INC. + + By: /s/ John S. Reiland ---------------------------- + + + + + + Name: John S. Reiland -------------------------- Title: CFO ------------------------- + + 8 + + JOINDER OF SKUNKWARE, INC. + + Skunkware, Inc., a Delaware corporation, hereby joins in that certain Distributor Agreement dated as of January 1, 1996, between Peregrine/Bridge Transfer Corporation ("PBTC") and NEON Systems, Inc. ("NEON"), as amended by the First Amendment to Distributor Agreement dated as of November 19, 1998 by and between PBTC and NEON, such joinder being for purposes of acknowledging and agreeing to be bound by the terms of the Right of First Refusal set forth in Section 15.11 of the Distributor Agreement and the Option to Purchase set forth in Section 15.12 of the Distributor Agreement. Skunkware hereby represents and warrants to NEON that Skunkware is the sole stockholder of PBTC. Skunkware further agrees that its agreements set forth herein shall be binding on its successors and assigns and inure to the benefit of NEON's successors and assigns. + + Skunkware's address for any notice to it under the terms of the Distributor Agreement is as follows: Skunkware, Inc., 14100 Southwest Freeway, Suite 500, Sugar Land, Texas 77478, Attn: President. + + Executed as of the 1st day of January, 1999. + + SKUNKWARE, INC. + + By: /s/ Joe Backer ------------------------- Name: Joe Backer ----------------------- Title: CEO ---------------------- + + + +66049:53214:DALLAS:277267.9 + + 9 \ No newline at end of file diff --git a/full_contract_txt/NEONSYSTEMSINC_03_01_1999-EX-10.5-DISTRIBUTOR AGREEMENT_New.txt b/full_contract_txt/NEONSYSTEMSINC_03_01_1999-EX-10.5-DISTRIBUTOR AGREEMENT_New.txt new file mode 100644 index 0000000000000000000000000000000000000000..54038ff7b8521f76ff0cb4d67ddc2ddbdab24d0d --- /dev/null +++ b/full_contract_txt/NEONSYSTEMSINC_03_01_1999-EX-10.5-DISTRIBUTOR AGREEMENT_New.txt @@ -0,0 +1,421 @@ +DISTRIBUTOR AGREEMENT + + by and between + + PEREGRINE/BRIDGE TRANSFER CORPORATION + + and + + NEON SYSTEMS, INC. + + TABLE OF CONTENTS + + Article 1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Article 2 License Grant . . . . . . . . . . . . . . . . . . . . . . . . . 2 Article 3 Pricing and Payment . . . . . . . . . . . . . . . . . . . . . . 4 Article 4 Order, delivery and Acceptance. . . . . . . . . . . . . . . . . 4 Article 5 Representations and Warranties of Licensee. . . . . . . . . . . 5 Article 6 Representations and Warranties of Licensor. . . . . . . . . . . 6 Article 7 Covenants of Licensee . . . . . . . . . . . . . . . . . . . . . 6 Article 8 Covenants of Licensor . . . . . . . . . . . . . . . . . . . . . 9 Article 9 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . 10 Article 10 Agreement Not to Compete, Confidentiality . . . . . . . . . . . 12 Article 11 Audits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Article 12 Limited Warranties. . . . . . . . . . . . . . . . . . . . . . . 14 Article 13 Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Article 14 Term and Termination. . . . . . . . . . . . . . . . . . . . . . 16 Article 15 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 + + EXHIBITS + + Exhibit A List of Products Exhibit B The Territory Exhibit C Sublicense Agreement Exhibit D Agreement for Trial + + i + + DISTRIBUTOR AGREEMENT + +DISTRIBUTOR AGREEMENT (the "Agreement") is made as of the 1st day of January, 1996 by and between Peregrine/Bridge Transfer Corporation, a Delaware corporation (the "Licensor"), and Neon Systems, Inc., a Delaware corporation (the "Licensee"). + +WHEREAS, Licensor is engaged in the development, support and licensing of certain computer software products, including without limitation the computer software products fisted in EXHIBIT A to this Agreement; and + +WHEREAS, Licensee desires to obtain from Licensor, and Licensor desires to grant to Licensee, the right to market and sublicense the Licensed Products (as defined herein) in accordance with the terms and conditions set forth in this Agreement; + +NOW THEREFORE, in consideration of the foregoing and the mutual covenants set forth in this Agreement and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows. + + ARTICLE 1 DEFINITIONS + +1.1 "Customer" means a person or entity that has acquired, or has indicated its interest in acquiring from Licensee, or from a Redistributor if so specified herein, a non-exclusive and nontransferable Sublicense to use one (1) or more of the Licensed Products. + +1.2 "Documentation" means all visually readable materials published or made available by Licensor during the term of this Agreement for use by Customers in connection with the Licensed Products. + +1.3 "Emergency Fix" means a temporary correction of a problem in a Licensed Product reported by Licensee to Licensor that may take the form of a written instruction or magnetic or optical media. + +1.4 "Licensed Product" means any copy, or part thereof, of object code of the software products listed on EXHIBIT A attached to this Agreement, as well as any Upgrades or other material distributed to Licensee by Licensor in connection with such software products. + + + + + +1.5 "Master Copy" means the initial object code copy of each Licensed Product and of any subsequent Upgrades or other derivations distributed to Licensee by Licensor under this Agreement. + + 1 + +1.6 "Redistributor" means any individual or entity that is granted a license by Licensee to copy and sublicense one or more Licensed Products to Customers. + +1.7 "Sublicense" means the sublicense agreement to be entered into by Customers, the form of which is attached hereto as EXHIBIT C, or such form as otherwise may be approved by Licensor pursuant to this Agreement. + +1.8 "Sublicense Copy" means an object code copy of the Licensed Product that Licensee licenses from Licensor and inventories for sublicensing to Redistributors and Customers. + +1.9 "Territory" means that geographic area specified in EXHIBIT B attached to this Agreement. + +1.10 "Upgrade" means any revision, adaptation or new version of a Licensed Product which enhances a Licensed Product and which is offered by Licensor to registered users of that Licensed Product as an "upgrade." + + ARTICLE 2 LICENSE GRANT + +Section 2.1 USE OF MASTER COPY. Licensor hereby grants to Licensee a non- exclusive, worldwide right to use and reproduce the Master Copy of each Licensed Product and the related Documentation during the term of this Agreement for testing, demonstration to Redistributors. and Customers, support and maintenance, if any, back-up and archive purposes. + +Section 2.2 SUBLICENSING. Licensor hereby grants to Licensee an exclusive in the Territory to (1) make Sublicense Copies and copies of the Documentation to meet the demand of Redistributors and Customers and (2) market and sublicense Sublicense Copies and copies of the Documentation, together with any copies of promotional and other materials which Licensor may produce or obtain from time to time to assist Licensee in marketing and sublicensing the Licensed Products during the term of this Agreement by any one or more of the following means: + + (a) TO A REDISTRIBUTOR: To a Redistributor pursuant to a Redistributor Agreement containing substantially the same terms and conditions as are set forth in this Agreement (subject to Section 2.5) and a Sublicense with each Customer of Redistributor in accordance with subsection 2.2(b); or + + (b) TO CUSTOMERS: Pursuant to a Sublicense signed by the Customer. + +Section 2.3 AGREEMENTS FOR TRIAL. Licensee may make available the Licensed Products or Documentation to any Redistributor or Customer who wishes to test the Licensed Products on a trial basis so long as such Redistributor or Customer has entered into an Agreement For Trial with Licensee in the form attached to this Agreement as EXHIBIT D. + + 2 + +Section 2.4 MAINTENANCE AND SUPPORT AGREEMENTS. Licensee may make available to Customers maintenance, support and upgrade services only under the terms contained in the Sublicense or other written maintenance and support agreement pertaining to such services. + +Section 2.5 REVIEW OF ARRANGEMENTS. Licensee shall not enter into any agreement referred to in this Article 2 with any Redistributor or Customer until each such agreement has been submitted to and approved by Licensor. Within five (5) business days after its receipt of any such agreement, Licensor shall notify Licensee whether it approves or disapproves of the agreement and, if it disapproves of the agreement, Licensor shall provide written notice of the reasons therefor, including any changes that would require to approve of the agreement. If Licensor fails to notify Licensee of its approval or disapproval of any such agreement within such period of time, the agreement shall be deemed to be approved by Licensor. + +Section 2.6 TERMS OF AGREEMENTS. Licensee shall ensure that the terms of any Redistributor Agreement and, to the extent a Sublicense must be modified to comply with applicable law, any Sublicense executed in connection with the Licensed Products do not: + + (a) Diminish or limit any of the rights of Licensor in the Licensed Products or Documentation; + + (b) Diminish or limit the enforceability of the proprietary rights of Licensor in and to the Licensed Products or Documentation; + + (c) Convey any rights of ownership in the Licensed Products or Documentation to any individual or entity other than Licensor, except for the license rights granted in accordance with the terms of this Agreement; + + (d) Permit the use or duplication of the Licensed Products or + + + + + + Documentation, except as specifically provided in this Agreement or in the Sublicense; or + + (e) Permit disclosure of proprietary information regarding the Licensed Products or Documentation. + +Section 2.7 NATURE OF GRANT. Licensee shall not have any rights of ownership or other proprietary rights in the Licensed Products or any Documentation by virtue of this Agreement, except for the license grants set forth herein. + +Section 2.8 TRADEMARKS AND COPYRIGHT. Licensor hereby grants to Licensee a non-exclusive right to use the trademarks, service marks, trade names, copyrights, logos and designations (collectively, the "Marks") relating to the Licensed Products or the Documentation during the term of this Agreement in the marketing by Licensee of the Licensed Products, provided that such Marks clearly indicate Licensor as the owner of the Marks whenever the Licensed Product or Documentation is first mentioned in any written material referencing the Licensed Product and the proper symbol is used in a superscript following the Marks. Licensor promptly shall provide + + 3 + +a list of all Marks held by Licensor that relate to the Licensed Products. Upon reasonable written request by Licensor, Licensee shall provide Licensor with samples of any use of the Marks of Licensor relating to the Licensed Products, including any documentation and object code copies of the Licensed Products that Licensee sublicenses to Redistributors and Customers. + + ARTICLE 3 PRICING AND PAYMENT + +Section 3.1 FEES TO LICENSOR. + + (a) Licensee shall pay to Licensor for each Licensed Product licensed to a Redistributor or a Customer a licensee fee equal to 50% of all revenues received (without deduction for value added tax, if any, but excluding any revenues for maintenance and support or upgrade services, which revenues are covered in paragraph (b) below) by Licensee under the Redistributor Agreement or Sublicense applicable to such Licensed Product. + + (b) Licensee shall pay to Licensor for maintenance and support and upgrade services provided under the applicable Sublicense or other written maintenance and support agreement with or approved by Licensee for each of the Licensed Products a fee equal to 50% of all revenues received (without deduction for value added tax, if any) by Licensee from a Redistributor or Customer relating to maintenance and support services or services for Upgrades or upgrades of systems for such Licensed Product. + +Section 3.2 TERMS OF PAYMENT. All fees due to Licensor under this Agreement shall be paid in U.S. Dollars. Fees due to Licensor from invoices rendered by Licensee during the first year of the term hereof will be payable one hundred and twenty (120) days after the date of the Licensee's invoice to a Redistributor or Customer, as the case may be. Fees due to Licensor from invoices rendered on or after the first day of the thirteenth (13th) month through and including the last day of the eighteenth (18th) month of the term hereof will be payable ninety (90) days after the date of such invoice. Fees due to Licensor from invoices rendered thereafter will be payable sixty (60) days after the date of such invoice. Any amount that is not paid when due will bear simple interest from the date such amount is due until the date payment is made at a rate equal to 10% per annum. + + ARTICLE 4 ORDER, DELIVERY AND ACCEPTANCE + +Section 4.1 ORDER AND DELIVERY. Licensee shall deliver to Licensor product orders (or other documents of similar purpose and effect) in writing that are signed by an authorized representative of Licensee and that list the quantity, product name, number, version, license fee and + + 4 + +proposed delivery date for such order. Licensor shall ship Licensed Products and Documentation in accordance with Licensee's product orders received and accepted by Licensor. Licensor shall ship Licensed Products and Documentation F.O.B. Licensor's place of business. Licensee shall be responsible for all customs fees and other costs and expenses arising in connection with the transactions contemplated by this Agreement, including costs and expenses related to packing and shipping the Licensed Products and Documentation and any freight and insurance charges, and Licensor may require Licensee to pay for such costs and expenses in advance of shipment of any Licensed Products or Documentation. Licensor shall not be liable to Licensee for delays in shipments due to causes beyond Licensor's reasonable control. Licensor reserves the right to reject any product order, to cancel any product orders placed by Licensee and accepted by Licensor and to refuse or delay shipment thereof if Licensee fails to make any payments as provided in this Agreement or otherwise continues to fail to comply with the terms and conditions of this Agreement for thirty (30) days after delivery of written + + + + + +notice of such failure. + +Section 4.2 TIME FOR ACCEPTANCE. Licensee shall accept or reject the Licensed Products or Documentation within a ten (10) day evaluation period after receipt of such Licensed Product and the related Documentation by Licensee. If Licensee fails to give Licensor written notice of its rejection of such Licensed Products or Documentation within such ten (10) day evaluation period or Licensee ships such Licensed Products or Documentation to a Redistributor or Customer, then such Licensed Products and Documentation will be deemed to be accepted by Licensee. + +Section 4.3 REJECTION. If Licensee rejects any Licensed Product in accordance with Section 4.2 because such Licensed Product fails to conform to the Documentation relating to such Licensed Product, Licensee shall notify Licensor promptly in writing to that effect and return all copies of such Licensed Product to Licensor with a certification by an authorized representative of Licensee that all copies have been returned to Licensor or have been destroyed and Licensor shall refund to Licensee the amount paid by Licensee to Licensor for such Licensed Products. + + ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF LICENSEE + +Section 5.1 AUTHORITY. Licensee represents and warrants that it is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and that it is duly qualified to transact business and is in good standing in each jurisdiction in which such qualification is required by applicable law, except where the failure to be so qualified would not have a material adverse effect on Licensee or the assets of Licensee. Licensee represents and warrants that it has all requisite power and authority to execute this Agreement and to consummate the transactions contemplated hereby and that this Agreement has been duly executed and delivered by Licensee and constitutes a valid and binding obligation of Licensee enforceable in accordance with its terms. + + 5 + +Section 5.2 ABILITY TO PERFORM. Licensee represents and warrants that it has sufficient facilities, resources and personnel to adequately perform its obligations under this Agreement and that no existing arrangement, contractual or otherwise, will cause Licensee to breach the terms of this Agreement or prevent Licensee from fulfilling its obligations under this Agreement. + + ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF LICENSOR + +Section 6.1 AUTHORITY. Licensor represents and warrants that it is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and that it is duly qualified to transact business and is in good standing in each jurisdiction in which such qualification is required by applicable law, except where the failure to be so qualified would not have a material adverse effect on Licensor or the assets of Licensor. Licensor represents and warrants that it has all requisite power and authority to execute this Agreement and to consummate the transactions contemplated hereby and that this Agreement has been duly executed and delivered by Licensor and constitutes a valid and binding obligation of Licensor enforceable in accordance with its terms. + +Section 6.2 TITLE TO LICENSED PRODUCTS. Licensor represents and warrants that it possesses all right, title and interest in and to the Licensed Products and the Documentation and that the use of each of the Licensed Products and the Documentation by Licensee, a Redistributor or a Customer will not in any way constitute an infringement or other violation of any copyright, trade secret, trademark, patent or other intellectual property fights or any proprietary information or nondisclosure or other rights of any third party. Licensor represents and warrants that no existing arrangement, contractual or otherwise, will cause Licensor to breach the terms of this Agreement or prevent Licensor from fulfilling its obligations under this Agreement. + + ARTICLE 7 COVENANTS OF LICENSEE + +Section 7.1 DUTIES OF LICENSEE. Licensee shall be solely responsible for the proper advertising, demonstration, shipment, export and collection of payment relating to the Licensed Products and Documentation in the Territory. The duties of Licensee include without limitation the following: + + (a) Advertising the Licensed Product in appropriate media, contacting and developing Customers and prospective Redistributors by telephone and otherwise, providing information concerning Licensed Products to Customers and prospective Redistributors and advising such Customers and prospective Redistributors on the selection and use of the Licensed Products. + + 6 + + (b) Complying with Licensee's warranty obligations as set forth in its + + + + + + agreements with Redistributors and Customers. + + (c) Sending at Licensee's expense qualified and appropriate personnel of Licensee to participate in training sessions, which shall be conducted by Licensor from time to time without charge to Licensee for the benefit of Licensee and Licensee's personnel. + + (d) Obligating each Redistributor to keep complete and accurate records of such Redistributor's Customers, leads to prospective Customers, the number and type of Licensed Products licensed by such Redistributor and such related operating and financial data as Licensor reasonably may request from time to time for the sole purpose of monitoring the Licensed Products. + +Section 7.2 DOCUMENTATION. Licensee shall represent accurately and completely the Licensed Products to Customers as to quality, function, purpose and compatibility in accordance with the Documentation whenever the Licensed Products are referenced, demonstrated or advertised. Licensee shall obtain prior written approval from Licensor for all materials other than the Documentation to be used by Licensee in connection with trials, demonstrations and agreements relating to the Licensed Products, and such approval shall not be unreasonably withheld or delayed by Licensor. Licensee shall give Licensor and any licensors of Licensor appropriate credit for the authorship of the Licensed Products and Documentation at any seminar, trade show or other presentation of the Licensed Products. + +Section 7.3 EXPORTING AND SHIPMENT. Licensee shall obtain prior written approval from Licensor and any required export licenses from the United States Department of Commerce, Office of Export Administration or other applicable domestic or foreign governmental agency before exporting any Licensed Product or Documentation from the United States. Licensee agrees and covenants to comply fully with all applicable laws, rules and regulations, and to adopt such policies and procedures in connection with, the exporting of the Licensed Products and Documentation as may be required thereby. Each party to this Agreement shall cooperate fully with the other party to this Agreement and any governmental authorities by giving consents or information or providing or executing such documents as reasonably may be required to comply fully with such laws, rules or regulations existing now or in the future. + +Section 7.4 TAXES AND TARIFFS. + + (a) Licensee shall pay any and all taxes (other than taxes on Licensor's net income), tariffs, import and export duties or other fees imposed or assessed in connection with the transactions contemplated by this Agreement, including the delivery of Licensed Products and Documentation to Licensee and the shipment of Licensed Products from Licensee to a Redistributor or Customer. + + 7 + + (b) in the event that Licensee is required by law to withhold any form of tax, tariff or duty from any amount payable to Licensor under this Agreement, then Licensee shall provide Licensor with copies of all documentation required in connection with such withholdings and shall provide to Licensor all assistance requested by Licensor in applying for relief from such withholding obligations and in substantiating corresponding tax, duty or tariff credits or deductions which may be available to Licensor with respect to such withholding under applicable law. + +Section 7.5 BOOKS AND RECORDS. Licensee shall keep proper records and books of account concerning the reproduction and sublicensing of the Licensed Products that are adequate to determine the amount of fees owed to Licensor and Licensee shall preserve such records and books in a safe place for a period of five (5) years following termination of this Agreement. + +Section 7.6 MONTHLY REPORT. On or prior to the fifteenth (15th) day of each calendar month Licensee shall deliver to Licensor a written report certified as true and correct by an authorized office of Licensee stating (a) each Agreement for Trial entered into by Licensee during the previous calendar month, together with the expected revenues, if any, to Licensee under each such agreement, (b) each Sublicense entered into by Licensee during the previous calendar month, together with the expected revenues to Licensee for each such Sublicense, (c) each Redistributor Agreement entered into by Licensee during the previous calendar month, together with the expected revenues to Licensee for each such agreement, and (d) a list of invoices, together with the dollar amounts thereof, sent by Licensee to each Redistributor and Customer during the previous calendar month. + +Section 7.7 FINANCIAL STATEMENTS. Licensee shall provide (but shall not be obligated to do so more frequently than twice annually) to Licensor financial statements, credit ratings or other evidence of Licensee's financial condition promptly upon written request of Licensor. + +Section 7.8 REPLACEMENTS. Licensee shall honor any proper refund or replacement requests received for the Licensed Products from Redistributors pursuant to the applicable Redistributor Agreement or from Customers pursuant to a Sublicense. Upon receipt of any such properly returned Licensed Products, Licensor shall refund to Licensee the amount paid by Licensee to Licensor for such Licensed Products. Licensee shall instruct Redistributors and Customers to direct all refund requests directly to Licensee rather than Licensor. + +Section 7.9 MODIFICATIONS. Licensee shall not make any modifications to or + + + + + +derivations of the Licensed Products without the prior written consent of Licensor, except in the case of an Emergency Fix. Licensee shall not reverse engineer or otherwise attempt to reproduce the source code of any Licensed Product. In the event that Licensee makes any modification, alteration or enhancement to the Licensed Product or Documentation (including but not limited to an Emergency Fix), such modification, alteration or enhancement, including all intellectual property rights thereto, will be and remain the sole and exclusive property of Licensor. Any suggestions or changes desired by Licensee to the Licensed Product or Documentation shall be made by + + 8 + +Licensee in writing to Licensor and, if incorporated into the Licensed Product or Documentation, shall be the property of Licensor. + +Section 7.10 COPYRIGHT AND OTHER PROPRIETARY NOTICES. Licensee shall ensure that the copyright, trademark and any other proprietary notices of Licensor or other legends contained in or on any copies of the Licensed Products or Documentation remain in or on the original Licensed Product or Documentation and any copies of such product or documentation reproduced by Licensee. The existence of any copyright, trademark or other proprietary notices in or on the Licensed Product or Documentation shall not be construed as a publication of the Licensed Product or Documentation. + +Section 7.11 NO ENCUMBRANCES. Licensee shall not engage in the lease, transfer, rental or loan of the Licensed Products or Documentation and Licensee shall not allow the Licensed Products or Documentation to become encumbered by any means. + +Section 7.12 NO INCONSISTENT WARRANTIES. Licensee shall not, and shall obligate Redistributors not to, make or pass on to Customers any warranty or representation on behalf of Licensor inconsistent with or in addition to the limited warranty contained in the Sublicense. + +Section 7.13 DISPUTES BETWEEN LICENSEE AND CUSTOMERS. Licensee shall notify Licensor promptly concerning any threatened legal proceedings between Licensee on the one hand and a Redistributor or a Customer on the other hand and of any legal notices served on, or legal actions commenced against, Licensee regarding the Licensed Products or Documentation which might affect Licensor. Licensee shall not institute proceedings or enter into a compromise with any third party with whom it is in dispute concerning the Licensed Products or Documentation without the prior written consent of a duly authorized officer of Licensor, which consent shall not be unreasonably withheld or delayed by Licensor. + +Section 7.14 TRANSLATION. Licensee shall not translate any portion of the Licensed Products, including any Documentation, into any other language without the prior written permission of Licensor. + +Section 7.15 INTELLECTUAL PROPERTY REGISTRATION. Without the prior written consent of Licensor, Licensee shall not register, apply for registration or in any other way attempt to obtain any intellectual property rights relating to any Licensed Product, any Documentation or any part thereof or take any action that materially and adversely affects such rights held by Licensor. + + ARTICLE 8 COVENANTS OF LICENSOR + +Section 8.1 Licensor shall be solely responsible for delivering to Licensee a Master Copy of each Licensed Product and Documentation and for the maintenance and support of the + + 9 + +Sublicense Copies and Documentation used by any Redistributors and Customers. The duties of Licensor include the following: + + (a) Delivering a Master Copy of each Licensed Product and Documentation, including any Upgrades as they become available, to permit Licensee to (1) make Sublicense Copies and copies of the Documentation to meet the demand of Redistributors and Customers and (2) market and license Sublicense Copies and copies of the Documentation, together with the copies of promotional and other materials which Licensor may produce from time to time in order to assist Licensee in marketing and sublicensing the Licensed Products during the term of this Agreement. + + (b) Employing a sufficient number of skilled technicians experienced in the computing industry and familiar with the Licensed Products and Documentation to provide adequate technical support and assistance to all Redistributors and Customers. + + (c) Providing competent instruction to Redistributors and Customers regarding the use and installation of the Licensed Products. + + (d) Providing information, including by means of telephone support, to Redistributors and Customers as to the proper procedures and persons to contact to enable the proper installation and operation of the Licensed Products and providing responsive answers to questions and problems regarding the use and operation of the Licensed Products. + + + + + + (e) Providing technical assistance in supporting the Licensed Products and correcting any errors in the Licensed Products on an ongoing basis. + + (f) Delivering to Licensee sample copies of all Licensor's marketing and licensing materials relating to the Licensed Products in use in the United States of America for copying and distribution in the Territory at Licensee's expense. + +Section 8.2 REGISTRATION FOR TRADEMARKS AND COPYRIGHTS. Licensor shall use its best efforts to register in its name all Marks relating to the Licensed Products in the Territory and Licensor shall bear all costs of such registration and the maintenance and enforcement of all such rights and shall notify Licensee from time to time of all successful and unsuccessful registrations. + + ARTICLE 9 INDEMNIFICATION + +Section 9.1 INDEMNIFICATION OF LICENSOR. Licensee hereby agrees to defend and indemnify Licensor and Licensor's officers, directors, employees, stockholders, agents and representatives + + 10 + +against, and agrees to hold them harmless from, any loss, liability, claim, damage or expense (including reasonable legal fees and expenses incurred therein or in enforcing the indemnity), as incurred, for or on account of or arising from or in connection with or otherwise with respect to any breach of any representation, warranty or covenant of Licensee contained in this Agreement or any document delivered in connection herewith. + +Section 9.2 INDEMNIFICATION OF LICENSEE. Licensor hereby agrees to defend and indemnify Licensee and Licensee's officers, directors, employees, stockholders, agents and representatives against, and agrees to hold them harmless from, any loss, liability, claim, damage or expense (including reasonable legal fees and expenses incurred therein or in enforcing the indemnity), as incurred, for or on account of or arising from or in connection with or otherwise with respect to any breach of any representation, warranty or covenant of Licensor contained in this Agreement or any document delivered in connection herewith. + +Section 9.3 INDEMNIFICATION PROCEDURE. Promptly after acquiring knowledge of any loss, action, suit, investigation, proceeding, demand, assessment, audit, judgment or claim against Licensor or Licensee, or as to which Licensor or Licensee may be liable, a party entitled hereunder to be indemnified shall give written notice thereof to the party obligated hereunder to provide indemnification. The indemnifying party at its own expense promptly shall defend, contest or otherwise protect against any damage, loss, deficiency, liability, claim, encumbrance, penalty, cost, expense, action, suit, investigation, proceeding, demand, assessment, audit, judgment or claim made by a third party against which such indemnifying party has agreed to indemnify any indemnified party, and each indemnifying party shall receive from the indemnified party all necessary and reasonable cooperation in said defense, including without limitation the services of employees of the indemnified party who are familiar with the transactions out of which any such damage, loss, deficiency, liability, claim, encumbrance, penalty, cost, expense, action, suit, investigation, proceeding, demand, assessment, audit, judgment or claim may have arisen. The indemnified party shall have the right to control the defense of any such third party proceeding unless it is relieved of its liability hereunder with respect to such defense by the indemnified party. The indemnified party shall have the right to employ separate counsel in any such action and to participate in the defense thereof, but the fees and expenses of such counsel shall not be at the expense of the indemnifying party if the indemnifying party has assumed the defense of the action with counsel reasonably satisfactory to the indemnified party; provided that the fees and expenses of the indemnified party's counsel shall be at the expense of the indemnifying party if (i) the employment of such counsel has been specifically authorized in writing by the indemnifying party or (ii) such indemnified party shall have been advised by counsel hat there is a conflict of interest or issue conflict involved in the representation by counsel employed by the indemnifying party in the defense of such action on behalf of the indemnified party or that there may be one or more legal defenses available to such indemnified party which are not available to the indemnifying party (in which case the indemnifying party shall not have the fight to assume the defense of such action on behalf of such indemnified party, it being understood, however, that the indemnifying party shall not be liable, in connection with any one such action or separate but substantially similar or related actions in the same Jurisdiction arising out of the same general allegations or circumstances, for the + + 11 + +reasonable fees and expenses of more than one separate firm of attorneys for the indemnified party, which firm shall be designated in writing by the indemnified party). The indemnifying party shall have the right, at its option and unless so relieved, to compromise, at its own expense by its own counsel, any such matter involving the asserted liability to a third party of the indemnified party. In the event that the indemnifying party shall undertake to compromise any such asserted liability, the indemnifying party shall notify the indemnified party promptly of its intention to do so. In the event that an indemnifying party after written notice from an indemnified + + + + + +party fails to take timely action to defend any such damage, loss, deficiency, liability, claimed encumbrance, penalty, cost, expense, action, suit, investigation, proceeding, demand, assessment, audit, judgment or claimed the indemnified party shall have the right to defend the same by counsel of its own choosing but at the cost and expense of the indemnifying party. In the event that the indemnified party defends such an asserted liability, it shall not compromise any such asserted liability without the written consent of the indemnifying party, such consent not to be unreasonably withheld or delayed. + +Section 9.4 FURTHER REMEDIES FOR INFRINGEMENT. If Licensee is prevented from its normal use of any Licensed Product or Documentation by injunction or court order arising from, relating to or in connection with any alleged or actual infringement on the intellectual property rights of a third party relating to any Licensed Product or Documentation, then Licensor at its option and in addition to the other remedies contained in this Agreement and at no expense, loss or damage to Licensee shall (a) replace such Licensed Product or Documentation free of any such infringement, (b) modify such Licensed Product or Documentation so that it is free of any such infringement or (c) procure for the benefit of Licensee, whether by license or other release of claim of infringement, the fight to make Sublicense Copies and copies of the Documentation to meet the demand of Redistributors and Customers and to market and sublicense Sublicense Copies and copies of the Documentation. + + ARTICLE 10 AGREEMENT NOT TO COMPETE, CONFIDENTIALITY + +Section 10.1 NONCOMPETITION. Each of Licensor and Licensee understands and acknowledges that Licensor shall be entitled to protect and preserve the going concern value of Licensor's business to the extent permitted by law and that Licensor would not have entered into this Agreement absent the provisions of this Section 10.1 and, therefore, each of Licensor and Licensee agrees that during the term of this Agreement Licensee shall not engage in, represent in any way or be connected with directly or indirectly any business competing with the Licensed Products. + +Section 10.2 CONFIDENTIAL INFORMATION. Licensee understands and agrees that the Licensed Products and any related information marked "Confidential" constitute valuable intellectual property and trade secrets of Licensor and embody substantial creative efforts and confidential information, ideas and expressions belonging to Licensor. Licensor understands and agrees that + + 12 + +any reports supplied pursuant to this Agreement by Licensee to Licensor relating to the Licensed Products contain proprietary information of Licensee. The Licensed Products and related information and such reports are referred to collectively in this Agreement as the "Confidential Information." Each party to this Agreement shall observe at all times complete confidentiality with regard to the Confidential Information of the other party to this Agreement held by such party and shall not permit or authorize access to or disclosure of any such Confidential Information to any other person or entity other than such party's employees and consultants who have executed confidentiality agreements with terms substantially similar to this Agreement. This Section 10.2 will not apply to any Confidential Information that is required to be disclosed by applicable law or any Confidential Information that becomes (a) public other than by virtue of a breach of this Section 10.2 or (b) available to such party from another source (other than any independent contractor engaged by such party to audit pursuant to this Agreement the records of the other party hereto) that is not subject to a confidentiality agreement with the other party hereto of which such party at that time is aware. + +Section 10.3 UNAUTHORIZED USE. Each party to this Agreement shall notify the other party to this Agreement promptly in writing of the existence of any circumstances surrounding any unauthorized knowledge, possession or use of the Confidential Information by any person or entity other than the parties to this Agreement and each of their authorized employees and consultants. + +Section 10.4 REMEDY. Notwithstanding any other provision of this Agreement, each of the parties to this Agreement understands and agrees that the remedy of indemnity payments pursuant to this Agreement and other remedies at law would be inadequate in the case of any breach of the covenants contained in this Article 10 and each party to this Agreement agrees that the other party to this Agreement shall be entitled to equitable relief, including the remedy of specific performance, without posting of bond or other security, with respect to any breach or attempted breach of such covenants. + + ARTICLE 11 AUDITS + +Section 11.1 AUDITS. During the term of this Agreement and the five (5) year period immediately following termination of this Agreement, Licensor will have the right, at its own expense, to audit and examine Licensees records concerning either (a) the reproduction and sublicensing of the Licensed Products and the resulting fees due to Licensor or (b) compliance by Licensee with its obligations as to confidentiality under this Agreement. During the term of this Agreement and the five (5) year period immediately following termination of this Agreement, Licensee will have the right, at its own expense, to audit and examine Licensor's records concerning compliance by Licensor with its obligations as to confidentiality under this Agreement. Any such audit shall be + + + + + +conducted during normal business hours, upon at least three business days prior written notification to the party to be audited stating the purpose of the audit + + 13 + +and in such a manner so as to not unreasonably interfere with such party's business operations. The auditing party shall keep any and all information derived from any audits confidential. Such information is deemed to be "Confidential Information" within the meaning of Article 10. In relation to such information, the parties to this Agreement are subject to the obligations and remedies set forth in Article 10. The auditing party shall not use such information for any purpose other than the purpose of the audit as stated in such party's written notification for such audit. If an audit of Licensee's records and books of account reveals that Licensee has underpaid the fees due under this Agreement to Licensor for the period under audit, Licensee shall pay to Licensor promptly the amount of the underpayment. If the amount of underpayment for the period under audit exceeds five percent (5%) of the total amount owed during such period, Licensee shall reimburse Licensor for all costs and expenses incurred by Licensor in connection with performing the audit. + + ARTICLE 12 LIMITED WARRANTIES + +Section 12.1 NO DEFECTS. For twelve (12) months after delivery of the Master Copy of each Licensed Product to Licensee, Licensor warrants that the media in which the Licensed Products are stored shall be free from defects in materials and workmanship, assuming normal use. Licensee may return any defective media to Licensor for replacement free of charge during such twelve (12) month period. + +Section 12.2 PERFORMANCE. For twelve (12) months after delivery of any Licensed Product to a Customer, whether Customer receives such Licensed Product from Licensee or a Redistributor, Licensor warrants that each Licensed Product will perform as described in the applicable Documentation. If Licensee or any Redistributor or Customer discovers any errors or discrepancies in the Licensed Products from the Documentation during the twelve (12) month warranty period, Licensee shall notify Licensor promptly in writing of such error or discrepancy in sufficient detail to enable Licensor to recreate the error or discrepancy. If the error or discrepancy is found by Licensee prior to the expiration of the ten (10) day evaluation period set forth in Section 4.2, such evaluation period shall be extended ten (10) days from the date of receipt by Licensee of the corrected Licensed Product from Licensor. + +Section 12.3 DUTIES UNDER WARRANTY. If Licensee or any Redistributor or Customer discovers any error in any Licensed Product or discrepancy in any Licensed Product from the Documentation that results in a material loss of performance in the Licensed Product within the twelve (12) month warranty period, then Licensor shall provide Licensee with the correction or method of resolving such error or discrepancy provided that Licensor shall not be responsible for any error or discrepancy caused by failure to use the Licensed Products as specified in the Documentation or any modifications made to any Licensed Product by or on behalf of a party other than Licensor. If such error or discrepancy is not resolved within thirty (30) days after Licensee's + + 14 + +written notice to Licensor, then Licensee as its sole remedy may (a) extend the correction period to a date which is agreeable to Licensor and Licensee or (b) return all copies of the Licensed Products to Licensor with a certification by an authorized representative of Licensee that all copies have been returned to Licensor or have been destroyed and that Licensee has not retained any copies thereof and Licensor shall refund to Licensee the amount paid by Licensee to Licensor for such Licensed Products. Licensee shall pay for all services rendered by Licensor in connection with the Licensed Products or Documentation that are not covered or at that time are no longer covered by the warranty described in this Agreement. + +Section 12.4 EXCLUSIVE REMEDIES. THE REMEDIES SPECIFIED ABOVE SHALL BE THE SOLE AND EXCLUSIVE REMEDIES OF LICENSEE REGARDING THE LICENSED PRODUCTS. LICENSOR SPECIFICALLY DISCLAIMS ANY AND ALL OTHER WARRANTIES OF ANY KIND, EXPRESS, RAPLIED OR STATUTORY, INCLUDING ANY WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. LICENSOR SPECIFICALLY MAKES NO REPRESENTATIONS REGARDING THE SUITABILITY OF THE LICENSED PRODUCTS FOR THE REQUIREMENTS OF ANY REDISTRIBUTOR. OR CUSTOMER CONCERNING CAPACITY, INTERCONNECTIVITY, EXPANDABILITY OR PERFORMANCE. + + ARTICLE 13 LIABILITY + +Section 13.1 LIMIT OF LIABILITY. Licensor's total liability to Licensee under any provision of this Agreement shall be limited to the amount actually paid by Licensee to Licensor for the Licensed Product giving rise to the liability. The existence of claims or suits against more than one Licensed Product shall not enlarge or extend the limit. The parties to this Agreement acknowledge that each of them relied upon the inclusion of this limitation in consideration of entering into this Agreement. IN NO EVENT SHALL A PARTY TO THIS AGREEMENT BE LIABLE TO THE OTHER PARTY TO THIS AGREEMENT FOR ANY SPECIAL, INDIRECT, + + + + + +INCIDENTAL OR CONSEQUENTIAL DAMAGES RESULTING FROM THE USE, OR INABILITY TO USE, THE LICENSED PRODUCTS OR ARISING OUT OF THIS AGREEMENT, INCLUDING BUT NOT LMTED TO LOSS OF PROFIT OR OTHER MONETARY LOSS, LOSS OR INTERRUPTION OF DATA OR CONTUTER TIME, ALTERATION OR ERRONEOUS TRANSNUSSION OF DATA OR PROGRAM ERRORS, EVEN IF SUCH PARTY IS ADVISED IN ADVANCE OF THE POSSIBILITY OF SUCH DAMAGES. + + 15 + + ARTICLE 14 TERM AND TERMINATION + +Section 14.1 TERM. This Agreement shall be effective until the earlier of (a) its termination in accordance with the provisions of this Article 14 or (b) the date that is two (2) years after the date of this Agreement; provided, however, that this Agreement will renew automatically for successive terms of one (1) year each unless a party to this Agreement delivers written notice of termination to the other party to this Agreement at least sixty (60) days prior to the end of the original or any renewal term or the parties to this Agreement do not agree in writing to the Quota Amount referred to in subsection 14.2(b)(1) for any one (1) year renewal term at least sixty (60) days prior to the commencement of such term. + +Section 14.2 TERMINATION. + +(a) Either party to this Agreement may terminate this Agreement: + + (1) Immediately upon written notice if the other party to this Agreement becomes insolvent, is the subject of a petition in bankruptcy that is not resolved within thirty (30) days, admits in writing its inability to pay its debts, makes an assignment for the benefit of creditors, ceases doing business or attempts an unauthorized assignment of this Agreement; or + + (2) Immediately upon written notice if the other party to this Agreement performance of any obligation under this Agreement, including failure to promptly pay any amount due hereunder, and fails to cure such default within thirty (30) days after delivery of written notice specifying the default (with any termination as a result of Licensee's failure to pay amounts due under this Agreement resulting in the acceleration of Licensee's obligation to pay all sums due to Licensor under this Agreement). + +(b) Licensor may terminate this Agreement: + + (1) Upon ninety (90) days prior written notice if Licensee does not enter into Sublicenses and other agreements relating to the Licensed Products with Redistributors and Customers that result in fees payable to Licensor hereunder in an aggregate amount equal to or greater than the Quota Amount for any year during the term hereof. As used herein, the term "Quota Amount" means $50,000 for each of the first and second years of the original term of this Agreement and an amount agreed to in writing by the parties hereto in respect of any subsequent one year renewal term (provided that such amount equals or exceeds $50,000). If Licensor fails to deliver notice of termination pursuant to this subsection 14.2(b)(1) within six (6) months after the end of the term to which such termination relates, Licensor will be deemed to have waived such termination right in respect of such term (but not in respect of subsequent terms); or + + (2) Upon thirty (30) days prior written notice if Licensee enters into an agreement or other arrangement relating to the merger of Licensee with another entity, the acquisition of the majority of Licensee's issued and outstanding capital stock or the acquisition of substantially all of the assets of Licensee. + +Section 14.3 DUTIES UPON TERMINATION. Upon the termination or expiration of the term of this Agreement, the parties shall have the following rights and obligations: + + (a) Within five (5) days of written demand by Licensor to Licensee, Licensee shall return or destroy all copies of the Licensed Products and any materials associated with the Licensed Products in Licensee's possession or control, except that Licensee may retain sufficient copies of the Master Copy of each Licensed Product in object code form to enable Licensee to meet its maintenance and support obligations to its Customers, if any. + + (b) Licensee immediately shall cease any use, reproduction, sublicensing or distribution of the Licensed Products or the Documentation. + + 16 + + (c) Within five (5) days of Licensor's written request, Licensee shall certify in a writing reasonably acceptable to Licensor that except as set forth in this Agreement all copies of the Licensed Products and related material have been delivered to Licensor, destroyed or rendered unusable. + + (d) Licensee shall not use any Licensed Product or Documentation as part of any other product that Licensee may use, sublicense or distribute + + + + + + and Licensee shall cease any use of the Marks associated with the Licensed Products or Documentation. + + (e) All valid Redistributor Agreements and Sublicenses by and between Licensee and any Redistributors and Customers will remain and continue in full force and effect for the remainder of their respective terms, and at Licensor's option Licensee shall assign to Licensor its rights in such agreements with respect to the Licensed Products or Documentation; provided that if Licensor fails to provide reasonable support to any Redistributor or Customer, Licensee may support such Redistributor or Customer without payment of fees to Licensor. + + (f) Licensee promptly shall account for and pay to Licensor all amounts due and owing pursuant to the terms of this Agreement and provide Licensor with all outstanding reports due under this Agreement. + + (g) Licensee immediately shall cease holding itself out as having any connection with any Licensed Product or Licensor, unless Licensee at that time has a connection with Licensor by reason other than this Agreement. + + (h) Licensee shall report to Licensor in reasonable detail the status of all negotiations with prospective Redistributors and Customers or leads to prospective Redistributors and Customers and all services which Licensee is obligated to provide to any Redistributors or Customers. + +Section 14.4 RIGHTS NOT EXHAUSTIVE. The fights and remedies of Licensor included in this Article 14 shall not be exclusive and are in addition to any other rights and remedies provided by law or equity. + +Section 14.5 SURVIVAL. The provisions of Articles 9, 10 and 11, Section 7.5 and this Section 14.5 and all obligations of Licensee to pay any amounts to Licensor under this Agreement will survive the termination of this Agreement. + + 17 + + ARTICLE 15 GENERAL + +Section 15.1 NATURE OF RELATIONSHIP. The relationship existing between Licensee and Licensor is one of an independent contractor, and this Agreement shall not be construed as creating a partnership, joint venture, agency relationship or as granting a franchise under federal or any state law. Each of Licensee and its officers, employees or other representatives shall not enter into or attempt to enter into any obligation on behalf of Licensor. Licensee shall not make any representations to any Redistributors or Customers with respect to the Licensed Products and Documentation, including without limitation representations as to any warranty, covenant or other terms or conditions relating to licensing of the Licensed Products, unless such representations are made (a) in strict accordance with this Agreement or (b) with the prior written consent of Licensor. + +Section 15.2 NOTICES. All notices and other communications hereunder shall be in writing and shall be deemed delivered (i) when delivered if delivered personally or by overnight courier or telecopier with proof of delivery or (ii) three (3) days after such communication is deposited in the United States mail with postage prepaid, if delivered, if mailed by registered or certified mail (return receipt requested) to the parties to this Agreement at the following addresses (or at such other address for a party as shall be specified by like notice): + + (a) if to Licensor, to + + Peregrine/Bridge Transfer Corporation 14141 Southwest Freeway, Suite 6200 Sugar Land, Texas 77478 Attn: President + + and + + (b) if to Licensee, to + + Neon Systems, Inc. 14141 Southwest Freeway, Suite 6200 Sugar Land, Texas 77478 Attn: President + + 18 + +Section 15.3 INTERPRETATION. When a reference is made in this Agreement to an Article, Section, subsection or Exhibit, such reference shall be to an Article, Section, subsection or Exhibit of this Agreement unless otherwise indicated. The table of contents and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Whenever the words "include," "includes" or "including" are + + + + + +used in this Agreement, such term shall be deemed to be followed by the words "without limitation." All accounting terms not defined in this Agreement shall have the meanings determined by generally accepted accounting principles. + +Section 15.4 COUNTERPARTS This Agreement may be executed in two or more counterparts, all of which shall be considered one and the same agreement and shall become effective when two or more counterparts have been signed by each of the parties to this Agreement and delivered to the other parties to this Agreement, it being understood that all such parties need not sign the same counterpart. For purposes hereof, delivery shall be deemed effective upon exchange of signed copies of this Agreement by facsimile, provided that originally signed counterparts of this Agreement are transmitted promptly to the other parties hereto. + +Section 15.5 ENTIRE AGREEMENT, THIRD PARTY BENEFICIARIES. This Agreement (including the documents and instruments referred to herein) (a) constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral, between the parties hereto with respect to the subject matter hereof and (b) is not intended to confer upon any person (including any Redistributor or Customer) other than the parties hereto any rights or remedies hereunder, except as provided in Article 9. + +Section 15.6 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE SIATE OF TEXAS. + +Section 15.7 ASSIGNMENT. Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties hereto without the prior written consent of the other party to this Agreement; provided, however, that Licensor may assign this Agreement to a subsidiary or entity controlling, controlled by or under common control with Licensor. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of and be to this Agreement and their respective successors and permitted assigns. + +Section 15.8 SEVERABILITY. If any provision of this Agreement, or any portion of any provision hereof, shall be deemed invalid or unenforceable pursuant to a final determination of any court of competent jurisdiction or as a result of future legislative action, such determination or action shall be construed so as not to affect the validity or enforceability hereof and shall not affect the validity or effect of any other portion hereof + +Section 15.9 AMENDMENT. This Agreement may be amended only by a written instrument duly signed by each of the parties hereto. + + 19 + +Section 15.10 WAIVER. Any of the terms, covenants, representations, warranties or conditions of this Agreement may be waived only by a written instrument signed by the party to this Agreement waiving compliance. No waiver by any party to this Agreement of any condition or breach of any term, covenant, representation or warranty contained in this Agreement, whether by conduct or otherwise, in any one or more instances, shall be construed as a further or continuing waiver of any such condition or breach or a waiver of any other condition or of the breach of any other term, covenant, representation or warranty set forth in this Agreement. + +IN WITNESS WBEREOF, the parties hereto have executed this Agreement as of the date first above written. + + LICENSOR: PEREGRINE/BRIDGE TRANSFER + + By: /s/ Charles E Noell ---------------------------------- Name: Charles E Noell -------------------------------- Title: General Partner ------------------------------- + + LICENSEE: + + NEON SYSTEMS, INC. + + By: /s/ F. Joseph Backer ---------------------------------- Name: F. Joseph Backer -------------------------------- Title: CEO ------------------------------- + + 20 + + EXHIBIT B THE TERRITORY + + The Territory included is worldwide. \ No newline at end of file diff --git a/full_contract_txt/NETGEAR,INC_04_21_2003-EX-10.16- AMENDMENT #2 TO THE DISTRIBUTION AGREEMENT.txt b/full_contract_txt/NETGEAR,INC_04_21_2003-EX-10.16- AMENDMENT #2 TO THE DISTRIBUTION AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..061a59d0a0014a18a367a8db546168b27d88c1f5 --- /dev/null +++ b/full_contract_txt/NETGEAR,INC_04_21_2003-EX-10.16- AMENDMENT #2 TO THE DISTRIBUTION AGREEMENT.txt @@ -0,0 +1,43 @@ +This Amendment is entered into effective October 1,1996 ("Amendment Date") by and between NETGEAR, Inc. ("NETGEAR"), a wholly owned subsidiary of Bay Networks, Inc., and Ingram Micro ("Distributor") acting on behalf of itself and its affiliates. + +NETGEAR and Distributor having previously entered into a Distributor Agreement ("Agreement") with an Effective Date of March 1,1996, now mutually agree to amend that Agreement as follows: + +1. Subject to the terms of this Amendment, the Territory listed in Section 2 of the Agreement is amended to be the United States and [*]. + +2. During the initial one year period beginning on the Amendment Date, Distributor shall be the only distributor appointed by NETGEAR in [*], subject to Distributor conducting mutually agreed to marketing activities as described in the Marketing Plan for [*] to be developed and agreed to by and between the parties and which shall be attached to and made a part of this Agreement as Exhibit 4a. For the purposes of this provision, distributor shall mean a company acquiring products directly from NETGEAR for resale or license to dealers or other second tier resellers which in turn resell or license the products to end use customers. The foregoing notwithstanding, during the [*] and any subsequent period, NETGEAR reserves the right to sell or license Products in [*] to customers other than distributors such as, but not limited to resellers who procure Products at centralized locations for resale to end-use customers solely through their wholly or majority owned retail outlets, both store-front and catalog. Following the [*], for any extension or renewal term, Distributor's appointment as Distributor shall be non-exclusive and NETGEAR may appoint other distributors in [*] at its sole discretion. + +3. The terms and conditions of this Amendment, shall amend and supersede any conflicting terms of the original Agreement. All other terms of the original Agreement shall remain unchanged. + +IN WITNESS WHEREOF, the parties have executed this Amendment to be effective as of the date first written above. + +NETGEAR: DISTRIBUTOR: + +NETGEAR, INC. INGRAM MICRO + +By: /s/ Lloyd Cainey By: /s/ Michael Terrell --------------- ------------------- Name: /s/ Lloyd Cainey Name: Michael Terrell Title: Exec VP Enterprise Business Group Title: Vice President Purchasing Date: 4/30/97 Date: 2/21/97 + +Ingram Amendment 1 111296 + + CONFIDENTIAL TREATMENT REQUEST + +* Portions denoted with an asterisk have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment. + +[INGRAM MICRO LOGO] + + AMENDMENT #2 TO THE DISTRIBUTION AGREEMENT + +THIS AMENDMENT (the "Amendment") is entered into this 15th day of July 1998, by and between INGRAM MICRO INC. ("Ingram") and NETGEAR, INC. ("Vendor"). + +The parties have agreed to amend their Distribution Agreement ("Agreement") dated October 1,1996. + +1. Section 2, TERRITORY, is amended to be United States, [*]. + +2. This Amendment shall remain in effect for the current term and any renewal term of the Agreement. + +Notwithstanding the foregoing, all other provisions of the Agreement remain unchanged. The undersigned has read this Amendment, agrees hereto, and is an authorized representative of its respective party. + +INGRAM MICRO INC. NETGEAR, INC. 1600 East St. Andrew Place 4401 Great America Parkway Santa Ana, CA 92705 P.O. Box 58185 Santa Clara, CA 95052-8185 + +By: /S/ AC Mann By: /s/ PATRICK Lo ---------------- -------------------- Name: AC Mann Name: PATRICK Lo Title: VP Purchasing Title: V. P. + +Netgear, Inc. 1 Confidential Doc Rev 2/97 7/15/98 \ No newline at end of file diff --git a/full_contract_txt/NETGEAR,INC_04_21_2003-EX-10.16-AMENDMENT TO THE DISTRIBUTOR AGREEMENT BETWEEN INGRAM MICRO AND NETGEAR.txt b/full_contract_txt/NETGEAR,INC_04_21_2003-EX-10.16-AMENDMENT TO THE DISTRIBUTOR AGREEMENT BETWEEN INGRAM MICRO AND NETGEAR.txt new file mode 100644 index 0000000000000000000000000000000000000000..a619de4c0270499854c4d85f0ecb940ee0c50066 --- /dev/null +++ b/full_contract_txt/NETGEAR,INC_04_21_2003-EX-10.16-AMENDMENT TO THE DISTRIBUTOR AGREEMENT BETWEEN INGRAM MICRO AND NETGEAR.txt @@ -0,0 +1,99 @@ +term under the Agreement will not be effective unless mutually agreed to in writing and signed by authorized representatives of both parties. Neither party shall be bound by typographical or clerical errors. + +G. Neither party is liable for its failure or delay to perform its obligations under the Agreement due to strikes, wars, revolutions, acts of terrorism, fires, floods, explosions, earthquakes, shortages in labor, components or materials, government regulations, or other causes beyond its control. + +H. This Agreement may not be assigned by either party without prior written permission from the other party, which permission shall not be unreasonably withheld or delayed. Any attempt by either party to assign any right, or delegate any duty or obligation which arises under the Agreement without such permission will be voidable. + +19. ENTIRE AGREEMENT, GOVERNING LAW + +This Agreement, including its attachment and order acknowledgments under the Agreement, constitutes the entire agreement between Distributor and NETGEAR with respect to the purchase, resale and distribution of the Products and is governed by the laws of the State of California except that body of law dealing with conflicts of law. + +INGRAM NETGEAR Distributor Agreement 11 083096 + +* Portions denoted with an asterisk have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment. + + EXHIBIT 1 + + DISCOUNT SCHEDULE + +The initial Discount offered Distributor for purchase or license of NETGEAR Products included on the NETGEAR Price List in effect on the Effective Date of this Agreement is [*] off of the then current NETGEAR list price. + +Distributor agrees that the foregoing Discount is only applicable to Products included on the NETGEAR Price List on the Effective Date of this Agreement. NETGEAR reserves the right to add Products to the Price List at its sole discretion and any such additional Products shall be offered to Distributor at discounts to be determined at that time. + +INGRAM NETGEAR Distributor Agreement 12 083096 + + EXHIBIT 2 + + DISTRIBUTOR'S ROUTING GUIDE + +INGRAM NETGEAR Distributor Agreement 13 083096 + +CONFIDENTIAL TREATMENT REQUEST + +* Portions denoted with an asterisk have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment. + + EXHIBIT 3 + + CMD NAMED ACCOUNTS [*] + +INGRAM NETGEAR Distributor Agreement 14 092696 + + EXHIBIT 4 + + MARKETING PLAN + +INGRAM NETGEAR Distributor Agreement 15 083096 + + CONFIDENTIAL TREATMENT REQUEST + +* Portions denoted with an asterisk have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment. + + AMENDMENT TO THE DISTRIBUTOR AGREEMENT BETWEEN INGRAM MICRO AND NETGEAR + + + + + +This Amendment is entered into effective October 1,1996 ("Amendment Date") by and between NETGEAR, Inc. ("NETGEAR"), a wholly owned subsidiary of Bay Networks, Inc., and Ingram Micro ("Distributor") acting on behalf of itself and its affiliates. + +NETGEAR and Distributor having previously entered into a Distributor Agreement ("Agreement") with an Effective Date of March 1,1996, now mutually agree to amend that Agreement as follows: + +1. Subject to the terms of this Amendment, the Territory listed in Section 2 of the Agreement is amended to be the United States and [*]. + +2. During the initial one year period beginning on the Amendment Date, Distributor shall be the only distributor appointed by NETGEAR in [*], subject to Distributor conducting mutually agreed to marketing activities as described in the Marketing Plan for [*] to be developed and agreed to by and between the parties and which shall be attached to and made a part of this Agreement as Exhibit 4a. For the purposes of this provision, distributor shall mean a company acquiring products directly from NETGEAR for resale or license to dealers or other second tier resellers which in turn resell or license the products to end use customers. The foregoing notwithstanding, during the [*] and any subsequent period, NETGEAR reserves the right to sell or license Products in [*] to customers other than distributors such as, but not limited to resellers who procure Products at centralized locations for resale to end-use customers solely through their wholly or majority owned retail outlets, both store-front and catalog. Following the [*], for any extension or renewal term, Distributor's appointment as Distributor shall be non-exclusive and NETGEAR may appoint other distributors in [*] at its sole discretion. + +3. The terms and conditions of this Amendment, shall amend and supersede any conflicting terms of the original Agreement. All other terms of the original Agreement shall remain unchanged. + +IN WITNESS WHEREOF, the parties have executed this Amendment to be effective as of the date first written above. + +NETGEAR: DISTRIBUTOR: + +NETGEAR, INC. INGRAM MICRO + +By: /s/ Lloyd Cainey By: /s/ Michael Terrell --------------- ------------------- Name: /s/ Lloyd Cainey Name: Michael Terrell Title: Exec VP Enterprise Business Group Title: Vice President Purchasing Date: 4/30/97 Date: 2/21/97 + +Ingram Amendment 1 111296 + + CONFIDENTIAL TREATMENT REQUEST + +* Portions denoted with an asterisk have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment. + +[INGRAM MICRO LOGO] + + AMENDMENT #2 TO THE DISTRIBUTION AGREEMENT + +THIS AMENDMENT (the "Amendment") is entered into this 15th day of July 1998, by and between INGRAM MICRO INC. ("Ingram") and NETGEAR, INC. ("Vendor"). + +The parties have agreed to amend their Distribution Agreement ("Agreement") dated October 1,1996. + +1. Section 2, TERRITORY, is amended to be United States, [*]. + +2. This Amendment shall remain in effect for the current term and any renewal term of the Agreement. + +Notwithstanding the foregoing, all other provisions of the Agreement remain unchanged. The undersigned has read this Amendment, agrees hereto, and is an authorized representative of its respective party. + +INGRAM MICRO INC. NETGEAR, INC. 1600 East St. Andrew Place 4401 Great America Parkway Santa Ana, CA 92705 P.O. Box 58185 Santa Clara, CA 95052-8185 + +By: /S/ AC Mann By: /s/ PATRICK Lo ---------------- -------------------- Name: AC Mann Name: PATRICK Lo Title: VP Purchasing Title: V. P. + +Netgear, Inc. 1 Confidential Doc Rev 2/97 7/15/98 \ No newline at end of file diff --git a/full_contract_txt/NETGEAR,INC_04_21_2003-EX-10.16-DISTRIBUTOR AGREEMENT.txt b/full_contract_txt/NETGEAR,INC_04_21_2003-EX-10.16-DISTRIBUTOR AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..16711c4654880ea4ee9b9441943bf872130d4a2e --- /dev/null +++ b/full_contract_txt/NETGEAR,INC_04_21_2003-EX-10.16-DISTRIBUTOR AGREEMENT.txt @@ -0,0 +1,321 @@ +CONFIDENTIAL TREATMENT REQUEST * Portions denoted with an asterisk have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment. EXHIBIT 10.16 + + DISTRIBUTOR AGREEMENT BETWEEN INGRAM MICRO AND NETGEAR + +NETGEAR Agreement Number: N115 Effective Date: March 1, 1996 Term: 1 Year + +Ingram Micro, a corporation organized under the laws of the State of California, having a place of business located at 1600 E. St. Andrew Place, Santa Ana, California, USA, ("Distributor") and NETGEAR, Inc. ("NETGEAR"), a wholly owned subsidiary of Bay Networks, Inc., organized under the laws of the State of Delaware, having a place of business at 4401 Great America Parkway, Santa Clara, California, USA, agree that the following terms govern the purchase, sale, and licensing of Products (as defined below) between the parties. + +NOTICES: + +All notices given under the Agreement are to be in writing and may be sent by mail, telefax, courier service or otherwise delivered to the party to be notified at the following address, or to such other address as may have been substituted by written notice: + + To Distributor: To NETGEAR: 1600 E. ST. ANDREWS PL. 4401 Great America Parkway P.O. BOX 25125 P.O. Box 58185 SANTA ANA, CA 92799-5125 Santa Clara, CA 95052-8185 (???) Patricia Dutra-Gerard + +DISTRIBUTOR AND NETGEAR ACKNOWLEDGE THAT EACH HAS READ THIS AGREEMENT TOGETHER WITH THE ATTACHED EXHIBIT, UNDERSTANDS IT AND AGREES TO BE BOUND BY ITS TERMS AND CONDITIONS. + +AGREED: AGREED: + +Distributor NETGEAR, Inc. + +By: /s/ Sanat K. Dutta By: /s/ Joe Booker ---------------------- ----------------------- (authorized signature) (authorized signature) + +Name: Sanat K. Dutta Name: Joe Booker --------------- ---------------- (type or print) (type or print) + +Title: Executive vice President Title: Vice President & General Manager Commercial Business Unit + +Date: October 16, 1996 Date: November 5, 1996 + +Ingram NETGEAR Distributor Agreement 083096 + +1. APPOINTMENT + +Subject to Distributor's performance of its obligations under this Agreement, Distributor is appointed as a NETGEAR Distributor and may purchase certain equipment ("Hardware") and licenses for software including revisions and updates ("Software"), as are listed in NETGEAR's then-current price list (the "Price List") for resale within the Territory (as defined below). During the initial one (1) year term of this Agreement. Distributor shall be the only distributor appointed by NETGEAR in the Territory, subject to Distributor conducting mutually agreed to marketing activities as described in the Marketing Plan to be developed and agreed to by and between the parties and which shall be attached to and made a part of this Agreement as Exhibit 4. For the purposes of this provision, distributor shall mean a company acquiring products directly from NETGEAR for resale or license to dealers or other second tier resellers which in turn resell or license the products to end use customers. The foregoing notwithstanding, during the initial one (1) year term and any subsequent period. NETGEAR reserves the right to sell or license Products in the Territory to customers other than distributors such as, but not limited to resellers who procure Products at centralized locations for resale to end-use customers solely through their wholly or majority owned retail outlets, both store-front and catalog. Following the initial one (1) year term, for any extension or renewal term, Distributor's appointment as Distributor shall be non-exclusive and NETGEAR may appoint other distributors in the Territory at its sole discretion. + +2. TERRITORY + +Except as may be otherwise provided by law, Distributor may not distribute or re-export any Products outside of the Territory identified herein as the United States without the specific written consent of NETGEAR. In the event that Distributor wishes to expand the scope of the Territory and is able to + + + + + +adequately sell and support Products within the additional region, then upon the approval of NETGEAR, the parties may choose by written agreement to modify the Territory. + +3. ORDERS + +A. Distributor may purchase Products by placing orders under this Agreement which are accepted by NETGEAR. No order will be effective until accepted by delivery of NETGEAR's order acknowledgment. Distributor agrees that each order placed with NETGEAR for Products shall be governed by this Agreement, regardless of any additional or conflicting term in Distributor's order. Unless otherwise specifically stated in the Order, all Orders accepted by NETGEAR shall be deemed to be for immediate release. Orders may be sent by telefax or other electronic media approved by NETGEAR and must specify: + + (a) Distributor's Purchase Order number, + + (b) Product and/or Service number and description for each item ordered; + + (c) Desired quantities; + + (d) Purchase price for each Product or Service ordered; + + (e) Tax status, including exemption certificate number if tax exempt; + + (f) Preferred shipping method; and + + (g) Exact "Bill to" and "Ship to" address. + +B. MINIMUM/STANDARD LOT SIZES. Products must be ordered in the minimum and/or standard lot size quantities specified in the Price Schedule. Orders for less than minimum or non-standard lot size quantities of any Product may, at NETGEAR's discretion, be rejected. + +4. PRICES, PRICE LIST, TAXES AND PAYMENT + +INGRAM NETGEAR Distributor Agreement 2 083096 + +A. PRICES. Prices for Produce are those set out in NETGEAR's Price List, less the applicable discount specified in Exhibit 1. All Product prices are F.O.B. NETGEAR's point of shipment, except as specified in Section 5 D. + +B. CHANGES. NETGEAR may modify the Price List at any time, including changes to the Products or their corresponding list prices, but NETGEAR will provide Distributor with written notice thirty days in advance of the effective date of any price increase or Product deletion. Price decreases will apply to the corresponding Products that art shipped by NETGEAR on or after the effective date of the list price decrease. + +C. INVENTORY PRICE PROTECTION. In the event of a list price decrease on any of the Products, Distributor may apply for a credit on those units of Product: a) which were shipped by NETGEAR to Distributor no more than [*] prior to the effective date of the list price decrease and remain unsold in Distributor's inventory or are being returned under open RMA's or are in the inventories of certain mutually agreed to Distributor retail accounts ("CMD Named Accounts") as listed in Exhibit 3 to this Agreement on the effective date of the list price decrease or b) which were in transit between NETGEAR and Distributor on the effective date of the list price decrease. + +The amount of the credit on any unit shall be equal to [*]. The foregoing notwithstanding, in the event any of the Products were acquired under special competitive pricing arrangements, the credit on such Products shall be [*]. + +In order to receive a credit, Distributor a) must submit to NETGEAR within [*] of the effective date of the list price decrease, a report of inventory eligible for the price credit and must have submitted its regular monthly inventory report on time, according to Section 11, in each of the [*] prior to the effective date of the list price decrease. Upon verification by NETGEAR of the eligible units and credit amounts, NETGEAR will issue a credit to the Distributor's account. + +D. TAXES AND OTHER LEVIES. Prices are exclusive of any tax, value-added tax, fee, duty or governmental charge, however designated (except for NETGEAR's franchise taxes or for taxes on NETGEAR's net income) which may be levied or based on the Products, their sale, importation, use, or possession, or on this Agreement. All such taxes or duties shall be for the account of Distributor and any such taxes or duties required to be paid or collected by NETGEAR shall be paid by Distributor to NETGEAR unless Distributor provides NETGEAR with a valid certificate of exemption acceptable to the appropriate taxing or governmental authority. + +E. PAYMENT. Except as may be specifically authorized in writing by NETGEAR, and subject to NETGEAR's continuing approval of Distributor's credit status and financial condition, Distributor will pay NETGEAR for all Products ordered by Distributor within [*] of the date the corresponding invoice is issued by NETGEAR. The foregoing notwithstanding, the parties agree that payment for the initial order placed by Distributor under this Agreement shall be due and payable within [*] of the date the corresponding invoice is issued by NETGEAR. NETGEAR, in its sole discretion, reserves the right to specify, and to change from time to time, Distributor's credit line and payment terms. All payments are to be made in U.S. dollars. Payment for shipments made outside of the United States shall be made by wire transfer in accordance with wire + + + + + +transfer procedures provided by NETGEAR. If at any time Distributor is delinquent in the payment of any invoice, exceeds the credit line established by NETGEAR, or is otherwise in breach of the Agreement, NETGEAR may, in its discretion, withhold shipment (including partial shipments) of any order or may require Distributor to pay cash on delivery for further shipments. Payment not received by NETGEAR when due may be subject to a late payment + +INGRAM NETGEAR Distributor Agreement 3 083096 + +service charge provided NETGEAR has provided 10 days written notice to Distributor of Distributor's failure to pay. The foregoing notwithstanding, Distributor shall not be deemed in default under this provision if Distributor withholds payment of amounts legitimately in dispute on any invoice provided that (1) Distributor promptly pays the undisputed portion of the invoice in accordance with the terms of this Agreement; (2) Distributor provides NETGEAR with written notice of the disputed amount within 10 days of receipt of the invoice; and (3) Distributor works in good faith with NETGEAR to resolve any dispute within a reasonable time period. + +5. SHIPMENT, CANCELLATION, RETURNS, TITLE, RISK OF LOSS, SECURITY INTEREST + +A. SHIPMENT. Unless otherwise instructed by Distributor, NETGEAR will ship Products ordered by Distributor using the method and carrier specified in Distributor's then current Routing Guide, as may be amended from time to time by written notice from Distributor. The version of the Routing Guide which is in force on the Effective Date of this Agreement is attached to and made a part of this Agreement as Exhibit 2. Distributor is responsible for all freight, handling, insurance and other transportation charges, and agrees to pay all such charges if separately identified on NETGEAR's invoice. NETGEAR will ship freight collect, uninsured, if so instructed by Distributor's order. + +B. CANCELLATION AND RESCHEDULING. Distributor may not cancel or reschedule any order, in whole or in part, less than five business days prior to the corresponding shipment date specified in NETGEAR's order acknowledgment. + +C. RETURNS. Products received by Distributor as a result of an error by NETGEAR in shipment may be returned for credit. Such credit will include an amount equal to the purchase price of the Product shipped in error as well as the cost of return freight paid by Distributor to return the Product to NETGEAR. Products with defects covered by the warranty may be returned for remedy under the warranty. Prior to returning any Product, whether for exchange or warranty or non-warranty action, Distributor must obtain a Return Materials Authorization (RMA) number from NETGEAR. Distributor should return the Product to NETGEAR, with shipping charges prepaid. NETGEAR will not accept collect shipments. Any Product returned to NETGEAR, which is not returned in accordance with the terms of this Agreement, may be refused. + +D. TITLE, RISK OF LOSS, SECURITY INTEREST. For all shipments to locations within the United States, title to the Hardware passes to Distributor when presented by NETGEAR or its agent to the carrier, from which point Distributor is responsible for risk of all loss, damage to, or theft of all Products. For shipments to locations outside of the United States, (i) risk of loss of all Products passes from NETGEAR to Distributor upon arrival at the point of entry in the destination country specified in Distributor's order. + +6. SOFTWARE LICENSES + +A. INTERNAL USE BY DISTRIBUTOR. Distributor may purchase for its internal use licenses to Software and accompanying documentation by placing orders under this Agreement. Distributor's right to use the Software is subject to the "shrink-wrap" license agreement with the Software and in its accompanying documentation shipped by NETGEAR to Distributor. + +B. DISTRIBUTION OF SOFTWARE LICENSES TO END-USERS. Distributor may procure and distribute Software and accompanying documentation by placing orders under this Agreement. The terms of the licenses for such Software to which end-users are subject are included as a "shrink-wrap" license agreement with the Software and in its accompanying documentation when shipped by NETGEAR (the + +INGRAM NETGEAR Distributor Agreement 4 083096 + +"License Agreement"). Distributor agrees that for each Software product it procures under this Agreement, Distributor will (i) assure the deliver the License Agreement to its customers, and (ii) use reasonable efforts to inform its resale customers of the requirement to deliver the License Agreement to their end-user customers in the form supplied by NETGEAR with the Products. + +C. LIMITATIONS. Distributor may not, nor authorize its resale customers or the end-user to translate, decompile, disassemble, use for any competitive analysis, or reverse engineer the Software or its documentation, in any way, except for the event where the end-user locates Products within the European Union, in which case the Software Directive enacted by the Council of European Communities Directive dated 14 May 1991 will apply to the examination of the Software to facilitate interoperability; in such event Distributor agrees to notify, and cause its end-user to notify NETGEAR of any such intended examination of the Software and procure from NETGEAR its support and assistance. Distributor agrees to not translate, nor allow end-users to translate any portion of the Software or associated documentation into any other format or foreign language without the prior written consent of NETGEAR. In no event will Distributor grant the U.S. Government rights in any Software greater than those set out in subparagraphs (a) through (d) of the Commercial Computer Software- Restricted Rights clause at FAR 52,227-19 and the limitations for civilian + + + + + +agencies set out the License Agreement; and subparagraph (c)(l)(ii) of the Rights in Technical Data and Computer Software clause at DFARS 252.227-7013 for agencies of the Department of Defense. + +7. WARRANTIES + +A. WARRANTY PERIOD. The warranty period for each Product is specified in the Price List that is in effect on the date NETGEAR receives Distributor's order, and shall apply regardless of any extended warranty period which Distributor may choose to provide to its customers. NETGEAR reserves the right to change a warranty period for a specific Product but only for orders placed after the effective date of such change, provided that the minimum warranty period for all Products is ninety days, except for those Products specifically identified in the Price List as provided " AS IS" with no warranties. + +B. HARDWARE WARRANTY. NETGEAR warrants to end-user that each item of Hardware will be free from defects in workmanship and materials for its respective warranty period which begins on the date of purchase by the end user. Should a Product fail within this warranty period, Distributor shall replace such defective Product from Distributor's inventory and accept return of the failed Product from Distributor's customer. At intervals to be mutually agreed upon between NETGEAR and Distributor. Distributor shall contact NETGEAR to receive a Return Material Authorization number for the collected failed Product. Upon receipt of the failed Product, NETGEAR shall issue a credit to Distributor for Distributor's purchase price of the replacement Product issued, less any prior credits or allowances. End-users' exclusive remedy is to receive replacement Product from reseller and NETGEAR's sole obligation and liability under this warranty is to issue an off-setting credit to reseller for Product returned by reseller on behalf of its end-user because of defects in workmanship or material. + +C. SOFTWARE WARRANTY. NETGEAR warrants to the end-user that each item of Software, as delivered or updated by NETGEAR and properly installed and operated on the Hardware or other equipment it is originally licensed for, will function substantially as described in its then-current user documentation during its respective warranty period. If any item of Software fails to so perform during its warranty period, as the sole remedy NETGEAR of NETGEAR's supplier will at its discretion provide a suitable fix, patch or workaround for the problem which may be included in a future revision of the Software. For specific Software which is distributed by NETGEAR as a licensee of third parties, additional warranty terms offered by such third parties to end-users may apply. + +INGRAM NETGEAR Distributor Agreement 5 083096 + +D. DISTRIBUTOR'S INTERNAL USE WARRANTY. For Products ordered under this Agreement for Distributor's internal use, NETGEAR provides Distributor the same warranties as described above for end-users. + +E. LIMITATIONS. NETGEAR does not warrant that any item of Software is error-free or that its use will be uninterrupted. NETGEAR is not obligated to remedy any Software defect which cannot be reproduced with the latest revision of the Software. These warranties do not apply to any Product which has been (i) altered, except by NETGEAR or in accordance with its instructions, or (ii) used in conjunction with another vendor's product resulting in the defect, or (iii) damaged by improper environment, abuse, misuse, accident or negligence. Replacement parts furnished under this warranty may be refurbished or contain refurbished components. + +THE FOREGOING WARRANTIES AND LIMITATIONS ARE EXCLUSIVE REMEDIES AND ARE IN LIEU OF ALL OTHER WARRANTIES EXPRESS OR IMPLIED, INCLUDING WITHOUT ANY LIMITATION WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. ANY PRODUCT THAT MAY BE FURNISHED BY NETGEAR WHICH IS NOT LISTED IN THE PRICE LIST, OR WHICH IS IDENTIFIED IN THE PRICE LIST AS AN "AS IS" PRODUCT, IS FURNISHED "AS IS" WITH NO WARRANTIES OF ANY KIND. + +8. PRODUCT RETURNS + +Prior to returning any Product, whether for exchange or warranty or non-warranty action, Distributor must obtain a Return Materials Authorization (RMA) number from NETGEAR. Distributor should return the product to NETGEAR, [*]. NETGEAR will not accept collect shipments. Any Product returned to NETGEAR, which is not returned in accordance with the terms of this Agreement, may be rejected. + +9. PRODUCT EXCHANGE PRIVILEGES + +A. Distributor may return previously purchased Products for replacement by an equal or greater value of different Products, under the following conditions: + + a) Distributor may return Products only within the [*] period following [*] of each year. + + b) The total value of the returned Products shall not exceed [*] of the Net Shipments invoiced by NETGEAR for all Products, [*], during the [*] immediately preceding each of the above dates. + + c) The replacement Products are not identical to the returned Products. Distributor shall be invoiced for the replacement Products at prices in effect at the time of return, and credited for the value of the returned products at the prices actually paid by the Distributor less any prior credits. + + d) The returned Products have not been in the Distributor's inventory for more than [*] after shipment from NETGEAR. + + e) The returned Products are in their original shipping containers and + + + + + +have not been altered, damaged or used. + +10. DISTRIBUTOR'S RESPONSIBILITIES + +INGRAM NETGEAR Distributor Agreement 6 083096 + +A. PROMOTION AND SALE. Distributor shall sell or license Products only to resale customers which will in-turn resell or transfer the licenses to those Products to end use customers. Distributor may not sell or license Products directly to end use customers without the express written consent of NETGEAR. Distributor agrees to use commercially reasonable efforts to maximize sales of NETGEAR Products. + +B. SUPPORT. Distributor shall be the sole point of contact for its resale customers and their end-use customers in all support situations. Distributor shall provide first level support for its customers, NETGEAR shall provide second and third level support to Distributor in order to resolve end user technical problems. + +C. TRAINING. Distributor agrees to maintain, and to adequately and thoroughly train on an on-going basis, a sufficient staff of qualified sales, marketing, technical and support personnel familiar with the applications, features, benefits, operation and configuration of the Products so as to effectively promote and support the Products and to assure end-user satisfaction. NETGEAR agrees to provide assistance to Distributor to allow Distributor to comply with the foregoing training responsibility. + +D. RESTRICTION ON APPOINTMENT OF ADDITIONAL DISTRIBUTORS. NETGEAR's agreement not to appoint additional distributors of NETGEAR Products in the Territory during the [*] of this Agreement is predicated upon Distributor performing the mutually agreed upon activities included in the Marketing Plan attached as Exhibit 4. In the event Distributor fails to perform the activities included in the Marketing plan in [*], NETGEAR may appoint additional distributors in the Territory and the provisions of this Agreement appointing Distributor as the only NETGEAR distributor in the Territory shall be deemed deleted. + +11. REPORTS + +A. Each month Distributor shall submit a Point of Sale (POS) shipments report covering the preceding month, broken out by Product. The report may be submitted via BBS and shall include, at a minimum, Distributor's reseller's name, address, part number, quantity shipped and unit cost. + +B. Each month Distributor shall prepare and forward to NETGEAR a weekly report showing Distributor's inventory of the Products purchased and licensed from NETGEAR as of the end of the previous calendar month. The report may be submitted via BBS and shall include, at a minimum the part number and the number of units and purchase value of the inventory remaining by Product. + +C. From time to time, but not more than twice per year, NETGEAR may request access to information about the Distributor's business reasonably required to insure that Distributor is in compliance with the terms of this Agreement and the Distributor will grant the right for a NETGEAR representative to visit the Distributor's place of business during normal business hours at a mutually agreed upon time to examine such information. + +12. PROPRIETARY RIGHTS AND INFORMATION + +A. USE OF PROPRIETARY INFORMATION. "Proprietary information includes, without limitation, diagnostics, the Software, all documentation for Software, other user manuals, as well as electronically and visually transmitted printed materials and information disclosed by Distributor or NETGEAR, such as new product information, financial or technical data, information reported under section II above or other information or data that is marked with a proprietary or confidential legend. Each party agrees to hold the Proprietary Information of the other in confidence and to use the Proprietary Information only for the purposes expressly permitted under this Agreement, and to disclose Proprietary Information only to its employees and contractors as authorized in this Agreement and then only on a need-to-know basis. Each party agrees to maintain adequate internal procedures, including appropriate agreements with employees and authorized third parties, to protect the confidentiality of the + +INGRAM NETGEAR Distributor Agreement 7 083096 + +Proprietary Information as required by this Agreement. Each party is entitled to appropriate injunctive relief in the event of any unauthorized disclosure or use of its Proprietary Information by the other party. + +B. LIMITATIONS. Proprietary Information does not include information which (i) is rightfully in the receiving party's possession in a complete and tangible form before it is received from the disclosing party, (ii) is or becomes a matter of public knowledge through no fault of the receiving party, (iii) is rightfully furnished to the receiving party by a third party without restriction on disclosure or use, or (iv) is independently developed by the receiving party without use of or reference to the disclosing party's Proprietary Information. + +D. RESERVATION OF RIGHTS. NETGEAR, on behalf of itself and its suppliers, reserves all proprietary rights in and to (i) all designs, engineering details, and other data pertaining to the Products, (ii) all original works, computer programs, fixes, updates (but not Distributor's or 'end-users' developed programs), discoveries, inventions, patents, know-how and techniques arising out + + + + + +of work done wholly or in part by NETGEAR or its subcontractors in connection with the Agreement, and (iii) any and all products developed as a result of such work. The performance by NETGEAR of professional Services shall not be deemed a work-for-hire but shall instead be subject to this section. + +E. ADMINISTRATIVE PROCEDURES. Distributor and end-users are each responsible for the security of their own proprietary and confidential information and for maintaining adequate procedures apart from the Products to reconstruct lost or altered files, data or programs. + +13. TRADEMARKS AND TRADE NAMES + +A. USE OF TRADEMARKS. In the advertising and promotion of the Products, Distributor agrees to use NETGEAR's and certain of Bay Networks' trade names, logos and trademarks (the "Trademarks") as reasonably instructed by NETGEAR during the term of the Agreement. Solely for this purpose, NETGEAR and Bay Networks grant Distributor a non-exclusive, royalty-free, limited right to use the Trademarks. Distributor will not make or permit the removal or modification of any Trademarks or tags, proprietary notices, labels, or other identifying marks placed by Bay Networks, NETGEAR or their agents on the Products or associated literature. + +B. RIGHTS TO TRADEMARKS. Distributor acknowledges that Bay Networks is the exclusive owner of the Trademarks and the use of the Trademarks by Distributor does not convey to Distributor any right, title or interest in or to the Trademarks. Distributor has no claim or right in the Trademarks, service marks, or trade names owned, used or claimed now or in the future by NETGEAR. Distributor agrees that it will not register, nor attempt to register any Trademark or any mark confusingly similar to any Trademark in any jurisdiction unless expressly approved in writing by Bay Networks in advance. + +C. NOTIFICATION. In order to assure proper use and protection of Trademarks, Distributor agrees to inform NETGEAR in writing if Distributor purchases, or is offered for purchase, any Products with a Trademark or other mark of NETGEAR from a source other than NETGEAR, its subsidiaries, or an authorized NETGEAR Distributor. + +14. CLAIMS OF INFRINGEMENT + +A. INDEMNIFICATION. NETGEAR agrees to defend at its own expense any action brought against Distributor to the extent that it is based on a claim that any Product infringes a United States or Territory patent, copyright, trade mark, trade secret or other valid intellectual property right, and will pay any costs and damages finally awarded against Distributor in any such actions which are attributable to any such claim. NETGEAR shall have no liability for any settlement or compromise made without its prior written consent. NETGEAR shall, at its option and expense, (1) procure the right to continue using the Product. + +INGRAM NETGEAR Distributor Agreement 8 083096 + +(2) replace or modify the Product so that it becomes non-infringing or, if (1) or (2) are not reasonably or economically possible. (3) Distributor may return the Product to NETGEAR for a refund of an amount equal to the depreciated value of the equipment, or an amount equal to the Distributor's actual purchase price paid without any depreciation minus any prior credits or allowances if the returned Products are in their original shipping containers and have not been altered, damaged or used. + +B. LIMITATIONS. NETGEAR has no liability to Distributor under this section entitled CLAIMS OF INFRINGEMENT with respect to any claim which is based upon or results from (i) the combination of any Product with any equipment, device, firmware or software not furnished by NETGEAR, or (ii) any modification of any Product by a party other than NETGEAR. (iii) Distributor's failure to install or have installed changes, revisions or updates as instructed by NETGEAR, or (iv) NETGEAR's compliance with Distributor's or end-user's specifications, designs or instructions. + +15. TERM OF AGREEMENT AND TERMINATION + +A. TERM. This Agreement will be in effect for one year from the Effective Date and will automatically renew for successive one (1) year periods unless terminated as provided below. + +B. TERMINATION. This Agreement may be canceled at any time without cause, by either party upon ninety (90) days written notice to the other party. Either party may terminate this Agreement immediately if (i) the other party becomes insolvent, files or has filed against it a petition in bankruptcy, or ceases doing business; or (ii) the other party fails to cure a material breach of the Agreement within thirty (30) days after receipt of written notice of such breach from the party not in default. Upon termination of the Agreement by NETGEAR for Distributor's breach, NETGEAR may cancel all of Distributor's unfulfilled orders without further obligation. This Agreement may be terminated at any time without cause by either party upon ninety (90) days written notice to the other party. + +C. EFFECT OF TERMINATION. Except as otherwise specifically stated in the Agreement, neither party will be liable to the other for damages in any form by reason of the expiration or earlier termination of the Agreement. + +D. CONTINUING EFFECT. Any expiration or earlier termination of the Agreement does not modify or alter any of the obligations of the parties which accrued prior to such expiration or termination. The sections of the Agreement which address taxes; duty; fee; payment; security interest; proprietary rights and information; warranties; foreign reshipment; remedies; limitations; termination and governing law survive any expiration or termination of the + + + + + +Agreement. The section entitled SOFTWARE LICENSES also survives any expiration or termination provided Distributor and end-users continues to comply with the provisions of the applicable software license terms. Except as expressly agreed in writing between the parties, no party is liable to the other for any dollar amounts, costs or damages by reason of the expiration or earlier termination of the Agreement. + +16. LIMITATION OF LIABILITY + +A. NETGEAR agrees to indemnify Distributor against any claim arising out of or resulting from the Products or the Agreement, provided that any such claim (i) is attributable to bodily injury, death, or to injury to or destruction of physical property (other than the Products), and (ii) is caused by the negligent act or omission of NETGEAR or a material defect in the Product. This obligation on the part of NETGEAR is subject to Distributor's obligation to (a) give NETGEAR prompt written notice of any such claim, (b) grant NETGEAR control of the defense and settlement of such claim, and (c) assist fully in the defense provided that NETGEAR reimburses Distributor's out-of pocket costs. NETGEAR has no liability for any settlement or compromise made without its prior written consent. Under no circumstances + +INGRAM NETGEAR Distributor AGREEMENT 9 083096 + +is NETGEAR liable for any third-party claims except for those described in this section and in the section entitled CLAIMS OF INFRINGEMENT. + +B. NETGEAR, at its expense, agrees to maintain insurance coverage to protect against its liabilities under the Agreement in an amount no less than is reasonable or required by applicable statute. This insurance will include (a) worker's compensation insurance, (b) comprehensive general liability insurance, including coverage for product liability, bodily injury and property damage, and (c) automobile liability insurance. Upon Distributor's written request, NETGEAR will furnish the applicable certificate of insurance. + +IN NO EVENT WILL EITHER PARTY OR THEIR RESPECTIVE PARENT CORPORATIONS OR SUPPLIERS BE LIABLE FOR (1) THE COST OF SUBSTITUTE PROCUREMENT, SPECIAL, INDIRECT, INCIDENTAL, OR CONSEQUENTIAL DAMAGES, OR (2) ANY DAMAGES RESULTING FROM INACCURATE OR LOST DATA OR LOSS OF USE OR PROFITS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT, THE FURNISHING OF SERVICES, OR THE USE OR PERFORMANCE OF PRODUCTS, EVEN IF INFORMED OF SUCH DAMAGES. EXCEPT FOR DAMAGES ARISING UNDER SECTIONS 14.A AND 16.A, IN NO EVENT WILL NETGEAR's OR BAY NETWORKS' TOTAL LIABILITY FOR ANY DAMAGES IN ANY ACTION BASED ON OR ARISING OUT OF OR IN CONNECTION WITH THE AGREEMENT EXCEED THE [*] TO NETGEAR PURSUANT TO THE AGREEMENT. EXCEPT FOR DAMAGES ARISING FROM BREACH OF SECTIONS 6.C AND 12,13 OR 17, IN NO EVENT WELL DISTRIBUTOR's TOTAL LIABILITY FOR ANY DAMAGES IN ANY ACTION BASED ON OR ARISING OUT OF OR IN CONNECTION WITH THE AGREEMENT EXCEED THE [*] TO NETGEAR PURSUANT TO THE AGREEMENT. + +17. FOREIGN RESHIPMENT + +This Agreement is made subject to all laws, regulations, orders or other restrictions on the export from the United States of Products and accompanying documentation, or of other technical data and information about such Products, which may be imposed from time to time. Distributor agrees not to export, directly or indirectly, any such Products or information to any country for which an export license or other governmental approval is required at the time of export without first obtaining such license or approval. Distributor is solely responsible, at its own expense, for obtaining all necessary import and re-export permits and certificates and for the payment of any and all taxes and duties imposed upon the movement and delivery of Products. + +18. GENERAL + +A. The relationship of NETGEAR and Distributor is that of independent contractors. There is no relationship of agency, partnership, joint venture, employment or franchise between the parties. Neither party has the authority to bind the other or to incur any obligation on the other's behalf or to represent itself as the other's agent or in any way which might result in confusion as to the fact that the parties are separate and distinct entities. + +B. If any provision of this Agreement is held to be invalid or unenforceable, the remainder of the provisions shall remain in full force and effect. + +C. NETGEAR and Distributor agree to comply with the provisions of all applicable federal, state, county and local laws, ordinances, regulations and codes, domestic and foreign. + +INGRAM NETGEAR Distributor Agreement 10 083096 + +D. NETGEAR reserves the right to change the discount schedule, policy or program, whether referred to in the Agreement or set forth in an Exhibit to the Agreement. For changes which, in NETGEAR's opinion, may adversely affect Distributor, NETGEAR will provide thirty (30) days notice, or such longer period as NETGEAR deems appropriate, prior to the effective date of such change. + +E. Distributor will keep suitable records to demonstrate compliance with this Agreement. NETGEAR or its representative, at NETGEAR's cost may review these records during normal business hours for the sole purpose of determining Distributor's compliance with this Agreement. + +F. Any waiver, amendment or modification of any right, remedy or other + + + + + +term under the Agreement will not be effective unless mutually agreed to in writing and signed by authorized representatives of both parties. Neither party shall be bound by typographical or clerical errors. + +G. Neither party is liable for its failure or delay to perform its obligations under the Agreement due to strikes, wars, revolutions, acts of terrorism, fires, floods, explosions, earthquakes, shortages in labor, components or materials, government regulations, or other causes beyond its control. + +H. This Agreement may not be assigned by either party without prior written permission from the other party, which permission shall not be unreasonably withheld or delayed. Any attempt by either party to assign any right, or delegate any duty or obligation which arises under the Agreement without such permission will be voidable. + +19. ENTIRE AGREEMENT, GOVERNING LAW + +This Agreement, including its attachment and order acknowledgments under the Agreement, constitutes the entire agreement between Distributor and NETGEAR with respect to the purchase, resale and distribution of the Products and is governed by the laws of the State of California except that body of law dealing with conflicts of law. + +INGRAM NETGEAR Distributor Agreement 11 083096 + +* Portions denoted with an asterisk have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment. + + EXHIBIT 1 + + DISCOUNT SCHEDULE + +The initial Discount offered Distributor for purchase or license of NETGEAR Products included on the NETGEAR Price List in effect on the Effective Date of this Agreement is [*] off of the then current NETGEAR list price. + +Distributor agrees that the foregoing Discount is only applicable to Products included on the NETGEAR Price List on the Effective Date of this Agreement. NETGEAR reserves the right to add Products to the Price List at its sole discretion and any such additional Products shall be offered to Distributor at discounts to be determined at that time. + +INGRAM NETGEAR Distributor Agreement 12 083096 + + EXHIBIT 2 + + DISTRIBUTOR'S ROUTING GUIDE + +INGRAM NETGEAR Distributor Agreement 13 083096 + +CONFIDENTIAL TREATMENT REQUEST + +* Portions denoted with an asterisk have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment. + + EXHIBIT 3 + + CMD NAMED ACCOUNTS [*] + +INGRAM NETGEAR Distributor Agreement 14 092696 + + EXHIBIT 4 + + MARKETING PLAN + +INGRAM NETGEAR Distributor Agreement 15 083096 + + CONFIDENTIAL TREATMENT REQUEST + +* Portions denoted with an asterisk have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment. + + AMENDMENT TO THE DISTRIBUTOR AGREEMENT BETWEEN INGRAM MICRO AND NETGEAR \ No newline at end of file diff --git a/full_contract_txt/NETGROCERINC_07_31_1998-EX-10.15-SPONSORSHIP AGREEMENT.txt b/full_contract_txt/NETGROCERINC_07_31_1998-EX-10.15-SPONSORSHIP AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..c1ec35cef31e2a05cc23cc90b6c41d5f0d32b339 --- /dev/null +++ b/full_contract_txt/NETGROCERINC_07_31_1998-EX-10.15-SPONSORSHIP AGREEMENT.txt @@ -0,0 +1,289 @@ +CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY [*]. THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. + + SPONSORSHIP AGREEMENT + +This agreement ("Agreement") is entered into as of the 15th day of December, 1997 ("Effective Date"), by and between Excite, Inc., a California corporation, located at 555 Broadway, Redwood City, California 94063 ("Excite"), and NetGrocer, Inc. a Delaware corporation, located at 333 Seventh avenue, 11th Floor, New York, NY 10001 ("NetGrocer"). + + RECITALS + +A. Excite maintains a site on the Internet at http://www.excite.com (the "Excite Site") and owns and/or manages related World Wide Web sites worldwide (collectively, the Excite Site and the related web sites are referred to as the "Excite Network") which, among other things, allow its users to search for and access content and other sites on the Internet. + +B. Within the Excite Site, Excite currently organizes certain content into topical channels, including a Shopping Channel. + +C. NetGrocer operates an online supermarket service at its Web site located at http://www.netgrocer.com (the "NetGrocer Site"). + +D. NetGrocer wishes to promote use of the NetGrocer Site to Excite's users by sponsoring the Excite Shopping Channel and purchasing banner advertising and other promotional links on the Excite Site. + +1. SPONSORSHIP + + a) Excite will promote NetGrocer in the Excite Shopping Channel as follows: + + i) For the term of this Agreement, Excite will display a text and/or graphic link (consistent with the format used on similar links on the same page) to the NetGrocer Site on the Excite Shopping Channel main page. + + ii) Excite will display a text and/or graphic link (consistent with the format used on similar links on the same page) to the NetGrocer Site in the home page of the Excite Shopping Channel "Such a Deal" promotion in four separate one-week segments during each year of the term of the Agreement, once every calendar quarter. + + iii) Excite will display a text and/or graphic link (consistent with the format used on similar links on the same page) to the NetGrocer Site in the home page of the Excite Shopping Channel "Shop Here First" promotion in four separate one-week segments during the term of the Agreement, once every calendar quarter. Excite shall not display the link under this Section 1 (a)(iii) in the same weeks as the promotional link under Section 1 (a)(ii). + + iv) For the term of the Agreement, Excite will display a text and/or graphic link (consistent with the format listed on similar links on the same page) to the NetGrocer Site on the front page of the "Gourmet and Groceries" department of the Excite Shopping Channel. + + v) Excite will display a text and/or graphic link (consistent with the format used on similar links on the same page) to the NetGrocer Site in the "Shop Here First" promotion in the Gourmet and Groceries department of the Excite Shopping Channel for the term of the Agreement. Such link will be displayed as the left-most link or top-most link at least fifty percent (50%) of the time. + + vi) Excite currently plans to develop a coupon promotion area in the Excite Shopping Channel, tentatively called "Coupon Corner". When launched, Excite will display an advertising banner or text or graphic link (consistent with the format used on similar links on the same page) to the NetGrocer Site will Coupon Corner for the remainder of the term of the Agreement. + + b) Excite will promote NetGrocer in the Excite Site as follows: + + + + + + i) For the term of the Agreement, Excite will display a link to the NetGrocer Site (consistent with the format used on similar links on the same page) in the default configuration of the "Favorite Links" listing of Web sites on the home page of the Health & Fitness and the Food & Drink departments of the Lifestyle Channel, and the home page of the Lifestyle Channel in the Excite Site. + + ii) For the term of the Agreement, Excite will display a text and/or graphic link (consistent with the format used on similar links on the same page) to the NetGrocer Site on the "Exciting Stuff' promotion on the home page of the Lifestyle Channel and the home page of the Food & Drink department of the Lifestyle Channel in the Excite Site. + + iii) Excite will display a text and/or graphic link (consistent with the format used on similar links on the same page) to the NetGrocer + + -2- + + Site in the area reserved for promotional rotations on the home page of the Excite Site for one week in each year of the term of the Agreement. + + iv) Excite will display NetGrocer's advertising banners in the Lifestyle and Shopping Channels on the Excite Site. + + v) Excite will display a link (consistent with the format used on similar links on the same page) to a co-branded version of the NetGrocer Site in the "Try, These First" area on Excite Search results pages in response to mutually determined relevant search terms. The co-branded version of the NetGrocer Site will comply with Excite's then-current standards applicable to third party sites promoted through "Try, These First" links. + + vi) For the term of the Agreement, Excite will display a link to the NetGrocer Site (consistent with the format used on similar links on the same page) in the default configuration of the "services" or comparable module on the default configuration of the My Excite Channel. + + c) Excite will display NetGrocer's advertising banners on Excite Search results pages on the Excite Site in response to mutually determined keywords, including the following: NetGrocer, Peapod, Oncart, Shoppers Express, grocery, groceries, women, female, disabled, senior, military, family, baby, kids, children, pets, dogs, cats staples, supermarket, drug store, and club store. Excite will work with NetGrocer to develop a more extensive list of keywords and, when Excite implements keyphrase advertising banners, Excite will work-with NetGrocer to develop a mutually-determined list of keyphrases. + + d) For the term of the Agreement, Excite will display NetGrocer's advertising banners in general rotation on the Excite Site, on the MailExcite free email service and on Excite's Internet chat service. + + e) Excite will use reasonable commercial efforts to deliver [*] "Impressions" of the promotional placements and advertising banners described in Sections 1 (a) - (d) in the first year of the term of the Agreement and to deliver [*] "Impressions" of the promotional placements and advertising banners described in Sections 1 (a) - (d) in the second year of the term of the Agreement. For the purposes of this Agreement, an "Impression" is defined as any link to the NetGrocer Site, whether graphic, text or any combination of graphic and text, served by Excite to a user as part of an HTML page, part of the Excite's Internet chat service or part of search results displayed in "Excite Shopping Service powered by Jango". + + -3- + + f) Excite guarantees that it will deliver [*] "Click-throughs" on the promotional placements and advertising banners described in Section 1 (a) - (d) in the first year of the term of the Agreement by delivering [*] of the annual guaranteed "Click-throughs" in the first quarter of the first year of the term of the Agreement, a cumulative total of [*] of the annual guaranteed "Click-throughs" in the second quarter of the first year of the term of the Agreement, a cumulative total of [*] of the annual guaranteed "Click-throughs" in the third quarter of the first year of the term of the Agreement and a cumulative total of 100% of the annual guaranteed "Click-throughs" in the fourth quarter of the + + + + + + first year of the term of the Agreement. Excite guarantees that it will deliver four million fifty thousand (4,050,000) "Click-throughs" on the promotional placements and advertising banners described in Section 1(a) - (d) in the second year of the term of the Agreement by delivering [*] of the annual guaranteed "Click-throughs" in the first quarter of the second year of the term of the Agreement, a cumulative total of [*] of the annual guaranteed "Click-throughs" in the second quarter of the second year of the term of the Agreement, a cumulative total of [*] of the annual guaranteed "click-throughs" in the third quarter of the second year of the term of the Agreement and a cumulative total of 100% of the annual guaranteed "Click-throughs" in the fourth quarter of the second year of the term of the Agreement. For the purposes of this Agreement, a "Click-through" occurs when a user activates the link to the NetGrocer Site (the address or addresses of which are provided by NetGrocer for such Impression) contained in an Impression and (i) the activation of the link to the NetGrocer Site is recorded by Excite's servers or (ii) in the case of "Try These First" links only, until Excite has the technical capability to count the activation of "Try These First" links to the NetGrocer Site, the user is referred to the NetGrocer Site through the activation of a "Try These First' link and the referral is recorded by NetGrocer's servers. Until Excite has the technical capability to count the activation of "Try These First" links to the NetGrocer Site, NetGrocer will report to Excite the number of "Try These First" referrals it records within twenty (20) days following the end of each calendar month. + + g) If Excite misses any quarterly guaranteed Click-through amount, Excite will make good the difference within [*] days following the end of such quarter. If Excite does not make good the difference within [*] days, NetGrocer may suspend (but not eliminate) its payments of the sponsorship and advertising fees described in Section 5(b) and 5(c) until the make-good is delivered, at which time NetGrocer will resume its payments of the sponsorship and advertising fees. + + h) Excite will use commercially reasonable efforts to maintain the Excite Network and display the promotional placements and advertising banners + + -4- + + described in Section 1 (a) - (d) during the term of the Agreement and to display the promotional placements and advertising banners on the Excite Site in the following proportions: [*] in the Shopping Channel, [*] in the other targeted Channels and keyword banners and [*] in general rotation. + + i) The content and design of the advertising banners described in Section 1(a) - (d) will be created by NetGrocer subject to Excite's then-current standards applicable to advertising banners. + + j) Excite will provide account management support for NetGrocer's sponsorship of the Excite Site. Excite and NetGrocer will hold monthly review of the performance of the promotional placements and advertising banners described in Section 1 (a) - (d) and the sponsorship objectives. + +2. LAUNCH DATE + + a) The "Launch Date" is the date of the first display of the promotional placements and advertising banners described in Sections 1 (a) - (d). The parties intend that the Launch Date will be December 15, 1997. + + b) NetGrocer and Excite will use reasonable efforts to achieve the scheduled Launch Date provided that, no later than fourteen (14) days prior to the scheduled Launch Date, NetGrocer provides final versions of all graphics, text, keywords, banner advertising, promotional placements, other promotional media and valid URL links necessary to implement the promotional placements and advertising banners described in Section 1 (a) - (dj (collectively, "Impression Material") to Excite. + + c) In the event that NetGrocer fails to provide the Impression Material to Excite fourteen (14) days in advance of the scheduled Launch Date, Excite may (i) reschedule the Launch Date according to the availability of Excite's engineering resources after delivery of the complete Impression Material or (ii) commence delivery of Impressions based on Impression Material in Excite's possession at the time. + + d) NetGrocer may revise, update and/or replace the Impression Material at any time in its sole discretion. Within three (3) business days of Excite's receipt of any revised advertising banners, Excite shall replace the former advertising banners with the updated advertising banners. Text and/or graphics in the "Exciting Stuff' and "Such A Deal" promotions may be + + + + + + replaced with new text and/or graphics twice per month. All other text links may be replaced with new text links once per month. + + -5- + +3. EXCLUSIVITY + + a) For the term of the Agreement, Excite will not enter into any agreement to display and shall not display on the Excite Site content created by Excite promoting NetGrocer's "Competitors", content created by NetGrocer's Competitors, promotional placements and/or advertising banners from NetGrocer's Competitors or make available on the Excite Site online supermarket sales offered by NetGrocer's Competitors. + + b) For the purposes of this Agreement, "Competitors" means online supermarkets, which offer selections of consumer packaged goods and groceries comparable to NetGrocer or off-Web supermarkets, as listed in Exhibit A. The parties may amend Exhibit A from time to time and Excite will not unreasonably withhold its consent to the inclusion of bona fide Competitors submitted by NetGrocer. + + c) In the event of a dispute between the parties regarding the inclusion or exclusion of an online supermarket from Exhibit A or the display on the Excite Site of advertising or promotional material from an online supermarket, the parties will follow the dispute resolution process described in Section 13(c) without the prerequisite of submitting the dispute to mediation. In the event that it is determined that Excite violated the Agreement by excluding a bona fide NetGrocer Competitor from Exhibit A or displayed on the Excite Site advertising or promotional material from a bona fide NetGrocer Competitor, Excite will be obligated to (i) immediately add the online supermarket to Exhibit A, (ii) immediately remove from the Excite Site any advertising or promotional material from the online supermarket and (iii) provide NetGrocer with advertising and promotional value, without additional cost, equal to the advertising and promotional value provided to the online supermarket prior to the removal of its advertising and promotional material from the Excite Site. + + d) Notwithstanding the foregoing, Excite may display Excite Search results links to NetGrocer's Competitors in Excite Search results pages in response to user queries, may display links to NetGrocer's Competitors in Excite's general directory of Web sites and, after giving NetGrocer reasonable advance notice, in search results displayed in "Excite Shopping Service powered by Jango". For the term of this Agreement. Excite will display links to the NetGrocer Site as search results displayed in "Excite Shopping Service powered by Jango" for the categories for which NetGrocer carries products until requested not to do so by NetGrocer. + + -6- + +4. CUSTOMER INFORMATION + + NetGrocer retains all right, title and interest to information regarding customers who access the NetGrocer Site pursuant to the Agreement. + +5. SPONSORSHIP, ADVERTISING AND CLICK-THROUGH FEES + + a) A one-time sponsorship initiation fee of [*] is due and will be paid to Excite upon execution of the Agreement as compensation for costs of initiating access to the Excite Network, set-up costs and other expenses associated with Excite's initiation of the links, placements, advertisements and promotions contemplated by this Agreement. + + b) Separate and apart from the one-time sponsorship initiation fee NetGrocer shall pay to Excite sponsorship and advertising fees for the first year of the term of the Agreement in the total amount of [*] payable in nine equal monthly installments of [*], commencing on March 15, 1998. NetGrocer will pay the remainder of the monthly installments on or prior to the fifteenth day of each of the next eight (8) calendar months. + + c) Separate and apart from the one-time sponsorship initiation fee, NetGrocer shall pay to Excite sponsorship and advertising fees for the second year of the term of the Agreement in the total amount of [*] payable in equal monthly installments of [*], commencing on December 15, 1998. NetGrocer will pay the remainder of the monthly installments on or prior to the fifteenth day of each of the next eleven (11) calendar months. + + d) Separate and apart from the one-time sponsorship initiation fee and sponsorship and advertising fees, NetGrocer will pay + + + + + + Excite [*] for each Click-through on the promotional placements and advertising banners described in Section 1(a) - (d) occurring during that year in excess of [*] during the first year of the term of the Agreement. NetGrocer will make these Click-through payments (if any) to Excite within thirty (30) days of Excite's monthly report and invoice reflecting Click-throughs during the first year of the term of the Agreement in excess of [*] + + e) Separate and apart from the one-time sponsorship initiation fee and sponsorship and advertising fees, NetGrocer will pay Excite [*] for each Click-through on the promotional placements and + + -7- + + advertising banners described in Section 1(a) - (d) in excess of [*] occurring in the second year of the term of the Agreement. NetGrocer will make these Click-through payments (if any) to Excite with within thirty (30) days of Excite's monthly report and invoice reflecting Click-throughs during the second year of the term of the Agreement in excess of [*] + + f) In its sole discretion, during the first year of the term of the Agreement NetGrocer may elect to terminate the display of its banner advertising on the Excite Network for the remainder of the first year of the term of the Agreement once the number of Click-throughs on the promotional placements and advertising banners described in Section 1 (a) - (d) exceeds [*] in the first year of the term of the Agreement. This election will not relieve NetGrocer of its obligation to make Click-through payments on non--banner Impressions. + + g) In its sole discretion, during the second year of the term of the Agreement, NetGrocer may elect to terminate the display of its banner advertising on the Excite Network once the number of Click-throughs on the promotional placements and advertising banners described in Section 1 (a) - (d) exceeds [*] in the second year of the term of the Agreement. This election will not relieve NetGrocer of its obligation to make Click-through payments on non-banner Impressions. + + h) The one-time sponsorship initiation fee, sponsorship and advertising fees and Click-through payments are net of any agency commissions to be paid by NetGrocer. + + i) During the term of the Agreement, on a weekly basis, Excite will provide NetGrocer with a detailed report showing the number of Impressions of the advertising banners described in Section 1 (a) - (d) and the number of Click-throughs on the advertising banners described in Section 1 (a) - (d). + + j) During the term of the Agreement, within twenty (20) days following the end of each calendar month, Excite will send NetGrocer a detailed report showing the number of Impressions of the different promotional placements and text links described in Section 1 (a) - (d) and the number of Click-throughs on the promotional placements described in Section 1 (a) - (d). + + k) Excite will maintain accurate records with respect to calculation of all payments due under this Agreement. NetGrocer may, upon no less than thirty (30) days prior written notice to Excite cause an independent Certified Public Accountant to inspect the records of Excite reasonably + + -8- + + related to the calculation of such payments during Excite's normal business hours. The fees charged by such Certified Public Accountant will be paid by NetGrocer unless the audit finds a discrepancy of more than five percent (5%) with respect to the item being audited, in which case Excite shall be responsible for the payment of the reasonable fees for such inspection. + +6. PUBLICITY + + Neither party will make any public statement, press release or other announcement relating to the terms of or existence of this Agreement without the prior written approval of the other party, except as may be required to the extent advised by counsel for a party that such disclosure is necessary or appropriate to comply with applicable law. Notwithstanding the foregoing, the parties agree to issue an initial press release regarding the relationship between Excite and NetGrocer, the timing and wording of which will be mutually agreed upon,. + +7. OTHER BUSINESS OPPORTUNITIES + + a) Excite currently plans to develop a consumer packaged goods ("CPG") program that would combine the broad reach of the Excite Network with the depth of CPG merchants' industry + + + + + + contacts and sales staffs. Under this program, Excite and each CPG merchant would develop co-branded Web pages on the Excite Network that would promote the merchant's goods cr provide content of interest to Excite's users. Excite would run dual promotional efforts, one that sends consumers to each CPG merchant's co-branded area and a second that sends consumers to the portion of the Excite Network that promotes the entire CPG program. Excite and NetGrocer agree to negotiate in good faith to establish the terms and conditions for NetGrocer's participation in Excite's CPG program when and if launched. + + b) Excite currently plans to make available sponsorship opportunities on its WebCrawler Site (located at http://www.webcrawler.com) generally similar to the opportunity described by this Agreement, with the significant exception that merchants will not be granted category exclusivity or rights to exclude competitors on the WebCrawler Site. Excite and NetGrocer agree to negotiate in good faith to establish the terms and conditions for NetGrocer's participation in available sponsorship opportunities on the WebCrawler Site when and if launched. + + -9- + +8. TERM AND TERMINATION + + a) The term of this Agreement will begin on December 15, 1997 and will end the later of (i) December 15, 1999 or (ii) Excite's delivery of all of the guaranteed Click-throughs described in Section 1(f). + + b) Either party may terminate this Agreement, in the event that the other party materially breaches its obligations or guarantees hereunder and such breach remains uncured for sixty (60) days following written notice to the breaching party of the breach. + + c) All payments that would be due pursuant to Sections 5(b) - (d) up to the date of any termination or expiration of this Agreement will be payable in full within thirty (30) days following such termination or expiration. + + d) The provisions of Section 4 (Customer Information), Section 9(a) and 9(b), Section 10 (Confidentiality), Section 11 (Warranty and Indemnity), Section 12 (Limitation of Liability) and Section 13 (Dispute Resolution) will survive any termination or expiration of this Agreement. + +9. TRADEMARK OWNERSHIP AND LICENSE + + a) NetGrocer retains all right, title and interest in and to the NetGrocer Site, its trademarks, service marks and trade names worldwide, subject to the limited license granted to Excite hereunder. + + b) Excite will retain all right, title and interest in and to its trademarks, service marks and trade names worldwide, subject to the limited license granted to NetGrocer hereunder. + + c) Each party hereby grants to the other a non-exclusive, limited license to use its trademarks, service marks or trade names only as specifically described in this Agreement. All such use shall be in accordance with each party's reasonable policies regarding advertising and trademark usage as established from time to time. + + d) Upon the expiration or termination of this Agreement, each party will cease using the trademarks, service marks and/or trade names of the other and Excite will cease the display of any banner advertising and/or links to the NetGrocer Site except as the parties may agree in writing. + +10. CONFIDENTIALITY + + a) For the purposes of this Agreement, "Confidential Information" means information received from the disclosing party or any of its affiliates or representatives about the disclosing party's (or its suppliers') business or + + -10- + + activities that is proprietary and confidential, which shall include all business, financial, technical trade secret and other information of a party marked or designated by such party as "confidential or "proprietary. + + b) Confidential Information will not include information that (i) is in or enters the public domain without breach of this Agreement, (ii) the receiving party lawfully receives from a third party without restriction on disclosure and without breach of a nondisclosure obligation or (iii) the receiving party knew prior to receiving such information from the + + + + + + disclosing party or develops independently. + + c) Each party agrees (i) that it will not disclose to any third patty or use any Confidential Information disclosed to it by the other except as expressly permitted in this Agreement and (ii) that it will take all reasonable measures to maintain the confidentiality of all Confidential Information of the other party in its possession or control, which will in no event be less than the measures it uses to maintain the confidentiality of its own information of similar importance. + + d) Notwithstanding the foregoing, each party may disclose Confidential Information (i) to the extent required by a court of competent jurisdiction or other governmental authority or otherwise as required by law or (ii) on a "need-to-know" basis under an obligation of confidentiality to its employees, legal counsel, accountants, banks and other financing sources and their advisors. + + e) The terms and conditions of this Agreement will be deemed to be the Confidential Information of each party and will not be disclosed without the written consent of the other party. + +11. WARRANTY AND INDEMNITY + + a) NetGrocer will indemnify, defend and hold harmless Excite, its affiliates, officers, directors, employees, consultants and agents from any and all third party claims, liability, damages and/or costs (including, but not limited to, reasonable attorneys fees) arising from: + + i) The breach of any warranty, representation or covenant in this Agreement; or + + ii) Any claim that the advertising banners created by NetGrocer infringe or violate any third party's copyright, patent, trade secret, trademark, right of publicity or right of privacy or contain any defamatory content; or + + -11- + + iii) Any claim arising from content displayed on the NetGrocer Site; + + provided that Excite will promptly notify NetGrocer of any and all such claims and will reasonably cooperate with NetGrocer with the defense and/or settlement thereof; and provided further that, if any settlement requires an affirmative obligation of, results in any ongoing liability to or prejudices or detrimentally impacts Excite in any way and such obligation, liability, prejudice or impact can reasonably be expected to be material, then such settlement shall require Excite's written consent (not to be unreasonably withheld or delayed) and Excite may have its own counsel in attendance at all proceedings and substantive negotiations relating to such claim. + + b) EXCEPT AS SPECIFIED IN THIS AGREEMENT, NEITHER PARTY MAKES ANY WARRANTY IN CONNECTION WITH THE SUBJECT MATTER OF THIS AGREEMENT AND HEREBY DISCLAIMS ANY AND ALL IMPLIED WARRANTIES, INCLUDING ALL IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE REGARDING SUCH SUBJECT MATTER. + +12. LIMITATION OF LIABILITY + + EXCEPT UNDER SECTION 11(a), IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, WHETHER BASED ON BREACH OF CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE, WHETHER OR NOT THAT PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE. THE LIABILITY OF EXCITE FOR DAMAGES OR ALLEGED DAMAGES HEREUNDER, WHETHER IN CONTRACT, TORT OR ANY OTHER LEGAL THEORY, IS LIMITED TO, AND WILL NOT EXCEED, THE TOTAL AMOUNTS PREVIOUSLY PAID OR TO BE PAID BY NETGROCER TO EXCITE HEREUNDER [*] + +13. DISPUTE RESOLUTION + + a) The parties agree that any breach of either of the parties' obligations regarding trademarks, service marks or trade names and/or confidentiality would result in irreparable injury for which there is no adequate remedy at law. Therefore, in the event of any breach or threatened breach of a party's obligations regarding trademarks, service marks or trade names or confidentiality, the aggrieved party will be entitled to seek equitable relief in addition to its other available legal remedies in a court of competent jurisdiction. + + -12- + + b) In the event of disputes between the parties arising from or concerning in any manner the subject matter of this + + + + + + Agreement, other than disputes arising from or concerning trademarks, service marks or trade names and/or confidentiality, the parties will first attempt to resolve the dispute(s) through good faith negotiation. In the event that the dispute(s) cannot be resolved through good faith negotiation, the parties will refer the dispute(s) to a mutually acceptable mediator for hearing. + + c) In the event that disputes between the parties arising from or concerning in any manner the subject matter of this Agreement, other than disputes arising from or concerning trademarks, service marks or trade names and/or confidentiality, cannot be resolved through good faith negotiation and mediation, the parties will refer the dispute(s) to the American Arbitration Association for resolution through binding arbitration by a single arbitrator pursuant to the American Arbitration Association's rules applicable to commercial disputes. + +14. GENERAL + + a) Assignment. Neither party may assign this Agreement, in whole or in part, without the other party's written consent (which will not be unreasonably withheld), except that no such consent will be required in connection with (i) a merger, reorganization or sale of all, or substantially all, of such party's assets or (ii) the assignment and/or delegation of such party's rights and responsibilities hereunder to a wholly-owned subsidiary or joint venture in which that party holds an interest. Any attempt to assign this Agreement other than as permitted above will be null and void. + + b) Governing Law. This Agreement will be governed by and construed in accordance with the laws of the State of California, notwithstanding the actual state or country of residence or incorporation of NetGrocer. + + c) Notice. Any notice under this Agreement will be in writing and delivered by personal delivery, express courier, confirmed facsimile, confirmed email or certified or registered mail, return receipt requested, and will be deemed given upon personal delivery, one (1) day after deposit with express courier, upon confirmation of receipt of facsimile or email or five (5) days after deposit in the mail. Notices will be sent to a party at its address set forth below or such other address as that party may specify in writing pursuant to this Section. + + d) No Agency. The parties are independent contractors and will have no power or authority to assume or create any obligation or responsibility on behalf of each other. This Agreement will not be construed to create or imply any partnership, agency or joint venture. + + -13- + + e) Force Majeure. Any delay in or failure of performance by either party under this Agreement will not be considered a breach of this Agreement and will be excused to the extent caused by any occurrence beyond the reasonable control of such party including, but not limited to, acts of God, power outages and governmental restrictions. Notwithstanding the foregoing, either party may terminate the Agreement in the event that a delay due to force majeure continues for a period of sixty (60) uninterrupted days. + + f) Severability. In the event that any of the provisions of this Agreement are held by to be unenforceable by a court or arbitrator, the remaining portions of the Agreement will remain in full force and effect. + + g) Entire Agreement. This Agreement is the complete and exclusive agreement between the parties with respect to the subject matter hereof, superseding any prior agreements and communications (both written and oral) regarding such subject matter. This Agreement may only be modified, or any rights under it waived, by a written document executed by both parties. + +NetGrocer Excite, Inc. + +By: /s/ Daniel Nissan By: /s/ Robert C. Hood -------------------------- -------------------------- Name: Daniel Nissan Name: Robert C. Hood ------------------------ ------------------------ Title: President & CEO Title: EVP-CFO ----------------------- ----------------------- Date: 12/30/97 Date: 12-31-97 ------------------------ ------------------------ + +333 Seventh Avenue 555 Broadway 11th Floor Redwood City, California 94063 New York, New York 10001 650.568.6000 (voice 650.568.6030 (fax) + + + + + + -14- + + EXHIBIT A + + LIST OF NETGROCER COMPETITORS + +Peapod + +Shoppers Express/Oncart + + -15- \ No newline at end of file diff --git a/full_contract_txt/NETZEEINC_11_14_2002-EX-10.3-MAINTENANCE AGREEMENT.txt b/full_contract_txt/NETZEEINC_11_14_2002-EX-10.3-MAINTENANCE AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..95992b572c982d23cc6e92c31fabd8310ae49266 --- /dev/null +++ b/full_contract_txt/NETZEEINC_11_14_2002-EX-10.3-MAINTENANCE AGREEMENT.txt @@ -0,0 +1,31 @@ +EXHIBIT 10.3 + +NETZEE, INC. + +MAINTENANCE AGREEMENT + +This Agreement provides for Continued Service and for Netzee to provide basic maintenance in support following expiration of the initial one (1) year term of the License/Services Schedule. + +The Continued Service provided by Netzee will be the operation, maintenance, and support of the computer systems, software and interfaces included in the System. + +Bankers Bank agrees to pay fees equal to $40 per month for all Participating Banks (original or added) for which maintenance is provided. + +The maintenance is for a period of one (1) year commencing upon expiration of the initial one (1) year term of the License/Services Schedule. Following the completion of such maintenance term, Bankers Bank may, at its option, renew maintenance for subsequent periods of one (1) year each, subject to adjustments proposed by Netzee not to exceed 5% at least sixty (60) days in advance of the applicable renewal date. + +Maintenance provided by Netzee during the term of this Agreement shall include (1) standard maintenance upgrades and modifications offered by Netzee to its customers generally, standard maintenance upgrades and modifications offered by Netzee to its customers generally, and for such purpose Netzee will use commercially reasonable efforts to make and include (without limitation) as such modifications changes and upgrades necessary to comply with generally applicable industry and regulatory requirements of which it is notified (2) 5x12 call-in support between hours of 6:30 a.m. and 6:30 p.m. Eastern Time Monday through Friday, (3) in the event of material discrepancies between the Services as provided and the specifications for such Services (which shall be furnished in reasonably acceptable form), reasonable effort (in relation to importance, impact, and scheduled development plans) to correct those discrepancies, and (4) availability of basic Services with at least 99% uptime between 4:00 a.m Monday and 7:00 p.m. Friday and between 8:00 a.m. Saturday and 2:00 p.m. Saturday Eastern Time, exclusive of outages caused by off-peak prescheduled maintenance or causes beyond Netzee's reasonable control (including third-party equipment or communications). + +THIS MAINTENANCE AGREEMENT IS GOVERNED BY, AND SHALL BE SUBJECT TO, THE TERMS AND CONDITIONS OF THE MASTER AGREEMENT BETWEEN NETZEE AND BANKERS BANK, INCLUDING THE LIMITED WARRANTY AND DISCLAIMER AND LIMITATIONS OF LIABILITY PROVIDED THEREIN. SUCH TERMS AND CONDITIONS ARE HEREBY AFFIRMED BY BOTH PARTIES AND INCORPORATED BY REFERENCE IN THIS MAINTENANCE AGREEMENT, INCLUDING, WITHOUT LIMITATION, ALL LICENSES GRANTED OR EXERCISABLE THEREUNDER. + +COMMENCEMENT DATE FOR MAINTENANCE UNDER THIS ADDENDUM: MARCH 1, 2001 + +1 + +IN WITNESS WHEREOF, the undersigned duly authorized representatives of the parties hereto have made and entered in this Agreement. + +NETZEE, INC. THE BANKERS BANK, a Georgia banking corporation + +By: /s/ Richard S. Eiswirth By: /s/ Kevin Tweddle ------------------------ -------------------------- + +Name: Richard S. Eiswirth Name: Kevin Tweddle ------------------------ -------------------------- Title: SEVP & CFO Title: SVP & CFO ------------------------ -------------------------- + +2 \ No newline at end of file diff --git a/full_contract_txt/NEXSTARFINANCEHOLDINGSINC_03_27_2002-EX-10.26-OUTSOURCING AGREEMENT.txt b/full_contract_txt/NEXSTARFINANCEHOLDINGSINC_03_27_2002-EX-10.26-OUTSOURCING AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..bcd3c882b7b1d2eb3366dba0a571de29615ad561 --- /dev/null +++ b/full_contract_txt/NEXSTARFINANCEHOLDINGSINC_03_27_2002-EX-10.26-OUTSOURCING AGREEMENT.txt @@ -0,0 +1,753 @@ +EXHIBIT 10.26 + + OUTSOURCING AGREEMENT + +WYZZ, Inc. and WYZZ Licensee, Inc. (collectively "WYZZ") and Nexstar Broadcasting of Peoria, L.L.C. ("NEXSTAR") hereby enter into this Agreement (this "Agreement") dated November 28, 2001. WYZZ and Nexstar are sometimes referred to herein individually as a "Party" and collectively as the "Parties". + + RECITALS + + WHEREAS, WYZZ is the licensee, pursuant to authorizations issued by the Federal Communications Commission (the "FCC"), of Broadcast Television Station WYZZ ("WYZZ-TV") licensed in the Peoria-Bloomington, Illinois market and is experienced as an FCC licensee in the management and operation of commercial television stations; and + + WHEREAS, NEXSTAR is the licensee, pursuant to authorizations issued by the FCC, of Broadcast Television Station WMBD-TV ("WMBD-TV ") licensed in the Peoria-Bloomington, Illinois market and is experienced as an FCC licensee in the management and operation of commercial television stations; and + + WHEREAS, WMBD-TV and WYZZ-TV are sometimes referred to herein collectively as the "Stations;" and + + WHEREAS, during the term of this Agreement, WYZZ wishes to retain Nexstar to provide certain non-programming related operational and managerial services on its behalf, subject to the terms and conditions of this Agreement and all in conformity with the policies and procedures of WYZZ (as they relate specifically to WYZZ-TV) and the rules, regulations, and policies of the FCC; and + + WHEREAS, none of the services to be provided by Nexstar to WYZZ hereunder are intended to abrogate WYZZ's exclusive authority and duty, as the FCC licensee of WYZZ-TV, to manage and control programming on WYZZ-TV; and + + WHEREAS, Nexstar agrees to provide the services to WYZZ in conformity with the policies and procedures of WYZZ (as they relate specifically to WYZZ-TV) and all rules, regulations, and policies of the FCC; and + + WHEREAS, it is the Parties' expectation that by entering into this Agreement the operational efficiencies of each of the Stations will improve and economies of scale will be achieved, resulting in an increase in the Broadcast Cash Flow (as hereinafter defined) to each of the Parties from their respective Stations. + + NOW, THEREFORE, IN CONSIDERATION OF the mutual covenants herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto, intending to be legally bound, agree as follows: + + 1. Provision of Services. + + (a) Consistent with the rules, regulations, and policies of the FCC, Nexstar shall, during the Term (as hereinafter defined), provide to WYZZ-TV the following services (the "Services"): + + (i) sale of advertising time on WYZZ-TV; + + (ii) the performance of certain administrative, operational, and business functions other than with respect to programming but including the coordination of traffic and billing functions; + + (iii) consultation services regarding programming, including, where applicable, news and public affairs; + + (iv) the supplying of all accounting, bookkeeping and related services; + + (v) the monitoring, maintenance, repair, and replacement of WYZZ's technical equipment and facilities, including capital equipment replacement expenditures, in order to ensure that the technical facilities of WYZZ-TV are in compliance with the rules and regulations of the FCC; and + + (vi) assistance with the negotiation of retransmission consent with cable, satellite and other multi-channel video providers. + + (b) In order to accommodate the provision of the Services by Nexstar, WYZZ agrees to make available to Nexstar (subject to any lease and/or financing agreements applicable thereto) for use without fee or charge the facilities and equipment described on Exhibit A hereto (the "Equipment"), all of which Equipment shall be appropriately tagged indicating the ownership thereof. Nexstar shall maintain the Equipment in good order and repair in accordance with industry standards. Subject to the reduction of the Section 2(a) Amount in accordance with Section 2(a) hereof, Nexstar shall bear the cost of maintaining and repairing the Equipment. Nexstar shall provide the functions required by this Agreement subject to (i) each Party's absolute right and duty to control and manage its own programming, personnel and finances, (ii) the other provisions of this Agreement and (iii) the rules, regulations and policies of the FCC. + + + + + + 2 + +Notwithstanding anything to the contrary contained herein, the parties recognize that WYZZ is, and at all times shall be, responsible for programming WYZZ-TV and nothing in this Agreement is intended to detract from that responsibility. + + 2. Payment to WYZZ-TV. Notwithstanding anything herein to the contrary, WYZZ shall continue to be the owner of and shall be entitled to all revenues resulting from the sale of advertising and other time on WYZZ-TV before, during and/or after the Term; provided, however, in consideration of the Services, Nexstar shall be entitled to all revenues resulting from the sale of advertising and other time on the Stations during the Term remaining after the payment of the amounts set forth below: + + (a) Within seventy-five (75) days following the end of each month of a calendar year during the Term that "BCF" (as defined below) for such month, when combined with BCF for all prior months during such calendar year (other than any month which is outside the Term) is less than the Minimum BCF, Nexstar shall pay a fee to WYZZ in an amount equal to thirty-five percent (35%) of BCF for such month. Within seventy-five (75) days following the end of each month of a calendar year during the Term that BCF for such month, when combined with BCF for all prior months of such calendar year (other than any month which is outside the Term) is greater than the Minimum BCF, Nexstar shall pay a fee to WYZZ in an amount equal to 50% of BCF for such month; provided, in the first month of each calendar year in which this sentence applies, the fee with respect to the portion of BCF for such month which, when combined with BCF for all prior months during such year (other than any month which is outside the Term) is exactly equal to the Minimum BCF, shall equal thirty-five percent (35%) of such portion rather than fifty percent (50%). The amount payable pursuant to either of the prior two sentences (sometimes referred to as the "Section 2(a) Amount") shall be reduced by the sum of (A) 100% of any costs incurred by Nexstar during the applicable month in maintaining, replacing or purchasing capital equipment which is owned by WYZZ or which is used solely in connection with the operation of WYZZ-TV, which costs have not otherwise been deducted in calculating BCF, plus (B) 50% of the cost incurred by Nexstar during the applicable month in maintaining, replacing or purchasing capital equipment which is not owned by WYZZ and which is used in connection with the combined operation of both Stations ("Combined Capital Equipment)", which costs have not otherwise been deducted in calculating BCF. The Minimum BCF shall be Three Million Seven Hundred Thousand Dollars ($3,700,000) for calendar year 2002 and shall be increased on January 1, 2003 and on each January 1 thereafter in an amount equal to the percentage increase in the Consumer Price Index (published by the U.S. Department of Labor, Bureau of Labor Statistics, Philadelphia Regional Office - All Urban Consumers for the United States - All Items) (the "PI") over the prior year. During the Term, Nexstar shall calculate BCF (the "BCF Report") for each calendar month. The last day of each calendar month is referred to herein as an "End Date". During the Term, Nexstar shall, within thirty (30) days of each End Date deliver to WYZZ-TV the BCF Report for the month ending on such End Date. Within ninety (90) days following each + + 3 + +calendar year during the Term, Nexstar shall notify WYZZ of the BCF for such year (the "Final BCF Report") and, subject to clause (h) of this Section 2, within thirty (30) days after such notification either Nexstar shall make a payment to WYZZ or WYZZ shall make a payment to Nexstar, as appropriate to "true-up" the payments made hereunder based on (i) the final determination of the BCF for the entire year, and (ii) the principle that the aggregate Section 2(a) Amount for the calendar year should be equal to (x) thirty-five percent (35%) of BCF for such calendar year up to the Minimum BCF for such year, plus (y) fifty percent (50%) of BCF for such calendar year in excess of the Minimum BCF for such year, minus (z) the sum of one hundred percent (100%) of any costs incurred by Nexstar during such calendar year in maintaining, replacing or purchasing capital equipment which is owned by WYZZ or which is used solely in connection with the operation of WYZZ-TV, and fifty percent (50%) of any costs incurred by Nexstar during such calendar year in maintaining, replacing or purchasing capital equipment which is not owned by WYZZ and which is used in connection with the combined operation of both Stations (in each case to the extent such costs were not otherwise deducted in the calculation of BCF). Furthermore, for the purposes of clarification, to the extent the Section 2(a) Amount for the calendar year is less than zero, the "true-up" shall be done such that WYZZ shall have paid to Nexstar the amount by which the Section 2(a) Amount is less than zero. Notwithstanding anything to the contrary contained herein for purposes of the period commencing December 1, 2001 and ending December 31, 2001, the Minimum BCF shall be One Dollar ($1.00). + + (b) In addition to the payment of the Section 2(a) Amount, Nexstar agrees to pay WYZZ, within 30 days following each calendar month of the Term, the amount set forth on Exhibit B hereto with respect to such calendar month + + (c) On or before the 5th day of each calendar month during the Term, Nexstar shall pay to WYZZ the fair market value rent (as set forth on Exhibit C hereto) of any real property owned by WYZZ (or any affiliate thereof) and used by the Stations; provided, no rent shall be due to WYZZ, Nexstar or any affiliate thereof with respect to any period where the Stations are using corresponding real property owned by Nexstar (or any affiliate thereof). By way of example, no rent shall be due to WYZZ or Nexstar under this clause (c) for use by one of the Stations of a broadcast tower owned by WYZZ if the other Station is using a tower owned by Nexstar. + + (d) For purposes of this Agreement, the term "BCF" is defined as Net + + + + + +Income of the Stations, determined on a basis in accordance with GAAP, plus the sum of (X) (in each case to the extent deducted in calculating Net Income) (i) depreciation expense (ii) amortization expense (including amortization of program assets and amortization of deferred and stock based compensation) (iii) interest expense (iv) corporate overhead or management fees (v) income tax expense (vi) non-cash losses or expenses (including losses on disposals of assets and trade/barter expenses) (vii) Section 2(a) Amount expenses pursuant to Section 2(a) hereof (viii) any expenses (other than + + 4 + +electric costs relating to the digital transmission of either Station's primary commercial broadcast signal) related to either Station's "DTV Spectrum" (ix) costs or expenses arising from any claims relating to the period prior to the Effective Date, and (x) any expenses or costs identified on Exhibit D hereto less the sum of (Y) (i) cash payments for program contract rights relating to the Stations (ii) payments made by Nexstar to WYZZ pursuant to clause (b) of this Section 2, to the extent not otherwise taken into account in calculating Net Income, (iii) the aggregate fair market value rent (as set forth on Exhibit C hereto) of any real property owned by either Nexstar or WYZZ (or any affiliate of either) and used by the Stations to the extent the Stations are not using corresponding real property owned by each of the parties hereto (or any affiliate thereof) and which is not otherwise taken into account in calculating Net Income, (iv) any other rental income earned by either WYZZ or Nexstar from real property owned or leased thereby to the extent included in calculating Net Income (v) interest income to the extent included in calculating Net Income (vi) any rent paid with respect to any capital leases of the Stations (vii ) any revenues related to either Station's "DTV Spectrum" and (viii) any non-cash gains or revenues (including gains on disposals of assets and trade/barter revenue). + + (e) At all times during the Term and for six (6) months following the termination of this Agreement, WYZZ shall have the right, upon prior written request to Nexstar, to review all of the books and records of Nexstar relating to the BCF Report and the Distributions. Any such review must take place during normal business hours between Monday through Friday. + + (f) The parties agree that, to the extent permitted by law and by the rules, regulations and policies of the FCC, the Stations shall be operated in a manner consistent with industry standards for commercial broadcast television stations providing general entertainment programming and with a view toward maximizing the combined broadcast cash flow of the Stations. + + (g) Notwithstanding anything herein to the contrary, if, with respect to any month, the Section 2(a) Amount is a negative amount, then WYZZ shall pay such negative amount to Nexstar within seventy-five (75) days following the end of such month (and Nexstar shall make no payment of a Section 2(a) Amount to WYZZ with respect to such month); provided, with respect to each of the first three (3) months of the Term, the amount if any, payable pursuant to this clause (g) shall be reduced (but not below zero) by the amount of accounts receivable retained by Buyer during such month pursuant to the first proviso to the last sentence of Section 10(d)(i). + + (h) On or prior to the 30th day after WYZZ's receipt of the Final BCF Report, WYZZ may give Nexstar a written notice (an "Objection Notice") indicating its objections to the Final BCF Report. If WYZZ does not give Nexstar an Objection Notice within such 30-day period, then the Final BCF Report will be conclusive and binding upon the parties hereto. If WYZZ gives a timely Objection Notice, then Nexstar and + + 5 + +WYZZ will negotiate in good faith to resolve their disputes regarding the Final BCF Report. If Nexstar and WYZZ are unable to resolve all disputes regarding the Final BCF Report on or prior to the 30th day after the Objection Notice is given, then Nexstar and WYZZ will retain a "big five" accounting firm (either by mutual agreement or by random choice after eliminating any such firm which is conflicted or otherwise unable to participate) (the "Independent Accounting Firm") to resolve the dispute as soon as practicable, and in any event within thirty (30) days. The BCF for the applicable year as determined by the Independent Accounting Firm will be conclusive and binding upon the parties hereto and will constitute the BCF for such year for all purposes of this Section 2; provided, the parties will use reasonable efforts to limit the scope of the Independent Accounting Firm's review. The fees and expenses of the Independent Accounting Firm in connection with its review of the Final BCF Report shall be paid one-half by Nexstar and one-half by WYZZ. + + (i) Notwithstanding anything to the contrary contained herein, cash payments for program content rights relating to the Stations which were contractually due prior to the Effective Date shall for all purposes be treated as relating to the period following the Effective Date if, and only if, such payments were ninety days or less past due as of the Effective Date. + + 3. Material Considerations. Except to the extent inconsistent with law or the rules and regulations of any governmental agency, during the Term, each of the following considerations and undertakings (the "Material Considerations") by Nexstar shall require the prior consent of, and prior consultation with, WYZZ: + + a. the setting of annual budgets (the "Annual Budgets") for the operation of the Stations (as more specifically addressed in Section 11 hereof); + + + + + + b. determining the necessity for, and amount of, any single capital expenditure for either of the Stations to the extent not provided for in the applicable Annual Budget; provided, WYZZ's consent shall not be required for Nexstar to make unbudgeted capital expenditures in any calendar year which is necessary to maintain or restore the normal operations and transmission of the Station and which in the aggregate are not in excess of Fifty Thousand Dollars ($50,000) + + c. the hiring and firing of key employees of the Stations, consisting of general sales managers, national sales managers, and local sales managers (collectively, the "Key Employees"); provided, WYZZ's consent shall not be required for Nexstar to fire any Key Employee if circumstances exist which would give WYZZ the right to withhold its consent to the retention of such Key Employee under clause (e) of this Section 3; provided further, WYZZ must be reasonable in determining whether or not to consent to the hiring of any Key Employee to replace a former Key Employee who was not retained + + 6 + +as a result of WYZZ's failure to consent to the retention of such former Key Employee pursuant to clause (e) of this Section 3; + + d. the retention of any outside consultants not provided for in the applicable Annual Budget; + + e. the retention of any Key Employee if (i) the combined share of market revenue (excluding political) for both Stations in any fiscal quarter (the "First Quarter") is ten percent (10%) or more below the combined share of market revenue (excluding political) for both Stations in the immediately preceding fiscal quarter (the "Baseline Quarter") and (ii) the combined share of market revenue (excluding political) for both Stations in either (x) the fiscal quarter immediately succeeding the First Quarter or (y) each of any two or more fiscal quarters out of the five fiscal quarters immediately succeeding the First Quarter, is ten percent (10%) or more below the combined share of market revenue for both Stations in the Baseline Quarter; provided, that Nexstar shall only be required to obtain a consent with respect to a Key Employee who WYZZ has requested be terminated); and; provided further, that WYZZ shall not be permitted to exercise its rights under this clause (e) more than once in any eighteen (18) month period with respect to any particular Key Employee position; + + f. any material alteration or modification in or to the broadcast signal or the transmission of either of the Stations. + + 7 + + 4. Expenses and Capital Expenditures. + + Each Party shall make a payment to the other with respect to certain mutually agreed upon expenses and capital expenditures incurred (or to be incurred) as a result of the relationship created by this Agreement, such payments to be made promptly following the incurrence of any expenses and/or expenditures. Such expenses and capital expenditures, which are intended to be shared equally by WYZZ and Nexstar, may include, but shall not be limited to: lease termination fees, employee severance costs, and transmitter and studio facility modifications, and equipment costs. The maximum amount of, and purpose for, such expenses are specifically set forth and identified on Exhibit D hereto. + + 5. Term. The term of this Agreement (the "Term") shall commence on December 1, 2001, which date shall be deemed the effective date of this Agreement (the "Effective Date"). Unless earlier terminated in accordance with the terms hereof, the term of this Agreement shall end on the seventh anniversary of the date hereof. + + 6. Stations Operations. + + a. WYZZ-TV Operations. + + (i) During the Term, notwithstanding the Services rendered by Nexstar, WYZZ shall retain exclusive authority, power and control over WYZZ-TV's programming, personnel, and finances. + + (ii) During the Term and subject to any change in applicable law, WYZZ shall employ at WYZZ-TV's main studio location at least two full-time employees, including a station manager and a staff level employee, who will report and be accountable to WYZZ. The names of employees anticipated to fulfill these functions at the commencement of the Term are set forth on Exhibit E hereto. + + (iii) During the Term, WYZZ shall retain responsibility for the selection, development, acquisition, and broadcast of any and all programming to be broadcast over WYZZ-TV, as well as the payment therefor. To that end, WYZZ shall (A) have exclusive authority for the negotiation, preparation, execution and implementation of any and all programming agreements for WYZZ-TV, and (B) hire or utilize whatever employees WYZZ deems appropriate or necessary to fulfill those programming functions. Nexstar shall have no involvement in the determination of such programming decisions and activities (except to the extent of providing commercial matter to be broadcast over WYZZ-TV and such other administrative support functions described in this Agreement). + + + + + + 8 + + (iv) When at WYZZ's premises, any employees of Nexstar shall be subject to the supervision of WYZZ's management personnel. + + b. WYZZ's Responsibilities. + + (i) WYZZ Authority. During the Term, WYZZ shall take all necessary actions to maintain and preserve WYZZ-TV's FCC authorizations. By way of example and not limitation, WYZZ shall be responsible for WYZZ-TV's compliance with all applicable provisions of the Communications Act of 1934, as amended (the "Act"), the rules, regulations and policies of the FCC and all other applicable laws. Nexstar shall cooperate with WYZZ in taking such actions as WYZZ may reasonably request to assist WYZZ in maintaining WYZZ-TV's compliance with the Act, the rules, regulations and policies of the FCC, and all other applicable laws. Notwithstanding any other provision of this Agreement, Nexstar recognizes that WYZZ has certain obligations to operate WYZZ-TV in the public interest and to broadcast programming to meet the needs and interests of WYZZ-TV's community of license and service area. Nothing in this Agreement shall abrogate or limit the unrestricted responsibility of WYZZ to discharge its obligations to the public and to comply with the Act and the rules, regulations and policies of the FCC, and WYZZ shall have no liability or obligation to Nexstar for taking any action that WYZZ deems necessary or appropriate to discharge such obligations or comply with such laws, rules, regulations or policies. + + (ii) Provision of Advertising Information. Nexstar shall, upon request by WYZZ, promptly provide WYZZ with such information concerning advertising as is necessary to assist WYZZ in the fulfillment of WYZZ's obligations under the Act or FCC's rules, regulations and policies or to enable WYZZ to verify independently WYZZ-TV's compliance with any and all laws, rules, regulations or policies applicable to WYZZ-TV's operations. + + (iii) Suitability of Commercial Matter. All advertising spots and promotional material or announcements produced by Nexstar and utilized at WYZZ-TV shall comply with all applicable federal, state and local regulations and policies and shall be produced in accordance with quality standards established by Nexstar. If WYZZ determines that commercial announcement or promotional material supplied by Nexstar to WYZZ-TV is for any reason, in the exercise of WYZZ's sole discretion, unsatisfactory or unsuitable or contrary to the public interest, WYZZ may, upon written notice to Nexstar, suspend or cancel such commercial announcement or promotional material or delete any material contained in such commercial matter or promotional materials, and if WYZZ requests,&bbsp;Nexstar shall promptly provide suitable substitute commercial announcements or other announcements or promotional materials. + + (iv) Political Advertising. WYZZ shall oversee and shall take ultimate responsibility for WYZZ-TV's compliance with the political broadcasting rules of the + + 9 + +FCC and Sections 312 and 315 of the Act, or any similar provision which may be enacted during the term hereof imposing a duty upon broadcast station WYZZ with respect to broadcast of political advertising, including but not limited to the provision of equal opportunities, compliance with lowest unit charge requirements, and the provision of reasonable access to federal political candidates. Nexstar shall cooperate and consult with WYZZ, at Nexstar's expense, to assist WYZZ in complying with the Act and the political broadcasting rules of the FCC. Nexstar shall supply such information promptly to WYZZ as WYZZ reasonably deems necessary or useful to comply with the lowest unit charge and other applicable political broadcast requirements of federal law. To the extent that WYZZ deems it necessary or appropriate, Nexstar shall release advertising availabilities to WYZZ to permit WYZZ to comply with the political broadcasting rules of the FCC and Sections 312 and 315 of the Act, or any similar provision which may be enacted during the term hereof imposing a duty upon broadcast station licensees with regard to the broadcast of political advertising or programming. + + 7. Representations and Warranties of the Parties. + + Each Party agrees to give to the other the representations and warranties as set forth on Exhibit F to this Agreement. + + 8. WYZZ Covenants. + + WYZZ covenants that after the Effective Date and at all times during the Term: + + a. Licenses, Permits, and Authorizations. WYZZ shall hold and maintain all licenses and other permits and authorizations necessary for the operation of WYZZ-TV, including, but not limited to WYZZ-TV's FCC authorizations and licenses, and such licenses, permits, and authorizations are and will be in full force and effect throughout the Term. + + b. Actions. Except as otherwise permitted by this Agreement, WYZZ shall not take any action or omit to take any action which would have a material adverse effect upon either of the Parties, their assets, their respective Stations, or upon either Party's ability to perform this Agreement. + + + + + + c. Reports. WYZZ shall file all reports and applications required to be filed by WYZZ with the FCC or any other governmental body in a timely and complete manner. + + d. Facilities. The facilities of WYZZ-TV will be maintained in accordance with good engineering practice and will comply in all material respects with the engineering requirements set forth in the FCC authorizations, permits, and licenses for WYZZ-TV, and WYZZ will insure that WYZZ-TV broadcast a high quality signal to its service area + + 10 + +(except at such time of reduction of power as required for routine or emergency maintenance). + + e. Title. WYZZ shall maintain good and marketable title to all of the assets and properties used and useful prior to the date hereof (together with replacements, thereof) in the operation of WYZZ-TV. + + f. Insurance. WYZZ shall maintain replacement cost casualty and liability insurance and property insurance on all of its assets and properties used and useful in the operation of WYZZ-TV, general liability insurance and workers compensation insurance in such amounts and on such terms and conditions that are ordinary and customary in the broadcast industry and that are reasonably acceptable to Nexstar. + + g. FCC License Holder. WYZZ shall remain as the holder of the FCC licenses necessary for the operation of WYZZ-TV. + + h. WYZZ-TV Operation. WYZZ shall use all reasonable efforts to operate WYZZ-TV at its maximum authorized power, with its antenna center of radiation at its full authorized height above ground and above average terrain. + + i. Proprietary Information. WYZZ shall not disclose any sales or other proprietary information of Nexstar to any third party. + + j. Annual Budget. WYZZ shall cause the management of WYZZ-TV to meet with Nexstar's management on at least a monthly basis (or at such longer intervals as WYZZ may elect) to review the performance of the Stations and to discuss any necessary modifications to the Stations' annual budget as may become necessary due to changing market conditions or otherwise. + + k. Employees. Except as provided otherwise in this Agreement, WYZZ shall pay, discharge, and be responsible for (i) all salary and wages arising out of or relating to the employment of the employees of WYZZ-TV prior to and after the Effective Date, and (ii) any employee benefits arising under the benefit plans of WYZZ during the period prior to and after the Effective Date. + + 9. Nexstar Covenants. + + Nexstar covenants that after the Effective Date and at all times during the Term: + + a. Licenses, Permits, and Authorizations. Nexstar shall hold and maintain all licenses and other permits and authorizations necessary for the operation of WMBD-TV, including, but not limited to WMBD-TV's FCC authorizations and licenses, and + + 11 + +such licenses, permits, and authorizations are and will be in full force and effect throughout the Term. + + b. Actions. Except as otherwise permitted by this Agreement, Nexstar shall not take any action or omit to take any action which would have a material adverse effect upon either of the Parties, their assets, their respective Stations, or upon either Party's ability to perform this Agreement. + + c. Reports. Nexstar shall file all reports and applications required to be filed by Nexstar with the FCC or any other governmental body in a timely and complete manner. + + d. Facilities. The facilities of WMBD-TV will be maintained in accordance with good engineering practice and will comply in all material respects with the engineering requirements set forth in the FCC authorizations, permits, and licenses for WMBD-TV, and Nexstar will insure that WMBD-TV broadcasts a high quality signal to its service area (except at such time of reduction of power as required for routine or emergency maintenance). + + e. Title. Nexstar shall maintain good and marketable title to all of the assets and properties used and useful (together with replacement, thereof) in the operation of WMBD-TV. + + f. Insurance. Nexstar shall maintain replacement cost casualty and liability insurance and property insurance on all of its assets and properties used and useful in the operation of WMBD-TV, general liability insurance, workers compensation insurance, and broadcast liability insurance, all in such amounts and on such terms and conditions that are ordinary and customary in the broadcast industry and that are reasonably acceptable to WYZZ. + + + + + + g. FCC License Holder. Nexstar shall remain as the holder of the FCC licenses necessary for the operation of WMBD-TV. + + h. WMBD-TV Operation. Nexstar shall use all reasonable efforts to operate WMBD-TV at its maximum authorized power, with its antenna centers of radiation at its full authorized height above ground and above average terrain. + + i. Proprietary Information. Nexstar shall not disclose any sales or other proprietary information of WYZZ to any third party. + + j. Annual Budget. Nexstar shall provide monthly financial projections and copies of quarterly market revenue reports to WYZZ and shall cause the management of WMBD-TV to meet with WYZZ's management on at least a monthly basis (or such longer intervals as WYZZ may elect) to review the performance of the Stations and to + + 12 + +discuss any necessary modifications to the Stations' annual budget as may become necessary due to changing market conditions or otherwise. + + k. Employees. Except as provided otherwise in this Agreement, Nexstar shall pay, discharge, and be responsible for (i) all salary and wages arising out of or relating to the employment of the employees of&sbsp;WMBD-TV prior to and after the Effective Date, and (ii) any employee benefits arising under the benefit plans of Nexstar during the period prior to and after the Effective Date. + + 10. Additional Covenants + + a. Prior Contract Commitments. Schedule 10.a. contains a list and amount of all non-programming contractual commitments made by WYZZ prior to the Effective Time (other than cash commitments for commercial advertising time), but which are continuing obligations of WYZZ during the Term. In providing the Services, Nexstar shall honor all such commitments, as well as commitments for commercial advertising time to be aired on WYZZ-TV during the Term (for cash or trade) (collectively "WYZZ Contracts"); provided, Nexstar shall not honor any trade liabilities of either Station to the extent the aggregate trade liabilities of such Station as of the Effective Time exceeds by more than Twenty-Five Thousand Dollars ($25,000) the trade receivables of such Station as of the Effective Time. + + b. Sale Forces. In providing the Services, except upon notice to, and after consultation with WYZZ, Nexstar shall, at all times, maintain two separate sales forces (one for each of the Stations), each of which shall include account executives and sales managers, to sell national, regional, and local spot announcements and long form advertising programs. + + c. Employees. + + (i) Upon the earlier of (A) the date on which the operation of the Stations are consolidated in a single location and (B) January 1, 2002 (such earlier date sometimes referred to as the "Hire Date"), Nexstar shall offer employment to those employees of WYZZ-TV listed on Exhibit G hereto, at a comparable salary, position, and place of employment as held by each such employee immediately prior to the Effective Date (such employees who are given and accept such offers of employment are referred to herein as the "Transferred Employees"). + + (ii) Nexstar shall cause all Transferred Employees as of the Hire Date to be eligible to participate in any "employee welfare benefit plans" and "employee pension benefit plans" (as defined in Section 3(1) and 3(2) of ERISA, respectively) of Nexstar in which similarly situated employees of Nexstar are generally eligible to participate; provided, however, that, subject to length of service requirement waiting periods, vesting + + 13 + +periods or similar requirements, all Transferred Employees and their spouses and dependents shall be eligible for coverage immediately after the Hire Date (and shall not be excluded from coverage on account of any preexisting condition) to the extent provided under such Plans with respect to the Transferred Employees. + + (iii) For purposes of any length of service requirements, waiting periods, vesting periods, or differential benefits based on length of service in any such plan for which a Transferred Employee may be eligible after the Hire Date, Nexstar shall insure that, to the extent permitted by law, service by such Transferred Employee with WYZZ shall be deemed to have been service with Nexstar. In addition, Nexstar shall insure that each Transferred Employee receives credit under any welfare benefit plan of Nexstar for any deductibles or co-payments paid by such Transferred Employee and his/her dependents for the current plan year under a plan maintained by WYZZ. Nexstar shall grant credit to each Transferred Employee for all sick leave in accordance with the policies of Nexstar applicable generally to its employees after giving effective service for WYZZ as service for Nexstar. + + (iv) From and after the Hire Date, Nexstar shall pay, discharge, and be responsible for all salary, wages, and benefits arising out of or relating to the employment of the Transferred Employees by Nexstar on and after the Hire Date. + + + + + + (d) Accounts Receivable. + + (i) As soon as practicable after the Effective Date hereof, WYZZ shall deliver to Nexstar a complete and detailed list of all the rights of WYZZ as of the Effective Date hereof to payment for the sale of advertising time and other goods and services by WYZZ-TV prior to the Effective Date hereof (the "Accounts Receivable"). During the one hundred eighty (180) day period following the Effective Date (the "Collection Period"), Nexstar shall use commercially reasonable efforts to collect the Accounts Receivable in the usual and ordinary course of business, using Nexstar's credit, sales and other appropriate personnel in accordance with customary practices, which are not required to include referral to a collection agency. Notwithstanding the foregoing, Nexstar shall not be required to institute legal proceedings on WYZZ's behalf to enforce the collection of any Accounts Receivable. Nexstar shall not adjust any Accounts Receivable or grant credit with respect thereto without WYZZ's written consent, and Nexstar shall not pledge, secure or otherwise encumber such Accounts Receivable or the proceeds therefrom. Within twenty (20) days following the end of each full calendar month during the Collection Period, Nexstar shall furnish WYZZ with a report of all amounts collected, together with its check for payment thereof, with respect to the Accounts Receivable during such month; provided, that Nexstar shall be entitled to retain the first Three Hundred Ten Thousand Dollars ($310,000) (the "Working Capital Amount") of amounts collected on the Accounts Receivable for the purpose of funding WYZZ-TV's share of the initial working capital needs of the Stations; provided further, + + 14 + +that not later than the ninetieth (90th) day following the Effective Date, Nexstar shall pay to WYZZ the excess of the aggregate amount retained pursuant to the immediately preceding proviso over the aggregate reduction in payments otherwise due with respect to the first three months of the Term from WYZZ as a result of the proviso to Section 2(g) hereof. + + (ii) Any payments received by Nexstar during the Collection Period from any Person that is an account debtor with respect to any account disclosed in the list of Accounts Receivable delivered by WYZZ to Nexstar shall be applied (A) first against the invoice, if any, as specified by the account debtor and (B) second against an account disclosed in such list, unless and to the extent that the account is disputed by the account debtor; provided, with respect to clause (B) above, payments on any accounts specified on WYZZ's list which relate to account debtors with respect to which Nexstar also has accounts, shall be applied first against the oldest accounts of WYZZ and Nexstar. Except to the extent resulting from Nexstar's willful breach of the terms of this Section 10(d), Nexstar shall incur no liability to WYZZ for any uncollected account. During the Collection Period, neither WYZZ nor any other agent of WYZZ shall make any direct solicitation without Nexstar's written consent of the account debtors for payment. + + e. Proration. For purposes of this Agreement, revenues, expenses, and liabilities attributable to the Stations, including power and utilities charges, ad valorem property taxes, rents, income and sales taxes, and similar accruing, prepaid and deferred items, will be allocated in accordance with the principles that, as applicable pursuant to the terms of this Agreement, (A) Nexstar and WYZZ will be allocated revenues earned or accrued, and expenses, costs and liabilities incurred in or allocable, with respect to the business and operation of the such entity's Station through but not including the Effective Date and following the last day of the Term, and (B) revenues earned or accrued, and expenses, costs and liabilities incurred in or allocable, with respect to the business and operation of the Stations on and after the Effective Date through the last day of the Term shall be allocated to the operation of the Stations under this Agreement and the calculation of BCF; provided, film costs relating to the period prior to the Effective Date shall be allocated to the period after the Effective Date to the extent such obligations were less than 90 days past due as of the Effective Date. + + f. Payment of Liabilities and Obligations. Except to the extent provided to the contrary herein, as of the Effective Date and during the Term Nexstar shall undertake to pay, discharge and perform on WYZZ's behalf all obligations and liabilities of WYZZ under the WYZZ Contracts to the extent that the obligations and liabilities relate to the time after the Effective Date with respect to WYZZ-TV, as well as WYZZ's obligation to any Transferred Employees for vacation time. Nexstar shall not be required to pay, discharge or perform any other obligations or liabilities of WYZZ including (i) any obligations or liabilities under the WYZZ Contracts relating to the period prior to the Effective Date for WYZZ-TV, (ii) any claims (whether asserted or not) or pending + + 15 + +litigation or proceedings relating to the operation of WYZZ-TV prior to the Effective Date, (iii) any obligations or liabilities of WYZZ under any management incentive, employee pension, retirement, or other benefit plans, (iv) any obligations or liabilities of WYZZ under any collective bargaining agreements, (v) any obligation to any employee of WYZZ-TV for severance benefits or sick leave accrued prior to the Effective Date, (vi) any credit agreements, note purchase agreements, indentures, capital leases, or other financing arrangements, (vii) any agreements entered into other than in the ordinary course of business of WYZZ-TV, or (viii) any obligations or liabilities caused by, arising out of, or resulting from any action or omission of WYZZ prior to the Closing, and all such obligations and liabilities shall continue to be paid, discharged and performed by WYZZ. Notwithstanding anything herein to the + + + + + +contrary, Nexstar shall be responsible pursuant to its reimbursement obligation hereunder for all film payments for programming which airs on WYZZ-TV to the extent such payments are not more than 90 days past due as of the Effective Date. + + g. Consultation on Material Contractual Obligations. In addition to the other restrictions contained herein, Nexstar shall not enter into any material contractual obligation with respect to WYZZ-TV without first consulting with WYZZ to determine whether or not WYZZ (or its affiliates) is able to obtain more favorable terms with respect to the subject matter of such contract. + + 11. Mutual Covenants. + + a. Budget. + + (i) Not later than November 30 of each calendar year during the Term of this Agreement, WYZZ and Nexstar shall agree upon (1) an Operating Budget for the Stations (each an "Annual Operating Budget") setting forth in reasonable detail the reasonable and necessary costs and expenses that Nexstar is expected to incur in performing its obligations hereunder during the upcoming calendar year, including, without limitation, the costs of all Nexstar personnel (including salaries, incentives, commissions, bonuses, benefits, and payroll services), property, equipment (including repairs and maintenance, office space, office space modifications, utilities, sales, marketing costs, and related costs, and (2) a revenue budget for the Stations (the "Annual Revenue Budget" and, together with the Annual Operating Budget, the "Annual Budget") setting forth the projected sales revenues with respect to advertisements for the upcoming calendar year, as well as the assumptions underlying those projections; provided, in no event shall Nexstar have any right to object to the inclusion in the Annual Operating Budget of the cost of any programming which WYZZ determines is to be broadcast on WYZZ-TV, and in no event shall WYZZ have any right to object to the inclusion in the Annual Operating Budget of any programming which Nexstar determines is to be broadcast on WMBD-TV. Without limiting the generality of the foregoing, a part of the above-referenced budget approval process shall be the inclusion of proposed + + 16 + +commissions or other incentive plans applicable to the sale of advertisements, which plans shall be subject to each Party's approval, as part of their approval of the Annual Operating Budget. The Annual Budget for the one month period beginning December 1, 2001 and Year 2002_ (the "Initial Budget"), is attached hereto as Exhibit H. + + (ii) For each year during the Term of this Agreement, the Parties shall cooperate in good faith and use their respective reasonable efforts to agree upon such changes, if any, to the Annual Budget for such year as are reasonably required to accurately reflect actual revenues generated and actual costs incurred during the six (6) month period ending June 30th. Each such revised Annual Budget, if required, shall be completed no later than October 31, of each year during the Term hereof. + + (iii) In the event that the Parties are unable to resolve any disputes regarding any Annual Budget by December 15 of each year during the Term hereof, and either Party has notified the other in writing of the basis for its inability to agree on such Annual Budgets, then, subject to the proviso to the first sentence of clause (i) of this Section 11(a), the disputed items in the Annual Budget for the next succeeding year shall be the same as such disputed items were in the Annual Budget for the immediately preceding year, except for costs (e.g., sales commissions) that vary as a result of revenue. + + b. Employees. Exhibit I contains a preliminary list of all employees, by position held by each, who are to be terminated from each of the Stations on such date as is mutually agreed by the parties on or after the Effective Time, but not later than March 1, 2002 (the "Terminated Employees"). All severance liabilities and all COBRA liabilities for any Terminated Employee terminated on or after the Effective Date shall be prorated between the Parties, in accordance with Section 4 hereof and Exhibit D hereto. + + c. Confidentiality. Each of the parties shall during and after the Term continue to be bound by the provisions of the Confidentiality Letter Agreement dated as of July 31, 2001. + + 12. Transmitter Changes. In the event that either of the Parties, at any time, intends to file an application with the FCC to change the transmitter location, antenna height, power, or to change the frequency or hours of operation of its respective Station, the Parties agree to give ten (10) days prior written notice to the other Party of such proposed filing. + + 13. Assignment. Except as otherwise provided by this Agreement or in the event that either Party sells or otherwise transfers its Station to another (in which case such Party shall be required to assign to the Buyer, and such Buyer shall be required to assume, this Agreement, in its entirety), neither Party hereto shall assign its rights or obligations under this Agreement to a third party without the express written consent of the other Party, which consent shall not be unreasonably withheld. + + 17 + + 14. Entire Agreement. This Agreement constitutes the entire agreement + + + + + +between the Parties hereto with respect to the subject matter hereof and supersedes any and all prior agreements, commitments, or any other understandings between WYZZ and the Nexstar with respect to such subject matter. No provision of this Agreement shall be changed or modified, nor shall this Agreement be discharged in whole or in part except by an agreement in writing signed by the Party against whom the change, modification, or discharge is claimed or sought to be enforced, nor shall any waiver of any of the conditions or provisions of this Agreement be effective and binding unless such waiver shall be in writing and signed by the Party against whom the waiver is asserted, and no waiver of any provision of this Agreement shall be deemed to be a waiver of any preceding or succeeding breach of the same or any other provision. + + 15. Counterparts. This Agreement may be signed in any number of counterparts with the same effect as if the signatures to each such counterpart were upon the same instrument. + + 16. Notices. All notices required under this Agreement shall be in writing and shall be deemed given to an addressee when mailed if mailed by prepaid, certified, first class United States mail to the address for notice of such addressee set forth below: + + If to WYZZ: + + Mr. David D. Smith c/o Sinclair Communications, Inc. 10706 Beaver Dam Road Cockeysville, Maryland 21030 + + Copy to: + + General Counsel Sinclair Communications, Inc. 10706 Beaver Dam Road Cockeysville, Maryland 21030 + + If to NEXSTAR: Mr. Perry Sook Nexstar Broadcasting Group 200 Abington Executive Park Suite 201 Clarks Summit, Pennsylvania 18411 + + 18 + + Copies to: John L. Kuehn, Esq. Kirkland & Ellis Citicorp Center, 153 East 53rd Street New York, New York 10022-4675 + + and to: Howard M. Liberman, Esq. Arter & Hadden LLP 1801 K Street, NW Suite 400K Washington, DC 20006-1301 + +Either Party hereto may specify for itself a different address for the giving of notice hereunder by giving ten (10) days prior written notice to the other Party of such address change pursuant to this paragraph. + + 17. Governing Law. This Agreement shall be governed and construed in accordance with the laws of Maryland, without regard to its choice of law rules. + + 18. No Partnership or Joint Venture. This Agreement is not intended to be and shall not be construed as a partnership or joint venture agreement between the Parties. Except as otherwise specifically provided in this Agreement with regard to the services to be provided by Nexstar to WYZZ-TV, no Party to this Agreement shall be authorized to act as agent of or otherwise represent any other Party to this Agreement. + + 19. Cooperation. The Parties shall use their best efforts in the performance and fulfillment of the terms and conditions of this Agreement in effectuating the intent of such Parties as expressed under this Agreement. From time to time, without further consideration, the Parties shall execute and deliver such other documents and take such other actions as either Party hereto reasonably may request to effectuate such intent. + + 20. Arbitration. The Parties shall attempt in good faith to resolve all claims, disputes, and other disagreements arising out of or related to this Agreement. In the event that a dispute between the Parties cannot be resolved within thirty (30) days of written notice from one Party to the other Party, such dispute shall, at the request of either Party, after providing written notice to the other Party, be determined and settled by arbitration in Baltimore, Maryland, in accordance with the Commercial Rules of the American Arbitration Association then in effect, the Federal Arbitration Act, 9 U.S.C. 1 et seq., and the Maryland Uniform Arbitration Act, and judgment upon the award rendered by the arbitrator shall be entered in any court of competent jurisdiction. The notice of arbitration shall specifically describe the claims, disputes, or other matters in issue to be submitted to arbitration. The Parties shall jointly select a single arbitrator who shall have the authority to hold hearings and to render a decision in accordance with the + + + + + + 19 + +Arbitration Rules of the American Arbitration Association. If the Parties are unable to agree within ten (10) days, the arbitrator shall be selected by the Chief Judge of the Circuit Court for Baltimore City. The written decision of the arbitrator so appointed shall be conclusive and binding on the Parties and enforceable by a court of competent jurisdiction. The expenses of the arbitration shall be borne by the non-prevailing Party to the arbitration, including, but not limited to, the reasonable cost of experts, evidence, and legal counsel. Whenever the action is required to be taken under this Agreement within a specified period of time and the taking of such action is materially affected by a matter submitted to arbitration, such period shall automatically be extended by the number of days, plus ten (10), that are taken for the determination of that matter by the arbitrator. Notwithstanding the foregoing, the Parties agree to use their best reasonable efforts to minimize the costs and frequency or arbitration hereunder. In addition, both Parties agree to use their best efforts to cause a final decision to be rendered with respect to the matters submitted to arbitration within sixty (60) days after its submission. + + 21. Severability. It is the intent of the Parties that the transactions contemplated hereunder comply in all respects to applicable law, including, but not limited to, the Communications Act of 1934, and all applicable rules, regulations, and policies of the FCC. If any provision of this Agreement shall become void, illegal, or invalid because of a decision or other action by any governmental or judicial authority with jurisdiction thereof, the remainder of this Agreement shall remain in full force and effect without such offending provision so long as such remainder substantially reflects in all material respects the original agreement of the Parties. In such event, the Parties shall use commercially reasonable efforts to reach agreement promptly on lawful substitute provisions in place of said offending provision to effectuate as nearly as possible their intent as expressed by this Agreement. + + 22. Digital Spectrum. The FCC has authorized an additional 6 MHz of spectrum for digital television service ("DTV Spectrum") to Nexstar for WMBD-TV and to WYZZ for WYZZ-TV. Except to the extent necessary to comply with law and the rules and regulations of the FCC with regard to the digital broadcast of the Stations' commercial broadcast schedules, each of the Parties shall retain all rights to utilize its DTV Spectrum in accordance with the rules and regulations of the FCC and shall bear all costs in connection with such use including, without limitation, any costs of equipment necessary for digital broadcasting. + + 23. Further Assurances. WYZZ and Nexstar shall use commercially reasonable efforts in the performance and fulfillment of the terms and conditions of this Agreement in effectuating the intent of such Parties as expressed under this Agreement. From time to time, without further consideration, WYZZ and Nexstar shall execute and deliver such other documents and take such other actions as either Party hereto reasonably may request to effectuate such intent. + + 20 + + 24. Termination. + + a. Termination by Nexstar. This Agreement may be terminated by Nexstar by written notice to WYZZ (i) any time upon six (6) months prior notice, (ii) on six (6) months prior notice following the sale of WYZZ-TV by WYZZ, and/or (iii) if Nexstar is not then in material default or breach hereof, and WYZZ is in material breach of its representations or its material obligations hereunder, and has failed to cure such breach within thirty (30) days of written notice from Nexstar; provided, no notice may be given pursuant to clause (i) of this section prior to the eighteen (18) month anniversary of the Effective Date. + + b. Termination by WYZZ. This Agreement may be terminated by WYZZ by written notice to Nexstar (i) at any time upon six (6) months prior written notice, (ii) on six (6) months prior notice following the sale of WMBD-TV by Nexstar and/or (iii) if WYZZ is not then in material default or breach hereof and if the Nexstar is in material breach of its representations or its material obligations hereunder, and has failed to cure such breach within thirty (30) days of notice from WYZZ; provided, no notice may be given pursuant to clause (i) of this section prior to the eighteen (18) month anniversary of the Effective Date. + + c. Termination due to invalidity or material change. Unless terminated pursuant to another provisions of this Agreement, this Agreement will terminate upon the first to occur of any of the following: + + (i) this Agreement is declared invalid or illegal in whole or substantial part by an order or decree of an administrative agency or court of competent jurisdiction and such order or decree has not been stayed or has become final and no longer subject to further administrative or judicial review; + + (ii) there has been a material change in FCC rules or policies that would cause this Agreement to be in violation thereof, and such change is in effect and not the subject of an appeal or further administrative or judicial review; provided, that in such event the Parties shall first negotiate in good faith and attempt to agree on an amendment to this Agreement that will provide the Parties with a valid, binding and enforceable agreement that conforms to the new FCC rules, policies or precedent; or + + (iii) the mutual, written consent of both Parties. + + d. Nexstar's Additional Termination Rights. Notwithstanding anything + + + + + +herein to the contrary and in addition to Nexstar's termination rights in Section 24.a. above, Nexstar shall have the right to terminate this Agreement upon the event that WYZZ makes a general assignment for the benefit of creditors, files or has filed against it a petition for bankruptcy, reorganization or an arrangement for the benefit of creditors, or + + 21 + +for the appointment of a receiver, trustee or similar creditor's representative for the property or assets of WYZZ under any federal or state insolvency law, which if filed against WYZZ, has not been dismissed within thirty (30) days thereof. + + e. WYZZ's Additional Termination Rights. Notwithstanding anything herein to the contrary and in addition to WYZZ's termination rights in Section 24.b. above, WYZZ shall have the right to terminate this Agreement upon the event that Nexstar makes a general assignment for the benefit of creditors, files or has filed against it a petition for bankruptcy, reorganization or an arrangement for the benefit of creditors, or for the appointment of a receiver, trustee or similar creditors' representative for the property or assets of Nexstar under any federal or state insolvency law, which if filed against Nexstar, has not been dismissed within thirty (30) days thereof. + + f. WYZZ's Rights following Termination. (i) If this Agreement is terminated for any reason, WYZZ may continue to use Nexstar's facility (to the extent of, and consistent with, the use immediately prior to the termination) for a period of six (6) months following the date of actual termination, without regard to any continuation which occurs as a result of the immediately succeeding sentence (the "Continuation Period"). If the Parties elect to continue the Services during the Continuation Period, then the Nexstar shall continue to provide the Services and pay the Section 2(a) Amount in accordance with this Agreement during the Continuation Period. If the Parties, or any one of them, elect(s) to discontinue the provision of Services during the Continuation Period, the WYZZ shall pay to the Nexstar a commercially reasonable rent (on a monthly basis in advance) for the use and occupancy of, or any part of, the Nexstar's facilities. WYZZ shall make all payments due to Nexstar hereunder within ten (10) days following receipt of an invoice from Nexstar for the payment of such rent. (ii) Notwithstanding the termination of this Agreement, any amounts due hereunder with respect to the period prior to the end of the Term shall be paid in accordance with the provisions hereof following the end of the Term. + + g. WYZZ's Right to Hire Certain Employees. Upon final termination of this Agreement, WYZZ shall have the obligation to hire any employee of Nexstar solely providing services to WYZZ-TV, including (without limitation) all of the account executives of Nexstar exclusively selling time on WYZZ-TV. The parties shall negotiate in good faith with respect to any rights of WYZZ to hire any other employees of Nexstar who are providing services to both Stations. For a period of one year from the termination of this Agreement, neither Party hereto (or any of its affiliates) will directly or indirectly solicit to employ or employ any of the employees of the other Party hereto if such employees were employed by either of the Stations at any time during the six month period immediately preceding the termination of this Agreement. + + h. Joint Capital Equipment. Upon the final termination of this&sbsp;Agreement, the parties shall negotiate in good faith regarding which party shall retain any Combined + + 22 + +Capital Equipment purchased during the term hereof for use on both Stations, as well as any payment to be made by the retaining party to the other party after taking into account the allocation among the parties during the term hereof of the cost of acquiring and maintaining such Combined Capital Equipment, as well as the benefit of any depreciation deductions received by Nexstar with respect thereto. + + 25. Indemnification. + + a. by Nexstar. Nexstar shall indemnify and hold harmless WYZZ from and against any and all claims, losses, costs, liabilities, damages, and expenses, including any FCC fines or forfeitures (including reasonable legal fees and other expenses incidental thereto), of every kind, nature and description (collectively "Damages") arising or resulting from or relating to (i) Nexstar's breach of any representation, covenant, agreement or other obligation of Nexstar contained in this Agreement and (ii) any action, which constitutes gross negligence, recklessness or willful misconduct taken by Nexstar or its employees and agents with respect to WYZZ-TV, or any failure by Nexstar or its employees and agents to take any action with respect to WYZZ-TV, including, without limitation, Damages relating to violations of the Act, or any rule, regulation or policy of the FCC, slander, defamation or other claims relating to the sale of advertising time on the Station (except where the Damages are caused by WYZZ's negligence, recklessness, willful misconduct, or breach of its representations or obligations under this Agreement), from and after the Effective Date of this Agreement. + + b. by WYZZ. WYZZ shall indemnify and hold harmless Nexstar from and against any and all Damages arising or resulting from or relating to (i) WYZZ's breach of any representation, covenant, agreement or other obligation of WYZZ contained in this Agreement and (ii) any action taken, which constitutes gross + + + + + +negligence, recklessness or willful misconduct by WYZZ or its employees and agents with respect to WMBD-TV, or any failure by WYZZ or its employees and agents to take any action with respect to WMBD-TV, including, without limitation, Damages relating to violations of the Act, or any rule, regulation or policy of the FCC, slander, defamation or other claims relating to programming provided by WYZZ or WYZZ's broadcast and sale of advertising time on WMBD-TV (except where the Damages were incurred by Nexstar's negligence, recklessness, willful misconduct, or breach of any representation, covenant, agreement or other obligation contained in this Agreement), from and after the Effective Date of this Agreement. + + c. Indemnification Procedure. Neither WYZZ nor Nexstar shall be entitled to indemnification pursuant to this Section unless such claim for indemnification is asserted in a written notice delivered to the other Party, together with a statement as to the factual basis for the claim and the amount of the claim. Together with such notice or promptly following the delivery thereof, the Party making the claim (the "Claimant") shall make available to the other Party (the "Indemnitor") information relied upon by the + + 23 + +Claimant to substantiate the claim. Such notice shall be given promptly following Claimant knowing or having reason to know about such claim; provided, the Indemnitor shall be relieved of a liability for Claimant's failure to provide notice only if, and to the extent, adversely impacted by such failure. The Indemnitor under this Section 26(c) shall have the right to conduct and control through counsel of its own choosing the defense of any third Party claim, action or suit (and the Claimant shall cooperate fully with the Indemnitor), but the Claimant may, at its election, participate in the defense of any such claim, action or suit at its sole cost and expense; provided, that, if the Indemnitor shall fail to defend any such claim, action or suit, then the Claimant may defend through counsel of its own choosing such claim, action or suit, and (so long as it gives the Indemnitor at least fifteen (15) days' notice of the terms of the proposed settlement thereof and permits the Indemnitor to then undertake the defense thereof), Claimant may settle such claim, action or suit, and, if Claimant is entitled to be indemnified by Indemnitor hereunder, Claimant may recover from the Indemnitor the amount of such settlement or of any judgment and the costs and expenses of such defense. The Indemnitor shall not compromise or settle any third Party claim, action or suit without the prior written consent of the Claimant, which consent will not be unreasonably withheld or delayed. + + 26. Damages; Specific Performance. + + a. In the event of a material breach by WYZZ of its obligations hereunder, Nexstar shall be entitled to seek monetary damages against WYZZ. The Parties recognize, however, that, given the unique nature of the Station and this Agreement, monetary damages alone will not be adequate to compensate Nexstar for any injury resulting from WYZZ's breach. Except to the extent such action would not be permitted by the rules and regulations of the FCC, Nexstar shall therefore be entitled, in addition to a right to seek and collect monetary damages, to obtain specific performance of the terms of this Agreement. If any action is brought by Nexstar to enforce this Agreement, WYZZ shall waive the defense that there is an adequate remedy at law. In addition, in the event of a material breach by WYZZ of its obligations hereunder, Nexstar shall be entitled to terminate this Agreement and exercise its rights pursuant to Section 25(b) hereof (except that Nexstar may not assert consequential, special or punitive damages or any claim for lost profits). + + b. In the event of a material breach by Nexstar of its obligations hereunder, WYZZ shall be entitled to seek monetary damages against Nexstar. The Parties recognize, however, that, given the unique nature of the Station and this Agreement, monetary damages alone will not be adequate to compensate WYZZ for any injury resulting from Nexstar's breach. Except to the extent such action would not be permitted by the rules and regulations of the FCC, WYZZ shall therefore be entitled, in addition to a right to seek and collect monetary damages, to obtain specific performance of the terms of this Agreement. If any action is brought by WYZZ to enforce this Agreement, Nexstar + + 24 + +shall waive the defense that there is an adequate remedy at law. In addition, in the event of a material breach by Nexstar of its obligations hereunder, WYZZ shall be entitled to terminate this Agreement and exercise its rights pursuant to Section 25(a) hereof (except that WYZZ may not assert consequential, special or punitive damages or any claim for lost profits). + + c. In the event any Party files a lawsuit or institutes other formal legal action to enforce its rights under this Agreement, the prevailing Party shall be reimbursed by the other Party for all reasonable expenses incurred thereby, including reasonable attorney's fees. + + THIS AGREEMENT CONTAINS THE BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY THE PARTIES. + + [Signatures on Following Page] + + 25 + + + + + + IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first above written. + + NEXSTAR BROADCASTING OF PEORIA, L.L.C. + + By: /s/ Perry A. Sook ------------------------------ Name: Perry A. Sook Title: President/CEO + + WYZZ, INC. + + By: /s/ David Smith ------------------------------ Name: David Smith Title: President + + WYZZ LICENSEE, INC. + + By: /s/ David Smith ------------------------------ Name: David Smith Title: President + + 26 + + EXHIBIT A + + [WYZZ's Facilities and Equipment] + +Schedules, 3L, 4L and 6L are hereby incorporated herein by reference. + + 27 + + EXHIBIT B + + Promptly following each month during the term, Nexstar shall reimburse WYZZ for salaries for WYZZ's employees, costs of WYZZ-TV's programming (which were not more than ninety (90) days past due as of the Effective Date) and other direct, reasonable, out-of-pocket expenses (including electric costs related to the digital transmission of WYZZ's primary commercial broadcast signal, but excluding all other expenses relating to WYZZ-TV's DTV Spectrum) incurred by WYZZ in the operation of WYZZ-TV, which expenses were incurred in the ordinary course of business consistent with standard industry practice and FCC requirements. + + 28 + + EXHIBIT C + + [Fair Market Rent Determination] + +The parties shall negotiate in good faith in an attempt to reach an agreement on the fair market value rent of any real property owned by either Nexstar or WYZZ (or any affiliate thereof). To the extent the parties are not able to reach such an agreement within fifteen (15) days prior to the time when such rental shall be deducted in computing BCF, the parties shall retain a mutually acceptable real estate appraiser in the Peoria/Bloomington market experienced in determining fair market value rents, who shall determine the rent payment. + + 29 + + EXHIBIT D + + [Start-Up Costs] + +The parties agree that the maximum start-up costs referred to in Section 4 shall not exceed Fifty Thousand Dollars ($50,000), in the case of relocation of a studio transmitter link, Two Hundred Ninety-Two Thousand Dollars ($292,000) in case of master control improvements, Thirty Thousand Dollars ($30,000) in the case of construction and furniture costs, One Hundred Ten Thousand Dollars ($110,000) in the case of a new traffic system, Forty-Five Thousand Dollars ($45,000) in the case of news related equipment, Twenty-Five Thousand Six Hundred Dollars ($25,600) in the case of termination of the lease for WYZZ-TV's Peoria sales office, Nine Thousand Nine Hundred Dollars ($9,900) in the case of termination of the lease for the WMBD-TV's Bloomington Sales Office, One Hundred Five Thousand Dollars ($105,000) in the case of Employee severance and Thirty-Three Thousand Dollars ($33,000) in the case of miscellaneous expenses, including, but not limited to, phone system upgrade costs all as reasonably determined by Nexstar. + + + + + + 30 + + EXHIBIT E + + [Licensee Employees] + +William Killian Lillian Rathburn Scott Parker* + +* To be retained for up to six months after the Effective Date of the Outsourcing Agreement. + + 31 + + EXHIBIT F + + REPRESENTATIONS AND WARRANTIES OF WYZZ + + WYZZ hereby represents and warrants to Nexstar as follows: + + 1L. Organization and Good Standing. WYZZ is a corporation duly organized, validly existing and in good standing under the laws of Maryland and has full corporate power and authority to carry on its business as it is now being conducted and to own and use the assets owned and used by it. WYZZ is qualified as a foreign corporation in the State of Illinois. WYZZ does not own any direct or indirect subsidiaries. + + 2L. No Conflicts. Except as described on Schedule 2L to this Exhibit, neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby will (i) violate any provision of the articles of incorporation or by-laws of WYZZ, (ii) violate any provision of applicable law, rule and regulation, or (iii) conflict with or result in a breach of, or give rise to a right of termination of, or accelerate the performance required by the terms of any judgment, court order or consent decree, or any material agreement, indenture, mortgage or instrument to which WYZZ is a Party or to which its property is subject, or constitute a default thereunder. + + 3L. Real Property. Schedule 3L to this Exhibit contains a complete description of all real property, whether owned or leased (the "Real Property Interests") (including street address, and WYZZ's use thereof) used in connection with the operation of WYZZ-TV. The Real Property Interests listed on Schedule 3L to this Exhibit comprise all interests in real property currently used by WYZZ and necessary to conduct the business and operations of WYZZ-TV as now conducted. Except as described on Schedule 3L to this Exhibit, WYZZ has good title to all Real Property Interests free and clear of all liens, mortgages, pledges, covenants, easements, restrictions, encroachments, leases, charges, and other claims and encumbrances, which restricts WYZZ's interest in, or use of, the Real Property Interests, except for "Permitted Encumbrances" (as defined below). Each leasehold or subleasehold interest is included on Schedule 3L to this Exhibit and is legal, valid, binding, enforceable, and in full force and effect. WYZZ is not in default, violation, or breach under any lease or sublease, and no event has occurred and is continuing that constitutes (with notice or passage of time or both) a default, violation, or breach thereunder. To WYZZ's knowledge, WYZZ has not received any notice of a default, offset, or counterclaim under any lease or sublease with respect to any of the Real Property Interests. WYZZ enjoys peaceful and undisturbed possession of the Real Property Interests; and so long as WYZZ fulfills its obligations under the lease therefor, WYZZ has enforceable rights to nondisturbance and quiet enjoyment against its lessor or sublessor and, except as set forth in Schedule 3L to this Exhibit, no third Party holds any interest in the leased premises with the right to foreclose upon WYZZ's leasehold or subleasehold interest. To WYZZ's knowledge, WYZZ has legal and practical access to all of the Real Property Interests. Except as + + 1 + +otherwise disclosed in Schedule 3L to this Exhibit, all towers, guy anchors, ground radials, and buildings and other improvements included in the Real Property Interests are located entirely on the Real Property Interests listed in Schedule 3L to this Exhibit. All Real Property Interests (including the improvements thereon) (a) are in good condition and repair consistent with its current use, (b) are available for immediate use in the conduct of the business and operations of WYZZ-TV, and (c) comply in all material respects with all applicable material building or zoning codes and the regulations of any governmental authority having jurisdiction, except to the extent that the current use by WYZZ, while permitted, constitutes or would constitute a "nonconforming use" under current zoning or land use regulations. No eminent domain or condemnation proceedings are pending or, to WYZZ's knowledge, threatened with respect to any of the Real Property Interests. + + "Permitted Encumbrances" means (a) encumbrances of a landlord or other statutory liens not yet due and payable, (b) encumbrances arising in connection with equipment or maintenance financing or leasing under the terms of contracts disclosed pursuant to this Exhibit 1, (c) encumbrances for taxes not yet due and payable or which are being contested in good faith and by appropriate proceedings and with respect to which an appropriate reserve is + + + + + +maintained on the taxpayer's books and records in accordance with generally accepted accounting principles, (d) or encumbrances which do not materially detract from the value of any of the assets of License or Nexstar or materially interfere with the use thereof. + + 4L. Tangible Personal Property. Schedule 4L to this Exhibit contains a complete list and description of all of WYZZ's tangible personal property (the Personal Property") used or useful in the operation of WYZZ's Station. Except as noted on Schedule 4L, WYZZ owns and has good title to each item of Personal Property listed and described on Schedule 4L to this Exhibit. Except as otherwise noted on Schedule 4L to this Exhibit, none of the Personal Property owned by WYZZ and used in the operation of WYZZ-TV is subject to any security interest, mortgage, pledge, conditional sales agreement, or other lien or encumbrance, except for Permitted Encumbrances. With allowance for normal repairs, maintenance, wear and obsolescence, each material item of Personal Property is in good operating condition and repair, and is available for immediate use in the business and operation of WYZZ-TV. The Personal Property comprises all the tangible personal property currently used by WYZZ and necessary to conduct the business and operations of WYZZ-TV as now conducted. + + 5L. FCC. WYZZ-TV is operated in material compliance with all the terms and conditions of all WYZZ-TV FCC authorizations and licenses, the Act, and applicable rules, regulations and policies of the FCC. All WYZZ-TV FCC authorizations and licenses (a true and complete list of which is set forth on Schedule 5L to this Exhibit, and true and complete copies of each of which have been delivered to Nexstar) have been validly issued and are valid and in full force and effect. The FCC authorizations and licenses listed on Schedule 5L to this Exhibit comprise all of the licenses, permits, and other authorizations required + + 2 + +from any governmental or regulatory authority for the lawful conduct of the business and operations of WYZZ-TV in the manner and to the full extent as it is now conducted. Except as set forth on Schedule 5L to this Exhibit, no application, action, or proceeding is pending for the renewal or modification of any of the FCC authorizations or licenses, and there is not now before the FCC any investigation or complaint against WYZZ or relating to WYZZ-TV, the unfavorable resolution of which would impair the qualifications of WYZZ to hold any FCC authorizations or licenses. Except as set forth on Schedule 5L to this Exhibit, there is no proceeding pending before the FCC, and WYZZ has received no notice of violation from the FCC with respect to WYZZ. Except as set forth on Schedule 5L to this Exhibit, WYZZ has received no order or notice of violation issued by any governmental entity which permits revocation, adverse modification or termination of any FCC authorization or license. Except as set forth on Schedule 5L to this Exhibit, none of the FCC authorizations or licenses is subject to any restriction or condition that requires any material change in the operation of WYZZ-TV as currently operated. The FCC authorizations and licenses listed in Schedule 5L to this Exhibit are currently in effect and, except as disclosed on the Schedules, are not subject to any liens or other encumbrances. No renewal applications are pending with respect to any of the FCC authorizations or licenses. All documents required by 47 C.F.R. Section 73.3526 to be kept in WYZZ-TV's public inspection files are in such file, and such file will be maintained in proper order and complete during the Term. WYZZ has filed all material reports and filings with the FCC, has registered its antennas, and has paid all regulatory fees. + + 6L. Intellectual Property. Set forth on Schedule 6L to this Exhibit is a complete list of all trademarks, tradenames, patents, website URLs and other intellectual property used in connection with the operation of WYZZ-TV and owned by or licensed to WYZZ on the date hereof and, except as otherwise set forth on Schedule 6L to this Exhibit hereto, WYZZ owns such Intellectual Property free and clear of any royalty, lien, encumbrance or charge and does not interfere with the rights of others. WYZZ has not received any written notice or written claim that any such Intellectual Property is not valid or enforceable, or of any infringement upon or conflict with any patent, trademark, service mark, copyright or trade name of any third Party by WYZZ. Except as set forth on Schedule 6L to this Exhibit, WYZZ has not given any notice of infringement to any third Party with respect to any of the Intellectual Property, and no such infringement exists. + + 7L. Labor. With respect to employees of WYZZ-TV: + +(i) WYZZ is and has been in compliance in all material respects with all applicable laws respecting employment and employment practices, terms and conditions of employment and wages and hours, including without limitation any such laws respecting employment discrimination, workers' compensation, family and medical leave, the Immigration Reform and Control Act, and occupational safety and health requirements, and no claims or investigations are pending or, to WYZZ's knowledge, threatened with respect to such laws, either by private individuals or by governmental agencies, and all + + 3 + +employees are at-will except for those employees whose employment agreements have been provided to Nexstar. + + (ii) The employees of WYZZ-TV are not and have never been represented by any labor union in connection with employment by WYZZ, and no collective bargaining agreement is or has been binding and in force against, or + + + + + +currently being negotiated by, WYZZ. No labor representation organization effort currently exists nor has there been any such activity within the past three (3) years. No grievance or arbitration proceeding arising out of or under collective bargaining agreements or employment relationships is pending, and no claims therefore exist or have, to WYZZ's knowledge, been threatened; no labor strike, lock-out, slowdown, or work stoppage is or has ever been pending or threatened against or directly affecting WYZZ. + + (iii) WYZZ is not and has never been engaged in any unfair labor practice, and here is not now, nor within the past three (3) years has there been, any unfair labor practice complaint against WYZZ pending or, to WYZZ's knowledge, threatened before the National Labor Relations Board or any other comparable foreign or domestic authority or any workers' council. + + (iv) All Persons at WYZZ-TV classified by WYZZ as independent contractors do satisfy and have satisfied the requirements of law to be so classified, and WYZZ has fully and accurately reported WYZZ's payments to them on IRS Forms 1099 when required to do so. + + (v) WYZZ is and has been in compliance with all applicable domestic and foreign laws concerning employer contributions to any trade union, housing, unemployment, retirement, bonus and welfare funds and all other funds to which an employer is required by law to contribute. + + (vi) Schedule 7L(vi) to this Exhibit contains a complete list of WYZZ's Employees by position and the compensation paid to each. Except as otherwise disclosed on Schedule 7L(vi) to this Exhibit, since September 30, 2001, no employee of WYZZ-TV, or group of employees, the loss of whom would have a material adverse effect on the business of WYZZ-TV, has notified WYZZ of his or their intent to (A) terminate his or her relationship with WYZZ, or (B) make any demand for material payments or modifications of his or their arrangements with WYZZ. + + (vii) WYZZ has entered into all employment contracts, individual labor contracts, collective labor contracts, and similar agreements to the extent required by applicable domestic and foreign laws, and WYZZ has delivered to Nexstar prior to the date hereof true and complete copies of all employment contracts, individual labor contracts, collective labor contracts, and similar agreements, whether written or oral, to which WYZZ is a Party. + + 4 + + 8L. Insurance. Schedule hereto contains a list of all insurance policies concerning the business and operation of WYZZ-TV, other than employee-benefit related insurance policies. All such policies are in full force and effect, there are no existing breaches or defaults by WYZZ with respect to such policies, and no notice of cancellation or termination has been received by WYZZ. During the past three (3) years, no insurance policy relating to WYZZ-TV has been cancelled by the insurer, and no application of WYZZ for insurance has been rejected by any insurer. + + 9L. Compliance with Laws. With respect to WYZZ-TV, except as set forth on Schedule 9L to this Exhibit, WYZZ is in compliance in all material respects with all applicable Federal, state and local laws, rules and regulations and, to WYZZ's knowledge, WYZZ has received no notice of any action threatened or pending alleging noncompliance therewith. + + 10L. Litigation. Except as set forth on Schedule 10L to this Exhibit hereto, there is no pending suit, claim, action, proceeding or arbitration relating to the business, or operations of WYZZ-TV or which seeks to enjoin or obtain damages in respect of the transactions contemplated hereby or, to WYZZ's knowledge, threatened against WYZZ. WYZZ has received no citation, order, judgment, writ, injunction, or decree of any court, government, or governmental or administrative agency against or affecting the business of WYZZ or the operation of WYZZ-TV, except as disclosed on Schedule 10L to this Exhibit, and except for such FCC orders and other governmental orders, decrees and other actions which apply to the broadcasting industry generally. + + 11L. Environmental. + + (i) Environmental Compliance. Except as disclosed on Schedule 11L, (a) none of the Personal Property and, to the knowledge of WYZZ, none of the Real Property Interests contain (i) any asbestos, polychlorinated biphenyls, or any PCB contaminated oils; (ii) any Contaminants (as defined below); or (iii) any underground storage tanks; and (b) no underground storage tank disclosed on Schedule 11L has leaked and has not been remediated or leaks and such tank is in substantial compliance with all applicable Environmental Laws (as defined below). + + (ii) Definition of Contaminant. For purposes of this Agreement, "Contaminant" shall mean and include any pollutant, contaminant, hazardous material (as defined in any of the Environmental Laws), toxic substances (as defined in any of the Environmental Laws), asbestos or asbestos containing material, urea formaldehyde, polychlorinated biphenyls, regulated substances and wastes, radioactive materials, and petroleum or petroleum by-products, including oil or any fraction thereof. + + 5 + + (iii) Definition of Environmental Laws. "Environmental Laws" shall + + + + + +mean and include, but not be limited to, any applicable federal, state or local law, statute, charter, ordinance, rule, or regulation or any Governmental Body interpretation, policy, or guidance, including, without limitation, applicable safety/environmental/health laws, such as, but not limited to, the Resource Conservation and Recovery Act of 1976, Comprehensive Environmental Response Compensation and Liability Act, Federal Emergency Planning and Community Right-to-Know Law, the Clean Air Act, the Clean Water Act, and the Toxic Substance Control Act, as any of the foregoing have been amended, and any Governmental Authorization or Order applicable to or affecting the Property or any other property (real or personal) used by or relating to WYZZ-TV or issued pursuant to any Environmental Laws which pertains to, governs, or controls the generation, storage, remediation, or removal of Contaminants, or otherwise regulates the protection of health and the environment, including, but not limited to, any of the following activities, whether on site or off site if such could materially affect the site: (i) the emission, discharge, release, spilling, or dumping of any Contaminant into the air, surface water, ground water, soil or substrata; or (ii) the use, generation, processing, sale, recycling treatment, handling, storage, disposal, transportation, labeling, or any other management of any Contaminant. + + 12L. Tax Matters. + + Except as set forth on Schedule 12L to this Exhibit hereto: + + (i) All Tax Returns required to be filed by WYZZ have been filed when due in a timely fashion and all such Tax Returns are true, correct and complete in all material respects. + + (ii) WYZZ has paid in full on a timely basis all Taxes owed by it that were payable on or prior to the date hereof, whether or not shown on any Tax Return. + + (iii) The amount of WYZZ's liability for unpaid Taxes did not, as of September 30, 2001 exceed the amount of the current liability accruals for such Taxes (excluding reserves for deferred Taxes) reflected on the WYZZ Financial Statements. + + (iv) WYZZ has withheld and paid over to the proper governmental authorities all Taxes required to have been withheld and paid over (and complied in all material respects with all information reporting and backup withholding requirements, including maintenance of required records with respect thereto) in connection with amounts paid to any employee, independent contractor, creditor, or other third Party. + + (v) WYZZ has received no notice of any Tax Proceeding currently pending with respect to WYZZ and WYZZ has not received notice from any Tax Authority that it intends to commence a Tax Proceeding. + + 6 + + (vi) There are no liens on the assets of WYZZ relating or attributable to Taxes (except liens for Taxes not yet due). + +13L. Accounts Receivable. All accounts receivable of WYZZ that relate to WYZZ-TV and that are reflected on the WYZZ Financial Statements (as defined in these Schedules) or on the accounting records of WYZZ as of the date hereof (collectively, the "Accounts Receivable") represent valid obligations arising from sales actually made or services actually performed in the ordinary course of business. Except as stated in Schedule 13L to this Exhibit, the Accounts Receivable are current and collectable, net of the reserves shown on the WYZZ Financial Statements (which reserves are adequate and calculated consistent with past practice) or on the accounting records of WYZZ. There is no contest, claim, or right of setoff, other than returns in the ordinary course of business, under any contract with any obligor of an Accounts Receivable relating to the amount or validity of such Accounts Receivable. WYZZ's financial records include a complete and accurate list of all Accounts Receivable. + + 14L. Financial Statements. WYZZ has delivered to Nexstar (and same are attached hereto as Schedule 14L to this Exhibit) the audited (or, if not available, unaudited) balance sheet, statement of operations and accumulated deficits, and statement of cash flows for WYZZ-TV for the two (2) fiscal years immediately preceding the date of this Agreement as well as the unaudited balance sheet, income statement and statement of cash flows for the interim period beginning at the close of WYZZ's most recent fiscal year and ending on September 30, 2001 (collectively, the "WYZZ Financial Statements"). The WYZZ Financial Statements are sufficient to determine the BCF of WYZZ-TV, which WYZZ Financial Statements, WYZZ acknowledges have been used to form the basis of the provisions of Section 2 hereof. The WYZZ Financial Statements submitted in connection with this Agreement (including, in all cases, the notes thereto, if any) (i) is accurate and complete in all material respects; (ii) is consistent in all material respects with the books and records of WYZZ; (iii) fairly presents in all material respects the financial condition and results of the operations of WYZZ-TV consistently applied; and (iv) have been prepared in accordance with GAAP (except, to the extent not audited, for the absence of footnote and certain year-end adjustments). None of the WYZZ Financial Statements understates in any material respect the normal and customary costs and expenses in conducting the business or operations of WYZZ-TV as currently conducted by WYZZ or otherwise materially inaccurately reflects the operations of WYZZ-TV. + + 15L. Contracts. Schedule 15L to this Exhibit lists all written Contracts and true and complete descriptions of all material oral contracts (including any amendments or other modifications to such Contracts). All of the Contracts are + + + + + +in full force and effect, and are valid, binding, and enforceable in accordance with their terms except as to the enforceability of such contracts may be effected by bankruptcy, insolvency, or similar + + 7 + +laws affecting creditors' rights generally and by judicial discretion in the enforcement of equitable remedies. WYZZ is not and, to the knowledge of WYZZ, no other party to such contracts is in default, violation, or breach in any material respect under any contract, and no event has occurred and is continuing that constitutes (with notice or passage of time or both) a default, violation, or breach in any material breach thereunder. To the knowledge of WYZZ, no party to any Contract has any intention to (a) terminate such Contract or amend the terms thereof; (b) refuse to renew any contract upon expiration of its term; or (c) renew the Contract upon expiration only on terms and conditions that are more onerous to those now existing. For purposes of this Agreement, "Contracts" means all contracts, consulting agreements, leases, non-governmental licenses and other agreements (including leases for personal or real property and employment agreements), written or oral (including any amendments and other modifications thereto), to which WYZZ is a party or that are binding upon WYZZ and that relate to or effect the assets, properties, business, or operations of WYZZ-TV that are in effect as of the Effective Date. + + 8 + + REPRESENTATIONS AND WARRANTIES OF NEXSTAR + + Nexstar hereby represents and warrants to WYZZ as follows: + + 1P. Organization and Good Standing. Nexstar is a corporation duly organized, validly existing and in good standing under the laws of Delaware and has full corporate power and authority to carry on its business as it is now being conducted and to own and use the assets owned and used by it. Nexstar is qualified as a foreign corporation in the State of Illinois. Nexstar does not own any direct or indirect subsidiaries. + + 2P. No Conflicts. Except as described on Schedule 2P to this Exhibit, neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby will (i) violate any provision of the articles of incorporation or by-laws of Nexstar, (ii) violate any provision of applicable law, rule and regulation, or (iii) conflict with or result in a breach of, or give rise to a right of termination of, or accelerate the performance required by the terms of any judgment, court order or consent decree, or any material agreement, indenture, mortgage or instrument to which Nexstar is a Party or to which its property is subject, or constitute a default thereunder. + + 3P. Real Property. Schedule 3P to this Exhibit contains a complete description of all real property, whether owned or leased (the "Real Property Interests") (including street address or legal description, and Nexstar's use thereof) used in connection with the operation of WMBD-TV. The Real Property Interests listed on Schedule 3P to this Exhibit comprise all interests in real property currently used by Nexstar and necessary to conduct the business and operations of WMBD-TV as now conducted. Except as described on Schedule 3P to this Exhibit, Nexstar has good title to all Real Property Interests free and clear of all liens, mortgages, pledges, covenants, easements, restrictions, encroachments, leases, charges, and other claims and encumbrances, which restricts Nexstar's interest in, or use of, the Real Property Interests, except for Permitted Encumbrances. Each leasehold or subleasehold interest is included on Schedule 3P to this Exhibit and is legal, valid, binding, enforceable, and in full force and effect. Nexstar is not in default, violation, or breach under any lease or sublease, and no event has occurred and is continuing that constitutes (with notice or passage of time or both) a default, violation, or breach thereunder. To Nexstar's knowledge, Nexstar has not received any notice of a default, offset, or counterclaim under any lease or sublease with respect to any of the Real Property Interests. Nexstar enjoys peaceful and undisturbed possession of the Real Property Interests; and so long as Nexstar fulfills its obligations under the lease therefor, Nexstar has enforceable rights to nondisturbance and quiet enjoyment against its lessor or sublessor and, except as set forth in Schedule 3P to this Exhibit, no third Party holds any interest in the leased premises with the right to foreclose upon Nexstar's leasehold or subleasehold interest. To Nexstar's knowledge, Nexstar has legal and practical access to all of the Real Property Interests. Except as otherwise disclosed in Schedule 3P to this Exhibit, all towers, guy anchors, ground radials, and buildings and other improvements included in the Real Property + + 1 + +Interests are located entirely on the Real Property Interests listed in Schedule 3P to this Exhibit. All Real Property Interests (including the improvements thereon) (a) are in good condition and repair consistent with its current use, (b) are available for immediate use in the conduct of the business and operations of the Nexstar Station, and (c) comply in all material respects with all applicable material building or zoning codes and the regulations of any governmental authority having jurisdiction, except to the extent that the current use by Nexstar, while permitted, constitutes or would constitute a "nonconforming use" under current zoning or land use regulations. No eminent domain or condemnation proceedings are pending or, to Nexstar's knowledge, + + + + + +threatened with respect to any of the Real Property Interests. + + 4P. Tangible Personal Property. Schedule 4P to this Exhibit contains a complete list and description of all of Nexstar's tangible personal property (the Personal Property") used or useful in the operation of Nexstar's Station. Except as noted on Schedule 4P, Nexstar owns and has good title to each item of Personal Property listed and described on Schedule 4P to this Exhibit. Except as otherwise noted on Schedule 4P to this Exhibit, none of the Personal Property owned by Nexstar and used in the operation of the Nexstar Station is subject to any security interest, mortgage, pledge, conditional sales agreement, or other lien or encumbrance, except for Permitted Encumbrances. With allowance for normal repairs, maintenance, wear and obsolescence, each material item of Personal Property is in good operating condition and repair, and is available for immediate use in the business and operation of WMBD-TV. The Personal Property comprises all the tangible personal property currently used by Nexstar and necessary to conduct the business and operations of WMBD-TV as now conducted. + + 5P. FCC. WMBD-TV is operated in material compliance with all the terms and conditions of all WMBD-TV FCC authorizations and licenses, the Act, and applicable rules, regulations and policies of the FCC. All WMBD-TV FCC authorizations and licenses (a true and complete list of which is set forth on Schedule 5P to this Exhibit, and true and complete copies of each of which have been delivered to WYZZ) have been validly issued and are valid and in full force and effect. The FCC authorizations and licenses listed on Schedule 5P to this Exhibit comprise all of the licenses, permits, and other authorizations required from any governmental or regulatory authority for the lawful conduct of the business and operations of WMBD-TV in the manner and to the full extent as it is now conducted. Except as set forth on Schedule 5P to this Exhibit, no application, action, or proceeding is pending for the renewal or modification of any of the FCC authorizations or licenses, and there is not now before the FCC any investigation or complaint against Nexstar or relating to WMBD-TV, the unfavorable resolution of which would impair the qualifications of Nexstar to hold any FCC authorizations or licenses. Except as set forth on Schedule 5P to this Exhibit, there is no proceeding pending before the FCC, and Nexstar has received no notice of violation from the FCC with respect to Nexstar. Except as set forth on Schedule 5P to this Exhibit, Nexstar has received no order or notice of violation issued by any governmental entity which permits revocation, adverse modification or termination of + + 2 + +any FCC authorization or license. Except as set forth on Schedule 5P to this Exhibit, none of the FCC authorizations or licenses is subject to any restriction or condition that requires any material change in the operation of WMBD-TV as currently operated. The FCC authorizations and licenses listed in Schedule 5P to this Exhibit are currently in effect and, except as disclosed on the Schedules, are not subject to any liens or other encumbrances. No renewal applications are pending with respect to any of the FCC authorizations or licenses. All documents required by 47 C.F.R. Section 73.3526 to be kept in WMBD-TV's public inspection files are in such file, and such file will be maintained in proper order and complete during the Term. Nexstar has filed all material reports and filings with the FCC, has registered its antennas, and has paid all regulatory fees. + + 6P. Intellectual Property. Set forth on Schedule 6P to this Exhibit is a complete list of all trademarks, tradenames, patents, website URLs and other intellectual property used in connection with the operation of WMBD-TV and owned by or licensed to Nexstar on the date hereof and, except as otherwise set forth on Schedule 6P to this Exhibit hereto, WYZZ owns such Intellectual Property free and clear of any royalty, lien, encumbrance or charge and does not interfere with the rights of others. Nexstar has not received any written notice or written claim that any such Intellectual Property is not valid or enforceable, or of any infringement upon or conflict with any patent, trademark, service mark, copyright or trade name of any third Party by Nexstar. Except as set forth on Schedule 6P to this Exhibit, Nexstar has not given any notice of infringement to any third Party with respect to any of the Intellectual Property, and no such infringement exists. + + 7P. Labor. Except as set forth on Schedule 7P, with respect to employees of WMBD-TV: + + (i) Nexstar is and has been in compliance in all material respects with all applicable laws respecting employment and employment practices, terms and conditions of employment and wages and hours, including without limitation any such laws respecting employment discrimination, workers' compensation, family and medical leave, the Immigration Reform and Control Act, and occupational safety and health requirements, and no claims or investigations are pending or, to the Nexstar's knowledge, threatened with respect to such laws, either by private individuals or by governmental agencies, and all employees are at-will. + + (ii) The employees of WMBD-TV are not and have never been represented by any labor union in connection with employment by Nexstar, and no collective bargaining agreement is or has been binding and in force against, or currently being negotiated by, Nexstar. No labor representation organization effort currently exists nor has there been any such activity within the past three (3) years. No grievance or arbitration proceeding arising out of or under collective bargaining agreements or employment relationships is pending, and no claims therefore exist or have, to Nexstar's + + 3 + + + + + +knowledge, been threatened; no labor strike, lock-out, slowdown, or work stoppage is or has ever been pending or threatened against or directly affecting Nexstar. + + (iii) Nexstar is not and has never been engaged in any unfair labor practice, and here is not now, nor within the past three (3) years has there been, any unfair labor practice complaint against Nexstar pending or, to Nexstar's knowledge, threatened before the National Labor Relations Board or any other comparable foreign or domestic authority or any workers' council. + + (iv) All Persons at WMBD-TV classified by Nexstar as independent contractors do satisfy and have satisfied the requirements of law to be so classified, and Nexstar has fully and accurately reported Nexstar's payments to them on IRS Forms 1099 when required to do so. + + (v) Nexstar is and has been in compliance with all applicable domestic and foreign laws concerning employer contributions to any trade union, housing, unemployment, retirement, bonus and welfare funds and all other funds to which an employer is required by law to contribute. + + (vi) Schedule 7P(vi) to this Exhibit contains a complete list of Nexstar's Employees by position and the compensation paid to each. Except as otherwise disclosed on Schedule 7P(vi), since September 30, 2001, no employee of WMBD-TV, or group of employees, the loss of whom would have a material adverse effect on the business of WMBD-TV, has notified Nexstar of his or their intent to (A) terminate his or her relationship with Nexstar, or (B) make any demand for material payments or modifications of his or their arrangements with Nexstar. + + (vii) Nexstar has entered into all employment contracts, individual labor contracts, collective labor contracts, and similar agreements to the extent required by applicable domestic and foreign laws, and Nexstar has delivered to WYZZ prior to the date hereof true and complete copies of all employment contracts, individual labor contracts, collective labor contracts, and similar agreements, whether written or oral, to which Nexstar is a Party. + + 8P. Insurance. Schedule 8P hereto contains a list of all insurance policies concerning the business and operation of WMBD-TV, other than employee-benefit related insurance policies. All such policies are in full force and effect, there are no existing breaches or defaults by Nexstar with respect to such policies, and no notice of cancellation or termination has been received by Nexstar. During the past three (3) years, no insurance policy relating to WMBD-TV has been cancelled by the insurer, and no application of Nexstar for insurance has been rejected by any insurer. + + 4 + + 9P. Compliance with Laws. With respect to WMBD-TV, except as set forth on Schedule 9P to this Exhibit, WYZZ is in compliance in all material respects with all applicable Federal, state and local laws, rules and regulations and, to Nexstar's knowledge, Nexstar has received no notice of any action threatened or pending alleging noncompliance therewith. + + 10P. Litigation. Except as set forth on Schedule 10P to this Exhibit hereto, there is no pending suit, claim, action, proceeding or arbitration relating to the business, or operations of WMBD-TV or which seeks to enjoin or obtain damages in respect of the transactions contemplated hereby or, to Nexstar's knowledge, threatened against Nexstar. Nexstar has received no citation, order, judgment, writ, injunction, or decree of any court, government, or governmental or administrative agency against or affecting the business of Nexstar or the operation of WMBD-TV, except as disclosed on Schedule 10P to this Exhibit, and except for such FCC orders and other governmental orders, decrees and other actions which apply to the broadcasting industry generally. + + 11P. Environmental. + + (i) Environmental Compliance. Except as disclosed on Schedule 11P to this Exhibit, (a) none of the Personal Property and, to the knowledge of Nexstar,&bbsp;none of the Real Property Interests contain (i) any asbestos, polychlorinated biphenyls, or any PCB contaminated oils; (ii) any Contaminants (as defined below); or (iii) any underground storage tanks; and (b) no underground storage tank disclosed on Schedule 11P to this Exhibit has leaked and has not been remediated or leaks and such tank is in substantial compliance with all applicable Environmental Laws (as defined below). + + (ii) Definition of Contaminant. For purposes of this Agreement, "Contaminant" shall mean and include any pollutant, contaminant, hazardous material (as defined in any of the Environmental Laws), toxic substances (as defined in any of the Environmental Laws), asbestos or asbestos containing material, urea formaldehyde, polychlorinated biphenyls, regulated substances and wastes, radioactive materials, and pretroleum or petroleum by-products, including credue oil or any fraction thereof. + + (iii) Definition of Environmental Laws. "Environmental Laws" shall mean and include, but not be limited to, any applicable federal, state or local law, statute, charter, ordinance, rule, or regulation or any Governmental Body interpretation, policy, or guidance, including, without limitation, applicable safety/environmental/health laws, such as, but not limited to, the Resource Conservation and Recovery Act of 1976, Comprehensive Environmental Response Compensation and Liability Act, Federal Emergency Planning and Community Right-to-Know Law, the Clean Air Act, the Clean Water Act, and the Toxic + + + + + +Substance Control Act, as any of the foregoing have been amended, and any Governmental Authorization or Order applicable to or affecting the Property or any other property (real or personal) used by or relating to WMBD-TV or + + 5 + +issued pursuant to any Environmental Laws which pertains to, governs, or controls the generation, storage, remediation, or removal of Contaminants, or otherwise regulates the protection of health and the environment, including, but not limited to, any of the following activities, whether on site or off site if such could materially affect the site: (i) the emission, discharge, release, spilling, or dumping of any Contaminant into the air, surface water, ground water, soil or substrata; or (ii) the use, generation, processing, sale, recycling treatment, handling, storage, disposal, transportation, labeling, or any other management of any Contaminant. + + 12P. Tax Matters. + + Except as set forth on Schedule 12P to this Exhibit hereto: + + (i) All Tax Returns required to be filed by Nexstar have been filed when due in a timely fashion and all such Tax Returns are true, correct and complete in all material respects. + + (ii) Nexstar has paid in full on a timely basis all Taxes owed by it that were payable on or prior to the date hereof, whether or not shown on any Tax Return. + + (iii) The amount of Nexstar's liability for unpaid Taxes did not, as of September 30, 2001 exceed the amount of the current liability accruals for such Taxes (excluding reserves for deferred Taxes) reflected on the Nexstar Financial Statements. + + (iv) Nexstar has withheld and paid over to the proper governmental authorities all Taxes required to have been withheld and paid over (and complied in all material respects with all information reporting and backup withholding requirements, including maintenance of required records with respect thereto) in connection with amounts paid to any employee, independent contractor, creditor, or other third Party. + + (v) Nexstar has received no notice of any Tax Proceeding currently pending with respect to Nexstar and Nexstar has not received notice from any Tax Authority that it intends to commence a Tax Proceeding. + + (vi) There are no liens on the assets of Nexstar relating or attributable to Taxes (except liens for Taxes not yet due). + + 13P. Accounts Receivable. All accounts receivable of Nexstar that relate to WMBD-TV and that are reflected on Nexstar Financial Statements (as defined in these Schedules) or on the accounting records of WYZZ as of the date hereof (collectively, the "Accounts Receivable") represent valid obligations arising from sales actually made or services actually performed in the ordinary course of business. Except as stated in Schedule 13P to this Exhibit, the Accounts Receivable are current and collectable, net of + + 6 + +the reserves shown on the Nexstar Financial Statements (which reserves are adequate and calculated consistent with past practice) or on the accounting records of Nexstar. There is no contest, claim, or right of setoff, other than returns in the ordinary course of business, under any contract with any obligor of an Accounts Receivable relating to the amount or validity of such Accounts Receivable. Nexstar's financial records include a complete and accurate list of all Accounts Receivable. + + 14P. Financial Statements. Nexstar has delivered to WYZZ (and same are attached hereto as Schedule 14P to this Exhibit) the audited (or, if not available, unaudited) balance sheet, statement of operations and accumulated deficits, and statement of cash flows for WMBD-TV for the two (2) fiscal years immediately preceding the date of this Agreement as well as the unaudited balance sheet, income statement and statement of cash flows for the interim period beginning at the close of Nexstar's most recent fiscal year and ending on September 30, 2001 (collectively, the "Nexstar Financial Statements"). The Nexstar Financial Statements are sufficient to determine the BCF of WMBD-TV, which Nexstar Financial Statements, Nexstar acknowledges have been used to form the basis of the provisions of Section 2 hereof. The Nexstar Financial Statements submitted in connection with this Agreement (including, in all cases, the notes thereto, if any) (i) is accurate and complete in all material respects; (ii) is consistent in all material respects with the books and records of WYZZ; (iii) fairly presents in all material respects the financial condition and results of the operations of WMBD-TV consistently applied; and (iv) have been prepared in accordance with GAAP (except, to the extent not audited, for the absence of footnotes and certain year-end adjustments). None of the Nexstar Financial Statements understates in any material respect the normal and customary costs and expenses in conducting the business or operations of WMBD-TV as currently conducted by Nexstar or otherwise materially inaccurately reflects the operations of WMBD-TV. + + 15P. Contracts. Schedule 15P to this Exhibit lists all written Contracts and true and complete descriptions of all oral contracts (including any + + + + + +amendments or other modifications to such Contracts). All of the Contracts are in full force and effect, and are valid, binding, and enforceable in accordance with their terms except as to the enforceability of such contracts may be effected by bankruptcy, insolvency, or similar laws affecting creditors' rights generally and by judicial discretion in the enforcement of equitable remedies. Nexstar is not and, to the knowledge of Nexstar, no other party to such contracts is in default, violation, or breach in any material respect under any contract, and no event has occurred and is continuing that constitutes (with notice or passage of time or both) a default, violation, or breach in any material breach thereunder. To the knowledge of Nexstar, no party to any Contract has any intention to (a) terminate such Contract or amend the terms thereof; (b) refuse to renew any contract upon expiration of its term; or (c) renew the Contract upon expiration only on terms and conditions that are more onerous to those now existing. For purposes of this Agreement, "Contracts" means all contracts, consulting agreements, leases, non-governmental + + 7 + +licenses and other agreements (including leases for personal or real property and employment agreements), written or oral (including any amendments and other modifications thereto), to which Nexstar is a party or that are binding upon Nexstar and that relate to or effect the assets, properties, business, or operations of the Nexstar Station that are in effect as of the Effective Date. + + 8 + + &sbsp; EXHIBIT G + + [List of Transferred Employees] + + Schedule 7L is hereby incorporated herein by reference except to the extent included on such Schedule are the names of those Employees listed on Exhibit E. + + 9 + + EXHIBIT H + + [Initial Operating Budget] + +See attached. + + 10 + + EXHIBIT I + + [Terminated Employees Positions] + + See Attached + + 11 \ No newline at end of file diff --git a/full_contract_txt/NICELTD_06_26_2003-EX-4.5-OUTSOURCING AGREEMENT.txt b/full_contract_txt/NICELTD_06_26_2003-EX-4.5-OUTSOURCING AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..5b1a5c6183756266872c7a4bc3bf284c39da4ffe --- /dev/null +++ b/full_contract_txt/NICELTD_06_26_2003-EX-4.5-OUTSOURCING AGREEMENT.txt @@ -0,0 +1,819 @@ +EXHIBIT 4.5 + + MANUFACTURING OUTSOURCING AGREEMENT + +This Manufacturing Outsourcing Agreement (The "AGREEMENT") is entered into on January 21st, 2002, by and between Nice Systems Ltd., an Israeli registered corporation no. 52-0036872 having its place of business at 8 Hapnina Street, P.O.B 690, Ra'anana 43107, Israel, ("NICE") and Flextronics Israel Ltd., an Israeli registered corporation no. 51-2933045, having its place of business at 1 Hatasiya Str., Ramat Gabriel Industrial Zone, Migdal Haemek 23108, P.O.Box 867, Israel (the "CONTRACTOR"). NICE and Contractor are collectively referred to as the Parties. + +RECITALS + +WHEREAS NICE issued a request for information ("RFI") version A.2 dated June 17th, 2001 to a number of manufacturers seeking to provide NICE with certain local Manufacturing Outsourcing Services (as defined hereinafter) for the production, testing and delivery in world class quality and capability of NICE' Products, on a turnkey basis, to acquire from NICE inventory related to the operations to be outsourced, and to contract with certain of the contractors performing portions of the remainder of work or to accept assignment of such contracts, all as detailed herein; + +WHEREAS the RFI was followed by a request for proposal including a detailed Statement of Work including Exhibits dated 13.8.01 (the "RFP"); + +WHEREAS the Contractor submitted a proposal in response to the RFI and RFP (together the "PROPOSAL" or the "CONTRACTOR'S PROPOSAL"); + +WHEREAS the bidding process resulted in the selection of Contractor, which represented that it possessed the necessary skills, staffing, experience, resources, and capabilities to provide those certain Manufacturing Outsourcing Services detailed herein in world class quality, capability and manner as set forth herein; + +WHEREAS the Parties have completed the pre-contract due diligence, and now wish to contract for the provision of the Manufacturing Outsourcing Services; + +NOW THEREFORE, FOR AND IN CONSIDERATION OF THE AGREEMENTS OF THE PARTIES SET FORTH BELOW, NICE AND CONTRACTOR AGREE AS FOLLOWS: + +A. DEFINITIONS. The following terms shall have the meanings set forth below: + + (i) "RFI" - shall have the meaning ascribed in the preamble above. + + (ii) "RFP" - shall have the meaning ascribed in the preamble above. + + (iii) "SOW" - Statement of Work document attached to the RFP and forming an integral part thereof including its Exhibits. + + (iv) "CONTRACTOR'S PROPOSAL" or "PROPOSAL" - shall have the meaning ascribed in the preamble above. It is clarified that for the purpose of Contractor's Proposal in response to the RFI, Contractor hereby declares that such Proposal was valid and correct at the date submitted in all material aspects which are relevant to NICE' decision to choose Contractor as the Manufacturing Outsourcing Services supplier. + + (v) "PRODUCTS" - Digital recording products as defined in APPENDIX A and further detailed in the PDM System, and as shall be amended from time to time by NICE and manufactured by Contractor in accordance herewith. + + (vi) "MANUFACTURING OUTSOURCING SERVICES" - Certain turnkey based purchasing, manufacturing, testing, configuration and delivery services for the Products all as detailed in the Agreement and its Appendices and Exhibits, including but not limited to: purchase of the Product's components which are not supplied by NICE, assembly and production of the Products subject to supervision, control and planning by NICE, execution of Measurements and Procedures, response times, providing infrastructure and resources, allocation of the required manpower, use of the Non Generic Equipment, execution of engineering and integration process, Engineering Changes, integration of NICE Software, implementation of Control and Planning, Engineering Changes and Change Order procedures, packaging requirements, dismantling and disassembly of Products procedure, spare part mechanism, quality control requirements, logistics management including inventory management, adjusting and meeting forecasts, components purchasing procedure, supplies and shipment schedules, issuing orders procedure, preparing export shipments, all of world class quality and capability and as provided herein, on a turnkey basis, and acquisition from NICE of certain inventory related to the operations to be outsourced, and to contract with certain of the contractors supplying components and/or performing portions of the remainder of work or to accept assignment of such contracts, all as detailed herein. + + (vii) "NICE SOFTWARE" - Dedicated software developed by NICE and/or for NICE, in which all Intellectual Property (as defined below) is owned + + + + + + by NICE. + + (viii) "PERSONNEL" - Contractors' employees, subcontractors, subcontractor's employees and any other person acting on behalf of Contractor. + + (ix) "AFFILIATE" - A corporation, partnership or other business entity which controls, is controlled by, or is under common control of a Party. For the purposes hereof, "CONTROL" shall mean the holding of more than 50% of the voting rights in the entity in question. + + 2 + + (x) "CUSTOMER/S" - NICE distributors, resellers, VAR's (value added resellers), OEM's and similar business partners and/or end-users, which purchase the Products. + + (xi) "NICE PROPRIETARY INFORMATION" - Any and all data and information disclosed by NICE to the Contractor during the term of this Agreement in any form, whether verbally, in writing or in machine readable form or in magnetic media, relating to the business, manufacturing, know-how, Products, NICE Software, any other products, items, components and affairs of NICE including its Affiliates, and including without limitation - documents, prototypes, samples and the NICE' plants and equipment, Products, certain proprietary and confidential information concerning NICE' past, present and future research, development and business activities and the results therefrom, including but not limited to digital recording solutions, applications and services technology. Proprietary Information may also include information disclosed to NICE by third parties. Proprietary Information shall not include data and information which: (i) was or will be, independently of this Agreement, lawfully in the possession of the Contractor without breach of obligation of secrecy of Contractor to NICE, and/or (ii) was or will be, independently of this Agreement, lawfully in the possession of the Contractor without breach of obligation of secrecy of a third party to NICE, or (iii) was in the public domain or was common knowledge at the time of receipt by the Contractor; or (iv) following its disclosure to the Contractor as the receiving Party, has, through no fault on the part of the Contractor, subsequently become part of the public domain or is common knowledge; or (v) is required to be disclosed by the Contractor to comply with applicable laws or governmental regulations, provided that the Contractor provides prior written notice of such disclosure to NICE and takes reasonable and lawful actions, at NICE' expense, to avoid and/or minimize the extent of such disclosure. + + "CONTRACTOR'S PROPRIETARY INFORMATION" - data and information disclosed by Contractor to NICE during the term of this Agreement in any form, whether verbally, in writing or in machine readable form or in magnetic media, relating to the business, manufacturing methods, know-how, systems, price lists, suppliers lists and terms of engagement with suppliers, of Contractor including its Affiliates, and including without limitation documents, and the Contractor's plants and equipment, all information disclosed under audits under this Agreement. Contractor's Proprietary Information may also include information disclosed to Contractor by third parties. Contractor's Proprietary Information shall not include data and information which: (i) was or will be, independently of this Agreement, lawfully in the possession of NICE + + 3 + + without breach of obligation of secrecy to Contractor, and/or (ii) was or will be, independently of this Agreement, lawfully in the possession of NICE without breach of obligation of secrecy of a third party to Contractor, or (iii) was in the public domain or was common knowledge at the time of receipt by NICE; or (iv) following its disclosure to NICE as the receiving Party, has, through no fault on the part of NICE, subsequently become part of the public domain or is common knowledge; or (v) is required to be disclosed by NICE to comply with applicable laws or governmental regulations, provided that NICE provides prior written notice of such disclosure to Contractor and takes reasonable and lawful actions, at Contractor's expense, to avoid and/or minimize the extent of such disclosure. + + (xii) "INTELLECTUAL PROPERTY" - Trademarks, trade names, logos, domain names, designs, patents, copyrights, inventions, discoveries, technology, know-how, trade secrets, confidential and proprietary information and mask works, all registrations and applications for any and all renewals, reissuances and extensions of, and all goodwill in, the foregoing. + + (xiii) "PURCHASE ORDER/S" or "PO/'S"- A NICE purchase order ordering manufacture and supply of the Products, issued in accordance herewith. + + (xiv) "TOTAL LEAD TIME" - The Purchase Lead Time, Sub Assembly Lead Time and Production Lead Time together. + + (xv) "PURCHASE LEAD TIME" - The maximum agreed time for purchase of components by Contractor in order to enable production and completion of a Product until the Due Date, being the total of the time required for ordering and delivering all relevant components to Contractor from Contractor's suppliers, subject to the Liability. The initial Purchase Lead Time for each component (including sub-assembly purchased from + + + + + + suppliers) will be as detailed in APPENDIX C and shall be reviewed and updated as necessary by the parties each Quarter during the duration of this Agreement according to the procedure detailed in this Agreement. The new Purchase Lead Time shall need to be agreed to by both parties, and, once agreed, shall be the binding Purchase Lead Time for the relevant components. The parties will also agree on the Purchase Lead Time regarding each new component to be included in a Product. + + (xvi) "SUB ASSEMBLY LEAD TIME" - The maximum agreed time for completion of sub-assemblies in order to enable production and completion of a Product until the Due Date, beginning at the end of the Purchase Lead Time for all relevant components and ending on successful completion of testing of the relevant sub-assemblies. The initial Sub Assembly Lead Time for each sub-assembly will be as detailed in APPENDIX C and shall be reviewed and updated as necessary by the parties each Quarter during the duration of this Agreement according to the procedure detailed in this Agreement. The new Sub Assembly Lead Time shall need to be agreed to by both parties, and, once agreed, shall be the binding Sub Assembly Lead Time for the relevant Sub Assemblies. The parties will also agree on the Sub Assembly Lead Time regarding each new Sub Assembly to be included in a Product. + + 4 + + (xvii) "PRODUCTION LEAD TIME" - The agreed time for completion of a Product until its Due Date, meaning from commencement of assembly (from sub-assemblies if applicable) until successful completion of testing, which shall always be fourteen (14) Days from receipt of the PO. + + (xviii) "ENGINEERING CHANGES" - Engineering change in the Product as detailed in Sections 3.10 and 3.11 to this Agreement. + + (xix) "ECR" - Engineering Change Request issued by NICE or by Contractor. + + (xx) "ECO" - Engineering Change Order issued by NICE at its discretion after an ECR, in accordance with Section 3.11 below. + + (xxi) "CHANGE ORDERS" - Change or changes or amendments in a specific order excluding rescheduling of an order/prices and excluding ECO's, as further detailed in Section 3.5. + + (xxii) "WARRANTY PERIOD" - Thirteen (13) months from the Shipment Date of the Product subject matter of the warranty, unless agreed otherwise by the parties in writing. + + (xxiii) "BACKUP SITE" - Contractor's backup site and/or the third party site, as detailed in APPENDIX G and in Section 2.9 below, designed to be operated in the event of force majeure or other event preventing the performance of the Manufacturing Outsourcing Services at Contractor's plant and to ensure an alternate facility with equivalent standards and availability. + + (xxiv) "DUE DATE" - The date of completion of the Product after completion of all quality and integration tests as detailed for each Product including in APPENDIX J and its classification as "finished goods" according to the date detailed in the relevant NICE Purchase Order, issued in accordance with this Agreement. + + (xxv) "SHIPMENT DATE" - the date of delivery of Products, properly packed (i.e. in accordance with this Agreement), including all documents required for the export of Products, to the NICE designated freight forwarder at Contractor's Location, which may be any time after the Due Date as determined by NICE, but not to exceed sixty (60) Days from the Due Date. + + (xxvi) "DAY" or "DAYS" - Calendar days unless specific reference is made to "Business Days". + + 5 + + (xxvii) "BUSINESS DAYS" - Sunday to Thursday, excluding holidays. Holiday eves shall be regarded as half a business day. + + (xxviii) "QUARTER" - a calendar quarter. + + (xxix) "EFFECTIVE DATE" - January 21st, 2002 + + (xxx) "LIABILITY " - components and sub-assemblies for which Contractor has an option of cancellation and/or rescheduling without liability, as detailed in APPENDIX C regarding each component and sub assembly. The cancellation window for VMI (Vendor Management Inventory) Components varies between 0 to 35 Days from ordering by Contractor. + + (xxxi) "NON GENERIC EQUIPMENT" - functional testing equipment and any equipment related thereto. + + (xxxii) "PDM SYSTEM" - NICE' engineering system (PDM) to which Contractor shall be granted access for the purpose of performance of this Agreement and whose contents shall be binding and constitute an integral part of this Agreement, subject to Section 17.1. The contents of the PDM System as at the date hereof which are not governed by Section 17.1 may only be changed further to an ECO issued in accordance herewith. + + + + + +B. INTERPRETATIONS + + As used in this Agreement: + + (i) The terms and expressions set out in Section "A" shall have the meanings ascribed therein. + + (ii) The preamble and Appendices and Schedules form an integral part of this Agreement. + + (iii) The masculine includes the neuter and the feminine; and the singular includes and plural and vice versa. + + (iv) A reference to any statute, enactment, order, regulation or other similar instrument shall be construed as a reference to the statute, enactment, order, regulation or instrument as amended by any subsequent statute, enactment, order, regulation or instrument or as contained in any subsequent re-enactment thereof. + + (v) Headings are included in this Agreement for ease of reference only and shall not affect the interpretation or construction of this Agreement. + + 6 + + (vi) References to Sections, Schedules, Appendices and Exhibits are, unless otherwise provided, references to sections, schedules, appendices and exhibits to this Agreement. + + (vii) In the event certain provisions incorporated in the Agreement are contradictory VIS-A-VIS other provisions incorporated in the Appendices and Schedules, the Agreement shall prevail. + + (viii) In the event certain provisions incorporated in the Appendices and Schedules are contradictory VIS-A-VIS other provisions incorporated therein, the specific provisions shall take precedence over the general provisions. + +C. APPENDICES AND SCHEDULES + + (i) Appendix A - Products; + + (ii) Appendix B - The Proposal; + + (iii) Appendix C - Prices, Purchase and Sub-Assembly Lead Time, cancellation windows, rescheduling period, minimum order, package quantity, labor costs, disassembly fees, Product prices, cancellation fees, ECR and ECO administrative costs [a new version to be completed within a month of signature of the Agreement and thereafter updated in accordance with this Agreement]; + + (iv) Appendix D - Insurance Certificate; + + (v) Appendix E - Non Disclosure Undertaking; + + (vi) Appendix F - NICE Inventory purchased by Contractor for the first Quarter (NICE Inventory purchased by Contractor for the second Quarter will be added as an addition to Appendix F at a later date); + + (vii) Appendix G - Back Up Site; + + (viii) Appendix H - Safety, Security & IT Requirements; + + (ix) Appendix I - Spare Parts / Upgrade; + + (x) Appendix J - Quality Assurance Requirements; + + (xi) Appendix K - NICE Products release policy; + + (xiv) Appendix N - RMA Process. + + 7 + +1. MANUFACTURING OUTSOURCING SERVICES + + 1.1. SCOPE OF WORK. During the term of and subject to this Agreement, Contractor shall perform the Manufacturing Outsourcing Services including purchase, assemble, manufacture, configure, test and deliver to NICE' freight forwarder in Contractor's facility, under the terms set forth below, and NICE shall purchase from Contractor, and Contractor shall sell to NICE, such quantities of units of the Products according to NICE' Purchase Orders, from time-to-time as detailed below, at the quoted prices set forth in Appendix C. This Agreement or any provision thereof shall not be interpreted as granting Contractor any exclusive rights in respect of the Manufacturing Outsourcing Services or any similar services outsourced by NICE, and shall not prevent NICE, at its sole discretion, from contracting with any third party for such services, subject to the provisions of this Agreement. Notwithstanding anything to the contrary in the Agreement or elsewhere, including NICE' confidentiality obligations towards Contractor, but without derogating from NICE' obligations hereunder, this Agreement shall in no way be construed as preventing NICE from performing the Manufacturing Outsourcing Services or part thereof by itself and/or through others, whether during the + + + + + + term of this Agreement or thereafter. + + 1.2. Contractor's obligations to execute the Manufacturing Outsourcing Services pursuant to this Agreement shall commence on the Effective Date, subject to the following provisions: + + 1.2.1. OUTSOURCING TRANSITION - NICE intends to outsource part of its manufacturing activities to the Contractor, in 3 phases: (1) Training and Authorization, (2) Relocation and (3) Manufacturing Outsourcing Services, as described in this Agreement. + + 1.2.2. INFRASTRUCTURE. For the execution of this Agreement and the Manufacturing Outsourcing Services, Contractor will set up and establish specific infrastructure including an exclusive area in its production facility as detailed herein. Contractor shall assemble its own workstations using its generic equipment and the Non Generic Equipment to be provided by NICE in good working order. The maintenance of the Non Generic Equipment and keeping it in good working order, except normal wear and tear, shall be Contractor's responsibility, at Contractor's expense. NICE shall have the right to object on reasonable grounds to any material change of the manufacturing facility for any Product. + + 1.2.3. RELOCATION- Contractor will complete the Relocation process including preparation of production lines + + 8 + + that will be able to ensure the production capacity according to NICE' forecasts as detailed herein. The completion of the Relocation stage shall be on time in order to enable compliance with the Forecast submitted to Contractor prior to signature of this Agreement and shall be subject to the Control of NICE, without relieving Contractor from its responsibilities hereunder. Upon NICE' approval that the Relocation stage has been completed to its satisfaction, which approval shall not be unreasonably withheld, the Contractor shall commence the Manufacturing Outsourcing Services. + + 1.2.4. RESOURCES, PERSONNEL, PROJECT MANAGER. Contractor will be responsible for the required resources in order to comply with its undertakings hereunder and to deliver the Manufacturing Outsourcing Services as detailed hereunder. Contractor will perform the Manufacturing Outsourcing Services using only skilled, qualified and experienced personnel to the extent required for the purpose of performing its undertakings pursuant to this Agreement, to be trained and authorized, according to NICE' requirements. Contractor shall not replace at its initiative key Personnel during the duration of this Agreement, to the extent such replacement shall materially impair its ability to perform in compliance herewith and any such replacement shall take place only after consultation with NICE. It is agreed for the purpose hereof, that frequent replacement of key personnel shall be deemed as materially impairing Contractor's ability to perform hereunder. NICE may reject on reasonable grounds any such key personnel employed by Contractor in the performance of its obligations hereunder, and they shall be replaced by Contractor promptly following NICE' first reasoned request. Such personnel shall abide by all of NICE' security, data protection and safety requirements and policies as indicated from time to time by NICE in writing according to Section 17.1. + + TheContractor will appoint a dedicated Project Manager who will coordinate with NICE' representative and serve as a single point of contact for NICE in all aspects pertaining to this Agreement. The project manager will not be replaced at Contractor's initiative during the duration of this Agreement to the extent such replacement shall + + 9 + + materially impair Contractors ability to perform in compliance herewith and any such replacement shall take place only after consultation with NICE. It is agreed for the purpose hereof, that frequent replacement of Contractor's Project Manager shall be deemed as materially impairing Contractor's ability to perform hereunder. The project manager will meet with NICE' representative on a regular basis. + + 1.2.5. CONTROL AND PLANNING. Without derogating from the aforesaid, Contractor will provide NICE with control capability of the production. NICE shall be entitled to be involved in the planning and establishment of the working environment for all Product lines at the Contractor's premises. Contractor will provide NICE with reports on a daily/ weekly/ monthly basis, as follows: the reports will present all relevant details regarding the production orders, time between phases, disassembled Products, schedules, logistics reports, etc. The reports provided will + + + + + + present all said data in a clear manner and will include graphic presentations. The reports will enable NICE to verify that all systems are matched and to verify the improvement that is achieved by Contractor. All said reports shall need to be agreed in advance by both Parties. + + 1.2.6. SUPERVISION AND MONITORING. NICE shall be entitled but not obligated, to supervise and monitor the execution of this Agreement from time to time as set forth herein. NICE shall be entitled, upon prior coordination, to visit any place where the Manufacturing Outsourcing Services are being performed including Contractor's plant/s and to review samples of components and Products. As a result of such supervision, NICE may propose improvements and increase in efficiency in the Manufacturing Outsourcing Services and the Parties will discuss such proposals and their affect on this Agreement. Without derogating from the generality of the aforementioned, any supervision and monitoring rights granted to NICE hereunder are merely intended to secure performance of this Agreement according to its terms and shall not relieve Contractor from its responsibilities hereunder according to this Agreement or impose any responsibility or liability upon NICE which is not explicitly detailed in this Agreement. + + 10 + + 1.2.7. MEASUREMENTS AND PROCEDURES. Contractor will execute all the production stages required for a Product according to NICE' Production File for the particular Product, included in the PDM System. + + 1.2.8. QUALITY ASSURANCE REQUIREMENTS. The Manufacturing Outsourcing Services performed by Contractor shall be executed according to and comply with all quality control requirements and specifications described in APPENDIX J. Without derogating from Contractor's responsibility as aforementioned, NICE reserves the right to execute quality assurance inspection on Contractor's premises, all as described in APPENDIX J and according to the terms hereof. + + 1.2.9. BACK-UP SITE. Contractor will ensure the availability of the Back-up Site according to the terms of this Agreement. Attached as APPENDIX G to this Agreement is the undertaking of Flextronics, Inc., North Carolina for a Back Up Site in North Carolina, USA and a transition plan for its operation. + + 1.2.10. STEERING COMMITTEE. The Parties will appoint a steering committee which shall monitor the execution of this Agreement, comprised of Contractor's project manager, NICE' representative, and relevant personnel of the Parties. + + 2. COMPONENTS PURCHASING, NICE COMPONENTS AND INVENTORY. + + 2.1. COMPONENTS PURCHASING. Upon transition to the third phase - Production, the Contractor will be responsible for all purchasing of components and getting equipped with all the materials necessary for the assembly of the Products (except the Non Generic Equipment). At NICE' request, and without derogating from any other provisions of this Agreement, Contractor shall promptly notify NICE, in writing, who are the suppliers of any specific components and under what agreements purchase is effected. + + 2.2. CONTRACTOR PURCHASE AGREEMENTS. Without derogating from the aforementioned, NICE may, at its sole discretion, decide to be involved and to actively or inactively, participate in negotiations and purchasing agreements of Contractor for components designated for production hereunder. In such event, Contractor will comply with NICE' requirements and instructions and contract accordingly, without imposing any liability on NICE, provided such instructions + + 11 + + are in accordance with common purchasing practice and in accordance with this Agreement. NICE may, at its election, instruct Contractor not to purchase a relevant component from a specific supplier, provided an alternative supplier exists. APPENDIX C shall be updated accordingly. At NICE' request, Contractor shall notify any relevant supplier that it is purchasing components for NICE Products and shall further furnish the supplier with information requested by such supplier. In any event, Contractor shall report to NICE on its purchasing negotiations and achievements and shall supply NICE, at NICE' request, with a copy of all relevant existing documentation. + + 2.3. FLEXTRONICS, INC. GLOBAL PURCHASE AGREEMENTS. Nevertheless, in the event that the purchase agreement is signed by Flextronics, Inc. as a global purchase agreement for the Flextronics group, and not as a local agreement of Contractor or as an agreement applying to NICE required components only, then NICE will not participate in the negotiations and will not be entitled to receive copies of such agreement/s. The details relevant to the components purchased under an agreement as above will be included + + + + + + in APPENDIX C and Contractor hereby declares and undertakes that the details included in APPENDIX C (as amended from time to time according to the provisions of this Agreement) shall be the accurate details from the Flextronics, Inc. global purchase agreements and components and sub assembly prices in APPENDIX C shall be net purchase prices of Contractor without any overhead or uplift. NICE shall be entitled, at its sole discretion, to object in advance to Contractor using any Flextronics, Inc. global purchase agreement and in such event, Contractor shall purchase the components separately, the provisions of Section 2.2. shall apply and APPENDIX C shall be updated accordingly. Contractor undertakes to comply with NICE' instructions and the manufacturer license terms regarding the use and duplication of Microsoft and other third party software supplied by NICE and not to use such software products for any purpose other than in the assembly of the Products. Contractor will copy from the master CD of those software products only the exact number of licenses designated by NICE in writing and for which a license has been issued by NICE. + + 2.4. NICE DESIGNATED COMPONENTS. NICE may request Contractor to purchase specific components from specific suppliers, provided that the terms of such suppliers are in accordance with common purchasing practices and APPENDIX C shall be updated accordingly. + + When purchasing components for Contractor's other customers, Contractor may not represent itself to the suppliers as a NICE outsourcer for the purposes of such purchase. + + 2.5. NICE SUPPLIED COMPONENTS. NICE may, at its election, supply to Contractor software licenses and software or the like for which NICE has an existing royalty agreement with a third party (except electrical and mechanical components unless agreed otherwise), in lieu of Contractor purchasing same ("NICE COMPONENTS"). All + + 12 + + such components will be delivered to Contractor in a mutually agreed package type, and in an agreed upon time and in agreed upon quantities. The parties will agree on the inventory level required by Contractor for each NICE Component and NICE' sole responsibility shall be to renew the inventory upon request. Contractor shall be responsible for ordering additional NICE Components if required above the inventory level and for ensuring that appropriate physical controls of such components are in place and properly administered. Contractor will not charge NICE any charges or overhead for such NICE Components. In the event Contractor has difficulty in purchasing any components which NICE can obtain and NICE has granted its consent to supply such component to Contractor in lieu of Contractor purchasing same, Contractor will not charge NICE any charges or overhead for such Components. + + 2.6. INVENTORY MANAGEMENT AND USE OF EXISTING INVENTORY. All purchasing of inventory, use of inventory, and management of inventory shall be performed by Contractor according to this Agreement, and APPENDIX C. + + 2.7. EXISTING NICE INVENTORY. Furthermore, Contractor will purchase from NICE its existing inventory of components available for use in Products for up to six (6) months on a rolling basis, as detailed in APPENDIX F, all of which will be transferred to Contractor's facility on the purchase date, all as detailed hereunder: On the Effective Date Contractor will purchase the inventory included in part I of APPENDIX F. Regarding the remainder of the inventory included in part II of APPENDIX F the following will apply: at the beginning of the first production Quarter hereunder Contractor will purchase the components required under the Forecast issued by NICE for that Quarter regardless of the Total Lead Time for such components; at the beginning of the second production Quarter hereunder Contractor will purchase the components required under the Forecast issued by NICE for that Quarter regardless of the Total Lead Time for such components; Contractor will purchase any components remaining in APPENDIX F after two Quarters as aforementioned, on a current basis as required under the Forecast issued by NICE for the following Quarters but in compliance with the Total Lead Time for such components. Contractor will use said NICE' inventory for the production of the Products rather than purchase such components from third parties, until full use of all NICE inventory. Contractor shall pay NICE the purchase price of such components, as set forth in APPENDIX C hereto, and under payment terms as set forth in Section 8.4. When sold to NICE as part of aProduct, the component prices paid by NICE to Contractor hereunder will be calculated with a reduced overhead of 2%. NICE will and does hereby provide Contractor with all such warranties with respect to the components sold thereby as is required from Contractor under this Agreement with respect to the same components. Furthermore, without derogating from NICE' undertakings hereunder, Contractor will use its international supply chain in order to assist NICE in selling its dead inventory, which is not included in APPENDIX F, and the proceeds from such sales will be shared as follows: 10% Contractor, 90% NICE. Contractor will report to NICE regularly, on such sales. + + + + + + 13 + + 2.8. COMPONENT END OF LIFE. Contractor shall take all necessary measures in order to receive immediate updates from its suppliers regarding end of life of any component (i.e types of components which shall no longer be manufactured). Contractor shall notify NICE immediately upon becoming aware of the event of end of life of a component. In such event, NICE shall designate and approve the replacement components to be used instead and the Parties will mutually agree on the required changes in APPENDIX C. + + 2.9. COMPONENTS FOR NICE INTERNAL REQUIREMENTS. Contractor will occasionally provide services in order to help NICE to obtain components for NICE' internal requirements. Contractor will allow NICE to purchase reasonable quantities from its available inventory at a price agreed in advance, and will help NICE to obtain components from manufacturers/suppliers at the lowest available price (in the case where the components in question are not in the Contractor's inventory). + + 2.10. It is clarified that nothing in this Agreement shall prevent NICE from contracting directly with Contractor's suppliers and vendors in any agreement, or from purchasing identical components, whether during this Agreement or following its termination or expiration. + + 3. ORDERING AND OTHER MATTERS + + 3.1. FORECASTS. NICE shall give Contractor a written forecast of the Products, by type, quantity and expected Due Date (the "FORECAST") as follows: A Forecast shall be a rolling forecast for the current Quarter and the two (2) consecutive Quarters, detailed by week. Upon the Effective Date, NICE shall deliver a Forecast for the period commencing on the expected completion of the Relocation Phase for the first Product, for the current Quarter and for the next coming two Quarters and so on thereafter during the term of this Agreement. The Forecast may be updated by NICE on a weekly basis, or more frequently (at NICE' discretion). + + A Forecast will not be deemed to constitute a binding purchase order with respect to Products (as opposed to components and sub-assemblies, as set forth in Sections 3.4, 16 and 17.5 of this Agreement). Contractor will manufacture the quantities of Products only according to specific orders and the Production Lead Time. The + + 14 + + Parties' responsibilities and undertakings arising from NICE' Forecast shall be according to APPENDIX C as amended from time to time according to the provisions of this Agreement. Liability reports will be submitted by Contractor on the 1st of each calendar month and will need to be approved by NICE. It is clarified for the avoidance of doubt, that in any event, any and all purchase obligations of NICE with respect to Products (as opposed to components and sub-assemblies) are limited in any given time during the term of this Agreement, to the PO's only. + + Contractor (with NICE' participation) will implement, at its own expense, a full process of Demand Flow Technology, including: (I) Product Synchronization; (II) Sequence of Events; (III) Mix Model; (IV) Demand of Capacity & Take Time; (V) Operations grouping; (VI) Line Design & Balancing. This process will help to determine the Sub Assembly Lead Time and the Production Lead Time. It is clarified that any change in the Production Lead Time detailed in this Agreement shall require NICE' prior written approval; any change in the Sub Assembly Lead Time detailed in this Agreement as a result of which the maximum Sub Assembly Lead Time for the relevant sub-assembly exceeds 30 Days, shall require NICE' prior written approval. + + 3.2. PURCHASE ORDERS AND ISSUING ORDERS. NICE shall, from time-to-time, issue to Contractor a Purchase Order, according to the Forecast, for Products, by type, quantity and Due Date, as and when it desires to order Products. PO's will be issued at least two (2) weeks prior to the designated Due Date. Each and every order will be entered in NICE' logistic system as a Sales Order. Every Product shall be manufactured according to the Production Lead Time. Commencement of assembly shall be based on Production Lead Times (as per Section A (xvii)) and calculated to meet NICE' delivery requirements. It is clarified that delivery and shipment of Products and NICE' obligation to pay for Products shall only be according to a PO. + + Purchase Orders for Products (and Forecasts for Products) may be delivered to Contractor by any reasonable means, including but not limited to e-mail, computerized systems, etc., postal delivery, courier delivery, facsimile transmission, as shall be notified by NICE in writing and in advance of any relevant PO. For the removal of doubt, a PO shall not be binding upon Contractor until Contractor has confirmed in writing receipt of the PO. Contractor shall, within two Business Days of its receipt of a Purchase Order, accept or reject such Purchase Order in writing; provided, however, that Contractor shall be obligated to + + + + + + accept all Purchase Orders issued in accordance with the terms hereof for Products with respect to which a price per the quantity ordered has been mutually agreed by the parties. Contractor undertakes that in the event of increase in Product requirements VIS-A-VIS the Forecast (i.e. issuance of PO's exceeding + + 15 + + the relevant Forecast), Contractor's manufacturing capacity can be increased, at any time, by thirty percent (30%) beyond the then current Forecast. In addition, in as much as purchase of components and purchase of sub assemblies are concerned, NICE may order Products, which are not included in the Forecast, and Contractor will make its best reasonable commercial efforts to accommodate such order in accordance with NICE' request. It is clarified that in any event Contractor will accept all PO's exceeding the Forecast, subject to updating the Due Date based upon the Total Lead Time for obtaining the required components, which are not available in Contractor's inventory. The Due Date for such PO's will be determined according to the time of obtaining the components. For components/Products the prices for which are not previously agreed under APPENDIX C, the price will be agreed in writing prior to acceptance of the PO. + + 3.3. FORECAST REVIEW. The parties shall hold weekly meetings, in person, at NICE' facility or by conference phone call, for the purpose of discussing NICE' existing and contemplated Forecasts and order requirements and updating the Forecast; provided, however, only written Forecasts and Purchase Orders, or written modifications thereto, shall bind NICE and Contractor pursuant to the terms of this Agreement or otherwise. The parties, as business requirements dictate, may mutually agree upon the use of blanket purchase orders for specific sub-assemblies or components (exceeding the requirements under Forecasts), subject to the terms of this Agreement and such sub-assemblies or components purchased shall be deemed Permitted Components. + + 3.4. PERMITTED COMPONENTS. Contractor may make purchase commitments to suppliers and assemble components to sub-assemblies based upon the Forecasts received from NICE but subject always to the Total Lead Time, Liability and ABC policies of Contractor (which NICE will be entitled to review and comment on in advance of the relevant purchase). Contractor shall maintain inventory of Permitted Components (as defined below) for use during the Production Lead Time. NICE shall only be obligated to Contractor for components and sub-assemblies ordered and assembled by Contractor, in accordance with the Forecast and in compliance always with the Total Lead Time as detailed in APPENDIX C (as amended from time to time according to this Agreement) or otherwise for inventory of components purchased from NICE under Sections 2.7 or 3.4(A), or purchased in accordance with POs, ECO's or Change Orders ("PERMITTED Components"), as detailed hereunder. It is clarified that any Forecast updated following the purchase of Permitted Components will not affect their definition as Permitted Components, and NICE' obligations with respect thereto, subject to the Liability. + + 3.4(A) PURCHASE OF INVENTORY BY NICE. + + 16 + + NICE will purchase from Contractor inventory of Permitted Components not required (in whole or in part) according to the Forecast for the Quarter immediately following the time at which such inventory is reviewed as detailed below (hereinafter: the "FIRST QUARTER") as detailed below. The following terms shall have the definitions ascribed thereto: + + (i) DEAD INVENTORY - Permitted Components, the entire quantity of which is not required for assembly of Products in accordance with the Forecast. + + (ii) SLOW MOVING INVENTORY - Permitted Components, which are required for assembly of Products for the two consecutive Quarters commencing immediately after the First Quarter, in accordance with the Forecast. + + (iii) EXCESS INVENTORY - Permitted Components, which are required for assembly of Products only during the third Quarter after the First Quarter or thereafter, in accordance with the Forecast. + + Three (3) days before the beginning of every Quarter, Contractor will issue a report of Dead, Slow Moving and Excess Inventory, and shall detail the price of each Permitted Component included in the report as specified in APPENDIX C, which report will need to be verified by NICE within 2-3 days. Inthe event that in any Quarter, the Dead Inventory, Excess Inventory and Slow Moving Inventory together exceed 15% of the Monthly Consideration (as defined below), NICE will purchase such inventory exceeding 15% from Contractor one day before the beginning of the First Quarter, by payment of the price detailed in APPENDIX C + + + + + + including a surcharge of 4%. In calculating and determining the inventory falling within the said 15% (which shall not be purchased by NICE) the following priority shall apply: first - all Slow Moving Inventory, second (if not all 15% were covered) - all Excess Inventory, third (if not all 15% were covered) - Dead Inventory. The "MONTHLY CONSIDERATION" for the purpose hereof shall mean the total actual price due to Contractor from NICE hereunder for all Products during the preceding Quarter, divided by three (3). + + The foregoing shall apply only as of Q3 2002 - July 1st 2002 (the first report of inventory as above shall be issued at the end of June 2002), and thereafter on a regular basis. + + In the event NICE has purchased any Permitted Component from Contractor as detailed above, Contractor is obligated to repurchase such Permitted Component for production of the next Forecast which requires such Permitted Component in accordance with the relevant procedure of Section 2.7 above (Nice Existing Inventory), at the price sold to NICE by Contractor excluding the surcharge of 4%. + + No other compensation or components protection will be provided by NICE except as explicitly detailed above or in Sections 16.7, 16.8 and 17.5 of this Agreement. Upon + + 17 + + payment of the aforementioned compensation for Permitted Components, such items shall become the property of NICE, and will be promptly delivered to NICE' facility in Israel, and, at NICE' election and expense, shall be delivered to another location in Israel identified to Contractor by NICE or, at NICE' direction, disposed of by Contractor (in any manner selected by Contractor). In any event, Contractor will make best reasonable commercial efforts to decrease levels of inventory of Permitted Components, by agreeing with its suppliers to decrease Purchase Lead Times to 1 - 2 weeks at the most. + + 3.5. CHANGE ORDERS. Throughout all the assembly phases of a Product during the Production Lead Time and any time before the Due Date, NICE may issue Contractor with a Change Order. The issuance of such Change Order and the execution by Contractor of such Change Order, shall be in accordance with the provisions hereunder. Upon issuance of a Change Order, Contractor will immediately execute it and the Product price shall change in accordance with APPENDIX C. The sole implication of a Change Order will be payment for additional direct labor costs as detailed in APPENDIX C. Replaced components and sub-assemblies will be returned to Contractor's inventory at no charge to NICE (without derogating from the specific provisions of this Agreement under which NICE is obligated to purchase Permitted Components). The Product price will be as after the implementation of the Change Order. For Change Orders issued prior to commencement of the Production Lead Time for any Product no charge will be incurred by NICE. Without derogating from the aforementioned, Contractor will not charge NICE for Change Orders during the first three (3) months of production. + + 3.6. RESCHEDULING OF RELEASED ORDERS. NICE may, at its discretion, reschedule delivery of units of Products for which a PO has already been issued, by shortening the Due Date, without any implication. In this respect, Contractor is aware that by the last three weeks of every calendar Quarter, a high level of flexibility is required to meet NICE' end of Quarter requirements. Contractor will perform its best reasonable commercial efforts to complete such rescheduled Products at the new requested Due Date. All such rescheduling shall be performed by sending Contractor a written request for rescheduling. + + 3.7. ORDERS ON HOLD. Prior to the Due Date, NICE may, at its discretion, place Products manufactured according to PO's on hold for a period not to exceed thirty (30) Days from the Due Date, without any implications, by giving a written notice to Contractor. Upon termination of such 30 Day period or earlier if requested by NICE in writing, the Products on hold will be deemed as cancelled and the provisions of Section 3.8 below shall apply. + + 3.8. CANCELLATION OF PURCHASE ORDERS. NICE may at its discretion, at any time, cancel, in whole or in part, PO's of Products issued + + 18 + + pursuant to this Agreement subject to the delivery of prior written notice, before the respective Due Date. Contractor, upon receipt of such written notice of cancellation, shall stop work on such units of Products if work has already commenced. Without derogating from any liability to pay for Permitted Components as set forth elsewhere in specific provisions this Agreement, NICE shall have no liability for cancellation of a PO prior to the Production Lead Time of the Product. For cancellation of a PO during the Production Lead Time and until the Due Date, NICE' liability for cancellation shall be limited to the following: + + + + + + 3.8.1. Payment of a fixed cancellation charge for all cancelled units of Products as specified in APPENDIX C. The fixed cancellation charge will be recalculated at the end of the first Quarter, based on the actual average time to disassemble a Product, as determined by Contractor and agreed to by NICE; + + 3.8.2. All the components/sub-assemblies will be returned to Contractor's inventory at no charge to NICE subject to and in accordance with the terms of this Agreement. + + 3.8.3. NICE shall not be responsible and shall not pay, in whole or in part, for Products manufactured outside the agreed Production Lead Time and/or without a written NICE Purchase Order. + + 3.9. Contractor shall use its best reasonable commercial efforts to minimize Change Order charges and cancellation charges by returning components for credit (with NICE' approval), canceling components on order and applying components to other Contractor projects (when possible, at the sole discretion of Contractor) and minimizing all work-in-process. + + 3.10. ENGINEERING CHANGE REQUESTS (ECR'S). NICE shall be entitled, at its sole discretion, from time to time to request any Engineering Change Requests for any Product and Contractor is obligated to propose ECR's to NICE when applicable at Contractor's opinion. Contractor will respond to all Engineering Change Requests initiated by NICE, according to the terms hereof. Contractor will give NICE written notice, within three (3) Business Days of receiving written notice of such ECR, of the date by which, and at what cost, such ECR could be implemented based on the pricing formula in APPENDIX C, and how the ECR effects existing PO's. Contractor will charge NICE for ECR's in accordance with APPENDIX C (an administrative cost of $25 per ECR of whatever size). + + 3.11. ENGINEERING CHANGE ORDERS (ECO'S). NICE may, at its discretion, issue ECO's based on Contractor's response to the ECR's or based on negotiated changes to Contractor's response. The administrative cost for an ECO shall be $50 per ECO. Engineering Change Orders effective dates (the date for completion of implementation + + 19 + + of the ECO) shall be as agreed to by the parties and shall effect the relevant Lead Times and dates accordingly, as detailed in the ECO. Contractor shall approve every ECO issued as above within 2 Business Days. An ECO shall become binding on Contractor upon written confirmation of receipt thereby. Contractor shall not make any design changes or any other changes in the Products without the prior written consent of NICE as reflected in an ECO. The new Product price due to an Engineering Change Order, shall be determined in accordance with APPENDIX C. Contractor shall make all reasonable commercial efforts to minimize costs due to ECO's. Notwithstanding the aforementioned in Sections 3.10. and 3.11., NICE shall not be charged for the first $1,000 due to Contractor in any one month for ECR's and ECO's. + + 3.12. DISASSEMBLY OF PRODUCTS. From time to time, NICE may order Contractor to disassemble Products after the Due Date. Upon such request issued to Contractor, it shall promptly comply with the request. Dismantled components will be consigned to Contractor's inventory and stored in a special warehouse at Contractor's facility, at no charge to NICE (the "RETURNED COMPONENTS"). NICE will pay Contractor the original Product price and also a fixed fee for dismantling as detailed in APPENDIX C. Thereafter, Contractor will use the Returned Components first in the assembly of any Products until no inventory of Returned Components remains. Contractor will not charge NICE for any surcharge or overhead for use of Returned Components in a Product. + + 3.13. SPARE PART MECHANISM. In addition to producing Products hereunder, and in addition to Contractor's responsibilities under its warranty obligation hereunder which are included in the Product price as provided herein, Contractor will supply Spare Parts to Customers upon request, as detailed in APPENDIX I according to the applicable Production Lead Time. The price for spare parts shall be in accordance with APPENDIX C and shall be paid by NICE in accordance herewith. + + 4. SCOPE; NEW PRODUCTS + + 4.1. The scope of this Agreement refers to the Products currently detailed in APPENDIX A subject to the provisions of APPENDIX K. The Manufacturing Outsourcing Services will be performed by Contractor on a gradual basis as detailed hereinabove, and until full performance of the Manufacturing Outsourcing Services by Contractor for all Products. + + 4.2. Quotations by Contractor for new Products will be developed by NICE in coordination with Contractor subject to the mutually agreed upon pricing model set forth in APPENDIX C hereto. Other terms applicable to new Products shall be identical to those applicable to the current Products. Each such quotation requested + + + + + + by NICE shall be provided to NICE on an expeditious basis. Contractor shall develop a mutually agreeable quality program for each new Product. The provisions of APPENDIX K - NICE Systems Products Release Policy will apply to such new Products subject to the terms hereof. + +5. DUE DATE + + 20 + + 5.1. Contractor shall target 100% on time delivery in compliance with the Due Date. Contractor's performance regarding the Due Date shall constitute a material obligation, and is an essential element in this Agreement. + + 5.2. DELAYS. Immediately upon learning of any possible delays, Contractor will notify NICE as to the cause and extent of such delay. Contractor shall at once, exercise its best reasonable commercial measures to minimize the possible delay, at no additional cost to NICE. Such measures may include, inter alia, acceleration of payments to Contractor's vendors if necessary. + + 5.3. LIQUIDATED DAMAGES. Any delay from the Due Date of a certain Product in a certain Quarter, not due to a specific written request by NICE or otherwise deriving from a breach of NICE' undertakings hereunder and only to the extent deriving from such breach by NICE, or caused by an event of Force Majeure, and subject to the terms hereof, shall be considered a material breach of Contractor's obligations under this Agreement and shall entitle NICE to the following liquidated damages in addition to any remedy available to NICE under this Agreement or by law: + + 5.3.1. One percent (1%) of the Product Price for a delay of 3 to 5 Days. + + 5.3.2. Three percent (3%) of the Product Price for a delay of up to 10 Days. + + 5.3.3. Five percent (5%) of the Product Price for a delay of 11 Days or more. + + 5.3.4. For the removal of doubt, when determining the liquidated damages due, the applicable sub-section 5.3.1, 5.3.2 OR 5.3.3 will apply. In any event, the total liquidated damages as per this Section shall not exceed 5% of the Product Price. + + 5.3.5 The "PRODUCT PRICE" for the purpose of this Section 5.3. shall mean the total consideration which is due to Contractor for the Products being delayed at the relevant time. + + 5.3.6. In the event that following the delay, Contractor is in compliance with the Due Dates for two immediately consecutive Quarters and there is no delay whatsoever, Contractor will be reimbursed by NICE for liquidated damages already paid for delay in the previous Quarter (before the said 2 Quarters), if paid, without derogating from the previous delay being regarded as a breach hereunder. + + 5.3.7 NO RESPONSIBILITY FOR DUE DATE. Notwithstanding the aforementioned, Contractor shall be relived from its responsibility for the Due Date of any specific Product if all the following terms are met: + + (1) Contractor notifies Nice promptly in writing of the delay and the detailed reasons for the delay; + + (2) Contractor proves that such delay was caused by a worldwide event of component allocation or a worldwide event of Force Majeure (as defined in this Agreement) applying to a manufacturer of necessary components required for assembly of the Product and such components can not be purchased from another manufacturer, since the manufacturer with which Contractor has contracted (directly or through suppliers) is a single source manufacturer worldwide or, if there is more than one source - the above applies to all of them; + + 21 + + (3) Contractor proves, that it has employed all necessary measures, both upon contracting with the supplier (including but not limited to - contracting other suppliers) and after becoming aware of the delay, in order to ensure proper timely delivery by such supplier and in accordance with the agreed Purchase Lead Time in this Agreement; + + (4) Contractor takes all required actions in order to minimize the effects of such occurrence and solve it. + +6. SHIPMENT DATE, PACKING AND SHIPPING + + + + + + 6.1. PACKING. Contractor shall package each unit of Product according to the standard NICE packing procedure and specifications in accordance with the PDM System, or, if not specified by NICE, according to good commercial standards. Every shipment to a NICE Customer must include a Packing List issued by the Contractor, attached to the packed Product. The Packing List is derived from the Purchase Order and includes all the packed items in the carton and all software licenses associated with the Product. + + 6.2. PREPARATION OF EXPORT SHIPMENTS. Contractor will be responsible for preparing the shipment of the final Product to the Customer by arranging the pallets and packing them according to NICE' instructions as set forth in the PDM System. + + 6.3. DELIVERY. Unless agreed otherwise in the future, Contractor will deliver finished Products to NICE' designated freight forwarder, at Contractor's premises. + + 6.4. SHIPMENT DATES. The following Shipment dates shall apply: Shipment plans that Contractor receives until 13:00, will be ready until the end of the same Day (except that on weekend days prior coordination will be required); Shipment plans that Contractor receives after 13:00, will be ready until the end of the next Day (except that on weekend days prior coordination will be required). + + Contractor's performance regarding the Shipment Date shall constitute a material obligation, and is an essential element in this Agreement. + + 6.5. INSPECTION. Products will be subject to inspection by NICE, or by certified NICE' distributors according to the following provisions, both prior to the Shipment Date while they are in the finished goods warehouse and after the Shipment Date. During the inspection, NICE may open cartons and boxes and unpack the contents for inspection. An inspection will be coordinated if possible. NICE may inform the Contractor if there is any mismatch in Product quantities or if any damage was caused to the shipment prior to delivery to NICE' freight forwarder in Contractor's facility. In case of a quantity mismatch between the quantity recorded on the packing documents and the actual quantity received, NICE will notify Contractor + + 22 + + of the mismatch, and, subject to verification by Contractor, Contractor will complete the missing quantity. In case where a shipment is found damaged prior to delivery to NICE' freight forwarder at Contractor's facility, the Contractor will replace or repair the Product and deliver it back to such NICE' freight forwarder at Contractor's facility, at Contractor's expense. If there was no mismatch in quantities or no damage to the shipment (as applicable), NICE will bear all risk and costs associated with the delivery of shipment to Contractor and back. + +7. [DELETED] + +8. PAYMENTS + + 8.1. Initial prices as proposed in the Proposal are set out in APPENDIX C. Within one month from signature of this Agreement, the parties will amend the initial APPENDIX C according to components purchase prices and supplier agreements obtained by Contractor, but in no event will the relevant data exceed the data included in the initial APPENDIX C, except with respect to components sold to Contractor by NICE according to APPENDIX F and Section 2.7, or further to changes in APPENDIX C made pursuant to NICE' instructions under Sections 2.2, 2.3 or 2.4 of this Agreement. Contractor will use reasonable commercial efforts to improve the particulars in APPENDIX C and, amongst others, shorten Liability. In the event of lack of agreement on the amended APPENDIX C within one month from the signature date, the initial Appendix C shall continue to apply until agreed otherwise. It is clarified that labor prices in APPENDIX C will not be amended as aforementioned regarding components. Contractor hereby declares and undertakes that the details included in APPENDIX C(as amended from time to time according to the provisions of this Agreement) shall be the accurate details from all of the relevant purchase agreements of Contractor with its suppliers and components and sub assembly prices in APPENDIX C shall be net purchase prices by Contractor without any overhead or uplift. Thereafter, prices may be decreased or increased according to the formula and at the timetables detailed herein below. + + 8.2. COST ADJUSTMENTS. Product pricing shall remain firm for Products for each Quarter, except as follows or as set forth in Sections, 2.2, 2.3, 2.4, 3.5, 3.8, 3.11, 8.1, 8.3, and hereunder in the various subsections of Section 8.2: + + 8.2.1. The quoted cost of all components and sub-assemblies in each Product subject to this Agreement is or will be set forth in APPENDIX C or an agreed written amendment thereto. + + 8.2.2. NICE and Contractor shall continually work to introduce + + + + + + new cost reduction methods. + + 23 + + Contractor shall make its best reasonable commercial efforts to reduce the cost of manufacturing Products, by methods such as elimination of components, obtaining alternate sources of materials, redefinition of specifications, and improved assembly or test methods, subject to NICE' written approval. Upon implementation of such methods initiated by Contractor, Contractor will enjoy one hundred percent (100%) of the cost reduction during the first Quarter and thereafter will reduce the price accordingly so that NICE will enjoy one hundred percent (100%) of the cost reduction. NICE will immediately enjoy one hundred percent (100%) of the cost reduction upon implementation of such methods initiated by NICE. + + 8.2.3. In the event there is a decrease in the cost of a component or sub-assembly purchased by Contractor for the purposes hereof, which affects the purchase price of such Product, Contractor shall document such decrease in costs and provide such information to NICE in writing, in reasonable detail, within three (3) Business Days of Contractor becoming aware of such decrease. + + 8.2.4. In case of a decrease as aforementioned, the purchase prices in APPENDIX C for units of the affected Product shall be adjusted accordingly. + + 8.2.5. In the event there is an increase in the cost of a Permitted Component purchased/to be purchased by Contractor for the purposes hereof, which affects the purchase price of such Product, Contractor shall provide NICE with copies of letters as elaborated below, together with a request for a "price increase" within one (1) Business Days of Contractor becoming aware of such increase. Contractor shall not purchase any such component until NICE approves it in writing. NICE shall approve/disapprove on the same Business Day it was notified by Contractor provided notice was received by 12:00. However, NICE may only reject a price increase if it can show that the Permitted Component is available at the a lower price. There are two permitted types of price increases: + + (i) TEMPORARY PRICE INCREASE designated to meet the requested Due Date, in the event of receiving a Purchase Order/Forecast for which the Purchase Lead Time is shorter than the normal Purchase Lead Time of the relevant components detailed in APPENDIX C or due to an Engineering Change Order which affects the Due Date. Contractor shall provide NICE with copies of letters of approach to at least 3 suppliers that are known in the market and accepted commonly (if 3 suppliers exist for such component) and their response. In such event, NICE will pay Contractor the difference between the original price and the actual price for those components purchased after the increase. + + 24 + + (ii) CONSTANT PRICE INCREASE caused by a change in the market trend. Market trend increase requests will be explained by providing NICE with copies of letters of approach to at least 3 suppliers that are known in the market and accepted commonly (if 3 suppliers exist), and their response. NICE will pay Contractor the difference between the original price and the actual price for those components purchased after the increase within the Quarter, and thereafter APPENDIX C shall be updated accordingly. + + 8.3. COST REVIEW. During each calendar Quarter, no later than the third week of the Quarter, the parties will jointly review the costs, costs reduction, volume performance of Contractor and NICE, respectively, and other performance parameters to be mutually agreed upon by the parties. The pricing and other details referenced in APPENDIX C shall be jointly reviewed by the parties at an agreed upon frequency and may be modified with the mutual written agreement of the parties. + + 8.4. PAYMENT TERMS. + + 8.4.1. Payment by NICE is due current thirty (30) Days from the date of receipt of the invoice, on the 2nd or 16th of the month, whichever is following the invoice date and may be made by check or wire transfer. Purchase Orders, invoices and payments will be presented and effected in US dollars. + + 8.4.2. Dates of issuance of invoices by Contractor: 1. for Products - upon the actual Due Date of Products. 2. for inventory of Permitted Components - one day before the beginning of the First Quarter as defined in Section 3.4(A). 3. for amounts outstanding upon termination according to the + + + + + + relevant provisions of this Agreement - upon termination. 4. for other amounts - upon the date on which the payment becomes due under this Agreement. + + 8.4.3. Payment by Contractor is due current thirty (30) Days from the date of receipt of the invoice, except as set forth in Section 8.4.4(2) below, and may be made by check or wire transfer. Invoices and payments will be presented and effected in US dollars. + + 25 + + 8.4.4. Dates of issuance of invoices by NICE: 1. for inventory of Permitted Components repurchased - at the end of the month in which such components were repurchased by Contractor. 2. for NICE existing inventory purchased by Contractor according to Section 2.7 - upon commencement of the first production Quarter with respect to inventory to be purchased on such date, upon the commencement of the second production Quarter with respect to inventory to be purchased on such date, and the remainder upon the relevant Purchase Lead Times for each component. The payment of said invoices will be made on a current thirty basis from the date of use of such inventory by Contractor based on the most updated Forecast. 3. For Permitted Components purchased from Contractor according to Section 3.4.(A) - upon the relevant Purchase Lead Times for each component. 4. For other amounts - upon the date on which the payment becomes due under this Agreement. + + 8.5. TAXES. Each party shall deduct such taxes from the payments due to the other party hereunder as required by law including withholding taxes (unless an exemption is provided), and shall promptly furnish such other party with appropriate tax receipts. Each party will be solely responsible for any and all taxes imposed thereon, including, without limitation, all income taxes, sales taxes, goods and services taxes. Israel value added tax shall be added, if applicable, to all amounts payable hereunder and will be paid against submission of appropriate tax invoices. + + 8.6. The consideration detailed in the Agreement is the full and entire consideration due to Contractor for the services stipulated hereunder and Contractor shall not be entitled to any other payment or reimbursement of expenses of any kind with respect thereto. + +9. REPRESENTATIONS AND WARRANTIES + + 9.1. Contractor hereby warrants to NICE that it has the full corporate power and authority to enter into this Agreement and to perform its obligations hereunder; that no impediment exists to Contractor entering into this Agreement, and no other agreement has been or will be made with any third party which will have a detrimental effect on Contractor's ability to fulfill its obligations under this Agreement. + + 9.2. Contractor hereby warrants to NICE that it has ascertained the nature of the Manufacturing Outsourcing Services and its own ability to perform such Manufacturing Outsourcing Services, and that all Manufacturing Outsourcing Services provided by Contractor hereunder will be performed in a professional and workmanlike manner by a sufficient number of individuals with appropriate skills and training for the applicable task using systems and processes which are sufficient to accomplish the Contractor performance + + 26 + + obligations under this Agreement. In addition, without derogating from any undertaking, warranty or representation of NICE included in the Agreement, Contractor acknowledges and agrees that prior to the entering into this Agreement it has had the ability to perform a due diligence investigation into the manufacturing, production, testing and delivery as performed by NICE up to and including the date hereof, that it has in fact performed such an investigation and that based upon the outcome thereof, it believes that it has the professional and other capabilities to perform the Manufacturing Outsourcing Services as set forth herein in a professional and workmanlike manner. + + 9.3. Contractor further warrants that it is duly licensed, authorized, or qualified to do business and in good standing in every jurisdiction in which a license, authorization, or qualification is required for the ownership or leasing of its assets, of the transactions of business of the character transacted by it except where the failure to be so licensed, authorized, or qualified would not have a material adverse effect on Contractor's ability to fulfill is obligations under this Agreement. + + 9.4. PRODUCT WARRANTY. Contractor warrants to NICE that each of the Products manufactured, configured or tested by Contractor will have been manufactured, configured and tested in conformance with the Specifications therefor as provided by NICE and be free from defects in workmanship or material for the Warranty Period. It is + + + + + + clarified for the avoidance of doubt, that the aforesaid warranty of Contractor for the Products applies to the entire Product, including components and workmanship, except when the defect or malfunction results from the design, NICE Software or the Nice Components supplied by NICE under this Agreement if Contractor cannot obtain warranty service for same from the supplier (and Contractor shall notify NICE accordingly), for which NICE shall be responsible. + + 9.5. Contractor shall be responsible for procurement of components as set forth herein, inspection of components, and safe handling of the components while in-house at Contractor's premises. + + 9.6. RMA. Should a Product fail to be in conformity with the above warranties during the Warranty Period, NICE shall deliver the Product to Contractor at its expense, Contractor shall repair or replace the Product at no charge (as set forth in Section 9.7 below), and will cover all shipment and delivery costs of therepaired or replaced Product from Contractor's facility to NICE' Customer location (whether in Israel or abroad). In the case that the determination according to Section 9.9 below, is that Contractor's warranty hereunder does not apply, NICE will bare all shipment and delivery costs of the Product/s and their return, and of any repair/replacement costs if requested by NICE, according to APPENDIX C. Detailed procedures to be executed by Contractor concerning the repair of defective/malfunctioning Products subject to the warranty hereunder are included in APPENDIX N - Return Material Authorization ("RMA"). + + 27 + + 9.7. WARRANTY SERVICE. Contractor shall replace any such Product with a new Product except when the defect is in the NICE proprietary boards, in which case Contractor may repair the Product. Contractor will deliver the repaired or replacement unit to NICE, within seven (7) Days of Contractor's receipt of such Product or parts thereof. NICE may require a shorter repair and replacement time for up to ten percent (10%) of the returned Products for warranty service, and Contractor shall use its best reasonable commercial efforts to accommodate same. + + NICE shall provide Contractor a spares forecast for warranty requirements for the period up and until July 1, 2002. If during such period, the spare parts required for warranty service alone exceed the spares forecast provided by NICE, NICE shall sell Contractor the missing spares at the prices specified in APPENDIX C. Nevertheless, NICE shall have no liability in the event the spares forecast exceeds the actual spares used during that period. As of July 1, 2002 purchasing of spares in order to comply with the warranty obligations shall be the sole responsibility of Contractor and no forecast shall be provided. + + On or about July 1, 2002 the parties will review the said 7 days timetable, and any changes in such timetable shall need to be agreed in advance in writing, both Parties acting reasonably and in good faith. Nothing contained in the foregoing shall obligate NICE to change such warranty timetable since its Customer obligations are dependent on it. + + The units of Products for which action may be required under this warranty shall be returned to Contractor's manufacturing facility, at NICE' expense, with an accompanying Contractor supplied RMA and correction / replacement time shall commence upon return of the defective Product to Contractor's facility. The RMA will include a packing slip only and will not include an invoice. + + 9.8. ADVANCED RMA. From time to time, NICE may request that the Contractor supply RMA to NICE Customers prior to receipt by Contractor of the failed Products. In such event, replacement time shall be 7 Days of receipt of the RMA and NICE will be responsible for the return of the failed Product or parts thereof, respectively, to the Contractor within sixty (60) Days from the delivery of the said RMA. If the failed Product is not returned within same period, Contractor shall invoice NICE for the replaced Product supplied. + + 9.9. DETERMINING DEFECT SOURCE. NICE and Contractor will use their best commercial efforts to determine whether a defect in a unit of Product exists and the reason for such defect. In the event of dispute + + 28 + + whether the source of a defect is subject to Contractor's warranty as detailed in Section 9.4, the parties will assign a joint MRB (Material Review Board) team to determine the source of defect, whose decisions must be mutually agreed to by both parties. NICE shall perform any investigation/examination reasonably requested by Contractor. In the event that the joint MRB team can not reach a mutually agreed decision, Contractor shall be deemed responsible for the warranty repair or replacement, unless Contractor proves otherwise, and NICE shall supply Contractor with all necessary information to assist in + + + + + + such determination. It is clarified that in the event of a dispute as aforementioned regarding the source of a defect, Contractor shall, nevertheless, continue its warranty obligations in a timely manner and will not withhold delivery of repaired and replaced Products, but may demand further investigation by the MRB team as above. + + 9.10. WARRANTIES PROVIDED BY THIRD PARTIES. If and to the extent warranties provided by third parties for components or sub-assemblies (forming an integral part of the defective Product sold to NICE hereunder) that Contractor/anyone on its behalf purchases under this Agreement, exceed the Warranty Period hereunder, Contractor shall ensure that NICE will benefit from such warranties included in agreements with suppliers as detailed in Section 2.2 above and use its best reasonable commercial efforts so that NICE may benefit from such warranties included in agreements with suppliers as detailed in Section 2 above, at Contractors' expense. Contractor will cooperate with NICE in its efforts to exercise its rights under such warranties for their entire duration. The aforementioned shall apply both during and after the term of this Agreement. + + 9.11 POST-WARRANTY RMA. Contractor shall provide post-Warranty RMA services to NICE in accordance with the procedures in APPENDIX N and the prices in APPENDIX C. + +9A. NICE REPRESENTATIONS AND WARRANTIES + + 9A.1. NICE hereby warrants to Contractor that it has the full corporate power and authority to enter into this Agreement and to perform its obligations hereunder; that no impediment exists to NICE entering into this Agreement, and no other agreement has been or will be made with any third party which will have a detrimental effect on NICE' ability to fulfill its obligations under this Agreement. + + 9A.2 NICE hereby warrants to Contractor that it has the financial ability to perform its obligations under this Agreement. + + 29 + +10. AUDIT AND ACCESS + + 10.1. REPORTS. Contractor shall provide to NICE periodical reports in the format acceptable by NICE and agreed by Contractor, which shall be submitted each week, unless agreed otherwise in writing. In addition, NICE may request other reports pertaining to the Outsourcing Manufacturing Services and Contractor will promptly comply with such requests, to the extent reasonable. + + 10.2. GENERAL. NICE shall have the rights to conduct audits of the Manufacturing Outsourcing Services and related facilities, systems, and records as set forth in this Section 10 for the purpose of auditing Contractor's compliance with the provisions of this Agreement, all subject to the limitations below. The audits shall include the physical equipment designated for the Manufacturing Outsourcing Services provided hereunder, the facility at Contractors' premises designated for the Manufacturing Outsourcing Services including the finished goods warehouse, the inventory designated for the Manufacturing Outsourcing Services provided hereunder and any records, supporting documentation, equipment and information pertaining solely to NICE and this Agreement, provided that with regard to records pertaining to inventory/components, in addition to the particulars detailed in Sections 2.2 and 2.3, NICE will have access to the ERP system at Contractor's facility only (including for the avoidance of doubt, the modules of the ERP system dealing with invoices and invoicing). No documents or data of any kind, or any copies, may be removed from Contractor's facility and all audits shall be performed within such facility only. + + 10.3. Such audits are expected to occur frequently given the significant security and business practices concerns inherent in the Manufacturing Outsourcing Services and NICE shall have the sole discretion, not to be unreasonably applied, to determine the frequency. NICE agrees to conduct the audits in a reasonable manner so as not to cause undue disruption to Contractor's provision of the Manufacturing Outsourcing Services and such audits shall be conducted during business hours, and shall be coordinated with Contractor. In the course of such audits Contractor shall provide, and shall cause its Permitted Subcontractors to provide, such auditors any reasonable assistance that they may require. Such reasonable assistance shall be provided as part of the Manufacturing Outsourcing Services. + + 10.4. If any audit by an auditor designated by NICE results in Contractor being notified that it or its Permitted Subcontractors are not in compliance with any law or regulation, Contractor shall, and shall cause its Permitted Subcontractors to, take actions to comply with such law or regulation, at Contractor's or its Permitted Subcontractor's expense. + + 30 + + 10.5. RESULTS OF AUDITS. If, as a result of an audit, NICE determines that Contractor has undercharged or overcharged NICE, NICE shall notify Contractor in writing of the amount of such undercharge or overcharge, + + + + + + and shall specify the relevant data and the reasoning for its determination. If Contractor agrees in writing, an appropriate adjustment shall promptly be paid to NICE or Contractor. In the event Contractor believes that it has complied with the relevant law, regulation or this Agreement, and has not overcharged or undercharged NICE, it shall so notify NICE in writing upon receipt of NICE' audit results shall specify the relevant data and the reasoning for its determination and the parties will attempt to determine the issue in mutual consent. + + 10.6. CONTRACTOR RECORD RETENTION AND ACCESS. As part of the Manufacturing Outsourcing Services, Contractor shall (1) retain records and supporting documentation detailed in Section 10.2 above if and to the extent such record retention is required by tax or similar authorities, and/or exists in the ERP system, and/or is common practice in the industry, including but not limited to - production files for the following periods: 7 years for records required by tax or similar authorities and ERP data, 3 years for production files, otherwise as required by law or as is the common practice, and (2) upon notice of no less than five (5) Days from NICE, provide NICE and its designees with reasonable access to such records and documentation for the purpose of conducting NICE' business and reporting. Such access shall only be provided to audit personnel who have signed towards Contractor a non-disclosure undertaking incorporating terms which are substantially the same as those in APPENDIX E. + + 10.7 All audits of all kind by NICE shall be subject to the confidentiality obligations of NICE to Contractor detailed in this Agreement. + +11. SAFETY AND SECURITY, FACILITIES, NON-GENERIC EQUIPMENT + + 11.1. SAFETY AND SECURITY. Contractor shall maintain and observe, at its premises, all the safety and security requirements detailed in APPENDIX H and ascribed by law. + + 11.2. SECURITY SERVICES. Contractor shall institute, maintain, and monitor security services for all Manufacturing Outsourcing Services in accordance with APPENDIX H. + + Contractor's security procedures shall be subject to audit as set forth in Section 10. + + 11.3. FACILITY. Contractor's facility at which the Manufacturing Outsourcing Services will be performed shall comply, at a minimum, with the requirements set forth in APPENDIX H. + + 31 + + 11.4. APPROVAL OF LOCATION. NICE shall have the right to approve or disqualify each location at which Contractor is providing any of its services hereunder. Contractor agrees that the Manufacturing Outsourcing Services will be performed in a dedicated space in Contractor's facility in which no production of competing products will be conducted. Access to the NICE production lines will be limited only to Contractor's employees performing the Manufacturing Outsourcing Services and NICE representatives. + + 11.5. NON GENERIC EQUIPMENT. During the term of this Agreement, the Non Generic Equipment shall be furnished to Contractor (without charge) and used in Contractor's premises for purposes of performing its various obligations under this Agreement, according to the terms hereof. Such Non Generic Equipment shall: + + (1) Be clearly marked and identified as NICE' property. + + (2) Be safely stored, adequately maintained and insured against loss or damage under Contractor's existing policies detailed in APPENDIX D. In the event such Non Generic Equipment is damaged, lost or destroyed, Contractor shall be liable towards NICE to repair or replace such equipment (at Contractor's choice). + + (3) Remain the sole property of NICE, and therefore shall be kept free of liens and encumbrances imposed on Contractor's property. + + (4) Be returned to NICE upon request, or upon termination of this Agreement, at the same condition as originally furnished to Contractor except for normal wear and tear. Notwithstanding anything to contrary, if NICE requests to have the Non Generic Equipment returned thereto prior to the termination of the relevant services hereunder, Contractor shall have no liability or obligation for the performance of any obligations hereunder for which such Non Generic Equipment is reasonably required. Contractor shall notify NICE in writing in detail of the aforementioned, promptly upon NICE' request to receive the Non Generic Equipment. + + (5) Be used according to NICE' written instructions and information concerning such Non Generic Equipment. + + (6) Shall not be used by Contractor for any other purpose except for NICE' needs and shall be dedicated for performance of this Agreement. + + (7) Nevertheless, NICE may request Contractor to purchase some Non Generic Equipment by itself and in such event Contractor shall + + + + + + invoice NICE for the purchase price. Such equipment shall be deemed for all purposes as part of the "Non Generic Equipment" and shall be sold to NICE upon termination of this Agreement for any reason, at a total sale price of 1$. + + 32 + +12. CONFIDENTIAL INFORMATION, INTELLECTUAL PROPERTY AND INTELLECTUAL PROPERTY INDEMNIFICATION, PUBLICITY + + 12.1 OWNERSHIP AND LICENSE RIGHTS. NICE or its customers, partners, suppliers, and contractors shall be the sole owner of all NICE Proprietary Information and NICEIntellectual Property (as defined below) to which Contractor has access in the performance of the Manufacturing Outsourcing Services including but not limited to - in connection with the Products. Except for the licenses granted herein, Contractor or anyone on its behalf shall not acquire any right, title, or interest to the NICE Proprietary Information and/or NICE Intellectual Property. Especially, but without limitation, NICE shall remain the owner of all NICE Proprietary Information and NICE Intellectual Property in connection with the design of the Products and the NICE Software. For the purposes hereof, "NICE INTELLECTUAL PROPERTY" shall mean Intellectual Property conceived, created, reduced to practice or developed by NICE and/or for NICE by a third party, and/or for NICE by Contractor (including anyone on its behalf) in accordance with this Agreement, for the purpose of performing the Manufacturing Outsourcing Services. + + 12.2. CONFIDENTIALITY BY CONTRACTOR. Contractor will provide the Manufacturing Outsourcing Services in a manner that complies with the Confidentiality requirements of APPENDIX E. Contractor shall not: transfer to others, copy or duplicate, sub-license, sell, publish, display or otherwise make available in any form or disclose, the NICE Proprietary Information and/or the NICE Software and/or the NICE Intellectual Property, to any third party, except to suppliers/manufacturers of components and/or sub assemblies that require specifications for their supply, in which case they shall be required by Contractor to execute a Confidentiality Agreement in the form of APPENDIX E VIS-A-VIS NICE. Contractor shall use the same degree of care with respect to NICE Proprietary Information as it uses in protecting its own proprietary information and trade secrets. + + Without derogating from the aforementioned, Contractor shall not, in any way or manner, directly or indirectly, engineer, reverse engineer, compile, decompile or reverse assemble the NICE Software, or analyze or otherwise examine the NICE Software for the purpose of reverse engineering. + + 12.3. In addition, Contractor shall not disclose the NICE Proprietary Information to any Personnel, except on a need to know basis as required in order to implement this Agreement. Contractor undertakes to procure that its Personnel and Permitted Subcontractors engaged in performance of this Agreement (except subcontractor's employees who do not have access to the NICE production lines at Contractor's premises), and reasonably designated by NICE in advance in writing, have signed a non-disclosure agreement in the form of APPENDIX E, prior to receipt of any NICE Proprietary Information. + + 33 + + 12.3A Notwithstanding anything to the contrary, Contractor shall have no liability with respect to disclosure of NICE Proprietary Information if such information came into the possession of the Contractor independently of this Agreement, through a breach of obligation of secrecy of a third party to NICE, of which Contractor was not aware and should not have been aware if Contractor had exercised due care. + + 12.4. CONFIDENTIALITY BY NICE. NICE shall not: transfer to others, copy or duplicate, sub-license sell, publish, display or otherwise make available in any form or disclose, the Contractor's Proprietary Information, to any third party, except for the purpose of performing this Agreement. NICE shall use the same degree of care with respect to such Contractor's Proprietary Information as it uses in protecting its own proprietary information and trade secrets. All rights in Contractor's Proprietary Information, shall remain solely with Contractor. Notwithstanding the aforesaid, it is agreed that any manufacturing methods applied by Contractor, which are Contractor's Proprietary Information, may be used by NICE itself (including its Affiliates) (but may not be transferred/disclosed to any third party) and by signing this Agreement Contractor hereby grants NICE a personal, non exclusive, non transferable, perpetual license to use such manufacturing methods. + + 12.4A Notwithstanding anything to the contrary, NICE shall have no liability with respect to disclosure of Contractor Proprietary Information if such information came into the possession of NICE independently of this Agreement, through a breach of obligation of secrecy of a third party to Contractor, of which NICE was not aware and should not have been aware if NICE had exercised due care. + + 12.5. LEGAL OBLIGATION TO DISCLOSE. In the event a party is required to disclose Proprietary Information of the other party, by applicable law + + + + + + or by any government in the exercise of its lawful authority, the party so required shall (i) promptly notify the other party in writing, and, at the other party's expense: (ii) use reasonable and lawful efforts to resist making any disclosure of Proprietary Information not approved by the other party, (iii) use reasonable and lawful efforts to limit the amount of Proprietary Information to be disclosed pursuant to any such disclosure, and (iv) cooperate with the other party to obtain a protective order or other appropriate relief to minimize the further dissemination of any Proprietary Information to be disclosed pursuant to any such disclosure. + + 12.6. INTELLECTUAL PROPERTY INDEMNIFICATION BY CONTRACTOR. Contractor shall indemnify, hold harmless and defend NICE from and against any and all damages (including all damages awarded to a third party and payable by NICE), costs, losses, and expenses (including settlement awards and reasonable attorney's fees) arising from any claim or suit made against NICE or a third party which NICE is obligated to indemnify, by a third party based on the allegation that the Products infringe or violate any Intellectual Property right due to the components and/or sub assemblies supplied by Contractor hereunder and/or the manufacturing processes and methods as performed by Contractor hereunder. Contractor shall include in all its agreements with suppliers/ manufacturers provisions regarding Intellectual Property indemnification substantially similar to those included in this Agreement, providing inter alia that they are freely assignable to NICE without any modification or consent. + + 34 + + Nevertheless, in the event NICE designates specific components to be purchased by Contractor hereunder and the manufacturer/supplier of such NICE designated components refuses to grant Contractor indemnification for infringement of Intellectual Property rights, despite Contractor performing its best reasonable commercial efforts to obtain such indemnification (which Contractor shall prove to NICE by submission of copies of its correspondence with the manufacturer including the manufacturer's response), then if NICE approves purchase of such components, Contractor shall not be responsible for Intellectual Property indemnification due to those specific components. + + For the removal of doubt, Contractor shall not be liable for any infringement of an Intellectual Property right due to any NICE Proprietary Information, NICE Intellectual Property, NICE Software, Non Generic Equipment (if used in accordance with the instructions provided by NICE), and due to performance as is of NICE written instructions including specifications and design. + + Contractor's indemnification as provided under this Section shall apply only if: Contractor is notified promptly in writing of any notice of a claim or of a threatened or actual suit; and is given control of the defense thereof and all related settlement negotiations; and, NICE provides, at Contractor's request and expense, all reasonable cooperation and assistance for the defense and negotiations of the claim. Nevertheless, in the event the claim or suit is based on the allegation that the Products infringe or violate any Intellectual Property right due to the components and/or sub assemblies supplied by Contractor hereunder which were designated by Nice as aforementioned, and the supplier / manufacturer of the infringing component has an indemnity undertaking as above towards Contractor; (i) which is assignable to NICE and Contractor promptly assigns to NICE such indemnification undertaking from its supplier / manufacturer; (ii) which is unassignable to NICE but Contractor notifies NICE promptly in writing of any notice of the claim or of a threatened or actual suit; and gives NICE on behalf of Contractor and NICE' chosen counsel control of the defense thereof and all related settlement negotiations; then in both such instances Contractor shall not be responsible for Intellectual Property indemnification with respect thereto. In all other events, Contractor shall conduct the litigation as aforementioned. + + 12.7. Following establishment of infringement of Intellectual Property by a competent authority including at interlocutory proceedings, whether Contractor is responsible therefor or not, NICE may issue an ECR and Contractor will handle such ECR and the corresponding ECO promptly in accordance with Sections 3.10, 3.11. + + 12.8. INTELLECTUAL PROPERTY INDEMNIFICATION BY NICE. NICE shall indemnify, + + 35 + + hold harmless and defend Contractor from and against any and all damages (including all damages awarded to a third party and payable by Contractor), costs, losses, and expenses (including settlement awards and reasonable attorney's fees) arising from or in connection with any claim or suit made against Contractor or a third party which Contractor is obligated to indemnify, by a third party based on an allegation that the Products and/or the NICE Software infringe or violate any Intellectual Property right, including due to the use of any NICE Proprietary Information, NICE Intellectual Property, NICE Software, Non Generic Equipment (if used in accordance with the instructions provided by NICE), or due to performance as is of any NICE written instructions including specifications and design, but + + + + + + excluding any allegation that the Products infringe or violate any Intellectual Property right due to the components and/or sub assemblies supplied by Contractor hereunder and/or the manufacturing processes and methods as performed by Contractor hereunder for which Contractor is liable as per Section 12.6. above. + + NICE' indemnification as provided under this Agreement shall apply only if: NICE is notified promptly in writing of any notice of a claim or of a threatened or actual suit; and is given control of the defense thereof and all related settlement negotiations; and, Contractor provides, at NICE' request and expense, all reasonable cooperation and assistance for the defense and negotiations of the claim. + + 12.9. EMPLOYEE AND CONTRACTOR INDEMNIFICATION. Each of the parties agrees that it will indemnify the other party against any and all claims hereafter brought or asserted by any person against the other party relating to any alleged or actual action or omission to act by the indemnifying party arising from, or in connection with, such person's status as an employee or independent Contractor of the indemnifying person or the termination of such status. + + 12.10. PUBLICITY. Except with the express written consent of NICE, Contractor shall not make any press announcement or publicize this Agreement or any matters relating to any of the transactions contemplated hereby or use NICE' name or trademark in any way whatsoever, except to the extent required to comply with applicable laws or governmental regulations, provided that Contractor acts according to Section 12.5. + +13. INSURANCE + + 13.1. Contractor shall be liable for the total or partial loss of or damage to the components and/or the Products in so far as such loss or damage has occurred while in Contractor's possession and until delivery of the Products to NICE' freight forwarder at Contractor's facility. + + 36 + + 13.2. Without limiting any of the obligations or liabilities of Contractor, whether under this Agreement or by law, subject to any limitations hereunder, Contractor shall maintain, and shall cause any subcontractors engaged by Contractor to provide services under this Agreement to maintain, at Contractor's own expense, as long as this Agreement is in effect, insurance policies of the kind and limits as set forth in APPENDIX D to this Agreement. The expense of such insurance shall be borne by Contractor. The Contractor shall keep in force the policies specified in sections 1 and 3 to the Insurance Certificate valid as long as Contractor's legal liability EXISTS IN CONNECTION WITH OPERATIONS ACCORDING TO THE AGREEMENT. + + It is Contractor's responsibility to ensure that the insurance requirements set forth in APPENDIX D to this Agreement remain in effect for the term of this Agreement. + + 13.3. Within ten (10) Days of the execution of this Agreement, Contractor shall furnish to NICE certificates of insurance evidencing full compliance with the insurance requirements as set forth in APPENDIX D to this Agreement. Certificates of Insurance shall be kept current throughout the entire term of this Agreement. + + 13.4. The carrying of any insurance required hereunder shall not be interpreted as relieving Contractor of any responsibility and/or undertaking to NICE according to the provisions of this Agreement or by law. Contractor shall give prompt notice of all losses or claims of which Contractor has knowledge which may be in any way related to this Agreement and Contractor shall assist and cooperate with any insurance company in the adjustment or litigation of all claims arising under this Agreement or by law and indemnifiable by Contractor under this Agreement or by law. + + 13.5. NICE shall include in its property policies a waiver of subrogation clause against the Contractor, its directors and any one on its behalf, provided that such waiver will not be valid towards a person which caused malicious damage. + +14. [Deleted] + +15. FUNDAMENTAL BREACH AND REMEDIES + + 15.1. Except as provided in Sections 15.2 and 15.3, any breach by any Party of this Agreement which was not remedied within forty-five (45) Days from the date of notice, shall be regarded as a fundamental breach. + + 15.2. Notwithstanding the aforementioned in Section 15.1, any delay in the Due Date and/or Shipment Date, which was not remedied within thirty (30) Days from the date of notice for the first delay, and any subsequent delay upon notice (i.e. any second delay, even if the first one was less then 30 days) shall be regarded as a fundamental breach. + + 37 + + 15.3. Notwithstanding the aforementioned in Section 15.1, unjust delay in payment by NICE exceeding sixty (60) Days from the date of notice for the first delay, exceeding seven (7) Days from the date of notice for + + + + + + the second delay (i.e. any second delay, even if the first one was less then 60 days) and exceeding the date of notice for any subsequent delay (i.e. any subsequent delay, even if the second one was less then 7 days) , shall be regarded as a fundamental breach. Notwithstanding, any delay in any payment by NICE shall bear a default interest, as of the first Day of delay, to be compounded daily, at the rate applicable at Bank Hapoalim B.M. at the relevant time for unauthorized overdrawn current accounts. + + 15.4. Notwithstanding anything to the contrary contained herein or otherwise, Contractor's liability to NICE for any indirect, special, incidental, exemplary or consequential damages as a result of any claim arising under this Agreement or in connection therewith, regardless of whether Contractor has been advised of the possibility of such damages, shall not exceed five million US dollars ($5,000,000) in the aggregate for all claims, except for infringement of Intellectual Property rights for which Contractor is liable under Section 12.6. This Section shall not be construed or used in the construction of this Agreement as imposing on Contractor any liability for which it is not otherwise liable. Further, this Section shall not be construed as derogating from any applicable law which cannot be changed or waived by contract. + + 15.5. Notwithstanding anything to the contrary contained herein, NICE' liability to Contractor for any indirect, special, incidental, exemplary or consequential damages as a result of any claim arising under this Agreement or in connection therewith, regardless of whether NICE has been advised of the possibility of such damages, shall not exceed five million US dollars ($5,000,000) in the aggregate for all claims, except for infringement of Intellectual Property rights for which NICE is liable under Section 12.8. This Section shall not be construed or used in the construction of this Agreement as imposing on NICE any liability for which it is not otherwise liable. Further, this Section shall not be construed as derogating from any applicable law which cannot be changed or waived by contract. + +16. TERM AND TERMINATION + + 16.1. TERM AND TERMINATION. The initial term of this Agreement shall commence on the Effective Date and extend for three (3) years thereafter ("INITIAL TERM"), with an automatic renewal for an indefinite period of time ("EXTENDED TERM"), unless terminated by the parties according to Sections 16.2. or 16.3. herein. + + 16.2. Notwithstanding the aforesaid in Section 16.1. and any possible implication to the contrary herein or as a result of the course of conduct of the parties, NICEshall be entitled, at its sole discretion, to terminate this Agreement, in whole or in part, at any time during the Initial Term or the Extended Term, with or without cause, upon a prior written notice of termination to Contractor of not less than forty-five (45) Days. + + 38 + + 16.3. Notwithstanding the aforesaid in Section 16.1. and any possible implication to the contrary herein or as a result of the course of conduct of the parties, Contractor shall be entitled, at its sole discretion, to terminate this Agreement only during the Extended Term, with or without cause, upon a prior written notice of termination to NICE of not less than six (6) months. + + 16.4. Either party shall be entitled to terminate this Agreement, following a fundamental breach of this Agreement by the other party. + + 16.5. Either party shall be entitled to terminate this Agreement upon the other party seeking an order for relief under the bankruptcy laws of the State of Israel or similar laws of any other jurisdiction, a composition with or assignment for the benefit of creditors, or dissolution or liquidation. NICE shall be entitled to terminate this Agreement upon the merger or acquisition of all or substantially all the business or assets of Contractor (except if within the Flextronix's group and provided Contractor remains an Israeli entity). + + 16.6. EFFECT OF TERMINATION. + + 16.6.1. Upon notice of termination of this Agreement for any reason whatsoever, the parties shall execute rapidly and efficiently the procedure for termination of the Manufacturing Outsourcing Services by Contractor and the transfer of production to NICE as set forth hereunder and agreed between the parties, provided that Contractor will not be required to incur additional costs for the purpose of assisting NICE in the case of termination. During the notice period, Contractor will continue performance of the Manufacturing Outsourcing Services regarding all PO's received according to the Forecast and will, simultaneously, assist NICE and cooperate with it in the transfer of the Manufacturing Outsourcing Services to NICE or anyone designated by NICE and NICE will continue in performing all its obligations hereunder. + + 16.6.2. Upon termination of this Agreement for any reason whatsoever, without derogating from the generality of the aforesaid, NICE shall be entitled to receive from Contractor, at no charge, subject to the confidentiality obligations hereunder and Contractor's Proprietary Information, all information, know-how, samples, documentation and data, in any form or medium, in + + + + + + connection with the Manufacturing Outsourcing Services, whether prepared by NICE or by Contractor, and all NICE Proprietary Information which is in the possession of Contractor or anyone on its behalf, including its Permitted Subcontractors. Upon termination of this Agreement, Contractor shall return any such information to NICE notwithstanding the provisions of Section 10.6. above. + + 39 + + 16.6.3. Upon termination of this Agreement for any reason whatsoever, all Non Generic Equipment and NICE Returned Components as detailed in Section 3.12. above, will be immediately returned to NICE. + + 16.6.4. It is clarified that upon termination, for any reason whatsoever, Contractor shall still be obligated to supply warranty services according to this Agreement to all Products supplied, this for the duration of the Warranty Period for each Product and the relevant provisions of this Agreement applying to warranty shall survive termination. + + 16.7. EFFECT OF TERMINATION. Upon termination of this Agreement, except in the event of termination by NICE due to breach by Contractor, NICE shall pay Contractor as follows: (i) 100% of the contract price for all finished Products in Contractor's possession or which have been delivered/being delivered to NICE, which are subject to a Purchase Order in accordance with the terms of this Agreement; (ii) 104% of the cost in APPENDIX C of all inventory of Permitted Components in Contractor's possession, which are not returnable to the vendor / supplier according to APPENDIX C or usable for other customers (as determined by Contractor in its sole discretion), whether in raw form or work in process; (iii) 104% of the cost in APPENDIX C of all inventory and inventory on order of Permitted Components which is not cancelable according to APPENDIX C; (iv) any vendor cancellation charges incurred with respect to inventory of Permitted Components accepted for cancellation or return by the vendor, and (v) disassembly charges and payments as per Section 3.8 (Cancellation of PO) resulting from the cancellation of PO's due to termination, and (vi) 100% of any other costs and payments payable by NICE hereunder at the time of termination under the specific provisions of this Agreement. Contractor will use reasonable commercial efforts to return unused inventory and to cancel pending orders for such inventory, and to otherwise mitigate the amounts payable by NICE hereunder. + + 16.8. Upon termination of this Agreement by NICE due to breach by Contractor, NICE shall be obligated to pay Contractor as follows: (i) 100% of the contract price for all finished Products in Contractor's possession for which the Due Date has occurred and which have been supplied to NICE' freight forwarder, which are subject to a Purchase Order in accordance with the terms of this Agreement; (ii) 100% of the cost in APPENDIX C of all inventory of Permitted Components in Contractor's possession, which are not returnable to the vendor / supplier according to APPENDIX C or usable for other customers (as determined by Contractor in its sole discretion); provided however that in the event Contractor fails to supply the Products and/or Permitted Components to NICE, for any reason whatsoever, within 14 days after receipt of NICE' request, NICE shall be released from the obligation to pay for the Products and /or Permitted Components as provided for above. (iii) 100% of the cost in Appendix C of all inventory and inventory on order of Permitted Components, which is not cancelable according to Appendix C. Contractor will use reasonable commercial efforts to return unused inventory and to cancel pending orders for such inventory, and to otherwise mitigate the amounts payable by NICE hereunder. + + 40 + + 16.9. Neither party shall have any other liability, including payment obligations, resulting from the termination for convenience of this Agreement. + +17. MISCELLANEOUS. + + 17.1. ENTIRE AGREEMENT. This Agreement, Schedules, Exhibits and Appendices constitute the entire agreement between the parties in connection with its subject matter and supersede all prior communications and agreements between the parties relating to its subject matter. Notwithstanding anything to the contrary, no documents, procedures, methods or policies shall bind the Parties unless they are in writing and signed by both parties, except that all the technical documentation included in the PDM System may be changed as provided in Section A (xxxii). Any change in NICE' procedures or policies, shall bind Contractor after it is notified of same, unless the change is material, in which case Contractor can object to the change on reasonable grounds detailed in writing. + + 17.2. AMENDMENT. This Agreement may only be amended, varied or modified by the prior agreement in writing of NICE and Contractor. Any such amendment, variation or modification shall be binding upon the parties and upon their successors and assigns. Work procedures and technical documents may be signed by any representative on behalf of each of the parties and need not be signed by authorized signatories of the parties. + + + + + + 17.3. ASSIGNMENT. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and permitted assigns. Neither party shall in any way sell, transfer, assign, sub-contract or otherwise dispose of any of the rights, privileges, duties and obligations granted or imposed upon it under this Agreement. However, NICE may, at its discretion, transfer and/or assign any of its rights, privileges, duties and obligations granted or imposed upon it under this Agreement to any NICE Affiliate, provided that NICE remains responsible towards Contractor, jointly and severally with the Affiliate, for all of its obligations hereunder so assigned, and provided further that the assignee signs this Agreement. + + 41 + + It is further clarified that NICE may choose, by written notice to Contractor, to enable any NICE Affiliate to act on NICE' behalf and in its name under this Agreement directly VIS-A-VIS Contractor, without relieving NICE as the sole contractual party from responsibility for performance of the Agreement. Notwithstanding the foregoing, Upon NICE' prior written approval and upon the terms and limitations of such approval, Contractor may sub-contract some of its obligations ("PERMITTED SUBCONTRACTORS"), provided, however, that Contractor shall remain obligated under this Agreement. Contractor shall provide to NICE material qualifications and identification details of such Permitted Subcontractors. Contractor shall at all times remain fully responsible for the performance of all obligations of Contractor hereunder, jointly and severally with the Permitted Subcontractors. In selecting subcontractors to assist Contractor in the performance of this Agreement, Contractor shall comply with all reasonable NICE vendor screening requirements which are provided to it, and Contractor shall also comply with its own vendor screening requirements. + + 17.4. SEVERABILITY. If any provision of this Agreement is held invalid, illegal or unenforceable for any reason by any court of competent jurisdiction, such provision shall be separable from the remainder of the provisions hereof which shall continue in full force and effect as if this Agreement had been executed with the invalid provisions eliminated. + + 17.5. FORCE MAJEURE. + + 17.5.1. Neither party shall be liable to the other for any delay in performance or failure to perform, in whole or in part, due to war or act of war (whether an actual declaration is made or not), riot, civil commotion, act of public enemy, fire, flood, or other act of God, act of any governmental authority, or similar causes beyond the reasonable control of such party which could not have been foreseen or prevented. If any event of force majeure occurs, the Party affected by such event shall promptly notify the other Party of such event in writing and take all reasonable actions to avoid the effect of such event. + + 17.5.2. Nevertheless, if any event of force majeure occurs for a consecutive period of fourteen (14) Days preventing Contractor from performing the Manufacturing Outsourcing Services, and Contractor has not managed to set up the Manufacturing Outsourcing Services at the Backup Site, NICE may, at its discretion, elect to perform the Manufacturing Outsourcing Services or any part thereof by itself and/or through others, without derogating from its other rights and remedies, if applicable. In such event: (a) Contractor shall assist NICE by putting at its use, at NICE' request, Contractor Personnel who are involved in the performance of this Agreement, to the extent possible, at a charge to be agreed based on the labor rates in APPENDIX C; (b) without derogating from any other obligations of NICE hereunder as at such date to purchase Permitted Components, NICE shall purchase from Contractor the additional Permitted Components in Contractor's inventory, which are required, at NICE' discretion, for manufacturing during the force majeure period. The price and payment terms for purchase of such Permitted Components shall be according to the provisions of Section 3.4(A) above, which shall apply mutatis mutandis. + + 42 + + 17.5.3. If the event of force majeure exists for more than 90 days, each party shall have the right to terminate this Agreement and the provisions of Sections 16.2. and 16.3. regarding the notice period required shall apply mutatis mutandis, and thereafter Section 16 regarding effects of termination shall apply. + + 17.6. RELATIONSHIP. NICE and Contractor acknowledge and agree that this Agreement shall not constitute, create or give effect to a joint venture, pooling arrangement, principal/agency relationship, partnership relationship or formal business organization of any kind and neither Contractor and/or NICE shall have the right to bind the other without the other's express prior written consent. Contractor will render the Manufacturing Outsourcing Services as an independent contractor and no employee - employer relationship shall exist between Contractor and/or the Personnel and/or anyone on its behalf and NICE. + + 17.7. MANAGEMENT CHANGES. Contractor shall notify NICE immediately upon the occurrence of any material change in the conduct of business of Contractor or in the composition of its management, which has a + + + + + + material adverse affect on Contractor's ability to perform this Agreement. + + 17.8. WAIVER. The failure of either party to insist upon strict performance of any provision of this Agreement, or the failure of either party to exercise any right or remedy to which it is entitled hereunder, shall not constitute a waiver thereof and shall not cause a diminution of the obligations established by this Agreement. A waiver of any default shall not constitute a waiver of any subsequent default. No waiver of any of the provisions of this Agreement shall be effective unless it is expressly stated to be a waiver and communicated to the other party in writing in accordance with the provisions of this Agreement. + + 17.9. DISPUTE RESOLUTION. Any dispute arising out of or relating to this Agreement or the breach, termination or validity thereof shall be settled in accordance with one of the following procedures. Contractor and NICE shall use the procedures in the following order of priority. + + 43 + + 17.9.1. In the event of any dispute, controversy or claim of any kind or nature arising under or in connection with this Agreement (including but not limited to disputes as to the creation, validity, interpretation, breach or termination of this Agreement) (a "DISPUTE"), then upon the written notice of either Party, the Dispute will be submitted to the project manager on behalf of each party to be escalated, in case the parties are unable to resolve such Dispute, to the parties C.E.O.'s + + 17.9.2. Any dispute that the parties are unable to resolve pursuant to Section 17.9.1. within 30 Days, will be submitted exclusively to the competent courts in the Tel-Aviv-Jaffa District in Israel. + + 17.9.3. Without derogating from rights of termination as detailed in this Agreement, it is clarified that Contractor will continue to provide the Manufacturing Outsourcing Services and NICE shall continue to perform its obligations hereunder during any litigation, mediation or legal proceedings commenced pursuant to this Section 17.9. above and the existence of a Dispute shall not enable Contractor to stop work or services or otherwise not timely perform its obligations or enable NICE to stop payments or otherwise not timely perform its obligations. + + 17.9.4. The foregoing shall not affect the right of the parties to seek injunctions before the competent Court. + + 17.10. Wherever in this Agreement it is provided that the Parties agree to negotiate/review/change any term hereof (including prices), the parties will usetheir best commercial efforts and negotiate in good faith in order to reach such agreement. If the parties fail to agree, no change will be made to the last agreed terms and they shall continue to apply, except as otherwise specifically and explicitly provided herein, and except that the provisions of Section 8.2. and all its subsections will apply with regard to details included in APPENDIX C. + + 17.11. LAW AND JURISDICTION. This Agreement shall be governed by and construed in accordance with the laws of the state of Israel, without giving effect to choice of law rules. + + 44 + + 17.12. SCHEDULES AND APPENDICES. Each Schedule and Appendix hereto is incorporated herein by this reference. The parties may amend any Schedule and Appendix from time-to-time by entering into a separate written agreement, referencing such Schedule and Appendix and specifying the amendment thereto, signed by an authorized representative of each of the parties. + + 17.13. SET-OFF. NICE shall only be entitled to setoff any amount due to Contractor against any amount due from Contractor to NICE, if the setoff amount is: (i) due according to this Agreement and is subject to an invoice lawfully issued hereunder; or (ii) liquidated damages according to this Agreement. In the event of setoff, Contractor shall receive, at the same time, a written notice signed by vice president operations of NICE detailing the setoff. Contractor shall not be entitled to setoff any amount due to NICE from Contractor hereunder against any amount due from NICE to Contractor according to this Agreement. The setoff provisions in this Agreement are in lieu of any setoff rights under any applicable law but shall not be construed as derogating from any other right or remedy. + + 17.14. LIEN. Each party hereby waives any right of lien it may have under applicable law. + + 17.15. COMMUNICATION AND NOTICES. Except as otherwise expressly provided in this Agreement, no communication from one party to the other shall have any validity under this Agreement unless made in writing by or on behalf of an authorized official of Contractor or, as the case may be, by or on behalf of an authorized official of NICE. Each party shall, from time to time, provide the other with a list of personnel designated as "authorized officials" for the purposes of this Section 17.15. Any notice or other communication which either party hereto is required or authorized by this Agreement to give or make to the other + + + + + + shall be given or made either by registered mail, or by courier or by facsimile transmission confirmed by electronic confirmation, addressed to the other party to the address referred to in the preamble. Notices shall be deemed delivered within seven (7) Days of dispatch of the notice by registered mail, or upon delivery by courier, or one Business Day after sent if sent by facsimile transmission. + +IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date first above written: + + /s/ /s/ ------------------------ ------------------------ NICE SYSTEMS LTD. FLEXTRONICS ISRAEL LTD. + + 45 + + NICE SYSTEMS LTD. FLEXTRONICS ISRAEL LTD. + +(Nice-Nice Flex Master Manufacturing Outsourcing Agreement Final) + + 46 \ No newline at end of file diff --git a/full_contract_txt/NOVOINTEGRATEDSCIENCES,INC_12_23_2019-EX-10.1-JOINT VENTURE AGREEMENT.txt b/full_contract_txt/NOVOINTEGRATEDSCIENCES,INC_12_23_2019-EX-10.1-JOINT VENTURE AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..2c1b432c0eaa898cde032854338e8be80d5a8138 --- /dev/null +++ b/full_contract_txt/NOVOINTEGRATEDSCIENCES,INC_12_23_2019-EX-10.1-JOINT VENTURE AGREEMENT.txt @@ -0,0 +1,67 @@ +Exhibit 10.1 JOINT VENTURE AGREEMENT BETWEEN NOVO INTEGRATED SCIENCES INC. ("NVOS") AND HARVEST GOLD FARMS INC. ("HGF") FOR THE DEVELOPMENT, MANAGEMENT AND OPERATION OF HEMP FARMING AND MEDICINAL CROPS + + + + + +JOINT VENTURE AGREEMENT Dated as of December 19, 2019 This Joint Venture Agreement (the "Agreement") is entered into between Novo Integrated Sciences Inc., a Nevada Corporation with offices located at 11120 NE 2nd Street, Suite 200, Bellevue, Washington 98004, U.S.A (herein referred to as "NVOS") and Harvest Gold Farms Inc., a corporation organized under the laws of New Brunswick, Canada with offices located at 866 E. H. Daigle Blvd, Grand Falls, New Brunswick, E3Z 3E8, Canada (herein referred to as "HGF"). NVOS and HGF may be referred to herein collectively as the "Parties" and separately as a "Party." RECEITALS WHEREAS, NVOS is willing to assist in development, assist in management and purchase biomass resulting from open field farming for health-related cash crops, in particular medicinal cannabis and industrial hemp; WHEREAS, NVOS is willing to develop and construct processing facilities as well as finished goods manufacturing and packaging facilities; WHEREAS, NVOS is willing to provide the Joint Venture access to its distribution pathways established either directly or indirectly through NVOS or its wholly or partially owned subsidiaries; WHEREAS, NVOS is willing to establish reasonable commercial cost bases to product processing and packaging ensuring a profitable and fully transparent Joint Venture; WHEREAS, NVOS is willing to utilize all applicable HGF tools and offerings for the purposes of developing a fully comprehensive North American business platform; WHEREAS, HGF is willing to work towards a mutually acceptable Joint Venture; WHEREAS, HGF is willing to engage to its fullest potential in the licencing, employment harvesting, legal right consulting, business development within its geographical jurisdiction; WHEREAS, HGF is willing assist in transport and distribution of raw and finished goods in both domestic and international jurisdictions; WHEREAS, HGF is willing to provide certified biomass to the JV on pre-determined, mutually agreed price per acre and participate on a net revenue split of products offered to market directly or indirectly through NVOS channels; NOW THEREFORE, the Parties agree to sign this Agreement for the purposes of developing, managing and arranging medicinal farming projects involving hemp and cannabis cash crops (hereinafter referred to as the "Primary Project") under the following terms set out in this Agreement for the noted project (herein, referred to as the "Primary Contract"). + + + + + +ARTICLE 1 - DEFINITIONS AND INTERPRETATION 1.1 For the purposes of this Agreement, unless the context otherwise requires, the following terms shall have the respective meanings set forth below and grammatical variations of such terms shall have corresponding meanings: (a) "Action" means any legal action, suit, claim, investigation, hearing or proceeding, including any audit, claim or assessment for Taxes or otherwise. (b) "Agreement" means this Joint Venture Agreement, dated December 19, 2019. (c) "Company" means the Joint Venture entity which will be registered and incorporated in a Canadian jurisdiction with its operating name as Novo Earth Therapeutics Inc. (d) "Cost" means cost of goods sold as defined in the financials of the Primary Project. (e) "Effective Date" is the date of the most recent final signature on this Agreement. (f) "EPC" means engineering, procurement, construction contracts. (g) "HFG" means Harvest Gold Farms Inc. (h) "Joint Venture" means a business arrangement where NVOS and HGF have agreed to pool their resources for the purpose of the Primary Project. (i) "Law" means any domestic or foreign, federal, state, provincial, municipal or local law, statute, ordinance, code, rule, or regulation having the force of law. (j) "NHL" means Novo Healthnet Limited. (k) "NVOS" means Novo Integrated Sciences Inc. (l) "Parties" means collectively, Harvest Gold Farms Inc. and Novo Integrated Sciences Inc. (m) "Party" identifies, separately, either Harvest Gold Farms Inc. or Novo Integrated Sciences Inc. (n) "Primary Contract" means the terms set out in this agreement for the Primary Project. (o) "Primary Project" means this agreement that outlines the development, management and arranging of medicinal farming projects involving hemp and cannabis cash crops. (p) "Tax(es)" means any federal, state, provincial, local or foreign tax, charge, fee, levy, custom, duty, deficiency, or other assessment of any kind or nature imposed by any Taxing Authority (including any income (net or gross), gross receipts, profits, windfall profit, sales, use, goods and services, ad valorem, franchise, license, withholding, employment, social security, workers compensation, unemployment compensation, employment, payroll, transfer, excise, import, real property, personal property, intangible property, occupancy, recording, minimum, alternative minimum, environmental or estimated tax), including any liability therefor as a transferee (including under Section 6901 of the Code or similar provision of applicable Law) or successor, as a result of Treasury Regulation Section 1.1502-6 or similar provision of applicable Law or as a result of any Tax sharing, indemnification or similar agreement, together with any interest, penalty, additions to tax or additional amount imposed with respect thereto. + + + + + +(q) "Taxing Authority" means the Internal Revenue Service, the Canada Revenue Agency and any other Authority responsible for the collection, assessment or imposition of any Tax or the administration of any Law relating to any Tax. (r) "Tax Return" means any return, information return, declaration, claim for refund or credit, report or any similar statement, and any amendment thereto, including any attached schedule and supporting information, whether on a separate, consolidated, combined, unitary or other basis, that is filed or required to be filed with any Taxing Authority in connection with the determination, assessment, collection or payment of a Tax or the administration of any Law relating to any Tax. 1.2 Interpretive Provisions. Unless the express context otherwise requires: (a) the words "hereof," "herein," and "hereunder" and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular provision of this Agreement; (b) terms defined in the singular shall have a comparable meaning when used in the plural, and vice versa; (c) references herein to a specific Section, Subsection, Recital, Schedule or Exhibit shall refer, respectively, to Sections, Subsections, Recitals, Schedules or Exhibits of this Agreement; (d) wherever the word "include," "includes," or "including" is used in this Agreement, it shall be deemed to be followed by the words "without limitation"; (e) references herein to any gender shall include each other gender; (f) references herein to any contract or agreement (including this Agreement) mean such contract or agreement as amended, supplemented or modified from time to time in accordance with the terms thereof; (g) with respect to the determination of any period of time, the word "from" means "from and including" and the words "to" and "until" each means "to and including"; (h) references herein to any Law or any license mean such Law or license as amended, modified, codified, reenacted, supplemented or superseded in whole or in part, and in effect from time to time; and (i) references herein to any Law shall be deemed also to refer to all rules and regulations promulgated thereunder. + + + + + +ARTICLE 2 - ENTERPRISE NAME 2.1 The Joint Venture has been registered and incorporated in a Canadian jurisdiction mutually acceptable to both parties and will be referred to as the "Company", the Company shall have all the liabilities of the project in relation to finance and operation with HGF having no liability in relation to the project. ARTICLE 3 - RELATIONSHIP OF PARTIES 3.1 The parties will work in a Joint Venture relationship with NVOS providing the development and operation of the project including sales and HGF providing the land, farming expertise, biomass and necessary approvals for the development of the agricultural project. ARTICLE 4 - OFFICE LOCATION 4.1 The Company shall have an office in the NVOS head office location as well as an office on the Primary Project location and if necessary, offices in international jurisdictions for the purpose of sales and promotion. ARTICLE 5 - START UP CAPITAL AND CONTRIBUTIONS 5.1 Each of the Parties shall contribute to the start-up as follows: 5.1.1 NVOS ● Complete and finalize a business plan and layout plans, a detailed procurement project binder and an implementation and roll-out plan. ● Make arrangements for construction and financing options of any facilities required for the profitable farming of medicinal crops or related facilities. ● Direct project finance model and selection of EPC and management service providers. ● Arrange for product purchase contracts. 5.1.2 HGF ● Will provide the land and approvals for greenhouse (if necessary), open field farming and other facilities as required. ● Arrange for all required titled land for greenhouses and outdoor agriculture platforms. ● Arrange for all building permits, environmental approvals and HGF internal approvals including confirmation of tax-free Company status for the duration of the proposal (if possible). ● Provide elite farming expertise for the purposes of maximizing potential profits, inclusive of harvesting techniques and process flow and engineering. ARTICLE 6 - HGF AND NVOS COMMITMENTS SCHEDULE 6.1 Upon execution of the proposal, HGF will provide necessary documentation for all land intended for use in the Primary Project including beneficial owners, addresses, and parcel size. + + + + + +6.2 Upon execution of the proposal, HGF will provide necessary documentation (allocated land) required for the completion of the construction and management package. 6.3 Harvesting schedule occurs as dictated by determined cash crop selection. Accompanying cash flow projections will be completed upon binding buyer contract receipt. ARTICLE 7 - PRINCIPLE AND LINE OF CREDIT RETURNS 7.1 Priority is given to all debt service requirements with principle pay-back schedule adherence based on cash flow actual conditions. Distribution to Parties as per agreement on a "last to issue" basis. ARTICLE 8 - TERM OF AGREEMENT 8.1 The initial term of this Agreement shall, unless sooner terminated by consent of all parties, expires in five (5) years from the date of Effective Date. NVOS and HGF may renew the Agreement within two (2) years of the expiry of the initial term upon mutual understanding. 8.2 It is understood that a subsequent renewal of a five (5) year term will be negotiated in good faith and shall carry terms very close to the original Agreement. 8.3 Both parties may enter into buyout negotiations with the other Party on terms agreeable to both Parties. ARTICLE 9 - OBLIGATIONS OF NVOS 9.1 To maintain all financial records of the Company and provide quarterly and annual reporting to all Company stakeholders. All records are kept under US GAAP compliance standards. 9.2 Assign and direct operational staff from onset to agreement termination. 9.3 To remunerate HGF on the basis of thirty percent (30%) of net Company income basis on an annual basis commencing 12 months after the first full 12-month revenue period. 9.4 To purchase product from the Company at a price of cost plus five percent (5%). 9.5 To issue two (2) million NVOS common stock upon successful target of twenty-five million dollars ($25M) of net profit achieved by the Company each fiscal year. NVOS common stock will be delivered to HGF via Novo Healthnet Limited ("NHL") exchangeable preferred shares. All parties understand NVOS is a U.S. reporting publicly traded corporation and that any NVOS common shares issued, from exchanging the NHL exchangeable preferred shares, will be provided under the guiding U.S. rules and regulations. Furthermore, all parties understand these shares will carry the same rights and conditions, with no special terms or conditions, as all NVOS common shares authorized for issue under the companies' Nevada Articles of Incorporation. Any NVOS common stock issued to HGF, on or after the date hereof, is subject to pro-rata adjustment in the event that NVOS shall, prior to the issuance date, approve any forward stock split, reverse stock split or other capitalization re-structure. + + + + + +ARTICLE 10 - OBLIGATIONS OF HGF 10.1 To assist the Company in any way deemed necessary by the Company in the marketing and sales of all cash crops associated to the Primary Project both domestically and internationally. 10.2 To maintain positive relations with agencies (government and environmental) ensuring continuing land use and development. 10.3 To promote and maintain positive public relations activities ensuring positive Company public opinion. 10.4 To grow medicinal agriculture crop at the highest standard, subject to independent third party biomass testing. 10.5 To grow in the most profitable manner while maintaining the standards of excellence required to maintain elite status. 10.6 To provide a minimum of seven thousand (7000) acres for the Primary Project to be identified by each individual lot, including size, and its placement in the annual rotation as per SCHEDULE A. ARTICLE 11 - MANAGEMENT PERSONNEL 11.1 All staffing, including but not limited to, management, specialized or general labor requirements for farming will be the sole responsibility of HGF. ARTICLE 12 - DIVIDEND DISTRIBUTIONS 12.1 The distribution will be based on NVOS audited review and will be made within three months of annual considerations on the basis of a seventy percent (70%) of net profit to NVOS and thirty percent (30%) of net profit to HGF. 12.2 The distribution will be based on NVOS audited review and will be made within three months of annual considerations. ARTICLE 13 - CURRENCY 13.1 Except where otherwise expressly provided, all amounts of monies referenced are in US dollars. ARTICLE 14 - BANKING AND ACCOUNTING 14.1 The Company will have a segregated bank account controlled by NVOS for general operating expenses and a segregated investment account for passive short-term secured investments. ARTICLE 15 - FINANCIAL STATEMENTS 15.1 The Company will prepare quarterly statements for review by the Parties, released on the 15th day of each subsequent quarter. + + + + + +15.2 The Company's audited annual filing will be prepared in accordance to NVOS requirements for the purposes of consolidation on a US GAAP accounting basis. 15.3 The Company's fiscal year is September 1 through August 31. ARTICLE 16 - TAXES 16.1 The Company will ensure timely remittance of all tax liabilities and ensure specific adherence to any specific tax considerations. HGF will ensure maximum tax reduction and where possible elimination of any tax consideration. ARTICLE 17 - PRESERVATION OF RECORDS 17.1 All company records will be kept for a minimum of five (5) years unless otherwise required by federal or provincial law. ARTICLE 18 - ASSIGNMENT BY NVOS 18.1 During the term of this agreement NVOS shall have the right to assign, transfer or sell all or part of its interest in the agreement upon the terms and conditions herein, subject only to prior written notice to HGF. ARTICLE 19 - ASSIGNMENT BY HGF 19.1 During the term of this agreement HGF shall have the right, upon written approval of NVOS, to assign, transfer or sell all or part of their interest in this agreement. ARTICLE 20 - BEST EFFORTS 20.1 NVOS and HGF covenant and agree to make their best efforts to fully develop the Primary Projects as well as all projects associated to this agreement as per this agreement at all times faithfully, honestly and diligently perform or cause to be performed their obligations hereunder and to continuously exert best efforts to promote and enhance the business and in that regards they hereby covenant and agree, so long as this Agreement shall remain in effect, to operate the business, as to preserve, maintain and enhance the reputation of NVOS and HGF through the Company. ARTICLE 21 - DISPUTES 21.1 The Parties shall negotiate in good faith and make every effort to settle any dispute, or claim, that may arise out of, or relate to, the Agreement. If agreement cannot be reached, an aggrieved Party shall, if he intends to proceed further in terms of Section 21.2 hereof, advise all other Parties in writing that negotiations have failed and that he intends to refer the matter to mediation in terms of Section 21.2. 21.2 Not earlier than ten (10) working days after having advised the other Party, in terms of Section 21.2, that negotiations in regard to a dispute have failed, an aggrieved Party may require that the dispute be referred, without legal representation, to mediation by a single mediator. The mediator shall be selected by agreement between the Parties. The costs of the mediation shall be borne equally by the Parties. + + + + + +The mediator shall convene a hearing of the Parties and may hold separate discussions with either Party and shall assist the Parties in reaching a mutually acceptable settlement of their differences through means of reconciliation, interpretation, clarification, suggestion and advice. The Parties shall record such agreement in writing and thereafter they shall be bound by such agreement. The mediator is authorised to end the mediation process whenever in his opinion further efforts at mediation would not contribute to a resolution of the dispute between the Parties. 21.3 Where a dispute or claim is not resolved by mediation, it shall be referred to arbitration by a single arbitrator to be selected by agreement between the Parties. The Party requiring referral to arbitration shall notify the other Party, in writing, thereof, not later than thirty (30) calendar days after the mediator has expressed his opinion, failing which the mediator's opinion shall be deemed to have been accepted by the Parties and shall be put into effect. Arbitration shall be conducted in accordance with the provisions of the Arbitration Act No. 42 of 1965, as amended, and in accordance with such procedure as may be agreed by the Parties or, failing such agreement, in accordance with the rules for the Conduct of Arbitrations published by the Association of Arbitrators and current at the date that the arbitrator is appointed. The decisions of the arbitrator shall be final and binding on the Parties, shall be carried into immediate effect and, if necessary, be made an order of any court of competent jurisdiction. ARTICLE 22 - INDEMNIFICATION 22.1 The Parties agree to mutually defend, indemnify and save one another harmless from and against any claims, demands, actions, losses, damages, costs, charges, liabilities and any expenses, including legal fees of whatever kind arising out of or in connection with each parties' activities conducted pursuant to this Agreement. ARTICLE 23 - CONFORMITY WITH LAWS 23.1 In this Agreement, the singular includes the plural and the masculine includes the feminine and neuter and vice versa unless the context otherwise requires. 23.2 If any provision or part of any provision in this Agreement is void for any reason or found to be unenforceable, it may be severed without affecting the validity and enforceability of the balance of the Agreement. 23.3 This Agreement binds and benefits the parties and their respective heirs, executors, administrators, personal representatives, successors and assigns. 23.4 This Agreement contains the sole and entire agreement between the parties and supersedes any and all other agreements, both verbal and written, between them. + + + + + +23.5 The parties agree that neither of them has made any representations with respect to the subject matter of this Agreement, or any representations inducing the execution and delivery hereof, except such representations as are specifically set forth herein. ARTICLE 24 - CONFIDENTIALITY 24.1 The parties shall keep confidential all business terms and conditions of this Agreement and neither shall release such information to any other party without the express written consent of the other, in the case of NVOS, it is understood that NVOS will be filing this Agreement with the Security Exchange Commission of the United States of America in a matter compliant to publicly listed company rules. ARTICLE 25 - ENTIRE AGREEMENT 25.1 No waiver or modification of this Agreement or of any covenant, condition or limitation herein contained shall be valid unless in writing and duly executed by the party to be charged therewith. 25.2 Furthermore, no evidence of any waiver or modification shall be offered or received in evidence in any proceeding, arbitration, or litigation between the parties arising out of or affecting this agreement, or the rights or obligations of any party hereunder, unless such waiver or modification is in writing, duly executed as aforesaid. 25.3 The provisions of this paragraph may not be waived as set forth herein. [Signatures Appear on Following Page] + + + + + +ARTICLE 26 - AFFIRMATION AND EXECUTION Novo Integrated Sciences Inc. By: /s/ Robert Mattacchione Name: Robert Mattacchione Title: CEO Date: December 19, 2019 Address for Notices: 119 Westcreek Drive Unit 1 Woodbridge, Ontario, Canada, L4L 9N6 Email: xxxxxxxxx@xxxxxxx.com Harvest Gold Farms Inc. By: /s/ Michael Scully Name: Michael Scully, BBA J.D. Title: President Date: December 19, 2019 Address for Notices: 866 E. H. Daigle Blvd. Grand Falls, New Brunswick, Canada, E3Z 3E8 Email: xxxxxxxxx@gmail.com + + + + + +SCHEDULE A Acreage Identification for the Primary Project Disclosed in certificate of Robert Mattacchione, dated December 18, 2019. \ No newline at end of file diff --git a/full_contract_txt/NUVEEN - REMARKETING AGREEMENT.txt b/full_contract_txt/NUVEEN - REMARKETING AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..97f4218bc8f6ef030934d410ed1802f9a63dba0d --- /dev/null +++ b/full_contract_txt/NUVEEN - REMARKETING AGREEMENT.txt @@ -0,0 +1,561 @@ +Exhibit s.2 + +NUVEEN AMT-FREE MUNICIPAL CREDIT INCOME FUND (NVG) + +AND + +NUVEEN FUND ADVISORS, LLC + +AND + +[●] + +REMARKETING AGREEMENT + +Dated as of [●] + +Series [●] MuniFund Preferred Shares + +Variable Rate Remarketed Mode + +(NVG - Series [●] MFP) + + + + + +Table of Contents Page Section 1. Definitions 1 Section 2. Appointment and Obligations of the Remarketing Agent 3 Section 3. Representations, Warranties and Covenants of the Remarketing Agent and the Fund 6 Section 4. Fees and Expenses 7 Section 5. Resignation, Suspension and Removal of the Remarketing Agent 7 Section 6. Dealing in the VRRM-MFP Shares 7 Section 7. Information 8 Section 8. Conditions to Obligations of the Remarketing Agent 9 Section 9. Indemnification 9 Section 10. Termination of Remarketing Agreement 12 Section 11. Remarketing Agent's Performance; Duty of Care 13 Section 12. Amendment, Supplement or Modification of Agreements 13 Section 13. Books and Records 13 Section 14. Governing Law 13 Section 15. Waiver of Jury Trial 14 Section 16. Certain Provisions to Survive Termination of Agreement 14 Section 17. Successors and Assigns 14 Section 18. Headings 14 Section 19. Severability 14 Section 20. Counterparts 14 Section 21. Remarketing Agent Not Acting as Underwriter 15 Section 22. Amendment 15 i + + + + + +Section 23. Benefits 15 Section 24. Notices and Wire Instructions 15 Section 25. Liability of Officers, Trustees and Shareholders 16 Section 26. Nonpetition Covenant 16 + +Exhibit A Form of Tender Notice (Optional Tenders) + +Exhibit B Form of Remarketing Notice (Optional and Mandatory Tenders, Mode Transition) + +Exhibit C Form of Failed Remarketing Notice (Optional and Mandatory Tenders, Mode Transition) + +Exhibit D Form of Retention Notice (Mandatory Tenders) ii + + + + + +REMARKETING AGREEMENT + +This REMARKETING AGREEMENT, dated as of [●] (this "Agreement"), by and among Nuveen AMT-Free Municipal Credit Income Fund, a closed-end investment company organized as a Massachusetts business trust (the "Fund"), Nuveen Fund Advisors, LLC, a registered investment adviser and wholly-owned subsidiary of Nuveen Investments, Inc. (the "Investment Adviser"), and [●] (the "Remarketing Agent"). + +WITNESSETH: + +WHEREAS, the Fund is issuing Series [●] MuniFund Preferred Shares, par value $.01 per share (the "MFP Shares"), with a liquidation preference of $[●] per share, pursuant to and with the preferences, voting powers, restrictions, limitations as to dividends, qualifications, and terms and conditions of redemption assigned to them in the Fund's Statement Establishing and Fixing the Rights and Preferences of Series [●] MuniFund Preferred Shares effective [●], as amended, revised or supplemented from time to time (the "Statement"), as modified with respect to the Initial Mode by the Supplement to the Statement Establishing and Fixing the Rights and Preferences of Series [●] MuniFund Preferred Shares Initially Designating the Variable Rate Remarketed Mode for the Series [●] MuniFund Preferred Shares effective [●], as amended, revised or supplemented from time to time (the "Supplement"; references in this Agreement to the Supplement shall be deemed to include the Statement); + +WHEREAS, the Fund has requested [●] to act as the Remarketing Agent under this Agreement while the MFP Shares are in the Variable Rate Remarketed Mode in accordance with the provisions of the Supplement (and the Board of Trustees of the Fund has adopted a resolution appointing [●] as the Remarketing Agent) to perform the duties set forth herein and to perform such other duties as are assigned to the Remarketing Agent herein and in the Supplement, all pursuant to the procedures set forth in the Supplement and this Agreement; + +WHEREAS, the Remarketing Agent is willing to assume such duties on the terms and conditions expressly set forth herein; + +NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, the parties hereto agree as follows: + +Section 1. Definitions. Capitalized terms used herein that are not otherwise defined shall have the meanings assigned to them in the Supplement. + +"1933 Act" means the Securities Act of 1933, as amended. + +"1933 Act Regulations" means the rules and regulations under the 1933 Act. + +"1934 Act" means the Securities Exchange Act of 1934, as amended. + +"1940 Act" means the Investment Company Act of 1940, as amended. + +"1940 Act Documents" has the meaning set forth in Section 3(b) hereof. 1 + + + + + +"1940 Act Regulations" means the rules and regulations under the 1940 Act. + +"Agreement" has the meaning set forth in the preamble. + +"Calculation and Paying Agent" means The Bank of New York Mellon acting pursuant to the Tender and Paying Agent Agreement or any successor thereto. + +"Commission" has the meaning set forth in Section 3(d) hereof. + +"Fund" has the meaning set forth in the preamble. + +"Indemnified Person" has the meaning set forth in Section 9(a) hereof. + +"Indemnifying Person" has the meaning set forth in Section 9(c) hereof. + +"Investment Adviser" has the meaning set forth in the preamble. + +"Losses" has the meaning set forth in Section 9(b) hereof. + +"MFP Shares" has the meaning set forth in the preamble. + +"Mode" has the meaning set forth in the Statement. + +"Prospectus" means the final prospectus, including the statement of additional information incorporated by reference therein, each dated [●], and the prospectus supplement, dated [●], relating to the initial offering of the VRRM-MFP Shares. + +"Registration Statement" means the Fund's registration statement (No. 333-226136 and No. 811-09475), relating to the MFP Shares and other securities of the Fund, declared effective by order of the Commission on October [●], 2018, as it may be amended from time to time. + +"Remarketing Agent" has the meaning set forth in the preamble. + +"Remarketing Materials" has the meaning set forth in Section 7(b) hereof. + +"Remarketing Memorandum" means the Prospectus or any other written communication describing the Fund and/or the terms of the VRRM-MFP Shares, which has been approved by the Fund in writing for use in connection with remarketing prior to its use, which approval shall not be unreasonably withheld or delayed. + +"Representation Date" has the meaning set forth in Section 3(b) hereof. + +"Statement" has the meaning set forth in the preamble. + +"Supplement" has the meaning set forth in the preamble. + +"Transition Remarketing" means a remarketing in connection with a Mode change pursuant to Article 3 of the Supplement. 2 + + + + + +"VRRM-MFP Shares" means the MFP Shares while in the Variable Rate Remarketed Mode pursuant to the Supplement. + +Section 2. Appointment and Obligations of the Remarketing Agent. + +(a) Appointment. The Fund hereby appoints [●], and [●] hereby accepts such appointment, as the exclusive Remarketing Agent of the VRRM-MFP Shares for the Variable Rate Remarketed Mode for the purpose of establishing on each Business Day the Dividend Rate in respect of the VRRM-MFP Shares and, in connection with a tender, remarketing such VRRM-MFP Shares on behalf of the Beneficial Owners or Holders thereof, as applicable, and calculating the Purchase Price therefor, among other things; and performing such other duties as are assigned to the Remarketing Agent in the Supplement, all pursuant to the procedures set forth in the Supplement and this Agreement. + +(b) General Duties. The Remarketing Agent agrees with respect to the VRRM-MFP Shares to: + +(i) use its best efforts to remarket Tendered VRRM-MFP Shares in connection with an optional tender or mandatory tender of VRRM-MFP Shares as provided in the Supplement, but shall in no way be liable if no purchasers are found, provided it has otherwise performed its obligations as set forth in this Agreement and the Supplement; + +(ii) calculate the Purchase Price to be paid in connection with a remarketing of VRRM-MFP Shares. + +(iii) establish the Dividend Rate as provided in the Supplement; provided, that the Dividend Rate may not exceed the Maximum Rate; + +(iv) notify the Fund and the Calculation and Paying Agent of the Dividend Rate by Electronic Means and post the Dividend Rate on Bloomberg promptly on each date of determination of the Dividend Rate as provided in the Supplement; in the case of the notice to the Fund and the Calculation and Paying Agent with respect to the Step-Up Dividend Rate, such notice shall set forth in reasonable detail the basis for and calculation of the highest rate as determined by the Remarketing Agent; + +(v) provide any other notices to be provided by the Remarketing Agent to the Fund, the Calculation and Paying Agent, Holders and Beneficial Owners as set forth in the Supplement; + +(vi) make available to a Beneficial Owner, upon request by such Beneficial Owner in connection with a remarketing, a copy of the Contact Notification Form (as such term is defined in the Tender and Paying Agent Agreement); + +(vii) make available to a Beneficial Owner or a former Beneficial Owner, upon request by such Beneficial Owner or former Beneficial Owner (as the case may be) in 3 + + + + + +connection with a remarketing, a copy of the Cancellation Form (as such term is defined in the Tender and Paying Agent Agreement); and + +(viii) carry out such other duties as are assigned to the Remarketing Agent herein and in the Supplement, or as are reasonably requested by the Fund and agreed to by the Remarketing Agent, all in accordance with the provisions in this Agreement and the Supplement. + +(c) Remarketing at Purchase Price; Principal to Principal Basis. It is further understood and agreed by and between the parties that, in connection with any attempted remarketing, all Tendered VRRM-MFP Shares shall be remarketed at the Purchase Price of such VRRM-MFP Shares. With respect to the Remarketing Agent's responsibilities, but without affecting the Calculation and Paying Agent's role as intermediary (if applicable), the Remarketing Agent hereby agrees that, if the Remarketing Agent obtains a bid at the Purchase Price for any VRRM-MFP Shares being remarketed, which, if accepted, would be binding on the bidder for the consummation of the sale of such VRRM-MFP Shares (an "actionable bid"), and the Remarketing Agent elects in its sole discretion to accept such actionable bid, the Remarketing Agent shall (i) purchase the Tendered VRRM-MFP Shares, as a principal and not as an agent, from the Beneficial Owner or Holder thereof on the Purchase Date at the Purchase Price, (ii) resell such VRRM-MFP Shares, as a principal and not as an agent, to the Person making such actionable bid at the Purchase Price, and (iii) record such purchase and resale on its books and records in accordance with this provision. Any such purchases by the Remarketing Agent from the Beneficial Owner or Holder shall be made with the Remarketing Agent's own funds. + +(d) Optional Tender for Remarketing Notices. If, in connection with an optional tender for remarketing in accordance with Section 2.2(a) of the Supplement, a Beneficial Owner tendering VRRM-MFP Shares for remarketing delivers to the Remarketing Agent a Tender Notice in substantially the form of and containing the information set forth in Exhibit A hereto and the Remarketing Agent identifies a purchaser for the Tendered VRRM-MFP Shares during the related Remarketing Window, the Remarketing Agent shall deliver a Remarketing Notice in substantially the form of and containing the information set forth in Exhibit B hereto to the Beneficial Owner of the Tendered VRRM-MFP Shares, with a copy to the Fund and the Calculation and Paying Agent as provided in Section 2.2(a) of the Supplement. Upon the occurrence of a Failed Remarketing Event, the Remarketing Agent shall provide a Failed Remarketing Notice in substantially the form of and containing the information set forth in Exhibit C hereto to the Holders, the Fund and the Calculation and Paying Agent as provided in Section 2.2(b) of the Supplement. + +(e) Mandatory Tender for Remarketing Notices. In connection with a mandatory tender for remarketing in accordance with Section 2.2(c) of the Supplement, the Remarketing Agent shall provide a Remarketing Notice in substantially the form of and containing the information set forth in Exhibit B hereto to the Holders, the Fund and the Calculation and Paying Agent as provided in Section 2.2(c) of the Supplement. Each Beneficial Owner wishing (and eligible) to retain its VRRM-MFP Shares shall provide a Retention Notice in substantially the form of and containing the information set forth in Exhibit D hereto to the Remarketing Agent 4 + + + + + +and the Calculation and Paying Agent as provided in Section 2.2(c) of the Supplement. Upon the occurrence of a Failed Remarketing Event, the Remarketing Agent shall provide a Failed Remarketing Notice in substantially the form of and containing the information set forth in Exhibit C hereto to the Holders, the Fund and the Calculation and Paying Agent as provided in Section 2.2(c) of the Supplement. + +(f) Mode Change Notices. In connection with a mandatory tender for remarketing for a transition to a new Mode in accordance with Section 3.2 of the Supplement, the Remarketing Agent shall provide a Remarketing Notice in substantially the form of and containing the information set forth in Exhibit B hereto to the Holders, the Fund and the Calculation and Paying Agent as provided in Section 3.2(c) of the Supplement. Upon the occurrence of a Failed Remarketing Event, the Remarketing Agent shall provide a Failed Remarketing Notice in substantially the form of and containing the information set forth in Exhibit C hereto to the Holders, the Fund and the Calculation and Paying Agent as provided in Section 3.2(c) of the Supplement. + +(g) Book-Entry Procedures. Except as otherwise expressly provided for herein, the purchase and delivery of Tendered VRRM-MFP Shares and the remarketing thereof, and payments with respect to the foregoing, will be accomplished in accordance with the applicable procedures of the Securities Depository. + +(h) Return of Unsold VRRM-MFP Shares. Any VRRM-MFP Shares unsold in a remarketing will be returned to the relevant tendering Beneficial Owners or their Agent Members, or the relevant tendering Holders, as the case may be, by the Remarketing Agent; provided that such tender will continue until the earlier of the occurrence of a successful remarketing or the Failed Remarketing Mandatory Redemption Date. + +(i) Timing Requirements. The Remarketing Agent agrees to the remarketing timing requirements applicable to it in the Supplement. The Remarketing Agent may, in its sole discretion, modify the settlement procedures set forth therein with respect to any Remarketing upon ten (10) days' prior written notice to the Fund and the Calculation and Paying Agent, provided any such modification does not adversely affect the Holders, the Beneficial Owners, the Calculation and Paying Agent or the Fund. + +(j) Purchases by Remarketing Agent. If the Remarketing Agent in its sole discretion decides to purchase unsold VRRM- MFP Shares for its own account, on each Purchase Date, the Remarketing Agent will settle such purchase through delivery against payment of the Purchase Price for such VRRM-MFP Shares to be received by the Remarketing Agent by 11:00 a.m., New York City time, on such Purchase Date. The Remarketing Agent is not obligated to purchase any VRRM-MFP Shares that would otherwise remain unsold in a remarketing. + +(k) Sales by Remarketing Agent for its Own Account. It is expressly understood and agreed by the parties hereto that VRRM-MFP Shares as to which the Remarketing Agent is the Beneficial Owner may be held by the Remarketing Agent for its own account or for the account of others, and may be sold in a remarketing or otherwise sold by the Remarketing Agent. The Remarketing Agent may sell VRRM-MFP Shares for its own account outside of a remarketing at a price other than the Purchase Price. 5 + + + + + +(l) Notice of Taxable Allocations. Whenever the Fund intends or expects to include any Taxable Allocation in any dividend on VRRM-MFP Shares, the Fund shall provide a Notice of Taxable Allocation in accordance with Section 2.7(a) of the Supplement. Whenever such advance notice is received from the Fund, the Calculation and Paying Agent will notify each Holder and the Remarketing Agent. The Remarketing Agent shall promptly notify each potential Beneficial Owner or its Agent Member after receipt of such advance notice by the Remarketing Agent. + +Section 3. Representations, Warranties and Covenants of the Remarketing Agent and the Fund. + +(a) The Remarketing Agent hereby represents, warrants and agrees that it has, and during the term of this Agreement shall maintain, all licenses, consents and other rights required for the use of any index or other data in connection with calculation of the Dividend Rate or dissemination thereof. + +(b) The Fund represents and warrants to, and agrees with, the Remarketing Agent as as of each Purchase Date, Remarketing Date or New Mode Commencement Date, as applicable (each, a "Representation Date"), that (i) the Fund has made all the filings with the United States Securities and Exchange Commission (the "Commission") that are required to be made under the 1940 Act and the 1940 Act Regulations (collectively, the "1940 Act Documents"), (ii) each 1940 Act Document complies in all material respects with the requirements of the 1940 Act and the 1940 Act Regulations, and each 1940 Act Document did not at the time of filing with the Commission include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading and (iii) the applicable Remarketing Materials, as amended or supplemented, including by any subsequently filed 1940 Act Document on or prior to such Representation Date (or, if applicable, by any document filed pursuant to the 1933 Act and the 1933 Act Regulations), as provided by the Fund, will not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; provided, however, that the Fund makes no representations or warranties with respect to information provided by the Remarketing Agent specifically for use in the Remarketing Materials. + +(c) The financial statements included or incorporated by reference in the 1940 Act Documents, together with the related notes and schedules, present fairly the financial position of the Fund as of the dates indicated and the results of operations, cash flows and changes in shareholders' equity of the Fund for the periods specified and have been prepared in compliance with the requirements of the 1940 Act and the 1940 Act Regulations and in conformity with U.S. generally accepted accounting principles applied on a consistent basis during the periods involved; the other financial and statistical data contained or incorporated by reference in the 1940 Act Documents are accurately and fairly presented and prepared on a basis consistent with the financial statements and books and records of the Fund. + +(d) The Fund agrees (i) to deliver to the Remarketing Agent, within fifteen (15) calendar days following the last day of each calendar month beginning with [●], a report of 6 + + + + + +portfolio holdings of the Fund as of the close of business as of the last Business Day of such calendar month, listing portfolio holdings of the Fund by CUSIP and principal amount, and (ii) that, on or after such fifteenth calendar day (or earlier, with the Fund's prior approval) the Remarketing Agent may provide such report and/or the information therein to investors in the VRRM- MFP Shares, upon the investor's request. + +Section 4. Fees and Expenses. For the performance of its services as Remarketing Agent hereunder, the Fund shall pay to the Remarketing Agent in arrears on the first day of each calendar month (or, if such day is not a Business Day, on the next succeeding Business Day) a monthly fee for each MFP Share Outstanding on the first calendar day of the preceding calendar month (or the date hereof in the case of the first such payment), in an amount, rounded upward to the nearest dollar, equal to (a) the product of (i) the rate of compensation as then in effect, as shall be agreed upon from time to time in writing by the Fund and the Remarketing Agent, times $[●] multiplied by (ii) the actual number of days from and including such first calendar day of the preceding calendar month (or the date hereof in the case of the first such payment) to and including the last calendar day of such preceding calendar month or, if applicable, the date of termination of this Agreement, if earlier, or the date of any prior redemption or liquidation for such share (as the case may be), divided by (b) 360. The obligation of the Fund to make the payments required by this Section shall survive the termination of this Agreement and remain in full force and effect until all such payments shall have been made in full. + +Section 5. Resignation, Suspension and Removal of the Remarketing Agent. + +(a) The Remarketing Agent may resign and be discharged from its duties and obligations hereunder with respect to the VRRM-MFP Shares by giving 90 days' prior written notice to the Fund and the Calculation and Paying Agent. + +(b) The Fund may remove the Remarketing Agent with respect to the VRRM-MFP Shares by giving at least 60 days' prior written notice to the Remarketing Agent (and will provide prior notice also to the Calculation and Paying Agent, if any); provided, however, that no such removal shall become effective for an additional 30 days unless the Fund shall have appointed at least one nationally recognized securities dealer with expertise in remarketing variable rate securities as a successor Remarketing Agent for the VRRM-MFP Shares and the successor Remarketing Agent shall have entered into a remarketing agreement with the Fund, in form and substance satisfactory to the Fund, in which it shall have agreed to, among other duties, conduct remarketings in respect of VRRM-MFP Shares and determine the Dividend Rate on each Business Day for the VRRM-MFP Shares in accordance with the terms and conditions of the Supplement. + +In each of the occurrences described in clause (a) or (b), the Fund shall use its best efforts to appoint a successor Remarketing Agent for such VRRM-MFP Shares and enter into a remarketing agreement with such Person as soon as reasonably practicable. + +Section 6. Dealing in the VRRM-MFP Shares. The Remarketing Agent in its sole discretion may purchase for its own account VRRM-MFP Shares in a remarketing; however, subject to the last two sentences in Section 2(c) above, the Remarketing Agent shall not be obligated to purchase any VRRM-MFP Shares that would otherwise remain unsold in a 7 + + + + + +remarketing. None of the Fund, the Calculation and Paying Agent nor the Remarketing Agent (subject to the last sentence in Section 2(c) above) shall be obligated in any case to provide funds to make payment to a Beneficial Owner or its Agent Member or a Holder upon such Beneficial Owner's or Holder's tender of its VRRM-MFP Shares in a remarketing unless, in each case, such VRRM-MFP Shares were acquired for the account of the Fund, the Calculation and Paying Agent or the Remarketing Agent, as applicable. The Remarketing Agent may exercise any vote or join in any action which any Holder of VRRM-MFP Shares may be entitled to exercise or take pursuant to the Statement with like effect as if it did not act in any capacity hereunder. The Remarketing Agent, in its individual capacity, either as principal or agent, may also engage in or have an interest in any financial or other transaction with the Fund as freely as if it did not act in any capacity hereunder. + +Section 7. Information. + +(a) The Fund agrees to furnish to the Remarketing Agent: (i) copies of the Registration Statement, the Prospectus, the Statement, the Supplement and its bylaws and any amendment thereto and each report or other document mailed or made available to Holders (including annual reports to shareholders) or filed by the Fund with the Commission (including any documents incorporated therein by reference) as the Remarketing Agent may reasonably request from time to time; (ii) notice of the creation of any subsidiary by the Fund; (iii) notice of the purchase of VRRM-MFP Shares by a subsidiary or affiliate of the Fund as soon as the Fund shall become aware of such purchase; (iv) notice of any change (including being put on Credit Watch or Watchlist), suspension or termination in or of the ratings on the VRRM-MFP Shares by any NRSRO then rating the VRRM-MFP Shares or any change of an NRSRO rating the VRRM-MFP Shares as promptly as practicable upon the occurrence thereof or the occurrence of any of the events set forth in clause (b)(i) or (b)(ii) of Section 8 hereof (with the occurrence of any of the events described in clause (b)(ii) to be determined without regard to the opinion of the Remarketing Agent referred to therein); and (v) in connection with a remarketing, a Remarketing Memorandum, and such other remarketing information, as the Remarketing Agent may reasonably request from time to time, including but not limited to the financial condition of the Fund. The Fund agrees to provide the Remarketing Agent with as many copies of the foregoing materials and information as the Remarketing Agent may reasonably request for use in connection with a remarketing or Transition Remarketing, as the case may be, of VRRM-MFP Shares and consents to the use thereof for such purpose. + +(b) If at any time during the term of this Agreement any event or condition known to the Fund relating to or affecting the Fund or the VRRM-MFP Shares shall occur which might affect the accuracy or completeness of any statement of a material fact contained in any of the reports, documents, materials and information referred to in clause (a)(v) above or any document incorporated therein by reference (collectively, the "Remarketing Materials") or any other materials or information made publicly available by the Fund, the Fund shall promptly notify the Remarketing Agent in writing of the circumstances and details of such event or condition and the Fund shall promptly prepare or cause to be prepared and delivered to the Remarketing Agent, at the Fund's expense, a supplement or amendment to the Remarketing Materials describing the circumstances and details of such event or condition. 8 + + + + + +Section 8. Conditions to Obligations of the Remarketing Agent. The obligations of the Remarketing Agent with respect to VRRM-MFP Shares under this Agreement have been undertaken in reliance on, and shall be subject to: (a) the due performance in all material respects by the Fund of its obligations and agreements as set forth in this Agreement (including Sections 3(c) and 7(b) hereof); and (b) the non-occurrence of any of the following events: (i) all of the VRRM-MFP Shares shall have been redeemed by the Fund; (ii) without the prior written consent of the Remarketing Agent, the Supplement, the Statement, the Declaration, the by-laws of the Fund, or the Tender and Paying Agent Agreement shall either not be in full force and effect or have been amended in any manner that in the reasonable opinion of the Remarketing Agent materially changes the nature of the VRRM- MFP Shares or the remarketing procedures; (iii) legislation, or a decision by a court of the United States shall be rendered, or a stop order, ruling, regulation or official statement by, or on behalf of, the Commission or other governmental agency having jurisdiction of the subject matter shall be made, to the effect that the offering or sale of the VRRM-MFP Shares is or would be in violation of any provision of the 1933 Act as then in effect, or the 1934 Act as then in effect, or with the purpose or effect of otherwise prohibiting the offering or sale of the VRRM-MFP Shares, as contemplated hereby, without registration under the 1933 Act; (iv) any legislation, resolution, ordinance, rule or regulation shall be enacted by, any governmental body, department or agency of the United States or the State of New York, or a decision by any court of competent jurisdiction within the United States or the State of New York shall be rendered, which, in the Remarketing Agent's reasonable opinion, materially adversely affects the marketability of the VRRM-MFP Shares; (v) additional material restrictions not in force as of the date hereof shall have been imposed upon trading in securities generally by any governmental authority or by any national securities exchange, which, in the Remarketing Agent's reasonable opinion, would cause the performance of the Remarketing Agent's obligations hereunder to violate applicable law; (vi) any litigation shall be instituted and be outstanding, to restrain or enjoin the sale or remarketing of the VRRM-MFP Shares or in any way protesting or affecting any authority of the Fund with respect to the validity of the VRRM- MFP Shares or this Agreement, or the existence or powers of the Fund to perform its obligations hereunder; (vii) a general banking moratorium has been declared by federal or New York authorities having jurisdiction, a material disruption in commercial banking or securities settlement or clearance services or a force majeure event shall have occurred which in the reasonable opinion of the Remarketing Agent materially adversely affects the settlement or clearance of the VRRM-MFP Shares; or (viii) a material misstatement or omission in the Remarketing Materials has occurred, so that it is not advisable, in the reasonable judgment of the Remarketing Agent, to attempt to remarket the VRRM-MFP Shares, provided that the Remarketing Agent, upon identifying any such material misstatement or omission in the Remarketing Materials, shall promptly notify the Fund. In the event of the failure of any such conditions with respect to the VRMM-MFP Shares, the Remarketing Agent may terminate its obligations under this Agreement with respect to the VRMM-MFP Shares as provided in Section 10(b). + +Section 9. Indemnification. + +(a) The Fund and the Investment Adviser, jointly and severally, agree to indemnify and hold harmless the Remarketing Agent and its respective officers, directors, employees and control persons within the meaning of the 1934 Act (collectively, the "Indemnified Persons" 9 + + + + + +and individually, an "Indemnified Person") from and against any losses, claims, damages or liabilities to which any Indemnified Person may become subject insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of, or are based upon, any untrue statement or alleged untrue statement of a material fact contained in any of the Remarketing Materials or the omission or alleged omission to state therein a material fact necessary to make the statements therein, in the light of the circumstances in which they were made, not misleading (except with respect to information provided by the Remarketing Agent specifically for use therein), or arise out of, or are based upon, any violation by the Fund or the Investment Adviser of, or any failure by the Fund or the Investment Adviser to perform, any of its obligations under, this Agreement. The Fund and the Investment Adviser agree to promptly reimburse each Indemnified Person for any legal or other expenses reasonably incurred by such Indemnified Person in investigating, defending or preparing to defend any such action or claim; provided, however, that neither the Fund nor the Investment Adviser shall be liable in any such case to the extent that any such loss, claim, damage or liability arises out of the use by the Remarketing Agent of any information that is not contained in the Remarketing Materials (in the form provided for use in connection with the remarketing). The indemnity agreement in this paragraph shall be in addition to any liability or obligation which the Fund or the Investment Adviser may otherwise have to any Indemnified Person and shall extend upon the same terms and conditions to each Person, if any, who controls any Indemnified Person within the meaning of the 1934 Act. + +(b) The Fund agrees to indemnify and hold harmless the Indemnified Persons from and against every loss, liability or expense, including without limitation, damages, fines, suits, actions, demands, costs, out-of-pocket expenses, and reasonable legal fees and expenses (collectively, "Losses"), that may be imposed on, incurred by, or asserted against, any Indemnified Person for or in respect of its (1) execution and delivery of this Agreement, (2) compliance or attempted compliance with or reliance upon any instruction or other direction upon which the Remarketing Agent is authorized to rely pursuant to the terms of this Agreement and (3) performance under this Agreement, except to the extent that the Loss resulted from such Indemnified Person's gross negligence, willful misconduct, bad faith, violations of law or violations of the terms and conditions of this Agreement. For the avoidance of doubt, the Fund agrees to indemnify and hold harmless the Indemnified Persons from and against any and all Losses that may be imposed on, incurred by, or asserted against, any Indemnified Person for or in respect of the failure of the Remarketing Agent to deliver Remarketing Materials during the course of a remarketing, if such failure is due to the failure by the Fund to provide to the Remarketing Agent such Remarketing Materials for delivery (regardless of whether the Remarketing Agent has requested such Remarketing Materials), notwithstanding that such failure by the Remarketing Agent to deliver Remarketing Materials during the course of a Remarketing could be deemed a violation of law by an Indemnified Person. The indemnity agreement in this paragraph shall be in addition to any liability or obligation which the Fund may otherwise have to any Indemnified Person. + +(c) Each Indemnified Person shall give notice as promptly as reasonably practicable to each of the Fund and the Investment Adviser (collectively, the "Indemnifying Persons" and individually, an "Indemnifying Person") of any action commenced against it in respect of which indemnity may be sought hereunder, but failure to so notify the Indemnifying Persons 10 + + + + + +shall not relieve any Indemnifying Person from any liability which it may have otherwise than on account of this indemnity agreement. No settlement or compromise of any such action shall be made without the consent of the Indemnifying Persons, which consent shall not be unreasonably withheld. + +(d) In case any such action is brought against any Indemnified Person, and it notifies each Indemnifying Person from which it seeks indemnification of the commencement thereof, such Indemnifying Person (which may be the Fund and/or the Investment Adviser, in the case of notification of either) will be entitled to participate in, and, to the extent that it may wish, jointly with any other Indemnifying Person, similarly notified, to assume the defense thereof so long as its interests are not adverse to those of the Indemnified Person, with counsel reasonably satisfactory to such Indemnified Person, and after notice from each Indemnifying Person to such Indemnified Person of its election to assume the defense thereof, the Indemnifying Person will not be liable to such Indemnified Person under this Section 9 for any legal or other expenses subsequently incurred by such Indemnified Person in connection with the defense thereof other than reasonable costs of investigation. Upon assumption by any Indemnifying Person of the defense of any such action or proceeding, the Indemnified Person shall have the right to participate in such action or proceeding and to retain its own counsel but the Indemnifying Person shall not be liable for any legal expenses of other counsel subsequently incurred by such Indemnified Person in connection with the defense thereof unless (i) the Indemnifying Person has agreed to pay such fees and expenses, (ii) the Indemnifying Person shall have failed to employ counsel reasonably satisfactory to the Indemnified Person in a timely manner, or (iii) the Indemnified Person shall have been advised by counsel that there are actual or potential conflicting interests between the Indemnifying Persons and the Indemnified Person, including situations in which there are one or more legal defenses available to the Indemnified Person that are different from or additional to those available to each of the Fund and the Investment Adviser. If the Indemnifying Person elects not to assume the defense of any such suit, it will reimburse the Indemnified Persons for the reasonable fees and expenses of any counsel retained by them. In the event that the parties to any such action (including impleaded parties) include one or more Indemnifying Persons and one or more Indemnified Persons, and one or more Indemnified Persons shall have been advised by counsel reasonably satisfactory to each Indemnifying Person that there may be one or more legal defenses available to any of the Indemnified Persons, which are different from, additional to, or in conflict with those available to any of the Indemnifying Persons, the Indemnifying Persons will reimburse the Indemnified Persons for the reasonable fees and expenses of any counsel retained by the Indemnified Persons (it being understood that the Indemnifying Persons shall not, in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the reasonable fees and expenses of more than one separate firm of attorneys (plus local counsel) for all Indemnified Persons, which firm shall be designated by the Indemnified Persons, the Remarketing Agent or each Indemnifying Person, as the case may be). Each Indemnifying Person agrees promptly to notify each Indemnified Person of the commencement of any litigation or proceedings against it in connection with the remarketing of the VRRM-MFP Shares. No Indemnifying Person shall consent to the terms of any compromise or settlement of any action defended by any Indemnifying Person in accordance with the foregoing without the prior consent of the Indemnified Person. No Indemnifying Person shall be liable under this Section 9 for the amount of any compromise or settlement of any action 11 + + + + + +unless such compromise or settlement has been approved in writing by such Indemnifying Person, which approval shall not be unreasonably withheld. + +(e) If the indemnification provided for in subparagraph (a) of this Section 9 is unavailable, because of limitations imposed by securities laws or for any other reason, to a party that would otherwise have been an Indemnified Person under subparagraph (a) above in respect of any losses, claims, damages or liabilities (or actions in respect thereof) referred to therein, then the party that would have been an Indemnifying Person thereunder shall, in lieu of indemnifying such Indemnified Person, contribute to the amount paid or payable by such Indemnified Person as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion so that the Remarketing Agent is responsible for that portion represented by the percentage that the Remarketing Agent's fee (calculated for a one year period) with respect to such remarketing bears to the aggregate liquidation preference of such VRRM-MFP Shares being remarketed but will not exceed the amount of such fee (calculated for a one year period) and each of the Fund and the Investment Adviser is responsible for the balance; provided, however, that no person guilty of fraudulent misrepresentation within the meaning of Section 11(f) of the 1933 Act shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation within the meaning of Section 11(f) of the 1933 Act. The amount paid or payable by an Indemnified Person as a result of the losses, claims, damages or liabilities (or actions in respect thereon referred to above in this subparagraph (e)) shall be deemed to include any legal or other expenses reasonably incurred by such Indemnified Person in connection with investigating or defending any such action or claims (which shall be limited as provided in this subparagraph (e) above if the Indemnifying Person has assumed the defense of any such action in accordance with the provisions thereof). + +(f) The indemnity agreements contained in clauses (a), (b) and (c) of this Section 9 shall remain operative and in full force and effect, regardless of any investigation made by or on behalf of the Remarketing Agent, and shall survive the termination or cancellation of this Agreement and the remarketing of any VRRM-MFP Shares hereunder. + +Section 10. Termination of Remarketing Agreement. (a) This Agreement shall terminate as to the Remarketing Agent and its obligations hereunder with respect to VRRM-MFP Shares upon the earliest to occur of (a) the effective date of the resignation or removal of such Remarketing Agent pursuant to Section 5(a) and Section 5(b), respectively, (b) the completion of a successful Transition Remarketing on a New Mode Commencement Date in connection with transition to a new Mode, or (c) the date on which no VRRM-MFP Shares are Outstanding. + +(b) In addition, the Remarketing Agent may terminate this Agreement and all of its obligations hereunder with respect to the VRRM-MFP Shares, by notifying the Fund and the Calculation and Paying Agent of its election to do so, if any of the conditions referred to or set forth in Section 8 hereof with respect to the VRRM-MFP Shares have not been met or satisfied in full and such failure shall have continued for a period of 30 days after the Remarketing Agent has given notice thereof to the Fund specifying the condition which has not been met and requiring it to be met; provided, however, that termination of this Agreement with respect to the VRRM-MFP Shares by the Remarketing Agent after giving the required notices with respect to the VRRM- MFP Shares shall be immediate in the event of the occurrence and continuation of 12 + + + + + +any event set forth in Section 8(b)(i), (ii), (iii) or (iv) hereof with respect to the VRRM-MFP Shares, or in the event the Remarketing Agent determines, in its sole discretion, that it shall not have received all of the information, whether or not specifically referenced herein, necessary to fulfill its obligations under this Agreement with respect to the VRRM-MFP Shares. + +Section 11. Remarketing Agent's Performance; Duty of Care. + +(a) The duties and obligations of the Remarketing Agent shall be determined solely by the express provisions of this Agreement and the Supplement. No implied covenants or obligations shall be read into this Agreement, or the Supplement. In the absence of bad faith on the part of the Remarketing Agent, the Remarketing Agent may conclusively rely upon any document furnished to it, which purports to conform to the requirements of this Agreement and the Statement, as to the truth of the statements expressed in any of such documents. The Remarketing Agent shall be protected in acting upon any document or communication reasonably believed by it to have been signed, presented or made by the proper party or parties. The Remarketing Agent shall incur no liability to the Fund, the Investment Adviser, the Calculation and Paying Agent or to any Beneficial Owner (or its Agent Member) or any Holder of the VRRM-MFP Shares in its individual capacity or as Remarketing Agent for any action or failure to act, in connection with its duties under this Agreement and the Supplement or otherwise, except as a result of bad faith, gross negligence or willful misconduct on its part. + +(b) The Remarketing Agent shall not be responsible or liable for any failure or delay in the performance of its obligations under this Agreement arising out or caused by the failure of any other party (other than an affiliate of the Remarketing Agent) to provide any notice, statement or document required to be delivered pursuant to any Related Document in connection with performance by the Remarketing Agent of the relevant obligation. + +Section 12. Amendment, Supplement or Modification of Agreements. Without the prior written consent of the Remarketing Agent, the Fund will not agree or consent to any amendment, supplement or modification of the Tender and Paying Agent Agreement, this Agreement or the Supplement, nor waive any provision thereof, if such amendment, supplement, modification or waiver would materially adversely affect the interests of the Remarketing Agent, in the Remarketing Agent's sole discretion; provided, that, for purposes of this Section 12, any changes or amendments to the rating agency criteria provided in the Supplement for the VRRM-MFP Shares shall not be deemed to materially adversely affect the interests of the Remarketing Agent. + +Section 13. Books and Records. The Remarketing Agent shall keep such books and records with respect to the performance of its duties hereunder as shall be consistent with prudent industry practice and shall, to the extent permitted by law, make such books and records available for inspection by the Fund on reasonable notice during normal business hours. Any costs and expenses associated with such inspections shall be for the account of the party requesting such inspection. + +Section 14. Governing Law. This Agreement shall be construed in accordance with and governed by the laws of the State of New York, except Section 25 below, which shall be construed in accordance with and governed by the laws of the Commonwealth of Massachusetts, 13 + + + + + +in each case without regard to conflict of laws principles that would require the application of the laws of another jurisdiction. + +THE PARTIES HERETO HEREBY SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF THE FEDERAL AND NEW YORK STATE COURTS LOCATED IN THE CITY OF NEW YORK IN CONNECTION WITH ANY DISPUTE RELATED TO THIS AGREEMENT OR ANY MATTERS CONTEMPLATED HEREBY. + +Section 15. Waiver of Jury Trial. The Fund, the Investment Adviser and the Remarketing Agent hereby waive trial by jury in any action, proceeding or counterclaim brought by any of the parties hereto against the other on any matters whatsoever arising out of or in any way connected with this Agreement. + +Section 16. Certain Provisions to Survive Termination of Agreement. Regardless of any termination of this Agreement pursuant to Section 10 hereof, the obligations of the Fund and the Investment Adviser pursuant to Sections 3, 4 and 9 hereof and of the Remarketing Agent pursuant to Section 9 hereof shall remain operative and in full force and effect until fully satisfied. + +Section 17. Successors and Assigns. The rights and obligations of the Fund and the Investment Adviser hereunder may not be assigned or delegated to any other person without the prior written consent of the Remarketing Agent. The rights and obligations of the Remarketing Agent hereunder may not be assigned or delegated to any other person without the prior written consent of the Fund. This Agreement shall inure to the benefit of and be binding upon the Fund, the Investment Adviser and the Remarketing Agent and their respective permitted successors and assigns, and, subject to Section 23, will not confer any benefit upon any other person, partnership, association or corporation other than persons, if any, controlling any Remarketing Agent within the meaning of Section 15 of the 1933 Act, or Section 20 of the 1934 Act, or any Indemnified Person to the extent provided in Section 9 hereof. As used in this Section 17, the terms "successors" and "assigns" shall not include any purchaser of VRRM-MFP Shares merely because of such purchase. + +Section 18. Headings. The section headings herein are for convenience of reference only, and it is agreed that such section headings are not a part of this Agreement and will not be used in the interpretation of any provisions of this Agreement. + +Section 19. Severability. If any provision of this Agreement shall be held or deemed to be or shall, in fact, be invalid, inoperative or unenforceable as applied in any particular case in any or all jurisdiction or jurisdictions, because it conflicts with any provision of any constitution, statute, rule of public policy, or for any other reason, such circumstances shall not have the effect of rendering the provision in question invalid, inoperative or unenforceable in any other case, circumstance or jurisdiction, or of rendering any other provision or provisions of this Agreement invalid, inoperative or unenforceable to any extent whatsoever. + +Section 20. Counterparts. This Agreement may be executed in several counterparts, each of which shall be regarded as an original and all of which shall constitute one and the same document. 14 + + + + + +Section 21. Remarketing Agent Not Acting as Underwriter. It is understood and agreed by the parties hereto that the only obligations of the Remarketing Agent hereunder are as set forth in Sections 2, 3, 9 and 13 hereof. When engaged in remarketing any properly-Tendered VRRM-MFP Shares, the Remarketing Agent shall act only as agent for and on behalf of each owner of the VRRM-MFP Shares so tendered. The Remarketing Agent shall not act as an underwriter for the Tendered VRRM- MFP Shares and shall in no way be obligated to advance its own funds to purchase any Tendered VRRM-MFP Shares (except as provided in Section 2(c) or to the extent that in its individual capacity as purchaser of those VRRM-MFP Shares it may elect, in accordance with Section 6 hereof, to purchase, in its sole discretion) or to otherwise expend or risk its own funds or incur or become exposed to financial liability in the performance of its duties hereunder. + +Section 22. Amendment. This Agreement may be amended by any instrument in writing signed by all of the parties hereto so long as this Agreement as amended is not inconsistent with the Supplement in effect as of the date of any such amendment. The parties acknowledge that amendments to this Agreement (including with respect to Section 2(c)) are subject to prior notice requirements as set forth in the Tender and Paying Agent Agreement. + +Section 23. Benefits. Nothing herein, express of implied, shall give to any person, other than the Fund, the Remarketing Agent and their respective permitted successors and assigns, any benefit of any legal or equitable right, remedy or claim hereunder. Without limiting the generality of the foregoing, no Holder or Beneficial Owner (or their Agent Member) of VRRM-MFP Shares shall have or be deemed to have any right in respect of, or shall in any event be entitled to enforce or to seek recourse against any person in respect of, any provision of this Agreement, and any and all rights of holders of VRRM-MFP Shares or obligations of the Fund in respect thereof arise only under and as governed solely by the Declaration, the Supplement and by-laws of the Fund as they are in effect from time to time. + +Section 24. Notices and Wire Instructions. Unless otherwise specified, any notices, requests, consents or other communications given or made hereunder or pursuant hereto shall be made in writing and shall be deemed to have been validly given or made upon receipt, if given by mail, or when delivered, if given by prepaid courier service, in each case addressed as follows: if to the Fund or the Investment Adviser, to either of them at 333 West Wacker Drive, Chicago, Illinois 60606, Attention: [●]; if to the Remarketing Agent, to [●], [●], Attention: [●], Telephone: [●], Fax: [●], Email: [●]; and if to the Calculation and Paying Agent, to [●], [●], Attention: [●], Telephone: [●], Fax: [●], Email: [●]; or to such other address as any of the foregoing persons shall specify to the parties hereto in writing. + +The Purchase Price of remarketed VRRM-MFP Shares, if paid through the Calculation and Paying Agent, shall be paid by the Remarketing Agent in immediately available funds by wire transfer to the Calculation and Paying Agent in accordance with the following instructions: + +[●] ABA# [●] 15 + + + + + +For Further Credit to Account # [●] Ref: [●] Attn: [●] Tel: [●] + +The remarketing fee shall be paid by the Fund in immediately available funds by wire transfer to the Remarketing Agent in accordance with the following instructions: + +[●] ABA# [●] For Further Credit to Account # [●] Ref: [●] Attn: [●] Tel: [●] + +Email transmissions shall be deemed to have been validly given or made when sent to the following email addresses; if to the Fund or the Investment Adviser, to [●] and [●]; if to the Remarketing Agent, to [●]; or to such other address as any such parties shall specify to the other party in writing; and, if to the Calculation and Paying Agent, to [●]. + +Section 25. Liability of Officers, Trustees and Shareholders. A copy of the Declaration is on file with the Secretary of the Commonwealth of Massachusetts. This Agreement has been executed on behalf of the Fund by an officer of the Fund in such capacity and not individually and the obligations of the Fund under this Agreement are not binding upon such officer, any of the trustees or the shareholders individually but are binding only upon the assets and property of the Fund. + +Section 26. Nonpetition Covenant. Notwithstanding any prior termination of this Agreement, [●], solely in its capacity as Remarketing Agent, hereby covenants and agrees that it shall not, prior to the date which is one year and one day after the redemption and the payment in full of the VRRM-MFP Shares and all accumulated dividends, petition or otherwise invoke the process of any court or government authority for the purpose of commencing a case against, the Fund under any federal or state bankruptcy, insolvency or similar law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Fund or any substantial part of the property of the Fund; provided, however, that nothing in this provision shall preclude, or be deemed to stop, the Remarketing Agent from taking any action prior to the expiration of the aforementioned one year and one day period in (x) any case or proceeding voluntarily filed or commenced by the Fund, (y) any involuntary insolvency proceeding filed or commenced against the Fund by a Person other than the Remarketing Agent, or (z) with respect to its rights or preferences as a Beneficial Owner or Holder of VRRM-MFP Shares. + +[Signature Page Follows] 16 + + + + + +IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed in its name and on its behalf by one of its duly authorized officers as of the date first above written. NUVEEN AMT-FREE MUNICIPAL CREDIT INCOME FUND + +By Name: Title: + +NUVEEN FUND ADVISORS, LLC + +By Name: Title: + +[NAME] + +By Name: Title: Signature Page to Remarketing Agreement (NVG Series [●] MFP) + + + + + +Exhibit A - Form of Tender Notice + +NUVEEN AMT-FREE QUALITY MUNICIPAL INCOME FUND (NVG) (THE "FUND") SERIES [●] MUNIFUND PREFERRED SHARES IN THE VARIABLE RATE REMARKETED MODE ("VRRM-MFP SHARES") + +TENDER NOTICE + +Note: The substance of this notice must be given by the Beneficial Owner or its Agent Member to [●], as Remarketing Agent (the "Remarketing Agent"), appointed under the Remarketing Agreement, dated as of [●], between Nuveen AMT-Free Municipal Credit Income Fund, Nuveen Fund Advisors, LLC and the Remarketing Agent, in the manner provided in Schedule 1 hereto by Electronic Means prior to 5:00 p.m., New York City time, on any Business Day. Any Tender Notice delivered at or after 5:00 p.m., New York City time, shall be deemed to have been received by the Remarketing Agent on the next succeeding Business Day and the Purchase Date specified in this Tender Notice shall be postponed accordingly by one Business Day. The determination of the Remarketing Agent as to whether a Tender Notice has been properly delivered shall be conclusive and binding upon the Beneficial Owner and its Agent Member. + +TO: [●], as Remarketing Agent + +1. In accordance with the Fund's Statement Establishing and Fixing the Rights and Preferences of Series [●] MuniFund Preferred Shares effective [●] (the "Statement"), as modified with respect to the Variable Rate Remarketed Mode (the Initial Mode) by the Supplement to the Statement Establishing and Fixing the Rights and Preferences of Series [●] MuniFund Preferred Shares Initially Designating the Variable Rate Remarketed Mode for the Series [●] MuniFund Preferred Shares effective [●], as amended, revised or supplemented from time to time (the "Supplement"); the undersigned, [●], [Beneficial Owner] [Agent Member of the Beneficial Owner] of the following VRRM-MFP Shares: + +VRRM-MFP Shares Series CUSIP Number + +Number of VRRM-MFP Shares tendered for remarketing (the "Designated Amount")1 [●] [●] + +hereby notifies you of the election by the Beneficial Owner of the referenced VRRM-MFP Shares to tender such VRRM-MFP Shares for remarketing of the Designated Amount on the seventh calendar day following the date on which this Tender Notice is delivered to the 1 VRRM-MFP Shares may be tendered only in whole shares. + + + + + +Remarketing Agent, or if such seventh calendar day is not a Business Day, the next succeeding Business Day (the "Purchase Date"). + +The name and DTC Participant No. of the Agent Member tendering on behalf of the Beneficial Owner is: + +Name of Agent Member: + +DTC Participant No. of Agent Member: + +Name of Beneficial Owner: + +Beneficial Owner's account number: + +The person to contact at the Beneficial Owner or its Agent Member and the related contact information are as follows: + +Name: + +Telephone No: + +Email address: + +The Beneficial Owner or its Agent Member acknowledges and agrees that the Person or Persons to whom or to whose order the Purchase Price of the tendered VRRM-MFP Shares is to be paid is/are the same as identified above. + +2. The undersigned acknowledges the obligation of the tendering Beneficial Owner to deliver the VRRM-MFP Shares that are the subject of this Tender Notice on or before 11:00 a.m., New York City time on the Purchase Date, and, in accordance with such obligation, the undersigned hereby undertakes to deliver or to cause to be delivered the VRRM-MFP Shares being sold [directly] or [through an Agent Member] to the Remarketing Agent, through the "funds against delivery" procedures of the Securities Depository, no later than 11:00 a.m., New York City time, on the Purchase Date. The undersigned hereby also assigns and transfers and directs the Securities Depository or its nominee or the Remarketing Agent to transfer the tendered VRRM-MFP Shares to the purchaser in accordance with the procedures described in the Supplement, and otherwise according to the Securities Depository's procedures, in exchange for the payment of the Purchase Price thereof on the Purchase Date. + +3. The undersigned confirms its agreement that it hereby transfers to the purchaser of the VRRM-MFP Shares tendered pursuant to this Tender Notice the right to receive from the Fund any dividends declared and unpaid for each day prior to the purchaser becoming the Beneficial Owner of the VRRM-MFP Shares in exchange for payment of the Purchase Price for such VRRM-MFP Share by the purchaser. + +4. The undersigned hereby represents and warrants for the benefit of the Remarketing Agent, the Fund and the Calculation and Paying Agent, that the undersigned has full power and authority to tender, exchange, assign and transfer the VRRM-MFP Shares to be + + + + + +tendered hereby, and that the transferee will acquire good and unencumbered title thereto, free and clear of all liens, restrictions, charges and encumbrances and not subject to any adverse claim, when the same are tendered. + +5. The undersigned acknowledges that this Tender Notice is irrevocable and effective upon the receipt by the Remarketing Agent. + +6. Terms used herein and not otherwise defined will have the meanings given to such terms in the Supplement. Dated: [Complete applicable signature block below.] Print name of Beneficial Owner + +By: Name: Title: [OR] Print name of Agent Member + +By: Name: Title: + + + + + +SCHEDULE 1 + +TENDER NOTICE DELIVERY INFORMATION FOR THE REMARKETING AGENT + +This Tender Notice must be delivered by the Beneficial Owner or its Agent Member to [●] (the "Remarketing Agent") by email transmission at the email address listed below or such other email address as the Remarketing Agent shall designate (or, if email transmission shall be unavailable, by facsimile transmission to the fax number listed below or such other fax number as the Remarketing Agent will designate) at or prior to 5:00 p.m., New York City time, on any Business Day. If this Tender Notice is delivered after 5:00 p.m., New York City time, it will be deemed to have been received by the Remarketing Agent on the next succeeding Business Day, and the Purchase Date will be postponed accordingly by one Business Day: + +Attention: [●] [●] + +Phone: [●] + +Email: [●] + +This Tender Notice will not be deemed to be delivered unless and until the Remarketing Agent actually receives it by the above-described means. + + + + + +Exhibit B - Form of Remarketing Notice + +TO [BENEFICAL OWNERS] [HOLDERS] OF SERIES [●] MUNIFUND PREFERRED SHARES IN THE VARIABLE RATE REMARKETED MODE ("VRRM-MFP SHARES") OF NUVEEN AMT-FREE MUNICIPAL CREDIT INCOME FUND (NVG) (THE "FUND") + +REMARKETING NOTICE + +[Date] Re: Nuveen AMT-Free Municipal Credit Income Fund Series [●] MuniFund Preferred Shares (the "VRRM-MFP Shares") + +Pursuant to [Section 2(d)] [Section 2(e)] [Section 2(f)] of the Remarketing Agreement dated [●] (the "Remarketing Agreement"), by and among Nuveen AMT-Free Municipal Credit Income Fund, a closed-end investment company organized as a Massachusetts business trust, Nuveen Fund Advisors, LLC, a registered investment adviser and wholly-owned subsidiary of Nuveen Investments, Inc., and [●] (the "Remarketing Agent"), the undersigned Remarketing Agent hereby notifies you of the following information regarding the remarketing of the VRRM-MFP Shares as of the date hereof: + +1. Information regarding the VRRM-MFP Shares is as follows: + +VRRM-MFP Shares Series: A + +CUSIP number: + +2. Remarketing Results: + +Populate fields in the applicable section; delete inapplicable sections. + +[For Optional Tenders] (i) A purchaser or purchasers have been identified for the purchase of all of the Tendered VRRM-MFP Shares on the Purchase Date. (ii) Number of Tendered VRRM-MFP Shares sold, subject to settlement: . (iii) The Purchase Date will be: . + + + + + +(iv) The Purchase Price per Tendered VRRM-MFP Share is: . + +[For Mandatory Tenders] (i) A purchaser or purchasers have been identified for the purchase of all of the VRRM- MFP Shares on the Remarketing Date. (ii) Number of VRRM-MFP Shares sold, subject to settlement: . (iii) The Remarketing Date will be: . (iv) The Regular Dividend Rate to be applicable to the VRRM-MFP Shares on the Remarketing Date will be: . (v) All VRRM-MFP Shares will be subject to mandatory tender for purchase on the Remarketing Date at a Purchase Price per VRRM-MFP Share of: . + +[For Transition to a New Mode] (i) A purchaser or purchasers have been identified for the purchase of all of the VRRM- MFP Shares on the New Mode Commencement Date. (ii) Number of VRRM-MFP Shares sold, subject to settlement: . (iii) The New Mode Commencement Date will be: . (iv) The Regular Dividend Rate to be applicable to the VRRM-MFP Shares on the New Mode Commencement Date will be: . (v) All VRRM-MFP Shares will be subject to mandatory tender for purchase on the New Mode Commencement Date at a Purchase Price per share of: + +3. Capitalized terms used herein will have the meanings given to them in or by reference to the Remarketing Agreement. + + + + + +[●] as Remarketing Agent + +By: Name: Title: Cc: [●] Nuveen AMT-Free Municipal Credit Income Fund + + + + + +Exhibit C - Form of Failed Remarketing Notice + +TO HOLDERS OF SERIES [●] MUNIFUND PREFERRED SHARES IN THE VARIABLE RATE REMARKETED MODE ("VRRM-MFP SHARES") OF NUVEEN AMT-FREE MUNICIPAL CREDIT INCOME FUND (NVG) (THE "FUND") + +CUSIP NO. [●]* + +FAILED REMARKETING NOTICE + +In accordance with the Fund's Statement Establishing and Fixing the Rights and Preferences of Series [●] MuniFund Preferred Shares effective [●] (the "Statement"), as modified with respect to the Variable Rate Remarketed Mode (the Initial Mode) by the Supplement to the Statement Establishing and Fixing the Rights and Preferences of Series [●] MuniFund Preferred Shares Initially Designating the Variable Rate Remarketed Mode for the Series [●] MuniFund Preferred Shares effective [●], as amended, revised or supplemented from time to time (the "Supplement"), the Fund hereby notifies Holders that: + +Retain only the applicable section; delete inapplicable sections. + +[For Optional Tender] + +A Failed Remarketing Event has occurred with respect to Tendered VRRM-MFP Shares optionally tendered for remarketing. All Tendered VRRM-MFP Shares shall be retained by their respective Beneficial Owners. + +[For Mandatory Tender] + +A Failed Remarketing Event has occurred with respect to a mandatory tender of all Outstanding VRRM-MFP Shares for remarketing. All VRRM-MFP Shares shall be retained by their respective Holders. + +[For Transition to New Mode] + +A Failed Remarketing Event has occurred with respect to a mandatory tender of all Outstanding VRRM-MFP Shares for transition to a new Mode on the New Mode Commencement Date. All VRRM-MFP Shares shall be retained by their respective Holders. By not later than the Business Day immediately following the occurrence of the Failed Remarketing Event, the Fund will make an election, and provide a Failed Transition Election Notice in writing by Electronic Means to the Holders, the Remarketing Agent and the Calculation and Paying Agent, to either (i) cancel the * NOTE: None of the Fund, the Remarketing Agent or the Calculation and Paying Agent will be responsible for the selection or use of the CUSIP Numbers selected, nor is any representation made as to its correctness indicated in any notice or as printed on any VRRM-MFP Share certificate. It is included solely as a convenience to VRRM-MFP Shareholders. + + + + + +attempted transition to a new Mode or (ii) continue to attempt to transition to a new Mode. + +The Failed Remarketing Event [commences] [continues] a Failed Remarketing Period. During the Failed Remarketing Period, the Remarketing Agent will no longer determine the Regular Dividend Rate on a daily basis; dividends on all VRRM-MFP Shares will be payable at the Step-Up Dividend Rate (as determined by the Remarketing Agent commencing on the date of the Failed Remarketing Event); the right of Beneficial Owners to make optional tenders of their MuniFund Preferred Shares for remarketing is suspended; and all of the Outstanding VRRM-MFP Shares is subject to mandatory tender for remarketing. All Outstanding VRRM-MFP Shares are subject to mandatory redemption on [●] (the "Failed Remarketing Mandatory Redemption Date"). + +This notice will be conclusively presumed to have been duly given, whether or not the Holders or Beneficial Owners receive this notice. + +Terms used herein and not otherwise defined will have the meanings given to such terms in the Supplement. Dated: + +[NAME], as Remarketing Agent + +By: Name: Title: Cc: [●] Nuveen AMT-Free Municipal Credit Income Fund + + + + + +Exhibit D - Form of Retention Notice + +NUVEEN AMT-FREE MUNICIPAL CREDIT INCOME FUND (NVG) (THE "FUND") SERIES [●] MUNIFUND PREFERRED SHARES IN THE VARIABLE RATE REMARKETED MODE ("VRRM-MFP SHARES") CUSIP No. [●]* + +RETENTION NOTICE + +TO: [●], as Remarketing Agent + +Further to the Remarketing Notice dated [●] (the "Remarketing Notice") all VRRM-MFP Shares will be subject to mandatory tender for purchase at a price equal to [●] (the "Purchase Price") on [●] (the "Remarketing Date"). + +As set forth in the Fund's Statement Establishing and Fixing the Rights and Preferences of Series [●] MuniFund Preferred Shares effective [●] (the "Statement"), as modified with respect to the Variable Rate Remarketed Mode (the Initial Mode) by the Supplement to the Statement Establishing and Fixing the Rights and Preferences of Series [●] MuniFund Preferred Shares Initially Designating the Variable Rate Remarketed Mode for the Series [●] MuniFund Preferred Shares effective [●], as amended, revised or supplemented from time to time (the "Supplement"), any Beneficial Owner of a VRRM-MFP Share that is not a Tendered VRRM-MFP Share that was part of the Failed Remarketing Event to which the Remarketing Notice relates, as determined by the Remarketing Agent, may deliver written notice to the Remarketing Agent and the Calculation and Paying Agent by Electronic Means at least three Business Days prior to the Remarketing Date that it wishes to retain its VRRM-MFP Shares (each such Beneficial Owner, a "Retaining Beneficial Owner"). + +On the Remarketing Date, the VRRM-MFP Shares held by each Retaining Beneficial Owner will be subject to mandatory tender and repurchased by the Retaining Beneficial Owner at a price equal to the Purchase Price on the Remarketing Date. + +For purposes of the foregoing, the undersigned Beneficial Owner of VRRM-MFP Shares hereby provides notice of its wish to retain VRRM-MFP Shares of which it is Beneficial Owner, in the following amount: [●]. The undersigned person electing to retain its VRRM-MFP Shares represents that it is the Beneficial Owner of the number of VRRM- MFP Shares set forth above, and such number constitutes all of the VRRM-MFP Shares owned by the undersigned. + +Terms used herein and not otherwise defined will have the meanings given to such terms in the Supplement. + +Dated: * NOTE: None of the Fund, the Remarketing Agent or the Calculation and Paying Agent will be responsible for the selection or use of the CUSIP Numbers selected, nor is any representation made as to its correctness indicated in any notice or as printed on any VRRM-MFP Share certificate. It is included solely as a convenience to VRRM-MFP Shareholders. + + + + + +[Complete applicable signature block below.] Print name of Beneficial Owner + +By: Name: Title: [OR] Print name of Agent Member + +By: Name: Title: + +Cc: [●] Nuveen AMT-Free Municipal Credit Income Fund \ No newline at end of file diff --git a/full_contract_txt/NYLIACVARIABLEANNUITYSEPARATEACCOUNTIII_04_10_2020-EX-99.8.KK-SERVICE AGREEMENT.txt b/full_contract_txt/NYLIACVARIABLEANNUITYSEPARATEACCOUNTIII_04_10_2020-EX-99.8.KK-SERVICE AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..76680f48bfaaa2e74835551f1397de9ff6d4d48d --- /dev/null +++ b/full_contract_txt/NYLIACVARIABLEANNUITYSEPARATEACCOUNTIII_04_10_2020-EX-99.8.KK-SERVICE AGREEMENT.txt @@ -0,0 +1,55 @@ +Exhibit (8)(k)(k) + +SERVICE AGREEMENT + +This Agreement is entered into and effective as of the 1st day of January, 1998, by and between FIDELITY INVESTMENTS INSTITUTIONAL OPERATIONS COMPANY, INC. ("FIIOC") and NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION ("Company"). + +WHEREAS, FIIOC provides transfer agency and other services to Fidelity's Variable Insurance Products Fund, Variable Insurance Products Fund II and Variable Insurance Products Fund III (collectively "Funds"); and + +WHEREAS, the services provided by FIIOC on behalf of the Funds include responding to inquiries about the Funds including the provision of information about the Funds' investment objectives, investment policies, portfolio holdings, etc.; and + +WHEREAS, Company holds shares of the Funds in order to fund certain variable annuity contracts, group annuity contracts, and/or variable life insurance policies, the beneficial interests in which are held by individuals, plan trustees, or others who look to Company to provide information about the Funds similar to the information provided by FIIOC; and + +WHEREAS, the Company and one or more of the Funds have entered into one or more Participation Agreements, under which the Company agrees not to provide information about the Funds except for information provided by the Funds or their designees; and + +WHEREAS, FIIOC and Company desire that Company be able to respond to inquiries about the Funds from individual variable annuity owners, participants in group annuity contracts issued by the Company, and owners and participants under variable life insurance policies issued by the Company, and prospective customers for any of the above; and + +WHEREAS, FIIOC and Company recognize that Company's efforts in responding to customer inquiries will reduce the burden that such inquiries would place on FIIOC should such inquiries be directed to FIIOC. + +NOW, THEREFORE, the parties do agree as follows: + +1. Information to be Provided to Company. FIIOC agrees to provide to Company, on a periodic basis, directly or through a designee, information about the Funds' investment objectives, investment policies, portfolio holdings, performance, etc. The content and format of such information shall be as FIIOC, in its sole discretion, shall choose. FIIOC may change the format and/or content of such informational reports, and the frequency with which such information is provided. For purposes of Section 4.2 of each of the Company's Participation Agreement(s) with the Funds, FIIOC represents that it is the designee of the Funds, and Company may therefore use the information provided by FIIOC without seeking additional permission from the Funds. + +2. Use of Information by Company. Company may use the information provided by FIIOC in communications to individuals, plan trustees, or others who have legal title or beneficial interest in the annuity or life insurance products issued by Company, or representatives of any of these parties, and to prospective purchasers of such products or beneficial interests thereunder. If such information is contained as part of larger pieces of sales literature, advertising, etc., such pieces shall be furnished for review to the Funds in accordance with the terms of the Company's Participation Agreements with the Funds. Nothing herein shall give the Company the right to expand upon, alter the appearance of, or otherwise alter the information provided by FIIOC. Company acknowledges that the information provided it by FIIOC may + + + + + +need to be supplemented with additional qualifying information, regulatory disclaimers, or other information before it may be conveyed to persons outside the Company. + +3. Compensation to Company. In recognition of the fact that Company will respond to inquiries that otherwise would be handled by FIIOC, FIIOC agrees to pay Company a quarterly fee computed as follows: + +At the close of each calendar quarter, FIIOC will determine the Average Daily Assets held in the Funds by the Company. Average Daily Assets shall be the sum of the daily assets for each calendar day in the quarter divided by the number of calendar days in the quarter. The Average Daily Assets shall be multiplied by [ ] ([ ] basis points) and that sum shall be divided by four. The resulting number shall be the quarterly fee for that quarter, which shall be paid to Company during the following month. + +Should any Participation Agreement(s) between Company and any Fund(s) be terminated effective before the last day of a quarter, Company shall be entitled to a fee for that portion of the quarter during which the Participation Agreement was still in effect, unless such termination is due to misconduct on the part of the Company. For such a stub quarter, Average Daily Assets shall be the sum of the daily assets for each calendar day in the quarter through and including the date of termination of the Participation Agreement(s), divided by the number of calendar days in that quarter for which the Participation Agreement was in effect. Such Average Daily Assets shall be multiplied by [ ] ([ ] basis points) and that number shall be multiplied by the number of days in such quarter that the Participation Agreement was in effect, then divided by three hundred sixty-five. The resulting number shall be the quarterly fee for the stub quarter, which shall be paid to Company during the following month. + +Notwithstanding the foregoing, compensation for each calendar quarter will not exceed [ ]. + +4. Termination. This Agreement may be terminated by Company at any time upon written notice to FIIOC. FIIOC may terminate this Agreement at any time upon ninety (90) days' written notice to Company. FIIOC may terminate this Agreement immediately upon written notice to Company (1) if required by any applicable law or regulation, (2) if so required by action of the Fund(s) Board of Trustees, or (3) if Company engages in any material breach of this Agreement. This Agreement shall terminate immediately and automatically upon the termination of Company's Participation Agreement(s) with the Funds, and in such event no notice need be given hereunder. + +5. Applicable Law. This Agreement shall be construed and the provisions hereof interpreted under and in accordance with the laws of the Commonwealth of Massachusetts. + +6. Assignment. This Agreement may not be assigned without the written consent of the other party, which consent shall not be unreasonably withheld, except that it shall be assigned automatically to any successor to FIIOC as the Funds' transfer agent, and any such successor shall be bound by the terms of this Agreement. + +IN WITNESS WHEREOF, the parties have set their hands as of the date first written above. + +FIDELITY INVESTMENTS INSTITUTIONAL OPERATIONS COMPANY, INC. + +By: + +NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION By: + +Name: + +Title: \ No newline at end of file diff --git a/full_contract_txt/NakedBrandGroupInc_20150731_POS AM (on S-1)_EX-10.75_9196027_EX-10.75_Endorsement Agreement.txt b/full_contract_txt/NakedBrandGroupInc_20150731_POS AM (on S-1)_EX-10.75_9196027_EX-10.75_Endorsement Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..e704f0490d5753a34ee97bea4012fc1e547da640 --- /dev/null +++ b/full_contract_txt/NakedBrandGroupInc_20150731_POS AM (on S-1)_EX-10.75_9196027_EX-10.75_Endorsement Agreement.txt @@ -0,0 +1,407 @@ +Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended. + +Exhibit 10.75 + +COLLABORATION & ENDORSEMENT AGREEMENT + +THIS COLLABORATION & ENDORSEMENT AGREEMENT (the "Agreement") is dated as of this 15th day of June, 2015 ("Effective Date"), between The Naked Brands Group, Inc., a Delaware corporation ("Naked"), and Wade Enterprises, LLC ("Wade Enterprises"), an Alaska limited liability company f/s/o Dwyane Wade ("Athlete" and together with Wade Enterprises, collectively "Wade"). Wade Enterprises, Athlete and together with Naked, are each referred to herein as a "Party" and collectively, the "Parties". + +AGREEMENT + +1. Engagement. Naked hereby engages Wade for collaboration in business development for, and his endorsement as set forth herein of, the following items, which shall be known herein as "Innerwear": Briefs, trunks, boxer briefs and boxers, non-athletic undershirts (i.e., t-shirts intended to be worn as innerwear and not intended specifically for athletic purposes), non-athletic lounge apparel (bottoms and tops), sleepwear (including pajama bottoms and tops), and robes (as may be expanded to include other mutually agreed upon innerwear and lounge apparel) which may now or hereafter during the Term be manufactured, distributed, marketed and/or sold by Naked (collectively, the "Naked Products"), and Wade hereby accepts such engagement. The Parties agree that the territory of such engagement shall be worldwide (the "Territory"). + +2. Term of Agreement. The initial term of this Agreement shall be for a period of four (4) years, commencing on the Effective Date, which term may be extended for up to three (3) years by written agreement of both Parties prior to the expiration date of the initial term or any extension thereof (collectively, the "Term"). Each twelve-month period beginning on the Effective Date shall be known as a "Contract Year." In the event that either Wade or Naked wishes to extend the Term of the Agreement as contemplated above, it shall provide the other Party with written notice at least ninety (90) days prior to the expiration of the Term. The other Party will then have a period of fourteen (14) days from the date of the notice to indicate whether it also desires to extend the Term, on the terms and conditions set forth herein and if no such indication is made, the other Party will be deemed to have declined the offer to extend. Notwithstanding the foregoing, Wade agrees that for a period of ninety (90) days prior to the expiration of the Term (unless the Agreement is terminated by Wade as permitted hereunder), Naked shall have the exclusive right to negotiate for continued endorsement by Athlete of the Naked Products. For a period of six (6) months at the end of the Term (the "Sell-off Period"); provided that the Agreement was not terminated by Wade as permitted herein, Naked will have the right to continue to sell the Wade Products (defined below) for which orders have already been placed at the end of the Term on the terms and conditions herein. + +3. Use of Wade Image. + +During the Term and subject to the limitations set forth in this Agreement, Naked shall have an exclusive right and license in the Territory to use Athlete's name, nickname, initials, autograph, image, likeness, photographs, biographical details, facsimile signature, voice, videos, electronic media depictions, any words, symbols or other depictions, as well as any other identifying attributes that would identify Athlete to the public, including any trade mark(s), copyrights which Wade has, as set forth on Schedule A attached hereto, and all multimedia assets that Wade owns or has right to use (collectively, the "Wade Image") solely for the advertising, endorsement, promotion, or sale of the Naked Products (including the Wade Products) in the Territory as follows: + +Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015 + + + + + +Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended. + +(1) On Naked's website(s) ("Website"); + +(2) In social media channels, including, but not limited to Facebook, Instagram, Twitter, YouTube, Google+, Tumblr and other mutually agreeable channels, with reasonable frequency, to promote Naked Products and Wade Products; + +(3) In marketing and media opportunities in connection with the Wade Services (as defined below); and + +(4) For use on the packaging of the Naked Products and Wade Products and on Wade Products themselves. + +All uses of Wade Image in connection with this Agreement shall be subject to the prior written approval of Wade, which Wade shall not unreasonably withhold. Naked agrees to submit to Wade or its authorized agent a copy of all new promotional and/or advertising material using Wade Image at least ten (10) days prior to the release to the general public. Wade and its authorized agent agree that they shall not unreasonably withhold such approval. In the absence of disapproval within three (3) business days of Wade's or authorized agent's receipt of a request for approval, said advertising or promotional material shall be deemed approved. Any such usage featuring Athlete shall be and remain the property of Naked except as otherwise set forth herein; however, Naked shall have the right to such use only during the Term. Wade may use said materials in whole or in part for Wade's personal portfolio, website or otherwise. Such usage may not be sold or transferred. For the avoidance of doubt, that certain logo designed by Athlete prior to the date hereof (the "Logo") shall remain the sole property of Wade and Naked shall have license during the Term to use the Logo for the advertising, endorsement, promotion, or sale of the Naked Products (including the Wade Products) in the Territory in accordance with the terms and conditions of the Agreement. During the Sell-off Period, Naked shall have the license to use the Logo solely on packaging and presentation of Wade Products already offered for sale at retail outlets or on-line in accordance with the terms and conditions of the Agreement. + +Wade will allow Naked to use any quotes that are attributed to Wade to promote the Naked Products and Wade Products in any advertising campaign. Wade will allow Naked to use any such attributed quotes that Naked requires to promote the Naked Products and Wade Products, subject to Wade's right to approve such quotes in writing, which approval shall not be unreasonably withheld. + +The Parties acknowledge and agree that Athlete's accomplishments and recognition as an outstanding basketball player, individual and fashion icon, as well as his character, fame, likeness, image and reputation are the essence of this Agreement. + +Wade hereby warrants that he is not a party to any agreement, contract or understanding which would prevent, limit or hider his performance of any of the obligations under this Agreement, provided that Naked acknowledges that it is aware of Athlete's obligations under his existing endorsement agreement with Li Ning for athletic shoes and athletic apparel and nothing herein shall obligate Athlete to endorse any athletic apparel other than Li Ning's. + +2 + +Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015 + + + + + +Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended. + +4. Exclusivity. Wade agrees that during the Term of this Agreement, he will not represent or perform as a representative, spokesperson or provide Wade Services for, nor furnish services or materials, or allow the use of the Wade Image to be used for the advertising, endorsement, promotion, or sale of Innerwear in the Territory. Furthermore, Wade will not engage in any business or other transaction or have any financial or personal interest in any entity whose primary or core business is selling or manufacturing Innerwear during the Term. Endorsement of any Innerwear other than the Naked Products or Wade Products without the express written consent of Naked will constitute a material breach of this Agreement. + +5. Wade Services. During the Term and subject to the limitations set forth in this Agreement, Wade agrees to provide Naked with the following services (collectively, the "Wade Services"): + +A. During the first Contract Year, Wade will be available for (i) one production day for the purpose of creating marketing assets for Naked Products for unlimited use in advertisements and the media and (ii) one production day for creating marketing assets for Wade Products and Naked Products for unlimited use in advertisements and the media, each as permitted herein. Wade shall be available to render services at such production day for a maximum of three (3) consecutive hours, not including scheduled breaks, during each such production day period; provided that, in the event an additional production day is reasonably required for the creation of marketing assets related to the Wade Product packaging, Athlete will be available to render services for up to an additional three (3) hours in either the first Contract Year or the second Contract Year but not both. The scheduling and content of said production days shall be mutually determined by Wade and Naked, subject to Wade's professional availability; + +B. Beginning in the second Contract Year, Wade will be available for a maximum of one (1) production day for creating marketing assets for Wade Products and Naked Products for unlimited use in advertisements and the media, for a maximum of three (3) consecutive hours, not including scheduled breaks, during such production day period. The scheduling and content of said production days shall be mutually determined by Wade and Naked, subject to Wade's professional availability; + +C. During each Contract Year, Wade will be available for two (2) personal appearances (each, a "Personal Appearance") on behalf of Naked and the Naked Products and Wade Products in the media, including publicity shoots, interviews, print, television, radio and social media channels, each appearance for a maximum of sixty (60) consecutive minutes to be scheduled at a time mutually agreeable to Naked and Wade; + +Wade has rights to websites or other social media channels promoting himself or any other promotional activity that is independent of this Agreement ("Independent Promotions"), including Wade's Facebook, Instagram, Twitter and Google+ channels and Wade's YouTube channel. Wade agrees, to generously and positively promote Naked Products and Wade Products in any such Independent Promotions on a mutually agreed upon basis with reasonable frequency and in a manner consistent with drawing attention to the Wade/Naked relationship and promoting the Naked Products and Wade Products. Naked, in its sole and absolute discretion, may preview all references and other such materials referring to Naked in the Independent Promotions prior to the public dissemination of such Independent Promotions. Wade agrees to immediately remove all such materials in his Independent Promotions that Naked, in its sole and absolute discretion requests be removed. Naked has the right to request such removals at any time, even if Naked previously approved the Independent Promotions, and Naked agrees that all social media promotions it requests of Athlete shall comply with all applicable rules and regulations. Naked may also provide material regarding the Naked Products and Wade Products to Wade, and Wade agrees to include such materials in his Independent Promotions; and + +3 + +Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015 + + + + + +Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended. + +E. Wade is currently engaged in partnerships whereby its partners are selling and distributing other Athlete endorsed products. Wade will use reasonable efforts to facilitate an introduction to Naked to existing sales and distributions channels and accounts. + +F. Naked may reasonably request an additional production session(s), or a media tour or personal appearance(s), subject to mutual agreement by the Parties. + +At all Personal Appearances, Wade will be available to sign a reasonable number of photographs, autographs, and any other items requested by and provided by Naked at its sole cost and expense, which Naked will have the right to distribute as giveaways but never for sale. If requested, Wade will pass out a reasonable number of samples of the Wade Product. Wade will also permit himself to be reasonably photographed at the Personal Appearances with customers and fans. + +6. Commercial Materials. The results of the production days listed in subsections A and B in Section 5 may be used solely for the promotion of the Naked Products (including the Wade Products) and are hereinafter referred to individually and collectively as the "Commercial Materials." Wade shall have the right of prior written approval with respect to his photographs, likeness and statements. During the Term, Naked shall have the right in the Territory to the unlimited broadcast use and re-use of the Commercial Materials in the Territory. During the Term, Naked shall have the right in the Territory to use the Wade Image in the Commercial Materials, for publication and display, as Naked shall in its sole discretion determine, in print magazines, including but not limited to, point-of-sale material, product packaging, Naked's Annual Report, other shareholder communications, internal sales and marketing pieces, as well as the right to use the same at meetings held or attended by Naked or for trade purposes. Naked shall have the right at any time during the term of this Agreement to make any revision or versions of all or any part of the Commercial Materials to conform to the requirements of individual markets as Naked may desire, subject to Wade's reasonable approval as aforesaid. Naked may also propose to use the Commercial Materials as part of cooperative advertising and retail tie in promotions subject to Wade's prior written approval which shall not be unreasonably withheld, provided that withholding approval because a potential tie in conflicts with one of Athlete's existing sponsors shall not be deemed unreasonable. Notwithstanding the foregoing, in no case shall the Commercial Materials feature any commercial tie in or other use that could be perceived as an endorsement by Athlete of any products or services other than the Naked Products. Naked shall comply with all applicable rules and regulations (including the NBA's) in its use of the Commercial Materials hereunder. + +7. Design of Wade Products. + +Naked and Wade (either Athlete or a team and/or agent and/or designer designated by Athlete, referred to as the "Wade Team") agree to collaborate on the design and manufacture of a new line of Innerwear under the brand "Wade By Naked" or such other brand name as the Parties agree (collectively, the "Wade Products"). Athlete will have the title of "Creative Director" for the Wade Products, which title shall be featured on the Commercial Materials. During the Term and subject to the limitations set forth in this Agreement, the Wade Team and Naked agree that the process for approving designs for Wade Products will be as follows: + +4 + +Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015 + + + + + +Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended. + +(1) Naked will develop detailed designs for each Wade Product, which shall include rough drawings, to be provided to Wade for review and comment; + +(2) The Wade Team will provide Naked with comments on such designs within ten (10) days after they are provided to the Wade Team; + +(3) Upon receipt of the Wade Team's comments, Naked will review such comments and work diligently to incorporate them into the design within commercial reason and thereafter, develop and create a prototype for such Wade Product for the Wade Team's approval; + +(4) Within ten (10) days after the Wade Team's receipt of the prototype either in hand or via a photograph by email, the Wade Team shall review the prototype and provide any additional comments; and + +(5) Upon the Wade Team's written approval of a prototype, such Wade Product will be considered approved for production (the "Production Approval"). + +(6) In addition to the foregoing Wade Products, Naked shall have the right to produce and distribute, on a non-exclusive basis, printed or branded tee-shirts subject to Wade's existing endorsement agreements. + +The Wade Team and Naked will collaborate to establish a mutually acceptable marketing campaign for Wade Products, and will schedule regular phone calls, video conferences, and/or other meetings to timely complete development of Wade Products. + +8. Royalties. As consideration for Wade's services under this Agreement, Naked will pay Wade royalties as follows: + +A. Royalties. Naked will report, and Wade will be paid, royalty payments at [***] + +5 + +Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015 + + + + + +Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended. + +B. Payment Terms. Wade Product Royalties described above in Section 8A will be paid on a quarterly basis on the first day of each of the months of July, October, January, and April and shall be accompanied by backup documentation reasonably satisfactory to Wade. + +C. [***] + +D. Withholding Taxes. Wade will be solely responsible for withholding and paying any and all federal, state and local taxes, including but not limited to payroll, unemployment, social security and income taxes and any other payments which may be owed by Wade as a result of or in connection with payments made by Naked for Wade Services rendered under this Agreement. Wade acknowledges that he is not qualified for and will not receive any Naked employment benefits or other incidents of employment as a result of the Agreement. + +E. Equity Ownership. Wade is hereby granted a warrant (the "Grant Warrant") exercisable for a period of seven (7) years from the date of issuance for the number of shares of Common Stock equal to [***] shares of Common Stock (the "Wade Grant"), subject to the following terms: + +(1) Exercise Price. The Grant Warrant will have an exercise price equal to the then-fair market value per share of Common Stock as quoted on the OTCQB as of the Effective Date (the "FMV Exercise Price"). The form of the Grant Warrant shall be agreed to by the Parties. + +(2) Vesting Schedule. The Grant Warrant will become exercisable for: (a) fifty percent (50%) of the Wade Grant on the one year anniversary of the Effective Date (the "First Installment"); (b) twenty-five percent (25%) of the Wade Grant on the second anniversary of the Effective Date (the "Second Installment"); and (c) the remaining twenty-five percent (25%) of the Wade Grant will vest on the third anniversary of the Effective Date (the "Third Installment" and together with the First Installment and the Second Installment, the "Installments" and each an "Installment"); provided however, that in the event of a change of control of Naked, the entire unvested portion of the Grant Warrant will immediately vest. For purposes hereof, a "change of control" shall mean the sale of at least fifty percent (50%) of the assets of Naked, a merger or consolidation of Naked with, by or into another entity, or a change in the ownership of more than fifty percent (50%) of the voting capital stock of Naked in one or more related transactions. + +6 + +Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015 + + + + + +Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended. + +(3) Exercise Upon Termination of the Agreement. In the event that the Agreement is terminated in accordance with Section 12A, than the [***] term of the Grant Warrant [***] shall expire ninety (90) days thereafter. [***] + +(6) Designee of Wade Grant. Pursuant to the request of Wade, Naked shall issue [***] to Wade's exclusive representative, CAA Sports LLC. This grant shall be issued pursuant to the same terms and conditions as the Wade Grant, with the exception of the terms of [***]. + +(7) [***] + +7 + +Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015 + + + + + +Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended. + +(8) Grant Documents. All warrants referenced herein shall be issued pursuant to separate, mutually negotiated grant documents, which shall contain all the terms referenced herein and shall be negotiated and executed promptly after the execution of the Agreement. + +9. Board Membership. + +A. Advisory Board. Upon entering into this Agreement, Athlete will join the Advisory Board of Naked ("Advisory Board"). As a member of the Advisory Board, Athlete agrees to the following: + +(1) Athlete will participate in at least one (1) scheduled Advisory Board meeting by phone or in-person, provided that such meeting is held in Miami on a date acceptable to Wade. + +(2) Athlete will provide Naked with access to Wade's contacts and Wade's expertise and breadth of experience as it pertains to the business of Naked; + +(3) Wade will provide any reasonable additional assistance as may be mutually agreed upon by Naked and Wade from time to time; and + +(4) Wade grants Naked the right to publicly identify Wade as a member of the Advisory Board, Creative Director, Stockholder, and Partner of Naked, and in the event that Wade joins the Board, as Director, and may include his name and biography in materials published by Naked, including any prospectus or offering materials or to publish any other information regarding Wade in any documents required to be filed pursuant to applicable laws and regulations. + +B. Board of Directors. Further, Athlete will have the option in his sole discretion of becoming a member of the Board of Directors of Naked (the "Board") (for a period of eighteen (18) months commencing on the Effective Date and provided that the Agreement has not been terminated). If Athlete elects to become a member of the Board, he must satisfy the following requirements on an annual basis: + +(1) Wade will participate in at least four (4) scheduled board meetings, two (2) of which Wade must attend in-person, provided that at least one meeting is held in Miami, FL or, if no such meeting is held in Miami, FL then one (1) meeting if all meetings are held in New York, NY or another location. Subject to legal compliance requirements, Wade may designate an individual acceptable to Naked serve as his representative to the meetings of the Board; + +(2) Wade will attend, subject to his availability in his sole discretion, fundraising events and meetings with potential investors, placement agents and representatives of the same at the request of Naked to be scheduled at the convenience of each of Naked and Wade; + +If, while serving on the Board Wade does not satisfy any of the above-listed requirements on more than one (1) occasion, the other members of the Board may remove Wade from the Board upon written notice to Wade. + +8 + +Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015 + + + + + +Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended. + +10. Wade Obligations. During the Term of this Agreement, Athlete agrees to comply with the following obligations: + +A. Comply with all rules and regulations of the National Basketball Association and its governing bodies rules and regulations; + +B. Not do anything which damages Wade's name, reputation, or image in the eyes of a reasonable observer; + +C. Exercise reasonable constraints to avoid taking any actions which damages Naked, its name, reputation, image, the Naked Products and Wade Products; + +D. When promoting the Naked Products or Wade Products, mention when appropriate the name of Naked and/or the Naked Products and Wade Products in interviews with the press, social media channels and broadcast media; + +E. Wear the Naked Products and/or Wade Products when appropriate and refrain from wearing any other Innerwear products that would be visible to the public. + +11. Non-compete; Confidentiality. Wade represents and warrants that during the Term and in the Territory, neither Wade nor any of his agents, representatives or employees will solicit, initiate, or encourage any proposal for an endorsement by Wade of any Innerwear to commence during the Term, or participate in any discussions or negotiations for the same. Wade will execute a non-disclosure and confidentiality agreement in a form mutually acceptable to each of Wade and Naked. + +12. Termination. + +A. Naked shall have the right to terminate this Agreement upon ten (10) days prior written notice to Wade in the event Wade fails to perform the Wade Services or breaches any other covenant or agreement set forth herein (including the essence of this Agreement), and fails to cure same (if curable) within seven (7) days of receipt of written notice. Such termination shall relieve Naked of its obligation to provide any further consideration pursuant to this Agreement provided that Wade shall retain all warrants he has received hereunder that have vested as of the date of such termination. In the event of such termination as a result of a material breach of this Agreement by Wade (i) Wade's contractual liabilities and obligations until the date of termination still exist notwithstanding such termination, (ii) Naked shall be under no obligation to sell any Wade Products but shall nevertheless owe the Royalty on any Wade Products sold; and (iii) notwithstanding anything to the contrary herein, Wade shall forfeit all warrants he has received hereunder. Naked shall not have waived any of its rights at law or in equity by exercising any provision of this section. + +B. Wade shall have the right to terminate this Agreement upon ten (10) days prior written notice to Naked in the event of the occurrence of any of the following: (i) Naked is adjudicated as insolvent or declares bankruptcy; or (ii) Naked fails to provide consideration due pursuant to this Agreement, within ten (10) days following the date such consideration is due hereunder (or, if Wade elects to receive stock in lieu of the cash consideration, if Naked fails to instruct its transfer agent to issue the appropriate amount of Common Stock to Wade within ten (10) days following the date such consideration is due in the event such consideration is payable in Common Stock); provided that Naked is notified in writing of such non-payment by Wade and such payment by Naked is not made within three (3) days following such notification; or (iii) Naked breaches any covenant or agreement set forth herein and fails to cure same (if curable) within seven (7) days of receipt of written notice. Furthermore, Naked agrees that such termination shall not relieve it of its obligation to provide consideration as contemplated hereunder. Wade shall not have waived any of his rights at law or in equity by exercising any provision of this section. + +9 + +Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015 + + + + + +Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended. + +C. The Agreement shall be deemed terminated if neither Naked nor Wade elect to extend the Agreement as set forth in Section 2 hereof. + +D. Naked's rights to the use of Wade Image shall end immediately should this Agreement be terminated pursuant to Section 12(A) or Section 12(B) above. + +13. Notices. All notices provided for herein shall be given in writing by hand delivery, courier service, or by certified mail return receipt requested to the addresses of the Parties set forth as follows (unless change of address by notice to the other Party is given as provided in this Section 13): + + If to Wade: If to Naked: CAA Sports LLC Naked Brand Group, Inc. 405 Lexington Avenue, 19th Floor 10th Floor - 95 Madison Avenue New York, NY 10174 New York, NY 10016 Attn: Lloyd Frischer Attn: Joel Primus With a copy to: With a copy to: Andrew B. Latack, Esq. Duane Morris LLP at the same address 1540 Broadway, 14th Floor New York, NY 10036 Attn: Nanette C. Heide, Esq. + +14. Intellectual Property. + +All rights to the use of the names, trademarks, service marks, symbols, logos, domain names, trade secrets, confidential know-how, patents, copyrights, any pending applications with respect to any of the foregoing, and any other intellectual property and related proprietary rights, interests and protections ("Intellectual Property Rights") in connection with Wade Products will be jointly owned by Wade and Naked. Wade will retain all ownership of the Intellectual Property Rights in connection with Wade Image including, for the avoidance of doubt, the Logo. For the avoidance of doubt, no rights are being granted hereunder to any intellectual property belonging to the NBA or its member clubs (including but not limited to the Miami Heat). + +Subject to Section 14A, Naked will retain all ownership of the Intellectual Property Rights in connection with the Naked Products, the Naked brand and any and all related brands. All advertising material produced hereunder will be and remain the absolute property of Naked. Wade acknowledges that he does not now have and in the future will assert no right, title or interest of any kind or nature whatsoever therein, or in or to any component part or tape, dub or copy or element or character or characterization thereof. + +10 + +Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015 + + + + + +Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended. + +15. Representations and Warranties of Naked and Wade. + +A. Wade relies upon Naked's skill and judgment and also upon the following representations of Naked which shall be in effect throughout the term of this Agreement: + +(1) Naked's products will be merchantable and fit for the purpose for which they are intended, and + +(2) Naked's products will conform at all times to all applicable federal, state and local laws, rules, regulations, ordinances, and other enactments and industry standards, including, but not limited to, those relating to product safety. + +B. Wade Enterprises and Athlete hereby jointly and severally represent to Naked the following: + +(1) Authorization. Wade Enterprises is an entity duly organized and validly existing in good standing under the laws of its jurisdiction of organization. Wade Enterprises and Athlete each have the requisite power and authority to enter into, execute and deliver the Agreement to which it is a party and to perform all of the obligations to be performed by each of them hereunder. The Agreement and the obligations and transactions contemplated hereby have been, duly authorized, executed and delivered by each of them, and the Agreement constitutes each of their valid and binding obligation, enforceable against such Party in accordance with its terms. + +(2) No Conflicts. Neither the execution and delivery of this Agreement nor the performance or consummation of the transactions contemplated hereby or thereby by either Wade Enterprises or Athlete will conflict with, result in the breach of, constitute a default under or accelerate the performance required by the terms of: (i) any law, rule or regulation of any government or governmental or regulatory agency; (ii) any judgment, order, writ, decree, permit or license of any court or governmental or regulatory agency to which such Party may be subject; (iii) any contract, agreement, commitment or instrument to which Wade Enterprises or Athlete is a party; or (iv) Wade Enterprises' constituent documents or other governing instruments (or constitute an event which, with the passage of time or action by a third party, would result in any of the foregoing). The execution and delivery of this Agreement by Wade Enterprises and Athlete and the performance and consummation of the transactions contemplated hereby do not require any registration, filing, qualification, consent or approval under any material law, rule, regulation, judgment, order, writ, decree, permit or license to which such Party is subject. + +16. Indemnity. + +Naked shall be solely responsible for all liability arising out of production, distribution and sale of its product. Naked hereby agrees to indemnify, defend and hold harmless Wade Enterprises, Athlete, his agents, representatives and employees (referred to collectively as "Wade Indemnities") from and against any and all claims, actions, causes or action, damages, injuries, expenses, liabilities (joint and several), penalties fines, attorneys' fees, court costs, and any other expenses incurred by Wade Indemnities arising out of (1) breach by Naked of any of the terms, representations or warranties made by Naked in this Agreement; or (2) Naked product liability or trademark patent or other proprietary right infringement; or (3) errors, omissions, fraudulent or negligent acts by Naked, its employees, agents or subcontractors in connection with (i) any advertising featuring Athlete; (ii) the performance of Naked's duties and obligations under this Agreement; (iii) the production, distribution, promotion, marketing and sales of products including related product packaging; and/or (iv) the operation and management of its production and distribution facilities, however caused. Naked shall not be obligated to indemnify Wade with respect to damages which are the result of the gross negligence or willful misconduct of Wade. + +11 + +Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015 + + + + + +Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended. + +Athlete and Wade Enterprises, jointly and severally, hereby agree to indemnify, defend and hold harmless Naked, its shareholders, directors, officers, employees, agents, and affiliates (referred to collectively as "Naked Indemnities") from and against any and all claims, actions, causes or action, damages, injuries, expenses, liabilities (joint and several), penalties fines, attorneys' fees, court costs, and any other expenses incurred by Naked Indemnities arising out of or are in any way connected directly or indirectly with any and all claims, suits, actions, costs, and other expenses, fines, judgments, investigations, proceedings, demands, liabilities, and obligations of any nature whatsoever, with respect to Wade Enterprises' or Athlete's breach of its respective representations and warranties, uncured breach of this Agreement or Athlete's gross negligence or willful misconduct. + +17. Relationship of Parties. Nothing contained in this Agreement shall be deemed or construed to place the Parties in the relationship of partners, joint venturers, principal-agents, or employer-employee, it being understood that the Parties are and will remain independent contractors in all respects and neither Party shall have any right to obligate or bind the other in any manner whatsoever. + +18. Assignment. Neither this Agreement nor any of the rights or obligations contained herein may be assigned or transferred by either Party without the prior written consent of the other Party. + +19. Expenses. Each Party will bear its own expenses with respect to the execution of this Agreement and the transactions contemplated thereunder, including but not limited to legal fees. + +20. Authority to Contract. Each of the Parties represents and warrants that it has full right and power to enter into this Agreement, to perform all obligations to be performed by it hereunder, and to grant all rights hereunder granted without violating the legal or equitable rights of any other person or entity, and that the execution and performance of this Agreement will not conflict with or result in a breach of or default under any of the terms or conditions of any agreement to which either Party has agreed, or is a Party, or may be bound. + +21. Construction of Agreement. Each Party acknowledges that it has participated in the negotiation of this Agreement and that no provision of this Agreement shall be construed against or be interpreted to the disadvantage of any Party by any court or other governmental or judicial authority by reason of such Party having or deemed to have structured, dictated or drafted such provision. + +12 + +Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015 + + + + + +Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended. + +22. Merger; Modification. This Agreement constitutes the entire agreement with respect to the subject matter contained herein and supersedes all previous communications and agreements between the Parties pertaining to the subject matter hereof, whether written or oral. The terms of this Agreement may not be modified, waived, amended, discharged, terminated, or supplemented, or otherwise changed, except by a written document executed by each Party. + +23. No Waiver. A waiver by either Party of any of the terms or conditions of this Agreement in any instance shall not be deemed or construed to be a waiver of such term or condition for the future, or of any subsequent breach thereof, or any other term or condition of this Agreement. All remedies, rights, undertakings, obligations, and agreements contained in this Agreement shall be cumulative and none of them shall be in limitation of any other remedy, right, undertaking, obligation or agreement of either Party. + +24. Severability. If any provision of this Agreement, as applied to either Party or to any circumstance, shall be adjudged by a court of competent jurisdiction to be void or unenforceable, whether at law or in equity, then such determination shall in no way affect any other provision of this Agreement, or the validity or enforceability of this Agreement. + +25. Choice of Law. This Agreement, all amendments hereto, and any and all issues or controversies arising here from or related hereto, shall be governed by and construed exclusively in accordance with the laws of the State of New York. + +26. Arbitration of Disputes. The parties agree to use commercially reasonable efforts to settle amicably any controversy, or claim arising out of the Agreement or any breach thereof through a dispute resolution process involving Wade and members from the senior management of Naked. If the parties do not otherwise agree, either party may present any unresolved dispute for arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association (the "Rules") then in effect. Such arbitration will be held in New York, NY. The arbitration will be by a single arbitrator chosen by the parties, provided that if the parties fail to agree and to appoint a single arbitrator within twenty (20) business days from the date that one of the parties has made a demand for arbitration, then the arbitrator will be chosen in accordance with the Rules. The decision of the arbitrator will be final and binding on the parties and any award of the arbitrator may be entered in any court of competent jurisdiction. + +27. Attorneys' Fees. If any action is necessary to enforce the provisions of this Agreement, including any claims or demands, or to interpret this Agreement, the prevailing Party shall be entitled to reasonable attorneys' fees, costs and necessary disbursements in addition to any other relief to which it may otherwise be entitled. + +28. Captions; Structure. Section headings used in this Agreement are for convenience of reference only and shall not in any way affect the interpretation of any section of this Agreement or of the Agreement itself. + +29. Time is of the Essence. Time is of the essence with respect to the performance of the duties and obligations hereunder. + +30. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which when taken together shall be construed as a single instrument. This Agreement may be executed by facsimile or other electronic transmissions, and signatures on any facsimile or electronic transmission copy hereof shall be deemed authorized original signatures. + +13 + +Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015 + + + + + +Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended. + +31. No Third Party Beneficiaries. This Agreement is not for the benefit of any third party and shall be deemed not to give any right or remedy to such third party, whether referred to herein or not. + +32. Recitals. The recitals contained in this Agreement are true and correct and are incorporated herein by reference. + +[SIGNATURE PAGE TO FOLLOW] + +14 + +Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015 + + + + + +Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended. + +IN WITNESS WHEREOF, the Parties have executed this Agreement on the day and date first above written. + +WITNESS: Naked Brand Group, Inc. ("Naked") By: By: /s/ Carole Hochman Date: Title: WITNESS: Wade Enterprises, LLC ("Wade") By: By: /s/ Dwyane Wade Date: + +15 + +Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015 + + + + + +Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended. + +Inducement Letter and Guarantee + +In order to induce Naked to enter into this Agreement with Wade Enterprises, LLC, I agree to the execution and delivery of this Agreement by Wade Enterprises, LLC, and agree to render all the services herein provided to be rendered by me, to grant all the rights granted herein, and to be bound by and duly perform and observe each and all of the terms and conditions of this Agreement regarding performance or compliance on my part, and I hereby join in all warranties, representations, agreements and indemnities made by Wade Enterprises, LLC, and further confirm the rights granted to Naked under the Agreement. All notices to Wade Enterprises, LLC shall be deemed notices to me with the same effect as if given to me. I certify that my services are rendered as an employee of Wade Enterprises, LLC, and, unless substituted for Wade Enterprises, LLC by law, I agree to look solely to Wade Enterprises, LLC for payment of compensation for my services and the discharge all other obligations of an employer, subject to the terms of the Agreement. + +By: /s/ Dwyane Wade Name: Dwyane Wade Date: NAKED BRAND GROUP, INC. By: /s/ Carole Hochman Name: Date: + +16 + +Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015 + + + + + +Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended. + +SCHEDULE A + +WADE TRADEMARKS AND COPYRIGHTS + +Wade's Asterisk Logo + + + +17 + +Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015 + + + + + +Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended. + +18 + +Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015 + + + + + +Confidential Information has been omitted in places marked "[***]" and has been filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 406 under the Securities Act of 1934, as amended. + +SCHEDULE B + +[***] + +19 + +Source: NAKED BRAND GROUP INC., POS AM (on S-1), 7/31/2015 \ No newline at end of file diff --git a/full_contract_txt/NeoformaInc_19991202_S-1A_EX-10.26_5224521_EX-10.26_Co-Branding Agreement.txt b/full_contract_txt/NeoformaInc_19991202_S-1A_EX-10.26_5224521_EX-10.26_Co-Branding Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..d70c2374577e90af611b69c9afe178fb7e66c5df --- /dev/null +++ b/full_contract_txt/NeoformaInc_19991202_S-1A_EX-10.26_5224521_EX-10.26_Co-Branding Agreement.txt @@ -0,0 +1,701 @@ +1 EXHIBIT 10.26 + +Confidential Treatment Requested + + CO-BRANDING AGREEMENT + + This Co-Branding Agreement (this "Agreement") by and between VerticalNet, Inc., a Pennsylvania corporation having a principal place of business at 700 Dresher Road, Suite 100, Horsham, Pennsylvania, PA 19044 ("VerticalNet"), and Neoforma.com, Inc., a Delaware corporation having a principal place of business at 3255-7 Scott Boulevard, Santa Clara, CA 95054 ("Neoforma"), is dated as of November 19, 1999 (the "Effective Date"). + + In consideration of the mutual covenants herein, and intending to be legally bound hereby, the Parties agree as follows: + +1. DEFINITIONS. + + 1.1 ADVERTISING shall mean any paid advertisements, links, pointers, sponsorships, buttons, banners, navigation, or any other placements or promotions or similar services or rights on a Site, but excluding Advertising that is not paid for or which is part of an overall partnering or revenue sharing arrangement and any Product Listings. + + 1.2 AFFILIATE shall mean, when used with reference to a Party, any individual or entity directly or indirectly controlling, controlled by or under common control with such Party. For purposes of this definition, "control" means the direct or indirect ownership of at least 50% of the outstanding voting securities of a Party, or the right to control the policy decisions of such Party. + + 1.3 CAREER CENTER GROSS MARGIN shall have the meaning ascribed thereto in Section 10.5.1 [CO-BRANDED CAREER CENTER]. + + 1.4 CO-BRANDED CAREER CENTER shall mean the Site located at an URL to be mutually agreed upon (which agreement shall not be unreasonably withheld or delayed) containing a VerticalNet Mark and a Neoforma Mark listing openings for positions and posting other career information in the medical and healthcare fields substantially in the form of the existing "Career Center" portions of the VerticalNet Medical Online Communities. + + 1.5 CO-BRANDED SITES shall mean the Co-Branded Career Center and the Co-Branded Training and Education Center. + + 1.6 CO-BRANDED TRAINING AND EDUCATION CENTER shall mean the Site located at an URL to be mutually agreed upon (which agreement shall not be unreasonably withheld or delayed) containing a VerticalNet Mark and a Neoforma Mark listing training and education offerings in the medical and healthcare fields substantially in the form of the existing "Training and Education" portions of the VerticalNet Medical Online Communities. + + 1.7 CONFIDENTIAL INFORMATION shall mean all proprietary and confidential information of a Party, including, without limitation, trade secrets, technical information, business information, sales information, customer and potential customer lists and identities, product sales plans, sublicense agreements, inventions, developments, discoveries, software, know-how, methods, techniques, formulae, data, processes and other trade secrets and proprietary ideas, whether or + +2 + +not protectable under patent, trademark, copyright or other areas of law, that the other Party has access to or receives and which, if disclosed in writing, is marked as "Confidential Information," or if disclosed orally, is confirmed in writing to be "Confidential Information" within five days of such oral disclosure, but does not include information that (a) is or becomes publicly available through no fault of the receiving Party; (b) was already known to the receiving Party at the time it was disclosed to the receiving Party, as evidenced by written records of the receiving Party; (c) is independently developed by or on behalf of the receiving Party without reference or access to such information, as evidenced by written records of the receiving Party; or (d) is received from a third party who is under no obligation of confidentiality to the disclosing Party. + + 1.8 DEDUCTIBLES shall mean credits for claims, allowances, seller rebates or returned goods, commissions paid to any third parties, and sales, service, excise, use, value-added and other similar taxes (excluding income taxes) actually paid. + + 1.9 INITIAL TERM shall mean the Effective Date through the day prior to the second anniversary of the Effective Date, unless earlier terminated pursuant to Section 11. + + 1.10 INTELLECTUAL PROPERTY shall mean any and all trade secrets, patents, copyrights, trademarks, URLs, trade dress, brand features, know-how and similar rights of any type under the laws of any applicable governmental authority, including, without limitation, all applications and registrations relating to any of the foregoing. + + 1.11 INTELLECTUAL PROPERTY RIGHTS shall mean all rights in and to Intellectual Property. + + 1.12 LABORATORY PRODUCTS shall mean any equipment, instruments or other products used for scientific research and analysis in the field of human health care, including, but not limited to, the categories of equipment, instruments and products listed on EXHIBIT A, (i) that is (a) previously used and is being resold by or on behalf of the prior end-user purchaser or (b) previously sold but unused and is being resold by or on behalf of the prior end-user purchaser, and (ii) excluding Medical Products. + + 1.13 LABORATORY PRODUCTS LISTINGS shall mean any VerticalNet Laboratory Product Listings and Neoforma Laboratory Product Listings. + + 1.14 LABORATORY PRODUCTS NET REVENUE shall mean the Transaction Fees derived from the promotion and sale of the Neoforma Product Listings for Laboratory Products through the Co-Branded Sites, less any Deductibles. + +Source: NEOFORMA INC, S-1/A, 12/2/1999 + + + + + + 1.15 LINK shall mean a link (including, but not limited to, a hyperlink, button or banner) that connects two Sites in a manner so that when a user clicks on the link, the user is transferred directly from one Site to a second Site. A "Link from Site A to Site B" indicates that Site A is the Site of origin and Site B is the Site to which the user is linked. + + 1.16 MEDICAL PRODUCTS shall mean any equipment, including capital equipment, instruments and other products used for in-patient diagnostic or treatment purposes in the field of human health care, excluding Laboratory Products. + + 2 3 + + 1.17 MEDICAL PRODUCTS LISTINGS shall mean any VerticalNet Medical Product Listings and Neoforma Medical Product Listings. + + 1.18 MEDICAL PRODUCTS NET REVENUE shall mean the Transaction Fees derived from the sale of New Medical Products and Used and Excess Medical Products through the Neoforma Sites, less any Deductibles. + + 1.19 NEOFORMA AUCTION shall mean the functionality and services provided at the "auction" portion of the Neoforma Site. + + 1.20 NEOFORMA CAREER CONTENT shall have the meaning ascribed thereto in Section 4.5 [CO-BRANDED CAREER CENTER]. + + 1.21 NEOFORMA COMPETITORS shall mean Medibuy.com, Promedix.com, Medicalbuyer.com and Medsite.com. During the Term, Neoforma may add to this defined term additional third parties whose primary purpose is the multi-vendor online sale of Medical Products. + + 1.22 NEOFORMA CONTENT shall mean the Neoforma Career Content and the Neoforma T&E Content. + + 1.23 NEOFORMA DELIVERABLE shall mean any good, service or other item to be delivered or made available by Neoforma. + + 1.24 NEOFORMA GAR shall mean Neoforma GAR, Inc. + + 1.25 NEOFORMA HOME PAGE shall mean the home page located at the Neoforma Site. + + 1.26 NEOFORMA LABORATORY PRODUCTS LISTING shall mean a Neoforma Product Listing relating to a Laboratory Product that is not already listed on a VerticalNet Site. + + 1.27 NEOFORMA LINK shall mean a Link that contains a Neoforma Mark and will take users of other Sites to the Neoforma Home Page. + + 1.28 NEOFORMA MARK shall mean any trademark, service mark, trade name, domain name, design or logo of Neoforma. + + 1.29 NEOFORMA MEDICAL PRODUCTS LISTING shall mean a Neoforma Product Listing relating to a Medical Product that is not already covered by a VerticalNet Medical Product Listing on Neoforma Plan and/or Neoforma Shop. + + 1.30 NEOFORMA PLAN shall mean the "plan" portion of the Neoforma Site. + + 1.31 NEOFORMA PRODUCT LISTING shall mean a Product Listing of Neoforma for Medical Products or Laboratory Products, including any Neoforma Product Listings for Laboratory Products made available hereunder by Neoforma to VerticalNet. + + 3 4 + + 1.32 NEOFORMA RESOURCES HOME PAGE shall mean the Site located at http://www.neoforma.com/rf/index.html?PageMode=Static&file=resrc_main&hdrTab= resources&subHdrTab=0&dir=resources (or a successor Site thereto). + + 1.33 NEOFORMA SHOP shall mean the "shop" portion of the Neoforma Site. + + 1.34 NEOFORMA SITE shall mean any Site owned and operated by Neoforma, including, but not limited to, the Site located at www.neoforma.com (or any successor Sites to any of the foregoing). + + 1.35 NEOFORMA T&E CONTENT shall have the meaning ascribed thereto in Section 5.5 [CO-BRANDED TRAINING AND EDUCATION SITE]. + + 1.36 NET ADVERTISING REVENUE shall mean the gross amount collected by a Party from a third party for the sale of Advertising, less any Deductibles. + + 1.37 NEW MEDICAL PRODUCTS shall mean new, unused Medical Products. + + 1.38 PARTY shall mean VerticalNet or Neoforma. + + 1.39 PRODUCT LISTING shall mean a listing of a third party's product at a Site in exchange for a fee, commission, or other compensation for purposes of promoting the sale of such third party's product to a third party purchaser, including, without limitation, sales by auction. + + 1.40 QUALIFIED LEAD shall mean a customer referred by Neoforma to VerticalNet that is not, at the time of referral, a customer of VerticalNet, which customer has agreed to place a listing on (a) the Co-Branded Career Center and/or (b) the Co-Branded Training and Education Center. + + 1.41 RENEWAL TERM shall have the meaning ascribed thereto in Section 11.1 [AUTOMATIC RENEWAL]. + + 1.42 SITE shall mean a site located on the World Wide Web portion of the Internet. + + 1.43 TERM shall mean the Initial Term and any Renewal Terms. + + 1.44 TRAINING AND EDUCATION GROSS MARGIN shall have the meaning ascribed thereto in Section 10.5.2 [CO-BRANDED TRAINING AND EDUCATION CENTER]. + +Source: NEOFORMA INC, S-1/A, 12/2/1999 + + + + + + 1.45 TRANSACTION ORIGINATION PARTY shall mean the Party from whose Site a third party clicked through, using a Link, to a Site containing a Product Listing resulting in the purchase of the product promoted in such Product Listing by such third party. + + 1.46 TRANSACTION FEE shall mean any payments, including, without limitation, fees and commissions, but collected by a Party from a third party in consideration for goods or services, excluding any Advertising for the benefit of a third party, provided or promoted at one or more Sites operated or controlled by such Party. + + 1.47 URL shall mean a universal resource locator used for purposes of identifying a page located on the Internet. + + 4 5 + + 1.48 USED AND EXCESS MEDICAL PRODUCTS shall mean (a) previously used Medical Products being resold by or on behalf of the prior end-user purchaser and (b) previously sold but unused Medical Products being resold by or on behalf of the prior end-user purchaser. + + 1.49 VERTICALNET AUCTION shall mean, in VerticalNet's discretion, the Site located at www.labx.com (or a successor Site thereto) or the "Auction" portion of the Site located at www.hospitalnetwork.com." + + 1.50 VERTICALNET BUYER'S GUIDE shall mean the "Buyer's Guide" portion of the VerticalNet Medical Online Communities (or a successor Site thereto). + + 1.51 VERTICALNET COMPETITOR shall mean any Site primarily directed to the sale or auction of Laboratory Products. + + 1.52 VERTICALNET CONTENT shall have the meaning ascribed thereto in Section 6.1 [VERTICALNET CONTENT]. + + 1.53 VERTICALNET DELIVERABLE shall mean any good, service or other item to be delivered or made available by VerticalNet. + + 1.54 VERTICALNET LABORATORY PRODUCTS LISTING shall mean a VerticalNet Product Listing relating to a Laboratory Product that is not already covered by a Neoforma Medical Product Listing on a VerticalNet Site. + + 1.55 VERTICALNET LINK shall mean a Link that contains a VerticalNet Mark and will take users of other Sites to a page of a VerticalNet Site. + + 1.56 VERTICALNET MARK shall mean any trademark, service mark, trade name, domain name, design or logo of VerticalNet. + + 1.57 VERTICALNET MEDICAL ONLINE COMMUNITIES shall mean the Sites located at www.edental.com, www.hospitalnetwork.com, www.medicaldesignonline.com, and www.nurses.com (or any successor Sites to any of the foregoing). + + 1.58 VERTICALNET MEDICAL PRODUCTS LISTING shall mean a VerticalNet Product Listing relating to a Medical Product that is not already listed on Neoforma Plan and Neoforma Shop. + + 1.59 VERTICALNET PRODUCT LISTING shall mean a Product Listing of VerticalNet for Medical Products or Laboratory Products, including any VerticalNet Product Listings made available hereunder by VerticalNet to Neoforma. + + 1.60 VERTICALNET PRODUCT SHOWCASE shall mean the "Product Showcase" portion of the VerticalNet Medical Online Communities. + + 1.61 VERTICALNET SITE shall mean any Site owned and operated by VerticalNet, including, but not limited to, the VerticalNet Medical Online Communities, the Co-Branded Sites and the Site located at www.verticalnet.com (or a successor Site to any of the foregoing). + + 5 6 + +2. MEDICAL PRODUCTS. + + 2.1 Within 30 days after the Effective Date, VerticalNet shall provide a copy of all VerticalNet Medical Product Listings for Used and Excess Medical Products existing as of the Effective Date to Neoforma for use on Neoforma Plan, Neoforma Shop and Neoforma Auction on an exclusive basis (even as to VerticalNet), to the extent VerticalNet has the right to do so. + + 2.2 Within 30 days after the Effective Date, VerticalNet shall provide a copy of all VerticalNet Medical Product Listings for New Medical Products existing as of the Effective Date to Neoforma for use on Neoforma Plan, Neoforma Shop and Neoforma Auction on an exclusive basis (even as to VerticalNet), to the extent VerticalNet has the right to do so. VerticalNet shall use commercially reasonable efforts to acquire consent from its customers to provide all VerticalNet Medical Product Listings for New Medical Products existing as of the Effective Date to Neoforma. + + 2.3 From time to time during the Term, VerticalNet shall provide a copy of all VerticalNet Medical Product Listings received by VerticalNet after the Effective Date to Neoforma as such Product Listings are made available to VerticalNet for use on Neoforma Plan, Neoforma Shop and Neoforma Auction on an exclusive basis (even as to VerticalNet), to the extent VerticalNet has the right to do so. VerticalNet shall use commercially reasonable efforts to acquire consent from its customers to provide all VerticalNet Medical Product Listings for New Medical Products received by VerticalNet after the Effective Date to Neoforma. + + 2.4 Notwithstanding the foregoing, VerticalNet's activities in connection with its "Storefronts" and "E-Commerce Centers" (as conducted today, in a fashion substantially similar to the manner in which such activities are conducted today or as otherwise mutually agreed upon by the parties, which agreement shall not be unreasonably withheld or delayed) shall not be considered to be a breach of Section 2.1 [MEDICAL PRODUCTS], 2.2 [MEDICAL PRODUCTS] or 2.3 [MEDICAL PRODUCTS]. + + 2.5 VerticalNet hereby grants Neoforma an exclusive license, even as to + +Source: NEOFORMA INC, S-1/A, 12/2/1999 + + + + + +VerticalNet, to use, modify, enhance, reproduce, display, perform and transmit the VerticalNet Medical Product Listings, subject to and in accordance with the terms, conditions and provisions of this Agreement, to the extent that VerticalNet has the right to do so. + + 2.6 Neoforma shall list each VerticalNet Product Listing on Neoforma Plan or Neoforma Shop or Neoforma Auction. The look-and-feel of the VerticalNet Product Listings as displayed on Neoforma Plan, Neoforma Shop and Neoforma Auction shall be substantially consistent with the look-and-feel of the other Medical Products Listings displayed on such Sites, unless otherwise agreed upon by the Parties. + + 2.7 VerticalNet shall add a Neoforma Link to each VerticalNet Buyer's Guide labeled "Neoforma Search" (or as otherwise mutually agreed upon by the Parties), substantially consistent with the prototype attached hereto as EXHIBIT B, which Links shall be as prominent as the other Links on such Sites. If a user of a VerticalNet Buyer's Guide clicks on such button, such user shall be linked to a Site containing a VerticalNet frame surrounding the appropriate search results on Neoforma Shop. As soon as is commercially reasonable, and in any event, no later that the first anniversary of the Effective Date, such search results shall only contain + + 6 7 + +Product Listings for New Medical Products. Notwithstanding the foregoing, if, at any time, Neoforma lists Used and Excess Medical Products on Neoforma Shop, VerticalNet may remove or relocate the Neoforma Link described in this Section 2.7 [MEDICAL PRODUCTS], in VerticalNet's reasonable discretion. + + 2.8 Neoforma hereby grants VerticalNet the right to frame all pages of the Neoforma Sites that contain Medical Products Listings with a frame containing VerticalNet Marks substantially consistent with the prototype attached hereto as EXHIBIT C, which framed pages shall only be accessible from the VerticalNet Sites. VerticalNet shall place a Link on the homepage of each VerticalNet Medical Online Community under "Marketplace" to such framed pages of the Neoforma Sites. + + 2.9 Neoforma shall host and maintain Neoforma Plan, Neoforma Shop and Neoforma Auction. Neoforma owns and shall continue to own the domain name and the URL used in connection with its business, including but not limited to, Neoforma Plan, Neoforma Shop and Neoforma Auction. + + 2.10 VerticalNet shall not enter into any agreement with a Neoforma Competitor for the on-line listing of Medical Products or place any Link to the Site of a Neoforma Competitor on the VerticalNet Medical Online Communities. + + 2.11 During the Term, VerticalNet shall not use its Site located at www.meddeals.com to conduct online auctions of Medical Products. + +3. LABORATORY PRODUCTS. + + 3.1 Within 30 days after the Effective Date, Neoforma shall provide a copy of all Neoforma Laboratory Product Listings existing as of the Effective Date to VerticalNet for use on the VerticalNet Sites on an exclusive basis (even as to Neoforma), to the extent Neoforma has the right to do so. Notwithstanding the foregoing, the provisions of Sections 3.1 [LABORATORY PRODUCTS] through 3.8 [LABORATORY PRODUCTS] shall not apply to any Laboratory Product sold through live (non-virtual) auctions conducted by Neoforma (through Neoforma GAR or otherwise) for which no Product Listing is made; provided, however, that Neoforma shall use commercially reasonable efforts to acquire Product Listings for all such Laboratory Products. If Neoforma receives a set of Product Listings packaged as a "lot," Neoforma shall use commercially reasonable efforts to provide all Laboratory Product Listings contained in such "lot" to VerticalNet in accordance with this Agreement. + + 3.2 From time to time during the Term, Neoforma shall provide a copy of all Neoforma Laboratory Product Listings received by Neoforma after the Effective Date to VerticalNet as such Product Listings are made available to Neoforma for use on the VerticalNet Sites on an exclusive basis (even as to Neoforma). + + 3.3 Neoforma hereby grants VerticalNet an exclusive license, even as to Neoforma, to use, modify, enhance, reproduce, display, perform and transmit the Neoforma Laboratory Product Listings, subject to and in accordance with the terms, conditions and provisions of this Agreement, to the extent Neoforma has the right to do so. + + 7 8 + + 3.4 VerticalNet shall list each such Neoforma Product Listing on the VerticalNet Auction. Neoforma shall provide each Neoforma Product Listing to VerticalNet in the form of the template attached hereto as EXHIBIT D. The look-and-feel of the Neoforma Product Listings as displayed on the VerticalNet Auction shall be substantially consistent with the look-and-feel of the other Laboratory Products Listings displayed on the VerticalNet Auction, unless otherwise agreed upon by the Parties. + + 3.5 VerticalNet hereby grants Neoforma the right to frame all pages of the VerticalNet Auction that contain Laboratory Products Listings with a frame containing Neoforma Marks, which framed pages shall only be accessible from the Neoforma Sites. + + 3.6 VerticalNet shall host and maintain the VerticalNet Auction. VerticalNet owns and shall continue to own the domain name and the URL used in connection with the VerticalNet Auction. + + 3.7 Neoforma shall add Links labeled "Laboratory" or "Laboratory Equipment" (or as otherwise mutually agreed upon by the Parties) to a Site containing a Neoforma frame surrounding the VerticalNet Auction from Neoforma Plan, Neoforma Shop and Neoforma Auction, which Links shall be as prominent as the other Links on such Sites. + + 3.8 Neoforma shall not enter into, and shall cause its Affiliates to not enter into, any agreement with a third party for the on-line listing of Laboratory Products on a VerticalNet Competitor or place any Link to a VerticalNet Competitor on the Neoforma Sites. + +Source: NEOFORMA INC, S-1/A, 12/2/1999 + + + + + + 3.9 Within four weeks after the Effective Date, the Parties will collaborate to establish a close mutually-beneficial arrangement between Neoforma GAR and VerticalNet. + +4. CO-BRANDED CAREER CENTER + + 4.1 VerticalNet shall design, develop and implement a Co-Branded Career Center and shall use commercially reasonable efforts to implement the Co-Branded Career Center as soon as possible following the Effective Date, and in any event, no later than February 1, 2000. The Co-Branded Career Center shall contain employment listings from the "Career Center" portion of each VerticalNet Medical Online Community. The overall "look and feel" of the Co-Branded Career Center shall be mutually agreed upon by the Parties and shall be substantially in the form of EXHIBIT E. VerticalNet shall host and maintain the Co-Branded Career Center in accordance with the terms and conditions set forth in this Agreement. Neoforma may maintain and/or add other career resource links to the Neoforma Sites; provided, however, that Neoforma shall not place any Links on any Neoforma Site to a Site that is primarily a career center and shall not place a Neoforma Link on any Site that is primarily a career center. + + 4.2 The Co-Branded Career Center shall contain Links to the "Career Center" portion of each VerticalNet Medical Online Community. + + 4.3 After the Co-Branded Career Center is implemented, VerticalNet shall notify Neoforma in writing at least five days prior to making any material change to the Co-Branded Career Center. If Neoforma does not notify VerticalNet of its rejection of such change within five days, Neoforma shall be deemed to have approved such change. + + 8 9 + + 4.4 VerticalNet shall register and own the domain name and the URL used in connection with the Co-Branded Career Center, subject, however, to Neoforma's agreement on the name to be used for the URL, which domain name and URL shall be mutually agreed upon by the Parties. + + 4.5 From time to time during the Term, Neoforma shall provide Qualified Leads to VerticalNet for job listings for inclusion, at VerticalNet's then current listing rate, in the Co-Branded Career Center and, in VerticalNet's sole discretion, on any other VerticalNet Site. VerticalNet shall be responsible for, and shall have sole control of, all credit, billing and collection in connection with the Qualified Leads. Neoforma shall have no authority to make collections on behalf of VerticalNet. + + 4.6 Neoforma hereby grants VerticalNet an exclusive license to use, modify, enhance, reproduce, display, perform and transmit the Neoforma Career Content, subject to and in accordance with the terms, conditions and provisions of this Agreement. VerticalNet shall not disclose, transfer or otherwise provide the Neoforma Career Content to any third party, except as otherwise permitted under this Agreement. + + 4.7 Neoforma shall place a Link on the Neoforma Resources Home Page (unless otherwise mutually agreed upon by the Parties) labeled "Career Center" (or a mutually agreeable substitute for such term) in a mutually agreeable location and size that will directly transfer users to the Co-Branded Career Center, which Links shall be as prominent as (a) the other Links on such Site and (b) the "Career" Link on such Site on the Effective Date. Neoforma shall not place any Link on a Neoforma Site to, or a Neoforma Link on the Site of, any other provider or host of a service similar to the Co-Branded Career Center or to any other career service websites. + + 4.8 VerticalNet hereby grant Neoforma the right to frame all pages of the Co-Branded Career Center with a frame, which framed pages shall only be accessible from the Neoforma Sites. + +5. CO-BRANDED TRAINING AND EDUCATION SITE + + 5.1 VerticalNet shall design, develop and implement a Co-Branded Training and Education Center and shall use commercially reasonable efforts to implement the Co-Branded Training and Education Center as soon as possible following the Effective Date. The Co-Branded Training and Education Center shall contain training and education listings from the "Training and Education" portion of each VerticalNet Medical Online Community. The overall "look and feel" of the Co-Branded Training and Education Center shall be mutually agreed upon by the Parties and shall be substantially in the form of EXHIBIT F. VerticalNet shall host and maintain the Co-Branded Training and Education Center in accordance with the terms and conditions set forth in this Agreement. + + 5.2 The Co-Branded Training and Education Center shall contain Links to the "Training and Education" portion of each VerticalNet Medical Online Community. + + 5.3 After the Co-Branded Training and Education Center is implemented, VerticalNet shall notify Neoforma in writing at least five days prior to making any material change to the Co-Branded Training and Education Center. If Neoforma does not notify VerticalNet of its rejection of such change within five days, Neoforma shall be deemed to have approved such change. + + 9 10 + + 5.4 VerticalNet shall register and own the domain name and the URL used in connection with the Co-Branded Training and Education Center, subject, however, to Neoforma's agreement on the name to be used for the URL, which domain name and URL shall be mutually agreed upon by the Parties. + + 5.5 On the Effective Date, Neoforma shall provide a copy of all listings for inclusion, at VerticalNet's reasonable business discretion and at VerticalNet's then current listing rate, in the Co-Branded Training and Education Center and, in VerticalNet's sole discretion, on any other VerticalNet Site (the "Neoforma T&E Content") on an exclusive basis (even as to Neoforma). Neoforma shall provide the Neoforma T&E Content to VerticalNet. VerticalNet shall be responsible for, and shall have sole control of, all credit, billing and collection in connection with the Neoforma T&E Content. Neoforma shall have no authority to make collections on behalf of VerticalNet. + + 5.6 From time to time during the Term, Neoforma shall provide Qualified + +Source: NEOFORMA INC, S-1/A, 12/2/1999 + + + + + +Leads to VerticalNet for job listings for inclusion, at VerticalNet's then current listing rate, in the Co-Branded Training and Education Center and, in VerticalNet's sole discretion, on any other VerticalNet Site. + + 5.7 Neoforma hereby grants VerticalNet an exclusive license to use, modify, enhance, reproduce, display, perform and transmit the Neoforma T&E Content, subject to and in accordance with the terms, conditions and provisions of this Agreement. VerticalNet shall not disclose, transfer or otherwise provide the Neoforma T&E Content to any third party, except as otherwise permitted under this Agreement. + + 5.8 Neoforma shall place a Link on the Neoforma Resources Home Page (unless otherwise mutually agreed upon by the Parties) labeled "Training and Education" (or mutually agreeable substitutes for such terms) in a mutually agreeable location and size that will directly transfer users to the Co-Branded Training and Education Center, which Links shall be as prominent as (a) the other Links on such Site and (b) the "Training" Link on the Site on the Effective Date. Neoforma shall not place any Link on a Neoforma Site to, or a Neoforma Link on the Site of, any other provider or host of a service similar to the Co-Branded Training and Education Center or to any other training or education service websites. + +6. VERTICALNET CONTENT + + 6.1 VerticalNet shall from time to time provide or make available to Neoforma, for use in accordance with the provisions of this Agreement, the title and an abstract of (a) all original content created from time to time by the managing editor of the VerticalNet Medical Online Communities, and (b) the content created from time to time by guest columnists for the VerticalNet Medical Online Communities (the "VerticalNet Content"), to the extent such columnists have approved the provision of such content by VerticalNet to Neoforma. + + 6.2 VerticalNet hereby grants to Neoforma a non-exclusive, non-transferable license to use, reproduce, display and transmit the VerticalNet Content, solely in connection with the operation of the Neoforma Site, subject to and in accordance with the terms, conditions and provisions of this Agreement. Neoforma may reproduce, display and transmit any VerticalNet + + 10 11 + +Content for up to three weeks on the Neoforma Site, and after the expiration of such three week period Neoforma shall cease to reproduce, display and transmit such VerticalNet Content and shall remove such VerticalNet Content from the Neoforma Site. + + 6.3 On each page of the Neoforma Site that contains all or a portion of the VerticalNet Content, Neoforma shall place a VerticalNet Link to the VerticalNet Site that contains the full text of such VerticalNet Content in a mutually agreeable location and size. + + 6.4 Neoforma shall not remove any titles or any trademark, copyright or patent notices, or any proprietary or restricted rights notices that appear on the VerticalNet Content. All such titles and notices must be reproduced on all permitted copies of the VerticalNet Content. + +7. ADVERTISING + + 7.1 ADVERTISEMENTS ON THE NEOFORMA SITE. + + 7.1.1 During the Term, VerticalNet shall have the non-exclusive right (except as to Neoforma) to arrange for the sale of Advertising on Neoforma Plan (and any other parts of the Neoforma Sites within which Neoforma elects to include Advertising) to third parties. During the Term, the parties shall meet from time to time to discuss the Advertising inventory available for sale. Any Advertising inventory that Neoforma appoints VerticalNet to arrange to sell shall not also be appointed to any third party to arrange for sale to third parties. + + 7.1.2 VerticalNet will use commercially reasonable efforts to sell advertisements on the Neoforma Sites. The advertising policies (including rates and procedures) applicable to VerticalNet's sale of advertising for the Neoforma Sites will be established by Neoforma (the "Neoforma Advertising Policies"). Neoforma shall promptly notify VerticalNet of any changes to the Neoforma Advertising Policies. + + 7.1.3 VerticalNet shall provide notice to Neoforma of each advertiser that agrees to place an advertisement on a Neoforma Site on the terms and conditions contained in the then current Neoforma Advertising Policies. Neoforma shall then have three business days after receipt of such notice to (a) accept or reject such advertiser, in its reasonable business discretion, and (b) notify VerticalNet of its decision. If, at the end of such three-day period, Neoforma has not responded to such notice, Neoforma shall be deemed to have accepted such advertiser. Neoforma shall then work with the advertiser to facilitate the placement of the advertisement and maintain such advertisement on the agreed-upon page of a Neoforma Site. Neoforma shall have the right to terminate its agreement with any such advertiser in its reasonable business discretion. Neoforma shall be responsible for, and shall have sole control of, all credit, billing and collection with the advertisements on the Neoforma Sites. VerticalNet shall have no authority to make collections on behalf of Neoforma. + + 7.1.4 During the Term, Neoforma shall not place any advertisements on a Neoforma Site for any VerticalNet Competitor. + + 7.2 ADVERTISEMENTS ON THE CO-BRANDED SITES. + + 11 12 + + 7.2.1 During the Term, VerticalNet shall have the exclusive right to arrange for the sale of all advertising on the Co-Branded Sites, subject to reasonable approval of each such advertiser by Neoforma. Neoforma shall have two days to consider each VerticalNet request for approval of the sale of advertising on a Co-Branded Site. If, at then end of such two-day period, Neoforma has neither approved nor denied a request, VerticalNet's request shall be deemed approved. + +Source: NEOFORMA INC, S-1/A, 12/2/1999 + + + + + + 7.2.2 VerticalNet will use reasonable efforts to sell advertisements on the Co-Branded Sites subject to VerticalNet's then current advertising policies (including rates and procedures). + +8. CO-MARKETING ACTIVITIES + + 8.1 ADVERTISING CAMPAIGNS. VerticalNet and Neoforma shall use commercially reasonable efforts to co-promote the VerticalNet Medical Online Communities, the Co-Branded Sites, the VerticalNet Buyer's Guide, Neoforma Plan, Neoforma Shop and Neoforma Auction in mutually agreeable advertising, collateral marketing material and sales force activities. All co-promotion advertising materials produced by or on behalf of either Party (the "Originating Party") shall be subject to the written approval of the other Party (the "Receiving Party"), which approval shall not to be unreasonably withheld, delayed or conditioned. The Receiving Party shall notify the Originating Party of its approval or disapproval of such advertising materials as soon as practicable, but in any event within five business days after Receiving Party's receipt thereof. Any failure of the Receiving Party to respond within such five business day period shall be deemed disapproval of the advertising materials in question. + + 8.2 REGISTRATION. The parties shall use commercially reasonable efforts to coordinate their registration systems to create a "pass-through" registration system for users first accessing the other's Sites. If a user first accesses a Neoforma Site from a VerticalNet Site, such user shall be considered a VerticalNet user for the purposes of this Agreement, to the extent such user identifies him/her/itself, or Neoforma can reasonably identify such user, as a VerticalNet user. If a user first accesses a VerticalNet Site from a Neoforma Site, such user shall be considered a Neoforma user for the purposes of this Agreement, to the extent such user identifies him/her/itself, or VerticalNet can reasonably identify such user, as a Neoforma user. + + 8.3 CROSS-PROMOTION. The Parties shall place Links to each other's Sites in mutually agreeable locations and sizes on their respective Sites as soon as practicable, and in no event more than 15 days after the Effective Date. The Links shall remain on the Sites during the Term; provided, however, that such Links may be removed or relocated if the Parties mutually agree thereto. + + 8.4 NEWSLETTERS. + + 8.4.1 NEOFORMA NEWSLETTERS. If Neoforma distributes a newsletter to its users or customers, Neoforma shall promote the VerticalNet Auction, the Co-Branded Career Center and the Co-Branded Training and Education Center in each such newsletter, in a manner consistent with the manner in which other third party promotions are set forth in such newsletters. + + 12 13 + + 8.4.2 VERTICALNET NEWSLETTERS. VerticalNet shall allow Neoforma to place sponsorships at no additional charge for Neoforma Shop, Neoforma Plan or Neoforma Auction in the VerticalNet newsletter distributed to its subscriber base two times during each calendar month, in a manner consistent with the manner in which other third party sponsorships are set forth in such newsletters. + + 8.5 LINKS. + + 8.5.1 Throughout the first six months after the Effective Date, VerticalNet shall place button Links to Neoforma Shop or Neoforma Auction on (a) [*] of all available third-party advertising inventory on the home pages of the VerticalNet Medical Online Communities. Thereafter, VerticalNet shall place button Links to Neoforma Shop or Neoforma Auction on unsold third-party advertising inventory (up to [*] of the total third party advertising inventory) on the home pages of the VerticalNet Medical Online Communities as frequently as VerticalNet places internal advertisements on such advertising inventory and (b) the site located at www.meddeals.com. + + 8.5.2 Throughout the Term, VerticalNet shall place button Links to Neoforma Shop or Neoforma Auction on (a) the VerticalNet Buyer's Guides (as described in Section 2.7 [MEDICAL PRODUCTS]) and VerticalNet Auction, and (b) the "News Analysis," "Product Center" and "Discussion Forums" portions of the VerticalNet Medical Online Communities. + +9. INTELLECTUAL PROPERTY + + 9.1 Except as set forth in Section 2.10 [MEDICAL PRODUCTS], nothing in this Agreement shall be construed as preventing VerticalNet from implementing VerticalNet Links on any other Site. + + 9.2 Except as set forth in Sections 3.8 [LABORATORY PRODUCTS] and 5.8 [CO-BRANDED TRAINING AND EDUCATION SITE], nothing in this Agreement shall be construed as preventing Neoforma from implementing Neoforma Links on any other Site. + + 9.3 VerticalNet hereby grants to Neoforma a non-exclusive, non-transferable, royalty-free, right and license to link to the VerticalNet Sites through a VerticalNet Link. VerticalNet shall furnish Neoforma with a full color representation of each VerticalNet Link at least two days prior to its scheduled placement on a page of the Neoforma Site. If VerticalNet subsequently modifies any VerticalNet Link or the URL associated with such VerticalNet Link, it shall furnish a representation of same to Neoforma, which Neoforma shall substitute for the prior version within two days after receipt thereof. VerticalNet shall have final approval over all VerticalNet Links on the Neoforma Site. + + 9.4 Neoforma hereby grants VerticalNet a non-exclusive, non-transferable, royalty-free, right and license to link to the Neoforma Sites through a Neoforma Link. Neoforma shall furnish VerticalNet with a full color representation of each Neoforma Link at least two days prior to its scheduled placement on the Co-Branded Sites or a VerticalNet Medical Online Community. If Neoforma subsequently modifies any Neoforma Link or the URL associated with such Neoforma Link, it shall furnish a representation of same to VerticalNet, which VerticalNet shall substitute for the prior version within two days after receipt thereof. Neoforma shall have final approval over all Neoforma Links on the Co-Branded Sites or a VerticalNet Medical Online Community. + +*Certain information on this page has been omitted and filed separately with the + +Source: NEOFORMA INC, S-1/A, 12/2/1999 + + + + + +Commission. Confidential treatment has been requested with respect to the omitted portions. + + 13 14 + + 9.5 Except for the express rights granted to Neoforma under this Agreement, Neoforma acknowledges and agrees that the Intellectual Property of VerticalNet is and shall remain the sole property of VerticalNet and nothing in this Agreement shall confer in Neoforma any right of ownership or license rights in VerticalNet's Intellectual Property. In addition, Neoforma shall not now or in the future contest the validity of VerticalNet's Intellectual Property. + + 9.6 Except for the express rights granted to VerticalNet under this Agreement, VerticalNet acknowledges and agrees that the Intellectual Property of Neoforma is and shall remain the sole property of Neoforma and nothing in this Agreement shall confer in VerticalNet any right of ownership or license rights in Neoforma's Intellectual Property. In addition, VerticalNet shall not now or in the future contest the validity of Neoforma's Intellectual Property. + + 9.7 Neoforma agrees to use the VerticalNet Marks in accordance with the terms of this Agreement and with good trademark practices including, but not limited to, protecting the value of the goodwill residing in such Intellectual Property. + + 9.8 VerticalNet agrees to use the Neoforma Marks in accordance with the terms of this Agreement and with good trademark practices including, but not limited to, protecting the value of the goodwill residing in such Intellectual Property. + + 9.9 Except as explicitly set forth herein, nothing in this Agreement shall be construed as preventing either Party from developing other co-branded versions of its materials, data, information and content. + +10. COMMERCIAL TERMS + + 10.1 DEVELOPMENT FEE. On the Effective Date, Neoforma shall pay to VerticalNet a one-time, non-refundable fee in the amount of [*] in consideration of VerticalNet's design, development and implementation of the Co-Branded Sites pursuant to Sections 4.1 [CO-BRANDED CAREER CENTER] and 5.1 [CO-BRANDED TRAINING AND EDUCATION SITE], respectively. + + 10.2 PROMOTIONAL FEES. In consideration of the performance by VerticalNet of its obligation to promote the Neoforma Shop, Neoforma Plan and Neoforma Auction under Section 8.2 [REGISTRATION], Neoforma shall pay to VerticalNet a promotional fee equal to [*], payable in eight equal quarterly and non-refundable installments of [*], with the first installment payable on the Effective Date, the second installment payable on the [*] month anniversary of the Effective Date, the third installment payable on the [*] month anniversary of the Effective Date, the fourth installment payable on the [*] month anniversary of the Effective Date, the fifth installment payable on the [*] month anniversary of the Effective Date, the sixth installment payable on the [*] month anniversary of the Effective Date, the seventh installment payable on the [*] month anniversary of the Effective Date and the eighth and final installment payable on the [*] month anniversary of the Effective Date. + + 10.3 MEDICAL PRODUCTS LISTINGS. + + 10.3.1 During each 12 month period during the Initial Term that commences on the Effective Date or an anniversary of the Effective Date (each, a "Contract Year"), + +*Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions. + + 14 15 + +commissions shall accrue in an amount equal to [*] of any Medical Products Net Revenues during such Contract Year resulting from (a) any VerticalNet Medical Products Listing or (b) any Neoforma Medical Products Listing for which VerticalNet was the Transaction Origination Party. From and after the point when such accrued commissions equal [*] in any Contract Year (such [*] of accrued commissions shall not be payable by Neoforma), Neoforma shall pay to VerticalNet commissions equal to [*] of any Medical Products Net Revenues during such Contract Year resulting from (a) any VerticalNet Medical Products Listing or (b) any Neoforma Medical Products Listing for which VerticalNet was the Transaction Origination Party. + + 10.3.2 After the Initial Term, Neoforma shall pay to VerticalNet commissions equal to [*] of any Medical Products Net Revenues during such Contract Year resulting from (a) any VerticalNet Medical Products Listing or (b) any Neoforma Medical Products Listing for which VerticalNet was the Transaction Origination Party. + + 10.4 LABORATORY PRODUCTS LISTINGS. During the Term, VerticalNet shall pay to Neoforma commissions equal to [*] of any Laboratory Products Net Revenues during such Contract Year resulting from (a) any Neoforma Laboratory Products Listing or (b) any VerticalNet Laboratory Products Listing for which Neoforma was the Transaction Origination Party. + + 10.5 CO-BRANDED SITES. + + 10.5.1 CO-BRANDED CAREER CENTER. VerticalNet will pay Neoforma [*] of the Career Center Gross Margin. "Career Center Gross Margin" shall mean the listing fees related to the Neoforma Career Content and e-commerce revenue derived during the Term from users of the Co-Branded Career Center (less Deductibles). + + 10.5.2 CO-BRANDED TRAINING AND EDUCATION CENTER. VerticalNet will pay Neoforma [*] of the Training and Education Gross Margin. "Training and Education Gross Margin" shall mean the listing fees related to the Neoforma T&E Content and e-commerce revenue derived during the Term from users of the Co-Branded Training and Education Center (less Deductibles). + + 10.6 ADVERTISING REVENUE. + +Source: NEOFORMA INC, S-1/A, 12/2/1999 + + + + + + 10.6.1 Except as set forth in Section 10.6.4 [ADVERTISING REVENUE], during the Term, VerticalNet shall not share any revenue derived from advertisements hosted on any VerticalNet Site with Neoforma; provided, however, that if Neoforma brings VerticalNet a Qualified Ad Lead (as defined below) for a new customer that turns into a sale of advertising on a VerticalNet Medical Online Community, VerticalNet shall pay to Neoforma a commission of [*] of the Net Advertising Revenue resulting from such sale of advertising. As used in this Section 10.6.1 [ADVERTISING REVENUE], a "Qualified Ad Lead" shall mean a customer referred to VerticalNet by Neoforma that is not, at the time of referral, a customer of VerticalNet, and which customer has agreed to place an advertisement on a VerticalNet Medical Online Community on the terms and conditions contained in VerticalNet's then current advertising policies. + +*Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions. + + 15 16 + + 10.6.2 VerticalNet shall have the first right to sell renewals of Advertising originally sold by VerticalNet on the Neoforma Sites until 30 days after the then current term of such Advertising expires. + + 10.6.3 Neoforma shall pay to VerticalNet a commission of [*] of the Net Advertising Revenue received during the Term for the initial placement and renewals of Advertising sold by VerticalNet on the Neoforma Sites. In addition, if Neoforma sells Advertising to a third party on the Neoforma Sites independently from VerticalNet and if Neoforma previously rejected Advertising by such party when proposed by VerticalNet pursuant to Section 7.1.3 [ADVERTISEMENTS ON THE NEOFORMA SITE], or terminated without cause a prior agreement with such third party that had resulted from such a proposal by VerticalNet, then Neoforma shall pay [*] of the Net Advertising Revenue resulting from such Advertising during the Term to VerticalNet. Neoforma shall provide prompt notice to VerticalNet of each advertiser that has agreed with Neoforma to place an advertisement on a Neoforma Site. + + 10.6.4 VerticalNet shall pay to Neoforma a commission of [*] of the Net Advertising Revenue received by VerticalNet during the Term for Advertising on the Co-Branded Sites. + + 10.7 PAYMENT TERMS. Except as otherwise provided in this Agreement, each Party shall provide the other Party with all amounts due under this Agreement for the prior calendar quarter within 30 days after the end of each calendar quarter during the Term. Each payment shall be accompanied by a statement detailing the amount of applicable gross revenue received, the calculation of the amount due to the other Party and the amount of the payment accompanying such statement. All payments due to either Party hereunder shall be made in immediately available U.S. funds, without set-off or counterclaim, less any taxes, duties, charges, withholdings, restrictions or conditions of any nature imposed or levied by any governmental taxing or other authority. + + 10.8 TAXES. All payments required under this Agreement are exclusive of federal, state, local and foreign taxes, duties, tariffs, levies and similar assessments. When applicable, such taxes shall appear as separate items on a Party's invoice or statement of the other Party. Payment of such taxes or charges shall be the responsibility of the Party whose obligation it is under this Agreement to make the payment in respect of which such taxes are assessed, excluding any taxes based upon the other Party's net income. In lieu thereof, a Party shall provide the other Party with a tax or levy exemption certificate acceptable to the taxing or levying authority. + + 10.9 AUDITS. During the 18-month period following the payment by one Party of any amount due under this Agreement to the other Party, the Party receiving payment (the "Auditing Party") shall have the right, at its own expense, to have an independent "Big Five" accounting firm (the "Auditor") audit the financial records of the other Party (the "Audited Party") relating to such payment to verify the accuracy of the Audited Party's financial records in order to verify the amount of the payments owed and/or paid. The Auditing Party may cause the Auditor to perform such an audit not more than once in any 12-month period, unless a prior audit within the past two years revealed that the amount owed by the Audited Party to the Auditing Party was underpaid in excess of 8% of the amount owed, in which case an audit may be performed no more frequently than twice in any 12-month period. If the amount owed by the Audited Party to + +*Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions. 16 17 + +the Auditing Party was underpaid, the Audited Party shall pay the additional amount owed and all accrued interest thereon to the Auditing Party within 15 days of notice of such underpayment to the Audited Party. If the amount owed by the Audited Party to the Auditing Party was underpaid in excess of 10% of the amount owed, the fees of such audit shall also be paid to the Auditing Party within 15 days of notice of such to the Audited Party. If the amount owed by the Audited Party to the Auditing Party was overpaid, the Auditing Party shall return the excess amount paid to the Auditing Party within 15 days of notice of such underpayment to the Auditing Party. The Auditing Party shall give reasonable advance written notice to the Audited Party, and each audit shall be conducted during normal business hours and in a manner that does not cause unreasonable disruption to the conduct of business by the Audited Party. + + 10.10 INTEREST. All payments not paid by the date such payments are due shall bear interest from the due date to the date payments are actually paid at the rate of the lower of (a) 1% per month or (b) the maximum rate permitted by law. + +11. TERM AND TERMINATION + + 11.1 AUTOMATIC RENEWAL. This Agreement will automatically renew at the end of the Initial Term or a subsequent renewal term on a year to year basis (each, a "Renewal Term"), unless either Party notifies the other at least 30 days prior to the end of the Initial Term or then current Renewal Term, as applicable, of its intention not to renew this Agreement (a "Termination Notice"). + +Source: NEOFORMA INC, S-1/A, 12/2/1999 + + + + + + 11.2 TERMINATION FOR CAUSE. Either Party may terminate this Agreement immediately upon written notice to the other Party in the event any material breach of a material term of this Agreement by such other Party that remains uncured 30 days in the case of a breach of a payment obligation, or 45 days for all other breaches, after notice of such breach was received by such other Party; provided, however that if such breach is not reasonably capable of cure within the applicable cure period, the breaching Party shall have an additional 180 days to cure such breach so long as the cure is commenced within the applicable cure period and thereafter is diligently prosecuted to completion as soon as possible. + + 11.3 UPON TERMINATION. Upon termination of this Agreement, (a) each Party's liability for any charges, payments or expenses due to the other Party that accrued prior to the date of termination shall not be extinguished by termination, and such amounts (if not otherwise due on an earlier date) shall be immediately due and payable on the termination date; (b) VerticalNet shall be responsible for all charges, payments or expenses incurred by it in connection with the removal of the Neoforma Links, Neoforma Content and Neoforma Product Listings from the Co-Branded Sites and all other VerticalNet Sites; (c) Neoforma shall be responsible for all charges, payments or expenses incurred by it in connection with the removal of the VerticalNet Links, VerticalNet Content and VerticalNet Product Listings from the Neoforma Sites; (d) all rights of Neoforma to use, display, reproduce or publish the VerticalNet Marks shall immediately cease, (e) all rights of VerticalNet to use, display, reproduce or publish the Neoforma Marks shall immediately cease, (f) all rights of Neoforma to use, display, reproduce and transmit the VerticalNet Content and VerticalNet Product Listings shall immediately cease and Neoforma shall, at VerticalNet's cost, return one copy of the VerticalNet Content and VerticalNet Product Listings for Medical Products to VerticalNet in electronic format and destroy all other copies of + + 17 18 + +such content, (g) all rights of VerticalNet to use, create derivative works of, reproduce, display, perform and transmit the Neoforma Content and Neoforma Product Listings shall immediately cease and VerticalNet shall, at Neoforma's cost, return one copy of the Neoforma Content and the Neoforma Product Listings for Laboratory Products to Neoforma in electronic format and destroy all other copies of such content, (h) all rights of VerticalNet to arrange for the sale of advertising on the Neoforma Sites shall immediately cease, (i) VerticalNet shall retain ownership of the domain names and URLs at which the VerticalNet Sites (including, but not limited to, the Co-Branded Sites) are located, and (j) Neoforma shall retain ownership of the domain names and URLs at which the Neoforma Sites (including, but not limited to Neoforma Plan and Neoforma Shop) are located. If a Termination Notice is sent, the parties shall promptly meet to discuss a phase-out of the Co-Branded Sites and all Links and transfers of Product Listings set forth herein. + +12. DISPUTE RESOLUTION + + 12.1 NEGOTIATION AND ESCALATION. If any controversy or claim arises relating to this Agreement, the Parties will attempt in good faith to negotiate a solution to their differences, including progressively escalating any controversy or claim through senior levels of management. If negotiation does not result in a resolution within 30 days of when one Party first notifies the other of the controversy or claim, either Party may resort to arbitration under Section 12.2 [ARBITRATION]. + + 12.2 ARBITRATION. Any controversy or claim between the Parties concerning any breach or alleged breach of this Agreement or performance or nonperformance of any obligation under this Agreement which cannot be resolved by negotiation will be resolved by binding arbitration under this Section 12.2 [ARBITRATION] and the then-current Commercial Rules and supervision of the American Arbitration Association (the "AAA"). If any part of this Section 12.2 [ARBITRATION] is held to be unenforceable, it will be severed and will not affect either the duty to arbitrate or any other part of this Section 12.2 [ARBITRATION]. The arbitration will be held in Philadelphia, Pennsylvania, before a sole disinterested arbitrator who is knowledgeable in business information and the Internet and experienced in handling commercial disputes. The arbitrator shall be appointed jointly by the Parties hereto within 30 days following the date on which the arbitration is instituted. If the Parties are unable to agree upon the arbitrator within such 30-day period, the AAA shall be instructed to select such arbitrator within 15 days thereafter. The arbitrator's award will be final and binding and may be entered in any court having jurisdiction. The arbitrator will not have the power to award punitive or exemplary damages, or any damages excluded by, or in excess of, any damage limitations expressed in this Agreement. Issues of arbitrability will be determined in accordance solely with the federal substantive and procedural laws relating to arbitration; in all other respects, the arbitrator will be obligated to apply and follow the substantive law of the Commonwealth of Pennsylvania. + + 12.3 EQUITABLE RELIEF. Notwithstanding anything to the contrary in this Agreement, in the event of an alleged violation of Article 13 [CONFIDENTIALITY] of this Agreement by either Party, the Party alleging such a violation may seek temporary injunctive or other appropriate equitable relief from any court of competent jurisdiction pending appointment of an arbitrator. The Party requesting such relief shall simultaneously file a demand for arbitration of the dispute, and shall + + 18 19 + +request that the American Arbitration Association proceed under its rules for an expedited hearing. + + 12.4 COSTS. Unless the arbitrator, if any, determines otherwise, each Party will bear its own attorneys' fees and other costs associated with the negotiation and arbitration provided for by this Article 12 [DISPUTE RESOLUTION], except that costs and expenses of the arbitrators shall be shared equally. If court proceedings to stay litigation or compel arbitration are necessary, the Party who unsuccessfully opposes such proceedings will pay all associated costs, expenses and attorneys' fees that are reasonably incurred by the other Party. + + 12.5 TWO YEAR LIMITATION. Except for claims under Sections 15.4 [INDEMNIFICATION BY NEOFORMA] and 15.5 [INDEMNIFICATION BY VERTICALNET] hereof, neither Party may bring a claim or action regardless of form, arising out of or related to this Agreement, including any claim of fraud or misrepresentation, more than two years after the cause of action accrues or + +Source: NEOFORMA INC, S-1/A, 12/2/1999 + + + + + +becomes known, whichever is later. + + 12.6 CONFIDENTIALITY. In order to facilitate the resolution of controversies or claims between the Parties with respect to each Party hereto, such controversies or claims, including details regarding negotiations, arbitration and settlement terms, shall be treated as Confidential Information of the other Party hereto in accordance with Article 13 [CONFIDENTIALITY]. + + 12.7 REMEDIAL MEASURES. In the event of (a) any material remediable breach of this Agreement by the other Party which remains uncured 30 days after notice of such breach (other than a breach of a payment obligation) was received by the other Party or (b) any material breach which cannot be cured, the non-breaching Party may take reasonable remediable measures at the cost of the breaching Party without prejudice and in addition to any other rights arising from such breach. In addition, the non-breaching Party shall take reasonable steps to mitigate damages arising out of such breach. + +13. CONFIDENTIALITY + + 13.1 CONFIDENTIALITY OBLIGATIONS. Except as permitted elsewhere under this Agreement, each Party agrees to take Reasonable Steps (as defined below) (a) to receive and maintain the Confidential Information of the other Party in confidence, (b) not to disclose such Confidential Information to any third parties and (c) to promptly notify the disclosing Party upon learning of any law, rule, regulation or court order that purports to compel disclosure of any Confidential Information of the disclosing Party and to reasonably cooperate with the disclosing Party in the exercise of the disclosing Party's right to protect the confidentiality of such Confidential Information. Neither Party hereto shall use all or any part of the Confidential Information of the other Party for any purpose other than to perform its obligations under this Agreement. The Parties will take Reasonable Steps (as defined below) to ensure that their employees, representatives and agents comply with this provision. As used herein, "Reasonable Steps" means at least the same degree of care that the receiving Party uses to protect its own Confidential Information, and, in no event, no less than reasonable care. + + 13.2 EXCLUSIONS. Nothing contained herein shall prevent a Party from disclosing Confidential Information pursuant to any applicable law, rule, regulation or court order; provided, however, that such Party complies with the notice provisions of Section 13.1(c) [CONFIDENTIALITY OBLIGATIONS] to the + + 19 20 + +extent permissible under applicable laws, rules, regulations or court orders. Such disclosure shall not alter the status of such information hereunder for all other purposes as Confidential Information. + + 13.3 TERMINATION. Upon termination of this Agreement, all Confidential Information shall be returned to the disclosing Party or destroyed unless otherwise specified or permitted elsewhere under this Agreement. The confidentiality obligations contained in this Article 13 [CONFIDENTIALITY] shall survive termination of this Agreement for a period of three years. + + 13.4 INJUNCTION. Each Party acknowledges and agrees that the provisions of this Article 13 [CONFIDENTIALITY] are reasonable and necessary to protect the other Party's interests in its Confidential Information, that any breach of the provisions of this Article 13 [CONFIDENTIALITY] may result in irreparable harm to such other Party, and that the remedy at law for such breach may be inadequate. Accordingly, in the event of any breach or threatened breach of the provisions of this Article 13 [CONFIDENTIALITY] by a Party hereto, the other Party, in addition to any other relief available to it at law, in equity or otherwise, shall be entitled to seek temporary and permanent injunctive relief restraining the breaching Party from engaging in and/or continuing any conduct that would constitute a breach of this Article 13 [CONFIDENTIALITY], without the necessity of proving actual damages or posting a bond or other security. + + 13.5 PUBLICITY. Except as may be required by applicable laws, rules or regulations (including those arising under any securities laws), neither Party will originate any publicity, news release or other public announcement, written or oral, whether to the public press or otherwise, concerning the relationship between the Parties or the transactions described in this Agreement without the prior written consent of the other Party, which consent shall not be unreasonably withheld or delayed. In the event disclosure is required by applicable law, rules or regulations, then the Party required to so disclose such information shall, to the extent possible, provide to the other Party for its approval (such approval not to be unreasonably withheld) a written copy of such public announcement at least five business days prior to disclosure. Notwithstanding the foregoing, either Party shall have the right to make a press release with respect to its entering into this Agreement; provided that such Party provides to the other Party a copy of the proposed press release no less than five business days prior to its proposed release and that the contents of such press release shall be subject to the other Party's consent, which consent shall not be unreasonably delayed or withheld. + +14. REPRESENTATIONS AND WARRANTIES. Each Party hereby represents, covenants and warrants to the other Party that: + + 14.1 It has the corporate power to enter into this Agreement and to grant the rights and licenses granted herein and otherwise perform this Agreement; + + 14.2 It is not a Party to any agreement or understanding and knows of no law or regulation that would prohibit it from entering into and performing this Agreement or that would conflict with this Agreement; and + + 14.3 When executed and delivered by it, this Agreement will constitute a legal, valid and binding obligation of it, enforceable against it in accordance with this Agreement's terms. + + 20 21 + +15. DISCLAIMER OF WARRANTY, LIMITATION OF LIABILITY AND INDEMNIFICATION. + + 15.1 DISCLAIMER OF WARRANTIES. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, VERTICALNET HEREBY DISCLAIMS ALL WARRANTIES, EXPRESS, IMPLIED OR + +Source: NEOFORMA INC, S-1/A, 12/2/1999 + + + + + +STATUTORY, WITH RESPECT TO ANY AND ALL VERTICALNET DELIVERABLES, INCLUDING BUT NOT LIMITED TO ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE AND NON-INFRINGEMENT. + + 15.2 DISCLAIMER OF WARRANTIES. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, NEOFORMA HEREBY DISCLAIMS ALL WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, WITH RESPECT TO ANY AND ALL NEOFORMA DELIVERABLES, INCLUDING BUT NOT LIMITED TO ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE AND NON-INFRINGEMENT. + + 15.3 LIMITATION OF LIABILITY. EXCEPT IN CONNECTION WITH A BREACH BY EITHER PARTY OF ARTICLE 13, THE INDEMNIFICATION OBLIGATIONS OF NEOFORMA UNDER SECTIONS 15.4(c) [INDEMNIFICATION BY NEOFORMA] AND (d) AND THE INDEMNIFICATION OBLIGATIONS OF VERTICALNET UNDER SECTION 15.5(c) [INDEMNIFICATION BY VERTICALNET] AND (d), NEITHER PARTY WILL BE LIABLE FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL, EXEMPLARY OR INCIDENTAL DAMAGES ARISING OUT OF OR RELATED TO THIS AGREEMENT, HOWEVER CAUSED AND UNDER ANY THEORY OF LIABILITY (INCLUDING NEGLIGENCE), EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. EXCEPT IN CONNECTION WITH A BREACH BY EITHER PARTY OF ARTICLE 13, THE INDEMNIFICATION OBLIGATIONS OF NEOFORMA UNDER SECTION 15.4(c) [INDEMNIFICATION BY NEOFORMA] AND (d) AND THE INDEMNIFICATION OBLIGATIONS OF VERTICALNET UNDER SECTION 15.5(c) [INDEMNIFICATION BY VERTICALNET] AND (d), EACH PARTY'S LIABILITY FOR DAMAGES HEREUNDER SHALL NOT EXCEED $1,000,000. + + 15.4 INDEMNIFICATION BY NEOFORMA. Neoforma shall indemnify and hold harmless VerticalNet and its officers, directors, employees and agents from and against any and all losses, claims, damages, liabilities, obligations, penalties, judgments, awards, costs, expenses and disbursements, including without limitation, the costs, expenses and disbursements, as and when incurred, of investigating, preparing or defending any action, suit, proceeding or investigation asserted by a third party, caused by, relating to, based upon, arising out of or in connection with (a) any breach by Neoforma of the representations, warranties or agreements made by it under this Agreement, (b) negligence, recklessness or intentional misconduct on the part of Neoforma or its Affiliates or its officers, directors, employees, agents or consultants, (c) any claim that the Neoforma Content, Neoforma Product Listings, Neoforma Sites or a Neoforma Mark violates, infringes or misappropriates any Intellectual Property Rights or any other right of any third party, or (d) the use of a VerticalNet Mark or a VerticalNet Deliverable outside of the license rights granted herein. + + 15.5 INDEMNIFICATION BY VERTICALNET. VerticalNet shall indemnify and hold harmless Neoforma and its officers, directors, employees and agents from and against any and all losses, + + 21 22 + +claims, damages, liabilities, obligations, penalties, judgments, awards, costs, expenses and disbursements, including without limitation, the costs, expenses and disbursements, as and when incurred, of investigating, preparing or defending any action, suit, proceeding or investigation asserted by a third party, caused by, relating to, based upon, arising out of or in connection with (a) any breach by VerticalNet of the representations, warranties or agreements made by it under this Agreement, (b) negligence, recklessness or intentional misconduct on the part of VerticalNet or its officers, directors, employees, agents or consultants, (c) any claim that the VerticalNet Content, VerticalNet Product Listings, VerticalNet Sites or a VerticalNet Mark violates, infringes or misappropriates any Intellectual Property Rights or any other right of any third party, or (d) the use of a Neoforma Mark or a Neoforma Deliverable outside of the license rights granted herein. + + 15.6 INDEMNITEE OBLIGATIONS. Each person seeking to be reimbursed, indemnified, defended and/or held harmless under Sections 15.4 [INDEMNIFICATION BY NEOFORMA] or 15.5 [INDEMNIFICATION BY VERTICALNET] (each, an "Indemnitee") shall (a) provide the Party obliged to indemnify such Indemnitee with prompt written notice of any claim, suit, demand or other action for which such Indemnitee seeks to be reimbursed, indemnified, defended or held harmless (each, a "Claim"), which notice shall include a reasonable identification of the alleged facts giving rise to such Claim; (b) grant such Party reasonable authority and control over the defense and settlement of any such Claim; and (c) reasonably cooperate with such Party and its agents in defense of any such Claim. Each Indemnitee shall have the right to participate in the defense of any Claim for which such Indemnitee seeks to be reimbursed, indemnified, defended or held harmless, by using attorneys of such Indemnitee's choice, at such Indemnitee's expense. Any settlement of a Claim for which any Indemnitee seeks to be reimbursed, indemnified, defended or held harmless under this Article shall be subject to the prior written approval of such Indemnitee, such approval not to be unreasonably withheld, conditioned or delayed. + + 15.7 ESSENTIAL PART OF BARGAIN. The Parties acknowledge that the disclaimers and limitations set forth in this Article 15 [DISCLAIMER OF WARRANTY, LIMITATION OF LI...] are an essential element of this Agreement between the Parties and that the Parties would not have entered into this Agreement without such disclaimers and limitations. + +16. MISCELLANEOUS + + 16.1 GOVERNING LAW. This Agreement shall be governed by and interpreted under the laws of the Commonwealth of Pennsylvania without regard to its conflicts of law provisions. + + 16.2 NO ASSIGNMENT. Except as otherwise set forth herein, neither Party shall transfer, assign or cede any rights or delegate any obligations hereunder, in whole or in part, whether voluntarily or by operation of law, without the prior written consent of the other Party, which consent may be withheld at the other Party's reasonable business discretion; provided, however, that either Party may transfer this Agreement without prior written consent of the other Party to an Affiliate or in connection with a merger or sale of all or substantially all of the stock or assets of such Party. + + 16.3 GOOD FAITH. The Parties undertake to display to each other the utmost good faith, consistent with their respective rights and obligations set forth in this Agreement. + + 22 23 + + 16.4 INDEPENDENT CONTRACTORS. In connection with this Agreement, each Party is an independent contractor. This Agreement does not, and shall not be construed to, create an employer-employee, agency, joint venture or partnership relationship between the Parties. Neither Party shall have any authority to act + +Source: NEOFORMA INC, S-1/A, 12/2/1999 + + + + + +for or to bind the other Party in any way, to alter any of the terms or conditions of any of the other Party's standard forms of invoices, sales agreements, warranties or otherwise, or to warrant or to execute agreements on behalf of the other or to represent that it is in any way responsible for the acts, debts, liabilities or omissions of the other Party. + + 16.5 NOTICES. All notices, reports, payments and other communications required or permitted to be given under this Agreement (each, a "Notice") shall be in writing and shall be given either by personal delivery against a signed receipt, by express delivery using a nationally recognized overnight courier, or by facsimile. All Notices shall be properly addressed as follows, or to such other addresses as may be specified in a Notice given hereunder: + +If to VerticalNet: with a copy to: + + Attn: General Counsel Attn: Mario V. Shaffer VerticalNet, Inc. VerticalNet, Inc. 700 Dresher Road, Suite 100 700 Dresher Road, Suite 100 Horsham, Pennsylvania 19044 Horsham, Pennsylvania 19044 Fax No.: (215) 443-3336 Fax No.: (215) 784-1960 + +If to Neoforma: with a copy to: + + Attn: Chief Financial Officer Attn: Ralph M. Pais, Esq. Neoforma, Inc. Fenwick & West LLP 3255-7 Scott Boulevard Two Palo Alto Square Santa Clara, CA 95054 Palo Alto, CA 94306 Fax No.: 408-549-6211 Fax No.: 650-494-1417 + +A Notice shall be deemed to be effective upon personal delivery or, if sent via overnight delivery, upon receipt thereof. A Notice sent via facsimile is deemed effective on the same day (or if such day is not a business day, then on the next succeeding business day) if such facsimile is sent before 5:00 p.m. Philadelphia time and on the next day (or if such day is not a business day, then on the next succeeding business day) if such Notice is sent after 5:00 p.m. Philadelphia time. + + 16.6 AMENDMENT OR MODIFICATION. No subsequent amendment, modification or waiver of any of the provisions of this Agreement shall be effective unless in writing and signed by the Parties. + + 16.7 ENTIRE AGREEMENT. This Agreement sets out the entire agreement between the Parties with respect to the subject matter of this Agreement and supersedes all prior agreements, proposals, arrangements and communications, whether oral or written, with respect to the subject matter hereof. + + 23 24 + + 16.8 SEVERABILITY. If any provision of this Agreement is held by a tribunal of competent jurisdiction to be illegal, invalid, or otherwise unenforceable in any jurisdiction, then to the fullest extent permitted by law (a) the same shall not effect the other terms or provisions of this Agreement, (b) such term or provision shall be deemed modified to the extent necessary in the tribunal's opinion to render such term or provision enforceable, and the rights and obligations of the Parties shall be construed and enforced accordingly, preserving to the fullest extent the intent and agreements of the Parties set forth herein and (c) such finding of invalidity, illegality or unenforceability shall not affect the validity, legality or enforceability of such term or provision in any other jurisdiction. + + 16.9 NO WAIVER. Failure to enforce any term of this Agreement is not a waiver of future enforcement of that or any other term. No term or provision of this Agreement will be deemed waived and no breach excused unless such waiver or excuse is in writing and signed by the Party against whom enforcement of such waiver or excuse is sought. + + 16.10 SURVIVAL. Sections 10.7 [PAYMENT TERMS]-10.10 [INTEREST], 11.3 [UPON TERMINATION] and 12-16; any payment obligations of the Parties hereunder accruing prior to the date of termination; and any other provision herein expressly surviving termination or necessary to interpret the rights and obligations of the Parties in connection with the termination of the term of this Agreement will survive the termination or expiration of this Agreement. + + 16.11 NO THIRD PARTY BENEFICIARIES. Nothing in this Agreement is intended to confer benefits, rights or remedies unto any person or entity other than the Parties and their permitted successors and assigns. + + 16.12 WAIVER OF JURY TRIAL. Each Party hereby irrevocably waives all rights a Party may have to a trial by jury in any legal action or proceeding arising out of or in connection with this Agreement or the transactions contemplated hereby. + + 16.13 TITLES. The headings appearing at the beginning of the Sections contained in this Agreement have been inserted for identification and reference purposes only and shall not be used to determine the construction or interpretation of this Agreement. The nomenclature of the defined terms in this Agreement shall only be used for the construction of this Agreement, and are not to be used for any other purpose, including, but not limited to, interpretation for accounting purposes. + + 16.14 FORCE MAJEURE. Neither Party shall be held to be in breach of this Agreement by reason of a force majeure event, including, but not limited to, act of God, delay in transportation, fire, flood, earthquake, storm, war, act of a public enemy, civil commotion or any law, rule, regulation, order or other action by any public authority or any other matter reasonably beyond a Party's control. To the extent failure to perform is caused by such a force majeure event, such Party shall be excused from performance hereunder so long as such event continues to prevent such performance, and provided the non-performing Party takes all reasonable steps to resume full performance. + + 16.15 COMPLIANCE WITH LAWS. Each Party shall comply with all prevailing laws, rules and regulations and obtain all necessary approvals, consents and permits required by the applicable + + 24 25 + +Source: NEOFORMA INC, S-1/A, 12/2/1999 + + + + + +agencies of the government of the jurisdictions that apply to its activities or obligations under this Agreement. + + 16.16 EXECUTION IN COUNTERPARTS, FACSIMILES. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. This Agreement shall become binding when any one or more counterparts hereof, individually or taken together, bear the signatures of both Parties hereto. For the purposes hereof, a facsimile copy of this Agreement, including the signature pages hereto, shall be deemed an original. + + [The remainder of this page is intentionally left blank.] + + 25 26 + +IN WITNESS WHEREOF, the Parties to the Agreement by their duly authorized representatives have executed this Agreement as of the date first written above. + +VERTICALNET, INC. NEOFORMA.COM, INC. + +By: /s/ MARIA V. SHAFFER By: /s/ FREDERICK RUEGSEGGER -------------------------------- --------------------------------- Maria V. Shaffer Vice President, Business Development and International Title: CFO ------------------------------ + +27 + + EXHIBIT A + +CATEGORIES OF LABORATORY PRODUCTS + +PRODUCT GROUPING PRODUCT CLASSIFICATION POINTS TO - ---------------- ---------------------- --------- Analytical Instruments Analytical Inst-other Analytical Inst-other Analytical Instruments Atomic Absorption Atomic Absorption Analytical Instruments Balances Balances Analytical Instruments Chemistry Analyzers Chemistry Analyzers Analytical Instruments Chrom-Data Chrom-Data Analytical Instruments Chrom-GC Chrom-GC Analytical Instruments Chrom-HPLC Chrom-HPLC Analytical Instruments Chrom-Other Chrom-Other Analytical Instruments Chrom-TLC Chrom-TLC Analytical Instruments Colorimeter Colorimeter Analytical Instruments Computer Equipment Computer Equipment Analytical Instruments Electron Microscope Electron Microscope Analytical Instruments Electronics - Lab Electronics - Lab Analytical Instruments Elemental Analysis Elemental Analysis Analytical Instruments Infrared IR/UVVIS/XRAY Analytical Instruments Mass Spectrometer Mass Spectrometer Analytical Instruments Particle Size Particle Size Analytical Instruments pH / ISE pH / ISE Analytical Instruments Physical Property Test Physical Property Test Analytical Instruments Polarimeter Polarimeter Analytical Instruments Spectrophotometer Spectrophotometer Analytical Instruments Temperature Equip Temperature Equip Analytical Instruments Titrators Titrators Analytical Instruments Universal Tester Universal Tester Analytical Instruments UV / VIS IR/UVVIS/XRAY Analytical Instruments Viscometer Viscometer Analytical Instruments X-Ray IR/UVVIS/XRAY Biotechnology Biotech-other Biotech-other Biotechnology Electrophoresis Electrophoresis Biotechnology Fermenters Fermenters Biotechnology Microplates Microplates Biotechnology Molecular Biology Molecular Biology Biotechnology Scintillation Counters Scintillation Counters Clinical Laboratory Clinical Lab - Other Clinical Lab - Other Clinical Laboratory Blood / Gas Analyzers Blood / Gas Analyzers Clinical Laboratory Blood Collection Blood Collection Clinical Laboratory Clinical Chemistry Analyzer Clinical Chemistry Analyzer Clinical Laboratory Hematology Hematology Clinical Laboratory Medical Equipment Medical Equipment Clinical Laboratory Microbiology Microbiology + +28 + + Clinical Laboratory Other Body Fluid Analyzer Other Body Fluid Analyzer Clinical Laboratory Slide Stainers Histology Glassware Beakers Beakers Glassware Bottles Bottles Glassware Condensers Condensers Glassware Flasks Flasks Glassware Funnels Funnels Glassware Glass-other Glass-other Glassware Tubes Tubes Glassware Vials Vials Lab Equipment Animal Care Animal Care Lab Equipment Antiques Antiques Lab Equipment Autoclaves Autoclaves Lab Equipment Baths, Water/Oil/Dry Baths, Water/Oil/Dry Lab Equipment Books/Manuals Books/Manuals + +Source: NEOFORMA INC, S-1/A, 12/2/1999 + + + + + +Lab Equipment Centrifuge Centrifuge Lab Equipment Chillers Chillers Lab Equipment Cleaners Cleaners Lab Equipment Critical Environments Critical Environments Lab Equipment Digesters Digesters/Mixers Lab Equipment Environmental Chambers Environmental Chambers Lab Equipment Evaporators Evaporators Lab Equipment Filtration Filtration Lab Equipment Fraction Collectors Fraction Collectors Lab Equipment Freeze Dry/Lyoph Freeze Dry/Lyoph Lab Equipment Freezers / Refrigerators Freezers / Refrigerators Lab Equipment Fume Hoods Fume Hoods Lab Equipment Furnaces Furnaces Lab Equipment Furniture - Lab Furniture - Lab Lab Equipment Glove Boxes Glove Boxes Lab Equipment Heating Apparatus Heating Apparatus Lab Equipment Histology Histology Lab Equipment Hotplates / Stirrers Hotplates / Stirrers Lab Equipment Incubators Incubators Lab Equipment Lab Equipment - Other Lab Equipment - Other Lab Equipment Liquid Handling / Pipettors Liquid Handling / Pipettors Lab Equipment Metallurgical Metallurgical Lab Equipment Microtomes Histology Lab Equipment Mixers Digesters/Mixers Lab Equipment Mobile Lab Mobile Lab Lab Equipment Motors Motors Lab Equipment Optics Optics Lab Equipment Ovens Ovens Lab Equipment Petroleum Lab Petroleum Lab Lab Equipment Pharmaceutical Pharmaceutical Lab Equipment Photography Photography + +29 + + Lab Equipment Process / Pilot Process / Pilot Lab Equipment Pumps Pumps Lab Equipment Radioactivity Radioactivity Lab Equipment Recorders Recorders Lab Equipment Regulators / Gauges Regulators / Gauges Lab Equipment Robotics Robotics Lab Equipment Safety Safety Lab Equipment Semi-Conductor Semi-Conductor Lab Equipment Shakers Shakers Lab Equipment Stirrers / Hotplates Stirrers / Hotplates Lab Equipment Vacuum Vacuum Lab Equipment Valves / Fittings Valves / Fittings Lab Equipment Water Purification Water Purification LabSupplies Chemicals Chemicals LabSupplies Plasticware Plasticware LabSupplies Supplies Supplies Microscopes Image Analysis Image Analysis Microscopes Microscope Accessories Microscope Accessories Microscopes Microscope Parts Microscope Parts Microscopes Microscopes Microscopes Test/Measurement Multimeter Multimeter Test/Measurement Oscilloscopes Oscilloscopes Test/Measurement Power Supply Power Supply Test/Measurement Test/Meas-other Test/Meas-other Test/Measurement Timers/Controllers Timers/Controllers Test/Measurement Volt/Amp/Ohm Meters Volt/Amp/Ohm Meters + +30 + + EXHIBIT B + +31 + + [GRAPHIC OF WEB PAGE -- Features] + +32 + + EXHIBIT C + +33 + + [GRAPHIC OF WEB PAGE -- Vertical Side Pages] + +34 + + [GRAPHIC OF WEB PAGE -- Specialty Shop] + +35 + + EXHIBIT D + +LABORATORY PRODUCT LISTING TEMPLATE PRODUCT LISTING TEMPLATE + +A Microsoft Excel Spreadsheet containing the following columns: + +Source: NEOFORMA INC, S-1/A, 12/2/1999 + + + + + +- ----------- ----------- -------------- ---------- ---------------------- ----------- ----------- NAME CATEGORY MFG/BRAND MODEL # ORIGINAL ITEM PRICE HEIGHT WEIGHT - ----------- ----------- -------------- ---------- ---------------------- ----------- ----------- NAME CATG FLDA FLDB FLDC FLDD FLDE - ----------- ----------- -------------- ---------- ---------------------- ----------- ----------- + +- ------------- ----------- -------------- ---------------- ------------------- ------------------ CAPACITY QUANTITY STARTING BID RESERVE PRICE BID INCREMENTS(1) START DATE/TIME(2) - ------------- ----------- -------------- ---------------- ------------------- ------------------ FLDG QNTY MINB RSRV INCR STRT - ------------- ----------- -------------- ---------------- ------------------- ------------------ + +(1) default is [*] (2) default is today + +- --------------- -------- -------------- -------- ----------- ---------------- ------------------ DURATION(3) ITEM # APPROX. AGE SKU LOCATION SALESPERSON DESCRIPTION - --------------- -------- -------------- -------- ----------- ---------------- ------------------ DAYE FLD1 FLD2 FLDF FLDH FLDI DESC - --------------- -------- -------------- -------- ----------- ---------------- ------------------ + +(3) default is 7 days + +- --------------- --------------------- -------- ----------- ------------------ ------------------ SELLER ID# IMAGE LOCATION - --------------- --------------------- -------- ----------- ------------------ ------------------ SELL IMAG - --------------- --------------------- -------- ----------- ------------------ ------------------ + +*Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions. 36 + +This page describes each of the fields used in the Excel spreadsheet for bulk uploads. Please put details in the spreadsheet named Bulk Upload Spreadsheet. It is very important that you do not change the field names or their order on the spreadsheet. + + - ----------------------------------------------------------------------------------------------- NAME* The title by which you want the item called. i.e. Sartorius Microbalance. This field is 60 characters long but more details will fit in the description section. The name needs to be descriptive and distinct. There cannot be two items with the same name. Add a delineating feature such as model number or size to the name. - ----------------------------------------------------------------------------------------------- CATEGORY* This field requires a number not word. See the enclosed list. If you do not find a category that fits your product, please contact us. We can add categories. - ----------------------------------------------------------------------------------------------- MFG/BRAND Manufacturer or brand name - ----------------------------------------------------------------------------------------------- MODEL # Model number - ----------------------------------------------------------------------------------------------- ORIGINAL ITEM If known, this can be an incentive to buyers who then see your lower price. PRICE - ----------------------------------------------------------------------------------------------- HEIGHT Include feet or inches. - ----------------------------------------------------------------------------------------------- WEIGHT Include pounds or ounces. - ----------------------------------------------------------------------------------------------- CAPACITY Specific information about the equipment i.e. "x" gallons/hr, "y" sheets/minute, etc. - ----------------------------------------------------------------------------------------------- QUANTITY* This field requires only a number not each, case, etc. - ----------------------------------------------------------------------------------------------- STARTING BID* This is the amount at which the bidding will start. It should be lower than your reserve price, if you set one. Please use whole dollars. - ----------------------------------------------------------------------------------------------- RESERVE PRICE This is the amount you wish to receive for your product. If you set a reserve price, your item cannot be sold for less than the reserve. Please use whole dollars. - ----------------------------------------------------------------------------------------------- BID INCREMENTS* $5 is the default, but feel free to change this to reflect your product's price using whole dollars. - ----------------------------------------------------------------------------------------------- START DATE/TIME* This field must be filled out like the following example: 04/08/99 15:00 (MM/DD/YY 24:mm) A start time must be included. - ----------------------------------------------------------------------------------------------- DURATION* The default for this field is 7 days. The options are 1, 3, 5, 7, 21 and 30. - ----------------------------------------------------------------------------------------------- ITEM # Catalog number if the product came from a manufacturer's or distributor's catalog - ----------------------------------------------------------------------------------------------- APPROX. AGE New, used, demo, reconditioned - ----------------------------------------------------------------------------------------------- SKU Each, box, case + +Source: NEOFORMA INC, S-1/A, 12/2/1999 + + + + + +- ----------------------------------------------------------------------------------------------- LOCATION Where the equipment is currently located/resides. - ----------------------------------------------------------------------------------------------- SALESPERSON For PaperExchange.com internal tracking. - ----------------------------------------------------------------------------------------------- DESCRIPTION This field is only 1250 characters long. Use basic writing format here. Complete sentences are desired rather than a list of features. If you copy and paste from an outside source, please check to see that there are no tabs or returns in the paragraph. - ----------------------------------------------------------------------------------------------- SELLER ID#* This is your six-digit ID number you received when you registered. - ----------------------------------------------------------------------------------------------- IMAGE LOCATION A picture of your item is very helpful in selling your item and will greatly enhance its listing appearance. The picture needs to be in JPEG or GIF format. You can send these on a separate disk or email if desired. Please enclose a list delineating which picture goes with which item. - ----------------------------------------------------------------------------------------------- * indicates required fields + + ** indicates fields with fieldnames to be determined and whose position within the columns is to be determined + +37 + + EXHIBIT E + +FORM OF CO-BRANDED CAREER CENTER + + [GRAPHIC OF WEB PAGE -- the global healthcare marketplace] + +38 + + EXHIBIT F + +FORM OF CO-BRANDED TRAINING AND EDUCATION CENTER + + [GRAPHIC OF WEB PAGE -- the global healthcare marketplace] + +Source: NEOFORMA INC, S-1/A, 12/2/1999 \ No newline at end of file diff --git a/full_contract_txt/NeuroboPharmaceuticalsInc_20190903_S-4_EX-10.36_11802165_EX-10.36_Manufacturing Agreement_ Supply Agreement.txt b/full_contract_txt/NeuroboPharmaceuticalsInc_20190903_S-4_EX-10.36_11802165_EX-10.36_Manufacturing Agreement_ Supply Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..3d33ecec857967fdf8ae2d4729fcd494b99b2960 --- /dev/null +++ b/full_contract_txt/NeuroboPharmaceuticalsInc_20190903_S-4_EX-10.36_11802165_EX-10.36_Manufacturing Agreement_ Supply Agreement.txt @@ -0,0 +1,89 @@ +Exhibit 10.36 [Pursuant to Item 601(b)(10) of Regulation S-K, certain confidential portions of this exhibit have been omitted by means of marking such portions with asterisks as the identified confidential portions (i) are not material and (ii) would be competitively harmful if publicly disclosed.] MANUFACTURING AND SUPPLY AGREEMENT (DA-9801 Licensed Products) Between DONG-A ST CO., LTD. And NEUROBO PHARMACEUTICALS, INC. Dated: September 28, 2018 + +Source: NEUROBO PHARMACEUTICALS, INC., S-4, 9/3/2019 + + + + + +MANUFACTURING AND SUPPLY AGREEMENT (DA-9801 Licensed Products) This MANUFACTURING AND SUPPLY AGREEMENT (this "Agreement") is made and entered into as of September 28, 2018 ("Effective Date") by and between: Dong-A ST Co., Ltd., a corporation duly incorporated under the laws of the Republic of Korea, having its principal place of business at 64 Cheonho-daero, Dongdaemun-gu, Seoul 02587, Republic of Korea ("Dong-A") and NeuroBo Pharmaceuticals, Inc., a corporation duly incorporated under the laws of the State of Delaware, having its principal place of business at 177 Huntington Avenue, Suite 1700, Boston, MA 02115, U.S.A. ("NeuroBo"). RECITALS WHEREAS, Dong-A and NeuroBo entered into the License Agreement (DA-9801) dated January 18, 2018, as amended by the Amendment to License Agreement (DA-9801) dated April 18, 2018 (the "License Agreement") whereby Dong-A granted to NeuroBo an exclusive license under the Licensed Technology in the Field and in the Territory, to make, use, offer to sell, sell and import the Licensed Products (as defined by the License Agreement); WHEREAS, NeuroBo wishes that Dong-A manufacture and supply to NeuroBo the entire requirement of the Licensed Products and their matching placebo for the purpose of research and development of the Licensed Products, including the use in phase III clinical trials to be conducted by NeuroBo for the purpose of obtaining the NDA in the Territory, pursuant to the License Agreement; WHEREAS, NeuroBo wishes that Dong-A supply to NeuroBo the Licensed Products and their matching placebo already manufactured by Dong-A as of the Effective Date in compliance with the Korea Good Manufacturing Practices promulgated by the Governmental Authority in the Republic of Korea (the "KGMP") and the Licensed Products and/or their matching placebo to be manufactured by Dong-A after the Effective Date in compliance with the KGMP; and WHEREAS, Dong-A agrees (i) to supply to NeuroBo the Licensed Products and their matching placebo already manufactured by Dong-A as of the Effective Date in compliance with the KGMP, and (ii) to manufacture and supply to NeuroBo the Licensed Products and their matching placebo in compliance with the KGMP, and NeuroBo agrees to purchase from Dong-A, the Licensed Products and/or their matching placebo for research and development, on the terms and conditions hereinafter set forth. NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Dong-A and NeuroBo mutually agree as follows: 1. DEFINITIONS Unless otherwise defined in this Agreement, the capitalized terms utilized herein shall have 1 + +Source: NEUROBO PHARMACEUTICALS, INC., S-4, 9/3/2019 + + + + + +the same meanings as defined in the License Agreement. 2. MANUFACTURE AND SUPPLY 2.1 Subject to the provisions hereof, Dong-A shall (i) supply to NeuroBo the Licensed Products and their matching placebo already manufactured by Dong-A as of the Effective Date in compliance with the KGMP, and (ii) manufacture in compliance with the KGMP and in conformity with the specifications separately agreed upon between the Parties and attached hereto as Exhibit A (the "Product Specifications") and supply to NeuroBo the Licensed Products and/or their matching placebo, and NeuroBo shall purchase from Dong-A the entire requirement of the Licensed Products and/or their matching placebo for research and development of the Licensed Products under the License Agreement. 2.2 NeuroBo shall manufacture, or have manufactured, and supply to Dong-A the active pharmaceutical ingredients (API), which are necessary to manufacture the Licensed Products, in the quantity and in conformity with the specifications separately agreed upon between the Parties and attached hereto as Exhibit C (the "API Specifications") as may be amended by the Parties's agreement in writing from time to time. 2.3 NeuroBo shall, at its costs and expenses, deliver the API to the place designated by Dong-A no later than [***] days prior to the requested delivery date for the Licensed Products and/or their matching placebo in accordance with the Firm Order. 2.4 Within [***] days after receipt of the API from NeuroBo, Dong-A shall perform quality control test (the "API Test") in accordance with the methods of the API Test on such API for acceptance (the "API Test Methods"), which shall be separately agreed in writing by and between the Parties and attached hereto as Exhibit D") as may be amended by the Parties's agreement in writing from time to time. NeuroBo shall provide Dong-A with all available information and technical assistance necessary for Dong-A to perform the API Test expeditiously. If the API Test indicates that the API is deficient in quantity or does not meet the API Specifications, Dong-A shall notify NeuroBo thereof in writing within the [***]-day period together with results of the API Test. If the quantity is deficient, NeuroBo shall, as soon as commercially reasonable, ship, or have shipped, the sufficient amount of additional API to cover the deficiency. If the API does not meet the API Specifications, NeuroBo shall retrieve the API at its own expense and replace the API at no additional cost to Dong-A. 2.5 Upon [***] days' notice and at time mutually agreed upon by the Parties during Dong-A's normal business hours, but no more frequently than [***] every year during the term of this Agreement, NeuroBo may, at its cost and expense, inspect Dong-A's manufacturing facilities where the Licensed Products are manufactured. Within [***] days after the completion of the inspection, NeuroBo shall provide a written report detailing the results of such audit to Dong-A. In case of any inspection by any Governmental Authority of Dong-A's manufacturing facilities where the Licensed Products are manufactured, NeuroBo shall promptly provide Dong-A with a notice of the inspection and all notices, correspondence and related documents received from or sent to the applicable Governmental Authority. Dong-A shall permit such Governmental Authority to inspect the facilities to the fullest extent permitted by Laws and shall make its [***] and cooperate with the Governmental Authority in conducting the inspection. NeuroBo shall provide 2 + +such assistance as reasonably requested by Dong-A for the preparation of and during such inspection and furnish Dong-A with copies of all reports and notices received as a result of any such inspection. NeuroBo agrees that Dong-A shall not be obligated to correct any deficiencies documented by the Governmental Authority as a result of any such inspection. NeuroBo further agrees that it shall not hold Dong-A responsible nor shall bring any claims or actions against Dong-A for any such deficiencies and/or costs or damages NeuroBo may incur resulting therefrom. Upon request of Dong-A, the Parties may discuss in good faith a plan for NeuroBo to assist in correcting such deficiencies and the terms and conditions for implementing the corrective actions under such plan. 2.6 The Parties acknowledge and agree that prior to commercialization of the Licensed Products by NeuroBo, its Affiliates and/or sublicensees, the Parties shall, in good faith, negotiate the terms and conditions for, including, without limitation, the supply price, and enter into a definitive non-exclusive supply agreement pursuant to which Dong-A shall supply to NeuroBo the Licensed Products for the commercialization by NeuroBo, its Affiliates and/or sublicensees of the Licensed Products in the Field in the Territory pursuant to the License Agreement. 2.7 In case NeuroBo requests Dong-A to conduct any additional activities, including testing (e.g. AMV, PV), documentation (e.g. CMC packaging), which NeuroBo requires for obtaining the NDA for the Licensed Product in the Territory, the Parties shall, in good faith, negotiate the terms and conditions, including, without limitation, the costs and expenses for conducting such additional testing activities of the Licensed Products and/or their matching placebo. For any such activities, NeuroBo shall pay to Dong-A [***] ([***]%) of the fees as agreed by the Parties within [***] days prior to conducting such activities by Dong-A, and shall pay the balance due within [***] days after delivery by Dong-A to NeuroBo of the deliverables as agreed by the Parties. 3. ORDERING AND DELIVERY 3.1 NeuroBo shall submit to Dong-A an order for the Licensed Products and/or their matching placebo no later than [***] days prior to the requested delivery date thereof. For each order, NeuroBo shall be obligated to order the Licensed Products and/or their matching placebo in [***] tablets. NeuroBo acknowledges and agrees that certain quantity of the Licensed Products and/or their matching placebo from each batch ordered shall be retained by Dong-A for use in the stability tests and as retention samples, and NeuroBo shall order the Licensed Products and/or their matching placebo in consideration of such quantity to be retained by Dong-A. Each order shall specify at least (i) the quantity of the Licensed Products and/or their matching placebo, (ii) the specifications of the Licensed Products and/or their matching placebo, including the specifics of packaging, (iii) the expected delivery date for the API, (iv) the requested delivery date for the Licensed Products and/or their matching placebo, (v) the shipment terms for the Licensed Products and/or their matching placebo and (vi) the supply price for the Licensed Products and/or their matching placebo. Upon receipt of the order from NeuroBo, Dong-A shall promptly acknowledge the receipt of such order. No order shall be binding upon the Parties until agreed in writing by Dong-A and NeuroBo; provided, however, that such agreement shall not be unreasonably withheld or delayed. Upon such agreement, the order shall be deemed to be the "Firm Order" which shall be binding and may only be revised by agreement of the Parties in writing. Dong-A shall deliver the Licensed Products and/or their matching placebo to NeuroBo in accordance with the Firm 3 + +Source: NEUROBO PHARMACEUTICALS, INC., S-4, 9/3/2019 + + + + + +Order on the shipment terms of [***] manufacturing facility of Dong-A (ICC Incoterms 2010), including the delivery date and place set forth therein, within the later of (i) [***] days after the date of the Firm Order and (ii) [***] days after the date of acceptance by Dong-A of the API. 3.2 Dong-A shall supply NeuroBo with the Licensed Products and/or their matching placebo together with a certificate of analysis, as described in the Product Specifications, for each batch of the Licensed Products and/or their matching placebo shipped hereunder certifying that such batch of the Licensed Products and/or their matching placebo meets the Product Specifications. 3.3 Within [***] days after receipt of the Licensed Products and/or their matching placebo hereunder, NeuroBo may, in its discretion, perform a quality control test (the "Product Test") in accordance with the methods of the test on such Licensed Products and/or their matching placebo for acceptance (the "Product Test Methods"), which shall be separately agreed in writing by and between Dong-A and NeuroBo and attached hereto as Exhibit B, as may be amended by the Parties' agreement in writing from time to time. Dong-A shall provide NeuroBo with all available information and technical assistance necessary for NeuroBo to perform the Product Test expeditiously. If the Product Test indicates that the Licensed Products and/or their matching placebo is deficient in quantity or does not meet the Product Specifications, NeuroBo shall notify Dong-A thereof in writing within the [***]-day period together with results of the Product Test. If the quantity is deficient, Dong-A shall immediately ship the sufficient amount of additional Licensed Products and/or their matching placebo to cover the deficiency. If Dong-A does not agree that the Licensed Products and/or their matching placebo does not meet the Product Specifications, the Parties shall refer their disagreement for decision by an independent testing laboratory agreed by the Parties. The decision by the independent testing laboratory shall be conclusive and binding on both Parties, and the losing Party shall bear the costs of the independent testing laboratory. If Dong-A agrees that the Licensed Products and/or their matching placebo does not meet the Product Specifications, or if the decision by the testing laboratory confirms that the Licensed Products and/or their matching placebo does not meet the Product Specifications, (i) Dong-A shall arrange for the return from NeuroBo of the Licensed Products and/or their matching placebo at Dong-A's expense, and (ii) without waiting for the return, Dong-A shall promptly replace the Licensed Products and/or their matching placebo at no additional cost to NeuroBo. 4. TERMS AND CONDITIONS OF SALE 4.1 The terms and conditions of sale and purchase of the Licensed Products and/or their matching placebo between Dong-A and NeuroBo shall be set forth in each Firm Order. 4.2 The supply prices for the Licensed Products and their matching placebo shall be specified in Schedule 4.2. 4.3 Upon agreement by the Parties of the Firm Order, Dong-A shall issue to NeuroBo an invoice in Korean Won for each shipment of the Licensed Products and/or their matching placebo based on the Firm Order. Unless otherwise agreed in writing by Dong-A, NeuroBo shall pay the invoiced supply price (i) in Korean Won (KRW) or (ii) in United States Dollars (USD) which amount shall correspond the invoiced amount converted from KRW to USD at the exchange rate of the payment date, no later than [***] days prior to the shipment date by way of wire transfer 4 + +Source: NEUROBO PHARMACEUTICALS, INC., S-4, 9/3/2019 + + + + + +to Dong-A. NeuroBo shall be responsible for and pay all wire transfer fees incurred in the Territory. If Dong-A does not receive payment of any sum due to it on or before the due date, [***] interest shall thereafter accrue on the sum due to until the date of payment at the [***] rate of [***] percent ([***]%) over the then-current prime rate quoted by Citibank in New York, New York or the maximum rate allowable by New York law, whichever is lower. 4.4 Dong-A shall not be responsible for any taxes levied on account of the payments under this Agreement. In the event that any taxes are required to be paid on account of any payment hereunder, NeuroBo shall pay all such taxes. 4.5 In performing its obligations under this Agreement, NeuroBo shall, and shall cause its Affiliates and sublicensees to, comply with all applicable laws, including any applicable anti-corruption or anti-bribery laws or regulation, of any governmental authority with jurisdiction over the activities performed by NeuroBo or its Affiliates or sublicensees in furtherance of such obligations. 5. TERM AND TERMINATION 5.1 This Agreement shall commence on the Effective Date and, unless earlier terminated, shall continue in full force and effect for a period of [***] years thereafter. 5.2 This Agreement shall automatically terminate in case the License Agreement is terminated for any reason specified therein. 5.3 A Party may terminate this Agreement by notice to the other Party if the other Party is in material breach of any provision of this Agreement, and (a) the breaching Party has not cured the breach within [***] days after receiving notice from the terminating Party; or (b) if the breach cannot reasonably be cured within the [***]-day period, the breaching Party has not started to remedy the breach within the [***]-day period and diligently endeavored to cure the breach within a reasonable time thereafter. 5.4 Either Party may terminate this Agreement immediately upon notice to the other Party in the event that (a) the other Party is the subject of a petition for bankruptcy, reorganization, or arrangement, whether voluntary or involuntary, and the same is not dismissed within thirty (30) days thereof, (b) a receiver or trustee is appointed for all or a substantial portion of the assets of the other Party, or (c) the other Party makes an assignment for the benefit of its creditors. 5.6 The termination or expiration of this Agreement, in whole or in part, shall be without prejudice to the right of either Dong-A and NeuroBo to receive all payments accrued and unpaid at the effective date of such termination or expiration, without prejudice to the remedy of either Dong-A and NeuroBo in respect to any previous breach of any of the representations, warranties, covenants or obligations herein contained and without prejudice to any other provisions hereof which expressly or necessarily call for performance after such termination or expiration. 5 + +Source: NEUROBO PHARMACEUTICALS, INC., S-4, 9/3/2019 + + + + + +6. GOVERNING LAW The laws of the State of New York (without giving effect to its conflicts of law principles) govern all matters arising out of or relating to this Agreement and all of the transactions it contemplates, including without limitation, its validity, interpretation, construction, performance, and enforcement. 7. NOTICES All notices, consents, and approvals under this Agreement must be delivered in writing by courier, electronic facsimile (fax), or certified or registered mail, (postage prepaid and return receipt requested) to the other Party; and shall be effective upon receipt or three (3) business days after being deposited in the mail, whichever occurs sooner. Notices to the Parties shall be sent to the addresses set forth at the beginning of this Agreement. Notice of change of address shall be given in the same manner as other communications. 8. INCORPORATION BY REFERENCE Articles or Sections 8.2 (Limitation of Liability), 9 (Indemnification), 12.2 (Force Majeure), 12.3 (Assignment), 12.4 (Severability), 12.6 (Remedies), 12.8 (Submission to Jurisdiction/Waiver of Jury Trial), 12.9 (Independent Contractor/No Agency), 12.10 (Entire Agreement) of the License Agreement shall be deemed to be incorporated herein by reference as it is set forth in this Agreement 6 + +Source: NEUROBO PHARMACEUTICALS, INC., S-4, 9/3/2019 + + + + + +IN WITNESS WHEREOF, the Parties hereto have duly executed this Agreement as of the Effective Date. DONG-A ST CO., LTD. By: /s/ Daesik Eom Daesik Eom, Chairman and CEO NEUROBO PHARMACEUTICALS, INC. By: /s/ John L. Brooks, III John L. Brooks III, President & CEO 7 + +Exhibit A Product Specifications + +Test Analytical Method Specification Requirements [***] [***] [***] + +[***] [***] [***][***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] Schedule 1-1 + +Source: NEUROBO PHARMACEUTICALS, INC., S-4, 9/3/2019 + + + + + +Exhibit B Product Test Methods [***] Schedule 1-2 + +Source: NEUROBO PHARMACEUTICALS, INC., S-4, 9/3/2019 + + + + + +Exhibit C API Specifications + +Test Analytical Method Specification Requirements [***] [***] [***] + +[***] [***] [***][***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] Schedule 1-3 + +Exhibit D API Test Methods [***] Schedule 1-4 + +Source: NEUROBO PHARMACEUTICALS, INC., S-4, 9/3/2019 + + + + + +Schedule 4.2 Supply Price [***] Schedule 1-5 + +Source: NEUROBO PHARMACEUTICALS, INC., S-4, 9/3/2019 \ No newline at end of file diff --git a/full_contract_txt/NlsPharmaceuticsLtd_20200228_F-1_EX-10.14_12029046_EX-10.14_Development Agreement.txt b/full_contract_txt/NlsPharmaceuticsLtd_20200228_F-1_EX-10.14_12029046_EX-10.14_Development Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..9f554b0336eb625b38be25cf68ed5b3bd4c6a3df --- /dev/null +++ b/full_contract_txt/NlsPharmaceuticsLtd_20200228_F-1_EX-10.14_12029046_EX-10.14_Development Agreement.txt @@ -0,0 +1,353 @@ +Exhibit 10.14 License and Development Agreement "Agreement" between NLS-1 Pharma AG Alter Postplatz 2 6370 Stans Switzerland "Licensor" / "NLS" and Eurofarma Laboratórios S.A. Avenida Vereador José Diniz 3465 04603-003 São Paulo Brazil "Licensee" / "Eurofarma" (Licensor and Licensee each a ʺPartyʺ collectively the ʺPartiesʺ) regarding Nolazol® (Mazindol CR) in ADHD - Latin America + +Source: NLS PHARMACEUTICS LTD., F-1, 2/28/2020 + + + + + +License and Development Agreement + +Table of Content WHEREAS 1 1. Definitions 1 2. Grant of License 4 2.1. Grant of rights 4 2.2. Restrictions 4 3. License Fees and Milestone Payments 5 3.1. Upfront Payment 5 3.2. Milestone payments 5 3.3. Royalties 6 3.4. Reports 6 3.5. Records and Audits 6 3.6. Payment Terms 7 4. Business Plan 7 5. Development Work 8 6. Further Development Work 8 7. Brand Name and Trademarks 9 8. Labelling and Packaging 9 9. Regulatory Obligations and Procedures 10 9.1. Regulatory Obligations and Procedures in General 10 9.2. Notifications 10 9.3. Regulatory Obligations of Licensee 10 9.4. Regulatory Obligations of Licensor 10 9.5. Pharmacovigilance 11 10. Cooperation and Joint Project Steering Committee 11 10.1. Cooperation 11 10.2. Transfer of Know-how 11 10.3. Joint Steering Committee 12 11. Commercialization 12 12. Supply 13 13. Property rights to Intellectual Property 13 14. Prosecution of Infringements of Intellectual Property 13 14.1. Notice 13 14.2. Action 13 14.3. Information 14 15. Representations and Warranties 14 15.1. Licensor Representations and Warranties 14 15.2. Licensee Representations and Warranties 14 15.3. Other Representations and Warranties 15 16. Liability and Limitations 15 17. Indemnities 16 17.1. Indemnities by the Licensor 16 17.2. Indemnities by the Licensee 16 17.3. Third party claims 16 18. Confidentiality 17 18.1. Confidentiality Obligations 17 18.2. Exceptions to Obligations 17 18.3. Survival of Confidentiality Obligations 18 + +i + +Source: NLS PHARMACEUTICS LTD., F-1, 2/28/2020 + + + + + +License and Development Agreement + +19. Term and Termination 18 19.1. Term 18 19.2. Termination for Change of Control 18 19.3. Termination for Bankruptcy, Liquidation and similar proceedings 18 19.4. Early Termination for Material Breach 18 19.5. Early Termination by the Licensor 19 19.6. Early Termination by the Licensee 19 19.7. Consequences of Expiration or Termination 20 20. General Provisions 20 20.1. Amendments 20 20.2. Notices 20 20.3. Severability / Good Faith 20 20.4. No Waiver 21 20.5. No Assignment 21 20.6. Appendices 21 20.7. Public Announcements 21 21. Governing Law and Jurisdiction 21 Table of Appendices 23 Appendix A - [Template for Licensee Reports] 24 Appendix B - Preliminary Business Plan 25 Appendix C*- Purpose of the JSC pre and post MA * No such appendix completed by the parties. + +ii + +Source: NLS PHARMACEUTICS LTD., F-1, 2/28/2020 + + + + + +License and Development Agreement + +WHEREAS A. NLS carries on the business of researching, developing and manufacturing certain pharmaceutical products and is the legal and beneficial owner of certain Intellectual Property, including Patents, Know-how and other materials (all words with capital letters are defined below); B. Eurofarma is a pharmaceutical company with expertise in researching, developing, manufacturing, marketing and sales of pharmaceutical products, including products in the Field, and has a distribution network throughout Latin America; C. Eurofarma wishes to receive an exclusive license from NLS to register, import, export, store, handle, commercialize, have commercialized, promote, have promoted, distribute, have distributed, sell and have sold the Licensed Product in the Territory, and NLS wishes to grant a respective license on the terms and conditions set out in this Agreement; D. The Parties acknowledge that further development of the Products will be necessary to develop the required Dossier as defined hereunder for obtaining Marketing Authorisation(s) in the Territory and wish to collaborate on the further development of the Products. NOW, THEREFORE, the Parties agree as follows: 1. Definitions When used in this Agreement in capital letters, the terms and abbreviations set forth below, whether used in the singular or plural, shall have the following meaning: Affiliates means any company, enterprise, corporation or business entity which controls, is controlled by, or is under common control with, either the Licensor or Licensee. For this purpose, "control" shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of an entity, whether through holding a majority of the voting rights of the entity, by contract or otherwise. Agreement shall mean this Agreement, including all of its Appendices. Appendix shall mean any appendix to this Agreement. Article shall mean an article of this Agreement. Change of Control shall mean any merger, consolidation or acquisition of a Party with, by or into another corporation, entity or person; or any change in the ownership of more than fifty percent (50%) of the voting capital stock or actual control over the voting rights in one or more related transactions. Confidential Information shall have the meaning set forth in Article 18. + +Developed Intellectual Property + +shall mean any and all changes, additional Know-how, improvements and inventions relating to the Intellectual Property (such as, without limitation, method of use patents) made after the Effective Date of this Agreement. + +1 + +Source: NLS PHARMACEUTICS LTD., F-1, 2/28/2020 + + + + + +License and Development Agreement + +Distributor shall mean a company appointed by Licensee and agreed by Licensor in a country of the Territory for the import, selling, promotion and distribution of the Licensed Product in such country of the Territory. Dossier shall mean the registration file for the Licensed Product (which will be developed based on the Know-how and the Intellectual Property Rights) including any data, studies, documents, reports, correspondence with regulatory authorities, approvals and information that is necessary for obtaining and maintaining one or several Marketing Authorizations in the Territory. Effective Date shall be the date of the last signature on the last page of this Agreement. + +Field shall mean the diagnosis, prevention, and treatment of DSM-V Attention Deficit and Hyperactivity Disorder (ADHD) in children, adolescents and adult populations. Indemnified Party shall have the meaning set forth in Article 17.3. + +Intellectual Property shall mean Intellectual Property Rights and Know-how. + +Intellectual Property Rights + +shall mean with respect to the Licensed Product (as defined hereunder) any and all patents, copyright (including software), rights under data exclusivity laws, property rights in biological or chemical materials, names, trademarks, extension of the terms of any such rights (including supplementary protection certificates), applications for and the right to apply for any of the foregoing registered property rights, and similar or analogous rights anywhere in the world. Joint Steering Committee / JSC + +shall have the meaning set forth in Article 10.3 of this Agreement. + +Know-how shall mean with respect to the Licensed Product (as defined hereunder), all materials, laboratory, pre-clinical and clinical data, knowhow, trade secrets and all other scientific, technical, including manufacturing or regulatory information, patentable or otherwise, developed, applied or acquired by NLS which relates to the identification, characterization, expression, synthesis, use, or production of the Licensed Product and which is reasonably useful or necessary to research, develop, use, make, have made, import, distribute, offer for sale, and/or sell the Product. Launch shall mean the first commercial sale of a Licensed Product in a country of the Territory by the Licensee or an Affiliate of the Licensee or by a Distributor engaged by Licensee. Lead Countries Brazil, Mexico and Argentina. + +License shall have the meaning set forth in Article 2.1 of this Agreement. + +2 + +Source: NLS PHARMACEUTICS LTD., F-1, 2/28/2020 + + + + + +License and Development Agreement + +Licensed Product Any and all products that are manufactured, sold, or otherwise supplied by the Licensee (including any Affiliate or Distributor of the Licensee) and which incorporate, or their development makes use of, any Intellectual Property or Developed Intellectual Property. Licensee Know-how shall mean with respect to the Licensed Product (as defined hereunder) all know-how, trade secrets and scientific, technical, including manufacturing or regulatory information, developed, applied or acquired by Eurofarma which relates to the identification, characterization, expression, synthesis, use, or production of the Licensed Product and which is reasonably useful or necessary to research, develop, use, make, have made, import, distribute, offer for sale, and/or sell the Licensed Product. Losses shall have the meaning set forth in Article 17.1 of this Agreement. Marketing Authorisation / MA + +in relation to the Licensed Product, shall mean those approvals necessary from one or more competent authorities in the Territory for manufacturing, importing, marketing, distributing, offering for sale and/or selling the Licensed Product in one or several countries of the Territory. Net Sales means the total of the gross invoice prices of Licensed Products sold or leased by the Licensee, an Affiliate, a Distributor, or any combination thereof, less the sum of the following actual and customary deductions where applicable and separately listed: cash, trade, or quantity discounts; sales, use, tariff, import/export duties or other excise taxes imposed on particular sales (in particular value-added tax); transportation charges; or credits to customers because of rejections or returns. For purposes of calculating Net Sales, transfers to an Affiliate or to a Distributor of Licensed Product under this Agreement for (i) end use (but not resale) by the Affiliate shall be treated as sales by Licensee at the list price of the Licensee in an arm- length transaction, or (ii) resale by an Affiliate shall be treated as sales at the list price of the Affiliate. Patents shall mean Brazilian Patent Application No. BR 11 2018 068143 filed on September 6, 2018, and Mexican Patent Application No. MX/a/2018/010864 filed on September 7, 2018, covering multi-layered formulation of Mazindol, including all provisional applications, continuations, divisions, extensions, re-examinations, certificates, reissues and Supplementary Protection Certificates. Phase III Clinical Trial shall mean a controlled clinical study of mazindol CR that aims to establish the therapeutic benefit and safety of mazindol CR in the Field in a larger patient sample in a manner sufficient to be included in the Dossier and obtain one or several Marketing Authorisations to market such Licensed Product in the Territory. + +3 + +Source: NLS PHARMACEUTICS LTD., F-1, 2/28/2020 + + + + + +License and Development Agreement + +Report(s) shall have the meaning set forth in Article 3.4. Royalty / Royalties shall have the meaning set forth in Article 3.3. Territory The countries of Latin America Trademarks shall have the meaning set forth in Article 7. 2. Grant of License 2.1. Grant of rights Subject to the conditions and limitations set forth in this Agreement, the Licensor hereby grants to the Licensee, and the Licensee hereby accepts, (i) an exclusive, fee-bearing, non-transferable distribution right of the Licensed Product in the Territory during the Term (the "Distribution"), (ii) an exclusive, royalty-free, non-transferable license to the Licensor's Patents and Trademarks to register, import, export, store, handle, commercialize, have commercialized, promote, have promoted, distribute, have distributed, sell and have sold the Licensed Product during the Term, without the right to sublicense (the "License"), and (iii) an exclusive, royalty-bearing, non-transferable license to the Intellectual Property (except Patents and Trademarks ) and the Developed Intellectual Property and a right to obtain the technology transfer of the Know-How to manufacture the Licensed Product in the Territory during the Term, pursuant to the conditions set forth in Article 2.3 below and elsewhere in this Agreement (the "Technology Transfer"), all to register, import, export, store, handle, commercialize, have commercialized, promote, have promoted, distribute, have distributed, manufacture, have manufactured, sell and have sold the Licensed Product during the Term, without the right to sublicense. 2.2. Restrictions Licensee may extend the rights granted herein to register, import, export, store, handle, commercialize, promote, distribute and sell to its Affiliates and to its Distributors, provided that Licensee shall first provide to Licensor a written assurance from each of such Affiliate or Distributor to agree to be bound by, and to strictly comply with, all applicable terms, conditions, and obligations in this Agreement towards Licensor. Licensee shall not be entitled to assign the License or any of its rights under this Agreement or to grant any sub-licenses. 2.3. Technology Transfer After Licensor and Licensee have agreed to move forward to the Technology Transfer phase, the Parties will execute a separate Technology Transfer Agreement, which shall be at arms-length basis and pursuant to the conditions herein. For that purpose, Licensor hereby undertakes to transfer to Licensee all Know-how in order to enable Licensee to implement it in its plant to register, import, export, store, handle, commercialize, have commercialized, promote, have promoted, distribute, have distributed, manufacture, have manufactured, sell and have sold the Licensed Product during the Term. Licensee undertake to use the transferred Know-how solely for the purposes and limits provided in this Agreement. For the avoidance of any doubt, the Know-how does not include Licensee Know-how Licensor shall render to Licensee all technical assistance necessary to enable Licensee to fully implement the Technology Transfer phase in Licensee's premises. The royalties provided in this Agreement already includes such technical assistance, unless the Parties otherwise mutually and in good-faith agree. In such case, the Parties will provide in separate agreement the additional conditions for the Technology Transfer, which shall be at arms-length basis. + +4 + +Source: NLS PHARMACEUTICS LTD., F-1, 2/28/2020 + + + + + +License and Development Agreement + +3. License Fees and Milestone Payments 3.1. Upfront Payment Upon signature of this Agreement and no later than 20 days following it, Eurofarma shall pay to NLS, for the rights pursuant to Article 2.1(i), the non-refundable and non-deductible sum of USD 2'500'000 (in words: US dollars two and a half million). 3.2. Milestone payments Upon achievement of each of the milestone events set out below, Eurofarma shall pay to NLS the non-refundable and non- deductible amounts set out below next to such milestone event: 3.2.1. Clinical Milestones Upon successful completion by NLS in the US of the Phase III Clinical Trial for the treatment of ADHD in adults (successful completion meaning reaching the primary endpoints of the respective study) USD 500'000 Upon successful completion by NLS in the US of the last Phase III Clinical Trial for the treatment of ADHD in children (successful completion meaning reaching the primary endpoints of the respective study) USD 500'000 3.2.2. Regulatory Milestones Upon price approval of the Licensed Product in Brazil by the relevant agency USD 1'000'000 Upon receipt of a MA by the relevant agency of the Licensed Product in any other country in the Territory USD 1'000'000 3.2.3. Sales Milestones (single payments) Upon reaching annual Net Sales of USD 10 million USD 1'000'000 Upon reaching annual Net Sales of USD 50 million USD 2'000'000 Upon reaching annual Net Sales of USD 75 million USD 4'000'000 Upon reaching annual Net Sales of USD 100 million USD 6'000'000 + +5 + +Source: NLS PHARMACEUTICS LTD., F-1, 2/28/2020 + + + + + +License and Development Agreement + +3.3. Royalties For the Technology Transfer and as applicable for the License granted by NLS to Eurofarma under article 2.1(iii) hereabove, Eurofarma shall pay to NLS royalty payments (the "Royalties") on the annual Net Sales in the Territory according to the following table: + +Annual Net Sales in the Territory in USD: + +Royalty in Percent of Net Sales under 10 million 7% 10 million to < 20 million 8% 20 million to < 30 million 9% 30 million and above 10% Royalty payments shall be paid quarterly within thirty (45) days following the close of the calendar quarter. 3.4. Reports After the first commercial sale of a Licensed Product anywhere in the Territory, Eurofarma shall submit to Licensor quarterly reports on or before 15 days after the last business day of the month following each quarter of the year, and this for each year. Each report (the "Reports") shall cover Eurofarma's (and each Affiliate's, unless the Parties agree that such Affiliates shall submit its reports directly to Licensor) and Distributors' last recently completed quarter and shall show: (i) the gross sales and Net Sales during the last recently completed quarterly period and the Royalties, in USD, payable with respect thereto; (ii) the number of the Licensed Products sold in each country of the Territory; (iii) the method used to calculate the Royalties; and (iv) the exchange rates used to convert the country currency to USD, as applicable. The Licensee shall provide the above information using the form as shown in Appendix A and include information on the date of the first commercial sale of the Licensed Product in each country. If no sales of Licensed Product have been made by the Licensee during a reporting period, Licensee shall report such information in the corresponding Report(s). 3.5. Records and Audits The Licensee shall keep, and shall require its Affiliates and Distributors to keep, accurate and correct records of the Licensed Product used and sold under this Agreement. Such records shall be retained by the Licensee for ten (10) years following a given reporting period. + +6 + +Source: NLS PHARMACEUTICS LTD., F-1, 2/28/2020 + + + + + +License and Development Agreement + +Subject to a written advance notice of thirty (30) calendar days, all relevant records supporting the preparation of the Reports shall be made available during normal business hours for inspection at the expense of Licensor by Licensor or by a selected representative of Licensor for the sole purpose of verifying the Reports and the accuracy of the payments made or due to Licensor under this Agreement. Such inspector shall not request any other documents or information other than these related to this purpose as determined in its sole discretion and the Licensee shall have no obligation to provide the inspector or Licensor any documents or information not related thereto. In the event that any such inspection shows an underreporting and underpayment by the Licensee to Licensor under the terms of this Agreement in excess of one percent (1%) for any twelve-month (12-month) period, then Licensee shall pay the cost of the audit as well as any additional sum that would have been payable to Licensor had the Licensee reported correctly, plus an interest charge at a rate of ten percent (10%) per year. Such interest shall be calculated from the date the correct payment was due to Licensor up to the date when such payment is actually made by the Licensee. For underpayment not in excess of one percent (1%) for any twelve-month (12-month) period, the Licensee shall pay the difference within thirty (30) days without having to pay for the inspection cost but with interest charge calculated as per the provisions of this Article. 3.6. Payment Terms All payments due to the Licensor according to this Agreement shall be in US dollar, unless the Parties mutually agree otherwise. All payments are exclusive of VAT and other applicable taxes. Royalties earned on Net Sales shall not be reduced by the Licensee for any taxes, fees, or other charges imposed by the government of any country on the payment of royalty income, except that all payments made by Licensee in fulfilment of the Licensors' tax liability in any particular country may be credited against earned Royalties or fees due to the Licensor for that country. The Licensee shall pay all bank charges resulting from the transfer of such Royalty payments. Except for article 3.1 hereabove, payments shall be made by wire transfer to the bank nominated by Licensor, in maximum 45 days after the issuance by NLS of the corresponding invoices, In the event any payment due under this Agreement is not made at the agreed term and/or for the corresponding full amount, a late payment charge of ten percent (10 %) p.a. is due, calculated on a pro-rata basis of the number of days between the date at which the outstanding amount was due for payment to Licensor and the date is actually paid. For the payments under Article 2.1(iii) above, referred to in Article 3.3, Licensor understands that any such payments may only be remitted by Licensee after this (or a corresponding) Agreement has been recorded by the Brazilian Patent and Trademark Office ("INPI") and registered by the Brazilian Central Bank ("Bacen"), as required by Brazilian law. 4. Business Plan Prior to the signing of this Agreement, Eurofarma has prepared and presented to NLS a high-level business plan, focusing on the Lead Countries (the "Preliminary Business Plan" as per Appendix B). Following the signing of this Agreement and prior to the Launch in each of the Lead Countries, and in any other countries of the Territories as applicable, Eurofarma shall present to NLS its business plan in such countries (the "Business Plan") consistent with commercially reasonable efforts to launch and market the Licensed Product in such countries of the Territory and consistent with the Preliminary Business Plan. + +7 + +Source: NLS PHARMACEUTICS LTD., F-1, 2/28/2020 + + + + + +License and Development Agreement + +Eurofarma shall use reasonable commercial efforts to comply with the sales set out in the Preliminary Business Plan, and the Business Plan may be updated annually by Eurofarma based on updates on the clinical development timelines, market and economic changes and results from clinical trials, which shall be mutually accepted and agreed between the Parties. Except for critical changes in the assumptions considered in the Preliminary Business Plan, the sales shall not vary substantially. 5. Development Work The Parties acknowledge and agree that development work will need to be carried out in the US in order to seek a Marketing Authorization of mazindol CR for use in the Field in the United States (the "Development Work"). The Development Work will in particular consist of, but not be limited to: a. the design, conduct and execution of pre-clinical studies and Phase I Clinical Trial for the End of Phase II Meeting by NLS as the sponsor (the "US Sponsor") in the US in accordance with the guidance and requests from the US FDA; b. the design, conduct and execution of Phase III Clinical Trials by the US Sponsor in the US in accordance with the guidance and requests from the US FDA; c. the development of the registration dossier which shall be submitted by NLS to the FDA to seek a marketing authorization of Nolazol® (mazindol CR) for the treatment of ADHD in the US (the "FDA Dossier"). The Parties further acknowledge and agree that: i. such Development Work shall be carried out by NLS under its sole responsibility and its sole discretion as the US Sponsor; ii. NLS shall bear the costs of the Development Work it carries out in the US for the purpose of filing an NDA and seeking a marketing authorization in the US; iii. NLS shall share with Eurofarma the final reports of the planned studies in the Development Work as soon as available which shall be only used by Eurofarma for the Dossier and for no other purposes. Such reports constitute Developed Intellectual Property and are the sole property and Confidential Information of Licensor. 6. Further Development Work The Parties acknowledge and agree that further development work on the Licensed Product may have to be carried out in order to seek and obtain MA of the Licensed Product in certain of the countries of the Territory (the "Further Development Work"). The Parties acknowledge and agree that: i) NLS shall have sole responsibility and control of such Further Development Work, irrespective of whether it is carried by NLS as sponsor, or delegated by NLS to Eurofarma in any countries of the Territory or to any other 3rd party at NLS sole discretion ii) Eurofarma shall provide at its own costs timely input to NLS on the specific data and information not planned by NLS to be included in the FDA Dossier which are to be requested by the regulatory authorities of any of the Lead Countries to seek a MA in the Lead Countries (the "US Supplemental Data"); + +8 + +Source: NLS PHARMACEUTICS LTD., F-1, 2/28/2020 + + + + + +License and Development Agreement + +iii) NLS shall use commercially reasonable efforts to generate the US Supplemental Data at a shared cost between the Parties which shall be made available to Eurofarma for inclusion in the registration dossiers filed by Eurofarma to seek a MA; iv) If the regulatory authorities of any countries of the Territory request specific data to be generated locally in subjects of such countries in order to seek a MA, Eurofarma shall solely bear the respective costs of the studies needed to generate such data (the "Local Supplemental Data"); v) Eurofarma shall be responsible for the preparation and submission of the registration dossiers in the Lead Countries and in the other countries of the Territory seeking to obtain a MA in such countries; vi) Eurofarma shall be the responsible Party for the discussions with the regulatory health authorities or with the other relevant authorities of such countries of the Territory involved in the MA process; vii) any intellectual property, know-how, trade secrets, data, processes whether patentable or not which may arise from the Further Development Work and the Supplemental Data shall be solely owned by NLS and shall fall under NLS Intellectual Property Rights and any other rights as the case maybe, except any information that is or becomes public (non-confidential) other than as a direct or indirect result of a disclosure by Licensee or any of its representatives. Licensee Knowhow shall belong to Licensee; viii) as set forth in Article 10.3 below a Joint Steering Committee shall be set-up. The JSC shall solely have an advisory role to the Parties. NLS shall retain final responsibility for the design, conduct and execution of the Development Work and Further Development Work. 7. Brand Name and Trademarks The brand name for the Licensed Product in the Territory shall be Nolazol® (Brazilian trademark application No. 916475913 and in Mexico and elsewhere in the Territory to be provided by Licensor, collectively referred to as "Trademark") and may be modified by another name chosen and solely owned by the Licensor, subject to such modified name being communicated to Licensee no later than 6 months before the market launch of the License Product in Brazil. The Licensor shall be free to select and register any names and trademarks for the Licensed Product at its sole discretion. Such trademarks and names shall be prepared and owned by the Licensor at its expense. The Licensor shall bear all costs associated with the use of such trademarks and names. During the entire validity of this Agreement, Licensor hereby grants to License an exclusive and royaltyfree right to use the Trademark in the Territory. During any sell-off period the license shall be non-exclusive. 8. Labelling and Packaging Licensee shall at its own expense create the labelling, localized product information and packaging for the Licensed Product. Licensor and Licensee shall cooperate in order to obtain the necessary regulatory and governmental approvals for such labelling and packaging. + +9 + +Source: NLS PHARMACEUTICS LTD., F-1, 2/28/2020 + + + + + +License and Development Agreement + +9. Regulatory Obligations and Procedures 9.1. Regulatory Obligations and Procedures in General The Parties acknowledge that Marketing Authorisation(s) for the Licensed Product will have to be obtained for the purpose of this Agreement. The Parties will mutually agree on the regulatory pathway(s) to be used through the Joint Steering Committee. 9.2. Notifications Each of the Parties shall promptly notify the other party in writing of any technical or clinical advances, useful modifications, side effects or new government regulations relating to the Licensed Product that shall come to its knowledge. 9.3. Regulatory Obligations of Licensee (i) Eurofarma shall own the MAs pertaining to the commercialization of the Licensed Product in the Field in the Territory during the term of this Agreement or until its termination prior to its term as set forth in Articles 19.2 to 19.6. Upon expiration or termination, Eurofarma shall i) immediately transfer the MAs to the Licensor or to any other party designated by the Licensor and return all relevant documents prepared or submitted that are related to the MAs, including those documents, data or information generated post MA filings, in maximum 30 days after the notification of termination; if the Licensor does not decide and inform within this period to whom the MAs and documents shall be transferred, then the Licensee shall have no obligation to keep them actives ii) shall forfeit its ownership of the MAs in any and all of the countries of the Territory and with other regulatory agencies, without any form of compensation except for the compensation under the conditions set forth in Article 19.2 below and, iii) shall have no further claims of ownership and nor any other claims related to the MAs. (ii) Eurofarma shall solely bear the costs related to the required regulatory procedures and for the MA and the MA application, grant, maintenance, update, variation, defence and renewal, as the case may be, in the Territory throughout the term of this Agreement. (iii) In advance of their use and/or submission, Eurofarma shall furnish NLS with copies of all material correspondence to be sent to the competent regulatory authorities in the Territory, and all MA applications which are prepared for the Licensed Product. NLS shall have the right to comment and Eurofarma must comply with the requested changes by the NLS, provided that any such comments and/or changes are in compliance with the rules of the local and competent regulatory agencies. (iv) Subject to NLS prior written approval which may be granted at its own discretion and for its own reasons, Eurofarma may conduct certain work pre MA approval or post MA approval and in that case Eurofarma agrees to share with NLS any data from laboratory, preclinical, clinical, chemistry, manufacturing and control studies conducted in support of its regulatory filings for the development, approval, and marketing of the Licensed Product and after its marketing approval as the case may be, should Eurofarma conduct any such work on its own. Any contribution of NLS to the costs of such work (that do not fall under 9.3 (ii)) (including, without limitation, translation of documents) shall be the exclusive responsibility of NLS. 9.4. Regulatory Obligations of Licensor Licensor shall take all reasonable actions and render all reasonable assistance to help Licensee obtain and maintain the MA which are reasonably requested by the Licensee or required by the competent authorities in line with local requirements and/or necessary to avoid the imposition of any restriction or condition under the MA by the competent authorities. + +10 + +Source: NLS PHARMACEUTICS LTD., F-1, 2/28/2020 + + + + + +License and Development Agreement + +Licensor shall provide the Licensee the Dossier, any updates and variations to the Dossier (such as monograph, method updates or stability data, new manufacturer or API supplier) without undue delay when such additional data is available to the Licensor. In any event, Licensor understands and agrees that any variations and/or updates shall only be implemented by Licensee once this is permissible according to applicable regulatory provisions. In case the corresponding regulatory agency requests any information on any updates and/or variations requested by NLS, the responsibility to provide such information shall be of NLS, and NLS shall be bound to any deadlines and other requirements posed by the regulatory agency. 9.5. Pharmacovigilance The Parties acknowledge that they may be required to submit adverse drug experience reports and supplemental information to governmental agencies with respect to the Products. Eurofarma shall assume full responsibility for all post MA approval Pharmacovigilance activities in the Territory Each Party has the right to receive in good faith all the safety documents referring to the product filed by the other Party to regulatory authorities including PSURs (Periodic Safety Update Report), PBRER (Periodic Benefit Risk Evaluation Report), RMP (Risk Management plans), but not limited to only these. Further, each Party agrees to report to the other Party any serious and unexpected adverse reaction with the use of mazindol CR in the Field within two business days of the initial receipt of a report or sooner if required for either Party to comply with regulatory requirements; and the Parties agree that the Licensee shall immediately report and notify in writing to NLS any adverse or suspected safety adverse events whether related or not to the Licensed Product (the "SAE's" and the "SUSAR's"). Parties shall then immediately set a Pharmacovigilance meeting or conference call to review such case and decide on course of action, in full compliance with their obligations under relevant laws and guidelines. Prior to the first commercial sale of the Licensed Product in the Territory, the Parties will negotiate and enter into a Safety Data Exchange Agreement further specifying the mutual obligations of the parties related to pharmacovigilance, to the extent that they deem this to be required under GCP's, applicable laws or other regulatory obligations, necessary or useful. 10. Cooperation and Joint Project Steering Committee 10.1. Cooperation The parties agree to cooperate in good faith with regard to all issues pertaining to the development of US Supplemental Data and Local Supplemental Data, to regulatory matters concerning the Licensed Product in any countries of the Territories, and the pre- marketing and commercial activities of the Licensed Products in countries of the Territories, as necessary and applicable. 10.2. Transfer of Know-how Each Party shall, at the other Party's request, transfer to the other Party any and all Know-how relating to each Licensed Product that the other Party reasonably needs in order to perform its obligations or exploit its rights under this Agreement. Each Party shall use such Know-how solely for the purpose of performing its obligations or exploiting its rights under this Agreement. + +11 + +Source: NLS PHARMACEUTICS LTD., F-1, 2/28/2020 + + + + + +License and Development Agreement + +10.3. Joint Steering Committee Within 60 business days following the execution of this Agreement, the Parties shall set-up a joint project steering committee (the "Joint Steering Committee" or "JSC"), by each Party designating its initial members to serve on the Joint Steering Committee and notifying the other Party of its dates of availability for the first meeting of the Joint Steering Committee. The Joint Steering Committee shall be composed of senior members or representatives of NLS and Eurofarma with relevant competences in clinical development, regulatory, marketing and commercial matters and shall consist of an equal number of members appointed by each Party. The Parties will discuss und agree on the appropriate number of members. Each Party may change its members from time to time. The purpose of the Joint Steering Committee, by sharing the respective competences and experiences of the Parties shall be to as detailed below: i) facilitate the preparation of the Dossiers, identify data which may be necessary to be generated for the filings of the MA applications by the Licensee, in particular in the Lead Countries ii) agree on respective activities and responsibilities of the Parties pre-MA and post MA, in particular regarding regulatory, safety and clinical development matters pre-MA, label changes and other post MA matters iii) align the Parties on pricing strategy, sales, marketing and communication plans related to the Licensed Product, iv) annually review the performance of the Licensed Product in the Lead Countries, and other countries as applicable, against the Business Plan and propose measures to improve performance as relevant and applicable; The Business Plan shall provide sufficient details to enable an accurate assessment of the Licensed Product performance and of the resources allocated by Licensee to support its commercialization. The Joint Steering Committee shall meet a minimum of four times per calendar year at least once in person and otherwise by video- or telephone conference. The JSC shall solely have an advisory role to the Parties. Notwithstanding the above, in the event of a disagreement between the Parties on pricing strategy or on any other issues deemed material by one Party (the "Dispute"), the Dispute shall be escalated to the respective CEO's of the Parties within 30 days following its written notification by the relevant Party to the other Party. The content of Licensee's public communications on NLS, including its strategies, objectives, plans, management team, board of directors, shareholders, finances, product portfolio, intellectual property rights and patents, on the Licensed Product, its revenue and share potential, data, brand and any forward-looking statements claims shall be pre-approved by NLS. 11. Commercialization Subject to Article 10.3 above, Eurofarma shall be in charge and solely responsible for any pre-marketing, marketing, selling, warehousing, handling, distributing and all other commercial activities in relation to the Licensed Product in the countries of the Territory and these activities shall be determined by Eurofarma at its sole discretion and expenses, provided that Eurofarma shall use commercially reasonable efforts to commercialize the Licensed Product in the Lead Countries as a priority and in the other countries of the Territory. + +12 + +Source: NLS PHARMACEUTICS LTD., F-1, 2/28/2020 + + + + + +License and Development Agreement + +The Licensee shall use best commercial efforts to make the first commercial sale of the Licensed Product in the Territory within twelve (12) months after receipt of marketing authorization in a given country of the Territory. 12. Supply NLS will supply Eurofarma with the finished Licensed Product based on its COGS. The Parties will enter in due time into a separate manufacturing and supply agreement concerning the Licensed Product, with the possibility of tech-transfer during the term of the Agreement. 13. Property rights to Intellectual Property Both Parties acknowledge that all Intellectual Property existing at the Effective Date shall be and remain the sole property of the Licensor. All right, title and interest in and to any Developed Intellectual Property shall vest in and belong to the Licensor. The Licensee shall execute and deliver all reasonably necessary signatures and/or documents and take any further steps (or have his employees, agents and officers do the same) to the extent necessary to make any Developed Intellectual Property the sole property of the Licensor. The Licensee shall have right to use the Developed Intellectual Property for exploiting its rights granted in this Agreement until its expiration or termination as set forth in Article 19 hereunder. Licensee Know-how shall belong to the Licensee. The Licensee hereby grants to the Licensor an irrevocable, non-exclusive, royalty-free, perpetual, worldwide license to use of any Licensee Know-how. 14. Prosecution of Infringements of Intellectual Property 14.1. Notice Either Party shall give notice to the other Party of any actual or suspected infringement of the Intellectual Property or the Developed Intellectual Property or any unlicensed activity, misuse or unauthorized disclosure of the same by any third party in the Territory as soon as reasonably practicable following such Party becoming aware of it. 14.2. Action In the event of any actual or suspected third party infringement of the Intellectual Property or the Developed Intellectual Property in the Territory, NLS may take at its sole discretion any steps (including legal action) to prosecute the infringement. Licensee shall on request support NLS in all activities which involve the protection of the Intellectual Property and the Developed Intellectual Property and to prosecute the infringement. From the date of notice of a potential infringement, NLS shall have 5 (five) days to communicate to Eurofarma whether it will take actions against such potential infringements. If NLS resolves not to take any such action, the Licensee shall have the right, but not the obligation, to take all activities and steps to protect the Intellectual Property and the Developed Intellectual Property in the Territory, provided however, that the Licensee shall not accept pay, settle or compromise any such claim or proceedings without the prior written consent of NLS. + +13 + +Source: NLS PHARMACEUTICS LTD., F-1, 2/28/2020 + + + + + +License and Development Agreement + +14.3. Information The Party in charge of the respective prosecution and legal action shall keep the other Party promptly and fully informed and documented as to the progress of any action. 15. Representations and Warranties 15.1. Licensor Representations and Warranties Licensor represents and warrants that each of the representations and warranties set out below are true and accurate in all respects: a) Authority and capacity The Licensor has the right to enter into this Agreement and any agreement or document referred to herein and perform its obligations hereunder, including granting the licences under Article 2. b) Financial Situation The Licensor has not committed an act of bankruptcy, proposed a compromise or arrangement to its creditors generally, had any petition in bankruptcy filed against it, filed a petition or undertaken any action proceeding to be declared bankrupt, to liquidate its assets or to be dissolved. c) Intellectual Property To the best of Licensor's knowledge (i) Licensor has good, unrestricted and merchantable title to the Intellectual Property licensed to the Licensee hereunder; (ii) no part of the Intellectual Property licensed to the Licensee hereunder has been unlawfully copied from third party materials; (iii) the use of the Intellectual Property will not infringe any third party intellectual property rights. d) Regulatory Compliance To the best of Licensor's knowledge there is no hearing, investigation or audit of any regulatory authority alleging any regulatory potential or actual non-compliance by Licensor or the Licensed Product under any applicable law or a lack of safety at the Effective Date. 15.2. Licensee Representations and Warranties Licensee represents and warrants that each of the representations and warranties set out below are true and accurate in all respects: a) Authority and Capacity The Licensee has the right to enter into this Agreement and any agreement or document referred to herein and to perform its obligations hereunder. + +14 + +Source: NLS PHARMACEUTICS LTD., F-1, 2/28/2020 + + + + + +License and Development Agreement + +b) Financial Situation The Licensee is not insolvent and has not committed an act of bankruptcy, proposed a compromise or arrangement to its creditors generally, had any petition in bankruptcy filed against it, filed a petition or undertaken any action proceeding to be declared bankrupt, to liquidate its assets or to be dissolved. c) Regulatory Compliance The Licensee is able to obtain and hold a MA for the Licensed Product under the laws of each country of the Territory and has (or will own at the time of the Launch in that country) any license required under the applicable law to import, sell and market the Licensed Product in the respective country. d) Intellectual Property The Licensee has made all inspections and investigations of the Intellectual Property deemed necessary and desirable by the Licensee and it has made its own evaluation of the Intellectual Property, except any evaluation on non- infringement or validity of such rights, which is not the responsibility of Licensee. 15.3. Other Representations and Warranties Save of the representations and warranties given in Article 15.1 the Licensor makes no further representation or warranty, either express, implied or statutory, written or oral, and any claims, regardless of their legal basis and nature, are, to the fullest extent permissible by law, hereby excluded (unless such claims arise under the representations and warranties of Licensor) and the Licensee waives any such claim or right other than in respect of the Representations and Warranties of the Licensor. This exclusion or waiver applies in particular to: a) any projection, forecast, other forward-looking statement relating to the Licensed Product; a) any success, profitability, value, commercial marketability or competitiveness of any product at the market or its eligibility for reimbursement by any social security institutions, governmental bodies, statutory health insurances and the like; b) any expectation or statement made that any future application for a MA will be granted; c) the extent, duration and validity of any MA, e.g. that any MA will be granted or that a granted MA will not be varied, suspended, revoked, withdrawn or cancelled or otherwise declared invalid by any competent regulatory authority in the Territory; d) the quality, safety or efficacy of any product and other characteristics of any product; e) the presence or absence of any future deficiencies. Accordingly, save as expressly set out in this Agreement, the Licensee shall not be entitled to terminate this Agreement or exercise any right or remedy which would have a similar effect, or to claim damages from the Licensor. 16. Liability and Limitations Either Party shall only be liable for direct losses incurred by the other Party as a direct consequence of a negligent or intentional breach of this Agreement by such liable Party, and shall not be liable for any punitive or indirect damages, losses caused by business interruptions, loss of revenues, loss of profit, damages and loss of goodwill, or any reputational damages, and both Parties waive any claims to such losses. + +15 + +Source: NLS PHARMACEUTICS LTD., F-1, 2/28/2020 + + + + + +License and Development Agreement + +In addition, neither Party shall be liable for any claim under this Agreement which is capable of remedy, unless and until the other Party has given such Party written notice containing full details of the breach and such Party has failed to remedy the breach within sixty (60) days of receipt of the notice. 17. Indemnities 17.1. Indemnities by the Licensor Without prejudice to any other provision of this Agreement, the Licensor shall indemnify, defend and hold harmless the Licensee from and against all liabilities, claims, demands, obligations, fines, penalties, judgements, losses or damages whatsoever (including without limitation, court costs, amounts paid in settlement and any legal, accounting and other expert fees and expenses reasonably incurred) (collectively "Losses") suffered, incurred, sustained by or imposed on the Licensee resulting from or arising out of: a) any breach of the representations and warranties made by the Licensor; b) any non-performance or breach of any of the Licensor's obligations under this Agreement. 17.2. Indemnities by the Licensee Without prejudice to any other provision of this Agreement, Licensee shall indemnify, defend and hold harmless Licensor from and against all Losses suffered, incurred, sustained by or imposed upon Licensor resulting from or arising out of: a) any breach of the representations and warranties made by the Licensee; b) any non-performance or breach of any of the Licensee's obligations under this Agreement. 17.3. Third party claims If any claim is brought against a Party entitled to the benefit of an indemnity set out in this Agreement (the "Indemnified Party") by any third party which is likely to result in a claim against the other Party who has given an indemnity under this Agreement (the "Indemnifying Party"), the Indemnified Party shall a) give notice of such third party claim to the Indemnifying Party as soon as reasonably practicable in reasonable detail, including a reasonable explanation of why the Indemnified Party assumes that it is entitled to indemnification under this Agreement; b) keep the Indemnifying Party promptly and fully informed and documented as to the progress of any such claim; c) subject to the Indemnified Party being entitled to employ its own legal advisors take all reasonable steps as to minimise or resolve such liability or dispute and, upon request by the Indemnifying Party, allow the Indemnifying Party to lead or direct the proceedings; d) cooperate with all reasonable requests of the Indemnifying Party in relation to such claim; and e) not accept, pay, settle or compromise any such claim without the prior written consent of the Indemnifying Party (such consent not to be unreasonably withheld, delayed or conditioned). + +16 + +Source: NLS PHARMACEUTICS LTD., F-1, 2/28/2020 + + + + + +License and Development Agreement + +18. Confidentiality 18.1. Confidentiality Obligations a) Confidential Information shall mean any information that (i) is not publicly known (ii) has been imparted in circumstances in which the recipient ought reasonably to have known that the information had been imparted in confidence. This includes especially but not exclusively the information described in the clauses 18.1 b), c) and d). b) Each Party undertakes to maintain confidentiality as regards the execution and terms of this Agreement, and to abstain from disclosing the existence of this Agreement, its contents and all information provided to it by the other Party in connection with the negotiation of this Agreement without prior written approval of the other Party. c) The Licensee shall maintain confidentiality with regard to the Dossier and Know-how and any operations, processes, product information, product formulations, information regarding applications and submissions, know-how, designs, trade secrets, product plans, product development efforts, other commercial and product data, software, prototypes, samples and/or data sets related thereto, and any information or analysis derived from Confidential Information. For the avoidance of any doubt, the confidentiality of the Dossier and Know-how shall only apply to information that at the time of assessment is actually considered to be confidential, and not, under any circumstances, the information that lawfully is or has become available to the public. d) The Licensee shall protect any Know-how and any data as Confidential Information and shall not use the Know-how and data for any purpose except as expressly licensed hereby and in accordance with the provisions of this Agreement. Each Party (the "Receiving Party") undertakes: (i.) to maintain as secret and confidential all Confidential Information obtained directly or indirectly from the other Party (the "Disclosing Party") in the course of this Agreement and to respect the Disclosing Party's rights therein; (ii.) to use such Confidential Information only for the purposes of this Agreement; and (iii.) to disclose such Confidential Information only to those of its employees, contractors, and sub-licensees pursuant to this Agreement (if any) to whom and to the extent that such disclosure is reasonably necessary for the purposes of this Agreement. 18.2. Exceptions to Obligations The provisions of clause 18.1 shall not apply to Confidential Information that the Receiving Party can demonstrate by reasonable, written evidence; (i.) is or has become generally available to the public other than as a direct or indirect result of a disclosure by the Receiving Party or any of its representatives; or (ii.) was, prior to its receipt by the Receiving Party from the Disclosing Party, in the possession of the Receiving Party and at its free disposal; or (iii.) is subsequently disclosed to the Receiving Party without any obligations of confidence by a Third Party who has not derived it directly or indirectly from the Disclosing Party; or (iv.) was or is developed by or on behalf of the Receiving Party independently of the Disclosing Party's Confidential Information; or + +17 + +Source: NLS PHARMACEUTICS LTD., F-1, 2/28/2020 + + + + + +License and Development Agreement + +(v.) the Receiving Party is required to disclose to the courts of any competent jurisdiction, or to any government regulatory agency, or financial authority, provided that the Receiving Party shall (i) inform the Disclosing Party as soon as is reasonably practicable, and (ii) at the Disclosing Party's request seek to persuade the court, agency, or authority to have the information treated in a confidential manner, where this is possible under the court, agency, or authority's procedures. 18.3. Survival of Confidentiality Obligations The confidentiality obligations provided in this Article shall survive any termination or expiry of this Agreement for period of ten (10) years. 19. Term and Termination 19.1. Term This Agreement will come into effect on the Effective Date and shall continue in full force for ten (10) years from the Launch (the "Initial Term"), or the date of expiry of the last valid patent of the Licensed Product, whichever comes later, subject to clauses 19.2, 19.3, 19.4 and 19.5 hereunder. By mutual agreement of the Parties, the Initial Term may be extended by successive periods of three (3) years. If any relevant registration is not successfully reached with regards to any extension of the Agreement, the Parties shall cooperate and negotiate on arm's length basis in order to obtain a suitable solution and achieve a proper agreement that enables the Parties to fully comply with the rights, obligations and commitments herein set forth. 19.2. Termination for Change of Control In the event of a Change of Control of the Licensee, the Agreement may be terminated by Licensor with immediate effect without any compensation to Licensee or to any other parties. In the event of a Change of Control of the Licensor, the Agreement may be terminated by Licensee. In case of termination of the Agreement, NLS and Eurofarma shall immediately work on a transition out plan, with activities and timelines agreed by the Parties to ensure a proper handover of the Licensed Product so that its market position and the obligations to prescribers, patients and regulatory authorities are fulfilled in accordance with Eurofarma best practices. 19.3. Termination for Bankruptcy, Liquidation and similar proceedings This Agreement may be terminated by either Party, effective upon notice following the expiry of the cure period described hereafter, upon the filing or institution of any bankruptcy, reorganization, liquidation or receivership proceedings of the other Party, or upon the failure by the other Party for more than ninety (90) days to discharge or obtain the dismissal of any such actions filed against it. Such termination shall be effective upon receipt of notice from the affected Party. 19.4. Early Termination for Material Breach If either of the Parties fails to perform or violates any material term of this Agreement (the "Breaching Party"), then the other Party (the "Other Party") may give written notice of default ("Notice of Default") to the Breaching Party. + +18 + +Source: NLS PHARMACEUTICS LTD., F-1, 2/28/2020 + + + + + +License and Development Agreement + +If Licensee is the Breaching Party and fails to cure the default within sixty (60) calendar days upon receipt of the Notice of Default, the Licensor has the right to terminate this Agreement with immediate effect by written notice ("Notice of Termination") to the Breaching Party. If Licensor is the Breaching Party and fails to cure the default within sixty (60) calendar days upon receipt of the Notice of Default, the Licensee has the right to terminate this Agreement with immediate effect by written notice ("Notice of Termination") to the Breaching Party and shall be paid by Licensor an indemnity corresponding to the fair market value of the expected discounted cash flows of Licensee over the remaining lifetime of this Agreement. 19.5. Early Termination by the Licensor The Agreement may be terminated by NLS according to Article 19.4 in case Eurofarma fails to use commercially reasonable efforts to obtain a MA and to commercialize the Licensed Product in the Lead Countries, provided that the Supplemental Data, if any, was provided to Eurofarma. If Eurofarma has not made the first commercial sale within twelve (12) months after receipt of the MA in a Lead Country of the Territory, not for reasons outside of its control, or if Eurofarma has failed to use reasonable commercial efforts to meet the annual objectives of the most updated Business Plan during the Term, which may be amended by Eurofarma from time to time and accepted by NLS, then NLS may, upon sixty (60) days prior written notice to Eurofarma (unless Eurofarma makes such first commercial sale within such sixty-day period), terminate the rights granted to Eurofarma with respect to the Licensed Product in such country. 19.6. Early Termination by the Licensee i) Eurofarma may terminate the Agreement upon ninety (90) days prior written notice to NLS in case the US Supplemental Data to support the Dossier for Brazil is not or cannot be provided by NLS within the time limit agreed by the Parties or cannot be generated as part of the Local Supplemental Data for Brazil. ii) Eurofarma may terminate the Agreement in case the activities conducted by NLS under article 5, paragraphs a), b) and c) do not allow the Licensed Product to be approved by the US FDA. iii) Eurofarma may terminate the Agreement in case the Licensed Product fails to receive a MA from the US FDA or a MA is not granted on the Licensed Product in any of the Lead Countries despite reasonable commercial efforts by Eurofarma to seek and obtain such MA. iv). Eurofarma shall have the right to terminate the Agreement in case of fundamental changes in the market, competitive and economic conditions, outside of the Parties control, at the time of the launch of the Licensed Product in the territory which would make its commercialization not economically viable and provided that the Parties after good faith efforts fail to agree on an alternative plan to address this situation within 3 months following the notification by Eurofarma to NLS of its decision to terminate the Agreement under this clause. + +19 + +Source: NLS PHARMACEUTICS LTD., F-1, 2/28/2020 + + + + + +License and Development Agreement + +19.7. Consequences of Expiration or Termination The expiration or termination of the Agreement shall have the following consequences: (i) The Licensee shall cease to use the License and cease to conduct any activities that would require the License, unless explicitly stated otherwise in this Article. (ii) Licensee or Affiliates or Distributors may sell off all previously purchased Licensed Products still in their warehouses within a period of six (6) months of the effective date of such termination (the "Sell-Off Period") provided that the sale of such Licensed Products by Licensee or Affiliates or Distributors of the Licensee shall be subject to the terms of this Agreement, including but not limited to the rendering of reports and payment of royalties required under this Agreement. (iii) Promptly upon the request of Licensor, the Licensee shall, at the Licensor's sole discretion and election for each country of the Territory and each Licensed Product either withdraw or transfer all Marketing Authorizations in the Territory to the Licensor (or to a third party as the Licensor directs). Licensee shall take the required steps without any delay and the withdrawal or transfer shall be completed in maximum 90 days after the notification of the request; if the Licensor does not decide and inform within this period to whom the Marketing Authorizations and documents shall be transferred, then the Licensee shall have no obligation to keep them active. If a Marketing Authorization has been applied for, but not yet been granted in any country of the Territory, the same shall apply to the applicant status. (iv) The Licensee shall hand over to the Licensor any and all documents related to the regulatory status or containing Intellectual Property or Confidential Information of Licensor. (v) Termination shall not relieve either Party of its accrued obligations under this Agreement. (vi) With the exception of termination in case of material breach of its obligations by Licensor according to Article 19.4, upon termination, or early termination by the Licensee according to Article 19.6, Licensee shall pay Licensor any unpaid sums (fees, milestone payments, royalties, etc.) related to the Agreement. 20. General Provisions 20.1. Amendments This Agreement may only be modified or amended by a document duly signed by all Parties. Any provision contained in this Agreement may only be waived by a document duly signed by the Party waiving such provision. 20.2. Notices All notices or other communications to be given under or in connection with this Agreement shall be made in writing and shall be delivered by registered mail or overnight courier service to the address that is mentioned on the cover page of this Agreement or subsequently communicated in writing. All notices shall become effective on the day of their reception by the receiving Party, or if the receiving Party refuses its acceptance or does not collect it from the competent post office or mail service, on the date of the refusal. 20.3. Severability / Good Faith Should any part or provision of this Agreement be held to be invalid by any competent court, governmental or administrative authority having jurisdiction, the other provisions of this Agreement shall nonetheless remain valid. In this case, the Parties shall endeavour to negotiate a substitute provision that best reflects the economic intentions of the Parties without being unenforceable, and shall execute all agreements and documents required in this connection. The same shall apply if and to the extent that this Agreement is found to contain any gaps or omissions. + +20 + +Source: NLS PHARMACEUTICS LTD., F-1, 2/28/2020 + + + + + +License and Development Agreement + +20.4. No Waiver The failure of any of the Parties to enforce any of the provisions of this Agreement or any rights with respect thereto shall in no way be considered as a waiver of such provisions or rights or in any way affect the validity of this Agreement. 20.5. No Assignment This Agreement may not be assigned or otherwise transferred, nor may any right or obligations hereunder be assigned or transferred, by either Party without the prior written consent of the other Party; provided, however, that Licensor may, without such consent, assign this Agreement and its rights and obligations hereunder, in whole or in part, to an Affiliate or in connection with the transfer or sale of all or substantially all of its assets related to the Licensed Product or the business relating thereto, or in the event of its merger or consolidation or change in control or similar transaction. Licensor shall however refrain from any such permitted assignment if such permitted assignment is reasonably able to jeopardize Licensee's business of Licensed Product in the Territory. 20.6. Appendices All Appendices form an integral part of this Agreement. 20.7. Public Announcements No press releases or other public announcement concerning this Agreement shall be made by either Party unless the form and text of such announcement shall first have been approved by the other Party, except for any announcements based on reporting duties under applicable laws and regulations or stock exchange regulations. 21. Governing Law and Jurisdiction This Agreement shall be governed by and construed in accordance with the substantive laws of the Netherlands, excluding its rules of conflicts of law and the United Nations Convention on Contracts for the International Sale of Goods dated 11 April 1980 (CISG), as amended from time to time. All disputes arising out of or in connection with the present Agreement, including disputes on its conclusion, binding effect, amendment and termination, shall be finally resolved by binding arbitration in accordance with the Rules of Arbitration of the International Chamber of Commerce ("ICC") by one or more arbitrators appointed in accordance with the said rules and experienced in the pharmaceutical business. The place of Arbitration shall be in The Hague, Netherlands, or in a place otherwise mutually agreeable. The arbitration shall be conducted in English. + +21 + +Source: NLS PHARMACEUTICS LTD., F-1, 2/28/2020 + + + + + +License and Development Agreement + +IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed in two counterparts on the date first written above, whereby each Party shall execute and initialize one counterpart, each of which when so executed and delivered shall be an original but shall not be effective until each Party has executed at least one counterpart, but all counterparts shall together constitute one and the same agreement. NLS-1 Pharma AG /s/ Ronald Hafner /s/ Alex Zwyer Ronald Hafner Alex Zwyer Chairman of the Board CEO & Member of the Board of Directors Date: Eurofarma Laboratórios S.A. /s/ Julíana Mazza Reîs /s/ Martha Penna Name: Julíana Mazza Reîs Name: Martha Penna title: Eurofarma Laboratórios S.A. title: Vice Presîdente Inovaçäo Díretora de Gestào de PortfólÎo e LÎcenças Date: Witnesses: /s/ Bruno C.Z. Baptista /s/ Walker Lahmann Name: Bruno Castagnoli Zilli Baptista Name: Walker Lahmann Id.: Portfolio Management & Licensing Coordinator Id: Executive Director + +22 + +Source: NLS PHARMACEUTICS LTD., F-1, 2/28/2020 + + + + + +License and Development Agreement + +Table of Appendices Number Name Appendix A [Template for Licensee Reports] Appendix B Preliminary Business Plan + +23 + +Source: NLS PHARMACEUTICS LTD., F-1, 2/28/2020 + + + + + +License and Development Agreement + +Appendix A - [Template for Licensee Reports] - to be provided by NLS to Eurofarma within 60 days following the effective date of signature of the Agreement + +24 + +Source: NLS PHARMACEUTICS LTD., F-1, 2/28/2020 + + + + + +License and Development Agreement + +Appendix B - Preliminary Business Plan Sales Forecast Latin America - in units (monthly treatments, considering both adult and pediatric indications) Forecast in Units YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 YEAR 6 YEAR 7 YEAR 8 YEAR 9 YEAR 10 TOTAL + +BRAZIL 67.435 154.809 232.214 348.321 435.401 522.481 548.605 576.035 587.556 599.307 4.072.162 REST OF LATAM 21.931 71.105 135.482 206.698 259.783 299.791 343.867 327.768 287.040 276.346 2.229.813 TOTA LATAM 89.366 225.914 367.696 555.019 695.184 822.272 892.472 903.803 874.596 875.653 6.301.974 + +25 + +Source: NLS PHARMACEUTICS LTD., F-1, 2/28/2020 \ No newline at end of file diff --git a/full_contract_txt/NmfSlfIInc_20200115_10-12GA_EX-10.5_11946987_EX-10.5_Trademark License Agreement.txt b/full_contract_txt/NmfSlfIInc_20200115_10-12GA_EX-10.5_11946987_EX-10.5_Trademark License Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..e0061631070eafce6ce33dd94392a36c762485ae --- /dev/null +++ b/full_contract_txt/NmfSlfIInc_20200115_10-12GA_EX-10.5_11946987_EX-10.5_Trademark License Agreement.txt @@ -0,0 +1,47 @@ +Exhibit 10.5 TRADEMARK LICENSE AGREEMENT This TRADEMARK LICENSE AGREEMENT (this "Agreement") is made and effective as of [·], 2019 (the "Effective Date"), by and among New Mountain Capital, L.L.C., a Delaware limited liability company (the "Licensor"), and NMF Senior Loan Fund I, Inc., a Maryland corporation (the "Licensee"). The Licensor and the Licensee are sometimes referred to herein separately as a "party" and collectively as the "parties." RECITALS WHEREAS, the Licensee is a closed-end management investment company that intends to elect to be treated as a business development company under the Investment Company Act of 1940, as amended; WHEREAS, the Licensor, together with its affiliates, provides investment management, investment consultation and investment advisory services; WHEREAS, the Licensor, of which New Mountain Finance Advisers, BDC, L.L.C., a Delaware limited liability company (the "Investment Advisor") is an affiliate, is the owner of all right, title, and interest in and to the mark "NMF" (the "Licensed Mark") in the United States of America, Canada and the European Union (the "Territory") in connection with "financial services, namely, investment advisory and investment management services for pooled investment vehicles, private investment funds, and investment accounts; investment management services for others; private equity services, namely, providing expansion and growth capital in the form of private equity investments; financial services, namely, private equity and public equity capital investment; private and public equity investment management services; providing private equity fund investments; investment services, namely, asset acquisition, consultation, development, research and management services; capital investment services; equity capital investment; financial services, namely, debt and equity investment services in private companies, namely, investment to support business expansions, acquisitions, management buyouts and recapitalizations" (the "Licensed Services"), and Licensor has been and is currently using, either on its own or through its related companies or licensees (such as, but not limited to, the Investment Advisor) the Licensed Mark; WHEREAS, the Licensee is entering into an investment advisory and management agreement with the Investment Advisor (the "Investment Management Agreement"), wherein the Licensee will engage the Investment Advisor to act as the investment advisor to the Licensee; WHEREAS, it is intended that the Investment Advisor be a third party beneficiary of this Agreement; and WHEREAS, the Licensee desires to use the Licensed Mark as part of its company name and in connection with the operation of its business, and the Licensor is willing to grant the Licensee a license to use the Licensed Mark, subject to the terms and conditions of this Agreement. NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties, intending to be legally bound, hereby agree as follows: ARTICLE 1 LICENSE GRANT 1.1. License. Subject to the terms and conditions of this Agreement, the Licensor hereby grants to the Licensee, and the Licensee hereby accepts from the Licensor, a personal, non-exclusive, royalty-free right and license to use the Licensed Mark in the Territory solely and exclusively as a component of the Licensee's own company name and in connection with the Licensed Services and any business provided in conjunction therewith by such Licensee. During the term of this Agreement, the Licensee shall use the Licensed Mark only to the extent permitted under this Agreement, and except as provided above, neither the Licensee nor any of its affiliates, owners, directors, officers, employees or agents shall otherwise use the Licensed Mark or any derivatives without the prior express written consent of the Licensor in its sole and absolute discretion. All rights not expressly granted to the Licensee hereunder shall remain the exclusive property of the Licensor. Upon written notification by the Licensor + +Source: NMF SLF I, INC., 10-12G/A, 1/15/2020 + + + + + +to the Licensee of noncompliance with the Licensor's quality standards in any material respect, such Licensee shall take appropriate steps, in a commercially reasonable time frame, not to exceed sixty (60) days, to cure such noncompliance. 1.2. Licensor's Use. Nothing in this Agreement shall preclude the Licensor, its affiliates, or any of its successors or assigns from using or permitting other entities to use the Licensed Mark, whether or not such entity directly or indirectly competes or conflicts with the Licensee's businesses in any manner. 1.3. Ownership. The Licensee acknowledges and agrees that the Licensor is the owner of all right, title, and interest in and to the Licensed Mark, and all such right, title, and interest shall remain with the Licensor. The Licensee shall not otherwise contest, dispute, or challenge the Licensor's right, title, and interest in and to the Licensed Mark. The Licensee hereby assigns and agrees to assign any rights it may have as a result of its licensed use, including common law rights, in the Licensed Mark, to Licensor. 1.4. Goodwill. All goodwill and reputation generated by the Licensee's use of the Licensed Mark shall inure to the benefit of Licensor. The Licensee shall not by any act or omission use the Licensed Mark in any manner that disparages or reflects adversely on Licensor or its business or reputation. ARTICLE 2 COMPLIANCE 2.1. Quality Control. In order to preserve the inherent value of the Licensed Mark, the Licensee agrees to use reasonable efforts to ensure that it maintains the quality of its business and the operation thereof equal to the standards prevailing in the operation of the Licensor's and the Licensee's businesses as of the date of this Agreement. The Licensee further agrees to use the Licensed Mark in accordance with such quality standards as may be reasonably established by the Licensor and communicated to the Licensee from time to time in writing, or as may be agreed to by the Licensor and the Licensee from time to time in writing. The Licensee agrees to allow the Licensor to conduct reasonable inspection of the quality of the Licensee's services from time to time. 2.2. Compliance With Laws. The Licensee agrees that the business operated by it in connection with the Licensed Mark shall comply with all laws, rules, regulations and requirements of any governmental body in the Territory or elsewhere as may be applicable to the operation, advertising, and promotion of the business and that it shall notify the Licensor of any action that must be taken by the Licensee to comply with such law, rules, regulations or requirements. 2.3. Notification of Infringement. Each party shall immediately notify the other party and provide to the other party all relevant background facts upon becoming aware of (a) any registrations of, or applications for registration of, marks in the Territory that do or may conflict with the Licensor's rights in the Licensed Mark or the rights granted to the Licensee under this Agreement, (b) any infringements or misuses of the Licensed Mark in the Territory by any third party ("Third Party Infringement") or (c) any claim that Licensee's use of the Licensed Mark infringes the intellectual property rights of any third party in the Territory ("Third Party Claim"). The Licensor shall have the exclusive right, but not the obligation, to prosecute, defend and/or settle in its sole discretion, all actions, proceedings and claims involving any Third Party Infringement or Third Party Claim, and to take any other action that it deems necessary or proper for the protection and preservation of its rights in the Licensed Mark. The Licensee shall cooperate with the Licensor in the prosecution, defense or settlement of such actions, proceedings or claims. ARTICLE 3 REPRESENTATIONS AND WARRANTIES 3.1. Disclaimer of Representation and Warranties. The Licensee hereby accepts this license on an "as is" basis. The Licensee acknowledges that the Licensor makes no explicit or implicit representation or warranty as to the registrability, validity, enforceability or ownership of the Licensed Mark, or as to the Licensee's ability to use the Licensed Mark without infringing or otherwise violating the rights of others, and the Licensor has no obligation 2 + +Source: NMF SLF I, INC., 10-12G/A, 1/15/2020 + + + + + +to indemnify the Licensee with respect to any claims arising from the Licensee's use of the Licensed Mark, including without limitation any Third Party Claim. 3.2. Mutual Representations. Each party hereby represents and warrants to the other party as follows: (a) Due Authorization. Such party is a corporation or limited liability company duly incorporated or organized and in good standing as of the Effective Date, and the execution, delivery and performance of this Agreement by such party have been duly authorized by all necessary action on the part of such party. (b) Due Execution. This Agreement has been duly executed and delivered by such party and, upon due authorization, execution and delivery of this Agreement by the other party, constitutes a legal, valid and binding obligation of such party, enforceable against such party in accordance with its terms. (c) No Conflict. Such party's execution, delivery and performance of this Agreement do not: (i) violate, conflict with or result in the breach of any provision of the charter or by-laws (or similar organizational documents) of such party; (ii) conflict with or violate any governmental order applicable to such party or any of its assets, properties or businesses; or (iii) conflict with, result in any breach of, constitute a default (or event which with the giving of notice or lapse of time, or both, would become a default) under, require any consent under, or give to others any rights of termination, amendment, acceleration, suspension, revocation or cancellation of any contract, agreement, lease, sublease, license, permit, franchise or other instrument or arrangement to which it is a party. ARTICLE 4 TERM AND TERMINATION 4.1. Term. The license granted to the Licensee under this Agreement shall continue perpetually. Notwithstanding the foregoing, this Agreement shall expire if the Investment Advisor or one of its affiliates ceases to serve as investment adviser to the Licensee. This Agreement shall be terminable (a) by the Licensor (i) at any time and in its sole discretion in the event that the Licensor or the Licensee receives notice of any Third Party Claim arising out of the Licensee's use of the Licensed Mark or (ii) upon sixty (60) days' written notice by the Licensor to the Licensee or (b) by the Licensee (i) at any time in the event such Licensee assigns or attempts to assign or sublicense this Agreement or any of the Licensee's rights or duties hereunder without the prior written consent of the Licensor or (ii) upon sixty (60) days' written notice by the Licensee to the Licensor. 4.2. Effect of Termination. Upon expiration or termination of this Agreement, all rights granted to the Licensee under this Agreement with respect to the Licensed Mark shall cease, and the Licensee shall immediately delete the term "NMF" from its corporate name and shall discontinue all other use of the Licensed Mark. For twenty-four (24) months following termination of this Agreement, the Licensee shall specify on all public- facing materials in a prominent place and in prominent typeface that the Licensee is no longer operating under the Licensed Mark, is no longer associated with the Licensor, or such other notice as may be deemed necessary by the Licensor in its sole discretion in its prosecution, defense, and/or settlement of any Third Party Claim. ARTICLE 5 MISCELLANEOUS 5.1. Third Party Beneficiaries. The parties agree that the Investment Advisor shall be a third party beneficiary of this Agreement, and shall have the rights and protections provided to the Licensee under this Agreement. Nothing in this Agreement, either express or implied, is intended to or shall confer upon any third party other than the Investment Advisor any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement. 5.2. Assignment. The Licensee shall not sublicense, assign, pledge or grant as security or otherwise encumber or transfer to any third party all or any part of its rights or duties under this Agreement, in whole or in part, without the prior written consent from the Licensor, which consent the Licensor may grant or withhold in its 3 + +Source: NMF SLF I, INC., 10-12G/A, 1/15/2020 + + + + + +sole and absolute discretion. Any purported transfer or other encumbrance without such consent shall be void ab initio. 5.3. Independent Contractor. Except as expressly provided or authorized in the Investment Management Agreement or any other agreement between the parties, no party shall have, or shall represent that it has, any power, right or authority to bind the other party to any obligation or liability, or to assume or create any obligation or liability on behalf of the other party. 5.4. Notices. All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given or made (and shall be deemed to have been duly given or made upon receipt) by delivery in person, by overnight courier service (with signature required), by facsimile or by registered or certified mail (postage prepaid, return receipt requested) to the respective parties at the following addresses (or such other address as the parties may provide to each other by written Notice): If to the Licensor: New Mountain Capital, L.L.C. 787 7 Avenue, 49th Floor New York, New York 10019 Tel. No.: 212.720.0300 Attn: Chief Executive Officer If to the Licensee: NMF Senior Loan Fund I, Inc. 787 7 Avenue, 48th Floor New York, New York 10019 Tel. No.: 212.720.0300 Attn: Chief Executive Officer 5.5. Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York without giving effect to the principles of conflicts of law rules. The parties unconditionally and irrevocably consent to the exclusive jurisdiction of the courts located in the State of New York and waive any objection with respect thereto, for the purpose of any action, suit or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby. 5.6. Amendment. This Agreement may not be amended or modified except by a written instrument signed by each party hereto. 5.7. No Waiver. The failure of any party to enforce at any time for any period the provisions of or any rights deriving from this Agreement shall not be construed to be a waiver of such provisions or rights or the right of such party thereafter to enforce such provisions, and no waiver shall be binding unless executed in writing by all parties hereto. 5.8. Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any law or public policy, all other terms and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible. 5.9. Headings. The descriptive headings contained in this Agreement are for convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement. 4 + +th + +th + +Source: NMF SLF I, INC., 10-12G/A, 1/15/2020 + + + + + +5.10. Counterparts. This Agreement may be executed in one or more counterparts, each of which when executed shall be deemed to be an original instrument and all of which taken together shall constitute one and the same agreement. 5.11. Entire Agreement. This Agreement constitutes the entire agreement of the parties with respect to the subject matter hereof and supersedes all prior agreements, understandings and arrangements with respect to such subject matter. 5 + +Source: NMF SLF I, INC., 10-12G/A, 1/15/2020 + + + + + +IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as of the Effective Date. LICENSOR: NEW MOUNTAIN CAPITAL, L.L.C. By: Name: Title: LICENSEE: NMF SENIOR LOAN FUND I, INC. By: Name: Title: ACKNOWLEDGED AND AGREED TO AS OF THE EFFECTIVE DATE OF THIS AGREEMENT NEW MOUNTAIN FINANCE ADVISERS BDC, L.L.C. By: Name: Title: 6 + +Source: NMF SLF I, INC., 10-12G/A, 1/15/2020 \ No newline at end of file diff --git a/full_contract_txt/OAKTREECAPITALGROUP,LLC_03_02_2020-EX-10.8-Services Agreement.txt b/full_contract_txt/OAKTREECAPITALGROUP,LLC_03_02_2020-EX-10.8-Services Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..f84a50f90eb37fea460d9e9329ed0d5b41094eae --- /dev/null +++ b/full_contract_txt/OAKTREECAPITALGROUP,LLC_03_02_2020-EX-10.8-Services Agreement.txt @@ -0,0 +1,273 @@ +Exhibit 10.8 + +Services Agreement + +Oaktree Capital Management, L.P. + +and + +Oaktree Capital Management (International) Limited + +September 2018 + +1 + + + + + +THIS SERVICES AGREEMENT (this "Agreement") is made on 25 September 2018 + +BETWEEN: + +(1) Oaktree Capital Management, L.P. a Delaware limited partnership of 333 South Grand Avenue, 28th Floor, Los Angeles, CA 90071 ("Oaktree US"); and + +(2) Oaktree Capital Management (International) Limited, a private limited company (registered number 11311066) registered in England and Wales of Verde, 10 Bressenden Place, London, SW1E 5DH (the "Sub-Advisor"). + +RECITALS + +(A) Oaktree US is general partner and/or investment manager of the funds and separate accounts referred to in Schedule 2 (the "Funds"). + +(B) The Funds were established under the applicable limited partnership or other governing agreements (the "Fund Agreements"). + +(C) The Sub-Advisor has been constituted for the purposes of carrying on the business of a fund manager and advisor in the United Kingdom. The Sub- Advisor is authorised and regulated by the United Kingdom's Financial Conduct Authority (the "FCA") under Part IV of the Financial Services and Markets Act 2000 ("FSMA") (with registration number 814006). + +(D) The Sub-Advisor currently provides certain unregulated services to Oaktree US under a services agreement dated 11 June 2018, which shall be terminated on the date of this Agreement (the "Terminated Agreement"). + +(E) Oaktree US may in the future appoint the Sub-Advisor as a sub-advisor or sub-manager in connection with such collective investment schemes, mutual funds, separate accounts or companies as may be agreed from time to time (together, the "New Fund(s)"), upon the terms and conditions set forth in this Agreement. + +THE PARTIES AGREE AS FOLLOWS: + +1. APPOINTMENT AND SCOPE OF AUTHORITY + +1.1 The parties hereby agree that the Terminated Agreement shall terminate and cease to have effect for all purposes, and shall simultaneously be replaced by this Agreement, with effect from 25 September 2018 (the "Effective Date"). For the avoidance of doubt, the appointment of the Sub-Advisor to provide services to Oaktree US shall be continuous before, on and after the Effective Date, but shall have effect from and after the Effective Date solely subject to the terms and conditions of this Agreement. + +1.2 Oaktree US hereby confirms the appointment of the Sub-Advisor as sub-investment manager and sub-advisor to the Funds and to provide the services set out in Clause 2, and the Sub-Advisor accepts such appointments, on the terms and conditions set forth in this Agreement. + +1.3 Oaktree US furthermore hereby appoints the Sub-Advisor to provide certain marketing and promotion services in relation to the Funds as set out in Clause 2, on the terms and conditions set forth in this Agreement and the Sub-Advisor accepts such appointment. + +1.4 The Sub-Advisor acknowledges that it is a relying adviser under the U.S. Investment Advisers Act of 1940 (as amended) (the "Advisers Act") and the rules and regulations promulgated thereunder. If and to the extent the assets of any Discretionary Fund or Restricted Fund managed by Oaktree US are treated as "plan assets" as determined pursuant to 29 C.F.R. 2501.3-101 (or any successor thereto), the Sub-Advisor acknowledges that it will be a fiduciary for purposes of the U.S. Employee Retirement Income Security Act of 1974 ("ERISA") with respect to each employee benefit plan subject to section 406 of ERISA or section 4975 of the Internal Revenue Code of 1986 whose assets are deemed to be held by the applicable Fund to the extent required under ERISA to continue to manage or sub-advise the applicable Funds. + +1.5 The appointment of the Sub-Advisor pursuant to this Agreement shall be subject always to: + +2 + + + + + +(a) the terms and conditions in the relevant Fund Agreements governing the Funds, and the Sub-Advisor hereby agrees to observe the terms and conditions in such Fund Agreements; + +(b) any restrictions, limitations or conditions on, or any amendments made to, the Sub-Advisor's authority which may be imposed by Oaktree US as general partner and/or investment manager of the Funds from time to time; and + +(c) Oaktree US's power and authority to act at all times in respect of any of the Funds as general partner and/or investment manager of the Funds (as applicable) + +1.6 Without limiting the discretion of Oaktree US pursuant to Clause 1.5(b), Oaktree US may limit the scope of the Sub-Advisor's appointment in respect of any of the Funds by means of: + +(a) limiting the appointment to sub-advisory services in respect of a section of the relevant Fund's portfolio of investments; + +(b) limiting the appointment to sub-advisory services in respect of a particular investment or investments; + +(c) limiting the Sub-Advisor's responsibility in respect of the monitoring and/or realisation of an investment or investments; or + +(d) retaining discretion to decide upon the acquisition, disposal, conversion or underwriting of investments. + +1.7 Without limiting the discretion of Oaktree US pursuant to Clause 1.5(b), Oaktree US reserves the right as general partner and/or investment manager, in the interests of the Funds, to undertake the management of the Funds' investments and assets to the exclusion of the Sub-Advisor during any period in which the Sub-Advisor is unable to perform its duties under this Agreement due to the permanent or temporary absence of the investment professional(s) employed for the time being by the Sub-Advisor (whether due to holiday, sickness or otherwise). + +1.8 The provisions in Clauses 1.5 to 1.7 shall have overriding effect against all other provisions of this Agreement. + +1.9 The Sub-Advisor shall act honestly, with due skill, care and diligence and fairly and in the best interest of the Partnership in carrying out its obligations under this Agreement and shall use all reasonable endeavours to perform its obligations under this Agreement in accordance with FSMA, the FCA Rules and any other laws, regulations, guidelines and guidance as may be in force from time to time and applicable to the Funds and their business or to the Sub-Advisor ("Applicable Law"). + +2. SERVICES + +2.1 Without limiting the discretion of Oaktree US pursuant to Clause 1.5(b), and without prejudice to Clauses 1.6 and 1.7, the Sub-Advisor shall be appointed to assist Oaktree US with the management of the investments and assets of the Funds. + +2.2 In connection with the appointment pursuant to Clause 2.1 but subject at all times to Clause 1: + +(a) Oaktree US hereby delegates to the Sub-Advisor all such powers, authorities and discretions as shall be necessary to enable the Sub-Advisor to perform its duties as sub-manager under this Agreement; and + +(b) the Sub-Advisor shall have full power and authority hereunder to decide whether the Funds should acquire or dispose of an investment and Oaktree US grants the Sub-Advisor discretion, without consultation to Oaktree US, to: + +(i) make investment decisions with respect to invested assets of the Funds; and + +(ii) enter into such investment documents and effect such transactions (including, if applicable, instructing the Custodian (as defined in Clause 5.1 below) of the Funds in respect of transfers, withdrawals or receipts of money) as may be necessary or proper in connection with the performance by the Sub-Advisor of its duties hereunder. + +3 + + + + + +2.3 Without limiting the discretion of Oaktree US pursuant to Clause 1.5(b), and without prejudice to Clauses 1.6 and 1.7, the marketing and promotion services to be provided by the Sub-Advisor in respect of the Funds will be: + +(a) assisting Oaktree US to promote any Fund to potential investors in Europe and the Middle East to facilitate subscriptions from such investors; + +(b) advising Oaktree US concerning all actions which it appears to the Sub-Advisor that Oaktree US should consider taking to achieve effective promotion of investor interest in such Funds; + +(c) attending, if so requested by Oaktree US, meetings held with such investors; + +(d) if required by Oaktree US, arranging the administration of and receiving and collating application forms from such investors and passing the completed applications to Oaktree US for processing; and + +(e) the provision of any other marketing service as Oaktree US may require from time to time in Europe and the Middle East. + +3. FEES + +3.1 In consideration of the provision of services under this Agreement, Oaktree US will pay the Sub-Advisor such fees as may be agreed between the parties from time to time (the "Service Fee"). + +3.2 At Oaktree US' discretion, the Service Fee shall be reduced by any management fees received directly by the Sub-Advisor for investment management services provided to any party pursuant to this Agreement. The Service Fee shall also be reduced by any amounts earned on cash and cash-equivalents held by the Sub-Advisor pursuant to this Agreement. + +3.3 The Service Fee shall be reviewed by Oaktree US and the Sub-Advisor once annually (or as the parties agree) for continued appropriateness and in particular, to account for any changes in the Sub-Advisor's business. + +4. ADMINISTRATIVE FUNCTIONS + +Oaktree US and its affiliates will provide all fund and investor accounting, fund investor reporting, custodial services and similar administrative functions required in respect of the Funds. Oaktree US will provide such services in a manner and quality consistent with past practices in connection with the management of the Funds. + +5. CUSTODY + +5.1 All documents of or evidencing title to the Funds' investments shall be held in safe custody facilities by a custodian to be selected by Oaktree US (the "Custodian") subject to the terms of a custody agreement made between Oaktree US and the Custodian and subject to such other arrangements and procedures as may be agreed between Oaktree US and the Custodian from time to time. The Sub-Advisor shall at no time have custody or physical control of the invested assets of the Funds nor shall it be liable for any act or omission of the Custodian. + +5.2 Oaktree US shall take such additional steps (in addition to the authorities and powers hereby conferred) as are necessary to procure that the Sub- Advisor is able, on behalf of Oaktree US, to operate the bank accounts of the Funds so far as necessary for the Sub-Advisor to exercise all of its powers and discretions and perform all of its duties under this Agreement. + +6. RECORDS AND REPORTS + +6.1 The Sub-Advisor shall maintain proper and complete records relating to the services to be provided under this Agreement for such period of time as may be required under Applicable Law, including (as applicable, in respect of the relevant Discretionary Funds) records with respect to the acquisition, holding and disposal of securities on behalf of the Funds, details of all brokers used and the aggregate dollar amount of brokerage commission paid in that regard to each broker. + +4 + + + + + +6.2 Except as expressly authorised in this Agreement or as required by Applicable Law, regulation or court order, or as directed by Oaktree US in writing, the Sub-Advisor shall keep confidential the records and other information pertaining to Oaktree US and the Funds or the investment assets the subject of this Agreement (save for any records or information pertaining to the Sub-Advisor's own employees and affiliates, which shall be excluded from the obligations contained in this clause). Upon termination of this Agreement, the Sub-Advisor shall promptly, upon demand, return to Oaktree US all such records, except that the Sub-Advisor may retain copies for its records as may be required by Applicable Law, regulation or court order, and provided that the Sub-Advisor's confidentiality obligations shall continue in full force and effect with respect to such retained records not within the public domain. + +6.3 The Sub-Advisor shall provide to Oaktree US promptly upon request any information available in the records maintained by the Sub-Advisor relating to the Funds in such form as Oaktree US shall request. + +7. LIABILITY AND INDEMNIFICATION + +7.1 In providing its services under this Agreement, the Sub-Advisor will discharge its duties in accordance with the same standard of care established for Oaktree US in the relevant Fund Agreements, and will be indemnified by each of the Funds as an agent of Oaktree US in accordance with such Fund Agreements. To the extent Oaktree US and its affiliates, directors, officers, employees, shareholders, assigns, representatives or agents (apart from the Sub-Advisor) (collectively, "Oaktree US Indemnities") suffer any liability, loss (including amounts paid in settlement), damages or expenses (including reasonable attorneys' fees) (collectively "Losses") in connection with the Funds, and:- + +(a) Oaktree US Indemnities are not indemnified by the Funds for such Losses under the indemnification provisions of the applicable Fund Agreements; + +(b) such Losses were suffered by virtue of the Sub-Advisor's or its employees' acts or omissions, or alleged acts or omissions under this Agreement; and + +(c) the Sub-Advisor (including its employees) is guilty of negligence or wilful misconduct, + +then the Sub-Advisor will hold Oaktree US Indemnities harmless and indemnify it for such Losses; provided that the Sub-Advisor shall not be liable for actions or omissions to act ordered by Oaktree US to which the Sub-Advisor objected in writing at the time of such order. + +7.2 The provisions of this Clause 7 shall survive the termination of this Agreement. + +8. REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS + +8.1 Each of Oaktree US and the Sub-Advisor represents and warrants to each other that it is duly organised, validly existing and in good standing under the laws of its jurisdiction of incorporation, and is duly authorised by all necessary corporate action to enter into this Agreement and perform its duties as described in this Agreement. + +8.2 The Sub-Advisor hereby undertakes to Oaktree US that it will take all reasonable steps within its power to remain an authorised person for the purposes of FSMA in respect of the services to be provided by it hereunder, with a scope of permission which will permit it to carry out its obligations and exercise its powers under this Agreement, and that it will comply with those FCA Rules which apply to the services to be provided hereunder. + +9. COMPLIANCE WITH FCA RULES + +9.1 Oaktree US will be the Sub-Advisor's client for the purposes of the FCA Rules. Accordingly, in conformity with the FCA Rules, a number of additional statements and provisions are required to be included in this Agreement. Such additional statements and provisions are set out in Schedule 1 hereof ("Additional FCA Provisions"), which is hereby incorporated into and will form part of this Agreement and will apply to the services to be provided pursuant to this Agreement with effect from the Effective Date. + +9.2 Nothing in this Agreement shall require or entitle the Sub-Advisor to act as the alternative investment fund manager (as defined in the FCA Rules with effect from 22 July 2013) of any Fund or New Fund which is an alternative investment fund. The alternative investment fund manager of each Fund and New Fund which is an alternative investment fund shall be Oaktree US, unless otherwise agreed. + +5 + + + + + +10. TERM + +10.1 Basic Term + +In relation to each Fund, this Agreement shall terminate on the earlier of (a) the expiration of the term of such Fund or (b) the date, if any, on which Oaktree US (or any affiliate it has substituted in its stead in accordance with such Fund's Fund Agreement) is removed as general partner of such Fund or (c) the Sub-Advisor ceasing to be authorised and regulated by the FCA. + +10.2 Early Termination + +This Agreement may be terminated, either in respect of a Fund or in its entirety, by either Oaktree US or the Sub-Advisor for any reason upon 30 days' written notice to the other. + +11. TERMINATION CONSEQUENCES + +11.1 Upon the termination of this Agreement, the Sub-Advisor shall co-operate with Oaktree US and take all reasonable steps requested by Oaktree US in making an orderly transition to allow for continuity of management and to ensure that such termination shall not prejudice the completion of transactions already initiated. + +11.2 The Sub-Advisor shall forthwith upon termination deliver to Oaktree US a full account including a statement of all investments then under management, the income derived therefrom since the last report to Oaktree US, and the value at which they were acquired. The Sub-Advisor shall also ensure that any documents relating to Oaktree US assets over which it has control are released as soon as practicable to Oaktree US or (if so instructed by Oaktree US) to any other party as may be specified by Oaktree US. + +11.3 Notwithstanding the termination of this Agreement, Oaktree US shall complete, or shall procure that any successor manager of the Funds shall complete, all investment transactions entered into by Oaktree US hereunder prior to the termination date. + +12. COMPLAINTS PROCEDURE + +If Oaktree US has any complaint about the performance of the Sub-Advisor it must notify the Sub-Advisor Compliance Officer in writing at the address notified in accordance with Clause 13.2 of this Agreement. + +13. MISCELLANEOUS + +13.1 Governing Law + +This Agreement is governed by the laws of England and Wales. + +13.2 Notices + +Any notices provided for in this Agreement shall be sent to the following addresses or such other address as a party may designate in writing: + +6 + + + + + +To Oaktree US: Oaktree Capital Management, LP 333 South Grand Avenue 28th Floor Los Angeles California 90071 + +Attention: Todd Molz, General Counsel Facsimile: +1 (213) 830-8545 + +To the Sub-Advisor: Oaktree Capital Management (International) Limited Verde, 10 Bressenden Place, London SW1E 5DH United Kingdom + +Attention: Dominic Keenan, Europe Regional Counsel Facsimile: +44 (0) 207 201 4601 + +All notices delivered by facsimile or hand shall be deemed given on the day received. All notices mailed shall be deemed to have been given two business days after they have been deposited as certified mail, return receipt requested, postage paid and properly addressed. + +13.3 Assignment + +The Sub-Advisor may not assign (within the meaning of the Advisers Act) its rights and obligations under this Agreement without the prior written consent of Oaktree US. + +13.4 Entire Agreement + +(a) This Agreement contains the entire agreement between Oaktree US and the Sub-Advisor relating to the subject matter hereof and supersedes in its entirety all other prior agreements and all amendments thereto between Oaktree US and the Sub-Advisor relating to the subject matter hereof, including those agreements referred to in Clause 13.4(b). + +(b) For the avoidance of doubt, it is agreed and acknowledged that the Terminated Agreements are terminated with effect from the Effective Date and all of the parties' obligations and liabilities will cease with effect from the Effective Date. + +13.5 Counterparts + +This Agreement may be executed in any number of counterparts and this has the same effect as if the signatures on the counterparts were on a single copy of this Agreement. + +13.6 Third Party Rights + +13.7 Indemnified Parties which are not parties to this Agreement shall be entitled to enforce their respective rights under Clause 7, subject as therein stated. Save to this extent, any rights which would otherwise arise under the Contracts (Rights of Third Parties) Act 1999 are hereby expressly excluded. + +IN WITNESS whereof the parties have executed and delivered this Agreement as a deed as of the date appearing on the first page. + +7 + + + + + +Executed as a deed by Oaktree Capital Management, L.P. ) ) ) ) + +Authorised Signatory /s/ Todd Molz + +Authorised Signatory /s/ Richard Ting + +IN WITNESS whereof this deed has been executed and delivered on the date first above written: + +Executed as a deed by + +Oaktree Capital Management (International) Limited, acting by two directors: + +) ) ) ) ) + +Director + +Director + +/s/Thomas Ware + +/s/Dominic Keenan + +8 \ No newline at end of file diff --git a/full_contract_txt/OASYSMOBILE,INC_07_05_2001-EX-10.17-OUTSOURCING AGREEMENT.txt b/full_contract_txt/OASYSMOBILE,INC_07_05_2001-EX-10.17-OUTSOURCING AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..f1dae24088c1e04cdf3e42012e4342c590da6fc3 --- /dev/null +++ b/full_contract_txt/OASYSMOBILE,INC_07_05_2001-EX-10.17-OUTSOURCING AGREEMENT.txt @@ -0,0 +1,429 @@ +1 EXHIBIT 10.17 [E.PIPHANY Logo] + + OUTSOURCING AGREEMENT + +This ASP and Outsourcing Agreement ("Agreement") is entered into as of this 31 day of July, 2000 ("Effective Date") by and between E.PIPHANY, INC., a Delaware corporation ("E.piphany"), whose principal place of business 1900 South Norfolk Street, Suite 310, San Mateo, California 94403 and HIGH SPEED NET SOLUTIONS, INC. ("HSNS"), whose principal place of business is 434 Fayetteville Street, St. Suite 2120, Raleigh, NC 27601. + +1. LICENSE + +1.1 OUTSOURCING LICENSE. Subject to the terms of this Agreement and Scope of Use and only within the Market and Territory, E.piphany grants HSNS a nonexclusive, nontransferable, non-sublicensable right to (i) use and combine the Application with the Outsourcing Application and other software products for the purpose of providing, to Outsourcing Customers, the services described in Exhibit B as the Outsourcing Services; and (ii) use the Documentation provided with the Application in support of the Application. Unless otherwise required by the Scope of Use, HSNS shall limit its use of the Application to the Designated System. HSNS shall ensure that at all times the Outsourcing Services contain only one (1) version of the Application regardless of the number of Outsourcing Customers and Outsourcing Customers access the Outsourcing Application and Outsourcing Services only through a customer interface. Under no circumstances shall HSNS permit an Outsourcing Customer or Outsourcing Customer User to have direct access to any Application Licensed hereunder. + +1.2 DEVELOPMENT LICENSE. Subject to the terms and conditions of this Agreement and Scope of Use and only within the Market and Territory, E.piphany grants to HSNS a non-exclusive, non-transferable, non-sublicensable license during the term of this Agreement to install and use the Applications in object code format to develop the Outsourcing Application and Outsourcing Service and to install and use the Application in object code format to develop and provide maintenance and support for the Outsourcing Application to Outsourcing Customers, to demonstrate the Outsourcing Application to potential customers, and to train HSNS personnel on the use, maintenance and support of the Outsourcing Application. + +1.3 COPIES. HSNS may make a reasonable number of copies (not more than five (5)) of the Application for archival purposes, and a reasonable number of copies of the Documentation as needed by HSNS solely for HSNS' internal use, provided all copyright and proprietary notices are reproduced. HSNS may make one (1) copy of the end user sections of the Documentation for each Outsourcing Customer. All titles, trademarks, copyright and restricted rights notices shall be reproduced in such copies. HSNS shall not use any Applications that E.piphany delivers with licensed Application, for which HSNS has not purchased a license. + +1.4 LICENSE RESTRICTIONS. Except as expressly provided herein, HSNS shall not (i) rent, lease, loan, sell or otherwise distribute the Application, or any modification thereto, in whole or in part; (ii) cause or permit reverse engineering, reverse compilation, unauthorized access or assembly of all or any portion of the Application; (iii) allow any outsourcing or application service providers to access and use the Application as Outsourcing Customers, (iv) publish the results of Application performance benchmarks to any third party without E.piphany's express written consent; (v) export the Application in violation of U.S. Department of Commerce export administration regulations; and (vi) except as otherwise expressly allowed herein, permit any third party or unlicensed user or computer system to access or use the Application. HSNS agrees that it shall only provide the Application in combination with and included in Outsourcing Services HSNS acknowledges and agrees that the rights granted herein are solely to the English version of the Application. All rights not expressly granted hereunder are reserved to E.piphany. + +2. HSNS OBLIGATIONS. + +2.1 ANNUAL REPORTS. On the thirtieth (30th) day after the end of each of the first two years of this Agreement, HSNS shall submit to E.piphany a report (in a form provided by E.piphany and reasonably acceptable to HSNS) listing&bbsp;(i) the total number of emails distributed for Years 1 and 2 and (ii) the Application with which the Outsourcing Services are rendered. Year 2 and Year 3 Quarterly Payments, as defined in Exhibit "A," shall be based upon these annual reports. All reporting and payment requirements under this Section shall be subject to the audit requirements of this Agreement. + +2.2 PROFESSIONAL MANNER. HSNS agrees that, at all times and in every respect during the term of this Agreement, it shall conduct its business in a professional manner consistent with E.piphany's norms and standards, which shall reflect favorably upon E.piphany and the Application. + +2.3. MARKETING ACTIVITIES. The parties agree to develop a co-branding plan within thirty (30) days of signing of the Agreement. The parties shall use reasonable efforts to take part in the other's success stories or other marketing programs as mutually agreed. + +2.4. PROMOTION OF THE APPLICATION AND THE OUTSOURCING APPLICATION AND SERVICES. HSNS shall, at its own expense, promote the distribution of the Application and the Outsourcing Application and Services. Such promotion shall include, but not be limited to, advertising in trade publications, participating in appropriate trade shows and seminars, and directly soliciting orders for use of the Outsourcing Application and Outsourcing Services. HSNS shall distribute to all + + + + + +HSNS sales offices marketing materials for the Application, which may be provided by E.piphany to HSNS or that may be created by HSNS, in which case they shall be subject to E.piphany approval, including any brochures describing the functional nature of the Application, its features, and advantages. + +2.5. HSNS REPRESENTATIONS. HSNS shall make no representations concerning the functionality or performance characteristics of the Application, except as set forth in the printed Documentation or other materials furnished to HSNS by E.piphany. As appropriate, HSNS shall include references to E.piphany and the Application in all of its presentations and sales materials created during the term of this Agreement, which relate to the Application. + +2.6. FORECASTING. HSNS shall meet with E.piphany on a quarterly basis at a mutually agreed to date and time to discuss non-binding forecasts. HSNS shall provide E.piphany with a non-binding, rolling six-month forecast report in advance of the quarterly meeting. + + 1 2 + +2.7. UPDATES. HSNS agrees to provide E.piphany with notice of any changes in the Outsourcing Applications and Outsourcing Service. + +2.9. SUPPORT TO CUSTOMERS. HSNS shall be the Outsourcing Customer interface and shall provide all direct communications and services to and from HSNS's Customers with respect to all support, maintenance and warranty services. E.piphany shall have no obligation to provide support, maintenance or warranty services to Outsourcing Customers. + +2.10. TRAINING. HSNS shall take the training classes described on Exhibit C. + +3. PAYMENT + +3.1 FEES. HSNS shall pay E.piphany the fees specified in Exhibit A and generated by HSNS's use of the Application as specified in an applicable Annual Report. + +3.2 PAYMENT TERMS. Except as provided in Section 2.1 above, and unless otherwise agreed and specified in Exhibit A, all amounts due and owing by HSNS shall be paid within thirty (30) days from the date of E.piphany's invoice. Overdue payments shall accrue a late payment charge at the lesser of one and one half percent (1 1/2%) per month or the maximum rate allowed under applicable law. All payments made hereunder are non-cancelable and non-refundable. All fees are payable in U.S. dollars and shall be payable to E.piphany, Inc. by company check, or via wire transfer to the following account: Silicon Valley Bank - Santa Clara, ABA: 121140399, Account: 3300109833, Money Market. + +3.3 TAXES. HSNS is responsible for all taxes (including sales, use, property and value-added taxes), duties and customs fees concerning the Application and/or services, excluding taxes based on E.piphany's income. + +3.4 AUDIT. HSNS shall maintain complete and accurate records of its activities under this Agreement for at least two (2) years following termination of this Agreement. HSNS agrees to allow E.piphany, directly or indirectly, to audit HSNS's business records as kept by HSNS in its normal course of business to ensure compliance with the terms and conditions of this Agreement. If the audit reveals that HSNS has failed to comply with the terms of this Agreement, in addition to all other remedies available to E.piphany at law or equity, HSNS shall immediately reimburse E.piphany for any unpaid amounts due and the cost of the audit. + +4. WARRANTY + +4.1 BY E.PIPHANY. E.piphany warrants that for a period of one (1) year from Effective Date, the Application as used within the scope of this Agreement will perform substantially in accordance with the functions described in the Documentation. E.piphany warrants the Application media is free from material defects in materials and workmanship under normal use for ninety (90) days from the applicable Order Form. E.piphany further warrants that its Maintenance, training and Professional Services will be rendered consistent with generally accepted industry standards for a period of ninety (90) days from performance of such services. + +4.2 EXCLUSIVE REMEDIES. For any breach of the warranties contained in Section 4.1, HSNS's sole and exclusive remedy, and E.piphany's entire liability, shall be: (i) in the case of a nonconforming Application, to correct the nonconforming Application, provided that HSNS notifies E.piphany of the nonconformity within the warranty period and HSNS has installed all Updates and, if E.piphany is unable to do so, HSNS shall be entitled to terminate the Application license and recover the fees paid to E.piphany for such Application; (ii) in the case of defective media, to replace such defective media, provided that HSNS returns such defective media during the warranty period; (iii) in the case of infringing Application, the indemnity contained in Section 10.1 ("E.piphany Intellectual Property Indemnify") and (iv) in the case of services to which the breach of warranty relate, the correction of defective work so as to comply with generally accepted industry standards. If E.piphany is unable to perform such services as warranted, HSNS shall be entitled to recover the fees paid to E.piphany for the unsatisfactory services. This limitation of liability applies notwithstanding any failure of the essential purpose of the exclusive remedies. + +4.3 DISCLAIMER. THE WARRANTIES SET FORTH IN SECTION 4.1 ARE EXCLUSIVE AND IN LIEU OF AND E.PIPHANY DISCLAIMS ALL OTHER WARRANTIES, WHETHER EXPRESS, STATUTORY OR IMPLIED, INCLUDING ANY WARRANTIES OF MERCHANTABILITY, TITLE OR FITNESS FOR A PARTICULAR PURPOSE. E.PIPHANY DOES NOT WARRANT THAT THE APPLICATION WILL OPERATE IN COMBINATIONS OTHER THAN AS SPECIFIED IN THE DOCUMENTATION OR THAT THE + + + + + +OPERATION OF THE APPLICATION WILL BE UNINTERRUPTED OR ERROR-FREE. PRE-PRODUCTION RELEASES OF APPLICATIONS OR COMPUTER-BASED TRAINING PRODUCTS ARE DISTRIBUTED "AS-IS." + +5. MAINTENANCE + +5.1 FOR HSNS UNDER LICENSES. E.piphany will provide the Maintenance described below, provided HSNS remains a compliant subscriber to such Maintenance and has paid all monies due therefor. Upon reasonable notice, E.piphany reserves the right to modify the terms and conditions of Maintenance, provided that any such modification will not substantially diminish the level of Maintenance that HSNS is then currently receiving. + +5.2 ERROR CORRECTION. E.piphany shall use reasonable efforts to provide workarounds for, and to correct reproducible programming errors in, the Application attributable to E.piphany with a level of effort commensurate with the severity of such errors and in accordance with the terms of Section 5.3 ("Response Times"). Upon identification of any programming error, HSNS shall notify E.piphany of such error and shall provide E.piphany with information sufficient to locate and duplicate the error. + +5.3 RESPONSE TIMES. PRIORITY 1: Response in under fifteen (15) minutes for instances in which the Application is down (product is unusable resulting in total disruption of use or outage of the Application). PRIORITY 2: Response in under one (1) hour during technical support desk hours for a major feature or function failure, which results in the operation of the Application being restricted. PRIORITY 3: Response in under four (4) hours during technical support desk hours for a minor feature or function failure which results in the Application not working as described in the Documentation and with minor impact on usage. PRIORITY 4: Response in under eight (8) hours during technical support desk hours for a minor problem or feature request that does not impact usability of the Application. In each instance, E.piphany will, after the initial response, within a time frame mutually agreed upon by the parties, provide HSNS with an action plan for resolution, if possible, of the error. Priority 4 errors may, in E.piphany's + + 2 3 + +discretion, be corrected by E.piphany in the next release of the Application. + +5.4 SUPPORT. DESK. E.piphany allows for unlimited calls to its technical support desk by the HSNS personnel designated under Section 5.7 ("HSNS Responsibilities.") The technical support desk hours of operation are from 7:00 a.m. until 6:00 p.m. Pacific Time, Monday through Friday except holidays. During the off hours, the technical support desk can be reached via pager, twenty four (24) hours a day for Priority 1 errors. + +5.5 UPDATES. E.piphany will, from time to time, provide to HSNS all applicable Updates to the Application, that are commercially released by E.piphany during the term of this Agreement. + +5.6 HSNS'S RESPONSIBILITIES. As a condition to the provision of workarounds and error corrections, HSNS will (i) appoint two (2) employees to serve as primary contacts between HSNS and E.piphany, and will ensure that HSNS's support inquiries are initiated and handled through these contacts; (ii) provide E.piphany with reasonable access to all necessary personnel to provide information regarding errors or problems reported by HSNS; and (iii) provide E.piphany with Remote Access, subject to HSNS's consent. + +5.7 EXCLUSIONS. E.piphany shall not be required to provide workarounds or error corrections relating to problems resulting from (i) HSNS's failure to implement all Updates to the Application which are provided under this Agreement; (ii) any alterations of, or additions to, the Application performed by parties other than E.piphany; (iii) any previous or earlier versions of the Application except for the immediately prior version of the Application; (iv) any request for additional work not falling within the scope of E.piphany's Maintenance outlined in this Section 5; or (v) interconnection of the Application with hardware or Application products not supplied by E.piphany. + +5.8 SECONDARY SUPPORT TO HSNS. In the event HSNS is unable to resolve errors identified by Outsourcing Customers with respect to the Application, E.piphany shall provide Secondary Support services to HSNS at the fee set forth on Exhibit A. For the purposes of this Agreement, "SECONDARY SUPPORT SERVICES" shall mean: (a) using reasonable efforts to modify the Application to correct, fix, or circumvent errors, and modifying Documentation, as E.piphany shall deem appropriate, to respond to reported errors; (b) providing technical and functional improvements to the Application including patches to errors, changes, modifications, enhancements, and Updates, as they generally become available; and (c) providing technical support services for the Application between the hours of 7:00 a.m. to 6:00 p.m. (Pacific Time), Monday through Friday. + +6. PROFESSIONAL SERVICES + +6.1 SERVICES. E.piphany may from time to time perform Professional Services as may be agreed upon by the parties in an Order Form. + +6.2 FEES, EXPENSES AND INVOICING. HSNS shall pay E.piphany the fees set forth in the applicable Order Form, together with reimbursement for all actual, reasonable travel and living expenses incurred by E.piphany in rendering Professional Services. E.piphany will invoice HSNS on a monthly basis for Professional Services rendered and for any applicable expense reimbursement. All Professional Services not otherwise specified in the Order Form shall be provided on a time and materials basis. + + + + + +6.3 PERFORMANCE STANDARDS. E.piphany shall perform Professional Services in a timely and competent manner consistent with generally acceptable industry standards. Upon reasonable notice to HSNS, E.piphany may substitute or withdraw personnel rendering Professional Services. + +6.4 ACCEPTANCE. Each Deliverable shall be deemed accepted upon the earlier of: (i) receipt of written notice of acceptance from HSNS, or (ii) ten (10) days after delivery of such Deliverable ("Acceptance Period"), unless HSNS provides E.piphany with a detailed list of material non-conformities during the Acceptance Period. If HSNS properly rejects a Deliverable, E.piphany will use reasonable commercial efforts to correct the material non-conformity specified in the notice. When it believes that it has made the necessary corrections, E.piphany will again deliver the Deliverable to HSNS and the acceptance/ rejection/correction process shall be reapplied until the Deliverable substantially complies with the requirements of the Statement of Work. + +6.5 CHANGE CONTROL. Any change to the scope of a project, any Deliverable, milestone or payment obligation contained in an Order Form (and/or the attached Statement of Work) shall be made only in writing and signed by authorized representatives of E.piphany and HSNS. Unless otherwise agreed by the parties in writing, E.piphany shall have no obligation to provide Professional Services (i) beyond the scope of matters expressly described in the Order Form (and attached Statement of Work); or (ii) which becomes necessary as a consequence of events beyond E.piphany's reasonable control. + +6.4 OWNERSHIP OF DELIVERABLES. HSNS acknowledges and agrees that any and all Deliverables shall be and remain the property of E.piphany. E.piphany grants HSNS a non-exclusive, non-transferable, non-sublicensable license to use such Deliverables solely for is internal use consistent with the terms of this Agreement. + +6.5 HSNS RESPONSIBILITIES. HSNS shall provide E.piphany with (i) one (1) designated contact for all questions and issues relating to Professional Services; (ii) access to HSNS's facilities and office support as may be reasonably requested by E.piphany; and (iii) the services of sufficiently qualified HSNS personnel as may be reasonably necessary to enable E.piphany to perform the Professional Services. + +7. TRAINING SERVICES + +7.1 TRAINING SERVICES. In consideration for payment of the fees and charges set forth in Exhibit A, E.piphany shall provide Training Services as set forth in Exhibit C. The training sessions will take place at E.piphany's facilities and E.piphany will supply all necessary equipment. HSNS shall be responsible for all travel and lodging expenses associated with attending the training session. + +7.2 ADDITIONAL TRAINING SERVICES. HSNS may, at its option and expense, attend additional E.piphany training courses, dependent upon space availability. Any additional training shall be provided at E.piphany's standard rates for such training, and will take place at E.piphany's facilities. HSNS shall be responsible for all travel and lodging expenses associated with attending the additional training sessions. + +8. PROPRIETARY RIGHTS + +8.1 E.PIPHANY OWNERSHIP. HSNS acknowledges that E.piphany retains all right, title and interest in the Application and any modifications thereto, including without limitation any + + 3 4 + +customization, enhancement, amendment or change to the Application. HSNS hereby assigns all right, title and interest in and to any customization, enhancement, amendment or changes made by or for HSNS pursuant to this Agreement, and hereby waives any and all moral rights that HSNS may retain in and to such customizations, enhancements, amendment and changes. The Application and any modifications are licensed pursuant to this Agreement to HSNS for use of the Application and any modifications thereto. HSNS hereby represents and warrants that the assignment of rights by HSNS in and to such modifications includes any right, title and interest in and to all modifications created by or for HSNS For avoidance of doubt, modification to the Application to be owned by E.piphany shall not include pre-existing HSNS intellectual property or intellectual property developed by HSNS without reference to E.piphany Confidential Information. All data created by HSNS using the Outsourcing Application shall be owned by HSNS. + +8.2. PROPRIETARY NOTICES. HSNS shall not remove any E.piphany trademark, copyright or other proprietary notices from any part of the Application or Documentation, and shall reproduce such notices on any copies of such materials made by HSNS. Moreover, HSNS shall consistently identify the Application as a managed application in the Outsourcing Services to existing and prospective Outsourcing Customers in the ordinary course of HSNS' business. + +8.3 USE. During the term of this Agreement, each party shall have the right to indicate to the public that HSNS is an authorized Outsourcing Service provider of E.piphany's Application. HSNS shall use E.piphany's Trademarks solely for purposes of advertisement, promotion, and sale of the Application in conjunction with the Outsourcing Applications and Services and for no other purposes. Either party shall use the other party's Trademarks in accordance with the guidelines established by the other party from time to time. Nothing herein shall grant to either party any right, title or interest in the other party's Trademarks. At no time shall either party use any of the other party's Trademarks in any manner likely to confuse, mislead, or deceive the public, or in any way that is + + + + + +injurious to&sbsp;the other party's reputation. At no time during or after the term of this Agreement shall either party challenge or assist others to challenge the other party's Trademarks or the registration thereof or attempt to register any trademarks, marks or trade names confusingly similar to those of the other party. + +8.4. APPROVALS. Each party shall allow the other to review all press announcements, press releases, marketing materials, HSNS' co-branded or E.piphany branded screens, product brochures and any use of the other's Trademarks referencing the other party prior to their release to the public or the press, and shall incorporate all changes that the other may reasonably request to ensure correct usage of their trademarks and accuracy of content. A party's failure to respond to the submission of material for approval with any recommended changes within three (3) business days shall be deemed an approval of the submission. + +9. CONFIDENTIALITY + +9.1 CONFIDENTIAL INFORMATION. By virtue of this Agreement, each party may have access to information that is confidential to the other party. "Confidential Information" shall consist of the Application, Documentation, the terms and pricing under this Agreement, and all information clearly identified as confidential at the time of disclosure (or, in the case of information disclosed orally, within thirty (30) days of the date of disclosure). Confidential Information shall not include information that: (i) is or becomes a part of the public domain through no act or omission of the other party; (ii) was in the other party's lawful possession prior to the disclosure and had not been obtained by the other party either directly or indirectly from the disclosing party; (iii) is lawfully disclosed to the other party by a third party without restriction on disclosure; or (iv) is independently developed by the other party. HSNS shall not disclose the results of any Application benchmark tests to any third party without E.piphany's prior written approval. The parties agree to hold each other's Confidential Information in confidence for a period of five (5) years after disclosure of the Confidential Information or for a period of two (2) years after termination of this Agreement, whichever is earlier. The parties agree, unless required by law (in which event, the receiving party will notify the disclosing party of such requirement in sufficient time for the disclosing party to seek a protective order or take similar action), not to make each other's Confidential Information available in any form to any third party for any purpose, except that access to and the use of Confidential Information may be provided to those third parties that: (i) provide services to the recipient of Confidential Information; (ii) have a need to use and access such Confidential Information in providing such services; and (iii) are bound by an obligation of confidentiality at least as restrictive as the confidentiality restrictions of this Agreement. Each party agrees to take all reasonable steps required to ensure that Confidential Information is not disclosed or distributed by its employees or agents in violation of the terms of this Agreement. + +10. INDEMNITY + +10.1 E.PIPHANY INTELLECTUAL PROPERTY INDEMNITY. E.piphany will defend or, at its option, settle a claim brought against HSNS that the Application, as used within the scope of this Agreement, infringes a U.S. copyright, patent, trademark or trade secret, and indemnify HSNS against all damages and costs, including reasonable attorneys' fees, that may be assessed in any such claim, provided that: (i) HSNS notifies E.piphany in writing within thirty (30) days of the claim; (ii) E.piphany has sole control of the defense and all related settlement negotiations; and (iii) HSNS provides E.piphany with reasonable assistance, information and authority necessary to perform E.piphany's obligations under this Section. E.piphany will reimburse HSNS's reasonable out-of-pocket expenses incurred in providing such assistance. E.piphany shall have no liability for any claim of infringement based on use of a superseded or altered release of the Application if the infringement would have been avoided by the use of a current unaltered release of the Application which E.piphany provides to HSNS without charge, or any combination of the Application with materials not provided or recommended by E.piphany. If the Application is held by a court of competent jurisdiction or believed by E.piphany to infringe, E.piphany shall have the option, at its expense, to (i) modify the Application&sbsp;to be non-infringing; or (ii) obtain for HSNS a license to continue using the Application. If E.piphany determines that it is not commercially reasonable to perform either of the above options, then E.piphany may terminate the license for such Application and refund the license fees paid for the Application, prorated as depreciated over five (5) years on a straight-line basis from the Effective Date. + +10.2 GENERAL INDEMNITY. HSNS hereby agrees to indemnify, defend and hold harmless E.piphany, and its officers, + + 4 5 + +directors and partners (each, an "Indemnified Party") against any and all claims, demands, causes of action, damages, costs, expenses, penalties, losses and liabilities (whether under a theory of negligence, strict liability, contract or otherwise) incurred or to be incurred by an Indemnified Party (including but not limited to costs of investigation and reasonable attorney and other third party fees and, to the extent permitted by law, fines, penalties and forfeitures in connection with any proceedings against the Indemnified Party) arising out of or resulting from (i) HSNS's providing or failure to provide Outsourcing Services, (ii) any representation, warranty or claim made by or on behalf of HSNS to any Outsourcing Customer, or (iii) Outsourcing Services infringement or alleged infringement of any copyright, trademark, trade secret, or other property rights of any third parties arising in any jurisdiction throughout the world. E.piphany shall (i) notify HSNS in writing within a reasonable time of becoming aware of such claim, suit or proceeding, (ii) give + + + + + +HSNS the right to control and direct the investigation, preparation, defense and settlement of any claim, suit or proceeding (provided that HSNS shall not enter into any settlement without E.piphany's prior written consent); and (iii) provide reasonably requested assistance and cooperation for the defense of same. + +10.3 LIMITATION ON INDEMNITY. Notwithstanding the provisions of Section 10.1 ("E.piphany Intellectual Property Indemnity"), E.piphany assumes no liability for infringement claims arising from (i) the combination of the Application with products not provided by E.piphany, (ii) any modification to the Application unless such modification was made by E.piphany. Either party shall be solely responsible for, and shall indemnify and hold free and harmless the other party for, any and all claims, damages or lawsuits (including reasonable legal fees) arising from the tortious or grossly negligent acts of the indemnifying party's employees, agents or Contractors. THE PROVISIONS OF SECTION 10.1 ("E.PIPHANY INTELLECTUAL PROPERTY INDEMNITY") STATE THE ENTIRE LIABILITY AND OBLIGATION OF E.PIPHANY, AND THE EXCLUSIVE REMEDY OF HSNS, WITH RESPECT TO ANY ACTUAL OR ALLEGED INFRINGEMENT OF ANY PATENT, COPYRIGHT, TRADE SECRET, TRADEMARK OR OTHER INTELLECTUAL PROPERTY RIGHT BY THE APPLICATION OR ANY PART THEREOF. THIS LIMITATION OF LIABILITY APPLIES NOTWITHSTANDING ANY FAILURE OF THE ESSENTIAL PURPOSE OF THE EXCLUSIVE REMEDIES. + +11. LIMITATION OF LIABILITY. IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES, OR DAMAGES FOR LOSS OF PROFITS, REVENUE, DATA OR USE, INCURRED BY THE OTHER PARTY OR ANY THIRD PARTY, WHETHER IN AN ACTION IN CONTRACT OR TORT, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. IN NO EVENT SHALL E.PIPHANY'S LIABILITY HEREUNDER EXCEED THE SUM TOTAL OF PAYMENTS MADE BY HSNS UNDER THE INITIAL TERM OF THIS AGREEMENT. THE PROVISIONS OF THIS AGREEMENT ALLOCATE THE RISKS BETWEEN E.PIPHANY AND HSNS AND E.PIPHANY'S PRICING REFLECTS THIS ALLOCATION TO WHICH THE PARTIES HAVE AGREED. THIS LIMITATION OF LIABILITY APPLIES NOTWITHSTANDING ANY FAILURE OF THE ESSENTIAL PURPOSE OF THE EXCLUSIVE REMEDIES. + +12. TERM AND TERMINATION + +12.1 TERM AND TERMINATION. This Agreement shall continue for a term set forth in Exhibit B, and may be renewed for successive one (1) year terms pursuant to mutual written agreement of the parties, unless terminated earlier pursuant to this Section 12.1. Upon prior written notice, either party may terminate this Agreement if the other party becomes insolvent, ceases doing business in the regular course, files a petition in bankruptcy or is subject to the filing of an involuntary petition for bankruptcy which is not rescinded within a period of sixty (60) days, or fails to cure a material breach of any term or condition of this Agreement within thirty (30) days of written notice specifying such breach. + +12.2 RETURN OF MATERIALS. Upon termination of this Agreement for any reason, HSNS shall (except as provided in Section 12.3 ("Effect of Termination") immediately discontinue use of the Application and within ten (10) days certify in writing to E.piphany that all copies of the Application, in whole or in part, in any form, have either been returned to E.piphany or destroyed in accordance with E.piphany's instructions. + +12.3 EFFECT OF TERMINATION. Upon termination of this Agreement, other than by reason of a termination for material breach due to a breach by HSNS pursuant to Section 12.1 ("Term and Termination"), (i) HSNS shall have the right to access and use the Application solely to provide Outsourcing Services, but only to the extent necessary to provide Outsourcing Services through the remaining unexpired term of an applicable Agreement with the Outsourcing Customer (without renewal following the termination of this Agreement), but in any extent not beyond twelve (12) months from the effective date of termination. Upon termination of this Agreement, E.piphany's obligation to provide Maintenance to HSNS shall terminate, and E.piphany may, in its sole discretion, provide Maintenance to HSNS and/or the Outsourcing Customers pursuant to terms upon which the parties may agree in writing. Termination of this Agreement shall not relieve HSNS's obligation to pay all fees that are owed by HSNS under this Agreement or any Order Form. All payments made by HSNS to E.piphany hereunder are non-refundable. + +12.4 LIMITATION ON LIABILITY. In the event of termination by either party in accordance with any of the provisions of this Agreement, neither party shall be liable to the other, because of such termination, for compensation, reimbursement or damages on account of the loss of prospective profits or anticipated sales or on account of expenditures, inventory, investments, leases or commitments in connection with the business or goodwill of E.piphany or HSNS. + +12.5 SURVIVAL. The provisions of Sections 1.4, 3.1, 3.4, 4.3, 6.2, 6.4, 8, 9, 11, 12, 13 and 14 shall survive any termination or expiration of this Agreement. All other rights and licenses granted herein will cease upon termination. + +13. GENERAL + +This Agreement, and all matters arising out of or relating to this Agreement, shall be governed by the laws of the State of California. Any legal action or proceeding relating to this Agreement shall be instituted in a state or federal court in San Francisco or San Mateo County, California, and each party hereby submits to the personal jurisdiction of such courts. Except for actions for nonpayment of breach of E.piphany's proprietary rights in the Application, no action, regardless of form, arising out of this Agreement may be brought by either party more than two years after the cause of action has accrued. Neither party may + + 5 6 + +assign or otherwise transfer this Agreement to any person or entity without the + + + + + +other's written consent, such consent not to be unreasonably withheld or delayed; provided that the withholding of consent of assignment to a competitor of the other party shall be deemed reasonable. Any assignment in derogation of the foregoing shall be null and void. At E.piphany's written request, not more frequently than annually, HSNS shall furnish E.piphany with a signed certification verifying that the Application is being used pursuant to the provisions of this Agreement and applicable Order Forms. All notices, including notices of address change, required to be sent hereunder shall be in writing and shall be deemed to have been given when mailed by first class mail to the applicable address listed in the relevant Order Form. To expedite order processing, HSNS agrees that E.piphany may treat documents faxed by HSNS to E.piphany as original documents; nevertheless, either party may require the other to exchange original signed documents. If any provision of this Agreement is held to be invalid or unenforceable, the remaining provisions of this Agreement will remain in full force. The waiver by either party of any default of breach of this Agreement shall not constitute a waiver of any other or subsequent default or breach. Neither party shall be liable to the other for any delay or failure to perform any obligation under this Agreement if the delay or failure is due to circumstances beyond the reasonable control of the non-performing party. This Agreement constitutes the complete agreement between the parties and supercedes all prior or contemporaneous agreements or representations, written or oral, concerning the subject matter of this Agreement. IT IS EXPRESSLY AGREED THAT THE TERMS OF THIS AGREEMENT AND ANY ORDER FORM SHALL SUPERSEDE THE TERMS IN ANY HSNS PURCHASE ORDER OR OTHER ORDERING DOCUMENT. This Agreement may not be modified or amended except in writing signed by a duly authorized representative of each party; no other act, document, usage or custom shall be deemed to amend or modify this Agreement. + +14. DEFINITIONS + +"APPLICATION" means the English version of the E.piphany Application programs listed in Exhibit A, in object code format, any accompanying Documentation, and any Updates (as defined in Section 5.5 ("Updates"), only if and when generally commercially available as part of the Maintenance Services provided pursuant to Section 5 ("Maintenance Services"). + +"CONCURRENT USERS" means, collectively, the end-users who are employees and/or contractors of: (a) HSNS, who are permitted simultaneous access to, and use of, the Application for the purpose of providing Outsourcing Services, and (b) Outsourcing Customers, who are permitted simultaneous access to and use of the Application for the purpose of using the Outsourcing Services. + +"DESIGNATED SYSTEM" means the computer system located in the U.S. on which the Application will run and which is identified on Exhibit A. + +"DELIVERABLE" means deliverables provided as part of Professional Services, including, without limitation, any modification or enhancement to the Application, and any ideas, know-how or techniques relating thereto. + +"DOCUMENTATION" means the then-current technical publications, as amended from time to time, relating to the use of the Application, such as reference, user and installation guides, in electronic or hard copy format, made available with the Application. + +"INTERACTION" means any inbound electronic communication, transmission or interaction with the Application (over any channel of communication including email, chat, fax, CTI or chat) initiated by or on behalf of any person other than an Outsourcing Customer User. Subject to the foregoing, an Interaction shall not include an instance in which the Application accesses information or data from back-end third party Application operating in combination with the Application. + +"MAINTENANCE" means the technical support described in Section 5 above that E.piphany provides under this Agreement. + +"MARKET" means the targeted business set forth in Exhibit B + +"ORDER FORM" means the document in the form of Exhibit A, by which Applications, Maintenance or Professional Services can be ordered under this Agreement. + +"OUTSOURCING APPLICATION" means the application specific use of the Application described in Exhibit B. + +"OUTSOURCING CUSTOMER" means each third party end-user customer of HSNS who is a party to a then-current HSNS Subscription Agreement. + +"OUTSOURCING CUSTOMER(S)" means one of Outsourcing Customer's customers in the ordinary course of business, to whom Outsourcing Customer provides a comprehensive solution through use of the Outsourcing Services. + +"OUTSOURCING CUSTOMER USER" means a named person who is an officer, employee, agent, or other person authorized by HSNS to receive Outsourcing Application Services from HSNS for an Outsourcing Customer. + +"OUTSOURCING COMPANY(IES)" means a company that employs HSNS to support its internal business purposes through Concurrent Users' use of the Application. + +"OUTSOURCING SERVICES" means HSNS's provision of a comprehensive customer relationship management solution in an outsourced environment as more particularly described in Exhibit B, where: (i) Concurrent Users' use of the Application solely for the purpose of supporting Outsourcing Customers, and (ii) where the Application constitutes no more than ten percent (10%) of such Outsourcing Services. + +"REMOTE ACCESS" means direct connection to the Designated System via the Internet, via PPTP, direct TCP/IP or other such high-speed, point-to-point + + + + + +network access. + +"SCOPE OF USE" means the limitations on HSNS's use of the Application, specifically, the numbers of Concurrent Users and Interactions set forth in Exhibit A. + +"STATEMENT OF WORK" means a written document setting forth the scope of implementation and/or consulting services, the anticipated schedule, deliverables, if any, and fee structure. + +"TERRITORY" means the geographic area set forth in Exhibit B. + +(intentionally left blank) + + 6 7 + +"UPDATE" means any published (i) new release of the Application that is not designated by E.piphany as a new product for which it charges separately; and/or (ii) error correction or functional enhancement to the Application. E.piphany shall determine, in its sole discretion, when it shall make Updates available to HSNS, provided that any such Update shall be made available to HSNS no later than thirty (30) days following its general commercial release. + +IN WITNESS WHEREOF, the parties by their duly authorized representatives have executed this Agreement as of the date set forth above. + +E.PIPHANY, INC. HIGH SPEED NET SOLUTIONS, INC. + +SIGNATURE: /s/ Karen Richardson SIGNATURE: /s/ Andrew Fox -------------------- --------------------- PRINT NAME: Karen Richardson PRINT NAME: Andrew Fox -------------------- --------------------- + +TITLE: EVP Sales TITLE: President & CEO -------------------- --------------------- + + 7 8 + + EXHIBIT A ORDER FORM + +This Order Form ("Order Form") to the Outsourcing Agreement by and between E.piphany, Inc. ("E.piphany") and High Speed Net Solutions, Inc. ("HSNS" ) dated July __, 2000 ("Agreement"). Capitalized terms used herein shall have the same meaning ascribed to them in the Agreement. It is expressly agreed that the terms of the Agreement and the Order Form shall supersede the terms in any HSNS purchase order or other ordering document. + +1.0 ORDER FORM EFFECTIVE DATE: JULY __, 2000. + +2.0 LICENSED APPLICATIONS. + + CURRENT E.4 TIER 4 E-MAILER APPLICATION + + CURRENT E.4 TIER 3 CAMPAIGN MANAGEMENT SYSTEM APPLICATION , EXCLUSIVE OF E.PIPHANY'S TIER 2 (DISTRIBUTED DATABASE MARKETING) APPLICATIONS. + + CURRENT E.4 TIER 1 (REPORTING AND ANALYSIS) ROWS AND COLUMNS, SOLELY AS REQUIRED FOR THE OPERATION OF THE EMAILER APPLICATION AND CAMPAIGN MANAGEMENT APPLICATION. + +3.0 DEVELOPMENT LICENSE FEES AND SCOPE OF USE. In consideration of the grant of rights and licenses set forth in this Agreement, HSNS shall pay the following fees for the following scope of use throughout the term of this Agreement: + + a. DEVELOPMENT LICENSING FEES. HSNS will pay to E.piphany a development license fee of $230,500 due and payable as follows: + + $ 115,250.00 Net thirty (30) days from the Effective Date of this Agreement. + + $ 115,250.00 Net ninety (90) days from the Effective Date of this Agreement. + +CAMPAIGN MANAGEMENT & EMAILER APPLICATIONS (NT PLATFORM ONLY) YEAR 1 YEAR 2 YEAR 3 TOTAL + +Development License Fees $ 212,500 $212,500 Annual Priority Maintenance Fees @ 22% of net $ 46,750 $46,750 $46,750 $140,250 ---------------------------------------------------------------- Total $259,250 $46,750 $46,750 $352,750 + + + + + +Net Development User Fees (each) $ 3,000 $ 3,000 Annual Priority Maintenance Fees @ 22% of net $ 660 $ 660 $ 660 $ 1,980 ---------------------------------------------------------------- Total $ 3,660 $ 660 $ 660 $ 4,980 + +Number of Users 6 6 Total Users Fees $ 18,000 $ 18,000 Annual Priority Maintenance Fees @ 22% $ 3,960 $ 3,960 $ 3,960 $ 11,880 ---------------------------------------------------------------- Total $ 21,960 $ 3,960 $ 3,960 $ 29,880 + +TOTAL DEVELOPMENT LICENSE AND USER FEES $ 281,210 $ 50,710 $ 50,710 $ 382,630 + + b. MINIMUM SELL THROUGH REVENUE COMMITMENT: HSNS will pay to E.piphany a minimum sell through revenue commitment of $750,000.00 ("MINIMUM SELL-THROUGH COMMITMENT") during the initial three year term of this Agreement on the dates and in the minimum amounts ("Minimum Quarterly Payments") as follows. + + 8 9 + +-------------------------------------- ---------------------------------------- ---------------------------------------- Minimum Quarterly Minimum Quarterly Minimum Quarterly Payment Due Date Payment Payment Due Date Payment Payment Due Date Payment -------------------------------------- ---------------------------------------- ---------------------------------------- October 1, 2000 $62,500 October 1, 2001 $62,500 October 1, 2002 $62,500 + +January 1, 2001 $62,500 January 1, 2002 $62,500 January 1, 2003 $62,500 + +April 1, 2001 $62,500 April 1, 2002 $62,500 April 1, 2003 $62,500 + +July 1, 2001 $62,500 July 1, 2002 $62,500 July 1, 2003 $62,500 + +-------------------------------------- ---------------------------------------- ---------------------------------------- Year 1 - TOTAL $250,000.00 Year 2 - TOTAL $250,000.00 Year 3 - TOTAL $250,000.00 -------------------------------------- ---------------------------------------- ---------------------------------------- + +4.0. ADDITIONAL FEES + + 4.1 INCREASES TO THE MINIMUM SELL THROUGH COMMITMENT. The Minimum Sell Through Commitment will increase in Years 2 and 3 of this Agreement as follows: + + YEAR 2 - Annual minimum payment ($250,000.00), plus a percentage increase in the annual minimum payment equal to 50% of the difference between the number of emails sent by HSNS on behalf of Outsourcing Customers in the first six months of Year 1 and the second six months of Year 1, up to a maximum Year 2 payment of $375,000.00. Payment is due and payable in equal quarterly installments ("Year 2 Quarterly Payments"). On the thirtieth (30th) day after the end of Year 1, HSNS shall submit a report to E.piphany (in a format provided by E.piphany, but reasonably acceptable to HSNS) listing the total number of emails distributed by Outsourcing Customer for the first and second six months of Year 1. Year 2 Quarterly Payments will be due and payable thereafter on July 1, 2001; October 1, 2001; January 1, 2002; April 1, 2002. All reporting and payment requirements under this Section 4.1 shall be subject to Section 3.4 of the HSNS Agreement. + + YEAR 3 - Annual minimum payment ($250,000), plus a percentage increase in the annual minimum payment equal to 50% of the difference between the number of emails sent by HSNS on behalf of Outsourcing Customers in Year 1 and Year 2, up to a maximum Year 3 payment of $500,000.00. Payment is due and payable in equal quarterly installments ("Year 3 Quarterly Payments.") On the thirtieth (30th) day after the end of Year 2, HSNS shall submit a report to E.piphany (in a format provided by E.piphany, but reasonably acceptable to HSNS) listing the total number of emails distributed by Outsourcing Customer for Years 1 and 2. Year 3 Quarterly Payments will be due and payable thereafter on July 1, 2002; October 1, 2002; January 1, 2003; April 1, 2003. All reporting and payment requirements under this Section 4.1 shall be subject to Section 3.4 of the HSNS Agreement. + + 4.2 LEAD SHARING FEES: HSNS agrees to pay E.piphany an additional $0.005 per email for any email distributed by HSNS as a result of any deal it closes that either results from a lead generated by E.piphany or in which E.piphany assisted prior to closing for the first year after the deal closes. Lead sharing activities include leads that HSNS obtains from participation at E.piphany vendor shows or participation in an E.piphany booth at E.piphany specified trade shows. + + HSNS agrees to pay lead sharing fees on a quarterly basis for the first year of any HSNS engagement resulting from an E.piphany lead. On the thirtieth (30th) day after the end of + + + + + + each quarter, HSNS shall submit a report to E.piphany (in a format provided by E.piphany, but reasonably acceptable to HSNS) listing (i) the total number of emails distributed for the quarter; along with payment for the quarterly lead sharing fees owed to E.piphany. All reporting and payment requirements under this Section 4.2 shall be subject to Section 3.4 of the HSNS Agreement. + +5.0. TERM. This Agreement shall have an initial term of three (3) years. + +6.0 ANNUAL MAINTENANCE FEES + + YEAR 1 $50,710.00 due and payable in four (4) equal installments of $12,677.50 as follows: + + Net thirty days from the Effective Date of this Agreement. + + October 1, 2000. + + 9 10 + + January 1, 2001. April 1, 2001 + + YEAR 2 $50,710.00 due and payable in four (4) equal quarterly installments of $12,677.50 on: July 1, 2001, October 1, 2001 January 1, 2002 and April 1, 2002. + + YEAR 3 $50,710.00 due and payable in four (4) equal quarterly installments of $12,677.50 on: July 1, 2002, October 1, 2002, January 1, 2003, and April 1, 2003. + +7. DESIGNATED SYSTEM: NT-- 434 Fayetteville Street, Suite 600, Raleigh, NC 27601. + +8. NOTICES: + +------------------------------------------ ------------------------------------- HSNS CONTACT E.PIPHANY CONTACT Theodore Harper, Esq. General Counsel Kilpatrick and Stockton LLP E.piphany, Inc. 3737 Glenwood Avenue, Suite 400 1900 S. Norfolk St., Suite 310 Raleigh, NC 27612 San Mateo, CA 94403 919/ 420-1709 (phone) 650/356-3800 (phone) email: tharper@kilstock.com 650/356-3907 (fax) ------------------------------------------ ------------------------------------- + +------------------------------------------ ------------------------------------- HSNS TECHNICAL CONTACT E.PIPHANY TECHNICAL CONTACT Harris Glover Director, Technical Support VP of High Speed Net Solutions, Inc. E.piphany, Inc. 434 Fayetteville Street, Suite 2120 1900 S. Norfolk St., Suite 310 Raleigh, NC 27601 San Mateo, CA 94403 919/807-5690 (phone) 650/356-3800 (phone) 919/807-0508 (fax) 650/356-3801 (fax) email: Harris.glover@hsns.com ------------------------------------------ ------------------------------------- + +6. HSNS BILLING INFORMATION: SHIPPING INFORMATION: + +BILLING ADDRESS: _ _ High Speed Net Solutions, Inc. SHIPPING ADDRESS: 434 Fayetteville Street, Suite 2120 Raleigh, NC 27601 + +BILLING CONTACT: ROBERT LOWREY, CFO SHIPPING CONTACT: TELEPHONE: _919/807-5690 TELEPHONE; EMAIL: MAILTO:__ROB.LOWREY@HSNS.COM EMAIL: FACSIMILE: 919/807-0508 FACSIMILE: + +AGREED BY: + +E.PIPHANY, INC. HIGH SPEED NET SOLUTIONS, INC. + +SIGNATURE: /s/ Karen Richardson SIGNATURE: /s/ Andrew Fox -------------------- ------------------ + +PRINT NAME: Karen Richardson PRINT NAME: Andrew Fox -------------------- ------------------ + +TITLE: EVP Sales TITLE: President & CEO -------------------- ------------------ + + 10 11 + + EXHIBIT B DESCRIPTION OF OUTSOURCING APPLICATION AND OUTSOURCING SERVICES TERRITORY AND MARKET + + + + + +OUTSOURCING APPLICATION TITLE AND DESCRIPTION: Outsourcing Application Title and Description: + +Rich Media Direct Rich Media Direct is an online direct marketing turnkey service that targets rich media advertisements to selected demographics/psychographics via Rich Media Direct delivery mechanisms. + +OUTSOURCING SERVICE TITLE AND DESCRIPTION: + +High Speed Rich Media Direct Service + +The Rich Media Direct service will take (a 15- or 30-second video advertisement) and target to selected 'opt-in' recipient list. The service will compress and package advertisements to provide a compelling advertisement. The High Speed Rich Media Direct Network provides customers dedicated bandwidth and a distributed infrastructure to efficiently distribute rich media advertisements to targeted audiences. In addition, the High Speed Rich Media Direct Service offers customers the following benefits: + +* 7x24 Service and Support + +* Content packaging and compression + +* Online tracking & reporting of campaigns + +* Customized media player GUI's for brand extension and hyperlinks + +* Online repeat campaign and list selection + +* Streaming services + +This service provides complete protection and privacy to your distribution list and all data collected during your campaign. + +HOSTED SYSTEMS: Microsoft NT Server + +MARKET: Persons or Entities who wish to use Rich Media Advertising Services + +TERRITORY: HSNS shall have rights under this Agreement to provide Outsourcing Application and Outsourcing Services to Outsourcing Customers globally without restriction contingent upon HSNS providing Outsourcing Services from the Designated System. HSNS shall submit quarterly reports to E.piphany listing the number of Outsourcing Customers located outside of the United States, by country and the number of emails sent on their behalf so that E.piphany can use such information to allocate sales revenue for the payment of commissions to its local sales representatives. + + 11 12 + +EXHIBIT C TRAINING AND SUPPORT + +A. TRAINING + + 1. SALES AND MARKETING TRAINING. Reseller must have a minimum of five (5) of its sales staff participate in the sales and marketing training in the first 6 months of this agreement. Sales and Marketing training will be available to Reseller at a rate of 25% off of E.piphany's list price. + + 2. PRE-SALES TECHNICAL TRAINING. Reseller must have a minimum of two (2) of its pre-sales technical staff participate in the pre-sales technical training in the first 6 months of this agreement. All pre-sales technical consultants must have appropriately configured hardware on which to load demonstration software at the time of such training. Pre-Sales Technical Training will be available to Reseller at a rate of 25% off of E.piphany's list price. + + 3. EXPENSES. For any sales and marketing training or any technical training provided by E.piphany to Reseller at any location other than E.piphany's San Mateo location, E.piphany shall bill Reseller and Reseller shall pay for any reasonable travel, lodging, and living expenses incurred by E.piphany for such training. All travel will be pre-approved by Reseller. + +B. ADDITIONAL MARKETING REQUIREMENTS FOR HSNSS + +1. Alliance Manager. Each party shall provide a single point of contact to maintain overall responsibility for the relationship between E.piphany and HSNS. The following are examples of responsibilities of the single point of contact that will be mutually agreed upon to by the parties within the first (30) days after the Effective Date of the Agreement: + + i. Business Plan Development + + ii. Coordination of Marketing Activities: E.piphany and HSNS agree to issue a joint press release. + + iii. Coordination of Sales Teams + + iv. Coordination of Engineering Teams + + E.piphany: ____________________________________ + + + + + + HSNS: ____________________________________ + + 12 \ No newline at end of file diff --git a/full_contract_txt/OFGBANCORP_03_28_2007-EX-10.23-OUTSOURCING AGREEMENT.txt b/full_contract_txt/OFGBANCORP_03_28_2007-EX-10.23-OUTSOURCING AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..9c19db6499a6004cf550df6c3c09cdbc30acf4cc --- /dev/null +++ b/full_contract_txt/OFGBANCORP_03_28_2007-EX-10.23-OUTSOURCING AGREEMENT.txt @@ -0,0 +1,1665 @@ +Exhibit 10.23 + +TECHNOLOGY OUTSOURCING AGREEMENT + +This Master Agreement is made as of the 26 day of January, 2007 (the "Effective Date"), by and between Oriental Financial Group Inc., a Puerto Rico financial holding company ("Customer"), and Metavante Corporation, a Wisconsin corporation ("Metavante"). + +Customer desires Metavante to provide to Customer the services and licenses as set forth in this Agreement and its amendments, and Metavante desires to provide such services and licenses to Customer, all as provided in this Agreement and its amendments. + +THEREFORE, in consideration of the payments to be made and services to be performed hereunder, upon the terms and subject to the conditions set forth in this Agreement and intending to be legally bound, the parties hereto agree as follows: + +Metavante shall provide to Customer and Customer shall receive from Metavante, all upon the terms and conditions set forth in this Agreement and Amendments, the Services and licenses specified. The term of this Agreement shall commence on the Effective Date and end on November 30, 2014 (the "Initial Term"). The parties also agree to use their best efforts to perform the Conversion(s) such that the Commencement Date occurs on or before November 5, 2007. + +As of the Effective Date, the parties acknowledge that this Agreement includes the following Schedules: + +Current Capabilities Schedule + +Conversion Plan Schedule + +Services and Charges Schedule + +Planned Enhancement and Interface Schedule + +Service Level Schedule + +Termination Fee Schedule + +Strategic Network Solution Schedule (To be added as mutually agreed by Customer and Metavante) + +MasterCard® SecureCode™ Service Participation Schedule + +As of the Effective Date, the parties acknowledge that Services and licenses will be provided for Customer and the Affiliates of Customer that are listed in Exhibit A, attached hereto. For purposes of this Agreement, the term "Customer" includes all Affiliates listed in Exhibit A, attached hereto. + +By signing below, the parties agree to the terms and conditions of this Agreement, and Customer appoints Metavante as: (1) Customer's attorney-in-fact to transmit files and information to the Internal Revenue Service ("IRS") and the Department of the Treasury of the Commonwealth of Puerto Rico (the "Department") and to take all appropriate actions in connection therewith and empowers Metavante to authorize the IRS and the Department to release information return documents supplied to the IRS and the Department by Metavante to states which participate in the "Combined Federal/State Program"; and (2) Customer's agent to sign on Customer's behalf the Affidavit required by the Form 4804, or any successor form or any other form or document which may be required by the Department. Customer acknowledges that Metavante's execution of the Form 4804 Affidavit or the equivalent form with the Department on Customer's behalf does not relieve Customer of responsibility to provide accurate TINs or liability for any penalties which may be assessed for failure to comply with TIN requirements. + +IN WITNESS WHEREOF, the parties have caused this Agreement to be executed on their behalf as of the date first above written. METAVANTE CORPORATION ORIENTAL FINANCIAL GROUP INC. 4900 W. Brown Deer Road 997 San Roberto Street Brown Deer, WI 53223 Tenth Floor San Juan, PR 00926 By: /s/ Paul T. Danola By: /s/ José Rafael Fernández + +Name: Paul T. Danola Name: José Rafael Fernández Title: Senior Executive Vice President Metavante Corporation Title: President and Chief Executive Officer + + By: /s/ James R. Geschke + +Name: James R. Geschke + +Title: Executive Vice President + + Financial Technology Solutions + + + + + + + +TERMS AND CONDITIONS + +1. CONSTRUCTION + +1.1. Definitions. Capitalized terms shall have the meaning ascribed to them in Article 18 of this Agreement. + +1.2. References. In this Agreement, references and mention of the word "includes" and "including" shall mean "includes, without limitation" and "including, without limitation," as applicable, and the word "any" shall mean "any or all". Headings in this Agreement are for reference purposes only and shall not affect the interpretation or meaning of this Agreement. + +1.3. Interpretation. The terms and conditions of this Agreement and all schedules attached hereto are incorporated herein and deemed part of this Agreement. In the event of a conflict between the general terms and conditions and the terms of any schedules or exhibits attached hereto, the terms of the schedules and exhibits shall prevail and control the interpretation of the Agreement with respect to the subject matter of the applicable schedules and/or exhibits. The schedules and exhibits together with the general terms and conditions shall be interpreted as a single document. This Agreement may be executed simultaneously in any number of counterparts, each of which shall be deemed an original, but all of which together constitute one and the same agreement. + +1.4. Affiliates. Customer agrees that it is responsible for ensuring compliance with this Agreement by its Affiliates. Customer agrees to be responsible for the submission of its Affiliates' data to Metavante for processing and for the transmission to Customer's Affiliates of such data processed by and received from Metavante. Customer agrees to pay any and all fees owed under this Agreement for Services rendered to its Affiliates. The term Affiliates also includes other entities that become affiliates of Customer after the date of this Agreement, due to a reorganization or restructuring of Customer's business, which do not cause an increase in the volume of Customer's transactions. + +2. TERM + +2.1. Duration. Unless this Agreement has been earlier terminated, Metavante shall provide a written renewal notice to Customer at least twelve (12) months prior to the expiration of the Initial Term (the "Renewal Notice"). Unless Customer notifies Metavante of its intent not to renew this Agreement in writing within a period of three (3) months following the Renewal Notice, this Agreement shall automatically renew at the end of the Initial Term on the same terms (including pricing terms) for one (1) twelve-month period. Upon expiration of such twelve (12) -month extension, this Agreement shall expire unless renewed in writing by the parties, provided, however, that Metavante may, but has no obligation to, continue to provide all or any portion of the Services thereafter on a month-to-month basis subject to these Terms and Conditions and Metavante's then-current standard fees and charges. + +2.2. Termination Assistance. Following the expiration or early termination of this Agreement, Metavante shall provide to Customer the Customer Data in the format in which it exists on Metavante's systems (the "Data Tapes"), in accordance with Metavante's then-current standard prices for the delivery media. In addition, Metavante agrees to provide to Customer, at Customer's expense, all necessary assistance to facilitate the orderly transition of Services to Customer or its designee ("Termination Assistance"). As part of the Termination Assistance, Metavante shall assist Customer to develop a plan for the transition of all Services then being performed by Metavante under this Agreement, from Metavante to Customer or Customer's designee, on a reasonable schedule developed jointly by Metavante and Customer. Prior to providing any Termination Assistance, Metavante shall deliver to Customer a good-faith estimate of all such Expenses and charges, including charges for custom programming services. Customer understands and agrees that all Expenses and charges for Termination Assistance shall be computed in accordance with Metavante's then-current standard prices for such products, materials, and services. Customer shall pay for the Customer Data and any Termination Assistance in advance of Metavante providing such data or assistance. Nothing contained herein shall obligate Customer to receive Termination Assistance from Metavante. In the event this Agreement is terminated by Customer pursuant to Section 8.2, Metavante will provide Customer with one (1) set of Data Tapes without charge. + +3. LICENSES + +3.1. Customer Marks. Metavante is authorized to use Customer's service marks and trademarks solely if necessary to perform the Services and solely for the purpose of providing the Services to Customer. Any use of Customer's marks by Metavante shall be subject to Customer's prior written approval, which shall not be unreasonably withheld by Customer + +3.2. Incidental Software License. Customer (a) will install and operate copies of certain Metavante-supplied software, if any, that is identified in the Services and Charges Schedule as required for Customer to access or receive certain of the Initial Services, (b) may access certain software that Metavante will make available on the internet, and (c) may be provided with copies of software for demonstration purposes (collectively, the "Incidental Software"). Metavante hereby grants to Customer a personal, nonexclusive, and nontransferable license and right, for the duration of this Agreement, to use the Incidental Software solely in accordance with the applicable Documentation and for no other purposes. Customer shall not do any of the following: (i) distribute, sell, assign, transfer, or sublicense the Incidental Software, or any part thereof, to any third party; (ii) except as specifically set forth in this Agreement, adapt, modify, translate, reverse engineer, decompile, disassemble, or create derivative works based on the Incidental Software or any part thereof; (iii) copy the Incidental Software, in whole or in part, without including appropriate copyright notices; (iv) except for providing banking services to Customer's customers, use the Incidental Software in any manner to provide Service Bureau, time sharing, or other computer services to Third Parties; (v) export the Incidental Software outside the United States, either directly or indirectly; and/or (vi) install the Incidental Software on a different platform or interface the Incidental Software to an application written in a different computer language other than that set forth in the Documentation. Within 10 days of the Effective Date of Termination, Customer shall, at its own expense, return the Incidental Software to Metavante and/or destroy all copies thereof. + +© 2006, Metavante Corporation + +2 + + + + + + + +3.3. Licensed Software The following terms apply with respect to Customer's use of Metavante's proprietary Teller Insight ä software (the "Licensed Software"). + +A. Scope of License: The Licensed Software is a copyrighted software product developed and owned by Metavante. All rights are reserved worldwide. Customer is granted a nonexclusive, nontransferable (except to permitted assigns of this Agreement) limited license to use the Licensed Software during the term of this Agreement. Customer shall not sell, lease, copy, distribute, transfer, assign or sublicense the Licensed Software to any third party. Customer will make no more than two (2) copies of the Licensed Software for backup and archival purposes and may make no copies for any other purpose. Customer is responsible for maintaining backup copies of the Licensed Software. The Licensed Software is licensed for use on individual computers and individual network workstations. Customer may change the location at which the Licensed Software is used provided that Customer shall retain records of all locations at which the Licensed Software is used and provide such records to Metavante upon request. The license granted hereby shall commence upon the delivery of the Licensed Software and shall continue until terminated in accordance with the terms contained herein. + +B. Use. Metavante shall have no liability for any failure of the Licensed Software due to the failure of Customer to use the Software in accordance with the documentation provided by Metavante or if the Licensed Software is not workable because of the malfunction of Customer's hardware or operating system or the failure of such hardware or operating system to perform as represented, or for any other cause beyond Metavante's control. + +C. Software Support: Metavante will provide to Customer improvements or enhancements as these are developed for the Licensed Software. Program improvements or enhancements shall mean changes to the programs furnished as part of the Licensed Software which result in the correction of program errors, more efficient processing, a reduction in memory requirements, or procedural changes to allow more effective use of the Licensed Software. Metavante shall use reasonable efforts to correct any errors in the Licensed Software that are reported to Metavante in writing during the term of the Software Agreement, provided such errors can be recreated with Metavante's then current version of the Licensed Software. Software support excludes support required to recover data following Customer's failure to backup system and excludes support required to install or change any software or hardware, such as a new method of download. On-site services are not provided. In the event the Customer should desire any additional support services relating to the Software, such support services will be available at mutually agreeable pricing and terms. Altering, modifying, maintaining or servicing the Licensed Software by anyone other than Metavante shall relieve Metavante of any obligation under this section. + +D. Delivery and Installation: The Licensed Software will be delivered to the Customer at the time and location designated by the parties or, if the necessary computer equipment and an appropriate installation environment are not available at such time, as soon after such time as the equipment and environment are available as is reasonably practicable. + +4. SERVICES + +4.1. Implementation of Services. + +A. Developing of Conversion Plan. Metavante shall, in consultation with Customer, develop a detailed, customized plan for the Conversion (the "Conversion Plan"). The Conversion Plan will include (i) a description of the tasks to be performed for the Conversion; (ii) allocation of responsibility for each of such tasks; and (iii) the estimated scheduled dates on which each task is to be performed. Each party shall designate its Conversion project leader. The Conversion project leaders for each party shall regularly communicate on the progress of the Conversion, the feasibility of the Conversion Dates specified in the Conversion Plan, and such other matters which may affect the smooth transition of the Services. Neither party shall reassign or replace its Conversion project leader during the Conversion without the consent of the other party, except if such individual voluntarily resigns, is dismissed for cause, or is unable to work due to his or her death, disability or other personal reasons. Each party agrees to provide such services and to perform such obligations as are specified as its responsibility in the Conversion Plan and as necessary for it to timely and adequately meet the scheduled dates set forth therein. Each party shall cooperate fully with all reasonable requests of the other party that are necessary to effect the Conversion in a timely and efficient manner. The preliminary Conversion Plan is attached hereto as the Conversion Plan Schedule, and shall be amended as the parties mutually agree. Metavante will be responsible for the Conversion Services defined in the Standard Conversion Services Schedule included herein. + +B. Conversion Resources. Metavante and Customer will each provide a team of qualified individuals to assist in the Conversion effort. + +C. Conversion date. The parties shall each perform their respective obligations under the Conversion Plan such that the Commencement Date occurs on or before November 5, 2007. If the Commencement Date does not occur on or before such date (the "Scheduled Conversion Date") solely as a result of Metavante's failure to perform any of its obligations under this Agreement or the Conversion Plan (including the satisfactory completion of the identified Enhancements) and not as a result of any failure by Customer or any Third Party, Customer shall recover liquidated damages equal to the following: + + 1. Metavante shall pay Customer $10,000.00 for each month or portion thereof that Metavante fails to have the Commencement Date occur on the Scheduled Conversion Date provided that such amount shall be prorated for any partial month. Metavante will establish a new Scheduled Conversion Date if the above date is missed, subject to Customer's approval, which shall not be unreasonably withheld. + + 2. The recovery of the amounts set forth above by Customer from Metavante shall be Customer's sole and exclusive monetary recovery from Metavante with respect to Metavante's failure to complete the Services necessary to have the Commencement Date occur on the Schedule Conversion Date. The parties acknowledge that the foregoing payments constitute reasonable and commercial liquidated damages. + +© 2006, Metavante Corporation + +3 + + + + + + + + 3. If the Customer's Conversion does not occur by June 30, 2008, either party may terminate this Agreement upon written notice provided to the other party on or before July 31, 2008. + +Metavante shall pay the amounts set forth above to Customer within 15 business days after Customer's written request. + +D. Training and Documentation. + +(i) Metavante will provide to Customer, at no charge, one CD-ROM disc, or Internet access that includes all of the User Manuals. The Customer will receive updates to the CD-ROM at no additional charge or Internet updates when available. Customers can purchase paper manuals. For manuals that are not on CD-ROM, and not accessible via the Internet, the Customer will receive one copy of the paper updates at no additional cost. Additionally, as new manuals become available, they will be included on the CD-ROM or accessible via the Internet. Except for its internal use, Customers may not modify, reproduce, or distribute the Documentation without the express consent of Metavante. + +(ii) Metavante shall provide training in accordance with the training schedule developed pursuant to the Conversion Plan. The sessions shall be held at a location mutually agreed upon by the parties. Customer shall be responsible for all Expenses incurred by the participants and Metavante's trainers in connection with such education and training. If Customer requests that training be conducted at a non-Metavante facility, Customer shall be responsible for providing an adequate training facility. + +E. Account Representatives. Each party shall, prior to Conversion, cause an individual to be assigned ("Account Representative") to devote time and effort to management of the Services under this Agreement following the Conversion. Neither party shall reassign or replace its Account Representative during the first six (6) months of his or her assignment without the consent of the other party, except if such individual voluntarily resigns, is dismissed for cause, or is unable to work due to his or her death or disability. + +F. Reporting and Meetings. Within sixty (60) days after the Effective Date, the parties shall mutually agree upon an appropriate set of periodic reports to be issued by Metavante to Customer during the Conversion Period and during the remainder of the Term. + +G. Metavante acknowledges that this Agreement is subject to approval by Customer's board of directors on or before February 15, 2007, and that Customer may terminate this Agreement without payment of the Termination Fee by providing written notice to Metavante on or before that date, provided that an officer of Customer also certifies in writing that Customer's board of directors did not approve entering into this Agreement. Notwithstanding the foregoing, Customer authorizes and directs Metavante to commence conversion efforts to meet a scheduled Conversion Date of November 5, 2007 for Customer. In the event that Customer terminates this Agreement pursuant to the foregoing, Customer shall, within 30 days of Metavante's invoice, pay any and all costs and expenses incurred by Metavante for such conversion efforts. + +H. Initial Services. Metavante shall first commence providing the Initial Services on the Commencement Date and/or as specified in the Conversion Plan. + +4.2. Professional Services. Metavante shall perform the Professional Services for Customer as set forth in the Services and Charges Schedule and the Conversion Plan and shall perform additional Professional Services as mutually agreed upon by the parties from time to time under this Agreement, provided that either party may require execution of a separate mutually acceptable professional services agreement prior to Metavante's performance of Professional Services other than those set forth in the Services and Charges Schedule or the Conversion Plan. Notwithstanding any other provision of this Agreement, Metavante's maximum liability with respect to any Professional Services performed shall be limited to the value of the Professional Services engagement giving rise to the claim for Damages. + +4.3. Service Levels. Service Levels, if any, relating to a particular Service shall be as set forth in the Service Level Schedule. The parties agree that Metavante's performance of Services at a level at or above any Service Level shall be satisfactory performance. Metavante shall cure any failure to achieve a Service Level within the period specified within the applicable schedule. Remedies, if any, for failure to achieve a Service Level shall be as set forth in the Service Level Schedule. + +4.4. Payment Services. The following additional terms shall apply with respect to Payment Services. Payment Services are those Services provided by Metavante to effect payments between Customer's clients and third parties. + +A. Settlement. Metavante may remit or receive funds for Customer as Customer's payment processor. Customer is exclusively responsible to reimburse Metavante for any and all funds remitted by Metavante to Networks, payees, or third parties in settlement of transactions processed by Metavante for Customer, whether or not Customer is able to collect the amount of any transaction from its customer. Customer shall designate a settlement account at Oriental Bank and Trust in accordance with Metavante's requirements for the applicable Service. Metavante shall charge the designated settlement account(s) for amounts owed by Customer for settlement. Customer shall, upon Metavante's demand, immediately pay to Metavante any settlement amount that Metavante is unable to collect from the settlement account for any reason. Metavante will provide Customer with daily settlement and accounting information, and Customer agrees that Customer is responsible for the daily maintenance and reconciliation of all accounting entries. Customer agrees to compensate Metavante for carrying any unfunded settlement based on the Federal Reserve Overnight borrowing rate. Upon prior written notice to Customer, Metavante may terminate this Agreement in the event that settlement remains unfunded by Customer for more than two (2) business days. + +B. Card Services. The following applies to Services provided by Metavante in support of Customer's debit or credit card issuing or merchant processing programs. + +(i) Networks. Customer acknowledges and agrees that Customer must obtain required memberships in all applicable Networks. If Customer is not a duly licensed card issuing member of any Network, Customer shall execute applications for + +© 2006, Metavante Corporation + +4 + + + + + + + +membership and shall provide Metavante with copies of its fully executed membership agreements promptly after receipt by Customer. Metavante agrees to assist Customer in obtaining sponsorship by an appropriate bank, if necessary, for MasterCard or Visa membership. Customer shall comply with the articles, bylaws, operating regulations, rules, procedures and policies of Visa, MasterCard, and/or other Networks, as applicable, and shall be solely responsible, as between Customer and Metavante, for any claims, liabilities, lawsuits and expenses arising out of or caused by Customer's failure to comply with the same. Customer acknowledges and agrees that, because Metavante is Customer's processor, Metavante may receive certain services from MasterCard, Visa, and/or other Networks that Customer could receive directly in the event Customer performed the processing services for itself. Customer agrees that Metavante may pass through to Customer any fees charged to Metavante for such services, and that Metavante has no responsibility or liability to Customer for any such services. Prior to the transfer of the Services to Customer or its designee upon the Effective Date of Termination, Customer shall take all actions required by the applicable Network to effect the transfer. In addition to the charges specified on the Services and Charges Schedule, Customer shall be responsible for (i) all interchange and network provider fees; (ii) all dues, fees, fines, and assessments established by and owed by Customer to any Network; and (iii) for all costs and fees associated with changes to ATM protocol caused by Customer's conversion to the Services. + +(ii) Card Personalization Services. If Metavante is providing card personalization services for Customer, the following will apply. Delivery of cards will be deemed complete with respect to any order upon Metavante's delivery of the supply of cards to either the United States Post Office, a common carrier or courier, or Customer's designated employee or agent. Following delivery of the cards in accordance with the foregoing, the card production services with respect to such order shall be completed, and Metavante shall have no further responsibility whatsoever for any use, abuse, loss, damage, alteration, or theft of cards following delivery. Metavante shall be responsible to produce cards in conformance with applicable network standards and for the proper preparation of mailers (e.g., sealing and addressing). Customer shall notify Metavante in writing of any alleged breach of the foregoing by Metavante. Metavante's sole responsibility, and Customer's sole remedy, shall be to provide, at Metavante's expense, a conforming replacement card to the appropriate cardholder(s). + +(iii) Settlement Account. Customer shall maintain an account at Oriental Bank and Trust for purposes of funding or receiving settlement, as applicable, and authorizes Metavante to charge the settlement account via ACH debit or otherwise for any net settlement owed by Customer to Metavante, and to deposit to the settlement account any net settlement owed by Metavante to Customer. Metavante may offset amounts payable to Customer against amounts payable by Customer for purposes of determining a net settlement amount to charge to the settlement account. For at least 120 days following the Effective Date of Termination, Customer shall maintain a settlement account which Metavante may charge to settle any trailing activity which accrues prior to the Effective Date of Termination (including any chargeback of a transaction which is authorized prior to the Effective Date of Termination). Customer shall pay to Metavante fees to settle such trailing activity in accordance with this Agreement. + +(iv) BIN Transfer. Prior to the transfer of the Services to Customer or its designee upon the expiration of the Term of this Agreement, Customer shall inform Visa and/or MasterCard and/or any other applicable Network in writing (with a copy to Metavante) (1) of the transfer of its Bank Identification Number (BIN) or Interbank Card Association Number, or other identifying number (as applicable) to the new processor, and (2) of the new ACH account number for billing purposes. + +(v) Credit Cards. + +1. Customer authorizes Metavante and grants to Metavante power-of-attorney to endorse any and all checks payable to Customer which are received by Metavante in payment of credit card accounts for which Metavante provides payment processing services. + +2. Customer may request that Metavante make available to Customer's credit card cardholders checks or drafts which the cardholders may use to draw on their credit card account. Customer agrees that neither Metavante nor Metavante's payable through bank shall have any responsibility to review or verify the signature of the drawer of any credit card check, and Customer will be responsible for the full amount of any credit card check paid by Metavante for Customer. + +C. ACH Services. + +(i) General. "ACH Services" means Services whereby Metavante will (i) initiate and/or receive automated clearing house debit and credit entries, and adjustments to debit entries and credit entries to Customer's account, (ii) credit and/or debit the same to such account. Customer authorizes Metavante to act as Customer's third-party processor for initiating, transmitting, and/or receiving ACH entries. If agreed to between Customer and Metavante, Metavante shall provide for the posting of ACH entries to Customer deposit accounts. Metavante shall provide reports to Customer showing errors and rejections resulting from ACH entries transmitted on behalf of Customer during a particular day. It shall be Customer's responsibility to review such reports and correct erroneous ACH entries. + +(ii) Timing. Metavante shall make reasonable efforts to deliver ACH entries to Customer or to an ACH operator, as appropriate, prior to any applicable deadline for such delivery. Metavante shall have no liability to Customer as a result of any late delivery, except to the extent such late delivery is (i) caused by the willful misconduct of Metavante, and (ii) made more than 24 hours after its scheduled deadline + +(iii) NACHA Rules. In providing ACH Services for Customer, Metavante acts as Customer's third-party service provider and is not itself an "Operator," "Originator," "ODFI," or "RDFI" (as defined under NACHA rules). Customer shall be responsible for compliance with all applicable laws, rules, and regulations regarding Customer's use of and/or access to the ACH Services, including applicable rules and regulations of the National Automated Clearing House Association ("NACHA"). In particular and as applicable, (i) Customer will provide its depositors with all disclosures required under state and federal law and (ii) shall enter into an agreement with each party that will initiate ACH entries to accounts (an "Originator") prior to permitting the Originator to initiate ACH entries. Customer shall indemnify Metavante from, defend Metavante against, and hold Metavante harmless from any and all loss, claim, + +© 2006, Metavante Corporation + +5 + + + + + + + +or liability to any Third Party from Customer's breach of the foregoing obligations. Upon notification from Customer of the occurrence of an error or omission with respect to an ACH entry, Metavante shall promptly furnish corrected ACH entry(ies) to the applicable ACH operator, unless the NACHA rules prohibit the processing of the correct ACH entry(ies). + +5. FEES + +5.1. Fee Structure. Customer agrees to pay fees for the Initial Services as set forth in the Services and Charges Schedule. If Customer elects to receive Services that are not specifically set forth in the Services and Charges Schedule, Customer agrees to pay fees as mutually agreed upon for such Services. Any Services not identified in the Services and Charges Schedule will be at Metavante's standard list pricing unless the parties mutually agree to pay for those Services as provided in Section 5.7. + +5.2. Pricing and Operational Assumptions. The Initial Services shall include at least: (A) the functionality enhancements set forth in the Planned Enhancement and Interface Schedule; and (B) the current capabilities identified in the Current Capabilities Schedule. + +5.3. Excluded Costs. The fees set forth in the Services and Charges Schedule do not include Expenses, late fees or charges, or Taxes, all of which shall be the responsibility of Customer. + +5.4. Disputed Amounts. If Customer disputes any charge or amount on any invoice and such dispute cannot be resolved promptly through good-faith discussions between the parties, Customer shall pay the amounts due under this Agreement minus the disputed amount, and the parties shall diligently proceed to resolve such disputed amount. An amount will be considered disputed in good faith if (i) Customer delivers a written statement to Metavante, on or before the due date of the invoice, describing in detail the basis of the dispute and the amount being withheld by Customer, (ii) such written statement represents that the amount in dispute has been determined after due investigation of the facts and that such disputed amount has been determined in good faith, and (iii) all other amounts due from Customer that are not in dispute have been paid in accordance with the terms of this Agreement. Customer's right to assert claims under this Agreement shall be subject to Customer's payment in full of previously invoiced, past due amounts that have not been disputed in accordance with this Section. + +5.5. Terms of Payment. Customer shall pay the Monthly Base Fee in advance on the first day of the calendar month in which the Services are to be performed. Any and all other amounts payable under this Agreement shall be due thirty (30) days following the date of invoice, unless otherwise provided in the Services and Charges Schedule. Undisputed charges not paid by the applicable due date shall be subject to annual interest at the prevailing U.S. prime rate published by Citibank, N.A., from time to time or the highest rate permitted by law, whichever is lower. Customer shall also pay any collection fees, court costs, reasonable attorneys' fees, and other fees, costs, and charges incurred by Metavante in collecting payment of the charges and any other amounts for which Customer is liable under the terms and conditions of this Agreement and which shall be due thirty (30) days following the date of invoice. Customer agrees to maintain a depository account with Oriental Bank and Trust for the payment of amounts payable hereunder and hereby authorizes Metavante to initiate debit entries to such account for the payment of amounts payable hereunder. Customer agrees to provide Metavante with any and all information necessary for Metavante to initiate such debit entries via the Automated Clearing House (ACH) system. + +5.6. Modification of Terms and Pricing. Charges for all Services shall be subject to adjustments on each January 1 which shall not exceed, in aggregate effect, the lesser of (i) an annual rate of five percent (5%), or (ii) the change to the Employment Cost Index (over the applicable period). + +5.7. *The information in this paragraph is intentionally ommitted because confidential treatment has been requested pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. The omitted information has been filed separately with the U.S. Securities and Exchange Commission. + +6. PERFORMANCE WARRANTY/DISCLAIMER OF ALL OTHER WARRANTIES + +6.1. Performance Warranty. Metavante warrants that it will provide all Services in a commercially reasonable manner in material conformance with the applicable Documentation (the "Performance Warranty"). Where the parties have agreed upon Service Levels for any aspect of Metavante's performance, such Service Levels shall apply in lieu of the Performance Warranty. THIS PERFORMANCE WARRANTY IS SUBJECT TO THE WARRANTY EXCLUSIONS SET FORTH BELOW IN SECTION 0. + +6.2. Performance Warranty Exclusions. Except as may be otherwise expressly agreed in writing by Metavante, Metavante's Performance Warranty does not apply to: + +A. defects, problems, or failures caused by the Customer's nonperformance of obligations essential to Metavante's performance of its obligations; and/or + +B. defects, problems, or failures caused by an event of force majeure. + +© 2006, Metavante Corporation + +6 + + + + + + + +6.3. DISCLAIMER OF ALL OTHER WARRANTIES. THIS PERFORMANCE WARRANTY, AND THE WARRANTIES IN ARTICLE 12 HEREOF, ARE IN LIEU OF, AND METAVANTE DISCLAIMS ANY AND ALL OTHER WARRANTIES, CONDITIONS, OR REPRESENTATIONS (EXPRESS OR IMPLIED, ORAL OR WRITTEN) WITH RESPECT TO THE SERVICES PROVIDED UNDER THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, ANY AND ALL IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS OR SUITABILITY FOR ANY PURPOSE (WHETHER OR NOT METAVANTE KNOWS, HAS REASON TO KNOW, HAS BEEN ADVISED, OR IS OTHERWISE IN FACT AWARE OF ANY SUCH PURPOSE), WHETHER ALLEGED TO ARISE BY LAW, BY REASON OF CUSTOM OR USAGE IN THE TRADE, OR BY COURSE OF DEALING. IN ADDITION, METAVANTE DISCLAIMS ANY WARRANTY OR REPRESENTATION TO ANY PERSON OTHER THAN CUSTOMER WITH RESPECT TO THE SERVICES PROVIDED UNDER THIS AGREEMENT. + +7. MODIFICATION OR PARTIAL TERMINATION + +7.1. Modifications to Services. Metavante may relocate, modify, amend, enhance, update, or provide an appropriate replacement for the software used to provide the Services, or any element of its systems or processes at any time or withdraw, modify, or amend any function of the Services, provided that the functionality of the Services, any applicable Service Levels, and fees are not materially adversely affected. In no event shall this Section 7.1 require Customer to purchase any New Services from Metavante. + +7.2. Partial Termination by Metavante. Except as may be provided in any Schedule, Metavante may, at any time, withdraw any of the Services upon providing ninety (90) days' prior written notice to Customer, provided that Metavante is withdrawing the Service(s) from its entire client base. Metavante may also terminate any function or any Services immediately upon any final regulatory, legislative, or judicial determination that providing such function or Services is inconsistent with applicable law or regulation or the rights of any Third Party. If Metavante terminates any Service pursuant to this paragraph, Metavante agrees to assist Customer, without additional charge, in identifying an alternate provider of such terminated Service, and the Customer shall not be assessed a Termination Fee for such terminated service. + +7.3. Partial Termination by Customer. Except as may be provided in any Schedule, Customer agrees that, during the Term, Metavante shall be Customer's sole and exclusive provider of all Services included in Metavante's Integrated Banking Solution (deposit and loan processing services provided by Metavante as of the Commencement Date). If Customer breaches the foregoing covenant, the same shall constitute a partial termination of this Agreement, and Customer shall pay Metavante the Termination Fee for the affected Service, as liquidated damages and not as a penalty. + +8. TERMINATION/DEFAULT + +8.1. Early Termination. The terms and conditions set forth in this Section 8 shall govern the early termination of this Agreement (or any Service). + +8.2. For Cause. If either party fails to perform any of its material obligations (including Section 7.1 hereof) under this Agreement (a "Default") and does not cure such Default in accordance with this Section, then the non-defaulting party may, by giving notice to the other party, terminate this Agreement as of the date specified in such notice of termination, or such later date agreed to by the parties, and/or recover Damages. Except as provided in Section 4.1 C, a party may terminate the Agreement in accordance with the foregoing if such party provides written notice to the defaulting party and either (a) the defaulting party does not cure the Default within sixty (60) days of the defaulting party's receipt of notice of the Default, if the Default is capable of cure within sixty (60) days, or (b) if the Default is not capable of cure within sixty (60) days, the defaulting party does not both (i) implement a plan to cure the Default within sixty (60) days of receipt of notice of the Default, and (ii) diligently carry-out the plan in accordance with its terms. The parties acknowledge and agree that a failure to pay any amount when due hereunder shall be a Default that is capable of being cured within thirty (30) days. Except as provided in the Service Level Schedule, the parties acknowledge and agree that any error in processing data, preparation or filing of a report, form, or file, or the failure to perform Services as required hereunder shall be satisfactorily cured upon the completion of accurate re-processing, the preparation or filing of the accurate report, form, or file, or the re-performance of the Services in accordance with applicable requirements, respectively. + +8.3. For Insolvency. In addition to the termination rights set forth in Sections 8.1 and 8.2, subject to the provisions of Title 11, United States Code, if either party becomes or is declared insolvent or bankrupt, is the subject to any proceedings relating to its liquidation, insolvency or for the appointment of a receiver or similar officer for it, makes an assignment for the benefit of all or substantially all of its creditors, or enters into an agreement for the composition, extension, or readjustment of all or substantially all of its obligations, or is subject to regulatory sanction by any Federal Regulator, then the other party may, by giving written notice to such party, may terminate this Agreement as of a date specified in such notice of termination; provided that the foregoing shall not apply with respect to any involuntary petition in bankruptcy filed against a party unless such petition is not dismissed within sixty (60) days of such filing. + +8.4. Termination for Convenience. Customer may elect to terminate this Agreement for any reason upon six months written notice to Metavante, provided Customer shall pay Metavante the "Termination Fee" defined and computed in accordance with the table below. The "Termination Fee" shall be paid prior to the Effective Date of Termination of the Agreement, as applicable. In addition to the foregoing, Customer shall pay to Metavante any amortized but unpaid one-time set-up fees, enhancement fees or implementation fees and all reasonable costs in connection with the disposition of equipment, facilities and contracts exclusively related to Metavante's performance of the Services under this Agreement. + +The Termination Fee shall be an amount equal to a percentage of the Estimated Remaining Value as set forth below. The "Estimated Remaining Value" means the mathematical product of (a) the average monthly fee paid by Customer with respect to the Initial Services during the twelve (12) months immediately preceding the Effective Date of Termination, multiplied by (b) the number of unexpired whole months remaining between the Effective Date of Termination and the expiration of the Initial Term. The Termination Fee shall be equal to the Estimated Remaining Value + +© 2006, Metavante Corporation + +7 + + + + + + + + + + + +For example, if the Customer chose to terminate for convenience on an agreement with a Commencement Date of January 01, 2007 and provided written notice on July 15, 2009 for a termination date of January 15, 2010, the Estimated Remaining Value would be the average monthly fee during 2009 multiplied by 47 and the Termination Fee would be the Estimated Remaining Value. + +8.5. *The information in this paragraph is intentionally omitted because confidential treatment has been requested pursuant to Rule 24b- 2 under the Securities Exchange Act of 1934, as amended. The omitted information has been filed separately with the U.S. Securities and Exchange Commission. + +8.6. Cease and Desist Order. Customer may terminate this entire Agreement without payment of the Termination Fee by providing written notice to Metavante no later than thirty (30) days following the date that Metavante is subject to a formal cease and desist order duly and properly issued by either (a) the Federal Deposit Insurance Corporation, or (b) the Office of the Financial Institutions Commissioner for the Commonwealth of Puerto Rico, for knowingly or recklessly participating in (i) any violation of any law or regulation; (ii) any breach of fiduciary duty; or (iii) any unsafe or unsound practice, which violation, breach, or practice caused or is likely to cause more than a minimal financial loss to, or a significant adverse effect on, Customer. + +9. LIMITATION OF LIABILITY/MAXIMUM DAMAGES ALLOWED + +9.1. Equitable Relief. Either party may seek equitable remedies, including injunctive relief, for a breach of the other party's obligations under Article 13 of this Agreement, prior to commencing the dispute resolution procedures set forth in Section 11.1 below. + +9.2. Exclusion of Incidental and Consequential Damages. Independent of, severable from, and to be enforced independently of any other provision of this Agreement, NEITHER PARTY WILL BE LIABLE TO THE OTHER PARTY (NOR TO ANY PERSON CLAIMING RIGHTS DERIVED FROM THE OTHER PARTY'S RIGHTS) IN CONTRACT, TORT (INCLUDING NEGLIGENCE), OR OTHERWISE, FOR INCIDENTAL, CONSEQUENTIAL, SPECIAL, PUNITIVE, OR EXEMPLARY DAMAGES OF ANY KIND—including lost profits, loss of business, or other economic damage, and further including injury to property, AS A RESULT OF BREACH OF ANY WARRANTY OR OTHER TERM OF THIS AGREEMENT, INCLUDING ANY FAILURE OF PERFORMANCE, REGARDLESS OF WHETHER THE PARTY LIABLE OR ALLEGEDLY LIABLE WAS ADVISED, HAD OTHER REASON TO KNOW, OR IN FACT KNEW OF THE POSSIBILITY THEREOF. + +9.3. *The information in this paragraph is intentionally omitted because confidential treatment has been requested pursuant to Rule 24b- 2 under the Securities Exchange Act of 1934, as amended. The omitted information has been filed separately with the U.S. Securities and Exchange Commission. + +9.4. Statute of Limitations. No lawsuit or other action may be brought by either party hereto, or on any claim or controversy based upon or arising in any way out of this Agreement, after two(2) years from the date on which the party knew or reasonably should have known of an event for which a cause of action arose regardless of the nature of the claim or form of action, whether in contract, tort (including negligence), or otherwise; provided, however, the foregoing limitation shall not apply to the collection of any amounts due Metavante under this Agreement. + +9.5. Tort Claim Waiver. In addition to and not in limitation of any other provision of this Article 9, each party hereby knowingly, voluntarily, and intentionally waives any right to recover from the other party, and Customer waives any right to recover from any Eligible Provider, any economic losses or damages in any action brought under tort theories, including, misrepresentation, negligence and/or strict liability, and/or relating to the quality or performance of any products or services provided by Metavante. For purposes of this waiver, economic losses and damages include monetary losses or damages caused by a defective product or service except personal injury or damage to other tangible property. Even if remedies provided under this Agreement shall be deemed to have failed of their essential purpose, neither party shall have any liability to the other party under tort theories for economic losses or damages. + +9.6. Liquidated Damages. Customer acknowledges that Metavante shall suffer a material adverse impact on its business if this Agreement is terminated prior to expiration of the Term, and that the resulting damages may not be susceptible of precise determination. Customer acknowledges that the Termination Fee is a reasonable approximation of such damages and shall be deemed to be liquidated damages and not a penalty. + +© 2006, Metavante Corporation + +8 + + + + + + + +9.7. Essential Elements. Customer and Metavante acknowledge and agree that the limitations contained in this Article 9 are essential to this Agreement, and that Metavante has expressly relied upon the inclusion of each and every provision of this Article 9 as a condition to executing this Agreement. + +10. INSURANCE AND INDEMNITY. + +10.1. Insurance. Metavante currently maintains and, if available at a reasonable cost, Metavante shall continue to pay for, and maintain in full force and effect during the Term insurance as follows: + +A. Workers' compensation and employers' liability insurance with limits to conform with the greater of the amount required by Wisconsin applicable state statutory law or one million dollars ($1,000,000) each accident, including occupational disease coverage; + +B. Commercial general liability insurance with limits not less than three million dollars ($3,000,000) combined single limit for bodily injury, death, and property damage, including personal injury, contractual liability, independent contractors, broad-form property damage, and products and completed operations coverage; + +C. Commercial automobile liability insurance with limits not less than one million dollars ($1,000,000) each occurrence combined single limit of liability for bodily injury, death, and property damage, including owned and non-owned and hired automobile coverages, as applicable; + +D. Commercial Blanket Bond, including Electronic & Computer Crime or Unauthorized Computer Access coverage, in the amount of not less than ten million dollars ($10,000,000); and + +E. Professional liability insurance (Errors and Omissions) with limits not less than three million dollars ($3,000,000) annual aggregate for all claims each policy year for computer programming and electronic data processing services. + +F. Claims Made Coverages. To the extent any insurance coverage required under this Section is purchased on a "claims-made" basis, such insurance shall cover all prior acts of Metavante during the Term, and such insurance shall be continuously maintained until at least four (4) years beyond the expiration or termination of the Term, or Metavante shall purchase "tail" coverage, effective upon termination of any such policy or upon termination or expiration of the Term, to provide coverage for at least four (4) years from the occurrence of either such event. + +G. Certificates Of Insurance. Certificates of Insurance evidencing all coverages described in this Section shall be furnished to Customer upon request. + +10.2. Indemnity. + +A. Except as provided in 10.2B below, Customer shall indemnify Metavante from, defend Metavante against, and pay any final judgments awarded against Metavante, resulting from any claim brought by a Third Party against Metavante based on Customer's use of the Services to support its operations, Metavante's compliance with Customer's specifications or instructions, or Metavante's use of trademarks or data supplied by Customer. + +B. Metavante shall indemnify Customer from, defend Customer against, and pay any final judgment awarded against Customer, resulting from any claim brought by a Third Party against Customer based on Metavante's alleged infringement of any patent, copyright, or trademark of such Third Party under the laws of the United States, unless and except to the extent that such infringement is caused by Metavante's compliance with Customer's specifications or instructions, or Metavante's use of trademarks or data supplied by Customer. + +10.3. Indemnification Procedures. If any Third Party makes a claim covered by Section 10.2 against an indemnitee with respect to which such indemnitee intends to seek indemnification under this Section, such indemnitee shall give notice of such claim to the indemnifying party, including a brief description of the amount and basis therefor, if known. Upon giving such notice, the indemnifying party shall be obligated to defend such indemnitee against such claim, and shall be entitled to assume control of the defense of the claim with counsel chosen by the indemnifying party, reasonably satisfactory to the indemnitee. The indemnitee shall cooperate fully with and assist the indemnifying party in its defense against such claim in all reasonable respects. The indemnifying party shall keep the indemnitee fully apprised at all times as to the status of the defense. Notwithstanding the foregoing, the indemnitee shall have the right to employ its own separate counsel in any such action, but the fees and expenses of such counsel shall be at the expense of the indemnitee. Neither the indemnifying party nor any indemnitee shall be liable for any settlement of action or claim effected without its consent. Notwithstanding the foregoing, the indemnitee shall retain, assume, or reassume sole control over all expenses relating to every aspect of the defense that it believes is not the subject of the indemnification provided for in this Section. Until both (a) the indemnitee receives notice from indemnifying party that it will defend, and (b) the indemnifying party assumes such defense, the indemnitee may, at any time after ten (10) days from the date notice of claim is given to the indemnifying party by the indemnitee, resist or otherwise defend the claim or, after consultation with and consent of the indemnifying party, settle or otherwise compromise or pay the claim. The indemnifying party shall pay all costs of indemnity arising out of or relating to that defense and any such settlement, compromise, or payment. The indemnitee shall keep the indemnifying party fully apprised at all times as to the status of the defense. Following indemnification as provided in this Section, the indemnifying party shall be subrogated to all rights of the indemnitee with respect to the matters for which indemnification has been made. + +© 2006, Metavante Corporation + +9 + + + + + + + +11. DISPUTE RESOLUTION + +11.1. Representatives of Parties. All disputes arising under or in connection with this Agreement shall initially be referred to the representatives of each party who customarily manages the relationship between the parties. If such representatives are unable to resolve the dispute within five (5) Business Days after referral of the matter to them, the managers of the representatives shall attempt to resolve the dispute. If, after five (5) Business Days they are unable to resolve the dispute, senior executives of the parties shall attempt to resolve the dispute. If, after five (5) Business Days they are unable to resolve the dispute, the parties shall submit the dispute to the chief executive officers of the parties for resolution. Neither party shall commence legal proceedings with regard to a dispute until completion of the dispute resolution procedures set forth in this Section 11.1, except to the extent necessary to preserve its rights or maintain a superior position against other creditors or claimants. + +11.2. Continuity of Performance. During the pendency of the dispute resolution proceedings described in this Article 11, Metavante shall continue to provide the Services so long as Customer shall continue to pay all undisputed amounts to Metavante in a timely manner. + +12. AUTHORITY + +12.1. Metavante. Metavante warrants that: + +A. Metavante has the right to provide the Services hereunder, using all computer software required for that purpose. + +B. Metavante is a corporation validly existing and in active status under the laws of the State of Wisconsin. It has all the requisite corporate power and authority to execute, deliver, and perform its obligations under this Agreement. The execution, delivery, and performance of this Agreement have been duly authorized by Metavante, and this Agreement is enforceable in accordance with its terms against Metavante. No approval, authorization, or consent of any governmental or regulatory authorities is required to be obtained or made by Metavante in order for Metavante to enter into and perform its obligations under this Agreement + +12.2. Customer. Customer warrants that: + +A. Customer has all required licenses and approvals necessary to use the Services in the operation of its business. + +B. Customer is validly existing and in good standing under the laws of the state of its incorporation or charter, or if a national bank, the United States of America. It has all the requisite corporate power and authority to execute, deliver, and perform its obligations under this Agreement. The execution, delivery, and performance of this Agreement have been duly authorized by Customer, and this Agreement is enforceable in accordance with its terms against Customer. No approval, authorization, or consent of any governmental or regulatory authorities is required to be obtained or made by Customer in order for Customer to enter into and perform its obligations under this Agreement. + +C. In the event that Customer requests Metavante to disclose to any Third Party or to use any of Customer's Confidential Information (as defined in Section 13.3), and such Confidential Information is or may be subject to the Privacy Regulations, such disclosure or use shall be permitted by the Privacy Regulations and by any initial, annual, opt-out, or other privacy notice that Customer issued with respect to such Confidential Information pursuant to the Privacy Regulations. + +13. CONFIDENTIALITY AND OWNERSHIP + +13.1. Customer Data. Customer shall remain the sole and exclusive owner of all Customer Data and its Confidential Information (as defined in Section 13.3), regardless of whether such data is maintained on magnetic tape, magnetic disk, or any other storage or processing device. All such Customer Data and other Confidential Information shall, however, be subject to regulation and examination by the appropriate auditors and regulatory agencies to the same extent as if such information were on Customer's premises. + +13.2. Metavante Systems. Customer acknowledges that it has no rights in any of Metavante's software, systems, documentation, guidelines, procedures, and similar related materials or any modifications thereof, unless and except as expressly granted under this Agreement. + +13.3. Confidential Information. "Confidential Information" of a party shall mean all confidential or proprietary information and documentation of such party, whether or not marked as such including, with respect to Customer, all Customer Data. Confidential Information shall not include: (a) information which is or becomes publicly available (other than by the party having the obligation of confidentiality) without breach of this Agreement; (b) information independently developed by the receiving party; (c) information received from a Third Party not under a confidentiality obligation to the disclosing party; or (d) information already in the possession of the receiving party without obligation of confidence at the time first disclosed by the disclosing party. The parties acknowledge and agree that the substance of the negotiations of this Agreement, and the terms of this Agreement are considered Confidential Information subject to the restrictions contained herein. + +13.4. Obligations of the Parties. Except as permitted under this Section 13.4 and applicable law, neither party shall use, copy, sell, transfer, publish, disclose, display, or otherwise make any of the other party's Confidential Information available to any Third Party without the prior written consent of the other party. Each party shall hold the Confidential Information of the other party in confidence and shall not disclose or use such Confidential Information other than for the purposes contemplated by this Agreement and, to the extent that Confidential Information of Customer may be subject to the Privacy Regulations, as permitted by the Privacy Regulations, and shall instruct their employees, agents, and contractors to use the same care and discretion with respect to the Confidential Information of the other party or of any Third Party utilized hereunder that Metavante and Customer each require with respect to their own most confidential information, but in no event less than a reasonable standard of care, including the utilization of security devices or procedures designed to + +© 2006, Metavante Corporation + +10 + + + + + + + +prevent unauthorized access to such materials. Each party shall instruct its employees, agents, and contractors (a) of its confidentiality obligations hereunder and (b) not to attempt to circumvent any such security procedures and devices. Each party's obligation under the preceding sentence may be satisfied by the use of its standard form of confidentiality agreement, if the same reasonably accomplishes the purposes here intended. All such Confidential Information shall be distributed only to persons having a need to know such information to perform their duties in conjunction with this Agreement. A party may disclose the other party's Confidential Information if required to do so by subpoena, court or regulatory order, or other legal process, provided the party notifies the disclosing party of its receipt of such process, and reasonably cooperates, at the disclosing party's expense, with efforts of the disclosing party to prevent or limit disclosure in response to such process. + +13.5. Information Security. Metavante shall be responsible for establishing and maintaining an information security program that is designed to (i) ensure the security and confidentiality of Customer Data, (ii) protect against any anticipated threats or hazards to the security or integrity of Customer Data, (iii) protect against unauthorized access to or use of Customer Data that could result in substantial harm or inconvenience to Customer or any of its customers, and (iv) ensure the proper disposal of Customer Data. Customer shall be responsible for maintaining security for its own systems, servers, and communications links as necessary to (a) protect the security and integrity of Metavante's systems and servers on which Customer Data is stored, and (b) protect against unauthorized access to or use of Metavante's systems and servers on which Customer Data is stored. Metavante will (1) take appropriate action to address any incident of unauthorized access to Customer Data and (2) notify Customer as soon as possible of any incident of unauthorized access to Sensitive Customer Information and any other breach in Metavante's security that materially affects Customer or Customer's customers If the primary federal regulator for Customer is the Office of Thrift Supervision (the "OTS"), Metavante will also notify the OTS as soon as possible of any breach in Metavante's security that materially affects Customer or Customer's customers. Either party may change its security procedures from time to time as commercially reasonable to address operations risks and concerns in compliance with the requirements of this section. + +13.6. Ownership and Proprietary Rights. Metavante reserves the right to determine the hardware, software, and tools to be used by Metavante in performing the Services. Metavante shall retain title and all other ownership and proprietary rights in and to the Metavante Proprietary Materials and Information, and any and all derivative works based thereon. Such ownership and proprietary rights shall include any and all rights in and to patents, trademarks, copyrights, and trade secret rights. Customer agrees that the Metavante Proprietary Materials and Information are not "work made for hire" within the meaning of U.S. Copyright Act, 17 U.S.C. Section 101. + +13.7. The Privacy Regulations. In the event that Customer requests Metavante to disclose to any Third Party or to use any of Customer's Confidential Information, and such Confidential Information is or may be subject to the Privacy Regulations, Metavante reserves the right, prior to such disclosure or use, (a) to review any initial, annual, opt-out, or other privacy notice that Customer issued with respect to such Confidential Information pursuant to the Privacy Regulations, and if requested by Metavante, Customer shall promptly provide Metavante with any such notice, and (b) to decline to disclose to such Third Party or to use such Confidential Information if Metavante, in Metavante's sole discretion, believes that such disclosure or use is or may be prohibited by the Privacy Regulations or by any such notice. + +13.8. Publicity. Neither party shall refer to the other party directly or indirectly in any media release, public announcement, or public disclosure relating to this Agreement or its subject matter, in any promotional or marketing materials, lists, or business presentations, without consent from the other party for each such use or release in accordance with this Section, provided that Metavante may include Customer's name in Metavante's customer list and may identify Customer as its customer in its sales presentations and marketing materials without obtaining Customer's prior consent. Notwithstanding the foregoing, at Metavante's request, Customer agrees to issue a joint press release prepared by Metavante to announce the relationship established by the parties hereunder. Customer agrees that such press release shall be deemed approved by Customer only if written approval notification has been provided by Customer to Metavante, which approval shall not be unreasonably withheld. All other media releases, public announcements, and public disclosures by either party relating to this Agreement or the subject matter of this Agreement (each, a "Disclosure"), including promotional or marketing material, but not including (a) announcements intended solely for internal distribution, or (b) disclosures to the extent required to meet legal or regulatory requirements beyond the reasonable control of the disclosing party, shall be subject to review and approval, which approval shall not be unreasonably withheld, by the other party prior to release. Such approval shall be deemed to be given if a party does not object to a proposed Disclosure within five (5) Business Days of receiving same. Disputes regarding the reasonableness of objections to the joint press release or any Disclosures shall be subject to the Dispute Resolution Procedures of Section 11.1 above. + +14. REGULATORY COMPLIANCE AND ASSURANCES + +14.1. Legal Requirements. + +A. Customer shall be solely responsible for monitoring and interpreting (and for complying with, to the extent such compliance requires no action by Metavante) the Legal Requirements. Based on Customer's instructions, Metavante shall select the processing parameter settings, features, and options (collectively, the "Parameters") within Metavante's system that will apply to Customer. Customer shall be responsible for determining that such selections are consistent with the Legal Requirements and with the terms and conditions of any agreements between Customer and its clients. In making such determinations, Customer may rely upon the written descriptions of such Parameters contained in the User Manuals. Metavante shall perform system processing in accordance with the Parameters. + +B. Subject to the foregoing, Metavante shall perform an on-going review of federal laws, rules, and regulations. Metavante shall maintain the features and functions set forth in the User Manuals for each of the Services in accordance with all changes in federal laws, rules, and regulations applicable to such features and functions, in a non-custom environment. For any new federal laws, rules, and regulations, Metavante will perform a business review, with input from Metavante's customers and user groups. If Metavante elects to support a new federal law, rule, or regulation through changes to the Metavante Software, Metavante shall develop and implement modifications to the Services to enable Customer to comply with such new federal laws, rules, and regulations. + +© 2006, Metavante Corporation + +11 + + + + + + + + + + + +C. In any event, Metavante shall work with Customer in developing and implementing a suitable procedure or direction to enable Customer to comply with federal, Puerto Rico, and state laws, rules, and regulations applicable to the Services being provided by Metavante to Customer, including in those instances when Metavante has elected to, but it is not commercially practicable to, modify the Metavante Software prior to the regulatory deadline for compliance. + +14.2. Regulatory Assurances. Metavante and Customer acknowledge and agree that the performance of these Services will be subject to regulation and examination by Customer's regulatory agencies to the same extent as if such Services were being performed by Customer. Upon request, Metavante agrees to provide any appropriate assurances to such agency and agrees to subject itself to any required examination or regulation. Customer agrees to reimburse Metavante for reasonable costs actually incurred due to any such examination or regulation that is performed solely for the purpose of examining Services used by Customer by Puerto Rico authorities. + +A. Notice Requirements. Customer shall be responsible for complying with all regulatory notice provisions to any applicable governmental agency, which shall include providing timely and adequate notice to Federal Regulators as of the Effective Date of this Agreement, identifying those records to which this Agreement shall apply and the location at which such Services are to be performed. + +B. Examination of Records. The parties agree that the records maintained and produced under this Agreement shall, at all times, be available at the Operations Center for examination and audit by governmental agencies having jurisdiction over the Customer's business, including any Federal, State or Puerto Rico Regulator. The Director of Examinations of any Federal, State or Puerto Rico Regulator or his or her designated representative shall have the right to ask for and to receive directly from Metavante any reports, summaries, or information contained in or derived from data in the possession of Metavante related to the Customer. Metavante shall notify Customer as soon as reasonably possible of any formal request by any authorized governmental agency to examine Customer's records maintained by Metavante, if Metavante is permitted to make such a disclosure to Customer under applicable law or regulations. Customer agrees that Metavante is authorized to provide all such described records when formally required to do so by a Federal, State or Puerto Rico Regulator. + +C. Audits. Metavante shall cause a Third Party review of its operations and related internal controls to be conducted annually by its independent auditors in accordance with SAS 70 of the AICPA for Type II audits. Metavante shall provide to Customer one copy of the audit report resulting from such review. + +D. IRS and Treasury Department Filing. Customer represents it has complied with all laws, regulations, procedures, and requirements in attempting to secure correct tax identification numbers (TINs) for Customer's payees and customers and agrees to attest to this compliance by an affidavit provided annually. + +15. DISASTER RECOVERY + +15.1. Services Continuity Plan. Throughout the Term of the Agreement, Metavante shall maintain a Services Continuity Plan (the "Plan") in compliance with applicable regulatory requirements. Review and acceptance of the Plan, as may be required by any applicable regulatory agency, shall be the responsibility of Customer. Metavante shall cooperate with Customer in conducting such reviews as such regulatory agency may, from time to time, reasonably request. A detailed Executive Summary of the Plan has been provided to Customer. Updates to the Plan shall be provided to Customer without charge. + +15.2. Relocation. If appropriate, Metavante shall relocate all affected Services to an alternate disaster recovery site as expeditiously as possible after declaration of a Disaster, and shall coordinate with Customer all requisite telecommunications modifications necessary to achieve full connectivity to the disaster recovery site, in material compliance with all regulatory requirements. "Disaster" shall have the meaning set forth in the Plan. + +15.3. Resumption of Services. The Plan provides that, in the event of a Disaster, Metavante will be able to resume the Services in accordance therewith within the time periods specified in the Plan. In the event Metavante is unable to resume the Services to Customer within the time periods specified in the Plan, Customer shall have the right to terminate this Agreement without payment of the Termination Fee upon written notice to Metavante delivered within forty-five (45) days after declaration of such Disaster. The determination by Customer to terminate this Agreement shall be effective immediately upon written notification to Metavante. Customer shall receive any credits due and unpaid by Metavante as of the date of termination of this Agreement. During interruption of Services, the payment by Customer for interrupted Services shall be abated. + +15.4. Annual Test. Metavante shall test its Plan by conducting one (1) test annually and shall provide Customer with a description of the test results in accordance with applicable laws and regulations. + +16. MISCELLANEOUS PROVISIONS + +16.1. Equipment and Network. Customer shall obtain and maintain at its own expense its own data processing and communications equipment as may be necessary or appropriate to facilitate the proper use and receipt of the Services, provided that Metavante shall procure certain equipment for Customer as set forth in the Strategic Network Solutions Schedule attached hereto. Customer shall pay all installation, monthly, and other charges relating to the installation and use of communications lines between Customer's datacenter and the Operations Center, as set forth in the Network Schedule. Metavante maintains and will continue to maintain a network control center with diagnostic capability to monitor reliability and availability of the communication lines described in the Network Schedule, but Metavante shall not be responsible for the continued availability or reliability of such communications lines. Metavante agrees to provide services to install, configure, and support the wide-area network to interconnect Customer to the Operations Center as described in, and subject to the terms and conditions of, the Network Schedule. + +© 2006, Metavante Corporation + +12 + + + + + + + +16.2. Data Backup. Customer shall maintain adequate records for at least ten (10) Business Days, including backup on magnetic tape or other electronic media where transactions are being transmitted to Metavante, from which reconstruction of lost or damaged files or data can be made. Customer assumes all responsibility and liability for any loss or damage resulting from failure to maintain such records. + +16.3. Balancing and Controls. Customer shall (a) on a daily basis, review all input and output, controls, reports, and documentation, to ensure the integrity of data processed by Metavante; and (b) on a daily basis, check exception reports to verify that all file maintenance entries and non-dollar transactions were correctly entered. Customer shall be responsible to notify Metavante immediately in the event of any error so that Metavante may initiate timely remedial action to correct any improperly processed data which these reviews disclose. In the event of any error by Metavante in processing any data or preparing any report or file, Metavante shall correct the error by reprocessing the affected data or preparing and issuing a new file or report at no additional cost to Customer. + +16.4. Future Acquisitions. Customer acknowledges that Metavante has established the Fee Schedule(s) and enters into this Agreement on the basis of Metavante's understanding of the Customer's current need for Services and Customer's anticipated future need for Services as a result of internally generated expansion of its customer base. If the Customer expands its operations by acquiring Control of additional financial institutions or if Customer experiences a Change in Control, the following provisions shall apply: + +A. Acquisition of Additional Entities. If, after the Effective Date, Customer acquires Control of one or more financial holding companies, banks, savings and loan associations, or other financial institutions that are not currently Affiliates, Metavante agrees to provide Services for such new Affiliates, and such Affiliates shall automatically be included in the definition of "Customer"; provided that (i) the conversion of each new Affiliate must be scheduled at a mutually agreeable time (taking into account, among other things, the availability of Metavante conversion resources) and must be completed before Metavante has any obligation to provide Services to such new Affiliate; (ii) the Customer will be liable for any and all Expenses in connection with the conversion of such new Affiliate; and (iii) Customer shall pay conversion fees in an amount to be mutually agreed upon with respect to each new Affiliate. + +B. Change in Control of Customer. If a Change in Control occurs with respect to Customer, Metavante agrees to continue to provide Services under this Agreement; provided that (a) Metavante's obligation to provide Services shall be limited to the Entities comprising the Customer prior to such Change in Control and (b) Metavante's obligation to provide Services shall be limited in any and all circumstances to the number of accounts processed in the three (3) -month period prior to such Change in Control occurring, plus twenty-five percent (25%). + +16.5. Transmission of Data. If the Services require transportation or transmission of data between Metavante and Customer, the responsibility and expense for transportation and transmission of, and the risk of loss for, data and media transmitted between Metavante and Customer shall be borne by Customer. Data lost by Metavante following receipt shall either be restored by Metavante from its backup media or shall be reprocessed from Customer's backup media at no additional charge to Customer. + +16.6. Reliance on Data. Metavante will perform the Services described in this Agreement on the basis of information furnished by Customer. Metavante shall be entitled to rely upon any such data, information, directions, or instructions as provided by Customer (whether given by letter, memorandum, telegram, cable, telex, telecopy facsimile, computer terminal, e-mail, other "on line" system or similar means of communication, or orally over the telephone or in person), and shall not be responsible for any liability arising from Metavante's performance of the Services in accordance with Customer's instructions. Customer assumes exclusive responsibility for the consequences of any instructions Customer may give Metavante, for Customer's failure to properly access the Services in the manner prescribed by Metavante, and for Customer's failure to supply accurate input information. If any error results from incorrect input supplied by Customer, Customer shall be responsible for discovering and reporting such error and supplying the data necessary to correct such error to Metavante for processing at the earliest possible time. + +16.7. Use of Services. Customer agrees that, except as otherwise permitted in this Agreement or in writing by Metavante, Customer will use the Services only for its own internal business purposes to service its bona fide customers and clients and will not sell or otherwise provide, directly or indirectly, any of the Services or any portion thereof to any Third Party. Customer agrees that Metavante may use all suggestions, improvements, and comments regarding the Services that are furnished by Customer to Metavante in connection with this Agreement, without accounting or reservation. Unless and except to the extent that Metavante has agreed to provide customer support services for Customer, Customer shall be responsible for handling all inquiries of its customers relating to Services performed by Metavante, including inquiries regarding credits or debits to a depositor's account. Metavante agrees to reasonably assist Customer in responding to such inquiries by providing such information to Customer as Metavante can reasonably provide. + +16.8. Financial Statements. Metavante agrees to furnish to the Customer copies of the then-current annual report for the Marshall & Ilsley Corporation, within forty-five (45) days after such document is made publicly available. + +16.9. Performance by Subcontractors. Customer understands and agrees that the actual performance of the Services may be made by Metavante, one or more Affiliates of Metavante, or subcontractors of any of the foregoing Entities (collectively, the "Eligible Providers"). For purposes of this Agreement, performance of the Services by any Eligible Provider shall be deemed performance by Metavante itself. Metavante shall remain fully responsible for the performance or non-performance of the Services by any Eligible Provider, to the same extent as if Metavante itself performed or failed to perform such services. Customer agrees to look solely to Metavante, and not to any Eligible Provider, for satisfaction of any claims Customer may have arising out of this Agreement or the performance or nonperformance of Services. However, in the event that Customer contracts directly with a Third Party for any products or services, Metavante shall have no liability to Customer for such Third Party's products or services, even if such products or services are necessary for Customer to access or receive the Services hereunder. + +© 2006, Metavante Corporation + +13 + + + + + + + +16.10. Solicitation. Neither party shall solicit the employees of the other party for employment during the Term of this Agreement, for any reason. The foregoing shall not preclude either party from employing any such employee (a) who seeks employment with the other party in response to any general advertisement or solicitation that is not specifically directed towards employees of such party or (b) who contacts the other party on his or her own initiative without any direct or indirect solicitation by such party. + +16.11. Taxes. Customer shall be solely and exclusively responsible for the payment of Taxes arising from or relating to the services rendered or material furnished, pursuant to this Agreement. Any other tax or governmental assessment applicable as a result of the execution or performance of any service pursuant to this Agreement, or any materials furnished with respect to this Agreement, including, without limitation, any income, franchise, royalty, privilege, or similar tax on or measured by Metavante's net income, capital stock, franchise or net worth, as well as any municipal license tax imposed on Metavante's volume of business, as a consequence of Metavante being deemed engaged in commercial activities within a Puerto Rico municipality, shall be Metavante's sole and exclusive responsibility. Payments made by Customer to Metavante will be subject to applicable withholding taxes. In the event any taxing authority withholds or intercepts any amount due to Licensor hereunder, which is properly payable by Customer, and after Customer has met withholding requirements, Customer shall pay to Licensor on demand the full amount of such additional withholding or intercepted payment. + +17. GENERAL + +17.1. Governing Law. The validity, construction and interpretation of this Agreement and the rights and duties of the parties hereto shall be governed by the internal laws of the State of New York, excluding its principles of conflict of laws. + +17.2. Venue and Jurisdiction. Intentionally omitted. + +17.3. Entire Agreement; Amendments. This Agreement, together with the schedules hereto, constitutes the entire agreement between Metavante and the Customer with respect to the subject matter hereof. There are no restrictions, promises, warranties, covenants, or undertakings other than those expressly set forth herein and therein. This Agreement supersedes all prior negotiations, agreements, and undertakings between the parties with respect to such matter. This Agreement, including the schedules hereto, may be amended only by an instrument in writing executed by the parties or their permitted assignees. + +17.4. Relationship of Parties. The performance by Metavante of its duties and obligations under this Agreement shall be that of an independent contractor and nothing contained in this Agreement shall create or imply an agency relationship between Customer and Metavante, nor shall this Agreement be deemed to constitute a joint venture or partnership between Customer and Metavante. + +17.5. Assignment. Neither this Agreement nor the rights or obligations hereunder may be assigned by either party, by operation of law or otherwise, without the prior written consent of the other party, which consent shall not be unreasonably withheld, provided that (a) Metavante's consent need not be obtained in connection with the assignment of this Agreement pursuant to a merger in which Customer is a party and as a result of which the surviving Entity becomes an Affiliate or Subsidiary of another bank holding company, bank, savings and loan association or other financial institution, so long as the provisions of all applicable Schedules are complied with; and (b) Metavante may freely assign this Agreement so long as it is (i) in connection with a merger, corporate reorganization, or sale of all or substantially all of its assets, stock, or securities, or (ii) to any Entity which is a successor to the assets or the business of Metavante. + +17.6. Notices. Except as otherwise specified in the Agreement, all notices, requests, approvals, consents, and other communications required or permitted under this Agreement shall be in writing and shall be personally delivered or sent by (a) first-class U.S. mail, registered or certified, return receipt requested, postage pre-paid; or (b) U.S. express mail, or other, similar overnight courier service to the address specified below. Notices shall be deemed given on the day actually received by the party to whom the notice is addressed. In the case of Customer: ORIENTAL FINANCIAL GROUP INC. 997 San Roberto Street Tenth Floor San Juan, PR 00926 Attn.: For Billing Purposes: SAME In the case of Metavante: METAVANTE CORPORATION 4900 West Brown Deer Road Milwaukee WI 53223 Attn: Senior Executive Vice President, Metavante Corp. Copy to: Risk Management and Legal Division + +© 2006, Metavante Corporation + +14 + + + + + + + +17.7. Waiver. No delay or omission by either party to exercise any right or power it has under this Agreement shall impair or be construed as a waiver of such right or power. A waiver by any party of any breach or covenant shall not be construed to be a waiver of any succeeding breach or any other covenant. All waivers must be in writing and signed by the party waiving its rights. + +17.8. Severability. If any provision of this Agreement is held by court or arbitrator of competent jurisdiction to be contrary to law, then the remaining provisions of this Agreement will remain in full force and effect. Articles 5, 8, 9, 0, and 17 shall survive the expiration or earlier termination of this Agreement for any reason. + +17.9. Attorneys' Fees and Costs. If any legal action is commenced in connection with the enforcement of this Agreement or any instrument or agreement required under this Agreement, the prevailing party shall be entitled to costs, attorneys' fees actually incurred, and necessary disbursements incurred in connection with such action, as determined by the court. + +17.10. No Third Party Beneficiaries. Each party intends that this Agreement shall not benefit, or create any right or cause of action in or on behalf of, any person or entity other than the Customer and Metavante. + +17.11. Force Majeure. Notwithstanding any provision contained in this Agreement, neither party shall be liable to the other to the extent fulfillment or performance if any terms or provisions of this Agreement is delayed or prevented by revolution or other civil disorders; wars; acts of enemies; strikes; lack of available resources from persons other than parties to this Agreement; labor disputes; electrical equipment or availability failure; fires; floods; acts of God; federal, state or municipal action; statute; ordinance or regulation; or, without limiting the foregoing, any other causes not within its control, and which by the exercise of reasonable diligence it is unable to prevent, whether of the class of causes hereinbefore enumerated or not. This clause shall not apply to the payment of any sums due under this Agreement by either party to the other. Notwithstanding the foregoing, an event of force majeure shall not excuse Metavante from performing its obligations under the Plan. + +17.12. Negotiated Agreement. Metavante and Customer each acknowledge that the limitations and exclusions contained in this Agreement have been the subject of active and complete negotiation between the parties and represent the parties' voluntary agreement based upon the level of risk to Customer and Metavante associated with their respective obligations under this Agreement and the payments to be made to Metavante and the charges to be incurred by Metavante pursuant to this Agreement. The parties agree that the terms and conditions of this Agreement shall not be construed in favor of or against any party by reason of the extent to which any party or its professional advisors participated in the preparation of this document. + +17.13. Waiver of Jury Trial. Each of Customer and Metavante hereby knowingly, voluntarily and intentionally waives any and all rights it may have to a trial by jury in respect of any litigation based on, or arising out of, under, or in connection with, this Agreement or any course of conduct, course of dealing, statements (whether verbal or written), or actions of Metavante or Customer, regardless of the nature of the claim or form of action, contract or tort, including negligence. + +18. DEFINITIONS. The following terms shall have the meanings ascribed to them as follows: + + A. "ACH" shall mean automated clearing house services. + + B. "Affiliate" shall mean, with respect to Customer, those Entities listed in Exhibit A, attached hereto and any other Entity at any time Controlling, Controlled by, or under common Control of Customer to which Customer and Metavante shall agree in writing that it will receive Services under this Agreement. Metavante's Affiliates are those Entities at any time Controlling, Controlled by, or under common Control of Metavante. + + C. "Agreement" shall mean this master agreement and all schedules and exhibits attached hereto, which are expressly incorporated, any future amendments thereto, and any future schedules and exhibits added hereto by mutual agreement. + + D. "Business Days" shall be Mondays through Fridays except holidays recognized by the Federal Reserve Bank of New York. + + E. "Change in Control" shall mean any event or series of events by which (i) any person or entity or group of persons or entities shall acquire Control of another person or entity or (ii) in the case of a corporation, during any period of twelve consecutive months commencing before or after the date hereof, individuals who, at the beginning of such twelve-month period, were directors of such corporation shall cease for any reason to constitute a majority of the board of directors of such corporation. + + F. "Commencement Date" shall mean the date on which Metavante first provides the Initial Services to Customer. + + G. "Confidential Information" shall have the meaning set forth in Section 13.3. + + H. "Consumer" shall mean an individual who obtains a financial product or service from Customer to be used primarily for personal, family, or household purposes and who has a continuing relationship with Customer. + + I. "Contract Year" shall mean successive periods of twelve months, the first of which (being slightly longer than twelve (12) months) shall commence on the Commencement Date and terminate on the last day of the month in which the first anniversary of the Commencement Date occurs. + + J. "Control" shall mean the direct or indirect ownership of over fifty percent (50%) of the capital stock (or other ownership interest, if not a corporation) of any Entity or the possession, directly or indirectly, of the power to direct the management and policies of such Entity by ownership of voting securities, by contract or otherwise. "Controlling" shall mean having Control of any Entity, and "Controlled" shall mean being the subject of Control by another Entity. + + K. "Conversion" shall mean (i) the transfer of Customer's data processing and other information technology services to Metavante's systems; (ii) completion of upgrades, enhancements and software modifications as set forth in this Agreement; and (iii) completion of all interfaces set forth in this Agreement and full integration thereof such that Customer is able to receive the Initial Services in a live operating environment. + +© 2006, Metavante Corporation + +15 + + + + + + + + + + + + L. "Conversion Date" shall mean the date on which Conversion for Customer or a particular Affiliate has been completed. + + M. "Customer" shall mean the Entity entering into this Agreement with Metavante and all Affiliates of such Entity for whom Metavante agrees to provide Services under this Agreement, as reflected on the first page of this Agreement or amendments executed after the Effective Date. + + N. "Customer Data" means any and all data and information of any kind or nature submitted to Metavante by Customer, or received by Metavante on behalf of Customer, necessary for Metavante to provide the Services. + + O. "Damages" shall mean actual and verifiable monetary obligations incurred, or costs paid (except overhead costs, attorneys' fees, and court costs) which (i) would not have been incurred or paid but for a party's action or failure to act in breach of this Agreement, and (ii) are directly and solely attributable to such breach, but excluding any and all consequential, incidental, punitive and exemplary damages, and/or other damages expressly excluded by the terms of this Agreement. + + P. "Documentation" shall mean Metavante's standard user instructions relating to the Services, including tutorials, on-screen help, and operating procedures, as provided to Customer in written or electronic form. + + Q. "Effective Date" shall mean the date so defined on the signature page of this Agreement, or, if blank, the date executed by Metavante, as reflected in Metavante's records. + + R. "Effective Date of Termination" shall mean the last day on which Metavante provides the Services to Customer (excluding any services relating to termination assistance). + + S. "Eligible Provider" shall have the meaning as set forth in Section 16.9. + + T. "Employment Cost Index" shall mean the Employment Cost Index—Civilian (not seasonally adjusted) as promulgated by the United States Department of Labor's Bureau of Labor Statistics (or any successor index). + + U. "Entity" means an individual or a corporation, partnership, sole proprietorship, limited liability company, joint venture, or other form of organization, and includes the parties hereto. + + V. "Estimated Remaining Value" shall mean the number of calendar months remaining between the Effective Date of Termination and the last day of the contracted-for Term, multiplied by the average of the three (3) highest monthly fees (but in any event no less than the Monthly Base Fee or other monthly minimums) payable by Customer during the twelve (12) -month period prior to the event giving rise to termination rights under this Agreement. In the event the Effective Date of Termination occurs prior to expiration of the First Contract Year, the monthly fees used in calculating the Estimated Remaining Value shall be the greater of (i) the estimated monthly fees set forth in the Fee Schedule(s) and (ii) the average monthly fees described in the preceding sentence. + + W. "Expenses" shall mean any and all reasonable and direct expenses paid by Metavante to Third Parties in connection with Services provided to or on behalf of Customer under this Agreement, including any postage, supplies, materials, travel and lodging, and telecommunication fees, but not payments by Metavante to Eligible Providers. + + X. "Federal Regulator" shall mean the Chief Examiner of the Federal Home Loan Bank Board, the Office of Thrift Supervision, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Federal Reserve Board, or their successors, as applicable. + + Y. "Fee Schedule" shall mean the portions of schedules containing fees and charges for services rendered to Customer under this Agreement. + + Z. "Initial Services" shall mean all Services requested by Customer from Metavante under this Agreement prior to the Commencement Date, other than the Conversion services. The Initial Services requested as of the Effective Date are set forth in the schedules attached hereto, which shall be modified to include any additional services requested by Customer prior to the Commencement Date. + + AA. "Initial Term" shall mean the period set forth on the first page of this Agreement. + + BB. "Legal Requirements" shall mean the federal, Puerto Rico, and state laws, rules, and regulations pertaining to Customer's business. + + CC. "Metavante Proprietary Materials and Information" shall mean the Metavante Software and all source code, object code, documentation (whether electronic, printed, written, or otherwise), working papers, non-customer data, programs, diagrams, models, drawings, flow charts, and research (whether in tangible or intangible form or in written or machine-readable form), and all techniques, processes, inventions, knowledge, know-how, trade secrets (whether in tangible or intangible form or in written or machine-readable form), developed by Metavante prior to or during the Term of this Agreement, and such other information relating to Metavante or the Metavante Software that Metavante identifies to Customer as proprietary or confidential at the time of disclosure. + + DD. "Metavante Software" shall mean the software owned by Metavante and used to provide the Services. + +© 2006, Metavante Corporation + +16 + + + + + + + + EE. "Monthly Base Fee" shall mean the minimum monthly fees payable by Customer to Metavante as specifically set forth in the Services and Charges Schedule. + + FF. "Network" shall mean a shared system operating under a common name through which member financial institutions are able to authorize, route, process and settle transactions (e.g., MasterCard and Visa). + + GG. "New Services" shall mean any services that are not included in the Initial Services but which, upon mutual agreement of the parties, are added to this Agreement. Upon such addition, New Services shall be included in the term "Services." + + HH. "Performance Warranty" shall have the meaning set forth in Section 6.1. + + II. "Plan" shall have the meaning set forth in Section 15.1. + + JJ. "Privacy Regulations" shall mean the regulations promulgated under Section 504 of the Gramm-Leach-Bliley Act, Pub. L. 106- 102, as such regulations may be amended from time to time. + + KK. Professional Services" shall mean services provided by Metavante for Conversion, training, and consulting, and services provided by Metavante to review or implement New Services or enhancements to existing Services. + + LL. "Sensitive Customer Information" shall mean Customer Data with respect to a Consumer that is (a) such Consumer's name, address or telephone number, in conjunction with such Consumer's Social Security number, account number, credit or debit card number, or a personal identification number or password that would permit access to such Consumer's account or (b) any combination of components of information relating to such Consumer that would allow a person to log onto or access such Consumer's account, such as user name and password or password and account number. + + MM. "Services" shall mean the services, functions, and responsibilities described in this Agreement to be performed by Metavante during the Term and shall include New Services that are agreed to by the parties in writing. + + NN. "Service Levels" shall mean those service levels set forth in the Service Level Schedule. + + OO. "Taxes" shall mean any manufacturers, sales, use, gross receipts, excise, personal property, or similar tax or duty assessed by any governmental or quasi-governmental authority upon or as a result of the execution or performance of any service pursuant to this Agreement or materials furnished with respect to this Agreement, except any income, franchise, privilege, or similar tax on or measured by Metavante's net income, capital stock, net worth or municipal license tax imposed on Metavante's volume of business. + + PP. "Term" shall mean the Initial Term and any extension thereof, unless this Agreement is earlier terminated in accordance with its provisions. + + QQ. "Termination Fee" shall have the meaning set forth on the Termination Fee Schedule. + + RR. "Third Party" shall mean any Entity other than the parties or any Affiliates of the parties. + + SS. "Tier 1 Support" shall mean the provision of customer service and technical support to end users. The Metavante customer care agents provide assistance with the following, but not limited to payment verification, payee set up, opening service requests for payment research, user education on how to use the Metavante products, technical support with using and accessing the products, and technical support for some browser issues. + + TT. "Tier 2 Support" shall mean the provision of support to end users for consumer initiated payment issues such as payment not posted, stop payment, late fees, and payment posted for incorrect amount. The Metavante payment research team acts as an advocate to the payee on behalf of the end-user to research and resolve the payment issue in a timely manner. + + UU. "User Manuals" shall mean the documentation provided by Metavante to Customer which describes the features and functionalities of the Services, as modified and updated by the customer bulletins distributed by Metavante from time to time. + + VV. "Visa" shall mean VISA U.S.A., Inc. + +© 2006, Metavante Corporation + +17 + + + + + + + +EXHIBIT A + +LIST OF AFFILIATES OF ORIENTAL FINANCIAL GROUP INC. + +1. Oriental Bank and Trust + +2. Oriental International Bank Inc. + +3. Oriental Mortgage Corporation + +4. Oriental Financial Services Corp. + +5. Oriental Insurance, Inc. + +6. Caribbean Pension Consultants, Inc. + +© 2006, Metavante Corporation + +18 + + + + + + + +CURRENT CAPABILITIES SCHEDULE + +*The information in this schedule, which consists of 17 pages, is intentionally omitted because confidential treatment has been requested pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. The omitted information has been filed separately with the U.S. Securities and Exchange Commission. + +19 + + + + + + + +CONVERSION PLAN SCHEDULE + +The schedule listed below has been developed based on the information provided to date. Time frames and activities are subject to change as the project is further defined. As applicable, in addition to the schedule below, an issues list accompanies this Schedule to outline specific responsibilities, which are part of this Conversion project plan. The issues list documents the parties' understandings and commitments as of the Effective Date, and shall be supplemented throughout the Conversion Period as additional information is made available and further agreements are made by the parties. Weeks Prior To Conversion Event 37 Weeks Project Organization and Administration + + Specific individuals to support this Conversion will be assigned at the Customer and at Metavante. Internal project initiation documents will be completed, and a detailed project plan will be developed at Metavante. 36 Weeks Project Kickoff Meeting + + + +A kickoff meeting is held at the bank to introduce Metavante Conversion Project Management to the Customer's project team. The overall Conversion process will be reviewed. Specific details will be discussed regarding project scope, roles and responsibilities, Conversion major events, and critical success factors. Equipment/Network Assessment + + + +Each office will be visited to record the layout of each location from a network perspective and to inventory existing equipment, including terminals, printers, ATM machines, controllers, and modems. This information will be evaluated to determine requirements for the future. High-Level Application and Operations Review + + + +A discussion of each application will be conducted at a high level to better understand services provided to existing customers. Current operational processes supported, such as item capture, statement rendering, and exception items, will be reviewed as well as interfaces to the current processor to clarify service requirements and special needs. Conversion Tapes Ordered Conversion tapes will be ordered from the appropriate service providers. 30 Weeks Equipment/Network Plan Development + + Based on the Equipment/Network Assessment, an Equipment/Network Plan with a network design and hardware/software requirements will be developed. Staff Training at Metavante + + Key individuals from the Bank will attend application training at Metavante to help with Conversion analysis and to prepare to train others at the Bank. 20 Weeks MIFIL Reports Created + + Metavante reports will be produced using the Conversion test tapes to list each field, all values found in each field, and the number of occurrences of each value. 18 Weeks Product Mapping + + + +Meetings will be conducted with Metavante product support representatives to review the business processes supported by the Bank based on the product knowledge of Bank personnel, current application documentation, and Conversion file record layouts. Each field will be discussed for clarification and determination of the corresponding use on the Metavante System. All backroom support will be reviewed, a general training plan will be developed, and enhancements will be identified. 16 Weeks Training Bank and Training Network Established + + A training Bank will be set up on the Metavante system to facilitate training of Bank staff and testing of the Conversion. The appropriate network and equipment will be installed at designated training locations. 10 Weeks Test Report Review + + Conversion Test Reports will be reviewed by the product support representative with key contacts at the Bank to verify accuracy of the Conversion process. Issues will be identified and addressed. Operational Analysis + + + + + + + + Business processes, as planned, will be reviewed to confirm that system parameters and processes are aligned with operational procedures. Issues will be identified and addressed. + +© 2006, Metavante Corporation + +20 + + + + + + + + Weeks Prior To Conversion Event 6 Weeks Bank Network Installed + + + +The network to support all Bank locations will be installed. As a general rule, one terminal will be installed at each location in preparation for Readiness Review. The remainder of the equipment will be installed during the last few days before the Conversion. 4 Weeks Readiness Review + + + +This is a three-day test of our preparedness for the live Conversion with Metavante project staff on-site for support. Test scripts will be distributed to Bank personnel at each location for data entry on the training Bank. Nightly posting will be run with item capture test files as input, reports will be produced, and the test Bank will be balanced each day. Bank personnel will be asked to support all functions of this test using operational procedures from data entry to balancing. This will give Bank staff a chance to practice using the system and gain confidence before dealing with their customers in a production environment. It also will serve to validate network configuration, interface processes, staff training, and operational procedures. Issues will be identified and addressed. 2 Weeks Final Preparation for Conversion + + + +Technical setup for the Conversion will be reviewed for accuracy, and follow-up calls will be made to external firms supporting the Bank to confirm previously made arrangements (Federal Reserve, current software vendors, ATM support, etc.). A detailed Conversion Weekend Plan will be developed and distributed to all key contacts. 0 Weeks Files Converted, "Live" on Metavante + + Files will be converted to Metavante over Conversion weekend, after posting on the old processor for Friday night. Conversion Support On-Site + + The Metavante project manager and product support representatives will be on-site the week following Conversion to support Bank personnel. + +© 2006, Metavante Corporation + +21 + + + + + + + +STANDARD CONVERSION SERVICES + +(Any Conversion Services not included in this list are subject to Metavante's pricing as provided in Section 5.7 of the Agreement) + +Project Management + +• Overall Implementation Management + +• Manage Conversion Milestones + +• Issue Escalation and Resolution + +• Administer Project Plan + +• Facilitate Periodic Meetings + +• Coordinate Receipt of Data Files + +• Development of Conversion Cut-over Plan + +Project Planning + +• Onsite Scope Definition (products and conversion methods) + +• Onsite Conversion Kickoff + +• Detailed definition of Interfaces and Enhancements + +• Provide Samples of Customer, Internal and Vendor Communication + +• Finalize Project Timeline + +• Understand Elements of Success + +• Define Team Structure/Responsibilities + +• Technical Review to Include Network, Equipment and Training Site Automated Product Conversion of Existing Data + +• Deposits Including Demand, Money Market, NOW, Savings, CD's, IRA's, Passbooks + +• Combined Statements + +• Customer Information System (Tape to Tape) Including Deposits, Loans, Cardbase, Safe Deposit, Internet Banking + +• Integrated Funds Management (Transfers) + +• Safe Box + +• Account Analysis + +• Loans Including Commercial, Consumer, Mortgage/Investor, Revolving Credit, Floor Plans + +• On-Line Collections + +• Overdraft Protection (Loan System) + +• Notepad (existing system only) + +• Collateral + +• Tickler + +• Financial Control/General Ledger + +• Internet Banking + +• Bill Payment + +• Account Reconciliation + +• ATM/Debit Cards + +• Credit Cards/Merchant Services + +• ATM Devices + +Product Set-Ups (If contracted for) + +• On-line Collections + +• Letter Writer + +• Remote Capture to Include Item Processing Transmission + + + + + + + +• Printback to Include Configuration and Setup of BARR System + +• IRS Government Reporting + +• Currency Transaction Reporting + +• Cash Management + +• ACH + +• Exception Desktop Standard Features + +• Metavante Insight + +• Enterprise Contact Management + +• Credit Revue + +• Shared VRU + +• Information Desktop + +• TellerInsight + +• BankerInsight + +• Star View and PC STAR + +• CIS Householding with base plan for Clean CIS (Post Conversion) + +• Relationship Profitability (Post Conversion) + +• Relationship Packaging (Post Conversion) + +• Marketing Suite (Post Conversion) + +• Financial Control/GL Application Interfaces + +• Holding Company Chart and Control File + +• Chart of Accounts + +• Internet Banking + +• Bill Payment + +• Custom Statement Format + +• Bank Control Setups-System Parameters + +• System Generated Reports + +• ATM Management System + +• Print setup for ATM Receipts and Deposit Envelopes (Parameters dependent on device type) + +• Settlement Manager + +• Debit Dispute System + +• Predictive Risk Management + +• Card Activation + +• Card Personalization with no re-issue + +• GHR Lending + + • Wholesale Website + + • Consumer Lending + + • Mortgage Lending + +• Image Solutions + + • Vision Content (Reports, Deposits, Lending, COLD) + + • Metavante Long Term Archive (7 years) + +Product Definition + +• Review of Current Processor Files and Customer Disclosure Information + +• Onsite Product Review and Mapping of Some Applications + +• Creation of Data Extracts from Current Processor Files + +• Branch Software Customization Requirement Definition + + + + + +• Automated Data Mapping Tools + +• Assist with MICR Document Definition + +• Assist with Output Form Definition + +Testing/Verification + +2 Full Test Files and Live Conversion File + +• Duplicate Account Checks and Renumbering of Duplicates + +• One-time Creation of File to Order New Documents for Duplicate Accounts + +• Conversion Program Coding + +© 2006, Metavante Corporation + +22 + + + + + + + +• Branch Software Testing + +• System to System Reconciliation + +• Reconcile Converted Applications to Converted GL + +• Internal Verification of Converted Data + +• Test "End of Day" Processing + +• Testing the Item Processing Transmissions to Include POD, Bulk File and Inclearings + +• Testing of Report Transmission and Print + +Customer Acceptance + +• Provide Test Report and Mapping Specifications for Verification + +• One Set of Pre and Post Verification Reports Provided + +• Provide Guidance For: + + • Converted Data Verification By Customer + + • System Parameter Review + + • Review and Testing of All Software Customization + +• Test Report Provided on CD ROM or Transmission to Optical + +Monetary History Conversion + +• Retirement Transactions + +• No Book Transactions for Passbooks + +• Year-to-Date Interest for Both Loans and Deposits + +• Year-to-Date Withholding (back-up and retirement distribution) + +• Year-to-Date Penalty (forfeiture) + +• Retirement Contributions + +• Retirement Distributions + +• Investor Loan History Since Last Cut-off + +• History for Current Year and 2 Prior Years on General Ledger-Balances Only + +• General Ledger Current Year Budget + +• Outstanding Billing Amounts + +Technical Setup Coordination + +• Installation of Network Circuits and Communication Equipment + +• Setup Training Site + +• Setup Branch Training Workstations + +Training (See Conversion Training Document) + +• Provide "Needs Analysis" to Assist in Determining Training Requirements + +• Provide Tools to Assist in Developing a Training Plan + +• Establish a Production Bank in the Conversion Process to Facilitate Training + +• Train-the-Trainer Classes at a Metavante Location for Core Applications + +• On-site Branch Software Training + +Operational Analysis + +• Joint Review of Workflow/Business Processes + +• Process Documented by Job Function + +Readiness Review + +• A Coordinated Three Day Event Testing Daily Activities/Workflow + +• Processing in a Production Environment: + + + + + + • POD Capture and Posting of Test Data + + • EOD Processing + + • ATM Loads and Communications + +• Onsite Support and Management + +• Customized Application Checklists and Sample Scripts Provided + +• Management Report Identifying Areas of Risk and Follow-up + +• Introduction to Client Relationship Manager + +Stabilization Period + +• All Conversion Programs and Software Customization is Frozen to Ensure Stable Environment + +• Managed Process For Changes Required During This Period + +Conversion Cut-over + +• Implement Conversion Cut-over Plan + +• Convert Production Files From Current Processor After Friday Night Posting + +• Data Conversion Verification + +• Convert ATM Devices + + • 1-50-converted conversion week + + • >50-converted 2-4 weeks prior to conversion week + +• System to System Reconciliation + +• Conversion Reports on CD ROM + +• Assistance in Coordinating: + + • Equipment Installation + + • Deployment and Certification of Final Branch Automation Software + +Conversion Week + +• Centralized Onsite Management and Application Support + +• Conduct Daily Management Meetings + +• Document and Monitor Issues + +• Reconcile Converted Applications to General Ledger and Support Daily Balancing Activity Related to Converted Applications + +• Monitor Daily Proof Process + +Post Conversion + +• Support for first Account Analysis Statement + +• Support for first Investor Cutoff + +• Year-end Testing + +• Transition to Ongoing Support Area Two Weeks After Conversion Date + +• Transition to Client Relationship Manager + +© 2006, Metavante Corporation + +23 + + + + + + + +ADDITIONAL CUSTOMER CONVERSION RESPONSIBILITIES + + 1. Customer shall develop the MS Access based IRA companion application required to accommodate the following: + + a. YTD and Life-to-date taxable vs. non-taxable interest & principal on contributions and distributions (must allow for update of this information based upon transactions passed from Metavante) + + b. Records of early payment of taxes which also reduces total taxable base + + c. Must accept a file from BIC of all automated transactions daily (interest, ACH, automated distributions, etc) and update totals buckets + + d. Indicator must be held of accounts which need to do reporting at end of year of 1st year contributions as 480.7 + + e. Any other information not stored by the Metavante Deposit system required for Puerto Rican processing of IRA's + + 2. Customer will be responsible to input account information in the above application to prepare it for live processing post conversion. This information may need to be gathered from a variety of sources including Excel spreadsheets, and historical documents. The information entered must be balanced against the information converted to the Metavante Deposit system. + + 3. Customer will be responsible to scan all documents to Vision Content (Treev) associated with IRA's, and Loans that the bank wishes to have available to support operations post conversion. + + 4. Customer will be responsible to build and input all scripts in Spanish into Enterprise Contact Management used for service, sales, and call requests. Metavante will train Customer in the manner to accomplish this authoring. + + 5. Customer will be responsible to create all forms for deposit new account origination using Liquid Office in both Spanish and English. Metavante will provide consulting assistance to train Customer personnel in this task. + + 6. Customer is responsible to create all custom forms required for their lending programs. Should Customer wish to license any VMP forms in addition to the standard documents provided by GHR, a contract directly with VMP will be required. + + 7. Customer must also create the 480.x form in Word (for data merge) that will be fed from Metavante per items a, b, and c below + + a. daily extract of new IRA's for generation of form 480.x — fed to Word for notice print + + b. daily extract of closed IRA's for generation of form 480.x — fed to Word for notice print + + c. end of year extract of new IRA's fed by ACH for generation of form 480.x — fed to Word for notice print + + 8. Customer will be responsible to create the Word template to receive the file for data merge and notice production of new Investor CD's and IRA's on a specific day of the month. + + 9. Customer will be responsible to work with Bankware to accept Metavante's standard Asset/Liability feed in order to produce the required reporting. + + 10. Customer will be responsible to work with Easy Call to accept Metavante's standard Call Report feed in order to produce the required reporting. + + 11. Customer will be responsible to create the extract from the BIC that will be passed to CRA Wiz. Metavante will provide consulting to assist in the bank understanding how to accomplish this. + + 12. Customer will be responsible to establish the Excel spreadsheet to accept data from Metavante used in calculating incentive compensation for deposits and loans. + + 13. Customer will be responsible to work with USBA to accept Metavante's standard Baker Hill One Point feed in order to produce the required reporting. If modifications are required assumes bank will accomplish this through a 3rd party provider and an ETL tool or by creating a special extract using the BIC. + + 14. Customer to provide resources to identify language requirements for: + + a. bilingual versions of all deposit/loan statements, bills, collection letter, and notices + + b. bilingual retirement statements + + c. bilingual safebox notices + + d. bilingual retirement notices + + 15. Customer will be responsible to assist in testing, and provide required Symposium resources to assist with Metavante questions to develop a CTI interface for the following: + + a. real-time TAPI interface for screen pop to ECM + + b. ECM scripting to Symposium soft-phone for outbound calling + + 16. Customer will fund S1 development for integration and setup as follows: + + a. S1 setup required to utilize Metavante EII for presentation of e-statements and calling of check images + + b. S1 setup required to change over and test integration to Metavante through Connectware V6 + + c. S1 setup required to receive batch BAI2 files from Metavante Deposits and Loans for prior day balances and activity (consulting with Metavante and version upgrade) + + + + + + 17. Customer will be responsible to contract with Peoplesoft to accommodate any changes necessary to accept Metavante's standard daily general ledger interface file. + + 18. Customer will be responsible to either 1) certify their existing receipt printers for tellers meet Metavante specifications or 2) acquire printers that meet Metavante specifications. + + 19. Customer will be responsible to provide data files in an acceptable format (flat files with associated copy books, each record containing appropriate key fields, e.g. account number) of all applications to be converted to Metavante from the appropriate source applications, e.g. Bankway, Onbase, CRM, and any others. If field data required for Metavante conversions is not available in the + +© 2006, Metavante Corporation + +24 + + + + + + + + files provided by Customer, and appropriate default values cannot be determined, Customer will be responsible to enter the required data, or provide complementary data files of the missing information. + + 20. File transmissions to/from 3rd party entities will come by way of the PC Barr located at Customer's location, and will traverse the backbone between Metavante and Customer. Typically files sent from Metavante to a 3rd party, or from a 3rd party to Metavante will contain JCL that will be recognized by the PC Barr for automatic routing. However, if the 3rd party requires the use of special software for the transmission of the files, e.g. NDM, additional costs may be incurred by Customer f or Metavante to setup, test, certify, and perform the transmission(s) in a different fashion. + +© 2006, Metavante Corporation + +25 + + + + + + + +CONVERSION TRAINING AND EDUCATION + +*The information in this schedule, which consists of three pages, is intentionally omitted because confidential treatment has been requested pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. The omitted information has been filed separately with the U.S. Securities and Exchange Commission. + +26 + + + + + + + +SERVICES AND CHARGES SCHEDULE + +*The information in this schedule, which consists of eight pages, is intentionally omitted because confidential treatment has been requested pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. The omitted information has been filed separately with the U.S. Securities and Exchange Commission. + +27 + + + + + + + +PLANNED ENHANCEMENT AND INTERFACE SCHEDULE + +*The information in this schedule, which consists of seven pages, is intentionally omitted because confidential treatment has been requested pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. The omitted information has been filed separately with the U.S. Securities and Exchange Commission. + +28 + + + + + + + +SERVICE LEVEL SCHEDULE + +1. GENERAL PROVISIONS + +1.1 Introduction. This Service Level Schedule identifies Service Levels for the Services obtained by Customer from Metavante. These Service Levels are set forth below. + +1.2 Definitions. In addition to the terms defined in Section 18 in the Agreement, the following terms have the following meanings and shall be equally applicable to the singular and plural forms: + + A. "ACH Services" shall mean Services whereby Metavante: initiates and/or receives automated clearing house debit and credit entries, and adjustments to debit entries and credit entries to accounts of End Users; and § credits and/or debits the same to such accounts. + + B. "Availability" shall mean that the Service associated with the applicable Service Level is available to Customer and End Users, as applicable, as contemplated by this Agreement and is functioning normally in all other material respects as defined in each description of each Service Level set forth in this Service Level Schedule. + + C. "Business Case Assessment" shall have the meaning set forth in Section 2 of Attachment A to this Service Level Schedule. + + D. "Business Day" shall mean each Monday through Friday except holidays recognized by the Federal Reserve Bank of New York. + + E. "Business Intelligence Center" or "BIC" shall mean the information support system implemented by Metavante to access key business information contained in the Data Warehouse. The tools included in the BIC offering are designed to support both casual and power Customer users. The Software for the so-called client portion of the BIC offering (which includes Data Warehouse-related Software and report writing Software) will reside on equipment located at Customer facilities; all other elements of the Software for the BIC offering will reside at Metavante facilities. BIC may be operated by Customer's or Metavante's personnel. + + F. "Card Management System" or "CMS" is a tool accessible by Customer that provides online inquiry and maintenance, card issuance, transaction authorization and customer account management for debit, prepaid debit and ATM card programs. + + G. "CIS" means Customer Information System. + + H. "Core System" shall mean the following elements of the Metavante System: the so-called Deposit System, the so-called Loan System and CIS. + + I. "Critical Operations Reports" shall mean each of the following reports: Loan System (R6000-R7530) and Deposit System (R1000-2640 and R2669-R4998), and all enhancements and replacements therefor. + + J. "Demarcation" shall mean the measure from the router into the host, the round trip into the host, then back into the router. + + K. "Data Warehouse" shall mean Metavante's data warehouse commonly known as "Business Intelligence Center" (which includes the tool commonly known as "Business Objects"), and any permitted successors and replacements therefor. + + L. "Lending Solutions" shall mean the following elements of the Metavante System: the so-called GHR Wholesale Web Site, the so-called GHR Consumer Lending Solution and the so-called GHR Mortgage Lending Solution. + + M. "EFD" shall mean electronic funds delivery. + + N. "Operations Center" shall mean the data center from which Metavante provides the Services. + + O. "Processing Day" shall mean any Monday through Saturday except holidays recognized by the Federal Reserve Bank of New York, other than the following holidays which shall each be deemed to be a Processing Day: Martin Luther King Day, President's Day, Columbus Day and Veterans Day. + +© 2006, Metavante Corporation + +29 + + + + + + + + P. "Scheduled Downtime" shall mean any period of non-Availability due to scheduled maintenance as set forth in each description of each Service Level set forth in this Service Level Schedule and other maintenance periods agreed to in writing in advance by the parties. + + Q. "Scheduled Hours of Availability" shall mean the period of time during which Availability is measured for a given Service Level as set forth in each applicable description of each Service Level set forth in this Service Level Schedule. + + R. "Service Level Change" shall have the meaning set forth in Section 2 of Attachment A to this Service Level Schedule. + + S. "Service Level Credit" shall have the meaning set forth in Section 1.4 A of this Service Level Schedule. + + T. "Service Level Credit Event" shall have the meaning set forth in Section 1.5 of this Service Level Schedule. + + U. "Service Level Failure" shall have the meaning set forth in Section 1.4D of this Service Level Schedule. + + V. "Service Level Monthly Cap" shall have the meaning set forth in Section 1.4B of this Service Level Schedule. + + W. "SLA Team" shall have the meaning set forth in Section 3A of Attachment A to this Service Level Schedule. + + X. "Tandem/BASE24" shall mean the application responsible for receiving transaction authorization data from POS, ATM devices and EFT associations. The transaction authorization data is then delivered to host applications for authorization decisions via external associations or directly to the Card Management System. + +1.3 Reporting On Service Levels. + + A. Except as otherwise expressly provided in this Service Level Schedule, all Service Levels shall be measured consistently on a calendar month basis. No later than thirty (30) days following the end of each month, Metavante shall provide Customer with a monthly performance report for the Services, which report shall include its performance with respect to each of the Service Levels, including: a. Metavante's performance against, and calculations with respect to, each Service Level during the preceding month and prior months; and b. Service Level Failures occurring during the preceding month. Such measurement, monitoring and reporting shall permit Customer to verify compliance with the Service Levels. + + B. Metavante shall promptly investigate, assemble and preserve pertinent information with respect to, report on the causes of and correct all performance related failures associated with, Service Levels, including performing and taking appropriate preventive measures to prevent recurrence. In addition, Metavante shall provide Customer with communications as soon as reasonably practicable with respect to issues that impact or could reasonably be expected to impact Customer. Metavante shall use commercially reasonable efforts to minimize recurrences of such failures for which it is responsible. Customer shall use reasonable efforts to correct and minimize the recurrence of problems for which Customer is responsible and that prevent Metavante from meeting the Service Levels. Metavante shall use commercially reasonable efforts to resolve all problems and requests within the scope of Services notwithstanding whether any Service Level has or has not been met, and shall notify Customer promptly of any such unresolved issues known to it. + + C. Metavante shall maintain reasonable supporting information for each monthly performance report for at least fifteen (15) months and shall, at Customer's request, make such information available to Customer. + + D. Metavante shall notify Customer promptly in such form and format as the parties mutually agree if Customer becomes entitled to a Service Level Credit. The notice shall specify each Service Level Credit Event and each associated Service Level Failure and the amount of the Service Level Credit that Customer is entitled to receive. + +1.4 Service Level Credits. + + A. A "Service Level Credit" shall mean a percentage credit based on the invoice to be submitted by Metavante to Customer with respect to the Services provided in the month in which a Service Level Failure occurs based on Metavante's performance relative to the Service Levels. A Service Level Credit is a reduction in price to reflect the reduced value of the Services and is not liquidated damages for Metavante's failure to meet any Service Level. However, a Service Level Credit shall be an exclusive remedy with respect to a Service Level Failure and shall be in lieu of other contractual remedies except as provided for in Section 8 of this Agreement. Metavante shall apply Service Level Credits to Customer's invoice in the month following the event giving rise to the Service Level Credit. If no additional invoices are to + +© 2006, Metavante Corporation + +30 + + + + + + + + be issued by Metavante, Metavante shall pay Customer the amount of the Service Level Credit in immediately available funds. + + B. Service Level Credits applied during any month shall not exceed twenty percent (20%) of the applicable monthly invoice prior to the application of any credits (the "Service Level Monthly Cap"). + + C. Service Level Credits payable by Metavante to Customer during any calendar year shall not exceed one hundred percent (100%) of the average monthly fees payable by Customer to Metavante during the previous calendar year prior to the application of any credits. + + D. Service Level Failure. A "Service Level Failure" occurs whenever Metavante fails to meet a Service Level. Metavante shall be excused for a Service Level Failure to the extent the Service Level Failure is attributable to: + + (i) an event to the extent excused under Section 17.11 of the Agreement, or + + (ii) acts or omissions of Customer. + +1.5 Service Level Credit Event. A "Service Level Credit Event" occurs when a Service Level Failure occurs or a series of Service Level Failures occur to the extent specified in this Service Level Schedule. + +1.6 Effective Date of Applicability. Service Levels set forth in this Service Level Schedule shall be applicable the month following the month in which the Commencement Date occurs. + +1.7 Time Periods. Except as otherwise specified, all references to days are to calendar days and all references to hours/minutes are to hours/minutes during a calendar day. All references to times are to Atlantic time; all references to months and quarters are to calendar months and calendar quarters, respectively, unless otherwise specified; all references to weeks are to calendar weeks, with the first day of each week being Sunday. For clarification purposes only, it is understood that currently Atlantic time is one hour ahead of Central time during those periods in which day light savings time is observed and two hours ahead of Central time during non-daylight saving time periods. + +1.8 Periodic Review. + + A. Periodic Review. Upon either party's request from time to time, the parties may periodically review the performance categories, metrics and Service Levels and modify, add or delete them in accordance with the change process set forth in Attachment A to this Service Level Schedule. + + B. Service Level Review. From time to time, the parties shall meet to discuss performance with respect to, and matters relating to, the Service Levels. + +2. SERVICE LEVELS + +2.1 Core System Service Level. + + A. The "Core System Service Level" means that each of the Core Systems shall have ninety-nine percent (99%) Availability. "Availability" means the ability of Customer to access each of the Core Systems and perform transactions necessary to complete the function within each of such Core Systems with up to date information during the Scheduled Hours of Availability. The Scheduled Hours of Availability for the Core System Service Level shall be 7:00 a.m. to 10:00 p.m. each Processing Day. No Schedule Downtime shall exist unless otherwise agreed in writing between the parties. Metavante's obligation under this Service Level is subject to Customer meeting its 11:00 p.m. input data commitment. However, up to 1:00 a.m., Metavante commits to the 7:00 a.m. online availability from the time Metavante receives Customer input data. + + B. A Service Level Credit Event for the Core System Service Level shall occur if Availability is ninety six and one-half percent (96.5%) or less three times in any consecutive six month period. The Service Level Credit shall be six percent (6%). + +© 2006, Metavante Corporation + +31 + + + + + + + +2.2 Lending Solutions Service Level. + +A. The "Lending Solutions Service Level " means that each of the Lending Solutions shall have availability via the Internet of 98% as measured on a 30 day running average. "Availability" means the ability of the Customer to access each of the Lending Solutions and perform transactions necessary to complete the function within each of the Lending Solutions with up to date information during the Scheduled Hours of Availability. The Scheduled Hours of Availability for the Lending Solutions Service Level shall be from 7:00 AM to 10:00 PM each Processing Day. However, (a) once per calendar quarter, the Lending Solutions may be unavailable for up to six (6) hours for maintenance or network upgrading form 1:01 a.m. to 7:00 a.m., Monday through Friday, and (b) once per calendar quarter, the Lending Solutions may be unavailable for up to twenty-four (24) hours for maintenance or network upgrading from 1:01 a.m. Sunday to 1:01 a.m. Monday . + +B. A Service Level Credit Event for the Lending Solutions Service Level shall occur if Availability is ninety five percent (95%) or less three times in any consecutive six month period. The Service Level Credit shall be six percent (6%). + +2.3 Operations Center Availability Service Level. + + A. The "Operations Center Availability Service Level" means that communications between Customer's network and the Operations Center shall have ninety-nine and nine-tenths percent (99.9%) Availability. "Availability" means that there are communications between Customer's network and the Operations Center during Scheduled Hours of Availability. The Scheduled Hours of Availability for the Operations Center Availability Service Level shall be twenty four hours a day, seven days per week. Scheduled Downtime for the Operations Center Availability Service Level is: a. Sundays between 2:00 a.m. and 6:00 a.m.; b. other planned outages of up to one (1) hour per month in the aggregate, provided that Metavante shall notify Customer of any such planned outages using Metavante's InfoSource notification system at least twenty four (24) hours prior to the planned outage specifying the duration of the planned outage, it being understood that if such outage exceeds the duration of the planned outage, such outage shall not be deemed to be Scheduled Downtime; c. downtime if Customer elects not to have SNS back-up capabilities; and d. equipment maintenance periods that are mutually agreed upon in writing in advance. + + B. A Service Level Credit Event for the Operations Center Availability Service Level shall occur if Availability for a month is ninety six and one-half percent (96.5%) or less three times in any consecutive six month period. The Service Level Credit shall be eight percent (8%). + + C. For the avoidance of doubt, the Operations Center Availability Service Level measures network transport and not necessarily Customer's experience. For example, a Customer user may assume the network is the cause of an issue when in fact the actual issue is something other than the wide area network (WAN). + +2.4 Business Intelligence Center Service Level. + + A. The "Business Intelligence Center Service Level" means that the BIC shall have ninety-eight percent (98%) Availability. "Availability" means that the BIC is accessible for use by Customer to access the Data Warehouse and that the same is functioning normally in all material respects during Scheduled Hours of Availability. The Scheduled Hours of Availability for the Business Intelligence Center Service Level shall be 7:00 a.m. to 6:00 p.m. each Processing Day. Scheduled Downtime for the Business Intelligence Center Service Level is Sundays. + + B. A Service Level Credit Event for the Business Intelligence Center Service Level shall occur if Availability for a month is ninety five percent (95%) or less for the Business Intelligence Center Service Level occurs three times in any consecutive six month period. The Service Level Credit shall be four percent (4%). + +2.5 Business Intelligence Center Prior Day Data Updates Service Level. + + A. The "Business Intelligence Center Prior Day Data Updates Service Level" means that each Processing Day, Metavante shall initiate and complete associated processing with respect to the BIC no later than 7:00 a.m. the following Business Day after Metavante has received all required posting input data, provided that such data is received no later than 11:00 p.m. on the Processing Day. + +© 2006, Metavante Corporation + +32 + + + + + + + + B. A Service Level Credit Event for the Business Intelligence Center Processing Service Level shall occur if three or more Service Level Failures occur in any month with respect to the Business Intelligence Center Processing Service Level. The Service Level Credit shall be four percent (4%). + +2.6 Batch Report Service Level. + + A. The "Batch Report Service Level" means that each Processing Day, Metavante shall initiate batch processing with respect to all batch reports and have such processing completed and all Critical Operations Reports available for Customer to obtain from Metavante's systems within four (4) hours after Customer's submission to Metavante of a so-called end of day command, provided that Metavante has received from Customer all required posting input data no later than 11:00 p.m. on the Processing Day. However, up to 1:00 a.m., Metavante commits to a rolling four (4) hours from the time Metavante receives Customer input data. + + B. A Service Level Credit Event for the Daily Batch Report Service Level shall occur if a Service Level Failure occurs with respect to the Daily Batch Report Service such that associated processing is not completed and such reports are not available for Customer to obtain by 10:00 a.m. the following day three or more times in any month with respect to the Daily Batch Report Service Level. In each case, the Service Level Credit shall be four percent (4%). + +2.7 Year-End Batch Report Service Level. + + A. The "Year-End Batch Report Service Level" means that Metavante shall initiate batch processing with respect to all year-end batch reports and have such processing completed and all such reports available for Customer to obtain from Metavante's systems within fifteen (15) hours after Customer's submission to Metavante of a so-called end of year command, provided that such end of year command is issued no later than 1:00 a.m. the day following the last Processing Day of the applicable year. + + B. A Service Level Credit Event for the Year-End Batch Report Service Level shall occur if Metavante commits a Service Level Failure with respect to the Year-End Batch Report Service Level such that associated processing is not completed and such reports are not available for Customer to obtain by 6:00 a.m. the first Business Day following the submission to Metavante of a so-called end of year command. The Service Level Credit shall be four percent (4%). + +2.8 Tandem/Base 24 Electronic Funds Delivery Service Level. + + A. The "Tandem Electronic Funds Delivery Service Level" means that Tandem/Base 24 shall have ninety-nine and seven tenths percent (99.7%) Availability. "Availability" means Tandem/Base 24 is available and operational and is functioning normally in all material respects with respect to all functions during Scheduled Hours of Availability. The Scheduled Hours of Availability for the Tandem Electronic Funds Delivery Service Level shall be twenty four hours a day, seven days per week. Scheduled Downtime for the Tandem Electronic Funds Delivery Service Level is Sundays between 2:00 a.m. and 6:00 a.m. + + B. A Service Level Credit Event for the Tandem Electronic Funds Delivery Service Level shall occur if Availability for a month is ninety eight percent (98%) or less three times in any consecutive six month period. The Service Level Credit shall be six percent (6%). + +2.9 CMS Electronic Funds Delivery Service Level. + + A. The "CMS Electronic Funds Delivery Service Level" means that CMS shall have ninety-nine and five tenths percent (99.5%) Availability. "Availability" means CMS is available and operational and is functioning normally in all material respects with respect to all functions during Scheduled Hours of Availability. The Scheduled Hours of Availability for the CMS Electronic Funds Delivery Service Level shall be twenty four hours a day, seven days per week. Scheduled Downtime for the CMS Electronic Funds Delivery Service Level is Sundays between 2:00 a.m. and 6:00 a.m. + + B. A Service Level Credit Event for the CMS Electronic Funds Delivery Service Level shall occur if Availability for a month is ninety eight percent (98%) or less three times in any consecutive six month period. The Service Level Credit shall be six percent (6%). + +© 2006, Metavante Corporation + +33 + + + + + + + +2.10 EFD Reports Service Level. + + A. The "EFD Reports Service Level" means that each day, Metavante shall initiate processing with respect to all daily EFD reports and have all such processing completed and all such reports available for Customer to obtain from Metavante's systems by 3:00 a.m. the following day. + + B. A Service Level Credit Event for the EFD Reports Monthly Service Level shall occur if a Service Level Failure occurs with respect to the EFD Reports Service Level such that such reports are not available for Customer to obtain by 3:00 p.m. the following day three times in a month. The Service Level Credit for each such Service Level Failure shall be six percent (6%). + +2.11 Teller Transactions Response Time Service Level. + + A. The "Teller Transactions Response Time Service Level" means that Metavante shall process so-called teller transactions in an average of 1.5 seconds or less from the time that the transaction is sent by Customer's point of demarcation to the time the processed data is returned to Customer's point of demarcation. The Scheduled Hours of Availability for the Teller Transactions Response Time Service Level shall be 7:00 a.m. to 10:00 p.m. each Processing Day. + + B. A Service Level Credit Event for the Teller Transactions Response Time Service Level shall occur if Metavante processes so- called teller transactions in a month in an average of 5 seconds or more from the time that the transaction is sent by Customer's point of demarcation to the time the processed data is returned to Customer's point of demarcation three times in any consecutive six month period. The Service Level Credit shall be six percent (6%). + +2.12 CRT Transactions Response Time Service Level. + + A. The "CRT Transactions Response Time Service Level" means that Metavante shall process so-called CRT transactions in an average of 2.5 seconds or less from the time that the transaction is sent by Customer's point of demarcation to the time the processed data is returned to Customer's point of demarcation. The Scheduled Hours of Availability for the CRT Transactions Response Time Service Level shall be 7:00 a.m. to 10:00 p.m. each Processing Day. + + B. A Service Level Credit Event for the CRT Transactions Response Time Service Level shall occur if Metavante processes so- called CRT transactions in a month in an average of 6 seconds or more from the time that the transaction is sent by Customer's point of demarcation to the time the processed data is returned to Customer's point of demarcation three times in any consecutive six month period. The Service Level Credit shall be six percent (6%). + +© 2006, Metavante Corporation + +34 + + + + + + + +ATTACHMENT A + +SERVICE LEVEL SCHEDULE + +Service Levels may be added or modified through the process set forth in this Attachment A to the Service Level Schedule in order to achieve a fair, accurate, meaningful and consistent measurement of Metavante's performance of the Services. + +1. TRIGGER EVENTS. Events or changes that significantly affect Customer's requirements or Metavante's delivery of the Services may trigger a party's desire to delete or modify existing Service Levels or add new Service Levels. Such events and changes include changes in Customer's business, elimination or addition of Services, regulatory requirements, audit requirements, emerging technology, elimination of technology, external benchmarks and annual review processes between the parties. + +2. BUSINESS CASE ASSESSMENT. Upon identifying a party's desire to add, delete or modify a Service Level (a "Service Level Change"), the parties shall prepare a written analysis of the Service Level Change (a "Business Case Assessment"), including, as appropriate: + + A. Details of the Service Level Change (e.g., measuring tool and methodology, Service Level calculation, exclusions, associated Service Level Credit, projected implementation/effective date); + + B. Objective or expected benefit; + + C. Implementation difficulty, effort and cost, if any, and responsibility therefor; + + D. Cost, if any, and any possibility of mitigation; + + E. Risk factors (e.g., operational, regulatory, controls); + + F. Degree of change; + + G. Nature and extent of impact upon the parties; + + H. Combinational impacts (i.e., how one Service Level affects another); + + I. System implications; and + + J. Issues relating to Applicable Law. + +3. SLA TEAM REVIEW. + + A. A joint Metavante-Customer team (the "SLA Team") shall review, evaluate and potentially modify the Service Level Changes and associated Business Case Assessments. + + B. At a minimum, the SLA Team shall consist of personnel designated by the parties as necessary for an effective review of the Business Case Assessments. The SLA Team shall operate and make decisions by consensus among the parties' representatives, but approval of proposed Service Level Changes shall not be unreasonably withheld or delayed. With respect to each Service Level Change, the SLA Team shall elect one of three results: + + I. terminate consideration of the Service Level Change without further review; + + II. remand the associated Business Case Assessment to the parties for reconsideration based upon SLA Team's comments; or + + III. approve the Service Level Change for submission for signoff. + +© 2006, Metavante Corporation + +35 + + + + + + + +4. SIGNOFFS. Before being delivered to Metavante for implementation, the Service Level Change must be reviewed for signoff by Customer and Metavante. If the Service Level Change fails to obtain a required signoff, the SLA Team shall decide whether it should be discarded or refined and resubmitted for signoff. Signoff shall not be unreasonably withheld, delayed or conditioned. Upon sign-off, the parties shall amend in writing the Service Level Schedule accordingly. + +5. IMPLEMENTATION. Metavante shall develop a detailed project plan for implementation of each approved Service Level Change. Each plan shall be subject to Customer approval, which approval shall not be unreasonably withheld, delayed or conditioned, and shall include: + + A. a project schedule; + + B. required updates to this schedule and other affected policies, procedures and standards; + + C. a communication plan; and + + D. required changes to systems, reporting schedules, training and processes. + +© 2006, Metavante Corporation + +36 + + + + + + + +TERMINATION FEE SCHEDULE + +1. Termination for Convenience. Except as set forth in paragraph 3 of this Schedule, if Customer elects to terminate this Agreement or any Service for any reason, Customer shall pay Metavante the termination fee computed in accordance with Section 8.4 of this Agreement. + +2. Termination for Cause by Metavante. If Metavante terminates this Agreement in accordance with Sections 8.2 or 8.3 of the Agreement, then Customer shall pay Metavante the termination fee computed in accordance with Section 8.4 of this Agreement. + +3. Termination Fee. Shall be determined as set forth in Section 8.4 of the Agreement. + +4. Rebate of Termination Fee. Subject to Metavante' rights under Section 6 below, Customer shall receive a rebate of a portion of any Termination Fee paid by Customer hereunder in the event that Customer shall enter into a new exclusive agreement with Metavante to receive the Initial Services within six (6) months following the Effective Date of Termination. Such rebate shall be determined according to the following schedule: Number of Months Following Termination Rebate 1 100% 2 5/6 3 4/6 4 3/6 5 2/6 6 1/6 + +5. Payment of Rebate. The applicable rebate of the Termination Fee shall become payable to Customer upon execution of a new exclusive agreement for Initial Services by and between Customer and Metavante within six (6) months following the Effective Date of Termination (the "New Agreement"). The terms of such New Agreement shall be as mutually agreed by the parties and nothing herein shall obligate Metavante or Customer to accept any terms or conditions, whether or not previously acceptable to either of them. The rebate may be paid to Customer by Metavante, in its sole discretion, in the form of a discount to fees payable by Customer under the New Agreement or as a credit against implementation, conversion, training, or professional services fees payable by Customer, or in such other manner as Metavante shall decide. + +6. Revocation. Customer's right to receive the rebate of the Termination Fee as provided under Section 5 of this Schedule may not be cancelled or revoked except by a written instrument that is (a) signed by Metavante expressly revoking Customer's right to receive such rebate; and (b) delivered to Customer by Metavante within thirty (30) days following the date of termination of this Agreement. + +© 2006, Metavante Corporation + +37 + + + + + + + +MasterCard® SecureCode™ Service Participation Schedule + +The Undersigned ("Customer") and Metavante Corporation have executed a Services Agreement pursuant to which Metavante has agreed to perform certain services in support of Customer's participation in the card program of MasterCard International Inc. (the "Services Agreement"). Effective November 1, 2004, MasterCard International Inc. has established the MasterCard® SecureCode™ Program (the "SecureCode Program") which establishes a protocol for authenticating cardholders in online transactions. Participation in the SecureCode Program is mandatory for Acquirers and Issuers. By signing below, Customer requests to participate in the SecureCode Program as an Issuer. + +For good and valuable consideration, receipt of which is hereby acknowledged, Customer agrees as follows: + + 1. Customer authorizes and directs Metavante to enroll Customer in the SecureCode Program as an Issuer. As Customer's third party processor for MasterCard transactions, Metavante will provide services as described in Exhibit A for Customer in support of its participation in the SecureCode Program in accordance with the terms and subject to all terms, limitations, and conditions of the Services Agreement, but Metavante has no responsibility or obligation for the SecureCode Program itself. Customer acknowledges and agrees that this is Metavante's sole responsibility in connection with the SecureCode Program and that Metavante will have no other obligation or liability to Customer related to the Program. + + 2. Customer will pay the additional fees to Metavante as described in Exhibit A hereto and any and all fees assessed by MasterCard in connection with the SecureCode Program. + + 3. Customer will be responsible for all obligations imposed by MasterCard upon Issuers participating in the SecureCode Service. In particular, and without limitation, Customer will be responsible for fraudulent transactions when the cardholder's identity is authenticated through a password that the cardholder provides when making an online purchase under the SecureCode Program. Customer will be responsible for contracting with its cardholders to provide the service to them, and for establishing terms of its cardholders' use of the service in accordance with MasterCard's operating regulations. Metavante may provide Customer with samples of cardholder terms for the program that have been provided to Metavante by MasterCard or other third parties, but Customer acknowledges and agrees that these forms are provided by Metavante "AS IS" and without warranty or representation of any kind. + + 4. Customer agrees to indemnify, defend, and hold Metavante harmless from any and all loss, liability, claims, costs, and expenses relating to Customer's participation in the SecureCode Program as an Issuer. + +By signing below, Customer agrees to the foregoing and indicates its desire to participate in the SecureCode Program as an Issuer. + +Oriental Financial Group Inc. + +(Customer) By: + + Date: + +© 2006, Metavante Corporation + +38 + + + + + + + +Exhibit A Services & Fees + +The following costs apply to credit and debit card programs using MasterCard® SecureCode™. + +One-time Fees Set-up fee: $800 per scheduled implementation. One charge for both credit and debit card programs, if SecureCode is implemented for both programs at the same time and both programs are at Metavante. Additionally, all card programs must use the same implementation model. Each implementation model is considered a separate setup and is billed accordingly. + +HTML Conversion fee: $50 per document if Metavante converts to HTML for clients. This applies to items required for the SecureCode Web site, which can include the Terms of Service and Privacy Policy information. + +Change requests: $275 for each individual request. Multiple items submitted on the same request form are billed at $275 for the first item and $55 for each subsequent item. This is in reference to changes requested by the client for their SecureCode Web site. + +Ongoing Monthly Expenses + +Monthly Web site Hosting Fee: $38 per month, per financial institution One charge for both credit and debit card programs, if both card programs use the same Web site and both process with Metavante. + +User fee: $0.075 per card, per month The fee applies to cards that are enrolled or active on the SecureCode platform. + +Authentication fee: $0.01 per SecureCode authentication attempt + +Cardholder support pricing for after hours: $35 per month (optional, applies to debit card and prepaid debit card programs only) + +MasterCard Expenses MasterCard charges a fee for annual directory and program support associated with the MasterCard SecureCode program. This fee is charged only to principal members of MasterCard; it does not apply to clients with programs in ICA 5484 (debit) or 1166 (credit). Effective January 1, 2005, the fee is $1,500 per year for clients with fewer than 50,000 combined MasterCard credit and debit cards. For clients with 50,000 or more cards, the fee is $3,000 per year. + +There may be additional expenses required by MasterCard that have not been determined. For complete information about charges from MasterCard for the SecureCode program, see the MasterCard International operating regulations. + +39 \ No newline at end of file diff --git a/full_contract_txt/OLDAPIWIND-DOWNLTD_01_08_2016-EX-1.3-AGENCY AGREEMENT1.txt b/full_contract_txt/OLDAPIWIND-DOWNLTD_01_08_2016-EX-1.3-AGENCY AGREEMENT1.txt new file mode 100644 index 0000000000000000000000000000000000000000..9e8f7f0ad21d800b67273b0220a70c1f9b772874 --- /dev/null +++ b/full_contract_txt/OLDAPIWIND-DOWNLTD_01_08_2016-EX-1.3-AGENCY AGREEMENT1.txt @@ -0,0 +1,205 @@ +Exhibit 1.3 AGENCY AGREEMENT May 21, 2015 Tribute Pharmaceuticals Canada Inc. 151 Steeles Avenue East Milton, Ontario L9T 1Y1 Attention: Rob Harris, President and Chief Executive Officer Dear Mr. Harris: The undersigned, Dundee Securities Ltd. (the "Lead Agent"), Kes 7 Capital Inc., and Bloom Burton & Co. Ltd. (collectively with the Lead Agent, the "Agents" and each individually an "Agent") understand that Tribute Pharmaceuticals Canada Inc. (the "Corporation") proposes to issue and sell up to 13,043,695 common shares of the Corporation (the "Offered Shares") at a price of $0.92 per Offered Share (the "Offering Price") for aggregate gross proceeds of up to $12,000,199.40. The offering of the Offered Shares by the Corporation is referred to in this Agreement as the "Offering". In consideration of the Agents' services to be rendered in connection with the Offering, the Corporation shall pay to the Agents a cash fee (the "Agents' Fee") equal to 7.0% of the gross proceeds of the Offering. As additional consideration, the Corporation shall issue to the Agents that number of compensation options (the "Compensation Options") equal to 3.5% of the number of Offered Shares sold pursuant to the Offering. The Compensation Options will be exercisable for a period of 24 months at the Offering Price. Unless otherwise stated herein, the Offered Shares shall also refer to the Compensation Options. Notwithstanding anything to the contrary contained herein, the entire Agents' Fee and Compensation Options payable in respect of Offered Shares sold pursuant to Regulation D under the United States Securities Act of 1933, as amended, shall be payable to the Lead Agent. Based on the foregoing, and subject to the terms and conditions contained in this Agreement, the Agents severally and not jointly agree to act as, and the Corporation appoints the Agents as, the exclusive agents of the Corporation to offer the Offered Shares for sale on the Closing Date (as defined herein) in the Selling Jurisdictions (as defined herein) on a private placement basis at the Offering Price. It is understood and agreed by the Corporation and the Agents that the Agents shall act as agents only and are under no obligation to purchase any of the Offered Shares. In connection with the offering and sale of the Offered Shares, the Agents shall be entitled, with the written consent of the Corporation, not to be unreasonably withheld or delayed, to retain as sub-agents other securities dealers or financial institutions to solicit subscriptions for Offered Shares. Any fee payable to such sub-agents shall be for the account of the Agents and not the Corporation. The Agents shall be entitled to the fee provided for in Section 1(1)(a). That fee shall be payable at the Closing Time upon the closing of the sale of the Offered Shares, and may be deducted by the Agents from the gross proceeds of the Offering. + + + + + +Schedules: Schedule "A" - United States Compliance with Securities Laws 1. Definitions In this Agreement: (a) "Agent" and "Agents" have the respective meanings given to them above; (b) "Agents' Counsel" means Dentons Canada LLP; (c) "Agents' Fee" has the meaning given in Section 1(1)(a); (d) "Agreement" means the agreement resulting from the acceptance by the Corporation of the offer made by the Agents by this letter; (e) "Applicable Securities Laws" means all applicable securities laws, rules, regulations, notices and published policies of the Selling Jurisdictions in Canada and the United States; (f) "Business Day" means any day other than a Saturday, Sunday or statutory or civic holiday in Toronto, Ontario; (g) "Closing" means the completion of the Offering; (h) "Closing Date" means May 21, 2015 or such other date as the Corporation and the Agents may agree upon in writing, or as may be changed pursuant to this Agreement; (i) "Closing Time" means 8:00 a.m. (Toronto time) on the Closing Date; (j) "Corporation" has the meaning given to it above; (k) "Corporation's Auditors" means such firm of chartered accountants as the Corporation may have appointed or may from time to time appoint as auditors of the Corporation, including prior auditors of the Corporation, as applicable; (l) "Corporation's Counsel" means Fogler Rubinoff LLP; (m) "Compensation Options" has the meaning ascribed thereto on the face page of this Agreement; (n) "Compensation Option Certificates" shall mean the certificates representing the Compensation Options; (o) "Debt Instrument" means any loan, bond, debenture, promissory note or other instrument evidencing indebtedness (demand or otherwise) for borrowed money or other liability; 2 + + + + + +(p) "Due Diligence Session" means the due diligence question and answer session held with management of the Corporation on May 21, 2015 and July 14, 2014; (q) "Environmental Laws" means any federal, state, provincial, territorial or local law, statute, ordinance, rule, regulation, order, decree, judgment, injunction, permit, license, authorization or other binding requirement, or common law, relating to health, safety or the regulation, protection, cleanup or restoration of the environment or natural resources, including those relating to the distribution, processing, generation, treatment, control, storage, disposal, transportation, other handling or release or threatened release of Hazardous Materials or Conditions, and "Hazardous Materials or Conditions" means any material, substance (including, without limitation, pollutants, contaminants, hazardous or toxic substances or wastes) or condition that is regulated by or may give rise to liability under any Environmental Laws; (r) "Financial Statements" means the audited consolidated financial statements of the Corporation as at and for the years ended December 31, 2013 and 2014 and for the unaudited interim financial statements for the period ended March 31, 2015 together with the notes thereto; (s) "Governmental Authority (ies)" means governments, regulatory authorities, governmental departments, agencies, commissions, bureaus, officials, ministers, Crown corporations, courts, bodies, boards, tribunals or dispute settlement panels or other law, rule or regulation-making organizations or entities: (i) having or purporting to have jurisdiction over the Corporation on behalf of any nation, province, territory or state or any other geographic or political subdivision of any of them; or (ii) exercising, or entitled or purporting to exercise any administrative, executive, judicial, legislative, policy, regulatory or taxing authority or power over the Corporation; (t) "Indemnified Party" has the meaning given to it in Section 11(b); (u) "Lead Agent" has the meaning given to it above; (v) "Material Adverse Effect" or "Material Adverse Change" means any effect, change, event or occurrence that is, or is reasonably likely to be, materially adverse to the results of operations, condition (financial or otherwise), assets, properties, capital, liabilities (contingent or otherwise), cash flow, income or business operations of the Corporation and its subsidiaries taken as a whole; (w) "Material Agreement" means any note, indenture, mortgage or other form of indebtedness and any contract, commitment, agreement (written or oral), joint venture instrument, lease or other document to which the Corporation is a party and which is material to the Corporation on a consolidated basis; (x) "notice" has the meaning given to it in Section 21; 3 + + + + + +(y) "Offered Shares" has the meaning given to it above; (z) "Offering" has the meaning given to it above; (aa) "Offering Price" has the meaning given to it above; (bb) "Person" means any individual, sole proprietorship, partnership, firm, entity, unincorporated association, unincorporated syndicate, unincorporated organization, trust, body corporate, limited liability company and unlimited liability company; (cc) "Public Record" means the public disclosure of the Corporation filed on SEDAR; (dd) "SEC" means the United States Securities and Exchange Commission; (ee) "SEDAR" means the System for Electronic Document Analysis and Retrieval; (ff) "Securities Commissions" means the securities commissions or similar regulatory authorities in the Selling Jurisdictions; (gg) "Selling Jurisdictions" means all of the provinces of Canada, the United States and such other jurisdictions as the Agents and the Corporation may agree; (hh) "Subscriber" means, for the purposes of this Agreement, the person who executes a Subscription Agreement or, if such person executes a Subscription Agreement as a duly authorized agent of one or more principals, the principal or principals of such person; (ii) "Subscription Agreements" means the agreements entered into by each Subscriber and the Corporation in respect of the Subscriber's subscription for Offered Shares in the form and on terms and conditions satisfactory to each of the Corporation and the Agents, each acting reasonably; (jj) "TSX-V" means the TSX Venture Exchange; (kk) "United States" means the United States of America, its territories and possessions, any state of the United States, and the District of Columbia; and (ll) "U.S. Securities Act" means the United States Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder. In this Agreement, "affiliated", "misrepresentation", "material change", "material fact" and "subsidiary" have the meanings ascribed thereto under the Applicable Securities Laws of the Selling Jurisdictions in Canada, and "distribution" means "distribution" or "distribution to the public", as the case may be, as defined under the Applicable Securities Laws of the Selling Jurisdictions in Canada, and "distribute" has a corresponding meaning. In this Agreement, unless there is something in the subject matter or context inconsistent therewith: 4 + + + + + +(a) words used herein importing the singular number include the plural and vice versa, words importing the use of any gender include all genders, and words importing persons include individuals, partnerships, associations, trusts, unincorporated organizations and corporations, and the rest of the sentence is construed as if the necessary grammatical and terminological changes had been made; (b) references herein to any agreement or instrument, including this Agreement, are deemed to be references to the agreement or instrument as varied, amended, modified, supplemented or replaced from time to time, and any specific references herein to any legislation or enactment are deemed to be references to such legislation or enactment as the same may be amended or replaced from time to time; and (c) all dollar amounts in this Agreement are expressed in Canadian dollars except where expressly indicated otherwise. The division of this Agreement into sections, subsections, paragraphs, subparagraphs and clauses and the insertion of headings are for convenience of reference only and do not affect the construction or interpretation of this Agreement. The terms "this Agreement", "hereof', "herein", "hereunder" and similar expressions refer to this Agreement and the schedules hereto and not to any particular section, paragraph, subparagraph, clause or other portion hereof and include any agreement or instrument supplementary or ancillary hereto. 2. Restrictions on Sale Each of the Agents severally and not jointly covenants and agrees with the Corporation that it will: (a) not solicit subscriptions for Offered Shares, trade in Offered Shares or otherwise do any act in furtherance of a trade of Offered Shares outside of the Selling Jurisdictions; (b) in connection with the offer and sale of the Offered Shares in Canada, the Agents will only offer and sell the Offered Shares to persons resident in Canada who are: (i) "accredited investors" (as defined in National Instrument 45-106 - Prospectus Exemptions or, in Ontario, Section 73.3 of the Securities Act (Ontario)), and (ii) purchasing as principals; and (c) not advertise the proposed sale of the Offered Shares in printed media of general and regular paid circulation, radio, television or the internet nor provide or make available to prospective purchasers of Offered Shares any document or material which would constitute an offering memorandum as defined in Applicable Securities Laws in Canada. 5 + + + + + +The parties hereto acknowledge that the Offered Shares have not been and will not be registered under the U.S. Securities Act or any U.S. state securities laws and may not be offered or sold in the United States except pursuant to transactions that are exempt from the registration requirements of the U.S. Securities Act and the applicable securities laws of any U.S. state. Accordingly, the Corporation and the Agents hereby agree that offers and sales of the Offered Shares in the United States shall be made only to "accredited investors" within the meaning of Rule 501(a) of Regulation D under the U.S. Securities Act in the manner specified in Schedule A hereto, which terms and conditions are hereby incorporated by reference in and shall form a part of this Agreement. Any agreement between an Agent and the members of any sub-agent group or selling group formed in connection with the Offering shall contain the restrictions in Schedule A hereto. 3. Delivery of Subscription Agreements The Agents agree to obtain from each Subscriber executed Subscription Agreements (including the execution of applicable Schedules to such Subscription Agreements) and deliver such Subscription Agreements (including applicable Schedules) to the Corporation at or prior to the Closing Time. In addition, the Agents agree to obtain from each Subscriber such forms and other documents as may be required by the Securities Commissions and by the Corporation's registrar and provided by the Corporation to the Agents for delivery under this Agreement. The Corporation and the Agents shall agree on the allocation of the Offered Shares amongst the Subscribers. 4. Representations and Warranties of the Corporation The Corporation represents, warrants and covenants to the Agents, and acknowledges that the Agents are relying upon such representations, warranties and covenants, that: (a) the Corporation (i) is duly amalgamated under the Business Corporations Act (Ontario) (the "Act") and is up-to-date in respect of all material corporate filings and is in good standing under such Act; (ii) has all requisite corporate power, authority and capacity to carry on its business as now conducted and to own, lease and operate its properties and assets (including as described in the Public Disclosure); and (iii) has all requisite corporate power, authority and capacity to create, issue and sell the Offered Shares, to enter into this Agency Agreement and the Compensation Option Certificates, and to carry out the provisions contained in hereunder and thereunder; (b) the Corporation does not have any material subsidiaries; (c) no proceedings have been taken, instituted or, to the knowledge of the Corporation, are pending for the dissolution or liquidation of the Corporation; (d) the Corporation has conducted its business in compliance, in all material respects, with all applicable laws, rules and regulations (including all applicable federal, national, provincial, municipal, and local environmental anti-pollution and licensing laws, regulations and other lawful requirements of any governmental or regulatory body, of each jurisdiction in which its business is carried on and is licensed, registered or qualified in all jurisdictions in which it owns, leases or operates its property or carries on business to enable its business to be carried on as now conducted and its property and assets to be owned, leased and operated and all such licences, registrations and qualifications are valid, subsisting and in good standing and it has not received a notice of non-compliance, nor knows of, nor has reasonable grounds to know of, any facts that could give rise to a notice of non-compliance with any such laws, regulations or permits which could reasonably be expected to have a Material Adverse Effect and all such licences, registrations and qualifications are valid, subsisting and in good standing; 6 + + + + + +(e) all necessary corporate action has been taken or will have been taken prior to the Closing Time by the Corporation so as to validly issue and sell the Offered Shares and to issue the Compensation Options; (f) except for the approval of the TSXV and any post-closing notice filings required under applicable United States federal or state securities laws, all consents, approvals, authorizations and corporate action have been taken and all necessary documents have been delivered and executed with respect to the Offering; (g) the execution and delivery of this Agency Agreement and the Compensation Option Certificates, and the performance of the transactions contemplated hereby and thereby, including the issuance and sale of the Offered Shares, have been duly authorized by all necessary corporate action of the Corporation and this Agency Agreement has been executed and delivered by the Corporation and constitutes a valid and binding obligation of the Corporation, enforceable against the Corporation in accordance with its terms, provided that enforcement thereof may be limited by laws affecting creditors' rights generally, that specific performance and other equitable remedies may only be granted in the discretion of a court of competent jurisdiction, that the provisions thereof relating to indemnity, contribution and waiver of contribution may be unenforceable under applicable law and that enforceability is subject to the provisions of the Limitations Act, 2002 (Ontario); (h) except for any post-closing notice filings required under applicable United States federal or state securities laws, the execution and delivery of this Agency Agreement and the Compensation Option Certificates, and the fulfilment of the terms hereof and thereof by the Corporation, including the issuance and sale of the Offered Shares, do not and will not require the consent, approval, authorization, registration or qualification of or with any Governmental Authority, stock exchange, Securities Commission or other third party, except such as have been obtained or such as may be required (and shall be obtained prior to the Closing Time) under Applicable Securities Laws or stock exchange regulations; (i) the Offered Shares have been, or prior to the Closing Time will be, duly and validly authorized for issuance and, upon receipt by the Corporation of the purchase price for the Offered Shares, will be validly issued as fully paid and non-assessable Common Shares; 7 + + + + + +(j) the Compensation Options have been, or prior to the Closing Time will be duly and validly authorized and created; (k) the Compensation Option Shares to be issued upon exercise of the Compensation Options, including payment in full of the applicable exercise price, will be validly issued as fully paid and non-assessable Common Shares; (l) the authorized capital of the Corporation consists of an unlimited number of Common Shares, of which, as of May 20, 2015, 100,675,988 Common Shares were outstanding as fully paid and non-assessable Common Shares; (m) the Corporation is not aware of any legislation, or proposed legislation published by a legislative body, which it anticipates will materially and adversely affect the business, affairs, operations, assets, liabilities (contingent or otherwise) or prospects of the Corporation on a consolidated basis; (n) no order ceasing or suspending trading in any securities of the Corporation or prohibiting the sale of the Offered Shares or the trading of any of the Corporation's issued securities has been issued and no proceedings for such purpose are threatened or, to the best of the Corporation's knowledge, pending; (o) except as disclosed to the Agents, no person now has any agreement or option or right or privilege (whether at law, pre- emptive or contractual) capable of becoming an agreement for the purchase, subscription or issuance of, or conversion into, any unissued shares, securities, warrants or convertible obligations of any nature of the Corporation; (p) since December 31, 2013, except as disclosed in the Public Record: (i) there has not been any material change in the assets, liabilities, obligations (absolute, accrued, contingent or otherwise), business, condition (financial or otherwise) or results of operations of the Corporation on a consolidated basis; (ii) there has not been any material change in the capital stock or long-term debt of the Corporation on a consolidated basis; and (iii) the Corporation has carried on its business in the ordinary course; (q) the Financial Statements of the Corporation present fairly, in all material respects, the financial condition of the Corporation on a consolidated basis for the periods then ended; (r) the Corporation does not have any liabilities, direct or indirect, contingent or otherwise, not disclosed in the Public Record which could reasonably be expected to have a Material Adverse Effect; (s) except as disclosed in the Public Record (and certain other matters disclosed in writing to the Agents that the Corporation believes are without merit and/or would not have a Material Adverse Effect), there are no threats of actions, proceedings or investigations (whether or not purportedly by or on behalf of the Corporation) that have been made to the Corporation or, to the knowledge of the Corporation, that are pending or affecting the Corporation at law or in equity (whether in any court, arbitration or similar tribunal) or before or by any federal, provincial, state, municipal or other governmental department, commission, board or agency, domestic or foreign, which could reasonably be expected to have a Material Adverse Effect; 8 + + + + + +(t) the execution and delivery of this Agency Agreement and the Compensation Option Certificates, and the fulfilment of the terms hereof and thereof by the Corporation, including the issuance and sale of the Offered Shares, do not and will not (as the case may be) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, whether after notice or lapse of time or both, (A) any statute, rule or regulation applicable to the Corporation, including Applicable Securities Laws; (B) the constating documents, by-laws or resolutions of the Corporation; (C) the terms of any Debt Instrument, Material Agreement, mortgage, note, indenture, instrument, lease or any other material agreement to which the Corporation is a party or by which they are bound; or (D) any judgment, decree or order binding the Corporation or the respective property or assets of the Corporation; (u) to the knowledge of the Corporation, no agreement is in force or effect which in any manner affects the voting or control of any of the securities of the Corporation; (v) the Corporation is not included in a list of defaulting reporting issuers maintained by the Securities Commissions in the Qualifying Jurisdictions and in particular, without limiting the foregoing, the Corporation has at all relevant times complied with its obligations to make timely disclosure of all material changes relating to it, no such disclosure has been made on a confidential basis that is still maintained on a confidential basis, and there is no material change relating to the Corporation which has occurred and with respect to which the requisite material change report has not been filed with the Securities Commissions and the Corporation is in all material respects in compliance with the rules and regulations of the TSXV; (w) the Corporation has complied in all material respects with requirements to file all reports, schedules, forms, statements and other documents that it is required to file under the U.S. Exchange Act, including pursuant to Section 13(a) or 15(d) of the U.S. Exchange Act, including the exhibits thereto and documents incorporated by reference therein, being collectively referred to herein as the "SEC Reports") on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension. As of their respective dates, the SEC Reports complied in all material respects with the respective requirements of the U.S. Exchange Act and the rules and regulations of the SEC promulgated thereunder. The financial statements of the Corporation included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance with U.S. generally accepted accounting principles applied on a consistent basis during the periods involved ("GAAP"), except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Corporation as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments; 9 + + + + + +(x) neither the Corporation nor, to the knowledge of the Corporation, any director, officer, agent, employee, affiliate or other person acting on behalf of the Corporation is aware of or has taken any action, directly or indirectly, that has resulted or would result in a violation of the Foreign Corrupt Practices Act of 1977 (United States), as amended, and the rules and regulations thereunder (the "FCPA"), and the Corruption of Foreign Public Officials Act (Canada) (the "CFPOA") including, without limitation, making use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to pay or authorization of the payment of any money, or other property, gift, promise to give, or authorization of the giving of anything of value to any "foreign official" (as such term is defined in the FCPA) or any "foreign public official" (as such term is defined in the CFPOA) or any foreign political party or official thereof or any candidate for foreign political office, in contravention of the FCPA and the CFPOA; and the Corporation will monitor its respective businesses to ensure compliance with the FCPA and the CFPOA, as applicable, and, if violations of the FCPA or the CFPOA are found, will take remedial action to remedy such violations; (y) the operations of the Corporation are, and have been conducted at all times, in compliance with all material applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970 (United States), as amended, the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada), the money laundering statutes of all applicable jurisdictions, the rules and regulations thereunder and any related or similar applicable rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the "Money Laundering Laws") and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Corporation with respect to the Money Laundering Laws is pending or, to the knowledge of the Corporation, threatened; (z) neither the Corporation nor, to the knowledge of the Corporation, any director, officer, agent, employee, affiliate or person acting on behalf of the Corporation is currently subject to any United States sanctions administered by the Office of Foreign Assets Control of the United States Treasury Department ("OFAC"); and the Corporation will not directly or indirectly use the proceeds of this Offering, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity, for the purpose of financing the activities of any person currently subject to any United States sanctions administered by OFAC; 10 + +(aa) all filings and fees required to be made and paid by the Corporation pursuant to Applicable Securities Laws have been paid or will be promptly paid by the Corporation following the Closing Time; (bb) the Corporation's Auditors who audited the consolidated financial statements of the Corporation for the year ended December 31, 2014 and delivered their auditors' report thereto are independent public accountants as required by the Canadian Securities Laws; (cc) there has not been any "reportable event" (within the meaning of National Instrument 51- 102 - Continuous Disclosure Obligations with the Corporation's Auditors; (dd) all taxes (including income tax, capital tax, payroll taxes, employer health tax, workers' compensation payments, property taxes, custom and land transfer taxes), duties, royalties, levies, imposts, assessments, deductions, charges or withholdings and all liabilities with respect thereto including any penalty and interest payable with respect thereto (collectively, "Taxes") due and payable by the Corporation have been paid, except for where the failure to pay such taxes would not constitute an adverse material fact of the Corporation or result in a Material Adverse Effect. All tax returns, declarations, remittances and filings required to be filed by the Corporation have been filed with all appropriate Governmental Authorities and all such returns, declarations, remittances and filings are complete and materially accurate and no material fact or facts have been omitted therefrom which would make any of them misleading except where the inaccuracy or failure to file such documents would not constitute an adverse material fact of the Corporation or result in a Material Adverse Effect. No examination of any tax return of the Corporation is currently in progress and there are no issues or disputes outstanding with any Governmental Authority respecting any taxes that have been paid, or may be payable, by the Corporation, in any case, except where such examinations, issues or disputes would not constitute an adverse material fact of the Corporation or result in a Material Adverse Effect; (ee) neither the Corporation or to the knowledge of the Corporation any other person, is in default in the observance or performance of any term, covenant or obligation to be performed by the Corporation or such other person under any Debt Instrument, Material Agreement, agreement, or arrangement to which the Corporation is a party or otherwise bound which could reasonably be expected to have a Material Adverse Effect, and all such contracts, agreements or arrangements are in good standing, and to the knowledge of the Corporation no event has occurred which with notice or lapse of time or both would constitute such a default by the Corporation or any other party; (ff) Equity Financial Trust Company at its principal transfer office in the City of Toronto, Ontario has been duly appointed as the registrar and transfer agent for the Common Shares; (gg) except as disclosed in the Public Record, none of the directors or officers of the Corporation, any known holder of more than 10% of any class of shares of the Corporation, or any known associate or affiliate of any of the foregoing persons, has had any material interest, direct or indirect, in any transaction during the three most recently completed financial years or during the current financial year, or any proposed material transaction which, as the case may be, materially affected, is material to or will materially affect the Corporation on a consolidated basis; 11 + + + + + +(hh) each Debt Instrument to which the Corporation is a party is in good standing and the Corporation is not in default of any obligation or covenant under such Debt Instruments and, except for intercompany debt, the Corporation is not party to any material Debt Instrument or has any material loans or other indebtedness outstanding which has been made to any of its shareholders, officers, directors or employees, past or present, or any person not dealing at arm's length with them; (ii) the Corporation is in compliance, in all material respects, with all applicable federal, provincial, state, municipal and local laws, statutes, ordinances, by laws and regulations and orders, directives and decisions rendered by any ministry, department or administrative or regulatory agency, domestic or foreign (the "Environmental Laws") relating to the protection of the environment, occupational health and safety or the processing, use, treatment, storage, disposal, discharge, transport or handling of any pollutants, contaminants, chemicals or industrial, toxic or hazardous wastes or substance ("Hazardous Substances"); (jj) the Corporation has collectively, obtained all material licences, permits, approvals, consents, certificates, registrations and other authorizations under all applicable Environmental Laws (the "Environmental Permits") necessary as at the date hereof for the operation of the business carried by the Corporation; (kk) the Corporation has not used, except in compliance in all material respects with all Environmental Laws and Environmental Permits, any property or facility which it owns or leases or previously owned or leased, to generate, manufacture, process, distribute, use, treat, store, dispose of, transport or handle any Hazardous Substance; (ll) the Corporation has not received any notice of, or been prosecuted for an offence alleging, non-compliance with any Environmental Law. There are no orders or directions relating to environmental matters requiring any material work, repairs, construction or capital expenditures to be made with respect to any of the assets of the Corporation which are material to the Corporation, nor has the Corporation received notice of any of the same; (mm) the Corporation has not received any notice wherein it is alleged or stated that it is potentially responsible for a federal, provincial, state, municipal or local clean-up site or corrective action under any Environmental Laws and the Corporation has not received any request for information in connection with any federal, state, provincial, municipal or local inquiries as to disposal sites; 12 + + + + + +(nn) except as disclosed in the Public Record, the Corporation is the sole and exclusive owner of all right, title and interest in and to, or has a valid and enforceable right to use pursuant to a written license, all trademarks, trade names, service marks, patents, patent applications, other patent rights, copyrights, domain names, software, inventions, processes, databases, know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures) and other similar intellectual property rights, whether registered or unregistered and in any jurisdiction (collectively, "Intellectual Property Rights") reasonably necessary to conduct its business as now conducted or proposed to be conducted. To the knowledge of the Corporation, the Corporation's business as now conducted or proposed to be conducted as described in the Public Record, does not infringe, conflict with or otherwise violate any Intellectual Property Rights of others, and the Corporation has not received, and has no reason to believe that it will receive, any notice of infringement or conflict with asserted Intellectual Property Rights of others, or any facts or circumstances which would render any Intellectual Property Rights invalid or inadequate to protect the interest of the Corporation therein. Except as disclosed to the Agent, to the knowledge of the Corporation, there is no infringement by third parties of any Intellectual Property Rights owned by the Corporation. Except as disclosed in the Public Record, there is no pending or, to the knowledge of the Corporation, threatened action, suit, proceeding or claim relating to Intellectual Property Rights owned by the Corporation. Except as disclosed in the Public Record, the Corporation is not a party to or bound by any options, licenses or agreements with respect to the Intellectual Property Rights of any other person or entity. All licenses for Intellectual Property Rights owned or used by the Corporation are valid, binding upon and enforceable by or against the Corporation and, to the Corporation's knowledge, against the parties thereto in accordance with their terms. To the knowledge of the Corporation, none of the technology employed by the Corporation has been obtained or is being used by the Corporation in violation of any contractual obligation binding on the Corporation or, to the Corporation's knowledge, any of its officers, directors or employees or otherwise in violation of the rights of any third party. All assignments from inventors to the Corporation have been obtained and filed with the appropriate patent offices for all of the Corporation's patent applications. Except as disclosed in the Public Record the Corporation does not have knowledge of any claims of third parties to any ownership interest or lien with respect to the Corporation's or its licensors' patents and patent applications. The Corporation does not know of any facts which would form a basis for a finding of unenforceability or invalidity of any of the patents, trademarks or service marks of the Corporation. The Corporation does not know of any material defects of form in the preparation or filing of the patent applications of the Corporation. To the knowledge of the Corporation, the Corporation has complied with the U.S. Patents and Trademark Office duties and Canadian equivalent duties of candor and disclosure for each patent and patent application of the Corporation. The Corporation does not know of any fact with respect to the patent applications of the Corporation presently on file that (i) would preclude the issuance of patents with respect to such applications, (ii) would lead the Corporation to conclude that such patents, when issued, would not be valid and enforceable in accordance with applicable regulations or (iii) would result in a third party having any rights in any patents issuing from such patent applications. The Corporation has taken all commercially reasonable steps to protect, maintain and safeguard its rights in all material Intellectual Property Rights, including the execution of appropriate nondisclosure and confidentiality agreements; 13 + + + + + +(oo) except as disclosed to the Agents, the Corporation (or parties under contractual obligation to the Corporation) holds all licenses, certificates, approvals and permits from all provincial, federal, state, United States, foreign and other regulatory authorities, including but not limited to the United States Food and Drug Administration (the "FDA"), Health Canada ("HC"), the European Medicines Agency (the "EMA") and any foreign regulatory authorities performing functions similar to those performed by the FDA, HC and the EMA, that are material to the conduct of the business of the Corporation as such business is now conducted or proposed to be conducted as described in the Public Record, all of which are valid and in full force and effect and there is no proceeding pending or, to the knowledge of the Corporation, threatened which may cause any such license, certificate, approval or permit to be withdrawn, cancelled, suspended or not renewed. Nothing has come to the attention of the Corporation that has caused the Corporation to believe that the completed studies, tests, preclinical studies and clinical trials conducted by or on behalf of the Corporation that are described in the Public Record were not conducted, in all material respects, in accordance with experimental protocols, procedures and controls pursuant to, where applicable, accepted professional and scientific standards for products or product candidates comparable to those being developed by the Corporation; or that the drug substances used in the clinical trials have not been manufactured, under "current good manufacturing practices", when required, in the United States, Canada and other jurisdictions in which such clinical trials have been and are being conducted. No filing or submission to the FDA, HC, the EMA or any other regulatory body, that was or is intended to be the basis for any approval of the Corporation's products or product candidates, to the knowledge of the Corporation, contains any material omission or material false information. The Corporation is not in violation of any material law, order, rule, regulation, writ, injunction or decree of any court or governmental agency or body, applicable to the investigation of new drugs in humans and animals, including, but not limited to, those promulgated by the FDA, HC or the EMA; (pp) the descriptions in the Public Record of the results of the clinical trials referred to therein are consistent in all material respects with such results and no other studies or other clinical trials whose results are known to the Corporation are materially inconsistent with or otherwise materially call into question the results described or referred to in the Public Record. To the Corporation's knowledge, the studies, tests and preclinical and clinical trials conducted by or on behalf of the Corporation were and, if still pending, are, in all material respects, being conducted in accordance with experimental protocols, procedures and controls pursuant to accepted professional scientific standards and all applicable laws and authorizations; (qq) the Corporation possesses such valid and current certificates, authorizations or permits issued by the appropriate federal, provincial, state, local or foreign regulatory agencies or bodies necessary to conduct its business, except where the failure to possess such certificates, authorizations or permits would not, individually or in the aggregate, result in a Material Adverse Change, and the Corporation has not received, nor has any reason to believe that it will receive, any notice of proceedings relating to the revocation or modification of, or non-compliance with, any such certificate, authorization or permit which, singly or in the aggregate, if the subject of an unfavourable decision, ruling or finding, could result in a Material Adverse Change; 14 + + + + + +(rr) neither the Corporation or, to the best of its knowledge, any employee or agent thereof, has made any unlawful contribution or other payment to any official of, or candidate for, any federal, state, provincial or foreign office, or failed to disclose fully any contribution, in violation of any law, or made any payment to any foreign, Canadian, governmental officer or official, or other Person charged with similar public or quasi-public duties, other than payments required or permitted by applicable laws; (ss) there are no environmental audits, evaluations, assessments, studies or tests relating to the Corporation except for ongoing assessments conducted by or on behalf of the Corporation in the ordinary course; (tt) each material plan for retirement, bonus, stock purchase, profit sharing, stock option, deferred compensation, severance or termination pay, insurance, medical, hospital, dental, vision care, drug, sick leave, disability, salary continuation, legal benefits, unemployment benefits, vacation, incentive or otherwise contributed to or required to be contributed to, by the Corporation for the benefit of any current or former director, officer, employee or consultant of the Corporation (the "Employee Plans") has been maintained in compliance with its terms and with the requirements prescribed by any and all statutes, orders, rules and regulations that are applicable to such Employee Plans, in each case in all material respects and has been publicly disclosed to the extent required by Applicable Securities Laws; (uu) all material accruals for unpaid vacation pay, premiums for employment insurance, health premiums, federal or state pension plan premiums, accrued wages, salaries and commissions and employee benefit plan payments have been reflected in the books and records of the Corporation; (vv) there has never been, there is not currently and the Corporation does not anticipate any labour disruption with respect to the employees or consultants of the Corporation which is adversely affecting or could adversely affect the carrying on of the business of the Corporation; (ww) the minute books of the Corporation made available to the Agents contain copies of all constating documents and all proceedings of security holders and directors (and committees thereof) and are complete in all material respects; (xx) the Corporation is not aware of any circumstances presently existing under which liability is or could reasonably be expected to be incurred under Part XXIII.1 - Civil Liability for Secondary Market Disclosure of the Securities Act (Ontario) or analogous securities laws in the other Qualifying Jurisdictions; 15 + + + + + +(yy) other than the Agents, there is no person acting or purporting to act at the request or on behalf of the Corporation that is entitled to any brokerage or finder's fee in connection with the transactions contemplated by this Agency Agreement; (zz) the Corporation will use the proceeds from the Offering for acquisitions and working capital; and (aaa) the Corporation has complied and will comply with the representation, warranties and covenants applicable to it in Schedule "A" and Schedule "A" is true and correct in all material respects. 5. Agents' Fee In consideration for the Agents' services hereunder, the Corporation will pay to the Agents the Agents' Fee and the Corporation shall issue to the Agents that number of Compensation Options equal to 3.5% of the number of Offered Shares sold pursuant to the Offering. Unless otherwise stated herein, the Offered Shares shall also refer to the Compensation Options. The Agents' Fee shall be apportioned among the Agents as follows: Dundee Securities Ltd. 40% Kes 7 Capital Inc. 30% Bloom Burton & Co. Ltd. 30% 100% 6. Closing The sale of the Offered Shares shall be completed at the Closing Time at the offices of Corporation's Counsel in Toronto, Ontario or at such other place as the Corporation and the Agents may agree. At the Closing Time, the Corporation shall deliver to the Agents: (a) the opinions, certificates and agreements referred to in Section 9 and all other documents required to be provided by the Corporation to the Agents pursuant to this Agreement and the Subscription Agreements; (b) except for any Offered Shares offered or sold in the United States which shall be represented by individual definitive share certificates, one or more definitive share certificate(s)/and or book-entry only securities, duly registered as the Lead Agent may direct the Corporation; (c) the Corporation's receipt for payment by the Agents of an amount equal to the aggregate purchase price for the Offered Shares sold pursuant to the Offering; and (d) such further documentation as may be contemplated by this Agreement or as Agents' Counsel or the applicable regulatory authorities may reasonably require; against delivery by the Agents of: 16 + + + + + +(e) all duly completed Subscription Agreements tendered by the Subscribers for the Offered Shares being issued and sold and, where applicable, all completed forms, schedules and certificates contemplated by such Subscription Agreements; (f) a wire transfer of immediately available funds in an amount equal to the aggregate purchase price for the Offered Shares sold pursuant to the Offering, less an amount equal to the Agents' Fee and the costs and expenses of the Agent provided for in Section 14; and (g) the Agents' receipt for the Agents' Fee and the definitive certificates delivered to the Agents in accordance with Section 6(b). 7. Delivery of Offered Shares The Corporation shall, prior to the Closing Date, make all necessary arrangements for the preparation and delivery (and, in the case of definitive certificates, execution of such definitive certificate(s) representing the Offered Shares) of the Offered Shares on the Closing Date in the City of Toronto. The Corporation shall pay all fees and expenses payable to its transfer agent in connection with the preparation and delivery (and, in the case of definitive certificates, execution of such definitive certificate(s) representing the Offered Shares) of the Offered Shares contemplated by this Section 7 and the fees and expenses payable to its transfer agent as may be required in the course of the distribution of the Offered Shares. 8. Agency Basis The Corporation agrees that the Agents are acting as agents of the Corporation in seeking purchasers of Offered Shares without underwriter liability, and nothing in this Agreement or any other agreement shall require the Agents to purchase any of the Offered Shares in connection with the Offering. 9. Conditions to Closing The sale of the Offered Shares shall be subject to the representations, warranties and covenants of the Corporation contained in this Agreement being accurate as of the date of this Agreement and as of the Closing Date, to the Corporation having performed all of its obligations under this Agreement and to the following additional conditions, and the Agents shall have the right on the Closing Date on behalf of Subscribers for Offered Shares to withdraw, all Subscription Agreements delivered and not previously withdrawn by Subscribers unless such conditions have been satisfied: (a) Delivery of Opinions (i) The Agents shall have received at the Closing Time a legal opinion dated the Closing Date, in form and substance satisfactory to the Agents, acting reasonably, addressed to the Agents (and, if required for opinion purposes, counsel to the Agents) from Corporation's Counsel as to the laws of Canada and the Selling Jurisdictions in Canada, which counsel in turn may rely upon the opinions of local counsel where it deems such reliance proper as to the laws other than those of Canada and such provinces in Canada where Corporation's Counsel is licensed to practice law (or alternatively make arrangements to have such opinions directly addressed to the Agents) and as to matters of fact, on certificates of Governmental Authorities and officers of the Corporation and letters from stock exchange representatives and transfer agents, with respect to customary corporate, securities law and other matters requested by the Agents. (ii) The Agents shall have received at the Closing Time an opinion of U.S. counsel to the Corporation, Troutman Sanders LLP, in form and substance satisfactory to the Agents, acting reasonably, to the effect that the offer and sale of the Offered Shares in the United States do not require registration under the U.S. Securities Act. 17 + + + + + +(iii) The Agents having received at the Closing Time such further opinions, certificates and other documentation from the Corporation as may be contemplated herein or as the Agents may reasonably require, provided, however, that the Agents shall request any such opinion, certificate or document within a reasonable period prior to the Closing Time that is sufficient for the Corporation to obtain and deliver such certificate or document. (b) Delivery of Certificates (i) The Agents shall have received at the Closing Time a certificate dated the Closing Date, addressed to the Agents (and, if necessary for opinion purposes, counsel to the Agents) and signed by officers of the Corporation acceptable to the Agents, acting reasonably, with respect to the constating documents of the Corporation, no proceedings to voluntarily wind-up or dissolve, all resolutions of the board of directors of the Corporation relating to this Agreement and the transactions contemplated by this Agreement and the incumbency and specimen signatures of signing officers of the Corporation and such other matters as the Agents may reasonably request. (ii) The Agents shall have received at the Closing Time a certificate of good standing of the Corporation. (iii) The Agents shall have received at the Closing Time a certificate dated the Closing Date, addressed to the Agents and counsel to the Agents and signed on behalf of the Corporation by the Chief Executive Officer and the Chief Financial Officer or other officers of the Corporation acceptable to the Agents, certifying for and on behalf of the Corporation and without personal liability, after having made due enquiry: (A) the Corporation has complied with and satisfied all terms and conditions of this Agreement and the Subscription Agreements on its part to be complied with or satisfied at or prior to the Closing Time; 18 + + + + + +(B) the representations and warranties of the Corporation contained in this Agreement and the Subscription Agreements are true and correct at the Closing Time with the same force and effect as if made at and as of the Closing Time after giving effect to the transactions contemplated by this Agreement; (C) the responses provided by the Corporation at the Due Diligence Session are true and correct and would not be different in any material respect if the Due Diligence Session were held immediately prior to the Closing Time; (D) the Corporation has made and/or obtained, on or prior to the Closing Time, all necessary filings, approvals, consents and acceptances of applicable regulatory authorities and under any applicable agreement or document to which the Corporation is a party or by which it is bound, required for the execution and delivery of this Agreement, the offering and sale of the Offered Shares in the Selling Jurisdictions in Canada and the consummation of the other transactions contemplated hereby (subject to completion of filings with certain regulatory authorities following the Closing Date); (E) no order, ruling or determination having the effect of suspending the sale of or cease trading the Offered Shares or any other securities of the Corporation has been issued by any regulatory authority and is continuing in effect and no proceedings for that purpose have been instituted or are pending or, to the knowledge of such officer of the Corporation, contemplated or threatened under any Applicable Securities Laws or by any other regulatory authority; and (F) such other matters as may be reasonably requested by the Agents or the Agents' Counsel. (c) Exchange Approval The Corporation shall have obtained the conditional approval of the TSX-V and any other applicable exchange in respect of the issuance and sale of the Offered Shares and all other necessary regulatory approvals prior to the Closing. (d) Consents All required third party consents and waivers necessary for the Corporation to enter into this Agreement and to consummate the transactions contemplated by this Agreement shall have been received at or prior to the Closing Time. 19 + + + + + +The foregoing conditions contained in this Section 9 are for the sole benefit of the Agents and may be waived in whole or in part by the Agents at any time and without limitation. If any of the foregoing conditions have not been met at the Closing Time, the Agents may terminate their obligations under this Agreement without prejudice to any other remedies they may have and the Agents shall have the right on behalf of the Subscribers to withdraw all Subscription Agreements delivered and not previously withdrawn by Subscribers. 10. Rights of Termination (a) Regulatory Proceedings Out If, after the date hereof and prior to the Closing Time, any enquiry, action, suit, investigation or other proceeding, whether formal or informal, is instituted or announced or any order is made by any federal, provincial or other Governmental Authority in relation to the Corporation which, in the opinion of any of the Agents, operates to prevent or restrict the distribution or trading of the Offered Shares, then such Agent shall be entitled, at its option and in accordance with Section 10(e), to terminate its obligations under this Agreement by notice to that effect given to the Corporation any time at or prior to the Closing Time. (b) Disaster Out If prior to the Closing Time there should develop, occur or come into effect or existence any event, action, state, condition or major financial occurrence of national or international consequence or any law or regulation which, in the opinion of any of the Agents, seriously adversely affects, or involves, or will seriously adversely affect, or involve, the financial markets or the business, operations or affairs of the Corporation and its subsidiaries taken as a whole, then such Agent shall be entitled, at its option and in accordance with Section 10(e), to terminate its obligations under this Agreement by written notice to that effect given to the Corporation at any time at or prior to the Closing Time. (c) Material Change or Change in Material Fact Out If, after the date hereof and prior to the Closing Time, there shall occur any material change or change in a material fact which, in the reasonable opinion of any of the Agents, would be expected to have a significant adverse effect on the business, affairs, prospects or financial condition of the Corporation and its subsidiaries taken as a whole or the market price or value of the securities of the Corporation, then such Agent shall be entitled, at its option, in accordance with Section 10(e), to terminate its obligations under this Agreement by written notice to that effect given to the Corporation any time at or prior to the Closing Time. (d) Non-Compliance with Conditions The Corporation agrees that all terms and conditions in Section 9 shall be construed as conditions and complied with so far as they relate to acts to be performed or caused to be performed by it, that it will use its best efforts to cause such conditions to be complied with, and that any breach or failure by the Corporation to comply with any such conditions shall entitle any of the Agents, in accordance with Section 10(e), to terminate its obligations under this Agreement by written notice to that effect given to the Corporation at any time at or prior to the Closing Time, unless otherwise expressly provided in this Agreement. Each Agent may waive, in whole or in part, or extend the time for compliance with, any terms and conditions without prejudice to its rights in respect of any other terms and conditions or any other or subsequent breach or non- compliance, provided that any such waiver or extension shall be binding upon an Agent only if such waiver or extension is in writing and signed by the Agent. 20 + +(e) Exercise of Termination Rights The rights of termination contained in Sections 10(a), (b), (c) and (d) may be exercised by any of the Agents and are in addition to any other rights or remedies any of the Agents may have in respect of any default, act or failure to act or non- compliance by the Corporation in respect of any of the matters contemplated by this Agreement or otherwise. In the event of any such termination, there shall be no further liability on the part of the Agents to the Corporation or on the part of the Corporation to the Agents except in respect of any liability which may have arisen prior to or arise after such termination under Sections 11, 12 and 14. A notice of termination given by an Agent under Section 10(a), (b), (c) or (d) shall not be binding upon any other Agent who has not also executed such notice. 11. Indemnity (a) Rights of Indemnity (1) The Corporation covenants and agrees to protect, indemnify, and save harmless, each of the Agents and their respective affiliates, and each and every one of the directors, officers, employees, partners and agents of the Agents (individually, an "Indemnified Party" and collectively, the "Indemnified Parties") harmless from and against any and all expenses, losses (excluding loss of profits), claims, actions, damages (other than consequential or punitive damages) or liabilities, joint or several (including the aggregate amount paid in settlement of any actions, suits, proceedings or claims and the reasonable fees and expenses of their counsel that may be incurred in advising with respect to and/or defending any claim that may be made against the Indemnified Parties) to which any Indemnified Party may become subject or otherwise involved in any capacity under any statute or common law or otherwise insofar as such expenses, losses, claims, damages, liabilities or actions arise out of or are based, directly or indirectly, upon the performance of professional services rendered to the Corporation by the Indemnified Parties (or any of them), whether directly or indirectly, including by reason of: (a) any information or statement contained in this Agreement, the Corporation's publicly available disclosed documents filed on SEDAR or elsewhere, or in any other material prepared by the Corporation used for marketing the Offering or any certificate of the Corporation delivered hereunder or pursuant hereto, which at the time and in the light of the circumstances under which it was made contains or is alleged to contain a misrepresentation or any misstatement of a material fact; 21 + + + + + +(b) the omission or alleged omission to state in in this Agreement, the Corporation's publicly available disclosed documents filed on SEDAR or elsewhere, or in any other material prepared by the Corporation used for marketing the Offering or any certificate of the Corporation delivered hereunder or pursuant hereto, any material fact required to be stated therein or necessary to make any statement therein not misleading in light of the circumstances in which it was made; (c) any order made, or inquiry, investigation or proceeding commenced by any securities regulatory authority or other competent authority based upon any misrepresentation, untrue statement or omission or alleged untrue statement or omission in this Agreement, the Corporation's publicly available disclosed documents filed on SEDAR or elsewhere, or in any other material prepared by the Corporation used for marketing the Offering or any certificate of the Corporation delivered hereunder or pursuant hereto that prevents or restricts the trading in any of the Corporation's securities or the distribution or distribution to the public, as the case may be, of any of the Offered Shares in any of the Qualifying Jurisdictions; (d) the Corporation not complying with any requirement of Applicable Securities Laws or stock exchange requirements in connection with the transactions contemplated herein, including the Corporation's non-compliance with any statutory requirement to make any document available for inspection; or (e) any breach of a representation or warranty of the Corporation contained in this Agreement or the failure of the Corporation to comply with any of its obligations hereunder. (2) Notwithstanding Subsection 11(a) (1), the indemnification in Subsection 11(a)(1) does not and shall not apply to the extent that a court of competent jurisdiction in a final judgment that has become non- appealable shall determine that (a) the Agents and their respective affiliates have been negligent or have committed any fraudulent or illegal act in the course of the professional services rendered to the Corporation, and (b) such expenses, losses, claims, damages, liabilities or actions were caused or incurred by the gross negligence, fraud or wilful misconduct of the Agents. (3) If any matter or thing contemplated by this Section 11 shall be asserted against any Indemnified Party in respect of which indemnification is or might reasonably be considered to be provided, such Indemnified Party will notify the Corporation in writing as soon as possible of the nature of such claim (provided that omission to so notify the Corporation will not relieve the Corporation of any liability that it may otherwise have to the Indemnified Party hereunder, except to the extent the Corporation is materially prejudiced by such omission) and the Corporation shall be entitled (but not required) to assume the defence of any suit brought to enforce such claim; provided, however, that the defence shall be through legal counsel reasonably acceptable to such Indemnified Party and that no settlement may be made by the Corporation or such Indemnified Party without the prior written consent of the other, such consent not to be unreasonably withheld. 22 + + + + + +(4) In any such claim, such Indemnified Party shall have the right to retain other legal counsel to act on such Indemnified Party's behalf, provided that the fees and disbursements of such other legal counsel shall be paid by such Indemnified Party, unless: (a) the employment of such counsel has been authorized by the Corporation; or (b) the Corporation has not assumed the defence and employed counsel thereof promptly after receiving notice of such claim; or (c) the named parties to any such claim include both the Indemnified Party and the Corporation, and the Indemnified Party has been advised by legal counsel thereto that representation of both the Corporation and the Indemnified Party by the same legal counsel would be inappropriate due to actual or potential differing interests between them; or (d) there are one or more defences available to the Indemnified Party which are different from and in addition to those available to the Corporation, provided that the Corporation shall not be responsible for the fees or expenses of more than one legal firm in any single jurisdiction for all of the Indemnified Parties. (5) To the extent that any Indemnified Party is not a party to this Underwriting Agreement, the Agents shall obtain and hold the right and benefit of this Section 11 in trust for and on behalf of such Indemnified Party. (6) The Corporation hereby consents to personal jurisdiction in any court in which any claim that is subject to indemnification hereunder is brought against the Agents or any Indemnified Party and to the assignment of the benefit of this Section 11 to any Indemnified Party for the purpose of enforcement provided that nothing herein shall limit the Corporation's right or ability to contest the appropriate jurisdiction or forum for the determination of any such claims. (7) The rights of the Corporation contained in this Section 11 shall not enure to the benefit of any Indemnified Party if the Agents were provided with a copy of any amendment or supplement to this Agreement which corrects any untrue statement or omission or alleged omission that is the basis of a claim by a party against such Indemnified Party and that is required, under the Applicable Securities Laws, to be delivered to such party by the Agents. (8) The Corporation shall not be liable under this Section 11 for any settlement of any claim or action effected without its prior written consent. 23 + + + + + +(b) Notification of Claims If any matter or thing contemplated by Section 11(a) (any such matter or thing being referred to as a "Claim") is asserted against any person or company in respect of which indemnification is or might reasonably be considered to be provided, such person or company (the "Indemnified Party") will notify the Corporation as soon as possible of the nature of such Claim (but the omission so to notify the Corporation of any potential Claim shall not relieve the Corporation from any liability which they may have to any Indemnified Party and any omission so to notify the Corporation of any actual Claim shall affect the Corporation's liability only to the extent that the Corporation is materially prejudiced by that failure). The Corporation shall assume the defence of any suit brought to enforce such Claim, provided, however, that (i) the defence shall be conducted through legal counsel acceptable to the Indemnified Party, acting reasonably, and (ii) no settlement of any such Claim or admission of liability may be made by the Corporation without the prior written consent of the Indemnified Party, acting reasonably, unless such settlement includes an unconditional release of the Indemnified Party from all liability arising out of such action or claim and does not include a statement as to or an admission of fault, culpability or failure to act, by or on behalf of any Indemnified Party. (c) Right of Indemnity in Favour of Others With respect to any Indemnified Party who is not a party to this Agreement, the Agents shall obtain and hold the rights and benefits of this Section 11 in trust for and on behalf of such Indemnified Party. (d) Retaining Counsel In any such Claim, the Indemnified Party shall have the right to retain one separate counsel to act on his or its behalf, provided that the fees and disbursements of such counsel shall be paid by the Indemnified Party unless: (i) the Corporation and the Indemnified Party shall have mutually agreed in writing to the retention of the other counsel; (ii) the named parties to any such Claim (including any added third or impleaded party) include both the Indemnified Party and the Corporation and the Indemnified Party shall have been advised in writing by counsel to the Indemnified Party that the representation of both parties by the same counsel would be inappropriate due to an actual or potential conflict of interest between the Corporation and the Indemnified Party; or (iii) the Corporation shall not have retained counsel within seven Business Days following receipt by the Corporation of notice of any such Claim from the Indemnified Party; provided that the Corporation shall not be responsible for the fees or expenses of more than one legal firm in any single jurisdiction for all of the Indemnified Parties. 24 + + + + + +12. Contribution (a) Rights of Contribution In order to provide for a just and equitable contribution in circumstances in which the indemnity provided in Section 11 would otherwise be available in accordance with its terms but is, for any reason, held to be unavailable to or unenforceable by the Agents or enforceable otherwise than in accordance with its terms, the Corporation and the Agents shall contribute to the aggregate of all claims, expenses, costs and liabilities and all losses (other than loss of profits) of a nature contemplated by Section 11 in such proportions so that the Agents shall be responsible for the portion represented by the percentage that the aggregate Agents' Fee hereunder bears to the aggregate offering price of the Offered Shares being sold by the Corporation and the Corporation shall be responsible for the balance, whether or not they have been sued together or sued separately, provided, however, that (i) the Agents shall not in any event be liable to contribute, in the aggregate, any amounts in excess of the aggregate Agents' Fee actually received by the Agents from the Corporation under this Agreement; (ii) each Agent shall not in any event be liable to contribute, individually, any amount in excess of such Agents' portion of the aggregate Agents' Fee actually received from the Corporation under this Agreement; and (iii) no party who has engaged in any fraud, fraudulent misrepresentation, wilful misconduct or negligence shall be entitled to claim contribution from any person who has not engaged in such fraud, fraudulent misrepresentation, wilful misconduct or negligence. (b) Rights of Contribution in Addition to Other Rights The rights to contribution provided in this Section 12 shall be in addition to and not in derogation of any other right to contribution which the Agents may have by statute or otherwise at law. (c) Right of Contribution in Favour of Others With respect to this Section 12, the Corporation acknowledges and agrees that the Agents are contracting on their own behalf and as agents for their affiliates, directors, officers, employees and agents. For purposes of this Section 12, each person, if any, who controls an Agent within the meaning of Section 15 of the U.S. Securities Act or Section 20 of the U.S. Exchange Act and each Agents' affiliates and selling agents shall have the same rights to contribution as such Agent and each person, if any, who controls the Corporation within the meaning of Section 15 of the U.S. Securities Act or Section 20 of the U.S. Exchange Act shall have the same rights to contribution as the Corporation. The Agents' respective obligations to contribute pursuant to this Section 12 are several in proportion to the percentages of Agents' Fee set forth opposite their respective names in Section 5(a) hereof and not joint. 25 + + + + + +(d) Remedy Not Exclusive The remedies provided for in this Section 12 are not exclusive and shall not limit any rights or remedies which may otherwise be available to any party at law or in equity. 13. Severability If any provision of this Agreement is determined to be void or unenforceable in whole or in part, it shall be deemed not to affect or impair the validity of any other provision of this Agreement and such void or unenforceable provision shall be severable from this Agreement. 14. Expenses (a) Whether or not the transactions contemplated by this Agreement shall be completed, all expenses of or incidental to the issue, sale and delivery of the Offered Shares and all expenses of or incidental to all other matters in connection with the offering of the Offered Shares shall be borne by the Corporation including, without limitation, all fees and disbursements of all legal counsel to the Corporation (including U.S., foreign and local counsel), all fees and disbursements of the Corporation's accountants and auditors, all expenses related to road shows and marketing activities, all printing costs incurred in connection with the offering of the Offered Shares, including certificates, if any, representing the Offered Shares, all filing fees, all fees and expenses relating to listing the Offered Shares on any exchanges, all transfer agent fees and expenses, and all reasonable out-of-pocket expenses of the Agents incurred in connection with the offering of the Offered Shares, including without limitation the fees of Canadian counsel to the Agents which shall not exceed $50,000 (not including applicable taxes and disbursements and $10,000 USD plus tax and disbursements for U.S. Counsel), and any advertising, printing, courier, telecommunications, data search, presentation, travel and other expenses incurred by the Agents together with all related taxes (including, without limitation, provincial sales taxes and HST). (b) All expenses payable by the Corporation to the Agent in accordance with this Agreement shall be payable whether or not the Offering is completed. 15. Survival of Representations and Warranties The representations, warranties, obligations and agreements of the Corporation contained in this Agreement and in any certificate delivered pursuant to this Agreement or in connection with the purchase and sale of the Offered Shares shall survive the payment by the Agents for the Offered Shares, if any, and the distribution of the Offered Shares, and shall continue in full force and effect unaffected by the termination of the Agents' obligations and shall not be limited or prejudiced by any investigation made by or on behalf of the Agents in connection with the distribution of the Offered Shares. 26 + + + + + +16. Entire Agreement This Agreement, including any schedules hereto, represents the entire agreement of the parties hereto relating to the subject matter hereof and there are no representations, warranties, covenants or other agreements relating to the subject matter hereof except as stated or referred to herein. This Agreement shall not be amended or varied in its terms by oral agreement or by representations or otherwise except by instrument in writing executed by the duly authorized representatives of the parties hereto or their respective successors or assigns. It is understood that the terms and conditions of this Agreement supersede any previous verbal or written agreement between the Agents and the Corporation relating to the subject matter hereof. 17. Amendment No modification or amendment to this Agreement may be made unless agreed upon by the Corporation and the Agents in writing. 18. Assignment and Enurement No party may transfer or assign its rights or obligations under this Agreement without the prior written consent of the other parties and any transfer or assignment or purported transfer or assignment in contravention of this Section 18 shall be void and without force or effect. This Agreement shall be binding upon and shall enure to the benefit of the parties hereto and their respective successors and permitted assigns. 19. Time Time is of the essence in the performance of the parties' respective obligations under this Agreement. 20. Governing Law This Agreement shall be governed by and construed in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable in the Province of Ontario. 21. Notice Unless otherwise expressly provided in this Agreement, any notice or other communication to be given under this Agreement (a "notice") shall be in writing addressed as follows: If to the Corporation, addressed and sent to: Tribute Pharmaceuticals Canada Inc. 151 Steeles Avenue East Milton, Ontario L9T 1Y1 Attention: Rob Harris Facsimile No.: 519.434.4382 e-mail: rob.harris@tributepharma.com 27 + + + + + +with a copy to (which copy shall not constitute notice): Fogler, Rubinoff LLP 77 King Street West Suite 3000, P.O. Box 95 TD Centre North Tower Toronto, Ontario M5K 1G8 Attention: Eric Roblin Facsimile No.: 416.941.8852 e-mail: eroblin@foglers.com to the Agents at: Dundee Securities Ltd. 1 Adelaide Street East, Suite 2000 Toronto, Ontario M5C 2V9 Attention: Aaron Unger Facsimile No.: 416.849.1380 e-mail: aunger@dundeecapitalmarkets.com Kes 7 Capital Inc. 2 Bloor Street East, Suite 2102 Toronto, Ontario M4W 1A8 Attention: Marc Lustig e-mail: marcl@kes7capital.com Bloom Burton & Co. Ltd. 65 Front Street West Suite 300 Toronto, Ontario M5E 1B5 Attention: Jolyon Burton Facsimile No.: 416.640.7573 e-mail: jburton@bloomburton.com with a copy to (which copy shall not constitute notice): Dentons Canada LLP 77 King Street West, Suite 400, TD Centre Toronto, Ontario M5K 0A1 28 + + + + + +Attention: Andrew Elbaz Facsimile No.: 416.863.4592 email: andrew.elbaz@dentons.com or to such other address as any of the parties may designate by giving notice to the others in accordance with this Section 21. Each notice shall be personally delivered to the addressee or sent by fax or e-mail to the addressee. A notice which is personally delivered or delivered by fax or e-mail shall, if delivered prior to 5:00 p.m. (Toronto time) on a Business Day, be deemed to be given and received on that day and, in any other case, be deemed to be given and received on the first Business Day following the day on which it is delivered. 22. Authority of the Lead Agent The Lead Agent is hereby authorized by each of the other Agents to act on its behalf, except in respect of any consent to a settlement pursuant to Section 11(b) which consent shall be given by the Indemnified Party, a notice of termination pursuant to Section 10 which notice may be given by any of the Agents, or any waiver pursuant to Section 10(d), which waiver must be signed by all of the Agents. 23. Agents as Trustee The Corporation acknowledges and agrees that it is the intention of the parties to this Agreement and the Corporation hereby constitutes the Agents as trustees for each of the Subscribers in respect of each of the representations and warranties of the Corporation contained in this Agreement and the Agents shall be entitled, as trustees, in addition to any rights of the Subscribers, to enforce such representations and warranties on behalf of the Subscribers. 24. Counterparts This Agreement may be executed by the parties to this Agreement in counterpart and may be executed and delivered by facsimile and all such counterparts and facsimiles shall together constitute one and the same agreement. [The remainder of this page has been left blank intentionally.] 29 + + + + + +If the foregoing is in accordance with your understanding and is agreed to by you, please signify your acceptance by executing the enclosed copies of this letter where indicated below and returning the same to the Lead Agent upon which this letter as so accepted shall constitute an Agreement among us. Yours very truly, DUNDEE SECURITIES LTD. By: /s/ Aaron Unger Name: Aaron Unger Title: Managing Director KES 7 CAPITAL INC. By: /s/ Mark Christensen Name: Mark Christensen Title: President and CEO BLOOM BURTON & CO. LTD. By: /s/ Jolyon Burton Name: Jolyon Burton Title: CEO 30 + + + + + +The foregoing offer is accepted and agreed to as of the date first above written. TRIBUTE PHARMACEUTICALS INC. By: /s/ Rob Harris Name: Rob Harris Title: President and CEO 31 + +SCHEDULE A COMPLIANCE WITH UNITED STATES SECURITIES LAWS As used in this Schedule and related exhibits, the following terms shall have the meanings indicated: (a) "Accredited Investors" means institutions that are "accredited investors" meeting the criteria set forth in Rule 501(a) of Regulation D; (b) "Directed Selling Efforts" means "directed selling efforts" as that term is defined in Rule 902(c) of Regulation S, which, without limiting the foregoing, but for greater clarity in this Schedule, includes, subject to the exclusions from the definition of directed selling efforts contained in Regulation S, any activity undertaken for the purpose of, or that could reasonably be expected to have the effect of, conditioning the market in the United States for any of the Offered Shares and includes the placement of any advertisement in a publication with a general circulation in the United States that refers to the offering of the Offered Shares; (c) "Foreign Issuer" means "foreign issuer" as that term is defined in Rule 902(e) of Regulation S; (d) "General Solicitation" and "General Advertising" means "general solicitation" and "general advertising", respectively, as used in Rule 502(c) of Regulation D, including advertisements, articles, notices or other communications published in any newspaper, magazine or similar media or the internet or broadcast over radio or television or the internet, or any seminar or meeting whose attendees had been invited by general solicitation or general advertising; (e) "Offshore Transaction" means an "offshore transaction" as that term is defined in Rule 902(h) of Regulation S; (f) "Regulation D" means Regulation D adopted by the SEC under the U.S. Securities Act; (g) "Regulation S" means Regulation S adopted by the SEC under the U.S. Securities Act; (h) "SEC" means the United States Securities and Exchange Commission; (i) "Substantial U.S. Market Interest" means "substantial U.S. market interest" as that term is defined in Rule 902(j) of Regulation S; (j) "U.S. Affiliate" of any Lead Agent means the U.S. registered broker-dealer affiliate of the Lead Agent; (k) "U.S. Exchange Act" means the United States Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder; and (l) "U.S. Subscriber" means a Subscriber located in the United States, who was offered Offered Shares in the United States, who originated their purchase at or from the United States or who executes a Subscription Agreement while in the United States. + + + + + +All other capitalized terms used but not otherwise defined in this Schedule shall have the meanings assigned to them in the Agency Agreement to which this Schedule is attached. Representations, Warranties and Covenants of the Corporation The Corporation represents, warrants, covenants and acknowledges to and with the Agents and the U.S. Affiliates that: 1. The Corporation is a Foreign Issuer and reasonably believes that there is no Substantial U.S. Market Interest with respect to the common shares of the Corporation. 2. The Corporation is not, and after giving effect to the Offering and the application of the proceeds as contemplated hereby, will not be, required to register as an "investment company" as such term is defined under the United States Investment Corporation Act of 1940, as amended. 3. Except with respect to offers and sales to Accredited Investors identified by the Agents in reliance upon Regulation D, none of the Corporation, its affiliates, or any person acting on any of their behalf (other than the Agents, the U.S. Affiliates, any members of the banking and selling group formed by them, or any person acting on any of their behalf, as to whom the Corporation makes no representation, warranty, covenant or acknowledgment), has made or will make: (A) any offer to sell, or any solicitation of an offer to buy, any Offered Shares to a person in the United States; or (B) any sale of Offered Shares unless, at the time the buy order was or will have been originated, the Subscriber is (i) outside the United States, or (ii) the Corporation, its affiliates, and any person acting on any of their behalf reasonably believe that the Subscriber is outside the United States. 4. None of the Corporation, its affiliates, or any person acting on any of their behalf (other than the Agents, the U.S. Affiliates, any members of the banking and selling group formed by them, or any person acting on any of their behalf, as to whom the Corporation makes no representation, warranty, covenant or acknowledgment), has engaged or will engage in any Directed Selling Efforts, or has taken or will take any action that would cause the registration exemption and exclusion afforded by Rule 506(b) of Regulation D or Rule 903 of Regulation S, respectively, to be unavailable for offers and sales of the Offered Shares pursuant to this Agreement. 5. None of the Corporation, any of its affiliates or any person acting on any of their behalf (other than the Agents, the U.S. Affiliates, or any members of the banking and selling group formed by them, or any person acting on any of their behalf, as to whom the Corporation makes no representation, warranty, covenant or acknowledgment) has offered or will offer to sell, or has solicited or will solicit offers to buy, any of the Offered Shares in the United States by means of any form of General Solicitation or General Advertising or in any manner involving a public offering within the meaning of Section 4(a)(2) of the U.S. Securities Act. 2 + + + + + +6. For the period commencing six months prior to the date hereof and ending six months following the completion of the Offering, none of the Corporation, its affiliates, or any person acting on any of their behalf (other than the Agents, the U.S. Affiliates, or any members of the banking and selling group formed by them, or any person acting on any of their behalf, as to whom the Corporation makes no representation, warranty, covenant or acknowledgment) has sold, offered for sale or solicited any offer to buy or will sell, offer to sell or solicit any offer to buy any of the Corporation's securities in a manner that would be integrated with the offer and sale of the Offered Shares and would cause the exemption from registration afforded by Rule 506(b) of Regulation D to become unavailable with respect to the offer and sale of the Offered Shares. 7. Neither the Corporation nor any of its predecessors or affiliates has been subject to any order, judgment, or decree of any court of competent jurisdiction temporarily, preliminarily or permanently enjoining such person for failure to comply with Rule 503 of Regulation D. 8. None of the Corporation, its affiliates or any person on any of their behalf (other than the Agents, the U.S. Affiliates, or any members of the banking and selling group formed by them, or any person acting on any of their behalf, as to whom the Corporation makes no representation, warranty, covenant or acknowledgment) has taken or will take any action that would constitute a violation of Regulation M under the U.S. Exchange Act in connection with the Offering. 9. The Corporation will cause a Form D to be filed with the SEC within 15 days of the first sale of the Offered Shares to a U.S. Subscriber, and will, within the prescribed time periods, prepare and file any other forms or notices required under any state securities laws in connection with the offer and sale of Offered Shares. 10. With respect to Offered Shares to be offered and sold in reliance on Rule 506(b) of Regulation D, none of the Corporation, any of its predecessors, any affiliated issuer, any director, executive officer, other officer of the Corporation participating in the Offering, any beneficial owner of 20% or more of the Corporation's outstanding voting equity securities, calculated on the basis of voting power, or any promoter (as that term is defined in Rule 405 under the U.S. Securities Act) connected with the Corporation in any capacity at the time of sale (each, an "Issuer Covered Person" and, together, "Issuer Covered Persons") is subject to any of the "Bad Actor" disqualifications described in Rule 506(d)(1)(i) to (viii) of Regulation D (a "Disqualification Event"), except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3) of Regulation D. The Corporation has exercised reasonable care to determine whether any Issuer Covered Person is subject to a Disqualification Event. The Corporation has complied, to the extent applicable, with its disclosure obligations under Rule 506(e) of Regulation D, and has furnished to the Agents a copy of any disclosures provided thereunder. 11. The Corporation is not aware of any person (other than any Dealer Covered Person) that has been or will be paid (directly or indirectly) remuneration for solicitation of Subscribers in connection with the sale of any Offered Shares pursuant to Rule 506(b) of Regulation D. 3 + + + + + +12. The Corporation will notify the Agents, in writing, prior to the Closing Date of (i) any Disqualification Event relating to any Issuer Covered Person and (ii) any event that would, with the passage of time, become a Disqualification Event relating to any Issuer Covered Person. Representations, Warranties and Covenants of the Agents Each of the Agents represents, warrants, covenants and acknowledges to and with the Corporation that: 1. The Offered Shares have not been and will not be registered under the U.S. Securities Act or any state securities laws and may be offered and sold only in transactions exempt from or not subject to the registration requirements of the U.S. Securities Act and applicable state securities laws. It has not offered and sold, and will not offer and sell, any Offered Shares except: (a), in case of all Agents, offers and sales in Offshore Transactions in accordance with Rule 903 of Regulation S; or (b), in the case of the Lead Agent, offers in the United States to Accredited Investors as permitted by this Agreement. Accordingly, none of the Agent, its affiliates or any persons acting on any of their behalf, has made or will make (except as permitted in this Agreement): (i) any offer to sell, or any solicitation of an offer to buy, any Offered Shares to any person in the United States; (ii) any sale of Offered Shares to any Subscriber unless, at the time the buy order was or will have been originated, the Subscriber was outside the United States, or such Agent, affiliate or person acting on any of their behalf reasonably believed that such Subscriber was outside the United States. 2. It has not entered and will not enter into any contractual arrangement with respect to the offer and sale of the Offered Shares, except with its U.S. Affiliate, any selling group members or with the prior written consent of the Corporation. It shall require its U.S. Affiliate and each selling group member to agree, for the benefit of the Corporation, to comply with, and shall use its reasonable best efforts to ensure that its U.S. Affiliate and each selling group member complies with, the provisions of this Schedule applicable to the Agent as if such provisions applied to such U.S. Affiliate and such selling group members. 3. All offers of Offered Shares in the United States shall be made only by the Lead Agent through its U.S. Affiliate, which on the dates of such offers and subsequent sales by the Corporation was and will be duly registered as a broker-dealer under the U.S. Exchange Act and under all applicable state securities laws (unless exempt from the registration requirements thereof) and a member of, and in good standing with, the Financial Industry Regulatory Authority, Inc. The U.S. Affiliate will make all offers and arrange for all sales by the Corporation of Offered Shares in compliance with all applicable United States federal and state broker-dealer requirements and this Schedule. 4 + + + + + +4. None of the Agent, its affiliates, or any person acting on behalf of any of them, have engaged in any Directed Selling Efforts or have solicited or will solicit offers to buy, or have offered to sell or will offer to sell, any of the Offered Shares in the United States by any form of General Solicitation or General Advertising or in any manner involving a public offering within the meaning of Section 4(a)(2) of the U.S. Securities Act. 5. Any offer to sell or solicitation of an offer to buy Offered Shares that has been made or will be made in the United States by the Lead Agent through the U.S. Affiliate was or will be made only to Accredited Investors in transaction that in compliance with Rule 506(b) of Regulation D and to be exempt from registration under and in compliance with applicable state securities laws. 6. Immediately prior to soliciting any U.S. Subscriber, the Lead Agent, its U.S. Affiliate, their respective affiliates, and any person acting on behalf of any of them, had reasonable grounds to believe and did believe that each such U.S. Subscriber was an Accredited Investor, based upon a pre-existing relationship, and at the time of completion of each sale by the Corporation to such U.S. Subscriber, the Lead Agent, its U.S. Affiliate, their respective affiliates, and any person acting on behalf of any of them will have reasonable grounds to believe and will believe, that each U.S. Subscriber designated by the Lead Agent or its U.S. Affiliate to purchase Offered Shares from the Corporation is an Accredited Investor. 7. Prior to arranging for any sale by the Corporation of Offered Shares to U.S. Subscribers, the Lead Agent shall cause each such U.S. Subscriber to duly complete and execute a Subscription Agreement to be used for U.S. Subscribers. 8. At least one business day prior to the Closing Date, the transfer agent for the Corporation will be provided with a list of all U.S. Subscribers. 9. At the Closing Time, the Lead Agent, together with its U.S. Affiliate, will provide a certificate, substantially in the form of Exhibit I to this Schedule A relating to the manner of the offer of the Offered Shares in the United States or will be deemed to have represented and warranted to the Corporation that neither it nor its U.S. Affiliate has offered or sold Offered Shares in the United States. 10. Prior to arranging any sale by the Corporation of Offered Shares to a U.S. Subscriber, each such person will be informed that the Offered Shares have not been and will not be registered under the U.S. Securities Act or any state securities laws and are being offered and sold to such U.S. Subscriber in reliance on an exemption from the registration requirements of the U.S. Securities Act provided by Rule 506(b) of Regulation D and similar exemptions under applicable state securities laws. 11. None of the Agent, the U.S. Affiliate, or any person acting on its or their behalf has taken or will take any action in violation of Regulation M under the U.S. Exchange Act in connection with the Offering. 12. Other than Lead Agent and the U.S. Affiliate, it has not made and will not make any offers or sales of Offered Shares in the United States in connection with the Offering. 5 + + + + + +13. The Lead Agent represents and warrants that with respect to Offered Shares to be sold in reliance on Rule 506(b) of Regulation D, none of it, or the U.S. Affiliate, or any of its or the U.S. Affiliate's directors, executive officers, general partners, managing members or other officers participating in the Offering, or any other person associated with the Lead Agent who will receive, directly or indirectly, remuneration for solicitation of Subscribers of Offered Shares pursuant to Rule 506(b) of Regulation D (each, a "Dealer Covered Person" and, together, "Dealer Covered Persons"), is subject to any Disqualification Event (as defined below) except for a Disqualification Event (i) covered by Rule 506(d)(2)(i) of Regulation D and (ii) a description of which has been furnished in writing to the Corporation prior to the date hereof or, in the case of a Disqualification Event occurring after the date hereof, prior to the Closing Date. 14. The Lead Agent represents that it is not aware of any person (other than any Dealer Covered Person) that has been or will be paid (directly or indirectly) remuneration for solicitation of Subscribers in connection with the sale of any Offered Shares pursuant to Rule 506(b) of Regulation D. It will notify the Corporation, prior to the Closing Date of any agreement entered into between it and any such person in connection with such sale. 15. The Lead Agent will notify the Corporation, in writing, prior to the Closing Date, of (i) any Disqualification Event relating to any Dealer Covered Person not previously disclosed to the Corporation in accordance herewith, and (ii) any event that would, with the passage of time, become a Disqualification Event relating to any Dealer Covered Person. 6 \ No newline at end of file diff --git a/full_contract_txt/OLDAPIWIND-DOWNLTD_01_08_2016-EX-1.3-AGENCY AGREEMENT2.txt b/full_contract_txt/OLDAPIWIND-DOWNLTD_01_08_2016-EX-1.3-AGENCY AGREEMENT2.txt new file mode 100644 index 0000000000000000000000000000000000000000..832006beaf6b6371908c903db34502685bc41a2c --- /dev/null +++ b/full_contract_txt/OLDAPIWIND-DOWNLTD_01_08_2016-EX-1.3-AGENCY AGREEMENT2.txt @@ -0,0 +1,13 @@ +EXHIBIT I TO SCHEDULE A (COMPLIANCE WITH UNITED STATES SECURITIES LAWS) AGENTS' CERTIFICATE In connection with the offer and sale in the United States of common shares (the "Securities") of Tribute Pharmaceuticals Inc. (the "Corporation") to Accredited Investors pursuant to a Subscription Agreement dated as of May 22, 2015, and pursuant to an agency agreement (the "Agency Agreement") dated as of May 22, 2015 between the Corporation and the agents named therein, [ ] (the "Agent") and [ ] (the "U.S. Affiliate"), the U.S. registered broker-dealer affiliate of the Agent, hereby certify as follows: (i) on the date hereof and on the date of each offer of Securities by us in the United States and each subsequent sale to such offerees by the Corporation, the U.S. Affiliate is and was: (A) a duly registered as a broker-dealer under the U.S. Exchange Act and duly registered as a broker-dealer under the laws of each state where it made offers of Securities (unless exempt from such registration requirements); and (B) a member of and in good standing with the Financial Industry Regulatory Authority, Inc.; (ii) all offers of Securities by us in the United States have been effected by the U.S. Affiliate in accordance with all applicable U.S. federal and state broker-dealer requirements; (iii) immediately prior to offering the Securities to persons in the United States, we had reasonable grounds to believe and did believe that each such person was an Accredited Investor, based upon a pre-existing relationship, and, on the date hereof, we continue to believe that each such offeree purchasing Securities from the Corporation is an Accredited Investor; (iv) no form of Directed Selling Efforts, General Solicitation or General Advertising was used by us in connection with the offer of the Securities by us in the United States, and we have not acted in any manner involving public offering within the meaning of Section 4(a) (2) of the U.S. Securities Act in connection with the offer of the Securities by us in the United States; (v) in connection with arranging each sale by the Corporation of Securities to U.S. Subscribers solicited by us, we caused each such U.S. Subscriber to duly complete and execute a Subscription Agreement to be used for U.S Subscribers; (vi) the Agent represents and warrants that with respect to Offered Shares to be sold in reliance on Rule 506(b) of Regulation D, none of it, the U.S. Affiliate, any of its or the U.S. Affiliate's directors, executive officers, general partners, managing members or other officers participating in the Offering, or any other person associated with the Agent who will receive, directly or indirectly, remuneration for solicitation of Subscribers of Offered Shares pursuant to Rule 506(b) of Regulation D (each, a "Dealer Covered Person" and, together, "Dealer Covered Persons"), is subject to any Disqualification Event except for a Disqualification Event (i) covered by Rule 506(d)(2)(i) of Regulation D and (ii) a description of which has been furnished in writing to the Corporation prior to the date hereof; + + + + + +(vii) the Agent represents that it is not aware of any person (other than any Dealer Covered Person) that has been or will be paid (directly or indirectly) remuneration for solicitation of Subscribers in connection with the sale of any Offered Shares pursuant to Rule 506(b) of Regulation D; and (viii) the offering of the Securities in the United States has been conducted by us in accordance with the terms of the Agency Agreement, including Schedule A attached hereto. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] + + + + + +Terms used in this certificate have the meanings given to them in the Agency Agreement, including Schedule A attached hereto, unless otherwise defined herein. Dated this day of , 2015. [INSERT NAME OF AGENT] [INSERT NAME OF U.S. AFFILIATE] By: By: Name: Name: Title: Title: \ No newline at end of file diff --git a/full_contract_txt/OMINTO,INC_03_29_2004-EX-10-RESELLER AGREEMENT.txt b/full_contract_txt/OMINTO,INC_03_29_2004-EX-10-RESELLER AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..90ee1ccc9117342236dc0d6b28e4fed754e6e480 --- /dev/null +++ b/full_contract_txt/OMINTO,INC_03_29_2004-EX-10-RESELLER AGREEMENT.txt @@ -0,0 +1,291 @@ +EXHIBIT 10.25 RESELLER AGREEMENT + +THIS AGREEMENT (the "AGREEMENT") entered into as of the 19 day of March, 2004 (the "EFFECTIVE DATE") provides the terms and conditions under which MediaNet Group Technologies, Inc., a Nevada corporation having an address at 5100 W. Copans Road Suite 710 Margate, FL 33063 USA ("MEDIANET GROUP TECHNOLOGIES"), authorizes International Direct Response, Inc., a Pennsylvania Corporation, having an address at 1125 Lancaster Avenue, Berwyn, PA 19312("RESELLER") to be its true and lawful representative and agent for the purpose of reselling licenses of the MediaNet Group Technologies Portals ("PORTALS") and other MediaNet Group Technologies products and services in accordance with the terms and conditions contained in this Agreement. This Agreement, together with the other agreements and schedules referenced in it, contains the complete terms and conditions between the parties. + +MEDIANET GROUP TECHNOLOGIES AND RESELLER AGREE AS FOLLOWS: + +1. LICENSE + +Reseller is hereunder licensed to market MediaNet Group Technologies' Brand-A-Port portals ("PORTALS") and to resell MediaNet Group Technologies products and services for compensation in accordance with the annexed "RESELLING SCHEDULE." Under the terms and conditions as outlined in this Agreement. + +2. RESELLING + +The Reseller intends to market the Portals to companies and various businesses and individuals ("BUYERS") who may include corporations, small businesses, religious organizations, network marketing, franchise, business opportunities, chains, charities, organizations and other companies that would have a use for individual and multiple portals. The purpose of this Agreement is to define the scope of compensation for the marketing of Portals to these potential customers. During the Term of this Agreement, Reseller shall have the right to market Brand-A-Port Portals, both through the existing Brand-A-Port Portal under the License and independently to Buyers for resale, subject to approval by MediaNet Group Technologies. + +3. COMPENSATION + +MediaNet Group Technologies shall pay Reseller a fee in accordance with the annexed Fee Schedule. MediaNet Group Technologies will remit payment as directed by Reseller in the time frames noted on the Compensation Schedule attached hereto. + +4. PUBLICITY AND ADVERTISING + +Subject to Section 7, Reseller and MediaNet Group Technologies agree that broad publicity with respect to the relationship developed by this Agreement, and the advantages of such relationship, will be permitted and actively encouraged and supported by both parties. This publicity initiative will include, but is not limited to, a press releases issued by Reseller and MediaNet Group Technologies, publicizing the strategic alliance between the parties, on site promotion and email campaigns. In this regard, Reseller and MediaNet Group Technologies shall agree on the form, content of the press release prior to its release. MediaNet Group Technologies must approve any advertising prior to issuance and placement. + +5. PROPRIETARY RIGHTS + +5.1 OWNERSHIP. RESELLER understands and agrees that MediaNet Group Technologies is the exclusive holder of and shall retain, all right, title and interest in and to the Portal, Content and Engine and the All Pages, including without limitation all intellectual Property therein site (EXCLUDING PROPRIETARY PAGES PROVIDED BY RESELLER OR BUYERS). + +Reseller Agreement Initials ______ _______ 1 + +5.2 INTELLECTUAL PROPERTY. Nothing herein shall grant a party any right, title or interest in the other party's Intellectual Property, except as explicitly set forth herein. At no time during or after the Term of this Agreement shall a party challenge or assist others to challenge the other party's Intellectual Property or the registration thereof or attempt to register any trademarks, marks or trade names confusingly similar to those or the other party. + +5.3 INTELLECTUAL PROPERTY WARRANTY. The MediaNet Group Technologies BrandAPort Service and the operation of the site(s) and co-branded site(s) as currently operated by MediaNet Group Technologies, Inc. is designed to provide a link taking the end-user to it's originating website. Other than claims arising out of the use of the BrandAPort services, MediaNet Group Technologies shall not be responsible for unauthorized use of the Co-branded sites by Reseller, users of Reseller's or Buyers' Sites. + +6. CONFIDENTIALITY + +6.1 CONFIDENTIALITY INFORMATION. Each party (the "RECEIVING PARTY") acknowledges that by reason of its relationship to the other party (the "DISCLOSING PARTY") hereunder, the Receiving Party will have access to certain information and materials, including the terms of this Agreement, concerning the Disclosing Party's business, plans, technology, products and services that are confidential and of substantial value to the Disclosing Party, which value would be impaired if such information were disclosed to third parties ("CONFIDENTIAL INFORMATION"). The Receiving Party agrees that + + + + + +it shall not use in any way for its own account or the account of any third party, nor disclose to any third party, any such Confidential Information revealed to it by the Disclosing Party. The Receiving Party shall take every reasonable precaution to protect the confidentiality of Confidential Information. Upon request by the Receiving Party, the Disclosing Party shall advise whether or not it considers any particular information to be Confidential Information. The Receiving Party shall not publish any technical description of the Disclosing Party's Confidential Information beyond any descriptions published by the Disclosing party. In the event of expiration or termination of this Agreement, there shall be no use or disclosure by the Receiving Party of any Confidential Information of the Disclosing Party, and the Receiving Party shall not develop any software, devices, components or assemblies utilizing the Disclosing Party's Intellectual Property. Both parties agree that the terms and conditions of this Agreement are confidential and shall not be disclosed to any third party, unless disclosure is compelled by final, non-appealable order of a court of competent jurisdiction. + +6.2 EXCLUSIONS. Confidential Information does not include information permitted to be disclosed under section 5 and any information that the Receiving Party can demonstrate by written records: (a) was known to the Receiving Party prior to its disclosure hereunder by the disclosing party; (b) is independently developed by the Receiving Party; (c) is or becomes publicly known through no wrongful act of the Receiving Party; (d) has been rightfully received from a third party whom the Receiving party has reasonable grounds to believe is authorized to make such disclosure without restriction; (e) has been approved for public release by the Disclosing Party's prior written authorization, or (f) must be produced or disclosed pursuant to applicable law, regulation or court order, provided that the receiving party provides prompt advance notice thereof to enable the disclosing party to seek a protective order or otherwise prevent such disclosure. In addition, Reseller and MediaNet Group Technologies may disclose the existence and terms of this Agreement in connection with a potential acquisition of substantially the entire business of the other party, or a private or public offering of securities of either party. + +Reseller Agreement Initials ______ _______ &sbsp; 2 + +7. LIMITATION OF LIABILITY + +NEITHER RESELLER NOR MEDIANET GROUP TECHNOLOGIES MAKES ANY WARRANTY WHATSOEVER WITH REGARD TO THE FEATURES, FUNCTIONS, PERFORMANCE, QUALITY OR OTHER CHARACTERISTICS OF THE SERVICE EACH COMPANY PROVIDES. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO EACH OTHER OR ANY OTHER ENTITY FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL OR INDIRECT DAMAGES, HOWEVER CAUSED, ON ANY THEORY OF LIABILITY, AND NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED REMEDY. RESELLER SHALL NOT BE LIABLE TO MEDIANET GROUP TECHNOLOGIES OR ANY OTHER PARTY FOR ANY DAMAGES ARISING FROM THIRD PARTY UNAUTHORIZED ACCESS OR USE OF THE MEDIANET GROUP TECHNOLOGIES SERVICE OR ANY IMAGES OBTAINED BY USING THE MEDIANET GROUP TECHNOLOGIES SERVICE. MEDIANET GROUP TECHNOLOGIES SHALL NOT BE LIABLE TO RESELLER OR ANY OTHER PARTY FOR ANY DAMAGES ARISING FROM THIRD PARTY UNAUTHORIZED ACCESS OR USE OF THE MEDIANET GROUP TECHNOLOGIES SERVICE OR ANY IMAGES OBTAINED BY USING THE MEDIANET GROUP TECHNOLOGIES SERVICES. + +8. DISCLAIMERS + +MEDIANET GROUP TECHNOLOGIES DISCLAIMERS. MEDIANET GROUP TECHNOLOGIES MAKES NO OTHER WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, STATUTORY OR OTHERWISE, REGARDING THE MEDIANET GROUP TECHNOLOGIES, PICTUREJUDGE OR BRANDAPORT SERVICE, AND MEDIANET GROUP TECHNOLOGIES SPECIFICALLY DISCLAIMS ANY IMPLIED WARRANTIES OF NON-INFRINGEMENT, MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE. MEDIANET GROUP TECHNOLOGIES DOES NOT WARRANT THAT THE OPERATION OF THE MEDIANET GROUP TECHNOLOGIES SERVICE WILL BE UNINTERRUPTED OR ERROR-FREE. FURTHERMORE, MEDIANET GROUP TECHNOLOGIES DOES NOT MAKE ANY REPRESENTATIONS REGARDING THE USE OF THE RESULTS OF THE USE OF THE MEDIANET GROUP TECHNOLOGIES SITE IN TERMS OF THEIR CORRECTNESS, ACCURACY, RELIABILITY OR OTHERWISE. + +9. TERMS AND TERMINATION + +9.1 TERM. The term of this Agreement shall commence on the Effective Date and continue for a period of 1 year after the Effective Date, unless earlier terminated as set forth herein (the "TERM"). This Agreement shall renew for successive 1-year periods, after the initial 1 Year Term, if agreed by both parties in writing within 30 days of license expiration. Either party may terminate the Agreement on 60-days written notice during a renewed term. However, in no event shall termination of this Agreement by MediaNet Group Technologies relieve it of the obligation to remit payment to Reseller for sales or Portals, Hosting Services or other products and services to or through Buyers contracted by Reseller prior to such termination. The obligation to remit payment cease 30 days after termination of this Agreement. + +9.2 TERMINATION FOR BREACH OR INSOLVENCY. A party shall have the right to terminate this Agreement on written notice if (a) the other party ceases to do business in the ordinary course or is insolvent (i.e., unable to pay its debts in the ordinary course as they come due), or is declared bankrupt, or is the subject of any liquidation or insolvency proceeding which is not dismissed within 90 days, or makes any assignment for the benefit of creditors, or (b) the other party breaches any material term of this Agreement, including timely payments, and fails to cure such breach within 30 days after written notice thereof (collectively referred to here in as "TERMINATING EVENTS"). In the event of a Terminating Event, involving Reseller, other than for an event involving fraud or dishonesty by Reseller, MediaNet Group Technologies shall be entitled to offset payments + + + + + +due under this Agreement against its costs incurred as a result of the Terminating Event, but shall remain obligated to remit all payments due under this agreement as a direct result of the activities of Reseller prior to the effective date of termination. + +Reseller Agreement Initials ______ _______ &sbsp; 3 + +10. EFFECT OF TERMINATION + +Upon the expiration or termination of this Agreement: + +10.1 Each party shall, within 30 days of such expiration or termination return to other party or destroy all Confidential Information and all other material received from such other party. + +10.2 All rights granted by Reseller hereunder to MediaNet Group Technologies shall terminate. All rights granted by MediaNet Group Technologies hereunder to Reseller shall terminate, subject to the continuing obligation of MediaNet Group Technologies to remit payment pursuant to the provisions of Section 8. + +10.3 Sections 5, 6, 7, 9.2 10, 11, 12 and 13 shall survive the expiration or termination of this Agreement for any reason. + +11. REMEDIES + +11.1 INDEMNIFICATION. Reseller and MediaNet Group Technologies shall indemnify and hold harmless each other, and their respective directors, officers, employees, and agents, from and against all claims, losses, damages and expenses (including reasonable attorney's fees) resulting from the breach of any agreement, representation or warranty set forth herein; provided the indemnified party provides the indemnifying party with (i) prompt written notice of such claim or action, (ii) sole control and authority over the defense or settlement of such claim or action and (iii) proper and full information and reasonable assistance to defend and/or settle any such claim or action. + +11.2 INJUNCTIVE RELIEF. The parties acknowledge that the breach or threatened breach of this Agreement by Reseller would cause irreparable harm to MediaNet Group Technologies, the extent of which would be difficult to ascertain. Accordingly, each party agrees that, in addition to any other remedies to which MediaNet Group Technologies may be legally entitled, MediaNet Group Technologies may seek immediate injunctive relief in the event of a breach or threatened breach of such sections by the Reseller or any of Resellers employees or subcontractors. + +12. RESELLER PORTAL + +If applicable, MediaNet Group Technologies shall produce a Branded Portal for Licensee under terms as outlined in a Portal Agreement attached hereto. + +13. MISCELLANEOUS + +13.1 ASSIGNMENT. This Agreement will be binding upon and inure to the benefits of the parties hereto and their permitted successors and assigns. Reseller may nat assign or otherwise transfer this Agreement without MediaNet Group Technologies's prior written consent except to a successor. + +13.2 WAIVER AND AMENDMENT. No modifications, amendment or waiver of any provision of this Agreement shall be effective unless in writing and signed by the party to be charged. No failure or delay by either party in exercising any right, power, or remedy under this Agreement shall operate as a waiver of any such right, power or remedy. + +13.3 GOVERNING LAW. The laws of the State of Florida shall govern this Agreement, without reference to conflicts of law provisions. + +13.4 NOTICES, ETC. Any notice required or permitted by this Agreement shall be deemed given if delivered by registered mail, postage prepaid, addressed to the other party at the address shown at the beginning of this Agreement or at such other address for which such party gives notice hereunder. Delivery shall be deemed effective 3 days after deposit with postal + +Reseller Agreement Initials ______ _______ 4 + +authorities. Email, facsimile or other form of transmission pursuant to which MediaNet Group Technologies receives actual notice of the accounts into which the funds are to be wired may give notices of the accounts into which payment is to be wired shall be effective and MediaNet Group Technologies shall be entitled to rely upon them as if they were sent in accordance with the notice provisions of this paragraph. + +13.5 INDEPENDENT CONTRACTORS. The parties are independent contractors with respect to each other. Each party is not and shall not be deemed to be an employees, agent, joint venture Reseller or legal representative of the other for any purpose and shall not have any right, power, or authority to create any obligation or responsibility on behalf of the other. + +13.6 SEVERABILITY. If any provision of this Agreement shall be held by a court of competent jurisdiction to be contrary to law, such provision shall be changed and interpreted so as to best accomplish the objectives of the original provision to the fullest extent allowed by law and the remaining + + + + + +provisions of this Agreement shall remain in full force and effect. + +13.7 COMPLETE UNDERSTANDING. This Agreement constitutes the final, complete and exclusive agreement between the parties with respect to the subject matter hereof, and supersedes any prior or contemporaneous agreement, either written or oral. + +13.8 FORCE MAJEUR. Except with respect to obligations to make payments hereunder, neither party shall be deemed in default hereunder, nor shall it hold the other party responsible for, any cessation, interruption or delay in the performance of its obligations hereunder due to causes beyond its reasonable control including, but not limited to: earthquake, flood, fire, storm or other natural disaster, act of God, labor controversy or threat thereof, civil disturbance or commotion, disruption of the public markets, war or armed conflict or the inability to obtain sufficient material, supplies, labor, transportation, power or other essential commodity or service required in the conduct of its business, including internet access, or any change in or the adoption of any law, ordinance, rule, regulation, order, judgment or decree. + +13.9 CONTENT. It is agreed that MediaNet Group Technologies shall have complete control of content on the Portals with the exception of the customized pages and links on contracted portals, and these pages and links are subject to MediaNet Group Technologies's approval. + +13.10 NO DISPARAGEMENT. Each party agrees that, during the Term of this Agreement and for a period of five (5) years thereafter, neither will make written or oral comments regarding the other that are negative, disparaging, tend to bring the other into disrepute or call into question the business acumen, character, honesty or integrity of the other. + +IN WITNESS WHEREOF, the parties have caused this Agreement to be executed effective as of the day and year last set forth below. + +MEDIANET GROUP TECHNOLOGIES, INC. LEGAL NAME: Michael Guyer + +/s/ Martin A.Berns /s/ Michael Guyer --------------------------------- ------------------------------------ Signature Signature + +By: Martin A. Berns By: Michael Guyer + +Title: Chief Executive Officer Title: VP & Director of Marketing + +Name of Master Reseller (if applicable):____________ Approved by:_______________ + +Reseller Agreement Initials ______ _______ 5 + +LICENSE RESELLING SCHEDULE + +Resellers are licensed to market the Brand-A-Port applications and receive commission on all product sales plus residual income on hosting/maintenance fees as outlined on the Compensation Schedule attached hereto. + +THE PLAN + +The MediaNet Group Technologies Reseller Plan is free to join. Under the plan, resellers market and promote MediaNet Group Technologies's software product range to their existing customer base and the general Internet community. By referring a customer to the MediaNet Group Technologies web site, the reseller receives a commission for customer's purchase of the MediaNet Group Technologies Brand-A-Port software. + +MARKETING AND PROMOTION + +Resellers are expected to actively market and promote MediaNet Group Technologies Software to their existing customer base and visitors to their web site. Promotion by newsletters and e-mail to customers is encouraged, but we do not encourage spam e-mail and hence specifically ask resellers not to promote MediaNet Group Technologies Software or Applications via unsolicited e-mail. + +RESELLER LINK + +Customers are identified as coming from a particular reseller by placing a link(s) on their web site, which contains a cookie (i.e.. small packet of code) which identifies the reseller. On acceptance into the program, MediaNet Group Technologies issues the reseller with the cookie and instructions on how to insert the cookie into their web site. + +WHAT PRODUCTS ARE AVAILABLE FOR RESALE? + +Products which can be resold, include: Brand-A-Port Gold (Generic Portal), Brand-A-Port Platinum Portal and Branded PictureJudge applications. MediaNet Group Technologies may offer additional products from time to time. + +COMMISSION + +MediaNet Group Technologies tracks the customer sales coming from the reseller and at the end of every calendar month issues a check for 20% commission to the reseller on product sales and 10% the total amount of hosting/maintenance sales made. Commissions are only paid each month if the amount owing exceeds $100 US. MediaNet Group Technologies reserves the right to change the level of commission + + + + + +with out notice. Commission is not paid on MediaNet Group Technologies's free-ware programs. (pricing and products subject to change without notice). + +CUSTOMER CONTACT + +Once a customer has come from the reseller to the MediaNet Group Technologies web site, MediaNet Group Technologies deals with the customer directly, issuing the software from the MediaNet Group Technologies server and billing the customer. MediaNet Group Technologies handles all technical support and refund issues. + +REFUNDS + +If a refund is issued to a customer who came from a reseller, the reseller's account is adjusted accordingly. + +TERMINATION + +The Reseller Agreement can be terminated at any time at the discretion of either party. + +Reseller Agreement Initials ______ _______ 6 + +COMPENSATION SCHEDULE + +This Compensation Schedule is attached hereto and made a part thereof that certain Reseller Agreement of even date: + +Reseller shall be entitled to receive compensation in the following manner: + +COMPENSATION: + +BSP REWARDS PROGRAM: MediaNet shall, upon collection, remit to Member Provider _1_% of the net Rewards earned by Members through and provided directly by it, and _1_% of the net Member Rewards received and collected that is earned through Merchants, Companies, Organizations, Groups and individuals that have been contracted through Member Provider. + +BRAND-A-PORT OR BSP PORTAL SALES: MediaNet shall remit to Member Provider 20% of the price of each Portal sold directly by it. + +BSP MONTHLY HOSTING FEES: In addition, MediaNet shall remit to Member Provider an amount equal to 10% of the hosting fees paid by Buyers who purchase portals or host websites with MediaNet as a direct result of the activities of Member Provider, whether those activities are sold through the portal or independent of it. + +PAYMENT OF COMPENSATION (SUBJECT TO RECEIPT OF GOOD, VALID FUNDS) + +PORTAL SALES: MediaNet shall remit all sums due to Member Provider within 30 days of receipt of cleared funds. + +MONTHLY HOSTING FEES: In addition, MediaNet shall remit hosting fees to Member Provider in monthly installments on or before the 15th business day of each month. All sums received by MediaNet through the last business day of the preceding month shall be included in the calculation of the amount to be remitted. + +BSP REWARDS MEMBER PURCHASES VOLUME: Amounts due for purchases of products or services shall be calculated as of funds received by the last day of each month and remitted on or before the 15th day of the following month. + +RECORDS + +MediaNet shall maintain books and records and shall provide for online confirmation of sales and payments. MediaNet shall permit Member Provider or its designees reasonable access during normal business hours and, upon request, to verify funds and payments due pursuant to this Agreement. + +IN WITNESS WHEREOF, the parties have caused this Agreement to be executed effective as of the day and year last set forth below. + +Reseller Agreement Initials ______ _______ 7 + +RESELLER DISTRIBUTOR PRICING STRUCTURE & DETAILS + +GOLD PORTAL + +Includes the following available options: + +o Complete Basic Portal + +o Web-based Admin Panel to turn on and turn off individual applications and features + +o Branded Header + +o Branded Frames + +o Reseller Program + +o Email + +o MediaNet Group Technologies Photo Sharing + + + + + +o MediaNet Group Technologies Travel Agency + +Retail $495 License Wholesale $395 Monthly Hosting/Maintenance/Updates Retail $39 Wholesale $35 (quarterly maintenance fee due in advance) + +PLATINUM PORTAL + +Includes at your option: + +o Full Featured Customizable Portal with web based administration panel + +o Branded Header + +o Branded Photo Sharing + +o Branded Travel Agency + +o Branded Frames + +o Email + +o Branded Picture Judge + +o Reseller program + +Retail $1295 License Wholesale $1035 Monthly Hosting/Maintenance/Updates Retail $99 Wholesale $89 (quarterly maintenance fee due in advance) + +BRANDED PICTUREJUDGE(SM) INTERACTIVE PHOTO RATING GAME + +Includes at your option: o Branded PictureJudge photo rating game o Customized phot catagories o Reseller Program + +Retail $795 License Wholesale $635 Monthly Hosting/Maintenance/Updates Retail $69 Wholesale $63 (quarterly maintenance fee due in advance) + +Reseller Agreement Initials ______ _______ 8 + +PROCEDURE FOR REGISTERING PROSPECTIVE CLIENTS, MEMBER PROVIDERS/ MERCHANTS/MERCHANT MEMBER PROVIDERS + +This Addendum is attached hereto and made a part hereof that certain Reseller or Master Reseller Agreement between the parties: + +MEDIANET GROUP (MNG) HAS DEVELOPED A SET OF CRITERIA DESIGNED TO AVOID ANY POTENTIAL PROSPECT REGISTRATION DISPUTES AND TO ASSURE OUR RESELLERS FULL COMMISSION ON SALES MADE BY THEM. TO INSURE THIS GOAL, WE HAVE CREATED CRITERIA THAT MUST BE FOLLOWED FOR REGISTRATION OF THE COMPANIES (PROSPECTS) INTRODUCED TO THE BSP REWARDS PROGRAM. + +1. Resellers must send us an E-mail with the company name, contact and title that you wish to register with the Company. Said contact must have the authority to make the decision relative to the Brand-A-Port and/or BSP programs. + +2. MNG will send an e-mail to the Reseller approving or disapproving the registration of the prospective client dependent upon whether or not there has been prior contact by the company, registration of the prospect by another Reseller or other factors as determined by the MNG. + +3. Upon approval by MNG, the Reseller will have 30 days to initiate and complete a proposal to said prospect. The proposal must be approved by MNG and receipt confirmed by the prospect. + +4. The Reseller will then have 5 months to bring the registered prospect to contract. If a contract is not consummated in the allotted time-frame, the prospect shall then revert back to MNG. Reseller may then re-register the prospect subject to the above criteria and/or other criteria in effect at the time. + +The above criteria points are firm unless a special situation is approved by MNG in writing. + +WE BELIEVE THAT EACH REPRESENTATIVE AND RESELLER WILL SEE THE BENEFITS OF THIS PROGRAM AND THE PROTECTION IT AFFORDS THEM. + +APPROVED AND ACCEPTED BY THE SIGNATORY PARTIES BELOW THIS __ OF ________, 200__. + +MediaNet Group Technologies, Inc. ________________________ + +Accepted by: __________________________ Accepted by:__________________ Chief Executive Officer Title: + +Reseller Agreement Initials ______ _______ 9 \ No newline at end of file diff --git a/full_contract_txt/ON2TECHNOLOGIES,INC_11_17_2006-EX-10.3-SUPPORT AND MAINTENANCE AGREEMENT.txt b/full_contract_txt/ON2TECHNOLOGIES,INC_11_17_2006-EX-10.3-SUPPORT AND MAINTENANCE AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..b079f4fdd95e009f28d8c7d72a2b86fceb5faba0 --- /dev/null +++ b/full_contract_txt/ON2TECHNOLOGIES,INC_11_17_2006-EX-10.3-SUPPORT AND MAINTENANCE AGREEMENT.txt @@ -0,0 +1,537 @@ +Exhibit 10.3 + + EXHIBIT C + + SUPPORT AND MAINTENANCE AGREEMENT + + SUPPORT AND MAINTENANCE AGREEMENT dated as of April __, 2005 (the "Effective Date"), between On2 Technologies, Inc., a Delaware corporation ("On2"), and Wildform, Inc., a California corporation ("Wildform"). Capitalized terms used herein and not defined herein shall have the meanings given to them in Asset Purchase Agreement (as defined below). + + WITNESSETH: + + WHEREAS, On2 and Wildform have entered into an Asset Purchase And Software License Agreement dated as of April 4, 2005 (the "Asset Purchase Agreement") pursuant to which, among other matters, Wildform has agreed to sell and license certain assets to On2; and + + WHEREAS, in connection with the Asset Purchase Agreement, On2 desires for Wildform to provide certain services to On2, and Wildform wishes to perform such services in accordance herewith. + + NOW, THEREFORE, subject to the terms, conditions, covenants and provisions of this Agreement, each of On2 and Wildform mutually covenant and agree as follows: + + ARTICLE I + + DEFINITIONS + + For purposes hereof, each of the following terms shall have the respective meaning set forth below, whether employed in the singular or plural, unless the particular context in which a term is used clearly indicates otherwise: + + 1.1 "Closing Date Payment Amount" shall have the meaning set forth in the Asset Purchase Agreement. + + 1.2 "Common Stock" means the common stock of On2, par value $0.01. + + 1.3 "Confidential Information" means any and all information disclosed by one Party (the "Disclosing Party") to the other Party (the "Receiving Party"), in any manner, prior to the Effective Date and thereafter during the Term. Confidential Information may include, but is not limited to, the following types of information and other information of a similar nature, in any form or medium, in any way perceived: trade secrets, software licensed on an evaluation basis hereunder (whether source code, executable code or otherwise), source code, inventions, art, drawings, schematics, files, file data, documentation, diagrams, specifications, know how, processes, formulas, flow charts, product criteria, research and development records, procedures, test results and samples, marketing techniques and materials, marketing and development plans, pricing data, price lists, business plans, information relating to customer identities, supplier or other source identities, and financial information. + +Confidential Information of a Disclosing Party may also include any information described above, whether or not owned or developed by it, and any such information Disclosing Party is obligated to keep confidential by way of a written agreement with a third party. Notwithstanding the foregoing, Confidential Information shall not include any of the foregoing that (i) is or becomes generally available to the public other than as a result of a disclosure by the Receiving Party, (ii) is rightfully in the possession of Receiving Party prior to disclosure by Disclosing Party, (iii) is received by Receiving Party from a third party having the right to make such disclosure and not under a confidentiality obligation to the Disclosing Party, or (iv) is independently developed by the Receiving Party without reference to or use of any Confidential Information of the Disclosing Party. + + 1.4 "Deliverable" means each item to be delivered by Wildform in accordance with Exhibit B hereto. + + 1.5 "Development Work" means the customization and integration of the Flix Software to be performed by Wildform and described on Exhibit B hereto + + 1.6 "Exchange Act" means the Securities and Exchange Act of 1934, as amended. + + 1.7 "Flix Software" means the following software in source code and object code form: Flix Pro 4 for Windows, Flix Pro 4 for Windows Demo, Flix Pro 3 for Mac, Flix Pro 3 for Mac Demo, Flix Engine 3.5 for Windows, Flix Engine 3.5 for Windows Demo, Flix Exporter 4 for Windows (including Flix FLV player) Flix Exporter 4 for Windows Demo (including Flix FLV player), Flix Exporter 4 for Mac (including Flix FLV player), Flix Exporter 4 for Mac Demo (including Flix FLV player), Flix Lite 3 for Windows, Flix Lite 3 for Windows Demo, Flix Lite 3 for Mac, Flix Lite 3 for Mac Demo. + + 1.8 "Incorporated Technology" means any technology or materials (including software source code) provided by On2 to Wildform in order for Wildform to perform the Development Work. + + 1.9 "Intellectual Property Rights" means all intellectual property rights arising under statutory or common law or any other legal system in the world, including that which is acquired or obtained under a contract with a third + + + + + +party, and whether or not perfected, comprising any of the following: (i) copyrights, copyright registrations, mask works and mask work registrations; (ii) rights relating to the protection of trade secrets and confidential information; (iii) patents, patent applications, reissue patents and reissue applications, continuation and continuation in part applications, invention registrations, petty patents; (iv) trademarks, service marks, trade names, trade dress, domain names, and registrations for the foregoing, of all kinds and types; (v) any right analogous to those set forth in this definition in foreign jurisdictions; and (vi) any renewals or extensions of the foregoing (as and to the extent applicable) now existing, or hereafter filed, issued or acquired. + + 1.10 "Incorporated Technology Works" shall mean all inventions, intellectual property, works, derivative works, innovations, or other developments made or developed by Wildform solely as a result of and in relation to the incorporation of the Incorporated Technology to the Flix Software, and explicitly excluding the Licensed Assets. + + 1.11 "Nonconformance Notice" shall have the meaning set forth in Section 3.1 hereof. + + 1.12 "Payment Shares" means Two Hundred Eighty Thousand shares of Common Stock, subject to adjustment from time to time in connection with any stock split, reverse stock split, stock dividend or other similar change in On2's capitalization. + + 1.13 "Program Errors" means any defect in the Flix Software that 1) results in the loss or corruption of data on a user's system, 2) causes the Flix Software to become unstable, 3) eliminates the user's ability to perform intended functions in the Flix Software, or 4) causes the operating system or any other programs to become unstable or cease to function. The defect must be caused by the Flix Software in the form provided by Wildform as a Deliverable. + + 1.14 "Specifications" shall mean the Flix Software customizations and integrations described on Exhibit B. + + 1.15 "Term" shall have the meaning set forth in Section 9.1 hereof. + + ARTICLE II + + TRANSITION SERVICES PROVIDED + + 2.1 Transition Services. Upon the terms and subject to the conditions set forth in this Agreement, with respect to each of those services set forth on Exhibit A hereto, which Exhibit is made a part of this Agreement, Wildform will provide to On2 the services indicated on such Exhibit (the "Transition Services") during the time period for each such Transition Service set forth in such Exhibit (hereinafter referred to as the "Time Periods" for all of the Transition Services, and the "Time Period" for each Transition Service). + + 2.2 Personnel. In providing the Transition Services, Wildform, as it deems necessary or appropriate in its sole discretion, may (i) use its personnel, and (ii) employ the services of third parties to the extent such third party services are reasonably necessary for the efficient performance of any of such Transition Services, provided, however that the marketing and PR services set forth on Exhibit A shall be supervised by Colby Devitt or Jonathan Blank. + + 2.3 Representatives. Each of On2 and Wildform shall appoint a representative to act as its primary contact person for the provision of all of the Transition Services (collectively, the "Primary Coordinators"). The initial Primary Coordinators shall be Chris Schapdick for On2 and Jonathan Blank for Wildform. Each party may treat an act of a Primary Coordinator of another party as being authorized by such other party without inquiring behind such act or ascertaining whether such Primary Coordinator had authority to so act. Wildform and On2 shall advise each other in writing of any change in the Primary Coordinators, setting forth the name of the Primary Coordinator to be replaced and the name of the replacement, and certifying that the replacement Primary Coordinator is authorized to act for such party in all matters relating to this Agreement. Each of On2 and Wildform agree that all communications relating to the provision of the Transition Services shall be directed to the Primary Coordinators. + + 2.4 Level of Transition Services. Wildform shall perform the Transition Services for which it is responsible hereunder following commonly accepted standards of care in the industry and exercising the same degree of care as it exercises in performing the same or similar services for its own business as of the date of this Agreement. + + ARTICLE III + + SOFTWARE DELIVERABLES + + 3.1 Deliverables. Subject to payment by On2 of the Closing Date Payment Amount in accordance with the Asset Purchase Agreement, Wildform shall deliver each Deliverable in accordance with the timeframe (the "Timeframe") set forth in Exhibit B, which Exhibit is made a part of this Agreement. On2 will use commercially reasonable efforts to cooperate with Wildform as necessary in completing the Development Work and delivery of the Deliverables. Upon receipt of each Deliverable, On2 shall have a period of thirty (30) working days within which to inspect such Deliverable based upon the relevant Specification (an "Acceptance Period"). Should On2 find that any Deliverable does not substantially conform to the relevant Specification, On2 shall promptly so notify Wildform in writing, which notice shall provide sufficiently detailed + + + + + +explanation of the non-conformities so as to allow Wildform to reproduce them (any such notice is referred to herein as a "Nonconformance Notice"). Each of the Deliverables shall be deemed accepted by On2 unless On2 delivers to Wildform a Nonconformance Notice within thirty (30) business days of the delivery of such Deliverable. In the event that Wildform receives such Nonconformance Notice from On2, Wildform shall make commercially reasonable efforts to modify such Deliverable and re-deliver it to On2 after any such modification is completed. Each Deliverable shall be deemed to have been accepted by On2 when either (i) On2 notifies Wildform in writing of its acceptance of such Deliverables or (ii) On2 does not deliver a Nonconformance Notice to Wildform within the Acceptance Period. Notwithstanding anything herein to the contrary, On2 shall not unreasonably withhold acceptance of any Deliverable. + + 3.2 Program Errors. During the Term, Wildform shall resolve Program Errors in the manner provided in Exhibit A. + + ARTICLE IV + + COMPENSATION + + As consideration for the services to be provided by Wildform hereunder, On2 will pay Wildform a total of (i) $160,000 payable as follows: (a) $22,500 per month for each of the four (4) months following the Effective Date and $10,000 per month for each of the fifth and sixth months following the Effective Date with the first payment being payable 30 days from the Effective Date, and each subsequent payment payable within thirty (30) days of the preceding payment and (b) $50,000 upon On2's acceptance of the Deliverables pursuant to Section 3.1 hereof; and (ii) the Payment Shares, issuable upon the 12-month anniversary of the Effective Date. The foregoing notwithstanding, the payment provided for in this Article IV is not intended to constitute consideration for the Purchased Assets and Licensed Assets, payment for the license of which is provided for in the Asset Purchase Agreement. + + ARTICLE V + + CONFIDENTIALITY + + 5.1 Use of Confidential Information. The Receiving Party represents and warrants to the Disclosing Party that: + + 5.1.1 it will keep and maintain all Confidential Information of the Disclosing Party in strict confidence, using such degree of care as is appropriate to avoid unauthorized use or disclosure; + + 5.1.2 it will not, directly or indirectly, disclose any Confidential Information to any third party, except as contemplated by this Agreement or with the Disclosing Party's prior written consent; + + 5.1.3 it will not make use of any Confidential Information for its own purposes, such as creation of a competitive product; or for the benefit of anyone or any entity other than as contemplated by this Agreement; + + 5.1.4 upon the Disclosing Party's written request, at the earlier of the end of the Term, or receipt of notice from the Disclosing Party of a breach by it of this Agreement or an Annex, the Receiving Party will deliver promptly to the Disclosing Party or, at the Receiving Party's option, will destroy all memoranda, notes, records, reports, media and other documents and materials (and all copies thereof) regarding or including any Confidential Information which the Receiving Party may then possess or have under its control; and + + 5.1.5 it will take no action with respect to the Confidential Information that is inconsistent with its confidential and proprietary nature. + + 5.2 Exceptions to Non-Disclosure Obligations. Notwithstanding the foregoing, the Receiving Party shall be permitted to disclose Confidential Information without any violation of this Agreement if such disclosure is required by law, but in such event the Receiving Party shall notify the Disclosing Party in writing in advance of such disclosure, and provide the Disclosing Party with copies of any related information so that the Disclosing Party may take appropriate action to protect its Confidential Information. The Receiving Party acknowledges that the disclosure of Confidential Information of the Disclosing Party may cause irreparable injury to the Disclosing Party and damages that may be difficult to ascertain. The Disclosing Party shall, therefore, be entitled to injunctive relief upon a disclosure or threatened disclosure of any Confidential Information of the Disclosing Party in violation of this Agreement, in addition to such other remedies as may be available at law or in equity. Without limitation of the foregoing, the Receiving Party shall promptly advise the Disclosing Party in the event that the Receiving Party learns or has reason to believe that any person or entity that has had access to Confidential Information of the Disclosing Party through the Receiving Party has violated or intends to violate the terms of this Agreement. + + 5.3 Receiving Party's Duty of Care. Receiving Party shall protect the Confidential Information from unauthorized use or disclosure by exercising the same degree of care that Receiving Party uses with respect to information of its own of a similar nature, but in no event less than reasonable care, until five (5) years from the later of the Effective Date or the date of receipt of such Confidential Information. Notwithstanding the prior sentence, with respect to Receiving Party's employees, Receiving Party shall only disclose Confidential Information to a Receiving Party employee who has a need to know such Confidential Information for purposes of this Agreement or any customer sublicense and is informed of the confidential nature of the Confidential Information. The foregoing notwithstanding, each Party shall be liable for any failure by such Party's employees, agents or representatives to comply with the + + + + + +provisions of this Section 5 as fully as if such employees, agents or representatives were a party to this Agreement. + + ARTICLE VI + + WARRANTIES + + 6.1 On2 Warranties. On2 makes the following representations and warranties to Wildform. + + (a) Authorization; Power and Authority. On2 (i) is a corporation duly organized under the laws of the state of Delaware, and (ii) has the requisite corporate power and corporate authority to enter into and perform its obligations under this Agreement. + + (b) Exchange Act Reporting. On2 has filed in a timely manner all documents that it was required to file under the Exchange Act, during the twelve (12) months preceding the date of this Agreement. + + (c) Payment Shares. The Payment Shares to be issued by On2 to Wildform hereunder: (i) are duly authorized; and (ii) when issued and exchanged pursuant to the terms of this Agreement, will be validly issued, fully paid, non-assessable and not subject to preemptive rights; and (iii) when issued and exchanged pursuant to the terms of this Agreement, shall have been approved for listing on the American Stock Exchange (or such other trading market or exchange on which the Common Stock is listed or quoted for trading on the date in question). + + 6.2 Wildform Warranties. Wildform makes the following representations and warranties to On2. + + (a) Authorization; Power and Authority. Wildform (i) is a corporation duly organized under the laws of the State of California, (ii) has the requisite corporate power and corporate authority to enter into and perform its obligations under this Agreement, and (iii) to the best of Wildform's knowledge as of the Effective Date, the Deliverables marked as Deliverable #2 will not infringe any Intellectual Property Rights held by any third party. + + (b) Investment Representation. Wildform acknowledges that it is aware that the Payment Shares have not been registered under the Act. Wildform represents and warrants to the Buyer that such Wildform is acquiring the Payment Shares for investment purposes and not with a view to or for sale in connection with any distribution thereof or with any present intention of selling the Payment Shares in connection with a distribution. Wildform has the capacity to protect its own interest, can bear the economic risk of its investment, and has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment in the Payment Shares. Wildform acknowledges that an investment in the Payment Shares represents a high degree of risk + + and that there is no assurance that Buyer's business or operations will be successful. Wildform has considered carefully the risks attendant to an investment in the Payment Shares and acknowledges that, as a consequence of such risks, such Wildform could lose its entire investment in the Payment Shares. Wildform acknowledges that, at a reasonable time prior to the Effective Date, Buyer furnished to it the information specified in paragraph (b)2(ii)(A) or (B) of, and in either event the information specified in paragraph (b)(2)(ii)(C) of, Rule 502 promulgated under Exchange Act. + + (c) Restricted Securities. Wildform understands that the Payment Shares will be "restricted securities" under applicable federal securities laws and the rules of the Securities and Exchange Commission promulgated thereunder. Wildform acknowledges that it may dispose of the Payment Shares only pursuant to an effective registration statement under the Act or an exception from registration if available. Wildform further understands that, except as provided in the Registration Rights Agreement (as defined below), Buyer has no obligation to register the sale of the Payment Shares or take any other action so as to permit sales pursuant to the Act. Wildform further understands that applicable state securities laws may impose additional constraints upon the sale of securities + + 6.3 No Warranty. EXCEPT AS PROVIDED IN SUBSECTIONS 6.1 AND 6.2 ABOVE, THE DELIVERABLES AND INCORPORATED TECHNOLOGY ARE PROVIDED "AS-IS" WITHOUT WARRANTY OF ANY KIND AND BOTH PARTIES EXPRESSLY AGREE AND ACKNOWLEDGE THAT THE DELIVERABLES AND INCORPORATED TECHNOLOGY ARE BEING PROVIDED WITHOUT ANY REPRESENTATIONS, WARRANTIES OR CONDITIONS WHETHER EXPRESS, IMPLIED, STATUTORY, ARISING OUT OF A COURSE OF DEALING OR USAGE OF TRADE OR OTHERWISE INCLUDING, BUT NOT LIMITED TO, ANY IMPLIED WARRANTIES OR CONDITIONS OF MERCHANTABILITY, MERCHANTABLE QUALITY, FITNESS OR ADEQUACY FOR ANY PARTICULAR PURPOSE OR USE, QUALITY, PRODUCTIVENESS, CAPACITY, OR THAT THE OPERATION OF THE DELIVERABLES OR INCORPORTED TECHNOLOGY WILL BE ERROR-FREE. NO ORAL OR WRITTEN INFORMATION OR ADVICE GIVEN BY A PARTY, ITS DIRECTORS, OFFICERS, EMPLOYEES, LICENSORS, SUPPLIERS, AGENTS, OR TO ANYONE ELSE WHO HAS BEEN INVOLVED IN THE CREATION, PRODUCTION, LICENSING, SUBLICENSING, SUPPLY OR DELIVERY OF THE DELIVERABLES OR INCORPORATED TECHNOLOGY WILL CREATE A REPRESENTATION, CONDITION, OR WARRANTY AND NEITHER PARTY MAY NOT RELY ON SUCH INFORMATION OR ADVICE. + + + + + + ARTICLE VII + + INTELLECTUAL PROPERTY RIGHTS + + 7.1 The Incorporated Technology Works shall be the sole property of On2, and all right, title and interest therein shall vest solely in On2 and shall be deemed to be a work made for hire. To the extent that title to any of the Incorporated Technology Works may not, by operation of law, vest in On2 or such works may not be considered works made for hire, Wildform hereby irrevocably assigns to On2 all rights, title and interest in and to such works. All Incorporated Technology Works shall belong exclusively to On2, which shall have the right to obtain and to hold in its own name, copyrights, registrations, patents, or such other protection as may be appropriate to the subject matter, and any extensions and renewals thereof. Wildform agrees to give On2 and any person designated by On2 such reasonable assistance, at On2's expense, as is On2 reasonably deems appropriate to perfect, secure, and protect On2's intellectual property and other rights set forth in this paragraph. Notwithstanding the foregoing, Wildform shall retain its existing right, title and interest in and to the Licensed Assets, subject to On2's rights to use such intellectual property pursuant to the Asset Purchase Agreement. + + 7.2 On2 Intellectual Property. Wildform acknowledges that On2 retains all right, title, and interest in and to the Incorporated Technology and the Incorporated Technologies Works, and in all copies&sbsp;thereof, and no title to the Incorporated Technology or other rights therein are transferred to Wildform by virtue of this Agreement other than as explicitly stated herein or reasonably necessary to accomplish the purposes hereof. 7.3 Wildform Intellectual Property. Except for Purchased Assets (as defined in the Asset Purchase Agreement) and Incorporated Technology Works and subject to On2's license rights to the Licensed Assets, Wildform shall retain all right, title and interest in and to the Deliverables, excluding the Incorporated Technology. + + 7.4 Restrictions. Wildform agrees not to cause or permit the porting, reverse engineering, reverse assembly or reverse compilation of any object code software provided to Wildform by On2 pursuant to this Agreement. + + ARTICLE VIII + + INDEMNIFICATION + + 8.1 On2's Indemnification of Wildform. On2 agrees to defend, indemnify and hold harmless Wildform, its officers, directors, employees, agents and customers from and against any claim, action, damage or costs (including reasonable attorneys fees) based on any breach by On2 of Sections 5, 6 or 7 of this Agreement provided that: (i) On2 is promptly notified in writing of such claim or action, (ii) Wildform grants On2 sole control of the defense and any related settlement negotiations, and (iii) Wildform reasonably cooperates with On2 in defense of such claim. + + 8.2 Wildform's Indemnification of On2. Wildform agrees to defend, indemnify and hold harmless On2 from and against any claim, action, damage or costs (including reasonable attorneys fees) (other than an action or claim which is subject to On2's indemnification of Wildform pursuant to Section 8.1 above) based on any breach by Wildform of Sections 5, 6 or 7 of this Agreement, provided that: (i) Wildform is promptly notified in writing of such claim or action, (ii) On2 grants Wildform sole control of the defense and any related settlement negotiations, and (iii) On2 reasonably cooperates with Wildform in defense of such claim. + + ARTICLE IX + + TERM AND TERMINATION + + 9.1 Term. Except as otherwise set forth in Sections 9.2 and 9.3 or Exhibit A hereof, the term of this Agreement shall be eighteen (18) months ("Term"). + + 9.2 Termination. Either of Wildform or On2 may terminate this Agreement if the other Party is in material breach of this Agreement and fails to cure such breach within thirty (30) days after written notice. Either of On2 or Wildform may terminate this Agreement if the other Party becomes bankrupt or a receiver is appointed for a substantial part of its assets or business, or any order is made approving a petition or answer seeking reorganization under any applicable bankruptcy law. + + 9.3 Events Upon Termination. Upon the termination of this Agreement by either Party on account of an uncured material breach by the other Party, without prejudice to any other rights that either Party may have, the following will occur: + +(a) Wildform will immediately cease all use and distribution of the Incorporated Technology. + +(b) Wildform will immediately return to On2, or destroy, all copies of the Incorporated Technology, and all documentation created under this agreement in its possession or control. Upon written request from On2, Wildform will promptly provide On2 with a written certification of Wildform's compliance with the foregoing. + + 9.4 Sections which Survive Termination or Expiration of this Agreement. Articles 1, 4 (with respect to outstanding payments), 5, 6, 7, 8, 9 and 10 of this Agreement, any other provisions of this Agreement incorporated into or applicable to such Sections, and any other provisions of this Agreement that by their terms extend beyond any termination of this Agreement, shall survive any + + + + + +termination or expiration hereof for any reason. + + ARTICLE X + + OTHER PROVISIONS + + 10.1 Status of Parties. Nothing contained in this Agreement nor performance hereunder shall render either Party, its employees or contractors to be an agent, employee, joint venturer or partner of the other Party. Neither Party, nor any of its officers or employees shall have authority to contract for or bind the other Party in any manner, and each Party agrees that it shall not represent itself as an agent of the other Party or as otherwise authorized to act for or on behalf of the other Party. + + 10.2 Force Majeure. Any failure by either Party to perform, to the extent and only for so long as such Party is prevented from performing for one or more of the reasons described herein, any obligation hereunder arising under or in connection with this Agreement shall be excused (to such extent and for such period) if such failure shall have been caused by any act or circumstance beyond the reasonable control of such Party, including, but without limiting the + +generality of the foregoing, any Act of God, fire, flood, explosion, lightning, windstorm, earthquake, general shortage of materials, general discontinuation of power supply, court order or governmental interference, civil commotion, riot, war, strike, labor disturbances, transportation difficulties or labor shortages. + + 10.3 Notice. All notice and other communications required or permitted to be given under this Agreement must be in writing and will be effective when delivered personally, via overnight courier, or sent by facsimile later confirmed by overnight courier, or sent by registered mail, postage prepaid and addressed to the parties at their respective addresses set forth in the first paragraph of this Agreement, or at any new address or addresses subsequently designated in writing by either party to the other. + + 10.5 Severability of Agreement Provisions. It is the desire and intent of the parties that the provisions contained in this Agreement shall be enforceable to the fullest extent permitted by law. The invalidity and/or unenforceability in whole or in part of any provision of this Agreement shall not render invalid or unenforceable any other provision of this Agreement, which instead will remain in full force and effect. + + 10.6 Entire Agreement. This Agreement constitutes the entire understanding between the parties regarding to specific subject matter covered herein. This Agreement supersedes any and all prior written or verbal contracts or understandings between the parties hereto and neither party shall be bound by any statements or representations made by either party not embodied in this Agreement. No provisions herein contained shall be waived, modified or altered, except by an instrument in writing, duly executed by the parties hereto. + + 10.7 Governing Law; Forum. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule whether such provision or rule is that of the State of New York or any other jurisdiction. + + 10.8 Dispute Resolution. Disputes arising in connection with this Agreement shall be resolved as follows: + + (a) General Intent. The parties intend that all problems and disputes relating to this Agreement or arising from the transactions contemplated hereby ("Disputes") shall be resolved through the procedures of this Section 10.8; provided, however, that neither party shall be under any obligation to proceed in accordance with this Section 10.8 with respect to Disputes concerning any alleged breach of Article V of this Agreement, as to which a party may take any legal action in a court of law or equity (without the necessity of posting any bond) to assert or enforce a claim that it has against the other party under this Agreement. The procedures in this Section 10.8 shall not replace or supersede any other remedy to which a party is entitled under this Agreement or under applicable law. + + (b) Informal Resolution Efforts. The parties shall initially attempt to resolve Disputes through informal negotiations conducted by the Primary Coordinator of Wildform and Primary Coordinator of On2. + + (c) Mediation. If a Dispute cannot be resolved under Subsection 10.8(b) above, the Dispute shall be submitted to mediation by written notice of the party seeking mediation to the other party. In the mediation process, the parties shall attempt in good faith to resolve their differences voluntarily with the aid of an impartial mediator, who will attempt to facilitate negotiations. The mediator shall be selected by agreement of the parties. If the parties cannot agree on a mediator, the American Arbitration Association or JAMS shall designate a mediator at the request of either party. Any mediator so designated must be acceptable to both parties. The mediation shall be confidential, and the mediator may not testify for either party in any later proceeding relating to the Dispute. Each party shall bear its own costs in the mediation. The fees and expenses of the mediator shall be shared equally by the parties. + + (d) Court Actions. If the parties cannot resolve a Dispute through mediation pursuant to Subsection 10.8(c) above, either party may seek further redress by taking legal action in a court of law or equity to assert or enforce a claim that it has against the other party under this Agreement. The parties agree that any legal action, suit or proceeding arising out of or relating to + + + + + +this Agreement or the transactions contemplated hereby shall be instituted by a party in a Federal or state court sitting in the jurisdiction and venue of the other party, which shall be the exclusive jurisdiction and venue of said legal proceedings and each party hereto waives any objection which such party may now or hereafter have to the laying of venue of any such action, suit or proceeding, and irrevocably submits to the jurisdiction of any such court in any such action, suit or proceeding. Any and all service of process and any other notice in any such action, suit or proceeding shall be effective against such party (or the subsidiary of such party) when transmitted in accordance with Section 10.8. Nothing contained herein shall be deemed to affect the right of any party hereto to serve process in any manner permitted by law. + + 10.9 No Implied Waivers. No delay or omission by either party to exercise its rights and remedies in connection with the breach or default of the other shall operate as or be construed as a waiver of such rights or remedies as to any subsequent breach. + + 10.10 Counterparts. This Agreement may be executed in any number of counterparts, but all counterparts hereof shall together constitute but one agreement. + + 10.11 Assignment. Neither party will have the right to assign, pledge or transfer all or any part of this Agreement without the prior written consent of the other, and any such purported assignment, pledge or transfer by a party without such prior written consent shall be void ab initio; provided, however, that either party may assign all or part of its rights and obligations under this Agreement in connection with a Change of Control (as defined in the Asset Purchase Agreement). In the event of an assignment pursuant to the proviso contained in the preceding sentence, the surviving entity shall be bound to this Agreement in place of such assigning party and this Agreement shall inure to the benefit of such surviving entity. + + 10.12 Capacity. Each party represents one to the other that it is under no incapacity to enter into or perform this Agreement and that each person signing this Agreement on its behalf has the authority to do so, and each shall never otherwise assert. + + 10.13 Captions, Gender and Number. The captions appearing in this Agreement are inserted only as a matter of convenience and for reference and in no way define, limit or describe the scope and intent of this Agreement or any of the provisions hereof. + + 10.14 UN Convention Does Not Apply. The United Nations Convention on Contracts for the Sale of Goods shall not apply to this Agreement and any products and/or services provided pursuant thereto. + + IN WITNESS WHEREOF, the parties hereto have caused this Transition Services Agreement to be executed the Effective Date. + +On2 Technologies, Inc Wildform, Inc. + +By: By: --------------------------------- ----------------------------- Name: Name: Title: Title: + + Exhibit A + + Transition Services + +1. Program Errors. On2 shall promptly report to Wildform any Program Errors accompanied by documentary evidence in a mutually agreeable form that permits the defect or error to be reproduced. During the first twelve (12) months of the Term, Wildform shall use commercially reasonable efforts to correct Program Errors within the response times set forth below. For purposes of the response times set forth below a "Serious" Program Error shall be defined as a Program Error that (a) causes the Deliverables to crash (malfunction), or (b) substantially degrades the performance, usability or appearance of the Deliverables. A "Minor" Program Error shall be defined as a bug that causes a less than substantial degradation in the performance, usability or appearance of the Deliverables. + +Program Error Response Correction ------------- -------- ---------- + +Serious Within 1 business day Within 8 business days + +Minor Within 4 business days Within 15 business days + +Failure by Wildform to provide a correction for a Program Error within the specified period shall not be deemed a breach of this Agreement provided that Wildform has used commercially reasonable efforts to correct such Program Error. + +Wildform shall not be required to provide corrections for defects in or conflicts with products developed by other companies, including On2, Macromedia and Microsoft provided that such defect or conflict cannot reasonably be corrected except through modification of the product of such other companies. If a Deliverable, including the Macromedia Flash Player that is shipped with the Deliverable, does not exhibit the Program Error, then no Program Error shall be deemed to exist. + +2. Deliverable Support During the first twelve (12) months of the Term, Wildform + + + + + +will provide On2 with reasonable technical support for the Deliverables via phone and email during Wildform's normal business hours with respect to the following: + + o Train On2 personnel in the way the code works. + + o Train On2 personnel in how the software is designed, maintained and compiled. + + o Provide ongoing support during the 12-month term for On2's further development and integration. + +The foregoing obligations of Wildform shall be limited to a maximum of forty (40) hours, or up to a maximum of two hundred twenty (220) emails, whichever accumulates first. + +3. Customer Technical Support email During the first twelve (12) months of the Term, Wildform will provide On2 via email during Wildform's normal business hours reasonable technical support for customer technical support questions received by On2 as follows: + + o During the first thirty (30) days of the Term, Wildform will continue to respond to customer technical support email questions via email. The foregoing support will be provided as follows: (i) customer shall be directed to send technical support emails will be sent to On2; (ii) On2 shall forward such emails to Wildform; (iii) Wildform shall respond to On2 within 24 hours, except for holidays and weekends; and (iv) On2 will, in turn, respond to the customer. + + o For the remaining eleven (11) months of the Term, On2 may send customer technical support inquiries via email to Wildform and Wildform shall respond within 48 hours, except for holidays and weekends. + + o During the first twelve (12) months of the Term, Wildform agrees to forward to On2 Flix related customer technical support emails received by Wildform from customers who have purchased the software from On2 after the Closing. Failure by Wildform to forward these emails shall not be deemed to be a breach of this Agreement. + +The foregoing obligations of Wildform, following the initial thirty (30) day period, shall be limited to a maximum of thirty (30) hours, or up to a maximum of two hundred (200) emails, whichever accumulates first. + +4. Customer Pre-Purchase Inquiries During the first twelve (12) months of the Term, Wildform will provide On2 via email during Wildform's normal business hours reasonable technical support for customer pre-purchase inquiries received by On2, including the following: + + o During the first thirty (30) days of the Term, Wildform will respond to customer pre-purchase email inquiries. The foregoing support will be provided as follows: (i) customer shall be directed to send technical support emails will be sent to On2; (ii) On2 shall forward such emails to Wildform; (iii) Wildform shall respond to On2 within 24 hours, except for holidays and weekends; and (iv) On2 will, in turn, respond to the customer. + + o For the remaining eleven (11) months of the Term, On2 may send customer pre-purchase inquiries via email to Wildform and Wildform shall respond within 48 hours, except for holidays and weekends. + +The foregoing obligations of Wildform, following the initial 30 day period, shall be limited to a maximum of twenty (20) hours, or up to a maximum of one hundred twenty five (125) emails, whichever accumulates first. + +5. PR & Marketing During the first twelve (12) months of the Term (except as expressly noted below), Wildform will provide On2, via phone and email during Wildform's normal business hours, reasonable marketing support for the following: + + i) Guide the execution of the On2 Flash 8 Flix product launch: + + a. Provide On2 with the press list for approximately 300 leading tech publications and press, as well as Flash and video evangelists and web sites to publish news of launch and/or do product reviews. On2 shall contact these people directly. + + b. Assist On2 with doing follow up contact with press to ensure maximum press coverage, and issue review copies of software with Wildform's assistance. + + c. Write first draft press releases for product releases. (All subsequent drafts shall be written by On2, with Wildform providing input as requested on subsequent drafts.) + + d. Create digital banners, buttons and product screenshots (based on existing Flix artwork) announcing On2's next version of Flix for distribution to sites, and press that request them. Such digital banners shall be based on the existing artwork used by Wildform in the marketing of the Flix product line. Wildform shall not be responsible for creating any new logos, or other artwork requested by On2 which Wildform does not + + + + + + already possess. Any additional expenses for additional logos or artwork shall be borne by On2. + + ii) Wildform will provide the following marketing and promotion of the new Flix products: + + a. Within 10 business days of closing publish one (1) issue of the Wildform newsletter featuring the news of On2's purchase of Wildform's Flix assets and instructions to Wildform customers on how and where to buy the new On2 Flix products. On2 shall provide the text for these mailings up to 150 words, subject to Wildform's approval, not to be unreasonably withheld. + + b. Announce in one (1) issue of the Wildform newsletter the launch of On2's next version of Flix with introductory upgrade offer to Wildform customers per approval of On2's marketing department. This issue will come out after the release of Flix 5 with Flash 8 codec. On2 shall provide the text for these mailings up to 150 words, subject to Wildform's approval, not to be unreasonably withheld. + + c. On2 Flix advertisement in 2 consecutive issues of Wildform's newsletter. On2 shall provide the text for these mailings up to 150 words, subject to Wildform's approval, not to be unreasonably withheld. + + d. In addition to a.-c. above, two (2) dedicated On2 branded mailings during the 12 months following closing to Wildform Flix customers who have opted to receive email from Wildform. On2 shall provide the text for these mailings up to 150 words, subject to Wildform's approval, not to be unreasonably withheld. + + e. In the event that Flash 8 is released later than 11 months following closing and the release of the On2 version of Flix is delayed as a result of this, Wildform will do the dedicated mailings and newsletter promotions after the 12 month period for no additional fee, provided that Wildform will have no obligation to do any mailings or promotions later than 18 months following closing. + + f. Wildform represents that as of April 1, 2005, its newsletter list consists of approximately seventy thousand (70,000)&bbsp;email addresses. + + ii) Wildform will perform the following marketing services for On2: + + a. Search Engine Optimization -Assist On2 personnel in optimizing the newly updated Flix product pages based on current keywords. - Assist On2 personnel with initial submission of new product pages to search engines. + + b. Google AdWords sponsored links program + + o Delivery of sponsored links advertising data history for Flix, including keywords, and knowledge of how to best manage the paid links as well as providing the current most effective keywords for selling Flix via Google AdWords. + + c. Bring On2 Marketing people up to speed on Internet marketing for Flix: + + - How to best to attract traffic to the Flix web site. + + - Strategies for up-selling to current Flix customers. + + - How to optimize site for search engines + + - How to manage sponsored links + + - Strategies for online advertising and marketing + + - How to market to Flix customers via a newsletter. + + - How to run a newsletter. + +It shall be On2's responsibility and On2 shall ensure that On2 has personnel capable of understanding and executing software marketing. + +The foregoing obligations of Wildform shall be limited to a maximum of forty five (45) hours, or up to a maximum of three hundred (300) emails, whichever accumulates first. + +6. Wildform will establish and maintain the following presence on www.wildform.com site (18-month Time Period): + +a) During first 30 days following closing: + +* Conversion of www.wildform.com/flix, the Flix main page, to explain On2's purchase of Flix, with links to On2's site (e.g. On2's main Flix information page, and shopping cart) as well as explanation to current Wildform Flix on how to download their license and get continued support. + + + + + +* Link to www.wildform.com/flix in the well of Wildform's front page no smaller than 150x75 pixels + +* Link to www.wildform.com/flix in the product drop down menu of main navigation bar. + +* Link to www.wildform.com/flix in the main product navigation menu + +* Link to www.wildform.com/flix on www.wildform.com/products + +* Link to www.wildform.com/flix on www.wildform.com/demos + + b) For first 90 days after closing: + +* Link to www.wildform.com/flix in the product drop down menu of main navigation bar. Should Wildform cease to use drop-down menus this may be removed without penalty provided that a link to the Flix product will be included in the Wildform product navigation that replaces the old version. + +* Link to www.wildform.com/flix in the main product navigation menu. Should Wildform cease to use main product navigation menus this may be removed without penalty provided that a link to the Flix product page will be included in the Wildform product navigation that replaces the old version. . + +* Continued presence of www.wildform.com/flix, the Flix main page, to explain&bbsp;On2's purchase of Flix, with links to On2's site (e.g. On2's main Flix information page, and shopping cart). + + c) Months 4-12 after closing: + +* Link to www.wildform.com/flix in the product drop down menu of main navigation bar. Should Wildform cease to use drop-down menus Wildform may substitute a link to www.wildform.com/flix in the main product navigation menu. Should Wildform cease to use main product navigation menus this may be removed without penalty provided that a link to the Flix product page will be included in the Wildform product navigation that replaces the old version. + +* Continued presence of www.wildform.com/flix, the Flix main page, to explain On2's purchase of Flix, with links to On2's site (e.g. On2's main Flix information page, and shopping cart). + + d) Months 13-18: + +* Continued presence of www.wildform.com/flix, the Flix main page, to explain On2's purchase of Flix, with links to On2's site (e.g. On2's main Flix information page, and shopping cart). + +7. Website front end + + a. Wildform will deliver the following: + + -All relevant Flix product web pages (approximately 25) and content, including product pages, sample videos and faq's (based on existing artwork). + + -All Flix digital graphics including existing Flix sample videos, logos, banners, buttons, screenshots and other Flix-related artwork (based on existing artwork). + + -All Wildform Flix tutorials (approximately 35) for On2's non-exclusive use. Should any tutorial author request that On2 remove the tutorial from On2's website, On2 shall comply with such request. + + -All of the following additional resource sections of Wildform's site: "Wildform in advertising", Wildform in CDRoms", and "Wildform in Email" for On2's nonexclusive use. + + b. Wildform will provide On2, via phone and email during Wildform's normal business hours, reasonable support for the website front end deliverables. + +It shall be On2's responsibility and On2 shall ensure that On2 has personnel capable of understanding, supporting and maintaining websites and all website materials provided by Wildform. + +8. Website Back End + + a. Wildform will deliver the following pursuant to the Asset Purchase Agreement, which shall govern On2's use of the following: + + - shopping cart system and pages. + + - affiliate system, which includes ability to add affiliates, and track affiliate sales. + + - promotion code system that lets you create and track promotions. + + - administrative system that handles: + + + + + + o software license generation + + o automated customer emails + + - ecommerce transactions + + - banned email address check + + - credit card hash check + + - Whois queries. + + - Ability to generate free licenses of Flix + + - Ability to search through all issued licenses + + - Serial code generator + + - Ability to issue invoices + + - Ability to automatically email customers once they install a demo of Flix + + - E-commerce fraud detection tips + + - Email list of over 22,000 email addresses from free email providers and bad customers + +Wildform shall deliver the website front end and website back end electronically. Ensuring that the website works with On2's own merchant account and databases shall be On2's responsibility and On2 shall ensure that On2 has personnel capable of handling this transition. + +During the first twelve (12) months of the Term, Wildform will provide On2, via phone and email during Wildform's normal business hours, reasonable support for the website front end deliverables. The foregoing obligations of Wildform, shall be limited to a maximum of forty (40) hours, or up to a maximum of two hundred twenty (220) emails, whichever accumulates first. + +Wildform shall deliver the deliverables listed in paragraphs 7 and 8 of this exhibit and shall provide reasonable support for On2's use of these deliverables. However, it is On2's responsibility to ensure that On2 has personnel capable of handling this transition with all requisite skillsets including C++ programming, Linux, PHP, MYSQL, HTML etc. It is not Wildform's responsibility to instruct On2 staff in the basic functioning of computer systems and languages, nor is it Wildform's responsibility to maintain the deliverables once they have been delivered, except as specifically set forth herein. + +In the event that Flash 8 is released later than 11 months following closing and the release of the On2 version of Flix is delayed as a result of this On2 can elect to have Wildform perform whatever PR and marketing services cannot be performed until immediately prior to the launch of the On2 version of Flix (other than the above referenced marketing emails and reduced website presence that Wildform will provide at no additional cost) for a one-time cash payment of $100,000, provided, however that Wildform shall have no obligation to perform any services beyond the 18 month anniversary of the closing. + + Exhibit B + + Deliverables + +A. Deliverable #1 (source code for each to be delivered electronically after the Closing Date, subject to payment of the Closing Payment.): + +o Flix Pro 4 for Windows: + +o Flix Pro 4 for Windows Demo: + +o Flix Pro 3 for Mac: + +o Flix Pro 3 for Mac Demo: + +o Flix Engine 3.5 for Windows: + +o Flix Engine 3.5 for Windows Demo: + +o Flix Exporter 4 for Windows (including Flix FLV player): + +o Flix Exporter 4 for Windows Demo (including Flix FLV player): + +o Flix Exporter 4 for Mac (including Flix FLV player): + +o Flix Exporter 4 for Mac Demo (including Flix FLV player): + +o Flix Lite 3 for Windows: + +o Flix Lite 3 for Windows Demo: + +o Flix Lite 3 for Mac: + + + + + +o Flix Lite 3 for Mac Demo: + +o Flix Pro Power Players + +B. Deliverable #2 (source code for each to be delivered according to the following schedule (the start date shall be after On2 has delivered to Wildform the new Flash 8 video codec with the required Flash 8 player and player specification (the "Flash 8 Materials"). The Deliverables shall be provided to On2 in electronic form and in the order shown below. + + o Flix Pro Power Players Change branding from Wildform to On2. Delivery within 10 days. + + o Flix Pro 5 for Windows Which shall be comprised of Flix Pro 4 for Windows with the On2 branding and addition of the new On2 Flash 8 codec. Update help file. Change branding from Wildform to On2. Delivery within 30 days. + + o Flix Pro 5 for Windows Demo Which shall be comprised of Flix Pro 4 for Windows Demo with the On2 branding and addition of the new On2 Flash 8 codec. Update help file. Change branding from Wildform to On2. Delivery within 30 days. + + o Flix Engine 5 for Windows Which shall be comprised of Flix Engine 3.5 for Windows with the On2 branding and addition of the new On2 Flash 8 codec. Update help file. Change branding from Wildform to On2. Delivery within 60 days. + + o Flix Engine 5 for Windows Demo Which shall be comprised of Flix Engine 3.5 for Windows Demo with the On2 branding and addition of the new On2 Flash 8 codec. Update help file. Change branding from Wildform to On2. Delivery within 60 days. + + o Flix Pro 5 for Mac Which shall be comprised of Flix Pro 3 for Mac with the On2 branding and addition of the new On2 Flash 8 codec. Update help file. Change branding from Wildform to On2. Delivery within 90 days. + + o Flix Pro 5 for Mac Demo Which shall be comprised of Flix Pro 3 for Mac Demo with the On2 branding and addition of the new On2 Flash 8 codec. Update help file. Change branding from Wildform to On2. Delivery within 90 days. + + o Flix Exporter 5 for Windows (including Flix FLV player) Which shall be comprised of Flix Exporter 4 for Windows with the On2 branding and addition of the new On2 Flash 8 codec. Update help file. Change branding from Wildform to On2. Delivery within 90 days. + + o Flix Exporter 5 for Windows Demo (including Flix FLV player) Which shall be comprised of Flix Exporter 4 for Windows Demo with the On2 branding and addition of the new On2 Flash 8 codec. Update help file. Change branding from Wildform to On2. Delivery within 90 days. + + o Flix Exporter 5 for Mac (including Flix FLV player) Which shall be comprised of Flix Exporter 4 for Mac with the On2 branding and addition of the new On2 Flash 8 codec. Update help file. Change branding from Wildform to On2. Delivery within 120 days. + + o Flix Exporter 5 for Mac Demo (including Flix FLV player) Which shall be comprised of Flix Exporter 4 for Mac Demo with the On2 branding and addition of the new On2 Flash 8 codec. Update help file. Change branding from Wildform to On2. Delivery within 120 days. + + o Flix Lite 5 for Windows Which shall be comprised of Flix Lite 3 for Windows with the On2 branding and addition of the new On2 Flash 8 codec. Update help file. Change branding from Wildform to On2. Delivery within 120 days. + + o Flix Lite 5 for Windows Demo Which shall be comprised of Flix Lite 3 for Windows Demo with the On2 + + + + + + branding and addition of the new On2 Flash 8 codec. Update help file. Change branding from Wildform to On2. Delivery within 120 days. + + o Flix Lite 5 for Mac Which shall be comprised of Flix Lite 3 for Mac with the addition of the new On2 Flash 8 codec. Update help file. Change branding from Wildform to On2. Delivery within 150 days. + + o Flix Lite 5 for Mac Demo Which shall be comprised of Flix Lite 3 for Mac Demo with the On2 branding and addition of the new On2 Flash 8 codec. Update help file. Change branding from Wildform to On2. . Delivery within 150 days. + +Aside from the addition of the On2 Flash 8 codec, no other features shall be added to the above listed Deliverables. + +Delayed delivery by Wildform of the above listed Deliverables shall not be considered a violation of this Agreement, provided that Wildform has worked in good faith to provide the Deliverables in a timely fashion, provided however, + +that failure to deliver (a) the Flix Pro Windows Deliverables prior to the 91-day anniversary of delivery of the Flash 8 Materials to Wildform or (ii) all of the Deliverables prior to the 270-day anniversary of the delivery of the Flash 8 Materials to Wildform, shall be considered a violation of this Agreement.. + +It shall be On2's responsibility and On2 shall ensure that On2 has personnel capable of understanding, supporting and maintaining the software source code provided by Wildform pursuant to Deliverables #1 and #2. \ No newline at end of file diff --git a/full_contract_txt/ON4COMMUNICATIONSINC_07_02_2009-EX-10.1-PROMOTION AGREEMENT.txt b/full_contract_txt/ON4COMMUNICATIONSINC_07_02_2009-EX-10.1-PROMOTION AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..92c706b0c606d955b520cb328173391e07635292 --- /dev/null +++ b/full_contract_txt/ON4COMMUNICATIONSINC_07_02_2009-EX-10.1-PROMOTION AGREEMENT.txt @@ -0,0 +1,163 @@ +925 West Georgia Street Suite 1820 Vancouver, British Columbia Canada V6C 3L2 Facsimile: 604-632-1730 PROMOTION AGREEMENT (the "Agreement") This agreement (the "Agreement") is made between Charity Tunes Inc., a British Columbia corporation with registered office located at Suite 1800, 925 West Georgia Street, Vancouver, British Columbia, Canada V6C 3L2 ("Charity Tunes") and ConAgra Foods Canada Inc. ("Sponsor") a Canada corporation, 5935 Airport Rd, Suite 405, Mississauga, Ontario, Canada L4V 1W5. WHEREAS as a new initiative, Charity Tunes and Sponsor will enter into a promotional partnership, whereby Sponsor will offer Charity Tunes music downloads on Sponsor's Pogo products consistent with the terms and conditions of this Agreement (the "Promotion"). NOW THEREFORE in consideration of the mutual covenants made herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by each Charity Tunes and Sponsor, the parties agree as follows + +A consumer who purchases a specially Designated Sponsor Product (as defined below) will receive exactly one (1) unique pin code (a "Pin Code") in-pack. Such a consumer wil l be entitled to visit a custom interactive landing page at the CharityTunes.com website to enter the unique code and consumer's valid email address to receive downloads up to a maximum of either three (3), five (5), or seven (7) free MP3 song downloads having a retail value of $1.29 per song or less. Charity Tunes shall make its music catalogue available to the purchasers in MP3 file format to the fullest extent that such format is available to Charity Tunes pursuant to any agreements in effect between Charity Tunes and its wholesalers on the date of this Agreement. Accordingly, Charity Tunes shall use its best efforts to update its music catalogue with available MP3 files by June 30, 2009. The custom interactive landing page shall be designed, operated and maintained at the expense of Sponsor, and shall be subject to the mutual approval by Charity Tunes and Sponsor, which approval shall not be unreasonably withheld. The landing page shall feature the Charity Tunes logo in a size and prominence substantially equal to that of Sponsor. + +POGO 8 pack, POGO 10 pack, POGO 20 pack and POGO 30 pack products sold at participating retail locations in Canada (individually and collectively the "Designated Sponsor Products") are the only products for which a Pin Code will be distributed and each consumer who purchases a Designated Sponsor Product will receive one and only one Pin Code while supplies last and subject to the limitations detailed herein. A Pin Code for three (3) songs shall be distributed exclusively with POGO 8 or 10 packs. A Pin Code for five (5) songs shall be distributed exclusively with POGO 20 packs. A Pin Code for seven (7) songs shall be distributed exclusively with POGO 30 packs. Designated Sponsor Products sold by Sponsor with the Promotion offer may not be sold at a higher list price than the same (or substantially similar) product(s) that do not contain the Promotion offer. Pin Codes themselves may not be retailed in any way. + +1.PROMOTION OFFER: + +2.DESIGNATED SPONSOR PRODUCTS: + +1 + + + + + + + +Pin codes will only be distributed in the Designated Sponsor Products during the Promotion Period (defined below). The total number of Pin Codes to be distributed as prizes in the Promotion shall not exceed: (i) 277,760 Pin Codes containing three (3) music downloads per Pin Code ; (ii) 130,300 Pin Codes containing five (5) music downloads per Pin Code; and (iii) 27,900 Pin Codes containing seven (7) music downloads per Pin Code. No Designated Sponsor Product shall contain more than 1 Pin Code per pack. The distribution limits stated above are the maximum number of Pin Codes that may be distributed in the Promotion. No 3- song, 5-song, or 7-song Pin Codes may be subdivided, duplicated or distributed in combination with one another. Charity Tunes agrees to generate the unique Pin Codes for the Promotion. The parties therefore understand and acknowledge the critical need to maintain in absolute secrecy the Pin Codes generated for the Promotion such that they are only disclosed to the appropriate recipient via the authorized distribution method described herein. If the Pin Codes are made available to the public by Sponsor or by any of its employees, officers, directors, consultants, agents, representatives or advisors, except in the manner provided for herein, all parties agree that Pin Code security will be deemed compromised, and Charity Tunes may terminate all subsequent Pin Code redemptions. Sponsor agrees that it will not increase the list price to its customers of Designated Sponsor Products that form part of this promotion as compared to its otherwise identical products that do not form part of the promotion. + +The offer shall be communicated to potential consumers only via in-store on-pack advertising, and retailer flyer advertising. Any communication of offer, including but not limited to Sponsor's rules for the Promotion, must indicate that the offer is only available while supplies last. + +A consumer who receives a Pin Code for a designated number of music downloads in accordance with paragraph 3 above will be directed to visit the custom interactive landing page in order to redeem his/her free music downloads. Consumer will have to enter the Pin Code in order to complete the transaction. Consumer will be required to enter the Pin Code exactly as it appears in the email and follow the instructions on the web site to download the selected music download. In no case may any Pin Code be redeemed later than March 31, 2010. To assist as required with the redemption process, consumers shall have access to Charity Tunes customer support by emailing at support@charitytunes.com. + +Sponsor shall received 435,960 unique Pin Codes for this Promotion and Sponsor is responsible for maintaining a record of all Pin Codes distributed or withheld, such record being subject to the confidentiality terms set forth above. + +Designated Sponsor Products with Pin Codes may be distributed from approximately October 1, 2009 to approximately December 31, 2009 (the "Promotion Period"). Eligible Pin Codes may be entered on the www.charitytunes.com website and corresponding music downloaded from October 1, 2009 to March 31, 2010. Pin Codes entered for redemption after 11:59:59 pm PT on March 31, 2010 may be rejected as ineligible. The contents of this section are to be reflected in the Sponsor's rules for the Promotion. + +The Charity Tunes system used for redemption of downloads will ensure that (i) downloads are obtained under the Promotion only by way of redemption of eligible Pin Codes and only up to the maximum number of music downloads per Pin Code set out at paragraph 3 above, (ii) otherwise eligible Pin Codes are invalidated once they have been used to download their respective per Pin Code maximum, and (iii) the total maximum download limits described herein are observed. + +3.DISTRIBUTION: + +4.COMMUNICATION OF OFFER: + +5.PROMOTION MECHANIC: + +6.GENERATION / PRINTING OF CODES: + +7.PROMOTION PERIOD: + +8.SECURITY & VERIFICATION: + +2 + + + + + + + +The Pin Codes that will be distributed to consumers of the Designated Sponsor Products under the Promotion will be set with parental controls and will not allow any user download content that has been designated by Charity Tunes music providers as containing explicit content. + +Upon execution of this Agreement by both parties, Charity Tunes will invoice Sponsor for 435,960 unique codes consisting of a maximum of 277,760 Pin Codes containing three (3) music downloads per Pin Code ; (ii) 130,300 Pin Codes containing five (5) music downloads per Pin Code; and (iii) 27,900 Pin Codes containing seven (7) music downloads per Pin Code, for a total cost of $117,605.60 CDN (plus applicable taxes) (collectively the "Fee"), which Fee is calculated at the rate of $0.07 CND (plus applicable taxes) per potential download. The Fee shall be payable to Charity Tunes in two equal installments of $58,802.80 (plus applicable taxes) due to Charity Tunes on October 1, 2009 and November 1, 2009, respectively payable upon receipt of invoice. + + + + + + + + + +In consideration of the fees paid by Sponsor as set out herein, Charity Tunes agrees that during the period beginning October 1, 2009 and ending March 31, 2010, Charity Tunes shall not enable another program sponsorship for all competitive products/product categories distributed/sold within the total Canadian consumer/retail/wholesale market place, inclusive of: - Total Frozen Handhelds - Total Corporation General Mills Handhelds - Total Pizza Pops Handhelds / total Pillsbury Mini Pizzas - Total Corporation McCain Foods Handhelds - Total Pizza Pockets / total McCain Mini Pizzas - Total Corporation Heinz Handhelds - Total Heinz Hot bites (Bagel Bites and Taco Bites) / total Anchor Poppers - Total Corporation Schneider Foods Handhelds - Total Hot Stuffs / total Lean Stuffs - Total Resers Burritos - Total Corp les Plats du Chef Handhelds - Total Hinsdale Farms Corndogs + +9.EXPLICIT CONTENT: + +10.FEE: + +11.WARRANTY AND INDEMNITY: + +11.1Warranty. Charity Tunes warrants that, subject only to any limitation or condition specified in this Agreement, it will provide immediately to any consumer entitled to a music download in connection with a Pin Code the music download selected by that consumer. + +11.2Obligations upon any breach. If for any reason Charity Tunes fails to provide a music download to a consumer in accordance with clause 11.1, thereby breaching its warranty thereunder, it shall: (i) forthwith remedy that failure by providing the requested download to that consumer as soon as possible; (ii) forthwith provide notice to Sponsor of the failure to immediately provide the download, including the date, time and other details of the failure, and of the steps being taken forthwith to remedy the failure; and (iii) once the failure has been remedied by Charity Tunes, forthwith provide Sponsor with notice of same. + +11.3Indemnity. Furthermore, Charity Tunes will indemnify, save and hold harmless Sponsor, its shareholders, officers, agents and affiliated companies from and against any and all claims, investigations, lawsuits, losses, damages, costs, payments, charges, expenses and attorneys fees, including any amount paid to settle an action or to satisfy a judgment by or for the benefit of any person, that they, or any of them, may at any time incur as a result of any breach of this Agreement by Charity Tunes. + +12.EXCLUSIVITY: + +3 + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + +13.GENERAL: + +13.1Relationship between the Parties. Nothing in this Agreement shall be construed as creating any relationship (whether by way of employer/employee, agency, joint venture, association, or partnership). It is expressly understood that the relationship between the parties shall be that of independent contractors, whether for the purposes of the Income Tax Act (Canada), provincial taxation legislation or otherwise. + +13.2Time. Time is of the essence of this Agreement. + +13.3Presumption. This Agreement or any section thereof shall not be construed against any party due to the fact that said Agreement or any section thereof was drafted by said party. + +13.4Titles and Captions. All article, section and paragraph titles or captions contained in this Agreement are for convenience only and shall not be deemed part of the context nor affect the interpretation of this Agreement. + +13.5Further Action. The parties hereto shall execute and deliver all documents, provide all information and take or forbear from all such action as may be necessary or appropriate to achieve the purposes of this Agreement. + +13.6Good Faith, Cooperation and Due Diligence. The parties hereto covenant, warrant and represent to each other good faith, complete cooperation, due diligence and honesty in fact in the performance of all obligations of the parties pursuant to this Agreement. All promises and covenants are mutual and dependent. + +13.7Savings Clause. If any provision of this Agreement, or the application of such provision to any person or circumstance, shall be held invalid, the remainder of this Agreement, or the application of such provision to persons or circumstances other than those as to which it is held invalid, shall not be affected thereby. + +13.8Assignment. This Agreement may not be assigned by either party hereto without the written consent of the other but shall be binding upon the successors of the parties. + +13.9Notices. All notices required or permitted to be given under this Agreement shall be given in writing and shall be delivered, either personally or by express delivery service, to the party to be notified. Notice to each party shall be deemed to have been duly given upon delivery, personally or by courier, addressed to the attention of the officer at the address set forth heretofore, or to such other officer or addresses as either party may designate, upon at least ten days written notice, to the other party. + +13.10Entire agreement. This Agreement contains the entire understanding and agreement among the parties. There are no other agreements, conditions or representations, oral or written, express or implied, with regard thereto. This Agreement may be amended only in writing signed by all parties. + +13.11Waiver. A delay or failure by any party to exercise a right under this Agreement, or a partial or single exercise of that right, shall not constitute a waiver of that or any other right. + +4 + + + + + + + + + + + + + + IN WITNESS WHEREOF, the parties have duly executed and delivered this Agreement: + + 5 + +13.12Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same Agreement. In the event that the document is signed by one party and faxed to another the parties agree that a faxed signature shall be binding upon the parties to this Agreement as though the signature was an original. + +13.13Successors. The provisions of this Agreement shall be binding upon all parties, their successors and permitted assigns. + +13.14Counsel. The parties expressly acknowledge that each has been advised to seek separate counsel for advice in this matter and has been given a reasonable opportunity to do so. + +13.15Law and Jurisdiction. This Agreement shall be governed by the laws of the Province of Ontario and the federal laws of Canada applicable therein. The parties hereby attorn to the exclusive jurisdiction of the provincial and federal courts located in the city of Toronto, Ontario for all matters arising from this Agreement. + +Signed in agreement: /s/ Marko Bukovec Marko Bukovec Title: Marketing Director ConAgra Foods Canada Inc. Date:June 25, 2009 + +Signed in agreement: /s/ Robin Ram Robin Ram President Charity Tunes, Inc. Date: June 29, 2009 \ No newline at end of file diff --git a/full_contract_txt/ONEMAINHOLDINGS,INC_02_20_2020-EX-99.D-JOINT FILING AGREEMENT.txt b/full_contract_txt/ONEMAINHOLDINGS,INC_02_20_2020-EX-99.D-JOINT FILING AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..a910ac8c5636cc20863d9c0e96f012c018699c3b --- /dev/null +++ b/full_contract_txt/ONEMAINHOLDINGS,INC_02_20_2020-EX-99.D-JOINT FILING AGREEMENT.txt @@ -0,0 +1,157 @@ +Exhibit D + +JOINT FILING AGREEMENT OneMain Holdings, Inc. + +In accordance with Rule 13d-1(k) under the Securities Exchange Act of 1934, as amended, the undersigned hereby confirm the agreement by and among them to the joint filing on behalf of them of the Statement on Schedule 13D and any and all further amendments thereto, with respect to the securities of the above referenced issuer, and that this Agreement be included as an Exhibit to such filing. This Agreement may be executed in any number of counterparts each of which shall be deemed to be an original and all of which together shall be deemed to constitute one and the same Agreement. + +IN WITNESS WHEREOF, the undersigned hereby execute this Agreement as of February 20, 2020. UNIFORM INVESTCO LP + +By: Uniform InvestCo GP LLC, its General Partner By: Värde Partners, Inc., its Manager + +By: /s/ David A. Marple Name: David A. Marple Title: General Counsel + +UNIFORM INVESTCO GP LLC + +By: Värde Partners, Inc., its Manager + +By: /s/ David A. Marple Name: David A. Marple Title: General Counsel + +THE VÄRDE FUND VI-A, L.P. + +By: Värde Investment Partners G.P., LLC, its General Partner By: Värde Investment Partners UGP, LLC, its General Partner By: Värde Partners, L.P., its Managing Member By: Värde Partners, Inc., its General Partner + +By: /s/ David A. Marple Name: David A. Marple Title: General Counsel + + + + + +VÄRDE INVESTMENT PARTNERS, L.P. + +By: Värde Investment Partners G.P., LLC, its General Partner By: Värde Investment Partners UGP, LLC, its General Partner By: Värde Partners, L.P., its Managing Member By: Värde Partners, Inc., its General Partner + +By: /s/ David A. Marple Name: David A. Marple Title: General Counsel + +VÄRDE INVESTMENT PARTNERS (OFFSHORE) MASTER, L.P. + +By: Värde Investment Partners G.P., LLC, its General Partner By: Värde Investment Partners UGP, LLC, its General Partner By: Värde Partners, L.P., its Managing Member By: Värde Partners, Inc., its General Partner + +By: /s/ David A. Marple Name: David A. Marple Title: General Counsel + +VÄRDE INVESTMENT PARTNERS G.P., LLC + +By: Värde Investment Partners UGP, LLC, its General Partner By: Värde Partners, L.P., its Managing Member By: Värde Partners, Inc., its General Partner + +By: /s/ David A. Marple Name: David A. Marple Title: General Counsel + +VÄRDE INVESTMENT PARTNERS UGP, LLC + +By: Värde Partners, L.P., its Managing Member By: Värde Partners, Inc., its General Partner + +By: /s/ David A. Marple Name: David A. Marple Title: General Counsel + + + + + +THE VÄRDE SKYWAY MASTER FUND, L.P. + +By: The Värde Skyway Fund G.P., LLC, its General Partner By: The Värde Skyway Fund UGP, LLC, its General Partner By: Värde Partners, L.P., its Managing Member By: Värde Partners, Inc., its General Partner + +By: /s/ David A. Marple Name: David A. Marple Title: General Counsel + +THE VÄRDE SKYWAY FUND G.P., L.P. + +By: The Värde Skyway Fund UGP, LLC, its General Partner By: Värde Partners, L.P., its Managing Member By: Värde Partners, Inc., its General Partner + +By: /s/ David A. Marple Name: David A. Marple Title: General Counsel + +THE VÄRDE SKYWAY FUND UGP, LLC + +By: Värde Partners, L.P., its Managing Member By: Värde Partners, Inc., its General Partner + +By: /s/ David A. Marple Name: David A. Marple Title: General Counsel + +THE VÄRDE FUND XII (MASTER), L.P. + +By: The Värde Fund XII G.P., L.P., its General Partner By: The Värde Fund XII UGP, LLC, its General Partner By: Värde Partners, L.P., its Managing Member By: Värde Partners, Inc., its General Partner + +By: /s/ David A. Marple Name: David A. Marple Title: General Counsel + + + + + +THE VÄRDE FUND XII G.P., L.P. + +By: The Värde Fund XII UGP, LLC, its General Partner By: Värde Partners, L.P., its Managing Member By: Värde Partners, Inc., its General Partner + +By: /s/ David A. Marple Name: David A. Marple Title: General Counsel + +THE VÄRDE FUND XII UGP, LLC + +By: Värde Partners, L.P., its Managing Member By: Värde Partners, Inc., its General Partner + +By: /s/ David A. Marple Name: David A. Marple Title: General Counsel + +VÄRDE CREDIT PARTNERS MASTER, L.P. + +By: Värde Credit Partners G.P., LLC, its General Partner By: Värde Credit Partners UGP, LLC, its General Partner By: Värde Partners, L.P., its Managing Member By: Värde Partners, Inc., its General Partner + +By: /s/ David A. Marple Name: David A. Marple Title: General Counsel + + + + + +VÄRDE CREDIT PARTNERS G.P., LLC + +By: Värde Credit Partners UGP, LLC, its General Partner By: Värde Partners, L.P., its Managing Member By: Värde Partners, Inc., its General Partner + +By: /s/ David A. Marple Name: David A. Marple Title: General Counsel + +VÄRDE CREDIT PARTNERS UGP, LLC + +By: Värde Partners, L.P., its Managing Member By: Värde Partners, Inc., its General Partner + +By: /s/ David A. Marple Name: David A. Marple Title: General Counsel + +VÄRDE SFLT, L.P. + +By: The Värde Specialty Finance Fund G.P., L.P., its General Partner By: The Värde Specialty Finance Fund U.G.P., LLC, its General Partner By: Värde Partners, L.P., its Managing Member By: Värde Partners, Inc., its General Partner + +By: /s/ David A. Marple Name: David A. Marple Title: General Counsel + +THE VÄRDE SPECIALTY FINANCE FUND G.P., L.P. + +By: The Värde Specialty Finance Fund U.G.P., LLC, its General Partner By: Värde Partners, L.P., its Managing Member By: Värde Partners, Inc., its General Partner + +By: /s/ David A. Marple Name: David A. Marple Title: General Counsel + + + + + +THE VÄRDE SPECIALTY FINANCE FUND U.G.P., LLC + +By: Värde Partners, L.P., its Managing Member By: Värde Partners, Inc., its General Partner + +By: /s/ David A. Marple Name: David A. Marple Title: General Counsel + +VÄRDE PARTNERS, L.P. + +By: Värde Partners, Inc., its General Partner + +By: /s/ David A. Marple Name: David A. Marple Title: General Counsel + +VÄRDE PARTNERS, INC. + +By: /s/ David A. Marple Name: David A. Marple Title: General Counsel + +GEORGE G. HICKS + +By: /s/ George G. Hicks + +ILFRYN CARSTAIRS + +By: /s/ Ilfryn Carstairs \ No newline at end of file diff --git a/full_contract_txt/OPERALTD_04_30_2020-EX-4.14-SERVICE AGREEMENT.txt b/full_contract_txt/OPERALTD_04_30_2020-EX-4.14-SERVICE AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..151f1abe0466a67b141c870dc1acf7e1b3487607 --- /dev/null +++ b/full_contract_txt/OPERALTD_04_30_2020-EX-4.14-SERVICE AGREEMENT.txt @@ -0,0 +1,37 @@ +Exhibit 4.14 SERVICE AGREEMENT This Service Agreement ("Agreement") is entered into on April. 1st 2019 ("Effective Date") by and between: PC Financial Services Private Limited, a India company with an address at Building RZ-2, Pole No.-3, G/F Kapashera, Near HDFC Bank, New Delhi ("PC Financial"), a registered Non-banking Financial Company (NBFC) in India; and Mobimagic Co., Ltd., a company Incorporated under the laws of the People 's Republic of China with its principal place of business at Room 1110-046, A District, No. 1 Building, No.18 East Road, Zhongguancun, Haidlan District, Beijing City ("Mobimagic"). PC Financial and Mobimagic are individually referred to herein each as a "Party" and collectively as the "Parties." In consideration of their mutual promises, the Parties hereby agree as follows: 1. DEFINITIONS 1.1 "Activity" means the offering of small, unsecured loans to businesses and individuals in the Territory by PC Financial. 1.2 "Business Data" means all end user data and user account details, as well as commercial records, relating to PC Financial operation of the Activity in the Territory 1.3 "Confidential Information" means non-public information that a Party or Its affiliates ("disclosing Party") discloses to the other Party or its affiliates ("receiving Party") which is designated as being 'proprietary' or 'confidential' or which by its nature or the circumstances reasonably ought to be treated as confidential. Confidential Information includes the disclosing Party's software end prototypes and information relating to the disclosing Party's business affairs, including business methods, marketing strategies, pricing, competitor Information, product development strategies, and financial results. Confidential Information does not include information which (a) is known by the receiving Party, free of any obligation to keep it confidential; (b) is at the time of disclosure, or thereafter becomes, publicly available through no wrongful act of the receiving Party; (c) Is independently developed by the receiving Party, without relying on or referring to the Confidential Information of disclosing Party; or (d) is approved for release by prior written authorization of the disclosing Party. 1.4 "Marks" means the trademarks and brand names used by the PC Financial to operate the Activity in the Territory. 1.5 "Service Period" means April. 1st 2019 through to March 30, 2020. 1.6 "Services" means the services to be performed by Mobimagic as stated in clause 2.2 of this Agreement in terms of this Agreement during the Service Period. 2. THE SERVICES 2.1 PC Financial hereby engages Mobimagic to provide Services to PC Financial during the Service Period, and Mobimagic hereby accepts such engagement in order to gain the income from the Territory. 1 + + + + + +2.2 Mobimagic will provide the system / platform maintenance services and data processing services to PC Financial. 2.3 where required, Mobimagic may assign its employees to India for short durations to support wont for facilitating the rendering of Services and the estimated presence days of those employees in any case will be less than 183 days in the aggregate in any 12 months. 3. WARRANTIES 3.1 Each Party represents and warrants that it has, and will retain during the Service Period hereof, all right, title and authority to enter into this Agreement, and to perform all of its obligations under this Agreement. 3.2 Mobimagic represents and warrants that, (a) Mobimagic is not subject to any Agreement or duty that would be breached by Mobimagic's entering into or performing Mobimagic's obligations under this Agreement or that is otherwise inconsistent with this Agreement; (b) the Services provided hereunder will not infringe any legal rights or interests of any potential customers or third parties, and will not violate any provision of laws and regulations; (c) the Services will be provided in a good and workmanlike manner with at least the same degree of skill and competence normally practiced by professionals providing the same or similar services: (d) Mobimagic shall not store or retain and shall not be required to store or retain any information belonging to the PC Financial (passed through the Services) pursuant to this Agreement at any time, save and except the metadata or hashed data collected in full compliance with applicable law and PC Financial's privacy policy and solely for the purpose of invoicing .and billing PC Financial; (e) on the Effective Date and during the Service Period of this Agreement it will conduct its business in accordance with applicable law and without violating the rights of any third party. (f) It will not intend to access to the data relating to Indian operations of the PC Financial except for the data passing through Services. (g) neither Mobimagic, nor any Individual holding any direct or indirect Interest in Mobimagic, is listed on the U.S. Specially Designated Nationals (SDN) List or Consolidated Sanction List (ref. https://sanctionssearch.ofac.treas.govn), nor is Mobimagic otherwise associated with any of the listed individuals or organizations; and (h) in connection with performance of the Services In the Territory, as well as its performance of this Agreement, Mobimagic and its affiliates will not violate any provision of the US Foreign Corrupt Practices Act, the UK Bribery Ad., or any anti- corruption related laws in the Territory. 3.3 PC Financial represents and warrants that on the Effective Date and during the Service Period of this Agreement: (a) it will conduct its business in Territory in accordance with applicable law and without violating the rights of any third party; and (b) in connection with the conduct of its business in Territory, as well as its performance of this Agreement, PC Financial and Its affiliates will not violate any provision of the US Foreign Corrupt Practices Act, the UK Bribery Act, or any anti-corruption related laws in the Territory. 2 + + + + + +3.4 Except as set forth in this Section 3, the Parties and their suppliers disclaim all warranties, either express or implied, statutory or otherwise, inducing without limitation warranties of functionality, merchantability, fitness for a particular purpose. 4. RIGHTS AND OBLIGATIONS 4.1 PC Financial shall pay a monthly Fee to Mobimagic in accordance with this Agreement and within the timeline as permitted under the prevailing India regulations. 4.2 PC Financial shall be responsible for acquiring the technical equipment necessary for receiving the Service, and shall also in other respects bear its own costs in the carrying out of any activities relating to its own products and software applications. 4.3 Mobimagic warrants that the Services provided hereunder will not infringe any legal rights and interests of any potential customers and third parties, and will not violate any provision of laws and regulations. The Services it provides pursuant to the Agreement will be provided in a good and workmanlike manner with at least the same degree of skill and competence normally practiced by professionals providing the same or similar services and PC Financial has the right to continuous review and assesses the Services provided by Mobimagic and give its necessary suggestions towards the Services. Mobimagic may take necessary corrective measures of its Services according to PC Financial's requirements. 4.4 PC Financial shall maintain an updated privacy policy and consent driven architecture, to ensure that it has adequate approvals from the concerned persons, entities and/or authorities as required by law to access, collect, store and transmit personal data of any entity using the Services. The Parties hereby agree and confirm, and Mobimagic. warrants, that Mobimagic shall not store or retain and shall not be required to store or retain any information belonging to the PC Financial (passed through the Services) pursuant to this Agreement at any time, save and except the records of transactions just for the purpose of Invoicing and billing the PC Financial. Mobimagic warrants that it will not take any action, or collect any data, which causes a breach of applicable law or PC Financial'& privacy policy and consent driven architecture. Subject to the foregoing as wen as Mobimagic's obligations under this Agreement, Mobimagic shall not in any manner be held or be responsible or liable for any unforeseen contingency, claims, liabilities, demands. losses, damages or expenses arising due to absence of storage or retention of any PC Financial data which shall be the sole responsibility of PC Financial . 4.5 According to this Agreement, the Services provided by the Mobimagic are only for PC Financial's reference, it does not constitute any recommendation or decision. Any judgments, inferences or views made by PC Financial on the basis of the Information provided by the Mobimagic do not represent the positions and opinions of the Mobimagic. PC Financial shall be responsible for data security management and confidentiality responsibilities. According to this agreement, Mobimagic shall not be responsible for the usage and consequences of the data information acquired by PC Financial. 4.6 PC Financial shall not, directly or Indirectly: (a) remove any proprietary notices or labels; (b) make the Services available to any third party without the prior written consent of the Mobimagic, other than the authorized users In furtherance of the Activity; (c) falsely imply any sponsorship or association with Mobimagic; (d) use the Services to send unsolicited communications junk mail, spam, pyramid schemes or other forms of duplicative or unsolicited messages; (e) use the Services to store or transmit any content that infringes upon any person's intellectual property rights (f) use the Services to knowingly post, transmit, upload, link to, send or store any viruses, malware, Trojan horses or any other similar harmful software; or (g) knowingly use the Services in violation of this Agreement. 3 + + + + + +4.7 Data protection. Each Party agrees to comply with all applicable data protection and privacy laws arising from its obligations, if any, under the Agreement and to reasonably co-operate with the other Party in order to allow the other Party to comply with any laws as deemed necessary from time to time. Each Party shall treat all data, information relating to Services, including but not limit to the customer personal data, as confidential. Each party warrants that it shall take appropriate technical and organizational measures against unauthorized or unlawful processing of personal data and against accidental loss or destruction of, or damage to, the personal data of the other party. 4.8 Both Parties acknowledge and confirm that the Reserve Bank of India (hereafter "RBI") or persons authorized by it has right to access and inspect the PC Financial's documents, records of Service transactions and other necessary information related to the Services or Activity given to, stored or processed by Mobimagic within a reasonable time. 5. INTELLECTUAL PROPERTY RIGHTS 5.1 Nothing in this Agreement shall be construed as transferring the Intellectual Property Rights of either Party or its suppliers to the other Party. For the avoidance of doubt: (a) all Intellectual Property Rights In and to the Marks and the Business Data shall remain the property of PC Financial or its Affiliates as the case may be. Mobimagic acknowledges that it shall acquire no proprietary rights whatsoever in and to the Marks used in the Activity or the Business Data generated by the Activity, which shall remain the sole and exclusive property of PC Financial and Its Affiliates for their unlimited exploitation and all use and acquired goodwill shall inure to PC Financial and its Affiliates' sole benefit. 6. COMPENSATION AND EXPENSES 6.1 Subject to the terms and conditions of this Agreement. PC Financial shall pay to Mobimagic a fixed service fee in the amount of 970,000 United States Dollars (USD 970,000) for each month (the "Fee") within the timeline as permitted under the prevailing India regulations. It is stipulated in this Agreement that Mobimagic will send an invoice to PC Financial on monthly basis according to the progress of the service. After PC Financial confirms that invoice contents are correct, PC Financial shall pay within 45 days after confirming thus. 6.2 The payment is effected by means of bank transfer to the account specified In Mobimagic's invoice. 6.3 The Fee provided is exclusive of Goods and Service Tax (GST) which may be levied under Reverse Charge Mechanism. Any respective taxes for each party will be the responsibility by each party. If law requires that taxes be withheld PC Financial shall (a) deduct those taxes from the Fee; (b) pay the taxes to the proper governmental body; (c) send evidence of the obligation and proof of tax payment to Mobimagic; (d) remit the Fee amount, after deductions and withholding; and (e) cooperate with Mobimagic to obtain refunds of such taxes if there Is any preferential tax treatment available. 6.4 The Fee may be changed by mutual agreement in writing between Mobimagic and PC Financial according to the service content, complexity of services involved or arm's length principles. 4 + + + + + +6.5 In case of any complaint about using the Services as set out in this Agreement PC Financial shall raise the problems within 20 business days after getting Mobimaigc's invoice. Both Parties shall engage in reasonable efforts to negotiate and solve the problems together. If the cause of the difference remains undetermined after the aforesaid efforts of the Parties, an independent third party, (e.g., external auditors) may be employed to give an inspection. The costs arising out of the third- party inspection shall be borne by the Parties according to their respective faults. 7. CONFIDENTIALITY & PUBLICITY Neither Party shall disclose the other Party's Confidential Information to any third party or use Confidential Information for any purpose other than fur the proper fulfillment of this Agreement. Each Party undertakes to safeguard the Confidential Information of the other Party with the same degree of care as it would apply to Its own Confidential Information and, in any case, with no less than reasonable care. Such obligations will survive the expiration of this Agreement for a period of five (5) years. 8. INDEMNIFICATION 8.1 PC Financial shall defend at its own expense and indemnify Mobimagic against any cost, loss or damage arising out of any claim, demand, suit or action ("Action") brought against Mobimagic by a third party to the extent that such Action is related to PC Financial's breach of this Agreement. Mobimagic will promptly inform PC Financial in writing of any such Action and will co-operate in the defence and/or settlement of the Action. PC Financial agrees that in negotiating any settlement, it shall act reasonably and shall obtain Mobimagic's prior, written consent which consent shall not be unreasonably withheld. 8.2 Mobimagic shall indemnify and hold harmless PC Financial and its officers, direct0l8 and Affiliates, ("PCF Indemnified Parties") against any cost, penalty, loss or damage arising out of or related to the Services, or Mobimagic's breach of this Agreement or applicable law. PC Financial will promptly inform Mobimagic in writing of any such Action and will co-operate in the defence and/or settlement of the Action. Mobimagic agrees that in negotiating any settlement, it shall act reasonably and shall obtain PC Financial's prior, written consent which consent shall not be unreasonably withheld. 8.3 Neither Party shall be liable to the other Party in contract, tort or otherwise, whatever the cause, for any loss of profit, business or goodwill or any indirect, incidental or consequential costs, damages or expenses of any kind, except for such loss attributable to breach of confidentiality. 9. TERM & TERMINATION 9.1 The Agreement shall commence on the Effective Date and continue in effect for the Service Period, unless terminated earlier as provided in this Section. This Agreement is a memorialization of an earlier oral Agreement and shall be deemed to apply for the entire Service Period. The Agreement may be extended or renewed by the Parties in a writing executed by authorized representatives of each of the Parties. 9.2 This Agreement may be terminated by either Party prior to the end of the Service Period if the other Party is in material breach of any tem, or condition of this Agreement and such breach la not remedied for a period of thirty (30) days after the Party in breach has been notified In writing of such breach by the other Party. 9.3 This Agreement terminates automatically, with no further act or action of either Party, if: (a) so required by applicable law or regulations; or (b) a receiver is appointed for a Party or its property, a Party makes an assignment for the benefit of its creditors, goes bankrupt or is liquidated or dissolved. 5 + + + + + +9.4 Upon termination or expiration of this Agreement (i) Each Party shall return to the other Party or destroy (If so authorized in writing by the other Party) any Confidential information in the Party's possession or control, and cause an officer to certify in writing to the other Party that it has done so; (ii) Each Party's rights to be paid and each Party's obligations to pay all amounts due hereunder, as well as Sections 3 through 10 shall survive termination of this Agreement. 10. MISCELLANEOUS 10.1 The Parties to this Agreement are independent contractors. Nothing in this Agreement is intended or should be construed to create an agency, partnership, Joint venture, or employer-employee relationship between PC Financial and Mobimagic. Either Party will represent itself to be an employee or agent of the other Party or enter into any agreement on the other Party's behalf or in the other Party's name. Each Party will retain full control over the manner and means by which it conducts its business and neither Party will be entitled to waive any entitlement to workers' compensation, disability, retirement, insurance, stock options or any other benefits afforded to its employees. 10.2 IN NO EVENT WILL EITHER PARTY BE LIABLE FOR ANY CONSEQUENTIAL, INDIRECT, EXEMPLARY, SPECIAL, OR INCIDENTAL DAMAGES ARISING FROM OR RELATING TO THIS AGREEMENT. NEITHER PARTIES' TOTAL CUMULATIVE LIABILITY IN CONNECTION WITH THIS AGREEMENT, WHETHER IN AGREEMENT OR TORT OR OTHERWISE, WILL NOT EXCEED THE AGGREGATE AMOUNT OF FEES AND EXPENSES OWED BY PC FINANCIAL TO MOBIMAGIC FOR SERVICES PERFORMED UNDER THIS AGREEMENT. 10.3 This Agreement (and any question about its subsistence, effect or termination) is to be interpreted in accordance with the laws of India, save for that body of law which governs the conflict of laws. The courts of New Delhi shall have exclusive jurisdiction to settle any dispute between the Parties whether arising In connection with this agreement or otherwise. In the event of any dispute with respect to the construction, execution and performance of the provisions of this Agreement, such dispute shall be settled by arbitration in accordance with the Arbitration and Conciliation Act, 1996 and rules made thereunder in force as on that date. The arbitration shall be carried out in English language and the venue/seat of arbitration shall be New Delhi. The Arbitration award shall be final and binding on the parties. 10.4 If any provision of this Agreement is, for any reason, held to be Invalid or unenforceable, the other provisions of this Agreement will be unimpaired and the invalid or unenforceable provision will be deemed modified so that it is valid and enforceable to the maximum extent permitted by law. 10.5 This Agreement may not be assigned, delegated, or otherwise transferred, in whole or in part, by operation of law or otherwise, by a Party without the other Party's express prior written consent. Any attempted assignment, delegation, or transfer in violation of the foregoing will be null and void. 10.6 All waivers must be in writing and signed by the Party to be charged. Any waiver or failure to enforce any provision of this Agreement on one occasion will not be deemed a waiver of any other provision or of such provision on any other occasion. 6 + + + + + +10.7 This Agreement is the final, complete, and exclusive agreement of the Parties with respect to the subject matter hereof and supersedes and merges all prior or contemporaneous communications and understandings between the Parties. No modification of or amendment to this Agreement will be effective unless in writing and signed by the Party to be charged. IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date. PC Financial Services Private Limited Mobimagic Co., Ltd. Signed:/s/ Mars Zhang Signed:/s/ Jiaojiao Liu Name: Mars Zhang Name: Jiaojiao Liu Title: Chief Executive Officer Title: Authorized Signatory 7 \ No newline at end of file diff --git a/full_contract_txt/OPTIMIZEDTRANSPORTATIONMANAGEMENT,INC_07_26_2000-EX-6.6-DISTRIBUTOR AGREEMENT.txt b/full_contract_txt/OPTIMIZEDTRANSPORTATIONMANAGEMENT,INC_07_26_2000-EX-6.6-DISTRIBUTOR AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..4eff8d307652e74ab8667bde02f8959ccb19e818 --- /dev/null +++ b/full_contract_txt/OPTIMIZEDTRANSPORTATIONMANAGEMENT,INC_07_26_2000-EX-6.6-DISTRIBUTOR AGREEMENT.txt @@ -0,0 +1,97 @@ +DISTRIBUTOR AGREEMENT + +1. CERTIFICATION AND IDENTIFICATION: + +COMWARE TECHNICAL SERVICES OF 17922 SKY PARK CIRCLE, SUITE E, IRVINE, CALIFORNIA 92614-6414 (COMWARE) certifies that the Products furnished under this agreement by INTERNATIONAL TEST SYSTEMS, INC. OF 4703 SHAVANO OAK, SUITE 102, SAN ANTONIO, TEXAS 78249 (ITS) will be incorporated by COMWARE as a part of COMWARE'S systems which COMWARE sells or leases to unaffiliated third parties in the regular course of COMWARE'S business and that COMWARE'S own contribution to these systems reflect a verifiable value added. COMWARE also represents that it is an experienced user of computer equipment and software sufficiently like the Products, as defined below, and that it needs only minor support in the incorporation of the Products into its lines of business. + +2. DEFINITIONS: + + INITIAL DISTRIBUTION PERIOD: April 15, 2000 through October 15, 2000 (6 Months from the Effective Date) + + PRODUCTS: The CircuiTest 2000S In-Circuit Test System + + The CircuiTest 2100 Scanner Expansion + + EXCLUSIVE TERRITORIES: The 48 Contiguous United States + + EFFECTIVE DATE: The earlier of the date Comware orders and pays for a minimum of $22,710 worth of Products, in any combination, or April 15, 2000. + +3. EXCLUSIVE RIGHTS: Upon the effective date of this agreement COMWARE shall have the exclusive right to purchase, at the DISCOUNTS described below, and resell Products to potential customers during the Initial Distribution Period, based on the following terms and conditions: + +(a) COMWARE must purchase no less than $22,710.00 worth of Products, in any combination, by April 15, 2000. This initial order shall be evidenced by valid purchase order from COMWARE to be received by ITS no later than 5:00PM April 1, 2000, with payment to be received by ITS no later than April 15, 2000. In the event either of these dates are not met, this Agreement will automatically and immediately terminate and neither of the parties hereto will have any further obligations, one to the other. + +(b) Future Purchase Orders and delivery will approximate the 15 day delivery schedule (but not the dates), although payment will be made by COMWARE to ITS no later than thirty (30) days after receipt of invoice from ITS. + +(c) Provided COMWARE purchases the initial products as in (a) above, COMWARE shall have the right to purchase additional Products up to a total of $45,420.00 at the following discounts: + + 1 + + INITIAL DISCOUNTS: + + PRODUCT IDENTIFICATION SUGGESTED RETAIL PRICE DISCOUNT PRICE TO COMWARE ------------------------------------------------------------------------------------------------- CircuiTest 2000S $5,995.00 45% $3,297.25 CircuiTest 2100 Scanner $2,995.00 56% $1,317.80 + + (INTERNATIONAL TEST SYSTEMS RESERVES THE RIGHT TO CHANGE THE RETAIL PRICE AT ANY TIME, WITH NOTICE TO COMWARE.) + +(d) In the event COMWARE purchases products in excess of $45,420.00 during the Initial Distribution Period, COMWARE shall have the right to purchase additional Products at the following discounts: + + SUBSEQUENT DISCOUNTS: + + PRODUCT IDENTIFICATION SUGGESTED RETAIL PRICE DISCOUNT PRICE TO COMWARE ------------------------------------------------------------------------------------------------- CircuiTest 2000S $5,995.00 50% $2,997.50 CircuiTest 2100 Scanner $2,995.00 60% $1,198.00 + + (INTERNATIONAL TEST SYSTEMS RESERVES THE RIGHT TO CHANGE THE RETAIL PRICE AT ANY TIME, WITH NOTICE TO COMWARE.) + +4. RENEWAL PERIOD: Provided that COMWARE purchases a minimum of $45,420.00 worth of Products, in any combination, during the Initial Distribution + + + + + + Period, this Agreement will automatically renew for an additional 6 months (the Renewal Period). In the event COMWARE purchases an amount less than $45,420.00, than this Agreement will automatically terminate. + +5. MINIMUM ORDERS TO MAINTAIN AGREEMENT: COMWARE must purchase order a minimum of $4,200 worth of Products per month during the Renewal Period TO maintain the terms and conditions of this Agreement. In the event COMWARE does not meet these minimum purchase requirements, this Agreement will automatically and immediately terminate and neither of the parties hereto will have any further obligations, one to the other. + +6. OBLIGATIONS OF COMWARE: + + o Use best efforts to market and sell the Products to customers. o Provide marketing feedback to ITS. o Train customers on and demonstrate ITS products. o COMWARE reserves the right to develop and sell value-added services that support the sales of ITS systems. o COMWARE reserves the right to develop their own marketing materials, brochures, and advertisements for ITS' products at no cost to ITS. o Communicate with and respond to ITS AND ITS inquires. o Assist ITS in customer feedback. + + 2 + +7. OBLIGATIONS OF ITS: + + o ITS will deliver working systems no later than 30 days after a hard copy purchase order is received from COMWARE. o ITS will provide free technical support to customers who have purchased ITS systems for a period of 30 days. After the 30 day free technical support period, ITS reserves the right to charge a reasonable fee for additional support. o ITS will be solely responsible for the production of brochures describing the products, and will provide COMWARE with ample space for placement of business card/label and provide COMWARE with as many brochures as it may from time to time reasonably require, free of charge. o In event of cancellation of a purchase order, or re-scheduling of any item on a purchase order beyond the discount period, COMWARE may be liable for bill back or adjustment of discounts based upon actual quantities of items delivered within the discount period. o COMWARE will not be penalized for delays in delivery caused by ITS, or any agent of ITS. o ITS will use its best efforts to provide a swift and complete resolution of any product-related problems, whether or not such problems are covered under the terms of the WARRANTY. In the event that one of COMWARE'S customers has a problem that is beyond the scope of COMWARE'S capabilities, ITS will address the problem without delay in the best interest of customer service. + +8. WARRANTY: ITS Products are warranted free from defects of material or workmanship for 3 years after shipment from the manufacturer. Equipment purchased from ITS, which becomes defective within that time period will be repaired by ITS at its headquarters in San Antonio, Texas at no cost to COMWARE beyond cost of shipping the equipment to ITS. ITS will bear the cost of returning the item to COMWARE by UPS, REGULAR DELIVERY. priority shipping costs will be borne by COMWARE. + + This warranty is contingent upon proper use and installation of the Products and does not cover equipment which has been modified without ITS' consent or which has been subjected to unusual physical or electrical stress or on which the original identification marks have been removed or altered. + +9. DOCUMENTATION AND SUPPORT: ITS will supply with each of the Products ordered one set of user and technical documentation and one set of software in reproducible form. + + COMWARE may purchase additional copies of the documentation and software disks at then prevailing prices. + + COMWARE will receive minimal assistance and support from ITS consistent with the certifications in Section 1. + + 3 + +TERMINATION: except as specifically described elsewhere in this agreement, either ITS or COMWARE shall have the right to terminate this Agreement with 30 days written notice from the other party, for any reason whatsoever. + +11. GOVERNMENT SALES: COMWARE reserves the right to incorporate, as extension of this Agreement, additional terms and conditions as may be required for sale of Products to the US Government. These terms and conditions will be expressly quoted in attachments to subject purchase orders. ITS reserves the right to reject such purchase orders only under those conditions where these terms and conditions are in conflict with stated policy or corporate condition of ITS at the time the purchase orders are received. + + + + + +12. ENTIRE AGREEMENT: This Agreement supersedes all prior agreements and understandings between the parties relating to the subject matter and is intended by the parties as the complete and exclusive statement of the terms of the Agreement. No modification, addition to or waiver of the terms and conditions of this Agreement shall be effective unless in writing and signed by the party against whom the same is sought to be enforced. + +13. GOVERNED BY THE STATE OF TEXAS: This Agreement shall be interpreted and governed by the laws of the State of Texas. Comware agrees to submit to the jurisdiction of the State of Texas, Bexar County, USA. + +INTERNATIONAL TEST SYSTEMS, INC. COMWARE TECHNICAL SERVICES + +BY BY ------------------------------- --------------------------------- + +PRINTED PRINTED -------------------------- ---------------------------- + +TITLE TITLE ---------------------------- ------------------------------ + +DATE DATE ----------------------------- ------------------------------- + + 4 \ No newline at end of file diff --git a/full_contract_txt/ORBSATCORP_08_17_2007-EX-7.3-STRATEGIC ALLIANCE AGREEMENT.txt b/full_contract_txt/ORBSATCORP_08_17_2007-EX-7.3-STRATEGIC ALLIANCE AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..26e687ff48b8e07eb0b4346a7d69e4b167232a77 --- /dev/null +++ b/full_contract_txt/ORBSATCORP_08_17_2007-EX-7.3-STRATEGIC ALLIANCE AGREEMENT.txt @@ -0,0 +1,227 @@ +Exhibit 7.3 + + + +STRATEGIC ALLIANCE AGREEMENT + +This Strategic Alliance Agreement is made and entered into this 9th day of September 2005, by and between UTEK Corporation ("UTK"), 202 South Wheeler Street, Plant City, Florida 33566 a Delaware corporation, and World Energy Solutions, ("AVDU"), 3900A 31st Street North, St. Petersburg, Florida, a Florida corporation. + +WITNESSETH: + +WHEREAS, AVDU desires to engage UTK to provide the services as set forth in this Agreement, and + +WHEREAS, UTK is agreeable to provide these services. + +NOW THEREFORE, in consideration of the mutual promise made in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows: + +I. ENGAGEMENT + +AVDU hereby retains UTK to provide those services as defined herein and UTK hereby agrees to the appointment on the terms and conditions hereinafter set forth and agrees to use commercially reasonable efforts in providing said services. + +II. INDEPENDENT CONTRACTOR + +UTK shall be, and in all respects be deemed to be, an independent contractor in the performance of its duties hereunder. + + A. AVDU shall be solely responsible for making all payments to and on behalf of its employees and UTK shall in no event be liable for any debts or other liabilities of AVDU. + + B. UTK shall not have or be deemed to have, fiduciary obligations or duties to AVDU, and shall be able to pursue, conduct and carry on for its own account (or for the account of others) such activities, ventures, businesses and other pursuits as UTK in its sole, absolute and unfettered discretion, may elect. + + C. Notwithstanding the above, no activity, venture, business or other pursuit of UTK, during the term of this Agreement shall conflict with UTK's obligations under this Agreement. + + + + + +III. SERVICES + +UTK agrees to provide the following services, hereinafter collectively referred to as "Services": + +SEE "CONFIDENTIAL TERM SHEET" (EXHIBIT A) ATTACHED AND MADE A PART HEREOF. + + A. UTK shall devote such time and efforts, as it deems commercially reasonable, under the circumstances to the affairs of the AVDU, as is reasonable and adequate to render the Services contemplated by this Agreement. + + B. UTK cannot guarantee results on behalf of AVDU, but shall pursue all reasonable avenues available through its network of contacts. The acceptance and consumption of any transaction is subject to acceptance of the terms and conditions by its sole discretion. + + C. In conjunction with the Services, UTK agrees to: + + 1. Make itself available at the offices of AVDU or at another mutually agreed upon place, during normal business hours, for reasonable periods of time, subject to reasonable advance notice and mutually convenient scheduling. + + 2. Make itself available for telephone conferences with the principal officer(s) of AVDU during normal business hours. + +IV. EXPENSES + +It is expressly agreed and understood that each party shall be responsible for its own normal and reasonable out-of-pocket expenses. + +V. COMPENSATION + + A. In consideration for the services to be provided, AVDU agrees that it will remit the agreed upon stock certificate within five (5) days of both parties executing this Agreement. + + B. AVDU agrees that UTK shall be entitled to compensation as follows: + +SEE STRATEGIC ALLIANCE CONFIDENTIAL TERM SHEET (EXHIBIT A) ATTACHED AND MADE A PART HEREOF. + +VI. TERM AND TERMINATION + +The term of the Agreement will be for 12 months unless terminated sooner. This agreement may be renewed upon mutual, written agreement of the parties. Either party may terminate this Agreement at any time with 30 days written notice. - 2 - + + + + + +VII. LEGAL COMPLIANCE + +AVDU agrees that it will put in place, if it has not already done so, policies and procedures relating to and addressing, with the commercially reasonable intent to ensure compliance with, applicable securities laws, rules and regulations, including, but not limited to: + + A. The use, release or other publication of forward-looking statements. + + B. Disclosure requirements regarding the required disclosure of the nature and terms of UTK's relationship with, including, but not limited to press releases, publications on its web site, letters to investors and telephone or other personal communication with potential or current investors. + + C. No press releases or any other forms of communication to third parties which mention both UTK CORPORATION and AVDU, shall be released without the prior written consent and approval of both UTK and AVDU. + + D. EXECUTION. The execution, delivery and performance of this Agreement, in the time and manner herein specified will not conflict with, result in a breach of, or constitute a default under any existing agreement, indenture, or other instrument to which either AVDU OR UTK is a party or by which either entity may be bound or affected. + + E. TIMELY APPRISALS. AVDU shall use its commercially reasonable efforts to keep UTK up to date and apprised of all business, market and legal developments related to and its relationship to UTK. + + F. CORPORATE AUTHORITY. Both AVDU and UTK have full legal authority to enter into this Agreement and perform the same in the time and manner contemplated. + + G. The individuals whose signatures appear below are authorized to sign this Agreement on behalf of their respective corporations. + + H. AVDU will cooperate with UTK and will promptly provide UTK with all pertinent materials and requested information in order for UTK to perform its Services pursuant to this Agreement. + + I. When delivered, the shares of AVDU Common Stock shall be duly and validly issued, fully paid and non-assessable. + + + +J. UTK represents to AVDU that a) it has the experience as may be necessary to perform all the required, b) all Services will be performed in a professional manner, and c) all individuals it provides to perform the Services will be appropriately qualified and subject to appropriate agreements concerning the protection of trade secrets and confidential information of which such persons may have access to over the term of this Agreement. + + K. Until termination of the engagement, AVDU will notify UTK promptly of the occurrence of any event, which might materially affect the condition (financial or otherwise), or prospects of AVDU. - 3 - + + + + + +VIII. CONFIDENTIAL DATA + + + +A. UTK shall not divulge to others, any trade secret or confidential information, knowledge, or data concerning or pertaining to the business and affairs of AVDU, obtained by UTK as a result of its engagement hereunder, unless authorized, in writing by AVDU. UTK represents and warrants that it has established appropriate internal procedures for protecting the trade secrets and confidential information of AVDU, including, without limitation, restrictions on disclosure of such information to employees and other persons who may be engaged in such information to employees and other persons who may be engaged in rendering services to any person, firm or entity which may be a competitor of AVDU. + + B. AVDU shall not divulge to others, any trade secret or confidential information, knowledge, or data concerning or pertaining to the business and affairs of UTK or confidential information revealed by UTK obtained as a result of its engagement hereunder, unless authorized, in writing, by UTK. + + + +C. UTK shall not be required in the performance of its duties to divulge to AVDU, or any officer, director, agent or employee of AVDU, any secret or confidential information, knowledge, or data concerning any other person, firm or entity (including, but not limited to, any such person, firm or entity which may be a competitor or potential competitor of) which UTK may have or be able to obtain other than as a result of the relationship established by this Agreement. + +IX. OTHER MATERIAL TERMS AND CONDITIONS + + A. INDEMNITY. + + + +1. UTK shall indemnify, defend and hold harmless AVDU from and against any and all losses incurred by AVDU which arise out of or result from misrepresentation, breach of warranty or breach or non- fulfillment of any covenant contained herein or Schedules annexed hereto or in any other documents or instruments furnished by UTK pursuant hereto or in connection with this Agreement. + + + +2. AVDU shall indemnify, defend and hold harmless UTK from and against any and all losses incurred by UTK which arise out of or result from misrepresentation, breach of warranty or breach or non-fulfillment of any covenant contained herein or Schedules annexed hereto or in any other documents or instruments furnished by AVDU pursuant hereto or in connection with this Agreement. + + B. PROVISIONS. Neither termination nor completion of the assignment shall affect the provisions of this Agreement, and the Indemnification Provisions that are incorporated herein, which shall remain operative and in full force and effect. + + + +C. AVDU agrees that for a twenty four months (24) following the execution of this Agreement, AVDU shall not, without UTEK's prior written consent, directly or indirectly solicit for employment any present employee of UTEK, or request induce or advise any employee of UTEK to leave the employ of UTEK. In turn, UTEK agrees that it will not directly or indirectly solicit any present employee of AVDU. - 4 - + + + + + + D. ADDITIONAL INSTRUMENTS. Each of the parties shall from time to time, at the request of others, execute, acknowledge and deliver to the other party any and all further instruments that may be reasonably required to give full effect and force to the provisions of this Agreement. + + + +E. ENTIRE AGREEMENT. Each of the parties hereby covenants that this Agreement, is intended to and does contain and embody herein all of the understandings and agreements, both written or oral, of the parties hereby with respect to the subject matter of this Agreement, and that there exists no oral agreement or understanding expressed or implied liability, whereby the absolute, final and unconditional character and nature of this Agreement shall be in any way invalidated, empowered or affected. There are no representations, warranties or covenants other than those set forth herein. + + + +F. ASSIGNMENTS. The benefits of the Agreement shall inure to the respective successors and assignees of the parties and assigns and representatives, and the obligations and liabilities assumed in this Agreement by the parties hereto shall be binding upon their respective successors and assigns; provided that the rights and obligations of UTK under this Agreement may not be assigned or delegated without the prior written consent of AVDU and any such purported assignment shall be null and void. Notwithstanding the foregoing, UTK may assign this Agreement or any portion of its Compensation as outlined herein to its subsidiaries in its sole discretion. + + G. ORIGINALS. This Agreement may be executed in any number of counterparts, each of which so executed shall be deemed an original and constitute one and the same agreement. + + H. ADDRESSES OF PARTIES. Each party shall at all times keep the other informed of its principal place of business if different from that stated herein, and shall promptly notify the other of any change, giving the address of the new place of business or residence. + + I. NOTICES. All notices that are required to be or may be sent pursuant to the provision of this Agreement shall be sent by certified mail, return receipt requested, or by overnight package delivery service to each of the parties at the addresses appearing herein, and shall count from the date of mailing or the validated air bill. + + + +J. MODIFICATION AND WAVIER. A modification or waiver of any of the provisions of this Agreement shall be effective only if made in writing and executed with the same formality as this Agreement. The failure of any party to insist upon strict performance of any of the provisions of this Agreement shall not be construed as a waiver of any subsequent default of the same or similar nature or of any other nature. + + + +K. INJUNCTIVE RELIEF. Solely by virtue of their respective execution of this Agreement and in consideration for the mutual covenants of each other, AVDU and UTK hereby agree, consent and acknowledge that, in the event of a breach of any material term of this Agreement, the non-breaching party will be without adequate remedy-at-law and shall therefore, be entitled to immediately redress any material breach of this Agreement by temporary or permanent injunctive or mandatory relief obtained in an action or proceeding instituted in any court of competent jurisdiction without the necessity of proving damages and without prejudice to any other remedies which the non-breaching party may have at law or in equity. - 5 - + + + + + + + +L. ATTORNEY'S FEES. If any arbitration, litigation, action, suit, or other proceeding is instituted to remedy, prevent or obtain relief from a breach of this Agreement, in relation to a breach of this Agreement or pertaining to a declaration of rights under this Agreement, the prevailing party will recover all such party's attorneys' fees incurred in each and every such action, suit or other proceeding, including any and all appeals or petitions there from. As used in this Agreement, attorneys' fees will be deemed to be the full and actual cost of any legal services actually performed in connection with the matters involved, including those related to any appeal to the enforcement of any judgment calculated on the basis of the usual fee charged by attorneys performing such services. + +APPROVED AND AGREED: UTEK CORPORATION WORLD ENERGY SOLUTIONS + +By: /s/ Clifford M. Gross By: /s/ Benjamin C. Croxton Clifford M. Gross, Ph.D. Benjamin C. Croxton Chief Executive Officer Chief Executive Officer - 6 - + + + + + +Exhibit A + + + +CONFIDENTIAL TERM SHEET + +PROPOSED STRATEGIC ALLIANCE BETWEEN UTEK CORPORATION (UTK) & WORLD ENERGY SOLUTIONS (AVDU) + +Statement of Work: To identify technology acquisition opportunities for AVDU from research universities and government laboratories. A first step in this process is the development of a Technology Acquisition Profile. Once completed, we will identify and present technologies that meet this profile. While conducting our search we will maintain the confidentiality of AVDU. + +Term: The term of the Agreement will be for 12 months unless terminated sooner. This Agreement may be renewed upon mutual, written agreement of the parties. Either party may terminate this agreement at any time with 30 days written notice. + +Services: UTK agrees to provide the following distinct services to AVDU: + + i. Identify synergistic new technologies from universities and government laboratories to help provide AVDU with an enhanced new product pipeline. + + ii. Review technology acquisition opportunities for AVDU while maintaining AVDU's confidentiality. + + iii. Present technology acquisition opportunities for AVDU. AVDU will have 30-days to determine if they want to go forward with the technology license. + + a. UTK after 30 days shall have the right to present the technology to other clients. + + iv. AVDU acknowledges that the sources of technologies represented by UTEK are 3rd party research institutions for which UTEK does not control whether the technology will be shown to other parties by the licensor. + + v. At AVDU's request, UTK will prepare, and compile additional information regarding the technology acquisition opportunities for AVDU. + + vi. At AVDU's request and upon mutual agreement between AVDU and UTK, UTK will negotiate and seek to acquire a license to the requested technology for subsequent sale to and acquisition by AVDU. + + vii. On a case-by-case basis, at AVDU's request and UTK's sole discretion, UTK will propose an equity-financing plan for AVDU's consideration, to finance select technology acquisition opportunities for AVDU. + + viii. AVDU will not seek to acquire any technologies presented to AVDU by UTK directly from the technology developer for a period of 24 months following the termination of this Strategic Alliance agreement. + + + + + + ix. The compensation quotation is valid for projects authorized and initiated within 30 days of the date of this term sheet. + +a. In arms length negotiation with the technology developer, UTK will seek to acquire the license to the technology through one of its subsidiaries. UTEK will then negotiate with AVDU to acquire this subsidiary in a stock for stock exchange under an "Agreement and Plan of Acquisition". The consideration to be paid by AVDU to UTK will be based upon a markup to the value of the license and other assets in the subsidiary as determined by UTK and agreed to by both parties. + +b. Should AVDU decide not to proceed in the acquisition of the technology/company as described above, then AVDU shall be prohibited from acquiring the technology/company either directly or indirectly, from the technology/company developer for a period of 24 months following the termination of this Strategic Alliance Agreement. + +Technology Transfer: When a technology is shown to AVDU that AVDU wants to acquire, UTK will seek to acquire the license to a technology through one of its subsidiaries. UTK will then seek to provide a term sheet to AVDU outlining the consideration to be paid by AVDU for the acquisition of this technology. UTK shall transfer this subsidiary to AVDU in a stock for stock exchange under an "Agreement and Plan of Acquisition." The consideration to be paid by AVDU to UTK will be based upon a markup to the value of the license and other assets in the subsidiary as determined by UTK and agreed to by both parties. + +Compensation: + +In consideration for providing these Services, AVDU shall pay UTK $120,000 worth of unregistered shares of common stock (31,413 shares) upon the execution of this Strategic Alliance Agreement. 1/12th of the shares (2,617) shall vest each month during the term of this Agreement. If this Agreement is terminated any unvested shares will be returned to AVDU. Both AVDU and UTK will cover their own out-of-pocket expenses incurred during the performance of this Strategic Alliance Agreement. + +Approved by: /s/ Clifford M. Gross /s/ Benjamin C. Croxton UTEK Corporation World Energy Solutions Clifford M. Gross, Ph.D. Benjamin C. Croxton Chief Executive Officer Chief Executive Officer + +Date: September 9, 2005 Date: September 9, 2005 \ No newline at end of file diff --git a/full_contract_txt/OTISWORLDWIDECORP_04_03_2020-EX-10.4-INTELLECTUAL PROPERTY AGREEMENT by and among UNITED TECHNOLOGIES CORPORATION, OTIS WORLDWIDE CORPORATION and CARRIER ~1.txt b/full_contract_txt/OTISWORLDWIDECORP_04_03_2020-EX-10.4-INTELLECTUAL PROPERTY AGREEMENT by and among UNITED TECHNOLOGIES CORPORATION, OTIS WORLDWIDE CORPORATION and CARRIER ~1.txt new file mode 100644 index 0000000000000000000000000000000000000000..71fbccaba41031324bcbda7262e374d804853471 --- /dev/null +++ b/full_contract_txt/OTISWORLDWIDECORP_04_03_2020-EX-10.4-INTELLECTUAL PROPERTY AGREEMENT by and among UNITED TECHNOLOGIES CORPORATION, OTIS WORLDWIDE CORPORATION and CARRIER ~1.txt @@ -0,0 +1,233 @@ +Exhibit 10.4 + +EXECUTION VERSION + +INTELLECTUAL PROPERTY AGREEMENT + +by and among + +UNITED TECHNOLOGIES CORPORATION, + +OTIS WORLDWIDE CORPORATION + +and + +CARRIER GLOBAL CORPORATION + +Dated as of April 2, 2020 + + + + + +TABLE OF CONTENTS ARTICLE I DEFINITIONS 2 1.1 Defined Terms 2 ARTICLE II ASSIGNMENT OF SOLELY OWNED INTELLECTUAL PROPERTY RIGHTS 7 2.1 Assigned Intellectual Property Rights 7 ARTICLE III LICENSING OF INTELLECTUAL PROPERTY RIGHTS 8 3.1 Licensed Intellectual Property Rights 8 3.2 Reserved Intellectual Property Rights 10 3.3 No Rescission 10 ARTICLE IV TRADEMARKS 10 4.1 Ownership of United Technologies Trademarks 10 4.2 Use of United Technologies Trademarks 11 4.3 Special Trademark Provisions. 12 ARTICLE V EXCLUDED AGREEMENTS 12 5.1 No Change to Excluded Agreements 12 ARTICLE VI CONFIDENTIALITY 12 6.1 Received Information and Materials 12 6.2 Confidential Information 12 6.3 Obligations 13 6.4 Termination of UTC NDA 13 ARTICLE VII LIMITATIONS AND DISCLAIMERS 13 7.1 Subsequent Delivery of Intellectual Property Rights 13 7.2 No Additional Obligations 14 7.3 DISCLAIMER 14 7.4 Limitations of Liability 14 ARTICLE VIII GOVERNING LAW AND DISPUTE RESOLUTION 15 8.1 Governing Law 15 8.2 Alternative Dispute Resolution 15 8.3 Confidentiality 13 8.4 Equitable Relief 13 + +i + + + + + +ARTICLE IX GENERAL PROVISIONS 16 9.1 Entire Agreement; Conflict Among Agreements 16 9.2 Assignment and Change of Control; Successor and Assigns 16 9.3 Bankruptcy 17 9.4 Amendments and Waivers 17 9.5 Notice 18 9.6 Severability 18 9.7 Counterparts 18 9.8 Further Assurances 18 9.9 Interpretation 19 + +ii + + + + + +INTELLECTUAL PROPERTY AGREEMENT This INTELLECTUAL PROPERTY AGREEMENT (this "Agreement"), dated as of April 2, 2020, is by and among United Technologies Corporation, a Delaware corporation ("UTC"), Otis Worldwide Corporation, a Delaware corporation ("Otis"), and Carrier Global Corporation, a Delaware corporation ("Carrier") (each, a "Party" and together, the "Parties"). RECITALS WHEREAS, UTC, Otis and Carrier have entered into that certain Separation and Distribution Agreement, of even date herewith (the "SDA"), pursuant to which UTC and its subsidiaries will undertake a series of transactions following which UTC will separate into three independent, publicly traded companies: (i) UTC, comprising Collins Aerospace and Pratt & Whitney, a systems supplier to the commercial aerospace and defense industry, (ii) Otis, a manufacturer of people-moving products, such as elevators, escalators and moving walkways, and (iii) Carrier, a provider of HVAC, refrigeration, fire, security and building automation technologies; WHEREAS, pursuant to Section 2.10 of the SDA, UTC, Otis and Carrier agreed to enter into this Agreement; WHEREAS, each of the Parties and their respective affiliates are currently owners of, and in possession of, certain Intellectual Property Rights (as defined herein), which Intellectual Property Rights may have been developed or acquired by such Party independently, or jointly with either or both the other Parties, or assigned to it by either or both of the other Parties prior to the date hereof; WHEREAS, a result of the corporate relationship between each of the Parties, and not necessarily pursuant to a written agreement, prior to the date hereof, each Party has had access to, and the right to use certain Intellectual Property Rights of one or both of the other Parties as required for its business; WHEREAS, in connection with the transactions contemplated by the SDA, the Parties wish to confirm their respective ownership of certain Intellectual Property Rights (as defined herein), and with respect to certain other Intellectual Property Rights transfer ownership thereof from an Assignor Party (as defined herein) to an Assignee Party (as defined herein), and each Assignee Party wishes to receive ownership of such Intellectual Property Rights; and WHEREAS, in connection with the transactions contemplated by the SDA, the Parties wish to either grant, or confirm the prior grants of, certain rights and licenses with respect to certain Intellectual Property Rights from each Licensor Party (as defined herein) to a Licensee Party (as defined herein), and each Licensee Party wishes to receive such license grants on the terms set forth herein. NOW, THEREFORE, in consideration of the mutual promises hereinafter set forth and in the SDA (and other agreements entered into in connection with the SDA), and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, and intending to be legally bound, the Parties hereby agree as follows: + + + + + +ARTICLE I + +DEFINITIONS + +1.1 Defined Terms. For the purposes of this Agreement, the following terms shall have the following meanings. Capitalized terms used but not otherwise defined in this Article I or elsewhere in this Agreement shall have the meaning ascribed to such terms in the SDA. For the avoidance of doubt, for purposes of Section 2.1, Section 3.1, and Section 4.1, respectively, (a) any reference to an Assignor Party, a Licensor Party, or a Party, respectively, shall be deemed to refer to other relevant members of such Assignor Group, such Licensor Group, or such Party's Group, respectively and (b) any obligation of an Assignor Party, a Licensor Party, or a Party, respectively, shall include an obligation to cause such relevant members of such Assignor Group, such Licensor Group, or such Party's Group, respectively, to satisfy such obligation; in each case, as the context requires. "AAA Rules" shall have the meaning defined in Section 8.2.2. "Affiliate" shall mean, for the purpose of this Agreement and notwithstanding its meaning in the SDA, with respect to a Party, another member of the Party Group to which the Party belongs. "Agreement" shall have the meaning defined in the preamble. "Assigned Intellectual Property Rights" shall have the meaning defined in Section 2.1.1. "Assignee Group" shall mean one of the UTC Group, the Otis Group, or the Carrier Group of which an Assignee Party is a member. "Assignee Party" shall mean the Party, as the context requires, other than the Assignor Party, to whom Intellectual Property Rights are assigned from the Assignor Party pursuant to the terms hereof. "Assignor Group" shall mean one of the UTC Group, the Otis Group, or the Carrier Group of which the Assignor Party is a member. "Assignor Party" shall mean one of the Parties, as the context requires, in its capacity as an assignor of Intellectual Property Rights to another Party pursuant to the terms hereof. "Carrier" shall have the meaning defined in the preamble. "Confidential Information" shall have the meaning defined in Section 6.2. "Contemplated to be Used" shall mean that there are contemporaneous books or records, whether in hard copy or electronic or digital format (including emails, databases and other file formats) evidencing a specific, good faith intention of future use, created in the ordinary course of business consistent with past practice. + +2 + + + + + +"Copyrights" shall mean copyrights and other equivalent rights in copyrightable subject matter in works of authorship (including software), and including all registrations and applications therefor, and all renewals, extensions, restorations and reversions thereof. "Dispute" shall have the meaning defined in Section 8.2. "Excluded Agreement" shall mean (a) each Negotiated Agreement and (b) each Third Party Agreement; provided that, notwithstanding the foregoing, and without limitation, for the purposes of this Agreement, an Excluded Agreement shall not include any IWA or any work performed, without an express written agreement, by a member of an Assignor Group or a Licensor Group as Performer for a member of an Assignee Group or a Licensee Group as Requester, respectively, or vice versa. A non-inclusive (and not necessarily representative) listing of Excluded Agreements is provided in Schedule 5.0. "Exploit" shall mean, with respect to a particular item of Intellectual Property Rights, to do all things with such Intellectual Property Rights (subject to Article VI), including (a) to make, have made, use (including for development), import, offer for sale, and sell any product or service under any Patents within such Intellectual Property Rights; (b) to copy, display, perform, create derivative works based upon, and distribute any works under, any Copyrights within such Intellectual Property Rights; and (c) to use Trade Secrets and other confidential or proprietary information within such Intellectual Property Rights. For the avoidance of doubt, a right to Exploit in any manner a particular item of Intellectual Property Rights does not include the right to Exploit in any manner any other Intellectual Property Rights, including any separate background Intellectual Property Rights from or with which the item was created or derived, or which is necessary or desirable for a particular use of the item. "Funded" or "Funding" by an entity shall mean paid for by that entity through one or more cash contributions. For the purposes of this definition, U.S. Government funds or the funds of any other third party or entity shall not be considered. "Future Affiliate Provision" shall mean a term or provision of any agreement governing Intellectual Property Rights as between or among the Parties that was negotiated and entered into on arm's-length terms at any time prior to the Effective Time between or among members of different Party Groups (a) pursuant to which a licensor Party grants or purports to grant to the Party or Parties licensed under such agreement a license to the Intellectual Property Rights of any future Affiliate (including in the case of UTC, Raytheon Company) of the licensor Party, (b) imposing or purporting to impose any non-compete or other similar limitation on the business of any future Affiliate (including in the case of UTC, the business of Raytheon Company) of a Party, in favor of another Party or Parties, or (c) requiring or purporting to require the payment to a licensor Party of any incremental royalty or other charge on the business or products of any future Affiliate (including in the case of UTC, Raytheon Company) of the Party that is the licensee under such agreement, except to the extent that such future Affiliate avails itself of the license to which such royalty pertains. Each Party agrees that to the extent such Party is the beneficiary of a Future Affiliate Provision, such Party hereby waives and disclaims, and will not seek to enforce or claim the benefit of, such Future Affiliate Provision, such waiver, disclaimer and covenant being for the sole benefit of the other Parties, their Party Groups, and their future Affiliates. + +3 + + + + + +"Intellectual Property Rights" shall mean any and all intellectual property and industrial property rights throughout the world, whether registered or unregistered, including intellectual property and industrial property rights protected or represented by, arising under, or associated with (a) Patents; (b) Copyrights; (c) Trade Secrets; and (d) any other similar or equivalent intellectual property or proprietary rights anywhere in the world; provided, however, that Trademarks are expressly excluded from the definition of Intellectual Property Rights. "Invention Disclosure" shall mean a written description of an invention, or potential invention, submitted to any member of a Party Group for review for patenting. "IWA" shall mean, as of a relevant date, the contractual terms and conditions prescribed for inter-entity work authorizations by Section 43 of the United Technologies Corporate Policy Manual or a predecessor thereof as of the relevant date, including the terms and conditions governing Intellectual Property Rights therein. "Licensed Intellectual Property Rights" shall have the meaning defined in Section 3.1.1. "Licensed Patents" shall mean with respect to a particular Licensor Group and Licensee Group, the Patents owned or freely licensable by the Licensor Group, that absent a license of the scope granted to the Licensee Group pursuant to Section 3.1 hereof, would be infringed by the operation of the business of the Licensee Group (including the making, selling, offering for sale, using or importing of the products or services of the Licensee Group). In addition, for the purpose of the forgoing determination as to whether a Patent is infringed as of the Effective Time, a Patent that issues after the Effective Time to the extent based upon a Patent Application or Invention Disclosure in existence before the Effective Time, shall be deemed to have been in existence from the date immediately prior to the Effective Time. "Licensee Group" shall mean one of the UTC Group, the Otis Group, or the Carrier Group of which the Licensee Party is a member. "Licensee Group Field" shall mean the field of the business of the applicable Licensee Group, including the manufacture, sale, support and service of products, and the provision of services, of one or more members of the applicable Licensee Group, as of the Effective Time and the natural extension thereof. "Licensee Party" shall mean one of the Parties, as the context requires, other than the Licensor Party, to whom Licensed Intellectual Property Rights are granted from the Licensor Party pursuant to the terms hereof. "Licensor Group" shall mean one of the UTC Group, the Otis Group, or the Carrier Group of which the Licensor Party is a member. "Licensor Party" shall mean one of the Parties, as the context requires, in its capacity as a grantor of Licensed Intellectual Property Rights to another Party pursuant to the terms hereof. "Negotiated Agreement" shall mean any agreement governing Intellectual Property Rights as between or among the Parties that was negotiated and entered into on arm's-length terms at any time prior to the Effective Time between or among members of different Party + +4 + + + + + +Groups, including any and all such agreements identified in Schedule 5.0; provided that, notwithstanding the foregoing, and without limitation, for the purposes of this Agreement, a Negotiated Agreement shall not include any (i) IWA, (ii) work performed, without an express written agreement, by any member of a Party Group as Performer for another member or members of a Party Group as Requester or (iii) agreement between or among members of different Party Groups to the extent including a Future Affiliate Provision. "Otis" shall have the meaning defined in the preamble. "Party" and "Parties" shall have the meaning defined in the preamble to this Agreement. "Party Group" shall mean each of the UTC Group, the Otis Group, and the Carrier Group. "Patent" shall means any issued patent, including any utility patent, design patent, utility model, and inventor's certificate, or any like governmental grant or registration for the protection of inventions, including any patent granted by the United States Patent and Trademark Office (the "USPTO"), the European Patent Office (the "EPO") or any foreign equivalent thereof, including any issued patent that is continuation, divisional, continuation-in-part, extension, confirmation, reissue, reexamination, renewal, correction or substitution of an issued patent. In addition, unless the context otherwise requires, the term Patent shall include any Patent Application. "Patent Application" means any application for a Patent, including any provisional or PCT or similar application, before an applicable governmental office anywhere in the world, including the USPTO and the EPO. "Performer" shall mean, with respect to services, an entity meeting at least one of the following two conditions: (a) the entity is a "Performer," as defined in an IWA issued to the entity by the "Requester" defined in the IWA, with respect to the services, and/or (b) the entity performed the services at the request of a Requester as part of a joint project with the Requester, with respect to which no IWA was expressly issued nor any Negotiated Agreement entered with the Requester, and the entity received Funding from the Requester for the services (which Funded the services in full, or in full jointly with the Performer but with no contribution from any other entity) and delivered results of the services to the Requester. "Performer Background IPR" shall mean, with respect to services performed by the Performer at the request of the Requester, all Intellectual Property Rights held by Performer at the time of such services, other than Performer Foreground-Delivered IPR and Performer Foreground-Undelivered IPR, that would be necessary to Exploit Performer Foreground-Delivered IPR. "Performer Foreground-Delivered IPR" shall mean, with respect to services performed by the Performer at the request of the Requester, all Intellectual Property Rights that were conceived or created by the Performer in the course of such performance, directly or by a Performer Service Provider, and delivered to the Requester. + +5 + + + + + +"Performer Foreground-Undelivered IPR" shall mean, with respect to services performed by the Performer at the request of the Requester, all Intellectual Property Rights that were conceived or created by the Performer in the course of such performance, directly or by a Performer Service Provider, and not delivered to the Requester. "Performer Service Provider" shall mean, with respect to services performed by the Performer at the request of the Requester, any Affiliate (other than the Requester), supplier, service provider, or other Person performing any aspect of the services on behalf of the Performer. "Person" shall mean an individual, partnership, corporation, limited liability company, joint venture, association or other form of business organization (whether or not regarded as a legal entity under applicable law), trust or other entity or organization. "Received Information and Materials" shall have the meaning defined in Section 6.1. "Requester" shall mean, with respect to services, an entity meeting at least one of the following two conditions: (a) the entity is a "Requester," as defined in an IWA issued by the entity to the "Performer" defined in such IWA, with respect to the services, and/or (b) the entity requested the services from the Performer as part of a joint project with the Performer, with respect to which no IWA was expressly issued nor any Negotiated Agreement entered with the Performer, and the entity Funded the services (in full independently, or in full jointly with the Performer but with no contribution from any other entity) and received delivery of results of the services from the Performer. "Requester Foreground IPR" shall mean, with respect to services requested by the Requester from the Performer, all Intellectual Property Rights conceived or created by the Requester, directly or by a Requester Service Provider, in connection with such services. "Requester Service Provider" shall mean, with respect to services performed by the Performer at the request of the Requester, any Affiliate (other than the Performer), supplier, service provider, or other Person performing any aspect of the Requester's obligations in connection with such services. "SDA" shall have the meaning defined in the recitals. "Third Party Agreement" shall mean any Agreement, entered into at any time prior to the Effective Time, between or among (a) a third party, on the one hand, and (b) any member or members of the Party Groups, including any and all such agreements identified in Schedule 5.0; provided that, notwithstanding the foregoing, and without limitation, for the purposes of this Agreement, a Third Party Agreement shall not include any agreement between or among members of different Party Groups to the extent including a Future Affiliate Provision. "Trade Secrets" shall mean rights in information or know how, regardless of form, including ideas, inventions, designs, drawings, specifications, product configurations, prototypes, models, improvements, technical data and other data, databases, formulae, algorithms and mathematical embodiments, laboratory notebooks, pricing and cost information, plans, proposals, processes, procedures, schematics, manufacturing techniques, business methods, + +6 + + + + + +customer lists and supplier lists, and Invention Disclosures, that (a) derives economic value, actual or potential, from not being, and is not, generally known or readily ascertainable by proper means and (b) is the subject of efforts that are reasonable under the circumstances to maintain the confidentiality or secrecy thereof. "Trademarks" shall mean trademark rights, whether registered or unregistered, including in trademarks, service marks, trade names, brand names, certification marks, collective marks, Internet domain names and registrations, logos, slogans, symbols, trade dress and designs, and including all registrations, renewals, and applications for registration of the foregoing. "United Technologies Trademarks" shall mean all Trademarks to the extent consisting of or containing "UTC," "United Technologies Corporation," "United Technologies," "UTX," the UTC Icon, "ACE," "Achieving Competitive Excellence," all ACE logos, "ESP," "Employee Scholar Program," all ESP logos, "ITC360," all ITC360 logos, and any variations or derivatives of any of the foregoing, and any Trademarks that are confusingly similar thereto. "UTC" shall have the meaning defined in the preamble. "UTC Icon" shall mean the symbol, also known as the UTC gear logo, identified as the "UTC Icon" in the UTC "Corporate Identity Guidelines - Brand Basics" document attached as Schedule 4.1.1, regardless of color or size, and any variant thereof. "UTC NDA" shall have the meaning defined in Section 6.4. ARTICLE II + +ASSIGNMENT OF SOLELY OWNED INTELLECTUAL PROPERTY RIGHTS + +2.1 Assigned Intellectual Property Rights + +2.1.1 Assignments by an Assignor Party. Subject to Section 3.2, each Assignor Party, on behalf of itself and the other members of the Assignor Group, hereby irrevocably assigns to the applicable Assignee Party, and agrees to irrevocably assign to the applicable Assignee Party, all of its and the other members of the Assignor Group's rights, title and interest in and to any and all Intellectual Property Rights owned by the Assignor Party or another member of the Assignor Group that meets one or more of the following descriptions: (a) the Intellectual Property Rights are Requester Foreground IPR conceived or created in the course of services concerning which the Assignee Party or another member of the Assignee Group was the Requester, and the Assignor Party or another member of the Assignor Group was the Performer; or (b) the Intellectual Property Rights are Performer Foreground-Delivered IPR conceived or created in the course of services concerning which the Assignee Party or another member of the Assignee Group was the Requester, and the Assignor Party or another member of the Assignor Group was the Performer; or + +7 + + + + + +(c) the Intellectual Property Rights are Performer Foreground-Undelivered IPR conceived or created in the course of services concerning which the Assignor Party or another member of the Assignor Group was the Requester, and the Assignee Party or another member of the Assignee Group was the Performer (collectively, "Assigned Intellectual Property Rights"). ARTICLE III + +LICENSING OF INTELLECTUAL PROPERTY RIGHTS + +3.1 Licensed Intellectual Property Rights 3.1.1 License Grants by a Licensor Party. Subject to Section 3.2, a Licensor Party, on behalf of itself and the other members of the Licensor Group, and solely to the extent the Licensor Party or another member of the Licensor Group has the right to do so, hereby grants and agrees to grant to the applicable Licensee Party and the other members of the Licensee Group, subject to the field restriction of Section 3.1.2, a royalty-free, nonexclusive, perpetual, irrevocable, fully paid-up, worldwide right and license, with the right to sublicense as provided in Section 3.1.3, to Exploit Intellectual Property Rights that are owned by the Licensor Party or another member of the Licensor Group immediately following the assignments pursuant to Article II and meet one or more of the following descriptions with respect to the relevant Licensee Party: (a) the Intellectual Property Rights are rights under Licensed Patents or other Intellectual Property Rights that, in each case, as of the Effective Time, are either (A) used in connection with, or necessary for the ongoing conduct of, the current business of the Licensee Party or another member of the Licensee Group, or (B) Contemplated to be Used in the business of the Licensee Party, or another member of the Licensee Group, in the Licensee Group Field; provided, however, that the license granted in this Section 3.1.1(a) does not apply to the Intellectual Property Rights received under or otherwise governed by an Excluded Agreement; and/or (b) the Intellectual Property Rights are embodied in an invention, or proposed invention, that is both (i) described in a Patent or Invention Disclosure held by the Licensor Party or another member of the Licensor Group and (ii) conceived by at least one inventor who, at the time of conception, was employed by a member of the Licensee Group, a non-inclusive list of which inventions and proposed inventions are provided in Schedule 3.1.1(b), provided, however, that the license granted in this Section 3.1.1(b) does not apply to an invention conceived under or otherwise governed by an Excluded Agreement; and/or (c) the Intellectual Property Rights are subject to an assignment to the Licensor Party in Section 2.1.1(b) concerning Performer Foreground-Delivered IPR conceived or created in the course of services concerning which the Licensor Party or another member of the Licensor Group was the Requester and the Licensee Party or another member of the Licensee Group was the Performer; and/or + +8 + + + + + +(d) the Intellectual Property Rights are Performer Background IPR or Patent rights of the Licensor Party or another member of the Licensor Group and is necessary for the Licensee Party or another member of the Licensee Party to Exploit the Performer Foreground-Delivered IPR in the Licensee Group Field, provided, however, that the license granted in this Section 3.1.1(d) applies only to the extent necessary for the Licensee Party or another member of the Licensee Group to Exploit the Performer Foreground-Delivered IPR in the Licensee Group Field. (collectively, "Licensed Intellectual Property Rights"). 3.1.2 Field Restriction. The licenses granted in Section 3.1.1 are limited to, and a Licensee Party and the other members of the Licensee Group will have the right to Exploit, only the Licensed Intellectual Property Rights within the Licensee Group Field, except for the purposes of research and development at a stage encompassed within U.S. Department of Defense Technology Readiness Levels 1-6 or NASA Technology Readiness Levels 1-6; provided that (a) such research is not intended for use outside the Licensee Group Field, and (b) in the course of research conducted for a third party outside the Licensee Group Field, neither the Licensee Party nor any member of the Licensee Group (nor any of their respective officers, directors, employees, contractors, agents or sublicensees) shall disclose such Intellectual Property Rights to the third party. 3.1.3 Sublicense of Licensed Intellectual Property Rights. A Licensee Party or another member of the Licensee Group may sublicense its rights in Licensed Intellectual Property Rights hereunder, solely in support of its respective businesses (and not independent of its current or future products and related services). In all cases in which the exercise of sublicense rights hereunder reasonably requires disclosure of Licensed Intellectual Property Rights to a third party, the applicable member of the Licensee Group will disclose such Licensed Intellectual Property Rights (a) solely on a "need to know" basis, (b) provided that the Person to receive Licensed Intellectual Property Rights first agrees in writing to terms of confidentiality and non-use at least as restrictive as those provided in this Agreement, and (c) provided that the Licensee Party ensures the performance of, and accepts joint and several responsibility for the performance by each of the sublicensees of, the obligations of the Licensee Party and the other members of the Licensee Group under this Agreement. 3.1.4 Improvements. Each of the licenses granted in Section 3.1.1, subject to the restrictions of Section 3.1.2 and Section 3.1.3, includes the right of a Licensee Party and other members of the Licensee Group to make improvements to such Licensed Intellectual Property Rights. Neither a Licensor Party nor any member of the Licensor Group will have any rights to any such improvements, and as between a Licensee Party and a Licensor Party, the Licensee Party or applicable member of the Licensee Group will own all such improvements made by the Licensee Party or such member of the Licensee Group to Licensed Intellectual Property Rights. 3.1.5 No Implied Licenses. To the extent Intellectual Property Rights of a Party or member of a Party Group are not expressly granted in this Agreement, they are hereby expressly reserved to the Party or member of the Party Group. Without limiting the generality of the immediately preceding sentence, no express grant by a Licensor Party in this Agreement of + +9 + + + + + +license rights in certain Intellectual Property Rights shall be construed as implying the grant of any rights by the Licensor Party or another member of the Licensor Group in any other Intellectual Property Rights held by the Licensor Party or another member of the Licensor Group. 3.2 Reserved Intellectual Property Rights. Specific reservations shall apply to certain Intellectual Property Rights as set forth in Schedule 3.2. 3.3 No Rescission. The provisions of this Agreement, including the license rights provided in this Article III, shall not be terminable or revocable for any reason. In the event of any breach of this Agreement, the sole remedy of the non-breaching Party will be to seek monetary damages or equitable relief, including specific performance, as provided in Article VII, that does not involve a rescission or termination of any of the provisions of this Agreement (including the license rights provided in this Article III), and each Party irrevocably waives the right to seek any termination or rescission of any such provisions or rights. ARTICLE IV + +TRADEMARKS + +4.1 Ownership of United Technologies Trademarks. 4.1.1 Notwithstanding any other provision of this Agreement to the contrary, as between UTC, on the one hand, and Otis, Carrier and other members of the Otis Group and the Carrier Group, on the other, all rights in and to the United Technologies Trademarks, including all goodwill appurtenant thereto, are owned and shall be owned solely and exclusively by UTC. Without limiting the foregoing, and subject to Section 4.2, Otis and Carrier, on behalf of themselves and the other members of, respectively, the Otis Group and the Carrier Group, hereby irrevocably assign to UTC, and agree and promise to assign to UTC, (a) any and all rights, title and interest in and to the United Technologies Trademarks, including all goodwill appurtenant thereto held by them and the other members of the Otis Group and the Carrier Group, and (b) any and all registrations and applications for registration of Trademarks consisting of or containing any of the United Technologies Trademarks, anywhere in the world, to which Otis, Carrier or another member of the Otis Group or the Carrier Group holds a legal or equitable interest as of the Effective Time. Without limitation, the foregoing assignment and promise of assignment includes the right to sue and recover damages for past and future infringements of the United Technologies Trademarks and to bring any proceeding in the United States Patent and Trademark Office or any equivalent agency or governing body in any other country for cancellation, opposition, or other proceeding in connection with the United Technologies Trademarks. Except as expressly stated in Section 4.2, none of Otis, Carrier or any other member of the Otis Group or the Carrier Group shall have any right, title or interest in or to any of the United Technologies Trademarks, and any and all use of the United Technologies Trademarks, whether or not authorized pursuant to Section 4.2, shall inure solely and exclusively to UTC for all purposes. + +10 + + + + + +4.1.2 Otis and Carrier, on behalf of themselves and the other members of, respectively, the Otis Group and the Carrier Group, agree and promise to assist UTC and the other members of the UTC Group, at UTC's request, in UTC's discretion and at UTC's cost, in applying for, registering, maintaining, renewing, demonstrating use of, recording UTC's and the other members of the UTC Group's rights in, and otherwise perfecting, and defending and enforcing against third party infringers, the rights of UTC and the other members of the UTC Group in the United Technologies Trademarks and all goodwill associated therewith, including executing, verifying, acknowledging and delivering any and all documents, including any instruments of transfer and recordable assignments, and confirmations of use, and performing such other acts deemed necessary in the reasonable opinion of UTC. 4.1.3 Otis and Carrier, on behalf of themselves and the other members of, respectively, the Otis Group and the Carrier Group, agree and promise not to (a) challenge in any jurisdiction or venue the right or title of UTC or any other members of the UTC Group in and to any United Technologies Trademark, or the validity or enforceability of any United Technologies Trademark or any registration thereof, or (b) register or renew, attempt to register or renew, or assist a Person other than UTC or a member of the UTC Group in registering or renewing, any United Technologies Trademark. 4.2 Use of United Technologies Trademarks 4.2.1 Except as expressly provided in this Section 4.2, after the Effective Time, none of Otis, Carrier or any other members of the Otis Group or the Carrier Group shall use, or have the right to use, any of the United Technologies Trademarks. 4.2.2 Without limitation, Otis and Carrier as promptly as reasonably practicable (but in any case within six (6) months of the Effective Time) shall cause each member of, respectively, the Otis Group and the Carrier Group having a corporate name that includes any of the United Technologies Trademarks to apply to change its corporate name to a name that does not include any of the United Technologies Trademarks, including, within six (6) months of the Effective Time, by making any legal filings in each relevant jurisdiction necessary to effect such change worldwide. 4.2.3 UTC, on behalf of itself and the other members of the UTC Group, hereby grants to Otis, Carrier and the other members of the Otis Group and the Carrier Group a limited, non-exclusive, non-transferable, personal and nonsublicensable right to continue temporarily to use, following the Effective Time, any United Technologies Trademark it is using immediately prior to the Effective Time, solely to the extent of such pre- Separation use and in accordance with product quality standards and programs in place at the respective member of the Otis Group or the Carrier Group immediately prior to the Effective Time, and strictly in accordance with this Section 4.2.3; provided that Otis and Carrier shall, and shall cause each of its respective Affiliates (including, after the Effective Time, the members of, respectively, the Otis Group and the Carrier Group) (a) not to hold itself out as having any affiliation with UTC or any member of the UTC Group (except to the extent a third party may infer such affiliation merely due to the limited use of the United Technologies Trademarks as contemplated herein), and (b) to use diligent efforts to eliminate use of the United Technologies Trademarks. In any event, as soon as practicable after the Effective Time, and in any event within three (3) years thereafter, Otis and + +11 + + + + + +Carrier shall, and shall cause each of its respective Affiliates (including, after the Effective Time, the members of, respectively, the Otis Group and the Carrier Group), and any of its licensees or its respective Affiliates' licensees, to (a) cease and discontinue use of all United Technologies Trademarks, and (b) complete the removal of the United Technologies Trademarks from all of their respective products, signage, vehicles, properties, technical information, stationery and promotional or other marketing materials and other assets of Otis, Carrier and the other members of the Otis Group and the Carrier Group. Except for the limited, temporary license granted in this Section 4.2.3, neither UTC nor any other member of the UTC Group grants any right or license hereunder, express or implied, to use any United Technologies Trademarks. 4.3 Special Trademark Provisions. Special provisions concerning Trademarks are provided in Schedule 4.3. ARTICLE V + +EXCLUDED AGREEMENTS + +5.1 No Change to Excluded Agreements. The Parties do not intend by this Agreement to amend or otherwise change the Intellectual Property Rights or other provisions of any Excluded Agreement. Intellectual Property Rights provided, received or created pursuant to an Excluded Agreement will not constitute Licensed Intellectual Property Rights, and, with respect to the applicable parties thereto, will continue to be subject to any licenses, permissions or restrictions granted or imposed in the respective Excluded Agreement in accordance with its terms. ARTICLE VI + +CONFIDENTIALITY + +6.1 Received Information and Materials. The Parties acknowledge that members of each Party Group currently are in possession of information and materials f members of the other two Party Groups, which may include designs, drawings, specifications, technical data and other data, databases, formulae, algorithms and mathematical embodiments, plans, software, proposals, processes, procedures, manufacturing techniques, and business methods, and some of which may be included in the Licensed Intellectual Property Rights. With respect to a receiving Party, such information will be referred to individually or collectively as "Received Information and Materials," provided that Received Information and Materials will not include information disclosed under any Excluded Agreement. 6.2 Confidential Information. All Received Information and Materials that are identified as or are of the type generally considered as confidential or proprietary or that have historically been subject to reasonable confidentiality and proprietary protections, and any communications or information provided after the Effective Time pursuant to this Agreement among members of the different Party Groups, will be deemed confidential and proprietary information of the Person that provided it, unless the information (a) is or becomes generally available to the public other than as a result of a disclosure in breach of this Agreement; (b) is rightfully available to or known by the receiving Party prior to receipt by the receiving Party + +12 + + + + + +without any obligation of confidentiality; (c) is received by the receiving Party from a third party, provided that the third party is not known by the receiving Party, after reasonable inquiry, to be in breach of any obligation of confidentiality; or (d) was independently developed by the receiving Party, without violating any contractual or legal obligation ("Confidential Information"). 6.3 Obligations. With respect to Confidential Information in its possession, custody or control, a receiving member of a Party Group will: (a) hold all Confidential Information in confidence, using the same degree of care such receiving member uses to protect its own confidential information of a similar nature, but in no event less than a reasonable degree of care, including sharing Confidential Information internally only on a "need to know" basis, (b) not disclose Confidential Information to any third party, other than as permitted with respect to Licensed Intellectual Property Rights pursuant to Section 3.1.3, and (c) use Confidential Information only to the extent authorized. 6.4 Termination of UTC NDA. Upon the Effective Time, (a) the Amended and Restated Nondisclosure Agreement, by and between United Technologies Companies, dated July 26, 2012 (the "UTC NDA"), will terminate as among UTC and the other members of the UTC Group, Otis and the other members of the Otis Group, and Carrier and the other members of the Carrier Group, (b) the information disclosed under the UTC NDA (i) will be deemed Received Information and Materials and Confidential Information under this Agreement, and (ii) will be licensed hereunder for use by UTC and the other members of the UTC Group, Otis and the other members of the Otis Group, Carrier and the other members of the Carrier Group, solely to the extent it is Licensed Intellectual Property Rights granted to UTC and the other members of the UTC Group, Otis and the other members of the Otis Group or Carrier and the other members of the Carrier Group, respectively, and (c) notwithstanding paragraph 3 of the UTC NDA, such information disclosed thereunder will continue to be protected for as long as it remains Confidential Information. ARTICLE VII + +LIMITATIONS AND DISCLAIMERS + +7.1 Subsequent Delivery of Intellectual Property Rights. 7.1.1 For a period of six (6) months after the Effective Time, upon written request by an Assignee Party or a Licensee Party, and solely to the extent the Assignor Party or another member of the Assignor Group or the Licensor Party or another member of the Licensor Group, respectively, has the right to do so, the Assignor Party or the Licensor Party, respectively, shall use commercially reasonable efforts to provide (and to cause other members of the Assignor Group or the Licensor Group, respectively, to provide) to the requesting Assignee Party or the Licensee Party, respectively, copies of tangible embodiments of the Assigned Intellectual Property Rights and the Licensed Intellectual Property Rights, respectively, in the possession of a member of the Assignor Group or the Licensor Group, respectively, and not in the possession of a member of the Assignee Group or the Licensee Group, respectively, upon the Effective Time, to the extent that both (a) such Assigned Intellectual Property Rights or such Licensed Intellectual Property Rights, respectively, are necessary for the ongoing conduct of the current + +13 + + + + + +business of the requesting Assignee Party or another member of the Assignee Group or the requesting Licensee Party or another member of the Licensee Group, respectively, or was in use in such business as of the Effective Time, and (b) such tangible embodiments are reasonably necessary for the use of such Assigned Intellectual Property Rights or such Licensed Intellectual Property Rights, respectively, identified in Section 7.1.1(a). 7.2 No Additional Obligations. Except as expressly provided in this Agreement, this Agreement does not create any obligation on the part of any of the Parties to provide or create any of the following with respect to the Intellectual Property Rights owned, transferred, granted or licensed under this Agreement: (a) explanations, corrections, revisions, improvements, upgrades, technical assistance, maintenance, installation, debugging, or any other support; or (b) tangible embodiments, documents, information, software, data or any other items, deliverables or services. 7.3 DISCLAIMER. EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, THE SDA OR ANY OTHER ANCILLARY AGREEMENT, (A) EACH OF THE PARTIES CONVEYS INTELLECTUAL PROPERTY RIGHTS UNDER THIS AGREEMENT SOLELY ON AN "AS IS," "WHERE IS" AND "WITH ALL FAULTS" BASIS, AND (B) NONE OF THE PARTIES MAKES, AND EACH HEREBY EXPRESSLY DISCLAIMS, ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND WITH RESPECT TO SUCH INTELLECTUAL PROPERTY RIGHTS, WHETHER EXPRESS OR IMPLIED, INCLUDING ANY REPRESENTATION OR WARRANTY WITH RESPECT TO MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, COMPLETENESS OR SUFFICIENCY, OR EXPORTABILITY, OR WITH RESPECT TO THE VALIDITY, SCOPE, ENFORCEABILITY OR NONINFRINGEMENT OF ANY OF SUCH INTELLECTUAL PROPERTY RIGHTS. FOR AVOIDANCE OF DOUBT, THE REPRESENTATIONS AND WARRANTIES PROVIDED IN THE SDA ARE NOT AFFECTED BY THIS DISCLAIMER. 7.4 Limitations of Liability. Except in connection with a Party's willful and intentional breach of this Agreement or fraud, in no event shall any Party or its Affiliates, under any circumstances, be liable or obligated in any manner to another Party or its Affiliates for any consequential, special, incidental, exemplary, indirect, punitive or similar damages, or for any loss of future revenue, profits or income, or for any diminution in value damages measured as a multiple of earnings, revenue or any other performance metric arising out of or relating to this Agreement or the transactions contemplated in this Agreement, even if such Party or its Affiliate is informed in advance of the possibility of such damages occurring and regardless of whether or not the damages were foreseeable and regardless of the theory or cause of action upon which any damages might be based. This limitation is separate and independent of any other remedy limitations and shall not fail if any such other limitation fails. The foregoing shall not be deemed to modify or limit any rights or remedies to the extent arising under the SDA, any other Ancillary Agreement or any Excluded Agreement. + +14 + + + + + +ARTICLE VIII + +GOVERNING LAW AND DISPUTE RESOLUTION + +8.1 Governing Law. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to any conflict or choice-of-law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware. 8.2 Alternative Dispute Resolution. Any dispute, controversy or claim between or among the Parties (whether sounding in contract, tort, or otherwise) arising out of or resulting from this Agreement, including the meaning of its provisions or the performance of any such provisions by a Party, its breach, termination, invalidity or otherwise (each, a "Dispute") will be resolved in accordance with the procedures specified in this Article VIII, which will be the sole and exclusive procedure for the resolution of any such Dispute. 8.2.1 Negotiations. The Parties will attempt in good faith to resolve any Dispute promptly by negotiations among executives of the Parties who have authority to settle the Dispute. The disputing Party will give the other Party or Parties, as applicable, written notice of the Dispute. Within twenty (20) days after receipt of said notice, the receiving Party or Parties will submit to the other a written response. The notice and response will include: (a) a statement of each Party's position and a summary of the evidence and arguments supporting that position, and (b) the name and title of the executive who will represent that Party. The executives will meet at a mutually acceptable time and place within thirty (30) days of the date of the disputing Party's notice and thereafter as often as they reasonably deem necessary to exchange relevant information and to attempt to resolve the Dispute. 8.2.2 Arbitration. If a Dispute has not been resolved within sixty (60) days of the date of the disputing Party's notice, any Party desiring a non-negotiated resolution shall refer the Dispute to binding arbitration pursuant to the then-current commercial arbitration rules and supplementary procedures of commercial arbitration of the American Arbitration Association (the "AAA Rules"). The arbitral tribunal shall be composed of a single arbitrator appointed in accordance with the AAA Rules in any matter in which an injunction, specific performance or other equitable relief is not requested and the value of the relief any Party seeks (whether by claim or counterclaim) does not exceed three million United States dollars (US $3,000,000). In all other matters, including any matter in which an injunction, specific performance or other equitable relief is requested, the arbitral tribunal shall be composed of a panel of three (3) arbitrators appointed in accordance with the AAA Rules. The arbitration shall take place in New York, New York. Each Party will bear its own expenses (including attorneys' fees), and the Parties will share equally the compensation and expenses of the arbitrators and the arbitration. Any arbitration award will be final and shall be enforceable in any court of competent jurisdiction. 8.3 Confidentiality. All negotiations, and all statements made and documents provided or exchanged in connection with an arbitration under Section 8.2.2 will be confidential. Except with the prior written consent of the other Party or Parties in the Dispute, as applicable, none of the Parties will disclose the existence or content of the Dispute, or the results of any + +15 + + + + + +dispute resolution process, to third parties other than (a) as may be required by law or legal process after having provided the other Party or Parties with notice thereof and the opportunity to seek a protective order over such information, or (b) to outside counsel and tax, financial, and accounting professionals in connection with the Dispute. 8.4 Equitable Relief. The Parties acknowledge and agree that monetary damages (even if available) may not be an adequate remedy in the event that a Party does not perform the provisions of this Agreement in accordance with their specified terms or otherwise breaches any provisions of this Agreement. Accordingly, and notwithstanding any other provision of this Agreement, any Party will be entitled to seek from the arbitrator or arbitration tribunal, and the arbitrator or arbitration tribunal will be empowered to grant, an injunction, specific performance or other equitable relief (whether preliminary, permanent, temporary, conservatory or otherwise, and including temporary restraining orders) to prevent such breaches of this Agreement and to enforce specifically the terms hereof, in addition to any other remedy to which such Party is entitled at law or in equity. The Party alleging the breach shall not be required to provide any bond or other security in connection with any such award, but the Parties reserve all rights to otherwise contest the propriety of any award of injunctive relief. In addition, and notwithstanding any other provision of this Agreement, any Party will be entitled to seek in a court of competent jurisdiction an injunction, specific performance or other equitable relief to prevent breaches of this Agreement pending an arbitration under Section 8.2.2. ARTICLE IX + +GENERAL PROVISIONS + +9.1 Entire Agreement; Conflict Among Agreements. This Agreement, together with the SDA, the other Ancillary Agreements and the Exhibits and Schedules hereto and thereto, constitute the entire agreement among the Parties with respect to the subject matter of this Agreement and supersede any prior discussion, correspondence, negotiation, proposed term sheet, agreement, understanding or arrangement with respect to such subject matter, and there are no agreements, understandings, representations or warranties among the Parties other than those set forth or referred to in this Agreement with respect to such subject matter. In the event of any conflict between the provisions of this Agreement and the provisions of the SDA or any other Ancillary Agreement, the provisions of this Agreement shall control, provided, however, that (a) in the event of a conflict between the provisions of this Agreement and the provisions of the Transition Services Agreement, the conflicting provisions of the Transition Services Agreement shall control over the conflicting provisions of this Agreement, and (b) nothing in this Agreement limits any of the representations, warranties or indemnity obligations under the SDA or any other Ancillary Agreement. In the event of any conflict between the provisions of this Agreement and any agreement that was entered into at any time prior to the Effective Time between or among members of different Party Groups that is not an Excluded Agreement, the conflicting provisions of this Agreement shall control. 9.2 Assignment and Change of Control; Successor and Assigns 9.2.1 No Party may directly or indirectly sell, assign or otherwise transfer (whether by asset or stock sale, merger, reorganization or otherwise) any or all of its rights or + +16 + + + + + +delegate any or all of its obligations under this Agreement without the express prior written consent of the other Parties, except as follows: (a) Otis or Carrier may (i) freely sell, assign or otherwise transfer, in whole or from time to time in part, Assigned Intellectual Property Rights assigned to it hereunder; and (ii) sell, assign or otherwise transfer, in whole or from time to time in part, its rights and obligations under this Agreement (A) to any Affiliate of Otis or Carrier, respectively, (B) to any financing entity, in connection with the grant of a revocable security interest necessary for financing, or (C) to a Person acquiring (whether by asset or stock sale, merger, reorganization or otherwise) all or substantially all of the relevant business of Otis or Carrier, respectively, that agrees to be bound by the terms and conditions of this Agreement; but any such transfer or assignment will not relieve Otis or Carrier, respectively, of any of its obligations hereunder. (b) UTC may (i) freely sell, assign or otherwise transfer, in whole or from time to time in part, Assigned Intellectual Property Rights assigned to it hereunder; and (ii) sell, assign or otherwise transfer, in whole or from time to time in part, its rights under this Agreement (A) to any member of the UTC Group, (B) to any financing entity, in connection with the grant of a revocable security interest necessary for financing, or (C) to a Person acquiring (whether by asset or stock sale, merger, reorganization or otherwise) all or substantially all of the relevant business of UTC that agrees to be bound by the terms and conditions of this Agreement; but any such transfer or assignment will not relieve UTC of any of its obligations hereunder. 9.2.2 Any purported sale, assignment or other transfer in contravention of this Section 9.2 shall be null and void. 9.2.3 Subject to Section 9.2.1 and Section 9.2.2, this Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors, assigns and transferees. 9.3 Bankruptcy. All licenses granted under this Agreement will be deemed licenses of rights to intellectual property for purposes of Section 365(n) of the United States Bankruptcy Code and a licensee under this Agreement will retain and may fully exercise all of its rights and elections under the United States Bankruptcy Code. 9.4 Amendments and Waivers. This Agreement may not be modified or amended, except by an instrument or instruments in writing signed by the Party against whom enforcement of any such modification or amendment is sought. Any Party to this Agreement may, only by an instrument in writing, waive compliance by the other Parties with any term or provision of this Agreement on the part of such other Parties to this Agreement to be performed or complied with. The waiver by any Party to this Agreement of a breach of any term or provision of this Agreement shall not be construed as a waiver of any subsequent breach. No failure or delay by any Party in exercising any right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. Subject to Section 3.3, the rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law. + +17 + + + + + +9.5 Notice. All notices or other communications required or permitted hereunder by a Party shall be in writing to the other Parties at the address provided below (or at such other address as such Party may designate by notice pursuant to this Section 9.5), and shall be deemed given or delivered (a) when delivered personally against written receipt, (b) if sent by registered or certified mail, return receipt requested, postage prepaid, when received, and (c) when delivered by a nationally recognized overnight courier service, prepaid: To UTC: United Technologies Corporation 10 Farm Springs Farmington, CT 06302 Attention: Chief Intellectual Property Counsel To Otis: Otis Worldwide Corporation One Carrier Place Farmington, CT 06032 Attention: Chief Intellectual Property Counsel To Carrier: Carrier Global Corporation 13995 Pasteur Boulevard Palm Beach Gardens, FL 33418 Attention: Chief Intellectual Property Counsel + +9.6 Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any Party hereto. Upon such a determination, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the fullest extent possible. 9.7 Counterparts. This Agreement may be executed in one or more counterparts, and by the different Parties in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Agreement by electronic means shall be as effective as delivery of a manually executed counterpart of this Agreement. 9.8 Further Assurances. Each Party agrees, upon written request of another Party, to do all acts and execute, deliver and perform all additional documents, instruments and agreements, which may be reasonably required to implement the provisions and purposes of this + +18 + + + + + +Agreement; provided, however, that, except as expressly set forth in this Agreement, nothing in this Agreement shall be construed as obligating a Party or its Affiliates to deliver any additional Intellectual Property Rights, or any tangible embodiments of any Intellectual Property Rights, to another Party or its Affiliates. 9.9 Interpretation. For the purposes of this Agreement, (a) words in the singular shall be held to include the plural and vice versa, and words of one gender shall be held to include the other gender as the context requires; (b) references to the terms Article, Section, paragraph, Exhibit and Schedule are references to the Articles, Sections, paragraphs, Exhibits and Schedules to this Agreement, unless otherwise specified; (c) any capitalized terms used in any Exhibit or Schedule but not otherwise defined therein shall have the meaning as defined in this Agreement; (d) the terms "hereof," "herein," "hereby," "hereto" and derivative or similar words refer to this entire Agreement, including the Schedules and Exhibits hereto, and not to any particular provision thereof; (e) references to "$" shall mean U.S. dollars; (f) the word "including" and words of similar import when used in this Agreement shall mean "including without limitation," unless otherwise specified; (g) the word "or" shall not be exclusive; (h) references to "written" or "in writing" include in electronic form; (i) provisions shall apply, when appropriate, to successive events and transactions; (j) the Parties have each participated in the negotiation and drafting of this Agreement and if an ambiguity or question of interpretation should arise, this Agreement shall be construed as if drafted jointly by the Parties and no presumption or burden of proof shall arise favoring or burdening any Party by virtue of the authorship of any of the provisions in this Agreement; (k) references to any statute shall be deemed to refer to such statute as amended through the date hereof; (l) references to any Contract are to that Contract as amended, modified or supplemented from time to time in accordance with the terms hereof and thereof; (m) references to an Affiliate of a Party mean current and future Affiliates of such Party; (n) a reference to any Person includes such Person's successors and permitted assigns; (o) any reference to "days" shall mean calendar days, unless Business Days are expressly specified; and (p) when calculating the period of time before which, within which or following which any act is to be done or step taken pursuant to this Agreement, the date that is the reference date in calculating such period shall be excluded and if the last day of such period is not a Business Day, the period shall end on the next succeeding Business Day. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] [SIGNATURE PAGE FOLLOWS] + +19 + + + + + +IN WITNESS WHEREOF, this Agreement has been signed by or on behalf of each of the Parties as of the day first above written. UNITED TECHNOLOGIES CORPORATION By: /s/ Michael R. Dumais Name: Michael R. Dumais Title: Executive Vice President, Operations & Strategy OTIS WORLDWIDE CORPORATION + +By: /s/ Michael P. Ryan Name: Michael P. Ryan Title: Vice President, Controller CARRIER GLOBAL CORPORATION By: /s/ Kyle Crockett Name: Kyle Crockett Title: Vice President, Controller + +20 \ No newline at end of file diff --git a/full_contract_txt/PACIFICSYSTEMSCONTROLTECHNOLOGYINC_08_24_2000-EX-10.53-SPONSORSHIP AGREEMENT.txt b/full_contract_txt/PACIFICSYSTEMSCONTROLTECHNOLOGYINC_08_24_2000-EX-10.53-SPONSORSHIP AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..de369b8ccf837f9612f3bb321e5f8ad8851519b2 --- /dev/null +++ b/full_contract_txt/PACIFICSYSTEMSCONTROLTECHNOLOGYINC_08_24_2000-EX-10.53-SPONSORSHIP AGREEMENT.txt @@ -0,0 +1,37 @@ +EXHIBIT 10.53 + + SPONSORSHIP AGREEMENT for Boxing Event in China, on April 22, 2000 + +American Champion Media, Inc. ("ACM"), a Delaware company with headquarters at 1694 The Alameda, San Jose, CA 95126, U.S.A., is the host and producer of a boxing event to take place at the Tian He Stadium in Guangzhou, China (the "Event"). This Event is scheduled to take place on April 22, 2000, and this Sponsorship Agreement (the "Agreement") dated as of April 14, 2000 is made by and between Shun Li De Commerce & Trading Ltd ("SLD") a Beijing company, with headquarters at Xin Xing Dong Xiang, Bldg 1 Suite 1413, Xi Cheng District, Beijing, China (the "Sponsor") and ACM. + +1) The Sponsor wishes to become a sponsor of the Event, a production of ACM, to take place on April 22, 2000 at the Tian He Stadium in Guangzhou, China. + +2) As a sponsor of the Event, the Sponsor is entitled to the following sponsorship components: + +* Two Floor Cards (12in x 66in) in prominent position for TV camera * Two Drapes over ropes (5in x 60in, with lettering within the middle 36") * Two Ring Side banners (200cm x 15cm) * One overhead banner (5ft x 8 ft) to be hung over boxing ring * Other handout materials for audience + +3) For the above sponsorship components, the Sponsor agrees to pay ACM a total amount of US$400,000.00. The amount is payable 180 days from the date of the Event. + +4) This is understood between the parties that SLD may resale all or some of the above sponsorship components to other buyers, provided that SLD shall submit third party display materials at least five days prior to the event for ACM's approval. + +5) ACM retains all of its rights under copyright and trademark laws pertaining to the Event's intellectual property, whether registered or unregistered, and any applications of the Event's logo, name, characters and likeness. Video and audio excerpts of the Event must have ACM's approval in writing prior to such use. The Sponsor shall retain all of its rights under copyright and trademark laws pertaining to any of its intellectual property. + +6) Display materials from the Sponsor must be delivered to the Tian He Stadium at least two days prior to the event. + +7) All covenants, promises and agreements by or on behalf of the parties contained in this Agreement shall be binding upon and shall inure to the benefit of the successors and assigns of the parties; but nothing in this Agreement, expressed or implied is intended to confer on any party the right to assign its rights or obligations hereunder. Nothing in this Agreement, whether expressed or implied, is intended to confer any rights or remedies under or by reason of this Agreement on any persons other than the parties to it and their respective successors and assigns, nor is anything in this Agreement intended to relieve or discharge the obligation or liability of any third persons to any party to this Agreement, nor shall any provision give any third person any right of subrogation or action over or against any party to this Agreement. + +8) This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of California and the laws of Hong Kong. In the event of a dispute, the parties shall seek mediation at a third country mutually agreed upon. + +9) This Agreement sets forth the entire agreement of the parties hereto with regard to the subject matter hereof and supersedes and replaces all prior agreements, understandings and representations, oral or written, with regard to such matter. + +10) This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. + +IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed as of the date hereby written. + +/s/ Anthony K. Chan + +Anthony K. Chan Chief Executive Officer American Champion Media, Inc. + +/s/ He, Li + +He, Li Chief Financial Officer Shun Li De Commerce & Trading Ltd \ No newline at end of file diff --git a/full_contract_txt/PACIRA PHARMACEUTICALS, INC. - A_R STRATEGIC LICENSING, DISTRIBUTION AND MARKETING AGREEMENT .txt b/full_contract_txt/PACIRA PHARMACEUTICALS, INC. - A_R STRATEGIC LICENSING, DISTRIBUTION AND MARKETING AGREEMENT .txt new file mode 100644 index 0000000000000000000000000000000000000000..1a45b84233506a642b571c973e9c63893453f159 --- /dev/null +++ b/full_contract_txt/PACIRA PHARMACEUTICALS, INC. - A_R STRATEGIC LICENSING, DISTRIBUTION AND MARKETING AGREEMENT .txt @@ -0,0 +1,1999 @@ +Exhibit 10.13 + +Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. + +DATED: OCTOBER 15, 2009 + +PACIRA PHARMACEUTICALS, INC. + +and + +EKR THERAPEUTICS, INC. AMENDED AND RESTATED STRATEGIC LICENSING, DISTRIBUTION AND MARKETING AGREEMENT + + + + + +THIS AMENDED AND RESTATED STRATEGIC LICENSING, DISTRIBUTION AND MARKETING AGREEMENT (the "Agreement") is made on October 15, 2009 (the "Agreement Date") and is effective as of the Effective Date (as defined below), between: PACIRA PHARMACEUTICALS, INC. (F/K/A SKYEPHARMA, INC.) a company incorporated in the state of California whose principal place of business is 10450 Sciences Center Drive, San Diego, California 92121 USA ("PPI"); and EKR THERAPEUTICS, INC., a company incorporated in the state of Delaware whose principal place of business is 1545 Route 206 South, Third Floor, Bedminster, New Jersey 07921 ("EKR"). + +Recitals + +PPI owns and has all right title and interest in or has acquired exclusive rights to the PPI IP (as defined below), the Trademark (as defined below) and the Product (as defined below). + +EKR has, among other things, specialized knowledge and expertise in relation to the marketing and sale of pharmaceutical products. + +Pursuant to that certain Strategic Licensing, Distribution and Marketing Agreement between EKR and PPI dated as of August 10, 2007 (the "Original Agreement"), PPI granted and EKR acquired the exclusive right and license to sell, offer to sell, distribute and market the Product in the Territory (as defined below) in the Field (as defined below). + +EKR and PPI desire to amend and restate the Original Agreement in its entirety as set forth herein in order to provide for: (i) certain changes to the financial terms set forth in the Original Agreement, (ii) the transfer of Marketing Authorizations (as defined below) from PPI to -1- + + + + + +EKR, and EKR's assumption of obligations thereunder, (iii) the transfer of title to certain manufacturing equipment from PPI to EKR and the lease of such equipment back from EKR to PPI and (iv) certain other changes as are set forth herein; all of the foregoing subject to and in accordance with the terms and conditions of this Agreement. + +NOW THEREFORE, in consideration of the following mutual agreements and covenants set forth herein and intending to be legally bound hereby, PPI and EKR (each, a "Party" and collectively, the "Parties") acknowledge and agree that this Agreement shall amend and supersede in its entirety the Original Agreement and hereby agree as follows: + +Operative Provisions + + + + + + -2- + +1. Definitions 1.1 As used in this Agreement, the following words and expressions have the following meanings: + +"Affiliate" + + + +With respect to any Party to this Agreement shall mean any company, corporation, firm, individual or other entity which Controls, is Controlled by or is under common Control with such Party to this Agreement for only so long as such Control exists; + + + + + + -3- + +"Applicable Laws" + + + +Shall mean all laws, rules and regulations regarding the manufacture, packaging, labeling, import, export, storage, distribution, representation, promotion, marketing and sale of the Products including but not limited to the Federal Food, Drug and Cosmetic Act of 1938, as amended ("FD&C Act") and the Controlled Substances Act, as amended (21 U.S.C. §801 et seq.), or as defined in attendant regulations promulgated under authorities granted by the FD&C Act, together with any equivalent laws, rules, regulations, codes or guidelines having effect in any jurisdiction in the Territory; + +"Calendar Year" Shall mean the period of twelve months commencing on 1st January in any year, and each consecutive period of twelve months thereafter during the Term; + +"cGMP" Means Current Good Manufacturing Practices pursuant to 21 CFR Parts 210 and 211, as may be amended from time to time; + +"Commercial Launch" + + + +Shall mean the date of the first arm's length sale by EKR to an unaffiliated Third Party customer for commercial use of Product in a country within the Territory following the grant of Marketing Authorization and any necessary pricing approval in that country; + +"Commercialization Committee" Shall mean the committee to be set up under the terms of Article 5; + + + + + + -4- + +"Competing Product" + + + +Means any [**] ([**] hours) [**] preparation (other than the Product) available in a country in the Territory which competes or would compete directly with the Product. For the avoidance of doubt, the definition of "Competing Product" does not include Depobupivacaine or any improvement thereto; + +"Confidential Information" + + + +Means all confidential information, data and materials in whatever form disclosed by or on behalf of one Party or its Affiliates to the other Party or its Affiliates including, without limitation, the terms of this Agreement, data, formulae, unpublished patent disclosures, processes, protocols, marketing studies, sales information, specifications and know-how, (and, in the case of EKR's Confidential Information, EKR's marketing plans and EKR's sales forecasts), but excluding information which either Party can establish by written documentation: + +(i) at the time of disclosure, is in the public domain or is public knowledge; + +(ii) after disclosure, becomes part of the public domain by publication, except by breach of any obligation of confidentiality by a Party hereto or an Affiliate of such Party; + +(iii) was already in its possession at the time of its receipt and was not acquired directly or indirectly from the other Party or its Affiliates; or + +(iv) received from Third Parties who were lawfully entitled to disclose such information; + + + + + + -5- + +"Control" + + + +Means in relation to any Party or an Affiliate the possession directly or indirectly, of the power to direct or cause the direction of the management and policies of such firm, person or entity, by contract or otherwise, or the ownership either directly or indirectly of 50% or more of the voting securities of such Party; + +"Copyrights" + + + +Means (i) the copyright registrations and applications for registration identified on Schedule III, (ii) works of authorship whether or not copyrightable and (iii) any other copyrights and works, together with all common law rights, used or held for use by PPI or any of its Affiliates in connection with the Products in the Territory (including, but not limited to, any license or other rights of PPI or any of its Affiliates, whether as a licensor, licensee or otherwise relation to any of the foregoing); + +"Current Base Price" Means the Product's current (as of the Effective Date) net average selling price of $[**] ([**] mg) and $[**] ([**] mg); + +"DEA" Shall mean the United States Drug Enforcement Administration and any successor thereto performing similar functions; + +"Distribution Rights" Shall have the meaning set forth in Section 2.1 hereof; + +"Domain Name" Shall mean Depodur.com and any other domain names owned or licensed by PPI related to the Product set forth on Schedule IV hereto; + + + + + + -6- + +"EKR Improvement" Means any Improvement generated, conceived, reduced to practice or other created during the Term by EKR or any of its Affiliates. + +Endo/PPI Unit Sales Shall have the meaning set forth in Section 3.19 hereof; + +Endo Product Means: (i) DepoDur Injectible Liposomal Epidural 10 mg/ml NDC # [**]; and (ii) DepoDur Injectible Liposomal Epidural 15 mg/1.5 ml NDC # [**]; + +"Effective Date" Means August 10, 2007; + +"FDA" Means the United States Food and Drug Administration or any successor thereto performing similar functions; + +"Field" Means the management of post-operative pain following major orthopedic, abdominal or pelvic surgery; + + + + + + -7- + +"Force Majeure" + + + +Means in relation to either Party, any cause affecting the performance of this Agreement or the Supply Agreement arising from or attributable to any acts, events, non-happenings, omissions or accidents beyond the reasonable control of the Party to perform and in particular but without limiting the generality thereof shall include strikes and labor disturbances, lock-outs, industrial action, civil commotion, riot, invasion, war, threat of or preparation for war, terrorist activity, fire, explosion, storm, flood, earthquake, subsidence, epidemic or other natural physical disaster, impossibility of the use of railways, shipping, aircraft, motor transport, or other means of public or private transport, failure or suspension of utilities, unavailability, shortage or interruption in the supply of raw material, and political interference with the normal operation of either Party; + +"Improvements" + + + +Means any discovery, development, improvement, know-how or patent relating to the Product generated, conceived, reduced to practice or otherwise created during the Term by PPI or EKR (or any Affiliate of PPI or EKR); + +"Joint Improvements" Means any Improvements generated, conceived, reduced to practice or other created jointly by EKR and PPI or their Affiliates. + +"Known In-Channel Product Units" Shall have the meaning set forth in Section 3.19 hereof; + + + + + + -8- + +"Marketing Authorization" + + + +Means the new drug application ("NDA") and all other necessary regulatory and governmental approvals by a Regulatory Authority or other governmental body required to market and sell the Product in any country of the Territory, including, but not limited to, those set forth on Schedule V hereto; + +"Marketing Plan" Means the plan for the marketing, distribution and sale of the Product in the Territory submitted to the Commercialization Committee in accordance with Section 5.4; + + + + + + -9- + +"Net Sales" + + + +Means total gross sales of Product invoiced by EKR, its Affiliates and sub-distributors in arms length sales to Third Parties, less the following amounts actually incurred, deducted, accrued or allowed: + +(i) transport, freight and insurance costs which are separately stated; + +(ii) sales and excise taxes and duties; + +(iii) normal and customary trade, quantity and cash discounts, rebates and chargebacks; + +(iv) amounts repaid or credited for properly rejected, returned or recalled goods or resulting from retroactive price adjustments related to the Product; + +(v) amounts incurred or resulting from government (or an agency thereof) mandated or managed care or other rebate programs now existing or implemented hereafter; + +(vi) any other identifiable amounts included in gross sales of the Product that were or ultimately will be credited and that are substantially similar to those listed hereinabove; and + +(vii) any other deductions allowed by GAAP which effectively reduce the net selling price of Product; + +"PPI Improvement" Means any Improvement generated, conceived, reduced to practice or otherwise created during the Term by PPI or any of its Affiliates; + + + + + + -10- + +"PPI IP" Means the Copyrights, PPI Know-How, PPI Patents and PPI Improvements; and PPI's interest in Joint Improvements; + +"PPI Know-How" + + + +Means all information, procedures, instructions, techniques, data, technical information, knowledge and experience (including, without limitation, toxicological, pharmaceutical, clinical, non-clinical and medical data, health registration data and marketing data), designs, dossiers (including, without limitation, manufacturing assay and quality control dossiers) manufacturing formulae, processing specifications, sales and marketing materials and technology relating to the Product; + +"PPI Patents" + + + +Means those patents set out in Schedule I which cover the Products and such other patents as PPI may include from time to time, including additions, divisions, confirmations, continuations-in-part, substitutions, re-issues, re-examinations, extensions, registrations, patent terms extensions, supplementary protection certificates and renewals of any of the above or any other patents owned or licensed by PPI subsequent to the Effective Date which cover the Products or any Improvements; + + + + + + -11- + +"Product(s)" + + + +Means: (i) DepoDur Injectible Liposomal Epidural [**] mg/ml [**]; (ii) DepoDur Injectible Liposomal Epidural [**] mg/[**] ml [**]; (iii) such other presentations and dosages which hereafter receive Marketing Authorization in any country of the Territory; in each case for epidural administration presented in Vials or other approved vessels, appropriately packaged and labeled for sale to end users and (iv) any and all Improvements of the items listed in clauses (i) through (iii). + +"Promotional Materials" Means promotional, sales, marketing, educational and training materials which are necessary to support the marketing of the Products; + +"Quarter" Means a three month period ending on the last day of March, June, September or December in any Calendar Year; + +"Regulatory Authority" Means any competent regulatory authority or other governmental body (for example, but not by way of limitation the FDA and DEA) responsible for granting a Marketing Authorization in the Territory; + +"Royalty Cap" Shall have the meaning set forth in Section 6.4; + +"Supply Agreement" + + + +Means: (i) with respect to periods between the Effective Date and the Agreement Date, that certain Supply Agreement entered into by the Parties on the Effective Date and (ii) with respect to periods on or after the Agreement Date, that certain Amended and Restated Supply Agreement entered into by the Parties on the Agreement Date (as may be amended from time to time); + + + + + + + + + + + + + + + + -12- + +"Term" Means the term of this Agreement as set out in Section 15; + +"Territory" Means each of the countries and territories listed in Schedule VII; + +"Third Party" Means any company, corporation, firm, individual or other entity but excluding a Party to this Agreement or an Affiliate; + +"Trademarks" Means those Trademarks registered or applied for set out in Schedule II; + +"Transition Services and Inventory Agreement" Means that certain Transition Services and Inventory Agreement entered into between the Parties on the Effective Date; + +"Vial" Means a vial containing the Product supplied to EKR in presentations and dosages and other relevant terms set out in the Supply Agreement; + +"Year" Means the period of twelve months commencing on the first Commercial Launch of the Product in the Territory, and each consecutive period of twelve months thereafter during the Term. 1.2 In this Agreement, unless the context requires otherwise: (a) the headings are included for convenience only and shall not affect the construction of this Agreement; + + (b) references to "persons" includes individuals, bodies corporate (wherever incorporated), unincorporated associations and partnerships; (c) words denoting the singular shall include the plural and vice versa; (d) words denoting one gender shall include each gender and all genders; and + + + + + + + + + + + + + + + + -13- + + (e) any reference to an enactment or statutory provision is a reference to it as it may have been, or may from time to time be amended, modified, consolidated or re-enacted. 1.3 The Schedules comprise part of and shall be construed in accordance with the terms of this Agreement. In the event of any inconsistency between the Schedules and the terms of this Agreement, the terms of this Agreement shall prevail. + +2. Grant of Rights 2.1 Retention of EKR. Subject to the terms of this Agreement, PPI hereby appoints EKR and EKR agrees to be retained as the exclusive distributor, and Authorized Distributor of Record, of the Products in the Field in the Territory during the Term to market, distribute, warehouse and sell the Products. EKR shall have the right to appoint sub-distributors hereunder in each country of the Territory. 2.2 Grant of License and Distribution Rights. PPI hereby grants EKR the exclusive right and license (with the right to sublicense) to use, market, promote, sell, distribute and warehouse the Products (the "Distribution Rights") in the Field in the Territory during the Term, as well as to make or have made the Products anywhere in the world for import or sale in the Field in the Territory in each case, under the PPI IP provided that PPI retains all rights necessary to manufacture and supply the Products to EKR in accordance with this Agreement and the Supply Agreement. Such grant by PPI shall include the right of EKR to market the Product in the Territory during the Term as an EKR product using in addition to the Trademarks, EKR's own trademarks, trade dress, trade names and other proprietary designations in combination with the Trademarks. 2.3 Grant of Trademark Rights. PPI hereby grants to EKR a royalty free and exclusive license (with the right to sublicense) to use the Trademarks in the Territory solely in connection with the exercise of the Distribution Rights in the Territory during the Term (and thereafter as set forth in Section 17.4) and EKR shall market and sell the Products under the Trademarks. For the avoidance of doubt, the term "exclusive" for the + + + + + + + + + + + + + + -14- + + + +purposes of Sections 2.1, 2.2 and 2.3 means to the exclusion of all others, including PPI and its Affiliates, except to the extent necessary to enable PPI to perform its specific obligations under this Agreement and the Supply Agreement. Notwithstanding the foregoing, nothing contained herein shall prohibit PPI from utilizing the Trademarks in the Territory in connection with its business for the sole purpose of signifying that PPI is the manufacturer of the Products for EKR. 2.4 Transfer of Domain Names. On the Effective Date, PPI has transferred the Domain Names to EKR for use in connection with the exercise of the Distribution Rights. PPI has provided EKR with reasonable assistance as was necessary to effectuate the transfer of the Domain Names. Upon any termination or expiration of this Agreement, EKR shall promptly transfer the Domain Names back to PPI. 2.5 Condition of Appointment. The acceptance of forecasts and orders for the Products (as provided in the Supply Agreement), and PPI's obligation to supply the Product to EKR shall at all times be conditioned by the Marketing Authorization for the Product being in force in the country of Territory to which such acceptance and order relates. + +3. Undertakings of PPI 3.1 Manufacturing Activities. Subject to Section 17.5, PPI shall manufacture and supply, or procure the manufacture and supply of, the Product in accordance with the terms and conditions of the Supply Agreement. 3.2 Transfer of Transferred NDA. Effective as of the Agreement Date, PPI hereby sells, transfers, conveys and assigns to EKR all right, title and interest in and to [**] (the "Transferred NDA"). Each Party shall, within five (5) business days after the Agreement Date, file with the FDA a notice letter, substantially in the form attached as Schedule XI(A) or Schedule XI(B) (as applicable), regarding the transfer to EKR of the Transferred NDA. PPI represents, warrants and covenants that: (i) prior to the Agreement Date, it has provided EKR with complete, up- to-date copies of the Transferred NDA and all material correspondence with Regulatory Authorities in the + + + + + + + + + + -15- + + + +Territory in connection with the Transferred NDA (including, but not limited to, any periodic and annual report submissions, and all adverse event reports and data) and (ii) on the Agreement Date, EKR shall receive sole ownership of, and good and valid title to, the Transferred NDA, free and clear of any liens and encumbrances. For the avoidance of doubt, nothing in this Agreement regarding the appointment of EKR as PPI's distributor of the Products shall be construed to diminish any rights of EKR as holder of the Transferred NDA. Upon termination of this Agreement for any reason except by EKR pursuant to Section 16.1(a), EKR shall promptly transfer the Transferred NDA and related regulatory documentation to PPI in accordance with Section 17.1(e). 3.3 Maintenance of Transferred NDA. The Parties acknowledge that prior to the Agreement Date, PPI was responsible at its own cost and expense for maintaining and updating the Transferred NDA, and agree that PPI shall retain all liabilities with respect to the foregoing obligations to the extent relating to periods prior to the Agreement Date. Commencing as of the Agreement Date, EKR shall, at its own cost and expense, maintain and update the Transferred NDA and be responsible for all liabilities with respect to the foregoing obligations to the extent relating to periods after the Agreement Date. + +3.4 Assistance. PPI shall, at EKR's cost and expense, provide EKR with all assistance, information and guidance, including where appropriate direct access to employees of and consultants to PPI and its Affiliates and shall use reasonable efforts to obtain such assistance and access from any sub-contractors of PPI and its Affiliates (including for the avoidance of doubt any manufacturers of the Product) which is reasonably necessary in relation to the conduct of any post-marketing or Phase IV studies to be conducted by EKR in the Territory or otherwise in connection with the discharge of EKR's obligations under the terms of this Agreement (including, but not limited to, the maintenance of the Transferred NDA); provided, however, that any such post-marketing or Phase IV studies to be conducted by EKR shall be at EKR's sole cost and expense. Any labor + + + + + +costs of PPI employees related to this assistance shall be reimbursed by EKR at a rate of [**] dollars ($[**]) per hour. PPI represents and warrants that as of the Agreement Date, except for the studies set forth on Schedule X attached hereto (the "Required Studies"), no post- marketing or Phase IV studies are required by any applicable Regulatory Authority to be conducted with respect to the Product. EKR shall be responsible for the conduct of the Required Studies after the Agreement Date, at its own expense, in accordance with the requirements of the applicable Regulatory Authorities. PPI shall be responsible for all costs and liabilities incurred prior to the Agreement Date with respect to the Required Studies, and shall indemnify and hold harmless EKR from such costs and liabilities. Promptly after the Agreement Date, PPI shall provide EKR with copies of all agreements relating to the Required Studies and shall assign such agreements to EKR if and to the extent (i) such agreements are assignable in accordance with their terms and (ii) requested by EKR. + + + + + + -16- + +3.5 Adverse Events. PPI shall at its own cost and expense promptly provide EKR with all information in its possession or otherwise coming to its attention relating to the occurrence of a serious adverse event or an adverse event (in any jurisdiction throughout the world) in connection with the Product. PPI shall be responsible, to the extent required by Applicable Laws, to report all charges, complaints or claims reportable to the FDA relating to the Product, to the extent such charges, complaints or claims are made prior to the Agreement Date. EKR shall be responsible, to the extent required by Applicable Laws, to report all charges, complaints or claims reportable to the FDA relating to the Product, to the extent such charges, complaints or claims are made after the Agreement Date. 3.6 Reserved. 3.7 Delivery of Materials. The Parties acknowledge that prior to the Agreement Date, PPI has delivered to EKR (i) all existing PPI produced Promotional Materials (if any) and (ii) any existing market research in its possession related to the Product. + + + + + + + + + + + + + + + + + + -17- + +3.8 Customer Orders. PPI shall at its own cost and expense during the Term, promptly forward to EKR any customer orders or inquiries for the Product within the Territory received after the Effective Date and shall inform any customers ordering the Product that EKR is now distributing the Product and provide such customers with EKR's address and telephone number. 3.9 Payment of Third Party Royalties. During the Term, PPI shall be solely responsible for and pay any royalties or other amounts due to Third Parties related to the Product and shall indemnify and hold EKR harmless from any claims arising from or related thereto. 3.10 Customer Returns. PPI shall at its own cost and expense be responsible for all customer returns of Product sold prior to the Effective Date. 3.11 Governmental Rebates. PPI shall at its own cost and expense be responsible for all discounts, rebates, or promotional allowances/incentive programs deemed to be "discount[s] or other reduction[s] in price" for purposes of 42 U.S.C. Section 1320a-7b(b)(3)(A) and may be subject to the reporting requirements under state and federal Medicaid and Medicare laws for sales of Product prior to the Effective Date. PPI represents that it is aware of its obligations to report discounts resulting from this Agreement to the appropriate reimbursing agencies and authorities (including Medicaid and Medicare). PPI is responsible for complying with and agrees to comply with all applicable requirements, if any, in respect of providing information on such discounts to reimbursing agencies (including Medicaid and Medicare) and other entities in accordance with Applicable Laws and regulations for sales of Product prior to the Effective Date and for sales of any PPI labeled product subsequent the Effective Date. 3.12 Chargebacks. PPI shall at its own cost and expense be responsible for all chargebacks for sales of Product prior to the Effective Date. 3.13 Exclusivity. During the Term, PPI and its Affiliates shall not: (i) file for Marketing Authorization with respect to any Competing Product in any country in the Territory, (ii) manufacture or have manufactured any Competing Product in any country in the Territory, (iii) market or have marketed any Competing Product in any country in the Territory or (iv) license any Third Party to do any of the foregoing. + + + + + + + +EKR - Graham May, MD - CMO PPI - Gary Patou, MD - CMO + + + + + + + + -18- + +3.14 Product Development. PPI shall at its own cost and expense cooperate fully and assist EKR with the preparation of any necessary submissions to any of the Regulatory Authorities in the Territory for the development and approval or supplemental approval(s) of the Products, including, but not limited to, by providing access to all PPI Know-How, the drug master file and any other information necessary for approval or supplemental approval of the Product in any country of the Territory. In addition, PPI shall cooperate fully in participating in interactions with the appropriate Regulatory Authorities including FDA related to such product development so as to enable EKR to fully exploit the Distribution Rights granted hereunder. For purpose of this Section, the contact person for each of the parties is set forth below. + +3.15 Reserved. 3.16 Recalls and PostMarket Notifications. All costs of safety alerts and all other forms of notifications regarding safety risks associated with the Products in the United States shall be borne by PPI to the extent arising prior to the Agreement Date and by EKR to the extent arising after the Agreement Date. 3.17 Compliance. During the Term PPI shall at its own cost and expense take all actions necessary to comply with all Applicable Laws and obtain and maintain all necessary license, permits, records and authorizations PPI is required to obtain and maintain hereunder so as to enable PPI to perform its obligations hereunder and under the Supply Agreement so as to enable EKR to fully exercise the Distribution Rights. 3.18 Assignment of ICS Agreement. The Parties acknowledge that effective upon the termination or expiration of the Transition Services and Inventory Agreement, PPI has + + + + + + + + + + + + -19- + + + +assigned to EKR all of PPI's right, title and interest under that certain Commercial Outsourcing Services Agreement between PPI (f/k/a SkyePharma, Inc.) and Integrated Commercialization Solutions, Inc. ("ICS") dated April 3, 2007 (the "ICS Agreement"), and EKR has assumed all obligations and liabilities under the ICS Agreement arising after the Effective Date. The Parties further acknowledge that as of the Effective Date, the Parties have entered into an Assignment and Assumption Agreement to further evidence the foregoing assignment and assumption of the ICS Agreement. 3.19 Product in Channel. All sales of Product conducted by PPI and its distributors and wholesalers (and, to the knowledge of PPI, by Endo Pharmaceuticals and its distributors and wholesalers) during the six month period prior to the Effective Date have been conducted in the ordinary course upon standard payment terms. PPI has provided EKR: (i) all information regarding sales by Endo Pharmaceuticals during the six month period prior to the Effective Date and (ii) all information regarding the number of units of Product and Endo Product that were in the possession or control of PPI or Endo Pharmaceuticals (and their respective distributors or wholesalers) as of the Effective Date (the "Known In-Channel Product Units"). Within 10 days of the end of each month following the Effective Date, PPI shall provide EKR with copies of: (i) any reports provided by Endo Pharmaceuticals of the number of units of Endo Product sold to hospitals or other customers during the preceding month by Endo, and (ii) information possessed by PPI of such sales by PPI or any of their respective distributors or wholesalers (the "Endo/PPI Unit Sales"). 3.20 Sale and Leaseback of Transferred Equipment. + + (a) In consideration of and subject to EKR's payment of the Equipment Purchase Price (as defined below), effective as of the Agreement Date, PPI hereby sells, transfers, conveys and assigns to EKR all right, title and interest in and to the equipment described on Schedule XII (the "Transferred Equipment"). The + + + + + + + + + + + + + + -20- + + + +Parties shall share equally the responsibility for any and all sales, transfer and conveyance taxes occasioned by the sale of the Transferred Equipment by PPI to EKR. PPI represents and warrants that: (i) on the Agreement Date, EKR shall receive sole ownership of, and good and valid title to, the Transferred Equipment, free and clear of any liens and encumbrances, (ii) the Transferred Equipment as of the Agreement Date is in good operating condition, normal wear and tear excepted and (iii) the Transferred Equipment constitutes all specialized equipment that is used in the manufacture of Product by PPI as of the Agreement Date. For purposes of clarity, the Transferred Equipment does not include any standard, non-specialized equipment generally found in manufacturing facilities or available to manufacturers of products similar to the Product (e.g., refrigerators, freezers, safes, incubators, stability chambers, clean utilities, supportive utilities, temperature control units and other supportive equipment). On the Agreement Date, PPI shall execute and deliver to EKR a Bill of Sale with respect to the Transferred Equipment substantially in the form attached hereto as Exhibit 3.20(a). (b) EKR will pay PPI [**] Dollars ($[**]) for the Transferred Equipment (the "Equipment Purchase Price") as follows: + + (i) within five (5) days after the Agreement Date, EKR will pay PPI [**] Dollars ($[**]) of the Equipment Purchase Price in cash; and + + (ii) concurrently with the execution of this Agreement, EKR will issue to PPI a promissory note in principal amount of [**] Dollars ($[**]), such note to be substantially in the form attached hereto as Exhibit 3.20(b) (the "Promissory Note"). + + (c) Commencing as of the Agreement Date, EKR agrees to lease the Transferred Equipment to PPI through the end of the then-current calendar quarter and, subject to renewal as provided below, on a calendar quarter-to-calendar quarter + + + + + + + + + + + + -21- + + + +basis thereafter (the "Lease Term"), for use solely in connection with the (i) performance of PPI's obligations under the Supply Agreement, (ii) the supply of Products to PPI's other licensees and collaborators and (iii) the supply of placebo for PPI's Exparel product to PPI's other licensees and collaborators. The Lease Term shall automatically renew at the end of each calendar quarter of the Lease Term. The Lease Term will automatically terminate immediately upon (i) any termination or expiration of this Agreement and/or the Supply Agreement or (ii) any exercise by EKR of the Step-in Right described in Section 17.5 below. + + + +(d) At any time between the Agreement Date and July 1, 2015, EKR shall have the right, exercisable upon sixty (60) days prior written notice to PPI, to terminate the Lease Term and sell the Transferred Equipment back to PPI, subject to payment by PPI to EKR within five (5) days of such notice of $[**] in cash, which if exercised shall result in (i) an offset against the unpaid balance of principal and interest under the Promissory Note pursuant to Section 3.20(f) below; and (ii) the termination of the Step-in Right described in Section 17.5. + + + +(e) At any time after July 1, 2015, PPI shall have the right, exercisable upon sixty (60) days prior written notice to EKR, to terminate the Lease Term and repurchase the Transferred Equipment from EKR, subject to payment by PPI to EKR within five (5) days of such notice of any principal paid by EKR under the Promissory Note, which if exercised shall result in the termination of the Step-in Right set forth in Section 17.5. + + + +(f) If, upon the expiration or earlier termination of the Lease Term (except as provided in Section 3.20(e) above), the aggregate amount of repayments and Royalty Offsets (as defined below) earned by EKR pursuant to Section 6.3 below have not equaled or exceeded the Advanced Royalty Payment (as defined below), then EKR shall have the right, at its option, to offset against the unpaid balance of principal and interest under the Promissory Note, by an amount equal to the + + + + + + + + + + + + + + -22- + + then-current balance of the Advanced Royalty Payment that has not yet been recouped by EKR through repayments and Royalty Offsets pursuant to Section 6.3 below (the "Remaining Balance"), in which event PPI's obligations under Section 6.3 below with respect to repayment of the Advanced Royalty Payment shall be deemed to have been paid in full. + + (g) In consideration of the foregoing lease, PPI shall pay EKR [**] lease payments in the amount of $[**]per calendar quarter, with the first lease payment due on the Agreement Date and each subsequent lease payment due during the Lease Term on the first day of each calendar quarter thereafter. + + (h) PPI shall not, without the prior, written consent of EKR, remove any of the Transferred Equipment from the locations within the Approved Facilities (as defined in the Supply Agreement) where such Transferred Equipment is installed as of the Agreement Date. + + + +(i) During the Lease Term, PPI shall: (i) assume the risk of loss or damage to the Transferred Equipment; (ii) maintain the Transferred Equipment in good operating condition and appearance, ordinary wear and tear excepted; (iii) comply with all requirements necessary to enforce any warranty rights and to maintain eligibility for any manufacturer maintenance program; (iv) promptly repair any repairable damage to the Transferred Equipment and (v) maintain property damage and liability insurance and insurance against loss or damage to the Transferred Equipment as part of PPI's general liability insurance. + + + +(j) If any of the Transferred Equipment is lost, stolen, destroyed, damaged beyond repair or in the event of any condemnation, confiscation, seizure or expropriation of any Transferred Equipment ("Casualty Transferred Equipment"), PPI shall promptly (i) notify EKR of the same, and (ii) pay to EKR an amount equal to the estimated in-place, fair market value of the Casualty Transferred Equipment as of the date of the loss, as determined by a mutually agreed nationally recognized + + + + + + + + + + -23- + + + +appraiser; provided that (i) in the event there are any amounts owed to PPI under the Promissory Note as of the date of such loss, PPI shall have the right, at its option, to offset against the unpaid balance of principal and interest under the Promissory Note, the amounts owed to EKR pursuant to this Section 3.20(k), and (ii) in no event shall PPI be required to pay EKR an amount that exceeds [**] Dollars ($[**]) plus the amounts paid by EKR pursuant to the Promissory Note. + + + +(k) Subject to Sections 3.20(d) and (e) and Section 6.3(d) and PPI's right to repurchase the Transferred Equipment thereunder, upon the expiration or earlier termination of the Lease Term, EKR shall remove the Transferred Equipment from PPI's premises (unless EKR at its option elects to retain the Transferred Equipment at PPI's premises in connection with EKR's exercise of step-in rights under Section 17.5). PPI agrees to cooperate with EKR in the removal of the Transferred Equipment, including providing the necessary access to the Transferred Equipment and the facilities where it is located at times mutually agreed by the Parties, such agreement not to be unreasonably withheld or delayed by either Party. + + + +(l) Upon termination of the Lease Term, unless PPI has repurchased the Transferred Equipment, EKR will, at PPI's request, use commercially reasonable efforts to (i) supply the Product and (ii) supply placebo for [**], to PPI's other licensees and collaborators outside the Territory, excluding PPI and any of its Affiliates (the "Other PPI Customers"), in each case in accordance with the commercially reasonable requirements of any existing agreements between PPI and such Other PPI Customers, subject to EKR's receipt of payment required under such agreements for supplying such Products and/or other products. PPI will use commercially reasonable efforts to cooperate with EKR so as to enable EKR to supply Product and, if applicable, other products, to such Other PPI Customers. + + + + + + + + + + -24- + +4. Undertakings of EKR. 4.1 Marketing Authorizations. EKR shall, as determined in its sole discretion to be commercially reasonable, prepare studies of the markets and sales potential of the Products for countries in the Territory other than the United States and present such studies to the Committee. EKR shall at its own cost and expense use commercially reasonable efforts to take those steps reasonably necessary in order to obtain and thereafter maintain Marketing Authorizations (including pricing and reimbursement approvals) for the Product in those countries of the Territory other than the United States which the Committee determines to present commercially viable opportunities for the Product. EKR shall provide PPI with a copy of any original certificates of approval/registration in each country in the Territory other than the United States. EKR shall provide PPI with a copy of any other registration matters received from the appropriate Regulatory Authorities concerning maintenance, renewal or variations to the original certificates of approval/registration in each country in the Territory. Except as provided in Section 3.17, EKR shall be solely responsible for, and shall bear all costs associated with, all regulatory activities related to the development and approval of the Product in the countries of the Territory (including, after the Agreement Date, the United States) and shall own the Marketing Authorizations for the Product in each other country of the Territory. EKR will comply with all conditions and requirements attaching to such Marketing Authorizations. 4.2 Liaison with Regulatory Authorities. Pursuant to Section 4.1 above, EKR shall at its own cost and expense liaise with the relevant Regulatory Authorities in respect of each Marketing Authorization and notify PPI of all material communications relating thereto. The cost of submitting any data generated by any Phase IV studies conducted by EKR which is required to be filed with the FDA shall be borne by EKR and the cost of submitting any other data (including data submitted to support the use of the Product for additional indications) shall also be borne by EKR; + + + + + + + + + + + + + + + + -25- + +4.3 Submission of Promotional Materials. Pursuant to Section 4.1 above, EKR shall at its own cost and expense submit and obtain the approvals of Regulatory Authorities in the Territory of Promotional Materials as required by Applicable Laws; 4.4 Pre-Launch and Post Launch Activities. Pursuant to Section 4.1 above, EKR shall at its own cost and expense carry out reasonable pre- launch market development and conduct such post-marketing clinical trials (as determined solely by EKR in its reasonable business judgment) in accordance with the Marketing Plan. Any data resulting from such trials shall be owned by EKR but shall be provided on a royalty-free license to PPI for use outside of the Territory. PPI shall cooperate with EKR in connection with such pre-launch and post launch activities as provided in sections 3.3 and 3.14 hereof; 4.5 Launch of Products. Pursuant to Section 4.1 above, EKR shall at its own cost and expense launch and achieve Commercial Launch of the Products in accordance with the Marketing Plan but no later than 18 months following receipt of Marketing Authorization in each country in the Territory provided however that EKR shall not be obligated to launch such Product in such country of the Territory where the approved pricing in such country provides EKR a gross margin of less than [**]% (after payment of Royalties, Additional Royalties and Cost of Goods) or where the launch of the Product in such country of the Territory as determined by EKR is not commercially reasonable. 4.6 Marketing Activities. EKR shall at its own cost and expense, during the term of this Agreement, promote, market, sell and distribute the Products to customers within the Territory and provided that PPI has supplied EKR with necessary quantities of Product, satisfy the demand for the Product throughout the Territory. EKR shall be solely responsible for, and shall bear all costs associated with, all marketing and selling activities related to the Products in the Territory; 4.7 SubDistributors. EKR shall at its own cost and expense maintain, or use reasonable commercial efforts to ensure that sub-distributors maintain, adequate sales and, where + + + + + + + + + + + + + + -26- + + appropriate, warehouse facilities and employ, or use reasonable commercial efforts to procure that sub-distributors employ, a sufficient number of experienced, trained and qualified personnel to promote the sale of the Product in the Territory and perform, or procure the performance of the activities set forth in the Marketing Plan; 4.8 Inventory and Promotional Materials. EKR shall maintain a sufficient inventory of Product and support material to reasonably fulfill the requirements of its customers in the Territory provided that, subject to Section 17.5, PPI shall comply with the Supply Agreement; 4.9 Records. EKR shall maintain adequate records concerning the sale of the Product as required by any applicable Regulatory Authority in the Territory; 4.10 Promotional Materials. EKR shall provide PPI with copies of the Promotional Materials proposed to be used in connection with the sale of the Products in the United States for approval, solely with respect to Trademark usage, (such approval not to be unreasonably withheld, conditioned or delayed) to the extent such Promotional Materials include any Trademark. EKR shall submit such Promotional Materials to PPI at least five (5) business days in advance of its intended use of the same and such Promotional Material shall be deemed to have received PPI's approval unless PPI Provides EKR with written notice of rejection within said five (5) business day period and EKR shall be authorized to finalize and use same. For the avoidance of doubt, any Trademark usage set forth on any Promotional Materials in use as of or prior to the Agreement Date are hereby deemed to be approved by PPI. 4.11 Adverse Events. Each Party shall promptly provide the other Party with all information in its possession or otherwise coming to its attention relating to the occurrence of a serious adverse event or an adverse event (in any jurisdiction throughout the world) in connection with the Product, and promptly forward to such other Party information concerning any and all charges, complaints or claims reportable to any Regulatory Authority relating to the Product that may come to the first Party's attention, and + + + + + + + + + + + + + + + + -27- + + + +otherwise comply in all respects with the adverse drug event reporting and recall procedures set out or referred to in the Supply Agreement from time to time. EKR shall be responsible, to the extent required by Applicable Law, to report all charges, complaints or claims reportable to any Regulatory Authority outside of the United States relating to the Product, as well as any such charges, complaints or claims reportable to any Regulatory Authority inside the United States to the extent such charges, complaints or claims are made after the Agreement Date. 4.12 Permits. EKR shall obtain and maintain all necessary licenses, permits, records and authorizations required by Applicable Laws as holder of the Transferred NDA after the Agreement Date and in order to exercise the Distribution Rights and observe and comply with all Applicable Laws, ordinances, rules and regulations including, but not limited to those of the applicable Regulatory Authorities in the exercise of the Distribution Rights save insofar as PPI is required to obtain the same as holder of the Marketing Authorizations prior to the Agreement Date, or under the terms of this Agreement; 4.13 Compliance. EKR shall conduct the promotion and marketing and sale of the Products in accordance with Applicable Laws and with all due care and diligence. 4.14 Sales and Promotional Activities. In connection with the promotion, marketing and sale of the Product, EKR shall, without limitation: + + (a) observe and comply with such storage, stock control and operational practices and procedures as may be legally required in the Territory and as reasonably specified in writing by PPI from time to time; + + (b) from time to time consult with PPI's representatives for the purpose of assessing the state of the market in each country of the Territory and permit representatives of PPI, on reasonable prior notice, to inspect any premises or documents used in connection with the marketing, distribution and sale of the Products; + + + + + + + + + + + + + + + + + + -28- + + (c) provide PPI on reasonable prior notice but not more than once in any Calendar Year, copies of its up-to-date price list for the Product together with full details of standard discounts and any special pricing arrangements entered into or proposed to be entered into; + + (d) market the Product throughout the Territory under the Trademarks and any EKR trademarks and ensure that all marketing materials for the Product shall display the Trademarks; and + + (e) comply with all applicable regulatory and statutory requirements imposed in relation to the Product, including, without limitation, those imposed by the US Drug Enforcement Agency ("DEA") and other equivalent agencies in the Territory. 4.15 Prohibition on Sales Outside the Territory. EKR shall not directly or indirectly market distribute and/or sell the Product outside the Territory, or sell the product to any Third Party that EKR knows intends to sell or distribute the Product outside the Territory. In addition, the Parties acknowledge that since the Product is a controlled substance, the DEA and other law enforcement agencies will not permit any sale outside the Territory without relevant clearances and approvals. 4.16 Non-Compete. EKR shall not, during [**], market, distribute or sell a Competing Product in the Territory unless during such time an A/B rated generic product of the Product(s) is launched in such country of the Territory or in the event this Agreement is terminated or EKR exercises its rights under Section 17.4 hereof. 4.17 PPI as Exclusive Provider. During the Term, except if PPI is unable to supply Products (including, but not limited to, in connection with EKR's exercise of its rights under Section 17.5 below) or as provided in the Supply Agreement, EKR shall purchase all of its requirements for the Product from PPI. 4.18 Packaging. During the Term, EKR shall not use in relation to the Product any packaging, labeling and Product inserts, nor any advertising literature that has not been + + + + + + + + + + + + + + -29- + + approved by PPI in writing with respect to Trademark usage (such approval not to be unreasonably withheld, conditioned or delayed) or deemed approved pursuant to Section 4.10, to the extent such materials include any Trademark. EKR shall be responsible for insuring that any packaging, labeling and Product inserts, and advertising literature complies with Applicable Laws. 4.19 Customer Orders. If EKR receives a request from a customer located outside the Territory for supply of the Product outside of the Territory, EKR shall promptly forward such request to PPI. 4.20 Governmental Rebates. Any discounts, rebates, or promotional allowances/incentive programs provided are "discount[s] or other reduction[s] in price" for purposes of 42 U.S.C. Section 1320a-7b(b)(3)(A) and may be subject to the reporting requirements under state and federal Medicaid and Medicare laws. EKR represents that it is aware of its obligations to report discounts resulting from this Agreement to the appropriate reimbursing agencies and authorities (including Medicaid and Medicare). EKR is responsible for complying with and agrees to comply with all applicable requirements, if any, in respect of providing information on such discounts to reimbursing agencies (including Medicaid and Medicare) and other entities in accordance with Applicable Laws and regulations. 4.21 Resale Pricing. In exercising the Distribution Rights, EKR shall determine resale pricing of the Products in its sole discretion. + +5. Commercialization Committee. 5.1 Establishment of Committee. The Parties have established a Commercialization Committee ("Committee") consisting of 4 individuals ("Committee Members"); 2 of whom were nominated by PPI; and 2 of whom were nominated by EKR. The Committee Members may be replaced by notice to the other Party and shall be appropriately qualified and experienced in order to make a meaningful contribution to Committee meetings. + + + + + + + + + + + + + + -30- + +5.2 Purpose. The purpose of the Committee is to provide a forum for the Parties to share information and knowledge on the on-going Commercialization of the Product including, but not limited to, monitoring progress on clinical studies, reviewing clinical trial programs, discussing the appropriate regulatory strategy for the Products in the Territory, considering proposed marketing and promotional plans, reviewing competitor activity and discussing any regulatory, technical, quality assurance or safety issues in relation to the Product. The Committee shall conduct its discussions in good faith with a view to operating to the mutual benefit of the Parties and in furtherance of the successful development and marketing of the Products. 5.3 Meetings. The Committee shall meet as often as the Committee Members may determine, but in any event not less than 2 times per Calendar Year. The Committee may invite individuals with special skills to attend such meetings where considered to be relevant and appropriate. The quorum for Committee meetings shall be 2 Committee Members, comprising 1 Committee Member from each Party. 5.4 Marketing Plan. The Parties acknowledge that EKR has provided the Committee with its Marketing Plans for Calendar Years 2008 and 2009 pursuant to the Original Agreement. EKR shall on or before October 15 2009 and October 15 of each Calendar Year thereafter provide the Committee with its Marketing Plan for the coming Calendar Year. Each Marketing Plan shall include, without limitation, Net Sales targets and projections with respect to sales force staffing levels, market research, physician education, marketing expenditure, post-approval clinical trials and advertising. With regard to pre-marketing clinical trials, the design and conduct shall be subject to the written approval of PPI, such approval not to be unreasonably withheld or delayed. 5.5 Decision Making. Decisions of the Committee shall be made as follows: + + (a) The Committee may make decisions with respect to any subject matter that is subject to the Committee's decision-making authority. Except as expressly provided in this Agreement, all decisions of the Committee + +th th + + + + + + + + + + -31- + + shall be made by unanimous vote or written consent, with EKR and PPI each having, collectively, one vote in all decisions. The Committee shall use commercially reasonable efforts to resolve the matters within its roles and functions or otherwise referred to it. + + + +(b) If, with respect to a matter that is subject to the Committee's decision-making authority, the Committee cannot reach consensus within 15 days after it has met and attempted to reach such consensus or the Parties cannot reach consensus on whether the Committee has decision-making authority regarding a matter within 15 days after such matter was first raised by either Party, the dispute in question shall be referred to the Chief Executive Officer of PPI, on behalf of PPI, or such other person holding a similar position designated by PPI from time to time, and the Chief Executive Officer of EKR, or such other person holding a similar position designated by the EKR from time to time (such officers collectively, the "Executive Officers"), for resolution. The Executive Officers shall use reasonable efforts to resolve the matter referred to them. + + + +(c) If the Executive Officers cannot resolve the matter in accordance with Section 5.5(b) within 30 days of the reference of the matter to them, then EKR shall have the final decision-making authority if the matter relates to the sale or marketing of the Product in any country of the Territory and PPI shall have the final decision-making authority if the matter relates to the development, manufacture or Trademarks of the Product. + + + + + + + + + + + + + + + + + + + + -32- + +6. Fees, Milestones and Royalties. 6.1 Up-Front Payment. In consideration for work previously undertaken by PPI in respect of the Product, the Parties acknowledge that EKR has paid a non-refundable, non-creditable up front payment of $[**] to PPI pursuant to the Original Agreement. 6.2 Deferred Milestone Payments. As further consideration for the work previously undertaken by PPI and in consideration for the license and grant of the Distribution Rights to EKR under this Agreement, EKR shall pay to PPI the following milestone payments (the "Deferred Milestone Payments") on the date when due: + +Deferred Milestone Due Date $[**] (the "First Deferred Milestone") + + + +The Parties acknowledge that EKR has paid the First Deferred Milestone to PPI prior to the Agreement Date. + +$[**] (the "Second Deferred Milestone") + + + +Within three (3) days of the Agreement Date, E K R s h a l l p a y t h e S e c o n d D e f e r r e d Milestone. + +6.3 Advanced Royalty Payment to PPI. + + (a) Within three (3) days of the Agreement Date, EKR shall make an advanced Royalty payment to PPI of $[**] (the "Advanced Royalty Payment"), which will be offset against EKR's payment obligations or otherwise repaid to EKR as set forth below in this Section 6.3. + + (b) Offsets and/or repayment of the Advanced Royalty Payment shall commence on [**] and shall continue, unless sooner paid, through [**] (the "Royalty Offset Period") and such offsets will be taken by EKR (and such repayment will be made by PPI) as follows: + + + +(i) by a reduction in Royalties due under Section 6.4 of this Agreement of $[**] for each [**] mg vial of Product sold during the Royalty Offset Period and $[**] for each [**] mg Vial of Product sold during the Royalty Offset Period (collectively the "Royalty Offset") which amounts shall be deducted by EKR from any Royalty payments due PPI and reflected in the quarterly and annual reports required in Section 6.5 of this Agreement; + + + + + + + + + + -33- + + + +(ii) by payment to EKR of [**] percent ([**]%) of any purchase price payments, license fees, other access fees or royalties received by PPI or any of its Affiliates after the Agreement Date in connection with the license (to the extent permitted hereunder) or transfer of any rights to the Product (and/or any underlying intellectual property rights) in the Field in the Territory to a Third Party (other than pursuant to any transaction described in Section 6.3 (b)(iii) below), which payment shall be made by PPI to EKR within ten (10) days of PPI's receipt of such payments; and + + (iii) upon any Change of Control (as defined in Section 20.4) of PPI, by repayment to EKR in full of the balance of the Advanced Royalty Payment not previously used for offsets, which payment shall be made to EKR by PPI within ten (10) days after the closing date (without any conditions) of any such Change of Control. + + + + + + + + -34- + + + +(c) Notwithstanding Section 6.3(b), effective July 1, 2013, the balance of the Advanced Royalty Payment that is available for subsequent offsets and/or repayments under Section 6.3(b) above shall be reduced to the lesser of (x) $[**] or (y) the actual amount of such balance as calculated based upon any payments and offsets deducted to date from the beginning Advanced Royalty Payment balance of $[**], as outlined in clauses (i) and (ii) of Section 6.3(b) above. As of [**] the balance of the Advanced Royalty Payment shall have been deemed repaid in full by PPI and no additional offsets to or repayments of the Royalties shall thereafter be applied for any reason. + + + +(d) Notwithstanding anything to the contrary, in the event EKR exercises it right of termination pursuant to Section 16.3(b) of this Agreement or PPI terminates this Agreement pursuant to Section 16.1(a): (i) EKR will sell the Transferred Equipment back to PPI, subject to payment by PPI to EKR (within five (5) days of the date of termination) of $[**] in cash and cancellation of any remaining obligation of EKR under the Promissory Note, (ii) the Advanced Royalty Payment shall be deemed to have been repaid in full, and EKR shall not have the right to the Royalty Offset between the date of notice of such termination and the termination date of the Agreement and (iii) EKR shall promptly transfer the Marketing Authorizations to PPI or its nominee in accordance with Section 17.1(e) below. + + + + + + + + + + -35- + + (e) Notwithstanding anything to the contrary, during the Royalty Offset Period, or until such time that the Advanced Royalty Payment balance has been fully repaid, the combined Royalty and Supply Price (as defined in the Supply Agreement) shall not exceed [**] percent ([**]%) of the net average selling price of the Product. + + (f) For the avoidance of doubt, the Royalty Offset described in clause (i) of Section 6.3(b) shall not be applied against any Additional Royalty due PPI pursuant to Section 6.4. 6.4 Royalties. As further consideration for the license and grant of Distribution Rights and other rights under this Agreement, EKR shall pay to PPI a royalty ("Royalty") equal to (a) $[**] for each [**] mg Vial of Product sold during the Term and $[**] for each [**] mg Vial of Product sold during the Term (the "Minimum Royalty") plus (b) an additional [**]% of any post Effective Date incremental price increase implemented by EKR over the Current Base Price of $[**] for the [**] mg Vial and $[**] for the [**] mg Vial (the "Additional Royalty"); provided, however, that Additional Royalty shall not be payable to the extent that the sum of (i) the Minimum Royalty and Additional Royalty payable hereunder and (ii) the Supply Price (as defined in the Supply Agreement) shall at any time during the Term exceed [**] percent ([**]%) of the net average selling price of the Product (the "Royalty Cap"); provided, however, that the Royalty Cap shall be [**] percent ([**]%) of the net average selling price of the Product during certain periods as described in Section 6.3(e) above. EKR shall be entitled to offset certain amounts from Royalties payable hereunder as set forth in Section 6.3(b) above. Royalties on other presentations and dosages which hereafter receive Marketing Authorization in any country of the Territory shall be negotiated in good faith by the parties in a manner consistent with the Royalty currently being paid by EKR as of the date of the receipt of Marketing Authorization for such new presentations and dosages. + + + + + + + + + + + + + + + + + + + + + + + + -36- + +6.5 Quarterly Reports and Annual Reports. Within 30 days of the end of each Quarter and within sixty (60) days of the end of each Calendar Year during the Term of this Agreement EKR shall send to PPI a statement setting out in respect of each country in the Territory in which Product is sold, details of Product sold during the previous Quarter or Calendar Year, as applicable, itemized by presentation form, quantity, total gross receipts, itemized deductions which are applied to achieve the Net Sales figure, and Net Sales of Product. The statement shall (where appropriate) show: (a) the total Net Sales for each country expressed both in local currency and in Dollars and the conversion rate used; + + (b) the total number of Vials sold in each country (less properly rejected, returned or recalled Vials) for each of the [**] mg Product and the [**] mg Product (the "Unit Sales"); + + (c) the applicable Royalty rate multiplied by the Unit Sales for each of the [**]mg and [**] mg Products in that Quarter ("Prepayment") (or in that Calendar Year, as applicable); (d) any Additional Royalties due in that Quarter (or for such Calendar Year); + + (e) the total Royalties payable on those Unit Sales (subject to the Royalty Cap) in accordance with Section 6.4, and any deductions taken pursuant to Section 6.3. 6.6 Payment. EKR shall pay to PPI, any Minimum Royalties and Additional Royalties due within forty-five (45) days of the end of each Quarter as the case may be subject to reconciliation at the end of each Calendar Year as set forth in Section 6.9. 6.7 Reserved. 6.8 Reserved. 6.9 Reconciliation. Within forty-five (45) days of the end of each Contract Year, there shall be a reconciliation between the sums paid under Section 6.6 and the Royalties payable under Section 6.4, and any payment due (or in the event of an overpayment by EKR to PPI) such amounts shall be paid by one Party to the other within thirty (30) days of the resolution of such reconciliation. + + + + + + + + + + + + + + -37- + +6.10 Withholdings. In the event that a Party is required under the laws of a country or other political subdivision of competent jurisdiction to withhold any tax to the tax or revenue authorities in such jurisdiction in connection with any payment to the other Party, such amount shall be deducted from the payment to be made by such withholding Party; provided that the withholding Party shall take reasonable and lawful actions to avoid and minimize such withholding and promptly notify the other Party so that the other Party may take lawful actions to avoid and minimize such withholding. The withholding Party shall promptly furnish the other Party with copies of any tax certificate or other documentation evidencing such withholding as necessary to satisfy the requirements of the appropriate regulatory authority related to any application by such other Party for foreign tax credit for such payment. Each Party agrees to reasonably cooperate with the other Party in claiming exemptions from such deductions or withholdings under any agreement or treaty from time to time in effect. + +7. Payment, Accounting, Audit Rights. 7.1 Currency. Unless otherwise agreed between the Parties, all payments to be made hereunder shall be made in US Dollars. Net Sales shall be determined in the currency in which the Product was sold and shall, if necessary, be converted into US Dollars using the noon buying rate as published in the Wall Street Journal for the last day of the Quarter for which such payment is being determined. 7.2 Maintenance of Records. EKR shall maintain and shall procure the maintenance of accurate and up to date records and books of account showing the quantity, description and value of the Products supplied in each country of the Territory during the previous six (6) Calendar Years. 7.3 Inspection. EKR shall during business hours, on no less than 14 day's notice from PPI and not more than once in any Calendar Year, make available for inspection the records + + + + + + + + + + + + + + -38- + + + +and books referred to in Section 7.2. Such inspection shall be undertaken by an independent auditor appointed by PPI and reasonably acceptable to EKR for the purpose of verifying the accuracy of any statement or report given by EKR to PPI and/or the amount of Royalties due. Upon completion of such inspection, PPI shall not be entitled to inspect nor shall EKR be required to make available the records and books for any Calendar Year for which such inspection was previously undertaken. 7.4 Confidentiality. PPI shall procure that any independent auditor appointed under Section 7.4 shall maintain all information and materials received, directly or indirectly, by it from EKR in strict confidence and shall not use or disclose the same to any Third Party nor to PPI save for the sole purpose of conducting the audit pursuant to this Section. 7.5 Audit. In the event that an auditor appointed pursuant to this Section concludes that there has been an underpayment or overpayment, PPI shall deliver to EKR a copy of such auditor's report. Any deficit payable by EKR or any excess refundable by PPI shall be payable within 30 days of EKR's receipt of such report. The fees charged by such auditor shall be payable by PPI, provided that if the audit reveals that payments due to PPI for any Calendar Year have been understated by more than [**]%, the fees charged by such auditor shall be payable by EKR. 7.6 Interest. Should any amount not be paid by either Party on or before the due date for payment interest on such unpaid amount at the rate of [**]% above the prime lending rate of Citibank, N.A. (or its successor in interest) in effect from time to time and such interest shall be calculated and payable in respect of the period from the date such amount is due until the date payment in full is received in cleared funds. + +8. Intellectual Property and Trademarks. 8.1 Limitation of License. Except as set out in this Agreement, all right, title and interest in the PPI IP or Trademarks shall belong to PPI and EKR shall not have any right, title or interest in the PPI IP or Trademarks. + + + + + + + + + + + + + + + + -39- + +8.2 Trademark Standards. EKR shall use the Trademarks in a manner which conforms to the reasonable directions and standards notified to it by PPI from time to time and not do anything which could, in the PPI's reasonable opinion, bring the Trademarks or PPI into disrepute or otherwise damage the goodwill attaching to the Trademarks. 8.3 Maintenance of Trademarks. PPI shall, at its own cost, take all steps required to maintain those registrations for the Trademarks subsisting at the Effective Date, and prosecute any applications subsisting at the Effective Date for registration of the Trademarks through to grant (including oppositions thereto) in each country of the Territory. 8.4 Additional Trademark Registrations. EKR may request that PPI use reasonable efforts to obtain Trademark registrations in respect of the Trademarks, in classifications which cover the Product, in any countries in the Territory. PPI shall promptly notify EKR if it does not intend to make or pursue any such Trademark registration in any of the countries in the Territory and EKR shall thereafter be entitled to make applications for such Trademark registrations in its own name. 8.5 Domain Names. EKR shall have the right during the Term to register domain names in its own name specific to the countries comprised in the Territory that incorporate the Trademark. 8.6 Improvements. PPI Improvements shall be owned by PPI and be licensed to EKR hereunder. EKR Improvements shall be owned by EKR and upon termination of this Agreement by PPI pursuant to Section, shall be deemed be licensed to PPI on a worldwide, non-exclusive, irrevocable basis, at a royalty or for such other consideration as may be mutually agreed upon by the parties in writing. Joint Improvements shall be owned jointly by the Parties, and PPI's interest therein shall be licensed to EKR hereunder. + + + + + + + + + + + + + + + + + + -40- + +9. Representations and Warranties. 9.1 Representations and Warranties of Both Parties. Each Party represents and warrants to the other Party as of the Effective Date, that: + + (a) Organization. Such Party is duly organized and validly existing and in good standing of the laws of the jurisdiction of its incorporation and it has full power and authority and legal right to enter into this Agreement and perform the obligations under it; + + (b) Authorization. Such Party has taken all corporate action such that the execution and delivery of this Agreement and the consummation of the transaction contemplated hereby has been duly authorized by all necessary actions; + + (c) Valid Obligation. This Agreement is a legal and valid obligation of such Party, binding on each of the Parties and enforceable in accordance with its terms; + + + +(d) Execution and Delivery. The execution and entry into and exercise of the respective rights and obligations under this Agreement including the granting of rights to the other Party pursuant to this Agreement do not, and will not conflict with, or violate any provision of any agreement or other instrument or document to which it is Party or affect or be in conflict with or result in the breach of or constitute a default under any such agreement, instrument or document or conflict with any rights granted by such Party to any Third Party or breach any obligation that such Party has to any Third Party; and + + + +(e) Debarment. It is not currently debarred, suspended or otherwise excluded by the United States, under any Federal law, including, without limitation, the Generic Drug Enforcement Act of 1992, or by any other country in the Territory under any analogous law, rule or regulation, and does not and will not use in any capacity the services of any person debarred under applicable law, rule or regulation, in the Territory in the performance of its obligations under this Agreement. + + + + + + + + + + + + + + + + + + -41- + +9.2 Representations and Warranties of PPI. PPI hereby represents and warrants to EKR as of the Effective Date that: + + + +(a) Ownership; Validity. It is the owner of, or has exclusive rights to, all of the PPI IP and Trademarks in existence on the Effective Date, and has the exclusive right to grant the Distribution Rights and other rights granted under this Agreement. All of the PPI Patents in existence on the Effective Date are valid, enforceable, in full force and effect and have been maintained to date and are not the subject to any interference or opposition procedures. All of the PPI Patents listed in the Orange Book are properly filed in accordance with Applicable Laws; + + (b) Third Party Interests. There are no Third Party interests or rights in the PPI IP or Trademarks that may prevent, encumber or restrict the exercise by EKR of the Distribution Rights or other rights granted under this Agreement. + + (c) Third Party Infringement. No Third Party is infringing or has infringed the intellectual property rights of PPI in any of the PPI IP or Trademarks; + + + +(d) Distribution Rights and other Rights. That neither the Products, the exercise of EKR's Distribution Rights and other rights granted under this Agreement or the manufacture of the Products as contemplated by this Agreement or the Supply Agreement do not and will not infringe or conflict with any Third Party intellectual property rights and EKR will not incur any obligation to any Third Party by the exercise of the rights granted hereunder; + + (e) Renewal and Maintenance Fees. All renewal and maintenance fees and all steps necessary for the filing, prosecution and maintenance of the PPI + + + + + + + + + + + + + + + + + + -42- + + Patents and Trademarks due and payable as of the Effective Date have been paid or taken and there are no actions due within 180 days of the Effective Date; + + (f) Trademarks. The Trademarks are the only trademarks, trade dress or service marks related to the Product that are owned by PPI or licensed by PPI (with the right to sublicense); + + (g) Adverse Events. To its knowledge and belief all information, data and Third Party notices in relation to adverse events serious adverse events or recalls with respect to the Product and of which PPI is aware have been disclosed by PPI to EKR; + + + +(h) Access to Documents. PPI has provided EKR or given EKR access to true, complete and unredacted copies of all (i) regulatory documentation or (ii) material agreements between PPI and any Third Party including all effective amendments to any such agreements which in any event (A) affects or may affect EKR's rights under this Agreement or (B) relates to the Product; + + (i) No Brokers. Neither PPI nor any office, director or agent of PPI has employed any broker, finder or agent with respect to this Agreement or the transactions contemplated hereby; + + (j) Right to License. PPI has the right to use and license PPI IP and Trademarks free and clear of any material liens, security, interests, licenses, obligations, transfer agreements, enforceable claims or encumbrances; + + + +(k) Litigation. There is no litigation, arbitration, proceeding, governmental investigation, action or claim of any Third Party or to the knowledge of PPI threatened by or against PPI relating specifically to the PPI IP, or the Trademarks which would impede, impair, restrict or interfere with the rights granted EKR hereunder or the ability of PPI to perform its obligations hereunder; and + + + + + + + + + + + + + + + + -43- + + (l) Customer Lists. PPI has or prior to the Effective Date will have provided EKR with complete and accurate lists of the names and addresses of all material customers and suppliers of the Products. + + + +(m) Permits. PPI has and shall maintain at all times during the Term all necessary license, permits, records and authorizations required by Applicable Laws necessary to perform its obligations hereunder and shall observe and comply with all Applicable Laws, ordinances, rules and regulations including those of the applicable Regulatory Authorities and governmental entities including but not limited to DEA in the performance of its obligations hereunder. + + + +(n) ICS Agreement. All amounts due under the ICS Agreement as of or prior to the Effective Date have been paid in full. PPI is not in, nor has PPI given or received notice of, any default or claimed, purported or alleged default, or facts that, with notice or lapse of time, or both, would constitute a default (or give rise to a termination right) on the part of any person in the performance of any obligation to be performed under the ICS Agreement. A true and complete copy of the ICS Agreement, including any amendments thereto, has been delivered to EKR. + +10. Liability, Insurance and Indemnities 10.1 Indemnification of EKR. PPI shall be liable for and shall defend, indemnify and hold harmless EKR and its Affiliates and their officers, directors, agents, representatives, consultants and employees (individually an "EKR Indemnified Party" and collectively the "EKR Indemnified Parties") and any of them from and against any and all Claims (as defined below), arising in connection with or relating to: + + (a) The development, manufacture, sale and supply of the Product prior to the Effective Date (including Claims arising after the Effective Date to the extent they are based on events occurring prior to the Effective Date); + + + + + + + + + + + + + + + + + + -44- + + + +(b) The manufacture of the Product by or on behalf of PPI (including, but not limited to, any manufacture of Product or any other product by EKR for the Other PPI Customers pursuant to Section 3.20(l)) except to the extent that such Claims arise from (i) the negligence or willful misconduct of EKR or its Affiliates, (ii) the breach by EKR of the terms of this Agreement or (iii) the manufacture of Product by EKR in accordance with EKR's exercise Step-in Right for supply of Product to EKR or its Affiliates; (c) Claims which arise outside the Territory (except to the extent that the Claim has arisen from any act or omission by EKR); + + (d) A breach by PPI of any representation, warranty, covenant or agreement contained in this Agreement, the Supply Agreement or the Transition Services and Inventory Agreement; + + (e) PPI's failure to comply with any Applicable Law in connection with the performance of its obligations hereunder or under the Supply Agreement or the Transition Services and Inventory Agreement, or prior to the Effective Date; and (f) Any Claims related to Product sold by parties other than EKR prior or subsequent to the Effective Date. + + (g) Liabilities arising under the ICS Agreement prior to the Effective Date and subsequent to the Effective Date for Products sold by parties other than EKR or under the direction of EKR or arising under the Transition Services and Inventory Agreement. + + + + + + + + + + + + + + + + + + + + + + -45- + +10.2 Indemnification of PPI. EKR shall be liable for and shall defend, indemnify and hold harmless PPI from and against any and all Claims arising from (i) EKR's exercise of the Distribution Rights or arising under the Transition Services and Inventory Agreement, (ii) a breach by EKR of any representation, warranty, covenant or agreement contained in this Agreement, the Supply Agreement or the Transitions Services and Inventory Agreement, or (iii) EKR's failure to comply with Applicable Laws in connection with its performance of its obligations hereunder, or (iv) Claims related to the manufacture of Products by EKR or by a Third Party Manufacturer designated by EKR pursuant to Section 11.5 of the Supply Agreement, except to the extent that such Claims: (a) relate to any act or circumstance occurring prior to the Effective Date; + + (b) relate to Intellectual Property infringement proceedings with Third Parties in connection with the PPI IP and Trademarks (except to the extent that the Claim has arisen from EKR's use of the PPI IP or Trademarks other than in accordance with this Agreement); (c) arise outside the Territory (except to the extent that the Claim has arisen from any act or omission by EKR); (d) relate to the development or manufacture of the Product by PPI or its Affiliates or its or their agents or sub-contractors; (e) Arise under the ICS Agreement after the Effective Date for Products sold by EKR. + + (f) result from the negligence, willful default or material breach of any representation or warranty given under this Agreement, the Supply Agreement, or the Transition Services and Inventory Agreement by PPI, its Affiliates or sub-contractors; or (g) are the responsibility of PPI under Section 10.1 above. + + + + + + + + + + + + + + -46- + +10.3 Conditions to Indemnification. Promptly after receipt by a Party of any Claim or alleged claim or notice of the commencement of any action, administrative or legal proceeding, or investigation as to which the indemnity provided for in this Section 10 may apply, the indemnified Party shall give written notice to the indemnifying Party of such fact. The indemnifying Party shall have the option to assume the defense thereof by election in writing within thirty (30) days of receipt of such notice. If the indemnifying Party fails to make such election, the indemnified Party may assume such defense and the indemnifying Party will be liable for reasonable legal and other expenses subsequently incurred in connection with such defense. The Parties will co-operate in good faith in the conduct of any defense, provide such reasonable assistance as may be required to enable any Claim to be properly defended, and the Party with conduct of the action shall provide promptly to the other Party copies of all proceedings relating to such action. 10.4 Assumption of Defense. Should the indemnifying Party assume conduct of the defense: + + (a) the indemnified Party may retain separate legal advisors in the event that it reasonably concludes that it may have defenses available to it which are additional to, different from or inconsistent with those available to the indemnifying Party, in which case the indemnifying Party shall not be liable for the indemnified Party's reasonable costs and expenses so incurred; and + + + +(b) the indemnifying Party will not, except with the consent of the indemnified Party (such consent not be unreasonably withheld or delayed), consent to the entry of any judgment or enter into any settlement (other than for the payment of damages by the indemnifying Party, which includes as an unconditional term a release from the claimant to the indemnified Party from all liability in respect of all claims). + + + + + + + + + + + + + + -47- + +10.5 Settlement of Claims. The indemnified Party shall not admit liability in respect of, or compromise or settle any such action without the prior written consent of the indemnifying Party, such consent not to be unreasonably withheld or delayed. 10.6 Insurance. Each Party shall maintain, at its own cost, comprehensive product liability insurance, general commercial liability insurance and business interruption insurance at a level which is reasonable and customary taking into account the nature of the Product but which shall have combined limits of not less than $[**] per occurrence. Such insurance shall be with a reputable insurance company and where reasonably possible (taking into account the availability of such insurance) shall be maintained for not less than [**] ([**]) years following the expiry or termination of this Agreement. During the Term, neither Party shall do or omit to do any act, matter or thing which could prejudice or render voidable any such insurance. Each Party will provide to the other Party evidence of its insurance and thirty (30) days prior written notice of any cancellation of its coverage or reduction in coverage from the requirements stated herein. 10.7 Third Party Liability. Each of the Parties shall be liable to the other for legal liability to Third Parties in respect of all claims, actions, judgments, damages, lawsuits, costs or expenses or professional fees for death or personal injury incurred by such other Party in relation to or arising out of any breach of this Agreement, the Transition Services and Inventory Agreement or the Supply Agreement by the first Party or of any gross negligence or willful act of the first Party, or its employees in the course of their employment. 10.8 PPI Liability Limitation. Any and all liability of PPI to EKR howsoever arising in respect of this Agreement, the Transition Services and Inventory Agreement or the Supply Agreement and their performance, in contract tort or otherwise, shall be limited (except for death or personal injury caused by the negligence of PPI or its employees while acting in the course of their employment) to [**] US Dollars ($[**]); provided + + + + + + + + + + + + + + -48- + + however that such limitation shall not apply to the extent that EKR or any EKR Indemnified Party is required to pay in excess of such amount to a third party in respect of a final judgment or order obtained by the third party or as a result of PPI's breach of Section 7.2.12 of the Supply Agreement. 10.9 EKR Liability Limitation. Any and all liability of EKR to PPI howsoever arising in respect of this Agreement, the Transition Services and Inventory Agreement or the Supply Agreement and their performance in contract tort or otherwise shall be limited (except for death or personal injury caused by the negligence of EKR or its employees while acting in the course of their employment, and except in relation to any specified payment, lump sum, milestone or royalty payment unpaid) to [**] US Dollars ($[**]); provided however that such limitation shall not apply to the extent that PPI or any PPI Indemnified Party is required to pay in excess of such amount to a third party in respect of a final judgment or order obtained by the third party. 10.10 Limitation of Damages. Notwithstanding anything contained in this Agreement or the Transition Services and Inventory Agreement or the Supply Agreement in no circumstance shall either Party be liable to the other in contract, tort (including negligence or breach of statutory duty) or otherwise howsoever, and whatever the cause thereof, for any special, indirect or consequential loss or damage of any nature whatsoever except in the cases of fraud or intentional misconduct or in the case of PPI as a result of PPI's breach of Section 7.2.12 of the Supply Agreement. 10.11 Definition of Claims. In this Section 10, "Claims" shall mean any and all claims, actions, demands, losses, damages, costs and reasonable expenses (including, without limitation, reasonable legal and expert fees) made or brought by Third Parties. + +11. Confidentiality, Press Releases and Publications 11.1 Confidential Information. PPI and EKR undertake to each other to keep confidential, and to procure that their respective Affiliates, employees, directors, officers, contractors, lawyers and accountants (including those of their Affiliates) keep confidential, Confidential Information disclosed to it by or belonging to the other Party. + + + + + + + + + + + + + + + + -49- + +11.2 Third Party Disclosure. Any Confidential Information received from the other Party shall not be disclosed to any Third Party or used for any purpose other than as provided or specifically envisaged by this Agreement or as required in connection with any securities offering, financing, merger, acquisition or other corporate transaction involving such Party provided that any Party to whom such disclosure is made is bound by obligations as to confidentiality that are at least as protective of Confidential Information as those contained herein. 11.3 Duration. The confidentiality and non-use obligations contained in this Agreement shall continue for the duration of this Agreement and for a period of [**] ([**]) years after termination for any reason of this Agreement. 11.4 Public Announcements. The Parties shall consult with each other, in advance, with regard to the terms of all proposed press releases, public announcements and other public statements with respect to the transactions contemplated under this Agreement. The Parties acknowledge that they have issued a joint press release in the form set out in Schedule VI of this Agreement. 11.5 Exceptions to Disclosure of Confidential Information. The Confidential Information may be disclosed by the other Parties to the extent that such disclosure has been ordered by a court of law or directed by a governmental authority, provided that, wherever practicable, the Party disclosing the Confidential Information has been given sufficient written notice in advance to the other Party to enable it to seek protection or confidential treatment of such Confidential Information, and may be disclosed only to the extent that such disclosure has been so ordered or directed. + +12. Patents 12.1 Maintenance. PPI shall pay all costs and expenses of the filing, prosecution and maintenance of the PPI Patents in each country of the Territory so as to maintain the + + + + + + + + + + + + + + + + -50- + + PPI Patents in full force and effect. PPI will consult with EKR with respect to any notice from or correspondence with the USPTO or any other governmental entity with respect thereto and the development, filing and prosecution of any subdivisions, continuations, continuations in part or additional applications related to the Product for use in the Field in the Territory. + +13. Infringement of Third Party Rights 13.1 Notice of Infringement. In the event of a Party becoming aware that the exercise of either Party's rights and obligations pursuant to this Agreement are infringing or may infringe the rights of a Third Party, it will promptly notify the other Party and provide it with such details of the Third Party rights and the extent of the infringement as are known to it. 13.2 Infringement of Third Party IP. In the event a claim of infringement of a Third Party's intellectual property rights arising out of the manufacture, use, sale, promotion or distribution of the Products is brought against either Party, PPI shall defend such action at its cost and expense and take one or more of the following actions simultaneously or sequentially: + + (a) Defend the claim and indemnify and hold harmless EKR, its Affiliates, officers, directors, shareholders, employees, representations, consultants and agents (the "EKR Infringement Indemnitees") as set forth in Section 13.3 below. + + (b) Obtain for itself as the benefit of EKR the right through license or otherwise to utilize the technology upon which the claim of infringement was based. Such rights obtained by PPI from a Third Party under this Section 13.2 shall be licensed or sublicensed to EKR at no additional cost to EKR. 13.3 Infringement Indemnification. Notwithstanding any other provisions of this Agreement, PPI will defend, indemnify and hold harmless the EKR Infringement + + + + + + + + + + + + -51- + + + +Indemnitees from and against all liabilities, losses, damages, actions, claims and expenses suffered or incurred by the EKR Infringement Indemnitees (including reasonable attorneys fees, court costs and expert witnesses' fees) resulting from any claims by any Third Party that EKR's exercise during the Term of the rights granted under this Agreement infringes or violates any license, patent, copyright, trademark or other intellectual property right of that Third Party. + +14. Infringement of PPI IP 14.1 Notice of Infringement. In the event that either Party becomes aware of any actual or suspected infringement or misuse of the PPI IP or Trademarks in the Territory by a Third Party ("Third Party Infringement"), it shall promptly notify the other Party and provide it with all details thereof in its possession. 14.2 Infringement Action. Within a reasonable time of becoming aware of such Third Party Infringement, the Parties shall consult with each other and their respective counsel to develop a strategy for addressing the Third Party Infringement. In the event the Parties agree to the legal action to stop the Third Party Infringement, they shall agree upon legal counsel to prosecute such action and unless the Parties otherwise agree, PPI shall prosecute the action at its cost and expense. EKR shall provide all such assistance at PPI's cost and expense as PPI may reasonably require in the prosecution or defense of any such proceedings. 14.3 Awards. Any damages, award or settlement monies actually received by PPI in respect to such infringement and paid in compensation for sales lost by EKR shall be deemed Net Sales and be paid to EKR, subject to PPI deducting its costs and expenses in pursuing such infringement from such damages, award or settlement actually received. Any damages, award or settlement monies actually received by PPI in respect to such infringement and not paid in compensation for sales lost by EKR shall be shared equally by the Parties. + + + + + + + + + + -52- + +14.4 Non Participation. Should in accordance with Section 14.2, PPI decide not to participate in any such infringement action, EKR may require PPI to bring the action, subject to reimbursement by EKR for reasonable out-of-pocket expenses incurred by PPI in connection with such action. The selection of counsel and all other material decisions with respect to such action shall be subject to EKR's prior, written approval, such approval not to be unreasonably withheld. In addition, EKR shall have the right to discontinue the prosecution of any such action at any time upon written notice to PPI. Except as provided above in this Section 14.4, PPI shall have control of such action but shall consult with EKR regarding the conduct of such action and shall not settle such action without the prior written consent of EKR, which consent shall not be unreasonably withheld, and EKR may, in such instance, retain any award or settlement in its entirety. Notwithstanding the foregoing, PPI shall offer reasonable assistance to EKR at no charge except for reimbursement of reasonable out of pocket expense including reasonable attorneys fees. 14.5 Cooperation. Each Party shall keep the other Party reasonably informed and consult with the other Party with regard to any infringement action under this Article 14. + +15. Term 15.1 This Agreement shall commence on the Effective Date and, subject to earlier termination in accordance with the provisions of Section 16, shall continue in force for a period being the longer of fifteen (15) years from first Commercial Launch of the Product in the Territory or until the expiration of the last valid claim in the PPI Patents covering the Product in any country of the Territory (the "Initial Term"). Thereafter the term of this Agreement shall automatically renew for consecutive periods of two (2) years each. Notwithstanding the foregoing, this Agreement can be terminated by EKR at the end of the Initial Term by delivery of written notice to PPI at least one hundred eighty (180) days prior to the end of the Initial Term or any renewal term. As used herein "Term" refers to the Initial Term and any renewal terms. + + + + + + + + + + + + + + + + + + -53- + +16. Termination 16.1 Prior Termination by Either Party. Either Party shall be entitled forthwith to terminate this Agreement by notice to the other if: + + (a) the other Party commits a material breach of any material obligation under this Agreement or the Supply Agreement, and in the case of a breach which is capable of remedy fails to remedy it within sixty (60) days of receipt of notice from the first Party of such breach and of its intention to exercise its rights under this Section; or + + + +(b) any representation or warranty made herein or in the Supply Agreement by such other Party proves to be incorrect when made which has a material adverse effect on the performance of the other Party's obligations hereunder and in the case of a breach which is capable of remedy fails to remedy it within sixty (60) days of receipt of notice from the first Party of such breach and of its intention to exercise its rights under this Section; or + + + +(c) the entry of a decree or order for relief by a court having jurisdiction in the premises in respect of the other Party in an involuntary case under the United States Bankruptcy Code, as now constituted or hereafter amended, or any other applicable foreign, federal or state insolvency or other similar law and the continuance of any such decree or order unstayed and in effect for a period of sixty (60) consecutive days; or + + (d) the filing by the other Party of a petition for relief under the United States Bankruptcy Code, as now constituted or hereafter amended, or any other applicable foreign, federal or state insolvency law or other similar law; or + + (e) the other Party becomes insolvent or takes the benefit of any statute for insolvent debtors or any steps are taken or proceedings commenced by any person for the dissolution, winding-up or other termination of such other Party's existence or the liquidation of its assets; or + + + + + + + + + + + + + + + + + + + + + + + + -54- + + (f) a trustee, receiver, receiver-manager or like person is appointed with respect to the business or assets of the other Party; or + + (g) the other Party proposes or makes any composition or arrangement or composition with, or any assignment for the benefit of, its creditors; or + + (h) anything analogous to any of the events described in Sections 16.1(c)-(k) - 16.1.6, inclusive, occurs under the laws of any applicable jurisdiction; or (i) the other Party ceases or threatens to cease to carry on the whole or any material part of its business; or + + + +(j) for reasons unrelated to any breach of either Parties' duties or obligations under or in connection with this Agreement, the other Party is prevented from performing any of its material obligations hereunder by any law, governmental or other action (other than laws of general application) and has not resumed performance in compliance with all Applicable Laws within one hundred twenty (120) days following the date on which such performance was first provided; or (k) in accordance with Section 18.2 below. 16.2 Prior Termination by PPI. (a) Reserved. + + (b) PPI may terminate this Agreement with immediate effect in any country of the Territory where EKR is obligated to launch the Product pursuant to Section 4.5 if within [**] months of the receipt of the Marketing Authorization for such country, EKR has not made its first Commercial Launch of the Product in that country. + + (c) In the event PPI has terminated the Supply Agreement pursuant to Section 10.2 thereof and EKR or its designee is manufacturing Products pursuant to Section 11.5 of the Supply Agreement, PPI shall have the right to terminate such rights of manufacture and this Agreement upon thirty (30) + + + + + + + + + + + + + + + + + + -55- + + days prior, written notice to EKR only in the event Royalties and Additional Royalties paid hereunder in any one year period following the date of such termination are less than $[**], unless the difference between $[**] and the actual Royalties and Additional Royalties paid by EKR is paid to PPI within thirty (30) days of notice of such termination. 16.3 Prior Termination by EKR. + + (a) EKR may terminate this Agreement with immediate effect in any country of the Territory if the Products are withdrawn from the market in such country of the Territory as a result of regulatory action by FDA or other governmental entities or there are significant adverse reactions from use of the Products. (b) EKR may terminate this Agreement for convenience at any time upon [**] ([**]) days prior, written notice to PPI. 16.4 Effect of Termination. The termination or expiration of this Agreement shall not release either of the Parties from any liability which at the time of termination or expiry has already accrued to the other Party, nor affect in any way the survival of any other right, duty or obligation of the Parties which is expressly stated elsewhere in this Agreement to survive such termination or expiry. + +17. Consequences of Termination 17.1 Upon termination of this Agreement for any reason except as set forth in Section 17.4 below (and, if applicable, in respect of that country in respect of which termination occurs): + + (a) the licenses and rights granted and appointments made under Sections 2.1, 2.2 and 2.3 shall terminate and EKR shall (and shall procure that its Affiliates, sub-distributors and sub-licensees shall) cease all activities licensed or appointed hereunder, subject to Sections 17.2 and 17.3; + + + + + + + + + + + + + + + + -56- + + + +(b) the following provisions of this Agreement shall continue in full force and effect: Article 1 ("Definitions"), Section 3.20(k), Section 3.20(l), Article 9 ("Representations and Warranties"), Article 10 ("Liability, Insurance and Indemnities") (excluding Section 10.6 ("Insurance")), Article 11 ("Confidentiality, Press Releases and Publications"), Article 13 ("Infringement of Third Party Rights"), Section 16.4 ("Effect of Termination"), Article 17 ("Consequences of Termination"), Article 18 ("Force Majeure"), Article 19 ("Notices"), Article 20 ("Assignment and Change of Control") and Article 21 ("General Provisions"); (c) EKR shall return to PPI all PPI IP in its possession; (d) EKR shall assign to PPI free of charge any domain name registrations it has registered pursuant to Section 8.5; and + + (e) Except in the event of termination of this Agreement by EKR pursuant to Section 16.1(a), EKR shall promptly transfer to PPI or its nominee, each and every Marketing Authorization (to the extent not held by PPI) relating to the Product, together with all communications with the relevant Regulatory Authorities, and all notes and record thereof. 17.2 Sale of Remaining Inventory. Where this Agreement has expired or has been terminated for any reason other than by PPI in accordance with Section 16.1 or EKR in accordance with Section 16.3(b), EKR and its Affiliates and sub-distributors and sales agents shall be entitled to continue to sell existing stocks of the Product in the Territory for a period of not longer than 12 months following the date of termination, provided that, EKR continues to make any Royalty payments due to PPI in respect of such sales in accordance with the provisions of this Agreement. 17.3 Other Rights upon Termination. In the event that this Agreement is terminated by PPI in accordance with Section 16.1 or EKR in accordance with Section 16.3(b), EKR and its Affiliates, sub-distributors and sub-licensees shall be entitled to continue to sell + + + + + + + + -57- + + + +existing stocks of the Product in the Territory for so long as PPI deems necessary to ensure that sale of the Product is not disrupted provided that EKR and its Affiliates shall cease such sale immediately upon notification from PPI and in any event EKR shall not so sell for a period of longer than three (3) months following the date of termination. Immediately upon notification from PPI, such post termination sales shall cease. 17.4 Other Remedies of EKR. Notwithstanding anything contained herein to the contrary, in the event that EKR is entitled to exercise its right to terminate this Agreement pursuant to Section 16.1(a), in addition to the right to terminate as provided therein and any other remedies EKR may have hereunder, PPI shall assist EKR in the transfer of the manufacture of the Products, including the Specifications from PPI to EKR or EKR's designee. In such event, the Royalty payments payable hereunder shall continue to be paid; provided, however, that all costs incurred by EKR in the transfer of manufacturing information from PPI and obtaining FDA approval of the manufacture of the Products by EKR or EKR's designee, and any other amounts due to EKR, shall be deducted from any royalties payable to PPI. In addition, PPI shall during the remainder of the Term and for a period of up to [**] ([**]) years thereafter continue to manufacture and supply the Product to EKR at cost without mark-up until such time that EKR can secure an FDA approved manufacturing facility for the Product. PPI shall provide such advice as necessary for EKR to arrange for an alternative manufacturer and shall provide EKR with access to all relevant PPI Know-How, and any other information necessary for EKR to transfer such manufacturing to an alternate manufacturer. In addition, (i) PPI shall transfer to EKR any Marketing Authorizations held by PPI and (ii) the Trademark license granted under Section 2.3 shall continue in effect following such termination on a perpetual basis and EKR shall be responsible for all costs associated with the maintenance of such Trademark. + + + + + + + + + + + + + + -58- + +17.5 EKR Step-In Rights. + + + +(a) During the Term, in the event EKR has the right to terminate this Agreement under Section 16.1(a) - (i) hereof (the "Step-in Right Trigger Event"), and EKR does not exercise its right to terminate this Agreement under such Section, EKR shall have the option to exercise step-in rights to manufacture the Product for the remainder of the Term (the "Step-in Right") by providing PPI written notice of such election within ninety (90) days after the Step-in Right Trigger Event (or such longer period as mutually agreed by the Parties) (the "Step-in Right Notice"); provided that in the event such Step-in Right Trigger Event has been cured prior to EKR's exercise of the Step-in Right, the Step-in Right shall terminate with respect to such Step-in Right Trigger Event. The Step-in Right Notice shall specify the date which EKR intends to exercise the rights associated with the Step-in Right. + + (b) In the event EKR exercises the Step-in Right, PPI shall, at EKR's cost and expense, cooperate in the exercise of such rights and EKR shall reimburse PPI for the reasonable costs PPI incurs in assisting EKR in the exercise of such rights within thirty (30) days of EKR's receipt of invoice. + + + +(c) The Step-in Right shall include, without limitation, and to the extent allowable under Applicable Law, PPI's grant to EKR of such additional license rights, rights of access, rights of observation and rights of management, direction and control, in each case solely with respect to the manufacture and supply of Product and as reasonably necessary to enable and permit EKR (or EKR's designee) to ensure that the supply of Product shall continue to be available to EKR under this Agreement and the Supply Agreement; provided that EKR in exercising the Step-in Right shall not (i) unreasonably interfere with PPI's other activities at the facilities at which the Product is manufactured, tested, labeled, stored or + + + + + + + + + + -59- + + + +otherwise handled ("Product Facilities") or (ii) require PPI to take any action or fail to take any action that does or could reasonably be expected to interfere with PPI's other activities at the Product Facilities. The foregoing rights shall apply with respect to any Product Facility to the extent necessary for EKR to preserve and protect supply of the Product as contemplated by this Agreement and the Supply Agreement. For the avoidance of doubt, (i) upon termination of the Lease Term, PPI shall maintain responsibility and control over all other products manufactured by PPI and nothing in this Section 17.5 shall give EKR any rights to direct, manage or control the manufacture of such products (ii) PPI shall maintain responsibility and control over the facilities where Product is manufactured, tested, labeled, stored or otherwise handled and nothing in this Section 17.5 shall give EKR general oversight or control of the facilities where Product is manufactured, tested, labeled, stored or otherwise handled. + + (d) In the event EKR exercises the Step-in Right, EKR shall comply with all policies applicable to the facilities where Product is manufactured, tested, labeled, stored or otherwise handled and all Applicable Laws with respect to the manufacture of the Product. + +18. Force Majeure 18.1 Obligation to Perform. Except for payment obligations which shall not be excused or affected by any Force Majeure, neither Party shall be entitled to terminate this Agreement or shall be liable to the other under this Agreement for loss or damages attributable to any Force Majeure, provided the Party affected shall give prompt notice thereof to the other Party. Subject to Section 18.2, the Party giving such notice shall be excused from such of its obligations hereunder for so long as it continues to be affected by Force Majeure. + + + + + + + + + + + + + + + + -60- + +18.2 Duration. If such Force Majeure continues unabated for a period of at least ninety (90) days, the Parties will meet to discuss in good faith what actions to take or what modifications should be made to this Agreement as a consequence of such Force Majeure in order to alleviate its consequences on the affected Party. If the affected Party is prevented by reason of any circumstances referred to in this Section of this Agreement from performing any of its obligations hereunder for a continuous period of six (6) months the other Party may terminate this Agreement. + +19. Notices 19.1 Form. Any notice or other document given under this Agreement shall be in writing in the English language and shall be given by hand or sent by U.S. prepaid first class registered or certified mail, return receipt requested, recognized national overnight courier service, or by fax transmission to the address of the receiving Party as set out in Section 19.3 below unless a different address or fax number has been notified to the other in writing for this purpose. 19.2 Delivery. Each such notice or document shall: (a) if sent by hand, be deemed to have been given when delivered at the relevant address; (b) if sent by prepaid airmail, be deemed to have been given 7 days after posting; or + + (c) if sent by fax transmission be deemed to have been given when transmitted provided that a confirmatory copy of such facsimile transmission shall have been sent by hand, U.S. prepaid first class registered or certified mail, return receipt requested, or recognized national overnight courier service within 24 hours of such transmission. + + + + + + + + + + + + + + + + -61- + +19.3 Notice of Parties. The address for services of notices and other documents on the Parties shall be: + +To EKR To PPI + +Address: + + + +1545 Route 206 South Third Floor Bedminster, NJ 07921 + +Address: + + + +10450 Science Center Drive, San Diego, California 92121 USA + +Fax: Fax: 858 623 0376 + +Attention: Chairman & CEO Attention: President + +With a copy to: With a copy to: + +Lowenstein Sandler 65 Livingston Avenue Roseland, New Jersey 07068 + +Wilmer Cutler Pickering Hale & Dorr LLP 1117 S California Avenue Palo Alto, CA 94304 USA + +Fax: 973-597-6395 Fax: 650-858-6100 Attention: Michael J. Lerner Attention: Joseph K. Wyatt + +20. Assignment and Change of Control 20.1 Assignment. Subject to Section 20.2, neither Party shall, nor shall it purport to, assign, license, transfer or change any of its rights or obligations under this Agreement without the prior written consent of the other, such consent not to be unreasonably withheld conditioned or delayed; provided, however, that except as provided in Section 20.4 either Party may assign its rights hereunder to an Affiliate or to any successor by merger, consolidation, sale of stock or other equity interests or the sale of substantially all of the assets of such Party without the consent of the other Party. For the avoidance of doubt, either Party may grant a security interest with respect to its rights under this Agreement in connection with a secured financing or similar transaction. 20.2 Sub-Distribution. EKR may appoint sub-distributors under this Agreement provided that EKR: + + (a) informs PPI of the identity of any Third Party sub-distributor (other than Affiliate companies) prior to the execution of any sub-distribution agreement; + + + + + + + + + + + + + + -62- + + (b) obtain a confidential nondisclosure agreement with the prospective Sub-Distributor in a form acceptable to PPI, which acceptance shall not be unreasonably withheld or delayed and containing terms at least as stringent as those terms included in Article 11 of this Agreement; + + (c) deliver to the prospective Sub-Distributor a redacted copy of this Agreement ("Redacted Agreement") . Any sub- distribution agreement shall provide that such agreement is subject and subordinate to the rights of PPI under this Agreement; and + + (d) provides PPI with a copy of written sub-distribution agreement as soon as reasonably practicable after the execution thereof by EKR. 20.3 Responsibility of EKR. Notwithstanding any such sub-distribution agreement, EKR shall remain primarily liable to PPI for its obligations hereunder, and for any act or omission of any sub-distributor. 20.4 Change of Control. Should there be a Change of Control of either Party resulting in the control of such Party by a Third Party which markets or sells a Competing Product in any part of the Territory, then the rights under this Agreement may not be assigned without the express consent of the other Party which consent shall not be unreasonably withheld. "Change of Control" shall mean (a) the sale, lease, exchange, license or disposition of all or substantially all of the Party's assets in one transaction or series of related transactions or (b) a merger or consolidation with an unaffiliated Third Party as a result of which the holders of the Party's issued and outstanding voting securities immediately before such transaction own or control less than a majority of the voting securities of the continuing or surviving entity immediately after such transaction. The issuance by either Party of securities in connection with any financing transaction or + + + + + + + + + + + + + + + + + + -63- + + + +public offering shall not be deemed a Change of Control under this Agreement. Notwithstanding the foregoing, for the purposes of Section 6.3(b)(iii): (i) references to a "Party" in the above definition of Change of Control shall be deemed to include PPI as well as any Affiliate of PPI and (ii) a Change of Control shall also include (in addition to any of the transactions described above in the definition of Change of Control), any sale of securities of PPI or its Affiliates directly by the holder (the "Holder") of such securities (other than to an Affiliate of such Holder) in which such sale results in a transfer of more than 50% of the outstanding voting stock of PPI or its Affiliates. + +21. General Provisions 21.1 Relationship of the Parties. Nothing in this agreement is deemed to constitute a partnership, agency, employer-employee or joint venture relationship between the Parties. No Party shall incur any debts or make any commitments for the other, except to the extent, if at all, specifically provided herein. 21.2 Dispute Resolution. If there is a disagreement between the PPI and EKR on the interpretation of this Agreement or any aspect of the performance by either Party of its obligations under this Agreement, the Parties shall resolve the dispute in accordance with the dispute resolution procedure set out in Schedule VIII. 21.3 Cooperation. Each of the Parties shall do execute and perform and shall procure to be done executed and performed all such further acts deeds documents and things as the other Party may reasonably require from time to time to give full effect to the terms of this Agreement. 21.4 Expenses. Each Party shall pay its own costs, charges and expenses incurred in connection with the negotiation, preparation and completion of this agreement. 21.5 Entire Agreement. This Agreement (together with the Transition Services and Inventory Purchase Agreement and the Supply Agreement) sets out the entire agreement and understanding between the Parties in respect of the subject matter hereof and thereof. This Agreement supersedes the Original Agreement and any heads of agreement which shall cease to have any further force or effect. It is agreed that: + + (a) no Party has entered into this Agreement in reliance upon any representation, warranty or undertaking of the other Party which is not expressly set out in this Agreement; + + + + + + + + + + + + + + + + + + -64- + + (b) no Party shall have any remedy in respect of misrepresentation or untrue statement made by the other Party or for any breach of warranty which is not contained in this Agreement; (c) this Section shall not exclude any liability for, or remedy in respect of, fraudulent misrepresentation. 21.6 Amendment. No amendment, change or modification of any of the terms, provisions or conditions of this Agreement shall be valid unless it is in writing and signed by or on behalf of both Parties. 21.7 Waiver. Unless expressly agreed, no waiver of any term, provision or condition of this Agreement shall constitute a general waiver of any provisions of this Agreement, nor shall it affect any rights, obligations or liabilities under or pursuant to this Agreement which have already accrued up to the date of variation, and the rights and obligations of the Parties under or pursuant to this Agreement shall remain in full force and effect, except and only to the extent that they are so waived. 21.8 Unenforceability. If and to the extent that any provision of this Agreement is held to be illegal, void or unenforceable, such provision shall be given no effect and shall be deemed not to be included in this Agreement but without invalidating any of the remaining provisions of this Agreement. 21.9 Delay. No failure or delay by either Party in exercising any right or remedy provided by law under or pursuant to this Agreement shall impair such right or remedy or operate or be construed as a waiver or variation of it or preclude its exercise at any subsequent time and no single or partial exercise of any such right or remedy shall preclude any other or further exercise of it or the exercise of any other right or remedy. + + + + + + + + + + + + + + + + + +(signature page follows) -65- + +21.10 Cumulative Rights. The rights and remedies of each of the Parties under or pursuant to this Agreement are cumulative, may be exercised as often as such Party considers appropriate and are in addition to its rights and remedies under general law. 21.11 Counterparts. This Agreement may be executed in any number of counterparts and by the Parties on separate counterparts, each of which is an original but all of which together constitute one and the same instrument. 21.12 Reserved. 21.13 Governing Law. This Agreement and the relationship between the Parties shall be governed by, and interpreted in accordance with New York law without regard to provisions related to conflicts of laws, and, except as provided in Section 21.2 above, the Parties agree to submit any dispute to the exclusive jurisdiction of the federal and state courts sitting in New York. 21.14 Successors and Assigns. Subject to Section 20.1, this Agreement shall be binding upon and shall inure to the benefit of the Parties hereto and their respective successors and assigns permitted under this Agreement. 21.15 Systems. Immediately upon the Effective Date, or as soon thereafter as practicable, the Parties shall implement a mutually acceptable operation plan to transfer the processing of chargebacks, federal releases, state releases and customer services from PPI to EKR. + + + + + +AS WITNESS the hands of the Parties or their duly authorized representatives effective as of the Effective Date. + + -66- + +SIGNED for and by behalf of ) By: /s/ David Stack PACIRA PHARMACEUTICALS, INC. ) David Stack Print Name + +SIGNED for and by behalf of ) By: /s/ Richard DeSimone EKR THERAPEUTICS, INC. Richard DeSimone, CFO Print Name + + + + + +SCHEDULE I + +PATENTS + + -67- + +[**] Attorneys' Ref: Country Application date Application no. Patent/ Publication no. Grant date Expiry date Status [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] + +[**] Attorneys' Ref: Country Application date Application no. Patent/ Publication no. Grant date Expiry date Status [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] + +[**] + +Attorneys' Ref: Country Application date Application no. + +Patent/ Publication no. Grant date Expiry date Status [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] + +[**] Attorneys' Ref: Country Application date Application no. Patent/ Publication no. Grant date Expiry date Status [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] + + + + + + + + + + -68- + +[**] + +Attorneys' Ref: Country Application date Application no. + +Patent/ Publication no. Grant date Expiry date Status [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] * Publication date of Application - 13 Apr 06. + +[**] Attorneys' Ref: Country Application date Application no. Patent/ Publication no. Grant date Expiry date Status [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] [**] + + + + + +SCHEDULE II TRADEMARKS + +[**] - Owner of Record, United States Patent Trademark Office website. Record of Assignment from [**]. to [**] is in process. -69- + +File Date: Serial No.: International Class: First Use: First Use in Commerce: Registration Date: Registration No.: Mark: + +[**] + + + +File Date: Serial No.: International Class: First Use: First Use in Commerce: Registration Date: Registration No.: Mark: + +[**] + + + +File Date: Serial No.: International Class: First Use: First Use in Commerce: Registration Date: Registration No.: Mark: + +[**] + + + +*[**] Trademark Application + +File Date: Serial No.: International Class: Mark: + +[**] + + + + + + + +SCHEDULE III + +COPYRIGHTS + +There are no recorded copyrights -70- + + + + + +SCHEDULE IV + +DOMAIN NAMES + +DepoDur.com -71- + + + + + +SCHEDULE V + +MARKETING AUTHORIZATIONS + +United States Food and Drug Administration New Drug Application: [**] -72- + + + + + + + + + +News Release + +EKR Therapeutics Achieves Key Growth Milestone with the Acquisition of Rights to DepoDur®, a Novel Extended-Release Opioid Analgesic for Post Operative Pain + +Cedar Knolls, N.J., August X, 2007 - EKR Therapeutics, Inc., a specialty pharmaceutical company focused on acquiring, developing, and commercializing proprietary products to enhance patient quality-of-life in the acute care setting, today announced it has acquired exclusive marketing and distribution rights to DepoDur for the Americas from San Diego-based Pacira Pharmaceuticals who retains manufacturing rights to the product. + +Formerly a business unit of SkyePharma, plc, Pacira Pharmaceuticals is an independent private company focused on developing and manufacturing controlled-release injectable products based on their DepoFoam™ and Biosphere™ drug delivery platforms. + +DepoDur, which utilizes the DepoFoam technology, is a sterile injectable suspension of multivesicular liposomes formulated to provide extended release of morphine sulfate. It is the only extended-release opioid that is approved by the Food and Drug Administration for epidural use. A single injection of DepoDur into the lumbar epidural space may provide pain relief for up to 48 hours following major surgery without the restrictions and potential complications associated with an indwelling epidural catheter. + +"The product characteristics of DepoDur fit exceptionally well with EKR's acquisition model," said Howard Weisman, EKR's Chairman & CEO. "DepoDur is patent protected, addresses an important medical need in our market space, and has growth prospects that can be fully exploited through the application of EKR's expertise and strengths in the acute care market." + +Mr. Weisman further noted, "EKR is commencing a number of pre-launch activities, including interacting with opinion leaders, and we expect to fully deploy our sales force in support of DepoDur early next year." He concluded, "We are very optimistic about EKR's growth prospects in 2008 as we foresee a ramp up in sales for both DepoDur and Gelclair® and anticipate favorable market synergies between these products." Gelclair, which is marketed to acute care facilities and cancer centers, is indicated for the management of pain associated with oral lesions of various etiologies, including chemotherapy and radiation induced oral mucositis/stomatitis. + +Tong Zhang, Ph.D., Director of Business Development for EKR, added, "Acquiring the rights to DepoDur exemplifies EKR's strategy of focusing on building a portfolio of premier products in the acute care space." He further noted, "Our strict acquisition criteria center on high-margin, innovative products that offer value to healthcare providers and their patients, thus, representing excellent opportunities for EKR to realize strong returns on investment." -73- + + + + SCHEDULE VI + + PRESS RELEASE + +® + + + + + +"Pacira Pharmaceuticals is delighted to have EKR Therapeutics as our marketing and commercialization partner for DepoDur in the Americas," commented Fred Middleton, Pacira's Chairman of the Board. "This product was clinically developed as a proprietary treatment by Pacira R&D and it received FDA approval in 2004 for long-acting post surgical pain management, for which it is known to be effective." + +Mr. Middleton further noted, "EKR Therapeutics has demonstrated in the past that they possess the strengths to successfully bringing a focused marketing and clinician targeting approach to DepoDur to help it reach its full commercial potential. We look forward to working with EKR, as our partner on the expanded commercial marketing of DepoDur." + +Detailed terms of the transaction were not disclosed. However, EKR did note that in addition to royalty payments on net sales, it has agreed to an upfront payment amounting to somewhat more than [**] times DepoDur's 2006 U.S. sales. EKR has also agreed to certain milestone payments with the sum of upfront and milestone payments potentially worth up to $20 million. + +About EKR Therapeutics EKR Therapeutics is a privately held specialty pharmaceutical company that has brought together a highly seasoned team of industry professionals The Company focuses on the acquisition, development and commercialization of proprietary products for the acute care segment of the healthcare market, including oncology supportive care therapeutics. From its inception in late 2005, EKR has been organized to be a class leader in commercializing products to address unmet and under-satisfied medical needs or to otherwise enhance the therapeutic value of acute-care prescription products. EKR's goal is to be the pre-eminent provider of acute-care specialty products, backed by a commitment to excellence in customer service. For additional information about EKR visit the Company's website at http://www.ekrtx.com. + +About Pacira Pharmaceuticals, Inc. Pacira Pharmaceuticals, Inc. is a wholly owned subsidiary of Pacira Inc., a Delaware corporation, which is controlled and funded by a group of financial investors including Sanderling Ventures, HBM Bioventures (Cayman) Ltd, OrbiMed Advisors, and MPM Capital. This business is based in San Diego, CA, and focuses on formulating, developing and manufacturing controlled-release injectable products based on two proprietary drug delivery platforms: DepoFoam and Biosphere . Revenues are generated from two marketed products: DepoCyt for lymphomatous meningitis and DepoDur for the treatment of post-surgical pain. For additional information about Pacira visit the Company's website at http://www.pacira.com + +#### + +Contact for EKR Therapeutics Stuart Z. Levine, Ph.D. Corporate Communications 877-435-2524 s.levine@ekrtx.com -74- + +TM TM ® + +® + + + + + +SCHEDULE VII + +THE TERRITORY + +all countries in North America including the United States, its territories as possessions including Puerto Rico, South America and Central America -75- + + + + + +SCHEDULE VIII + +DISPUTE RESOLUTION + + + + + +Appointment of an Expert + + + + + + + + + + + + -76- + +1.1 Representatives of the Parties will, within 14 days of receipt of a written request from either Party to the other, convene a meeting of the Committee to discuss in good faith and try to resolve the disagreement without recourse to legal proceedings. 1.2 If resolution does not occur within 7 days after meeting, the matter shall be escalated for determination by the respective Chief Executive Officer of the Parties who may resolve the matter themselves or jointly appoint a mediator or independent expert to do so. 1.3 Nothing in this Agreement restricts either Party's freedom to seek urgent relief to preserve a legal right or remedy, or to protect a proprietary, trade secret or other right. + +1.4.1 In the event that the Chief Executive Officers are unable to resolve the dispute and the dispute has a monetary value of cost of [**] dollars ($[**]) or more, the dispute shall be submitted to the federal or state courts located in the State of California, which shall have exclusive jurisdiction over such dispute. 1.4.2 In the event that the Chief Executive Officers are unable to resolve the dispute and the dispute has a monetary value of cost of less than [**] dollars ($[**]), and the Parties do not agree on the appointment of an expert to resolve the dispute, or mediation has failed to resolve the dispute, one Party shall serve on the other a written Referral Notice requesting that the matter be referred to an expert for resolution, and the following procedure shall be followed. + + 1.4.1 The dispute shall be determined by a single independent impartial expert who shall be agreed between the Parties or, in the absence of agreement between the Parties within 30 days of the service of a Referral Notice, be appointed by the American Arbitration Association or any successor thereto, or such other competent body agreed by the Parties. + + 1.4.2 30 days after the appointment of the expert pursuant to paragraph 1.4.1 both Parties shall exchange simultaneously statements of case in no more than 10,000 words, in total, and each side shall simultaneously send a copy of its statement of case to the expert. + + 1.4.3 Each Party may, within 30 days of the date of exchange of statement of case pursuant to paragraph 1.4.2, serve a reply to the other side's statement of case in no more than 10,000 words. A copy of any such reply shall be simultaneously sent to the expert. + + 1.4.4 Subject to paragraph 1.4.6, there shall be no oral hearing. The expert shall issue his decision in writing to both Parties within 30 days of the date of service of the last reply pursuant to paragraph 1.4.3 above or, in the absence of receipt of any replies, within 60 days of the date of exchange pursuant to paragraph 1.4.2. + + + + + + + + + + + + + + + + + + -77- + + 1.4.5 The seat of the dispute resolution shall be the normal place of residence of the expert. + + 1.4.6 The expert shall not have power to alter, amend or add to the provisions of this Agreement, except that the expert shall have the power to decide all procedural matters relating to the dispute, and may call for a one day hearing if desirable and appropriate. + + 1.4.7 The expert shall have the power to request copies of any documents in the possession and/or control of the Parties which may be relevant to the dispute. The Parties shall forthwith provide to the expert and the other Party copies of any documents so requested by the expert. + + 1.4.8 The decision of the expert shall be final and binding upon both Parties except in the case of manifest error. The Parties hereby exclude any rights of application or appeal to any court, to the extent that they may validly so agree, and in particular in connection with any question of law arising in the course of the reference out of the award. + + 1.4.9 The expert shall determine the proportions in which the Parties shall pay the costs of the expert's procedure. The expert shall have the authority to order that all or a part of the legal or other costs of a Party shall be paid by the other Party. + + 1.4.10 All documents and information disclosed in the course of the expert proceedings and the decision and award of the expert shall be kept strictly confidential by the recipient and shall not be used by the recipient for any purpose except for the purposes of the proceedings and/or the enforcement of the expert's decision and award. + + + + + +SCHEDULE IX + +SALES FORECAST + + + +While we continue to work on our marketing plan and forecast, based on the current run rate of approximately [**] to [**] units per month, you can expect that our plan will call for the following forecast: + + -78- + +Date: July 25, 2007 From: [**], EKR Therapeutics, Inc. To: [**], Pacira Re: DepoDur Unit Sales Forecast, as of July 25, 2007 + +Period + +Unit Sales Forecast August 1 - December 31, 2007 [**] January 1 - December 31, 2008 [**] January 1 - December 31, 2009 [**] + + + + + +SCHEDULE X + +PHASE IV STUDIES + +A DepoDur study in pediatric patients. Pacira has requested a waiver and is awaiting a response from the FDA -79- + + + + + +SCHEDULE XI + +NDA TRANSFER LETTERS + +A. Transfer Letter to be Filed by PPI + +[PACIRA PHARMACEUTICALS, INC. LETTERHEAD] + + , 2009 + +VIA OVERNIGHT MAIL + +[NAME AND ADDRESS OF APPROPRIATE FDA CONTACT TO BE PROVIDED] + +General Correspondence: Transfer of NDA Ownership + +Dear : + +Effective , 2009, pursuant to 21 CFR 314.72, DepoDur NDA [**] is hereby transferred from Pacira Pharmaceuticals, Inc. to EKR Therapeutics, Inc., 1545 Route 206 South, Third Floor, Bedminster, New Jersey 07921 (Regulatory Contact: , telephone ). + +As a condition of this transfer of ownership, Pacira will provide to EKR Therapeutics all available information pertaining to the above-referenced NDA to be kept under 21 CFR 314.70, including all previous correspondence to and from the Agency. A signed 356h form is attached + +If you have any questions or require any additional information, please do not hesitate to contact me at . + +Sincerely, + +PACIRA PHARMACEUTICALS, INC. -80- + +Re: DepoDur® NDA [**] + +® + + + + + +B. Transfer Letter to be Filed by EKR + +[EKR THERAPEUTICS, INC. LETTERHEAD] + + , 2009 + +VIA OVERNIGHT MAIL + +[NAME AND ADDRESS OF APPROPRIATE FDA CONTACT TO BE PROVIDED] + +DepoDur® General Correspondence: Transfer of NDA Ownership + +Dear : + +Pursuant to 21 CFR 314.72 the above-mentioned NDA has been transferred from Pacira Pharmaceuticals, Inc. to EKR Therapeutics, Inc. effective , 2009. EKR has received a complete copy of the approved application, including all supplements and records that are required to be kept under 21 CFR 314.81. EKR agrees to abide by all agreements, promises and conditions made by the former owner, which are contained in the application. EKR will advise the FDA about any changes in the conditions in the approved application as required by 21 CFR 314.70, or in the next annual report, if appropriate. EKR will consider the date of transfer to be the new date for annual reporting purposes. A new signed 356h form is attached. + +Please contact me by phone at , by email at or by fax at , if you have any questions or if you require additional information. + + -81- + +RE: NDA No. [**] + +Sincerely, + +[Name / Title] + + + + + +SCHEDULE XII + +TRANSFERRED EQUIPMENT + +DepoDur processing equipment: + +1. ST-01 ([**], [**] rated to [**], equipped with agitator used in preparation of [**] prior to [**]) + +2. ST-02 ([**], [**] rated to [**], equipped with agitator used in preparation of [**] [**] prior to [**]) + +3. ST-03 ([**], [**] rated to [**], equipped with agitator used in preparation of [**] prior to [**]) + +4. ST-04 ([**], [**] rated to [**], equipped with agitator used in preparation of [**] [**] prior to [**]) + +5. ST-22 ([**], [**] rated to [**], [**]) + +6. EV-01 ([**], [**] rated to [**], equipped with [**] used to produce [**] [**]) + +7. EV-02 ([**], [**] rated to [**], equipped with [**] and [**] [**] used to produce [**]) + +8. FV-01 ([**], [**] rated to [**], used [**] during [**]) + +9. [**] skid, including [**] lobe pumps, [**] manifold system, and [**] flometers + +10. Interconnective valves and piping between vessels + +11. Pressure gauges, temperature probes, other small instrumentation for in-process measurements. + +12. HMI / PLC / automation -82- + + + + + +Exhibit 3.20(a) Form of Bill of Sale + +BILL OF SALE + +THIS BILL OF SALE, dated October , 2009 (this "Bill of Sale"), is made by Pacira Pharmaceuticals, Inc. ("Seller"), in favor of EKR Therapeutics, Inc. ("Purchaser"). + +WHEREAS, Purchaser and Seller have entered into that certain Amended and Restated Strategic Licensing, Distribution and Marketing Agreement, dated as of the date hereof (the "Agreement"), providing, among other things, for the sale of the Transferred Equipment (as defined therein) by Seller to Purchaser. + +NOW, THEREFORE, for good and valuable consideration, the receipt of which is hereby acknowledged, Seller and Purchaser agree as follows: + +1. Definitions. Capitalized terms used in this Bill of Sale and not otherwise defined in this Bill of Sale shall have the respective meanings assigned to them in the Agreement. + +2. Conveyance. In accordance with the terms of the Agreement, Seller hereby sells, transfers, conveys and assigns to Purchaser all right, title and interest in and to the Transferred Equipment. A list of the Transferred Equipment is set forth on Schedule A to this Bill of Sale. + +3. Further Assurances. At any time and from time to time after the date of this Bill of Sale, Seller, at the Purchaser's request and subject to reimbursement by Purchaser of any out-of-pocket expenses, will do, execute, acknowledge and deliver, or will cause to be done, executed, acknowledged and delivered, any and all further acts, conveyances, transfers, assignments and assurances as may be reasonably required by Purchaser to further evidence and effectuate the sale, transfer, conveyance and assignment to the Purchaser of the Transferred Equipment. + +4. Relationship With Agreement. The provisions of this Bill of Sale are subject, in all respects, to the terms and conditions of the Agreement and all of the representations, warranties, covenants and agreements contained in the Agreement. Nothing contained in this Bill of Sale shall be deemed to modify, limit or amend any such rights and obligations of the parties hereto under the Agreement. In the event of any conflict or inconsistency between this Bill of Sale and the Agreement, the Agreement shall govern. + +5. Successors and Assigns. This Bill of Sale shall be binding upon and inure to the benefit of and be enforceable by Seller and Purchaser and their respective successors and assigns. + +6. Governing Law. This Bill of Sale shall be governed by, and construed in accordance with, the laws of the State of New York, without regard to the conflicts of law principles thereof. + +7. Counterparts; Facsimile Signature Pages. This Bill of Sale may be executed by each of Seller and Purchaser in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and which together shall constitute one and the same instrument. Any signed counterpart of this Bill of Sale which is delivered by facsimile or other printable electronic transmission shall be deemed to be executed and delivered for all purposes. + +[Signature Page Follows] -83- + + + + + +IN WITNESS WHEREOF, Seller has executed and delivered this Bill of Sale on the date first above written. + +Acknowledged and Agreed to as of the date first above written. + + -84- + +Pacira Pharmaceuticals, Inc. + +By: Print Name: Title: + +EKR Therapeutics, Inc. + +By: Print Name: Title: + + + + + +Schedule A to Bill of Sale Transferred Equipment + +DepoDur processing equipment: + +1. ST-01 ([**], [**] rated to [**], equipped with agitator used in preparation of [**] prior to [**]) + +2. ST-02 ([**], [**] rated to [**], equipped with agitator used in preparation of [**] [**] prior to [**]) + +3. ST-03 ([**], [**] rated to [**], equipped with agitator used in preparation of [**] prior to [**]) + +4. ST-04 ([**], [**] rated to [**], equipped with agitator used in preparation of [**] [**] prior to [**]) + +5. ST-22 ([**] [**], [**] rated to [**], [**] [**]) + +6. EV-01 ([**], [**] rated to [**], equipped with [**] used to produce [**] [**]) + +7. EV-02 ([**], [**] rated to [**], equipped with [**] and [**] [**] used to produce [**]) + +8. FV-01 ([**], [**] rated to [**], used [**] during [**]) + +9. [**] skid, including [**] lobe pumps, [**] manifold system, and [**] flometers + +10. Interconnective valves and piping between vessels + +11. Pressure gauges, temperature probes, other small instrumentation for in-process measurements. + +12. HMI / PLC / automation -85- + + + + + +Exhibit 3.20(b) Form of Promissory Note + +PROMISSORY NOTE + +FOR VALUE RECEIVED, EKR Therapeutics, Inc. ("Maker"), having an address at 1545 Route 206 South, Third Floor, Bedminster, New Jersey 07921, hereby promises to pay to Pacira Pharmaceuticals, Inc. ("Payee"), having an address at 10450 Sciences Center Drive, San Diego, California 92121, the principal sum of NINE HUNDRED THOUSAND DOLLARS ($900,000.00), plus interest computed at the rate of FIVE PERCENT (5%) per annum, in accordance with the terms and conditions set forth in this Promissory Note (this "Note"). + +1. Payments. On the fifth anniversary of the date of this Note, all principal and interest (calculated according to Paragraph 3 below) accrued on this Note and not sooner paid in accordance with the terms hereof shall be payable in full (the "Payment"). + +2. Place of Payment. The entire amount due hereunder shall be payable to Payee at the address set forth above, or at such other place as Payee may designate in writing to Maker at the address set forth above. + +3. Interest Calculation: Interest shall be calculated on the basis of a 360 day year based on the number of days elapsed. + +4. Optional Prepayment. Maker may, at its option, prepay the entire amount due hereunder in whole at any time or in part from time to time without penalty or premium. At the option of Maker, prepayments pursuant to this Paragraph 4 shall (a) be applied to the outstanding principal balance in reverse order of maturity or (b) reduce the Payment installments set forth above for the balance of the term of this Note. In the event that Maker elects to reduce the Payment installments, Maker agrees to provide to Payee written notice of its election to do so at least thirty (30) days prior to making any prepayment and to execute and deliver to Payee an amendment to this Note setting forth a revised payment schedule. + +5. Defaults. At the option of Payee, the entire amount due hereunder shall immediately become due and payable on any of the following events of default: (a) Maker fails to make Payment as provided for in this Note and such failure to make Payment continues for thirty (30) days after Maker's receipt of written notice from Payee that such Payment is due; (b) Maker makes a general assignment for the benefit of creditors; -86- + +$900,000 October , 2009 + + + + + +(c) A receiver is appointed for the assets of Maker upon request by any Person(s) other than Maker, or Maker makes a formal request for appointment of a receiver; or (d) Any proceeding is brought by Maker in any court or under supervision of any court-appointed officer under any federal or state bankruptcy, reorganization, rearrangement, insolvency or debt readjustment law, or if any such proceedings are instituted against Maker and Maker fails to obtain dismissal of such proceeding within ninety (90) days after the same has been instituted. + +6. Agreement. This Note is made pursuant to that certain Amended and Restated Strategic Licensing, Distribution and Marketing Agreement dated as of October , 2009 by and between Maker and Payee (the "Agreement") and is subject to the terms thereof. This Note is subject to offset as expressly provided for in the Agreement. + +7. Nonnegotiability, Nontransferability. This Note shall be nonnegotiable. Further, this Note may not be transferred by either party except to a permitted transferee under the Agreement. + +8. Governing Law. This Note shall be governed by and construed in accordance with the laws of the State of New York, excluding any conflict-of-laws rule or principle that may refer the governance, construction or interpretation of this Note to the laws of another State. + +IN WITNESS WHEREOF, the Maker has executed this promissory note as of . + + -87- + + , Maker \ No newline at end of file diff --git a/full_contract_txt/PANDIONTHERAPEUTICSHOLDCOLLC_05_22_2020-EX-10.17-CONSULTING AGREEMENT.txt b/full_contract_txt/PANDIONTHERAPEUTICSHOLDCOLLC_05_22_2020-EX-10.17-CONSULTING AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..31d3012bc9d54648ad4ab9572d2575ef12eb4934 --- /dev/null +++ b/full_contract_txt/PANDIONTHERAPEUTICSHOLDCOLLC_05_22_2020-EX-10.17-CONSULTING AGREEMENT.txt @@ -0,0 +1,153 @@ +Exhibit 10.17 + +IMMUNOTOLERANCE, INC. + +CONSULTING AGREEMENT + +This Consulting Agreement (the "Agreement"), made this 27t h day of March, 2017 is entered into by Immunotolerance, Inc., a Delaware corporation (the "Company"), and Alan Crane, an individual (the "Consultant"). + +WHEREAS, the Company and the Consultant desire to establish the terms and conditions under which the Consultant will provide services to the Company. + +NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by the parties hereto, the parties agree as follows: + +1. Services. The Consultant agrees to perform such consulting, advisory and related services to and for the Company as may be reasonably requested from time to time by the Company, including, but not limited to, the services specified on Schedule A to this Agreement. The Consultant also agrees to provide the Company with related services that may be requested from time to time by the Company. During the Consultation Period (as defined below) and for a period of one year thereafter, except in connection with his performance of the Services, the Consultant shall not engage in any activity in the field described on Schedule A to this Agreement, and he shall not assist any other person or organization that engages in any such activity. + +2. Term. This Agreement shall commence on the Effective Date and shall continue until the four-year anniversary of the Effective Date (such period, as it may be extended, either by the mutual written agreement of the parties or automatically, or earlier terminated being referred to as the "Consultation Period"), unless sooner terminated in accordance with the provisions of Section 4, and shall automatically renew for successive one-year periods, unless the Company provides 90 days' notice of termination before any such successive period. + +3. Compensation. + +3.1 Shares. In connection with the execution of this Agreement, Consultant and Company shall enter into a Restricted Stock Agreement. Subject to approval of the Board of Directors of the Company, the Company shall issue and sell to the Consultant, and the Consultant shall purchase from the Company, subject to the terms and conditions set forth in this Agreement and the Restricted Stock Agreement, 1,990,000 shares (the "Shares") of common stock, $0.0001 par value, of the Company ("Common Stock"), at a purchase price of $0.0001 per share, for an aggregate purchase price of $190. Such Shares are in addition to the 10,000 shares of Common Stock held by the Consultant as of the date hereof. The Consultant agrees that the Shares shall be subject to the terms of the Restricted Stock Agreement. + +3.2 Expenses. The Company shall reimburse the Consultant for all reasonable and necessary documented out of pocket expenses incurred or paid by the Consultant in connection with, or related to, the performance of Consultant's services under this Agreement. + + + + + +The Consultant shall submit to the Company itemized monthly statements, in a form satisfactory to the Company, of such expenses incurred in the previous month. The Company shall pay to the Consultant amounts shown on each such statement within thirty (30) days after receipt thereof. + +3.3 Benefits. The Consultant shall not be entitled to any benefits, coverages or privileges, including, without limitation, health insurance, social security, unemployment, medical or pension payments, made available to employees of the Company. + +4. Termination. The Company may terminate the Consultation Period at any time for Cause (as defined below). In the event of such termination, the Consultant shall be entitled to payment hereunder and for expenses paid or incurred prior to the effective date of termination. Such payments shall constitute full settlement of any and all claims of the Consultant of every description against the Company. Notwithstanding the foregoing, the Company may terminate the Consultation Period effective immediately upon receipt of written notice by the Consultant, if the Consultant breaches or threatens to breach any provision of Section 6. For purposes of this Section 4, "Cause" shall exist in the event of (i) a good faith finding by the Board of Directors of the Company (A) of repeated and willful failure of the Consultant after written notice to perform his reasonable Services for the Company, or (B) that the Consultant has engaged in dishonesty, gross negligence or misconduct; or (ii) the conviction of the Consultant of, or the entry of a pleading of guilty or nolo contendere by the Consultant to, any crime involving moral turpitude or any felony. The Consultant may terminate the Consultation Period at any time upon thirty (30) days' written notice. + +5. Cooperation. The Consultant shall use Consultant's best efforts in the performance of Consultant's obligations under this Agreement. The Company shall provide such access to its information and property as may be reasonably required in order to permit the Consultant to perform Consultant's obligations hereunder. The Consultant shall cooperate with the Company's personnel, shall not interfere with the conduct of the Company's business and shall observe all rules, regulations and security requirements of the Company concerning the safety of persons and property. + +6. Proprietary Information and Inventions. + +6.1 Proprietary Information. + +(a) The Consultant acknowledges that Consultant's relationship with the Company is one of high trust and confidence and that in the course of Consultant's service to the Company, Consultant will have access to and contact with Proprietary Information. The Consultant will not disclose any Proprietary Information to any person or entity other than employees of the Company or use the same for any purposes (other than in the performance of the services) without written approval by an officer of the Company, either during or after the Consultation Period, unless and until such Proprietary Information has become public knowledge without fault by the Consultant. - 2 - + + + + + +(b) For purposes of this Agreement, Proprietary Information shall mean, by way of illustration and not limitation, all information, whether or not in writing, whether or not patentable and whether or not copyrightable, of a private, secret or confidential nature, owned, possessed or used by the Company, concerning the Company's business, business relationships or financial affairs, including, without limitation, any Invention, formula, vendor information, customer information, apparatus, equipment, trade secret, process, research, report, technical or research data, clinical data, know-how, computer program, software, software documentation, hardware design, technology, product, processes, methods, techniques, formulas, compounds, projects, developments, marketing or business plan, forecast, unpublished financial statement, budget, license, price, cost, customer, supplier or personnel information or employee list that is communicated to, learned of, developed or otherwise acquired by the Consultant in the course of Consultant's service as a consultant to the Company. + +(c) The Consultant's obligations under this Section 6.1 shall not apply to any information that (i) is or becomes known to the general public under circumstances involving no breach by the Consultant or others of the terms of this Section 6.1, (ii) is generally disclosed to third parties by the Company without restriction on such third parties, or (iii) is approved for release by written authorization of an officer of the Company. + +(d) The Consultant agrees that all files, documents, letters, memoranda, reports, records, data, sketches, drawings, models, laboratory notebooks, program listings, computer equipment or devices, computer programs or other written, photographic, or other tangible material containing Proprietary Information, whether created by the Consultant or others, which shall come into Consultant's custody or possession, shall be and are the exclusive property of the Company to be used by the Consultant only in the performance of Consultant's duties for the Company and shall not be copied or removed from the Company premises except in the pursuit of the business of the Company. All such materials or copies thereof and all tangible property of the Company in the custody or possession of the Consultant shall be delivered to the Company, upon the earlier of (i) a request by the Company or (ii) the termination of this Agreement. After such delivery, the Consultant shall not retain any such materials or copies thereof or any such tangible property. + +(e) The Consultant agrees that Consultant's obligation not to disclose or to use information and materials of the types set forth in paragraphs (b) and (d) above, and Consultant's obligation to return materials and tangible property set forth in paragraph (d) above extends to such types of information, materials and tangible property of customers of the Company or suppliers to the Company or other third parties who may have disclosed or entrusted the same to the Company or to the Consultant. + +(f) The Consultant acknowledges that the Company from time to time may have agreements with other persons or with the United States Government, or agencies thereof, that impose obligations or restrictions on the Company regarding inventions made during the course of work under such agreements or regarding the confidential nature of such work. The Consultant agrees to be bound by all such obligations and restrictions that are known to Consultant and to take all action necessary to discharge the obligations of the Company under such agreements. - 3 - + + + + + +6.2 Inventions. + +(a) All inventions, ideas, creations, discoveries, computer programs, works of authorship, data, developments, technology, designs, innovations and improvements (whether or not patentable and whether or not copyrightable) which are made, conceived, reduced to practice, created, written, designed or developed by the Consultant, solely or jointly with others or under Consultant's direction and whether during normal business hours or otherwise, (i) during the Consultation Period if related to the business of the Company or (ii) during or after the Consultation Period if resulting or directly derived from Proprietary Information (as defined above) (collectively under clauses (i) and (ii), "Inventions"), shall be the sole property of the Company. The Consultant hereby assigns to the Company all Inventions and any and all related patents, copyrights, trademarks, trade names, and other industrial and intellectual property rights and applications therefor, in the United States and elsewhere and appoints any officer of the Company as Consultant's duly authorized attorney to execute, file, prosecute and protect the same before any government agency, court or authority. However, this paragraph shall not apply to Inventions which do not relate to the business or research and development conducted or planned to be conducted by the Company at the time such Invention is created, made, conceived or reduced to practice and which are made and conceived by the Consultant not during normal working hours, not on the Company's premises and not using the Company's tools, devices, equipment or Proprietary Information. The Consultant further acknowledges that each original work of authorship which is made by the Consultant (solely or jointly with others) within the scope of this Agreement and which is protectable by copyright is a "work made for hire," as that term is defined in the United States Copyright Act. + +(b) The Consultant agrees that if, in the course of performing the Services, the Consultant incorporates into any Invention developed under this Agreement any preexisting invention, improvement, development, concept, discovery or other proprietary information owned by the Consultant or in which the Consultant has an interest ("Prior Inventions"), (i) the Consultant will inform the Company, in writing before incorporating such Prior Inventions into any Invention, and (ii) the Company is hereby granted a nonexclusive, royalty-free, perpetual, irrevocable, transferable worldwide license with the right to grant and authorize sublicenses, to make, have made, modify, use, import, offer for sale, sell, reproduce, distribute, modify, adapt, prepare derivative works of, display, perform, and otherwise exploit such Prior Inventions, without restriction, including, without limitation, as part of or in connection with such Invention, and to practice any method related thereto. The Consultant will not incorporate any invention, improvement, development, concept, discovery or other proprietary information owned by any third party into any Invention without the Company's prior written permission. + +(c) Upon the request of the Company and at the Company's expense, the Consultant shall execute such further assignments, documents and other instruments as may be necessary or desirable to fully and completely assign all Inventions to the Company and to assist the Company in applying for, obtaining and enforcing patents or copyrights or other rights in the United States and in any foreign country with respect to any Invention. The Consultant also hereby waives all claims to moral rights in any Inventions. + +(d) The Consultant shall promptly disclose to the Company all Inventions and will maintain adequate and current written records (in the form of notes, sketches, drawings and as may be specified by the Company) to document the conception and/or first actual reduction to practice of any Invention. Such written records shall be available to and remain the sole property of the Company at all times. - 4 - + + + + + +7. Non-Solicitation. During the Consultation Period and for a period of one year thereafter, the Consultant shall not, either alone or in association with others, (i) solicit, or permit any organization directly or indirectly controlled by the Consultant to solicit, any employee of the Company to leave the employ of the Company; or (ii) solicit for employment, hire or engage as an independent contractor, or permit any organization directly or indirectly controlled by the Consultant to solicit for employment, hire or engage as an independent contractor, any person who is employed or engaged by the Company; provided, that this clause (ii) shall not apply to any individual whose employment with the Company has been terminated for a period of six months or longer. + +8. Other Agreements; Warranty. + +8.1 The Consultant hereby represents that, except as the Consultant has disclosed in writing to the Company, the Consultant is not bound by the terms of any agreement with any third party to refrain from using or disclosing any trade secret or confidential or proprietary information in the course of Consultant's consultancy with the Company, to refrain from competing, directly or indirectly, with the business of such third party or to refrain from soliciting employees, customers or suppliers of such third party. The Consultant further represents that Consultant's performance of all the terms of this Agreement and the performance of the services as a consultant of the Company do not and will not breach any agreement with any third party to which the Consultant is a party (including, without limitation, any nondisclosure or non-competition agreement), and that the Consultant will not disclose to the Company or induce the Company to use any confidential or proprietary information or material belonging to any current or previous employer or others. + +8.2 The Consultant hereby represents, warrants and covenants that Consultant has the skills and experience necessary to perform the services, that Consultant will perform said services in a professional, competent and timely manner, that Consultant has the power to enter into this Agreement and that Consultant's performance hereunder will not infringe upon or violate the rights of any third party or violate any federal, state or municipal laws. + +9. Independent Contractor Status. + +9.1 The Consultant shall perform all services under this Agreement as an "independent contractor" and not as an employee or agent of the Company. The Consultant is not authorized to assume or create any obligation or responsibility, express or implied, on behalf of, or in the name of, the Company or to bind the Company in any manner. + +9.2 The Consultant shall have the right to control and determine the time, place, methods, manner and means of performing the services. In performing the services, the amount of time devoted by the Consultant on any given day will be entirely within the Consultant's control, and the Company will rely on the Consultant to put in the amount of time necessary to fulfill the requirements of this Agreement. The Consultant will provide all equipment and supplies required to perform the services. The Consultant is not required to attend regular meetings at the Company. However, upon reasonable notice, the Consultant shall meet with representatives of the Company at a location to be designated by the parties to this Agreement. - 5 - + + + + + +9.3 In the performance of the services, the Consultant has the authority to control and direct the performance of the details of the services, the Company being interested only in the results obtained. However, the services contemplated by the Agreement must meet the Company's standards and approval and shall be subject to the Company's general right of inspection and supervision to secure their satisfactory completion. + +9.4 The Consultant shall not use the Company's trade names, trademarks, service names or service marks without the prior approval of the Company. + +9.5 The Consultant shall be solely responsible for all state and federal income taxes, unemployment insurance and social security taxes in connection with this Agreement and for maintaining adequate workers' compensation insurance coverage. + +10. Remedies. The Consultant acknowledges that any breach of the provisions of Section 1, 6 or 7 of this Agreement shall result in serious and irreparable injury to the Company for which the Company cannot be adequately compensated by monetary damages alone. The Consultant agrees, therefore, that, in addition to any other remedy the Company may have, the Company shall be entitled to enforce the specific performance of this Agreement by the Consultant and to seek both temporary and permanent injunctive relief (to the extent permitted by law) without the necessity of proving actual damages or posting a bond. + +11. Notices. All notices required or permitted under this Agreement shall be in writing and shall be deemed effective upon personal delivery or upon deposit in the United States Post Office, by registered or certified mail, postage prepaid, addressed to the other party at the address shown above, or at such other address or addresses as either party shall designate to the other in accordance with this Section 11. + +12. Pronouns. Whenever the context may require, any pronouns used in this Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular forms of nouns and pronouns shall include the plural, and vice versa. + +13. Entire Agreement. This Agreement constitutes the entire agreement between the parties and supersedes all prior agreements and understandings, whether written or oral, relating to the subject matter of this Agreement. + +14. Amendment. This Agreement may be amended or modified only by a written instrument executed by both the Company and the Consultant. + +15. Non-Assignability of Contract. This Agreement is personal to the Consultant and the Consultant shall not have the right to assign any of Consultant's rights or delegate any of Consultant's duties without the express written consent of the Company. Any non-consented-to assignment or delegation, whether express or implied or by operation of law, shall be void and shall constitute a breach and a default by the Consultant. - 6 - + + + + + +16. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts without giving effect to any choice or conflict of law provision or rule that would cause the application of laws of any other jurisdiction. + +17. Successors and Assigns. This Agreement shall be binding upon, and inure to the benefit of, both parties and their respective successors and assigns, including any corporation with which, or into which, the Company may be merged or which may succeed to its assets or business, provided, however, that the obligations of the Consultant are personal and shall not be assigned by Consultant. + +18. Interpretation. If any restriction set forth in Section 1, 6 or 7 is found by any court of competent jurisdiction to be unenforceable because it extends for too long a period of time or over too great a range of activities or in too broad a geographic area, it shall be interpreted to extend only over the maximum period of time, range of activities or geographic area as to which it may be enforceable. + +19. Survival. The last sentence of Section 1 and Sections 4 through 20 shall survive the expiration or termination of this Agreement. + +20. Miscellaneous. + +20.1 No delay or omission by the Company in exercising any right under this Agreement shall operate as a waiver of that or any other right. A waiver or consent given by the Company on any one occasion shall be effective only in that instance and shall not be construed as a bar or waiver of any right on any other occasion. + +20.2 The captions of the sections of this Agreement are for convenience of reference only and in no way define, limit or affect the scope or substance of any section of this Agreement. + +20.3 In the event that any provision of this Agreement shall be invalid, illegal or otherwise unenforceable, the validity, legality and enforceability of the remaining provisions shall in no way be affected or impaired thereby. + +[Remainder of Page Intentionally Left Blank] - 7 - + + + + + +IN WITNESS WHEREOF, the parties hereto have executed this Consulting Agreement as of the date and year first above written. COMPANY: + +IMMUNOTOLERANCE, INC. + +By: /s/ Dan Matloff Name: Dan Matloff Title: CFO + +CONSULTANT: + +/s/ Alan Crane Name: Alan Crane + +SIGNATURE PAGE TO CONSULTING AGREEMENT + + + + + +SCHEDULE A + +Consultant will provide advice and services to the Company as requested by the Board of Directors from time to time. The field for purposes of Section 1 is defined as drugs and cell-based therapies designed for tissue-specific immunosuppression. \ No newline at end of file diff --git a/full_contract_txt/PAXMEDICA,INC_07_02_2020-EX-10.12-Master Service Agreement.txt b/full_contract_txt/PAXMEDICA,INC_07_02_2020-EX-10.12-Master Service Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..6c7a2c0b12eb20a18320f66430dbc7d87d31362c --- /dev/null +++ b/full_contract_txt/PAXMEDICA,INC_07_02_2020-EX-10.12-Master Service Agreement.txt @@ -0,0 +1,39 @@ +Exhibit 10.12 Certain identified information has been excluded because it is both not material and would likely cause competitive harm if publicly disclosed. + +Master Service Agreement This Master Service Agreement ("Agreement"), entered into on May 25th, 2018 by and between CRO Consulting (Pty) Limited, whose Registered Office is at OnQ House 250 Market Street Fairland Johannesburg 2170 South Africa (hereinafter referred to as "CRO") and Purinix Pharmaceuticals LLC whose Registered Office is at 1266 East Main Street, Suite 700R, Stamford, CT 06902, USA (hereinafter referred to as "Client"). 1.0 Services 1.1. Client requires CRO to carry out Clinical Research Services in South Africa ("Services"). CRO will carry out the tasks agreed and summarised in the Addenda to this Master Service Agreement. 1.2. This Agreement forms the basis for a working relationship between Client and CRO. This Agreement will be supplemented, in the form of Project-specific Addenda, as the need arises. The Project-specific Addenda will contain the detailed requirements of each Project for which Services are contracted to CRO by Client and all fees to be paid by Client. 1.3. Client will provide CRO with the documents and information necessary as requested by CRO for the conduct of the Services. 1.4. CRO agrees to perform the specific tasks set forth in the Project-specific Addenda in a professional manner, in strict accordance with the terms and conditions contained herein, relevant professional standards including in accordance with the Protocol and applicable amendments and ICH GCP Guidelines (ICH Harmonised Tripartite Guideline for Good Clinical Practice, May 1996) and all other relevant laws, rules, regulations and guidelines. 1.5. CRO agrees to perform these Services according to CRO's Standard Operating Procedures (SOPs) or other guidelines as provided, which are provided to Client on request. 1.6 CRO may not subcontract any parts of the Services to a third party without the prior written approval of Client, which approval shall not unreasonably be withheld. CRO will remain fully liable for the acts and omissions of its employees and approved subcontractors as if performed by CRO. 1.7 CRO will provide Client with a weekly written report summarizing the Services including all clinical study activity and any other information reasonably requested by Client. 2.0 Payment 2.1 Client will pay CRO for satisfactory performance of Services as agreed in each Project-specific Addendum to this Agreement. Confidential Page 1 of 7 Initials: CL MD Version Jan16_v1 + + + + + +Certain identified information has been excluded because it is both not material and would likely cause competitive harm if publicly disclosed. 2.2 Routine telephone calls, mobile calls, faxes and photocopying will be included in the rate provided by CRO. For clarity, there shall be no payment obligations other than as agreed in each Project-specific Addendum. 2.4 CRO will provide a detailed account of all time and tasks, as against project specific task and time addenda, and will be payable within 30 days of receipt of invoice by Client. 2.5. Changes in scope may be incorporated into this Agreement or the Project-specific Addenda upon the written consent of both parties. 2.6. In the event of a conflict between the terms of this Agreement and the Project-specific Addenda the terms of this Agreement shall prevail unless specifically stated in the Project-specific Addenda. 3.0 Period of the Agreement 3.1. This Agreement shall take effect on the date of signature of the Agreement by both parties and shall terminate when all obligations required of both parties hereunder are performed unless either terminated earlier or extended by the parties pursuant to the terms of this Agreement subject to clause 4.0. 4.0 Termination 4.1. Either party may terminate this Agreement on thirty (30) days written notice if the other materially breaches this Agreement; provided, however that the party in breach shall have the right to cure such breach within thirty (30) days after receipt of written notice of the other party's intention to terminate. 4.2. Client may terminate this Agreement on thirty (30) days written notice without cause. In the event of termination by Client for reasons other than default by CRO, Client shall pay all sums owing to CRO, but unpaid, for work performed to date of receipt of termination notice, and all reasonable and necessary costs associated with the termination itself or to which CRO is committed to pay. In the event of termination by Client, CRO shall use all efforts to minimize any such costs, including cancelling orders and services to the extent possible. 4.3. In the event of early termination under 4.1. above where CRO is in material breach, any credit held in favour of CRO shall be returned to Client within thirty (30) days following such termination, provided that the Client will then be liable for all outstanding third party costs lawfully incurred hereunder by CRO prior to the termination. 4.4. Either party shall be entitled forthwith to terminate this Agreement with immediate effect by written notice to the other if that other is adjudged insolvent or goes into liquidation (other than for bona fide reconstruction) or has a receiver appointed over any of its property or assets. 5.0 Warranties, Limitations of Liability and Indemnification 5.1. CRO warrants to Client that the Services will be performed in a professional and workmanlike manner and on a best endeavours basis in accordance with the standard of care ordinarily and reasonably expected in the performance of such Services and that the work performed for Client will be correct in all material respects to the best of the knowledge and belief of CRO. However, Client acknowledges that the provision of the Services is dependent upon the responsiveness of the South African regulatory authorities and CRO shall not be held responsible for any acts or omissions of such authorities. Confidential Page 2 of 7 Initials: CL MD Version Jan16_v1 + + + + + +Certain identified information has been excluded because it is both not material and would likely cause competitive harm if publicly disclosed. 5.2. CRO reserves the right to place staff on the project, however not without initially providing a project management and resource outline to Client, including but not limited to, the current Curriculum Vitae of proposed staff. CRO will notify Client of any change in staff. Any new or replacement personnel shall be subject to Client's prior written approval, which approval shall not be unreasonably withheld. 5.3. CRO will utilize CRO business cards, letterheads and facsimile templates for the purpose of the conduct of this trial. 5.4. Notwithstanding any other provision of this Agreement, each party's total liability in respect of damages under this Agreement, any regulation or common law shall be limited to the sum of all amounts received from Client in terms of this Agreement; provided, however, that this limitation shall not apply with respect to any claims arising out of or relating to clause 6 (Inventions and Proprietary Information), indemnification obligations or damages arising from a party's gross negligence or willful misconduct. 5.5. Neither Party shall be liable to the other Party in respect of any indirect loses or damaged, pure economic nature, loss of profits or income howsoever arising. 5.6. CRO will defend, indemnify and hold harmless Client and its directors, officers, employees and agents from and against all liabilities, costs and expenses (including reasonable attorneys' fees and court costs) arising from any third party claim, action or lawsuit or other proceeding which is attributable to any negligent or willful act or omission or breach of this Agreement on the part of CRO or any of its agents or employees in the course of performing CRO's obligations hereunder. 5.7. Client will defend, indemnify and hold harmless CRO and its directors, officers, employees and agents from and against all liabilities, costs and expenses (including reasonable attorneys' fees and court costs) arising from any third party claim, action or lawsuit or other proceeding which is attributable to any negligent or willful act or omission or breach of this Agreement on the part of Client or any of its agents or employees in the course of performing Client's obligations hereunder, including but not limited to breaches of third party intellectual property rights. 6.0 Inventions and Proprietary Information 6.1 CRO agrees that during the term of this Agreement and for a period of three years thereafter: (a) to disclose and assign to Client as its exclusive property all inventions and technical or business innovations specifically derived from the work assigned by Client to CRO which CRO develops or conceives, solely or in conjunction with others (1) that are based on or involve information of Client, (2) that relate to, constitute, result from, or include the work in which CRO will be engaged for Client, or (3) that are otherwise made through the use of any time, facilities or materials of Client; Confidential Page 3 of 7 Initials: CL MD Version Jan16_v1 + + + + + +Certain identified information has been excluded because it is both not material and would likely cause competitive harm if publicly disclosed. (b) that all deliverables and work products in the form of works of authorship developed by CRO in the performance of Services under this Agreement shall be deemed works made for hire, and shall belong fully and exclusively to Client; and that if by operation of law such deliverables or work products are not works made for hire, CRO agrees to, and does hereby, assign to Client all right, title, and interest in such deliverables or work product, including all copyrights therein; (c) to execute all necessary documents and provide Client proper assistance (at its expense) sufficient to enable it to obtain patent, copyright or other legal protections for any such inventions or innovations as described in paragraph 7.1(a) and (b), and to make and maintain reasonably detailed accurate records of any such inventions or innovations; (d) to deliver to Client, upon termination or expiration of this Agreement, all materials which were provided to CRO under the terms of this Agreement and which relate to the business of, or belong to, Client or which were provided by Client for the use of its employees, contractors or consultants; (e) not to use, publish, or otherwise disclose (except if properly authorized as a part of the work for Client) any information which is provided to CRO under the terms of this Agreement including but not limited to any non-public, proprietary or confidential information; (f) not to disclose or utilize in the performance of Services for Client any proprietary or confidential information of others or any inventions of CRO which are not included within the scope of this Agreement; (g) not to divulge to any person, firm, or corporation any information received during the course of this service agreement with regard to the personal, financial, or other affairs of Client or its subsidiaries, and that all such information shall be kept confidential and shall not, in any manner, be revealed to anyone. h) not to divulge or make known to any person, firm, or corporation any of the methods, processes, formulae, discoveries, or inventions, and not, in any manner whatsoever, divulge, publish or otherwise reveal, either directly or indirectly, any knowledge of inventions or devices which CRO may come into knowledge of solely as a result of and during the terms of CRO agreement with Client and to retain whatever knowledge secured in trust as a fiduciary for the sole benefit of Client, its successors and assigns. 8.0 Medical and Regulatory 8.1. Both parties shall promptly notify the other party of any governmental regulatory inspections of which it becomes aware and which relate to any project covered in the Addenda. Client shall have the right to be present at any such inspections and shall have primary responsibility for preparing any responses, which may be required, to the extent such responses relate to the project covered by the Addenda. 8.2. Client may designate representatives who shall, upon reasonable notice to CRO, have access to and shall be permitted to review all documents, information, data and/or materials specifically related to the conduct of the projects covered by the Addenda. 8.3. CRO will inform Client in writing immediately of any suspected fraud. Confidential Page 4 of 7 Initials: CL MD Version Jan16_v1 + + + + + +Certain identified information has been excluded because it is both not material and would likely cause competitive harm if publicly disclosed. 9.0 Independent Contractor Status 9.1 It is understood and agreed that CRO is an independent contractor and will not have any rights to any of Client benefits, nor for any purposes be deemed or intended to be an employee of Client. CRO agrees to make any payments or withholding required by the South African Revenue Service. 9.2 It is further understood that CRO is not an agent of Client and is not authorized to bind Client with respect to any third party. 10.0 Conflicts of Interest 10.1. CRO represents that there is no conflict of interest between performance of this Agreement and the performance of services by CRO for any other party. In the event that CRO believes that there is presently any such conflict, or any such conflict arises during the term of this Agreement, CRO will immediately notify Client which may, at its sole discretion, immediately terminate this Agreement without liability to CRO. 11.0 Notices 11.1. Any notice will be in writing and will be given by registered mail, return receipt requested, or hand delivered to the other party at the address given on this agreement or to such other address as may be substituted by notice. If sent by mail, notice will be effective on the date of receipt. 12.0 General Provisions 12.1 CRO will not assign any right or delegate any obligation under this Agreement without the prior written consent of Client. Any attempted assignment or delegation without such consent will be void. 12.2 The headings in this Agreement are for reference purposes only; they will not affect the meaning or construction of the terms of this Agreement. 12.3 If any parts or part of this Agreement are held to be invalid, the remaining parts of the Agreement will continue to be valid and enforceable. 12.4. The provisions of this Agreement are for the sole benefit of the parties, and not for the benefit of any other persons or entities. 12.5 Any action of any kind by either party arising out of this Agreement must be commenced within five (5) years from the date the right, claim, demand, or cause of action shall first arise. 12.6 This Agreement contains the complete and exclusive understanding of the parties with respect to the subject matter hereof. No waiver, alteration or modification of any of the provisions hereof will be binding unless in writing and signed by a duly authorized representative of the party to be bound. Neither the course of conduct between the parties nor trade usage will act to modify or alter the provisions of this Agreement. 12.7 This Agreement shall be governed by the laws of the State of Connecticut, U.S.A. without regard to conflict of law principles. Confidential Page 5 of 7 Initials: CL MD Version Jan16_v1 + + + + + +Certain identified information has been excluded because it is both not material and would likely cause competitive harm if publicly disclosed. BANKING DETAILS [***] Fur the purposes of invoicing, invoices shall be addressed to: Purinix Pharmaceuticals LLC [***] Att: Chief Executive Officer CRO Client Signature /s/ Michael Derby Signature /s/ Catherine Lund Name Michael Derby Name Catherine Lund Title CEO Title Managing Director Date 25/05/2008 Date 25/05/2008 Confidential Page 6 of 7 Initials: CL MD Version Jan16_v1 + + + + + +Certain identified information has been excluded because it is both not material and would likely cause competitive harm if publicly disclosed. ADDENDA 1 Clinical Protocol Synopsis of Phase 2B Study using [***]to Treat Children with Autism Spectrum Disorder PAYMENT SCHEDULE (USD) With reference to OnQ proposal v3 13/04/2018 [***] Signature of Contract: 20% of Professional Fees OnQ costs Monitoring [***] [***] Office overhead [***] [***] Data Management [***] [***] [***] [***] Milestone Percentage USD ( amount) Signature of contract SAHPRA approval 15% [***] FPI 5% [***] 50% recruitment 20% [***] 100% recruitment 20% [***] DB lock 10% [***] CSR Draft 10% [***] Acceptance of Final CSR Final Payment [***] Confidential Page 7 of 7 Initials: CL MD Version Jan16_v1 \ No newline at end of file diff --git a/full_contract_txt/PFSFUNDS_06_26_2020-EX-99.H OTH MAT CONT-SERVICES AGREEMENT.txt b/full_contract_txt/PFSFUNDS_06_26_2020-EX-99.H OTH MAT CONT-SERVICES AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..41ab0fbb0287973fa322a33b7180c47db9c6d624 --- /dev/null +++ b/full_contract_txt/PFSFUNDS_06_26_2020-EX-99.H OTH MAT CONT-SERVICES AGREEMENT.txt @@ -0,0 +1,63 @@ +SERVICES AGREEMENT CONQUER RISK MANAGED VOLATILITY FUND CONQUER RISK TACTICAL ROTATION FUND CONQUER RISK TACTICAL OPPORTUNITIES FUND CONQUER RISK DEFENSIVE BULL FUND + +AGREEMENT dated as of June 24, 2020, between PFS Funds (the "Trust"), a Massachusetts business trust, and Potomac Fund Management, Inc. (the "Adviser"), a Florida Corporation. + +WHEREAS, the Trust has been organized to operate as an open-end management investment company registered under the Investment Company Act of 1940 (the "Act"); and WHEREAS, the Trust has engaged the Adviser to act as investment adviser to the Conquer Risk Managed Volatility Fund, Conquer Risk Tactical Rotation Fund, Conquer Risk Tactical Opportunities Fund, and Conquer Risk Defensive Bull Fund (each a "Fund"), series of PFS Funds; and WHEREAS, the Trust wishes to retain the Adviser to perform certain additional services as hereinafter described on behalf of the Fund; and WHEREAS, the Adviser wishes to provide such services to the Fund under the conditions set forth below; NOW, THEREFORE, in consideration of the promises and mutual covenants contained in this Agreement, the Trust and the Adviser agree as follows: + +1. Employment. The Trust, being duly authorized, hereby employs the Adviser to perform the services described in this Agreement. The Adviser shall perform such services upon the terms and conditions hereinafter set forth. Any services undertaken by the Adviser pursuant to this Agreement, as well as any other activities undertaken by the Adviser on behalf of the Trust pursuant hereto, shall at all times be subject to any directives of the Board of Trustees of the Trust. + +2. Trust Administration. The Adviser shall give the Trust the benefit of its best judgment, efforts and facilities in rendering its services. The Adviser shall at all times conform to: (i) all applicable provisions of the Act and any rules and regulations adopted thereunder; (ii) the provisions of the Registration Statement of the Trust under the Securities Act of 1933 and the Act as amended from time to time; (iii) the provisions of the Agreement and Declaration of Trust and the By-Laws of the Trust; and (iv) any other applicable provisions of state and federal law. + +Subject to the direction and control of the Trust, the Adviser shall supervise the Fund's business affairs. In addition, to the extent not otherwise provided by other parties under agreements with the Trust, the Adviser shall supply: (i) non-investment related statistical and research data; (ii) the services of a Chief Compliance Officer for the Trust with respect to the + +1 + +Fund and (iii) executive and administrative services. The Adviser shall also assist with and/or supervise the preparation by the Trust's administrator, transfer agent, and/or auditors of: (i) tax returns; (ii) reports to shareholders of the Fund; (iii) reports to, and filings with, the Securities and Exchange Commission, state securities commissions and Blue Sky authorities including preliminary and definitive proxy materials and post-effective amendments to the Trust's registration statement; and (iv) necessary materials for meetings of the Trust's Board of Trustees. The Adviser shall provide personnel to serve as officers of the Trust if so elected by the Board of Trustees. Executive and administrative services include, but are not limited to, the coordination of all third parties furnishing services to the Fund, review of the books and records of the Fund maintained by such third parties, and the review and submission to the officers of the Fund for their approval, of invoices or other requests for payment of Fund expenses; and such other action with respect to the Fund as may be necessary in the opinion of the Adviser to perform its duties hereunder. + +3. Allocation of Charges and Expenses. Except as set forth below, the Adviser will pay all operating expenses of each Fund specifically assumed by the Fund under the Management Agreement between the Trust and the Adviser dated June 24, 2020 (the "Management Agreement"), including without limitation the compensation and expenses of any employees of the Fund and of any other persons rendering any services to the Fund; clerical and shareholder service staff salaries; office space and other office expenses; fees and expenses incurred by the Fund in connection with membership in investment company organizations; legal, auditing and accounting expenses; expenses of registering shares under federal and state securities laws, including expenses incurred by the Fund in connection with the organization and initial registration of shares of the Fund; insurance expenses; fees and expenses of the custodian, transfer agent, dividend disbursing agent, shareholder service agent, plan agent, administrator (excluding fees and expenses payable to the Adviser under this Agreement and the Management Agreement), accounting and pricing services agent and underwriter of the Fund; expenses, including clerical expenses, of issue, sale, redemption or repurchase of shares of the Fund; the cost of preparing and distributing reports and notices to shareholders, the cost of printing or preparing prospectuses and statements of additional information for delivery to shareholders; the cost of printing or preparing stock certificates or any other documents, statements or reports to shareholders; expenses of shareholders' meetings and proxy solicitations; and all other operating expenses not specifically assumed by the Fund. For purposes of this Agreement, "operating expenses" shall not include advertising, promotion and other expenses incurred directly or indirectly in connection with the sale or distribution of the Fund's shares (including expenses that the Fund is authorized to pay pursuant to Rule 12b-1 under the Act, if any). + +The Fund will pay all brokerage fees and commissions, taxes, borrowing costs (such as (a) interest and (b) dividend expenses on securities sold short), ADR fees, fees and expenses of acquired funds, extraordinary or non-recurring expenses as may arise, including litigation to which the Fund may be a party and indemnification of the Trust's Trustees and officers with respect thereto. The Fund also will pay the fees paid pursuant to the Management Agreement between the Adviser and the Trust, and all expenses which it is now or in the future may be authorized to pay pursuant to Rule 12b-1 under the Act. The Adviser may obtain reimbursement from the Fund, at such time or times as the Adviser may determine in its sole discretion, for any expenses advanced by the Adviser that the Fund is obligated to pay, and such reimbursement shall not be considered to + +2 + +be part of the Adviser's compensation pursuant to this Agreement. + + + + + +4. Record Keeping and Other Information. The Adviser shall create and maintain all necessary records in accordance with all applicable laws, rules and regulations, including, but not limited to, records required by Section 31(a) of the Act and the rules thereunder, as the same may be amended from time to time, pertaining to the various functions performed by it and not otherwise created and maintained by another party pursuant to contract with the Trust. Where applicable, such records shall be maintained by the Adviser for the periods and in the places required by Rule 31a-2 under the Act. + +5. Audit, Inspection and Visitation. The Adviser shall make available to the Trust during regular business hours all records and other data created and maintained pursuant to the foregoing provisions of this Agreement for reasonable audit and inspection by the Trust or any regulatory agency having authority over the Trust. + +6. Compensation. For the performance of the Adviser's obligations under this Agreement, including payment of certain expenses of each of the Funds pursuant to paragraph 3 hereof, each Fund shall pay the Adviser, on the first business day following the end of each month, a fee at an annual rate of 0.65% of a Fund's average daily net assets up to $25 million, 0.35% of a Fund's average daily net assets from $25 million to $100 million, and 0.25% of a Fund's average daily net assets for such assets in excess of $100 million. + +The average value of the daily net assets of a Fund shall be determined pursuant to the applicable provisions of the Agreement and Declaration of Trust or a resolution of the Board of Trustees, if required. If, pursuant to such provisions, the determination of net asset value of a Fund is suspended for any particular business day, then for the purposes of this paragraph, the value of the net assets of a Fund as last determined shall be deemed to be the value of the net assets as of the close of the business day, or as of such other time as the value of the Fund's net assets may lawfully be determined, on that day. If the determination of the net asset value of a Fund has been suspended for a period including such month, the Adviser's compensation payable at the end of such month shall be computed on the basis of the value of the net assets of the Fund as last determined (whether during or prior to such month). + +7. Limitation of Liability. The Adviser may rely on information reasonably believed by it to be accurate and reliable. Except as may otherwise be required by the Act or the rules thereunder, neither the Adviser nor its directors, officers, employees, shareholders, agents, control persons or affiliates of any thereof (collectively, the "Adviser Employees") shall be subject to any liability for, or any damages, expenses or losses incurred by the Trust in connection with any error of judgment, mistake of law, any act or omission in connection with or arising out of any services rendered under or payments made pursuant to this Agreement or any other matter to which this Agreement relates, except by reason of willful misfeasance, bad faith or gross negligence on the part of any such persons in the performance of the duties of the Adviser under this Agreement or by reason of reckless disregard by any of such persons of the obligations and duties of the Adviser under this Agreement. Any person, even though also a director, officer, employee, shareholder or agent of the Adviser, who may be or become a trustee, officer, employee or agent of the Trust, shall be deemed, when rendering services to the Trust or + +3 + +acting on any business of the Trust (other than services or business in connection with the Adviser's duties hereunder), to be rendering such services to or acting solely for the Trust and not as a director, officer, employee, shareholder or agent, or one under the control or direction of the Adviser, even though paid by it. The Adviser is responsible for any information that it provides to the Trust for inclusion in the prospectus and/or statement of additional information of the Fund. The Adviser agrees to defend and indemnify the Trust, and its trustees, officers and agent from and against any and all liability, losses, claims and damages arising from any inaccurate or incomplete statement provided by the Adviser (or its officers, employees, directors and agents) for inclusion in the Fund's prospectus or statement of additional information. The Adviser agrees to defend and indemnify the Trust, and its trustees, officers and agents from and against any and all liability, losses, claims and damages arising from your willful misfeasance, bad faith or gross negligence on the Adviser's part or the part of the Adviser's officers, employees, directors and agents in the performance of the Adviser's duties under this Agreement, or by reason of reckless disregard by any of such persons of the Adviser's obligations and duties under this Agreement. + +8. Services for Others. Nothing in this Agreement shall prevent the Adviser or any affiliated person of the Adviser from providing services for any other person, firm or corporation, including other investment companies; provided, however, that the Adviser expressly represents that it will undertake no activities which, in its judgment, will adversely affect the performance of its obligations to the Trust under this Agreement. + +9. Renewal and Termination. The term of this Services Agreement shall begin on the date of execution and shall continue in effect for a period of two years. This Services Agreement shall continue in effect from year to year thereafter, subject to termination as hereinafter provided, if such continuance is approved at least annually by vote of a majority of the Trustees who are not interested persons of the Trust or the Adviser. This Agreement may be terminated without the payment of any penalty by either party upon sixty (60) days' written notice to the other party. Upon the termination of this Agreement, the Trust shall pay the Adviser such compensation as may be payable for the period prior to the effective date of such termination. This Agreement shall automatically terminate in the event the Management Agreement is assigned or otherwise terminated. + +10. The Trust. The term "PFS Funds" means and refers to the Trustees from time to time serving under the Trust's Agreement and Declaration of Trust as the same may subsequently thereto have been, or subsequently hereto may be, amended. It is expressly agreed that the obligations of the Trust hereunder shall not be binding upon any of the Trustees, officers, employees, agents or nominees of the Trust, or any shareholders of any series of the Trust, personally, but bind only the trust property of the Trust (and only the property of the Fund). The execution and delivery of this Agreement have been authorized by the Trustees of the Trust and signed by an officer of the Trust, acting as such, and neither such authorization by such Trustees nor such execution and delivery by such officer shall be deemed to have been made by any of them individually or to impose any liability on any of them personally, but shall bind only the trust property of the Trust (and only the property of the Fund) as provided in its Agreement and Declaration of Trust. A copy of the Agreement and Declaration of Trust is on file with the Secretary of State of Massachusetts. + +4 + +11. Miscellaneous. Each party agrees to perform such further acts and execute such further documents as are necessary to effectuate + + + + + +the purposes hereof. This Agreement shall be construed and enforced in accordance with and governed by the laws of the State of Massachusetts. This Agreement may be amended at any time by written instrument executed by each of the parties hereto. The captions in this Agreement are included for convenience of reference only and in no way define or delimit any of the provisions hereof or otherwise affect their construction or effect. + +IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the day and year first above written. + +PFS Funds By: /s/ Jeffrey R. Provence Print Name: Jeffrey R. Provence Title: Trustee, Secretary and Treasurer Potomac Fund Management, Inc. By: /s/ Manish Khatta Print Name: Manish Khatta Title: President + +5 \ No newline at end of file diff --git a/full_contract_txt/PHLVARIABLEINSURANCECOCT_08_17_2009-EX-10.1-STRATEGIC ALLIANCE AGREEMENT.txt b/full_contract_txt/PHLVARIABLEINSURANCECOCT_08_17_2009-EX-10.1-STRATEGIC ALLIANCE AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..615aa882ea8313dbf1abc58f56ef1ac3a1ee661f --- /dev/null +++ b/full_contract_txt/PHLVARIABLEINSURANCECOCT_08_17_2009-EX-10.1-STRATEGIC ALLIANCE AGREEMENT.txt @@ -0,0 +1,1593 @@ +STRATEGIC ALLIANCE AGREEMENT + +This agreement ("Agreement"), is entered into as of the date on which the Registration Statement is declared effective by the SEC (the "Effective Date"), by and among PHL VARIABLE INSURANCE COMPANY ("PHLVIC"), PHOENIX LIFE INSURANCE COMPANY, ("PLIC" and, together with PHLVIC, "PHL Variable"), PHOENIX EQUITY PLANNING CORPORATION ("PEPCO" and, together with PHLVIC and PLIC, the "PHL Parties"), and INVESTORS CAPITAL CORPORATION ("ICC"). Except as otherwise defined, capitalized terms used herein shall have the meanings given to them in Section 1 Definitions, below. + +RECITALS + +A. PHL Variable will offer to issue the GIE to ICC Customers. + +B. ICC is a broker dealer that is registered under the 1934 Act and with FINRA and an investment adviser that is registered with the SEC under the Advisers Act and doing business as an investment adviser as Investors Capital Advisory Services ("ICAS"). + +C. ICAS has established certain asset allocation Models that are eligible for use with the GIE, and in the future may establish other Models that become eligible for use with the GIE. + +D. ICC and the Phoenix Parties have previously entered into a Selling Agreement, effective as of December 1, 2002 and the addition of GIE to the Selling Agreement effective as of the Effective Date, pursuant to which ICC will solicit sales of the GIE to ICC Customers. + +E. The Parties desire to set forth herein certain of their respective duties and obligations in connection with the GIE, all upon the terms and subject to the conditions more fully set forth below. + +NOW, THEREFORE, in consideration of the foregoing recitals, the mutual covenants and obligations hereinafter set forth, and for other good and valuable considerations, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto, intending to be legally bound, agree as follows: + +SECTION 1 DEFINITIONS + + + + + + + + - 1 - + + 1.01 1933 Act. The Securities Act of 1933, as amended. 1.02 1934 Act. The Securities Exchange Act of 1934, as amended. + + 1.03 Advisers Act. The Investment Advisers Act of 1940, as amended. + + 1.04 Affiliate. With respect to a person, any other person controlling, controlled by, or under common control with, such person. + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + - 2 - + + 1.05 Agreement. The term shall have the meaning set forth in the introductory paragraph of this Agreement. + + 1.06 Application. The application, enrollment form, or similar form approved for use by PHL Variable by which an ICC Customer applies for a GIE. + + + +1.07 Books and Records. All books and records maintained or required by applicable Law to be maintained by each of the Parties hereto in connection with the Transaction Documents and the GIE, including to the extent any of the following exist: (i) hard copy and microfiche records; (ii) all paper files; (iii) all electronic images; (iv) all computer data files; and (v) any and all records in other forms. + + 1.08 Business Day. A day when the New York Stock Exchange is open for business. + + 1.09 Certificate. The certificate of insurance issued by PHL Variable to an ICC Customer pursuant to the Master Group Annuity Contract. + + 1.10 Certificate Owner. The person or entity that is the owner of a Certificate. + + 1.11 Change of Control. The term shall have the meaning set forth in Section 16.01.2. + + 1.12 Confidential Information. The term shall have the meaning set forth in Section 11.03.1 + + 1.13 Customer Complaint. The term shall have the meaning set forth in Section 11.04. + + 1.14 Determination. The term shall have the meaning set forth in Section 12.02.1.6. + + 1.15 ICC. The term shall have the meaning set forth in the introductory paragraph of this Agreement. + + 1.16 Effective Date. The date set forth in the introductory paragraph of this Agreement. + + 1.17 Fee Increase Notice Date. The term shall have the meaning set forth in Section 8.08.1. + + 1.18 Governmental Entity. Any domestic, federal or State, court, governmental or regulatory authority or agency, including State insurance and State securities regulators. + + 1.19 GIE. The Master Group Annuity Contracts and each Certificate issued by PHL Variable and registered on Form S-1 under the 1933 Act with the SEC under File No. 333-XXXXXX as in effect on the Effective Date, including any riders, endorsements or amendments to the Master Group Annuity Contracts or the Certificates, and each Application. + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + - 3 - + + 1.20 GIE Fees. The fees due to either PHLVIC or PLIC, as applicable, by a Certificate Owner under a Certificate for coverage under such Certificate. + + 1.21 Investment Company Act. The Investment Company Act of 1940, as amended. + + 1.22 IRC. The Internal Revenue Code of 1986, as amended. + + 1.23 Law. Any law, rule, regulation, order or written interpretation of any governmental body or self regulatory organization, and any writ, judgment, injunction or court decree. + + 1.24 ICAS. A business unit of ICC which is an investment adviser that is registered with the SEC under the Advisers Act + + 1.25 ICC GIE Persons. The term shall have the meaning set forth in Section 8.07.1. + + 1.26 Investors Capital Indemnitees. The term shall have the meaning set forth in Section 12.01. + + 1.27 ICC. The term shall have the meaning set forth in the introductory paragraph of this Agreement. + + 1.28 ICC Licensed Marks. The term shall have the meaning set forth in Section 9.02.2. + + 1.29 Investors Capital Services. The term shall have the meaning set forth in Section 8.02.1. + + 1.30 License. The term shall have the meaning set forth in Section 9.02.2. + + 1.31 Licensee. The term shall have the meaning set forth in Section 9.02.4. + + 1.32 Licensor. The term shall have the meaning set forth in Section 9.02.4. + + 1.33 ICC Account. An account established by an ICC Customer that is invested in accordance with a Model managed by ICAS and eligible for coverage under a GIE. + + 1.34 ICC Customer. A customer or client of ICC who has established an ICC Account. + + 1.35 Master Group Annuity Contracts. The Master Group Annuity Contracts entered into by and between PHLVIC and ICC or an Affiliate, and by and between PLIC and ICC or an Affiliate + + 1.36 Memorandum of Understanding. The confidential Memorandum of Understanding, dated as of the Effective Date, entered into by and among PHLVIC, PLIC and ICC. + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + - 4 - + + 1.37 Models. The confidential and proprietary asset allocation models managed by ICAS more fully described in the Memorandum of Understanding. + + 1.38 Nonpublic Personal Information. The term shall have the meaning set forth in Section 11.03.1 + + 1.39 Parties. The term "Parties" refers to PHLVIC, PLIC, PEPCO, and ICC collectively and the term "Party" refers to each of them individually. + + 1.40 PEPCO. The term shall have the meaning set forth in the introductory paragraph of this Agreement. + + 1.41 PHL GIE Persons. This term shall have the meaning set forth in Section 8.07.1 + + 1.42 PHL Parties. The term shall have the meaning set forth in the introductory paragraph of this Agreement. + + 1.43 PHL Licensed Marks. This term shall have the meaning set forth in Section 9.02.3. + + 1.44 PHL Services. The term shall have the meaning set forth in Section 7.03.1. + + 1.45 PHL Variable. The term shall have the meaning set forth in the introductory paragraph of this Agreement. + + 1.46 PHLVIC. The term shall have the meaning set forth in the introductory paragraph of this Agreement. + + 1.47 PLIC. The term shall have the meaning set forth in the introductory paragraph of this Agreement. + + 1.48 Prospectus. The prospectus included within a Registration Statement, including supplements thereto filed under Rule 424 under the 1933 Act, prepared by PHL Variable, from and after the date on which each shall have been filed. + + + +1.49 Registration Statement. At any time that this Agreement is in effect, each currently effective registration statement and each currently effective post-effective amendment thereto filed with the SEC under the 1933 Act on Form S-1 or otherwise relating to the GIE including the Prospectus and financial statements included in, and all exhibits to, such registration statement or post- effective amendment prepared by PHL Variable. + + 1.50 SEC. The United States Securities and Exchange Commission. + + 1.51 Selling Agreement. The Selling Agreement effective as of December 1, 2002 and the addition of GIE to the Selling Agreement effective as of the Effective Date, by and among the Parties, as amended from time to time, pursuant to which ICC will solicit sales of the GIE from ICC Customers. + + + + + + + + + + + + + + + +SECTION 2 TERM + +SECTION 3 REPRESENTATIONS AND WARRANTIES OF ICC ICC hereby represents and warrants to the PHL Parties as follows: + + + + + + + + - 5 - + + 1.52 State. Any state of the United States and the District of Columbia. + + 1.53 Term. The term shall have the meaning set forth in Section 2. + + 1.54 Territory. The Territory shall initially consist of all States, as may be changed from time to time by the written agreement of the Parties. + + 1.55 Trademark Consent. The term shall have the meaning set forth in Section 10.02.1. + + 1.56 Trademark License Terms. The term shall have the meaning set forth in Section 10.02.2. + + 1.57 Transaction Documents. The term shall mean this Agreement, the Memorandum of Understanding, and the GIE. + + 2.01 This Agreement shall commence on the Effective Date and shall continue until it is terminated in accordance with the provisions of Section 15 of this Agreement ("Term"). + + 3.01 Organization. ICC is a corporation duly incorporated and validly existing under the laws of the State of Massachusetts. + + 3.02 Power and Authority. ICC has the requisite power and authority under its articles of incorporation and by-laws to enter into and perform its duties and obligations under the Transaction Documents to which it is a party. + + + +3.03 Corporate Action. All requisite actions have been taken to authorize ICC to enter into and perform its duties and obligations set forth in the Transaction Documents to which it is a party and to execute and deliver the Transaction Documents to which it is a party and, when so executed and delivered, the Transaction Documents to which it is a party shall constitute the valid and binding obligations of ICC enforceable against it in accordance with its terms. + + + +3.04 Non-Contravention. ICC has duly executed and delivered this Agreement and neither such execution and delivery nor the performance by ICC of any of its obligations under the Transaction Documents to which it is a party will (i) violate any provision of its articles of incorporation or by-laws (ii) result in a violation or breach of, or constitute a default or an event of default under, any indenture, mortgage, bond or other contract, license, agreement, permit, instrument or other commitment or obligation to which it is a party or by which it is bound or (iii) materially violate any Law applicable to it or its business. + + + + + + + + + + + + + + + + + +SECTION 4 REPRESENTATIONS AND WARRANTIES OF PHLVIC PHLVIC hereby represents and warrants to the ICC as follows: + + - 6 - + + + +3.05 Licenses and Permits. As of the Effective Date, ICC on its behalf and on behalf of ICAS has, and during the term of this Agreement shall use reasonable efforts to maintain, all material licenses, permits, registrations, authorizations, orders, consents, and other approvals by each Government Entity necessary or advisable for the performance of its obligations under the Transaction Documents to which it is a party. + + 3.06 Compliance with Law. As of the Effective Date, ICC shall use reasonable efforts to conduct and will continue to conduct business operations in connection with performance of its duties and obligations under the Transaction Documents to which it is a party in compliance in all material respects with applicable Law. + + 3.07 Equipment, Facilities and Staff. ICC has the equipment, facilities, systems, staff and other assets necessary to perform its duties and obligations under the Transaction Documents to which it is a party. + + 3.08 Pending Litigation and Actions. ICC is not subject to any current or pending litigation or any pending regulatory actions that would materially impair its ability to carry out its duties and obligations under the Transaction Documents to which it is a party. + + + +3.09 Registration Statement and Prospectus. All information about ICC and ICAS that ICC has provided to PHL Variable for use in the Registration Statement did not, on the effective date of the Registration Statement, contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein not misleading in light of the circumstances under which they were made. ICC shall promptly notify PHLVIC in the event ICC believes the representations and warranties in this Section 3.09 are no longer true in any material respect (it being understood that no representation is made with respect to information about the PHL Parties or the GIE). + + 3.10 Master Group Annuity Contracts. ICC shall cause itself or an Affiliate to enter into the Master Group Annuity Contracts by and between PHLVIC and ICC or an Affiliate, and by and between PLIC and ICC or an Affiliate + + 3.11 Form ADV, Part II, Sch. H. Schedule H of Part II of ICAS' Form ADV relating to the Models is in compliance with Rule 204-3(f) under the Advisers Act and the requirements of Schedule H of Part II of Form ADV. ICC shall promptly notify each of the PHL Parties if there are any material changes to the Form ADV, Part II, Schedule H relating to the Models. + + 4.01 Organization. PHLVIC is a corporation duly incorporated and validly existing under the laws of the State of Connecticut. + + + + + + + + + + + + + + + + + + + + - 7 - + + 4.02 Power and Authority. PHLVIC has the requisite power and authority under its articles of incorporation and by-laws to enter into and perform its duties and obligations under the Transaction Documents to which it is a party. + + + +4.03 Corporate Action. All requisite actions have been taken to authorize PHLVIC to enter into and perform its duties and obligations set forth in the Transaction Documents to which it is a party and to execute and deliver the Transaction Documents to which it is a party and, when so executed and delivered, the Transaction Documents to which it is a party shall constitute the valid and binding obligation of PHLVIC enforceable against it in accordance with its terms. + + + +4.04 Non-Contravention. PHLVIC has duly executed and delivered this Agreement and neither such execution and delivery nor the performance by PHLVIC of any of its obligations under the Transaction Documents to which it is a party will (i) violate any provision of its articles of incorporation or by-laws (ii) result in a violation or breach of, or constitute a default or an event of default under, any indenture, mortgage, bond or other contract, license, agreement, permit, instrument or other commitment or obligation to which it is a party or by which it is bound or (iii) materially violate any Law applicable to it or its business. + + + +4.05 Licenses and Permits. As of the Effective Date, PHLVIC has, and during the term of this Agreement shall use reasonable efforts to maintain all material licenses, permits, registrations, authorizations, orders, consents, and other approvals by each Government Entity necessary or advisable for the performance of its obligations under the Transaction Documents to which it is a party. + + 4.06 Compliance with Law. As of the Effective Date, PHLVIC shall use reasonable efforts to conduct and will continue to conduct business operations in connection with performance of its duties and obligations under the Transaction Documents to which it is a party in compliance in all material respects with applicable Law. + + 4.07 Equipment, Facilities and Staff. PHLVIC has the equipment, facilities, systems, staff and assets necessary to perform its duties and obligations under the Transaction Documents to which it is a party. + + 4.08 Pending Litigation and Actions. PHLVIC is not subject to any current or pending litigation or regulatory actions that would materially impair its ability to carry out its duties and obligations under the Transaction Documents to which it is a party. + + + +4.09 Registration Statement and Prospectus. The Registration Statement, on the date of which it was declared effective, did not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein not misleading in light of the circumstances under which they were made (it being understood that no representation is made with respect to information about ICAS or ICC provided by ICAS or ICC in writing to PHL Variable). All statements in the Registration Statement, on the date of which it was declared + + + + + + + + + + - 8 - + + + +effective, relating to taxation and tax effects are true in all material respects. The Prospectus or other information contained in the Registration Statement, when disseminated or used after the effective date of the Registration Statement, shall not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein not misleading in light of the circumstances under which they were made (it being understood that no representation is made with respect to information about ICAS or ICC provided by ICAS or ICC in writing to PHL Variable). PHLVIC shall immediately notify ICC in the event PHLVIC believes or has reason to believe that the representations and warranties in this paragraph are no longer true or completely accurate. + + + +4.10 Tax Matters. It is more likely than not that: (1) PHLVIC will not be treated as the owner of the assets in an ICC Account for federal income tax purposes; (2) the GIE, including each Certificate, will be treated as an annuity contract for federal income tax purposes; however, if the value of an ICC Account happens to be greater than zero when an Owner's life expectancy is less than one year (which will only occur at extremely advanced ages), it is possible that the Policy could be treated as no longer constituting an annuity contract for Federal tax purposes from that point on; (3) for all Certificate Holders on the date of GIE issuance and during the entire period during which the GIE and each Certificate is in effect, losses with respect to the ICC Account will be deductible under Section 165(a) of the IRC notwithstanding the existence of the GIE' conditional guarantee of annual lifetime income payments in the event that the value of the assets in an ICC Account decreases to zero; (4) for all Certificate Owners on the date of GIE issuance and during the entire period during which the GIE and each Certificate is in effect, dividends on stock held in an ICC Account otherwise meeting the requirements of Section 1(h)(11) of the IRC will constitute qualified dividend income notwithstanding the existence of a GIE and its conditional guarantee of annual lifetime income payments in the event the value of the assets in the ICC Account decreases to zero; and (5) for each Certificate Owner on the date of Certificate issuance and during the entire period during which the GIE and each Certificate is in effect, the Certificate and assets in the ICC Account subject thereto will not be treated as a straddle under Section 1092 of the IRC. + + + +4.11 Ownership of GIE; No Claims Relating to GIE. Except as set forth in Section 10.01, PHLVIC and its Affiliates, as applicable, are the exclusive legal and beneficial owner of and have good and marketable title in and to the GIE and all intellectual property rights therein, free and clear of all pledges, claims, liens, charges, encumbrances and security interests of any kind or character, including any claims for infringement of intellectual property rights. For the purposes of this Section, intellectual property includes GIE forms, specimen forms, the features of the GIE, materials filed by any of the PHL Parties with State insurance regulators, and any other forms prepared by any of the PHL Parties or any of their Affiliates in connection with the GIE. There are no claims, actions, suits, investigations or proceedings (arbitration or otherwise) pending against, or to the knowledge of PHLVIC, threatened against or affecting, all or any part of the GIE + + + + + +SECTION 5 REPRESENTATIONS AND WARRANTIES OF PLIC PLIC hereby represents and warrants to the ICC as follows: + + + + + + + + + + + + + + - 9 - + + or to the transactions contemplated by any of the Transaction Documents. To the knowledge of PHLVIC, there are no facts that could reasonably serve as a basis for such claim, action, suit, investigation or proceeding. The use and issuance of the GIE does not and will not infringe, misappropriate, violate or dilute any intellectual property rights of any person. + + 5.01 Organization. PLIC is a corporation duly incorporated and validly existing under the laws of the State of New York. + + 5.02 Power and Authority. PLIC has the requisite power and authority under its articles of incorporation and by-laws to enter into and perform its duties and obligations under the Transaction Documents to which it is a party. + + + +5.03 Corporate Action. All requisite actions have been taken to authorize PLIC to enter into and perform its duties and obligations set forth in the Transaction Documents to which it is a party and to execute and deliver the Transaction Documents to which it is a party and, when so executed and delivered, the Transaction Documents to which it is a party shall constitute the valid and binding obligation of PLIC enforceable against it in accordance with its terms. + + + +5.04 Non-Contravention. PLIC has duly executed and delivered this Agreement and neither such execution and delivery nor the performance by PLIC of any of its obligations under the Transaction Documents to which it is a party will (i) violate any provision of its articles of incorporation or by-laws (ii) result in a violation or breach of, or constitute a default or an event of default under, any indenture, mortgage, bond or other contract, license, agreement, permit, instrument or other commitment or obligation to which it is a party or by which it is bound or (iii) materially violate any Law applicable to it or its business. + + 5.05 Licenses and Permits. As of the Effective Date, PLIC has, and during the term of this Agreement shall use reasonable efforts to maintain all material licenses, permits, registrations, authorizations, orders, consents, and other approvals by each Government Entity necessary or advisable for the performance of its obligations under the Transaction Documents to which it is a party. + + 5.06 Compliance with Law. As of the Effective Date, PLIC shall use reasonable efforts to conduct and will continue to conduct business operations in connection with performance of its duties and obligations under the Transaction Documents to which it is a party in compliance in all material respects with applicable Law. + + 5.07 Equipment, Facilities and Staff. PLIC has the equipment, facilities, systems, staff and assets necessary to perform its duties and obligations under the Transaction Documents to which it is a party. + + + + + + + + + + + + - 10 - + + 5.08 Pending Litigation and Actions. PLIC is not subject to any current or pending litigation or regulatory actions that would materially impair its ability to carry out its duties and obligations under the Transaction Documents to which it is a party. + + + +5.09 Registration Statement and Prospectus. The Registration Statement, on the date of which it was declared effective, did not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein not misleading in light of the circumstances under which they were made (it being understood that no representation is made with respect to information about ICAS or ICC provided by ICAS in writing to PHL Variable). All statements in the Registration Statement, on the date of which it was declared effective, relating to taxation and tax effects are true in all material respects. The Prospectus or other information contained in the Registration Statement, when disseminated or used after the effective date of the Registration Statement, shall not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein not misleading in light of the circumstances under which they were made (it being understood that no representation is made with respect to information about ICAS or ICC provided by ICAS or ICC in writing to PHL Variable). PLIC shall immediately notify ICC in the event PLIC believes or has reason to believe that the representations and warranties in this paragraph are no longer true or completely accurate. + + + +5.10 Tax Matters. It is more likely than not that: (1) PLIC will not be treated as the owner of the assets in an ICC Account for federal income tax purposes; (2) the GIE, including each Certificate, will be treated as an annuity contract for federal income tax purposes; (3) for all Certificate Holders on the date of GIE issuance and during the entire period during which the GIE and each Certificate is in effect, losses with respect to the ICC Account will be deductible under Section 165(a) of the IRC notwithstanding the existence of the GIE' conditional guarantee of annual lifetime income payments in the event that the value of the assets in an ICC Account decreases to zero; (4) for all Certificate Owners on the date of GIE issuance and during the entire period during which the GIE and each Certificate is in effect, dividends on stock held in an ICC Account otherwise meeting the requirements of Section 1(h)(11) of the IRC will constitute qualified dividend income notwithstanding the existence of a GIE and its conditional guarantee of annual lifetime income payments in the event the value of the assets in the ICC Account decreases to zero; and (5) for each Certificate Owners on the date of Certificate issuance and during the entire period during which the GIE and each Certificate is in effect, the Certificate and assets in the ICC Account subject thereto will not be treated as a straddle under Section 1092 of the IRC. + + + +5.11 Ownership of GIE; No Claims Relating to GIE. Except as set forth in Section 11.01, PLIC and its Affiliates, as applicable, are the exclusive legal and beneficial owner of and have good and marketable title in and to the GIE and all intellectual property rights therein, free and clear of all pledges, claims, liens, charges, encumbrances and security interests of any kind or character, including any claims for infringement of intellectual property rights. For the purposes of this + + + + + +SECTION 6 REPRESENTATIONS AND WARRANTIES OF PEPCO PEPCO hereby represents and warrants to the ICC as follows: + + + + + + + + + + + + - 11 - + + + +Section, intellectual property includes GIE forms, specimen forms, the features of the GIE, materials filed by any of the PHL Parties with State insurance regulators, and any other forms prepared by any of the PHL Parties or any of their Affiliates in connection with the GIE. There are no claims, actions, suits, investigations or proceedings (arbitration or otherwise) pending against, or to the knowledge of PLIC, threatened against or affecting, all or any part of the GIE or to the transactions contemplated by any of the Transaction Documents. To the knowledge of PLIC, there are no facts that could reasonably serve as a basis for such claim, action, suit, investigation or proceeding. The use and issuance of the GIE does not and will not infringe, misappropriate, violate or dilute any intellectual property rights of any person. + + 6.01 Organization. PEPCO is a corporation duly incorporated and validly existing under the laws of the State of Delaware. + + 6.02 Power and Authority. PEPCO has the requisite power and authority under its articles of incorporation and by-laws to enter into and perform its duties and obligations under the Transaction Documents to which it is a party. + + + +6.03 Corporate Action. All requisite actions have been taken to authorize PEPCO to enter into and perform its duties and obligations set forth in the Transaction Documents to which it is a party and to execute and deliver the Transaction Documents to which it is a party and, when so executed and delivered, the Transaction Documents to which it is a party shall constitute the valid and binding obligations of PEPCO enforceable against it in accordance with its terms. + + + +6.04 Non-Contravention. PEPCO has duly executed and delivered this Agreement and neither such execution and delivery nor the performance by PEPCO of any of its obligations under the Transaction Documents to which it is a party will (i) violate any provision of its articles of incorporation or by-laws (ii) result in a violation or breach of, or constitute a default or an event of default under, any indenture, mortgage, bond or other contract, license, agreement, permit, instrument or other commitment or obligation to which it is a party or by which it is bound or (iii) materially violate any Law applicable to it or its business. + + + +6.05 Licenses and Permits. As of the Effective Date, PEPCO has, and during the term of this Agreement shall use reasonable efforts to maintain all material licenses, permits, registrations, authorizations, orders, consents, and other approvals by each Government Entity necessary or advisable for the performance of its obligations under the Transaction Documents to which it is a party. + + 6.06 Compliance with Law. As of the Effective Date, PEPCO shall use reasonable efforts to conduct and will continue to conduct business operations in connection with performance of its duties and obligations under the Transaction Documents to which it is a party in compliance in all material respects with applicable Law. + + + + + + + + + +SECTION 7 OBLIGATIONS OF THE PHL PARTIES + + + + - 12 - + + 6.07 Equipment, Facilities and Staff. PEPCO has the equipment, facilities, systems, staff and assets necessary to perform its duties and obligations under the Transaction Documents to which it is a party. + + 6.08 Pending Litigation and Actions. PEPCO is not subject to any current or pending litigation or regulatory actions that would materially impair its ability to carry out its duties and obligations under the Transaction Documents to which it is a party. + + + +6.09 Registration Statement and Prospectus. The Registration Statement, on the date of which it was declared effective, did not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein not misleading in light of the circumstances under which they were made (it being understood that no representation is made with respect to information about ICAS or ICC provided by ICAS or ICC in writing to PHL Variable). All statements in the Registration Statement, on the date of which it was declared effective, relating to taxation and tax effects are true in all material respects. The Prospectus or other information contained in the Registration Statement, when disseminated or used after the effective date of the Registration Statement, shall not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein not misleading in light of the circumstances under which they were made (it being understood that no representation is made with respect to information about ICAS or ICC provided by ICAS or ICC in writing to PHL Variable). PEPCO shall immediately notify ICC in the event PEPCO believes or has reason to believe that the representations and warranties in this paragraph are no longer true or completely accurate. + + 7.01 Adequate Resources. Each of the PHL Parties shall devote commercially reasonable resources to ensure each of them and their Affiliates, as applicable, can perform their respective duties and obligations under the Transaction Documents. + + + +7.02 GIE Filing and Approval. PHL Variable shall take all commercially reasonable efforts to (1) qualify the offer and sale of the GIE in each jurisdiction within the Territory, and (2) obtain any approvals that are or may be required by any Governmental Entity to permit or facilitate the offer and sale of the GIE in each such jurisdiction; provided however that neither PHL Variable nor any other PHL Party shall be required to seek to qualify the offer and sale of the GIE or obtain any approvals to permit or facilitate the offer or sale of the GIE in the State of New York or the State of Maine. Such actions shall include, as applicable, filing the Registration Statement and using commercially reasonable efforts to maintain the effectiveness of the Registration Statement, filing forms of the Master Group Annuity Contracts, Certificates, and Applications with Governmental Entities, + + + + + + + + + + + + + + + + + + + + + + - 13 - + + including State insurance departments, and filing or submitting such notices, requests, and other documents in furtherance of the foregoing. One or more of the PHL Parties will immediately notify ICC if any Governmental Entity withdraws or modifies a previously issued approval of the GIE. 7.03 Administrative Services. + + 7.03.1 PHL Services. During the Term, each of the PHL Parties, as applicable, shall use commercially reasonable efforts to provide those administrative services set forth on Exhibit A (the "PHL Services"). + + + +7.03.2 Standards for Services. In performing the PHL Services, each of the PHL Parties shall at all times (1) act in good faith and with the care, skill, and diligence of a person experienced in providing services similar to the PHL Services; (2) perform such services consistent with applicable Law, and (3) perform such services in a manner the Parties may agree in writing from time to time. + + + +7.03.3 Subcontracting with Affiliates. The PHL Parties may subcontract with one or more of their Affiliates for the performance of some or all of the PHL Services; provided, however, that no subcontract shall relieve any of the PHL Parties from any of their respective duties, obligations or liabilities under this Agreement and each of the PHL Parties shall remain responsible for all such duties, obligations and liabilities, whether or not performed in whole or in part by a subcontractor. + + 7.04 Continuing Duties and Obligations. Nothing contained in the Transaction Documents shall relieve any of the PHL Parties from their respective duties and obligations under any of the other Transaction Documents. + + + +7.05 Registrations and Licenses. Each of the PHL Parties shall maintain, and cause each of the directors, officers, employees, agents and representatives of each of the PHL Parties or any Affiliate thereof to maintain all material registrations, licenses, memberships, approvals, and consents necessary or desirable to carry out their respective obligations under any of the Transaction Documents during the terms of the Transaction Documents, as applicable. PHL Variable shall promptly notify ICC in writing upon the lapse, termination, non-renewal, suspension, revocation, or cancellation (without replacement) of any such registration, license, membership, approval, order or consent. + + 7.05.1 Books and Records. Each of PHLVIC and PLIC shall maintain their respective Books and Records as required by applicable Law. + + 7.06 Non-Solicitation. During the term hereof and for a period of two years following termination, none of the PHL Parties, any of their Affiliates, or any of their respective officers, directors, employees, agents, or representatives, shall, without the prior written approval of ICC, knowingly and intentionally market any + + + + + +SECTION 8 OBLIGATIONS OF ICC + + + + + + + + + + + + + + + + - 14 - + + + +products or services to an ICC Client or Certificate Owner other than the GIE, if such ICC Client or Certificate Owner is identified from information any of the PHL Parties, any of their Affiliates, or any of their respective officers, directors, employees, agents, or representatives, obtain pursuant to any of the Transaction Documents or any transaction contemplated thereunder. PHLVIC and PLIC may communicate with Certificate Owners as is necessary to administer the Certificates or as required by applicable Law. + + 8.01 Adequate Resources. ICC shall devote commercially reasonable resources to ensure it can perform its duties and obligations under the Transaction Documents. + + 8.02 Administrative Services. + + 8.02.1 Investors Capital Services. During the Term, ICC shall use commercially reasonable efforts to provide those administrative services set forth on Exhibit B (the "Investors Capital Services"). + + + +8.02.2 Standards for Services. In performing the Investors Capital, ICC shall at all times (1) act in good faith and with the care, skill, and diligence of a person experienced in providing services similar to the Investors Capital; (2) perform such services consistent with applicable Law, and (3) perform such services in a manner the Parties may agree in writing from time to time. + + + +8.02.3 Subcontracting with Affiliates. ICC may subcontract with one or more of their Affiliates for the performance of some or all of the Investors Capital; provided, however, that no subcontract shall relieve e ICC from any of its duties, obligations or liabilities under this Agreement and ICC shall remain responsible for all such duties, obligations and liabilities, whether or not performed in whole or in part by a subcontractor. + + 8.03 Continuing Duties and Obligations. Nothing contained in the Transaction Documents shall relieve ICC from its respective duties and obligations under any of the other Transaction Documents. + + + +8.04 Information to be Provided to the PHL Parties. ICC shall provide to the PHL Parties such information reasonably necessary to describe ICAS and ICC in the Registration Statement and Prospectus. Such information shall not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements provided not misleading in light of the circumstances under which they were made (it being understood that no representation is made with respect to information about the PHL Parties or the GIE). + + 8.05 Registrations and Licenses. ICC shall maintain, and cause each of the directors, officers, employees, agents and representatives of ICC or any Affiliate thereof to maintain all material registrations, licenses, memberships, approvals, and consents + + + + + + + + + + + + + + + + + + + + + + + + - 15 - + + + +necessary or desirable to carry out their respective obligations under this Agreement or the Master Group Annuity Contracts during the terms of such agreements, as applicable. ICC shall promptly notify each of the PHL Parties in writing upon the lapse, termination, non-renewal, suspension, revocation or cancellation (without replacement) of any such registration, license, membership, approval, order or consent. 8.06 Books and Records. ICC shall maintain its Books and Records as required by applicable Law. + + 8.07 Proprietary Interests of the PHL Parties. + + 8.07.1 Interference with Contracts. During the term hereof and for a period of two years following termination, ICC, any of their Affiliates, or any of their respective officers, directors, employees, agents, or representatives will: + + + +8.07.1.1 knowingly and intentionally interfere in any way with the contractual relationships existing between or among any of the PHL Parties or their Affiliates (as the case may be), on the one hand, and any officer, director, employee, agent, or other representative of any of the PHL Parties or their Affiliates assigned to assist the Parties or their Affiliates in connection with the negotiation and implementation of the GIE and any Transaction Document, or the sales and marketing of the GIE ("PHL GIE Persons"), on the other; + + 8.07.1.2 knowingly and intentionally induce, solicit, or encourage PHL GIE Persons to terminate their respective contracts, or otherwise change their relationship, with any of the PHL Parties or their Affiliates; or + + 8.07.1.3 without the prior written consent of the PHL Parties, employ or otherwise contract with any PHL GIE Persons. + + 8.08 ICAS Advisory Fees. + + + +8.08.1 Existing ICC Accounts. During the Term, ICAS may increase the investment advisory fee ICAS charges ICC Customers in connection with any ICC Account that exists on the date ICC provides notice to PHL Variable of the proposed fee increase (such date, the "Fee Increase Notice Date") only upon receipt of the written consent of PHL Variable, which consent shall not be unreasonably withheld. If PHL Variable does not disapprove the proposed fee increase within 10 days from the Fee Increase Notice Date, then such increase shall be deemed approved. + + 8.08.2 New ICC Accounts. During the Term, ICAS may increase the investment advisory fee ICAS charges ICC Customers in connection with + + + + + +SECTION 9 INTELLECTUAL PROPERTY RIGHTS. + + + + + + + + + + - 16 - + + any ICC Account established after the Fee Increase Notice Date so long as the fee increase will not take effect for at least 30 days from the Fee Increase Notice Date. + + + +9.01 Ownership of GIE. Notwithstanding anything to the contrary contained in any of the Transaction Documents, none of the PHL Parties or any of their Affiliates shall own (1) any information about ICC or any of their Affiliates, whether contained or referenced in the GIE, Prospectus, Registration Statement, or otherwise, (2) any of the Books or Records of any of ICC or any of their Affiliates, or (3) any data or other information relating to an ICC Account or ICC Client. + + 9.02 Names, Logos, Trademarks, and Service Marks. + + 9.02.1 Prohibition. No Party shall use any of the names, trade names, trademarks, service marks and logos of another Party without the prior written consent of such Party (the "Trademark Consent"). The provisions of Section 10.02 shall apply in the event a Trademark Consent is given. + + + +9.02.2 ICC Licensed Marks. ICC or one of its Affiliates, as applicable, is the owner of all rights, title and interests in and to the names, trade names, trademarks, service marks and logos specified in and attached to the Trademark Consent of such Party or Affiliate (collectively, the "ICC Licensed Marks"). Except as may be otherwise specified in its Trademark Consent, during the Term and subject to Section 9.02.5, the terms and conditions of the Trademark Consent, and the additional trademark terms and conditions set forth on Exhibit C ("Trademark License Terms"), ICC or its Affiliates, as applicable, shall grant to the PHL Parties and their Affiliates, as applicable, a non-exclusive limited license (a "License") to use the ICC Licensed Marks solely in connection with the performance of the duties and obligations of each of the PHL Parties and their Affiliates, as applicable, under the Transaction Documents. Each of the PHL Parties, on behalf of itself and any of its Affiliates, acknowledges that this Section 9.02.2, together with the Trademark Consent and Trademark License Terms, constitute a complete grant of the rights within this Section 9.02.2. + + + +9.02.3 PHL Variable Licensed Marks. Each of the PHL Parties or each of their Affiliates, as applicable, is the owner of all rights, title and interests in and to the names, trade names, trademarks, service marks and logos specified in and attached to the Trademark Consent of such Party or Affiliate (collectively, the "PHL Licensed Marks"). Except as may be otherwise specified in its Trademark Consent, during the Term and subject to Section 9.02.5, the terms and conditions of the Trademark Consent and the Trademark License Terms, each of the PHL Parties or its Affiliates, as applicable, shall grant to ICC and their Affiliates, as applicable, a non-exclusive + + + + + + + + + + + + + + + + + + - 17 - + + + +limited license (a "License") to use the PHL Licensed Marks solely in connection with the performance of the duties and obligations of ICC and its Affiliates, as applicable, under the Transaction Documents. ICC, on behalf of itself and any of its Affiliates, acknowledges that this Section 9.02.3 together with the Trademark Consent and Trademark License Terms constitute a complete grant of the rights within this Section 9.02.3. + + 9.02.4 Definitions. Each Party granting a License is sometimes referred to as a "Licensor" and each recipient of the grant is sometimes referred to as a "Licensee." 9.02.5 Terms and Conditions + + 9.02.5.1 Termination. Subject to the restrictions set forth in this Section, each License shall terminate as follows: + + + +9.02.5.1.1 In the event of a complete termination of this Agreement under Sections 15.01 and 15.02 as to all Certificates, the grant of all Licenses shall automatically terminate as of the effective date of termination. In the event of such termination, ICC and its Affiliates shall cease using the PHL Licensed Marks and each of the PHL Parties and their Affiliates shall cease using the Investors Capital Licensed Marks. + + + +9.02.5.1.2 In the event of termination under Section 15.02.1 as to new business and during such time as any Certificate remains in force and benefit payments thereunder have not commenced, the grant of all Licenses shall continue only as necessary for the Parties to carry out their respective duties and obligations under the Transaction Documents as applicable. For the purposes of clarity, each Party acknowledges that the Licenses shall not extend to sales and distribution of the GIE after the effective date of termination pursuant to Section 15.02.1, and upon such termination, ICC and its Affiliates shall cease using the PHL Licensed Marks and each PHL Party and their Affiliates shall cease using the Investors Capital Licensed Marks in connection with the sales and distribution of the GIE. + + + +9.02.5.1.3 In the event of termination under Section 15.02.1 as to new business and during such time as the only Certificates remaining in force are those with respect to which benefit payments have commenced, the grant of the License to the PHL Parties and their Affiliates shall + + + + + + + + + + + + - 18 - + + + +continue only as necessary to make benefit payments under such Certificates and only until payment of the last benefit due is made under the last Certificate in force. In the event of such termination, (1) the License granted to ICC and its Affiliates shall terminate on the date on which the only remaining Certificates in force are those under which benefit payments have commenced and thereafter ICC and its Affiliates shall cease using all PHL Licensed Marks, and (2) the License granted to the PHL Parties and their Affiliates, restricted as noted in this subsection, shall terminate on the date on which the last benefit payment is made under the last Certificate in force and thereafter the PHL Parties and their Affiliates shall cease using all Investors Capital Licensed Marks. + + 9.02.5.1.4 In the event of suspension under Section 15.02.2, the grant of all Licenses shall continue only as necessary for the Parties to carry out their respective duties and obligations under the Transaction Documents, as applicable. + + + +9.02.5.2 Pre-Use Approval of Trademark-Bearing Materials, Names and Logos. A Licensee shall obtain the prior written consent of the Licensor for the use or public release by such Licensee of any materials bearing the Licensor's licensed marks. With respect to the use of names or logos, none of the PHL Parties or their Affiliates, as applicable, shall use in advertising or publicity the names of any of ICC or its Affiliates, as applicable, or any symbol, abbreviation, contraction or simulation thereof or relating to ICC or an ICC Account, without the prior written consent of ICC, as applicable. With respect to the use of names or logos, ICC or its Affiliates, as applicable, shall not use in advertising or publicity the names of any of the PHL Parties or their Affiliates, or any symbol, abbreviation, contraction or simulation thereof, without the prior written consent of the PHL Parties, as applicable. + + + +9.02.5.3 Recall. A Licensor may revoke a Trademark Consent or the prior written consent provided pursuant to Section 9.02.5(b) only in the event of a material change in circumstances or in the event of a breach by a Licensee of Section 9.02, the Trademark Consent, and/or the Trademark License Terms. If the Trademark Consent or such other consents are properly revoked, then Licensee shall cease using all licensed marks affected by the revoked consent. + + + + + + + + + +SECTION 10 COMPENSATION AND EXPENSES + + + +SECTION 11 ADDITIONAL COVENANTS + + + + + + + + + + - 19 - + + 9.02.5.4 Acknowledgment of Ownership. Each Licensee: + + + +9.02.5.4.1 acknowledges and stipulates that the Licensor's licensed marks are valid and enforceable trademarks and/or service marks; and that such Licensee does not own the Licensor's licensed marks and claims no rights therein other than as a Licensee under this Agreement; and + + 9.02.5.4.2 shall not alter the Licensor's licensed marks in any respect but shall use them only in the manner in which they are depicted in the Trademark Consent, as may be amended from time to time by Licensor. + + + +10.01 Compensation. ICC and its Affiliates shall not be entitled to payment or other compensation of any kind or character from any of the PHL Parties or their Affiliates, and none of the PHL Parties or their Affiliates shall be entitled to payment or other compensation of any kind or character from ICC or its Affiliates, for performing their respective duties and obligations under any of the Transaction Documents. ICC acknowledges that (1) ICC and its Affiliates may benefit from sale of the GIE, and (2) such benefits constitute good and valuable consideration under this Agreement. The Parties acknowledge that the grant of Licenses pursuant to Section 9.02 also constitutes good and valuable consideration. + + 10.02 Expenses. Each Party shall be obligated to pay all costs and expenses it incurs in connection with developing and implementing the GIE and incident to preparing for, entering into and carrying out this each of the Transaction Documents, as applicable, and the transactions contemplated therein. + + 11.01 Compliance with Applicable Law. + + 11.01.1 Each Party shall perform, and shall cause each of its respective Affiliates, as applicable, to perform, their respective duties and obligations under the Transaction Documents in compliance in all material respects with applicable Law. + + 11.02 Confidentiality. 11.02.1 Definition. + + + +11.02.1.1 "Confidential Information" means information obtained from a Party (i) in connection with the development of or performance of any of the Transaction Documents; (ii) concerning customers of the Parties or customers of their Affiliates, including their identities, addresses, and telephone numbers; (iii) as to a Party's or its Affiliate's business methods, operations, or affairs, or the + + + + + + + + + + + + + + + + + + + + - 20 - + + processes and systems used in the operation of its or its Affiliate's business; (iv) concerning the Parties and their Affiliates that is identified as confidential by a Party; or (v) required to be treated as confidential under applicable Law. + + + +11.02.1.2 "Confidential Information" does not include (i) information now available in the public domain or that in the future enters the public domain through no fault of the receiving Party; (ii) information disclosed to the receiving Party by a third party without violation by such third party of an independent obligation of confidentiality; (iii) information that is independently developed by or for a Party or its Affiliate in the ordinary course of business outside of any of the Transaction Documents; or (iv) information whose disclosure by the receiving Party is consented to in writing by the disclosing Party. + + 11.02.2 Obligation to Keep Confidential. The receiving Party shall: + + + +11.02.2.1 hold, and ensure that its Affiliates and the respective officers, directors, employees, agents, and representatives of the receiving Party and its Affiliates hold, the Confidential Information in strict confidence according to standards the receiving Party utilizes for confidential information of a similar nature; + + + +11.02.2.2 not copy, reproduce, sell, assign, license, market, transfer, or otherwise dispose of, give, or disclose such Confidential Information to unaffiliated third persons or to the respective officers, directors, employees, agents, and representatives of the receiving Party and its Affiliates who have not agreed in writing to be bound by such obligations except as required by Law; + + 11.02.2.3 not use the Confidential Information for any purposes whatsoever other than the performance of the duties and obligations of the receiving Party or its Affiliates, as applicable, under the Transaction Documents; and + + + +11.02.2.4 notify its Affiliates and the respective officers, directors, employees, agents, and representatives of the receiving Party and its Affiliates who may be exposed to such Confidential Information of their obligations to keep such information confidential and not to disclose or use such information except as expressly provided herein. + + 11.02.3 Notice of Disclosure. In the event the receiving Party is requested to disclose all or any part of the Confidential Information under the terms of a valid subpoena or order issued by a court of competent jurisdiction or + + + + + + + + + + + + + + + + - 21 - + + + +other Governmental Entity, the receiving Party shall promptly notify the disclosing Party promptly of such request and shall provide the disclosing Party with reasonable opportunity to obtain and reasonable assistance in obtaining a protective order or similar remedy, provided that no such notice shall be required if such notice is prohibited by Law or if the Governmental Entity requesting such information has requested that the request not be disclosed. + + 11.02.4 Internal Controls, Policies and Procedures. The Parties shall establish and maintain appropriate policies, procedures and internal controls to comply with this Section 11. + + 11.03 Nonpublic Personal Information. + + + +11.03.1 Confidentiality of Nonpublic Personal Information. The Parties each acknowledge they may come into possession of nonpublic personal information regarding "customers" or "consumers" of the other Party, as those terms are defined in Regulation S-P as enacted by the SEC and in other applicable Laws relating to privacy of nonpublic personal information (collectively, "Nonpublic Personal Information."). No Party shall (1) share any Nonpublic Personal Information with any person except as permitted by the privacy notices such Party has provided to its consumers and customers in accordance with applicable Laws; (2) share any Nonpublic Personal Information with any unaffiliated third person regardless of whether such sharing is permitted by such Party's privacy notices; and (3) share any Nonpublic Personal Information with any Affiliate unless such sharing is necessary for performance of that Party's duties and obligations under this Agreement, the Sales and General Agency Agreement, or the Memorandum of Understanding. + + + +11.03.2 Internal Controls, Policies and Procedures. Each Party shall establish and maintain written policies, procedures and internal controls that establish adequate administrative, technical, and physical safeguards for the protection of customer records and information as required by Rule 30 under Regulation S-P or applicable Law. Each Party represents and warrants that its respective policies, procedures and internal controls are reasonably designed to (1) ensure the security and confidentiality of Nonpublic Personal Information, (2) protect against anticipated threats or hazards to the security and integrity of Nonpublic Personal Information, and (3) protect against unauthorized access to or use of Nonpublic Personal Information. + + + +11.04 Duty to Notify; Cooperation. Each Party shall promptly notify the others of the following of which any of them has received notice or has otherwise become aware: (1) any violation of Law by the personnel of such Party that would materially impact on the ability of that Party or its Affiliates, as applicable, to perform their respective duties and obligations under any of the Transaction + + + + + + + + + +SECTION 12 INDEMNIFICATION + + + + + + + + 22 + + + +Documents, as applicable, (2) any violation of Law that relates in any way to the GIE; (3) any complaint or allegation by a GIE Certificate Owner relating in any way to the GIE (each, a "Customer Complaint"); and (4) any examination, investigation, allegation, proceeding, or action by a Governmental Entity, including a court, federal or State securities regulators, State insurance regulators, and State attorney general, related to any of the Transaction Documents provided that no such notice shall be required if such notice is prohibited by Law or if the Governmental Entity requesting such information has requested that the request not be disclosed. + + + +11.04.1 Customer Complaints. The Parties shall cooperate with each other in resolving each Customer Complaint. Any proposed response by a Party to a Customer Complaint shall be sent to the other Parties not less than five (5) Business Days prior to the response being sent to any person, including the Certificate Owner or any Governmental Entity, provided, however, that if a more prompt response is required, the Parties shall send to the other Parties the proposed response as soon as practicable under the circumstances but in no event shall any Party submit such response to another person without providing the other Party with prior written notice of and a copy of the response. + + 11.04.2 Examinations, Investigations and Proceedings. The Parties shall cooperate with each other in connection with any matter described under Section 11.04 as set forth above. + + 12.01 Indemnification by the PHL Parties. + + + +12.01.1 Indemnification. Each of the PHL Parties shall, jointly and severally, indemnify and hold harmless ICC, its Affiliates, and each of their respective officers, directors, employees, representatives, successors and permitted assigns (collectively, the "Investors Capital Indemnitees"), from and against any and all losses, claims, damages, liabilities, judgments, costs and expenses, including reasonable attorney fees and costs of investigation (collectively, "Loss" or "Losses"), to which any Investor Capital Indemnitee may become subject, relating to or arising from any of the following: + + 12.01.1.1 a material breach by any of the PHL Parties, any of their Affiliates, or any their respective officers, directors, employees, agents, representatives, successors or permitted assigns of any provision of any of the Transaction Documents to which they are a party; + + 12.01.1.2 a material violation of applicable Law by any of the PHL Parties, any of their Affiliates, or any their respective officers, + + + + + + + + + + + + + + + + + + - 23 - + + + +directors, employees, agents, representatives, successors or permitted assigns relating to or arising from any of the Transaction Documents to which they are a party; provided, however, that none of the PHL Parties shall owe indemnification for Losses related to a material violation of Law arising out of or based upon reliance by any of the PHL Parties or any of its Affiliates upon information about ICC or any Affiliate thereof provided by ICC in writing to a PHL Party; 12.01.1.3 the GIE, including its issuance and administration and any benefit payments due under the GIE; + + 12.01.1.4 any and all documents relating to or arising from the GIE that are drafted by, or are reviewed and approved by, any of the PHL Parties or any Affiliate thereof, including the Registration Statement, correspondence with Certificate Owners, and filings with Governmental Entities; or + + 12.01.1.5 any claim for infringement of intellectual property rights by an unaffiliated third party in connection with any product that is similar to or resembles all or any part of the GIE. + + + +12.01.2 Limitation. Indemnification pursuant to this Section 12.01 shall be in addition to any liability that any of the PHL Parties may otherwise have. Notwithstanding anything to the contrary set forth in this Section, no Investor Capital Indemnitee shall be entitled to indemnification pursuant to this Section to the extent that (a) Losses are attributable to acts, omissions or conduct of any Investor Capital Indemnitee that constitute willful misconduct, gross negligence, bad faith, or recklessness (other than any of the PHL Parties, any of their Affiliates, or any their respective officers, directors, employees, agents, representatives, successors or permitted assigns acting as an agent or representative of any of the Investors Capital Indemnitees), unless such acts, omissions or conduct were committed at the written direction of any of the PHL Parties Authorized Persons, or (b) such Loss is also a Loss for which the PHL Indemnitees are indemnified pursuant to Section 12.02 of this Agreement. Each Investors Capital Party acknowledges that none of the PHL Parties or their Affiliates shall be deemed to have guaranteed the profitability of the GIE or any volume of sales, and no indemnification shall arise based on an assertion of such a guarantee of profitability of the GIE or volume of sales. + + 12.02 Indemnification by the ICC. + + 12.02.1 Indemnification. ICC shall indemnify and hold harmless each of the PHL Parties, their Affiliates, and each of their respective officers, directors, employees, representatives, successors and permitted assigns + + + + + + + + + + + + + + + + + + - 24 - + + (collectively, the "PHL Indemnitees"), from and against any and all Losses to which any PHL Indemnitee may become subject, relating to or arising from any of the following: + + 12.02.1.1 a material breach by ICC, any of their Affiliates, or any their respective or any of their officers, directors, employees, agents, representatives, successors or permitted assigns, of any provision of the Transaction Documents to which they are a party; + + + +12.02.1.2 a material violation of applicable Law by ICC , any of its Affiliates, or any their respective or any of its officers, directors, employees, agents, representatives, successors or permitted assigns, relating to or arising from the Transaction Documents to which they are a party or ICC; provided, however, that ICC shall not owe indemnification for Losses related to a material violation of Law arising out of or based upon reliance by ICC or any of its Affiliates upon information about any of the PHL Parties or any Affiliate thereof provided by any of the PHL Parties in writing to ICC; + + 12.02.1.3 the administration and management of ICC Accounts; + + 12.02.1.4 any claim by any person or entity related in any way to the development of all or any part of ICC, but excluding claims relating in any way to the development of all or any part of the GIE or Registration Statement; + + + +12.02.1.5 any claim for infringement of intellectual property rights by an unaffiliated third party in connection with any product that is similar to or resembles all or any part of ICC, but excluding any claim relating in any way to the development of all or any part of the GIE or Registration Statement and any claim described in Sections 12.01.1(e) and (f) of this Agreement; or + + + +12.02.1.6 a termination of a Certificate by either PHLVIC or PLIC as a result of a breach of the Memorandum of Understanding by ICAS that is not cured on or before the 5th consecutive Business Day following the date on which either PHLVIC or PLIC delivers notice under the Memorandum of Understanding that PHLVIC or PLIC, as applicable, has determined it cannot hedge changes proposed by ICAS either (i) without incurring material additional risk or additional hedging costs that are material in light of the pricing of the GIE, or (ii) because Phoenix is unable to obtain an appropriate hedge (a determination as to either (i) or (ii), a "Determination"); except a breach shall not be deemed to have occurred if the ICC demonstrates, through binding arbitration pursuant to Section 14.02 of this Agreement, that a Determination was unreasonable, erroneous or not made in good faith. + + + + + + + + + + + + - 25 - + + + +12.02.2 Limitation. Indemnification pursuant to this Section 12.02 shall be in addition to any liability that the ICC may otherwise have. Notwithstanding anything to the contrary set forth in this Section, no PHL Indemnitee shall be entitled to indemnification pursuant to this Section to the extent that (a) Losses are attributable to acts, omissions or conduct of any PHL Indemnitee that constitute willful misconduct, gross negligence, bad faith, or recklessness (other than any of ICC, any of their Affiliates, or any their respective officers, directors, employees, agents, representatives, successors or permitted assigns acting as an agent or representative of any of the PHL Indemnitees), unless such acts, omissions or conduct were committed at the written direction of ICC Authorized Persons, or (b) such Loss is also a Loss for which the Investor Capital Indemnitees are indemnified pursuant to Section 12.01 of this Agreement. Each PHL Party acknowledges that neither ICAS nor any of its Affiliates shall be deemed to have guaranteed the profitability of the GIE or any volume of sales, and no indemnification shall arise in connection with profitability of the GIE or volume of sales. + + + +12.03 Inter-Party Claims. Any Party seeking indemnification pursuant to this Section 12 (the "Indemnified Party") shall notify the other Party or Parties from whom such indemnification is sought (the "Indemnifying Party") of the Indemnified Party's assertion of such claim for indemnification, specifying the basis of such claim. The Indemnified Party shall thereupon give the Indemnifying Party reasonable access to the documents that evidence or support such claim or the act, omission or occurrence giving rise to such claim. + + 12.04 Third Party Claims. + + + +12.04.1 Each Indemnified Party shall promptly notify the Indemnifying Party of the assertion by any third party of any claim with respect to which the indemnification set forth in this Article 12 relates (which shall also constitute the notice required by Section 16.03). The Indemnifying Party shall have the right, upon notice to the Indemnified Party within ten business days after the receipt of any such notice, to undertake the defense of or, with the consent of the Indemnified Party, (which consent shall not unreasonably be withheld), to settle or compromise such claim. The failure of the Indemnifying Party to give such notice and to undertake the defense of or to settle or compromise such a claim shall constitute a waiver of the Indemnifying Party's rights under this Section 12.04.1 and shall preclude the Indemnifying Party from disputing the manner in which the Indemnified Party may conduct the defense of such claim or the reasonableness of any amount paid by the Indemnified Party in satisfaction of such claim. + + + + + +SECTION 13 STATUS OF PARTIES + + + + + + + + - 26 - + + 12.04.2 The election by the Indemnifying Party, pursuant to Section 13.03.1, to undertake the defense of a third-party claim shall not preclude the Party against which such claim has been made also from participating or continuing to participate in such defense, so long as such Party bears its own legal fees and expenses for so doing. + + + +13.01 Independent Contractors. Each of the PHL Parties and their Affiliates, on the one hand, and ICC and its Affiliates, on the other, shall be deemed to be an independent contractor as to the others for all purposes. None of the Transaction Documents shall be construed (1) to create the relationship of employer and employee among the Parties hereto or between any Party and any of the officers, directors, employees, or representatives of any other Party, (2) to create a partnership or joint venture among the Parties hereto, or (3) to authorize any Party to act as a general or special agent of any other, except as may be specifically set forth herein. Except as otherwise expressly set for in this Agreement, no Party shall in any manner be prevented or bound to refrain from engaging in any business or businesses of any kind or nature, or owning or dealing in securities of any entity or making any investments of any kind, or performing services for any other person, firm, or entity. + + 13.02 Authority to Act. Except as otherwise expressly set forth in this Agreement or the Sales and General Agency Agreement, none of the PHL Parties or their Affiliates, on the one hand, and ICC or its Affiliates, on the other, shall have or be deemed to have authority to act on behalf of the others. + + + +13.03 No Third-Party Beneficiaries. This Agreement, the Selling Agreement, and the Memorandum of Understanding are solely among the Parties hereto, as applicable, and are not intended to create any right or legal relationship, express or implied, among the Parties or any of their respective Affiliates, officers, directors, employees, agents, representatives, successors or permitted assigns, on the one hand, and any third party, including any Certificate Owner or other person covered under a GIE, on the other hand; provided, however, that the Investors Capital Indemnitees and the PHL Indemnitees are expressly intended to be third-party beneficiaries under this Agreement. + + + +13.04 ICC Not Underwriter, Insurer or Producer. Notwithstanding anything to the contrary in any Transaction Document, none of the ICC, its Affiliates, or any of their respective directors, officers, employees, agents, or other representatives are or shall be deemed to be (1) underwriters of any security, including the GIE; (2) insurers, guarantors, or underwriters of any obligation of either PHLVIC and PLIC under the GIE, including the obligation of either of PHLVIC or PLIC to pay claims and benefits arising under the GIE, or (3) insurance agents, brokers or producers, except in the case of ICC and certain of its officers, employees, agents, or other representatives, who are licensed as insurance producers as required under applicable State insurance Laws. + + + + + +SECTION 14 DISPUTE RESOLUTION + + + + + + + + + + + + + + - 27 - + + 13.05 PHL Parties not Investment Adviser. Notwithstanding anything to the contrary in any Transaction Document, none of the PHL Parties or any of their respective directors, officers, employees, agents, or other representatives are investment advisers under the Advisers Act or similar State Laws. + + 14.01 Disputes Regarding PHL Services or Investors Capital Services. + + + +14.01.1 Notice; Authorized Persons. During the Term, if any of the PHL Parties, on the one hand, or ICC, on the other, encounters a problem that it believes constitutes a material breach of the other's duty to provide either the PHL Services or the Investor Capital Services, as applicable, the non-breaching Parties shall promptly notify the other Parties in writing, and such breaching Party or Parties shall promptly respond. If the problem is not promptly resolved among the Parties, a PHL Parties Authorized Person and an ICC Authorized Person shall, before the end of the first full Business Day following the date on which initial notice is provided by the non-breaching Parties, consult with each other in good faith concerning the existence, cause and remediation of the possible breach. + + 14.01.1.1 If such Authorized Persons mutually determine that the problem constitutes a material breach, the breaching Party or Parties shall promptly take such actions and make any modifications and/or changes as are required to correct the breach, without charge to the non-breaching Parties. + + 14.01.1.2 If such Authorized Persons cannot mutually determine whether the problem is the result of a material breach, then the dispute shall be resolved in accordance with Section 15.02 below. + + 14.01.2 Indemnification. The non-breaching Party or Parties may seek indemnification for any damages resulting from a breach under this Section pursuant to Section 12 (Indemnification). + + + +14.02 Arbitration. All controversies, claims or disputes among the Parties arising out of or relating to this Agreement, either of the Master Group Annuity Contracts, or breach of any of them, including matters relating to formation, shall be settled by binding arbitration by the American Arbitration Association in accordance with its Commercial Arbitration Rules and Title 9 of the U.S. Code. The place of arbitration shall be Hartford, Connecticut. + + + +14.02.1 The arbitrators shall be disinterested. The number of arbitrators shall be three, one of whom shall be appointed by the PHL Parties and one of whom shall be appointed by ICC, and the third of whom shall be selected by mutual agreement of the first two arbitrators, or by the administering authority if the first two arbitrators do not arrive at a mutual agreement within thirty (30) days of the selection of the second arbitrator. + + + + + + + + + + + + + +SECTION 15 DURATION AND TERMINATION + + + + + + + + - 28 - + + + +14.02.2 A decision of a majority of the arbitrators shall be final and binding and there shall be no appeal therefrom, unless (i) the decision was procured by corruption, fraud or other undue means; (ii) there was evident partiality by the arbitrator appointed as a neutral or corruption in any of the arbitrators or misconduct prejudicing the rights of any Party; or (iii) the arbitrators exceeded their powers. The arbitrators shall issue a written opinion in support of the arbitration award. + + 14.02.3 The arbitrators shall have no authority to award punitive damages or any other damages not measured by the prevailing Party's actual damages, and may not, in any event, make any ruling, finding or award that does not conform to the terms and conditions of the applicable agreement. + + + +14.02.4 Each Party shall be responsible for the costs and expenses incurred by such Party, including attorneys, although the cost of arbitration, including the fees of the arbitrators, shall be borne equally by the PHL Parties, on the one hand, and the ICC, on the other; provided, however, that the panel of arbitrators may determine to award fees and costs, including attorney fees, to the prevailing Party. + + 14.02.5 Any Party may seek injunctive relief from the arbitrators to maintain the status quo until such time as the arbitration award is rendered or the controversy is otherwise resolved. + + 14.02.6 Judgment upon the award rendered by the arbitrators may be entered in the courts specified in Section 16.04 below. + + + +15.01 Duration. Except as to termination of new business pursuant to Section 16.02 of this Agreement, this Agreement shall remain in effect for so long as any Certificate remains in force with respect to which benefit payments thereunder have not commenced; provided, however, that the Parties shall be obligated to fulfill their obligations under the Transaction Documents to which they are a party with respect to any Certificate that remains in force. + + 15.02 Termination and Suspension as to New Business. + + 15.02.1 Termination. This Agreement may be terminated by either the PHL Parties, on the one hand, or ICC, on the other, with respect to Certificates that have not been issued as of the effective date of termination in the following manner: + + 15.02.1.1 By any of the PHL Parties, on the one hand, or ICC, on the other, providing one hundred and twenty (120) days prior written notice to the other Parties. + + + + + + + + + + + + + + + + + + + + + + + + + + + + - 29 - + + 15.02.1.2 By ICC, if any of the PHL Parties or their Affiliates, as applicable, materially breaches any of the Transaction Documents and does not cure such breach within sixty (60) days of being provided written notice of such breach by ICC. + + 15.02.1.3 By any of the ICC, immediately, if: + + 15.02.1.3.1 Any of the PHL Parties is placed in receivership or conservatorship or other proceedings pursuant to which it is substantially prevented from continuing to engage in the lines of business relevant to the subject matter hereof. + + 15.02.1.3.2 Any of the PHL Parties becomes a debtor in bankruptcy, whether voluntary or involuntary, is the subject of an insolvency, rehabilitation, or delinquency proceeding, or is determined to be in hazardous financial condition. + + 15.02.1.3.3 Any of the PHL Parties becomes the subject of a criminal indictment or information or similar proceedings. + + 15.02.1.3.4 Any of the PHL Parties assigns or transfers this Agreement in a manner that does not comply with the provisions of this Agreement. + + 15.02.1.4 By any of the PHL Parties, if any of the ICC or its Affiliate, as applicable, materially breaches any of the Transaction Documents to which they are a party and does not cure such breach within sixty (60) days of being provided written notice of such breach by a PHL Party. + + 15.02.1.5 By any of the PHL Parties, immediately, if: + + 15.02.1.5.1 ICC is placed in receivership or conservatorship or other proceedings pursuant to which it is substantially prevented from continuing to engage in the lines of business relevant to the subject matter hereof. + + 15.02.1.5.2 ICC becomes a debtor in bankruptcy, whether voluntary or involuntary, is the subject of an insolvency, rehabilitation, or delinquency proceeding, or is determined to be in hazardous financial condition. + + 15.02.1.5.3 ICC becomes the subject of a criminal indictment or information or similar proceedings. + + 15.02.1.5.4 ICC assigns or transfers this Agreement in a manner that does not comply with the provisions of this Agreement. + + + + + +SECTION 16 MISCELLANEOUS + + + + + + + + - 30 - + + + +15.02.2 Suspension. Any of the PHL Parties, on the one hand, and ICC, on the other, upon 30 days written notice, may suspend issuance of (1) new Certificates entirely or (2) new Certificates guaranteeing ICC Accounts that invest in one or more Models with certain style attributes or investment vehicles, as may be expressly provided in such written notice, provided, however that the PHL Parties may suspend the issuance of new Certificates affected by a change in any of the Models after the 5 consecutive Business Day following the date on which either PHLVIC or PLIC deliver notice under the Memorandum of Understanding concerning its reasonable determination that it cannot hedge proposed changes without incurring material additional risk and/or material additional hedging costs, or because Phoenix is unable to obtain a reasonably appropriate hedge, if ICAS has made the proposed changes and not cured such changes within such five-day period. + + 16.01 Assignment or Change of Control. + + + +16.01.1 Assignment. This Agreement shall be binding on and shall inure to the benefit of the respective successors and assigns of the Parties except as otherwise provided in this Agreement. No Party shall assign this Agreement or any rights or obligations hereunder or, except as expressly set forth in the Agreement with respect to the PHL Services and Investors Capital Services, delegate any of their respective duties and obligations hereunder, without the prior written consent of the other Parties, which, in view of the unique and specialized nature of each Party's obligations hereunder, may be declined by any Investors Capital Party on the one hand or any PHL Party, on the other hand, as the case may be, for any reason. Any attempted assignment or delegation in violation of this Section shall be void. A Change of Control, as defined below, shall be considered an assignment under this Section 16.01 and Sections 16.02.1(c) (4) and 16.02.1(e)(4). + + 16.01.2 Change of Control. A "Change of Control" means: + + + +(a) the acquisition by any person, entity or group, including a "group" required to file a Schedule 13D or Schedule 14D-1 under the 1934 Act (excluding, for this purpose, a Party, its Affiliates and any employee benefit plan of a Party or its Affiliates that acquires ownership of voting securities of an Affiliate of that Party) of beneficial ownership (within the meaning of Rule 13d-3 under the 1934 Act) of 50% or more of either the (1) then outstanding ordinary shares of a Party, of a person or entity controlling such Party, or of a person or entity controlling such person or entity, up to and including the ultimate controlling person (such Party and persons or entities collectively, the "Control Group"), or (2) the + +th + + + + + + + + + + + + + +in each case excluding a reorganization, merger, consolidation, sale, transfer, lease or other disposition when the transaction is among Parties that are under common control both before and after such transaction. + + - 31 - + + combined voting power of the Control Group's then outstanding voting securities entitled to vote generally in the election of directors, in each case excluding an acquisition when the transaction is among Parties that are under common control both before and after such transaction; + + + +(b) the election or appointment to the board of directors of any member of the Control Group, or resignation of or removal from such board of directors with the result that the individuals who as of the date hereof constituted the board of directors (the "Incumbent Board") of each member of the Control Group no longer constitute at least a majority of such board of directors, provided that any person who becomes a director subsequent to the date hereof whose appointment, election, or nomination for election by the shareholders of each member of the Control Group, was approved by a vote of at least a majority of the Incumbent Board (other than an appointment, election or nomination of an individual whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of the directors of a member of the Control Group) shall be, for purposes of this Agreement, considered as though such person were a member of the Incumbent Board; or + + (c) the approval by the shareholders of any member of the Control Group of: + + + +(1) a reorganization, merger or consolidation by reason of which the persons who were the shareholders of such member of the Control Group immediately prior to such reorganization, merger or consolidation do not, immediately thereafter, own more than 50% of the combined voting power of the reorganized, merged or consolidated company's then outstanding voting securities entitled to vote generally in the election of directors, or + + (2) a liquidation or dissolution of such member of the Control Group or the sale, transfer, lease or other disposition of all or substantially all of the assets of such person (whether such assets are held directly or indirectly), + + 16.02 Rights, Remedies, Etc. are Cumulative. The rights, remedies, and obligations contained in this Agreement are cumulative and are in addition to any and all rights, remedies, and obligations, at law or in equity, which the Parties may be entitled to under State and federal laws. + + + + + +If to the PHL Parties Kathleen A. McGah Vice President Life and Annuity Counsel Phoenix Life Insurance Company One American Row PO Box 5056 Hartford, CT 06102-5056 With a simultaneous copy that shall not constitute notice under this section to: General Counsel Phoenix Life Insurance Company One American Row PO Box 5056 Hartford, CT 06102-5056 If to ICC: General Counsel Investors Capital Corporation 230 Broadway East Lynnfield, MA 01940 + + - 32 - + + + +16.03 Notices. Except as set for in this paragraph, all notices hereunder shall be made in writing and shall be effective upon delivery, which shall be made (1) by hand delivery, (2) by registered or certified United States mail, postage prepaid with return receipt requested, (3) by a nationally-recognized overnight courier service, to the addresses set forth below, or to such other address as any Party may request by giving written notice to the other Parties. A Party may also provide notice by electronic means (such as email or facsimile) or telephone in cases when immediate notice is required so long as the Party giving notice delivers separate written notice to be with 24 hours pursuant to Sections 16.03(1) or 16.03 (3). + + + +16.04 Governing Law. This Agreement shall be construed and its provisions interpreted under and in accordance with the internal Laws of the State of Connecticut, without giving effect to principles of conflict or choice of laws of that or any other jurisdiction. Each of the Parties hereto shall submit to the jurisdiction of the courts of the State of Connecticut and the federal courts in Connecticut. + + + + + + + + + + + + + + + + + + - 33 - + + 16.05 Amendments. No change may be made to the terms or provisions of this Agreement except by written agreement signed by the Parties. + + 16.06 Severability. If any provision of this Agreement is held invalid, illegal, unenforceable, or in conflict with the Law of any jurisdiction, such provision shall be enforced to the extent permitted under applicable Law, and the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. + + 16.07 Waiver. The failure by any Party to insist upon strict compliance with any condition of this Agreement shall not be construed as a waiver of such condition. Waiver by one Party to this Agreement of any obligation of another Party to this Agreement does not constitute a waiver of any further or other obligation of such Party. + + + +16.08 Interpretation. This Agreement shall be governed by the following rules of interpretation: (a) when a reference is made in this Agreement to an Article, Section, or Exhibit, such reference shall be to an Article of, a Section of, or Exhibit to, this Agreement unless otherwise indicated; (b) the headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement; (c) whenever the words "include," "includes" or "including" are used in this Agreement, they shall be deemed to be followed by the words "without limitation;" (d) whenever the singular is used herein, the same shall include the plural, and whenever the plural is used herein, the same shall include the singular, where appropriate; and (e) references to currency or amounts due shall mean United States dollars. + + 16.09 Construction. The Parties hereto have participated, directly or indirectly, in the negotiations and preparation of this Agreement. In no event shall this Agreement be construed more or less stringently against any Party by reason of another Party being construed as the principal drafting Party hereto. + + 16.10 Survival. The following Sections shall survive termination of this Agreement: Sections7.05, 7.06, 8.06, 8.07, 9 (including Exhibit C), 10, 11.02, 11.03, 12, 13, 14.02, 16. + + + +16.11 Entire Agreement. This Agreement, the other Transaction Documents and the Indemnification Agreement between the Parties, effective as of the Effective Date (the "Indemnification Agreement"), constitute the entire agreement between the Parties hereto with respect to the subject matter hereof and thereof, and supersede any and all prior oral or written understandings, agreements or negotiations, between or among the Parties with respect to the subject matter hereof and thereof. No prior writings by or among the Parties with respect to the subject matter hereof and thereof may be used by any Party in connection with the interpretation of any provision of this Agreement, the Indemnification Agreement, or the other Transaction Documents. + + + + + +IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed and delivered by their duly authorized partners and officers, all as of the Effective Date. + + + + - 34 - + + 16.12 Counterparts. This Agreement may be executed in two or more counterparts, each of which taken together shall constitute one and the same instrument. + +PHL VARIABLE INSURANCE COMPANY PHOENIX EQUITY PLANNING CORPORATION + +BY: /S/ KATHLEEN A. MCGAH BY: /S/ KATHLEEN A. MCGAH NAME: KATHLEEN A. MCGAH NAME: KATHLEEN A. MCGAH TITLE: VICE PRESIDENT TITLE: VICE PRESIDENT + +PHOENIX LIFE INSURANCE COMPANY INVESTORS CAPITAL CORPORATION + +BY: /S/ JOHN V. LAGRASSE BY: /S/ THEODORE E. CHARLES NAME: JOHN V. LAGRASSE NAME: THEODORE E. CHARLES TITLE: EXECUTIVE VICE PRESIDENT TITLE: DIRECTOR + + + + + +EXHIBIT A TO THE STRATEGIC ALLIANCE AGREEMENT + +PHL VARIABLE SERVICES + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + +- 35 - + +A. PHL Variable shall, or shall cause one or more of its Affiliates to, provide all services necessary or desirable to fully administer the GIE, including, but not limited to: + + 1. Notifying ICC of any change to the GIE Fee rate at least ten calendar days prior to the effective date of the fee change via E-mail; + + 2. Calculating the GIE Fee for each Certificate and send the inception and quarterly fee information to ICC; + + 3. Calculating the Retirement Income Base for each Certificate; + + 4. Calculating the Retirement Income Amount for each Certificate; + + 5. Calculating the Required Minimum Distribution for each IRA account, as applicable, but not including tax reporting to the IRS; + + 6. Providing telephone support to ICC to enable ICC to answer Certificate Owners' questions about their GIE benefit, including Retirement Income Base; Retirement Income Amount, and the GIE Fee on Business Days during the regular business hours of PHL Variable; + + 7. Drafting and sending the following documents/correspondence to Certificate Owners: + + a. Welcome Letter and Certificate; + + b. GIE Retirement Income Base /Retirement Income Amount Adjustment Notice or similar notice, due to a withdrawal, contribution or reaching retirement income date; + + c. GIE Fee Deduction Notice or similar notice, sent quarterly to confirm the GIE Fee deduction; + + d. January 1 Letter, with the new Retirement Income Amount for the year; e. GIE Termination Notice or similar notice; and + + 8. Correspondence after the account value reaches zero; + + 9. Sending ICC a report showing any investments in an ICC Account that are not invested in accordance with the ICC models, as necessary; + + 10. Providing ICC with a quarterly data file containing Certificate Owner data, if requested in writing by ICC in order for ICAS to reconcile data maintained by PHL Variable vs. ICAS. ICC shall notify PHL Variable of any discrepancies identified; + + 11. Notifying ICAS, thirty [30] calendar days in advance of the anniversary date for each Certificate, of fee information relating to the Annual Optional Increase; Correcting Certificate Owner file data upon notification of an incorrect Certificate termination by ICC using current account values; and + + 12. Working with ICC on manual corrections. + +B. All information provided shall be in form and content mutually acceptable to the Parties + +st + + + + + +EXHIBIT B TO THE STRATEGIC ALLIANCE AGREEMENT + +INVESTORS CAPITAL SERVICES + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + +- 36 - + +A. ICCS shall, or shall cause one or more of its Affiliates, to: + + 1. Notify PHL Variable if a Certificate Owner has changed to a non-GIE eligible investment model and has thereby terminated the GIE; + + 2. Notify PHL Variable of the amount of non-cash assets transferred into an ICC Account that are in non-conformance to the model asset allocation in the daily transmission; + + 3. Notify PHL Variable of or errors and corrections relating to a Certificate Owner's additional contributions and withdrawals; 4. For new Certificates, send ICC Account assets and values electronically to PHL Variable on the certificate effective date; + + 5. If ICAS becomes aware of any material pricing errors, notify PHL Variable of such errors; + + 6. On each Business Day, send PHL Variable ICC Account assets, values, and selected transactions electronically; + + 7. ICAS shall provide PHL Variable with a quarterly data file containing Certificate Owner data, if requested in writing by PHL Variable in order for PHL Variable to reconcile data maintained by PHL Variable. PHL Variable shall notify ICAS of any discrepancies identified; + + 8. Work with PHL Variable on manual corrections; and + + 9. Debit the GIE Fee at inception and quarterly, in advance, and remit the fee to PHL Variable. + + 10. Notify PHL Variable if a Certificate Owner has terminated the GIE; + + 11. Notify PHL Variable of the divorce of Certificate Owners promptly after such notification is received by ICC or ICAS; + + 12. Send PHL Variable a copy of Certificate Owners' divorce decrees promptly after such decrees are received by ICC or ICAS; 13. Notify PHL Variable of the death of a Certificate Owner promptly after such notification is received by ICC or ICAS; + + 14. Send PHL Variable a copy of the deceased Certificate Owner's death certificate promptly after the death certificate is received by ICC or ICAS; + + 15. Verify that each Application is completed; + + 16. Send the completed Application to PHL Variable; and + + 17. Notify PHL Variable if ICC becomes aware of an erroneous termination of a GIE. + +B. All information provided shall be in form and content mutually acceptable to the Parties + + + + + +EXHIBIT C + +TRADEMARK LICENSE TERMS + +The following terms and conditions apply to each License of Trademarks pursuant to Section 9.02 of the Agreement. + + + + + + + + + + + + - 37 - + +1. LIMITED LICENSE: Nothing in the Agreement or this Exhibit shall be construed to grant Licensee any rights or license to any trademark, trade name, certification mark, service mark, domain name, product name, logo, patent, technical information, or copyright of Licensor other than as specified herein. All rights not specifically granted to Licensee are reserved to Licensor. + + + +a) Use: Licensor reserves the right as owner of the Trademarks to specify all aspects of use of the Trademarks, including but not limited to, the manner, place, type, form, layout, design, channels of trade, channels of distribution, and media of or for such use, on or in connection with, all displays, advertising, labels, literature, Internet sites, sales promotion materials, and all other forms of use of the Trademarks. All use of the licensed Trademarks shall inure to the benefit of Licensor. Licensee shall comply with any specific trademark use rules as may be referenced in any of the Exhibits, or provided to Licensee, which may be amended or revised by Licensor from time to time, upon written notice. + + + +b) Acknowledgment: Licensee hereby acknowledges the validity of Licensor's Trademarks and Licensor's exclusive right, title and interest in and to the Trademarks. As requested by Licensor, Licensee shall employ identifying symbols and/or words in connection with its use of the Trademarks. Licensee shall cooperate with Licensor in taking all appropriate measures for the protection of the Trademarks, and shall faithfully observe and execute the requirements, procedures, and directions of Licensor with respect to the use and protection of the Trademarks. Licensee shall not, during the term of this Agreement, or thereafter: + + (1) do or permit to be done any act or thing which prejudices, infringes or impairs the rights of Licensor with respect to the Trademarks; + + (2) represent that it has any right, title, or interest in or to the Trademarks, other than the limited license granted hereunder, or in any registration therefore; + + (3) use, register or attempt to register any trademarks, trade names, logos, domain names, metatags, meta descriptors, or electronic mail (e-mail) addresses, server names, search-engine markers, that are identical to, or confusingly similar to the Trademarks or any other trademarks, trade names or domain names of Licensor or any of its subsidiaries or affiliated companies; + + + + + + + + + + + + + + + + + + - 38 - + + (4) do anything or produce any goods in connection with the Trademarks that damages or reflects adversely upon Licensor, its subsidiaries or affiliated companies or any of their trademarks, trade names or domain names; and + + (5) continue any use or action in relation to or in connection with the Trademarks or this Agreement if objected to by Licensor. + + c) Goodwill: Licensee recognizes the value of the reputation and goodwill associated with the Trademarks, acknowledges that the Trademarks have acquired secondary meaning, and that all related rights and goodwill belong exclusively to Licensor. + + d) Art Work: All art and design or lay-out work that contains, is derived from or used with the Trademarks, shall be solely owned by Licensor. Licensee shall not obtain, attempt to obtain or claim any copyright or trademark rights therein, and upon request, Licensee shall assign same to Licensor. + + + +e) Infringement Action: Licensor shall have the sole right to determine the appropriate action to be taken against any infringement, imitation, or unauthorized use of the Trademarks including having the sole discretion to settle any claims or any controversy arising out of any such claims. Licensee shall provide Licensor with such reasonable assistance as Licensor may require in obtaining any protection of Licensor's rights to the Trademarks at no expense to Licensor. Licensee shall not have any rights or claim against Licensor for damages or otherwise arising from any determination by Licensor to act or not to act with respect to any alleged infringement, imitation or unauthorized use by others, and any such determination by Licensor shall not affect the validity or enforceability of this Agreement. Any and all damages and settlements recovered arising from any action or proceeding shall belong solely and exclusively to Licensor. + + f) Assignment to LICENSOR: Upon request, Licensee shall transfer to Licensor any rights which accrue to Licensee arising from its use of the Trademarks or this Agreement. + +2. QUALITY STANDARDS, INSPECTION, AND TESTING: So that the value of the goodwill and reputation associated with the Trademarks will not be diminished, Licensee shall have an obligation to ensure that all materials on which the Trademarks are used shall be of at least the same uniform high quality (i) as may be approved by Licensor hereunder; or (ii) as specified in quality standards provided by Licensor hereunder, as the case may be. To monitor for Licensee's adherence to such obligations, Licensor shall have the right to inspect such materials from time to time through duly authorized representatives. Materials not meeting the quality or other requirements set forth in this Agreement shall not be in any way promoted in connection with the Trademarks, and all references to the Trademarks on labels, product literature, promotional material, etc., shall be removed at Licensee's expense. + + + + + +" ® is a registered Trademark of [Licensor] and is used under license to [Licensee]." + + + + + + - 39 - + +3. LICENSING NOTICE: Licensee shall include a notice on all labeling, advertising, literature, Internet sites, and sales promotional materials that the Trademarks are licensed from Licensor. The notice shall be as follows or as otherwise specified by Licensor: + +4. NO CONSEQUENTIAL DAMAGES, ETC.: IN NO EVENT SHALL ANY PARTY BE LIABLE FOR ANY SPECIAL, INDIRECT, INCIDENTAL, PUNITIVE, CONSEQUENTIAL, OR ANY SIMILAR DAMAGES WHETHER OR NOT CAUSED BY OR RESULTING FROM THE NEGLIGENCE OF SUCH PARTY EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, IN RELATION TO, ARISING OUT OF OR IN CONNECTION WITH THIS EXHIBIT OR THE TRADEMARKS. + +5. SUPPLEMENTAL PROVISIONS: If any supplemental provisions are made a part of the Agreement or this Exhibit, they are set forth in Annex A to this Exhibit. + +6. SURVIVAL: Notwithstanding termination of the Agreement, Sections 1(a)-1(f) and 4-6 of this Exhibit shall survive termination of the Agreement. \ No newline at end of file diff --git a/full_contract_txt/PHREESIA,INC_05_28_2019-EX-10.18-STRATEGIC ALLIANCE AGREEMENT.txt b/full_contract_txt/PHREESIA,INC_05_28_2019-EX-10.18-STRATEGIC ALLIANCE AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..ebf52bbc4a0de3d804481e92397e7d462350ee4c --- /dev/null +++ b/full_contract_txt/PHREESIA,INC_05_28_2019-EX-10.18-STRATEGIC ALLIANCE AGREEMENT.txt @@ -0,0 +1,915 @@ +Exhibit 10.18 + +CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY [***], HAS BEEN OMITTED BECAUSE IT IS NOT MATERIAL AND WOULD LIKELY CAUSE COMPETITIVE HARM TO THE COMPANY IF PUBLICLY DISCLOSED. + +STRATEGIC ALLIANCE AGREEMENT + +This Strategic Alliance Agreement (this "Agreement"), effective as of December 10, 2015 (the "Effective Date"), is by and between Allscripts Healthcare, LLC, a North Carolina limited liability company ("Allscripts") on behalf of itself and its Affiliates and Phreesia, Inc., a Delaware corporation (the "Company" or "Phreesia"). Allscripts and the Company are sometimes referred to herein as a "Party" and collectively as the "Parties". + +RECITALS + +WHEREAS, Allscripts is a leading provider of clinical and revenue cycle software, connectivity and information solutions for physicians, including its practice management solutions; + +WHEREAS, the Company provides Merchant Processing Services, Eligibility and Benefit Services, and Patient Intake Management Offerings within the healthcare industry; + +WHEREAS, the Company has developed, licenses, and makes available (as applicable) certain software and services described herein; and + +WHEREAS, Allscripts desires to obtain the right to market, sublicense, and make available such software and services and cause the Company to provide such software and services, either to Allscripts or to third parties, on the terms and conditions set forth in this Agreement. + +AGREEMENT + +NOW, THEREFORE, for good and valuable consideration, and in consideration of the mutual covenants and conditions herein contained, the Parties agree as follows: + +1. Definitions. For purposes of this Agreement, the following terms have the meanings ascribed thereto in this Section 1: + +"Affiliate" means, with respect to a Person, any other Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such Person. For purposes of this definition, the term "control" (including the terms "controlled by" and "under common control with") means the direct or indirect power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract, or otherwise. Allscripts' Affiliates may exercise Allscripts' rights and fulfill its related obligations under this Agreement, provided that Allscripts shall be responsible for any breach of such obligations by its Affiliates to the same extent as if Allscripts was the breaching party. + +"Allscripts Customer" means a customer that has contracted for or receiving any of Allscripts' products or services. + +"Allscripts Practice Management" means the practice management system currently marketed and sold by Allscripts as "Allscripts Practice Management" (as the same may be renamed, enhanced or expanded from time to time) + +"Bank Rules" means the Bank Card Merchant Rules and Regulations provided to Sublicensed Customer in writing, as amended from time to time, which are incorporated into this Agreement by reference. 1 + + + + + +"Change of Control" means any of the following: (a) any merger, reorganization, share exchange, consolidation, or other business combination involving the Company and its subsidiaries, other than (i) any acquisition or other similar transaction in which the Company acquires the assets or the securities of another Person and the Company does not issue capital stock of the Company representing more than fifty percent (50%) of the issued and outstanding shares of any class of capital stock of the Company, or (ii) any merger or similar transaction effected solely to change the domicile of the Company or any of its subsidiaries; (b) any acquisition by any Person as a result of which such Person (or any group of which such Person is a member) becomes a beneficial owner of more than fifty percent (50%) of the issued and outstanding shares of any class of capital stock of the Company in any single transaction or a series of related transactions; (c) any sale, lease, exchange, mortgage, pledge, transfer, or other disposition of all or substantially all of the assets of the Company and its subsidiaries in any single transaction or a series of related transactions; or (d) any exclusive license of all or substantially all of the intellectual property of the Company and its subsidiaries, in any single transaction or a series of related transactions. For purposes of this definition, the term "beneficial owner" has the meaning ascribed to such term in Rules 13d-3 and 13d-5 under the U.S. Securities Exchange Act of 1934, as amended, and the term "group" means two (2) or more Persons acting as a partnership, limited partnership, syndicate, or other group for the purpose of acquiring, holding, or disposing of the applicable securities referred to herein. + +"Claim" means any claim, action, suit, proceeding, damages, costs, expenses and other liabilities, including reasonable attorneys' fees and court costs. + +"Clinician" means each healthcare professional contracted under a customer's license or service agreement and any healthcare professional not contracted under a customer's license or service agreement for which such customer subsequently pays a clinician fee. Healthcare professionals are only Clinicians (1) during the periods in which they are contracted under a license or service agreement or (2) for healthcare professionals not contracted under a customer's license or service agreement, solely during the periods for which a Customer pays a clinician fee for such healthcare professional. For avoidance of doubt, authorized end users of the Subscription Software Services are both Clinicians and their administrative and other front and back office personnel. For the further avoidance of doubt, there will be no further license fees applicable to the administrative or other front and back office personnel. + +"Company Acquiror" means any Person that acquires the Company in connection with a Change of Control (including, without limitation, a Competing Provider) and includes each Affiliate of such Person that is not controlled by the Company. For purposes of this definition, the term "controlled by" means the Company has the direct or indirect power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract, or otherwise. + +"Competing Provider" means any electronic health record, revenue cycle management, or health information exchange information technology vendor whose products or services are directly competitive with a material portion of Allscripts business. + +"Confidential Information" means non-public information of a Disclosing Party, [***]. + +"Controlled Technology" means any software, documentation, technology, or other technical data, or any products that include or use any of the foregoing, of which the export, re-export, or release to certain jurisdictions or countries is prohibited or requires an export license or other governmental approval under any Law, including the U.S. Export Administration Act and its associated regulations. + +"Customer Agreement" means a written agreement between Allscripts (or an Allscripts Reseller or Partnering Organization as permitted herein) and an Allscripts Customer pursuant to which Allscripts resells any Installed Software or any Subscription Software Services or orders Merchant Processing Services from Company on behalf of an Allscripts Customer in accordance with this Agreement. 2 + + + + + +"Data" means all data, information, and other content (regardless of whether de-identified) of any type and in any format, medium, or form, whether audio, visual, digital, screen, GUI, or other, that is input, submitted, uploaded to, placed into or collected, stored, processed, generated, or output by any device, system, or network by or on behalf of Allscripts (or any of its licensors or Affiliates) or any Sublicensed Customer through the Subscription Software Services, including any and all data, analyses, and other information and materials resulting from any use of the Subscription Software Services by or on behalf of Allscripts (or any of its licensors or Affiliates) or a Sublicensed Customer under this Agreement. + +"Developer Agreement" means the Allscripts Developer Program Agreement previously entered into between Company and Allscripts with an effective date of July 1, 2014. + +"Documentation" means all user manuals, operating manuals, technical manuals, and any other instructions, specifications, documents, or materials, in any form or media, that describe the functionality, installation, testing, operation, use, maintenance, support, technical specifications, or components, features, or requirements of any of the Installed Software or any of the Subscription Software Services or Merchant Processing Services, together with all revisions to such documentation delivered by or on behalf of the Company and as updated from time to time by the Company. + +"E&B Transaction" means an Electronic Data Interchange (EDI) Health Care Eligibility/Benefit Inquiry ("270 transaction") and the retrieval of an EDI Health Care Eligibility/Benefit Response ("271 transaction"), with a single E&B Transaction consisting of both the 270 transaction and the 271 transaction. [***]. + +"Eligibility and Benefit Services" means the Company's subscription-based software services that submits Electronic Data Interchange (EDI) Health Care Eligibility/Benefit Inquiries ("270 transactions") and the retrieval of the EDI Health Care Eligibility/Benefit Response ("271 transactions") to inquire about the health care eligibility and benefits associated for patients through POS Dashboard or the Eligibility UI and the Eligibility Interface. The Eligibility and Benefit Services, the Eligibility UI and the Eligibility Interface are further described on Exhibit A attached hereto. + +"Error" means [***]. + +"Harmful Code" means (a) any virus, Trojan horse, worm, backdoor, or other software or hardware devices, the effect of which is to permit unauthorized access to, or to disable, erase, or otherwise harm, any computer, systems, or software; or (b) any time bomb, drop dead device, or other software or hardware device designed to disable a computer program automatically with the passage of time or under the positive control of any Person, or otherwise prevent, restrict, or impede Allscripts' or any Sublicensed Customer's use of such software or device. + +"HITECH" means the Health Information Technology for Economic and Clinical Health Act of 2009, as amended. + +"Implementation Services" means services related to the initial delivery, configuration, and pre-acceptance usage of the Subscription Software Services or Merchant Processing Services described in Exhibit C. 3 + + + + + +"Installed Software" means the Company's Integration Client configured to interoperate only with Allscripts products that is installed on a Sublicensed Customer's computer systems, and including all enhancements and other Updates thereto and all copies of the foregoing permitted hereunder. + +"Intellectual Property" means [***]. + +"Law" means any applicable statute, law, ordinance, regulation, rule, code, order, constitution, treaty, common law, judgment, decree, or other requirement or rule of any federal, state, local, or foreign government or political subdivision thereof, or any arbitrator, court, or tribunal of competent jurisdiction. + +"Legacy Customers" means those Company customers listed on Exhibit H. + +"Loss" means all losses, damages, liabilities, deficiencies, judgments, settlements, interest, awards, penalties, fines, costs, or expenses of whatever kind, including reasonable attorneys' fees, the costs of enforcing any right to indemnification hereunder, and the cost of pursuing any insurance providers. + +"Marks" means, with respect to a Party, such Party's trade names, trade dress, trademarks, service marks, logos, brand names and other identifiers, corporate names, meta-tags, and universal resource locators, and any applications, registrations, and renewals thereof. + +"Member Bank" shall mean a member of VISA, MasterCard and/or any other networks, as applicable, that provides sponsorship services in connection with this Agreement. As of the Effective Date, the Member Bank shall be Fifth Third Bank, an Ohio banking corporation. + +"Merchant Agreement" means the Merchant Services Agreement the form of which is attached hereto as Exhibit J to be entered into between Company and each Sublicensed Customer that purchases any Merchant Processing Services (except in connection with a sale of PIMS directly or indirectly by Company). Company may update the Merchant Agreement from time-to-time to incorporate such future revisions as required or requested by the Member Bank provided that Company also makes those revisions to agreements with Company's other merchant processing services customers; and further provided that the Merchant Agreement's terms and conditions shall not be less favorable than those that the Company typically offers to customers similar to the proposed Sublicensed Customers. + +"Merchant Application" means the merchant application the form of which is attached hereto as Exhibit K, that must be completed by a proposed Sublicensed Customer that intends to purchase any Merchant Processing Services and which is accepted by Company prior to Sublicensed Customer product activation. Company may update the Merchant Application from time-to-time to incorporate such future revisions as required or requested by the Member Bank , provided that Company also makes those revisions to merchant applications with Company's other merchant processing services customers; and further provided that the Merchant Application's terms and conditions shall not be less favorable than those that the Company typically offers to customers similar to the proposed Sublicensed Customers. + +"Merchant Processing Services" means the Company's services that authorize and settle payment transactions directly or indirectly through Member Banks for customers through (1) the POS Dashboard; (2) the default Phreesia Gateway card processing platform for any of Allscripts other embedded payment products; (3) a Third Party Gateway for transactions received from or posted to an Allscripts service or product for customers who want to use a separate financial institution for back-end processing; and (4) Phreesia Patient Intake Management Offering. The Merchant Processing Services are subject to the terms and conditions of the Merchant Agreement, the Operating Regulations and applicable Law. The Merchant Processing Services are further described on Exhibit A attached hereto. Merchant Processing Services may be provided by Company in conjunction with the Subscription Software Services but are not, for purposes of this Agreement, deemed Subscription Software Services. 4 + + + + + +"Merchant Processing Services Customer" means an Allscripts Customer excluding Legacy Customers that contracts with the Company for and receives the Company's Merchant Processing Services. For the sake of clarity, a Merchant Processing Services Customer (i) may also be a Sublicensed Customer or (ii) may purchase Merchant Processing Services in connection with its purchase of PIMS from the Company. + +"Open Source License" means an open source license applicable to Open Source Software. + +"Open Source Software" means any open source software program, or portion thereof, that is licensed under an Open Source License that requires as a condition of use, modification, and/or distribution of the software subject to the license, that such software or other software combined and/or distributed with such software be (i) disclosed or distributed in source code form; (ii) licensed for the purpose of making derivative works; or (iii) redistributable at no charge (including the GNU General Public License (GPL), GNU Lesser General Public License (LGPL), Mozilla Public License (MPL), BSD licenses, the Artistic License, the Netscape Public License, the Sun Community Source License (SCSL), the Sun Industry Standards License (SISL), and the Apache License). + +"Operating Regulations" means the by-laws, operating regulations and/or all other rules (including, without limitation, Bank Rules), guidelines, policies and procedures of VISA, MasterCard, Discover, and/or Other Networks, and all other applicable rules, regulations and requirements of Member Bank, banks, and financial institutions which govern or affect any Merchant Processing Services provided under a Merchant Processing Agreement, and all state and federal laws, rules and regulations which govern or otherwise affect the activities of providers of Merchant Processing Services, including, but not limited to, those of the National Automated Clearing House Association ("NACHA") and the Federal Trade Commission ("FTC"), as any or all of the foregoing may be amended and in effect from time to time. + +"Partnering Organization" means a hospital, health plan, provider group, provider-hospital organization, independent practice association (IPA), accountable care organization (ACO), health information organization (HIO), Comprehensive Primary Care Initiative group (CPC), billing service provider, or integrated healthcare delivery system that provides management services and administrative systems. + +"Payerpath" means Allscript's patient payment and claims solution currently marketed and sold by Allscripts as "Payerpath" (as the same may be renamed, enhanced or expanded from time to time). + +"Person" means any natural person, corporation, limited liability company, general partnership, limited partnership, trust, proprietorship, joint venture, business organization, or government, political subdivision, agency, or instrumentality. + +"Phreesia Patient Intake Management Offering" or "PIMS" means Phreesia's offering with and only with those features and functions as are generally available to Allscripts Customers on the Effective Date. PIMS features are summarized on Exhibit A, but that summary is qualified in its entirety by reference to PIMS' actual features that are generally available to Allscripts Customers on the Effective Date. [***]. + +"POS Dashboard" means the Company's web portal Point of Service (POS) Dashboard that may be used to process credit and debit card payment transactions (as the same may be renamed, enhanced or expanded from time to time). The POS Dashboard is further described on Exhibit A attached hereto. 5 + + + + + +"Purchase Order" means a purchase order or other ordering document signed and issued by Allscripts to order Subscriptions to be resold and distributed or made available to a Sublicensed Customer, which specifies, at a minimum, (a) the date the applicable Customer Agreement was executed; (b) the name and address of the Sublicensed Customer; and (c) the Installed Software and Subscription Software Services licenses, Merchant Processing Services and Services being ordered, and further establishes that the Installed Software and Subscription Software Services (and associated Documentation) are governed by the Customer Agreement. + +"Representatives" means a Party's Affiliates, and each of their respective employees, officers, directors, partners, shareholders, agents, attorneys, and third-party advisors. + +"Services" means, collectively, the Implementation Services as described in Exhibit C and the Support Services as described in Section 12.1(b). + +"Sublicensed Customer" means an Allscripts Customer that has purchased a Subscription from Allscripts or its Affiliates or that has entered into a Merchant Agreement with Company (except in connection with a sale of PIMS directly or indirectly by Company). + +"Subscription" or "subscription" shall mean the right of a Sublicensed Customer to access and use the Subscription Software Services as more fully set forth in this Agreement. + +"Subscription Software Services" means the Company's subscription-based software services consisting of the Eligibility and Benefit Services and/or POS Dashboard (as each may be renamed, enhanced or expanded from time to time), including any Updates thereto. Subscription Software Services contains functions and features that enable Sublicensed Customers to authorize and settle payment transactions directly or indirectly through Member Banks, but in order for such functions and features to be operational, Sublicensed Customers must obtain Merchant Processing Services from Phreesia or similar services from a third party through Phreesia's Third Party Gateway. Notwithstanding anything to the contrary herein, Subscription Software Services do not include other Company products or services including, without limitation, the Phreesia Patient Intake Management Offering. + +"Territory" means [***]. + +"Update" means any revision, modification, upgrade, or new feature, functionality, module, or release of the Installed Software, Subscription Software Services or Merchant Processing Services, and any patch, bug fix, workaround, or Error correction to the Installed Software or Subscription Software Services (whether created specifically for Allscripts or released by the Company), that Company is required to provide under this Agreement or that Company generally makes available at no additional charge to the Company's other eligibility and benefit services and point of service dashboard customers and licensees. Updates may be customer facing (i.e. updates that are directly displayed to the customer such as new features, etc.) or non- customer facing (such as bug fixes or workarounds that are not directly displayed to the customer). + +2. Appointment as Reseller. + +2.1 Appointment. The Company hereby [***]. Allscripts may also disclose Company's pricing information relating to its Merchant Processing Services and facilitate procurement of Merchant Processing Services on behalf of Sublicensed Customers, including, without limitation by references to such pricing information and Merchant Processing Services in Customer Agreements. 6 + + + + + +2.2 Customer Agreements. + +(a) Subscriptions. Allscripts and its Affiliates may sell Subscriptions for terms no less than one year and no greater than four (4) years on a subscription basis to Persons who subsequently execute a Customer Agreement, provided that Allscripts may enter into Customer Agreements with terms longer than four (4) years with large organizations, provided that Phreesia consents in each instance in writing in advance, which consent will not be unreasonably withheld. + +(b) Customer Agreements. Each Customer Agreement will contain terms, in all material respects, no less protective of the Company and its licensors than the applicable terms and conditions related to Allscripts' applicable products and services. Each Customer Agreement shall, at a minimum, restrict Customers from redistributing, reverse engineering, reverse compiling, or disassembling the Installed Software and the Subscription Software Services. Allscripts will use commercially reasonable efforts to enforce the terms of its Customer Agreement that protect Company's Intellectual Property at Allscripts sole cost and expense. + +2.3 Merchant Agreements; Pre-approval. All proposed Sublicensed Customers who wish to purchase Merchant Processing Services must complete a Merchant Application, execute a Merchant Agreement and be Pre-approved by the Company. "Pre-approved" shall mean that the Company has determined based on a proposed Customer's Merchant Application that the proposed Customer meets OFAC and Member Bank criteria and the Company's credit standards (collectively, the "Criteria"). "Rejection" shall mean the Company has not Pre-approved the proposed Merchant Processing Services Customer. [***]. Allscripts shall not represent to any prospective Sublicensed Customer that a Merchant Application will be approved. Company may terminate any Merchant Agreement pursuant to the terms of such Merchant Agreement. All Merchant Processing Services shall be marketed under Company's Marks. For avoidance of doubt, Allscripts may market the Subscription Software Services, including without limitation, the electronic cashiering features and functionality of the Subscription Software Services under the Allscripts name. + +2.4 Third Parties. Allscripts will not authorize or allow any value added reseller, distributor, integrator, OEM partner, or other third party to market, demonstrate, resell, sublicense, or otherwise distribute or make available the Installed Software, Documentation or Subscription Software Services, or Merchant Processing Services except that Allscripts is permitted to (a) sign Customer Agreements with Sublicensed Customers who are Partnering Organizations who, in turn, distribute or make available the Installed Software, Documentation or Subscription Software Services to (or facilitate the procurement of Merchant Processing Services for) their respective medical staffs, provider participants, or members as permitted under applicable Law, so long as each such medical staffs, provider participants, and members are bound by the terms and conditions of the applicable Customer Agreement; and (b) exercise its rights under this Section 2 through Company approved value added resellers appointed by Allscripts from time to time ("Allscripts Resellers"); provided, however, that each Allscripts Reseller must enter into an agreement with Allscripts that is at least as protective of the Company and the Installed Software, Documentation, and Subscription Software Services as this Agreement. Allscripts will use commercially reasonable efforts to enforce the terms of Allscripts Resellers' agreements that protect Company's Intellectual Property. For avoidance of doubt, Allscripts may not delegate to Allscripts Resellers any rights that it does not have under this Agreement. + +2.5 Affiliates. To the extent that Allscripts' Affiliates, Partnering Organizations, and Allscripts Resellers utilize the rights granted hereunder, Allscripts will require such parties to comply with the restrictions on such rights set forth in this Agreement, and any non-compliance with such restrictions by such parties shall be deemed a breach of such restrictions by Allscripts, provided that third party Partnering Organizations and Allscripts Resellers shall not be required to comply with the restrictions set forth in Section 5 [***]. 7 + + + + + +2.6 No Other Rights. Except as specifically set forth in this Agreement, no other rights or entitlements are granted by the Company to Allscripts with respect to the Installed Software, Documentation, Subscription Software Services, Merchant Processing Services or Services. All rights not expressly granted hereunder are reserved by the Company and/or its third party licensors. + +2.7 Acknowledgments. + +(a) The Parties acknowledge and agree that this Agreement is non-exclusive (except as set forth in Section 5) and imposes no limitations upon either Party's relationships with other parties or on either Party's research, development, production, marketing, licensing, reselling, or sales of other products or services, whether or not similar to any of the Installed Software or the Subscription Software Services or Merchant Processing Services or any Allscripts products or services, so long as such relationships or activities do not violate any express term of this Agreement or utilize any Confidential Information of the other Party in violation of this Agreement. + +(b) [***]. In no event will anything in this Agreement be construed as an obligation on Allscripts' part to (i) incorporate the Installed Software or Documentation into Allscripts products or services or (ii) market, promote, distribute or make available the Installed Software or Subscription Software Services or Merchant Processing Services, [***]. + +(c) Notwithstanding [***] Allscripts or its Affiliates may, in its sole discretion, develop, market, provide, offer, sell or resell, directly, or indirectly through its resellers, Other Services (as defined in Section 5) to interface with Allscripts Payerpath or Allscripts Practice Management [***]. In no event shall Allscripts directly or indirectly utilize any of the Company's Installed Software, Subscription Software Services or Confidential Information in connection with any development activities described above in this Section 2.7(c). + +2.8 Marketing Materials. The Company agrees to work with Allscripts to develop the initial set of marketing communications materials related to the Subscription Software Services or Merchant Processing Services ("Company Marketing Materials"). At the time such Company Marketing Materials are first distributed, each party must consent to their content, [***]. Allscripts must replicate all Company copyright notices on all copies of the Company Marketing Materials (and all customized versions thereof). + +2.9 Forecast. Allscripts will provide Company with a non-binding [***] sales forecast for Allscripts' sales of eligibility and payment processing solutions during [***] within [***] of the Effective Date. + +3. Services. Exhibit G sets forth the Amended and Restated Developer Program Agreement (the "Restated Developer Agreement") in place between Allscripts and Company, which replaces in its entirety the Developer Agreement. The Restated Developer Agreement is hereby incorporated into this Agreement as if fully set forth herein and made part hereof. + +3.1 Development and Integration. + +(a) Within [***] of the Effective Date, Allscripts and the Company will reasonably cooperate to create a mutually satisfactory, sufficiently detailed, written specification (the "Integration Specification") that describes the desired level of functional integration between Allscripts Payerpath and Allscripts Practice Management and the Subscription Software Services, along with the technical details and delivery dates (preliminarily defined in Exhibit B) related to achieving the functional integration as set forth in Exhibit G. 8 + + + + + +(b) The Company and Allscripts will each commit appropriate resources needed to complete their respective responsibilities with respect to the functional integration indicated by the Integration Specification as further described in Exhibits A and B hereto. The Company and Allscripts will each have the development and integration responsibilities assigned to it and described in the Integration Specification and will each be responsible for their respective costs associated with such responsibilities and in performing all other tasks assigned to it under the Integration Specifications. The Company and Allscripts will each use commercially reasonable efforts to complete their respective responsibilities in the Integration Specification within the time frames set forth in Exhibit B. + +(c) Beta Testing. The parties anticipate that there will be up to [***] beta test sites testing the Subscription Software Services. Regardless of when the testing began or begins, Allscripts will be the primary deployment resource for each of the beta test sites as well as the first [***] implementations of the Subscription Software Services, as applicable, for Allscripts' Sublicensed Customers. + +3.2 Implementation Services. Allscripts will be responsible for providing Implementation Services for the Installed Software and the Subscription Software Services (but not implementation for the Phreesia Patient Intake Management Offering, which shall be Phreesia's responsibility) distributed or made available hereunder. At Allscripts' request and direction, on a per-Sublicensed Customer basis, the Company will provide such Implementation Services directly to such Sublicensed Customer or through Allscripts in exchange for fees set forth in Exhibit C. + +3.3 Provision and Quality of Services. To the extent the Company is required to provide Services under this Agreement, the Company will provide those Services [***]. + +3.4 Personnel. [***]. The Parties agree to use their reasonable efforts to promptly resolve any good faith complaints regarding any of the Company's personnel, or otherwise concerning the value or efficacy of any Services performed by or on behalf of the Company. + +3.5 Books and Records. As applicable under the Omnibus Reconciliation Act of 1980, until the expiration of four (4) years after the furnishing of Services pursuant to this Agreement, the Company will, upon receipt of written request, and if then requested to make such information available under the then-existing Law, make available to the Secretary of the U.S. Department of Health and Human Services, the Comptroller General of the U.S. Department of Secretary of Health and Human Services, or any of their fully-authorized representatives, the books, documents, and/or records of the Company that are necessary to verify the nature and extent of costs associated therewith. The record keeping and disclosure provisions of this Section 3.4 will apply to all Services provided by the Company, but will be applicable only if the Company receives remuneration in the amount of $10,000 or more, with regard to the Services performed in relation to a single Sublicensed Customer. + +4. Order and Acceptance. + +4.1 Order Process. In order to activate Merchant Processing Services for a Merchant Processing Services Customer, the proposed Merchant Processing Services Customer must submit (directly or indirectly through Allscripts) a completed Merchant Application and executed Merchant Agreement to the Company within [***] from the execution by such Merchant Processing Services Customer of a Customer Agreement. Within [***] of the modification or termination (other than sublicenses that expire at the end of a term previously specified in a Purchase Order) of any Customer Agreement, Allscripts will provide the Company with written notice of such modification or termination. This Section 4.1 shall not be applicable to situations where the Allscripts Customer is purchasing Merchant Processing Services in connection with its purchase of PIMS. 9 + + + + + +4.2 Distribution; Commencement of Subscription Software Services. [***]. Subject to the terms of this Agreement, the terms and conditions relating to the provision of Merchant Processing Services to Sublicensed Customers, including but not limited to commencement thereof, shall be set forth in the Merchant Application and Merchant Agreement. [***]. + +4.3 Configuration and Acceptance. + +(a) As part of the Implementation Services, the Company agrees to assist Allscripts in conducting configuration and acceptance testing of the Subscription Software Services, if and as requested or required by a Sublicensed Customer, in order to ensure that the Subscription Software Services are fully operable, meet all applicable specifications, and will function in accordance with the Documentation when properly installed and used for its intended purpose. + +(b) In the event of final rejection by Allscripts or a Sublicensed Customer as a result of the Company's breach of this Agreement, including, without limitation, a breach of the Company's representations and warranties in Sections 21.1 and 21.3, if any payments hereunder have already been made by Allscripts to the Company regarding such Sublicensed Customer, and if Allscripts provides a refund to such Sublicensed Customer based on such Customer's rejection of the Subscription Software Services, then the Company will provide Allscripts with a refund of the applicable payment within [***]. + +5. [***]. + +6. FollowMyHealth. When Allscripts refers its FollowMyHealth customers to merchant processing service providers, it may include Phreesia among the providers referred. [***]. + +7. Contacts. + +7.1 Relationship Contacts. Concurrently with the execution of this Agreement, each Party has designated an individual to serve as that Party's initial point of contact to facilitate communications between the Parties on all matters (e.g., marketing, maintenance and support, technical, customer satisfaction, sales pipeline) that may arise under this Agreement. The initial Allscripts relationship contact is [***] and the initial Company relationship contact is [***]. Each Party may change its respective relationship contact at any time upon written notice to the other Party. + +7.2 Issues. In the event of any issues that may arise pursuant to this Agreement, the Parties' relationship contacts may confer to resolve such issues, it being understood that this will not preclude any Party from initiating dispute resolution proceedings pursuant to Section 28.9. + +8. Licenses and Intellectual Property. + +8.1 License Grant. Subject to the terms and conditions of this Agreement, the Company hereby grants to Allscripts and its Affiliates a non- exclusive, royalty-free, irrevocable [***] non-transferable (except in accordance with Section 28.4), sublicensable (through multiple levels of sublicensees), fully paid-up right and license under all of the Company's Intellectual Property to, throughout the Territory, access, use, reproduce, perform, display, modify, create derivative works of, transmit, demonstrate, test, operate, port, configure, distribute, and make available the Installed Software and Subscription Software Services solely for the purposes of: + +(a) Allscripts' and its Affiliates' internal use of the Installed Software and Subscription Software Services as permitted hereunder, including with respect to its marketing, selling, development, service, and support activities under this Agreement, and including the training of Allscripts employees, contractors, and other authorized Representatives on the marketing, selling, planning, supporting, and use of the Installed Software, Subscription Software Services or any integrated product with any Allscripts products and services; 10 + + + + + +(b) the marketing, promoting, distributing, reselling, or provision of the Installed Software or the Subscription Software Services, directly or through Allscripts Resellers or Partnering Organizations, in accordance with the terms and conditions of this Agreement; + +(c) enabling Allscripts products and services to interface or otherwise integrate, interact, or interoperate with the Installed Software and the Subscription Software Services , including performing any integration or interface development efforts with respect to the Installed Software, Subscription Software Services or any integrated product with any Allscripts products and services, or internally testing, evaluating, and performing validation and verification with respect to the Installed Software, Subscription Software Services or any integrated product with any Allscripts products and services (it being understood that the foregoing activities will not affect the Company's representations and warranties in Section 21); + +(d) reselling Subscriptions (through multiple levels of sublicensees) to (i) Sublicensed Customers pursuant to Customer Agreements in accordance with this Agreement and (ii) Allscripts' Affiliates or to Allscripts Resellers or Partnering Organizations (subject to Sections 2.4 and 2.5) to carry out any of the purposes set forth in this Agreement; + +(e) creating backups and other copies of the Installed Software solely to the extent necessary to perform its obligations hereunder in the ordinary course of business; + +(f) managing, operating, and hosting (i) any Installed Software, (ii) the Allscripts products that will interface with the Installed Software or Subscription Software Services on behalf of Sublicensed Customers and (iii) authorizing its Sublicensed Customers, Allscripts Resellers or Partnering Organizations to do the same; + +(g) generating, printing, copying, downloading, and storing all Data and other displays and output, as may result from any execution or other use of the Subscription Software Services and authorizing its Sublicensed Customers, Allscripts Resellers or Partnering Organizations to do the same; and + +(h) all other purposes reasonably necessary to carry out any of the foregoing. + +For the sake of clarity, the Subscription Software Services shall be hosted, managed and operated by Company. + +8.2 Documentation and Marketing Materials. Subject to the terms and conditions of this Agreement, the Company hereby grants to Allscripts a non-exclusive, royalty-free, irrevocable , non-transferable (except in accordance with Section 28.4), sublicensable (through multiple levels of sublicensees), fully paid-up right and license under all of the Company's Intellectual Property to access, use, reproduce, perform, display, transmit, demonstrate, test, operate, port, configure, distribute, and make derivative works of the Documentation, Company Marketing Materials and Allscripts Marketing Materials, in whole or in part, throughout the Territory, for any purpose consistent with Section 8.1, [***]. + +8.3 Trademarks. + +(a) Company Marks. 11 + + + + + +(i) Subject to the terms and conditions of this Agreement, the Company hereby grants to Allscripts and its Affiliates a non-exclusive, royalty- free, irrevocable [***] non-transferable (except in accordance with Section 28.4), sublicensable (through multiple levels of sublicensees), fully paid- up right and license under all of the Company's Intellectual Property to use the Company's brands, trademarks, product and service names, logos and slogans (the "Company Marks"), throughout the Territory, solely in connection with the marketing, selling, or provision of the Installed Software and the Subscription Software Services and Merchant Processing Services permitted hereunder or to otherwise fulfill the terms of this Agreement. [***]. + +(ii) Except as set forth in Section 11.3, Allscripts' use of the Company Marks will be in accordance with the Company's trademark use guidelines and instructions as set forth in Exhibit I. The Company will give Allscripts written notice of any changes to such specifications or guidelines, and will give Allscripts a reasonable time to modify its use of the Company Marks to comply therewith. + +(iii) Allscripts is not required to display any Company- Marks on its products or marketing collateral, provided that the Subscription Software Services shall be characterized as "Powered by Phreesia" and shall contain a Phreesia logo. All goodwill in and to the Company Marks will inure solely to the benefit of Company. + +(b) Allscripts Marks. + +(i) Subject to the terms and conditions of this Agreement, Allscripts hereby grants to the Company a non-exclusive, royalty-free, irrevocable [***] non-transferable (except in accordance with Section 28.4), fully paid-up right and license under all of Allscripts' Intellectual Property to use the Allscripts Marks, throughout the Territory, solely in connection with providing the Installed Software and Subscription Software Services to Sublicensed Customers who have signed a Customer Agreement and to otherwise fulfill the terms of this Agreement. + +(ii) The Company's use of the Allscripts Marks will be in accordance with Allscripts' trademark use guidelines and instructions, if any, furnished to the Company in writing from time to time. Allscripts will give the Company written notice of any changes to such specifications or guidelines, and will give the Company a reasonable time to modify its use of the Allscripts Marks to comply therewith. + +(iii) The Company is not required to display any Allscripts Marks on any of its products or marketing collateral. All goodwill in and to the Allscripts Marks will inure solely to the benefit of Allscripts. The Company will not register, seek to register, or contest the validity of any of the Allscripts Marks in any jurisdiction. + +8.4 Restrictions on Use. Except as and to the extent expressly permitted by this Agreement and/or the Integration Specification, Allscripts will not, and will not permit others to: + +(a) reverse engineer, disassemble, decompile, decode, or adapt the Installed Software or Subscription Software Services, or otherwise attempt to derive or gain access to the source code or algorithms of the Installed Software or Subscription Software Services, in whole or in part, except [***]; + +(b) rent, lease, assign, or sell the Subscription Software Services or Installed Software to any third party (other than the physical media (if any) containing any Installed Software distributed by Allscripts); 12 + + + + + +(c) use any of the Installed Software or Subscription Software Services to provide time sharing or service bureau services to third parties, other than Sublicensed Customers; + +(d) remove, obscure, or alter from the Installed Software, Subscription Software Services, Documentation or the Marketing Materials any applicable titles, trademarks, or copyright, patent, or other proprietary or restrictive legends or notices, or any end user warning or advisory, affixed to or contained therein or thereon; + +(e) export or re-export all or any part of the Installed Software or Subscription Software Services in violation of any export control Laws of the United States or any other relevant jurisdiction; + +(f) modify, correct, adapt, translate, enhance, or otherwise prepare or create any derivative works or improvements of the Installed Software or Subscription Software Services; provided, [***] + +(g) (1) provide any materials to Company (including without limitation, the SDK (as defined in the Restated Developer Agreement) or Associated Allscripts Software (as defined in the Restated Developer Agreement)) that contains any Harmful Code or any Open Source Software or (2) upload any materials into the Installed Software or Subscription Software Services that contains any Harmful Code or any Open Source Software. + +8.5 Intellectual Property Ownership. + +(a) Subject to the express rights and licenses granted by the Company in this Agreement and the provisions of this Section 8.5, the Company and its licensors reserve and retain their entire right, title, and interest (including Intellectual Property rights) in and to the Installed Software, the Subscription Software Services, the Merchant Processing Services, the Documentation, the Company Marketing Materials, and the Company Marks, and all modifications, improvements, enhancements and derivatives of the foregoing (including, subject to Section 8.4(f), any modifications, improvements, enhancements and derivatives thereto developed or performed by or on behalf of Allscripts). At no time will Allscripts, Allscripts Resellers, Partnering Organizations, or Sublicensed Customers acquire or retain any title to or ownership to such assets, except as expressly granted under this Agreement. + +(b) Subject to the express rights and licenses granted by Allscripts in this Agreement, Allscripts and its licensors reserve and retain their entire right, title, and interest (including Intellectual Property rights) in and to any modifications, improvements, or derivative works it creates or develops based on the Documentation or the Company Marketing Materials as authorized under this Agreement (e.g., any Documentation or Marketing Materials integrated with Allscripts documentation), as well as to all Allscripts products and services. At no time will the Company acquire or retain any title to or ownership to such assets, except as expressly granted under this Agreement. + +(c) Ownership of all Intellectual Property in Open Source Software will remain with respective owners thereof, subject to Allscripts' rights under the applicable Open Source Licenses. + +(d) Neither Party will take any action inconsistent with a Party's nor its licensors' ownership and interests set forth in this Section 8.5, or assist any Person in doing the same. + +8.6 Data. As between Allscripts, its licensors and Affiliates, and Sublicensed Customers, on the one hand, and the Company and its licensors and Affiliates, on the other hand, Allscripts, its licensors and Affiliates, and Sublicensed Customers have, reserve, and retain sole and exclusive ownership to all right, title, and interest in and to all Data, including all Intellectual Property arising therefrom or relating thereto. [***] have any right or license to, and shall not, use any Data except solely as and to the extent necessary to [***]. 13 + + + + + +8.7 Open Source Software. The Company has not, and will not, use, modify, or distribute any Open Source Software in a manner that could (a) require the disclosure, licensing, or distribution of any source code or algorithms underlying any of the Installed Software or any software into which it is integrated; (b) require the licensing or disclosure of the Installed Software or any software into which it is integrated free of charge; or (c) otherwise impose any limitation, restriction, waiver of rights, or condition on the right or ability of the Company to use or distribute the Installed Software or any software into which it is integrated. + +8.8 Effect of Company Bankruptcy. + +(a) All rights and licenses granted by the Company under this Agreement are and shall be deemed to be rights and licenses to "intellectual property," and the subject matter of this Agreement, including all Installed Software, Subscription Software Services Documentation, Company Marketing Materials, and Company Marks, is and will be deemed to be "embodiment[s]" of "intellectual property," for purposes of and as such terms are used in and interpreted under Section 365(n) of the United States Bankruptcy Code (the "Bankruptcy Code"). Allscripts will have the right to exercise all rights and elections under the Bankruptcy Code and all other applicable bankruptcy, insolvency, and similar Laws with respect to this Agreement, and the subject matter hereof and thereof. + +(b) Without limiting the generality of the foregoing, the Company acknowledges and agrees that, if the Company or its estate becomes subject to any bankruptcy or similar proceeding: + +(i) subject to Allscripts' rights of election, all rights and licenses granted to Allscripts under this Agreement will continue subject to the respective terms and conditions hereof and thereof, and will not be affected, even by the Company's rejection of this Agreement; and + +(ii) Allscripts will be entitled to a complete duplicate of (or complete access to, as appropriate) [***]. + +9. [intentionally left blank]. + +10. Training. + +10.1 Training. The Company will provide, [***] periodic training for Allscripts personnel in connection with this Agreement, with the first such training [***] (such training, the "First Training"). The Company agrees to dedicate sufficient resources in connection with such training. Such training may be for the benefit of Allscripts personnel either as to Allscripts' permitted activities under this Agreement or to assist the Sublicensed Customers. Such training will be provided at such reasonable times and locations (including via remote means) as the Parties may reasonably agree. Such training will include, but is not limited to, sales and ongoing support training to Allscripts staff. The goal of this training will be to enable Allscripts' sales personnel to articulate the benefits of the Services and provide basic functional demonstrations to prospective Sublicensed Customers. + +10.2 Support Training. In furtherance of Section 10.1, the Parties agree to cooperate in developing any training programs as may be reasonably necessary or useful to the provision of Support Services to Sublicensed Customers, which will be provided in a "train the trainer" format. Such programs will, at a minimum, provide Allscripts personnel with the ability to answer or appropriately refer questions about the Installed Software, Subscription Software Services or Merchant Processing Services and the Services. Such support training will include up to [***] each year of support training for Allscripts' staff adequate to enable Allscripts to provide first line support services to Sublicensed Customers as further defined in the Implementation and Support Plan. 14 + + + + + +11. Marketing. + +11.1 Sales and Marketing Support. [***] the Company will provide [***] marketing support for the permitted activities hereunder, which will include, the following: + +(a) assisting Allscripts in developing marketing strategies, plans, and marketing and training materials describing the Installed Software, Subscription Software Services or Merchant Processing Services or the Services as a complementary solution to any Allscripts product or service; + +(b) providing Allscripts with a reasonable quantity of standard Company brochures, presentations, and materials related to the Installed Software, Subscription Software Services or Merchant Processing Services, the Services and/or the Company in hard copy and electronic form; and + +(c) participating in sales meetings with Allscripts sales and/or actual or potential Sublicensed Customer personnel. + +11.2 Demonstration Systems. [***], the Company will provide fully-functional demonstration systems or accounts for the Subscription Software Services, equivalent to those systems made available to the Company's sales personnel, for use by Allscripts' sales personnel. Each Party will provide all commercially reasonable assistance, cooperation, and support requested by the other Party to maintain demonstration systems sufficient to demonstrate the Installed Software and the Subscription Software Services as integrated with any Allscripts products or services. Each Party will be responsible for its own costs and expenses in designing, developing, testing, and maintaining such demonstration systems. + +11.3 Branding. Branding of the Installed Software and the Subscription Software Services, but not the Merchant Processing Services with respect to the activities hereunder will be determined [***] Allscripts elects to private label or rebrand the Software Subscription Services, the relabeled or rebranded [***]. + +11.4 Request for Proposals. Allscripts may, in its sole discretion, recommend the Subscription Software Services or Merchant Processing Services and the Services as part of Allscripts' response to requests for proposals issued by third parties. [***]. + +11.5 Demonstrations. The Company at its own discretion will provide demonstrations of the Subscription Software Services and Merchant Processing Services at Allscripts-identified marketing events and activities, including user group meetings or conferences. In addition, either Party may, from time to time, request that the other Party attend and participate at vendor fairs and industry trade shows, seminars, user group events, and other similar events. The decision of whether or not to attend such functions will be in the sole discretion of the non-requesting Party. + +12. Support and Maintenance. + +12.1 Support Services. + +(a) The Company is solely responsible for the development, update, performance, and maintenance of the Subscription Software Service. The Company covenants to use its best efforts to ensure that the Subscription Software Services are made available to Allscripts and each Sublicensed Customer and that support for Merchant Processing Services are made available to each Sublicensed Customer in accordance with the warranties, terms, and conditions of this Agreement and in accordance with any performance standards specified in this Agreement or in the Documentation. [***]. 15 + + + + + +(b) In furtherance of Section 12.1(a), the Company agrees to provide, at no additional charge to Allscripts or Sublicensed Customers [***] technical support, assistance, training, and Updates related to the Installed Software or Subscription Software Services or Merchant Processing Services (collectively, "Support Services"), in the manner and timeframes set forth on Exhibit D, to Allscripts and its consultants and contractors and, if requested by Allscripts, directly to Sublicensed Customers. [***]. The parties agree to reasonably cooperate to troubleshoot and resolve technical support issues that may reasonably involve the products, software, or technology of the other Party or of both Parties. This Section 12.1(b) shall not be applicable to Merchant Processing Services that an Allscripts Customer receives in connection with its purchase of PIMS. + +12.2 Support Levels. Allscripts will provide the first level of support to Sublicensed Customers related to the Installed Software and Subscription Software Services and their integration with applicable Allscripts products. The first level of support is defined in Exhibit C. [***]. Allscripts, at its sole expense, will provide the second and all escalating levels of support for all technical issues and upgrades relating to Allscripts products. [***]. + +12.3 Integration Support. At the Company's expense and no additional charge to Allscripts, from time to time the Company will provide Allscripts with reasonable remote integration and implementation assistance, including, without limitation, upon addition of a new or updated Installed Software or Subscription Software Services under this Agreement. + +12.4 Documentation. The Company has delivered or made available to Allscripts complete and accurate Documentation for the Installed Software, Subscription Software Services and that required to offer the Merchant Processing Services, and will promptly deliver or make available to Allscripts supplements to such Documentation and manuals, as and when released, to reflect all modifications, releases, supplements, corrections, Updates, amendments, and other changes to the Installed Software or Subscription Software Services or that required to offer the Merchant Processing Services. The Company will provide all Documentation in electronic form, in such formats and media as Allscripts may reasonable request. The Company agrees that all Documentation will include all technical and functional specifications and other such information as may be reasonably necessary for the effective installation, testing, use, support, and maintenance of the Installed Software and Subscription Software Services other than the Merchant Processing Services, including the effective configuration, integration, and systems administration of the Installed Software, Subscription Software Services other than the Merchant Processing Services and the operation and the performance of all its functions. + +13. Updates. + +13.1 Updates. [***] (either directly or through Allscripts, at Allscripts' direction) with Updates , either in response to specific requests from Allscripts to remedy Errors (consistent with the Error correction timing in Exhibit C), or as such Updates are released or generally made available [***]. For the avoidance of doubt, Updates will constitute Installed Software or Subscription Software Services (as applicable) and be subject to the terms and conditions of this Agreement. With respect to the Merchant Processing, [***]. 16 + + + + + +13.2 Restrictions on Updates. + +(a) With respect to any material customer facing Update that does not relate to Merchant Processing Services, the Company will provide Allscripts [***] notice before releasing any such Update (except for Error corrections or fixes which may be released earlier). At least [***] before releasing any such customer facing Update (except for Error corrections or fixes which may be released earlier), the Company will provide Allscripts with (i) technical documentation of such Update; (ii) commercially reasonable technical assistance and training for such Update; and (iii) a functional, updated demonstration version of the Subscription Software Services (and for any Update made available via remote access, a testing environment), which will be sufficient to enable Allscripts to test the applicable Subscription Software Services and Allscripts products and services with respect to such Update. [***]. + +(b) The Company agrees to use its best efforts to resolve all support issues (pursuant to Exhibit D) relating to an Update that the Parties classify as "Critical" or "High" (as on Exhibit D) before releasing such Update. + +13.3 Compatibility. With respect to any upgrades, updates, or modifications [***]. + +13.4 Changes to Merchant Processing Services. The Company may make revisions to the Merchant Processing Services, [***]. + +14. Other Covenants. + +14.1 Insurance. + +(a) At the Company's expense, the Company will maintain policies of insurance with insurance companies having a financial strength rating no lower than "A" and a size category not lower than "XII" as rated by the A.M. Best Company, and in amounts which are reasonable and prudent in light of the Company's business, potential liabilities to Allscripts hereunder, and other relevant factors, including the following: (i) Commercial General Liability insurance [***] (ii) Errors and Omissions insurance [***] and (iii) Workers' Compensation insurance with applicable statutory limits. + +(b) Allscripts will be named as an additional insured under the foregoing policies, each of which will be primary and non-contributory. [***] The Company will give Allscripts [***] notice prior to any alteration, cancellation, or non-renewal of the policies required pursuant to this Agreement; provided, however, that the Company will not be obligated to provide such notice if, concurrently with such alternation, cancellation, or non-renewal, the Company obtains similar or better coverage from the same or another qualified insurer, without a lapse in coverage. + +14.2 No Subcontractors. Except for the performance of the Merchant Processing Services, the Company will not subcontract any of its obligations under this Agreement to a third party, including the provision of any Services, without Allscripts' prior written consent. Allscripts hereby consents to the use by the Company of offshore developers with respect to the development of the Installed Software and the Subscription Software Services. The Company will remain responsible to Allscripts for any performance of its obligations hereunder notwithstanding the permitted engagement of any such third party. Allscripts acknowledges that the provision of the Merchant Processing Services is dependent on the services of the Member Banks. Company shall use good faith efforts to maintain its ability to provide Merchant Processing Services, including by adhering to the rules and regulations promulgated by Visa, Master Card and the Member Bank and using good faith efforts to maintain a current contract with the Member Bank or a reasonably comparable substitute to enable it to fulfill its obligations hereunder. Notwithstanding anything to the contrary [***]. 17 + + + + + +14.3 Further Assurances. Each Party will, upon the reasonable request of the other Party and at the requesting Party's sole cost and expense, promptly execute such documents and perform such acts as may be necessary to give full effect to the terms of this Agreement. + +14.4 Non-Solicitation. During the term of this Agreement and for a period of [***] thereafter, neither Party nor its controlled Affiliates will, without the prior written consent of the other Party, directly or indirectly solicit for employment any then-current employee of the other Party or its controlled Affiliates; [***]. + +14.5 Compliance with Laws. Each Party will comply with all applicable Laws and the Operating Regulations, governmental requirements, and industry standards, including those with respect to privacy, data protection, portability, or accountability, applicable to such Party or its personnel with respect to the Software, the Services, and the performance of its obligations under this Agreement; provided that Allscripts will have no obligation to comply with any Operating Regulations unless such Operating Regulations are disclosed to it. Neither Party will, nor permit any third parties to, export, re-export, or release, directly or indirectly, any Controlled Technology to any country or jurisdiction to which the export, re-export, or release of any Controlled Technology (a) is prohibited by applicable Law or (b) without first completing all required undertakings (including obtaining any necessary export license or other governmental approval). + +14.6 [***]. + +15. Force Majeure. + +15.1 Force Majeure. Neither Party will be liable or responsible to the other Party, nor be deemed to have defaulted under or breached this Agreement, for any failure or delay in fulfilling or performing any term of this Agreement, when and to the extent such failure or delay is caused by (a) acts of God; (b) flood, fire, or explosion; (c) war, terrorism, invasion, riot, or other civil unrest; (d) embargoes or blockades in effect on or after the Effective Date or (e) any other cause or event beyond its reasonable control (each of the foregoing, a "Force Majeure Event"). The Disaster Recovery Plan, attached hereto as Exhibit L, sets forth Phreesia's obligations for disaster recovery preparedness and response, including among other things, preparing for and responding to Force Majeure Events. + +15.2 [***]. + +16. Regulatory Matters. + +16.1 Privacy and Security Matters. Concurrently with the execution of this Agreement, the Parties are executing a HIPAA Business Associate Agreement (the "BAA") in the form attached hereto as Exhibit E. + +16.2 Technical Standards. The Company will provide Allscripts with Updates so that the Subscription Software Services can be implemented and configured to comply in all material respects with applicable privacy and security standards (e.g., HITECH, HIPAA, and Omnibus rule) within a reasonably practicable timeframe (based on the scope of required enhancements and other factors) after their final, formal adoption and publication by the Secretary of the U.S. Department of Health and Human Services. + +16.3 Data. The Company will ensure that all protected health information (PHI), personally identifiable information (PII) or payment card information (PCI) is (1) encrypted at rest and (2) encrypted while moving in or out of the Company's data center. 18 + + + + + +16.4 Interfaces. In connection with the Subscription Software Services, PIMS and the Services, the Company will use and support Unity API interfaces that are generally available to Allscripts, and make appropriate adjustments to the Subscription Software Services to support Allscripts' standard implementation of such interfaces. Upon the Parties' mutual agreement, and without additional licensing fees, the Company may also use Allscripts API services (e.g., Unity), and Allscripts may use the Company's APIs (as applicable). + +16.5 Required Updates. The Company will provide Allscripts with Updates, if and when required, so that the Subscription Software Services include such functionalities as are necessary to allow Allscripts and Sublicensed Customers to comply with those legal and regulatory requirements that are binding upon Allscripts or Sublicensed Customers in their respective use of the Installed Software and Subscription Software Services or Merchant Processing Services and that are binding standards or other requirements regarding the processing of electronic transactions that the Installed Software and Subscription Software Services or Merchant Processing Services are designed to process, including any and all binding modifications or replacements to such regulations. [***]. + +16.6 Regulatory Approvals. The Company will be solely responsible for obtaining and maintaining all licenses, permits, and approvals required by any governmental authority with respect to the Software or the marketing, use, or distribution thereof. The Company will use reasonable diligence in connection with the design and development of the Subscription Software Services or Merchant Processing Services to identify any such licenses, permits, and approvals and any applicable Laws to which the Subscription Software Services or Merchant Processing Services or its use is subject. [***]. + +16.7 [Intentionally Omitted.] + +16.8 Protected Health Information. Except as otherwise expressly provided hereunder, in connection with any transfer of protected health information ("PHI") between the Parties pursuant to this Agreement: + +(a) each Party will transfer PHI between the Parties only through use of a dedicated connection to which the Parties are the only authorized parties or such other method of communication, such as encrypted communication, between them; + +(b) each Party will not permit any third party to use any such connection to the extent that such use is in its control, unless such third party is providing services to such Party as permitted under this Agreement; + +(c) each Party will take reasonable steps to ensure that the output display of that connection at each facility it has is limited to authorized personnel or independent contractors of the Party; and + +(d) the Company's use of Sublicensed Customer de-identified and aggregated PHI will be limited to the rights set forth in a Business Associate Agreement, if any, executed between the Company and the respective Sublicensed Customer. The Company has no rights to de-identify any Sublicensed Customer PHI under this Agreement. + +17. Invoicing, Reporting and Payment Terms. + +17.1 Reports and Invoicing. + +(a) Invoicing from Company to Allscripts. 19 + + + + + +(i) Invoicing for Eligibility and Benefits (E&B) Services. The Company will provide Allscripts with (1) an invoice for the fees set forth on Exhibit F for all E&B Transactions [***] and (2) a report with reasonably detailed supporting data for all such E&B Transactions by each Sublicensed Customer, excluding Legacy Customers, [***]. + +(ii) Invoicing for POS Dashboard. Allscripts shall deliver a report with reasonably detailed supporting data to Company no later than [***] for current Sublicensed Customers of the POS Dashboard. Company shall deliver an invoice to Allscripts for POS Dashboard fees in accordance with Exhibit F no later than [***]. + +(iii) Invoicing for Professional Services and Travel and Expense (T&E) Reimbursement. If services are performed by Company pursuant to a request by Allscripts for implementation, set up, training or support beyond those services that Company is required to perform under this Agreement, including, without limitation, as set forth in Sections 10 and 11, Company will deliver an invoice for such fees at the hourly rate described in Exhibit C and any related reimbursable expenses that Allscripts has pre-approved no later than [***] together with reasonable supporting detail. + +(iv) Allscripts Internal Use. Notwithstanding anything to the contrary, Allscripts will not be required to make any payments to the Company in respect of its internal use of the Installed Software or Subscription Software Services, including with respect to its use in connection with its performing of support obligations hereunder. + +(b) Invoicing from Allscripts to Company. + +(i) Invoicing for Revenue Share on Merchant Processing Services. Company shall deliver a report with reasonably detailed merchant-level payment transaction data, [***] to Allscripts [***] for Merchant Processing Services provided to Allscripts Customers, excluding Legacy Customers. Allscripts will provide the Company with an invoice for merchant processing revenue share in accordance with Exhibit F [***]. + +(ii) Invoicing for Patient Intake Management Offering. Company shall deliver a report with reasonably detailed data, [***] to Allscripts [***] for its Patient Intake Management Offering provided to Allscripts Customers, excluding Legacy Customers. Allscripts will provide the Company with an invoice for merchant Patient Intake Management revenue share in accordance with Exhibit F, [***]. + +(iii) Legacy Customer's Fee. Allscripts shall invoice the Company for Legacy Customers (as defined on Exhibit H) quarterly fees in accordance with Exhibit F [***]. + +17.2 Reporting for the Purpose of Invoicing Sublicensed Customers. [***]. + +17.3 Payment Terms. + +(a) Each party will submit each invoice in electronic format, via such delivery means and to such address as are specified by Allscripts and the Company in writing from time to time. + +(b) Subject to the terms and conditions of this Section 17.3, each party will pay all properly invoiced fees within [***] after its receipt of a proper invoice therefor. All payments hereunder will be invoiced in U.S. Dollars. All payments hereunder will be made by wire transfer to the account specified by each Party; provided that a Party shall provide at least [***] advance notice of any changes to its account. [***]. 20 + + + + + +(c) Subject to Section 17.3(d), Company will not withhold the Subscription Software Services or Merchant Processing Services or any Services or fail to perform any obligation hereunder by reason of a good faith withholding of any payment or amount in accordance with this Section 17.3(c) or any dispute arising therefrom. [***]. + +(d) [***]. + +17.4 Audit Rights. + +(a) During the term of this Agreement, for the longer of [***], each Party will maintain complete and accurate (in all material respects) books and records, in accordance with generally accepted accounting practices, regarding its sales and services activities with respect to the subject matter of this Agreement. + +(b) During the term of this Agreement, [***], each Party will have the right to engage, at its own expense, an independent auditor reasonably acceptable to the other Party to review the other Party's books and records solely for the purpose of confirming the other Party's compliance with its pricing and payment obligations hereunder. Prior to performing any audit, the independent auditor must sign a confidentiality agreement in a form reasonably acceptable to the audited Party. Any such audit will be limited in scope to the [***] period immediately preceding the commencement date of such audit. The auditing Party will furnish the audited Party with written notice at least [***] prior to the date that it desires to commence such audit. The Parties will mutually agree, reasonably and in good faith, on the timeframe for such audit to be conducted. Any such audit will be conducted during the audited Party's regular business hours and in a manner that minimizes interference with the audited Party's normal business activities. All information that is disclosed in connection with such audit will be deemed to be the Confidential Information of the audited Party, and subject to this Agreement. Any audit will be conducted in a manner that does not breach or violate any applicable Laws regarding patient confidentiality. The rights set forth in this Section 17.4(b) may not be exercised by an auditing Party more frequently than one (1) time in any twelve (12)-month period. + +(c) If any audit reveals an underpayment or over-charge by a Party, then such Party will promptly remit the full amount of such underpayment or over-charge to the other Party. + +(d) Each Party will bear all costs and expenses it incurs in connection with preparing for, conducting, or complying with any such audit including, in the case of the auditing Party, the costs and expenses of conducting the audit. + +(e) Additionally, Allscripts shall have the right to examine the development and any work-in-progress at any time upon reasonable notice to the Company. Furthermore, [***], the Company shall provide sufficient access to its books and records as requested by Allscripts for the purpose of verifying the Company's compliance with its obligations relating to matters other than payment and pricing. In addition, [***], Allscripts shall provide sufficient access to its books and records as requested by the Company for the purpose of verifying Allscripts compliance with its fee reporting and payment obligations hereunder. + +(f) Annually, the Company shall have performed, [***], a PCI assessment and a third party privacy and security assessment covering [***] Company will make available to Allscripts via WebEx or similar web-conferencing technology a copy of the reports from the PCI assessment and the privacy and security assessment for Allscripts review [***] of [***]. Additionally [***], upon Allscripts' reasonable 21 + + + + + +request, Company shall cause the firms performing the Security Assessments to make available the personnel responsible for such audits to discuss any adverse findings with Allscripts. Company shall perform third party external vulnerability scans [***]. All Critical or High vulnerabilities identified during the scans shall be remediated and validated as closed by the third party scanning vendor. Company shall also perform third party penetration tests following a major security architectural change. Company shall provide to Allscripts an executive summary of each vulnerability scan and penetration test [***] of completion of each such scan or test. Vulnerability scans and penetration testing requirements shall commence [***]. The PCI audit, third party Privacy and Security assessment, vulnerability scan, and penetration test shall collectively be referred to as the "Security Assessments." + +(g) Annually, Allscripts shall have performed, at its costs and expense, a third party privacy and security assessment [***]. Upon request, Allscripts will coordinate with Company to make available to Company via WebEx or similar web-conferencing technology a copy of the report from the privacy and security assessment for Company review, provided that such web-conference will not be earlier than [***]. + +Failure to comply with this Section shall be deemed a material breach of this Agreement. + +18. Expenses; Taxes. + +18.1 Expenses. Unless otherwise expressly set forth in this Agreement, each Party will bear all of its own costs and expenses incurred in connection with this Agreement or its performance hereunder, including any development costs, sales and marketing costs, and support costs. + +18.2 Taxes. All fees set forth herein are inclusive of any taxes, tariffs, duties, assessments, or governmental charges. Each Party will be responsible for any sales tax, use tax, excise tax, import duty, export duty, or other tax, tariff, duty, assessment, or charges of any kind imposed by any governmental entity on it as a result of any transaction contemplated by this Agreement. + +19. Confidentiality. + +19.1 Obligations. From time to time in connection with this Agreement, either Party (as the "Disclosing Party") may disclose or make available to the other Party (as the "Receiving Party") Confidential Information. [***]. + +19.2 Exceptions. Confidential Information shall not include [***]. + +19.3 Legally Required Disclosure. Notwithstanding anything in this Section 19 to the contrary, if a Receiving Party or any of its Representatives is required or receives a request, pursuant to applicable Law or the rules or regulations of a stock exchange or similar self-regulatory authority, to disclose any of the Disclosing Party's Confidential Information, then the Receiving Party agrees, to the extent legally permissible and as soon as reasonably practicable, to provide the Disclosing Party with written notice of the event so that the Disclosing Party may, at the Disclosing Party's expense, seek a protective order or other remedy. The Receiving Party or its Representative (as applicable) will use its commercially reasonable efforts to consult and cooperate with the Disclosing Party with respect to any effort by the Disclosing Party to resist or narrow the scope of such requirement or request, or to seek such protective order or other remedy. If such protective order or other remedy is not obtained, then the Receiving Party or its Representative (as applicable): (a) may, without liability, disclose that portion of the Disclosing Party's Confidential Information that it is required or requested to disclose; and (b) will use its commercially reasonable efforts to have confidential treatment accorded to the Confidential Information so disclosed. Furthermore, Section 19 will not apply to the disclosure of Confidential Information if such disclosure is necessary to establish rights or enforce obligations under this Agreement, but only to the extent that any such disclosure is necessary. Any information disclosed pursuant to this Section 19.3 will retain its confidential status for all other purposes. 22 + + + + + +19.4 Effect of Expiration or Termination. Subject to Section 25.7, upon expiration or termination of this Agreement, at the Disclosing Party's request, the Receiving Party will, and will cause its Representatives (and, if applicable, its Affiliates, Allscripts Resellers, and Partnering Organizations) to, promptly return or destroy all Confidential Information received from the Disclosing Party in tangible form, together with all copies thereof, in such Person's possession; provided, however, that the Receiving Party may keep one (1) copy of the Disclosing Party's Confidential Information (a) to the extent necessary to exercise its surviving rights and perform its surviving obligations hereunder and (b) in accordance with its corporate security and/or disaster recovery procedures, to the extent such Confidential Information is in electronic form. The Receiving Party will, upon request, promptly certify in writing that it has complied with the obligations of this Section 19.4. + +19.5 Protected Health Information. For the avoidance of doubt, the protection of PHI or other personally identifiable information received by a Party or its Representatives hereunder will be governed by the BAA, and will not be deemed to be Confidential Information for purposes of this Agreement. + +19.6 No Additional Requirements. Each Party acknowledges that the other Party or its Representatives may, currently or in the future, be developing internally, or receiving information from other Persons, that is similar to the Confidential Information of the other Party disclosed to it or its Representatives under this Agreement. Except as otherwise set forth in Section 5, nothing in this Agreement will prohibit any Party or its Representatives from developing, manufacturing, marketing, selling, servicing, or supporting, or having developed, manufactured, marketed, sold, serviced, or supported for it, products, concepts, systems, or techniques that are similar to or compete with the products, concepts, systems, or techniques contemplated by or embodied in the other Party's Confidential Information; provided, that neither Party nor its Representatives may use the other Party's Confidential Information in connection with such activities. Furthermore, neither Party nor its Representatives will have any obligation to limit or restrict the assignment of its respective employees or consultants as a result of their having had access to the other Party's Confidential Information. + +20. Public Announcements. + +20.1 Publicity. Except as may be required by applicable Law or listing standard, neither Party will issue or release any public announcement, statement, press release, or other publicity relating to this Agreement without the prior written consent of the other Party. + +20.2 Use of Marks. Unless expressly permitted by this Agreement, neither Party will use the other Party's trademarks, service marks, trade names, logos, domain names, or other indicia of source, origin, association, or sponsorship, without the prior written consent of the other Party. + +21. Representations and Warranties. + +21.1 Mutual Representations and Warranties. Each Party represents and warrants to the other Party that: + +(a) it is duly organized, validly existing, and in good standing as a corporation or other entity as represented herein under the Laws of its jurisdiction of incorporation, organization, or charter; 23 + + + + + +(b) it has, and throughout the term of this Agreement and any Customer Agreement will retain, the full right, power, and authority to enter into this Agreement, to grant the rights and licenses it grants hereunder, and to perform its obligations under this Agreement; + +(c) its execution of this Agreement has been duly authorized by all necessary corporate or organizational action of such Party; + +(d) when executed and delivered by it, this Agreement will constitute its legal, valid, and binding obligation, enforceable against it in accordance with its terms; + +(e) there is no outstanding claim, litigation, proceeding, arbitration, or investigation to which it is a party that would reasonably be expected to have a material adverse effect on its ability to enter into this Agreement or to perform its obligations hereunder; and + +(f) its execution, delivery, and performance of its obligations under this Agreement does not and will not violate any judgment, order, decree, or applicable Law, nor does it or will it violate any agreement to which it is a party. + +21.2 Company Representations and Warranties. The Company represents and warrants to Allscripts that: + +(a) Company or its licensors, or their permitted successors or assigns are, and throughout the term of this Agreement and any Customer Agreement will remain, the legal and beneficial owners of the entire right, title, and interest in and to the Installed Software, Subscription Software Services, the Documentation, and the Company Marketing Materials, including all Intellectual Property relating thereto (or, with respect to any third party software used to provide the Installed Software, Subscription Software Services it has, and will continue to have throughout the term of this Agreement, sufficient and valid license rights to grant the licenses and perform its obligations hereunder), including the unconditional and irrevocable right, power, and authority to grant the licenses and perform its obligations hereunder; + +(b) as provided by the Company, no Installed Software or Subscription Software Services (including any Updates) does or will, at any time during the term of this Agreement or any Customer Agreement, contain any Harmful Code and no Installed Software will contain any Open Source Software; + +(c) when used by Allscripts or any Sublicensed Customer, no Installed Software, Subscription Software Services, Documentation or Company Marketing Materials does or will: (i) infringe, misappropriate, or otherwise violate any Intellectual Property or other proprietary right of any third party (provided that Company's sole obligation and Allscripts sole remedy for any breach of the foregoing shall be for Company to indemnify Allscripts pursuant to Section 22), or (ii) fail to comply with any applicable Law; + +(d) there is no settled, pending, or, to the Company's knowledge, threatened litigation, claim, or proceeding (including in the form of any offer to provide a license): (i) alleging that any use of the Installed Software, Subscription Software Service, Documentation or Company Marketing Materials does or would infringe, misappropriate, or otherwise violate any copyright, patent, trade secret, or other Intellectual Property of any third party; (ii) challenging the Company's ownership of, or right to use or license, any Installed Software, Subscription Software Services or Merchant Processing Services, Documentation or Company Marketing Materials, or alleging any adverse right, title, or interest with respect thereto; or (iii) alleging the invalidity, misuse, unregistrability, unenforceability, or non-infringement of any copyrights, trade secret rights, or patent rights in the Installed Software, Subscription Software Services or Merchant Processing Services, Documentation, or Company Marketing Materials; 24 + + + + + +(e) all Documentation is and will be complete and accurate in all material respects when provided to Allscripts, such that at no time during the term of this Agreement or any Customer Agreement will the Subscription Software Services or Merchant Processing Services have any material undocumented feature; and + +(f) all Services provided hereunder are and will be in compliance with all applicable Laws. + +21.3 Performance Warranty. The Company represents, warrants, and covenants to Allscripts that, during the term of this Agreement and any Customer Agreement: + +(a) when used in accordance with the Documentation, all Subscription Software Services or Merchant Processing Services and the Installed Software as provided by the Company will meet, in all material respects, all applicable specifications set forth in this Agreement and the Documentation, and function in all material respects, in conformity with this Agreement and the Documentation; + +(b) any media on which the Installed Software or Documentation is delivered will be free of any damage or defect in design, material or workmanship; and + +(c) no Update will have a material adverse effect on the material functionality or operability of the Installed Software or Subscription Software Services or Merchant Processing Services, as the case may be. + +21.4 Breach of Performance Warranty. If the Company breaches any of the warranties set forth in Section 21.3, then the Company will, upon notice from Allscripts and at the Company's sole cost and expense, remedy such breach on a timely basis and in accordance with Section 12. [***]. + +21.5 Disclaimer. EXCEPT FOR THE EXPRESS WARRANTIES SET FORTH IN THIS AGREEMENT, EACH PARTY HEREBY DISCLAIMS ALL WARRANTIES, WHETHER EXPRESS, IMPLIED, STATUTORY, OR OTHERWISE, WITH RESPECT TO THIS AGREEMENT OR ANY SUBJECT MATTER HEREOF INCLUDING WITHOUT LIMITATION, THOSE OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. + +22. Indemnification. + +22.1 Indemnification by the Company. Subject to the provisions of this Section 22, the Company agrees to defend Allscripts and its Representatives, and all of such Persons' successors and assigns (collectively, the "Allscripts Indemnified Persons"), from and against any and all third party Claims, and indemnify and hold the Allscripts Indemnified Persons harmless from and against any and all Losses incurred or sustained by the Allscripts Indemnified Persons, or any of them, directly or indirectly, in connection with or to the extent such third party Claim and related Loss is a result of any of the following: + +(a) the Company's breach of any representation, warranty, covenant, or obligation of the Company under this Agreement or the Restated Developer Agreement; + +(b) any violation of applicable Law by the Company; + +(c) any gross negligence or willful misconduct in connection with its performance of any covenant or agreement applicable to the Company contained in this Agreement (including the performance of the Services), including any personal injury, death, or damage to tangible personal or real property; 25 + + + + + +(d) taxes assessed or claimed against any of the Allscripts Indemnified Persons that are obligations of the Company in connection with this Agreement or which result from the breach of this Agreement by the Company; + +(e) any damage caused to any third party's IT environment by Company or any Developer App (as defined in the Restated Development Agreement) or + +(f) any Claims that any Developer App, the Installed Software, Subscription Software Services or Merchant Processing Services, Documentation, Marketing Materials, the Company Marks, or Services, or any use, promotion, marketing, distribution, sale, service, or delivery thereof, infringe, misappropriate, or violate any Intellectual Property or other rights of a third party, including any damages suffered by Sublicensed Customers as a result thereof for which Allscripts is liable, including any refunds of fees paid by Sublicensed Customers for use of such infringing materials. + +22.2 Infringement Remedy. + +(a) In the event of a Claim that the Installed Software, Subscription Software Services or Merchant Processing Services, Documentation, Company Marketing Materials, or Services, or any use, promotion, marketing, distribution, sale, service, or delivery thereof, infringe, misappropriate, or violate any Intellectual Property of a third party, or if any use of any of the Installed Software, Subscription Software Services or Merchant Processing Services, the Documentation, Company Marketing Materials, or the Services (or any respective component thereof) is enjoined, threatened to be enjoined, or is otherwise the subject of such a Claim, [***]. + +(b) [***]. + +(c) [***]. + +22.3 Indemnification by Allscripts. Subject to the provisions of this Section 22, Allscripts agrees to defend the Company and its Representatives, and all of such Persons' successors and assigns (collectively, the "Company Indemnified Persons"), from and against any and all third party Claims, and indemnify and hold the Company Indemnified Persons harmless from and against any and all Losses incurred or sustained by the Company Indemnified Persons, or any of them, directly or indirectly, in connection with or to the extent such Claim and related Loss is a result of any of the following: + +(a) Allscripts' breach of any representation, warranty, covenant, or obligation of Allscripts under this Agreement or the Restated Developer Agreement; + +(b) any violation of applicable Law by Allscripts, or by Allscripts' Affiliates, Allscripts Resellers, and Partnering Organizations solely in connection with this Agreement; + +(c) any gross negligence or willful misconduct in connection with its performance of any covenant or agreement applicable to Allscripts or to Allscripts' Affiliates, Allscripts Resellers, and Partnering Organizations contained in this Agreement, including any personal injury, death, or damage to tangible personal or real property; or + +(d) any claim that the SDK (as defined in the Restated Developer Agreement), the Associated Allscripts Software (as defined in the Restated Developer Agreement) Allscripts Marks or any Allscripts products or services infringe, misappropriate, or violate any Intellectual Property of a third party; or 26 + + + + + +(e) taxes assessed or claimed against any of the Company Indemnified Persons that are obligations of Allscripts, Allscripts' Affiliates, Allscripts Resellers, or Partnering Organizations in connection with this Agreement, or which result from the breach of this Agreement by Allscripts, Allscripts' Affiliates, Allscripts Resellers, or Partnering Organizations. + +22.4 Indemnification Procedure. + +(a) A Person seeking defense and indemnification under this Section 22.4 (the "Indemnified Person") will promptly notify the Party from whom defense and indemnification is being sought (the "Indemnifying Party") in writing, describing the circumstances, in reasonable detail, for which it seek defense and indemnification. + +(b) Upon notice of a Claim, the Indemnifying Party will [***] assume the investigation and defense of such Claim, and, in connection therewith, will employ counsel of national reputation of its own choosing [***]. At the Indemnifying Party's request and expense, the Indemnified Person will provide reasonable cooperation in connection with the investigation and defense of such Claim; [***]. The Indemnified Person may also participate in and observe (but not control) the investigation and defense of such Claim, [***] and with counsel of its choosing. + +(c) If the Indemnifying Party fails to defend a Claim hereunder within a reasonable amount of time after receiving notice thereof, the Indemnified Person will have the right, but not the obligation, and without waiving and of its other rights hereunder, to undertake the defense of and to compromise or settle such Claim, on behalf of [***] of the Indemnifying Party. + +(d) [***]. + +(e) An Indemnified Person's failure to perform any obligations under this Section 22.4 will not diminish an Indemnifying Party's obligations hereunder, except to the extent that the Indemnifying Party can demonstrate that it has been materially prejudiced as a result of such failure. + +(f) [***]. + +[***]. + +22.5 Limitations. The Company's obligations to provide defense and indemnity pursuant to this Section 22 will be reduced to the extent that the Claim or Loss was caused by (a) the Indemnified Person's creation of modifications to the Installed Software, Subscription Software Services, Developer App, Merchant Processing Services, Documentation, Company Marketing Materials, or Services, unless such modifications (i) were authorized in writing by the Company or were otherwise directed in writing or caused by the Indemnifying Party or (ii) were contemplated and permitted as a feature of any of the Installed Software or Subscription Software Services or Merchant Processing Services, and in each case solely to the extent such Claim would not have occurred but for such modifications; (b) the Indemnified Person's failure to use updates or corrections made available by the Indemnifying Party, but solely to the extent such Claim would not have occurred if such updates or corrections had been used; or (c) the operation of Allscripts' products or services or the combination or use of the Installed Software, Developer App, Subscription Software Services or Merchant Processing Services or Services in conjunction with Allscripts' products or services (unless directed in writing or caused by the Company), if such Claim would not have arisen but for such combination or use, and except to the extent arising from any combination performed by or on behalf of the Company in connection with the Services. 27 + + + + + +23. Limitation of Liability. + +23.1 Limitation of Liability. + +(a) EXCEPT AS OTHERWISE SET FORTH IN SECTION 23.2, IN NO EVENT WILL ANY PARTY BE LIABLE UNDER THIS AGREEMENT FOR ANY LOST PROFITS OR FOR ANY CONSEQUENTIAL, INCIDENTAL, INDIRECT, EXEMPLARY, SPECIAL, OR PUNITIVE DAMAGES, REGARDLESS OF WHETHER SUCH PARTY HAS BEEN NOTIFIED OF THE POTENTIAL FOR SUCH DAMAGES, OR WHETHER SUCH DAMAGES WERE REASONABLY FORESEEABLE, OR WHETHER ANY CLAIM FOR RECOVERY IS BASED ON THEORIES OF CONTRACT, TORT, OR OTHERWISE. [***]. + +(b) EXCEPT AS OTHERWISE SET FORTH IN SECTION 23.2, THE TOTAL CUMULATIVE LIABILITY OF EITHER PARTY FOR ANY AND ALL CLAIMS AND DAMAGES UNDER THIS AGREEMENT, WHETHER ARISING BY STATUTE, CONTRACT, TORT OR OTHERWISE, WILL NOT EXCEED THE FEES PAID BY ALLSCRIPTS TO COMPANY HEREUNDER DURING THE [***] PRECEDING THE EVENT GIVING RISE TO THE CLAIM. THE PROVISIONS OF THIS AGREEMENT ALLOCATE RISKS BETWEEN THE PARTIES. THE PRICING SET FORTH HEREIN REFLECTS THIS ALLOCATION OF RISK AND THE LIMITATION OF LIABILITY SPECIFIED HEREIN. + +23.2 Exceptions. The limitations in Section 23.1(a) will not apply to (a) losses arising out of or relating to a Party's breach of its obligations in Section 8 (excluding Section 8.4(g)) or Sections 1.1, 1.2, 1.4, 1.6 or 6.1 of the Restated Developer Agreement, (b) losses arising out of a Party's breach of Section 19 or the Business Associate Agreement (c) losses arising from a Party's gross negligence or more culpable conduct, including any willful misconduct or intentionally wrongful acts; (d) losses for death, bodily injury, or damage to real or tangible personal property arising out of or relating to a Party's negligent or more culpable acts or omissions or (e) a Party's obligation to pay attorneys' fees and other costs pursuant to Section 28.9(e). The limitations in Section 23.1(b) will not apply to (a) losses arising out of or relating to a Party's breach of its obligations in Section 8 (excluding Section 8.4(g)) or Sections 1.1, 1.2, 1.4, 1.6 or 6.1 of the Restated Developer Agreement, (b) losses arising out of a Party's breach of Section 19 or the Business Associate Agreement; (c) a Party's indemnification obligations under Sections 22.1(b) through 22.1(e) or Sections 22.3(b) through 22.3(e); (d) losses arising from a Party's gross negligence or more culpable conduct, including any willful misconduct or intentionally wrongful acts; (e) losses for death, bodily injury, or damage to real or tangible personal property arising out of or relating to a Party's negligent or more culpable acts or omissions; or (f) a Party's obligation to pay attorneys' fees and other costs pursuant to Section 28.9(e). In addition, the limitations in Section 23.1(b) will not apply (1) to Company's indemnification obligations under Section 22.1(a) or (2) Allscripts indemnification obligations under Section 22.3(a), unless the Company's or Allscripts' indemnification obligation under Section 22.1(a) or 22.3(a), as the case may be, relates to the losses and obligations described in subclauses (a) through (f) of the preceding sentence. [***]. + +23.3 Essential Basis. THE DISCLAIMERS, EXCLUSIONS, AND LIMITATIONS OF LIABILITY SET FORTH IN THIS AGREEMENT FORM AN ESSENTIAL BASIS OF THE BARGAIN BETWEEN THE PARTIES AND, ABSENT ANY OF SUCH DISCLAIMERS, EXCLUSIONS, OR LIMITATIONS OF LIABILITY, THE PROVISIONS OF THIS AGREEMENT, INCLUDING THE ECONOMIC TERMS, WOULD BE SUBSTANTIALLY DIFFERENT. THE DISCLAIMERS, EXCLUSIONS, AND LIMITATIONS OF LIABILITY SET FORTH IN THIS AGREEMENT WILL APPLY TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, EVEN IF ANY REMEDY FAILS ITS ESSENTIAL PURPOSE. 28 + + + + + +24. Term. + +24.1 Term. The initial term of this Agreement commences on the Effective Date and will continue in effect until five (5) year(s) from such date (the "Initial Term") unless terminated earlier pursuant to Section 25. + +24.2 Renewal. Unless this Agreement is terminated pursuant to Section 25, this Agreement will automatically renew for additional successive [***] terms (each a "Renewal Term" and together with the Initial Term, the "Term") unless and until either Party provides written notice of non-renewal to the other Party at least [***] prior to the end of the then-current Term. 25. Termination. + +25.1 Termination for Convenience. [***]. + +25.2 Termination for Cause. Either Party may terminate this Agreement, immediately upon written notice to the other Party, if the other Party materially breaches this Agreement and such breach (a) is incapable of cure or (b) being capable of cure, remains uncured [***] after the breaching Party receives written notice from the non-breaching Party thereof. + +25.3 Termination for Insolvency. Either Party may terminate this Agreement, immediately upon written notice to the other Party, if the other Party (a) becomes insolvent or admits inability to pay its debts generally as they become due; (b) becomes subject, voluntarily or involuntarily, to any proceeding under any domestic or foreign bankruptcy or insolvency Law, which is not fully stayed within [***] or is not dismissed or vacated within [***] after filing; (c) is dissolved or liquidated or takes any action for such purpose; (d) makes a general assignment for the benefit of creditors; or (e) has a receiver, trustee, custodian, or similar agent appointed by order of any court of competent jurisdiction to take charge of or sell any portion of its property or business (and such appointment is not discontinued within [***] thereafter). + +25.4 Termination for Force Majeure. Subject to Section 15.2, either Party may terminate this Agreement, immediately upon written notice to the other Party, if a Force Majeure Event affecting the other Party's performance of its obligations hereunder continues substantially uninterrupted for a period of [***] or more. + +25.5 Termination for Exclusion/Termination of Merchant Processing Services. [***]. + +25.6 Termination for Change of Control. [***]. + +25.7 Effect of Expiration or Termination. + +(a) The expiration or termination of this Agreement will not have the effect of terminating any Customer Agreement, Merchant Agreement (or the licenses to the Installed Software or Subscription Software Services distributed thereunder) or agreement directly between [***]. + +(b) Upon expiration or termination of this Agreement, except in connection with the rights and obligations set forth in this Section 25.7, Allscripts will immediately (i) cease all use of the Company Marks and all marketing and sales-related efforts with respect to the Installed Software, Subscription Software Services or Merchant Processing Services and the Services; (ii) discontinue all representations or statements from which it might be inferred that any relationship exists between the Parties; (iii) cease to solicit or procure orders for the Subscription Software Services or Merchant Processing Services, Installed Software, Merchant Processing Services or the Services; and (iv) return all copies of the Documentation, and related materials and copies thereof, to the Company; provided, however, that Allscripts may retain a reasonable number of copies of the Documentation and related materials in order to fulfill its obligations under this Agreement and the Customer Agreements. 29 + + + + + +(c) Upon expiration or termination of this Agreement, the Company will (i) provide reasonable cooperation and assistance to Allscripts, at Allscripts' written request and to the extent necessary to fulfill any continuing obligations under this Agreement, in transitioning the terminated Support Services to an alternative service provider; and [***]. + +(d) Subject to the foregoing paragraphs of this Section 25.7, upon expiration or termination of this Agreement, [***]. 26. Change of Control. + +26.1 Competing Providers. This Section 26 will only apply in the event of a Change of Control to a Competing Provider or its Affiliate. + +26.2 Removal of Data. [***]. + +26.3 De-identified Data. As of the consummation of a Competitive Change of Control, [***]. + +26.4 No Obligation. As of the consummation of a Competitive Change of Control, Allscripts will be under no obligation to provide the Company (or, for the avoidance of doubt, any Company Acquiror or Competing Provider) with any Data, except Data necessary for Company to fulfill its obligations under its Merchant Agreements with such customers and to fulfill any of its obligations hereunder for the duration of the applicable Customer Agreements. + +26.5 Support. Notwithstanding anything in this Agreement to the contrary, as of the consummation of a Competitive Change of Control, Allscripts will have the right, in its sole discretion, to assume the provision of Level 1 Support Services to Sublicensed Customers and to become the first direct point of contract for each Sublicensed Customer for support and maintenance matters hereunder. A Competitive Change of Control will not release the Company from any of its obligations under this Agreement, including its obligations to provide Support Services. 27. Survival. + +27.1 Survival. The provisions of Sections 1, 2.5-2.7, 8.4-8.6, 8.8, 16.8, 18-25, 27, and 28 and Exhibit E (Business Associate Agreement), Exhibit F (Buy Rates and Revenue Share) and Exhibit H (List of Legacy Customers) will survive and continue after the expiration or termination of this Agreement indefinitely. The provisions of the Restated Developer Agreement set forth in its "Survival" provision will survive the expiration or termination of the Restated Developer Agreement or this Agreement indefinitely. The provisions of Sections 2.1(c)-(d), 2.3, 4.2, 4.3, 8.1-8.3, 8.7, 10, 11.3, and 12-17 (excluding Sections 14.4 and 17.4, each of which will survive for the duration set forth therein; and Sections 14.6, 16.1 and 16.8), Exhibit C (Services) and Exhibit D (Service Level Agreement) will survive and continue after the expiration or termination of this Agreement for the full duration of any Customer Agreement. In addition, the rights and obligations of any Party which, by their nature, extend beyond the expiration or termination of this Agreement will continue in full force and effect notwithstanding the termination of this Agreement. 30 + + + + + +28. Miscellaneous. + +28.1 Relationship of the Parties. The relationship between the Parties is that of independent contractors. Nothing contained in this Agreement will be construed as creating any agency, partnership, joint venture, or other form of joint enterprise, employment, or fiduciary relationship between the Parties. Neither Party will have authority to contract for or bind the other Party in any manner whatsoever, except as expressly set forth in this Agreement. + +28.2 Notices. All notices, requests, consents, claims, demands, waivers, and other communications hereunder will be in writing and addressed to a Party at the address set forth under such Party's name on the signature page hereto (or as otherwise specified by a Party in a notice given in accordance with this Section 28.2). Notices sent in accordance with this Section 28.2 will be deemed effectively given: (a) when received, if delivered by hand (with written confirmation of receipt); or (b) when received, if sent by a nationally recognized overnight courier (receipt requested). + +28.3 Interpretation. For purposes of this Agreement, (a) the words "include," "includes," and "including" will be deemed to be followed by the words "without limitation"; (b) the word "or" is not exclusive; and (c) the words "herein," "hereof," "hereby," "hereto," and "hereunder" refer to this Agreement as a whole. Unless the context otherwise requires, references herein: (i) to Sections and Exhibits refer to the sections of, and exhibits attached to, this Agreement; (ii) to an agreement, instrument, or other document means such agreement, instrument, or other document as amended, supplemented, and modified from time to time to the extent permitted by the provisions thereof; and (iii) to a statute means such statute as amended from time to time and includes any successor legislation thereto and any regulations promulgated thereunder. This Agreement will be construed without regard to any presumption or rule requiring construction or interpretation against the Party drafting an instrument or causing an instrument to be drafted. The Exhibits referred to herein will be construed with, and as an integral part of, this Agreement to the same extent as if they were set forth verbatim herein. The headings in this Agreement are for reference only and will not affect the interpretation of this Agreement. + +28.4 Assignment. Neither Party may assign or otherwise transfer any of its rights, or delegate or otherwise transfer any of its obligations or performance, under this Agreement, in each case whether voluntarily or involuntarily, without the other Party's prior written consent, which will not be unreasonably withheld, conditioned, or delayed. Any assignment, delegation, or other transfer without such prior written consent will be null and void. Notwithstanding the foregoing (and subject to Section 25 and 26) either Party may assign this Agreement without the consent of the other Party as part of a corporate reorganization, consolidation, merger, or sale of all or substantially all of its assets or business to which this Agreement relates. This Agreement is binding upon and inures to the benefit of the Parties and their respective permitted successors and assigns. + +28.5 No Third Party Beneficiaries. This Agreement is for the sole benefit of the Parties, their respective permitted successors and assigns, and the Persons indemnified in Section 22, and nothing herein, express or implied, is intended to or will confer on any other Person any legal or equitable right, benefit, or remedy of any nature whatsoever under or by reason of this Agreement. + +28.6 Amendment and Modification; Waiver. This Agreement may only be amended, modified, or supplemented by an agreement in writing signed by each Party. No waiver by any Party of any of the provisions hereof will be effective unless explicitly set forth in writing and signed by the Party so waiving. Except as otherwise set forth in this Agreement, no failure to exercise, or delay in exercising, any right, remedy, power, or privilege arising from this Agreement will operate or be construed as a waiver thereof; nor will any single or partial exercise of any right, remedy, power, or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power, or privilege. 31 + + + + + +28.7 Severability. If any provision of this Agreement or the application thereof to any Party or circumstances is declared void, illegal, or unenforceable, then the remainder of this Agreement will be valid and enforceable to the extent permitted by applicable Law. In such event, the Parties will use their reasonable efforts to replace the invalid or unenforceable provision by a provision that, to the extent permitted by applicable Law, achieves the purposes intended under the invalid or unenforceable provision. + +28.8 Governing Law. This Agreement will be governed by and construed in accordance with the Laws of the State of Illinois applicable to agreements made and to be performed wholly within that State without regard to its conflicts of laws provisions. + +28.9 Dispute Resolution. + +(a) Except as expressly permitted in Section 28.9(f), neither Party will initiate an arbitration of any dispute hereunder unless (i) such Party has provided the other Party with written notice of that dispute with reasonable specificity and attempted in good faith to resolve that dispute through negotiations; (ii) despite such efforts, the dispute remains unresolved [***] after receipt of that notice; and (iii) such initiation is in accordance with this Section 28.9. + +(b) Subject to the foregoing, any dispute arising out of, relating to, or in connection with this Agreement which cannot be settled amicably will be finally resolved by arbitration in accordance with the International Institute for Conflict Prevention and Resolution (CPR) Rules for Non-Administered Arbitration by a panel of three arbitrators, of which each Party will designate one arbitrator in accordance with the "screened" appointment procedure provided in Rule 5.4 thereof. The arbitration will be governed by the Federal Arbitration Act, 9 U.S.C. sec. 1 et seq. Arbitration awards will be final and binding upon the Parties, and judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof. The place of the arbitration will be Chicago, Illinois. All aspects of the arbitration and any award will be confidential (subject to the exceptions set forth in Section 19.3). + +(c) The arbitrators will have the authority to grant any equitable and legal remedies that would be available in any judicial proceeding instituted to resolve a dispute; provided, however, that the arbitrators will have no power or authority to award damages that would be inconsistent with Section 23 of this Agreement. + +(d) In any arbitration under this Section 28.9, the arbitrators will set a limited time period and establish procedures designed to reduce the cost and time for discovery while allowing each Party to such dispute an opportunity, adequate in the sole judgment of the arbitrators, to discover relevant information from the other Party about the subject matter of the dispute. The arbitrators will rule upon motions to compel or limit discovery and will have the authority to impose sanctions for discovery abuses, including attorneys' fees and costs, to the same extent as a competent court of law or equity, should the arbitrators determine that discovery was sought without substantial justification or that discovery was refused or objected to without substantial justification. + +(e) Each Party will pay its own costs and expenses (including counsel fees) of any arbitration; provided, however, that the Parties will equally share the fees and expenses of the arbitrators; provided, further, that in the event any action, suit, arbitration, or other proceeding is instituted or commenced by either Party against the other Party arising hereunder, the prevailing Party will be entitled to recover its reasonable attorneys' fees, court costs, and costs of arbitration from the non-prevailing Party (it being agreed that the arbitrators and/or judge may eliminate or reduce such recovery on the grounds that it is unreasonable or disproportionate to the harm suffered). 32 + + + + + +(f) Notwithstanding anything else in this Section 28.9 to the contrary, either Party may apply to a court of competent jurisdiction for a temporary restraining order, preliminary injunction, or other interim or conservatory relief, as necessary. For such purpose, each Party irrevocably consents to the exclusive jurisdiction and venue of any Federal court within Cook County, Illinois, and waives and covenants not to assert or plead any objection which it might otherwise have to such jurisdiction and venue. + +28.10 Waiver of Jury Trial. EACH PARTY HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR THE SUBJECT MATTER HEREOF. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL- ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS AGREEMENT, INCLUDING CONTRACT CLAIMS, TORT CLAIMS (INCLUDING NEGLIGENCE), AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. + +28.11 Equitable Relief. Each Party acknowledges that a breach by a Party of this Agreement may cause the non-breaching Party immediate and irreparable harm, for which an award of damages may not be adequate compensation and agrees that notwithstanding Section 28.9(b), in the event of such breach or threatened breach, the non-breaching Party will be entitled to seek equitable relief, including in the form of orders for preliminary or permanent injunction, specific performance, and any other relief that may be available from any court of competent jurisdiction or the arbitration panel, provided that following the formation of the arbitration panel pursuant to Section 28.9(b), such relief will only be sought from the arbitration panel. The Parties hereby waive any requirement for the securing or posting of any bond in connection with such relief. Such remedies will not be deemed to be exclusive but will be in addition to all other remedies available under this Agreement, at law or in equity, subject to any express exclusions or limitations in this Agreement to the contrary. + +28.12 Counterparts. This Agreement may be executed in counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument. Counterparts may be delivered by facsimile, electronic mail (including .pdf or any electronic signature complying with the U.S. Federal ESIGN Act of 2000) or other transmission method, and any counterpart so delivered will be deemed to have been duly and validly delivered and be valid and effective for all purposes. + +28.13 Entire Agreement. This Agreement, together with all Exhibits, and the BAA, constitutes the sole and entire agreement between the Parties with respect to the subject matter hereof, and supersedes all prior and contemporaneous understandings and agreements, both written and oral, with respect to such subject matter, including, without limitation, the Developer Agreement. [***]. + +[Signature Page Follows] 33 + + + + + +IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective Date. Allscripts Healthcare, LLC Phreesia, lnc. + +By: /s/ Richard Elmore By: /s/ Thomas Altier Name: Richard Elmore Name: Thomas Altier Title: SVP Title: CFO + +Address for Notices: Address for Notices: + +[***] [***] + +Attention: SVP, Corporate Development and Strategy Attn: Chief Executive Officer + +With a copy (which will not constitute notice) to: With a copy (which will not constitute notice) to: + +[***] [***] + +Attention: General Counsel Attn: Chief Financial Officer + +Signature Page to Strategic Alliance Agreement + + + + + +EXHIBIT A + +Description of Eligibility Benefits Services, POS Dashboard, Phreesia Patient Intake Management Offering and Merchant Processing Services + +[***] + + + + + +EXHIBIT B + +Product Development Plan + +[***] + + + + + +EXHIBIT C + +Services + +[***] + + + + + +EXHIBIT D + +Service Level Agreement + +[***] + + + + + +EXHIBIT E + +Form of HIPAA Business Associate Agreement + +[***] + + + + + +EXHIBIT F + +Buy Rates and Revenue Share + +[***] + + + + + +EXHIBIT G + +Amended and restated Allscripts Developer Program Agreement + +[***] + + + + + +EXHIBIT H + +List of Legacy Customers + +[***] + + + + + +EXHIBIT I + +Company's Trademark Use Guidelines and Instructions + +[***] + + + + + +EXHIBIT J + +Merchant Agreement + +[***] + + + + + +EXHIBIT K + +Merchant Application + +[***] + + + + + +EXHIBIT L + +Disaster Recovery Plan + +[***] \ No newline at end of file diff --git a/full_contract_txt/PLAYAHOTELS_RESORTSNV_03_14_2017-EX-10.22-STRATEGIC ALLIANCE AGREEMENT (Hyatt Ziva Cancun).txt b/full_contract_txt/PLAYAHOTELS_RESORTSNV_03_14_2017-EX-10.22-STRATEGIC ALLIANCE AGREEMENT (Hyatt Ziva Cancun).txt new file mode 100644 index 0000000000000000000000000000000000000000..52b65a8b45ef720cbf8b116b7aad95638eb44839 --- /dev/null +++ b/full_contract_txt/PLAYAHOTELS_RESORTSNV_03_14_2017-EX-10.22-STRATEGIC ALLIANCE AGREEMENT (Hyatt Ziva Cancun).txt @@ -0,0 +1,139 @@ +Exhibit 10.22 + +STRATEGIC ALLIANCE AGREEMENT + +(Hyatt Ziva Cancun) + +THIS STRATEGIC ALLIANCE AGREEMENT (the "Agreement") is made and entered into as of December 14, 2016 (the "Effective Date"), by and between Hyatt Franchising Latin America, L.L.C., a limited liability company organized and existing under the laws of the State of Delaware (U.S.A.) with its principal place of business located at 71 South Wacker Drive, Chicago, Illinois 60606, U.S.A. ("Hyatt"), and Playa Hotels & Resorts, B.V., a private limited liability company organized and existing under the laws of the Netherlands with its registered address at Prins Bernhardplein 200, 1097 JB Amsterdam, the Netherlands ("Playa"). Hyatt and Playa are each referred to as a "Party" and collectively as the "Parties." + +R E C I T A L S: + +WHEREAS, Hyatt and Playa are parties to that certain Master Development Agreement dated as of August 9, 2013 (as amended, the "Master Development Agreement") under which Hyatt granted Playa the exclusive (to the extent set forth therein) right, provided that Playa met certain conditions, to develop all-inclusive resorts under either or both of the Hyatt Ziva® or Hyatt Zilara® brands and other aspects of the proprietary system owned by Hyatt or its affiliates ("Hyatt All-Inclusive Resorts") in the countries of Mexico, Costa Rica, the Dominican Republic, Jamaica and Panama, as their boundaries exist as of the Effective Date (the "Market Area"); and + +WHEREAS, simultaneously with signing this Agreement, Hyatt and Playa or its affiliates are terminating the Master Development Agreement and signing amendments to the following franchise agreements (collectively, the "Existing Franchise Agreements") covering the following Hyatt All-Inclusive Resorts: + + • Franchise Agreement dated as of August 9, 2013, amended and restated on January 31, 2014 between Hyatt and Playa Hall JamaicanResort Limited for the operation of the Hyatt Ziva/Zilara® resort at 1 Ritz-Carlton Drive, Rose Hall, Montego Bay, Jamaica + + • Franchise Agreement dated as of August 9, 2013, amended and restated on January 31, 2014 between Hyatt and Playa Cabos Baja, S. DeR.L. De C.V. for the operation of the Hyatt Ziva® resort at Paseo de Malecón I-5 D, San José del Cabo, 23405, Mexico + + • Franchise Agreement dated as of August 9, 2013, amended and restated on January 31, 2014 between Hyatt and Cameron Del Pacifico S. De R.L. De C.V. for the operation of the Hyatt Ziva® resort at Carretera Barra de Navidad Km. 3.5, Zona Hotelera, 48300, Puerto Vallarta, Jalisco, Mexico + + • Franchise Agreement dated as of August 9, 2013, amended and restated on January 31, 2014 between Hyatt and Cameron Del Caribe S. De R.L. De C.V. for the operation of the Hyatt Ziva® resort at Blvd. Kukulkan Km 9.5, Zona Hotelera, Punta Cancún, 77500, Cancún, Quintana Roo, Mexico + + + + + + • Franchise Agreement dated as of August 9, 2013, amended and restated on January 31, 2014 between Hyatt and The Royal Cancun S. De R.L. De C.V. for the operation of the Hyatt Zilara® resort at Blvd. Kukulkan Km 11.5, Zona Hotelera, 77500 Cancún, Quintana Roo, Mexico; and + +WHEREAS, Hyatt and Playa have agreed to terminate the Master Development Agreement and to enter into this Agreement. + +NOW, THEREFORE, in consideration of the mutual covenants and agreements contained in this Amendment and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: + +1. First Offer for Development Opportunities. During the period beginning on the Effective Date and ending on December 31, 2018 (the "Development Term"), each Party (the "Offering Party") agrees to provide to the other Party (the "Receiving Party") a right of first offer with respect to any proposed offer or arrangement, which the Offering Party (or its affiliate) desires to accept, under which the Offering Party or one of its affiliates would acquire the ownership of real property in the Market Area (the "Development Property") on which a Hyatt All-Inclusive Resort would operate (a "Development Opportunity"). + +If the Offering Party is required to offer the Receiving Party a Development Opportunity pursuant to this Section 1, the Offering Party must deliver written notice to the Receiving Party, together with reasonable due diligence information in the Offering Party's possession to enable the Receiving Party to evaluate the Development Opportunity (collectively, the "Offer Notice"). The Receiving Party will have ten (10) business days after receiving the Offer Notice to notify the Offering Party whether the Receiving Party exercises its right of first offer for that Development Opportunity. If the Receiving Party and exercises its right of first offer hereunder, and: + +(a) if the Receiving Party is Playa, then Playa (or its affiliate) and Hyatt's affiliate shall negotiate in good faith the terms of a management agreement and related documents under which Playa (or its affiliate) would manage a Hyatt All-Inclusive Resort on the Development Property (subject to a franchise agreement between Hyatt and the affiliate of Hyatt that would own the Development Property), provided that Hyatt's affiliate acquires the Development Property on terms acceptable to it within sixty (60) days after delivery of the Offer Notice, and + +(b) if the Receiving Party is Hyatt, then Playa or its affiliate shall negotiate in good faith the terms of a franchise agreement and related documents for the operation (and, if applicable, development) of the Hyatt All-Inclusive Resort on the Development Property, provided that Playa's affiliate acquires the Development Property on terms acceptable to it within sixty (60) days after delivery of the Offer Notice. 2 + + + + + +If the Receiving Party declines its right of first offer with respect to any Development Opportunity, or fails to notify the Offering Party of its decision within the ten (10) business-day period described above, or if Hyatt's affiliate or Playa's affiliate (as applicable) fails to acquire the Development Property within the sixty (60)-day period described above, then the right of first offer with respect to that Development Opportunity shall expire, and the Offering Party thereafter may acquire, develop and/or operate (and/or grant any other person or entity the right to acquire, develop and/or operate) an all-inclusive resort or other business on the Development Property without any restriction under this Agreement, subject to any restrictions under any Existing Franchise Agreement or other agreement between Hyatt (or its affiliate) and Playa (or its affiliate). + +2. Introduction to Other Opportunities. If a third party (who is not an affiliate of Hyatt) approaches Hyatt during the Development Term with a proposed offer or arrangement, which Hyatt desires to accept, under which the third party would operate a Hyatt All-Inclusive Resort in the Market Area, and if that third party has not then already designated a management company to operate that Hyatt All-Inclusive Resort, then Hyatt agrees to provide notice to Playa and introduce Playa to that third party for purposes of enabling Playa (at its option) to negotiate for the opportunity to manage that Hyatt All-Inclusive Resort for that third party. Similarly, if a third party (who is not an affiliate of Playa) approaches Playa during the Development Term with a proposed offer or arrangement, which Playa desires to accept, under which Playa or its affiliate would manage an all- inclusive resort in the Market Area for that third party, and if that third party has not then already designated a brand under which that all-inclusive resort would operate, then Playa agrees to provide notice to Hyatt and introduce Hyatt to that third party for purposes of enabling Hyatt (at its option) to negotiate for the opportunity to provide that third party franchise rights to brand that resort as a Hyatt All-Inclusive Resort. + +3. Notices. Any notice required under this Agreement to be given by either Party to the other Party shall be in writing in the English language. Any required notice shall be effective two business days after it is sent by a recognized international courier service to the address of the other Party stated in this Agreement, or such other address as shall be notified to the other Party in writing, and any receipt issued by the courier service shall be conclusive evidence of the fact and date of sending of any such notice. + +Contact details of the Parties are as follows: + +For Hyatt: Hyatt Franchising Latin America Hyatt Hotels Corporation Hyatt Center - 12th Floor 71 South Wacker Drive Chicago, Illinois 60606 U.S.A. Attention: SVP Latin America Development 3 + + + + + +with a copy to: + +Hyatt Hotels Corporation Hyatt Center - 12th Floor 71 South Wacker Drive Chicago, Illinois 60606 U.S.A. Attention: Executive Vice President, General Counsel + +For Playa: + +Playa Hotels & Resorts, B.V. c/o Playa Management USA LLC Playa Hotels & Resorts 1560 Sawgrass Corporate Parkway, Suite 310 Fort Lauderdale, Florida 33323 Attention: General Counsel + +or to such other address and to the attention of such persons as the Parties may designate by like notice hereunder. + +4. Choice of Law. All matters relating to arbitration will be governed by the Federal Arbitration Act (9 U.S.C. Sections 1 et seq.). Except to the extent governed by the Federal Arbitration Act or other federal law, this Agreement and all claims arising from the relationship between Hyatt (and/or any of its Affiliates) and Playa (and/or any of its Affiliates) under this Agreement will be governed by the laws of the State of Illinois (U.S.A.), without regard to its conflict of laws rules, except that any Illinois law or any other law regulating the offer or sale of franchises, business opportunities, or similar interests, or governing the relationship between a franchisor and a franchisee or any similar relationship, will not apply unless its jurisdictional requirements are met independently without reference to this Section 4. + +5. Dispute Resolution. + +(a) All disputes arising out of or in connection with this Agreement shall to the extent possible be settled amicably by negotiation between the Parties within fifteen (15) days from the date of written notice by either Party of the existence of such dispute, and, failing such amicable settlement, shall be finally settled by arbitration under the Rules of Arbitration of the International Chamber of Commerce ("Rules"). To the extent there is any conflict between the Rules and the Federal Arbitration Act as it pertains to such arbitration, the Rules shall prevail. + +(b) The arbitration panel shall consist of: + +(i) one arbitrator in the event the aggregate damages sought by the claimant are stated to be less than Five Hundred Thousand US Dollars (US$500,000), and the aggregate damages sought by the counter-claimant are stated to be less than Five Hundred Thousand US Dollars (US$500,000); or 4 + + + + + +(ii) three arbitrators in the event the aggregate damages sought by the claimant are stated to be equal to or exceed Five Hundred Thousand US Dollars (US$500,000), or the aggregate damages sought by the counterclaimant are stated to be equal to or exceed Five Hundred Thousand US Dollars (US$500,000). + +Each arbitrator (1) shall have no fewer than ten (10) years' experience in the international hotel business, (2) shall be licensed to practice law in the United States, and (3) shall not be a person, or an affiliate of a person, who has any past, present or currently contemplated future business or personal relationship with either Playa, Hyatt or any of their respective affiliates. + +(c) The place of arbitration shall be New York, New York (USA). + +(d) The language to be used in the arbitration shall be English. + +(e) The arbitrator(s) shall have the power to grant any remedy or relief that they deem just and equitable, including injunctive relief, whether interim and/or final, and any provisional measures ordered by the arbitrator(s) may be specifically enforced by any court of competent jurisdiction. Each Party hereto retains the right to seek interim measures from a judicial or other governmental authority, and any such request shall not be deemed incompatible with the agreement to arbitrate or a waiver of the right to arbitrate. + +(f) An arbitral tribunal constituted under this Agreement may, unless consolidation would prejudice the rights of any Party, consolidate an arbitration hereunder with an arbitration under any Franchise Agreement between Hyatt (or its affiliate) and Playa (or its affiliate), if the arbitration proceedings raise common questions of law or fact. If two or more arbitral tribunals under these agreements issue consolidation orders, the order issued first shall prevail. + +(g) The Parties agree that the award(s) shall be binding upon Hyatt and Playa and each Party's parent company or companies (and all other Affiliates), principals, successors, and assigns, and that judgment on the award(s) may be entered in any court of competent jurisdiction, and the Parties waive any personal jurisdiction objections for the purpose of any enforcement proceedings under the 1958 United Nations Convention on the Recognition of Enforcement of Foreign Arbitral Awards. The arbitrator(s) may not award damages in excess of compensatory damages or otherwise in violation of the waiver in this Agreement. + +(h) Any award(s) shall be payable in U.S. Dollars. In the event that monetary damages are awarded, the award(s) shall include interest from the date of default to the date of payment of the award in full. The arbitrator(s) shall fix an appropriate rate of interest, compounded annually, which in no event shall be lower than the prime commercial lending rate charged by Hyatt's primary bank (as Hyatt may designate from time to time), to its most creditworthy commercial borrowers, averaged over the period from the date of the default to the date of the award. 5 + + + + + +(i) Any award(s) rendered by the arbitrator(s) shall be final and binding on the parties, and each party hereby waives to the fullest extent permitted by law any right it may otherwise have under the laws of any jurisdiction to any form of appeal or collateral attack or to seek determination of a preliminary point of law by any courts (including any court within the Market Area or elsewhere). + +(j) The prevailing Party in any arbitration arising out of or related to this Agreement shall be entitled to recover from the losing Party all reasonable fees, costs and expenses incurred by the prevailing Party in connection with such arbitration (including any actions to enforce any award(s) or any of the provisions of this Section 5). If a Party prevails on some, but not all, of its claims, such Party shall be entitled to recover an equitable amount of such fees, costs and expenses as determined by the arbitrator(s). All amounts recovered by the prevailing Party under this Subsection shall be separate from, and in addition to, any other amount included in any award(s) rendered in favor of such Party pursuant to this Section 5. + +(k) Except as may be required by law, neither a Party nor its representatives nor a witness nor an arbitrator may disclose the existence, content, or results of any arbitration or amicable settlement under this Section 5 (collectively, "Dispute Information") without the prior written consent of both Parties. Each Party shall ensure that the Dispute Information is not disclosed to the press or to any other third person or entity without the prior consent of the other Party. The Parties shall coordinate with one another on all public statements, whether written or oral and no matter how disseminated, regarding the Dispute Information. + +6. Entire Agreement. This Agreement constitutes the entire agreement between the Parties with respect to the subject matter of this Agreement and supersedes all prior understandings and writings between the Parties. No Party may rely on any alleged oral or written understandings, agreements, or representations not contained in this Agreement. Any policies that either Party adopts and implements from time to time to guide them in their decision-making are subject to change, are not a part of this Agreement, and are not binding on them. + +7. Representations and Warranties. Each Party represents and warrants that neither the execution of this Agreement nor the completion of the transactions contemplated hereby and thereby will (a) violate any provision of applicable law or any judgment, writ, injunction, order or decree of any court or governmental authority having jurisdiction over it; (b) cause a breach or default under any indenture, contract, other commitment or restriction to which it is a party or by which it is bound; or (c) require any filing, consent, vote or approval which has not been taken, or at the time when the transaction involved shall not have been given or taken. Each Party represents and warrants that as of the date hereof it has the full company power and authority to enter into this Agreement and to perform its respective obligations under this Agreement, and that such Party's execution, delivery and performance of this Agreement have been duly authorized by all necessary action on the part of such Party. + +8. Amendment. The provisions of this Agreement shall not be supplemented or amended except by an instrument in writing executed and delivered by both Parties. 6 + + + + + +9. Waiver. Failure of either Party at any time to require the performance by the other Party of any provision hereof shall in no way affect the full right to require such performance at any time thereafter. Hyatt and Playa will not waive or impair any right, power, or option this Agreement reserves because of any custom or practice that varies from this Agreement's terms; Hyatt's or Playa's failure, refusal, or neglect to exercise any right under this Agreement or to insist upon the other's compliance with this Agreement; Hyatt's or Playa's waiver of or failure to exercise any right, power, or option, whether of the same, similar, or different nature, with other Hyatt All-Inclusive Resorts or any other agreements between the parties and/or their affiliates; or Hyatt's or Playa's acceptance of any payments due from the other Party after any breach of this Agreement (unless such payments are made within any applicable cure periods). + +10. Binding Effect. This Agreement shall inure to the benefit of and bind the permitted assignees, successors and representatives of the Parties, except that no assignment, transfer, pledge, mortgage or lease by or through either Party in violation of the provisions of this Agreement shall vest any rights in the assignee, transferee, mortgagee, pledgee, or lessee, as the case may be. + +11. Severability. If any provision of this Agreement shall be determined to be void, illegal, or unenforceable under the law, all other provisions of this Agreement shall continue in full force and effect. The Parties are, in this event, obligated to replace the void, illegal or unenforceable provision with a valid, legal and enforceable provision which corresponds as far as possible to the spirit and purpose of the void, illegal, or unenforceable provision. + +12. Language and Counterparts. This Agreement may be executed in any number of counterparts, all of which, taken together, shall constitute one and the same agreement and a Party may enter into this Agreement by executing a counterpart. This Agreement is executed in the English language, which shall prevail over any translation. + +13. No Representation Regarding Forecasts. In entering into this Agreement, Hyatt and Playa acknowledge that neither Playa nor Hyatt has made any representation to the other regarding forecasted earnings, the probability of future success or any other similar matter respecting the business contemplated under this Agreement and that Hyatt and Playa understand that no guarantee is made to the other as to any amount of income to be received by Hyatt or Playa or as to the future financial success of the business contemplated under this Agreement. + +14. Waiver of Non-compensatory Damages. In any action or proceeding between the Parties (including any arbitration proceeding) arising under or with respect to this Agreement or in any manner pertaining to the Hyatt All-Inclusive Resorts or to the relationship of the Parties under this Agreement, each Party hereby unconditionally and irrevocably waives and releases any right, power or privilege either may have to claim or receive from the other Party any punitive or exemplary damages, each Party acknowledging and agreeing that the remedies herein provided and other remedies at law or in equity will in all circumstances be adequate. Both Parties acknowledge that they are experienced in negotiating agreements of this sort, and have had the advice of counsel in connection with, and fully understand the nature of, the waiver contained in this Section 14. 7 + + + + + +15. Corrupt Practices. Neither Party, nor any person acting for or on behalf of such Party, shall make, and each Party acknowledges that the other Party will not make, any expenditure for any unlawful purposes (i.e. unlawful under the laws or regulations of the United States, the European Union or the Market Area) in the performance of its obligations under this Agreement or in connection with its activities in relation thereto. Neither Party, nor any person acting for or on behalf of such Party, shall, and each Party acknowledges that the other Party will not, bribe or offer to bribe any government official, any political party or official thereof, or any candidate for political office, for the purpose of influencing any action or decision of such person in their official capacity or any governmental authority of any jurisdiction. + +IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Amendment on the day and year first above written. HYATT FRANCHISING LATIN AMERICA, L.L.C. PLAYA HOTELS & RESORTS B.V. + +By: /s/ Peter Sears By: /s/ Bruce D. Wardinski Name: Peter Sears Name: Bruce D. Wardinski Title: President Title: Executive Director 8 \ No newline at end of file diff --git a/full_contract_txt/PRECIGEN,INC_01_22_2020-EX-99.1-JOINT FILING AGREEMENT.txt b/full_contract_txt/PRECIGEN,INC_01_22_2020-EX-99.1-JOINT FILING AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..31e2a22951428a5486f55ea199f7ea73ccc0dce9 --- /dev/null +++ b/full_contract_txt/PRECIGEN,INC_01_22_2020-EX-99.1-JOINT FILING AGREEMENT.txt @@ -0,0 +1 @@ +Exhibit 99.1 JOINT FILING AGREEMENT Additional Reporting Person (a): Merck Serono SA Address: Zone Industrielle 1267 Coinsins, Switzerland Additional Reporting Person (b): Merck KGaA Address: Frankfurter Str. 250 64293 Darmstadt, Germany Designated Filer: Ares Trading SA Issuer and CUSIP: Intrexon Corporation (46122T102) Dated: January 7, 2019 ARES TRADING SA ARES TRADING SA By: /s/ Cédric Hyde By: /s/ Luigia Bocola Name: Cédric Hyde Name: Luigia Bocola Title: CFO Title: Finance Manager MERCK SERONO SA, COINSINS, SWITZERLAND, AN AFFILIATE OF MERCK KGAA, DARMSTADT, GERMANY MERCK SERONO SA, COINSINS, SWITZERLAND, AN AFFILIATE OF MERCK KGAA, DARMSTADT, GERMANY By: /s/ Cédric Hyde By: /s/ Tearaboth Te Name: Cédric Hyde Name: Tearaboth Te Title: CFO Title: Treasury Director MERCK KGAA, DARMSTADT, GERMANY MERCK KGAA, DARMSTADT, GERMANY By: /s/ Rando Bruns By: /s/ Tim Nielsen Name: Rando Bruns Name: Tim Nielsen Title: Head of Treasury Title: Head of Capital Markets \ No newline at end of file diff --git a/full_contract_txt/PREMIERBIOMEDICALINC_05_14_2020-EX-10.2-INTELLECTUAL PROPERTY AGREEMENT.txt b/full_contract_txt/PREMIERBIOMEDICALINC_05_14_2020-EX-10.2-INTELLECTUAL PROPERTY AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..3824a57140373a89356baa64fb43c6ef57e4d25f --- /dev/null +++ b/full_contract_txt/PREMIERBIOMEDICALINC_05_14_2020-EX-10.2-INTELLECTUAL PROPERTY AGREEMENT.txt @@ -0,0 +1,35 @@ +Exhibit 10.2 INTELLECTUAL PROPERTY AGREEMENT This Intellectual Property Agreement (this "Agreement") is entered into on May 12, 2020 ("Effective Date"), concerning the pursuits set forth herein for the collective development, implementation and commercialization of a potential treatment for the COVID-19 virus and its effects on the human body (collectively referred to herein as the "Joint Venture") by and between: Marv Enterprises, LLC, a Limited Liability Company organized under the laws of the Commonwealth of Pennsylvania ("Marv"), Premier Biomedical, Inc. (OTC Pink: BIEI), a Nevada corporation ("Premier"), Technology Health, Inc. (OTC Pink: HALB), a Colorado corporation f/k/a Halberd Corporation ("THI"), Each shall be referred to as a "Party" and collectively as the "Parties." RECITALS: WHEREAS, Marv is a single member LLC with Dr. Mitchell Felder as the sole member. WHEREAS, Premier is publicly traded on the Pink Sheets, trading symbol BIEI. WHEREAS, THI is publicly traded on the Pink Sheets, trading symbol HALB. WHEREAS, Marv is owner of U.S. Patent 9,216,386 and U.S. Patent 8,758,287 collectively referred to as the "Issued Patents". WHEREAS, Premier has an Exclusive License to the Issued Patents via an Agreement executed by Marv and Premier on May 12, 2010 ("2010 Agreement"). WHEREAS, Marv has subsequently filed numerous patent applications on subject matter related to the Issued Patents which are listed in Appendix A. WHEREAS, Marv and Premier expanded Premier's Exclusive License to include all the Applications listed in Appendix A via a Third Addendum to the 2010 Agreement executed by Marv and Premier on the Effective Date ("2020 Agreement"). WHEREAS, Marv has filed US provisional patent applications specifically related to methods of treatment for Covid-19 as starred in Appendix A (Covid-19 Applications) to which Premier has an exclusive license via the 2020 Agreement. WHEREAS, this Agreement contemplates the development of a methodology for the extracorporeal treatment of a patient's body fluid to treat Covid-19 (Field of Covid-19 Treatment). WHEREAS, the Parties are desirous of collaborating for the creation and distribution of products designed in the Field of Covid-19 Treatment (Covid-19 Licensed Products) WHEREAS, THI is desirous of exclusively licensing the Applications listed in Appendix A; WHEREAS, Premier is willing to assign its rights in the 2010 Agreement/2020 Agreement; WHEREAS, Marv in this Agreement gives its written consent for Premier to assign its rights in the 2010 Agreement/2020 Agreement to THI; NOW, THEREFORE, for good and adequate consideration, the receipt of which is hereby acknowledged, the Parties covenant, promise and agree as follows: 1 + + + + + + AGREEMENT 1. RECITALS. The Recitals are hereby incorporated herein by this reference, as if fully restated herein. 2. LICENSING. To the extent that terms in the 2010 Agreement/2020 Agreement are not contradicted or revised here, the terms as stated in 2010 Agreement/2020 Agreement remain in full effect, are controlling, and apply to THI licensing of the Applications in Appendix A and the Licensed Products derived therefrom. (a) License - THI is granted the following rights to the Applications in Appendix A and the Licensed Products derived therefrom: Scope. The licenses granted herein are exclusive worldwide licenses to: 1. make, have made, use, lease, sell and import Licensed Products for the legal purposes of researching, developing, manufacturing, assembling, distributing, and selling the Licensed Products; 2. make, have made, use and import machines, tools, materials and other instrumentalities, insofar as such machines, tools, materials and other instrumentalities are involved in or incidental to the research, development, manufacture, testing or repair of Licensed Products which are or have been made, used, leased, owned, sold or imported by the Licensee; and 3. convey to any customer of the Licensee, with respect to any Licensed Product which is sold or leased to such customer, rights to use and resell such Licensed Product as sold or leased by Licensee (whether or not as part of a larger combination); provided, however, that no rights may be conveyed to customers with respect to any Invention which is directed to (i) a combination of such Licensed Product (as sold or leased) with any other product, (ii) a method or process which is other than the inherent use of such Licensed Product itself (as sold or leased), or (iii) a method or process involving the use of a Licensed Product to manufacture (including associated testing) any other product. 4. Licenses granted herein are solely for products in the form sold by the Licensee and are not to be construed either (i) as consent by the Marv to any act which may be performed by the Licensee, except to the extent impacted by a patent licensed herein to the Licensee, or (ii) to include licenses to contributorily infringe or induce infringement under U.S. law or a foreign equivalent thereof. 5. The grant of each license hereunder includes the right to grant sublicenses to Related Companies for so long as it remains a Related Companies. Any such sublicense may be made effective retroactively, but not prior to the effective date hereof, nor prior to the sublicensee's becoming a Related Company. (b) Reports and Payments - For the above exclusive licensing rights, THI will pay for various costs associated with this Agreement. The costs listed below are to be hereinafter referred to as the "License Fee", to be paid by and through THI. The use of the License Fee is further broken down below: 1. $20,000, payable to Marv Enterprises, LLC or as it directs, which has already been paid into the account of Marv Enterprises, LLC at the Lynch Law Group 2. The total sum of non-paid invoices (estimated to be approximately $80,000) payable to Marv Enterprises, LLC, previously owed by Premier to Marv up until the effective date of this Agreement, payable in total by no later than July 20, 2020. 3. Reports. a . Within thirty (30) days after the end of each quarterly period ending on March 31st, June 30th, September 30th, or December 31st, commencing with the one-year anniversary of the effective date of this Agreement, THI shall furnish to Marv a statement certified by a responsible official of the Licensee showing in a manner acceptable to Marv: i. all Licensed Products which were sold, leased or put into use during such quarterly period by THI or any of its Related Companies, the gross sales received for the Licensed Products, and the Fair Market Values of such Licensed Products; ii. all services performed by THI or any of its Related Companies that directly or indirectly used Licensed Product, the gross sales received by the services, and the Fair Market Value of such services; 2 + + + + + + iii. the amount of royalty payable thereon, and iv. if no Licensed Product has been so sold, leased or put into use or if no services have been performed, the statement shall show that fact. b. Within such thirty (30) days, THI shall pay in United States dollars to Marv at PO Box 1332, Hermitage, PA 16148, or other address provided by Marv, the royalties payable in accordance with such statement. Any conversion to United States dollars shall be at the prevailing rate for bank cable transfers as quoted for the last day of such quarterly period by leading United States banks in New York City dealing in the foreign exchange market. c. Overdue payments hereunder shall be subject to a late payment charge calculated at an annual rate of three percent (3%) over the prime rate or successive prime rates (as posted in New York City) during delinquency. If the amount of such charge exceeds the maximum permitted by law, such charge shall be reduced to such maximum. (c) THI further agrees to pay Intellectual Property Prosecution and Costs Applications in Appendix A directly to Marv. 1. Costs. THI shall reimburse Marv for all IP Costs incurred on behalf of THI, as well as pre-paid IP Costs incurred prior to the Effective Date of this Agreement, including the costs of provisional and non-provisional applications that are filed to preserve Intellectual Property. Reimbursement for pre-paid IP Costs shall be in accordance with 2 (b) 2 above. 2. Extension of Application. By written notice to Marv and at least ninety (90) days before the non-extendable due date for the filing of a national phase application of an Application, THI shall elect those countries or authorities in which it desires to file a patent application based on the Application. Intellectual Property rights in an unelected country shall revert to Marv. 3. Notice to Licensee. Before payment of any IP Cost, Marv shall notify THI for a time period being the lesser of (i) at least sixty (60) days before the IP Cost is due or (ii) as soon as is practicable after receiving knowledge of the IP Cost. The notice will identify (i) the Application or Patent, (ii) the country, (iii) the reason for the IP Cost, and (iv) the Due Date for payment. THI shall then affirm or deny payment. Affirmation of payment must be received by Marv within fourteen (14) days of the mailing date of the notice or the THI shall be deemed to have denied payment. a. If THI affirms a payment, THI shall reimburse Marv for all IP Costs arising from the payment and shall then retain its license for the Application or Patent in that country. b. If THI denies payment, THI shall have no obligation to pay IP Costs associated with the Application or Patent in that country, but the license and all associated rights for that Application or Patent shall revert to Marv. 4. Reimbursement by Licensee. THI shall prepay Marv for any affirmed IP Cost before payment is to be made by Marv. Marv shall have no duty to pay an IP Cost, whether affirmed or not affirmed, for which Marv does not receive prepayment. If THI does not pay Marv by the Due Date, the Application or Patent shall revert to Marv as if THI had denied payment under section 2(c)3. 5. Reversion of License. If a reversion occurs under this Article, the license in that country in which reversion has occurred will be terminated, and THI shall have no further right in the Application or Patent for that country. The right shall revert to Marv who will then have the right to pursue protection for the reverted Application or Patent. Marv has no further duty to THI for a reverted Application or Patent. 6. Applications. Defines as all applications of the United States and foreign countries, including Patent Cooperation Treaty applications that claim priority to the Applications listed in Appendix A, including any non-provisional applications, continuations, continuations-in-part, divisions, reissues, re-examinations or extensions thereof; and all applications including those applications filed in the United States or applications filed under the Patent Cooperation Treaty on subject matter directly related to the Applications in Appendix A whether or not priority to said applications was claimed. (d) Royalty Payments. 1. Royalty payments are payable from THI to Marv Enterprises, LLC and will be in the amount of 5% of the Fair Market Value of: a. Licensed Product that is sold, leased or put into use by the THI or any Related Companies in the preceding calendar quarter; and b. any service performed by THI or any Related Companies that directly or indirectly uses Licensed Product. 3 + + + + + + 2. This License does not include a minimum annual royalty payable by THI to Marv. 3. Fair Market Value" means, with respect to any Licensed Product sold, leased or put into use, the Selling Price actually obtained in an arm's length transaction for a product comprising a Licensed Product in the form in which the product is sold, whether or not assembled and without excluding any components or subassemblies thereof which are included in such Selling Price. "Selling price" shall exclude: usual trade discounts actually allowed to unaffiliated persons or entities such as packing costs, costs of transportation and transportation insurance, and import, export, excise, sales and value added taxes, and custom duties. 4. In addition to the 5% amount calculated pursuant to the preceding paragraph, there shall be an identical 5% amount to be paid from THI, per Premier's consideration, to certain shareholders of Premier, as identified by Premier, as of a record date to be determined in the future, on an annual basis, commencing on the one-year anniversary of this Agreement until a total amount of $40,000,000 has been paid to Premier. This royalty is separate and distinct from the royalty obligation to Marv as stated in 2(d)1. (e) If THI does not make the obligatory payments as stated in 2(b) by the dates stated, the Exclusive License will revert back to Premier. 3. JOINT VENTURE (a) Premier and THI will jointly cooperate in developing Covid-19 Licensed Products, to be memorialized by them in a Technology Acquisition and Financing Agreement. For the joint venture the following payments will be made by and through THI: 1. $750,000, payable to THI in total by no later than June 20 , 2020. The payment will be for developing fluorescently-conjugated antibodies in the Field of Covid-19 Treatments. 2. $1,150,000, payable to THI in total by no later than July 30, 2020. The payment will be for development of laser technology in the Field of Covid-19 Treatments. 3. $500,000 payable to a subsidiary of THI to be formed in the United Kingdom, for research and development to be performed in the United Kingdom, by and at the direction of Mohammed Zulfiquar and/or Datatechnics Inc. as invoiced by Mohammed Zulfiquar and/or Datatechnics Inc., for expenses and at an hourly rate to Mohammed Zulfiquar and his designees. (b). Premier may partner with other organizations as needed to effectuate the development of technology in the Field of Covid-19 Treatments. (c) Marv will have no direct role in the development of technology in the Field of Covid-19 Treatment or in the Joint Venture. Marv, through its sole member Dr. Mitchell Felder, may from time to time be consulted regarding the development of technology in the Field of Covid-19 Treatment. This consultation will be done solely at Marv's discretion. (d) Premier and THI may execute separate agreements further outlining the conditions of the Joint Venture to effectuate the development of technology in the Field of Covid-19 Treatment. (e) If THI does not make the obligatory payments as stated in 3(a) by the dates stated, the Exclusive License will revert back to Premier, provided, however, that in such event, THI would still be entitled to a proportionate interest in any Covid-19 Licensed Products, such portion being equal to a fraction, the numerator of which shall be the actual amount paid and the denominator of which shall be $2,000,000. 4. NO BROKERAGE FEE. Each Party hereby represents and warrants that there has been no agreement which might cause any other person to become entitled to a finder's fee, a broker's fee or a commission as a result of the transactions contemplated hereunder. 5. REQUIREMENT. The Parties agree that Marv and/or Mitchell S. Felder shall have no obligation and/or involvement in any capital raising activities for THI or Premier at any time and for any reason. Further, the 150,000,000 (one hundred and fifty million) stock warrants previously ceded to Mitchell S. Felder by Halberd/THI shall not be eliminated, cancelled, or altered in any way, and for any reason, unless specifically directed at the request of Mitchell S. Felder. 6. NONEXCLUSIVE ENGAGEMENT; EXTENT OF SERVICES. The Parties agree that the relationship contemplated by this Agreement is a nonexclusive engagement/venture and that each Party now renders and may continue to render consulting services and/or sell or provide products to other companies that may or may not conduct activities similar to those of each other Party. 4 + + + + + + 7. CONFIDENTIALITY. Each Party agrees to hold in confidence confidential information acquired in the course of this relationship with the other Parties and their associates. Each Party agrees to refrain from, either during period of this Agreement or at any other time thereafter, disclosing, using or disseminating such confidential information, for its or another's benefit, in any way acquired in the course of any association arising out of this Agreement. For purposes of this Agreement, confidential information shall include contacts and introductions to third parties and information relating thereto. Confidential information, knowledge or data of a Party and/or its affiliates shall not include any information which is or becomes generally available to the public other than as a result of a disclosure by such Party or its representatives. Confidential information should further include: all information (in whatever form and whether or not marked or otherwise identified as confidential), including financial statements, business plans or records, concepts, marketing studies, projections, sales or pricing information, customer or supplier information, agreements with third parties, Intellectual Property (as defined below) or other data provided by or on behalf of the Disclosing Party to the Recipient and (ii) all notes, analyses, compilations, studies, interpretations or other material prepared by the Recipient or its Representatives which contain or reflect or are based upon, in whole or in part, information furnished by the Disclosing Party pursuant to this Agreement. "Confidential Information" does not include information which (a) is obtained by the Recipient from a third party who is not known to Recipient to be prohibited from transmitting such information to the Recipient, or (b) was already in the Recipient's possession prior to its entry into this Agreement and which is not subject to any restrictions which would prohibit its disclosure to the Recipient in connection with the parties' evaluation of the Transaction or (c) is or becomes generally available to the public other than as a result of a breach of any confidentiality restrictions to the Recipient. "Intellectual Property" shall mean any Confidential Information proprietary to the Disclosing Party and any trademark, service mark, trade name, invention, improvement, discovery, patent, patent application, trade secret, copyright, copyrightable work, trade dress, mask work, computer program or any other type of proprietary intellectual property to which the Disclosing party claims any rights, including any registrations or applications for registration or renewals of any of the foregoing, and all copies and tangible embodiments of the foregoing in whatever form or medium. Confidential information shall also mean any information not generally made available or known to the public and shall include, without limitation, all ideas, inventions, software, documentation, flowcharts, diagrams, improvements, discoveries, research and development, know how, formulas, compositions, manufacturing and production processes and techniques, technical data, designs, drawings, plans, specifications, and all other information or material within the definition of a "trade secret" as set forth in the Uniform Trade Secret Act, or which either party otherwise reasonably considers proprietary. Copies; Return of Confidential Information. The parties may copy or otherwise reproduce any written Confidential Information; provided, however, that all such Confidential Information and copies thereof shall be promptly returned to the Disclosing Party or, at the option of the Disclosing Party, destroyed, upon the Disclosing Party's request, such destruction to be certified in writing. 8. VENUE. This Agreement and the rights of the Parties hereunder shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania including all matters of construction, validity, performance, and enforcement and without giving effect to the principles of conflict of laws. Venue for any action brought under this Agreement shall be in the appropriate court in Mercer County, Pennsylvania. 9. MATERIALITY. The Parties agree and stipulate that each and every term and condition contained in this Agreement is material, and that each and every term and condition may be reasonably accomplished within the time limitations, and in the manner set forth in this Agreement. The Parties agree and stipulate that time is of the essence with respect to compliance with each and every item set forth in this Agreement. 10. AMENDMENTS/BINDING. This Agreement may not be amended or modified except by written agreement subscribed by all of the Parties to be charged with such modification. This Agreement shall be binding upon and shall inure to the benefit of the Parties hereto and their respective partners, employees, agents, servants, heirs, administrators, executors, successors, representatives and assigns. 11. ENTIRE AGREEMENT. This Agreement, along with the exhibits hereto, sets forth the entire agreement and understanding of the Parties hereto and supersedes any and all prior arrangements and understandings related to the subject matter hereof except for as specifically stated in this Agreement with regards to the 2010 Agreement and the 2020 Agreement and licensing rights. No understanding, promise, inducement, statement of intention, representation, warranty, covenant or condition, written or oral, express or implied, whether by statute or otherwise, has been made by any Party hereto which is not embodied in this Agreement or the written statements, certificates, or other documents delivered pursuant hereto or in connection with the transactions contemplated hereby, and no Party hereto shall be bound by or liable for any alleged understanding, promise, inducement, statement, representation, warranty, covenant or condition not so set forth. 12. COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which when executed and delivered shall be an original, and all of which when executed shall constitute one and the same instrument. 13. EXPENSES ASSOCIATED WITH THIS AGREEMENT. Marv shall be reimbursed in full for the cost(s) of all legal expenses associated with this agreement by THI. [remainder of page intentionally left blank; signature page to follow] + +5 + + + + + + IN WITNESS WHEREOF, the Parties hereto, agreeing to be bound hereby, execute this Agreement upon the date first set forth above. Premier Biomedical, Inc.: /s/ William Hartman Date__________ By: William Hartman, CEO Technology Health, Inc.: /s/ James Christopher LeDoux Date___________ By: CEO Marv Enterprises, LLC: /s/ Mitchell Felder Date__________ By: Mitchell Felder + +6 \ No newline at end of file diff --git a/full_contract_txt/PRIMEENERGYRESOURCESCORP_04_02_2007-EX-10.28-COMPLETION AND LIQUIDITY MAINTENANCE AGREEMENT.txt b/full_contract_txt/PRIMEENERGYRESOURCESCORP_04_02_2007-EX-10.28-COMPLETION AND LIQUIDITY MAINTENANCE AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..63f8a809b9efa5a15299aaa38382e1d192c3fd83 --- /dev/null +++ b/full_contract_txt/PRIMEENERGYRESOURCESCORP_04_02_2007-EX-10.28-COMPLETION AND LIQUIDITY MAINTENANCE AGREEMENT.txt @@ -0,0 +1,61 @@ +EXHIBIT 10.23 + +COMPLETION AND LIOUDm MAINTENANCE 4GRFFMFST + +THIS COMPLEHON AGREEMENT AND UQITDITV MAINTENANCE AGREEMENT ( 'Agreement") {5 made and entered into effective as of June 29, 2006 between PRIMEEVERG\'CORPORATION ( Time"), GUARANTY BANK, FSB ('Guaranty") and PRIME OFFSHORELT.C. T: Offshore"! + +Prime is the majority shareholder of Prime Offshore L.L.C. COffshore"! Offshore and Guaranty are parties to a Credit Agreement dated June 29, 2006, by and between Offshore as Borrower and Guaranty, as Agent and Lender i "Credit Agreement'T wherein Guaranty is loaning certain funds to Offshore to drill and complete wells and construct, install and operate in-field and flow pipelines, caissons, platforms and production facilities for wells m South Padre Island Area OCS Blocks 1113, 1059, 1060, 1073 and 1133 and North Padre Island Area OCS Block 998 T'Derelopment Project"). + +1. Completion Commrtiryr.t + +Each of the South Padre Island Area OCS Blocks 1113,1059,1060,1073 and 1133 and the North Padre Island Area OCS Block 998 shall be defined as a "Project Field.'' + +For purposes ofthis Agreement, Project Completion shall consist oftwo components and be defined as: + +A) each Project Field in the Development Project having all planned in-field and flow pipelines, caissons, platforms and production facilities for all the wells in such Project Field, for which Guaranty has loaned funds, installed and operationalsuch that the production from all such wells can be transported to a readily available sales point for naturalgas. In addition, for each Project Field, Project Completion will include, but not limited to: + +a) obtaining required permits, easements and governmental approvals; + +b) executing necessary" construction contract(s); + +c) completing tests considered usual and customary" and required to be conducted with results tn accordance with those necessary" to permit operations; + +d) ensuring that each Project Field is free and clear of all bens other than those in favor of Guaranty and Permitted Liens under the Credit Agreement and: + +e) causing all costs of the Development Project to be paid when due; and, + +B) the 12-inch loop pipeline fromNorth Padre Island Area OCS Block 996 to the pipeline owned by the Williams Companies Inc. having been constructed and installed in accordance with the plans and specifications in the construction contracts). + + + + + +As consideration for Guaranty entering into the Credit Agreement to provide such loans for the Development Project and to ensure Project Completion. Prime absolutely and unconditionally warrants to Guaranty to fund the payment to Offshore of all costs that exzeed the available commitments under the Credit Agreement, including interest, for Project Completion. In the event Offshore is in Default under Section 7.1(f), (g), (h) and/or (i) ofthe Credit Agreement, then Prime absolutely and unconditionally warrants to Guaranty" the assumption of all costs for Project Completion. + +2. Licuieitv Maintenance + +Prime will, during the term of the Credit Agreement, maintain liquidity consisting of unused revolver availability" under the Credit Agreement dated December!, 2002, as amended, with Prime et aland Guaranty, and/or unrestricted cash and cash equivalents of $25,000,000. This required liquidity" win reduce dollar-for-dollar with any additional shareholder advance s and increase dollar-for-dollar to a maximum of $21,000,000 with any repayment of shareholder advances. To the extent that shareholder repayment has occurred, Prime agrees to fund additional shareholder loans equal to the amount repayed by the shareholder, as needed to ensure Project Clomp let ion + +This Agreement shall remain in force until each component ofProject Completion is satisfied. Once a component is satisfied, Prime's absolute and unconditional warranty to Guaranty to fund the payment to Offshore of ad costs that esceed the available commitments under the Credit Agreement for that conponent, including interest, wid ejpire. + +Prime understands that a breach ofobligations under this Agreement would result in an Event ofDefault under the Credit Agreement with Offshore that would permit Guaranty to pursue its available remedies under the Credit Agreement. Offshore is executing this Agreement to acknowledge that a breach ofthis Agreement would result in an Event ofDefault under the Credit Agreement. + +This Agreement shad be deemed a contract made under and shall be construed in accordance with and governed by the laws ofthe State ofTexas and that actions arising out ofthis Agreement may be litigated in courts having situs in Harris County, Texas. + +This agreement is executed the date first hereinafter written, + +PRIMEEVERGY CORPORATION By:-*" Beverly A. Cummings______ Beverly A. Cummings Executive Vice President + +-2 - + + + + + +PRIME OFFSHORE L.L.C. Byi'Sj' JimR- Brcck___________________ JiinE. Brcck President and Chief Financial Officer + + + + + +GUARANTY BANK, FS B ' Kelly L. ELmcre. El Kell)r L Ebncre. IH Senicr Vice Press idenl \ No newline at end of file diff --git a/full_contract_txt/PROFOUNDMEDICALCORP_08_29_2019-EX-4.5-SUPPLY AGREEMENT.txt b/full_contract_txt/PROFOUNDMEDICALCORP_08_29_2019-EX-4.5-SUPPLY AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..ecb581f3c4ac4e83b67823f6512e98ce27e1f4d4 --- /dev/null +++ b/full_contract_txt/PROFOUNDMEDICALCORP_08_29_2019-EX-4.5-SUPPLY AGREEMENT.txt @@ -0,0 +1,211 @@ +Exhibit 4.5 SUPPLY AGREEMENT between PROFOUND MEDICAL INC. and PHILIPS MEDICAL SYSTEMS NEDERLAND B.V. + + + + + +THIS AGREEMENT is made July 31, 2017 BETWEEN: PROFOUND MEDICAL INC., a company incorporated under the laws of the province of Ontario and having its registered address at 2400 Skymark, Unit 6, Mississauga, Ontario L4W 5K5, Canada (hereinafter referred to as "Customer") - and - PHILIPS MEDICAL SYSTEMS NEDERLAND B.V., a company incorporated under the laws of the Netherlands with its principal place of business at Veenpluis 4-6 5684 PC Best, the Netherlands (hereinafter referred to as "Philips") Customer and Philips hereinafter also collectively referred to as the "Parties" and individually as a "Party". WHEREAS: A. Pursuant to the Asset and Share Purchase Agreement (the "Purchase Agreement") entered into on June 30, 2017 by Customer, Koninklijke Philips NV ("Philips NV") N.V. and Customer agreed to execute and deliver (or cause to be executed and delivered) certain ancillary agreements one of which is this Agreement; B. Prior to the consummation of the transactions contemplated by the Purchase Agreement, Philips manufactured the Product in-house and did not outsource the manufacturing to an independent facility, and as a result, Philips has intimate knowledge of the manufacturing process and requirements for the Product; C. Customer originally desired to take over responsibility for the manufacture of the Product immediately upon closing of the transactions contemplated by the Purchase Agreement; D. As Philips historically manufactured the Product in-house, to enable Customer to prepare for and realize the transition of the manufacturing of the Product to Customer's organization, Customer requires the assistance of Philips to continue manufacturing the Product until such time as the manufacturing process can be transitioned to Customer hereunder; E. Until such time as the manufacturing of the Product can be transitioned to Customer in accordance with the terms of this Agreement, Philips agrees to supply, as a contract manufacturer to Customer, on a temporary basis for the Term (as defined herein), the Product, and Customer wishes to buy such Products from Philips under this Agreement; + + + + + +F. Customer acknowledges and agrees that it assumes all obligations and liabilities as the legal manufacturer of the Product as from the Effective Date, on the terms and conditions set out in this Agreement. NOW IT IS HEREBY AGREED as follows: 1. DEFINITIONS The following terms used in this Agreement shall have the meaning set forth below: "Affiliate" means, with respect to any Person, any other Person that directly, or indirectly through one or more intermediaries, controls, is controlled by or is under common control with the specified Person. As used in this definition, "control", "controlled by" and "under common control with" means possession, directly or indirectly, of power to direct or cause the direction of management or policies of such Person (whether through ownership of securities or other partnership or ownership interests, as trustee, personal representative or executive or by contract, credit agreement or otherwise), provided that in any event, any Person which owns directly, indirectly or beneficially 50% or more of the securities having voting power for the election of directors or other governing body of a corporation or 50% or more of the partnership interests or other ownership interests of any other Person will be deemed to control such Person. "Agreement" means this Supply Agreement including any and all of its Schedules as attached hereto and as may be amended or supplemented from time to time in accordance with the provisions hereof. "Business Day" means any day other than a Saturday, Sunday or statutory holiday, in the Province of Ontario or the Netherlands. "Claim" means any claim, action, cause of action, demand, lawsuit, arbitration, inquiry, audit, notice of violation, proceeding, litigation, citation, summons, subpoena or investigation of any nature, civil, criminal, administrative, regulatory or other, whether at Law, in equity or otherwise. "Confidential Information" means any information, provided in whatever form (including in written, electronic or oral form) or medium, which relates to either Party's or its Affiliates' business, products (hardware and software), technology, business plans, product plans, customers, customer information, specifications, designs, costs, prices, business opportunities, Know How, trade secrets, inventions, techniques, processes, algorithms, software programs, schematics and any other business or technical information disclosed by the Disclosing Party to the Receiving Party in connection with this Agreement. "Confirmation" has the meaning ascribed thereto in clause 4.4. "Contract Year" means the twelve (12) month period beginning on the Effective Date, and each subsequent twelve (12) month period during the Term. + +- 3 - + + + + + +"Customer" has the meaning ascribed thereto in the Preamble. "Customer Indemnified Parties" has the meaning ascribed thereto in clause 10.1. "Delivery" means the actual delivery of the Product to Customer and the acceptance by Customer of the Product in accordance with clause 7.1. "Disclosing Party" as the meaning ascribed thereto in clause 14.1. "DMR" has the meaning ascribed thereto in clause 5.3. "EDI" means electronic data interchange. "Effective Date" means the Completion Date as defined in the Purchase Agreement. "Encumbrance" means any charge, claim, community property interest, pledge, condition, equitable interest, lien (statutory or other), option, security interest, mortgage, easement, encroachment, right of way, right of first refusal, or restriction of any kind, including any restriction on use, voting, transfer, receipt of income or exercise of any other attribute of ownership. "Export Regulations" has the meaning ascribed thereto in clause 16.1. "Factory Test Report" means the report, the content of which is set forth in Schedule 4, that Philips shall prepare and maintain, identifying the factory tests Philips completes on the Product prior to Delivery to support its compliance with the Specifications. "Force Majeure" has the meaning ascribed thereto in clause 0. "Forecasts" means those documents setting out anticipated demand for the Product as to be more particularly described in clause 3.2. "Governmental Authority" means any federal, state, local or foreign government or political subdivision thereof, or any agency or instrumentality of such government or political subdivision, or any self-regulated organization or other non-governmental regulatory authority or quasi-governmental authority (to the extent that the rules, regulations or orders of such organization or authority have the force of Law), or any arbitrator, court or tribunal of competent jurisdiction. "Intellectual Property Rights" means, in any and all jurisdictions, all: (a) patents and applications therefor, including all continuations, continuations-in-part and provisionals and patents issuing thereon, and all reissues, re-examinations, substitutions, renewals and extensions thereof (collectively, "Patents"); (b) trademarks, service marks, trade names, trade dress, logos, corporate names, Internet domain names or uniform resource locators used in connection with any global computer or electronic network, together with all translations, adaptations, derivations and combinations thereof, and other source or business identifiers, together with the goodwill associated with any of the foregoing, and all applications, registrations, renewals and extensions thereof; (c) industrial designs, designs and design rights; (d) copyrights, works of authorship and moral rights, and all registrations, applications, renewals, extensions and reversions thereof; (e) trade secrets, discoveries, concepts, ideas, research and development, Know How, formulae, inventions, compositions, manufacturing and production processes and techniques, technical data, quality data, procedures, designs, drawings, specifications, databases, and other proprietary or confidential information, including customer lists, supplier lists, pricing and cost information, and business and marketing plans and proposals, which would constitute a "trade secret" under applicable Law, in each case excluding any rights in respect of any of the foregoing that comprise or are protected by Patents ("Trade Secrets"); (f) inventions, processes and designs; and (g) software, and all source code, object code, data and documentation relating thereto. + +- 4 - + + + + + +"Know How" means any and all concepts, ideas, information, data and documents of whatever nature, including, without limitation, drawings, methods, techniques, designs, specifications, photographs, samples, models, processes, procedures, reports, particulars of a technical nature (including, without limitation, any know how related to the manufacturing or design of Products and technical and commercial know how). "Law" means all laws, statutes, ordinances, decrees, judgments, codes, standards, acts, orders, by-laws, rules, regulations, permits, legally binding policies and guidelines and legally binding requirements of all Governmental Authorities. "Lead-Time" means, as applicable, the minimum number of days required between the date of the Purchase Order and the date of Delivery requested in a Purchase Order as such number is listed in Schedule 2. "Losses" has the meaning ascribed thereto in clause 10.1. "New Technology" has the meaning ascribed thereto in clause 13.3. "Other Transaction Documents" has the meaning ascribed thereto in clause 6.6. "Parties" and "Party" have the meaning ascribed thereto in the Preamble. "Permit" has the meaning ascribed thereto in clause 8.2(c). "Person" includes any individual, sole proprietorship, partnership, unincorporated association, unincorporated syndicate, unincorporated organization, trust, body corporate and a natural person in his or her capacity as trustee, executor, administrator or other legal representative. "Project Manager" has the meaning ascribed thereto in clause 12.8(a). "Project Team" has the meaning ascribed thereto in clause 12.8. "Quality Agreement" has the meaning ascribed thereto in clause 8.1. "Philips" has the meaning ascribed thereto in the Preamble. + +- 5 - + + + + + +"Philips Indemnitees" has the meaning ascribed thereto in clause 10.1(ii) "Product" means the Sonalleve MR-guided HIFU device which Philips shall manufacture and supply according to this Agreement as specified in Schedule 1,including spare parts. "Production Plan" means the production plan setting forth the delivery limitations as specified in Schedule 3, and as may be updated in accordance with clause 3.1. "Purchase Order" means an order for Products as may be submitted by Customer in accordance with clause 3. "Quality Agreement" means the Quality Agreement as described further in clause 8.1 of this Agreement, as the same may be amended or supplemented from time to time in accordance with the terms thereof. "Receiving Party" as the meaning ascribed thereto in clause 14.1. "Regulatory Transfer Date" has the meaning ascribed to such term in clause 2.3. "Representatives" has the meaning ascribed to such term in clause 14.2. "Required Jurisdictions" [Redacted - Commercially Sensitive] "RPA" means the resale purchasing agreement between the Parties, dated as of the Effective Date. "Specifications" means the specifications for the Product as set out in Schedule 1, as such specifications be amended from time to time in accordance with the terms of the quality agreement (the "Quality Agreement"). "Term" has the meaning ascribed thereto in clause 12.1. "Third Parties" means a Person who is not a Party or an Affiliate of a Party. "Transferred Confidential Information" has the meaning ascribed thereto in clause 14.4. "Transition Plan" has the meaning ascribed thereto in clause 12.8. "VAT" has the meaning ascribed thereto in clause 6.1. 2. GENERAL, SCOPE 2.1 During the Term, Philips shall manufacture and supply and Customer shall purchase the Products ordered by Customer pursuant to Purchase Orders (issued by Customer and accepted by Philips) in accordance with the terms and conditions of this Agreement. + +- 6 - + + + + + +2.2 The Parties intend for the express terms and conditions contained in this Agreement, including the Quality Agreement and any Schedules and Exhibits hereto or thereto, and in any Purchase Order that are consistent with the terms and conditions of this Agreement to exclusively govern and control each of the Parties' respective rights and obligations regarding the manufacture, purchase and sale of the Products, and the Parties' agreement is expressly limited to such terms and conditions. Notwithstanding the foregoing, if any terms and conditions contained in a Purchase Order conflict with any terms and conditions contained in this Agreement, the applicable term or condition of this Agreement will prevail and such additional, contrary or different terms will have no force or effect. Except for such additional and contrary terms, the terms and conditions of all Purchase Orders are incorporated by reference into this Agreement for all applicable purposes hereunder. Without limitation of anything contained in this clause 2.2, any additional, contrary or different terms contained in any Confirmation (as defined below) or any of Philips's invoices or other communications between the Parties, and any other attempt to modify, supersede, supplement or otherwise alter this Agreement, are deemed rejected by Customer and will not modify this Agreement or be binding on the Parties unless such terms have been fully approved in a signed writing by authorized by both Parties. 2.3 On the Effective Date, Philips (or its Affiliate, Philips Oy) is the legal manufacturer of the Product. Customer hereby covenants and agrees to file with all applicable notified bodies and Governmental Authorities, including but not limited to BSI, Notified Body and ISO Registrar, on a jurisdiction-by-jurisdiction basis, within the applicable time periods for each jurisdiction outlined in the "Transitional Service Level Agreement" (TSLA Number: QR01, TSLA Title: Transfer of Legal Manufacturers), all documentation required or necessary to change the legal manufacturer of the Product in each Required Jurisdiction from Philips Oy to Customer for all applicable regulatory purposes. In order to expedite and achieve such change of legal manufacturer and to achieve the required changes outlined in such Transitional Service Level Agreement, Customer shall fully cooperate with as required by and actively facilitate the above registration process by the applicable notified bodies and Governmental Authorities in each Required Jurisdiction. On a jurisdiction-by-jurisdiction basis, from the date that the legal manufacturer is updated to Customer in such jurisdiction, Philips will supply the Products in such jurisdiction as contract manufacturer of Customer under this Agreement. 2.4 Philips shall provide such reasonable support, assistance and information reasonably requested by Customer and as outlined in the above referenced Transitional Service Level Agreement (including, to achieve the required changes outlined in such Transitional Service Level Agreement) in connection with Customer's transfer of the registrations in respect of the Product from Philips to Customer (as contemplated by clause 2.3 above), including, those services outlined in the Transitional Service Level Agreement, participating in any meeting with the applicable Governmental Authority reasonably requested by Customer and subject to the limitations and the obligations of the Parties under the "Transitional Service Level Agreement" (TSLA Number: QR01, TSLA Title: Transfer of Legal Manufacturers) concluded by the Parties in conjunction with the Purchasing Agreement. 3. DELIVERY CAPACITY, FORECAST 3.1 Philips shall maintain a delivery capacity, which allows Philips to deliver the Products in accordance with the Lead Times, Forecasts and Purchase Orders, but always subject to the supply limitations, if any, outlined in the Production Plan. Such Production Plan may be updated, and the production capacity may be increased only by the Parties' written agreement and any reasonable additional incremental (and documented) investment required to exclusively satisfy such increase shall be borne by Customer. Philips shall not be held liable for rejecting any Purchase Order through which the volume in any Contract Year or the relevant quarter exceeds the volume indicated in the Production Plan. + +- 7 - + + + + + +3.2 Customer shall provide Philips in good faith on a monthly basis, on the later of (i) seven (7) days prior to the beginning of each calendar month a rolling [Redacted - Commercially Sensitive] forecast for the Products (including the major configuration of each Product such as field strength) ("Forecast") it expects to purchase during such [Redacted - Commercially Sensitive] period. Such Forecast shall be provided in writing or in any other mutually agreed manner of communication (e.g., EDI or email). Notwithstanding any other obligation set forth herein, Customer shall give Philips at least [Redacted - Commercially Sensitive] prior written notice if, during the Term, it intends to discontinue the purchase of any Products hereunder, or if it intends to substantially decrease, versus the Forecast, its purchase demand hereunder. For greater certainty, if Philips (or an Affiliate of Philips) is delayed in delivering any "Forecast" contemplated by the RPA, the Customer's obligations to deliver the Forecast hereunder (solely in respect of that portion of the Forecast that corresponds to the volume of Product to be sold to Philips (or an Affiliate of Philips) pursuant to the RPA) shall be tolled until Philips (or an Affiliate of Philips) delivers the corresponding "Forecast" under the RPA. 3.3 Notwithstanding Customer's obligations pursuant to clauses 3.1 and 3.4, the first [Redacted - Commercially Sensitive] of each Forecast shall constitute a binding commitment of Customer to purchase the quantities of Products set forth in the relevant Forecast for such [Redacted - Commercially Sensitive] period. The Forecast for the period beyond this two (2) month period shall be non-binding except to the extent otherwise provided in clause 3.4. Only Purchase Orders as accepted by Philips, as set forth in clause 3.4 below, constitute an obligation for Philips to actually produce the so ordered Products and no quantities of Products in the Forecast provided by Customer shall constitute an accepted Purchase Order. 3.4 Customer shall have the right to increase or decrease, as the case may be, the [Redacted- Commercially Sensitive] Forecast only within the limitations set forth in the Production Plan per quarter. 3.5 The reasonable and documented costs of all materials, parts and components which have been purchased and paid for by Philips in order to meet Customer's demand as may be concluded, based on the historical operations of Philips in the ordinary course of business, on the basis of Customer's Forecast, shall be reimbursed, at inventory value without additional mark up by Customer against invoice in accordance with the payment terms of this Agreement in such instance where any such materials are not used in the production of any Products to meet any Purchase Orders of Customer within [Redacted - Commercially Sensitive] of the purchase of such materials. The same reimbursement obligation shall apply at the end of the Term for materials, parts and components then available at Philips. Such materials, parts and/or components shall be delivered to Customer [Redacted - Commercially Sensitive]. Upon payment the title of the materials, parts and/or components shall transfer to Customer. + +- 8 - + + + + + +4. PURCHASE ORDERS 4.1 Customer shall place Purchase Orders in writing (or any other mutually agreed manner of communication, e.g. email or EDI) within the Lead-Time and in accordance with the Forecast provided to Philips in accordance with clause 3. 4.2 Each Purchase Order shall be given in writing (or such other manner of communication (e-mail) as may be mutually agreed from time to time) and shall specify: (a) Purchase Order number; (b) the type (including Product name and codes) and quantity of Products ordered; (c) the requested date of Delivery; (d) destination - ship to address; (e) the services ordered for the ordered Product; and (f) such other information as Philips may reasonably request from time to time. 4.3 No Purchase Order shall be deemed to be accepted by Philips until accepted in writing (including by email or another agreed manner of communication) by Philips or as otherwise contemplated by clause 4.4 below. Philips shall not reject any Purchase Order which is placed in accordance with the Forecast, the Lead Time and otherwise in accordance with this Agreement, unless Philips is entitled to reject on the basis of clause 3.1 or 4.4. 4.4 Philips shall confirm to Customer the receipt of each Purchase Order issued hereunder (each, a "Confirmation") within seven (7) days following Philips's receipt thereof in writing or in any other mutually agreed manner of communication (e.g., EDI or email). Each Confirmation must reference Customer's Purchase Order number, confirm acceptance of the Purchase Order, include a confirmed date of Delivery (which may differ from the requested one in the Purchase Order) or, solely if permitted under this clause 4.4, advise Customer of Philips's rejection of such Purchase Order, the date of acceptance or rejection and the basis for rejection, if applicable. If Philips commences performance under such Purchase Order, Philips will be deemed to have accepted the Purchase Order. Customer may withdraw any Purchase Order prior to Philips' acceptance thereof. Philips may only reject a Purchase Order if (a) the quantity ordered by Customer in such Purchase Order is inconsistent with the quantity in the applicable Forecast in accordance with clause 3.2 (as amended pursuant to clause 3.4), (b) Philips has sent Customer a Notice of termination pursuant to clause 12 or (c) the applicable Purchase Order includes terms and conditions that supplement those contained in this Agreement, which Philips is unwilling to accept. Philips may not cancel any previously accepted Purchase Order hereunder. Customer may not cancel a previously accepted Purchase Order . + +- 9 - + + + + + +5. DELIVERY, TRANSFER OF RISK AND OWNERSHIP 5.1 [Redacted - Commercially Sensitive - Delivery Details] 5.2 If Customer fails to take Delivery of ordered Products at the date of Delivery acknowledged by Philips, then Philips may deliver the Products in consignment and at Customer's risk and cost. 5.3 Philips will manufacture, handle, properly pack, mark and ship the Products in accordance with Customer's instructions provided to Philips in writing as part of the Device Master Record ("DMR") or as otherwise set forth in the Quality Agreement. The purchase price for the Product includes the costs of packaging as defined in the DMR, but any additional costs resulting from compliance with non-standard packaging specifications (i.e., different from as defined in the DMR) shall be added to the Price. 5.4 [Redacted - Commercially Sensitive - Delivery Details] 6. PRICE AND PAYMENT 6.1 Prices are exclusive of any federal, state or local sales, use or excise taxes and any, value added tax imposed solely as a result of the sale and transfer of the Products (VAT). Philips will list separately on its invoice any tax lawfully applicable to the relevant Purchase Order and payable by Customer, if any, with respect to which Customer does not furnish evidence of exemption. Philips is responsible for remitting any applicable VAT, sales tax, consumption tax, or any other similar tax, in each instance, that were charged to Customer under an applicable Purchase Order, to the appropriate tax authorities in accordance with applicable Laws and required timelines. Philips will issue an invoice containing wording that will allow Customer to take advantage of any applicable "input" tax deduction. 6.2 Purchase prices for the Products are set out in Schedule 1. Prices are firm and fixed for the Term and shall include all costs for work performed, Delivery according to this Agreement and packaging as set forth in clause 5.3 above. 6.3 Any invoices provided by Philips shall refer to the Purchase Order number and any other details required by applicable Law. Philips shall invoice for the purchase prices set out in Schedule 1 on or at any time after Delivery. 6.4 Philips invoices, compliant with the requirements of this Agreement, will be payable within [Redacted - Commercially Sensitive] following the end of the month of the date of invoice. Customer shall make all payments in Euros by check, wire transfer or automated clearing house to the bank account designated by Philips. 6.5 [Redacted - Commercially Sensitive - Late Payment Details] 6.6 [Redacted - Commercially Sensitive] + +- 10 - + + + + + +7. CONFORMITY OF PRODUCTS 7.1 Philips represents and warrants to Customer that all Products delivered and any services provided hereunder: i. conform to the Specifications on the Delivery Date [Redacted - Commercially Sensitive]; ii. unless otherwise agreed with Customer in writing, are new (do not contain any used or reconditioned parts or materials) and fit for the purposes for which they are intended; iii. are of sound workmanship, good quality and free from defects in construction, manufacture and material [Redacted - Commercially Sensitive]; iv. the manufacturing and shipment of the Product comply in all respects with applicable Laws, regulations, certification requirements, including health and safety standards and all other applicable regulatory requirements for the manufacture and shipment of Products; v. are free and clear of all liens, encumbrances, and other Claims against title; and vii. comply in all respects with the terms of this Agreement and the applicable Purchase Orders. 7.2 [Redacted - Commercially Sensitive] 7.3 [Redacted - Commercially Sensitive] the foregoing warranties will survive any inspection, delivery, acceptance, or payment by Customer and will be enforceable by Customer and its Affiliates, and their successors, assigns, subcontractors, distributors, dealers, agents and customers and all other entities combining, selling or using Products or goods into which Products have been incorporated (together, the "Customer Parties"), for the period set forth in clause 7.4. 7.4 Without prejudice to any other rights accruing under this Agreement or law, the warranties set forth in clause 7.1 will extend for a period of [Redacted - Commercially Sensitive - Warranty Details]. Products repaired or replaced by Philips within the Warranty Term are warranted for the remainder of the original Warranty Term of said Products. 7.5 In respect of failure to meet the Specifications, if Products do not comply with the warranties set forth in clause 7.1, Customer may then, after having consulted Philips as to the most appropriate remedy, elect reasonably to have Products: i. returned to Philips for repair or replacement; ii. repaired or replaced by Philips in the field; or iii. repaired or replaced by Customer in the field, including Products in distributor inventory and Customer's installed base; or + +- 11 - + + + + + +iv. returned to Philips in exchange for a full refund of the purchase price for the non-conforming Products paid under this Agreement. 7.6 Philips will bear all costs, including transportation and labor costs, in connection with the repair or replacement of, and all other costs or damages Customer may incur as a result of Products not complying with clause 7.1. If Philips agrees that Customer performs the repair, Philips will provide Customer free of charge with any replacement Product or upgrade necessary, and will reimburse Customer for all costs relating to such repair, including any related labor costs. 7.7 If Customer or any relevant Governmental Authority determines that a recall campaign is necessary, Customer will implement such recall campaign at Customer's sole cost and risk. Customer hereby covenants and agrees that it shall bear all costs and expenses related to the implementation of any such recall. In case of a recall of the Product, Philips shall at its sole cost provide full cooperation to Customer in order to achieve an efficient and effective recall by Customer. Philips shall provide such cooperation at its own costs, including internal organizational costs but not including the costs of repair, replacement, installation of Products and logistics related to the recall [Redacted - Commercially Sensitive]. For greater certainty, the obligations of the Parties pursuant to this clause 7.6 shall only apply in respect of Products sold or distributed on or after the Effective Date, and for clarity, to thwe extent there is a recall that involves any Product sold or distributed prior to the Effective Date, the covenants and obligations of the Parties pursuant to this clause 7.6 shall not apply (and shall be addressed by the terms of the Purchase Agreement). 7.8 [Redacted - Commercially Sensitive - Warranty Details] 8. QUALITY AND REGULATORY AND COMPLIANCE WITH LAWS 8.1 The Parties have entered into a Quality Agreement on or around the Effective Date, detailing Customer's requirements, as the legal manufacturer of the Product, with respect to the manufacturing of the Product by Philips as the contract manufacturer. . The Quality Agreement is deemed to be incorporated into this Agreement by reference and made a part hereof, and to the extent of a conflict between the terms of the Quality Agreement and this Agreement, the terms and provisions of this Agreement shall prevail. 8.2 Until, on a jurisdiction by jurisdiction basis, the Regulatory Transfer Date, Philips shall (a) remain the legal manufacturer of the Product according to its own quality management systems. (b) comply, in all material respects, with all applicable Laws, Philips' operation of its business and the exercise of its rights and performance of its obligations hereunder (including, the manufacture of the Product). Without limitation of the foregoing, Philips shall ensure the Product is manufactured in accordance with applicable Laws. + +- 12 - + + + + + +(c) obtain and maintain all Permits necessary for the exercise of its rights and performance of Philips' obligations under this Agreement, including any Permits required for the manufacture of the Product and the import or any materials and other manufacturing parts used in the production and manufacture of the Product, and the shipment of hazardous materials, as applicable. For purposes of this Agreement, "Permit" means any permits, licenses, franchises, approvals, authorizations, registrations, certificates, variances and similar rights obtained or required to be obtained, from any Governmental Authority. 9. CHANGES TO PRODUCT 9.1 Any changes to the Product proposed by Philips shall be discussed and handled by the Parties as described in the Quality Agreement. Until execution of the Quality Agreement, the provisions of this clause 9 shall apply. 9.2 Philips shall be entitled to make changes to the Products to comply only with any applicable Laws. Without prejudice to the foregoing, it is understood and agreed that Customer (and not Philips) shall be responsible to notify Philips of any changes required to comply with any applicable Laws, as long as such applicable Laws concern the Products. 9.3 Customer may reasonably request and Philips may propose, in writing, that Philips makes a change to the method of packing, a change to the packaging, or the Products. Such request or proposal (as applicable) will include a description of the requested/proposed change sufficient to allow Philips, using commercially reasonable efforts, to evaluate the feasibility and impact on costs and other terms of such requested change, it being understood that Customer shall pay for any reasonable incremental and documented costs incurred by Philips in connection with such evaluation. All such changes are subject to Philips's written approval (and in case of a change proposal by Philips, Customer's written approval), which cannot unreasonably withheld, conditioned or delayed, it being understood that, if technically feasible and commercially reasonable, Philips shall make any changes required to comply with any applicable Laws upon Customer's written request. Philips will not be obligated to agree or accept any such request for a change nor to proceed with the requested change until the Parties have mutually agreed upon the changes to the Product's Specifications, the price, the implementation costs to be borne by Customer including, without limitation, development and other non-recurring expenses, the cost of inventory and materials that may become obsolete, and any other terms of this Agreement. 9.4 The incremental and documented costs of any changes (including any non-recurring costs such as development and re-engineering costs, as well as costs of changes to the tools used to manufacture the changed Products) shall be borne by Customer. All such charges will be charged to Customer at cost, without any additional markup. 10. INDEMNIFICATION AND LIMITATION OF LIABILITY 10.1 Indemnification by Philips (i) Philips will defend, indemnify and hold harmless Customer and its Affiliates and their respective directors, officers, employees and agents, and their successors, heirs and assigns (the "Customer Indemnitees") from and against all liabilities, costs, damages, Claims and expenses, including reasonable attorney's fees, arising from or related to any actual or alleged [Redacted - Commercially Sensitive - Indemnification Details]. + +- 13 - + + + + + +(ii) Customer will defend, indemnify and hold harmless Philips and its Affiliates and their respective directors, officers, employees and agents, and their successors, heirs and assigns (the "Philips Indemnitees") from and against all liabilities, costs, damages, Claims and expenses, including reasonable attorney's fees, arising from or related to any actual or alleged [Redacted - Commercially Sensitive - Indemnification Details] 10.2 [Redacted - Commercially Sensitive - Indemnification Details] 10.3 [Redacted - Commercially Sensitive - Indemnification Details] 10.4 The limitations and exclusions set forth above in this clause 10 shall apply to the fullest extent permitted by applicable Law. 11. TOOLS 11.1 The Parties will conclude contract(s) managing the ownership and use of tools and equipment needed for the manufacturing of the Products. 12. TERM AND TERMINATION AND TRANSITION 12.1 This Agreement shall come into force on the Effective Date and shall remain in force and effect for a period of [Redacted - Commercially Sensitive - Term Details] , unless this Agreement is extended or previously terminated in accordance with this clause 12, pursuant to clause 15.1 (Force Majeure), or (ii) by the mutual written consent of the Parties (the "Term"). 12.2 Customer, in its sole discretion, may terminate this Agreement, without cause, by providing six (6) months prior written notice to Philips. Philips may terminate this Agreement with immediate effect by written notice to Customer, should Customer not have filed with the specified bodies to transfer the applicable registrations within the time period specified in clause 2.3. 12.3 Without prejudice to any other right or remedy a Party may have against the other Party for breach or non-performance of this Agreement, Each Party may suspend performance of its obligations under the Agreement or terminate this Agreement upon written notice to the other Party if: (a) the other Party files a voluntary petition in bankruptcy or any voluntary proceeding relating to insolvency, receivership, liquidation, assignment for the benefit of creditors or similar proceeding; (b) the other Party becomes the subject of a petition in bankruptcy or any proceeding relating to insolvency, receivership, liquidation, assignment for the benefit of creditors or similar proceeding and such petition or proceeding is not dismissed within thirty (30) days from filing of such petition or proceeding; + +- 14 - + + + + + +(c) the other Party materially breaches any of its obligations under the Agreement, and the breaching failures to cure such breach within [Redacted - Commercial Sensitive - Termination Timing] after it receives written notice from the non-breaching Party to cure same; (d) [Redacted - Commercially Sensitive - Termination Timing] (e) conviction of, or commission by, the other Party or any principal officer, shareholder, employee or any partner of the other Party of any crime or immoral act which may adversely affect the goodwill or reputation of Customer or Philips; 12.4 If Philips causes the Agreement to be terminated, directly or indirectly, then Philips undertakes to sell all Products which have been ordered by Customer but not yet delivered at the date of termination upon the terms and conditions of this Agreement. 12.5 On termination or expiry of this Agreement, each Party shall promptly: (a) return to the other Party all equipment, materials and property belonging to the other Party that the other Party had supplied to the other Party (or its Affiliates) in connection with the supply and purchase of the Products under this Agreement; (b) cooperate with the other Party to arrange for the sale and purchase of the materials, parts and components as referred to in clause 3.4; (c) return to the other Party all documents and materials (and any copies) containing the other party's Confidential Information; (d) erase all the other party's Confidential Information from its computer systems (to the extent possible); and (e) on request, certify in writing to the other Party that it has complied with the requirements of this clause. On termination or expiry of this Agreement Philips shall facilitate an orderly transition of suppliers from Philips to Customer in accordance with the requirements outlined in Section 5.4 (Material Supplier Contracts) of the Purchase Agreement, including using commercially reasonable best efforts to assist Customer to enter into supply agreements directly with the counterparties to the Material Supplier Contracts (as defined in the Purchase Agreement) on terms that are satisfactory to the Customer, acting reasonably. + +- 15 - + + + + + +12.6 Termination of this Agreement in accordance with this clause 12, is without prejudice to any right to claim for amounts or interest accrued prior to the date of such termination under this Agreement. 12.7 All terms and conditions of this Agreement which are intended (whether expressed or not) to survive the duration or termination of this Agreement will so survive, including, for greater certainty, clauses 2.3, 2.4, 6, 10, 12, 13, 14, and 18. 12.8 Within [Redacted - Commercially Sensitive - Time Period] of the Effective Date, the parties shall negotiate, acting reasonably and in good faith, a transition plan (the "Transition Plan") to provide for a smooth transfer and transition of the manufacturing activities under this Agreement to Customer, an Affiliate of Customer or a third party manufacturer designated by Customer. The Transition Plan shall be negotiated based on the key transition terms outlined in Schedule 5 hereto (the "Transition Plan Term Sheet"). In connection with the negotiation and ultimately implementation of the Transition Plan, Parties shall install a project team which: (a) shall have a manager ("Project Manager"), one from Philips, who has experience in transferring manufacturing actives, and one from Customer, who has experience in setting up manufacturing activities; (b) shall be committed with sufficient capacity - made available by both Parties - to execute the Transition Plan within the given time frame (quantity), and the Parties shall ensure that sufficient and reasonable organizational resources are provided to each such Project Manager to ensure a smooth, uninterrupted and efficient transition of the manufacturing of the Product; (c) shall be sufficiently skilled and experienced with the activities under this Agreement (quality); (d) shall be fully dedicated to the timely and adequate execution of the Transition Plan. 12.9 The Parties shall perform such activities as set forth in the Transition Plan and shall otherwise perform all such obligations in good faith to ensure a smooth transfer of the manufacturing activities under this Agreement to Customer. In connection with the Transition Plan, Customer will pay all reasonable freight cost and any Philips' employee (or third parties engaged by Philips) at [Redacted - Commercial Sensitive - Billing Rate], as needed, in connection with the implementation of the Transition Plan. For greater certainty, Philips will only engage third party support to assist with the transition if such additional support is required in order to implement the Transition Plan and such additional support is previously approved by Customer in writing (not to be unreasonably withheld). If to the opinion of the Project Team, circumstances occur in which the timely and/or proper execution of the Transition Plan is obstructed, this shall be immediately reported to the relevant executive officers of both Parties for immediate resolution. + +- 16 - + + + + + +13. INTELLECTUAL PROPERTY RIGHTS 13.1 Customer grants to Philips, during the Term, a non-exclusive, royalty-free, non-transferrable right to make, have made, use, sell, reproduce, adapt, distribute, or otherwise use or practice Customer's Intellectual Property Rights solely in connection with manufacturing of the Products and packaging to Customer pursuant to this Agreement. 13.2 Customer represents and warrants that any Product manufactured by Philips under this Agreement in accordance with the Specifications does not infringe, misappropriate, or otherwise violate any third party Intellectual Property Rights. 13.3 All right, title and interest in any and all Intellectual Property Rights and Know How resulting or based on any services by Philips or its Affiliates hereunder or enhancements carried out or technology developed during manufacture of the Products and that relate specifically and solely to the manufacture of the Product ("New Technology"), in each case, that were developed for the Product, will be owned exclusively by Customer. Philips hereby assigns and shall cause its Affiliates to assign all right title and interest in New Technology to Customer, and shall cause all employees or service providers to assign all right title and interest and waive any moral rights in New Technology. For greater certainty, "New Technology" shall exclude any (x) modification to Philips pre-existing Intellectual Property Rights (which, shall exclude any Intellectual Property Rights forming part of the "Purchased Assets" under the Purchase Agreement) and (y) developments developed not for the Products (collectively, "Philips Retained Product IP'), provided that Philips and its Affiliates hereby grant to Customer under any such Intellectual Property Rights, which are applicable or used for the manufacturing of the Product, a non- exclusive, non-transferable (except in accordance with clause 18.4 (Assignment)), irrevocable, world-wide, fully paid-up license, without the right to grant sub-licenses, to make, have made, sell or commercialize in any other way the Product. 13.4 The sale of any Products under this Agreement shall not constitute the transfer of any ownership rights or title in any Intellectual Property Rights or Know How in or to such Products. 14. CONFIDENTIALITY 14.1 Confidential Information may be disclosed by or on behalf of a Party or its Affiliates (the "Disclosing Party") to the other Party or its Affiliates (the "Receiving Party") in connection with this Agreement. Each Party agrees to keep the other Party's (and its Affiliates) Confidential Information confidential and not to reproduce or disclose such Confidential Information to any third party, or to use it for any purpose other purpose than for the purposes of this Agreement. Each Party shall protect any Confidential Information of the other Party (and its Affiliates) with the same degree of care used in protecting its own Confidential Information, but no less than a reasonable degree of care. Unless otherwise mutually agreed in writing, the Confidential Information shall remain the property of the Disclosing Party. Each party's obligation to protect the Confidential Information of the other Party shall continue for a period of [Redacted - Commercial Sensitive - Time Period] following the date of termination of this Agreement. + +- 17 - + + + + + +14.2 Each Party may disclose the other Party's Confidential Information to its and its Affiliates' employees, officers, lawyers, accountants, professional advisers, consultants and sub-contractors (collectively, "Representatives") or financing sources (both debt and equity) or any prospective acquirer of a Party (or substantially all of the assets related to the Products)(collectively, "Other Recipients") on a strict need to know basis, provided that such Representatives and Other Recipients are subject to confidentiality obligations and/or agreements at least as stringent as the confidentiality restrictions imposed by this clause 14 on the Receiving Party. 14.3 The confidentiality obligations set out in this clause 14 shall not apply to any information (but only to the extent that such information) and the definition of "Confidential Information" shall not be deemed to include any information that: (a) is generally available from public sources or in the public domain through no fault or breach of the Receiving Party or any of its Representatives; (b) becomes available to the Receiving Party (or any of its Affiliates) unless the Receiving Party (or such Affiliate) is aware that such source was bound by a confidentiality agreement with the Disclosing Party or any or its Representatives or otherwise under a contractual, legal, fiduciary or other obligation of confidentiality with respect such information; (c) developed independently by the Receiving Party or any of its Affiliates without use of or reliance on the Disclosing Party's (or any of its Affiliates') Confidential Information as demonstrated by written records; or (d) was known or in the possession of the Receiving Party (or any of its Affiliates) prior to its disclosure by the Disclosing Party unless the Receiving Party (or such Affiliate) is aware that the source of such information was bound by a confidentiality undertaking to the Disclosing Party (or its Affiliates) or any or its Representatives or otherwise under a contractual, legal, fiduciary or other obligation of confidentiality with respect to such information. + +- 18 - + + + + + +14.4 Notwithstanding any of the carve outs to the definition of "Confidential Information" contained in clause 14.3, any Confidential Information in respect of the "Purchased Assets" and the "Business" (each, as defined under the Purchase Agreement) shall be deemed the Confidential Information of Customer (the "Transferred Confidential Information"), and, in respect of Philips, the carve out to the definition of "Confidential Information" contained in clause 14.3 shall not apply to any Transferred Confidential Information, notwithstanding the fact that Philips was aware, had possession of, or independently developed any such Transferred Confidential Information prior to the Effective Date 14.5 Clause 14 does not prohibit disclosure or use of any Confidential Information if and to the extent that the disclosure or use is required by applicable Law, any judicial or administrative proceedings, or the rules of any recognized stock exchange on which the shares of any Party are listed, provided that prior to such disclosure, the Receiving Party promptly notifies the Disclosing Party of such requirement with a view to providing the Disclosing Party with the opportunity to contest such disclosure or use and/or to obtain a protective order or otherwise to agree to the timing and content of such disclosure or use and the Receiving Party shall at the request of the Disclosing Party, assist the Disclosing Party in contesting such disclosure and/or obtaining a protective order; provided further that the Receiving Party shall only disclose such portions of the Confidential Information that are strictly required to be disclosed by applicable Law, and if permitted by applicable Law, the Disclosing Party shall be provided with the opportunity to review and comment on the disclosure to be made. 14.6 Each Party reserves all rights in its and its Affiliates' Confidential Information. No rights or obligations in respect of a Party's Confidential Information other than those expressly stated in this Agreement are granted to the other Party or to be implied from this Agreement. Each Party, and its Representatives shall protect and keep confidential and shall not use, publish or otherwise disclose to any Third Party, except as permitted by this Agreement, or with the other Party's written consent, the other Disclosing Party's Confidential Information. 15. FORCE MAJEURE Notwithstanding any provision to the contrary contained in this Agreement, the Parties shall be excused from the consequences of any breach of this Agreement if and to the extent that such breach was caused in whole or in part by a Force Majeure event, provided that (a) the affected Party shall not in any material way have caused or contributed to such Force Majeure event, (b) the Force Majeure event could not have been prevented by reasonable and ordinary precautions (as would be employed by a reasonably prudent person in the position of the affected party), and (c) the Force Majeure event could not reasonably have been circumvented by the affected Party by reasonable and ordinary commercial means, such as the use of alternate suppliers or subcontractors. Notwithstanding the foregoing: (a) the existence or occurrence of a Force Majeure event shall excuse a breach of this Agreement only for such period of time as the Force Majeure event remains in existence and only to the extent that such Force Majeure event has caused in whole or in part the breach of this Agreement; + +- 19 - + + + + + +(b) the existence of a Force Majeure event that has caused a breach of this Agreement shall not prevent a Party from asserting and acting upon a breach of this Agreement that has not been caused by a Force Majeure event; (c) If a Party is not or is not expected to be able to perform any material obligation under this Agreement due to a Force Majeure event for a period of [Redacted - Commercial Sensitive - Time Period] or more, the other Party may terminate this Agreement without liability. (d) Notwithstanding the foregoing, Customer may cancel without liability any affected Purchase Orders if the Force Majeure event would result in a delay in delivery of more than [Redacted - Commercial Sensitive - Time Period]. For the purposes of this clause 15, "Force Majeure" means any prevention, delay, stoppage or interruption in the performance of any obligation or the occurrence of any event due to an act of God, the occurrence of enemy or hostile actions, sabotage, war, blockades, terrorist attacks, insurrections, riots, epidemics, nuclear and radiation activity or fall-out, civil disturbances, explosions, fire or other casualty, failure of energy sources, any industry-wide material shortage and changes in governmental or regulatory action or legislation or regulation, third party labour disputes or strikes or any other similar causes beyond the control of the Party seeking relief from its obligations as a result of such event, but not including, for clarity, any financial inability of Philips or any of its Affiliates or the failure of any subcontractor to perform obligations owed to Philips unless when those are caused by Force Majeure. 16. EXPORT CONTROL 16.1 Customer understands that certain transactions of Philips are subject to export control Laws and regulations, such as but not limited to the UN, EU and the USA export control Laws and regulations, ("Export Regulations") which prohibit export or diversion of certain products and technology to certain countries. Any and all obligations of Philips to export, re-export or transfer Products as well as any technical assistance, training, investments, financial assistance, financing and brokering will be subject in all respects to such Export Regulations and will from time to time govern the license and Delivery of Products and technology abroad by persons subject to the jurisdiction of the relevant authorities responsible for such Export Regulations. If the Delivery of Products, services and/or documentation is subject to the granting of an export or import license by certain governmental authorities or otherwise restricted or prohibited due to export/import control regulations, Philips may suspend its obligations and Customer's and/or end-user's rights until such license is granted or for the duration of such restrictions or prohibitions. Furthermore, Philips may even terminate the relevant order in all cases without incurring any liability towards Customer or end-user. 16.2 Philips undertakes to provide Customer on request and in a timely fashion, with the following information in relation to the Products: (a) The country of origin of items to be supplied; and + +- 20 - + + + + + +(b) The applicable export control classification number of items known by Philips to be so subject to control. 16.3 Each Party will provide the other with reasonable assistance when applying for export licences for the Product. 16.4 Customer warrants that it will comply in all respects with the export, re-export and transfer restrictions set forth in such Export Regulations or in export licenses (if any) for every Product. Customer will not re-export the Product to any Third Parties unless Customer first obtains the same warranty as Customer is providing in the first sentence of this clause 16.4 from such third party. 16.5 Customer shall take all commercially reasonable actions in a manner consistent with industry practice, that are within its reasonable control to help minimize the risk of a customer/purchaser or end-user contravening such Export Regulations. 17. REGULATORY MATTERS Until execution of the Quality Agreement, the following provision shall govern the regulatory aspects of the activities under this Agreement. 17.1 Regulatory Actions Customer and Philips agree to notify each other within two (2) Business Days of any regulatory action affecting the Product. 17.2 Government Inspections, Compliance Review and Inquiries Upon request of any Governmental Authority or any third party entity authorized by a Governmental Authority, such entity shall, for the purpose of regulatory review and compliance, have access to observe and inspect the: (i) facilities of Philips; and (ii) manufacturing, testing, storage and preparation for shipment of Product, including development operations in respect of manufacturing, and auditing the Philips facility for compliance with applicable Laws. Philips shall give Customer prompt written notice of any upcoming inspections or audits by a Governmental Authority, governmental entity or any third party entity authorized by a Governmental Authority of the Philips facility or any of the foregoing, shall provide Customer with a written summary of such inspection or audit within five (5) Business Days following completion thereof. Philips agrees to use commercially reasonable efforts to promptly rectify or resolve any deficiencies (consisting of any failure to meet applicable regulatory requirements under applicable Law then in force) noted by a Governmental Authority, governmental entity or any third party entity authorized by a Governmental Authority in a report or correspondence issued to Philips or Customer. Subject to any specific arrangements agreed upon by the parties and subject to any limitations due to the fact (and until) Philips is the legal manufacturer, Customer shall be responsible for communicating with any Governmental Authority concerning the Product or the marketing, distribution, sale use of the Product, and Philips shall provide Customer with such assistance as Customer may reasonably require to assist it in such communications. Philips shall have no such communications specifically related to the Product, except to the extent (and notwithstanding its confidentiality undertakings in this Agreement) that they relate to Philips's manufacture, testing, storage and preparation for shipment of Product under this Agreement or as required of Philips directly by the Governmental Authority (including but not limited to due to the fact (and until) Philips is the legal manufacturer of the Product), in which case Philips shall be responsible for such communications. Notwithstanding the foregoing and except to the extent that an immediate or urgent communication is necessary under the circumstances or required by applicable Law, Philips in good faith shall consult in advance with Customer regarding all communications with any Governmental Authority that relate to Product or to Philips' ability to manufacture the Product pursuant to this Agreement. + +- 21 - + + + + + +17.3 Complaints and Adverse Events Philips and Customer shall fully comply with the terms of the Quality Agreement regarding their respective obligations and responsibilities with respect to any complaints or adverse events regarding the Product and other activities related to this Agreement. 17.4 Records Philips shall maintain, and provide Customer reasonable access to, all records, both during and after the termination or expiration of this Agreement, in accordance with the Quality Agreement. The cost of any off-site storage of such records after the Term of this Agreement shall be borne by Customer and invoiced on a calendar quarter basis. After the Term, Customer may elect to have such records delivered to it upon reimbursing Philips for its reasonable costs of such transfer. 17.5 Testing, Documentation, and Quality Assurance Philips shall maintain, and provide Customer reasonable access to, accurate and complete production records with respect to the manufacture of the Product in accordance with the Quality Agreement. The Parties agree to execute, and shall comply with their respective obligations and duties set forth in, the Quality Agreement. To the extent that there is any conflict between the terms of this Agreement and the Quality Agreement, the terms of this Agreement shall govern. 17.6 Cooperation as to Adverse Events, Product Inquiries and Recalls Each Party shall provide to each other in a timely manner all information which the other party reasonably requests regarding the Product in order to enable the other party to comply with all applicable Laws. Without limiting the foregoing, each Party will cooperate fully with the other party in connection with any recall efforts and mandatory problem reporting to Governmental Authorities as more fully detailed in the Quality Agreement. + +- 22 - + + + + + +18. MISCELLANEOUS 18.1 Entire Agreement This Agreement, together with the Quality Agreement and the Purchase Order, contains the entire agreement between the Parties relating to the subject matter of this Agreement, to the exclusion of any terms implied by applicable Law which may be excluded by contract, and supersedes any previous written or oral agreement between the Parties in relation to the matters dealt with in this Agreement. Each Party acknowledges that it has not been induced to enter into this Agreement by any representation, warranty or undertaking not expressly set out in this Agreement. 18.2 Severability If any provision in this Agreement is held to be illegal, invalid or unenforceable, in whole or in part, under any applicable Law, then: (a) such provision or part shall to that extent be deemed not to form part of this Agreement but the legality, validity or enforceability of the remainder of this Agreement shall not be affected; (b) the Parties shall use reasonable efforts to agree a replacement provision that is legal, valid and enforceable to achieve so far as possible the intended effect of the illegal, invalid or unenforceable provision. 18.3 Notices Any notice or other communication required or permitted to be given to any Party hereunder shall be in writing and shall be given to such Party at such Party's address set forth below, or such other address as such Party may hereafter specify by notice in writing to the other Party. Any such notice or other communication shall be addressed as aforesaid and given by: (a) delivered personally; (b) sent by an internationally recognized overnight courier service such as Federal Express; or (c) e-mail transmission, Philips' details: PHILIPS MEDICAL SYSTEMS NEDERLAND B.V. Address: PHILIPS MEDICAL SYSTEMS NEDERLAND B.V. P.O. Box 10.000 5680 DA Best, The Netherlands + +- 23 - + + + + + +Attention: [Redacted - Personal Information], Operations Manager MR Best Email: [Redacted - Personal Information] With copy to: Legal Department PMSN BV Veenpluis 4-6 5684 PC Best Building QX2 Email: The Company's details: PROFOUND MEDICAL INC. Address: Profound Medical Inc. 2400 Skymark Avenue, Unit #6 Mississauga, ON, L4W 5K5, Canada Attention: Arun Menawat E-mail: [Redacted - Personal Information] With copy to: Torys LLP Suite 3000, P.O. Box 270 79 Wellington Street West TD Centre Toronto, ON M5K 1N2 Attention: Cheryl Reicin Any notice or other communication will be deemed to have been duly given: (A) on the date of service if served personally; (B) on the Business Day after delivery to an international overnight courier service, provided receipt of delivery has been confirmed; or (C) on the date of transmission if sent via e-mail transmission, provided confirmation of receipt is obtained promptly after completion of transmission and provided that transmission via e-mail is followed promptly by delivery via one of the methods in Clause 18.3(a) or (b) above. 18.4 Assignment This Agreement will be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns. This Agreement may not be assigned by either Party, in whole or in part, to any Third Party without the prior written consent of the other Party, except that either Party may assign this Agreement as a whole, and all of its rights and obligations hereunder, without the consent of the other Party, but upon written notice to the other Party (a) to an Affiliate, or (b) in case of a transfer of all, or substantially all, stock or assets of such Party or the relevant business activity through which such Party acts in this Agreement to a Third Party or to any partnership or other venture in which such business activity is to participate. Except as provided above, without prior written consent of the other Party, any assignment or pledge of rights under this Agreement by a Party to a Third Party shall have no effect vis-à-vis such Third Party. + +- 24 - + + + + + +18.5 Independent Contractors The Parties to this Agreement are independent contractors and nothing in this Agreement shall operate to create a relationship of agency, partnership or employment between the Parties and neither Party shall have any right or authority to act on behalf of the other nor to bind the other by contract or otherwise (except as expressly permitted by the terms of this Agreement). 18.6 Headings Headings used in this Agreement are for convenience only and shall not affect the interpretation. 18.7 Amendments and Waiver No amendment of this Agreement shall be effective unless such amendment is in writing and signed by or on behalf of each of the Parties. No waiver of any provision of this Agreement shall be effective unless such waiver is in writing and signed by or on behalf of the Party entitled to give such waiver. 18.8 Disputes and Applicable Law This Agreement (including any dispute hereunder) and the documents to be entered into pursuant to it, save as expressly otherwise provided therein, will be governed by and construed in accordance with the Laws of the Netherlands. The applicability of the UN Convention on Contracts for the International Sale of Goods (Vienna convention) is explicitly excluded. Any dispute arising out of or in connection with this Agreement shall be resolved in the manner provided in Sections 12.1 and 12.2 of the Purchase Agreement. 18.9 Counterparts This Agreement may be executed in multiple counterparts, each of which shall be deemed an original. Signatures submitted by facsimile and electronically transmitted signatures as to which authenticity can reasonably be confirmed, shall be valid. 18.10 Third Party Rights Save as expressly otherwise stated, this Agreement does not contain a stipulation in favour of a Third Party. + +- 25 - + + + + + +18.11 Costs Except as otherwise provided in this Agreement, all costs which a Party has incurred or shall incur in preparing, concluding or performing this Agreement are for that Party's own account. 18.12 Insurance Philips shall fully comply with the terms of the Quality Agreement regarding its obligations and responsibilities with respect to maintaining the required level of insurance. 18.13 Further Assurances Each Party shall at its own costs and expenses from time to time execute such documents and perform such acts and things as the other Party may reasonably require to give the other Party the full benefit of this Agreement. + +- 26 - + + + + + +IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the duly authorized representatives of the parties as of the dates set forth below. PHILIPS MEDICAL SYSTEMS PROFOUND MEDICAL INC. NEDERLAND B.V. By: /s/ Iwald Mons By: /s/ Arun Menawat Name: Iwald Mons Name: Arun Menawat Title: M&A Project Leader Title: Chief Executive Officer Date: July 31, 2017 Date: July 31, 2017 + + + + + +[Redacted - Commercially Sensitive - Schedules concerning Product specifications, details, pricing, lead times, production plan and transition details] \ No newline at end of file diff --git a/full_contract_txt/PROLONGINTERNATIONALCORP_03_23_1998-EX-10.16-SPONSORSHIP AGREEMENT.txt b/full_contract_txt/PROLONGINTERNATIONALCORP_03_23_1998-EX-10.16-SPONSORSHIP AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..623a9e0f854cf004300025716dfd38836731bae7 --- /dev/null +++ b/full_contract_txt/PROLONGINTERNATIONALCORP_03_23_1998-EX-10.16-SPONSORSHIP AGREEMENT.txt @@ -0,0 +1,115 @@ +CONFIDENTIAL PORTIONS OMITTED + + EXHIBIT 10.16 + + [LOGO OF TEAM SABCO APPEARS HERE] + + SPONSORSHIP AGREEMENT + +THIS SPONSORSHIP AGREEMENT (hereinafter the "Agreement) is made and entered into this 19th day of December 1997, by and between SABCO RACING, INC., a North Carolina corporation with a place of business in Iredell County, North Carolina (hereinafter Sabco), and Prolong Super Lubricants, Anaheim, Calif. (Hereinafter to be referred to as "Prolong"); + + WITNESSETH: + + WHEREAS, Sabco is engaged in the business of operating NASCAR Winston Cup Series race cars and wishes to provide advertising space and advertising, promotional and marketing assistance to Prolong; and + + WHEREAS, Prolong desires to become a major associate sponsor of all three Sabco entries during the 1998, 1999 and year-2000 NASCAR Winston Cup Series racing seasons. These entries shall mean the Sabco No. 40, all NASCAR Winston Cup Series races during this three-year period; the Sabco No. 42, all NASCAR Winston Cup Series races during this three-year period; and Sabco No. 46, all NASCAR Winston Cup Series races during this three-year period. Prolong shall use its sponsorship of the Sabco entries for advertising, promoting and marketing itself. WHEREAS, the parties desire to set forth in this Agreement their respective rights and obligations; + + NOW, THEREFORE, in consideration of the mutual promises and agreements set forth herein, and for other good and valuable consideration, the parties hereto agree as follows: + + 1. Term. The term of this Agreement shall commence with the first race ----- of the 1998 Winston Cup season and shall continue until the final race of the year-2000 Winston Cup season. + + 2. Services to be provided by Sabco. Sabco shall perform the following --------------------------------- services for Prolong during the term hereof: + + A. Drivers. The drivers for the 33 Winston Cup events to be held -------- during the 1998 season in which Prolong is an associate sponsor shall be Sterling Marlin (40), Joe Nemechek (42) and Wally Dallenbach Jr. (46), unless due to injury or for some unforeseeable reason, either is unable to drive, in which event Sabco shall choose a substitute driver to drive their respective Sabco/Prolong-sponsored entry. For the duration of this agreement, Sabco reserves the right to substitute or replace any of the aforementioned drivers listed without prior notice to Prolong or prior approval from Prolong. + + B. Decal location. Sabco will designate Prolong as an associate sponsor --------------- on its No. 40, No. 42 and No. 46 Winston Cup race cars in the aforementioned 33 events. Sabco shall cause each car to be painted with paint schemes approved by each's primary sponsor and shall cause to display Prolong associate sponsor decal signage upon the middle side panel (between car number and rear tire; both sides of car) with dimensions of approximately 6 + + inches high by 16 inches long. In addition, Sabco shall provide, subject to Prolong's approval, drive, pit crew, team uniforms, team pit equipment, team race car transporter, show car and show car transporter bearing prominent Prolong associate sponsor identification as well as team pit equipment with size and placement commensurate with level of sponsorship + + 3. Driver Appearances. Sabco shall provide unto Prolong five aggregate ------------------ driver appearances (2) two-hours each at no fee. Prolong shall be responsible for all first class travel expenses relating to each driver appearance, i.e. hotel, airfare, meals, etc. Additional appearances by Sabco drivers shall be at the discounted rate of [ * ] ($[ * ]) Dollars per day per driver, [ * ]. + + Sabco shall further provide the services of each driver for one free day for commercial use (up to six hours each) for still photo shoot, TV and radio/commercial production. Prolong shall be responsible for all first class travel expenses relating to each driver appearance, i.e. hotel, airfare, meals, etc. + + All Sabco drivers, while under contract with Team SABCO, shall allow their likeness, voice, picture and signature to be used for commercial purposes endorsing Prolong at no additional costs during the term of this agreement. + + 4. Compensation. Prolong agrees to pay unto Sabco the sum [ * ] [ * ] ------------ Dollars ($[ * ]) for services to be provided by Sabco over this three year period of 1998, 1999 and year-2000. This sponsorship fee of $ [ * ] shall be + + + + + +paid to Sabco in the following installments: Year One (1998): $ [ * ] (four equal installments of $ [ * ] to be paid on 3/15/98, 6/15/98, 8/15/98 and 10/15/98); Year Two (1999): $ [ * ] (four equal installments of $ [ * ] to be paid on 3/15/99, 6/15/99, 8/15/99 and 10/15/99); Year Three (year-2000): $ [ * ] (four equal installments of $ [ * ] to be paid on 3/15/2000, 6/15/2000,8/15/2000 and 10/15/2000). + + 5. Show Car. Sabco agrees to provide at no expense to Prolong for its use -------- in promoting its sponsorship, five (5) free show car appearance days whereas Prolong can deem which of the Sabco show cars to use. This shall mean that Prolong may schedule any combination of Sabco's three show cars (based on availability) not to exceed a total of five show days (travel days are considered a "show date"). Sabco will provide transportation of show car and will provide an attendant to stay with the car during its display period. For any show car appearance requested by Prolong over and above the five (5) free appearances, Sabco will make available unto Prolong a show car at a discounted rate of [ * ] Dollars ($ [ * ]) per day. All travel days to and from the site of a show car appearance, as well as the actual day upon which show car is on display will be charged as a "show date". It is further understood that the parties will agree in advance upon a schedule of places and events for the show car to be displayed at such times as will not interfere with Sabco's racing schedule. + + 6. Media, Public Relations and Sponsor Communications. Sabco will use its -------------------------------------------------- best efforts to obtain favorable exposure for Prolong and will be available to assist Prolong with public relations activities to a reasonable extent. This shall include making members of Sabco available for media interviews, press conferences or other public relations activity, as reasonably requested by Prolong, at or near race sites on dates Sabco is at race sites pursuant to their obligations hereunder. Sabco shall provide at its expense a staff member to handle race team's media and public relations needs and shall cause Prolong to receive prominent mention and display within press kits featuring the Sabco No. 40, 42 and 46 race cars. In each of the 1998, 1999 and year-2000 races in which Prolong is designated as an associate sponsor, Sabco shall fax to Prolong officers on the Monday following the race, race results and a summary of the prior weekend activities. + + * CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION. + + 7. Exclusivity. During the term of this Agreement, Sabco will not ----------- represent or accept as a primary, secondary, or associate sponsor any other company reasonably deemed to be competitive with Prolong products. + + 8. Confidentiality. During and after the term of this Agreement, each --------------- party hereto, its employees and agents agree not to disclose any business results, trade practices or other business information of the other party, its employees or agents, which they may learn as a result of the performance of this Agreement. + + 9. Indemnification. --------------- A. Sabco shall indemnify, defend and hold harmless Prolong, its officers, directors, employees and representatives from and against any and all losses, claims, suits, damages, liabilities, costs and expenses, including attorney fees and count costs incurred by any of them arising out of: + +(i) Any breach of any warrant made by Sabco herein; + +(ii) Any acts done or words spoken + +(iii) Any claims by any persons arising from acts or omissions of any nature by Sabco, its employees or agents, including but not limited to, claims arising during the court of competition or practice in the performance of this Agreement. + + B. Prolong shall indemnify, defend and hold harmless Sabco, its officers, directors, employees and representatives, from and against any and all losses, claims, suits, damages, liabilities, costs and expenses, including attorney fees and court costs incurred by any of them, arising out of: + +(i) The use of any logo, design or materials furnished to Sabco by Prolong hereunder; + +(ii) Any breach of any warranty made by Prolong herein; + +(iii) Any acts done or words spoken by Prolong, its officers, directors, agents, employees and representatives; + +(iv) Any claims by any persons arising from acts of omissions of any nature by Prolong, its officers, directors, agents, employees or representatives, including, but not limited to, claims arising under any product liability theory with respect to Prolong's products. + + 10. Nature of Relationship. The parties expressly acknowledge and agree ---------------------- that Sabco is acting as an independent contractor. Each party is responsible for all taxes relating to its operation, including payroll taxes for its employees, and nothing in this Agreement is intended to create a relationship, express or + + + + + +implied, of employer-employee between Sabco and Prolong. Except as expressly authorized herein, neither party may contract for or otherwise obligate the other party without the party's prior express written consent. + + 11. Insurance. Sabco shall provide at its expense and maintain throughout --------- the term of this Agreement and any option period spectator liability insurance in an amount not less than $1 million single limit coverage with respect to any liability relating to the activities of Sabco in the performance of this Agreement. Sabco shall, within 90 days of the execution of this Agreement, supply Prolong with a copy of such policy of insurance or a certificate thereof, and such policies shall be cancelable only upon 10 days written notice to Prolong. + + 12. Notices, Statements and Payments. All notices, statements and -------------------------------- payments required under this Agreement shall be sent to the parties at the following addresses: + +SABCO RACING, INC. 114 Meadow Hill Circle Mooresville, North Carolina 28115 Attn: Felix Sabates + +PROLONG SUPER LUBRICANTS 1210 North Barsten Way Anaheim, California 92806 Attn: Jerry Grant + +All notices, statements and payments shall be deemed delivered when deposited in the United States mail postage prepaid, when hand delivered if delivered personally, when telecopied if the sender's telecopier confirms transmission (with respect to notices and statements) or when wire transferred in federal funds (with respect to payments). + + 13. Waivers. A waiver of any provision of this Agreement shall be -------- enforceable only if the waiver is in writing signed by the party against whom the waiver is sought to be enforced. A failure by a party at any time to exercise any rights hereunder shall not constitute a waiver of such rights at another time. + + 14. Entire Agreement. This Agreement contains the entire agreement and ---------------- understanding between the parties with respect to the subject matter hereof and supersedes all prior written or oral agreements between them with respect to the subject matter hereof. + + 15. Assignment. This Agreement may not be assigned by either party ---------- without the prior written consent of the other party. + + 16. Significance of Headings. Paragraph headings contained herein are ------------------------ solely for the purpose of aiding the speedy location of subject matter and are not in any sense to be given weight in the construction of this Agreement. Accordingly, in case of any question with respect to the construction of this Agreement, it is to be construed as though paragraph headings had been omitted. + + 17. Governing Law, Jurisdiction and Venue. This Agreement shall be ------------------------------------- governed by and construed in accordance with the substantive laws of the State of North Carolina. The parties hereto hereby submit to jurisdiction and venue in any state or federal court located in North Carolina as well as any other jurisdiction having venue and competent jurisdiction of any law suit arising out of or relating to this Agreement; provided, however, if any + + proceedings are instituted in a jurisdiction other than North Carolina, any party may remove such proceeding to any State or Federal Court in North Carolina. + + 18. Further Execution; Cooperation. The parties agree to execute and ------------------------------ deliver such further agreements, instruments and other documents as the other party may reasonably deem necessary to effectuate the purposes and provisions of this Agreement. The parties further agree to cooperate with each other in any manner reasonably requested by the other party to effectuate the purposes and provisions of this Agreement. + + 19. Counterparts. This Agreement may be executed in counterparts and the ------------ signature page of any party, and photocopies and facsimiles thereof, may be appended to any counterpart and when so appended shall constitute an original signature. + + IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly elected officers as of the day and year first above written. + + + + + + SABCO RACING, INC. ATTEST: BY /s/ Armando Fitz -------------------------------- /s/ Jerry Grant Armando Fitz - Vice President Business Operations - -------------------------- Jerry Grant - Secretary + + PROLONG SUPER LUBRICANTS ATTEST: + + BY /s/ Elton Alderman /s/ ILLEGIBLE --------------------------------- - -------------------------- Elton Alderman - President Secretary \ No newline at end of file diff --git a/full_contract_txt/PacificapEntertainmentHoldingsInc_20051115_8-KA_EX-1.01_4300894_EX-1.01_Content License Agreement.txt b/full_contract_txt/PacificapEntertainmentHoldingsInc_20051115_8-KA_EX-1.01_4300894_EX-1.01_Content License Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..ffce13e5a59c21783fa95a684cc9c85caff2a044 --- /dev/null +++ b/full_contract_txt/PacificapEntertainmentHoldingsInc_20051115_8-KA_EX-1.01_4300894_EX-1.01_Content License Agreement.txt @@ -0,0 +1,213 @@ +PACIFICAP ENTERTAINMENT Agreement with THE HENRY FILM AND ENTERTAINMENT CORPORATION + +CONFIDENTIAL + +Page 1 of 6 + +CONTENT LICENSE AGREEMENT + +This Content License Agreement is between THE HENRY FILM AND ENTERTAINMENT CORPORATION, located at 2809 Unicornio, Carlsbad, CA, 92009 and PACIFICAP ENTERTAINMENT' located at 12868 Via Latina, Del Mar, CA 92014 + +Licensor: PACIFICAP ENTERTAINMENT Licensee THE HENRY FILM AND ENTERTAINMENT CORPORATION + +THIS CONTENT LICENSE AGREEMENT (the "Agreement".) is made as of this 3rd day of November, 2005 In consideration of the mutual, promises contained herein, the parties agree as follows: + +GRANT OF LICENSE + +Subject to the terms and conditions of this Agreement, PACIFICAP ENTERTAINMENT hereby grants to THE HENRY FILM AND ENTERTAINMENT CORPORATION, under PACIFICAP ENTERTAINMENT'S full ownership and or fully authorized licensing Rights of Content + + (a) A 10 year exclusive, worldwide license to use, modify, reproduce, distribute, display and transmit any and all PACIFICAP ENTERTAINMENT nostalgic television show library Content. The Pacificap Entertainment Content shall be used to create a number of television shows, DVD Magazines, Internet Streaming Video Television Shows, Television Shorts, Radio Shows, Radio Shorts, Cell Phone Video Clips. Caller ID Video Clips, Promotional Commercials, Websites, Streaming Video Commercials, Streaming Video Highlight Shows, 24 Hour Nostalgia Sports Network, DVD Program Package, Television Show Series, stock footage library, and print promotional posters + +PACIFICAP ENTERTAINMENT AGREES that all television shows, DVD Magazines, Internet Streaming Video Television Shows, Television Shorts, Radio Shows, Radio Shorts, Cell Phone Video Clips, Caller ID Video Clips, Promotional Commercials, Websites, Streaming Video Commercials, Streaming Video Highlight Shows, 24 Hour Nostalgia Sports Network, DVD Program Package, Television Show Series, stock footage library, and print promotional posters, created and or produced with any content provided by PACIFICAP ENTERTAINMENT are wholly owned by THE HENRY FILM AND ENTERTAINMENT CORPORATION. + +PACIFICAP ENTERTAINMENT agrees to also allow THE HENRY FILM AND ENTERTAINMENT CORPORATION the right to redistribute, reproduce, retransmit, disseminate, sell, publish, broadcast or circulate the information contained in such PACIFICAP ENTERTAINMENT Content. THE HENRY FILM AND ENTERTAINMENT CORPORATION agrees to use its best efforts to restrict the uses of PACIFICAP ENTERTAINMENT Content by visitors to its Web Pages to personal use of such Content and not for further commercial redistribution. + +NOTICES: PACIFICAP ENTERTAINMENT will not alter or impair any acknowledgment of copyright or other Intellectual Property Rights of THE HENRY FILM AND ENTERTAINMENT CORPORATION, that may appear in the PACIFICAP ENTERTAINMENT website and the PACIFICAP ENTERTAINMENT Brand Features, including all copyright, trademark and similar notices that THE HENRY FILM AND ENTERTAINMENT CORPORATION may reasonably request. + +Initialed THE HENRY FILM AND ENTERTAINMENT CORPORATION:_______ + +Initialed PACIFICAP ENTERTAINMENT:______ Page 1 of 6 + + + +Source: PACIFICAP ENTERTAINMENT HOLDINGS INC, 8-K/A, 11/15/2005 + + + + + + + +PACIFICAP ENTERTAINMENT Agreement with THE HENRY FILM AND ENTERTAINMENT CORPORATION... + +CONFIDENTIAL + +Page 2of 6 + +All notices, requests, demands, reports or other communications under this Agreement shall be in writing and may be sent by mail, facsimile, or authorized electronic address to the offices specified below. Notices hereunder shall be directed to: For PACIFICAP ENTERTAINMENT: Attention Ed Litwak, Pacificap, Entertainment Inc., 12868 Via Latina, Del Mar, CA 92014 Email Address COSM@sbcglobal.net. For THE HENRY FILM AND ENTERTAINMENT CORPORATION, notices shall be sent to the attention of Michael Henry, Executive Producer, 2809 Unicornio, Carlsbad, CA 92009 Email Address 3impact@adelphia.net. + +DELIVERY OF PACIFICAP ENTERTAINMENT CONTENT AND SHARED REVENUE + +PACIFICAP ENTERTAINMENT'S RESPONSIBILITIES. PACIFICAP ENTERTAINMENT will be responsible for the delivery of all requested content less shipping and handling. Content will be delivered in the digital media form of DVCAM or other requested digital format. PACIFICAP ENTERTAINMENT will provide on-going assistance to THE HENRY FILM AND ENTERTAINMENT CORPORATION, with regard to technical, administrative and service-oriented issues relating to the utilization, transmission and maintenance of the PACIFICAP ENTERTAINMENT Content, as THE HENRY FILM AND ENTERTAINMENT CORPORATION may reasonably request. PACIFICAP ENTERTAINMENT will use its reasonable best efforts to ensure that the PACIFICAP ENTERTAINMENT Content is available at the request of THE HENRY FILM AND ENTERTAINMENT CORPORATION. + +SHARED REVENUE: In lieu of PACIFICAP ENTERTAINMENT granting a 10 year Exclusive Content License to THE HENRY FILM AND ENTERTAINMENT CORPORATION, THE HENRY FILM ANDENTERTAINMENT CORPORATION agrees to share 10% of the net revenue from any and all advertising sales, Syndication Fees and Licensing fees generated from all television shows, DVD Magazines, Internet Streaming Video Television Shows, Television Shorts, Radio Shows, Radio Shorts, Cell Phone Video Clips, Caller ID Video Clips, Promotional Commercials, Websites, Streaming Video Commercials, Streaming Video Highlight Shows, 24 Hour Nostalgia Sports Network, DVD Program Package, Television Show Series, stock footage library, and print promotional posters, created and or produced with any content provided by PACIFICAP ENTERTAINMENT. + +Revenue is described as all revenue generated from all content including broadcast and disk media, print and online properties. Net Revenue is the portion of revenue left after all costs associated with production, advertising, promotion and commissions which constitute the costs of sale. + +Within 30 days of the end of each quarter during the term of this agreement, PACIFICAP ENTERTAINMENT shall receive from THE HENRY FILM AND ENTERTAINMENT CORPORATION, a detailed accounting statement showing Net Due and Paid Shared Revenues for that quarter and shall remit to PACIFICAP ENTERTAINMENT its share of such revenues. + +PERFORMANCE: In lieu of PACIFICAP ENTERTAINMENT granting a 10 year Exclusive Content License to THE HENRY FILM AND ENTERTAINMENT CORPORATION, THE HENRY FILM AND ENTERTAINMENT CORPORATION agrees to share a minimum of $50,000.00 annually for each year of this Agreement. In the event of THE HENRY FILM AND ENTERTAINMENT CORPORATION, not fulfilling this minimum PERFORMANCE, PACIFICAP ENTERTAINMENT may cancel this Agreement + +Initialed THE HENRY FILM AND ENTERTAINMENT CORPORATION:______ + +Initialed PACIFICAP ENTERTAINMENT:______ + +Page 2 of 6 + + + +Source: PACIFICAP ENTERTAINMENT HOLDINGS INC, 8-K/A, 11/15/2005 + + + + + + + +PACIFICAP ENTERTAINMENT Agreement with THE HENRY FILM AND ENTERTAINMENT CORPORATION + +CONFIDENTIAL + +Page 3 of 6 + +INDEMNIFICATION + +PACIFICAP ENTERTAINMENT, at its own expense, will indemnify, defend and hold harmless Michael Henry, THE HENRY FILM AND ENTERTAINMENT CORPORATION, its Affiliates and their employees, representatives, agents and agent affiliates, against any claim, suit, action, or other proceeding brought against THE HENRY FILM AND ENTERTAINMENT CORPORATION, or an Affiliate based on or arising from any claim that PACIFICAP ENTERTAINMENT Content as delivered to THE HENRY FILM AND ENTERTAINMENT CORPORATION or any PACIFICAP ENTERTAINMENT Brand Feature infringes in any manner any third party Ownership Rights or Ownership Issues, Intellectual Property Right of any third party or contains any material or information that is defamatory, libelous, slanderous, that violates any person's right of publicity, privacy or personality, or has otherwise resulted in any injury, damage or harm to any person; provided, however, that in any such case: (x) THE HENRY FILM AND ENTERTAINMENT CORPORATION provides PACIFICAP ENTERTAINMENT with prompt notice of any such claim; (y) PACIFICAP ENTERTAINMENT permits THE HENRY FILM AND ENTERTAINMENT CORPORATION. . to assume and control the defense of such action, with counsel chosen by PACIFICAP ENTERTAINMENT (who shall be reasonably acceptable to THE HENRY FILM AND ENTERTAINMENT CORPORATION. .); and (z) THE HENRY FILM AND ENTERTAINMENT CORPORATION does not enter into any settlement or compromise of any such claim without PACIFICAP ENTERTAINMENT'S prior written consent. PACIFICAP ENTERTAINMENT will pay any and all costs, damages, and expenses, including, but not limited to, reasonable attorneys' fees and costs awarded against or otherwise incurred by Michael Henry, Melba Henry, THE HENRY FILM AND ENTERTAINMENT CORPORATION or any employees, representatives, agents and agent affiliates in connection with or arising from any such claim, suit, action or proceeding. + +TERM AND TERMINATION + +INITIAL TERM AND RENEWALS: This Agreement will become effective as of the last date of signature (Effective Date) and shall, unless sooner terminated as provided below or as otherwise agreed, remain effective for an initial term of 10 Years following the first date of public availability of the PACIFICAP ENTERTAINMENT Content within a THE HENRY FILM AND ENTERTAINMENT CORPORATION Property (the "Initial Term"). After the Initial Term, this Agreement will be automatically renewed for successive additional 3~year periods ("Extension Terms"), unless otherwise terminated by either party by giving notice to the other party not less than sixty (60) days prior to the end of a Term. As used herein, the "Term" means the Initial Term and any Extension Term(s). + +TERMINATION FOR CAUSE: Notwithstanding the foregoing, this Agreement may be terminated by either party immediately upon notice if the other party: (w) becomes insolvent; (x) files a petition in bankruptcy; (y) makes an assignment for the benefit of its creditors; or (z) breach any of its obligations under this Agreement in any material respect, which breach is not remedied within thirty (30) days following written notice to such party. + +EFFECT OF TERMINATION: Any termination shall be without any liability or obligation of the terminating party, other than with respect to any breach of this Agreement prior to termination. The provisions relating to property rights and confidentiality shall survive any termination or expiration of this Agreement. All revenue sharing ceases with the termination of this Agreement. + +Initialed THE HENRY FILM AND ENTERTAINMENT CORPORATION:______ + +Initialed PACIFICAP ENTERTAINMENT:______ + +Page 3 of 6 + + + +Source: PACIFICAP ENTERTAINMENT HOLDINGS INC, 8-K/A, 11/15/2005 + + + + + + + +PACIFICAP ENTERTAINMENT Agreement with THE HENRY FILM AND ENTERTAINMENT CORPORATION.. + +CONFIDENTIAL Page 4 of 6 + +PACIFICAP ENTERTAINMENT and THE HENRY FILM AND ENTERTAINMENT CORPORATION hereby acknowledge that each of them may have access to confidential and proprietary information, which relates to the other party's business (the "Confidential Information"). Such information shall be identified as confidential at the time of disclosure. Each party agrees to preserve and protect the confidentiality of the Confidential Information and not to disclose or use any applicable Confidential Information without the prior written consent of the other party; provided, however, that any party hereto may disclose to any other party or use any information which is: (i) already publicly known; (ii) discovered or created independently of any involvement with such party; (iii) otherwise learned through legitimate means other than from such party; or (iv) independently created by the receiving party without reference to the other party's confidential information. Moreover, any party hereto may disclose any Confidential Information hereunder to such party's agents, attorneys and other representatives or any court or competent jurisdiction or any other party empowered hereunder as reasonably required to resolve any dispute between the parties hereto. Both parties agree all aspects of this contract are confidential and shall not be disclosed to any third party. + +BOTH THE HENRY FILM AND ENTERTAINMENT CORPORATION and PACIFICAP ENTERTAINMENT acknowledges and agrees that: (i) as between PACIFICAP ENTERTAINMENT on the one hand, and THE HENRY FILM AND ENTERTAINMENT CORPORATION and its Affiliates on the other, THE HENRY FILM AND ENTERTAINMENT CORPORATION owns all right, title and interest in any THE HENRY FILM AND ENTERTAINMENT CORPORATION Property and THE HENRY FILM AND ENTERTAINMENT CORPORATION Brand Features; (ii) nothing in this Agreement shall confer in PACIFICAP ENTERTAINMENT any license or right of ownership in THE HENRY FILM AND ENTERTAINMENT CORPORATION Brand Features; and (iii) PACIFICAP ENTERTAINMENT shall not now or in the future contest the validity of THE HENRY FILM AND ENTERTAINMENT CORPORATION. Brand Features. + +PUBLIC ANNOUNCEMENTS The parties will cooperate to create any and all appropriate public announcements relating to the relationship set forth in this Agreement. Neither party shall make any public announcement regarding the existence or Content of this Agreement without the other party's prior written approval and consent. + +THE HENRY FILM AND ENTERTAINMENT CORPORATION will, when appropriate, mention PACIFICAP ENTERTAINMENT as "Content Provided By" in relevant credits and advertising including but not limited to print, television, radio and online; promotion and public relations. THE HENRY FILM AND ENTERTAINMENT CORPORATION will mention PACIFICAP ENTERTAINMENT Content when other third party providers of data to THE HENRY FILM AND ENTERTAINMENT CORPORATION are mentioned in relevant advertising, promotion and public relations. + +FUTURE COOPERATION: THE HENRY FILM AND ENTERTAINMENT CORPORATION and PACIFICAP ENTERTAINMENT will keep each other apprised of productions and other developments that may enhance the relationship between THE HENRY FILM AND ENTERTAINMENT CORPORATION and PACIFICAP ENTERTAINMENT; including but not limited to new productions development by THE HENRY FILM AND ENTERTAINMENT CORPORATION that may be valuable to PACIFICAP ENTERTAINMENT. PACIFICAP ENTERTAINMENT and THE HENRY FILM AND ENTERTAINMENT CORPORATION agree that future cooperation may be valuable to both parties, and that the parties will discuss s h future cooperation each quarter or as warranted. + +Initialed THE HENRY FILM AND ENTERTAINMENT CORPORATION:___ + +Initialed PACIFICAP ENTERTAINMENT:_____ Page 4of 6 + + + +Source: PACIFICAP ENTERTAINMENT HOLDINGS INC, 8-K/A, 11/15/2005 + + + + + + + +PACIFICAP ENTERTAINMENT Agreement with THE HENRY FILM AND ENTERTAINMENT CORPORATION… + +CONFIDENTIAL Page 5 of 6 + +ALL DISPUTES ARISING OUT OF THIS AGREEMENT SHALL BE SETTLED VIA BINDING ARBITRATION ACCORDING TO THE RULES AND REGULATIONS SET FORTH BY THE AMERICAN ARBITRATION ASSOCIATION IN SAN DIEGO COUNTY , THE STATE OF CALIFORNIA. + +IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized representatives as of the Effective Date first written above. + +PACIFICAP ENTERTAINMENT INC. (Licensor) + +Signed________________________________________________________________ Name: Ed Litwak Title: Chairman + +Date:_______________________ + +And + +THE HENRY FILM AND ENTERTAINMENT CORPORATION (Licensee) + +Signed______________________________________ Name: Michae1 Henry Title: Chairman + +Date:____________________________ + +Initialed THE HENRY FILM AND ENTERTAINMENT CORPORATION:____ + +Initialed PACIFICAP ENTERTAINMENT:______ + +PACIFICAP ENTERTAINMENT Agreement with THE HENRY FILM AND ENTERTAINMENT CORPORATION… CONFIDENTIAL Page 5 of 6 + +Witnessed By + +Signed ._______________________________________________________ William R. Sickert 7052 Partridge Place Carlsbad, CA 92009 + + + +PACIFICAP ENTERTAINMENT Agreement with THE HENRY FILM AND ENTERTAINMENT CORPORATION + +CONFIDENTIAL Page 6 of 6 + +EXHIBIT A + +TO: PACIFICAP ENTERTAINMENT INC. CONTENT LICENSE AGREEMENT + +PACIFICAP ENTERTAINMENT INC. MARK USAGE GUIDELINES + +Source: PACIFICAP ENTERTAINMENT HOLDINGS INC, 8-K/A, 11/15/2005 + + + + + +DEFINITIONS + +"Advertising Rights" shall mean the advertising and promotional rights sold or licensed with respect to Content included properties. + +"Affiliates" shall mean any company or any other entity worldwide, including, without limitation, corporations, partnerships, joint ventures, and Limited Liability Companies, in which THE HENRY FILM AND ENTERTAINMENT CORPORATION owns at least a five percent ownership, equity, or financial interest. + +"THE HENRY FILM AND ENTERTAINMENT CORPORATION Brand Features" shall mean all trademarks, service marks, logos and other distinctive brand features of THE HENRY FILM AND ENTERTAINMENT CORPORATION that are used in or relate to a THE HENRY FILM AND ENTERTAINMENT CORPORATION Property or Content, including, without limitation, the trademarks, service marks and logos described. + +"PACIFICAP ENTERTAINMENT Content" shall mean, collectively, all materials, data, and similar information collected and owned by PACIFICAP ENTERTAINMENT, which is a collection of television shows, clips, movies, recordings and photos. + +"THE HENRY FILM AND ENTERTAINMENT CORPORATION Properties" shall mean any of THE HENRY FILM AND ENTERTAINMENT CORPORATION produced, created, branded or co branded media properties. + +"Content Shows/Programming" shall mean those productions in any THE HENRY FILM AND ENTERTAINMENT CORPORATION Property that contain PACIFICAP ENTERTAINMENT Content. + +"Intellectual Property Rights" shall mean all rights in and to trade secrets, patents, copyrights, trademarks, know- how, as well as moral rights and similar rights of any type under the laws of any governmental authority, domestic or foreign. + +"Internet" shall mean the collection of computer networks commonly known as the Internet, and shall include, without limitation, the World Wide Web. + +PACIFICAP ENTERTAINMENT Agreement with THE HENRY FILM AND ENTERTAINMENT CORPORATION CONFIDENTIAL Page 6 of 6 + +Initialed THE HENRY FILM AND ENTERTAINMENT CORPORATION:____ + +Initialed PACIFICAP ENTERTAINMENT:____ + +Source: PACIFICAP ENTERTAINMENT HOLDINGS INC, 8-K/A, 11/15/2005 \ No newline at end of file diff --git a/full_contract_txt/PalmerSquareCapitalBdcInc_20200116_10-12GA_EX-10.6_11949289_EX-10.6_Trademark License Agreement.txt b/full_contract_txt/PalmerSquareCapitalBdcInc_20200116_10-12GA_EX-10.6_11949289_EX-10.6_Trademark License Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..49dcd9f046d5c4315d40973da03356c1e8a9012f --- /dev/null +++ b/full_contract_txt/PalmerSquareCapitalBdcInc_20200116_10-12GA_EX-10.6_11949289_EX-10.6_Trademark License Agreement.txt @@ -0,0 +1,51 @@ +Exhibit 10.6 TRADEMARK LICENSE AGREEMENT This TRADEMARK LICENSE AGREEMENT (this "Agreement") is made and effective as of [ ] day of [ ], 2020 ("Effective Date"), by and between Palmer Square Capital Management LLC, a Delaware limited liability company (the "Licensor"), and Palmer Square Capital BDC Inc., a corporation organized under the laws of the State of Maryland (the "Licensee") (each a "party," and collectively, the "parties"). RECITALS WHEREAS, Licensee is a newly organized, externally managed, closed-end, non-diversified management investment company that intends to elect to be regulated as a business development company under the Investment Company Act of 1940, as amended (the "1940 Act"); WHEREAS, Licensor, together with its affiliates, provides investment management, investment consultation and investment advisory services; WHEREAS, Licensor and its affiliates, including Palmer Square BDC Advisor LLC, a Delaware limited liability company ("Investment Advisor"), have used the marks "Palmer Square", "Palmer Square Capital" and derivations thereof (the "Licensed Mark") in the United States of America and certain other jurisdictions (collectively, the "Territory") in connection with the investment management, investment consultation and investment advisory services they provide; WHEREAS, the Licensee is entering into an investment advisory agreement with Investment Advisor (the "Advisory Agreement"), wherein Licensee shall engage Investment Advisor to act as the investment adviser to the Licensee; WHEREAS, it is intended that Investment Advisor be a third party beneficiary of this Agreement; and WHEREAS, the Licensee desires to use the Licensed Mark as part of its corporate name and in connection with the operation of its business, and Licensor is willing to grant Licensee a license to use the Licensed Mark, subject to the terms and conditions of this Agreement. NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: ARTICLE 1. LICENSE GRANT 1.1. License. Subject to the terms and conditions of this Agreement, Licensor hereby grants to Licensee, and Licensee hereby accepts from Licensor, a personal, non-exclusive, royalty-free right and license to use the Licensed Mark solely and exclusively as a component of Licensee's own corporate name and in connection with marketing the investment management, investment consultation and investment advisory services that Investment Advisor may provide to Licensee. During the term of this Agreement, Licensee shall use the Licensed Mark only to the extent permitted under this License, and except as provided above, neither Licensee nor any affiliate, owner, director, officer, employee or agent thereof shall otherwise use the Licensed Mark or any derivative thereof in the Territory without the prior express written consent of Licensor in its sole and absolute discretion and shall not use the Licensed Mark for any purpose outside the Territory. All rights not expressly granted to Licensee hereunder shall remain the exclusive property of the Licensor. 1.2. Nothing in this Agreement shall preclude Licensor or any of its successors or assigns from using or permitting other entities to use the Licensed Mark, whether or not such entity directly or indirectly competes or conflicts with Licensee's business in any manner. + +Source: PALMER SQUARE CAPITAL BDC INC., 10-12G/A, 1/16/2020 + + + + + +ARTICLE 2. COMPLIANCE 2.1. Quality Control. In order to preserve the inherent value of the Licensed Mark, Licensee agrees to use reasonable efforts to ensure that it maintains the quality of the Licensee's business and the operation thereof equal to the standards prevailing in the operation of Licensee's business as of the Effective Date. The Licensee further agrees to use the Licensed Mark in accordance with such quality standards as may be reasonably established by Licensor and communicated to the Licensee from time to time in writing, or as may be agreed to by Licensor and the Licensee from time to time in writing. 2.2. Compliance With Laws. Licensee agrees that the business operated by it in connection with the Licensed Mark shall comply with all laws, rules, regulations and requirements of any governmental body in the Territory or elsewhere as may be applicable to the operation, marketing, and promotion of the business and shall notify Licensor of any action that must be taken by Licensee to comply with such law, rules, regulations or requirements. 2.3. Notification of Infringement. Each party shall immediately notify the other party and provide to the other party all relevant background facts upon becoming aware of (a) any registrations of, or applications for registration of, marks in the Territory that do or may conflict with the Licensor's rights in the Licensed Mark or the rights granted to the Licensee under this Agreement, (b) any infringements or misuse of the Licensed Mark in the Territory by any third party ("Third Party Infringement"), or (c) any claim that Licensee's use of the Licensed Mark infringes the intellectual property rights of any third party in the Territory ("Third Party Claim"). Licensor shall have the exclusive right, but not the obligation, to prosecute, defend and/or settle in its sole discretion, all actions, proceedings and claims involving any Third Party Infringement or Third Party Claim, and to take any other action that it deems necessary or proper for the protection and preservation of its rights in the Licensed Mark. Licensee shall cooperate with Licensor in the prosecution, defense or settlement of such actions, proceedings or claims. + +- 2 - + +Source: PALMER SQUARE CAPITAL BDC INC., 10-12G/A, 1/16/2020 + + + + + +ARTICLE 3. REPRESENTATIONS AND WARRANTIES 3.1. Licensee accepts this license on an "as is" basis. Licensee acknowledges that Licensor makes no explicit or implicit representation or warranty as to the registrability, validity, enforceability, ownership of the Licensed Mark, or as to Licensee's ability to use the Licensed Mark without infringing or otherwise violating the rights of others, and Licensor has no obligation to indemnify Licensee with respect to any claims arising from Licensee's use of the Licensed Mark, including without limitation any Third Party Claim. 3.2. Mutual Representations. Each party hereby represents and warrants to the other party as follows: (a) Due Authorization. Such party is a limited liability company duly formed or a corporation duly incorporated, as applicable, and is in good standing as of the Effective Date, and the execution, delivery and performance of this Agreement by such party have been duly authorized by all necessary action on the part of such party. (b) Due Execution. This Agreement has been duly executed and delivered by such party and, upon due authorization, execution and delivery of this Agreement by the other party, constitutes a legal, valid and binding obligation of such party, enforceable against such party in accordance with its terms. (c) No Conflict. Such party's execution, delivery and performance of this Agreement do not: (i) violate, conflict with or result in the breach of any provision of the operating agreement, charter or bylaws (or similar organizational documents) of such party; (ii) conflict with or violate any governmental order applicable to such party or any of its assets, properties or businesses; or (iii) conflict with, result in any breach of, constitute a default (or event which with the giving of notice or lapse of time, or both, would become a default) under, require any consent under, or give to others any rights of termination, amendment, acceleration, suspension, revocation or cancellation of any contract, agreement, lease, sublease, license, permit, franchise or other instrument or arrangement to which it is a party. ARTICLE 4. TERM AND TERMINATION 4.1. Term. This Agreement shall expire if the Investment Advisor or one of its affiliates ceases to serve as investment adviser to the Licensee. This Agreement shall be terminable by Licensor at any time and in its sole discretion in the event that Licensor or Licensee receives notice of any Third Party Claim arising out of Licensee's use of the Licensed Mark; by Licensor or Licensee upon sixty (60) days' written notice to the other party; or by Licensee at any time in the event Licensee assigns or attempts to assign or sublicense this Agreement or any of Licensee's rights or duties hereunder without the prior written consent of Licensor. + +- 3 - + +Source: PALMER SQUARE CAPITAL BDC INC., 10-12G/A, 1/16/2020 + + + + + +4.2. Upon Termination. Upon expiration or termination of this Agreement, all rights granted to Licensee under this Agreement with respect to the Licensed Mark shall cease, and Licensee shall immediately delete the term "Palmer Square" from its corporate name and shall discontinue all other use of the Licensed Mark. For twenty-four (24) months following termination of this Agreement, Licensee shall specify on all public-facing materials in a prominent place and in prominent typeface that Licensee is no longer operating under the Licensed Mark, is no longer associated with Licensor, or such other notice as may be deemed necessary by Licensor in its sole discretion in its prosecution, defense, and/or settlement of any Third Party Claim. ARTICLE 5. MISCELLANEOUS 5.1. Third Party Beneficiaries. The parties agree that Investment Advisor shall be a third party beneficiary of this Agreement, and shall have the rights and protections provided to Licensee under this Agreement. Nothing in this Agreement, either express or implied, is intended to or shall confer upon any third party other than Investment Advisor any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement. 5.2. Assignment. Licensee shall not sublicense, assign, pledge, grant or otherwise encumber or transfer to any third party all or any part of its rights or duties under this Agreement, in whole or in part, without the prior written consent of the Licensor, which consent Licensor may grant or withhold in its sole and absolute discretion. Any purported transfer without such consent shall be void ab initio. 5.3. Independent Contractor. Neither party shall have, or shall represent that it has, any power, right or authority to bind the other party to any obligation or liability, or to assume or create any obligation or liability on behalf of the other party. 5.4. Notices. All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given or made (and shall be deemed to have been duly given or made upon receipt) by delivery in person, by overnight courier service (with signature required), by facsimile or by registered or certified mail (postage prepaid, return receipt requested) to the respective parties at the following addresses (or such other address as the parties may provide to each other by written Notice): If to Licensor: Palmer Square Capital Management LLC 1900 Shawnee Mission Parkway, Suite 315 Mission Woods, Kansas 66205 Tel. No.: (816) 994-3200 Fax No.: (913) 647-9733 Attn: Member + +- 4 - + +Source: PALMER SQUARE CAPITAL BDC INC., 10-12G/A, 1/16/2020 + + + + + +If to Licensee: Palmer Square Capital BDC Inc. 1900 Shawnee Mission Parkway, Suite 315 Mission Woods, Kansas 66205 Tel. No.: (816) 994-3200 Fax No.: (913) 647-9733 Attn: Chief Executive Officer 5.5. Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York. The parties unconditionally and irrevocably consent to the exclusive jurisdiction of the courts located in the State of New York and waive any objection with respect thereto, for the purpose of any action, suit or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby. 5.6. Amendment. This Agreement may not be amended or modified except by an instrument in writing signed by each party hereto. 5.7. No Waiver. The failure of either party to enforce at any time for any period the provisions of or any rights deriving from this Agreement shall not be construed to be a waiver of such provisions or rights or the right of such party thereafter to enforce such provisions, and no waiver shall be binding unless executed in writing by all parties hereto. 5.8. Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any law or public policy, all other terms and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible. 5.9. Headings. The descriptive headings contained in this Agreement are for convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement. 5.10. Counterparts. This Agreement may be executed in one or more counterparts, each of which when executed shall be deemed to be an original instrument and all of which taken together shall constitute one and the same agreement. Facsimile or portable document format (PDF) counterpart signatures to this Agreement shall be acceptable and binding. 5.11. Entire Agreement. This Agreement constitutes the entire agreement of the parties with respect to the subject matter hereof and supersedes all prior agreements and undertakings, both written and oral, between the parties with respect to such subject matter. [Remainder of Page Intentionally Left Blank] + +- 5 - + +Source: PALMER SQUARE CAPITAL BDC INC., 10-12G/A, 1/16/2020 + + + + + +IN WITNESS WHEREOF, each party has caused this Agreement to be executed on the date first set forth above by its duly authorized officer. LICENSOR: PALMER SQUARE CAPITAL MANAGEMENT LLC By: Name: Jeffrey D. Fox Title: Managing Director LICENSEE: PALMER SQUARE CAPITAL BDC INC. By: Name: Scott A. Betz Title: Chief Compliance Officer ACKNOWLEDGED AND AGREED TO PALMER SQUARE BDC ADVISOR LLC By: Name: Jeffrey D. Fox Title: Chief Financial Officer [Signature Page to Trademark License Agreement] + +Source: PALMER SQUARE CAPITAL BDC INC., 10-12G/A, 1/16/2020 \ No newline at end of file diff --git a/full_contract_txt/PapaJohnsInternationalInc_20190617_8-K_EX-10.1_11707365_EX-10.1_Endorsement Agreement.txt b/full_contract_txt/PapaJohnsInternationalInc_20190617_8-K_EX-10.1_11707365_EX-10.1_Endorsement Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..d0c7d9b6caffad23cbc4691bdcce85102ab3ec2d --- /dev/null +++ b/full_contract_txt/PapaJohnsInternationalInc_20190617_8-K_EX-10.1_11707365_EX-10.1_Endorsement Agreement.txt @@ -0,0 +1,413 @@ +Exhibit 10.1 + +ENDORSEMENT AGREEMENT + +THIS ENDORSEMENT AGREEMENT ("Agreement") is made and entered into effective March 15, 2019 (the "Effective Date") by and among, on the one hand, ABG-Shaq, LLC, a Delaware limited liability company ("ABG") for the personal services of Shaquille O'Neal, ("CELEBRITY"), and, on the other hand, Papa John's Marketing Fund, Inc., a Kentucky corporation ("PJMF"), and Papa John's International, Inc. ("PJI") (PJMF and PJI are, individually and collectively, "PAPA JOHN'S"). ABG and PAPA JOHN'S may hereinafter be referred to individually as a "Party" or collectively as the "Parties". + +WITNESSETH: + +WHEREAS, CELEBRITY is recognized and known for his skills as an athlete, sports analyst, and celebrity personality; + +WHEREAS, ABG, as successor in interest to CELEBRITY, is the exclusive rights holder throughout the world of certain rights to CELEBRITY'S name, image, and services, and has the authority to exploit such rights; + +WHEREAS, PJMF is a corporation that pays for the national marketing of PJI and is licensed to use and sublicense its intellectual property; + +WHEREAS, PAPA JOHN'S desires to acquire the right to use the Celebrity Endorsement (as defined below) in connection with the advertisement, promotion and sale of PAPA JOHN'S Products (defined below) and ABG agrees to grant such rights to PAPA JOHN'S and provide the services of CELEBRITY, all subject to the terms and conditions of this Agreement; + +NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: + +1. Definitions. As used herein, the terms set forth below shall be defined as follows: + +A. "Celebrity Endorsement" shall mean the right to use, subject to the provisions hereof, CELEBRITY's name (including variations and derivations of the same), nickname, initials, autograph, voice, video or film portrayals, facsimile signature, photograph, trade name, likeness and image or facsimile image, or means of endorsement (not including video) (individually and collectively, the "Personality Rights"), in each case, solely as Approved (as hereinafter defined) by ABG, in connection with the advertising, promotion and sale of Products. + +B. "Contract Year" shall refer to the period commencing on the Effective Date and ending the day before the one year anniversary of the Effective Date, and each successive twelve (12) month period thereafter during the term of this Agreement. + +1 + +Source: PAPA JOHNS INTERNATIONAL INC, 8-K, 6/17/2019 + + + + + +C. "Competitive Products" shall mean pizza intended primarily for carry-out or home delivery and prepared on the premises of a pizza carry-out/delivery restaurant, including but not limited to, pizza "take and bake" outlets, dine-in restaurants in which pizza is the principal food offering, and/or frozen pizza sold in grocery or mass merchandiser stores for in-home preparation. + +D. "Products" shall mean PAPA JOHN'S-branded pizza, bread sides, and, subject to ABG's Approval in each instance, piadinas and desserts (excluding pastries, doughnuts, coffee and coffee-based products, energy drinks, 'hydration' frozen ice bars, 'energy' frozen ice bars, and 'recovery' frozen ice bars), in each case produced and sold by PAPA JOHN'S. + +E. "Territory" shall mean Worldwide. + +2. Term. Unless earlier terminated in accordance with the provisions hereof, the initial term of this Agreement ("Term") is the Effective Date through March 15, 2022. The Agreement may be extended for one (1) year upon the parties' mutual agreement in writing, it being specifically understood the services to be performed by CELEBRITY (on behalf of ABG) and remuneration to ABG in connection with the same shall be negotiated in good faith. + +3. Grant of Endorsement. + +A. In consideration of the remuneration to be paid to ABG pursuant hereto and subject to the conditions and limitations contained herein, ABG grants to PAPA JOHN'S the non-transferrable, non-assignable, non-sublicensable, indivisible right and license solely during the Term of the Agreement and within the Territory to use the Celebrity Endorsement, in each instance, subject to ABG's Approval (as hereinafter defined). It is understood that PAPA JOHN'S shall not use the Celebrity Endorsement for any other purpose or in connection with any other items unless specifically permitted herein. Subject to the terms contained herein, PAPA JOHN'S and ABG agree and acknowledge that during the Term of this Agreement and for one (1) year thereafter, ABG shall be prohibited from granting any rights for CELEBRITY identical or similar to the rights granted to PAPA JOHN'S hereunder to any entity other than PAPA JOHN'S for the purpose of directly promoting, advertising, making an appearance on behalf of, or endorsing Competitive Products; provided, however, that in the event this Agreement is terminated pursuant to Section 7.B. of this Agreement, the prohibition referenced above shall be for a period of six (6) months, except that the prohibition shall referenced above shall not apply (or shall immediately cease to apply, as applicable) in the event of any one or more of the following: (i) the Agreement is terminated due to PAPA JOHN'S failure to pay to ABG any monies under this Agreement, as set forth herein, (ii) the Agreement is terminated due to PAPA JOHN'S failure to grant, issue, or cause to vest any of the RSUs (as hereinafter defined) under this Agreement, as set forth herein, (iii) PAPA JOHN'S failure to pay to ABG any monies under Section 7.D.a. or Section 7.D.b. of this Agreement, as set forth herein, or (iv) PAPA JOHN'S failure to grant, issue, or cause to vest any of the RSUs under Section 7.E.a. or Section 7.E.b. of this Agreement, as set forth herein. + +2 + +Source: PAPA JOHNS INTERNATIONAL INC, 8-K, 6/17/2019 + + + + + +B. The parties acknowledge and agree that all materials produced by or on behalf of PAPA JOHN'S in connection with this Agreement and all elements thereof, including all advertising and promotional materials, trademarks, phrases, words, writing, dialogue, adlibs, music, titles or characters therein, but in all cases specifically excluding the Celebrity Endorsement and the Personality Rights (the "Materials"), shall be and remain the absolute and exclusive property of PAPA JOHN'S. Neither CELEBRITY nor ABG has any right, title, or interest, and agrees that neither will claim any, in or to the Materials. Except as otherwise provided herein, all the results of ABG's provision of CELEBRITY'S Services hereunder, including, but not limited to, Materials (but in all cases specifically excluding the Celebrity Endorsement and the Personality Rights), will be deemed a "work made for hire" under the provisions of the United States Copyright Act (17 U.S.C. Sec. 101) and will be owned by PAPA JOHN'S for all purposes. If any Materials created under this Agreement are not legally capable of being a work-made-for-hire under the applicable copyright laws, then all right, title, and interest in such Materials is hereby assigned to Papa John's and CELEBRITY or ABG will execute any documents consistent herewith necessary to perfect such assignment. + +C. The Parties acknowledge that PAPA JOHN'S has no right, title or interest, and PAPA JOHN'S hereby agrees that PAPA JOHN'S will not claim any, in or to the Celebrity Endorsement, the Personality Rights, or any of CELEBRITY'S or ABG's other intellectual property rights. PAPA JOHN'S hereby acknowledges that PAPA JOHN'S exercise of the Celebrity Endorsement (including, without limitation, all uses of the Personality Rights) and all goodwill that is attached or may become attached to the foregoing shall inure solely to the benefit of ABG. + +D. Approval Standard. For purposes of this Agreement, "Approval" (and all grammatical variations thereof, e.g., Approve, Approved, etc.) shall be defined as ABG's prior written approval, which may be given or withheld in ABG's sole discretion. ABG has the right to Approve all uses of the Celebrity Endorsement and the Personality Rights, whether by PAPA JOHN'S or any of its approved designees (including, without limitation, the use of the Personality Rights in connection with any and all Products and Materials. PAPA JOHN'S hereby agrees that: (A) no Materials may be released or exhibited publicly, in any manner, unless and until ABG has Approved the same, (B) all Materials must be re-submitted for Approval each time a revision is made incorporating any changes, and (C) ABG'S Approval of Materials hereunder is specifically limited to Approval of the use of the Personality Rights contained therein, and that to the extent any materials owned by third parties (e.g., logos, locations, individuals, music, etc.) ("Third-Party Materials") are incorporated therein, PAPA JOHN'S shall be solely responsible for identifying such Third-Party Materials, and for obtaining an appropriate license from the owner(s) of such Third-Party Materials to secure all applicable rights to use and otherwise exploit such Third-Party Materials. + +E. Approval Process. + +3 + +Source: PAPA JOHNS INTERNATIONAL INC, 8-K, 6/17/2019 + + + + + +1. General. ABG shall respond to each initial request for Approval from PAPA JOHN'S ("First Request") within three (3) days of ABG's receipt of such request ("Approval Window"); provided, however that ABG's silence or failure to respond to the First Request prior to the expiration of the Approval Window shall be deemed ABG's disapproval of the Materials contained in the First Request for Approval. In the event that ABG is silent with respect to, or fails to reply to, the First Request prior to the expiration of the Approval Window, then PAPA JOHN'S shall be entitled to submit a second (2nd) request for Approval of the same Materials included in the First Request ("Second Request"), with a copy of the Materials and the request to ABG's Legal Department (using the contact information set forth in Section 12.F. of this Agreement). In the event that ABG is silent with respect to, or fails to reply to, the Second Request within three (3) days of ABG's receipt thereof, then ABG's silence with respect to, or failure to respond to, the Second Request shall be deemed ABG's Approval of the Materials included in the Second Request. PAPA JOHN'S hereby acknowledges that ABG's Approval of any particular Materials for a specific purpose shall only be deemed an Approval for said purpose. PAPA JOHN'S shall be required to re-submit any previously Approved Materials to the extent PAPA JOHN'S wishes to use the same for other purposes. PAPA JOHN'S hereby acknowledges that, in the event PAPA JOHN'S fails to obtain ABG's consent or approval for any act or omission requiring such consent or approval (e.g., use of Celebrity Endorsement or Personality Rights, etc.), the same shall be deemed a non-curable breach of this Agreement entitling, but not requiring, ABG to immediately terminate this Agreement. In the event that ABG expressly disapproves any Materials that are submitted by PAPA JOHN'S for ABG's Approval hereunder, ABG shall provide PAPA JOHN'S with a reason for such disapproval. + +2. Advertising & Promotion. PAPA JOHN'S shall create and submit to ABG, via email (as specified by ABG) the concept (e.g., story boards, mock-ups, etc.) ("Concept") for each of PAPA JOHN'S proposed advertising, marketing, and promotional efforts utilizing any of the Personality Rights for purposes of selling Products (each, an "Advertisement"). After Approval of such Concept, and prior to the public exhibition of any Advertisement, PAPA JOHN'S shall create and submit to ABG, via email (as specified by ABG), the completed Advertisement intended for public exhibition. After Approval of such Advertisement, PAPA JOHN'S shall be permitted to publicly exhibit the same, through those channels (e.g., broadcast television, Internet, radio) Approved by ABG, in each case, subject to the terms and conditions of this Agreement. + +3. Legal Lines. Upon ABG's reasonable request, uses of the Personality Rights shall bear appropriate copyright, trademark and credit notices, as provided by ABG ("Legal Lines"), either directly on the Materials using the same, or on stickers or labels affixed thereto, such placement to be mutually agreed upon by the Parties. + +4. PAPA JOHN'S shall not itself or through its agents or representatives or otherwise indirectly, make, issue, distribute or disseminate any information or statements to the press regarding ABG, CELEBRITY, Celebrity's Endorsement of PAPA JOHN'S Products and/or matters pertaining to or arising out of this Agreement (each a "Press Release"). In the event that PAPA JOHN'S desires to issue a Press Release, PAPA JOHN'S shall submit the same to ABG for Approval. If ABG has not responded in writing prior to the expiration of an Approval Window, then the submission shall be deemed disapproved. ABG shall have the right, but not the obligation, to include PAPA JOHN'S, Celebrity's Endorsement of PAPA JOHN'S Products, and the existence of a partnership between ABG and PAPA JOHN'S in connection with CELEBRITY in Press Releases, subject to PAPA JOHN'S approval, such approval not to be unreasonably withheld. + +4 + +Source: PAPA JOHNS INTERNATIONAL INC, 8-K, 6/17/2019 + + + + + +5. Brand Restrictions. PAPA JOHN'S shall not, during the Term or at any time thereafter: (I) defame or disparage CELEBRITY or the Personality Rights (or any portion thereof), nor shall PAPA JOHN'S place the CELEBRITY or the Personality Rights (or any portion thereof) in a negative light, whether in connection with this Agreement or otherwise, or (ii) utilize the Personality Rights (or any portion thereof) in association with, nor shall PAPA JOHN'S associate CELEBRITY with any of the following: (A) alcohol, drugs (including, without limitation, both prescription and non-prescription) or other supplements; (B) death; (C) pornography or other "adult only" or sexually explicit activities; (D) massage parlors, prostitution or any dating or escort activities; (E) weapons or ammunition; (F) denigration or discrimination against individuals based on race, national origin, gender, religion, disability, ethnicity, sexual orientation, gender identity or age; (G) incontinence; (H) weight loss/gain; (I) medical conditions (including, without limitation, hair loss); or (J) political campaigns or causes. + +6. Enforcement of Celebrity Endorsement and Personality Rights. ABG shall have the exclusive right, at ABG's sole cost and expense (excluding PAPA JOHN'S outside counsel fees and costs) and exercisable at ABG's sole discretion, to institute in its own name, and to control, with counsel of its own choosing, all claims, suits and/or actions against third parties relating to the Personality Rights, and other proprietary rights in and to the same ("Infringement Claim"), and ABG shall be entitled to receive and retain all amounts awarded, if any, as damages, profits or otherwise, in connection with such Infringement Claims. PAPA JOHN'S shall assist ABG to ensure that third parties do not unlawfully infringe on the Personality Rights. PAPA JOHN'S shall promptly notify ABG of any such infringements of which PAPA JOHN'S becomes aware. PAPA JOHN'S shall not take any action on account of, or in connection with, any Infringement Claim, other than to notify ABG of the same, and to cooperate with ABG, pursuant to this Section. PAPA JOHN'S hereby acknowledges that: (i) ABG and CELEBRITY have no obligation to take any action in connection with any Infringement Claim, and (ii) ABG and CELEBRITY shall incur no liability by reason of: (A) ABG's or CELEBRITY's failure or refusal to take any such action against any Infringement Claim, or (B) any settlement relating to any Infringement Claim to which ABG or CELEBRITY may agree. + +7. No Attack. PAPA JOHN'S shall not, during the Term or at any time thereafter, attack or challenge, or lend assistance to any third party in connection with an attack or challenge, of any right, title or interest of ABG in and to any Personality Rights (including, without limitation, copyrights, trademarks and/or patents), whether by way of: (i) an application for and/or an opposition against any intellectual property rights relating to the Personality Rights, (ii) adoption and/or application for and/or registration of any intellectual property rights (including, without limitation, domain names, business names, and social media accounts) that are confusingly similar to, that dilute, or that infringe, any of the Personality Rights, or (iii) any lawsuit, cancellation proceeding or action, or otherwise. PAPA JOHN'S shall not represent in any filing, presentation, document or other statement, whether written or verbal, that PAPA JOHN'S or any third party is the owner of the Personality Rights, and PAPA JOHN'S shall not use or display any of the foregoing except as expressly permitted herein. + +5 + +Source: PAPA JOHNS INTERNATIONAL INC, 8-K, 6/17/2019 + + + + + +4. Services. To facilitate PAPA JOHN'S usage of the right and license to the Celebrity Endorsement with respect to the Products as provided herein, during each Contract Year during the Term of the Agreement, subject to CELEBRITY's prior personal and professional obligations, and further subject to advance scheduling reasonable acceptable to ABG and CELEBRITY and to confirmation with respect to scheduling dates, times, and locations, and subject to Section 5(C) below, ABG agrees to cause CELEBRITY to provide the services set forth below ("Services"). ABG shall require CELEBRITY to provide the Services in a professional manner, subject to the terms and conditions of this Agreement. + +A. At least eight (8) "Service Days", including but not limited to: + +1. Production days. Up to four (4) production days (defined as a maximum of eight (8) consecutive hours each), with PAPA JOHN'S creative agency. + +2. Personal appearances. CELEBRITY shall appear at least (each of the following not to exceed six (6) consecutive hours): + +(A) One (1) day engaging with franchisees and team members at company-wide event(s); + +(B) One (1) day visiting Papa John's Pizza stores, date and locations to be mutually agreed upon by the Parties; and + +(C) One (1) day at a community event, date and location to be mutually agreed upon by the Parties. + +PAPA JOHN'S and ABG shall both use commercially reasonable efforts to schedule the dates, times and locations for Service Days so as to meet the reasonable needs of PAPA JOHN'S while not unreasonably conflicting with CELEBRITY's previously scheduled other commitments. PAPA JOHN'S understands that if Service Days are requested hereunder, then such Service Days may be coordinated with similar services for others entitled to the use of CELEBRITY's personal services (e.g., if Service Days include traveling to Las Vegas, Nevada, CELEBRITY and/or ABG may coordinate such Service Days to be performed during a previously scheduled trip to Las Vegas, Nevada). PAPA JOHN'S shall provide local hair, make-up and/or wardrobe stylists for CELEBRITY in connection with all Service Days hereunder, provided each such stylist, and all wardrobe selections, shall be pre- approved by CELEBRITY in his sole, absolute discretion. The timing allocated in Section 4(A) above for all Service Days shall be exclusive of travel time, but inclusive of time spent for makeup, wardrobe, and reasonable breaks. + +6 + +Source: PAPA JOHNS INTERNATIONAL INC, 8-K, 6/17/2019 + + + + + +B. Social media posts. ABG shall require CELEBRITY to post on each of CELEBRITY's Instagram (the page located at www.instagram.com/shaq and Personality's Instagram account (@shaq)), Twitter (the page located at www.twitter.com/shaq and Celebrity's Twitter account (@shaq)), and Facebook (the page located at www.facebook.com/shaq) at least one post (1) per month promoting Papa John's Products. Each post shall be created by PAPA JOHN'S, but subject to ABG's Approval in each instance. PAPA JOHN'S shall provide ABG and CELEBRITY with all suitable and necessary language, compliant with all Federal Trade Commission ("FTC") standards and requirements to include in each post (each a or the, "Required Disclosure") which shall clearly and conspicuously disclose to the public that ABG and/or CELEBRITY has been paid by PAPA JOHN'S in connection with such posts. Notwithstanding anything to the contrary contained in this Agreement, PAPA JOHN'S shall be solely responsible for ensuring that any and all Required Disclosures comply with all applicable laws, rules, regulations, and guidelines, including, without limitation, the FTC's "Guides Concerning the Use of Endorsements and Testimonials in Advertising" and PAPA JOHN'S shall indemnify, defend, and hold harmless the ABG Indemnified Parties (as hereinafter defined) from any and all liability arising out of the same, unless ABG or CELEBRITY materially modifies the Required Disclosure provided by PAPA JOHN'S (i.e. if the Required Disclosure provided by PAPA JOHN'S complied with all applicable laws, rules, regulations, and guidelines, and ABG or CELEBRITY's modification of the Required Disclosure causes such Required Disclosure to not comply all applicable laws, rules, regulations, and guidelines). + +C. Public Relations. + +1. Affiliation announcement. For the announcement of the Affiliation between Papa John's and CELEBRITY, ABG shall require CELEBRITY to provide business and consumer PR interviews, including the following, all of which shall be subject to ABG's Approval: + +(A) Two (2) broadcast television and three (3) print or online media interviews in New York City; + +(B) Two (2) approved photos for release (one at a Papa John's Pizza restaurant; one making pizza with CEO Steve Ritchie); + +7 + +Source: PAPA JOHNS INTERNATIONAL INC, 8-K, 6/17/2019 + + + + + +(C) One (1) social media post; + +(D) Quote for Press Release; + +(E) Business headshot; and + +(F) Business bio. + +2. During each Contract Year during the Term, ABG shall cause CELEBRITY to make himself available for sixty (60) total minutes of interview time promoting Papa John's, subject to CELEBRITY's prior personal and professional obligations, and further subject to advance scheduling reasonable acceptable to ABG and CELEBRITY. Upon PAPA JOHN'S reasonable request, (i) interviews may be broken up into smaller increments (e.g., five or ten minutes each), and (ii) ABG will cause CELEBRITY to participate in media and message training before each interview, in each case, subject to CELEBRITY's prior personal and professional obligations, and further subject to advance scheduling reasonable acceptable to ABG and CELEBRITY. + +D. New Co-Branded Products. ABG will permit CELEBRITY and PAPA JOHN'S to collaborate in good faith to develop one (1) or more co-branded Products using the Personality Rights. Any such co-branded Products shall be subject to the separate mutual written agreement of the Parties. + +E. Notwithstanding anything to the contrary contained in this Agreement, the Parties specifically agree that the Personality Rights shall not be used, in whole or in part, in connection with any Tie-In Programs (as hereinafter defined) without ABG's Approval in each instance. Except as specifically provided herein, PAPA JOHN'S hereby acknowledges and agrees that, both during the Term and at any and all times thereafter, PAPA JOHN'S has no right to, and PAPA JOHN'S shall not, affix or attach any of the Personality Rights, in any manner, to any of PAPA JOHN'S products or services (including, without limitation, Products) (e.g., either directly on any products or on any packaging therefor, etc.). For purposes of this Agreement, "Tie-In Program" shall be defined as any program or plan developed around a particular product or property and designed primarily to generate additional income related to such product or property (e.g., traffic builders, cross-promotions, third party programs involving the use of a premium or a third party's product and/or service), including, without limitation: (i) any program primarily designed to attract the consumer to purchase a product or service other than or in addition to the Products; and/or (ii) any cross-promotion with a third party and/or its products or services. + +F. Condition Precedent. PAPA JOHN'S expressly acknowledges that the obligations of ABG to require CELEBRITY to perform the Services specified hereunder are subject to the condition that all payments to ABG are current and up-to-date. + +8 + +Source: PAPA JOHNS INTERNATIONAL INC, 8-K, 6/17/2019 + + + + + +G. Pay or Play. In the event that PAPA JOHN'S fails to utilize any or all of the Services as and when the same are allocated and/or scheduled pursuant to the above (e.g., within a particular Contract Year), then: (A) the same shall not result in a reduction in any amounts due and/or payable to ABG hereunder, and (B) PAPA JOHN'S shall be deemed to have waived its right to utilize those particular Services (e.g., Service Days that are allocated for a particular Contract Year may not be carried into future Contract Years, or beyond the expiration or early termination of the Term) without ABG's Approval. + +H. No Dangerous Activity. The Parties acknowledge and agree that CELEBRITY shall not be required to participate in any physical activity during CELEBRITY's performance of any Services hereunder that may be of a dangerous nature or which may involve a risk of serious bodily injury to CELEBRITY and/or others, as determined by ABG and CELEBRITY in their collective sole and absolute discretion. + +I. Additional Services. Personality's rendition of additional services beyond the scope of the Services set forth herein shall at all times be subject to the mutual agreement of the Parties (including, without limitation, the negotiation of appropriate remuneration in connection therewith). PAPA JOHN'S acknowledges and agrees that (i) it is contemplated that PAPA JOHN'S and CELEBRITY will enter into one or more 'Franchise Agreement' pursuant to which, among other things, CELEBRITY (and/or CELEBRITY'S designee) will acquire a thirty percent (30%) ownership in nine (9) Atlanta-area Papa John's Pizza restaurants, and (ii) PAPA JOHN'S shall not, directly or indirectly, request, cause, or require CELEBRITY, under or in connection with any such 'Franchise Agreement' or otherwise (except as expressly set forth in this Agreement), (a) to provide to PAPA JOHN'S (including its designees) any services that are the same as or similar to the Services hereunder, or (b) to grant to PAPA JOHN'S (including its designees) any right or license to use any of the Personality Rights. PAPA JOHN'S further acknowledges that ABG, as successor in interest to CELEBRITY, is the sole and exclusive owner of a worldwide portfolio of Personality Rights, as well as other copyrights, trademarks and other intellectual property rights related to CELEBRITY, and the rights of publicity, and other rights in and to the name, image, likeness, persona, personality, voice, signature, and other indicia of, and rights of association and endorsement related to, CELEBRITY including, without limitation, pursuant to Section 43(a) of the United States Lanham Act (collectively, the "Shaq Rights"). PAPA JOHN'S further acknowledges and agrees that: (a) any and all use of the Shaq Rights and/or any intellectual property rights related to CELEBRITY (e.g. exploitation of a copyrighted photograph of CELEBRITY), whether in connection with the Products or otherwise, requires the consent and authorization of ABG in each instance, (b) ABG is the only person or entity that can authorize the use of Shaq Rights on or in connection with any products or services throughout the world, and (C) should PAPA JOHN's or any third party desire to manufacture, advertise, sell, offer or otherwise exploit any products or services related to CELEBRITY, any and all such acts would be a use of the Shaq Rights and would therefore require the prior written consent of ABG in each instance. + +9 + +Source: PAPA JOHNS INTERNATIONAL INC, 8-K, 6/17/2019 + + + + + +J. Reverse License. PAPA JOHN'S hereby grants to ABG and CELEBRITY, a royalty-free, perpetual, irrevocable, fully- paid, assignable, transferable, sublicensable right and license to utilize the Materials, in their entirety or any portions thereof, in all media now known or hereafter developed, throughout the universe (individually and collectively, "PJ Rights") as follows: (i) on or in connection the performance of the Services hereunder; (ii) in connection with historical and archival purposes (e.g., documentary, commentary, corporate retrospective, historical files on websites of ABG), so-called business-to-business uses and other non-commercial purposes; and (iii) for industry recognition purposes (e.g., award competition submissions); in each case, in all media now known or hereafter devised. For external or public uses in subsection (ii) and for all instances in subsection (iii), such license is subject to PAPA JOHN'S prior written approval, such approval not to be unreasonably withheld. + +5. Consideration. In consideration of the rights granted herein and the Services to be provided hereunder, PAPA JOHN'S will pay to ABG in each Contract Year of the Term, the following: + +A. Cash Payment. + +1. PAPA JOHN'S shall pay ABG a cash payment of: One Million Two Hundred Fifty Thousand U.S. Dollars (USD$1,250,000) for Contract Year 1, One Million Three Hundred Seventy Five Thousand U.S. Dollars (USD$1,375,000) for Contract Year 2, and One Million Five Hundred Thousand U.S. Dollars (USD$1,500,000) for Contract Year 3 (such cash payments for Contract Years 1-3 referred to herein as the "Cash Payment") for the services and rights provided hereunder. In addition to the Cash Payment and any other compensation payable to ABG (and, as applicable, CELEBRITY) hereunder, PAPA JOHN'S shall pay without limitation, usage of the union-covered materials produced hereunder, with usage applied against the Cash Payment at double scale (or such other applicable rate). Each of such Cash Payments shall be paid in four equal installments, as set forth in Section 5.A.3 below, as follows: + +(A) The first payment is due on the Effective Date for the First Contract Year, and March 1 for subsequent Contract Years; + +(B) The second payment is due June 1 for each Contract Year; + +(C) The third payment is due September 1 for each Contract Year; and + +(D) The fourth payment is due December 1 for each Contract Year. + +10 + +Source: PAPA JOHNS INTERNATIONAL INC, 8-K, 6/17/2019 + + + + + +2. Wire Instructions. PAPA JOHN'S shall be solely responsible for any costs and/or fees associated with making any and all payments to ABG as required under this Agreement, including, without limitation, wire transfer fees. PAPA JOHN'S shall pay all sums due to ABG by wire transfer to the following account, unless otherwise instructed by ABG: + +Payee: ABG-Shaq, LLC Bank of America One Bryant Park New York, NY 10036 Account Number: 483043584155 ABA Routing Number (for domestic transfers): Wire: 026009593 / ACH: 021000322 Swift Code (for international transfers): BOFAUS3N + +3. No Deductions. PAPA JOHN'S may not deduct from, setoff or offset the Cash Payments or any other amount payable to ABG for any reason. For purposes of illustration but without limitation, PAPA JOHN'S may not deduct: Union Fees, Other Fees, uncollectible accounts, wire transfer fees, bank fees or any other fees associated with making any and all payments to ABG, slotting fees, advertising or other expenses of any kind, the costs incurred in the operation of the Business, or the conversion of any currency into United States Dollars. + +4. Allocation. ABG may, in ABG's sole discretion, allocate and apply payments it receives from PAPA JOHN'S hereunder. Partial payment by PAPA JOHN'S to ABG of any amounts due hereunder shall not, in any circumstance, avoid default by PAPA JOHN'S as to the full amount of any such payments, and PAPA JOHN'S shall not be entitled to any return of the amount of any partial payments in the event of any expiration or termination of this Agreement. + +5. Taxes & Fees. All sales, use, value added, withholding, local privilege, excise taxes, tariffs, duties or other charges of any kind, character or description which may be levied or imposed upon any of the Products, PAPA JOHN'S business operation relating to the Products, or on any aspect of performance of this Agreement, shall be PAPA JOHN'S responsibility. ABG shall only be responsible for the actual taxes on ABG's net income resulting from this Agreement. + +6. Union Fees; Other Fees. PAPA JOHN'S hereby acknowledges that CELEBRITY is a member of SAG-AFTRA. In addition to and separate from the Cash Payment and any other compensation payable to ABG (and, as applicable, CELEBRITY) hereunder, for purposes of this Agreement, forty percent (40%) of the Cash Payment shall be allocated to union-covered services. If PAPA JOHN'S engages any performance or service of CELEBRITY hereunder in any way that is subject to the jurisdiction of any applicable union, guild or other organization of which CELEBRITY is a member (including, without limitation, SAG-AFTRA), either during or after the Term, then PAPA JOHN'S shall pay, as required by such union, guild or other organization, all minimum (and other, as applicable) payments or fees (or for SAG-AFTRA, minimum pension and welfare contributions) required to be made with respect to PAPA JOHN'S use of the Services hereunder ("Union Fee(s)"). PAPA JOHN'S shall be solely responsible for all Union Fee(s) and any costs and/or fees associated with making any and all payments to ABG as required under this Agreement, including, without limitation, wire transfer fees ("Other Fees"). In no event shall ABG or CELEBRITY be responsible for any Union Fees or Other Fees that may arise out of this Agreement. Upon PAPA JOHN'S reasonable request, and subject to CELEBRITY's and ABG's prior consultation with counsel of their own choosing, ABG shall work together in good faith with CELEBRITY and PAPA JOHN'S to have CELEBRITY sign a Screen Actors Guild contract for each session for tracking purposes. + +11 + +Source: PAPA JOHNS INTERNATIONAL INC, 8-K, 6/17/2019 + + + + + +7. Development. All costs and expenses of PAPA JOHN'S business (including, without limitation, the design, development, preparation, cooking, packaging, distribution, delivery, advertisement, marketing, promotion, offering for sale, sale, or other exploitation of the Products, and other costs and expenses related to the Materials and all Advertisements, including, without limitation, to the expense of compliance with the Approval requirements set forth herein) shall be borne by PAPA JOHN'S. + +8. Sub-Contractors. In the event PAPA JOHN'S wishes to sub-contract any or all of the operation of the Products or its related business hereunder (e.g., design of the Products, advertising of the Products, creation of Products, etc.) to any third party (e.g., ad agencies, photographers, videographers, producers, crew, etc.) (each, a "Sub-Contractor"), the same may only be done if and after ABG has given its Approval therefor. If requested by ABG, PAPA JOHN'S shall provide ABG with additional information about any proposed Sub- Contractor, such that ABG will have sufficient information to evaluate PAPA JOHN'S request for Approval of such Sub-Contractor. In the event ABG Approves any given Sub-Contractor, then such Sub-Contractor shall be permitted to carry out only that portion of the business for which ABG Approved such Sub-Contractor. PAPA JOHN'S shall use PAPA JOHN'S best efforts to ensure that all Sub-Contractors abide by the terms of this Agreement. All acts of all Sub-Contractors shall be deemed to be the acts of PAPA JOHN'S for all purposes of this Agreement. + +B. Award of PJI Restricted Stock Units. On the Effective Date or as soon as practicable thereafter (such date, the "Grant Date"), PJI will grant to CELEBRITY (as agent of ABG solely for purposes of receiving the RSUs and authorizing and irrevocably instructing PJI's transfer agent to deliver the shares of common stock issued upon vesting of the RSUs at each applicable Vesting Date to ABG) 87,136 restricted stock units of PJI (the "RSUs"). The RSUs will be granted pursuant to the PJI 2018 Omnibus Incentive Plan (the "Plan") and will be subject in all respects to the terms of the Plan and an applicable Restricted Stock Unit Agreement set forth in Exhibit A, which is attached hereto and incorporated by reference herein (the "Restricted Stock Unit Agreement"). Except as set forth in this Agreement or the Restricted Stock Unit Agreement, the RSUs will vest as to 31% [27,012] of the RSUs on the first anniversary of the Grant Date, as to 33% [28,755] of the RSUs on the second anniversary of the Effective Date, and as to 36% [31,369] of the RSUs on the third anniversary of the Effective Date (each of such dates, a "Vesting Date"). In the event of a Corporate Transaction, as defined in the Plan, the RSUs shall be treated in accordance with the terms of the Plan. + +12 + +Source: PAPA JOHNS INTERNATIONAL INC, 8-K, 6/17/2019 + + + + + +C. Expenses. In connection with all personal appearances and personal services (including, by way of example, all Service Days) to be performed by CELEBRITY pursuant to this Agreement, PAPA JOHN'S shall provide the following for CELEBRITY and two (2) travel companions: (i) corporate private jet, or other private air travel option; (ii) five-star hotel (suite level or higher for CELEBRITY), with separate rooms for travel companions; and (iii) private, high-end ground transportation to and from airports and appearance locations. + +6. Warranties and Additional Covenants. + +A. ABG represents and warrants to PAPA JOHN'S that (i) neither ABG nor CELEBRITY is a party to any oral or written agreement or understanding, which grants to any other entity or person a right or license to use the Celebrity Endorsement in connection with the advertisement, promotion or endorsement of any Competitive Products or would prevent, limit or hinder the performance of any of its obligations under this Agreement; (ii) the execution and delivery of this Agreement by ABG and/or ABG's performance of its obligations under this Agreement will not cause a violation or breach of any other Agreement to which ABG or CELEBRITY is party to; (iii) all endorsements of the Products by CELEBRITY that are Approved and actually used by PAPA JOHN'S in accordance with the terms and conditions of this Agreement reflect the honest opinions, findings, beliefs, or experiences of the CELEBRITY; and (iv) ABG has the full ability and right to enter into this Agreement and to perform, and cause CELEBRITY to perform, all of the obligations in this Agreement, as evidenced by the Inducement Letter set forth on Exhibit B, which is attached hereto and incorporated by reference herein. + +B. PAPA JOHN'S represents and warrants to ABG and CELEBRITY that (i) PAPA JOHN'S is not a party to any oral or written agreement or understanding that would prevent, limit or hinder the performance of any of its obligations under this Agreement; (ii) the execution and delivery of this Agreement by PAPA JOHN'S and/or PAPA JOHN'S performance of its obligations under this Agreement will not cause a violation or breach of any other Agreement to which PAPA JOHN'S is party to; (iii) PAPA JOHN'S has the full ability and right to enter into this Agreement and to perform all of the obligations in this Agreement; (iv) PAPA JOHN'S maintains appropriate policies, procedures, systems, and training, in each case consistent with prevailing industry standards: (A) for the production, distribution, and sale of Products, (B) to ensure that Products are safe for human consumption, (C) to ensure compliance with all applicable food safety regulations, and (D) to provide a level of customer service at least as favorable as is standard in its industry and that will not have a material adverse impact on the PAPA JOHN'S brand; (v) no injurious, deleterious or defamatory material, writing or images shall be used in connection with the Personality Rights, the Materials, or PAPA JOHN'S business; (vi) PAPA JOHN'S shall not create, incur or permit any encumbrance, lien, security interest, mortgage, pledge, assignment or other hypothecation upon this Agreement or permit the commencement of any proceeding or foreclosure action on this Agreement or to obtain any assignment thereof, whether or not involving any judicial or nonjudicial foreclosure sales; (vii) (A) PAPA JOHN'S owns all rights in and to the Products and the Materials, including by way of example and not limitation, any and all trademarks and service marks used for or in connection therewith (e.g., 'PAPA JOHN'S'), and (B) none of the design, development, preparation, cooking, packaging, distribution, delivery, advertisement, marketing, promotion, offering for sale, sale, or other exploitation of the Products or the Materials shall infringe any intellectual property right or otherwise violate any right of any third party; and (viii) PAPA JOHN'S has not and will not, during the Term or at any time after expiration of the Term, create any expenses chargeable to ABG or CELEBRITY without Approval. + +13 + +Source: PAPA JOHNS INTERNATIONAL INC, 8-K, 6/17/2019 + + + + + +C. Each party acknowledges and agrees that (i) all copyrights and trademarks used in connection herewith that are owned by a party shall be and remain the sole and complete property of such party; (ii) the other party shall not at any time acquire or claim any right, title or interest of any nature whatsoever in any such copyright or trademark by virtue of this Agreement; (iii) the other party shall not contest or assist others to contest the validity of all such copyrights and trademarks; and (iv) it will not incur or create any expenses chargeable to the other party. + +D. Each Party represents and warrants to the other that it will comply with all rules, regulations, laws, orders, decrees, and ordinances of each and every country or political subdivision thereof, having legal jurisdiction over any aspect of their respective activities under this Agreement including specifically, but not limited to, the use of the Celebrity Endorsement in Materials for and on behalf of PAPA JOHN'S, and the design, development, preparation, cooking, packaging, labeling, distribution, delivery, advertisement, marketing, promotion, offering for sale, sale, or other exploitation of the Products by and on behalf of PAPA JOHN'S. + +E. ABG agrees to execute (and require CELEBRITY to execute) such other documents as reasonably requested by PAPA JOHN'S as are necessary to effectuate the intent of this Agreement, including the grant of RSUs hereunder. + +F. Notwithstanding anything to the contrary contained in this Agreement, PAPA JOHN'S acknowledges and agrees that ABG and/or CELEBRITY are party(ies) to one or more agreement(s) with one or more third party(ies) for, among other things, the use of Celebrity's Endorsement and the Personality Rights during the Term (or portions thereof) for and in connection with (i) the following food and beverage products typically consumed for breakfast: bagels, breakfast sandwiches (i.e., sandwiches filled primarily with food products that are typically consumer at breakfast such as scrambled eggs and sausage patties), pastries, doughnuts, coffee, espresso and cappuccino, (ii) fast-casual dining, chain restaurants (i.e., business(es) which prepare(s) and serve(s) food and beverages to customers in exchange for money) with menus primarily focused on chicken dishes, (iii) high-end dining restaurant(s) (i.e., business(es) which prepare(s) and serve(s) food and beverages to customers in exchange for money) with menus primarily focused on Americanized dishes similar to those customarily found at steakhouses (which may include pizzas/flatbreads, bread sides, desserts, etc. as part of their menu), and (iv) 'hydration' frozen ice bars, 'energy' frozen ice bars, and 'recovery' frozen ice bars, and energy drinks (individually and collectively, the "Existing Agreements"); and that ABG's and CELEBRITY's performance under the Existing Agreements shall not be deemed a breach of this Agreement by ABG or CELEBRITY. + +14 + +Source: PAPA JOHNS INTERNATIONAL INC, 8-K, 6/17/2019 + + + + + +7. Termination. + +A. Termination by PAPA JOHN'S. Without prejudice to any other rights it may have in law, equity or otherwise, PAPA JOHN'S shall have the right to terminate this Agreement upon written notice to ABG, as determined by PAPA JOHN'S in its sole discretion, exercising good-faith business judgment, in the event that any of the following occur during the Term of this Agreement (1) CELEBRITY's conviction or plea of guilty to a crime of moral turpitude; (2) CELEBRITY's or ABG's public malignment or disparagement of PAPA JOHN'S; (3) CELEBRITY or ABG intentionally makes any voluntary statement or commits any voluntary act that is or becomes generally known to the public which such statement or act both (a) has the effect of egregiously disparaging or insulting any group of the community on the basis of ethnicity, religion, race, national origin, gender, or sexual orientation, and (b) is the direct cause of a material adverse impact on PAPA JOHN'S actual sales of pizza; (4) (a) CELEBRITY's death or permanent incapacitation, or (b) CELEBRITY'S inability to perform the Services of this Agreement except due to a Force Majeure Event; or (5) CELEBRITY's or ABG's breach of any material term of this Agreement, which breach CELEBRITY or ABG fails to cure within thirty (30) days (or to the extent not possible to cure within such period, commence to cure) after CELEBRITY's or ABG's receipt of PAPA JOHN'S written notice of such breach. Specifically, if this Agreement is terminated for any of the reasons provided in Section 7.A.(1)-(3), PAPA JOHN'S right to terminate this Agreement shall be PAPA JOHN'S sole remedy for the same. + +B. Termination by ABG. Without prejudice to any other rights it may have in law, equity or otherwise, ABG shall have the right to terminate this Agreement upon written notice to PAPA JOHN'S, as determined by ABG in its sole discretion, exercising good-faith business judgment, in the event that (1) during the Term of this Agreement, any member of PJI's executive team or any member of the Board of Directors of PJI (a) is convicted of or pleads guilty to a crime of moral turpitude, (b) disparages or publicly maligns CELEBRITY or ABG; (2) PAPA JOHN'S breaches any material term of this Agreement, which breach PAPA JOHN'S fails to cure within thirty (30) days after PAPA JOHN'S receipt of ABG's written notice of such breach, it being understood such period shall be five (5) business days with respect to the payment of any monies, or (c) any member of PJI's executive team or any member of the Board of Directors of PJI or any authorized spokesperson of PAPA JOHN'S intentionally makes any voluntary statement or commits any voluntary act that is or becomes generally known to the public which such statement or act has the effect of egregiously disparaging or insulting any group of the community on the basis of ethnicity, religion, race, national origin, gender, or sexual orientation. + +15 + +Source: PAPA JOHNS INTERNATIONAL INC, 8-K, 6/17/2019 + + + + + +C. Effect of Termination - Use Beyond Term. Upon expiration or termination of this Agreement by PAPA JOHN'S (but not in the event of termination by ABG), and subject to PAPA JOHN'S ongoing compliance with the terms and conditions of this Agreement, PAPA JOHN'S shall have the following rights to use the Celebrity Endorsement solely as follows: (i) for a period of six (6) months following the effective date of expiration or termination, PAPA JOHN'S shall have the right to continue to use, display and distribute copies of Materials which bear the Celebrity Endorsement and which were printed and published, or irrevocably booked for publication or display with a third party, prior to the effective date of expiration or termination; and (ii) PAPA JOHN'S shall have the right, without restriction, to the in-house, non-commercial use of any Materials. Such use may include in-house exhibition for historical, educational or commemorative purposes. Provided that PAPA JOHN'S has exerted its best efforts to cease use of the Celebrity Endorsement and/or Personality Rights as provided above, any incidental use of the Celebrity Endorsement and/or Personality Rights that may occur or be discovered for the three (3) month period following such period shall not be deemed a breach of this Agreement; provided, however, that in any event, all use of the Celebrity Endorsement and/or Personality Rights must cease by no later than nine (9) months following the effective date of expiration or termination of this Agreement. + +D. Effect of Termination - Cash Consideration. + +a. Termination by PAPA JOHN'S. If this Agreement is terminated by PAPA JOHN'S for any of the reasons provided in Section 7.A. above, then ABG shall be entitled to the pro-rata share of the respective Cash Payment for the then-current Contract Year as set forth in Section 5.A. above, determined by multiplying the Cash Payment for such Contract Year by a fraction, the numerator of which is the number of days elapsed in such Contract Year and the denominator of which is the total number of days in such Contract Year, and such amounts shall be immediately due as of the effective date of termination and paid to ABG. + +b. Termination by ABG. If this Agreement is terminated by ABG for any of the reasons provided in Section 7.B. above, then any and all unpaid amounts under this Agreement for the eighteen (18) months following the effective date of termination (including, without limitation, any balance due of the Cash Payment as of the effective date of termination, in addition to any and all of the Cash Payments that would have become payable during the next eighteen (18) months but for the termination) shall be immediately due as of the effective date of termination and paid to ABG; provided, however, that in the event there is less than eighteen (18) months remaining in the Term as of the effective date of such termination, then any and all unpaid amounts under this Agreement for the balance of the Term (including, without limitation, any balance due of the Cash Payment as of the effective date of termination, in addition to any and all Cash Payments that would have become payable but for the termination) shall be immediately due as of the effective date of termination and paid to ABG. + +16 + +Source: PAPA JOHNS INTERNATIONAL INC, 8-K, 6/17/2019 + + + + + +E. Effect of Termination - Awards of RSUs. Notwithstanding anything to the contrary contained in this Agreement or the Restricted Stock Unit Agreement: + +a. Termination by PAPA JOHN'S. If this Agreement is terminated by PAPA JOHN'S for any of the reasons set forth in Section 7.A. above, then CELEBRITY shall be entitled to immediately vest in the pro-rata share of the respective number of RSUs for the then-current Contract Year as set forth in Section 5.B. above, determined by multiplying the number of RSUs for such Contract Year by a fraction, the numerator of which is the number of days elapsed in such Contract Year and the denominator of which is the total number of days in such Contract Year, and such RSUs shall vest immediately as of the effective date of termination. + +b. Termination by ABG. If this Agreement is terminated by ABG for any of the reasons provided in Section 7.B. above, then CELEBRITY shall be entitled to immediately vest in all of the RSUs for the eighteen (18) months following the effective date of termination (including, without limitation, any balance of unvested RSUs that were due to vest as of the effective date of termination, in addition to any and all of the RSUs that would have vested during the next eighteen (18) months but for the termination); provided, however, that in the event there is less than eighteen (18) months remaining in the Term as of the effective date of such termination, then any and all of the balance of the RSUs shall vest immediately as of the effective date of termination. + +8. Indemnification and Insurance. + +A. ABG's Indemnification Obligations. ABG shall indemnify, defend and hold harmless PAPA JOHN'S and its current and future parents, subsidiaries, affiliated companies and each of their respective current and future officers, directors, shareholders, employees, agents, attorneys, and each of their respective successors and assigns (individually and collectively, "PAPA JOHN'S Indemnified Party(ies)") from and against any and all third-party claims, liabilities, demands, causes of action, judgments, settlements, costs and expenses (including, without limitation, reasonable outside attorneys' fees and court costs) (collectively, "Claims") arising out of or in connection with any one (1) or more of the following: (i) the breach by ABG of any of its express representations, express warranties, or express covenants in this Agreement; or (ii) the failure by ABG or CELEBRITY to perform any of its obligations under this Agreement. ABG shall not be liable to PAPA JOHN'S or any third party under this Section 8.A. to the extent that PAPA JOHN'S is required to indemnify ABG pursuant to Section 8.B. below. + +B. PAPA JOHN'S Indemnification Obligations. PAPA JOHN'S shall indemnify, defend and hold harmless CELEBRITY, ABG and its current and future parents, subsidiaries, affiliated companies and each of their respective current and future officers, directors, shareholders, employees, agents, attorneys, and each of their respective successors and assigns (individually and collectively, "ABG Indemnified Party(ies)") from and against any and all direct and third-party Claims, arising out of or in connection with any one (1) or more of the following: (i) the breach by PAPA JOHN'S of any of its express or implied representations, warranties or covenants in this Agreement; (ii) the failure by PAPA JOHN'S to perform any of its obligations under this Agreement; (iii) the design, development, preparation, cooking, packaging, distribution, delivery, advertisement, marketing, promotion, offering for sale, sale, or other exploitation of the Products, the Materials, or any Advertisements (including, without limitation, any product liability, false advertising and/or infringement Claims); and (iv) any acts, whether by omission or commission, by PAPA JOHN'S (including any of its franchisees, vendors, and store operators), which may arise out of, in connection with, or is any way related to any of the Products, the Materials, PAPA JOHN'S business and/or this Agreement. PAPA JOHN'S shall not be liable to ABG or any third party under this Section 8.B. to the extent that ABG is required to indemnify PAPA JOHN'S pursuant to Section 8.A. above. PAPA JOHN'S hereby agrees that ABG's Approval shall not waive, diminish or negate any of PAPA JOHN'S indemnification obligations to the ABG Indemnified Parties hereunder. + +17 + +Source: PAPA JOHNS INTERNATIONAL INC, 8-K, 6/17/2019 + + + + + +C. Indemnification Process. The Party to be indemnified hereunder (the "Indemnitee") must give the indemnifying Party hereunder (the "Indemnitor") prompt written notice of any Claim, and the Indemnitor, in its sole discretion, may then take such action as it deems advisable to defend such Claim on behalf of the Indemnitee. In the event that appropriate action is not taken by the Indemnitor within thirty (30) days after the Indemnitor's receipt of written notice from the Indemnitee, the Indemnitee shall have the right to defend such Claim with counsel reasonably acceptable to the Indemnitor, and no settlement of any such Claim may be made without the prior written approval of the Indemnitor, which approval shall not be unreasonably withheld, conditioned or delayed. Even if appropriate action is taken by the Indemnitor, the Indemnitee may, at its own cost and expense, be represented by its own counsel in such Claim. In any event, the Indemnitee and the Indemnitor shall keep each other fully advised of all developments and shall cooperate fully with each other in all respects with respect to any such Claim. + +D. Insurance. PAPA JOHN'S shall procure and maintain, at its sole cost and expense, and use commercially reasonable efforts cause its Sub-Contractors to obtain, at their sole cost and expense, during the Term and for a period of three (3) years thereafter ("Insurance Period"), comprehensive general liability insurance (including, without limitation, product liability insurance, inventory insurance, worker's compensation insurance, and advertising injury insurance), to defend and protect the Parties against claims arising out of or in connection with PAPA JOHN's business, the Materials, the Products, and Advertisements therefor. Insurance must be obtained from a company reasonably acceptable to ABG, in an amount not less than Five Million United States Dollars ($5,000,000 USD) in the aggregate, or PAPA JOHN'S standard insurance policy limits, whichever is greater. + +E. Within five (5) business days of the date on which this Agreement is fully executed, PAPA JOHN'S shall submit to ABG a certificate of insurance naming each of ABG, CELEBRITY and Authentic Brands Group, LLC as additional insureds ("COI"), which COI, or a renewal or replacement thereof, shall remain in force at all times during the Insurance Period, and shall require the insurer to provide at least thirty (30) days' prior written notice to PAPA JOHN'S, and all additional insureds, of any termination, cancellation or modification thereof. + +18 + +Source: PAPA JOHNS INTERNATIONAL INC, 8-K, 6/17/2019 + + + + + +F. In the event that any insurance policy required hereunder includes or permits a waiver of subrogation, such waiver shall apply to ABG and CELEBRITY. In the event that any insurance policy required hereunder provides for a waiver of subrogation in the event that such waiver is required by a third-party agreement, then this Agreement shall be deemed to require such waiver. PAPA JOHN'S shall notify ABG of all claims regarding the Personality Rights, Materials and/or Products under any of the foregoing policies of insurance promptly upon the filing thereof. PAPA JOHN'S indemnification obligations hereunder shall not be limited by the amount of insurance requirements hereunder. ABG shall be entitled to its proportionate share of the insurance proceeds received by PAPA JOHN'S in respect to the Celebrity Endorsement and/or the Personality Rights, and PAPA JOHN'S shall report and pay to ABG any such insurance proceeds at the same time as the next quarterly installment of the Cash Payment is due. + +G. LIMITATION OF LIABILITY. TO THE MAXIMUM EXTENT PERMISSIBLE UNDER APPLICABLE LAW, NEITHER ABG NOR AUTHENTIC BRANDS GROUP LLC NOR CELEBRITY SHALL BE LIABLE TO PAPA JOHN'S FOR ANY CONSEQUENTIAL, INCIDENTAL, PUNITIVE, EXEMPLARY, OR SPECIAL DAMAGES, REGARDLESS OF THE FORM OR ACTION, WHETHER IN CONTRACT OR IN TORT, EVEN IF ABG OR AUTHENTIC BRANDS GROUP LLC HAS BEEN ADVISED OF THE POSSIBLITY OF SUCH DAMAGES OR LOSSES. IN NO EVENT SHALL ABG'S, AUTHENTIC BRANDS GROUP LLC'S, AND CELEBRITY'S TOTAL LIABILITY UNDER THIS AGREEMENT EXCEED THE AMOUNTS ACTUALLY RECEIVED BY ABG (EXCLUSIVE OF REIUMBURSEMENT OF EXPENSES) HEREUNDER, REGARDLESS OF THE NUMBER OR TYPE OF CLAIMS. + +9. Arbitration. In the event a dispute arises under this Agreement which cannot be resolved, such dispute shall be submitted to arbitration and resolved by a single arbitrator (who shall be a lawyer) in accordance with the Commercial Arbitration Rules of the American Arbitration Association then in effect. All such arbitration shall take place at the office of the American Arbitration Association located in or nearest to New York, New York. Each Party is entitled to depose at least two (2) fact witnesses and any expert witness designated by the other Party, and to conduct such other discovery as the arbitrator deems appropriate. The award or decision rendered by the arbitrator shall be final, binding and conclusive and judgment may be entered upon such award by any court. + +10. Confidentiality and Non-Disparagement. Each Party shall hold all confidential information received pursuant to this Agreement, including the terms and conditions of this Agreement and CELEBRITY'S personal and/or business affairs, confidential and may only disclose them (i) with the prior written consent of the other Party, (ii) where required by law or (iii) to such party's advisors, attorneys or other designees, as long as such recipients also keep such information confidential. Nevertheless, after the parties have announced the association between CELEBRITY and PAPA JOHN's or the association otherwise becomes public, each party may respond, discuss and comment in a favorable and positive manner that CELEBRITY is associated with PAPA JOHN'S during any public events and/or interviews, subject to the requirements herein. All Parties agree not to disparage or make derogatory comments, verbal or written, regarding the other Party during the Term of the Agreement, and for one year thereafter. + +19 + +Source: PAPA JOHNS INTERNATIONAL INC, 8-K, 6/17/2019 + + + + + +11. Force Majeure. If, at any time during the Term, CELEBRITY and/or ABG are prevented, hampered or interrupted by, or interfered with in, in any manner whatsoever, fully performing either of their duties hereunder, by reason of: any present or future statute, law, ordinance, regulation, order, judgment or decree, whether legislative, executive or judicial (whether or not valid); any act of God, earthquake, fire, flood, epidemic, accident, explosion or casualty; any lockout, boycott, strike, labor controversy (including, without limitation, any threat of the foregoing); any riot, civil disturbance, war or armed conflict (whether or not there has been an official declaration of war or official statement as to the existence of a state of war), invasion, occupation, intervention of military forces or act of public enemy; any embargo, delay of a common carrier, inability without default on CELEBRITY and/or ABG part to obtain sufficient material, labor, transportation, power or other essential commodity required in the conduct of its business; any cause beyond the reasonable control of CELEBRITY and/or ABG; or any other cause of any similar nature (each of the foregoing, a "Force Majeure Event"), then CELEBRITY'S and/or ABG's obligations hereunder shall be suspended as often as any such Force Majeure Event occurs and during such period(s) of time as such Force Majeure Event(s) exist and such non-performance by shall not be deemed to be a breach of this Agreement by CELEBRITY or ABG, or a forfeiture of any of CELEBRITY'S or ABG's rights hereunder. + +12. Miscellaneous. + +A. Severability. If any term or provision of this Agreement shall be declared illegal, invalid, void or unenforceable by any judicial or administrative authority, then (i) such provision shall be eliminated to the minimum extent necessary, and (ii) such provision shall be reformed and rewritten so as to most closely reflect the intention of ABG and PAPA JOHN'S, such that this Agreement shall otherwise remain in full force and effect and enforceable. + +B. Entire Agreement. This Agreement shall constitute the entire understanding between ABG, CELEBRITY and PAPA JOHN'S with respect to the subject matter hereof, and cannot be altered or modified except by an agreement or amendment in writing, signed by all parties. + +C. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to its principles of conflicts of law. + +20 + +Source: PAPA JOHNS INTERNATIONAL INC, 8-K, 6/17/2019 + + + + + +D. Waiver. The failure at any time of any party to demand strict performance of another party of any of the terms, covenants or conditions set forth in this Agreement will not be construed as a continuing waiver or relinquishment thereof, and any party may, at any time, demand strict and complete performance of any other party of such terms, covenants, and conditions. + +E. No Joint Venture. This Agreement does not constitute and shall not be construed as constituting a partnership or joint venture between PAPA JOHN'S and ABG or CELEBRITY. Neither party shall have any right to obligate or bind the other party in any manner whatsoever, and nothing contained herein shall give, or is intended to give, any rights of any kind to any third person. + +F. Notices. All notices, samples, claims, certificates, requests, demands, and other communications (other than payments) desired or required hereunder will be made in writing and will be deemed to have been duly given if delivered to the party address by hand, or by other means of express courier service, addressed as follows: + +To PAPA JOHN'S: Papa John's International, Inc. and Papa John's Marketing Fund, Inc. 2002 Papa John's Boulevard Louisville, Kentucky 40299 With an electronic copy to: Caroline_Oyler@papajohns.com To ABG: (i) If to ABG for questions about submitting Approval requests: + +c/o Authentic Brands Group, LLC 1411 Broadway, 4th Floor New York, NY 10018 Attention: Approvals Department With electronic copies to: approvals@abg-nyc.com; CSmeeton@abg-nyc.com; PRogers@abg-nyc.com; and Mbergson@abg-nyc.com Facsimile Number: (212) 760-2419 + +(ii) If to ABG for any other reason: + +c/o Authentic Brands Group, LLC 1411 Broadway, 4th Floor New York, NY 10018 Attention: Legal Department With an electronic copy to: legaldept@abg-nyc.com Facsimile Number: (212) 760-2419 + +21 + +Source: PAPA JOHNS INTERNATIONAL INC, 8-K, 6/17/2019 + + + + + +G. Rights Cumulative. Except as expressly set forth herein, all rights and remedies conferred upon or reserved by the Parties in this Agreement shall be cumulative and concurrent and shall be in addition to all other rights and remedies available to such Parties at law or in equity or otherwise, including, without limitation, requests for temporary and/or permanent injunctive relief. Such rights and remedies are not intended to be exclusive of any other rights or remedies and the exercise by either Party of any right or remedy herein provided shall be without prejudice to the exercise of any other right or remedy by such Party provided herein or available at law or in equity. + +H. Equitable Relief. PAPA JOHN'S acknowledges that any breach by PAPA JOHN'S shall cause ABG irreparable harm for which there is no adequate remedy at law, and in the event of such breach, ABG shall be entitled to, in addition to other available remedies, injunctive or other equitable relief, including, without limitation, interim or emergency relief, including, without limitation, a temporary restraining order or injunction, before any court with applicable jurisdiction, to protect or enforce its rights. + +I. Any sections and any other obligations under the provisions of this Agreement which, by their term or implication, have a continuing effect, shall survive any expiration or termination of this Agreement. + +J. Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, but all of which together shall constitute one (1) agreement binding on all Parties hereto notwithstanding that all of the Parties hereto are not signatories to the same counterpart. Each of the Parties agrees that an electronic signature evidencing a Party's execution of this Agreement shall be effective as an original signature and may be used in lieu of the original for any purpose. + +[Signature Page Follows] + +22 + +Source: PAPA JOHNS INTERNATIONAL INC, 8-K, 6/17/2019 + + + + + +IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement effective the date first above written. + +Papa John's Marketing Fund, Inc. ABG-Shaq, LLC Date: 6/6/19 Date: June 11, 2019 By: /s/ Steve Ritchie By: Jay Dubiner Title: President & CEO Title: General Counsel Papa John's International, Inc. Date: 6/6/19 By: /s/ Steve Ritchie Title: President & CEO + +23 + +Source: PAPA JOHNS INTERNATIONAL INC, 8-K, 6/17/2019 \ No newline at end of file diff --git a/full_contract_txt/PaperexchangeComInc_20000322_S-1A_EX-10.4_5202103_EX-10.4_Co-Branding Agreement.txt b/full_contract_txt/PaperexchangeComInc_20000322_S-1A_EX-10.4_5202103_EX-10.4_Co-Branding Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..3678f7612e147ff58ad53c7ca2365d70bf5e16b5 --- /dev/null +++ b/full_contract_txt/PaperexchangeComInc_20000322_S-1A_EX-10.4_5202103_EX-10.4_Co-Branding Agreement.txt @@ -0,0 +1,989 @@ +Exhibit 10.4 + + CO-BRANDING AGREEMENT + +This Co-Branding Agreement (this "Agreement") dated September 30, 1999 (the "Effective Date") is entered into between VerticalNet, Inc., a Pennsylvania corporation having a principal place of business at 700 Dresher Road, Suite 100, Horsham, Pennsylvania, PA 19044 ("VerticalNet"), and PaperExchange.com, LLC, a Delaware limited liability company having a principal place of business at 545 Boylston Street, 8th Floor, Boston, MA 02116 ("PaperExchange"). In consideration of the mutual covenants herein, and intending to be legally bound hereby, the parties agree as follows: + +1. DEFINITIONS + + 1.1. Affiliate shall mean, when used with reference to a party, any individual or entity directly or indirectly controlling, controlled by or under common control with such party. For purposes of this definition, "control" means the direct or indirect ownership of at least 50% of the outstanding voting securities of a party, or the right to control the policy decisions of such party. + + 1.2. Career Center Net Revenue shall have the meaning ascribed thereto in Section 7.1.1 [Co-Branded Career Center]. + + 1.3. Co-Branded Career Center shall mean the "Career Center" portion of Pulp and Paper Online located at: http://www.pulpandpaperonline.com/Content/CareerCenter/Home/JobScan_Home.asp (or a successor Site thereto). + + 1.4. Co-Branded Equipment Listings shall mean the "Auctions" portion of Pulp and Paper Online located at: http://www2.pulpandpaperonline.com/content/auctions/home.asp (or a successor Site thereto). + + 1.5. Co-Branded Sites shall mean the Co-Branded Career Center and the Co-Branded Equipment Listings. + + 1.6. Co-Branded URLs shall mean the mutually agreed-upon URLs which shall be registered jointly by VerticalNet and PaperExchange and shall route users through to the Co-Branded Sites. + + 1.7. Confidential Information shall mean all proprietary and confidential information of a party, including, without limitation, trade secrets, technical information, business information, sales information, customer and potential customer lists and identities, product sales plans, sublicense agreements, inventions, developments, discoveries, software, know-how, methods, techniques, formulae, data, processes and other trade secrets and proprietary ideas, whether or not protectable under patent, trademark, copyright or other areas of law, that the other party has access to or receives, but does not include information that (a) is or becomes publicly available through no fault of receiving party; (b) was already known to the receiving party at the time it was disclosed to the receiving party, as evidenced by written records of the receiving party; (c) is independently developed by employees of the receiving party who had no knowledge of or + +* Confidential Treatment Requested: material has been omitted and filed separately with the Commission. + +access to such information, as evidenced by written records of the receiving party; or (d) is received from a third party who is under no obligation of confidentiality to the disclosing party. + + 1.8. Equipment Listings Net Revenue shall have the meaning ascribed thereto in Section 7.1.2 [Co-Branded Equipment Listings]. + + 1.9. Initial Term shall mean the Effective Date through the day prior to the fourth anniversary of the Effective Date, unless earlier terminated pursuant to Section 8. + + 1.10. Intellectual Property shall mean any and all trade secrets, patents, copyrights, trademarks, URLs, trade dress, brand features, know-how and similar rights of any type under the laws of any applicable governmental authority, including, without limitation, all applications and registrations relating to any of the foregoing. + + 1.11. Intellectual Property Rights shall mean all rights in and to Intellectual Property. + + 1.12. Link shall mean a link (including, but not limited to, a hyperlink, button or banner) that connects two Sites in a manner so that when a user clicks on the link, the user is transferred directly from one Site to a second Site. A "Link from Site A to Site B" indicates that Site A is the Site of origin and Site B is the Site to which the user is linked. + + 1.13. Net Advertising Revenue shall mean the gross amount billed to an advertiser for the sale of advertising on the Third Party Advertising Allocation on the PaperExchange Site, less (a) credits for claims, allowances, retroactive price reductions or returned goods, and (b) sales, excise, use, value-added and other similar taxes (excluding income taxes) actually paid, if applicable. + + 1.14. Packaging Online shall mean the Site located at www.packagingonline.com (or a successor Site thereto). + + 1.15. PaperExchange Career Content shall have the meaning ascribed thereto in Section 2.2 [CO-BRANDED CAREER CENTER AND CO-BRANDED ...]. + + 1.16. PaperExchange Competitor shall mean any exchange, auction or reverse auction for the sale, purchase and/or exchange of pulp, paper and paper packaging. + + 1.17. PaperExchange Equipment Content shall have the meaning ascribed thereto in Section 2.2 [CO-BRANDED CAREER CENTER AND CO-BRANDED ...]. + + 1.18. PaperExchange Deliverable shall mean any good, service or other item to be delivered or made available by PaperExchange. + + 1.19. PaperExchange Home Page shall mean the home page located at the PaperExchange Site. + + 1.20. PaperExchange Link shall mean a Link that contains a PaperExchange Mark and will take users of other Sites to the PaperExchange Home Page. + + 2 + +Source: PAPEREXCHANGE COM INC, S-1/A, 3/22/2000 + + + + + + 1.21. PaperExchange Mark shall mean any trademark, service mark, trade name, domain name, design or logo of PaperExchange. + + 1.22. PaperExchange Revenue shall mean the gross revenue received by PaperExchange from Transaction Fees less (a) credits for claims, allowances, retroactive price reductions or returned goods, and (b) sales, excise, use, value-added and other similar taxes (excluding income taxes) actually paid. + + 1.23. PaperExchange Site shall mean the Site located at www.PaperExchange.com (or a successor Site thereto). + + 1.24. Pulp and Paper Online shall mean the Site located at www.pulpandpaperonline.com (or a successor Site thereto). + + 1.25. Pulp and Paper Online Competitor shall mean any online vertical community portal for professionals in the pulp and paper industry (other than Pulp and Paper Online and PaperExchange). + + 1.26. Renewal Term shall have the meaning ascribed thereto in Section 8.1 [Automatic Renewal]. + + 1.27. Site shall mean an Internet World Wide Web site. + + 1.28. Storefront shall mean a Site contained in (and linked to) a VerticalNet Site that, among other things, provides information regarding an advertiser and the advertiser's products and/or services, links a visitor to the advertiser's website, and/or generates sales leads for the advertiser from interested visitors, but does not include direct e-commerce fulfillment, such as catalog sales. + + 1.29. Term shall mean the Initial Term and any Renewal Terms. + + 1.30. Third Party Advertising Allocation shall have the meaning ascribed thereto in Section 4.1 [Advertisements on the PaperExchange Site]. + + 1.31. Transaction Fees shall mean the fees received by PaperExchange from third parties in consideration for facilitating the purchase and/or sale of pulp and/or paper through the PaperExchange Site. + + 1.32. VerticalNet Archived Content shall have the meaning ascribed thereto in Section 3.2 [VERTICALNET CONTENT]. + + 1.33. VerticalNet Content shall have the meaning ascribed thereto in Section 3.1 [VERTICALNET CONTENT]. + + 1.34. VerticalNet Deliverable shall mean any good, service or other item to be delivered or made available by VerticalNet. + + 1.35. VerticalNet Link shall mean a Link that contains a VerticalNet Mark and will take users of other Sites to a page of Pulp and Paper Online. + + 3 + + 1.36. VerticalNet Mark shall mean any trademark, service mark, trade name, domain name, design or logo of VerticalNet. + +2. CO-BRANDED CAREER CENTER AND CO-BRANDED EQUIPMENT LISTINGS + + 2.1. No later than seven days after the Effective Date, VerticalNet shall, at VerticalNet's sole cost and expense, design, develop and implement the Co-Branded Sites with the overall "look and feel" agreed upon by VerticalNet and PaperExchange, as shown in Exhibit A. After the Co-Branded Sites are implemented, VerticalNet shall notify PaperExchange in writing at least five days prior to making any material change to a Co-Branded Site, including, without limitation, a change in the location, sizing or placement of the PaperExchange Links. If PaperExchange does not notify VerticalNet of its rejection of such change within five days, PaperExchange shall be deemed to have approved such change. VerticalNet shall design, host and maintain the Co-Branded Sites at its sole cost and expense. Within 30 days after the Effective Date, VerticalNet and PaperExchange shall agree upon the Co-Branded URLs. The parties shall register the Co-Branded URLs reasonably promptly after the parties have agreed upon them. + + 2.2. From time to time, PaperExchange shall provide to VerticalNet, at PaperExchange's sole cost and expense, relevant content provided to it by third parties consisting of (a) job listings for inclusion, at VerticalNet's reasonable business discretion and at VerticalNet's then current listing rate, in the Co-Branded Career Center or on any other VerticalNet Site except a Site co-branded with a PaperExchange Competitor (the "PaperExchange Career Content") and (b) equipment listings for inclusion, at VerticalNet's reasonable business discretion and at VerticalNet's then current listing rate, in the Co-Branded Equipment Listings or on any other VerticalNet Site except a Site co-branded with a PaperExchange Competitor (the "PaperExchange Equipment Content", and together with the PaperExchange Career Content, the "PaperExchange Content"). PaperExchange shall not provide such PaperExchange Content to VerticalNet until the third party placing the listing has agreed to VerticalNet's then current terms and conditions, subject to final approval by VerticalNet. PaperExchange shall provide the PaperExchange Content in the form of the templates attached hereto as Exhibits B and C. Any listings placed on the Co-Branded Sites (or other VerticalNet Site as permitted in this Section 2.2 [CO-BRANDED CAREER CENTER AND CO-BRANDED ...]) by a user that entered the Co-Branded Site or permitted VerticalNet Site, as applicable, from a PaperExchange Site or from a Link to Pulp and Paper Online jointly placed by VerticalNet and PaperExchange, or placed solely by PaperExchange, on a third party's Site shall be treated as "PaperExchange Content" for all purposes of this Agreement. VerticalNet shall be responsible for, and shall have sole control of, all credit, billing and collection in connection with the PaperExchange Content. PaperExchange shall have no authority to make collections on behalf of VerticalNet. + + 2.3. PaperExchange hereby grants VerticalNet an exclusive license to use, modify, enhance, reproduce, display, perform and transmit the PaperExchange Content, subject to and in accordance with the terms, conditions and provisions of this Agreement. VerticalNet shall not disclose, transfer or otherwise provide the PaperExchange Content to any third party, including, but not limited to, any PaperExchange Competitor, except as otherwise permitted under this Agreement. + + 4 + + 2.4. PaperExchange shall, at PaperExchange's sole cost and expense, place Links on the PaperExchange Home Page labeled "Career Center" and "Equipment Listings" (or mutually agreeable substitutes for such terms) in a mutually agreeable location and size that will directly transfer users to the Co-Branded Sites. + + 2.5. VerticalNet, in its reasonable business discretion, shall market the Co-Branded Sites on Pulp and Paper Online, at pulp and paper industry trade shows, in its print advertisement campaigns and through its sales force. Such marketing activities shall be at VerticalNet's sole cost and expense. + + 2.6. PaperExchange, in its reasonable business discretion, shall market the Co-Branded Sites on the PaperExchange Home Page, at pulp and paper industry trade shows, in its print advertisement campaigns and through its sales force. + +Source: PAPEREXCHANGE COM INC, S-1/A, 3/22/2000 + + + + + +Such marketing activities shall be at PaperExchange's sole cost and expense. + + 2.7. VerticalNet will provide, install, repair, maintain and pay for the communications, computer and peripheral equipment, services and facilities supporting the Co-Branded Sites. VerticalNet shall maintain the Co-Branded Sites in a high quality and professional manner consistent with its maintenance of other VerticalNet Sites. VerticalNet and PaperExchange shall be responsible for the sale of all advertising on the Co-Branded Sites; provided, however, that neither party shall sell advertising on the Co-Branded Sites to a competitor (as defined in 1.16 and 1.25) and provided that each party shall submit any proposed advertising for the Co-Branded Sites to the other party for its prior written approval, such approval not to be unreasonably withheld, delayed or conditioned. + + 2.8. VerticalNet shall be solely responsible for the development, operation and maintenance of Pulp and Paper Online and for all materials that appear on Pulp and Paper Online, except for the PaperExchange Content. + + 2.9. PaperExchange shall be solely responsible for the development, operation and maintenance of the PaperExchange Site and for all materials that appear on the PaperExchange Site, except for the VerticalNet Content and the VerticalNet Archived Content. + +3. VERTICALNET CONTENT + + 3.1. VerticalNet shall provide or make available to PaperExchange, for use in accordance with the provisions of this Agreement, (a) the full text of all original content (headlines, feature articles, columns and case studies) created from time to time by the Managing Editor of Pulp and Paper Online, and (b) the content created from time to time by guest columnists for Pulp and Paper Online, to the extent such columnists have approved the provision of such content by VerticalNet to PaperExchange. VerticalNet shall provide such content (the "VerticalNet Content") to PaperExchange twice per week, in two "batches" of the VerticalNet Content created or acquired since the last provision of VerticalNet Content by VerticalNet to PaperExchange. + + 3.2. VerticalNet hereby grants to PaperExchange a non-exclusive, non-transferable license to use, reproduce, display and transmit the VerticalNet Content, solely in connection with the development, maintenance and operation of the PaperExchange Site, subject to and in accordance with the terms, conditions and provisions of this Agreement. PaperExchange may + + 5 + +reproduce, display and transmit any VerticalNet Content for up to three weeks on the PaperExchange Site, and after the expiration of such three week period PaperExchange shall cease to reproduce, display and transmit such VerticalNet Content and remove such VerticalNet Content from the PaperExchange Site. + + 3.3. PaperExchange shall place a VerticalNet Link in a mutually agreeable location and size on each page of the PaperExchange Site that contains all or a portion of the VerticalNet Content. + + 3.4. PaperExchange shall list on a mutually acceptable page of the PaperExchange Site headlines and abstracts of the VerticalNet Content then reproduced, displayed and transmitted on the PaperExchange Site. PaperExchange shall place two VerticalNet Links in mutually agreeable locations and sizes on such page of the PaperExchange Site, the first of which will take users to the Buyer's Guide on Pulp and Paper Online, and the second of which will take users to the Professional e-Bookstore on Pulp and Paper Online. VerticalNet and PaperExchange shall mutually agree upon the method of implementing such links. + + 3.5. PaperExchange shall not remove any titles or any trademark, copyright or patent notices, or any proprietary or restricted rights notices that appear on the VerticalNet Content and/or the VerticalNet Archived Content. All such titles and notices must be reproduced on all permitted copies of the VerticalNet Content and/or the VerticalNet Archived Content. + + 3.6. During the Term, VerticalNet will not disclose, transfer or otherwise provide the VerticalNet Content and/or the VerticalNet Archived Content to any PaperExchange Competitor. + +4. ADVERTISING + + 4.1. Advertisements on the PaperExchange Site. + + 4.1.1. During the Term, VerticalNet shall have the exclusive right to arrange for the sale of ***** of the third party advertising inventory (which shall consist of a minimum of one advertisement per page on each of the "Co-Branded Equipment," "Co-Branded Careers," "Resources" and "Home Page" sections or successor, replacement or substitute sections) of the PaperExchange Site and shall be consistent with the amount of advertising on other business to business vertical sites on the PaperExchange Site (the "Third Party Advertising Allocation"). PaperExchange shall retain the right to place advertisements for its own account on the remaining ***** of the Third Party Advertising Allocation; provided, however, that if any portion of such Third Party Advertising Allocation remains unsold 45 days after it becomes available for advertising, VerticalNet shall have the exclusive right to arrange for third party advertising on such unsold Third Party Advertising Allocation. + + 4.1.2. VerticalNet will use reasonable efforts to sell advertisements on the PaperExchange Site. The advertising policies (including rates and procedures) applicable to VerticalNet's sale of advertising for the PaperExchange Site will be mutually agreed upon by VerticalNet and PaperExchange (the "PaperExchange Advertising Policies"). Any changes to the agreed upon PaperExchange Advertising Policies shall be mutually agreed upon by the parties. + +* Confidential Treatment Requested: material has been omitted and filed separately with the Commission. + + 6 + + 4.1.3. VerticalNet shall provide notice to the Director of Online Marketing of PaperExchange of each advertiser that agrees to place an advertisement on a PaperExchange Site on the terms and conditions contained in the then current PaperExchange Advertising Policies. PaperExchange shall then have three business days after receipt of such notice to (a) accept or reject such advertiser, in its reasonable business discretion, and (b) notify VerticalNet of its decision. If, at the end of such three-day period, PaperExchange has not responded to such notice, PaperExchange shall be deemed to have accepted such advertiser. PaperExchange shall then work with the advertiser to facilitate the Placement of the advertisement and maintain such advertisement on the agreed-upon page of the PaperExchange Site. PaperExchange shall have the right to terminate its agreement with any such advertiser in its reasonable business discretion. To the extent an advertisement of equivalent size and location appears on both Pulp and Paper Online and the PaperExchange Site, the parties shall mutually agree upon the CPM, CPC or other use-based advertising rates, which rate shall be identical for such advertisements. PaperExchange shall be responsible for, and shall have sole control of, all credit, billing and collection with the advertisements on the PaperExchange Site. VerticalNet shall have no authority to make collections on behalf of PaperExchange. + +Source: PAPEREXCHANGE COM INC, S-1/A, 3/22/2000 + + + + + + 4.2. Sales Leads. PaperExchange will, in its sole discretion, request that its Board of Directors and veteran industry sales force use reasonable efforts to provide pulp and paper industry specific sales strategies and specific sales leads to VerticalNet. Such strategies and leads shall include segments of the industry that are currently lacking effective advertising solutions, and how such industry participants could be marketed to by VerticalNet for the purposes of this Section 4. VerticalNet may only use the information provided to them pursuant to this Section 4.2 [Sales Leads] in connection with its performance under this Section 4. + + 4.3. Non-Competition. + + 4.3.1. During the Term, VerticalNet shall not (a) act as an advertising agent or representative for any PaperExchange Competitor and (b) place any advertisements on Pulp and Paper Online from any PaperExchange Competitor. + + 4.3.2. During the Term, PaperExchange shall not place any advertisements on the PaperExchange Site from any Pulp and Paper Online Competitor. + +5. CO-MARKETING ACTIVITIES + + 5.1. Trade Shows and Conventions. + + 5.1.1. During the Term, PaperExchange shall use commercially reasonable efforts to expand its presence at major national and international pulp and paper industry trade shows and conventions, including booth exhibitions, attendance by industry veteran sales force from all the major paper grades and industry panel sponsorships, when available. PaperExchange, in its reasonable business discretion, shall actively engage in co-branded activities with VerticalNet at PaperExchange's booth exhibitions and shall maintain an open invitation policy for VerticalNet to send its own sales force to co-locate, subject to Section 5.1.3 [Trade Shows and Conventions], with PaperExchange at its trade show booths. + + 5.1.2. VerticalNet, in its reasonable business discretion, shall offer PaperExchange + + 7 + +exhibit booth space at pulp and paper industry trade shows that VerticalNet is unable to use on the same terms that VerticalNet accepted for such space. + + 5.1.3. When VerticalNet and PaperExchange are both attending pulp and paper industry trade shows, VerticalNet and PaperExchange shall work together to share costs of such trade shows and related material. + + 5.2. Sales Force Visits. PaperExchange shall use commercially reasonable efforts to (a) expand its sales force presence on a national and international basis, in all major paper grades and (b) commit its sales force to promote Pulp and Paper Online through "on-the-ground" activities including site visits to mills, converters, printers and brokers. + + 5.3. Advertising Campaigns. + + 5.3.1. PaperExchange shall, in its reasonable business discretion, promote the PaperExchange Site through print medium. + + 5.3.2. VerticalNet shall, in its reasonable business discretion, promote Pulp and Paper Online through print medium. + + 5.3.3. VerticalNet and PaperExchange shall co-promote the PaperExchange Home Page and Pulp and Paper Online in mutually agreeable advertising and collateral marketing material. All co-promotion advertising materials produced by or on behalf of either party (the "Originating Party") shall be subject to the written approval of the other party (the "Receiving Party"), which approval shall not to be unreasonably withheld, delayed or conditioned. The Receiving Party shall notify the Originating Party of its approval or disapproval of such advertising materials as soon as practicable, but in any event within five business days after Receiving Party's receipt thereof. Any failure of the Receiving Party to respond within such five business day period shall be deemed disapproval of the advertising materials in question. + + 5.4. Pulp and Paper Online Promotion. PaperExchange shall place the VerticalNet Links in a mutually agreeable location and size on the PaperExchange Site as soon as practicable and in no event more than 15 days after the Effective Date. The VerticalNet Links shall remain on the PaperExchange Site during the Term. + + 5.5. PaperExchange Home Page Promotion. VerticalNet shall place the PaperExchange Links on Pulp and Paper Online in a mutually agreeable location and size as soon as practicable and in no event more than 15 days after the Effective Date. The PaperExchange Links shall remain on Pulp and Paper Online during the Term. + + 5.6. Newsletter. VerticalNet shall include a PaperExchange Link in a mutually agreeable location and size in the Pulp and Paper Online weekly online newsletter sent to VerticalNet's newsletter database. + + 5.7. Discussion Groups. VerticalNet, in its reasonable business discretion, shall provide to PaperExchange co-sponsorship opportunities for discussion groups and USENET forums. + + 5.8. Non-Competition. + + 8 + + 5.8.1. During the Term and for a period of four years after the termination of this Agreement, VerticalNet shall not, directly or indirectly, by itself, through its Affiliates or through any type of joint venture or similar affiliation with a third party, without prior written approval from PaperExchange, buy, sell or trade (a) paper pulp products through exchanges, auctions, or reverse auctions or any other e-commerce medium, (b) paper (other than finished paper-based products, including, but not limited to, books, stamps and labels) and copy paper (i) through exchanges, auctions or reverse auctions or (ii) in quantities greater than one ton through any e-commerce medium, (c) raw materials used to make paper packaging, including, but not limited to, linerboard, medium, other containerboard grades and corrugated sheet through exchanges, auctions, reverse auctions or any other e-commerce medium, or (d) paper rolls and reels weighing more than 50 pounds used by printers through exchanges, auctions, reverse auctions or any other e-commerce medium; provided, however, that this Section 5.8.1 [Non-Competition] shall not apply to advertisements, Storefronts or similar features on VerticalNet's Sites. + + 5.8.2. During the Term, VerticalNet will not, directly or indirectly, design, host, operate, maintain or otherwise participate in a co-branded career center or a co-branded equipment listing Site with a PaperExchange Competitor or license a VerticalNet Link for use or display on any PaperExchange Competitor's Site. + +Source: PAPEREXCHANGE COM INC, S-1/A, 3/22/2000 + + + + + + 5.8.3. During the Term, PaperExchange will not, directly or indirectly, design, host, operate, maintain or otherwise participate in a co-branded career center or a co-branded equipment listing Site with a Pulp and Paper Online Competitor or license a PaperExchange Link for use or display on any Pulp and Paper Online Competitor's Site. + + 5.9. Exchange. + + 5.9.1. PaperExchange shall provide to VerticalNet an ID and a password that will allow VerticalNet to access the "Exchange" portion of the PaperExchange Site. PaperExchange shall provide reasonable training to VerticalNet with respect to the creation, operation and marketing of such an exchange. + + 5.9.2. PaperExchange will place a VerticalNet Link in a mutually agreeable location and size on the "Exchange" portion of the PaperExchange Site. + + 5.10. Allocation of Resources. During the Term, each of PaperExchange and VerticalNet agrees to dedicate reasonable financial, marketing and staffing resources in order to actively promote the activities contemplated by this Agreement and will use reasonable efforts to maintain the strategic alliance described in this Agreement (and its focus on the pulp, paper and packaging industry generally) as a high priority. + +6. INTELLECTUAL PROPERTY + + 6.1. Except as set forth in Sections 4.3.1 [Non-Competition] and 5.8 [Non-Competition], nothing in this Agreement shall be construed as preventing VerticalNet from implementing VerticalNet Links on any other Site. + + 6.2. Except as set forth in Sections 4.3 [Non-Competition] or 5.8.3 [Non-Competition], nothing in this Agreement shall be construed as preventing PaperExchange from implementing PaperExchange Links on any other Site. + + 9 + + 6.3. VerticalNet hereby grants to PaperExchange a non-exclusive, non-transferable, royalty-free, right and license to link to Pulp and Paper Online through a VerticalNet Link. VerticalNet shall furnish PaperExchange with a full color representation of each VerticalNet Link at least two days prior to its scheduled placement on a page of the PaperExchange Site. If VerticalNet subsequently modifies any VerticalNet Link or the URL associated with such VerticalNet Link, it shall furnish a representation of same to PaperExchange, which PaperExchange shall substitute for the prior version within two days after receipt thereof. VerticalNet shall have final approval over all VerticalNet Links on the PaperExchange Site. + + 6.4. PaperExchange hereby grants VerticalNet a non-exclusive, non-transferable, royalty-free, right and license to link to the PaperExchange Site through a PaperExchange Link. PaperExchange shall furnish VerticalNet with a full color representation of each PaperExchange Link at least two days prior to its scheduled placement on Pulp and Paper Online. If PaperExchange subsequently modifies any PaperExchange Link or the URL associated with such PaperExchange Link, it shall furnish a representation of same to VerticalNet, which VerticalNet shall substitute for the prior version within two days after receipt thereof. PaperExchange shall have final approval over all PaperExchange Links on Pulp and Paper Online. + + 6.5. Except for the express rights granted to PaperExchange under this Agreement, PaperExchange acknowledges and agrees that the Intellectual Property of VerticalNet is and shall remain the sole property of VerticalNet and nothing in this Agreement shall confer in PaperExchange any right of ownership or license rights in VerticalNet's Intellectual Property. In addition, PaperExchange shall not now or in the future contest the validity of VerticalNet's Intellectual Property. + + 6.6. Except for the express rights granted to VerticalNet under this Agreement, VerticalNet acknowledges and agrees that the Intellectual Property of PaperExchange is and shall remain the sole property of PaperExchange and nothing in this Agreement shall confer in VerticalNet any right of ownership or license rights in PaperExchange's Intellectual Property. In addition, VerticalNet shall not now or in the future contest the validity of PaperExchange's Intellectual Property. + + 6.7. PaperExchange agrees to use the VerticalNet Marks in accordance with the terms of this Agreement and with good trademark practices including, but not limited to, protecting the value of the goodwill residing in such Intellectual Property. + + 6.8. VerticalNet agrees to use the PaperExchange Marks in accordance with the terms of this Agreement and with good trademark practices including, but not limited to, protecting the value of the goodwill residing in such Intellectual Property. + + 6.9. Except as set forth in Sections 4.3 [Non-Competition] and 5.8 [Non-Competition], nothing in this Agreement shall be construed as preventing either party from developing other co-branded versions of its materials, data, information and content. + + 10 + +7. COMMERCIAL TERMS + + 7.1. Co-Branded Sites. + + 7.1.1. Co-Branded Career Center. VerticalNet will pay PaperExchange ***** of the Career Center Net Revenue. ."Career Center Net Revenue" shall mean the (a) listing fees related to the Co-Branded Career Center and any other VerticalNet Site on which the listings are posted, (b) Co-Branded Career Center e-commerce revenue and (c) other Co-Branded Career Center revenue, in each case under the preceding clauses (a), (b) and (c), to the extent derived during the Term from PaperExchange or the PaperExchange Content provided to VerticalNet by PaperExchange pursuant to this Agreement, or as otherwise mutually agreed upon by the parties, less (i) credits for claims, allowances, retroactive price reductions or returned goods, and (ii) sales, excise, use, value-added and other similar taxes (excluding income taxes) actually paid. + + 7.1.2. Co-Branded Equipment Listings. VerticalNet will pay PaperExchange ***** of the Equipment Listings Net Revenue. "Equipment Listings Net Revenue" shall mean the (a) listing fees related to Co-Branded Equipment Listings and any other VerticalNet Site on which the listings are posted, (b) Co-Branded Equipment Listings e-commerce revenue and (c) other Co-Branded Equipment Listings revenue, in each case under the preceding clauses (a), (b) and (c), to the extent derived during the Term from PaperExchange or the PaperExchange Content provided to VerticalNet by PaperExchange pursuant to this Agreement, or as otherwise mutually agreed upon by the parties, less (i) credits for claims, allowances, retroactive price reductions or returned goods, and (ii) sales, excise, use, value-added and other similar taxes (excluding income taxes) actually paid. + + 7.1.3. Review of Payments. VerticalNet and PaperExchange will conduct a good faith review of the payments generated under Sections 7.1.1 [Co-Branded Career Center] and + +Source: PAPEREXCHANGE COM INC, S-1/A, 3/22/2000 + + + + + +7.1.2 [Co-Branded Equipment Listings] no later than six months after the Effective Date and may mutually agree, subject to Section 13.6 [Amendment or Modification], to amend Sections 7.1.1 [Co-Branded Career Center] and/or 7.1.2 [Co-Branded Equipment Listings] at that time. If VerticalNet and PaperExchange are unable to reasonably agree on whether or how to amend Section 7.1.2 [Co-Branded Equipment Listings], either party shall have the right to immediately terminate the rights and obligations of the parties under Sections 2 and 7.1.2 [Co-Branded Equipment Listings] with respect to the Co-Branded Equipment Listings and PaperExchange Equipment Content; provided, however, that all other rights and obligations under this Agreement (including the rights and obligations of the parties under Sections 4.3 [Non-Competition] and 5.8 [Non-Competition]) shall continue in full force and effect unless and until terminated in accordance with Section 8. The parties understand and agree that termination of the rights and obligations of the parties under Sections 2 and 7.1.2 [Co-Branded Equipment Listings] in accordance with this Section 7.1.3 [Review of Payments] shall not permit either party to terminate this Agreement pursuant to Section 8.2 [Termination for Cause]. + + 7.1.4. Professional e-Bookstore Sales. VerticalNet will pay PaperExchange ***** of the gross sales of the Professional e-Bookstore on Pulp and Paper Online that originated from the PaperExchange Site. + + 7.2. Advertising Revenue. + + 7.2.1. During the Term, VerticalNet shall not share any revenue derived from advertisements hosted on Pulp and Paper Online or any other VerticalNet Site with PaperExchange; provided, however, that if PaperExchange brings VerticalNet a Qualified Lead + +* Confidential Treatment Requested: material has been omitted and filed separately with the Commission + + 11 + +(as defined below) for a new customer that turns into a sale of advertising on Pulp and Paper. Online or Packaging Online, including, without limitation, the Co-Branded Sites, VerticalNet shall pay to PaperExchange a commission of ***** of the Net Advertising Revenue resulting from such sale of advertising, with the exception that if such advertising is on the Co-branded Career Center, VerticalNet shall pay PaperExchange a commission of ***** of the Net Advertising Revenue resulting from such sale of advertising. As used in this Section 7.2.1 [Advertising Revenue], a "Qualified Lead" shall mean a customer referred to VerticalNet by PaperExchange that is not, at the time of referral, a customer of VerticalNet, and which customer has agreed to place an advertisement on Pulp and Paper Online or Packaging Online on the terms and conditions contained in VerticalNet's then current advertising policies. + + 7.2.2. PaperExchange shall pay to VerticalNet a commission of ***** of the Net Advertising Revenue received during the Term for advertisements located on the Third Party Advertising Allocation of the PaperExchange Site. + + 7.2.3. If PaperExchange sells advertising to a third party on the PaperExchange Site independently from VerticalNet, PaperExchange shall pay to VerticalNet a commission of ***** of the Net Advertising Revenue resulting from such advertising during the Term; provided, however, that if PaperExchange previously rejected advertising by such party when proposed by VerticalNet pursuant to Section 4.1 [Advertisements on the PaperExchange Site], or terminated without cause a prior agreement with such third party that had resulted from such a proposal by VerticalNet, then PaperExchange shall pay ***** of the Net Advertising Revenue resulting from such advertising during the Term to VerticalNet. PaperExchange shall provide prompt notice to VerticalNet of each advertiser that has agreed with PaperExchange to place an advertisement on a page of the PaperExchange Site. + + 7.3. Fees. In consideration of VerticalNet's agreement to enter into an exclusivity and non-competition agreement herein, in conjunction with the other obligations under this Agreement, PaperExchange shall make the following payments to VerticalNet upon the earlier of (a) December 31, 1999 and (b) the receipt by PaperExchange of an aggregate of ***** in additional funding: + + 7.3.1. a ***** one-time, non-refundable fee in consideration of the execution of this Agreement; + + 7.3.2. a ***** one-time, non-refundable fee in consideration of the design, development and implementation of the Co-Branded Career Center as described in Section 2; and + + 7.3.3. ***** in consideration of the design, development and implementation of the Co-Branded Equipment Listings Site as described in Section 2. + + 7.4. Revenue Sharing. After PaperExchange has generated PaperExchange Revenue equal to *****, PaperExchange shall pay an amount equal to ***** of the PaperExchange Revenue to VerticalNet; provided, however, that if, in any given calendar year, VerticalNet receives ***** pursuant to this Section 7.4 [Revenue Sharing], the percentage of PaperExchange Revenue that PaperExchange shall pay to VerticalNet for the remainder of such calendar year shall be reduced to *****; and provided further, however, that if, in any given calendar year, VerticalNet receives + +* Confidential Treatment Requested: material has been omitted and filed separately with the Commission. + + 12 + +***** in the aggregate pursuant to this Section 7.4 [Revenue Sharing], the percentage of PaperExchange Revenue that PaperExchange shall pay to VerticalNet for the remainder of such calendar year shall be reduced to *****. + + 7.5. Payment Terms. Each party shall provide the other party with all amounts due under this Agreement for the prior calendar quarter within 30 days after the end of each calendar quarter during the Term. Each payment shall be accompanied by a statement detailing the amount of applicable gross revenue received, the calculation of the amount due to the other party and the amount of the payment accompanying such statement. All payments due to either party hereunder shall be made in immediately available U.S. funds, without set-off or counterclaim, free and clear of (and without deduction for or grossed up for, as applicable), any taxes, duties, charges, withholdings, restrictions or conditions of any nature imposed or levied by any governmental taxing or other authority. + + 7.6. Taxes. All payments required under this Agreement are exclusive of federal, state, local and foreign taxes, duties, tariffs, levies and similar assessments. When applicable, such taxes shall appear as separate items on a party's invoice or statement of the other party. Payment of such taxes or charges shall be the responsibility of the party whose obligation it is under this Agreement to make the payment in respect of which such taxes are assessed, excluding any taxes based upon the other party's net income. In lieu thereof, a party shall provide the other party with a tax or levy exemption certificate acceptable to the taxing or levying authority. + + 7.7. Audits. During the 18-month period following the payment by one party of any amount due under this Agreement to the other party, the party receiving + +Source: PAPEREXCHANGE COM INC, S-1/A, 3/22/2000 + + + + + +payment (the "Auditing Party") shall have the right to have an independent third party (the "Auditor") audit the financial records of the other party (the "Audited Party") relating to such payment to verify the accuracy of the Audited Party's financial records in order to verify the amount of the payments owed and/or paid. The Auditing Party may cause the Auditor to perform such an audit not more than once in any 12-month period, unless a prior audit within the past two years revealed that the amount owed by the Audited Party to the Auditing Party was underpaid in excess of 5% of the amount owed, in which case an audit may be performed no more frequently than once in any three month period. If the amount owed by the Audited Party to the Auditing Party was underpaid, the Audited Party shall pay the additional amount owed and all accrued interest thereon to the Auditing Party within 15 days of notice of such underpayment to the Audited Party. If the amount owed by' the Audited Party to the Auditing Party was underpaid in excess of 10% of the amount owed, the fees of such audit shall also be paid to the Auditing Party within 15 days of notice of such to the Audited Party. If the amount owed by the Audited Party to the Auditing Party was overpaid, the Auditing Party shall return the excess amount paid to the Auditing Party within 15 days of notice of such underpayment to the Auditing Party. The Auditing Party shall give reasonable advance written notice to the Audited Party, and each audit shall be conducted during normal business hours and in a manner that does not cause unreasonable disruption to the conduct of business by the Audited Party. + + 7.8. Interest. All payments not paid by the date such payments are due shall bear interest from the due date to the date payments are actually paid at the rate of the lower of (a) 1% per month or (b) the maximum rate permitted by law. + +* Confidential Treatment Requested: material has been omitted and filed separately with the Commission. + + 13 + +8. TERM AND TERMINATION + + 8.1. Automatic Renewal. This Agreement will automatically renew at the end of the Initial Term or a subsequent renewal term on a year to year basis (each, a "Renewal Term"), unless either party notifies the other at least 30 days prior to the end of the Initial Term or then current Renewal Term, as applicable, of its intention not to renew this Agreement. + + 8.2. Termination for Cause. Either party may terminate this Agreement immediately upon written notice to the other party in the event any material breach of a material term of this Agreement by such other party that remains uncured 30 days in the case of a breach of a payment obligation, or 45 days for all other breaches, after notice of such breach was received by such other party; provided, however that if such breach is not reasonably capable of cure within the applicable cure period, the breaching party shall have an additional 180 days to cure such breach so long as the cure is commenced within the applicable cure period and thereafter is diligently prosecuted to completion as soon as possible. + + 8.3. Upon Termination. Upon termination of this Agreement, (a) each party's liability for any charges, payments or expenses due to the other party that accrued prior to the date of termination shall not be extinguished by termination, and such amounts (if not otherwise due on an earlier date) shall be immediately due and payable on the termination date; (b) VerticalNet shall be responsible for all charges, payments or expenses incurred by it in connection with the removal of the PaperExchange Links from Co-Branded Sites and the modification of the Co-Branded Sites, including, but not limited to, the removal of PaperExchange Content; (c) PaperExchange shall be responsible for all charges, payments or expenses incurred by it in connection with the removal of the VerticalNet Links, VerticalNet Content and VerticalNet Archived Content from the PaperExchange Site; (d) all rights of PaperExchange to use, display, reproduce or publish the VerticalNet Marks shall immediately cease. (e) all rights of PaperExchange to use, reproduce, display and transmit the VerticalNet Content and VerticalNet Archived Content shall immediately cease and PaperExchange shall destroy all copies of such content, (f) all rights of VerticalNet to use, display, reproduce or publish the PaperExchange Marks shall immediately cease, (g) all rights of VerticalNet to use, create derivative works of, reproduce, display, perform and transmit the PaperExchange Content shall immediately cease and VerticalNet shall, at PaperExchange's cost, return one copy of the PaperExchange Content displayed on the Co-Branded Sites to PaperExchange in electronic format and destroy all other copies of such content, (h) all rights of VerticalNet to arrange for the sale of advertising on the Third Party Advertising Allocation on the PaperExchange Site shall immediately cease, (i) VerticalNet shall retain ownership of the URLs at which the Co-Branded Sites are located, (I) the Co-Branded URLs shall be owned by the party that offers to pay the highest amount to the other for the ownership of such URLs upon payment of such amount to the other party (k) if the agreement is terminated during the Initial Term by VerticalNet pursuant to Section 8.2 [Termination for Cause], (x) VerticalNet shall be released from its obligations under Section 5.8.1 [Non-Competition] and (y) PaperExchange's obligations under Sections 7.2 [Advertising Revenue] and 7.4 [Revenue Sharing] shall be extended for one year after the date of such termination, and (I) if the agreement is terminated during the Initial Term by PaperExchange pursuant to Section 8.2 [Termination for Cause], VerticalNet shall pay to PaperExchange, as liquidated damages, an amount equal to the product determined by multiplying (1) a fraction, the numerator of which shall be the number of days between the effective date of termination and the scheduled expiration date of the Initial Term, and the denominator of which shall be the number of days + + 14 + +between the Effective Date and the scheduled expiration date of the Initial Term, by (2) ***** + +9. DISPUTE RESOLUTION + + 9.1. Negotiation and Escalation. If any controversy or claim arises relating to this Agreement, the parties will attempt in good faith to negotiate a solution to their differences, including progressively escalating any controversy or claim through senior levels of management. If negotiation does not result in a resolution within 30 days of when one party first notifies the other of the controversy or claim, either party may resort to arbitration under Section 9.2 [Arbitration]. + + 9.2. Arbitration. Any controversy or claim between the parties concerning any breach or alleged breach of this Agreement or performance or nonperformance of any obligation under this Agreement which cannot be resolved by negotiation will be resolved by binding arbitration under this Section 9.2 [Arbitration] and the then-current Commercial Rules and supervision of the American Arbitration Association (the "AAA"). If any part of this Section 9.2 [Arbitration] is held to be unenforceable, it will be severed and will not affect either the duty to arbitrate or any other part of this Section 9.2 [Arbitration]. The arbitration will be held in New York, New York, before a sole disinterested arbitrator who is knowledgeable in business information and the Internet and experienced in handling commercial disputes. The arbitrator shall be appointed jointly by the parties hereto within 30 days following the date on which the arbitration is instituted. If the parties are unable to agree upon the arbitrator within such 30-day period, the AAA shall be instructed to select such arbitrator within 15 days thereafter. The arbitrator's award will be final and binding and may be entered in any court + +Source: PAPEREXCHANGE COM INC, S-1/A, 3/22/2000 + + + + + +having jurisdiction. The arbitrator will not have the power to award punitive or exemplary damages, or any damages excluded by, or in excess of, any damage limitations expressed in this Agreement. Issues of arbitrability will be determined in accordance solely with the federal substantive and procedural laws relating to arbitration; in all other respects, the arbitrator will be obligated to apply and follow the substantive law of the Commonwealth of Pennsylvania. + + 9.3. Equitable Relief. Notwithstanding anything to the contrary in this Agreement, in the event of an alleged violation of Article 10 [CONFIDENTIALITY] of this Agreement by either party, the party alleging such a violation may seek temporary injunctive or other appropriate equitable relief from any court of competent jurisdiction pending appointment of an arbitrator. The party requesting such relief shall simultaneously file a demand for arbitration of the dispute, and shall request that the American Arbitration Association proceed under its rules for an expedited hearing. + + 9.4. Costs. Unless the arbitrator, if any, determines otherwise, each party will bear its own attorneys' fees and other costs associated with the negotiation and arbitration provided for by this Article 9 [DISPUTE RESOLUTION], except that costs and expenses of the arbitrators shall be shared equally. If court proceedings to stay litigation or compel arbitration are necessary, the party who unsuccessfully opposes such proceedings will pay all associated costs, expenses and attorneys' fees that are reasonably incurred by the other party. + +* Confidential Treatment Requested: material has been omitted and filed separately with the Commission. + + 15 + + 9.5. Two Year Limitation. Except for claims under Sections 12.4 [Indemnification by PaperExchange] and 12.5 [Indemnification by VerticalNet] hereof, neither party may bring a claim or action regardless of form, arising out of or related to this Agreement, including any claim of fraud or misrepresentation, more than two years after the cause of action accrues or becomes known, whichever is later. + + 9.6. Confidentiality. In order to facilitate the resolution of controversies or claims between the parties with respect to each party hereto, such controversies or claims, including details regarding negotiations, arbitration and settlement terms, shall be treated as Confidential Information of the other party hereto in accordance with Article 10 [CONFIDENTIALITY]. + + 9.7. Remedial Measures. In the event of (a) any material remediable breach of this Agreement by the other party which remains uncured 30 days after notice of such breach (other than a breach of a payment obligation) was received by the other party or (b) any material breach which cannot be cured, the non-breaching party may take reasonable remediable measures at the cost of the breaching party without prejudice and in addition to any other rights arising from such breach. In addition, the non-breaching party shall take reasonable steps to mitigate damages arising out of such breach. + +10. CONFIDENTIALITY + + 10.1. Confidentiality Obligations. Except as permitted elsewhere under this Agreement, each party agrees to take Reasonable Steps (as defined below) (a) to receive and maintain the Confidential Information of the other party in confidence, (b) not to disclose such Confidential Information to any third parties and (c) to promptly notify the disclosing party upon learning of any law, rule, regulation or court order that purports to compel disclosure of any Confidential Information of the disclosing party and to reasonably cooperate with the disclosing party in the exercise of the disclosing party's right to protect the confidentiality of such Confidential Information. Neither party hereto shall use all or any part of the Confidential Information of the other party for any purpose other than to perform its obligations under this Agreement. The parties will take Reasonable Steps (as defined below) to ensure that their employees, representatives and agents comply with this provision. As used herein, "Reasonable Steps" means at least the same degree of care that the receiving party uses to protect its own Confidential Information, and, in no event, no less than reasonable care. + + 10.2. Exclusions. Nothing contained herein shall prevent a party from disclosing Confidential Information pursuant to any applicable law, rule, regulation or court order; provided, however, that such party complies with the notice provisions of Section 10.1(c) [Confidentiality Obligations] to the extent permissible under applicable laws, rules, regulations or court orders. Such disclosure shall not alter the status of such information hereunder for all other purposes as Confidential Information. + + 10.3. Termination. Subject to Section 13.10 [Survival], upon termination of this Agreement, all Confidential Information shall be returned to the disclosing party or destroyed unless otherwise specified or permitted elsewhere under this Agreement. The confidentiality obligations contained in this Article 10 [CONFIDENTIALITY] shall survive termination of this Agreement for a period of three years. + + 16 + + 10.4. Injunction. Each party acknowledges and agrees that the provisions of this Article 10 [CONFIDENTIALITY] are reasonable and necessary to protect the other party's interests in its Confidential Information, that any breach of the provisions of this Article 10 [CONFIDENTIALITY] may result in irreparable harm to such other party, and that the remedy at law for such breach may be inadequate. Accordingly, in the event of any breach or threatened breach of the provisions of this Article 10 [CONFIDENTIALITY] by a party hereto, the other party, in addition to any other relief available to it at law, in equity or otherwise, shall be entitled to seek temporary and permanent injunctive relief restraining the breaching party from engaging in and/or continuing any conduct that would constitute a breach of this Article 10 [CONFIDENTIALITY], without the necessity of proving actual damages or posting a bond or other security. + + 10.5. Publicity. Except as may be required by applicable laws, rules or regulations (including those arising under any securities laws), neither party will originate any publicity, news release or other public announcement, written or oral, whether to the public press or otherwise, concerning the relationship between the parties or the transactions described in this Agreement without the prior written consent of the other party, which consent shall not be unreasonably withheld or delayed. In the event disclosure is required by applicable law, rules or regulations, then the party required to so disclose such information shall, to the extent possible, provide to the other party for its approval (such approval not to be unreasonably withheld) a written copy of such public announcement at least five business days prior to disclosure. Notwithstanding the foregoing, either party shall have the right to make a press release with respect to its entering into this Agreement; provided that such party provides to the other party a copy of the proposed press release no less than five business days prior to its proposed release and that the contents of such press release shall be subject to the other party's consent, which consent shall not be unreasonably delayed or withheld. + +11. REPRESENTATIONS AND WARRANTIES. Each party hereby represents, covenants and warrants to the other party that: + + 11.1. It has the corporate power to enter into this Agreement and to grant + +Source: PAPEREXCHANGE COM INC, S-1/A, 3/22/2000 + + + + + +the rights and licenses granted herein and otherwise perform this Agreement; + + 11.2. It is not a party to any agreement or understanding and knows of no law or regulation that would prohibit it from entering into and performing this Agreement or that would conflict with this Agreement; and + + 11.3. When executed and delivered by it, this Agreement will constitute a legal, valid and binding obligation of it, enforceable against it in accordance with this Agreement's terms. + +12. DISCLAIMER OF WARRANTY, LIMITATION OF LIABILITY AND INDEMNIFICATION. + + 12.1. Disclaimer of Warranties. EXCEPT AS EXPRESSELY SET FORTH IN THIS AGREEMENT, VERTICALNET HEREBY DISCLAIMS ALL WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, WITH RESPECT TO ANY AND ALL VERTICALNET DELIVERABLES, INCLUDING BUT NOT LIMITED TO ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE AND NON-INFRINGEMENT. + + 17 + + 12.2. Disclaimer of Warranties. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, PAPEREXCHANGE HEREBY DISCLAIMS ALL WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, WITH RESPECT TO ANY AND ALL PAPEREXCHANGE DELIVERABLES, INCLUDING BUT NOT LIMITED TO ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE AND NON-INFRINGEMENT. + + 12.3. Limitation of Liability. EXCEPT IN CONNECTION WITH A BREACH BY EITHER PARTY OF ARTICLE 10, THE INDEMNIFICATION OBLIGATIONS OF PAPEREXCHANGE UNDER SECTIONS 12.4(c) [Indemnification by PaperExchange] AND THE INDEMNIFICATION OBLIGATIONS OF VERTICALNET UNDER SECTION 12.5(c) [Indemnification by VerticalNet], NEITHER PARTY WILL BE LIABLE FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL, EXEMPLARY OR INCIDENTAL DAMAGES ARISING OUT OF OR RELATED TO THIS AGREEMENT, HOWEVER CAUSED AND UNDER ANY THEORY OF LIABILITY (INCLUDING NEGLIGENCE), EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. EXCEPT IN CONNECTION WITH A BREACH BY EITHER PARTY OF ARTICLE 10, THE INDEMNIFICATION OBLIGATIONS OF PAPEREXCHANGE UNDER SECTION 12.4(c) [Indemnification by PaperExchange] AND THE INDEMNIFICATION OBLIGATIONS OF VERTICALNET UNDER SECTION 12.5(c) [Indemnification by VerticalNet], EACH PARTY'S LIABILITY FOR DAMAGES HEREUNDER SHALL NOT EXCEED $1,000,000. + + 12.4. Indemnification by PaperExchange. PaperExchange shall indemnify and hold harmless VerticalNet and its officers, directors, employees and agents from and against any and all losses, claims, damages, liabilities, obligations, penalties, judgments, awards, costs, expenses and disbursements, including without limitation, the costs, expenses and disbursements, as and when incurred, of investigating, preparing or defending any action, suit, proceeding or investigation asserted by a third party, caused by, relating to, based upon, arising out of or in connection with (a) any breach by PaperExchange of the representations, warranties or agreements made by it under this Agreement, (b) negligence, recklessness or intentional misconduct on the part of PaperExchange or its officers, directors, employees, agents or consultants, (c) any claim that the PaperExchange Content infringes or misappropriates any Intellectual Property Rights or any other right of any third party or (d) the promotion, advertisement or marketing of the VerticalNet Content or VerticalNet Archived Content by or on behalf of PaperExchange. + + 12.5. Indemnification by VerticalNet. VerticalNet shall indemnify and hold harmless PaperExchange and its officers, directors, employees and agents from and against any and all losses, claims, damages, liabilities, obligations, penalties, judgments, awards, costs, expenses and disbursements, including without limitation, the costs, expenses and disbursements, as and when incurred, of investigating, preparing or defending any action, suit, proceeding or investigation asserted by a third party, caused by, relating to, based upon, arising out of or in connection with (a) any breach by VerticalNet of the representations, warranties or agreements made by it under this Agreement, (b) negligence, recklessness or intentional misconduct on the part of VerticalNet or its officers, directors, employees, agents or consultants, (c) any claim that the VerticalNet Content infringes or misappropriates any Intellectual Property Rights or any other right of any third party; or (d) the promotion, advertisement or marketing of the PaperExchange Content by or on behalf of VerticalNet. + + 18 + + 12.6. Each person seeking to be reimbursed, indemnified, defended and/or held harmless under Sections 12.4 [Indemnification by PaperExchange] or 12.5 [Indemnification by VerticalNet] (each, an "Indemnitee") shall (a) provide the party obliged to indemnify such Indemnitee with prompt written notice of any claim, suit, demand or other action for which such Indemnitee seeks to be reimbursed, indemnified, defended or held harmless (each, a "Claim"), which notice shall include a reasonable identification of the alleged facts giving rise to such Claim; (b) grant such party reasonable authority and control over the defense and settlement of any such Claim; and (c) reasonably cooperate with such party and its agents in defense of any such Claim. Each Indemnitee shall have the right to participate in the defense of any Claim for which such Indemnitee seeks to be reimbursed, indemnified, defended or held harmless, by using attorneys of such Indemnitee's choice, at such Indemnitee's expense. Any settlement of a Claim for which any Indemnitee seeks to be reimbursed, indemnified, defended or held harmless under this Article shall be subject to the prior written approval of such Indemnitee, such approval not to be unreasonably withheld, conditioned or delayed. + + 12.7. Essential Part of Bargain. The parties acknowledge that the disclaimers and limitations set forth in this Article 12 [DISCLAIMER OF WARRANTY, LIMITATION OF LI...] are an essential element of this Agreement between the parties and that the parties would not have entered into this Agreement without such disclaimers and limitations. + +13. MISCELLANEOUS + + 13.1. Governing Law. This Agreement shall be governed by and interpreted under the laws of the Commonwealth of Pennsylvania without regard to its conflicts of law provisions. Subject to the provisions of Section 9, both parties consent and submit to the exclusive personal jurisdiction of the United States and the state courts of the Commonwealth of Pennsylvania in and for Horsham, PA. + + 13.2. No Assignment. Except as otherwise set forth herein, neither party shall transfer, assign or cede any rights or delegate any obligations hereunder, in whole or in part, whether voluntarily or by operation of law, without the prior written consent of the other party, which consent may be withheld at the other party's reasonable business discretion; provided, however, that either party may transfer this Agreement without prior written consent of the other party to an Affiliate or in connection with a merger or sale of all or substantially all of the stock or assets of such party. + + 13.3. Good Faith. The parties undertake to display to each other the utmost good faith, consistent with their respective rights and obligations set forth in this Agreement. + + 13.4. Independent Contractors. In connection with this Agreement, each party is an independent contractor. This Agreement does not, and shall not be construed to, create an employer-employee, agency, joint venture or partnership relationship between the parties. Neither party shall have any authority to act for or to bind the other party in any way, to alter any of the terms or + +Source: PAPEREXCHANGE COM INC, S-1/A, 3/22/2000 + + + + + +conditions of any of the other party's standard forms of invoices, sales agreements, warranties or otherwise, or to warrant or to execute agreements on behalf of the other or to represent that it is in any way responsible for the acts, debts, liabilities or omissions of the other party. + + 19 + + 13.5. Notices. All notices, reports, payments and other communications required or permitted to be given under this Agreement (each, a "Notice") shall be in writing and shall be given either by personal delivery against a signed receipt, by express delivery using a nationally recognized overnight courier, or by facsimile. All Notices shall be properly addressed as follows, or to such other addresses as may be specified in a Notice given hereunder: + +If to VerticalNet: with a copy to: + +Attn: General Counsel Michael J. Hagan VerticalNet, Inc. VerticalNet, Inc. 700 Dresher Road, Suite 100 700 Dresher Road, Suite 100 Horsham, Pennsylvania 19044 Horsham, Pennsylvania 19044 Fax No.: (215) 443-3336 Fax No.: (215) 443-3336 + +If to PaperExchange: with a copy to: + +Attn: Chief Executive Officer Attn: Jonathan K. Bernstein PaperExchange.com, LLC Bingham Dana LLP 545 Boylston Street, 8th Floor 150 Federal Street Boston, MA 02116 Boston, MA 02110 Fax No.: (617) 536-4097 Fax No.: (617) 951-8736 + +A Notice shall be deemed to be effective upon personal delivery or, if sent via overnight delivery, upon receipt thereof. A Notice sent via facsimile is deemed effective on the same day (or if such day is not a business day, then on the next succeeding business day) if such facsimile is sent before 3:00 p.m. Philadelphia time and on the next day (or if such day is not a business day, then on the next succeeding business day) if such Notice is sent after 3:00 p.m. Philadelphia time. + + 13.6. Amendment or Modification. No subsequent amendment, modification or waiver of any of the provisions of this Agreement shall be effective unless in writing and signed by the parties. + + 13.7. Entire Agreement. This Agreement sets out the entire agreement between the parties with respect to the subject matter of this Agreement and supersedes all prior agreements, proposals, arrangements and communications, whether oral or written, with respect to the subject matter hereof, including, but not limited to, the letter of intent between the parties dated July 23, 1999. + + 13.8. Severability. If any provision of this Agreement is held by a tribunal of competent jurisdiction to be illegal, invalid, or otherwise unenforceable in any jurisdiction, then to the fullest extent permitted by law (a) the same shall not effect the other terms or provisions of this Agreement, (b) such term or provision shall be deemed modified to the extent necessary in the tribunal's opinion to render such term or provision enforceable, and the rights and obligations of the parties shall be construed and enforced accordingly, preserving to the fullest extent the intent and agreements of the parties set forth herein and (c) such finding of invalidity, illegality or + + 20 + +unenforceability shall not affect the validity, legality or enforceability of such term or provision in any other jurisdiction. + + 13.9. No Waiver. Failure to enforce any term of this Agreement is not a waiver of future enforcement of that or any other term. No term or provision of this Agreement will be deemed waived and no breach excused unless such waiver or excuse is in writing and signed by the party against whom enforcement of such waiver or excuse is sought. + + 13.10. Survival. Sections 5.8.1 [Non-Competition] (subject to Section 8.3(k) [Upon Termination]), 6.1-6.2, 6.5, 6.6, 6.9, 7.5-7.8, 8, 9, 10, 11, 12 and 13, any payment obligations of the parties hereunder accruing prior to the date of termination; and any other provision herein expressly surviving termination or necessary to interpret the rights and obligations of the parties in connection with the termination of the term of this Agreement will survive the termination or expiration of this Agreement. + + 13.11. No Third Party Beneficiaries. Nothing in this Agreement is intended to confer benefits, rights or remedies unto any person or entity other than the parties and their permitted successors and assigns. + + 13.12. Waiver of Jury Trial. Each party hereby irrevocably waives all rights a party may have to a trial by jury in any legal action or proceeding arising out of or in connection with this Agreement or the transactions contemplated hereby. + + 13.13. Titles. The headings appearing at the beginning of the Sections contained in this Agreement have been inserted for identification and reference purposes only and shall not be used to determine the construction or interpretation of this Agreement. The nomenclature of the defined terms in this Agreement shall only be used for the construction of this Agreement, and are not to be used for any other purpose, including, but not limited to, interpretation for accounting purposes. + + 13.14. Force Majeure. Neither party shall be held to be in breach of this Agreement by reason of a force majeure event, including, but not limited to, act of God, delay in transportation, fire, flood, earthquake, storm, war, act of a public enemy, civil commotion or any law, rule, regulation, order or other action by any public authority or any other matter reasonably beyond a party's control. To the extent failure to perform is caused by such a force majeure event, such party shall be excused from performance hereunder so long as such event continues to prevent such performance, and provided the non-performing party takes all reasonable steps to resume full performance. + + 13.15. Compliance with Laws. Each party shall comply with all prevailing laws, rules and regulations and obtain all necessary approvals, consents and permits required by the applicable agencies of the government of the jurisdictions that apply to its activities or obligations under this Agreement. + + 13.16. Execution in Counterparts, Facsimiles. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. This Agreement shall become binding when any one or more counterparts hereof, individually or taken together, bear the signatures of both parties + + 21 + +hereto. For the purposes hereof, a facsimile copy of this Agreement, including + +Source: PAPEREXCHANGE COM INC, S-1/A, 3/22/2000 + + + + + +the signature pages hereto, shall be deemed an original. + + [The remainder of this page is intentionally left blank.] + + 22 + +IN WITNESS WHEREOF, the parties to the Agreement by their duly authorized representative have executed this Agreement as of the date first written above. + +VERTICALNET, INC. PAPEREXCHANGE.COM, LLC + +By: /s/ [ILLEGIBLE] By: /s/ Jason Weiss --------------------------------- -------------------------------- Title: BVI Title: CEO ------------------------------ ----------------------------- + +VERTICALNET, INC. PAPEREXCHANGE.COM, LLC + +By: /s/ [ILLEGIBLE] By: /s/ Rod A. Parsley --------------------------------- -------------------------------- Title: V.P. E-Commerce Products Group Title: Vice President Business Devel ------------------------------ ----------------------------- + + Exhibit A + +Auction Home Page 1 of 2 + +[GRAPHIC OMITTED] + +pulp and paper online PaperExchange.com + +[GRAPHIC OMITTED] + +REGISTER + +Free Gift... to first time Buyers and Sellers on Online Auction + +Search: Buyer's Guide by Product/Service [GRAPHIC OMITTED] Go! + +Home | Products | Careers | Marketplace | News/Analysis | Community | Resources | About Us | Related Sites + +Auctions + + Home + + Registration + + How to Start + + Buying My Auction Watch Buyer's Toolkit Buyer's Help Additional Industries + + Selling Seller's Toolkit Seller's Help + +Books, Software, Videos + +Shopping + +Also On This Site + +Online Homepage + +Product Center + +Career Center + +News & Analysis + +Community + +Resources + +Site Information + +Related Sites + +- -------------------------------------------------------------------------------- Click Here + + Highlights, Products & More - -------------------------------------------------------------------------------- + + powdex + + Incorporating InterFlow Expo + + Oct. 27-28, 1999 Atlanta, GA Cobb Galleria Centre + +- -------------------------------------------------------------------------------- + + LAB BLAST '99 + + Lab equipment at Rock Bottom Prices + + CLICK HERE + +- -------------------------------------------------------------------------------- + +[GRAPHIC OMITTED] + +Online Auctions + +Purchase and Liquidate New and Used Products + +Source: PAPEREXCHANGE COM INC, S-1/A, 3/22/2000 + + + + + +Find An Item + + Select a category below, or use Advanced Search. + + |X| Auctions |_| Fixed Price + + Analytical Instrumentation + + View Items + +Welcome + +Pulp & Paper Online and PaperExchange.com have partnered to become the leading e-commerce solution for buying and selling new, surplus and used paper products and equipment. + +Sell an Item: Register Now as an Online Auctions seller and Sell an Item here. + +Find an Item: Begin using the auction by selecting a category from the box above or choose a Featured or New Item below. Or click here for an Advanced search + +Customized Auction features + + Buyers Area Sellers Area + + Choose One ... Go! Choose One ... Go! + +*Hot items are from all industries *Hot items are from all industries + +First Time Users: Personalize your Online Auction experience and learn about our Customized Auction Features. + +Featured Item + +Dynasty Tool Kit No. 9422 Item #: 500607 + +[GRAPHIC OMITTED] + +Dynasty Tool Kit No. 9422. 120 tools. For the customer service engineer who carries a full array of tools and spare parts during extended air travel. Molded of tough linear polyethylene. Ribs for extra strength and rigidity. Rugged aluminum valance. M + +Price: $348 Auction Period: 5/11/99 - 6/10/99 + +Techne Thermal Cycler 0.5ML 117V Item #: 500863 + +[GRAPHIC OMITTED] + +Techne Gene E Thermal Cycler (for 0.5 mL tubes). Suitable for DNA sequencing, gene manipulation, DNA hybridization, and other techniques. Uses a refrigerated coolant for maximal cooling efficiency (cooling rates up to 2.7(degrees)C per sec.). Operates from 10 + +Price: $1,000 Auction Period: 5/7/99 - 6/6/99 Dynasty Tool Kit No. 9422 Item #: 500607 + +[GRAPHIC OMITTED] + +Dynasty Tool Kit No. 9422. 120 tools. For the customer service engineer + + Exhibit A(2) + +Auction Home Page 2 of 2 + +[GRAPHIC OMITTED] + +engineer who carries a full array of tools and spare parts during extended air travel. Molded of tough linear polyethylene. Ribs for extra strength and rigidity. Rugged aluminum valance. M + +Price: $348 Auction Period: 5/11/99 - 6/10/99 Leader LFC-944B Level Meter Item #: 500608 + +[GRAPHIC OMITTED] + +Leader LFC-944B Level Meter is a portable battery-operated field level meter designed for testing and measuring the performance of CATV and MATV systems. It provides for measuring levels of -40 to +60 dBmv on VHF channels and -30 to +40 dBmv on UHF c + +Price: $220 Auction Period: 5/11/99 - 6/10/99 + +Find An Item + + Select a category below, or use Advanced Search. + + |X| Auctions |_| Fixed Price + + Analytical Instrumentation + + View Items + +Send This Page To A Friend + +Share The Knowledge + +See something for a friend or associate? You can forward this page by just Clicking Here! + +Home | Help | Feedback | Advertising Info VerticalNet | Disclaimer | TechSupport www.wateronline.com + + Exhibit A(3) + +Online Jobscan Page 1 of 2 + +[GRAPHIC OMITTED] + +pulp and paper online PaperExchange.com + +[GRAPHIC OMITTED] + +shop & compare + +Source: PAPEREXCHANGE COM INC, S-1/A, 3/22/2000 + + + + + +For the Best Prices on the Web + +Search: Buyer's Guide by Product/Service [GRAPHIC OMITTED] Go! + +Home | Products | Careers | Marketplace | News/Analysis | Community | Resources | About Us | Related Sites + +Career Center [GRAPHIC OMITTED] Online Jobscan + +Online Jobscan + + Job Search + + Post Resume + + Update Resume + + New Jobs Area + + Employer Spotlight + +Career Resources + +Salary Survey + +Recruiter Center + +Also On This Site + +Product Center + +Career Center + +News & Analysis + +Community + +Resources + +Site Information + +Related Sites + +- -------------------------------------------------------------------------------- Click Here + + Highlights, Products & More - -------------------------------------------------------------------------------- + + powdex + + Incorporating InterFlow Expo + + Oct. 27-28, 1999 Atlanta, GA Cobb Galleria Centre + +- -------------------------------------------------------------------------------- + + LAB BLAST '99 + + Lab equipment at Rock Bottom Prices + + CLICK HERE + +- -------------------------------------------------------------------------------- + +[GRAPHIC OMITTED] + +Online Jobscan + +[GRAPHIC OMITTED] + +Online JobCenter + +Job Search Post/Update Resumes Employer Spotlights + +Use this page to search for job openings, and view the most recent Open House announcements from businesses within the industry + +Job Search + +Pulp & Paper Online and PaperExchange.com have combined resources to provide you with the most comprehensive source for careers in the pulp and paper industry. + +Search for a position by making selections from the below drop down menus. The more selections you make the more fined tuned the results. For the broadest results, use the menu defaults. + +Multiple categories can be chosen within menus by holding down the "Shift" key when making selections. + +Select Keywords Separate keywords using AND, OR, or 'a phrase in quotes' + +- -------------------------------------------------------------------------------- + +- -------------------------------------------------------------------------------- + +Type Company Name (Full or Partial) + +- -------------------------------------------------------------------------------- + +- -------------------------------------------------------------------------------- + +|_| Full Time |_| Part Time + +|_| Contract |_| Permanent + +Location Choose the State, Region or Country to include in your search + +State Region + +All All Alabama Alaska/Hawaii Alaska Mid-Atlantic - U.S. Arizona North Central - U.S. + +Country + +Source: PAPEREXCHANGE COM INC, S-1/A, 3/22/2000 + + + + + +United States Antigua and Arbuda Antarctica Argentina + +Position + +All Job Types Aerospace Engineer Biological Scientist Biologist + +Jobscan Sponsors + +- -------------------------------------------------------------------------------- Click Here + + Highlights, Products & More - -------------------------------------------------------------------------------- + + powdex + + Incorporating InterFlow Expo + + Oct. 27-28, 1999 Atlanta, GA Cobb Galleria Centre + +- -------------------------------------------------------------------------------- + + LAB BLAST '99 + + Lab equipment at Rock Bottom Prices + + CLICK HERE + +- -------------------------------------------------------------------------------- + +Durlano Pumps embrace new valve technology for greater efficiency... + +CHEMPRO introduces new treatment for water purification... + + Exhibit A(4) + +Online Jobscan Page 2 of 2 + +Duties + +All Job Functions Academia Choose One Consulting + +Scan Jobs Reset + +Open House Announcements + +Virtual Company Tours + +In an effort to better inform the job seeker and satisfy the needs for industry recruiting of premium positions, Water Online provides Online Open House. These pages represent a virtual open house for each of the participating companies that are actively seeking new recruites. Below is a list of the most recent Open House pages. + +- - Chromatography Ltd. Santa Monica CA + +- - Mass Spectral Interpretator Austin TX + +- - Contemporary Wastewater and Design Phoenix AZ + +- - Mass Spectral Incorporated Chicago IL + +- - Activated Carbon Inc. Bethesda MD + +More... + +Send This Page To A Friend + +Share The Knowledge See something for a friend or associate? You can forward this page by just Clicking Here! + +Home | Help | Feedback | Advertising Info VerticalNet | Disclaimer | TechSupport www.wateronline.com + + Exhibit B + + CAREER CENTER REQUEST FORM + +Please take the time to fill out this form so that we may collect the information needed to process your Career Center Request. Please note that text of any length may be typed or pasted into the fields below. + +Billing Information (Will not be displayed online unless it is the same as Employer Information, below.) + + Company Name: + + Address: + + Address 2: + + City: + + State: + + Zip: + + Country: + + Foreign Address: + + Phone: Extension: + + Fax: + + e-mail: + + Website Address (URL): + + Contact Name: + +Source: PAPEREXCHANGE COM INC, S-1/A, 3/22/2000 + + + + + +Employer Information (Please enter all information as it should appear online.) + + |_| Check here if same as above. + + Company Name: + + Address: + + Address 2: + + City: + + State: + + Zip: + + Country: + + Foreign Address: + + Phone: Extension: + + Fax: + + e-mail: + + Division Name: + + Number of Employees: + + Company Job Website (URL): + + Contact Person / Department: + + Job Code/Requisition Number: + + How do you wish to be contacted? + + |_| e-mail |_| Fax |_| Phone |_| Regular Mail + +Job Information (Please enter all information as it should appear online.) + + Job Title: + + Job Location: + + City: State: + + or + + US Region: Select Region + + Country: + + Type of Position: Full Time Permanent + + Required Skills: + + Brief Job Description: + + Salary Range: + + Additional Compensation: + + Full Job Description: + +Exhibit C + +A Microsoft Excel Spreadsheet containing the following columns: + + - ----------------------------------------------------------------------------------------------- Name* Category* Mfg/Brand Model # Original Item Price Height Weight - ----------------------------------------------------------------------------------------------- NAME CATG FLDA FLDB FLDC FLDD FLDE - ----------------------------------------------------------------------------------------------- + + - ----------------------------------------------------------------------------------------------- Starting Bid* Reserve Price Bid Increments Start date/time Duration* Item # - ----------------------------------------------------------------------------------------------- MINB RSRV INCR STRT DAYE FLD1 - ----------------------------------------------------------------------------------------------- default is $5.00 default is today default is 7 -------------------------------------------------- + +- -------------------------------------------------------------------- Approx. Age SKU Description Seller ID# Image Location - -------------------------------------------------------------------- FLD2 FLDF DESC SELL IMAG - -------------------------------------------------------------------- + +- --------------------------------------------- Sales Location** Person** Capacity** - --------------------------------------------- To Be To Be To Be Determined Determined Determined - --------------------------------------------- + +This page describes each of the fields used in the Excel spreadsheet for bulk uploads. Please put details in the spreadsheet named Bulk Upload Spreadsheet. It is very important that you do not change the field names or their order on the spreadsheet. + +- -------------------------------------------------------------------------------- Name* The title by which you want the item called. i.e. Sartorius Microbalance. This field is 60 characters long but more details will fit in the description section. The name needs to be descriptive and distinct. There cannot be two items with the same name. Add a delineating feature + +Source: PAPEREXCHANGE COM INC, S-1/A, 3/22/2000 + + + + + + such as model number or size to the name. - -------------------------------------------------------------------------------- Category* This field requires a number not word. See the enclosed list. If you do not find a category that fits your product, please contact us. We can add categories. - -------------------------------------------------------------------------------- Mfg/Brand Manufacturer or brand name - -------------------------------------------------------------------------------- Model # Model number - -------------------------------------------------------------------------------- Original Item If known, this can be an incentive to buyers who then see price your lower price. - -------------------------------------------------------------------------------- Height Include feet or inches. - -------------------------------------------------------------------------------- Weight Include pounds or ounces. - -------------------------------------------------------------------------------- Quantity* This field requires only a number not each, case, etc. - -------------------------------------------------------------------------------- Starting Bid* This is the amount at which the bidding will start. It should be lower than your reserve price, if you set one. Please use whole dollars. - -------------------------------------------------------------------------------- Reserve Price This is the amount you wish to receive for your product. If you set a reserve price, your item cannot be sold for less than the reserve. Please use whole dollars. - -------------------------------------------------------------------------------- Bid Increments* $5 is the default, but feel free to change this to reflect your product's price using whole dollars. - -------------------------------------------------------------------------------- Start date/time* This field must be filled out like the following example: 04/08/99 15:00 (MM/DD/YY 24:mm) A start time must be included. - -------------------------------------------------------------------------------- Duration* The default for this field is 7 days. The options are 1, 3, 5, 7, 21, and 30. - -------------------------------------------------------------------------------- Item # Catalog number if the product came from a manufacturer's or distributor's catalog - -------------------------------------------------------------------------------- Approx. Age New, used, demo, reconditioned - -------------------------------------------------------------------------------- SKU Each, box, case - -------------------------------------------------------------------------------- Description This field is only 1250 characters long. Use basic writing format here. Complete sentences are desired rather than a list of features. If you copy and paste from an outside source, please check to see that there are no tabs or returns in the paragraph. - -------------------------------------------------------------------------------- Seller ID#* This is your six-digit ID number you received when you registered. - -------------------------------------------------------------------------------- Image location A picture of your item is very helpful in selling your item and will greatly enhance its listing appearance. The picture needs to be in JPEG or GIF format. You can send these on a separate disk or email if desired. Please enclose a list delineating which picture goes with which item. - -------------------------------------------------------------------------------- Location Where the equipment is currently located/resides. - -------------------------------------------------------------------------------- Sales Person For PaperExchange.com internal tracking. - -------------------------------------------------------------------------------- Capacity Specific information about the equipment i.e. "x" gallons/hr, "y" sheets/minute, etc. - -------------------------------------------------------------------------------- * indicates required fields ** indicates fields with fieldnames to be determined and whose position within the columns is to be determined + +Source: PAPEREXCHANGE COM INC, S-1/A, 3/22/2000 \ No newline at end of file diff --git a/full_contract_txt/ParatekPharmaceuticalsInc_20170505_10-KA_EX-10.29_10323872_EX-10.29_Outsourcing Agreement.txt b/full_contract_txt/ParatekPharmaceuticalsInc_20170505_10-KA_EX-10.29_10323872_EX-10.29_Outsourcing Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..6f8c2b3e00dd547a19c621a7f8925faf5dfb1229 --- /dev/null +++ b/full_contract_txt/ParatekPharmaceuticalsInc_20170505_10-KA_EX-10.29_10323872_EX-10.29_Outsourcing Agreement.txt @@ -0,0 +1,1415 @@ +Exhibit 10.29 + +THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. + +Execution Version + +Outsourcing Agreement + +Between + +Paratek Pharmaceuticals, Inc. + +and + +CARBOGEN AMCIS AG + +Date + +30 December 2016 + +Source: PARATEK PHARMACEUTICALS, INC., 10-K/A, 5/5/2017 + + + + + +THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. Table of Contents Article 1 Interpretation 7 + +1.1 Definitions 7 + +1.2 Other Definitions 11 + +1.3 Currency 11 + +1.4 Headings 11 + +1.5 Exhibits 11 + +1.6 Applicable Law 12 + +Article 2 Term 12 + +2.1 Term 12 + +2.2 Effect of Expiration on Purchase Orders 12 + +Article 3 Supply of Product 12 + +3.1 Supply of Product 12 + +3.2 Manufacturing Services 13 + +3.3 Supply of Materials and Customer Material 13 + +3.4 Production Capacity 15 + +3.5 Processing Changes 15 + +3.6 Monitoring of Facilities 16 + +3.7 Subcontracting 16 + +3.8 [* * *] 16 + +3.9 [* * *] 17 + +3.10 Territory Expansion 17 + +3.11 Supply to Customer Licensees 17 + +3.12 Alternative Supply 17 + +Article 4 Forecasts 18 + +4.1 Short Term Rolling Forecasts 18 + +4.2 Long Term Forecasts 18 CONFIDENTIAL Page 2 of 49 + +Source: PARATEK PHARMACEUTICALS, INC., 10-K/A, 5/5/2017 + + + + + +THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. Article 5 Testing and Samples 19 + +5.1 Release Testing 19 + +5.2 Additional Release Testing 19 + +5.3 Retention Samples 19 + +5.4 Stability Testing 20 + +5.5 Reference Standards 20 + +5.6 Preparation of Process Qualification 20 + +Article 6 Purchase Orders 20 + +6.1 Placement of Purchase Orders 20 + +6.2 Acceptance of Orders 20 + +6.3 Delays 21 + +6.4 Cancellation of Purchase Orders 21 + +6.5 Material Failure of Supply 21 + +6.6 Services 21 + +Article 7 Shipment of Product 22 + +7.1 Storage of Product 22 + +7.2 Release and Shipment of Product 22 + +7.3 Documentation 23 + +7.4 Steering Committee 23 + +Article 8 Acceptance of Shipments 23 + +8.1 Acceptance of Shipments 23 + +8.2 Dispute of Rejected Product 24 + +8.3 Remedies 24 + +Article 9 Fees 25 + +9.1 Fees 25 + +9.2 Adjustments to Fees 25 + +9.3 Taxes 26 CONFIDENTIAL Page 3 of 49 + +Source: PARATEK PHARMACEUTICALS, INC., 10-K/A, 5/5/2017 + + + + + +THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. + +Article 10 Invoicing and Payment 26 + +10.1 Issuance of Invoices 26 + +10.2 Invoice Contents 26 + +10.3 Delay of Shipment 27 + +10.4 Payment of Invoices 27 + +Article 11 Intellectual Property 27 + +11.1 Title 27 + +11.2 No Grant of Rights 27 + +11.3 Grant of License by Customer 28 + +11.4 Ownership of Inventions 28 + +11.5 Patents to Inventions 28 + +11.6 No Use of Trademarks 28 + +11.7 [* * *] 28 + +Article 12 Confidentiality & Publicity 29 + +12.1 Obligation of Confidentiality 29 + +12.2 Disclosure with Consent 29 + +12.3 Publicity 29 + +12.4 Disclosure Required by Law 30 + +12.5 Employee Confidentiality and Invention Assignment 30 + +12.6 Duration of Obligation 30 + +Article 13 Representations, Warranties and Covenants 31 + +13.1 Supplier's Representations, Warranties and Covenants 31 + +13.2 Customer's Representations, Warranties and Covenants 32 + +13.3 No Other Warranty 32 + +13.4 No Consequential Damages and Limitation of Liability 33 + +Article 14 Indemnification 33 + +14.1 Indemnification of Supplier 33 CONFIDENTIAL Page 4 of 49 + +Source: PARATEK PHARMACEUTICALS, INC., 10-K/A, 5/5/2017 + + + + + +THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. + +14.2 Indemnification of Customer 33 + +14.3 Intellectual Property Indemnity 34 + +14.4 Indemnification Procedure 34 + +Article 15 Insurance 35 + +15.1 Insurance Coverage 35 + +15.2 Evidence of Insurance 35 + +Article 16 Legal and Regulatory 35 + +16.1 Compliance with Laws 35 + +16.2 Maintenance of Records 36 + +16.3 Notice of Reports 36 + +16.4 Drug Master Files 36 + +16.5 Compliance with Regulatory Standards 36 + +16.6 Inspection 36 + +Article 17 Recalls 37 + +17.1 Safety 37 + +17.2 Recalls 37 + +17.3 Supplier's Liability for Recall 37 + +17.4 Customer's Liability for Recall 37 + +17.5 Replacement Shipments 37 + +Article 18 Termination 38 + +18.1 Termination 38 + +18.2 Consequences of Termination 39 + +18.3 Return of Samples 40 + +18.4 Return of Confidential Information 40 + +18.5 Survival 40 + +Article 19 Miscellaneous 41 + +19.1 Assignment; Inurement 41 CONFIDENTIAL Page 5 of 49 + +Source: PARATEK PHARMACEUTICALS, INC., 10-K/A, 5/5/2017 + + + + + +THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. + +19.2 Change of Control 41 + +19.3 Counterparts 41 + +19.4 Dispute Resolution 41 + +19.5 Force Majeure 42 + +19.6 Performance 42 + +19.7 Further Assurances 42 + +19.8 Independent Contractors 42 + +19.9 Injunctions 43 + +19.10 Notices 43 + +19.11 Entire Agreement 44 + +19.12 Severability 44 + +19.13 Waiver 44 CONFIDENTIAL Page 6 of 49 + +Source: PARATEK PHARMACEUTICALS, INC., 10-K/A, 5/5/2017 + + + + + +THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. THIS AGREEMENT (this "Agreement"), dated December 30, 2016 (the "Effective Date"), is + +BETWEEN: + +Paratek Pharmaceuticals, Inc., a company having a place of business at 75 Park Plaza, 4t h Floor, Boston, MA 02116, USA ("Customer") + +AND: + +CARBOGEN AMCIS AG, a company having a place of business at Hauptstrasse 171, CH 4416 Bubendorf, Switzerland ("Supplier" and, collectively with Customer, the "Parties", and each, a "Party). + +WHEREAS: + +A. Customer is the owner of certain technology and patent rights regarding the Product (as defined herein) having the description set out in Exhibit A (Description of Product) and Exhibit B (Chemical Synthesis); + +B. Customer has filed / intends to file for approval with the United States Food and Drug Administration and/or its foreign equivalents, an Investigational New Drug Application ("IND") and a New Drug Application ("NDA"), and/or the foreign equivalents thereof, for certain formulations containing the Product; + +C. Supplier is engaged in the business of performing contracted process development, Manufacturing and supply services of active pharmaceutical ingredients ("APIs") and intermediates; and + +D. Customer desires that Supplier Manufacture the Product in bulk quantities, and Supplier desires to perform such services, each on the terms and conditions set out in this Agreement. + +NOW THEREFORE, in consideration of the premises and the mutual covenants and agreements contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto agree as follows: + +Article 1 Interpretation + +1.1 Definitions + +In this Agreement, in addition to words and phrases defined where they are used, the following words and phrases shall have the following meanings: + +a) "Affiliate" of a Party shall mean any entity, directly or indirectly, controlling, controlled by, or under common control with a Party. For purposes of this definition, "controlling" (including, "controlled by" and "under CONFIDENTIAL Page 7 of 49 + +Source: PARATEK PHARMACEUTICALS, INC., 10-K/A, 5/5/2017 + + + + + +THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. common control") shall mean: (a) ownership of at least fifty percent (50%) of the equity capital or other ownership interest in or of an entity; (b) the power to control or otherwise direct the affairs of an entity; (c) in the case of non-stock organizations, the power to control the distribution of profits of an entity; or (d) such other relationship as, in fact, results in actual control over the management, business, and affairs of an entity; + +b) "Agreement" means this Supply Agreement for the Product, including all Exhibits attached hereto; + +c) "Applicable Law" means any applicable law, statute, rule, regulation, order, judgment or ordinance of any governmental or regulatory authority or agency; + +d) "Applicable Regulatory Authority" means FDA, EMEA and/or other equivalent governmental or regulatory authorities or agencies and any successors thereto; + +e) "Business Day" means any day on which banking institutions in Boston, Massachusetts and Bubendorf, Switzerland are open for business; + +f) "Campaign" means a schedule of one or more discrete batches of Product Manufactured in sequence by Supplier without pausing to change over to manufacture of any other product; + +g) "cGMP Requirements" means the current Good Manufacturing Practices standards required under ICH Q7A guideline and/or any similar standards of applicable governmental and/or regulatory authorities as defined in the Quality Agreement; + +h) "Change of Control" means any transaction or series of transactions wherein (a) the voting securities of Supplier outstanding immediately prior thereto cease to represent at least fifty percent (50%) of the combined voting power of the surviving entity immediately after such transaction or transactions; (b) the stockholders or equity holders of Supplier approve a plan of complete liquidation of Supplier, or an agreement for the sale or disposition by Supplier of all or substantially all of Supplier's assets, other than to an Affiliate; (c) a Third Party becomes the beneficial owner of fifty percent (50%) or more of the combined voting power of the outstanding securities of Supplier; or (d) substantially all of Supplier's business or assets which relate to this Agreement are sold or otherwise transferred to a Third Party; + +i) "Chemical Synthesis" means established and reliable execution of chemical reactions in order to produce the "Product" by applying chemical and physical manipulations usually involving one or more reactions; + +j) "Confidential Information" means all written information and data provided by the Parties to each other hereunder and identified as being "Confidential" and provided to the recipient, except that the term "Confidential Information" shall not apply to any information or any portion thereof which: + +(i) was known to the recipient or any of its Affiliates, as evidenced by its written records, before receipt thereof under this Agreement; + +(ii) is disclosed to the recipient or any of its Affiliates, without obligations of confidentiality, during the Term by a Third Party who has the right to make such disclosure; CONFIDENTIAL Page 8 of 49 + +Source: PARATEK PHARMACEUTICALS, INC., 10-K/A, 5/5/2017 + + + + + +THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. (iii) is or becomes part of the public domain through no breach of this Agreement by the recipient; or + +(iv) the recipient can demonstrate through competent written records is independently developed by or for the recipient or any of its Affiliates by individuals or entities who have not had access to the information disclosed under this Agreement. + +The Confidential Information may include, without limitation, data, know-how, formulae, processes, designs, sketches, photographs, plans, drawings, specifications, samples, reports, studies, data, findings, inventions, ideas, production facilities, machines, production capacities, prices, market share, research and development projects, and other market data. For the purposes of this Agreement, Master Batch Record shall be deemed the Confidential Information of Customer and the Product Specifications shall be deemed the Confidential Information of Customer; + +k) "Customer Licensee" means any Third Party to whom Customer grants a license or a right to research, develop, make, have made, use, sell, have sold, import, export or otherwise exploit a Product or Customer Product; + +l) "Customer Material" means the compound satisfying the Customer Material Specification; + +m) "Customer Material Specifications" means the specifications for the Customer Material set forth in the Quality Agreement, as such may be amended from time to time in accordance with its terms; + +n) "Customer Product" means any pharmaceutical product owned, controlled or sold by Customer, its Affiliates or Customer Licensees that incorporates or is derived from a Product; + +o) "Customer Technology" means: + +[* * *]; + +p) "Drug Master File" or "DMF" means a submission to the Applicable Regulatory Authority that provides detailed information about facilities, processes or articles used in the Manufacture, processing, packaging and storing of a drug or excipient, among others, in order to obtain appropriate Applicable Regulatory Authority approval for the production for that drug; + +q) "EMEA" means the European Medicines Agency and any successors thereto; + +r) "FDA" means the United States Food and Drug Administration and any successors thereto; + +s) "FD&C Act" means the Federal Food, Drug and Cosmetic Act, as the same may be amended or supplemented from time to time; + +t) "Fees" means the fees specified in Exhibit C, as may be amended by the Parties in accordance with this Agreement; CONFIDENTIAL Page 9 of 49 + +Source: PARATEK PHARMACEUTICALS, INC., 10-K/A, 5/5/2017 + + + + + +THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. u) "Improvements" means, in relation to any Intellectual Property, any and all versions, adaptations, modifications, improvements, enhancements, changes, revisions, translations and derivative works (whether complete or incomplete), of, to, in or based upon such Intellectual Property; + +v) "Intellectual Property" means anything that is protected by any Rights in and to any and all patents, trade-marks, copyrights, industrial designs, Confidential Information, know-how and processes, and all other intellectual and industrial property Rights whatsoever and world-wide (whether registered or unregistered and including Rights in any application for any of the foregoing); + +w) "Manufacture," "Manufactured" or "Manufacturing" means all activities involved in the production of Products to be supplied to Customer or its Affiliates hereunder, including the preparation, formulation, finishing, testing, storage and packaging for shipment of Products and the handling, storage and disposal of any residues or wastes generated thereby; + +x) "Manufacturing Process" means the activities set out in (a) this Agreement, (b) the Master Batch Record and (c) Supplier's standard operating procedures for the Manufacturing, characterization and testing, and bulk packaging and storage of the Product; + +y) "Master Batch Record" means the complete detailed Manufacturing and control instructions and specifications for the Manufacturing Process for the Product, as defined by the applicable validation protocol and cGMP Requirements, as may be amended from time to time; in accordance with cGMP Requirements, or by mutual agreement of both Customer and Supplier; + +z) "Materials" means any and all materials, reagents, chemicals, compounds, physical samples, models, specimens and any other similar physical substances that are used in the Manufacture of the Product except for Customer Materials, including processes and activities leading up to and peripheral to the Manufacture of the Product; + +aa) "Product" means the compound product as described in Exhibit A satisfying the Product Specifications; + +bb) "Product Specifications" means the specifications for the Product set forth in the Quality Agreement, as such may be amended from time to time in accordance with its terms; + +cc) "Quality Agreement" shall mean that certain Quality Agreement Relating to Contract Manufacturing Services by and between Customer and Supplier, dated [* * *]; + +dd) "Recall" means any action by Supplier, Customer or any of their respective Affiliates, to recover possession of the Product or finished products containing the Product shipped to Third Parties. "Recalled" and "Recalling" shall have comparable meanings; + +ee) "Rights" shall mean any and all proprietary, possessory, use and ownership rights, titles and interests (whether beneficial or legal) of all kinds whatsoever, howsoever arising, world-wide and whether partial or whole in nature; CONFIDENTIAL Page 10 of 49 + +Source: PARATEK PHARMACEUTICALS, INC., 10-K/A, 5/5/2017 + + + + + +THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ff) "Seizure" means any action by an Applicable Regulatory Authority in any jurisdiction, to detain or destroy any Product or any intermediate or finished products containing the Product or prevent release of the Product or finished products containing the Product. "Seized" and "Seizing" shall have comparable meanings; + +gg) "Services" refers to any activities undertaken by Supplier relating to the Product, as referenced in Section 6.6 (Services); + +hh) "Supplier Technology" means, to the extent such is not Customer Technology: [* * *]; + +ii) "Term" means the Initial Term and the Renewal Term, if applicable; + +jj) "Territory" means the United States of America and its territories and possessions and any other countries in the world added to the definition of "Territory" pursuant to Section 3.10; + +kk) "Third Party" means any party other than a Party to this Agreement or an Affiliate of a Party to this Agreement; and + +ll) "Yield" means, with respect to any batch of Product manufactured by Supplier under this Agreement, a percentage equal to the amount of Customer Material contained in such batch of Product delivered and accepted by Customer under this Agreement divided by the amount of Customer Material used in the Manufacturing Process of such batch of Product. + +1.2 Other Definitions + +Any words defined elsewhere in this Agreement shall have the particular meaning assigned to the words. + +1.3 Currency + +In this Agreement, all references to money or payments means U.S. Dollars and all payments made hereunder shall be made in that currency. + +1.4 Headings + +The headings in this Agreement are solely for convenience of reference and shall not be used for purposes of interpreting or construing the provisions hereof. + +1.5 Exhibits + +The Exhibits attached hereto shall be deemed to form an integral part of this Agreement. In the event of a conflict between the terms and conditions set out in this Agreement and the terms and conditions set out in any Exhibit hereto, the terms and conditions set out in this Agreement shall govern. CONFIDENTIAL Page 11 of 49 + +Source: PARATEK PHARMACEUTICALS, INC., 10-K/A, 5/5/2017 + + + + + +THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. 1.6 Applicable Law + +This Agreement shall be governed by and construed in accordance with the substantive Laws of the [* * *], excluding any rules of conflicts of laws that would apply the substantive laws of any other jurisdiction. + +Article 2 Term + +2.1 Term + +[* * *] + +This Agreement shall commence on the Effective Date and shall be valid until the [* * *] (the "Initial Term"). Both Parties shall use reasonably diligent efforts to come to a subsequent long-term agreement, including good faith negotiations regarding minimum volume-based Product commitments from Customer to Supplier, no later than [* * *] to replace this Agreement and serve as a long-term supply agreement between the Parties. Should the Parties have not agreed to the following agreement by [* * *], this Agreement shall automatically stay in force for a maximum of [* * *] (unless otherwise mutually agreed by the Parties or as otherwise set forth in Section 18.1(a)) or until the Parties have signed the follow-on agreement (the "Renewal Term"). + +2.2 Effect of Expiration on Purchase Orders + +For the avoidance of doubt, any signed Purchase Order which has not been completed at the date of expiry shall continue in effect unless cancelled in accordance with Section 6.4 or Article 18. For further avoidance of doubt, the terms and conditions of this Agreement shall remain applicable to any such signed Purchase Order which continues in effect. + +Article 3 Supply of Product + +3.1 Supply of Product + +a) During the Term, Supplier shall Manufacture the Product and perform all Services at its facilities located at Bubendorf, Switzerland and at Neuland, Switzerland (such facilities, the "Facilities" and each, a "Facility"). Supplier will supply to Customer or Customer's designee, the Product, Manufactured in accordance with the accepted Purchase Order placed by Customer, Master Batch Record, the Product Specifications, the Quality Agreement and cGMP Requirements and, subject to Section 3.1(b), in such quantities as ordered by Customer in Purchase Orders submitted pursuant to Section 6.1 and accepted pursuant to Section 6.2. CONFIDENTIAL Page 12 of 49 + +Source: PARATEK PHARMACEUTICALS, INC., 10-K/A, 5/5/2017 + + + + + +THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. b) [* * *] + +c) [* * *] + +d) In the event the Product manufactured and delivered to Customer under a Purchase Order is less than [* * *] of the amount ordered by Customer under such Purchase Order or if Customer otherwise reasonably requests, [* * *]. + +d) For clarity, nothing in this Section 3.1 limits Supplier's liability under this Agreement or under law, including liability for negligence, willful misconduct and failure to comply with Product Specifications; [* * *]. + +3.2 Manufacturing Services + +Supplier will make available its labor, equipment and Facilities for the Manufacture and characterization of the Product, including in-process and quality control analyses, release testing, storage and bulk packaging of the Product, and shipping of the Product, in accordance with the terms and conditions of this Agreement. + +3.3 Supply of Materials and Customer Material + +a) Materials + + i. Supplier shall, at its cost, be responsible for the purchase, planning, supply, control, testing, release and compliance of all Materials (other than Customer Materials unless expressly otherwise set forth in this Agreement) required for the Manufacture of the Product and performance of Services under accepted Purchase Orders. + + ii. Supplier shall ensure that all Materials (other than Customer Material unless expressly otherwise set forth in this Agreement) used in the Manufacture of the Product and performance of Services shall comply with the specifications mutually agreed by the Parties in writing and applicable requirements of the Quality Agreement. + + iii. Supplier shall test and inspect all Materials as set forth in the Quality Agreement and Supplier's standard incoming inspection andtesting procedures, which at a minimum will include appearance and identity testing. + +b) Customer Material + + + +i. Customer or its designee (for which Customer is responsible) shall, at its cost, be responsible for the planning, supply, control, testing, release and compliance of all Customer Materials supplied to Supplier that are required for the Manufacture of the Product and performance of Services under accepted Purchase Orders. Customer shall ensure that all Customer Materials meet the Customer Material Specifications. CONFIDENTIAL Page 13 of 49 + +Source: PARATEK PHARMACEUTICALS, INC., 10-K/A, 5/5/2017 + + + + + +THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. + + ii. Customer or its designee (for which Customer is responsible) shall, at its cost, be responsible for the qualification of suppliers ofCustomer Materials. + + iii. Customer or its designee (for which Customer is responsible) shall ensure that all Customer Materials used in the Manufacture of theProduct and performance of Services shall meet applicable requirements set forth in the Quality Agreement. + + iv. Supplier shall test and inspect all Customer Materials in accordance with the Quality Agreement and Supplier's standard incoming inspection and testing procedures. Supplier shall also independently release Customer Materials (but Supplier shall not use any Customer Materials that have not also been released by Customer). + + v. Upon receipt of a Purchase Order from Customer, Supplier will inform Customer of the latest delivery date required for Customer Materials [* * *]. Customer will use commercially reasonable efforts to coordinate delivery of Customer Materials by that date according to [* * *]. + + + +vi. If Customer is unable to deliver Customer Materials by the date required by Supplier, this will be promptly communicated to Supplier. Supplier will use commercially reasonable efforts to reallocate capacity and accommodate the planned Campaign at a later date. [* * *] Supplier will be released from its obligation under the relevant Purchase Order and any associated penalties regarding delivery date for the corresponding Product. In the event of any such delay in the delivery of Customer Materials to Supplier, the Parties shall negotiate in good faith and agree upon a revised schedule for the supply of Products to Customer or its designee, which revised schedule shall be binding on Supplier in accordance with this Agreement. + + + +vii. In the event that Customer Materials delivered to Supplier are found by Supplier to be non-conforming to the Customer Material Specifications at the time of delivery of such Customer Materials to Supplier and Customer challenges this finding, the Parties shall conduct a joint investigation. If Supplier and Customer are unable to resolve the issue of non-compliance then a sample of the relevant Customer Material will be submitted to an independent laboratory reasonably acceptable to both Parties for testing against the Customer Material Specifications, and determination whether or not the Customer Material did not comply with the Customer Material Specifications at the time of delivery to Supplier. The test results of the independent laboratory testing shall be final and binding upon Customer and Supplier, and the fees and expense of such laboratory testing and the out-of-pocket costs reasonably incurred by the Parties in the joint investigation shall be [* * *] In such event, except as set forth in Section 3.3(b)(vi), Supplier shall be released from its obligation with respect to the relevant Purchase Order and any associated penalties regarding a delayed delivery date for the corresponding Product under such Purchase Order. In the event that Customer delivers any such non-conforming Customer Materials, the Parties shall negotiate in good faith and agree upon a revised schedule for the supply of Products to Customer or its designee, which revised schedule shall be binding on Supplier in accordance with this Agreement. + + + +viii. Customer will provide Supplier with a Certificate of Analysis, a BSE/TSE statement and a Certificate of Compliance, data on the chemical and physical properties, toxicity, and handling, storing, and shipping information for any Customer Materials (MSDS or equivalent) and any other information that is necessary for the safe handling and transportation of Customer Materials. Customer shall update all of such information provided to Supplier after such updated information becomes available or known to Customer. CONFIDENTIAL Page 14 of 49 + +Source: PARATEK PHARMACEUTICALS, INC., 10-K/A, 5/5/2017 + + + + + +THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. Following receipt of Customer Materials from Customer and until the delivery of Product containing such Customer Materials, Supplier shall bear the risk of any loss of or damage to such Customer Materials resulting from [* * *]. Supplier shall retain exclusive control over Customer Materials and shall not transfer any portion of them to any Third Party without the prior written consent of Customer. Supplier shall identify Customer Materials at all times as Customer property and shall segregate same from other substances except as needed for the Manufacture of the Product and performance of the Services. Supplier shall not take any action inconsistent with Customer's ownership interest in Customer Materials, including but not limited to, Supplier shall keep Customer Materials free and clear of any liens, encumbrances, or security interests resulting from the actions or omissions of Supplier or its Affiliates and, in the event of any such liens, encumbrances, or security interests, Supplier shall promptly remove same at its sole expense. + +3.4 Production Capacity + +Supplier agrees to provide to Customer all such facility and Manufacturing capacity to perform the Manufacturing Process as required to meet the Product requirements as described in the then-current Short Term Rolling Forecast (as defined below). Supplier agrees that it shall provide to Customer at least [* * *] prior written notice of any scheduled shutdown at any Facility that may impact Supplier's ability to Manufacture and timely deliver the Product to Customer under this Agreement, [* * *]. + +For the avoidance of doubt, Supplier confirms that it has the capacity to deliver [* * *], or such adjusted amount as mutually agreed by the Parties. Batch size and annual capacity could be adjusted in the future by mutual agreement of the Parties based on results of ongoing scale up work. + +3.5 Processing Changes + +a) Supplier shall not make any material changes to the Manufacturing Process, starting materials, the Master Batch Record or Product Specifications for the Manufacture of the Product except in accordance with the Quality Agreement. For clarity, formatting changes in the documentation related to the Master Batch Record shall not be deemed a "material" change under this Section 3.5(a). + +b) Customer (or Supplier, if changes are necessitated by Applicable Law) may request reasonable changes to the Manufacturing Process, the Master Batch Record, the Product Specifications, storage, testing or analytical methods or any starting materials for the Manufacture of the Product [* * *]. The notice of any CONFIDENTIAL Page 15 of 49 + +Source: PARATEK PHARMACEUTICALS, INC., 10-K/A, 5/5/2017 + + + + + +THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. such change by Customer shall comply with the cGMP documentation system and standard operating procedures maintained by Supplier at the Facilities. No material modifications or additions to the machinery, equipment and other fixed assets used by Supplier in the manufacture and supply of the Product to Customer shall be required without the consent of Supplier, which consent may be granted or withheld in Supplier's sole discretion. + +c) In the event of a change to the Manufacturing Process, the Master Batch Record or the Product Specifications, the relevant documents and related Exhibits to this Agreement will be revised accordingly. + +d) All operational Master Batch Records and standard operating procedures utilized by Supplier are in the German language. Any requirement by Customer for translation of such records will be billed at cost. + +3.6 Monitoring of Facilities + +Customer shall have the right to have a representative present at each Facility to observe the performance of the Manufacturing Process by Supplier during normal business hours with at least [* * *] advance notice. Supplier shall have the right to reasonably restrict such observation access to prevent undue interference with Supplier's business operations or compromise Supplier's confidentiality obligations to Third Parties; provided, however, Customer's observation access shall be absolute with regard to the Manufacturing Process for the Product. As such it is Supplier's obligation to segregate Third Party documents and materials from Customer's documents and materials and Customer will not be restricted from observing any part of Customer's Manufacturing Process and related documentation. + +3.7 Subcontracting + +Supplier shall obtain Customer's prior written approval, in accordance with the Quality Agreement, to use a subcontractor to perform services under this Agreement, such approval not to be unreasonably withheld, conditioned or delayed. Any and all such contractors shall perform such services in accordance with the terms and conditions of this Agreement, and Supplier shall remain liable for the performance of its obligations under this Agreement. Supplier may use the Third Party suppliers set forth in Schedule 4 of the Quality Agreement for such specific activities set forth opposite their respective name(s) in such Schedule. It is hereby agreed that Customer may authorize the use of additional Third Party suppliers under this Agreement in accordance with the Quality Agreement. Supplier agrees to use the Third Party suppliers identified, as applicable, in Schedule 4 of the Quality Agreement as the exclusive suppliers of starting materials for the Product Manufacturing Process and any deviation from said supply sources requires the prior written approval of Customer, in accordance with the Quality Agreement, such approval not to be unreasonably withheld, conditioned or delayed. + +3.8 [* * *] CONFIDENTIAL Page 16 of 49 + +Source: PARATEK PHARMACEUTICALS, INC., 10-K/A, 5/5/2017 + + + + + +THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. 3.9 [* * *] + +3.10 Territory Expansion + +At any time during the Term, Customer may provide written notice to Supplier of its intent to expand the Territory under this Agreement to include one or more additional countries or territories. Promptly following such notification, the Steering Committee (as defined below) shall meet to discuss any expansion of Supplier's Manufacturing capabilities necessitated by such expansion in accordance with clause (b) of Section 7.4 and the Parties shall execute an amendment that (a) amends the definition of "Territory" under clause jj) of Section 1.1 to include such additional countries or territories and (b) modifies the provisions of this Agreement as necessary in order to reflect the regulatory requirements of such additional countries or territories. For clarity, neither Party shall be obligated to amend the definition of Territory at any point during the Term. + +3.11 Supply to Customer Licensees + +In the event Customer delivers a written request to Supplier requesting that Supplier engage in negotiations with a Customer Licensee on the terms of a definitive agreement pursuant to which Supplier would Manufacture and supply Product to such Customer Licensee or a designee of a Customer Licensee, Supplier shall use commercially reasonable good faith efforts to negotiate and execute such agreement on substantially the same terms of this Agreement (including pricing, orders, forecasting, delivery, non-conformance, failure to supply, term and termination). + +3.12 Alternative Supply + +At any time during the Term, Customer may elect to qualify one or more alternative Manufacturing facilities (whether owned by a Third Party, Customer or by one of Customer's Affiliates) to Manufacture the Products (each, a "Backup Supplier"). Customer shall be responsible for any costs associated with qualifying Backup Suppliers. [* * *]. Supplier shall use commercially reasonable efforts to cooperate with the qualification of any Backup Supplier, including (a) technology transfer of all Supplier Technology necessary or useful for the Manufacture of the Products; provided that, to the extent that such technology and know-how constitutes Confidential Information of Supplier, it shall be subject to the provisions of Article 12 and Customer's designated alternative supplier shall be required to enter into a confidentiality agreement with Supplier containing substantially the same terms as Article 12 and (b) providing Customer and any Backup Supplier with consulting services related to the Manufacture, quality control and quality assurance of the Products. Any work related to technology transfer or qualification of a second supplier shall be considered as Services under this Agreement as described in Section 6.6. For the avoidance of doubt, Supplier will first prepare a customary Scope of Work describing the Services to be performed and the costs to Customer for the CONFIDENTIAL Page 17 of 49 + +Source: PARATEK PHARMACEUTICALS, INC., 10-K/A, 5/5/2017 + + + + + +THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. approval of Customer. No Services shall be commenced by Supplier unless (a) a customary Scope of Work relating to such Services has been agreed, executed and delivered by both Supplier and Customer; and (b) a Purchase Order has been issued by Customer and accepted by Supplier relating to such Services, which Purchase Order references the specific Scope of Work and this Agreement. In case of disagreement on the Scope of Work, the Parties will enter into good faith negotiations to reach a mutually satisfactory resolution. + +Article 4 Forecasts + +4.1 Short Term Rolling Forecasts + +Commencing on the Effective Date, Customer shall provide to Supplier on a calendar quarterly basis on or before the last Business Day of each calendar quarter during the Term, a short term rolling forecast for the [* * *] period commencing on the first day of the following calendar month (each, a "Short Term Rolling Forecast"). Each Short Term Rolling Forecast shall set out Customer's reasonable and genuine estimate of the quantities of the Product to be ordered by Customer and to be delivered by Supplier under this Agreement for the following [* * *]. + +(A): In case of an order volume equal or less than [* * *]: The first [* * *] of each short term rolling forecast shall be binding firm purchase orders by Customer (each a "Purchase Order") and the last [* * *] of each short term rolling forecast shall be non-binding, good faith estimates. Customer shall provide Supplier with one or more Purchase Order(s) for Product consistent with the first [* * *] binding portion of each Short Term Rolling Forecast, at least [* * *] in advance of the scheduled delivery dates provided in such Purchase Order(s). + +(B): In case of order volume larger than [* * *]: The first [* * *] of each short term rolling forecast shall be binding firm purchase orders by Customer (each a "Purchase Order") and the last [* * *] of each short term rolling forecast shall be non-binding, good faith estimates. Customer shall provide Supplier with one or more Purchase Order(s) for Product consistent with the first [* * *] binding portion of each Short Term Rolling Forecast, at least [* * *] in advance of the scheduled delivery dates provided in such Purchase Order(s). + +4.2 Long Term Forecasts + +Within [* * *] after the Effective Date, Customer shall provide to Supplier a long term forecast of the estimated quantities of the Product required by Customer from Supplier during the following [* * *] (the "Long Term Forecast"). Customer shall during the Term provide to Supplier together with the Short Term Rolling Forecast, on a calendar quarter basis, updates of such Long Term Forecasts for the following [* * *] (or the balance of the Term, if shorter). For the avoidance of doubt, the first [* * *] of each Long Term Forecast shall constitute the Short Term Rolling Forecast of which the first [* * *], or the first [* * *], as the case may be due to the order volume, shall be binding and the remainder of the Short Term Rolling Forecast and Long Term Forecast shall be non-binding. CONFIDENTIAL Page 18 of 49 + +Source: PARATEK PHARMACEUTICALS, INC., 10-K/A, 5/5/2017 + + + + + +THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. Article 5 Testing and Samples + +5.1 Release Testing + +a) Supplier shall perform release testing of all batches of Product prior to delivery to Customer in accordance with the Product Specifications and the Master Batch Record, to determine whether such batches of Product meet the requirements set out in the Product Specifications. Customer shall be responsible for the final release of Product prior to shipping and further processing. + +b) Supplier shall ensure that: + +(i) its quality assurance department approves each batch of Product for release promptly following successful completion of release testing done by its quality control department (in this section "promptly" means [* * *]); and + +(ii) its quality assurance department does not release any batch of Product that does not meet the requirements set out in the Product Specifications without prior written consent of Customer. + +c) Supplier shall prepare a Certificate of Analysis and Certificate of Conformance, setting out the results of the release testing and which shall be included with each batch of Product shipped to Customer. + +d) Customer shall have the right to oversee the activities set forth in this Section 5.1 in accordance with the Quality Agreement. + +5.2 Additional Release Testing + +Customer reserves the right to conduct, in its sole discretion and at its expense, additional analytical testing on the Product. + +5.3 Retention Samples + +Supplier shall retain and store in accordance with cGMP Requirements, Applicable Law and Supplier's internal quality standard operating procedures, retention samples of each batch of Product Manufactured under this Agreement. CONFIDENTIAL Page 19 of 49 + +Source: PARATEK PHARMACEUTICALS, INC., 10-K/A, 5/5/2017 + + + + + +THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. 5.4 Stability Testing + +If requested by Customer, Supplier shall be responsible for performing annual stability testing of the Product and shall ensure that all such testing is performed in compliance with the applicable ICH regulations (e.g. follow-up stability studies of commercially used products). Costs associated with annual stability testing will be quoted separately from commercial unit pricing under a separate Scope of Work or Purchase Order. + +5.5 Reference Standards + +If requested by Customer, Supplier shall be responsible for qualification and requalification of reference standards. Costs associated with qualification and requalification of reference standards will be quoted separately from commercial unit pricing under a separate Scope of Work or Purchase Order. + +5.6 Preparation of Process Qualification + +All costs associated with the preparation of process qualification (as but not limited to analytical method validation, process optimization, PAR studies, preparation of quality risk assessments, preparation of validation protocols and report per stage, preparation of validation master protocol and report, preparation of process performance assessment) will be handled separately from the commercial unit pricing under separate Scopes of Work or Purchase Orders. Until otherwise agreed, all pricing for process qualification services to be similar to current framework between Supplier and Customer. + +Article 6 Purchase Orders + +6.1 Placement of Purchase Orders + +Consistent with the Short Term Rolling Forecast as set forth in Section 4.1, Customer shall place with Supplier Purchase Orders, stating Customer's required delivery data, anticipated delivery schedule and the anticipated Fees, in accordance with the Fee Schedule set out in Exhibit C, for each delivery of Product to be made under this Agreement. Purchase Orders must have at least [* * *] of lead time before anticipated delivery to allow sufficient time for Supplier's planning, raw material purchases, production and release. Each Purchase Order shall constitute a firm, binding order, upon Supplier's acceptance thereof in accordance with Section 6.2. + +6.2 Acceptance of Orders + +Supplier may reject any Purchase Order placed by Customer that is not placed in accordance with this Agreement by giving written notice (e-mail shall constitute written notice) to Customer within a reasonable time, not to exceed [* * *] after receipt of each Purchase Order, setting out the reason for such rejection. In the event Supplier does not respond within [* * *], such Purchase Order shall be considered accepted by CONFIDENTIAL Page 20 of 49 + +Source: PARATEK PHARMACEUTICALS, INC., 10-K/A, 5/5/2017 + + + + + +THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. Supplier. In the event the ordered amount of Product under the Purchase Order differs more than [* * *] from the firm portion of the most recent Short Term Rolling Forecast or more than [* * *] from the firm portion of the most recent Short Term Rolling Forecast, Supplier shall [* * *]. + +In the event the terms and conditions of this Agreement conflict with the terms and conditions of the Purchase Order, the terms and conditions of this Agreement shall take precedence unless otherwise agreed upon by the Parties. + +6.3 Delays + +If, after acceptance of a Purchase Order, Supplier is unable for any reason to supply quantities of the Product in accordance with the Purchase Orders placed by Customer under Section 6.1 on the timelines set forth therein, Supplier shall inform Customer within [* * *] of becoming aware of its inability to supply the Product of the expected duration of such inability and shall keep Customer informed on a timely basis of developments during any such period of time. The Parties shall cooperate to expedite the scheduling of the resumption of Manufacture of the Product by Supplier when any such inability has been alleviated. In the event of any delay in delivery of Product from the delivery date on the applicable Purchase Order for such Product, if such delay is: [* * *]. + +6.4 Cancellation of Purchase Orders + +In the event that Customer cancels all or part of a Purchase Order already accepted by Supplier, Supplier will use best efforts to reallocate capacity and mitigate any resultant costs of such cancellation. Except as expressly set forth in Section 3.4, Section 6.2, Section 6.3 and Section 6.5, the following will be charged to Customer: + +[* * *] + +6.5 Material Failure of Supply + +If Supplier, for any reason, fails to supply at least [* * *] of the units of Product ordered by Customer pursuant to valid Purchase Orders during any period of [* * *] or longer beginning on the requested delivery date, in addition to and without limiting any other remedies available to Customer, [* * *]. + +6.6 Services + +From time-to-time during the Term, Customer may request that Supplier perform Services for Customer relating to the Product, for which Customer shall pay reasonable compensation to Supplier. In the event that Supplier is willing to perform any such Services requested by Customer, Supplier will first prepare a scope of work describing the Services to be performed and the costs to Customer for the approval of Customer (each CONFIDENTIAL Page 21 of 49 + +Source: PARATEK PHARMACEUTICALS, INC., 10-K/A, 5/5/2017 + + + + + +THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. a "Scope of Work"). No Services shall be commenced by Supplier unless (a) a Scope of Work relating to such Services has been agreed, executed and delivered by both Supplier and Customer; and (b) a Purchase Order has been issued by Customer and accepted by Supplier relating to such Services which Purchase Order references the specific Scope of Work and this Agreement. Customer shall have the right to terminate any Scope of Work and corresponding Purchase Order for Services at any time on reasonable advance written notice to Supplier (without terminating this Agreement), in which case Customer shall be responsible for: + +[* * *] + +Article 7 Shipment of Product + +7.1 Storage of Product + +Supplier shall ensure that all Product held in storage is stored in accordance with the Product Specifications until shipped to Customer under this Agreement and that all storage areas meet cGMP Requirements. [* * *] + +Should any Product, during storage, change chemical composition, then Supplier and Customer will agree upon a plan for disposition of the Product, including possible disposal, reworking or using the Product "as is." For clarity, Supplier shall not commence any action set forth in the preceding sentence until such a plan has been agreed by Customer. The cost of reworking the Product shall be borne by [* * *]. + +The cost of storage, monitoring (including any on-going analytical analysis), and insurance before shipment shall be borne by [* * *]. + +7.2 Release and Shipment of Product + +a) Supplier shall notify Customer by facsimile or electronic transmission of each batch of Product Manufactured by it under this Agreement in accordance with this Article 7 as soon as reasonably possible, and no later than [* * *], after Supplier's quality assurance department approves the batch for release following successful completion of the release testing procedures. + +b) Supplier shall pack and label shipping boxes and ship all orders of Product in a prompt and timely manner and in accordance with international transport guidelines and regulations, the Product Specifications, and Customer's reasonable written instructions including, as applicable, for such shipment and the terms of this Agreement. + +c) Supplier shall not sell or otherwise dispose of any Product except in accordance with the terms and conditions of this Agreement. + +d) The Products will be shipped [* * *]. All freight, applicable taxes (excluding any and all income taxes, employment taxes and the like incurred by Supplier), duties, express and delivery charges shall be for CONFIDENTIAL Page 22 of 49 + +Source: PARATEK PHARMACEUTICALS, INC., 10-K/A, 5/5/2017 + + + + + +THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. Customer's account and shall not be subject to discount. Delivery shall be deemed completed and risk of loss or damage of the Products shall pass to Customer upon [* * *]. Title to the Products shall pass to Customer upon [* * *]. + +7.3 Documentation + +Supplier shall include with each shipment of Product shipped to Customer under Section 7.2: + +a) commercially appropriate documentation; + +b) a Certificate of Analysis and Certificate of Compliance in English for each batch of Product included in the shipment, in the forms set out in Exhibit D; and + +c) a copy of any deviation or investigation reports concerning each batch of Product shipped (to be sent separately from shipment as part of the batch record documentation). + +7.4 Steering Committee + +The Parties agree to form a steering committee (the "Steering Committee") to oversee their interactions under this Agreement as provided herein. Each Party shall name a mutually agreed upon equal number of representatives to the Steering Committee, which shall meet either in person or remotely (as mutually agreed) at least [* * *], or as otherwise mutually agreed by the Parties. The primary function of the Steering Committee is to ensure the ongoing communication between the Parties and discuss and resolve any issues arising under this Agreement. The Steering Committee shall in particular have responsibility for the following: (a) reviewing key metrics for the Product's production and quality, and reviewing and monitoring any required remediation with respect to production and quality for the Product; (b) reviewing Supplier's capacity and short-term and long-term planning for clinical and commercial supply of the Product, including anticipating any capacity shortfalls and discussing the cost allocation of investments required to increase capacity or improve efficiencies; (c) [* * *]; (d) reviewing and discussing draft Scopes of Work; (e) discussing the cost allocation, if any, of extraordinary costs incurred by Supplier in connection with the Manufacture of Products or provision of Services; and (f) establishing resource priorities and resolving resource conflicts. + +Article 8 Acceptance of Shipments + +8.1 Acceptance of Shipments + +Customer or its designees shall, within a period of [* * *] after the date of physical receipt of any shipment of Product from Supplier, inspect the Product for any shortages or any defects or deviations of the Product CONFIDENTIAL Page 23 of 49 + +Source: PARATEK PHARMACEUTICALS, INC., 10-K/A, 5/5/2017 + + + + + +THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. Specifications (hereinafter "Out Of Specification") that would be apparent from visual inspections of the Product. In the event that Customer is of the opinion that the Product is Out Of Specification at the time of delivery, Customer shall, within [* * *] after the date of physical receipt of Product, provide Supplier with a written notice to reject the Product (a "Notice of Rejection"), which shall include a description of the grounds for rejection and copies of test reports and testing methodology conducted on the Product, if any. However, with respect to any Out Of Specification Product which would not be apparent from a reasonable visual inspection on delivery, including in the case of any hidden defects, such Notice of Rejection shall be provided to Supplier not later than [* * *]. + +The failure of Customer or its designees to notify Supplier of any Out Of Specification Product in the manner set forth herein above shall constitute confirmation of the acceptance thereof. + +8.2 Dispute of Rejected Product + +Supplier may, at its option, within [* * *] of receipt of any Notice of Rejection under Section 8.1, challenge the Notice of Rejection by delivering written notice thereof to Customer. In the event that Supplier challenges the Notice of Rejection, Customer and Supplier shall conduct a joint investigation. If Supplier and Customer are unable to resolve the issue of non-compliance then a sample of the Product will be submitted to an independent laboratory reasonably acceptable to both Parties for testing against the Product Specifications, and determination whether or not the non-compliance may be caused by a fault on the part of Supplier. The test results of the independent laboratory testing shall be final and binding upon Customer and Supplier, and the fees and expense of such laboratory testing shall be borne entirely by the Party against whom such laboratory's findings are made. + +8.3 Remedies + +a) Except as set forth in this Agreement, in the event of a Product shortage[* * *]. + +b) In the event that Customer issues a timely Notice of Rejection in respect to any Out Of Specification Product: + +[* * *] + +The Party in possession of any rejected Product which does not comply with the Product Specifications or cGMP Requirements shall destroy, in accordance with all Applicable Law and in a manner to which Customer has given its prior written approval, all rejected Product in its possession, but only after the Parties have followed the procedures specified under Sections 8.2 and 8.3. No rejected Product shall be sold, reprocessed, salvaged, reclaimed or otherwise reused in any manner by Supplier or Customer without the prior written agreement of the Parties with the exception of use testing and analysis by Supplier and/or Customer in the investigating the cause of Product rejection. Representatives of the Party not performing the destruction shall be permitted to witness the destruction of the rejected Product under this section. CONFIDENTIAL Page 24 of 49 + +Source: PARATEK PHARMACEUTICALS, INC., 10-K/A, 5/5/2017 + + + + + +THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. Article 9 Fees + +9.1 Fees + +a) Customer shall pay to Supplier, in respect of each Purchase Order placed by Customer, the applicable Fees for the supply of the Product in bulk quantities under this Agreement, in accordance with the terms of this Agreement. + +b) Except as otherwise expressly provided in this Agreement, the Fees specified in each Purchase Order accepted by Supplier shall be full compensation for all Manufacturing and characterization activities and Materials in respect thereof. Customer shall make all requests for processing changes to be performed under this Agreement in writing under Section 3.5 and Supplier shall provide Customer a cost estimate for such work. + +9.2 Adjustments to Fees + +During the Term of this Agreement, either Party may request an increase or decrease of the Fees specified in Exhibit C no more than [* * *] and such change in Fees shall take effect on [* * *] for which such Fee change is requested. Such change in Fees may be requested due to any of the following events: + +[* * *] or + +(iii) any other cost adjustments mutually agreed to by the Parties via the Steering Committee. + +Supplier will make available to Customer records that substantiate any adjustment to Fees for a Product proposed by Supplier and Supplier will provide Customer with any Customer records that provide evidence for a decrease in Fees pursuant to clause (i); such records to be considered Supplier's Confidential Information hereunder. + +The Party proposing an adjustment in the Fees will notify the other Party of the adjustment by delivering to the other Party at least [* * *] prior to the effective date of the Fees adjustment, written notice of the proposed adjustment. Said written notice shall specify the effective date as [* * *] in which the Fee adjustment becomes effective and the amounts for the adjusted Fees. On receipt of such request, the Parties shall seek in good faith to agree to an adjustment of the Fees, based on such reasonable and objective evidence. Each Party shall use its commercially reasonable efforts to mitigate any cost increase. The Fees for any Product ordered by Customer prior to the effective date of the Fees adjustment shall be the Fees existing on the date Customer placed the Purchase Order, as set out in the Purchase Order. CONFIDENTIAL Page 25 of 49 + +Source: PARATEK PHARMACEUTICALS, INC., 10-K/A, 5/5/2017 + + + + + +THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. 9.3 Taxes + +The Fees shall be exclusive of any taxes, customs duties, levies and other charges applicable to the supply of the Product under this Agreement ("Taxes"). Customer shall pay any Taxes and reimburse Supplier for any Taxes for which Customer is responsible but which have been paid by Supplier. Subject to compliance with laws, the Parties shall reasonably cooperate to eliminate or minimize the amount of any such Taxes imposed on the transactions contemplated in this Agreement. For clarity, Customer shall not be liable for any taxes incurred by the Supplier including, without limitation, income taxes, employment taxes, use taxes, and the like incurred by Supplier, or for any penalties or interest related to the failure of Supplier to collect sales, use, VAT or similar taxes. + +Article 10 Invoicing and Payment + +10.1 Issuance of Invoices + +Supplier shall, in accordance with Section 10.2, invoice Customer for each Purchase Order accepted under Section 6.2 as follows: + +10.2 Invoice Contents + +All invoices issued by Supplier under Section 10.1 shall show: + +a) the actual quantity of Product shipped; + +b) the lot number of each batch of Product shipped; + +c) the Fees for the quantity of Product shipped, based on the Fees for the Product set out in the applicable Purchase Order; and + +d) the Purchase Order number placed by Customer for the Product shipped. + +If Customer disputes for any reason with the amount of any invoice submitted by Supplier, Customer shall notify Supplier of such dispute within [* * *] after the date of the invoice, and the Parties shall promptly attempt to resolve the dispute. If Customer does not notify Supplier of any such dispute within such [* * *] period, such invoice will be final and binding on Customer and Supplier, subject to the correction of mathematical errors. CONFIDENTIAL Page 26 of 49 + +Source: PARATEK PHARMACEUTICALS, INC., 10-K/A, 5/5/2017 + + + + + +THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. 10.3 Delay of Shipment + +If Customer delays shipment of Product released by Supplier in accordance with Section 7.2, Supplier may issue its invoice under Section 10.1 on or after the release, with reference to the Product released under Section 10.2. + +10.4 Payment of Invoices + +Each invoice provided by Supplier to Customer under Section 10.1, to the extent accurate, shall be paid by Customer to Supplier within [* * *] after the date of the invoice to the extent that Customer does not reasonably dispute that portion of the invoice in good faith. + +All payments will be made in U.S. Dollars by SWIFT bank transfer directly to the Supplier account as specified in the respective Purchase Orders. + +Article 11 Intellectual Property + +11.1 Title + +a) The Parties agree that, as between Customer and Supplier, each Party owns its respective Confidential Information, Customer owns all Rights in and to the Customer Technology, the Product(s) and its Chemical Synthesis and Supplier owns all Rights in and to Supplier Technology. + +b) Supplier shall not knowingly use in the Manufacturing Process any Intellectual Property protected by any patent or patent application licensed to Supplier by any Third Party, except with the prior written consent of Customer. + +11.2 No Grant of Rights + +Except as otherwise provided herein, neither Party hereto shall be deemed by this Agreement to have been granted any Rights of the other Party. CONFIDENTIAL Page 27 of 49 + +Source: PARATEK PHARMACEUTICALS, INC., 10-K/A, 5/5/2017 + + + + + +THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. WHERE TWO PAGES OF MATERIAL HAVE BEEN OMITTED, THE REDACTED MATERIAL IS MARKED WITH [†]. 11.3 Grant of License by Customer + +During the Term, Customer hereby grants to Supplier a paid-up, royalty-free, non-exclusive license, without the right to sublicense, to Customer's Confidential Information and the Customer Technology reasonably necessary to Manufacture and supply to Customer the Product hereunder, but only for such purposes. The Parties agree that the license grant contained in this Section 11.3 is personal to Supplier only and shall be exercised by Supplier only, and Supplier agrees to make use of Customer's Confidential Information and the Customer Technology only in accordance with this license and not to disclose any such Confidential Information or Customer Technology to any Third Party, except that nothing herein shall prevent Supplier from disclosing to its permitted subcontractors under confidentiality obligations at least as strict as those that bind Supplier under this Agreement, as necessary to perform Supplier's obligations hereunder. + +11.4 Ownership of Inventions + +With respect to any ideas, innovations, Improvements or inventions (whether patentable or non-patentable) developed by Supplier during the Term of this Agreement and [* * *], the Parties agree that, as between Customer and Supplier, Customer shall own all Rights to such Inventions and may obtain patent, copyright, and other proprietary protection respecting such Inventions. Supplier agrees to promptly disclose any Inventions to Customer. Supplier agrees to assign (and cause its employees or permitted subcontractors to assign), and does hereby assign, any and all rights, title and interests of Supplier in, to or under any Inventions to Customer. [* * *] + +11.5 Patents to Inventions + +With respect to all Intellectual Property created or developed under this Agreement, [* * *]. + +11.6 No Use of Trademarks + +Nothing contained herein shall give either Party any right to use any trademark of the other Party. All trademarks and service marks adopted by Customer to identify the Product or a Customer Product are and shall remain the property of Customer. + +11.7 [†] CONFIDENTIAL Page 28 of 49 + +Source: PARATEK PHARMACEUTICALS, INC., 10-K/A, 5/5/2017 + + + + + +THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. Article 12 Confidentiality & Publicity + +12.1 Obligation of Confidentiality + +It is contemplated that in the course of the performance of this Agreement each Party may, from time to time, disclose Confidential Information to the other. Each Party agrees: + +a) to keep and use in strict confidence all Confidential Information of the other Party that each Party acquires, sees, or is informed of, as a direct or indirect consequence of this Agreement and to not, without the prior written consent of the other Party, disclose any such Confidential Information or recollections thereof to any person or entity other than its corporate counsel, employees and contractors who are under an obligation of confidentiality on terms substantially similar to those set out in this Agreement, who have been informed of the confidential nature of the Confidential Information and who reasonably require such information in the performance of their duties under this Agreement; + +b) not to use, copy, duplicate, reproduce, translate or adapt, either directly or indirectly, any of the Confidential Information of the other Party or any recollections thereof for any purpose other than the performance of the Services and the Manufacture and characterization of the Product under this Agreement, without the other Party's prior written approval; + +c) that all copies, duplicates, reproductions, translations or adaptations of any Confidential Information of the other Party permitted to be made hereunder shall be clearly labelled as confidential; and + +d) to take all reasonable steps to prevent material in its possession that contains or refers to Confidential Information of the other Party from being discovered, used or copied by Third Parties and to use reasonable steps to protect and safeguard all Confidential Information of the other Party in its possession from all loss, theft or destruction. + +Upon the termination of this Agreement, each Party shall promptly destroy or return all Confidential Information to the disclosing Party in accordance with Section 18.4. + +12.2 Disclosure with Consent + +A Party receiving Confidential Information may, with the written consent of the disclosing Party, disclose such Confidential Information to entities or persons other than its corporate counsel, employees and contractors, on such terms and conditions as the disclosing Party may specify. + +12.3 Publicity + +During the Term, the Parties agree that no press release, public announcement or publication regarding this Agreement or the relationship of the Parties (except to the extent that it may be legally required), shall be made unless mutually agreed to in writing prior to the release or dissemination of any such press release, public announcement or publication. CONFIDENTIAL Page 29 of 49 + +Source: PARATEK PHARMACEUTICALS, INC., 10-K/A, 5/5/2017 + + + + + +THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. 12.4 Disclosure Required by Law + +No provision of this Agreement shall be construed so as to preclude such disclosure of Confidential Information of the other Party as may be inherent in or reasonably necessary to the securing from any governmental agency of any necessary regulatory approval or license. To the extent required by legal process, subpoena, warrant, or court order, either Party may disclose Confidential Information only to the extent required to comply with said legal proceeding, provided that the Party obligated to make such disclosure shall, when lawfully permissible, provide reasonable prior notice the other Party so as to allow the other Party to take steps to oppose or limit the required disclosure. + +12.5 Employee Confidentiality and Invention Assignment. + +(a) Supplier acknowledges and agrees that, with respect to any past or current employee, staff, contractor, subcontractor or other agent of Supplier or its Affiliates who has conducted services or activities related to the development, manufacture or supply of Products for or to Customer (collectively, the "Supplier Employees"), Supplier or its Affiliate has entered into a binding written arrangement(s) with each such Supplier Employee that requires: (i) that such Supplier Employee will, at a minimum, keep the Confidential Information of Customer confidential and only use such Confidential Information to conduct permitted activities for Customer under Supplier's employment; and (ii) that such Supplier Employee assign to Supplier all of its right, title and interest in and to any inventions (including, without limitation, know-how, improvements, ideas, information, materials and processes) and all intellectual property rights therein that such Supplier Employee, alone or jointly with others, conceives, develops or reduces to practice during their period of employment or work with Supplier or its Affiliate. + +(b) Supplier further covenants and agrees that, (i) with respect to any future Supplier Employee, Supplier or its Affiliate shall enter into a binding written arrangement with such Supplier Employee as set forth in Section 12.5(a) and (ii) with respect to any binding written arrangement referred to in this Section 12.5(b) or Section 12.5(a), Supplier shall enforce, to the fullest extent permitted under Applicable Law, the terms and provisions of such arrangement. + +12.6 Duration of Obligation + +Unless otherwise agreed by the Parties in writing, the obligations of the Parties relating to Confidential Information set out in this Article 12 shall survive the termination of this Agreement for a period of [* * *]. CONFIDENTIAL Page 30 of 49 + +Source: PARATEK PHARMACEUTICALS, INC., 10-K/A, 5/5/2017 + + + + + +THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. Article 13 Representations, Warranties and Covenants + +13.1 Supplier's Representations, Warranties and Covenants + +Supplier hereby represents, warrants and covenants to Customer as follows: + +a) Supplier has been duly organized and is validly subsisting and in good standing in its jurisdiction of organization and has the power to carry on the business as now being conducted by it; + +b) the execution, delivery and performance of this Agreement by Supplier have been duly authorized by all requisite corporate action and do not require any shareholder action or approval; + +c) Supplier has the right and authority to enter into this Agreement and perform its obligations hereunder, and this Agreement is a legal and valid obligation binding upon Supplier and enforceable in accordance with its terms; + +d) Supplier has not made and will not make any commitments to Third Parties inconsistent with or in derogation of Supplier's obligations under this Agreement and Supplier is to its knowledge not subject to any obligations that would prevent it from entering into or carrying out its obligations under this Agreement, and Supplier's compliance with the terms and provisions hereof does not and will not conflict with or result in a breach of any of the terms and provisions of or constitute a default under (i) a loan agreement, guaranty, financing agreement, agreement affecting a Product or other agreement or instrument binding or affecting it or its property; (ii) the provisions of its charter or operative documents or by-laws; or (iii) any order, writ, injunction or decree of any court or governmental authority entered against it or by which any of its property is bound; + +e) Supplier shall comply with all Applicable Law relating to its activities under this Agreement; + +f) all Product delivered to Customer under this Agreement will have been Manufactured, stored and shipped in a competent fashion in accordance with the Master Batch Record, the Product Specifications, this Agreement, the Quality Agreement, Applicable Law and cGMP Requirements by qualified personnel and, to Supplier's knowledge, will be free from defects; + +g) the Facilities, including equipment, systems, utilities and services, complies with cGMP Requirements for the Manufacture of the Product under this Agreement; + +h) the Facilities and Supplier's procedures and processes in the Facilities are in compliance with Applicable Law, including applicable environmental, health and safety requirements, for the Manufacture of the Product under this Agreement; + +i) Supplier does not, at any time from and after the Effective Date, retain or use the services of (i) any person debarred under 21 U.S.C. § 335a or (ii) any person who has been convicted of a crime as defined under the FD&C Act, in each case in any capacity associated with or related to the Manufacture or supply of Products or any service rendered to Customer under this Agreement or the Quality Agreement; + +j) all Product supplied by Supplier under this Agreement shall be delivered by it free and clear of any security interests, liens, claims, pledges or encumbrances of any kind or nature except for such as are created by Customer; and + +k) all records and reports required to be maintained by Supplier under cGMP Requirements shall be accurate and complete in all material respects. CONFIDENTIAL Page 31 of 49 + +Source: PARATEK PHARMACEUTICALS, INC., 10-K/A, 5/5/2017 + + + + + +THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. In no event shall Customer seek to recover a refund for, or replacement to, an Out of Specification Product due to Supplier's breach of Sections 13.1 (f), (g) or (h) except pursuant to Article 8. + +13.2 Customer's Representations, Warranties and Covenants + +Customer hereby represents, warrants and covenants to Supplier as follows: + +a) Customer has been duly organized and is validly subsisting and in good standing in its jurisdiction of organization and has the power to carry on the business as now being conducted by it; + +b) the execution, delivery and performance of this Agreement by Customer have been duly authorized by all requisite corporate action and do not require any shareholder action or approval; + +c) Customer has the right and authority to enter into this Agreement and perform its obligations hereunder, and this Agreement is a legal and valid obligation binding upon Customer and enforceable in accordance with its terms; + +d) Customer has not made and will not make any commitments to Third Parties inconsistent with or in derogation of Customer's obligations under this Agreement and Customer is not subject to any obligations that would prevent it from entering into or carrying out its obligations under this Agreement, and Customer's compliance with the terms and provisions hereof does not and will not conflict with or result in a breach of any of the terms and provisions of or constitute a default under (i) a loan agreement, guaranty, financing agreement, agreement affecting a Product or other agreement or instrument binding or affecting it or its property; (ii) the provisions of its charter or operative documents or by-laws; or (iii) any order, writ, injunction or decree of any court or governmental authority entered against it or by which any of its property is bound; + +e) Customer shall comply with all Applicable Law relating to its activities under this Agreement; and + +f) to Customer's knowledge, [* * *]. + +13.3 No Other Warranty + +THE WARRANTIES SET OUT IN SECTIONS 13.1 AND 13.2 ARE THE SOLE WARRANTIES MADE BY EITHER PARTY TO THE OTHER AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE PARTIES HEREBY DISCLAIM ANY AND ALL OTHER WARRANTIES, REPRESENTATIONS OR GUARANTEES OF ANY KIND WHATSOEVER, EITHER EXPRESS OR IMPLIED, REGARDING THE PRODUCT OR ANY OTHER MATERIALS OR SERVICES TO BE SUPPLIED UNDER THIS AGREEMENT, INCLUDING, BUT NOT LIMITED TO ANY EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. CONFIDENTIAL Page 32 of 49 + +Source: PARATEK PHARMACEUTICALS, INC., 10-K/A, 5/5/2017 + + + + + +THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. 13.4 No Consequential Damages and Limitation of Liability + +a) [* * *], IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY SPECIAL, CONSEQUENTIAL, PUNITIVE, INCIDENTAL OR INDIRECT DAMAGES, OR LOST PROFITS, HOWEVER CAUSED, ON ANY THEORY OF LIABILITY. THIS LIMITATION WILL APPLY EVEN IF THE OTHER PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE. + +b) EXCEPT AS SET FORTH BELOW IN THIS SECTION 13.4(b), IN NO EVENT WILL SUPPLIER'S LIABILITY, [* * *], BE GREATER THAN, PER CLAIM OR SERIES OF CLAIMS ARISING FROM THE SAME CAUSE OF ACTION, [* * *]. + +EXCEPT AS SET FORTH BELOW IN THIS SECTION 13.4(b), [* * *], AS APPLICABLE, IN NO EVENT SHALL A PARTY'S LIABILITY, HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY, BE GREATER THAN, PER CLAIM OR SERIES OF CLAIMS ARISING FROM THE SAME CAUSE OF ACTION, [* * *]. + +EXCEPT AS SET FORTH BELOW IN THIS SECTION 13.4(b), WITH RESPECT [* * *], IN NO EVENT SHALL A PARTY'S LIABILITY BE GREATER THAN, PER CLAIM OR SERIES OF CLAIMS ARISING FROM THE SAME CAUSE OF ACTION, [* * *]. + +NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS SECTION 13.4(b), WITH RESPECT TO [* * *] IN NO EVENT SHALL SUPPLIER'S LIABILITY, HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY, BE GREATER THAN, PER CLAIM OR SERIES OF CLAIMS ARISING FROM THE SAME CAUSE OF ACTION, [* * *]. + +[* * *] + +Article 14 Indemnification + +14.1 Indemnification of Supplier + +Customer shall indemnify, defend and hold harmless Supplier and its officers, directors, agents, servants and employees against any and all actions, claims, demands, proceedings, suits, losses, damages, costs and expenses (including reasonable legal fees) of Third Parties (in this Article 14, "Claims") (including Claims for personal injury or death) to the extent such Claims result from or arise out of (a) any product liability claim directly related to Customer's commercial use, sale or distribution of Products or (b) Customer's [* * *] acts or omissions or [* * *], except, in each case of clause (a) and (b), to the extent Supplier has an obligation to indemnify Customer pursuant to Section 14.2 or 14.3. + +14.2 Indemnification of Customer + +Supplier shall indemnify, defend and hold harmless Customer and its Affiliates and Customer Licensees, and their respective officers, directors, agents, servants, employees and consultants against any and all Claims (including Claims for personal injury or death) to the extent such Claims result from or arise out of (a) any [* * *] acts or omissions or [* * *] by Supplier or its officers, directors, agents, servants, CONFIDENTIAL Page 33 of 49 + +Source: PARATEK PHARMACEUTICALS, INC., 10-K/A, 5/5/2017 + + + + + +THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. employees or contractors (collectively, the "Supplier Representatives") [* * *] or (b) any [* * *] or omissions or [* * *] by Supplier or the Supplier Representatives, except, in each case of clause (a) and (b), to the extent Customer has an obligation to indemnify Supplier pursuant to Sections 14.1 or 14.3. + +14.3 Intellectual Property Indemnity + +Customer (an "Indemnifier") shall indemnify, defend and hold harmless Supplier and the Supplier Representatives (each, an "Indemnified Party") from any and all Claims of any Third Party that any Intellectual Property (including, without limitation, Customer Materials, Product Information, Product Specifications, Customer Technology or Tufts Technology), provided by Customer to Supplier hereunder, infringes a Third Party's Intellectual Property Rights or otherwise violates a Third Party's rights. Supplier (an "Indemnifier") indemnifies Customer and its Affiliates and Customer Licensees, and their respective officers, directors, agents, servants, employees and consultants (each, an "Indemnified Party") from any and all Claims of any Third Party that the Intellectual Property (other than the Intellectual Property Customer has provided to Supplier under this Agreement) that Supplier elects to use in conducting the activities set out in this Agreement, infringes such Third Party's Intellectual Property Rights or otherwise violates a Third Party's rights. + +The Indemnifier's obligation to indemnify the Indemnified Party shall apply only upon the following terms and conditions: + +a) the obligation shall only pertain to the Intellectual Property the Indemnifier, its Affiliates, officers, directors, agents, servants, employees or consultants elect to use in conducting the activities set out in this Agreement, and not to any Improvements or additions made by anyone other than the Indemnifier, whether with or without permission; and + +b) [* * *] + +14.4 Indemnification Procedure + +The indemnities contained in this Article 14 shall be conditional on compliance with the terms and conditions set out in this Section 14.4. The indemnifying Party shall have the option to defend, contest, or otherwise protect against any such Claims at its own cost and expense provided that the party seeking indemnification (the "Indemnitee") regarding any such Claims gives written notice to the indemnifying Party promptly after receiving notice of said Claims. If the indemnifying Party chooses to defend Claims, the Indemnitee may, but will not be obligated to, participate at its own expense in a defense thereof by counsel of its own choosing, but the indemnifying Party shall be entitled to control the defense unless the Indemnitee has relieved the indemnifying Party from liability with respect to the particular matter. If the indemnifying Party fails to timely defend, contest, or otherwise protect against any such Claims, the Indemnitee may defend, contest, or otherwise protect against the same, and make any reasonable compromise or settlement thereof and recover the entire costs thereof from the indemnifying Party, including reasonable legal fees and costs and disbursements, and all amounts paid as a result of such CONFIDENTIAL Page 34 of 49 + +Source: PARATEK PHARMACEUTICALS, INC., 10-K/A, 5/5/2017 + + + + + +THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. Claims or the compromise or settlement thereof; provided, however, that if the indemnifying Party undertakes the timely defense of such matter, the Indemnitee shall not be entitled to recover from the indemnifying Party for its costs incurred in the defense thereof. The Indemnitee shall cooperate and provide such assistance as the indemnifying Party may reasonably request in connection with the defense of the matter subject to indemnification. + +Article 15 Insurance + +15.1 Insurance Coverage + +Customer and Supplier each represent that they are sufficiently insured against any liability arising under this Agreement. Further, Supplier shall at a minimum retain [* * *]. + +15.2 Evidence of Insurance + +Each of Customer and Supplier shall, upon request by the other, provide the other Party with a copy of all insurance policies maintained under this Article 15 relating to the Manufacture of the Product in bulk quantities and the facilities therefor and shall notify the other Party in writing at least 30 days prior to the cancellation of or any material change to such insurance policies. Each Party may request that the other Party procure and maintain such additional insurance coverage relating to the Manufacture of the Product and the facilities therefore as may be reasonably necessary in respect of the Parties' respective obligations under this Agreement. + +Article 16 Legal and Regulatory + +16.1 Compliance with Laws + +a) Each Party shall, in connection with its obligations, rights and duties under this Agreement and in Manufacturing, handling, storage, loading, shipping, using, commercializing, reselling and distributing the Product: + +(i) comply with all Applicable Law or other requirements applicable to such Party's business; and + +(ii) subject to Subsection b) below, obtain and maintain in full force and effect all applicable licenses, permits, certificates, authorizations or approvals from local governmental authorities necessary to conduct its business and the activities contemplated under this Agreement. Such licences or certificates are to be provided to the other Party on request. + +b) Customer shall be responsible for obtaining all necessary import and/or export licenses or permits and for the payment of all import and/or export fees, taxes or duties in connection with the purchase and/or delivery of the Product under this Agreement. Supplier shall reasonably cooperate with Customer in connection with obtaining necessary import and/or export licenses or permits. CONFIDENTIAL Page 35 of 49 + +Source: PARATEK PHARMACEUTICALS, INC., 10-K/A, 5/5/2017 + + + + + +THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. 16.2 Maintenance of Records + +Supplier shall maintain adequate books and records and retention samples consistent with cGMP Requirements and any other Applicable Law and requirements of applicable governmental or regulatory authorities, in respect of test records, samples and associated support data for all batches of Product Manufactured by Supplier sufficient to substantiate and verify Supplier's duties and obligations under this Agreement for [* * *] from the expiration date of the respective Product batch. + +16.3 Notice of Reports + +Supplier shall provide to Customer within [* * *] of receipt by Supplier copies of all Product-specific portions of any reports of any governmental or regulatory authority including, without limitation, any Facility-specific reports solely to the extent applicable to the Product or Manufacturing Process, FDA Form 483 observations, FDA warning letters or other correspondence from the FDA or equivalent correspondence from another Applicable Regulatory Authority; provided that Supplier may redact any information from such reports subject to confidentiality obligations and not related to the Product. + +16.4 Drug Master Files + +Supplier will routinely update and keep current all information pertinent to maintain the Drug Master Files relating to the Manufacture of the Product at the production site of Supplier. Supplier will fully support and reasonably assist Customer with its filing of any application with respect to the Product with any Applicable Regulatory Authority at Customer's expense. + +16.5 Compliance with Regulatory Standards + +Supplier shall be responsible for Manufacturing the Product in compliance with Applicable Law, cGMP Requirements and the standards of any other applicable governmental or regulatory authority. Each Party will provide reasonable assistance to the other, at no charge, if necessary to respond to audits, inspections, inquiries, or requests of any Applicable Regulatory Authority. Supplier shall advise Customer immediately if Supplier receives notice of an impending inspection related to a Product or if an authorized agent of any Applicable Regulatory Authority or other governmental agency provides advance notice of any investigation, inspection or visit to a Facility. In such event, Supplier shall permit, to the extent permitted by Applicable Law, Customer or its representatives to be present during such visit, at Customer's expense. Upon Customer's request, Supplier shall provide Customer with a copy of any report issued by such Regulatory Authority following such visit. + +16.6 Inspection + +Supplier shall allow monitoring of the Facilities as set forth in Section 3.6 and inspections or audits as provided for in the Quality Agreement. Supplier shall make available to Customer all relevant records and reports and Customer shall have the right to copy all Product related records and reports. The frequency of such audits as well as the response time with respect to audit findings shall be governed by the Quality Agreement. CONFIDENTIAL Page 36 of 49 + +Source: PARATEK PHARMACEUTICALS, INC., 10-K/A, 5/5/2017 + + + + + +THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. Article 17 Recalls + +17.1 Safety + +Supplier shall provide Customer with reasonable co-operation to help Customer investigate adverse events or product complaints involving or related to the Product. The cost and expense of any testing undertaken by Supplier at Customer's request shall be borne by [* * *]. + +17.2 Recalls + +If either Party has grounds to recommend a Recall or otherwise receives a notification or information which might result in a Recall, the Party recommending such Recall or receiving such notification or information shall immediately notify the other Party in writing. Subject to Applicable Law, Customer and its designees shall have the sole responsibility to implement any Recall of the Product or any intermediate or finished product containing the Product and the sole right to make all final decisions regarding any such Recall. Supplier shall reasonably cooperate with Customer and its designees in implementing any such Recall, at Customer's expense. + +17.3 Supplier's Liability for Recall + +In the event of a Recall or Seizure arising from [* * *], Supplier shall be liable for the expenses and out-of-pocket costs actually incurred by Customer as a result of such Recall or Seizure, and Supplier shall, at the option of Customer: + +[* * *]. + +Such liability shall not limit or otherwise be exclusive of any other provisions of this Agreement. + +17.4 Customer's Liability for Recall + +In the event of a Recall or Seizure arising from [* * *] Customer shall [* * *]. + +Such liability shall not be exclusive of any other provisions of this Agreement. + +17.5 Replacement Shipments + +In the event of any Recall or Seizure with respect to the Product during the Term of this agreement, Supplier shall, upon the written request of Customer, as soon as reasonably possible, supply replacement Product to Customer in an amount sufficient to replace the amount of Product Recalled or Seized, at the applicable then current Fees for Product under this Agreement. If Customer makes such written request, Customer shall issue a Purchase Order in this regard which Supplier is obliged to accept. Supplier agrees to use commercially reasonable efforts to supply such replacement Product pursuant to the new Purchase Order as soon as possible. CONFIDENTIAL Page 37 of 49 + +Source: PARATEK PHARMACEUTICALS, INC., 10-K/A, 5/5/2017 + + + + + +THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. Article 18 Termination + +18.1 Termination + +This Agreement is effective as of the Effective Date and will expire in accordance with Section 2.1, unless, upon the occurrence of any of the following events, this Agreement is earlier terminated in accordance with this Section 18.1: + +a) Customer delivers written notice of termination to Supplier at least [* * *] prior to the expiration date of the Initial Term, which termination shall be effective as of the expiration date of the Initial Term; + +b) either Party delivers written notice of termination to the other Party at least [* * *] prior to the expiration date of the Renewal Term, which termination shall be effective as of the expiration date of the Renewal Term; + +c) a Party makes a general assignment for the benefit of creditors, a court of competent jurisdiction declares a Party insolvent or bankrupt, or a petition in bankruptcy or under any insolvency law is filed by or against a Party and such petition is not dismissed within [* * *] after it has been filed, and the other Party delivers written notice of termination to such Party, which termination shall be effective immediately upon delivery of such written notice; + +d) a Party breaches a material provision of this Agreement, and the other Party delivers written notice of termination to such breaching Party: + +(i) if the breach is not cured within [* * *] after written notice thereof to the Party in default; or + +(ii) if the breach is of a type that cannot be cured within [* * *], if a cure is not promptly commenced and diligently pursued until complete remediation but in any case after [* * *] unless otherwise agreed in writing between the Parties; + +e) any governmental law, regulation or order is adopted and made effective which would make performance of a Party's obligations under this Agreement impossible or commercially impracticable, and such Party delivers written notice of termination to the other Party, which termination shall be effective immediately upon delivery of such written notice; or + +f) a Party has the right to terminate under Section 14.3, which termination shall be effective [* * *] after delivery of written notice to the non- terminating Party. CONFIDENTIAL Page 38 of 49 + +Source: PARATEK PHARMACEUTICALS, INC., 10-K/A, 5/5/2017 + + + + + +THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. 18.2 Consequences of Termination + +On expiration or the effective date of termination of this Agreement, if earlier: + +a) both Parties shall be released from all obligations and duties imposed or assumed hereunder, except obligations and liabilities previously accrued and as expressly provided by this Agreement, including, without limitation, those provisions which expressly survive termination or expiration of this Agreement; + +b) all Rights granted by Customer to Supplier under Section 11.3 shall immediately revert to Customer, provided that Supplier may continue to use any such Rights in order to fulfil its surviving obligations under Section 18.5, and only for such purpose; + +c) Supplier shall provide to Customer, to the extent they exist, copies of: + +(i) Supplier's Manufacturing batch records and analytical reports relating to the Product; and + +(ii) any other documents required to be delivered pursuant to this Agreement or otherwise reasonably requested by Customer; + +d) Unless this Agreement is terminated by Customer pursuant to Section 18.1(d) above, all Purchase Orders and Scopes of Work shall automatically be deemed terminated by Customer and Supplier shall be compensated for final Product already produced or Services already rendered in accordance with this Agreement and, for Products or Services not yet produced or rendered, as the case may be, Supplier shall be entitled to its fees, expenses and costs as set forth in Sections 6.4 and 6.6. Additionally, Customer shall be entitled to request that (i) all Products and/or works in process for which Customer has compensated Supplier and (ii) all Customer Materials be shipped to Customer in accordance with the provisions of Section 7.2(d). If this Agreement is terminated by Customer pursuant to Section 18.1(d) as a result of Supplier's breach, then, Customer shall be able to elect whether Purchase Orders or Scopes of Work not yet completed at the date of termination or expiration should continue in force, subject to the terms and conditions herein; and + +e) Supplier shall promptly cooperate with Customer to transfer and transition supply of the Products to a Third Party supplier. Upon Customer's request, Supplier shall cooperate with Customer in the transfer of technology and know-how necessary to Manufacture Products to such Third Party supplier, including providing Customer and the Third Party supplier with reasonable access to the Facilities and consulting services related to Manufacturing of the Product. Supplier shall conduct such activities at Customer's expense paid in advance. CONFIDENTIAL Page 39 of 49 + +Source: PARATEK PHARMACEUTICALS, INC., 10-K/A, 5/5/2017 + + + + + +THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. 18.3 Return of Samples + +On expiration or earlier termination of this Agreement, unless otherwise instructed by Customer, Supplier shall, within [* * *], return to Customer all samples or other supplies of the Product (for which Supplier has been paid) in its possession or control in any form, with the exception of any samples such as retention samples that Supplier may be required to keep according to Applicable Law. The cost of returning any such supplies shall: [* * *] + +18.4 Return of Confidential Information + +On expiration or earlier termination of this Agreement, unless otherwise agreed between the Parties, each Party shall: + +a) promptly cease all use of the Confidential Information of the other Party and ensure that its corporate counsel, employees and contractors cease all use thereof; and + +b) upon written request of the other Party, + +(i) return to the other Party all original copies of the Confidential Information of the other Party in its control or possession, subject to the retention of one (1) complete copy for archival purposes and to satisfy any applicable legal requirements; and + +(ii) except for back-up copies generated by the recipient Party's IT system, destroy any and all copies or other reproductions or extracts of the Confidential Information of the other Party and all other documents, computer files, memoranda, notes or other writings prepared based on such Confidential Information subject to clause (i) above. + +18.5 Survival + +Except as otherwise provided herein or agreed in writing between the Parties, expiration or early termination of this Agreement shall not relieve either Party of its obligations incurred prior to such expiration or early termination, including the obligation to Manufacture and deliver the Product under Purchase Orders placed by Customer and accepted by Supplier prior to the effective date of expiration or earlier termination, and the obligation to pay Fees in respect thereof. In addition, the following provisions shall survive any expiration or early termination of this Agreement in accordance with the terms of such provision; provided that if there is no express expiration or termination of an obligation or a right under a surviving provision, such provision or right shall continue to survive, subject to Applicable Law[* * *]: + +Article 1 (Interpretation); Section 2.2 (Effect of Expiration on Purchase Orders); Section 5.3 (Retention Samples); Article 9 (Fees) (solely with respect to amounts owed or paid following termination); Article 11 (Intellectual Property) (other than Section 11.3 (Grant of License by Customer)); Article 12 (Confidentiality & Publicity); Section 13.3 (No other Warranty); Section 13.4 (No Consequential Damages and Limitation of Liability); Article 14 (Indemnification); Article 15 (Insurance); Section 16.2 (Maintenance of Records); Section 16.4 (Drug Master Files); Section 16.6 (Inspection); Sections 17.2 CONFIDENTIAL Page 40 of 49 + +Source: PARATEK PHARMACEUTICALS, INC., 10-K/A, 5/5/2017 + + + + + +THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. (Recalls), 17.3 (Supplier's Liability for Recall) and 17.4 (Customer's Liability for Recall); Sections 18.2 (Consequences of Termination), 18.3 (Return of Samples) and 18.4 (Return of Confidential Information); this Section 18.5 (Survival); and Article 19 (Miscellaneous) (except 19.2 and 19.5). + +Further, Article 8 (Acceptance of Shipments) shall survive any expiration or termination of this Agreement solely with respect to shipments of Product shipped prior to the effective date of expiration or termination. + +Article 19 Miscellaneous + +19.1 Assignment; Inurement + +This Agreement shall be binding upon and shall inure to the benefit of the Parties hereto and their successors and permitted assigns. Supplier shall not assign this Agreement, in whole or in part, to any person without the prior written consent of Customer, except to a Third Party which acquires all, or substantially all, of Supplier's business or assets, whether through merger or otherwise. + +Customer shall be entitled to assign this Agreement, in whole or in part, to any person without the consent of Supplier, provided that (i) such person acquires all, or substantially all, of Customer's business or assets with respect to the Product, whether through merger or otherwise; (ii) such person is an Affiliate of Customer or a Customer Licensee; or (iii) Customer remains liable for any payments Supplier is or will be entitled to under this Agreement. Customer shall not assign this Agreement, in whole or in part, to any other person without the prior written consent of Supplier, not to be unreasonably withheld, conditioned or delayed. + +19.2 Change of Control + +During the Term, Supplier will promptly notify Customer in writing if at any time a Change of Control shall occur as to Supplier, such notification to be given no later than fifteen (15) days following such Change of Control. [* * *] + +19.3 Counterparts + +This Agreement may be executed in any number of counterparts each of which shall be deemed to be an original and all of which taken together shall be deemed to constitute one and the same instrument. + +19.4 Dispute Resolution + +Any controversy or claim arising out of or relating to this Agreement, or the breach thereof, shall be referred first to senior management of the Parties for amicable resolution. In the event that amicable resolution has not been achieved within [* * *], then either Party may seek resolution through CONFIDENTIAL Page 41 of 49 + +Source: PARATEK PHARMACEUTICALS, INC., 10-K/A, 5/5/2017 + + + + + +THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. confidential arbitration in accordance with the ICC Rules of Arbitration. The arbitration hearing shall be held as soon as practicable following submission to arbitration. The arbitration hearing shall be held in Delaware. The Parties shall request that the arbitration panel render a formal, binding non-appealable resolution and award on each issue as expeditiously as possible. In any arbitration, the prevailing Party shall be entitled to reimbursement of its reasonable attorneys' fees and the Parties shall use all reasonable efforts to keep arbitration costs to a minimum. Judgment upon the award may be entered by any court having jurisdiction thereof or having jurisdiction over the relevant Party or its assets. + +19.5 Force Majeure + +Any delay or inability to perform any of the duties or obligations of either Party caused by an event outside the affected Party's reasonable control shall not be considered a breach of this Agreement, and unless provided to the contrary herein, the time required for performance shall be extended for a period equal to the period of such delay. Such events shall include, without limitation: acts of God; any governmental act or regulation; insurrections; riots or civil disturbance; acts of war; embargoes; labor disputes at facilities of Material suppliers, including strikes, lockouts, job actions, or boycotts; fires; explosions; terrorist attacks; floods; or other unforeseeable causes beyond the reasonable control and without the fault or negligence of the Party so affected. In order to take the benefit of this section, the Party so affected shall give prompt notice [* * *] to the other Party of such cause, and shall take whatever reasonable steps are necessary to relieve the effect of such cause as rapidly as reasonably possible. If performance is affected for a cumulative period of more than [* * *], the non-affected Party may terminate this Agreement immediately by notice in writing to the affected Party. + +19.6 Performance + +Each Party agrees to perform its obligations under this Agreement, including under any Scope of Work, in a timely manner. Supplier shall allocate adequate resources to execute its obligations under this Agreement, including under each Scope of Work. Supplier represents and warrants that all Services shall be performed by qualified personnel in accordance with the highest industry standards. + +19.7 Further Assurances + +The Parties shall both execute and deliver such further instruments and do such further acts as may be required to implement the intent of this Agreement. + +19.8 Independent Contractors + +Supplier and Customer shall be independent contractors and shall not be deemed to be partners, joint venturers or each other's agents under this Agreement, and neither Party shall have the right to act on behalf of the other except as is expressly set forth in this Agreement. CONFIDENTIAL Page 42 of 49 + +Source: PARATEK PHARMACEUTICALS, INC., 10-K/A, 5/5/2017 + + + + + +THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. 19.9 Injunctions + +Each Party agrees that the other Party may be irreparably damaged if any provision of this Agreement is not performed in accordance with its terms. Accordingly, notwithstanding Section 19.3, each Party will be entitled to apply for an injunction or injunctions to prevent breaches of any of the provisions of this Agreement by the other Party, without showing or proving any actual or threatened damage, notwithstanding any rule of law or equity to the contrary, and may specifically enforce such provisions by an action instituted in a court having jurisdiction. These specific remedies are in addition to any other remedy to which the Parties may be entitled at law or in equity. + +19.10 Notices + +Unless otherwise provided herein, any notice required or permitted to be given hereunder or any proposal for any modification of this Agreement (hereinafter collectively referred to as the "Correspondence") shall be faxed, mailed by overnight mail, certified mail postage prepaid, or delivered by hand to the Party to whom such Correspondence is required or permitted to be given hereunder at the addresses set out below. If delivered by hand, any such Correspondence shall be deemed to have been given when received by the Party to whom such Correspondence is given and if faxed, any such Correspondence shall be deemed to have been given on the first Business Day following facsimile transmission, as evidenced by written and dated receipt of the receiving Party. + +If to Supplier: CARBOGEN AMCIS AG Hauptstrasse 159-173 CH 4416 Bubendorf Switzerland Attention: CEO Telephone: + 41 61 935 5353 Facsimile: + 41 61 935 5300 + +If to Customer: Paratek Pharmaceuticals, Inc. 75 Park Plaza, 4t h Floor Boston, MA 02116 USA Attention: General Counsel Phone: +1 617 807 6600 Facsimile: +1 617 275 0039 CONFIDENTIAL Page 43 of 49 + +Source: PARATEK PHARMACEUTICALS, INC., 10-K/A, 5/5/2017 + + + + + +THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. Either Party may change the address to which any Correspondence to it is to be addressed by notification to the other Party as provided herein. + +19.11 Entire Agreement + +This Agreement, the Quality Agreement and all Exhibits attached hereto (as the same may be amended from time to time by the written agreement of the Parties) constitute the entire agreement between the Parties with respect to the subject matter hereof and supersede all other documents, agreements, verbal consents, arrangements and understandings between the Parties with respect to the subject matter hereof. This Agreement shall not be amended orally, but only by an agreement in writing, signed by both Parties that states that it is an amendment to this Agreement. + +19.12 Severability + +If any term or provision of this Agreement shall for any reason be held invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other term or provision hereof, and this Agreement shall be interpreted and construed as if such term or provision, to the extent the same shall have been held to be invalid, illegal or unenforceable, had never been contained herein. + +19.13 Waiver + +No waiver or modification of any of the terms of this Agreement shall be valid unless in writing and signed by an authorized representative of the Parties hereto. Failure by either Party to enforce any rights under this Agreement shall not be construed as a waiver of such rights, nor shall a waiver by either Party in one or more instances be construed as constituting a continuing waiver or as a waiver in other instances. + +[Signature page follows.] CONFIDENTIAL Page 44 of 49 + +Source: PARATEK PHARMACEUTICALS, INC., 10-K/A, 5/5/2017 + + + + + +THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. IN WITNESS WHEREOF, each of the Parties hereto has caused this Agreement to be executed by its duly authorized officer as of the dates set forth below. CUSTOMER + +by its authorized signatory: + +/s/ William M. Haskel + +Name: William M. Haskel + +Title: Sr. Vice President + +Date: January 9, 2017 + +CARBOGEN AMCIS AG by its authorized signatory: + +/s/ Silke Erbeck + +Name: Silke Erbeck + +Title: Senior Head of Commercial Products + +Date: 10.Jan.2017 + +/s/ Dr. Stephan Fritschi + +Stephan Fritschi + +VP Operations + +CARBOGEN AMCIS AG + +10.Jan.2017 [Signature page to Outsourcing Agreement] + +Source: PARATEK PHARMACEUTICALS, INC., 10-K/A, 5/5/2017 + + + + + +THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. Exhibit A - Description of Product + +[* * *] + +Source: PARATEK PHARMACEUTICALS, INC., 10-K/A, 5/5/2017 + + + + + +THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. Exhibit B - Chemical Synthesis + +[* * *] + +Source: PARATEK PHARMACEUTICALS, INC., 10-K/A, 5/5/2017 + + + + + +THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. Exhibit C - Fee Schedule + +[* * *] + +Source: PARATEK PHARMACEUTICALS, INC., 10-K/A, 5/5/2017 + + + + + +THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. WHERE TWO PAGES OF MATERIAL HAVE BEEN OMITTED, THE REDACTED MATERIAL IS MARKED WITH [†]. Exhibit D - Certificate of Analysis and Certificate of Compliance + +[†] + +Source: PARATEK PHARMACEUTICALS, INC., 10-K/A, 5/5/2017 \ No newline at end of file diff --git a/full_contract_txt/PareteumCorp_20081001_8-K_EX-99.1_2654808_EX-99.1_Hosting Agreement.txt b/full_contract_txt/PareteumCorp_20081001_8-K_EX-99.1_2654808_EX-99.1_Hosting Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..c6776494013e6eb80ac54bf5a5a165c41541ac06 --- /dev/null +++ b/full_contract_txt/PareteumCorp_20081001_8-K_EX-99.1_2654808_EX-99.1_Hosting Agreement.txt @@ -0,0 +1,573 @@ +Exhibit 99.1 CONFIDENTIAL TREATMENT REQUESTED WITH RESPECT TO CERTAIN PORTIONS HEREOF DENOTED WITH "***" + +MOBILE VIRTUAL NETWORK ENABLER HOSTING AGREEMENT + +BETWEEN + +T-MOBILE NETHERLANDS B.V. + +& + +Elephant Talk Communication Holding AG + +Source: PARETEUM CORP, 8-K, 10/1/2008 + + + + + +CONFIDENTIAL TREATMENT REQUESTED WITH RESPECT TO CERTAIN PORTIONS HEREOF DENOTED WITH "***" Hosting Agreement between ELEPHANT TALK and T-Mobile, 18/9/2008 + + TABLE OF CONTENT 1. Definitions 2. Purpose and Scope of the Agreement 3. Hosting Services 4. Implementation 5. Forecast & Commitments 6. Service level 7. Data Protection & Privacy 8. The co-operation relationship 9. Prices, Charging, Billing & Accounting 10. Customer Care Support 11. Confidentiality 12. Limitation of Liability 13. Suspension and termination of Hosting Services 14. Force Majeure 15. Intellectual Property Rights 16. SIM cards and Calling Credit 17. Duration of the Agreement 18. Termination of the Agreement 19. Modifications 20. Miscellaneous 21. Governing Law 22. Dispute resolution 23. Counterpart + +Source: PARETEUM CORP, 8-K, 10/1/2008 + + + + + +CONFIDENTIAL TREATMENT REQUESTED WITH RESPECT TO CERTAIN PORTIONS HEREOF DENOTED WITH "***" Hosting Agreement between ELEPHANT TALK and T-Mobile, 18/9/2008 + + MOBILE VIRTUALNETWORK ENABLER HOSTING AGREEMENT by and between ELEPHANT TALK and T-Mobile + +(T-Mobile hosting ELEPHANT TALK) + +This Agreement is made between "Elephant Talk Communication Holding AG", a company incorporated under the laws of Switzerland, having its registered office at Baarerstrasse 135, CH-6301 Zug, Switzerland, legally and duly represented by its Chief Executive Officer Steven van der Velden and its Chief Operations Officer and Chief Technology Officer Martin Zuurbier, hereinafter referred to as: "ELEPHANT TALK" + +and + +T-Mobile Netherlands B.V., a company incorporated under the laws of the Netherlands, having its registered office at the Waldorpstraat 60, 2521 CC Den Haag, the Netherlands, legally and duly represented by its Managing Director Niek Jan van Damme and its Marketing Director, Bart Weijermars, hereinafter referred to as: "T-Mobile" + +each individually referred to as "Party" and together as "Parties". WHEREAS: + +1. ELEPHANT TALK wishes to become a full Mobile Virtual Network Enabler (hereinafter: "MVNE") providing mobile telecommunications services to legal entities partnering with ELEPHANT TALK to offer mobile services in an (Enhanced) Service Provider model using the T- Mobile network and the by T-Mobile provided wholesale mobile network services; 2. T-Mobile is a licensed Dutch mobile telecommunications and services provider operating inter alia its own GSM and UMTS/HSDPA mobile network in The Netherlands with related basic services and offering wholesale and retail mobile network services and associated services on the Dutch market; 3. *** and ELEPHANT TALK have conducted preliminary discussions and negotiations leading to an initial understanding on the basic business principles of an envisaged co-operation between *** and ELEPHANT TALK, which has been laid down in Heads of Agreement between *** and ELEPHANT TALK ***; 4. ***; 5. In answer to the proposal of *** and the additions to this proposal by T-Mobile, ELEPHANT TALK has confirmed by letter dated November 30, 2007 that it agrees to be directly implemented on the T-Mobile network in order to *** the T-Mobile network; 6. ELEPHANT TALK therefore wishes to obtain from T-Mobile wholesale mobile network services and associated services and T-Mobile is willing to offer ELEPHANT TALK such services; 7. Following the signing of the aforementioned Heads of Agreement between *** and ELEPHANT TALK, Parties have continued their discussions and negotiations with regard to their envisaged co-operation and have reached agreement on the terms and conditions in that respect, which are laid down in this Agreement; NOW, THEREFORE, the Parties have agreed as follows: + +Source: PARETEUM CORP, 8-K, 10/1/2008 + + + + + +CONFIDENTIAL TREATMENT REQUESTED WITH RESPECT TO CERTAIN PORTIONS HEREOF DENOTED WITH "***" Hosting Agreement between ELEPHANT TALK and T-Mobile, 18/9/2008 + + 1. DEFINITIONS For the purpose of this Agreement, the following words and phrases shall have the meanings set forth in their respective definitions, unless a different meaning is called for in the context of another provision in this Agreement: + +1.1 "Affiliated Company" of a Party shall mean any other legal entity: · directly or indirectly owning or controlling the Party (Mother company), or · under the direct or indirect ownership or control of the same legal entity (Mother company) directly or indirectly owning or controlling the Party, or · directly or indirectly owned or controlled by the Party, for as long as such ownership or control lasts. "Ownership" or "control" shall exist through the direct or indirect ownership of more than fifty (50) percent of the nominal value of the issued equity share capital or of more than fifty (50) percent of the shares entitling the holders to vote for the election of directors or persons performing similar functions. + +1.2 "Agreement" shall mean the Mobile Virtual Network Enabler(MVNE) hosting agreement together with the Appendices attached to this MVNE hosting agreement. 1.3 "Appendix" and "Appendices" shall mean the appendix or appendices attached to this Agreement. + +1.4 "Business Day" shall mean any day other than Saturdays, Sundays and Dutch generally recognized public holidays. + +1.5 "Calendar Day" shall mean any day including Saturdays, Sundays and Dutch generally recognized public holidays. + +1.6 "CDR" shall mean call detail record. + +1.7 "Commercial Launch Date" shall mean the date on which ELEPHANT TALK commercially launches the Hosting Services and starts providing the ELEPHANT TALK Services commercially to ELEPHANT TALK Customers in the Dutch market (not being the Soft Launch). The Commercial Launch Date shall not be later than six (6) weeks after the Ready for Service Date. + +1.8 "Date of the Agreement" shall mean the date on which both Parties have signed the Agreement by their duly authorized representatives or, if the Parties sign this Agreement on different dates, the later date being the date the Agreement comes fully into effect. + +1.9 "ELEPHANT TALK Customer" shall mean any company or legal entity partnering with ELEPHANT TALK, which wishes to offer mobile services in a MVNO/ESP/SP model using the T-Mobile Network and the by T-Mobile provided Hosting Services under the terms and conditions as mentioned in this Agreement. ELEPHANT TALK Customers might include the mobile end-users of ELEPHANT TALK Customers, subject to the interpretation of the specific provision. + +Source: PARETEUM CORP, 8-K, 10/1/2008 + + + + + +CONFIDENTIAL TREATMENT REQUESTED WITH RESPECT TO CERTAIN PORTIONS HEREOF DENOTED WITH "***" Hosting Agreement between ELEPHANT TALK and T-Mobile, 18/9/2008 + + 1.10 "ELEPHANT TALK Infrastructure" shall mean the entire (current and future) servers and systems of ELEPHANT TALK, including the physical or logical link to the NAP, as described in Appendix 11. + +1.11 "ELEPHANT TALK Wholesale Services" shall mean the mobile telecommunication services provided by ELEPHANT TALK to the ELEPHANT TALK Customers, offering services in a MVNO/ESP/SP model, based on the Hosting Services via the T-Mobile Network and the networks of the T-Mobile roaming partners. + +1.12 "GSM Association Permanent Reference Documents" shall mean the documents that are established, recognized and classified as binding by the GSM Association Plenary. + +1.13 "GSM Association Plenary" shall mean the group of appointed representatives of the Signatories of the GSM Association. + +1.14 "GSM Specifications" shall mean ETSI GSM technical specifications, as defined by the GSM Association. + +1.15 "Hosting Service(s)" shall mean the network hosting (and related) services - as listed in Appendix 1 - provided by T-Mobile to ELEPHANT TALK under the Agreement, enabling ELEPHANT TALK to provide ELEPHANT TALK Wholesale Services to ELEPHANT TALK Customers in accordance with its terms and conditions of the Agreement. + +1.16 "Implementation Plan" shall have the meaning as described to it in Appendix 3. + +1.17 "IMSI" means the International Mobile Subscriber Identity, *** + +1.18 "Initial Term" means the initial duration of the Agreement as agreed upon between the Parties and defined in article 17.1 + +1.19 "IN platform" (the intelligent network platform) shall mean the technical architecture and telecommunications systems of ELEPHANT TALK for routing calls and charging real-time the outgoing calls of ELEPHANT TALK Customers. 1.20 "Location Areas" (LAs) shall mean the individual geographic areas into which the T-Mobile Network is divided at any time. + +1.21 "MSISDN" shall mean Mobile Station Integrated Services Digital Network Number. + +1.22 "NAP" shall mean Network Access Point, as described in Appendix 11. + +Source: PARETEUM CORP, 8-K, 10/1/2008 + + + + + +CONFIDENTIAL TREATMENT REQUESTED WITH RESPECT TO CERTAIN PORTIONS HEREOF DENOTED WITH "***" Hosting Agreement between ELEPHANT TALK and T-Mobile, 18/9/2008 + + 1.23 "Operational Manual" shall mean the working document in which Parties agree upon (dynamic) activities and procedures as described in the Agreement in more detail for the duration of the Agreement. The Operational Manual is a dynamic document. The latest valid and binding version shall be the one agreed in writing between the Parties in accordance with article 19.3. + +1.24 "***" means the company formerly known as ***. formed under the laws of the Netherlands, *** in The Hague, The Netherlands. + +1.25 "Protocol of Delivery" (also referred to as "PoD") shall mean the document, as attached in Appendix 10, provided by T-Mobile to ELEPHANT TALK following the Soft Launch for the purpose of accepting the Hosting Services by ELEPHANT TALK. + +1.26 "Quarter" and "Quarterly" shall mean a quarter of a year, being three consecutive months starting every January, April, July and/or October of every calendar year. + +1.27 "Ready for Service Date" shall mean the date, following the Soft Launch, upon which the Hosting Services agreed between the Parties - in accordance with article 3 - meet the agreed specification as evidenced by the signing of the Protocol for Delivery. + +1.28 "Ready for Test Date" shall mean the date on which the end-to-end test, to be performed internally by T-Mobile solely, has been completed by T-Mobile and pursuant to which ELEPHANT TALK can commence the Soft Launch. + +1.29 "Regulatory Provisions" shall mean all applicable laws, directives, consents, specifications, regulations and/or stipulations set forth by the relevant regulatory authority. + +1.30 "SIM card" shall mean a subscriber identity module (chip) card for the identification of -the mobile end-users of - an ELEPHANT TALK Customer on the T-Mobile Network and enables access to the ELEPHANT TALK Wholesale Services. + +1.31 "SLA" means the Service Level Agreement attached hereto in Appendix 6. + +1.32 "Soft Launch" shall mean the test to be performed under article 4 and as described in Appendix 3 and the period in which ELEPHANT TALK can gain experience with the functionalities of the Hosting Services prior to the Commercial Launch Date. + +Source: PARETEUM CORP, 8-K, 10/1/2008 + + + + + +CONFIDENTIAL TREATMENT REQUESTED WITH RESPECT TO CERTAIN PORTIONS HEREOF DENOTED WITH "***" Hosting Agreement between ELEPHANT TALK and T-Mobile, 18/9/2008 + +Source: PARETEUM CORP, 8-K, 10/1/2008 + + + + + + 1.33 "TAP" shall mean Transferred Account Procedure as defined and described in GSM Association Permanent Reference Documents. + +1.34 "Technical Specification" shall mean the working document in which Parties agree upon the technical specification of the Hosting Services as attached in Appendix 11. 1.35 "T-Mobile Network" shall mean the T-Mobile DCS 1800 and UMTS/HSDPA mobile telecommunications network, including all network elements, in the Netherlands, as described in Appendix 1. 2. PURPOSE AND SCOPE OF THE AGREEMENT + +2.1 The purpose of this Agreement is to lay down the general terms and conditions between the Parties under which T-Mobile shall provide the Hosting Services and ELEPHANT TALK shall purchase the Hosting Services from T-Mobile, whereby T-Mobile shall enable ELEPHANT TALK to market, sell and provide mobile telecommunication services to the ELEPHANT TALK Customers via the T-Mobile Network. For the avoidance of doubt, ELEPHANT TALK is not entitled to provide (retail) telecommunication services based on the Hosting Service to others than ELEPHANT TALK Customers, such as but not limited to mobile end-users or business companies with their own end-users. + +In the event that *** Parties shall negotiate the terms and conditions under which T-Mobile shall provide and ELEPHANT TALK shall purchase the services from T-Mobile. These terms and conditions shall be laid down in a separate document and shall therefore not be part of this Agreement. + +2.2 T-Mobile is entitled without limitations, to *** related services to any other party. + +2.3 ELEPHANT TALK will not enter into any discussions or agreement on the provisioning of (similar) Hosting Services as defined in Appendix 1 with any *** in the Netherlands for the duration of the Initial Term of the Agreement. In case ELEPHANT TALK has provided to T-Mobile the twelve month termination notice in accordance with article 17.2, ELEPHANT TALK ***. + +2.4 The co-operation between Parties shall regard ***. The Hosting Services are intended for ***. ELEPHANT TALK is allowed to provide SIM cards to ELEPHANT TALK Customers under the terms and conditions as mentioned in this Agreement. 2.5 For the scope of this Agreement, ELEPHANT TALK (including its Affiliated Companies) shall not provide the Hosting Services to ***. Excluded from this provision is the situation wherein ELEPHANT TALK provides *** under the terms and conditions as set out in this article. + +Source: PARETEUM CORP, 8-K, 10/1/2008 + + + + + +CONFIDENTIAL TREATMENT REQUESTED WITH RESPECT TO CERTAIN PORTIONS HEREOF DENOTED WITH "***" Hosting Agreement between ELEPHANT TALK and T-Mobile, 18/9/2008 + + ELEPHANT TALK is not allowed, without the explicit written approval of T-Mobile, to provide the ELEPHANT TALK Wholesale Services: I. to the below stated categories of companies, including companies that represent a company in one of these categories, affiliated companies and/or companies that can offer a brand from a company in one of the following categories: a) *** b) *** c) ***. + + II. in the situation where T-Mobile for good reason refuses a ELEPHANT TALK Customer access to the T-Mobile Network such as: a) association with - proven- bad taste (companies or brands with a direct reference to subjects such as criminal or illegal behavior, violence or drugs); b) possible harm of the good name of T-Mobile; c) breach of an intellectual property right of T-Mobile; and/or d) conflict with key strategic issues for T-Mobile and Deutsche Telekom Affiliate Companies (such as legal issues and court cases). The ELEPHANT TALK Customers will not directly or indirectly provide the ELEPHANT TALK Wholesale Services to others, including an Affiliated Company, with the objective to resell wholesale telecommunication services based on the by T-Mobile provided Hosting Services to mobile telecommunication users. + +2.6 Parties agree to implement an ELEPHANT TALK ***, and therefore would not result in additional costs for ELEPHANT TALK. In order to execute this assessment Parties will discuss the detailed business requirements - provided by ELEPHANT TALK for the implementation of the ELEPHANT TALK *** - and will do the utmost to agree on this set of business requirements before or on *** Provided that Parties have agreed upon the final set of business requirements before or on ***, Parties shall subsequently execute an initial evaluation - based on the business requirements - of the impact of the implementation on the T-Mobile infrastructure and network. Parties agree to finalize this initial evaluation on ***. The outcome of the initial evaluation shall consist of an agreed high level project plan for the implementation of at least the implementation of the *** solution. Following the initial evaluation Parties will further discuss and negotiate in good faith the elements of the project plan, including the alignment of *** and available resources in order to implement the ***. Both Parties aim to implement the *** before ***. However, the actual implementation date of the *** solution is subject to the chosen technical and operational solution for the *** solution. In any case T-Mobile is obliged to implement the *** before or on ***. + +2.7 ELEPHANT TALK shall purchase the Hosting Services from T-Mobile as an independent contractor. ELEPHANT TALK shall sell and market the ELEPHANT TALK Wholesale Services to ELEPHANT TALK Customers in its own name, for its own account and on its own risk (subject to the terms of this Agreement). ELEPHANT TALK warrants T-Mobile that ELEPHANT TALK Customers shall sell and market their mobile telecommunication services based on the ELEPHANT TALK Wholesale Services in its own name, for its own account and on its own risk. ELEPHANT TALK and ELEPHANT TALK Customers shall not in any respect represent T-Mobile or enter into any agreement or other commitment on T-Mobile's behalf. + +Source: PARETEUM CORP, 8-K, 10/1/2008 + + + + + +CONFIDENTIAL TREATMENT REQUESTED WITH RESPECT TO CERTAIN PORTIONS HEREOF DENOTED WITH "***" Hosting Agreement between ELEPHANT TALK and T-Mobile, 18/9/2008 + + 2.8 ELEPHANT TALK shall ensure that the ELEPHANT TALK Infrastructure complies with the Technical Specifications, as set out in Appendix 11. + +2.9 Parties acknowledge that the Dutch telecommunications market is regulated under both Dutch and EU law, such as inter alia EU-directives, the Dutch Telecommunications Act, Dutch Competition Act and the Dutch Data Protection Act. Parties shall at all times fully comply with all relevant regulations, such as but not limited to, the obligation for ELEPHANT TALK - as providers of public electronic communications services in the Netherlands- to notify OPTA according to article 2.1 of the Dutch Telecommunication Act. + +Furthermore, Parties acknowledge that their arrangements are subject to said regulations, and that Parties' arrangements (including pricing arrangements) may, from time to time, require adjustment(s) due to change of such regulations. + +2.10 The Hosting Services shall be provided in accordance with relevant GSM Specifications and the GSM Association Permanent Reference Documents, including all the commercial aspects, as defined in the Agreement. This foregoing is however subject to the additional requirements and exceptions to the GSM specifications and GSM Association Permanent Reference Documents as may be agreed in writing between Parties. + +2.11 The Parties recognize that it may be appropriate to modify this Agreement, in circumstances in which they deem it important to do so, in the light of experience and development in the GSM Association, the GSM Specifications, the GSM Association Permanent Reference Documents and mobile telecommunications services available at the market not offered by T-Mobile under this Agreement In such case Parties shall agree upon a workable solution and act accordingly. + +2.12 The Appendices shall form an integral part of the Agreement and shall be fully binding on and enforceable by and against the Parties as applicable in accordance with this Agreement. In case that the Agreement contains contradictory provisions, the documents constituting the Agreement shall have the following priority for the purpose of interpretation: a) the Agreement; b) the Appendices in order of their number; + +Source: PARETEUM CORP, 8-K, 10/1/2008 + + + + + +CONFIDENTIAL TREATMENT REQUESTED WITH RESPECT TO CERTAIN PORTIONS HEREOF DENOTED WITH "***" Hosting Agreement between ELEPHANT TALK and T-Mobile, 18/9/2008 + + + +Source: PARETEUM CORP, 8-K, 10/1/2008 + + + + + +Appendix No. Appendix Name Appendix 1 Service Description Appendix 2 Financials Appendix 3 Implementation plan Appendix 4 Forecasting Appendix 5 Lawful Intercept Appendix 6 Service Level Agreement Appendix 7 Accounting and Billing Appendix 8 Roaming Appendix 9 Bank guarantee Appendix10 Protocol of Delivery Appendix 11 Technical Specification Appendix 12 *** Appendix 13 *** 3. HOSTING SERVICES + +3.1 T-Mobile shall provide the Hosting Services, as described in Appendix 1, during the term of this Agreement from the Ready for Service Date. + +3.2 T-Mobile shall ensure that all *** from ELEPHANT TALK Customers and other telecommunication end users in the Netherlands and in the relevant roaming countries, as further specified in the Agreement. + +3.3 ELEPHANT TALK is responsible and accountable for the installation, maintenance and availability of the leased line between ELEPHANT TALK's POP and the T-Mobile Network, as described in Appendix 1. + +3.4 T-Mobile is open and willing to discuss with ELEPHANT TALK the provision to ELEPHANT TALK of new services, meaning services out of the scope of this Agreement, in the Dutch market. + +3.5 Parties agree that ELEPHANT TALK, if applicable, makes a feature available in the SIM card to display the brand name of ELEPHANT TALK Customers, when ELEPHANT TALK Customers are connected - via the ELEPHANT TALK Infrastructure - to the T-Mobile Network. T-Mobile is aware of the fact that out-dated devices might not support this feature available in the SIM cards. + +3.6 Parties agree to implement the rules and procedures pursuant to Dutch legislation for number portability prior to the Ready for Service Date, according to Appendix 1. A ELEPHANT TALK MSISDN that is out-ported from ELEPHANT TALK's customer base will be barred from accessing the ELEPHANT TALK Services in the T-Mobile Network. + +3.7 Parties shall use their best efforts to ensure *** as set out in Appendix 1. ELEPHANT TALK is responsible and liable for ***, as described in Appendix 11. + +Source: PARETEUM CORP, 8-K, 10/1/2008 + + + + + +CONFIDENTIAL TREATMENT REQUESTED WITH RESPECT TO CERTAIN PORTIONS HEREOF DENOTED WITH "***" Hosting Agreement between ELEPHANT TALK and T-Mobile, 18/9/2008 + + 3.8 T-Mobile shall support ELEPHANT TALK in fulfilling its legal obligations under Dutch law with respect to lawful interception under the terms and conditions as set forth in detail in Appendix 5. ELEPHANT TALK agrees to inform in writing, before the Ready for Service Date, the relevant Dutch authority (which is at the time of closing of this Agreement the public prosecutor) that T-Mobile will carry out the lawful intercept requests regarding ELEPHANT TALK Customers and that T-Mobile will and is entitled to collect the financial compensation of the concerning authority for these legal intercept activities on behalf of ELEPHANT TALK. ELEPHANT TALK shall provide T-Mobile with a copy of the aforementioned letter to the relevant Dutch authority before the Ready for Service Date. 4. IMPLEMENTATION + +4.1 The Parties shall implement the Hosting Services according to the Implementation Plan, as described in Appendix 3. + +4.2 The Parties shall provide each other with information on preparations made and other details relevant to the implementation of the Hosting Services. + +4.3 If it becomes known to a Party that either a delay shall occur or is likely to occur, such Party shall immediately notify the other Party thereof in writing. In such case, the reason for the delay shall be given as well as the moment when it is anticipated that the implementation can take place. + +4.4 ***. T-Mobile shall resolve every critical part of the Hosting Service as soon as reasonable possible and in any event before the date which is *** after the agreed ***. Once the Hosting Service and every critical part, as *** the PoD, thereof has successfully passed the *** pursuant to the procedures described in the PoD and Appendix 3 the Service shall be accepted by ELEPHANT TALK and ELEPHANT TALK shall sign the Protocol of Delivery acknowledging such acceptance. + +4.5 Subject to article 4.4., ELEPHANT TALK shall commence the Soft Launch on or after the ***. From the *** ELEPHANT TALK shall be permitted to (technically) test the Hosting Services for the duration of five (5) calendar weeks, with a limited number of users (***). The traffic generated during the Soft Launch shall be free of charge for up to *** - based on the tariffs T-Mobile will charge ELEPHANT TALK according to Appendix 2. For all other users and costs above the ***,- per user, ELEPHANT TALK has to pay the fees for the Hosting Services as defined in Appendix 2. The Soft Launch is not part of the forecasts pursuant to Appendix 4. ELEPHANT TALK will finalize the Soft Launch by signing the Protocol of Delivery, according to Appendix 3 and 11. + +Source: PARETEUM CORP, 8-K, 10/1/2008 + + + + + +CONFIDENTIAL TREATMENT REQUESTED WITH RESPECT TO CERTAIN PORTIONS HEREOF DENOTED WITH "***" Hosting Agreement between ELEPHANT TALK and T-Mobile, 18/9/2008 + + 4.6 If it would become applicable, ELEPHANT TALK shall obtain any regulatory approvals, consents, or decisions which allow ELEPHANT TALK to utilize the Hosting Services from T-Mobile to provide the ELEPHANT TALK Services to ELEPHANT TALK Customers as contemplated by this Agreement. T-Mobile agrees - but is not obliged - to reasonably assist ELEPHANT TALK in obtaining such regulatory approvals, consents or decisions, especially by making available to ELEPHANT TALK necessary documents, technical specifications and other information required and by cooperating through common communication to any regulatory authorities. 5. FORECASTS & COMMITMENTS + +5.1 A trial period, covering the *** calendar months from Commercial Launch Date shall apply for ELEPHANT TALK in order to gain experiences and knowledge for ELEPHANT TALK on forecasting and call behavior of its ELEPHANT TALK Customers. ***. + +5.2 ELEPHANT TALK shall provide Quarterly forecasts in writing expressed in volume for the use of the Hosting Services. Details as Parties have agreed upon regarding the forecasts are stipulated in Appendix 4. + +5.3 ***. + +5.4 ELEPHANT TALK accepts that T-Mobile will not be bound to the service level agreed between Parties pursuant to article 6 of this Agreement in relation to the relevant Quarter, if the ***. + +5.5 In case of (promotional) actions and events that will or might temporarily exceed the forecasted traffic volume, ELEPHANT TALK shall inform T-Mobile as soon as possible, after which T-Mobile shall make reasonable efforts to take appropriate and business wise feasible measures to prevent network interruptions. 6. SERVICE LEVEL + +6.1 The Hosting Services shall be provided in accordance with the level of service and support as the Parties have agreed upon in Appendix 6. + +6.2 At no point in time shall one of the Parties carry out service or support on equipment, excluding SIM cards ordered according to article 16, that belongs to the other Party or is provided or maintained by the other Party, unless the other Party has agreed in writing to such measures in advance. + +Source: PARETEUM CORP, 8-K, 10/1/2008 + + + + + +CONFIDENTIAL TREATMENT REQUESTED WITH RESPECT TO CERTAIN PORTIONS HEREOF DENOTED WITH "***" Hosting Agreement between ELEPHANT TALK and T-Mobile, 18/9/2008 + + 6.3 T-Mobile shall give prior notice to ELEPHANT TALK about planned outages and planned work as agreed in Appendix 6. 7. DATA PROTECTION & PRIVACY + +7.1 All rights to the personal and traffic data related to ELEPHANT TALK Customers which ELEPHANT TALK places at the disposal of T- Mobile, as well as to the results of the T-Mobile registering and processing of this data, shall rest in ELEPHANT TALK. T-Mobile shall have at its disposal data covered by the Agreement only to the extent and as long as necessary for T-Mobile to fulfill its obligations pursuant to this Agreement. + +7.2 Both Parties confirm that they shall comply with the Data Privacy regulations and laws applicable in the Netherlands and internationally, including the Dutch Data Protection Act ("Wet Bescherming Persoonsgegevens"), as amended or varied from time to time. T-Mobile undertakes to process personal data only for the purpose of this Agreement. + +7.3 ***. T-Mobile will refrain from using any ELEPHANT TALK Customer related data for any other purpose than providing the Hosting Services to ELEPHANT TALK, with the exception of: · legal tapping requirements in accordance with a request from the relevant public body; and · necessary use for the purposes of preventing, tracing and fighting fraud or irregularities; and · other activities required by law. + +8. THE CO-OPERATION RELATIONSHIP 8.1 The authorized members of each Party shall fully co-operate in the performance of the Agreement. The account manager of each Party shall act as the first point of contact in relation to any issues provided for in the Agreement. Each Party may change its contact person at any time by informing the other Party in writing. + +8.2 The Parties shall promptly inform each other of a breakdown in their respective systems or mobile telecommunications Network that has or might have an effect on the Hosting Services and/or the Agreement. 8.3 *** + +Source: PARETEUM CORP, 8-K, 10/1/2008 + + + + + +CONFIDENTIAL TREATMENT REQUESTED WITH RESPECT TO CERTAIN PORTIONS HEREOF DENOTED WITH "***" Hosting Agreement between ELEPHANT TALK and T-Mobile, 18/9/2008 + + 9. PRICES, CHARGING, BILLING AND ACCOUNTING 9.1 Development costs & prices for Hosting Services + +9.1.1 Subject to the terms of this Agreement, ELEPHANT TALK shall pay T-Mobile the total amount of *** -as specified in Appendix 2, as a contribution for upfront (network related) developments costs of the Hosting Services, including *** services, as described in Appendix 1. Payments shall be made in accordance with article 9.2. + +9.1.2 The prices to be paid by ELEPHANT TALK to T-Mobile for the Hosting Services rendered are stated in Appendix 2. Such prices may be amended in accordance with the terms of this Agreement and Appendix 2 and shall be paid by ELEPHANT TALK to T-Mobile in accordance with article 9.2. + +9.1.3 If the prices due to subsequent changes in Dutch laws and regulations become invalid or unenforceable the prices shall be modified to the extent required in order to be in conformity with such laws and regulations. In the event that such change of prices reasonably requires that Parties revise the applicable price structure of the Hosting Services in its entirety, Parties shall enter into good faith negotiations to agree upon new prices. 9.2 Charging 9.2.1 T-Mobile has charged the first installment of *** to ELEPHANT TALK with regard to ELEPHANT TALK's contribution for upfront (network related) developments costs, as mentioned in article 9.1.1, after signing of the Heads of Agreement between the Parties dated ***. The second installment of *** shall be charged to ELEPHANT TALK right after signing of the Agreement and shall be paid by ELEPHANT TALK within fifteen (15) Calendar Days of the invoice date. + +9.2.2 Whenever an ELEPHANT TALK Customer uses the ELEPHANT TALK Wholesale Services, ELEPHANT TALK shall be fully responsible for timely payment of the appropriate price(s) established under article 9.1.2 for the Hosting Services used. ELEPHANT TALK shall pay to T-Mobile the charges for the Hosting Services as from the Ready for Service Date, including the charges mentioned under article 4.5. + +9.2.3 In addition to the invoice mentioned under article 9.2.1., T-Mobile shall on a monthly arrear basis submit invoices to ELEPHANT TALK detailing the prices payable by ELEPHANT TALK under article 9.2.2. T-Mobile will send the following invoices for: a) network hosting services***; a) costs of authorized lawful intercept (to the extent provided for under Appendix 5); b) costs for other services agreed upon. + +Source: PARETEUM CORP, 8-K, 10/1/2008 + + + + + +CONFIDENTIAL TREATMENT REQUESTED WITH RESPECT TO CERTAIN PORTIONS HEREOF DENOTED WITH "***" Hosting Agreement between ELEPHANT TALK and T-Mobile, 18/9/2008 + +9.2.4 ELEPHANT TALK shall pay all invoices no later than *** after the invoice date. ELEPHANT TALK ***, in the event that ELEPHANT TALK fails to meet *** + +9.2.5 *** + +9.2.6 Invoices submitted to ELEPHANT TALK by T-Mobile shall be itemized in accordance with Dutch acknowledged principles of billing and accounting. + +9.2.7 All charges under this Agreement are exclusive of value-added tax (VAT), duties or levies imposed by any authority, government or governmental agency and any other applicable taxes payable in relation to the Hosting Services supplied to ELEPHANT TALK. Any taxes shall be charged in accordance with the relevant regulations in force at the time of making the taxable supply to ELEPHANT TALK and shall be paid by ELEPHANT TALK. All amounts and any payment of charges under this Agreement shall be made in EUROS and in full without any set-off, deductions or withholding whatsoever. + +9.2.8 Invoices not paid within the time limit set down in article 9.2.4 shall bear interest ("enkelvoudig") on a daily basis at the rate of the legal commercial interest rate ("wettelijke handelsrente") plus 1 % until full payment is received by T-Mobile whether before or after judgment. Interest shall continue to accrue notwithstanding termination or expiry of this Agreement for any cause whatsoever. + +9.2.9 ELEPHANT TALK may object to any invoice according to the procedure set out in article 4 of Appendix 7, Accounting and Billing. In the event of invoicing irregularities, Parties shall use their best efforts to establish the reason for and to eliminate such irregularities as quickly as possible. 9.2.10 ELEPHANT TALK will be accountable for and shall pay all generated traffic by ELEPHANT TALK Customers -including traffic generated via stolen or lost SIM cards - to T-Mobile . 9.2.11 ELEPHANT TALK bears the risk of and shall indemnify T-Mobile against high usage, fraud and bed debts/non-payment of its ELEPHANT TALK Customers. 9.3 Billing and Accounting 9.3.1 Procedures for billing and accounting information are provided in Appendix 7. + +Source: PARETEUM CORP, 8-K, 10/1/2008 + + + + + +CONFIDENTIAL TREATMENT REQUESTED WITH RESPECT TO CERTAIN PORTIONS HEREOF DENOTED WITH "***" Hosting Agreement between ELEPHANT TALK and T-Mobile, 18/9/2008 + + 9.3.2 In order to exchange invoice information, TAP files will be transferred by T-Mobile to ELEPHANT TALK, as stated in Appendix 7. + +9.3.3 For verification purposes T-Mobile will keep the CDRs in accordance with Dutch legislation. 9.4 Financial security + +9.4.1. *** + +***: a. ELEPHANT TALK has been declared bankrupt or has applied for bankruptcy according to 18.1 sub g, or; b. ELEPHANT TALK *** ***. + +9.4.2. T-Mobile shall not require financial security as set out in 9.4.1as long as the '*** + +T-Mobile customers using *** will ***. For *** ELEPHANT TALK will issue an invoice to T-Mobile. Parties agree that as long as: · *** ; and · the invoice for these *** delivery of the Hosting Services by T-Mobile according to this Agreement, article 9.4.1. shall not apply. In the event that ELEPHANT TALK does not comply with the payment terms as set out in article 9.2.4., Parties agree that T-Mobile is entitled *** ELEPHANT TALK following the '*** with the amounts which ELEPHANT TALK ( or any of its Affiliates) is due to T-Mobile according to this Agreement. + +9.4.3. As soon as article 9.4.2. does no longer apply - ***. 10. CUSTOMER CARE SUPPORT + +Source: PARETEUM CORP, 8-K, 10/1/2008 + + + + + +CONFIDENTIAL TREATMENT REQUESTED WITH RESPECT TO CERTAIN PORTIONS HEREOF DENOTED WITH "***" Hosting Agreement between ELEPHANT TALK and T-Mobile, 18/9/2008 + + 10.1 ELEPHANT TALK shall for its own account and at its own cost maintain a customer support organization for ELEPHANT TALK Customers. In addition, T-Mobile shall provide second line customer care support to the back office of ELEPHANT TALK's customer support organization, according to Appendix 1, 2 and 6. 10.2 For the avoidance of doubt, it is stated that Parties agree that T-Mobile shall not provide customer support services to ELEPHANT TALK Customers (meaning end-users of ELEPHANT TALK Customers) directly. 11. CONFIDENTIALITY + +11.1 The Parties agree that all aspects of the content of this Agreement shall be treated as confidential and that no information in respect of the content and/or existence of this Agreement shall be disclosed without the prior written consent of both Parties. Neither Party shall make any public announcements, including but not limited to press releases, articles, brochures, advertisements and speeches, concerning this Agreement without the prior written consent of the other Party. However, ELEPHANT TALK is entitled to communicate - as far as strictly necessary for the proper conclusion of its agreements- to the ELEPHANT TALK Customer that its services are provided by (the) T-Mobile (network). ELEPHANT TALK Customers shall be entitled to communicate that the network coverage is provided by T-Mobile, only in case they are asked for it. Under no circumstances, ELEPHANT TALK Customers shall make any public announcements, including but not limited to press releases, commercial articles (not being technical or business articles), brochures, advertisements, public speeches and other promotional material, that its services to mobile end-users are provided by the T-Mobile network. Parties are aware of the fact that it might be impossible for technical reasons to make a reference to the ELEPHANT TALK (Customer) brand name on the display of devices and that the T-Mobile brand name may appear. ELEPHANT TALK shall do the utmost to ensure that the communication to mobile telecommunication end-users- including the communication of ELEPHANT TALK Customers - shall be in accordance with this article. + +11.2 The Parties hereby agree to treat all information exchanged between them (hereinafter referred to as "Confidential Information") whether for the purposes of this Agreement or not as confidential and agree not to disclose such Confidential Information in any manner whatsoever in whole or in part except as provided for in the article 11.4. The Parties may disclose Confidential Information only to employees, attorneys at law and accountants or other professional advisers who need to know such Confidential Information for the purposes of participation in the discussions connected with this Agreement between the Parties and any transaction resulting there from and who are informed of and bound to the confidential nature of such Confidential Information. + +11.3 Notwithstanding the above, in the event that the receiving Party or (to the receiving Party's knowledge) anyone to whom the Confidential Information has been supplied to by the receiving Party receives a request to disclose under the terms of a subpoena, order, civil investigative demand or similar process issued by a court of competent jurisdiction or by a governmental body all or any part of the Confidential Information, such receiving Party agrees to: + +Source: PARETEUM CORP, 8-K, 10/1/2008 + + + + + +CONFIDENTIAL TREATMENT REQUESTED WITH RESPECT TO CERTAIN PORTIONS HEREOF DENOTED WITH "***" Hosting Agreement between ELEPHANT TALK and T-Mobile, 18/9/2008 + + i. notify the disclosing Party promptly in writing of the existence, terms, and circumstances surrounding such request; ii. consult with the disclosing Party on the advisability of taking legally available steps to resist or narrow such request; iii. give the disclosing Party the opportunity to defend, limit or protect against such disclosure; iv. if disclosure of such information is lawfully required, furnish only that portion of the Confidential Information which is legally necessary or appropriate in the light of all the circumstances and seek to obtain confidential treatment for any information required to be disclosed. + +11.4 For the purposes of this Agreement, Confidential Information shall not be considered to be confidential if such Confidential Information is: a) in or passed into the public domain other than by breach of this Agreement; or b) known to the receiving Party prior to the disclosure by the disclosing Party without any obligation of confidentiality; or c) disclosed to a receiving Party without restriction by a third party having the full right to disclose; or d) independently developed by a receiving Party to whom no disclosure of Confidential Information relevant to the development of such Confidential Information has been made. + +11.5 This article 11 shall survive the termination of this Agreement as provided for in articles 17 and 18 for a period of two (2) years but shall not in any way limit or restrict either Party's use of its own Confidential Information. 12. LIMITATION OF LIABILITY + +12.1 Without prejudice to the provisions expressly stated elsewhere in this Agreement, a Party's liability for damage suffered by the other Party, attributable to the first mentioned Party or a person for whom it is liable by law, shall be limited to the following events, and the following amounts: a) for direct damage to physical goods (property damage or "zaakschade") or directly resulting from death or personal injury: up to a maximum of *** per event or series of connected events and up to a further maximum of *** for all events (connected or not) in any period of 12 calendar months; b) for damage directly resulting from a material breach of this Agreement: up to a maximum *** or *** as set out in Appendix 2), whatever amount is the highest, in any period of 12 calendar months. + +Source: PARETEUM CORP, 8-K, 10/1/2008 + + + + + +CONFIDENTIAL TREATMENT REQUESTED WITH RESPECT TO CERTAIN PORTIONS HEREOF DENOTED WITH "***" Hosting Agreement between ELEPHANT TALK and T-Mobile, 18/9/2008 + + 12.2 In no event shall either Party be liable for indirect or consequential loss or damage, including but not limited to, loss of profit, loss of sales or turnover, loss of or damage to reputation, loss of contract, loss of business, loss of anticipated savings and interest, increased operation costs, increase maintenance costs even if such loss or damage was reasonably foreseeable or if a Party had been advised by the other Party of the possibility of incurring such loss or damage. 12.3 In no event shall any employee of either Party or of an Affiliated Company be liable to the other Party for any act of negligence or intent under or in connection with this Agreement. Save for the limitations in articles 12.1 and 12.2 nothing in the foregoing shall in any way restrict the liability of either Party for the actions of its employees. + +12.4 Limitation of liability as described in this article shall not apply: a) in case the damage or loss is caused by a Party's willful misconduct (including fraud) or gross negligence, or b) in case of a breach of a Parties obligation under article 11 (confidentiality) and article 15 (indemnification for breach of intellectual property rights). 12.5 Any claim for damages must be notified to the other Party within six (6) months as from the date on which the damage was caused, failing which such claim is deemed to be waived. 12.6 ELEPHANT TALK will be fully responsible for the settlement of, and shall indemnify ("vrijwaren") T-Mobile against any claims made by ELEPHANT TALK Customers or third parties with whom ELEPHANT TALK has a (contractual) relationship and which claims are related to this (contractual) relationship 13. SUSPENSION AND TERMINATION OF HOSTING SERVICES + +13.1 Notwithstanding anything stipulated in the Agreement, T-Mobile may without liability suspend or terminate whole or part of the Hosting Services in relation to one or more ELEPHANT TALK Customers, in circumstances where T-Mobile would suspend or terminate those services to its own customers, in the following circumstances - or circumstances of similar severity. a) ***; b) ***; or c) suspected fraudulent or unauthorized use by the relevant ***; or d) necessary maintenance or enhancement of the T-Mobile Network. In the event of planned suspension or termination of all or any of the Hosting Services, T-Mobile shall inform ELEPHANT TALK accordingly by sending a written notification, as soon as reasonably and business wise possible. + +13.2 Furthermore, T-Mobile may without liability temporarily suspend all or any of its Hosting Services to ELEPHANT TALK if a (partial or temporary) breakdown on the T-Mobile Network should occur. Such temporarily suspension shall - to the extent possible - be limited to the Location Areas where the temporarily breakdown occurs. Immediately after the T-Mobile Network has been restored, T-Mobile shall take all appropriate measures in order to re-establish the Hosting Services with the shortest possible delay, in accordance with the procedures as described in Appendix 6. + +Source: PARETEUM CORP, 8-K, 10/1/2008 + + + + + +CONFIDENTIAL TREATMENT REQUESTED WITH RESPECT TO CERTAIN PORTIONS HEREOF DENOTED WITH "***" Hosting Agreement between ELEPHANT TALK and T-Mobile, 18/9/2008 + + 13.3 T-Mobile may without liability limit at its own discretion the availability of all or any of the Hosting Services above the level of the traffic forecasts of Hosting Services as defined in article 5 and Appendix 4, provided that the provision of these Hosting Services -above the level of the traffic forecasts - to ELEPHANT TALK have a noticeable negative impact on the quality of the T-Mobile Network and on the provision of services to T-Mobile customers. 14. FORCE MAJEURE + +14.1 Non-performance by either Party of its obligations pursuant to this Agreement or delay in performing the same shall not constitute a breach of the Agreement if and for as long as it is due to a force majeure event, including, but not limited to, government action or requirement of regulatory authority, lock-outs, strikes, shortage of transportation, war, terrorist attacks, rebellion or other military action, fire, floods, natural catastrophes, that a Party is not able to overcome with reasonable and proportional efforts, or a non-performance of obligations by a sub-contractor to a Party - in circumstances where it is reasonably impossible for that Party or an other sub-contractor to perform such obligation instead -, pursuant to any of the aforementioned reasons. + +14.2 The Party prevented from fulfilling its obligations shall on becoming aware of such event inform the other Party in writing of such force majeure event as soon as possible. If the affected Party fails to inform the other Party of the occurrence of a force majeure event as set out in article 14.1 above, then such Party thereafter shall not be entitled to refer such events to force majeure as a reason for non-fulfillment. This obligation does not apply if the force majeure event is known by both Parties or the affected Party is unable to inform the other Party due to the force majeure event. + +14.3 If the force majeure event continues for more than two (2) consecutive calendar weeks, then the Parties shall promptly meet and discuss methods to resolve the difficulties arising from the event of force majeure. If no agreement is reached by the Parties within a period of fifteen(15) Calendar Days and the force majeure event continues to have a substantial effect on the performance of the Agreement, either Party shall have the right to terminate this Agreement in whole or in part with immediate effect by written notice without incurring any financial liability to the other Party as a consequence of such termination. + +Source: PARETEUM CORP, 8-K, 10/1/2008 + + + + + +CONFIDENTIAL TREATMENT REQUESTED WITH RESPECT TO CERTAIN PORTIONS HEREOF DENOTED WITH "***" Hosting Agreement between ELEPHANT TALK and T-Mobile, 18/9/2008 + + 15. INTELLECTUAL PROPERTY RIGHTS + +15.1 This Agreement does not imply any transfer of intellectual property right. Neither Party shall use the other Party's name, trademarks, service marks or other intellectual property rights without the other Party's prior written consent. ELEPHANT TALK shall guarantee that in any agreement it concludes with ELEPHANT TALK Customers the following provision will be included: 'In no circumstances, [X] shall use T-Mobile's name, trademarks, service marks or other intellectual property rights in public announcements, including but not limited to press releases, commercial articles (not being technical or business articles), brochures, advertisements public speeches and other promotional material.' + +15.2 ELEPHANT TALK is allowed to market and sell its services to ELEPHANT TALK Customers under a brand name chosen by ELEPHANT TALK. However, ELEPHANT TALK shall not use any logos, names or other material that bears, is similar or refers to any intellectual property right of T-Mobile or T-Mobile competitors (meaning mobile network operators, mobile virtual network operators and enhanced service providers in The Netherlands) without prior written approval of T-Mobile. + +15.3 When marketing its ELEPHANT TALK Wholesale Services in The Netherlands, ELEPHANT TALK shall refrain from using comparative advertising, in any form of media, in relation to T-Mobile's, including its Affiliate's, products and/or services. + +15.4 ELEPHANT TALK will defend, indemnify and will hold T-Mobile harmless from and against any claim and costs assessed against T- Mobile by a third party alleging that the ELEPHANT TALK Wholesale Services, constitute an infringement of any third party's intellectual property rights in circumstances where the alleged infringement is attributable to ELEPHANT TALK and in no way the fault of T-Mobile or its Affiliated Company. If such a claim is valid, ELEPHANT TALK shall make the modifications needed to cease the infringement at its own expense as soon as possible. Such modifications will not have any impact on the functionality and costs of the provided Hosting Services. ELEPHANT TALK shall inform T-Mobile on any of such modifications as soon as possible. 15.5 T-Mobile shall retain all right, title and interest in and to the Hosting Services, including all intellectual property rights therein and any modifications or enhancements thereof. 15.6 T-Mobile hereby grants ELEPHANT TALK a fully paid-up, non-exclusive licence to use the Hosting Services for the purpose of ELEPHANT TALK in providing the ELEPHANT TALK Wholesale Services during the term of this Agreement without further consideration. This licence granted shall take effect on the date that the relevant Hosting Services is first used by or on behalf of ELEPHANT TALK to provide the ELEPHANT TALK Wholesale Services under this Agreement. 16. SIM CARDS & CALLING CREDIT + +Source: PARETEUM CORP, 8-K, 10/1/2008 + + + + + +CONFIDENTIAL TREATMENT REQUESTED WITH RESPECT TO CERTAIN PORTIONS HEREOF DENOTED WITH "***" Hosting Agreement between ELEPHANT TALK and T-Mobile, 18/9/2008 + +16.1 ELEPHANT TALK shall order and purchase SIM cards. + +16.2 In principle the *** will be of *** will remain the property of T-Mobile at all times. + +16.3 T-Mobile shall retain at all times full ownership of its intellectual property rights vested in the software (including T-Moible's and its supplier related software and codes, but excluding typical ELEPHANT TALK's and/or other party's content) contained in the T-Mobile IMSI's. 16.4 Parties agree that they will re-discuss the provisioning of a ***, the implementation and associated costs of the *** shall be considered part of the Agreement and therefore shall not result in additional costs for ELEPHANT TALK provided that no *** are involved. ELEPHANT TALK shall retain at all times full ownership of its intellectual property rights vested in the software contained in the ***. . + +16.5 T-Mobile has a strict policy with respect to the usage of *** (also known as "*** ") and any other devices that ***"). These *** are under no circumstances allowed on the T-Mobile Network. ELEPHANT TALK is aware of T-Mobile's position with respect to these *** and will refrain from using *** or from doing business with any party (including ELEPHANT TALK's Customers), who uses these *** to the T-Mobile Network. Furthermore, duplicating the *** or functionalities of the *** without the explicit prior written approval of T- Mobile is forbidden. ELEPHANT TALK will (contractually) inform the ELEPHANT TALK Customers that they will refrain from using *** or ***. T-Mobile herewith gives ELEPHANT TALK approval to *** once, only for the purpose of supplying *** as commonly known in the market at the moment of signing the Agreement, to ELEPHANT TALK Customers, only to be used by end users of ELEPHANT TALK Customers for normal end user purposes. Parties shall use their reasonable endeavors to co-operate in order to prevent and clarify any misuse of *** or use of ***. In the event that T-Mobile discovers such improper use or forbidden acts of ELEPHANT TALK Customers, Parties shall contact each other's fraud manager immediately, in order to stipulate details and take appropriate measures. In addition, ELEPHANT TALK shall do its best to stop these actions immediately on first request of T-Mobile. Should ELEPHANT TALK wilfully or negligently fail to comply with an T-Mobile request, ELEPHANT TALK shall bear full responsibility and indemnify T- Mobile for all damages and losses T-Mobile suffers resulting from actions as mentioned in this article by ELEPHANT TALK's Customers. 17. DURATION OF THE AGREEMENT 17.1 This Agreement shall come into force on the Date of the Agreement, and shall, subject to article 18, remain in full force and effect for an initial period of *** from the Commercial Launch Date. + +17.2 The Agreement may be terminated by both Parties with a notification period of *** before the end of the Initial Term of the Agreement. If no termination notice is provided, the Agreement will be automatically extended for consecutive *** periods until such time as *** termination notice is provided. At the end of *** Parties will negotiate in good faith regarding a possible extension of the Initial Term. + + Parties can mutually agree in writing to deviate from an automatic extension of *** by extending this Agreement for a longer period than ***. + +Source: PARETEUM CORP, 8-K, 10/1/2008 + + + + + +CONFIDENTIAL TREATMENT REQUESTED WITH RESPECT TO CERTAIN PORTIONS HEREOF DENOTED WITH "***" Hosting Agreement between ELEPHANT TALK and T-Mobile, 18/9/2008 + +18. TERMINATION OF AGREEMENT + +18.1 In addition to the conditions of Article 17, this Agreement may be terminated as follows: + + a. by mutual agreement of the Parties; or + + b. by either Party, with immediate effect, if the other Party is in material breach of any provision of this Agreement and does not or is not capable of remedying such breach within a reasonable time and in any event within sixty (60) Business Days of receipt of a written notice to such effect. A material breach will, for the purpose of this Agreement, not include the event that ELEPHANT TALK fails to comply with its payments obligations under article 9.2.; or + + c. by T-Mobile, if ELEPHANT TALK fails to comply with its obligations under article 16.5 upon written notification thereof by T-Mobile, within a reasonable period of time following the respective notification date (but in no event later than forty-five (45) Business Days of receipt of a written notice to such effect); or, + + d. by T-Mobile, subject to *** . In the present situation ***; or + + e. by T-Mobile or its successors, ***.; or, + + f. by ELEPHANT TALK, subject to *** and this entity is at the time of signing of ***; or + + g.. by either Party, with immediate effect, if the other Party becomes bankrupt or insolvent (or bankruptcy or insolvency is appropriately requested for) or is liquidated or dissolved other than for the purpose of a bona fide reconstruction or amalgamation, or if that other Party enters into any composition or arrangements with its creditors; or, + +Source: PARETEUM CORP, 8-K, 10/1/2008 + + + + + +CONFIDENTIAL TREATMENT REQUESTED WITH RESPECT TO CERTAIN PORTIONS HEREOF DENOTED WITH "***" Hosting Agreement between ELEPHANT TALK and T-Mobile, 18/9/2008 + + 18.2 In case the number of frequencies or the use of the frequencies allocated to the T-Mobile Network is reduced pursuant to Regulatory Provisions the Parties shall renegotiate in good faith the commercial conditions of this Agreement in order to comply with Regulatory Provisions. 18.3 In the event that T-Mobile is in material breach and ELEPHANT TALK terminates the Agreement according to article 18.1.b, ***. + +18.4 This Agreement will terminate immediately in the event that a final order made by the relevant governmental authority not granting, revoking or denying renewal of T-Mobile DCS 1800 or UMTS/HSDPA license or permission to operate the T-Mobile Network or any other license to operate the Hosting Services, takes effect, if such order will be beyond the reasonable control of T-Mobile. 19. MODIFICATIONS + +19.1 Any modifications and/or additions to this Agreement and/or the Appendices shall be valid only if made in writing and signed by duly authorized representatives of both Parties. + +19.2 If a Party requests a modification of this Agreement because (a) a material change occurs in the laws and regulations governing telecommunications in the Netherlands, or (b) a material change (including enforcement action by any regulatory authority) occurs which affects or reasonably could affect the commercial and technical basis of this Agreement, Parties shall enter into good faith negotiations in order to determine if a modification of the Agreement is necessary and if so agree upon the way to implement the required changes in or modifications to this Agreement. + +19.3 Parties agree that the Operational Manual can only be modified by T-Mobile's account manager upon consultation with ELEPHANT TALK's authorized account manager and with the subsequent written agreement of ELEPHANT TALK and T-Mobile. 20. MISCELLANEOUS 20.1 Successors, Assigns This Agreement and the rights and obligations specified herein shall be binding upon the Parties and their respective legal successors and neither Party shall sell, transfer or assign this Agreement or any part, interest, right or obligation hereunder except that a Party shall have the right to transfer or assign this Agreement in whole (but not in part) to an Affiliated Company provided that: + +Source: PARETEUM CORP, 8-K, 10/1/2008 + + + + + +CONFIDENTIAL TREATMENT REQUESTED WITH RESPECT TO CERTAIN PORTIONS HEREOF DENOTED WITH "***" Hosting Agreement between ELEPHANT TALK and T-Mobile, 18/9/2008 + + a) such Affiliated Company expressly assumes, by written instrument, all of the obligations of the Party under this Agreement and thereby becomes a Party to this Agreement, and b) such Affiliated Company has adequate financial strength, resources and experience in the reasonable opinion of the other Party (such opinion to be obtained in writing in advance of any assignment), to comply with its obligations under this Agreement. Such assignment shall not release the assigning Party of its obligations under article 11 of this Agreement. + +No person other than a Party to this Agreement shall acquire any rights hereunder as a third-Party beneficiary or otherwise by virtue of this Agreement. + +Both Parties will remain independent and competing companies, will develop their own market strategy, and will address the market and the subscribers directly and independently. 20.2 No Waiver Failure by any Party at any time to require performance of any provisions of this Agreement shall in no manner affect its rights to enforce the same, and the waiver by any Party of any breach of any provision of this Agreement shall not be construed to be a waiver by such Party of any succeeding breach of such provision or waiver by such Party of any breach of any other provision hereof. 20.3 Severability If any part of this Agreement or any Appendices hereto is held to be invalid or unenforceable according to Regulatory Provisions, this shall not invalidate any other provisions of this Agreement or the Appendices hereto. The Parties shall attempt through negotiations in good faith to replace any such provision of this Agreement or the Appendices so held to be invalid or unenforceable with a valid provision which comes as close to the original economic understanding and intention of the Parties as legally feasible. The same applies insofar as this Agreement and/or its Appendices prove to have a gap. In this case, the Parties shall endeavor to close the gap through negotiations conducted in good faith. 20.4 Entire Agreement 20.4.1 This Agreement and the documents referred to in it contain the whole Agreement between the Parties relating to the subject matter of this Agreement and supersede all previous agreements and understandings whether written or oral between the Parties. 20.4.2 Each Party acknowledges that in entering into this Agreement it shall not rely on any representation, warranty or other assurance except as set out in this Agreement. + +Source: PARETEUM CORP, 8-K, 10/1/2008 + + + + + +CONFIDENTIAL TREATMENT REQUESTED WITH RESPECT TO CERTAIN PORTIONS HEREOF DENOTED WITH "***" Hosting Agreement between ELEPHANT TALK and T-Mobile, 18/9/2008 + + 20.5 Non-solicitation Without the prior written consent of the other Party, a Party shall not at any time while this Agreement is in force and for a one-year period after termination of this Agreement either for itself or on behalf of any other company solicit, induce or cause any employee of the other Party or any Affiliated Company of this other Party who has been a representative of or employed by the other Party in connection with this Agreement to leave such employment. In case of violation of this article, the Party shall pay to the other Party an equivalent of eighteen (18) months gross salary of the respective employee. + +20.6 Survival Any provision of this Agreement which by its nature or implication (including in respect of any accrued rights and liabilities) is required to survive termination or expiry of this Agreement shall survive termination or expiry as aforesaid. 20.7 Notices Any notice or other formal communication to be given or made under or in connection with this Agreement, if not stated otherwise explicitly in this Agreement and its Appendices, shall be in writing, signed by or on behalf of the Party giving it and sent by registered mail. All notice or other formal communication to be delivered under this Agreement shall be addressed to: for ELEPHANT TALK: the CTO; for T-Mobile: the Director Wholesale & Interconnect. + +20.8 Expenses Each Party shall bear its own costs and expenses including the fees of its professional advisors in relation to the preparation, execution and carrying into effect of this Agreement and all other documents related to it. + +20.9 Representation Neither Party may in any respect represent the other Party or enter into any agreement or other commitment on behalf of the other Party except as provided for in this Agreement or agreed by the Parties in writing. + +The Agreement and conditions contained herein are only related to the Dutch market and can not be referred to in discussions or deals with other T-Mobile companies and/or Deutsche Telecom and their respective Affiliated Companies. Due to amongst others market and country difference, T-Mobile expressly states and ELEPHANT TALK agrees that this Agreement cannot and will not create any precedent for any existing or future discussions between ELEPHANT TALK and T-Mobile/Deutsche Telecom and their Affiliated Companies outside the Netherlands; + +Source: PARETEUM CORP, 8-K, 10/1/2008 + + + + + +CONFIDENTIAL TREATMENT REQUESTED WITH RESPECT TO CERTAIN PORTIONS HEREOF DENOTED WITH "***" Hosting Agreement between ELEPHANT TALK and T-Mobile, 18/9/2008 + + 21. GOVERNING LAW This Agreement shall be governed by and construed in all respects exclusively in accordance with the laws of the Netherlands. 22. DISPUTE RESOLUTION Any dispute, excluding invoice disputes as described in Appendix 7, controversy or claim arising out of or in connection with any aspect of this Agreement, or the breach, termination or invalidity thereof, shall: + + a. in first instance be referred to the authorized account manager of either Party. The account managers shall try to solve the dispute within ten (10) Business Days. If the dispute is not resolved within the latter period the appropriate managers of both account managers will seek for a resolution within ten (10) Business Days; and + + b. Thereafter, if the matter is not resolved, it shall be referred to the Chief Executive Officers of the Managing Boards of the Parties for a further period of ten (10) Business Days for resolution; and + +Thereafter, if the matter remains unresolved, it shall exclusively be referred and finally settled by the competent court in The Hague within the jurisdiction of the Netherlands. + +Source: PARETEUM CORP, 8-K, 10/1/2008 + + + + + + CONFIDENTIAL TREATMENT REQUESTED WITH RESPECT TO CERTAIN PORTIONS HEREOF DENOTED WITH "***" Hosting Agreement between ELEPHANT TALK and T-Mobile, 18/9/2008 + + 23. COUNTERPART + +The Agreement is written in the English language in two (2) copies, each Party receiving one (1) duly signed copy. Both copies are authentic. + +Signed in September 17, 2008 + + For T-Mobile Netherlands B.V. /s/ Niek Jan van Damme Name: Mr. Niek Jan van Damme Title: Managing Director + + For Elephant Talk Communication Holding AG /s/ Steven van der Velden Name: Mr. Steven van der Velden Title: CEO + + + + For T-Mobile Netherlands B.V. /s/ Hans van Leeuwen Name: Hans van Leeuwen Title: Financieel Directeur + + For Elephant Talk Communication Holding AG /s/ Martin Zuurbier Name: Mr. Martin Zuurbier Title: CTO/COO + +____________________________ + +Source: PARETEUM CORP, 8-K, 10/1/2008 \ No newline at end of file diff --git a/full_contract_txt/PcquoteComInc_19990721_S-1A_EX-10.11_6377149_EX-10.11_Co-Branding Agreement1.txt b/full_contract_txt/PcquoteComInc_19990721_S-1A_EX-10.11_6377149_EX-10.11_Co-Branding Agreement1.txt new file mode 100644 index 0000000000000000000000000000000000000000..96552ca53bebd66c5439fbc454a51baf7e3874d9 --- /dev/null +++ b/full_contract_txt/PcquoteComInc_19990721_S-1A_EX-10.11_6377149_EX-10.11_Co-Branding Agreement1.txt @@ -0,0 +1,209 @@ +EXHIBIT 10.11 + + CONFIDENTIAL TREATMENT + + Portions indicated by a [***] have been omitted and filed separately with the Commission + +PCQUOTE + +- ---------------------------------------------------------------------------- CO-BRANDING AGREEMENT + +This agreement is made effective Oct. 11, 1996 by and between PC QUOTE, INC. (hereinafter referred to as "PCQ"), a Delaware Corporation with its principal place of business at 300 South Wacker Drive, Chicago, Illinois 60605 and AB Wately, Inc. (hereinafter referred to as "ABW") with its principal place of business at 33 West 17th Street, New York, NY 10011. This agreement shall apply to said ABW and all of its subsidiaries and related companies. + +Definitions: + +SOFTWARE + +PC QUOTE 6.0-TM- for Windows on the Internet is a software application that displays market data information, provided via the digital Hyperfeed, in the form of quotes, charts, graphs, tables, board views, tickers and other analytical tools. + +HYPERFEED + +The PC Quote proprietary digital data feed transmitted via satellite, land line, or Internet with advanced compression technology, containing financial market information obtained by PCQ from the institutions and exchanges listed in Section 5 of this Agreement. This market data includes stock quotes, futures and options trading, commodities, and other related information. + +Witnesseth: + +NOW, THEREFORE, for good and valuable consideration, and in consideration of the mutual covenants and conditions herein set forth, and with the intent to be legally bound thereby, ABW and PCQ hereby agree to the following: + +1. The Co-Branded Service + + A. PCQ agrees to allow ABW to co-brand the PCQ SOFTWARE in order to provide a value added service on ABW's World Wide Web site. The co-branded SOFTWARE will be made available via ABW software housed at the ABW office listed in this Agreement. The server will be accessed by all ABW subscribers in order to download the SOFTWARE and receive the HYPERFEED. + + B. PCQ will provide a continuous HYPERFEED to the ABW servers; however, PCQ will control the receipt of the HYPERFEED by ABW clients via a remote access server on PCQ's site that will authorize each new ABW account. ABW agrees to sign up all new subscribers to the co-branded service, including execution of all applicable service and exchange agreements, will send to PCQ the executed subscriber + +agreements before access to the quote servers will be provided to ABW clients by PCQ. PCQ shall have the sole ability to authorize access to the market data contained in the HYPERFEED by ABW clients. + +Source: PCQUOTE COM INC, S-1/A, 7/21/1999 + + + + + + D. PCQ and Townsend shall retain title and all copyrights or proprietary rights to the SOFTWARE and HYPERFEED provided to ABW and ABW's clients pursuant to the Agreement. ABW will not provide any unauthorized access to the co-branded service, nor reproduce or redistribute the service in any way. + + E. ABW agrees to include the following in the co-branded pages displaying quotes: "All quotes provided by PC Quote, Inc." ABW also agrees to include the following disclaimer on the access page to the co-branded service: + + "PC Quote is not subject to liability for truth, accuracy, or completeness of the market data information nor is PC Quote liable for errors, mistakes or omissions in the data or for any delays or interruptions in the end user's receipt of the data. PC Quote does not warrant that the data provided may be relied upon for trading purposes." + + 2. Term + + A. [***] The effective date for purposes of this Agreement is the contract date as specified on the signature page of this Agreement. Neither PCQ nor ABW shall terminate or alter this Agreement except as stated herein. + + B. [***] Notice expressing a desire to terminate this Agreement will be sent by certified mail to the address indicated above. Said termination will be effective as of the last day of the month in which this anniversary occurs. + + C. Notwithstanding the provisions of (A), and (B) above, should a party to this Agreement be in material breach of the Agreement, the other party may terminate the Agreement thirty (30) days after notice of said material breach is received, and only if such material breach is not cured within thirty (30) days of receipt of notice. + + 3. Payment For Service + + A. Beginning with the date specified on the fee schedule attached hereto as Schedule A, or upon completion of the Installation and testing of all equipment and services, which ever is later. ABW will commence payment of a monthly fee for the right to permit access by ABW's clients to said SOFTWARE and HYPERFEED. + + B. The charges for the services set forth in this Agreement shall be invoiced monthly. ABW agrees to pay said charges within thirty (30) days of the monthly invoice date. ABW may issue a purchase order for billing purposes. The invoices must reference that purchase order number and be sent to the "Bill To" address stated on the purchase order. The terms of this negotiated Agreement shall supercede those contained on that purchase order. + + C. All payments will be made in US Dollars drawn on a US bank. ABW will provide a complete list of all clients using the format described in Schedule B with each payment. + + D. Any payments which have not been received by PCQ within thirty (30) days of the Invoice date shall be subject to a FINANCE CHARGE of 1.0% per month which is a corresponding ANNUAL + +PERCENTAGE RATE of 12% on the outstanding balance. + + F. Any invoice submitted by PCQ shall be deemed correct unless ABW advises PCQ in writing, within thirty (30) days of the receipt of the invoice, that it disagrees with the invoice and specifies the nature of the disagreement. + + G. Any sales, use, excise, value added and local property taxes will be payable by ABW should such taxes be applicable. + + H. In the event that any invoice is not paid by ABW within forty-five (45) days after receipt, and when no discrepancy issues have been identified by ABW which are in some stage of resolution, after giving notice to ABW, PCQ may terminate this agreement and ABW's access to and use of SOFTWARE and HYPERFEED provided hereunder unless ABW pays such invoice prior to the termination date + +Source: PCQUOTE COM INC, S-1/A, 7/21/1999 + + + + + +specified in the Termination Notice. The remedies contained herein are cumulative and are in addition to all other rights and remedies available to PCQ under this Agreement, by operation of law, or otherwise. + + I. Upon termination as provided for in this Agreement, ABW will pay all charges for services and fees for the entire month in which that termination becomes effective. + +4. Technical Support + + A. ABW agrees to field all initial customer support requests and assist its clients to the best of its knowledge and ability. If the support issue is of a complex nature that ABW is unable to solve, ABW may forward the call on to the PCQ technical support staff. + +5. Exchange Authorization + + A. The ABW hereby acknowledges and agrees that the HYPERFEED provided under this Agreement contains market information obtained, selected and consolidated by PCQ under the authority of various agencies, including but not limited to, the New York Stock Exchange, American Stock Exchange, Pacific Stock Exchange, Midwest Stock Exchange, Chicago Board Options Exchange, the Options Price Reporting Authority, the Consolidated Tape Association, Chicago Board of Trade, Chicago Mercantile Exchange/International Monetary Market, Kansas City Board of Trade, Minneapolis Grain Exchange, Commodities Exchange Center, New York Futures Exchange, Mid-America Commodity Exchange, and Consolidated Canadian Group and that the ABW's use of the service for internal or external redistribution of date is authorized and regulated by said agencies. + +6. Limitations of Liability, Remedies On Default + + A. The information and data used in the HYPERFEED and SOFTWARE provided under this Agreement, including option prices, stock prices, commodity prices, dividends, dividend dates, volatilities, deltas and other variables, are obtained by PCQ from the various exchanges and other sources which are believed to be reliable and PCQ agrees to run reasonable control checks thereon to verify that the data transmitted by PCQ is the same as the data received from the various exchanges and other sources. However, PCQ shall not be subject to liability for truth, accuracy, or completeness of the information received by PCQ from the various exchanges and other sources and conveyed to ABW or for errors, mistakes or omissions therein or for any delays or interruptions of the HYPERFEED or SOFTWARE from whatever cause. This agreement does not violate any agency requirements and PCQ has the right to enter into this agreement from its information providers. + + B. PCQ shall not be responsible for, nor be in default under this Agreement due to delays or failure of performance resulting from Internet + +Service Provider delivery problems or failure, or any communication or delivery problems associated with the Internet in general. Furthermore, PCQ and ABW shall not be responsible for nor in default due to acts or causes beyond its control, including but not limited to: acts of God, strikes, lockouts, communications line or equipment failures, power failures, earthquakes, or other disasters. Should such an occurrence render the HYPERFEED or SOFTWARE inoperable or unavailable for a period over ten (10) days, then ABW shall have the right to discount their billing in proportion to the delay. + + C. LIABILITY UNDER THIS AGREEMENT FROM ANY AND ALL CAUSES, INCLUDING, BUT NOT LIMITED TO, PROGRAM MALFUNCTION OR OPERATIONAL NEGLIGENCE, SHALL BE LIMITED TO GENERAL MONEY DAMAGES IN AN AMOUNT NOT TO EXCEED THE TOTAL CHARGES PAID BY ABW FOR THE SERVICES DURING THE MOST RECENT TWELVE (12) MONTHS OF THE AGREEMENT. SUCH LIMITATION SHALL BE THE EXTENT OF PCQ OR ABW'S LIABILITY REGARDLESS OF THE FORM IN WHICH ANY LEGAL OR EQUITABLE ACTION MAY BE BROUGHT AGAINST PCQ OR ABW, AND THE FOREGOING SHALL CONSTITUTE PCQ'S OR ABW'S SOLE REMEDY. IN NO EVENT WILL EITHER PARTY BE RESPONSIBLE FOR LOST PROFITS OR SPECIAL INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES WHICH ABW OR PCQ INCUR OR EXPERIENCE ON ACCOUNT OF ENTERING INTO OR RELYING ON THIS AGREEMENT, EVEN IF PCQ OR ABW HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. + +7. Exclusion of Warranties + +It is expressly understood and agreed to by the parties hereto that EXCEPT AS + +Source: PCQUOTE COM INC, S-1/A, 7/21/1999 + + + + + +SPECIFICALLY PROVIDED HEREIN, ALL WARRANTIES, EXPRESSED OR IMPLIED, INCLUDING ANY IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, ARE HEREBY EXCLUDED. + +8. Confidentiality of Proprietary Information + + A. ABW understands and acknowledges the proprietary nature of the HYPERFEED and SOFTWARE provided by PCQ and that said HYPERFEED and SOFTWARE have been developed as a trade secret of PCQ and at its expense. ABW agrees to hold said information in the same manner as ABW deals with its own proprietary information and trade secrets. Furthermore, ABW agrees not to attempt any reverse engineering of the HYPERFEED to decode the signals used by PCQ in transmitting the information. + + B. PCQ understands the proprietary nature of any information belonging to ABW, and recognizes the harm that can be occasioned to user by disclosure of information relative to ABW's activities, PCQ agrees to hold such information in the same manner as PCQ deals with its own proprietary information and trade secrets. + + C. PCQ acknowledges the confidential nature of ABW's use of the SOFTWARE and HYPERFEED during the initial term of this agreement. Due to the unannounced platform on which ABW shall make available its electronic service to its client during this initial term, PCQ shall in no way disclose to other parties the substance nor acknowledge the existence of this agreement. Any advertising or disclosure of the relationship between the parties, use of either's marks, names or reference by the other shall be approved by both parties prior to release. + +9. Indemnification + + A. ABW hereby agrees to defend, indemnify and hold harmless PCQ, its employees, agents, successors and assigns, harmless, including reasonable attorney's fees, from and against any of the following: + + 1. Any and all claims, liabilities, and obligations claimed by any third party or parties against PCQ and arising directly out of ABW's use of the Service. + + 2. Any and all claims, liabilities, or obligations resulting from ABW's misrepresentations, negligence, willful misconduct, breach of warranty or non-performance of any of the covenants or obligations under this Agreement or from any misrepresentations or omissions made by ABW to PCQ, including specifically, but not limited to, any authority required of ABW pursuant to Section 6 hereof. + + B. Such indemnification by ABW shall only be effective if the claim, liability or obligation claimed by the third party is in no way related to PCQ's negligence, willful misconduct or failure to perform any of its obligations under this Agreement. + + C. PCQ hereby agrees to defend, indemnify and hold ABW harmless, including reasonable attorney's fees, from and against any claim that the SOFTWARE or HYPERFEED infringes on the patent, copyright or other proprietary rights of another, including any and all claims, liabilities, or obligations resulting from PCQ's negligence, willful misconduct, misrepresentations, breach of warranty or non-performance of any of the covenants or obligations under this Agreement. + + D. Such indemnification by PCQ shall only be effective if: + + 1. The claim, liability or obligation claimed by the third party is in no way related to ASW'S negligence, willful misconduct or failure to perform any of its obligations under this Agreement. + + 2. ABW notifies PCQ promptly in writing of any claim or threatened claim against ABW and thereafter cooperates with PCQ so that PCQ will not be prejudiced in the defense, settlement or other handling thereof and ABW permits PCQ, at PCQ's option and expense, to control the defense, settlement or other handling of such claim. + +10. Assignment + +Source: PCQUOTE COM INC, S-1/A, 7/21/1999 + + + + + + This Agreement or any rights or obligations granted hereunder may not be assigned by ABW without the prior written consent of PCQ. + +11. Applicable Law and Venue + + This Agreement shall be interpreted, construed and enforced in all respects in accordance with the laws of the State of Illinois, except with regards to its rules regarding choice of law. Each party irrevocably consents to the jurisdiction of the courts of the State of Illinois and the federal courts situated in the State of Illinois, in connection with any action to enforce the provisions of this Agreement, to recover damages or other relief for breach or default under this Agreement, or otherwise arising under or by reason of this Agreement. + +12. Severability and Survival + + A. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement. + + B. The provisions dealing with indemnification and confidentiality and any other section of this Agreement, + +unless specifically stated otherwise, which may reasonably be interpreted or construed as surviving the completion, expiration, termination or cancellation of this Agreement, shall survive the completion, expiration, termination or cancellation of this Agreement. + +13. Miscellaneous Provisions + + A. The parties to this Agreement are independent contractors with requisite corporate power and authority to enter into this Agreement and carry out the transactions contemplated hereby. Neither party is a ABW or representative of the other party. Neither party shall have any right, power or authority to enter into any agreement for or on behalf of, or incur any obligation or liability of, or to otherwise bind, the other party. This Agreement shall not be interpreted or construed to create an association, joint venture or partnership between the parties or to impose any partnership obligation or liability upon either party. + + B. Any notice, approval, request, authorization, direction or other communication under this Agreement shall be given in writing and shall be deemed to have been delivered and given for all purposes, (i) on the delivery date if delivered personally to the party to whom the same is directed, or (ii) three business days after the mailing date, whether or not actually received, if sent by registered U.S. mail postage and charges prepaid, to the address of the party to whom the same is directed as set forth in the introductory paragraph of this Agreement. Either party may change its address specified above by giving the other party notice of such change in accordance with this Section 13.B. + + All notices delivered to ABW shall be delivered to the address above, attention: + + Harry Simpson AB Watley + + C. The failure of either party to insist upon or enforce strict performance by the other party of any provision of this Agreement or to exercise any right under this Agreement shall not be construed as a waiver or relinquishment to any extent of such party's right to assert or rely upon any such provision of right in that or any other instance; rather, the same shall be and remain in full force and effect. + +14. Entire Agreement + + A. As used herein, the term "Agreement" includes any written amendments, modifications or supplements made in accordance herewith. + + B. ABW and PCQ acknowledge that they have read this Agreement, understand + +Source: PCQUOTE COM INC, S-1/A, 7/21/1999 + + + + + +it, and agree to be bound by its terms and further acknowledge and agree that it constitutes the entire agreement of the parties hereto and supersedes all other proposals, oral or written, and all other communications between the parties relating to the subject matter hereof and this Agreement may not be modified or terminated orally. No amendment to this Agreement shall be effective unless it is in writing and signed by duly authorized representatives of both parties. + +IN WITNESS WHEREOF, the parties hereto hereby execute this Agreement. + +AGREED TO: + +PC QUOTE, INC. + +By: /s/ Richard F. Chappeto ----------------------------- Name: Richard F. Chappeto Title: Vice President Date: 10-11-96 ---------------------------- + +A.B. WATLEY, INC. + +By: /s/ Steven Malin ------------------------------ Name: Steven Malin ---------------------------- Title: Director --------------------------- Date: 10-11-96 ---------------------------- + +SCHEDULE A TO THE CO-BRANDING AGREEMENT BETWEEN PC QUOTE, INC. AND A.B. WATLEY, INC. DATED OCTOBER 11, 1996 + +SCHEDULE OF SERVICES AND FEES + +[***] + +By: PC Quote, Inc. By: A.B. Watley, Inc. + +/s/ Richard F. Chappeto /s/ Steven Malin - -------------------------------- ------------------------------- + +Source: PCQUOTE COM INC, S-1/A, 7/21/1999 \ No newline at end of file diff --git a/full_contract_txt/PcquoteComInc_19990721_S-1A_EX-10.11_6377149_EX-10.11_Co-Branding Agreement2.txt b/full_contract_txt/PcquoteComInc_19990721_S-1A_EX-10.11_6377149_EX-10.11_Co-Branding Agreement2.txt new file mode 100644 index 0000000000000000000000000000000000000000..b41021722a13bc46a8cd4f25481c0bad116dbf2f --- /dev/null +++ b/full_contract_txt/PcquoteComInc_19990721_S-1A_EX-10.11_6377149_EX-10.11_Co-Branding Agreement2.txt @@ -0,0 +1,19 @@ +[LOGO] + +AMENDMENT TO SECTION 2, PART B OF THE CO-BRANDING AGREEMENT + +This amendment to Section 2 (titled "Term"), Part B of the Co-Branding Agreement is made effective December 9, 1996 by and between PC Quote, Inc. (hereinafter referred to as "PCQ") and A.B. Watley, Inc. (hereinafter referred to as "ABW"), who are also the parties contracted in the aforementioned Co-Branding Agreement. This Amendment shall apply to said PCQ and ABW and all of their subsidiaries and related companies. + +[***] + +Source: PCQUOTE COM INC, S-1/A, 7/21/1999 + + + + + +AGREED TO BY: + +/s/ Steven Malin /s/ Howard Meltzer - -------------------------- --------------------------------- A.B. Watley, Inc. PC Quote, Inc. Mr. Steven Malin Mr. Howard Meltzer Director President Date: 12/5/96 Date: 12/12/96 -------------- ---------------- + +Source: PCQUOTE COM INC, S-1/A, 7/21/1999 \ No newline at end of file diff --git a/full_contract_txt/PcquoteComInc_19990721_S-1A_EX-10.11_6377149_EX-10.11_Co-Branding Agreement3.txt b/full_contract_txt/PcquoteComInc_19990721_S-1A_EX-10.11_6377149_EX-10.11_Co-Branding Agreement3.txt new file mode 100644 index 0000000000000000000000000000000000000000..52306b13f48267a2baf148db4c1e76116d128217 --- /dev/null +++ b/full_contract_txt/PcquoteComInc_19990721_S-1A_EX-10.11_6377149_EX-10.11_Co-Branding Agreement3.txt @@ -0,0 +1,45 @@ +[LOGO] + +SECOND AMENDMENT TO CO-BRANDING AGREEMENT + +THIS SECOND AMENDMENT TO CO-BRANDING AGREEMENT (this "Amendment") is made and entered into, effective for all purposes and in all respects as of the 23rd day of February, 1998, by and between PC QUOTE, INC., with its principal place of business at 300 South Wacker Drive, Chicago, Illinois 60605 ("PCQ") and A.B. Watley, Inc., with its principal place of business at 33 West 17th Street, New York, New York 10011 ("ABW"). + +WHEREAS, PCQ and ABW have executed that certain Co-Branding Agreement dated October 11, 1996, as amended on December 10, 1996 (as so amended, the "Agreement"); + +WHEREAS, the parties hereto desire to further amend the Agreement to modify the provisions of the Agreement regarding [***] of the term thereof; and + +WHEREAS, the parties hereto desire to set forth herein the terms and conditions of their agreements and understandings with respect to the foregoing. + +NOW, THEREFORE, in consideration of the foregoing, of the mutual promises for the parties contained herein and of other good valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending legally to be bound, hereby covenant and agree as follows: + +1. The preamble hereto is incorporated herein and, by this reference, is made a substantive part hereof. + +2. The text of Section 2. A. and B. of the Agreement is hereby deleted in its entirety and the following language is inserted in its stead: + +[***] + +3. To the extent, if any, that provision of this Agreement conflicts with or differs from any provision of the Agreement, such provision of this Second Amendment shall prevail and govern for all purposes and in all respects. + +4. Except as modified hereby, the Agreement and its terms and provisions are hereby ratified and confirmed for all purposes and in all respects. + +5. This Second Amendment may be executed in several counterparts, each of which shall be deemed an original but all of which collectively shall constitute the same instrument. + +Source: PCQUOTE COM INC, S-1/A, 7/21/1999 + + + + + +IN WITNESS WHEREOF, the undersigned parties have hereunto affixed their signatures and seals as of the day and year first above written. + +PC QUOTE, INC. + +By: /s/ Scott Clyde ------------------------ Name: Scott Clyde ---------------------- Title: VP -------------------- + +A. B. WATLEY, INC. + +By: /s/ Robert Malin ------------------------ Name: Robert Malin ---------------------- Title: President -------------------- + +-2- + +Source: PCQUOTE COM INC, S-1/A, 7/21/1999 \ No newline at end of file diff --git a/full_contract_txt/PelicanDeliversInc_20200211_S-1_EX-10.3_11975895_EX-10.3_Development Agreement1.txt b/full_contract_txt/PelicanDeliversInc_20200211_S-1_EX-10.3_11975895_EX-10.3_Development Agreement1.txt new file mode 100644 index 0000000000000000000000000000000000000000..7c3987f1db08d65016cb8d5bc3f4d40837168445 --- /dev/null +++ b/full_contract_txt/PelicanDeliversInc_20200211_S-1_EX-10.3_11975895_EX-10.3_Development Agreement1.txt @@ -0,0 +1,121 @@ +SeattleSoftwareDevelopers + +SOFTWARE DEVELOPMENT AGREEMENT + +PELICAN DELIVERS iOS APPLICATION ENHANCEMENTS & WEB APPLICATION DEVELOPMENT PHASE 1 4 102nd Ave NE Suite 300 Bellevue, WA 98004 (425) 256-2815 julian@seattlesoftwaredevelopers.com www .seattlesoftwaredeveIopers.com + +1 + +Source: PELICAN DELIVERS, INC., S-1, 2/11/2020 + + + + + +STATEMENT OF WORK - APPENDIX A This Statement of Work is issued to and made part of that Software Development Agreement executed by and between Developer and Client on the Effective Date (the Agreement). Any word or phrase not otherwise defined in this Appendix will have the meaning ascribed in the Agreement. + +1. Project Overview The purpose of this project is to develop additional features for the Pelican Delivers software. This includes POS integration, Google Maps API, payment processing features, ID verification, reporting, driver app improvement and workflow, and a front facing web application for customers to find, order, and receive products via deliver or pickup. + +2. Specifications Number of applications included in Phase 1:1 Tech Stack: iOS (Objective - C or Swift), PhP, MySQL, AWS Hosting, jQuery, and JavaScript language: English Design: Custom to client + +2 + +Source: PELICAN DELIVERS, INC., S-1, 2/11/2020 + + + + + +3. Delivery Schedule Based on the current requirements and this SOW, Seattle Software Developers estimates that this project will take around six [4] months of development, testing, and deployment. This estimate may change depending on unforeseen circumstances or requirements. We estimate that the website (Customer Portal) will take 3 months to complete because this will be the priority. + +4. Fee Payment Schedule Fees: The Fees for the Project shall be $279,000.00 Payment Schedule: Client shall pay Developer: 20% Deposit ($55,800.00) to be paid at the start of the project. 20% ($55,800.00) to be paid upon completion of Milestone #1. 20% ($55,800.00) to be paid upon completion of Milestone #2. 20% ($55,800.00) to be paid upon completion of Milestone #3. 20% ($55,800.00) to be paid upon completion of Milestone #4. + +*Milestone Delivery Schedule for Phase 1 + +Milestone #1 -January 1st, 2019 Milestone #2- February 1st, 2019. Milestone #3 - March 1st, 2019. Milestone #4 - April 1st, 2019. + +3 + +Source: PELICAN DELIVERS, INC., S-1, 2/11/2020 + + + + + +5. Statement of Work Website (Customer Portal) Users will be able to go to the Pelican Delivers front-end website and easily search, browse, and order cannabis. Before a user can gain access to the website, they must first verify their birthday (users must be 21 and over to even view the website). · Header o There will be a header with a few basic informal menu items such as Home, How It Works, Features, etc. o To the very right there will be a Login/ Signup button and My Cart · Login / Signup o This will prompt the user to either Login or Signup for a new account o Login will ask the user for their email ID and password § If users have forgotten their password, they can click the "Forgot Password" link which will provide them with a recovery email · New users can select Sign-up and go through the quick and easy sign-up process. The application will ask for the user's: § Email § Password / Confirm Password § First Name § Last Name § Phone Number § Birthday · Profile o After the user logs in they can view their profile which will allow them to: § Edit their profile information § Add and verify their ID § Add delivery addresses § Select current delivery address o Users shall also be able to add their payment information § This is where the application will use Daily Pay and link to the customers bank · My Orders o Users can view their open orders, processing orders, in progress orders, and delivered § Open order - Customer has clicked checkout but has not paid, app is searching for drivers to fulfill the order. + +4 + +Source: PELICAN DELIVERS, INC., S-1, 2/11/2020 + + + + + +§ Processing order - A driver has accepted the delivery request and the dispensary has been alerted to prepare the products for pickup. Payment has been successfully submitted by the customer. § In progress order -The driver has purchased the product from the vendor and is now on the way to delivering the product to the customer. § Delivered order -The driver has delivered the product to the customer and the customer has confirmed receipt of the order. o Users can also access their history and re-order the same products from a dispensary. This feature clears their current cart and populates it with the products from the previous order. · Search o The search bar will be powered by Google Maps o Search results will vary depending on the user's current delivery address in their profile or they can search another address in the search field o Results can be viewed in either a "Map View" or a "List View" o The only dispensaries that will be displayed are ones that can delivery to that address and are open. Closed stores will be displayed at the bottom of the screen and be grayed out o Results will have the dispensaries logo, name, address, phone number, and open hours · Selecting Dispensary o When users select a dispensary, they'll be able to search for products, navigate through categories, view products details (farm, THC, CBD, etc.), and change the size of the item o To order a user can hover over the item and click "Add to Cart" o Once a product has been added to cart, the "My Cart" in the header will update o By going to "My Cart" users can check-out and pay · Payment o Users will pay by linking their bank accounts via Evergreen Gateway o Account information will be stored and used for future orders o Once payment is confirmed users may proceed to completing their order · Age / ID Verification o After payment is confirmed users must upload their government issued ID and a selfie o Trulioo will verify if the issued ID is valid and if the selfie matches the ID o Once verification is completed the user will be able to complete the order · Check out o If customer ID has been verified and the customer's cart is confirmed, the application will search for nearby drivers. § If a driver is found, the driver can either accept of decline the order · Drivers will be notified one at a time (queue system), with the river closest to the dispensary being notified first, then the next driver, etc. · Each driver will have a set amount of time (e.g. 10 seconds) to accept or reject the order, or the order will automatically be rejected by time and the lack of response will be recorded for future reference/internal driver ranking in the future. § If the driver accepts, the dispensary will be notified of the order § If the driver declines, the application will look for another drive + +5 + +Source: PELICAN DELIVERS, INC., S-1, 2/11/2020 + + + + + +o If no drivers are found, users will not be charged and will have the option to pick up the order in-store or browse for a new dispensary o If an order is accepted the dispensary will begin preparing the product for the driver to pick up o Customers will receive updates on the status of their order via SMS, email, or website Dispensary Portal Before dispensaries can access their account, they must provide the owners first and last n me, email, phone number, OBA, License Number, and upload a picture of their license. This process can be submitted manually or through an online form. Once Pelican verifies all their information, Pelican administrators can authorize the dispensaries account and the dispensary will be given credentials to access the dispensary portal. The application will have a database of business and license information provided by Pelican to help automate the verification process, however Pelican administrators must still manually authorize new dispensaries. · POS System o The application will tie into the dispensaries POS system and pull the inventory, product details, price, and quantity o The application will pull data from the POS system once every 1-2 hours o If a product is low, it will not be displayed on the front-end website or mobile apps § The low quantity can be defined by the dispensary § Ability for dispensary owner to input Username and Password for PO system connection using the Greenbits login to authenticate and connect. · Notifications o The application will notify dispensaries when an order comes through via § Email § Portal Notification § New orders will be listed at the top of the list · Orders o Dispensaries will be able to view the status of an order. New orders will be at the top of the list. The order will either be for pickup or delivery. § If the order is for pick up the dispensary just needs to prepare the order and wait for the customer to arrive § If the order is for delivery the dispensary will prepare the order and view the driver associated to that order § Once the driver comes in to pay and pick-up the order the dispensary ill verify the driver by matching the order ID and having the driver release funds for the purchase § After funds have been released the status of the order will be automatically updated and the dispensary the driver will begin delivering the product to the customer + +6 + +Source: PELICAN DELIVERS, INC., S-1, 2/11/2020 + + + + + +o Dispensaries can run basic reports on orders § Products § Dates § Product / Product Details § Quantity § Product Size § Delivery Address I City § Revenue · Products o Products will be populated by pulling inventory from POS system § Script will run every 1-2 hours to update the inventory o Have the ability to associate multiple images to products Admin Portal · Verifications o Admins will manually verify new dispensaries that sign-up by reviewing their uploaded documents § Once verified they can select "Approved" and that will grant the dispensary access to the portal · If accepted, it will send an automated email to the dispensary notifying them § Admins can decline the application. · If declined it will send an automated email to the dispensary notifying them o Driver ID and License verification § Driver applications displayed here with uploaded licenses · Drivers will have to fill out and upload a 1099 or w-9 tax document. · Once all documents are verified a green check mark next to "background check" will appear · Reports Reports will be very basic for phase 1. Seattle Software Developers will try their best to complete the following features in Phase 1 but will not be penalized if they are pushed to Phase 2. o Dispensary orders by history/volume over custom time periods o Order Details broken down by dispensary o Driver transaction history · User management o User creation/management for dispensaries, drivers and customers, including viewing basic profile information and password resets. o Ability to add funds to driver, dispensaries and customers to their Pelican accounts. + +7 + +Source: PELICAN DELIVERS, INC., S-1, 2/11/2020 + + + + + +Back-end Development · Evergreen Gateway o Customer payments go into Evergreen Gateway o Payments are distributed from Evergreen Gateway via Daily Pay to drivers and dispensaries · Daily Pay o Customer orders the product and pays Pelican through Evergreen Gateway. o Payment is held in Pelican's escrow account in Evergreen Gateway. o Order goes into a pending / processing status. o When the driver goes to pick up the product, he/she brings up the order and hits "release funds" in the phone after verifying the order. o The money goes to the dispensaries Daily Pay account, and they can withdraw from the Evergreen Gateway accounts through the daily pay application / APL o When the driver delivers the order and customer acknowledges order received, then the driver and Pelican get paid. o Stores and Drivers will both have Daily Pay accounts tied to their bank accounts. o Driver will scan the customers ID using the Trulioo API right before they handle the delivery to the customer. After this last ID check, the transaction will be completed. · Trulioo o Will be used to verify government issued IDs o Compare and match users ID with selfie's o Make sure users are of age · Twilio o Will be used for client to customer communication during an order · Payouts, Subscription fees, flat fees, commissions fees § Commission fees - 25% commission on delivery orders. Admin will have the ability to change the % or fee based on dispensary § Flat fees - $1 in store pickup orders through the app or website § Subscription Fee - $500 a month subscription per store · Top sponsors will pay $750 instead of $500 § Withdrawing Fee - $1 fee added to the existing daily pay fees § Delivery fee - 20% of delivery fee will go to Pelican. 80% will go to driver · Integrating with Dispensaries POS system o Dispensaries menu should be searchable for web. o Spider / crawling SEO o Only working on integrating with Greenbits for phase 1 · State Module - Creating state rules o Legal age to purchase o State is recreational or medical or both o Purchase limits - how much product can a customer purchase at a time + +8 + +Source: PELICAN DELIVERS, INC., S-1, 2/11/2020 + + + + + +o If Medical Marijuana State - we will need an upload feature for customers to upload their medical marijuana recommendation (no medical orders will be allowed in phase 1) · Dispensary Sign Up o When new retail shops sign up, they will have a list of available zip codes o Only one dispensary per zip code will be allowed o Once a zip code is claimed it will not be available until that dispensary stops he monthly fee or gets removed from the system Driver Companion App (iOS) The driver companion app will be available on the iOS platform for Phase 1 but will eventually be made available on Android. The companion app will allow drivers to signup, become authenticate and authorized by Pelican, create/link their payment accounts, view orders, choose to confirm orders, navigate to dispensaries/customers, and view order histories. Ability to "Start" and "End" shift. Makes driver active or inactive. · Login / Signup o This will prompt the driver to either Login or Signup for a new account o Login will ask the drivers for their email ID and password § If drivers have forgotten their password, they can click the "Forgot Password" link which will provide them with a recovery email o New drivers can select Sign-up and go through the quick and easy sign-up process. The application will ask for the user's: § Email § Password / Confirm Password § First Name § Last Name § Phone Number § Birthday § Driver's License § Car License Plate # § Car Make/Model and photo § Driver Photo § Upload car insurance paperwork · Profile o After the driver logs in they can view their profile which will allow them to: § Edit their profile information § Change Password § Submit vehicle change information § Set Delivery Radius (open orders within this radius will be shown to the driver) § Drivers can also add their bank account information and withdraw Daily Pay funds + +9 + +Source: PELICAN DELIVERS, INC., S-1, 2/11/2020 + + + + + +· Delivery Info o Drivers can view Open Orders within their radius and select them for deliver § Time estimates will come based on Google API § Once a driver has selected an Open Order and the customer has completed the purchase, the Order changes to Processing Order and allows the Driver to navigate to the Dispensary. § After arriving at the dispensary, driver can press "Order Pickup", which signals the driver has purchased the product from the dispensary. § Driver can then navigate to the customer for product delivery, customer can view driver's eta based on their location and Google navigation results. § If the driver has any issues with product pickup or delivery, they can contact the customer via SMS (using Twilio API) § Upon arrival at customer location, driver must verify customer identity by taking a picture of/scanning the customer's ID. Once the customer's ID is verified and the product is delivered, the customer must confirm receipt of the product for the order to be considered complete. · Delivery History o Drivers will be able to view their previous deliveries + +10 + +Source: PELICAN DELIVERS, INC., S-1, 2/11/2020 + + + + + +7. Acknowledgement by Client Client agrees to the terms of the Statement of work Appendix A hereto attached and acknowledges receipt of a copy of this Agreement. IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date. Acceptance by Developer SEATTLE SOFTWARE DEVELOPERS, Inc. By: /s/ Julian Valentine Julian Valentine, VP + +Acceptance by Client: PELICAN DELIVERS INC. By: /s/ Dave Comeau Dave Comeau, Shareholder + +11 + +Source: PELICAN DELIVERS, INC., S-1, 2/11/2020 \ No newline at end of file diff --git a/full_contract_txt/PelicanDeliversInc_20200211_S-1_EX-10.3_11975895_EX-10.3_Development Agreement2.txt b/full_contract_txt/PelicanDeliversInc_20200211_S-1_EX-10.3_11975895_EX-10.3_Development Agreement2.txt new file mode 100644 index 0000000000000000000000000000000000000000..9ad29db882b4f4b95f21b04d0eee69a584d59039 --- /dev/null +++ b/full_contract_txt/PelicanDeliversInc_20200211_S-1_EX-10.3_11975895_EX-10.3_Development Agreement2.txt @@ -0,0 +1,165 @@ +SOFTWARE DEVELOPMENT AGREEMENT THIS SOFTWARE DEVELOPMENT AGREEMENT (Agreement ) is made December 3rd, 2018 (the Effective Date) by and between DOT COM LLC, OBA Seattle Software Developers, a Delaware limited liability company (Developer ), and (Client) Pelican Delivers Inc. for the performance of software design services and software development as detailed herein (Developer and Client are individually referred to herein as a Party, and collectively as the Parties). + +1. Term Unless otherwise provided herein, this Agreement will commence on the Effective Date and continue through the completion or termination of Developer's services and work product as mutually agreed upon between the Parties (the Project). + +2. Statement of Work Developer will design, develop, and deliver, satisfactory to Client, the "Pelican Delivers Application Phase 1" (collectively, the Subject Program), and all elated Project services (collectively, the Services), Project work product (collectively, the Deliverables), and user manuals and other written material that describe he functionality or assist in the use of the Subject Program (collectively, the Documentation), pursuant to the Project specifications detailed in the SO (collectively, Specifications), as described in the enclosed statement of work (the SOW; as provided in APPENDIX A hereto). The Parties may execute multiple SOWs should there be multiple or separate Projects. In the event of any conflict or inconsistency between the terms of this Agreement and any SOW, the terms of this Agreement will control. + +3. Delivery Schedule; Acceptance; Change Orders 3.1 DELIVERY SCHEDULE; MILESTONES Each SOW will include a delivery schedule for Services and Deliverables (the Delivery Schedule) that will identify mutual agreed upon Project time deadlines concerning the performance of Services, delivery of Deliverables, Client testing of the same (collectively, Milestones), as well as a final Subject Program delivery date (Final Delivery Date). + +12 + +Source: PELICAN DELIVERS, INC., S-1, 2/11/2020 + + + + + +3.2 PROJECT DELIVERY AND INSTALLATION As detailed in a SOW hereto, Developer will provide certain Services, Deliverables and Documentation to Client upon a designated Milestone in accordance with such Milestone's specific Specifications (collectively, Specific Specifications). Prior to completing a Milestone, Developer will: (a) inform Client of the availability of each portion of a Deliverable otherwise required be delivered by such Milestone date for testing by Client (he Acceptance Test Date); and (b) deliver to Client sue Deliverable (each a Milestone Deliverable) including the source code and object code form compatible with the platform(s) described in the SOW for such Milestone Deliverable. 3.3 ACCEPTANCE AND BETA TESTS Within the time periods designated in the SOW, Client shall perform any tests or evaluation of the Subject Program (collectively, the Acceptance Tests) after the Acceptance Test Date, to determine whether each Deliverable: (a) conforms to the SOW; and (b) performs repetitively on an appropriate variety of data and platforms, without failure, as more fully described in the Specifications. Upon completion of II Deliverables, the Acceptance Tests shall be performed on the Subject Program in its entirety in order to determine whether the Subject Program (i) meets the Specifications and (ii) operates with internal consistency. 3.4 ACCEPTANCE OF MILESTONE DELIVERABLE; CHANGE REQUESTS Client will notify Developer in writing of any failure of a Milestone Deliverable to comply with the Specifications, or of any other objections, corrections, changes or amendments required (a Change Request), within ten (10) days of such Milestone's Acceptance Test Date. Any Change Request shall be sufficient to identify, with clarity, any objection, correction, change or amendment to such Milestone Deliverable. In the absence of a Change Request from Client within the time periods detailed herein, the Milestone Deliverable will be deemed accepted by Client. 3.5 REJECTION OF MILESTONE DELIVERABLE If any Milestone Deliverable does not satisfy the Client's Acceptance Test and Client provides Developer a Change Request concerning the same, Developer will have twenty (20) days from the receipt of such Change Request to correct the deficiencies, errors, corrections, modifications, bug- fixes or changes to the Deliverables as identified in the Change Request. Upon Client's receipt of a Milestone Deliverable following Developer's modification pursuant to Change Request (a Modified Deliverable), Client will have five (5) days to inspect, test and reevaluate such Modified Deliverable to determine acceptance. If Client does not notify Developer of any further failures, objections, changes, defects, or bugs in such Modified Deliverable, the Modified Deliverable will be deemed accepted by Client. + +13 + +Source: PELICAN DELIVERS, INC., S-1, 2/11/2020 + + + + + +3.6 FAILURE OF DEVELOPER TO CORRECT DEFECTS Should Developer reasonably fail to meet the requirements of Section 3. or Section 3.5 of this Agreement such that a Milestone Deliverable or Modified Deliverable does not satisfy Client's reasonable acceptance criteria within the time periods set forth in the same, Client will have the option of: (a) repeating the procedures set forth in Section 3.4 or Section 3.5 Above; or (b) terminating this Agreement pursuant to Section 8 of this agreement. 3.7 FINAL DELIVERABLE AND SUBJECT PROGRAM TESTING Notwithstanding anything contained herein, upon completion of the Final Deliverable set out in the Specifications thereto, Client will perform Acceptance Test on the Subject Program within fifteen (15) calendar days from the Acceptance Test Date in order to determine whether the Subject Program satisfies the acceptance criteria and operates with internal consistency. If the completed Subject Program does not satisfy the Client's Acceptance Tests and Client provides Developer a Change Request concerning the same, Developer will have fifteen (15) calendar days from the receipt of such Change Request to correct the deficiencies errors, corrections, modifications, bug-fixes or changes. Client shall then have ten (10) additional days to inspect, test and reevaluate the completed and modified Subject Program or Final Deliverable. If the Subject Program or Final Deliverable still does not satisfy the Client's acceptance criteria and/or the Acceptance Tests, Client shall have the option of either: (a) repeating the procedure set forth above; or (b) terminating this Agreement pursuant to Section 12 of this Agreement . If the Client does not notify the Developer of any further failures, objections, changes, or other defects, or bugs of or in the Subject Program via a Change Request, Client will be deemed to have accepted the Subject Program. 3.8 CLIENT ASSISTANCE Client shall provide Developer assistance to complete the Services, and produce the Deliverables, as reasonably requested, including but not limited to providing the necessary information or documentation required from Developer for the development of the Subject Program. Client shall conduct all Acceptance Tests in good faith and shall not delay any acceptance of any Service or Deliverable without reasonable justification. The evaluation of any Service or Deliverable for any Acceptance Test will be based on material compliance with applicable Specifications and Client shall not arbitrarily withhold acceptance of any Milestone Deliverable or Subject Program. 3.9 DEVELOPER DUTIES FOR ACCEPTANCE TESTS Unless otherwise agreed by the Parties in writing, regardless of the acceptance or rejection of any Milestone Deliverable, Developer shall continue to perform all Services and deliver all Deliverables in accordance with the Delivery Schedule. Developer shall use its best efforts to make any necessary corrections, modifications, bug-fixes, or other changes promptly to complete the Services and Deliverables by the Final Delivery Date. + +14 + +Source: PELICAN DELIVERS, INC., S-1, 2/11/2020 + + + + + +4.10 CLIENT TERMINATION SERVICES If elected pursuant to the Agreement, Developer will provide Client Termination Assistance Services at an hourly rate of $[125.00 per hour]. + +4. Change Orders Sometimes during the term of this Agreement change order may or may not be requested by Client. However, If Client requests that Developer provide any additional Services or Deliverables or functionalities beyond those detail d in an applicable SOW, or requests a modification or change to any of the Services or Deliverables if possible, client will: (A) Submit to Developer, by means of a written order, all requests r additional services that alter, amend, enhance, add to, or delete any of the Services or Deliverables (a Change Order); (B) Developer will evaluate each Change Order, and within five (5) days of its receipt, will provide Client with (i) the change in Fee costs as a result of the Change Order, (ii) the impact, if any, of the Change Order on an aspect of the Delivery Schedule including any Milestone Date, Acceptance Test Date, or the Final Delivery Date, and (iii) the availability of Developer' resources to carry out the additional requested services detailed in the Change Order; (C) If Developer agrees to carry out the proposed Change Order, the Parties will execute an amended SOW or Change Order reflecting the Service and Deliverable changes; (D) Upon duly executing an amended SOW or executed Change Ord r, Developer will begin performance in accordance with the same. Developer has no obligation to perform any additional services before receiving the duly- executed amended SOW or executed Change Order, and Client has no obligation to pay Developer any Fees for services performed pursuant to an amended SOW or Change Order before the same; and (E) Once fully completed and executed, each amended SOW or Change Order will be deemed to be incorporated into and be part of this Agreement and will constitute a formal amendment to this Agreement. + +15 + +Source: PELICAN DELIVERS, INC., S-1, 2/11/2020 + + + + + +5. Payment 5.1 FEES AND EXPENSES Client will pay fees to Developer for Project Services and Deliverables as Described in the SOW (the Fees). Developer will pay its own expenses for the Project (collectively, the Expenses) unless stated otherwise in the SOW. 5.2 FEES AND EXPENSES All Fees shall be due pursuant to the Fee payment schedule provided in a SOW hereto (the Fee Payment Schedule). Client's failure to remit payment to Developer for Fees due and owning will constitute a material breach of this Agreement. 5.3 BONUS If Developer completes the Services, and delivers the Deliverables, as reasonably accepted by Client, upon a date prior to the Final Delivery Date as specific in a SOW hereto, Client will pay Developer a bonus Fee in the amount detailed in the applicable SOW (the Bonus). 5.4 PAYMENT Client shall pay Fees, Expenses (if any), and any Bonus to Developer via w re to Developer's bank account at: Chase Bank 1955 156th Avenue NE Bellevue, Washington 98007 425-590-4010 Routing: 325070760 Account :676313880 + +16 + +Source: PELICAN DELIVERS, INC., S-1, 2/11/2020 + + + + + +6. Intellectual Property 6.1 WORK MADE FOR HIRE AND ASSIGNMENT OF RIGHTS Except as otherwise detailed in this Agreement, the Parties acknowledge and agree that the Subject Program including without limitation the Deliverables and Documentation (collectively, the Works) are "work made for hire" in accordance with the U.S. Copyright Act, 17 U.S.C. § 101 et seq. Accordingly, Client will be the copyright author and owner of all of the Works. To the extent permissible, Developer hereby assigns and transfers to Client all copyright and other intellectual property ownership in the Works. Developer agrees to assist Client, as well as execute any documents reasonably necessary, to perfect the assignment of such rights to Client. Developer acknowledges and agrees that the payment of Fees and a Bonus (if any), as referenced in Section 5 of this Agreement, shall be the full consideration to Developer for the assignment of rights herein. Upon payment in full of all obligations hereunder, Developer unconditionally and irrevocably grants to Client all software, improvements, code and other work produce produced by the Developer during the course of this agreement. The code shall be the sole and exclusive property of the Client. 6.2 DEVELOPER'S INTELLECTUAL PROPERTY Notwithstanding the provisions of Section 6.1 of this Agreement, the Par acknowledge and agree that: (a) Developer may use its proprietary information software (collectively, Developer Technology) in providing Services, and Deliverables, to Client; and (b) Developer shall retain full ownership over its Developer Technology. If Developer uses any of its Developer Technology in any of the Works, Client will: (i) not acquire any proprietary or ownership rights to any of Developer Technology by virtue of this Agreement; and (ii) agree not to market or use any Developer Technology as an independent "stand-alone" program without the prior written consent of Developer. 6.3 LICENSE TO CLIENT'S INTELLECTUAL PROPERTY To assist Developer to complete all Project-related Services and deliverable Deliverables to Client in a complete and timely manner, Client shall provide Developer access and licensed rights to the following as necessary to complete the Project: (a) text, software, graphics, photos, sounds, music, videos, designs, compilations, magnetic translations, digital conversion interactive features and the like (collectively, the Content); (b) any trademarks, service marks, trade dress and logos, whether owned or licensed by Client (collectively, the Marks); and (c) any know-how, methodologies, equipment, or processes used by Client in its operations {collectively, the Procedures); and (d) Client's Confidential Information (as defined below). As such, Client hereby grants Developer a royalty-free, worldwide, license to use its Content, Marks, Procedures and Confidential Information in order to complete the Project. Client hereby acknowledge and agrees that Client waives all moral rights to be identified as the author on any and all material or content identified under this subsection of this Agreement. + +17 + +Source: PELICAN DELIVERS, INC., S-1, 2/11/2020 + + + + + +6.4 CONFIDENTIALITY AND NON-DISCLOSURE 6.4.1 Confidential Information. Each Party acknowledges and agrees that it will receive confidential information and trade secrets from the other Party in otherwise carrying out the actions contemplated by this Agreement (collective, Confidential Information). Confidential Information does not include information at: (a) is available to the public or that becomes available to the public through no act or failure to act by the receiving Party (Receiving Party); (b) is known to the Receiving Party prior to the date of disclosure by the disclosing Party (Disclosing Party), unless the Receiving Party agreed to keep such information in confidence at the time of receipt of the information; (c) is properly obtained hereafter from a source that is not under an obligation of confidentiality with respect to such information; or (d) is developed independently by the Receiving Party without reference to or use of the Disclosing Party's Confidential Information. 6.4.2 Non-Disclosure. Neither Party shall use or disclose Confidential Information of the other Party to any third party, without the written consent of the Disclosing Party of such Confidential Information. Receiving Party agrees to undertake reasonable measures to maintain and preserve the Confidential Information of the Disclosing Party in confidence, which measures shall be no less than the measures taken by the Receiving Party to protect its own confidential information and in no vent shall be less than reasonable care. Upon expiration or termination of this Agreement, Receiving Party will immediately destroy or erase all copies of documents or materials containing any Confidential Information provided by Disclosing Party and, upon the Disclosing Party's request, promptly confirm destruction of same by signing and returning to the Disclosing Party a certificate of destruction reasonably satisfactory to the Disclosing Party. 6.4.3 Derivatives. All Confidential Information, and any Derivatives thereof whether created by Client or Developer, remain the property of the Disclosing Party and no license or other rights to any Confidential Information or Derivatives is granted or implied hereby. For purposes of this Agreement, Derivatives shall mean: (a) for copyrightable or copyrighted material, any translation, abridgment, revision or other form in which an existing work may be recast, transformed or adapted ;(b) for patentable or patented material, any improvement thereon; and (c) for material which is protected by trade secret, any new material derived from such existing trade secret material, including new material which may be protected under applicable copyright, patent, or trade secret law. 6.4.4 Notification of Suspected Disclosure. The Receiving Party further agrees to immediately notify Disclosing Party of any actual or suspected misuse misappropriation, or unauthorized disclosure of Confidential Information, which may come to Receiving Party's attention. + +18 + +Source: PELICAN DELIVERS, INC., S-1, 2/11/2020 + + + + + +6.4.5 Injunctive Relief for Breach. Because of the unique nature of the Confidential Information and other elements of the Parties business relationship, the Parties acknowledge and agree that a breach of any of the provisions of Section 6 of this Agreement by Receiving Party will irreparably harm the Disclosing Party. Accordingly, in the event of a breach or threatened breach of Section 6 of this Agreement, Disclosing Party will be entitled to seek injunctive relief to enforce the terms of Section 6 of this Agreement without the necessity of posting a bond or if a bond is required, at the minimum amount legally required. + +7. Parties Relationship 7.1 INDEPENDENT CONTRACTOR Developer is undertaking the services set forth in this Agreement as an independent contractor, working at Developer's own hours and using Developer's own equipment and at Developer's own chosen place of work, with discretion concerning the revision of Services and Deliverables within Client's general direction. Nothing contained in this Agreement will be construed to constitute the Parties as partners, employees, agents or joint ventures of each other. No Party will have the authority to bind the other Party in any respect. 7.2 NON-EXCLUSIVITY Subject to the terms and conditions herein, the Parties expressly acknowledge that this Agreement does not create an exclusive business relationship between the Parties. Subject to the terms and conditions herein, Developer shall be entitled to offer and provide software design and development services to third parties solicit other clients and otherwise advertise its services. + +8. Taxes Developer acknowledges and agrees that as an independent contractor, developer is responsible for the payment of such taxes and withholding on its income and activities as may be due under federal, state and local law and regulations. If appropriate, Developer will furnish Client with a Form 1099 or equivalent for the payments made to Developer. + +19 + +Source: PELICAN DELIVERS, INC., S-1, 2/11/2020 + + + + + +9. Warranties and Representations 9.1 CLIENT Client represents, warrants and covenants that: (a) Client is a duly organized, validly existing and in good standing (b) Client has the full right and legal author y to enter into and fully perform its duties and obligations under this Agreement; (c) Client owns all right, title, and interest in, or otherwise has full right and authority to permit Developer's use of Content, Marks, Procedures and Client's Confidential Information, as detailed in this Agreement; (d) is solely responsible for compliance with all federal, ate, and local laws, rules, regulations, executive orders, ordinances, standards, and best practices applicable to Client's business or industry; and (e) Client will comply with all federal, state, and local laws, rules, regulations, executive orders, ordinances, standards, and best practices applicable to Client's business or industry. + +10. Indemnification 10 1 CLIENT Client shall defend, indemnify and hold harmless Developer, its member owners, officers, employees, independent contractors and agents, from and against all losses, claims, liabilities or damages and any related costs and expenses, including attorneys' fees and costs arising out of, or in any way related to any claim or action against Developer arising out of or in any way related to: (a) Client's breach of this Agreement; (b) a breach of any agreement between Client and its clients or customer; (c) Client's gross negligence or willful misconduct; (d) Client's act or omission constituting a violation of applicable federal, state, local law or regulation; or (e) any claim made against Client asserting a violation of any third party right. 10.2 DEVELOPER Developer shall defend, indemnify and hold harmless Client, its members owners, officers, employees, independent contractors and agents, from and against all losses, claims, liabilities or damages and any related costs and expenses, including attorneys' fees and costs arising out of, or in any way related to any claim or action against Client arising out of or in any way related to: (a) Developer's material breach of his Agreement; (b) Developer's gross negligence or willful misconduct; (c) De eloper's act or omission constituting a violation of applicable federal, state, local law or regulation; or (d) any claim made against Client asserting a violation of any third party intellectual property right pertaining to the Subject Program. + +20 + +Source: PELICAN DELIVERS, INC., S-1, 2/11/2020 + + + + + +10.3 NON DISPARAGEMENT CLAUSE The Client and the Designer both agree to never to disparage or speak ill of the other party to anyone and or post negative or disparaging comments Online regarding any of the Designer's products, services, affiliates, subsidiaries, officers, directors, employees or shareholders, and will take reasonable steps to prevent and will not knowingly permit any of their respective employees or agents to, disparage or speak ill of such persons. For purposes of this Section, "disparage" shall mean any negative statement whether written or oral, about Seattle Software Developers, Inc., Dot Com LLC. and or any of its affiliates. The Client and Designer both agree not to post on defamatory websites or review websites any negative posts concerning each other, the names of our companies, and our employees. Both the Client and the Designer both agree and acknowledge that this non-disparagement provision is a material term of this Agreement, the absence of which would have resulted in the Company refusing to enter into this Agreement. Subject to the terms, conditions, express representations and warranties provided in this Agreement, Designer and Client both agree to indemnify, save and hold armless each other from any and all damages, liabilities, costs, losses or expenses arising out of any finding of fact which is inconsistent with Designer's representations and warranties made herein, except in the event any such claims, damages, liabilities, costs, losses or expenses arise directly as a result of gross negligence or misconduct of Client. + +11. Termination 11.1 TERMINATION WITHOUT CAUSE Either Party may terminate this Agreement at any time during the term of this Agreement for any reason upon two weeks written notice to the other Party. Upon termination of this Agreement for any reason: (a) all provision of Service and Deliverables by Developer will immediately cease; (b) Client will pay Fees or all Services and Deliverables provided by Developer to Client up to and including the ate of termination; and (c) in compliance with Section 6.1 of this Agreement, Developer will transfer all Works to Client as of the date of termination. 11.2 TERMINATION FOR CAUSE This Agreement may be immediately terminated by notice of the terminating Party upon: (a) the other Party's material breach of this Agreement and fails to cure such default within ten (10) calendar days after receipt of a notice of default from the terminating Party; (b) if Client fails to pay to Developer any undisputed Fees when du and fails to cure any such breach within ten (10) calendar days after receiving notice from Developer of such failure; (c) misappropriation or unauthorized disclosure of Confidential Information by the Receiving Party; or (d) the other Party engages in any act or omission that is determined to be illegal or in violation of any applicable law or regulation. + +21 + +Source: PELICAN DELIVERS, INC., S-1, 2/11/2020 + + + + + +11.3 OBLIGATIONS UPON TERMINATION If Client terminates this Agreement or any SOW for any reason, Client will pay Developer any Fees due and payable on the effective date of such termination or expiration, and Developer will refund to Client any non-accrued pre-paid Fees. In the event of a termination or expiration of this Agreement or any SOW for any reason, developer will, as requested by and at additional cost to Client, provide up to three (3) months of Fee billable assistance (collectively, the Termination Assistance Services) in transitioning from Developer to an alternative software service provider including, without limitation, the following: (a) knowledge transfer regarding the operation, use, and support of the subject Program; return of all documentation containing Content, Marks, Procedures a d Confidential Information in a format reasonably specified by Client and assistance with data migration to an alternative solution; and (c) any related additional services as requested by Client. Developer shall provide Termination Assistance Services to Client in a manner that does not interfere with, interrupt or degrade the Subject Program. The term of this Agreement or applicable SOW shall not be deemed to have expired or terminated until the Termination Assistance Services are completed. + +12. General 12.1 CHOICE OF LAW AND VENUE This Agreement will be governed by the laws of the State of Washington without regards for its conflict of laws principle. The Parties will conduct friendly negotiations to resolve any dispute arising from this Agreement, including mediation if requested by either Party. Should mediation fail, each party consents to the personal jurisdiction of the state and federal courts located in King County, Washington. If there is a dispute between the Parties relating to this Agreement, the Party substantially prevailing will be entitled to recover all costs and expenses of any subsequent proceeding (including trial, appellate, and arbitration proceedings), including reasonable attorneys' fees and costs incurred therein. + +22 + +Source: PELICAN DELIVERS, INC., S-1, 2/11/2020 + + + + + +12.2 NOTICE A notice required or permitted under this Agreement will be deemed given if in writing, and delivered by a Party in person, one (1) business day after being sent via overnight carrier, or three (3) business days after being sent by certified mail return receipt requested to the address set forth below, or such other address as may be supplied by either Party subsequently: If to Developer: SEATTLE SOFTWARE DEVELOPERS, INC 4-102ND AvenueNE, Suite 300 Bellevue, Washington 98004 IF to attorney: Copy to: Perkins Coie 1201 third avenue, Seattle, Washington 98101 Attn: LUCAS S. MICHELS, ESQ. + +If to Client: Pelican Delivers Inc. Dave Comeau 5452 Pineridge Drive Bremerton, WA 983 360-731-6611 + +12.3 SEVERABILITY If any provision of this Agreement is held by a court of law to be illegal, invalid or unenforceable: (a) that provision shall be deemed amended to achieve s nearly as possible the same economic and/or protective effect as the original provision; and (b) the legality, validity and enforceability of the remaining provisions of this Agreement shall not be affected or impaired thereby. 12.4 WAIVER No delay or omission by either Party hereto to exercise any right or pow r occurring upon any noncompliance or default by the other Party with respect to a y of the terms of this Agreement shall impair any such right or power or be construed to be a waiver thereof. A waiver by either of the Parties hereto of any of the covenants, conditions, or agreements to be performed by the other shall not be construed to be a waiver of any succeeding breach thereof or of any covenant, condition, or agreement herein contained. Unless stated otherwise, all remedies provided for in is Agreement will be cumulative and in addition to and not in lieu of any other remedies available to either Party at law, in equity, or otherwise. 12.5 ASSIGNMENT This Agreement will be binding on and inure to the benefit of the Parties their respective successors, assigns, heirs and personal representatives. Unless as provided herein, neither Party may assign, delegate, assign, nor subcontract their obligations and duties hereunder without the prior written consent of the non-assigning Party. Notwithstanding the foregoing, Developer may assign it rights and benefits under this Agreement, and delegate the performance of its obligations and duties hereunder, to any corporation or unincorporated business that is the successor to the business of Developer, without Client express or implied authorization. + +23 + +Source: PELICAN DELIVERS, INC., S-1, 2/11/2020 + + + + + +12.6 OTHER DEFINITIONAL TERMS, TERMS OF CONSTRUCTION The words hereof, herein and hereunder and words of similar import when used in this Agreement refer to this Agreement as a whole and not to any particular provision of this Agreement. The words include, includes and including shall be deemed to be followed by the phrase without limitation. Unless the context in which used herein otherwise clearly requires, or has the inclusive meaning represented by the phrase and/or. All incorporations by reference of covenants, terms, definitions or other provisions from other agreements are incorporated into this Agreement as if such provisions were fully set forth herein, and include all necessary definitions and related provisions from such other agreements. All covenants, terms, definition and other provisions from other agreements incorporated into this Agreement by reference will survive termination of this Agreement. References to statutes, regulations or laws, include any amendments, modifications or replacements of such statutes, regulations, or laws. 12.7 COUNTERPARTS This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and t e same instrument. Counterparts may be delivered via facsimile, e-mail (including pdf) or other transmission method, and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes. 12.8 ENTIRE AGREEMENT AND UNDERSTANDING This Agreement and Appendices hereto are the complete and exclusive statement of agreement of the Parties as to matters covered by it. This Agreement and its Appendices replaces and supersedes all prior written or oral agreement or statements by and among the Parties with respect to the matters covered by it. This Agreement may not be modified or amended except in writing signed by a duly authorized representative of each Party. + +24 + +Source: PELICAN DELIVERS, INC., S-1, 2/11/2020 + + + + + +13. Acknowledgement by Client Client agrees to the terms of this Agreement and Appendices hereto an acknowledges receipt of a copy of this Agreement. IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date Acceptance by Developer By: /s/ Julian Valentine Julian Valentine, VP + +Acceptance by Client: By: /s/ Dave Comeau Dave Comeau, Shareholder + +25 + +Source: PELICAN DELIVERS, INC., S-1, 2/11/2020 + + + + + +Source: PELICAN DELIVERS, INC., S-1, 2/11/2020 \ No newline at end of file diff --git a/full_contract_txt/PenntexMidstreamPartnersLp_20150416_S-1A_EX-10.4_9042833_EX-10.4_Transportation Agreement.txt b/full_contract_txt/PenntexMidstreamPartnersLp_20150416_S-1A_EX-10.4_9042833_EX-10.4_Transportation Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..b33070c4fd37756c2e1072199b099f5d275666f6 --- /dev/null +++ b/full_contract_txt/PenntexMidstreamPartnersLp_20150416_S-1A_EX-10.4_9042833_EX-10.4_Transportation Agreement.txt @@ -0,0 +1,475 @@ +Exhibit 10.4 + +Execution Version + +GAS TRANSPORTATION AGREEMENT + +This Gas Transportation Agreement (this "Agreement") is hereby made and entered into on the 14t h day of April, 2015 (the "Effective Date") by and between PennTex North Louisiana Operating, LLC, a Delaware limited liability company ("Transporter"), and MRD Operating LLC, a Delaware limited liability company ("Customer"). Hereinafter, Transporter and Customer may sometimes be referred to collectively as the "Parties" and individually as a "Party." + +WITNESSETH + +WHEREAS, Transporter owns and operates a natural gas transportation system and related facilities; and + +WHEREAS, Customer owns or controls, and has the right, to deliver Gas (as hereinafter defined) for transportation and desires to have Transporter provide such service under the terms and conditions of this Agreement. + +NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the Parties covenant and agree as follows: + +Article I. Definitions + +For the purposes of this Agreement, the following definitions have the meanings as set forth below: + +"Affiliate" shall mean, when used with respect to any Person, any other Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with such Person. For this purpose, "control" of any Person shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, by ownership of voting interest, by contract or otherwise. For the purposes of this Agreement, (i) with respect to PennTex Midstream Partners, LLC and its subsidiaries, the term "Affiliate" shall exclude Memorial Resource Development Corp. and each of its subsidiaries and (ii) with respect to Memorial Resource Development Corp. and its subsidiaries, the term "Affiliate" shall exclude PennTex Midstream Partners, LLC and each of its subsidiaries. + +"AMI/MEA Agreement" shall mean that certain Amended and Restated Area of Mutual Interest and Midstream Exclusivity Agreement dated April 14, 2015 among PennTex North Louisiana, LLC, Customer, PennTex NLA Holdings, LLC and MRD WHR LA Midstream LLC, as such agreement may be amended, supplemented or otherwise modified from time to time. + +"Btu" shall mean one British thermal unit, the amount of heat required to raise the temperature of one pound of water one degree Fahrenheit at standard reference conditions. + +"Business Day" shall mean any day (other than a Saturday or Sunday) on which commercial banking institutions in Houston, Texas are generally open for business. + +Source: PENNTEX MIDSTREAM PARTNERS, LP, S-1/A, 4/16/2015 + + + + + +"Cash-out Price" shall have the meaning set forth for such term in Article IV. + +"Central Clock Time" shall mean the current time in the Central Time Zone taking into consideration the seasonal changes back and forth between Daylight Savings and Standard time. + +"Commencement Date" shall be the first day of the Month following the date Transporter notifies Customer that (i) the Transportation System is operational to the extent necessary to commence commercial service with respect to the receipt of Customer Gas at the Point of Receipt at the tailgate of the Lincoln Parish Plant and delivery of such Gas to the Points of Delivery located downstream of the Lincoln Parish Plant, (ii) the Lincoln Parish Plant is operational to the extent necessary to commence commercial service with respect to the receipt and processing of Customer Gas, and (iii) the Points of Delivery listed on Exhibit A that are owned by Transporter or its Affiliate are operational and all necessary interconnect agreements with Interconnecting Pipelines necessary to deliver Gas to such Points of Delivery are in effect to the extent necessary to commence commercial service with respect to the delivery (but, for the avoidance of doubt, not the further downstream transportation) of Customer's Gas. Transporter will not be responsible for delays to the Commencement Date due to the action or inaction of Customer or Third Party Operators. + +"Commencement Date Facilities" shall have the meaning given to such term in Article II. + +"Contract Year" shall mean a period commencing at 9:00 a.m., Central Clock Time, on the Commencement Date and ending at 9:00 a.m., Central Clock Time on the same day and calendar month of the following calendar year and thereafter for succeeding periods of twelve (12) consecutive Months each. + +"Customer" shall have the meaning given to such term in the preamble of this Agreement. + +"Customer's Firm Service Gas" shall mean, an amount of Customer Gas equal to 400,000 MMBtu per Day; provided, however, (y) Customer's Firm Service Gas shall be increased by the additional amount of Transportation System capacity provided pursuant to a New Facility, and (z) if any Plant described in clause (iii) of the definition of "Plants" exists, Customer's Firm Service Gas shall be increased by the amount of Gas Customer is committed to deliver to such Plant. + +"Customer Gas" shall mean Gas delivered by or on behalf of Customer for transportation on the Transportation System pursuant to this Agreement. + +"Day" or "Daily" shall mean a period of hours, commencing at 9:00 a.m., Central Clock Time, on a calendar day and ending at 9:00 a.m., Central Clock Time, on the next succeeding calendar day. + +"Default Interest Rate" shall mean the U.S. Prime Rate (as published in the "Money Rates" table of The Wall Street Journal, Eastern Edition) applicable on the first Business Day prior to the due date of payment and thereafter on the first Business Day of each succeeding calendar month (or, if such rate exceeds the maximum permissible rate under applicable law, the maximum rate permitted by such applicable law). 2 + +Source: PENNTEX MIDSTREAM PARTNERS, LP, S-1/A, 4/16/2015 + + + + + +"Effective Date" shall have the meaning given to such term in the preamble of this Agreement. + +"Equivalent Quantities" shall mean, on any Day, a quantity of Gas (expressed in MMBtu) that has a Thermal Content equal to the Thermal Content of Customer Gas received from Customer at the Points of Receipt on that Day, less the Thermal Content of System Fuel & LUAF allocated to such Customer Gas for such Day. + +"Firm Service" shall mean service for which Transporter is contractually entitled to interrupt its performance only to the extent (i) that such performance is excused pursuant to the provisions of this Agreement relating to Force Majeure, (ii) of specified periods of maintenance, or (iii) that Transporter determines that the operation of all or any portion of its facilities will cause injury or harm to persons or property or to the integrity of its facilities, and with respect to each of (i), (ii) or (iii), only to the extent that Transporter has curtailed all service of the same priority on a pro rata basis in accordance with Article V. + +"Firm Service Gas" shall mean all Gas entitled to Firm Service on the Transportation System, including, without limitation, Customer's Firm Service Gas. + +"Force Majeure" shall have the meaning given to such term in Article X. + +"Gas" shall mean any mixture of gaseous hydrocarbons, consisting essentially of methane and heavier hydrocarbons and inert and noncombustible gases that are extracted from the subsurface of the earth. + +"Governmental Authority" shall mean any federal, state, local, municipal, tribal or other government; any governmental, regulatory or administrative agency, commission, body or other authority or entitled to any administrative, executive, judicial, legislative, regulatory or taxing authority or power; and any court or governmental tribunal, including any tribal authority having or asserting jurisdiction. + +"Gross Heating Value" shall mean the number of Btus produced by the complete combustion in air, at constant pressure of one (1) cubic foot of Gas, at a base temperature of sixty degrees Fahrenheit (60°F) and at a reference pressure base equal to 14.65 psia, with air of the temperature and pressure of the Gas, after the products of combustion are cooled to the initial temperature of the Gas, and after the air and water formed by the combustion is condensed to the liquid state. The gross heating value of the Gas shall be corrected for water vapor under testing conditions to the actual water vapor content of the Gas being delivered; provided, however, if the actual water vapor content is seven (7) pounds per 1,000,000 standard cubic feet of Gas or less, the Gas shall be deemed "dry" and no water vapor correction shall be made. + +"Imbalance" shall have the meaning set forth for such term in Article IV. + +"Interconnecting Pipelines" means any pipeline connected to the Transportation System for the further transportation of Gas downstream of the Transportation System. 3 + +Source: PENNTEX MIDSTREAM PARTNERS, LP, S-1/A, 4/16/2015 + + + + + +"Interruptible Service" shall mean service for which Transporter is contractually entitled to interrupt its performance for any reason, including, without limitation, (i) the overall demand for services in the applicable facilities exceeding Transporter's capacity therein, (ii) an event of force majeure, (iii) maintenance or (iv) Transporter determines that the operation of all or any portion of its facilities will cause injury or harm to persons or property or to the integrity of its facilities. + +"Interruptible Service Gas" shall mean all Gas received by Transporter into the Transportation System that is not Firm Service Gas. + +"Lincoln Parish Plant" shall mean Transporter's gas processing plant located in Lincoln Parish, Louisiana. + +"Mcf" shall mean one thousand cubic feet of Gas at standard base conditions of 60°F and 14.73 psia. + +"Measurement Facility" shall mean the valves, fittings, piping, meters, transmitters and other associated measurement equipment located at a Point of Receipt or a Point of Delivery which provides custody transfer volumes. "Measurement Facilities" shall mean, collectively, each such Measurement Facility. + +"MMBtu" shall mean one million (1,000,000) Btus. + +"Month" or "Monthly" shall mean a period of time beginning at 9:00 a.m., Central Clock Time on the first Day of the calendar month and ending at 9:00 a.m., Central Clock Time on the first Day of the next succeeding calendar month. + +"Mount Olive Plant" shall mean Transporter's gas processing plant located in Mount Olive, Lincoln Parish, Louisiana that is Transporter's next gas processing plant constructed after the Lincoln Parish Plant. + +"Negative Imbalance" shall have the meaning set forth for such term in Article IV. + +"New Facility" shall have the meaning set forth for such term in Article II. + +"Parties" shall have the meaning given to such term in the preamble of this Agreement. + +"Party" shall have the meaning given to such term in the preamble of this Agreement. + +"Performance Assurance" shall have the meaning given to such term in Article XIV. + +"Person" shall mean any individual or any corporation, company, partnership, limited partnership, limited liability company, trust, estate, Governmental Authority or other entity. + +"Plants" shall mean (i) the Lincoln Parish Plant, (ii) the Mount Olive Plant and (iii) any other gas processing plant owned by Transporter or its Affiliate that is capable of receiving Customer Gas and redelivering such Gas to the Transportation System. 4 + +Source: PENNTEX MIDSTREAM PARTNERS, LP, S-1/A, 4/16/2015 + + + + + +"Point of Delivery" shall mean the custody transfer meter at the outlet of Transporter's facilities at the point of interconnection between the Transportation System and Interconnecting Pipelines or other facilities. "Points of Delivery" shall mean, collectively, each Point of Delivery. As of the Effective Date, the Points of Delivery, and the maximum available capacity thereof, are set forth on Exhibit B. + +"Point of Receipt" shall mean each custody transfer meter at the tailgate of the Plants from which Customer Gas is received into the Transportation System. "Points of Receipt" shall mean, collectively, each Point of Receipt. As of the Effective Date, the Points of Receipt, and the maximum available capacity thereof, are set forth on Exhibit B. + +"Positive Imbalance" shall have the meaning set forth for such term in Article IV. + +"Service Type" shall mean the type of service provided for Gas delivered hereunder, either Firm Service or Interruptible Service. + +"Services" shall mean the transportation and, if applicable, compression services provided by Transporter to Customer hereunder. + +"System Fuel & LUAF" shall mean, for any period of calculation, (i) Customer's share of Gas or fuel equivalents (electricity or other energy sources converted to their Btu equivalent) used by Transporter to deliver Customer's Gas from the Point(s) of Receipt to the Point(s) of Delivery on the Transportation System during such period, and (ii) Gas lost and unaccounted for on the Transportation System during such period. + +"Taxes" shall mean any or all current or future taxes, fees, levies, charges, assessments and/or other impositions levied, charged, imposed, assessed or collected by any Governmental Authority having jurisdiction. For the avoidance of doubt, the term "Taxes" shall not include any current or future taxes, fees, levies, charges, assessments and/or other impositions levied, charged, imposed, assessed or collected with respect to the Transportation System or any of Transporter's other facilities, including without limitation, Transporter's natural gas processing plants. + +"Term" shall have the meaning given to such term in Article XV. + +"Thermal Content" means, with respect to Gas, the product of (i) a volume of Gas and (ii) the Gross Heating Value of such Gas, adjusted to a same pressure base of 14.73 psia, as expressed in MMBtus. + +"Third Party Operator" means an operator of a pipeline or other facility upstream or downstream of the Transportation System, other than Transporter or its Affiliates. + +"Transportation Fee" shall have the meaning given such term in Article VIII. + +"Transportation System" shall mean the Commencement Date Facilities and all other equipment, devices, Measurement Facilities, pipelines and other facilities owned or operated by Transporter at or downstream of the Points of Receipt, necessary to receive Customer Gas at the Points of Receipt for transport to the Points of Delivery, and all additions, modifications, alterations, replacements, extensions, or expansions made thereto by Transporter from time to time, including, without limitation, any New Facilities pursuant to Article II hereof. 5 + +Source: PENNTEX MIDSTREAM PARTNERS, LP, S-1/A, 4/16/2015 + + + + + +"Transporter" shall have the meaning given to such term in the preamble of this Agreement. + +Article II. Dedication, Commencement Date Facilities, Post-Commencement Date Facilities and Transporter Services + +Dedication. During the Term, subject to the terms of the AMI/MEA Agreement, Customer dedicates and commits to this Agreement, and shall deliver or cause to be delivered to the Transportation System for transportation hereunder, all of Customer's owned or controlled residue Gas delivered from any of the Plants. Notwithstanding anything in this Agreement to the contrary, it is acknowledged and agreed that there is no minimum amount of residue Gas that must be delivered to the Transportation System hereunder; accordingly, Customer shall not have any liability (financial or otherwise) for failure to deliver any particular quantity of residue Gas to Transporter; provided, however, the foregoing sentence shall not reduce or eliminate Customer's obligation to pay the fees provided herein to the extent Services are provided hereunder. + +Commencement Date Facilities. Transporter shall design, engineer, modify, construct and equip, or caused to be designed, engineered, modified, constructed and equipped, the Transportation System, including, without limitation, the facilities and equipment described on Exhibit A attached hereto (the facilities and equipment described on Exhibit A being collectively referred to as the "Commencement Date Facilities"). + +Post-Commencement Date Facilities. + +If after the Commencement Date, Customer requires an addition, modification, alteration, replacement, or expansion of the Transportation System (a "New Facility"), Customer will provide Transporter a written notification of such requested New Facility containing sufficient information for Transporter to estimate the cost to provide such New Facility. Although Transporter shall have no obligation to provide a requested New Facility, Transporter may, in its sole discretion, agree to construct or acquire such New Facility. The commercial terms applicable the construction or acquisition of any New Facility will be determined in accordance with the AMI/MEA Agreement. The Parties agree to make any revisions to this Agreement (including the Exhibits hereto) that are necessary to reflect any New Facility. + +Transportation Services. For each Day during the Term, (i) Transporter agrees to provide Firm Service on the Transportation System for Customer Gas delivered to the Transportation System in a quantity not to exceed Customer's Firm Service Gas for such Day, and Interruptible Service for all quantities in excess of Customer's Firm Service Gas for such Day, and deliver to Customer, or for the account of Customer, at the applicable Points of Delivery, Equivalent Quantities of Customer Gas received at the Points of Receipt, and (ii) Customer, or its designee, shall accept such Equivalent Quantities of Customer Gas at the Points of Delivery. 6 + +Source: PENNTEX MIDSTREAM PARTNERS, LP, S-1/A, 4/16/2015 + + + + + +Notwithstanding anything in this Agreement to the contrary, it is acknowledged and agreed that there is no minimum amount of Customer Gas that must be delivered to the Transportation System hereunder; accordingly, Customer shall not have any liability (financial or otherwise) for failure to deliver any particular quantity of Gas to Transporter; provided, however, the foregoing sentence shall not reduce or eliminate Customer's obligation to pay the fees provided herein. + +Article III. Receipt and Delivery Pressures + +Pressure at Point of Receipt. Transporter will receive Customer Gas at the prevailing pressure at which such Customer Gas is delivered to the applicable Point of Receipt by the operator of the applicable Plant. + +Pressure at Point of Delivery. All Customer Gas delivered by Transporter will be delivered at the prevailing pressures of the Transportation System as may exist from time to time. Transporter shall at no time be required, unless otherwise agreed in writing, to construct New Facilities or modify the Commencement Date Facilities, including by the addition of compression facilities, to effect such delivery, including, but not limited to, instances in which a facility downstream of a Point of Delivery operates at a pressure in excess of the Transportation System working pressure. For the avoidance of doubt, any New Facilities required by Customer to comply with the operating pressure of facilities located downstream of a Point of Delivery shall be subject to the provisions of Article II. + +Article IV. Nominations, Confirmations and Imbalances + +Nominations. Each Month during the Term, Customer shall give written notice of Customer's nomination to Transporter specifying the average daily quantity of Customer Gas Customer requests be transported during such Month and designate a person who will be responsible for coordinating notices among Customer, Transporter and Third Party Operators in accordance with these procedures. Customer shall furnish such nomination to Transporter by email or other electronic means and such nomination shall specify such information as is necessary in order to perform the Services requested by Customer. If Customer anticipates any material revision to a Monthly nomination it has provided to Transporter, Customer will notify Transporter as promptly as possible. Transporter will transport hereunder as nearly as practicable at uniform hourly and Daily rates of flow unless otherwise mutually agreed by Customer and Transporter. + +Unless otherwise mutually agreed by Customer and Transporter, for Customer's initial nomination to be accepted for the first (1st) Day of any Month, Customer's nomination must be received by Transporter by 11:30 a.m. Central Clock Time on the third (3rd) Business Day prior to the last Day of the Month preceding such Month. Customer shall have the right to submit a new nomination or revise its existing nomination for any Day during such Month provided such nomination is received by Transporter prior to 11:30 a.m. Central Clock Time on the Business Day prior to the Day such new or revised nomination is requested to commence. Customer nominations received by Transporter after 11:30 a.m. Central Clock Time on the Business Day prior to the Day such new or revised service is requested to commence, or intraday nominations 7 + +Source: PENNTEX MIDSTREAM PARTNERS, LP, S-1/A, 4/16/2015 + + + + + +for Gas flowing the same Day, may be accepted by Transporter, in its sole discretion. Such new or revised nomination shall specify Customer's anticipated service requirements for the remainder of the applicable Month. + +If Customer is advised by a Third Party Operator to reduce or suspend deliveries of Customer Gas to the Transportation System, Customer shall immediately notify Transporter orally of such reduction or suspension, and shall confirm such notification in writing, and adjust its nominations in order to maintain a balanced position to the extent possible. + +Confirmations. All nominations of Customer Gas shall be scheduled and implemented by Transporter on a prospective basis and only to the extent Transporter is able to confirm the receipt and delivery of such Gas with the operator(s) of the Point(s) of Delivery. If a conflict arises between Customer's new or revised nomination and an operator's confirmation, Customer understands and agrees such operator's confirmation shall control. If Customer submits a new or revised nomination to Transporter, Transporter will confirm the scheduled quantity to Customer by 3:00 Central Clock Time on the Business Day prior to the Day such new or revised nomination is requested to commence, except for intraday nominations for Gas flowing the same Day, which Transporter will confirm as soon as reasonably practicable. + +Commingling. Although Customer shall retain title to Customer Gas delivered to Transporter hereunder, Customer Gas shall constitute part of the supply of Gas from all sources, and as such, Transporter shall, subject to its obligation to deliver Equivalent Quantities each Day, have the right to commingle Customer Gas with Gas of other customers. Transporter shall allocate Customer's pro rata share of each NGL Component contained in any commingled stream of Gas at any Point(s) of Delivery based on the GPMs of each NGL Component contained in Customer's Gas as measured by chromatograph or other method acceptable in the industry at the Point(s) of Receipt. + +Imbalances. The term "Imbalance" means the cumulative difference in a Month between: (i) the quantity of Gas in MMBtu received for the account of Customer at the Point(s) of Receipt, less Customer's System Fuel & LUAF quantity, as applicable, and (ii) the quantity of Gas in MMBtu delivered for the account of Customer at the Point(s) of Delivery. After any adjustment for System Fuel & LUAF, if the Imbalance is the result of receipts at the Point(s) of Receipt exceeding the delivered (or scheduled, as applicable) quantity of Gas for Customer's account at the Point(s) of Delivery, it is a "Positive Imbalance". If the Imbalance is a result of receipts at the Point(s) of Receipt being lower than the delivered quantity of Gas for Customer's account at the Point(s) of Delivery, it is a "Negative Imbalance". Imbalances will be cashed out on a Monthly basis. 8 + +Source: PENNTEX MIDSTREAM PARTNERS, LP, S-1/A, 4/16/2015 + + + + + +Cash Out. The cash-out settlement price will be the monthly arithmetical average of the prices ("Cash-out Price") as posted in Gas Daily's Daily Price Survey during the Month under the heading "Texas Gas Transmission Corp.," under the column labeled "Index" corresponding to the row labeled "Zone 1." Transporter will pay Customer an amount that is the product of the Positive Imbalance each Month, if any, and the Cash-out Price. Customer will pay Transporter an amount that is the product of the Negative Imbalance each Month, if any, and the Cash-out Price. If the actual monthly volume varies by more than five percent (5%) from the delivered volumes for the Month, then the Cash-out Price will be adjusted as follows: + + + +1. For Negative Imbalances, the Cash-out Price will be increased by the percentage variance, rounded up to the nearest whole percentage point, between the Point(s) of Delivery volumes and the adjusted Point(s) of Receipt volumes. (i.e., if the adjusted receipt volume from Customer is 7% less than the Point(s) of Delivery volume, then the Index Price will be increased by 7%), however in no event shall the Cash-Out Price be increased more than 10%; and + + + +2. For Positive Imbalances, the Cash-out Price will be decreased by the percentage variance, rounded up to the nearest whole percentage point, between the Point(s) of Delivery volumes and the adjusted Point(s) of Receipt volumes. (i.e., if the adjusted receipt volume from Customer is 7% greater than the Point(s) of Delivery volume, then the Index Price will be increased by 7%), however in no event shall the Cash-Out Price be increased more than 10%. + +Article V. Curtailment + +If the quantity of Customer Gas and all other Gas available for delivery into the Transportation System exceeds the capacity of the Transportation System at any point, then Transporter shall interrupt or curtail receipts of Customer Gas with respect to the affected point(s) only in accordance with the following: + +(a) First, Transporter shall curtail all Interruptible Service Gas prior to curtailing Firm Service Gas. In the event Transporter curtails some, but not all, Interruptible Service Gas on a particular Day, Transporter shall allocate the capacity of the Transportation System available for Interruptible Service Gas at the affected points on a pro rata basis based upon Customer's last confirmed nomination of Interruptible Service Gas hereunder and the last confirmed nominations of Interruptible Service Gas from all other shippers on the Transportation System prior to the event causing the curtailment. + +(b) Second, if additional curtailments are required beyond those described in the immediately preceding clause (a), Transporter shall curtail Firm Service Gas. In the event Transporter curtails some, but not all, Firm Service Gas on a particular Day, Transporter shall allocate the capacity of the Transportation System at the affected point(s) on a pro rata basis based upon Customer's last confirmed nomination of Firm Service Gas hereunder and the last confirmed nominations of Firm Service Gas from all other shippers on the Transportation System prior to the event causing the curtailment. + +Transporter shall provide Customer notice of any interruption or curtailment of the receipt of Customer Gas into the Transportation System as is reasonable under the circumstances. + +Article VI. Measurement & Testing + +The construction, ownership, installation, operation and maintenance of each Measurement Facility that is owned by a Person other than Transporter shall be governed by an interconnect agreement between Transporter and such Person. Each other Measurement Facility shall be constructed, installed, owned, operated and maintained by Transporter. 9 + +Source: PENNTEX MIDSTREAM PARTNERS, LP, S-1/A, 4/16/2015 + + + + + +Article VII. Gas Quality + +Notwithstanding anything to the contrary in this Agreement, Customer Gas received at a Point of Receipt from one of the Plants shall be deemed to be in compliance with the applicable Gas quality specifications of the Transportation System. + +Article VIII. Fees, Billing & Payment + +Fees. + +(a) Transportation Fee. For all Customer Gas received by Transporter at a Point of Receipt and delivered to any Point of Delivery, Customer shall pay Transporter a transportation fee of $0.04 per MMBtu. + +(b) Other Services Fees. If Transporter provides any compression Services with respect to Customer Gas delivered hereunder, the fees applicable to such Services shall be as mutually agreed between the Parties. The Parties agree to supplement this Agreement with an addendum or other mutually agreeable modification to memorialize the terms applicable to the provision of any such additional Services. + +Invoices and Statements. On or before the fifteenth (15th) calendar Day of each Month, Transporter shall provide to Customer an invoice and statement for the previous Month setting forth the calculation of the net amount due hereunder to Transporter for the Services provided hereunder during such previous Month. + +Payment of Statements. Within fifteen (15) calendar Days following receipt of each of Transporter's invoices and statements, Customer shall make payment to Transporter of all undisputed amounts by wire transfer, in accordance with the account information provided to Customer, unless another form of payment is agreed to in writing by the Parties. Should Customer fail to make payment in full of all undisputed amounts within such time period, interest shall accrue on the unpaid balance at the Default Interest Rate or the maximum legal rate, whichever is the lesser, from the date such payment is due until the same is paid. If Customer fails to pay Transporter undisputed amounts due hereunder and such failure is not cured within ten (10) calendar Days' of written notice from Transporter to Customer, Transporter may suspend receipt and delivery of Customer Gas without prejudice to any other available remedies at law or in equity. 10 + +Source: PENNTEX MIDSTREAM PARTNERS, LP, S-1/A, 4/16/2015 + + + + + +Billing Disputes. If a good faith dispute arises as to any amount payable hereunder, payment shall nevertheless be made when due of the amount not in dispute. Such payment shall not be deemed to be a waiver of the right to recoup any overpayment. If Customer withholds payment of any disputed amount, Customer shall, within seven (7) calendar Days after receipt of the statement for the month to which the disputed amount pertains, submit to Transporter a written explanation of the dispute and any available supporting documentation. The Parties shall then cooperate in good faith to resolve such dispute as expeditiously as possible. + +Audit Rights. Each Party or its designated representatives shall, upon reasonable notice to the other Party, have the right, no more frequently than two (2) times per twelve (12) consecutive calendar Months, at its own expense, at reasonable times and during normal business hours, to examine the books and records of such other Party to the extent necessary to verify the accuracy of any statement, charge, computation, or demand made under or pursuant to this Agreement. Each Party agrees to keep its records and books in accordance with generally accepted accounting practices in the oil and gas industry. Each invoice and statement shall be final as to both Parties unless questioned in writing within twenty four (24) Months following the date of such invoice or statement. + +Article IX. Notices + +Any notice, statement, claim or other communication required or permitted hereunder shall be in writing and shall be sent by: (i) hand delivery; (ii) United States mail with all postage fully prepaid; or (iii) courier with charges paid in accordance with the customary arrangements established by such courier, in each of the foregoing cases addressed to the Party at the following addresses, and shall be deemed given when received by the Party to whom it is addressed. The Parties opt out of electronic delivery of notices and amendments under this Agreement, except as to nominations, scheduling and imbalances, and except that this executed Agreement and executed amendments hereto may be delivered by scanning and emailing. + +Transporter: + +Notices and Correspondence: + +PennTex North Louisiana, LLC c/o PennTex North Louisiana Operating, LLC 11931 Wickchester Lane, Suite 300 Houston, Texas 77043 Attn: Steve Moore E-mail: smoore@penntex.com + +Customer: + +Notices and Correspondence: + +MRD Operating LLC c/o Memorial Resource Development Corp. 500 Dallas Street, Suite 1800 Houston, TX 77002 Attn: General Counsel E-mail: kroane@memorialrd.com 11 + +Source: PENNTEX MIDSTREAM PARTNERS, LP, S-1/A, 4/16/2015 + + + + + +with a copy to: + +Attn: Jeremy Bolander E-mail: Jeremy.bolander@memorialrd.com + +Notices of change of address of either of the Parties shall be given in writing to the other Party in the manner aforesaid and shall be observed in the giving of all future notices, statements, payments, claims or other communications required or permitted to be given hereunder. + +Article X. Force Majeure + +The term "Force Majeure" as used herein shall mean acts of God; strikes, lockouts, or other industrial disturbances; conditions arising from a change in governmental laws, orders, rules, or regulations; acts of public enemy; wars; blockades; insurrections; riots; epidemics; landslides; lightning; earthquakes; fires; storms; floods; washouts; arrests and restraints of governments and people; civil disturbances; explosions; breakage or accident to machinery or lines of pipe; the necessity for making repairs, tests, alterations, or performing maintenance to machinery or lines of pipe; scheduled maintenance; freezing of wells or lines of pipe; partial or entire failure of wells, processing, or gasification and gas manufacturing facilities; orders or directives of, or proceedings initiated by, any Governmental Authority; and any other causes, whether of the kind herein enumerated or otherwise, not within the control of the Party claiming relief hereunder, and which by the exercise of due diligence, such Party is unable to prevent or overcome. Such term shall likewise include those instances (a) where either Transporter or Customer is required to obtain servitudes, rights-of-way, grants, permits or licenses to enable such Party to fulfill its obligations under this Agreement and is unable to acquire or experiences delays in acquiring such servitudes, rights-of-way, grants, permits or licenses, at reasonable costs, and after the exercise of reasonable diligence, and (b) the partial or entire failure or refusal of Third Party Operators to receive or deliver Gas, or increases in pressure of upstream or downstream pipelines. Force Majeure shall not include failure of Gas supply due to pricing considerations. + +In the event Transporter or Customer is rendered unable, wholly or in part, by reason of force majeure to carry out its obligations under this Agreement (other than the obligation to make payment of amounts due hereunder, including without limitation, payment of fees due hereunder), it is agreed that such Party shall give notice and reasonably full particulars of such force majeure, in writing, or other electronic means to the other Party within a reasonable time after the occurrence of the cause relied on, and the obligations of the Party giving such notice, so far as they are affected by such force majeure, shall be suspended during the continuance of any inability so caused, but for no longer period, and such cause shall, so far as possible, be remedied with all reasonable dispatch. + +It is understood and agreed that the settlement of strikes or lockouts shall be entirely within the discretion of the Party having the difficulty, and that the above requirement that any force majeure shall be remedied with all reasonable dispatch shall not require the settlement of strikes or lockouts by acceding to the demands of the opposing party when such course is inadvisable in the discretion of the Party having the difficulty. 12 + +Source: PENNTEX MIDSTREAM PARTNERS, LP, S-1/A, 4/16/2015 + + + + + +Article XI. Warranties + +Customer warrants to Transporter that at the time Customer Gas is delivered to a Point of Receipt hereunder, Customer will have good title or the right to deliver such Customer Gas, and that such Customer Gas shall be free and clear of all liens and adverse claims, other than statutory liens and liens, encumbrances or claims under credit facilities or other credit arrangements in respect of borrowed money. Customer agrees, with respect to the Customer Gas delivered to Transporter hereunder, to indemnify Transporter against all suits, actions, debts, accounts, damages, costs (including attorney's fees), losses and expenses arising from or out of any adverse claims of any and all persons to or against said Customer Gas other than any lien, claim or encumbrance alleged to have arisen by, through or under Transporter or its Affiliate. + +Article XII. Taxes and Surcharges + +Customer shall pay, or cause to be paid, all production, severance, gross receipts, ad valorem, and similar Taxes, and all surcharges, levied or imposed on it by any Governmental Authority with respect to Customer Gas. In the event Transporter is required to pay or remit any such Tax or surcharge owed by Customer as a result of Customer Gas being transported on the Transportation System, Customer shall reimburse Transporter for such Tax or surcharge pursuant to Transporter's invoice for the same. Customer hereby agrees to indemnify, defend and hold harmless Transporter from and against any and all claims and losses arising out of or related to such Taxes or surcharges. This indemnity and defense obligation shall survive the expiration or termination of this Agreement. Transporter shall be responsible for all Taxes or surcharges levied or imposed on it by any Governmental Authority with respect to the Transportation System and Transporter's other facilities, including without limitation, Transporter's Gas gathering system, processing plants and Gas liquids pipeline system. + +Article XIII. Limitation of Liability & Indemnifications + +CUSTOMER SHALL RELEASE, DEFEND, INDEMNIFY AND HOLD HARMLESS TRANSPORTER AND TRANSPORTER'S MEMBERS, DIRECTORS, OFFICERS, AGENTS AND EMPLOYEES FROM AND AGAINST ANY AND ALL SUITS, ACTIONS, CAUSES OF ACTION, CLAIMS, DEMANDS, LOSSES, LIABILITIES AND EXPENSES (INCLUDING, WITHOUT LIMITATION, INTEREST, COURT COSTS, REASONABLE ATTORNEYS' FEES AND EXPENSES, AND OTHER COSTS OF DEFENSE) (COLLECTIVELY, "CLAIMS") RELATING TO, CAUSED BY OR ARISING OUT OF CUSTOMER'S BREACH OF ANY REPRESENTATION, WARRANTY OR COVENANT MADE BY CUSTOMER HEREUNDER, BUT NOT TO THE PROPORTIONATE EXTENT THAT SUCH CLAIM IS CAUSED BY OR RESULTS FROM OR ARISES OUT OF THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF TRANSPORTER. + +TRANSPORTER SHALL RELEASE, DEFEND, INDEMNIFY AND HOLD HARMLESS CUSTOMER AND CUSTOMER'S MEMBERS, DIRECTORS, OFFICERS, AGENTS 13 + +Source: PENNTEX MIDSTREAM PARTNERS, LP, S-1/A, 4/16/2015 + + + + + +AND EMPLOYEES FROM AND AGAINST ANY AND ALL CLAIMS RELATING TO, CAUSED BY OR ARISING OUT OF (I) TRANSPORTER'S BREACH OF ANY REPRESENTATION, WARRANTY OR COVENANT MADE BY TRANSPORTER HEREUNDER, BUT NOT TO THE PROPORTIONATE EXTENT THAT SUCH CLAIM IS CAUSED BY OR RESULTS FROM OR ARISES OUT OF THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF CUSTOMER, AND (II) OPERATIONS CONDUCTED HEREUNDER OR IN CONNECTION HEREWITH BY TRANSPORTER TO THE EXTENT RESULTING FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF TRANSPORTER. + +NO PARTY SHALL BE LIABLE FOR CONSEQUENTIAL, INCIDENTAL, PUNITIVE, EXEMPLARY OR INDIRECT DAMAGES, LOST PROFITS OR OTHER BUSINESS INTERRUPTION DAMAGES, BY STATUTE, IN TORT OR CONTRACT, OR OTHERWISE; PROVIDED, HOWEVER, THAT THIS LIMITATION SHALL NOT LIMIT A PARTY'S RIGHT TO RECOVERY HEREUNDER FOR ANY SUCH DAMAGES TO THE EXTENT SUCH PARTY IS REQUIRED TO PAY SUCH DAMAGES TO A THIRD PARTY IN CONNECTION WITH A MATTER FOR WHICH SUCH PARTY IS OTHERWISE ENTITLED TO INDEMNIFICATION HEREUNDER. THE LIMITATIONS IMPOSED ON REMEDIES AND THE MEASURE OF DAMAGES SHALL BE WITHOUT REGARD TO THE CAUSE OR CAUSES RELATED THERETO, INCLUDING THE NEGLIGENCE OF ANY PARTY, WHETHER SUCH NEGLIGENCE BE SOLE, JOINT OR CONCURRENT, OR ACTIVE OR PASSIVE. + +Article XIV. Creditworthiness + +If Customer has failed to pay any amount when due under this Agreement and if such non-payment is not being disputed in good faith by Customer, Transporter shall have the right to request and receive from Customer adequate assurance of performance ("Performance Assurance") which shall mean credit support in a form reasonably acceptable to Transporter and in an amount and for the term reasonably acceptable to Transporter. Any of the following shall be an acceptable form of credit support: + +(a) An irrevocable standby letter of credit from a bank satisfactory to Transporter; + +(b) Provide a prepayment or a deposit in advance of the Month in which Services hereunder are to be provided; or + +(c) A performance bond issued by a Person satisfactory to Transporter. + +If the credit of Customer's guarantor is satisfactory in Transporter's opinion, a demand for Performance Assurance can be satisfied with a guarantee issued on behalf of Customer in a form acceptable to Transporter, but only for as long as the credit of Customer's guarantor continues to be acceptable to Transporter. Transporter acknowledges and agrees that Memorial Resource Development Corp. is a satisfactory guarantor. + +Should Customer or its guarantor fail to provide Performance Assurance within ten (10) Business Days after receipt of written demand for such assurance, then Transporter shall have the right to suspend performance under this Agreement until such time as Customer furnishes Performance Assurance. For the avoidance of doubt, such suspension of performance by Transporter shall not relieve Customer of its obligation to make payments of amounts due hereunder, including, without limitation, payment of fees due hereunder. 14 + +Source: PENNTEX MIDSTREAM PARTNERS, LP, S-1/A, 4/16/2015 + + + + + +If during the Term, if Transporter has failed to pay any amount when due under this Agreement and if such non-payment is not being disputed in good faith by Transporter, Customer shall have the right to request and receive from Transporter adequate Performance Assurance under similar terms and conditions as described above, including the right to suspend performance under this Agreement until such time as Transporter furnishes Performance Assurance. + +Article XV. Miscellaneous + +Entire Agreement. This Agreement, including any exhibits and attachments, constitutes the entire agreement between the Parties pertaining to the subject matter hereof, supersedes all prior agreements, understandings, negotiations and discussions, whether oral or written, of the Parties with respect thereto, and may not be amended or modified except by a written instrument signed by both Parties expressly identifying it as an amendment or modification hereof. + +Waiver. Any failure by either Party to comply with any of its obligations, agreements or conditions herein contained may only be waived in writing in an instrument specifically identified as a waiver and signed by the Party to whom such compliance is owed. No waiver of, or consent to a change in, any provision of this Agreement shall be deemed or shall constitute a waiver of, or consent to a change in, any other provisions hereof, nor shall such waiver constitute a continuing waiver unless expressly provided in the waiver. + +No Third Party Beneficiaries. Except for Persons indemnified hereunder, this Agreement is not for the benefit of any third party and nothing herein, expressed or implied, confers any right or remedy upon any Person not a party hereto other than Persons which become successors or assigns pursuant the provisions hereof. + +No Partnership. It is not the intention of the Parties to create, nor is there created hereby, a partnership, trust, joint venture or association. The status of each Party hereunder is solely that of an independent contractor. + +Published Indices. Unless expressly provided otherwise herein, if any published price index referred to in this Agreement ceases to be published, the Parties shall mutually agree to an alternative published price index representative of the published price index referred to in this Agreement. + +Headings. The headings and captions in this Agreement have been inserted for convenience of reference only and shall not define or limit any of the terms and provisions hereof. + +Governing Law. This Agreement is entered into in the State of Texas and shall be governed, interpreted and construed in accordance with the laws of the State of Texas without regard to the conflicts of laws provisions thereof. Exclusive venue for any suit, action or proceeding brought by either Party in connection with this Agreement or arising out of the terms or conditions hereof shall be in the state or federal courts situated in Harris County, Texas. 15 + +Source: PENNTEX MIDSTREAM PARTNERS, LP, S-1/A, 4/16/2015 + + + + + +Agreement Subject to Laws. This Agreement is subject to all applicable state and federal laws and to all applicable orders, rules, and regulations of any Governmental Authority having jurisdiction. If either Party is ordered or required to do any act inconsistent with the provisions of this Agreement, then this Agreement shall continue nevertheless and shall be deemed modified to conform to the requirements of such law or regulation. + +Restrictions on Assignment. This Agreement may not be assigned, disposed of, alienated or otherwise transferred by either Party, in whole or in part, without the prior written consent of the other Party, which consent shall not be unreasonably withheld, conditioned or delayed, except as provided below. + +Permitted Assignments. Notwithstanding the foregoing, (i) either Party may assign this Agreement to an Affiliate of such Party without the consent of the other Party, (ii) either Party may pledge this Agreement to secure any credit facility or indebtedness of such Party or its Affiliates without the consent of the other Party, (iii) Transporter may assign this Agreement without Customer's consent in connection with the sale or transfer of the Transportation System, and (iv) Customer may assign or partially assign this Agreement without Transporter's consent in connection with the sale or transfer of all or part of Customer's ownership interests in the wells (or in the lands upon which such wells are located) producing Customer Gas delivered hereunder, provided that such assignee has a credit rating reasonably acceptable to Transporter at the time of such sale or transfer. In the case of transfers under clause (iv) above, the transferor shall be released from its obligations and liabilities under this Agreement to the extent of the obligations assumed by the transferee, provided that Customer's and such transferee's combined obligations to Transporter shall be no greater than Customer's obligations to Transporter prior to such transfer. + +Reports to Governmental Authorities. Neither Party represents or warrants that any information it may furnish to the other Party under the provisions of this Agreement will satisfy any of the requirements that may be imposed by any applicable state or federal laws and by any applicable orders, rules, and regulations of any Governmental Authorities having jurisdiction. Further, neither Party assumes the responsibility for the making of any reports to any Governmental Authorities that are required to be made by or on behalf of the other Party. + +Severability. The invalidity of any one or more provisions of this Agreement will not affect the validity of this Agreement as a whole, and in case of any such invalidity, this Agreement will be construed as if the invalid provision had not been included herein so long as the economic and legal substance of the transactions contemplated by this Agreement is not affected in any manner materially adverse to any Party. Upon such determination that one or more provisions of this Agreement are invalid, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the extent possible. + +Expenses. Each Party shall pay its own legal fees and other costs and expenses incurred by it in connection with the execution and delivery of this Agreement. 16 + +Source: PENNTEX MIDSTREAM PARTNERS, LP, S-1/A, 4/16/2015 + + + + + +No Inducements. No director, employee, or agent of any Party shall give or receive any commission, fee, rebate, gift, or entertainment of significant cost or value in connection with this Agreement. + +Counterpart Execution. This Agreement may be executed in any number of counterparts, each of which shall be considered an original, and all of which shall be considered one and the same instrument. Any signature delivered by a Party electronically shall be deemed an original signature. + +Term and Termination. This Agreement shall commence on the Effective Date and continue in full force and effect until the end of the fifteenth (15th) Contract Year, and shall continue in full force and effect thereafter until terminated by either Party by providing thirty (30) calendar days' prior written notice of termination to the other Party (such fifteen (15) Contract Year period, as may be further extended as provided herein is referred to as the "Term"). + +Survival. The respective indemnification obligations of the Parties set forth in this Agreement shall survive the expiration of the Term and any termination of this Agreement. + +[Signature Page Follows] 17 + +Source: PENNTEX MIDSTREAM PARTNERS, LP, S-1/A, 4/16/2015 + + + + + +This Agreement is executed by the authorized representatives of the Parties set forth below, to be effective as of the Effective Date. CUSTOMER: + +MRD OPERATING LLC + +By: MEMORIAL RESOURCE DEVELOPMENT CORP., its sole member + +By: /s/ Kyle Roane Name: Kyle N. Roane Title: Senior Vice President + +TRANSPORTER: + +PENNTEX NORTH LOUISIANA OPERATING, LLC + +By: /s/ Robert O. Bond Name: Robert O. Bond Title: Chief Operating Officer + +Signature Page to Gas Transportation Agreement + +Source: PENNTEX MIDSTREAM PARTNERS, LP, S-1/A, 4/16/2015 + + + + + +Exhibit A Commencement Date Facilities + +Pipeline Facilities + + • 0.9 miles of 24" pipeline between the Lincoln Parish Plant and the Points of Delivery below + + • 12 miles of 24" pipeline between the Mount Olive Plant and the Points of Delivery below (such facilities will be placed in service afterthe Commencement Date in conjunction with the Mount Olive Plant) + +Points of Delivery + + • RIGS + + • Cardinal Arcadia Storage (owned by Transporter or its Affiliate) + +Points of Receipt + + • Lincoln Parish Plant (owned by Transporter or its Affiliate) + + • Mount Olive Plant (owned by Transporter or its Affiliate) + +Miscellaneous Appurtenant Facilities (launchers/receivers, etc.) Exhibit A + +Source: PENNTEX MIDSTREAM PARTNERS, LP, S-1/A, 4/16/2015 + + + + + +Exhibit B + +I. Points of Delivery + +Receipt Point Name Transporter's Meter # Parish/State + +Maximum Volume* (in Mcf/d) RIGS Bratton Camp 10012 Lincoln Parish, LA up to 400,000 Cardinal Arcadia Storage Bratton Camp 10011 Lincoln Parish, LA up to 200,000 + +II. Points of Receipt + +Delivery Point Name Transporter's Meter # Parish/State + +Maximum Volume* (in Mcf/d) PennTex Lincoln Parish Plant 10010 Lincoln Parish, LA up to 200,000 PennTex Mount Olive Plant TBD Lincoln Parish, LA up to 200,000 * Subject to increased Maximum Volume capacity in accordance with any future expansion of an applicable Measurement Facility. + +Exhibit B + +Source: PENNTEX MIDSTREAM PARTNERS, LP, S-1/A, 4/16/2015 \ No newline at end of file diff --git a/full_contract_txt/PerformanceSportsBrandsInc_20110909_S-1_EX-10.10_7220214_EX-10.10_Endorsement Agreement.txt b/full_contract_txt/PerformanceSportsBrandsInc_20110909_S-1_EX-10.10_7220214_EX-10.10_Endorsement Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..fd589ba9554ba4db2bad75ecfe8ded86223648f4 --- /dev/null +++ b/full_contract_txt/PerformanceSportsBrandsInc_20110909_S-1_EX-10.10_7220214_EX-10.10_Endorsement Agreement.txt @@ -0,0 +1,393 @@ +ENDORSEMENT AGREEMENT entered into by and between ANDY NORTH and GOLFERS INCORPORATED + + Effective February 21, 2011 + + + +Source: PERFORMANCE SPORTS BRANDS, INC., S-1, 9/9/2011 + + + + + + TABLE OF CONTENTS + + + + + +Paragraph Page 1. Definitions 3 2. Term 4 3. Grant of License and Exclusivity 4 4. Retention of Rights 4 5. Appearances 4 6. Compensation 5 7. Supply of Endorsed Products 6 8. Approval of Advertising 7 9. Ownership 8 10. SAG and/or AFTRA 8 11. Standards 8 12. Events of Default 8 13. Termination/Remedies 9 14. Company's Debts 9 15. Indemnification 9 16. Insurance 9 17. Waiver 9 18. Notices 10 19. Assignment 10 20. Independent Contractor 10 21. Joint Venture 10 22. Governing Law 10 23 Entire Agreement 10 24. Amendments 10 25. Authority 11 26. Severability 11 27. Compliance with Laws 11 28. Attorney's Fees and Costs 11 29. Force Majeure 11 30. Confidentiality 11 31. Counterparts 11 + + Page 2 of 12 + +Source: PERFORMANCE SPORTS BRANDS, INC., S-1, 9/9/2011 + + + + + + ENDORSEMENT AGREEMENT THIS ENDORSEMENT AGREEMENT (herein the "Agreement") is effective on this 21s t day of February 2011, by and between Golfers Incorporated, a Delaware Corporation, having a mailing address of 1021 N. Sepulveda Blvd., Suite G, Manhattan Beach, CA 90266 (hereinafter referred to as "Company") and Andy North, having a mailing address of 1624 S. High Point Road, Madison, WI 53719 (hereinafter referred to as "North"). WITNESSETH WHEREAS, North is recognized and known throughout the world to be a highly skilled golfer and television commentator; and WHEREAS, North's name and likeness (hereinafter defined) has commercial value with respect to the advertisement, promotion and sale of products and services in the commercial marketplace; and WHEREAS, Company is engaged in the business of developing, marketing and selling F2 Golf Clubs (hereinafter referred to as "Product"), and Company desires to obtain North's services and endorsement to be utilized in the advertising and sale of such Product; and WHEREAS, North agrees, subject to the terms and conditions contained herein, to provide certain services to Company and to authorize the use of North's endorsement by Company for such purposes. NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: + + + + + + + + + + + + + + + +1. Definitions. As used herein, the following terms shall be defined as set forth below: + + a. "Contract Period" shall mean that period of time from February 21, 2011 through December 31, 2012. + + b. "Contract Year" shall mean the specific period of time during the Contract Period as more specifically set forth below: · Contract Year 2011 (2/21/11 - 12/31/11) · Contract Year 2012 (1/1/12- 12/31/12) + + c. "Contract Territory" shall mean the world. + + d. "North's Likeness" shall mean and include North's name, image, photograph, voice, initials, signature, biographical information, and persona. + + f. "North's Endorsement" shall mean and include North's public statements and comments about Company's Product. + + Page 3 of 12 + +Source: PERFORMANCE SPORTS BRANDS, INC., S-1, 9/9/2011 + + + + + + + + + + + + + + + + + + + + + + + + g. "Endorsed Product(s)" shall only mean and include Company's irons, woods, wedges and putters. + +2. Term. The Term of this Agreement shall be for the Contract Period unless it is terminated or extended as set forth in this Agreement. + +3. Grant of License and Exclusivity. Subject to the terms set forth in this Agreement, North hereby grants to Company the right and privilege to use North's Likeness and North's Endorsement during the Term and within the Contract Territory in all reasonable forms of advertising including, but not limited to television (including the infomercial format), radio, print advertising, brochures, pamphlets, product packaging, point-of-purchase materials, Company's web-site and a demonstration video (hereinafter referred to as "Advertising Materials") in connection with Company's advertisement and sale of the Endorsed Product only. During the Term of this Agreement and within the Contract Territory, North agrees not to enter into an agreement with another company or entity for the purpose of endorsing or promoting products similar to the Endorsed Products. Upon the expiration or termination of this Agreement, Company shall be prohibited from using or distributing any new or existing Advertising Materials using North's Likeness and North's Endorsement except for Endorsed Product with North's Likeness and/or North's Endorsement on the packaging that is already in the channel of retail distribution. Company shall be prohibited from selling or shipping any new Endorsed Product with North's Likeness and/or North's Endorsement on the packaging upon the expiration or termination of this Agreement. + +4. Retention of Rights. All rights not specifically granted or licensed to Company hereunder shall be reserved and retained by North and may be utilized or licensed by North to any third parties in any manner which is not in contravention of this Agreement. + +5. Appearances. + + a. Production Appearances. + + i. Contract Year 2011. North agrees to make one (1) Production Appearance on behalf of Company during Contract Year 2011 for the purpose of producing the following: (1) one 30-minute infomercial; (2) one 30-second television commercial; (3) one demonstration dvd on how to use the Endorsed Product. (4) product testimonials and (5) still photographs for print advertisements and packaging (hereinafter referred to as "Production Appearance"). Said Production Appearance shall take place on February 22 & 23, 2011 in or around Phoenix, AZ. The Production Appearance shall be approximately nine (9) hours in duration on February 22nd and five (5) hours in duration on February 23rd. During such Production Appearance, North shall be permitted to wear the apparel of his choice. ii. Contract Year 2012. North agrees to make one (1) Production Appearance on behalf of Company during Contract Year 2012 for the purpose of producing either new or updated Advertising Materials. Said Production Appearance shall take place at a mutually agreed upon time and location. The Production Appearance shall be approximately nine (9) hours in duration on the first day and five (5) hours in duration on the second day. During such Production Appearance, North shall be permitted to wear the apparel of his choice. + + Page 4 of 12 + +Source: PERFORMANCE SPORTS BRANDS, INC., S-1, 9/9/2011 + + + + + + + + + + + + + + + + + + + + + + + + + + b. Additional Production/Promotional Appearances. If requested by Company, North agrees to use reasonable effort to make Additional Production/Promotional Appearances on behalf of Company (hereinafter referred to as "Additional Production/Promotional Appearances"). Should Company request for North to conduct Additional Production/Promotional Appearances and North agrees to appear, Company shall pay North an additional fee for such appearance(s) as set forth in paragraph 6.d. below. North has no obligation to make such appearance. + + c. Voice-Over Appearances. If requested by Company, North shall make one (1) voice over appearance during the Term. The voice over appearance shall take place at North's personal residence or at another mutually agreed upon location in Wisconsin, and shall not exceed two (2) hours in duration. + + d. Promotional Appearance. If requested by Company, North agrees to make one (1) promotional appearance each Contract Year during the Term at certain events to promote the Endorsed Products. Said appearance shall be approximately three (3) hours in duration. + + e. Promotion/Media Activities. North will use reasonable efforts to mention the benefits of Company's Endorsed Products when North is being interviewed or North is participating in Public Events as defined below. + + f. Expenses. If travel is necessary to provide the services set forth in this Agreement, Company shall provide or reimburse all such travel expenses of North, including round-trip first-class airfare on the airline of North's choice, first-class hotel accommodations, reasonable meal and ground transportation expenses. Company shall deliver the airline tickets to North at least seven (7) days prior to the scheduled appearance, and reimburse North for other such expenses within ten (10) days after receipt of the expense receipts. + + g. Scheduling. All appearances shall be scheduled on dates, times and locations that are mutually agreed upon by Company and North. All such appearances shall be scheduled through North's duly authorized agent for this project-Fidelity Sports Group, LLC. + +6. Use of F2 Wedges/Using F2 Golf Bag. During the Contract Period and within the Contract Territory, North agrees to: + + a. Wedges. Use Company's F2 branded wedges when competing professionally, conducting public clinics or outings, participating in public golf events and when appearing at other public functions where it is appropriate to use or have golf clubs at such events (herein "Public Events'). + + Page 5 of 12 + +Source: PERFORMANCE SPORTS BRANDS, INC., S-1, 9/9/2011 + + + + + + + + + + + + The Contract Year 2011 Guaranteed Fee shall be paid as follows: + +The Contract Year 2012 Guaranteed Fee shall be paid as follows: + + + + + + + + + + b. Golf Bag. Use and carry Company's F2 branded golf bag at all Public Events as defined immediately above. North shall have the right to place a maximum of two (2) non-competitive third party sponsor names/logos that are of a reasonable size on the belly portion of the F2 branded golf bag. + + c. Irons, Woods, Putter. Use reasonable efforts to use F2 branded irons, woods and putter at all Public Events. For purposes of clarification, North shall not be required to use F2 branded irons, woods and putters. + +7. Compensation. a. Guaranteed Service Fee and Marketing Retainer. In consideration for the rights, services and benefits granted by North hereunder, Company agrees to pay North a non-refundable Guaranteed Service Fee and Marketing Retainer (hereinafter referred to as "Guaranteed Fee") of fifty-five thousand dollars ($55,000USD) in Contract Year 2011 and seventy thousand dollars ($70,000USD) in Contract Year 2012. + + (i) Twenty-Five thousand dollars ($25,000USD) on or before two days after this Agreement is fully executed. (ii) Fifteen thousand dollars ($15,000USD) on or before July 1, 2011. (iii) Fifteen thousand dollars ($ 15,000USD) on or before November 1, 2011. + + (i) Twenty-Five thousand dollars ($25,000USD) on or before February 1, 2012 (ii) Twenty-Five thousand dollars ($25,000USD) on or before July 1, 2012 (iii) Twenty thousand dollars ($20,000USD) on or before November 1, 2012 + + b. Royalties. In addition to payments due North by Company as set forth in paragraphs 7.a. above, Company further agrees to pay North a one percent (1%) royalty on all Gross Revenue generated from the sale of all Company Products (herein "Royalties"). + + c. Payment of Royalties/Statement of Accounts. (i) Company agrees to pay all royalties due as set forth in section 7.b. above on or before thirty (30) days following the end of each quarterly period during the Contract Period. The quarterly royalty payment shall be accompanied by a statement of account indicating the quantities of Products sold, the Gross Revenue generated from all sales of the Product where the sales were derived from (i.e. direct sales or retail sales) and the royalty payment that is due to North. (ii) Company shall keep, at its principal office, 1021 N. Sepulveda Blvd., Suite G, Manhattan Beach, CA 90266, a complete and accurate set of books and records maintained in accordance with generally accepted accounting principles and business practices. Said books and records shall be maintained for a two (2) year period following the expiration or termination of this Agreement. Company shall make said books available to North or North's representative on reasonable notice during the Term of this Agreement and the two (2) year period immediately following thereafter. The cost of any and all inspections shall be paid by North, unless an inspection shows an under-reporting or under-payment of more than five- percent (5%) for any quarterly period, in which event Company shall reimburse North for all such inspection costs. + + Page 6 of 12 + +Source: PERFORMANCE SPORTS BRANDS, INC., S-1, 9/9/2011 + + + + + + + + + + Fidelity Sports Group, LLC Bank of America ABA #: 026009593 SWIFT Code #: BOFAUS3N Trust Account #: 8980 1796 5942 + + + + + + + + + + d. Additional Production/Promotional Appearances Fee. In addition to the amounts payable by Company to North set forth in paragraph 7.a. and 7.b. above, and should Company request for North to make Additional Production/Promotional Appearances, Company further agrees to pay North a mutually agreed upon fee for each Additional Production/Promotional Appearance conducted by North. All compensation to be paid to North for Additional Production/Promotional Appearances shall be due and payable to North prior to each scheduled Additional Production/Promotional Appearance. + + e. Form of Payment. All payments hereunder shall be made payable to the order of "Fidelity Sports Group, LLC, as agent for Andy North" and shall be paid via check or wire transfer. If by wire transfer, then direct payment to the following bank account: + + f. Late Payments. Amounts not received within ten (10) days following their respective due dates shall be assessed a late charge equal to one and one-half percent (1 _%) per month of the overdue amount until paid, commencing on the eleventh day. + + g. Supply of Endorsed Products. Company shall deliver to North, at no charge, and in a timely fashion, a reasonable number of Endorsed Products for North's personal use each Contract Year during the Contract Period. All postage expenses associated with the delivery of the Endorsed Products shall be borne by Company. + +8. Approval of Advertising. a. Company agrees that it will not use North's Likeness or North's Endorsement hereunder unless and until all Advertising Materials and their intended use has been approved by North. North agrees that any Advertising Materials submitted for approval as provided herein may be deemed by Company to have been approved hereunder if the same is not disapproved by North within seven (7) business days after receipt thereof. North agrees that any Advertising Materials submitted hereunder will not be unreasonably disapproved and, if it is disapproved, that Company will be advised of the specific grounds for the disapproval. Company shall not use such disapproved Advertising Materials until it has written approval from North. + + Page 7 of 12 + +Source: PERFORMANCE SPORTS BRANDS, INC., S-1, 9/9/2011 + + + + + + + + + + + + + + + + + + + + + + b. Should Company utilize stock photographs of North, Company agrees to use current photographs and not to add, delete, alter, amend or modify any existing names, logos, designs, trademarks or other indicia of any other sponsor of North which appear in the portion of the photograph used by Company. + + c. Company acknowledges and agrees that the script and layout of the Advertising Materials, including, but not limited to the infomercial, shall be reasonably compatible with North's personality and/or style. Should the Advertising Materials be approved as set forth in Section 8.a. above, the Advertising Materials shall reflect North's personal experience and/or "testimonial" concerning the Product. Such Advertising Material shall be deemed to be North's representation and warranty that such testimonial copy in fact reflects North's personal experience with and opinion of the Endorsed Product. + +9. Ownership. All materials, in any form whatsoever, relating to the Advertising Materials will be and shall remain the absolute property of Company. North acknowledge that they do not now have and in the future will assert no right, title, or interest of any kind or nature whatsoever, in or to any component of the Advertising Materials. Furthermore, subject to North's approval as set forth in section 8 above, Company shall have the right at any time during the Term of this Agreement to make any revisions to the Advertising Materials or prepare versions of all or any part of the Advertising Materials to conform to the requirements of individual markets or customers. + +10. SAG and/or AFTRA. In the event of any of the Advertising Materials contemplated herein come within the purview or jurisdiction of the Screen Actors Guild ("SAG") and/or the American Federation of Television and Radio Artists ("AFTRA"), and North is required for any reason to become a member thereof, North agrees to join such union(s), and Company agrees to pay any and all expenses whatsoever including all dues, assessments, or contributions necessary in order for North to render his services hereunder, including any and all pension and health contributions or assessments that may be required by such entities. North's participation in any such Advertising Materials pursuant to this paragraph in the Agreement shall not result in any expenses or diminution of the Guaranteed Fee or Royalties of this Endorsement Agreement whatsoever to North. + +11. Standards. Company and North shall at all times deal with each other in good faith and strive to maintain and enhance each other's positive image and reputation. North and Company shall act at all times in a manner that shall not be in contravention of public morals and conventions. + +12. Event of Default. a. It shall be an event of default hereunder by North if i) North shall materially breach this Agreement and such breach remains uncured for a period of thirty (30) days after written notice thereof from Company to North, or ii) North shall be indicted for a felony involving moral turpitude which brings disrepute to the Company. + + Page 8 of 12 + +Source: PERFORMANCE SPORTS BRANDS, INC., S-1, 9/9/2011 + + + + + + + + + + + + + +The foregoing indemnity shall survive the expiration, fulfillment or termination of this Agreement. + + + + + + + + b. It shall be an event of default hereunder by Company if i) Company fails to pay all fees when due and payable pursuant to this Agreement, ii) Company is adjudicated as insolvent or declares bankruptcy, or iii) Company shall materially breach this Agreement and such breach remains uncured for a period of thirty (30) days after written notice thereof from North to Company. + +13. Termination/Remedies. Either party shall have the right to terminate this Agreement upon the occurrence of an event of default by the other party by providing written notice thereof to the defaulting party. All rights and remedies of the parties herein specified are cumulative and are in addition to, not in limitation of, any rights and remedies the parties may have at law or in equity and all such rights and remedies may be exercised singularly or concurrently. + +14. Company's Debts. North shall not be liable for any debts or obligations of Company resulting directly or indirectly from the aforesaid use of the North's Likeness, North's Endorsement or the services provided by North. Company shall make no representation, or in any way imply in its actions or failure to act, that North is on will be liable for debts or obligations of Company. + +15. Indemnification. Company shall indemnify, defend, and hold harmless North and its employees, officers, agents, and representatives from and against any and all claims, suits, assessments, losses, obligations, penalties, charges, actions, damages, liabilities, costs, and expenses including reasonable attorney's fees whether incurred at trial or in connection with any review by appeal or certiorari of both the trial and appellate court levels (collectively referred to as "Claims") arising out of or in connection with: a Any claim or action for negligent or intentional misconduct of Company in relation to the advertisement, promotion, or sale of the Endorsed Product, or Company's use of North's Likeness or North's Endorsement to advertise, promote, distribute, or sell the Endorsed Product; or b. Any claim or action for personal injury, death, or property damage resulting from a customer's use of the Endorsed Product; or c. Any claims or action for the breach by Company of any of its representations and warranties set forth in this Agreement. + +16. Insurance. Company agrees, at its own expense, to obtain and maintain general comprehensive liability insurance, with an insurance company that has a rating of A++ (per AM Best), insuring North as a "named insured party", against any claims, suits, losses and damages arising out of or caused by Company's use of North's Likeness. North's Endorsement or North's services hereunder. Such insurance policy shall be maintained with limits of not less than two million dollars ($2,000,000). Said policy of insurance shall remain in force for the duration of this Agreement. A copy of such insurance policy shall be provided to North within thirty (30) days after execution of this Agreement. + +17. Waiver. The failure of either party at any time or times to demand strict performance of the other party of any of the terms, covenants or conditions set forth herein shall not be construed as a continuing waiver or relinquishment thereof and each party may at any time demand strict and complete performance by the other party. + + Page 9 of 12 + +Source: PERFORMANCE SPORTS BRANDS, INC., S-1, 9/9/2011 + + + + + + + + + + + + + + + + + + + + + + + + + +18. Notices. All notices, claims, certificates, requests, demands and other communication hereunder shall be made in writing and will be deemed to have been duly given if delivered by hand, via facsimile transmission, or mailed and addressed as follows: + +To Company: Golfers Incorporated 1021 N. Sepulveda Blvd., Suite G Manhattan Beach, CA 90266 Attention: Mike or Steve Abram To North: Andy North c/o Fidelity Sports Group, LLC 514 Broadway Avenue Orlando, Florida 32803 Attention: David J. Moorman, President & CEO + +19. Assignment. Neither party to this Agreement shall assign the rights and benefits herein without the prior written consent of the other party. + +20. Independent Contractor. Company has engaged North for certain rights which are set forth in this Agreement, and North's relationship to Company, and Company's relationship to North, shall at all times be that of an independent contractor. + +21. Joint Venture. This Agreement does not constitute a partnership or joint venture between North and Company. No party shall have the right to obligate or bind the other party in any manner whatsoever. + +22. Governing Law. The Agreement shall be governed by and construed under the laws of the State of Florida in the United States of America, and venue for any such legal action shall be in the Circuit Court or County Court in Orlando, FL or the U.S. District Court having jurisdiction over Orlando, FL. + +23. Entire Agreement. This writing constitutes the entire agreement and understanding between the parties with respect to its subject matter. This Agreement supersedes all prior or contemporaneous agreements and understandings between the parties with respect to its subject matter. + +24. Amendments. This Agreement may be amended only by a written instrument duly executed by both parties. + + Page 10 of 12 + +Source: PERFORMANCE SPORTS BRANDS, INC., S-1, 9/9/2011 + + + + + + + + + + + + + + + + + + + + + + + +25. Authority. Each party warrants and represents to the other that it has the full right, power and authority to enter into and perform this Agreement, to make the covenants and representations contained in this Agreement and further, that the execution, delivery and performance of this Agreement will not violate, conflict with, or constitute a default under, any contract, agreement or undertaking to which it is a party or by which it is bound. + +26. Severability. The illegality, unenforceability or invalidity of any term, clause or provision of this Agreement shall not affect any other term, clause or provision hereof, and this Agreement shall continue in full force and effect, and be construed and enforced, as if such provision had not been included. + +27. Compliance with Laws. Company represents and warrants to North that it will comply with all rules, regulations, laws, orders, decrees and ordinances of the United States, each state and political subdivision thereof, and each and every foreign country having legal jurisdiction over any aspect of Company's activities under this Agreement, including, but not limited to, the use of North's Likeness in advertisements for and on behalf of the Company. + +28. Attorney's Fees and Costs. The prevailing party in any litigation or other proceeding between the parties arising out of the interpretation, application, or enforcement of any provision of this Agreement shall be entitled to recover all of its reasonable fees, court costs, and expenses, including fees for attorneys, whether incurred at trial or in connection with any review by appeal or certiorari, accountants, and other professionals. + +29. Force Majeure. In the event any of the appearances set forth in this Agreement are cancelled or delayed due to matters of "Force Majeure", as such term is defined below, Company and North shall use their reasonable efforts to reschedule such appearance as soon as possible following such cancellation or delay. As used herein, the term "Force Majeure" shall mean war, civil unrest, acts of God, unusually severe weather, environmental matters, failure of common carrier, governmental action, labor disputes, casualty, illness, injury and/or emergency. + +30. Confidentiality. The compensation terms of this Agreement hereunder and any financial information collected through the review of Company's records or statements shall be treated by the parties as confidential information. The parties hereto agree not to disclose any such terms, amounts or information to any other person or entity whatsoever other than its attorneys, accountants, or as required by law. + +31. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. + + Page 11 of 12 + +Source: PERFORMANCE SPORTS BRANDS, INC., S-1, 9/9/2011 + + + + + + IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first above written. + + ANDY NORTH: + + + + + +GOLFERS INCORPORATED: /s/ Michael F. Abram WITNESS: /s/ [ILLEGIBLE] By: Michael F. Abram Its: President Date: 2-21-11 + + /s/ Andy North WITNESS: /s/ [ILLEGIBLE] Andy North Date: 2-20-11 + + Page 12 of 12 + + + +Source: PERFORMANCE SPORTS BRANDS, INC., S-1, 9/9/2011 \ No newline at end of file diff --git a/full_contract_txt/PfHospitalityGroupInc_20150923_10-12G_EX-10.1_9266710_EX-10.1_Franchise Agreement1.txt b/full_contract_txt/PfHospitalityGroupInc_20150923_10-12G_EX-10.1_9266710_EX-10.1_Franchise Agreement1.txt new file mode 100644 index 0000000000000000000000000000000000000000..4b3804dc7caff3bad786d1386d3413d5bd08f4f3 --- /dev/null +++ b/full_contract_txt/PfHospitalityGroupInc_20150923_10-12G_EX-10.1_9266710_EX-10.1_Franchise Agreement1.txt @@ -0,0 +1,335 @@ +FORM OF FRANCHISE AGREEMENT Location of the Premises: Agreement Date Franchisee Business Address + +Type of Legal Entity (if applicable) State in which entity organized (if applicable) Shareholder / Partner / Member Name Ownership Percentage % (the "Operating Principal") % % % % + +Source: PF HOSPITALITY GROUP INC., 10-12G, 9/23/2015 + + + + + +TABLE OF CONTENTS SECTION PAGE 1. RIGHTS GRANTED 2 2. TERM; SUCCESSOR FRANCHISE AGREEMENTS 4 3. FEES 4 4. OPENING DEADLINE 6 5. TRAINING 10 6. OPERATIONS 11 7. PROPRIETARY MARKS 18 8. BUSINESS RECORDS AND REPORTING 19 9. MARKETING FUND AND ADVERTISING 21 10. TECHNOLOGY 23 11. OPERATING MANUAL 26 12. CONFIDENTIAL INFORMATION 26 13. TRANSFERS BY US 26 14. TRANSFERS BY YOU 27 15. TERMINATION 29 16. OBLIGATIONS ON TERMINATION OR EXPIRATION 31 17. RESTRICTIONS ON COMPETITION 33 18. RELATIONSHIP OF THE PARTIES 34 19. INDEMNIFICATION 35 20. CONSENTS AND WAIVERS 35 21. NOTICES 35 22. ENTIRE AGREEMENT AND AMENDMENTS 35 23. CONSTRUCTION OF THE AGREEMENT, SEVERABILITY, AND SURVIVAL 36 24. GOVERNING LAW 36 25. DISPUTES 36 26. ACKNOWLEDGMENTS 37 Appendix A - Opening Deadline, Delivery/Catering and Advertising Area, and Site Selection Area Appendix B - Personal Guarantee Appendix C - Sample of Non-Disclosure and Non-Competition Agreement - i - + +Source: PF HOSPITALITY GROUP INC., 10-12G, 9/23/2015 + + + + + +Pizza Fusion Holdings, Inc. Franchise Agreement This Franchise Agreement (the "Agreement") is entered into as of the Agreement Date shown on the cover page between Pizza Fusion Holding, Inc., a Florida corporation, and the individual or legal entity identified on the cover page ("Franchisee"). If Franchisee is a corporation, partnership, or limited liability company, then the Franchisee's owner(s) are also identified on the cover page. In this Agreement, "we," "us" and "our" refers to Pizza Fusion Holding, Inc., the franchisor. "You" and "your" refers to the Franchisee. "Owners" means the person(s) listed on the cover page and all other persons whom we may subsequently approve to acquire an interest in Franchisee. "Operating Principal" means the person designated as the Operating Principal on the cover page and who meets the criteria in Section 6.15 of this Agreement. RECITALS A. We are in the business of franchising others to operate "Pizza Fusion" restaurant businesses, which feature a competitively priced menu of organic and all-natural gourmet pizza and related food specialties, and standards and methods of operation designed to be "green," and which are operated in buildings that bear our interior and/or exterior trade dress (each a "Restaurant" or "Franchised Business"). B. We have developed a distinctive set of specifications and operating procedures (collectively, the "System") for Restaurants. The distinguishing characteristics of the System include: dough, sauce, and other recipes and products that are prepared or manufactured in accordance with our proprietary and/or secret recipes, trade secrets, standards, and specifications that we deem secret ("Secret Recipe Products") and other designated and approved products; standards and procedures for business operations, including "green" design, construction, and operating practices; equipment layouts, graphics packages and signage, distinctive interior and exterior design and accessories, quality and uniformity of products and services offered; procedures for management and inventory control; training and assistance; advertising and promotional programs; and customer development and service techniques. These are not necessarily all of the elements of the System. We may change, improve, add to, delete from, and further develop the elements of the System from time to time. C. We identify the businesses operating under the System by means of the "Pizza Fusion" name and certain other trademarks, service marks, trade names, signs, logos, and other indicia of origin (collectively, the "Proprietary Marks"). We may designate other trade names, service marks, and trademarks (and also periodically delete old names and marks) as Proprietary Marks. D. You understand the importance of our high standards of quality, appearance, and service and the necessity of operating your Franchised Business in accordance with this Agreement and our standards, specifications and procedures. Therefore, the parties, who each intend to be legally bound by this Agreement, and for good and valuable consideration, now agree as follows: Page 1 of 39 + +Source: PF HOSPITALITY GROUP INC., 10-12G, 9/23/2015 + + + + + +1. RIGHTS GRANTED 1.1. Grant of Franchise. 1.1.1 We grant you the right, and you accept the obligation, to use the Proprietary Marks and the System to operate one Restaurant (the "Franchised Business") at the Premises, in accordance with the terms of this Agreement. The term "Premises" means the location shown on the cover page to this Agreement or a location that is determined under process set out in Section 4.1 [Site Selection and Approval] below. 1.1.2 Your rights under this Agreement have limits, such as the following: (a) You have no right to operate the Franchised Business at any location other than the Premises, as described in Section 1.2 [Activities of Franchised Business] below; (b) You have no right to sublicense either the Proprietary Marks or the System to anyone else; and (c) You have no right to use the Proprietary Marks or the System in any manner except as expressly authorized under this Agreement. 1.2. Activities of Franchised Business. 1.2.1 You may operate the Franchised Business only from the Premises, only in accordance with the requirements of this Agreement and the procedures and terms and conditions set forth in the Pizza Fusion Manuals, and only to sell Products to: (a) retail customers for consumption on the Premises or for personal, carry out consumption; and (b) catering and delivery customers who are located within the area specified in Exhibit A as the "Delivery/Catering and Advertising Area". We may specify terms and conditions for catering and delivery activities, which may include guidelines and requirements relating to insurance coverage, vehicle use in such activities, and use of a third party phone order processing center as we may require. Without our prior written approval, you may not engage in any other type of sale, including, but not limited to: selling, distributing, or otherwise providing, any services or products to third parties at wholesale, or for resale or distribution by any third party; and selling, distributing or otherwise providing any products and/or services through catalogs, mail order, toll free numbers for delivery, or electronic means (e.g., the Internet). You acknowledge and agree that the sole purpose of the Delivery/Catering and Advertising Area is to specify the geographic area in which you will be authorized to provide catering and delivery services and conduct advertising under the terms of this Agreement, and that the designation of the Delivery/Catering and Advertising Area does not grant, and will not be implied to grant, any territorial rights or protections to you or the Franchised Business, and we reserve all other rights as set forth in Section 1.3 [Our Limitations and Our Reserved Rights] below. 1.2.2 You may advertise and market the Franchised Business and directly solicit customers only within your Delivery/Catering and Advertising Area (subject to Section 9.3 [Regional Fund] below). You agree not to: (a) advertise or market the services of your Franchised Business outside of the Delivery/Catering and Advertising Area; and/or (b) engage in direct solicitation of customers outside of the Delivery/Catering and Advertising Area. The term "direct solicitation" includes, but is not limited to, solicitation in person, by telephone, by mail, by e-mail, the internet, or other electronic means, advertising, marketing, and by distribution of brochures, business cards or other materials. 1.2.3. If any of your advertising within the Delivery/Catering and Advertising Area is in media that will or may reach a significant number of persons outside of the Delivery/Catering and Advertising Area, you must notify us in advance and obtain our prior written consent (in addition to the requirements in Section 9.3 [Regional Fund] below). We may periodically establish rules and policies regarding such advertising. Page 2 of 39 + +Source: PF HOSPITALITY GROUP INC., 10-12G, 9/23/2015 + + + + + +1.3. Our Limitations and Our Reserved Rights. The rights granted to you under this Agreement are not exclusive. We and our affiliates have the right to conduct any business activities, under any name, and at (or from) any location notwithstanding those business activities' actual or threatened impact on sales of the Franchised Business. For example, we may, among other things, on any terms and conditions we deem advisable, and without granting you any rights therein, do any or all of the following: 1.3.1 We have the right to establish, and license others to establish, Franchised Businesses at any location notwithstanding their proximity to the Franchised Business or the Premises or their actual or threatened impact on sales of the Franchised Business. 1.3.2 We have the right to establish, and license others to establish, businesses under other systems or other proprietary marks, which businesses may offer or sell products and services that are different from the principal products and services offered from the Franchised Business, and which businesses may be located within or outside the Premises, notwithstanding such business' proximity to the Franchised Business or the Premises or their actual or threatened impact on sales of the Franchised Business. 1.3.3 We have the right to acquire and operate any business of any kind or be acquired by another business, notwithstanding such business' actual or threatened impact on sales of the Franchised Business. 1.3.4 We have the right to establish, and license others to establish, Restaurants at any Institutional Facility (as defined below), notwithstanding such Restaurants' proximity to the Franchised Business or their actual or threatened impact on sales of the Franchised Business. The term "Institutional Facility" is agreed to mean any outlet that primarily serves the customers located within the facility, such as captive audience facilities and limited purpose or limited access facilities, and includes among other things: airports; train or bus stations; travel plazas; factories; federal, state or local government facilities (including military bases); hospitals and other health-care facilities; stadiums and arenas; recreational facilities; schools, colleges and other academic facilities; convention centers; seasonal facilities; shopping malls; theaters; museums; and workplace cafeterias. 1.3.5 We have the right to sell and distribute, directly or indirectly, through any channels of distribution (including, but not limited to, supermarkets, gourmet shops, mail order, and on the internet) any products or services (including products and services that are the same or similar to those offered by Restaurants and using the Pizza Fusion name), from any location or to any purchaser or customer, advertise in any area (including in your Delivery/Catering and Advertising Area) and/or serve customers who reside within your Delivery/Catering and Advertising Area. You acknowledge that customers have total freedom to select the Pizza Fusion Restaurant that they wish to patronize. 1.3.6 We have the right to provide, and license others to provide, products or services to Major Accounts (as that term is defined below) at any location, notwithstanding such Major Accounts' proximity to the Franchised Business or the Premises or their actual or threatened impact on sales at the Franchised Business. The term "Major Account" is agreed to mean any customer we designate as such, based upon our sole determination that, because such customer conducts its business at multiple locations and we deem this customer to be of strategic importance, the account, services and pricing of such customer shall be negotiated and secured either (i) by us or (ii) with our assistance, approval and oversight; as further described in Section 6.12 [Major Accounts] below. 1.4. Limitations. You agree not to engage in any of the sales activities that we have reserved to ourselves in Sections 1.3 [Our Limitations and Our Reserved Rights] above. Page 3 of 39 + +Source: PF HOSPITALITY GROUP INC., 10-12G, 9/23/2015 + + + + + +2. TERM; SUCCESSOR FRANCHISE AGREEMENTS 2.1. Term. This Agreement expires ten (10) years from the Agreement Date (the "Term"), unless it is terminated sooner as provided in other sections of this Agreement. 2.2. Successor Franchise Agreements. When this Agreement expires, you will have the option to continue the franchise relationship with us for two (2) additional terms of ten (10) years each. We may require you to satisfy any or all of the following as a condition of continuing the franchise relationship with us: 2.2.1. You must give us written notice of your desire to exercise your option not more than twelve (12) months and not less than nine (9) months before this Agreement expires. 2.2.2. You and all Owners must execute the standard form of Pizza Fusion Franchise Agreement that we are then offering to new franchisees (or the standard form that we most recently offered to new franchisees, if we are not at that time actively offering new franchises) (the "Successor Franchise Agreement"). The terms of the Successor Franchise Agreement may be substantially different from the terms of this Agreement and may require the payment of different fees. 2.2.3. You must pay all amounts owed to us, to our affiliates, and to your major suppliers; you must not be in default of this Agreement or any other agreement with us, our affiliates, or our suppliers; and you must have substantially and timely complied with all of your obligations throughout the term of each such agreement. 2.2.4. If we inspect your Franchised Business and give you notice at least six months before the end of the term of any required maintenance, refurbishing, renovating, and upgrading (including purchasing one or more new delivery vehicles); then you must complete all such required maintenance, refurbishing, renovating, and upgrading to our reasonable satisfaction no later than 60 days before expiration of the term. 2.2.5. You must pay us a discounted successor franchise fee in the amount of $7,500 or twenty-five percent (25%) of our then- current initial franchise fee (whichever is more). 2.2.6. You and all of your Owners must execute and deliver to us a general release, in a form we require, of any and all claims against us, our affiliates, and our past, present and future officers, directors, shareholders and employees arising out of or relating to your Franchised Business. 2.2.7. You, the Operating Principal, and/or your designated employees must successfully complete any additional or refresher training courses that we may require. 3. FEES 3.1. Initial Franchise Fee. You must pay us an initial franchise fee of $30,000 when you sign this Agreement. The initial franchise fee is paid in consideration of the rights granted in Section 1 and is fully earned at the time paid. You acknowledge that we have no obligation to refund the initial franchise fee in whole or in part for any reason. 3.2. Royalty 3.2.1. You must pay us a royalty fee ("Royalty") equal to six percent (6%) of your Gross Revenues. The Royalty is in consideration of your right to use the Proprietary Marks and the System in accordance with this Agreement, and not in exchange for any specific services we render. If by reason of state or other law, we are prohibited from receiving a percentage of certain components of Gross Revenues (including alcoholic-beverage sales), you must pay us an equivalent amount by increasing the Royalty percentage applied to Gross Revenues exclusive of the prohibited components. Page 4 of 39 + +Source: PF HOSPITALITY GROUP INC., 10-12G, 9/23/2015 + + + + + +3.2.2. You must calculate and pay the Royalty weekly, based on your Gross Revenues for the previous Period. For purposes of this Agreement, unless otherwise designated by us in writing, a "Period" begins on Monday and ends on the following Sunday. 3.2.3. "Gross Revenues" means all revenue from the sale of all services and products and all other income of every kind and nature related to, derived from, or originating from the Franchised Business, including proceeds of any business interruption insurance policies, whether for cash or credit, and regardless of collection in the case of credit; provided, however, that "Gross Revenues" does not include any coupon sales (for which customers do not pay for product), customer refunds, sales taxes or other taxes you collected from customers and actually transmitted to the appropriate taxing authorities. 3.3. Advertising Contributions. During any Period that the Marketing Fund (as defined in Section 9.1 [Pizza Fusion Marketing Fund] below) is in effect, you must make a contribution as described in Section 9.1 [Pizza Fusion Marketing Fund] below equal to three percent (3%) of your Gross Revenues for the preceding Period. Additionally, during any Period that a Regional Fund (as defined in Section 9.3 [Regional Fund] below) for the area in which your Franchised Business is located is in effect, you must make a contribution as described in Section 9.2 [Local Marketing] below in such amounts as we specify in writing up to two percent (2%) of your Gross Revenues for the preceding Period; in addition, you may be required to contribute to a Regional Fund up to an additional two percent (2%) of Gross Revenues of your Franchised Business if the members of that Regional Fund vote to increase the total contribution, as provided in Section 9.3.5 [Regional Fund] below. Required contributions to the Marketing Fund and Regional Fund are referred to as "Advertising Contributions." 3.4. Index. The parties agree that all fixed dollar amounts set out in this Agreement are subject to adjustment, up or down, depending on changes in the Index. For the purpose of this Agreement, the term "Index" is agreed to mean the Consumer Price Index (1982-84=100: all items; CPI- U; all urban consumers) published by the U.S. Bureau of Labor Statistics (or if the Index is no longer published, a successor index that we may reasonably specify in the Manuals or otherwise in writing). We have the right to decide whether or not to make adjustments to fixed dollar amounts set out in this Agreement and if we decide to invoke that right, we will make changes not more than once each year by sending you written notice of the change. 3.5. Due Date for Payment. Your Royalty payments and Advertising Contributions are due by the first (1st) day after the end of each Period (or the next business day if the first day is a Sunday or federal holiday) (as of the Agreement Date, the due date is Monday of each week). You must pay all other amounts due to us as specified in this Agreement or, if no time is specified, such amounts are due upon receipt of an invoice from us. 3.6. Method of Payment. You must make all payments to us by the method or methods that we specify from time to time. We require payment via wire transfer or electronic debit to your bank account, and you must maintain sufficient balance in your operating account to meet the payment requirements. You must furnish us and your bank with all authorizations necessary to effect payment by the methods we specify. You may not, under any circumstances, set off, deduct or otherwise withhold any Royalty fees, Advertising Contributions, interest charges, or any other monies payable under this Agreement on grounds of our alleged non-performance of any obligations. Additionally, you authorize us to charge against any of your credit cards any amounts due to us or to any of our affiliates. You agree to supply us a written list of all of your credit cards (including card number, name, and expiration date) and to update that list periodically, if there are changes to the information. Page 5 of 39 + +Source: PF HOSPITALITY GROUP INC., 10-12G, 9/23/2015 + + + + + +3.7. Delinquency. If any Royalties or other amounts owed to us are not paid in full by the due date, we have the right to charge interest on the overdue amount at the rate of one and one-half percent (1.5%) per month (or the maximum rate permitted by applicable law, if less than 1.5%) from the date such amount was due until paid in full. Unpaid interest charges will compound annually. In addition, we will have the right to charge a late fee for each occurrence of a payment that is more than 30 days past due, which fee will be $100 for the first such occurrence, $200 for the second such occurrence, and $300 for the third and each subsequent occurrence during the Term of this Agreement. The late fee is to compensate us for our administrative costs incurred in enforcing your obligation to pay us. 3.8. Dishonored Payments. For any amount that you must pay to us or our affiliates, if we are not able to successfully complete a wire transfer or electronic debit for such payment as described Section 3.6 [Method of Payment] above, or if a check that you issue for such payment is returned by the bank against which it was drawn, due to insufficient funds in your account(s), closure of your account(s) or any other reason resulting in the nonpayment (each a "Dishonored Payment"), we have the right to charge a fee of $100 per occurrence (a "Dishonored Payment Charge"). We will notify you of each Dishonored Payment and any Dishonored Payment Charge that we impose. We may add the Dishonored Payment Charge to the amount to be paid via the next wire transfer or electronic debit. The Dishonored Payment Charge applies in addition to any late fee and interest that we have the right to charge, or any other remedy to which we are entitled, under this Agreement, at law, or in equity. 3.9 Taxes. You are responsible for all taxes levied or assessed on you or the Franchised Business in connection with your activities under this Agreement. 3.10 Obligations Absolute. You agree that your obligations to pay us (as well as our affiliates) under this Agreement or any other agreement in connection to the Franchised Business are absolute and unconditional, and not subject to abatement or setoff for past or future claims that you may assert. 3.11 Security Agreement. Upon our written request, you agree to grant to us a first-priority security interest in all of your assets (including all proceeds thereof and after-acquired property), as security for all your monetary and other obligations to us or our affiliates arising under or relating to this Agreement or any other agreement. Such assets include all furniture, fixtures, machinery, equipment, inventory and all other property, (tangible or intangible), that you now own or later acquire, used in connection with the Franchised Business, and wheresoever located as well as all contractual and related rights you have under this Agreement and all other agreements between the parties. If we request, you must execute such financing statements, continuation statements, notices of lien, assignments or other documents as we may require in order to perfect and maintain our security interest, including but not limited to a UCC-1 Financing Statement. Alternatively, you authorize us to execute any of the foregoing financing statements, continuation statements, notices of lien, assignments, and/or other documents on your behalf, or on our own (in our name), describing the collateral in such manner as we consider appropriate. You hereby grant us an irrevocable power of attorney, coupled with an interest, to execute, in your name, any of such financing statements, continuation statements, notices of lien, assignments or other documents. You must pay all filing fees and costs for perfecting our security interest. 4. SITE SELECTION, PREPARATION, AND OPENING DEADLINE 4.1. Site Selection and Approval. You will be responsible, at your own expense, for finding and then acquiring, by lease or purchase, a suitable site at which to develop and operate your Franchised Business (the "Premises"). Any sites that you propose must be within the area identified in Exhibit A (the "Site Selection Area"). You acknowledge and agree that: (a) the sole purpose of designating a Site Selection Area is to identify the geographic area in which you intend (and, upon our written approval, will be authorized) to operate a Franchised Business under the terms of this Agreement; (b) the designation of the Site Selection Area does not grant, and will not be implied to grant, any territorial rights or protections to you or to the Franchised Business; and (c) we reserve all rights as set forth elsewhere in this Agreement, including but not limited to those described in Section 1.3 [Our Limitations and Our Reserved Rights] above. Before committing to a site, you must obtain our written approval of the site to serve as the Premises, as described in Section 4.2 [Site Lease or Acquisition] below. Page 6 of 39 + +Source: PF HOSPITALITY GROUP INC., 10-12G, 9/23/2015 + + + + + +4.1.1. We will give you certain assistance in connection with your selection of Premises and establishment of your Franchised Business: (a) We will provide to you a copy of our standard site selection criteria and guidelines, including our minimum standards for Franchised Businesses. (b) We will have the right to provide to you the degree of site selection counseling and assistance that we deem appropriate. If we (either on our own initiative or at your request) consider on-site evaluation necessary or appropriate, you agree to reimburse us for the reasonable expenses that we incur in connection with providing that on-site evaluation (including the cost of travel, lodging and meals). (c) We will provide, at no charge, our standard image specifications for the construction of the Franchised Business, improvement of the premises, and for the layout of fixtures, furnishings, equipment, and signs. On or before the date you open the Franchised Business, you must return to us the plans and specifications we provided to you (and any copies that you may have made or shared with other parties). 4.1.2 You must submit a site review report and such other information or materials as we may reasonably require (including but not limited to, photographs, demographic information, an option contract, letter of intent, or other evidence satisfactory to us that confirms your favorable prospects for obtaining the site). We will review site approval submissions on a first-in basis. (a) If we do not approve in writing the proposed site, you must, within 30 days after our disapproval of the proposed site, submit a new proposed site within the Delivery/Catering and Advertising Area for our review and approval. (b) By no later than 90 days after the Agreement Date, you must have obtained our written approval of a site. If you have not done so, we may elect to terminate this Agreement, and we will not refund to you the Initial Franchise Fee or any other money paid to us. (c) We will not unreasonably withhold approval of any site that meets our standards. You may not lease or otherwise acquire the right to occupy the proposed site without our prior written approval. 4.2 Site Lease or Acquisition. You must, within 30 days after we approve a site for the Franchised Business (but in no event later than 120 days after the Agreement Date), either by lease or purchase the approved site for the Premises, as further described below. 4.2.1 If you will occupy the Premises under a lease or sublease, you must submit the lease to us for our review and our prior written approval. Your lease (or rider to a lease) must include provisions that will: (a) Allow us the right to elect to take an assignment of the leasehold interest upon termination or expiration of your rights under this Agreement, and that allow us (or our designee) to operate a "Pizza Fusion" restaurant upon the premises for the remaining term of the lease or sublease; (b) Require the lessor to provide us with a copy of any written notice of deficiency under the lease sent to you, at the same time as notice is given to you (as the lessee under the lease), and which grants to us the right (but not obligation) to cure any deficiency by you under the lease within fifteen (15) business days after the expiration of the period in which you had to cure any such default should you fail to do so; Page 7 of 39 + +Source: PF HOSPITALITY GROUP INC., 10-12G, 9/23/2015 + + + + + +(c) Recognize your right to display and use the Proprietary Marks in accordance with the specifications required by the Manual, subject only to the provisions of applicable law; (d) Require that the premises be used solely for the operation of a Franchised Business; and (e) Acknowledge that, if this Agreement is terminated or expires (without you renewing your franchise rights): (i) you must take certain steps to de-identify the location as a Pizza Fusion Restaurant; and (ii) lessor will cooperate with us in enforcing your obligation to de-identity, including allowing us, our employees and/or agents to enter the premises and remove signs, décor and materials that bear or display our Proprietary Marks, designs, or logos. 4.2.2 You must deliver to us a copy of the signed lease or sublease to us within fifteen (15) days after it has been signed by you and by the lessor. You may not execute or agree to any modification of the lease or sublease that would affect our rights without our prior written approval of the modification. 4.3 Location Development and Preparation. You must construct, furnish, and open the Franchised Business as required by this Agreement and must open the Franchised Business not later than six (6) months after securing the necessary authorization and approval for permits and/or certificates. Time is of the essence. 4.3.1 You agree that you will do all of the following things: (a) make sure that you have obtained all necessary zoning permits as well as all required building, utility, health, sign permits and licenses, and any other required permits and licenses; (b) buy or lease Products and other materials as required under this Agreement (as well as the other specifications that we provide in writing); (c) in accordance with Section 4.3.2 [Location Development and Preparation] below, prepare all plans and complete construction, or remodeling, of the Franchised Business, and complete installation of all equipment in compliance with plans and specifications for the Franchised Business that we have approved, as well as all applicable federal, state and local laws, codes and regulations (including, without limitation, the applicable provisions of the ADA, zoning requirements, and permitting requirements), ordinances, building codes and permit requirements; (d) purchase and install at the Premises all interior and exterior signage, from such suppliers, that we may designate. From time to time, we have the right to require that you purchase and install replacement or additional Signage; (e) obtain all customary contractors' sworn statements and partial and final waivers of lien for construction, remodeling, decorating and installation services; (f) obtain and maintain in force during the entire period of construction the insurance required under this Agreement or as otherwise specified in the Manuals; (g) satisfy all of our pre-opening requirements, whether set out in this Agreement, the Manuals, or as we may otherwise specify; (h) You must obtain a Certificate of Occupancy within 10 days after completing construction, unless we agree in writing to extend this deadline; and Page 8 of 39 + +Source: PF HOSPITALITY GROUP INC., 10-12G, 9/23/2015 + + + + + +(i) within thirty (30) days after the store opening, you agree to provide us a full written breakdown of all costs associated with the development of your Franchised Business in the form that we may reasonably require. 4.3.2 Before starting and during any construction or renovation of the Premises, you must, at your own expense, meet all of the following requirements: (a) You must employ a qualified, licensed architect or engineer who we have designated or approved in writing to prepare, for our approval, preliminary plans and specifications for site improvement and construction of the Franchised Business based upon prototype design and image specifications we furnished to you. We will not unreasonably withhold our approval of special plans and specifications, prepared at your expense, when the Approved Location will not accommodate our standard plans and specifications, provided that such plans and specifications conform to our general design criteria. You will be responsible for the design and layout that your architect or engineer prepares. If we express an opinion about the plans or indicate our approval, it will be merely for the purpose of our own determination that your plans will satisfy our internal standards, specifications, and layout. We will not be in a position to provide any assurances, and therefore can not be deemed to have given any information about, whether your plans satisfy any federal, state, and local laws, codes and regulations (including, without limitation, the Americans with Disabilities Act ("ADA")). (b) After obtaining any required governmental approvals and clearances, you must submit to us, for our approval, final plans for construction based upon the preliminary plans and specifications. Once approved by us, such final plans may not be changed or modified without our prior written consent. (c) You must employ a qualified, licensed general contractor to construct the Franchised Business and complete all improvements. (d) Your architect or engineer must also comply with all applicable zoning, signage, seating capacity, parking requirements and alcoholic-beverage (i.e., beer and wine products that we designate or approve) licensing and storage requirements. (e) Within 10 days after commencing construction, you must provide us with written notice of the date you began construction. 4.3.3 We may require that you provide us a written certification from your registered architect that the Franchised Business has been constructed, furnished, equipped, and decorated in accordance with approved plans and specifications. 4.3.4 We may recommend that you use a construction project manager that we designate for constructing the Premises. If we do so and you choose not to use our recommended construction manager, you must hire a general contractor who is reasonably acceptable to us and who must have the following minimum insurance coverage: (a) commercial general liability in an amount of $2,000,000 combined single limit; (b) comprehensive automobile liability for owned, hired and non-owned motor vehicles in an amount of $1,000,000 combined single limit; (c) workers' compensation, occupational diseases and disability benefits in accordance with applicable statutory requirements; (d) employers' liability in an amount of $1,000,000; (e) employee fidelity bond of $2,000,000; and (f) umbrella form excess liability insurance in excess of the limits provided by the commercial general liability policy required above with limits of $3,000,000 per occurrence and annual aggregate. Page 9 of 39 + +Source: PF HOSPITALITY GROUP INC., 10-12G, 9/23/2015 + + + + + +4.3.5 Before you can open for business, you must satisfy all of our pre-opening requirements, whether they are set out in this Agreement, the Manuals, or as we may otherwise specify, and you must obtain our written approval prior to opening the Franchised Business. You must open the Franchised Business within seven days after obtaining our written approval for opening, unless we agree in writing to extend this deadline. 4.4. Our Review. Any reviews that we conduct under this Section 4 are only for our benefit. You acknowledge that our review and approval of a site, lease, sublease, design plans or renovation plans for a Franchised Business do not constitute a recommendation, endorsement, or guarantee of the suitability of that location or the terms of the lease, or sublease, or purchase agreement. You agree that you will take all steps necessary to determine for yourself whether a particular location and the terms of any lease, sublease, or purchase agreement for the site are beneficial and acceptable to you. 4.5 Opening Deadline. You must begin operating the Franchised Business by the opening deadline specified in Appendix A. The date you actually open the Franchised Business is the "Opening Date." 4.6 Relocation and other Uses of the Premises. You may not relocate the Franchised Business from the Premises without our prior written consent. You may only use the Premises for the purpose of operating your Franchised Business and for no other purpose. You may not sublet or otherwise allow any other party to operate any enterprise at your Premises without our prior written approval. 5. TRAINING 5.1. Initial Training Program 5.1.1. Before you begin operating, the two persons who you designate (and who we find acceptable) to provide managerial responsibilities (each a "Manager Trainee") must all successfully attend (at the same time) and successfully complete our initial training program (we may designate portions of the training program that each person must attend and successfully complete), which is held at our headquarters and/or another location(s) that we specify. One Manager Trainee must be your Operating Principal (who meets the criteria in Section 6.15 of this Agreement), unless we mutually agree otherwise. You may designate another person who will be active in the day-to-day activities and management of the Franchised Business to be the second Manager Trainee. You may ask that additional employees be allowed to attend the portions of the initial training that are designed for your employees, and we will have the right to approve or disapprove that request. All trainees must be persons that we find acceptable at all times to serve in their respective capacities. As of the Effective Date, our training program has two components, as follows: (a) An Advanced Operations Course for your Operating Principal, which consists of up to twelve days for your Operating Principal and is conducted at our training facilities in Broward County, Florida, or at another location that we may specify in writing. (b) A Basic Operations Course for any Manager Trainee other than your Operating Principal, which consists of up to twelve days of training and is conducted at our training facilities in Broward County, Florida, or at another location that we may specify in writing. Your Manager Trainees (other than your Operating Principal), and such of the Franchisee's other employees as we designate must attend this component of training. 5.1.2. We will issue a certificate of completion for each Manager Trainee who completes the initial training program we require to our satisfaction (each such person will be referred to as a "Certified Manager"). We have the right to determine whether a person has or has not successfully completed training. If you (or your personnel) fail to complete initial training to our satisfaction, we may permit you (or they) to repeat the course or allow you to send a substitute to the next available scheduled training session; however, we will have no obligation to extend the opening deadline in Section 4 for this purpose. Page 10 of 39 + +Source: PF HOSPITALITY GROUP INC., 10-12G, 9/23/2015 + + + + + +5.1.3. We have the right to reduce the duration or content of the training program for any trainee who has prior experience with our concept or in similar businesses. We also may allow you to train certain of your managers (which may include Certified Managers) and successors in those positions at your location. 5.1.4. Failure to complete the initial training program constitutes grounds for termination, as provided in Section 15 of this Agreement. 5.2. Opening Training and Assistance. We provide up to fourteen (14) days of pre-opening training and opening assistance at your Premises. The Operating Principal and the other Manager Trainee and such of your other employees as we designate must attend this component of training, which will begin approximately seven days before the Opening Date and conclude approximately seven days thereafter. 5.3. Additional Training by Us. We may require your Certified Managers and/or other designated persons to successfully complete additional training courses during the Term of this Agreement at a location that we specify (including an annual conference for franchisees in the System). We may also offer optional training programs. You may also request that we provide additional training at the location of your Franchised Business, and we will provide such training if we determine that we are able to do so. We may charge you a training fee and our out-of-pocket expenses for all additional training programs, whether mandatory or optional, or whether you request or we require such training, which fee shall be as set forth in the Manual or otherwise in writing. 5.4. Training by You. We have the right to specify training programs related to the System that you must conduct for your employees using approved training materials or that we will provide at our headquarters. For any training of your personnel that we conduct, you are responsible for expenses incurred while they attend training, including salaries, benefits, travel, lodging, meals, and other related expenses. We reserve the right to charge you for training additional personnel. 5.5. Training Materials and Methods. All training materials that we provide to you remain our property. We have the right to provide training programs in person, on tape, via the Internet or other electronic means, or by other means and media, as we determine. 5.6. Expenses. We will provide instructors, facilities, and materials for the initial training program at no charge, provided that all of your personnel are trained during the same training session. We reserve the right to charge a reasonable fee for training additional personnel (in excess of two), re-training persons who are repeating the course or replacing a person who did not pass. For all training, including initial training, you are responsible for any travel expenses, living expenses, wages, and other expenses incurred by your trainees. 6. OPERATIONS 6.1. Compliance with Standards. You agree to comply with all mandatory specifications and procedures set forth from time to time in our confidential operating manual (the "Manual"). You acknowledge that the accounting practices, record keeping, software, services, and operation of your Franchised Business are important to us and our other franchisees. However, you acknowledge that we have the right to vary our standards and specifications, in our reasonable judgment, to accommodate circumstances of individual franchisees. 6.2. Products and Services You May Offer. You may offer customers only the products and services that we have expressly authorized Franchised Businesses to offer, as we have the right to specify in the Manual from time to time. We have the right to change the authorized products and services, and we may designate specific products or services as optional or mandatory (including alcoholic beverages). You acknowledge that we may approve some services, products, and other items for certain franchisees and not others based on legitimate business reasons. You must use menus that meet our then-current specifications as to content, materials, finish, style, pattern, and design. Page 11 of 39 + +Source: PF HOSPITALITY GROUP INC., 10-12G, 9/23/2015 + + + + + +6.3. Secret Recipe Products. We have developed and may continue to develop additional Secret Recipe Products. The Secret Recipe Products are our proprietary products. In order to maintain the high standards of quality, taste, and uniformity of these products and protect the proprietary nature of these products, you agree to purchase the Secret Recipe Products only from us, our affiliates or from sources that we designate or approve and license 6.4 Sourcing of Other Products, Equipment and Supplies. 6.4.1. Without limiting Section 6.3 [Secret Recipe Products] above, we have the right to require that all of the food items, equipment (including but not limited to vehicles used in connection with the Franchised Business), supplies, materials, and other products and services used or offered for sale at your Franchised Business: (a) meet specifications that we establish from time to time; and/or (b) be purchased only from suppliers that we have expressly approved; and/or (c) be purchased only from a single source (which may include us or our affiliates or a buying cooperative that we organize). To the extent that we establish specifications, require approval of suppliers, or designate specific suppliers for particular items, we will publish our requirements in the Manual. 6.4.2. If you would like to use or offer food items (other than the Secret Recipe Products), equipment, supplies, materials, and other products and services that we have not approved, or purchase from a vendor, supplier, distributor, or other source (together, "supplier(s)") that we have not approved, then you must submit to us a written request for approval. We have the ongoing right to inspect any proposed supplier's facilities and to test samples of the proposed products or services. You agree to pay us an amount not to exceed the reasonable cost of the inspection and our actual cost of testing the proposed product or service, including personnel and travel costs, whether or not we ultimately approve the supplier. We have the right to grant, deny, or revoke approval of products, services, and suppliers. We will notify you in writing of our decision as soon as practicable following our evaluation. We reserve the right to reinspect the facilities and products of any approved supplier and to revoke approval if we find that the supplier fails to meet any of our then-current criteria. If you receive a notice of revocation of approval, you agree to immediately stop buying products or services from the disapproved supplier and, in the case of revocation based on failure of products to meet our standards, you agree to dispose of your remaining inventory of the disapproved supplier's products as we direct. 6.4.3. If you wish to test market an item that we have not approved, then, so long as we have given you our prior written approval, you may do so for so long, and on such terms, that we mutually agree upon (a "Test"), and the item so tested, and all associated formulae, plans, and materials, will become our property. If, following the Test, we determine that we will approve the tested item, then for so long as we deem that item to be an "approved item" under this Agreement, you will have the right to use that item under the terms of this Agreement; and we will have the right to use and market that item as we see fit, including but not limited to use in our own Restaurants as well as that of other licensees and franchisees, without compensation to you. You agree to sign such documents (and require your employees and any independent contractors that you have engaged to sign such documents) as we may require in order to implement the provisions of this Section 6.4.3 [Sourcing of Other Products, Equipment and Supplies]. 6.4.4. We and our affiliates may receive payments or other compensation from suppliers on account of such suppliers' dealings with you and other franchisees; and, we may use all amounts so received for any purpose we and our affiliates deem appropriate. 6.5. Delivery Vehicles. If you wish to use a vehicle to provide delivery services (a "Delivery Vehicle") as part of your Franchised Business, you must comply with the specifications and standards that we may periodically prescribe in the Manuals for Delivery Vehicles. Our specifications and standards may include, among other things: designating Delivery Vehicles specific make and model; limitations on the Useful Life for a Delivery Vehicle and standards for maintenance or repair services. Page 12 of 39 + +Source: PF HOSPITALITY GROUP INC., 10-12G, 9/23/2015 + + + + + +6.5.1. The term "Useful Life" means the period of time after which you must stop using the Delivery Vehicle for the Franchised Business. We have the right to determine the Useful Life of any Delivery Vehicle, which may include reasonable standards as to how many model years old the vehicle may be, the appearance of the vehicle, and the performance of the vehicle. After the Useful Life, you must remove all Proprietary Marks and any other indicia associating the Delivery Vehicle with the System, and immediately purchase or lease a new Delivery Vehicle. 6.5.2. We have the right to specify the makes and models of Delivery Vehicles approved for use by our franchisees, and anticipate that we will make changes over time to reflect and take advantage of advances in technology and/or alternative energy powered vehicles. 6.6. Alcohol Permits. Before you begin operating the Franchised Business you must obtain, and at all times thereafter you must maintain, all licenses and permits required to sell, dispense, and store beer and wine beverages and be prepared to offer and sell such beer and wine products to customers at the Premises as we designate as mandatory product offerings, unless you obtain from us a written waiver of this requirement. You must comply with all laws and regulations relating to the selling, dispensing, and storing of alcoholic beverages. You must also comply with the standards, specifications, and terms that we may establish regarding the offer, sale, and presentation of alcoholic beverages, as require or approved products. You must obtain and maintain appropriate insurance coverage for you and for our benefit, including any minimum coverages that we may establish. 6.7. Image Standards. You must keep the Premises, vehicles, equipment, and uniforms used in the Franchised Business and/or by your employees in the highest degree of cleanliness, orderliness, appearance, sanitation, and repair in accordance with our standards and specifications, including but not limited to those set out in our Manuals. 6.8. Employees. Your employees must wear uniforms, or comply with such other dress code as we may require, and otherwise identify themselves with the Proprietary Marks at all times in the manner we specify while on a job for the Franchised Business. 6.9. Employment Responsibilities. You have sole responsibility for all employment decisions and functions related to your Franchised Business, including hiring, firing, compensation, benefits, work hours, work rules, record-keeping, supervision, and discipline of employees. You must take such steps as are necessary to ensure that your employees preserve good customer relations; render competent, prompt, courteous, and knowledgeable service; and meet any minimum standards that we may establish from time to time in the Manual, which may include standards as to the minimum number of employees, which we may determine, necessary to meet the anticipated volume of business and to achieve the goals of the System. 6.10. Customer Service Program. You acknowledge that providing superior customer service is a vital component of the System. You must participate in customer service programs, which we have the right to specify from time to time in the Manual. Such programs may include the use of independent evaluation service to conduct "mystery customer" quality control, customer satisfaction surveys, or any other quality control or evaluation programs. If you receive an unsatisfactory or failing report in connection with any such program, you must immediately implement any remedial actions we require and pay us all expenses we incurred to have the evaluation service evaluate the Franchised Business, and all expenses we may have incurred to inspect the Franchised Business thereafter. 6.11. Customer List. You must create and maintain, in such manner as we may from time to time require, a current customer list (the "Customer List") containing as to each of your customers, such customer's name, e-mail address, location address, telephone number and zip code (9 digits). You must provide a copy of such list to us on a quarterly basis (or at such other intervals as we may prescribe). The Customer List is, and remains, our exclusive property, you hereby assign to us all rights you now have or hereafter may acquire in the Customer List. After the expiration or termination of this Agreement, you may not retain, use or disclose the Customer List, or any of the information contained therein, without our written authorization. Page 13 of 39 + +Source: PF HOSPITALITY GROUP INC., 10-12G, 9/23/2015 + + + + + +6.12. Major Accounts 6.12.1. You acknowledge that our negotiation of Major Accounts, including rates and services to be performed, enhances the potential value of the System and inures to your benefit as well as to our benefit and that of other Restaurant franchisees. As noted in Section 1.3 [Our Limitations and Our Reserved Rights] above, we reserve the right to provide products and services to all Major Accounts. We may offer you the right to provide products and services to a Major Account within your Delivery/Catering and Advertising Area. If you accept the obligation to provide products and services to a Major Account, you must service such Major Account on our behalf, in accordance with the pricing and other terms that we negotiate with the Major Account customer. You may not enter into any relationship with a Major Account customer that we deem to conflict with the customer's Major Account arrangement with us. We will have the right to handle all billing and collection for services performed under a Major Account arrangement. Certain Major Account customers may require that we provide additional volume rebates, which we will negotiate with the customer on a case-by-case basis. You will have the option not to provide products or services to any Major Account customer that is offered to you. 6.12.2. We may terminate your right to provide products and services to a Major Account customer at any time by giving you at least 30 days' prior written notice, and you may terminate your right to provide products and services to a Major Account at any time by giving us at least 30 days' prior written notice. If we elect not to offer you the opportunity to provide products or services to a Major Account, if you decline the option to accept a Major Account, if your right to provide products or services to a Major Account terminates, or if you fail to satisfy the conditions and obligations of any Major Account agreement, we have the right to service and/or authorize others to service Major Account customers within your Delivery/Catering and Advertising Area without any compensation to you. We have no obligation to permit you to provide products or services to a Major Account or to transfer any Major Account customer to you if you are subsequently willing and able to provide service. 6.13. Inspections. We have the right, at any time during normal business hours: (i) to conduct inspections of the Franchised Business; (ii) to interview your employees, work crews, and customers; and (iii) to review your business records, including those maintained electronically or off premises. We can initiate these actions with or without prior notice to you. You must cooperate with such inspections by giving our representatives unrestricted access and rendering such assistance as our representatives may reasonably request. If we notify you of any deficiencies after the inspection, you must promptly take steps to correct them. If you fail to correct any deficiencies within a reasonable time, we have the right to correct such deficiencies and to invoice you for our expenses. 6.14. Compliance with Laws. You agree to operate the Franchised Business in full compliance with all applicable municipal, county, state, and federal laws, rules, regulations, and ordinances. You have sole responsibility for such compliance despite any information or advice that we may provide. (To the extent that the requirements of those laws are in conflict with the terms of this Agreement, the Manuals, or our other instructions, you must: (a) comply with those laws; and (b) immediately give us written notice of the conflict.) 6.15. Operating Principal and Management Supervision 6.15.1. If you are a corporation, partnership or LLC, you must have an individual owner serve as your Operating Principal. The Operating Principal must own a majority of the voting and ownership interests in the franchisee entity, unless you obtain our prior written approval for the Operating Principal to hold a smaller interest. The Operating Principal must complete our training program, must have authority over all business decisions related to the Franchised Business, and must have the power to bind you in all dealings with us. You may not change the Operating Principal without our prior approval. Page 14 of 39 + +Source: PF HOSPITALITY GROUP INC., 10-12G, 9/23/2015 + + + + + +6.15.2. At all times that the Franchised Business is operating, it must be under the personal, on-premises supervision of the Operating Principal who is a Certified Manager, or another individual who is a Certified Manager. You may not permit the Franchised Business to be operated, managed, directed, or controlled by any other person without our prior written consent. At least one Certified Manager must devote, on a full-time basis, his or her best efforts to managing and operating the Franchised Business. Unless we agree otherwise in writing, before the Operating Principal or any other manager may manage the Franchised Business, he or she must become a Certified Manager (as provided in Section 5.1.2 [Initial Training Program]) and acquire any food-safety-program certification that the local, state or municipality may require, as well as any other licenses, permits, and certifications that we may require from time to time. 6.15.3 If the Certified Manager is an individual other than Operating Principal, and such Certified Manager ceases to satisfy his or her obligations under this Agreement due to death, disability, termination of employment, or for any other reason, the Operating Principal must satisfy such obligations until you designate a new Certified Manager of the Franchised Business, who is acceptable to us and has successfully completed the initial training program we require. 6.15.4. All persons with a 5% or greater ownership interest in the franchise must sign a personal guaranty on the form attached to this Agreement as Appendix B. 6.16 Maintenance of Premises. You must at all times maintain the Franchised Business in a high degree of sanitation, repair, and condition, and must make such additions, alterations, repairs, and replacements (but no others without our prior written consent) as may be required for that purpose, including, without limitation, such periodic repainting or replacement of obsolete signs, furnishings, equipment, and decor as we may reasonably direct. 6.17 Ongoing Upgrades and Refurbishments. Throughout the term of this Agreement, you must maintain all of the fixtures, furnishings, equipment, decor, and signs that we prescribe from time to time in the Manuals or otherwise in writing. If we determine that additional or replacement equipment is needed because of a change in menu items or method of preparation and service, a change in technology, customer concerns, health or safety considerations, or because of any other reason, you agree that you will install the additional equipment or replacement equipment within the reasonable time we specify. 6.18 Five-Year Refurbishment and Renovations. At our request, but not more often than once every five (5) years (and not before the fifth year after you begin operating), unless sooner required by your lease, you must refurbish the Premises, at your expense, to conform to the restaurant design, façade, signage, trade dress, color schemes, and presentation of the Proprietary Marks in a manner consistent with the then- current image for new Pizza Fusion restaurants. Such refurbishment may include structural changes, installation of new equipment and signs, remodeling, redecoration, and modifications to existing improvements, and, shall be completed pursuant to such standards, specifications, and deadlines as we may reasonably specify. 6.19. Insurance. 6.19.1. Types and Amounts of Coverage. Throughout the entire Term, you must maintain such types of insurance, in such amounts, as we may require. Such insurance is in addition to any other insurance that may be required by applicable law, your landlord, or otherwise. Policies that we require must be written by an insurance company reasonably satisfactory to us with an A.M. Best rating of "A" or better, and, must name us as an additional insured party. At a minimum, such policies must include the following: (a) commercial general liability insurance, completed-operations and independent-contractors coverage in the amount of $1,000,000, per person/per occurrence for bodily injury and property damage combined with a general aggregate of $3,000,000. Page 15 of 39 + +Source: PF HOSPITALITY GROUP INC., 10-12G, 9/23/2015 + + + + + +(b) workers'-compensation coverage in the amount of at least $100,000/$500,000/$100,000, unemployment insurance and employer's liability insurance, as well as such other insurance as may be required by statute or rule of the state in which the Franchised Business is located; (c) fire, lightning, vandalism, theft, malicious mischief, flood (if in a special flood-hazard area), sprinkler damage, and the perils described in ex-tended-coverage insurance with primary and excess limits of not less than the full-replacement value of the supplies, furniture, fixtures, equipment, machinery, inventory, and plate glass having a deductible of not more than $1,000 and naming us as a loss payee; (d) automobile liability insurance-including coverage of vehicles not owned by you, but used by employees in connection with the Franchised Business, with a combination of primary and excess limits of not less than $1,000,000; (e) commercial blanket bond in the amount of $100,000; and (f) such other insurance, in such amounts, as we reasonably require for our and your protection. At any time, we may adjust the amounts of coverage required under such insurance policies and require different or additional kinds of insurance, including excess liability insurance. 6.19.2. Evidence of Insurance. By the dates specified below, an approved insurance company must issue a certificate of insurance showing compliance with the insurance requirements in this Section 6.19 [Insurance] and you must furnish us with a paid receipt showing the certificate number: (a) 30 days before beginning construction of the Premises; (b) if the Premises are constructed and presently owned or leased by you, 10 days from the Agreement Date; or (c) if the Premises are not presently owned or leased, 10 days after ownership of the Premises is conveyed to you or you sign a lease for the Premises. The certificate of insurance must include a statement by the insurer that the policy or policies may not be canceled, subject to nonrenewal, or materially altered without at least 30 days' prior written notice to us. Upon our request, you must supply us with copies of all insurance policies and proof of payment. Every year, you must send us current certificates of insurance and copies of all insurance policies. 6.19.3. Requirements for Construction and Renovation. In connection with any construction, renovation, refurbishment, or remodeling of the Premises, you must cause the general contractor to maintain commercial general liability insurance (with comprehensive automobile liability coverage for both owned and non-owned vehicles, builder's risk, product liability, and independent contractors coverage) with a reputable insurer. Such insurance must be in the amount of at least $1,000,000 and must name us and you as an additional named insured party, as our respective interests may appear. You must also cause the general contractor to maintain workers' compensation and employer's liability insurance as may be required by law. 6.19.4. Our Right to Participate in Claims Procedure. We, or our insurer, may participate in discussions with your insurance company or any claimant (in conjunction with your insurance company) regarding any claim. 6.19.5. Waiver of Subrogation. To the extent this Section may be effective without invalidating, or making it impossible to secure, insurance coverage from responsible insurance companies that are doing business in your state (even though an extra premium may result), with respect to any loss covered by insurance we and you then carry, neither party's insurance companies have any right of subrogation against those of the other. Page 16 of 39 + +Source: PF HOSPITALITY GROUP INC., 10-12G, 9/23/2015 + + + + + +6.19.6. Effect of Our Insurance. Any insurance that we maintain does not in any way limit or affect your obligation to obtain and maintain the foregoing policy or policies in the amounts specified in this Section. Our performance of your obligations will relieve you of liability under the indemnity provisions set forth in this Agreement. 6.19.7. Your Failure to Maintain Insurance. If, for any reason, you fail to procure or maintain the insurance required by this Agreement (as we may revise from time to time), we have the right (but not the duty) to procure such insurance. If we do so, we may charge the cost of such insurance, plus interest at the contract interest rate, to you. Upon demand, you must immediately pay us such charges, together with a reasonable fee for our expenses in so acting. 6.19.8. Group Insurance. We may make available to you insurance coverage through group or master policies we arrange (such as relating to property and casualty, workers' compensation, liability and health, life and disability insurance). 6.20. Vendors. You agree to promptly pay, when due, all trade creditors and vendors (including but not limited to any that are affiliated with us) that supply goods and/or services to you in connection with operating your Franchised Business. 6.21. General Advice. We will make available to you information about new developments, techniques, and improvements in the areas of operations, management, and marketing, to the same extent as we make the information available to other Restaurant franchisees in good standing. We may fulfill our obligation in this section through the distribution of printed or filmed material, an Extranet or other electronic forum, meetings or seminars, individual or group counseling, training programs, telephone communications, or other forms of communications. 6.22 Special Assistance. If you request, and we can reasonably accommodate such request, we will furnish non-routine guidance and assistance to deal with your unusual or unique operating problems at reasonable per diem fees and charges that we periodically establish, as well as our out-of-pocket expenses. 6.23 Credit Cards and Other Methods of Payment. At all times, you must maintain credit-card relationships with the credit- and debit-card issuers or sponsors, check or credit verification services, financial-center services, and electronic-fund-transfer systems that we designate as mandatory, and you must not use any such services or providers that we have not approved in writing or for which we have revoked our approval. We have the right to modify our requirements and designate additional approved or required methods of payment and vendors for processing such payments, and to revoke our approval of any service provider. You must comply with all our credit-card policies, including minimum purchase requirements for a customer's use of a credit card as prescribed in the Manual. 6.24 Conferences. We may conduct annual conferences or conventions, which may include training sessions. We may require your Operating Principal, Certified Managers, and other designated employees to attend the conferences. You will be solely responsible for all costs incurred by you and your employees in attending any conferences or conventions. 6.25 Pricing. We may, from time to time, but only to the extent permitted by law, establish and impose maximum and minimum prices for the goods and services that you are permitted to sell or offer to sell. If we do so, you must not set your prices below the minimum level that we have established, and not above the maximum level that we have established. 6.26 Certification of Performance. After we perform our preopening obligations under this Agreement, we may request that you execute a certification (the "Certification of Performance"), in a form we reasonably request, confirming such performance. If we make this request, you must execute and deliver the Certification of Performance to us within three-business days of our request. If, however, you do not reasonably believe that we have performed all our preopening obligations under this Agreement, you must, within said three-day period, provide us with written notice specifically describing the obligations that we have not performed. Not later than three-business days after we complete all the obligations specifically described in your notice, you must execute and deliver the Certification of Performance to us. You must do so even if we performed such obligations after the time performance was due under this Agreement. The term "preopening obligations" means such of our obligations to you under this Agreement that must be performed before the Opening Date for the Franchised Business. Page 17 of 39 + +Source: PF HOSPITALITY GROUP INC., 10-12G, 9/23/2015 + + + + + +7. PROPRIETARY MARKS 7.1. Your Right to Use the Proprietary Marks. Your right to use the Proprietary Marks applies only to the Franchised Business operated from the Premises as expressly provided in this Agreement. During the Term of this Agreement and after its expiration or termination, you agree not to directly or indirectly contest, or aid in contesting, the validity or ownership of the Proprietary Marks or take any action detrimental to our rights in the Proprietary Marks. 7.2. Your Acknowledgments. You acknowledge that: (a) the Proprietary Marks serve to identify our services and the businesses operating under the System; (b) your use of the Proprietary Marks under this Agreement does not give you any ownership interest in them; and (c) all goodwill associated with and identified by the Proprietary Marks inures exclusively to our benefit and is our property. Upon the expiration or termination of this Agreement, no monetary amount will be attributable to goodwill associated with your activities as a franchisee under this Agreement. 7.3. Limitations on Use of the Proprietary Marks. You agree: 7.3.1. To use only the Proprietary Marks we designate, and only in the manner we authorize; 7.3.2. To use the Proprietary Marks only for the operation of the Franchised Business and only at the Premises, or in advertising we have approved for the business conducted at the Premises; 7.3.3. To operate and advertise the Franchised Business only under the name "Pizza Fusion" without prefix or suffix; 7.3.4. To ensure that the Proprietary Marks are used together with the symbol (such as "®", "™", or "SM") that we require from time to time. 7.3.5. To permit us or our representatives to inspect your operations to assure that you are properly using the Proprietary Marks; 7.3.6. To use the Proprietary Marks to promote and to offer for sale only the products and services that we have approved, and not use any Proprietary Marks in association with the products, materials or services of others; 7.3.7. You agree not to use or permit the use or display of the Proprietary Marks as part of any Internet domain name or website, or any other electronic identifier (including but not limited to e-mail addresses, account names in a social media site, and the like) of you or the Franchised Business in any forum or medium; 7.3.8. Not to use the Proprietary Marks to incur any obligation or indebtedness on our behalf; 7.3.9. Not to use any of the Proprietary Marks as part of your corporate or legal name; Page 18 of 39 + +Source: PF HOSPITALITY GROUP INC., 10-12G, 9/23/2015 + + + + + +7.3.10 That your use of the Proprietary Marks does not give you any ownership or other interest in or to the Proprietary Marks (except the license granted by this Agreement); 7.3.11 To accept the validity of the Proprietary Marks as they exist now and in the future and agree that you will not contest the validity of any of the Proprietary Marks at any time; and 7.3.12 To comply with our instructions in filing and maintaining trade name or fictitious name registrations, and sign any documents we deem necessary to obtain protection of the Proprietary Marks or to maintain their continued validity and enforceability. 7.4. Changes to the Proprietary Marks. We have the right, upon reasonable notice, to change, discontinue, or substitute for any of the Proprietary Marks and to adopt new Proprietary Marks for use with the System without any liability for any diminishment of the brand. You agree to implement any such change at your own expense within the time we reasonably specify. 7.5. Third-Party Challenges. The parties agree as follows: 7.5.1 You agree to promptly notify us if you learn of any suspected infringement of the Proprietary Marks, any challenge to the validity of the Proprietary Marks, or any known challenge to our ownership of, or your right to use, the Proprietary Marks. 7.5.2 You understand and agree that we will have the sole right to direct and control any administrative proceeding or litigation involving the Proprietary Marks, including any settlement of such a matter. You also understand and agree that we have the sole right, but not the obligation, to take action against uses by others that may constitute infringement of the Proprietary Marks. 7.5.3 If you have used the Proprietary Marks in accordance with this Agreement and our other written instructions, then we will defend you, at our expense, against any third party claim, suit, or demand involving the Proprietary Marks arising out of your use of those marks. If you have used the Proprietary Marks but not in accordance with this Agreement and our other written instructions, then we will still defend you, but at your expense, against such third party claims, suits, or demands; and you agree to pay all of our expenses (including but not limited to attorney's fees and any settlements or judgments) when we ask that you do so. In any case, though, you will be responsible for your staff's payroll and related costs. 7.5.4 If we undertake the defense or prosecution of any litigation relating to the Proprietary Marks, you agree to execute any and all documents and do the things that our counsel deems necessary to carry out such defense or prosecution (including, but not limited to, becoming a nominal party to any legal action). 8. BUSINESS RECORDS AND REPORTING 8.1. Business Records. You agree to keep complete and accurate books, records, and accounts of all business conducted under this Agreement, in the form and manner prescribed in the Manual or other written instructions. You must preserve all of your books and records in at least electronic form for seven (7) years from the date of preparation. 8.2. Reports and Financial Statements. 8.2.1 You agree to submit financial and operational reports and records and documents to us at the times and in the manner specified in the Manual or other written instructions. You agree to submit, (a) within twenty (20) days after the end of each calendar month, a balance sheet and income statement, and (b) within ninety (90) days of the end of each fiscal year, an annual balance sheet and income statement. Upon our request, each such financial statement must accompanied by an unqualified review opinion from an independent certified public accountant acceptable to us. You or the Operating Principal must certify that the income statement and balance sheet are correct and complete and that they have been prepared in accordance with generally accepted accounting principles in the US (or, if we request, international financial reporting standards if, by then, IFRS have been adopted in the US). You must also submit to us a complete photocopy of the Franchised Business' annual federal and state income tax returns when you file such reports with the appropriate tax authorities. Page 19 of 39 + +Source: PF HOSPITALITY GROUP INC., 10-12G, 9/23/2015 + + + + + +8.2.2 If we request in writing, you agree that your financial institution is authorized to send us a monthly statement of all activity in the designated account (and such other reports of the activity in the operating account as we reasonably request) at the same time as it sends such statements to you. You also agree to sign such documents as your financial institution may require in order to implement this provision. 8.2.3 If you maintain other accounts of any type for the Franchised Business, you agree to provide us with a written description of those accounts and to provide to us copies of the monthly statements for all such accounts and the details of all deposits to, and withdrawals from, those accounts. 8.3. Examination and Audit Rights. We have the right, both during and after the Term of this Agreement, to inspect, copy and audit your books and records, your federal, state and local tax returns, and any other forms, reports, information or data that we may reasonably designate. We will provide you 10 days written notice before conducting an in-person financial examination or audit. We may conduct the examination or audit at our offices or those of a third-party, in which case we may require you to send us your records. If the examination or audit reveals an understatement of Gross Revenues, you must immediately pay us any Royalty fees, Advertising Contributions, or other amounts owing, plus interest as provided in Section 3.8 [Dishonored Payments]. If Gross Revenues have been understated by more than 2% for the period covered by the examination or audit, you must also: (1) reimburse us for the full reasonable cost of the examination or audit, including, travel, lodging, meals, and wages of our representatives and the legal and accounting fees of any attorneys or independent accountants we use for the examination or audit; and (2) at our request, thereafter provide us with periodic audited financial statements. If you have understated Gross Revenues by 2% or more on three or more occasions in any twelve-month period, or by 5% or more for any period of four (or more) consecutive weeks, we have the right to terminate this Agreement with no opportunity for cure. The foregoing remedies are in addition any other remedies and rights available to us under this Agreement or applicable law. 8.4. Governing Documents. If you are a corporation, partnership, LLC, or LLP, or transfer this Agreement to a corporation, partnership, LLC, or LLP, then, upon our request, you must provide to us a list of holders of direct or indirect equity interests and their percentage interests, as well as copies of your governing documents and any other corporate documents, books, or records. The Owners may not enter into any shareholders' agreement, management agreement, voting trust or other arrangement that gives a third party the power to direct and control your affairs without our prior written consent. Throughout the Term of this Agreement, your governing documents must provide that no transfer of any ownership interest may be made except in accordance with Section 14 of this Agreement. Any securities that you issue must bear a conspicuous printed legend to that effect. 8.5. Back-office. We have the right to require that you use an independent bookkeeper and/or independent accounting firm that we designate, in writing, for all such requirements of your Franchised Business. If we make such a designation, you agree to promptly work and cooperate with the designated bookkeeper and/or accountant. Page 20 of 39 + +Source: PF HOSPITALITY GROUP INC., 10-12G, 9/23/2015 + + + + + +9. MARKETING FUND AND ADVERTISING 9.1 Pizza Fusion Marketing Fund 9.1.1. We have the right, but not the obligation, to establish, maintain, and administer a fund for the marketing of the "Pizza Fusion" brand and Restaurants (the "Marketing Fund"). You must contribute each Period (commencing from the time we establish the Marketing Fund) to the Marketing Fund as provided in Section 3.3 [Advertising Contributions]. 9.1.2. We have the right to determine the proper operation and other decisions of the Marketing Fund. We may use your contributions and any earnings on the Marketing Fund for any costs associated with advertising, marketing, public relations, and/or promotional programs and materials, and any other activities we believe would benefit Franchised Businesses generally, including advertising campaigns in various media; creation and maintenance of one or more Websites; direct mail advertising; market research, including secret shoppers and customer satisfaction surveys; employing advertising and/or public relations agencies; purchasing promotional items; conducting and administering promotions, contests, giveaways, public relations events, community involvement activities, etc.; and providing promotional and other marketing materials and services to our franchisees. We have the right to direct all marketing programs, with the final decision over creative concepts, materials, and media used in the programs and their placement. We do not guarantee that you will benefit from the Marketing Fund in proportion to your contributions to the Marketing Fund. 9.1.2. We will deposit all contributions to the Marketing Fund in an account separate from our other funds and will not use them to defray any of our general operating expenses, except for reasonable administrative costs and overhead we incur in activities reasonably related to the administration of the Marketing Fund or the management of Marketing Fund-supported programs (including full or partial salaries of our personnel who devote full- or part-time services to Marketing Fund activities). 9.1.3. We will make available to you, at a reasonable cost, any promotional materials produced with Marketing Fund monies, and we will deposit the proceeds of those sales into the Marketing Fund account. We are not required to have an independent audit of the Marketing Fund completed. We will make available an unaudited statement of contributions and expenditures for the Marketing Fund 60 days after the close of our fiscal year to franchisees that make a written request for a copy. 9.2. Local Marketing. Beginning on the Opening Date, during each consecutive three-calendar-month period during the Term, you must spend three percent (3%) or more of your Gross Sales on local marketing of the Franchised Business. You must make these local marketing expenditures on a quarterly basis, based upon your Gross Sales calculated for the current year on an annualized basis. Your local spending obligation is in addition to your Marketing Fund contributions. Upon our request, you agree to submit to us, for our approval, an annual proposal and quarterly proposals detailing your plan for implementing your local marketing budget. At our request, you must submit appropriate documentation to verify compliance with the minimum spending obligation. All local advertising, marketing, and promotions by you must be in such media, and such types and format as we may approve; must be conducted in a dignified manner; and, must conform to such standards and requirements as we may specify. You must not use any advertising, marketing materials, or promotional plans unless and until you have received written approve from us, pursuant to the procedures and terms set forth in Section 9.5 [Advertising Approval] below. We have the right to periodically designate in the Manual the types of expenditures that will or will not count toward the minimum annual spending requirement. You must advertise the Franchised Business in all major directories in your Delivery/Catering and Advertising Area, including local online directories, as specified in the Manual. If you advertise jointly with other franchisees, your share of the cost will count toward your local spending requirement under this Section 9.2 [Local Marketing]. Page 21 of 39 + +Source: PF HOSPITALITY GROUP INC., 10-12G, 9/23/2015 + + + + + +9.3. Regional Fund. We have the right to designate any geographical area for purposes of establishing a regional marketing fund ("Regional Fund"). If we have established a Regional Fund for the geographic area in which your Franchised Business is located by the time you commence operations hereunder, you must immediately become a member of such Regional Fund. If we establish a Regional Fund for the geographic area in which your Franchised Business is located the Term of this Agreement, you must become a member of such Regional Fund within thirty (30) days after the date on which the Regional Fund commences operation. In no event will you be required to be a member of more than one Regional Fund. The following provisions shall apply to each such Regional Fund: 9.3.1 Each Regional Fund will be organized and governed in a form and manner, and will commence operations on a date, that we have approved in advance in writing. 9.3.2 Each Regional Fund will be organized for the exclusive purpose of administering regional marketing programs and developing, subject to our approval, standardized promotional materials for use by the members in local marketing and promotion. 9.3.3 No advertising, marketing, or promotional plans or materials may be used by a Regional Fund or furnished to its members without our prior approval pursuant to the procedures and terms as set forth in Section 9.5 [Advertising Approval] below. 9.3.4 You must contribute each Period (commencing from the time we establish the Marketing Fund) to the Marketing Fund as provided in Section 3.3 [Advertising Contributions], together with such statements or reports as we, or the Regional Fund with our prior written approval, may require. If we request, you must submit your Regional Fund contribution and reports to the Regional Fund directly to us for distribution to the Regional Fund. 9.3.5 A majority of the Restaurant owners in the Regional Fund may vote to increase the amount of each Restaurant owner's Regional Fund contribution by up to an additional two percent (2%) of each Restaurant's Gross Revenues. Voting will be on the basis of one vote per Restaurant, and any locations that we operate in the region, if any, will have the same voting rights as those owned by our franchisees. You must contribute to the Regional Fund in accordance with any such vote by the Regional Fund to increase each Restaurant's contribution by up to two percent (2%) of the Gross Revenues of your Franchised Business. 9.3.6 We will credit the contributions you make to the Regional Fund against the amounts you must spend on local advertising under Section 9.2 [Local Marketing] above. 9.3.7 Although once established, each Regional Fund is intended to be of perpetual duration, we maintain the right to terminate any Regional Fund. A Regional Fund will not be terminated, however, until all monies in that Regional Fund have been expended for marketing and/or promotional purposes. 9.4 Initial Advertising Campaign. You agree to conduct a Grand Opening Advertising Program for the Franchised Business throughout the first four weeks after the Opening Date, spending an amount not less than $12,000. You must obtain our prior written approval as provided in Section 9.5 [Advertising Approval] below before implementing any advertising plans and/or making any use or placement of advertising and promotional materials as part of the Grand Opening Advertising Program. You acknowledge that the Grand Opening Advertising Program may not be sufficient in all cases to develop adequate exposure to the services offered by your Franchised Business, and that it may be necessary for you to supplement the Grand Opening Advertising Program with additional advertising and promotional expenditures and efforts. Page 22 of 39 + +Source: PF HOSPITALITY GROUP INC., 10-12G, 9/23/2015 + + + + + +9.5. Advertising Approval. You agree to conduct all advertising in a dignified manner and to conform to the standards and requirements we specify from time to time in the Manual or other written materials. We will make available to you approved advertising and promotional materials, including signs, posters, collaterals, etc. that we have prepared. We will have the final decision on all creative development of advertising and promotional messages. You must submit to us in writing, for our approval before your use, all proposed plans, promotion materials, and advertising that we did not prepare or approve in the previous year. If you do not receive our written approval within 10 business days from the date we received the material, the material is deemed disapproved. We reserve the right to require you to discontinue the use of any advertising or marketing materials. 9.6. Special Promotions. You agree to participate in and comply with special promotional activities that we may prescribe from time to time for Franchised Businesses generally or in specific geographic areas or for specific types of venues. You agree to bear your own costs of participating locally in such promotions. 10. TECHNOLOGY 10.1. Computer System. We have the right to specify or require that certain brands, types, makes, and/or models of communications, computer systems, and hardware to be used by, between, or among Franchised Businesses, including without limitation: (a) back office and point of sale systems, data, audio, video, and voice storage, retrieval, and transmission systems for use at Franchised Businesses, between or among Franchised Businesses, and between and among your Franchised Business and us, our designee and/or you; (b) Cash Register Systems (defined below); (c) physical, electronic, and other security systems; (d) printers and other peripheral devices; (e) archival back-up systems; and (f) internet access mode (e.g., form of telecommunications connection) and speed (collectively, the "Computer System"). You agree to abide by our requirements with respect to the Computer System. 10.1.1 We have the right, but not the obligation, to develop or have developed for us, or to designate: (a) computer software programs and accounting system software that you must use in connection with the Computer System ("Required Software"), which you must install; (b) updates, supplements, modifications, or enhancements to the Required Software, which you must install; (c) the tangible media upon which such you must record or receive data; (d) the database file structure of your Computer System; and (e) an Extranet for informational assistance, which may include, without limitation, the Manuals, training other assistance materials, and management reporting solutions; and (f) answering service requirements and/or system-wide phone order processing of all delivery orders, and/or to designate vendors that will provide such order processing. 10.1.2 You agree to install and use the Computer System and Required Software in the manner that we require. 10.1.3 You agree to implement and periodically upgrade and make other changes to the Computer System and Required Software as we may reasonably request in writing (collectively, "Computer Upgrades"). Page 23 of 39 + +Source: PF HOSPITALITY GROUP INC., 10-12G, 9/23/2015 + + + + + +10.1.4 You agree to comply with the specifications that we issue with respect to the Computer System and the Required Software, and with respect to Computer Upgrades, at your expense. You also agree to afford us unimpeded access to your Computer System and Required Software in the manner, form, and at the times that we request. 10.2 Data. You agree that all data that you collect from customers and potential customers in connection with the Franchised Business ("Customer Data") is deemed to be owned exclusively by us, and you also agree to provide the Customer Data to us at any time that we request as you to do so. You have the right to use Customer Data while this Agreement or a Successor Franchise Agreement is in effect, but only in connection with operating the Franchised Business and only in accordance with the policies that we establish from time to time. You may not sell, transfer, or use Customer Data for any purpose other than operating the Franchised Business and marketing "Pizza Fusion" products and services. However, if you Transfer the Franchised Business (as provided in Section 14.2 [No Transfer without Our Prior Written Consent] below), as part of the Transfer, you may Transfer use of the Customer Data to the buyer for value. 10.3 Ownership of Data. We have the right to specify, from time to time, in the Manual or otherwise in writing, the information that you must collect and maintain on the Computer System, and you agree to provide us with the reports that we may reasonably request from the data so collected and maintained. You agree to download to us daily, or in such other intervals that we may require, all information and materials that we may require in connection with your operation of the Franchised Business, and shall display such information and materials in the manner we may prescribe, including, without limitation, to employees of the Franchised Business. All data pertaining to, derived from, or displayed at the Franchised Business (including without limitation data pertaining to or otherwise about Franchised Business customers) is and shall be our exclusive property, and we hereby grant you a royalty-free non-exclusive license to use that data during the Term of this Agreement. 10.4 Privacy Laws. You agree to abide by all applicable laws pertaining to the privacy of consumer, employee, and transactional information ("Privacy Laws"). 10.4.1 You agree to comply with our standards and policies pertaining to Privacy Laws. If there is a conflict between our standards and policies pertaining to Privacy Laws and actual applicable law, you shall: (i) comply with the requirements of applicable law; (ii) immediately give us written notice of said conflict; and (iii) promptly and fully cooperate with is and our counsel in determining the most effective way, if any, to meet our standards and policies pertaining to Privacy Laws within the bounds of applicable law. 10.4.2 You agree not to publish, disseminate, implement, revise, or rescind a data privacy policy without our prior written consent as to said policy. 10.5 Website. We will maintain a Website for benefit of ourselves and our franchisees. You agree not to establish a Website or permit any other party to establish a Website that relates in any manner to your Franchised Business or referring to the Proprietary Marks. We have the right, but not the obligation, to provide one or more references or webpage(s) to your Franchised Business, as we may periodically designate, within our Website. (The term "Website" means one or more related documents, designs, pages, or other communications that can be accessed through electronic means, including but not limited to the Internet, World Wide Web, social networking sites (including but not limited to Facebook, Twitter, LinkedIn, Google Wave, etc.), blogs, vlogs, and other applications, etc.). If we ever do approve in writing a request for you to use a separate Website, then we have the right to require that you meet any or all of the following requirements: 10.5.1 You agree that any Website that you own or that is maintained for your benefit will be deemed "advertising" under this Agreement, and will be subject to (among other things) our prior written approval. 10.5.2 You shall not establish or use any Website without our prior written approval. Page 24 of 39 + +Source: PF HOSPITALITY GROUP INC., 10-12G, 9/23/2015 + + + + + +10.5.3 Before establishing any Website, you must submit to us, for our prior written approval, a sample of the proposed Website domain name, format, visible content (including, without limitation, proposed screen shots), and non-visible content (including, without limitation, meta data and meta tags) in the form and manner we may reasonably require. 10.5.4 You agree not to use or modify any such Website without our prior written approval as to such proposed use or modification. 10.5.5 In addition to any other applicable requirements, you agree to comply with the standards and specifications for Websites that we may periodically prescribe in the Manuals or otherwise in writing. 10.5.6 If we require you to do so, you agree to establish hyperlinks to our Website and others as we may request in writing. 10.6 Cash Register Systems. You must record all sales on computer-based point of sale systems on such other types of cash registers that we have the right to designate or approve in the Manual or otherwise in writing ("Cash Register Systems"). The Cash Register System is deemed to be part of your Computer System. You must utilize computer-based point-of-sale cash registers which are fully compatible with any program or system which we have the right to designate and you must record all Gross Revenues and all revenue information on such equipment. 10.7 Gift Cards. If we require, you agree to participate in a gift card program that we specify. For this purpose, you must purchase the software, hardware, and other items needed to sell and process gift cards, as we may specify in writing in the Manuals or otherwise. You must also pay such monthly and per-swipe transaction fees as may be required by the vendor of the gift card system. You must sell or honor gift cards only in accordance with our written standards. You must not sell, issue, or redeem gift certificates other than gift cards we have approved in writing. 10.8 Use of the Proprietary Marks. You agree not to use or permit the use or display of the Proprietary Marks as part of any Internet domain name or website, or any other electronic identifier (including but not limited to e-mail addresses, account names in a social media site, and the like) of you or the Franchised Business in any forum or medium. 10.9 Identification of the Franchised Business. You must use, and only use, the email address and other identifiers we designate in connection with the business of the Franchised Business. You agree not to transmit or cause any other party to transmit advertisements or solicitations by e-mail or other electronic media without first obtaining our written consent as to: (a) the content of such e mail advertisements or solicitations; and (b) your plan for transmitting such advertisements. In addition to any other provision of this Agreement, you will be solely responsible for compliance with any laws pertaining to sending e-mails including but not limited to the Controlling the Assault of Non-Solicited Pornography and Proprietary Marketing Act of 2003 (known as the "CAN-SPAM Act of 2003"). 10.10 Changes to Technology. Because changes to technology are dynamic and not predictable within the term of this Agreement, and in order to provide for inevitable but unpredictable changes to technological needs and opportunities, you agree: (a) that we will have the right to establish, in writing, reasonable new standards to address new technologies, and to implement those changes in technology into the System; and (b) to abide by our reasonable new standards as if this Section 10 were periodically revised for that purpose. 10.11 E-Mail and Fax Communication. You agree that exchanging information with us by e-mail and fax is an important way to enable quick, effective, and efficient communication, and that we are entitled to rely upon each other's use of e-mail and faxes for communicating as part of the economic bargain underlying this Agreement. To facilitate the use of e-mail and fax to exchange information, you authorize the transmission of e-mail by us and our employees, vendors, and affiliates (on matters pertaining to the business contemplated hereunder) (together, "Official Senders") to you and your employees during the term of this Agreement. Page 25 of 39 + +Source: PF HOSPITALITY GROUP INC., 10-12G, 9/23/2015 + + + + + +10.11.1 In order to implement the terms of this Section 10.11 [E-Mail and Fax Communication], you agree that: (a) Official Senders are authorized to send e-mails and faxes to you and your employees; (b) you will cause your officers, directors, and employees (as a condition of their employment or position with you) to give their consent (in an e-mail, electronically, or in a pen-and-paper writing, as we may reasonably require) to Official Senders' transmission of e-mails and faxes to those persons, and that such persons shall not opt-out, or otherwise ask to no longer receive e-mails, from Official Senders during the time that such person works for or is affiliated with you; and (c) you will not opt- out, or otherwise ask to no longer receive e-mails and/or faxes, from Official Senders during the term of this Agreement. 10.11.2 The consent given in this Section 10.11 [E-Mail and Fax Communication] will not apply to the provision of notices under this Agreement by either party using e-mail (unless the parties otherwise agree in a pen-and-paper writing signed by both parties). 11. OPERATING MANUAL We will furnish you with one copy of, or electronic access to, the Manual, on loan, for as long as this Agreement or a Successor Franchise Agreement remains in effect. We reserve the right to furnish all or part of the Manual to you in electronic form or online and to establish terms of use for access to any restricted portion of our website. You acknowledge that we own the copyright in the Manual and that your copy of the Manual remains our property. You agree to treat the Manual, training materials, and any other manuals or materials created or approved by us for use with the System as secret and confidential. You agree not to copy, duplicate, record or otherwise reproduce the Manual or other materials provided by us, in whole or in part. In addition, you agree not to make any confidential information or materials supplied by us available to any unauthorized person. We have the right to amend and supplement the Manual from time to time by letter, electronic mail, bulletin, videotape, audio tapes, software, or other forms of communication. You agree to keep your copy of the Manual up-to-date and to comply with each new or changed standard promptly upon receipt of notice from us. If a dispute develops relating to the contents of the Manual, our copy of the Manual maintained at our headquarters will control. 12. CONFIDENTIAL INFORMATION During and after the term of this Agreement, you may not communicate, divulge, or use for any purpose other than the operation of the Franchised Business any confidential information, knowledge, trade secrets or know-how that may be communicated to you or that you may learn by virtue of your relationship with us and the System. You may divulge confidential information only to your professional advisers and to your employees who must have access to the information to operate the Franchised Business. All information, knowledge and know-how relating to us, our business plans, or the System are deemed confidential for purposes of this Agreement, except information that you can demonstrate came to your attention by lawful means prior to our disclosure; or which, at the time of our disclosure to you, had become a part of the public domain. You must require your employees, and any other person or entity to which you wish to disclose any confidential information, to execute (and deliver to us upon our request) agreements, in the form provided in Appendix C to this Agreement or as we may otherwise require in writing, that they will maintain the confidentiality of the disclosed information. If you do not obtain execution of the covenants required by this Section 12 and, upon our request, deliver those signed agreements to us, that will constitute a default under Section 15.2.13 [Termination By Us Without A Cure Period] below. Page 26 of 39 + +Source: PF HOSPITALITY GROUP INC., 10-12G, 9/23/2015 + + + + + +13. TRANSFERS BY US We have the unrestricted right to transfer or assign all or any part of our rights and/or our obligations under this Agreement to any person or legal entity without your consent. You agree that we will have no liability after the effective date of transfer or assignment for the performance of, or for any failure to perform, any obligations we have transferred. We also have the absolute right to delegate to others the performance of any of our duties, obligations, or benefits under this Agreement, to third parties (including, without limitation, an area developer under the terms of an area development agreement with us), which will not be parties to an agreement with you. 14. TRANSFERS BY YOU 14.1. Definition of Transfer. In this Agreement, "Transfer" as a verb means to sell, assign, give away, pledge, or encumber, either voluntarily or by operation of law (such as through divorce or bankruptcy proceedings), any interest in this Agreement the rights and/or obligations under this Agreement, all or substantially all of the assets of the Franchised Business, and/or any direct or indirect interest in the ownership of Franchisee (if the Franchisee is a corporation, partnership, or limited liability company). "Transfer" as a noun means any such sale, assignment, etc. 14.2. No Transfer without Our Prior Written Consent. Neither you nor any of the Owners may make any Transfer or permit any Transfer to occur without obtaining our prior written consent. We have the right to withhold our consent, except as otherwise provided in Sections 14.3 [Transfer of Entire Business] through 14.8 [Our Right of First Refusal]. We have the right to communicate with and counsel both you and the proposed transferee on any aspect of a proposed Transfer. If a Transfer requires our consent, then that transaction may not take place until at least sixty (60) days after we receive written notice of the proposed Transfer. You agree to provide any information and documentation relating to the proposed Transfer that we reasonably require. Unless otherwise agreed, we do not waive any claims against the transferring party if we approve the Transfer. 14.3. Transfer of Entire Business. For a proposed Transfer of the Franchised Business or this Agreement (or, if Franchisee is a corporation or other entity, a Transfer of ownership interests that would result in a change of control of Franchisee), the following conditions apply (unless waived by us): 14.3.1. You must be in compliance with all obligations to us under this Agreement and any other agreement you have with us and our affiliates as of the date of the request for our approval of the Transfer, or you must make arrangements satisfactory to us to come into compliance by the date of the Transfer. 14.3.2. The proposed transferee must complete all of the following requirements: (a) Demonstrate to our satisfaction that he or she meets all of our then-current qualifications to become a Pizza Fusion franchisee, and, at our request, the proposed transferee must travel (at his or her expense) to our principal office for an interview. (b) Sign our then-current standard form of franchise agreement (or the standard form most recently offered to new franchisees, if we are not then offering franchises to new franchisees) for the then-remaining balance of the Term of this Agreement, and such other ancillary agreements we require for new Franchised Businesses. Their new franchise agreement may materially differ from the terms of this Agreement. (c) Successfully complete our then-current training requirements and pay the then-current fee for training. (d) If the proposed transferee is one of our other franchisees, he or she must not be in default under his or her agreements with us and must have a good record of customer service and compliance with our operating standards. (e) If the transferee is a corporation or other entity, the owner or owners of a beneficial interest in the transferee must execute our then-current form of personal guarantee. Page 27 of 39 + +Source: PF HOSPITALITY GROUP INC., 10-12G, 9/23/2015 + + + + + +14.3.3. You or the transferee must make arrangements to modernize, upgrade, and conform the Franchised Business, at your and/or the transferee's expense, to our then-current standards and specifications for new Franchised Businesses. 14.3.4. We must be paid, either by you or the transferee, a transfer fee ("Transfer Fee") in an amount equal to $7,500 (or twenty- five percent (25%) of the then-current initial franchise fee, if greater). The payment of this transfer fee is in place of any initial franchise fee due under the Franchise Agreement the transferee will enter under Section 14.3.2 [Transfer of Entire Business] above. If the transferee is a spouse, son, or daughter of the transferor and the transfer is for estate-planning purposes, no transfer fee is charged, but the transferor must reimburse us for the out-of-pocket expenses (including attorneys' fees) we incur in connection with reviewing, approving, and properly documenting the transfer. 14.3.5. You and all Owners must execute a general release, in a form satisfactory to us, of all claims against us and our past, present and future affiliates, officers, directors, shareholders, agents and employees. You and the Owners will remain liable to us for all obligations arising before the effective date of the Transfer. 14.3.6. The price and other proposed terms of the Transfer must not, in our reasonable business judgment, have the effect of negatively impacting the future viability of the Franchised Business. 14.4. Transfer of a Partial Ownership Interest. For any proposal to admit a new Owner, to remove an existing Owner, or to change the distribution of ownership shown on the cover page, or for any other transaction that amounts to the Transfer of a partial interest in the Franchised Business, you must give us advance notice and submit a copy of all proposed contracts and other information concerning the Transfer that we may request. We will have the right to require reimbursement of any out-of-pocket expenses that we incur in reviewing the proposed Transfer. We will have a reasonable time (not less than thirty (30) days) after we have received all requested information to evaluate the proposed Transfer. You must satisfy the conditions in Sections 8.6, 14.3.2(a) [Transfer of Entire Business], 14.3.4 [Transfer of Entire Business], 14.3.5 [Transfer of Entire Business], and 14.3.6 [Transfer of Entire Business] above in connection with any such transfer. We may withhold our consent on any reasonable grounds or give our consent subject to reasonable conditions. You acknowledge that any proposed new owner must submit a personal application and execute a personal guarantee in the same form signed by the original Owners. 14.5. Transfer to a Corporation or Other Entity. We will consent to the assignment of this Agreement to a corporation, partnership or limited liability corporation that you form for the convenience of ownership, provided that: (a) the entity has and will have no other business besides operating a Franchised Business (b) you satisfy the conditions in Sections 14.3.2(a) [Transfer of Entire Business], 14.3.3 [Transfer of Entire Business], 14.3.4 [Transfer of Entire Business] and 14.3.5 [Transfer of Entire Business] above; and (c) the Owners hold equity interests in the new entity in the same proportion shown on the cover page. There is no Transfer Fee for a Transfer to a corporation for convenience of ownership. 14.6. Transfer upon Death or Incapacity. If you or any Owner dies, becomes incapacitated, or enters bankruptcy proceedings, that person's executor, administrator, personal representative, or trustee must apply to us in writing within three (3) months after the event (death, declaration of incapacity, or filing of a bankruptcy petition) for consent to Transfer the person's interest. The Transfer will be subject to the provisions of Sections 14.2 [No Transfer without Our Prior Written Consent] through 14.8 [Our Right of First Refusal], as applicable, except there will be no Transfer Fee. In addition, if the deceased or incapacitated person is the Operating Principal, you must within 30 days thereafter, hire and retain a replacement, who is satisfactory to us, to perform such obligations. If a satisfactory replacement is not retained, we will have the right (but not the obligation) to take over operation of the Franchised Business, or to hire and retain a replacement on your behalf, until the Transfer is completed and to charge a reasonable management fee for these services. For purposes of this Section, "incapacity" means any physical or mental infirmity that will prevent the person from performing his or her obligations under this Agreement: (i) for a period of thirty (30) or more consecutive days; or (ii) for sixty (60) or more total days during a calendar year. In the case of Transfer by bequest or by intestate succession, if the heirs or beneficiaries are unable to meet the conditions of Section 14.3 [Transfer of Entire Business], the executor may transfer the decedent's interest to another successor that we have approved, subject to all of the terms and conditions for Transfers contained in this Agreement. If an interest is not disposed of under this Section 14.6 [Transfer upon Death or Incapacity] within six (6) months after the date of death or appointment of a personal representative or trustee, we may terminate this Agreement under Section 15.2 [Termination By Us Without A Cure Period] below. Page 28 of 39 + +Source: PF HOSPITALITY GROUP INC., 10-12G, 9/23/2015 + + + + + +14.7. Non-Conforming Transfers. Any purported Transfer that is not in compliance with this Section 14 is null and void and constitutes a material breach of this Agreement, for which we may terminate this Agreement without opportunity to cure. Our consent to a Transfer does not constitute a waiver of any claims that we have against the transferor, nor is it a waiver of our right to demand exact compliance with the terms of this Agreement. 14.8. Our Right of First Refusal. We have the right, exercisable within thirty (30) days after receipt of the notice specified in Section 14.2 [No Transfer without Our Prior Written Consent], to send written notice to you that we intend to purchase the interest proposed to be Transferred. We may assign our right of first refusal to someone else either before or after we exercise it. However, our right of first refusal will not apply with regard to a Transfer under Section 14.5 [Transfer to a Corporation or Other Entity] or a Transfer to your parents, spouse, son, daughter, or mother or father in-law (including Transfers to your parents, spouse, son, daughter, or mother or father in-law as a result of death or incapacity as described in Section 14.6 [Transfer upon Death or Incapacity]). 14.8.1. If the Transfer is proposed to be made pursuant to a sale, we or our designee may purchase the interest proposed to be Transferred on the same economic terms and conditions offered by the third-party. Closing on our purchase must occur by the later of (a) 60 days after the date of our notice to the seller electing to purchase the interest, or (b) the closing date as proposed in the third-party's purchase offer. If we cannot reasonably be expected to furnish the same consideration as the third-party, then we may substitute the reasonable equivalent in cash. If the parties cannot agree within 30 days on the reasonable equivalent in cash, we will designate, at our expense, an independent appraiser and the appraiser's determination will be final. Any material change in the terms of the offer from a third-party after we have elected not to purchase the seller's interest will constitute a new offer subject to the same right of first refusal as the third party's initial offer. 14.8.2. If a Transfer is proposed to be made by gift, we will designate, at our expense, an independent appraiser to determine the fair market value of the interest proposed to be transferred. We may purchase the interest at the fair market value determined by the appraiser. Closing on the purchase will occur within 30 days after our notice to the transferor of the appraiser's determination of fair market value. 14.8.3. If we elect not to exercise our rights under this Section, the transferor may complete the Transfer after complying with Sections 14.2 [No Transfer without Our Prior Written Consent] through 14.6 [Transfer upon Death or Incapacity] above. Closing of the Transfer must occur within 60 calendar days of our election (or such longer period as applicable law may require); otherwise, the third-party's offer will be treated as a new offer subject to our right of first refusal. The Transfer is conditional upon our determination that the Transfer was on terms substantially the same as those offered to us. 15. TERMINATION 15.1. Termination By Us Without Notice. You will be in default under this Agreement and all rights granted by this Agreement will automatically terminate without notice to you if you become insolvent or make an assignment for the benefit of your creditors; if a receiver is appointed; if execution is levied against your business assets; or if suit to foreclose any lien or mortgage or bankruptcy is instituted against you and not dismissed within 60 days. Page 29 of 39 + +Source: PF HOSPITALITY GROUP INC., 10-12G, 9/23/2015 + + + + + +15.2. Termination By Us Without A Cure Period. We may terminate this Agreement by written notice to you, without giving you an opportunity to cure, upon the occurrence of any of the following events: 15.2.1. You, the Operating Principal, and/or your personnel fail to complete training under Section 5.1 [Initial Training Program] to our satisfaction. 15.2.2. You fail to open for business by the opening deadline specified in Appendix A. 15.2.3. You disclose the contents of the Manual or other trade secrets or confidential information contrary to Sections 11 and 12 of this Agreement. 15.2.4. You refuse to permit, or try to hinder, an examination or audit of your books and records or of the Franchised Business as provided in this Agreement. 15.2.5. You make any material misrepresentation in connection with your application to us for the franchise, or you submit to us any report or statement that you know or should know to be false or misleading. 15.2.6. You understate to us your Gross Revenues, by 2% or more on three or more occasions in any twelve-month period, or by 5% or more for any period of four or more consecutive weeks. 15.2.7. You fail to operate the Franchised Business for three or more consecutive business days on which you were required to operate, unless we determine that the failure was beyond your control. 15.2.8. You or any Owner, officer or director is convicted of a crime that we reasonably believe is likely to harm the reputation of the Pizza Fusion concept. 15.2.9. Any Transfer occurs that does not comply with Section 14, including a failure to transfer to a qualified successor after death or disability within the time allowed by Section 14.7 [Non-Conforming Transfers]. 15.2.10. You are in default three (3) or more times under Sections 15.3 [Termination by Us Following Expiration of Cure Period for Monetary Default] and/or 15.4 [Termination by Us Following Expiration of Cure Period] within any twelve (12) month period, whether or not the defaults are similar and whether or not they are cured. 15.2.11. After curing a default pursuant to Sections 15.3 [Termination by Us Following Expiration of Cure Period for Monetary Default] or 15.4 [Termination by Us Following Expiration of Cure Period], you commit the same default within twelve (12) months, whether or not the second default is cured. 15.2.12. Any condition exists with respect to the Franchised Business that, in our reasonable judgment, seriously jeopardizes public health or safety. 15.2.13. You fail to comply with the covenants in Section 17 below or fail to timely obtain execution of the covenants required under Section 12 above and Section 17.3 [Owners and Employees] below. 15.2.14. You fail to obtain or maintain required insurance. 15.2.15. You cease to operate the Franchised Business for more than seven (7) consecutive days or fourteen (14) days in any calendar year unless we approved a temporary closing or we determine, that the failure to operate was beyond your control, you otherwise abandon the Franchised Business, or you lose the right to possess the Premises or you otherwise forfeit the right to do or transact business as required under this Agreement. If, however, through no fault of you, the Premises are damaged or destroyed by an event such that repairs or reconstruction cannot be completed within ninety (90) days thereafter, you will have thirty (30) days after such event in which to apply for our approval to relocate and/or reconstruct the premises, and we will not unreasonably hold our approval. Page 30 of 39 + +Source: PF HOSPITALITY GROUP INC., 10-12G, 9/23/2015 + + + + + +15.3. Termination by Us Following Expiration of Cure Period for Monetary Default. You will be in default under this Agreement if you fail, refuse, or neglect to pay when due (including if we are not able to collect payments by electronic fund transfer pursuant to Section 3.6 [Method of Payment] due to insufficient funds in your account(s), closure of your account(s), or any other reason resulting in the nonpayment) any monies owing to us, our affiliates, or any lender that has provided financing to you under this Agreement or any other agreement, or to your landlord and/or any supplier of goods or services to your Franchised Business. You will have ten (10) days after written notice of such default from us within which to remedy the default. You may avoid termination by curing the default to our satisfaction within the 10-day period (or such longer period as applicable law may require). If you do not cure the default within such 10-day period (or such longer period as applicable law may require), this Agreement will terminate automatically and without further notice, effective immediately upon the expiration of the specified time period. 15.4 Termination by Us Following Expiration of Cure Period. For any default not covered under Sections 15.1 [Termination By Us Without Notice], 15.2 [Termination By Us Without A Cure Period], or 15.3 above, you will have thirty (30) days after written notice of default from us within which to remedy the default. You may avoid termination by curing the default to our satisfaction within the 30-day period (or such longer period as applicable law may require). If you do not cure the default within the specified time, this Agreement will terminate automatically and without further notice, effective immediately upon the expiration of the specified time period. Any failure to comply with this Agreement, as amended or reasonably supplemented by the Manual or otherwise in writing, not covered by Sections 15.1 [Termination By Us Without Notice], 15.2 [Termination By Us Without A Cure Period], or 15.3 above constitutes a default, including, but not limited to, the following: 15.3.1. You fail, refuse, or neglect to submit to us the financial and other reports and information required under this Agreement. 15.3.2. You fail to comply with any of the mandatory standards or procedures prescribed by us in this Agreement, the Manual, or otherwise in writing. 15.3.3. You fail, refuse, or neglect to obtain our prior written approval or consent as required by this Agreement (other than a failure to obtain consent to a proposed Transfer, for which we may terminate without a cure period as provided in Section 15.2 [Termination By Us Without A Cure Period]). 15.3.4. For a period of fifteen (15) days, you allow a continued violation of any law, ordinance, rule or regulation of a governmental agency, including the failure to maintain or procure any required licenses, permits, or certifications, in the absence of a good faith dispute over its application or legality and without promptly resorting to an appropriate administrative or judicial forum for relief. 15.3.5. You misuse or make any unauthorized use of the Proprietary Marks or otherwise materially impair our goodwill or rights in the Proprietary Marks. 15.5. Cross-Default. Any default by you (including for this purpose your affiliates) under any other agreement with us will constitute a default under this Agreement, subject to the same provisions for notice and cure, if any, as may be applicable to the default under the other agreement. 16. OBLIGATIONS ON TERMINATION OR EXPIRATION 16.1. Upon termination or expiration of this Agreement for any reason, unless we direct you otherwise: 16.1.1. You agree to promptly pay all sums owing to us, our affiliates and suppliers, including, but not limited to, Royalty payments, contributions to the Marketing Fund, or other fees, damages, expenses, and attorney's fees incurred as a result of your default. Page 31 of 39 + +Source: PF HOSPITALITY GROUP INC., 10-12G, 9/23/2015 + + + + + +16.1.2. You agree to stop making any use of the confidential methods, procedures, and techniques associated with the System. You also agree to immediately deliver to us the Manual and all training materials, marketing materials, records, files, forms, instructions, signs, equipment, correspondence, copies, Customer Data, and other property in your possession or control that contain confidential information (as defined in Section 12) or that bear the Proprietary Marks and you agree not to retain any unauthorized copies of these materials. You also must deliver to us all customer information that you have compiled. 16.1.3. You agree to immediately cease to use, by advertising or in any other manner, the name "Pizza Fusion," all other Proprietary Marks, and all other distinctive forms, slogans, signs, symbols, Websites, domain name, website, e-mail address, and any other identifier (whether or not we have authorized its use) that you used in connection with your operation of the Franchised Business or that are otherwise associated with the Proprietary Marks, System, and/or us. If you subsequently begin to operate another business, you agree that you will not use any reproduction, counterfeit, copy or colorable imitation of the Proprietary Marks that you used either in connection with the Franchised Business or its promotion, which is likely to cause confusion, mistake or deception, or which is likely to dilute our exclusive rights in and to the Proprietary Marks, nor any trade dress or designation of origin or description or representation which falsely suggests or represents an association or connection with us. 16.1.4. You agree to promptly take such action as may be necessary to cancel any assumed name registration or equivalent registration containing the name PIZZA FUSION or any other Proprietary Marks. 16.1.5 You will, at our option, assign to us any interest which you have in the lease or sublease for the Premises. (a) If we do not elect or are unable to exercise our option to acquire, or to acquire the lease or sublease for the Premises, you must make such modifications or alterations to the premises operated hereunder (including, without limitation, the changing of the telephone number) immediately upon termination or expiration of this Agreement as may be necessary to distinguish the appearance of the Premises from that of other Restaurants under the System, and such specific additional changes as we may reasonably request for that purpose. In addition, you must stop making any use of any telephone number and/or any domain name, website, e-mail address, and any other identifier (whether or not we have authorized its use) that you used in connection with your operation of the Franchised Business, and you must promptly execute such documents or take such steps necessary to remove reference to the Franchised Business from all trade or business telephone directories, including physical and online "yellow" and "white" pages, or at our request transfer same to us. (b) If you fail or refuse to comply with the requirements of this Section 16.1.5 [OBLIGATIONS ON TERMINATION OR EXPIRATION], we will have the right to enter upon the Premises, without being guilty of trespass or any other tort, for the purpose of making or causing to be made such changes as may be required, at your expense, which you agree to pay upon demand. 16.2. Purchase of Assets. You agree that, at our option, you will sell to us any or all your assets used to operate the Franchised Business (including equipment, fixtures, furnishings, Delivery Vehicles, supplies, and inventory) that we ask in writing to purchase. 16.2.1. The purchase price for such items will be equal to your depreciated cost (determined below) or fair market value, whichever is less. The cost will be determined based upon a five (5) year straight-line depreciation of original costs. For equipment that is five (5) or more years old, the parties agree that fair market value will be deemed to be ten percent (10%) of the equipment's original cost. The fair market value of tangible assets must be determined without reference to good will, going-concern value, or other intangible assets. Page 32 of 39 + +Source: PF HOSPITALITY GROUP INC., 10-12G, 9/23/2015 + + + + + +16.2.2. We may exercise this option by delivering a notice of intent to purchase to you within 30 days after the expiration or termination of this Agreement. During that 30-day period, you agree not to dispose of, transfer, or otherwise hinder our ability to exercise our rights with respect to your assets. 16.2.3. If we exercise our option to purchase, we may setoff all amounts due to us under this Agreement and the cost of the appraisal (if any), against any payment due to you. 16.2.4. If we do not exercise our rights to purchase your Delivery Vehicle(s), you must immediately make such modifications or alterations to the Delivery Vehicle(s) that may be needed to remove any Proprietary Marks and to otherwise distinguish the appearance of the vehicle(s) from those used by other Restaurants. 16.3. Right to Enter and Continue Operations. In order to preserve the goodwill of the System following termination, we (or our designee) have the right to enter the Premises (without liability to you, your Owners, or otherwise) for the purpose continuing the Franchised Business' operation and maintaining the goodwill of the business. 16.4. Liquidated Damages. If this Agreement is terminated due to your default, you must, upon written demand, pay us a lump-sum payment in an amount calculated as follows: (a) the average of your Royalty fees and Advertising Contributions due for the last 60 months before our delivery of notice of default (or, if lesser, the months you had been operating before our delivery of notice of default), (b) multiplied by the lesser of 60 or the number of months remaining in the term of this Agreement. 16.5. Liquidated Damages. 16.5.1 The payments called for in Section 16.4 [Liquidated Damages] above constitute liquidated damages for causing the premature termination of this Agreement and not a penalty. A precise calculation of the full extent of damages that we will incur if this Agreement terminates because you default cannot be reasonably determined. Nevertheless, the parties agree that the lump-sum payment provided under Section 16.4 [Liquidated Damages] above is reasonable in light of the damages for premature termination that may reasonably be expected to occur in such event. 16.5.2 The amounts contemplated under Section 16.4 [Liquidated Damages] above is not a penalty and is intended by the parties only as a compensatory remedy for past breaches and not as a preventative remedy to deter future breaches. Neither does the sum contemplated in Section 16.4 [Liquidated Damages] above represent a price for the privilege of not performing or its payment represent an alternative manner of performance. Accordingly, as a purely liquidated damage provision, this Section does not preclude, nor is inconsistent with, a court granting us specific performance or any other equitable remedies, such as an injunction, to prevent future breaches. Our rights to liquidated damages and specific performance or any other equitable relief are not mutually exclusive. 16.6. Enforcement Costs. You agree to pay all damages, costs, and expenses, including, but not limited to, reasonable attorneys' fees, that we incur (even if after the expiration or termination of this Agreement) in enforcing this Section 16 or Section 17.2 [After Termination, Expiration, or Transfer] below. 17. RESTRICTIONS ON COMPETITION 17.1. During Term. You acknowledge that this Agreement will give you access to valuable and confidential information regarding the System, including our business development strategy and the operational, sales, promotional and marketing methods of Franchised Businesses. You agree that during the term of this Agreement, you will not, without our prior written consent, either directly or indirectly through any other person or entity: Page 33 of 39 + +Source: PF HOSPITALITY GROUP INC., 10-12G, 9/23/2015 + + + + + +17.1.1. Own, manage, engage in, be employed by, advise, make loans to, consult for, rent or lease to, or have any other interest in any business that (directly or indirectly) operates, or grants franchises or licenses to operate, a restaurant featuring pizza and related food specialties or that offers products or services substantially similar to those then offered by Restaurants ("Competitive Business"); 17.1.2. Divert or attempt to divert any business or customer, or potential business or customer, to any Competitive Business; or 17.1.3. Induce any person to leave his or her employment with us. 17.1.4. In any manner interfere with, disturb, disrupt, impair, diminish, or otherwise jeopardize our business or that of any of our franchisees. 17.2. After Termination, Expiration, or Transfer. For two (2) years after the expiration or termination of this Agreement or an approved Transfer to a new franchisee, you may not directly or indirectly own, manage, engage in, be employed by, advise, make loans to, consult for, or have any other interest in any Competitive Business that is, or intends to operate, within three (3) mile radius of the Premises of your Franchised Business or within a three (3) mile radius of any Restaurant then-operating or under construction to operate under the System, except as permitted by any Franchise Agreements that remain in effect between you and us. . 17.3. Owners and Employees. The Owners agree that they will personally bind themselves to this Section 17 by signing this Agreement or the attached Guaranty. With respect to the Owners, the time period in Section 17.2 [After Termination, Expiration, or Transfer] will run from the expiration, termination, or Transfer of this Agreement or from the termination of the Owner's relationship with you, whichever occurs first. You must also require and obtain execution of covenants similar to those set forth in Section 12 above, and this Section 17 (as modified to apply to an individual), from any or all of the following persons: your officers, directors, and their respective spouses and employees. (These persons and the Owners are each a "Restricted Party") The covenants required by this Section 17.3 [Owners and Employees] shall be in the form provided in Appendix C to this Agreement. Failure by Franchisee to obtain execution of a covenant required by this Section 17.3 [Owners and Employees] shall constitute a default under Section 15.2.13 [Termination By Us Without A Cure Period] above. 17.4. Indirect Violations Prohibited. You may not attempt to circumvent the restrictions in Sections 17.1 [During Term] and 17.2 [After Termination, Expiration, or Transfer] by engaging in prohibited activity indirectly through any other person or entity. 17.5. Enforcement. You agree that the existence of any claim you may have against us, whether or not arising from this Agreement, will not constitute a defense to our enforcement of this Section 17. You agree to pay all costs and expenses that we reasonably incur in enforcing this Section 17, including reasonable attorneys' fees. You acknowledge that a violation of the terms of this Section 17 would result in irreparable injury to us for which no adequate remedy at law may be available. Accordingly, you consent to the issuance of an injunction prohibiting any conduct in violation of the terms of this Section 17. Such injunctive relief will be in addition to any other remedies that we may have. 18. RELATIONSHIP OF THE PARTIES This Agreement does not create a fiduciary or other special relationship or make you or us an agent, legal representative, joint venturer, partner, employee, or servant of each other for any purpose. You are not authorized to, and agree that you will not, make any contract, agreement, warranty, or representation on our behalf, or create any obligation, express or implied, on our behalf. During the term of this Agreement, you agree to hold yourself out to the public as an independent contractor operating the Franchised Business under license from us, and you agree to disclose your status as independent contractor in all business dealings and exhibit a notice to that effect (the location and content of which we reserve the right to specify) on all promotional materials, invoices and stationery. Page 34 of 39 + +Source: PF HOSPITALITY GROUP INC., 10-12G, 9/23/2015 + + + + + +19. INDEMNIFICATION You agree to hold harmless, defend, and indemnify us and our past, present and future affiliates, officers, directors, shareholders, agents, attorneys, consultants, and employees against any claims, losses, costs, expenses (including, but not limited to, reasonable attorneys' fees, costs of investigation, settlement costs, and interest), liabilities and damages (collectively, "Claims") arising directly or indirectly from, as a result of, or in connection with your activities under this Agreement. With respect to any threatened or actual litigation, proceeding, or dispute that could directly or indirectly affect us or any of the other indemnitees under this Section, if you do not assume the active defense of the matter within a reasonable time, we will have the right, but not the obligation, to: (i) choose counsel; (ii) direct and control the handling of the matter; and (iii) settle any claim against the indemnitees. This Section will survive the expiration or termination of this Agreement, and applies to Claims even if they exceed the limits of your insurance coverage. 20. CONSENTS AND WAIVERS 20.1. Consent. Whenever our prior written consent is required under this Agreement, you agree to make a timely written request to us for such consent. Our approval or consent must be in writing and signed by an authorized officer to be effective. 20.2. Waivers. No delay or failure to exercise any right under this Agreement or to insist upon your strict compliance with any obligation or condition, and no custom or practice that differs from the terms of this Agreement, will constitute a waiver of our right to exercise the contract provision or to demand your strict compliance with the terms of this Agreement. Our waiver of any particular default does not affect or impair our rights with respect to any subsequent default you may commit. Our waiver of a default by another franchisee does not affect or impair our right to demand your strict compliance with the terms of this Agreement. Our acceptance of any payments due from you does not waive any prior defaults. 21. NOTICES Notices related to this Agreement must be in writing and personally delivered, sent by registered mail, or by other means which affords the sender evidence of delivery, or of rejected delivery, to the respective parties. Any notice by a means that affords the sender evidence of delivery, or rejected delivery, shall be deemed to have been given at the date and time of receipt or rejected delivery. We will send notices intended for you to your address on the first page of this Agreement. You agree to send notices intended for us to our principal business address, which is currently 2200 West Cypress Creek Road, 1st Floor, Fort Lauderdale, Florida 33309. Either party can change its notice address by informing the other party in writing of a new address. 22. ENTIRE AGREEMENT AND AMENDMENTS This Agreement and the documents referred to herein constitute the entire agreement between you and us with respect to the Franchised Business and supersede all prior negotiations, representations, correspondence, and agreements concerning the same subject matter. However, nothing in this Agreement is meant to disclaim any representation that we make in the Franchise Disclosure Document that we have given to you. Any amendment to this Agreement will not be binding on either party unless that amendment is writing and signed by both parties. Page 35 of 39 + +Source: PF HOSPITALITY GROUP INC., 10-12G, 9/23/2015 + + + + + +23. CONSTRUCTION OF THE AGREEMENT, SEVERABILITY, AND SURVIVAL 23.1. Clauses are Severable. Each provision of this Agreement is severable from the others. If, for any reason, any provision is determined by a court to be invalid, the invalidity will not impair the operation of the remaining provisions of this Agreement. The latter will continue to be given full force and effect and bind us and you. 23.2. Survival of Clauses. Each provision of this Agreement that expressly or by reasonable implication is to be performed, in whole or in part, after the expiration, termination, or Transfer of this Agreement will survive such expiration, termination, or Transfer. 23.3 Force Majeure. If the performance of any obligation by any party under this Agreement is prevented, hindered or delayed by reason of Force Majeure, which cannot be overcome by reasonable commercial measures, then the parties shall be relieved of their respective obligations (but only to the extent, that the parties, having exercised best efforts, are prevented, hindered or delayed in such performance) during the period of such Force Majeure. The party whose performance is affected by an event of Force Majeure shall give prompt written notice in the circumstances of such Force Majeure event to the other party by describing the nature of the event and an estimate as to its duration, if possible. As used in this Agreement, the term "Force Majeure" means any act of God, strike, lock out or other industrial disturbance, terrorist act, war (declared or undeclared), riot, epidemic, fire or other catastrophe, or act of any government. However, your inability to obtain financing or make payments (regardless of the reason) does not constitute "Force Majeure." 23.4 Cover Page, Recitals, and Captions. The parties agree to incorporate by reference, and include in the text of this Agreement, the information on the cover page and in the recital paragraphs. The parties also agree that all of the captions in this Agreement are meant only for the convenience of the parties, and none of the captions shall be deemed to affect the meaning or construction of any provision of this Agreement. 23.5 No Third Party Rights. Except as otherwise stated in this Agreement, nothing in this Agreement is intended (nor shall be deemed) to confer upon any party any rights or remedies under or by reason of this Agreement, except for you, us, and such of our respective successors and assigns as may be contemplated (and, as to you, permitted) by Sections 13 and 14 above. 24. GOVERNING LAW This Agreement and the relationship between the parties is governed by and will be construed exclusively in accordance with the laws of the State of Florida (without regard to, and without applying, Florida conflict-of-law rules). 25. DISPUTES 25.1. Submission to Mediation. Except as otherwise provided in Section 25.7 [Remedies Not Exclusive] below, any controversy or claim arising between us will first be submitted to non-binding mediation administered by an established, neutral mediation service with experience in franchise disputes. Both parties must sign a confidentiality agreement before participating in any mediation proceeding. The mediation will take place in the city where our principal offices are located at the time the demand for mediation is filed. Once either party has submitted a dispute to mediation, the obligation to attend will be binding on both parties. Each party will bear its own costs with respect to the mediation. The fee for the mediation, however, will be split equally. 25.2. Forum for Litigation. You and the Owners must file any suit against us, and we may file any suit against you, in the federal or state court where our principal office is located at the time the suit is filed. The parties waive all questions of personal jurisdiction and venue for the purpose of carrying out this provision. Page 36 of 39 + +Source: PF HOSPITALITY GROUP INC., 10-12G, 9/23/2015 + + + + + +25.3. Mutual Waiver of Class Actions. Any lawsuit, claim, counterclaim, or other action may be conducted only on an individual basis, and not as part of a consolidated, common, or class action. 25.4. Mutual Waiver of Jury Trial. You and we each irrevocably waive trial by jury in any litigation. 25.5. Mutual Waiver of Punitive Damages. Each of us waives any right to or claim of punitive, exemplary, multiple, or consequential damages against the other in litigation and agrees to be limited to the recovery of actual damages sustained. 25.6 Time Period to Bring Claims. Any and all claims and actions arising out of or relating to this Agreement, the relationship between you and us, or your operation of the Restaurant, brought by any party hereto against the other, must be commenced within one (1) year from the occurrence of the facts giving rise to such claim or action, or, it is expressly acknowledged and agreed by all parties, such claim or action will be irrevocably barred. 25.7. Remedies Not Exclusive. Except as provided in Sections 25.1 [Submission to Mediation] through 25.4 [Mutual Waiver of Jury Trial] above, no right or remedy that the parties have under this Agreement is exclusive of any other right or remedy under this Agreement or under applicable law. 25.8. Our Right to Injunctive Relief. Nothing in this Agreement bars our right to obtain injunctive or declaratory relief against a breach or threatened breach of this Agreement that will cause us loss or damage. You agree that we will not be required to prove actual damages or post a bond or other security in seeking or obtaining injunctive relief (both preliminary and permanent) and/or specific performance. 25.9. Attorneys Fees and Costs. You agree to reimburse us for all expenses we reasonably incur (including attorneys' fees): (a) to enforce the terms of this Agreement or any obligation owed to us by you and/or the Owners; and (b) in the defense of any claim you and/or the Owners assert against us upon which we substantially prevail in court, arbitration, mediation, or other formal legal proceedings. 26. ACKNOWLEDGMENTS 26.1. Independent Investigation. You and the Owners acknowledge that: 26.1.1. You have conducted an independent investigation of the business venture contemplated by this Agreement and recognize that it involves business risks and that your results will be largely dependent upon your own efforts and ability; 26.1.2. We expressly disclaim the making of, and you acknowledge that you have not received, any representation, express or implied, as to the potential volume, profits or success of the business venture contemplated by this Agreement; 26.1.3. Any financial performance information presented in our Franchise Disclosure Document is not a warranty or guaranty of the results that you will achieve, and your experience is likely to differ; and 26.1.4. We do not, by virtue of any approvals or advice provided to you, assume responsibility or liability to you or any third- party to which we would otherwise not be subject. Page 37 of 39 + +Source: PF HOSPITALITY GROUP INC., 10-12G, 9/23/2015 + + + + + +26.1.5 You have sole and complete responsibility for the choice of the Premises; that we have not (and will not be deemed to have, even by virtue of our approval of the proposed Premises) given any representation, promise, or guarantee of your success at the Premises; and that you will be solely responsible for its own success at the Premises. 26.1.6 We make no warranty as to your ability to operate the Franchised Business in the jurisdiction in which the Franchised Business is to be operated. You must seek or obtain advice of counsel specifically with respect to this issue. 26.2. Receipt of Documents. You acknowledge that you received a copy of this Agreement, the exhibit(s) hereto, and agreements relating hereto, if any, with all of the blank lines therein filled in, at least seven (7) days before the date when this Agreement was signed, and with sufficient time within which to review the Agreement, with advisors of your choosing. You further acknowledge that you received our franchise disclosure document required by the Federal Trade Commission's Franchise Rule at least fourteen (14) days before the date this Agreement was signed. 26.3. Personal Obligations of Owners. The Owners acknowledge that, by signing this Agreement or the Personal Guaranty attached as Appendix B, they are binding themselves as individuals to all of the terms and conditions of this Agreement, including without limitation Section 9, Section 14, Section 17, and Section 25. 26.4. System Standards. Although we retain the right to establish and periodically modify System standards, which you have agreed to maintain in the operation of the Franchised Business, you retain the right and sole responsibility for the day to day management and operation of the Franchised Business and the implementation and maintenance of System standards at the Franchised Business. 26.5. Other Offers. You acknowledge and agree that we may modify the offer of our franchises to other franchisees in any manner and at any time, which offers and agreements have or may have terms, conditions, and obligations that may differ from the terms, conditions, and obligations in this Agreement. 26.6. No Conflicting Obligations. Each party represents and warrants to the others that there are no other agreements, court orders, or any other legal obligations that would preclude or in any manner restrict such party from: (a) negotiating and entering into this Agreement; (b) exercising its rights under this Agreement; and/or (c) fulfilling its responsibilities under this Agreement. [Signature page follows.] Page 38 of 39 + +Source: PF HOSPITALITY GROUP INC., 10-12G, 9/23/2015 + + + + + +The parties, intending to be legally bound, have entered into this Agreement on the date first written above. Pizza Fusion Holdings, Inc. Franchisee By: By: Name: Name: Title: Title: Page 39 of 39 + +Source: PF HOSPITALITY GROUP INC., 10-12G, 9/23/2015 + + + + + +APPENDIX A OPENING DEADLINE AND DELIVERY/CATERING AND ADVERTISING AREA 1. Opening Deadline: ____________________________ [Unless, otherwise agreed upon, the Opening Deadline will be nine months after the Agreement Date]. 2. Delivery/Catering and Advertising Area: (to be completed once Premises known). 3. Site Selection Area (if applicable): + +Pizza Fusion Holdings, Inc. Franchisee By: By: Name: Name: Title: Title: -A - + +Source: PF HOSPITALITY GROUP INC., 10-12G, 9/23/2015 \ No newline at end of file diff --git a/full_contract_txt/PfHospitalityGroupInc_20150923_10-12G_EX-10.1_9266710_EX-10.1_Franchise Agreement3.txt b/full_contract_txt/PfHospitalityGroupInc_20150923_10-12G_EX-10.1_9266710_EX-10.1_Franchise Agreement3.txt new file mode 100644 index 0000000000000000000000000000000000000000..0a03eff4d4d0886e8fc540a3523e2f079c764772 --- /dev/null +++ b/full_contract_txt/PfHospitalityGroupInc_20150923_10-12G_EX-10.1_9266710_EX-10.1_Franchise Agreement3.txt @@ -0,0 +1,19 @@ +APPENDIX C SAMPLE OF NON-DISCLOSURE AND NON-COMPETITION AGREEMENT (BETWEEN FRANCHISEE AND ITS PERSONNEL) THIS SAMPLE OF NON-DISCLOSURE AND NON-COMPETITION AGREEMENT ( "Agreement") is made this _____ day of _________, 20___, by and between ___________________________ (the "Franchisee"), and ___________________________, who is an officer, director, or employee of Franchisee (the "Member"). RECITALS: WHEREAS, __________________ ("Franchisor") has developed a distinctive set of specifications and operating procedures (collectively, the "System") for the operation of "Pizza Fusion" restaurant businesses ("Franchised Businesses"). WHEREAS, Franchisor and Franchisee have executed a Franchise Agreement ("Franchise Agreement") granting Franchisee the right to operate a Franchised Business under the terms and conditions of the Franchise Agreement; WHEREAS, the Member, by virtue of his or her position with Franchisee, will gain access to certain of Franchisor's Confidential Information, as defined herein, and must therefore be bound by the same confidentiality and non-competition agreement that Franchisee is bound by. IN CONSIDERATION of these premises, the conditions stated herein, and for other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties agree as follows: 1. Confidential Information. Member shall not, during the term of the Franchise Agreement or thereafter, communicate, divulge or use, for any purpose other than the operation of the Franchised Business, any confidential information, knowledge, trade secrets or know-how which may be communicated to Member or which Member may learn by virtue of Member's relationship with Franchisee. All information, knowledge and know-how relating to Franchisor, its business plans, Franchised Businesses, or the System ("Confidential Information") is deemed confidential, except for information that Member can demonstrate came to Member's attention by lawful means prior to disclosure to Member; or which, at the time of the disclosure to Member, had become a part of the public domain. 2. Covenants Not to Compete. (a) Member specifically acknowledges that, pursuant to the Franchise Agreement, and by virtue of its position with Franchisee, Member will receive valuable specialized training and Confidential Information, including, without limitation, information regarding the operational, sales, promotional, and marketing methods and techniques of Franchisor and the System. (b) Member covenants and agrees that during the term of the Franchise Agreement, except as otherwise approved in writing by Franchisor, Member shall not, either directly or indirectly, for itself, or through, on behalf of, or in conjunction with any person, persons, partnership, corporation, or entity: (i) Own, manage, engage in, be employed by, advise, make loans to, consult for, rent or lease to, or have any other interest in business that (directly or indirectly) operates, or grants franchises or licenses to operate, a restaurant featuring pizza and related food specialties or that offers products or services substantially similar to those then offered by Pizza Fusions Restaurants ("Competitive Business"); C - 1 + +Source: PF HOSPITALITY GROUP INC., 10-12G, 9/23/2015 + + + + + +(ii) Divert or attempt to divert any business or customer, or potential business or customer, to any Competitive Business; or (iii) Induce any person to leave his or her employment with Franchisee or Franchisor. (c) Member covenants and agrees that during the Post-Term Period (defined below), except as otherwise approved in writing by Franchisor, Member shall not, either directly or indirectly, own, manage, engage in, be employed by, advise, make loans to, consult for, or have any other interest in any Competitive Business that is, or intends to operate, within a three (3) mile radius of the premises of your Franchised Business or within a three (3) mile radius of any Franchised Business then-operating or under construction to operate under the System. (d) As used in this Agreement, the term "Post-Term Period" shall mean a continuous uninterrupted period of two (2) years from the date of: (a) a transfer permitted under Section 14 of the Franchise Agreement; (b) expiration or termination of the Franchise Agreement (regardless of the cause for termination); (c) termination of Member's employment with Franchisee; and/or (d) a final order of a duly authorized arbitrator, panel of arbitrators, or a court of competent jurisdiction (after all appeals have been taken) with respect to any of the foregoing or with respect to the enforcement of this Agreement; either directly or indirectly (through, on behalf of, or in conjunction with any persons, partnership, corporation or entity). 3. Injunctive Relief. Member acknowledges that any failure to comply with the requirements of this Agreement will cause Franchisor irreparable injury, and Member agrees to pay all court costs and reasonable attorney's fees incurred by Franchisor in obtaining specific performance of, or an injunction against violation of, the requirements of this Agreement. 4. Severability. All agreements and covenants contained herein are severable. If any of them, or any part or parts of them, shall be held invalid by any court of competent jurisdiction for any reason, then the Member agrees that the court shall have the authority to reform and modify that provision in order that the restriction shall be the maximum necessary to protect Franchisor's and/or Franchisee's legitimate business needs as permitted by applicable law and public policy. In so doing, the Member agrees that the court shall impose the provision with retroactive effect as close as possible to the provision held to be invalid. 5. Delay. No delay or failure by the Franchisor or Franchisee to exercise any right under this Agreement, and no partial or single exercise of that right, shall constitute a waiver of that or any other right provided herein, and no waiver of any violation of any terms and provisions of this Agreement shall be construed as a waiver of any succeeding violation of the same or any other provision of this Agreement. 6. Third-Party Beneficiary. Member hereby acknowledges and agrees that Franchisor is an intended third-party beneficiary of this Agreement with the right to enforce it, independently or jointly with Franchisee. C - 2 + +Source: PF HOSPITALITY GROUP INC., 10-12G, 9/23/2015 + + + + + +IN WITNESS WHEREOF, the Franchisee and the Member attest that each has read and understands the terms of this Agreement, and voluntarily signed this Agreement on the date first written above. FRANCHISEE MEMBER By: By: Name: Name: Title: Title: C - 3 + +Source: PF HOSPITALITY GROUP INC., 10-12G, 9/23/2015 \ No newline at end of file diff --git a/full_contract_txt/PharmagenInc_20120803_8-KA_EX-10.1_7693204_EX-10.1_Endorsement Agreement.txt b/full_contract_txt/PharmagenInc_20120803_8-KA_EX-10.1_7693204_EX-10.1_Endorsement Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..54909d1c12bda173aaf9d92d7c690c5def65ccbd --- /dev/null +++ b/full_contract_txt/PharmagenInc_20120803_8-KA_EX-10.1_7693204_EX-10.1_Endorsement Agreement.txt @@ -0,0 +1,51 @@ +Exhibit 10.1 ENDORSEMENT AGREEMENT THIS ENDORSEMENT AGREEMENT (the "Agreement") is dated as of this ____day of ____________, 2012, but made effective as of February 20, 2012 ("Effective Date") between Healthcare Distribution Specialists LLC ("HDS"), a Delaware corporation, and Paul Silas ("Celebrity), an individual. AGREEMENT 1. Engagement. HDS engages Celebrity and Celebrity hereby accepts the engagement to provide for his endorsement of HDS' product, Clotamin in the United States (Territory") as further outlined herein. In addition, it is understood and agreed that with respect to the Website, as defined below, the Territory shall be worldwide. 2. Term of Agreement. The term of this Agreement shall be for one (1) year commencing on the Effective Date and ending on February 19, 2013 ("Term"). 3. Grant. During the Term and subject to the limitations set forth in Paragraphs 9 and 10, HDS shall have the right to use the name, image, likeness, characterization, visual and audio representation of Celebrity ("Celebrity Attributes") in connection with HDS' product, Clotamin, in the Territory as follows: A. In a television commercial (specific spot length to be mutually agreed upon) promoting Clotamin ("Commercial") aired specifically in the following three (3) television markets: (1) Washington, DC Metro Area; (2) Florida; and (3) Texas (collectively "Markets"); B. On HDS' website (www.clotamin.corn) ("Website"); and C. In Clotamin-related press releases. D. In connection with any HDS' usage of Celebrity Attributes as outlined above in Paragraphs 3(A)-(C), HDS will feature the following disclaimer in close proximity to said usage: "PAUL SILAS IS NOT A MEDICAL AUTHORITY. THESE STATEMENTS HAVE NOT BEEN EVALUATED BY THE FOOD AND DRUG ADMINISTRATION. THIS PRODUCT IS NOT INTENDED TO DIAGNOSE, TREAT, CURE OR PREVENT ANY DISEASE." 4. Duties of Celebrity and Rights of HDS. During the Term and subject to the limitations set forth in Paragraphs 9 and 10, Celebrity agrees to provide HDS with the following: A. Upon request by HDS, one (1) production session to be used for the production of the Commercial ("Production Session"). The location, date and time of the Production Session shall be mutually agreed upon by Celebrity and HDS. In the event the Production Session exceeds eight (8) hours in duration HDS and Celebrity will negotiate in good faith additional compensation to Celebrity for time in excess of eight (8) hours. + +Source: PHARMAGEN, INC., 8-K/A, 8/3/2012 + + + + + +B. Celebrity will serve as a member of the Clotamin/HDS Board of Advisors, whose members' sole responsibility is to be listed as a Clotamin brand ambassador on the Website and/or Clotamin related press releases. With respect to the Board of Advisors, Celebrity will not be responsible for any additional services such as attending meetings, corporate functions, etc. C. HDS may request an additional production session(s), or a media tour or personal appearance(s) for an additional fee to be mutually agreed upon by the parties. 5. Consideration. As consideration for Celebrity's services under this Agreement, HDS agrees as follows: A. In-kind Payment: HDS will provide Celebrity with a one (1) year complimentary supply (i.e., at least 365 caplets) of Clotamin product during the Term. B. Cash Payment: (1) HDS will provide payment of Fifty Thousand and NO/100 Dollars ($50,000) made payable to Celebrity's agent. CSE, as follows $10,000 Within ten (10) days of the parties execution of this Agreement $15,000 Within 60 days of the parties execution of this agreement $25,000* Ten (10) days prior to the Production Session [*Should Company decide not to conduct the Production Session, then the $25,000 allocated for said Production Session ("Production Fee") will not be owed to Celebrity and notice should be given to CSE as soon as reasonably known by Company if Company does not intend to conduct the Production Session. However, if Company schedules the Production Session, then said Production Fee is non-refundable regardless if the Production Session occurs. ] (a) CSE, shall invoice HDS for these fees and HDS shall pay such invoice within ten (10) business days following receipt of the CSE invoice. (b) Payments shall be made to CSE and delivered to 600 Galleria Parkway, Suite 1900, Atlanta, Georgia 30339. (2) If HDS desires to add an additional market or state to the Markets for the Commercial to air during the Term, then HOS will pay Celebrity Five Thousand and NO/100 Dollars ($5,000) for said additional state/market, and the parties will amend the Agreement to add the additional state/market accordingly. 6. Expenses. If applicable, HDS agrees to provide and pay for the expenses related to Celebrity's services provided in Paragraph 4, which shall include but not be limited to the following: A. First-class airfare, first-class ground transportation, hotel accommodations, and meals for Celebrity; and B. First-class airfare, ground transportation and hotel accommodations for one (1) representative. 7. Union Dues and Fees. Company represents that the services hereunder shall not be subject to SAG, AFTRA or any other entertainment guild contract. 2 + +Source: PHARMAGEN, INC., 8-K/A, 8/3/2012 + + + + + +8. Exclusivity. Celebrity represents and warrants that during the Term and in the Territory, Celebrity will not endorse or make any appearances or advertisements on behalf of any other multivitamin. 9. Review, Approval, and Ownership of Advertising. All HDS' uses of Celebrity Attributes in connection with the Commercial and/or press releases shall be subject to the prior written approval of Celebrity via his agent, CSE. Said written approval must be given within five (5) business days of CSE's receipt or said usage shall be deemed unapproved. Any such usage featuring Celebrity in the Commercial and/or press releases shall be and remain the property of HDS; however, HDS shall have the right to use said Commercial and/or press releases solely as outlined in Paragraph 3 and only during the Term. Celebrity may use said materials in whole or in part solely for the purpose of presenting Celebrity's work in Celebrity's personal portfolio, website or otherwise and/or on Celebrity's agent's website. Such usage may not be sold or transferred. 10. Termination A. HDS shall have the right to terminate this Agreement upon ten (10) days prior written notice to Celebrity in the event Celebrity fails to perform the duties set forth in Paragraph 4 hereof or breaches any other covenant or agreement set forth herein and fails to cure same (if curable) within seven (7) days of receipt of written notice. Such termination shall relieve HDS of its obligation to provide any further consideration pursuant to this Agreement. B. Celebrity shall have the right to terminate this Agreement upon ten (10) days prior written notice to HDS in the event of the occurrence of any of the following: (1) HDS adjudicates as insolvent or declares bankruptcy; or (2) HDS fails to provide consideration due pursuant to this Agreement, within ten (10) days following the date such consideration is due hereunder, provided that HDS is notified in writing of such non-payment by Celebrity and such payment by HDS is not made within three (3) days following such notification; or (3) HDS fails breaches any covenant or agreement set forth herein and fails to cure same (if curable) within seven (7) days of receipt of written notice. Furthermore, HDS agrees that such termination shall not relieve it of its obligation to provide consideration as contemplated hereunder. Celebrity shall not have waived any of its rights at law or in equity by exercising any provision of this paragraph. C. HDS' rights to the use of Celebrity and Celebrity's Attributes as set forth in Paragraphs 3 and 4 shall end immediately should this Agreement be terminated pursuant to Paragraph 10(A) or Paragraph 10(B) above. 10. Notices. All notices provided for herein shall be given in writing by hand delivery, courier service, or by certified mail return receipt requested to the addresses of the parties set forth as follows (unless change of address by notice to the other party is given as provided in this paragraph 10): If to Celebrity: If to HDS Paul Silas Mackie A. Barch, c/o Lonnie Cooper Co-Founder Chief Executive Officer Healthcare Distribution Specialists LLC CSE 9337 Fraser Avenue 600 Galleria Parkway, Suite 1900 Silver Spring, MD 20910 Atlanta, GA 30339 with a copy to: Sue Graddy Fax No. (770) 226-5560 3 + +Source: PHARMAGEN, INC., 8-K/A, 8/3/2012 + + + + + +11. Licensing. Nothing contained herein shall be construed to convey to HDS any right to use the names, trademarks, service marks, symbols, logos, emblems colors, etc. ("Marks") , of the Charlotte Bobcats, NBA, or any other organization with which the Celebrity is or has been associated. All rights to the use of such Marks must be acquired from the appropriate rights holder, and if such Marks are used by HDS then, in such event HDS (a) shall provide Celebrity in advance with satisfactory evidence of HDS' right to use such Marks and (b) agree to indemnify, protect and hold Celebrity harmless from and against any and all claims, damages and/or losses which may arise from HDS' use of such Marks. 12. Representations and Warranties of HDS. Celebrity relies upon HDS' skill and judgment and also upon the following representations of HDS which shall be in effect throughout the term of this Agreement: A. HDS' products will be merchantable and fit for the purpose for which they are intended, and B. HDS' products will conform at all times to all applicable federal, state and local laws, rules, regulations, ordinances, and other enactments and industry standards, including, but not limited to, those relating to product safety. 13. Indemnity. HDS shall be solely responsible for all liability arising out of production, distribution and sale of its product. HDS hereby agrees to indemnify, defend and hold harmless Celebrity, his agents, representatives and employees (referred to collectively as "Celebrity Indemnities") from and against any and all claims, actions, causes or action, damages, injuries, expenses, liabilities (joint and several), penalties fines, attorneys fees, court costs, and any other expenses incurred by Celebrity Indemnities arising out of (1) breach by HDS of any of the terms, representations or warranties made by HDS in this Agreement; or (2) HDS product liability or trademark patent or other proprietary right infringement; or (3) errors, omissions, fraudulent or negligent acts by HDS, its employees, agents or subcontractors in connection with (i) any advertising featuring Celebrity; (ii) with the performance of HDS' duties and obligations under this Agreement; (iii) with the production, distribution, promotion, marketing and sales of products including related product packaging; and/or (iv) with the operation and management of its production and distribution facilities, however caused, HDS shall not be obligated to indemnify Celebrity with respect to damages which are the result of the active negligence or willful misconduct of Celebrity. 14. Insurance. HDS agrees to provide and maintain at its own expense, the following insurance coverages: A. Commercial General Liability coverage of product liability with limits no less than $1,000,000 per occurrence and $2,000,000 aggregate. B. Umbrella / Excess Liability coverage inclusive of product liability with limits not less than $5,000,000 per occurrence and aggregate. C. Media Liability insurance with limits not less than $2,000,000 per occurrence and aggregate. The Celebrity shall be named as an additional insured on coverages A, B and C. Celebrity is afforded waiver of subrogation on coverages A, B and C. All policies listed under A, B and C should have a thirty (30) day notice of cancellation provision or endorsement. HDS will provide Celebrity's agent, CSE, with a certificate of insurance within five (5) days of its request for same. 15. Relationship of Parties. Nothing contained in this Agreement shall be deemed or construed to place the parties in the relationship of partners, joint venturers, principal-agents, or employer-employee, it being understood that the parties hereto are and will remain independent contractors in all respects and neither party shall have any right to obligate or bind the other in any manner whatsoever. 4 + +Source: PHARMAGEN, INC., 8-K/A, 8/3/2012 + + + + + +16. Assignment. Neither this Agreement nor any of the rights or obligations contained herein may be assigned or transferred by either party without the prior written consent of the other party. 17. Authority to Contract. Each of the parties hereto represents and warrants that it has full right and power to enter into this Agreement, to perform all obligations to be performed by it hereunder, and to grant all rights hereunder granted without violating the legal or equitable rights of any other person or entity, and that the execution and performance of this Agreement will not conflict with or result in a breach of or default under any of the terms or conditions of any agreement to which either party has agreed, or is a party, or may be bound. 18. Construction of Agreement. Each party acknowledges that it has participated in the negotiation of this Agreement and that no provision of this Agreement shall be construed against or he interpreted to the disadvantage of any party hereto by any court or other governmental or judicial authority by reason of such party having or deemed to have structured, dictated or drafted such provision. 19. Merger; Modification. This Agreement constitutes the entire agreement with respect to the subject matter contained herein and supersedes all previous communications and agreements between the parties pertaining to the subject matter hereof, whether written or oral. The terms of this Agreement may not be modified, waived, amended, discharged, terminated, or supplemented, or otherwise changed, except by a written document executed by an authorized representative of each party. 20. No Waiver. A waiver by either party of any of the terms or conditions of this Agreement in any instance shall not be deemed or construed to be a waiver of such term or condition for the future, or of any subsequent breach thereof, or any other term or condition of this Agreement. All remedies, rights, undertakings, obligations, and agreements contained in this Agreement shall be cumulative and none of them shall be in limitation of any other remedy, right, undertaking, obligation or agreement of either party. 21. Severability. If any provision of this Agreement, as applied to either party or to any circumstance, shall be adjudged by a court of competent jurisdiction to be void or unenforceable, whether at law or in equity, then such determination shall in no way affect any other provision of this Agreement, or the validity or enforceability of this Agreement. 22. Forum. The parties agree that the U.S. District Court for the Northern District of Georgia, the Superior Court of Cobb County, the State Court of Cobb County, or any other forum in Cobb County shall have personal jurisdiction over the parties and that such courts shall be the exclusive venue with respect to any claims or disputes related to the Agreement. 23. Choice of Law. Regardless of the place of execution hereof, this Agreement, all amendments hereto, and any and all issues or controversies arising here from or related hereto, shall be governed by and construed exclusively in accordance with the laws and decisions of the State of Georgia. 5 + +Source: PHARMAGEN, INC., 8-K/A, 8/3/2012 + + + + + +24. Attorneys' Fees. If any action is necessary to enforce the provisions of this Agreement, including any claims or demands, or to interpret this Agreement, the prevailing party shall be entitled to reasonable attorneys' fees, costs and necessary disbursements in addition to any other relief to which it may otherwise he entitled. 25. Captions: Structure. Section headings used in this Agreement are for convenience of reference only and shall not in any way affect the interpretation of any section of this Agreement or of the Agreement itself. 26. Time is of the Essence. Time is of the essence with respect to the performance of the duties and obligations hereunder. 27. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which when taken together shall he construed as a single instrument. This Agreement may be executed by facsimile or other electronic transmissions, and signatures on any facsimile or electronic transmission copy hereof shall be deemed authorized original signatures. 28. No Third Party Beneficiaries. This Agreement is not for the benefit of any third party and shall be deemed not to give any right or remedy to such third party, whether referred to herein or not. 29. Recitals. The recitals contained in this Agreement are true and correct and are incorporated herein by reference. [SIGNATURE PAGE TO FOLLOW] 6 + +Source: PHARMAGEN, INC., 8-K/A, 8/3/2012 + + + + + +IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and date first above written. WITNESS: Healthcare Distribution Specialists LLC ("HDS") By: /s/ Linda Lee By: /s/ Mackie A. Barch Date: February 17, 2012 Title: CEO WITNESS: Paul Silas ("Celebrity") By: /s/ Carolyn Silas By: /s/ Paul Silas Date: March 8, 2012 7 + +Source: PHARMAGEN, INC., 8-K/A, 8/3/2012 \ No newline at end of file diff --git a/full_contract_txt/PhasebioPharmaceuticalsInc_20200330_10-K_EX-10.21_12086810_EX-10.21_Development Agreement.txt b/full_contract_txt/PhasebioPharmaceuticalsInc_20200330_10-K_EX-10.21_12086810_EX-10.21_Development Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..4549fc9891744fdcf3abb349bc9438b0446b0466 --- /dev/null +++ b/full_contract_txt/PhasebioPharmaceuticalsInc_20200330_10-K_EX-10.21_12086810_EX-10.21_Development Agreement.txt @@ -0,0 +1,2161 @@ +Exhibit 10.21 + +Certain information has been excluded from this agreement (indicated by "[***]") because such information (i) is not material and (ii) would be competitively harmful if publicly disclosed. + +EXECUTION VERSION + +CO-DEVELOPMENT AGREEMENT + +This Co-Development Agreement ("Agreement"), made effective as of January 9, 2020 (the "Effective Date"), is by and between PhaseBio Pharmaceuticals Inc., a Delaware corporation, with a principal place of business at 1 Great Valley Parkway, Suite 30, Malvern, Pennsylvania 19355, USA ("PB"), and SFJ Pharmaceuticals X, Ltd. ("SFJ"), an SFJ Pharmaceuticals Group company and corporation organized and existing under the laws of the Cayman Islands, having its principal place of business at SIX, 2nd Floor, Cricket Square PO Box 2681, Grand Cayman, KY1-1111 Cayman Islands (each, a "Party" and collectively, the "Parties"). + +WHEREAS, SFJ is in the business of facilitating, among other things, the development and approval of pharmaceutical products and desires to provide financing and participate in conducting the Clinical Trials for the development of the Product as a treatment of patients for the reversal of the effects of the Ticagrelor Compound; and + +WHEREAS, PB has rights to the Product, is conducting clinical trials of the Product in the United States and the European Clinical Trial Countries, and would like to enter into an agreement with SFJ to provide operational support for the conduct of clinical trials of the Product in the European Clinical Trial Countries, to conduct clinical trials of the Product in the Designated Asian Countries, and to provide global financing for the continued development of the Product. + +NOW THEREFORE, in consideration of the mutual agreements contained herein and other good and valuable consideration, the sufficiency of which is hereby acknowledged, the Parties agree as follows: + +ARTICLE 1 + +DEFINITIONS + +1.1 Defined Terms. Initially capitalized terms will have the meaning ascribed to such terms in this Agreement, including the following terms which will have the following respective meanings: + +1.1.1 "Account" is any "account" as defined in the UCC with such additions as such term may hereafter be made and includes, without limitation, all accounts receivable and other sums owing to PB. + +1.1.2 "Affiliate" means, with respect to a party, a business entity under common control with, or controlling or controlled by, such party, with "control" meaning direct or indirect ownership of 50% or more of the voting interest in such other entity, and in the case + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +of a partnership, control of the general partner. Notwithstanding the foregoing, neither The Blackstone Group Inc. nor any of its divisions, including Blackstone Life Sciences, shall be deemed to be an "Affiliate" of SFJ. + +1.1.3 "Alliance Manager" has the meaning ascribed to such term in Section 5.1.5. + +1.1.4 "Anti-Corruption Laws" means the U.S. Foreign Corrupt Practices Act, as amended, the UK Bribery Act 2010, as amended, and any other applicable anti-corruption laws and laws for the prevention of fraud, racketeering, money laundering or terrorism. + +1.1.5 "Applicable Law" means the applicable laws, rules and regulations, including any rules, regulations, guidelines, or other requirements of any Governmental Authorities (including any Regulatory Authorities), to the extent legally binding, that may be in effect from time to time in any country or regulatory jurisdiction of the Territory. For clarity, Applicable Laws will include the FFDCA, the PHSA, the Anti-Corruption Laws, and all laws, regulations and legally binding guidelines applicable to the Clinical Trials, including GCP, GLP, GMP and ICH guidelines. + +1.1.6 "Approval Buy-Out Payment" has the meaning ascribed to such term in Section 6.7.1. + +1.1.7 "Approval Payments" has the meaning ascribed to such term in Section 6.1. + +1.1.8 "Approved CRO" has the meaning ascribed to such term in Section 2.4.1. + +1.1.9 "Approved Third Party Vendor Costs" has the meaning ascribed to such term in Section 5.2.2.2(g). + +1.1.10 "Approved Vendor" has the meaning ascribed to such term in Section 2.4.2. + +1.1.11 "AstraZeneca Product" has the meaning ascribed to such term in the AZ License. + +1.1.12 "AstraZeneca Product Improvements" has the meaning ascribed to such term in the AZ License. + +1.1.13 "AstraZeneca Product Know-How" has the meaning ascribed to such term in the AZ License. + +1.1.14 "AstraZeneca Product Patents" has the meaning ascribed to such term in the AZ License. + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +1.1.15 "AstraZeneca Product References" has the meaning ascribed to such term in the AZ License. + +1.1.16 "AZ License" means the License Agreement between MedImmune and PB dated November 21, 2017, a copy of which is attached hereto as Exhibit L, as amended by that certain First Amendment to License Agreement dated January 9, 2020, a copy of which is attached hereto as Exhibit M. + +1.1.17 "BLA" means: (a) a biologics license application submitted to the FDA pursuant to Section 351(a) of the PHSA and the regulations promulgated thereunder, or its successor application; or (b) an application for authorization to market and/or sell a biological product in any country or regulatory jurisdiction other than the US submitted to the applicable Regulatory Authority in such country or regulatory jurisdiction, including, with respect to the EU, a marketing authorization application submitted either (i) to the EMA pursuant to the centralized EU filing procedure or (ii) to the applicable national Regulatory Authority in an individual EU member state if the centralized EU filing procedure is not used. + +1.1.18 "Brilinta Competing Product" means any P2Y12 receptor antagonist, other than the AstraZeneca Product or Generic Ticagrelor Product. + +1.1.19 "Business Day" means a day that is not a Saturday, Sunday or a US federal holiday. + +1.1.20 "Buy-Out Payment" means an Approval Buy-Out Payment or a Change of Control Buy-Out Payment. + +1.1.21 "Calendar Quarter" means each successive period of three (3) consecutive calendar months ending on March 31, June 30, September 30 and December 31; provided, that, the (a) the first Calendar Quarter shall begin on the Effective Date and end on the last day of the Calendar Quarter in which the Effective Date falls, and (b) the final Calendar Quarter shall end on the last day of the Term. + +1.1.22 "Calendar Year" means each successive period of twelve (12) months commencing on January 1 and ending on December 31; provided, that, (a) the first Calendar Year shall begin on the Effective Date and end on December 31 of the Calendar Year in which the Effective Date falls, and (b) the final Calendar Year shall end on the last day of the Term. + +1.1.23 "Case Report Form" or "CRF" means the collection of documents designed specifically for recording data pursuant to the Protocol. A CRF is completed for each Subject and will be in electronic form, validated and in compliance with all Applicable Laws. + +1.1.24 "CFC" means a "controlled foreign corporation" as defined in the IRC. + +1.1.25 "Change of Control" means, with respect to PB, at any time prior to the date of the payment by PB of the final Approval Payment hereunder, (a) a merger, reorganization or consolidation with a Third Party which results in the voting securities of PB outstanding + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +immediately prior thereto ceasing to represent, or being converted into or exchanged for voting securities that do not represent, at least fifty percent (50%) of the combined voting power of the voting securities of the surviving entity or the parent corporation of the surviving entity immediately after such merger, reorganization or consolidation, (b) a transaction in which a Third Party becomes the beneficial owner of fifty percent (50%) or more of the combined voting power of the outstanding securities of PB, other than through the issuance of voting securities for the purpose of raising financing to one or more financial or institutional investors that are not then controlled by an entity engaged in the development or commercialization of pharmaceutical or biotechnology products, or (c) the sale or other transfer of all or substantially all of PB's business or assets relating to the Product for use in the Indication. A Licensing Transaction shall not constitute a Change of Control, unless such Licensing Transaction includes the grant of US Commercialization Rights in which event such Licensing Transaction shall be deemed to be a Change in Control. + +1.1.26 "Change of Control Buy-Out Payment" has the meaning ascribed to such term in Section 6.7.2. + +1.1.27 "Claim" means any Third Party claim, demand, suit and/or cause of action. + +1.1.28 "Clinical Investigator" means the principal investigator at each Site. + +1.1.29 "Clinical Investigator Meeting" has the meaning ascribed to such term in Section 3.2.2.1. + +1.1.30 "Clinical Supply Agreement" has the meaning ascribed to such term in Section 3.14.1.2. + +1.1.31 "Clinical Supply Agreement" has the meaning ascribed to such term in Section 3.14.1.1. + +1.1.32 "Clinical Trials" means the Phase 3 Trial, any required supplemental clinical trial of the Product in China contemplated by the Development Plan, and the pharmacokinetic study of the Product in Japanese Subjects contemplated by the Development Plan. + +1.1.33 "Clinical Trial Activity" has the meaning ascribed to such term in Section 2.3.1. + +1.1.34 "Clinical Trial Agreement" has the meaning ascribed to such term in Section 3.2.1.3. + +1.1.35 "Clinical Trials Database" has the meaning ascribed to such term in Section 3.5.3.1. + +1.1.36 "Clinical Trials Master File" has the meaning ascribed to such term in Section 3.5.4. + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +1.1.37 "CMC" means chemistry, manufacturing and controls. + +1.1.38 "CMC Information" means the CMC information intended or required for the submission of an IND or BLA. + +1.1.39 "CMO" means contract manufacturing organization or contract development and manufacturing organization. + +1.1.40 "Commercial Launch" means, with respect to the Product and a country in the Territory, the first sale to a Third Party of such Product in such country after (a) Regulatory Approval and (b) in any country in which price approval is necessary or relevant for a majority of the population to obtain access to pharmaceutical products, price approval for such Product in such country. + +1.1.41 "Commercialization" or "Commercialize" means the commercial manufacture, marketing, promotion, sale and/or distribution of the Product. For clarity, Commercialization excludes all activities associated with development and seeking Regulatory Approval for the Product. + +1.1.42 "Commercially Reasonable Efforts" means with respect to the performance of activities under this Agreement by a Party (as pertains to its role in conducting the Clinical Trials): reasonable, diligent, good-faith efforts to accomplish such objective which are consistent with industry standards for companies of comparable size as that of such Party. "Commercially Reasonable Efforts" requires, with respect to a particular task or activity in making, using, selling, offering for sale, importing, exporting, developing (including seeking regulatory approvals or applicable pricing or reimbursement approvals) or otherwise commercializing the Product, that a Party: (i) promptly assign responsibility for such task or activity to specific employee(s) who are held accountable for progress and monitor such progress on an on-going basis; (ii) set and consistently seek to achieve specific and meaningful objectives for carrying out such task or activity; and (iii) make and implement decisions and allocate resources designed to advance progress with respect to such objectives in accordance with established timelines; provided, however, that, to the extent that the performance of a Party's obligations hereunder is adversely affected by the other Party's breach in performing its obligations hereunder, the impact on the first Party of such performance failure by the other Party will be taken into account in determining whether the first Party has used its Commercially Reasonable Efforts to perform any such affected obligations. + +1.1.43 "Competing Product" means any agent intended to neutralize, abrogate or reverse the antiplatelet activity of the Ticagrelor Compound. + +1.1.44 "Completion Date" means, as to a particular Clinical Trial, the earlier of (a) the date of final database lock for such Clinical Trial and (b) the date such Clinical Trial or this Agreement is terminated. + +1.1.45 "Confidential Information" of a Party means all information and materials provided and/or disclosed (including in written form, electronic form or otherwise) by, + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +or on behalf of, such Party or its Affiliates, agents or representatives to the other Party, its Affiliates, agents or representatives in connection with this Agreement, including, technical, scientific, regulatory and other information, results, knowledge, techniques, data, analyses, inventions, invention disclosures, plans, processes, methods, know-how, ideas, concepts, test data (including pharmacological, toxicological and clinical test data), analytical and quality control data, formulae, specifications, marketing, pricing, distribution, cost, sales, and manufacturing data and descriptions. In addition, the terms and conditions of this Agreement shall be deemed to be Confidential Information of both SFJ and PB. For further clarity, the terms of the AZ License shall be considered the Confidential Information of PB, and SFJ acknowledges that the terms of the AZ License are also considered "Confidential Information" (as defined in the AZ License) of MedImmune, and that each of PB and MedImmune is deemed to be the "receiving Party" and the "disclosing Party" with respect thereto for purposes of the AZ License. Notwithstanding the foregoing, any AstraZeneca Product Know-How and any AstraZeneca Product Improvement shall be deemed to be the Confidential Information of PB for purposes of this Agreement and of MedImmune for purposes of the AZ License, and SFJ shall be deemed to be the receiving Party and PB shall be deemed to be the disclosing Party with respect thereto for purposes of this Agreement (it being understood that MedImmune is deemed to be the "receiving Party" and MedImmune is deemed to be the "disclosing Party" with respect thereto for purposes of the AZ License). In addition, notwithstanding SFJ's ownership of the Research Results prior to assignment thereof in accordance with Section 11.1.1.4, the Research Results shall at all times be deemed to be Confidential Information of PB, and PB and SFJ shall be deemed the disclosing Party and the receiving Party, respectively, with respect thereto. + +1.1.46 "Contingent Liabilities" means, for any Person, (i) Indebtedness (as defined in Section 7.7.3) of that Person, and (ii) any direct or indirect liability, contingent or not, of that Person for (a) warranty obligations, (b) potential claims for damages, (c) assessments, and (d) any other condition, situation or set of circumstances involving various degrees of uncertainty that may result in a loss or liability. + +1.1.47 "Control" or "Controlled" means (a) for Intellectual Property, a Party's ability to grant applicable licenses, sublicenses and/or other rights thereunder and (b) for materials and documents, a Party's ability to provide, or provide access to, such materials and/or documents, each without violating any contractual obligations to a Third Party. For clarity, if a Party only can grant a license or sublicense and/or provide rights and/or access of limited scope, for a specific purpose or under certain conditions due to an encumbrance, "Control" or "Controlled" will be construed to so limit such license, sublicense, provision of rights and/or access. + +1.1.48 "Copyrights" means, collectively, all works of authorship, mask works and any and all other registered and unregistered copyrights and copyrightable works, and all applications, registrations, extensions, and renewals thereof. + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +1.1.49 "Cover", "Covered" or "Covering" means, with respect to the applicable Intellectual Property, in the absence of the applicable rights and licenses granted, would be infringed, misappropriated, or otherwise violated by. + +1.1.50 "CRO" means contract research organization. + +1.1.51 "CRO Agreement" has the meaning ascribed to such term in Section 2.4.1. + +1.1.52 "CSR" means, for with respect to a Clinical Trial, a clinical study report, or other equivalent document or series of materials, constituting a summary report of the clinical and medical data resulting from such Clinical Trial and prepared for incorporation into submissions seeking Regulatory Approval for the Product, and includes all statistical analyses of such data per the statistical analysis plan. + +1.1.53 "Data Room" means that certain electronic data room established by PB and to which SFJ and/or its advisors were granted access. + +1.1.54 "Designated Asian Countries" means China, Japan, and Hong Kong. + +1.1.55 "Designated European Countries" means [***]. + +1.1.56 "Development" has the meaning ascribed to such term in the AZ License. + +1.1.57 "Development Costs" means all internal and external costs incurred or paid by SFJ or PB associated with completing the Clinical Trials, including but not limited to all Approved Third Party Vendor Costs, Product Supply Costs, the Initial Development Cost Payment, PB Costs, the SFJ Interim Management Fee and, if applicable, the SFJ Final Management Fee. + +1.1.58 "Development Plan" means a written plan for the Development Program, the initial version of which is attached hereto as Exhibit D, and which will be subject to amendment by the JDC from time to time during the Development Term. + +1.1.59 "Development Program" means a CMC, clinical and regulatory development program to be undertaken by the Parties to develop the Product for the Indication, carry out the Clinical Trials, and seek Regulatory Approval for the Product. + +1.1.60 "Development Term" means the period commencing on the Effective Date and ending on the later of (a) the latest of the Completion Dates of the Clinical Trials, and (b) the date on which all efforts in pursuit of Regulatory Approval of the Product for Indication have been concluded or terminated. + +1.1.61 "Disclosing Party" has the meaning ascribed to such term in Section 10.1. + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +1.1.62 "Dispute" has the meaning ascribed to such term in Section 15.10. + +1.1.63 "Effective Date" has the meaning ascribed to such term in the Preamble. + +1.1.64 "EMA" means the European Medicines Agency and any successor agency thereto in the EU having substantially the same function. + +1.1.65 "EU" means the European Union or any successor union of European states thereto having a substantially similar function. + +1.1.66 "European Clinical Trial Countries" means [***]. + +1.1.67 "Excluded Licensing Transaction" means (a) a license or sublicense granted to an academic collaborator, service provider, contract research organization, contract manufacturer or similar Third Party that does not grant to such Third Party any right to Commercialize the Product (other than, in the case of a CMO, the right to commercially manufacture PB2452 or the Product on behalf of PB or its Affiliates, without any other right to Commercialize the Product), or (b) a license or sublicense not involving a grant of rights to the Product (by way of example and not of limitation, a license or sublicense to develop and commercialize any product based on PB's proprietary ELP technology, including PB1046 and PB1023). + +1.1.68 "Exclusive Period" means, subject to the earlier termination of the AZ License, (a) in the case of the conduct of human clinical trials with respect to a Competing Product, the period beginning on the Effective Date and ending on November 21, 2022, and (b) in the case of the sale or offer for sale of a Competing Product, the period beginning on the Effective Date and ending on November 21, 2024. + +1.1.69 "Exercise Price" has the meaning set forth in Section 8.1. + +1.1.70 "Executive Officers" means the executive officers of each of PB and SFJ identified on Exhibit E. + +1.1.71 "Existing Licenses" means: (a) the License, Development and Commercialization Agreement dated March 28, 2019, between PB and ImmunoForge Co., Ltd., including the ancillary agreements between such parties entered into in connection therewith; and (b) the License Agreement dated April 13, 2018, between PB and [***], as amended. + +1.1.72 "Existing PB Intellectual Property" has the meaning ascribed to such term in Section 11.1.1.1. + +1.1.73 "Exploit" has the meaning ascribed to such term in the AZ License. + +1.1.74 "FDA" means the US Food and Drug Administration and any successor agency thereto in the US having substantially the same function. + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +1.1.75 "FFDCA" means the US Food, Drug, and Cosmetic Act, as amended from time to time, together with any rules, regulations and requirements promulgated thereunder (including all additions, supplements, extensions and modifications thereto). + +1.1.76 "Financial Disclosure Form" has the meaning ascribed to such term in Section 3.2.1.4. + +1.1.77 "GAAP" means generally accepted accounting principles in the US, as consistently applied by the applicable Party. + +1.1.78 "Generic Ticagrelor Product" means an oral formulation of the Ticagrelor Compound that is (a) sold, offered for sale or distributed under: (i) in the U.S., an ANDA (as defined in the FFDCA) that refers to the AstraZeneca Product as the reference listed drug, (ii) in the EU, a marketing authorization for a generic medicinal product granted in accordance with Article 10 of Directive 2001/83/EC or (iii) in any other country or jurisdiction, an equivalent of provisions set forth in clause (i) or clause (ii) and (b) approved in the applicable country or jurisdiction for at least one of the indications for which the AstraZeneca Product is approved in such country or jurisdiction. For purposes of this definition, references to AstraZeneca Product exclude Generic Ticagrelor Products. + +1.1.79 "GMP Manufacturer" means the Party that is responsible for ensuring that the Product is manufactured in accordance with GMP. + +1.1.80 "Going Concern Cure Period" has the meaning ascribed to such term in Section 3.18.3. + +1.1.81 "Going Concern Funding" has the meaning ascribed to such term in Section 4.2.4. + +1.1.82 "Going Concern Notice" has the meaning ascribed to such term in Section 3.18.3. + +1.1.83 "Good Clinical Practices" or "GCP" means all applicable good clinical practice standards for the design, conduct, performance, monitoring, auditing, recording, analyses and reporting of clinical trials, including, as applicable, (a) the International Conference on Harmonisation of Technical Requirements for Registration of Pharmaceuticals for Human Use ("ICH") Harmonised Tripartite Guideline for Good Clinical Practice (CPMP/ICH/135/95) and any other guidelines for good clinical practice for clinical trials on medicinal products; (b) the Declaration of Helsinki (2004) as last amended at the 52nd World Medical Association in October 2000 and any further amendments or clarifications thereto; and (c) the equivalent Applicable Laws in any relevant country, each as may be amended and applicable from time to time and in each case, that provide for, among other things, assurance that the clinical data and reported results are credible and accurate and protect the rights, integrity, and confidentiality of clinical trial Subjects. + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +1.1.84 "Good Manufacturing Practices" or "GMP" means all applicable good manufacturing practices including, as applicable, (a) the applicable part of quality assurance to ensure that products are consistently produced and controlled in accordance with the quality standards appropriate for their intended use, as defined in European Commission Directive 2003/94/EC laying down the principals and guidelines of good manufacturing practice; (b) the principles detailed in the US Current Good Manufacturing Practices, 21 CFR Sections 210, 211, 601 and 610; (c) the Rules Governing Medicinal Product in the European Community, Volume IV Good Manufacturing Practice for Medicinal Product; (d) the principles detailed in the ICH Q7A guidelines; and (e) the equivalent Applicable Laws in any relevant country, each as may be amended and applicable from time to time. + +1.1.85 "Government Official" is broadly defined as and includes: (a) any elected or appointed government official (e.g., a member of a ministry of health); (b) any employee or person acting for or on behalf of a government official, agency, or enterprise performing a governmental function; (c) any non-US political party officer, employee, or person acting for or on behalf of a non-US political party or candidate for public office; (d) any employee or person acting for or on behalf of a public international organization; (e) all government employees and employees of state-owned enterprises; or (f) any person otherwise categorized as a government official under local law; where "government" is meant to include all levels and subdivisions of non-US governments (i.e., local, regional, or national and administrative, legislative, or executive). + +1.1.86 "Governmental Authority" means any supranational, federal, national, state or local court, agency, authority, department, regulatory body or other governmental instrumentality. + +1.1.87 "ICH" has the meaning ascribed to such term in Section 1.1.78. + +1.1.88 "IDMC" means the independent data monitoring committee, which will be established pursuant to Section 3.9.1. + +1.1.89 "IDMC Charter" has the meaning ascribed to such term in Section 3.9.1. + +1.1.90 "IND" means an investigational new drug application, clinical trial application, clinical trial exemption, or similar application or submission filed with or submitted to a Regulatory Authority in a jurisdiction that is necessary to initiate human clinical testing of a pharmaceutical product in such jurisdiction, including any such application filed with the FDA pursuant to 21 C.F.R. Part 312. + +1.1.91 "Indemnification Claim Notice" has the meaning ascribed to such term in Section 12.2.1. + +1.1.92 "Indemnified Party" has the meaning ascribed to such term in Section 12.2.1. + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +1.1.93 "Indemnifying Party" has the meaning ascribed to such term in Section 12.2.1. + +1.1.94 "Indication" means the reversal of the effects of the Ticagrelor Compound in Ticagrelor Compound-treated in at least one of (i) patients with major bleeding or (ii) patients requiring urgent surgery / invasive procedure. + +1.1.95 "Information" means technical or scientific know-how, trade secrets, methods, processes, formulae, designs, specifications and data, including biological, chemical, pharmacological, toxicological, pre-clinical, clinical, safety, manufacturing and quality control data and assays; in each case, whether or not confidential, proprietary, patented or patentable. + +1.1.96 "Informed Consent" has the meaning ascribed to such term in Section 3.3.2.1. + +1.1.97 "Initial Development Cost Payment" has the meaning ascribed to such term in Section 4.2.2(i). + +1.1.98 "Initial EU Payment" has the meaning ascribed to such term in Section 6.1. + +1.1.99 "Initial Funding Date" has the meaning ascribed to such term in Section 4.2.2(i). + +1.1.100 "Initial US Payment" has the meaning ascribed to such term in Section 6.1. + +1.1.101 "Intellectual Property" means all intellectual property and industrial property rights of any kind or nature throughout the world, including all US and foreign, (a) Patents; (b) Trademarks; (c) Copyrights; (d) rights in computer programs (whether in source code, object code, or other form), algorithms, databases, compilations and data, technology supporting the foregoing, and all documentation, including user manuals and training materials, related to any of the foregoing; (e) trade secrets and all other confidential information, know-how, inventions, proprietary processes, formulae, models, and methodologies; (f) rights of publicity, privacy, and rights to personal information; (g) all rights in the foregoing and in other similar intangible assets; and (h) all applications and registrations for the foregoing. + +1.1.102 "Interim Period" has the meaning ascribed to such term in Section 4.2.2. + +1.1.103 "Investigator's Brochure" means the written document containing a brief description of the drug substance and formulation of the Product, a summary of the pharmacological and toxicological effects of the Product in animals and human nonclinical models, a summary of the pharmacokinetics and biological disposition of the Product in animals and humans, a summary of information relating to safety and effectiveness of the Product in humans obtained from prior clinical studies, and a description of possible risks and side effects to + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +be anticipated on the basis of prior experience with the Product under investigation or with related drugs. + +1.1.104 "IRB" means institutional review board, or its equivalent. + +1.1.105 "IRC" means the Internal Revenue Code of 1986, as amended, and the Treasury Regulations adopted thereunder. + +1.1.106 "JCC" has the meaning ascribed to such term in Section 5.5.1. + +1.1.107 "JDC" has the meaning ascribed to such term in Section 5.4.1. + +1.1.108 "JDC Chairperson" has the meaning ascribed to such term in Section 5.4.2. + +1.1.109 "JDC Representative(s)" has the meaning ascribed to such term in Section 5.4.1. + +1.1.110 "JSC" has the meaning ascribed to such term in Section 5.1.1 + +1.1.111 "JSC Chairperson" has the meaning ascribed to such term in Section 5.1.2. + +1.1.112 "JSC Representative(s)" has the meaning ascribed to such term in Section 5.1.1. + +1.1.113 "Licensed Compound" has the meaning ascribed to such term in the AZ License. + +1.1.114 "Licensed Know-How" has the meaning ascribed to such term in the AZ License. + +1.1.115 "Licensed Patents" has the meaning ascribed to such term in the AZ License. + +1.1.116 "Licensed Product" has the meaning ascribed to such term in the AZ License. + +1.1.117 "Licensing Transaction" means: (a) a license or sublicense to a Third Party under any of the PB Intellectual Property to Commercialize the Product in the US, Designated European Countries, or Designated Asian Countries (other than, in the case of a Third Party CMO, a license or sublicense to commercially manufacture PB2452 or the Product on behalf of PB or its Affiliates, without any license or sublicense to engage in any other Commercialization activities with respect to the Product); or (b) a sale or transfer to a Third Party of any of the PB Intellectual Property, in each case, other than in conjunction with a permitted assignment of this Agreement pursuant to Section 15.6 in connection with the sale or other transfer of all or substantially all of its business or assets to which this Agreement relates. + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +For clarity, an assignment of the AZ License to a Third Party in conjunction with a permitted assignment by PB of this Agreement pursuant to Section 15.6 in connection with the sale or other transfer of all or substantially all of its business or assets to which this Agreement relates shall not be deemed a Licensing Transaction. + +1.1.118 "Licensing Transaction Agreement" means a definitive agreement for a Licensing Transaction between PB and a Third Party. + +1.1.119 "Losses" means liabilities, losses, costs, damages, fees and/or expenses (including reasonable legal expenses and attorneys' fees) payable to a Third Party. + +1.1.120 "Manufacturer" means the company set forth on Exhibit J. + +1.1.121 "Material Adverse Event" means (i) an event occurring after the Effective Date that has a material adverse effect on (a) the business, operations, prospects or financial condition of PB, (b) prospect of payment of the Approval Payments by PB, or (c) the development of the Product for the Indication or prospects for Regulatory Approval of the Product for the Indication (it being understood that if the interim results of the Phase 3 Trial do not demonstrate Successful Phase 3 Interim Analysis, it shall be deemed to be a Material Adverse Event), or (ii) if PB has not obtained the SVB Consent within [***] of the Effective Date, or (iii) if PB is in default of its obligations under the AZ License (excluding any such default that would not entitle AZ to terminate the AZ License); provided however, that none of the following shall constitute, or shall be considered in determining whether there has occurred, a Material Adverse Event: (A) changes in laws or regulations or in the interpretations or methods of enforcement thereof; (B) changes in the pharmaceutical or biotechnology industries in general; or (C) any earthquakes, hurricanes, tsunamis, tornadoes, floods, mudslides, wildfires or other natural disasters, weather conditions, sabotage, terrorism, military action or war (whether or not declared) or other force majeure events in the US or any other country or region in the world. + +1.1.122 "Material Anti-Corruption Law Violation" means a violation by a Party or its Affiliate of an Anti- Corruption Law relating to the subject matter of this Agreement that would, if it were publicly known, have a material adverse effect on the other Party or its Affiliate because of its relationship with such Party. + +1.1.123 "Maximum Development Costs" has the meaning ascribed to such term in Section 4.1. + +1.1.124 "MedImmune" means MedImmune Limited, a limited liability company formed under the laws of the United Kingdom. + +1.1.125 "MedImmune Confidential Information" means (a) the terms of the AZ License; and (b) any AstraZeneca Product Know-How and any AstraZeneca Product Improvement. + +1.1.126 "MedImmune Pharmacovigilance Agreement" has the meaning ascribed to the term "Pharmacovigilance Agreement" in the AZ License. + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +1.1.127 "NMPA" means China's National Medical Products Administration or any successor agency thereto in China having substantially the same function. + +1.1.128 "Participation Rights" means with respect to a Party, such Party's Chief Executive Officer and Chief Medical Officer (or their respective designees) shall be entitled to participate on a silent basis in all meetings with Regulatory Authorities during the Development Term and to the extent practicable such Party shall be entitled to review pre-meeting briefing materials. The other Party shall provide such Party with copies of the minutes of all of the aforementioned meetings within [***] after receipt of the final minutes from the applicable Regulatory Authority. + +1.1.129 "Party" or "Parties" has the meaning ascribed to such term in the Preamble. + +1.1.130 "Patent" will mean patents, patent applications, patent disclosures, and all related continuations, continuations-in-part, divisionals, reissues, re-examinations, substitutions, and extensions thereof. + +1.1.131 "PB" has the meaning ascribed to such term in the Preamble. + +1.1.132 "PB2452" means the anti-ticagrelor antibody fragment product known as PB2452 (and referred to in the AZ License as "MEDI2452"), as further defined by the protein sequence set forth in Schedule 1.96 to the AZ License. + +1.1.133 "PB Confidential Information" means all Confidential Information provided and/or disclosed by or on behalf of PB or its Affiliates, agents or representatives to SFJ or its Affiliates, agents or representatives hereunder. For clarity, PB Confidential Information will include any and all CMC Information. + +1.1.134 "PB Costs" has the meaning ascribed to such term in Section 4.2.2(ii)(3). + +1.1.135 "PB Financial Statements" has the meaning ascribed to such term in Section 3.18.2. + +1.1.136 "PB Indemnified Parties" has the meaning ascribed to such term in Section 12.1.1. + +1.1.137 "PB Intellectual Property" means all Intellectual Property owned or Controlled by PB that is necessary or useful for the manufacture, use, sale or import of the Product, including Trial Inventions. + +1.1.138 "PB Services" means performing or managing all CMC related activities (including supply of Product for use in the Clinical Trials) and oversight of the Phase 3 Trial in the US and the European Clinical Trial Countries. + +1.1.139 "PB SOPs" has the meaning ascribed to such term in Section 3.1.6. + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +1.1.140 "PB Territory" means the US and the European Clinical Trial Countries. + +1.1.141 "Permitted Third Party" means any CRO, Site, Clinical Investigator and/or Vendor to whom PB or SFJ has delegated responsibility or whom PB or SFJ has engaged in connection with the Clinical Trials or any CMO whom PB has engaged to perform CMC related activities (including supply of Product for use in the Clinical Trials). For clarity, Third Parties that have been delegated responsibility by or engaged by a Permitted Third Party will be considered Permitted Third Parties. + +1.1.142 "Person" means any individual, corporation, general or limited partnership, limited liability company, joint venture, estate, trust, association, organization, labor union, or other entity or Governmental Authority. + +1.1.143 "Personally Identifiable Information" means any information relating to an identified or, in combination with other information, identifiable person or persons captured in an electronic or hardcopy format, including such information as it relates to clinical trials subjects (including key-coded patient data), physicians, clinicians, healthcare professionals, consultants, or other persons participating in the Clinical Trials, and any equivalent definition in the Applicable Laws to the extent that such definition is broader than that provided here. + +1.1.144 "Phase 3 Interim Data" means the data collected from the Phase 3 Trial as of database lock for the interim analysis of the Phase 3 Trial expressly contemplated by the Phase 3 Trial Protocol. + +1.1.145 "Phase 3 Success Criteria" shall mean that the results of the Phase 3 Trial meet at least one of the two primary endpoints set forth in the Phase 3 Trial Protocol. + +1.1.146 "Phase 3 Trial" means the clinical trial of the Product described in PhaseBio Protocol Number PB‑CL‑004, entitled "A Phase 3, multicenter, open-label, single arm study of PB2452 in Ticagrelor-treated patients with major bleeding or requiring urgent surgery / invasive procedure," as such protocol may be amended from time to time in accordance with this Agreement. + +1.1.147 "Phase 3 Trial Protocol" has the meaning ascribed to such term in Section 2.1.1. + +1.1.148 "PHSA" means the Public Health Service Act as set forth at 42 U.S.C. Chapter 6A, as may be amended from time to time, together with any rules, regulations and requirements promulgated thereunder (including all additions, supplements, extensions and modifications thereto). + +1.1.149 "PK Studies" means the pharmacokinetic study of the Product in Japanese Subjects contemplated by the Development Plan, any pharmacokinetic study of the Product in Chinese Subjects contemplated by the Development Plan, and any other pharmacokinetic study of the Product in Japanese Subjects or Chinese Subjects that may be + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +required by the PMDA or NMPA, as applicable. PK Studies shall not include any clinical trial of the Product with any efficacy endpoint. + +1.1.150 "PMDA" means the Pharmaceuticals and Medical Devices Agency of Japan or any successor agency thereto in Japan having substantially the same function. + +1.1.151 "Pre-Approval Commercialization Activities" has the meaning ascribed to such term in Section 4.3. + +1.1.152 "Product" means the product containing PB2452 described on Exhibit A. + +1.1.153 "Product Filings" has the meaning ascribed to such term in Section 3.1.2. + +1.1.154 "Product Supply Costs" has the meaning ascribed to such term in Section 3.14.1.2. + +1.1.155 "Program Transfer" has the meaning ascribed to such term in the form of Program Transfer Agreement attached hereto as Exhibit O. + +1.1.156 "Program Transfer Agreement" has the meaning ascribed to such term in Section 3.20. + +1.1.157 "Protocol" means the Phase 3 Trial Protocol or an SFJ Territory Clinical Trial Protocol. + +1.1.158 "Receiving Party" has the meaning ascribed to such term in Section 10.1. + +1.1.159 "Regulatory Approval" means conditional or unconditional approval of a BLA for the Product for the Indication: (a) by the FDA in the US; (b) by EMA in the EU or by the applicable national Regulatory Authority in any individual Designated European Country; (c) by the PMDA in Japan; or (d) by the NMPA in China. For clarity, "Regulatory Approval" excludes any pricing or reimbursement approval that may be necessary or useful for marketing or sale of the Product in any country or regulatory jurisdiction. For further clarity, the Parties acknowledge that, as of the Effective Date, PB intends to file a BLA with EMA using the centralized EU filing procedure to seek Regulatory Approval in the EU, and PB neither intends, nor has any obligation under this Agreement, to submit any BLA to, or seek Regulatory Approval from, the applicable national Regulatory Authority in any individual Designated European Country. + +1.1.160 "Regulatory Authority" means in a particular country or regulatory jurisdiction in the Territory, any applicable Governmental Authority involved in granting approval to initiate or conduct clinical testing in humans, for Regulatory Approval, including FDA, EMA, PMDA, and NMPA. + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +1.1.161 "Regulatory Documentation" has the meaning ascribed to such term in the AZ License. + +1.1.162 "Research Results" means all Information arising out of, or resulting from, the Clinical Trials and/or the CMC activities contemplated by the Development Program, including the Clinical Trials Database; but excluding AstraZeneca Product Improvements, AstraZeneca Product Know-How, AstraZeneca Product Patents, and Trial Inventions (including Intellectual Property in or to Trial Inventions). + +1.1.163 "Serious Safety Issue" means any SUSAR or series of SUSARs directly related to or caused by the administration of the Product in the conduct of the Clinical Trials where such SUSAR or series of SUSARs substantially diminishes the probability of receiving Regulatory Approval for the Product, or results in a Regulatory Authority imposing a clinical hold on further development of the Product which clinical hold is not lifted or removed within [***]. + +1.1.164 "SFJ" has the meaning ascribed to such term in the Preamble. + +1.1.165 "SFJ Confidential Information" means all Confidential Information provided and/or disclosed by, or on behalf of, SFJ or its Affiliates, agents or representatives to PB or its Affiliates, agents or representatives hereunder. + +1.1.166 "SFJ Final Management Fee" has the meaning ascribed to such term in Section 4.2.3(i). + +1.1.167 "SFJ Indemnified Parties" has the meaning ascribed to such term in Section 12.1.2. + +1.1.168 "SFJ Interim Management Fee" has the meaning ascribed to such term in Section 4.2.2(ii)(2). + +1.1.169 "SFJ Services" means providing global oversight of the CRO and other Third Party Vendors and execution of the Clinical Trials in European Clinical Trial Countries, Japan, and China. + +1.1.170 "SFJ SOPs" has the meaning ascribed to such term in Section 3.1.5. + +1.1.171 "SFJ Territory" means the Designated Asian Countries. + +1.1.172 "SFJ Territory Clinical Trial Protocol" has the meaning ascribed to such term in Section 2.1.1. + +1.1.173 "Site" has the meaning ascribed to such term in Section 3.2.1.3. + +1.1.174 "SOPs" means the PB SOPs or SFJ SOPs. + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +1.1.175 "Statistical Analysis Plan" has the meaning ascribed to such term in Section 3.5.6. + +1.1.176 "Subject" has the meaning ascribed to such term in Section 3.3.2.1. + +1.1.177 "Subject Recruitment Plan" has the meaning ascribed to such term in Section 3.3.1. + +1.1.178 "Successful Phase 3 Interim Analysis" means that the interim results of the Phase 3 Trial meet the interim primary endpoint set forth in the Phase 3 Trial Protocol. + +1.1.179 "SUSAR" means a suspected unexpected serious adverse reaction, without regard to causality, that is life- threatening (i.e., causes an immediate risk of death) or that results in any of the following outcomes: death; in-patient hospitalization or prolongation of existing hospitalization; persistent or significant disability or incapacity (i.e., substantial disruption of the ability to conduct normal life functions); or a congenital anomaly or birth defect. For clarity, a planned medical or surgical procedure is not, in itself, a SUSAR. + +1.1.180 "SVB" means, subject to Section 7.4, Silicon Valley Bank, a California corporation. + +1.1.181 "SVB Consent" has the meaning ascribed to such term in Section 7.6.1.2. + +1.1.182 "SVB Collateral" means, subject to Section 7.4, "Collateral" as defined in the SVB Loan Agreement. + +1.1.183 "SVB Loan" means, subject to Section 7.4, the $15,000,000 term loan evidenced by the SVB Loan Agreement. + +1.1.184 "SVB Loan Agreement" means, subject to Section 7.4, that certain Loan and Security Agreement dated as of March 25, 2019 among SVB, WestRiver Innovation Lending Fund VIII, L.P., and PB, as amended, restated, or otherwise modified from time to time. + +1.1.185 "Term" has the meaning ascribed to such term in Section 14.1. + +1.1.186 "Territory" of a Party means: (a) in the case of PB, the PB Territory; or (b) in the case of SFJ, the SFJ Territory. + +1.1.187 "Third Party" means any Person other than PB, SFJ and their Affiliates. + +1.1.188 "Third Party Infringement" means any actual or threatened infringement, misappropriation, or other violation by a Third Party of any Intellectual Property Controlled by PB that relates to this Agreement and/or the Product, including the Trial Inventions. + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +1.1.189 "Ticagrelor Compound" means (1S,2S,3R,5S)-3-[7-{[(1R,2S)-2-(3,4- difluorophenyl)cyclopropyl]amino}-5-(propylthio)-3H-[1,2,3]-triazolo[4,5-d]pyrimidin-3-yl]-5-(2-hydroxyethoxy)cyclopentane- 1,2-diol. + +1.1.190 "Timeline" has the meaning ascribed to such term in Section 2.3.1. + +1.1.191 "Timeline Remediation Plan" has the meaning ascribed to such term in Section 2.3.2. + +1.1.192 "Trademarks" means, collectively, all registered and unregistered marks, trade dress rights, logos, taglines, slogans, Internet domain names, web addresses, and other indicia of origin, together with the goodwill associated with any of the foregoing, and all applications, registrations, extensions and renewals thereof, selected for use on the Product. + +1.1.193 "Trial Data Package" means all Information, in any form, generated or developed by or on behalf of a Party or any of its Affiliates (including by any of their respective Permitted Third Parties) in the conduct of the Clinical Trials during the Development Term, including the Clinical Trial Database and other data and reports arising out of the Clinical Trials, any Clinical Trial Agreements or any Vendor Agreements or CRO Agreements related to the conduct of the Clinical Trials, including the Research Results; but, in each case, excluding Trial Inventions. + +1.1.194 "Trial Invention" means: (a) any invention or discovery, whether or not patentable, made, developed, generated, conceived, or reduced to practice by or on behalf of a Party or any of its Affiliates or Permitted Third Parties, or jointly by or on behalf of the Parties or any of their respective Affiliates or Permitted Third Parties, in the course or as a result of the conduct of any Clinical Trial or any other activity conducted pursuant to this Agreement, including, without limitation, any improvement to any Existing PB Intellectual Property; and (b) all Intellectual Property in any of the items described in the preceding clause (a); but excluding, in each case, AstraZeneca Product Improvements, AstraZeneca Product Know-How and AstraZeneca Product Patents. + +1.1.195 "UCC" means the Uniform Commercial Code, as the same may, from time to time, be enacted and in effect in the State of Delaware; provided, that, to the extent that the UCC is used to define any term herein and such term is defined differently in different Articles or Divisions of the UCC, the definition of such term contained in Article or Division 9 shall govern; and provided further, that in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection or priority of, or remedies with respect to, the SFJ Security Interest on any SFJ Collateral is governed by the Uniform Commercial Code in effect in a jurisdiction other than the State of Delaware, the term "UCC" shall mean the Uniform Commercial Code as enacted and in effect in such other jurisdiction solely for purposes of the provisions thereof relating to such attachment, perfection, priority or remedies and for purposes of definitions relating to such provisions. + +1.1.196 "US", "U.S." or "USA" means the United States of America, its territories and possessions, including Puerto Rico. + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +1.1.197 "US Approval Payments" has the meaning ascribed to such term in Section 6.1. + +1.1.198 "US Commercialization Rights" shall mean any license or grant of other rights exclusive or non-exclusive to Commercialize the Product for the Indication in the US (other than a license or grant of other rights to a CMO to commercially manufacture PB2452 or the Product on behalf of PB or its Affiliates, without any license or grant of other rights to engage in any other Commercialization activities with respect to the Product). + +1.1.199 "VAD" means the value added data set, including the data in the format as described in the Statistical Analysis Plan. + +1.1.200 "Vendor(s)" has the meaning ascribed to such term in Section 2.4.2. + +1.1.201 "Vendor Agreement" has the meaning ascribed to such term in Section 2.4.2. + +1.2 Construction. For purposes of this Agreement: (1) words in the singular will be held to include the plural and vice versa as the context requires; (2) the words "including" and "include" will mean "including, without limitation," unless otherwise specified; (3) the terms "hereof," "herein," "herewith," and "hereunder," and words of similar import will, unless otherwise stated, be construed to refer to this Agreement as a whole and not to any particular provision of this Agreement; and (4) all references to "Section" and "Exhibit," unless otherwise specified, are intended to refer to a Section or Exhibit of or to this Agreement. + +1.3 Conflicts. In the event of any conflict between the terms of this Agreement, the Protocol and/or any other Exhibit, the Protocol will control (as applicable), followed by the terms of this Agreement, and followed by any applicable other Exhibit. + +ARTICLE 2 + +THE CLINICAL TRIALS + +2.1 The Protocols. + +2.1.1 The Protocols. The protocol for the Phase 3 Trial (the "Phase 3 Trial Protocol") as it exists on the Effective Date has separately been mutually agreed upon by the Parties in writing. The protocol for each Clinical Trial (other than the Phase 3 Trial) of the Product to be conducted in the SFJ Territory (each, an "SFJ Territory Clinical Trial Protocol") will be prepared by SFJ in consultation with PhaseBio and approved by the JDC within [***]. + +2.1.2 Changes to the Protocols. + +2.1.2.1 Any changes to the Phase 3 Trial Protocol, including any country-specific appendices required by Applicable Law and changes made in response to any communications with any Regulatory Authorities, that require a submission to a Regulatory Authority, an IRB or other ethics committee, will be prepared by PB, with support from SFJ, and + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +will require the JDC's approval, which will not be unreasonably withheld or delayed and which will be communicated to the Parties as soon as reasonably practicable following the JDC's receipt of the draft amendment from PB. Any changes to an SFJ Territory Clinical Trial Protocol, including changes made in response to any communications with a Regulatory Authority, an IRB or other ethics committee in the SFJ Territory, will be prepared by SFJ, with support from PB, and will require the JDC's approval, which will not be unreasonably withheld or delayed and which will be communicated to the Parties as soon as reasonably practicable following the JDC's receipt of the draft amendment from SFJ. + +2.1.2.2 If either Party believes that a Protocol requires amendment to comply with any Applicable Laws or based on any communications from any Regulatory Authorities, such Party will inform the JDC. If the JDC agrees that such an amendment is required by any Applicable Laws the JDC will provide the applicable Party (PB in the case of the Phase 3 Trial or SFJ in the case of any other Clinical Trial) with written notice thereof as soon as reasonably practicable, and such Party, with support from the other Party, will prepare a draft amendment to such Protocol, which will only be effective and part of such Protocol upon approval by the JDC pursuant to Section 5.2.2, which approval will not be unreasonably withheld and which will be communicated to the Parties as soon as reasonably practicable following the JDC's receipt of the draft amendment from such Party. + +2.1.3 Protocol Approval. SFJ will be responsible for obtaining all necessary approvals of each Protocol (including as required by Applicable Laws) within the SFJ Territory, and PB will be responsible for obtaining all necessary approvals of the Phase 3 Trial Protocol (including as required by Applicable Laws) within the PB Territory, in each case prior to commencing the applicable Clinical Trial in such Party's Territory. Each Party will reasonably co-operate with the other in such regard. + +2.2 Sponsor. + +2.2.1 Sponsorship and Responsibilities. PB will be the sponsor of the Clinical Trials in the PB Territory. SFJ will be the sponsor of the Clinical Trials in the SFJ Territory. SFJ in the SFJ Territory, and PB in the PB Territory, will have all responsibilities of a sponsor as specified in Applicable Laws, except, in the case of the Phase 3 Trial in the European Clinical Trial Countries, that SFJ shall perform certain activities that are PB's responsibilities as sponsor as set forth in Exhibit G. + +2.2.2 Compliance with the Protocol and Applicable Laws. Each Party will conduct the Phase 3 Trial within its Territory, and SFJ will conduct each other Clinical Trial in the SFJ Territory, and perform all other responsibilities assigned to it hereunder in connection with any such Clinical Trial in compliance with the applicable Protocol, all Applicable Laws and the terms hereof. + +2.2.3 Diligence. Each Party will conduct due diligence with respect to each Permitted Third Party used by such Party to ensure that such Permitted Third Party can comply with all applicable terms and obligations of this Agreement and Applicable Laws. + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +2.3 Compliance with the Timeline. + +2.3.1 The Timeline. The timeline for conducting the Clinical Trials is attached as Exhibit I hereto (the "Timeline"). In conducting the Clinical Trials, the Parties will use Commercially Reasonable Efforts to complete each activity specified on the Timeline (each, a "Clinical Trial Activity") by the date specified for such Clinical Trial Activity on the Timeline. The Parties will notify the JDC in writing upon completion or achievement of each of their designated Clinical Trial Activities. + +2.3.2 Failure to Complete a Clinical Trial Activity. If a Party fails to, or knows that it will not, complete a Clinical Trial Activity in accordance with the timeline specified for such Clinical Trial Activity on the Timeline, that Party will promptly notify the JDC. Within [***] of such written notice, if the Party has failed to, or knows that it will not, complete (a) any Clinical Trial Activity within [***] of the date for the Clinical Trial Activity on the Timeline or (b) the final Clinical Trial Activity within [***] of the date for the final Clinical Trial Activity on the Timeline, the Party will provide the JDC with a written remediation plan detailing the means by which, and the date on which, that Party expects to be able to complete the relevant Clinical Trial Activities (each, a "Timeline Remediation Plan"). Following receipt thereof, the JDC Representatives will discuss and consider in good faith such Timeline Remediation Plan. If the JDC approves such Timeline Remediation Plan (such approval not to be unreasonably withheld or delayed), the JDC will provide the appropriate Party with written notice thereof, specifying the dates on which the Party will be required to update the JDC of its progress with respect thereto. If the JDC is unable to approve such Timeline Remediation Plan, the matter will be decided by the JSC in accordance with Section 5.2. After approval of a Party's Timeline Remediation Plan, if such Party believes in good faith that any modification to such Timeline Remediation Plan is necessary or appropriate, such Party may propose such modification to the JDC and shall disclose to the JDC any additional information or circumstances that have become known to such Party that form the basis for its request for modification. The JDC will discuss and consider such in good faith such modification, which shall be subject to JDC approval (such approval not to be unreasonably withheld or delayed) as described above. + +2.3.3 Failure to Complete a Timeline Remediation Plan. If PB fails to complete a Clinical Trial Activity it is responsible for as outlined in an approved Timeline Remediation Plan, then SFJ has the right to withhold any quarterly fixed payments due to PB pursuant to Section 4.2 until the Clinical Trial Activity is completed, in which event SFJ will not be considered in breach of this Agreement for withholding any such amounts any amounts due to PB pursuant to this Section 2.3.3. If either Party fails to complete a Clinical Trial Activity it is responsible for as outlined in an approved Timeline Remediation Plan, then the other Party, at its sole discretion, may assume responsibility for completing such Clinical Trial Activity, in which event: + +2.3.3.1 in the case of SFJ's assumption of responsibility for completing a Clinical Trial Activity that was to have been performed by PB, (a) the costs incurred by SFJ in completing such Clinical Trial Activity shall be included as Development Costs hereunder and + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +(b) in no event shall any failure or delay by SFJ in performing any of its obligations hereunder that are dependent upon the completion of such Clinical Trial Activity constitute a breach of this Agreement or entitle PB to terminate this Agreement or exercise any remedy available to it under this Agreement; and + +2.3.3.2 in the case of PB's assumption of responsibility for completing a Clinical Trial Activity that was to have been performed by SFJ, (a) an amount equal to the costs incurred by PB in completing such Clinical Activity shall be deducted (i) first from the SFJ Interim Management Fee until the SFJ Interim Management Fee is reduced to zero, and (ii) thereafter from the SFJ Final Management Fee, and (b) in no event will any such costs incurred by PB be included in actual Development Costs for purposes of Section 14.2, and (c) in no event shall any failure or delay by PB in performing any of its obligations hereunder that are dependent upon the completion of such Clinical Trial Activity constitute a breach of this Agreement or a Material Adverse Event, or entitle SFJ (i) to withhold any quarterly fixed payments due to PB or other amounts SFJ is obligated to pay or incur pursuant to Section 4.2, (ii) to terminate this Agreement or (iii) to exercise any other remedy available to it under this Agreement, including the remedy set forth in Section 3.20. + +2.4 Approved CROs and Approved Vendors. + +2.4.1 Approved CROs. Except as otherwise provided herein, a Party may delegate any of its responsibilities described in Section 2.2 to its Affiliates (subject to Section 15.1) and/or any CRO that is either listed on Exhibit B or is approved in advance by the JDC (in either case, an "Approved CRO"). Each Party will be required to enter into a written agreement with each Approved CRO utilized by such Party (each, a "CRO Agreement") on commercially reasonable and customary terms, consistent with industry standards for similar agreements and sufficient to enable such Party to comply with its obligations hereunder with respect to the delegated responsibilities, including, but not limited to, Section 2.2.2, and the terms pertaining to ownership of Intellectual Property and publications, and treatment of Confidential Information. + +2.4.2 Approved Vendors. Each Party will be permitted to contract for services, equipment, tools, materials and/or supplies required for the Clinical Trials or Regulatory Approval with any Person that is either listed on Exhibit C or is approved in advance by the JDC (each, an "Approved Vendor"). Such Party will be required to enter into a written agreement with each such Person (each, a "Vendor Agreement") on commercially reasonable and customary terms, consistent with industry standards for similar agreements and sufficient to enable such Party to comply with its obligations hereunder with respect to the contracted activities, including, but not limited to, the terms pertaining to publications and ownership of Intellectual Property, and treatment of Confidential Information. + +2.4.3 Responsibility. For clarity, each Party will remain responsible for all of its obligations under this Agreement, notwithstanding any delegation to an Affiliate or an Approved CRO or any contracting to an Approved Vendor. Each Party shall use Commercially Reasonable Efforts to oversee the services of its Affiliates and any Approved CRO or Approved Vendor utilized by such Party to provide services hereunder. + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +2.5 Background Materials and Reasonable Assistance. + +2.5.1 Background Materials. + +2.5.1.1 Promptly following the Effective Date, PB will provide SFJ with all copies of documents and information Controlled by PB that SFJ, acting in good faith, identifies as reasonably necessary for SFJ to perform its Development Program responsibilities hereunder (the "Background Materials"), except to the extent the provision of any such documents is otherwise provided for in this Agreement. For clarity, PB will remain the sole owner of, and will retain all right, title and interest in, to and under all Background Materials, including all Intellectual Property thereto, and the Background Materials will be PB Confidential Information. + +2.5.1.2 If, during the Development Term, any additional documents and/or information that PB Controls are reasonably necessary for the performance of SFJ's Development Program responsibilities, SFJ may request such documents and/or information (with reasonable specificity) from PB, and PB will provide such documents and/or information as reasonably necessary to SFJ (and such documents will be deemed Background Materials). + +2.5.2 Questions Pertaining to the Phase 3 Trial Protocol. Promptly following the Effective Date during the Development Term, PB will identify one (1) individual with knowledge of the Phase 3 Trial Protocol and the Product who will be made available at reasonable times during normal business hours in such employee's country of residence upon reasonable advance notice to answer SFJ's questions directly pertaining to such Protocol. + +ARTICLE 3 + +CLINICAL TRIALS ACTIVITIES, REGULATORY APPROVAL AND RESPONSIBILITIES + +3.1 Parties' Roles and Responsibilities. + +3.1.1 PB Responsibilities. PB will have primary responsibility for conducting the Phase 3 Trial in the US and the European Clinical Trial Countries, provided that SFJ will provide operational support for and assist with the conduct of the Phase 3 Trial in the European Clinical Trial Countries as specified on Exhibit G and will enter into Clinical Trial Agreements with Sites in the European Clinical Trial Countries and CRO Agreements for the Phase 3 Trial in the European Clinical Trial Countries. Except as expressly set forth in Section 3.1.2 with respect to the PK Studies, PB will have sole responsibility for interactions with Regulatory Authorities in the US and the European Clinical Trial Countries during the Development Term with SFJ to have Participation Rights. Thereafter, if the Phase 3 Trial meets the Phase 3 Trial Success Criteria, PB will use Commercially Reasonable Efforts to perform all activities associated with submitting BLAs and seeking Regulatory Approval for the Indications in the US and the Designated European Countries. + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +3.1.2 SFJ Responsibilities. SFJ will have primary responsibility for conducting the Phase 3 Trial in the Designated Asian Countries and sole responsibility for conducting the other Clinical Trials in the Designated Asian Countries (provided that SFJ may elect not to conduct Clinical Trials in Hong Kong). If SFJ elects to conduct any PK Study in Japanese Subjects in the US or Chinese Subjects in the US, PB shall, with SFJ's assistance and cooperation, file an appropriate amendment to the US IND for the Product with the protocol for such PK Study, and SFJ may conduct such PK Study in the applicable Subjects in the US in accordance with such protocol. In connection with any Japanese or Chinese PK Study during the Development Term, (i) SFJ will have sole responsibility for interactions with Regulatory Authorities in Japan and China, with PB to have Participation Rights, and (ii) PB, as the sponsor of the US IND for the Product, will have primary formal responsibility for interactions with the FDA regarding any PK Study conducted in Japanese Subjects or Chinese Subjects (as applicable) in the US, with SFJ to have Participation Rights, but, as between PB and SFJ (but not vis-à-vis the FDA), SFJ shall, in consultation with PB, determine the strategy for such interactions, and, except to the extent contrary to Applicable Law or in violation of PB's duties as the sponsor of such US IND, PB's interactions with the FDA shall at all times be consistent with SFJ's strategy. Thereafter, if the Phase 3 Trial meets the Phase 3 Trial Success Criteria and the necessary endpoints are met in the other Clinical Trials in the SFJ Territory, SFJ will use Commercially Reasonable Efforts to perform all activities associated with submitting BLAs and seeking Regulatory Approval for the Indication in Japan and China, and PB will use Commercially Reasonable Efforts to perform all activities associated with seeking Approval for the Indication in the Designated European Countries. Upon approval of a BLA for the Product for the Indication by NMPA in China or PMDA in Japan, SFJ, on behalf of itself and its Affiliates, shall, and hereby does, assign to PB all of SFJ's and its Affiliates' right, title and interest in and to all INDs, BLAs and Regulatory Approvals (including all amendments and supplements to any of the foregoing) and other filings with, and formal submissions to, NMPA or PMDA, respectively, and other applicable Regulatory Authorities in such country, in each case, with respect to the Product in such country (collectively, "Product Filings"). Within [***] after assignment of such Product Filings in the applicable country, SFJ shall deliver to PB: (a) true, correct and complete copies of all Product Filings in such country (in each case, whether held in the name of SFJ or any of its Affiliates), and disclose to PB in writing all previously-undisclosed Research Results within the Trial Data Package; (b) formally transfer or assign, or cause to be formally transferred or assigned, into the name of PB or its designee all Product Filings in such country (in each case, whether held in the name of SFJ or any of its Affiliates); and (c) take such other actions and execute such other instruments, assignments and documents as may be necessary to effect, evidence, register and record the transfer, assignment or other conveyance of such rights to PB or its designee. + +3.1.3 Regulatory Interactions. Without limitation to Section 3.12.5, SFJ shall, except to the extent a need for exigent action prevents it from doing so, cooperate with PB to provide MedImmune with copies of SFJ's initial BLA relating to the Product to PMDA or NMPA, as applicable, a reasonable amount of time (but no less than [***]) prior to the anticipated date for the applicable submission to allow MedImmune to review and comment on such BLA, and SFJ shall consider all comments and proposed revisions from MedImmune in good faith in connection with effecting such submission. SFJ shall cooperate with PB in PB's + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +consultation with MedImmune regarding, and in keeping MedImmune informed of, the status of the preparation of the dossier rationale and proposed labeling with respect to the Product in the SFJ Territory. Upon MedImmune's request (as communicated by PB to SFJ), SFJ shall promptly (and in any event, within [***]) provide to MedImmune access to and copies of any Regulatory Documentation necessary or reasonably useful for MedImmune to Exploit the AstraZeneca Product or update the label with respect thereto. + +3.1.4 Compliance. Each Party will conduct its portion of the Development Program and perform all other of its duties and responsibilities hereunder in accordance with the Development Plan and in material compliance with all Applicable Laws. PB will use Commercially Reasonable Efforts to oversee the Manufacture of the Product, and PB will materially comply, and PB will require that all Permitted Third Parties of PB materially comply, with all Applicable Laws with respect to the analysis, storage, handling, disposal and transfer of the Product. SFJ will materially comply, and SFJ will require that all Permitted Third Parties of SFJ materially comply, with all Applicable Laws with respect to the storage, handling, disposal and transfer of all quantities of Product supplied by or on behalf of PB for use in the conduct of Clinical Trials in the European Clinical Trial Countries and the Designated Asian Countries. + +3.1.5 SFJ SOPs. Subject to the terms hereof, SFJ will, within the SFJ Territory, use Commercially Reasonable Efforts to conduct, or ensure that the Approved CRO conducts, the Clinical Trials in accordance with the standard operating procedures (the "SFJ SOPs") that will be provided to PB within [***] following the later of (i) the Effective Date or (ii) the selection of such Approved CRO for PB's review and comment. Following the Effective Date, SFJ may amend any SOPs; provided that with respect to material amendments to SOPs that pertain to Clinical Trials activities and/or other obligations that are, or will be, performed by SFJ or any Permitted Third Party utilized by SFJ during the remainder of the Term or any time thereafter as set forth in this Agreement, SFJ will provide the JDC with a copy of each such amendment to permit the JDC Representatives to review and comment on such amendments and SFJ will reasonably consider incorporating such comments. + +3.1.6 PB SOPs. Subject to the terms hereof, PB will, within the PB Territory, use Commercially Reasonable Efforts to conduct, or ensure that the Approved CRO conducts, the Clinical Trials in accordance with the standard operating procedures (the "PS SOPs") that will be provided to SFJ within [***] following the later of (i) the Effective Date or (ii) the selection of such Approved CRO for SFJ's review and comment. Following the Effective Date, PB may amend any SOPs; provided that with respect to material amendments to SOPs that pertain to Clinical Trials activities and/or other obligations that are, or will be, performed by PB or any Permitted Third Party utilized by PB during the remainder of the Term or any time thereafter as set forth in this Agreement, PB will provide the JDC with a copy of each such amendment to permit the JDC Representatives to review and comment on such amendments and PB will reasonably consider incorporating such comments. + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +3.2 Sites and Clinical Investigators. + +3.2.1 Selection of Sites and Investigators. + +3.2.1.1 SFJ will select the study sites within the SFJ Territory and the European Clinical Trial Countries to conduct the Clinical Trials and will inform the JDC in advance of SFJ's choice of each study site; the JDC will have the right to reject any such site(s) which the JDC will determine in its reasonable judgment are not appropriate. + +3.2.1.2 PB will select the study sites within the US to conduct the Clinical Trials and will inform the JDC in advance of PB's choice of each study site; the JDC will have the right to reject any such site(s) which the JDC will determine in its reasonable judgment are not appropriate. + +3.2.1.3 Each Party will enter, and will ensure that its Affiliates enter, and each Approved CRO will enter, into an agreement with each study site; such an agreement will be substantially in the form to be provided by PB and agreed upon by the Parties within [***] following the Effective Date (the "Clinical Trial Agreement") (upon execution of such Clinical Trial Agreement, such study site will be deemed a "Site"). If a study site requires any material changes to such form Clinical Trial Agreement, SFJ with regard to the European Clinical Trial Countries and the SFJ Territory and PB with regard to the US, will inform the JDC and seek JDC approval of such change, and the JDC will not unreasonably withhold such approval. For clarity, each Clinical Trial Agreement will be on commercially reasonable and customary terms, consistent with industry standards for similar agreements and sufficient to enable such Party to comply with its obligations hereunder with respect to such Clinical Trial, including, but not limited to, Section 2.2.2, the terms pertaining to ownership of Intellectual Property and publications, and treatment of Confidential Information. + +3.2.1.4 The Clinical Trials Agreements will also require that the Clinical Investigators, any sub-investigators (e.g., research fellows, residents and associates) and any others required by Applicable Law at each Site complete a financial disclosure document substantially in the form to be agreed upon by the Parties (the "Financial Disclosure Form"). For clarity, if any of the foregoing individuals do not complete such Financial Disclosure Form, such individuals may not participate in, or do any work in connection with, the Clinical Trials. + +3.2.2 Obligations During the Clinical Trials Conduct. + +3.2.2.1 During the Development Term, SFJ will conduct meetings with the Clinical Investigators within the SFJ Territory and the European Clinical Trial Countries, and PB will conduct meetings with the Clinical Investigators in the US (each, a "Clinical Investigator Meeting"), of which the JDC will be provided with reasonable advance notice and in which the other Party will have the right (but not the obligation) to attend and participate. Minutes of Clinical Investigator Meetings will be made available to the JDC upon request. + +3.2.2.2 Each Party will provide the JDC with copies of all communications relevant to the Clinical Trials and provided to all Sites, and upon request of the + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +JDC, provide the JDC with copies of any other communications between such Party and any individual Sites and/or any Affiliate or Approved CRO and any individual Sites. + +3.2.2.3 If a Party terminates a Site, such Party will inform the JDC with the reason for such termination and if reasonably practicable, such notice will be provided reasonably in advance of such termination. + +3.2.2.4 PB in the PB Territory and SFJ in the SFJ Territory will be responsible for preparing and submitting any INDs and amendments thereto to Regulatory Authorities as required by Applicable Laws in the countries for which Sites have been selected. PB will prepare the CMC Information and any updates to this information and submit it to the applicable Regulatory Authority as required by Applicable Laws. + +3.3 Subjects and Informed Consent. + +3.3.1 Subject Recruitment Plan. The Parties will comply with the subject recruitment plan for the Clinical Trials, which will be established by each Party for their respective Territory, except in the case of the European Clinical Trial Countries which SFJ will be responsible for, and communicated to the JDC, for approval by the JDC not to be unreasonably withheld, within a reasonable period of time after the Effective Date not to exceed [***] of the Effective Date (the "Subject Recruitment Plan") in recruiting subjects to participate in the Clinical Trials. For clarity, prior to engaging in any recruiting activities, the Parties, within their respective Territory, will ensure that the applicable IRBs and/or other ethics committees approve any related materials and activities as required by the JDC and all Applicable Laws. + +3.3.2 Informed Consent. + +3.3.2.1 PB, with support from SFJ, will prepare the informed consent document(s) for use in the Clinical Trials. Each Party will ensure that the informed consent of each subject participating in a Clinical Trial in such Party's respective Territory, except in the case of the European Clinical Trial Countries which SFJ will be responsible for, be obtained in accordance with all Applicable Laws, including completion of the informed consent document. Such informed consent document for a Clinical Trial will be substantially in the form to be approved by the JDC within [***] following approval by the JDC of the final Protocol for such Clinical Trial (collectively, "Informed Consent") (upon obtaining such Informed Consent, a prospective subject will be deemed a "Subject"). For clarity, the Informed Consent document that each Subject signs will expressly state that each Subject understands that such Party is providing support for the Clinical Trials and will authorize disclosure of data and results related to the Clinical Trials to PB or SFJ, as applicable, for any purpose, subject to all Applicable Laws. + +3.3.2.2 PB will ensure that the Informed Consent has been obtained by a Permitted Third Party from each Subject in the US prior to administration of the Product to such Subject in accordance with the Protocol. SFJ will ensure that the Informed Consent has been obtained by a Permitted Third Party from each Subject in the European Clinical Trial Countries and the SFJ Territory prior to administration of the Product to such Subject in accordance with the Protocol. + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +3.3.3 Inclusion and Exclusion Criteria. Neither Party will waive, and each Party will require that its Permitted Third Parties do not waive, any exclusion or inclusion criteria specified in the Protocol. + +3.4 Investigator's Brochure. + +3.4.1 Investigator's Brochure. PB will maintain the Investigator's Brochure for the Product. SFJ will, promptly following receipt of written notice from PB of the need for an Investigator's Brochure update, provide PB with all information regarding the Clinical Trials that is necessary to enable PB to update the Investigator's Brochure. + +3.4.2 Parties' Responsibilities. Promptly following the Effective Date, PB will provide SFJ with the most recent version of the Investigator's Brochure. PB will also promptly provide SFJ with any updated versions of the Investigator's Brochure. Each Party will ensure that each Site in such Party's respective Territory, except in the case of the European Clinical Trial Countries which SFJ will be responsible for, and all applicable IRBs and other ethics committees receive a copy of, and promptly receive any updates to, the Investigator's Brochure. + +3.5 Data Collection and Data Management. + +3.5.1 CRF. PB, with support from SFJ, will be responsible for preparing the form of CRF for the Clinical Trials in accordance with the Protocol. + +3.5.2 Data Management Plan. + +3.5.2.1 Each Party will use Commercially Reasonable Efforts to comply with the data management plan to be agreed upon by the Parties within [***] following approval by the JDC of the final Protocol (the "Data Management Plan"). For clarity, the Data Management Plan will be agreed upon by the Parties prior to recruitment of subjects for the Clinical Trials. + +3.5.2.2 With respect to any data collected in connection with the Clinical Trials, each Party will ensure that such data is held in one or more appropriate facilities with information security protections in accordance with all Applicable Laws including [***]. + +3.5.3 Clinical Trials Database. + +3.5.3.1 PB, with support from SFJ, will use Commercially Reasonable Efforts to establish a Clinical Trials database for the data collected from each Site for the Clinical Trials (the "Clinical Trials Database") within [***] following approval by the JSC of the Final Protocol. SFJ with regard to European Clinical Trial Countries and the SFJ Territory and PB with regard to the US will promptly update the Clinical Trials Database upon receiving data for the Clinical Trials from any Site and any other applicable Permitted Third Party, and each Party will ensure that the Sites and such other Permitted Third Parties promptly following collection thereof, provide data in connection with the Clinical Trials to such Party. + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +3.5.3.2 Each Party will provide the JDC with electronic copies of such data requested by the JDC at JDC meetings and in accordance with Applicable Laws. + +3.5.3.3 If, at any time during the Development Term, PB decides to change the format of the database for the Clinical Trials, PB will so notify SFJ and the Parties will cooperate to ensure that the format that PB selects permits SFJ to incorporate the data from the Clinical Trials into its relevant systems and is in compliance with all Applicable Laws. + +3.5.3.4 The Vendor responsible for the database will provide SAS datasets to the Parties in accordance with specifications as defined by PB (i) when the data in the Clinical Trials Database are equivalent to [***] of total data expected to be recorded in the Clinical Trials Database; (ii) if a safety signal is identified; and/or (iii) if a request is received from the Regulatory Authorities. + +3.5.3.5 PB and SFJ will jointly maintain the Clinical Trials Database including ensuring that information included in the Clinical Trials Database is accurate and up-to-date. PB will be responsible for registering, maintaining and updating any registries pertaining to the Clinical Trials to the extent required by any Applicable Laws, including www.clinicaltrials.gov, www.clinicalstudyresults.org, and the PHRMA Website Synopsis. + +3.5.4 Clinical Trials Master File. Promptly following the Effective Date, PB and SFJ will jointly establish and maintain a Clinical Trials master file for each Clinical Trial in the format as agreed upon by the JDC (each a "Clinical Trials Master File"). Notwithstanding anything to the contrary herein, neither PB nor SFJ will be permitted to delegate its rights and obligations pursuant to this Section 3.5.4 to any Permitted Third Parties without the prior approval of the JDC, except either Party may delegate its rights and obligations pursuant to this Section 3.5.4 to any of its Affiliates. + +3.5.5 Source Data Verification. PB will be responsible for source verification of data records in the US, and SFJ will be responsible for source data verification of data records in European Clinical Trial Countries and the SFJ Territory. At either Party's request, a Party will provide the other Party with copies of any reports relating to source data verification and other types of Clinical Trials audits. + +3.5.6 Statistical Analysis. PB will perform any statistical analysis required in accordance with the statistical analysis plan for the Clinical Trials to be agreed upon by the Parties within [***] of the Effective Date (the "Statistical Analysis Plan"). + +3.6 Audits. + +3.6.1 Each Party will conduct quality oversight inspections and audits of the facilities and services of the Permitted Third Parties utilized by such Party in accordance with its standard operating procedures and will provide the other Party with copies of such audit reports upon request. + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +3.6.2 During the Development Term, PB will conduct quality oversight inspections and audits of the manufacturing facilities for the Product in accordance with its internal policies and PB will provide SFJ with copies of such audit reports. + +3.7 Monitoring. PB in the US, and SFJ in European Clinical Trial Countries and the SFJ Territory, will monitor the Clinical Trials, and share information with the JDC pertaining to monitoring the Clinical Trials, in accordance with the monitoring plan for the Clinical Trials to be agreed upon by the Parties within [***] following the Effective Date. + +3.8 IRBs and Other Ethics Committees. + +3.8.1 Each Party will be responsible for obtaining the approval of the IRBs and other ethics committees required prior to commencing, and during, the Clinical Trials at every Site in such Party's Territory, except in the case of the European Clinical Trial Countries which SFJ will be responsible for. + +3.8.2 Each Party will ensure that IRBs and such other relevant ethics committees have current registrations and accreditations as required by Applicable Law and will provide all ethics committees, including all IRBs, and Regulatory Authorities, with all necessary documentation prior to, and during the course of, the Clinical Trials as required by Applicable Law. + +3.8.3 PB in the US, and SFJ in the SFJ Territory and in the European Clinical Trial Countries, will be responsible for responding to all queries from the IRBs and other ethics committees; provided that (a) the other Party will make itself reasonably available to assist with any such queries and (b) if such query relates solely to the CMC Information, the Manufacturing Dossier, and/or preclinical studies, PB will prepare the applicable response and provide SFJ with a copy thereof. + +3.9 IDMC + +3.9.1 PB will establish an IDMC for the Clinical Trials, [***]. For clarity, [***]. + +3.9.2 PB will ensure that the IDMC is provided with all information and data that it requires [***], and SFJ will reasonably cooperate with PB in such regard. + +3.10 Environmental Health and Safety. + +3.10.1 In conducting the Clinical Trials, each Party will comply with all Applicable Laws relating to environmental, health and/or safety matters and will be solely responsible for establishing material and specimen handling guidelines and for ensuring use of controls, including appropriate personal protective equipment, that minimize potential worker exposure, obtaining the material safety data sheets and providing the appropriate training for workers who will be potentially exposed to the Product. + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +3.10.2 Each Party will promptly notify the JDC, in writing, of any worker claims of suspected occupational illnesses related to working with the Product, regardless of whether such claims are received during the Development Term or any time thereafter. After termination of this Agreement for whatever reasons, or expiration of this Agreement, each Party will promptly notify the other Party of any worker claims of suspected occupational illnesses related to working with the Product during the Development Term, of which it has knowledge. + +3.11 Completion of the Clinical Trials. + +3.11.1 PB will use Commercially Reasonable Efforts to keep the Sites participating in the Phase 3 Trial in the US, and SFJ will use Commercially Reasonable Efforts to keep the Sites participating in each Clinical Trial in European Clinical Trial Countries and the SFJ Territory, operational, including continuing to dose Subjects with the Product in accordance with the Protocol and conducting any follow-up work required, until the Completion Date for such Clinical Trial. As a Clinical Trial is completed or otherwise terminated at each Site for which a Party is responsible, such Party will close out such Clinical Trial as specified in the Protocol, including performing all Subject follow-up and providing the other Party with all Clinical Trial data not provided as of such date. For clarity, copies of documents, including any CRFs and the Clinical Trials Master File will be made available and/or transferred to the other Party upon the other Party's request, or at the other Party's option, destroyed (provided that such destruction is in compliance with ICH guidelines). Notwithstanding the foregoing, neither Party will provide the other Party with any Personally Identifiable Information. + +3.11.2 Upon the Completion Date of a Clinical Trial, SFJ will return to the location specified by PB at such time, or, at PB's option, destroy, any unused Product from such Clinical Trial (SFJ's expenses in doing so will be included in Development Costs), and will comply with all Applicable Laws in so returning or destroying such Product. + +3.11.3 The CSR for the Phase 3 Trial will be prepared by PB, with support from SFJ, in compliance with all Applicable Laws, including ICH E3 guidelines. The final, signed CSR for the Phase 3 Trial (the "Final Phase 3 Trial CSR") will be provided to SFJ promptly following the Completion Date of the Phase 3 Trial. In the event that there are any additional safety or efficacy data pertaining to the Phase 3 Trial that come into the possession of PB after it has provided SFJ with the Final Phase 3 Trial CSR, PB will prepare and promptly provide SFJ with a supplement to such CSR. The CSR for each Clinical Trial (other than the Phase 3 Trial) conducted in the SFJ Territory will be prepared by SFJ, with support from PB, in compliance with all Applicable Laws, including ICH E3 guidelines. The final, signed CSR for each such Clinical Trial conducted in the SFJ Territory (each, a "Final SFJ Territory CSR") will be provided to PB promptly following the Completion Date of such Clinical Trial. In the event that there are any additional safety or efficacy data pertaining to any such other Clinical Trial conducted in the PB Territory that come into the possession of SFJ after it has provided PB with the Final SFJ Territory CSR for such Clinical Trial, SFJ will prepare and promptly provide PB with a supplement to such CSR. + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +3.12 Commercially Reasonable Efforts. + +3.12.1 Timely performance of the Clinical Trials and receipt of Regulatory Approval is important to the success of this Agreement. Each Party will use Commercially Reasonable Efforts to complete the Clinical Trials according to the Timeline and, if the Clinical Trials is successful, to obtain Regulatory Approval, in such Party's Territory. In the event that either Party fails to complete the Clinical Trials in their respective Territory according to the Timeline and this failure is not cured as set forth in Section 14.2.1, the other Party may terminate this Agreement pursuant to Section 14.2.1, or following discussion by the JSC that such Party failed to use Commercially Reasonable Efforts, the other Party may assume the roles and responsibilities of such Party; provided that in the event of such failure by SFJ, SFJ will remain obligated to pay the costs under Section 4.2.2(ii). + +3.12.2 In the event of Successful Phase 3 Interim Analysis, PB will use Commercially Reasonable Efforts to obtain Regulatory Approval for the Product for the Indication (a) by the FDA in the US, including the obligation to file a BLA for the Product for the Indication with the FDA within [***] of Successful Phase 3 Interim Analysis, provided that PB shall not be required to file such BLA earlier than the estimated date for BLA filing in the US based on Successful Phase 3 Interim Analysis set forth in the Timeline, and (b) by EMA in the EU (or, as applicable, by the applicable national Regulatory Authorities in one or more Designated European Countries), including the obligation to file a BLA for the Product for the Indication with EMA (or the applicable national Regulatory Authorities in one or more Designated European Countries) within [***] of Successful Phase 3 Interim Analysis, provided that PB shall not be required to file such BLA earlier than the estimated date for BLA filing in the EU based on Successful Phase 3 Interim Analysis set forth in the Timeline. + +In the event that PB fails to use Commercially Reasonable Efforts to so obtain Regulatory Approval for the Product for the Indication, including the obligation to file a BLA for the Product for the Indication with each of the FDA and EMA (or the applicable national Regulatory Authorities in one or more Designated European Countries) by the dates set forth in this Section 3.12.2, and this failure is not cured within [***] after receipt of written notice from SFJ requesting such cure, SFJ may either terminate this Agreement pursuant to Section 14.2.1, or assume PB's regulatory filing activities (in which event SFJ's expenses in assuming such regulatory filing activities shall be deemed to be Development Costs). + +3.12.3 Upon achievement of the Phase 3 Success Criteria, PB will use Commercially Reasonable Efforts to obtain Regulatory Approval for the Product for the Indication by the FDA in the US and by EMA in the EU (or, as applicable, by the applicable national Regulatory Authorities in one or more Designated European Countries), including the obligation to file a BLA for the Product for the Indication with each of the FDA and EMA (or the applicable national Regulatory Authorities in one or more Designated European Countries) within [***] of the date of achievement of the Phase 3 Success Criteria. In the event that PB fails to use Commercially Reasonable Efforts to so obtain Regulatory Approval for the Product for the Indication, including the obligation to file a BLA for the Product for the Indication with each of the FDA and EMA (or the applicable national Regulatory Authorities in one or more + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +Designated European Countries) within [***] of the date of achievement of the Phase 3 Success Criteria, and this failure is not cured as set forth in Section 14.2.1, SFJ may either terminate this Agreement pursuant to Section 14.2.1, or assume PB's regulatory filing activities (in which event SFJ's expenses in doing so shall be deemed to be Development Costs). + +3.12.4 Upon achievement of the Phase 3 Success Criteria or Successful Phase 3 Interim Analysis if conditional approval based on interim data is allowed by the relevant Regulatory Authority (or, if later, achievement of the primary endpoint(s) of any other Japan-specific or China-specific Clinical Trial, as applicable, being conducted by SFJ in the applicable country that is necessary for filing of a BLA with PMDA or NMPA, respectively), SFJ will use Commercially Reasonable Efforts to obtain Regulatory Approval for the Product for the Indication by the PMDA in Japan and by the NMPA in China, including the obligation to file a BLA for the Product for the Indication with each of the PMDA and the NMPA within [***] of the date of achievement of the Phase 3 Success Criteria, provided that SFJ shall not be required to file such BLA earlier than the estimated date for BLA filing in Japan or China (as applicable) based on the Phase 3 Success Criteria or Successful Phase 3 Interim Analysis if conditional approval based on interim data is allowed by the relevant Regulatory Authority as set forth in the Timeline or, if later, achievement of the primary endpoint(s) of any other Japan-specific or China-specific Clinical Trial, as applicable, being conducted by SFJ in the applicable country that is necessary for filing of a BLA with PMDA or NMPA, respectively. In the event that SFJ fails to use Commercially Reasonable Efforts to so obtain Regulatory Approval for the Product for the Indication, including the obligation to file a BLA for the Product for the Indication with each of the PMDA and the NMPA within [***] of (a) the date of achievement of the Phase 3 Success Criteria or, (b) if later, achievement of the primary endpoint(s) of any other Japan-specific or China-specific Clinical Trial, as applicable, being conducted by SFJ in the applicable country that is necessary for filing of a BLA with PMDA or NMPA, respectively, or Successful Phase 3 Interim Analysis if conditional approval based on interim data is allowed by the relevant Regulatory Authority, and this failure is not (i) caused by PB's failure to perform its obligations hereunder or (ii) cured as set forth in Section 14.2.1, PB may either terminate this Agreement pursuant to Section 14.2.1, or assume SFJ's regulatory filing activities, in which event an amount equal to PB's expenses in doing so [***]. In no event will any such costs incurred by PB be included in actual Development Costs for purposes of Section 14.2. + +3.12.5 Regulatory Approvals. The Parties acknowledge that regulatory matters with respect to the Product will reasonably require coordination with regulatory matters with respect to the AstraZeneca Product, and SFJ agrees to cooperate in good faith with PB and MedImmune as reasonably necessary for and in relation to each of PB and SFJ, on the one hand, and MedImmune, on the other hand, to obtain and maintain regulatory approvals (including Regulatory Approvals) with respect to the Product in the case of PB and SFJ and with respect to the AstraZeneca Product in the case of MedImmune. Prior to submitting any written or electronic communication to a Regulatory Authority in a country of the Territory with respect to AstraZeneca Product that would reasonably be expected to require a change to the Regulatory Authority‑approved full prescribing information for the AstraZeneca Product for such country, SFJ shall cooperate with PB in PB's consultation with MedImmune. SFJ shall keep PB reasonably informed of its efforts to obtain and maintain Regulatory Approval for the Product in + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +the SFJ Territory and developments with respect thereto, including SFJ's expected timing with respect to submission and receipt of any and all Regulatory Approvals. + +3.13 Pharmacovigilance and Safety Information Exchange. + +3.13.1 SFJ acknowledges that PB is bound by the pharmacovigilance and safety information exchange requirements of Sections 3.4.4(b) through 3.4.4(h) of the AZ License and the terms of the MedImmune Pharmacovigilance Agreement (a copy of which is attached hereto as Exhibit N) relating both to the Product and the AstraZeneca Product and that, in order to comply with its obligations to MedImmune, PB must obtain SFJ's commitment to provide adverse event and other safety information relating to the Product and to AstraZeneca Product to PB in a form and within the applicable time periods necessary for PB to comply with Sections 3.4.4(b) through 3.4.4(h) of the AZ License and the terms of the MedImmune Pharmacovigilance Agreement. + +3.13.2 The safety reporting units from each of the Parties shall meet and shall within [***] of the Effective Date agree upon a written agreement for exchanging adverse event and other safety information relating to the Product (the "Pharmacovigilance Agreement"). The Pharmacovigilance Agreement will ensure that adverse event and other safety information are exchanged upon terms that will permit (a) PB to comply with Sections 3.4.4(b) through 3.4.4(h) of the AZ License and the terms of the MedImmune Pharmacovigilance Agreement, and (b) each Party to comply with Applicable Laws and requirements of Regulatory Authorities. + +3.13.3 Each Party agrees not to enter in to any clinical activity implicating pharmacovigilance obligations for the Product in its respective Territory prior to execution of the Pharmacovigilance Agreement. + +3.14 Product. + +3.14.1 Supply of the Product. + +3.14.1.1 PB will be the GMP Manufacturer of the Product for the Clinical Trials, either directly or through an Approved Vendor. In particular, with respect to the Clinical Trials, PB will maintain in force a clinical supply agreement with a CMO that has sufficient capacity to manufacture and supply GMP-compliant Product for the Clinical Trials in a timely manner in accordance with a clinical supply schedule approved by the JDC (as amended by the JDC from time to time, the "Clinical Supply Schedule"). + +3.14.1.2 During the Development Term, PB will supply, as determined by the JDC, or cause to be supplied, as determined by the JDC to SFJ GMP-compliant Product manufactured in compliance with the then-current CMC Information included in the IND submitted to the applicable Regulatory Authority for the Clinical Trials in the European Clinical Trial Countries or the SFJ Territory, as applicable, in accordance with the Clinical Supply Schedule as set forth in a clinical supply agreement to be entered into between the Parties within [***] after the Effective Date (the "Clinical Supply Agreement"). The costs for the supply of the Product for the Clinical Trials in the US, the European Clinical Trial Countries and the SFJ + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +Territory (the "Product Supply Costs") will be borne by PB. Each Party will provide the JDC at each JDC meeting with quarterly reports regarding inventory of the Product and the reasonably anticipated needs for the Product to ensure that PB can supply the Product in accordance with the Clinical Supply Schedule. + +3.14.2 Use of the Product. + +3.14.2.1 SFJ will (i) in conducting the Clinical Trials, only use Product supplied by PB or such Third Parties designated by PB; (ii) only use the Product supplied by PB or Third Parties designated by PB, and require that its Permitted Third Parties that receive any of the Product supplied by PB or Third Parties designated by PB only use such Product, for the sole purpose of conducting the Clinical Trials in accordance with the respective Protocols; and (iii) ensure subject dosing compliance per the respective Protocols for the Clinical Trials conducted in the European Clinical Trial Countries or the SFJ Territory. Dosage and Administration Instructions will be provided to SFJ by PB sufficiently in advance of the Clinical Trials' commencement. + +3.14.2.2 PB in the US, and SFJ in the European Clinical Trial Countries and the SFJ Territory, will be responsible for ensuring that the Product is administered solely to the Subjects in Clinical Trials conducted by such Party in accordance with the respective Protocols. For each dose administered to a Subject in a Clinical Trial conducted by such Party, such Party will implement procedures and ensure that records are maintained specifying the date and time that such dose of the Product is administered, the amount of the Product administered to such Subject, the lot number of the Product from which such dosage came, and the number of the Subject to which such dosage was administered. Each Party shall provide copies of such records to the other Party upon the other Party's reasonable request. + +3.15 Complaints Related to the Product. During the Development Term, each Party will promptly forward to the other Party any complaints that it receives related to the Product. PB in the US, and SFJ in European Clinical Trial Countries and the SFJ Territory, will respond to any complaints of which such Party becomes aware relating to the Product provided that the other Party will provide reasonable cooperation in connection therewith. Notwithstanding the foregoing, if a complaint pertains to the manufacturing, appearance or general physical characteristics of the Product or other processes at the manufacturing facility, PB will be solely responsible for responding to such complaint. + +3.16 Recall of the Product in Connection with Study Prior to Approval. If the Product is recalled for safety reasons or GMP non‑compliance prior to Regulatory Approval, PB in the US, and SFJ in European Clinical Trial Countries and the SFJ Territory, will be responsible for the operational execution of such recall. PB will cooperate with SFJ in connection with any such recall in European Clinical Trial Countries or the SFJ Territory. The costs for such any such recall will be at PB's expense and not be a Development Cost, unless such recall and/or costs were based on the material breach of this Agreement, intentional misconduct, or gross negligence of SFJ or any of its Affiliates or Permitted Third Parties, in which case, SFJ will bear the expense of any such recall and such expense will not be a Development Cost. + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +3.17 Compliance with Laws. SFJ and its Affiliates and PB and its Affiliates will comply, and each Party will use Commercially Reasonable Efforts to ensure that all Permitted Third Parties utilized by such Party comply, with all Applicable Laws with respect to the storage, handling, disposal and transfer of the Product, and each Party assumes sole responsibility for the violation of such Applicable Laws by such Party or any of its Affiliates or its Permitted Third Parties. + +3.18 Disclosures. + +3.18.1 During the Development Term, each Party shall provide the other Party at meetings of the JSC (or in advance of such meetings as part of the information that may be distributed to JSC members prior to such meetings or, if no such meeting is held in a [***], directly to the other Party) at least once during each [***] with summaries of all data known to such Party material to obtaining Regulatory Approval, and material Product safety data in all indications (including but not limited to Serious Safety Issues), including such material data relating to efficacy, clinical sites, patient enrollment and drop-out rates, CMC and other material manufacturing data, and material communications with Regulatory Authorities. + +3.18.2 PB shall (a) provide SFJ with quarterly unaudited financial statements and annual audited financial statements (the "PB Financial Statements") promptly following the availability thereof (and no later than the date filed with the SEC) and provide to SFJ on a quarterly basis concurrently with the applicable PB Financial Statements [***], (b) promptly notify SFJ of achieving the Successful Phase 3 Interim Analysis and the Phase 3 Success Criteria, and (c) on or prior to the end of each [***] during the Term [***]. At least [***] during the Term, upon SFJ's request, Executive Officers of PB shall meet with Executive Officers of SFJ to review and discuss PB's financial condition and operations. [***]. + +3.18.3 PB shall provide prompt written notice (a "Going Concern Notice") to SFJ if (i) PB determines in accordance with GAAP that it is probable that PB will be unable to meet its obligations as they become due within one year after the date that PB's financial statements for the then-current quarter are issued, or available to be issued or (ii) a "Going Concern" footnote is included in any of the PB Financial Statements required to be delivered by PB to SFJ pursuant to Section 3.18.2 (a "Going Concern Condition"). During the applicable Going Concern Cure Period (as defined below), PB shall have the ability to remedy the Going Concern Condition through a restructuring of PB's costs and operations (provided that such restructuring does not adversely impact PB's ability to perform its obligations hereunder) or through raising additional capital in one or more financing or strategic transactions so as to enable PB to meet its obligations as they become due within such one year period including performing all of PB's obligations hereunder. "Going Concern Cure Period" shall mean the [***] period following delivery of a Going Concern Notice, provided that if SFJ does not offer and fund Going Concern Funding as set forth in Section 4.2.4 sufficient to remedy the Going Concern Condition within such [***] period, the Going Concern Cure Period shall be extended to [***] following delivery of such Going Concern Notice. + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +3.19 Exclusivity Commitment of SFJ. During the applicable Exclusive Period, SFJ shall not, and shall cause its Affiliates not to, either by itself or through a Third Party, conduct human clinical trials of, or sell, offer for sale or have sold: + +3.19.1 any Competing Product (other than Product) alone or in combination (whether fixed dose or co-packaged) with one (1) or more other active ingredients; + +3.19.2 any combination (whether fixed dose or co-packaged) with one (1) or more other active ingredients of the Product and a Competing Product; + +3.19.3 any agent that is intended as an antidote to, or is intended to neutralize, abrogate or reverse the antiplatelet activity of, (i) any Brilinta Competing Product alone or in combination (whether fixed dose or co-packaged) with one (1) or more other active ingredients or (ii) both the Ticagrelor Compound and a Brilinta Competing Product; + +3.19.4 without limitation to the foregoing, any agent with dual activity as (i) an antidote to, or for use as an agent to neutralize, abrogate or reverse the antiplatelet activity of, the Ticagrelor Compound and (ii) an antidote to, or for use as an agent to neutralize, abrogate or reverse the antiplatelet activity of, any Brilinta Competing Product; or + +3.19.5 any Brilinta Competing Product. + +3.20 Program Transfer. In the event that, at any time after payment to PB of the Initial Development Cost Payment on the Initial Funding Date, PB shall (a) fail to pay any amounts payable to SFJ hereunder within [***] of the date such payment is due, or (b) become in default of its obligations under the AZ License (excluding (x) any such default that would not entitle AZ to terminate the AZ License and (y) any such default that is caused by SFJ's breach of its obligations under this Agreement), or (c) (i) fail to remedy the Going Concern Condition within the Going Concern Cure Period as set forth in Section 3.18.3 or (ii) refuse to accept the Going Concern Funding if offered by SFJ as set forth in Section 4.2.4, then, SFJ may deliver written notice to PB electing to cause PB's business related to the Product to be transferred to SFJ (the "Program Transfer Notice"), and shall deliver a copy of the Program Transfer Notice to MedImmune concurrently with delivery to PB, and within [***] following the delivery of the Program Transfer Notice, PB and SFJ shall execute and deliver a Program Transfer Agreement in the form attached hereto as Exhibit O (the "Program Transfer Agreement") which shall effect the Program Transfer effective as of the date SFJ delivers the Program Transfer Notice to PB. For clarity, this Section 3.20 shall not be effective prior to payment to PB of the Initial Development Cost Payment on the Initial Funding Date. + +ARTICLE 4 + +DEVELOPMENT COSTS + +4.1 Development Costs. SFJ will be obligated to pay or incur up to One Hundred Twenty Million U.S. Dollars ($120,000,000.00) of Development Costs ("Maximum Development Costs") in accordance with the funding schedule set forth in Section 4.2. Any + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +Development Costs in excess of the sum of the Maximum Development Costs and any Going Concern Funding will be borne by PB. + +4.2 Funding Schedule. + +4.2.1 Subject to Section 4.2.4 below, SFJ will pay or incur up to a total of $120 million of Development Costs as set forth in the table below and as detailed below, as set forth in Sections 4.2.2 and 4.2.3. For clarity, this Section 4.2.1 sets forth a summary of the payments due under Sections 4.2.2 and 4.2.3 only, and does not create any additional obligation to pay or incur development costs in excess of those obligations set forth in Sections 4.2.2 and 4.2.3. + +To be paid 45 days after the later of (a) the Effective Date, and (b) the date that PB has obtained the SVB Consent, as set forth in Section 4.2.2(i) + +To be paid prior to the date of Successful Phase 3 Interim Analysis, as set forth in Section 4.2.2(ii) + +To be paid after the date of Successful Phase 3 Interim Analysis, as set forth in Section 4.2.3 + +Total + +$10 Million Up to $80 Million* At least $20 Million and up to $30Million Up to $120 Million + +* In addition to initial $10 Million. + +4.2.2 Following the Effective Date and prior to the date of first availability of the Phase 3 Interim Data (the "Interim Period"), SFJ shall pay or incur up to $90 million of Development Costs as follows: + +(i) The initial payment of Ten Million U.S. Dollars ($10,000,000.00) set forth in the table above, to reimburse PB for development costs incurred by PB prior to the Effective Date (the "Initial Development Cost Payment"), shall be payable on the date ("Initial Funding Date") that is forty-five (45) days after the later of (a) the Effective Date, and (b) the date that PB has obtained the SVB Consent. + +(ii) Following payment to PB of the Initial Development Cost Payment on the Initial Funding Date: + +(1) SFJ shall promptly pay all Approved Third Party Vendor Costs incurred by SFJ or PB in connection with the Clinical Trials during the Interim Period. + +(2) SFJ shall pay to SFJ Affiliates the amount of [***] to reimburse such SFJ Affiliates for their internal costs of overseeing the CROs in European Clinical Trial Countries and the SFJ Territory and for the management of the Clinical Trials in European Clinical Trial Countries and the SFJ Territory during the Interim Period (the "SFJ Interim Management Fee"). + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +(3) SFJ shall pay PB an amount equal to $90 million, less (a) the Initial Development Cost Payment, (b) the SFJ Interim Management Fee, and (c) the Approved Third Party Vendor Costs paid or incurred by SFJ during the Interim Period, (which Approved Third Party Vendor Costs amount shall be estimated and agreed to by the Parties no later than [***]) to be paid pro rata in six (6) equal quarterly payments within [***] after the end of each Calendar Quarter beginning with the Calendar Quarter ending September 30, 2020 through the Calendar Quarter ending December 31, 2021. + +Notwithstanding anything else contained herein to the contrary, in no event shall SFJ be required to pay or incur Development Costs in excess of $90 million during the Interim Period. If the Development Costs during the Interim Period exceed $90 million, PB shall pay or incur all such excess Development Costs including continuing to provide the PB Services during the Interim Period at the expense of PB unless otherwise agreed to in writing by SFJ. For the avoidance of doubt, if the Successful Phase 3 Interim Analysis is not achieved, SFJ shall have no obligation to pay or incur any further Development Costs. + +4.2.3 Following the date of the Successful Phase 3 Interim Analysis and until the end of the Development Term (the "Final Period"): + +(i) SFJ shall pay to SFJ Affiliates the amount of [***] to reimburse such SFJ Affiliates for their internal costs of overseeing the CROs in European Clinical Trial Countries and the SFJ Territory and for the management of the Clinical Trials in European Clinical Trial Countries and the SFJ Territory during the Final Period (the "SFJ Final Management Fee"). + +(ii) SFJ shall pay PB the amount (the "PB Costs") by which the Elected Total Amount (defined below) exceeds the sum of (a) the Initial Development Cost Payment, (b) the SFJ Interim Management Fee, (c) the SFJ Final Management Fee, and (d) all Approved Third Party Vendor Costs (as estimated and agreed to by the Parties prior to the start of the Final Period which are expected to be paid by SFJ through the end of the Development Term) paid or incurred by SFJ (including Approved Third Party Vendor Costs paid by SFJ during the Interim Period) and (e) the amounts paid to PB pursuant to Section 4.2.2(ii)(3), which PB Costs shall be paid pro rata in five (5) equal quarterly payments within [***] after the end of each Calendar Quarter beginning for the Calendar Quarter ending March 31, 2022 through the Calendar Quarter ending March 31, 2023, provided however, in no case earlier than forty-five (45) days after the later of (i) Approved Third Party Vendor Costs have been agreed to by the Parties and (ii) PB has elected and informed SFJ of the Elected Total Amount. Within [***] after achievement of the Successful Phase 3 Interim Analysis, PB shall notify SFJ in writing of the total amount of Development Costs (inclusive of all Development Costs paid or incurred since the Effective Date) that PB elects to have SFJ fund (the "Elected Total Amount"), which shall be no less than $110 million and no more than $120 million. + +(iii) In the event that the Development Costs paid by SFJ after paying all required payments under the preceding provisions of this Section 4.2 shall be less than the Elected Total Amount then any remaining balance of the Elected Total Amount shall be paid to PB by SFJ within [***] of the last payment under Section 4.2.3(ii), to be used by PB for + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +commercialization activities, and such amount paid by SFJ shall be deemed to be included in Development Costs. + +Subject to Section 4.2.4 below, but notwithstanding anything else contained herein to the contrary, in no event shall SFJ be required to pay or incur Development Costs in excess of $120 million in total. If the total Development Costs exceed $120 million, PB shall pay or incur all such excess Development Costs including paying all excess Approved Third Party Vendor Costs and Product Supply Costs and continuing to provide the PB Services at the expense of PB unless otherwise agreed to in writing by SFJ. In connection with the Development, manufacture and Commercialization of the Product and fulfillment of PB's obligations hereunder, PB shall spend at least an amount equal to the amount of funding paid by SFJ to PB pursuant to this Section 4.2. + +4.2.4 If PB has not eliminated a Going Concern Condition by the expiration of the applicable Going Concern Cure Period, SFJ shall have the option, but not the obligation, to pay PB an additional amount (the "Going Concern Funding") up to the amount necessary to eliminate the Going Concern Condition as reasonably determined by SFJ after consultation with PB, which amount (if any) must be accepted by PB and shall be included in Development Costs and shall be paid by SFJ within [***] after the expiration of the Going Concern Cure Period. The Going Concern Funding shall be placed in an escrow account established by PB with the JSC to have sole authority to release funds from escrow to be spent as directed by the JSC to fulfill PB's obligations hereunder. + +4.3 Pre‑Commercialization Costs. During the Term, PB will be solely responsible at its own cost (subject to Sections 4.2) for performing those activities reasonably necessary to prepare for Commercial Launch of the Product in the Territory (the "Pre- Approval Commercialization Activities"). Such Pre-Approval Commercialization Activities may include at PB's sole discretion creating educational or marketing materials, establishing distribution channels and designing packaging and labeling, in each case as reasonably necessary to Commercialize the Product in the Territory. + +ARTICLE 5 + +GOVERNANCE + +5.1 Joint Steering Committee. + +5.1.1 Representatives. Within [***] after the Effective Date, the Parties will establish a joint steering committee to oversee and manage the collaboration (the "JSC"). Each Party initially will appoint [***] to serve as representatives to the JSC (the "JSC Representatives"), with each JSC Representative having knowledge and expertise regarding developing products similar to the Product and sufficient decision-making authority within the applicable Party to make decisions on behalf of such Party within the scope of the JSC's decision‑making authority and, if any such representative is not an employee of the appointing Party, such representative shall execute a confidentiality agreement in form and substance acceptable to the other Party (and, for the avoidance of doubt, the appointing Party shall remain + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +responsible to the other Party for any noncompliance by such representative with such confidentiality obligations). Each Party may replace its JSC Representatives at any time upon written notice to the other Party. + +5.1.2 Chairperson. The JSC chairperson ("JSC Chairperson") shall be designated from the Parties' JSC Representatives and shall serve for a term of one (1) year. SFJ shall appoint the first JSC Chairperson and subsequent appointments will rotate on an annual basis between PB and SFJ. The JSC Chairperson will be responsible for drafting and circulating the draft agenda and ensuring minutes are prepared. + +5.1.3 Meetings. From the Effective Date, through the date of the Regulatory Approval in the US, at least one Designated European Country, and either Japan or China, the JSC will meet at least [***] (and for clarity, such meetings are intended to be conducted via teleconference) unless the Parties mutually agree otherwise. Either Party may call a special meeting of the JSC (by videoconference or teleconference) during the Development Term by providing at least [***] prior written notice to the other Party, which notice shall include a reasonably detailed description of the matter, in the event such Party reasonably believes that a significant matter must be addressed prior to the next scheduled meeting. + +5.1.4 Participants. The JSC may invite individuals who are not JSC Representatives to participate in JSC meetings; provided that (a) all JSC Representatives of both Parties consent to such non-member's participation; and (b) such non-member has executed a confidentiality agreement in form and substance acceptable to the non-inviting Party (and, for the avoidance of doubt, the inviting Party shall remain responsible to the non-inviting Party for any noncompliance by such individual with such confidentiality obligations). For clarity, such non-members will have no voting rights at the JSC. + +5.1.5 Alliance Managers. Each Party shall appoint an individual to act as an alliance manager for such Party (each, an "Alliance Manager") by providing the name and contact information for the Alliance Manager to the JSC. Each Party may change its Alliance Manager from time to time in its sole discretion upon written notice to the JSC. The Alliance Managers shall be the primary point of contact for the Parties regarding the activities contemplated by the Agreement, and the Parties shall use reasonable efforts to ensure that any requests for information and data made outside of the JSC are made through the Alliance Mangers. The Alliance Managers shall attend all meetings of the JSC. For clarity, the Alliance Managers may also be members of the JSC. + +5.1.6 Costs. Each Party will bear its own expenses relating to the meetings and activities of the JSC. + +5.2 JSC Responsibilities and Decision-Making. + +5.2.1 Responsibilities (Review and Discuss). The JSC's responsibilities will include reviewing and discussing (but not approving) the following: + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +5.2.1.1 Oversight of the Parties' collaboration including (i) overall strategic direction, (ii) developing strategies to maximize the value of the Product for the Indication, and (iii) reviewing and commenting on the Development Program and Regulatory Approval strategies; + +5.2.1.2 material changes in the Development Program, including changes required by, or made to respond to comments from, a Regulatory Authority, that do not require approval pursuant to Section 5.2.2.2; + +5.2.1.3 the activities related to, the progress of, and the costs incurred in connection with, the Development Program; + +5.2.1.4 summaries of the Research Results; + +5.2.1.5 forecast of the estimated timeline (on at least a [***] basis) for its development activities with respect to the Product for the Indication; + +5.2.1.6 the addition to the Development Program of any new Clinical Trials testing the efficacy of the Product for the Indication; and + +5.2.1.7 any other matters the Parties mutually agree in writing will be, or are expressly provided in this Agreement to be, reviewed and discussed by the JSC. + +5.2.2 Responsibilities (Review and Approve). The JSC's responsibilities will include reviewing and approving (in each case, such approval not to be unreasonably withheld, conditioned or delayed) the following: + +5.2.2.1 the Protocols; + +5.2.2.2 [***]: + +(a) [***]; + +(b) [***]; + +(c) [***]; + +(d) [***]; + +(e) [***]; or + +(f) [***]. + +(g) commercially reasonable budgets of CRO and Third Party Vendor costs (the "Approved Third Party Vendor Costs") and Product Supply Costs. + +5.2.2.3 any other matters the Parties mutually agree in writing will be, or are expressly provided in this Agreement to be, reviewed and approved by the JSC. + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +The JSC shall use good faith efforts to approve budgets for the Approved Third Party Vendor Costs and the Product Supply Costs no later than [***]. + +5.2.3 Limitation on Authority. Notwithstanding anything to the contrary set forth in this Agreement, the JSC will have no authority to (x) amend, modify or waive compliance with this Agreement, or (y) resolve any dispute concerning the validity, interpretation, construction of, or breach of this Agreement. + +5.2.4 Decision-Making. PB shall retain sole decision-making authority over all matters within the scope of the JSC's oversight other than the matters described in the foregoing 5.2.2. The unanimous approval of the JSC will be required with respect to all matters within its decision-making authority as described in the foregoing Section 5.2.2. The JSC Representatives of each Party will collectively have one (1) vote. The presence of at least one of each Party's JSC representatives constitutes a quorum for the conduct of business at any JSC meeting, and no vote of the JSC may be taken without a quorum present. If the JSC cannot reach consensus on an issue for which it has decision-making authority, then PB shall have the final decision-making authority, provided that if SFJ disagrees with any such PB decision with regard to any of the matters set forth in Section 5.2.2, then, at SFJ's request, the matter shall be escalated to the Executive Officers for attempted resolution by good faith negotiations during a period of [***]. If, notwithstanding such good faith negotiations, the Executive Officers fail to resolve such matter prior to expiration of such [***] negotiation period, and SFJ in good faith continues to disagree with such PB decision, then SFJ shall have the right to terminate this Agreement as provided in Section 14.2.10 upon written notice to PB delivered within [***] after expiration of such [***] negotiation period. + +5.3 Reports to be Provided to the JSC. + +Except as may otherwise be agreed by the Parties, at each JSC meeting PB with regard to the PB Territory and SFJ with regard to the SFJ Territory will provide an update on the progress of the Clinical Trials and PB with regard to the U.S. and the Designated European Countries and SFJ with regard to Japan and China will report on progress toward obtaining Regulatory Approvals. + +5.4 Joint Development Committee. + +5.4.1 Representatives. Within [***] of the Effective Date, the Parties will establish a joint development committee to oversee the conduct of the Clinical Trials (the "JDC"). Each Party initially will appoint [***] to serve as representatives to the JDC (the "JDC Representatives"), with each JDC Representative having knowledge and expertise regarding developing products similar to the Product and sufficient seniority within the applicable Party to make decisions within the scope of the JDC's decision- making authority. Each Party may replace its JDC Representatives at any time upon written notice to the other Party. + +5.4.2 Chairperson. The JDC chairperson ("JDC Chairperson") shall be designated from the Parties' JDC Representatives and shall serve for a term of [***]. [***] shall + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +appoint the first JDC Chairperson and subsequent appointments will rotate on [***] basis between SFJ and PB. The JDC Chairperson will be responsible for drafting and circulating the draft agenda and ensuring minutes are prepared. + +5.4.3 Meetings. + +5.4.3.1 Timing. + +(i) From the Effective Date through the date of first Regulatory Approval, the JDC will meet at least once every [***] (and for clarity, such meetings are intended to be conducted via teleconference) unless the Parties mutually agree otherwise. + +(ii) Either Party may call a special meeting of the JDC (by videoconference or teleconference) during the Development Term by at least [***] prior written notice to the other Party in the event such Party reasonably believes that a significant matter must be addressed prior to the next scheduled meeting. + +5.4.3.2 Participants. The JDC may invite individuals who are not JDC Representatives to participate in JDC meetings; provided that (a) the JDC Representatives of both Parties consent to such non-member's participation; and (b) such non-member is subject to confidentiality obligations consistent with those described in ARTICLE 11 of this Agreement. For clarity, such non-members will have no voting rights at the JDC. + +5.4.3.3 Costs. For clarity, each Party will bear its own expenses relating to the meetings and activities of the JDC and such costs will not be Development Costs hereunder. + +5.4.4 Notice to be Provided to the JDC. + +5.4.4.1 Unusual or Unforeseen Events. Each Party will promptly notify the JDC of any unforeseen or unusual events that occur in connection with the Clinical Trials that may affect the quality, integrity, or timeliness of the Clinical Trials. + +5.4.4.2 Urgent Safety Measures or Serious Breaches. If either Party becomes aware of (a) any urgent safety measures taken by a Clinical Investigator to protect Subjects against immediate hazard or (b) any serious breaches of the Protocol or any Applicable Laws (including ICH GCP guidelines), such Party will immediately inform the JDC. + +5.4.4.3 Regulatory Inspections. Each Party will promptly notify the JDC within [***] of any inspection by any Governmental Authority, including any Regulatory Authority, in connection with the Clinical Trials. Each Party will promptly forward to the JDC copies of any inspection findings that a Site receives from any Regulatory Authority. + +5.4.4.4 Government Investigations. Each Party will promptly notify the JDC upon learning of any investigations by any Governmental Authority in connection with the Clinical Trials. + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +5.4.4.5 Notification of Error. If either Party learns of an error or omission in the conduct of the Clinical Trials that could call into question the validity, or otherwise compromise the quality and/or integrity, of part or all of the Clinical Trials or activities conducted in connection therewith, such Party will inform the JDC in writing within [***] of either Party learning of such error and/or omission. The members of the JDC will discuss in good faith a remediation plan to address such error within [***] of such written notification. Such remediation plan will not be effective unless and until approved by the JDC (such approval not to be unreasonably withheld or delayed). If the JDC approves such remediation plan, the JDC will provide each Party with written notice thereof, specifying the dates on which, and the detail with which the Party responsible for such Clinical Trial will be required to update the JDC of its progress with respect thereto. If the JDC is not able to approve such remediation plan, the matter will be decided by the JSC pursuant to the procedure described in Section 5.2.4. + +5.4.4.6 Compliance with Laws. With respect to each of the foregoing Sections 5.4.4.1 through 5.4.4.5, the Party responsible for notifying the JDC will notify the Person to whom notice is required to comply with all Applicable Laws. + +5.4.4.7 Progress Reports. Except as may otherwise be agreed to by the Parties, at each JDC meeting the Party responsible for such Clinical Trial will provide an update on the progress and cost of such Clinical Trial and Regulatory Approval as measured against the Timeline. + +5.4.4.8 Post-Development Term Notices. Following completion of the Development Term and through the end of the Term, any and all notices required pursuant to this Section 5.4 will be provided to the JSC instead of the JDC. + +5.4.5 Responsibilities and Decision-Making. + +5.4.5.1 Responsibilities. The JDC's responsibilities will include: (a) approving the initial Protocol (b) approving any changes to the Protocol that requires a submission to a Regulatory Authority, an IRB or other ethics committees; (c) discussing the activities in connection with, the progress of, and the costs incurred in connection with, the Clinical Trials, including updates from any Clinical Investigator Meetings; (d) reviewing and discussing any notices that it receives pursuant to the foregoing Section 5.4.4; (e) discussing and reviewing the Research Results; (f) reviewing and discussing on at least a quarterly basis the forecast Development Costs and Timeline; (g) reviewing and discussing (as necessary) proof of submission of any safety reports to the Regulatory Authorities, Clinical Investigators, IRBs and any other ethics committees; (h) reviewing certain data to be provided by each Party at each JDC meeting as requested by the other Party and in accordance with all Applicable Laws; (i) reviewing performance and progress of the Clinical Trials and Regulatory Approval process; and (j) any other matters the Parties mutually agree will be, or are expressly provided in this Agreement to be, within the responsibilities of the JDC. + +5.4.5.2 Decision-Making. The unanimous approval of the JDC will be required with respect to all matters within its decision-making authority as described in the foregoing Section 5.4.5.1. The JDC Representatives of each Party will collectively have one (1) + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +vote. The presence of at least one of each Party's JDC representatives constitutes a quorum for the conduct of business at any JDC meeting, and no vote of the JDC may be taken without a quorum present. If the JDC cannot reach consensus on an issue for which it has decision-making authority, then such matter will be escalated to the JSC. + +5.5 Joint Commercialization Committee. + +5.5.1 Representatives. By [***], the Parties will establish a joint commercialization committee (the "JCC") to oversee and manage the Commercialization of the Product (excluding direct oversight and management of commercial manufacture of Product, provided that PB shall keep the JCC reasonably informed of commercial manufacturing activities), including PB's compliance with its diligence obligations under the AZ License. Each Party will initially appoint [***] to serve as representatives on the JCC (the "JCC Representatives"), with each JCC Representative having knowledge and expertise regarding Commercializing products similar to the Product or knowledge of PB's Commercialization plans and activities for the Product (as applicable) and being reasonably acceptable to the other Party. If any such representative is not an employee of the appointing Party, such representative shall execute a confidentiality agreement in form and substance acceptable to the other Party (and, for the avoidance of doubt, the appointing Party shall remain responsible to the other Party for any noncompliance by such representative with such confidentiality obligations). Each Party may replace its JCC Representatives at any time upon written notice to the other Party. + +5.5.2 Information. PB shall provide to the JCC a draft of each Commercialization Plan (as defined in the AZ License) at least [***] in advance of the date PB is required to deliver such Commercialization Plan to MedImmune. The JCC shall promptly review and discuss each draft Commercialization Plan. + +5.5.3 Chairperson. PB shall designate the JCC chairperson ("JCC Chairperson") from its JCC Representatives. The JCC Chairperson will be responsible for drafting and circulating its Party's draft agenda and ensuring minutes are prepared. + +5.5.4 Meetings. From the Effective Date through the date of the Final Approval Payment, the JCC will meet at least every two months (and for clarity, such meetings are intended to be conducted via teleconference), unless the Parties mutually agree otherwise. Either Party may call a special meeting of the JCC (by videoconference or teleconference) by providing at least five (5) Business Days' prior written notice to the other Party, which notice shall include a reasonably detailed description of the matter, in the event such Party reasonably believes that a significant matter must be addressed prior to the next scheduled meeting. + +5.5.5 Participants. The JCC may invite individuals who are not JCC Representatives to participate in JCC meetings; provided that (a) all [***] JCC Representatives of both Parties consent to such non-member's participation; and (b) such non-member has executed a confidentiality agreement in form and substance acceptable to the non-inviting Party (and, for the avoidance of doubt, the inviting Party shall remain responsible to the non-inviting Party for any noncompliance by such individual with such confidentiality obligations). + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +5.5.6 Costs. Each Party will bear its own expenses relating to the meetings and activities of the JCC. + +5.6 JCC Responsibilities and Decision-Making. + +5.6.1 Responsibilities. The JCC's responsibilities will include the following: + +5.6.1.1 [***]. + +5.6.1.2 [***]; + +5.6.1.3 [***]; + +5.6.1.4 [***]; + +5.6.1.5 [***]; and + +5.6.1.6 Any other matters the Parties mutually agree will be, or are expressly provided in this Agreement to be, reviewed and discussed by the JCC. + +5.6.2 Decision Making. The unanimous approval of the JCC will be required with respect to all matters within its decision-making authority as described in the foregoing Section 5.6.1. The JCC Representatives of each Party will collectively have one (1) vote. The presence of at least one of each Party's JCC representatives constitutes a quorum for the conduct of business at any JCC meeting, and no vote of the JCC may be taken without a quorum present. If the JCC cannot reach consensus on an issue for which it has decision-making authority, then such matter will be escalated to the JSC. + +ARTICLE 6 + +PAYMENTS TO SFJ + +6.1 Regulatory Approval. In exchange for the purchase of the Trial Data Package as set forth in Section 11.1.1.4, PB will pay to SFJ, in US Dollars: + +6.1.1 following Regulatory Approval by the FDA, an initial payment in the amount set forth below to be made within [***] after the date of the Regulatory Approval by the FDA as shown in the table below (the "Initial US Payment") and annual payments in the amounts set forth below on or before each applicable anniversary of the date of such Regulatory Approval (collectively but excluding the Initial US Payment, the "US Approval Payments"); + +6.1.2 following Regulatory Approval by the EMA, an initial payment in the amount set forth below to be made within [***] after the date of the Regulatory Approval by the EMA (or, as applicable, by the national Regulatory Authority in any Designated European Country) as shown in the table below (the "Initial EU Payment") and annual payments in the amounts set forth below on or before each applicable anniversary of the date of the such + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +Regulatory Approval (collectively but excluding the Initial EU Payment, the "EU Approval Payments"); and + +6.1.3 following Regulatory Approval by the PMDA or the NMPA, an initial payment in the amount set forth below to be made within [***] after the date of first Regulatory Approval by the PMDA or the NMPA as shown in the table below (the "Initial Japan/China Payment") and annual payments in the amounts set forth below shall be due on each applicable anniversary of the date of such Regulatory Approval (collectively but excluding the Initial Japan/China Payment, the "Japan/China Approval Payments"); + +provided, in each case, that if conditional Regulatory Approval in a geographic territory specified above in Section 6.1.1, 6.1.2 or 6.1.3 is obtained on the basis of Successful Phase 3 Interim Analysis but unconditional Regulatory Approval is not obtained (i.e., the accelerated Regulatory Approval is withdrawn by the applicable Regulatory Authority) in such geographic territory as a result of failure of the final results of the Phase 3 Trial to meet the Phase 3 Success Criteria or failure of any other human clinical trial that the applicable Regulatory Authority requires PB to conduct after the grant of conditional Regulatory Approval as a condition to the grant of unconditional Regulatory Approval to meet the primary endpoint(s) of such trial and the Product is required to be withdrawn from the market in such geographic territory, then PB shall have no obligation to make any additional Approval Payment for such geographic territory that would otherwise have become due during the period after withdrawal of such conditional Regulatory Approval and before such time (if ever) as Regulatory Approval for such geographic territory is again obtained (and for so long thereafter as such Regulatory Approval remains in effect), provided further that with regard to withdrawal of such conditional Regulatory Approval in [***]. + +The Initial US Payment, Initial EU Payment, Initial Japan/China Payment, US Approval Payments, EU Approval Payments and Japan/China Approval Payments are collectively referred to as the "Approval Payments", and shall be subject to adjustment as provided in Section 6.2. For the sake of clarity, the Initial Japan/China Payment and each of additional Japan/China Approval Payment set forth in the table below shall only be paid once regardless of receipt of Regulatory Approval in both Japan and China. + +Approval Payment Schedule + +Upon Approval 1yr + +Anniversary + +2yr + +Anniversary + +3yr + +Anniversary + +4yr + +Anniversary + +5yr + +Anniversary + +6yr + +Anniversary + +7yr + +Anniversary + +8yr + +Anniversary Total + +FDA Approval 5,000,000 [***] [***] [***] [***] [***] [***] [***] 0 330,000,000 + +EMA Approval 5,000,000 [***] [***] [***] [***] [***] [***] [***] 0 210,000,000 + +First Approval by either PMDA or NMPA + +1,000,000 + +[***] [***] [***] [***] [***] [***] [***] [***] + +60,000,000 + +Total 11,000,000 [***] [***] [***] [***] [***] [***] [***] [***] 600,000,000 + +6.2 Payment Adjustments. In the event that the actual Development Costs paid or incurred by SFJ hereunder are lower or greater than One Hundred Twenty Million U.S. Dollars ($120,000,000.00), including by reason of any amount of Going Concern Funding paid by SFJ to + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +PB in accordance with Section 4.2.4, or in the event that such actual Development Costs are subject to adjustment pursuant to Section 2.3.3, Section 3.12.2 and/or Section 3.12.3, the Approval Payments will be multiplied by a fraction, the numerator of which is such actual amount of Development Costs paid or incurred by SFJ hereunder (as adjusted, to the extent applicable, pursuant to Section 2.3.3, Section 3.12.2 and/or Section 3.12.3) and the denominator of which is One Hundred Twenty Million U.S. Dollars ($120,000,000.00). In the event that Regulatory Approval is obtained in a particular jurisdiction while Development Costs for other jurisdiction(s) are still being paid or incurred, in which case the Parties shall recalculate the applicable adjustment at such time as the final amount of actual Development Costs is known and determine any true-up payments required to be made by PB with respect to any payment made pursuant to Section 6.1 prior to such time, and PB shall pay any such true-up payment to SFJ within [***] after receipt of invoice from SFJ. + +6.3 Method and Timing of Payment. The US Approval Payments, EU Approval Payments and Japan/China Approval Payments to SFJ will be due as of the applicable annual anniversary of the date of the applicable Regulatory Approval. SFJ shall deliver invoices to PB for the US Approval Payments, EU Approval Payments and Japan/China Approval Payments at least [***] before the applicable anniversary of the date of Regulatory Approval, and such payments will be made by PB on or before the later of (a) [***] and (b) [***] following delivery of such invoices, by wire transfer to SFJ's account that SFJ shall designate on such invoice. PB will provide SFJ with written notice of each wire transfer to SFJ's account. All amounts payable and calculations under this Agreement shall be in US dollars. + +6.4 Late Payments. If PB fails to pay any amount due under this Agreement on the due date therefore, then, without prejudice to any other remedies that SFJ may have, that amount will bear interest from the due date until payment of such amount is made, both before and after any judgment, at a rate equal to, [***] percent ([***]%) per annum computed on the basis of a year of 360 days for the actual number of days payment is delinquent or if such rate exceeds the maximum amount permitted by Applicable Law, at such maximum rate. + +6.5 Taxes. The Parties hereby acknowledge and agree that payments made under this Agreement will be made without reduction for withholding or similar taxes, unless such withholding or similar tax is required (x) by a taxing authority as a result of an audit or examination, (y) due to the assignment of this Agreement or any payment obligation hereunder (to the extent permitted) by SFJ to an Affiliate or Third Party, or (z) as a result of a change in Applicable Laws at any time during the Term. In such case, the Parties shall use commercially reasonable and legal efforts to mitigate the amount of such taxes that would need to be withheld and/or paid. Any amounts withheld pursuant to this Section 6.5 will be timely paid over to the appropriate taxing authority, and will be treated for purposes of this Agreement as having been paid to the Party that otherwise would have received such amounts. In the event of a "determination" within the meaning of Section 1313(a) of the Code that withholding or similar taxes were required but were not properly withheld, the Party that received the relevant payment will indemnify and hold the other Party harmless with respect to such taxes and related Losses. + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +6.6 Tax Cooperation. The Parties will cooperate and produce on a timely basis any tax forms or reports, including any IRS Forms W-8BEN or W-9, as applicable, reasonably requested by the other Party in connection with any payment made under this Agreement. Each Party will provide to the other Party any tax forms that may be reasonably necessary in order for such Party not to withhold tax or to withhold tax at a reduced rate under an applicable bilateral income tax treaty. Each Party will provide to the other Party any tax forms at least [***] prior to the due date for any such payments. Each Party will provide the other with commercially reasonable assistance to enable the recovery, as permitted by law, of withholding taxes, VAT, or similar obligations resulting from payments made under this Agreement, such recovery to be for the benefit of the Party bearing such withholding tax or VAT. Each Party will provide commercially reasonable cooperation to the other Party, at the other Party's expense, in connection with any official or unofficial tax audit or contest relating to tax payments made with respect to amounts paid or payable to such other Party under this Agreement. + +6.7 Buy-Out Option. + +6.7.1 Approval Buy-Out Option. Within one hundred and twenty (120) days following the receipt of Regulatory Approval with respect to each of the US, Designated European Countries, and Japan/China, PB shall have the right to make a one-time payment (each, an "Approval Buy-Out Payment") in lieu of all (but not less than all) Approval Payments (as adjusted in accordance with Section 6.2) for the applicable country(ies) (other than the Initial US Payment, Initial EU Payment or Initial Japan/China Payment, as applicable, payable pursuant to Section 6.1 as a result of such Regulatory Approval, in each case, as adjusted in accordance with Section 6.2) by written notice delivered to SFJ no later than [***] after the date of such Regulatory Approval, which written notice shall set forth the amount of the applicable Approval Buy-Out Payment, the proposed date of closing (which shall occur within [***] after the date of the Regulatory Approval), and the calculation of the Approval Buy-Out Payment in reasonable detail based upon the proposed closing date. The Approval Buy-Out Payment will be calculated as follows: + +[***] + +Each Approval Buy-Out Payment will be payable in one installment in cash at the closing to an account specified by SFJ. The discount rate used to calculate each Approval Buy-Out Payment shall be [***] percent ([***]%). + +6.7.2 Change of Control Buy-Out Option. Within one hundred and twenty (120) days following the closing of a Change of Control, PB or its successor shall have the right to make a one-time payment (the "Change of Control Buy-Out Payment") in lieu of all (but not less than all) remaining Approval Payments for the applicable country(ies) in which Regulatory Approval has been received as of the date of closing of such Change of Control, provided that SFJ has not previously assigned the right to receive the Approval Payments to a Third Party, in which event PB or its successor shall not have such right. To exercise its right to make the Change of Control Buy-Out Payment, PB or its successor shall provide written notice to SFJ (the "Change of Control Buy-Out Notice") no later than [***] after the date of closing of such Change of Control, which written notice shall set forth the amount of the applicable Change of + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +Control Buy-Out Payment, the proposed date of closing of the buy-out (which shall occur within [***] after the date of closing of such Change of Control), and the calculation of the Change of Control Buy-Out Payment in reasonable detail based upon the proposed closing date of the buy-out. The Change of Control Buy-Out Payment will be calculated as follows: + +[***] + +The Change of Control Buy-Out Payment will be payable in one installment in cash at the closing to an account specified by SFJ. The discount rate used to calculate each Change of Control Buy-Out Payment shall be [***] percent ([***]%). For the avoidance of doubt, the Change of Control Buy-Out Payment shall only apply with regard to Approvals which have already been obtained prior to the Change of Control. + +ARTICLE 7 + +SECURITY INTEREST + +7.1 Grant of Security Interest. As security for the payment and performance of the PB Obligations, PB hereby grants to SFJ, effective upon PB's receipt of the Initial Development Cost Payment on the Initial Funding Date, a security interest in all of PB's right, title and interest (excluding any leasehold interest) in, to and under all of its property, wherever located and whether now existing or owned or hereafter acquired or arising, including all goods, accounts (including health-care receivables), equipment, inventory, contract rights or rights to payment of money, leases, license agreements, franchise agreements, general intangibles, intellectual property (including, for the avoidance of doubt, all PB Intellectual Property), commercial tort claims, documents, instruments (including any promissory notes), chattel paper (whether tangible or electronic), cash, deposit accounts, certificates of deposit, fixtures, letters of credit rights (whether or not the letter of credit is evidenced by a writing), securities, and all other investment property, supporting obligations, and financial assets, whether now owned or hereafter acquired, wherever located; and all of PB's books and records relating to the foregoing, and any and all claims, rights and interests in any of the above and all substitutions for, additions, attachments, accessories, accessions and improvements to and replacements, products, proceeds and insurance proceeds of any or all of the foregoing (collectively, the "SFJ Collateral"). Anything herein to the contrary notwithstanding, in no event shall the SFJ Collateral include, and PB shall not grant and shall not be deemed to have granted a security interest in, (1) any property to the extent that such grant of security interest is prohibited by any Applicable Law of a Governmental Authority or constitutes a breach or default under or results in the termination of or requires any consent not obtained under, any contract, license, agreement, instrument or other document evidencing or giving rise to such property, except to the extent that such Applicable Law or the term in such contract, license, agreement, instrument or other document providing for such prohibition, breach, default or termination or requiring such consent is ineffective under Section 9-406, 9-407, 9-408 or 9- 409 of the Uniform Commercial Code in effect in the State of Delaware (or any successor provision or provisions) of any relevant jurisdiction or any other Applicable Law (including bankruptcy or insolvency statutes) or principles of equity; provided, however, that such security interest shall attach immediately at such time as such Applicable Law + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +is not effective or applicable, or such prohibition, breach, default or termination is no longer applicable or is waived, and to the extent severable, shall attach immediately to any portion of the SFJ Collateral that does not result in such consequences or (2) any of PB's rights, title or interest in any of the outstanding voting capital stock or other ownership interests of a CFC in excess of 65% of the voting power of all classes of capital stock or other ownership interests of CFC entitled to vote. This Agreement shall create a continuing security interest in the SFJ Collateral which shall remain in effect until all PB Obligations (other than contingent indemnity obligations) have been paid or otherwise satisfied in full in accordance with this Agreement and/or, if applicable, the Program Transfer Agreement. Upon payment or other satisfaction of all PB Obligations (other than contingent obligation), SFJ shall, at the sole cost and expense of PB, release its Liens in the SFJ Collateral and all rights therein shall revert to PB. + +7.2 Priority of Security Interest. PB represents, warrants and covenants that, subject to fulfilment of PB's obligations under Section 7.4 and SFJ making any filings necessary to achieve such perfection, the security interest granted to SFJ pursuant to this ARTICLE 7 (the "SFJ Security Interest") on the Initial Funding Date shall be and shall at all times thereafter continue to be a first- priority perfected security interest in the SFJ Collateral (subject only to the lien of SVB arising under the SVB Loan Agreement, subject in all respects to the terms and conditions of the subordination agreement contemplated by Section 7.4 hereof, and other Permitted Liens that are permitted pursuant to the terms of this Agreement). + +7.3 Authorization to File Financing Statements. PB hereby authorizes SFJ to file, on or at any time from time to time after PB's receipt of the Initial Development Cost Payment on the Initial Funding Date, and PB shall execute and deliver to SFJ (as applicable), financing statements, amendments to financing statements, continuation financing statements, termination statements, security agreements relating to the SFJ Collateral constituting intellectual property, fixture filings (if applicable), notices and other documents and instruments, in form satisfactory to SFJ as SFJ may reasonably request, to perfect and continue perfected, maintain the priority of or provide notice of SFJ's security interest in the SFJ Collateral and to accomplish the purpose of this Agreement, without notice to PB, with all appropriate jurisdictions located within the United States and the Designated European Countries. Such financing statements may indicate the SFJ Collateral as substantially the same as the SFJ Collateral described in Section 7.1 or words of similar effect, or as being of an equal or lesser scope, or with greater detail, all in SFJ's reasonable discretion. + +7.4 Subordination to SVB Loan. On or before the Initial Funding Date, PB shall negotiate in good faith and enter into a subordination agreement with SVB and SFJ reflecting in all material respects the terms described on Exhibit P attached hereto, pursuant to which SFJ will subordinate to SVB all PB Obligations and all Liens in the SFJ Collateral in favor of SFJ of indebtedness of PB to SVB, which agreement shall (a) limit the aggregate principal amount of indebtedness of PB to SVB that will be senior to SFJ at [***], (b) include a provision pursuant to which in certain circumstances SFJ shall be entitled in its discretion to purchase or repay all obligations (other than contingent indemnity obligations) owing by PB to SVB arising under or in connection with the SVB Loan Agreement in exchange for a release of SVB's Liens on PB's assets, (c) include an obligation on the part of SFJ to, in connection with any refinancing or + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +replacement of the SVB Loan Agreement, enter into a new subordination agreement with a new lender(s) on terms and conditions that are taken as a whole not less favorable in any material respect to SFJ than those set forth in the subordination agreement to be entered into with SVB, and (d) otherwise be in form and substance reasonably satisfactory to SFJ. Upon the execution of such new subordination agreement with such new lender(s), references herein to "SVB" shall refer to such new lender(s), references herein to the "SVB Loan" shall refer to the loans provided by such new lender (provided that the aggregate principal amount of such loans shall not exceed [***]), references herein to the "SVB Collateral" shall refer to the collateral securing such new loan, and references herein to the "SVB Loan Agreement" shall refer to such loan and security agreement or similar document entered into with such new lender(s). + +7.5 Negative Covenants. + +7.5.1 Incurrence of Certain Indebtedness. PB shall not, without SFJ's prior written consent, create, incur, assume, or be liable for any Indebtedness, or permit any subsidiary of PB to do so, other than Permitted Indebtedness. + +7.5.2 Subordinated Debt. PB shall not (a) make or permit any payment on any Subordinated Debt, except to the extent permitted by the terms of the subordination, intercreditor, or other similar agreement to which such Subordinated Debt is subject, or (b) amend any provision in any document relating to Subordinated Debt which would provide for earlier or greater principal, interest, or other cash payments thereon, or materially adversely affect the subordination thereof to PB Obligations owed to SFJ. + +7.5.3 Encumbrances. PB shall not, without SFJ's prior written consent: + +7.5.3.1 create, incur, allow, or suffer any Lien on any of the PB Intellectual Property, or assign or convey any right to receive income with respect to the PB Intellectual Property (other than royalty and other license fee obligations to licensors thereof in accordance with the applicable license agreement), including the sale of any PB Intellectual Property, or permit any of its subsidiaries to do so, other than Liens in favor of SVB (subject in all respects to the terms and conditions of the subordination agreement contemplated by Section 7.4 hereof) and other Permitted Liens that are permitted pursuant to the terms of this Agreement; or + +7.5.3.2 except as and to the extent permitted by Section 7.5.6, enter into any agreement, document, instrument or other arrangement (except with or in favor of SFJ or SVB) with any Person which directly or indirectly prohibits or has the effect of prohibiting PB or any subsidiary of PB from assigning, mortgaging, pledging, granting a security interest in or upon or encumbering any proceeds from PB Intellectual Property. + +7.5.4 Distributions; Investments. PB shall not, without SFJ's prior written consent, (a) pay any dividends or make any distribution or payment on account of or redeem, retire or purchase any capital stock, provided that (i) PB may convert any of its equity convertible securities into other equity securities (or cash for partial shares) pursuant to the terms of such equity convertible securities or otherwise in exchange thereof, (ii) PB may pay dividends + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +solely in common stock, and (iii) PB may repurchase the stock of former employees or consultants pursuant to stock repurchase agreements, provided that the aggregate amount of all such repurchases does not exceed [***] Dollars ($[***]) per fiscal year; or (b) directly or indirectly make any Prohibited Investment (including, without limitation, by the formation of or through any subsidiary), or permit any of its subsidiaries to do so. For the avoidance of doubt, nothing in this Section 7.5.4 shall limit the ability of PB to pay or settle on conversion (in cash or equity) any convertible indebtedness. + +7.5.5 Licensing Transactions. PB shall have the right, without SFJ's consent, to enter into any Excluded Licensing Transaction. PB shall not, without SFJ's prior written consent, enter into a Licensing Transaction unless such Licensing Transaction is an Excluded Licensing Transaction (in which case such prohibition shall not apply and no such consent of SFJ shall be required); provided that SFJ shall only be entitled to withhold such consent as to a Licensing Transaction other than an Excluded Licensing Transaction in the event SFJ reasonably determines, and provides PB with written notice of its determination within [***] of PB providing to SFJ a non-binding term sheet or comparable document summarizing the material terms of the proposed Licensing Transaction [***], that PB entering into such Licensing Transaction would [***] ("Material Impact"). If PB disagrees with SFJ's determination, the matter shall be submitted to arbitration before a single neutral arbitrator under the American Arbitration Association's (AAA's) expedited arbitration rules, which arbitrator shall be mutually agreeable to both Parties and have significant expertise on the subject matter to be decided (provided that if the Parties have not mutually agreed on such arbitrator within [***] after the applicable demand for arbitration, the AAA shall designate such arbitrator), such arbitration to be concluded and the arbitrator's award to be rendered within [***] of the applicable demand for arbitration. The sole issue to be decided in the arbitration shall be whether the entry into such Licensing Transaction by PB would have a substantial likelihood of having a Material Impact. In the event the arbitrator agrees with SFJ, PB shall not be entitled to enter into such Licensing Transaction. In the event the arbitrator agrees with PB, PB shall be entitled to enter into the Licensing Transaction; [***], and, [***]. + +7.5.6 Sales of Royalty Streams. PB shall not sell, transfer or assign, directly or indirectly, in whole or in part, any rights to receive payments of royalties or license fees with respect to the Product or the PB Intellectual Property (including any Accounts with respect to such royalties or license fees), other than to a wholly owned direct or indirect subsidiary of PB (it being understood that the foregoing shall not restrict the creation of any Permitted Lien). + +7.5.7 Further Negative Pledges. PB shall not, from and after the Effective Date, enter into any agreement that prohibits or limits the ability of PB to create, incur, assume or suffer to exist any Lien upon any PB Intellectual Property (including any Accounts with respect to such royalties or license fees), whether now owned or hereafter acquired, to secure the PB Obligations, other than (a) agreements with SFJ (including this Agreement), (b) any agreements governing purchase money Liens or capital lease obligations otherwise permitted hereby (in which case, any such prohibition or limitation shall only be effective on the assets financed thereby), (c) customary restrictions on assignment contained in leases, licenses or other + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +agreements or (d) the SVB Loan Agreement and any loan documents entered into in connection therewith. + +7.6 Affirmative Covenants. PB shall do all of the following: + +7.6.1 Execution of Additional Security Agreements and Other Further Assurances. + +7.6.1.1 PB shall, upon request of SFJ from time to time hereafter, execute such security agreements, stock pledge agreements, deposit account control agreements, and take such further action, as reasonably required to perfect or continue the SFJ Security Interest or to effect the purposes of this ARTICLE 7, including without limitation by taking the following actions: + +(a) (i) PB shall execute and deliver to SFJ, promptly upon PB's receipt of the Initial Development Cost Payment on the Initial Funding Date, such patent and trademark security agreements as SFJ may reasonably request, in each case in form and substance reasonably acceptable to SFJ (each an "IP Security Agreement"), and shall record such agreements with the U.S. Patent and Trademark Office, and shall take such other action as may be necessary or as SFJ may reasonably request to perfect SFJ's security interest in any Intellectual Property of PB in existence as of the Effective Date constituing SFJ Collateral. (ii) Within [***] of the last day of [***], PB shall notify SFJ in writing of [***], and [***]. + +(b) No later than [***] after PB's receipt of the Initial Development Cost Payment on the Initial Funding Date, PB shall deliver to SFJ fully executed deposit account control agreements or securities account control agreements, as applicable, in favor of SFJ in form and substance reasonably satisfactory to SFJ with respect to all deposit accounts (as such term is defined in the UCC, each a "Deposit Account") and securities accounts (as such term is defined in the UCC, each a "Securities Account" and collectively with any Deposit Account, each a "Collateral Account") maintained within the United States by PB, including without limitation the Collateral Accounts set forth on Schedule 7.6.1.1(b) to that certain disclosure letter, dated as of the Effective Date, delivered by PB to SFJ (the "Disclosure Letter"). PB represents and warrants to SFJ that, as of the Effective Date, it maintains no Collateral Accounts other than the Collateral Accounts described on Schedule 7.6.1.1(b) to the Disclosure Letter. In addition to and without limiting the foregoing, PB shall provide SFJ with [***] prior written notice before establishing any additional Collateral Account at or with any bank or financial institution. For each such additional Collateral Account that PB at any time maintains after PB's receipt of the Initial Development Cost Payment on the Initial Funding Date, PB shall cause the applicable bank or financial institution at or with which any Collateral Account is maintained to execute and deliver a deposit account control agreement, securities account control agreement or other appropriate instrument with respect to such account to perfect SFJ's Lien in such account in accordance with the terms hereunder within [***] after the opening of each such account (or, if later, [***] after PB's receipt of the Initial Development Cost Payment on the Initial Funding Date), which agreement may not be terminated without the prior written consent of SFJ. The provisions of this Section 7.6.1.1(b) shall not apply to deposit accounts exclusively used for payroll, payroll taxes, and other employee wage and benefit + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +payments to or for the benefit of SFJ employees and identified to SFJ by PB as such. Except to the extent permitted by the preceding sentence, PB shall [***]: + +(i) [***] prior to [***]; + +(ii) [***] after [***]; and + +(iii) [***] after [***]. + +For the avoidance of doubt, the Parties agree that [***]. + +7.6.1.2 PB shall obtain such consents from SVB and WestRiver Innovation Lending Fund VIII, L.P. as are required by the SVB Loan Agreement to grant a security interest in the SFJ Collateral to SFJ and to incur the PB Obligations as set forth herein (the "SVB Consent"). The failure of PB to obtain the SVB Consent within [***] of the Effective Date shall be deemed to be a Material Adverse Event. + +7.6.2 Government Compliance. + +7.6.2.1 Maintain its and all its subsidiaries' legal existence and good standing in their respective jurisdictions of formation and maintain qualification in each jurisdiction in which the failure to so qualify would reasonably be expected to have a material adverse effect on PB's business or operations, provided that any subsidiary may liquidate or dissolve so long as such liquidation or dissolution would not reasonably be expected to have a material adverse effect on PB's consolidated business or operations, and provided that in connection with such liquidation or dissolution all assets and property of any such subsidiary shall be transferred to PB or another subsidiary of PB. PB shall comply, and shall cause each subsidiary to comply, in all material respects, with all laws, ordinances and regulations to which it is subject noncompliance with which would reasonably be expected to have a material adverse effect on PB's business. + +7.6.2.2 Obtain all of the Governmental Approvals, if any, necessary for the grant of a security interest to SFJ in the SFJ Collateral. + +7.6.3 Regulatory Compliance. PB shall not become an "investment company" or a company "controlled" by an "investment company" under the Investment Company Act of 1940, as amended. PB shall not become engaged as one of its important activities in extending credit for margin stock (under Regulations X, T and U of the Federal Reserve Board of Governors). Neither PB's nor any of its Subsidiaries' properties or assets shall be used by PB or any Subsidiary in disposing, producing, storing, treating, or transporting any hazardous substance other than legally. PB and each of its subsidiaries shall obtain all consents, approvals and authorizations of, make all declarations or filings with, and give all notices to, all Governmental Authorities that are necessary to continue their respective businesses as currently conducted, unless such failure could not reasonably be expected to have a material adverse effect on PB's business. + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +7.6.4 Protection of Intellectual Property Rights. PB shall use Commercially Reasonable Efforts in the exercise of its business judgment to prosecute, protect, defend and maintain the validity and enforceability of the PB Intellectual Property. + +7.6.5 Acceleration. In the event that, following an applicable Regulatory Approval, PB shall fail to make any Approval Payment associated with such Regulatory Approval within [***] of the due date therefor in accordance with ARTICLE 6, all remaining unpaid Approval Payments that are based on such Regulatory Approval shall become immediately due and payable; provided that, in the event of any such acceleration, SFJ's rights to receive such Approval Payments, if any, shall be adjusted as set forth in Section 6.2 and reduced by any amounts previously paid to SFJ. + +7.7 Certain Defined Terms. As used in this ARTICLE 7 and elsewhere in this Agreement: + +7.7.1 "PB Obligations" means all indebtedness, liabilities and other obligations of PB to SFJ under or in connection with this Agreement and any other documents executed in connection herewith, including, without limitation, all amounts payable to SFJ pursuant to ARTICLE 6 hereof, all interest accrued thereon, all fees and all other amounts payable by PB to SFJ thereunder or in connection therewith, whether now existing or hereafter arising, and whether due or to become due, absolute or contingent, liquidated or unliquidated, determined or undetermined, and including interest that accrues after the commencement by or against PB of any bankruptcy or insolvency proceeding naming such individual or entity as the debtor in such proceeding, and including performing the PB Services but excluding obligations under the Warrant. + +7.7.2 "Contingent Obligation" is, for any Person, any direct or indirect liability, contingent or not, of that Person for (a) any indebtedness, letter of credit or other Indebtedness of another Person, in each case, directly or indirectly guaranteed, endorsed or co-made by that Person, or for which that Person is directly or indirectly liable; (b) any obligations for undrawn letters of credit for the account of that Person; and (c) all obligations from any interest rate, currency or commodity swap agreement, interest rate cap or collar agreement, or other agreement or arrangement designated to protect a Person against fluctuation in interest rates, currency exchange rates or commodity prices, but only to the extent such transaction is entered into for speculative purposes (and not to mitigate any risk to which PB or any subsidiary is subject). The amount of a Contingent Obligation is the stated or determined amount of the primary obligation for which the Contingent Obligation is made or, if not determinable, the maximum reasonably anticipated liability for it determined by the Person in good faith; but the amount may not exceed the maximum of the obligations under any guarantee or other support arrangement. + +7.7.3 "Indebtedness" means (a) indebtedness for borrowed money or the deferred price of property or services (excluding accounts payable incurred in the ordinary course of business, earn-out or similar obligations with respect to deferred purchase price and deferred compensation), (b) obligations evidenced by notes, bonds, debentures or similar instruments, (c) capital lease obligations (as such term is understood under GAAP as in effect on + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +the date of this Agreement, but excluding obligations treated as operating leases prior to adoption of changes described by ASC Topic 842) and (d) Contingent Obligations. + +7.7.4 "Investment" means any beneficial ownership interest in any Person (including stock, partnership interest or other securities), and any loan, advance or capital contribution to any Person. + +7.7.5 "Lien" means a mortgage, deed of trust, levy, charge, pledge, security interest or other encumbrance of any kind, whether voluntarily incurred or arising by operation of law or otherwise against any property. + +7.7.6 "Permitted Indebtedness" means: + +7.7.6.1 PB Obligations; + +7.7.6.2 Indebtedness owed to SVB pursuant to the SVB Loan Agreement, subject in all respects to the terms and conditions of the subordination agreement contemplated by Section 7.4 hereof; + +7.7.6.3 Subordinated Debt; + +7.7.6.4 unsecured Indebtedness; + +7.7.6.5 Indebtedness incurred as a result of endorsing negotiable instruments received in the ordinary course of business; + +7.7.6.6 Indebtedness secured by Liens permitted under subsections 7.7.7.1 and 7.7.7.3 of the definition of "Permitted Liens" hereunder; + +7.7.6.7 Letters of credit issued for the payment of purchase obligations for equipment, materials and inventory and for the payment of equipment and real estate lease obligations (including security deposits in connection therewith); and + +7.7.6.8 Other Indebtedness not to exceed [***] in the aggregate at any time outstanding. + +7.7.7 "Permitted Liens" means: + +7.7.7.1 Liens in favor SVB pursuant to the SVB Loan Agreement (subject in all respects to the terms and conditions of the subordination agreement contemplated by Section 7.4 hereof) and Liens in favor of SFJ; + +7.7.7.2 Liens for taxes, fees, assessments or other government charges or levies, either (i) not due and payable or (ii) being contested in good faith and for which PB maintains adequate reserves on its books and records, provided that no notice of any such Lien has been filed or recorded under the IRC; + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +7.7.7.3 Purchase money Liens or capital leases (i) on equipment acquired or held by PB incurred for financing the acquisition of the equipment securing no more than [***] in the aggregate amount outstanding, or (ii) existing on equipment when acquired, if the Lien is confined to the property and improvements and the proceeds of the equipment; + +7.7.7.4 Leases or subleases of real property granted in the ordinary course of PB's business (or, if referring to another Person, in the ordinary course of such Person's business), and leases, subleases, non-exclusive licenses or sublicenses of personal property (other than Intellectual Property) granted in the ordinary course of PB's business (or, if referring to another Person, in the ordinary course of such Person's business), if the leases, subleases, licenses and sublicenses do not prohibit granting SFJ a security interest therein; + +7.7.7.5 Interests of lessors and licensors under leases and licenses to PB of real property and personal property; + +7.7.7.6 The Existing Licenses; + +7.7.7.7 Excluded Licensing Transactions; + +7.7.7.8 Liens of carriers, warehousemen, suppliers, or other Persons that are possessory in nature arising in the ordinary course of business so long as such Liens attach only to inventory, securing liabilities in the aggregate amount which are not delinquent or remain payable without penalty or which are being contested in good faith and by appropriate proceedings which proceedings have the effect of preventing the forfeiture or sale of the property subject thereto; + +7.7.7.9 Liens to secure payment of workers' compensation, employment insurance, old-age pensions, social security and other like obligations incurred in the ordinary course of business (other than Liens imposed by ERISA); + +7.7.7.10 Liens arising from attachments or judgments, orders, or decrees occurring after the Effective Date in circumstances not constituting or arising from a Fundamental Breach by PB; + +7.7.7.11 Liens in favor of financial institutions arising in connection with PB's deposit and/or securities accounts held at such institutions, provided that SFJ has a first priority perfected security interest in the amounts held in such deposit and/or securities accounts; + +7.7.7.12 Liens incurred in the extension, renewal or refinancing of the indebtedness secured by Liens described in Sections 7.7.7.1 through 7.7.7.11 (excluding Liens securing the SVB Loan, solely to the extent of any obligations thereunder permitted in accordance with the terms and conditions of the subordination agreement contemplated by Section 7.4 hereof), but any extension, renewal or replacement Lien must be limited to the property encumbered by the existing Lien and the principal amount of the indebtedness may not increase; + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +7.7.7.13 Deposits securing bids or contracts; + +7.7.7.14 Liens securing the payment of purchase obligations for equipment, materials and inventory and for the payment of equipment and real estate lease obligations (including security deposits in connection therewith); and + +7.7.7.15 Other Liens securing liabilities in an aggregate amount not to exceed [***]. + +7.7.8 "Prohibited Investment" means: + +7.7.8.1 Investments in equity interests including convertible notes of privately held companies (other than wholly owned subsidiaries of PB and, where Applicable Law prevents whole ownership, other than subsidiaries that are wholly owned by PB except for nominal Third Party ownership that is required under Applicable Law); + +7.7.8.2 Investments in or purchases of any real property (excluding real property to be occupied or used by PB or its subsidiaries) commercial or residential mortgages or mortgage backed securities; + +7.7.8.3 Investments in auction rate securities, corporate high yield bonds (i.e. less than BBB quality), precious metals, derivatives including margin trades, options, futures, options on futures, short sales, forward contracts, swaps, repurchase agreements and reverse repurchase agreements (but excluding, in each case, interest rate, currency or commodity swap agreements, interest rate caps or collar agreements, or other agreements or arrangements designed to protect a Person against fluctuation in interest rates, currency exchange rates or commodity prices not entered into for speculative purposes); and + +7.7.8.4 [***]. + +7.7.9 "SFJ Collateral" has the meaning set forth in Section 7.1. + +7.7.10 "Subordinated Debt" means indebtedness incurred by PB that is subordinated to any PB Obligations (pursuant to a subordination, intercreditor, or other similar agreement in form and substance reasonably satisfactory to SFJ entered into between SFJ and the other creditor), on terms reasonably acceptable to SFJ. + +ARTICLE 8 + +WARRANT ISSUANCE + +8.1 Warrant Issuance. PB shall issue to SFJ on the Effective Date a warrant ("Warrant") exercisable for two million two hundred thousand (2,200,000) shares of PB common stock ("Stock") at an exercise price per share ("Exercise Price") equal to the greater of (a) five dollars ($5.00) or (b) 120% of the volume weighted average closing price of the Stock over the thirty (30) consecutive trading days ending on the last trading day immediately preceding the Effective Date and exercisable as follows: (i) one million one hundred thousand (1,100,000) + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +shares may be exercised at any time after the Effective Date provided that any such shares may be transferred by SFJ to its Affiliates but may not be resold by SFJ or its Affiliates until one (1) year after the Effective Date and (ii) one million one hundred thousand (1,100,000) shares may be exercised at any time after the date of Successful Phase 3 Interim Analysis. + +8.2 Form of Warrant. The Warrant shall in the form attached hereto as Exhibit H, shall have a term of ten (10) years, and shall contain "net-exercise" issuance provisions. + +ARTICLE 9 + +RECORDS + +9.1 Accounting. Each Party will maintain materially complete and accurate accounting records related to this Agreement in accordance with GAAP. Each Party will retain such records for [***] after the earlier of expiration or early termination of this Agreement. + +9.2 Clinical Trials-Related Records. Each Party shall, and shall cause its Affiliates and its and their Permitted Third Parties conducting Development of the Product to, maintain, in good scientific manner, complete and accurate books and records pertaining to Development of the Product hereunder, in sufficient detail to verify compliance with its obligations under this Agreement. Such books and records shall (a) be appropriate for patent and regulatory purposes, (b) be in compliance with Applicable Law, (c) properly reflect all work done and results achieved in the performance of its Development activities hereunder, and (d) be retained by such Party for such period as may be required by Applicable Law. + +ARTICLE 10 + +CONFIDENTIAL INFORMATION + +10.1 Confidentiality. Except to the extent expressly authorized by this Agreement or otherwise agreed in writing by the Parties (including, if applicable, in the Program Transfer Agreement), each Party (each, a "Receiving Party") agrees that, during the Term and for the [***] period following the expiration or termination of this Agreement (except that the obligations will survive thereafter with respect to any Confidential Information that constitutes a trade secret under Applicable Law) or such longer periods for which such Confidential Information may be maintained pursuant to ARTICLE 9, it will keep confidential and will not publish or otherwise disclose and will not use for any purpose other than as provided for in this Agreement or, if applicable, the Program Transfer Agreement (which includes the exercise of any rights or the performance of any obligations hereunder or thereunder) any Confidential Information furnished to it by or on behalf of the other Party (each, a "Disclosing Party") or its Affiliates in connection with this Agreement or, if applicable, the Program Transfer Agreement. The foregoing obligations will not apply to any portion of such information or materials that the Receiving Party can demonstrate: + +10.1.1 was publicly disclosed by the Disclosing Party before or after such Confidential Information becomes known to the Receiving Party; + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +10.1.2 was already known to the Receiving Party or any of its Affiliates, other than under an obligation of confidentiality or non-use, prior to when it was received from the Disclosing Party; + +10.1.3 is subsequently disclosed to the Receiving Party or any of its Affiliates by a Third Party lawfully in possession thereof without obligation to keep such Confidential Information confidential; + +10.1.4 has been published by a Third Party or otherwise enters the public domain through no fault of the Receiving Party or any of its Affiliates in breach of this Agreement; or + +10.1.5 has been independently developed by the Receiving Party or any of its Affiliates, without the aid, application or use of any Confidential Information of the other Party. + +10.2 Authorized Disclosure. Each Party may disclose Confidential Information belonging to the other Party to the extent such disclosure is reasonably necessary for complying with Applicable Laws, including regulations promulgated by securities exchanges, provided that the Party required to disclose such information promptly notifies the Disclosing Party prior to making any such disclosure and cooperates with the Disclosing Party's efforts to seek confidential treatment or to otherwise limit disclosure. Each Receiving Party may disclose the other Party's Confidential Information to its Affiliates, employees, agents, advisors, and independent contractors (including Permitted Third Parties) engaged by such Receiving Party, in each case (a) only to the extent such Persons need to know the Confidential Information solely in connection with the performance of this Agreement or, if applicable, the Program Transfer Agreement and (b) provided that each Person receiving Confidential Information must be bound by obligations of confidentiality and non-use at least as stringent as an equivalent in scope to those set forth in this ARTICLE 10 prior to any such disclosure and the Party making such disclosure to such Person shall be liable to the other Party for any breach of such obligations by such disclosee. PB may disclose SFJ Confidential Information to MedImmune as necessary to comply with PB's obligations or exercise PB's rights under the AZ License (it being understood that any such disclosure will be made under the terms of Article 6 of the AZ License and that PB shall not be required to enter into any further confidentiality agreement with MedImmune for such purpose). Each Party may also disclose the material terms of this Agreement (including the form of Program Transfer Agreement) or provide a copy of this Agreement or a summary of such Party's findings during its due diligence investigation of the Products (if applicable) to any bona fide potential or actual investor, investment banker, acquirer, provider of debt or royalty financing, or other potential or actual financial partner without consent of the other Party, and provided that in connection with such disclosure, each disclosee must be bound by obligations of confidentiality and non-use at least as stringent as an equivalent in scope to those set forth in this ARTICLE 10 prior to any such disclosure and the Party making such disclosure to such disclosee shall be liable to the other Party for any breach of such obligations by such disclosee. Notwithstanding anything in the foregoing to the contrary, Exhibit D constitutes PB's Confidential Information and not SFJ's Confidential Information, and PB may disclose Exhibit D to Third Parties as determined by PB in its sole discretion. In any event, each Party agrees to + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +take all reasonable action to avoid unauthorized use or disclosure of Confidential Information of the other Party hereunder. + +10.3 Return of Confidential Information. Except as otherwise provided herein, upon expiration or earlier termination of this Agreement, all Confidential Information (including any copies thereof) in written or other tangible form will, at the Disclosing Party's direction, be returned to the Disclosing Party or destroyed by the Receiving Party, and any Person(s) to whom the Receiving Party disclosed (with such destruction being certified in writing by an authorized officer of the Receiving Party), except (i) to the extent such Confidential Information is necessary to exercise any license and/or rights hereunder that survive such expiration or earlier termination; and (ii) one (1) copy of each document may be retained by the Receiving Party solely to the extent necessary to permit it to comply with any ongoing rights and responsibilities with respect to such Confidential Information. + +10.4 MedImmune Confidential Information. With respect to any Confidential Information of PB that constitutes MedImmune Confidential Information, SFJ hereby agrees to be bound by the provisions of Sections 6.1, 6.2 and 6.7 of the AZ License to the same extent as PB is. + +10.5 Confidential Status of the Agreement. Subject to Section 10.2 and Section 10.6, the terms of this Agreement, including the form of Program Transfer Agreement (whether or not executed by the Parties), are deemed to be Confidential Information and will be subject to the confidentiality requirements of this ARTICLE 10, with each Party being deemed a Receiving Party for such purposes. The Parties each acknowledge that it will be necessary for PB to file this Agreement with the US Securities and Exchange Commission and to make other required public disclosures regarding the terms of this Agreement, and accordingly PB shall prepare a confidential treatment request in connection with such filing and provide SFJ a reasonable opportunity to review and comment on such filing as well as on such other required public disclosures and thereafter use Commercially Reasonable Efforts to obtain confidential treatment as to the terms of this Agreement. + +10.6 Publicity. The Parties recognize that following the Effective Date the Parties (either individually or jointly) shall issue mutually agreed press release(s) announcing the execution of this Agreement, and thereafter each Party may from time to time desire to issue additional press releases and make other public statements or disclosures regarding the subject matter of this Agreement, and hereby agree that such additional press releases, public statements and disclosures regarding the terms of this Agreement will be permitted only with the other Party's written consent (which shall not be unreasonably withheld, conditioned or delayed). Any publication, news release or other public announcement relating to the terms of this Agreement will first be reviewed and approved in writing by both Parties; provided, however, that any disclosure of the minimum information which is required by Applicable Law (including the rules of a securities exchange), as reasonably advised by the disclosing Party's counsel, may be made without the prior consent of the other Party, although the other Party will be given prompt notice of any such legally required disclosure and to the extent practicable will be provided an opportunity to comment on the proposed disclosure and the disclosing Party will consider in + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +good faith any comments provided by the other Party on such proposed disclosure. For avoidance of doubt, this Section 10.6 shall not restrict PB from releasing public statements or disclosures regarding PB's development and Commercialization activities with respect to the Product. + +10.7 Use of Name. Unless otherwise expressly permitted herein, PB will obtain the written consent of SFJ (which consent will not unreasonably be withheld, conditioned or delayed) prior to referring to SFJ in any correspondence with any Regulatory Authority or Governmental Authority, except as may be required by Applicable Law. SFJ agrees to be bound by Section 6.3 of the AZ License to the same extent as PB is. + +ARTICLE 11 + +INTELLECTUAL PROPERTY AND PERSONALLY IDENTIFIABLE INFORMATION + +11.1 Ownership and Rights. + +11.1.1 Ownership. + +11.1.1.1 Existing Intellectual Property. Subject to Section 11.1.1.2, it is agreed between the Parties that each Party will retain all right, title and interest in, to and under all Intellectual Property that is Controlled by such Party as of the Effective Date. + +(a) Without limiting the generality of the foregoing, as between the Parties, PB shall be and remain the sole and exclusive owner of all right, title and interest in and to all PB Intellectual Property existing as of the Effective Date ("Existing PB Intellectual Property"), including, in the case of Patents within the Existing PB Intellectual Property ("Existing PB Patents"), all patent applications filed after the Effective Date that claim priority to, or are foreign counterparts of, patent applications within the Existing PB Patents ("Corresponding PB Patent Applications") and all Patents that may issue or be granted from any patent application within the Existing PB Patents or any Corresponding PB Patent Application after the Effective Date. In addition, PB shall be and remain the sole and exclusive owner of all right, title and interest in and to all PB Intellectual Property arising during the term of this Agreement independent of the conduct of the activities contemplated by this Agreement. + +(b) SFJ acknowledges that the PB Intellectual Property includes Licensed Know-How and Licensed Patents licensed to PB pursuant to, and subject to the terms and conditions of, the AZ License. SFJ further acknowledges and agrees that, as required by the AZ License, MedImmune shall own and retain all right, title and interest in and to any and all Licensed Know-How and Licensed Patents (including Patents that become Licensed Patents pursuant to the last two sentences of Section 5.1.2 of the AZ License). SFJ shall, and hereby does, assign to MedImmune and will cause each of its officers, directors, employees and Affiliates, and its and their respective Permitted Third Parties, to assign to MedImmune all right, title and interest in and to all Patents filed by or on behalf of PB claiming any Licensed Know-How, without additional compensation, as is necessary to fully effect the + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +sole ownership provided for in the second sentence of this Section 11.1.1.1(b). In the event of any conflict between the terms of this Agreement (including the form of Program Transfer Agreement) and the terms of the AZ License, in each case, as applicable to Licensed Know-How or Licensed Patents, the terms of the AZ License shall prevail. + +11.1.1.2 MedImmune Intellectual Property. + +(a) SFJ acknowledges and agrees that, as required by the AZ License, MedImmune shall own and retain all right, title and interest in and to any and all AstraZeneca Product Improvements, AstraZeneca Product Know-How and AstraZeneca Product Patents. SFJ shall, and hereby does, assign to MedImmune and will cause each of its officers, directors, employees and Affiliates, and its and their respective Permitted Third Parties, to assign to MedImmune all right, title and interest in and to all (i) AstraZeneca Product Improvements that are conceived, discovered, developed or otherwise made by or on behalf of SFJ or any of its Affiliates (including by any of their respective Third Party contractors), (ii) AstraZeneca Product Know-How generated by or on behalf of SFJ or any of its Affiliates (including by any of their respective Third Party contractors), and (iii) AstraZeneca Product Patents claiming any such AstraZeneca Product Improvement(s) or AstraZeneca Product Know-How; in each case, without additional compensation, as is necessary to fully effect the sole ownership provided for in the first sentence of this Section 11.1.1.2(a). + +(b) SFJ shall cause each employee, individual consultant and Third Party contractor that SFJ or its Affiliate proposes to engage to conduct any Clinical Trial activity under or in connection with this Agreement (including, if applicable, in connection with the Program Transfer Agreement) on its behalf who conceives, discovers, develops or otherwise makes any AstraZeneca Product Improvement under or in connection with activities conducted pursuant to this Agreement to be under an obligation to assign to PB their rights in any such AstraZeneca Product Improvement, so that PB may comply with its obligations with respect to AstraZeneca Improvements, AstraZeneca Product Know-How and AstraZeneca Product Patents under the AZ License. If (i) SFJ is unable to cause any such Third Party contractor or consultant (including any contractor who is, or a consultant who is employed by, a governmental, not-for-profit, or public institution that has standard policies against such an assignment) to agree to such assignment obligation with respect to AstraZeneca Product Improvements despite SFJ's using commercially reasonable efforts to negotiate such assignment obligation, or (ii) Applicable Law would prohibit SFJ from requiring such an assignment from such Third Party contractor or consultant, in each case ((i) and (ii)), SFJ and its Affiliates shall refrain from using such Third Party contractor or consultant to conduct activities pursuant to this Agreement unless PB obtains MedImmune's written consent thereto. + +(c) The Parties acknowledge and agree that in the event of any conflict between the terms of this Agreement and the terms of the AZ License, in each case, as applicable to AstraZeneca Product Improvements, AstraZeneca Product Know-How or AstraZeneca Product Patents, the terms of the AZ License shall prevail. + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +11.1.1.3 Trial Inventions. + +(a) PB shall be the exclusive and sole owner of, and retain all right, title and interest in and to, all Trial Inventions (which shall constitute PB Intellectual Property), regardless of inventorship. SFJ will promptly disclose, and will cause its Affiliates and all Permitted Third Parties engaged by SFJ or its Affiliates to perform any of SFJ's obligations hereunder promptly to disclose, to PB in writing in reasonable detail each Trial Invention made, developed, created, generated, conceived or reduced to practice in whole or in part by or on behalf of SFJ, such Affiliate or such Permitted Third Party, which written disclosure shall include all available information and data necessary to support the filing of patent applications Covering such Trial Invention. SFJ, for itself and on behalf of its Affiliates, hereby assigns, and shall cause such other Permitted Third Parties to assign (subject to Section 11.1.1.3(c)), to PB all its right, title and interest in and to Trial Inventions and all information and data necessary to support the filing of patent applications Covering such Trial Inventions. SFJ will cooperate, and will cause the foregoing Persons to cooperate, with PB to effectuate and perfect the foregoing ownership, including by promptly executing and recording assignments and other documents consistent with such ownership. + +(b) SFJ shall cause each employee and individual consultant of such SFJ or its Affiliates (but excluding Permitted Third Parties of SFJ and its Affiliates, which are separately addressed in Section 11.1.1.3(c)) who conceives, discovers, develops or otherwise makes any Trial Invention to be under an obligation to assign to PB their rights in any such Trial Invention. In the case of any individual consultant of SFJ or its Affiliates (excluding SFJ's and its Affiliates' Permitted Third Parties), if SFJ is unable to cause such consultant to agree to such assignment obligation despite SFJ's using commercially reasonable efforts to negotiate such assignment obligation, then SFJ shall either: (A) cause such consultant to grant an exclusive, worldwide, royalty-free, fully-paid, freely-assignable license, with the right to sublicense through multiple tiers, under their rights in such Trial Invention to develop, make, have made, use, sell, have sold, offer for sale and import the Product for any and all uses, except where Applicable Law requires otherwise and except in the case of consultants who are employed by governmental, not- for-profit, or public institutions that have standard policies against such an assignment (in which case, SFJ shall use commercially reasonable efforts to obtain a suitable license, or right to obtain such a license); or (B) refrain from using such consultant to conduct activities pursuant to this Agreement unless PB obtains MedImmune's written consent thereto. + +(c) SFJ shall use commercially reasonable efforts to obtain from each Third Party contractor that SFJ or its Affiliate proposes to engage to conduct activities under or in connection with this Agreement on behalf of SFJ or its Affiliates (i) an assignment, (ii) an exclusive, worldwide, royalty-free, fully-paid, freely-assignable license, with the right to sublicense through multiple tiers, or (iii) a non‑exclusive, worldwide, royalty-free, fully-paid, freely-assignable license, with the right to sublicense through multiple tiers ((i) through (iii) in order of preference), to PB of any Trial Invention that such Third Party contractor conceives, discovers, develops or otherwise makes in connection with activities conducted relating to this Agreement. The Parties acknowledge that it may not be possible to obtain such assignment or license from any such Third Party contractor with respect to technology of broad applicability to + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +the operation of such Third Party contractor's business or improvements, or improvements to such Third Party contractor's own proprietary technology used in the performance of services on behalf of SFJ or its Affiliate, in each case, on acceptable terms or at all, and accordingly, the Parties agree that the inability of SFJ or its Affiliate, despite the use of commercially reasonable efforts, to obtain such assignment or license from a Third Party contractor on acceptable terms or at all shall not constitute a breach of SFJ's obligations under this Agreement. + +11.1.1.4 Trial Data Package. SFJ shall be the sole and exclusive owner of the Trial Data Package including the Research Results included therein. In consideration of the Approval Payments to be made under this Agreement (if and to the extent applicable), and in further consideration of the payment by PB to SFJ of [***], SFJ shall sell and transfer to PB, and PB shall acquire from SFJ, the sole and exclusive ownership, even as to SFJ, of the Trial Data Package including all Research Results as set forth below in this Section 11.1.1.4. Upon the earliest of (A) receipt of Regulatory Approval of the Product for the Indication in at least one of the US, the EU, any Designated European Country, Japan or China or (B) termination of this Agreement in accordance with any termination clause or section of this Agreement, in each case, PB and SFJ will promptly enter into the Trial Data Package Purchase Agreement attached hereto as Exhibit K, and PB will purchase, and SFJ will sell to PB, sole and exclusive ownership of all Research Results, including the Trial Data Package. + +11.1.1.5 Inventorship; Further Assurances. Inventorship of Trial Inventions will be determined according to the principles of US patent law. SFJ agrees to cooperate fully, to cause its Affiliates to cooperate fully, and to use Commercially Reasonable Efforts to cause its and their respective Permitted Third Parties to cooperate fully, in each case: (a) with PB in the preparation, filing, prosecution and maintenance of Patents Covering Trial Inventions; and (b) with MedImmune in the preparation, filing, prosecution and maintenance of Patents (x) Covering AstraZeneca Product Improvements described in clause (i) of Section 11.1.1.2(a) or AstraZeneca Product Know-How described in clause (ii) of Section 11.1.1.2(a) or (y) filed by or on behalf of PB claiming any Licensed Know-How. Such cooperation includes executing all papers and instruments, or requiring its employees, consultants and Permitted Third Parties, to execute such papers and instruments, so as to (i) effectuate (A) the ownership of AstraZeneca Product Improvements, AstraZeneca Product Know-How and AstraZeneca Product Patents set forth in Section 11.1.1.2, (B) the ownership of Patents that become Licensed Patents pursuant to the last two sentences of Section 5.1.2 of the AZ License as set forth in Section 11.1.1.1(b), and (C) the ownership of Trial Inventions set forth in Section 11.1.1.3(a), including Patents claiming or disclosing Trial Inventions, and (ii) enable (A) MedImmune to apply for and to prosecute patent applications claiming AstraZeneca Product Improvements and Patents that become Licensed Patents pursuant to the last two sentences of Section 5.1.2 of the AZ License in any country and (B) PB to apply for and to prosecute patent applications claiming Trial Inventions in any country. + +11.1.1.6 No Other Rights. The delivery or disclosure by or on behalf of PhaseBio to SFJ of any information or materials hereunder will not be construed to grant SFJ any rights or license to use any Intellectual Property Controlled by PB other than as necessary to comply with its obligations hereunder or as expressly set forth herein. Except as otherwise + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +expressly permitted in this Agreement, SFJ may not use, publish or otherwise disclose any Intellectual Property Controlled by PB without PB's prior written consent. + +11.2 Patent Prosecution. As between SFJ and PB, PB will have sole and exclusive right to prepare, file, prosecute and maintain all Patents within the PB Intellectual Property, including all Patents that cover the Trial Inventions, at its own expense (provided that PB shall use Commercially Reasonable Efforts to prosecute and maintain such Patents). At PB's request and expense (for reasonable out-of-pocket expenses), SFJ will reasonably cooperate with PB in preparing, filing, prosecuting, and maintaining such Patents. + +11.3 Intellectual Property Enforcement. + +11.3.1 PB Intellectual Property. PB will use Commercially Reasonable Efforts to enforce Intellectual Property Controlled by PB, including Intellectual Property that covers the Trial Inventions, against Third Party Infringements. + +11.3.2 Infringement of Third Party Rights. If either Party learns of Third Party allegations that it or the other Party or any of its or the other Party's Affiliates or Permitted Third Parties, have infringed, misappropriated or otherwise violated, or are infringing, misappropriating or otherwise violating, any Intellectual Property of a Third Party in connection with either the Clinical Trials or performing its obligations or duties hereunder, such Party will promptly notify the other Party. PB will have sole control and responsibility of, and discretion with respect to, such allegations and any related actions and/or litigation. + +11.4 Personally Identifiable Information. + +11.4.1 In conducting the Clinical Trials and its other obligations under this Agreement and, if applicable, the Program Transfer Agreement, each Party will comply, and will use Commercially Reasonable Efforts to require each applicable Permitted Third Party of such Party to comply, with Applicable Laws relating to privacy or data protection applicable to such Party or the Clinical Trials being conducted by or on behalf of such Party, including ensuring that all necessary (a) consents from Clinical Investigators, Subjects and any others from whom Personally Identifiable Information will be received are obtained; (b) regulatory notifications are filed in all countries for which Sites have been selected; and (c) approvals are obtained in all countries for which Sites have been selected, prior to collection or transfer of such Personally Identifiable Information. Without prejudice to the generality of the foregoing, each Party shall (i) work together with the other Party in good faith to ensure the information referred to in applicable laws and, if applicable, in particular Articles 13 and 14 of the General Data Protection Regulation (2016/679) ("GDPR") is made available to data subjects (as defined in the GDPR) in relation to the processing of their Personally Identifiable Information by either Party when acting as a data controller (as defined in the GDPR), and the information is in a concise, transparent, intelligible and easily accessible form, using clear and plain language as required by Article 12 of the GDPR; (ii) if either Party (the "Data Receiving Party") receives any complaint, notice or communication from a supervisory authority (as defined in the GDPR) which relates directly or indirectly to the other Party's (A) processing of the Personally Identifiable Information; or (B) potential failure to comply with the provisions of the GDPR, the Data Receiving Party shall, + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +to the extent permitted by law, promptly forward the complaint, notice or communication to the other Party and provide the other Party with reasonable co-operation and assistance in relation to the same; (iii) if a data subject makes a written request to a Party to exercise their rights in relation to their Personally Identifiable Information that concerns processing in respect of which the other Party is the data controller, that Party shall forward the request to the other Party promptly and in any event within [***] from the date on which it received the request and, upon the other Party's reasonable written request, provide that other Party with reasonable co-operation and assistance in relation to that request to enable the other to respond to such request and meet applicable timescales set out under the GDPR; (iv) if either Party becomes aware of a personal data breach (as defined in the GDPR), it shall notify the other Party without undue delay, and each Party shall co-operate with the other, to the extent reasonably requested, in relation to any notifications to supervisory authorities or to data subjects which either Party is required to make under the GDPR. + +11.4.2 Each Party will not process, and will use Commercially Reasonable Efforts to require each applicable Permitted Third Party of such Party to not process, any Personally Identifiable Information in a way that is contrary to Applicable Laws or any Informed Consent. + +11.4.3 Each Party will use Commercially Reasonable Efforts to maintain, and will use Commercially Reasonable Efforts to require each applicable Permitted Third Party of such Party to maintain, appropriate and sufficient technical and organizational security measures to maintain the confidentiality of Personally Identifiable Information and to protect such data against accidental or unlawful destruction or accidental loss, damage, alteration, unauthorized disclosure or access, in particular where such data is transmitted over a network. These technical and organizational security measures shall ensure a level of security appropriate to the risk, including, as appropriate, (a) pseudonymisation and encryption; (b) the ability to ensure the ongoing confidentiality, integrity, availability and resilience of processing systems and services; (c) the ability to restore the availability and access to the Personally Identifiable Information in a timely manner in the event of a physical or technical incident; and (d) a process for regularly testing, assessing and evaluating the effectiveness of those measures. + +11.4.4 Each Party shall notify the other Party of: (a) any unauthorized use or disclosure or breach of any Personally Identifiable Information promptly upon discovery of such occurrence; and (b) the transmittal of any related breach notification to any affected person, Governmental Authority or the media. Each Party will use Commercially Reasonable Efforts to require each applicable Permitted Third Party of such Party to notify the such Party of: (i) any unauthorized use or disclosure or breach of any Personally Identifiable Information promptly upon discovery of such occurrence and (ii) the transmittal of any related breach notification to any affected person, Governmental Authority or the media. + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +ARTICLE 12 + +INDEMNIFICATION AND INSURANCE + +12.1 Indemnification by Each Party. + +12.1.1 By SFJ. SFJ will indemnify and hold PB; its Affiliates and their respective officers, directors, employees and agents (the "PB Indemnified Parties"), harmless from any and all Losses, net of any related tax benefit actually realized in the same year as the payment or incurrence of such Losses or any prior year, arising or resulting from any Claims by a Third Party against any PB Indemnified Parties to the extent arising from (a) the gross negligence or willful misconduct of SFJ or any of its Affiliates or any of its or their respective Permitted Third Parties in performing SFJ's obligations under this Agreement or, if applicable, the Program Transfer Agreement; (b) SFJ's material breach of this Agreement or, if applicable, the Program Transfer Agreement; (c) any material breach of a Protocol by SFJ, or its Affiliate, or any of its or their respective Permitted Third Parties; (d) any breach by SFJ of any provision of the AZ License by which SFJ has agreed to be bound in this Agreement; (e) a physical injury or death of a subject that is caused by the subject's participation in any clinical trial conducted by or on behalf of SFJ or any of its Affiliates after a Program Transfer whether or not directly attributable to the Product(other than the Product manufactured by PB); and/or (f) from any after any Program Transfer, product liability claims resulting from the Commercialization of Product other than Product manufactured by PB by or on behalf of SFJ or any of its Affiliates, licensees or sublicensees; except to the extent that any of the foregoing (a) through (f) was caused by (i) the gross negligence or willful misconduct of any PB Indemnified Party, or (ii) material breach of this Agreement, or, if applicable, the Program Transfer Agreement, by PB. + +12.1.2 By PB. PB will indemnify and hold SFJ, its Affiliates, SFJ's investors and their respective officers, directors, employees and agents (the "SFJ Indemnified Parties"), harmless from any and all Losses, net of any related tax benefit actually realized in the same year as the payment or incurrence of such Losses or any prior year, arising or resulting from any Claims by a Third Party against any SFJ Indemnified Parties to the extent arising from (a) a Product supplied by PB; (b) a physical injury or death of a Subject that is caused by the Subject's participation in the Clinical Trials whether or not directly attributable to the Product (excluding any Clinical Trial conducted by or on behalf of SFJ or its Affiliate after a Program Transfer); (c) PB's gross negligence or willful misconduct in performing its obligations under this Agreement or, if applicable, the Program Transfer Agreement; (d) PB's material breach of this Agreement or, if applicable, the Program Transfer Agreement, (e) any material breach of a Protocol by PB, or its Affiliate, or of its or their respective Permitted Third Parties, (f) actual or alleged infringement of any Third Party's Intellectual Property by the Product or by either Party in performing its duties or obligations hereunder with respect to the Product; and (g) injuries sustained by Subjects in connection with the Clinical Trials, including Claims arising prior to the Effective Date based upon physical injury or death of a Subject in connection with the Clinical Trials, or from the Commercialization of the Product; except to the extent that any of the foregoing (a) through (g) were caused by (i) the gross negligence or willful misconduct of any + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +SFJ Indemnified Party, or (ii) material breach of this Agreement, or, if applicable, the Program Transfer Agreement by, SFJ. + +12.2 Indemnification Procedure. + +12.2.1 Notice of Claim. A Party believing that it is entitled to indemnification under Section 12.1.1 or 12.1.2 (an "Indemnified Party") will give prompt written notice (each, an "Indemnification Claim Notice") to the other Party (the "Indemnifying Party") upon receipt of notice of the commencement of any Claim for which indemnification may be sought, or if earlier, upon the assertion of any such Claim by a Third Party (it being understood and agreed, however, that the failure by an Indemnified Party to give notice of a Claim of a Third Party as provided in this Section 12.2.1 will not relieve the Indemnifying Party of its indemnification obligation under this Agreement except and only to the extent that such Indemnifying Party is actually prejudiced as a result of such failure to give notice). Each Indemnification Claim Notice will contain a description of the Claim and the nature and amount of the Loss (to the extent that the nature and amount of such Loss are known at such time). The Indemnified Party will furnish promptly to the Indemnifying Party copies of all papers and official documents received in respect of any Losses. + +12.2.2 Control of Defense. At its option, the Indemnifying Party may assume the defense of any Claim by giving written notice to the Indemnified Party within [***] after the Indemnifying Party's receipt of an Indemnification Claim Notice. The assumption of the defense of a Claim by the Indemnifying Party will not be construed as an acknowledgment that the Indemnifying Party is liable to indemnify the Indemnified Party in respect of the Claim, nor will it constitute a waiver by the Indemnifying Party of any defenses it may assert against the Indemnified Party's claim for indemnification. Upon assuming the defense of a Claim, the Indemnifying Party may appoint as lead counsel in the defense of the Claim any legal counsel selected by the Indemnifying Party that is reasonably satisfactory to the Indemnified Party. In the event the Indemnifying Party assumes the defense of a Claim, the Indemnified Party will promptly deliver to the Indemnifying Party all original notices and documents (including court papers) received by the Indemnified Party in connection with the Claim. Should the Indemnifying Party assume the defense of a Claim, the Indemnifying Party will not be liable to the Indemnified Party for any legal expenses subsequently incurred by such Indemnified Party in connection with the analysis, defense or settlement of such Claim. + +12.2.3 Right to Participate in Defense. Without limiting Section 12.2.2, the Indemnified Party will be entitled to (a) participate in, but not control, the defense of such Claim and to engage counsel of its choice for such purpose; provided, however, that such engagement will be at the Indemnified Party's own expense unless the engagement thereof has been specifically authorized by the Indemnifying Party in writing, and (b) control its defense of such Claim and to engage counsel of its choice for such purpose, at the expense of the Indemnifying Party, if the Indemnifying Party has failed to assume the defense and engage counsel in accordance with Section 12.2.2. + +12.2.4 Settlement. With respect to any Losses related solely to payment of money damages in connection with a Claim and that includes a complete and unconditional + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +release of the Indemnified Party, will not result in the Indemnified Party admitting liability, becoming subject to injunctive or other equitable relief that will otherwise adversely affect the business of the Indemnified Party in any manner, and as to which the Indemnifying Party will have acknowledged in writing the obligation to indemnify the Indemnified Party hereunder, the Indemnifying Party will have the sole right to consent to the entry of any judgment, enter into any settlement or otherwise dispose of such Loss, on such terms as the Indemnifying Party, in its sole discretion, will deem appropriate. With respect to all other Losses in connection with Claims, where the Indemnifying Party has assumed the defense of the Claim in accordance with Section 12.2.2, the Indemnifying Party will have authority to consent to the entry of any judgment, enter into any settlement or otherwise dispose of such Loss provided it obtains the prior written consent of the Indemnified Party (which consent will not be unreasonably withheld, conditioned or delayed). The Indemnifying Party will not be liable for any settlement or other disposition of a Loss by the Indemnified Party that is reached without the written consent of the Indemnifying Party (which consent will not be unreasonably withheld, conditioned or delayed). Regardless of whether the Indemnifying Party chooses to defend or prosecute any Claim, the Indemnified Party will not admit any liability with respect to, or settle, compromise or discharge, any Claim without the prior written consent of the Indemnifying Party, not to be unreasonably withheld or delayed. + +12.2.5 Cooperation. Regardless of whether the Indemnifying Party chooses to defend or prosecute any Claim, the Indemnified Party will reasonably cooperate in the defense or prosecution thereof and will furnish such records, information and testimony, provide such witnesses and attend such conferences, discovery proceedings, hearings, trials and appeals as may be reasonably requested in connection therewith. Such cooperation will include access during normal business hours afforded to the Indemnifying Party to, and reasonable retention by the Indemnified Party of, records and information that are reasonably relevant to such Claim, and making employees and agents available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder, and the Indemnifying Party will reimburse the Indemnified Party for all its reasonable out-of-pocket expenses in connection therewith. + +12.3 Insurance. + +12.3.1 Generally. Commencing as of the Effective Date and thereafter during the Development Term, and subject to Section 12.3.2 below, each Party will carry and maintain, at its own expense, insurance coverage of the kind and with liability limits that, at a minimum, satisfy the requirements of Section 12.3.2, to protect itself and the other Party against any claims or liabilities that may arise from the conduct of the Clinical Trials and all other rights and obligations hereunder with insurers with a minimum "A-" A.M. Best rating. Any deductibles for such insurance policies will be assumed by the insuring Party. Such insurance policies will be primary and non-contributing with respect to any other similar insurance policies available to other Party and their Affiliates. Prior to the Effective Date, and annually, at each anniversary of the Effective Date (unless, during such year, expiration of the applicable policy occurs first, in which case, on such expiration date), at a Party's written request the other Party will supply documentation of such insurance coverage via original certificates of insurance, if applicable. + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +Each Party will provide the other Party a minimum of [***] prior written notice if it is unable to obtain appropriate insurance coverage or if its coverage is canceled, unable to be renewed or materially changed. For clarity, any insurance coverage or the failure to maintain adequate insurance coverage does not limit or reduce a Party's liability under this Agreement. Each Party will ensure that no subcontractor, including any Permitted Third Party, will continue to perform the work unless such subcontractor is insured as deemed appropriate by the Party engaging the Permitted Third Party. + +12.3.2 Minimum Requirements. Commencing as of the start of the Clinical Trials and thereafter, during the Term (or longer if otherwise stated below), at a minimum, each Party will maintain the following types of insurance coverage at a minimum level that is the greater of (a) the highest minimum level required by Applicable Law in the countries in which the Clinical Trials and other obligations hereunder are being performed or (b) the following (to the extent different). + +12.3.2.1 Commercial General Liability: [***] dollars ($[***]) per occurrence; [***] dollars ($[***]) Product and Completed Operations aggregate, including Premises & Operations, Personal Injury, Product and Completed Operations; [***] dollars ($[***]) combined single limit on all owned, non-owned and hired vehicles of such Party. + +12.3.2.2 Umbrella Excess Liability: [***] dollars ($[***]) per occurrence. + +12.3.2.3 Clinical Trials Liability: [***] dollars ($[***]) per occurrence. PB will obtain such Clinical Trials Liability insurance on a global basis, and, if required, supplemented Clinical Trials Liability Insurance in the US, at its expense and SFJ will obtain supplemental Clinical Trials Liability insurance for the SFJ Territory and on a country specific basis in the European Clinical Trial Countries as required by Applicable Law at its expense, which will be considered Development Costs. Coverage must be maintained for as long as required by Applicable Law in each country after release of the last Subject from the Clinical Trials or where there is no legal requirement at least [***] after the termination of this Agreement. + +12.3.2.4 Professional Liability: Any subcontractor, including any Permitted Third Party, who provides professional services to such Party for the Clinical Trials, will obtain Professional Liability Insurance in lieu of Clinical Trial Insurance, with a minimum limit of [***] dollars ($[***]) per occurrence. Coverage must be maintained for at least [***] after the later of (i) expiration or early termination of this Agreement and (ii) release of the last Subject from the Clinical Trials. + +12.3.3 Additional Insured. Each Party will include the other Party and its Affiliates as additional insured parties on such Party's Clinical Trial Liability insurance, as set forth in Section 12.3.2.3 for [***] after the later of termination of this Agreement or release of the last Subject from the Clinical Trials. + +12.3.4 Product Liability Insurance. Prior to a Program Transfer, PB will be responsible for maintaining product liability insurance related to the Development and + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +Commercialization of the Product at its expense with SFJ to be named as an additional insured party. From and after a Program Transfer, SFJ will be responsible for maintaining product liability insurance related to the Development and Commercialization of the Product at its expense with PB to be named as an additional insured party. + +ARTICLE 13 + +REPRESENTATIONS AND WARRANTIES + +13.1 Representations, Warranties and Covenants of Both Parties. + +13.1.1 Each Party hereby represents and warrants that it has the requisite corporate power and authority to enter into this Agreement and that this Agreement constitutes a legal and valid obligation binding upon such Party, enforceable in accordance with its terms. + +13.1.2 Each Party hereby represents and warrants that it is not a party to any agreement that would prevent it from fulfilling its obligations under this Agreement. + +13.1.3 Each Party agrees, on behalf of itself and its Affiliates, and its and their respective officers, directors, employees, agents, representatives, consultants, and Permitted Third Parties engaged in connection with the subject matter of this Agreement ("Representatives"), that for the performance of its obligations hereunder: + +13.1.3.1 such Party, its Affiliates and its and their respective Representatives shall comply with the Anti- Corruption Laws and shall not take any action that will, or would reasonably be expected to, cause the other Party or its Affiliates to be in violation of any Anti-Corruption Laws; and + +13.1.3.2 such Party shall promptly provide the other Party with written notice of the following events: (a) upon becoming aware of any breach or violation by such Party, its Affiliate or any of its or their respective Representatives of any representation, warranty or undertaking set forth in Section 13.1.3.1, or (b) upon receiving a formal notification that it is the target of a formal investigation by a Governmental Authority for a Material Anti-Corruption Law Violation or upon receipt of information from any of its Representatives connected with this Agreement that any of them is the target of a formal investigation by a governmental authority for a Material Anti-Corruption Law Violation. + +13.1.4 Each Party certifies that neither it, nor its Affiliates, nor to its knowledge any Permitted Third Parties engaged by it to perform activities in relation to the Product are debarred under subsections 306(a) or (b) of the US Federal Food, Drug, and Cosmetic Act (US Generic Drug Enforcement Act of 1992; 21 USC 335a (a) or (b)), and that it has not and will not knowingly use in any capacity the services of any Person or Permitted Third Party debarred under this law to conduct the Clinical Trials. Each Party further certifies that neither it, nor any of its Affiliates are excluded from any federal health care program, including but not limited to Medicare and Medicaid. Each Party will notify the JSC immediately if either of these certifications needs to be amended in light of new information. + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +13.1.5 Each Party further covenants that it and its Permitted Third Parties have, or will have at the required times, such certifications, permits, and authorizations as are required to conduct the Clinical Trials and perform any and all of their obligations in connection with the Clinical Trials supervised by it. + +13.2 Additional PB Representations, Warranties and Covenants. + +13.2.1 Licensure, Registration and Accreditation. PB hereby represents and warrants that it is licensed, registered, or otherwise qualified in all material respects under all Applicable Laws to do business in each jurisdiction where such licenses, registrations or other qualifications are required. PB further represents and warrants that there has not been and covenants that there will not be during the Term any breach or default by PB under AZ License which has not been or will not be, as applicable, timely cured as permitted thereunder, and that the AZ License is and shall continue to be in full force and effect during the Term, except to the extent that such a breach, default or failure as to the AZ License would not have a material adverse effect on PB's ability to satisfy its obligations under this Agreement. During the Term, PB shall: (a) not take any action that would entitle MedImmune to terminate the AZ License pursuant to Section 9.2.3 thereof (b) take such actions as are necessary to cure any action by a Sublicensee (as defined in the AZ License) that would entitle MedImmune to terminate the AZ License; and (c) not mutually agree with MedImmune to terminate the AZ License, without the prior written consent of SFJ, to be given or withheld in its sole discretion. In addition, during the Term, PB shall not take any action to terminate the AZ License without providing [***] prior written notice to SFJ of PB's intent to terminate so that SFJ may, in its sole discretion, elect to obtain the Program Transfer, and if SFJ elects in writing within such [***] period to obtain the Program Transfer, then PB shall not terminate the AZ License but shall assign it to SFJ in accordance with the Program Transfer Agreement and in such event PB shall not be entitled to any royalty payments as set forth in Section 3 of the Program Transfer Agreement. + +13.2.2 Disclosure of Regulatory Notices and Communications. PB hereby represents and warrants that, as of [***] prior to the Effective Date, the regulatory communications and, if any, notices of inspection, inspection reports, warning letters and deficiency letters related to the Product made available by PB in the Data Room were true and complete copies of such documents. To the knowledge of PB, such documents comprise all material written regulatory communications related to Clinical Trials design or the chemistry, manufacturing or controls of the Product from all Regulatory Authorities in the possession of PB as of [***] prior to the Effective Date. + +13.2.3 CRO Inquiry. PB hereby represents and warrants that, up to and as at the Effective Date, after due inquiry to its CRO responsible for conducting the Clinical Trials, PB has not received any verbal or written notice of the occurrence of any Serious Safety Issue in the Clinical Trials. + +13.2.4 Compliance. PB represents and warrants that, prior to the Effective Date, (a) it has conducted all preclinical and clinical activities related to the development of the Product for the Indication in material compliance with Applicable Laws, and (b) to PB's knowledge, all Third Parties utilized by PB to perform any portion of the preclinical and clinical + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +activities have conducted such portion of such preclinical activities in material compliance with Applicable Laws. PB will manufacture or have manufactured the Product for the Clinical Trials in accordance with GMP. + +13.2.5 Intellectual Property. PB [***]. The development, manufacture and commercialization of the Product by PB [***]. There are no outstanding options, licenses or agreements of any kind granted by PB relating to the development, manufacture and commercialization of the Product. PB has not received any communications alleging that PB has violated or that the development, manufacture and commercialization of the Product would violate any of the patents, trademarks, service marks, trade names, copyrights, trade secrets or other proprietary rights of any Third Party. + +13.2.6 PB Data Provided as of the Effective Date. PB hereby represents and warrants that, up to and as of the Effective Date, (i) the CMC Information set forth in the Data Room is accurate in all material respects, (ii) the descriptions of, protocols for, and data and other results of, the Clinical Trials of the Product for the Indication conducted by or on behalf of PB set forth in the Data Room are accurate and complete in all material respects and there are no material omissions from such documents, data and other results that render such documents, data or other results materially misleading and (iii) the summaries of primary data regarding the Product and the Comparators set forth in the Data Room are accurate and complete in all material respects, and there are no material omissions from such summaries as so presented that render such summaries materially misleading. + +13.3 Outstanding Indebtedness. PB hereby represents and warrants that, as at the Effective Date, PB and its subsidiaries have no indebtedness for borrowed money other than indebtedness under the SVB Loan Agreement and obligations in respect of corporate credit cards. + +13.4 Contingent Liabilities. PB hereby represents and warrants that, except as reflected in PB's consolidated balance sheet for the quarter ended September 30, 2019 included its Quarterly Report on Form 10-Q for the quarter ended September 30, 2019, as of the Effective Date, PB and its subsidiaries do not have any Contingent Liabilities that would be required to be reflected on PB's balance sheet in accordance with GAAP except for (i) obligations in connection with this Agreement, and (ii) other Contingent Liabilities incurred in the ordinary course of business that are not material to the business of PB and its subsidiaries, taken as a whole. + +13.5 SFJ Representation, Warranty and Covenant. SFJ hereby represents, warrants and covenants that it will have, as and when needed, sufficient funds to satisfy its obligations hereunder. + +13.6 DISCLAIMER OF REPRESENTATIONS AND WARRANTIES. + +13.6.1 Each Party hereby agrees and understands that because the Clinical Trials and the Product are experimental in nature, the outcome is inherently uncertain and unpredictable. Each Party hereby agrees and understands that the other Party makes no + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +representation, guarantee or warranty, express or implied, regarding the outcome of the Clinical Trials (including achievement of the Phase 3 Success Criteria), any Research Results generated after the Effective Date, the ability to obtain Regulatory Approval or the patentability, legal protectability or usefulness of any Intellectual Property arising from the Clinical Trials. + +13.6.2 EXCEPT AS OTHERWISE SET FORTH IN THIS ARTICLE 13, NEITHER PARTY MAKES, AND EACH PARTY EXPRESSLY DISCLAIMS, ANY REPRESENTATION OR WARRANTY OF ANY KIND WITH RESPECT TO THE SUBJECT MATTER OF THIS AGREEMENT, EITHER ORAL OR WRITTEN, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, INCLUDING ANY REPRESENTATION OR WARRANTY REGARDING THE USE, RESULTS OR EFFICACY OF THE PRODUCT. + +ARTICLE 14 + +TERM AND TERMINATION + +14.1 Term. The term of this Agreement (the "Term") will commence on the Effective Date and will expire upon the earliest of (i) termination of this Agreement in accordance with Section 14.2, or (ii) the date of payment of the last Approval Payment due based on all applicable Regulatory Approvals which have been received. + +14.2 Termination. + +14.2.1 Termination for Breach. + +Either Party may terminate this Agreement immediately in the event of a material breach of this Agreement by the other Party provided that the breaching Party has received written notice from the non-breaching Party of such breach, specifying in the reasonable detail the particulars of the alleged breach and such breach has not been cured within [***] after the date of the relevant notice. The non-breaching Party shall have the right to pursue remedies it may have at law or equity for such breach, including the right to seek damages from the breaching Party. In the event that SFJ terminates this Agreement pursuant to this Section 14.2.1 then in exchange for purchasing the Trial Data Package including the Research Results included therein as set forth in Section 11.1.1.4, PB will pay SFJ, within [***] of the date of termination, an amount equal to three hundred percent (300%) of Development Costs paid or incurred by SFJ prior to such termination. Additionally, if PB elects to continue development of the Product and obtains Regulatory Approval following such termination, PB will remain obligated to pay any Approval Payments that become due and payable pursuant to ARTICLE 6 at such time as such payments become due and payable (if ever) (except to the extent PB pays any Buy-Out Payment(s) pursuant to Section 6.7), provided that each Approval Payment (or Buy-Out Payment, as applicable) shall be adjusted as set forth in Section 6.2, and reduced by the amount previously paid by PB to SFJ pursuant to this Section 14.2.1. + +In the event that PB terminates this Agreement pursuant to this Section 14.2.1 then, if PB elects to continue development of the Product and obtains Regulatory Approval following such termination, in exchange for purchasing the Trial Data Package including the Research Results + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +therein as set forth in Section 11.1.1.4, PB shall remain obligated to pay to SFJ any Approval Payments that become due and payable (if ever) pursuant to ARTICLE 6 (except to the extent of the amount of any Buy-Out Payment pursuant to Section 6.7), provided that such Approval Payments (or Buy-Out Payment paid by PB, as applicable) shall be adjusted as set forth in Section 6.2. + +Notwithstanding the foregoing, if PB terminates this Agreement pursuant to this Section 14.2.1 above based on SFJ's failure to make any payment due to PB in accordance with ARTICLE 4, then, if PB elects to continue development of the Product and obtains Regulatory Approval following such termination, PB shall remain obligated to pay to SFJ fifty percent (50%) of any Approval Payments that become due and payable pursuant to ARTICLE 6 at such time that such payments become due and payable (if ever) pursuant to ARTICLE 6 (or, as applicable, fifty percent (50%) of any Buy-Out Payment that PB elects to pay pursuant to Section 6.7), provided that such Approval Payments (or Buy-Out Payment, as applicable) shall also be adjusted as set forth in Section 6.2. + +14.2.2 At-Will Termination by PB. PB may terminate this Agreement at any time after SFJ has paid or incurred a total of $60 million of Development Costs and prior to the date of receipt of the first Regulatory Approval upon [***] prior written notice to SFJ. In the event that PB terminates this Agreement pursuant to this Section 14.2.2 then in exchange for purchasing the Trial Data Package including the Research Results included therein as set forth in Section 11.1.1.4, PB will pay SFJ, within [***] of the date of termination, an amount equal to three hundred percent (300%) of Development Costs paid or incurred by SFJ prior to such termination. Additionally, if PB elects to continue development of the Product and obtains Regulatory Approval following such termination, PB will remain obligated to pay any Approval Payments that become due and payable pursuant to ARTICLE 6 at such time as such payments become due and payable (if ever) pursuant to ARTICLE 6 (except to the extent of the amount of any Buy-Out Payment paid by PB pursuant to Section 6.7), provided that each Approval Payment (or the Buy-Out Payment, as applicable) shall be adjusted as set forth in Section 6.2, and reduced by the amount previously paid by PB to SFJ pursuant to this Section 14.2.2. + +14.2.3 Termination by SFJ for Material Adverse Event. SFJ may terminate this Agreement at any time in the event of a Material Adverse Event immediately upon written notice to PB. In the event that SFJ terminates this Agreement pursuant to this Section 14.2.3, then, if PB elects to continue development of the Product and obtains Regulatory Approval following such termination, in exchange for purchasing the Trial Data Package including the Research Results included therein as set forth in Section 11.1.1.4, PB shall remain obligated to pay SFJ an amount equal to fifty percent (50%) of the Approval Payments (as adjusted as set forth in Section 6.2, subject, to the extent applicable, to Sections 2.3.3 and 3.12.2) that become due and payable under ARTICLE 6 at such time as they become due and payable (if ever) pursuant to ARTICLE 6 (or, as applicable, 50% of any Buy-Out Payment that PB elects to pay pursuant to Section 6.7), provided that such Approval Payments (or Buy-Out Payment, as applicable) shall also be adjusted as set forth in Section 6.2. + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +14.2.4 Termination for Failure to Receive Regulatory Approval. + +14.2.4.1 This Agreement will, upon written notice from either Party to the other Party, terminate with no further action from either Party if the Product has not received Regulatory Approval from at least one of (i) the FDA, (ii) EMA, (iii) PMDA, or (iv) NMPA after completion of the Clinical Trials, submission by PB of applications for Regulatory Approval to the FDA and EMA, and submission by SFJ of applications for Regulatory Approval to the PMDA and NMPA, and after Commercially Reasonable Efforts to obtain such Regulatory Approvals based on such submitted applications as may be amended from time to time. For the avoidance of doubt, if Regulatory Approval is received from any of the FDA, EMA, PMDA, or NMPA then this Agreement may not thereafter be terminated pursuant to this Section 14.2.4.1. + +14.2.4.2 This Agreement will, upon written notice from either Party to the other Party, terminate with no further action from either Party, if the Phase 3 Trial is completed or terminated and either (a) the primary endpoint in the Phase 3 Trial is not achieved or (b) SFJ reasonably determines that the Research Results of the Phase 3 Trial do not support Regulatory Approval. For avoidance of doubt, if an application for Regulatory Approval is submitted to any of the FDA, EMA, PMDA or NMPA then this Agreement may not thereafter be terminated pursuant to this Section 14.2.4.2. + +14.2.4.3 In the event that this Agreement is terminated pursuant to this Section 14.2.4, then, if PB elects to continue development of the Product and obtains Regulatory Approval following such termination, in exchange for purchasing the Trial Data Package including the Research Results included therein as set forth in Section 11.1.1.4, PB shall remain obligated to make any Approval Payments that become due and payable pursuant to ARTICLE 6 at such time that such payments become due and payable (if ever) pursuant to ARTICLE 6 (except to the extent of the amount of any Buy-Out Payment paid by PB pursuant to Section 6.7), provided that such Approval Payments (or Buy-Out Payment, as applicable) shall be adjusted as set forth in Section 6.2. + +14.2.5 Termination for Bankruptcy. Either Party may terminate this Agreement upon written notice to the other Party if the other Party makes an assignment for the benefit of creditors, or commences a case or proceeding under any bankruptcy, reorganization, insolvency, or similar laws, has a trustee or receiver or similar officer of any court appointed for such Party, or for substantial part of the property of such Party, or bankruptcy, reorganization, insolvency, or liquidation proceedings are instituted by or against such Party without such proceedings being dismissed, in each of the foregoing cases for a period of at least [***]. + +14.2.5.1 In the event that PB terminates this Agreement pursuant to this Section 14.2.5, then, if PB elects to continue development of the Product and obtains Regulatory Approval following such termination, in exchange for purchasing the Trial Data Package including the Research Results included therein as set forth in Section 11.1.1.4, PB shall remain obligated to pay to SFJ any Approval Payments that become due and payable pursuant to ARTICLE 6 at such time as such Approval Payments become due and payable (if ever) pursuant to ARTICLE 6 (except to the extent of the amount of any Buy-Out Payment paid by PB pursuant + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +to Section 6.7), provided that such Approval Payments (or Buy-Out Payment, as applicable) shall be adjusted as set forth in Section 6.2. + +14.2.5.2 In the event SFJ terminates this Agreement pursuant to this Section 14.2.5, then in exchange for purchasing the Trial Data Package including the Research Results included therein as set forth in Section 11.1.1.4, PB will pay SFJ within [***] of the date of termination an amount equal to three hundred percent (300%) of Development Costs paid or incurred by SFJ prior to such termination. Additionally, PB will remain obligated to pay any Approval Payments that become due and payable pursuant to ARTICLE 6 at such time as such payments become due and payable (if ever) pursuant to ARTICLE 6 (except to the extent of the amount of any Buy-Out Payment paid by PB pursuant to Section 6.7), provided that such Approval Payments (or Buy-Out Payment, as applicable) shall be adjusted as set forth in Section 6.2, and reduced by the amount previously paid by PB to SFJ pursuant to this Section 14.2.5.2. + +14.2.6 Termination for Change of Control of PB. PB will notify SFJ in writing promptly (and in any event within [***]) following the entering into of a definitive agreement with respect to a Change of Control of PB. SFJ may, in its sole discretion, terminate this Agreement in its entirety at any time following a Change of Control of PB that occurs prior to the date of payment by PB of the final Approval Payment. In the event that SFJ terminates this Agreement pursuant to this Section 14.2.6, then, in exchange for purchasing the Trial Data Package including the Research Results included therein as set forth in Section 11.1.1.4, PB will pay to SFJ within [***] of the date of termination an amount equal to one hundred fifty percent (150%) of Development Costs which were paid or incurred by SFJ. PB or its successor (whose performance shall be guaranteed by PB) shall be obligated to continue to exercise Commercially Reasonable Effort to develop the Product and seek Regulatory Approval as set forth herein following the date of such termination including the Trial Data Package including the Research Results included therein as set forth in Section 11.1.1.4, PB shall remain obligated to pay any Approval Payments that become due and payable pursuant to ARTICLE 6 at such time as such Approval Payments become due and payable (if ever) pursuant to ARTICLE 6 (except to the extent of the amount of any Buy-Out Payment paid by PB pursuant to Section 6.7), provided that such Approval Payments (or Buy-Out Payment, as applicable) shall be adjusted as set forth in Section 6.2, and shall be reduced by the amount previously paid to SFJ as set forth in this Section 14.2.6. + +14.2.7 Termination for Safety Concerns. Either Party may terminate this Agreement upon written notice to the other Party if (a) the independent data monitoring committee for the Phase 3 Trial recommends termination of the Phase 3 Trial for reasons pertaining to the health or safety of the Subjects or for futility, or (b) the Parties mutually agree a material health or safety concern with respect to the Subjects exists. In the event that this Agreement terminates pursuant to this Section 14.2.7, then PB will not be obligated to pay to SFJ any Development Costs or Approval Payments. Notwithstanding the foregoing, (A) if this Agreement terminates pursuant to this Section 14.2.7 and such termination: (i) arises as a result of gross negligence on the part of PB; or (ii) is due to (x) the applicable independent data monitoring committee recommending termination of the Phase 3 Trial or (y) PB and SFJ + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +mutually agreeing to terminate the Phase 3 Trial, in either case ((x) or (y)), due to a Serious Safety Issue that was previously known, demonstrated or identified by PB as being material as of the Effective Date and the material data showing, demonstrating, or identifying such Serious Safety Issue were not included in the Data Room, disclosed in writing to SFJ or otherwise publicly known prior to the Effective Date; then, in either case ((i) or (ii)), PB will pay SFJ within [***] of the date of termination an amount equal to three hundred percent (300%) of Development Costs paid or incurred by SFJ, and (B) if PB elects to continue development of the Product and obtains Regulatory Approval following such termination, in exchange for purchasing the Trial Data Package including the Research Results included therein as set forth in Section 11.1.1.4, PB will remain obligated to pay any Approval Payments that become due and payable pursuant to ARTICLE 6 at such time as such Approval Payments become due and payable (if ever) pursuant to ARTICLE 6 (except to the extent of the amount of any Buy-Out Payment paid by PB pursuant to Section 6.7), provided that such Approval Payments (or Buy-Out Payment, as applicable) shall be adjusted as set forth in Section 6.2 and shall be reduced by the amount previously paid by PB to SFJ pursuant to this Section 14.2.7. + +14.2.8 Termination for Certain Breaches/Actions. + +14.2.8.1 SFJ may terminate this Agreement if (i) PB has breached by its own actions, or by the actions of any of its Representatives, either of Section 13.1.3 or Section 13.1.4 in any material respect, (ii) a Representative of PB has breached the policy attached as Exhibit F‑1 in any material respect and such breach results in a Material Anti-Corruption Law Violation, or (iii) SFJ learns (a) that improper payments are being or have been made to Government Officials or any other person by PB or any of its Representatives on behalf of PB or (b) that PB or any of its Representatives with respect to services performed on behalf of PB has accepted any payment, item, or benefit, regardless of value, as an improper inducement to award, obtain or retain business or otherwise gain or grant an improper business advantage from or to any other person or entity (in any such case ((i), (ii) or (iii)), a "PB Compliance Breach"), unless such PB Compliance Breach can be cured without having a materially adverse impact on the probability of completing the Clinical Trials or obtaining Regulatory Approval for the Product. In the event of such termination, PB will not be entitled to any further payments under ARTICLE 4, regardless of any activities undertaken or agreements with additional Third Parties entered into prior to termination. In the event that SFJ terminates this Agreement pursuant to this Section 14.2.8.1, then (a) in exchange for purchasing the Trial Data Package including the Research Results included therein as set forth in Section 11.1.1.4, PB will pay SFJ, within [***] of the date of termination, an amount equal to one hundred fifty percent (150%) of Development Costs paid or incurred to PB by SFJ prior to such termination, and (b) if PB elects to continue development of the Product and obtains Regulatory Approval following such termination, PB shall remain obligated to pay to SFJ any Approval Payments that become due and payable pursuant to ARTICLE 6 at such time that such payments become due and payable (if ever) pursuant to ARTICLE 6 (except to the extent of the amount of any Buy-Out Payment paid by PB pursuant to Section 6.7), provided that such Approval Payments (or Buy-Out Payment, as applicable) shall be adjusted as set forth in Section 6.2, and reduced by the amount previously paid by PB to SFJ pursuant to this Section 14.2.8.1. + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +14.2.8.2 PB may terminate this Agreement if (i) SFJ has breached by its own actions, or by the actions of any of its Representatives, either of Section 13.1.3 or Section 13.1.4 in any material respect, (ii) a Representative of SFJ has breached the policy attached as Exhibit F‑2 in any material respect and such breach results in a Material Anti-Corruption Law Violation, or (iii) PB learns (a) that improper payments are being or have been made to Government Officials or any other person by SFJ or any of its Representatives on behalf of SFJ or (b) that SFJ or any of its Representatives with respect to services performed on behalf of SFJ has accepted any payment, item, or benefit, regardless of value, as an improper inducement to award, obtain or retain business or otherwise gain or grant an improper business advantage from or to any other person or entity (in any such case ((i), (ii) or (iii)), an "SFJ Compliance Breach"), unless such SFJ Compliance Breach can be cured without having a materially adverse impact on the probability of completing the Clinical Trials or obtaining Regulatory Approval for the Product. In the event of such termination, SFJ will not be entitled to any further payments hereunder except as set forth below. In the event that PB terminates this Agreement pursuant to this Section 14.2.8.2, then, if PB elects to continue development of the Product and obtains Regulatory Approval following such termination, in exchange for purchasing the Trial Data Package including the Research Results included therein as set forth in Section 11.1.1.4, PB shall remain obligated to pay to SFJ any Approval Payments that become due and payable pursuant to ARTICLE 6 at such time that such payments become due and payable (if ever) pursuant to ARTICLE 6 (except to the extent of the amount of any Buy-Out Payment paid by PB pursuant to Section 6.7), provided that such Approval Payments (or Buy-Out Payment, as applicable) shall be (A) adjusted as set forth in Section 6.2, and (B) reduced by the amount of all documented out-of-pocket expenses incurred by or on behalf of PB as a result or arising out of such violation by SFJ or any of its Representatives (including any and all amounts paid by PB as penalties or fines for such violation, in settlement of legal or administrative proceedings relating to such violation, or otherwise). + +14.2.8.3 If a Party learns that any of its Permitted Third Parties has materially breached Section 13.1.3 or Section 13.1.4, or Exhibit F‑1 or Exhibit F‑2, as applicable, or that improper payments are being or have been made to Government Officials by any of its Permitted Third Parties with respect to services performed on behalf of such Party or in connection with the Clinical Trials, such Party will notify the other Party and, at the other Party's option, such Party will terminate its relationship with such Permitted Third Party with respect to the Clinical Trials. + +14.2.9 Termination Because of Adverse Patent Impact. SFJ may terminate this Agreement if (a) PB is enjoined from further developing or commercializing the Product for the Indication in any of the US, the Designated European Countries or the Designated Asian Countries or (b) the future value of the Product is materially adversely affected due to (i) Third Party patents that were not publicly disclosed or known to SFJ at the Effective Date that would be infringed by the manufacture, use, sale, offer for sale or import of the Product for the Indication in any of the US, the Designated European Countries or the Designated Asian Countries or (ii) invalidity or unenforceability of all Patents within the PB Intellectual Property Covering the Product for the Indication in any of the US, the Designated European Countries or the Designated Asian Countries (in either case ((a) or (b)), "Adverse Patent Impact"), upon + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +written notice to PB if PB does not cure such Adverse Patent Impact within a period of six (6) months from the date of SFJ's notice to PB of an Adverse Patent Impact. In the event that SFJ terminates this Agreement pursuant to this Section 14.2.9, then in exchange for purchasing the Trial Data Package including the Research Results included therein as set forth in Section 11.1.1.4, PB shall pay to SFJ, within [***] of the date of termination, an amount equal to all Development Costs paid or incurred by SFJ as of the date of termination. + +14.2.10 Termination for JSC Decision. SFJ may, in its sole discretion, terminate this Agreement in its entirety at any time prior to the date of receipt of the first Regulatory Approval in the event PB exercises its decision-making authority under Section 5.2.4 to approve a matter set forth in Section 5.2.2 and, after escalation to the Executive Officers in accordance with Section 5.2.4, SFJ continues in good faith to disagree with such decision. In the event that SFJ terminates this Agreement pursuant to this Section 14.2.10, then in exchange for purchasing the Trial Data Package including the Research Results included therein as set forth in Section 11.1.1.4, PB will pay to SFJ, within [***] of the date of termination, an amount equal to the Development Costs paid or incurred by SFJ plus interest at the annual rate of twenty-five percent (25%) from the date such Development Costs were paid or incurred by SFJ and, if PB elects to continue development of the Product and obtains Regulatory Approval following such termination, PB shall remain obligated to pay any Approval Payments that become due and payable pursuant to ARTICLE 6 at such time as such Approval Payments become due and payable (if ever) pursuant to ARTICLE 6 (except to the extent of the amount of any Buy-Out Payment paid by PB pursuant to Section 6.7), provided that such Approval Payments (or Buy-Out Payment, as applicable) shall be adjusted as set forth in Section 6.2, and reduced by the amount previously paid to SFJ as set forth in this Section 14.2.10. + +14.3 Certain Additional Consequences of Termination. In the event of any termination of this Agreement pursuant to Section 14.2, then, if SFJ has not caused a Program Transfer to occur pursuant to Section 3.20: + +14.3.1 to the extent not previously assigned to PB pursuant to Section 11.1.1.4, SFJ shall, and it hereby does, assign sole and exclusive ownership of the Trial Data Package including the Research Results included therein to PB, such assignment to be effective in accordance with Section 11.1.1.4; + +14.3.2 effective as of such termination, SFJ shall, and it hereby does, assign to PB all of SFJ's and its Affiliates' right, title and interest in and to all Product Filings then owned or Controlled by SFJ or any of its Affiliates; provided that if any such Product Filing is not immediately transferable in a country, SFJ shall provide PB with all benefit of such Product Filing and such assistance and cooperation as necessary or reasonably requested by PB to timely transfer such Product Filing to PB or its designee or, at PB's option, to enable PB to obtain a substitute for such Product Filing without disruption to PB's development or Commercialization of the Product in the SFJ Territory; + +14.3.3 within [***] after assignment of the Product Filings pursuant to Section 14.3.2, SFJ shall deliver to PB: (a) true, correct and complete copies of all Product Filings in such country (in each case, whether held in the name of SFJ or any of its Affiliates), + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +and disclose to PB in writing all previously-undisclosed Research Results within the Trial Data Package; (b) formally transfer or assign, or cause to be formally transferred or assigned, into the name of PB or its designee all Product Filings in such country (in each case, whether held in the name of SFJ or any of its Affiliates); and (c) take such other actions and execute such other instruments, assignments and documents as may be necessary to effect, evidence, register and record the transfer, assignment or other conveyance of such rights to PB or its designee; + +14.3.4 at PB's written request and election in PB's sole discretion, SFJ shall and hereby does, and shall cause its Affiliates to either: (i) wind down in accordance with Applicable Law and observing applicable ethical and regulatory guidelines any or all Clinical Trials being conducted by or on behalf of SFJ or its Affiliate as of the effective date of termination, at SFJ's cost and expense; or (ii) (x) transfer control to PB of any or all Clinical Trials being conducted by or on behalf of SFJ or its Affiliate as of the effective date of termination and (y) continue to conduct such Clinical Trials being conducted by or on behalf of SFJ or an Affiliate as of the effective date of termination for up to [***] to enable such transfer to be completed without interruption of any such Clinical Trial, in each case ((x) and (y)), at PB's cost and expense; and + +14.3.5 SFJ shall, and shall cause its Affiliates to, promptly assign to PB or its designee any and all Clinical Trial Agreements, CRO Agreements and other Vendor Agreements to which any of them is a party and cooperate in good faith with PB to provide appropriate notice and new contact information to the applicable Sites, Clinical Investigators, CROs and other Vendors and PB shall accept such assignment of all obligations of SFJ and its Affiliates thereunder without recourse to SFJ other than any indemnification obligations which SFJ may be liable for thereunder. + +14.4 Surviving Obligations. + +14.4.1 Accrued Rights and Obligations. Except as expressly set forth in Sections 3.20 and 14.4.2, and, if applicable, the Program Transfer Agreement, expiration or termination of this Agreement for any reason will not release either Party from any obligation or liability which, at the time of such expiration or termination, has already accrued to the other Party or which is attributable to a period prior to such expiration or termination. + +14.4.2 Exclusive Remedy. Notwithstanding anything herein to the contrary, termination of this Agreement by a Party will be without prejudice to other remedies such Party may have at law or equity; provided that the payment by PB to SFJ of the amounts specified as being payable upon a given termination in Section 14.2 shall be in lieu of any claim for damages that SFJ may have arising out of or in connection with the circumstances that formed the basis for such termination.. + +14.4.3 Surviving Obligations. The following provisions of this Agreement, together with any other provisions that expressly specify that they survive, will survive expiration or earlier termination of this Agreement: + +14.4.3.1 ARTICLE 1, ARTICLE 9, ARTICLE 10, ARTICLE 11, ARTICLE 12, Section 13.1, Section 13.6, Section 14.4 and ARTICLE 15; and + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +14.4.3.2 solely in the case of termination of this Agreement after payment by SFJ to PB of the Initial Development Cost Payment on the Initial Funding Date, but not in the case of expiration of this Agreement, Sections 3.20, 6.1- 6.7, 7.1-7.7 (in the case of such Sections 7.1-7.7, such provisions shall terminate only after all PB Obligations, other than contingent indemnity obligations, have been paid to SFJ or otherwise satisfied in accordance with this Agreement in full), 14.2 and 14.3. + +ARTICLE 15 + +MISCELLANEOUS + +15.1 Relationship with Affiliates. Each Party will be responsible for any breach by its Affiliates of its obligations in connection with this Agreement, and each such Party will remain responsible for any responsibilities that it has delegated to an Affiliate as though such Party had performed (or failed to perform) such responsibilities itself. + +15.2 Prior Agreements. The Parties agree on behalf of themselves and their respective Affiliates that any prior Confidentiality Agreement, by and between PB and SFJ (the "Prior CDA") is hereby terminated and superseded by this Agreement and that all Information disclosed under or pursuant to the Prior CDAs will constitute Confidential Information disclosed pursuant to this Agreement and will be subject to the terms of ARTICLE 10, with the confidentiality and non-use provisions of ARTICLE 10 applying retroactively to such Confidential Information from the date of disclosure. + +15.3 Notices. Any notice or other communication required or permitted to be given by either Party under this Agreement will be in writing and will be effective when delivered if delivered by fax, e-mail, hand, reputable courier service, or five (5) days after mailing if mailed by registered or certified mail, postage prepaid and return receipt requested, addressed to the other Party at the following addresses or such other address as may be designated by notice pursuant to this Section 15.3.: + +15.3.1 If to PB: + +PhaseBio Pharmaceuticals, Inc. 1 Great Valley Parkway, Suite 30 Malvern, PA 19355 USA Attn: Chief Executive Officer + +with a copy to: + +Attn: Vice President, Head of Legal (at the address set forth above) + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +and to: + +Cooley LLP 11951 Freedom Drive Reston, VA 20190 USA Attn: Christian E. Plaza + +15.3.2 If to SFJ: + +SFJ Pharmaceuticals X, Ltd SIX, 2nd Floor, Cricket Square PO Box 2681 Grand Cayman, KY1-1111 Cayman Islands + +Attn: Robert DeBenedetto + +with a copy to: + +Morrison & Foerster LLP 755 Page Mill Road Palo Alto, CA 94304-1018 Attention: Michael O'Donnell + +15.4 Force Majeure. Neither Party will be liable for any breach or delay in performance of any obligation under this Agreement to the extent caused by any of the following: war, terrorism, riot, fire, explosion, accident, flood, sabotage, changes in Applicable Laws, actions of Governmental Authorities, or any other event beyond the reasonable control of such Party. The Party invoking this Section 15.4 must provide prompt written notice and full particulars of such event to the other Party and will use diligent and commercially reasonable efforts to mitigate the effects of any such force majeure event on such Party's compliance with and performance under this Agreement. + +15.5 Use of Names. Neither Party will use the other Party's nor any of its Affiliates' (including the limited partners of SFJ's or its Affiliates') names or trademarks in any promotional materials or advertising without the prior written consent of the other Party except as otherwise expressly permitted in this Agreement. + +15.6 Assignment. Without the prior written consent of the other Party hereto, neither Party will sell, transfer, assign, pledge or otherwise dispose of, whether voluntarily, involuntarily, by operation of law or otherwise, this Agreement or any of its rights or duties hereunder; provided, however, that either Party may assign, sublicense or transfer this Agreement and all of its rights and obligations hereunder, in their entirety, to any of its Affiliates or to a successor in connection with the sale or other transfer of all or substantially all of its business or assets to which this Agreement relates, whether by merger, sale of stock, sale of assets or otherwise, and + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +whether this Agreement is actually assigned or is assumed by a Third Party acquirer or the surviving corporation resulting from such transaction by operation of law (e.g., in the context of a reverse triangular merger). Notwithstanding the foregoing, any assignment of the rights or obligations under this Agreement by a Party (i) to an Affiliate shall require such Party to guarantee the performance of such Affiliate's financial and performance obligations hereunder or (ii) in connection with the sale or other transfer of all or substantially all of such Party's business or assets to which this Agreement relates shall require the ultimate Affiliate controlling the other party in such transaction to guarantee such Party's financial and performance obligations hereunder and such Party shall remain liable for such financial and performance obligations notwithstanding such sale or other transfer of all or substantially all of such Party's business or assets to which this Agreement relates. Notwithstanding any of the foregoing, without the consent of PB, which consent may be withheld in PB's sole discretion, SFJ shall not sell, assign, sublicense or otherwise transfer this Agreement to an entity whose primary business is the development or commercialization of pharmaceutical or biotechnology products prior to the date of Program Transfer. For the avoidance of doubt the preceding sentence shall not apply after the date of Program Transfer. Furthermore, notwithstanding any of the foregoing, SFJ may assign its right to receive Approval Payments to (a) the limited partners in SFJ, provided that such limited partners agree that a majority in interest shall be entitled to take all actions and make any consents on behalf of SFJ hereunder and provided that such limited partners notify PB of a single account to which PB can make all payments that may become due hereunder and assume sole responsibility for distributing all such payments, or to a liquidating trust or similar entity that is established to receive and distribute Approval Payments for the benefit of the limited partners in SFJ, that is required to carry out such responsibilities as a single entity, and provided that such limited partners or liquidating trust takes such rights to receive and distribute Approval Payments subject to all of PB's rights and defenses hereunder (and in any case under this clause (a), PB shall have the unconditional right to follow any instruction it receives or rely on any actions, consents and communications received from or taken by such limited partners or liquidating trust or similar entity without any duty to verify or otherwise determine the validity thereof) or (b) an other Third Party to which SFJ assigns this Agreement in its entirety as permitted by the preceding provisions of this Section 15.6, provided that, following any assignment of this Agreement by SFJ to a Third Party pursuant to the foregoing clause (b) the JSC shall terminate, such assignee shall not have any further rights under ARTICLE 5, such assignee shall not have any further rights to approve or consent (and PB shall not have any further obligation to seek SFJ's approval or consent) as to any matter relating to PB's development and Commercialization of the Product, [***]. This Agreement is binding upon and will inure to the benefit of each of the Parties, its successors and permitted assigns. + +15.7 Further Assurances. The Parties will execute such further reasonable documents and perform such further reasonable acts as may be necessary to comply with or more fully effectuate the terms of this Agreement. + +15.8 Fees and Expenses. Each Party to this Agreement will bear its own costs and expenses, including attorneys' fees and expenses, in connection with the closing of the transactions contemplated hereby. + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +15.9 Governing Law. The construction and validity of this Agreement and the provisions hereof, and the rights and obligations of the Parties hereunder, will be governed by the internal laws of the State of Delaware, USA, and, to the extent applicable to Patents and Trademarks, the applicable federal laws of the USA, in each instance without regard to conflict of laws principles. + +15.10 Dispute Resolution. The Parties recognize that disputes as to certain matters relating to this Agreement may arise from time to time. It is the objective of the Parties to establish procedures to facilitate the resolution of disputes in an expedient manner by mutual cooperation and without resort to litigation. Accordingly, the Parties agree that any dispute, controversy or claim arising under, out of or in connection with this Agreement, including any subsequent amendments, or the validity, enforceability, construction, performance or breach hereof (and including the applicability of this Section 15.10 to any such dispute, controversy or claim) (each a "Dispute") shall be resolved as follows: + +15.10.1 Either Party shall have the right to refer such Dispute to the Executive Officers for attempted resolution by good faith negotiations for a period of [***]. Any final decision mutually agreed to by the Executive Officers in writing shall be conclusive and binding on the Parties. With respect to any Dispute that remains unresolved after the expiration of [***] after a Dispute is notified to the Executive Officers, then such Dispute shall be submitted to the International Centre for Dispute Resolution ("ICDR") for final and binding arbitration pursuant to the arbitration clause set forth in Section 15.10.2. Notwithstanding the foregoing, no matters relating to breach or alleged breach of the ownership of intellectual property or rights in intellectual property or the validity or enforceability thereof shall be resolved by arbitration, but rather shall be determined by a U.S. federal court of appropriate jurisdiction. Notwithstanding the foregoing, any dispute between the Parties as to whether entering into a Licensing Transaction would have a Material Impact shall be resolved as set forth in Section 7.5.5. Notwithstanding anything in this Agreement to the contrary, either Party shall be entitled to seek preliminary injunctive relief in any court of competent jurisdiction immediately if necessary to prevent irreparable harm to that Party. + +15.10.2 Arbitration Process. + +15.10.2.1 Either Party shall have the right to initiate arbitration at any time after the expiration of thirty (30) days after a Dispute is notified to the Executive Officers. Any disputes concerning the propriety of the commencement of the arbitration shall be finally settled by the arbitral tribunal. + +15.10.2.2 Any Dispute including the determination of the scope or applicability of this agreement to arbitrate, shall be determined by the ICDR in accordance with its International Arbitration Rules, except as they may be modified herein. The seat, or legal place, of arbitration shall be New York, and the language of the arbitration shall be English. References herein to any arbitration rules or procedures mean such rules or procedures as amended from time to time, including any successor rules or procedures, and references herein to the ICDR include any successor thereto. The arbitration shall be before a tribunal comprised of three (3) arbitrators. Each Party shall select one arbitrator and within fifteen (15) days of the + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +second arbitrator's appointment, the two (2) Party appointed arbitrators shall select the third, who shall serve as the tribunal's chair or president. All three (3) arbitrators shall be professionals with substantial experience in development and Commercialization of biopharmaceutical products. An arbitrator shall be deemed to meet these qualifications unless a Party objects within fifteen (15) after the arbitrator is appointed. This arbitration provision, and the arbitration itself, shall be governed by the Federal Arbitration Act, 9 U.S.C. §§ 1 et. seq. + +15.10.2.3 Consistent with the expedited nature of arbitration, each Party will, upon the written request of the other Party, promptly provide the other with copies of documents on which the producing Party may rely in support of or in opposition to any claim or defense. At the request of a Party, the arbitrators shall have the discretion to order examination by deposition of witnesses to the extent the arbitrator deems such additional discovery relevant and appropriate. [***]. All objections are reserved for the arbitration hearing except for objections based on privilege and proprietary or confidential information. [***]. Any Dispute regarding discovery, or the relevance or scope thereof, shall be determined by the arbitrators, which determination shall be conclusive. All discovery shall be completed within [***] following the appointment of the arbitrators. All costs and/or fees relating to the retrieval, review and production of electronic discovery shall be paid by the Party requesting such discovery. + +15.10.2.4 The arbitrators shall have no authority to award punitive or other damages not measured by the prevailing Party's actual damages, except as may be required by statute. Each Party expressly waives and foregoes any right to consequential, punitive, special, exemplary or similar damages or lost profits. The arbitrators shall have no power or authority, under the ICDR rules and procedures or otherwise, to relieve the Parties from their agreement hereunder to arbitrate or otherwise to amend or disregard any provision of this Agreement. The cost of the arbitration, including the fees of the arbitrators and reasonable attorney's fees of the prevailing Party, shall be borne by the Party the arbitrator determines has not prevailed in the arbitration. + +15.10.2.5 If an arbitral award does not impose an injunction on the losing Party or contain a money damages award in excess of [***] dollars USD ($[***]), then the arbitral award shall be final and binding and shall only be subject to such challenges as would otherwise be permissible under the Federal Arbitration Act, 9 U.S.C. § 1 et. seq. . Judgment on such an award may be entered in any court of competent jurisdiction and the Parties undertake to carry out the award without delay. In the event that an arbitral award imposes an injunction or contains a monetary award in excess of [***] dollars USD ($[***]), the Parties agree that such award may be appealed pursuant to the AAA's Optional Appellate Arbitration Rules ("Appellate Rules") and should not be considered to be final and binding until after the time for filing the notice of appeal under the Appellate Rules has expired. Appeals must be initiated within [***] of receipt of the award, as defined by the Appellate Rules, by filing a Notice of Appeal within any AAA office. Following the appeal process, the decision rendered by the appeal tribunal shall be final and binding and judgment on that award may be entered in any court of competent jurisdiction and the Parties undertake to carry out the award without delay. + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +15.10.2.6 Except as may be required by law, or to protect or pursue a legal right to enforce or challenge an award in legal proceedings, where needed for the preparation or presentation of a claim or defense in this arbitration, or by order of the arbitral tribunal upon application of a Party, neither a Party nor an arbitrator may disclose the existence, content, or results of any arbitration hereunder without the prior written consent of both Parties. + +15.11 Limitation of Liability. TO THE MAXIMUM EXTENT PERMITTED BY LAW AND NOTWITHSTANDING ANY PROVISION IN THIS AGREEMENT TO THE CONTRARY, NEITHER PARTY WILL BE LIABLE TO THE OTHER PARTY FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL, RELIANCE OR PUNITIVE DAMAGES OR LOST OR IMPUTED PROFITS OR ROYALTIES OR COST OF PROCUREMENT OF SUBSTITUTE GOODS OR SERVICES, WHETHER LIABILITY IS ASSERTED IN CONTRACT, TORT (INCLUDING NEGLIGENCE AND STRICT PRODUCTS LIABILITY), INDEMNITY OR CONTRIBUTION, AND IRRESPECTIVE OF WHETHER THAT PARTY OR ANY REPRESENTATIVE OF THAT PARTY HAS BEEN ADVISED OF, OR OTHERWISE MIGHT HAVE ANTICIPATED THE POSSIBILITY OF, ANY SUCH LOSS OR DAMAGE. THE PARTIES AGREE THAT THE LIMITATIONS SPECIFIED IN THIS SECTION 15.11 WILL APPLY EVEN IF ANY LIMITED REMEDY SPECIFIED IN THIS AGREEMENT IS FOUND TO HAVE FAILED OF ITS ESSENTIAL PURPOSE. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, "CONSEQUENTIAL DAMAGES" WILL BE DEEMED TO INCLUDE, AND NEITHER PARTY WILL BE LIABLE TO THE OTHER PARTY OR ANY OF SUCH OTHER PARTY'S AFFILIATES, REPRESENTATIVES OR STOCKHOLDERS FOR ANY DAMAGES BASED ON OR MEASURED BY LOSS OF PROJECTED OR SPECULATIVE FUTURE SALES OF THE PRODUCT, ANY PAYMENT DUE UPON ANY UNACHIEVED EVENT UNDER ARTICLE 6, OR ANY OTHER UNEARNED, SPECULATIVE OR OTHERWISE CONTINGENT PAYMENTS PROVIDED FOR IN THIS AGREEMENT. FOR THE AVOIDANCE OF DOUBT, THIS SECTION 15.11 IS NOT MEANT TO LIMIT PB'S OBLIGATION TO PAY SFJ THE AMOUNTS SET FORTH IN ARTICLE 6 OR SECTION 14.2. + +15.12 Cumulative Remedies. Unless expressly set forth in this Agreement, all rights and remedies of the Parties, including all rights to payment, rights of termination, rights to injunctive relief, and other rights provided under this Agreement, will be cumulative and in addition to all other remedies provided for in this Agreement, in law, and in equity. + +15.13 Relationship of the Parties. + +15.13.1 Independent Contractors. Nothing contained herein will be deemed to create a partnership, joint venture, or similar relationship between the Parties, including for tax purposes. Neither Party is the agent, employee, joint venturer, partner, franchisee, or representative of the other Party. Each Party specifically acknowledges that it does not have the authority to, and will not, incur any obligations or responsibilities on behalf of the other Party. Notwithstanding anything to the contrary in this Agreement, each Party (and its officers, directors, agents, employees, and members) will not hold themselves out as employees, agents, + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +representatives, or franchisees of the other Party or enter into any agreements on such Party's behalf. + +15.13.2 Direction. Neither Party will be subject to the supervisory direction of the other Party in regard to the conduct of the Clinical Trials. + +15.14 No Third Party Beneficiaries. This Agreement and the provisions herein are for the benefit of the Parties only, and are not intended to confer any rights or benefits to any Third Party. + +15.15 Rights Reserved. No license or any other right is granted to either Party, by implication or otherwise, except as specifically set forth in this Agreement. All rights not exclusively granted to SFJ are reserved to PB and its Affiliates. Notwithstanding any other provision of this Agreement to the contrary, and for clarity, no Intellectual Property or other proprietary rights Controlled by PB or its Affiliates will be assigned or licensed to SFJ in connection with this Agreement, except, if executed by the Parties, as expressly set forth in the Program Transfer Agreement. + +15.16 Nonsolicitation. During the Term and for a period of [***] thereafter, neither Party shall solicit an employee of the other Party who is or has been involved in the performance or oversight of any of the development activities hereunder to terminate his or her employment and accept employment or work as a consultant with the soliciting Party. Notwithstanding the foregoing, nothing herein shall restrict or preclude the Parties' right to make generalized searches for employees by way of a general solicitation for employment placed in a trade journal, newspaper or website. + +15.17 Amendments; No Waiver. Unless otherwise specified herein, no amendment, supplement, or modification of this Agreement will be binding on either Party unless it is in writing and signed by both Parties. No delay or failure on the part of a Party in the exercise of any right under this Agreement or available at law or equity will be construed as a waiver of such right, nor will any single or partial exercise thereof preclude any other exercise thereof. All waivers must be in writing and signed by the Party against whom the waiver is to be effective. Any such waiver will constitute a waiver only with respect to the specific matter described in such writing and will in no way impair the rights of the Party granting such waiver in any other respect or at any other time. + +15.18 Severability. If any provision (or portion thereof) of this Agreement is determined by a court or arbitration to be unenforceable as drafted by virtue of the scope, duration, extent, or character of any obligation contained herein, it is the Parties' intention that such provision (or portion thereof) will be construed in a manner designed to effectuate the purposes of such provision to the maximum extent enforceable under such Applicable Law. The Parties will enter into whatever amendment to this Agreement as may be necessary to effectuate such purposes. + +15.19 Entire Agreement. This Agreement, including all Exhibits hereto and the Disclosure Letter, contains the entire understanding of the Parties and supersedes, revokes, terminates, and cancels any and all other arrangements, understandings, agreements, term sheets, + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +or representations and warranties, whether oral or written, between the Parties relating to the subject matter of this Agreement. + +15.20 Counterparts. This Agreement will be executed in two (2) counterparts, one (1) for either Party, which, taken together, will constitute one and the same agreement. This Agreement will not be binding on the Parties or otherwise effective unless and until executed by both Parties. + +15.21 Construction. This Agreement has been negotiated by the Parties and their respective counsel. This Agreement will not be construed in favor of or against either Party by reason of the authorship of any provisions hereof. + +[Signature Page Follows] + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +IN WITNESS WHEREOF, the Parties, intending to be legally bound hereby, have caused this Agreement to be executed in duplicate by their duly authorized representatives as of the Effective Date. + +PHASEBIO PHARMACEUTICALS, INC. + +By: /s/ Jonathan Mow Name: Jonathan Mow Title: CEO + +Date: January 9, 2020 + +SIGNATURE PAGE TO THE CO-DEVELOPMENT AGREEMENT + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +IN WITNESS WHEREOF, the Parties, intending to be legally bound hereby, have caused this Agreement to be executed in duplicate by their duly authorized representatives as of the Effective Date. + +SFJ PHARMACEUTICALS X, LTD. + +By: /s/ Robert DeBenedetto Name: Robert DeBenedetto Title: Director + +Date: January 9, 2020 + +SIGNATURE PAGE TO THE CO-DEVELOPMENT AGREEMENT + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 + + + + + +EXHIBIT LIST + +Exhibit A The Product + +Exhibit B Current Approved CROs + +Exhibit C Current Approved Vendors + +Exhibit D Development Plan + +Exhibit E Executive Officers + +Exhibit F‑1 PB Anti-Bribery and Anti-Corruption Practices + +Exhibit F‑2 SFJ Anti-Bribery and Anti-Corruption Practices + +Exhibit G SFJ European Operational Support + +Exhibit H Warrant + +Exhibit I Timeline + +Exhibit J Manufacturer + +Exhibit K Trial Data Package Purchase Agreement + +Exhibit L AZ License + +Exhibit M Amendment to AZ License + +Exhibit N MedImmune Pharmacovigilance Agreement + +Exhibit O Program Transfer Agreement + +Exhibit P Terms of SVB Subordination Agreement + +Source: PHASEBIO PHARMACEUTICALS INC, 10-K, 3/30/2020 \ No newline at end of file diff --git a/full_contract_txt/PhoenixNewMediaLtd_20110421_F-1_EX-10.17_6958322_EX-10.17_Content License Agreement.txt b/full_contract_txt/PhoenixNewMediaLtd_20110421_F-1_EX-10.17_6958322_EX-10.17_Content License Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..fcf371dd46fd2ac166bd9262fc89e2b73d8c5ec2 --- /dev/null +++ b/full_contract_txt/PhoenixNewMediaLtd_20110421_F-1_EX-10.17_6958322_EX-10.17_Content License Agreement.txt @@ -0,0 +1,125 @@ +Exhibit 10.17 Program Content License Agreement between Phoenix Satellite Television Company Limited and Beijing Tianying Jiuzhou Network Technology Co., Ltd. November 24, 2009 + +Source: PHOENIX NEW MEDIA LTD, F-1, 4/21/2011 + + + + + + Program Content License Agreement This Program Content License Agreement ("Agreement") is entered into between the following two parties on November 24, 2009 in Beijing: Phoenix Satellite Television Company Limited ("Party A" or "Phoenix Satellite TV"), a foreign enterprise duly established and validly existing under the laws of Hong Kong Registered Address: No. 2-6, Dai King Street, Taipo Industrial Estate, Taipo, N. T., H.K. Authorized Representative: Cui Qiang and Beijing Tianying Jiuzhou Network Technology Co., Ltd. ("Party B"), a limited liability company duly registered and validly existing under PRC laws Address: Floor 5 Information Building, No. 12 Zhongguancun South Street, Haidian District, Beijing 100081 China Legal Representative: Qiao Hai Yan Party A and Party B are hereinafter referred to individually as a "Party" and collectively as "Parties". WHEREAS: 1. Party A owns copyrights and other related rights to the programs listed in Exhibit 1 hereto, as amended from time to time; 2. In accordance with the "Agreement Between Phoenix Satellite TV and Phoenix New Media Regarding Cooperation in the Fields of Content, Branding, Promotion and Technology" dated November 24, 2009 between Phoenix Satellite Television Holdings Limited and Phoenix Online (Beijing) Information Technology Co., Ltd., Party B has the right to operate the Phoenix Satellite TV Websites (defined below) and Other Websites (defined below), provide Internet information services such as news, entertainment, and business information, as well as computer information services through such websites and transfer information from Phoenix Satellite TV to mobile network clients, and authorize the use of the Phoenix Satellite TV program content by other information network service providers (collectively, "Party B Business"); and 3. Both Parties agree that Party A will provide the program content of Phoenix Satellite TV to Party B, subject to the terms and conditions hereof. 2 + +Source: PHOENIX NEW MEDIA LTD, F-1, 4/21/2011 + + + + + + NOW, THEREFORE, upon amicable consultation based on principles of equality, mutual benefit and complementary advantage, the Parties have reached this Agreement as follows: ARTICLE ONE DEFINITION 1.1 Unless otherwise referenced herein, each of the terms used herein shall have the meaning ascribed to it below: (i) "Affiliate", with respect to any Party hereto, shall mean any legal person, non-legal person economic organization, or natural person, which owns a controlling interest in, or which is controlling, controlled by or under common control with, such Party, directly or indirectly. As used in this Agreement, "control" means the power of any person to direct or cause the direction of management and policies of another party on account of such person's ownership of equity interest, voting right, the right to appoint directors, by contract or otherwise. (ii) "Business Day" shall mean a date on which commercial banks open for business, other than Saturdays, Sundays and public holidays in mainland China. (iii) "Intellectual Property Right" shall mean authorship right, proprietary trademark right, patent right, business secret ownership right and other intellectual property right under PRC Law. (iv) "Other Websites" shall mean Internet websites whose domain name are licensed by Party A or its Affiliate to Party B and which are operated and managed by Party B upon Party A's approval in writing, other than the Phoenix Satellite TV Websites. (v) "Phoenix Satellite TV Websites" shall mean Internet websites which have the domain name of www.ifeng.com, www.phoenixtv.com or www.phoenixtv.com.cn. (vi) "Program Content", with respect to this Agreement, shall mean all program content set forth in Exhibit 1 to which Party A owns Internet and media copyrights and which are required for Party B Business, including but not limited to programs on news, policy trends, entertainment, business and economic trends. 3 + +Source: PHOENIX NEW MEDIA LTD, F-1, 4/21/2011 + + + + + + (vii) "Program Content Collection" shall mean the collection of Program Content from Phoenix Satellite TV's Chinese Channel, other professional news media, or other information sources. (viii) "PRC Law" shall mean all laws, ordinances, rules, orders, notices, regulations and other regulatory documents having legal binding force, as promulgated from time to time prior to and after the date on which this Agreement becomes effective. (iv) "Taxes" shall mean taxes and fees of all kinds, including all taxes collected in China (including by the central PRC government and various local governments) and in any other jurisdiction, including but not limited to all kinds of ownership tax, interest tax, value added tax, stamp tax, and land and property use tax collected or levied on capital, profit, revenue, sales, or any other taxable item; all duties, fees, deductions, withholding tax, withholding income tax, or penalties or other payment in connection with taxes; and the term "Taxes" shall be interpreted accordingly. (v) "Third Party", with respect to this Agreement, shall mean any company, enterprise, other economic organization or individual, other than the Parties hereto. ARTICLE TWO BASIC PRINCIPLES OF THE LICENSE 2.1 Party B may use the Program Content licensed by Party A only in Party B Business. Without Party A's consent in writing, Party B may not in any way use the Program Content provided by Party A for any purposes other than in connection with Party B Business, nor may Party B permit any third party to use in any way the Program Content licensed by Party A to Party B prior to the publishing of the Program Content on the Phoenix Satellite TV Websites or Other Websites. 2.2 The Parties shall provide the services hereunder fairly and reasonably as if they were unaffiliated entities in an arm's-length transaction. 2.3 Without Party A's consent, Party B may not enter into with any third party any agreement or cooperation which is identical with or similar to this Agreement. 2.4 If other services are required by Party B in Party B Business, Party B shall first provide Party A with the content and requirements of such services in writing. If Party A indicates expressly in writing that it refuses or is unable to provide such services, Party B may turn to third parties for such other services; if, however, Party A agrees to provide such services, then the Parties shall 4 + +Source: PHOENIX NEW MEDIA LTD, F-1, 4/21/2011 + + + + + + negotiate in good faith the content, method and fees of such services. 2.5 In the event of any delay, non-performance or partial performance of any obligations hereunder by Party A, Party A shall give Party B prompt notice in writing and make best effort to assist Party B in obtaining identical or similar program content from other channels. 2.6 During the course of Party A's provision of the services hereunder, Party B shall provide all assistance reasonably required by Party A. ARTICLE THREE SERVICE SCOPE AND METHOD OF PROVISION 3.1 Both Parties agree that Party A shall license the Program Content required in Party B Business to Party B, and Party B shall accept the services provided by Party A, to the extent, at the time or times, and in the manner as agreed to by the Parties herein. 3.2 The Program Content to be licensed by Party A to Party B shall be as set forth in Exhibit 1 hereto, as updated from time to time. If the Program Content required by Party B is beyond that listed on Exhibit 1, as updated from time to time, Party B shall send its written request to Party A promptly and the latter shall license the Program Content described in the preceding phrase to Party B to the extent it has power to do so in accordance with this Agreement. 3.3 In each May during the term of this Agreement, both Parties shall update and adjust the scope of Program Content listed in Exhibit 1 and the Program Content so adjusted shall be the Program Content to be licensed by Party A to Party B for the period of time from May of such year to the next succeeding May. The then adjusted scope of Program Content shall constitute an exhibit hereto and process equal validity as this Agreement. ARTICLE FOUR SERVICE FEE 4.1 The amount of the service fee and its terms of payment shall be as set forth in Attachment 1 to the "Agreement Between Phoenix Satellite TV and Phoenix New Media Regarding Cooperation in the Fields of Content, Branding, Promotion and Technology" dated November 24, 2009 between Phoenix Satellite Television Holdings Limited and Phoenix Online (Beijing) Information Technology Co., Ltd. ("Phoenix Online"). 4.2 The Parties may enter into a separate agreement and establish specific fee rates in respect of services beyond this Agreement in accordance with the principles set forth herein. 5 + +Source: PHOENIX NEW MEDIA LTD, F-1, 4/21/2011 + + + + + + ARTICLE FIVE INTELLECTUAL PROPERTY RIGHTS TO THE PROGRAM CONTENT 5.1 Both Parties acknowledge and agree that with respect to Program Content licensed to Party B hereunder, Party B shall not have any copyright or any other Intellectual Property Right. If Party B obtains any Intellectual Property Right in respect of the Program Content during its use of the same, Party B shall notify Party A and, upon its request in writing, sign all documents and take all actions required to assign such Intellectual Property Right to Party A, and ensure the Intellectual Property Right so obtained by Party A is legitimate, complete, and free from any encumbrance. 5.2 In the event of any legal action taken by Party A to protect any Intellectual Property Right of the Program Content, or any dispute with any third party in connection with any Intellectual Property Right of the Program Content in which Party A is involved (including but not limited to Party A's being the plaintiff/applicant or defendant/respondent in any lawsuit or arbitration), Party B shall provide, at the cost of Part A; all assistance reasonably requested by Party A, provided, however, that if the legal action taken by Party A or the dispute in which Party A is involved is due to or related to Party B's negligence, then the cost of providing such assistance requested by Party A shall be borne by Party B. 5.3 If Party B becomes aware of any violation of any Intellectual Property Right to the Program Content provided by Party A to Party B, it shall take all measures reasonably necessary to preserve the evidence of such third party violation, notify Party A of the same as soon as reasonably possible, and take actions reasonably requested by Party A to assist in legal actions taken or claims made by Party A in order to protect its Intellectual Property Right. 5.4 If, for causes attributable to Party B, Party A sustains any economic losses as a result of any dispute with any third party over the Program Content provided by Party A, Party B agrees to indemnify Party A for all such losses, which losses shall include only the direct losses and reasonable expenses incurred in resolving such dispute (including reasonable attorney fees). ARTICLE SIX PARTY B'S OBLIGATIONS WITH RESPECT TO CONFIDENTIAL INFORMATION 6.1 When providing the Program Content to Party B, Party A may specify the special purpose for which such Program Content shall be used, the extent to which such Program Content shall be transmitted, the time or times at which such Program Content shall be transmitted (including the time at which such Program Content is published on the Phoenix Satellite TV Website or Other 6 + +Source: PHOENIX NEW MEDIA LTD, F-1, 4/21/2011 + + + + + + Websites, or the time at which such Program Content is licensed to any third party by Party B), and the manner by which such Program Content shall be transmitted (including the manner by which such Program Content is published on the Phoenix Satellite TV Websites or Other Websites, or the manner in which such Program Content shall be used by the licensed third party). Party B's use of the Program Content shall be in strict compliance with Party A's requirements. 6.2 Party B shall keep in confidence Party A's business secrets of which Party B may be aware on account of Party B's receipt from Party A of the license to use the Program Content. Upon the termination of this Agreement, Party B shall return to Party A or destroy any document, material or software containing such business secrets and delete the same from any memory devices. 6.3 Party B warrants that it will take all technical methods and confidential measures reasonably available to Party B to ensure that only Party A and certain of Party B personnel designated by Party A may have access to the Program Content licensed by Party A to Party B. Without Party A's permission in writing, Party B may not disclose or sublicense the Program Content to any third party, except for the Program Content related to Party B Business. ARTICLE SEVEN REPRESENTATIONS AND WARRANTIES 7.1 Party A represents and warrants that 7.1.1 it owns copyrights and other related rights to the Program Content set forth in Exhibit 1 hereto, as updated from time to time; 7.1.2 it has taken all appropriate and necessary corporate actions and other actions, authorized the execution and performance of this Agreement, and obtained all appropriate consents, approvals and authorizations required for the execution and performance of this Agreement; and 7.1.3 its signing and performance of this Agreement will not violate or contradict any of its constitutional documents, laws and regulations applicable to it, or any agreement or contract to which it is a party or by which it is bound. 7.2 Party B represents and warrants that 7.2.1 it has taken all appropriate and necessary corporate action and other actions, authorized the execution and performance of this Agreement, 7 + +Source: PHOENIX NEW MEDIA LTD, F-1, 4/21/2011 + + + + + + and obtained all appropriate consents, approvals and authorizations required for the execution and performance of this Agreement; and 7.2.2 its signing and performance of this Agreement will not violate or contradict any of its constitutional documents, laws and regulations applicable to it, or any agreements or contracts to which it is a party or by which it is bound. ARTICLE EIGHT LIABILITIES FOR BREACH; TERMINATION 8.1 Both Parties agree that any breach of any of the warranties, covenants, or provisions hereof by either Party shall constitute a breach of this Agreement, except under circumstances described in Section 8.2 below. In the event of any breach of this Agreement by any Party hereto, the breaching Party shall indemnify the other Party for all of such other Parties losses arising therefrom, which losses shall include only direct losses, reasonable expenses and reasonable attorney fees. 8.2 In the event that 8.2.1 one Party is in breach of its obligations hereunder and fails to cure such breach within ten (10) Business Days following the other Party's written notice thereof, then the non-breaching Party may terminate this Agreement; 8.2.2 one Party enters into a bankruptcy process, Party B's shareholder or equity structure changes (not including changes to Party B's shareholder or equity structure due to the Exclusive Call Option Agreement and Equity Pledge Agreement dated between Party B, Phoenix Online and other relevant parties), or one Party ceases its business operation, then the other Party may send a written notice of termination to such Party and this Agreement shall terminate as of the date on which such written notice is served to such Party; 8.2.3 one Party's performance of its obligations hereunder is held unlawful under the PRC Law, such Party may send a written notice of termination to the other Party upon the promulgation of the relevant PRC Law; 8.2.4 one Party's performance of its obligations hereunder (including but not limited to such Party's ability to perform this Agreement) is, in the reasonable judgment of the other Party, adversely affected by the occurrence of any event, then the unaffected Party may terminate this Agreement upon notifying the other Party in writing; and 8 + + 8.2.5 in exercising its right to terminate this Agreement pursuant to Subsections 8.2.1 to 8.2.4, one Party shall give a written notice of termination to the other Party, without the necessity of obtaining consent from the other Party, and this Agreement shall terminate as of the date on which such written notice is served to the other Party. 8.3 No compensation or indemnification will be required to be made by one Party to the other Party when one Party exercises its right to terminate this Agreement unilaterally pursuant to this Article Eight and no rights or interests of the terminating Party will be adversely affected by the termination of this Agreement. 8.4 Subsection 8.1 shall survive the termination of this Agreement. ARTICLE NINE EFFECTIVENESS 9.1 This Agreement shall become effective on the date on which it is signed and affixed with the corporate seals by the authorized representative of each Party and have a term of five (5) years commencing as of the effective date hereof. 9.2 Upon confirmation by the licensor in writing prior to the expiration of the term hereof, this Agreement may be extended for as long as may be agreed to by both the licensor and licensee through negotiation, provided, however, that the licensee shall not have the right to decide the extension of the term hereof. ARTICLE TEN FORCE MAJEURE In the event that a Party's performance of this Agreement or any covenants of the Parties is directly affected by an earthquake, typhoon, flood, fire, war, computer virus, design loophole in any software tool, hacker attack on the Internet, amendment to law or policy or any other event of force majeure which is not foreseeable or the result of which is not to be prevented or avoided, such Party shall immediately give the other Party a notice by fax of such event and within thirty days (30) thereafter provide a detailed report thereof as well as a certification document explaining the cause for the non-performance or delayed performance of this Agreement, which certification document shall be issued by the public notary of the region in which the event of force majeure occurred. The Parties shall decide through consultation whether performance of this Agreement, in whole or in part, shall be relieved or delayed to the extent affected by such event. With respect to economic losses sustained by either Party as a result of such event, neither Party shall be liable therefor. 9 + +Source: PHOENIX NEW MEDIA LTD, F-1, 4/21/2011 + + + + + + ARTICLE ELEVEN APPLICABLE LAW; DISPUTE RESOLUTION 11.1 The execution, validity, interpretation, enforcement and dispute resolution of this Agreement shall be governed by the PRC Law. 11.2 Any dispute, conflict or claim arising out of or in connection with this Agreement or the performance hereof shall be resolved by the Parties through amicable negotiation, which negotiation shall commence immediately upon notice by one Party to the other of the nature of such dispute, conflict or claim. In the event that such dispute is not resolved within thirty (30) Business Days following such notice, either Party may upon the expiration of the such 30-day notice period submit such dispute to arbitration by the Hong Kong International Arbitration Centre in accordance with the arbitration rules of such centre then in effect. The arbitration shall be conducted in Hong Kong in English and the arbitral award shall be binding upon both Parties. During the resolution (including the arbitration) of the dispute, the Parties shall continue to perform other portions of this Agreement unaffected by such dispute. ARTICLE TWELVE TAXES Both Parties agree that any and all Taxes payable on account of this Agreement or the performance hereof shall be paid by the Party incurring such Taxes. ARTICLE THIRTEEN MISCELLANEOUS 13.1 Party B may not assign its rights and obligations hereunder without Party A's consent in writing and the successors and permitted assigns of the Parties shall be bound by this Agreement. 13.2 Failure to exercise or delay in exercising any right, power, or privilege provided by this Agreement shall not be deemed a waiver of such right, power, or privilege and any partial exercise of such right, power or privilege shall not hinder any future exercise of such right, power or privilege. 13.3 The rights, power and remedies provided for Party A and Party B herein are cumulative and not exclusive, and shall be in addition to any other rights, power or remedies provided by law, regulation, contract or otherwise now or hereafter in effect. 13.4 Any and all notices, approvals, requests, authorizations, instructions or other communications required hereunder (collectively, "Written Documents") shall be made in writing and with a reference to this Agreement. A Written Document shall be deemed duly given by one Party to the other upon personal delivery to the address of the other Party; or on a date which is four (4) business days from the date on which the Written Document is posted through registered or certified mail (postage prepaid and return receipt 10 + +Source: PHOENIX NEW MEDIA LTD, F-1, 4/21/2011 + + + + + + requested), regardless of whether the Written Document is actually received; or on the first business day following the date on which the Written Document is sent by express service (as indicated by the written receipt confirmation); or as indicated on the confirmation report of the fax machine confirming that the Written Document is delivered by fax successfully. 13.5 This Agreement shall supersede all other agreements, written or oral, of the Parties regarding the subject matter of this Agreement and constitutes the entire agreement of the Parties concerning such subject matter. 13.6 This Agreement shall be signed in two (2) original copies in Chinese, with each of Party A and Party B holding one (1) copy, and both copies shall be equally authentic. IN WITNESS HEREOF, the Parties have signed this Agreement as of the date first written above. [Remainder of this page intentionally left blank] 11 + +Source: PHOENIX NEW MEDIA LTD, F-1, 4/21/2011 + + + + + + [signature page] Party A: Phoenix Satellite Television Company Limited + + Party B: Beijing Tianying Jiuzhou Network Technology Co., Ltd. Authorized Representative: 12 + + Authorized Representative: /s/ Keung Chui + + + +Source: PHOENIX NEW MEDIA LTD, F-1, 4/21/2011 + + + + + + [signature page] Party A: Phoenix Satellite Television Company Limited Authorized Representative: Party B: Beijing Tianying Jiuzhou Network Technology Co., Ltd. + + 13 + + Authorized Representative: /s/ Ming Chen + + + +Source: PHOENIX NEW MEDIA LTD, F-1, 4/21/2011 + + + + + + EXHIBIT 1 Program Content licensed by Party A to Party B: Phoenix infonews channel Stock Market Snapshot Current Affairs Debate News Talk Financial Journal News Magnifier * Stock Market Express Celebrated China Heritage Taiwan Weekly Focus Hong Kong Viewpoint Journalist On The Spot Finance Point To Point Mainland Q&A Phoenix Chinese channel Studying Around Greater China with Yang Jinlin My Patriotic Heart Belle Gourmet China Forum Phoenix Aerostation Mainland Q&A Wisdom From The East Dialogue With World Leaders Tiger Talk Premium Spectacular China Impression Southern China Anecdote National Centre For The Performing Arts * Inside Big Cases * Starface * 14 + +Source: PHOENIX NEW MEDIA LTD, F-1, 4/21/2011 + + + + + + A Date With Luyu Eight-Minute Reading Entertainment Whirlwind * Lawrence Viewpoint Sisy's News Peter Qiu's Talk Shi Ping Financial Insight Hacker Zhao Shao Kang Panoramic Eyeshot Of Phoenix * Emergent China Trendy Guide: Cat Walk Art Of Taste Secret Documentary Observation Post Of Military Situation Social Watch Head Start In Finance From Phoenix To The World * Newsline Behind The Headlines With Wentao Celebrity Museum + +* excluding the music contained in the Program Content, pieces and data authorized by third party to Phoenix Satellite TV and pieces and materials which are not produced by Phoenix Satellite TV itself. 15 + + + +Source: PHOENIX NEW MEDIA LTD, F-1, 4/21/2011 \ No newline at end of file diff --git a/full_contract_txt/PhotronicsInc_20171219_10-QA_EX-10.28_10982650_EX-10.28_Outsourcing Agreement.txt b/full_contract_txt/PhotronicsInc_20171219_10-QA_EX-10.28_10982650_EX-10.28_Outsourcing Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..0cbc87f959ec2842f30d77c9a9e542c33a2619d0 --- /dev/null +++ b/full_contract_txt/PhotronicsInc_20171219_10-QA_EX-10.28_10982650_EX-10.28_Outsourcing Agreement.txt @@ -0,0 +1,231 @@ +Exhibit 10.28 Execution Version OUTSOURCING AGREEMENT + +This OUTSOURCING AGREEMENT (this "Agreement") is made and entered into as of the 16t h day of May, 2017, by and among + +Photronics, Inc., a Connecticut corporation with its principal place of business at 15 Secor Road, Brookfield, Connecticut, U.S.A ("Photronics"), + +Dai Nippon Printing Co., Ltd., a Japanese corporation with its principal place of business at 1-1, Ichigaya Kagacho 1-chome, Shinjuku-ku, Tokyo, Japan ("DNP"), + +Photronics DNP Photomask Corporation, a company limited by shares organized and formed under the Company Act of the Republic of China with its principal place of business at 4f, #2, Li-Hsin Road, Science Park, Hsinchu, Taiwan, ROC ("PDMC"), and + +Xiamen American Japan Photronics Mask Co., Ltd., a limited liability company organized and formed under the People's Republic of China with its principal place of business at R203-95, South Building of Torch Square, No. 56-58 Torch Road, Gaoxin District, Xiamen, Fujian Province, Peoples Republic of China (the "Company"). + +Each of Photronics and DNP is hereinafter referred to as a "Shareholder" and collectively as the "Shareholders", each of the Shareholders and PDMC is hereinafter referred to as a "Supplier" and collectively as the "Suppliers", and each of the Suppliers and the Company is hereinafter referred to as a "Party" and collectively as the "Parties." + +ARTICLE 1. BACKGROUND Photronics and DNP wish to participate in a joint venture, either directly or indirectly through their respective Affiliates, as equity interest owners in the Company, and to carry on the Business through the Company. The Parties are engaged, among other things, in the design, development, fabrication and sale of advanced photomasks. Photronics and DNP, directly or indirectly, are the shareholders of and own PDMC, a joint venture of Photronics and DNP in Taiwan. In connection with the formation of the Company, Photronics and DNP have entered into "Joint Venture Operating Agreement" (the "China JV Operating Agreement") dated as of the 16t h day of May, 2017. In connection with the China JV Operating Agreement and in order to support the business objective of the Company, including but not limited in order to (i) [***]the Company desires to outsource or [***]of the Company pursuant to the terms and conditions set forth herein. + +The Parties hereby agree and confirm the exclusive distribution mechanism set forth in Section 10.1 hereof. All terms and conditions for [***]will be governed by this Agreement. Any and all [***]set forth in Section 5.15 of the China JV Operating Agreement. + +1.1 Defined Terms Unless otherwise defined in this Agreement and Schedule 1 hereof, terms defined in the China JV Operating Agreement shall have the same meanings when used in this Agreement. + +Source: PHOTRONICS INC, 10-Q/A, 12/19/2017 + + + + + +1.2 Incorporation by Reference Section 12 (Miscellaneous) of the China JV Operating Agreement shall be incorporated by reference into and form an integral part of this Agreement, mutatis mutandis. + +ARTICLE 2. PURCHASE ORDERS + +2.1 Outsource and Issuance of Purchase Orders Subject to the terms and conditions mentioned hereunder, the Parties agree to the outsource model based on [***]as follows, and the Parties also agree that they may add additional Products to this Agreement through additional Purchase Orders [***] + +For the avoidance of doubt, the outsource model is purely made based on the [***] + +Moreover, it is acknowledged by the Parties that[***] Therefore, subject to the prior notification to, and the instruction and the express approval of the customers, the Steering Committee could reasonably decide or change the outsource model at its own discretion in accordance with the China JV Operating Agreement. + +In any case, none of the Parties shall unreasonably [***] of the Products to take advantage of the outsource relationship or [***] + +A. Outsource Transition Period During the Outsource Transition Period, as for the Purchase Orders received by the Company from: (a) [***] (b) [***] (c) [***] + +(d) [***]and + +(e) [***] + +B. Post Outsource Transition Period (a) During the Post Outsource Transition Period, the following rules for outsourcing the Purchase Orders to the Suppliers (the "Outsource Stepdown Rules") will apply: Year 1: [***] Year 2: [***] Year 3: [***] Year 4 and thereafter: [***] + +For the sake of clarity and by way of example, as for the above calculation; X: [***] Y: [***] Z: [***] + +2 + +Source: PHOTRONICS INC, 10-Q/A, 12/19/2017 + + + + + +(b) If PDMC and the Company [***] (i) if [***]or (ii) if [***]. + +C. General (a) The Purchase Orders for the [***][***]in accordance with the . + +(b) PDMC and the Company will make best efforts to be [***]The terms and conditions of such [***] + +(c) For the avoidance of doubt, the Parties agree and confirm that, during the Outsource Transition Period and aside from the Outsource Stepdown Rules in [***]. + +(d) The Parties acknowledge and agree that [***] + +2.2 Purchase Orders The Suppliers will make good faith efforts to accept all [***]from the Company that comply with this Agreement including adhering to all relevant specifications of the Product as set forth in the [***]entered into between the Company and the Supplier (including the [***] (as defined below)). The Suppliers shall notify the Company of acceptance or rejection of a [***]within [***]hours of receipt of a [***]. Failure of the Suppliers to accept or reject a [***]within [***]hours shall constitute acceptance of such [***]. The lead time for the Products will be as set forth in the applicable [***]. Each [***]shall include the following: (a) the Company's [***]number; (b) identification of the quantity and type of the Product ordered by the Company; (c) the price of each Product ordered per Schedule 2 attached hereto; (d) the requested delivery date (subject to the applicable Product Lead Time); (e) any shipping instructions, including preferred carrier and shipping destination; and (f) the specifications for the Product. Notwithstanding anything contained in this Agreement and the China JV Operating Agreement to the contrary, and for the sake of clarity, [***]. 2.3 Purchase Order Terms All [***]agreed to between the Company and a Supplier shall be governed by this Agreement unless otherwise agreed by the Company and the [***]which receives such [***]in writing; the Parties agree that the [***]submitted by the Company to any of the [***] will mirror the terms and conditions of the [***]with respect to specification for the Product and the end customer's requirement submitted to the Company by the Company's [***]. Those terms and conditions of the [***]may be discussed and agreed between the Company and any of the Suppliers prior to issuance of such [***]to any of the [***]. + +2.4 Rescheduling and Cancellation The Company may not [***]any portion of an accepted [***]unless the Supplier fails to fulfill any material term of such accepted [***]. The Suppliers shall at all times use prudent material planning practices, including by way of example, [***]. The Company [***]will be provided on a [***] basis covering a rolling [***]period. The Company will provide the Suppliers with such [***]which will be updated [***] and [***]which will be updated [***] and will be used for planning purposes only. If a Supplier's ability to supply any Product is constrained for any reason, such Supplier shall immediately notify the Company of such supply constraint for the purpose of resolving the same. + +3 + +Source: PHOTRONICS INC, 10-Q/A, 12/19/2017 + + + + + +2.5 End of Life Each of the Suppliers may terminate its obligations to supply a particular Product under this Agreement by giving written notice of the end of life of such Product to the Company at least [***]before the effective date of such termination (a "Product EOL Notice"), provided that (a) the relevant Supplier shall supply, and the Company shall purchase, such Product ordered pursuant to this Agreement until the effective date of such termination and including any accepted Purchase Orders outstanding on the effective date of termination, and (b) the relevant Supplier is [***]to its other [***] with respect to such Product. When the Company becomes aware that any of its customers will finish purchasing any type of the Products, the Company shall promptly notify the Supplier(s) thereof. Notwithstanding the above, if the Company has a long term supply agreement with a customer and the Suppliers (i) has confirmed in writing its intention to [***] hereunder and (ii) are actually providing Product in support of such supply agreement, neither Supplier can, to the extent of its confirmation, to supply the Company until such s[***]; provided however that, if a Shareholder terminates the [***], such Shareholder can immediately terminate [***]. + +2.6 Certain Claims Notwithstanding any other provisions in this Agreement, either Supplier may [***]after Suppliers' receipt of a written [***] that is deemed credible by written opinion of the relevant Supplier's outside counsel, provided that the relevant Supplier also [***] with respect to such Product; provided further that (i) relevant Supplier shall give the Company at [***]calendar days prior written notice of its intent to discontinue [***], and (ii) at the Company's request, if the Company will using the [***], Suppliers will provide the Company with all reasonable information and assistance necessary, [***]to the relevant [***]in accordance with the terms and conditions to be agreed by the relevant Supplier and the Company, to enable the Company to manufacture or have the [***]. Any such granted [***]shall [***] and provided information shall be destroyed or returned in the event the relevant Supplier resumes[***]. The Company shall defend, indemnify and hold harmless the relevant Supplier from and against any claims, expenses and costs (including but not limited to attorney and other professional fees and expenses), settlement of third party claims (if negotiated and approved by the Company), damages and liability arising from or related to [***]or the violation of the [***] of any [***]solely with respect to the Company's manufacture, use, sale, offering for sale, importation or distribution of any [***]during the [***]calendar days period specified in this Section 2.6 or manufactured by or on behalf of the Company under the license granted in this Section 2.6. + +2.7 Priority for New Products [***] for the Company will be reviewed and discussed by the Steering Committee. The Steering Committee role will be as defined in Section 5.15 of the China JV Operating Agreement. + +ARTICLE 3. PURCHASE ORDER ALLOCATION + +Notwithstanding any other provisions in this Agreement, the Parties agree that, [***]hereunder by the Company to any of the Suppliers shall be at [***] pursuant to the [***]of the Company taking into account the [***]of the Company's [***]and the [***] for the [***]; provided however that the Company will attempt to allocate the [***] with each Supplier pursuant to the [***]set forth in Section 2.1 above. The Parties will review the [***] of orders between Suppliers on a [***]. If at the end of each [***]the [***]to one of the Suppliers is not consistent with the [***]set forth in Section 2.1 above, the Company will attempt to [***]to the Suppliers with [***]for the [***]until such Supplier has received [***]set forth in Section 2.1 above. Notwithstanding the above, each of the Parties agrees and acknowledges that if a Supplier cannot provide Product to the Company because of [***]of the Company, then the Company will be [***] to seek the Product from the other Supplier without [***]of Product orders between the Suppliers. + +4 + +Source: PHOTRONICS INC, 10-Q/A, 12/19/2017 + + + + + +ARTICLE 4. PRODUCT PRICES AND PAYMENT + +4.1 Prices The purchase price for the Product shall be as set forth in Schedule 2. + +4.2 Invoices; Payments The Suppliers shall issue invoices to the Company for any amounts payable to the Suppliers pursuant to this Agreement upon shipment of the applicable Products to the Company. Payments for Products delivered in accordance with the Purchase Orders, and any other to be made by the Company to Suppliers hereunder, shall be made in the Applicable Currency within [***]from the shipment of the applicable Products delivered. + +4.3 Taxes All amounts payable for Product sold by the Suppliers to the Company hereunder are exclusive of any taxes. The Company shall be responsible for and shall pay any applicable sales, use, excise or similar taxes, including value added taxes and customs duties due on the importation of the Products and arising from purchases made by the Company under this Agreement, excluding any taxes based on the Suppliers' income and any applicable withholding taxes. All such taxes shall be determined based upon the final shipment designation of the items identified on the invoice. ARTICLE 5. DELIVERY + +5.1 Risk of Loss and Title Delivery of all Products shall be made pursuant to the Delivery Term. Risk of loss for the Products and title to the Products shall pass to the Company in accordance with the Delivery Term. + +5.2 Delivery Suppliers shall deliver the Product to the Company in accordance with the Delivery Term, shipping instructions in the Purchase Order issued by the Company with regard to the requested delivery date (subject to the Product Lead Time), ship-to address, and carrier. If the Company does not provide shipping instructions, the Suppliers will select the carrier on a commercially reasonable basis. Suppliers shall be responsible for paying freight, handling, shipping and/or insurance charges to the delivery point in accordance with the Delivery Term. + +5 + +Source: PHOTRONICS INC, 10-Q/A, 12/19/2017 + + + + + +ARTICLE 6. LIMITED WARRANTIES + +6.1 Suppliers Limited Warranty Each of the Suppliers warrants that the Products shall comply with the specifications and documentation agreed by the relevant Supplier and the Company in writing that is applicable to such Products for the Warranty Period. This warranty does not apply to any Product failures resulting from misuse, storage in or exposure to environmental conditions inconsistent with those specified in the applicable specifications or documentation, modification of the Product by anyone other than the relevant Supplier. If a Product fails to comply with the foregoing warranty, the relevant Supplier shall, at its option, either [***]such Product, or, in the event the foregoing options are not commercially practicable, [***]to the Company any amounts paid for the applicable Product. Without limiting the remedies specified in Article 8 and Section 9.2, this Section 6.1 states the exclusive remedy of the Company for failure of a Product to conform to the warranty provisions set forth in this Section 6.1. + +6.2 Disclaimer EXCEPT AS EXPRESSLY SET FORTH IN THIS ARTICLE 6, THE PARTIES MAKE NO WARRANTIES OR REPRESENTATIONS TO THE OTHER PARTIES AND EACH PARTY HEREBY DISCLAIMS ANY AND ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING THE WARRANTIES OF MERCHANTABILITY, NON-INFRINGEMENT AND FITNESS FOR A PARTICULAR PURPOSE. + +ARTICLE 7. TERM AND TERMINATION + +7.1 Term This Agreement shall become effective as of the Effective Date and shall continue to be in full force and effect for so long as Photronics and DNP, or any of their Affiliates, each remains a Shareholder of the Company. + +7.2 Termination for Cause A Party shall have the right to terminate its obligations under this Agreement if the other Party materially breaches this Agreement and fails to cure such breach within thirty (30) days after its receipt of written notice of the breach specifying such default. + +7.3 Survival Article 6 (for the duration of the applicable warranty period), Article 7, Article 8 and Article 9 shall survive any termination or expiration of this Agreement. + +ARTICLE 8. INDEMNIFICATION + +8.1 Indemnification by the Suppliers Each of the Suppliers shall, with respect to Products supplied by such Supplier, defend, indemnify and hold harmless the Company from and against any third party claims, expenses and costs (including but not limited to attorney and other professional fees and expenses), settlement (if negotiated and approved by the relevant Supplier), damages and liability to the extent arising from a claim (a) alleging that a Product infringes or misappropriates any Intellectual Property Rights, or (b) arising under products liability theory from a manufacturing defect, and shall pay any judgments finally awarded by a court or any amounts contained in a settlement agreed to by the relevant Supplier arising from such claims. The foregoing indemnity does not cover claims that solely arise from (i) the modification of the Product by any party other than the relevant Supplier, (ii) the combination or use of the Product with other products, processes, methods, materials or devices except as approved by the relevant Supplier, or (iii) the fault of the Company. + +6 + +Source: PHOTRONICS INC, 10-Q/A, 12/19/2017 + + + + + +8.2 Indemnification by the Company Other than claims for which the Suppliers are obligated to indemnify the Company under Section 8.1, the Company shall defend, indemnify and hold harmless the Suppliers from and against any third party claims, expenses and costs (including but not limited to attorney and other professional fees and expenses), settlement (if negotiated and approved by the Company), damages and liability to the extent arising from a claim (a) alleging that a Product supplied by such Supplier infringes or misappropriates any Intellectual Property Rights, or (b) arising under products liability theory from a manufacturing defect, and shall pay any judgments finally awarded by a court or any amounts contained in a settlement agreed to by the Company arising from such claims. The foregoing indemnity does not cover claims that solely arise from (i) the modification of the Product by any party other than the Company, or (ii) the combination or use of the Product with other products, processes, methods, materials or devices except as approved by the Company. + +8.3 Procedure The Party seeking indemnification hereunder (the "Indemnified Party") agrees to promptly inform the other Party (the "Indemnifying Party") in writing of such claim and furnish a copy of each communication, notice or other action relating to the claim and the alleged infringement. The Indemnified Party shall permit the Indemnifying Party to have sole control over the defense and negotiations for a settlement or compromise, provided that the Indemnifying Party may not settle or compromise a claim in a manner that imposes or purports to impose any liability or obligations on the Indemnified Party without obtaining the Indemnified Party's prior written consent. The Indemnified Party agrees to give all reasonable authority, information and assistance necessary to defend or settle such suit or proceeding at the Indemnifying Party's reasonable request and at the Indemnifying Party's expense. + +ARTICLE 9. LIABILITY AND REMEDY + +9.1 Limited Liability EXCEPT FOR LIABILITY ARISING FROM BREACHES OF A PARTY'S CONFIDENTIALITY OBLIGATIONS CONTAINED IN THE NON-DISCLOSURE CLAUSE IN SECTION 12.17 OF THE CHINA JV OPERATING AGREEMENT, BREACHES OF LICENSE GRANTS CONTAINED HEREIN, AND EXCEPT FOR AMOUNTS PAYABLE TO THIRD PARTIES TO FULFILL INDEMNITY OBLIGATIONS DESCRIBED IN ARTICLE 8, (A) IN NO EVENT SHALL ANY PARTY HAVE ANY LIABILITY TO THE OTHERS, OR TO ANY PARTY CLAIMING THROUGH OR UNDER THE OTHER, FOR ANY LOST PROFITS, ANY INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES OF ANY KIND IN ANY WAY ARISING OUT OF OR RELATED TO THIS AGREEMENT, HOWEVER CAUSED AND UNDER ANY THEORY OF LIABILITY, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES; AND (B) IN NO EVENT SHALL A PARTY'S CUMULATIVE LIABILITY ARISING OUT OF THIS AGREEMENT EXCEED THE AMOUNTS ACTUALLY PAID, PAYABLE, RECEIVED OR RECEIVABLE BY SUCH PARTY FOR THE PRODUCTS CONCERNED THEREWITH HEREUNDER PURSUANT TO THIS AGREEMENT DURING THE TWELVE (12) MONTHS PRIOR TO THE OCCURRENCE OF THE INITIAL EVENT FOR WHICH A PARTY RECOVERS DAMAGES HEREUNDER. THESE LIMITATIONS SHALL APPLY NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE OF ANY REMEDY. THE PARTIES ACKNOWLEDGE AND AGREE THAT THIS ARTICLE 9 IS AN ESSENTIAL ELEMENT OF THE BARGAIN AND ABSENT THIS ARTICLE 9 THE ECONOMIC AND OTHER TERMS OF THIS AGREEMENT WOULD BE SUBSTANTIALLY DIFFERENT. + +7 + +Source: PHOTRONICS INC, 10-Q/A, 12/19/2017 + + + + + +9.2 Remedies Notwithstanding anything stated to the contrary in this Agreement, the Parties acknowledge that any breach of Section 2.5 [***]of this Agreement and/or the non-disclosure clause in Section 12.17 of the China JV Operating Agreement by a Party would cause irreparable harm to the other Parties, and that the damages arising from any such breach would be difficult or impossible to ascertain. As such, the Parties agree that a Party shall be entitled to injunctive relief and other equitable remedies in the event of any breach or threatened breach of Section 2.5 of this Agreement and/or the non-disclosure clause in Section 12.17 of the China JV Operating Agreement. Such injunctive or other equitable relief shall be in addition to, and not in lieu of, any other remedies that may be available to that Party. The Parties shall be entitled reasonable attorney fees and costs of enforcement of this Agreement. + +ARTICLE 10. OTHER ARRANGEMENT + +[***][***]. + +(Signature Page Follows) + +8 + +Source: PHOTRONICS INC, 10-Q/A, 12/19/2017 + + + + + +Execution Version IN WITNESS WHEREOF, the Parties hereto have duly executed this Agreement as of the day and year first above written. + + PHOTRONICS, INC. By: Name: [***] Title: [***] DAI NIPPON PRINTING CO., LTD. By: Name: [***] Title: [***] Photronics DNP Mask Corporation . By: Name: [***] Title: [***] Photronics DNP Mask Corporation Xiamen By: Name: [***] Title: [***] + +Outsourcing Agreement Signature Page + +Source: PHOTRONICS INC, 10-Q/A, 12/19/2017 + + + + + +Schedule 1 + +Definitions + +Capitalized words and phrases used and not otherwise defined elsewhere in this Agreement shall have the following meanings: + +1. "Affiliate" of a Person means any other Person which, directly or indirectly, controls, is controlled by, or is under common control with, such Person. The term "control" (including, with correlative meaning, the terms "controlled by" and "under common control with"), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise. A Person shall be deemed an Affiliate of another Person only so long as such control relationship exists. + +2. "Applicable Currency" means (i) for payments in relation to Photronics, U.S. Dollars, (ii) for payments in relation to DNP, U.S. Dollars, and (iii) for payments in relation to PDMC, US Dollars. + +3. "Delivery Term" means DDP (Incoterms 2010) at delivery point in China. The Delivery Term may be otherwise determined by the Company and the Supplier in the Purchase Order where delivery point is other place than China. + +4. [***]. + +5. "Intellectual Property Rights" means all rights in and to (a) U.S. and foreign patents and patent applications, including all divisions, substitutions, continuations, continuations-in-part, and any reissues, re-examinations and extensions thereof, (b) copyrights and other rights in works of authorship, (c) unpatented inventions, trade secrets, data, processes, or materials, (d) mask work rights, and (e) other intellectual property or proprietary rights of any kind now known or hereafter recognized in any jurisdiction, but excluding trademarks, service marks, trade names, trade dress, domain names, logos and similar rights, and the goodwill associated therewith. + +6. [***]. + +7. [***]. + +8. [***]. + +9. [***]. + +10. [***]. 11. "Product" means photolithographic integrated circuit photomasks for [***] and related services. + +12. "Purchase Order" means any of the following (a) a written purchase order issued to the Company by third party buyers for the purchase of certain Products; (b) a written purchase order issued by the Company to a Supplier for a quantity of the Product. + +13. "Warranty Period" means a period of [***]from the relevant Supplier's shipment of the Product. *** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission. + +Source: PHOTRONICS INC, 10-Q/A, 12/19/2017 + + + + + +Schedule 2 + +Product Prices + +The prices for each Product outsourced to the Suppliers shall be [***]. + +*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission. + +Source: PHOTRONICS INC, 10-Q/A, 12/19/2017 \ No newline at end of file diff --git a/full_contract_txt/PlayboyEnterprisesInc_20090220_10-QA_EX-10.2_4091580_EX-10.2_Content License Agreement_ Marketing Agreement_ Sales-Purchase Agreement1.txt b/full_contract_txt/PlayboyEnterprisesInc_20090220_10-QA_EX-10.2_4091580_EX-10.2_Content License Agreement_ Marketing Agreement_ Sales-Purchase Agreement1.txt new file mode 100644 index 0000000000000000000000000000000000000000..ca8c8485d1bcc52bbc2ca78f52cbf7b6e8e1fff2 --- /dev/null +++ b/full_contract_txt/PlayboyEnterprisesInc_20090220_10-QA_EX-10.2_4091580_EX-10.2_Content License Agreement_ Marketing Agreement_ Sales-Purchase Agreement1.txt @@ -0,0 +1,497 @@ +Exhibit 10.2 Portions of this Exhibit have been omitted pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. The omissions have been indicated by asterisks ("*****"), and the omitted text has been filed separately with the Securities and Exchange Commission. CONTENT LICENSE, MARKETING AND SALES AGREEMENT This CONTENT LICENSE, MARKETING AND SALES AGREEMENT (the "Agreement") is entered into and effective as of January 15, 2008, (the "Effective Date") by and between eFashion Solutions, LLC, a New Jersey limited liability company having its principal place of business at 80 Enterprise Avenue South, Secaucus, NJ 07094 ("EFS") and Playboy.com, Inc., a Delaware corporation with offices at 680 North Lake Shore Drive, Chicago, IL 60611 ("Client," which shall include affiliates controlling, controlled by or under common control with Playboy.com, Inc.). WHEREAS, Client is in the business of, inter alia, developing, marketing, promoting, distributing and selling branded and unbranded merchandise via physical media, worldwide, via mail order catalogs (the "Catalogs") where orders are taken via multiple order channels including online, phone, fax and mail and via the Internet through its PLAYBOY-branded and BUNNY SHOP-branded e-commerce websites as designated on Exhibit 1 (the "Websites") (the Catalogs and Websites shall be collectively referred to as the "Playboy Commerce Business"). WHEREAS, the parties intend that EFS will operate under license from Client the Playboy Commerce Business, including, but not limited to, the marketing, promotion and distribution of branded, unbranded and co-branded soft and hard goods which include but are not limited to men's and women's apparel, home, lingerie, men's and women's accessories, jewelry, books and DVD's and related products (collectively, "Merchandise") via the Catalogs and the Websites (including other Micro- Sites (as defined in Section 1.1(d)(vii))). NOW THEREFORE, in consideration of the promises contained herein, the receipt and sufficiency of which are hereby acknowledged, the parties hereto each intending to be legally bound, agree as follows: 1. Operation of the Playboy Commerce Business 1.1. Obligations of EFS. (a) Operations. EFS, at its sole cost and expense, shall be solely responsible for (i) developing, designing, operating, maintaining and distributing the Catalogs; (ii) developing, designing, operating, maintaining and hosting the Websites; (iii) except as otherwise set forth in this Agreement, the creation (except for that provided by Client) and use of all content to be displayed in the Catalogs and on the Websites; and (iv) marketing and promotion of the Playboy Commerce Business. EFS shall be permitted to display on the bottom of each page of the Websites "Powered by eFashionSolutions" which shall appear substantially as set forth in Exhibit 2, attached hereto and hereby incorporated by reference. + +1 + +Source: PLAYBOY ENTERPRISES INC, 10-Q/A, 2/20/2009 + + + + + + (b) Fulfillment Services. EFS, at its sole cost and expense or (with respect to pass-through expenses such as shipping, gift wrapping, etc.) at the consumer's expense, shall be solely responsible for conducting all business activities related to the Playboy Commerce Business, including, but not limited to the following activities: (i) setting the price consumers will pay for Merchandise offered through the Catalogs and Websites and for shipping thereof; (ii) processing all Catalog and Website orders placed by consumers, including, but not limited to, all picking, packing, billing, shipping, gift wrapping and other value-added services necessary to process orders from order placement to delivery, which shall be performed substantially as set forth in Exhibit 3, attached hereto and hereby incorporated by reference (collectively, "Fulfillment Services"); (iii) providing pricing, billing and financial clearinghouse services in connection with the Playboy Commerce Business; (iv) handling all customer service matters (provided, however, that Client and EFS shall agree upon a "hot transfer" process whereby non-e-commerce-related customer calls will be rerouted); (v) handling all financial transactions related to the Playboy Commerce Business, including, but not limited to, establishing merchant accounts with a banking institution to be approved by Client; (vi) handling all aspects of procuring Merchandise to be made available for sale through the Playboy Commerce Business, including, without limitation, all warehouse and inventory maintenance and control; and (vii) except as otherwise set forth in this Agreement, handling all advertising, promotion and marketing relating to the Playboy Commerce Business. Client acknowledges that the efficient and cost effective fulfillment of orders on the Websites will require that third parties that provide Merchandise to EFS under a Playboy license adhere to certain shipping and packaging guidelines provided by EFS, and which comply with Client's packaging guidelines as set forth in Exhibit 3. Client agrees to provide reasonable assistance to EFS to enable EFS to have such third parties agree to abide by the EFS guidelines. (c) Client Approval. All aspects of the Websites and the Catalogs, including, but not limited to, their "look and feel" (including as set forth in Section 1.1(d)(iii) below), use of the Playboy Marks (as defined in Section 7.2), functionality, models to be used and all Merchandise sold therein, shall be subject to Client's prior written approval, which shall not be unreasonably withheld. Further, EFS acknowledges that Client reserves the right to change the names of the PlayboyStore and ShopTheBunny/BunnyShop Catalog and Websites to new Client brands and/or to add names to be used provided that Client provides EFS with no less than six (6) months prior written notice. In the event that names are changed, except to the extent that there is an extenuating reason for such name change, EFS shall be permitted to continue to use domain names then in use for purposes of Micro Sites and/or forwarding domains (i.e., driving traffic to the new names). (d) Websites (i) Unless otherwise agreed by the parties and provided that this Agreement is executed not later than January 15, 2008, EFS agrees that no later than March 1, 2008, both Websites shall launch and be fully operational, with the exception of the gift wrapping which EFS shall make available as set forth in the time and action calendar (attached hereto as Exhibit 12 and hereby incorporated by reference) and local billing (pursuant to Section 3.1, below), and EFS shall be ready to perform all aspects of administration of the Website business, including, but not limited to, all Fulfillment Services. In furtherance of this launch + +2 + +Source: PLAYBOY ENTERPRISES INC, 10-Q/A, 2/20/2009 + + + + + + date, EFS and Client shall perform all activities and deliver all deliverables in accordance with the time and action calendar. Client acknowledges that if it is unable to perform any obligations within the time period agreed to in the time and action calendar that the launch of the Websites may be delayed accordingly. (ii) Client and EFS acknowledge that design and functionality of the Websites consistent with best practices for e-commerce is critical to ensure the maximum sales performance of the Websites and to maintain the goodwill of Client's customers. EFS will utilize best industry practices to maintain the shopping areas of the Websites in order to ensure that such areas feature functionality that is deemed best practice in the e-commerce industry and is updated with all content and brand imagery necessary to keep the shopping areas of the Websites up-to-date and fresh, in all instances maintaining the high level of brand integrity of the PLAYBOY brand while focusing on customer experience. From time to time, Client will provide updated photo and brand elements for purposes of utilization by EFS in Website design. (iii) In addition to any guidelines provided by Client, EFS shall use and comply with any style guides provided by Client to ensure consistency among retail channels (e.g., graphics, patterns, colors, logos, etc.), visual brand displays and seasonal color palettes. EFS shall maintain the shopping areas of the Websites consistent with the style guides (as modified for e-commerce) to maximize sales, brand appearance and marketability. Client will provide new brand and content assets from time- to-time along with updated style guides in both digital and hard copies, and EFS will update the Websites and future Catalogs accordingly within a commercially reasonable time following receipt. As of the Effective Date hereof, updated style guides are provided twice per year. EFS will have not less than six (6) months advance notice of upcoming new style guides. (iv) EFS will host all content displayed on the Websites on an EFS-hosted server provided by EFS at its sole cost and expense. EFS may at its election use a reputable third party hosting service to host the Websites; provided, however, that EFS shall nevertheless be responsible for ensuring the availability of the Websites as set forth in this Agreement. EFS shall provide as required all updates of content on the Websites, including enhancements, modifications and additions thereto. (v) EFS agrees to at all times during the Term use its best efforts to market the Websites no less diligently than it does other online properties managed by EFS on behalf of third parties (including without limitation, maintaining best practice functionality, search engine optimization tactics, utilizing customer acquisition and retention campaigns, etc.). (vi) EFS shall take all reasonable measures to ensure the performance of each of the Websites, including, at a minimum, availability at least ninety-nine and one-half percent (99.5%) of the time per month as averaged over any one (1) month period, excepting scheduled maintenance or a Force Majeure Event (as defined in Section 14.7). (vii) Subject to the prior, written approval of Client, which shall not be unreasonably withheld, EFS shall have the right at its sole cost and expense to design and launch as many micro- and sub-domain websites as EFS deems appropriate in order to take full + +3 + +Source: PLAYBOY ENTERPRISES INC, 10-Q/A, 2/20/2009 + + + + + + advantage of online marketing channels (collectively, "Micro Sites"); provided, however, that all such Micro Sites shall be designed and maintained consistent with the terms of this Agreement. At a minimum, EFS agrees to launch a version of the PlayboyStore.com Website, which does not contain products or content containing nudity, marital aid or massager Merchandise, within forty-five (45) days following launch of the PlayboyStore.com Website. (viii) Front-End Platform. In the event that EFS chooses to use the Demandware, Inc. ("Demandware") front-end platform software and services for the Websites, EFS shall enter into a separate agreement directly with Demandware; provided, however, that the terms of any such agreement must be approved by Client in advance in writing. (e) Catalogs (i) EFS agrees that (A) the first issue of each of the Catalogs shall be sent to consumers by March 15, 2008; and (B) no later than March 1, 2008, EFS shall be ready to perform all aspects of administration of the Catalog business, including, but not limited to, all Fulfillment Services. (ii) EFS shall provide a copy of each Catalog to Client for review and approval not less than five (5) business days prior to printing. EFS shall promptly make any changes to the Catalog as may be reasonably requested by Client. No Catalog shall be sent to printing without the written approval of Client, which shall not be unreasonably withheld. (f) Models and Photography. EFS agrees that all female models depicted in or in connection with the Playboy Commerce Business shall be approved by Client and shall be Playmates (or other Playboy models, including, but not limited The Girls Next Door) as requested by the Client unless otherwise mutually agreed in advance in writing by the parties. In addition, EFS agrees to shoot major photography in connection with the Playboy Commerce Business in Los Angeles and in coordination with Client, as requested by Client and in line with current and past practices (taking into account changes in Client's Catalog- related strategy) with respect to process, cost and frequency. EFS shall be responsible for all costs and expenses in connection with such photography, including, but not limited to, payments to models and photographers, based upon an estimated schedule of costs attached as Exhibit 4. EFS shall secure model and photographer releases in a form provided by Client and shall provide all content created under this Section 1.1(f) to Client within thirty (30) days of creation. All such photographs shall be deemed Playboy Content for purposes of this Agreement, for which EFS shall have a license to use during the Term solely in connection with the Playboy Commerce Business and as is necessary to promote the Websites. During the Term, Client shall not be permitted to sell or otherwise provide such photographs to third party retailers (except for those retailers operating under the PLAYBOY brand) or Licensees (as defined in Section 2.4), without the prior written approval of EFS. (i) Client shall own all content produced pursuant to Section 1.1(f) (whether or not actually used), and EFS hereby assigns to Client all right, title and interest, including all rights in copyright, in and to the photographs and materials, and agrees to cooperate with all reasonable requests by Client, and take all reasonable actions, to effect or perfect such assignment. EFS hereby provides Client with an irrevocable power of attorney appointing Client as its irrevocable attorney-in-fact coupled with an interest to execute all such assignments on + +4 + +Source: PLAYBOY ENTERPRISES INC, 10-Q/A, 2/20/2009 + + + + + + behalf of EFS in the event that EFS fails to do so within thirty (30) days following written request by Client. Client hereby grants to EFS a limited and perpetual right and license to use such photographs and materials for research and forecasting purposes, including, but not limited to, combining the same with reports and analytics concerning the performance of the Websites, providing information to strategic partners to better define consumer purchasing habits, and for trend forecasting and planning purposes. In addition, during the Term, EFS may use such photographs and materials to provide information to Client Licensees to better define consumer purchasing habits, refine the design and performance of the Websites and EFS Portals on which the Merchandise is sold in connection with any EFS Analysis (as defined below), and for marketing and planning purposes. For the avoidance of doubt, no information provided to third parties under this Section 1.1(i) shall: (i) specifically or by inference identify or in any way reference Client; (ii) disclose any proprietary information of Client; or (iii) disclose any personally identifiable information of or otherwise identify any consumer of the Websites or the Catalogs. (g) Compliance with Guidelines. EFS shall at all times comply with the provisions and limitations set forth in Client's editorial and advertising guidelines, which are attached hereto as Exhibit 5 and hereby incorporated by reference, as the same may be amended from time to time at Client's sole discretion, effective upon fifteen (15) business days prior written notice to EFS (the "Guidelines"). (h) Compliance with Laws. Throughout the Term, EFS shall be solely responsible for knowledge of and compliance with all applicable international, federal, state and local laws, rules, regulations, ordinances, industry guidelines and similar restrictions (collectively, "Laws") in connection with operation of the Playboy Commerce Business. EFS shall be responsible for monitoring such Laws and taking any actions necessary to keep compliant all aspects of the Playboy Commerce Business, including, but not limited to, the Privacy Policy (as defined in Section 5.1(a)), as well as best practices relating to Direct Marketing Association ("DMA") Guidelines (as they relate to the DMA Privacy Promise, pander files, etc.). (i) Product Placement. At no additional cost to Client, EFS will provide preferential placement in the Catalogs and/or on the Websites, as requested by Client, for certain Merchandise from time-to-time, e.g. apparel, magazines, books, DVD's, etc. or marketing campaigns that tie to events and initiatives of Client and its affiliates, consistent with Client's past practices in the prior placement of such items in the Catalogs and/or on the Websites. (j) Staffing/Retention of Client Employees. EFS agrees to staff the Playboy Commerce Business sufficiently to operate and grow the Playboy Commerce Business. An initial organizational chart approved by both parties is attached as Exhibit 6, attached hereto and hereby incorporated by reference. EFS agrees to employ certain individuals who are currently employed by the Client (names, titles and current salaries are listed in Exhibit 6), the hiring of whom shall be complete no later than March 1, 2008. Client shall coordinate with EFS regarding the termination of these employees and their subsequent hire by EFS. Each of the hired employees shall be required to comply with all policies and procedures of EFS which are generally applicable to its employees; provided however that levels of seniority and tenure of hired employees (as they relate to vacation time, etc.) will carry over to EFS. Client shall have + +5 + +Source: PLAYBOY ENTERPRISES INC, 10-Q/A, 2/20/2009 + + + + + + input and approval rights regarding the hiring of key positions in connection with the Playboy Commerce Business, including replacement personnel, which approval shall not be unreasonably withheld. EFS agrees that ***** primary responsibilities will continue to be the Playboy Commerce Business. (k) Keywords. EFS may use Playboy Marks as keyword-targeted advertising on any portal, search engine or other website; provided, however that such use is directly related to the Merchandise available on the Playboy Commerce Business or the promotion of the Websites. Any use of Playboy Marks as keywords not directly related to Merchandise shall be subject to Client's prior written approval. (l) Service Model Option. Client shall have the right upon not less than six (6) months prior written notice to request that, at any time as of the third anniversary of the Effective Date, EFS provide its services to Client via a "service model," in which case, upon effective date of transition to a service model, EFS will no longer be a licensee but rather a vendor. In such transition to a service model, the parties will work in good faith to establish a reasonably equivalent economic benefit for EFS (adjusting for operational responsibilities and economic risk being transferred to Client). The parties agree that Client will not be charged a higher fee than what is being made available by EFS to its other Clients for similar services. The terms of such arrangement will allow for Client to recognize the top-line revenues from the Playboy Commerce Business as well as assume responsibility for various operations of the business as determined by Client, with the remaining services to be provided by EFS. In such event, EFS shall provide Client with all best practice services and tools that are provided to EFS' largest clients. The parties further agree that in the event Client elects to receive services hereunder via the "service model," during the transition to the service model, the operation of the Websites will remain on the EFS core technology platform. (m) Insurance. EFS shall maintain at all times during the Term of this Agreement insurance as provided below and shall name Client, its parent company, subsidiaries and affiliated entities and their respective officers, directors, shareholders, agents and employees as additional insureds to the extent of indemnity provided herein under its liability policies as follows: (i) Commercial general liability insurance including premises/operations, broad form property damage, independent contractors, and contractual liability covering EFS' obligations hereunder for bodily injury and property damage, with a combined single limit of not less than $1,000,000 each occurrence and $6,000,000 umbrella coverage; (ii) Workers' compensation insurance in statutory amounts covering EFS and its employees; and (iii) Errors and omissions insurance, and employer's liability insurance in an amount not less than $1,000,000 per accident/disease. (iv) All insurance required above shall be carried with insurance companies licensed to do business in the state(s) where operations are maintained with a rating + +6 + +Source: PLAYBOY ENTERPRISES INC, 10-Q/A, 2/20/2009 + + + + + + of no less than A-. EFS shall deliver to Client, upon execution of the Agreement, certificates of insurance as evidence of the required coverages. EFS agrees that these policies shall not be canceled or materially changed without at least thirty (30) days' prior written notice to Client. Such notice shall include written confirmation and details of replacement insurance coverages and other material revisions to the policies, which shall be effective immediately upon any cancellation or material change in EFS' policies in order that no gap in coverage results. 1.2. Obligations of Client. (a) Client will provide instructions and specifications for linking to the Licensed Domain Names (as defined in Section 7.3) from the EFS-hosted server. (b) Client will provide image and descriptive content, the selection of which shall be at Client' discretion, related to the Client Inventory (as defined in Section 2.2) as may be in Client's possession, subject to rights availability and the license grant contained in Section 7.1 (collectively, the "Playboy Content"), for use by EFS in connection with the Playboy Commerce Business. Client shall use commercially reasonable efforts to ensure that all digital images provided to EFS conform to the file format and size requirements specified by EFS. Client will use commercially reasonable efforts to provide EFS with at least six (6) months notice prior to providing any new brand imagery, brand elements or style guides, and EFS will prepare a time and action calendar for the updating of respective sections of the Websites and/or Catalogs. (c) Client shall be solely responsible for the design and maintenance of www.playboy.com (the "Playboy Site"). Client agrees to place a persistent shopping button on the main navigation bar of the Playboy Site (with "Shop Playboy" or such other wording as may be mutually agreed upon by the parties), and Client further agrees that the shopping button will be located on the main navigation bar of all sub pages. Client will also promote the Playboy Commerce Business with calls to action in its rotation of house ads throughout the Playboy Site (the placement of which to be determined by Client in its sole reasonable discretion, taking into account conversion rates and click-through success), with creative to be provided by EFS and approved by Client. EFS acknowledges that the Playboy Site is currently undergoing a redesign. The parties will work together in good faith to provide additional promotion on the Playboy Site of the Playboy Commerce Business, which shall fit within context of the new design of the Playboy Site. Notwithstanding the foregoing, Client agrees that the shopping button directing customers to the Websites will continue to be located on the main navigation bar appearing above the fold on the Playboy Site and all sub pages. Client and EFS will work together in good faith to provide additional promotion of the Websites licensed by EFS. 2. Merchandise. 2.1. Merchandise Assortment. (a) The Merchandise mix shall be determined by EFS in its reasonable discretion in operating the business with input and collaboration from Client, provided that EFS agrees it will merchandise individual items as directed by Client based on factors such as alignment with Client's retail stores (for Bunny Shop only) or for new Client media initiatives (e.g., a new book, special edition of PLAYBOY Magazine, etc.) with unit decisions made by + +7 + +Source: PLAYBOY ENTERPRISES INC, 10-Q/A, 2/20/2009 + + + + + + EFS in its reasonable discretion. The parties agree that there will be regular merchandising meetings between the parties to discuss sales performance, fashion, brand and retail trends, and initiatives. It is contemplated that such meetings shall take place no less than once per month during the first year of the Term and then no less than quarterly thereafter. (b) The parties agree that the Merchandise mix as of the Effective Date for each of the Websites and Catalogs is an approved baseline of categories and the general mix of Merchandise and that there will be no material deviations from such mix without the mutual agreement of Client and EFS, provided however that (i) EFS shall use commercially reasonable efforts to work with Client to align the merchandising of the Bunny Shop with that of Client's retail stores and (ii) EFS shall collaborate with Client to reduce the amount of unbranded (i.e., non-Playboy branded) apparel from its current levels (currently ***** of all apparel and ***** of the total Merchandise mix), which shall in no event comprise more than ***** of EFS' total Merchandise mix. For the avoidance of doubt, Merchandise shall not include ticket sales to Client-sponsored or other events. For purposes of this Agreement, the term "branded Merchandise" shall refer to Merchandise which contains or references any of the Playboy Marks or is otherwise branded or labeled with a Playboy Mark, and the term "unbranded Merchandise" shall refer to Merchandise which does not contain or make reference to any of the Playboy Marks. (c) Notwithstanding the provisions of this Section 2.1, if Client determines in its sole discretion that certain Merchandise must be removed or altered for legal reasons, EFS shall promptly take such action required by Client. If Client requests that EFS change or discontinue any Merchandise for reasons other than legal, Client will provide EFS with sufficient notice and a reasonable sell-off period to minimize any disruption to the Playboy Commerce Business and EFS shall comply. In the event that the Merchandise required to be removed is a current item being sold and such removal results in an actual material impact on revenues or Merchandise Gross Margin as demonstrated by EFS, EFS and Client will work together to agree on an equitable adjustment to the Minimum Royalty. 2.2. Purchase and Use of Existing Inventory. EFS will purchase from Client all existing product inventory of Merchandise held by or on behalf of Client in connection with the Playboy Commerce Business, including, but not limited to, back issues of PLAYBOY Magazine held by Client as of forty-five (45) days after as of the Effective Date hereof, as determined by Client (collectively, the "Client Inventory"), as set forth in Section 6.6. During the Term, Client Inventory supplied to EFS shall be sold by EFS solely through the Playboy Commerce Business. 2.3. Transition Period. In addition, prior to launch of the Websites, Client (in collaboration with EFS) shall purchase new and replenishment Merchandise on behalf of EFS for March 1, 2008 orders, with such Merchandise to be shipped to EFS directly. For such orders, EFS shall pay the vendor in full, with such payments to be made directly to each vendor in accordance with such vendor's payment terms, and therefore, the Merchandise purchased in connection with March 1, 2008 orders shall not be subject to the discount for Client Inventory set forth in Section 6.6. 2.4. Licensees. Client shall notify each of its Licensees (as defined below) of the provisions of this Agreement relating to the sale and provision of Merchandise to EFS. EFS + +8 + +Source: PLAYBOY ENTERPRISES INC, 10-Q/A, 2/20/2009 + + + + + + shall be permitted to deal directly with and purchase Merchandise directly from those third parties licensed by Client to produce products under the PLAYBOY brand ("Licensees"). EFS shall be free to negotiate directly with Licensees, and Client will use commercially reasonable efforts to assist EFS in securing favorable terms on pricing and service levels. EFS acknowledges, however, that Client cannot guarantee that EFS will secure such favorable terms. EFS shall enter into separate agreements with all Licensees and any such agreements shall supersede any agreement between Client and such Licensee solely with respect to EFS' relationship with such Licensee, as approved by Client. 2.5. International Sales. For a period of one (1) year after launch of the Websites, EFS shall be permitted to fulfill orders placed by customers in the UK and Australia *****; provided, however that: (a) EFS is solely responsible for the collection and remittance of all regulations, tariffs, VAT and any other taxes or charges; and (b) during this period, EFS may not sell or otherwise ship EFS Produced Merchandise apparel. During the foregoing one (1) year period (the "US Shipping Period"), EFS shall be permitted to initiate negotiations for the terms of purchase of Merchandise from local Licensees in the territories. In the event that EFS has not entered into meaningful negotiations with any Licensee within three (3) months following the end of the US Shipping Period, or if negotiations do not result in an actual agreement within six (6) months following the end of the US Shipping Period, then Client may remove such market(s) from the Territory (as defined in Section 3.4) in its sole discretion. 2.6. Manufacture of Merchandise. (a) Subject to provisions in existing agreements as disclosed herein on Exhibit 7, which shall be updated from time-to-time, Client's prior written consent and the Licensees' right of first refusal as set forth below, EFS shall be permitted to design and manufacture, or arrange for third parties (which have been approved by Client in advance in writing, said approval not to be unreasonably withheld) to manufacture on its behalf, products branded with the Playboy Marks to be sold on the Websites and/or through the Catalogs ("EFS Produced Merchandise"). EFS agrees that it shall approach Licensees regarding any planned EFS Produced Merchandise and give such Licensees a seven (7) day right of first refusal with respect to the design and manufacture thereof, whereby EFS may set forth commercially reasonable requirements with respect to pricing, delivery and product specifications. If such Licensee is unwilling or unable to comply with EFS' request, EFS shall be free to proceed with the manufacturing of EFS Produced Merchandise as set forth in this Section 2.6. ***** (b) In EFS' discretion, EFS Produced Merchandise may be created in any product categories where there is no exclusivity conflict with a Client Licensee, as set forth in Exhibit 7. (c) Subject to Sections 2.6(a) and (b), EFS may subcontract the manufacture of EFS Produced Merchandise, provided: (i) EFS notifies Client in advance of any intended supplier/subcontractor and obtains Client's prior written approval of such supplier/subcontractor, which shall not be unreasonably withheld; (ii) EFS obtains from each such supplier/subcontractor an executed written agreement in the form substantially identical to that attached hereto and made a part hereof as Exhibit 8; and (iii) furnishes a copy of each such executed agreement to Client. EFS shall abide by, and shall ensure that any third-party + +9 + +Source: PLAYBOY ENTERPRISES INC, 10-Q/A, 2/20/2009 + + + + + + supplier/subcontractor it uses to design and/or manufacture any EFS Produced Merchandise abides by any design, manufacturing and other guidelines of Client. At the end of each Year of the Term hereof and at any other time so requested by Client during the Term, EFS shall provide Client with an updated list of the names and addresses of all manufacturing sources, subcontractors, suppliers and others which have been engaged in the design and/or manufacture of EFS Produced Merchandise. (d) EFS understands and agrees that any and all EFS Produced Merchandise and any other items bearing the Playboy Marks or intended for use in connection with the EFS Produced Merchandise must be approved in accordance with the approval process as set forth in Exhibit 9, attached hereto and hereby incorporated by reference. In the event Client fails to provide its approval or disapproval of any or all things submitted to Client pursuant to this Section 2.6(d) within fourteen (14) days of Client's receipt thereof, EFS may send written notice to Client advising no response was received. If Client does not respond within five (5) days of Client's receipt thereof, then Client shall be deemed to have given disapproval. 2.7. Co-branding. EFS shall have the right to co-brand or co-market certain Merchandise, combining a Playboy Mark with other current EFS clients, subject to Client's approval at Client's sole discretion as to the co-brand partner, the Merchandise that will be co-branded and the appearance of the branding on the Merchandise. Any co-branding with non-EFS clients will be subject to prior written approval by Client on a case by case basis. The parties agree that the co-branding or co-marketing of any Merchandise shall be subject to a separate agreement to be negotiated between the parties, including provisions regarding the royalties to be paid to Client for such Merchandise and any approval process to be followed. 2.8. Shopping Portal. EFS shall be permitted to sell Merchandise on EFS owned and operated shopping portal websites ("EFS Portals") subject in all respects to the standards, approvals and requirements applicable to the sale of Merchandise on the Websites and provided that integration with third party brands and products is acceptable to Client, approval not to be unreasonably withheld. EFS agrees that it will use the merchandising presence on the EFS Portals to also market the Websites in order to drive additional customer acquisition. 2.9. Mass-Customized Merchandise. Client agrees that mass-customized Merchandise (i.e., Merchandise allowing consumers to choose customizable options, including, but not limited to, color) shall be available for sale on the Websites and/or through the Catalogs, such that customers may select and order pre-configured semi-customized Merchandise based upon specifications that shall be agreed upon in advance by Client and EFS. EFS shall be responsible for fulfilling orders of all semi- customized Merchandise, including fulfilling any build-to-order or special features requested by the customer, as permitted during the order process. 2.10. Exclusive Merchandise. Subject to Client's prior written approval in each case, EFS shall have the right to work with Client's manufacturers for the production of Merchandise that will be designed and offered for sale exclusively via the Playboy Commerce Business. 2.11. Merchandise. All EFS Produced Merchandise, co-branded Merchandise, mass-customized Merchandise, exclusive Merchandise and Client Inventory shall be deemed "Merchandise" for purposes of the calculation of Royalties (defined below) to be paid by EFS. + +10 + +Source: PLAYBOY ENTERPRISES INC, 10-Q/A, 2/20/2009 + + + + + + 2.12. Merchandise Supplied to Client and Employees. EFS agrees to make Merchandise available to Client for Client's own use, such as for events, photo shoots, gifts, etc. ***** when at least two (2) weeks' notice is provided, and ***** when less than two (2) weeks' notice is provided. In addition, employees of Client and EFS shall be permitted to purchase Merchandise through the Playboy Commerce Business and shall receive a ***** discount on posted prices. Further, EFS acknowledges that Client may offer discounts of up to ***** to Client's premium customers at Client's discretion as part of a loyalty program or other promotional incentive, and EFS shall honor such discounts. 2.13. Product Quality. EFS hereby warrants and agrees that: (a) the Merchandise designed, manufactured, advertised, promoted, sold or distributed under this Agreement shall meet the high standards of quality, workmanship, material, design, size, color and style established by Client from time to time and in accordance with the terms and conditions of this Agreement, provided that EFS can rely on the approvals granted by Client pursuant to Section 2.6; (b) EFS will not knowingly or negligently cause or authorize any or all of the Merchandise not conforming to this Agreement to be sold or distributed, as doing so may adversely affect Client's goodwill in the Playboy Marks; and (c) any such non-conforming Merchandise shall be destroyed at EFS' expense. All of the Merchandise shall conform to and comply with, in all respects, all Laws governing the design, quality, labeling and safety of such Merchandise and shall not violate the rights of any third parties. EFS shall not cause, condone or authorize: (x) the use of any substandard or offensive materials in or in connection with any of the Merchandise; (y) any violation of any Law, including, but not limited to, provisions thereof imposing advertising standards or requiring trade or content description of the Merchandise; or (z) the use of any Playboy Mark or any other word, device or symbol associated in any way with any or all of Client and its subsidiaries and affiliates in connection with any product or activity that is not the subject of this Agreement. 3. Territory. 3.1. International Sales. Upon the launch of Websites, the exclusive territory for the Websites will include the USA, Canada, UK and Australia (collectively, the "Website Territory"). For any market that is included in the initial Website Territory or is added later, EFS agrees to (a) actively market, including, but not limited to, via SEO (optimizing the Websites and creating custom pages to maximize search engine optimization in local markets), search engine marketing and affiliate marketing, (b) provide local billing and customized Websites for local audiences, vis a vis language and targeted merchandising, and (c) provide competitive and timely fulfillment. Client agrees to register and maintain the applicable domain name extensions in each such market, including .ca, .au, .com, and .uk for the Websites; provided that such domain names are available. Client acknowledges that the functionality for local billing will not be deployed by March 1, 2008, but will be deployed for the UK and Australia not later than ninety (90) days following launch of the Websites. 3.2. Pilot Program. Client agrees that within six (6) months of the launch of the Websites, Client and EFS will use commercially reasonable efforts to collaborate on a strategy for an international expansion of the customer base for the Websites beyond the established Website Territory and to identify up to two (2) markets for a pilot test to actively market. If the test is successful as determined by Client in its reasonable discretion, these markets will be added + +11 + +Source: PLAYBOY ENTERPRISES INC, 10-Q/A, 2/20/2009 + + + + + + to the Territory under the terms of the Agreement. 3.3. Continuation of Current Online Business. Client agrees that, barring cultural sensitivities, or regulatory or legal circumstances, EFS shall be permitted to continue operating the Websites to fulfill international online business as is currently being conducted. 3.4. Catalog Territory. Upon the launch of the Catalogs, the exclusive territory for the Catalog will include the USA and Canada ("Catalog Territory"). The Website Territory and the Catalog Territory shall be collectively referred to as the "Territory." The parties agree that the Catalog Territory is the initial territory for the Catalogs and, within a reasonable time period after the launch of the Websites, to discuss and agree upon the strategy for the distribution of the Catalogs throughout the Website Territory. In the event that if within one (1) year of launch of the Websites, EFS has not begun distribution of the Catalogs in the UK or Australia, Client may, in its sole discretion: (a) rescind EFS' right to pursue such distribution; and (b) either by itself or through third parties, effect Catalog distribution in those countries; provided that in either case, EFS shall perform all order fulfillment in connection therewith in accordance with the terms and conditions of this Agreement and provided the parties can reach agreement on the financial terms associated with such services. 3.5. Pre-Existing Domestic and International Partners. EFS understands that Client has pre-existing agreements internationally and domestically (e.g., product Licensees, retail store partners, location-based entertainment venues and media partners). EFS agrees that it will work in good faith with such Client partners to identify areas of cross promotion and other synergies. 3.6. International Products. EFS understands that certain markets will have their own product Licensees, and EFS will comply fully with all restrictions (including, but not limited to, with respect to regulatory and brand issues) and exclusive arrangements for all markets. Given that there may be different product margins in such territories, the associated Royalty will be computed separately for international markets (pursuant to Section 6.1(c)), as necessary. 4. Advertising Commitments. 4.1. Catalog Budget. EFS will commit to an annual Catalog budget equal to or greater than *****, which represents ***** of the actual amount spent by Client on the Catalogs for 2007. In addition, EFS shall use commercially reasonable efforts to achieve a target in 2008 of not less than ***** of 2007 Catalog circulated pages. It is EFS' intent to maximize both Website and Catalog sales, and the parties agree that they will collaborate during the Term to define the budget and sales matrix to maximize sales in both channels to bring the greatest overall sales growth. EFS shall have the right to decrease the Catalog budget below the ***** minimum only if EFS can demonstrate that online marketing activities yield a higher return-on-investment and provided all such reduced dollars are then reinvested in online marketing spend over and above the minimum online marketing commitment described in Section 4.2, below. + +12 + +Source: PLAYBOY ENTERPRISES INC, 10-Q/A, 2/20/2009 + + + + + + 4.2. Online Marketing Budget. EFS understands and acknowledges that agreement to an online marketing plan is critical to the success of the Playboy Commerce Business. Accordingly, EFS agrees it will spend annually a minimum of ***** of Net Website Sales (as defined below) on online marketing ("Online Marketing Budget"). "Net Website Sales" shall mean total Merchandise sales derived through the Websites via any order channel less applicable, actual Merchandise returns, if any, during the applicable period. In the event such online marketing yields a ***** return or more on spend at an average gross margin return on advertising of *****, then EFS will increase the Online Marketing Budget as it deems appropriate to maximize sales of Merchandise. The Online Marketing Budget will be used by the EFS marketing team to promote the PLAYBOY and BUNNY SHOP brands online, drive traffic to and sales on the Websites, purchase search engine placement, drive affiliate sales and to participate in other online marketing initiatives. In addition, EFS commits to continuous SEO efforts during the Term to maximize discovery of, and algorithmic search results for, the Websites. 4.3. Corporate Marketing Commitments. Client agrees that the following marketing activities shall be performed: (a) Client and EFS shall jointly issue a press release following the execution of this Agreement announcing Client's selection of EFS as its end-to-end ecommerce services and platform provider for the Websites; which release shall be subject to Client's final approval not to be unreasonably withheld; (b) Subject to confidentiality obligations hereunder, EFS may prepare and distribute a case study upon launching the Websites with respect to the business arrangement between EFS and Client, subject to Client's prior written approval not to be unreasonably withheld; (c) Subject to confidentiality obligations hereunder, EFS may to prepare and distribute a second case study within three (3) to six (6) months of the launch of the Websites detailing the return on investment resulting from the business relationship between Client and EFS, subject to Client's prior written approval not to be unreasonably withheld; (d) Client shall provide a reasonable and appropriate reference on behalf of EFS to EFS customers and potential customers contingent upon EFS' successful implementation of services hereunder; (e) Client shall provide reasonable press and investment analyst (in the event that EFS becomes a publicly traded company) support for articles, interviews, and other public relations activities relating to the relationship between EFS and Client. (f) EFS may not issue any press release or make any public statement concerning the subject matter of this Agreement or the parties' relationship without Client's prior review and written approval, which shall not be unreasonably withheld. EFS agrees to promptly make any changes reasonably requested by Client to any public announcement, statement or use of Client's name and/or intellectual property prior to any public release. + +13 + +Source: PLAYBOY ENTERPRISES INC, 10-Q/A, 2/20/2009 + + + + + + 4.4. Third Party Advertising. Client grants EFS the right to: (a) sell and place on the Websites promotional banner advertisements (the frequency, placement and volume of which to be mutually agreed upon by the parties) that advertise and market third party products and services that do not compete with Client's products or services and comply with Client's advertising guidelines ("Advertisements"), provided that such advertising efforts are mutual (i.e., equivalent promotion of Client and its affiliates on third party websites) and are executed in a manner that minimizes adverse impact on sales; and (b) send emails containing Advertisements to customers who specifically opt in to receive email notifications from EFS and Client. All Advertisements on the Websites and emails to Playboy Commerce Business customers will require the prior written consent of Client (which will not be unreasonably withheld or delayed). EFS shall provide quarterly reports detailing page exits, abandonment rates and overall Website conversion rates. If Client determines based upon such reports that any such advertising is adversely impacting Website conversions, EFS will, at Client's direction, cease placing Advertisements on the Websites and/or sending third party Advertisement emails. Client shall be entitled to receive an Advertising Fee in connection with the sale of Advertisements as set forth in Section 6.4. (a) EFS shall be responsible for maintaining the Advertisements on the Websites. EFS shall ensure that the Advertisements do not violate any Law or right of any third party or otherwise contain content reasonably likely to diminish the value of Client's brand or detract from the goodwill of the Client. Upon written request of Client, EFS shall discontinue or modify any Advertisement that in the reasonable opinion of Client is not appropriate for the Client brand or is competitive with Client business. 4.5. Promotion of Client Partners. At no additional cost to Client, EFS will continuously and prominently promote Client's related businesses on the Websites and in emails to customers confirming orders, including without limitation PLAYBOY- branded online, publishing and television properties, or such other businesses as Client may request from time to time; provided, however, that in the event any such promotional activities interfere with or diminish sales on a Website, as demonstrated by EFS to Client's reasonable satisfaction, EFS shall be permitted to reduce or restructure such promotions as reasonably necessary to improve sales on the applicable Website. EFS shall be responsible for determining the timing, frequency and scope of all such promotional activities with input from Client. Creative shall be provided by Client at Client's expense. Where there is traceable resulting commerce from the above activities, EFS will be entitled to Client's then current standard bounties or affiliate fees. 4.6. Catalog Inserts & Packaging Onserts. At Client's cost for materials (but excluding costs for labor or other EFS charges), EFS agrees to include up to two (2) inserts per month in each of the Catalogs and up to two (2) onserts per month in all outgoing Merchandise packaging, promoting Client products and services and/or those of Client's affiliates, Licensees or sponsors. Client shall be responsible for all creative and printing costs associated with such inserts and onserts. EFS may include onserts in product packaging but only with the prior written approval of Client, not to be unreasonably withheld. 5. User Agreements and Data. + +14 + +Source: PLAYBOY ENTERPRISES INC, 10-Q/A, 2/20/2009 + + + + + + 5.1. Terms of Use & Privacy Policy. (a) EFS shall prominently display, as is customary in the industry, and implement a terms of use policy ("TOU") on the Websites, which shall comply with all applicable Laws and which at a minimum prohibits orders from any customer under eighteen (18) years of age (or the applicable age of majority in the jurisdiction in which the customer resides) and explains EFS' purchasing and return policies. EFS shall implement a privacy policy ("Privacy Policy") applicable to users of the Websites and the Catalogs that is no less protective of user privacy than is required under the Laws of or otherwise applicable to the Territory. Such Privacy Policy shall be prominently displayed, as is customary in the industry, within the Websites and the Catalogs and be easily accessible to users. EFS shall not take any action, and shall not operate the Websites or the Catalogs, in contravention of such Privacy Policy or of any applicable Law, including, but not limited to, data protection provisions imposed by the United Sates, the European Union or the other countries of the Territory and other applicable Laws. (b) Client shall have the right to review the TOU and Privacy Policy, to require reasonable changes thereto (subject to applicable Laws), and to request certification from EFS that it is complying with this Section 5.1. All such requests shall be promptly met. 5.2. Information on Usage and Users. EFS shall be solely responsible for and shall ensure the security of all customer data collected in connection with the Playboy Commerce Business, including, but not limited to, personally identifiable information and transaction information (collectively, the "User Data"). Client and EFS shall jointly own and have rights to all User Data collected hereunder provided, however, that EFS shall only use the User Data in strict accordance with the Privacy Policy and, subject to the remainder of this Section 5, solely in connection with the Playboy Commerce Business. EFS shall gather, retain in its records, and take all necessary measures (which may include disclosure in the Privacy Policy and/or an opt-in mechanism) in order to provide such User Data to Client, as well as information on usage and viewing of the Websites and such additional information as Client may reasonably request. EFS warrants that it has implemented and will maintain during the Term of this Agreement an information security program that is reasonably designed to: (a) ensure the security, integrity and confidentiality of User Data collected hereunder; (b) protect against anticipated threats or hazards to the security or integrity of User Data; and (c) protect against unauthorized access to or use of User Data. EFS agrees that included in EFS' information security program are policies and administrative and technical measures specifically prohibiting and preventing the placement of User Data in or on any form of mobile media (e.g., CD's or flash drives and other external storage media). EFS shall notify Client immediately in the event EFS believes that User Data collected hereunder has been or potentially could have been accessed by an unauthorized individual and shall cooperate with Client and indemnify Client regarding any investigation or response to a security breach, including any claims, notifications or protection of Client's employees related therewith. 5.3. Existing User Data. Client holds certain customer data relating to the Playboy Commerce Business ("Existing Customer Data") and hereby grants to EFS a non-exclusive, limited, non-sublicensable, non-transferable, revocable license to store and use such Existing Customer Data solely for purposes of the operation and promotion of the Playboy Commerce + +15 + +Source: PLAYBOY ENTERPRISES INC, 10-Q/A, 2/20/2009 + + + + + + Business. To the extent that EFS makes available to Client any customer data previously collected by EFS and permitted to be disclosed to Client ("EFS Customer Data"), EFS shall retain ownership of such EFS Customer Data and Client shall have the right to use such user data solely in connection with the Websites. Existing Customer Data shall be deemed User Data for purposes of this Agreement; provided, however, that notwithstanding anything to the contrary in Section 5.2, Existing Customer Data shall be owned solely by Client. 5.4. Reporting and Use of User Data. Upon request from Client, EFS agrees to provide to Client any and all User Data generated hereunder and such reports as reasonably requested by Client from time to time relating to User Data. EFS shall use User Data solely for purposes of the operation and promotion of the Playboy Commerce Business, and except as specifically approved in advance in writing by Client, shall not use such User Data to market any other EFS or third-party products or services to users or otherwise use, transfer or sell any User Data collected hereunder. Notwithstanding the foregoing, EFS may use and exchange User Data in accordance with standard DMA practices for purposes of customer prospecting solely in order to grow the Playboy Commerce Business. EFS shall not cross-market between the PLAYBOY-branded Catalog and Website and the BUNNY SHOP-branded Catalog and Website. Client may use User Data free of charge and in any manner (including, to the extent permitted by applicable Laws, sharing such data with its affiliates and partners). Client reserves the right to periodically audit EFS' customer lists to ensure compliance with this Section 5.4 provided, however, that any such audit shall be performed at the offices of EFS (or at such other location(s) as EFS' customer lists may be held) and conducted in such a manner so as to preserve EFS' customer lists as a trade secret. In no event shall Client be permitted to copy, possess, or use EFS' confidential customer data other than to ensure compliance with this Section 5.4. 5.5. Opt-In List. EFS shall be permitted to offer customers who visit the Websites the option to receive emails from EFS concerning the Merchandise as well as offers by EFS or third-parties with which EFS has an established relationship and which have been approved in advance in writing by Client. Any customers who do not specifically opt-in to receiving email communications from EFS shall be excluded from such communications. 5.6. Demographic Data. EFS shall be permitted to collect demographic data from customers that visit the Websites, which shall include: IP address, geographic information regarding the location of the customer (i.e., zip code, area code, city, state and country), age, and gender ("Demographic Data"). Client and EFS shall jointly own and have rights to all Demographic Data collected hereunder. 5.7. Analysis of User Data and Demographic Data. EFS shall have the right to analyze the User Data and Demographic Data for a variety of purposes including, but not limited to, performing market studies, trend reporting, sales performance, demographic studies and comparison/analysis with third party market data and consumer purchasing information ("EFS Analysis"). EFS shall be permitted to combine the EFS Analyses with other EFS studies and, further, to share the EFS Analyses with third parties provided that no proprietary information of Client or personally identifiable information of consumers is disclosed to such third parties. 6. Payments and Fees. + +16 + +Source: PLAYBOY ENTERPRISES INC, 10-Q/A, 2/20/2009 + + + + + + 6.1. Royalties. EFS shall pay a royalty ("Royalty") to Client to be calculated and paid as follows: (a) the Royalty shall be determined based upon the percentage applicable to the Merchandise Gross Margin (pursuant to the chart in Exhibit 10, attached hereto and hereby incorporated by reference); (b) multiplied by the Net Merchandise Sales (as defined below) as applicable in each case for the applicable Calendar Quarter or Year (each as defined below). The Royalty calculation period shall begin upon the first order received by EFS via any order channel (e.g., on a Website, via mail, fax or telephone) and shall be paid to Client within fifteen (15) days following the conclusion of each calendar quarter ("Calendar Quarter") based on the calendar year ("Year"), as calculated on the actual Merchandise Gross Margin and Net Merchandise Sales (each as defined below) for such Calendar Quarter. (a) For purposes of this Agreement, "Merchandise Gross Margin" shall be defined as the Net Merchandise Sales through the Playboy Commerce Business during the applicable Calendar Quarter or Year, less (i) the actual unit cost of goods sold paid by EFS for the manufacture of such goods, which shall not include expenses relating to overhead or allocations, (ii) reductions for markdowns, discounts and allowances, and (iii) actual Merchandise inventory shrinkage during the same period, which shall in no event exceed *****. The Merchandise Gross Margin scale for purposes of calculating the Royalty shall be determined from Exhibit 10 based upon the Minimum Royalty (as defined in Section 6.2) set forth in Exhibit 10. (b) For purpose of this Agreement, "Net Merchandise Sales" shall be defined as total Merchandise sales derived through the Playboy Commerce Business via any order channel less applicable, actual Merchandise returns, if any, during the applicable Calendar Quarter. (c) Pursuant to Section 3.6, EFS shall pay a quarterly Royalty to Client calculated as set forth in Section 6.1 using separate Royalty percentages on a country-by-country basis based on product margins for each such country, as agreed upon by the parties. 6.2. Minimum Royalty. Notwithstanding revenue actually generated by EFS in connection with the Playboy Commerce Business hereunder, it is understood and agreed that the Royalty paid to Client in each Year of the Term shall not be less than the amounts set forth in Exhibit 10 (the "Minimum Royalty"). In the event the Minimum Royalty is not achieved in any Year based on the Royalty payments made in such Year, EFS shall pay the shortfall between the Royalty earned and the applicable Minimum Royalty due, if any, within sixty (60) days of the end of such Year. (a) In the event that the Minimum Royalty is met in any applicable Year, (i) EFS shall not be permitted to carry over any overages into the next Year and (ii) EFS will not be eligible for any refund from any Minimum Royalty or Royalty previously owed or paid to Client. In the event EFS does not meet the full amount of the Minimum Royalty during the applicable Year in which such Minimum Royalty was owed to Client, EFS will not be permitted to offset the shortfall with any overages from any previous or subsequent Year, and a new Minimum Royalty will be due as set forth in this Section 6.2. For the avoidance of doubt, the Minimum Royalty is a minimum net sum from which no taxes or charges of any sort may be deducted. + +17 + +Source: PLAYBOY ENTERPRISES INC, 10-Q/A, 2/20/2009 + + + + + + (b) In the event that this Agreement is terminated prior to the end of the Initial Term, any portion of the Year 1 Minimum Royalty that has been spread across Years 2 through 5 of the Term pursuant to Exhibit 10 and which has not yet been paid to Client, shall immediately become due and owing. 6.3. Royalty on Shipping Charges. In addition, Client shall be entitled to receive a royalty payment on the shipping and handling charges paid by customers during the applicable Calendar Quarter ("Shipping Royalty") equal to the Royalty percentage multiplied by the shipping profit. For purposes of this Section 6.3, the shipping profit shall be calculated as the gross charges for shipping less shipping materials, cost of freight and dunnage. The Shipping Royalties paid to Client shall be counted towards the Minimum Royalty for the applicable Year. If there is no shipping profit, Client shall not be owed any Shipping Royalty, nor will Client be impacted by any shipping losses. 6.4. Advertising Revenues. Client shall be entitled to receive an advertising fee of ***** of the Net Advertising Revenue derived by EFS from Advertisements pursuant to Section 4.4 ("Advertising Fee"). "Net Advertising Revenue" shall be defined as the gross revenue derived from the sale of Advertisements less: (a) all direct costs (i.e., commissions and ad-server related fees) incurred by EFS and third party fees paid out by EFS for the execution, maintenance and ongoing facilitation of Advertisements on the Websites and (b) ***** of gross revenue derived from the sale of Advertisements, which shall be reinvested by EFS for online promotions and advertising ("Advertising Marketing Allocation"). Neither Net Advertising Revenue nor the Advertising Fee shall be counted toward the Minimum Royalty obligation of EFS. 6.5. Payment of Royalties; Reports. Except as otherwise specifically set forth, all fees due to Client shall be due and + +payable on or before the fifteenth (15t h) day following the applicable Calendar Quarter. EFS shall use commercially reasonable efforts to provide within three (3) days, but in no event later than five (5) days, following such Calendar Quarter, regardless of whether any payment is due, a report that includes at a minimum: (a) gross sales broken down by each Website, Catalog and product, gross shipping charges and gross advertising revenue generated during such Calendar Quarter; (b) a detailed calculation of Merchandise Gross Margin, Net Merchandise Sales, shipping profit and Net Advertising Revenue; (c) a detailed calculation of the Royalty, Shipping Royalty and Advertising Fee payable to Client for such Calendar Quarter; (d) Client's aggregate Royalty, Shipping Royalty and Advertising Fee earned and paid to date; and (e) such other information as may be requested by Client from time to time. In addition, EFS shall provide to Client interim monthly reports. 6.6. Purchase of Product Inventory. Pursuant to Section 2.2, EFS shall pay Client a non-refundable purchase price of ***** of the wholesale price (i.e., the Client's original cost) as determined as of forty-five (45) days after the Effective Date for all Client Inventory. Such amount shall be paid Net ninety (90) days following entry of such Client Inventory into EFS' system; provided, however, that EFS shall enter all such Client Inventory upon receipt or shall promptly notify Client in the event it is unable to do so due to missing information (i.e. barcodes) or because any product is incomplete or otherwise in a condition not fit for immediate resale. + +18 + +Source: PLAYBOY ENTERPRISES INC, 10-Q/A, 2/20/2009 + + + + + + 6.7. Method of Payment. All payments required to be made by EFS hereunder shall be made by electronic transfer of immediately available funds in United States Dollars through a bank designated by Client. In the event that EFS receives orders through the Playboy Commerce Business or otherwise hereunder involving foreign currency, in order to determine the proper rate of exchange to be applied to the payments due hereunder, it is agreed that EFS shall calculate such payments on a Calendar Quarter basis in local currency (with each such quarter considered to be a separate accounting period for the purpose of computing the payments) and that EFS shall compute a conversion of each such Calendar Quarter total into United States Dollars utilizing the selling rate of exchange in effect on the last day of each relevant Calendar Quarter as quoted by Reuters in the Wall Street Journal. 6.8. Costs and Expenses. Unless expressly stated otherwise in this Agreement or otherwise agreed in writing, each party shall be responsible for any costs or expenses incurred by it in connection with its obligations under this Agreement. 6.9. Taxes. As between the parties, EFS shall be responsible for, without limitation, any tax, duty, levy, income, royalty, withholding tax or charge required by any Law now in effect or hereafter enacted (other than Client's direct net income taxes) including, without limitation, sales, use, value-added, property, royalty and excise or other similar taxes, licenses, import permits, state, county, city or other taxes arising out of or relating to this Agreement. EFS will be responsible for the timely notification, remittance, filing and reporting of all such taxes to the proper tax authorities at the rates required by Law. 6.10. Accounting Reports. EFS shall provide, at its sole expense: (a) Client acknowledges that EFS is not currently able to provide a SAS 70 Type II Report. EFS will endeavor to become SAS 70 compliant and once compliant, shall provide a SAS 70 Type II Report to Client or its affiliates. Until EFS becomes compliant EFS may provide an alternative report acceptable to Client or its affiliates. Reports pursuant to this Section 6.10(a) shall be provided for the one-year period ending September 30th of each year by December 31st of each year of the Term; and (b) A copy of EFS' Independent Auditors' Report and audited balance sheet for each Year of the Term within thirty (30) days of the close of such audit. 6.11. Verification of Information; Audit Right Generally. During the Term of this Agreement and for two (2) years thereafter, (a) EFS shall maintain complete and accurate books and records relating to revenue generated under this Agreement; and (b) Client and/or its authorized representative(s) shall have the right to examine, review, copy and audit EFS' books and records relating to revenue generated under this Agreement to verify the accuracy of the payments and associated information provided by EFS and to verify EFS' compliance with the terms and conditions of this Agreement. If the result of the audit reveals deviations that indicate that Client was underpaid, EFS shall immediately pay the sum of such underpayment plus interest at a rate of ***** from the date such payment was first due. If the result of the audit reveals deviations by ***** or more for any one year of the Term, EFS shall pay the sum due plus interest as set out above and shall further bear the reasonable costs and expenses associated with audit. + +19 + +Source: PLAYBOY ENTERPRISES INC, 10-Q/A, 2/20/2009 + + + + + + 7. License Grants 7.1. Playboy Content. During the Term and subject to the terms, conditions, and limitations set forth in this Agreement, Client grants EFS a limited, non-exclusive, non-transferable, non-assignable (without any right to sublicense), world-wide license to use, modify, create derivative works of, publish, reproduce, broadcast, exhibit and display the Playboy Content solely in connection with the design, publication, distribution, operation and promotion of the Playboy Commerce Business. (a) In the event that EFS creates any modifications, alterations or other derivative works of any Playboy Content ("Derivative Works"), EFS hereby irrevocably assigns to Client all right, title and interest in and to all of those Derivative Works, including the copyrights and other proprietary rights therein. EFS further agrees to cooperate with Client's reasonable requests to effect or perfect such assignment and hereby provides Client with an irrevocable power of attorney appointing Client as EFS' irrevocable attorney-in-fact coupled with an interest to execute all such assignments on behalf of EFS. All Derivative Works are hereby licensed back to EFS subject to the limitations that are applicable hereunder to the Playboy Content. EFS shall deliver to Client all original versions of Derivative Works upon the request of Client. 7.2. Client Trademarks. During the Term and subject to the terms, conditions, and limitations set forth in this Agreement, Client grants EFS a limited, non-exclusive, non-transferable, non-assignable (without any right to sublicense), world-wide license to use the Client trademarks and/or service marks as set forth on Part A of Exhibit 1 (the "Playboy Marks") solely in connection with the design, publication, distribution, operation and promotion of the Playboy Commerce Business. Except in connection with marketing obligations hereunder or as otherwise expressly permitted by Client in writing, EFS shall not use any Playboy Mark on or in connection with, or to permit or facilitate any presentation or promotion of, any Internet website(s) other than the Websites or any other catalog other than the Catalogs. (a) Use of Playboy Marks. EFS recognizes and acknowledges that the Playboy Marks are internationally well- known by the general public and are associated in the public mind with Client's affiliate, Playboy Enterprises International, Inc. ("PEII"), and are marks in which PEII has acquired considerable and valuable goodwill. EFS acknowledges that Client and PEII have an interest in maintaining the worldwide goodwill, recognition and standards of the Playboy Marks. Consequently, with respect to uses of the Playboy Marks in the normal course of business (i.e., for marketing and promotional purposes), EFS shall submit representative samples of such uses to Client as soon as practicable for purposes of post-use audit. If as a result of any post use audit, Client determines in its reasonable discretion that the use of a Playboy Mark is improper or inappropriate, Client will notify EFS, and EFS shall correct the problem as soon as reasonably practicable. Any uses not in the ordinary course must be approved in advance in writing by Client, and Client shall have the right to require EFS to make any changes and/or corrections with regard to the Playboy Marks as Client may reasonably deem necessary to maintain the quality standards and the goodwill associated with the Playboy Marks. EFS agrees to make and incorporate such changes or corrections promptly upon notice from Client and at EFS' sole cost and expense. + +20 + +Source: PLAYBOY ENTERPRISES INC, 10-Q/A, 2/20/2009 + + + + + + (b) Modifications of Playboy Marks. EFS may modify or alter the Playboy Marks or combine the Playboy Marks with any other words or symbols only if, and to the extent that, Client shall have authorized such modification or alteration or combination specifically in advance in writing. Any such permitted modification/alteration and/or combination shall be referred to herein as an "Authorized Modification." No such authorization by Client shall constitute a representation or warranty that use of the Authorized Modification(s) by EFS or by anyone else will not violate the rights of others in any jurisdiction or that such Authorized Modification will constitute an enforceable trademark in any jurisdiction. (c) Assignment of Authorized Modifications. EFS hereby irrevocably assigns, and Client hereby accepts, all right, title and interest in and to each and every Authorized Modification, and EFS agrees to cooperate with all reasonable requests by Client to effect or perfect such assignment. All Authorized Modifications (if any) are hereby licensed back to EFS subject to the limitations applicable to the Playboy Marks hereunder. (d) Goodwill. EFS will not obtain any right, title or interest in the Playboy Marks by virtue of their use of the Playboy Marks under this Agreement and any additional goodwill associated with the Playboy Marks that is created through use of the Playboy Marks shall inure solely to the benefit of PEII. (e) Variations. During and after the Term, EFS will not apply for or use any domain names, trademarks or service marks that include or are confusingly similar to any of the Licensed Domain Names (as defined in Section 7.3, below), Playboy Marks or any other similar marks or variations thereto. (f) Notices. EFS must display on the Websites and Catalogs such trademark and copyright notices as requested by Client and/or as required by applicable Law. Except as expressly approved in writing by Client, neither the Playboy Marks nor any notices associated therewith may be changed, manipulated or modified in appearance. 7.3. Domain Names. During the Term and subject to the terms, conditions and limitations of this Agreement, Client hereby grants EFS, a limited, non-transferable, non-assignable (without any right to sublicense) world-wide license to use the Internet location or resource designators (URLs, domain names, etc.) set forth in Part B of Exhibit 1 hereto, and/or to the extent approved in advance in writing by Client, as the case may be, modifications thereof (the "Licensed Domain Names"), as the domain name(s) and Internet locators/designators for the Websites during the Term. The Licensed Domain Names shall at all times be owned by PEII as registrant. Client agrees that the registration for the Licensed Domain Names and for any successor URL's shall be maintained and that EFS shall remain the technical contact for the duration of the Agreement. If EFS desires to use any other domain names or Internet locators/designators in connection with the Websites, Micro Sites or otherwise utilizing PLAYBOY- or PLAYBOY-related marks, EFS shall so notify Client, which may at its sole discretion, choose to register the same at its expense. Any such additional domain names or Internet locators/designators shall be owned by PEII as registrant, and EFS shall receive a limited license to use the same as Licensed Domain Names hereunder, solely in connection with the Websites and/or Micro Sites during the Term. Unless otherwise agreed by the parties in + +21 + +Source: PLAYBOY ENTERPRISES INC, 10-Q/A, 2/20/2009 + + + + + + writing, the Licensed Domain Names shall at all times remain on PEII servers and will be redirected to the Websites. 7.4. Client Take-Down Rights. Despite conformity to the Guidelines and/or the terms and conditions of this Agreement and/or the prior written approval by Client, Client shall be entitled to review all uses of the Playboy Marks and all utilizations of the Playboy Content at any time and in its sole discretion. Client shall be entitled to require alteration or termination of any specific use if it determines in its reasonable and good faith discretion that such action is necessary or appropriate and EFS shall promptly comply with any such demand. Nothing in this Section 7.4 shall create any obligation on the part of Client to identify or prevent improper uses of material or inclusion of improper material in connection with the Playboy Commerce Business, nor shall Client or its affiliates have any liability for nonfeasance, negligence, or other conduct in such reviews or for failing to conduct any such reviews. 7.5. Exclusions. Nothing in this Agreement shall restrict Client (or its affiliates) from the following commerce activities in the Territory: any DVD commerce (rental or sales), sales by product Licensees via third-party commerce websites or mail order sales or similar activities. In addition, EFS agrees that Client's location-based entertainment partners, as listed in Exhibit 11, attached hereto and hereby incorporated by reference, which may be updated from time to time, may engage in limited e- commerce activities primarily, but not limited to, for co-branded products (e.g., Playboy at the Palms co-branded merchandise). 8. Confidentiality. 8.1. Confidential Information. EFS and Client each acknowledge that during the Term of this Agreement each party may have access to the proprietary or trade secret information of the other concerning the other's business affairs, property, methods of operation, processing system or other information provided by the disclosing party to the receiving party that is identified as, or should reasonably be understood to be (given its content or the circumstance of its disclosure), proprietary (collectively, the "Confidential Information"). Information shall not be considered Confidential Information under this Agreement that the recipient can document: (a) is publicly known prior to or after disclosure hereunder other than through acts or omissions attributable to the recipient or its employees or representatives; (b) is already known to the recipient at the time of disclosure hereunder without reference to the disclosing party's Confidential Information; (c) is disclosed in good faith to the recipient by a third party having a lawful right to do so; (d) is the subject of written consent of the party which supplied such information authorizing disclosure; or (e) is independently developed by the receiving party without reference to Confidential Information of the disclosing party. 8.2. Obligations. EFS and Client each agree to use the Confidential Information of the other party solely to the extent necessary to fulfill its obligations or exercise its rights hereunder, and not for any other purpose. Each party agrees (a) that it will not disclose to any third party or use any Confidential Information disclosed to it by the other except as expressly permitted in this Agreement and (b) that it will take all reasonable measures to maintain the confidentiality of all Confidential Information of the other party using at least the degree of care and security as each uses to maintain the confidentiality of its own Confidential Information. Notwithstanding the foregoing, each party may disclose Confidential Information (x) to their officers, directors, + +22 + +Source: PLAYBOY ENTERPRISES INC, 10-Q/A, 2/20/2009 + + + + + + employees, agents, attorneys and consultants who need to know such information and who are bound by restrictions regarding disclosure and use of such information comparable to and no less restrictive than those set forth herein, (y) as required by applicable Law, provided that in the case of any filing with a governmental authority that would result in public disclosure of the terms hereof, the parties shall mutually cooperate to limit the scope of public disclosure to the greatest extent possible; and (z) to the extent required by a court of competent jurisdiction or other governmental authority or otherwise as required by Law, provided that the receiving party uses reasonable efforts to provide the disclosing party with prior notice of such obligation in order to permit the disclosing party a reasonable opportunity to take legal action to prevent or limit the scope of such disclosure. 9. Ownership. 9.1. In General. Each party hereby reserves for itself all rights not specifically granted to the other party in this Agreement. Each party will use good faith efforts to cooperate with the other party in the protection of their intellectual property rights. 9.2. EFS. As between the parties, EFS retains ownership of, and all right, title and interest in and to any intellectual property including trademark, trade name, patent, copyright, technology, trade secret, software, source code or know-how created for or relating to the Playboy Commerce Business that was affixed to, used with or incorporated into the Playboy Commerce Business by EFS, but specifically excluding the Client Property, as defined below (collectively, the "EFS Property"). Nothing contained in this Agreement shall be deemed to transfer or convey to Client any ownership rights whatsoever in or to the EFS Property or grant any license to the EFS Property other than in connection with the Playboy Commerce Business. To the extent that Client is deemed to obtain any interest or ownership rights in the EFS Property, Client hereby assigns, transfers and conveys to EFS, to the maximum extent permitted by applicable Law, all of Client's right, title and interest therein used by Client under or in connection with this Agreement so that EFS will be the sole owner of all rights therein and further agrees to cooperate with EFS during and after the Term to effect and perfect all assignments. 9.3. Client. As between the parties, Client retains ownership of, and all right, title and interest in and to any and all Playboy Marks, Playboy Content, Derivative Works, Licensed Domain Names, User Data and any other materials provided by or on behalf of Client to EFS hereunder, which are incorporated in or are otherwise related to the Playboy Commerce Business (collectively, the "Client Property"). Nothing contained in this Agreement shall be deemed to transfer or convey to EFS any ownership rights whatsoever in or to the Client Property. To the extent that EFS is deemed to obtain any interest or ownership rights in the Client Property, EFS hereby assigns, transfers and conveys to Client, to the maximum extent permitted by applicable Law, all of EFS' right, title and interest therein used or created by EFS under or in connection with this Agreement so that Client will be the sole owner of all rights therein and further agrees to cooperate with Client during and after the Term to effect and perfect all assignments. 10. Term and Termination. + +23 + +Source: PLAYBOY ENTERPRISES INC, 10-Q/A, 2/20/2009 + + + + + + 10.1. Term. This Agreement shall commence as of the Effective Date and, unless earlier terminated as provided under this Agreement, shall terminate five (5) years following the date of launch of the first Website, but in no event later than February 28, 2013 (the "Initial Term"). This Agreement shall automatically renew for an additional period of three (3) years (such renewal and each subsequent renewal shall be defined as a "Renewal Term") provided that EFS achieves Net Merchandise Sales of at least ***** during the fourth year following launch of the first Website. In such event, the annual Minimum Royalty during the Renewal Term, if any, shall be equal to the greater of: (a) ***** of the actual Royalty paid to Client in Year 5; and (b) *****. The Initial Term and any and all Renewal Terms shall be collectively referred to as the "Term." 10.2. Termination for Breach. Each party shall have the right to terminate this Agreement, in whole or in part, if the other party materially breaches this Agreement and such breach is not cured within thirty (30) days' written notice from the non- breaching party. 10.3. Termination for Bankruptcy. Each party shall have the right to immediately terminate this Agreement if the other party (a) is involuntarily made subject to any bankruptcy or insolvency proceedings and such proceedings are not dismissed within sixty (60) days of the filing of such proceedings or (b) voluntarily institutes any bankruptcy or insolvency proceedings, corporate reorganization, liquidation, assignment for the benefit of creditors, or appointment of a receiver or trustee. 10.4. Effects of Termination. Upon and after the termination of this Agreement (the "Termination Date"): (a) All accrued and unpaid amounts shall become immediately due and payable, including the pro rata amount of the annual Minimum Royalty for the applicable Year based upon the Termination Date; (b) All licenses granted pursuant to this Agreement shall immediately terminate; (c) EFS shall cease the display and use of the Playboy Content, Derivative Works, Playboy Marks, Authorized Modifications, Licensed Domain Names in any manner; (d) EFS shall return any and all Playboy Content and Derivative Works to Client within five (5) business days of the Termination Date; (e) Each party will promptly, at the direction of the other party, return or destroy any and all Confidential Information of the other party in any medium and all copies thereof; (f) EFS shall discontinue the use of any User Data collected hereunder, and subject to applicable Laws, shall promptly deliver and assign all User Data to Client per Client's instructions; and + +24 + +Source: PLAYBOY ENTERPRISES INC, 10-Q/A, 2/20/2009 + + + + + + (g) If so requested by Client in connection with a planned or potential continuation of the business, EFS shall cooperate with Client and its affiliates in order to transfer any remaining operations to them or any other entity that Client may so designate without interruption of the Playboy Commerce Business' availability. 10.5. Outstanding Orders. As of the Termination Date, EFS shall not process any new orders placed through the Playboy Commerce Business. Notwithstanding the foregoing, EFS may fulfill any outstanding orders placed through the Playboy Commerce Business prior to the Termination Date and may continue collection activities related thereto, which shall be subject to Section 6 hereof. 10.6. Survival. Sections 6.11, 7.5, 8, 9, 10.4, 10.5, 10.6, 11.4, and 12 through 14 shall survive any expiration or termination of this Agreement. In addition, Sections 6.1 through 6.10 shall survive any termination of this Agreement until all amounts due in connection with activities during the Term are paid and all reports provided. 11. Warranties and Disclaimers. 11.1. By Both Parties. Each party represents and warrants that (a) it has the full right and authority to enter into this Agreement, perform its obligations and grant the rights and licenses granted hereunder; and (b) its execution, delivery and performance of this Agreement will not result in a breach of any material agreement or understanding to which it is a party or by which it or any of its material properties may be bound. 11.2. By EFS. EFS further represents and warrants that (a) the Websites and the Catalogs and all content contained therein (but specifically excluding the Playboy Marks and Playboy Content) do not and will not infringe any intellectual property right of any third party; (b) it has all necessary intellectual property rights in and to the Merchandise to be offered for sale through the Playboy Commerce Business; (c) it will at all times abide by and comply with the Privacy Policy and all other Laws applicable to operation of the Playboy Commerce Business, including, but not limited to the CANSPAM Act of 2003 and those related to privacy; (d) it (i) shall use its best efforts to ensure that all performers featured in any content and/or Merchandise offered for sale through the Catalogs and/or the Websites were at least eighteen (18) years of age at the time of production and (ii) shall comply with all record keeping, labeling and other requirements pursuant to Section 2257, as the same may be amended from time to time; (e) it will at all times take commercially reasonable steps to ensure the accuracy of all information contained on the Websites and in the Catalogs; and (f) the Playboy Commerce Business, including, without limitation, the Catalogs and Websites and all aspects thereof, will be operated in a workmanlike, timely and professional manner consistent with industry standards and EFS' operation of other third-party branded commerce offerings. 11.3. By Client. Client further represents and warrants that it has the full right and authority to grant the rights and licenses to the Playboy Marks, the Licensed Domain Names and Playboy Content set forth herein. + +25 + +Source: PLAYBOY ENTERPRISES INC, 10-Q/A, 2/20/2009 + + + + + + 11.4. Disclaimer. Except as expressly set forth in this Agreement, and to the extent permitted by Law, each party expressly disclaims all warranties and representations, whether express, implied or statutory, including any implied warranty of merchantability, non-infringement or fitness for a particular purpose. Client does not warrant that the Playboy Content will be error-free or will meet EFS' specific needs. Client makes no warranty whatsoever regarding the accuracy of the information contained in the Playboy Content. 12. Indemnification. 12.1. By EFS. EFS shall indemnify, defend and hold Client, its parent, subsidiaries and affiliates and the directors, officers, shareholders, employees and agents of each harmless against any claims, suits, losses, liabilities, injuries or damages (including, without limitation, reasonable attorneys' fees and litigation expenses) arising out of any third party claim relating to (a) the Playboy Commerce Business, including, the marketing and operation thereof; (b) the Privacy Policy; (c) EFS' use of any Client Property not permitted by or inconsistent with this Agreement; (d) any claims brought by users, service providers or others in connection with this Agreement; (e) the User Data, including the collection, storage and/or use thereof; (f) any alleged action or failure to act whatsoever in regard to EFS' performance of its obligations and duties under this Agreement; (g) the EFS Sites, including, but not limited to, the operation of the EFS Sites and content contained thereon; (h) any breach by EFS of any of its representations and warranties set forth above; (i) the sale or availability through the Catalogs and/or Websites of any content and/or Merchandise, which includes any performer who was less than eighteen (18) years of age at the time of production; (j) any EFS Produced Merchandise; (k) any alleged non-conformity to or non-compliance with any Law, including, but not limited to, pertaining to the content, design or quality of any portion of the Playboy Commerce Business; or (l) any claim or allegation by a third party claiming rights (including, but not limited to, any copyright, trademark or patent rights) in or to EFS Property, the Derivative Works (to the extent caused by EFS), the Merchandise available for sale via the Playboy Commerce Business or the operation of the Playboy Commerce Business. 12.2. By Client. Client will indemnify, defend and hold EFS, its parent, subsidiaries and affiliates and the directors, officers, shareholders, employees and agents of each harmless against any claims, suits, losses, liabilities, injuries or damages (including, without limitation, reasonable attorneys' fees and litigation expenses) arising out of any third party claim relating to (a) the authorized use by EFS in compliance with this Agreement of the Client Property in connection with Playboy Commerce Business; (b) any alleged action or failure to act whatsoever in regard to Client's performance of its obligations and duties under this Agreement; (c) any breach by Client of any of its representations and warranties set forth above; (d) any alleged non- conformity to or non-compliance with any Law, including, but not limited to, pertaining to the content, design or quality of any portion of the Client Property; or (e) any claim or allegation by a third party claiming rights in or to Client Property. 12.3. Procedure. If a claim is made against an indemnified party, such party will promptly notify the indemnifying party of such claim. Failure to so notify the indemnifying party will not relieve the indemnifying party of any liability which the indemnifying party might have, except to the extent that such failure materially prejudices the indemnifying party's legal + +26 + +Source: PLAYBOY ENTERPRISES INC, 10-Q/A, 2/20/2009 + + + + + + rights. The indemnified party shall cooperate with the indemnifying party in the defense and/or settlement of the claims at the expense of the indemnifying party; provided however, the indemnifying party shall assume control of the defense of such claim. The indemnified party may participate in the defense of the claim at its own cost. Notwithstanding anything contained herein, (a) the indemnified party shall not enter into any settlement or compromise that provides for any remedy of the claim without the prior written approval of the indemnifying party, which approval will not be unreasonably withheld; and (b) EFS may not enter into any settlement or compromise that involves or affects any Playboy Mark, Licensed Domain Name, Playboy Content, Derivative Work or Authorized Modification without Client's prior written approval. 13. Limitation of Liability. EXCEPT IN THE EVENT OF A BREACH OF SECTION 8 (CONFIDENTIALITY) OR LIABILITY ARISING UNDER A PARTY'S INDEMNIFICATION OBLIGATIONS UNDER SECTION 12, IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL, PUNITIVE OR CONSEQUENTIAL DAMAGES ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS AGREEMENT OR ANY MATTER RELATED HERETO, INCLUDING WITHOUT LIMITATION, LOST BUSINESS OR LOST PROFITS, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. 14. Miscellaneous. 14.1. Independent Contractors. The rights and powers herein granted to EFS are those rights and powers of an independent contractor only, and this Agreement shall not, and is not intended to, create any other relationship nor make, constitute or appoint EFS an agent or employee of Client. It is expressly understood and agreed that Client shall not under any circumstances be liable to EFS for all or any part of any losses EFS may sustain. EFS shall have no power to obligate or bind Client in any manner whatsoever. 14.2. Severability. Each provision of this Agreement shall be severable. If, for any reason, any provision herein is finally determined to be invalid and contrary to, or in conflict with, any existing or future law or regulation by a court or agency having valid jurisdiction, such determination shall not impair the operation or affect the remaining provisions of this Agreement, and such remaining provisions will continue to be given full force and effect and bind the parties hereto. Each invalid provision shall be curtailed only to the extent necessary to bring it within the requirements of such law or regulation. 14.3. Assignment. This Agreement shall be binding upon and inure to the benefit of the parties named herein and their respective heirs, legal representatives, successors and permitted assigns. Notwithstanding the foregoing, this Agreement and all rights and duties hereunder shall not, without the prior written consent of Client, in any manner be assigned, mortgaged, licensed, or otherwise transferred or encumbered by EFS or by operation of law; provided, however, that EFS may assign this Agreement to an acquirer of all or substantially all of its assets without Client's consent, but only in the event that in Client's reasonable determination (a) key EFS management (as defined by Client at the time of acquisition) will remain indefinitely with EFS or replacement management is reasonably acceptable to Client and no less experienced than those in place as of the Effective Date hereof; (b) the acquirer can demonstrate to Client's reasonable satisfaction the availability of financial resources, and the ability and intention, to + +27 + +Source: PLAYBOY ENTERPRISES INC, 10-Q/A, 2/20/2009 + + + + + + adequately invest in growing the Playboy Commerce Business (by way of example, the acquirer shall have a minimum net worth equal to or above that of EFS as of the Effective Date hereof); (c) such assignment will not have a detrimental impact on the Playboy Commerce Business or Client's other businesses; and (d) the acquirer is otherwise able to honor all financial terms and assume all obligations of EFS hereunder. In addition, EFS may not assign this Agreement without Client's consent to a competitor of Client or any of Client's businesses. Client's consent to any proposed assignment hereunder shall not be unreasonably withheld or delayed. Any purported transaction not specifically permitted under this Section 14.3 shall be null and void ab initio. 14.4. Entire Agreement; Counterparts. This Agreement constitutes the entire agreement between the parties and supersedes any prior understandings, agreements or representations by or among the parties, written or oral, to the extent they relate to the subject matter hereof. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 14.5. No Waiver; No Third Party Beneficiary. None of the terms of this Agreement may be waived or modified except by an express agreement in writing signed by the parties. There are no representations, promises, warranties, covenants or undertakings other than those contained in this Agreement. No custom or practice of the parties hereto at variance with the terms hereof shall constitute a waiver of either party's right to demand exact compliance with any of the terms herein at any time. The failure of either party hereto to enforce, or the delay by either party hereto in enforcing, any or all of its rights under this Agreement shall not be deemed as constituting a waiver or a modification thereof, and either party hereto may, within the time provided by applicable Law, commence appropriate proceedings to enforce any or all of such rights. Except as expressly provided in this Agreement, no individual or entity other than EFS and Client shall be deemed to have acquired any rights by reason of anything contained in this Agreement. 14.6. Headings. The headings used herein are for convenience only and shall not be deemed to define, limit or construe the contents of any provision of this Agreement. The wording of this Agreement will be deemed to be the wording chosen by the parties hereto to express their mutual intent, and no rule of strict construction will be applied against any such party. Time is the essence of this Agreement. 14.7. Force Majeure. Neither party to this Agreement shall be liable for its failure to perform any of its obligations hereunder during any period in which such performance is delayed by circumstances beyond its reasonable control (each a "Force Majeure Event"), including but not limited to: fire, act of nature, embargo, riot, or the intervention of any government authority; provided, however, that as soon as reasonably practicable prior to any such circumstance, and in any event promptly thereafter, the affected party (a) has so notified the other in writing; (b) takes reasonable measures to avoid or limit the effect or duration of such circumstances; and (c) cooperates with the other party to reasonably alter its obligations hereunder and/or resume performance under this Agreement as soon as reasonably practicable. If any such circumstance persists for longer than ninety (90) days, Client may terminate this Agreement immediately upon written notice without penalty. + +28 + +Source: PLAYBOY ENTERPRISES INC, 10-Q/A, 2/20/2009 + + + + + + 14.8. Notices. All notices, demands, claims, requests, undertakings, consents and other communications which may or are required to be given hereunder shall be in writing and shall be deemed to be properly given when personally delivered to the party entitled to receive the notice or when sent via confirmed email or facsimile, or by United States or International mail, postage prepaid, properly addressed to the respective parties as follows: If to Client: Playboy.com, Inc. 730 Fifth Avenue New York, NY 10019 Attn: Executive Vice President, Business Development With a copy to: Playboy Enterprises International, Inc. 680 North Lake Shore Drive Chicago, IL 60611 Attn: General Counsel If to EFS: eFashion Solutions, LLC 80 Enterprise Avenue South Secaucus, NJ 07094 Attn: Edward Foy, Jr., CEO With a copy to: OlenderFeldman, LLP 2840 Morris Avenue Union, NJ 07083 Attn: Kurt D. Olender, Esq. 14.9. Governing Law and Jurisdiction. This Agreement shall be governed by and construed in accordance with the laws of the Illinois without giving effect to its conflict of laws principles. + +29 + +Source: PLAYBOY ENTERPRISES INC, 10-Q/A, 2/20/2009 + + + + + + IN WITNESS WHEREOF, the parties hereto, intending this Agreement to be effective as of the Effective Date, have caused this Agreement to be executed by a duly authorized representative of each. + + + +PLAYBOY.COM, INC. EFASHION SOLUTIONS, LLC By: /s/ Jeremy S. Westin By: /s/ Edward Foy Name: Jeremy S. Westin Name: Edward Foy Title: EVP, Business Development Title: CEO + +30 + +Source: PLAYBOY ENTERPRISES INC, 10-Q/A, 2/20/2009 + + + + + + Exhibit 1 Playboy Marks & Licensed Domain Names + + * THE GIRLS NEXT DOOR & RABBIT HEAD DESIGN mark may be used in advertising Merchandise bearing the mark only. It should not be used to advertise other goods, such as PLAYBOY goods. If a cast member of "The Girls Next Door" models PLAYBOY clothing for the Playboy Commerce Business or wears PLAYBOY clothing on the show, an informational reference to that may be made, but THE GIRLS NEXT DOOR & RABBIT HEAD DESIGN mark should not be used in connection with such informational reference. Examples of acceptable informational references include "As seen on The Girls Next Door" and "Modeled by the stars of The Girls Next Door." + + + +A. Playboy Marks: · PLAYBOY · PLAYBOY.COM · PLAYBOY STORE · SHOPTHEBUNNY.COM · BUNNY · BUNNY SHOP · BUNNY(RABBIT HEAD DESIGN)SHOP · BUNNY(SILHOUETTE)SHOP · BUNNY COSTUME · RABBIT HEAD DESIGN · THE GIRLS NEXT DOOR * · THE GIRLS NEXT DOOR & RABBIT HEAD DESIGN * · FEMLIN · FEMLIN DESIGN · CYBER GIRL · CYBER CLUB · CENTERFOLD · PLAYBOY CENTERFOLD · CLASSIC CENTERFOLD · PLAYMATE · PLAYMATE OF THE MONTH · PLAYMATE OF THE YEAR · PMOY · INNER VIXEN · HMH · HUGH M. HEFNER · MISS (MONTH) + +B. Licensed Domain Names: · www.playboystore.com · www.playboycatalog.com · www.shopthebunny.com · www.bunnyshopcatalog.com · www.bunnyshopcatalog.net · www.bunnyshopstore.com · Other URLs as may be approved in advance by Client in writing on a case by case basis, including mutually agreed upon Micro Sites + +31 + +Source: PLAYBOY ENTERPRISES INC, 10-Q/A, 2/20/2009 + + + + + + Exhibit 2 "Powered by eFashionSolutions" Creative + + + +32 + +Source: PLAYBOY ENTERPRISES INC, 10-Q/A, 2/20/2009 + + + + + + + + + +33 + +Source: PLAYBOY ENTERPRISES INC, 10-Q/A, 2/20/2009 + + + + + + Exhibit 3 Fulfillment Services Fulfillment Services shall be handled by EFS as follows: (a) Substantially all Catalog and Website orders, including, without limitation, regular phone, mail direct and online orders, received by the end of a Business Day will be processed, picked, packed and shipped on the same day received, and in no event later than the end of the next Business Day. Saturday and Sunday orders will be processed with Monday orders. For purposes of this Exhibit, "Business Day" shall mean any day other than a Saturday, Sunday or other day on which commercial banks in the State of New Jersey for the USA or the applicable country of the Territory are authorized or required by law or executive order to close and shall begin at 9:00 AM and end at 6:00 PM (Eastern Time). (b) Substantially all expedited (next day and 2-day delivery) orders, regardless of channel, received in time for the Monday through Friday 2:00 PM ET cutoff will be picked, packed and shipped that same day. Exceptions: Credit card irregularities, which cannot be resolved same day, will ship the following Business Day with notification to the customer. In the event of system problems that prevent turnover to shipper by last pickup, customers will be notified and packages will be shipped expedited the next Business Day. (c) Substantially all customer returns will be processed within two (2) Business Days of dock receipt. (d) Websites order confirmations or back order or cancellation notices to customers will be provided within one (1) Business Day of receipt. Direct order letters will be produced the next Business Day and substantially all will be mailed that same day. (e) Exact Merchandise ordered at the price(s) specified will be shipped unless the customer approves a substitution. (f) Orders will be packed in professional packaging material including appropriate filler to prevent damage while in transit. Customer Service shall consist of the following: (a) Telephone-based order processing Monday through Friday, 7:00am to 9:00pm, Saturday and Sunday, 9:00am to 5:00pm (Eastern Time). (b) Telephonic and online (e-mail) customer service Monday through Friday, 8:00am to 7:00pm, Saturday, 9:00am to 5:00pm (Eastern Time). (c) Customer service shall address inquiries and complaints with respect to any Merchandise, gift certificates, Catalog orders, Website orders, etc. + +34 + +Source: PLAYBOY ENTERPRISES INC, 10-Q/A, 2/20/2009 + + + + + + (d) All costs in connection with postage, printing and stationary expenses incurred by EFS in furtherance of its customer service obligations hereunder shall be borne solely by EFS. Order Processing shall consist of the following: • Mail order processing and data entry • Phone order processing and data entry • Fax order processing and data entry • Check verification processing • Gift certificate processing and support • Deposit preparation • Held order processing for fraud review/AVS • Customer Service + +35 + +Source: PLAYBOY ENTERPRISES INC, 10-Q/A, 2/20/2009 + + + + + + Exhibit 4 Photography Costs * Costs per day for a typical photo shoot (based on a 7-day shoot): Photographer & Assistants: ***** Equipment & Rentals: ***** Set Design: ***** Styling: ***** Make Up Artist: ***** Playmates/Models: ***** Travel & Hotel: ***** Catering: ***** Estimate: ***** + +* The information set forth in this Exhibit 4 is provided only as an example and estimate of costs associated a typical photo shoot. Nothing herein shall be deemed or interpreted as a guarantee of costs or expenses that may be encountered by EFS. + +36 + +Source: PLAYBOY ENTERPRISES INC, 10-Q/A, 2/20/2009 + + + + + + Exhibit 5 Guidelines A. PURPOSE OF GUIDELINES GENERALLY The purpose of these Guidelines is to help ensure, among other things, that: 1) The Playboy Commerce Business meets the standards of excellence in content, graphic appeal and other qualities that Client and its affiliates seek to maintain; 2) The Playboy Marks are associated only with material of the type and quality generally associated therewith; 3) The validity and effectiveness of the Playboy Marks and the Playboy Commerce Business and the rights and value therein are fully protected; and 4) EFS and its affiliates conduct their activities, both relating to the Playboy Commerce Business and otherwise, in a way that does not jeopardize the Playboy Marks or the reputation and image of any Playboy entity or activity. B. CONTENT GUIDELINES ***** C. LANGUAGE ***** D. PROHIBITED ADVERTISING CONTENT ***** + +37 + +Source: PLAYBOY ENTERPRISES INC, 10-Q/A, 2/20/2009 + + + + + + Exhibit 6 Staffing + + + + + +A. Organizational Chart ***** + +B. Client Employees to be Hired by EFS ***** + +38 + +Source: PLAYBOY ENTERPRISES INC, 10-Q/A, 2/20/2009 + + + + + + Exhibit 7 Licensee Exclusives Restricting EFS Produced Merchandise ***** + +39 + +Source: PLAYBOY ENTERPRISES INC, 10-Q/A, 2/20/2009 + + + + + + Exhibit 9 EFS Produced Merchandise Approval Process + + + +1. EFS understands and agrees that any and all EFS Produced Merchandise and any other items bearing the Playboy Marks or intended for use in connection with the Merchandise (hereinafter collectively referred to as the "Materials") must be approved in advance in writing by Client through Client's online approval submission system. The Materials include, but are not limited to, photography, cartons, containers, labels, wrappers, packaging and other inner and outer packaging materials, fixtures, displays, artwork and printing, advertising, sales, marketing and promotional materials. EFS shall, at its own expense, submit to Client or its designee for written approval, samples of any EFS Produced Merchandise and the Materials at each stage of development thereof, which shall include, but not be limited to: (i) an initial sketch or photograph prior to any manufacture thereof; (ii) a sample prototype or equivalent acceptable to Client; and (iii) two final production-quality samples of that which will be mass produced or manufactured. EFS must obtain Client's written approval of each stage of development before proceeding to the next stage, and in no event shall EFS commence or permit the mass manufacture, advertising, promotion, sale or distribution of any EFS Produced Merchandise or Materials unless and until EFS has received Client's written approval of the samples provided pursuant to (iii) of this Section 1. In the event Client fails to provide its approval or disapproval of any or all things submitted to Client pursuant to this Section 1 within ***** of Client's receipt thereof, EFS may send written notice to Client advising no response was received. If Client does not respond within ***** of Client's receipt thereof, then Client shall be deemed to have given disapproval. 2. To ensure that EFS Produced Merchandise and the Materials are constantly maintained in conformance with the previously approved samples pursuant to Section 1 of this Exhibit 9 above, EFS shall, within ten (10) days of receipt of a request from Client, send or cause to be sent to Client at EFS' expense: (i) such actual samples requested by Client of the EFS Produced Merchandise and the Materials EFS is using, manufacturing, selling, distributing or otherwise disposing of; and (ii) a listing or revised listing of each location where any of the EFS Produced Merchandise and the Materials or either thereof are designed, manufactured, stored or otherwise dealt with, except to the extent such listing or revised listing duplicates currently accurate information previously provided. Client and its nominees, employees, agents and representatives shall have the right to enter upon and inspect, at all reasonable hours of the day, any and all such location(s) and to take, without payment, individual samples of any of the EFS Produced Merchandise and the Materials as Client reasonably requires for the purposes of such inspection. 3. If any of the EFS Produced Merchandise or Materials sent or taken pursuant to Section 2 of this Exhibit 9 above or that otherwise come to the attention of Client does or do not conform in Client's sole opinion to the previously approved samples, Client shall so notify EFS, in writing, specifying in what respect such of the EFS Produced Merchandise or Materials is or are unacceptable. Immediately upon receipt of such notice, EFS shall suspend all manufacture, sale and distribution of all such EFS Produced Merchandise and Materials and shall not resume the manufacture, sale or distribution thereof unless and until EFS has made + +42 + +Source: PLAYBOY ENTERPRISES INC, 10-Q/A, 2/20/2009 + + + + + + + + + + all necessary changes to the satisfaction of Client and has received Client's written re-approval of each of such EFS Produced Merchandise and Materials. 4. Except as otherwise specifically provided in this Agreement, all EFS Produced Merchandise and/or Materials that are not approved by Client or that are determined by Client to be non-conforming or unacceptable shall not be sold, distributed or otherwise dealt with by EFS. All such EFS Produced Merchandise and Materials shall be destroyed by EFS with, if Client so requests, an appropriate certificate of destruction furnished to Client. 5. Any and all sales, distribution or use by EFS of unapproved, non-conforming or unacceptable EFS Produced Merchandise or Materials shall not only constitute an incurable default under the terms of this Agreement, but such EFS Produced Merchandise or Materials also shall be considered unlicensed and an infringement of Client's proprietary rights, and Client shall have the right to bring legal action against EFS for any and all remedies available to Client in addition to the remedies available under this Agreement. EFS acknowledges and agrees that to the extent EFS has followed the approval process as outlined in this Exhibit 9 with respect to EFS Produced Merchandise, EFS shall have had notice of any non-approval, non- conformance and/or unacceptability thereof. 6. Client shall have final approval with respect to the following elements of the Products: (i) selection of Client's images for use on such Merchandise; (ii) manipulation and adaptation of the Playboy Marks for reproduction on such Merchandise; (iii) approval of "strike offs" or other pre-production samples as the parties may agree; and (iv) approval of actual materials to be used for manufacture of such Merchandise. 7. It is specifically agreed by EFS that there shall be no approval by default. No product may be manufactured unless there is a written approval by Client. + +43 + +Source: PLAYBOY ENTERPRISES INC, 10-Q/A, 2/20/2009 + + + + + + Exhibit 10 Payments and Fees ***** + +44 + +Source: PLAYBOY ENTERPRISES INC, 10-Q/A, 2/20/2009 + + + + + + Exhibit 11 Location-Based Entertainment Partners Playboy Club at the Palms Casino Resort Playboy Mansion at Macao Studio City + +45 + +Source: PLAYBOY ENTERPRISES INC, 10-Q/A, 2/20/2009 + + + + + + Exhibit 12 Time & Action Calendar + + + + + +EFS Transition Key Dates Date Contract Signing 1/15/2008 Shipping & Receiving IRI to Prepare Inventory for Shipment Week of 1/21/2008 3 Stages 60 Days + Week of 1/28/2008 Majority of Inventory Week of 2/11/2008 Final Shipment Week of 3/1/2008 EFS to Receive Inventory + +Customer Service Transfer of 800 numbers 2/15/2008 Test Orders 2/18/2008-2/23/2008 Create Live Chat 2/15/2008 Turn on phone Lines 3/1/2008 IRI terminates taking returns 6/1/2008 Turn off IRI CS Lines 6/1/2008 + +Site Development Recreation of current store design 1/1/2008-2/15/2008 Site Testing 2/23/2008 Change DNS from current Host 2/1/2008 Point DNS to new EFS IP 2/27/2008 Go Live 3/1/2008 + +Other IT Abacus/Epsilon Integration 1/1/2008-2/15/2008 + +PLAYBOY/BUNNY SHOP Summer Catalog 2008 START END PRODUCTION SCHEDULE Style Out 11/27/2007 Merchandiser Samples due Final 12/5/2007 Photography 12/10/2007 12/14/2007 Complete tabletop pre pro 12/7/2007 TableTop Photography 12/10/2007 12/17/2007 Creative Page Building 12/12/2007 12/25/2007 Creative Selects Review 1/3/2008 Mktng/Merch/Crtve Proof One 1/7/2008 1/11/2008 Mktng/Merch Proof one Revisions 1/14/2008 1/16/2008 Creative Proof Two 1/16/2008 1/23/2008 Mktng/Merch Final Proof 1/28/2008 2/1/2008 Mktng/Merch Release Pages 2/4/2008 2/8/2008 Separator + +46 + +Source: PLAYBOY ENTERPRISES INC, 10-Q/A, 2/20/2009 + + + + + + + + 47 + +Proof Separations 2/11/2008 2/15/2008 Creative/Separator Files DUE to Printer 2/21/2008 Separator Printer Proofs DUE 2/22/2008 Printer Correction Due to Printer 2/22/2008 Creative ON PRESS 2/25/2008 Printer PRINTING SCHEDULES Paper DUE (40 Days Prior) 2/20/2008 Creative Print Order/Distrib. info Due 2/17/2008 Creative/Mktng Process Tapes DUE 2/21/2008 Marketing Postal DUE 3/6/2008 Marketing Order Form DUE 2/19/2008 Creative Begin Bindery 2/26/2006 3/2/2006 Printer DROP 1-IN HOME 3/19/2008 3/21/2008 Printer DROP 2-IN HOME 4/23/2008 4/25/2008 Printer DROP 3-IN HOME 5/21/2008 5/23/2008 + +Source: PLAYBOY ENTERPRISES INC, 10-Q/A, 2/20/2009 \ No newline at end of file diff --git a/full_contract_txt/PlayboyEnterprisesInc_20090220_10-QA_EX-10.2_4091580_EX-10.2_Content License Agreement_ Marketing Agreement_ Sales-Purchase Agreement2.txt b/full_contract_txt/PlayboyEnterprisesInc_20090220_10-QA_EX-10.2_4091580_EX-10.2_Content License Agreement_ Marketing Agreement_ Sales-Purchase Agreement2.txt new file mode 100644 index 0000000000000000000000000000000000000000..b92300654d02d692760cb17de363ff67e3550576 --- /dev/null +++ b/full_contract_txt/PlayboyEnterprisesInc_20090220_10-QA_EX-10.2_4091580_EX-10.2_Content License Agreement_ Marketing Agreement_ Sales-Purchase Agreement2.txt @@ -0,0 +1,47 @@ +Exhibit 8 SUPPLIER/SUBCONTRACTOR CONTRACT + + + + + + + + + + + + + +1. By execution of this Supplier/Subcontractor Contract ("Contract"), _______________ ("Supplier") agrees and acknowledges that: (i) all images and/or trademarks, including, but not limited to PLAYBOY, (the "Playboy Properties") applied at the request of _______________ ("Purchaser") to merchandise covered by this Contract are owned by Playboy Enterprises International, Inc. ("Playboy"), and when used upon merchandise means that such merchandise is sponsored, approved, recommended or sold by Playboy or its licensees; (ii) Supplier will not sell, ship or otherwise dispose of any such merchandise except upon the order of Purchaser or Playboy; (iii) Supplier will never make, cause others to make or assist others in making, any claim whatsoever to any or all of the Playboy Properties or any trademark, copyright, designation, name, phrase, design or symbol similar thereto in connection with the manufacture, advertising, promotion, sale or distribution of merchandise; and (iv) Supplier will defend, indemnify and hold harmless Purchaser and Playboy and the distributors and dealers and the officers and employees of each of the foregoing against all liability whatsoever which may be incurred by them or any of them as a result of any alleged defects in material or workmanship in the merchandise covered by this Contract. + +2. Supplier agrees that no production or manufacture of any merchandise covered by this Contract will commence until this Contract has been signed, dated and returned by Supplier to Purchaser. Supplier further agrees that it will not produce, cause to be produced or assist in the production of more units than are specified by Purchaser nor will Supplier produce, cause to be produced or assist in the production of any product or item not specifically requested by Purchaser using any or all of the Playboy Properties or any trademark, copyright, designations, names, phrases, designs or symbols similar to any or all of the Playboy Properties during or at any time after the completion of merchandise requested by this Contract. + +3. Supplier will, upon request from Purchaser or Playboy, deliver to Purchaser or will destroy in the presence of Purchaser or its representative(s), all molds, designs or any other elements used in reproducing any or all of the Playboy Properties. + +4. Playboy is an intended third-party beneficiary of this Contract. + +5. This Contract, when attached to a purchase order, shall consist of the entire agreement between the parties and shall supersede any conflicting or contrary terms and conditions of any purchase order or other order form whether supplied by Purchaser or Supplier. + +6. This Contract may not be modified or terminated except in writing, and no claimed modification, termination or waiver shall be binding unless also signed by an authorized representative of Playboy. + +40 + +Source: PLAYBOY ENTERPRISES INC, 10-Q/A, 2/20/2009 + + + + + + + + + + + +7. VIOLATION OF THIS AGREEMENT BY SUPPLIER MAY RESULT IN PROSECUTION FOR PLAYBOY PROPERTIES INFRINGEMENT, UNFAIR COMPETITION AND OTHER CAUSES OF ACTION AND THE IMPOSITION OF FINES AND/OR CRIMINAL PENALTIES. + +SUPPLIER PURCHASER (Name of Company - Please Print) By: By: Title: Title: Date: Date: SUPPLIER INFORMATION PLAYBOY Name: Name: PLAYBOY.COM, INC. Address: Address: 730 Fifth Avenue New York, NY 10019 Contact: Contact: Telephone: Telephone: 212-261-5000 Facsimile: Facsimile: 212-957-2950 + +41 + +Source: PLAYBOY ENTERPRISES INC, 10-Q/A, 2/20/2009 \ No newline at end of file diff --git a/full_contract_txt/PrecheckHealthServicesInc_20200320_8-K_EX-99.2_12070169_EX-99.2_Distributor Agreement.txt b/full_contract_txt/PrecheckHealthServicesInc_20200320_8-K_EX-99.2_12070169_EX-99.2_Distributor Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..4d41d0fc74f3dd0cfb29468ab8fd11c1c81c830c --- /dev/null +++ b/full_contract_txt/PrecheckHealthServicesInc_20200320_8-K_EX-99.2_12070169_EX-99.2_Distributor Agreement.txt @@ -0,0 +1,39 @@ +EXHIBIT 99.2 Page 1 of 3 DISTRIBUTOR AGREEMENT Agreement made this 19t h day of March, 2020 Between: Co-Diagnostics, Inc. (herein referred to as "Principal") And PreCheck Health Services, Inc. (herein referred to as "Distributor"). In consideration of the mutual terms, conditions and covenants hereinafter set forth, Principal and Distributor acknowledge and agree to the following descriptions and conditions: DESCRIPTION OF PRINCIPAL The Principal is a company located in Utah, United States and is in the business of research and development of reagents. The Principal markets and sells it products globally through direct sales and distributors. DESCRIPTION OF DISTRIBUTOR The Distributor is a company operating or planning to operate in the United States of America, Latin America, Europe and Russia. The Distributor represents that the Distributor or a subsidiary of the Distributor is or will be fully licensed and registered in the Territory and will provide professional distribution services for the products of the Principal. CONDITIONS: 1. The Principal appoints the Distributor as a non-exclusive distributor, to sell Principal's qPCR infectious disease kits, Logix Smart COVID-19 PCR diagnostic test and Co-Dx Box™ instrument (the "Products"). The Products are described on Exhibit A to this Agreement. 2. The Principal grants Distributor non- exclusive rights to sell these products within the countries of Romania (the "Territory"), which may be amended by mutual written agreement. + +Source: PRECHECK HEALTH SERVICES, INC., 8-K, 3/20/2020 + + + + + +3. The Distributor accepts the appointment and shall use its commercially reasonable efforts to promote, market and sell the Products within the Territory, devote such time and attention as may be reasonably necessary and abide by the Principal's policies. 4. The Principal shall maintain the right to contact and market its products to potential customers in the Territory; but agrees to pass on all sales leads and orders to the Distributor. 5. The parties agree that the list of Products and/or prices may be amended from time to time. The Principal may unilaterally remove Products from the catalog or change prices. Additions to the Products shall be by mutual agreement. However, in the event the Distributor rejects a new product addition to the product list, the Principal shall then retain the right to market and distribute the new product that is rejected by the Distributor. 6. Unless accepted by the Principal, the Distributor agrees that during the term of this Agreement, the Distributor, either directly or indirectly, shall handle no products that are competitive with the Products within the Territory. 7. The Distributor shall obtain at its own expense, all necessary licenses and permits to allow the Distributor to conduct business as contemplated herein. The Distributor represents and warrants that the Distributor shall conduct business in strict conformity with all local, state and federal laws, rules and regulations. 8. The Principal agrees that the Distributor may employ or engage representatives or sub-distributors in furtherance of this Agreement and the Distributor agrees that the Distributor shall be solely responsible for the payment of wages or commissions to those representatives and sub-distributors, and that under no circumstances shall Distributor's representatives be deemed employees of Principal for any purpose whatsoever. 9. Principal will grant Distributor a discount based on the Products and Prices. The proposed discount is expected to be ¨%. Discount may vary depending on product volume ordered or promotions. 10. This Agreement shall be in effect until March 18. 2021, unless sooner terminated by either party upon (30) days written notice, without cause. 11. In the event of termination, the Distributor shall be entitled to receive all orders accepted by the Principal prior to the date of termination and may sell the ordered Products in the Territory. Payment to be made upon shipment. + +Source: PRECHECK HEALTH SERVICES, INC., 8-K, 3/20/2020 + + + + + +12. In the event of termination, neither party, their heirs nor successors shall issue any challenge whatsoever to contest the termination. 13. The Distributor is an independent contractor and nothing contained in this agreement shall be deemed or interpreted to constitute the Distributor as a partner or employee of the Principal, nor shall either party have any authority to bind the other in any respect, it being understood and agreed that all orders submitted by the Distributor are subject to acceptance by Principal in its sole discretion. 14. It is agreed between the parties that there are no other agreements or understandings between them relating to the subject matter of this Agreement. This Agreement supersedes all prior agreements, oral or written, between the parties and is intended as a complete and exclusive statement of the agreement between the parties. No change or modification of this Agreement shall be valid unless the same be in writing and signed by the parties. 15. This Agreement shall not be assigned by the Distributor without the prior written consent of the Principal. 16. Official communication from Distributor or the Principal shall be in written form or by email, acknowledged by the recipient. 17. This Agreement shall be construed in accordance with and governed by the laws of the State of Texas without regard to principles of conflicts of laws. 18. Each of Principal and Distributor represents that it has the right to enter into this Agreement and that this Agreement does not violate any agreement to which it is a party. Principal represents that it owns or has rights to the intellectual property embodied in the Products. Intending to be legally bound, the parties hereto have caused this Agreement to be executed as of the date first above written. BY /s/ Cameron Gundry BY /s/ Justin Anderson Cameron Gundry, Dir. of Commercialization Justin Anderson, CEO Co-Diagnostics, Inc. PreCheck Health Services, Inc. (Principal) (Distributor) + +Source: PRECHECK HEALTH SERVICES, INC., 8-K, 3/20/2020 + + + + + +.EXHIBIT A LIST OF PRODUCTS + +Source: PRECHECK HEALTH SERVICES, INC., 8-K, 3/20/2020 + + + + + +Source: PRECHECK HEALTH SERVICES, INC., 8-K, 3/20/2020 + + + + + +Source: PRECHECK HEALTH SERVICES, INC., 8-K, 3/20/2020 \ No newline at end of file diff --git a/full_contract_txt/Principal Life Insurance Company - Broker Dealer Marketing and Servicing Agreement.txt b/full_contract_txt/Principal Life Insurance Company - Broker Dealer Marketing and Servicing Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..65ce82e6da331892a27fa9c68c5137bf115bec60 --- /dev/null +++ b/full_contract_txt/Principal Life Insurance Company - Broker Dealer Marketing and Servicing Agreement.txt @@ -0,0 +1,69 @@ +BROKER DEALER MARKETING AND SERVICING AGREEMENT FOR VARIABLE ANNUITY CONTRACTS This Broker Dealer Marketing and Servicing Agreement for Variable Annuity Contracts (the "Agreement") is effective this ______ day of ________________, 2013, by and among Principal Life Insurance Company ("Issuer") and Princor Financial Services Corporation ("Distributor"), on the one hand, and _______________________ and its duly licensed insurance affiliates indicated on the signature page of this Agreement, if any, (collectively "Broker Dealer"), on the other hand. Distributor, Issuer and Broker Dealer are individually referred to as a "Party" and collectively as the "Parties" RECITALS A. Issuer offers certain individual variable annuity contracts listed in the exhibit(s) attached to this Agreement + + B. Distributor is a broker dealer registered with the Securities and Exchange Commission (the "SEC") under + + C. Broker Dealer is engaged in the sale of securities and other investment products, including variable annuity + + D. The Parties enter into this Agreement for the purpose of authorizing Broker Dealer to solicit sales of and + + NOW THEREFORE, in consideration of the mutual promises and covenants contained in this Agreement, the receipt and sufficiency of which the Parties acknowledge, the Parties agree as follows: REPRESENTATIONS 1. Issuer represents that the Annuity Contracts shall comply with the registration and other applicable requirements of the Securities Act of 1933 (the "1933 Act") and the Investment Company Act of 1940 (the "40 Act") and the rules and regulations thereunder, including the terms of any order of the SEC with respect thereto. Issuer further represents that the Annuity Contract prospectuses included in Issuer's registration statement, post-effective amendments, and any supplements thereto, as filed or to be filed with the SEC, as of their respective effective dates, contain or will contain all statements and information required to be stated therein by the 1933 Act and in all respects conform or will conform to the requirements thereof, and no prospectus, nor any supplement thereof, includes or will include any untrue statement of a material fact, or omits or will omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however, that the foregoing representations shall not apply to information contained in or omitted from any prospectus or supplement in reliance upon and in conformity with written information furnished to Issuer by Broker Dealer specifically for use in preparation thereof. The foregoing representations also shall not apply to information contained in or omitted from any prospectus or supplement of any underlying mutual fund. + +("Annuity Contracts"). The exhibit(s) attached to this Agreement are incorporated herein by reference and made a part hereof ("Exhibits"). + +the Securities and Exchange Act of 1934, as amended, (the "1934 Act") and a member in good standing of the Financial Industry Regulatory Authority, Inc. ("FINRA"). Distributor is the principal underwriter of the Annuity Contracts. + +contracts. Broker Dealer either is licensed in certain states as an insurance agent or agency or has entered into an insurance networking agreement with the undersigned duly licensed insurance affiliates to act on its behalf in the capacity of a licensed insurance agent or agency. + +service Annuity Contracts, subjects to the terms and conditions set forth in this Agreement and the Exhibits. + + + + + + 2 . Broker Dealer represents and warrants that it is a broker dealer registered with the SEC under the 1934 Act, a member in good standing of FINRA, and is registered as a broker dealer under state law to the extent required in order for it or those persons who are registered with it and licensed as insurance producers ("Registered Representatives") to provide the services described in this Agreement. Broker Dealer agrees to abide by all rules and regulations of FINRA, including its Conduct Rules, and to comply with all applicable state and federal laws and the rules and regulations of authorized regulatory agencies affecting the sale and servicing of Annuity Contracts. MARKETING/SERVICING 3 . Issuer and Distributor appoint Registered Representatives to solicit and procure applications for the sale of and service of Annuity Contracts. This appointment is not exclusive and only extends to those jurisdictions in which the Annuity Contracts have been approved for sale and in which Broker Dealer and Registered Representatives are properly registered, licensed and appointed. 4 . Broker Dealer will itself be, or will select persons associated with it who are, trained and qualified to solicit applications for purchase and service of Annuity Contracts in conformance with applicable state and federal laws. Any such persons shall be registered representatives of Broker Dealer in accordance with the rules of FINRA and any applicable state laws, be licensed to offer the Annuity Contracts in accordance with the insurance laws of any jurisdiction in which such person solicits applications and be licensed with and appointed by Issuer to solicit applications for and service Annuity Contracts. 5 . Broker Dealer will use commercially reasonable efforts to train and instruct its Registered Representatives not to make recommendations to an applicant to purchase an Annuity Contract in the absence of reasonable grounds to believe that the purchase is suitable for such applicant, in accordance with the suitability and disclosure requirements of the 1934 Act, FINRA Conduct Rule 2310, and any state insurance law or regulation governing the offer and sale of Annuity Contracts, including any state law or regulation governing sales to the public in general (e.g. consumer protection laws or regulations, unfair trade practices, annuity disclosure regulations, etc.) or to senior citizens, as the same may be amended or interpreted from time to time. Broker Dealer will use commercially reasonable efforts to determine that each transaction is completed with a Registered Representative's report indicating suitability, including any required and necessary customer information, and is subjected to a review process in compliance with FINRA Conduct Rule 3010, as the same may be amended or interpreted from time to time. Each application shall be approved by one of Broker Dealer's registered principals, in accordance with all applicable FINRA rules. 6 . The activities of all Registered Representatives, employees and agents ("producers") will be under the direct supervision and control of Broker Dealer. The right of Registered Representatives to solicit applications for the purchase and service of Annuity Contracts is subject to their continued compliance with the rules and procedures that may be established by Broker Dealer, or Issuer, including, but not limited to, those set forth in this Agreement. 7 . Broker Dealer shall ensure that applications for the purchase of Annuity Contracts are solicited only in the states where Annuity Contracts are qualified for sale, and only in accordance with the terms and conditions of the then current prospectus applicable to Annuity Contracts and will make no representations not included in the prospectus, Statement of Additional Information, or in any authorized supplemental material supplied by Distributor. With regard to Annuity Contracts, Broker Dealer shall not use or permit its producers to use any sales promotion materials or any form of advertising other than that supplied or approved by Distributor. Issuer and Distributor shall provide only approved supplemental material, advertising and sales materials, including illustrations, for Broker Dealer's use. + + + + + + 8 . Broker Dealer will promptly forward to the appropriate office of Distributor, or its authorized designee, all Annuity Contract applications along with other documents, if any, and any payments received with such applications and will have no rights of set off for any reason. Any Annuity Contract application that is rejected, together with any payment made and other documents submitted, shall be returned to Broker Dealer or the source of the payments. 9 . Broker Dealer shall ensure that the prospectus delivery requirements under the 1933 Act and all other applicable securities and insurance laws, rules and regulations are met and that delivery of any prospectus for Annuity Contracts will be accompanied by delivery of the prospectus for the underlying mutual funds, and, where required by state law, the Statement of Additional Information for the underlying mutual funds. Issuer or Distributor shall inform Broker Dealer of those states that require delivery of a Statement of Additional Information with the prospectus on initial sale. Broker Dealer is responsible for prospectus delivery requirements only on initial sale. Issuer and Distributor will be responsible for prospectus delivery annually after the original sale. 10 . Broker Dealer agrees to maintain all books and records relating to the servicing and sale of Annuity Contracts or interests therein required under the 1934 Act, and any applicable rules promulgated thereunder, and applicable securities or insurance laws of any states. 11 . Broker Dealer understands and agrees that in performing the services covered by this Agreement, it is acting in the capacity of an independent contractor and not as an agent or employee of Distributor or Issuer and is not authorized to act for, or make any representation on behalf of, Distributor or Issuer except as specified herein. Broker Dealer understands and agrees that Issuer shall execute telephone transactions only in accordance with the terms and conditions of the then current prospectus applicable to Annuity Contracts and agrees that in consideration for Broker Dealer's right to exercise the telephone transaction services neither Distributor nor Issuer will be liable for any loss, injury or damage incurred as a result of acting upon, nor will they be held responsible for the authenticity of any telephone instructions containing unauthorized, incorrect or incomplete information. Broker Dealer agrees to indemnify and hold harmless Distributor and Issuer against any loss, injury or damage resulting from any telephone transactions instruction containing unauthorized, incorrect or incomplete information received from Broker Dealer or any of its Registered Representatives. (Telephone instructions are recorded on tape.) 12 . Broker Dealer has no authority to: incur any liability or debt on behalf of Issuer or Distributor; accept risks or contracts of any kind; make, alter, authorize or discharge any contract; fail to transmit promptly any contributions collected to Issuer or Distributor; or bind Issuer or Distributor in any way. 13 . Broker Dealer agrees to notify Distributor promptly of any change, termination, or suspension of its status as a broker dealer or FINRA member. Broker Dealer shall immediately notify Distributor with respect to i) the initiation and disposition of any form of disciplinary action by the FINRA or any other agency or instrumentality having jurisdiction with respect to the subject matter hereof against Broker Dealer or any Registered Representative; ii) the issuance of any form of deficiency notice made part of the public record by FINRA or any such agency regarding Broker Dealer's training, supervision or sales practices; and/or iii) the effectuation of any consensual order with respect thereto. 14. Broker Dealer agrees to notify Distributor and Issuer immediately of any customer complaints or legal or regulatory inquiries (including, but not limited to, subpoenas) regarding any Annuity Contracts offered or sold pursuant to the Agreement. Broker Dealer shall provide full, prompt cooperation and assistance to Distributor and Issuer in responding to and resolving any such complaints or inquiries. 15. Anti-Money Laundering and Know Your Customer Compliance: The Parties acknowledge that they are financial institutions subject to the USA Patriot Act of 2001 and the Bank Secrecy Act (collectively, the "AML Acts"), which require, among other things, that financial institutions adopt compliance programs + + + + + + to guard against money laundering. Each Party represents and warrants that it is in compliance and will continue to comply with the AML Acts and the applicable rules and regulations of the SEC, FINRA, and any other self-regulatory organizations, as they now exist and as they may be amended in the future. Broker Dealer represents and warrants that it has adopted a customer identification program and will verify the identity of customers who purchase Annuity Contracts. Periodically, Issuer or Distributor may ask Broker Dealer to, and Broker Dealer agrees to, certify that it is compliance with the requirements, representations and warranties in this paragraph. The Parties further acknowledge that they have a current 314(b) notice on file with FinCEN in accordance with section 314(b) of the USA Patriot Act and agree to refile such notice annually (or as otherwise required to remain current in accordance with applicable rules and regulations) during the term of this Agreement. COMPENSATION 16. Unless otherwise provided, Issuer, on behalf of Distributor, shall pay compensation to Broker Dealer as set out in this Agreement and the Exhibits. Compensation shall only be paid to Broker Dealer of record on premiums paid to and retained by Issuer while this Agreement is in force. Broker Dealer agrees to pay a commission to Registered Representatives in connection with the sales or servicing of Annuity Contracts under this Agreement. 17. In those states where Broker Dealer has not obtained an insurance license, Broker Dealer represents and warrants that: it has entered into an insurance networking agreement with the undersigned duly licensed insurance affiliate(s) to act on its behalf in the capacity of a licensed insurance agent or agency ("Affiliated Agency"). Broker Dealer authorizes Issuer to pay any compensation owed to Broker Dealer from the sales or servicing of Annuity Contracts to such Affiliated Agency. Broker Dealer remains fully responsible for recordkeeping and supervision of the solicitation, sale and/or servicing of Annuity Contracts. All compensation received by Affiliated Agency in accordance with this section will be distributed by Affiliated Agency only to duly licensed and registered representatives who have been appointed by Issuer to solicit applications for Annuity Contracts. 18. Issuer and Distributor may change the compensation schedules set forth in the attached Exhibits at any time and will notify Broker Dealer of the revised compensation schedules electronically or by other writing in advance of the effective date of the change. Any change to the compensation schedules will affect only commissions payable on Annuity Contracts with an effective date on or after the effective date of the change, unless otherwise provided or required by law. Issuer or Distributor may discontinue the issuance of any form of Annuity Contract and fix the amount of compensation on Annuity Contracts issued in exchange for previously issued Annuity Contracts. 19. Broker Dealer agrees to return promptly to Issuer all compensation received for any Annuity Contract returned within the "free look" period as specified in the Annuity Contract. Issuer expressly reserves the right to change the broker dealer of record or Registered Representative in the event an Annuity Contract owner so requests. 20. Any indebtedness or obligation of Broker Dealer to Distributor or Issuer, whether arising hereunder or otherwise, shall be set off against any compensation payable under this Agreement or any other agreement between or among the Parties or their affiliates. Indebtedness or obligations include but are not limited to any debt, liability, or debit balance resulting from Issuer's reversal of compensation under this Agreement or any other agreement between or among the Parties or their affiliates. It also includes any amount paid by Issuer or Distributor, including reasonable attorney fees and costs, to settle a complaint or satisfy any judgment entered by any court, administrative agency or arbitrator related to any Annuity Contract sold by Broker Dealer, or its producers or breach of Broker Dealer's duties and responsibilities contained in this or any prior Agreement, whether or not the liability for settlement or satisfaction of judgment arose after the termination of this Agreement. Issuer or Distributor reserves the right to use any remedies under the law to collect any indebtedness Broker Dealer owes Issuer or + + + + + + Distributor and Broker Dealer agrees to pay any reasonable attorney's fees and actual costs of collection incurred as a result of such action. CONFIDENTIALITY 21. a. Confidentiality. Each Party acknowledges that, in the course of performing its duties under this Agreement or otherwise, it may receive or learn information about individuals who have applied for or purchased financial products or financial services from the other Party, including, but not limited to, personal, financial and/or health information ("Confidential Information"). Each Party agrees that it will not use or disclose to any affiliate or third party, orally or in writing, any Confidential Information of the other Party for any purpose other than the purpose for which the Confidential Information was provided to that Party. Without limiting any of the foregoing, each Party agrees to take all precautions that are reasonably necessary to protect the security of the other Party's Confidential Information. Each Party agrees to restrict access to the other Party's Confidential Information to those employees who need to know that information to perform their duties under this Agreement. Each Party further agrees that, upon request of the other Party, it will return to the Party making such request all tangible items containing any Confidential Information of the other Party, including all copies, abstractions and compilations thereof, without retaining any copies of the items required to be returned. The obligations of this paragraph extend to the employees, agents, affiliates and contractors of each Party and each Party shall inform such persons of their obligations hereunder. 21. b. Notification obligation. Each Party shall, upon learning of any unauthorized disclosure or use of any of the other Party's Confidential Information, notify the other Party promptly and cooperate fully with such Party to protect such Confidential Information. 21. c. Disclosure required by law. If Broker Dealer believes it is required by law or by a subpoena or court order to disclose any Confidential Information, Broker Dealer, prior to any disclosure, shall promptly notify Issuer in writing attaching a copy of the subpoena, court order or other demand and shall make all reasonable efforts to allow Issuer an opportunity to seek a protective order or other judicial relief. 21. d. Non-restricted information. Except as stated in the final sentence of this paragraph, nothing in this Agreement shall be construed to restrict disclosure or use of information that: (a) was in the possession of or rightfully known by the recipient, without an obligation to maintain its confidentiality, prior to receipt from the other Party; (b) is or becomes generally known to the public without violation of this Agreement; (c) is obtained by the recipient in good faith from a third party having the right to disclose it without an obligation of confidentiality; (d) is independently developed by the receiving Party without the participation of individuals who have had access to the other Party's confidential or proprietary information. The Parties acknowledge that certain laws governing Confidential Information about individuals are more restrictive than the foregoing statements and they agree to comply in all respects with such laws. 21. e. Compliance with law. Each Party agrees, in connection with its performance under this Agreement, to comply with all applicable laws, including but not limited to laws protecting the privacy of non- public personal information about individuals. 21. f. Survival. The provisions of this Agreement relating to confidentiality shall survive termination or expiration of this Agreement. INDEMNIFICATION 22. In connection with the offer, sale or servicing of Annuity Contracts, Broker Dealer agrees to indemnify + + + + + + and hold harmless Distributor and Issuer from any damage or expense, including reasonable attorneys' fees, as a result of (a) the negligence, misconduct or wrongful act of Broker Dealer or producers; (b) any violation of any securities or insurance laws, regulations or orders or (c) any actual obligation of the Affiliated Agency under terms of the agreement between Broker Dealer and the Affiliated Agency, including claims by one or more of Registered Representatives for compensation due or to become due on account of such Registered Representatives' sale or servicing of Annuity Contracts and any claims or controversy between Broker Dealer and Affiliated Agency as to rights to compensation. Notwithstanding the foregoing, Broker Dealer shall not indemnify and hold harmless Distributor and Issuer from any damage or expense on account of the negligence, misconduct or wrongful act of Broker Dealer or producer if such negligence, misconduct or wrongful act arises out of or is based upon any untrue statement or alleged untrue statement of material fact, or the omission or alleged omission of a material fact in: (i) any registration statement, including any prospectus or any post-effective amendment thereto; or (ii) any material prepared and/or supplied by Distributor or Issuer for use in conjunction with the offer or sale of Annuity Contracts, or (iii) any state registration or other document filed in any state or jurisdiction in order to qualify any Annuity Contracts under the securities laws of such state or jurisdiction. The terms of this provision shall not be impaired by termination of this Agreement 23. In connection with the solicitation of applications for the purchase of Annuity Contracts, Distributor and Issuer agree to indemnify and hold harmless Broker Dealer from any damage or expense, including reasonable attorneys' fees, as a result of the negligence, misconduct or wrongful act of Distributor or Issuer or any employee, representative or agent of Distributor or Issuer, including but not limited to, any damage or expense which arises out of or is based upon any untrue statement or alleged untrue statement of material fact, or the omission or alleged omission of a material fact in: (i) any registration statement, including any prospectus or any post-effective amendment thereto; or (ii) any material prepared and/or supplied by Distributor or Issuer for use in conjunction with the offer or sale of Annuity Contracts; or (iii) any state registration or other document filed in any state or other jurisdiction in order to qualify any Annuity Contract under the securities laws of such state or jurisdiction and/or any actual or alleged violation of any securities or insurance laws, regulations or orders. The terms of this provision shall not be impaired by termination of this Agreement. GENERAL PROVISIONS 24. Issuer or Distributor may modify this Agreement at any time by written notice to Broke Dealer. Any notice shall be deemed to have been given on the date upon which it was either delivered personally or by fax or e-mail transmission to the other Party, or mailed post prepaid to his or its address as shown herein. 25. Any Party hereto may terminate this Agreement at any time upon prior written notice. This Agreement shall automatically terminate if Broker Dealer voluntarily or involuntarily ceases to be or is suspended from being, a member in good standing of FINRA. In addition, Distributor and Issuer reserve the right to terminate this Agreement in the event that any producer of Broker Dealer is suspended, disciplined or found to be in violation of governing insurance or securities laws, rules or regulations. Failure of any Party to terminate this Agreement for any of the causes set forth in this Agreement shall not constitute a waiver of the right to terminate this Agreement at a later time for any such causes. 26. This Agreement may not be assigned by Broker Dealer without the prior written consent of Issuer and Distributor, which shall not be unreasonably withheld. 27. This Agreement shall be governed by and construed in accordance with the laws of the State of Iowa. 28. No failure or delay to exercise, nor any single or partial exercise of, any right, power, or privilege given or arising under this Agreement will operate as a waiver of future rights to exercise any such right, + + + + + + power, or privilege. 29. This Agreement may be signed in any number of counterparts, each of which will be considered an original, but all of those counterparts will together constitute only one Agreement. 30. The determination that any provision of this Agreement is not enforceable in a particular jurisdiction will not affect the validity or enforceability of the remaining provisions generally, or in any other jurisdiction or as to any other entities not involved in that judgment. Such unenforceable provisions will be stricken or deemed modified in accordance with such determination and this Agreement, as so modified, will continue to be in force and effect. IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed on the date first above written. ABC Company, Broker Dealer By: ____________________________ _______________________________ Please type or print name _______________________________ Please type or print Title Date: __________________________ Princor Financial Services Corporation By: _______________________________________ Marty Richardson Operations Officer Date: ____________________________________ Principal Life Insurance Company By: _______________________________________ Angela Ellis Assistant Vice President - Marketer Services Date: ____________________________________ Affiliated Agencies of Broker Dealer By: _______________________________________ __________________________________________ Please type or print name + + + + + + __________________________________________ Please type or print Title Date: ____________________________________ + + + + + + EXHIBIT A COMPENSATION SCHEDULE FOR PRINCIPAL VARIABLE ANNUITY CONTRACTS Products may not be available in all states and state variations may apply. Trail commissions are calculated as a percentage of account value. Commissions for variable annuities are based on the age of the oldest owner or annuitant. The trail commission is paid to the current servicing agent of record provided the Annuity Contract is still in effect. Servicing agent means the broker dealer or Registered Representative appointed by us and accepted by the contract owner as the servicing agent. If the contract owner requests a change in the servicing agent or if we decide that a change would be in the best interests of the contract owner, trail commissions will be paid to the new servicing agent or his/her broker dealer where appropriate. No trail commissions are paid after termination of this Agreement. + + A. Option Elections The Broker Dealer will be paid compensation on sales of Principal Variable Annuity/Principal Investment Plus Variable Annuitysm Contracts in accordance with the Compensation Options elected herein and which its Registered Representative shall elect, using the election procedures established by the Issuer, upon submission of the product application to the Issuer and for which good payment has been received. Compensation paid will be based on Option A unless, upon submission of the contract application, the Registered Representative elects another Option made available to it by Broker Dealer's election below. Check the options available to your Registered Representatives. _X_ Option A - Full front end compensation with no trail ___Option B - Slightly lower front-end commission with a .10% annual trail commission paid quarterly starting at the end of the fifth quarter ___Option C - Lower front-end commission with a .30% annual trail commission paid quarterly starting at the end of the fifth quarter ___Option D - Low or no up front-end commission based upon issue age with a 1.0% annual trail commission paid quarterly starting at the end of the fifth quarter + +Principal Variable Annuity (FVA)*/Principal Investment Plus Variable Annuity (IPVA)** \ No newline at end of file diff --git a/full_contract_txt/PrudentialBancorpInc_20170606_8-K_EX-10.4_10474434_EX-10.4_Endorsement Agreement.txt b/full_contract_txt/PrudentialBancorpInc_20170606_8-K_EX-10.4_10474434_EX-10.4_Endorsement Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..0a71debba9bc573c24b9beb010b37968ffc31696 --- /dev/null +++ b/full_contract_txt/PrudentialBancorpInc_20170606_8-K_EX-10.4_10474434_EX-10.4_Endorsement Agreement.txt @@ -0,0 +1,175 @@ +Exhibit 10.4 Split-Dollar Endorsement Agreement + +THIS AGREEMENT is made and entered into this 1st day of June, 2017 by and between Prudential Bank (hereinafter referred to as the "Employer"), located in Philadelphia, Pennsylvania and Jeffrey Hanuscin, (hereinafter referred to as the "Employee"), residing at 2406 Sanibel Circle, Palmyra, NJ 08065. + +WHEREAS, the Employee has performed his duties in an efficient and capable manner; and + +WHEREAS, the Employer is desirous of retaining the services of the Employee; and + +WHEREAS, the Employer is desirous of assisting the Employee in obtaining life insurance on his own life; and + +WHEREAS, the Employer has determined that this assistance can best be provided under a "split-dollar" arrangement; and + +WHEREAS, the Employer and the Employee have applied for insurance policies issued by various insurance companies; and WHEREAS, it is now understood and agreed that this split-dollar agreement is to be effective as of the date first listed above; + +WHEREAS, it is now understood and agreed that this agreement shall supersede any previous split dollar agreements that are currently in place between the Employer and Employee. + +NOW, THEREFORE, for value received and in consideration of the mutual covenants contained herein, the parties agree as follows: + +ARTICLE I "Definitions" + +For purposes of this Agreement, the following terms will have the meanings set forth below: + +"Base Salary" means the Employee's total base salary as of each January 1st exclusive of special payments such as bonuses or commissions, but including any salary reductions made in accordance with Section 125 or 401(k) of the Code. + +"Cash Surrender Value of the Policies" will mean the Cash Value of the Policies; plus any dividends and/or earnings added hereto; and less any Policy Loan Balance. + +"Cash Value of the Policies" will mean the cash value as calculated according to the provisions of the Policies. + +"Current Loan Value of the Policies" will mean the Loan Value of the Policies reduced by any outstanding Policy Loan Balance. + +"Loan Value of the Policies" will mean the amount which with loan interest and Monthly Deductions for the Cost of Insurance, plus any applicable Surrender Charge, will equal the Cash Value of the Policies on the next loan interest due date. + +"Net Amount at Risk" will mean the total face amount of the policies (including death benefit by rider if applicable) reduced by the Cash Value of the Policies. + +"Employer's Interest in the Policies" is defined in Articles IV and V. + +"Policy" or "Policies" refers to the life insurance contracts listed below: + +Source: PRUDENTIAL BANCORP, INC., 8-K, 6/6/2017 + + + + + +Policy Number Carrier + +39132041 Mass Mutual 755073 Midland National + +However, a contract will be considered part of the "Policy" only to the extent the contract is approved and issued by the Carrier. The Employer is under no obligation to enter into a substitute contract for a contract that is not issued by the Carrier. + +"Policy Loan Balance" at any time will mean policy loans outstanding plus interest accrued to date. + +"Insurer" means the carrier of the Policy or Policies. + +ARTICLE II "Allocation of Gross Premium" + +The Employer will pay all premiums on the Policies when due, according to the Schedule of Premiums in the Policies. + +ARTICLE III "Rights in the Policies" + +The Employee will have the sole right to designate the beneficiary for the amount specified in Article IV of the death proceeds of the Policies. The Employer will have and may exercise, except as limited hereinafter, all ownership rights in the Policies. The Employer will not take any action in dealing with the Insurer that would impair any right or interest of the Employee in the Policies. The Employer will have the right to borrow from the Insurer, and to secure that loan by the Policies an amount which together with the unpaid interest accrued thereon, will at no time exceed the lesser of (a) the Employer's Interest in the Policies and (b) the Loan Value of the Policies. During the Employee's life time "The Employer's Interest In The Policies" will mean, at any time at which the value of such interest is to be determined under this Agreement, the Cash Value of the Policies at such time, reduced by any then outstanding Policy Loan Balance with respect to any loans made or charged automatically against the Policies by the Employer. + +ARTICLE IV "Rights to the Proceeds at Death" + +Upon the death of the Employee while this Agreement is in force, the Employee's beneficiary as named in the Beneficiary Designation Form on page 6 (or as it may be amended according to the terms set forth on page 6) for this Agreement will be entitled to receive from the Policy proceeds an amount equal to the lesser of: (a) (two (2) times the Employee's annualized base salary at the time of death as provided by the Employer's payroll department) plus $100,000, reduced by any amount payable under the Employer's group term life insurance plan, or (b) the Net Amount At Risk. The Employer shall be the beneficiary of the remaining death proceeds of the policy after the Employee's interest is determined. Within 60 days after the death of the Employee, the Employer will provide to the "Insurer" a written statement indicating the amount of each policy's proceeds the Employee's beneficiary is entitled to receive. + +ARTICLE V "Taxes" + +Any income or employment taxes due for a year on the value of current life insurance coverage provided to the Employee under this Agreement will be the responsibility of the Employee. To the extent that the value of current life insurance coverage is taxable income, it will be subject to withholding requirements and will be reported as income by the Employer to the IRS and state-taxing authorities on the Employee's W-2 Form or other IRS or state-required reporting form to the extent required by law. + +2 + +Source: PRUDENTIAL BANCORP, INC., 8-K, 6/6/2017 + + + + + +ARTICLE VI "Termination of Agreement" + +This Agreement may be terminated at any time while the Employee is living by written notice thereof by either the Employer or the Employee to the other; and, in any event, this Agreement will terminate upon termination of the Employee's employment. ARTICLE VII "Plan Management" + +For purposes of the Employee Retirement Income Security Act of 1974, the Employer will be the "Named Fiduciary" and Plan Administrator of the split-dollar life insurance plan for which this Agreement is hereby designated the written plan instrument. The Employer's board of directors may authorize a person or group of persons to fulfill the responsibilities of the Employer as Plan Administrator. The Named Fiduciary or the Plan Administrator may employ others to render advice with regard to its responsibilities under this Plan. The Named Fiduciary may also allocate fiduciary responsibilities to others and may exercise any other powers necessary for the discharge of its duties to the extent not in conflict with the Employee Retirement Income Security Act of 1974. + +ARTICLE VIII "Claims Procedure" + +(1) Filing claims. Any insured, beneficiary or other individual (hereinafter "Claimant") entitled to benefits under the Plan or under the Policies will file a Claim request with the Plan Administrator with respect to benefits under the Plan and with the "Insurer", with respect to benefits under the Policies. The Plan Administrator will, upon written request of a Claimant, make available copies of any claim forms or instructions provided by the "Insurer" or advise the Claimant where such forms or instructions may be obtained. + +(2) Notification to Claimant. If a claim request is wholly or partially denied, the Plan Administrator will furnish to the Claimant a notice of the decision within 90 days in writing and in a manner calculated to the understood by the Claimant, which notice will contain the following information: (a) The specific reason or reasons for the denial; (b) Specific reference to the pertinent Plan provisions upon which the denial is based; (c) A description of any additional material or information necessary for the Claimant to perfect the Claim and an explanation of why such material or information is necessary; and (d) An explanation of the Plan's claims review procedure describing the steps to be taken by a Claimant who wishes to submit his claim for review. + +(3) Review Procedure. A Claimant or his authorized representative may with respect to any denied claim: (a) Request a review upon written application filed within 60 days after receipt by the Claimant of notice of the denial of his claim; (b) Review pertinent documents; and (c) Submit issues and comments in writing + +Any request or submission will be in writing and will be directed to the Named Fiduciary (or his designee). The Named Fiduciary (or its designee) will have sole responsibility for the review of any denied claim and will take all steps appropriate in the light of its findings. + +(4) Decision on Review. The Named Fiduciary (or its designee) will render a decision upon review of a denied claim within 60 days after receipt of a request for review. If special circumstances warrant additional time, the decision will be rendered as soon as possible, but not later than 120 days after receipt of request for review. Written notice of any such extension will be furnished to the Claimant prior to the commencement of the Extension. The decision on review will be in writing and will include specific reasons for the decision, written in a manner calculated to be understood by the Claimant, as well as specific references to the pertinent provisions of the Plan on which the decision is based. If the decision on review is not furnished to the Claimant within the time limits prescribed above, the claim will be deemed denied on review. + +3 + +Source: PRUDENTIAL BANCORP, INC., 8-K, 6/6/2017 + + + + + +ARTICLE IX "Satisfaction of Claim" + +The Employee rights and interests, and rights and interests of any person taking under or through him, will be completely satisfied upon compliance by the Employer with the provisions of the Agreement. + +ARTICLE X "Amendment and Assignment" + +This Agreement may be altered, amended or modified, including the addition of any extra policy provisions, by a written instrument signed by the Employer and the Employee. Either party may, subject to the limitations of Article IV, assign its interest and obligations under this Agreement, provided, however, that any assignment will be subject to the terms of this Agreement. + +ARTICLE XI "Possession of Policies" + +The Employer will keep possession of the Policies. The Employer agrees from time to time to make the policies available to the Employee or to the "Insurer" for the purpose of endorsing or filing any change of beneficiary on the Policies but the Policies will promptly be returned to the Employer. + +ARTICLE XII "Governing Law" + +This Agreement sets forth the entire Agreement of the parties hereto, and any and all prior agreements, to the extent inconsistent herewith, are hereby superseded. This Agreement will be governed by the laws of the State of Pennsylvania. + +ARTICLE XIII "Interpretation" + +Where appropriate in this Agreement, words used in the singular will include the plural and words used in the masculine will include the feminine. + +IN WITNESS WHEREOF, the parties have hereunto set their hand, the Employer by its duly authorized officer, on the day and year first above written. + + + +/s/Jeffrey Hanuscin Employee Prudential Bank by: /s/Jack Rothkopf Senior Vice President and Chief Financial Officer + + + +4 + +Source: PRUDENTIAL BANCORP, INC., 8-K, 6/6/2017 + + + + + +Split Dollar Policy Endorsement Beneficiary Designation + +Pursuant to the terms of the Prudential Bank Split Dollar Agreement dated as of June 1st, 2017, the undersigned Owner requests that the Policies referenced in the Agreement and issued by the Insurer provide for the following beneficiary designation and limited contract ownership rights to the Employee: + +1. Upon the death of the Employee, proceeds shall be paid in one sum to the Owner, its successors or assigns, to the extent of its interest in the Policy as described in the Agreement. It is hereby provided that the Insurer may rely solely upon a statement from the Owner as to the amount of proceeds it is entitled to receive under this paragraph. + +2. Any proceeds at the death of the Employee in excess of the amount paid under the provisions of the preceding paragraph shall be paid in one sum to the following beneficiaries designated by the Employee: Primary Beneficiary, Relationship, Address Contingent Beneficiary, Relationship, Address + +The Contingent Beneficiary shall receive the benefit only if the Primary Beneficiary does not survive the Employee. + +The exclusive right to change the beneficiary for the proceeds payable under this section 2, to elect any optional method of settlement for the proceeds paid under this section 2 that are available under the terms of the policy, and to assign all rights and interests granted under this section 2 are hereby granted to the Employee. The sole signature of the Employee shall be sufficient to exercise said rights. + +The Owner retains all contract rights not granted to the Employee under this section 2. + +3. It is agreed by the undersigned that this designation and limited assignment of rights shall be subject in all respects to the contractual terms of the Policy. + +4. Any payment directed by the Owner under this endorsement shall be a full discharge of the Insurer, and such discharge shall be binding on all parties claiming any interest under the policy. + +The undersigned for the Owner is signing in a representative capacity and warrants that he or she has the authority to bind the entity on whose behalf this document is being executed. + +Signed at Philadelphia, PA this __________ day of ________________, 2017. + +EMPLOYEE: + +Signature: _______________________________________ Name: _____________________ + +OWNER: Prudential Bank + +Signature: _______________________________________ Name: _____________________ + + + +5 + +Source: PRUDENTIAL BANCORP, INC., 8-K, 6/6/2017 \ No newline at end of file diff --git a/full_contract_txt/QBIOMEDINC_04_08_2020-EX-99.1-JOINT FILING AGREEMENT.txt b/full_contract_txt/QBIOMEDINC_04_08_2020-EX-99.1-JOINT FILING AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..d2b1236f7680017db9cf624709a06683a59247ab --- /dev/null +++ b/full_contract_txt/QBIOMEDINC_04_08_2020-EX-99.1-JOINT FILING AGREEMENT.txt @@ -0,0 +1,13 @@ +EXHIBIT 99.1 JOINT FILING AGREEMENT The undersigned hereby agree that the statement on Schedule 13G with respect to the equity securities of Q Biomed, Inc. is, and any amendment thereto signed by each of the undersigned shall be, filed on behalf of each of the undersigned pursuant to and in accordance with the provisions of Rule 13d-1(k) promulgated under the Securities Exchange Act of 1934, as amended. The undersigned hereby further agree that this Joint Filing Agreement be included as an exhibit to such statement and any such amendment. The undersigned acknowledge that each shall be responsible for the timely filing of such amendments, and for the completeness and accuracy of the information concerning him or it contained herein and therein, but shall not be responsible for the completeness and accuracy of the information concerning the others. This Joint Filing Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument. Dated: 4/8/2020 YA II PN, Ltd. By:/s/ Troy J. Rillo, Esq. Date: 4/8/2020 Troy J. Rillo, Esq. Chief Compliance Officer YA Global Investments II (U.S.), Ltd. By:/s/ Troy J. Rillo, Esq. Date: 4/8/2020 Troy J. Rillo, Esq. Chief Compliance Officer Yorkville Advisors Global, LP By:Yorkville Advisors Global, LLC Its:General Partner By:/s/ Troy J. Rillo, Esq. Date: 4/8/2020 Troy J. Rillo, Esq. Chief Compliance Officer Yorkville Advisors Global II, LLC By:/s/ Troy J. Rillo, Esq. Date: 4/8/2020 Troy J. Rillo, Esq. Chief Compliance Officer + + + + + +YAII GP, LP By:Yorkville Advisors GP, LLC Its:General Partner By:/s/ Troy J. Rillo, Esq. Date: 4/8/2020 Troy J. Rillo, Esq. Chief Compliance Officer Yorkville Advisors GP, LLC By:/s/ Troy J. Rillo, Esq. Date: 4/8/2020 Troy J. Rillo, Esq. Chief Compliance Officer D-Beta One EQ, Ltd. By:Delta Beta Advisors, LLC Its:Investment Manager By:/s/ Troy J. Rillo, Esq. Date: 4/8/2020 Troy J. Rillo, Esq. Chief Compliance Officer D-Beta One Blocker EQ, Ltd. By:/s/ Troy J. Rillo, Esq. Date: 4/8/2020 Troy J. Rillo, Esq. Chief Compliance Officer D-Beta One Growth and Opportunity Fund Offshore, LP By:D-Beta One GP, LP Its:General Partner By:D-Beta One GP, LLC Its:General Partner By:/s/ Troy J. Rillo, Esq. Date: 4/8/2020 Troy J. Rillo, Esq. Chief Compliance Officer D-Beta One GP, LLC By:/s/ Troy J. Rillo, Esq. Date: 4/8/2020 Troy J. Rillo, Esq. Chief Compliance Officer + + + + + +Delta Beta Advisors, LP By:Delta Beta Advisors, LLC Its:General Partner By:/s/ Troy J. Rillo, Esq. Date: 4/8/2020 Troy J. Rillo, Esq. Chief Compliance Officer D-Beta One GP, LLC By:/s/ Troy J. Rillo, Esq. Date: 4/8/2020 Troy J. Rillo, Esq. Chief Compliance Officer /s/ Matthew Beckman Date: 4/8/2020 Matthew Beckman \ No newline at end of file diff --git a/full_contract_txt/QIWI_06_16_2017-EX-99.(D)(2)-COOPERATION AGREEMENT.txt b/full_contract_txt/QIWI_06_16_2017-EX-99.(D)(2)-COOPERATION AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..cd4e3983e34f320c186e0bc744becc07d5a3e015 --- /dev/null +++ b/full_contract_txt/QIWI_06_16_2017-EX-99.(D)(2)-COOPERATION AGREEMENT.txt @@ -0,0 +1,353 @@ +Exhibit 99(d)(2) + +COOPERATION AGREEMENT + +This Cooperation Agreement, dated as of 02 June, 2015, between Otkritie Investments Cyprus Limited, a company incorporated under the laws of the Republic of Cyprus with registration number HE 301373, whose registered address is at Angelou Vlachou, 4A, 6052, Larnaca, Cyprus ("OICL" and together with its Affiliates, "Otkritie") and QIWI plc, a public company limited by shares incorporated under the laws of the Republic of Cyprus with registration number HE 193010, whose registered office is at Kennedy 12, Kennedy Business Centre, 2nd floor, P.C. 1087, Nicosia, Cyprus ("QIWI", and, together with its Affiliates, "QIWI Group"). + +RECITALS + +(A) On 14 May 2015, OICL, Otkritie Holding JSC and QIWI entered into a deed of subscription (the "Deed of Subscription"), pursuant to which OICL will acquire 5,593,041 class B ordinary shares in QIWI (the "Subscription Shares"). + +(B) Under the terms of the Deed of Subscription, QIWI will acquire a one hundred (100) percent ownership interest in the charter capital of CIHRUS Limited Liability Company ("CIHRUS"), a limited liability company duly existing and incorporated under the laws of the Russian Federation. + +(C) CIHRUS is the parent company of Rapida Ltd , a company duly existing and incorporated under the laws of the Russian Federation under registration number 1037700111679, which QIWI will acquire as part of the transactions contemplated under the Deed of Subscription ("NKO Rapida" and, together with its Affiliates that are also being acquired pursuant to the transactions contemplated by the Subscription Agreement, "Rapida"). + +(D) Following the acquisition of CIHRUS by QIWI and in order to promote their mutual interests, the parties wish to cooperate for their mutual benefit in the fields of their business, including digital payments, and establish a steering committee in order to analyse and develop potential areas of cooperation between the Parties. + +NOW THEREFORE, in consideration of the mutual agreements and covenants set forth herein, the parties hereto agree as follows: + + 1. Definitions and Interpretation. + +1.1 Definitions + +"Affiliate" means, with respect to any person, any other person directly or indirectly, through one or more intermediaries, Controlling, Controlled by or under common Control with such person and, in the case of a trust, any trustee or beneficiary (actual or potential) of that trust and, in the case of an individual, any person connected with him; provided that, for the purposes of this Agreement, neither QIWI nor any of its subsidiaries is to be regarded as an Affiliate of Otkritie; + + + + + +"Applicable Law(s)" means all laws, regulations, directives, statutes, subordinate legislation, common law and civil codes of any jurisdiction, all judgments, orders, notices, instructions, decisions and awards of any court or competent authority having jurisdiction over Otkritie or QIWI, as applicable, or tribunal or in an administrative, regulatory or similar proceeding; + +"Business Day" means a day other than Saturday, Sunday or public holiday in Moscow (Russia); New York (United States) and Nicosia (Cyprus); + +"Committee Member" has the meaning given to it in Clause 3.2; + +"Completion 1" has the meaning given to it in the Deed of Subscription; + +"Confidential Information" means the existence and contents of this Agreement, the arrangements contemplated by this Agreement and: + + (a) any information of whatever nature concerning the business, finance, assets, liabilities, dealings, transactions, know-how, customers,suppliers, processes or affairs of the other parties and any of their group undertakings from time to time; + + (b) any information which is expressly indicated to be confidential in relation to the party disclosing it (or in relation to any of its groupundertakings) from time to time, + +which any party may from time to time receive or obtain (verbally or in writing or in disk or electronic form or by any other means) from any other party as a result of negotiating, entering into, or performing its obligations pursuant to this Agreement; + +in each case except to the extent that such information is, has or does become available: + + (i) to a party through the public domain other than pursuant to a breach of an obligation of confidentiality in respect thereof bysuch party or its Representatives; or + + (ii) pursuant to disclosure, in a non-confidential manner, to a party by a source which to the knowledge of such party is notprohibited to disclose the information by reason of any legal, contractual or fiduciary obligation; 2 + + + + + +"Control" in relation to an undertaking means the direct or indirect holding or control of: (a) a majority of the voting rights exercisable at general meetings of the members of that undertaking on all, or substantially all, matters; (b) the right to appoint or remove directors having a majority of the voting rights exercisable at meetings of the board of directors of that undertaking on all, or substantially all, matters; or (c) the right (whether pursuant to a contract, understanding or other arrangement) to direct or cause to be directed directly or indirectly a dominant influence over such other undertaking, and (i) where an undertaking is not a company, references above to directors, general meetings and members shall be deemed to refer to the equivalent bodies in such undertaking; and (ii) "Controlled" and "Controlling" shall have a corresponding meaning; + +"Dispute" has the meaning given to it in Clause 9.2; + +"Effective Time" has the meaning given to it in Clause 6.1; + +"LCIA" has the meaning given to it in Clause 9.2; + +"LCIA Rules" has the meaning given to it in Clause 9.2; + +"NKO Rapida" has the meaning given to it in the Recitals; + +"Parties" shall mean OICL and QIWI, together, and each of them a "Party"; + +"Representatives" has the meaning given to it in Clause 5.2; + +"Steering Committee" has the meaning given to it in Clause 3.1; + +1.2 In this Agreement unless the context otherwise requires: + + (a) references to a "party" mean a party to this Agreement and includes the successors in title to substantially the whole of itsundertaking; + + (b) references to a "person" include a body corporate, an unincorporated association, a trust and a partnership; + + (c) references to any statutory provision, rule or law shall include references to such statutory provision, rule or law as it may, after the date of this Agreement, from time to time be amended, supplemented or re-enacted and any subordinate legislation made under such statutory provision; 3 + + + + + + (d) references to "Clauses" are to clauses of this Agreement; and + + (e) words denoting the singular shall include the plural and vice versa and words denoting any gender shall include all genders. + +1.3 The headings in this Agreement are inserted for convenience only and shall not affect its interpretation or construction. + + 2. Joint Cooperation to Further Business. + +2.1 Subject to Applicable Law, fiduciary duties and obligations, the best interests of their respective customers, existing contractual agreements, business and market conditions, the protection of confidential or competitively sensitive information and commercial determinations as to appropriate business, product and marketing efforts, each of Otkritie and QIWI Group agree to strategically cooperate with each other in order to carry out certain joint projects related to certain areas of their respective businesses, including by virtue of establishing the Steering Committee described further herein. + + 3. Steering Committee. + +3.1 The Parties shall form a steering committee (the "Steering Committee"), which shall analyse and develop potential areas of strategic cooperation between the Parties and oversee the Parties' cooperation in these areas. + +3.2 The Steering Committee shall consist of three representatives of QIWI Group and three representatives of Otkritie (each, a "Committee Member"). The representatives shall include: + + (a) at least one representative from Otkritie occupying the position of Chief Executive Officer or the Chairman of the Management Board orsimilar within Otkritie Holding JSC, PJSC Khanty-Mansiysk Bank Otkritie or JSC Bank Otkritie Financial Corporation; and + + (b) QIWI's Chief Executive Officer. + +Each of Otkritie and QIWI Group shall have the exclusive right to remove and replace any of its designees to the Steering Committee at any time by notice to the other party. + +3.3 The Steering Committee shall meet at least once in each month and as otherwise agreed between Committee Member. Such meetings shall take place in Moscow, in a location agreed by Otkritie and QIWI Group or by telephone. 4 + + + + + +3.4 The presence of four Committee Members, including two representatives of Otkritie and two representatives of QIWI Group, shall constitute a quorum. + +3.5 The Steering Committee shall validly act only at a duly convened meeting with the approval of at least four (4) of the Committee Members present at such meeting. Upon the approval of a proposal by the Steering Committee, the Steering Committee shall present such proposal to the respective governing body of each Otkritie and of QIWI for approval. For the avoidance of doubt, no decision of the Steering Committee shall be binding on the Parties unless, and the Parties are only required to act upon any decision of the Steering Committee if and to the extent that, such decision is properly approved/ratified by the relevant governing bodies of both Otkritie and QIWI. + +3.6 The Parties agree that the following items are potential areas of joint cooperation to be discussed, among other matters, at Steering Committee meetings: + + (a) Participation of Otkritie as a privileged party in banking projects established by QIWI where QIWI seeks a banking partner; + + (b) Subject to Applicable Law, commercial terms for QIWI to provide consumer scoring data it has collected to Otkritie; + + (c) Commercial terms for Otkritie to act as settlement bank of NKO Rapida in accordance with Clause 4.1; + + (d) Commercial terms relating to the amounts of deposits to be placed by NKO Rapida in Otkritie; + + (e) Separation of NKO Rapida's digital wallet business from the core business of NKO Rapida; + + (f) Commercial terms of cooperation of the parties in the areas of pre-paid cards and loyalty programs; + + (g) Commercial terms of the use by Otkritie of the NKO Rapida brands owned by QIWI Group; and + + (h) Commercial terms of the potential sale of the NKO Rapida's banking license to Otkritie. + +3.7 The Parties agree and acknowledge that no agreement has been reached between the Parties with respect to any of the matters referenced in Clause 3.6, the matters in Clause 3.6 merely reflects potential areas of discussion for the Steering Committee. 5 + + + + + +3.8 Notwithstanding anything to the contrary, nothing in this Agreement shall be deemed or construed as QIWI and Otkritie having reached a binding agreement in respect of any items listed in Clause 3.6. + +3.9 The Parties agree and acknowledge that the Steering Committee shall not represent an exclusive forum through which any of the matters set forth in Clause 3.6 may be discussed between the Parties and that the Parties may reach agreement with respect to any of the matters set forth in Clause 3.6 or any other matter without Steering Committee approval or action. + + 4. Bank Services. + +4.1 For two (2) years following the Effective Time, QIWI covenants that at least one half of the total transactions processed by the Contact money transfer system during such two-year period shall be settled through PJSC Khanty-Mansiysk Bank Otkritie, provided that QIWI may terminate its obligation under this Clause 4.1 at any time, in which case it shall pay to Otkritie a fee equal to the demonstrated costs incurred by Otkritie for such period starting from 1 September 2014, until the date of termination of QIWI's obligations under this Clause 4.1 in connection with (i) the transfer of settlement bank function to PJSC Khanty-Mansiysk Bank Otkritie ; and (ii) supporting the settlement bank functionality for the Contact money transfer system, provided further that such fee shall in no event exceed RUB 50 000 000 (fifty million roubles). + + 5. Confidential Information. + +5.1 Except as provided in clause 5.2, no party shall, and each party shall procure that their Representatives shall not, disclose to any third party, or use or exploit commercially for its or their own purposes, any Confidential Information. The obligations of the parties under this clause 5.1 shall remain in force until the relevant information enters the public domain otherwise than by the default of a party. + +5.2 The obligations of confidentiality in clause 5.1 do not apply in respect of the disclosing of Confidential Information in the following circumstances: + + (a) in connection with the performance of each party's obligations hereunder or the enforcement of its rights hereunder; + + (b) to its Affiliates and the directors, officers, employees, agents, and professional advisers or its and/or their Affiliates (the"Representatives") on a need to know basis to the extent reasonably required for purposes connected with this Agreement; 6 + + + + + + (c) pursuant to any listing agreement with or the rules and regulations of any recognised security exchange on which securities of suchParty or any of its Affiliates are listed and/or traded; + + (d) as required by Applicable Law, + +provided in each case set out in Clauses 5.2(a) and 5.2(b) above, the Party disclosing the same shall take all reasonable steps to preserve the confidentiality thereof and to ensure that such information shall be used only for the purposes for which it has been disclosed. + +5.3 If a Party becomes required, in circumstances contemplated by Clauses 5.2(c) or 5.2(d), to disclose any information, such party shall (save to the extent prohibited by such rules and regulations or Applicable Law) give to the other party such notice as is practical in the circumstances of such disclosure and shall co-operate with the other party, having due regard to the other party's views, and take such steps as the other party may reasonably require in order to enable it to mitigate the effects of, or avoid the requirements for, any such disclosure. + +5.4 In the event that any Affiliate of any party who has received Confidential Information is requested in any Litigation to disclose Confidential Information, that party shall give each other party prompt written notice of such request (if permitted by Applicable Law) so that each other party may seek an appropriate protective order. If in the absence of a protective order a party's Affiliate is compelled to disclose Confidential Information, such Representative may disclose such portion of the Confidential Information that in the opinion of the disclosing party's counsel such Affiliate is compelled to disclose without liability under this Agreement; provided, however, that the disclosing party shall give the other party written notice of the Confidential Information to be disclosed as far in advance of its disclosure as is practicable (if permitted by Applicable Law) and shall use reasonable efforts to obtain assurances that confidential treatment will be accorded to such Confidential Information. + +In this Clause 5.4, "Litigation" means any action, cause of action, claim, demand, suit, proceeding, citation, summons, subpoena, inquiry or investigation of any nature, civil, criminal, regulatory or otherwise, in law or in equity, pending or threatened, by or before any court, tribunal, arbitrator, expert or other governmental authority. + + 6. Effectiveness and Termination. + +6.1 This Clause 6 and Clauses 1, 5, 7 through 9 (inclusive) come into force and effect upon the execution of this Agreement by the Parties. The remaining provisions of this Agreement shall be effective only upon Completion 1 (the "Effective Time"). 7 + + + + + +6.2 Unless otherwise mutual agreed between the Parties, this Agreement shall remain in effect until the earlier of the below events occur: + + (a) The fifth (5t h) anniversary of this Agreement; and + + (b) Otkritie ceasing to own more than 2,237,216 class B shares or American depositary shares of QIWI. + +6.3 Notwithstanding Clause 6.2, this Clause 6 and Clauses 1, 5, 7 through 9 (inclusive) shall survive any termination of this Agreement. + + 7. Miscellaneous. + +7.1 Nothing in this Agreement or in any document referred to in it shall constitute any of the Parties a partner of any other, nor shall the execution, completion and implementation of this Agreement confer on any Party any power to bind or impose any obligations to any third parties on any other Party or to pledge the credit of any other Party. + +7.2 If any provision or part of this Agreement is void or unenforceable due to any Applicable Law, it shall be deemed to be deleted and the remaining provisions of this Agreement shall continue in full force and effect. Each party shall use its reasonable endeavours to replace the invalid provision in that respect with a valid and enforceable substitute provision the effect of which is as close (commercially and legally) to its intended effect as possible. + +7.3 No variation of this Agreement (or any of the documents referred to in it) shall be valid unless it is in writing (which, for this purpose, does not include email) and signed by or on behalf of each of the parties. The expression "variation" includes any variation, supplement, deletion or replacement however effected. + +7.4 This Agreement may be executed in any number of counterparts and by the parties to it on separate counterparts, each of which when executed and delivered shall be an original, but all the counterparts together constitute one instrument. + +7.5 No Party shall assign (whether absolutely or by way of security and whether in whole or in part), transfer, mortgage, charge or otherwise dispose in any manner whatsoever of the benefit of this Agreement or sub-contract or delegate in any manner whatsoever its performance under this Agreement. + +7.6 No term of this Agreement is enforceable under the Contracts (Rights of Third Parties) Act 1999 or otherwise by a person who is not a Party to this Agreement. 8 + + + + + +8. Notices. + +8.1 A notice (including any approval, consent or other communication) in connection with this Agreement and the documents referred to in it or with any arbitration under this Agreement: + + (a) must be in writing in English; + + (b) for the avoidance of doubt, must not be sent by electronic mail; + + + +(c) must be delivered by hand, fax or courier using an internationally recognised courier company to the address specified below in relation to the Party to whom the notice is addressed, and marked for the attention of the person so specified, or to such other address or fax number or marked for the attention of such other person, as the relevant party may from time to time specify by notice given in accordance with this clause. + +The relevant details of each party at the date of this Agreement are: OICL + +Address: 2\4 Letnikovskaya street, 115114, Moscow, Russia + +Fax number: + +Attention: Evgeny Dankevich + +Ruben Aganbegyan\Konstantin Olefir + +and + +QIWI + +Address: Kennedy 12, Kennedy Business Centre, 2nd floor, P.C. 1087, Nicosia, Cyprus + +Fax number: + +Attention: Mr. Philios Yiangou / Mr. Sergey Solonin + +8.2 In the absence of evidence of earlier receipt, any notice shall take effect from the time that it is deemed to be received in accordance with Clause 8.3. 9 + + + + + +8.3 A notice is deemed to be received: + + (a) in the case of a notice delivered by hand or courier at the address of the addressee given above, upon delivery at that address; and + + (b) in the case of a notice delivered by fax, at the time of transmission (provided that a transmission report from the machine from which thefax was sent is received by the sender which indicates that the fax was sent in its entirety to the fax number of the recipient). + +8.4 A notice received, or deemed to be received, on a day which is not a business day in the place of receipt, or after 5pm on any business day in the place of receipt, shall be deemed to have been received on the next following business day in the place of receipt (and for the purposes of this clause, a business day in the place of receipt shall mean a day (other than a Saturday or Sunday) on which banks are open for general business in that place). + +8.5 The parties agree that the provisions of this clause shall not apply to the service of any writ, summons, order, judgment or other document relating to or in connection with any legal proceedings and service of any request for arbitration or other document in arbitral proceedings commenced pursuant to this Agreement shall be at the address given in Clause 9. + + 9. Governing Law and Dispute Resolution. + +9.1 This Agreement and any dispute, controversy or claim arising out of or in connection with it or its subject matter, existence, negotiation, validity, termination, breach or enforceability (including non-contractual disputes or claims) shall be governed by and construed in accordance with the laws of England and Wales. + +9.2 Any dispute, controversy or claim arising out of or in connection with this Agreement or its subject matter, including any question regarding its existence, negotiation, termination, breach, validity or enforceability (including any non-contractual disputes or claims) ("Dispute") shall be referred to, and finally resolved by, arbitration under the Rules of Arbitration (the "LCIA Rules") of the London Court of International Arbitration (the "LCIA") which rules are deemed to be incorporated by reference into this Clause 9.2. + +9.3 There shall be three (3) arbitrators appointed in accordance with the LCIA Rules. The claimant party and the respondent party shall each nominate one (1) arbitrator. Where either party fails to nominate an arbitrator within the time provided by the LCIA Rules, that arbitrator shall be appointed by the LCIA. The third arbitrator, who shall act as the chairman of the tribunal, shall be nominated by agreement of the first two (2) party-appointed arbitrators within fifteen (15) Business Days of the confirmation of the appointment of the second arbitrator, or 10 + + + + + + + +in default of such agreement, appointed by the LCIA. Notwithstanding anything to the contrary in the LCIA Rules, in agreeing upon a third arbitrator, the two arbitrators may communicate directly with each other and their respective appointing parties. Each party expressly agrees and consents to this process for nominating and appointing the arbitrators and, in the event that this Clause 9.3 operates to exclude a party's right to choose its own arbitrator, irrevocably and unconditionally waives any right to do so. + +9.4 The seat, or legal place, of arbitration shall be London, England. + +9.5 The language of the arbitration proceedings shall be English. + +9.6 The award of the arbitrators shall be final and binding on the parties, their successors and assigns. + +9.7 Nothing in Clauses 9.2 to 9.6 shall limit the rights of the parties to bring proceedings against another party in any court of competent jurisdiction in order to: + + (a) enforce an arbitration award rendered in accordance with Clauses 9.2 to 9.6; or + + (b) make a claim for interim or injunctive relief. + +9.8 Each party agrees that if more than one arbitration is commenced under this Agreement or any document related to this Agreement, and any party contends that two or more arbitrations are substantially related and that the issues should be heard in one proceeding, the arbitral tribunal appointed in such proceedings as have been filed with the LCIA first in time shall have the discretion to determine whether, in the interests of justice and efficiency and taking into account the stage of the proceedings and all other relevant circumstances, the proceedings should be consolidated before that arbitral tribunal and any party should be joined to such proceedings. + +9.9 Each party agrees that it may be joined as an additional party to an arbitration involving other parties under this Agreement or any document related to this Agreement. Any joined party (even if it chooses not to participate in the arbitral proceedings) shall be bound by any award rendered by the arbitral tribunal. + +9.10 The law of this arbitration agreement shall be the law of England and Wales. + +9.11 QIWI and OICL hereby irrevocably undertake to at all times maintain an agent with an address in England and Wales for service of process and any other documents in proceedings in England or any other proceedings in connection with 11 + + + + + + this Agreement, and to keep the other party advised of the identity and address of such agent, for so long as it has any obligations under thisAgreement. Any claim form, request for arbitration, judgement or any other notice of legal process whatsoever shall be sufficiently served on: + + (a) QIWI, if delivered to: + + (i) QIWI plc c/o Law Debenture Corporate Services Limited Fifth Floor 100 Wood Street London EC2V 7EX United Kingdom + +or + + (ii) if delivered to the last address notified to OICL as an address for service under this Clause 9. + + (b) OICL, if delivered to: + + (i) Otkritie Capital International Limited 12 Floor, 88 Wood Street London EC2V 7RS United Kingdom + +(or to any other registered office in England and Wales of Otkritie Capital International Limited from time to time); or + + (ii) if delivered to the last address notified to QIWI as an address for service under this Clause 9. + +This Agreement has been duly executed by the parties (or their duly authorised representatives) on the date specified at the beginning of this Agreement. + +[Signature page follows] 12 + + + + + +EXECUTED and DELIVERED ) as a DEED for and on behalf of ) QIWI PLC ) + + + +Signed in the presence of: + + Witness Signature + + Witness Name + + Witness Occupation + + Witness Address 13 + + + + + +EXECUTED and DELIVERED ) as a DEED for and on behalf of ) OTKRITIE INVESTMENTS CYPRUS LIMITED ) + + + +Signed in the presence of: + + Witness Signature + + Witness Name + + Witness Occupation + + Witness Address 14 \ No newline at end of file diff --git a/full_contract_txt/Quaker Chemical Corporation - NON COMPETITION AND NON SOLICITATION AGREEMENT.txt b/full_contract_txt/Quaker Chemical Corporation - NON COMPETITION AND NON SOLICITATION AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..b8f1ebb260a0374f589b7d10064ebf98cce541c8 --- /dev/null +++ b/full_contract_txt/Quaker Chemical Corporation - NON COMPETITION AND NON SOLICITATION AGREEMENT.txt @@ -0,0 +1,87 @@ +EXHIBIT 10.2 EXECUTION VERSION NON-COMPETITION AND NON-SOLICITATION AGREEMENT THIS NON-COMPETITION AND NON-SOLICITATION AGREEMENT (this "Agreement"), dated as of August 1, 2019 (the "Effective Date"), is entered into by Quaker Chemical Corporation ("Buyer"), a Pennsylvania corporation, Gulf Houghton Lubricants Ltd., a company incorporated in the Cayman Islands ("Gulf Houghton"), Gulf Oil International Limited, a company incorporated in the Cayman Islands ("Gulf International"), and GOCL Corporation Limited, a public limited company incorporated in India ("Gulf Oil" and, together with Gulf Houghton and Gulf International, the "Sellers" and each, a "Seller"). In addition, Gulf Oil Lubricants India, Ltd, a public limited company incorporated in India ("Gulf India"), is executing this Agreement solely for purposes of Section 1(c) [Confidentiality; Non-competition; Non-solicitation]. BACKGROUND WHEREAS, Gulf Houghton owns 3,074,270.00 of the outstanding ordinary shares (the "Shares") in Global Houghton Ltd., an exempted company incorporated under the Laws of the Cayman Islands (the "Company"); Gulf International owns approximately 90% of Gulf Houghton; and Gulf Oil is an indirect owner of approximately 10% of Gulf Houghton. WHEREAS, The Company and its subsidiaries are engaged in the business of manufacturing, distributing and/or selling one or more of the following formulated chemical specialty product lines: fire resistant hydraulic fluids, semi-synthetic and specialty metalworking fluids, cleaning fluids, cold-rolling oils, hot-rolling oils, and specialty industrial greases (such business, as conducted by the Company and its Subsidiaries as of the Effective Date, the "Company Business"). WHEREAS, Buyer and its subsidiaries are engaged in the business of manufacturing, distributing and/or selling the following formulated chemical specialty product lines or chemical management services ("CMS"), (i) rolling lubricants (used by manufacturers of steel in the hot and cold rolling of steel and by manufacturers of aluminum in the hot rolling of aluminum); (ii) corrosion preventives (used by steel and metalworking customers generally to protect metal during manufacture, storage, and shipment); (iii) metal finishing compounds (used to prepare metal surfaces for special treatments such as, but not limited to, galvanizing and tin plating and to prepare metal for further processing); (iv) machining and grinding compounds (typically used by customers in cutting, shaping, and grinding metal parts which require special treatment to enable them to tolerate the manufacturing process, achieve closer tolerance, and improve tool life); (v) forming compounds (used generally to facilitate the drawing and extrusion of metal products); (vi) bio-lubricants (typically used in machinery in the forestry and construction industries); (vii) hydraulic fluids (used generally by steel, metalworking, mining, and other customers to operate hydraulic equipment); (viii) chemical milling maskants for the aerospace industry; (ix) temporary and permanent coatings for metal and concrete products, tubes and pipes and other applications; (x) construction products, such as flexible sealants and protective coatings, for various applications; (xi) various specialty greases used in automobile, industrial and various other applications; (xii) various die casting lubricants and mold release agents; (xiii) various dust suppressants, ground control agents and roofing products used in mining; and (xiv) + + + + + +programs to provide CMS (such business, as conducted by Buyer and its subsidiaries as of the Effective Date, the "Existing Business" and, together with the Company Business, the "Combined Business"). WHEREAS, Buyer, Gulf Houghton and other shareholders of the Company are parties to a Share Purchase Agreement dated as of April 4, 2017, under which Buyer is acquiring the Shares (the "Purchase Agreement"). Capitalized terms used herein but not otherwise defined herein shall have the meanings given to such terms in the Purchase Agreement. WHEREAS, Sellers, together with the Company, have been substantially involved in and with the Company's operations and management and possess trade secrets and other confidential information relating to the Company Business and the Company's clients, customers, vendors, suppliers and operations. WHEREAS, it is integral to Buyer's acquisition of the Company Business and a condition precedent to the closing of the transactions contemplated by the Purchase Agreement that the Sellers enter into this Agreement with Buyer to provide for the protection of the Combined Business's customer and vendor relationships, trade secrets, confidential information and other business operations. Pursuant to the Purchase Agreement, Gulf Houghton shall receive cash consideration and shares of Buyer's capital stock in exchange for the Shares owned by Gulf Houghton and as inducement for Gulf Houghton and the other Sellers to enter into this Agreement. NOW THEREFORE, in consideration of the premises and the mutual representations, warranties, covenants and agreements contained in this Agreement and in the Purchase Agreement, the parties, intending to be legally bound, agree as follows: 1. Confidentiality; Non-competition; Non-solicitation. (a) From and after the date hereof, each Seller shall, and shall cause its Affiliates to, hold, and shall use its reasonable best efforts to cause its or their respective Representatives to hold, in confidence any and all information, whether written or oral, concerning Buyer, the Company and the Company Subsidiaries, except to the extent that such Seller can show that such information: (i) is generally available to and known by the public through no fault of any Seller or any of their respective Affiliates or Representatives or (ii) is lawfully acquired by such Seller, any of its Affiliates or their respective Representatives from and after the date hereof from sources that are not prohibited from disclosing such information by a legal, contractual or fiduciary obligation. If any Seller or any of its Affiliates or their respective Representatives are compelled to disclose any information by judicial or administrative process or by other requirements of Law, such Seller shall promptly notify Buyer in writing and shall disclose only that portion of such information that such Seller is advised by its counsel is legally required to be disclosed, provided that such Seller shall use reasonable best efforts to obtain an appropriate protective order or other reasonable assurance that confidential treatment will be accorded such information. + +2 + + + + + +(b) Each Seller agrees that for a period commencing on the Effective Date and ending two years after the Closing Date (the "Non- Compete Period"), it shall not, other than solely through its direct or indirect ownership of Buyer's capital stock or any other interests in Buyer, directly, or indirectly, including through or on behalf of a subsidiary, anywhere in the world, excluding India: (i) own, manage, operate or control any business which competes with any Combined Business or (ii) be or become a shareholder, partner, member or owner of any Person who is engaged in any Combined Business; provided, however that nothing in this Agreement shall: (i) prohibit or restrict any Seller, directly or indirectly, from owning, as a passive investor, not more than five (5%) percent collectively and in the aggregate of any class of outstanding publicly traded securities of any Person so engaged; (ii) prohibit or restrict any Seller, directly or indirectly, from engaging in such Seller's business as conducted on the Effective Date and reasonable extensions thereof, which may include routine, day-to-day transactions with any entity, and (iii) apply to or restrict any business of which a Seller acquires control after the Effective Date provided that the acquired business did not receive more than $25,000,000 of its aggregate net sales (as measured during the 12 full calendar months prior to such acquisition) from product lines included within the definition of Company Business. Each Seller agrees that this covenant is reasonable with respect to its duration, geographical area and scope. For purposes of this Agreement, the term "control" (including the terms "controlled by" and "under common control with") means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise. (c) Gulf Oil and Gulf India each agree during the Non-Compete Period not to acquire, directly or indirectly, control of any businesses involved in, or otherwise competing with, the business of the Combined Business from any entity on Schedule 1 hereto. (d) Each Seller agrees that for a period commencing on the Effective Date and ending three years after the Closing Date (the "Non-Solicit Period"), each Seller shall not, directly or indirectly: (i) induce, solicit, recruit or attempt to persuade any employee of the Combined Business to terminate his or her employment with the Buyer or any of its subsidiaries, or (ii) solicit the employment of any of the employees of the Combined Business. Notwithstanding the above, Sellers shall not be restricted from (1) soliciting for employment or hiring former employees of Buyer or the Company (including their respective subsidiaries) whose employment was terminated by Buyer or the Company (including their respective subsidiaries) at least six months prior to such initial solicitation by such Seller or (2) soliciting employees of the Combined Business by means of a general solicitation through a public medium or general or mass mailing that is not specifically targeted at employees or former + +3 + + + + + +employees of the Combined Business; provided, however, that this clause (2) shall not permit any Seller to hire any such employees during the Non-Solicit Period. (e) It is the intention of the parties that the covenants contained in this Section 1 shall be enforced to the greatest extent (but to no greater extent) in time, area and degree of participation as is permitted by the Law of that jurisdiction whose Law is applicable to any acts allegedly in breach of such covenants. To this end, the parties agree that the covenants contained in this Section 1 shall be construed to extend in time and territory and with respect to degree of participation only so far as they may be enforced in such jurisdiction, and that the covenants contained in this Section 1 are to that end hereby declared divisible and severable. It being the purpose of this Section 1 to govern competition by the Sellers and their respective subsidiaries, the non-competition covenants contained in this Section 1 shall be governed by and construed according to the Law of all the jurisdictions in which competition in breach of this Agreement is alleged to have occurred or to be threatened that best gives them effect. 2. Notices. All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been given: (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by facsimile or e-mail of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next Business Day if sent after normal business hours of the recipient or (d) on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications must be sent to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 2): To the Buyer: Quaker Chemical Corporation One Quaker Park 901 E. Hector Street Conshohocken, PA 19428-2380 Facsimile: (610) 832-4496 E-mail: traubr@quakerchem.com Attention: Robert T. Traub with a copy (which shall not constitute notice) to: Drinker, Biddle & Reath LLP One Logan Square Suite 2000 Philadelphia, Pennsylvania 19103 Facsimile: (215) 988-2757 E-mail: Douglas.Raymond@dbr.com Attention: F. Douglas Raymond, III + +4 + + + + + +If to any of the Sellers: Gulf Houghton Lubricants Ltd. Whitehall House, 238 North Church Street, P.O. Box 1043, George Town Grand Cayman KY1-1102 Cayman Islands Facsimile: (305) 675-2619 Email: Sandra@accla.im Attention: Sandra Georgeson with a copy (which shall not constitute notice) to: Mayer Brown LLP 1221 Avenue of the Americas New York, New York 10020 Facsimile: (212) 849-5914 E-mail: rwheeler@mayerbrown.com Attention: Reb D. Wheeler 3. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and permitted assigns; provided that this Agreement shall not be assignable or otherwise transferable by any party without the prior written consent of the other party (which consent shall not be unreasonably withheld or delayed) and any purported assignment or transfer without such consent shall be null and void. No assignment shall relieve the assigning party of any of its obligations hereunder. 4. Governing Law. (a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE COMMONWEALTH OF PENNSYLVANIA WITHOUT GIVING EFFECT TO ANY CHOICE OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE COMMONWEALTH OF PENNSYLVANIA OR ANY OTHER JURISDICTION). (b) ANY LEGAL SUIT, ACTION OR PROCEEDING ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE OTHER TRANSACTION DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY MAY BE INSTITUTED IN THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA OR THE COURTS OF THE COMMONWEALTH OF PENNSYLVANIA IN EACH CASE LOCATED IN THE CITY OF PHILADELPHIA AND COUNTY OF PHILADELPHIA, AND EACH PARTY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF SUCH COURTS IN ANY SUCH SUIT, ACTION OR PROCEEDING. SERVICE OF PROCESS, SUMMONS, NOTICE OR OTHER DOCUMENT BY MAIL TO SUCH PARTY'S ADDRESS SET FORTH HEREIN SHALL BE EFFECTIVE SERVICE OF PROCESS FOR ANY SUIT, ACTION OR OTHER PROCEEDING BROUGHT IN ANY SUCH COURT. THE + +5 + + + + + +PARTIES IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY OBJECTION TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR ANY PROCEEDING IN SUCH COURTS AND IRREVOCABLY WAIVE AND AGREE NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. (c) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT OR THE OTHER TRANSACTION DOCUMENTS IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES AND, THEREFORE, EACH SUCH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LEGAL ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER TRANSACTION DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY TO THIS AGREEMENT CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT SEEK TO ENFORCE THE FOREGOING WAIVER IN THE EVENT OF A LEGAL ACTION, (B) SUCH PARTY HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) SUCH PARTY MAKES THIS WAIVER VOLUNTARILY AND (D) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 4(C) [Governing Law]. 5. Injunctive Relief; Attorneys Fees. Each Seller agrees that in the event of a breach of this Agreement, the damage to Buyer will be inestimable and that therefore any remedy at Law or in monetary damages shall be inadequate. Accordingly, the parties agree that Buyer shall, in addition to monetary damages incurred by reason of any such breach or potential breach, without the necessity of posting any bond or similar instrument (and Sellers hereby irrevocably waive any right it may have to require the obtaining, furnishing or posting of any such bond or similar instrument) be entitled to seek injunctive relief (including specific performance) against the Sellers for breach of this Agreement. If any action or proceeding shall be commenced to enforce this Agreement or any right arising in connection with this Agreement, the prevailing party in such action or proceeding shall be entitled to recover from the other party the reasonable attorneys' fees, costs and expenses incurred by such prevailing party in connection with such action or proceeding. 6. Entire Agreement. This Agreement and the other Transaction Documents to which the parties hereto are parties constitute the sole and entire agreement of the parties to this Agreement with respect to the subject matter contained herein and therein, and supersede all prior and contemporaneous understandings and agreements, both written and oral, with respect to such subject matter. 7. Amendment Waivers, etc. No amendment, modification or discharge of this Agreement, and no waiver hereunder, shall be valid or binding unless set forth in writing and duly executed by the party against whom enforcement of the amendment, modification, discharge or waiver is sought. Any such waiver shall constitute a waiver only with respect to the + +6 + + + + + +specific matter described in such writing and shall in no way impair the rights of the party granting such waiver in any other respect or at any other time. Neither the waiver by a party of a breach of or a default under any of the provisions of this Agreement, nor the failure by any party, on one or more occasions, to enforce any of the provisions of this Agreement or to exercise any right or privilege hereunder, shall be construed as a waiver of any other breach or default of a similar nature, or as a waiver of any of such provisions, rights or privileges hereunder. The rights and remedies herein provided are cumulative and none is exclusive of any other, or of any rights or remedies that any party may otherwise have at law or in equity. 8. Severability. If any term or provision of this Agreement is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction. Upon such determination that any term or other provision is invalid, illegal or unenforceable, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the greatest extent possible. 9. Counterparts; Effectiveness; Third Party Beneficiaries. This Agreement may be executed in counterparts, each of which shall be deemed an original and both of which shall together constitute one and the same instrument. This Agreement shall become effective when each party shall have received a counterpart hereof signed by the other party. Until and unless each party has received a counterpart hereof signed by the other party, this Agreement shall have no effect and none of the parties shall have any right or obligation hereunder (whether by virtue of any other oral or written agreement or other communication). Facsimiles, e-mail transmission of .pdf signatures or other electronic copies of signatures shall be deemed to be original counterparts. No provision of this Agreement is intended to confer any rights, benefits, remedies, obligations or liabilities hereunder upon any Person other than the parties and their respective successors and permitted assigns. 10. Cooperation; Further Assurances. Each of the parties shall execute such further instruments and take such other actions as the other party shall reasonably request in order to effectuate the purposes of this Agreement. 11. Interpretation. The words "hereof", "herein" and "hereunder" and words of like import used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The captions herein are included for convenience of reference only and shall be ignored in the construction or interpretation hereof. References to Sections are to Sections of this Agreement unless otherwise specified. Any singular term in this Agreement shall be deemed to include the plural, and any plural term the singular. Whenever the words "include", "includes" or "including" are used in this Agreement, they shall be deemed to be followed by the words "without limitation", whether or not they are in fact followed by those words or words of like import. "Writing", "written" and comparable terms refer to printing, typing and other means of reproducing words (including electronic media) in a visible form. References to any Person include the successors and permitted assigns of that Person. References from or through any date mean, unless otherwise specified, from and including or through and including, respectively. + +7 + + + + + +Any reference to "days" means calendar days unless Business Days are expressly specified. If any action under this Agreement is required to be done or taken on a day that is not a Business Day, then such action shall be required to be done or taken not on such day but on the first succeeding Business Day thereafter. The headings in this Agreement are for reference only and shall not affect the interpretation of this Agreement. [Signature page follows] + +8 + + + + + +IN WITNESS WHEREOF, each of the parties has duly executed this Agreement as of the Effective Date. QUAKER CHEMICAL CORPORATION By: /s/ Robert T. Traub Name: Robert T. Traub Title: Vice President, General Counsel and Corporate Secretary [Signature Page to Non-Competition and Non-Solicitation Agreement] + + + + + +GULF HOUGHTON LUBRICANTS LTD. By: /s/ Sandra Georgeson Name: Sandra Georgeson Title: Director [Signature Page to Non-Competition and Non-Solicitation Agreement] + + + + + +GULF OIL INTERNATIONAL, LTD. By: /s/ Benjamin Booker Name: Benjamin Booker Title: Director [Signature Page to Non-Competition and Non-Solicitation Agreement] + + + + + +GOCL CORPORATION LIMITED By: /s/ Subhas Pramanik Name: Subhas Pramanik Title: Managing Director [Signature Page to Non-Competition and Non-Solicitation Agreement] + + + + + +GULF OIL LUBRICANTS INDIA, LTD. By: /s/ Ravi Chawla Name: Ravi Chawla Title: Managing Director [Signature Page to Non-Competition and Non-Solicitation Agreement] \ No newline at end of file diff --git a/full_contract_txt/QuantumGroupIncFl_20090120_8-K_EX-99.2_3672910_EX-99.2_Hosting Agreement.txt b/full_contract_txt/QuantumGroupIncFl_20090120_8-K_EX-99.2_3672910_EX-99.2_Hosting Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..17214199429f6d648ea806b4b2638a082fbc8b04 --- /dev/null +++ b/full_contract_txt/QuantumGroupIncFl_20090120_8-K_EX-99.2_3672910_EX-99.2_Hosting Agreement.txt @@ -0,0 +1,631 @@ +EXHIBIT 99.2 + +e-business Hosting Agreement 1.0 Introduction This e-business Hosting Agreement ("Agreement") between International Business Machines Corporation ("IBM") and The Quantum Group Inc., ("Customer"), sets forth the terms and conditions under which IBM will provide hosting and related services ("Services") to Customer. The Agreement includes the terms and conditions and the documents referenced herein ("Base Terms") and the following Attachments: Attachment A - Services; Attachment B - Hosting Components; and Attachment C - Charges In the event of a conflict between the Base Terms and an attachment listed herein ("Attachment"), the Base Terms will prevail, except where an Attachment, or a provision contained therein expressly states that it will prevail over the Base Terms. 2.0 Definitions "Acceptable Use Policy" means the Acceptable Use Policy for IBM e-business Services, located on the Internet at www.ibm.com/services/e-business/aup.html, as of the Effective Date, and any subsequent modification in accordance with Section 13.2 below. "Affiliates" means entities that control, are controlled by, or are under common control with a party to this Agreement. "Base Components" means the hardware and software that IBM makes available, if any, as specified in Attachment B. "Bandwidth" means the measurement of samples of usage taken every five (5) minutes during a calendar month and collecting two (2) readings (cumulative of inbound feeds and cumulative of outbound feeds at the same measured point in time). The measurements are stored and become data points. At the end of the month, all data points taken during the month are ranked in ascending order. IBM will discard the top five percent (5%) for each set (inbound and outbound) of data points. The highest remaining sample of the two (2) sets becomes the Customer's Committed or Burstable usage number for that billing cycle. "Burstable Bandwidth" means the bandwidth consumption in excess of the Committed Bandwidth. "Committed Bandwidth" means the fixed circuit capacity that IBM will make available to Customer for connectivity to the Internet. Customer's data traffic between the e-business Hosting Center and the Internet may not exceed Committed Bandwidth, unless otherwise expressly specified in an Attachment. "Content" means information, software, and data that Customer provides, including, without limitation, any hypertext markup language files, scripts, programs, recordings, sound, music, graphics, images, applets or servlets that Customer or its Subcontractors or Services Recipients create, install, upload or transfer in or through the e-business Hosting Environment and/or Customer Components. "Content Administrator" means an employee or Subcontractor of Customer who is authorized by Customer to install, upload and/or maintain Content using a User Identification. "Customer" means IBM's Customer to whom the Services are being provided. "Customer Components" means the hardware, software and other products, data and Content that Customer provides, including those specified in Attachment B. "Customer Initiated Changes" means patches or changes to the environment dictated to be installed by Customer, and installed by either Customer or by IBM. "Customer Production Ready Date" or "CPRD" means the date (following the Hosting Service Ready Date) that the following items have been completed: (1) Customer has notified IBM that Customer has completed application testing and loading of Customer Content, and (2) IBM has notified Customer that monitoring and reporting have been enabled and end users may now begin using the Services. Commencing on the Customer Production Ready Date, Customer will not have administrative access for fully managed devices, unless specifically requested for a limited period of time mutually agreed between the parties, using the established change management procedures. + +Page 1 of 36 + +"Direct Access Storage" or "DAS" means data storage devices that are directly attached to a server. + +Source: QUANTUM GROUP INC /FL, 8-K, 1/20/2009 + + + + + +"Direct Access Storage" or "DAS" means data storage devices that are directly attached to a server. "e-business Hosting Environment" means the Base Components and the IBM provided Internet access bandwidth, collectively. "Hosting Service Ready Date" means a date when IBM notifies Customer that Services are available for Customer use and IBM installation responsibilities have been completed for such Services. Services may be initiated in stages and monthly recurring charges will begin for any portion of Services specified in such notification. "e-business Hosting Center" means a facility used by IBM to provide Services. "Internet" means the public worldwide network of TCP/IP-based networks. "Local Storage" has the same definition as Direct Access Storage "Logical Unit Number" or "LUN" means the individual component in the SAN storage system that may be accessed. Each disk or disk partition in a SAN storage system array has a LUN assigned to it. "Managed Application Service" means a service provided by IBM that includes the Services defined in Attachment A as Managed Application Services. "Managed Application Solution" means a Customer's application hosting environment consisting of network, storage and server devices and includes Managed Application Services for all of the devices. A Managed Application Solution cannot contain any Managed Devices that do not also include Managed Applications Services in order to qualify for a Service Level Agreement as defined in Attachment A. "Managed NAS Storage - Dedicated Environment" means a physical NAS Storage controller and associated disks, provisioned by IBM or Customer that is dedicated to a Customer and managed by IBM. "Managed NAS Storage - Shared Environment" means a physical NAS Storage controller and associated disks, provisioned by IBM, that is shared between customers and managed by IBM. Resources are allocated by IBM based on requirements from the Customer and these resources are dedicated for the Customer's use. "Managed SAN Storage - Dedicated Environment" means a physical SAN Storage controller and associated disks that is dedicated to Customer (not shared with other IBM customers) and managed by IBM. Resources are allocated by IBM based on requirements from the Customer. "Managed SAN Storage - Shared Environment" means a physical SAN Storage controller and associated disks that is shared between two or more IBM customers and managed by IBM. Resources are allocated by IBM based on requirements from the Customer. "Managed Server" means a physical or Virtual Server Base Component for which IBM is providing setup, configuration, administration and management Services. "Materials" means literary or other works of authorship (such as programs, program listings, programming tools, documentation, reports, drawings and similar works) that IBM may deliver to Customer as part of Services. "Materials" does not include licensed program products available under their own license agreements or Base Components. "Middleware" means any programming that serves to "glue together" or mediate between two separate and often already existing programs. A common application of middleware is to allow programs written for access to a particular database to access other databases. The systematic tying together of disparate applications, often through the use of middleware, is known as Application Integration. "Network Interface Card (NIC) means a computer circuit board or card that is installed in a computer so that it can be connected to a network. "Operational Assistance" means the additional operational and physical assistance Services provided by IBM. "Operational Events" means the activities related to physical operations of an unmanaged Customer environment. These activities can include: Device reboot or restart Changing a tape Changing a CD or a disk floppy Preparing tapes for sending them offsite Vendor management for hardware repair or replacement + +Page 2 of 36 + +Source: QUANTUM GROUP INC /FL, 8-K, 1/20/2009 + + + + + +Other types of events with the prior approval of the IBM PM "Operating System" or "OS" means the master control program (for example, Windows or AIX) that manages a computer's internal functions and provides a means of control to the computer's operations and file system. "OS Image" means the initial binary image that a boot loader loads into memory and transfers control to start an operating system. The OS image is typically an executable containing the operating system kernel. "OS Instance" means an occurrence of the OS Image. "Ping" means a utility to determine whether a specific IP address is accessible. "Required Consents" means any consents or approvals required to give IBM and its Subcontractors the right or license to access, use and/or modify in electronic form and in other forms, including derivative works, the Customer Components, without infringing the ownership or intellectual property rights of the providers, licensors, or owners of such Customer Components. "Services Recipients" means any entities or individuals receiving or using the Services, or the results or products of the Services. "SmartHands" means the additional systems administrative and technical, physical and logical assistance Services provided by IBM. mm. "System Administration" means day-to-day routine tasks performed in a production environment by a system administrator. This does not include, re-carving storage sub-systems, re-building enterprise class systems, major upgrades to the environment, major security services, database administration, application development, systems integration or extensive performance tuning responsibilities. "Storage Area Network" or "SAN" means the storage area network environment consisting of a storage area network fabric composed of storage area network switches, Host Bus Adapters and cables and a storage area network storage controller and associated disks. "System Images" means the files related to the OS and applications, but excluding Customer data files. "Subcontractor" means a contractor, vendor, agent, or consultant selected and retained by IBM or Customer, respectively. "TCP/IP" means Transmission Control Protocol/Internet Protocol. "Time and Materials (T&M)" means the additional operational, systems administrative and technical, physical and logical assistance Services provided by IBM that are not included with the services set forth in Attachment A - Services "User Identification" or "User ID" means a string of characters that uniquely identifies a Content Administrator. "Virtual Local Area Network (VLAN)" means a logical grouping of two or more devices which are not necessarily on the same physical network segment, but which share the same network segment. "Virtual Private Network (VPN)" means a private network that uses a public network (usually the Internet) to connect remote sites or users together. "Virtual Server" means an instance of a fully functional server residing with other instances on a physical server and isolated from other instances via virtualization software (such as VMWare) and shares the resources of the physical server. The virtualization software provides resource management for all of the instances. 3.0 IBM Services Responsibilities IBM will perform the Services described in Attachment A and other applicable Attachments. IBM Contact IBM will designate an individual to whom Customer will address communications specific to the provision of the Services provided under this Agreement ("IBM Contact"). 4.0 Term and Termination Term This Agreement will be effective beginning on 12:01 a.m., Eastern Time, on the day after the date of last signature to these Base Terms ("Effective Date"). This Agreement will remain in effect for Thirty-six (36) + +Page 3 of 36 + +Source: QUANTUM GROUP INC /FL, 8-K, 1/20/2009 + + + + + +months following the Hosting Service Ready Date ("Term"), unless terminated earlier in accordance with the terms herein. Termination for Cause Customer or IBM may terminate this Agreement for material breach of this Agreement by the other upon written notice containing the specific nature and dates of the material breach. The breaching party will have thirty (30) days from receipt of notice to cure such breach, except for nonpayment by Customer, which must be cured within five (5) days from receipt of notice. If such breach has not been timely cured, then the non-breaching party may immediately terminate this Agreement upon written notice. Termination for Convenience Customer may terminate this Agreement, or any portion of Services specified herein, for convenience by: providing at least sixty (60) days prior written notice to IBM; and paying the applicable early termination charges specified in Attachment C. Effect of Termination Upon the date of termination, all Customer payment obligations accrued hereunder through the date of termination will become due and payable. 5.0 Charges and Payment Charges Customer will pay to IBM all applicable charges specified in Attachment C. Charges may be specified as one-time, recurring, or usage. IBM will invoice such charges when they begin or are due as set forth in Attachment C. Payment IBM invoices will specify the amount due. Payment is due and payable by month end for any invoice received by the 10th of the month, otherwise payment is due thirty (30) days from receipt of invoice. Customer agrees to pay accordingly, including any late payment fees. Payment will be made in United States dollars. Taxes Customer will pay or provide appropriate exemption documentation for all taxes, duties, levies, and any other fees (except for taxes based upon IBM's net income) related to the Services imposed by any governmental authorities. Charges specified herein are exclusive of any such taxes, duties, levies or fees. 6.0 Warranties and Disclaimers IBM Representations and Warranties IBM represents and warrants that: it will perform the Services using reasonable care and skill and in accordance with this Agreement; and it has the requisite corporate power and authority to execute, deliver and perform its obligations under this Agreement. Exclusivity of Warranties THE WARRANTIES IN SECTION 6.1 ARE THE EXCLUSIVE WARRANTIES FROM IBM. THEY REPLACE ALL OTHER WARRANTIES, INCLUDING, WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY, AND FITNESS FOR A PARTICULAR PURPOSE. Security Customer acknowledges that IBM offers numerous security options, and it is Customer's responsibility to select the set of security options that it determines meet Customer's needs. IBM will implement the security options specified herein. Customer acknowledges that IBM does not control the transfer of data over telecommunications facilities, including the Internet. IBM does not warrant secure operation of the Services or that it will be able to prevent third party disruptions of the e-business Hosting Environment or Customer Components. Customer agrees that IBM shall have no liability for any provision of security-related services or advice that IBM may voluntarily provide outside the scope of Services specified herein. + +Page 4 of 36 + +Other Disclaimers + +Source: QUANTUM GROUP INC /FL, 8-K, 1/20/2009 + + + + + +Other Disclaimers IBM does not warrant uninterrupted or error-free operation of any Service or that IBM will correct all defects. IBM does not make any representation or warranty with respect to Customer's responsibilities set forth in Section 11.6. IBM provides Materials, non-IBM products, and non-IBM services WITHOUT WARRANTIES OF ANY KIND. However, non-IBM manufacturers, suppliers, or publishers may provide their own warranties to you. IBM does not operate as a provider of services regulated by the Federal Communications Commission (FCC) or state regulatory authorities (State Regulators), and does not intend to provide any services which are regulated by the FCC or State Regulators. If the FCC or any State Regulator imposes regulatory requirements or obligations on any Services provided by IBM hereunder, IBM may change the way in which such Services are provided to Customer to avoid the application of such requirements or obligations to IBM (e.g., by acting as Customer's agent for acquiring such Services from a third party common carrier). 7.0 Confidentiality All information exchanged between the parties is non-confidential. If either or both parties require the exchange of confidential information, such information will be exchanged under the terms and conditions of a separate written confidentiality agreement. With respect to any confidential information contained in or traveling through the e-business Hosting Environment or Customer Components, as is contemplated herein, the provisions of Sections 6, 9, and 10 herein will prevail to the extent of any inconsistent provisions in the confidentiality agreement. 8.0 Indemnification Indemnification by IBM If a third party claims that Materials or Base Components IBM provides to Customer infringe that party's patent or copyright, IBM will defend the Customer and its employees, officers, and directors against that claim at IBM's expense and pay all costs, damages, and reasonable attorneys' fees that a court finally awards (or which IBM agrees in any final settlement), provided that Customer: promptly notifies IBM in writing of the claim; and allows IBM to control, and cooperates with IBM in, the defense and any related settlement negotiations. If such a claim is made or appears likely to be made, Customer agrees to permit IBM to enable Customer to continue to use the Materials or Base Components, or to modify them, or replace them with non-infringing Materials or Base Components that are at least functionally equivalent. If IBM determines that none of these alternatives is reasonably available, Customer agrees to return the Materials or Base Components (if in Customer's possession) to IBM on IBM's written request. IBM will give Customer a credit equal to the amount Customer paid IBM for the applicable Materials or for use of the applicable Base Components up to a maximum of twelve (12) months of applicable charges. This is IBM's entire obligation to Customer with regard to any claim of infringement. Notwithstanding the foregoing, IBM is not responsible for third party claims based on: anything Customer provides which is incorporated into the Materials; Customer's modification of the Materials; the combination, operation, or use of the Materials with any product, data, or apparatus that IBM did not provide; or non-IBM hardware, software, or data, including those that may be in the Base Components. Indemnification by Customer Customer will defend IBM and its Affiliates and their employees, officers, and directors, at Customer's expense, and pay all costs, damages, and reasonable attorneys' fees that a court finally awards (or which Customer agrees in any final settlement) for any third party claim: that Content or Customer's use of the Services violates a Customer's obligation in Sections 11.3(b) or 11.5 (b); that Customer Components infringe that party's patent or copyright; that is brought by a Services Recipient and is related, directly or indirectly, to the Services; or + +Page 5 of 36 + +Source: QUANTUM GROUP INC /FL, 8-K, 1/20/2009 + + + + + +arising out of or related to a mechanics' lien Customer is required to cancel and discharge pursuant to this Agreement. For indemnification under this Section 8.2, IBM will: promptly notify Customer in writing of the claim; and allow Customer to control, and will cooperate with Customer in, the defense and any related settlement negotiations. 9.0 Limitation of IBM's Liability Circumstances may arise where, because of a default on IBM's part or other liability, Customer is entitled to recover damages from IBM. Regardless of the basis on which Customer is entitled to claim damages from IBM (including fundamental breach, negligence, misrepresentation, or other contract or tort claim), IBM is liable for no more than: indemnification payments as provided in Section 8.1; damages for bodily injury (including death) and damage to real property and tangible personal property; and the amount of any other actual direct damages, up to the greater of $100,000 or the charges paid by Customer to IBM for the Services in the twelve (12) months immediately preceding the accrual of the first claim related to the Services. The foregoing limit also applies to any of IBM's Affiliates and Subcontractors. It is the cumulative maximum for which IBM and its Affiliates and Subcontractors are collectively responsible. Under no circumstances is IBM, its Affiliates or its Subcontractors liable for any of the following: third party claims against Customer for damages (other than those expressly provided in Subsections 9.0(a) and 9.0(b)); or loss of, or damage to, Customer's or any other entity's records or data. 10.0 Disclaimer of Consequential Damages In no event will either party be liable to the other for special, incidental, or indirect damages or for any consequential damages (including lost profits or savings), even if they are informed of the possibility; provided that this Section 10.0 does not apply to Customer's failure to pay any amounts owing to IBM under this Agreement (including amounts owing for Services that would have been rendered but for Customer's breach of this Agreement). 11.0 Other Customer Obligations Customer Contact Customer will designate an individual to whom all of IBM's communications will be addressed and who has the authority to act and make decisions for Customer in all aspects of the Services, including requesting changes, problem resolution, Service requests, assignment of Customer focal points with authority over specific Services, and designation of Customer Authorized Representatives ("Customer Contact"). Services Support Customer will comply with its responsibilities to support the Services as specified in applicable Attachments. Such obligations are to be performed at no charge to IBM. IBM's obligations are contingent on Customer meeting such support obligations. Representations and Warranties Customer represents and warrants that: it has the requisite corporate power and authority to execute, deliver and perform its obligations under this Agreement; Customer has no contractual or other obligation that (i) restricts or prohibits Customer's execution or performance of this Agreement, or (ii) Customer will breach in connection with the execution or performance of this Agreement; and its use of the Services and all Content will comply with the Acceptable Use Policy. Suspected Violations IBM reserves the right to investigate potential violations of the representations and warranties in Subsection 11.3(b). If IBM reasonably determines that a breach of any such warranty has occurred, then IBM may, in its sole discretion: restrict Customer's access to the Services; + +Page 6 of 36 + +Source: QUANTUM GROUP INC /FL, 8-K, 1/20/2009 + + + + + +remove or require removal of any offending Content; terminate this Agreement for cause; and/or exercise other rights and remedies, at law or in equity. Except in an emergency or as may otherwise be required by law, before undertaking the activities in Subsection 11.4(a) or 11.4(b), IBM will attempt to notify Customer by any reasonably practical means under the circumstances, such as, without limitation, by telephone or e-mail. Customer will promptly notify IBM of any event or circumstance related to this Agreement, Customer's use of the Services, or Content of which Customer becomes aware that could lead to a claim or demand against IBM and Customer will provide all relevant information relating to such event or circumstance to IBM at IBM's request. Customer Components Customer (or its Affiliates or third parties) retains all right, title, and interest or license in and to the Customer Components. Customer hereby grants to IBM, its Affiliates and Subcontractors all rights and licenses to, or agrees to promptly obtain and keep in effect Required Consents for all Customer Components, necessary for IBM to perform all of its obligations as set forth in this Agreement. Upon request, Customer will provide to IBM evidence of any such rights, licenses, or Required Consents. IBM will be relieved of its obligations to the extent that they are affected by Customer's failure to promptly obtain and provide to IBM any such rights, licenses, or Required Consents. IBM will adhere to reasonable terms and conditions pertaining to Customer Components as notified in writing to IBM. IBM agrees not to remove or alter any copyright or other proprietary notice on or in any Customer Component without Customer's consent. Capacity Planning Customer acknowledges it is its responsibility to determine whether the Services, e-business Hosting Environment, Customer Components and their combination will meet Customer's capacity, performance, or scalability needs. Customer is responsible for planning for and requesting changes to the e-business Hosting Environment, including any additional capacity required to support anticipated peaks in demand that may significantly increase web site hits, transaction volumes, or otherwise increase system resource utilization. Content Customer is solely responsible for: all Content including, without limitation, its selection, creation, encryption, transmission, transfer, design, licensing, installation, accuracy, maintenance, testing, backup and support; all copyright, patent and trademark clearances in all applicable jurisdictions and usage agreements for any and all Content; the selection and implementation of controls on the access and use of Content; and the selection, management, separate storage of keys, and use of any public and private keys and digital certificates it may use with the Services. 12.0 Other License and Rights License for Base Components IBM (or its Affiliates or subcontractors) retains all right, title, and interest in Base Components. IBM grants Customer a nonexclusive, nontransferable, revocable license to access and use the Base Components solely in connection with the Services as provided under this Agreement. Customer agrees not to download or otherwise copy, reverse assemble, reverse compile, decompile, or otherwise translate the software portions of the Base Components, other than to make one copy for backup purposes. If IBM provides as a Base Component a Microsoft Corporation product, the terms and conditions of the Microsoft Customer License Terms will also apply for such products. Such Terms are located on the Internet at http://www.ibm.com/services/e-business/hosting/microsoftlicense.html. Customer agrees not to remove or alter any copyright or other proprietary notice on or in any Base Component without IBM's consent. + +Page 7 of 36 + +No Sale or Lease of Goods + +Source: QUANTUM GROUP INC /FL, 8-K, 1/20/2009 + + + + + +No Sale or Lease of Goods As between Customer and IBM, IBM retains all right, title and interest in the Base Components. No goods are sold or leased by IBM under this Agreement. If Customer desires to purchase or lease goods from IBM, such purchase or lease will be governed by a separate mutually acceptable written agreement between Customer and IBM or an IBM Affiliate. No Lease of Real Property This Agreement is a services agreement and not a lease of any real property. 13.0 Changes Service Description IBM, in its reasonable discretion, may change the terms and conditions of Attachment A upon at least ninety (90) days prior notice to Customer if such change was the result of: law, regulation, or similar governmental action; a ruling by a court of competent jurisdiction; or changes in the method of service delivery that affect similar IBM e-business hosting customers. Changes as a result of a, b, or c above will be effective on the date IBM specifies in the notice. Acceptable Use Policy IBM, in its reasonable discretion, may modify the Acceptable Use Policy upon thirty (30) days' prior notice to Customer. If such modification has a material adverse effect on the Customer's use of the Services and provided such modification is not required by law, regulation, or similar governmental action, or a ruling by a court of competent jurisdiction, Customer's sole remedy is to terminate this Agreement without the payment of termination charges provided Customer gives IBM notice of its intent to terminate within ninety (90) days of the effective date of such modification. Project Change Control Procedure This Agreement may be amended only by a writing signed by authorized representatives of both parties. Requests for such amendment ("Project Change Request" or "PCR") should be submitted in writing by the requesting party. The PCR should reference this Agreement, describe in a reasonable level of detail the proposed change, the rationale for the change, and the impact the proposed change may have on the Agreement. The parties will review the PCR and will do one of the following: authorize the change by signing the PCR; agree in writing to submit the PCR for further investigation. In such case, Customer agrees to pay IBM for its reasonable charges, if any, for such investigation. The investigation will determine the technical merits and the effect on the charges, schedule, and other terms and conditions that may result from the implementation of the PCR. The parties will then decide either to accept or to reject the PCR; or reject the PCR. If the PCR is rejected, the rejecting party will inform the requesting party of the reason for the rejection. A mutually signed PCR will be deemed an amendment to this Agreement. Any modification of this Agreement requested by Customer as a result of laws applicable to Customer will be considered a PCR covered by this Subsection. Until a change is agreed in writing, both parties will continue to act in accordance with the latest agreed version of the Agreement. 14.0 General Headings The headings of the various sections of this Agreement have been inserted for convenience only and shall not affect the interpretation of this Agreement. Survival Any of these terms and conditions which by their nature extend beyond the Agreement termination or expiration remain in effect until fulfilled, including, without limitation, Sections 4.4, 5, 6, 7, 8, 9, 10, 11.3, 11.4, 11.7, 12.2, 12.3, and 14, and apply to both Customer's and IBM's respective successors and assignees. + +Page 8 of 36 + +Choice of Law + +Source: QUANTUM GROUP INC /FL, 8-K, 1/20/2009 + + + + + +Choice of Law This Agreement will be governed by the substantive laws of the State of New York, without regard for its conflict of laws provisions. Waiver of Jury Trial The parties waive any right to a jury trial in any proceeding arising out of or related to this Agreement. Severability If any provision of this Agreement shall be held by a court of competent jurisdiction to be invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining provisions of this Agreement shall in no way be affected or impaired thereby, so long as the remaining provisions of this Agreement still express the original intent of the parties. If the original intent of the parties can not be preserved, this Agreement shall either be renegotiated or terminated. Publicity and Trademarks Neither party grants the other the right to use its or any of its Affiliates' trademarks, trade names, or other designations in any promotion, publication, or Web site without prior written consent. Except as may be required by law or as may be required by IBM to perform the Services, neither party may disclose to any third party the terms and conditions of this Agreement, without prior written consent. No Third-Party Beneficiaries Except as expressly provided in Section 8, this Agreement does not create any intended third party beneficiary rights. Personnel Each party is responsible for the supervision, direction, and control of its respective personnel. IBM reserves the right to determine the assignment of its personnel. IBM may subcontract portions of the Services to Subcontractors and Affiliates selected by IBM. No Agency This Agreement does not create an agency, joint venture, or partnership between the parties. Assignment Neither party may assign this Agreement, in whole or in part, without the prior written consent of the other. Any attempt to do so is void. Neither party will unreasonably withhold such consent. The assignment of this Agreement, in whole or in part, to any Affiliates in the United States or to a successor organization by merger or acquisition does not require the consent of the other. IBM is also permitted to assign its rights to payments under this Agreement without obtaining Customer's consent. It is not considered an assignment for IBM to divest a portion of its business in a manner that similarly affects all of its customers. No Resale Customer shall not resell the Services, in whole or in part. This does not prevent Customer from making their Content available to Customer's end users. Risk of Loss Risk of loss for all Base Components shall at all times remain with IBM. Risk of loss for all Customer Components shall at all times remain with Customer. Force Majeure Except for payment obligations hereunder, neither party is responsible to fulfill its obligations to the extent due to causes beyond its control. Actions Period Neither party will bring a legal action related to this Agreement more than two years after the cause of action accrued. + +Page 9 of 36 + +Waiver + +Source: QUANTUM GROUP INC /FL, 8-K, 1/20/2009 + + + + + +Waiver The failure of one party to insist upon strict adherence to any term of this Agreement on any occasion shall not be considered a waiver, nor shall it deprive that party of the right to insist later on adherence thereto. Any waiver must be in writing and signed by an authorized representative of the waiving party. Freedom of Action Each party is free to enter into similar agreements with others. Limitation of Licenses Each of us grants only the licenses or rights expressly specified herein. No other licenses or rights (including licenses or rights under patents) are granted, either directly, by implication, estoppel, or otherwise. Materials For Materials that IBM delivers to Customer that are created during the performance of Services or otherwise (such as those that preexist the Services), IBM or third parties have all right, title, and interest (including ownership of copyright). IBM will deliver one copy of the Materials to Customer. IBM grants Customer an irrevocable, nonexclusive, worldwide, paid-up license to use, execute, reproduce, display, and perform copies of such Materials and distribute within Customer's Affiliates only. Customer agrees to reproduce the copyright notice and any other legend of ownership on any copies made. Business Contact Information Customer agrees to allow IBM and its Affiliates to store and use Customer's business contact information, including names, business phone numbers, and business e-mail addresses, anywhere they do business. Such information will be processed and used in connection with our business relationship, and may be provided to contractors acting on IBM's behalf, IBM business partners who promote, market, and support certain IBM products and services, and assignees of IBM and it's Affiliates for uses consistent with our business relationship. Data Protection For personal information processed by IBM on Customer's behalf as part of the Services, IBM will act in accordance with Customer's instructions by following such processing and security obligations as are contained in this Agreement. Customer also confirms that Customer is solely responsible for ensuring that any processing and security obligations comply with applicable data protection laws. Customer's contact information shall not be considered personal information processed on Customer's behalf. Geographic Scope The parties agree that while Services Recipients outside of the United States of America may access the Services, Customer's rights and IBM's obligations arising out of the Agreement are valid only in the United States of America. Notices Any notices required or permitted hereunder will be effective upon receipt and will be personally delivered; mailed via the postal service; sent by reliable overnight courier; or transmitted by confirmed facsimile. Except for notices under Section 11.4, all notices will be in writing and addressed to the applicable party's designated representative at the address specified in this Agreement. Except as to notices permitted or required under Sections 4 or 8, the parties agree that electronic mail messages sent between them using security procedures sufficient to reasonably authenticate them will be deemed writings. In addition, IBM may provide notice under Section 13.2 by a posting to the Web site identified in Section 2.0 (a). + +Page 10 of 36 + +Source: QUANTUM GROUP INC /FL, 8-K, 1/20/2009 + + + + + +___________________________________________________________________________________ In entering into this Agreement, Customer is not relying upon any representation made by or on behalf of IBM that is not specified in the Agreement, including without limitation, the charges to be paid or the results of any of the Services to be provided under this Agreement. By signing below, Customer and IBM agree that this Agreement, including these Base Terms and Attachments, is the complete agreement between the parties relating to this subject matter. Once signed, 1) any reproduction of this Agreement or an Attachment made by reliable means (for example, photocopy or facsimile) is considered an original and 2) all Services ordered under this Agreement are subject to it. + +After signing, please return a copy of this Agreement to the IBM or partner sales representative listed above. + +Page 11 of 36 + +Attachment A - Services + +Source: QUANTUM GROUP INC /FL, 8-K, 1/20/2009 + + + + + +Attachment A - Services 1.0 Description IBM will provide a hosting infrastructure and related services in an e-business Hosting Center as described herein ("Managed Hosting Services"). IBM shall have sole root access (privileged access with authority to perform system-level functions or security administration) for all Base Components, except for partially managed servers ("Partially Managed Servers") specified in Attachment B. IBM's scheduled maintenance hours for the e-business Hosting Center are each Sunday between 3:00 a.m. and 6:00 a.m. local time. Managed Hosting Services may not be available during this time. IBM reserves the right to interrupt Managed Hosting Services to perform emergency maintenance as needed. In any such circumstances, IBM will use commercially reasonable measures to notify Customer. Scheduled maintenance hours may change upon notice. 2.0 Base Component Software IBM will provide the following Base Component software: Base Component software selected by IBM for server monitoring and management; Base Component software selected by IBM for antivirus scanning of Windows 2003 servers; Base Component software selected by IBM to enable backup and restoration Services; and Base Component software specified in Attachment B. Upon expiration or termination of this Attachment, Customer will certify in writing to IBM that all use of software Base Components by Customer has ceased and that Customer has retained no copy of such software. 3.0 Customer Components Customer will provide Customer Components identified in Attachment B, subject to the following provisions: the provision for and expense of installation and maintenance for Customer Components is the responsibility of Customer. Upon Customer's request, IBM will schedule maintenance, notify Customer of the schedule, provide access to the e-business Hosting Center for Customer's authorized maintenance vendors as required, and escort authorized maintenance personnel while on premises at an e- business Hosting Center; Customer is responsible for obtaining and maintaining personal property insurance sufficient to cover the value of Customer Components; Customer is responsible for any shipping or temporary storage costs incurred during the delivery of Customer Components to the e- business Hosting Center or removal of Customer Components from the e-business Hosting Center, unless otherwise expressly set forth in an Attachment; Customer is responsible for authorizing its Content Administrators to access and modify Content by providing User Identifications to such Content Administrators and for the control and distribution of User Identifications and any misuse of such User Identifications; and on or before five (5) days following expiration or termination of this Attachment, Customer will erase Customer Components from any servers and disk space that IBM provides as Base Components. On or before fifteen (15) days following expiration or termination of this Attachment, Customer will remove all Customer Components and any other Customer property from the e-business Hosting Center (excluding any Base Components and other IBM property). If Customer does not remove or erase Customer Components and its other property within such periods, IBM has the option to: move any and all Customer Components and other Customer property to storage and charge Customer all associated costs; liquidate Customer Components and other Customer property in any reasonable manner and charge Customer all associated costs; and erase all Customer Components from servers and disk space that IBM provides as Base Components. 4.0 Services Provided by IBM IP Address Services IBM will provide the number of registered primary IP addresses specified in Attachment B. + +Page 12 of 36 + +Transition Management + +Source: QUANTUM GROUP INC /FL, 8-K, 1/20/2009 + + + + + +Transition Management IBM will assign a transition manager to manage and oversee the installation and integration of Base and/or Customer Components specified in Attachment B and prepare for ongoing operation. The project manager will: participate in a pre-boarding call with Customer to review Customer's hosting environment and identify information needed for installation; report installation status to Customer; schedule and conduct a boarding call with Customer to confirm that installation of Customer's hosting environment is complete and that it is ready for use (Hosting Service Ready Date); and be available to assist Customer with questions and issues during normal business hours for the e-business Hosting Center (Monday through Friday, 8:00 a.m. - 6:00 p.m., excluding national holidays). Steady State Support IBM will assign a project manager who will be a single point of contact during the ongoing provision of Services to assist Customer with implementation of additional Services and resolution of problems. The account support representative will: notify Customer of planned or emergency e-business Hosting Center maintenance; assist with change requests; and be available to assist Customer with questions and issues during normal business hours for the e-business Hosting Center (Monday through Friday, 8:00 a.m. - 6:00 p.m., excluding national holidays). Management Segment IBM will provide a local area network connection that will enable IBM to manage Base and/or Customer Components and provide other Services at the e-business Hosting Center. IBM will implement a VLAN and any routing and switching configuration within the IBM hosting infrastructure that is needed to support a management segment. 4.4.1 Backup Segment IBM will provide a Gigabit local area network connection that will enable IBM to manage the backup of the System Images and will also provide a SAN connection to manage the backup of Customer data. IBM will implement a Backup VLAN and any routing and switching configuration within the IBM hosting infrastructure that is needed to support a backup segment. Internet Connectivity IBM will provide a primary connection between the e-business Hosting Center and the Internet with Internet Committed Bandwidth in increments of one (1) Mbps as selected by Customer and specified in Attachment B. Customer will provision and manage all SSL certificates. IBM will assign private IP addresses for Customer's servers at the e-business Hosting Center. Customer is responsible for working with IBM during the technical discovery phase to ensure that these IP addresses do not pose any conflicts with Customer's existing IP addressing schema. During the term IBM shall not change the public IP address(s) assigned to the Customer without the Customer's prior written consent. Customer's data traffic between the IBM e-business Hosting Center and the Internet may exceed Committed Bandwidth, if capacity is available from the IBM e-business Hosting Center network infrastructure. Each calendar month, IBM will measure Customer's actual bandwidth usage by sampling the inbound and outbound data traffic volume between the IBM e-business Hosting Center and the Internet every five (5) minutes. At the end of the month, IBM will discard the five percent (5%) of the samples with the highest data traffic volume. Customer's "Peak Bandwidth Usage" for that month is the remaining sample with the highest data traffic volume. If Customer's Peak Bandwidth Usage for the month exceeds Committed Bandwidth, Customer will incur a Peak Bandwidth Usage charge, for the amount of usage that exceeds Committed Bandwidth, at the rate specified in Attachment C. In addition, IBM will provide access to bandwidth utilization reports through a Customer accessible web portal. + +Page 13 of 36 + +Managed Switch, Firewall and Load Balancing + +Source: QUANTUM GROUP INC /FL, 8-K, 1/20/2009 + + + + + +Managed Switch, Firewall and Load Balancing IBM will provide the installation and ongoing management of switch, firewall and Load balancing components specified in Attachment B. IBM will: Install the switch and firewall components defined in Attachment B, implement switch and firewall settings requested by Customer, and test one (1) path to each Network Interface Card (including secondary) in each component; Operate and provide support for all switch and firewall components requested in the Attachment B and monitor their availability 7x24 every day of the year; Provide on-call technical support 7x24 every day of the year for switch and firewall components that may include: Assistance with problem determination; Reboot/power-on of failed switch and firewall components and provide Customer notification; and Implementation of changes to switch and firewall settings requested by Customer. Back up of Customer-requested switch and firewall settings and the restoration of settings in the event of a failure; Provide Customer daily status of firewalls via a Customer accessible IBM web portal; Provide Customer daily status of their network via the Customer accessible IBM web portal; IBM will assign private IP addresses in the range of 10.200.x.x for the private network for component servers at the Hosting Facility. Customer is responsible for working with IBM during the technical due diligence period to ensure that these IP addresses do not pose any conflicts with Customer's existing IP addressing schema; In case of a conflict, Customer will provide network address translation (NATing) for the IP addresses in conflict; and The IPSec tunnels for the VPNs will be based on IPSEC 3-DES technology. Support the following load balancing techniques. The actual technique to be used for Customer will be determined during implementation and documented in the operations run book maintained by IBM. Round Robin (default load balancing technique) Connections are distributed evenly across all members in the pool. Ratio Member - Connections are sent to a member with a high ratio number more often than a member with a lower ratio number. Node Address - The total number of connections sent to a member in the pool is determined by the weight number you assign the node address. Least Connections Member - Connections are sent to the member with the least active connections. Node Address - Connections are sent to the node serving the least amount of connections. Observed 10. Member - Connections are sent to a member based on a combination of the number of current connections and the response time of the member. The Load Balancer analyzes the performance of the member over time and sends connections to the member based on the trend. 11. Node Address - Connections are sent to a node based on a combination of thenumber of current connections and the response time of the node. The Load Balancer analyzes the performance of the nodes over time and sends connections to the node based on the trend. 12. Predictive 13. Member - Connections are sent to a member based on a combination of the number of current connections and the response time of the member over time. 14. Node Address - Connections are sent to a node based on a combination of the number of current connections and the response time of the node over time. 15. Fastest Node Address - Connections are sent to the node that responds most quickly. + +Page 14 of 36 + +Security Management + +Source: QUANTUM GROUP INC /FL, 8-K, 1/20/2009 + + + + + +Security Management The security management specified in this section are included as part of the switch & firewall Services specified above. IBM will: be responsible for day-to-day logical security management for the firewall(s), switches and servers dedicated to Customer's e-business Hosting Environment; assist in logically connecting (at OSI Layer 3) Customer networks to the IBM managed networks only when the connection is specifically identified and agreed to in advance by both parties in writing; implement and administer technical and procedural controls to prevent unauthorized, logical access; report incidents of security breach or suspected security breach to Customer; replace software vendor-supplied default password settings with unique secure passwords; implement network intrusion detection/event logging mechanisms; host based intrusion for an additional fee, if requested by Customer; perform regular vulnerability scans of installed Base Component software for: known/reported component vulnerabilities available security patches/fixes; includes firewall and all IP enabled devices in the network both inside as well as outside the firewall; scan external connections to the customer's environment; scan the internal connections to the customer's servers; scan the connection to the Supplier management and backup segments; update list of common vulnerability signatures weekly; update list of security patches by device and OS weekly; perform weekly scans of all IP enabled devices; 10. post weekly exception reports to the customer accessible web portal; 11. recommend corrective action; 12. notify Customer of all critical vulnerability discovered during the scan; 13. notify Customer of all repeat vulnerability that have not been corrected or acknowledged by the Customer; 14. Outages caused by Customer not approving Supplier recommended vulnerability fixes will not be eligible for SLAs. 15. Known/reported component vulnerabilities; and 16. Install available security patches/fixes at the earliest opportunity afforded by the change control process; install available security patches/fixes using the change control process, as approved by the Customer in writing; establish rules for password selection and control, for example: passwords must be robust and not incremental, easily discerned, and changed on regular intervals such as 90 days; user ids / passwords should be disabled after a predefined number of unsuccessful access attempts or after a period of prolonged inactivity; if supported by the operating system/applications, the software should enforce password syntax and change interval; define and implement clear procedures for detecting, recording and reporting security incidents and issues. Fully Managed Servers IBM will provide installation and ongoing management of server Base and/or Customer Components specified (as Fully Managed Servers) in Attachment B, 24x7 everyday of the year. Following installation and prior to IBM beginning ongoing management, Customer may request root access for a limited period of time, solely for the purpose of loading and configuring Customer Content. It is required that the Customer + +Page 15 of 36 + +Source: QUANTUM GROUP INC /FL, 8-K, 1/20/2009 + + + + + +will not modify or change any of the administrative areas (for example, UNIX /, /etc, /bin, /usr/sbin, or /var) without written consent from IBM. IBM will not begin ongoing server management until Customer returns sole root access to IBM and IBM verifies that the environment is stable and supportable. IBM will: Install the Managed Servers requested in a Attachment B including infrastructure related software object modules consisting of a predefined combination of operating system, applicable fixes, selected security / virus patches for Windows based systems, management tools and agents; Test network connectivity paths to server components requested in a Attachment B; Perform the operations events and predefined actions for Managed Servers requested in a Attachment B; Provide technical support, including problem determination, for the device hardware and OS. IBM will install agents to monitor and report on only the following: Network Interface Up/Down Physical Memory Utilization Processor Utilization - Overall Disk Space Utilization OS services and/or daemons Provide routine Server Administration for the Managed Servers requested in the applicable Attachment A; Perform one (1) weekly full and six (6) daily incremental backups of System Images during the Scheduled Maintenance window unless otherwise set forth in the applicable Attachment A. The System Images will capture the information necessary to be able to perform a successful single step bare metal restore. Provide retention in the IBM library for weekly full backup of System Images for a period of fourteen (14) calendar days unless otherwise set forth in the applicable Attachment B; Restore System Images at no additional charge up to two (2) times per month per Managed Server per Customer. This excludes bare metal restores. Bare metal restores may be performed for an additional charge using SmartHands rates. Provide offsite storage for weekly backup of System Images. Such backups shall be sent offsite once a week and be retained offsite for a period of twenty-eight (28) calendar days unless otherwise set forth in the applicable Attachment B; Provide daily status of the state of the Customer environment using a Customer accessible IBM web portal; Provide details and a monthly summary of the thresholds being monitored using a Customer accessible IBM web portal; Provide details and a monthly summary of the utilization of Managed Server components such as CPU, memory and disk. Reports will be provided using the Customer accessible IBM web portal; Provide details of trouble tickets and their status and action taken to resolve the trouble ticket using a Customer accessible IBM web portal; Identify maintenance releases for supported O/S technologies outlined in Attachment D (Supported Technologies) and provide assessment and notification to Customer; Apply OS maintenance releases that are approved by IBM; Identify security patches/hotfixes for supported O/S technologies outlined in Attachment D (Supported Technologies) and, for critical patches, provide assessment and notification to Customer and the IBM PE and IBM PM within seventy-two (72) hours of release from vendor; Apply patches to the OS that are approved by IBM or Customer; and Provide device availability statistics for Managed Servers using a Customer accessible IBM web portal. In addition, the following will apply for Managed Servers: When IBM owns administrative rights, then following installation and prior to IBM beginning ongoing management, Customer may request root access for a limited period of time, solely for the purpose of loading and configuring Customer Content. It is required that the Customer will not modify or change any of the administrative rights (e.g. Linux /, /etc, /bin, /usr/sbin, /var, etc; Microsoft Local Administrator Accounts/Groups, user right assignments, System File/Directory permissions, etc) without written + +Page 16 of 36 + +Source: QUANTUM GROUP INC /FL, 8-K, 1/20/2009 + + + + + +consent from IBM. IBM will not begin ongoing server management until Customer returns sole root access to IBM and IBM verifies that the environment is stable and supportable. When IBM owns administrative rights, Customer may request temporary administrative rights in writing during ongoing management. It is required that the Customer will not modify or change any of the administrative rights (e.g. Linux /, /etc, /bin, /usr/sbin, /var, etc; Microsoft Local Administrator Accounts/Groups, user right assignments, System File/Directory permissions, etc) without written consent from IBM. During this period the SLA will be suspended. If Customer chooses to own administrative rights, SLAs for those Managed Servers will be suspended for the term of the Attachment B. IBM may request temporary administrative rights to deploy patches and other administrative tasks. Although there are no limitations on the number of change requests, the number of emergency requests will be limited to three (3) requests per month, per Customer at no additional charge. Additional requests shall be at the SmartHands rate. Customer must test their applications and approve the IBM applying maintenance releases for their OS such that the environment is always within two maintenance releases. All SLAs will be suspended and service will be provided on a best effort basis for any environment that does not comply with this requirement. IBM will support the current release ("N") and the release immediately preceding the current release ("N-1") of the operating system software. IBM and IBM will work jointly to determine when operating system and micro code upgrades and fixes are applied. IBM will not: Setup and maintain Customer end users; Install, maintain or support Customer applications; Provide application troubleshooting services unless Managed Application Service or T&M services have been purchased; Perform logical database administration; and Perform backups of Customer Content. Such backups are provided as part of the Storage Services as outlined in this Attachment A. Monitoring of Fully Managed Servers IBM will install software components to enable monitoring of the Base and/or Customer Components specified in Attachment B. On a 24x7 everyday of the year basis, IBM will: monitor all Network Interface Cards (NIC); monitor selected operating system thresholds, logs and processes; respond to exceptions and alerts. IBM will execute any internal Standard Operating Procedures (SOP) or a reasonable SOP provided by Customer. Additionally, IBM will make the initial determination as to whether the issue falls within the operational/system/network area or is an application issue; determine if there are patches available for the OS; apply patches to the OS that are approved by IBM in writing; Make the initial determination as to whether the issue falls within the Operational/System/Network area; Immediately notify the Customer of Severity 1 and 2 incidents; monitor for hardware predictive failure analysis alerts when using IBM servers; and notify Customer in writing when Customer intervention or decisions are required. Customer may request, in writing, the granting of temporary administrative rights after the Customer environment has been turned over to IBM for monitoring. IBM will not monitor the affected components while Customer has administrative rights and any SLA provisions will be suspended during this period. IBM will provide Customer with information on the web portal that show monitoring statistics that include daily and historical information (maintained for a one (1) month period). These reports will include the utilization of the components included in the threshold monitoring, such as CPU, memory and disk. Monitoring of the Base and/or Customer Components with associated alerts will not be activated from IBM's production monitoring systems until the Customer Production Ready Date. Customer shall not be + +Page 17 of 36 + +Source: QUANTUM GROUP INC /FL, 8-K, 1/20/2009 + + + + + +eligible for an Availability Credit until the first full calendar month following the Customer Production Ready Date. Basic Monitoring Services (Ping Monitoring) IBM will provide basic Ping monitoring of the Base and/or Customer Components on a 24x7 everyday of the year basis. IBM will provide installation and ongoing monitoring for server and non-server partially managed, monitored Base and/or Customer Components. Customer will own administrative rights for the devices to be monitored. However, IBM may request and will be granted temporary administrative rights in order to install, setup, or maintain any agents required to perform the monitoring. IBM reserves the right to adjust the thresholds for any monitored event in order to reduce the instances of false positives. Customer will be notified in of the change. IBM reserves the right to take a basic monitored server offline if it is deemed by IBM to be a security risk for the rest of the IBM environment. IBM will inform the Customer, the IBM PE and the IBM PM of such action. IBM will: Monitor all network interface cards (NIC); Request the temporary root access privilege from Customer if required Provide Customer with a user ID and password to a secure portal for viewing of real-time monitoring status and alert history; Send an administrative alert via electronic mail to a customer-supplied address if a NIC fails to respond to a Ping; Notify Customer in writing when Customer intervention or decisions are required. Maintain and monitor systems used to provide monitoring; Test and apply patches to monitoring systems as needed; and Provide monitoring statistics on the IBM Web portal. IBM will not: Respond to exceptions and alerts; Monitor any hardware, application, database, network, or operating system components other than those specified above; Provide third-party monitoring agents; and Provide any reporting either in hard-copy or electronic form other than what is available through the Customer portal. Monitoring of the Base and/or Customer Components with associated alerts will not be activated from IBM's production monitoring systems until the Customer's Customer Production Ready Date. Customer shall not be eligible for an Availability Credit until the first full calendar month following the Customer Production Ready Date. In addition, the following will apply for Basic Monitoring Services: Following the initial installation, Customer will be given root access to the Base Components; IBM will provide space, power and cooling for the Base and/or Customer Components; IBM will include up to five (5) Operational Events per month; Customer Content backup is not included in the base offering and can be provided at an additional cost; Customer System Image backup is not included in the base offering and can be provided at an additional cost; System Administration is not included in the base offering; Patch management is not included in the base offering; The status of all server Base and/or Customer Components based solely on the ping monitoring of the network interface cards will be shown on the web portal and the customer will also be notified; and IBM will issue the ping command for each server base component at least every fifteen (15) minutes. Advanced Monitoring Services IBM will provide 24x7 advanced device monitoring of the server and non-server Base and/or Customer Components. Customer will own administrative rights for the devices to be monitored. However, IBM may request and will be granted temporary administrative rights in order to install, setup, or maintain native SNMP agents as required to perform the monitoring. IBM reserves the right to adjust the thresholds for any monitored event in order to reduce the instances of false positives. Customer will be notified in of the change. + +Page 18 of 36 + +Source: QUANTUM GROUP INC /FL, 8-K, 1/20/2009 + + + + + +IBM will: Monitor all network interface cards (NIC); Monitor the following operating system metrics: CPU utilization; Memory and Swap utilization; Disk and filesystem utilization; Monitor for hardware predictive failure analysis alerts when using IBM servers; Define and set thresholds for all monitored events based on industry standard best practices; Provide Customer with a user ID and password to a secure portal for viewing of real-time monitoring status and alert history; Send an administrative alert via electronic mail to a customer-supplied address for all events that exceed the maximum allowable threshold; Notify Customer in writing when Customer intervention or decisions are required. Maintain and monitor systems used to provide monitoring; Test and apply patches to monitoring systems as needed IBM will not: Respond to exceptions and alerts; Monitor any application, database, network, or operating system components other than those specified above; Provide third-party monitoring agents; Provide any reporting either in hard-copy or electronic form other than what is available through the Customer portal. IBM will provide Customer with information on the IBM Web portal that show monitoring statistics that include daily and historical information (maintained for additional one (1) month period). These reports will include the utilization of the components included in the threshold monitoring, such as CPU, Memory and Disk. This historical information may optionally, for an additional fee, include one year of history. The reports for iSeries may be different from those available for other platforms. Monitoring of the Base and/or Customer Components with associated alerts will not be activated from IBM's production monitoring systems until the Customer's Customer Production Ready Date. Customer shall not be eligible for an Availability Credit until the first full calendar month following the Customer Production Ready Date. Virtual Servers for Microsoft Windows and Linux OS Customer environment can consist of virtual as well as physical devices. For Virtual Servers, IBM will provide the following Services: Services defined under Managed Servers in Section 4.8 (Fully Managed Servers; Physical servers needed to operate a virtual server farm; All licenses for virtualization software and management tools (e.g. VMware ESX3.0; VMotion and others as needed); Capacity management for the physical server farm to ensure each virtual server has resources required for operation as specified in Attachment B; Restart virtual machine in the event of a virtual or physical machine failure; and Include twenty (20) GB of virtual disk for OS and application code for each Virtual Server. Storage Services - Managed SAN Fabric IBM will provide installation, configuration, ongoing system administration and management support services for the SAN Fabric Base and/or Customer Components ("SAN Fabric") identified in Attachment B at the e-business Hosting Center. IBM will zone the SAN switches as necessary for security. IBM retains sole root/administrative access (privileged access with authority to perform system-level functions or security administration) in order to perform installation and ongoing management services for the SAN Fabric. The following items apply to the SAN Fabric: + +Page 19 of 36 + +Source: QUANTUM GROUP INC /FL, 8-K, 1/20/2009 + + + + + +The managed servers will be connected to the SAN Storage via multiple connections to the SAN switches using two or more HBAs for redundancy in each server, as described for each server in Attachment B. The storage backup media server will be connected to the SAN Storage via redundant connections to the SAN switches using two or more HBAs in each server. In the event that additional SAN switches are required, Customer will sign a new PCR for the additional SAN switches. Managed SAN Storage - "Shared" Environment IBM will provide installation and ongoing system administration and management support services for the shared SAN storage device components specified in Attachment B. Disk space will be allocated by IBM based upon Customer provided specifications from a common pool of SAN storage. SAN switches with zoning dedicated to a Customer and dedicated LUNs will be used to securely implement individual data storage requirements. Managed SAN storage applies only to Customer data storage and excludes System Images. Customer will be responsible for populating the files and databases and for all Customer Content. IBM retains sole root/administrative access (privileged access with authority to perform system-level functions or security administration) in order to perform installation and ongoing management services for SAN storage. The following items apply to the SAN storage shared environment: managed servers will be connected to the SAN storage via redundant connections to different SAN switches using two (2) or more HBAs in each server; the storage backup media server will be connected to the SAN Storage via redundant connections to the SAN switches using two or more HBAs in each server; and if additional SAN Storage capacity is required, Customer will sign a project change request for additional SAN capacity. + +Virtual Private Network IBM will configure and manage the number of VPNs identified in Attachment B. The VPNs will consist of an IPSec tunnel based on 3- DES Shaw technology in the firewall at the e-business Hosting Center. IBM will configure and manage the VPN tunnel at the e-business Hosting Center. Customer will configure and manage a corresponding IPSec tunnel based on 3-DES Shaw technology at Customer's location. The IPSec connection will be from specified devices at Customer's site to specified devices at the e-business Hosting Center as defined by Customer. Physical Database Administration (Microsoft SQL) IBM will provide physical and operational database administration support for Micorsoft SQL, database software ("Database Software") for the number of Base Component database servers with the Database Software specified in Attachment B ("Database Administration Servers"). Customer will provide all Database Software, and any required licenses, as a Customer Component. IBM will install Database Software on the Database Administration Servers. IBM will provide four (4) hours of database setup support for each of the Database Administration Servers. Each month IBM will provide four (4) hours of database administration support for each of the Database Administration Servers. Additional hourly database administration and setup support charges will be at the additional hourly support rate specified in Attachment C, unless otherwise specified in a project change request between Customer and IBM. IBM will not provide Physical or Logical data base administration for MySQL. Customer Care IBM will provide a toll free number (inside the US) to receive problem notifications and service requests 7x24 each day of the year from authorized Customer representatives regarding Services provided under this Agreement. Customer representatives shall be identified via email to the IBM project manager. Changes or additions to the Customer representatives will also be made to the IBM project manager via email. + +Page 20 of 36 + +Source: QUANTUM GROUP INC /FL, 8-K, 1/20/2009 + + + + + +IBM will assign the following priority levels to each reported problem as listed in the table below: Severity 1 - Critical impact problem that makes the Customer environment unavailable or degraded to a level where Customer is unable to conduct business. Severity 2 - Major Impact. Customer is able to conduct business but a function or service is not available. Severity 3 - Minor impact. The Customer environment is not seriously affected. Severity 4 - No impact. Short coming, dissatisfaction, or question. Emergency - Ability to conduct business is not being affected, however due to other business driving decisions, the request needs to be treated as a Severity 1. IBM will: attempt to resolve on the first call service requests such as password resets for administrative ID's, access control for authorized Customer representatives following the mutually agreed process and starting and stopping of services. document Customer or IBM internally generated call identification data in their Customer Care (Technical Support) System. provide monthly reports showing service request, resolution, call aging data, and other call report information within ten (10) business days from the end of the calendar month. The reports will be provided via the web portal. direct Customer calls, as appropriate, to an IBM technical specialist, coordinate problem determination, attempt resolution, perform root cause analysis, make ticket history available via the web portal and log and track calls to closure. + +Page 21 of 36 + +Source: QUANTUM GROUP INC /FL, 8-K, 1/20/2009 + + + + + +will assign the following priority levels and respond to each reported problem as shown in the following table: Severity Initial Communication Recurring Communication Communication Content 1 - Critical Impact IBM provides notification within 15 minutes of a confirmed outage. + +IBM support is available 24 x 7 for the duration of the outage. On-site support at IBM Hosting facility within four (4) hours when IBM on-site support is requested by Customer. + +· Current Status · Estimated Resolution Time · Next Activity Planned + +2 - Major Impact IBM provides notification within 30 minutes of a confirmed outage. + +IBM support is available 24 x 7 for the duration of the outage. · Current Status · Estimated Resolution Time · Next Activity Planned 3 - Minor Impact IBM provides notification within 1 hour of a confirmed outage. + +IBM support is available 24 x 7 for the duration of the outage. · Current Status · Estimated Resolution Time · Next Activity Planned 4 - No Impact or a Question IBM provides notification within 24 hours. IBM support is available 24 x 7 for the duration of the outage. · Current Status · Estimated Resolution Time · Next Activity Planned Emergency IBM provides notification within 15 minutes of a confirmed outage + +IBM support is available 24 x 7 for the duration of the outage. Each Customer is only allowed three (3) emergency requests per month. + +· Current Status · Estimated Resolution Time · Next Activity Planned + +Customer is allowed up to three (3) emergency requests per month at no additional charge. Additional emergency requests will be charged at the additional hourly support rate specified in Attachment C. Relocation of Managed Hosting Services In the event that IBM determines that it is necessary to relocate Managed Hosting Services within the same or to another e-business Hosting Center, Customer will cooperate in good faith with IBM to facilitate such relocation, provided that such relocation is based on reasonable business needs of IBM (including the needs of other IBM customers), or the expansion of the space requirements of Customer. IBM will use commercially reasonable efforts, in cooperation with Customer, to minimize any interruption to Services in the event of such relocation. Security Obligations IBM will: implement firewall settings and other security parameters as defined by Customer and accepted by IBM; administer firewalls specified in Attachment B; perform nightly memory and file system anti-virus scanning and install virus signature definition file updates, as available, for Base Components and Customer Components with Windows operating systems; perform regular scanning of commonly used TCP and UDP ports, on Base and/or Customer Components to attempt to detect ports and services that may be vulnerable to intrusion. IBM will + +Page 22 of 36 + +Source: QUANTUM GROUP INC /FL, 8-K, 1/20/2009 + + + + + +use reasonable efforts to inform Customer of intrusion vulnerabilities detected, and schedule and apply changes to security settings agreed to by Customer to attempt to mitigate vulnerabilities. IBM makes no representation or warranty that IBM's monitoring or analysis procedures will identify all intrusions Customer may encounter; perform monthly security parameter status checking and identify when security checking finds parameter status to be different from what was originally established; and authorize root access, administrator access or their equivalents for Base Components to IBM-designated personnel only. Customer must comply and ensure any Customer Subcontractors comply with the following security obligations. Customer will: authorize IBM to perform the Services described above in item a. of Security Obligations; provide firewall setting requirements (ports, filters, and traffic direction) to IBM and provide the number of nodes required for IBM to perform firewall administration; provide IBM with security parameters and settings. Security parameters and settings will be used for monthly security status checking and are subject to IBM's review and acceptance; not access or attempt to access IBM's secure internal network or the resources or information of other IBM customers; when performing any technical security integrity review, penetration test, or vulnerability scan of Base Components or Customer Components: (a) only test, scan or review the IP addresses supplied by IBM to Customer that are part of the Services; (b) only test, scan, or review Customer dedicated Base Components and Customer Components; (c) provide IBM at least one week's prior written notice of the date and time of the review; (d) provide the source IP address information and reviewer contact information to IBM; (e) not perform such reviews more than once per calendar quarter; and not perform or simulate denial-of-service attacks; not administer or create privileged User IDs (User IDs having system or security administrative authority) at the base operating system level or on subsystems managed by IBM; and not disclose any information arising out of IBM or Customer scanning of Base Components or Customer Components to any other entity without IBM's prior written consent. IBM strongly recommends that Customer and any Customer Subcontractors comply with the security guidelines listed below, but Customer may deviate from such guidelines after prior written notice to IBM. IBM will have no liability for any damages arising out of Customer's or Customer's Subcontractors' deviation from any or all of the following guidelines: not use Base Components or Customer Components as a relay to provide Internet access at Customer locations; initiate connections from Base Components or Customer Components to Customer Premises Equipment using either caller ID or Challenge Handshake Authentication Protocol (CHAP); only initiate traffic flows from more secure to less secure networks (i.e., from the Customer secure network to the e-business hosting environment ); access Servers in the e-business Hosting Environment from Customer's premises by establishing a one way trust relationship with password when using Windows; not initiate NFS traffic through the Internet access firewall; only use NFS within a single layer, meaning NFS traffic will not cross firewalls and the Servers will be in the same VLAN; not place NFS export files in the same file structure used for system files and executable files in Customer Components; when creating CGI programs, such programs will: (a) validate input to construct a command line. The input character string will have to be validated to ensure that it does not trigger an undesirable system response including the ability to change file permissions; (b) do not run in privileged mode; + +Page 23 of 36 + +Source: QUANTUM GROUP INC /FL, 8-K, 1/20/2009 + + + + + +(c) do not create files in any system-related directory; (d) do not need to be stored in any directory other than a designated cgi-bin directory or require the interpreter be stored in the cgi-bin directory; and (e) do not create buffer overflow conditions or other problems that could expose the Server to unauthorized access; not initiate inbound ICMP echo requests or replies from the Internet to the Base Components or Customer Components and outbound ICMP echo replies or ICMP replies for traceroute from the Base Components or Customer Components to the Internet unless Customer provides IBM with source IP addresses; and 10. not initiate SNMP traffic from Customer premises to the e-business Hosting Environment. Technical Due Diligence Period A two (2) week technical due diligence period commencing within two (2) weeks following the execution of this Agreement is required. During this technical due diligence period Customer and IBM technical teams will work together and determine more specific detail regarding configuration, networking, firewall, server, SAN, backup and monitoring installation, configuration and management details, settings, rules, and the schedules and thresholds to be monitored. Any changes as a result of the technical due diligence period will be handled as follows: Any delays in the procurement of equipment will be documented in the project plan by the IBM project manager and communicated to Customer in a timely manner. Any delays in the schedule will be documented in the project plan by the IBM project manager and communicated to Customer in a timely manner; and IBM and Customer will use the PCR process to make any changes to this Agreement as a result of this technical due diligence period. Changes may result in adjustments to pricing. Service Level Agreement IBM will provide an availability service level agreement ("Server Availability SLA") for Qualifying Servers based on the applicable SLA Target Percentage (as such terms are defined below). The first device in the path to the Qualifying Server must be an IBM Managed Device, and the Server Availability SLA applies up through and including the last IBM Managed Server. Definitions The following definitions apply to this Server Availability SLA: "Actual Available Minutes (AAM)" means the Total Available Minutes minus minutes of Qualified Outages. Availability Credit" means an amount equal to five percent (5%) of monthly recurring charges for Managed Hosting Services. Such credits are available when the services provided for the affected devices are less than the Monthly Availability Percentage. "IBM Managed Device" means a Base Component located in an IBM e-business Hosting Center for which IBM is performing management responsibilities. For servers, only the servers identified as Fully Managed Servers in Exhibit A are considered an IBM Managed Device. "Monthly Availability Percentage" means the amount equal to the total number of minutes in the applicable month minus the Qualifying Outage Minutes for that month, divided by the total number of minutes in that month. "Monthly Recurring Charge" means the total of Customer's monthly recurring charges. "Outage" means the period (measured in whole minutes) from the time indicated in a trouble ticket (when the Outage was reported to IBM) to the Outage end time based upon the problem resolution (as reflected in the trouble ticket call record). For clustered devices, all of the devices in the cluster must not be available for use by Customer. "Qualifying Server" means the IBM Managed Server that has been selected by Customer and approved by IBM. "Qualifying Outage Minutes" means the aggregate of all Outages in a month, minus any Outages in that month resulting from any exclusion described in Section 8.6 below. "SLA Target Percentage" means the Service Levels defined in 8.2 (Service Levels). "Unqualified Outage(s)" means an Outage(s) that can be attributed to the listed availability exclusions as set forth in Section 8.6 (Exclusions). + +Page 24 of 36 + +Service Levels + +Source: QUANTUM GROUP INC /FL, 8-K, 1/20/2009 + + + + + +Service Levels IBM will provide the following monthly availability Service Level Agreement ("SLA") for the Services provided by IBM: For Managed Devices and Managed Servers (including firewall(s) and switches) that are not clustered or configured in a high availability configuration, the SLA is a minimum of 99.7 percent. For Managed Devices and Managed Servers (including firewall(s) and switches) that are clustered or configured in a high availability configuration, the SLA is a minimum of 99.9 percent. For Managed Application Solution (including firewalls(s) and switches) that are clustered or configured in a high availability configuration, the SLA is a minimum of 98.0 percent. For Managed Application Solution (including firewalls(s) and switches) that is not clustered or configured in a high availability configuration, the SLA is a minimum of 99.5 percent. For Basic Monitoring Services the SLA is a minimum of 99.9 percent applicable only for the core infrastructure components (including power, cooling, Internet connectivity, firewalls, load balancers, SSL acceleration, Network Intrusion Detection, VLAN segments, switches, VPN connection at the Hosting Center, and all related connections). For Advanced Monitoring Services the SLA is a minimum of 99.9 percent applicable only for the core infrastructure components (including power, cooling, Internet connectivity, firewalls, load balancers, SSL acceleration, Network Intrusion Detection, VLAN segments, switches, VPN connection at the Hosting Center, and all related connections). Availability Credits If in any month during the term of Managed Hosting Services the Monthly Availability Percentage for a Qualifying Server is less than the SLA Target Percentage for that Qualifying Server, Customer shall be eligible to receive an Availability Credit, subject to Section 8.3(b), 8.4, 8.5, 8.6 and 8.7. If in any month during the term of Managed Hosting Services the Monthly Availability Percentage for Basic Monitoring or Advanced Monitoring Services is less than the SLA Target Percentage for Basic Monitoring or Advanced Monitoring Services, Customer shall be eligible to receive an Availability Credit, subject to Section 8.3(b), 8.4, 8.5, 8.6 and 8.7. Customer agrees to contact the IBM Help Desk to report problems and open trouble tickets that reflect the start time of the Outage event. Settlement of Credits Availability Credits will be aggregated on a quarterly basis and settled by the last day of the first month following the end of the quarter in which such Availability Credits were earned. (For example, the aggregate Availability Credits earned in the first quarter 2007 will be applied against Monthly Recurring Charge for Services the Customer incurs in the April 2007 invoice.) Any Availability Credits owed from IBM to Customer upon the expiration or termination of the Services will be paid within one (1) month following the effective date of expiration or termination. If the Monthly Recurring Charge for a subject month has not been incurred, or for any other reason has been credited or waived, Customer shall not be eligible for an Availability Credit for that month. Customer shall receive no more than five percent (5%) of Customer's Monthly Recurring Charge for Managed Hosting Services as an Availability Credit in a given month. Commencement of Service Level Agreement IBM will exercise commercially reasonable efforts to meet the SLA Target Percentage. Notwithstanding the foregoing, Customer shall not be eligible for an Availability Credit until the first full calendar month following the Hosting Service Ready Date. Exclusivity of Remedies Customer agrees that its sole remedy for IBM's failure to meet an SLA Target Percentage is the Availability Credit as provided in this Attachment. Exclusions IBM is not responsible for any Outage outside of its control, including but not limited to, the following examples: periods of scheduled or emergency maintenance activities or scheduled Outage; Outage due to problems with Customer provided Content or programming errors including, but not limited to, Content installation and integration; + +Page 25 of 36 + +Source: QUANTUM GROUP INC /FL, 8-K, 1/20/2009 + + + + + +Outage due to system administration, commands, file transfers performed by Customer representatives; Outage due to work performed at Customer request (for example T&M assistance); other activities Customer directs, denial of service attacks, natural disasters, changes resulting from government, political, or other regulatory actions or court orders, strikes or labor disputes, acts of civil disobedience, acts of war, acts against parties (including carriers and IBM's other vendors), and other force majeure items; lack of availability or untimely response time of Customer to respond to incidents that require its participation for source identification and/or resolution, including meeting Customer responsibilities for any prerequisite Services; Outage due to Customer breach of its material obligations under the Base Terms; Outages caused by Customer Content or Customer initiated patches; Outages caused by Customer not approving applying IBM recommended OS patches; Outages caused by the Customer not approving applying of OS maintenance releases; Periods where the Customer may have been granted System Administration rights; Customer denies IBM recommended software patches, hardware and/or OS changes; m. Outage due to failure of non-IBM managed Customer Component hardware or software; Power outages caused by customer not providing dual power equipment; Power outages caused by improperly configured power supplies; Power outages caused by incorrectly connected power supplies; Power outages caused by customer configured and managed equipment that results in over utilization of power circuits; and Customer's performance of any technical security integrity review, penetration test, or vulnerability scan pursuant to security obligations set forth herein. Open Source Software additional terms If requested by Customer, IBM will procure Red Hat Linux Software on behalf of Customer. The Red Hat software will be provided as a Customer Component ("Customer Component Linux Software") licensed by Red Hat, Inc. ("Red Hat") to Customer under Red Hat's Subscription Agreement (accessible at http://www.redhat.com/licenses). Customer agrees to the terms and conditions of Red Hat's Subscription Agreement and agrees that Red Hat's Subscription Agreement for the Customer Component Linux Software shall be between Red Hat and Customer. The Linux operating system Customer Component software will be shipped to Customer, not IBM. IBM is not a party to such license. IBM's provision of Services hereunder shall not constitute a distribution of the Customer Component Linux Software by IBM. If requested by Customer, IBM will install Customer Component Linux Software "as is" and makes no representations or warranties, either express or implied, with respect to the Customer Component Linux Software or any Open Source Software and does not indemnify against any claim that Customer Component Linux Software or any Open Source Software infringes a third party's intellectual property right. Under no circumstances shall IBM be liable for any damages arising out of Customer's use of the Customer Component Linux Software or any Open Source Software. Customer receives no express or implied patent or other license from IBM with respect to the Customer Component Linux Software or any Open Source Software. Customer and IBM agree that any modification or creation of derivative works of Linux or Open Source Software is outside the scope of this Agreement. Linux and any other Open Source Software ("OSS"), including patches, fixes, and updates, which IBM installs, configures, updates, operates or otherwise assists in procuring on Customer's behalf as a result of providing services under this Agreement are licensed and distributed to you by Linux and OSS distributors and/or respective copyright and other right holders, including Red Hat, Inc. ("Right Holders") under the Right Holders' terms and conditions. IBM is neither a party to the Right Holders' terms and conditions nor a distributor of Linux or OSS and merely does the work described in this Agreement on your behalf upon your specification. You receive no express or implied patent or other license from IBM with respect to Linux or any OSS. IBM installs Linux and OSS "as is" and makes no representations or warranties, either express or implied, with respect to Linux or OSS, and does not indemnify against any claim that Linux or OSS infringes a third party's intellectual property right. Under no circumstances shall IBM be liable for any damages arising out of your use of Linux or OSS. + +Page 26 of 36 + +Source: QUANTUM GROUP INC /FL, 8-K, 1/20/2009 + + + + + +Both of us agree that any modification or creation of derivative works of Linux or OSS is outside the scope of this Agreement. Responsibilities of IBM and Customer Overall - (with physical database administration support) + +RESPONSIBILITIES IBM CUSTOMER + +- Installation - + +Designate an individual to whom all of IBM's communications will be addressed and who has the authority to act and make decisions for Customer in all aspects of the Services, including requesting changes, problem resolution, Service requests, assignment of Customer focal points with authority over specific Services, and designation of Customer Authorized Representatives ("Customer Contact") + + Perform + +Designate an individual to whom Customer will address communications specific to the provision of the Services. IBM's call management center may be the IBM Contact for some Services ("IBM Contact") Perform + +Assign authorized representatives with appropriate functional knowledge and technical skill who may submit problems or Service requests to the IBM call management center by calling an IBM-provided toll-free telephone number or by e- mail Perform + +Perform the installation activities specified herein Perform Register domain names with an accredited domain name registrar and pay all charges associated with such registration Perform + +Install Customer applications Perform Perform physical DBA tasks to install and configure the database(s) Perform Perform all logical DBA tasks to install and configure the databases Perform Provide backup and restore requirements to IBM Perform Perform necessary physical database administration tasks to prepare Customer database(s) for backup Perform + +Perform necessary logical database administration tasks to prepare Customer databases for backup Perform + +Provide e-mail addresses for Customer notification of thresholds exceeded or process exceptions Perform + +Procure Base Components specified in Attachment B Perform Notify Customer when IBM installation activities are completed (Hosting Service Ready Date) Perform + +Provision all SSL certificates Perform Inform IBM in writing within five (5) business days following IBM's notification of the completion of IBM installation activities, if Customer believes IBM has not satisfactorily completed IBM installation activities Perform + +- Ongoing Management and Support - + +Provide the ongoing Services specified herein Perform Provide ongoing administration, tailoring, monitoring, or maintenance of Customer applications Perform + +Provide first level of support for problems with Customer Components and transfer problems related to IBM's responsibilities to the IBM call management center Perform + +Assist IBM in the investigation of problems, to the extent such investigation involves Customer's or its Subcontractors' responsibilities, and exercise commercially reasonable efforts to resolve problems related to such responsibilities Perform + +Provide ongoing physical database administration for the database(s) Perform Provide ongoing logical database administration Perform Perform the IBM security obligations specified herein Perform Perform the Customer security obligations specified herein Perform + +Page 27 of 36 + +Source: QUANTUM GROUP INC /FL, 8-K, 1/20/2009 + + + + + +Update Base and/or Customer Components with applicable fixes (patches, hotfixes, program temporary fixes and service packs) as determined by IBM Perform + +Maintain responsibility for all labor and expenses associated with full version operating system software upgrades (to be eligible for continued service, the operating system version running on the managed servers must be one currently supported by the manufacturer of that operating system) Perform + +Maintain copies of critical Content and establish a procedure to recover such Content without resort to the e-business Hosting Environment or Services Perform + +Manage all SSL certificates Perform + +Server + +RESPONSIBILITIES IBM Customer + +- Installation, Configuration and Setup for Fully Managed Servers + +Rack and stack and cable the equipment Perform Procure and install Base Components Perform Provision cabinet space Perform Provision additional power Perform Create network diagram Perform Assign public and private IP addresses Perform Provision internet bandwidth Perform Procure licenses for backup tools and agents Perform Load CDs, if requested by Customer Perform Configure IP addresses on the servers Perform Perform connectivity testing of Base and/or Customer Components Perform Identify the predefined events that will be monitored Perform Configure thresholds defined by Customer Perform Install and configure monitoring tools Perform Install and configure clients for the monitoring tools Perform Perform readiness testing, including testing the flow of alerts Perform Enable switch monitoring Perform Notify Customer when installation activities are completed Perform + +- Ongoing Management and Support for Fully Managed Servers - + +Perform 7 x 24 each day of the year monitoring of the managed servers for actions and events Perform + +Maintain required documentation for server management and operation Perform Research OS patches Perform Provide problem determination and corrective measures and support for alerts and predefined error events and thresholds Perform + +Use reasonable efforts to update Base and/or Customer Components with applicable fixes approved by the Customer Perform + +Load CDs if requested by Customer Perform Call IBM Service if needed Perform Assist IBM in the investigation of problems with the Services to the extent such investigation involves Customer's or its subcontractors' responsibilities Perform + +Monthly reports of thresholds being measured Perform Perform root cause analysis for problems related to the equipment or services being provided by IBM Perform + +Page 28 of 36 + +Source: QUANTUM GROUP INC /FL, 8-K, 1/20/2009 + + + + + +Shared or Dedicated SAN Storage + +RESPONSIBILITIES IBM Customer - Installation, Configuration and Setup - Install SAN configuration and management console and agents on the SAN Storage Perform Provide IBM with disk configuration specifications (folders, directories, quorum disk layout, disk space size, and Raid level) Perform + +Configure Server HBAs for access to the SAN Storage Perform Install the SAN devices Perform Connect the SAN storage device to the SAN switches and to the administration segment Perform + +Define storage partitions Perform Configure the SAN storage per Customer provided specifications Perform Provide documentation which details the installation parameters for the server and SAN storage Base and/or Customer Components Perform + +Document SAN storage configuration Perform Test SAN storage functionality Perform Perform connectivity testing of the SAN storage Perform Perform quality assurance reviews on all operational and administrative support procedures Perform + +Identify the predefined actions and events (the "Actions and Events") IBM will perform on the SAN Storage Perform + +- Ongoing Management and Support - Maintain required documentation for the SAN storage management and operation Perform Perform 7x24 everyday of the year monitoring of the managed SAN storage for actions and events Perform + +Provide problem determination and corrective measure support for actions and events Perform + +Reallocate SAN based LUNS to different systems and servers (for example: rezoning, import, recognition, and file system remount), as requested by Customer. Perform + +Assist IBM in the investigation of problems with the Services to the extent such investigation involves Customer's or its Subcontractors' responsibilities Perform + +Page 29 of 36 + +Backup, Restore and Offsite Data Storage + +Source: QUANTUM GROUP INC /FL, 8-K, 1/20/2009 + + + + + +Backup, Restore and Offsite Data Storage + +RESPONSIBILITIES IBM Customer + +- Installation, Configuration and Setup - + +Install selected Base Components, including external cable connections and storage server Perform + +Connect the tape library to the designated backup media server Perform Document the tape library and backup media server configuration and setup parameters Perform + +Test hardware functionality Perform Notify IBM of any specific procedures required for backup of Customer data files and the scheduled backup window Perform + +Creation and documentation of Customer backup and restore procedures Perform Provide list of files to be backed up Perform Identify and maintain list of Customer designated data files to be backup up Perform Install and configure the storage manager software provided by IBM Perform Verify that the storage manager software is installed and configured properly Perform Install backup software clients Perform Configure backup software clients on OS instances Perform Perform a test backup of the systems by initiating a backup of Customer designated data files Perform + +- Ongoing Management and Support - + +Maintain required documentation for server management and operation Perform Assist IBM in the investigation of problems with the Services to the extent such investigation involves Customer's or its subcontractors' responsibilities Perform + +Perform daily incremental backups Perform Perform weekly full system backups Perform Keep daily backups in the library for seven (7) days backups (actual backup, retention and rotation schedules to be determined by Customer and IBM) Perform + +Create a copy on tape of the weekly full system backup tapes and send offsite for storage with thirty (30) days retention Perform + +Examine backup logs for results of daily backup activity Perform Take actions to alleviate alerts and error messages during the backups Perform Call the IBM Help Desk to request a take to be restored from the library or from offsite storage. Perform + +Indicate if the offsite storage recall is an emergency request to be fulfilled within six (6) hours (additional charges may apply) Perform + +Identify data file name and version requiring restore Perform Initiate obtaining of the tapes(s) from offsite storage, if necessary Perform Initiate restore of Customer designated backed up files as requested Perform Perform root cause analysis for problems Perform + +Page 30 of 36 + +Switch and Firewall + +Source: QUANTUM GROUP INC /FL, 8-K, 1/20/2009 + + + + + +Switch and Firewall + +RESPONSIBILITIES IBM Customer - Installation, Configuration and Setup - Configure the local VLANs Perform Specify switch and firewall settings specific to the application Perform Configure VLANs and zones for the SAN switches Perform Configure firewall settings Perform Test a single path to switch and firewall Base and/or Customer Components Perform Enable switch and firewall monitoring Perform - Ongoing Management and Support - Operate and monitor availability of the switches and firewalls 7x24 each day of the year Perform + +Assist IBM in the investigation of problems with the Services to the extent such investigation involves IBM's, Customer's or its subcontractors' responsibilities Perform + +Request changes to switch and firewall settings Perform Administer changes to switch and firewall Perform Perform monthly patch scanning on servers that may be vulnerable to intrusion or need hot fixes applied Perform + +Inform Customer of hot fixes and vulnerabilities detected and use reasonable efforts to schedule and apply changes to settings, as needed Perform + +Backup Customer-specified switch and firewall settings and restore settings in the event of a failure Perform + +Physical Database Administration (Microsoft SQL) + + IBM Customer + +- Implementation - + +Provide Customer with database survey to gather support requirements Perform Complete database survey Perform Acquisition of license for Database Software Perform Configuration of Database Software in accordance with Customer requirements as provided in the database survey Perform Assist + +Installation and configuration of application software and Content Perform Provide documentation specifying the application directory structure, and/or database structure including table definitions, indices and table spaces Perform + +Establish connectivity between database instance and data server and notify Customer when Database Software is ready for use by Customer Perform + +Create directory structure and/or execute database definitions Perform Enable the application functions, once installed and configured, to work with the Database Software and Customer's hosting environment Assist Perform + +Establish standard database availability monitoring to assess the availability of database components Perform + +Provide documentation for application and database components to be monitored for availability Perform + +Acquire any necessary certificates or keys necessary for authentication functions associated with the Database Software Perform + +Install any certificates or keys provided by Customer necessary for authentication functions associated with the Database Software Perform + +Retain control and management of the Database Software support/administration IDs/object owner IDs Perform + +- Ongoing Management and Support - + +Page 31 of 36 + +Source: QUANTUM GROUP INC /FL, 8-K, 1/20/2009 + + + + + +Provide application software troubleshooting, problem determination, and problem resolution. Note, where the application software is third party software, IBM's responsibility will be limited to coordinating with the applicable vendor and managing such vendors resolution. Perform + +Provide system software troubleshooting, problem determination, and problem resolution Perform + +Assist Customer with Database Software in problem determination of application problems and notify Customer once a problem is suspected to be an application problem Perform Assist + +Provide database troubleshooting and problem determination Perform Contact appropriate IBM support organization for all database related problems after problem has been recorded in the problem management system with key problem- related data by IBM's call management center Perform + +Determine backup/recovery plan Perform Implement backup/recovery plan to allow point in time recovery or version recovery as determined by Customer Perform Assist + +Provide application-level assistance in problem determination of Database Software problems Perform + +Assist Customer in application problem resolution through the implementation of database changes required by Customer Perform Assist + +Apply fixes, PTFs and patches provided by Customer to correct database problems, as necessary, within the framework of the Project Change Control Procedures Perform + +Install Database Software minor release upgrades for an already installed version of each database product using the IBM standard change control procedures ("minor release upgrade" is any change in the release number to the right of the point by the software manufacturer - e.g.: x.y) Perform + +Provide any code promotions for application software code and all Content updates Perform Install application software configuration changes, upgrades and patches, and any updates to Content. Notify IBM of any required database configuration changes needed as a result of the changes, upgrades and patches, and/or updates Perform + +Install system software configuration changes, upgrades and patches, and updates. Perform Implement any required database configuration changes based on Customer's recommendations Perform + +Provide all end user support including administration of application user Ids and groups and end user password resets Perform + +Provide requirements for pruning, rotation and/or archiving of any application and database log files Perform + +Implement any required pruning, rotation and/or archiving of any application and database log files Perform + +Provide documentation for performance related parameter/configuration settings Perform Implement initial database performance tuning and provide additional performance tuning based on analysis of performance metrics provided by Customer Perform Assist + +Provide documentation on performance metrics and performance results that the application and database should be measured against, including any necessary tools and/or scripts to collect performance data Perform + +Implement automated performance monitoring and data collection Perform Assist Monitor Database Software components for availability and/or their presence in memory (up/down status) Perform + +Assist Customer in testing efforts and monitoring of Customer-provided performance tools and metrics to determine if environment is properly tuned Perform Assist + +Collection of performance and capacity data as provided by Customer's application(s) software Assist Perform + +Implement performance enhancements to the specific Database Software based on documented tuning parameters and procedures supplied by Customer and specific to Customer application(s) Perform + +Collection of performance and capacity data as provided by systems software Perform Notify IBM within fifteen (15) minutes of a suspected a Database Software component problem Perform + +Monitoring application health and availability and functional testing of application Perform Establish IBM as single point of contact with Database Software manufacturer Perform Procure and keep current service contracts with the Database Software manufacturer for 24x7 maintenance and support including upgrades and updates/fixes. IBM will be named as a primary contact in the service agreement(s) Perform + +Page 32 of 36 + +Source: QUANTUM GROUP INC /FL, 8-K, 1/20/2009 + + + + + +Provide the appropriate support information for Customer contact and Database Software manufacturer support contact (IDs, contact names, telephone numbers, license numbers, etc.) Perform + +Implementation of any Database Software product major version upgrade ("major version upgrade" is any change in the version number to the left of the point by the software manufacturer - e.g.: x.y) Perform + +Establish single point of contact with application software vendor Perform + +Attachment B - Hosting Components + +Part I - IBM Provided Infrastructure + +e-business Hosting Center: Atlanta + +Internet Bandwidth Internet access committed bandwidth 3 Mbps Number of registered IP addresses 1 + +Virtualized Firewalls Quantity 2 Model Cisco virtualized firewalls Failover Configuration Yes Number IPSEC VPN tunnels to be set up at the IBM data center (Customer to set up and manage the corresponding VPN tunnels at their sites) + +1 + +Virtual Firewalls Switch Ports and VPN tunnels Quantity of pairs of active / passive virtual firewalls 3 + +Virtual firewalls and switch ports for Virtual servers, including firewall ports 1 + +Additional remote clients for VPN sessions 0 Additional site-to-site VPN tunnels 9 Private dedicated backend connection 0 + +Page 33 of 36 + +Part II - IBM- managed Base Components + +Source: QUANTUM GROUP INC /FL, 8-K, 1/20/2009 + + + + + +Part II - IBM- managed Base Components Server Base Components + +e-business Hosting Center: Atlanta + +Fully Managed Server Base Components Server Quantity 2 Model x3650 Processor 2 x Dual-Core Intel Xeon Processor X5260 (3.33GHz 6MB 1333MHz 80W) Memory 8 GB Local Disk drives · 2 x 73 GB Disk for OS Used for OS, not Customer data OS * Linux RedHat AS SAN connections? No NAS connection? No Fully Managed? Yes Administrative rights owned by IBM during steady state? Yes + +Quantity 10 Model x3850 Processor 2 slots, 4x 3 GHz CPUs Memory 8 GB Local Disk drives · 3 x 73 GB 2.5" disk- 2 OS + 1 hot spare OS * Win2003 (Qty 6), Linux RedHat AS (Qty 4). SAN connections? Yes NAS connection? No Fully Managed? Yes Administrative rights owned by IBM during steady state? Yes + +SAN Fabric and SAN Storage Base Components - Shared Environment SAN Fabric Number of servers connected to the SAN 10 Number of SAN switch Ports 20 + +SAN Storage Base Components - Shared environment SAN Storage - Shared Amount of usable space to be allocated, in GB 1600 GB + +Raid Level Raid5 (standard) + +Page 34 of 36 + +Source: QUANTUM GROUP INC /FL, 8-K, 1/20/2009 + + + + + +Part III - Customer Components Customer will provide all Content and all components not specified as IBM provided infrastructure or IBM provided Base Components in Part I or Part II of this Attachment B. + +Page 35 of 36 + +Attachment C - Charges + +Source: QUANTUM GROUP INC /FL, 8-K, 1/20/2009 + + + + + +Attachment C - Charges + +One-time Charges One-time charges for Managed Hosting Services of $81,217.00 will be invoiced in January 2009 and payable in accordance with section 5.2 Payment. Monthly Recurring Charges Monthly recurring charges for Managed Hosting Services of $37,000.00 will begin on the Hosting Service Ready Date and may be prorated based on the date during the month that Managed Hosting Services commence, change, or end. Usage Charges + +Additional hourly support Operational Assistance Per Hour $89.10 SmartHands (systems administrative and technical assistance) Per Hour $188.02 Operational DBA Per Hour; MS SQL $204.37 Charges for additional hourly support requested by Customer, if any, (support that is outside the scope of services included in the monthly recurring charges specified above) will be due as incurred. IBM will charge for additional hourly support in fifteen (15) minute increments. b. Peak Bandwidth Usage Peak Bandwidth Usage charges for data traffic in excess of Committed Bandwidth are due as incurred. IBM will determine Peak Bandwidth Usage charges each month by subtracting the Committed Bandwidth from the Peak Bandwidth Usage for that month and multiplying the difference by the Peak Bandwidth Usage rate of $147.14.00 per Mbps. c. SmartHands hourly support Charges for SmartHands hourly support requested by Customer, if any, will be due as incurred. IBM will charge for SmartHands hourly support in fifteen (15) minute increments. d. Additional Hourly Database Support Charges for additional hourly database support ("Additional Hourly Database Support") requested by Customer, if any, (database support that is outside the scope of database support hours included in the monthly recurring charges) will be due as incurred. IBM will charge for Additional Hourly Database Support in fifteen (15) minute increments. Termination Charges In the event the Customer elects to terminate this Agreement, or any portion of the Services described herein, for convenience, Customer will pay the applicable termination charges as set forth in the table below. 3-year (thirty six (36) month) Term: For termination: For any terminated Services, Customer will be charged: + +prior to first anniversary of the Hosting Service Ready Date four (4) months' applicable recurring monthly charges plusany unpaid One Time Charges from the first anniversary of the Hosting Service Ready Date and prior to the second anniversary of the Hosting Service Ready Date + +three (3) months' applicable recurring monthly charges + +from the second anniversary of the Hosting Service Ready Date and prior to the expiration of this Agreement two (2) month's applicable recurring monthly charges + +Page 36 of 36 + +Source: QUANTUM GROUP INC /FL, 8-K, 1/20/2009 \ No newline at end of file diff --git a/full_contract_txt/REGANHOLDINGCORP_03_31_2008-EX-10-LICENSE AND HOSTING AGREEMENT.txt b/full_contract_txt/REGANHOLDINGCORP_03_31_2008-EX-10-LICENSE AND HOSTING AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..d1dab9c477a729565adecd3f42844240999869f7 --- /dev/null +++ b/full_contract_txt/REGANHOLDINGCORP_03_31_2008-EX-10-LICENSE AND HOSTING AGREEMENT.txt @@ -0,0 +1,379 @@ +Exhibit 10(l) + +LICENSE AND HOSTING AGREEMENT + +THIS LICENSE AND HOSTING AGREEMENT ("Agreement") is made effective as of the 17t h day of October, 2007 ("Effective Date"), by and between Transaction Applications Group, Inc., a Nebraska corporation ("TAG"), and Legacy Marketing Group, Inc., a California corporation ("LMG"). + +BACKGROUND. This Agreement is the License and Hosting described in Section 1.5 of the Asset Purchase Agreement between the parties dated the date hereof (the "Purchase Agreement"). It describes the terms and conditions under which TAG will Use and access the LMG Tools, CSC Software and Other Third Party Software until the date that is six (6) months after transition of the TPA Services for the New Customers from LMG's software and systems to TAG's software and systems. ("Conversion Date") or such other date as is specified in Exhibit A. Capitalized terms used but not defined in this Agreement shall have the meaning given them in the Purchase Agreement. + +NOW, THEREFORE, in consideration of the mutual benefits to be derived and the representations and warranties, conditions and promises herein contained, and intending to be legally bound hereby, LMG and TAG agree as follows: + +ARTICLE I AGREEMENT AND DEFINITIONS + +Agreement. The parties agree that the terms and conditions of this Agreement apply to the provision of LMG Tools, CSC Software, Other Third Party Software and LMG Services to TAG by LMG. + +Certain Definitions. The following definitions apply to this Agreement: + +"Applicable Specifications" means the functional, performance, operational, compatibility, and other specifications or characteristics of the LMG Tools, CSC Software and Other Third Party Software described in the applicable Documentation or necessary for TAG to provide the TPA Services to the New Customers and perform its obligations under the New Customer Contracts. + +"CSC Software" means the computer programs identified in Exhibit A licensed by LMG from Computer Sciences Corporation ("CSC"), including object code (including microcode) and/or where available to LMG source code, that are provided or to be provided by LMG pursuant to this Agreement. The definition of CSC Software also includes any enhancements, translations, modifications, updates, releases, or other changes to CSC Software. + +"Documentation" means user guides, operating manuals, education materials, product descriptions and specifications, technical manuals, supporting materials, and other information relating to the LMG Tools, CSC Software and Other Third Party Software or used in conjunction with the TPA Services, whether distributed in print, magnetic, electronic, or video format. + + + + + +"LMG Tools" means the LMG-developed computer programs identified in Exhibit A, including, where applicable object code (including microcode) and/or source code, that are provided or to be provided by LMG pursuant to this Agreement. The definition of LMG Tools also includes any enhancements, translations, modifications, updates, releases, or other changes to LMG Tools. + +"LMG Services" means the support, hosting and other services, functions and responsibilities provided or to be provided by LMG pursuant to this Agreement. + +"Other Third Party Software" means the computer programs identified in Exhibit A licensed by LMG from third parties other than CSC, including object code (including microcode) and/or where available to LMG source code, that are provided or to be provided by LMG pursuant to this Agreement. The definition of Other Third Party Software also includes any enhancements, translations, modifications, updates, releases, or other changes to Other Third Party Software. + +ARTICLE II LICENSE OF LMG TOOLS + +Grant of License. LMG grants TAG a worldwide, nonexclusive, irrevocable, perpetual license to load, execute, access, employ, use, store, or display ("Use") the object code version of the LMG Tools and Documentation (the "License") for the period specified in Exhibit A in accordance with the terms and conditions of this Agreement. + +TAG may Use the LMG Tools and Documentation solely to provide TPA Services to or for the New Customers and Terminated Customers, and perform its obligations under the Administrative Services and Teaming Agreement, New Customer Contracts and Subcontracts including performing disaster recovery, disaster testing, and backup as TAG deems necessary. + +The License grant includes a license under all current and future patents owned by or licensed to LMG that are applicable to the LMG Tools and Documentation or the provision or receipt of the LMG Services, to the extent necessary to exercise any of the foregoing rights. + +LMG acknowledges and agrees that the New Customers may have access to and Use of the LMG Tools and Documentation under the terms of the New Customer Contracts. + +The License also includes the right to Use the source code version of LMG Tools in accordance with the terms and conditions of Section 3.7. + +Except as specified in this Agreement, the License does not permit TAG to sublicense, rent or allow third parties to Use the LMG Tools or Documentation. + +Proprietary Markings and Duplication. TAG shall not remove or destroy any proprietary markings or proprietary legends placed upon or contained within the LMG Tools or Documentation. TAG may duplicate Documentation, at no additional charge, for TAG's Use or for Use by a TAG in connection with the provision of LMG Tools so long as all required proprietary markings are retained on all duplicated copies. + +2 + + + + + +Ownership of LMG Tools and Modifications. The LMG Tools and Documentation shall be and remain the property of LMG, and TAG shall have no right or interest therein except as set forth in this Agreement. TAG shall be entitled to modify the LMG Tools and Documentation and to develop software derivative of or interfacing with the LMG Tools. All modifications of and software derivative of the LMG Tools and Documentation developed by TAG shall be and remain the property of TAG, and LMG shall have no rights or interests therein. + +Protection of LMG Tools. TAG will treat the LMG Tools and Documentation with the same degree of care and confidentiality that TAG provides for similar information belonging to TAG which TAG does not wish disclosed to the public, but not less than reasonable care. This provision shall not apply to LMG Tools or Documentation, or any portion thereof, which is (a) already known by TAG without an obligation of confidentiality, (b) publicly known or becomes publicly known through no unauthorized act of TAG, (c) rightfully received from a third party without obligation of confidentiality, (d) disclosed without similar restrictions by LMG to a third party, (e) approved by LMG for disclosure, or (f) required to be disclosed pursuant to a requirement of a governmental agency or law so long as TAG provides LMG with timely prior written notice of such requirement. It will not be a violation of this Section 2.4 if TAG provides access to and the Use of the LMG Tools or Documentation to any third party contractor so long as TAG secures execution by such third party contractor of a confidentiality agreement as would normally be required by TAG. + +ARTICLE III SUPPORT AND HOSTING SERVICES + +CSC Software. LMG will maintain, through the Conversion Date, its existing license for the CSC Software and provide TAG access to and an irrevocable "look access only" right and license to use the CSC Software and applicable Documentation. Contemporaneously with the execution of this Agreement, TAG, LMG and CSC shall execute a nondisclosure and non-use agreement granting TAG a license in the CSC Software sufficient for TAG to perform the TPA Services and otherwise satisfy its obligations under the New Customer Contracts, Subcontracts and Administrative Services and Teaming Agreement (the "CSC Agreement"). TAG's use of, and LMG's rights regarding, the CSC Software will be governed by the terms of the CSC Agreement and not the terms of this Agreement. At TAG's request, LMG shall exercise and make available to TAG all rights and benefits available to it under LMG's existing license with CSC including LMG's rights to receive error corrections, support, maintenance and upgrades to or for the CSC Software. + +Other Third Party Software. LMG will maintain, through the Conversion Date or such other date as is specified in Exhibit A, its existing licenses for the Other Third Party Software and provide TAG access to and an irrevocable "look access only" right and license to use the Other Third Party Software and applicable Documentation. LMG, with the reasonable cooperation of TAG, will obtain from the applicable third party vendors all licenses, consents, authorizations and approvals that are necessary or appropriate for TAG to so Use the Other Third Party Software for purposes of performing the TPA Services and fulfilling its obligations under the New Customer Contracts, Subcontracts and Administrative Services and Teaming Agreement. At TAG's request, LMG shall exercise and make available to TAG all rights and benefits available to it under LMG's existing license with the applicable third party vendors including LMG's rights to receive error corrections, support, maintenance and upgrades to or for the Other Third Party Software. + +3 + + + + + +Support Services. LMG shall provide the following with respect to the LMG Tools, CSC Software, Other Third Party Software and Documentation for the period specified in Exhibit A: + +LMG shall provide (or will cause the third party vendor to provide) to TAG all error corrections and all operational and support assistance necessary to cause the LMG Tools, CSC Software and Other Third Party Software to perform in accordance with their Applicable Specifications. LMG shall also provide remedial support designed to provide a by-pass or temporary fix to a defect until the defect can be permanently corrected. + +LMG shall provide (or will cause the third party vendor to provide) to TAG all upgrades, modifications, improvements, enhancements, extensions, and other changes to LMG Tools developed by LMG. + +LMG shall provide (or will cause the third party vendor to provide) to TAG any revisions to the existing Documentation developed for the LMG Tools, CSC Software and Other Third Party Software or necessary to reflect all corrections, updates, upgrades, modifications, improvements, enhancements, extensions or other changes thereto. + +LMG shall provide training to TAG with respect to the use of the LMG Tools, Other Third Party Software and Documentation as reasonably requested by TAG. + +Hosting Services. LMG shall host the LMG Tools, CSC Software and Other Third Party Software at its existing data center facility in Petaluma, California for the period specified in Exhibit A. Except for downtime for scheduled maintenance, LMG shall make the LMG Tools, CSC Software and Other Third Party Software available to users between 7:00 a.m. to 9:00 p.m. Eastern Time. Notice of scheduled maintenance shall be provided to TAG via email at least ten (10) days before the scheduled maintenance. LMG shall be financially and operationally responsible for the hosting environment including maintenance, repair, replacement and upgrade, and the performance, availability, reliability, compatibility and interoperability of the LMG Tools, CSC Software, Other Third Party Software and hosting environment. LMG shall provide the hosting services through a dedicated telecommunications connection to TAG. The equipment, connectivity and other items located at LMG's existing data center facility in Petaluma, California that is described in Exhibit C to the Administrative Services and Teaming Agreement are included within the hosting environment and access to be provided by LMG under this Section 3.4. + +Retained LMG Personnel. LMG shall exercise commercially reasonable efforts to maintain the employment of the LMG employees identified in Exhibit B ("Retained Employees") for the estimated retention period specified in Exhibit B or such other period as TAG may reasonably request ("Retention Period"). LMG shall cause them to devote the same amount of time and attention to the performance of the services under this Agreement as they presently devote to such services. In all events, LMG shall retain a sufficient number of qualified personnel to perform the LMG Services. The Retained Employees shall be employees of LMG for all purposes. LMG shall be solely responsible for funding and distributing benefits under the benefit plans in which the Retained Employees participate and for paying any compensation and remitting any income, disability, withholding and other employment taxes for such Retained Employees. For clarity, the foregoing shall not affect TAG's obligation to reimburse LMG for the costs specifically identified as reimbursable by TAG during the period, and under the terms and conditions, set forth in Sections 4.1 and 4.2 of this Agreement. + +4 + + + + + +Reports. LMG shall provide TAG with reports pertaining to the performance of the LMG Services and LMG's other obligations under this Agreement that permit TAG to perform the TPA Services and monitor and manage LMG's performance. Without limitation, TAG may identify reports to be generated by LMG and delivered to TAG on an ad hoc or periodic basis. + +Source Code. Upon TAG's request, LMG will promptly provide to TAG one copy of the most current version of the source code for the LMG Tools. Thereafter, LMG will promptly and continuously update and supplement the source code as necessary with all revisions, corrections, enhancements, and other changes that LMG has developed for the LMG Tools. If LMG breaches this Agreement or no longer provides the LMG Services for the LMG Tools, then LMG or its authorized agent will promptly provide to TAG one copy of the most current version of the source code for the LMG Tools, the License shall include the right to Use the source code version of the LMG Tools received under this Section as necessary to modify, maintain, and update the LMG Tools in accordance with the terms and conditions of this Agreement. + +Continued Performance. LMG understand that TAG requires Use of the LMG Tools, CSC Software, Other Third Party Software, Documentation and LMG Services in order to perform the TPA Services for the New Customers. Accordingly, LMG agrees that LMG will perform its obligations under this Article in a manner that does not degrade, diminish or otherwise interfere with the TPA Services or result in any default by, or liability of, TAG under the New Customer Contracts (including any default or liability with respect to service levels or quality of service). Without limitation, LMG shall not under any circumstance, even during a dispute, suspend, terminate, diminish or degrade the performance of the LMG Tools, CSC Software, Other Third Party Software or LMG Services, or attempt or threaten to do the same. + +ARTICLE IV CHARGES + +Reimbursement Generally. In consideration of the LMG Services and other obligations to be performed by LMG under this Agreement, TAG will reimburse LMG for the following items. + +reasonable actual salary and direct benefits, consistent with past practice, paid to or on behalf of the Retained Employees during their Retention Period; provided that the total amount to be reimbursed under this Section 4.1(a) shall not exceed $783,367 per quarter, pro-rated for the number of days in any partial quarter of the Term, + +any retention bonuses, salary increases (including for replacement personnel) or other change agreed to by the parties, and + +during the period between the Effective Date and the date specified in Exhibit A, the designated percentage identified in Exhibit A of the reasonable actual out-of-pocket costs for the CSC Software and Other Third Party Software provided that the total amount to be reimbursed under this Sections 4.1(c) and Section 4.2 of the Administrative Services and Teaming Agreement shall not exceed the applicable amount identified in Section 4.2 of the Administrative Services and Teaming Agreement. + +5 + + + + + +The parties acknowledge that since not all of the Retained Employees will be dedicated solely to the performance of services under this Agreement, TAG will reimburse LMG only for a pro rata portion of the above-described salary and benefits based upon the documented and verifiable percentage of their working hours spent performing services for TAG. + +4.2 Conditions of Reimbursement. + +TAG shall have the right to approve any changes to the salary, benefits or other compensation of the Retained Employees and any new contracts, extensions or other changes to or for the items for which it is reimbursing LMG. Such approval shall not be unreasonably withheld. LMG will advise TAG of any significant (i.e., more than ten percent (10%)) increase in any reimbursable costs, and TAG shall have the opportunity to require replacement or substitution of new or different sources for the items intended to achieve an overall lower cost. LMG shall exercise commercially reasonable efforts to minimize such costs and, as a condition to TAG's reimbursement obligations, shall provide such detail and documentation as TAG may reasonably request. + +LMG will invoice TAG monthly for its reasonable estimate of the amount due under Section 4.1 for that month. The first such invoice shall be delivered within five (5) days after the Effective Date and shall cover the period between the Effective Date and October 31, 2007. LMG shall reconcile the actual reimbursable costs incurred by TAG for the applicable month with such estimate in the invoice for the next month. + +TAG shall make payment within twenty (20) days after receipt of LMG's invoice. Any amount not paid when due will thereafter bear interest at the rate of one percent (1%) per month. + +TAG may contest, in good faith, any portion of an invoice and withhold payment of such contested amount, provided that TAG pays the portion of any invoice that it does not contest and attempts to try to resolve the dispute. Once the matter is resolved, TAG shall pay the agreed-upon amount within five (5) days thereafter. + +Except as otherwise agreed by the parties in writing, there are no other or additional charges under this Agreement. LMG shall be responsible for all expenses that it may incur in connection with this Agreement. TAG agrees, however, to reimburse LMG for all reasonable and necessary travel and other out-of-pocket expenses that have been pre-approved by TAG in writing. + +Extension of Conversion Date. TAG and LMG expect that the Conversion Date will occur on or before October 31, 2009. TAG may extend the Conversion Date to a date that is six (6) months after transition of the TPA Services for the New Customers from LMG's software and systems to TAG's software and systems; provided that the foregoing shall not be construed as requiring the extension of the license to the CSC Software, which the parties acknowledge expires twenty-seven (27) months after the Effective Date under the terms of the CSC Agreement. TAG shall seek to give LMG at least ninety (90) days (but in no event shall provide less than sixty (60) days) prior notice of any such extension. If the delay was caused by TAG, the parties shall negotiate and agree upon an equitable adjustment to the reimbursable items and limits thereon based upon LMG's increased costs of performing the LMG Services during the extension. + +6 + + + + + +ARTICLE V WARRANTIES, INDEMNITIES, AND LIABILITIES + +Warranty. LMG represents and warrants that: + +The LMG Tools, CSC Software, Other Third Party Software and Documentation are and shall be free and clear of all liens and encumbrances, and TAG shall be entitled to Use them without disturbance; + +No portion of the LMG Tools, CSC Software and Other Third Party Software contains, at the time of delivery, any "back door," "time bomb," "Trojan horse," "worm," "drop dead device," "virus," or other computer software routines or hardware components designed to (i) permit access or Use of such software or TAG's computer systems by LMG or a third party not authorized by this Agreement, or (ii) disable, damage or erase the software or data; + +The LMG Tools, CSC Software and Other Third Party Software and the design thereof shall not contain preprogrammed preventative routines or similar devices which prevent TAG from exercising the rights granted to TAG under this Agreement or from utilizing the software for the purpose for which they were designed; and + +Each item of LMG Tools and, to LMG's knowledge, the CSC Software and Other Third Party Software (i) shall be free from defects and (ii) shall function properly under ordinary Use and operate in conformance with its Applicable Specifications and Documentation. + +During the period specified in Exhibit A, LMG will provide warranty service to TAG at no additional charge and will include all LMG Services or replacement software necessary to enable LMG to comply with the warranties set forth in this Agreement. + +5.2 LMG Infringement Indemnification + +LMG represents and warrants that (i) no LMG Tools, CSC Software, Other Third Party Software or Documentation provided under this Agreement is the subject of any claim, dispute, demand or litigation ("Claim"), and (ii) LMG has all right, title, ownership interest, and/or rights necessary to provide such software and Documentation to TAG and that the License, the LMG Tools and Documentation and their license and Use hereunder do not and shall not directly or indirectly violate or infringe upon any copyright, patent, trade secret, or other proprietary or intellectual property right of any third party or contribute to such violation or infringement ("Infringement"). LMG shall indemnify and hold TAG, its affiliates and their respective successors, officers, directors, employees, and agents harmless from and against any and all actions, claims, losses, damages, liabilities, awards, costs, and expenses including legal fees ("Losses") resulting from or arising out of any breach or claimed breach of the foregoing warranties, or which is based on a claim of an Infringement and LMG shall defend and settle, at its expense, all suits or proceedings arising therefrom. TAG shall inform LMG of any such Claim against TAG and shall have the right to participate in the defense of any such suit or proceeding at its expense and through counsel of its choosing. + +7 + + + + + +LMG shall notify TAG of any Claims against LMG based on an alleged Infringement of any party's intellectual property rights in and to the LMG Tools, CSC Software, Other Third Party Software or Documentation. In the event an injunction is sought or obtained against Use thereof or in TAG's opinion is likely to be sought or obtained, LMG shall promptly, at its option and expense, either (i) procure for TAG the right to continue to Use the infringing software or Documentation as set forth in this Agreement, or (ii) replace or modify the infringing software or Documentation to make its Use non-infringing while being capable of performing the same function without degradation of performance. + +LMG's indemnification obligations under this Section 5.2 will expire twelve (12) months after the Conversion Date. + +Notwithstanding the foregoing, LMG shall have no liability or obligation to any of the TAG ndemnities under this Section 5.2 to the extent the claim of Infringement is caused by TAG's contributions to, misuse of or unauthorized modification of such item. + +5.3 TAG Indemnification + +TAG shall indemnify and hold LMG, its affiliates and their respective successors, officers, directors, employees, and agents harmless from and against any and all Losses resulting from or arising out of (i) any Infringement by software provided by TAG or PSC or (ii) TAG's contributions to, misuse of or unauthorized modification of LMG Tools, CSC Software, Other Third Party Software or Documentation provided by LMG under this Agreement; provided, however, that TAG shall have no obligation under this Section to the extent (A) the claim or Infringement was the result of LMG's failure to obtain the required consents or approvals for which it is responsible, (B) LMG failed to provide written notice of the duties, obligations or restrictions to which TAG is subject, or (C) TAG's contributions to, use of, modification or other activities is consistent in all material respects with LMG's activities in the twelve (12) months prior to the Effective Date. TAG shall defend and settle, at its expense, all suits or proceedings arising therefrom. LMG shall inform TAG of any such Claim against LMG and shall have the right to participate in the defense of any such suit or proceeding at its expense and through counsel of its choosing. + +TAG shall notify LMG of any Claims against TAG described in Section 5.3(a). In the event an injunction is sought or obtained against Use of software provided by TAG or PSC, or in LMG's opinion is likely to be sought or obtained, TAG shall promptly, at its option and expense, either (i) procure for LMG the right to continue to Use the infringing software, or (ii) replace or modify the infringing software to make its Use non-infringing while being capable of performing the same function without degradation of performance. + +TAG's indemnification obligations under this Section 5.3 will expire twelve (12) months after the Conversion Date. + +Notwithstanding the foregoing, TAG shall have no liability or obligation to any of the LMG ndemnities under this Section 5.3 to the extent the claim of Infringement is caused by LMG's contributions to, misuse of or unauthorized modification of such item. + +Other Indemnification. LMG shall indemnify and hold TAG, its affiliates and their respective successors, officers, directors, employees, and agents harmless from and against any and all Losses resulting from or arising out of any Claim by New Customers arising from or relating to a breach of LMG's obligations under this Agreement. Notwithstanding the foregoing, LMG shall not be responsible for the claims based upon breach of new or additional obligations agreed to by TAG and the New Customers after the Effective Date without the prior approval of LMG; provided that + +8 + + + + + +the service levels in the New Customer Contracts, which are based upon, the service levels being achieved by LMG as of the effective date shall not be considered new or additional obligations. LMG shall defend and settle, at its expense, all suits or proceedings arising therefrom. TAG shall inform LMG of any such Claim against TAG and shall have the right to participate in the defense of any such suit or proceeding at its expense and through counsel of its choosing. + +Limitation of Liability. Neither party shall be liable to the other pursuant to this Agreement for any amounts representing loss of profit, loss of business or indirect, consequential, exemplary, or punitive damages of the other party. The foregoing shall not limit the indemnification, defense and hold harmless obligations set forth in this Agreement other than those set forth in Section 5.4 and shall not apply with respect to damages or losses arising from the wrongful termination of this Agreement by LMG, willful misconduct, gross negligence or breach of LMG's obligations under Section 3. 8. + +5.6 Insurance + +During the Term of the Agreement, LMG shall maintain and keep in force, at its own expense, the following minimum insurance coverages and minimum limits: + +workers' compensation insurance, with statutory limits as required by the various laws and regulations applicable to the employees of LMG; + +employer's liability insurance, for employee bodily injuries and deaths, with a limit of $500,000 each accident; + +commercial general liability insurance, covering claims for bodily injury, death and property damage, including premises and operations, LMG's vicarious liability for acts of independent contractors, products, services and completed operations (as applicable to the Services), personal injury, contractual, and broad-form property damage liability coverages, with combined single limit of $1,000,000 per occurrence, and a general aggregate limit of $2,000,000, for bodily injury, death and property damage; + +commercial automobile liability insurance, covering owned, non-owned and hired vehicles, with combined single limit of $1,000,000 per occurrence; + +umbrella liability insurance, with a minimum limit of $5,000,000 per occurrence and $5,000,000 in the aggregate; + +special form property insurance, on a replacement cost basis, covering the real and personal property of LMG which LMG is obligated to insure by the Agreement; such real and personal property may include equipment, furniture, fixtures and supply inventory; and + +employee dishonesty insurance covering dishonest acts of employees; such insurance shall include a Joint Loss Endorsement in favor of TAG and be written for limits not less than $500,000. + +All such policies of insurance of LMG shall provide that the insurer will give at least thirty (30) days prior written notice of cancellation to TAG. No such cancellation or material modification shall affect LMG's obligation to maintain the insurance coverages required by the Agreement. TAG shall be named as an additional insured on the commercial general liability insurance policies described above. All liability insurance policies shall be written on an "occurrence" policy form except for the policies described in (vii) and (viii) above + +9 + + + + + +which shall be on a "claims made" basis. TAG shall be named as loss payee as its interest may appear on the property insurance policies of LMG. LMG shall be responsible for payment of any and all deductibles from insured claims under its policies of insurance. All required policies of insurance will be placed with insurers with no less than an A.M. Best rating of A- VII. The coverage afforded under any insurance policy obtained by LMG pursuant to the Agreement shall be primary coverage regardless of whether or not TAG has similar coverage. LMG shall not perform under the Agreement without the prerequisite insurance. Upon TAG's request, LMG shall provide TAG with certificates of such insurance including renewals thereof. + +The parties do not intend to shift all risk of loss to insurance. The naming of TAG as additional insured is not intended to be a limitation of LMG's liability and shall in no event be deemed to, or serve to, limit LMG's liability to TAG to available insurance coverages or to the policy limits specified in this Section 5.6 nor to limit TAG's rights to exercise any and all remedies available to TAG under contract, at law or in equity. + +Survival of Article V. The provisions of this Article V shall survive the term or termination of this Agreement for any reason. + +ARTICLE VI TERMINATION + +Term. This Agreement shall become effective as of the Effective Date and, unless terminated under this Article, shall continue in effect until the Conversion Date (the "Term"); provided that, with respect to any LMG Tools identified in Exhibit A as having a license term beyond the Conversion Date, TAG's License to, and LMG's obligation to provide LMG Services for, such LMG Tools shall survive for the period specified in Exhibit A. + +Termination for Cause. In the event that either party materially defaults in the performance of its duties or obligations set forth in this Agreement, and such default is not cured within thirty (30) days after written notice is given to the defaulting party specifying the default, then the party not in default may, by giving written notice thereof to the defaulting party, terminate the Agreement as of a date specified in such notice of termination. + +10 + + + + + +Termination for Insolvency or Bankruptcy. Either party may immediately terminate this Agreement by giving written notice to the other party in the event of (a) the liquidation or insolvency of the other party, (b) the appointment of a receiver or similar officer for the other party, (c) an assignment by the other party for the benefit of all or substantially all of its creditors, (d) entry by the other party into an agreement for the composition, extension, or readjustment of all or substantially all of its obligations, or (e) the filing of a meritorious petition in bankruptcy by or against the other party under any bankruptcy or debtors' law for its relief or reorganization. + +Termination Assistance. Commencing upon a notice of termination under Section 6.2 or 6.3 (including notice based upon default by TAG) and continuing for a period, designated by TAG, of up to twelve (12) months thereafter, LMG shall provide to TAG the reasonable termination assistance requested by TAG to allow the LMG Services to continue without interruption or adverse effect and to facilitate the orderly transfer of the LMG Services to TAG or its designee ("Termination Assistance"). Termination Assistance shall include the following: + +LMG shall provide all such information and assistance as may be necessary for TAG to transition off using the LMG Tools, CSC Software and Other Third Party Software or to install and implement the same. + +LMG shall provide TAG with an extract of the Customer Data, including, without limitation, all policyholder and New Customer data. + +TAG shall be permitted to undertake, without interference from LMG, to hire any Retained Employees. LMG shall waive its rights, if any, under contracts with such personnel restricting the ability of such personnel to be recruited or hired by TAG; provided that counter-offers and making available positions posted through LMG's placement system and generally available to other LMG employees shall not be prohibited under this Section. TAG shall have reasonable access to such personnel for interviews and recruitment. + +TAG's License to the LMG Tools and subject to the terms of the applicable third party license, CSC Software and Other Third Party Software and Documentation shall survive the termination for the period specified in Exhibit A, and LMG shall provide copies of all Documentation relevant to such license which is in LMG' possession. + +At TAG's request, LMG shall exercise commercially reasonable efforts to assign to TAG its license for the CSC Software and any third party licenses for Other Third Party Software, and TAG shall assume the obligations under such licenses that relate to periods after such date. LMG shall also provide all Documentation relevant to such licenses which is in LMG's possession. + +At TAG's request (i) assign to TAG leases and other contracts for some or all of the leased equipment included in the hosting environment or otherwise used to provide the LMG Services, and TAG shall assume the obligations under such leases that relate to periods after such date; and (ii) sell to TAG, at LMG's then current book value, some or all of such items owned by LMG. LMG shall also provide all Documentation relevant to such item which is in LMG's possession. + +LMG shall obtain any necessary rights and thereafter make available to TAG, pursuant to reasonable terms and conditions, any third party services then being utilized by LMG in the performance of the LMG Services. + +11 + + + + + +The Parties contemplate that the activities described in this Section 6.4 shall be completed before the Conversion Date as contemplated in the Administrative Services and Teaming Agreement (i.e., in the ordinary course of the transition projects described therein). If, however, any activities are not completed before the Conversion Date, then notwithstanding anything to the contrary and regardless of whether there has been notice of termination under Section 6.2 or 6.3, LMG shall complete any such activities that are reasonably requested by TAG before the Conversion Date. LMG's obligations under the foregoing sentence shall survive the expiration of the Term. + +Reimbursement for Termination Assistance. + +Except as provided in this Section 6.5, LMG shall perform or provide the Termination Assistance at no additional cost to TAG; provided that for clarity, the foregoing shall not affect TAG's obligation to reimburse LMG for the applicable costs specifically identified as reimbursable by TAG during the period, and under the terms and conditions, set forth in Sections 4.1 and 4.2 of this Agreement and Section 4.2 of the Administrative Services and Teaming Agreement. The Parties anticipate that, to the extent possible, the Termination Assistance requested by TAG will be provided by LMG using LMG personnel already performing the LMG Services. If Termination Assistance requested by TAG cannot be provided by LMG using such personnel (or incur costs that LMG would not otherwise incur in the performance of the LMG Services under this Agreement), LMG shall promptly notify TAG of such fact and advise TAG of the required personnel or costs. TAG, in its sole discretion, may forego or delay any work activities or temporarily or permanently adjust the work to be performed by LMG or the schedules associated therewith to permit the performance of such Termination Assistance using such personnel and without additional cost. To the extent TAG authorizes LMG to use additional LMG personnel or incur additional cost to perform material Termination Assistance activities requested by TAG, TAG shall reimburse LMG for its reasonable actual out-of-pocket costs; provided LMG notifies TAG of such costs in advance and TAG's reimbursement shall be subject to the reporting and other conditions set forth in Sections 4.1 and 4.2 of this Agreement and Section 4.2 of the Administrative Services and Teaming Agreement. + +LMG will provide Termination Assistance regardless of the reason for the termination; provided that if the LMG terminates this Agreement under Section 6.2 as a result of TAG's failure to pay amounts due LMG under this Agreement or under Section 6.3 as a result of TAG insolvency, LMG may require TAG to pay monthly, in advance, for any costs specifically identified in this Agreement as reimbursable by TAG during the period of Termination Assistance. To the extent TAG is obligated to pay in advance, LMG shall, prior to each month, provide TAG with a reasonable written estimate of the reimbursable costs for such month and LMG shall reconcile the actual reimbursable costs incurred by TAG with such estimate in the invoice for the next month. + +12 + + + + + +ARTICLE VII CONFIDENTIALITY + +General. Each party (a "Receiving Party") agrees that all Confidential Information provided or otherwise made available under this Agreement by the other party (a "Disclosing Party") will be treated as confidential, regardless of whether marked or described as Confidential Information, and all confidentiality notices on that Confidential Information will be retained. In avoiding unauthorized disclosure or use of the Disclosing Party's Confidential Information, the Receiving Party will use at least the same degree of care, but no less than a reasonable degree of care, as it employs concerning its own Confidential Information of similar importance. + +Definition. "Confidential Information" shall mean, with respect to a party, all non-public written, electronic, and oral proprietary information communicated to the other party (or obtained by such other party while at the party's premises) during the Term in connection with this Agreement including information relating to a party's products, services, designs, methodologies, business plans, finances, marketing plans, customers or prospects and the terms of this Agreement. Confidential Information will not include information that (a) was known by the Receiving Party without an obligation of confidentiality before its receipt from the Disclosing Party, (b) is independently developed by the Receiving Party, (c) is or becomes publicly available without a breach by the Receiving Party of this Agreement, or (d) is disclosed to the Receiving Party by a third person who is not required to maintain its confidentiality. + +Disclosure. The Receiving Party may disclose Confidential Information only to its own officers, directors, and employees and to its consultants, subcontractors, and advisors who reasonably need to know it for the purposes contemplated by this Agreement. The Receiving Party will be responsible to the Disclosing Party for any violation of the provisions of this Article VII by its officers, directors, employees, consultants, subcontractors or advisors. + +Use. The Receiving Party may not use the Disclosing Party's Confidential Information for any purpose not in furtherance of this Agreement, unless it obtains the Disclosing Party's prior written authorization. + +Reproduction. Except as otherwise provided in writing between the Parties, the Receiving Party may not print, copy or reproduce in any way, in whole or in part, any documents or other media containing the Disclosing Party's Confidential Information, other than copies for its officers, directors, employees, consultants or advisors who reasonably need to know it for the purposes contemplated by this Agreement, without the prior written consent of the Disclosing Party. + +Required Disclosure. If the Receiving Party is requested to disclose any of the Disclosing Party's Confidential Information as part of an administrative or judicial proceeding or pursuant to any government or securities exchange rule or regulation, the Receiving Party will, promptly notify the Disclosing Party of that request and cooperate with the Disclosing Party, at the Disclosing Party's expense, in seeking a protective order or similar confidential treatment for the Confidential Information. If no protective order or other confidential treatment is obtained, the Receiving Party will (a) disclose only that portion of the Confidential Information that is legally required to be disclosed based on the opinion of its counsel and (b) use reasonable efforts to obtain reliable assurance that confidential treatment will be accorded the Confidential Information so disclosed. + +13 + + + + + +ARTICLE VIII DATA + +Definition. "Customer Data" shall mean any data or information of any New Customer or of TAG created under a New Customer Contract that is provided to or obtained by LMG in connection with the performance of its obligations under this Agreement, including data and information with respect to the businesses, policyholders, customers, operations, products, rates, regulatory compliance and finances of any New Customer. Customer Data shall also include any data or information pertaining to any New Customer created, generated, collected or processed by LMG in the performance of its obligations under this Agreement. + +TAG Ownership of Customer Data. Customer Data is and shall remain the property of TAG and/or the applicable New Customers. LMG shall promptly deliver Customer Data (or the portion of such Customer Data specified by TAG) to TAG in the format and on the media in which it exists as of the date of the request or in such other format or media as TAG reasonably requests. Upon TAG's request, LMG shall return, destroy or securely erase, as directed by TAG, all copies of the Customer Data in LMG's possession or under LMG's control within thirty (30) business days. LMG shall not withhold Customer Data under any circumstance including as a means of resolving a dispute. Customer Data shall not be utilized by LMG for any purpose other than the performance of the LMG Services and shall not be sold, assigned, leased, commercially exploited or otherwise provided to third parties by or on behalf of LMG or any LMG Personnel. LMG shall not possess or assert any lien or other right against or to Customer Data. + +8.3 Safeguarding Customer Data. + +LMG shall establish and maintain procedures and other safeguards against the destruction, loss, unauthorized access or alteration of Customer Data in the possession of LMG which are (i) no less rigorous than those maintained by LMG as of the Effective Date, and (ii) adequate to meet the requirements of the New Customer Contracts and applicable laws. In the event LMG discovers or is notified of a breach or attempted breach of security relating to Customer Data, LMG shall (A) expeditiously notify TAG of such breach or attempted breach, (B) investigate such breach or attempted breach, (C) remediate the effects of such breach or attempted breach of security, and (D) provide TAG with such assurances as TAG shall request that such breach or attempted breach will not recur. + +At TAG's request, LMG shall restore all destroyed, lost or altered Customer Data. Unless TAG has caused the destruction, loss or alteration, LMG shall be responsible for the cost of restoring such data. + +File Access. TAG shall have unrestricted access to, and the right to review and retain the entirety of, all computer or other files containing Customer Data, as well as all systems and network logs, system parameters and documentation. At no time shall any of such files or other materials or information be stored or held in a form or manner not immediately accessible to TAG. + +14 + + + + + +ARTICLE IX DISASTER RECOVERY + +LMG shall maintain a disaster recovery plan and a business continuity plan, and the necessary resources and capabilities covering the data center facilities used by LMG to operate all of the LMG Tools, CSC Software and Other Third Party Software, to fully perform the LMG Services under this Agreement in accordance with its terms and the terms of the New Customer Contracts. The plans will be made available to TAG for review upon TAG's request. LMG agrees that it will (a) test the plans at least once every calendar year during the Term hereof, and certify to TAG that such plans are fully operational, and (b) consult with TAG regarding the priority to be given to the LMG Services during any such disaster. When implemented by LMG, the plans shall enable LMG to provide all of the LMG Services within the recovery time objectives required under the New Customer Contracts. The occurrence of a Force Majeure event shall not relieve LMG of its obligation to implement its disaster recovery and business continuity plans and provide disaster recovery and business continuity services. + +ARTICLE X MISCELLANEOUS + +Binding Nature, Assignment, and Subcontracting. This Agreement shall be binding on the parties and their respective successors in interest and assigns, but neither party shall have the power to assign this Agreement without the prior written consent of the other party. LMG may not subcontract or delegate any of its duties or obligations of performance in this Agreement to any third party without the prior written consent of TAG. If TAG grants such consent, LMG shall remain fully responsible for complete performance of all of LMG's obligations set forth in this Agreement and for any such third party's compliance with the confidentiality and other provisions set forth in this Agreement. + +Media Releases. Except for any announcement intended solely for internal distribution by a party or any disclosure required by legal, accounting, or regulatory requirements beyond the reasonable control of the party, all media releases, public announcements, or public disclosures (including, but not limited to, promotional or marketing material) by a party, its affiliates, employees or agents relating to this Agreement or its subject matter, or including the name, trade name, trade mark, or symbol of a party or any affiliate of a party, shall be coordinated with and approved in writing by that party prior to the release thereof. + +Notices. All notices which are required to be given pursuant to this Agreement shall be in writing and shall be delivered by first class mail postage prepaid, sent by overnight express or similarly recognized overnight delivery with receipt acknowledged or by facsimile, with a copy thereof sent by one of the other means. Notices shall be deemed to have been given at the time delivered and shall be addressed as follows or to such other address as a party may designate by proper notice hereunder: + +if to TAG: with copies to: Transaction Applications Group, Inc. 421 South 9th Street, Suite 222 Lincoln, Nebraska 68508 Attention: President + +Perot Systems Corporation 2300 West Plano Parkway Plano, Texas 75075 Attn: Thomas D. Williams if to LMG: Legacy Marketing Group, Inc. 2090 Marina Avenue Petaluma, CA 94954 Attention: President + +with copies to: Stokes Lazarus & Carmichael LLP 80 Peachtree Park Drive N.E. Atlanta, GA 30309 Attention: Michael Ernst, Esquire + +15 + + + + + +Force Majeure. The term "Force Majeure" shall mean fires or other casualties or accidents, acts of God, severe weather conditions, strikes or labor disputes, war or other violence, or any law, order, proclamation, regulation, ordinance, demand, or requirement of any governmental agency. A party whose performance is prevented, restricted, or interfered with by reason of a Force Majeure condition shall be excused from such performance to the extent of such Force Majeure condition so long as such party provides the other party with prompt written notice describing the Force Majeure condition and takes all reasonable steps to avoid or remove such causes of nonperformance and immediately continues performance whenever and to the extent such causes are removed. + +Severability. If, but only to the extent that, any provision of this Agreement is declared or found to be illegal, unenforceable, or void, then both parties shall be relieved of all obligations arising under such provision, it being the intent and agreement of the parties that this Agreement shall be deemed amended by modifying such provision to the extent necessary to make it legal and enforceable while preserving its intent. If that is not possible, another provision that is legal and enforceable and achieves the same objective shall be substituted. If the remainder of this Agreement is not affected by such declaration or finding and is capable of substantial performance, then the remainder shall be enforced to the extent permitted by law. + +Dispute Resolution. In the event of any disagreement regarding performance under or interpretation of this Agreement and prior to the commencement of any formal proceedings, the parties shall continue performance as set forth in this Agreement and shall attempt in good faith to reach a negotiated resolution by designating a representative of appropriate authority to resolve the dispute. + +Waiver. Any waiver of this Agreement or of any covenant, condition, or agreement to be performed by a party under this Agreement shall (a) only be valid if the waiver is in writing and signed by an authorized representative of the party against which such waiver is sought to be enforced, and (b) apply only to the specific covenant, condition or agreement to be performed, the specific instance or specific breach thereof and not to any other instance or breach thereof or subsequent instance or breach. + +Remedies. All remedies set forth in this Agreement, or available by law or equity shall be cumulative and not alternative, and may be enforced concurrently or from time to time. If LMG breaches its obligations under Section 3.8, TAG will be irreparably harmed. In such a circumstance, TAG may proceed directly to court and, without any additional findings of irreparable injury or other conditions to injunctive relief, LMG shall not oppose the entry of an order compelling performance by LMG and restraining it from any further breaches. In addition to any other remedies available under this Agreement, with respect to any amounts to be paid or reimbursed by TAG or PSC hereunder or under the LMG Documents that are not paid or reimbursed when due, TAG and/ or PSC may, upon ten (10) days prior notice, set off against such amount any amount that LMG is obligated to pay or credit to TAG or PSC hereunder or under the LMG Documents. For clarity, the foregoing shall not apply to, and TAG and PSC shall not seek to set-off against, commission payments to be paid to LMG producers and agents and other amounts held by TAG in its administrative capacity under the New Customer Contracts and Subcontracts. + +Compliance with Laws. In the performance of LMG Services or the provision of LMG Tools and Documentation pursuant to this Agreement, LMG shall comply with the requirements of all applicable laws, ordinances, and regulations of the United States or any state, country, or other governmental entity. LMG shall indemnify, defend, and hold TAG harmless from and against any and all claims, actions, or damages arising from or caused by LMG's failure to comply with the foregoing. + +16 + + + + + +Survival of Terms. Termination or expiration of this Agreement for any reason shall not release either party from any liabilities or obligations set forth in this Agreement which (a) the parties have expressly agreed shall survive any such termination or expiration, or (b) remain to be performed or by their nature would be intended to be applicable following any such termination or expiration. + +GOVERNING LAW. THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL NOT BE GOVERNED BY THE PROVISIONS OF THE 1980 UNITED NATIONS CONVENTION ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS. RATHER THESE RIGHTS AND OBLIGATIONS SHALL BE GOVERNED BY THE LAWS, OTHER THAN CHOICE OF LAW RULES, OF THE STATE OF GEORGIA. + +Unauthorized Representations and Relationship of the Parties. Neither party shall (a) represent that this Agreement or the relationship created by this Agreement covers more than is specifically agreed to by the parties or (b) without the other party's prior written consent, make any representations or create any warranties, express or implied, concerning such other party or its products or services. This Agreement shall not constitute or create a joint venture, partnership or formal business organization of any kind. The parties shall be independent contractors, and the employees of one shall not be employees or agents of the other. + +No Third Party Beneficiaries. The parties do not intend this Agreement to create any rights enforceable by a third party. + +Construction. Unless herein otherwise provided, or unless the context shall otherwise require, references to Articles, Sections, and other subdivisions refer to the Articles, Sections, and other subdivisions of this Agreement. The term "or" will not be interpreted as excluding any of the items described. The term "include" or any derivative of such term does not mean that the items following such term are the only types of such items. Neither this Agreement nor any provision contained in this Agreement will be interpreted in favor of or against any party hereto because such party or its legal counsel drafted this Agreement or such provision. + +Entire Agreement. This Agreement constitutes the entire and exclusive statement of the agreement between the parties with respect to its subject matter and there are no oral or written representations, understandings or agreements relating to this Agreement which are not fully expressed in the Agreement. This Agreement shall not be amended except by a written agreement signed by both parties. All exhibits referenced in this Agreement or attached to this Agreement, are an integral part of this Agreement. In the event of any conflict between the terms and conditions of this Agreement and any such exhibit, the terms of this Agreement shall be controlling unless otherwise stated or agreed. + +SPACE BELOW INTENTIONALLY BLANK - SIGNATURE PAGE FOLLOWS + +17 + + + + + +IN WITNESS WHEREOF, LMG and TAG have executed this Agreement as of the Effective Date. + +LEGACY MARKETING GROUP, INC. TRANSACTION APPLICATIONS GROUP, INC. + +By: /s/ R. Preston Pitts By: /s/ John Vonesh + +Printed Name: R. Preston Pitts Printed Name: John Vonesh + +Title: President Title: President \ No newline at end of file diff --git a/full_contract_txt/REWALKROBOTICSLTD_07_10_2014-EX-10.2-STRATEGIC ALLIANCE AGREEMENT.txt b/full_contract_txt/REWALKROBOTICSLTD_07_10_2014-EX-10.2-STRATEGIC ALLIANCE AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..651f9efaf95eb8e6ce2c8d73f522b71661f7f231 --- /dev/null +++ b/full_contract_txt/REWALKROBOTICSLTD_07_10_2014-EX-10.2-STRATEGIC ALLIANCE AGREEMENT.txt @@ -0,0 +1,153 @@ +Exhibit 10.2 + +STRATEGIC ALLIANCE AGREEMENT + +This Strategic Alliance Agreement is entered into as of September 24, 2013 (the "Effective Date") by and between Yaskawa Electric Corporation, a limited company duly organized and existing under the law of Japan, having its address at 2-1 Kurosakishiroishi, Yahatanishi-ku, Kitakyushu, Fukuoka, 806-0004, Japan. (Business Identity Code 2908-01-010767, hereinafter referred to as "YEC") and Argo Medical Technologies Ltd., a private company duly organized and existing under the law of Israel, having its address at Kokhav Yokneam Building, P.O. Box 161, Yokneam Ilit 20692, Israel (Business Identity Code 51-312137-6, hereinafter referred to as "ARGO"). + +RECITALS: (A) Argo is a venture company engaged in the business of healthcare robotics, and possesses valuable know-how regarding development, marketing and distribution of bipedal exoskeleton equipment for individuals with spinal cord injuries, multiple sclerosis or cerebral palsy in North America and the European Union. + +(B) YEC is a leading company engaged in the business of electrical engineering and robotics, and possesses valuable know-how regarding development, manufacturing, marketing and distribution of various innovative solutions globally. + +(C) The parties hereto recognize that the sales volume and demand of customers for healthcare equipment utilizing robotics technologies has increased and may increase further in the future. + +(D) The agreements have so far been reached between the parties hereto in regard to the formation and operation of a strategic alliance with the goal of evaluation, development and commercialization of such healthcare products. + +NOW, THEREFORE, YEC AND ARGO AGREE AS FOLLOWS: + +AGREEMENTS: 1. SCOPE OF STRATEGIC ALLIANCE + +The parties acknowledge that the purpose of this agreement shall be to seek and develop possibilities for collaboration in the following areas: + + (a) Marketing, distribution, and commercialization of ARGO's products by YEC, subject to the terms and conditions contained in thisAgreement and a separate Distribution Agreement being entered into concurrently with this Agreement (hereafter "DA"). + + (b) Marketing and distribution of future YEC products in the area of healthcare equipment by ARGO within the scope of its salesnetwork. + + + + + + (c) Improvement of ARGO's products by applying YEC's know-how and expertise in the field of motion control and robotics, especiallyimprovements necessary for YEC to successfully market ARGO's products within the scope agreed to in the DA. + + (d) Quality improvements of ARGO's Products by applying YEC's know-how and expertise in the field of motion control and robotics. + + (e) Definition of the responsibilities and areas of coverage of YEC and ARGO in the future research and development of ARGO'sproducts, as to be defined in detail on a case-by-case basis with separate joint development agreements in the future. + + 2. INVESTMENT BY YEC + +As part of the implementation and execution of this Agreement, both parties agree to enter into a separate Share Purchase Agreement (hereafter "SPA"), at the same time and subject to the execution of the DA. Upon the terms and subject to the conditions contained in the SPA, YEC has agreed to purchase Series D-1 Convertible Preferred Shares of ARGO, par value NIS 0.01 each. The obligations of ARGO under this Agreement will not become invalid in case that YEC sells part or all of its shares of ARGO to another party. + + 3. DISTRIBUTION OF ARGO'S PRODUCTS BY YEC + +As part of the implementation and performance of this Agreement, both parties are entering into the DA concurrently with this Agreement. Pursuant to the DA, and subject to its terms, ARGO agreed to appoint YEC as the exclusive distributor of its products in the Territory specified therein, and YEC agreed to market and distribute Argo's products in a professional manner. In case the DA is terminated in accordance with the terms and conditions of the DA, this provision shall be considered void. + + 4. JOINT STEERING COMMITTEE + +YEC and ARGO agree to pursue further opportunities for collaboration in the areas of research and development, manufacturing, marketing and sales, for the purposes stated in this Agreement. As a platform to discuss such opportunities, YEC and ARGO agree to form a Joint Steering Committee (hereafter "JSC"), which will meet at least four (4) times per year, once in every quarter, for the following purposes: + + (a) Subject to the DA being in effect, to review and share the progress of marketing and sales of ARGO Products by YEC and ARGOworldwide, as defined in the DA. + + (b) Subject to the DA being in effect, to establish sales targets and minimum purchase requirements for ARGO's Products under thedistribution relationship that is defined in the DA. + + + + + + (c) To discuss the possibilities of sales of YEC's products in the healthcare field using ARGO's sales network. + + (d) To discuss possibilities for improvements of ARGO's Products, especially improvements necessary for YEC to successfully market ARGO's products as defined in the DA, by granting YEC access to cost information and applying YEC's know-how and expertise in the field of motion control and robotics. + + (e) To discuss the responsibilities and areas of coverage of YEC and ARGO in the future research and development of ARGO Products, and to establish rules for proper compensation of the developing party for usage and/or licensing of any invention, know-how and improvement created by such party in the course of joint development. + + (f) To discuss the potential for licensed manufacturing of ARGO's Products by YEC. + + (g) To discuss the potential for quality improvements of ARGO's Products by applying YEC's know-how and expertise in the field ofmotion control and robotics. + + 5. TERM + +This Agreement will be effective as of the Effective Date. Unless sooner terminated in accordance with the provisions hereof, the initial term of this Agreement ("Initial Term") will be ten (10) years from the Effective Date, provided that at any time following the 7th anniversary of such date, either party may terminate such strategic alliance upon not less than 60 days' prior written notice to the other party. After the Initial Term, this Agreement may only be renewed if authorized officers of ARGO and YEC agree in writing at least thirty (30) days before the expiration of the Initial Term or any renewal term to a renewal, including the period of the renewal term. "Term" means the Initial Term and any such renewal term. The parties may terminate this Agreement during the Term as follows: + + + +(a) Termination by either party. Either party may terminate this Agreement by giving written notice of termination to the other party, which termination will be effective immediately upon such notice, if the other party defaults in the performance of any of its material obligations provided for in this Agreement and fails to cure such default within sixty (60) days after receipt of notice from the other party of such default, unless a plan for remedying such default has been proposed by the defaulting party and accepted by the non- defaulting party within such period. + + (b) Termination by both parties. ARGO and YEC may terminate this Agreement at any point provided that both parties agree in writingto such a termination. + + + + + +6. COORDINATION + +A contact person for each party will coordinate the efforts of that party under this agreement. The initial contact person for each party is as follows: Yaskawa Electric Corporation Argo Medical Technologies Ltd. + +Kei Shimizu Larry Jasinski 806-0004 33 Locke Drive, 2nd Floor 2-1 Kurosakishiroishi, Yahatanishi-ku c/o Argo Medical Technologies, Inc Kitakyushu, Fukuoka, 806-0004 Marlborough, MA 01752 Tel: +81 93 645 8949 USA Fax: +81 93 645 8948 Tel: +1 (508)251-1154 E-mail: shimizu@yaskawa.co.jp Fax: +1 (508)251-2970 E-mail: larry.jasinski@rewalk.com + +A party's contact person may be changed at any time by giving notice of the change to the other party. The notice must include the name and contact information for the new contact person. The contact person for each party must be available at reasonable times and on reasonable notice to meet with, converse with, or otherwise communicate with the contact person for the other party regarding issues arising under this agreement. + + 7. RELATIONSHIP OF PARTIES + +Nothing herein contained shall be construed to imply a joint venture, partnership or principal-agent relationship between YEC and ARGO, and neither party shall have the right, power or authority to obligate or bind the other in any manner whatsoever, except as otherwise agreed in writing. During the performance of any of the collaborative efforts set forth in this Agreement, ARGO's employees will not be considered employees of YEC, and vice versa. + + 8. INTELLECTUAL PROPERTY; CO-DEVELOPMENT, IMPROVEMENT, MODIFICATION + +This agreement does not give either party any rights, title or interest in the other party's trade name, trademarks, copyrights, patents, trade secrets, know-how, proprietary data, confidential information, or other intellectual property (hereinafter collectively "Intellectual Property"). Except as expressly stipulated in this Agreement, each party shall not without any prior written consent, use, copy, modify or license the other party's Intellectual Properties supplied pursuant to this Agreement. Unless otherwise agreed between the parties or stipulated in a separate related agreement such as the SPA or DA, each party confirms and agrees that any Intellectual Properties are hereby supplied to the other party on an "as is" basis. There are no warranties by either party with respect to such Intellectual Properties, express or implied including the implied warranties of merchantability, fitness for a particular purpose and non-infringement. In the event that the parties mutually agree to explore jointly in any manner, design and/or develop new products or improve or modify ARGO's current products, the parties will negotiate, in good faith, in an attempt to conclude one or more appropriate license agreements prior to either party's use of the Intellectual Property of the other. + + + + + +9. CONFIDENTIAL INFORMATION + +On or prior to the execution of this Agreement, both parties shall sign a new Confidentiality and Non-Disclosure Agreement (hereinafter the "New NDA") and both parties shall comply with any terms and conditions stipulated in the New NDA with respect to handling of any confidential information disclosed by the other party hereunder. + + 10. NON-SOLICITATION OF PERSONNEL + +During the performance of the any of the collaborative efforts set forth in this Agreement, each of ARGO and YEC agrees not to engage in any attempt whatsoever to hire, or to engage as independent contractors, the other's employees or independent contractors during the term of the collaboration and for a period of twelve (12) months following expiration or termination of the collaboration, except as may be mutually agreed in writing. + + 11. REMEDIES + +Each of the parties agrees that money damages will not be a sufficient remedy for any breach of the above agreement relating to non- solicitation of personnel. Accordingly, a party will be entitled to specific performance and injunctive or other equitable relief as a remedy for any such breach, and the parties each further agree to waive any requirement for the securing or posting of any bond in connection with such remedy. + + 12. MISCELLANEOUS PROVISIONS + + 12.1. Assignment + +Neither this Agreement nor any part of this Agreement may be assigned or transferred by either party without the prior written consent of the other party. Any assignment or transfer without such consent shall be null and void. + + 12.2. Notice + +All notices or other communications required or desired to be sent to either of the parties will be invalid, unless made in writing and sent by registered or certified mail, postage prepaid, return receipt requested, or sent by recognized international courier service (e.g., Federal Express, DHL, etc.) with charges prepaid, or by facsimile or electronic mail which is subject to confirmation by letter. The address for all notices or other communications required to be sent to ARGO or YEC will be the mailing address stated on the signature page to this Agreement, or such other address as may be provided from one party to the other on at least ten (10) days prior written notice. Any such notice will be effective upon the date of receipt. + + + + + + 12.3. Litigation Expense + +If there is a default under this agreement, the defaulting party must reimburse the non-defaulting party for all costs and expenses reasonably incurred by the non-defaulting party in connection with the default, including attorney's fees. Additionally, if a suit or action is filed to enforce this agreement or with respect to this Agreement, the prevailing party is entitled to reimbursement from the other party for all costs and expenses incurred in connection with the suit or action, including reasonable attorney's fees at the trial level and on appeal. + + 12.4. Waiver + +No waiver of any provision of this Agreement may be deemed, or will constitute, a waiver or any other provision, whether or not similar, not will any waiver constitute a continuing waiver. No waiver will be binding unless executed in writing by the party making the waiver. + + 12.5. Applicable Law + +This agreement will be governed by and must be construed in accordance with the laws of the State of Israel. All disputes arising pursuant to this Agreement shall be exclusively brought in the courts of competent jurisdiction residing in Tel Aviv, Israel. + + 12.6. Entire Agreement + +This Agreement constitutes the entire agreement between the parties with regard to the matters contained herein, and may not be amended except in a writing signed by both parties. + + 12.7. Severability + +Immediately upon the execution by the parties of this Agreement, the Confidentiality and Non-Disclosure Agreement of August 25TH, 2011 by and between the parties and the Letter as of July 5t h, 2013 shall be terminated by mutual consent of the parties hereto, and become null and void. Notwithstanding the foregoing, should this Agreement be terminated or proven to be invalid, such termination or invalidation will in no way affect, impair or invalidate any other related agreement including the SPA, DA and/or the New NDA, which will be in full force and effect. In addition, any amendment, invalidity or termination of the SPA, DA and/or the New NDA respectively or divestiture of Series D-1 Convertible Preferred Shares of ARGO by YEC will not in any way affect, impair or invalidate this Agreement. + + 12.8. Counterparts of the Agreement + +This Agreement has been executed in two (2) identical copies, one (1) for each party. + + + + + +ARGO MEDICAL TECHNOLOGIES LTD. YASKAWA ELECTRIC CORPORATION \ No newline at end of file diff --git a/full_contract_txt/RISEEDUCATIONCAYMANLTD_04_17_2020-EX-4.23-SERVICE AGREEMENT.txt b/full_contract_txt/RISEEDUCATIONCAYMANLTD_04_17_2020-EX-4.23-SERVICE AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..40542e007ab447b2c7dd0298f8fb4725b6b15e11 --- /dev/null +++ b/full_contract_txt/RISEEDUCATIONCAYMANLTD_04_17_2020-EX-4.23-SERVICE AGREEMENT.txt @@ -0,0 +1,161 @@ +Exhibit 4.23 + +Rise Education Group + +SERVICE AGREEMENT + +This Service Agreement (this "Agreement") is entered into as of [Date] in Beijing, China, by and between: + +Party A: Rise (Tianjin) Education Information Consulting Co., Ltd. ("Service Provider") + +Address: Room C209, C210, C213, C214, C217 and C218, 2/F, Building 1, No. 8 Huanhe West Road, Airport Economic Zone, Tianjin, China + +Party B: [•] ("Service Recipient") + +Address: [•] + +Whereas: 1. Service Provider is a company with adequate financial and other resources in the field of English teaching and training for children, capable of providing valuable and sophisticated educational services solutions to educational institutions and teachers; 2. Service Recipient engages in the field of English teaching and training for children. Service Recipient agrees to accept Service Provider's services as specified in this Agreement and utilize Service Provider's resources to provide services to relevant education and training institutions. + +This Agreement is entered into by and between Service Provider and Service Recipient (each a "Party" and collectively, the "Parties") upon mutual consultation to promote the development of education and training and cultivate talents for the society. 1. Scope of Services + +Service Provider shall provide the following operation support services (the "Services") to Service Recipient: (1) Academic Support Services + +Service Provider, having a dedicated team for research and development in courses and teaching methods, will provide Service Recipient with customized academic supports, including those in respect of teaching skills, operation guidance for teachers, codes of conduct and staff training, to meet the needs of Service Recipient for academic support in its operations. 1 + + + + + +Rise Education Group (2) Enrollment Support Services + +Service Provider, having a dedicated student enrollment support team, will provide Service Recipient with customized student enrollment support services, including recommending Service Recipient's courses to potential users, through the internet, WeChat, offline activities and other methods, to meet the needs of Service Recipient for student enrollment support in its operations and promote student enrollments with Service Recipient. (3) [Human Resources Support Services + +Service Provider, having a dedicated human resources support team, will provide Service Recipient with customized human resources support services, including but not limited to those in connection with staff recruitment, onboarding, probation, job transfers, departure, social security and provident funds, to meet the needs of Service Recipient for human resources support in its operations.] (4) [Financial Management Support Services + +Service Provider, having a dedicated financial management support team, will provide Service Recipient with customized financial management support services, including but not limited to consulting services relating to accounting management, cash flow management, financial analysis and financial budgeting, to meet the needs of Service Recipient for financial management support in its operations.] (5) [Legal Support Services + +Service Provider, having a dedicated legal support team, will provide Service Recipient with customized legal support services, including but not limited to those relating to the management of legal and regulatory matters, contract review, dispute resolution, litigation and arbitration proceedings, and acquisition and merger transactions, to meet the needs of Service Recipient for legal support in its operations.] (6) Customer Support Services + +Service Provider, having a dedicated team operating a national customer service center, will provide Service Recipient with customized customer support services, including but not limited to answering customers' incoming calls, following up on customers' telephone inquiries, arranging return visits, inviting customers to trial courses, assisting on handling customers' complaints and conducting ad hoc customer satisfaction surveys, to meet the needs of Service Recipient for customer support services in its operations. (7) [Internet Technology Support Services + +Service Provider, having a dedicated internet technology support team, will provide Service Recipient with customized internet technology support services, including but not limited to network engineering services and cybersecurity support services, to meet the needs of Service Recipient for internet technology support in its operations.] (8) [Administrative Support Services + +Service Provider, having a dedicated administrative support team, will provide Service Recipient with customized administrative support services, including but not limited to centralized procurement services and inventory management services, to meet the needs of Service Recipient for administrative support in its operations.] 2 + + + + + +Rise Education Group 2. Non-exclusivity + +The provision of the Services under this Agreement is non-exclusive. Service Provider may use the Services by itself or provide similar services to any other third party within the area where Service Recipient operates or other areas. 3. Assignment + +Unless otherwise provided herein, Service Recipient shall not assign or transfer any rights or obligations hereunder to any third party without the prior written consent of Service Provider. Service Provider may assign or transfer its rights and obligations hereunder to any third party in connection with, among other things, equity restructuring or business restructuring, without the consent of Service Recipient. 4. Service Fee + +Service Recipient shall pay Service Provider the [service fees]/ [commissions and service fees] ([collectively,] "Service Fee") (inclusive of all applicable taxes) in accordance with Schedule 1 for the Services provided by Service Provider. + +[To facilitate the operation of Service Recipient, in the event that Service Recipient incurs losses, Service Provider may agree to waive the obligations of Service Recipient to pay Service Fee to Service Provider.] 5. Payment Methods + +Service Recipient shall make the payment of Service Fee through bank remittance or other payment methods to the following account designated by Service Provider: + +Account Name: Rise (Tianjin) Education Information Consulting Co., Ltd. + +Account Bank: Bank of China (Tianjin Ronghe Square Sub-branch) + +Account Number: 272672784101 6. Intellectual Property + +All the legal rights in respect of the Services shall be owned by Service Provider. Service Recipient does not obtain any intellectual property rights in respect of the Services by entering into this Agreement. All the intellectual property rights created or derived from the provision of the Services, including but without limitation, copyrights, patents, patent applications, trademarks, trademark applications, software, know-how, technology data and commercial secrets, regardless of whether being developed or created by Service Provider or Service Recipient, shall be exclusively and solely owned by Service Provider. 3 + + + + + +Rise Education Group 7. Representations and Warranties (1) Service Provider hereby represents and warrants to Service Recipient as follows: (a) Service Provider is a limited liability company duly organized and existing under the laws of China. (b) Service Provider has legal rights to execute and perform this Agreement. The execution and performance of this Agreement does not contravene the articles of association or other constitutional documents of Service Provider. Service Provider has obtained all necessary and appropriate approvals and authorizations to execute and perform this Agreement. (c) The execution and performance of this Agreement by Service Provider will not violate any provisions of laws and regulations, governmental approvals, authorizations, notifications, or any other regulatory documents binding or affecting Service Provider, and will not violate any of its agreements with, or commitments to, any third party. (d) This Agreement constitutes legal, valid and enforceable obligations of Service Provider. (2) Service Recipient hereby represents and warrants to Service Provider as follows: (a) Service Recipient is a [private non-enterprise entity]/ [limited liability company] duly organized and existing under the laws of China. (b) Service Recipient has legal rights to execute and perform this Agreement. The execution and performance of this Agreement does not contravene the articles of association or other constitutional documents of Service Recipient. Service Recipient has obtained all necessary and appropriate approvals and authorizations to execute and perform this Agreement. (c) The execution and performance of this Agreement by Service Recipient will not violate any provisions of laws and regulations, governmental approvals, authorizations, notifications, or any other regulatory documents binding or affecting Service Recipient, and will not violate any of its agreements with, or commitments to, any third party. (d) This Agreement constitutes legal, valid and enforceable obligations of Service Recipient. 8. Confidentiality + +The Parties covenant and confirm that any verbal communications, written documents or electronic information (including but not limited to software codes and any contents contained in the software) relating to this Agreement between the Parties shall be confidential information. Neither Party may disclose any confidential information of the other Party without prior written consent from the other Party, except that: (1) relevant information has been made public not as a result of any fault or disclosure by the information recipient; (2) such disclosure is required under applicable laws or regulations or rules of securities exchanges. Any employees of one Party disclosing any confidential information shall be deemed as the Party disclosing confidential information and such Party shall be liable therefor under this Agreement. This clause shall survive the termination of this Agreement. 4 + + + + + +Rise Education Group 9. Events of Default + +Failure by a Party to perform its obligations under this Agreement or any non-compliance of its performance of obligations with this Agreement or any of its representations and warranties under this Agreement being materially untrue or inaccurate shall constitute an event of default. The defaulting Party shall indemnify the non-defaulting Party for all the direct and indirect losses arising from its default. + +Notwithstanding the foregoing, upon any delay by Service Recipient in its payment of any Service Fee to Service Provider, for each day of delay in such payment, Service Recipient must pay Service Provider liquidated damages at 0.5 percent (0.5%) of the Service Fee that are due and unpaid. In the event that such delay in payment is more than fifteen (15) days, Service Provider may terminate this Agreement. Service Recipient shall be liable for indemnifying Service Provider in full for the losses it incurred therefrom. + +Either Party's failure to exercise the right to claim liquidated damages or indemnification for losses against the other Party shall not be deemed as a waiver of such right. 10. Termination + +This Agreement shall be terminated upon the occurrence of any of the following: (1) The validity period of this Agreement expires and the Parties fail to reach an agreement on renewal; (2) The Parties mutually agree to terminate this Agreement; or (3) Service Provider exercises the right to terminate this Agreement upon a default by Service Recipient. + +If this Agreement is terminated by Service Provider upon a default by Service Recipient, Service Provider will not refund the prepaid Service Fee to Service Recipient. 11. Notice + +Any written notice sent by registered or express mail shall be deemed being delivered three (3) business days after the date on which the mail is dispatched (evidenced by the postmark) unless the address on the mailing slip is different from the address specified in this Agreement. Any written notice sent by facsimile shall be deemed being delivered when the receipt is confirmed. + +In addition, Service Provider may send any notice by email to the email address provided by Service Recipient in this Agreement, and the notice shall be deemed as being delivered when such email is successfully sent. 5 + + + + + +Rise Education Group The address of each Party for notice purposes shall be as follows: + +Service Provider: Rise (Tianjin) Education Information Consulting Co., Ltd. + +Mailing address: Room C209, C210, C213, C214, C217 and C218, 2/F, Building 1, No.8 Huanhe West Road, Airport Economic Zone, Tianjin, China + +Attention: SUN Yiding + +Service Provider: [•] + +Mailing address: [•] + +Attention: [•] 12. Dispute Resolution and Governing Law + +The Parties shall seek to resolve all the disputes arising from or in connection with this Agreement through friendly consultation. In the event that any dispute cannot be resolved through such consultation, such dispute shall be submitted to the Beijing Arbitration Commission ("BAC") for arbitration pursuant to the then effective arbitration procedures and rules of BAC. The arbitral award shall be final and binding upon the Parties. 13. Renewal + +This Agreement shall be effective as of the date set forth above in this Agreement. The term of this Agreement shall be five (5) years. This Agreement shall be renewed automatically for another five (5) years upon the expiration unless the Parties confirm, in writing, the termination of this Agreement. 14. Miscellaneous (1) [This Agreement shall supersede other service agreements previously entered into by both Parties. In case of any conflicts in any terms and conditions or any dispute on the interpretation, application or implementation of this Agreement, this Agreement shall prevail. Any amendment to this Agreement shall be in writing and executed by both Parties hereto.] (2) This Agreement is executed in two (2) original copies and each Party shall hold one original copy. Both original copies shall have the same legal effect. (3) This Agreement shall become effective upon being affixed with both Parties' official seals. + +[The remainder of this page is left blank] 6 + + + + + +Rise Education Group IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed Rise (Tianjin) Education Information Consulting Co., Ltd. + +(Corporate Seal) + +Date: + +[•] + +(Seal) + +Date: 7 + + + + + +Rise Education Group SCHEDULE 1 + +Service Fees + +During the term of this Agreement, Service Recipient shall pay to Service Provider the Service Fee on a quarterly basis. The amount of the Service Fee shall be [determined on the basis of the actual costs incurred by Service Provider in connection with its provision of the services, plus a mark-up at a percentage as agreed upon between both Parties, to be allocated to Service Recipient and other service recipients in proportion to their respective revenues] / [computed at a percentage (as agreed upon between both Parties) of Service Recipient's revenues] and confirmed by a letter of confirmation substantially in the form attached hereto. + +Service Fee shall be paid after each quarter. Service Recipient shall pay the Service Fee for the preceding quarter in accordance with a written payment instruction of Service Provider during each quarter. 8 + + + + + +Rise Education Group Annex 1 - Form of the Letter of Confirmation on the Amount of Service Fee + +Letter of Confirmation on the Amount of Service Fee + +Reference is made to the Service Agreement (the "Agreement"), dated as of [Date], by and between Rise (Tianjin) Education Information Consulting Co., Ltd. ("Service Provider") and [•] ("Service Recipient"). Pursuant to Section 4 and Schedule 1 of the Agreement, Service Provider and Service Recipient agree that the amount of the Service Fee for the [•] quarter of 20[•] shall be [RMB [•] ([•][in letters]) in total]/[set at [•]% of the revenues booked by Service Recipient during the quarter, amounting to RMB [•] ([•][in letters])]. The above-referenced Service Fee shall be paid by Service Recipient to the account designated by Service Provider not later than [Date] in accordance with a written payment instruction of Service Provider. Rise (Tianjin) Education Information Consulting Co., Ltd. [•] + +(Corporate Seal) (Seal) + +[Date] 9 \ No newline at end of file diff --git a/full_contract_txt/RMRGROUPINC_01_22_2020-EX-99.1-JOINT FILING AGREEMENT.txt b/full_contract_txt/RMRGROUPINC_01_22_2020-EX-99.1-JOINT FILING AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..b3313f02f0375090d33c9aa2d362a61f42ca47a2 --- /dev/null +++ b/full_contract_txt/RMRGROUPINC_01_22_2020-EX-99.1-JOINT FILING AGREEMENT.txt @@ -0,0 +1 @@ +Exhibit 99.1 JOINT FILING AGREEMENT The undersigned hereby agree that the Schedule 13G/A with respect to the shares of Class A Common Stock, $0.001 par value per share, of The RMR Group Inc., dated as of December 31, 2019, is, and any amendments thereto (including amendments on Schedule 13D) signed by each of the undersigned shall be, filed on behalf of each of us pursuant to and in accordance with the provisions of Rule 13d-1(k) under the Securities Exchange Act of 1934, as amended. January 22, 2020 (Date) ABP TRUST /s/ Adam D. Portnoy (Signature) Adam D. Portnoy, President (Name/Title) ADAM D. PORTNOY /s/ Adam D. Portnoy (Signature) 10 \ No newline at end of file diff --git a/full_contract_txt/ROCKYMOUNTAINCHOCOLATEFACTORY,INC_12_23_2019-EX-10.2-STRATEGIC ALLIANCE AGREEMENT.txt b/full_contract_txt/ROCKYMOUNTAINCHOCOLATEFACTORY,INC_12_23_2019-EX-10.2-STRATEGIC ALLIANCE AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..d16790c62ab5b4ad7aab9cc24f849e63a4552cfd --- /dev/null +++ b/full_contract_txt/ROCKYMOUNTAINCHOCOLATEFACTORY,INC_12_23_2019-EX-10.2-STRATEGIC ALLIANCE AGREEMENT.txt @@ -0,0 +1,235 @@ +Exhibit 10.2 PORTIONS OF THIS EXHIBIT MARKED BY [**] HAVE BEEN OMITTED PURSUANT TO RULE 601(B)(10) OF REGULATION S-K. THE OMITTED INFORMATION IS (I) NOT MATERIAL AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM TO THE REGISTRANT IF PUBLICLY DISCLOSED. EXECUTION VERSION STRATEGIC ALLIANCE AGREEMENT STRATEGIC ALLIANCE AGREEMENT, dated as of December 20, 2019 (as amended, supplemented or otherwise modified from time to time, this "Agreement"), by and among Farids & Co. LLC, a Delaware limited liability company ("Farids"), Edible Arrangements, LLC, a Delaware limited liability company ("EA"), and Rocky Mountain Chocolate Factory, Inc., a Delaware corporation (the "Company"). W I T N E S S E T H: WHEREAS, the Company is an international franchisor, confectionery manufacturer and retail operator; WHEREAS, Farids is a holding company and, together with TF (as defined below), indirectly controls EA; WHEREAS, EA is a US-based franchisor that specializes in fresh fruit arrangements and specialty fruit gift items; WHEREAS, the Company desires to issue and sell, and Farids desires to purchase, 126,839 shares (the "Purchased Shares") of the Company's common stock, $0.001 par value per share (the "Common Stock"), on the terms set forth herein; WHEREAS, substantially concurrently with the execution and delivery of this Agreement, the Company and EA shall execute and deliver the Warrant (as defined below); WHEREAS, substantially concurrently with the execution and delivery of this Agreement, the Company and EA shall execute and deliver the Exclusive Supplier Operating Agreement (as defined below); and WHEREAS, in connection with the foregoing, the Company, Farids and EA agree and acknowledge that the cooperation between the Company and EA is an important component to achieve their respective strategic objectives, and they desire to continue and further enhance the strategic cooperation alliance between them as contemplated under this Agreement. NOW THEREFORE, in consideration of the foregoing and the mutual representations, warranties, covenants and agreements herein contained, and intending to be legally bound hereby, the parties hereto agree as follows: ARTICLE I DEFINITIONS Section 1.1 Defined Terms. (a) "144 Sale" means (i) a Transfer of Shares (including in any broker assisted cashless exercise) pursuant to Rule 144 under the Securities Act and (ii) for purposes of Article VII only, any Transfer of Shares pursuant to a Resale Shelf Registration Statement. + + + + + +(b) "Affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, "control" (including, with correlative meanings, the terms "controlling," "controlled by" and "under common control with"), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise. (c) "Amendment" means the Amendment, dated the date hereof, to the Rights Agreement by and between the Company and Computershare Trust Company, N.A., as Rights Agent, attached as Exhibit E hereto. (d) "Board of Directors" means the Board of Directors of the Company. (e) "Bylaws" means the Second Amended and Restated Bylaws of the Company, as in effect as of the date hereof. (f) "Certificate of Incorporation" means the Company's Amended and Restated Certificate of Incorporation, as amended, as in effect as of the date hereof. (g) "Change in Control" means the occurrence of any of the following: (i) the sale, lease or transfer, in one or a series of related transactions, of all or substantially all of the assets of the Company to any Person other than a Permitted Holder; or (ii) at any time, the Company becomes aware of (by way of a report or any other filing pursuant to Section 13(d) of the Exchange Act, proxy, vote, written notice or otherwise) the acquisition by any Person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision), other than the Permitted Holders, in a single transaction or in a related series of transactions, by way of merger, consolidation or other business combination or purchase of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act, or any successor provision) of 50% or more of the total voting power of the Voting Stock of the Company. (h) "Eligible Registration Statement" means any registration statement (other than (i) a registration statement on Form S-4 or Form S-8 or any similar or successor form or (ii) with respect to any corporate reorganization or transaction under Rule 145 of the Securities Act or other business combination or acquisition transaction, any registration statement related to the issuance or resale of securities issued in such a transaction) filed by the Company under the Securities Act in connection with any primary or secondary offering of Common Stock for the account of the Company and/or any shareholder of the Company, whether or not through the exercise of any registration rights. (i) "Exchange Act" means the Securities Exchange Act of 1934, as amended. 2 + + + + + +(j) "Exclusive Supplier Operating Agreement" means the Exclusive Supplier Operating Agreement, dated as of the date hereof, by and between EA and the Company, attached as Exhibit B hereto. (k) "Family Member" means, with respect to any natural person, (i) any child, stepchild, grandchild or more remote issue, parent, stepparent, grandparent, spouse, domestic partner, sibling, child of sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, sister-in-law, cousin and adoptive relationships (each, a "family member") or estate of such family member or (ii) any foundation, trust, family limited partnership, family limited liability company or other entity created and used for estate planning purposes, so long as any such foundation, trust, family limited partnership, family limited liability company or other entity is controlled by, for the benefit of, or owned by such natural person or one or more persons described in clause (i) (such entities referred to in this clause (ii), the "Permitted Estate Vehicles"). (l) "Farids Group" means Farids, EA and each and every Farids Transferee. Unless the Company is otherwise notified in writing by Farids or EA, TF shall at all times serve as the designated representative to act on behalf of the Farids Group for purposes of this Agreement and shall have the sole power and authority to bind the Farids Group with respect to all provisions of this Agreement; provided, however, that if TF ceases to serve as the designated representative of the Farids Group, then TF (or his designated legal representative in the case of his death or permanent disability) shall have the power to designate a new designated representative of the Farids Group, which designee (and any successor thereafter designated and appointed) shall have the sole power and authority to bind the Farids Group with respect to all provisions of this Agreement. The Company shall be entitled to rely on all actions taken by TF or such designee on behalf of the Farids Group. (m) "Farids Transferee" means each and every direct and indirect transferee of Farids (including transferees of Shares from any member of the Farids Group so long as such Shares were originally held by the Farids Group) pursuant to Transfer set forth in clause (i) or (ii) of the definition of Permitted Transfer. (n) "FINRA" means the Financial Industry Regulatory Authority, Inc. (o) "GAAP" means U.S. generally accepted accounting principles. (p) "Holder" means any Person owning of record Common Stock or any security convertible into or exercisable or exchangeable for, with or without consideration, any Common Stock. (q) "Indemnification Agreement" means the Indemnification Agreement, dated as of the date hereof, by and between the Company and TF, attached as Exhibit D hereto. (r) "Investors" means (i) Farids, (ii) EA and (iii) TF and his Family Members. (s) "Law" means any domestic or foreign, U.S. Federal, state, municipality or local law, statute, ordinance, code, rule, or regulation or common law. 3 + + + + + +(t) "Lien" means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset, including any agreement to give any of the foregoing. (u) "Lock-Up Securities" means (i) any Common Stock or Preferred Stock of the Company, (ii) any security convertible into or exercisable or exchangeable for, with or without consideration, any Common Stock or Preferred Stock of the Company (including any option to purchase such a security), (iii) any security carrying any option, warrant or right to subscribe to or purchase any Common Stock or Preferred Stock of the Company or other security referred to in clause (ii), or (iv) any such option, warrant or right. (v) "Nasdaq" means The Nasdaq Stock Market LLC. (w) "Order" means any decree, order, judgment, writ, award, injunction, rule or consent of or by a Governmental Entity. (x) "Permitted Holders" means each of (i) the Investors and their respective Affiliates and members of management of the Company and (ii) any group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act or any successor provision) of which any of the foregoing are members; provided that in the case of such group, without giving effect to such group, Persons specified in clause (i) must collectively beneficially own a majority of the total voting power of the Voting Stock of the Company beneficially owned by such group. (y) "Permitted Transfer" means (i) any Transfer to one or more entities that are, directly or indirectly, wholly owned by Farids or any Family Member of TF, (ii) any Transfer to one or more entities that are members of the Farids Group and (iii) Transfer made following a Change in Control of Farids or EA or made pursuant to a Change in Control that constitutes a sale of the Company as a whole; provided, with respect to each of clause (i)-(iii), so long as the transferee (other than a transferee that already is party to this Agreement) agrees to be subject to the terms of this Agreement (subject to any limitation on the assignment of rights by such Person to the transferee in connection with such Transfer) by executing and delivering a joinder agreement, substantially in the form of Exhibit A hereto. (z) "Person" means an individual, partnership, corporation, limited liability company, unincorporated organization, trust, joint venture, government agency, or other entity. (aa) "Prospectus" means the prospectus included in the Eligible Registration Statement, including any form of prospectus or any preliminary prospectus, as amended or supplemented by any prospectus supplement and by all other amendments or supplements to such prospectus, including all post-effective amendments and all material, if any, incorporated by reference or deemed to be incorporated by reference into such prospectus. (bb) "Registrable Securities" means all Purchased Shares and Warrant Shares and any securities into which Common Stock may be converted or exchanged pursuant to any merger, consolidation, sale of all or any part of the Company's assets, corporate conversion or other extraordinary transaction of the Company held by the Farids Group, other than any Common Stock or securities into which Common Stock may be converted or exchanged that (i) have been sold by the Farids Group to the public either pursuant to a registration statement or Rule 144 or another exemption from the registration requirements of the Securities Act, (ii) except in connection with a Demand Request by the Farids Group for a registration pursuant to a Resale Shelf Registration Statement, in the hands of the Farids Group is eligible to be resold pursuant to Rule 144 without any volume limitation or (iii) shall have ceased to be outstanding; provided, that when determining the amount of Registrable Securities, only the Purchased Shares, any Vested Warrant Shares and the remaining Warrant Shares eligible for vesting into Vested Warrant Shares shall be included in such calculation. 4 + + + + + +(cc) "Registration Expenses" means all expenses incurred by the Company in complying with Article VI hereof, including, without limitation, (i) all SEC and other registration and filing fees (including, without limitation, fees and expenses with respect to (A) filings required to be made with FINRA and (B) securities or "blue sky" laws, including, without limitation, any fees and disbursements of counsel for the underwriters in connection with any filing and application made to or with (and clearance by) FINRA and any "blue sky" qualifications of the Registrable Securities pursuant to Section 6.6(d)), (ii) preparation, printing, messenger and delivery expenses, (iii) fees and disbursements of counsel for the Company, (iv) fees and disbursements of independent certified public accountants and any other persons, including special experts retained by the Company, (v) expenses related to any special audits incident to or required by any such registration, in each case, whether or not any Eligible Registration Statement is filed or becomes effective, (vi) all fees and expenses related to the listing of the Registrable Securities on any securities exchange, (vii) all internal expenses of the Company, including the compensation of officers and employees of the Company and the fees and expenses in connection with any annual audit and (viii) the fees and expenses of one counsel for the Farids Group in connection with the review of any registration statement, not to exceed $10,000 for each registration. For the avoidance of doubt, any stamp, transfer or similar taxes or duties payable by the Farids Group in connection with any registration, sale or distribution of Registrable Securities shall be borne by the Farids Group and not by the Company. (dd) "Resale Shelf Registration Statement" means a "shelf" registration statement on Form S-3 pursuant to Rule 415 under the Securities Act; provided that any sales of securities thereunder will not (i) require a prospectus supplement, (ii) require any additional cooperation from the Company (except as set forth in Section 6.4(b)) or (iii) be made pursuant to an underwritten offering. (ee) "Rights Agreement" means the Rights Agreement dated March 1, 2015 between the Company and Computershare Trust Company, N.A., as Rights Agent. (ff) "SEC" or "Commission" means the Securities and Exchange Commission. (gg) "Securities Act" means the Securities Act of 1933, as amended. (hh) "Shares" means, collectively, the Purchased Shares or shares of Common Stock issued or issuable upon exercise of the Warrants. (ii) "Significant Block" means five percent (5%) or more of the Company's issued and outstanding Common Stock. 5 + + + + + +(jj) "Subsidiary" means, any Person of which at least a majority of the securities or ownership interests having by their terms ordinary voting power to elect a majority of the board of directors or other Persons performing similar functions is directly or indirectly owned or controlled by the Company or by one or more of its Subsidiaries. (kk) "TF" means Tariq Farid, an individual. (ll) "Threshold Block" means one percent (1%) or more of the Company's issued and outstanding Common Stock. (mm) "Transaction Documents" means, collectively, this Agreement, the Exclusive Supplier Operating Agreement, the Warrant, the Indemnification Agreement and the Amendment. (nn) "Transfer" means any sale, assignment, encumbrance, hypothecation, pledge, conveyance in trust, gift, transfer by request, devise or descent, entry into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership (whether to be settled by delivery of the Purchased Shares, in cash or otherwise) or other transfer or disposition of any kind, including, but not limited to, transfers to receivers, levying creditors, trustees or receivers in bankruptcy proceedings or general assignees for the benefit of creditors whether voluntary or by operation of law, directly or indirectly, of any Purchased Shares. (oo) "Vested Warrant Shares" means the shares of Common Stock into which the Warrant shall vest and for which the Warrant shall become exercisable. (pp) "Voting Stock" of the Company as of any date means the shares of capital stock of the Company that is at the time entitled to vote in the election of the Board of Directors of the Company. (qq) "Warrant" means the common stock purchase warrant, dated the date hereof, issued to the EA, providing for the purchase at a purchase price per share of $8.76 of up to 960,677 Warrant Shares, attached as Exhibit C hereto. (rr) "Warrant Shares" means the shares of Common Stock issuable upon exercise of the Warrant. ARTICLE II ISSUANCE OF THE PURCHASED SHARES Section 2.1 Share Purchase. Upon the terms and subject to the conditions set forth in this Agreement, Farids hereby agrees to purchase, and the Company hereby agrees to issue and sell to Farids, at the Closing (as defined below), the Purchased Shares (the "Share Purchase"), in consideration of the payment by Farids to the Company of $999,998.68 (the "Purchase Price") and Farids assistance in developing the strategic alliance contemplated hereby. The Purchase Price shall be paid by Farids by the Company by wire transfer of immediately available funds, to one or more bank accounts designated in writing by the Company, on the Closing Date (as defined below). 6 + + + + + +Section 2.2 Closing. The closing of the Share Purchase (the "Closing") shall take place at the offices of Perkins Coie LLP, 1900 Sixteenth Street Suite 1400, Denver, Colorado 80202, at 11:00 a.m. Mountain Time or before 90 days after the date hereof (such , the "Closing Date"). Section 2.3 Transactions to be Effected At or Prior to the Closing. At or prior to the Closing, the transactions below shall take place (except (i) to the extent such day is not a business day, (ii) the transactions set forth in clauses (a) through (e) below shall take place on or prior to the date hereof and (iii) the transactions set forth in clauses (f) through (h) shall take place as promptly as practicable on or after the date hereof, but in no event later than the Closing Date): (a) The Board of Directors shall have taken all necessary action related to the nomination of TF for election to the Board of Directors at the Company's annual meeting of stockholders to be held on January 9, 2020 (the "Annual Meeting"), provided that the mailing and filing of proxy materials reflecting the nomination of TF to the Board of Directors shall be completed no later than two (2) business days following the date hereof. (b) The Company and Farids shall execute and deliver this Agreement. (c) The Company and EA shall execute and deliver the Exclusive Supplier Operating Agreement and, in consideration of EA entering into the Exclusive Supplier Operating Agreement and the performance of EA's obligations therein, the Company shall issue the Warrant to EA. Each of the Exclusive Supplier Operating Agreement and the Warrant is effective as of the date hereof in accordance with the terms of such document. (d) The Company and TF shall execute and deliver the Indemnification Agreement. (e) The Company and Computershare Trust Company, N.A. shall execute and deliver the Amendment. (f) The Company shall receive the approval of Nasdaq with respect to the supplemental listing of the Purchased Shares and the reservation for issuance on the Nasdaq Global Market of the Warrant Shares. (g) The Company shall issue to Farids the Purchased Shares in electronic book-entry form. (h) The Company shall deliver to Farids the irrevocable letter of instructions addressed to the Company's transfer agent, relating to the issuance of the Purchased Shares. ARTICLE III REPRESENTATIONS AND WARRANTIES Section 3.1 Representations and Warranties of the Company. The Company represents and warrants to each of Farids and EA as of the date hereof and as of the Closing Date that: 7 + + + + + +(a) Existence and Power. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. The Company has all power and authority, corporate and otherwise, and all governmental licenses, franchises, permits, authorizations, consents and approvals required to own and operate its properties and assets and to carry on the business as presently conducted and as proposed to be conducted, except as would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the business, results of operations or financial condition of the Company and its Subsidiaries, taken as a whole (a "Company Material Adverse Effect"). (b) Capitalization. The authorized capital stock of the Company consists of (i) 46,000,000 shares of Common Stock and (ii) 250,000,000 shares of preferred stock, $0.001 par value per share (the "Preferred Stock"), of which 50,000 shares are designated as "Series A Junior Participating Preferred Stock". As of December 19, 2019, there were 6,004,229 shares of Common Stock issued and outstanding and no shares of Preferred Stock outstanding. As of December 19, 2019, no shares of Common Stock or Preferred Stock were reserved for issuance, except for an aggregate of 258,888 shares of Common Stock reserved for issuance upon the exercise of outstanding stock options and the settlement of restricted stock units issued under the Company's equity incentive plans and stock incentive plans. All of the issued and outstanding shares of Common Stock have been duly authorized and validly issued and are fully paid, nonassessable and free of preemptive rights. (c) Authority; Approvals. The Company has full corporate power and authority to execute and deliver each of the Transaction Documents to which it is a party and to consummate the transactions contemplated thereby. The execution and delivery of each of the Transaction Documents to which it is a party and the consummation by the Company of the transactions contemplated thereby, including, without limitation, the issuance of the Purchased Shares, the Warrant and the underlying Warrant Shares, have been duly and validly approved by all necessary corporate action of the Company, and no other corporate and no shareholder proceedings on the part of the Company are necessary to approve such Transaction Documents or to consummate the transactions contemplated thereby. The Board of Directors has taken all actions so that the restrictions contained in Section 203 of the Delaware General Corporation Law, as amended (the "DGCL"), applicable to a "business combination" (as defined in Section 203 of the DGCL) do not and will not apply to the execution, delivery or performance of any Transaction Document and the transactions contemplated hereby and thereby. Each of the Transaction Documents to which it is a party has been duly and validly executed and delivered by the Company and (assuming due execution and delivery by Farids and EA, as applicable) constitutes a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as enforcement may be limited by general principles of equity whether applied in a court of law or a court of equity and by bankruptcy, insolvency and similar laws affecting creditors' rights and remedies generally (collectively, the "Enforceability Exceptions"). (d) Non-Contravention. The execution, delivery and performance of the Transaction Documents to which it is a party, and the consummation by the Company of the transactions contemplated hereby and thereby, does not and will not (i) contravene or conflict with the Certificate of Incorporation or the Bylaws, (ii) contravene or conflict with or constitute a violation of any provision of any Law or Order binding upon the Company, (iii) constitute a default under or breach of (with or without the giving of notice or the passage of time or both) or violate or give rise to any right of termination, cancellation or acceleration of any material contract or other instrument or obligations binding upon the Company or by which any shares of the Common Stock or the Preferred Stock or any of the Company's assets is or may be bound or (iv) result in the creation or imposition of any Lien on any of the shares of Common Stock or Preferred Stock or any of the Company's assets. 8 + + + + + +(e) Consents and Approvals. Assuming the accuracy of the representations and warranties of each of Farids and EA as set forth in this Agreement and EA as set forth in the Exclusive Supplier Operating Agreement, as of the Closing Date, no consents or approvals of, or filings or registrations with, any federal, state or local court, governmental, legislative, judicial, administrative or regulatory authority, agency, commission, body or other governmental entity or self-regulatory organization (each, a "Governmental Entity") or of or with any other third party by or on behalf of the Company or any of its Subsidiaries are necessary for the execution and delivery by the Company of any Transaction Document to which it is a party and the consummation by the Company of the transactions contemplated thereby, except for (A) those already obtained or made, (B) the filing of any Eligible Registration Statement with the Commission pursuant to Article VI, (C) the supplemental listing application to Nasdaq with respect to the supplemental listing of the Purchased Shares and the reservation for issuance on the Nasdaq Global Market of the Warrant Shares and (D) any securities or "blue sky" filings of any state. The transactions contemplated by the Transaction Documents do not require the consent or approval by the holders of a majority of the outstanding shares of Common Stock pursuant to Nasdaq Listing Rule 5635. (f) Valid Issuance of Purchased Shares. As of the Purchase Date, the Purchased Shares shall be, and the Warrant Shares, when issued and delivered to EA in accordance with the terms of the Warrant will be, validly issued, fully paid, non-assessable and free of preemptive rights and will be delivered free and clear of all Liens. Except for the transactions contemplated in the Transaction Documents, the issuance and delivery of the Purchased Shares and the Warrant does and will not cause the vesting of any securities of the Company to accelerate, or trigger or create in any Person the right to acquire, purchase, exercise, exchange or convert any securities of the Company into Common Stock. (g) SEC Filings; Financial Statements. All forms, reports, schedules, statements and documents required to be filed with the SEC by the Company (including all exhibits included therein and financial statements, notes and schedules thereto and documents incorporated by reference therein, the "SEC Reports") during the twelve (12) months prior to the date hereof were prepared in accordance and complied as of their respective filing dates, in all material respects, with the requirements of the Securities Act and Exchange Act and the rules promulgated thereunder and did not at the time they were filed (or if amended or superseded by a later filing prior to the date hereof, then on the date of such later filing) contain any untrue statement of material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. Except as otherwise disclosed in an SEC Report, each of the audited and unaudited consolidated financial statements (including, in each case, any related notes and schedules thereto) contained in the SEC Reports (or if amended or superseded by a later filing prior to the date hereof, then on the date of such later filing) (i) complied in all material respects with applicable accounting requirements and the published regulations of the SEC with respect thereto, (ii) were prepared in accordance with GAAP (except, in the case of unaudited financial statements, to the extent otherwise permitted by the rules and regulations of the SEC) applied on a consistent basis throughout the periods involved (except as may be indicated therein or as described in the notes thereto) and (iii) fairly present in all material respects the financial position of the Company as of the respective dates thereof and the consolidated results of operations and cash flows for the periods indicated (subject in the case of unaudited financial statements to normal year-end adjustments and to any other adjustments described therein, including the notes thereto). Other that certain non-recurring expenses, no material adverse changes have occurred in the financial condition or business of the Company since the date of the most recent financial statement included in the SEC reports. 9 + + + + + +(h) Application to Takeover Protections. The Company and its Board of Directors have taken all necessary action, if any, in order to render inapplicable any control share acquisition, fair price, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the Certificate of Incorporation, the Bylaws or the laws of its jurisdiction of incorporation that is or could become applicable to the Farids Group or any Person in the Farids Group as a result of Farids, EA and the Company fulfilling their obligations or exercising their rights under the Transaction Documents, including without limitation as a result of the Company's issuance of the Purchased Shares, the Warrants and the underlying Warrant Shares and the ownership of such securities by the Farids Group or any Person in the Farids Group. Section 3.2 Representations and Warranties of Farids and EA. Each of Farids and EA, severally with respect to itself and not jointly, hereby represents and warrants to the Company, as of the date hereof and as of the Closing Date that: (a) Existence and Power. Farids is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware. Farids has all power and authority, limited liability company and otherwise, and all governmental licenses, franchises, permits, authorizations, consents and approvals required to own and operate its properties and assets and to carry on the business as presently conducted and as proposed to be conducted, except as would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the business, results of operations or financial condition of Farids and its subsidiaries, taken as a whole. EA is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware. EA has all power and authority, limited liability company and otherwise, and all governmental licenses, franchises, permits, authorizations, consents and approvals required to own and operate its properties and assets and to carry on the business as presently conducted and as proposed to be conducted, except as would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the business, results of operations or financial condition of EA and its subsidiaries, taken as a whole. (b) Authorization; Approvals. Each of Farids and EA has full power and authority to execute and deliver each of the Transaction Documents to which it is party, as applicable, and to consummate the transactions contemplated thereby and the consummation by Farids and EA of the transactions contemplated thereby have been duly and validly approved by all necessary limited liability company action of each of Farids and EA, and no other limited liability company and no member proceedings on the part of either Farids or EA are necessary to approve such Transaction Documents or to consummate the transactions contemplated thereby. Each of the Transaction Documents that has been executed and delivered by Farids or EA (assuming due authorization, execution and delivery by the Company), as applicable, constitutes a valid and binding obligation of Farids or EA, as applicable, enforceable against Farids or EA, as applicable, in accordance with its terms, subject to Enforceability Exceptions. 10 + + + + + +(c) Non-Contravention. The execution, delivery and performance of the Transaction Documents and the consummation by Farids and EA of the transactions contemplated hereby and thereby, does not and will not (i) contravene or conflict with (A) Farids' certificate of formation or operating agreement or (B) EA's certificate of formation or operating agreement, (ii) contravene or conflict with or constitute a violation of any provision of any Law or Order binding upon EA or Farids, (iii) constitute a default under or breach of (with or without the giving of notice or the passage of time or both) or violate or give rise to any right of termination, cancellation or acceleration of any material contract or other instrument or obligations binding upon Farids or by which any shares of the capital stock of Farids or EA or EA or any of Farids' or EA's assets is or may be bound or (iv) result in the creation or imposition of any Lien on any of the shares of capital stock of Farids or EA any of Farids' or EA's assets. (d) Consents and Approvals. Assuming the accuracy of the representations and warranties of the Company as set forth in this Agreement and the Exclusive Supplier Operating Agreement, as of the Closing Date, no consents or approvals of, or filings or registrations with, any Governmental Entity or of or with any other third party by or on behalf of Farids or EA is necessary for the execution and delivery by Farids and EA, as applicable, of the Transaction Documents and the consummation by Farids and EA, as applicable, of the transactions contemplated thereby. (e) Ownership of the Company; Control of EA. Except for the transactions contemplated in the Transaction Documents, none of Farids or any of its Affiliates holds or has any rights to acquire, whether directly or indirectly, any Common Stock or any other voting or equity securities of the Company, or any securities convertible into, exchangeable for or exercisable for Common Stock or any other voting or equity securities of the Company. EA is controlled by Farids. (f) Accredited Investor; Experience. Farids is an "accredited investor" (as defined in Rule 501 under the Securities Act) and is capable of evaluating the merits and risks of its investment in the Company and has the capacity to protect its own interests. (g) Acquisition for Own Account. Farids is acquiring the Purchased Shares for its own account for investment purposes, and not with a view to, or for the sale in connection with, any distribution thereof in violation of the Securities Act, and the rules and regulations of the SEC promulgated thereunder, or that would require the issuance of the Purchased Shares pursuant to this Agreement to be registered under the Securities Act. (h) No Reliance. Farids has relied upon the representations and warranties set forth herein and its own investigations and diligence, including a review of the Company's annual, quarterly and current reports and other documents filed with or furnished to the SEC, and not upon any other information provided by or on behalf of the Company in making the decision to purchase the Purchased Shares. Farids understands and acknowledges that neither the Company nor any of the Company's representatives, agents or attorneys is making or has made at any time any warranties or representations of any kind or character, express or implied, with respect to any matter or the Common Stock, except as expressly set forth herein. 11 + + + + + +ARTICLE IV BOARD NOMINATION RIGHTS Section 4.1 Springing Nomination Right. Subject to, and only upon the satisfaction of the conditions set forth in, this Section 4.1 and Section 4.5, (i) the Farids Group shall have the right to designate TF or, in the event of the death or permanent disability of TF, another individual that is reasonably acceptable to the Company to be a director of the Company (TF or its designee in such capacity, the "Director Designee"), and (ii) the Company shall cause the Director Designee to be nominated as a director of the Company unless and until such Director Designee is unwilling or unable to serve as a director. The rights and obligations of the Farids Group and the Company (including, without limitation, the right of the Farids Group to appoint the Director Designee and the obligation of the Company to cause the Director Designee to be nominated for election to the Board of Directors (other than with respect to the Annual Meeting)) set forth in this Article IV shall only be effective immediately after, and only upon, the date the Farids Group owns 5.0% or more of the issued and outstanding Common Stock. Subject to, and only upon the satisfaction of the conditions set forth in, this Section 4.1 and Section 4.5, it is understood and agreed that in the event that a vacancy is created at any time as a result of (i) the death or permanent disability of any Director Designee or (ii) the retirement, resignation or removal (with or without cause) of any Director Designee other than TF, then the Farids Group shall have the right to designate a replacement director (who shall be reasonably acceptable to the Company and shall satisfy the eligibility requirements in Section 4.3) to fill such vacancy. Section 4.2 Obligations of the Company. (a) Nomination; Insurance. On or prior to the date of this Agreement or TF's election to the Board of Directors at the Annual Meeting, as applicable, the Company shall have (x) nominated TF for election to the Board of Directors at the Annual Meeting, (y) entered into an Indemnification Agreement with TF as the Director Designee and (z) taken all necessary action for TF to be covered by the Company's existing directors' liability insurance policy. (b) Nomination. Subject to, and only upon the satisfaction of the conditions set forth in, this Section 4.1 and Section 4.5, the Company shall cause the Director Designee to be (x) nominated for election to the Board of Directors and included in the Board of Director's slate of nominees recommended to the shareholders of the Company for each election of directors, and recommend to the shareholders of the Company that the Director Designee be elected to the Board of Directors and (y) included in the proxy statement (if any) prepared by management of the Company in connection with soliciting proxies for every meeting of the shareholders of the Company called with respect to the election of members of the Board of Directors, and at every adjournment or postponement thereof, and on every action or approval by written consent of the shareholders of the Company or the Board of Directors with respect to the election of members of the Board of Directors. When applicable pursuant to Section 4.1 and Section 4.5, the Company shall use its commercially reasonable efforts to cause the election of the Director Designee and otherwise support the Director Designee for election in a manner no less rigorous and favorable than the manner in which the Company supports, and has historically supported, its other nominees in the aggregate. Except as otherwise required by applicable Law, the Company shall not take any action to cause the removal without cause of the Director Designee, unless it is directed to do so by the Farids Group. 12 + + + + + +Section 4.3 Eligibility of Director Designee. Notwithstanding the other provisions of this Article IV, the Company shall not be obligated to cause to be nominated for election to the Board of Directors (or to be included in the Board of Directors' slate of nominees to the Company's stockholders or any proxy statement prepared by management of the Company in connection with soliciting proxies for meetings of the stockholders of the Company called with respect to the election of members of the Board of Directors) or recommend to the Company's stockholders the election of the Director Designee in the event that (i) the Director Designee fails to satisfy all applicable requirements (other than those relating to independence) regarding qualifying as a director of the Company under (A) Nasdaq rules (or the rules of the principal market on which shares of Common Stock are then listed) regarding service as a director and (B) applicable Law; (ii) the Director Designee has been involved in any of the events enumerated in Item 2(d) or (e) of Schedule 13D under the Exchange Act, (iii) the Director Designee is currently the target of an investigation by any governmental authority or agency relating to felonious criminal activity or is subject to any order, decree, or judgment of any court or agency prohibiting service as a director of any public company or providing investment or financial advisory services or (iv) the Director Designee has declared or otherwise indicated (whether publicly or to the Company or the Board of Directors) that she or he is unwilling or unable to serve as a director or otherwise takes actions inconsistent with her or his election. If any event described in clause (i) through (iv) of the preceding sentence occurs, (x) if the Director Designee is TF, then the Farids Group shall forfeit its rights under this Agreement to designate the Director Designee as a member of the Board of Director and shall not have any right to a replacement designee and (y) if the Director Designee is an individual other than TF, then the TF Group shall designate a replacement designee who shall be reasonably acceptable to the Company and shall satisfy the eligibility requirements set forth in this Section 4.3 and such replacement designee shall thereafter constitute a "Director Designee" under this Agreement. The Company shall promptly notify the Farids Group in writing of any objection to the Director Designee in advance of the date on which proxy materials are mailed by the Company in connection with such election of directors. Section 4.4 Resignation. If Farids' Nomination Right set forth in this Article IV is currently applicable and is terminated pursuant to Section 4.5, at the request of the Company, the Director Designee shall offer to resign as a director effective immediately. Section 4.5 Termination. Subject to Section 4.1, the rights and obligations of the Farids Group and the Company (including, without limitation, the right of the Farids Group to appoint the Director Designee and the obligation of the Company to cause the Director Designee to be nominated for election to the Board of Directors) set forth in this Article IV (if applicable, the "Nomination Right") shall terminate immediately after the date the Farids Group owns less than 5.0% of the issued and outstanding Common Stock of the Company, and the Director Designee shall no longer be deemed to be a "Director Designee"; provided further, that, even if the Farids Group owns 5.0% or more of the issued and outstanding Common Stock, such rights and obligations shall terminate on the earliest to occur of: (A) for purposes of determining the Nomination Right for the third Contract Year (as defined in the Exclusive Supplier Operating Agreement), the EA Revenue (as defined in the Warrant) for the second Contract Year is less than $[**], (B) for purposes of determining the Nomination Right for the fourth Contract Year, the EA Revenue for the third Contract Year is less than $[**]; (C) for purposes of determining the Nomination Right for the fifth Contract Year, the EA Revenue for the fourth Contract Year is less than $[**]; or (D) for purposes of determining the Nomination Right for the 12-month period following the fifth Contract Year, the EA Revenue for the fifth Contract Year is less than $[**]. 13 + + + + + +ARTICLE V RESTRICTIONS ON TRANSFER Section 5.1 Restrictions on Transfer. (a) Until the second anniversary of the Closing Date, the Farids Group agrees not to make any Transfer of all or any portion of the Purchased Shares, except that the Farids Group shall be permitted to make Permitted Transfers. (b) Notwithstanding anything to the contrary in this Agreement, the Farids Group agrees that it will not effect any Transfer of Purchased Shares unless such Transfer is made pursuant to an effective registration statement under the Securities Act or pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and, in either case, in compliance with all applicable state securities laws and all applicable securities laws of any other jurisdiction. The Company agrees, and the Farids Group understands and consents, that the Company will not take any action to cause or permit the Transfer of any Purchased Shares to be made on its books (or on any register of securities maintained on its behalf) unless the Transfer is permitted by and has been made in accordance with the terms of this Agreement and all applicable securities laws. The Farids Group agrees that in connection with any Transfer of Purchased Shares that is not made pursuant to a registration statement, the Company may, in its sole discretion, request an opinion, certifications and other information in form and substance reasonably satisfactory to the Company and from counsel reasonably satisfactory to the Company stating that such transaction is exempt from registration under the Securities Act. (c) The Purchased Shares shall be stamped or otherwise imprinted with legends substantially similar to the following (in addition to any legend required under applicable state securities laws) or if held in electronic form, shall be held in an account by the Company's stock transfer agent subject to restrictions on Transfer substantially consistent with the following legend, which shall be furnished in accordance with applicable Law: THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT COVERING ANY SUCH TRANSACTION OR (B) PURSUANT TO AN EXEMPTION FROM REGISTRATION THEREUNDER, SUBJECT TO THE COMPANY'S RIGHT TO RECEIVE AN OPINION OF COUNSEL, CERTIFICATIONS AND OTHER INFORMATION IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE COMPANY AND FROM COUNSEL REASONABLY SATISFACTORY TO THE COMPANY STATING THAT SUCH TRANSACTION IS EXEMPT FROM SUCH REGISTRATION REQUIREMENTS. 14 + + + + + +THE SALE, PLEDGE, HYPOTHECATION OR TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO THE TERMS AND CONDITIONS OF A CERTAIN STRATEGIC ALLIANCE AGREEMENT DATED AS OF DECEMBER 20, 2019, AMONG FARIDS & CO. LLC, EDIBLE ARRANGEMENTS, LLC AND THE COMPANY (AS THE SAME MAY BE AMENDED AND IN EFFECT FROM TIME TO TIME). NO SALE, PLEDGE, HYPOTHECATION OR TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY BE MADE EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF SUCH STRATEGIC ALLIANCE AGREEMENT. COPIES OF SUCH AGREEMENT MAY BE OBTAINED UPON WRITTEN REQUEST TO THE SECRETARY OF THE COMPANY. (d) The Farids Group acknowledges and agrees that any Transfer of the limited liability company interests, partnership interests, shares or other similar equity interests in any member of the Farids Group or a parent entity of such member will be deemed to constitute a Transfer of Purchased Shares, and any proposed Transfer of all or any portion of any such interests in any member of the Farids Group or a parent entity of such member shall be subject to compliance with the terms of this Agreement as such terms apply to the Farids Group. (e) The Company acknowledges and agrees that the Farids Group may from time to time pledge, and/or grant a security interest in, some or all of the legended Purchased Shares in connection with applicable securities laws, pursuant to a bona fide margin agreement in compliance with a bona fide margin loan. Such a pledge would not be subject to approval or consent of the Company and no legal opinion of legal counsel to the pledgee, secured party or pledgor shall be required in connection with the pledge, but such legal opinion shall be required in connection with a subsequent transfer or foreclosure following default by the Farids Group transferee of the pledge. No notice shall be required of such pledge, but the Farids Group's transferee shall promptly notify the Company of any such subsequent transfer or foreclosure. The Farids Group acknowledges that the Company shall not be responsible for any pledges relating to, or the grant of any security interest in, any of the Purchased Shares or for any agreement, understanding or arrangement between the Farids Group and its pledgee or secured party. At the Farids Group's expense, the Company will execute and deliver such reasonable documentation as a pledgee or secured party of Purchased Shares may reasonably request in connection with a pledge or transfer of the Purchased Shares, including the preparation and filing of any required prospectus supplement under Rule 424(b)(3) of the Securities Act or other applicable provision of the Securities Act to appropriately amend the list of selling stockholders thereunder. (f) The legend set forth in Section 5.1(c) above shall be removed and the Company shall issue one or more certificates without such legend or any other legend to the holder of the Purchased Shares upon which it is stamped or issue to such holder by electronic delivery, if (i) such Purchased Shares are registered for resale under the Securities Act, (ii) such Purchased Shares are sold or transferred pursuant to Rule 144, or (iii) such Purchased Shares are eligible for resale under the Securities Act without regard to current public information, manner of sale or volume limitations. Any fees (with respect to the Company's transfer agent, Company counsel or otherwise) associated with the removal of such legend shall be borne by the Company. 15 + + + + + +Section 5.2 Remedy for Prohibited Transfer. In the event that any member of the Farids Group Transfers any Purchased Shares in contravention of Section 5.1, such Transfer shall be null and void, and the Company agrees it will not take any action to effect such a Transfer nor will it treat any alleged transferee as the holder of such Purchased Shares. ARTICLE VI REGISTRATION RIGHTS Section 6.1 Demand Registration. (a) If the Company shall receive a written request (a "Demand Request") from the Farids Group that the Company file a registration statement under the Securities Act covering the registration of all or a portion of the Registrable Securities owned by the Farids Group, then the Company shall, subject to the limitations of this Section 6.1, effect, as expeditiously as reasonably possible, the registration under the Securities Act of all Registrable Securities in accordance with the intended method of distribution thereof that the Farids Group requests to be registered, subject to the provisions of Section 6.1(c); provided, however, that any Eligible Resale Registration Statement shall be filed within 90 days following receipt of such Demand Request and any Resale Shelf Registration Statement shall be filed within 30 days following receipt of such Demand Request, as applicable. The Farids Group shall have the right to make two (2) Demand Requests on or after the date that is the second anniversary of the date of this Agreement; provided, that the Farids Group shall not make more than one (1) Demand Request within any six-month period. (b) If the Farids Group intends to distribute the Registrable Securities covered by its request by means of an underwritten public offering, it shall so advise the Company as a part of their request made pursuant to this Section 6.1. The Farids Group shall have the right to select the investment bank or banks and managers to administer any offering made in connection with a Demand Request, including the lead managing underwriter; provided that such investment banks or managers shall be reasonably acceptable to the Company; provided, further, that if the Farids Group declines to exercise such right, the Company shall select the investment bank or banks and managers to administer the offering, but the Farids Group shall continue to have such right pursuant to this Section 6.1(b) in any subsequent underwritten public offering. (c) Notwithstanding anything herein to the contrary, the Company shall not be obligated to (i) effect a registration pursuant to Section 6.1 unless the Registrable Securities requested to be registered by the Farids Group, together with all other shares of Common Stock requested to be registered by any other holder of piggyback registration rights (each, an "Other Piggyback Holder") pursuant to any agreement containing similar registration rights as those contained in this Article VI (such other shares, the "Other Registrable Securities"), are reasonably expected to result in aggregate gross cash proceeds in excess of (x) in the case of a Resale Shelf Registration Statement, three (3) million dollars ($3,000,000) and (y) in the case of any other form of registration statement, one (1) million dollars ($1,000,000) or (ii) prepare, file, effect or maintain a shelf registration statement on Form S-3 (or any successor to Form S-3) or any similar shelf registration statement (other than a Resale Shelf Registration Statement) under the Securities Act for the purposes of compliance with any Demand Right pursuant to this Section 6.1. 16 + + + + + +Section 6.2 Piggyback Registrations. (a) From and after the second anniversary of the date of this Agreement, the Company shall notify the Farids Group (unless the Farids Group has demanded such registration pursuant to Section 6.1) in writing at least five (5) business days prior to the initial public filing of any Eligible Registration Statement. Such notice from the Company shall state the intended method of distribution of the Registrable Securities included in such Eligible Registration Statement. The Company shall afford the Farids Group the opportunity to include Registrable Securities in such Eligible Registration Statement so long as it agrees to sell its Registrable Securities pursuant to the same method of distribution. If the Farids Group desires to include Registrable Securities held by it in any such Eligible Registration Statement, it shall, within four (4) business days after the above-described notice from the Company, so notify the Company in writing. Any such notice from the Farids Group shall (i) specify the amount of Registrable Securities that the Farids Group would like to include in such Eligible Registration Statement and (ii) include the agreement of the Farids Group to participate in any related underwritten offering on the same terms as the other participating Holders. Upon such written notice from the Farids Group, the Company will use its best efforts to effect the registration under the Securities Act of all Registrable Securities which the Farids Group has requested to be registered. If the Farids Group decides not to or is unable to include all of its Registrable Securities in any Eligible Registration Statement filed by the Company, the Farids Group shall nevertheless continue to have the right to include Registrable Securities in any subsequent Eligible Registration Statement as may be filed by the Company, all upon the terms and conditions set forth herein. Prior to the effectiveness of the applicable Eligible Registration Statement, the Farids Group may withdraw from such Eligible Registration Statement any of the Registrable Securities at any time upon written notice to the Company. (b) Underwriting. If the Eligible Registration Statement under which the Company gives notice under this Section 6.2 is for an underwritten offering, the Company shall so advise the Farids Group. In such event, the right of the Farids Group to be included in an Eligible Registration Statement pursuant to this Section 6.2 shall be conditioned upon the Farids Group's participation in such underwriting by executing and delivering a custody agreement and power of attorney in form and substance reasonably satisfactory to the Company with respect to such Registrable Securities (the "Custody Agreement and Power of Attorney"), which Custody Agreement and Power of Attorney shall permit the Farids Group to, prior to the effectiveness of such Eligible Registration Statement, withdraw any of the Registrable Securities at any time from such Eligible Registration Statement upon written notice to the Company and the custodian. The Custody Agreement and Power of Attorney will provide, among other things, that (i) the Farids Group will, to the extent applicable, deliver to and deposit in custody with the custodian and attorney-in-fact named therein one or more certificates representing such Registrable Securities, accompanied by duly executed stock powers in blank, and irrevocably appoint said custodian and attorney-in-fact with full power and authority to act under the Custody Agreement and Power of Attorney on the Farids Group's behalf with respect to the matters specified therein, including, but not limited to, the entry into an underwriting agreement (the "Underwriting Agreement"") in customary form with the underwriter(s) and such other documents and agreements reasonably required in connection with such registration or offering and (ii) the Farids Group will perform its obligations under such Underwriting Agreement and any other agreement entered into in connection with such registration and/or offering. The Farids Group also agrees to execute such other documents and agreements as the Company may reasonably request to effect the provisions of this Section 6.2 and any transactions contemplated hereby. 17 + + + + + +Section 6.3 Priority on Registrations. Notwithstanding any other provision of this Article VI, if the lead managing underwriter or underwriters advise, in the case of a requested registration pursuant to Section 6.1, the Farids Group or, in all other cases, the Company that marketing factors (including, but not limited to, an adverse effect on the per share offering price) require a limitation of the number of shares to be included in an underwritten offering (including Registrable Securities), then the Farids Group or the Company, as the case may be, shall so advise all holders of Registrable Securities and all Other Piggyback Holders who have requested to participate in such offering, that (i) if the requested registration is pursuant to Section 6.1, the number of shares that may be included in the underwriting shall be allocated first to the Farids Group for its own account, and second to the Company (to the extent it is selling shares of Common Stock in such offering) and the Other Piggyback Holders who have duly requested shares to be included therein on a pro rata basis based on the number of shares proposed to be sold by the Company and the number of Other Registrable Securities requested to be included by such Other Piggyback Holders, and (ii) if the requested registration is not pursuant to Section 6.1, the number of shares that may be included in the underwriting shall be allocated first to the Company for its own account (to the extent such registration was initiated by the Company) or to such Holder of Other Registrable Securities who demanded such registration pursuant to demand rights similar to those set forth in this Agreement, and second to the Company (to the extent such registration was not initiated by the Company), the Farids Group and the Other Piggyback Holders who have duly requested shares to be included therein on a pro rata basis based on the number of shares proposed to be sold by the Company (to the extent such registration was not initiated by the Company), the number of Registrable Securities requested to be included by the Farids Group and the number of Other Registrable Securities requested to be included by all such Other Piggyback Holders. For any Other Piggyback Holder which is a partnership, limited liability company or corporation, the partners, members or shareholders, as applicable, of such Other Piggyback Holder and the estates and Family Members of any such partners, members and shareholders and any trusts for the benefit of any of the foregoing Person(s) shall be deemed to be a single "Other Piggyback Holder," and any pro rata reduction with respect to such "Other Piggyback Holder" pursuant to this Section 6.3 shall be based upon the aggregate amount of shares carrying registration rights owned by all Persons deemed to constitute such "Other Piggyback Holder" (as defined in this sentence). Section 6.4 Termination, Effectiveness, Postponement and Suspension of Registration. (a) Right to Terminate Registration. If the Farids Group determines for any reason not to proceed with any proposed registration requested pursuant to Section 6.1, the Farids Group shall promptly notify the Company in writing. Upon receipt of such notice, the Company shall withdraw or terminate such registration whether or not any Other Piggyback Holder has elected to include any Other Registrable Securities in such registration. In addition, the Company shall have the right to withdraw or terminate any proposed registration initiated by it and a Holder of Other Registrable Securities shall have the right to withdraw or terminate any proposed registration initiated by it, whether or not the Farids Group or any Other Piggyback Holder has elected to include Registrable Securities or Other Registrable Securities, as the case may be, in such registration. The Company shall promptly give notice of the withdrawal or termination of any registration to the Farids Group, to the extent the Farids Group has elected to participate in such registration. The Registration Expenses of any such withdrawn or terminated registration shall be borne by the Company in accordance with Section 6.5. 18 + + + + + +(b) Effectiveness of the Registration Statement. The Company shall maintain the effectiveness of the Eligible Registration Statement until the earlier of (i) the date on which all Registrable Securities included in such Eligible Registration Statement have actually been sold and (ii) the date that is (x) 180 days (in respect of a Resale Shelf Registration Statement) or (y) 90 days (in respect of any Eligible Registration Statement other than a Resale Shelf Registration Statement) from the effective date of such Eligible Registration Statement. (c) Postponement or Suspension of Registration. If the filing, initial effectiveness or continued use of an Eligible Registration Statement in respect of a registration pursuant to this Agreement at any time would require the Company to make a public disclosure of material non-public information, (1) which disclosure in the good faith judgment of the Board of Directors (after consultation with external legal counsel) (x) would be required to be made in any registration statement so that such registration statement would not contain a material misstatement or omission, (y) would not be required by applicable Law to be made at such time but for the filing, effectiveness or continued use of such Eligible Registration Statement and (z) would reasonably be expected to have a Company Material Adverse Effect or a material adverse effect on the Company's ability to effect a material proposed acquisition, disposition, financing, business opportunity, reorganization, recapitalization or similar transaction or (2) during a customary "blackout" period of the Company, then the Company may, upon giving prompt written notice of such determination to the Farids Group, delay the filing or initial effectiveness of, or suspend the use of, such Eligible Registration Statement; provided, that the Company shall not be permitted to do so pursuant to clause (1) above (x) more than two times during any twelve (12) month period or (y) for a period exceeding thirty (30) days on any one occasion (unless a longer period is consented to by the Farids Group) (the "Suspension Period"). In the event the Company exercises its rights under the preceding sentence, the Farids Group agrees to suspend, promptly upon its receipt of the notice referred to above, its use of any prospectus relating to such registration in connection with any sale or offer to sell Registrable Securities. If so requested by the Company, the Farids Group shall use its reasonable best efforts to deliver to the Company (at the Company's expense) all copies, other than permanent file copies then in the Farids Group's possession, of the prospectus relating to such Registrable Securities at the time of receipt of such notice. The Company agrees that, in the event it exercises its rights under this Section 6.4(c), it shall (i) promptly notify the Farids Group of the termination or expiration of any Suspension Period, (ii) within thirty (30) days after delivery of the notice referred to above (unless a longer period is consented to by the Farids Group), resume the process of filing or request for effectiveness, or update the suspended registration statement, as the case may be, as may be necessary to permit the Farids Group to offer and sell its Registrable Securities in accordance with applicable Law and (iii) if an Eligible Registration Statement that was already effective had been suspended as result of the exercise of such rights by the Company, promptly notify the Farids Group after the termination or expiration of any Suspension Period of the applicable time period during which the Eligible Registration Statement is to remain effective, which shall be extended by a period of time equal to the duration of the Suspension Period. 19 + + + + + +Section 6.5 Expenses of Registration. Except as specifically provided herein, all Registration Expenses incurred in connection with any registration under Sections 6.1 and 6.2 shall be borne by the Company. All underwriting fees and selling commissions relating to the distribution of the Registrable Securities and all taxes, if any, on the transfer and sale, respectively, of the Registrable Securities being sold that are incurred in connection with any registrations hereunder shall be borne by the Farids Group. For the avoidance of doubt, all underwriting fees, selling commissions and taxes incurred in connection with any registration hereunder relating to securities sold by the Company shall be borne by the Company. Section 6.6 Obligations of the Company. If and whenever the Company is required to effect the registration of any Registrable Securities under the Securities Act as provided in Sections 6.1 and 6.2 (to the extent the Farids Group has requested to include Registrable Securities in an Eligible Registration Statement pursuant to clause (a) of such Section 6.1 or 6.2, as the case may be), the Company shall effect such registration to permit the sale of such Registrable Securities in accordance with the intended method or methods of distribution thereof, and pursuant thereto the Company shall cooperate in the sale of the securities and shall, as expeditiously as reasonably possible: (a) Prepare and file with the SEC an Eligible Registration Statement on such form as shall be available for the sale of the Registrable Securities by the Farids Group in accordance with the intended method of distribution thereof and the provisions of this Article VI, and use its reasonable best efforts to cause each such Eligible Registration Statement to become effective and remain effective as provided herein; provided, however, that before filing any Eligible Registration Statement or Prospectus or any amendments or supplements thereto (not including documents that would be incorporated or deemed to be incorporated therein by reference), the Company shall afford the Farids Group, its counsel and the managing underwriter, if any, an opportunity to review copies of all such documents proposed to be filed. The Company shall not file any Eligible Registration Statement or Prospectus or any amendments or supplements thereto in respect of which the Farids Group has a right to review prior to the filing of such document, if the Farids Group, its counsel or the managing underwriter, if any, shall reasonably object, in writing, on a timely basis. (b) Prepare and file with the SEC such amendments and post-effective amendments to each Eligible Registration Statement as may be necessary to keep such Eligible Registration Statement continuously effective for the effectiveness period; and comply with the provisions of the Securities Act, the Exchange Act and the rules and regulations of the SEC promulgated thereunder applicable to it with respect to the disposition of all securities covered by such Eligible Registration Statement as so amended or in such Prospectus as so supplemented. 20 + + + + + +(c) Notify the Farids Group, its counsel and the managing underwriter, if any, promptly (but in any event within 10 business days), and confirm such notice in writing, (i) when a Prospectus or any prospectus supplement or post-effective amendment has been filed, and, with respect to an Eligible Registration Statement or any post-effective amendment, when the same has become effective (including in such notice a written statement that the Farids Group may, upon request, obtain, without charge, one conformed copy of such Eligible Registration Statement or post-effective amendment including financial statements and schedules, all documents incorporated or deemed to be incorporated by reference and all exhibits), (ii) of the issuance by the SEC of any stop order suspending the effectiveness of a Eligible Registration Statement or of any order preventing or suspending the use of any preliminary prospectus or the initiation of any proceedings for that purpose, (iii) if at any time when a prospectus is required by the Securities Act to be delivered in connection with sales of the Eligible Registrable Securities the representations and warranties of the Company contained in any agreement (including any underwriting agreement) contemplated by Section 6.6(k) below cease to be true and correct in all material respects, (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of an Eligible Registration Statement or any of the Registrable Securities for offer or sale in any jurisdiction, or the initiation or threatening of any proceeding for such purpose, (v) of the happening of any event that makes any statement made in such Eligible Registration Statement or related Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires the making of any changes in such Eligible Registration Statement, Prospectus or documents so that, in the case of such Eligible Registration Statement, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and that in the case of the Prospectus, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and (vi) of the Company's reasonable determination that a post-effective amendment to an Eligible Registration Statement would be appropriate. (d) Use its reasonable best efforts to prevent the issuance of any order suspending the effectiveness of an Eligible Registration Statement or of any order preventing or suspending the use of a Prospectus or suspending the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction, and, if any such order is issued, to obtain the withdrawal of any such order at the earliest possible moment. (e) If requested by the managing underwriter, if any, or the Farids Group, (i) promptly incorporate in a post-effective amendment such information as the managing underwriter, if any, or the Farids Group reasonably requests to be included therein to comply with applicable Law, (ii) make all required filings of such post-effective amendment as soon as practicable after the Company has received notification of the matters to be incorporated in such post-effective amendment, and (iii) supplement or make amendments to such Eligible Registration Statement; provided, however, that the Company shall not be required to take any actions under this Section 6.6(e) that are not, in the opinion of counsel for the Company, in compliance with applicable Law. (f) Furnish to the Farids Group and each managing underwriter, if any, without charge, one conformed copy of the Eligible Registration Statement or Statements and each post-effective amendment thereto, including financial statements and schedules, all documents incorporated or deemed to be incorporated therein by reference and all exhibits. 21 + + + + + +(g) Deliver to the Farids Group, its counsel and the underwriters, if any, without charge, as many copies of the Prospectus or Prospectuses (including each form of prospectus) and each amendment or supplement thereto as such Persons may reasonably request; and, the Company hereby consents to the use of such Prospectus and each amendment or supplement thereto by the Farids Group and the underwriters, if any, in connection with the offering and sale of the Registrable Securities covered by such Prospectus and an amendment or supplement thereto. (h) Prior to any public offering of Registrable Securities, to use its reasonable best efforts to register or qualify, and cooperate with the Farids Group, the underwriters, if any, the sales agent and their respective counsel in connection with the registration or qualification (or exemption from such registration or qualification) of such Registrable Securities for offer and sale under the securities or "blue sky" laws of such jurisdictions within the United States as the Farids Group or the managing underwriter, if any, reasonably request in writing; use its reasonable best efforts to keep each such registration or qualification (or exemption therefrom) effective during the period during which the related Eligible Registration Statement is required to be kept effective and use its reasonable best efforts to do any and all other acts or things necessary or advisable to enable the disposition in such jurisdictions of the Registrable Securities covered by the applicable Eligible Registration Statement; provided, however, that the Company will not be required to (A) qualify generally to do business in any jurisdiction where it is not then so qualified or (B) take any action that would subject it to general service of process or taxation in any such jurisdiction where it is not then so subject. (i) Upon the occurrence of any event contemplated by clause (v) or (vi) of Section 6.6(c) above, as promptly as practicable prepare a supplement or post-effective amendment to the Eligible Registration Statement or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, or file any other required document so that, as thereafter delivered to the purchasers of the Registrable Securities being sold thereunder, such Prospectus will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. (j) Enter into an underwriting agreement in form, scope and substance as is customary in underwritten offerings and take all such other actions as are reasonably requested by the managing underwriter in order to expedite or facilitate the registration or the disposition of such Registrable Securities, and in such connection, (i) make such customary representations and warranties to the underwriters, with respect to the business of the Company and its subsidiaries, and the Eligible Registration Statement, Prospectus and documents, if any, incorporated or deemed to be incorporated by reference therein; (ii) obtain opinions of counsel to the Company and updates thereof (which counsel and opinions shall be reasonably satisfactory (in form, scope and substance) to the managing underwriter), addressed to the underwriters covering the matters customarily covered in opinions requested in underwritten offerings and such other matters as may be reasonably requested by the underwriters; and (iii) obtain "comfort" letters and updates thereof from the independent certified public accountants of the Company (and, if necessary, any other independent certified public accountants of any subsidiary of the Company or of any business acquired by the Company for which financial statements and financial data are, or are required to be, included in the Eligible Registration Statement), addressed to each of the underwriters, such letters to be in customary form and covering matters of the type customarily covered in "comfort" letters in connection with underwritten offerings. The above shall be done at each closing under such underwriting agreement, or as and to the extent required thereunder. 22 + + + + + +(k) Use its reasonable best efforts to cause all Registrable Securities covered by such Eligible Registration Statement to be listed on each securities exchange on which the Common Stock is then listed. (l) Comply with all applicable rules and regulations of the SEC and make generally available to its security-holders earnings statements satisfying the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or any similar rule promulgated under the Securities Act) no later than 45 days after the end of any 12-month period (or 90 days after the end of any 12-month period if such period is a fiscal year) (i) commencing at the end of any fiscal quarter in which Registrable Securities are sold to underwriters in a firm commitment or best efforts underwritten offering and (ii) if not sold to underwriters in such an offering, commencing on the first day of the first fiscal quarter of the Company after the effectiveness date of an Eligible Registration Statement, which statements shall cover said 12-month periods. Section 6.7 Delay of Registration; Furnishing Information. It shall be a condition precedent to the obligations of the Company to take any action pursuant to Section 6.1 or 6.2 that the Farids Group shall furnish to the Company such information regarding itself, the Registrable Securities held by it and the intended method of distribution of such securities as required by Section 6.12 or as otherwise reasonably requested by the Company. Section 6.8 Indemnification. In the event any Registrable Securities are included in an Eligible Registration Statement under Section 6.1 or 6.2: (a) To the fullest extent permitted by law, the Company will indemnify and hold harmless the Farids Group, the partners, members, directors and officers of any member of the Farids Group, any underwriter (as defined in the Securities Act), the directors and officers of such underwriter, and each person, if any, who controls any member of the Farids Group or such underwriter within the meaning of the Securities Act or the Exchange Act (collectively, the "Non-Company Indemnified Parties"), against any losses, claims, damages, or liabilities (joint or several) to which they may become subject under the Securities Act, the Exchange Act or other federal or state law, insofar as such losses, claims, damages or liabilities (or suits, actions or proceedings in respect thereof) and reasonable documented expenses that arise out of or are based upon any of the following statements, omissions or violations by the Company: (i) any untrue statement or alleged untrue statement of a material fact contained in such Eligible Registration Statement or incorporated by reference therein, including any preliminary prospectus, final prospectus or summary prospectus contained therein or any amendments or supplements thereto or any document incorporated by reference therein, or any other such disclosure document (including reports and other documents filed under the Exchange Act and any document incorporated by reference therein) or related document or report, (ii) any omission or alleged omission to state therein a material fact required to be stated therein (in the case of an Eligible Registration Statement only), or necessary to make the statements therein not misleading, in the case of a prospectus, in the light of the circumstances when they were made, or (iii) any violation or alleged violation by the Company or any of its subsidiaries of the Securities Act, the Exchange Act, any state securities law or any rule or regulation promulgated under the Securities Act, the Exchange Act or any federal, state, foreign or common law, rule or regulation in connection with the offering covered by such Eligible Registration Statement (collectively, a "Violation"); and the Company will reimburse each such Non-Company Indemnified Party for any reasonable legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability, suit, action or proceeding; provided, however, that the indemnity agreement contained in this Section 6.8(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability, suit, action or proceeding if such settlement is effected without the consent of the Company, which consent shall not be unreasonably withheld, delayed or conditioned, nor shall the Company be liable in any such case for any such loss, claim, damage, liability, suit, action or proceeding to the extent that it arises out of or is based upon a Violation which occurs in reliance upon and in conformity with written information furnished expressly for use in connection with such Eligible Registration Statement by such Non-Company Indemnified Party. 23 + + + + + +(b) To the fullest extent permitted by law, the Farids Group will, jointly and severally, indemnify and hold harmless the Company, each of its directors, officers, employees, agents, representatives, and each person, if any, who controls the Company within the meaning of the Securities Act or the Exchange Act, any underwriter (as defined in the Securities Act), the directors and officers of such underwriter, and each person, if any, who controls such underwriter within the meaning of the Securities Act or the Exchange Act, against any losses, claims, damages or liabilities (joint or several) to which the Company or any such director, officer, employee, agent, representative, controlling person or underwriter may become subject under the Securities Act, the Exchange Act or other federal or state law, insofar as such losses, claims, damages or liabilities (or suits, actions or proceedings in respect thereof) and reasonable documented expenses that arise out of or are based upon any of the following statements, omissions or violations: (i) any untrue statement or alleged untrue statement of a material fact contained in such Eligible Registration Statement or incorporated by reference therein, including any preliminary prospectus, final prospectus or summary prospectus contained therein or any amendments or supplements thereto or any document incorporated by reference therein, or any other such disclosure document (including reports and other documents filed under the Exchange Act and any document incorporated by reference therein) or related document or report, (ii) any omission or alleged omission to state therein a material fact required to be stated therein (in the case of an Eligible Registration Statement only), or necessary to make the statements therein not misleading, in the case of a prospectus, in the light of the circumstances when they were made, or (iii) any violation or alleged violation by the Company or any of its subsidiaries of the Securities Act, the Exchange Act, any state securities law or any rule or regulation promulgated under the Securities Act, the Exchange Act or any federal, state, foreign or common law, rule or regulation in connection with the offering covered by such Eligible Registration Statement (collectively, a "Holder Violation"), in each case to the extent (and only to the extent) that such Holder Violation occurs in reliance upon and in conformity with written information furnished by the Farids Group expressly for use in connection with such Eligible Registration Statement; and the Farids Group will reimburse any legal or other expenses reasonably incurred by the Company or any such director, officer, employee, agent, representative, controlling person or underwriter in connection with investigating or defending any such loss, claim, damage, liability, suit, action or proceeding if it is judicially determined that there was such a Holder Violation; provided, however, that the indemnity agreement contained in this Section 6.8(b) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability, suit, action or proceeding if such settlement is effected without the consent of the Farids Group, which consent shall not be unreasonably withheld, delayed or conditioned; provided, further, that in no event shall any indemnity under this Section 6.8(b) exceed the net proceeds from the offering received by the Farids Group upon the sale of the Registrable Securities giving rise to such indemnification obligation. 24 + + + + + +(c) Promptly after receipt by an indemnified party under paragraph (a) or (b) of this Section 6.8 (an "Indemnified Party") of written notice of the commencement of any claim, damage, suit, action or proceeding (including any governmental or regulatory investigation) being brought or asserted against it, such Indemnified Party will, if a claim in respect thereof is to be made against any indemnifying party under paragraph (a) or (b) of this Section 6.8 (an "Indemnifying Party"), deliver to the Indemnifying Party a written notice of the commencement thereof; provided, that the failure of the Indemnified Party to deliver written notice to the Indemnifying Party shall not relieve it from any liability it may have under paragraph (a) or (b) of this Section 6.8 except to the extent such failure has materially prejudiced the Indemnifying Party's ability to defend such action (through the forfeiture of substantive rights or defenses). The Indemnifying Party shall have the right to participate in, and, to the extent the Indemnifying Party so desires, jointly with any other Indemnifying Party who has received a similar notice, to assume the defense thereof with counsel reasonably satisfactory to the Indemnified Party to represent the Indemnified Party in such proceeding and shall pay the fees and expenses of such counsel relating to such proceeding, and after notice from the Indemnifying Party to the Indemnified Party of its election so to assume the defense thereof, the Indemnifying Party shall not, except as specified below, be liable to such Indemnified Party under paragraph (a) or (b) above, as the case may be, for any legal expenses of other counsel. In any such proceeding, an Indemnified Party shall have the right to retain its own counsel, with the fees and expenses to be paid by the Indemnified Party; provided the Indemnifying Party will pay the reasonable fees and expenses of such counsel if (i) the Indemnifying Party and the Indemnified Party shall have so mutually agreed; (ii) the Indemnifying Party has failed within a reasonable time to retain counsel reasonably satisfactory to the Indemnified Party; (iii) the Indemnified Party shall have reasonably concluded, based on the advice of counsel, that there may be legal defenses available to it that are different from or in addition to those available to the Indemnifying Party; or (iv) the named parties in any such proceeding (including any impleaded parties) include both the Indemnifying Party and the Indemnified Party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interest between them. It is understood and agreed that the Indemnifying Party shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to any local counsel that is required to effectively defend against any such proceeding) for all Indemnified Parties, and that all such fees and expenses shall be paid or reimbursed promptly. The Indemnifying Party shall not be liable for any settlement of any proceeding effected without its written consent (which shall not be unreasonably withheld, delayed or conditioned), but if settled with such consent or if there be a final judgment for the plaintiff, the Indemnifying Party agrees to indemnify each Indemnified Party from and against any loss or liability by reason of such settlement or judgment. No Indemnifying Party shall, without the written consent of the Indemnified Party (which shall not be unreasonably withheld, delayed or conditioned), effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Party is or could have been a party and indemnification could have been sought hereunder by such Indemnified Party, unless such settlement (x) includes an unconditional release of such Indemnified Party, in form and substance reasonably satisfactory to such Indemnified Party, from all liability on claims that are the subject matter of such proceeding and (y) does not include any statement as to or any admission of fault, culpability or a failure to act by or on behalf of any Indemnified Party. 25 + + + + + +(d) If the indemnification provided for in this Section 6.8 is held by a court of competent jurisdiction to be unavailable to an Indemnified Party with respect to any losses, claims, damages or liabilities referred to herein, the Indemnifying Party, in lieu of indemnifying such Indemnified Party thereunder, shall to the extent permitted by applicable Law contribute to the amount paid or payable by such Indemnified Party as a result of such loss, claim, damage or liability in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party on the one hand and of the Indemnified Party on the other in connection with the actions that resulted in such loss, claim, damage or liability, as well as any other relevant equitable considerations. The relative fault of the Indemnifying Party and of the Indemnified Party shall be determined by a court of law by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact relates to information supplied by the Indemnifying Party or by the Indemnified Party and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission; provided, that in no event shall any contribution by a Holder hereunder exceed the net proceeds from the offering made under such Eligible Registration Statement received by such Holder. (e) The parties hereto agree that it would not be just and equitable if contribution pursuant to Section 6.8(d) were determined by pro rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to in the immediately preceding paragraph. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. (f) The obligations of the Company and the Farids Group under this Section 6.8 shall survive completion of any offering of Registrable Securities in an Eligible Registration Statement and the termination of this Agreement. (g) The obligations of the parties under this Section 6.8 will be in addition to any liability, without duplication, which any party may otherwise have to any other party. Section 6.9 "Market Stand-Off" Agreement. The Farids Group hereby agrees that the Farids Group shall not Transfer, make any short sale of, grant any option for the purchase of, or enter into any hedging or similar transaction with the same economic effect as a sale or other Transfer, any Lock-Up Security held by the Farids Group (other than those included in the registration) for a period specified by the representative(s) of the underwriters of Registrable Securities or any other securities sold in any offering in respect of which the Farids Group received notice from the Company in accordance with Section 6.2, such period not to exceed one hundred and eighty (180) days following the pricing date of any underwritten offering; provided that the Farids Group shall only be required to comply with this Section 6.9 if the Farids Group beneficially own (within the meaning of Rule 13d-3 under the Exchange Act, or any successor provision) at least 3.0% or more of the number of shares of Common Stock outstanding at such time. The Company may impose stop transfer instructions with respect to any Lock-Up Security subject to the foregoing restriction until the end of said one hundred and eighty (180) day or shorter period. 26 + + + + + +Section 6.10 Agreement to Furnish Information. The Farids Group agrees to execute and deliver such other agreements as may be reasonably requested by the Company or the representative(s) of the underwriter(s) that are consistent with the Farids Group's obligations under Section 6.9 or that are necessary to give further effect thereto. In addition, if requested by the Company or such representative(s), the Farids Group shall provide, to the extent the Farids Group has elected to include Registrable Securities in an Eligible Registration Statement, within one (1) business day of such request, such information relating to itself, the Registrable Securities held by it and the registration and the intended method of distribution of the Registrable Securities as may be reasonably requested by the Company or such representative(s) in connection with the completion of any public offering of Common Stock pursuant to such Eligible Registration Statement. The underwriters of Registrable Securities are intended third party beneficiaries of Sections 6.8 and 6.10 and shall have the right, power and authority to enforce the provisions hereof as though they were a party hereto. Section 6.11 Termination. The rights and obligations of the Farids Group set forth in this Article VI (other than those set forth in Sections 6.8 and 6.9) shall terminate on the date that the Farids Group owns less than 3% of the issued and outstanding Common Stock, but in no event earlier than the Expiration Date (as defined in the Warrant). ARTICLE VII RIGHT OF FIRST REFUSAL; CHANGE IN CONTROL Section 7.1 Right of First Offer for 144 Sales. (a) Subject to the restrictions set forth in Section 5.1 of this Agreement and Section 2.3 of the Warrant, in the event any member of the Farids Group proposes to Transfer (other than a Permitted Transfer) a Threshold Block, in a transaction or series of related transactions, of Shares in a 144 Sale, the Farids Group shall furnish to the Company a written notice of such proposed Transfer (a "ROFO Sale Notice") at least 48 hours prior to the opening of trading on the Nasdaq Global Market (or such other primary stock exchange upon which the Common Stock is listed) on the business day that the Farids Group proposes to begin to effect such 144 Sale. (b) The ROFO Sale Notice shall include: (i) (A) the number of Shares proposed to be sold (the "ROFO Shares"), (B) the per share purchase price in cash at which the Farids Group is prepared to Transfer such ROFO Shares (the "ROFO Sale Price") and (C) the date the Farids Group proposes to begin to effect such 144 Sale; and (ii) (ii) an offer to sell to the Company and/or a designee of the Company all or a portion of the ROFO Shares at the ROFO Sale Price. (c) If the Company wishes to purchase (and/or cause a designee to purchase) all or a portion of the ROFO Shares at the ROFO Sale Price, the Company shall deliver a notice (a "ROFO Purchase Notice") to the Farids Group no later 8:00 a.m. New York time on the business day that the Farids Group proposes to effect such 144 Sale specifying the number of ROFO Shares it wishes to purchase (and/or cause a designee to purchase) from the Farids Group. The closing of the purchase of such ROFO Shares by the Company and/or any such designee shall take place no later than five (5) business days after delivery of the ROFO Purchase Notice, with payment for such ROFO Shares being made concurrently with such purchase to the Farids Group's account designated in the ROFO Sale Notice. If the Company does not timely deliver a ROFO Purchase Notice it shall be deemed to have waived all of its rights with respect to the offer contained in the ROFO Sale Notice. 27 + + + + + +(d) In the event that the number of ROFO Shares offered to be purchased in the ROFO Purchase Notice is less than the number of ROFO Shares set forth in the Sale Notice (or the Company does not timely deliver a ROFO Purchase Notice), the Farids Group may sell the ROFO Shares that are not subject to any such ROFO Purchase Notice during the five (5) day business day period beginning on the date in the ROFO Sale Notice on which the Farids Group proposed to begin to effect such 144 Sale (the "ROFO Transfer Period"); provided that no such ROFO Share may be sold for less than the ROFO Sale Price. (e) (e) If by the expiration of the ROFO Transfer Period, the Farids Group has not completed the Transfer of any ROFO Shares at the ROFO Sales Price or a higher price, in order for the Farids Group to Transfer such ROFO Shares (or any other Shares) it shall be necessary for a new ROFO Sale Notice or ROFR Sale Notice to be delivered, and the terms and provisions of this Article VII to be again complied with. The Farids Group shall not deliver more than one ROFO Sale Notice or ROFR Sale Notice in any thirty (30) day period. Section 7.2 Right of First Refusal. (a) Subject to the restrictions set forth in Section 5.1 of this Agreement and Section 2.3 of the Warrant, in the event any member of the Farids Group proposes to Transfer (other than a Permitted Transfer) (i) a Threshold Block, in a transaction or series of related transactions, that, to the Farids Group's knowledge (after due inquiry in connection with a private, non-open market transaction) is to a Person whom the Company reasonably determines is a direct or indirect material competitor of the Company or any Affiliate of such Person or (ii) a Significant Block, in a transaction or series of related transactions, that, to the Farids Group's knowledge (after due inquiry in connection with a private, non-open market transaction) is to a Person whom the Company reasonably determines is a direct or indirect material competitor of the Company or any Affiliate of such Person (in each case, regardless of whether such Transfer will constitute a 144 Sale), the Farids Group shall furnish to the Company a written notice of such proposed Transfer (a "ROFR Sale Notice") at least (5) business days prior to the business day that the Farids Group proposes to effect such Transfer. (b) The ROFR Sale Notice shall include: (i) (A) the identity of the proposed transferee, (B) the purchase agreement and other documentation for the proposed Transfer (the "ROFR Sale Documentation"), (C) the number of Shares proposed to be sold (the "ROFR Shares"), (D) the per share purchase price in cash at which the Farids Group is prepared to Transfer such ROFR Shares (the "ROFR Sale Price") and (E) the date the Farids Group proposes to effect such Transfer; and 28 + + + + + +(ii) an offer to sell to the Company and/or a designee of the Company all of the ROFR Shares at the ROFR Sale Price. (c) If the Company wishes to purchase (and/or cause a designee to purchase) all of the ROFR Shares at the ROFR Sale Price, the Company shall deliver a notice (a "ROFR Purchase Notice") to the Farids Group within three (3) business day after receipt of the ROFR Sale Notice. The closing of the purchase of such ROFR Shares by the Company and/or any such designee shall take place no later than the later of (i) the purchase date set forth in the ROFR Sale Documentation and (ii) five (5) business days after delivery of the ROFR Purchase Notice, with payment for such ROFR Shares being made concurrently with such purchase to the Farids Group's account designated in the ROFR Sale Notice. If the Company does not timely deliver a ROFR Purchase Notice it shall be deemed to have waived all of its rights with respect to the offer contained in the ROFR Sale Notice. (d) In the event that Company does not timely delivery a ROFR Purchase Notice, the Farids Group may sell the ROFR Shares to the proposed transferee identified in the ROFR Sale Notice at the ROFR Sale Price and on the other terms and conditions set forth in the ROFR Sale Documentation no later than three (3) business days following the date the Farids Group proposed to effect such Transfer in the ROFR Sale Notice (the "ROFR Transfer Period"). (e) If by the expiration of the ROFR Transfer Period, the Farids Group has not completed the Transfer of the ROFR Shares, in order for the Farids Group to Transfer such ROFR Shares (or any other Shares) it shall be necessary for a new ROFO Sale Notice or ROFR Sale Notice to be delivered, and the terms and provisions of this Article VII to be again complied with. The Farids Group shall not deliver more than one ROFR Sale Notice or ROFO Sale Notice in any thirty (30) day period. ARTICLE VIII MISCELLANEOUS Section 8.1 Notices. All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally, telecopied (upon telephonic confirmation of receipt), on the first business day following the date of dispatch if delivered by a recognized next day courier service, or on the third business day following the date of mailing if delivered by registered or certified mail, return receipt requested, postage prepaid. All notices hereunder shall be delivered as set forth below, or pursuant to such other instructions as may be designated in writing by the party to receive such notice: (a) if to the Company to: Rocky Mountain Chocolate Factory, Inc. 265 Turner Drive Durango, Colorado 81303 Attention: Chief Executive Officer and Chief Financial Officer 29 + + + + + +with a copy (which shall not constitute notice) to: Perkins Coie LLP 1900 Sixteenth Street, Suite 1400 Denver, Colorado 80202 Attention: Sonny Allison and Ned Prusse (b) If to the Farids Group to: Farids & Co. LLC 980 Hammond Dr., Suite 1000 Atlanta, GA 30328 USA Attention: Tariq Farid (c) If to EA to: Edible Arrangement, LLC 980 Hammond Dr., Suite 1000 Atlanta, GA 30328 USA Attention: Tariq Farid with a copy (which shall not constitute notice) to: DLA Piper LLP (US) 444 West Lake Street Suite 900 Chicago, IL 60606 Attention: Neal Aizenstein Section 8.2 Further Assurances. Each party hereto shall do and perform or cause to be done and performed all further acts and shall execute and deliver all other agreements, certificates, instruments and documents as any other party hereto reasonably may request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby. Section 8.3 Amendments and Waivers. Any provision of this Agreement may be amended or waived if, but only if, such amendment or waiver is in writing and is duly executed and delivered by the Company and the Farids Group. No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law. The execution of a joinder agreement to this Agreement by a Family Member of TF shall not constitute an amendment to this Agreement requiring the consent of any party hereto. 30 + + + + + +Section 8.4 Fees and Expenses. Each party hereto shall pay all of its own fees and expenses (including attorneys' fees) incurred in connection with this Agreement and the transactions contemplated hereby. Section 8.5 Successors and Assigns. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, provided, that, unless in connection with Permitted Transfers, neither party may assign, delegate or otherwise transfer any of its rights or obligations under this Agreement to any person without the express written consent of the other party hereto and any such assignment or other transfer shall be null and void; provided, further, that no such assignment shall relieve the assigning party of its obligations hereunder if such assignee does not perform such obligations. Prior to the receipt by the Company of adequate written notice of the Permitted Transfer of any Purchased Shares in accordance with the provisions of this Agreement and specifying the full name and address of the transferee, the Company may deem and treat the person listed as the holder of such shares in its records as the absolute owner and holder of such shares for all purposes, including the payment of dividends. Section 8.6 Governing Law. (a) This Agreement shall be governed and construed in accordance with the laws of the State of New York applicable to contracts made and wholly performed within such state, except for matters directly within the purview of the DGCL, which shall be governed by the DGCL. Each of the Farids Group and the Company hereby irrevocably and unconditionally consents to submit to the exclusive jurisdiction and venue of the United States District Court for the Southern District of New York and in the courts hearing appeals therefrom unless no basis for federal jurisdiction exists, in which event each party hereto irrevocably consents to the exclusive jurisdiction and venue of the Supreme Court of the State of New York, New York County, and the courts hearing appeals therefrom, for any action, suit or proceeding arising out of or relating to this Agreement and the transactions contemplated hereby. Each of the Farids Group and the Company hereby irrevocably and unconditionally waives, and agrees not to assert, by way of motion, as a defense, counterclaim or otherwise, in any such action, suit or proceeding, any claim that it is not personally subject to the jurisdiction of the aforesaid courts for any reason, other than the failure to serve process in accordance with this Section 8.6, that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise), and to the fullest extent permitted by applicable Law, that the action, suit or proceeding in any such court is brought in an inconvenient forum, that the venue of such action, suit or proceeding is improper, or that this Agreement, or the subject matter hereof, may not be enforced in or by such courts and further irrevocably waives, to the fullest extent permitted by applicable Law, the benefit of any defense that would hinder, fetter or delay the levy, execution or collection of any amount to which the party is entitled pursuant to the final judgment of any court having jurisdiction. Each of the Farids Group and the Company irrevocably and unconditionally waives, to the fullest extent permitted by applicable Law, any and all rights to trial by jury in connection with any action, suit or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby. 31 + + + + + +(b) Each of the Farids Group and the Company expressly acknowledges that the foregoing waivers are intended to be irrevocable under the laws of the State of New York, the State of Delaware and of the United States of America; provided, that consent by the Farids Group and the Company to jurisdiction and service contained in this Section 8.6 is solely for the purpose referred to in this Section 8.6 and shall not be deemed to be a general submission to said courts or in the State of New York other than for such purpose. Section 8.7 Ownership Limitation. The Farids Group shall not (unless specifically requested in writing by the Company, acting through a resolution of a majority of the Company's directors), directly or indirectly, and agrees to cause the Affiliates of the Farid Group to not, directly or indirectly, in any manner acquire, offer or propose to acquire, or agree to acquire, directly or indirectly, whether by purchase, tender or exchange offer, through the acquisition of control of another person, by joining a partnership, limited partnership, syndicate or other group (including any group of persons that would be treated as a single "person" under Section 13(d) of the Exchange Act), through swap or hedging transactions or otherwise, any securities of the Company, or any rights decoupled from the underlying securities of the Company that would result in the Farids Group (together with its Affiliates) owning, controlling or otherwise having any beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act, or any successor provision) of 19.99% or more of the fully diluted number of shares of Common Stock outstanding at such time; provided, however, that nothing herein will require Common Stock to be sold to the extent that the Farids Group and its Affiliates, collectively, exceed the ownership limit under this Section 8.7 as the result of any share repurchase or other Company action that reduces the number of outstanding shares of Common Stock on or after the date hereof; provided, further, that (a) this Section 8.7 shall not preclude Farids or EA from privately requesting a waiver of the provisions of Section 8.7, and (b) the provisions of this Section 8.7 shall terminate and be of no further force and effect if the Company enters into a definitive agreement with respect to, or publicly announces that it plans to enter into, a transaction involving all or a controlling portion of the Company's equity securities or all or substantially all of the Company's assets (whether by merger, consolidation, business combination, tender or exchange offer, recapitalization, restructuring, sale, equity issuance or otherwise). Section 8.8 Non-Disparagement. (a) Neither the Company nor any of its Affiliates shall in any manner, directly or indirectly, in any capacity or manner, make or cause to be made, or in any way encourage any other person to make or cause to be made, any public statement or public announcement, including in any document or report filed with or furnished to the SEC or through the press, media, analysts or other persons, that constitutes an ad hominem attack on or otherwise disparages, defames or slanders the Farids Group or any of its Affiliates or any of their respective successors or current or former members, partners, officers, directors or employees (it being understood and agreed that the restrictions in this Section 8.8(a) shall not apply to any member of the Board of Directors based upon discussions solely among other members of the Board of Directors and/or management of the Company); provided, that the limitations set forth in this Section 8.8(a) shall not prevent the Company or any of its Affiliates from (i) responding to any public statement or announcement made by the Farids Group or any of its Affiliates that was made in breach of Section 8.8(b) below or (ii) if solicited by a Third Party, making objective statements that reflect the Company's view with respect to factual matters concerning specific acts or determinations of the Farids Group or any of its Affiliates (or their respective current or former representatives) occurring after the date hereof. For the avoidance of doubt, a public statement or announcement shall only be deemed to be made by the Company if such public statement or announcement is made by (X) an executive officer or a member of the Board of Directors (other than a Director Designee) or (Y) an employee or representative of the Company authorized to make such statement or announcement on behalf of the Company. 32 + + + + + +(b) Neither the Farids Group nor any of its Affiliates shall in any manner, directly or indirectly, in any capacity or manner, make or cause to be made, or in any way encourage any other person to make or cause to be made, any public statement or public announcement, including in any document or report filed with or furnished to the SEC or through the press, media, analysts or other persons, that constitutes an ad hominem attack on or otherwise disparages, defames or slanders the Company or any of its Affiliates or any of their respective successors or current or former members, partners, officers, directors or employees; provided, that, the limitations set forth in this Section 8.8(b) shall not prevent the Farids Group or any of its Affiliates from (i) responding to any statement made by the Company or any of its Affiliates or representatives that was made in breach of Section 8.8(a) above or (ii) if solicited by a Third Party, making objective statements that reflect the Farids Group's or any of its Affiliates' view with respect to factual matters concerning specific acts or determinations of the Company, any of its Affiliates or any current or former representatives of the Company or any of its Affiliates occurring after the date hereof. For the avoidance of doubt, a public statement or announcement shall only be deemed to be made by the Farids Group or any of its Affiliates if such public statement or announcement is made by (X) a Farids manager, director or executive officer or an EA manager, director or executive officer (Y) an employee or representative of Farids or EA authorized to make such statement or announcement on behalf of Farids or EA, as applicable. Section 8.9 Non-Solicitation. (a) Each of EA, Farids and the Company shall not, and shall cause their respective controlled Affiliates to not, either directly or indirectly solicit, hire, or contract with any of the employees of the other party or its Affiliates during the Term (as defined in the Exclusive Supplier Operating Agreement) and for one (1) year following the termination or expiration thereof; provided that this Section 8.9(a) shall not apply with respect to any such employee who employment with the other party and its Affiliates has been terminated for a period in excess of nine (9) months. (b) Notwithstanding anything to the contrary in this Agreement, the restrictions regarding solicitation in this Section 8.9 shall not be deemed to apply to media advertisements of general circulation, open job fairs, the efforts of an employment search firm or other generalized means of publicizing a job opening, such as on a website or job board which, in each case, are not targeted primarily at the employees of the other party or its Affiliates; provided that this Section 8.9(b) shall not limit the restrictions or hiring set forth in Section 8.9(a). Section 8.10 Entire Agreement. This Agreement and the other Transaction Documents constitute the entire agreement between the parties with respect to the subject matter of this Agreement and supersedes all prior agreements and understandings, both oral and written, between the parties and/or their Affiliates with respect to the subject matter of this Agreement. 33 + + + + + +Section 8.11 Effect of Headings. The Article and Section headings herein are for convenience only and shall not affect the construction hereof. Section 8.12 Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable Law, such provision shall be deemed to be excluded from this Agreement and the balance of this Agreement shall be interpreted as if such provision were so excluded and shall be enforced in accordance with its terms to the maximum extent permitted by law. Section 8.13 Counterparts; Third Party Beneficiaries. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures were upon the same instrument. Facsimile and electronic (.PDF) signatures shall be sufficient to execute this Agreement. Except for Section 6.8 with respect to the underwriters of Registrable Securities, no provision of this Agreement shall confer upon any person other than the parties hereto any rights or remedies hereunder. Section 8.14 Survival. The representations, warranties, agreements and covenants contained herein shall survive the Closing. Section 8.15 Remedies. The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms. It is accordingly agreed that the parties shall be entitled to seek specific performance of the terms hereof, this being in addition to any other remedies to which they are entitled at law or equity. In the event of any dispute between the parties concerning the terms and provisions of this Agreement, the party prevailing in such dispute shall be entitled to collect from the other party all costs incurred in such dispute, including reasonable attorneys' fees. [Remainder of this page intentionally left blank] 34 + + + + + +IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed as of the date first written above. ROCKY MOUNTAIN CHOCOLATE FACTORY, INC. By: /s/ Bryan J. Merryman Name: Bryan J. Merryman Title: Chief Executive Officer and Chief Financial Officer FARIDS & CO. LLC By: /s/ Tariq Farid Name: Tariq Farid Title: Chief Executive Officer EDIBLE ARRANGEMENTS, LLC By: /s/ Tariq Farid Name: Tariq Farid Title: Chief Executive Officer [Signature Page to Strategic Alliance Agreement] + + + + + +EXHIBIT A FORM OF JOINDER AGREEMENT This JOINDER AGREEMENT (this "Joinder Agreement") is executed pursuant to the terms of the Strategic Alliance Agreement, dated as of December 20, 2019, by and among Farids & Co. LLC, a Delaware limited liability company ("Farids"), Edible Arrangements, LLC, a Delaware limited liability company, and Rocky Mountain Chocolate Factory, Inc., a Delaware corporation (the "Company"), a copy of which is attached hereto and is incorporated herein by reference (the "Agreement"), by the undersigned (the "Farids Transferee"). Capitalized terms used but not defined herein have the meanings set forth in the Agreement. By execution and delivery of this Joinder Agreement, the Farids Transferee agrees as follows: SECTION 1. Acknowledgment. The Farids Transferee acknowledges that it has acquired Purchased Shares from a member of the Farids Group pursuant to a Permitted Transfer. SECTION 2. Agreement. The Farids Transferee (a) agrees that the Purchased Shares it owns shall be bound by and subject to the terms of the Agreement to the same extent as if such Farids Transferee were a member of the Farids Group, (b) hereby adopts the Agreement with the same force and effect as if it were originally a member of the Farids Group and (c) shall constitute a member of the "Farids Group" under the Agreement. SECTION 3. Notice. Any notice required to be provided by the Agreement shall be given to the Farids Transferee at the address of Farids Group listed in the Agreement. SECTION 4. Governing Law. This Joinder Agreement and the rights of the parties hereto shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed therein. Executed and dated this day of . Farids Transferee: [INSERT NAME] By: [Title] Acknowledged and Agreed to by ROCKY MOUNTAIN CHOCOLATE FACTORY, INC. By: [Title] A-1 + + + + + +EXHIBIT B EXCLUSIVE SUPPLIER OPERATING AGREEMENT [Attached] B-1 + + + + + +EXHIBIT C WARRANT [Attached] C-1 + + + + + +EXHIBIT D INDEMNIFICATION AGREEMENT [Attached] D-1 + + + + + +EXHIBIT E AMENDMENT E-1 \ No newline at end of file diff --git a/full_contract_txt/RUBIOSRESTAURANTSINC_03_31_2008-EX-10.75-SPONSORSHIP AGREEMENT.txt b/full_contract_txt/RUBIOSRESTAURANTSINC_03_31_2008-EX-10.75-SPONSORSHIP AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..92416f323080e35a254ad00e7f647d48e6ea833e --- /dev/null +++ b/full_contract_txt/RUBIOSRESTAURANTSINC_03_31_2008-EX-10.75-SPONSORSHIP AGREEMENT.txt @@ -0,0 +1,89 @@ +2008 Sponsorship Agreement- Renewal Sponsor + +Exhibit 10.75 SPONSORSHIP AGREEMENT AGREEMENT SUMMARY + +SPONSOR: Name: Rubio's Fresh Mexican Grill Phone: 760/602-3611 Address: 1902 Wright Place, Suite 300 Carlsbad, CA 92008 E-mail: *** Attn: Lawrence A. Rusinko + +SPONSORSHIP BENEFITS: San Diego Ballpark Funding LLC ("SDBF") shall provide Sponsor with the following benefits, subject to the terms of the General Provisions attached hereto (the "General Provisions"): Signage benefits oOne Terrace Level fascia sign. The sign is approximately 3' x 16'. SDBF to pay production costs for installation of new signage. SDBF shall install this sign on or before March 28, 2008. Promotional benefits oPadres Magazine. Sponsor shall be entitled to one (1) full page, four-color advertisement, which advertisement is subject to the prior written approval of SDBF in its reasonable discretion, in each issue of the Padres Magazine published during the regular season of the Term. Hospitality benefits oSeason Tickets. SDBF shall provide Sponsor with season tickets for *** seats located in *** during the regular season of the Term. TERM: The term (the "Term") shall commence on November 1, 2007 and end on October 31, 2008 (unless terminated earlier in accordance with the General Provisions). ANNUAL PAYMENT: + + Sponsor shall pay $*** to SDBF pursuant to the following: $ *** due on or before April 30, 2008 $ *** due on or before June 30, 2008 $ *** due on or before August 31, 2008 *** Portions of this page have been omitted pursuant to a request for Confidential Treatment filed separately with the Commission. + + + + + + Sponsorship Agreement- Renewal Sponsor Agreement Summary Page 2 This Sponsorship Agreement (the "Agreement") consists of (1) this Agreement Summary (the "Agreement Summary") and (2) the General Provisions. Sponsor acknowledges and agrees to be bound by the General Provisions, which are hereby incorporated into this Agreement. In the event of a conflict between the terms of this Agreement Summary and the General Provisions, the terms of the General Provisions shall prevail. Any capitalized term used herein and not otherwise defined herein shall have the meaning set forth in the General Provisions. + +If the Annual Payment set forth in this Agreement Summary for any year during the Term is more than $500,000, a condition precedent to all obligations herein, except for those obligations contained in certain provisions specified in the General Provisions, shall be the approval of this Agreement by the requisite vote of the holders of the notes issued by SDBF under that certain Note Purchase Agreement dated as of May 15, 2002 (the "Noteholders"). In the event such approval is not obtained by twenty (20) days after the date hereof, SDBF shall give Sponsor prompt written notice thereof, and this Agreement shall be of no further force and effect. + +Notwithstanding colloquial descriptions of Sponsor as a "partner," nothing herein shall be construed as establishing a legal partnership, joint venture or agency relationship between SDBF and Sponsor or between Padres L.P. (the "Padres") and Sponsor or establishing a joint venture or agency relationship between the parties. + +Upon execution by both parties, this Agreement is a binding legal contract. SAN DIEGO BALLPARK FUNDING LLC SPONSOR: Rubio's Fresh Mexican Grill By: /s/ James M. Ballweg + +James M. Ballweg Its: Vice President/Sales Date: 3/21/08 + +By: /s/ LA Rusinko + +Lawrence A. Rusinko Its: SVP of Marketing & Product Development Date: 3/18/08 + + + + + + + + + +2008 Sponsorship Agreement- Renewal Sponsor SPONSORSHIP AGREEMENT GENERAL PROVISIONS + +This Sponsorship Agreement (the "Agreement") consists of (1) the attached Agreement Summary and (2) these General Provisions. In the event of a conflict between the terms of the Agreement Summary and these General Provisions, the terms of these General Provisions shall prevail. 1. Sponsorship Benefits. During the Term, for and in consideration of the Payments set forth herein, SDBF will furnish to Sponsor Sponsorship Benefits set forth in the Agreement Summary, subject to any limitations and conditions imposed by the Office of the Commissioner of Baseball generally or with respect to specific events such as nationally-televised games, All-Star Games, playoff games and World Series Games, provided, however, that in no event shall SDBF be obligated to furnish Sponsorship Benefits for any period after a default by Sponsor in payment when due of any amount due hereunder. Without the express written permission of SDBF acting in its sole discretion, Sponsor shall not resell, transfer or distribute any of Sponsorship Benefits. 2. Term. The Term shall commence and end on the dates set forth in the Agreement Summary, unless terminated earlier in accordance with this Agreement, provided, however, that in no event shall the Term extend beyond the term of the Joint Use and Management Agreement by and between the City of San Diego and Padres, L.P. dated as of February 1, 2000. 3. Payments. a. In consideration of the Sponsorship Benefits to be furnished by SDBF to Sponsor hereunder, Sponsor shall pay to SDBF the Annual Payments set forth in the Agreement Summary on the dates set forth therein. Any payment due pursuant to this Section that is not received by SDBF within fifteen (15) days after such payment is due shall bear interest from the date the payment was due until paid, at a per annum rate of interest equal to the prime rate of interest as published in the Wall Street Journal, plus five (5) percentage points, or if such interest rate is not permitted by applicable law, at the highest non-usurious interest rate permitted by applicable law. At its sole option, SDBF may terminate this Agreement in the event that a payment required hereunder is not made within fifteen (15) days of the date such payment is due and may exercise all other rights and remedies available to SDBF. b.All payments shall be net of any agency fees or commissions that may be payable by Sponsor to its advertising agencies in connection with this Agreement. In addition, all taxes and other charges of any nature (other than federal, state or local income taxes on the income of SDBF) which may be levied, assessed or otherwise imposed in connection with the rights granted under this Agreement by any federal, state or local governmental authority shall be borne by Sponsor and shall not be deducted from the payments due hereunder. c. In no event shall Sponsor be permitted to set off any amounts SDBF may owe to Sponsor under this Agreement or otherwise. d. Forms of payment accepted are corporate check, cashier's check and wire transfer only. 4. Approval by Noteholders. If the Annual Payment set forth in the Agreement Summary for any year during the Term is more than $500,000, a condition precedent to all obligations herein, except for those obligations contained in this Section 4 and in Sections 11-26, shall be the approval of this Agreement by the requisite vote of the Noteholders. In the event such approval is not obtained by twenty (20) days after the date hereof, SDBF shall give Sponsor prompt written notice thereof, and this Agreement shall be of no further force and effect. 5. Responsibility for Materials; Advertising Copy. a.SDBF shall be responsible, at its sole cost and expense, for (i) the initial installation, on or before the beginning of the Term, unless otherwise stated in the Agreement Summary, of the advertising copy in or on any signage to be furnished hereunder (the "Signage"), (ii) maintaining the fixed panel structures and (if applicable) the lighting system for the Signage and (iii) furnishing any fan giveaway items to be furnished hereunder (the "Promotional Items") (subject to any limitations with respect thereto as set forth in the Agreement Summary or agreed to by the parties) and any promotional materials prepared by SDBF with respect to the Promotional Items. + + + + + + + +Sponsorship Agreement- Renewal Sponsor General Provisions Page 2 b. Sponsor shall be responsible, at its sole cost and expense, for (i) the design, production and preparation of all advertising copy and commercial messages to be displayed, published, broadcast or telecast pursuant to this Agreement in accordance with the deadlines established by SDBF, (ii) furnishing to SDBF Sponsor's name, brand names, trademarks, service marks, logos or other identification, for use in or the Promotional Items, promotional materials prepared by SDBF with respect to the Promotional Items, and any advertisements or commercial messages to be furnished hereunder, and (iii) maintaining the advertising copy displayed in or on the Signage in good and attractive order, repair and condition throughout the Term, including the cost of painting or repainting the advertising copy displayed on the Signage to the extent necessary in the reasonable judgment of SDBF. c. All advertising copy and commercial messages displayed, published, broadcast or telecast pursuant to this Agreement, and all characteristics thereof (including without limitation design, layout, elevation, configuration, content, size and color), must be approved in advance by SDBF and Major League Baseball. d. Sponsor shall have the right to change or modify any advertising copy displayed pursuant to this Agreement, subject to SDBF's right of approval of all proposed changes or modifications (and the timing thereof). Any changes or modifications of advertising copy shall be designed, produced and prepared and, if applicable, erected and installed, at Sponsor's sole cost and expense. Sponsor agrees to provide SDBF with all proposed changes or modifications of advertising copy at least thirty (30) days prior to the proposed date of display thereof. 6. Display of Signage. All advertising copy to be displayed on Signage shall be displayed on such Signage (and with respect to Signage designed to be illuminated, illuminated during night events) during all regular-season San Diego Padres baseball games (each, a "Padres Game") scheduled to be played at the ballpark located on Parcel 1 of Parcel Map No. 18855, in the City of San Diego, County of San Diego, State of California, according to the map thereof filed in the Office of the County Recorder or San Diego County, On December 7, 2001 (the "Ballpark") and during other events held at the Ballpark, except for the following in the sole and absolute discretion of SDBF: (1) events during which advertising is prohibited by federal, state or local laws or regulations, (2) events with respect to which the display of the Signage is inappropriate (e.g., religious services, political conventions, television or film production or private events with conflicting interests) or impractical (e.g., events at which staging obscures or prevents the display of Signage), and (3) with respect to illumination, events where blackout conditions are required by the nature of the event (e.g., fireworks displays, concerts, and television or film production). The location, size, content and display of all Signage are subject to all applicable laws, including without limitation any applicable sign ordinance, and subject to Major League Baseball ("MLB") requirements and conditions, whether applicable generally or with respect to specific events such as nationally- televised games, World Baseball Classic games, All-Star Games, playoff games and World Series games and whether applicable to all categories of advertiser or only to certain categories. 7. Use of Trademarks and Service Marks. Sponsor hereby grants to SDBF a limited license to display Sponsor's name, brand names, trademarks, service marks, logos and other identification in or on the Promotional Items, promotional materials prepared by SDBF with respect to the Promotional Items, and any advertisements or commercial messages to be furnished hereunder. Except as expressly provided herein, neither party shall have the right to use, or obtain an interest in, the name, brand names, trademarks, service marks, logos or other identification of the other party or its affiliates without the other party's prior written consent. All advertising or promotional materials displayed, distributed or otherwise used pursuant to this Agreement in conjunction with the name, logos, trademarks, service marks or other identification of the Padres must be approved in advance by the Padres. 8. Indemnity; Insurance; and Assumption of the Risk. a. SDBF agrees to indemnify, protect, defend, and hold harmless Sponsor, its affiliates, predecessors and successors, owners, agents, partners, officials, employees and representatives (collectively, the "Sponsor Parties") from and against any and all actions, demands, liabilities, losses, claims, damages, costs or expenses, including without limitation court costs and attorneys' fees (collectively, the "Claims"), arising from the negligence or willful misconduct of SDBF or any of its affiliates, predecessors and successors, owners, agents, partners, officials, employees or representatives. In the event that any Claim is brought against any of Sponsor Parties, then, upon receipt of notification of such Claim, SDBF will assume the defense of such Claim and, upon the request of one or more of Sponsor Parties, will permit such party or parties to participate in the defense, such participation to be at such party's expense. This provision shall survive any cancellation or termination of this Agreement as to activities which occurred while this Agreement was in force. + + + + + + + +Sponsorship Agreement- Renewal Sponsor General Provisions Page 3 b. Sponsor agrees to indemnify, protect, defend, and hold harmless SDBF, the City of San Diego, the Public Facilities Financing Authority and their respective affiliates, predecessors and successors, owners, agents, partners, officials, employees and representatives (collectively, the "Padres Parties") from and against any and all Claims (i) for libel, slander, defamation, invasion of privacy, improper trade practices, illegal competition, infringement of trademark, trade name, copyright, licenses or other proprietary rights, or unfair competition, arising from or alleged to arise from the display, publication, broadcast, telecast or distribution of any advertising copy or commercial message furnished by Sponsor Parties, or any name, brand names, trademarks, service marks, logos or other identification furnished by Sponsor Parties; (ii) arising from any promotion run in connection with this Agreement; and (iii) arising from the negligence or willful misconduct of any of Sponsor Parties. In the event that any Claim is brought against any of the Padres Parties, then, upon receipt of notification of such Claim, Sponsor will assume the defense of such Claim and, upon the request of one or more of the Padres Parties, will permit such party or parties to participate in the defense, such participation to be at such party's expense. This provision shall survive any cancellation or termination of this Agreement as to activities which occurred while this Agreement was in force. c. Sponsor must obtain, and continuously maintain, at its own expense, the following insurance policies: 1. Workers' Compensation in compliance with California's laws, including Employers' Liability with minimum limits of: $ *** Each Accident; $ *** Disease - Each Employee; $ *** Disease - Policy Limit. + + 2. An Insurance Services Office occurrence based Commercial General Liability Insurance Policy, including contractual liability and products/completed operations liability coverage with minimum limits of: + +$ *** Each Occurrence; $ *** General Aggregate; $ *** Products/Completed Operations Aggregate. + +All insurance policies must be issued by an admitted insurance carrier with an A.M. Best rating of A-8 or better. SDBF, Padres LP, the City of San Diego and each of their subsidiary or affiliated companies and its and their directors, officers and employees must be named as Additional Insureds under the Commercial General Liability, Automobile Liability and Umbrella Liability Policies. All of these policies must contain Cross Liability Endorsements, or their equivalent. Further, coverage for the Additional Insureds shall apply on a primary basis irrespective of any other insurance, whether collectible or not. All policies shall be endorsed to provide a Waiver of Subrogation in favor of SDBF. In the event of cancellation, non-renewal or material modification SDBF shall receive thirty (30) days written notice thereof. Sponsor shall provide SDBF with certificates of insurance evidencing compliance with all insurance provisions noted above prior to the commencement of the sponsorship and annually prior to the expiration of each required insurance policy. + +9. Compliance with Rules, Regulations and Policies; Conduct. All use by Sponsor and Sponsor's invitees of any hospitality benefits granted hereunder shall be subject to the rules, regulations and policies established from time to time by SDBF and/or the Padres and may be revoked in the event of the failure of Sponsor or Sponsor's invitees to comply with such rules, regulations and policies. At the request of SDBF, Sponsor will enter into SDBF's standard-form Founders Club Agreements with respect to any Founders Club or premium seating benefits furnished hereunder. With respect to any hospitality benefits granted hereunder, Sponsor and Sponsor's invitees shall maintain proper decorum, comply with all laws, rules and regulations of all governmental authorities, not suffer or permit the continuation of any use or manner of use of the hospitality benefits in violation of any applicable Founders Club Agreements, not create any nuisance, and not take any action which either diminishes hazard insurance coverage for the Ballpark or increases the premium payable for such insurance. Sponsor and Sponsor's invitees shall be bound by and observe the terms and conditions upon which any admission tickets are issued or sold. *** Portions of this page have been omitted pursuant to a request for Confidential Treatment filed separately with the Commission. + + + + + + Sponsorship Agreement- Renewal Sponsor General Provisions Page 4 10. Temporary Interruption. a. Except as otherwise provided in this Section 10, there shall be no effect on the obligations of SDBF and Sponsor as a result of a temporary failure properly to provide Sponsorship Benefits pursuant to this Agreement. The provisions of subsections (b) through (f) of this Section 10 shall constitute the sole remedy for the inability of SDBF to provide Sponsorship Benefits for any reason other than intentional breach by SDBF. b. If any portion of the Signage is not properly displayed (including Signage that is damaged or not properly illuminated) during more than *** Padres Games in a calendar year for any reason whatsoever, whether within or beyond the reasonable control of SDBF or the Padres, including without limitation a work stoppage or temporary unavailability of the Ballpark, SDBF shall have the option, on written notice to Sponsor, (i) to extend the Term beyond its expiration to include the number of events first taking place at the Ballpark after such expiration as may be necessary to make up the number of Padres Games in excess of *** such games during which such Signage was not properly displayed, (ii) to provide substitute sponsorship benefits to Sponsor with a value at least equal to the amount paid for the affected Signage for the Padres Games in excess of *** games during which such Signage was not properly displayed, or (iii) to refund to Sponsor a pro-rata portion of that part of the amount paid by Sponsor for the affected Signage, which shall be calculated by multiplying such part of the amount paid for the affected Signage by a fraction, the numerator of which shall be the number of Padres Games during which such Signage was not properly displayed minus *** , and the denominator of which shall be eighty-one (81). All refunds shall be paid within thirty (30) days after the end of the calendar year to which such refund applies. c. If a giveaway or promotional event scheduled to be conducted pursuant to this Agreement is not conducted for any reason whatsoever, whether within or beyond the reasonable control of SDBF or the Padres, including without limitation a work stoppage or temporary unavailability of the Ballpark, SDBF shall have the option, on written notice to Sponsor, (i) to reschedule such giveaway or promotional event on a date satisfactory to Sponsor during the season in which the promotional event was scheduled or, if no such date is available, during the succeeding season, (ii) to provide substitute sponsorship benefits to Sponsor with a value at least equal to the amount paid by Sponsor for the missed giveaway or promotional event, or (iii) to refund to Sponsor the amount paid by Sponsor for the missed giveaway or promotional event. All refunds shall be paid within thirty (30) days after the end of the calendar year to which such refund applies. d. If a promotional program is scheduled to take place pursuant to this Agreement over more than *** Padres Games during a calendar year, and more than *** of the Padres Games in a calendar year that are part of such promotional program are not played for any reason whatsoever, whether within or beyond the reasonable control of SDBF or the Padres, including without limitation a work stoppage or temporary unavailability of the Ballpark, SDBF shall have the option, on written notice to Sponsor, (i) to extend the promotional program to make up for the number of Padres Games in excess of *** such games which were not played, either in the season during which the promotional program was scheduled to take place or in the succeeding season, (ii) to provide substitute sponsorship benefits to Sponsor with a value at least equal to the amount paid by Sponsor for that portion of the promotional program missed in excess of *** games, or (iii) to refund to Sponsor a pro-rata portion of the amount paid for such promotional program, which shall be calculated by multiplying the amount paid by Sponsor by a fraction, the numerator of which shall be the number of Padres Games not played minus *** , and the denominator of which shall be the number of Padres Games that are part of the promotional program for such calendar year. All refunds shall be paid within thirty (30) days after the end of the calendar year to which such refund applies. *** Portions of this page have been omitted pursuant to a request for Confidential Treatment filed separately with the Commission. + + + + + + Sponsorship Agreement- Renewal Sponsor General Provisions Page 5 e. If advertising scheduled to be published, broadcast, telecast or displayed pursuant to this Agreement is not published, broadcast, telecast or displayed for any reason whatsoever, whether within or beyond the reasonable control of SDBF or the Padres, including without limitation a work stoppage or temporary unavailability of the Ballpark, SDBF shall have the option, on written notice to Sponsor, (i) to provide Sponsor with the missed advertising in alternate magazine issues or broadcast availabilities or, for advertising scheduled to be displayed during Padres Games, in alternate Padres Games, (ii) to provide substitute sponsorship benefits to Sponsor with a value at least equal to the amount paid by Sponsor for the advertising missed, or (iii) to refund to Sponsor a pro-rata portion of the amount paid by Sponsor for the advertising, which shall be calculated by multiplying the amount paid by a fraction, the numerator of which shall be the number of such missed messages, and the denominator of which shall be the number of messages which Sponsor was to receive. f. In no event shall the aggregate amount of remediation pursuant to subsections (b) through (e) of this Section for any calendar year exceed the Annual Payment made by Sponsor for such calendar year. 11. Limitation on Damages. The parties agree that neither party shall be liable for, and in no event whatsoever shall damages or other award based on this Agreement or the performance or failure to perform any provision hereof include, any recovery for loss-of-profits, loss-of-business, special, indirect, consequential or punitive damages. 12. Default. If (i) Sponsor fails to pay any amounts within fifteen (15) days of the date such payment is due pursuant to this Agreement, (ii) Sponsor otherwise defaults in the performance or observance of Sponsor's duties and obligations under this Agreement and fails to cure such default within fifteen (15) days after notice thereof by SDBF, or (iii) Sponsor makes an assignment of substantially all of its assets for the benefit of creditors, is adjudicated bankrupt, files a voluntary petition in bankruptcy or a voluntary petition or an answer seeking reorganization, arrangement, readjustment of its debts or for any other relief under Title 11 of the United States Code or any successor or other federal or state insolvency law ("Bankruptcy Law"), has filed against it an involuntary petition in bankruptcy or seeking reorganization, arrangement, readjustment of its debts or for any other relief under any Bankruptcy Law, which petition is not discharged within thirty (30) days, or applies for or permits the appointment of a receiver or trustee for its assets, SDBF may, at its option, with or without notice or demand, (x) terminate the rights of Sponsor under this Agreement, whereupon SDBF shall have no further obligation of any kind to Sponsor, and Sponsor shall have no right to recovery or offset of any amounts previously paid to SDBF under this Agreement, and (y) exercise all other rights and remedies available to SDBF. Any notice required to be given hereunder shall be in lieu of, and not in addition to, any notice required under California Code of Civil Procedure Section 1161 or any similar or successor law. 13. No Legal Partnership. Notwithstanding colloquial descriptions of Sponsor as a "partner," nothing herein shall be construed as establishing a legal partnership, joint venture or agency relationship between SDBF and Sponsor or between the Padres and Sponsor. Neither SDBF nor the Padres has authority to bind or act in any respect on behalf of Sponsor, and Sponsor does not have authority to bind or act in any respect on behalf of SDBF or the Padres. 14. Exclusivity. No marketing exclusivity in any category or with respect to any competitors of Sponsor is conferred or implied by this Agreement except to the extent explicitly set forth in the Agreement Summary. Any marketing exclusivity set forth in the Agreement Summary shall not preclude or prevent (a) signage, advertising and promotional arrangements made by the Office of the Commissioner of Baseball with respect to nationally-televised games, All-Star Games, World Baseball Classic games, playoff games and World Series games, (b) licensing arrangements made by Major League Baseball Properties, Inc. with respect to such category, (c) advertising with respect to such category in game programs, yearbooks, scorecards and similar publications which are sold on the day of an event other than Padres home games, (d) the display before, during and after an event of displays, temporary in nature, erected by an event sponsor, promoter, broadcaster or participant, even though such display may constitute advertising with respect to such category, (e) promotional messages displayed on a scoreboard or video board which give the name of the sponsor of Ballpark day-of-event promotions at events other than Padres home games or promote sale of event-day programs (including identifying program sponsors), even though such messages may identify companies in such category and (f) promotional messages displayed on a scoreboard or video board that recognize groups in attendance and make similar incidental references, even though such messages may identify companies in such category. + + + + + + Sponsorship Agreement- Renewal Sponsor General Provisions Page 6 15. Compliance with Laws. This Agreement shall be subject to all federal, state and local laws, regulations and ordinances, either presently in existence or as may be enacted, made or enforced after the effective date of this Agreement, including the regulations and actions of all governmental agencies or commissions. 16. Subservience. Notwithstanding any other provision of this Agreement, this Agreement and any rights or exclusivities granted by SDBF hereunder shall in all respects be subordinate to each of the following, as may be amended from time to time (collectively, "MLB Documents"): (i) any present or future agreements entered into by, or on behalf of, any of the MLB entities or affiliates, or the member Clubs acting collectively, including, without limitation, agreements entered into pursuant to the Major League Constitution, the American and National League Constitutions, the Professional Baseball Agreement, the Major League Rules, the Interactive Media Rights Agreement, and each agency agreement and operating guidelines among the MLB Clubs and an MLB entity, or (ii) the present and future mandates, rules, regulations, policies, bulletins or directives issued or adopted by the Commissioner or the MLB entities. The issuance, entering into, amendment, or implementation of any of the MLB Documents shall be at no cost or liability to any MLB entity or affiliate or to any individual or entity related thereto. The territory within which Sponsor is granted rights is limited to, and nothing herein shall be construed as conferring on Sponsor rights in areas outside of, the Home Television Territory of the Padres, as established and amended from time to time. No rights, exclusivities or obligations involving the Internet or any interactive or on-line media (as defined by the MLB entities) are conferred by this Agreement, except as are specifically approved in writing by the applicable MLB entity. 17. Integration. This Agreement is the final, complete and exclusive statement and expression of the agreement among the parties hereto with relation to the subject matter of this Agreement, it being understood that there are no oral representations, understandings or agreements covering the same subject matter as this Agreement. This Agreement supersedes, and cannot be varied, contradicted or supplemented by evidence of any prior or contemporaneous discussions, correspondence, or oral or written agreement of any kind. All exhibits hereto are incorporated herein by reference. 18. Severability. In case any provision of this Agreement shall be invalid, illegal or unenforceable, such provision shall be severed from this Agreement. The validity, legality and enforceability of the remaining provisions of this Agreement shall not in any way be affected or impaired thereby. 19. Sophistication of Parties. Each party to this Agreement represents that it is a sophisticated commercial party capable of understanding all of the terms of this Agreement, that it has had an opportunity to review this Agreement with its counsel, and that it enters this Agreement with full knowledge of the terms of the Agreement. 20. No Waiver. No delay of or omission in the exercise of any right, power or remedy accruing to any party under this Agreement shall impair any such right, power or remedy, nor shall it be construed as a waiver of any future exercise of any right, power or remedy. 21. Notices. All notices, demands, consents and approvals that may or are required to be given by any party to another hereunder shall be in writing and shall be deemed to have been fully given by personal delivery or when deposited in the United States mail, certified or registered, postage prepaid, and addressed to the party to be notified, if to Sponsor, at the address specified on the Agreement Summary, and if to SDBF, at PETCO Park, 100 Park Blvd, San Diego, CA 92101, Attn: General Counsel, or to such other place as the party to be notified may from time to time designate by at least fifteen (15) days' notice to the notifying party. 22. Consent to Assignment. Sponsor hereby acknowledges and irrevocably consents to (a) the assignment of this Agreement by SDBF to the Bank of New York Trust Company of Florida, N.A., as collateral trustee (the "Collateral Trustee") under the Trust and Security Agreement, dated as of May 15, 2002, among SDBF, the Padres and the Collateral Trustee, and (b) the grant by SDBF to the Collateral Trustee of a security interest in this Agreement and all monies payable or distributable under this Agreement, subject to the terms of the Trust and Security Agreement. Sponsor shall not claim prevention of or interference with performance of Sponsor's obligations pursuant to this Agreement or the suspension or termination of Sponsor's obligations under this Agreement as the result of any default under this Agreement, without first giving a copy of any notice of default or termination to the Collateral Trustee and providing the Collateral Trustee with the opportunity to cure any such default within one hundred twenty (120) days after the date of such notice. Such notice shall be in writing and shall be deemed to have been given (i) when presented personally, (ii) when delivered by private overnight courier service (e.g., Federal Express), delivery charges and fees prepaid, or (iii) when received, if deposited in a regularly maintained receptacle for the United States Postal Service, postage prepaid, registered or certified, return receipt requested, addressed to the Collateral Trustee at the address indicated below (or such other address as the Collateral Trustee may have specified by written notice delivered in accordance herewith): + + + + + + Sponsorship Agreement- Renewal Sponsor General Provisions Page 7 The Bank of New York Trust Company of Florida, N.A. 10161 Centurion Parkway Jacksonville, FL 32256 Attention: Corporate Trust Department + +Sponsor shall not enter into or consent to any supplement, amendment or other modification of this Agreement that affects the rights of the Collateral Trustee under this Section without the prior written consent of the Collateral Trustee. 23. Assignment. Except as provided in Section 22, no party shall assign this Agreement without the prior written approval of the other party, provided, however, that without obtaining such prior written approval, (a) SDBF may assign this Agreement to a transferee of the Padres' MLB franchise or to an affiliate of the Padres, and (b) Sponsor may assign this Agreement to an affiliate of Sponsor, provided that Sponsor shall continue to be obligated to SDBF for performance of Sponsor's obligations hereunder. 24. Jurisdiction, Venue and Service of Process. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO MAY BE BROUGHT IN THE COURTS OF THE STATE OF CALIFORNIA, COUNTY OF SAN DIEGO OR ANY COURT OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF CALIFORNIA, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH PARTY HEREBY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF SUCH COURTS. THE PARTIES IRREVOCABLY WAIVE ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH ANY OF THEM MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS. EACH PARTY IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF SUCH COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO EACH OF THE OTHER PARTIES AT ITS ADDRESS PROVIDED HEREIN, SUCH SERVICE TO BECOME EFFECTIVE THIRTY (30) DAYS AFTER SUCH MAILING. 25. Facsimile Signatures and Counterparts. The parties agree that this Agreement will be considered signed when the signature of a party is delivered by facsimile transmission. Such facsimile signature shall be treated in all respects as having the same effect as an original signature. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which, taken together, shall constitute one and the same instrument. 26. Amendments. Except as otherwise provided herein, all amendments to this Agreement shall be in writing and executed by both parties. 27. Governing Law. This Agreement shall be interpreted and enforced according to the laws of the State of California without regard to principles of conflict of laws. \ No newline at end of file diff --git a/full_contract_txt/RaeSystemsInc_20001114_10-Q_EX-10.57_2631790_EX-10.57_Co-Branding Agreement.txt b/full_contract_txt/RaeSystemsInc_20001114_10-Q_EX-10.57_2631790_EX-10.57_Co-Branding Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..38705517a1f8d2cbebf3b0dffb7824db32336ce3 --- /dev/null +++ b/full_contract_txt/RaeSystemsInc_20001114_10-Q_EX-10.57_2631790_EX-10.57_Co-Branding Agreement.txt @@ -0,0 +1,321 @@ +CO-BRANDING AGREEMENT (FORM) + + This CO-BRANDING AGREEMENT (the "Agreement") is made and entered into as of Nov 5, 1999, (the "Effective Date") by and between NETTAXI Online Communities, Inc., a Delaware corporation with principal offices at 2165 S. Bascom Avenue, Campbell, California 95008 ("NETTAXI"), and Solutions Media, Inc., dba SpinRecords.com a Delaware Corporation, with offices at 11440 West Barnardo Ct., Suite 170, San Diego, CA 32127 ("SpinRecords.com" or "Client"). + + RECITALS + + A. NETTAXI is in the business of providing entertainment, education, and information services over the world wide web through its Internet web site at http://www.NETTAXI.com. + + B. SpinRecords.com is in the business of providing entertainment and information services over the World Wide Web through its internet website at http://www.spinrecords.com. + + C. NETTAXI and SpinRecords.com desire co-brand their services under the terms and conditions set forth herein. + + AGREEMENT + + NOW, THEREFORE, in consideration of the mutual promises contained herein, the parties hereby agree as follows: + +1. DEFINITIONS + + 1.1 "Spinrecords.com Brand Features" means the SpinRecords.com name and logo and other trademarks, trade names and service names including but not limited to those set forth on Exhibit A attached hereto and incorporated herein --------- by reference and all Intellectual Property Rights related thereto. SpinRecords.com Brand Features shall include any derivatives, improvements or modifications thereto or thereof and any Intellectual Property rights related thereto. + + 1.2 "SpinRecords.com Pages" means the SpinRecords.com Web-based pages that incorporate certain SpinRecords.com services, as the same may be updated or modified from time to time in SpinRecords.com's sole discretion, currently located at http://www.spinrecords.com. + + 1.3 "Impressions" means the loading of all or part of a Web page into the browser of a User. + + 1.4 "Intellectual Property Rights" means all current and future worldwide trademark, patents and patent rights, utility models, copyrights, mask work rights, trade secrets, and all other intellectual property rights and the related documentation or other tangible expression thereof. + + 1.5 "NETTAXI Brand Features" means the NETTAXI name and logo and any other trademarks, trade names and service names of NETTAXI, including but not limited to those set forth on Exhibit B attached hereto and incorporated herein --------- by reference and all Intellectual Property Rights related thereto. NETTAXI Brand Features shall include any derivatives, improvements or modifications thereto or thereof and any Intellectual Property rights related thereto. + + 1.6 "NETTAXI Pages" means the NETTAXI's Web-based pages that incorporate certain NETTAXI services, as the same may be updated or modified from time to time in NETTAXI's sole discretion, currently located at http://www.NETTAXI.com. + + 1.7 "Statement of Work" means the Statement of Work attached hereto as Exhibit C and incorporated herein by reference. ---------- + + 1.8 "User" means a person using a software browser to view the World Wide Web. + +2. CO-BRANDING, MARKETING AND PROMOTION + + 2.1 The SpinRecords.com Pages. SpinRecords.com shall brand the --------------------------- + +Source: RAE SYSTEMS INC, 10-Q, 11/14/2000 + + + + + +SpinRecords.com Pages with the NETTAXI Brand Features in the manner set forth in the Statement of Work. NETTAXI will provide electronic copies of the NETTAXI Brand Features upon SpinRecords.com's request. All Spinrecords.com Pages shall display appropriate intellectual property legends, including but not limited to the copyright notice and trademark references. + + 1 + + 2.2 The NETTAXI Pages. NETTAXI shall brand certain NETTAXI Pages with ------------------ the SpinRecords.com Brand Features in the manner set forth in the Statement of Work. SpinRecords.com will provide electronic copies of the SpinRecords.com Brand Features upon NETTAXI's request. All NETTAXI Pages shall display appropriate intellectual property legends, including but not limited to the copyright notice and trademark references. NETTAXI shall not be obligated to co-brand those pages containing content which NETTAXI has branded with a third party which: (i) NETTAXI is prohibited from co-branding pursuant to another agreement; (ii) NETTAXI is technically unable to co-brand; or (iii) are commercially unreasonable, in NETTAXI's discretion, to co-brand. + + 2.3 Marketing by SpinRecords.com. Throughout the term of this ------------------------------ Agreement, SpinRecords.com shall use reasonable commercial efforts to market the NETTAXI Brand Features in order to maximize the number of visitors to the NETTAXI Pages in accordance with the Statement of Work. The parties shall review the Statement of Work and NETTAXI's marketing activities on a quarterly basis in order to assess the performance and agree upon additional activities, if necessary, in order to increase usage of the pages. + + 2.4 Marketing by NETTAXI. Throughout the term of this Agreement, ----------------------- NETTAXI shall use reasonable commercial efforts to market the SpinRecords.com Brand Features in order to maximize the number of visitors to the SpinRecords.com Pages in accordance with the Statement of Work. The parties shall review the Statement of Work and Spinrecords.com's marketing activities on a quarterly basis in order to assess the performance and agree upon additional activities, if necessary, in order to increase usage of the pages. + + 2.5 Additional Statements of Work. If the parties hereto desire to -------------------------------- engage each other for additional services which are not included in the Statement of Work and which do not constitute merely a revision or modification of the Statement of Work, the parties shall in good faith negotiate additional Statements of Work, each of which upon signing shall be deemed a part of this Agreement. Additional Statements of Work shall be entered into by mutual agreement between NETTAXI and SpinRecords.com and shall be substantially in the form of the Statement of Work attached hereto. Each Statement of Work shall be signed by authorized representatives of the parties. This Agreement may cover more than one Statement of Work at any given time. + +3. Licenses AND OWNERSHIP. + + 3.1 Licenses by NETTAXI to SpinRecords.com. NETTAXI hereby grants to ----------------------------------------- SpinRecords.com a non-exclusive, worldwide, nontransferable, revocable, royalty free license to use the NETTAXI Brand Features as the same may be modified from time to time for the purposes of this Agreement + + 3.2 Licenses by SpinRecords.com to NETTAXI. SpinRecords.com hereby ------------------------------------------- grants NETTAXI a nonexclusive, worldwide, nontransferable, revocable, royalty free license to display and distribute the, and make derivative works from the SpinRecords.com Brand Features and any enhancements, modifications or improvements thereto as necessary to carry out the terms of this Agreement. + + 3.3 Ownership by NETTAXI. NETTAXI shall own all right, title, and ---------------------- interest in the NETTAXI Brand Features, the NETTAXI Pages and all Intellectual Property Rights therein, including any derivatives, improvements thereof, excluding the SpinRecords.com Brand Features + + 3.4 Ownership by SpinRecords.com. Except as otherwise set forth below, ----------------------------- SpinRecords.com shall own all right, title, and interest in the SpinRecords.com Brand Features and the SpinRecords.com Pages and all Intellectual Property Rights therein, including any derivatives, improvements thereof, excluding the NETTAXI Brand Features. + +Source: RAE SYSTEMS INC, 10-Q, 11/14/2000 + + + + + + 3.5 Impressions. Neither party nor its employees shall take actions ---------- which will artificially increase the number of Impressions on the party's web pages. For example, a party's employees shall not repeatedly access the other party's web pages. + +4. PAYMENT + + 4.1 Payment. In consideration of the duties and obligations of the ------- parties hereto, SpinRecords.com shall pay NETTAXI in the manner set forth in the Statement of Work. + +5. REPRESENTATIONS AND WARRANTIES. + + 5.1 Representations and Warranties of SpinRecords.com. SpinRecords.com -------------------------------------------------- hereby represents and warrants to NETTAXI that: (i) SpinRecords.com has the full power and authority to enter into this Agreement and to carry out its obligations under this Agreement; (ii) SpinRecords.com has the full power and authority to grant the rights and licenses granted to NETTAXI in this Agreement; and (iii) SpinRecords.com owns the SpinRecords.com Brand Features. + + 2 + + 5.2 Representations and Warranties of NETTAXI. NETTAXI hereby --------------------------------------------- represents and warrants to SpinRecords.com that (i) NETTAXI has the full power and authority to enter into this Agreement and to carry out its obligations under this Agreement; (ii) NETTAXI has the full power and authority to grant the rights and licenses granted to SpinRecords.com in this Agreement; and (iii) NETTAXI owns the NETTAXI Brand Features. + + 5.3 THE NETTAXI SERVICES FURNISHED AS A RESULT OF OR UNDER THIS AGREEMENT ARE PROVIDED ON AN "AS IS" BASIS, WITHOUT ANY WARRANTIES OR REPRESENTATIONS EXPRESS, IMPLIED OR STATUTORY; INCLUDING, WITHOUT LIMITATION, WARRANTIES OF QUALITY, PERFORMANCE, NONINFRINGEMENT, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. NOR ARE THERE ANY WARRANTIES CREATED BY A COURSE OF DEALING, COURSE OF PERFORMANCE OR TRADE USAGE. NETTAXI DOES NOT WARRANT THAT THE SERVICES, WILL MEET SPINRECORDS.COM'S OR ANY END USERS NEEDS OR BE FREE FROM ERRORS, OR THAT THE OPERATION OF ITS WEB PAGES WILL BE UNINTERRUPTED. THE FOREGOING EXCLUSIONS AND DISCLAIMERS ARE AN ESSENTIAL PART OF THIS AGREEMENT. + +6. CONFIDENTIALITY. + + 6.1 Agreement as Confidential Information. The parties shall treat the -------------------------------------- terms and conditions and the existence of this Agreement as Confidential Information. Each party shall obtain the other's consent prior to any publication, presentation, public announcement or press release concerning the existence or terms and conditions of this Agreement. + + 6.2 Confidential Information. "Confidential Information" means all ------------------------- information identified in written or oral format by the Disclosing Party as confidential, trade secret or proprietary information, and, if disclosed orally, summarized in written format within thirty (30) days of disclosure. "Disclosing Party" is the party disclosing Confidential Information. "Receiving Party" is the party receiving Confidential Information. The Receiving Party shall not disclose the Confidential Information to any third party other than persons in the direct employ of the Receiving Party who have a need to have access to and knowledge of the Confidential Information solely for the purpose authorized above. Each party shall take appropriate measures by instruction and agreement prior to disclosure to such employees to assure against unauthorized use or disclosure. The Receiving Party shall have no obligation with respect to information which (i) was rightfully in possession of or known to the Receiving Party without any obligation of confidentiality prior to receiving it from the Disclosing Party; (ii) is, or subsequently becomes, legally and publicly available without breach of this Agreement; (iii) is rightfully obtained by the Receiving Party from a source other than the Disclosing Party without any obligation of confidentiality; (iv) is disclosed by the Receiving Party under a valid order created by a court or government agency, provided that the Receiving Party provides prior written notice to the Disclosing Party of such obligation and the opportunity to oppose such disclosure. Upon written demand of the Disclosing Party, the Receiving Party shall cease using the Confidential + +Source: RAE SYSTEMS INC, 10-Q, 11/14/2000 + + + + + +Information and return the Confidential Information and all copies, notes or extracts thereof to the Disclosing Party within seven (7) days of receipt of notice. + +7. INDEMNITY AND LIMITATION OF LIABILITY. + + 7.1 Indemnification by Spinrecords.com. SpinRecords.com shall defend, ------------------------------------ indemnify and hold NETTAXI harmless from any and all damages, liabilities, costs and expenses (including, but not limited to reasonable attorneys' fees) incurred by NETTAXI as a result of (i) any breach of this Agreement; (ii) any claim that the SpinRecords.com Brand Features or any part thereof, infringes or misappropriates any Intellectual Property Right of a third party; (iii) any claim arising out of NETTAXI's display of the SpinRecords.com Brand Features; or (iv) the operation of the SpinRecords.com Pages. NETTAXI shall provide SpinRecords.com with written notice of the claim and permit SpinRecords.com to control the defense, settlement, adjustment or compromise of any such claim. NETTAXI may employ counsel at its own expense to assist it with respect to any such claim; provided, however, that if such counsel is necessary because of a conflict of interest of either SpinRecords.com or its counsel or because SpinRecords.com does not assume control, SpinRecords.com will bear the expense of such counsel. + + 7.2 Indemnification by NETTAXI. NETTAXI shall defend, indemnify and ---------------------------- hold SpinRecords.com harmless from any and all damages, liabilities, costs and expenses (including, but not limited to reasonable attorneys' fees) incurred by SpinRecords.com as a result of (1) any breach of this Agreement; (ii) any claim that the NETTAXI Brand Features or any part thereof, infringes or misappropriates any Intellectual Property Right of a third party; or (iii) any claim arising out of Spinrecords.com's display of the NETTAXI Brand Features SpinRecords.com shall provide NETTAXI with written notice of the claim and permit NETTAXI to control the defense, settlement, adjustment or compromise of any such claim. SpinRecords.com may employ counsel at its own expense to assist it with respect to any such claim; provided, however, that if such counsel is necessary because of a conflict of interest of either NETTAXI or its counsel or because NETTAXI does not assume control, NETTAXI will bear the expense of such counsel. + + 7.3 Limitation of Liability. EXCEPT AS SET FORTH IN SECTION 6 AND 7.1, ------------------------ UNDER NO CIRCUMSTANCES WILL EITHER PARTY BE LIABLE TO THE OTHER UNDER ANY CONTRACT, STRICT LIABILITY, NEGLIGENCE OR OTHER LEGAL OR EQUITABLE THEORY, FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES OR LOST PROFITS IN CONNECTION WITH THE SUBJECT MATTER OF THIS AGREEMENT. + + 3 + +8. TERM AND TERMINATION + + 8.1 Term of Agreement. This Agreement shall be effective upon the ------------------- Effective Date and shall remain in force for a period of one (1) year, and shall be automatically renewed for successive periods of one (1) year unless otherwise terminated as provided herein. + + 8.2 Convenience. NETTAXI may terminate this Agreement at any time for ----------- its convenience, for no reason or for any reason, upon sixty (60) days prior written notice to SpinRecords.com. In the event of such termination, Spinrecords.com shall be entitled to receive and retain all payments made or payable by NETTAXI prior to the date of termination. SpinRecords.com may terminate this Agreement for no reason or for any reason upon sixty (60) days prior written notice to NETTAXI. + + 8.3 Termination for Cause. This Agreement may be terminated by a party ---------------------- for cause immediately upon the occurrence of and in accordance with the following: + + (a) Insolvency Event. Either may terminate this Agreement by delivering written notice to the other party upon the occurrence of any of the following events: (i) a receiver is appointed for either party or its property; (ii) either makes a general assignment for the benefit of its creditors; (iii) either party commences, or has commenced against it, proceedings under any bankruptcy, insolvency or debtor's relief law, which proceedings are not dismissed within sixty (60) days; or (iv) either party is liquidated or + +Source: RAE SYSTEMS INC, 10-Q, 11/14/2000 + + + + + +dissolved. + + (b) Change of Control. In the event more that there is a change in ownership representing fifty percent (50%) or more of the equity ownership of either party, the other party may, at its option, terminate this Agreement upon written notice. + + (c) Default. Either party may terminate this Agreement effective upon written notice to the other if the other party violates any covenant, agreement, representation or warranty contained herein in any material respect or defaults or fails to perform any of its obligations or agreements hereunder in any material respect, which violation, default or failure is not cured within thirty (30) days after notice thereof from the non-defaulting party stating its intention to terminate this Agreement by reason thereof. + + 8.4 Survival of Rights and Obligations Upon Termination. Sections 6 and --------------------------------------------------- 7 shall survive termination or expiration of this Agreement. Notwithstanding anything in the foregoing to the contrary, in the case of termination by NETTAXI for cause pursuant to Section 8.3 [Termination for Cause], NETTAXI shall not be required to pay any fee to SpinRecords.com after termination. + + 8.5 Return of Materials Upon Termination. On or before ten (10) days --------------------------------------- after the termination of this Agreement, SpinRecords.com shall deliver to NETTAXI all NETTAXI Confidential Information and NETTAXI Brand Features, including but not limited to all work product, diagrams, designs and schematics in Spinrecords.com's possession and NETTAXI.com shall deliver to SpinRecords.com all SpinRecords.com Confidential Information and SpinRecords.com Brand Features, including but not limited to all work product, diagrams, designs and schematics in Nettaxi.com's possession + +9. MISCELLANEOUS + + 9.1 Force Majeure. Neither party shall be liable to the other for -------------- delays or failures in performance resulting from causes beyond the reasonable control of that party, including, but not limited to, acts of God, labor disputes or disturbances, material shortages or rationing, riots, acts of war, governmental regulations, communication or utility failures, or casualties. + + 9.2 Relationship of Parties. The parties are independent contractors ------------------------- under this Agreement and no other relationship is intended, including a partnership, franchise, joint venture, agency, employer/employee, fiduciary, master/servant relationship, or other special relationship. Neither party shall act in a manner which expresses or implies a relationship other than that of independent contractor, nor bind the other party. + + 9.3 No Third Party Beneficiaries. Unless otherwise expressly provided, ----------------------------- no provisions of this Agreement are intended or shall be construed to confer upon or give to any person or entity other than NETTAXI and SpinRecords.com any rights, remedies or other benefits under or by reason of this Agreement. + + 9.4 Equitable Relief. Each party acknowledges that a breach by the ----------------- other party of any confidentiality or proprietary rights provision of this Agreement may cause the non-breaching party irreparable damage, for which the award of damages would not be adequate compensation. Consequently, the non-breaching party may institute an action to enjoin the breaching party from any and all acts in violation of those provisions, which remedy shall be cumulative and not exclusive, and a party may seek the entry of an injunction enjoining any breach or threatened breach of those provisions, in addition to any other relief to which the non-breaching party may be entitled at law or in equity. + + 4 + + 9.5 Attorneys' Fees. In addition to any other relief awarded, the ---------------- prevailing party in any action arising out of this Agreement shall be entitled to its reasonable attorneys' fees and costs. + + 9.6 Notices. Any notice required or permitted to be given by either ------- party under this Agreement shall be in writing and shall be personally delivered + +Source: RAE SYSTEMS INC, 10-Q, 11/14/2000 + + + + + +or sent by a reputable overnight mail service (e.g., Federal Express), or by first class mail (certified or registered), or by facsimile confirmed by first class mail (registered or certified), to the party at the address indicated above. Notices will be deemed effective (i) three (3) working days after deposit, postage prepaid, if mailed, (ii) the next day if sent by overnight mail, or (iii) the same day if sent by facsimile and confirmed as set forth above. + + 9.7 Assignment. Neither NETTAXI or SpinRecords.com shall assign its ---------- respective rights or delegate its obligations hereunder, either in whole or in part, whether by operation of law or otherwise, without the prior written consent of the other party. Any attempted assignment or delegation without the other party's written consent will be void. + + 9.8 Waiver and Modification. Failure by either party to enforce any ------------------------- provision of this Agreement will not be deemed a waiver of future enforcement of that or any other provision. Any waiver, amendment or other modification of any provision of this Agreement will be effective only if in writing and signed by the parties. + + 9.9 Severability. if for any reason a court of competent jurisdiction ------------ finds any provision of this Agreement to be unenforceable, that provision of the Agreement will be enforced to the maximum extent permissible so as to effect the intent of the parties, and the remainder of this Agreement will continue in full force and effect. + + 9.10 Controlling Law and Jurisdiction. This Agreement and any action ----------------------------------- related thereto shall be governed, controlled, interpreted and defined by and under the laws of the State of California and the United States, without regard to the conflicts of laws provisions thereof. Unless waived by NETTAXI (which it may do in its sole discretion) the exclusive jurisdiction and venue of any action with respect to the subject matter of this Agreement shall be the Superior Court of California for the County of Santa Clara or the United States District Court for the Northern District of California and each of the parties hereto submits itself to the exclusive jurisdiction and venue of such courts for the purpose of any such action. The parties specifically disclaim the UN Convention on Contracts for the International Sale of Goods. + + 9.11 Headings. Headings used in this Agreement are for ease of -------- reference only and shall not be used to interpret any aspect of this Agreement. + + 9.12 Entire Agreement. This Agreement, including all exhibits which are ---------------- incorporated herein by reference, constitutes the entire agreement between the parties with respect to the subject matter hereof, and supersedes and replaces all prior and contemporaneous understandings or agreements, written or oral, regarding such subject matter. + + 9.13 Counterparts. This Agreement may be executed in two counterparts, ------------ each of which shall be an original and together which shall constitute one and the same instrument. + + IN WITNESS WHEREOF, the parties hereto have executed this Agreement by persons duly authorized as of the date and year first above written. + +NETTAXI: NETTAXI ONLINE COMMUNITIES, INC. By: /s/ --------------------------------------------- Its: Executive Vice President Sales & Marketing -------------------------------------------- + +Solutions Media SOLUTIONS MEDIA, INC. ----------------------- By: /s/ --------------------------------------------- Its: President --------------------------------------------- + +TABLE OF EXHIBITS + +Source: RAE SYSTEMS INC, 10-Q, 11/14/2000 + + + + + +EXHIBIT A - SPINRECORDS.COM BRAND FEATURES EXHIBIT B - NETTAXI BRAND FEATURES EXHIBIT C - STATEMENT OF WORK + + 5 + + EXHIBIT A + + SPINRECORDS.COM BRAND FEATURES + + 1. Service Marks: "SpinRecords.com" "SpinRadio" "Spin TV" "Local Spin" "Spin Chat" "Gig-a-board" "Spin Cuts" "Spin Charts" "Join the evolution" "The promise of music on the Internet delivered" 2. SpinRecords.com collateral and dress - SpinRecords.com color scheme, fonts and general "look and feel" 3. SpinRecords.com logos 4. "Anything but that" cartoon series 5. SpinRecords.com source materials 6. SpinRecords.com website + + 6 + + EXHIBIT B + + NETTAXI BRAND FEATURES + + 1. Service Marks: "NETTAXI" "NETTAXI.COM" "NETTAXI ONLINE COMMUNITIES" "INTERNET THE CITY" "DRIVING YOUR INTERNET EXPERIENCE" 2. Trade dress - Nettaxi color scheme and checkered motif; "look and feel" 3. Nettaxi logos 4. Nettaxi source materials 5. The Website + + 7 + + EXHIBIT C + + STATEMENT OF WORK + +1. GENERAL + + This is a Statement of Work under the Co-Branding Agreement by and between NETTAXI Online Communities, Inc. ("NETTAXI") and Solutions Media, Inc., ("SpinRecords.com") dated effective as of Nov. 5, 1999. + +2. PROJECT MANAGERS. + +NETTAXI: Will Richards SPINRECORDS.COM: Criona Mclaughlin 2165 S. Bascom Avenue 11440 West Bernardo Ct Campbell, California 95008 San Diego, California 92127 Phone: (408) 879-9880 Phone: (619)451-3223 Fax: (408) 879-9907 Fax: (619)451-2373 + +3. BRANDING METHODS + +Spinrecords.com and Nettaxi.com will enter into a multi-phase launch of a co-branded community for Nettaxi, and the implementation of community services for Spinrecords.com members. The following defines the agreement after the final phase. The individual phases are specified following the Marketing Section of the Statement of Work. 1) SpinRecords.com will develop a co-branded site showing the Nettaxi.com logo. The co-branding shall not include SpinRadioTM, SpinTVTM, feature + +Source: RAE SYSTEMS INC, 10-Q, 11/14/2000 + + + + + + modules, and Spin branded charts. All other navigation bar features shall be modified to the co-brand including localnettaxi, and nettaxichat. The spinwares and spinstore will be modified to include licensed content purchased directly from Spinrecords.com and to eliminate products that will compete with the Nettaxi store. 2) Spinrecords.com will incorporate from the navigation bar a link from nettaxistores to the Nettaxi commerce site. 3) The co-branded nettaximusic store will contain spingear, spingallery, spinmusic, and Kingdom Skateboard products and services. Spin agrees to pay Nettaxi a 5% commission of the gross sales price on all transactions. 4) Spinrecords.com will maintain the Spin logo on the site in a corner of their choice. 5) Nettaxi web based e-mail will replace spinmail on the co-branded site. 6) Nettaxi's search engine shall be the default search engine on the co-branded site and on the Spinrecords.com homesite, with the exception that, in the event Spinrecords.com provides its content to or otherwise develops any co-branded sites with any ISP, Internet Portal or other entity, Spinrecords.com shall not be required to employ the Nettaxi search engine. In all cases in which the Nettaxi search engine is employed, the search shall first deliver results found on the Spinrecords.com website. The search feature shall have the tag line "Driven by Nettaxi" underneath the search bar. 7) Nettaxi shall cause its search engine to search and deliver results from the SpinRecords.com site and co-branded site as one of the top results for all searches for related words on the co-branded site, the SpinRecords.com homesite and the Nettaxi.com site. Related words shall include, but not be limited to: "music," "mp3," "independent artist/music" and "CD." 8) Nettaxi will create a music template for the Nettaxi homepage builder. Every registered member of Spinrecords.com and Nettaximusic will be provided a dynamically generated home page. Spinrecords.com will submit to Nettaxi the existing list of Spinrecords.com members from which a homepage shall be generated. 9) Nettaximusic and Spinrecords.com will share registered users by synchronizing the databases for registered users. Nettaxi will maintain unique ID's for each community home page built in the Spinrecords.com domain and Nettaximusic.com domain (for the purpose of the auto-generation of fan page templates). This synchronization shall not include any users that arrive at SpinRecords.com through any other co-branded site or through any other means of co-branding/co-marketing with any other ISP, Website or other entity. 10) Nettaxi will develop a link from the Nettaxi Arts & Entertainment area for the co-branded site. 11) Nettaxi will add Nettaximusic to the street sign on the A&E page. 12) Nettaxi will make the word "music" on the splash page, under A&E a link, and have it link to nettaxi.spinrecords.com. the co-branded site. 13) The co-branded site will have the Nettaxi mp3 player as an available mp3 player on the site. 14) Spinrecords.com will place the Nettaxi logo on promotional CDROM's and Samplers that contain the Nettaxi mp3 player or site banners. Banners on CDROM's will link straight to Nettaxi and Nettaximusic. 15) Nettaxi will include the Spinrecords.com logo on promotional CDROM's containing music provided Spinrecords.com. 16) Spinrecords.com will provide a link from all artists' pages to the co-branded registration site for fans to produce fan pages. 17) Nettaxi.com and Spinrecords.com will develop ability for all registered users of the co-branded site to achieve one-click buying on the co-branded site whether purchasing from Nettaxi's store or the Spinstore. + + 8 + +4. MARKETING EFFORTS + +1) Spinrecords.com will sell ad space on the co-branded site, in accordance with the agreement, within 30 days of the Effective Date. 2) Both Parties agree to develop a Nettaxi co-branded CD featuring Nettaximusic.com. Both parties will share the production costs of the Nettaximusic.com Co-Branded CD. The per unit cost shall be 50 cents or less, unless both parties agree otherwise. 3) Nettaxi will develop a community based affinity model for music that features SpinRecords.com artists. 4) Nettaxi will provide in-house advertising to promote the co-branded music site. 5) Spinrecords.com will engage with Nettaxi as an -advertising sponsor promoting the co-branded site with each party contributing a monthly investment of not less than $20,000 per month, in cash expenditure or in-kind contribution toward the marketing effort(s). 6) SpinRecords.com will promote Nettaximusic.com as a music affiliate in their + +Source: RAE SYSTEMS INC, 10-Q, 11/14/2000 + + + + + + non-traditional street marketing methods, to include flyer's created in-house for Spin Bands, will have the logo of Nettaxi.com Music in-order that consumers see alternate choices to find the bands music. 7) Both parties agree to include advertisements for the other party in the advertising included with their web-based e-mail offered to their users. 8) Spinrecords.com will grant Nettaxi the rights to use the artist's likeness in promotions of the co-branded site. 9) Nettaxi.com agrees to participate in Spinrecords.com fourth quarter promotional plans by procuring $250,000 worth of co-promotional placement in Spinrecords advertising targeted towards colleges, extreme sports and other mutually agreed upon target audiences. 10) Spinrecords.com agrees to purchase in the fourth quarter, $250,000 worth of advertising and sponsorship space within the Nettaxi site for promotion of the co-branded and Spinrecords.com community. + +PHASED ROLL OUT PLAN + +PHASE I: NOVEMBER 8TH The existing site located at Spinrecords.com/Nettaxi shall be launched - target date one week from agreement date. This site shall contain the web based e-mail from Nettaxi. This site shall also use Spinstore and Spinware as it currently exists on the site. + +Nettaxi will begin development of the music template for the home page builder. Spinrecords will submit their existing list of members to Nettaxi to integrate the homepage builder database and resolve duplicate ID's existing between Nettaxi and Spinrecords member registration. + +Nettaxi and Spinrecords will integrate their respective registrations to allow both companies to synchronize their registered users from the co-branded site. + +Spinrecords can announce the partnership in a press release the day the co-branded site launches. This press release will detail the co-branded relationship. + +PHASE II: NOVEMBER 22ND Community home pages will be available to all members of Nettaximusic.com and Spinrecords.com. Spinrecords.com will announce to their existing membership the existence of their new homepage, provide them with their Unique URL and promote their ability to develop a unique web site. + +Nettaxi will announce the same ability to all registered members of Nettaximusic.com. + +Nettaxi's search engine will be launched on the Spinrecords.com domain. + +Nettaxi's e-commerce offering will be launched on the co-branded site. Spinrecords.com e-comnerce offerings will be reduced to provide licensed merchandise and content and any additional products mutually agreed upon by Nettaxi.com and Spinrecords.com. + +Both companies will announce their users ability to shop on the co-branded site using one-click buying. Each member can move between the stores on the co-brand site and order in each individual store. + + 9 + +PHASE III: JANUARY 1, 2000 + + Nettaxi launches citizen and small business e-commerce offering for all community sites. This feature will allow current Nettaxi home page web sites to integrate e-commerce offerings from their own products and products from the Nettaxi store. + +5. PAYMENT + +PERCENTAGE OF ADVERTISING REVENUE + + 5.1 "SpinRecords.com's Advertising Revenue" means the gross revenue from advertising invoiced by SpinRecords.com in a calendar quarter for advertising by third parties on the SpinRecords.com Pages, less any commissions not to exceed 35%. + + 5.2 "SpinRecords.com's AR Share" means the number of Impressions on the SpinRecords.com Pages by Users arriving through the Co-branded NETTAXI Pages in + +Source: RAE SYSTEMS INC, 10-Q, 11/14/2000 + + + + + +a calendar quarter divided by the total number of Impressions on the SpinRecords.com Pages by all Users in that calendar quarter. + + 5.3 "NETTAXI Advertising Revenue" means the gross revenue from advertising invoiced by NETTAXI in a calendar quarter for advertising by third parties on the NETTAXI Pages, less any commissions. + + 5.4 "NETTAXI's AR Share" means the number of Impressions on the NETTAXI Pages by Users arriving through the Co-branded SpinRecords.com Pages in a calendar quarter divided by the total number of Impressions on the NETTAXI Pages by all Users in that calendar quarter. + + 5.5 SpinRecords.com Rate. In full consideration for the rights granted --------------------- by NETTAXI, SpinRecords.com agrees to pay NETTAXI fifty (50%) percent of ad revenue at an average rate no lower then $6.50 per one thousand impressions (CPM) payable to NETTAXI which results when the SpinRecords.com Advertising Revenue is multiplied by SpinRecords.com's AR Share. SpinRecords.com shall be responsible for payment of all taxes based on the Advertising Revenue except taxes based on NETTAXI's income. + + 5.6 NETTAXI Rate. N/A. ------------- + + 5.7 Payment Schedule. The parties shall make such payments within ----------------- thirty (30) days of the end of each calendar quarter for the Advertising Revenue invoiced during such calendar quarter. + + 5.8 Records. SpinRecords.com agrees to keep accurate books of account ------- and records at its principal place of business covering all Advertising Revenues and associated commissions. Upon reasonable notice of not less than seven (7) business days, but in no event more than once per year (unless the immediately preceding audit showed a material underpayment), NETTAXI shall have the right, subject to suitable confidentiality measures, to cause a certified public accountant to inspect those portions of the books of account and records which relate to the royalties owed NETTAXI, to confirm that the correct amount owing NETTAXI under this Agreement has been paid. SpinRecords.com shall maintain such books of account and records which support each statement for at least two years after the termination or expiration of this contract or after the final payment made by SpinRecords.com to NETTAXI, whichever is later. + +2: PER CUSTOMER FEE + + 1. SpinRecords.com Payment. For each User that accesses the co-branded ------------------------ site and becomes a paying customer on the co-branded site, SpinRecords.com agrees to pay a fee of five (5%) percent of the gross sale. + + 2. NETTAXI Payment. N/A. ---------------- + + 3. Payment Terms. All fees will be paid on or before fifteen (15) days -------------- after the end of the month in which the party has received payment + + 4. Audit Rights. SpinRecords.com shall maintain for a period of two ------------- (2) years after the end of the year to which they pertain, complete records of it's customers in order to calculate and confirm SpinRecords.com's obligations hereunder. Upon reasonable prior notice, NETTAXI will have the right, exercisable not more than once every twelve (12) months, to appoint an independent accounting firm or other agent reasonably acceptable to SpinRecords.com, at NETTAXI'S expense, to examine such books, records and accounts during SpinRecords.com's normal business hours to verify the amounts due by SpinRecords.com to NETTAXI herein, subject execution of NETTAXI's standard confidentiality agreement by the accounting firm or agent; provided, however, that execution of such agreement will not preclude such firm from reporting its results to NETTAXI. In the event such audit discloses an underpayment or overpayment of royalties due hereunder, the appropriate party will promptly remit the amounts due to the other party. If any such audit discloses a shortfall in payment to NETTAXI of more than five percent (5%) for any quarter, SpinRecords.com agrees to pay or reimburse NETTAXI for the expenses of such audit. + + 10 + +Source: RAE SYSTEMS INC, 10-Q, 11/14/2000 + + + + + +Source: RAE SYSTEMS INC, 10-Q, 11/14/2000 \ No newline at end of file diff --git a/full_contract_txt/RandWorldwideInc_20010402_8-KA_EX-10.2_2102464_EX-10.2_Co-Branding Agreement.txt b/full_contract_txt/RandWorldwideInc_20010402_8-KA_EX-10.2_2102464_EX-10.2_Co-Branding Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..09c049a6f106dd6db5a1e414068432fbb4f39b90 --- /dev/null +++ b/full_contract_txt/RandWorldwideInc_20010402_8-KA_EX-10.2_2102464_EX-10.2_Co-Branding Agreement.txt @@ -0,0 +1,383 @@ +1 EXHIBIT 10.2 + +Portions of this exhibit have been redacted pursuant to a request for confidential treatment under Rule 24b-2 of the General Rules and Regulations under the Securities Exchange Act. Omitted information, marked "[***]" in this exhibit, has been filed with the Securities and Exchange Commission together with such request for confidential treatment. + + CO-BRANDING AGREEMENT + + This CO-BRANDING AGREEMENT (this "Agreement") is made as of this November 14, 2000 by and between Dassault Systemes, a societe anonyme organized under the laws of France and the owner of Purchaser ("Dassault Systemes") and/or certain affiliates of Dassault Systemes, and PlanetCAD Inc. (formerly known as Spatial Technology Inc.), a corporation organized under the laws of the State of Delaware ("PlanetCAD") (each a "Party," together, the "Parties"). + + WITNESSETH: + + WHEREAS, PlanetCAD, SPATIAL COMPONENTS, LLC and DASSAULT SYSTEMS CORP. entered into a certain Purchase Agreement, dated July 4, 2000 ("Purchase Agreement"), pursuant to which DASSAULT SYSTEMES CORP. acquired the Component Business (as defined in the Purchase Agreement) from PlanetCAD and SPATIAL COMPONENTS, LLC, including certain software; and + + WHEREAS, PlanetCAD has created, operates and maintains its own Web sites, including, without limitation 3Dshare.com and PlanetCAD.com, through which PlanetCAD provides Internet-based services to its customers, and has competence and expertise in the supply of Internet-based services to customers. + + WHEREAS, as a condition to closing the transaction contemplated under the Purchase Agreement, the Parties hereto agreed to enter into this Agreement for the co-branding of 3Dshare.com. + + NOW, THEREFORE, in consideration of the mutual promises and covenants set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows: + + SECTION 1 DEFINITIONS + + All capitalized terms not otherwise defined herein shall have the same meanings set forth in the Asset Purchase Agreement. + + 1 2 + + 1.1 "Affiliate(s)" shall mean, with respect to any specified Person, any other Person that, directly or indirectly, Controls, is Controlled by, or is under common Control with such Person. + + 1.2 "Billing Party" means the party responsible for all billing and collection matters associated with the Co-Branded Service. + + 1.3 "CBD Software" shall mean the following computer software programs, whichever packaging and naming, in the version and release that is commercially available at the Effective Date, as well as corrections, enhancements and modifications of the CBD Software delivered in the maintenance services provided under the Cross-License Agreement executed contemporaneously by the Parties: ACIS (R) 3D Toolkit, ACIS (R), Advanced Blending Husk, ACIS(R) Advanced Rendering Husk, ACIS(R) Local Operations Husk, ACIS(R) Shelling Husk, ACIS(R) Precise Hidden Line Husk, ACIS(R) Mesh Surface Husk, ACIS(R) Space Warping Husk, ACIS(R) Advanced Surfacing Husk, ACIS(R) Cellular Topology Husk, Spatial Deformable Modeler, ACIS(R) Deformable Modeling Husk, JetScream(TM), ACIS(R) JetScream Husk, ACIS (R) RevEnge Husk (MetroCad), ACIS(R) AEC Husk, IVSDK, ACIS(R) Open Viewer and Plug-ins, Large Model Viewer, 3D Building Blox(TM), SAT(R) (ACIS File Format). + + 1.4 "CNDA" means the Confidential and Non-Disclosure Agreement among, inter alia, PlanetCAD and Dassault Systemes executed contemporaneously herewith. + + 1.5 "Co-Branded Service" means the service to be developed under this Agreement, including Enhancements, which will be offered to Dassault Systemes Customers via the Dassault Systemes Web site(s) and will contain translation and healing application services substantially similar to those currently offered and sold on the PlanetCAD Web site(s) as of the Effective Date under the product name 3Dshare.com, and based upon the CBD Software. + + 1.6 "Control" means, with respect to the relationship between or among two or more Persons, shall mean the possession, directly or indirectly, + +Source: RAND WORLDWIDE INC, 8-K/A, 4/2/2001 + + + + + +or as trustee or executor, of the power to direct or cause the direction of the affairs or management of a Person, whether through the ownership of voting securities, as trustee or executor, by contract or otherwise, including, without limitation, the ownership, directly or indirectly, of securities having the power to elect a majority of the board of directors or similar body governing the affairs of such Person; provided that neither PlanetCAD nor shall be deemed to be controlled by any other Person or under common control with any Person that is not one of their respective subsidiaries. + + 1.7 "Dassault Systemes" shall mean the entity that is a party to this Agreement and each of its Affiliates. + + 1.8 "Dassault Systemes Customer(s)" means any customer of the Co-Branded Service having accessed such Web service, wherever hosted, by first logging in on any Dassault Systemes Web site. + + 1.9 "Dassault Systemes Customer Database(s)" shall have the meaning set forth in Section 6.1 [DASSAULT SYSTEMES CUSTOMER DATABASES]. + + 2 3 + + 1.10 "Dassault Systemes Personnel" means employees, officers, agents, independent contractors and subcontractors of Dassault Systemes. + + 1.11 "Dassault Systemes Web sites" means any Web site created, owned, operated or supported by or for Dassault Systemes. + + 1.12 "Effective Date" means November 14, 2000. + + 1.13 "Enhancements" mean without limitation, compilations, modifications, adaptations, improvements, bug fixes, corrections, versions, design changes, revisions, upgrades, updates, and new versions with respect to the Co-Branded Services during the Term of this Agreement. + + 1.14 "Hardware Infrastructure" means all hardware equipment, materials, products and facilities that may be necessary at any time to operate the Software Infrastructure to the Co-Branded Service. + + 1.15 "Infrastructure" means the "Software Infrastructure" and the "Hardware Infrastructure." + + 1.16 "Initial Term" shall have the meaning set forth in Section 10.1 [Term]. + + 1.17 "Know-How" shall mean all residual information of a non-tangible form, which is not protected by the United States or European Union laws of copyright, patent or trade secrets and which may be retained by a party who has had access to confidential and proprietary information of the other party, including ideas, concepts or techniques contained therein. + + 1.18 "Launch Date" shall mean the date of first log in of a Dassault Systemes Customer for the Co-Branded Service. + + 1.19 "Marks" shall have the meaning set forth in Section 3.4 [Use of Marks]. + + 1.20 "Net Revenue" shall have the meaning set forth in Section 5.5 [Net Revenue Defined]. + + 1.21 "Non-Billing Party" means the party who is not the Billing Party. + + 1.22 "Person" means any individual or legal entity, including without limitation, partnership, corporation, association, trust or unincorporated organization. + + 1.23 "PlanetCAD Personnel" means employees, officers, agents, independent contractors and subcontractors of PlanetCAD. + + 1.24 "PlanetCAD Web sites" means 3dshare.com, PlanetCAD.com and any other Web site created, owned, operated or supported by or for PlanetCAD. + + 1.25 "Revenue Report" shall have the meaning set forth in Section 5.6 [Reporting and Payment Obligations]. + + 3 4 + + 1.26 "Software" means any computer software program, including programming-code, on-line documentation, if any, user interface related thereto or associated therewith, to the extent that such user interface does exist, and related user and installation documentation other than on-line documentation associated with this computer software program. + +Source: RAND WORLDWIDE INC, 8-K/A, 4/2/2001 + + + + + + 1.27 "Server Software" means all software, including without limitation, Web interface, Web middleware, Web dynamic content billing, Web content generation software, and any Derivative Works thereof that is used by PlanetCAD to provide services on the Co-Branded Service. The list of all such Software as of the Effective Date is attached in Schedule A which will be updated by PlanetCAD when reasonably requested by Dassault Systemes and when in PlanetCAD's determination significant changes have been made. + + 1.28 "Software Infrastructure" means the software configuration and environment necessary to perform, supply and support the Co-Branded Service including any Third Party Software. + + 1.29 "Term" shall have the meaning set forth in Section 10.1 [Term]. + + 1.30 "Third Party Software" means computer software programs owned by a party other than PlanetCAD or Dassault Systemes and incorporated into, or required for the development, operation and/or support of any Web service governed by this Agreement and the Infrastructure associated therewith. + + SECTION 2 SUBJECT MATTER + + 2.1 Engagement. Dassault Systemes and PlanetCAD agree to cooperate to develop and bring to their customers the Co-Branded Service under the terms and conditions set forth below. + + SECTION 3 OWNERSHIP AND LICENSING RIGHTS + + 3.1 Ownership by PlanetCAD. All right, title and interest in and to: (i) the Server Software and (ii) the service known as of the Effective Date as 3Dshare.com and its Enhancements shall be owned by PlanetCAD. + + 3.2 Ownership by Dassault Systemes. All right, title and interest in and to the CBD Software and its Enhancements shall be owned by Dassault Systemes. + + 3.3 Limited Hosting License. PlanetCAD hereby grants to Dassault Systemes a fully-paid, non-exclusive, worldwide, revocable limited license to the Server Software and Infrastructure for the sole purpose of (i) hosting the Co-Branded Service and (ii) fulfilling its + + 4 5 obligations under this Agreement. The license granted pursuant to this Section 3.3 [Limited Hosting License] shall be deemed to be automatically revoked upon termination of this Agreement. Within 2 weeks following execution of this Agreement, PlanetCAD will provide Dassault Systemes with the necessary media and licensing keys or similar authorization system (if any) to use such Server Software and Infrastructure according to the above license. + + 3.4 Use of Marks. Prior to commercialization of the Co-Branded Service the parties shall agree on the use and placement of all Dassault Systemes and PlanetCAD logos, trade names, trademarks, service marks, and similar identifying material (collectively referred to as "Marks") on the Co-Branded Service. Any usage of a party's Marks on the Co-Branded Service including without limitation size, placement, font and style of such Marks will be subject to such party's prior written approval. On or before the Launch Date, each party shall grant the other party a non-exclusive, non-transferable, revocable right to use their approved Marks, for the sole purpose of advertising, marketing, promotion and sale of the Co-Branded Service. In connection with such license each party agrees not to use the other party's Marks in any manner that is disparaging or that otherwise portrays such party in a negative light. Each party retains all right, title and interest, in and to its Marks. Upon termination of this Agreement the right in either party to use the other party's Marks shall automatically terminate. + + 3.5 Know-How. The parties hereby acknowledge and agree that any and all rights to Know-How developed or shared under this Agreement by either party shall be jointly owned by the parties and may be used by either party in the operation of their respective businesses during and following termination of this Agreement. + + SECTION 4 DEVELOPMENT AND COMMERCIALIZATION OF THE CO-BRANDED SITE + + 4.1 Review of Co-Branded Site. Immediately prior to the Launch Date, each party shall have an opportunity to review the content and presentation of the Web pages relating to the Co-Branded Service and shall have the right to request reasonable changes to any aspect of the Co-Branded Service, including without limitation, the look and feel of the Web pages. + + 4.2 Appointment of Liaison. As soon as practicable after the Effective Date, each party shall appoint a project manager to act as a liaison to oversee and ensure compliance of the respective obligations of the parties hereunder. + +Source: RAND WORLDWIDE INC, 8-K/A, 4/2/2001 + + + + + + 4.3 Access to the Co-Branded Service by Dassault Systemes Customers. During the Term of this Agreement, the Co-Branded Service will be accessible from any Dassault Systemes Web site(s), as determined by Dassault Systemes in its sole discretion, on a fully transparent basis by way of a direct link to the first Web page of the Co-Branded Service. Upon exiting the Co-Branded Service, the Dassault Systemes Customers will be automatically returned to the Dassault Systemes Web site. PlanetCAD shall, with consultation and input from Dassault Systemes, perform all services necessary for the implementation of such link between the Dassault Systemes Web site and the Co-Branded Service. + + 4.4 Co-Branding Designations. The Co-Branded Service will be designated as such by use of both party's Marks on the Co-Branded Service, and inclusion of wording such as + + 5 6 "powered by PlanetCAD" on all Web pages, associated with the Co-Branded Service. The placement, text, font and size of the wording shall be mutually agreed upon by the parties. + + 4.5 Hosting and Customer Support Obligations of the Parties. Unless otherwise agreed by the parties: (i) PlanetCAD will host the Co-Branded Service at its facilities and shall be responsible for providing the Infrastructure necessary to operate such service; (ii) the party responsible for hosting the Co-Branded Service shall be responsible for all customer billing as set forth in Section 5.1 [Customer Billing] herein; (iii) Dassault Systemes will provide first level customer support; (iv) PlanetCAD will provide second level customer support, and (v) PlanetCAD shall be responsible for all updates and Enhancements of the Co-Branded Service. PlanetCAD shall not charge Dassault Systemes any hosting fee for the Co-Branded Service. + + 4.6 Software Support and Maintenance Obligations of the Parties. For the Term of this Agreement the parties shall cooperate to perform maintenance and support services on their respective software included on and necessary to the operation of the Co-Branded Service. The description of maintenance and support obligations is set forth in the Maintenance and Support Services Schedule, attached hereto as Schedule B and incorporated herein by reference. + + 4.7 Change of Hosting. At any time during the Term of this Agreement, Dassault Systemes may, at its discretion, decide to host the Co-Branded Service, or have it hosted by any third party of its choice, by sending ninety days written notice to that effect to PlanetCAD. In such event, PlanetCAD agrees to: (i) provide to Dassault Systemes a current and updated list of equipment, materials, products and facilities composing the Hardware Infrastructure, and (ii) provide reasonable cooperation with Dassault Systemes in seamlessly transitioning the Co-Branded Service to Dassault Systemes equipment or to the equipment of its subcontractors or Affiliates. + + SECTION 5 CUSTOMER BILLING, PAYMENT TERMS AND AUDIT RIGHTS + + 5.1 Customer Billing. Unless otherwise agreed by the parties and subject to the reporting and revenue sharing obligations set forth in this Section 5, the party responsible for hosting shall be the Billing Party. + + 5.2 Pricing of the Co-Branded Service. Prior to the Launch Date, the parties shall agree on which currencies and list prices shall apply to the Co-Branded Service. If, for whatever reason, the parties fail to agree on a price to be applied, the price applied to the Co-Branded Service shall be equal to the then current list price for such services as offered on the PlanetCAD Web site(s). If, for whatever reason, the parties fail to agree on a currency to be applied, the Billing Party will be entitled to choose a currency, as long as such currency easily converts into US dollars and the Billing Party shall pay to the other party its share of revenue in US dollars, based on the average exchange rate of that currency against US dollars during the last 3 months preceding the date of payment to the other party. + + 5.3 Taxes. The Billing Party may deduct and withhold from any payments due to the other party under this Agreement any and all taxes and other amounts as required + + 6 7 under the laws of any jurisdiction that has the authority to tax the Billing Party, the other party or the transactions contemplated by this Agreement. However, should the Billing Party consider withholding payment or paying any such amount from payments due under this Agreement, the Billing Party shall send in advance to the other party a certificate setting forth the regulatory and/or legal framework for such a payment, including the provisions of the international tax treaty allowing such payment. The other party will have 30 days from the reception of such information to accept or refuse such payment/withholding: + +Source: RAND WORLDWIDE INC, 8-K/A, 4/2/2001 + + + + + + (i) If the other party accepts or does not answer within this time frame, the Billing Party will be entitled to make such payment/withholding and shall provide the other party with a certificate stating the amounts withheld and the jurisdictions to which such amounts were remitted. + + (ii) If the other party provides to the Billing Party a certificate stating that (a) the Billing Party has no withholding/payment obligations with respect to the laws of such particular jurisdiction and setting forth the relevant authority for such statement and/or (b) that such a payment may be avoided under any applicable law or treaty and provide with the necessary documentation for that purpose, and if the Billing Party then determines that it has no such withholding obligation under the laws of such jurisdiction, the Billing Party shall make any future payments to the other party without deduction for the items set forth in the certificate, until such time as the Billing Party reasonably believes that it has a withholding obligation. + +Either Party shall pay any applicable sales or value added tax on the payments due. + + 5.4 Share of Net Revenue. As financial consideration under this Agreement, Net Revenue will be shared by the parties as follows: + + (a) For so long as PlanetCAD hosts the Co-Branded Service, during which time PlanetCAD shall be the Billing Party, all Net Revenue derived from sales of the Co-Branded Service to Dassault Systemes Customers shall be apportioned [***] percent ([***]%) to Dassault Systems and [***] percent ([***]%) to PlanetCAD. + + (b) In the event that Dassault Systemes opts to host the Co-Branded Service pursuant to Section 4.7 [Change of Hosting] herein they shall become the Billing Party and all Net Revenue derived from sales of the Co-Branded Service shall be apportioned [***] percent ([***]%) to Dassault Systems and [***] percent ([***]%) to PlanetCAD. + + 5.5 Net Revenue Defined. Net Revenue shall consist of all revenues recognized by the Billing Party derived from supply of the Co-Branded Service, including the price paid by the customers, less any applicable discounts and net of any commissions or fees paid to third party resellers, to obtain access to the Co-Branded Service and any other fees and charges invoiced by the Billing Party to the customers, without deduction by such party of any other costs or expenses related to achievement of the revenue, provided, however, that Net + + 7 8 Revenue shall be reduced by the amount, if any, of (i) value-added taxes, (ii) sales taxes or (iii) withholding taxes imposed by any jurisdiction on payments made by a payor in such jurisdiction to a payee outside of such jurisdiction. + + 5.6 Reporting and Payment Obligations. Within 7 Business Days after the end of each calendar quarter, the Billing Party shall provide the other party with an itemized statement, subject to adjustment within 30 days of receipt of such statement, setting forth the Net Revenue achieved over the preceding calendar quarter, and shall include such other information as may be mutually agreed upon by the parties (the "Revenue Report"). The Revenue Report shall be accompanied by payment to the Non-Billing Party of all amounts owed as set forth on such Revenue Report, as well as - when applicable - the exchange currency rate. When agreed between the parties as provided for in Section 5.2 [Pricing of the Co-Branded Service], payment will be made to the Non-Billing Party in the currency received by the Billing Party for the provision of the Co-Branded Service. Otherwise, payment shall be made in US dollars as provided for in Section 5.2 [Pricing of the Co-Branded Service]. In the event that the Billing Party is unable under foreign currency export controls or similar applicable laws, unknown to the parties at the time where they agree on payments in that currency, to provide payment to the Non-Billing Party in the currency received by the Billing Party the parties agree to negotiate a mutually agreeable solution. A party's right to payment shall accrue upon the date the corresponding revenues accrue to the Billing Party. The parties shall pay interest for late payment of any sum due at the LIBOR rate plus four points (not to exceed the maximum rate authorized, or be inferior to the minimum rate allowed, by applicable law, as the case may be). + + 5.7 Records - Audit. The Billing Party shall, for two years following each transaction relating to the Co-Branded Service, keep true and accurate records and books of account of such transaction containing all particulars which may be necessary for the purpose of auditing payments to the Non-Billing Party under this Agreement. During such two-year period, and upon reasonable notice to the Billing Party, the Non-Billing Party shall have the right to have an audit conducted through a licensed independent accounting firm, of any billings, collections, and taxes on such itemized statement, and to examine the records and books of account of the Billing Party in connection therewith. The Billing Party will bear the costs of such audit if a discrepancy + +Source: RAND WORLDWIDE INC, 8-K/A, 4/2/2001 + + + + + +or error of computation in an amount greater than $10,000 in favor of the Non-Billing Party is identified. Any audit conducted pursuant to this Section 5.7 [Records -] shall not be conducted in such a manner as to unreasonably interfere with the Non-Billing Party's operations and in no event shall an audit be conducted more frequently than once each year. + + 8 9 + + SECTION 6 DASSAULT SYSTEMES CUSTOMER DATABASES + + 6.1 PlanetCAD's obligation to maintain and update Dassault Systemes Customer Databases. For as long as PlanetCAD hosts the Co-Branded Service, PlanetCAD will maintain and continuously update Dassault Systemes' Customer Database(s), which shall include without limitation, databases of Dassault Systemes Customers, of demands from and results of Web services supplied to Dassault Systemes Customers and associated Net Revenue and of data collected via the Customer Relations Management ("CRM") environment. The Dassault Systemes Customer Databases must be held separately from any other databases held or maintained by PlanetCAD. If not held separately, the Dassault Systemes Customer Databases must be clearly identified and sorted out as the property of Dassault Systemes and the provisions regarding PlanetCAD's limited right of use and its obligation of confidentiality as set forth below apply without change. + + 6.2 Ownership of Dassault Systemes Customer Databases. Dassault Systemes will be deemed the maker of the Dassault Systemes Customer Databases and the owner of any and all right, title and interest in and to the Dassault Systemes Customer Databases and their content, wherever hosted. + + At all times during the Term of this Agreement, Dassault Systemes will have unrestricted access to and use of the Dassault Systemes Customer Databases, and the content therein. + + At all times during the Term of this Agreement, and as long as the Dassault Systemes Customer Databases are hosted by PlanetCAD, PlanetCAD benefits from a limited right to use the assault Systemes Customer Databases for the exclusive purpose of performing its obligations under this Agreement. + + 6.3 Transfer of Dassault Systemes Customer Databases. Upon discontinuation of hosting of the Co-Branded Service, PlanetCAD will transfer to Dassault Systemes the Dassault Systemes Customer Databases upon Dassault Systemes' request. PlanetCAD will have no right, license or interest whatsoever in the Dassault Systemes Customer Databases or content therein, except to the extent necessary for performance of its obligations under this Agreement. + + 6.4 Warranty of Confidentiality of Dassault Systemes Customer Databases and Input and Output Data of Dassault Systemes Customers. The parties expressly agree that the Dassault Systemes Customer Databases and their content as well as Dassault Systemes Customers input data to be processed and output data supplied, are confidential information of Dassault Systemes, and will be treated as such, in accordance with the terms and conditions of the CNDA. + + 9 10 + + SECTION 7 COMPETITIVE RESTRICTIONS + + 7.1 Restrictions on PlanetCAD. + + (a) During the Term of this Agreement, and for a period of one year thereafter, except as expressly provided in this Agreement, PlanetCAD shall not market any services to Customers without the prior written approval of Dassault Systemes. + + (b) During the Term of this Agreement, PlanetCAD shall be permitted to market new functions and services relating to the Co-Branded Service directly to Dassault Systemes Customers with Dassault Systemes prior written approval, but only to the extent such functions and services are offered by PlanetCAD on the PlanetCAD Web site(s). + + (c) Notwithstanding the foregoing, PlanetCAD may market new functions and services on the PlanetCAD Web sites to customers that are Dassault Systemes Customers, without the consent of Dassault Systemes, provided PlanetCAD (i) obtained the contact information of such customer from an independent source unrelated to the parties to this Agreement and can provide evidence as to the independent source of the name and e-mail address of such customer, and (ii) did not use the data contained in the Dassault Systemes Customer Database(s). + + 7.2 Restrictions on Dassault Systemes. Except as contemplated under this Agreement, during the two year period following the Effective Date, Dassault Systemes shall not commercially offer any web service, which is (i) based upon the ACIS-based software transferred to Dassault Systemes in + +Source: RAND WORLDWIDE INC, 8-K/A, 4/2/2001 + + + + + +connection with the Purchase Agreement and (ii) similar to the Co-Branded Service. + + 7.3 Non-Exclusive Services Agreement. It is agreed and acknowledged by the parties that this Agreement is not an exclusive services agreement and except for the restrictions set forth in this Section nothing herein shall prohibit Dassault Systemes, PlanetCAD or any of their affiliates from developing or supplying, whether directly or indirectly, web services substantially identical to those described herein. + + SECTION 8 REPRESENTATIONS AND WARRANTIES + + 8.1 Mutual Representations. Each party represents and warrants to the other party as follows: + + (a) The performance of this Agreement does not infringe or conflict with any Intellectual Property right of any third party, and (ii) no confidential, proprietary or trade secret information of either party or their personnel that will be used in performing this Agreement has been misappropriated from any third party; and + + 10 11 + + (b) All services, work, obligations or assignments performed by either party under this Agreement will be of professional quality, conforming to generally accepted practices within the industry, and the Infrastructure including Third Party Software shall function and perform to the specifications and requirements thereof. + + 8.2 Hosting Representations and Warranties of PlanetCAD. For so long as PlanetCAD is hosting the Co-Branded Service, PlanetCAD shall use commercially reasonable efforts to ensure that the services provided on the site are equivalent in functionality and performance to the applications run on the PlanetCAD Web sites and of good quality according to generally accepted practices within the industry. + + 8.3 Disclaimer. THIS IS AN AGREEMENT SOLELY FOR SERVICES, AND THERE SHALL BE NO WARRANTIES, EXPRESS OR IMPLIED, EXCEPT AS STATED HEREIN. + + SECTION 9 INDEMNITIES AND LIMITATIONS ON LIABILITY + + 9.1 Dassault Systemes Indemnification. Dassault Systemes shall indemnify and hold harmless PlanetCAD, and its officers, directors, employees, and shareholders from and against any claims, demands, suits, causes of action, losses, damages, judgments, costs and expenses (including reasonable attorneys' fees) arising out of or related to any breach of Dassault Systemes' representations, warranties and covenants set forth in this Agreement. + + 9.2 PlanetCAD Indemnification. PlanetCAD shall indemnify and hold harmless Dassault Systemes, its affiliates, and their respective officers, directors, employees, and shareholders from and against any claims, demands, suits, causes of action, losses, damages, judgments, costs and expenses (including reasonable attorneys' fees) arising out of or related to any breach of PlanetCAD's representations, warranties and covenants set forth in this Agreement. + + 9.3 Intellectual Property Infringement.Each Party agrees to hold the other Party, its subsidiaries and distributors and assignees harmless from and against any claim of any nature, including, but not limited to, administrative, civil or criminal procedures, which is or may be made or raised against this Party, its subsidiaries and distributors and assignees by any third party that the use or distribution of the Software or any other intellectual property that is the subject of this Agreement and owned or licensed by this Party, infringes or violates any third party's patent, copyright, trade secret or other intellectual property right in any country. Indemnification hereunder shall cover all damages, regardless of their nature, settlements, expenses and costs, including costs of investigation, court costs and attorneys' fees. The payment of any indemnification shall be contingent on: + + (a) This Party giving prompt written notice to the other of any such claim or allegation; + + (b) Cooperation by this Party with the other Party in its defense against the claim; and + + 11 12 + + (c) This Party obtaining the other's prior written approval of any settlement, if any, by this Party of such matters, such approval not to be unreasonably withheld. + +Source: RAND WORLDWIDE INC, 8-K/A, 4/2/2001 + + + + + + Neither Party shall have the obligation to indemnify the other for any claims of infringement based on any modification by the latest version of its Software, or from the combination of its Software with any other program to the extent such claim would not have arisen without such combination or from use of the unmodified Software or intellectual property. + + If the operation of any Software that is the subject of this Agreement becomes, or is likely to become, the subject of a claim involving the infringement or other violation of any patent, copyright, trade secret, or other intellectual property rights of any third party, the Parties will jointly determine in good faith what appropriate steps are to be taken by them, with a view towards curing such infringement or other violation, at the Software owner's sole charge. Such steps may include, but are not limited to: + + (i) The owner securing the right to continue using its Software, or + + (ii) The owner replacing or modifying its Software so that it becomes non-infringing. + + If no other option is reasonably available, the owner of the Software agrees to use its best efforts to withdraw, at its sole expense, the infringing Software from the market. + + In the event a Derivative Work, created under this Agreement, becomes the subject of a claim of infringement, the owner of said Derivative Work shall indemnify the other Party pursuant to this Section 9. + + 9.4 LIMITATIONS ON LIABILITY. EXCEPT FOR LIABILITY ARISING FROM SECTION 9.3 [Intellectual Property Infringement], IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY INDIRECT, SPECIAL, INCIDENTAL, PUNITIVE OR CONSEQUENTIAL DAMAGES, LOSSES, OR EXPENSES INCLUDING, BUT NOT LIMITED TO, LOSS OF USE, LOSS OF PROFITS, OR LOSS OF GOODWILL, EVEN IF THAT PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH LOSS OR DAMAGE. + + EXCEPT FOR LIABILITY ARISING FROM SECTION 9.3 [Intellectual Property Infringement], IN NO EVENT SHALL EITHER PARTY BE LIABLE UNDER THIS AGREEMENT FOR AN AMOUNT GREATER THAN THE AMOUNT THAT SUCH PARTY HAS EARNED PURSUANT TO THE REVENUE SHARING PROVISIONS OF SECTION 5.4 [Share of Net Revenue] IN THE TWELVE MONTH PERIOD PRECEDING THE CLAIM. + + SECTION 10 TERM AND TERMINATION + + 10.1 Term. This Agreement shall be effective as of the Effective Date and shall continue in force for three years from the Launch Date (the "Initial Term") unless earlier + + 12 13 terminated in accordance with this Section (the "Term"). The Agreement shall automatically renew for successive one year additional terms unless terminated by either party at least six months prior to the expiration of the then-current term. + + 10.2 Breach. Either party may terminate this Agreement at any time in the event that the other party is in default or breach of any material provision of this Agreement, and such default or breach continues unremedied for a period of sixty days after written notice thereof. In addition to the right to terminate this Agreement, the non-breaching party, shall have all rights and remedies available at law and in equity. + + 10.3 Failure of Negotiations After Initial Term. The revenue sharing obligations set forth in Section 5.4 [Share of Net Revenue] shall be subject to re-negotiation at the end of the Initial Term. The parties agree to negotiate in good faith, however, in the event they are unable to agree to satisfactory terms, this Agreement shall terminate six months from the date on which the parties make a conclusive determination that satisfactory terms could not be reached. + + SECTION 11 MISCELLANEOUS + + 11.1 Confidentiality. All communications and information disclosed by one party to the other party under this Agreement shall be subject to the terms and conditions of the CNDA. + + 11.2 Freedom of Action. Except as otherwise provided, nothing contained in this Agreement shall be construed to limit or impair any right of either party to enter into similar agreements with other parties, or to develop, acquire, license or market, directly or indirectly, other products or services, competitive with those offered by the other party. + + 11.3 Additional Instruments. Notwithstanding termination of this Agreement, the parties covenant and agree to execute and deliver any additional instruments or documents necessary to carry out the general intent of this Agreement, including without limitation patent assignments or any other assignments necessary to evidence the ownership of intellectual property contemplated hereby or any such additional instruments or documents, including + +Source: RAND WORLDWIDE INC, 8-K/A, 4/2/2001 + + + + + +such instruments as may be required by the laws of any jurisdiction, now or in effect or hereinafter enacted, that may affect a party's rights, title or interest, as applicable, in and to any of the software governed hereby. + + 13 14 + + 11.4 Irreparable Injury. Each party acknowledges and agrees that each covenant in this Agreement pertaining to confidential information and ownership of intellectual property is reasonable and necessary to protect and preserve the rights of the other party in its confidential information and intellectual property, and that any breach by such party of the terms of this Agreement may result in irreparable injury to the other party. Each party, therefore, subject to a claim of laches, estoppel, acquiescence or other delay in seeking relief, consents and agrees that the other party shall be entitled to seek and obtain a temporary restraining order and a permanent injunction to prevent a breach or contemplated breach of this Agreement and waives any requirement that the other party post a bond in connection with seeking such injunctive relief. + + 11.5 Relationship of the Parties. PlanetCAD and Dassault Systemes are independent contractors, and nothing in this Agreement will create any partnership, joint venture, agency, franchise, sales representative, or employment relationship between the parties. Neither party has the authority to act as agent for the other party or to conduct business in the name of such other party or make statements, warranties or representations that exceed or are inconsistent with the warranties provided hereunder. + + 11.6 Notices. All notices required or permitted shall be given in writing, in the English language, and shall be deemed effectively delivered upon personal delivery or three days after deposit with a carrier by registered mail or other equivalent service, postage prepaid, return receipt requested, addressed as follows, or to such other address as either party may designate to the other: + + 14 15 + + In the case of PlanetCAD : + + PlanetCAD Inc. 2520 55th Street, Suite 200 Boulder, Colorado 80301 Attn. Office of the President + + In the case of Dassault Systemes: + + Dassault Systemes 9 Quai Marcel Dassault 92150 Suresnes Attn. Thibault De Tersant cc: Law Department + + 11.7 Headings. The descriptive headings contained in this Agreement are for convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement. + + 11.8 Severability. If any term or other provision of this Agreement is deemed invalid, illegal or incapable of being enforced by any law or public policy, all other terms and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. + + 11.9 Entire Agreement. This Agreement, together with the Schedules attached hereto, constitutes the entire agreement of the parties with respect to the subject matter hereof and supersedes all prior agreements and undertakings, both written and oral, between and PlanetCAD with respect to the subject matter hereof. + + 11.10 Amendment. This Agreement may not be amended or modified except by an instrument in writing signed by, or on behalf of, duly authorized representatives of Dassault Systemes and PlanetCAD. + + 15 16 + + 11.11 Applicable Law, Venue. This Agreement shall be governed by, and construed in accordance with, the Laws of the State of New York, applicable to contracts executed in and to be performed entirely within that + +Source: RAND WORLDWIDE INC, 8-K/A, 4/2/2001 + + + + + +state. This Agreement shall not be governed by the U.N. Convention on Contracts for the International Sale of Goods. The parties hereto hereby (a) submit to the exclusive jurisdiction of any court of competent jurisdiction sitting in the State of Delaware, The City of Wilmington for the purpose of any Action arising out of or relating to this Agreement brought by any party hereto, and (b) agree, to the fullest extent permitted by applicable law, to waive, and not to assert by way of motion, defense, or otherwise, in any such Action, any claim that is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the Action is brought in an inconvenient forum, that the venue of the Action is improper, or that this Agreement may not be enforced in or by any of the above-named courts. + + 11.12 Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY ACTIONS OR PROCEEDINGS DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED HEREUNDER. + + 11.13 Counterparts. This Agreement may be executed in one or more counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement. + + 11.14 No Waiver. The failure of either party to enforce any provision of this Agreement shall not constitute a waiver of the right to subsequently enforce such provision, or any other provision of this Agreement. + + 11.15 Force Majeure. Neither party shall be held liable for any failure to perform any of its obligations under this Agreement for as long as, and to the extent that such failure is due to an event of force majeure. An event of force majeure shall include general strikes, lockouts, acts of God, acts of war, mobilization of troops, fire, extreme weather, flood, or other natural calamity, embargo, acts of governmental agency, government or any other laws or regulations. + + 11.16 Expenses. Except as expressly provided for in this Agreement, each party shall bear its own expenses incurred in connection with this Agreement, including without limitation travel and living expenses incurred by that party's employees. + + 11.17 Assignment; Subcontracting; Third Party Beneficiaries. + + (a) This Agreement may be assigned or otherwise transferred, by operation of law or otherwise without the express written consent of PlanetCAD and Dassault Systemes, but in such event the assigning Party shall give notice to the non-assigning Party and the non-assigning Party shall have the right to terminate this Agreement within the 30-day period following receipt of such notice. + + 16 17 + + (b) Either party may assign or otherwise transfer all or part of this Agreement to any of its Affiliates, and for as long as it remains an Affiliate; provided that no such assignment shall relieve a party of any of its obligations under this Agreement. In the event there is a change of Control of an Affiliate which terminates its status as an Affiliate of the party to this Agreement, and this Agreement has been assigned to such an Affiliate, this Agreement must be assigned back to the party within 6 months of the effective date of the change of Control. + + (c) Either Party may subcontract services necessary to perform the obligations set forth in this Agreement provided that any and all such subcontractors shall have entered into agreements with the subcontracting Party sufficient to enable that Party to comply with all terms and conditions of this Agreement. + + (d) This Agreement shall be binding upon and inure solely to the benefit of the parties hereto and their permitted assigns, subcontractor or transferee, and nothing herein, express or implied, is intended to or shall confer upon any other person, including, without limitation, any union or any employee or former employee of either party, any legal or equitable right, benefit or remedy of any nature whatsoever, including, without limitation, any rights of employment for any specified period, under or by reason of this Agreement. + + IN WITNESS WHEREOF, each party has caused its duly authorized representative to execute this Agreement effective the day and year first above written. + + PlanetCAD Inc. Dassault Systemes + +/s/ R. Bruce Morgan /s/ Thibault de Tersant + +Source: RAND WORLDWIDE INC, 8-K/A, 4/2/2001 + + + + + + --------------- ------------------- Its: Chief Executive Officer Its: Executive Vice President Name: R. Bruce Morgan Name: Thibault de Tersant + + 17 + +Source: RAND WORLDWIDE INC, 8-K/A, 4/2/2001 \ No newline at end of file diff --git a/full_contract_txt/RangeResourcesLouisianaInc_20150417_8-K_EX-10.5_9045501_EX-10.5_Transportation Agreement.txt b/full_contract_txt/RangeResourcesLouisianaInc_20150417_8-K_EX-10.5_9045501_EX-10.5_Transportation Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..fb01e0a6701eff146663aaad82e1b1d9932d4908 --- /dev/null +++ b/full_contract_txt/RangeResourcesLouisianaInc_20150417_8-K_EX-10.5_9045501_EX-10.5_Transportation Agreement.txt @@ -0,0 +1,1021 @@ +Exhibit 10.5 + +Execution Version + +TRANSPORTATION SERVICES AGREEMENT + +This Transportation Services Agreement (this "Agreement") is made and entered into this 14t h day of April, 2015 (the "Effective Date"), by and between PennTex North Louisiana Operating, LLC, a Delaware limited liability company ("Carrier"), and MRD Operating LLC, a Delaware limited liability company ("Shipper"). Shipper and Carrier may be referred to individually as a "Party," or collectively as the "Parties." + +WITNESSETH: + +WHEREAS, Shipper has title to or the right to transport and/or sell Shipper Product (as defined below); and + +WHEREAS, Shipper desires for Carrier to (i) design, engineer and construct the System (as defined below) to enable Carrier to be able to provide transportation and related services for Shipper Product and (ii) transport Shipper Product on the System; and + +WHEREAS, Carrier desires to (i) design, engineer and construct the System and (ii) transport Shipper Product on the System. + +NOW THEREFORE, in consideration of the mutual promises, covenants and agreements herein contained, the Parties hereby covenant and agree as follows: + +ARTICLE I CERTAIN DEFINITIONS + +Unless otherwise required by the content, the terms defined in this ARTICLE I shall have, for all purposes of this Agreement, the respective meanings set forth in this ARTICLE I: + +"Affiliate" shall mean, when used with respect to any Person, any other Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with such Person. For this purpose, "control" of any Person shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, by ownership of voting interest, by contract or otherwise. For the purposes of this Agreement, (i) with respect to PennTex Midstream Partners, LLC and its subsidiaries, the term "Affiliate" shall exclude Memorial Resource Development Corp. and each of its subsidiaries and (ii) with respect to Memorial Resource Development Corp. and its subsidiaries, the term "Affiliate" shall exclude PennTex Midstream Partners, LLC and each of its subsidiaries. + +"AMI/MEA Agreement" shall mean that certain Amended and Restated Area of Mutual Interest and Midstream Exclusivity Agreement dated April 14, 2015 among PennTex North Louisiana, LLC, Shipper, PennTex NLA Holdings, LLC and MRD WHR LA Midstream LLC, as such agreement may be amended, supplemented or otherwise modified from time to time. + +"Agreement" shall have the meaning given to such term in the preamble of this Agreement. + +Source: RANGE RESOURCES - LOUISIANA, INC., 8-K, 4/17/2015 + + + + + +"Applicable Law" shall mean all applicable laws, statutes, directives, codes, ordinances, rules, regulations, municipal by-laws, judicial, arbitral, administrative, ministerial, departmental or regulatory judgments, orders, decisions, ruling or award, consent orders, consent decrees and policies of any Governmental Authority. + +"Business Day" shall have the meaning given to such term in the Tariff. + +"Carrier" shall have the meaning given to such term in the preamble of this Agreement. + +"Carrier Default" shall have the meaning given to such term in Section 8.3 of this Agreement. + +"Carrier Default Notice" shall have the meaning given to such term in Section 8.4 of this Agreement. + +"Carrier Force Majeure" shall mean an event of Force Majeure that prevents Carrier from providing all or part of the Services and shall not include a Force Majeure that prevents Shipper from delivering Shipper Product hereunder. + +"Central Clock Time" shall mean Central Standard Time, as adjusted for Central Daylight Time. + +"Claims" shall mean any and all claims, demands and causes of action of any kind and all losses, damages, liabilities, costs and expenses of whatever nature (including court costs and reasonable attorneys' fees). + +"Commencement Date" shall have the meaning given to such term in Section 2.2 of this Agreement. + +"Commencement Date Facilities" shall have the meaning given to such term in Section 7.2 of this Agreement. + +"Contract Year" shall mean a period commencing at 9:00 a.m., Central Clock Time, on the Commencement Date and ending at 9:00 a.m., Central Clock Time on the same day and calendar month of the following calendar year and thereafter for succeeding periods of twelve (12) consecutive Months each. + +"Day" or "Daily" shall mean a period of hours commencing at 9:00 a.m., Central Clock Time, on a calendar day and ending at 9:00 a.m., Central Clock Time, on the next succeeding calendar day. + +"Dedicated Rates" shall have the meaning given to such term in the Tariff. + +"Dedication" shall have the meaning given to such term in Section 7.1 of this Agreement 2 + +Source: RANGE RESOURCES - LOUISIANA, INC., 8-K, 4/17/2015 + + + + + +"Delivery Point" shall mean the delivery point at the interconnection of the System with DCP's 6" Black Lake natural gas liquids pipeline and other mutually agreeable delivery points near Ada, Bienville Parish, Louisiana as provided in the Tariff. + +"Dispute" shall mean any controversy or claim, whether based on contract, tort, statute or other legal or equitable theory (including, but not limited to, any claim of fraud, misrepresentation or fraudulent inducement or any question of validity or effect of this Agreement including this clause) arising out of or related to this Agreement (including any amendments or extension), or breach or termination thereof. + +"Dispute Notice" shall have the meaning given to such term in Section 12.2 of this Agreement. + +"Effective Date" shall have the meaning given to such term in the preamble to this Agreement. + +"FERC" shall mean the United States Federal Energy Regulatory Commission and any lawful successor agency thereto. + +"Financial Assurance" shall mean any Guarantee, letter of credit, amendment or supplement thereto or other credit enhancement provided for in ARTICLE XIII of this Agreement. + +"Force Majeure" shall have the meaning given to such term in Section 11.2 of this Agreement. + +"Gallon" means one (1) U.S. gallon. + +"Gas" shall mean any mixture of gaseous hydrocarbons, consisting essentially of methane and heavier hydrocarbons and inert and noncombustible gases that are extracted from the subsurface of the earth. + +"Governmental Authority" shall mean (i) the United States of America, (ii) any state, county, parish, municipality or other governmental subdivision within the United States of America, and (iii) any court or any governmental department, commission, board, bureau, agency or other instrumentality of the United States of America or of any state, county, municipality or other governmental subdivision within the United States of America. + +"Guarantee" shall have the meaning given to such term in Section 13.1 of this Agreement. + +"Interest" shall mean any right, title, or interest in lands, wells, or leases and the right to produce oil and/or natural gas therefrom whether arising from fee ownership, working interest ownership, mineral ownership, leasehold ownership, farm-out or arising from any pooling, unitization or communitization of any of the foregoing rights. 3 + +Source: RANGE RESOURCES - LOUISIANA, INC., 8-K, 4/17/2015 + + + + + +"Lincoln Parish Plant" shall mean that certain natural gas processing plant to be constructed by Carrier or one of its Affiliates and located in Arcadia, Lincoln Parish, Louisiana. + +"Losses" shall mean any actual loss, cost, expense, liability, damage, demand, suit, sanction, claim, judgment, lien, fine or penalty, including attorneys' fees, asserted by a third party not Affiliated with the Party incurring such, and which are incurred by the applicable indemnified Persons on account of injuries (including death) to any person or damage to or destruction of any property, sustained or alleged to have been sustained in connection with or arising out of the matters for which the indemnifying party has indemnified the applicable indemnified Persons. + +"Month" shall mean a period of time beginning at 9:00 a.m., Central Clock Time on the first day of a calendar month and ending at 9:00 a.m., Central Clock Time on the first day of the next succeeding calendar month. + +"Mount Olive Plant" shall mean that certain natural gas processing plant to be constructed by Carrier or one of its Affiliates and located in Ruston, Lincoln Parish, Louisiana. + +"New Facility" shall have the meaning given to such term in Section 7.3 of this Agreement. + +"Nomination" (including "Nominates" and the syntactical variants thereof) shall have the meaning given to such term in the Tariff. + +"Parties" shall have the meaning given to such term in the preamble of this Agreement. + +"Party" shall have the meaning given to such term in the preamble of this Agreement. + +"Person" shall mean any individual, firm, corporation, trust, partnership, limited liability company, association, joint venture, other business enterprise or Governmental Authority. + +"Plants" shall mean (i) the Lincoln Parish Plant, (ii) the Mount Olive Plant and (iii) any other gas processing plant owned by Carrier or its Affiliate that is capable of extracting Shipper Product and transporting such Shipper Product from the tailgate of such plant to the System. "Plant" shall mean any of such Plants. + +"Product" shall mean a demethanized mixture of natural gas liquids comprised primarily of ethane, propane, iso-butane, normal butane, iso- pentane, normal pentane, hexanes and heavier hydrocarbons, incidental volumes of methane, as well as other non-hydrocarbon compounds. + +"Receipt Points" shall mean the receipt points provided for in the Tariff at the tailgate of the Plants where Carrier accepts Product for transport on the System. + +"Services" shall mean receipt and transportation on the System of Product for Shipper's account from the Receipt Points and delivery to the Destination Point specified in Shipper's Nomination. 4 + +Source: RANGE RESOURCES - LOUISIANA, INC., 8-K, 4/17/2015 + + + + + +"Shipper" shall have the meaning given to such term in the preamble of this Agreement. + +"Shipper Default" shall have the meaning given to such term in Section 8.1 of this Agreement. + +"Shipper Default Notice" shall have the meaning given to such term in Section 8.2(a) of this Agreement. + +"Shipper Product" shall mean Product that is attributable to Gas that is delivered by Customer or its designee to, and processed at, a Plant. + +"Shipper's Dedicated Rates" shall have the meaning given to such term in Section 6.1 of this Agreement. + +"System" shall have the meaning given to such term in the Tariff. + +"Tariff" shall mean Carrier's rate, rules and regulations tariff for the System on file and in effect with the FERC or other Governmental Authority, as such tariff may be amended or supplemented by Carrier from time to time in accordance with this Agreement, a pro forma copy of which, materially in the form expected to be filed by Carrier with the FERC, is attached hereto as Exhibit A. + +"Tariff Rate Revision Proceeding" shall have the meaning given to such term in Section 14.3. + +"Taxes" shall mean any or all current or future taxes, fees, levies, charges, assessments and/or other impositions levied, charged, imposed, assessed or collected by any Governmental Authority having jurisdiction. + +"Term" shall have the meaning given to such term in Section 2.1 of this Agreement. + +"Third Party Operator" means an operator of a pipeline or other facility upstream or downstream of the System, other than Carrier or its Affiliates. + +ARTICLE II TERM + +2.1 Term. This Agreement shall commence on the Effective Date and continue in full force and effect until the end of the fifteenth (15th) Contract Year, and shall continue in full force and effect thereafter until terminated by either Party by providing thirty (30) calendar days' prior written notice of termination to the other Party (such fifteen (15) Contract Year period, as may be further extended as provided herein is referred to as the "Term"). + +2.2 Commencement Date. The "Commencement Date" under this Agreement shall be the first day of the Month following the date Carrier notifies Shipper that (i) Carrier has obtained all required operating permits and/or approvals of regulatory authorities necessary to operate the System, (ii) the System is operational to the extent necessary to commence the 5 + +Source: RANGE RESOURCES - LOUISIANA, INC., 8-K, 4/17/2015 + + + + + +Services hereunder, and (iii) the Delivery Point listed on Schedule A is operational and all necessary interconnect agreements with interconnecting pipelines necessary to deliver Shipper Product to such Delivery Point are in effect to the extent necessary to commence commercial service with respect to the delivery (but, for the avoidance of doubt, not the further downstream transportation) of Shipper Product. Carrier will not be responsible for delays to the Commencement Date due to the action or inaction of Shipper or Third Party Operators. + +ARTICLE III [RESERVED] + +ARTICLE IV CARRIER RIGHTS AND OBLIGATIONS + +4.1 Provision of Services. Subject to the terms and conditions of this Agreement, Carrier shall, commencing on the Commencement Date and continuing through the remainder of the Term of this Agreement, provide Services for Shipper Product in accordance with, and subject to, this Agreement, including the Tariff, which is incorporated herein by reference and constitutes part of this Agreement, expressly including provisions in the Tariff relating to the charges and rules and regulations applicable to Shipper as a party to this Agreement. This Section 4.1 shall not apply to Carrier during any period when Shipper is in breach of its obligations to Carrier under this Agreement or the Tariff. The Services do not include any terminaling, tankage or storage. + +ARTICLE V SHIPPER RIGHTS AND OBLIGATIONS + +5.1 Tariff. Shipper's nominations and tenders of Product for shipment, and Carrier's scheduling, acceptance, transporting, measuring and delivering of Product, shall, at all times, be subject to, and implemented in accordance with the Tariff. Shipper shall comply with the Tariff at all times. The Tariff is subject to amendment by Carrier in accordance with Section 15.1. + +5.2 Shipper Reliance on Carrier Performance. All Shipper Product received at the Receipt Points for Services hereunder is deemed to be in compliance with all Product specifications set forth in the Tariff or Carrier shall waive such specifications to accept Shipper Product and all Shipper Product delivered to the Delivery Point hereunder shall be in compliance with all Product specifications set forth in the Tariff. + +ARTICLE VI FEES + +6.1 Transportation Rate. Shipper shall pay rates for Shipper Product transported on the System in accordance with the Tariff, which shall, to the extent permitted by Applicable Law, provide for the following: + + (a) For all Shipper Product transported on the System and delivered to a Delivery Point each Month, Shipper shall pay Carrier atransportation fee for such Month 6 + +Source: RANGE RESOURCES - LOUISIANA, INC., 8-K, 4/17/2015 + + + + + + equal to the applicable Dedicated Rates, which shall initially be the rate(s) set forth in Schedule A attached hereto, and which shall be increased by Carrier annually, effective July 1 of each year following the Commencement Date, as provided in the Tariff ("Shipper's Dedicated Rates"). + +6.2 Regulation Changes. Notwithstanding anything herein to the contrary, in the event that, after the Effective Date, any Governmental Authority promulgates, issues or changes any rules, regulations or other mandates that impose any material fee, charge or cost upon Carrier in connection with the performance of the Services performed hereunder, excluding normal fees, charges or costs that are incurred by Carrier irrespective of whether Carrier provides the Services on behalf of Shipper and excluding Taxes addressed in Article XVII, then Carrier may increase the then-effective Shipper's Dedicated Rates by up to ten percent (10%) to account for such fees, charges or costs (to the extent such fees, charges or costs are attributable to Shipper Product); provided, however, the cumulative effect of all such increases pursuant to this Section 6.2 may not exceed thirty percent (30%) of the initial Shipper's Dedicated Rates (as the same may be adjusted pursuant to the Tariff from time to time). If, in Carrier's reasonable judgment, an increase in Shipper's Dedicated Rates of more than ten percent (10%) would be required to place Carrier in substantially the same economic position as it was in prior to the imposition or assessment of such fees, charges or costs, Carrier may call for a meeting among the Parties' senior management to take place within thirty (30) Days of written notice to Shipper, and the Parties shall negotiate in good faith to amend the provisions of this Agreement such that the Parties are in substantially the same relative economic position as they were in prior to the imposition or assessment of such fees, charges or costs. If the Parties are unable to agree on an economic adjustment within sixty (60) Days of the senior management meeting, then Carrier may, in its sole discretion, terminate this Agreement without penalty by delivering Shipper written notice of Carrier's intent to terminate. Such termination shall be effective, at the option of Shipper, (i) as of 9:00 a.m. on the first Day of the Month which follows the Month that Carrier delivered its notice of intent to terminate, or (ii) as of 9:00 a.m. on the first Day of the Month which is twelve (12) Months after such date, provided that Shipper's Dedicated Rates for such twelve (12) Month period before such termination shall be increased to place Carrier in substantially the same economic position as it was in prior to the imposition or assessment of such fees, charges, or costs. Shipper shall exercise such option by delivery of written notice to Carrier of Shipper's election within ten (10) Business Days of receipt of Carrier's notice to terminate, provided that if Shipper has not responded to Carrier by the time described in clause (i) above, the Agreement shall continue pursuant to clause (ii) above. + +Shipper shall be entitled to audit Carrier's applicable books and records for the limited purpose of determining if the amount of any increase pursuant to this Section 6.2 is justified by the actually-incurred and reasonable amount of the aggregate costs and/or expenses relating to the System; provided, however, such audit shall not require Carrier to disclose confidential information of any Person other than Shipper who is a shipper on the System. If such audit shall reflect that such increase was not justifiable in accordance with the foregoing, Carrier shall promptly credit the amount of such discrepancy to Shipper, unless Carrier disagrees with the results of such audit, in which case the matter shall be resolved pursuant to the dispute resolution provisions set forth in Article XII hereof. + +6.3 Governmental Modifications. Notwithstanding anything herein to the contrary, the Parties acknowledge that the Tariff rates payable for all Services are subject to the approval of and modification by the FERC or any other Governmental Authority having jurisdiction. 7 + +Source: RANGE RESOURCES - LOUISIANA, INC., 8-K, 4/17/2015 + + + + + +ARTICLE VII DEDICATION & FACILITIES + +7.1 Dedication. During the Term, subject to the terms of the AMI/MEA Agreement, Shipper dedicates and commits to this Agreement, and shall deliver or cause to be delivered to the System for transportation hereunder, all Shipper Product (the "Dedication"); provided, however, if Carrier is unable to provide Services with respect to all or any volume of Shipper Product, then such volume will be temporarily released from the Dedication until Carrier provides Shipper written notice that Carrier will be able to resume receiving such volume hereunder. Notwithstanding anything in this Agreement to the contrary, it is acknowledged and agreed that there is no minimum amount of Shipper's Product that must be delivered to the System hereunder; accordingly, Shipper shall not have any liability (financial or otherwise) for failure to deliver any particular quantity of Product to Carrier; provided, however, the foregoing sentence shall not reduce or eliminate Shipper's obligation to pay the fees provided herein to the extent Services are provided hereunder. + +7.2 Commencement Date Facilities. Carrier shall design, engineer, modify, construct and equip, or caused to be designed, engineered, modified, constructed and equipped, Carrier's System, including, without limitation, the facilities and equipment described on Exhibit B attached hereto (the facilities and equipment described on Exhibit B being collectively referred to as the "Commencement Date Facilities"). + +7.3 Post-Commencement Date Facilities. + +(a) After the Commencement Date, in connection with the construction of the Mount Olive Plant, Carrier will construct 13 miles of 8" pipeline between the Mount Olive Plant and the Lincoln Parish Plant, and a Receipt Point at the Mount Olive Plant. + +(b) If after the Commencement Date, Shipper requires an addition, modification, alteration, replacement, or expansion of the System, other than as noted in Section 7.3(a) above (a "New Facility"), Shipper will provide Carrier a written notification of such requested New Facility containing sufficient information for Carrier to estimate the cost to provide such New Facility. Although Carrier shall have no obligation to provide a requested New Facility, Carrier may, in its sole discretion, agree to construct or acquire such New Facility. The commercial terms applicable the construction or acquisition of any New Facility will be determined in accordance with the AMI/MEA Agreement. The Parties agree to make any revisions to this Agreement (including the Exhibits hereto) that are necessary to reflect any New Facility. 8 + +Source: RANGE RESOURCES - LOUISIANA, INC., 8-K, 4/17/2015 + + + + + +ARTICLE VIII DEFAULTS AND REMEDIES + +8.1 Shipper Defaults. Subject to Section 11.1 hereof, the following events shall be a "Shipper Default": + +(a) the occurrence and continuation of a material breach by Shipper of any of its obligations under this Agreement or the Tariff, unless such material breach occurs as a result of a breach or default by Carrier of its obligations under this Agreement or the Tariff; or + +(b) the occurrence and continuation of a breach under ARTICLE XIII, Financial Assurances. + +8.2 Remedies on Shipper Default. + +(a) Upon becoming aware of the occurrence of a Shipper Default with respect to Shipper's obligations under this Agreement or the Tariff, Carrier may provide written notice to Shipper describing the Shipper Default in reasonable detail and requiring Shipper to cure the Shipper Default (the "Shipper Default Notice"). If (i) a Shipper Default as described in Section 8.1(a) has not been cured within ten (10) Business Days following receipt by Shipper of a Shipper Default Notice, or (ii) the Shipper Default comprises a default described in Section 8.1(b), then, in any such case, and in addition to Carrier's right to enforce the Financial Assurances and Carrier's other rights and remedies provided for in this Agreement, in the Tariff or under Applicable Law, Carrier shall not be obligated to transport Shipper Product and may suspend the provision of other Services to Shipper. + +(b) If the Shipper Default continues for a period of ninety (90) or more Days, or, if such failure is not reasonably capable of being cured within a ninety (90) Day period, but Shipper expeditiously commences to cure the same following its receipt of a Shipper Default Notice and diligently proceeds with such cure, within such longer period of time as shall be reasonably necessary to cure such failure, Carrier shall be entitled, by notice in writing to Shipper, to: + +(1) terminate this Agreement, any such termination to be effective upon receipt of the applicable notice by Shipper, in which event Shipper shall be liable to Carrier for (i) all of its accrued obligations up to and including the effective date of termination, and (ii) any and all other losses and damages sustained by Carrier as a result of or arising out of such termination; and/or + +(2) draw on any guaranty, letter of credit or other financial assurance provided by Shipper pursuant to ARTICLE XIII, Financial Assurances. If Carrier terminates this Agreement pursuant to Section 8.2(b) hereof, Carrier shall be entitled to apply the proceeds of such financial assurance to Shipper's obligations and Carrier's losses and damages referenced in this Section 8.2(b). In all other circumstances in which Carrier calls on any financial assurance provided by Shipper pursuant to 9 + +Source: RANGE RESOURCES - LOUISIANA, INC., 8-K, 4/17/2015 + + + + + +ARTICLE XIII, Financial Assurances, following a Shipper Default, Carrier shall be entitled to apply the proceeds to cure such Shipper Default, and to hold the remaining proceeds as additional security for the payment and performance of Shipper's obligations under this Agreement and the Tariff. + +The rights and remedies under this Section 8.2(b) shall be in addition to all of Carrier's other rights and remedies under this Agreement or the Tariff or which Carrier may otherwise have at law, in equity or by statute or regulation, and the exercise of one or more rights or remedies shall not prejudice or impair the concurrent or subsequent exercise by Carrier of other rights or remedies. + +8.3 Carrier Default. Subject to Section 11.1 hereof, the following event shall be a "Carrier Default": the occurrence and continuation of a material breach or default by Carrier of any of its obligations under this Agreement or the Tariff, unless such material breach or default occurs as a result of a breach or default by Shipper of its obligations under this Agreement or the Tariff. + +8.4 Remedies on Carrier Default. Upon becoming aware of the occurrence of a Carrier Default, Shipper may provide written notice to Carrier, describing the Carrier Default in reasonable detail and requiring Carrier to cure the Carrier Default (the "Carrier Default Notice"). If (a) a Carrier Default comprising Carrier's failure to make any payment due hereunder has not been cured within ten (10) Business Days following receipt by Carrier of a Carrier Default Notice, or (b) a Carrier Default comprising Carrier's failure to comply with any obligation under this Agreement or the Tariff, other than a payment obligation, has not been cured within ninety (90) Days after receipt by Carrier of a Carrier Default Notice, or, if such failure is not reasonably capable of being cured within a ninety (90) Day period, but Carrier expeditiously commences to cure the same following its receipt of a Carrier Default Notice and diligently proceeds with such cure, within such longer period of time as shall be reasonably necessary to cure such failure, then in any such case, Shipper may, by written notice to Carrier, inform Carrier of its intention to terminate this Agreement if such Carrier Default is not cured within a further ninety (90) Day period, and if any such Carrier Default has not been cured within such further period of ninety (90) Days, Shipper may, by written notice to Carrier, terminate this Agreement, any such termination to be effective upon receipt of such termination notice by Carrier. + +The rights and remedies under this Section 8.4 shall be in addition to all of Shipper's other rights and remedies under this Agreement or the Tariff or which Shipper may otherwise have at law, in equity or by statute or regulation, and the exercise of one or more rights or remedies shall not prejudice or impair the concurrent or subsequent exercise by Shipper of other rights or remedies. + +ARTICLE IX WARRANTY OF TITLE AND PRODUCT INTERESTS + +9.1 Title Warranty. Shipper warrants to Carrier that at the time Shipper Product is delivered to a Receipt Point hereunder, Shipper will have good title or the right to deliver such Shipper Product, and that such Shipper Product shall be free and clear of all liens and adverse 10 + +Source: RANGE RESOURCES - LOUISIANA, INC., 8-K, 4/17/2015 + + + + + +claims, other than statutory liens and liens, encumbrances or claims under credit facilities or other credit arrangements in respect of borrowed money. Shipper agrees, with respect to the Shipper Product delivered by to Carrier hereunder, to indemnify Carrier against all suits, actions, debts, accounts, damages, costs (including attorney's fees), losses and expenses arising from or out of any adverse claims of any and all persons to or against said Shipper Product other than any lien, claim or encumbrance alleged to have arisen by, through or under Carrier or its Affiliate. + +9.2 Proceeds of Production. Shipper agrees to make payment of all royalties, overriding royalties, production payments, and all other payments for interests attributable to Shipper Product delivered hereunder due to any Person under any leases or other documents in accordance with the terms thereof. + +9.3 Indemnification. Shipper agrees to indemnify and hold Carrier harmless from any and all Claims and Losses incurred in connection with, or in any manner whatsoever relating to payment of Taxes, royalties, overriding royalties, production payments, and all other payments for interests attributable to Shipper Product transported hereunder. + +ARTICLE X WAIVER OF CERTAIN DAMAGES + +NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT, IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY OR ITS AFFILIATES, ANY SUCCESSORS IN INTEREST OR ANY BENEFICIARY OR ASSIGNEE OF THIS AGREEMENT FOR ANY CONSEQUENTIAL, MULTIPLE, INCIDENTAL, INDIRECT, SPECIAL, EXEMPLARY OR PUNITIVE DAMAGES, OR LOSS OF PROFITS OR REVENUES ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY BREACH HEREOF; PROVIDED, HOWEVER, THE FOREGOING SHALL NOT BE CONSTRUED AS LIMITING AN OBLIGATION OF A PARTY HEREUNDER TO INDEMNIFY, DEFEND AND HOLD HARMLESS THE OTHER PARTY AGAINST CLAIMS ASSERTED BY UNAFFILIATED THIRD PARTIES, INCLUDING, BUT NOT LIMITED TO, THIRD PARTY CLAIMS FOR SPECIAL, INDIRECT, CONSEQUENTIAL, PUNITIVE OR EXEMPLARY DAMAGES. THIS ARTICLE X SHALL APPLY NOTWITHSTANDING THE SOLE, JOINT OR CONCURRENT NEGLIGENCE, FAULT OR RESPONSIBILITY OF THE PARTY WHOSE LIABILITY IS WAIVED BY THIS PROVISION, OR ANY OTHER EVENT OR CONDITION, WHETHER ANTICIPATED OR UNANTICIPATED, AND REGARDLESS OF WHETHER PRE-EXISTING PRIOR TO THE DATE OF THIS AGREEMENT. + +ARTICLE XI FORCE MAJEURE + +11.1 Suspension of Obligations. In the event Carrier or Shipper is rendered unable, wholly or in part, by reason of Force Majeure to carry out its obligations under this Agreement (other than the obligation to make payment of amounts due hereunder, including without 11 + +Source: RANGE RESOURCES - LOUISIANA, INC., 8-K, 4/17/2015 + + + + + +limitation, payment of fees due hereunder), it is agreed that such Party shall give notice and reasonably full particulars of such Force Majeure, in writing, or other electronic means to the other Party within a reasonable time after the occurrence of the cause relied on, and the obligations of the Party giving such notice, so far as they are affected by such Force Majeure, shall be suspended during the continuance of any inability so caused, but for no longer period, and such cause shall, so far as possible, be remedied with all reasonable dispatch. It is understood and agreed that the settlement of strikes or lockouts shall be entirely within the discretion of the Party having the difficulty, and that the above requirement that any Force Majeure shall be remedied with all reasonable dispatch shall not require the settlement of strikes or lockouts by acceding to the demands of the opposing party when such course is inadvisable in the discretion of the Party having the difficulty. + +11.2 Definition of Force Majeure. The term "Force Majeure" as used herein shall mean acts of God; strikes, lockouts, or other industrial disturbances; conditions arising from a change in governmental laws, orders, rules, or regulations; acts of public enemy; wars; blockades; insurrections; riots; epidemics; landslides; lightning; earthquakes; fires; storms; floods; washouts; arrests and restraints of governments and people; civil disturbances; explosions; breakage or accident to machinery or lines of pipe; the necessity for making repairs, tests, alterations, or performing maintenance to machinery or lines of pipe; scheduled maintenance; freezing of wells or lines of pipe; partial or entire failure of wells, processing, or gasification and gas manufacturing facilities; orders or directives of, or proceedings initiated by, any Governmental Authority; and any other causes, whether of the kind herein enumerated or otherwise, not within the control of the Party claiming relief hereunder, and which by the exercise of due diligence, such Party is unable to prevent or overcome. Such term shall likewise include those instances (a) where either Carrier or Shipper is required to obtain servitudes, rights-of-way, grants, permits or licenses to enable such Party to fulfill its obligations under this Agreement and is unable to acquire or experiences delays in acquiring such servitudes, rights-of-way, grants, permits or licenses, at reasonable costs, and after the exercise of reasonable diligence, and (b) the partial or entire failure or refusal of Third Party Operators to receive or deliver Gas, or increases in pressure of upstream or downstream pipelines. Force Majeure shall not include failure of Product supply due to pricing considerations. + +11.3 Termination Based on Carrier Force Majeure. If as a result of an event of Carrier Force Majeure, Carrier provides no Services to Shipper for a period of at least twelve (12) consecutive Months, either Party shall be entitled to terminate this Agreement by written notice to the other Party given at any time after the expiration of such twelve (12) Month period, but prior to the cessation of the applicable event of Carrier Force Majeure. Shipper's termination right under this Section 11.3 shall be subject to its compliance with Section 14.2 in connection with any certificates, approvals, authorizations and permits required by Carrier as a result of the event of Carrier Force Majeure. + +ARTICLE XII DISPUTE RESOLUTION + +12.1 Resolution of Disputes. Any Dispute shall be resolved pursuant to the provisions of this ARTICLE XII, which shall be the sole and exclusive procedures for the resolution of any 12 + +Source: RANGE RESOURCES - LOUISIANA, INC., 8-K, 4/17/2015 + + + + + +such Dispute. Any Party that fails to first attempt to resolve any Dispute using direct negotiations shall pay all legal and consulting fees and costs incurred by the other Party in any suit, action, or proceeding to enforce the terms of this ARTICLE XII. While the procedures in this ARTICLE XII are pending, each Party shall continue to perform its existing obligations under the Agreement to the extent those obligations are not the subject of the Dispute. + +12.2 Dispute Notice. Prior to submitting any Dispute for resolution by a court, a Party shall provide written notice (a "Dispute Notice") to the other of the occurrence of such dispute. The Dispute Notice shall contain (i) a concise statement describing the Dispute, including a description of its nature, circumstances and cause, (ii) an explanation of the basis and justification for the Dispute, including reference to any pertinent provision(s) of the Agreement, (iii) if applicable, the estimated dollar amount of the Dispute and how that estimate was determined, (iv) the claiming Party's desired resolution, and (v) any other information the claiming Party deems relevant. + +12.3 Direct Negotiation. Commencing within thirty (30) Days after the Dispute Notice is received and concluding fifteen (15) Business Days thereafter, the authorized representatives of the Parties with decision-making authority shall meet in person in Houston, Texas (or in a place mutually agreed upon by the Parties to the Dispute) and confer, in good faith, to seek to resolve the Dispute raised in the Dispute Notice. If the Parties are unable to resolve the Dispute for any reason within such fifteen (15) Business Day period, then either Party shall be entitled to pursue any remedies available at law or in equity; provided, however, this Section 12.3 shall not limit a Party's right to initiate litigation prior to the expiration of the time periods set forth in this Section 12.3 if application of such limitations would prevent a Party from filing a lawsuit or claim within the applicable period for filing lawsuits (e.g. statutes of limitation, prescription, etc.). + +12.4 Jurisdiction and Venue. The Parties hereby irrevocably consent to the exclusive jurisdiction of the state or federal courts located in Harris County, Texas. The Parties hereby irrevocably and unconditionally waive, to the fullest extent they may legally and effectively do so, any objection which they may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby in any federal or state court located in Harrison County, Texas. + +12.5 Costs and Expenses. The prevailing Party in any litigation pertaining to any Dispute hereunder shall be entitled to recover its reasonable costs, expenses and attorney's fees in connection with such litigation. + +12.6 Waiver of Jury Trial. The Parties hereby waive all rights to a trial by jury for any and all Disputes. + +12.7 Confidentiality of Dispute Resolution. + +(a) The Parties agree that any Dispute and any negotiations among the Parties in relation to any Dispute shall be subject to the confidentiality provisions of this Agreement. 13 + +Source: RANGE RESOURCES - LOUISIANA, INC., 8-K, 4/17/2015 + + + + + +(b) The Parties further agree that any information, documents or materials produced for the purposes of, or used in, negotiations of any Dispute shall be subject to the confidentiality provisions of this Section 12.7. The Parties further agree that upon the request of the providing Party, any information, documents or materials produced by such Party for the purpose of negotiations of any Dispute shall be destroyed or returned to the providing Party within thirty (30) Days of the resolution of such Dispute or the issuance of a final decision with respect to such Dispute; provided, however, any confidential information (i) found in drafts, notes, studies and other documents prepared by or for the receiving Party or its representatives, or (ii) found in electronic format as part of receiving Party's off-site or on-site data storage/archival process system, will be held by the receiving Party or destroyed at the receiving Party's option. + +(c) Without limiting the foregoing, the Parties agree that disclosure of confidential information may be made to third parties: + +(1) In order to enforce any of the provisions of this Agreement or the tariff, including without limitation, any court judgment. + +(2) Who consist of a Party's auditors, legal advisers, insurers or Affiliates. + +(3) If the Party making such disclosure is under a legal or regulatory obligation to make such disclosure, but limited to the extent of such legal obligation. + +(4) With the prior written consent of the other Party not making the disclosure. + +(d) The Parties agree to submit to the jurisdiction of a court of competent jurisdiction located in Harris County, Texas for the purpose of any proceedings to enforce this Section 12.7 and, except as permitted under this Section 12.7(c), the receiving Party shall prevent any information, documents or materials belonging to a disclosing Party from being disclosed to third parties. + +ARTICLE XIII FINANCIAL ASSURANCES + +13.1 Financial Assurances. If Shipper has failed to pay any amount when due under this Agreement and if such non-payment is not being disputed in good faith by Shipper, Carrier shall have the right to request and receive from Shipper adequate assurance of performance ("Financial Assurance") which shall mean credit support in a form reasonably acceptable to Carrier and in an amount and for the term reasonably acceptable to Carrier. Any of the following shall be an acceptable form of credit support: + + (a) An irrevocable standby letter of credit from a bank satisfactory to Carrier; 14 + +Source: RANGE RESOURCES - LOUISIANA, INC., 8-K, 4/17/2015 + + + + + + (b) Provide a prepayment or a deposit in advance of the Month in which Services hereunder are to be provided; or + + (c) A performance bond issued by a Person satisfactory to Carrier. + +If the credit of Shipper's guarantor is satisfactory in Carrier's opinion, a demand for Financial Assurance can be satisfied with a guarantee issued on behalf of Shipper in a form acceptable to Carrier, but only for as long as the credit of Shipper's guarantor continues to be acceptable to Carrier. Carrier acknowledges and agrees that Memorial Resource Development Corp. is a satisfactory guarantor. + +Should Shipper or its guarantor fail to provide Financial Assurance within ten (10) Business Days after receipt of written demand for such assurance, then Carrier shall have the right to suspend performance under this Agreement until such time as Shipper furnishes Financial Assurance. For the avoidance of doubt, such suspension of performance by Carrier shall not relieve Shipper of its obligation to make payments of amounts due hereunder, including, without limitation, payment of fees due hereunder. + +If during the Term, Carrier has failed to pay any amount when due under this Agreement and if such non-payment is not being disputed in good faith by Carrier, Shipper shall have the right to request and receive from Carrier adequate Financial Assurance under similar terms and conditions as described above, including the right to suspend performance under this Agreement until such time as Carrier furnishes Financial Assurance. + +ARTICLE XIV DUTY TO SUPPORT + +14.1 Arm's Length Negotiations. Each of the Parties acknowledges and agrees that this Agreement is the result of good faith, arm's length negotiations which have resulted in an agreement that is fair and equitable to Carrier and Shipper. + +14.2 Shipper Support. Shipper hereby agrees, upon written request by Carrier provided at least ten (10) days prior to the deadline for such action: (a) to not object to Carrier's applications for necessary certificates, approvals, authorizations and permits of the FERC and Louisiana regulating bodies, if any, in relation to the System; (b) to not object to the Tariff rates calculated in accordance with the terms of this Agreement, and not take any action directly or indirectly that could be interpreted as evidence of Shipper's lack of support for such Tariff rates; and (c) to not object to the pro forma Tariff materially in the form attached as Exhibit A, in any and all regulatory proceedings relating thereto and not take any action or inaction that could be interpreted as evidence of Shipper's lack of support therefor; provided that nothing in the foregoing shall obligate Shipper to support future changes to the Tariff rates that are inconsistent with this Agreement, or prevent Shipper from opposing any position taken by Carrier before FERC and/or Louisiana regulating bodies that is inconsistent with this Agreement. 15 + +Source: RANGE RESOURCES - LOUISIANA, INC., 8-K, 4/17/2015 + + + + + +14.3 No Tariff Rate Revision Proceedings. Each of the Parties further acknowledges that the setting of Tariff rates for the System is subject to the approval of, and potential modification by, the FERC, from time to time, and each of the Parties hereby agrees not to, directly or indirectly, commence or support any application, motion or other proceeding (a "Tariff Rate Revision Proceeding") before the FERC for the purpose of requesting the FERC to set tariff rates applicable to the System which are inconsistent with this Agreement. + +14.4 Third Party Proceedings. In the event of any Tariff Rate Revision Proceeding being commenced by a third party or by the FERC itself, and in the event of any other proceedings pursuant to which the Tariff rates for the System may be reviewed by the FERC or other Governmental Authority having jurisdiction, Shipper agrees to not object to the setting of Tariff rates applicable to the System that are consistent with this Agreement. In the event of any other proceedings challenging any of the terms of this Agreement being commenced by a third party or by the FERC itself, Shipper agrees to provide all reasonable support and cooperation in defending such terms or otherwise resolving the complaint or other challenge as shall be reasonably requested by Carrier. + +ARTICLE XV COMMON CARRIER AND COMPLIANCE WITH APPLICABLE LAWS + +15.1 Common Carrier Pipeline. The System will be operated as a common carrier pipeline, and Shipper's rights hereunder shall be subject to all laws related to and governing the operation of common carrier pipelines, including, without limitation, laws and regulations that prevent discrimination in favor of any given shipper or the provision of service for consideration other than the rate set forth in a published tariff. The Tariff shall apply to the Services provided hereunder, and if there is a conflict between a provision of this Agreement and the Tariff, the Tariff shall apply. Carrier reserves the right to modify or amend the Tariff, in its sole discretion, as it deems necessary; provided, however, any such modification or amendment shall be consistent with this Agreement. + +15.2 Compliance with Laws. Both Parties shall, in carrying out the terms and provisions of this Agreement, abide by all present and future laws of any Governmental Authorities. + +ARTICLE XVI ASSIGNMENT + +16.1 Restrictions on Assignment. This Agreement may not be assigned, disposed of, alienated or otherwise transferred by either Party, in whole or in part, without the prior written consent of the other Party, which consent shall not be unreasonably withheld, conditioned or delayed, except as provided below. + +16.2 Permitted Assignments. Notwithstanding the foregoing, (i) either Party may assign this Agreement to an Affiliate of such Party without the consent of the other Party, (ii) either Party may pledge this Agreement to secure any credit facility or indebtedness of such 16 + +Source: RANGE RESOURCES - LOUISIANA, INC., 8-K, 4/17/2015 + + + + + +Party or its Affiliates without the consent of the other Party, (iii) Carrier may assign this Agreement without Shipper's consent in connection with the sale or transfer of the System, and (iv) Shipper may assign or partially assign this Agreement without Carrier's consent in connection with the sale or transfer of all or part of Shipper's ownership interests in the wells (or in the lands upon which such wells are located) producing Gas from which the Product delivered hereunder is extracted, provided that such assignee has a credit rating reasonably acceptable to Carrier at the time of such sale or transfer. In the case of transfers under clause (iv) above, the transferor shall be released from its obligations and liabilities under this Agreement to the extent of the obligations assumed by the transferee, provided that Shipper's and such transferee's combined obligations to Carrier shall be no greater than Shipper's obligations to Carrier prior to such transfer. + +16.3 Collateral Assignments. Either Party may grant a lien or security interest in this Agreement to any Person as security in connection with arranging financing for such Party or any Affiliate of such Party (and each Party agrees to execute all consents, estoppels, waivers and other documents and instruments reasonable requested by any such Person). + +ARTICLE XVII TAXES + +Shipper shall pay, or cause to be paid, all production, severance, gross receipts, ad valorem, and similar Taxes, and all surcharges, levied or imposed on it by any Governmental Authority with respect to Shipper Product. In the event Carrier is required to pay or remit any such Tax or surcharge owed by Shipper, Shipper shall reimburse Carrier for such Tax or surcharge pursuant to Carrier's invoice for the same. Shipper hereby agrees to indemnify, defend and hold harmless Carrier from and against any and all claims and losses arising out of or related to such Taxes or surcharges. This indemnity and defense obligation shall survive the expiration or termination of this Agreement. Carrier shall be responsible for all Taxes or surcharges levied or imposed on it by any Governmental Authority with respect to the System and Carrier's other facilities, including without limitation, Carrier's gas processing plants. + +ARTICLE XVIII NOTICE AND STATEMENTS + +18.1 Notice. Any notice, statement, payment, claim or other communication required or permitted hereunder shall be in writing and shall be sent by: (i) facsimile transmission; (ii) delivered by hand; (iii) sent by United States mail with all postage fully prepaid; or (iv) by courier with charges paid in accordance with the customary arrangements established by such courier, in each of the foregoing cases addressed to the Party at the following addresses: + +Carrier NOTICES AND CORRESPONDENCE: + +PennTex North Louisiana Operating, LLC Attn: General Counsel 11931 Wickchester, Suite 300 Houston, Texas 77043 Fax: (832) 456-4050 17 + +Source: RANGE RESOURCES - LOUISIANA, INC., 8-K, 4/17/2015 + + + + + +ACCOUNTING MATTERS: + +PennTex North Louisiana Operating, LLC Attn: Vice President, Accounting 11931 Wickchester, Suite 300 Houston, Texas 77043 Fax: (832) 456-4050 + +Shipper NOTICES AND CORRESPONDENCE: + +MRD Operating LLC c/o Memorial Resource Development Corp. 500 Dallas Street, Suite 1800 Houston, TX 77002 Attn: General Counsel E-mail: kroane@memorialrd.com + +with a copy to: + +Attn: Director, Marketing & Midstream E-mail: Jeremy.bolander@memorialrd.com + +Such notices, statements, payments, claims or other communications shall be deemed received as follows: (i) if delivered personally, upon delivery; (ii) if sent by United States mail, whether by express mail, registered mail, certified mail or regular mail, the day receipt is refused or is confirmed orally or in writing by the receiving Party; (iii) if sent by a courier service, upon delivery; or (iv) if sent by facsimile, upon completion of the transmission thereof, except that if such transmission is on any Day other than a Business Day, or on or after 4:00 p.m., Central Clock Time, such notice shall be deemed to be received on the next Business Day. + +18.2 Change of Address. Notices of change of address of either of the Parties shall be given in writing to the other Party in the manner aforesaid and shall be observed in the giving of all future notices, statements, payments, claims or other communications required or permitted to be given hereunder. 18 + +Source: RANGE RESOURCES - LOUISIANA, INC., 8-K, 4/17/2015 + + + + + +ARTICLE XIX MISCELLANEOUS + +19.1 Entire Agreement; Amendments. This Agreement and the Exhibits and Schedules hereto constitute the entire agreement and understanding between the Parties with respect to the subject matter hereof and thereof, supersede all prior agreements and understandings with respect thereto, and may be amended, restated or supplemented only by written agreement of the Parties. Notwithstanding the foregoing, the Tariff is subject to amendment by Carrier from time to time subject to Applicable Law and Section 15.1 hereof. + +19.2 Governing Law. This Agreement shall be governed and construed in accordance with the laws of the state of Texas without giving effect to the conflict of law rules thereof. + +19.3 No Drafting Presumption. No presumption will operate in favor of or against any Party as a result of any responsibility that any Party may have had for drafting this Agreement. Shipper and Carrier acknowledge and mutually agree that this Agreement and all contents herein were jointly prepared by the Parties. + +19.4 Waiver. No waiver of any term, provision or condition of this Agreement shall be effective unless in writing signed by the Parties, and no such waiver shall be deemed to be or construed as a further or continuing waiver of any such term, provision or condition or as a waiver of any other term, provision or condition of the Agreement, unless specifically so stated in such written waiver. + +19.5 No Third Party Beneficiaries. Except for Persons indemnified hereunder, this Agreement is not for the benefit of any third party and nothing herein, expressed or implied, confers any right or remedy upon any Person not a party hereto. + +19.6 No Partnership. It is not the intention of the Parties to create, nor is there created hereby, a partnership, trust, joint venture or association. The status of each Party hereunder is solely that of an independent contractor. + +19.7 Survival. Notwithstanding the termination of this Agreement for any reason, (a) ARTICLE VI, ARTICLE VIII, ARTICLE IX, ARTICLE X, ARTICLE XII, ARTICLE XIV, ARTICLE XVII, ARTICLE XVIII and ARTICLE XIX shall survive the termination of this Agreement, and (b) each Party to this Agreement will be liable for all of its accrued obligations hereunder up to and including the date on which the termination becomes effective. + +19.8 Headings. The headings and captions in this Agreement have been inserted for convenience of reference only and shall not define or limit any of the terms and provisions hereof. + +19.9 Rules of Construction. In construing this Agreement, the following principles shall be followed: + +(a) examples shall not be construed to limit, expressly or by implication, the matter they illustrate; 19 + +Source: RANGE RESOURCES - LOUISIANA, INC., 8-K, 4/17/2015 + + + + + +(b) the word "includes" and its syntactical variants mean "includes, but is not limited to" and corresponding syntactical variant expressions; + +(c) the plural shall be deemed to include the singular and vice versa, as applicable; + +(d) all references in this Agreement to an "ARTICLE," "Section," "subsection," or "Exhibit" shall be to an ARTICLE, Section, subsection, or Exhibit of this Agreement, unless the context requires otherwise; + +(e) unless the context otherwise requires, the words "this Agreement," "hereof," "hereunder," "herein," "hereby," or words of similar import shall refer to this Agreement as a whole and not to a particular ARTICLE, Section, subsection, clause or other subdivision hereof; and + +(f) each Exhibit and Schedule to this Agreement is attached hereto and incorporated herein as a part of this Agreement, but if there is any conflict or inconsistency between the main body of this Agreement and any Exhibit or Schedule, the provisions of the main body of this Agreement shall prevail, except as to any conflicts with the Tariff. + +19.10 Severability. If any provision of this Agreement shall be held to be invalid, illegal or unenforceable, (i) the validity, legality and/or enforceability of the remaining provisions shall not, in any way, be affected or impaired thereby and (ii) in lieu of such invalid, illegal or unenforceable provision, there shall be automatically added to this Agreement a provision as similar to such invalid, illegal or unenforceable provision as may be possible and be legal, valid and enforceable. + +19.11 Further Assurances. Each Party shall take such acts and execute and deliver such documents as may be reasonably required to effectuate the purposes of this Agreement. + +19.12 No Inducements. No director, employee, or agent of any Party shall give or receive any commission, fee, rebate, gift, or entertainment of significant cost or value in connection with this Agreement. + +19.13 Counterpart Execution. This Agreement may be executed in any number of counterparts, each of which shall be considered an original, and all of which shall be considered one and the same instrument. Neither Party shall be bound until both Parties have executed a counterpart. Facsimile or other electronic copies of signatures shall constitute original signatures for all purposes of this Agreement and any enforcement hereof. + +19.14 Confidentiality. + +(a) Each Party agrees that it shall maintain all terms and conditions of this Agreement in confidence, and that it shall not cause or permit disclosure thereof without the express written 20 + +Source: RANGE RESOURCES - LOUISIANA, INC., 8-K, 4/17/2015 + + + + + +consent of the other Party. The standard of care to be employed by each Party with respect to the other Party's confidential information shall be the standard of care employed by a reasonable person in protecting confidential information. + +(b) Permitted Disclosures. Notwithstanding Section 19.14(a) of this Agreement, disclosures of any terms and provisions of this Agreement otherwise prohibited may be made by a Party (i) to the extent necessary for such Party to enforce its rights hereunder against the other Party; (ii) to the extent to which a Party is required to disclose all or part of this Agreement by a statute or by the order or rule of a court, agency, or other governmental body exercising jurisdiction over the subject matter hereof, by order, by regulations, or by other compulsory process (including, but not limited to, deposition, subpoena, interrogatory, or request for production of documents); (iii) to the extent required by the applicable regulations of a securities or commodities exchange; (iv) to a third Person in connection with a proposed sale or other transfer of a Party's interest in this Agreement, provided such third Person agrees in writing to be bound by confidentiality terms no less restrictive than those set forth in this Section 19.14; (v) to its own directors, officers, employees, agents and representatives; (vi) to an Affiliate; (vii) to a co-working interest owner or royalty owner of Shipper Product delivered hereunder, provided such co-working interest owner or royalty owner agrees in writing to be bound by the terms of this Section 19.14; (viii) to the extent any such terms or provisions become public information through no fault of any Party; or (ix) to a bank or other financial institution, and their agents and representatives, in connection with a Party arranging for funding. + +(c) Notification. If a Party is or becomes aware of a fact, obligation, or circumstance that has resulted or may result in a disclosure of any of the terms and conditions of this Agreement authorized by Section 19.14(b) (ii), (iii) or (iv) above, it shall so notify in writing the other Party promptly and shall provide documentation or an explanation of such disclosure as soon as it is available. + +(d) Party Responsibility. Each Party shall be deemed solely responsible and liable for the actions of its directors, officers, employees, agents, representatives and Affiliates for maintaining the confidentiality commitments of this Section 19.14. + +(e) Public Announcements. The Parties agree that prior to making any public announcement or statement with respect to this Agreement or the transaction represented herein, the Party desiring to make such public announcement or statement shall provide the other Party with a copy of the proposed announcement or statement prior to the intended release date of such announcement. The other Party shall thereafter consult with the Party desiring to make the release, and the Parties shall exercise their reasonable best efforts to (i) agree upon the text of a joint public announcement or statement to be made by both such Parties or (ii) in the case of a statement to be made solely by one Party, obtain approval of the other Party to the text of a public announcement or statement. Nothing contained in this Section 19.14 shall be construed to require any Party to obtain approval of any other Party to disclose information with respect to this Agreement or the transaction represented herein to any Governmental Authority to the extent required by applicable law or necessary to comply with disclosure requirements of the Securities and Exchange Commission, New York Stock Exchange, NASDAQ Stock Market, or any other regulated stock exchange. 21 + +Source: RANGE RESOURCES - LOUISIANA, INC., 8-K, 4/17/2015 + + + + + +[Signature page follows] 22 + +Source: RANGE RESOURCES - LOUISIANA, INC., 8-K, 4/17/2015 + + + + + +IN WITNESS WHEREOF, the Parties have executed this Agreement to be effective as of the Effective Date. CARRIER: + +PennTex North Louisiana Operating, LLC + +By: /s/ Robert O. Bond + +Name: Robert O. Bond + +Title: Chief Operating Officer + +SHIPPER: + +MRD Operating LLC + +By: Memorial Resource Development Corp., its sole member + +By: /s/ Kyle Roane + +Name: Kyle N. Roane + +Title: Senior Vice President Signature page to the Transportation Services Agreement (MRD Operating LLC) + +Source: RANGE RESOURCES - LOUISIANA, INC., 8-K, 4/17/2015 + + + + + +EXHIBIT A + +TARIFF + +(See Attached) + +Source: RANGE RESOURCES - LOUISIANA, INC., 8-K, 4/17/2015 + + + + + +FERC ICA OIL TARIFF F.E.R.C. No. 1.0.0 + +[PennTex North Louisiana Operating, LLC] + +LOCAL TARIFF + +CONTAINING RATES, RULES, AND REGULATIONS GOVERNING THE TRANSPORTATION OF NATURAL GAS LIQUIDS BY PIPELINE + +The provisions published herein will, if effective, not result in an effect on the quality of human environment. + +Filed in compliance with 18 C.F.R. § 342.2(a) (Establishing initial rates). + +Request for Special Permission + +Issued on [ ( )] day's notice under authority of 18 C.F.R. § 341.14. This tariff publication is subject to refund pending a 30-day review period.] ISSUE DATE: [ ], 2015 EFFECTIVE DATE: [ ], 2015 Issued and Compiled by: [Contact name] [PennTex North Louisiana LLC] 11931 Wickchester Lane, Suite 300 Houston, TX 77043 [phone] [facsimile] + +Source: RANGE RESOURCES - LOUISIANA, INC., 8-K, 4/17/2015 + + + + + +FERC ICA OIL TARIFF F.E.R.C. No. 1.0.0 TABLE OF CONTENTS SECTION I TABLE OF RATES 3 + +SECTION II RULES AND REGULATIONS 4 + +1. DEFINITIONS 4 2. COMMODITY 5 3. PRODUCT SPECIFICATIONS 5 4. IDENTITY OF PRODUCTS 7 5. NOMINATIONS AND SCHEDULING 7 6. NOMINATIONS IN EXCESS OF CAPACITY 8 7. MINIMUM TENDER 9 8. MEASUREMENT AND EVIDENCE OF RECEIPTS AND DELIVERIES 9 9. ORIGINATION FACILITIES 10 10. STORAGE OF PRODUCTS IN TRANSIT 10 11. DESTINATION FACILITIES 10 12. NOTICE OF ARRIVAL, DELIVERY AT DESTINATION 10 13. TITLE 11 14. RATES APPLICABLE 11 15. RATES APPLICABLE FROM INTERMEDIATE POINTS 11 16. PAYMENT OF TRANSPORTATION CHARGES 11 17. LIABILITY OF CARRIER 14 18. CLAIMS, SUITS, AND TIME FOR FILING 14 19. CONNECTION POLICY 14 20. COMMON STREAM - CONNECTING CARRIERS 14 21. DEDICATED RATES 15 22. INCENTIVE RATES 15 2 + +Source: RANGE RESOURCES - LOUISIANA, INC., 8-K, 4/17/2015 + + + + + +FERC ICA OIL TARIFF F.E.R.C. No. 1.0.0 SECTION I TABLE OF RATES + +Uncommitted Rates + +From [Note 1] To [Note 2] + +Uncommitted Rate in Dollars per Barrel of 42 U.S. Gallons Lincoln Parish, Louisiana + + + +Interconnection near Ada, Bienville Parish, Louisiana $ 1.85 + +Dedicated Rates [Note 3] + +From [Note 1] To [Note 2] + +Dedicated Rate in Dollars per Barrel of 42 U.S. Gallons Lincoln Parish, Louisiana + + + +Interconnection near Ada, Bienville Parish, Louisiana $ 1.68 + +Incentive Rates [Note 4] + +From [Note 1] To [Note 2] + +Monthly Volume in Barrels Per Day + +Incentive Rate in Dollars per Barrel of 42 U.S. Gallons Lincoln Parish, Louisiana + + + +Interconnection near Ada, Bienville Parish, Louisiana 0 - 2,500 2,501 or greater $ $ 1.68 1.47 + +Note 1: The receipt points are the PennTex processing plants in Lincoln Parish, Louisiana. + +Note 2: The delivery point is the interconnection with Black Lake Pipeline Company near Ada, Bienville Parish, Louisiana. + +Note 3: Dedicated Rates are applicable to a Dedicated Shipper as provided for in Item 21 of this Tariff. + +Note 4: Incentive Rates are applicable to an Incentive Shipper as provided for in Item 22 of this Tariff. 3 + +Source: RANGE RESOURCES - LOUISIANA, INC., 8-K, 4/17/2015 + + + + + +FERC ICA OIL TARIFF F.E.R.C. No. 1.0.0 SECTION II RULES AND REGULATIONS 1. DEFINITIONS: + +"Barrel" means a barrel of forty-two (42) gallons, United States measurement at sixty (60) degrees Fahrenheit and zero (0) pounds per square inch gauge pressure. + +"Business Day" means Monday through Friday of each week, excluding banking holidays. + +"Carrier" means [PennTex North Louisiana Operating, LLC], a Delaware limited liability company. + +"Committed Volume" means the volume of Product that an Incentive Shipper has committed to be transported on the System, or make a deficiency payment in connection therewith, for a number of years as mutually agreed upon in the Incentive Shipper's TSA. + +"Common Stream(s)" means Product moved through the System that is commingled or intermixed with other Product in the System. + +"Consignee" means the party to whom a Shipper has ordered the delivery of Product. + +"Dedicated Product" means Product that a Dedicated Shipper has dedicated to be transported on the System but as to which Shipper has no obligation to make a deficiency payment, as mutually agreed upon in the Dedicated Shipper's TSA. + +"Dedicated Rates" means the rates set out in Section I of this Tariff paid by a Dedicated Shipper pursuant to a TSA that has Dedicated Product. + +"Dedicated Shipper" has the meaning set out in Item No. 21 of this Tariff. + +"Delivery Point" means points on the System where Product is delivered to Shipper or its Consignee, as such points are specified by Carrier from time to time in this Tariff. + +"Incentive Rates" means the rates set out in Section I of this Tariff paid by an Incentive Shipper pursuant to a TSA that has a Committed Volume. + +"Incentive Shipper" has the meaning set out in Item No. 21 of this Tariff. + +"Nomination" or "Nominate" means a written offer (in form and context specified by Carrier) made by a Shipper or its designee to Carrier of a stated quantity of Product for transportation from a specified Receipt Point to a specified Delivery Point in accordance with this Tariff. + +"Product(s)" means a demethanized mixture of natural gas liquids comprised primarily of ethane, propane, iso-butane, normal butane, iso- pentane, normal pentane, hexanes and heavier hydrocarbons, incidental volumes of methane, as well as other non-hydrocarbon compounds. + +"Receipt Point" means points where Product is received into the System, as such points are specified by Carrier from time to time in this Tariff. + +"Shipper" means the party that contracts with Carrier for transportation of Products on the System in accordance with this Tariff. 4 + +Source: RANGE RESOURCES - LOUISIANA, INC., 8-K, 4/17/2015 + + + + + +FERC ICA OIL TARIFF F.E.R.C. No. 1.0.0 "System" means Carrier's pipeline system and all related facilities necessary for Carrier to provide transportation service from the Receipt Points to the Delivery Points. + +"Tariff" means Carrier's F.E.R.C. Tariff No. 1.0.0 or subsequent reissues thereof. + +"Tender" or "Tendered" means an offer of delivery by a Shipper to Carrier of a stated quantity of Products for transportation from a specified Receipt Point to a specified Delivery Point in accordance with this Tariff. + +"TSA" means a Transportation Services Agreement executed by Carrier and a Shipper for transportation on the System. + +"Uncommitted Rate" means the rate set out in Section I of this Tariff paid by a Shipper that is not an Incentive Shipper or a Dedicated Shipper. + + 2. COMMODITY: + +Carrier is engaged in the transportation of Product as defined herein and therefore will not accept any other commodity for transportation under this Tariff. + + 3. PRODUCT SPECIFICATIONS: + +Subject to any provisions to the contrary in a TSA between Carrier and Shipper: + + A. Shipper shall not Tender Product for transportation on the System unless the Product will be readily susceptible to transportation through the System, such Product will not adversely damage the Common Stream or the System, and such Product otherwise conforms to the specifications set forth in this Item No. 3. + + B. As a prerequisite to transportation on the System, Shipper's Product must also conform to the quality specifications of the connectingcarrier or facility at the Nominated Delivery Point. + + + +C. Shipper shall perform applicable tests to ensure that the Product it Tenders to Carrier for delivery on the System conforms to the specifications set forth in this Item No. 3. Should spot samples, analyses, or any other test (including tests performed by Carrier) indicate that the Product Tendered or to be Tendered does not meet the specifications required by Carrier, Shipper agrees to stop delivery of such off-specification Product to Carrier until such time as it is determined by additional testing that the Product meets the definition of Product issued by Carrier. 5 + +Source: RANGE RESOURCES - LOUISIANA, INC., 8-K, 4/17/2015 + + + + + +FERC ICA OIL TARIFF F.E.R.C. No. 1.0.0 + + D. The specifications set forth in this Item No. 3 shall apply to each Barrel of Shipper's Tender and shall not be limited to the compositesample of the Tender. PRODUCT SPECIFICATIONS MAXIMUM TEST METHOD + +1. Composition: Predominantly Ethane, Propane, Butanes & Natural Gasoline ASTM D-2163 (C5 Plus) Methane 1.5% of Ethane1 ASTM D-2163 Total Olefins None ASTM D-2163 Total Fluorides None UOP 619 + +2. Vapor Pressure: At 100°F. PSIG 600 ASTM D-1267 + +3. Corrosiveness: Copper Strip at 100°F 1-b ASTM D-1838 + +4. Total Sulfur: PPM by Weight in Liquid 150 ASTM D-3246 + +5. Carbon Dioxide: PPM by Weight 1000 GPA 2177 + +6. Distillation: End Point, °F 375 ASTM D-216 + +7. Dryness: Free Water None Visual + +8. Color: Saybolt Number Plus 25 (Minimum) ASTM D-156 + + + +E. Carrier reserves the right to reject all Tenders or any part thereof and refuse transportation for such Tender, if Carrier determines, in its discretion, reasonably exercised, that Shipper has delivered Product that (i) does not conform to the quality specifications set forth in this Item No. 3, (ii) is not merchantable, (iii) is not readily acceptable for transportation through the System, (iv) would otherwise adversely affect the System or other Products on the System, and/or (v) would, in Carrier's sole judgment, expose employees of Carrier or the System to an undue risk of harm or property damage. + + F. In the event Shipper delivers Product to the System that does not meet, individually and collectively, the quality specifications set forth in this Item No. 3, Carrier may exclude such Shipper from further entry into applicable segments of the System until such time as the Shipper returns the quality of its Product to a level satisfactory to Carrier. 1 Methane in excess of limits stated herein, as measured on each Shipper's individual plant stream, shall be considered as contaminant and product so contaminated will not be received by Carrier. However, it is recognized that product so contaminated may be received by Carrier without Carrier's knowledge. During any period in which Shipper's product exceeds the specification, at Carrier's option, Carrier shall have the right to deduct the methane content in excess of the specification from Shipper's desired volume, but Shipper will nevertheless be required to pay the tariff rate on total volume of methane shipped. 6 + +Source: RANGE RESOURCES - LOUISIANA, INC., 8-K, 4/17/2015 + + + + + +FERC ICA OIL TARIFF F.E.R.C. No. 1.0.0 + + + +G. Carrier is not responsible for monitoring receipts or deliveries for contaminants. Further, Carrier reserves the right to dispose of any contaminated Product on the System. Disposal thereof may be made in any reasonable manner including but not limited to commercial sales. Any liability associated with the contamination or disposal of any Products shall be borne by Shipper introducing the contaminated Products into the System. Shipper liability includes, but is not limited to, claims from other Shippers, carriers, or users of the contaminated Products and the costs of any regulatory or judicial proceeding. + + + +H. If Product received by Carrier does not meet the quality specifications set forth in this Item No. 3, Carrier reserves the right to charge the Shipper the greater of (i) the actual costs and expenses incurred by Carrier to treat, handle, or otherwise dispose of all such contaminated Product, or (ii) a one-hundred (100) cents per Barrel charge for the volume of contaminated Product transported by Shipper ("Off-Spec Penalty"). If a composite sample, spot sample, or the results of any other test demonstrates that a Shipper's Product delivered to Carrier fails to meet the quality specifications set forth in this Item No. 3, the total penalty will be assessed by multiplying the Off-Spec Penalty by the total volume of Shipper's Product (in barrels) received by Carrier during the ticket period when Carrier received the contaminated Product. + + 4. IDENTITY OF PRODUCTS: + +Subject to any provisions to the contrary in a TSA between Carrier and Shipper: + + A. Carrier shall not be liable to Shipper for changes in gravity or quality of Shipper's Products that may occur from commingling or intermixing Shipper's Products with other Products in the same Common Stream while in transit. Carrier is not obligated to deliver to Shipper the identical Product nominated by Shipper; Carrier will deliver the Product it is regularly transporting as a Common Stream. + + B. Carrier shall have no responsibility in, or for, any revaluation or settlements that may be deemed appropriate by Shippers and/or Consignees because of mixing or commingling of Products between the receipt and delivery of such shipments by Carrier within the same Common Stream. + + C. Carrier shall not be required to transport Product except with reasonable diligence, considering the quality of the Product, the distanceof transportation and other material elements. Carrier cannot commit to delivering Product to a particular destination, at a particular time. + + 5. NOMINATIONS AND SCHEDULING: + + + +A. Product for shipment through the System will be received only on a properly executed Nomination from Shipper or its designee showing the Receipt Point at which the Product is to be received, the Delivery Point of the shipment, Consignee (if any), and the amount of Product to be transported. Carrier may refuse to accept Product for transportation unless satisfactory evidence is furnished that Shipper or Consignee has made provision for prompt receipt thereof at the Delivery Point. Carrier shall not be obligated to accept Product for transportation during any calendar month, unless Shipper or its designee makes such Nomination to Carrier in writing on or before 9:00 a.m., prevailing Central Time of the tenth (10t h) Business Day immediately preceding the first day of the month during which the transportation under the Nomination is to begin. 7 + +Source: RANGE RESOURCES - LOUISIANA, INC., 8-K, 4/17/2015 + + + + + +FERC ICA OIL TARIFF F.E.R.C. No. 1.0.0 + + B. Carrier may refuse to accept Product for transportation where Shipper or Consignee is not in compliance with other provisions of this Tariff or where Shipper or Consignee has failed to comply with all applicable laws, rules and regulations made by any governmental authorities regulating shipments of Products. + + C. Unless Shipper and Carrier have agreed otherwise in a TSA, Carrier reserves the right to control in its discretion the component distribution in the Product tendered by Shipper or its designee, in order to achieve maximum operating efficiency of Carrier's facilities and optimum utilization of total transportation capacity. Carrier shall use reasonable judgment in exercising that discretion. + + + +D. The rate at which Product is delivered to Carrier and redelivered from Carrier will be determined by Carrier's transportation and redelivery obligations to its shippers and by the necessity of economical use and efficient operation of Carrier's facilities, which shall be determined by Carrier in the exercise of its reasonable judgment. Carrier will assume no liability for its inability to maintain schedules or comply with Shipper's redelivery requests when caused by operational or scheduling problems, excess demand, delays and other problems encountered in pipeline operations. + + 6. NOMINATIONS IN EXCESS OF CAPACITY: + +When there is offered to Carrier quantities of Product greater than can be transported on the System, Carrier shall allocate the available transportation capacity on the System ("Available Capacity"). Allocation will be given as a daily or monthly volume, at Carrier's discretion, and will be calculated for the calendar month. + +New Shippers will have access to a minimum of ten percent (10%) of the Available Capacity and Historical Shippers will have access to a maximum of ninety percent (90%) of the Available Capacity. + +Carrier shall allocate up to ninety percent (90%) of the Available Capacity on a non-discriminatory historical basis to all Historical Shippers. Each individual Historical Shipper's entitlement will be based on (i) the average monthly volumes of the Historical Shipper's Representative Period, based on the greater of the volumes transported or paid for during each month of the Representative Period or (ii) for an Incentive Shipper, based on the Incentive Shipper's Committed Volume on a yearly basis. + +The remaining ten percent (10%) of the Available Capacity shall be allocated on a prorata basis to New Shippers. Carrier is not required to allocate more than two percent (2%) of the Available Capacity to any individual New Shipper. + +The Carrier will repeat this allocation process until all of the Available Capacity has been allocated. + +Allocation will not be transferred. With agreement of the Shippers concerned, historical volume will be transferred under the following conditions: + + • No commercial transaction occurs between the participating shippers with regard to historical volumes. + + • The transfer is irrevocable. + + • The request to transfer must be the result of an unusual situation as may be reasonably determined by Carrier. 8 + +Source: RANGE RESOURCES - LOUISIANA, INC., 8-K, 4/17/2015 + + + + + +FERC ICA OIL TARIFF F.E.R.C. No. 1.0.0 For the purposes of this Item No. 6: + + • "New Shipper" means a Shipper that is not a Historical Shipper. + + • "Historical Shipper" means a Shipper that has shipped, or paid for the shipment of, Product on the System during theRepresentative Period. + + • "Representative Period" means a consecutive twelve (12) month period, beginning thirteen (13) months prior to the month beingallocated and excluding the month preceding the month of allocation. + + 7. MINIMUM TENDER: + +Products of the required specifications shall be Tendered for transportation in quantities of not less than 2,500 Barrels of the same specification, except that Carrier may, in its sole discretion, accept any quantity of Product if such quantity can be consolidated with other Product such that Carrier can make a single delivery of not less than 2,500 Barrels. The term "single delivery" as used herein means a delivery of Product in one continuous operation to one or more Consignees into a single facility, furnished by such Consignee or Consignees, to which Carrier is connected. + + 8. MEASUREMENT AND EVIDENCE OF RECEIPTS AND DELIVERIES: + + + +A. Carrier or its representative will measure and test all Product Tendered for transportation prior to its receipt and may measure and test such Product at any time thereafter. Shipper or Consignee may be present or represented at the gauging and testing. Quantities shall be determined in accordance with applicable A.P.I. Manual of Petroleum Measurement Standards and applicable Gas Processors Association procedures. + + + +B. Any overage or shortage not due to the negligence of Carrier, including losses resulting from shrinkage, evaporation, other physical Product loss and interface mixture in any calendar month, will be allocated on a monthly accrual basis among Shippers in the proportion that the total number of Barrels delivered from the entire System for each Shipper bears to the total number of Barrels delivered from the entire System for all Shippers. + + + +C. Carrier may require Shipper to furnish a certificate setting forth in detail the specification of each shipment of Product offered for transportation hereunder, and Shipper shall be liable for any contamination or damage to other Product in Carrier's custody or to the System or other Carrier facilities caused by failure of the Product Tendered to meet the specifications stated in Shipper's certification. Carrier may, but shall not be required to, sample and/or test any shipment prior to acceptance or during receipt of shipment, and, in the event of variance between the specifications contained in said certificate and the specifications indicated by Carrier's test, Carrier's test result shall prevail and be used to determine whether the shipment meets Carrier's specifications. Shipper or Consignee may be present or represented at such measuring and testing. + + D. A representative of Carrier shall have the right to enter upon the premises where Shipper's Product is received or delivered and have access to any and all storage receptacles or meters for the purposes of measuring and testing and to make any examination, inspection, measurement or test required. + + E. All measurements and tests performed by Carrier shall be deemed final and determinative unless Shipper presents appropriatedocumentation to contest such measurements and/or tests within forty-five (45) days of receipt. 9 + +Source: RANGE RESOURCES - LOUISIANA, INC., 8-K, 4/17/2015 + + + + + +FERC ICA OIL TARIFF F.E.R.C. No. 1.0.0 9. ORIGINATION FACILITIES: + +With respect to the Receipt Point, and any additional Receipt Points (if Carrier determines that it will offer connections beyond those contemplated in this Tariff): (1) Products will be received only from pipelines or plant facilities that are provided by Shipper or Shipper's designee, or a connecting carrier; (2) Carrier will determine and advise Shippers of the size and capacity of pipelines and tanks to be provided at the Receipt Point to meet the operating conditions of Carrier's facilities at such point; (3) Carrier will not accept Products for transportation unless such facilities have been provided and conform to the operating requirements of Carrier in Carrier's sole discretion; and (4) The cost of such facilities shall be provided at the sole cost of Shipper seeking access to the System. + + 10. STORAGE OF PRODUCTS IN TRANSIT: + +Carrier is under no obligation to provide storage. + + 11. DESTINATION FACILITIES: + +Carrier will accept Products for transportation only when Shipper or Consignee has provided the necessary facilities for taking delivery of the shipment as it arrives at the Delivery Point. Carrier will not accept Product for transportation unless such facilities have been provided and conform to the operating requirements of Carrier in Carrier's sole discretion. Unless otherwise agreed in a TSA between Carrier and Shipper, the cost of such facilities shall be provided at the sole cost of Shipper seeking access to the System. + + 12. NOTICE OF ARRIVAL, DELIVERY AT DESTINATION: + +After a shipment has had time to arrive at destination, Carrier may begin delivery of such shipment from its common stock to Shipper or Consignee at Carrier's current rate of pumping. Shipper shall timely remove Product, or cause Product to be removed, from the System following transportation to a Nominated Delivery Point. If Shipper or Consignee is unable or refuses to receive said shipment, a demurrage charge of one dollar ($1.00) per Barrel per twenty-four (24) hours shall accrue from the time said notice expires on that part of such shipment which is not received by Shipper or Consignee. In addition to such demurrage charge, Carrier shall have the right to make such disposition of unremoved Product as is necessary for the efficient operation of the System, and Shipper shall pay Carrier all charges associated with such disposition the same as if Shipper had authorized such, together with any associated additional costs and damages borne or incurred by Carrier. Shipper shall indemnify Carrier for all losses associated with unremoved Product and Carrier's disposition of unremoved Product. Carrier shall have no liability to Shipper associated with Shipper's unremoved Product or Carrier's disposition of unremoved Product. + + 13. TITLE: + +Carrier may require of Shipper satisfactory evidence of its perfected and unencumbered title of any Product Tendered for shipment on the System. Carrier shall have the right to reject any Product, when Tendered for transportation, that may be involved in litigation, the title of which may be in dispute, or which may be encumbered by a lien or charge of any kind (other than the lien created hereunder in favor of Carrier and any liens permitted under a TSA between Carrier and Shipper). + +At the time of Nomination, Shipper shall inform Carrier if any Product Nominated and/or to be Tendered to Carrier for transportation (i) may be involved in litigation, (ii) may be subject to a title dispute, or (iii) may be encumbered by a lien or charge of any kind (other than the lien created hereunder in favor of Carrier and any liens permitted under a TSA between 10 + +Source: RANGE RESOURCES - LOUISIANA, INC., 8-K, 4/17/2015 + + + + + +FERC ICA OIL TARIFF F.E.R.C. No. 1.0.0 Carrier and Shipper) ("Encumbered Product"). In the event Carrier receives such Shipper notice of Encumbered Product or otherwise learns that Shipper has or will Nominate or Tender Encumbered Product, Carrier may require Shipper to provide a satisfactory indemnity bond, pre- payment of transportation charges, or a subordination agreement from the applicable lienholder, all to be determined in Carrier's sole discretion. Shipper agrees to hold Carrier harmless for any and all loss, cost, liability, damage and/or expense resulting from failure of title thereto; provided that acceptance for transportation shall not be deemed a representation by Carrier as to title. + + 14. RATES APPLICABLE: + +Product accepted for transportation shall be subject to the rates in effect on the date of receipt by Carrier, irrespective of the date of the Nomination. + + 15. RATES APPLICABLE FROM INTERMEDIATE POINTS: + +For shipments accepted for transportation from any point not named in this Tariff making reference hereto which is intermediate to a point from which rates are published in said tariffs, through such unnamed point, the rate published therein from the next more distant Receipt Point specified in the tariff will apply from such unnamed point. For shipments accepted for transportation to any point not named in tariffs making reference hereto which is intermediate to a point to which rates are published in said tariffs, through such unnamed point, the rate published therein to the next more distant Delivery Point specified in the tariff will apply. Continuous use of intermediate point rate application for more than thirty (30) days requires establishment of a rate for the transportation service. + + 16. PAYMENT OF TRANSPORTATION CHARGES: + +Subject to any provisions to the contrary in a TSA between Carrier and Shipper: + + A. Shipper or Consignee shall pay, as provided below, all applicable transportation and other charges (including any deficiency paymentsset out in a TSA) accruing on Products handled by Carrier. + + B. All payments are due on the later of: (1) within fifteen (15) days of receipt of the invoice; (2) the twenty-seventh (27th) of the month following receipt of the invoice, or; (3) if the twenty-seventh (27th) of the month following receipt of the invoice is not a Business Day, on the next Business Day thereafter. + + + +C. Unless provided otherwise in a TSA between Carrier and Shipper, if any charge remains unpaid after the due date, then such amount due may bear interest from the day after the due date until paid, calculated at an annual rate equivalent to the greater of (1) one percent (1%) or (2) the maximum rate allowed by law. In addition, Shipper shall pay all documented costs incurred by Carrier to collect any unpaid amounts, including reasonable attorney fees and costs incurred by Carrier. + + + +D. In the event Shipper fails to pay any such charges when due, Carrier shall not be obligated to provide Shipper access to the System or provide services pursuant to this Tariff until such time as payment is received by Carrier and Shipper meets the requirements of the following paragraph. In addition, in the event Shipper fails to pay any such charges when due, Carrier shall have the right to set off such amounts owed and future amounts owed against any amounts Carrier owes Shipper. 11 + +Source: RANGE RESOURCES - LOUISIANA, INC., 8-K, 4/17/2015 + + + + + +FERC ICA OIL TARIFF F.E.R.C. No. 1.0.0 + + + +E. All prospective shippers shall, twenty-five (25) days prior to making their first Nomination, provide information to Carrier that will allow Carrier to determine the prospective shipper's capacity to perform any financial obligations that could arise from the transportation of that prospective shipper's Product under the terms of this Tariff, including the payment of transportation charges, equalization obligations, the value of any loss allowance, and any negative balance positions. At any time, upon the request of Carrier, Shipper shall, within ten (10) days of such request, provide information to Carrier that will allow Carrier to determine Shipper's capacity to perform any financial obligations that could arise from the transportation of that Shipper's Product under the terms of this Tariff, including the payment of transportation charges, equalization obligations, the value of any loss allowance, and any negative Shipper balance positions. Carrier shall not be obligated to accept Product for transportation from any Shipper or prospective shipper if such Shipper or prospective shipper fails to provide the requested information to Carrier within the time periods set forth herein, or if Carrier's review of the requested information reveals that such Shipper or prospective shipper does not have the capacity to perform any financial obligations that could arise from the transportation of its Product under the terms of this Tariff, including the payment of transportation charges, equalization obligations, the reasonably determined value of any loss allowance, and any negative balance positions. + + F. Subject to the provisions of Item No. 16(G), Carrier upon notice to Shipper or prospective shipper, may require one or more of the following financial assurances for the payment of all charges and costs as provided for in this Tariff, or otherwise lawfully due to Carrier to be provided at the expense of such Shipper or prospective shipper: + + + +i. payment security by wire transfer in an amount equal to two and a half months of transportation charges based on Shipper's or prospective shipper's likely actual shipments for the production month for each applicable line segment. For purposes of this rule, a prospective shipper's likely actual shipments will be based on the anticipated shipments listed in such prospective shipper's shipper application; or + + ii. a letter of credit in favor of Carrier in an amount sufficient to ensure payment of all costs and charges that could reasonablyaccrue due to Carrier in a form and from an institution acceptable to Carrier; or + + iii. a guaranty from a guarantor acceptable to Carrier. + + + +G. In the event that Carrier reasonably determines that: (i) any Shipper's financial condition is or has become impaired or unsatisfactory; (ii) any financial assurances previously provided by Shipper no longer provide adequate security for the performance of such Shipper's obligations that could arise from the transportation of its Product under the terms of this Tariff; or (iii) Carrier otherwise determines that it is necessary to obtain financial assurances from any Shipper or prospective shipper, then such Shipper or prospective shipper shall provide financial assurances for the payment of the charges and costs as provided for in this Tariff or otherwise lawfully due to Carrier relating to the transportation of such Shipper's or prospective shipper's Product by Carrier. For the purpose of this Tariff, and without limiting the generality of the charges and costs lawfully due to Carrier relating to the transportation of Shipper's Product, those charges and costs shall include transportation charges, equalization obligations, any negative Shipper balance positions, and any loss allowance. 12 + +Source: RANGE RESOURCES - LOUISIANA, INC., 8-K, 4/17/2015 + + + + + +FERC ICA OIL TARIFF F.E.R.C. No. 1.0.0 + + + +H. Any financial assurances received by Carrier in accordance with Item No. 16(F)(i) shall be retained by Carrier in a non-interest-bearing escrow account until such time as Carrier determines that the Shipper or prospective shipper that provided such Financial Assurance is capable of performing its financial obligations to Carrier. Within ten (10) business days of such a determination by Carrier, the Financial Assurance provided in accordance with Item No. 16(F)(i) shall be returned to such Shipper or prospective shipper. + + + +I. Carrier shall have a self-executing lien on all Products delivered to Carrier to secure the payment of any and all charges that are owed to Carrier. Such lien shall survive delivery of Products to Shipper. Such lien shall extend to all Products in Carrier's possession beginning with Shipper's first receipt of transportation or other services from Carrier. The lien provided herein shall be in addition to any lien or security interest provided by this Tariff, statute or applicable law. Carrier may withhold delivery to Shipper of any of Shipper's Products in its possession and exercise any other rights and remedies granted under the applicable tariffs or existing under applicable law until all such charges have been paid as provided above. + + + +J. If Shipper fails to pay an invoice by the due date, Carrier will notify Shipper of the failure, and if Shipper has not remedied the failure within thirty (30) days following receipt of notice from Carrier, in addition to any other remedies under this Tariff or under applicable law, Carrier shall have the right, either directly or through an agent, to sell any Products of such Shipper in Carrier's custody at public auction, on any day not a legal holiday, not less than forty-eight (48) hours after publication of notice of such sale in a daily newspaper of general circulation published in the town, city, or general area where the sale is to be held, stating the time and place of sale and the quantity and location of the Products to be sold. At said sale, Carrier shall have the right to bid, and, if it is the highest bidder, to become the purchaser. The proceeds of any sale shall be applied in the following order: (1) To the reasonable expenses of holding, preparing for sale, selling, and to the extent allowed by law, reasonable attorney's fees and legal expenses incurred by Carrier; and (2) To the satisfaction of Shipper's indebtedness including interest herein provided from the date payment is due. The balance of the proceeds of the sale remaining, if any, shall be paid to Shipper or, if there is a dispute or claim as to entitlement, held for whoever may be lawfully entitled thereto. Carrier will have a claim for and against Shipper with respect to any deficiency arising from the debt due to Carrier from Shipper and the proceeds of any sale after reduction as set forth above. + + 17. LIABILITY OF CARRIER: + +Carrier shall not be liable for, and Shipper hereby waives any claims against Carrier for, any loss or damage to Products prior to the delivery of Products at the Receipt Point(s) and after delivery of Products at the Delivery Point(s). + + 18. CLAIMS, SUITS, AND TIME FOR FILING: + +As a condition precedent to recovery by Shipper for loss, damage, or delay in receipt or delivery of Shipper's Products for which Carrier may be responsible, Shipper's claim must be filed in writing with Carrier within nine (9) months after delivery of the affected Products, or, in case of Carrier's failure to make delivery of Shipper's Products, then within nine (9) months after a reasonable time for delivery has elapsed; and suits shall be instituted against Carrier only within two (2) years and one (1) day from the day when notice in writing is given by Carrier to Shipper that Carrier has disallowed the claim or any part or parts thereof specified in the notice. Where claims are not filed or suits are not instituted by Shipper on such claims in accordance with the foregoing provisions, such claims will not be paid and Carrier will not be liable. 13 + +Source: RANGE RESOURCES - LOUISIANA, INC., 8-K, 4/17/2015 + + + + + +FERC ICA OIL TARIFF F.E.R.C. No. 1.0.0 19. CONNECTION POLICY: + +If Carrier determines that it will offer connection service, this Item No. 19 shall apply. In that event, (1) Carrier will only consider connections to the System that are made by formal written application to Carrier, in accordance with Carrier's connection policy; (2) All connections will be subject to design requirements necessary to protect the safety, security, integrity and efficient operation of the System in accordance with generally accepted industry standards; and (3) Acceptance of any request for connection will be within the sole discretion of Carrier and will be subject to compliance with governmental regulations. + + 20. COMMON STREAM - CONNECTING CARRIERS: + + + +A. When receipts from and/or deliveries to a connecting carrier of substantially the same grade of Product are scheduled at the same interconnection or at interconnections along the same pipeline system, Carrier reserves the right, with cooperation of the connecting carrier, to offset like volumes of such Common Stream Product in order to avoid capacity constraints or the unnecessary use of energy which would be required to physically pump the offsetting volumes. When this right is exercised, Carrier will make the further deliveries for Shipper involved from its Common Stream Product. + + B. Sediment, water and quality limitations of a connecting carrier may be imposed upon Carrier. When such limitations of the connectingcarrier vary from that of Carrier, the limitations of the connecting carrier will be enforced. + + 21. DEDICATED RATES + +A shipper who has executed a TSA that has Dedicated Product shall be referred to herein as a "Dedicated Shipper." As provided in its TSA, a Dedicated Shipper shall be entitled to the applicable Dedicated Rate set out in Section I of this Tariff. A Shipper that is not an Incentive Shipper or Dedicated Shipper shall pay the applicable Uncommitted Rate set out in Section I of this Tariff. + + 22. INCENTIVE RATES + +A shipper who has executed a TSA that has a Committed Volume shall be referred to herein as an "Incentive Shipper." As provided in its TSA, an Incentive Shipper shall be entitled to the applicable Incentive Rate set out in Section I of this Tariff. A Shipper that is not an Incentive Shipper or Dedicated Shipper shall pay the applicable Uncommitted Rate set out in Section I of this Tariff. 14 + +Source: RANGE RESOURCES - LOUISIANA, INC., 8-K, 4/17/2015 + + + + + +EXHIBIT B + +COMMENCEMENT DATE FACILITIES + +Pipeline Facilities + + • 27 miles of 10" pipeline between the Lincoln Parish Plant and the Delivery Point + +Delivery Point + + • DCP Black Lake Pipeline + +Receipt Point + + • Lincoln Parish Plant (owned by Carrier or its Affiliate) + + • Mount Olive Plant (owned by Carrier or its Affiliate) + +Miscellaneous Appurtenant Facilities (launchers/receivers, etc.) + +Source: RANGE RESOURCES - LOUISIANA, INC., 8-K, 4/17/2015 + + + + + +SCHEDULE A + +RECEIPT POINTS, DELIVERY POINT, AND RATES + +Receipt Points Delivery Point Dedicated Rate Lincoln Parish Plant Mount Olive Plant DCP Black Lake Ada, LA $ 1.68 + +Source: RANGE RESOURCES - LOUISIANA, INC., 8-K, 4/17/2015 \ No newline at end of file diff --git a/full_contract_txt/RareElementResourcesLtd_20171019_SC 13D_EX-99.4_10897534_EX-99.4_Intellectual Property Agreement.txt b/full_contract_txt/RareElementResourcesLtd_20171019_SC 13D_EX-99.4_10897534_EX-99.4_Intellectual Property Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..3df1fe16f4205f8e69cb827f5045acc971cd8834 --- /dev/null +++ b/full_contract_txt/RareElementResourcesLtd_20171019_SC 13D_EX-99.4_10897534_EX-99.4_Intellectual Property Agreement.txt @@ -0,0 +1,187 @@ +Exhibit 4 + +Rare Element Resources Ltd. EXECUTION COPY IP Rights Agreement + +INTELLECTUAL PROPERTY RIGHTS AGREEMENT Synchron, a California corporation having a principal place of business at 3550 General Atomics Court, San Diego, CA 92121-1122 (or one or more Affiliates, the "Investor"), and Rare Element Resources Ltd., a British Columbia Corporation having a principal place of business at P.O. Box 271049, Littleton, Colorado 80127 (the "Company") (Investor and Company each a "Party" and together the "Parties"), agree as follows: I. Background of Agreement 1.00 Company is the owner of certain Patents and related Technical Information relating to rare earth mineral processing and rare earth separation. 1.01 Investor wishes to acquire certain rights under the Patents and related Technical Information in accordance with the terms of this IP Agreement. 1.02 Company and Investor are concurrently entering into an Investment Agreement ("Investment Agreement") whereby Investor is making a monetary investment in Company. 1.03 Company is issuing the Option pursuant to which Investor will be entitled to purchase common shares of Company. II. Definitions As used herein, the following terms have the meaning set forth below: 2.01 Any term set out in this IP Agreement with its initial letters capitalized, shall have the same meaning as it has in the Investment Agreement, unless a different meaning is explicitly assigned to the term in this IP Agreement. 2.02 "Affiliate" has the meaning set forth in the Investment Agreement. 2.03 "Business Day" has the meaning set forth in the Investment Agreement. 2.04 "Company" has the meaning set out above in the introductory paragraph. 2.05 "Company Improvements" has the meaning set out below in Article 5.00. + +Page 1 of 15 + +Source: RARE ELEMENT RESOURCES LTD, SC 13D, 10/19/2017 + + + + + +Rare Element Resources Ltd. EXECUTION COPY IP Rights Agreement 2.06 "Dispute" has the meaning set out below in Article 18.00. 2.07 "Dispute Notice" has the meaning set out below in Article 18.00. 2.08 "Effective Date" has the meaning of the "Closing Date" set forth in the Investment Agreement. 2.09 "Escalation to Mediation Date" has the meaning set out below in Article 18.01. 2.10 "Improvement" or "Improvements" means any modification of a process or other technology described in a Patent, and any modification to Technical Information. 2.11 "Investment Agreement" has the meaning set out above in Article 1.02. 2.12 "Investor" has the meaning set out above in the introductory paragraph. 2.13 "Investor Improvements" has the meaning set out below in Article 5.01. 2.14 "IP Agreement" means this agreement, including all Exhibits referenced herein and attached hereto. 2.15 "Joint Improvements" has the meaning set out below in Article 5.02. 2.16 "Option" has the meaning set forth in the Investment Agreement. 2.17 "Option Period" has the meaning set forth in the Investment Agreement. 2.18 "Patent" or "Patents" means: (a) any and all patents and patent applications owned by Company anywhere in the world as of the Effective Date relating to rare earth mineral processing and rare earth separation including without limitation those patents and patent applications listed in Exhibit A; (b) any and all divisions, continuations, continuations-in-part of any of the patents and patent applications within subdivision (a); (c) any and all patents that may directly or indirectly issue from any patent applications within subdivisions (a) and (b); (d) any and all re- issues, substitutes and extensions of any of the patents within subdivisions (a), (b) and (c); and (e) any and all counterparts or equivalents to any of the foregoing in any country of the world. 2.19 "Party" and "Parties" have the meanings set out above in the introductory paragraph. + +Page 2 of 15 + +Source: RARE ELEMENT RESOURCES LTD, SC 13D, 10/19/2017 + + + + + +Rare Element Resources Ltd. EXECUTION COPY IP Rights Agreement 2.20 "Person" has the meaning set forth in the Investment Agreement. 2.21 "Technical Information" means research and development information that is published or unpublished, unpatented inventions, know-how, trade secrets, and technical data in the possession of Company at the Effective Date of this IP Agreement or developed by Company during the term of this IP Agreement that relate to rare earth mineral processing and rare earth separation. 2.22 "Third Party" means a Person other than Investor, the Company or one of their Affiliates. III. License 3.00 Company grants to Investor, for the duration of the Option Period, a worldwide, royalty-free, non-exclusive, irrevocable license (with the right to grant sublicenses to Affiliates) under the Patents to practice the methods therein described and claimed and to make and have made, use, offer to sell, sell and import products made using such methods, and to make Improvements, and to engage in any activity which would give rise to a claim of infringement (direct or indirect or otherwise) of one or more of the Patents in the absence of a license. 3.01 Company further grants to Investor, during the duration of the Option Period, a worldwide, royalty-free, non-exclusive, irrevocable license (with the right to grant sublicenses to Affiliates) to use the Technical Information to practice the methods described and claimed in the Patents and to make and have made, use, offer to sell, sell and import products made using the methods, and to make Improvements, and to engage in any activity which would give rise to a claim of infringement (direct or indirect or otherwise) of one or more of the Patents in the absence of a license. 3.02 If the Option is not exercised prior to the expiration of the Option Period, then Company agrees to extend the license grants set forth in Articles 3.00 and 3.01 beyond the expiration of the Option Period, subject to an annual licensing fee paid by Investor to Company. The non- exclusive rights granted to Investor under this Article 3.02 do not include the right to grant sublicenses to Third Parties. The amount and parameters of the annual licensing fee shall be commercially reasonable, as determined by an independent expert who is mutually agreeable to the Parties and whose determination shall be final and binding; provided, however, that if the Parties cannot agree on the independent expert, each Party shall designate an expert of their choice and the two experts designated by the Parties shall work together in good faith to identify and designate a third, independent expert whose determination shall be binding. + +Page 3 of 15 + +Source: RARE ELEMENT RESOURCES LTD, SC 13D, 10/19/2017 + + + + + +Rare Element Resources Ltd. EXECUTION COPY IP Rights Agreement 3.03 If the Option is exercised before the expiration of the Option Period, the license grants set forth in Articles 3.00 and 3.01 will become exclusive to Investor for a perpetual term, shall not be subject to a licensing fee, the granted licenses in favor of the Investor shall be deemed fully paid-up, and the rights granted to Investor under Articles 3.00 and 3.01 shall include the right to grant sublicenses to Third Parties. 3.04 Prior to the earlier of Investor exercising the Option and the expiration of the Option Period, Company will not grant to any Third Party any rights to the Patents or to the Technical Information that extend beyond the expiration of the Option Period. 3.05 The licenses granted in Articles 3.01 to 3.04 of this IP Agreement are subject to a reserved non-exclusive license in the Company to practice the methods described and claimed in the Patents and to make, have made, use, offer to sell, sell and import rare earth products made using such methods, and to use the Technical Information to practice the methods described and claimed in the Patents for such purposes. Such reserved non-exclusive license shall be solely for use by the Company and its Affiliates and shall not be transferable to any Third Party, except in connection with a merger, consolidation, or the sale or transfer of substantially all of the Company's assets associated with the performance of this IP Agreement. 3.06 Investor will not disclose to Third Parties any unpublished Technical Information furnished by Company to Investor during the term of this IP Agreement, or any time thereafter; provided, however, that disclosure may be made of any such Technical Information at any time (i) with the prior written consent of Company, (ii) to Affiliates of Investor, (iii) to Third Parties, in confidence, if and when the Option is exercised before the expiration of the Option Period, (iv) after such Technical Information has become public through no fault of Investor, (v) if such Technical Information is received from a third person who had a right to disclose it, (vi) if Investor can show such Technical Information was independently developed without access to any such Technical Information, or (vii) if Investor can demonstrate such Technical Information was in its rightful possession free of any obligation of confidentiality prior to its first receipt from Company. + +Page 4 of 15 + +Source: RARE ELEMENT RESOURCES LTD, SC 13D, 10/19/2017 + + + + + +Rare Element Resources Ltd. EXECUTION COPY IP Rights Agreement 3.07 The licenses and other rights of Investor set forth in this IP Agreement are an encumbrance on (and thus run with) the Patents and Technical Information, and shall be enforceable against any entity having or obtaining ownership of, or the right to enforce, any of the Patents and Technical Information or any rights therein. Company shall obligate any Person to whom Company assigns or otherwise confers an ownership interest or right to enforce any of the Patents and Technical Information or any rights therein to: (a) fully honor in all respects all of the rights and licenses granted to Investor under this IP Agreement; and (b) obligate all subsequent assignees or other Persons who obtain an ownership interest or right to enforce any of the Patents and Technical Information or any rights therein to (i) similarly fully honor all of the foregoing in all respects, and (ii) expressly flow down all of the foregoing (including, without limitation, this flow down obligation) in all subsequent assignments or other agreements that confer an ownership interest or right to enforce any of the Patents and Technical Information or any rights therein. Any assignment or agreement or other transaction by Company that fails to be in complete compliance with this Article 3.07 or any other provision of this IP Agreement shall be null and void. 3.08 Company does not warrant the accuracy of Technical Information provided to Investor hereunder. Subject to and except for any indemnification obligations under Article 3.09 below, Company will not be under any liability arising out of the supplying of Technical Information under, in connection with, or as a result of this IP Agreement, whether on warranty, contract, negligence or otherwise. 3.09 Company represents that to the best of its knowledge, the methods described and claimed in the Patents and the Technical Information, and the products produced thereby in accordance with such information, will be free from claims of infringement of the patents and copyrights of any Third Party. Company further represents that it has not received any written notice of a claim and otherwise has no knowledge that the methods described and claimed in the Patents and the Technical Information, and the products produced thereby in accordance with such information, violate or infringe upon the rights of any Person. Company shall indemnify and hold harmless Investor, Investors' Affiliates, and their officers and directors, and their direct and indirect customers, to the fullest extent permitted by applicable law, from and against any and all losses, liabilities, obligations, claims, contingencies, damages, diminution in value, deficiencies, actions, proceedings, taxes, costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable attorneys' fees and costs of investigation as incurred, arising out of or relating to any breach of any of the representations made in this Article 3.09. + +Page 5 of 15 + +Source: RARE ELEMENT RESOURCES LTD, SC 13D, 10/19/2017 + + + + + +Rare Element Resources Ltd. EXECUTION COPY IP Rights Agreement 3.10 Company represents and warrants that the definitions of Patents and Technical Information cover and include all patents, patent applications, patent rights, research and development information, inventions, know-how, trade secrets, and technical data used by the Company in its business at the Effective Date of this IP Agreement that relate to rare earth mineral processing and rare earth separation. IV. Prosecution of the Patents 4.00 Company will have the sole right to file, prosecute, and maintain all Patents covering the inventions that are the property of Company and will have the right to determine whether or not, and where, to file a patent application, to abandon the prosecution of any patent or patent application, or to discontinue the maintenance of any patent or patent application. Notwithstanding the foregoing, if Company elects to abandon any patent application, to not pay maintenance fees or annuities to keep a patent in force, or to otherwise take or fail to take any action that will result in a loss of patent rights, Company shall give Investor at least sixty (60) days prior written notice and an opportunity to take over the prosecution of the patent application that would be abandoned and/or pay the fees necessary to keep the patent in force and/or take any other action necessary to avoid the loss of patent rights. In the event that Investor takes over the prosecution of a patent application or maintenance of a patent under this Article 4.00, Company shall retain ownership of the patent application or patent, and the patent shall remain subject to this IP Agreement. + +Page 6 of 15 + +Source: RARE ELEMENT RESOURCES LTD, SC 13D, 10/19/2017 + + + + + +Rare Element Resources Ltd. EXECUTION COPY IP Rights Agreement V. Improvements 5.00 Improvements made or acquired solely by the Company ("Company Improvements") during the term of this IP Agreement shall be deemed Technical Information hereunder and shall be subject to the license provisions set forth in Article III for Technical Information. Any patent applications and any patents relating to any Company Improvements shall be deemed Patents hereunder and shall be subject to the license provisions set forth in Article III for Patents. 5.01 Investor shall own all right, title and interest in any Improvement made or acquired by the Investor ("Investor Improvement"). Investor hereby agrees to grant to Company a non-exclusive, irrevocable, royalty-free license under any Investor Improvement and any patent claiming such Investor Improvement, solely for use in rare earth mineral processing and rare earth separation, to make and have made, use, offer to sell, sell and import products made using the Investor Improvements. Such rights to Investor Improvements shall be solely for use by the Company and its Affiliates and shall not be transferable to any Third Party, except in connection with a merger, consolidation, or the sale or transfer of substantially all of Company's assets associated with performance under this IP Agreement. 5.02 Investor shall own all right, title and interest in any Improvement made jointly by Company and Investor ("Joint Improvements") during the term of this IP Agreement, and Company agrees to and hereby does assign to Investor any right, title and interest it may otherwise have in any Joint Improvement. 5.03 Investor hereby agrees to grant to Company a non-exclusive, irrevocable, royalty-free license under any Joint Improvement and any patent claiming such Joint Improvement solely for use in rare earth mineral processing and rare earth separation. Such rights to Joint Improvements shall be solely for use by the Company and shall not be transferable to any Third Party except in connection with a merger, consolidation, or the sale or transfer of substantially all of Company's assets associated with performance under this IP Agreement. + +Page 7 of 15 + +Source: RARE ELEMENT RESOURCES LTD, SC 13D, 10/19/2017 + + + + + +Rare Element Resources Ltd. EXECUTION COPY IP Rights Agreement 5.04. For the avoidance of doubt, all right, title and interest in intellectual property, whether or not patented, that is made or acquired by one Party or its Affiliate after the Effective Date of this IP Agreement, that is wholly unrelated to the Patents and Technical Information, shall be owned by said Party or its Affiliate. VI. Representations and Disclaimer of Warranties 6.00 SUBJECT TO AND EXCEPT FOR ANY INDEMNIFICATION OBLIGATIONS UNDER ARTICLE 3.09 ABOVE, NOTHING IN THIS IP AGREEMENT WILL BE DEEMED TO BE A REPRESENTATION OR WARRANTY BY COMPANY OF THE ACCURACY, SAFETY OR USEFULNESS FOR ANY PURPOSE OF ANY TECHNICAL INFORMATION, TECHNIQUES, OR PRACTICES AT ANY TIME MADE AVAILABLE BY COMPANY. COMPANY WILL HAVE NO LIABILITY WHATSOEVER TO INVESTOR OR ANY OTHER PERSON FOR OR ON ACCOUNT OF ANY INJURY, LOSS OR DAMAGE OF ANY KIND OR NATURE, SUSTAINED BY, OR ANY DAMAGES ASSESSED OR ASSERTED AGAINST, OR ANY OTHER LIABILITY INCURRED BY OR IMPOSED ON INVESTOR OR ANY OTHER PERSON, ARISING OUT OF OR IN CONNECTION WITH OR RESULTING FROM: (A) THE PRODUCTION, USE OR SALE OF ANY APPARATUS OR PRODUCT OR METHOD, OR THE PRACTICE OF THE PATENTS BY INVESTOR OR ITS ASSIGNS; (B) THE USE BY INVESTOR OR ITS ASSIGNS OF ANY TECHNICAL INFORMATION, TECHNIQUES, OR PRACTICES DISCLOSED BY COMPANY; OR (C) ANY ADVERTISING OR OTHER PROMOTIONAL ACTIVITIES BY INVESTOR OR ITS ASSIGNS WITH RESPECT TO ANY OF THE FOREGOING, AND INVESTOR WILL HOLD COMPANY, AND ITS OFFICERS, EMPLOYEES AND AGENTS, HARMLESS IN THE EVENT COMPANY, OR ITS OFFICERS, EMPLOYEES OR AGENTS, IS HELD LIABLE. + +Page 8 of 15 + +Source: RARE ELEMENT RESOURCES LTD, SC 13D, 10/19/2017 + + + + + +Rare Element Resources Ltd. EXECUTION COPY IP Rights Agreement 6.01 NOTHING IN THIS IP AGREEMENT WILL BE DEEMED TO BE A REPRESENTATION OR WARRANTY BY INVESTOR OF THE ACCURACY, SAFETY OR USEFULNESS FOR ANY PURPOSE OF ANY IMPROVEMENTS AT ANY TIME MADE AVAILABLE BY INVESTOR. INVESTOR WILL HAVE NO LIABILITY WHATSOEVER TO COMPANY OR ANY OTHER PERSON FOR OR ON ACCOUNT OF ANY INJURY, LOSS OR DAMAGE OF ANY KIND OR NATURE, SUSTAINED BY, OR ANY DAMAGES ASSESSED OR ASSERTED AGAINST, OR ANY OTHER LIABILITY INCURRED BY OR IMPOSED ON COMPANY OR ANY OTHER PERSON, ARISING OUT OF OR IN CONNECTION WITH OR RESULTING FROM: (A) THE PRODUCTION, USE OR SALE OF ANY APPARATUS OR PRODUCT OR METHOD, OR THE PRACTICE OF ANY IMPROVEMENTS AT ANY TIME BY THE COMPANY, ITS AFFILIATES OR ASSIGNS; (B) THE USE OF ANY IMPROVEMENTS AT ANY TIME MADE AVAILABLE BY INVESTOR BY THE COMPANY, ITS AFFILIATES OR ASSIGNS; OR (C) ANY ADVERTISING OR OTHER PROMOTIONAL ACTIVITIES BY COMPANY ITS AFFILIATES OR ASSIGNS WITH RESPECT TO ANY OF THE FOREGOING, AND COMPANY WILL HOLD INVESTOR, AND ITS OFFICERS, EMPLOYEES AND AGENTS, HARMLESS IN THE EVENT INVESTOR, OR ITS OFFICERS, EMPLOYEES OR AGENTS, IS HELD LIABLE. VII. Litigation 7.00 Investor will notify Company of any suspected infringement of the Patents. Subject to Article 7.01 below, the sole right to institute a suit for infringement of the Patents rests with Company. Investor agrees to reasonably cooperate with Company in such suit for infringement, including requesting Investor's employees or consultants to testify when requested by Company in writing, making available records, papers, information, specimens, and the like, provided and only to the extent such is reasonably necessary to prosecute the suit. For the avoidance of doubt, nothing in this Article 7.00 shall require Investor to join any such suit as a party, and Company shall not seek to join Investor to any such suit as a party absent the express written consent of Investor. Any recovery received pursuant to such suit will first go to Investor to reimburse Investor for any costs and expenses (including attorneys' fees) reasonably incurred by Investor in cooperating with Company in the suit, and any remaining amounts shall be retained by Company. + +Page 9 of 15 + +Source: RARE ELEMENT RESOURCES LTD, SC 13D, 10/19/2017 + + + + + +Rare Element Resources Ltd. EXECUTION COPY IP Rights Agreement 7.01 If, after the Option is exercised before the expiration of the Option Period such that the license grants set forth in Articles 3.00 and 3.01 have become exclusive under Article 3.03, Company does not enforce the Patents, through legal action or otherwise, Investor may enforce the Patents and Company agrees to reasonably cooperate with Investor in such suit for infringement, including requesting Company's employees or consultants to testify when requested by Investor in writing, making available records, papers, information, specimens, and the like, provided and only to the extent such is reasonably necessary to prosecute the suit. For the avoidance of doubt, nothing in this Article 7.01 shall require Company to join any such suit as a party, and Investor shall not seek to join Company to any such suit as a party absent the express written consent of Company; provided, however, if Company elects not to give its express written consent to be joined as a party, but joinder is required in order for Investor to file or maintain legal action to enforce any Patents, Company agrees that if requested by Investor, Company will negotiate and enter into an amendment to this IP Agreement to the extent necessary for Investor to file or maintain legal action to enforce the Patents. Any recovery received pursuant to such suit will first go to Company to reimburse Company for any costs and expenses (including attorneys' fees) reasonably incurred by Company in cooperating with Investor in the suit, and any remaining amounts shall be retained by Investor. VIII. Non-assignability 8.00 This IP Agreement imposes personal obligations on Investor. Investor will not assign to any Third Party any rights under this IP Agreement not specifically transferable by its terms without the prior written consent of Company, such consent not to be unreasonably withheld. For the avoidance of doubt and notwithstanding the foregoing: (1) such rights are assignable by Investor to an Affiliate of Investor, and (2) Investor's rights in Investor Improvements and Joint Improvements shall be freely assignable by Investor to any Person. + +Page 10 of 15 + +Source: RARE ELEMENT RESOURCES LTD, SC 13D, 10/19/2017 + + + + + +Rare Element Resources Ltd. EXECUTION COPY IP Rights Agreement IX.Severability 9.00 The Parties agree that if any part, term or provision of this IP Agreement is found illegal or in conflict with any valid controlling law, the validity of the remaining provisions will not be affected thereby. 9.01 Should any provision of this IP Agreement be held by a court of law to be illegal, invalid or unenforceable, such provision shall be replaced by such provision as most closely reflects the intent of the invalid provision, and the legality, validity and enforceability of the remaining provisions of this Agreement will not be affected or impaired thereby. X. Waiver, Integration, Alteration 10.00 The waiver of a breach hereunder may be effected only by a writing signed by the waiving Party and will not constitute a waiver of any other breach. 10.01 This IP Agreement, together with the Investment Agreement and any other documents or agreements executed in connection with the transactions contemplated thereunder, represents the entire understanding between the Parties, and supersedes all other agreements, express or implied, between the Parties concerning the Patents and Technical Information. XI. Execution 11.00 This IP Agreement may be executed in counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each Party and delivered to each other Party, it being understood that the Parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a ".pdf" format data file, such signature shall create a valid and binding obligation of the Party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or ".pdf" signature page were an original thereof. + +Page 11 of 15 + +Source: RARE ELEMENT RESOURCES LTD, SC 13D, 10/19/2017 + + + + + +Rare Element Resources Ltd. EXECUTION COPY IP Rights Agreement XII. Cooperation 12.00 Each Party will execute any instruments reasonably believed by the other Party to be necessary to implement the provisions of this IP Agreement. XIII. Construction 13.00 This IP Agreement will be construed in accordance with the substantive laws of the state of New York and of the United States of America. XIV. Exportation of Technical Information 14.00 Investor agrees that it will not export the Technical Information furnished to Investor either directly or indirectly by Company, to any destination or Person prohibited by the U.S. Export Administration Regulations or other U.S. export control laws and regulations. 14.01 Company agrees that it will not export any information relating to Improvements or otherwise furnished to Investor either directly or indirectly by Investor Company, to any destination or Person prohibited by the U.S. Export Administration Regulations or other U.S. export control laws and regulations. XV. Notices Under this IP Agreement 15.00 All written communications and notices between the Parties relating to this IP Agreement shall be made in the manner set forth in the Investment Agreement. XVI. Term and Termination 16.00 Unless earlier terminated in accordance with the terms of this Article XVI, this IP Agreement and the licenses granted herein will continue in effect from the Effective Date until the expiration of the last to expire of the Patents and any additional period of time thereafter that any of the Patents remain enforceable such as in the United States where a party can sue for infringement after a patent expires and seek damages for any infringement of the patent during the six years immediately preceding the filing of a suit for infringement. + +Page 12 of 15 + +Source: RARE ELEMENT RESOURCES LTD, SC 13D, 10/19/2017 + + + + + +Rare Element Resources Ltd. EXECUTION COPY IP Rights Agreement 16.01 Investor at any time may provide written notice to Company of a material breach of this IP Agreement. If Company fails to cure the identified breach within thirty (30) days after the date of the notice, Investor may terminate this IP Agreement by written notice to Company. 16.02 If the Option is not exercised before the expiration of the Option Period, Company may provide written notice to Investor of a material breach of this IP Agreement. If Investor fails to cure the identified breach within thirty (30) days after the date of the notice, Company may terminate this IP Agreement by written notice to Investor. If the Option is exercised before the expiration of the Option Period, Company may not terminate this IP Agreement for material breach. 16.03 The following provisions of this IP Agreement shall survive termination of this IP Agreement: Article I, Article II, Articles 3.08 and 3.09, Article V (as to Improvements made or acquired during the term of the IP Agreement), Article VI, and Articles VIII-XVIII. In addition, for as long as there continues to exist Technical Information of use by Investor in its business, any rights or licenses Investor has in Technical Information under this Agreement shall survive termination of this IP Agreement under Article 16.00 but not termination under Articles 16.01 or 16.02 for material breach. XVII. Bankruptcy 17.00 Each Party acknowledges that all rights, covenants and licenses granted by one Party to the other Party are, and shall otherwise be deemed to be, for purposes of Section 365(n) of the U.S. Bankruptcy Code, licenses of rights to "intellectual property" as defined under Section 101(35A) of the Bankruptcy Code. Each Party acknowledges this IP Agreement is an Executory Contract and that should any Party become a petitioner under the Bankruptcy Code, §365(n) applies to this IP Agreement and the rights afforded thereunder apply. Each Party further acknowledges that if such Party, as a debtor in possession or a trustee-in-bankruptcy in a case under the Bankruptcy Code, rejects this IP Agreement, the other Party may elect to retain their rights under this IP Agreement as provided in Section 365(n) of the Bankruptcy Code. Any change of control resulting from any such bankruptcy proceeding shall be subject to the rights and licenses granted in this IP Agreement. Each Party agrees that to the extent the Bankruptcy laws of Canada provide the same or similar rights to a licensee as Section 365(n) of the U.S. Bankruptcy Code, a Party may exercise such same or similar rights as specified herein as to the rights under the U.S. Bankruptcy Code. + +Page 13 of 15 + +Source: RARE ELEMENT RESOURCES LTD, SC 13D, 10/19/2017 + + + + + +Rare Element Resources Ltd. EXECUTION COPY IP Rights Agreement XVIII. Governing Law; Jurisdiction; Dispute Resolution 18.00 Exclusive Dispute Resolution Mechanism. The procedures set forth in this Article XVIII shall be the exclusive mechanism for resolving any dispute that may arise from time to time relating to this IP Agreement ("Dispute"). Either Party may commence the procedures contemplated by this Article XVIII by written notice to the other that a Dispute has arisen (a "Dispute Notice"). 18.01 Negotiations. The Parties shall first attempt in good faith to resolve any Dispute by negotiation and consultation between themselves, including without limitation not fewer than two (2) negotiation sessions which shall occur within ten (10) Business Days of the Dispute Notice. In the event that such dispute is not resolved on an informal basis by the conclusion of the second negotiation session, or, if either Party has not participated in negotiation sessions as to which notice has been given (the last day of such time period, the "Escalation to Mediation Date"), either Party may initiate mediation under Article 18.02. 18.02 Mediation. (a) Either Party may, at any time after the Escalation to Mediation Date, submit the Dispute for mediation. The Parties shall cooperate with one another in selecting a neutral mediator and in scheduling the mediation proceedings. Each Party covenants that they will use commercially reasonable efforts in participating in the mediation. Each Party shall prepare for the mediator a written request for mediation, setting forth the subject of the Dispute, the position and supporting documentation of such Party, and the relief requested. Each Party agrees that the mediator's fees and expenses and the costs incidental to the mediation will be shared equally between the Parties. + +Page 14 of 15 + +Source: RARE ELEMENT RESOURCES LTD, SC 13D, 10/19/2017 + + + + + +Rare Element Resources Ltd. EXECUTION COPY IP Rights Agreement (b) The Parties further agree that all offers, promises, conduct, and statements, whether oral or written, made in the course of the mediation by the Parties, their agents, employees, experts, and attorneys, and by the mediator, are confidential, privileged, and inadmissible for any purpose, including impeachment, in any litigation, arbitration or other proceeding involving the Parties, provided that evidence that is otherwise admissible or discoverable shall not be rendered inadmissible or non-discoverable as a result of its use in the mediation. 18.03 Litigation or Arbitration as a Final Resort. If the Parties cannot resolve any Dispute for any reason, including, but not limited to, the failure of the Parties to agree to enter into mediation or agree to any settlement proposed by the mediator, within sixty (60) days after the Escalation to Mediation Date, either the Company or the Holder may file suit in a court of competent jurisdiction in accordance with Article 18.04. 18.04 Governing Law; Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this IP Agreement shall be determined in accordance with the provisions of the Investment Agreement. IN WITNESS WHEREOF, the Parties have caused this IP Agreement to be executed by their duly authorized officers on the respective dates herein set forth. Rare Element Resources Ltd. By: /s/ Randall J. Scott Name: Randall J. Scott Title: President and Chief Executive Officer Date: October 2, 2017 Synchron By: /s/ Kenneth J. Mushinski Name: Kenneth J. Mushinski Title: President Date: October 2, 2017 + +Page 15 of 15 + +Source: RARE ELEMENT RESOURCES LTD, SC 13D, 10/19/2017 + + + + + +EXHIBIT A + +Title Country orAuthority Application No. Filing Date Publication No. Patent No. Status + +Extraction of Metals from Metallic Compounds PCT PCT/US2014/012153 01/18/2014 WO 2014/113742 N/A Expired + +Selective Extraction of Cerium from Other Metals US 14/735,118 6/9/2015 2016/0002751 -- Published + +Selective Extraction of Cerium from Other Metals PCT PCT/US2015/03498 6/9/2015 WO2015/191645 -- Expired + +Extraction of Metals from Metallic Compounds AU AU 2014207355 6/9/2015 Pending + +Extraction of Metals from Metallic Compounds CA CA 2,898,612 6/9/2015 Pending + +Extraction of Metals from Metallic Compounds EP EP 14740863.7 6/9/2015 Pending + +Extraction of Metals from Metallic Compounds RU RU 2015134576 6/9/2015 Pending + +Extraction of Metals from Metallic Compounds ZA ZA 2015/05821 6/9/2015 Pending + +Extraction of Metals from Metallic Compounds US 14/831,020 8/20/2015 2015/0354026 Published + +Processing of Rare Earth Elements PCT PCT/US2015/055403 10/13/2015 WO 2016/058007 N/A Expired + +Processing for the Extraction of Rare Earth Elements US 15/517,884 10/13/2015 -- -- Pending + +Processing for the Extraction of Rare Earth Elements CA CA 2,964,306 10/13/2015 -- -- Pending + +Processing for the Extraction of Rare Earth Elements AU AU 2015329723 10/13/2015 -- -- Pending + + 1 of 1 + +Source: RARE ELEMENT RESOURCES LTD, SC 13D, 10/19/2017 \ No newline at end of file diff --git a/full_contract_txt/ReedsInc_20191113_10-Q_EX-10.4_11888303_EX-10.4_Development Agreement.txt b/full_contract_txt/ReedsInc_20191113_10-Q_EX-10.4_11888303_EX-10.4_Development Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..1501dbf0c62cd9185680a78be7aff219e071613b --- /dev/null +++ b/full_contract_txt/ReedsInc_20191113_10-Q_EX-10.4_11888303_EX-10.4_Development Agreement.txt @@ -0,0 +1,81 @@ +RECIPE DEVELOPMENT AGREEMENT This Recipe Development Agreement (this "Agreement") is made between Reed's, Inc., a Delaware corporation ("Reed's") and B C Marketing Concepts Inc., dba Full Sail Brewing Company, an Oregon corporation ("Company"), effective as of October 11, 2019 (the "Effective Date"). RECITALS Company is engaged in the business of developing recipes for and manufacturing alcohol beverage products. Reed's is engaged in the business of developing recipes for ginger-based non- alcohol beverage products. Reed's desires to engage Company, and Company desires to be engaged, to participate and assist in the development of formulas for ginger-based flavored alcohol beverage products for Reed's (the "Products") as identified in Exhibit A. AGREEMENT The parties agree as follows: 1. Definitions. Unless otherwise defined in this Agreement, words with initial capitalized letters shall have the meanings assigned to such words in this Section 1: (a) "Applicable Laws and Regulations" shall mean any law, statute, rule, regulation, ordinance or other binding pronouncements of any duly authorized court, tribunal, arbitrator, agency, commission, official or other instrumentality of any federal, state, province, county, city or other political subdivision (domestic or foreign) having the effect of law in the United States, any foreign country or territory or any domestic or foreign state, province, county, city or other political subdivision applicable to the Company or its business. (b) "Company Intellectual Property" means all Intellectual Property that: (i) was owned or developed by Company prior to the execution of this Agreement; and (ii) is or was independently developed or acquired by Company without contribution or assistance from Reed's, Reed's Confidential Information, or Reed's Intellectual Property. Company Intellectual Property includes but is not limited to Company's know-how and independently developed recipes and alcohol beverage production processes, including the Company's proprietary composition of or recipe for the neutral alcohol beverage base that contributes alcohol to the Products ("Neutral Alcohol Beverage Base"). (c) "Deliverables" means (a) any Recipe, (b) documentation, samples, prototypes and other tangible embodiments of or descriptions of Recipes, and (c) any other Intellectual Property created with during the term of this Agreement and required to be disclosed to the Development Committee as contemplated by Section 1(b) hereof. (d) "Intellectual Property" means any and all domestic and international rights in and to: (i) trademarks, service marks, trade dress, logos, trade names and Internet domain names, together with all goodwill associated therewith; (ii) patents, patent disclosures, patentable subject matter, inventions, any improvements thereto and know-how; (iii) copyrights, copyrightable works, derivative works thereof and moral rights; (iv) trade secrets and confidential information; (v) other intellectual proprietary property (of every kind and nature and however designated), whether arising by operation of law, contract, license or otherwise; and (vi) all registrations, applications, renewals, extensions, continuations, continuations-in-part, divisions or reissues of the foregoing now or hereafter in force or hereafter acquired or adopted. + +Source: REED'S, INC., 10-Q, 11/13/2019 + + + + + +(e) "Recipe" means the ingredients and methods of combining and processing ingredients for the Products, provided that a Recipe will not include the composition of or recipe for the Neutral Alcohol Beverage Base (it being understood that the amount of Neutral Alcohol Beverage Base and the process for combining and processing it with other ingredients shall be included in the Recipe). (f) "Reed's Intellectual Property" means all Intellectual Property that: (i) was owned or developed by Reed's prior to the execution of this Agreement; (ii) was or is independently developed by Reed's without contribution or assistance from Company or Company's Intellectual Property; and (iii) the Recipe. (g) "Specifications" means the specifications for the Products to be developed by the Development Committee (as defined in Section 3). 2. Consideration. In exchange for Company's contributions and obligations under this Agreement, Reed's grants Company the exclusive right to manufacture, package, promote, sell and distribute the Products (if and to the extent approved by the Development Committee), subject to the terms and conditions of a separate Manufacturing and Distribution Agreement to be entered into by the parties concurrently with this Agreement, as it may be amended, modified, supplemented or restated from time to time (the "Manufacturing and Distribution Agreement"). Company shall be responsible for all costs relating to the development of the Recipes and Deliverables, except for costs and expenses relating to the involvement of Reed's personnel and contractors. 3. Development Committee. Representatives of Company and Reed's, as identified in Exhibit B, shall meet regularly to discuss and approve development milestones for the Products, the Recipes, Deliverables, Specifications and other topics as identified in Exhibit B (the "Development Committee"). The final Recipes, Deliverables and Specifications for the Products must be agreed to in writing by at least one member of the Development Committee from each of Reed's and Company. 4. Rights and Obligations. (a) The parties will collaborate to develop commercial production-ready Products according to the Specifications as may be developed by the Development Committee. Reed's shall have the right to visit the facilities used by Company to develop the Recipes and Deliverables, at such times as may be reasonably agreed to in advance by the parties. Company shall perform the work in connection with this Agreement in a timely, professional and workmanlike manner consistent with industry standards. Each party shall ensure that all persons performing work under this Agreement on its behalf shall have the requisite experience, training, skill and other qualifications needed to develop the Recipes, Deliverables and Specifications. Company shall keep the Development Committee informed of the progress of the development of the Recipes and Deliverables and such other matters as any member of the Development Committee may reasonably request from time to time. 2 + +Source: REED'S, INC., 10-Q, 11/13/2019 + + + + + +(b) Company shall promptly disclose to the Development Committee any prospective or actual new Intellectual Property related to the Products or Product-specific production processes, whether developed solely by Company or jointly by the Company and Reed's, except with regard to the Neutral Alcohol Beverage Base, and except with regard to the Company's general know-how and independently developed production processes not specifically related to the Products. 5. Representations and Warranties. (a) By Company. Company represents and warrants that (i) Company has obtained all authority, permits, licenses and approvals necessary to enter into and perform its obligations under this Agreement; (ii) the execution and delivery by Company of this Agreement and the performance of its obligations under this Agreement does not and will not violate the terms of any other contract, agreement, obligation or understanding of Company or any Applicable Laws and Regulations; (iii) the Deliverables will conform to the Specifications; and (iv) the Company's Intellectual Property does not infringe or violate the Intellectual Property of any third parties. (b) By Reed's. Reed's represents and warrants that (i) Reed's has obtained all authority and approvals necessary to enter into and perform its obligations under this Agreement; (ii) the execution and delivery by Company of this Agreement and the performance of its obligations under this Agreement does not and will not violate the terms of any other contract, agreement, obligation or understanding of Reed's or any law or regulation applicable to Reed's; and (iii) the Reed's Intellectual Property does not infringe or violate the Intellectual Property of any third parties. 6. Intellectual Property. (a) Ownership of Intellectual Property. (i) Company will create and provide to Reed's the Deliverables. Reed's will exclusively own all Deliverables. Company will and hereby does, without further consideration, irrevocably assign to Reed's any and all worldwide right, title or interest that Company may now or hereafter possess in or to the Deliverables in perpetuity (or the maximum period permitted by Applicable Laws and Regulations) and Reed's accepts such assignment. Company will execute and deliver documents reasonably requested by Reed's to register its Intellectual Property in the Deliverables. (ii) Company acknowledges that all rights of ownership of Reed's Intellectual Property, Deliverables and the goodwill symbolized thereby shall belong exclusively to and inure to the benefit of Reed's. Company shall not at any time acquire any rights, title or interest in Reed's Intellectual Property or Deliverables. Company agrees that it will not at any time contest the ownership or validity of any Reed's Intellectual Property or Deliverables, nor register or attempt to register any rights with respect to Reed's Intellectual Property, nor do anything that would jeopardize or diminish Reed's rights to or the value of Reed's Intellectual Property or Deliverables. (iii) Reed's acknowledges that all rights of ownership of Company's Intellectual Property and the goodwill symbolized thereby shall belong exclusively to and inure to the benefit of Company. Reed's shall not at any time acquire any rights, title or interest in Company's Intellectual Property. Reed's agrees that it will not at any time contest the ownership or validity of any Company Intellectual Property, nor register or attempt to register any rights with respect to Company Intellectual Property, nor do anything that would jeopardize or diminish Company's rights to or the value of Company Intellectual Property. 3 + +Source: REED'S, INC., 10-Q, 11/13/2019 + + + + + +(b) Work Product. Company acknowledges and agrees that all Intellectual Property created by Company, its affiliates, representatives, or agents in connection with or resulting from any work or services related to the Products, including the Deliverables ("Work Product"), but excluding the Neutral Alcohol Beverage Base and excluding the Company's general know-how and independently developed production processes not specifically related to the Products, have been specially ordered and commissioned by Reed's, are works-made-for-hire from the moment of creation and that all such Work Product is and will be the sole and exclusive property of Reed's. To the extent not a work-for- hire, Company, its employees, subcontractors and agents hereby sell, assign and transfer to Reed's all right, title and interest in and to the Work Product, including without limitation, all rights to Intellectual Property therein. Company agrees on behalf of itself, its employees, subcontractors and agents, not to file for or register any patents, trademarks, or copyrights in or to the Work Product. No rights of any kind in the Work Product are reserved to or by Company or will revert to Company. To the extent permitted by Applicable Laws and Regulations, Company forever waives and agrees never to assert any "moral rights" in any Work Product or any derivative of any Work Product. Company shall, without further compensation, execute and deliver such instruments and take such action as may be requested by Reed's to perfect, protect, enforce or evidence Reed's rights in the Work Product, Products and Deliverables and to carry out the assignments and waivers in this Section 6. (c) Use. Company shall not use the Work Product, Products or Deliverables during the term of this Agreement or after, in perpetuity, for any purpose whatsoever other than performing Company's obligations under this Agreement. The Deliverables shall be considered to be Confidential Information (as defined below) of Reed's. This Section 6 shall survive termination or expiration of this Agreement. 7. Confidentiality. Each of Reed's and Company (a "Receiving Party") shall hold in confidence and not make any commercial or other use of any or all Confidential Information conveyed, acquired or learned from the other party (the "Disclosing Party") at any time, except in association with this Agreement. Except as otherwise expressly permitted herein, Receiving Party shall not disclose such information to third persons without the prior written consent of the Disclosing Party. Receiving Party shall limit access to the Confidential Information to those of its directors, officers, employees, contractors, agents, attorneys and accountants (the "Representatives") with the need to know the same and shall advise such Representatives of, and hold them to, Receiving Party's obligations under the terms of this Section 7. Receiving Party and its Representatives shall be permitted to disclose Confidential Information as required by law, including to any judicial, regulatory, administrative or other governmental body (by interrogatories, investigative demands, requests for information or documents, subpoena, or other similar process), but must (to the extent legally permissible) promptly notify the disclosing party of the existence, terms and circumstances surrounding such requirement and give the disclosing party a reasonable opportunity to obtain a protective order or other appropriate remedy to resist or narrow such disclosure. "Confidential Information" means all information of Disclosing Party that is disclosed orally or in writing by Disclosing Party to Receiving Party that, at the time of disclosure, is designated as confidential (or like designation), is disclosed in circumstances of confidence, would be understood by the parties, exercising reasonable business judgment, to be confidential, or is not generally known to the public, whether of a business, technical, or other nature, and including, without limitation, designs, plans, drawings, know-how, recipes, and marketing and business plans. Upon the expiration or earlier termination of this Agreement, Receiving Party shall return to Disclosing Party all of Disclosing Party's Confidential Information or shall destroy the same at the option of Disclosing Party. The provisions of this Section 7 shall survive termination or expiration of this Agreement. The obligations in this Section 7 regarding trade secrets, in particular, will continue for so long as the information constitutes a trade secret under applicable law. If an unauthorized use or disclosure of a Disclosing Party's Confidential Information occurs, the Receiving Party shall promptly notify the Disclosing Party, and the Disclosing Party may take, at the Receiving Party's expense, all steps which are necessary to recover Confidential Information disclosed or used in breach of this Agreement and to prevent its subsequent unauthorized use or dissemination, including availing itself of actions for seizure and injunctive relief. 4 + +Source: REED'S, INC., 10-Q, 11/13/2019 + + + + + +8. Term; Termination. (a) Term. The term of this Agreement shall commence on the Effective Date and shall continue for the longer of the first anniversary of the Effective Date or the duration of the Manufacturing and Distribution Agreement (the "Term"). The Term may be extended by written agreement of the parties. (b) Early Termination. Either party may terminate this Agreement at any time if any of the following occur: (i) the other party fails to comply with any requirements or obligations under this Agreement, and such non-compliance is not cured within 30 days following written notice from the other party identifying the non-compliance; (ii) the other party becomes insolvent, reorganizes or liquidates; (iii) the other party makes any assignment for the benefit of Company's creditors; or (iv) a receiver is appointed for Company's property. Either party may terminate this Agreement upon written notice if the Manufacturing and Distribution Agreement terminates prior to the first anniversary of the Effective Date. 9. Indemnification. Each party will indemnify, defend and hold harmless the other party and its respective directors, officers, members, employees, licensees, agents and independent contractors, from and against any claim or action, liability, damages, and expense, including but not limited to attorney's fees, arising from or resulting from (i) the negligent act or omission of the party, its employees, agents or contractors, (ii) the party's breach of this Agreement, or (iii) the violation of any law by the party, its employees, agents, or contractors. Reed's will indemnify, defend and hold harmless Company and its directors, officers, members, employees, licensees, agents and independent contractors, from and against any claims for the breach of the intellectual property rights of a third party based on the Reed's Intellectual Property. Company will indemnify defend and hold harmless Reed's and its directors, officers, members, employees, licensees, agents and independent contractors, from and against any claims for the breach of the intellectual property rights of a third party based on the Company Intellectual Property, Deliverables and Work Product, except as such claims are solely based on or limited to the Reed's Intellectual Property. 10. Limitation of Liability. EXCEPT WITH RESPECT TO THE INDEMNIFICATION OBLIGATIONS SET FORTH IN SECTION 9 WITH REGARD TO CLAIMS BY THIRD PARTIES, IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR CONSEQUENTIAL, INDIRECT, INCIDENTAL, SPECIAL, EXEMPLARY, PUNITIVE OR ENHANCED DAMAGES, LOST PROFITS OR REVENUES OR DIMINUTION IN VALUE ARISING OUT OF, RELATING TO, OR IN CONNECTION WITH ANY BREACH OF THIS AGREEMENT OR CLAIM HEREUNDER, REGARDLESS OF (A) WHETHER SUCH DAMAGES WERE FORESEEABLE, (B) WHETHER OR NOT IT WAS ADVISED OF THE POSSIBLITY OF SUCH DAMAGES, AND (C) THE LEGAL OR EQUITABLE THEORY (CONTRACT, TORT OR OTHERWISE) UPON WHICH THE CLAIM IS BASED. 5 + +Source: REED'S, INC., 10-Q, 11/13/2019 + + + + + +11. Press Releases; Publicity. Reed's may issue or cause the publication of any press release or other public announcement with respect to this Agreement or the relationship of the parties, subject to Company's prior approval of any such press release or other public announcement which shall not be unreasonably withheld, conditioned or delayed, it being understood that such consent shall not be required in the case of any public announcement required by any law, regulation, regulatory body or the rules of any exchange to which Reed's is or may become subject. Company shall not publicly identify Reed's or use Reed's name in any manner in connection with this Agreement without Reed's prior written approval. 12. Independent Contractors. Company and Reed's agree that neither party has authority to bind the other party as its agent. Company and Reed's recognize and agree that Company is not an employee of Reed's and is furnishing services as an independent contractor. This Agreement does not constitute and shall not be construed as constituting a partnership or joint venture or grant of a franchise between Reed's and Company. Neither party shall have the right to bind the other party to any obligations to third parties. 13. Assignment. Company may not assign or transfer its rights or obligations under this Agreement, whether by operation of law, contract or otherwise, without the prior written consent of Reed's, which shall not be unreasonably withheld (it being understood that a purported assignment to a Reed's competitor identified or referred to in Exhibit D of the Manufacturing and Distribution Agreement shall be considered to be a reasonable basis for withholding consent). This Agreement shall be binding on and inure to the benefit of the parties and their heirs, personal representatives, successors, and assigns. 14. Governing Law; Venue. This Agreement shall be governed by, and any dispute arising hereunder shall be determined in accordance with, the laws of State of New York (without giving effect to conflict of laws principles) including all matters of construction, validity and performance. The parties agree that any claim or dispute arising under this Agreement shall be resolved by a court located in New York City, New York. 15. Force Majeure. No party shall be liable or responsible to the other party, nor be deemed to have defaulted under or breached this Agreement, for any failure or delay in fulfilling or performing any term of this Agreement (except for any obligations to make payments to the other party hereunder), when and to the extent such failure or delay is caused by or results from the following force majeure events ("Force Majeure Events"): (a) acts of God; (b) flood, fire, earthquake or explosion; (c) war, invasion, hostilities (whether war is declared or not), terrorist threats or acts, riot or other civil unrest; (d) government order or law; (e) actions, embargoes or blockades in effect on or after the date of this Agreement; (f) action by any governmental authority; (g) national or regional emergency; (h) strikes, labor stoppages or slowdowns or other industrial disturbances; (i) shortage of adequate power or transportation facilities; and (j) other similar events beyond the reasonable control of the party impacted by the Force Majeure Event (the "Impacted Party"). The Impacted Party shall give notice within seven (7) days of the Force Majeure Event to the other party, stating the period of time the occurrence is expected to continue. The Impacted Party shall use diligent efforts to end the failure or delay and ensure the effects of such Force Majeure Event are minimized. The Impacted Party shall resume the performance of its obligations as soon as reasonably practicable and to the greatest extent possible after the removal of the cause. In the event that the Impacted Party's failure or delay remains uncured for a period of thirty (30) days following written notice given by it under this Section 15, either party may thereafter terminate this Agreement upon thirty (30) days' written notice. 6 + +Source: REED'S, INC., 10-Q, 11/13/2019 + + + + + +16. Integration, Severability and Amendment. This Agreement (including the exhibits) sets forth the entire understanding of the parties with respect to the subject matter of this Agreement and supersedes any and all prior understandings and agreements, whether written or oral, between the parties with respect to such subject matter. This Agreement will be deemed severable, and the invalidity or unenforceability of any term or provision hereof will not affect the validity or enforceability of this Agreement or any other term herein. This Agreement may not be amended or otherwise modified except in a written agreement signed by each party. 17. Waiver. A provision of this Agreement may be waived only by a written instrument executed by the party waiving compliance. No waiver of any provision of this Agreement shall constitute a waiver of any other provision, whether or not similar, nor shall any waiver constitute a continuing waiver. Failure of either party to exercise promptly any right, power or privilege granted by this Agreement, or to require strict performance of any obligation undertaken by the other party pursuant to this Agreement, will not be deemed to be a waiver of such right, power or privilege or of the right to demand subsequent performance of any and all such obligations undertaken by the other party. 18. Notice. Any notice, request or demand to be made under this Agreement shall be in writing and shall be deemed to have been duly made (a) upon delivery, if delivered personally (by courier service or otherwise), as evidenced by written receipt or other written proof of delivery (which may be a printout of the tracking information of a courier service that made such delivery), or (b) five (5) days after deposit in the mail, if sent by certified or registered mail with return receipt requested, postage prepaid, addressed to the party for whom intended at the address listed on the signature page. A party may change its address for the purposes of this Section 18 by written notice hereunder given to the other party. 19. Further Documentation. Each party agrees, at the reasonable request of the other, to promptly execute and deliver all such further documents, and to promptly take or forbear from all such action, as may be reasonably necessary or appropriate in order to more effectively confirm or carry out the provisions of this Agreement. 20. Survival. Sections 6, 7, 9, 10 and 14-24 of this Agreement shall survive the termination or expiration of this Agreement. To the extent that Company receives any trade secrets of Reed's, Company's obligation to protect such trade secrets and abide by the terms of Section 7 shall survive for so long as such information is a bona fine trade secret pursuant to the laws of the governing jurisdiction identified in Section 14. 21. Remedies. All rights and remedies of either party hereto are cumulative of each other and of every other right or remedy such party may otherwise have at law or in equity, and the exercise of one or more rights or remedies shall not prejudice or impair the concurrent or subsequent exercise of other rights or remedies. The parties acknowledge that any material breach, including without limitation the disclosure of Confidential Information, will cause irreparable injury. In addition to any other legal or equitable remedies that may be available, either party will be able to obtain immediate injunctive relief in the form of a temporary restraining order, preliminary injunction or permanent injunction against the other party to enforce the terms of this Agreement. 22. Fees and Expenses. Each party shall be responsible for its own fees and expenses in connection with the preparation and execution of this Agreement. 23. Headings. The headings contained in this Agreement are for the purposes of convenience only and are not intended to define or limit the contents of this Agreement. 24. Counterparts. This Agreement may be executed in more than one counterpart, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument. [Signature Page immediately follows] 7 + +Source: REED'S, INC., 10-Q, 11/13/2019 + + + + + +The parties set forth below have executed this Agreement as of the Effective Date. REED'S: COMPANY: Reed's, Inc. B C Marketing Concepts Inc., dba Full Sail Brewing Company By: /s/ John Bello By: /s/ Cory Comstock Name: John Bello Name: Cory Comstock Title: CEO Title: CEO Address: Address: Reed's, Inc. B C Marketing Concepts Inc. dba Full Sail Attn: John Bello Brewing Company 201 Merritt 7 Attn: Cory Comstock Norwalk, CT 06851 506 Columbia Street Hood River, OR 97031 Amended and Restated Recipe Development Agreement - Signature Page 8 + +Source: REED'S, INC., 10-Q, 11/13/2019 + + + + + +EXHIBIT A Products 1. Ready-to-drink Mule: Specifications to be determined by the Development Committee 2. Ready-to-drink Hard Ginger Seltzer: Specifications to be determined by the Development Committee Amended and Restated Recipe Development Agreement - Exhibit A + +Source: REED'S, INC., 10-Q, 11/13/2019 + + + + + +EXHIBIT B Development Committee Committee Members For Company: ● Brewmaster ● Director of Quality ● Director of Marketing For Reed's: ● Vice President, Marketing ● Vice President, Sales ● Vice President, Operations Committee Meetings Until the Products are initially launched on a commercial basis, the Development Committee will confer (in person at the Company's brewery, or by telephone) at least weekly, and thereafter will confer (in person at the Company's brewery, or by telephone) at least monthly or as otherwise agreed by the Development Committee. Topics and Responsibilities Topics and responsibilities for each meeting will be determined by Development Committee prior to a meeting. Amended and Restated Recipe Development Agreement - Exhibit B + +Source: REED'S, INC., 10-Q, 11/13/2019 + + + + + +Source: REED'S, INC., 10-Q, 11/13/2019 \ No newline at end of file diff --git a/full_contract_txt/Reinsurance Group of America, Incorporated - A_R REMARKETING AGREEMENT.txt b/full_contract_txt/Reinsurance Group of America, Incorporated - A_R REMARKETING AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..0e833ca15fc3db6f3b4e51abb355e6d41f7b37cd --- /dev/null +++ b/full_contract_txt/Reinsurance Group of America, Incorporated - A_R REMARKETING AGREEMENT.txt @@ -0,0 +1,651 @@ +Exhibit 4.1 + +EXECUTION VERSION + +REINSURANCE GROUP OF AMERICA, INCORPORATED + +RGA CAPITAL TRUST I + +AMENDED AND RESTATED REMARKETING AGREEMENT + +February 15, 2011 + +Barclays Capital Inc. 745 Seventh Avenue New York, NY 10019 + +Ladies and Gentlemen: + +Reinsurance Group of America, Incorporated, a Missouri corporation (the "Company"), and RGA Capital Trust I, a Delaware statutory business trust (the "Trust"), issued and sold to Lehman Brothers Inc. and Banc of America Securities LLC (the "Underwriters") pursuant to the Underwriting Agreement, dated December 12, 2001 (the "Underwriting Agreement"), 4,500,000 Trust Preferred Income Equity Redeemable Securities ("PIERS")1 units (the "Firm Units") issued pursuant to a Unit Agreement (the "Unit Agreement") dated as of December 18, 2001, as supplemented September 12, 2008, among the Company, the Trust, The Bank of New York Mellon Trust Company, N.A., as successor unit agent (in such capacity, the "Unit Agent"), as successor warrant agent (in such capacity, the "Warrant Agent"), and as successor property trustee (in such capacity, the "Property Trustee"). In addition, the Company and the Trust granted to the Underwriters an option (the "Option") to purchase up to an additional 675,000 Units (the "Option Units" and, together with the Firm Units, the "Units"). + +Each Unit consists of a preferred security, liquidation preference $50 per security, of the Trust (each, a "Preferred Security") and a warrant (each, a "Warrant") of the Company to purchase at any time prior to the close of business on December 15, 2050, shares (the "Warrant Shares") of common stock, par value $0.01 per share, of the Company ("Common Stock"), subject to antidilution adjustments. Each Preferred Security represents an undivided beneficial ownership interest in the assets of the Trust, which assets consist solely of the 5.75% Junior Subordinated Deferrable Interest Debentures due 2051 of the Company (the "Debentures"). Certain payments on the Preferred Securities and Common Securities (the "Trust Securities") are guaranteed (the "Guarantee") by the Company pursuant to the Guarantee Agreement (the "Guarantee Agreement") dated as of December 18, 2001, between the Company and The Bank of New York Mellon Trust Company, as successor guarantee trustee (in such capacity, the "Guarantee Trustee"). + +The Trust was formed on February 9, 2001 pursuant to a trust agreement dated as of February 8, 2001 (the "Original Trust Agreement") executed by the Company, as depositor, + + + +1 "Preferred Income Equity Redeemable SecuritiesSM" and "PIERSSM" are service marks owned by Lehman Brothers Inc. + + + + + + + +and The Bank of New York (Delaware), as Delaware trustee (in such capacity, the "Delaware Trustee"), and a certificate of trust dated as of February 8, 2001 (the "Trust Certificate") filed with the Secretary of State of the State of Delaware. The Trust is governed by, and the Preferred Securities were issued under, the Original Trust Agreement, as amended and restated by the Amended and Restated Trust Agreement (the "Amended and Restated Trust Agreement" and, together with the Original Trust Agreement, the "Trust Agreement")) dated as of December 18, 2001, among the Company, the Property Trustee, the Delaware Trustee and A. Greig Woodring, Jack B. Lay and Todd C. Larson, as the initial administrative trustees (in such capacities, the "Administrative Trustees") which amended and restated the Original Trust Agreement. + +The Trust used the proceeds from the sale of the Trust Securities to purchase the Debentures that were issued pursuant to the Indenture (the "Original Indenture"), as supplemented by a Supplemental Indenture (the "Supplemental Indenture" and, together with the Original Indenture, as so supplemented, the "Indenture"), in each case, dated as of December 18, 2001 between the Company and The Bank of New York Mellon Trust Company, N.A., as successor indenture trustee (in such capacity, the "Indenture Trustee"). The Trust will, if and to the extent it receives the proceeds of a payment on the Debentures, distribute to the holders of the Preferred Securities all payments so received. + +The Company issued the Warrants pursuant to a Warrant Agreement (the "Warrant Agreement") dated as December 18, 2001, as amended as of September 12, 2008, between the Company and the Warrant Agent. + +This Agreement, the Unit Agreement, the Trust Agreement, the Warrant Agreement, the Guarantee Agreement and the Indenture are referred to herein collectively as the "Transaction Agreements" and this Agreement, the Unit Agreement, the Trust Agreement and the Warrant Agreement are referred to herein collectively as the "Unit Documents." + +The remarketing (the "Remarketing") of the Preferred Securities is provided for in the Trust Agreement and in an agreement dated December 18, 2001 between the Company and Lehman Brothers Inc. (the "Original Remarketing Agreement"), and if the Debentures have been distributed to the holders of the Preferred Securities in exchange for such Preferred Securities, pursuant to the Trust Agreement and the Indenture. From the date hereof, Barclays Capital Inc. ("Barclays") hereby agrees to be bound by the Original Remarketing Agreement as amended hereby. + +As used in this Agreement, the term "Remarketing Securities" means the Preferred Securities or the Debentures, as applicable, subject to the Remarketing as notified by the Property Trustee, the Unit Agent and the Indenture Trustee, as applicable, on the third Business Day prior to the Remarketing Settlement Date; the term "Remarketing Procedures" means the procedures in connection with the Remarketing of the Remarketing Securities described in the Trust Agreement, the Indenture and this Agreement; and the term "Previous Related Transactions" means any transactions in connection with (i) the redemption of or exchange for or exercise of the Warrants or (ii) elections related to participation in the Remarketing. + +2 + + + + + + + +Capitalized terms used and not defined in this Agreement shall have the meanings assigned to them in the Unit Agreement, the Trust Agreement, the Warrant Agreement and the Guarantee Agreement or, if not therein defined, the Indenture. + +Section 1. Appointment and Obligations of the Remarketing Agent. (a) The Company and the Trust (together, the "Issuers") hereby appoint Barclays as exclusive remarketing agent (the "Remarketing Agent"), and Barclays hereby accepts appointment as Remarketing Agent, for the purpose of (i) remarketing the Remarketing Securities on behalf of the holders thereof and (ii) performing such other duties as are assigned to the Remarketing Agent in the Remarketing Procedures, all in accordance with and pursuant to the Remarketing Procedures. + +(b) The Remarketing Agent agrees to: + +(i) use its commercially reasonable efforts to remarket the Remarketing Securities deemed tendered to the Remarketing Agent in the Remarketing pursuant to the Remarketing Procedures; + +(ii) notify the Issuers promptly of the Reset Rate; and + +(iii) carry out such other duties as are assigned to the Remarketing Agent in the Remarketing Procedures, all in accordance with the provisions of the Remarketing Procedures. + +(c) On the third Business Day immediately preceding the Remarketing Settlement Date (the "Remarketing Date"), the Remarketing Agent shall use its commercially reasonable efforts to remarket the Remarketing Securities, at a price at least equal to: + +(i) 100% of the aggregate Accreted Value thereof as of the end of the day on the day next preceding the Remarketing Settlement Date; or + +(ii) on the Maturity Remarketing Date, 100% of the stated liquidation amount of the Preferred Securities or the principal amount at maturity of the Debentures, as the case may be. + +(d) If, as a result of the efforts described in Section 1(b), the Remarketing Agent determines that it will be able to remarket all Remarketing Securities deemed tendered for purchase at the purchase price set forth in Section 1(c) prior to 4:00 p.m. (New York City time) on the Remarketing Date, the Remarketing Agent shall determine the Reset Rate, which shall be the rate per annum (rounded to the nearest one-thousandth (0.001) of one percent per annum) that the Remarketing Agent reasonably determines, in good faith after consultation with the Company, to be the lowest distribution rate or interest rate, as applicable, per annum that will enable it to remarket all Remarketing Securities deemed tendered for Remarketing. In the event of a Remarketing: + +(i) in connection with a Remarketing upon a Trading Remarketing Event or a Legal Cause Remarketing Event, the Accreted Value of the Debentures as of + +3 + + + + + + + +the end of the day on the day next preceding the Remarketing Settlement Date shall become due on the date which is 93 days following the Remarketing Settlement Date, and, as a result, the Accreted Value of the Preferred Securities as of the end of the day on the day next preceding the Remarketing Settlement Date shall be redeemed on the date which is 93 days following the Remarketing Settlement Date; + +(ii) in connection with a Remarketing upon a Trading Remarketing Event or a Legal Cause Remarketing Event, on the Remarketing Settlement Date, the rate of interest per annum on the Accreted Value of the Debentures shall become the Reset Rate on the Accreted Value of the Preferred Securities that is determined pursuant to the Remarketing of the Preferred Securities, and, as a result, the Distribution rate per annum on the Accreted Value of the Preferred Securities shall become the Reset Rate established in the Remarketing of the Preferred Securities; + +(iii) as of the Remarketing Settlement Date, interest accrued and unpaid on the Debentures from and including the immediately preceding Interest Payment Date to, but excluding, the Remarketing Settlement Date shall be payable to the holders of the Debentures on the Special Record Date and, as a result, Distributions accumulated and unpaid on the Preferred Securities from and including the immediately preceding Distribution Date to, but excluding, the Remarketing Settlement Date shall be payable to the Holders of the Preferred Securities on the Special Record Date (as defined in the Trust Agreement); and + +(iv) in connection with a Remarketing upon a Trading Remarketing Event or a Legal Cause Remarketing Event, the Company shall be obligated to redeem the Warrants on the Remarketing Settlement Date at a redemption price per Warrant equal to the Warrant Redemption Amount as of the end of the day on the day next preceding the Remarketing Date. + +(e) If none of the holders of Remarketing Securities elects to have Remarketing Securities remarketed in the Remarketing, the Remarketing Agent shall reasonably determine, in good faith after consultation with the Company, the distribution rate or interest rate, as applicable, that would have been established had a Remarketing been held on the Remarketing Date, and such rate shall be the Reset Rate, and the related modifications to the other terms of the Preferred Securities and to the terms of the Debentures and the Warrants shall be effective as of the Remarketing Date. + +(f) If, by 4:00 p.m. (New York City time) on the Remarketing Date, the Remarketing Agent is unable to remarket all Remarketing Securities deemed tendered for purchase, a failed Remarketing (a "Failed Remarketing") shall be deemed to have occurred, and the Remarketing Agent shall so advise by telephone (promptly confirmed in writing) The Depository Trust Company ("DTC"), the Property Trustee, the Debenture Trustee, the Administrative Trustees and the Company. In the event of a Failed Remarketing: + +4 + + + + + + + +(i) beginning on the third Business Day after the Failed Remarketing Date, interest will accrue on the Accreted Value of the Debentures (which in connection with the expiration of the Warrants is $50), and Distributions will accumulate on the Accreted Value of the Preferred Securities at the rate described in clause (iii) below; + +(ii) the Accreted Value of all outstanding Debentures as of the end of the day on the day next preceding the Remarketing Settlement Date shall become due on the date which is 93 days following the Failed Remarketing Settlement Date, and, as a result, the Accreted Value of the Preferred Securities as of the end of the day on the day next preceding the Remarketing Settlement Date shall be redeemed on the date which is 93 days following the Remarketing Settlement Date with respect to such Failed Remarketing; + +(iii) the rate of interest per annum on the Accreted Value of the Debentures shall become 10.25% per annum, and, as a result, the rate of Distribution per annum on the Accreted Value of the Preferred Securities shall become 10.25% per annum, which shall accrue and be payable as provided in the Trust Agreement; and + +(iv) pursuant to the Indenture, the Company no longer shall have the option to defer payments of interest on the Debentures. + +(g) By approximately 4:30 p.m. (New York City time) on the Remarketing Date, provided that there has not been a Failed Remarketing, the Remarketing Agent shall advise, by telephone (promptly confirmed in writing): + +(i) DTC, the Property Trustee, the Debenture Trustee and the Issuers of the Reset Rate determined in the Remarketing and the number of Remarketing Securities (or, if applicable, aggregate principal amount of Remarketing Securities) sold in the Remarketing, + +(ii) each purchaser (or their DTC participant) of the Reset Rate and the number of Remarketing Securities (or, if applicable, aggregate principal amount of Remarketing Securities) such purchaser is to purchase; and + +(iii) each purchaser to give instructions to its DTC participant to pay the purchase price on the Remarketing Settlement Date in same day funds against delivery of the Remarketing Securities purchased through the facilities of DTC. + +Section 2. Representations, Warranties and Agreements of the Issuers. The Trust (as to itself and the Preferred Securities) and the Company represent, warrant and agree (i) on and as of the date hereof (except to the extent representations relate specifically to the date or date(s) referred to in clauses (ii) and (iii) of this paragraph), (ii) on and as of the date that the Preliminary Prospectus (as defined in Section 2(a) below) is first distributed in connection with the Remarketing (the "Commencement Date") and (iii) on and as of the Remarketing Settlement Date, that: + +5 + + + + + + + +(a) The Company has filed with the Securities and Exchange Commission (the "Commission") an automatic shelf registration statement on Form S- 3 (File Nos. 333-172296 and 333-172296-01) (the "Registration Statement"), which registration statement became effective upon filing under Rule 462(e) of the Securities Act of 1933, as amended (the "Securities Act"). Such registration statement covers the registration of the Remarketing Securities (among others) under the Securities Act and has (i) been prepared by the Company in conformity in all material respects with the requirements of the Securities Act, (ii) been filed with the Commission under the Securities Act and (iii) become effective under the Securities Act. The Registration Statement is an "automatic shelf registration statement" as defined under Rule 405 of the Securities Act that has been filed with the Commission not earlier than three years prior to the date hereof. Copies of the Registration Statement and all exhibits thereto have been delivered by the Company to you. As used in this Agreement, "Effective Time" means the date and the time as of which each part of the registration statement on Form S-3 (File Nos. 333-172296 and 333-172296-01) (the "Latest Registration Statement") or the most recent post- effective amendment thereto, if any, became effective; "Effective Date" means the date of the Effective Time; "Preliminary Prospectus" means each prospectus included in the Latest Registration Statement, or amendments thereof, before it became effective under the Securities Act and any prospectus and prospectus supplement filed with the Commission by the Company with the consent of the Underwriters pursuant to Rule 424(a) of the Securities Act relating to the Remarketing Securities; the term "Registration Statement" means such Latest Registration Statement, as amended as of the Effective Time, including the Incorporated Documents (as defined below) and all information contained in the final prospectus relating to the Remarketing Securities filed with the Commission pursuant to Rule 424(b) of the Securities Act and deemed to be a part of such registration statement as of the Effective Time pursuant to Rule 430A or Rule 430B of the Securities Act; and "Prospectus" means the prospectus and prospectus supplement relating to the Remarketing Securities (or in the form made available to the Underwriters by the Company to meet requests of purchasers) pursuant to Rule 172 or Rule 173 of the Securities Act. + +For purposes of this Agreement, "free writing prospectus" has the meaning set forth in Rule 405 of the Securities Act (which does not include communications not deemed a prospectus pursuant to Rule 134 of the Securities Act and historical issuer information meeting the requirements of Rule 433(e)(2) of the Securities Act) and "Time of Sale Prospectus" means the Preliminary Prospectus together with any free writing prospectuses, if any, each identified in Schedule 1 hereto, and any other free writing prospectus that the parties hereto shall hereafter expressly agree in writing to treat as part of the Time of Sale Prospectus (except for purposes of Sections 6(c) and 6(d)), for which the term "Time of Sale Prospectus" shall not include the free writing prospectus(es) identified in Schedule 1). Reference made herein to the Preliminary Prospectus, the Prospectus or the Time of Sale Prospectus shall be deemed to refer to and include any documents incorporated by reference therein (pursuant to Item 12 of Form S-3 under the Securities Act, as of the date of the Preliminary Prospectus, the Prospectus or the Time of Sale Prospectus, as the case may be (such documents, the "Incorporated Documents")), and any reference to any amendment or supplement to the Preliminary Prospectus or the Prospectus shall be deemed to refer to and include any document filed under the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission thereunder (collectively, the "Exchange Act") after the date of the Preliminary Prospectus, the Prospectus, or the date hereof, as the case may be, and incorporated by reference in the Preliminary Prospectus, the Prospectus or Time of Sale Prsospectus, as the case may be; and any reference to any amendment to the + +6 + + + + + + + +Registration Statement shall be deemed to include the documents filed with the Commission pursuant to Section 13(a) or 15(d) of the Exchange Act after the Effective Time that is incorporated by reference in the Registration Statement. The Commission has not issued any notice of objection or any order preventing or suspending the use of any of the Preliminary Prospectus, any free writing prospectus, the Time of Sale Prospectus, the Prospectus or the Registration Statement. + +(b) The conditions for use of Form S-3, as set forth in the General Instructions thereto, have been satisfied or waived. + +(c) (i) The Registration Statement conforms, and the Prospectus and any further amendments or supplements to the Registration Statement or the Prospectus will, when they become effective or are filed with the Commission, as the case may be, conform in all material respects to the requirements of the Securities Act (including Rule 415(a) of the Securities Act), the Trust Indenture Act of 1939, as amended, and the rules and regulations promulgated thereunder ("Trust Indenture Act"); (ii) each part of the Registration Statement, as of its Effective Date and as of the date hereof, and any amendment thereto, as of the date of any such amendment, did not, does not and will not, as the case may be, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; (iii) the Time of Sale Prospectus, as of the date hereof and at the time of each sale (as such phrase is used in Rule 159 under the Act) of the Securities in connection with the offering and as of the Delivery Date, as then amended or supplemented by the Company, if applicable, does not and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; and (iv) the Prospectus, as of the date hereof and the Delivery Date, as then supplemented by the Company, if applicable, does not and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that, the Company makes no representation or warranty as to information contained in or omitted from the Registration Statement, the Time of Sale Prospectus or the Prospectus in reliance upon and in conformity with written information furnished to the Company by the Remarketing Agent expressly for inclusion therein, which consists of the name of the Remarketing Agent as set forth on the front cover page of the Preliminary Prospectus and the Prospectus and the information contained in the second sentence of the fourth paragraph and in the fifth paragraph under the caption "Remarketing" in the Preliminary Prospectus and the Prospectus, it being understood that seven paragraphs appear within the "Remarketing" section. + +(d) The Incorporated Documents, when they were filed with the Commission, as the case may be, conformed in all material respects to the requirements of the Securities Act and the Exchange Act, as applicable; and none of the Incorporated Documents, when such documents were filed with the Commission, contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; and any further documents so filed and incorporated by reference in the Time of Sale Prospectus or the Prospectus, when such documents are filed with the Commission, will conform in all material respects to the requirements of the Exchange Act and will not contain any untrue + +7 + + + + + + + +statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances in which they were made, not misleading. + +(e) The Company meets the requirements to use free writing prospectuses in connection with the offering of the Securities pursuant to Rules 164 and 433 of the Securities Act. Any free writing prospectus that the Company is required to file with the Commission pursuant to Rule 433(d) of the Securities Act has been, or will be, timely filed with the Commission in accordance with the requirements of the Securities Act. Each issuer free writing prospectus (as defined in Rule 433(h)(1) under the Act) that the Company has filed, or is required to file, pursuant to Rule 433(d) of the Securities Act, or that was prepared by or on behalf of or used by the Company complies or will comply in all material respects with the requirements of the Securities Act. Except for the free writing prospectus(es), if any, identified in Schedule 1 hereto, the Company has not prepared, used or referred to, and will not, without the Remarketing Agent's prior consent, not to be unreasonably withheld or delayed, prepare, use or refer to, any free writing prospectus. + +(f) No relationship, direct or indirect, exists between or among the Company on the one hand, and the directors, officers, shareholders, customers or suppliers of the Company on the other hand, which is required to be described in each of the Time of Sale Prospectus and the Prospectus which is not so described. + +(g) There are no contracts, agreements or other documents which are required to be described in each of the Time of Sale Prospectus and the Prospectus or filed as exhibits to the Registration Statement or the Incorporated Documents by the Securities Act or the Exchange Act, as the case may be, which have not been described in each of the Time of Sale Prospectus and the Prospectus or filed as exhibits to the Registration Statement or the Incorporated Documents. + +(h) Except as set forth in or contemplated by each of the Time of Sale Prospectus and the Prospectus, neither the Company nor any of its subsidiaries has sustained, since the date of the latest audited financial statements included or incorporated by reference in the Time of Sale Prospectus, any material loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree; since such date, there has not been any material adverse change in the capital stock, short-term debt or long-term debt of the Company or any of its subsidiaries or any material adverse change, or any development involving a prospective material adverse change, in or affecting the general affairs, management, consolidated financial position, shareholders' equity, results of operations, business or prospects of the Company and its subsidiaries, taken as a whole; and subsequent to the respective dates as of which information is given in the Time of Sale Prospectus and up to the Remarketing Settlement Date, except as set forth in the Time of Sale Prospectus, (i) neither the Company nor any of its subsidiaries has incurred any liabilities or obligations outside the ordinary course of business, direct or contingent, which are material to the Company and its subsidiaries taken as a whole, nor entered into any material transaction not in the ordinary course of business and (ii) there have not been dividends or distributions of any kind declared, paid or made by Company on any class of its capital stock, except for regularly scheduled dividends. + +8 + + + + + + + +(i) Each of the Company and each of Reinsurance Company of Missouri, Incorporated, RGA Reinsurance Company, RGA Reinsurance Company (Barbados) Ltd., RGA Life Reinsurance Company of Canada, RGA Americas Reinsurance Company, Ltd. and RGA Atlantic Reinsurance Company Ltd. (the "Significant Subsidiaries"), which are the Company's only "significant subsidiaries" (as defined under Rule 405 of the Securities Act), has been duly organized, is validly existing as a corporation in good standing under the laws of its respective jurisdiction of incorporation, has all requisite corporate power and authority to carry on its business as it is currently being conducted and in all material respects as described in each of the Time of Sale Prospectus and the Prospectus and to own, lease and operate its properties, and is duly qualified and in good standing as a foreign corporation authorized to do business in each jurisdiction in which the nature of its business or its ownership or leasing of property requires such qualification, except where the failure to so register or qualify would not, reasonably be expected, singly or in the aggregate, to result in a material adverse effect on the properties, business, results of operations, condition (financial or otherwise), affairs or prospects of the Company and its subsidiaries, taken as a whole (a "Material Adverse Effect"). + +(j) As of the date of this Agreement, the entities listed on Schedule 2 are the only subsidiaries, direct or indirect, of the Company, and the Company owns, directly or indirectly through other subsidiaries, the percentage indicated on such Schedule 2 of the outstanding capital stock or other securities evidencing equity ownership of such subsidiaries, free and clear of any security interest, claim, lien, limitation on voting rights or encumbrance; and all of such securities have been duly authorized, validly issued, are fully paid and nonassessable and were not issued in violation of any preemptive or similar rights. There are no outstanding subscriptions, preemptive or other rights, warrants, calls, commitments of sale or options to acquire, or instruments convertible into or exchangeable for, any such shares of capital stock or other equity interest of such subsidiaries. + +(k) Neither the Company nor any of its subsidiaries is (i) in violation of its respective charter or bylaws, (ii) is in default in the performance of any bond, debenture, note, indenture, mortgage, deed of trust or other agreement or instrument to which it is a party or by which it is bound or to which any of its properties is subject or (iii) is in violation of any law, statute, rule, regulation, judgment or court decree applicable to the Company, any of its subsidiaries or their assets or properties, except in the case of clauses (ii) and (iii) for any such violation or default which does not or would not reasonably be expected to have a Material Adverse Effect. + +(l) The catastrophic coverage arrangements are described in each of the Time of Sale Prospectus and the Prospectus are in full force and effect as of the date hereof and all other retrocessional treaties and arrangements to which the Company or any of its Significant Subsidiaries is a party and which have not terminated or expired by their terms are in full force and effect, and none of the Company or any of its Significant Subsidiaries is in violation of or in default in the performance, observance or fulfillment of, any obligation, agreement, covenant or condition contained therein, except to the extent that any such violation or default would not reasonably be expected to have a Material Adverse Effect; neither the Company nor any of its Significant Subsidiaries has received any notice from any of the other parties to such treaties, contracts or agreements that such other party intends not to perform such treaty, contract or agreement that would reasonably be expected to have a Material Adverse Effect and, to the best + +9 + + + + + + + +knowledge of the Company, the Company has no reason to believe that any of the other parties to such treaties or arrangements will be unable to perform such treaty or arrangement in any respect that would reasonably be expected to have a Material Adverse Effect. + +(m) The execution, delivery and performance by the Company and the Trust of the Transaction Agreements, as the case may be, the issuance of the Unit Securities by the Company and the Trust, as applicable, the Remarketing of the Remarketing Securities by Company and the Trust, as applicable, and the consummation by the Company and the Trust, as applicable, of the transactions contemplated hereby and thereby (excluding any Previous Related Transactions) did not and will not violate or constitute a breach of any of the terms or provisions of, or a default under (or an event that with notice or the lapse of time, or both, would constitute a default), or require consent under, or result in the imposition of a lien or encumbrance on any properties of the Company or any of its subsidiaries, or an acceleration of indebtedness pursuant to, (i) the charter or bylaws (or equivalent organizational documents) of the Company or any of its subsidiaries, (ii) any bond, debenture, note, indenture, mortgage, deed of trust or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which any of them or their property is or may be bound, (iii) any statute, rule or regulation applicable to the Company, any of its subsidiaries or any of their assets or properties or (iv) any judgment, order or decree of any court or governmental agency or authority having jurisdiction over the Company, any of its subsidiaries or their assets or properties, other than in the case of clauses (ii) through (iv), any violation, breach, default, consent, imposition or acceleration relating to the Original Remarketing Agreement or that would not reasonably be expected to have a Material Adverse Effect and, except for such consents or waivers as may have been obtained by the Company or such consents or filings as may relate to the Original Remarketing Agreement, or as may be required under state or foreign securities or Blue Sky laws and regulations by the Financial Industry Regulatory Authority, Inc. ("FINRA"). + +(n) No consent, approval, authorization or order of, or filing, registration, qualification, license or permit of or with, any court or governmental agency, body or administrative agency is required for the execution, delivery and performance by the Company and the Trust of the Transaction Agreements, as applicable, the issuance of the Unit Securities by the Company and the Trust, as applicable, the Remarketing of the Remarketing Securities by the Company and the Trust, and the consummation by the Company and the Trust, as applicable, of the transactions contemplated hereby and thereby (excluding any Previous Related Transactions), except such as (i) would not reasonably be expected to have a Material Adverse Effect, (ii) would not prohibit or adversely affect the Remarketing of the Remarketing Securities and (iii) have been obtained and made or, with respect to current reports on Form 8-K, a Prospectus and a free writing prospectus to be filed with the Commission in connection with the issuance and sale of the Remarketing Securities, will be made, under the Securities Act, or as may relate to the Original Remarketing Agreement or may be required under state or foreign securities or Blue Sky laws and regulations or by FINRA or has been obtained from the State of Missouri Department of Insurance. Except as contemplated hereby, no consents or waivers from any other person were or are required, as applicable, for the execution, delivery and performance by the Company and the Trust of the Transaction Agreements, as applicable, the issuance of the Unit Securities by the Company and the Trust, as applicable, the Remarketing of the Remarketing Securities and the consummation by the Company of the transactions contemplated hereby and thereby, as applicable (excluding the Previous Related Transactions), other than such + +10 + + + + + + + +consents and waivers as (i) would not reasonably be expected to have a Material Adverse Effect, (ii) may relate to the Original Remarketing Agreement, (iii) would not prohibit or adversely affect the Remarketing of the Remarketing Securities or (iv) have been obtained. + +(o) Except as set forth in or contemplated by the Prospectus or as may relate to the Original Remarketing Agreement, there is (i) no action, suit or proceeding before or by any court, arbitrator or governmental agency, body or official, domestic or foreign, now pending or threatened or contemplated to which the Company or any of its subsidiaries is or may be a party or to which the business or property of the Company or any of its subsidiaries is or may be subject, (ii) no statute, rule, regulation or order that has been enacted, adopted or issued by any governmental agency or that has been proposed by any governmental body having jurisdiction over the Company or its subsidiaries and (iii) no injunction, restraining order or order of any nature by a federal or state court or foreign court of competent jurisdiction to which the Company or any of its subsidiaries is or may be subject issued that, in the case of clauses (i), (ii) and (iii) above, (x) would, singly or in the aggregate, reasonably be expected to result in a Material Adverse Effect, (y) would interfere with or adversely affect the issuance of any of the Securities or (z) in any manner draw into question the validity of any of the Transaction Agreements or the Remarketing of the Remarketing Securities. The Time of Sale Prospectus contains in all material respects the same description of the foregoing matters contained in the Prospectus. + +(p) None of the employees of the Company and its subsidiaries is represented by a union and, to the best knowledge of the Company and its subsidiaries, no union organizing activities are taking place. Neither the Company nor any of its subsidiaries has violated any federal, state or local law or foreign law relating to discrimination in hiring, promotion or pay of employees, nor any applicable wage or hour laws, nor any provision of the Employee Retirement Income Security Act of 1974, as amended, and the rules and regulations thereunder (collectively, "ERISA"), or analogous foreign laws and regulations, which would reasonably be expected to result in a Material Adverse Effect. + +(q) Each of the Company and its subsidiaries has (i) good and, in the case of real property, merchantable title to all of the properties and assets described in each of the Time of Sale Prospectus and the Prospectus as owned by it, free and clear of all liens, charges, encumbrances and restrictions, except such as are described in each of the Time of Sale Prospectus and the Prospectus, or as would not reasonably be expected to have a Material Adverse Effect, (ii) peaceful and undisturbed possession under all leases to which it is party as lessee, (iii) all material licenses, certificates, permits, authorizations, approvals, franchises and other rights from, and has made all declarations and filings with, all federal, state and local governmental authorities (including, without limitation, from the insurance regulatory agencies of the various jurisdictions where it conducts business) and all courts and other governmental tribunals (each, an "Authorization") necessary to engage in the business currently conducted by it in the manner described in each of the Time of Sale Prospectus and the Prospectus, except where failure to hold such Authorizations would not reasonably be expected to have a Material Adverse Effect, (iv) fulfilled and performed all obligations necessary to maintain each authorization and (v) no knowledge of any threatened action, suit or proceeding or investigation that would reasonably be expected to result in the revocation, termination or suspension of any Authorization, the revocation, termination or suspension of which would reasonably be expected + +11 + + + + + + + +to have a Material Adverse Effect. Except as would not reasonably be expected to have a Material Adverse Effect, all such Authorizations are valid and in full force and effect and the Company and its subsidiaries are in compliance in all material respects with the terms and conditions of all such Authorizations and with the rules and regulations of the regulatory authorities having jurisdiction with respect thereto. No insurance regulatory agency or body has issued any order or decree impairing, restricting or prohibiting the payment of dividends by any subsidiary of the Company to its parent, other than any such orders or decrees the issuance of which would not reasonably be expected to have a Material Adverse Effect. Except as would not have a Material Adverse Effect, all leases to which the Company or any of its subsidiaries is a party are valid and binding and no default by the Company or any of its subsidiaries has occurred and is continuing thereunder, and, to the Company's knowledge, no material defaults by the landlord are existing under any such lease. + +(r) All tax returns required to be filed by the Company or any of its subsidiaries, in all jurisdictions, have been so filed. All taxes, including withholding taxes, penalties and interest, assessments, fees and other charges due or claimed to be due from such entities or that are due and payable have been paid, other than those being contested in good faith and for which adequate reserves have been provided or those currently payable without penalty or interest. The Company does not know of any material proposed additional tax assessments against it or any of its subsidiaries. + +(s) Neither the Company nor any of its subsidiaries is an "investment company" as defined, and subject to regulation, under the Investment Company Act of 1940, as amended, and the rules and regulations of the Commission thereunder (collectively, the "Investment Company Act"), or analogous foreign laws and regulations. + +(t) The authorized, issued and outstanding capital stock of the Company has been validly authorized and issued, is fully paid and nonassessable and was not issued in violation of or subject to any preemptive or similar rights; and such authorized capital stock conforms in all material respects to the description thereof set forth in each of the Time of Sale Prospectus and the Prospectus. Except with respect to Warrants to purchase Common Stock issued by the Company as part of the Trust Preferred Income Equity Redeemable Securities of the Company and RGA Capital Trust I or otherwise as expressly set forth in the Time of Sale Prospectus (including with respect to preferred stock purchase rights of the Company), since the date set forth in the Time of Sale Prospectus, (A) there are no outstanding preemptive or other rights, warrants or options to acquire, or instruments convertible into or exchangeable for, any shares of capital stock or other equity interest in the Company or any of its subsidiaries, or any contract, commitment, agreement, understanding or arrangement of any kind relating to the issuance of any capital stock of the Company or any such subsidiary, any such convertible or exchangeable securities or any such rights, warrants or options (except as contemplated by the terms of the 6.75% Junior Subordinated Debentures due 2065 of the Company) and (B) there will have been no change in the authorized or outstanding capitalization of the Company, except with respect to, in the case of each of clause (A) and (B) above, (i) changes occurring in the ordinary course of business and (ii) changes in outstanding Common Stock and options or rights to acquire Common Stock resulting from transactions relating to the Company's employee benefit, dividend reinvestment or stock purchase plans. + +12 + + + + + + + +(u) The Company maintains a system of internal control over financial reporting (as such term is defined in Rule 13a-15(f) of the Exchange Act) that complies with the requirements of the Exchange Act and has been designed by the Company's principal executive officer and principal financial officer, or under their supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with United States generally accepted accounting principles. The Company's internal control over financial reporting is effective and the Company is not aware of any material weaknesses in its internal control over financial reporting. Since the date of the latest financial statements included or incorporated by reference in each of the Time of Sale Prospectus and the Prospectus, there has been no change in the Company's internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting. The Company has established and maintains disclosure controls and procedures (as such terms are defined in Rule 13a-15(e) of the Exchange Act) in accordance with the rules and regulations under the Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act") and the Exchange Act. Such disclosure controls and procedures (a) are designed to provide reasonable assurance that material information relating to the Company and its subsidiaries is made known to the Company's Chief Executive Officer and its Chief Financial Officer by others within those entities. Such disclosure controls and procedures are effective to provide such reasonable assurance. + +(v) The Company and each of its subsidiaries maintains insurance covering their properties, personnel and business. Such insurance insures against such losses and risks as are adequate in accordance with the Company's perception of customary industry practice to protect the Company and its subsidiaries and their businesses. Neither the Company nor any of its subsidiaries have received notice from any insurer or agent of such insurer that substantial capital improvements or other expenditures will have to be made in order to continue such insurance. All such insurance is outstanding and duly in force on the date hereof and will be outstanding and duly in force on the Commencement Date and the Remarketing Settlement Date. + +(w) Neither the Company nor any agent thereof acting on the behalf of the Company has taken, and none of them will take, any action that might cause the execution, delivery and performance by the Company and the Trust of the Transaction Agreements, as applicable, the issuance of the Unit Securities by the Company and the Trust, as applicable, the Remarketing of the Remarketing Securities by the Company and the Trust, as applicable, and the consummation by the Company and the Trust, as applicable, of the transactions contemplated hereby and thereby to violate Regulation T (12 C.F.R. Part 220), Regulation U (12 C.F.R. Part 221) or Regulation X (12 C.F.R. Part 224) of the Board of Governors of the Federal Reserve System. + +(x) Deloitte & Touche LLP ("Deloitte & Touche"), who has issued an unqualified opinion on the financial statements and supporting schedules included or incorporated by reference in each of the Time of Sale Prospectus and the Prospectus (other than the financial information for the quarterly periods or the year ended and as of December 31, 2010) and has audited the Company's internal control over financial reporting and management's assessment thereof, is an independent registered public accounting firm as required by the Securities Act. The consolidated historical statements together with the related schedules and notes fairly present, in all material respects, the consolidated financial condition and results of + +13 + + + + + + + +operations of the Company and its subsidiaries at the respective dates and for the respective periods indicated, in accordance with United States generally accepted accounting principles consistently applied throughout such periods, except as stated therein. Other financial and statistical information and data included or incorporated by reference in each of the Time of Sale Prospectus and the Prospectus, historical and pro forma, are, in all material respects, accurately presented and prepared on a basis consistent with such financial statements, except as may otherwise be indicated therein, and the books and records of the Company and its subsidiaries. + +(y) The 2009 statutory annual statements of each of the Company's U.S. subsidiaries which is regulated as an insurance company (collectively, the "Insurance Subsidiaries") and the statutory balance sheets and income statements included in such statutory annual statements together with related schedules and notes, have been prepared, in all material respects, in conformity with statutory accounting principles or practices required or permitted by the appropriate Insurance Department of the jurisdiction of domicile of each such subsidiary, and such statutory accounting practices have been applied on a consistent basis throughout the periods involved, except as may otherwise be indicated therein or in the notes thereto, and present fairly, in all material respects, the statutory financial position of the Insurance Subsidiaries as of the dates thereof, and the statutory basis results of operations of the Insurance Subsidiaries for the periods covered thereby. + +(z) The Company and the Insurance Subsidiaries have made no material changes in their insurance reserving practices since December 31, 2009, except where such change in such insurance reserving practices would not reasonably be expected to have a Material Adverse Effect. + +(aa) (i) The Company's senior long-term debt is rated by A.M. Best Company, Inc., by Moody's Investor Services ("Moody's") and by Standard & Poor's Rating Services, Inc. ("S&P"); (ii) RGA Reinsurance Company has a financial strength rating of "A+" (Superior) from A.M. Best Company, Inc., "A1" from Moody's and "AA-" from S&P; (iii) RGA Life Reinsurance Company of Canada has a financial strength rating of "A+" (Superior) from A.M. Best Company, Inc. and "AA-" from S&P; and (iv) the Company is not aware of any threatened or pending downgrading of the ratings set forth in clauses (i), (ii) and (iii) above or any other claims-paying ability rating of the Company or any Significant Subsidiaries, other than as set forth or described in the Time of Sale Prospectus. + +(bb) The Trust has been duly created and is validly existing as a statutory business trust in good standing under the Statutory Trust Act of the State of Delaware, 12 Del. C. § 3801 et seq. (the "Delaware Statutory Trust Act"), with the power and authority (trust and other) to own property and conduct its business as described in the Prospectus, and has conducted and will conduct no business other than the transactions contemplated by the Prospectus. + +(cc) Each of the Administrative Trustees is either an officer or employee of the Company or one of its subsidiaries and has been duly authorized by the Company or such subsidiary to serve in such capacity and to execute and deliver the Trust Agreement. + +14 + + + + + + + +(dd) The Trust is not a party to or bound by any agreement or instrument other than the Transaction Agreements to which it is a party and the agreements and instruments contemplated by the Trust Agreement and described in the Prospectus; the Trust has no liabilities or obligations other than those arising out of the transactions contemplated by the Transaction Agreements to which it is a party and described in the Prospectus; and the Trust is not a party to or subject to any action, suit or proceeding of any nature. + +(ee) Each of the Company and the Trust had or has, as applicable, all requisite corporate and trust power and authority, as applicable, to execute, issue and deliver the Transaction Agreements, to issue the Unit Securities and to cause the Remarketing of the Remarketing Securities and to perform its respective obligations thereunder; each Transaction Agreement to which the Company and the Trust is a party has been duly authorized by the Company or the Trust, as applicable, and each Transaction Agreement, when duly executed and delivered by the Company and the Trust, as applicable, and assuming due authorization, execution and delivery thereof by the other parties thereto, constitutes a valid and binding agreement of the Company and the Trust, as applicable, enforceable against the Company and the Trust, as applicable, in accordance with its terms, except (i) as such enforcement may be limited by bankruptcy, insolvency, reorganization, receivership, moratorium, fraudulent transfer or similar laws now or hereinafter in effect relating to or affecting creditors' rights generally and by general principles of equity, including, without limitation, concepts of reasonableness, materiality, good faith and fair dealing, or as may be provided in the Original Remarketing Agreement (ii) that the remedies of specific performance and injunctive and other forms of equitable relief are subject to general equitable principles, whether such enforcement is sought at law or in equity, (iii) that such enforcement may be subject to the discretion of the court before which any proceedings therefore may be brought and (iv) with respect to the rights of indemnification and contribution under this Agreement and the Remarketing Agreement, which enforcement thereof may be limited by federal or state securities laws or the policies underlying such laws (such exceptions, collectively, the "Standard Qualifications"). Each of the Transaction Agreements conforms in all material respects to the description thereof contained in the Prospectus. The Indenture, the Trust Agreement and the Guarantee Agreement shall have been qualified under the Trust Indenture Act; and the Indenture, the Trust Agreement and the Guarantee Agreement conform in all material respects to the requirements of the Trust Indenture Act. + +(ff) Each of the Company and the Trust has all requisite corporate or trust power and authority, as applicable, to cause the Remarketing to occur and to perform its obligations thereunder. + +(gg) The Preferred Securities have been duly authorized, executed and delivered by the Trust for issuance and sale pursuant to the Underwriting Agreement, the Unit Documents and the Trust Agreement and, assuming the Preferred Securities have been duly issued, authenticated and delivered pursuant to the provisions of the Unit Documents and the Trust Agreement against payment of the consideration thereof in accordance with this Agreement, the Preferred Securities are duly and validly issued, fully paid and nonassessable interests in the Trust. + +15 + + + + + + + +(hh) The Debentures have been duly authorized for issuance and sale by the Company pursuant to the Underwriting Agreement and the Indenture and, assuming the Debentures have been duly issued, authenticated and delivered pursuant to the provisions of the Indenture, against payment of the consideration therefor in accordance with this Agreement, the Debentures are valid and binding obligations of the Company, enforceable against the Company and entitled to the benefits of the Indenture, except for the Standard Qualifications. + +(ii) Neither the Company, nor to its knowledge, any of its Affiliates (as defined in Regulation C of the Securities Act, an "Affiliate"), has taken or will take, directly or indirectly, any action designed to cause or result in, or which has constituted or which might reasonably be expected to constitute, the stabilization or manipulation of the price of the Securities to facilitate the sale or resale of such securities. + +(jj) No event has occurred nor has any circumstance arisen which, had the Securities been issued on the date hereof, would constitute a default or an event of default under the Indenture, the Trust Agreement or the Guarantee Agreement. + +(kk) Each certificate signed by any officer of the Company and delivered to the Remarketing Agent or counsel for the Remarketing Agent shall be deemed to be a representation and warranty by the Company to the Remarketing Agent as to the matters covered thereby. + +(ll) Each of the Administrative Trustees is either an officer or employee of the Company or one of its subsidiaries and has been duly authorized by the Company or such subsidiary to serve in such capacity and to execute and deliver the Trust Agreement. + +(mm) As of the date of this Agreement, no event has occurred nor has any circumstance arisen which, had the Debentures been issued on such date, would constitute a default or an Event of Default (as such term is defined in the Indenture). + +Section 3. [Reserved.] + +Section 4. Fees and Expenses. (a) If there has been a successful Remarketing, the Company shall pay to the Remarketing Agent for the performance of its services as Remarketing Agent hereunder on the Remarketing Settlement Date, by wire transfer to an account designated by the Remarketing Agent, a fee in an amount equal to 25 basis points (0.25%) of the Accreted Value of the Remarketed Securities. + +(b) The Company agrees to pay: + +(i) the costs incident to the preparation and printing of the Prospectus and any amendments or supplements thereto; + +(ii) the costs of distributing the Prospectus and any amendments or supplements thereto; + +16 + + + + + + + +(iii) the fees and expenses of qualifying the Remarketing Securities under the securities laws of the several jurisdictions as provided in Section 5(b) and of preparing and distributing a Blue Sky Memorandum (including related fees and expenses of counsel to the Remarketing Agent); and + +(iv) all other costs and expenses incident to the performance of the obligations of the Issuers hereunder. + +The Trust shall not be liable for any fees and expenses in this Section. + +Section 5. Further Agreements of the Company. The Company agrees to use its reasonable best efforts: + +(a) To furnish promptly to the Remarketing Agent and to counsel to the Remarketing Agent, copies of the Prospectus (and all amendments and supplements thereto) in each case as soon as available and in such quantities as the Remarketing Agent reasonably requests for internal use and for distribution to prospective purchasers. The Company will pay the expenses of printing and distributing to the Remarketing Agent all such documents. + +(b) To deliver promptly to the Remarketing Agent in New York City such number of the following documents as the Remarketing Agent shall request: + +(i) the Prospectus and any amended or supplemented Prospectus; and + +(ii) any document incorporated by reference in the Prospectus (excluding exhibits thereto); + +and, if the delivery of a prospectus is required at any time in connection with the Remarketing and if at such time any event shall have occurred as a result of which the Prospectus as then amended or supplemented would include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made when such Prospectus is delivered, not misleading, or if for any other reason it shall be necessary during such same period to amend or supplement the Prospectus or to file under the Exchange Act any document incorporated by reference in the Prospectus in order to comply with the Securities Act or the Exchange Act, to notify the Remarketing Agent and, upon its request, to file such document and to prepare and furnish without charge to the Remarketing Agent and to any dealer in securities as many copies as the Remarketing Agent may from time to time request of an amended or supplemented Prospectus which will correct such statement or omission or effect such compliance. + +(c) Promptly from time to time to take such action as the Remarketing Agent may reasonably request to qualify any of the Remarketing Securities for offering and sale under the securities laws of such jurisdictions within the United States as the Remarketing Agent may request (and such other jurisdictions as to which the Company and the Remarketing Agent mutually agree) and to comply with such laws so as to permit + +17 + + + + + + + +the continuance of sales and dealings therein in such jurisdictions for as long as may be necessary to complete the distribution of the Preferred Securities; provided that in connection therewith, neither the Company shall be required to qualify as a foreign corporation or to file a general consent to service of process in any jurisdiction. + +Section 6. Conditions to the Remarketing Agent's Obligations. The obligations of the Remarketing Agent hereunder are subject to the accuracy, on and as of the date when made, of the representations and warranties of the Issuers contained herein, to the performance by the Issuers of their respective obligations hereunder, and to each of the following additional terms and conditions: + +(a) The Remarketing Agent shall not have discovered and disclosed to the Company prior to on or prior to the Remarketing Settlement Date that, in the opinion of Simpson, Thacher & Bartlett, counsel to the Remarketing Agent, the Registration Statement or any amendment thereto, contained, as of the Commencement Date, an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading or that the Prospectus or any supplement thereto, contains and will contain, as of the date hereof and the Remarketing Settlement Date, an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. + +(b) All corporate proceedings and other legal matters incident to the authorization, form and validity of the Registration Statement, the Preliminary Prospectus, the Prospectus, the Transaction Agreements, the Unit Securities, the Remarketing of the Remarketing Securities and all other legal matters relating to the Remarketing of the Remarketing Securities and the transactions contemplated hereby and thereby shall be reasonably satisfactory in all material respects to counsel to the Remarketing Agent. + +(c) Bryan Cave LLP or other, special counsel to the Company, shall have furnished to the Remarketing Agent its written opinion, addressed to the Remarketing Agent and dated such Remarketing Settlement Date to the Remarketing Agent, in form and substance reasonably satisfactory to the Remarketing Agent, substantially to the effect set forth in Exhibit A. + +(d) William L. Hutton, Esq., Senior Vice President, General Counsel and Secretary of the Company, or other counsel to the Company shall have furnished to the Remarketing Agent his written opinion, addressed to the Remarketing Agent and dated such Remarketing Settlement Date, in form and substance reasonably satisfactory to the Remarketing Agent, substantially to the effect set forth in Exhibit B. + +(e) Richards Layton & Finger, P.A. shall have furnished to the Remarketing Agent its written opinion, as special Delaware counsel to the Trust, addressed to the Remarketing Agent and dated such Remarketing Settlement Date, in form and substance reasonably satisfactory to the Remarketing Agent, substantially to the effect set forth in Exhibit C. + +18 + + + + + + + +(f) [Reserved.] + +(g) Simpson Thacher & Bartlett LLP, shall have furnished to the Remarketing Agent its written opinion, as counsel to the Remarketing Agent, addressed to the Remarketing Agent and dated the Remarketing Settlement Date, in form and substance reasonably satisfactory to the Remarketing Agent. + +(h) By the Remarketing Date and the Remarketing Settlement Date, Deloitte & Touche shall have furnished to the Remarketing Agent its letters, in form and substance reasonably satisfactory to the Remarketing Agent, containing statements and information of the type customarily included in accountants' initial and bring-down "comfort letters" to remarketing agents with respect to the financial statements and certain financial information contained and incorporated by reference in the Registration Statement, the Time of Sale Prospectus and the Prospectus. + +(i) The Company shall have furnished to the Remarketing Agent a certificate, dated such Remarketing Settlement Date, of its President or any Executive or Senior Vice President and its principal financial or accounting officer stating, in the name of and in their capacity as officers of the Company, that: + +(i) The representations, warranties and agreements of the Company and the Trust in Section 1 are true and correct in all material respects as of the Remarketing Settlement Date; the Company and the Trust have complied with in all material respects with all of their agreements contained herein to be performed prior to or on the Remarketing Settlement Date; and the conditions set forth in Sections 6(k) have been fulfilled. + +(ii) (A) Neither the Company nor any of its subsidiaries has sustained since the date of the latest audited financial statements included or incorporated by reference in each of the Time of Sale Prospectus and the Prospectus any material loss or interference with its business from (I) any governmental or regulatory action, notice, order or decree of a regulatory authority or (II) fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court, in each case, otherwise than as set forth each of the Time of Sale Prospectus and the Prospectus; (B) since such date there has not been any material change in the capital stock, short-term debt or long-term debt of the Company or any of its subsidiaries or any material adverse change, or any development involving a prospective material adverse change, in or affecting the general affairs, management, financial position, stockholders' equity or results of operations of the Company and its subsidiaries taken as a whole, otherwise than as set forth or contemplated in each of the Time of Sale Prospectus and the Prospectus; and (C) the Company has not declared or paid any dividend on its capital stock, except for dividends declared in the ordinary course of business and consistent with past practice, otherwise than as set forth in each of the Time of Sale Prospectus and the Prospectus and, except as set forth or contemplated in each of the Time of Sale Prospectus and the Prospectus, neither the Company nor any of its subsidiaries has entered into any transaction or agreement (whether or + +19 + + + + + + + +not in the ordinary course of business) material to the Company and its subsidiaries taken as a whole. + +(iii) They have carefully examined the Registration Statement, the Time of Sale Prospectus and the Prospectus and, in their opinion (A) the Registration Statement, as of the Effective Date, did not include any untrue statement of a material fact and did not omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (B) the Time of Sale Prospectus, as of the Remarketing Date and as of the Remarketing Settlement Date, did not include any untrue statement of a material fact and did not omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, (C) the Prospectus, as of the date hereof and as of the Remarketing Settlement Date, did not include any untrue statement of a material fact and did not omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading and (D) since the Effective Date, no event has occurred which should have been set forth in a supplement or amendment to the Registration Statement, the Time of Sale Prospectus or the Prospectus. + +(iv) They have compared the Company's quarterly and annual data for the period ended December 31, 2010 (the "Earnings Statement") as set forth in the Company's current report on Form 8-K filed on February 15, 2011 and incorporated by reference in the Prospectus, and find the Earnings Statement to be in agreement with the Company's audited financials contained in the Company's annual report on Form 10-K for the year ended December 31, 2010. + +(j) From the Commencement Date until the Remarketing Settlement Date, neither the Company nor any of its subsidiaries (i) shall have sustained since the date of the latest audited financial statements included or incorporated by reference in the Time of Sale Prospectus any loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in each of the Time of Sale Prospectus and the Prospectus or (ii) since such date there shall not have been any change in the capital stock, short-term debt or long-term debt of the Company or any of its subsidiaries or any change, or any development involving a prospective change, in or affecting the general affairs, management, financial position, prospects, stockholders' equity or results of operations of the Company and its subsidiaries, otherwise than as set forth or contemplated in each of the Time of Sale Prospectus and the Prospectus, the effect of which, in any such case described in clause (i) or (ii), is, in the judgment of Barclays, so material and adverse as to make it impracticable or inadvisable to proceed with the offering or the delivery of the Unit Securities being delivered on such Remarketing Settlement Date on the terms and in the manner contemplated in Time of Sale Prospectus and the Prospectus. + +(k) Subsequent to the execution and delivery of this Agreement, (i) no downgrading shall have occurred in the rating accorded the Company's or any Significant Subsidiary's debt securities or financial strength by any "nationally recognized statistical rating + +20 + + + + + + + +organization", as that term is defined by the Commission for purposes of Rule 436(g)(2) of the Securities Act (except as contemplated by clause (ii)), (ii) no such organization shall have publicly announced or privately communicated to the Company or any Significant Subsidiary that it has under surveillance or review, with possible negative implications, its rating of any of the Company's or any Significant Subsidiary's debt securities or financial strength, other than any downgrade by Fitch that is consistent with its existing negative outlook and as set forth or contemplated in each of the Time of Sale Prospectus and the Prospectus, and (iii) the Remarketing Securities shall have continued to be rated (x) by Moody's, Investor Service, Inc., (y) by Standard & Poor's Corporate Ratings Services, and (x) by A.M. Best Company, Inc. + +(l) On or after the date hereof, there shall not have occurred any of the following: (i) a suspension or material limitation in trading in securities generally on the New York Stock Exchange; (ii) a suspension or material limitation in trading in the Company's securities on the New York Stock Exchange; (iii) a general moratorium on commercial banking activities declared by either federal or New York State authorities or a material disruption in commercial banking or securities settlement or clearance services in the United States; (iv) the outbreak or escalation of hostilities involving the United States or the declaration by the United States of a national emergency or war; or (v) the occurrence of any other calamity or crisis or any change in financial, political or economic conditions in the United States or elsewhere, if the effect of any such event specified in clause (iv) or (v) in the judgment of Barclays makes it impracticable or inadvisable to proceed with the public offering or delivery of the Remarketing Securities being delivered on such Remarketing Settlement Date on the terms and in the manner contemplated in the Time of Sale Prospectus and the Prospectus. + +(m) By the Remarketing Date, the Company will have filed with the Securities and Exchange Commission its annual report on Form 10-K for the year ended December 31, 2010. + +All opinions, letters, evidence and certificates mentioned above or elsewhere in this Agreement shall be deemed to be in compliance with the provisions hereof only if they are in form and substance reasonably satisfactory to counsel to the Remarketing Agent. No opinion shall state that it is to be governed or qualified by, or that it is otherwise subject to, any treatise, written policy or other document relating to legal opinions, including, without limitation, the Legal Opinion Accord of the ABA Section of Business Law (1991). All opinions (other than the opinion referred to in (g) above) shall state that they may be relied upon by Simpson Thacher & Bartlett LLP as to matters of law (other than New York and federal law). + +Section 7. Indemnification and Contribution. (a) The Company shall indemnify and hold harmless the Remarketing Agent, its officers and employees and each person, if any, who controls the Remarketing Agent within the meaning of the Securities Act, from and against any loss, claim, damage or liability, joint or several, or any action in respect thereof (including, but not limited to, any loss, claim, damage, liability or action relating to purchases and sales of the Remarketing Securities), to which the Remarketing Agent or that officer, employee or controlling person may become subject, under + +21 + + + + + + + +the Securities Act or otherwise, insofar as such loss, claim, damage, liability or action arises out of, or is based upon: + +(i) any untrue statement or alleged untrue statement of a material fact contained in any (A) the Registration Statement, the Time of Sale Prospectus, any free writing prospectus that the Company has filed or is required to file with the Commission pursuant to Rule 433(d) of the Securities Act, the Prospectus or in any amendment or supplement thereto, or (B) any blue sky application or other document prepared or executed by the Company or the Trust (or based upon any written information furnished by the Company or the Trust) filed in any jurisdiction specifically for the purpose of qualifying any or all of the Remarketing Securities under the securities laws of any state or other jurisdiction (such application, document or information being hereinafter called a "Blue Sky Application"); + +(ii) the omission or alleged omission to state in Registration Statement, the Time of Sale Prospectus, any free writing prospectus that the Company has filed or is required to file with the Commission pursuant to Rule 433(d) of the Securities Act, the Prospectus or in any amendment or supplement thereto, or in any Blue Sky Application, any material fact required to be stated therein or necessary to make the statements therein (and with respect to the Time of Sale Prospectus, the Prospectus or any such issuer free writing prospectus, in the light of the circumstances under which such statements are made) not misleading; and + +(iii) any act or failure to act or any alleged act or failure to act by the Remarketing Agent in connection with, or relating in any manner to, the Remarketing, and which is included as part of or referred to in any loss, claim, damage, liability or action arising out of or based upon matters covered by clause (i) or (ii) above, provided that the Company shall not be liable under this clause (iii) to the extent that it is determined in a final judgment by a court of competent jurisdiction that such loss, claim, damage, liability or action resulted directly from any such acts or failure to act undertaken or omitted to be taken by the Remarketing Agent through its gross negligence or willful misconduct; + +and shall reimburse the Remarketing Agent and each such officer, employee or controlling person promptly upon demand for any legal or other expenses reasonably incurred by the Remarketing Agent or that officer, employee or controlling person in connection with investigating or defending or preparing to defend against any such loss, claim, damage, liability or action as such expenses are incurred; provided, however, that the Company shall not be liable in any such case to the extent that any such loss, claim, damage, liability or action arises out of, or is based upon, any untrue statement or alleged untrue statement or omission or alleged omission made in any Preliminary Prospectus, the Registration Statement, the Time of Sale Prospectus, any free writing prospectus that the Company has filed or is required to file with the Commission pursuant to Rule 433 (d) of the Securities Act, or the Prospectus or in any such amendment or supplement, in reliance upon and in conformity with the written information concerning the Remarketing Agent furnished to the Issuers through the Representatives by or on behalf of the Remarketing Agent expressly for inclusion therein (which consists of the + +22 + + + + + + + +information specified in Section 2(c)). The foregoing indemnity agreement is in addition to any liability which the Company may otherwise have to the Remarketing Agent or to any officer, employee or controlling person of the Remarketing Agent. + +(b) The Remarketing Agent shall indemnify and hold harmless the Company, its officers, and employees and each of its directors, the Trust and each Trustee and each person, if any, who controls any of the Issuers within the meaning of the Securities Act, from and against any loss, claim, damage or liability, joint or several, or any action in respect thereof, to which the Company, any such director, officer or employee, the Trust or any such Trustee or any such controlling person may become subject, under the Securities Act or otherwise, insofar as such loss, claim, damage, liability or action arises out of, or is based upon: + +(i) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, the Time of Sale Prospectus, any free writing prospectus that the Company has filed or is required to file with the Commission pursuant to Rule 433(d) of the Securities Act, or the Prospectus or in any amendment or supplement thereto, or in any Blue Sky Application; or + +(ii) the omission or alleged omission to state in the Registration Statement, the Time of Sale Prospectus, any free writing prospectus that the Company has filed or is required to file with the Commission pursuant to Rule 433(d) of the Securities Act, or Prospectus or in any amendment or supplement thereto, or in any Blue Sky Application, any material fact required to be stated therein or necessary to make the statements therein (and with respect to the Time of Sale Prospectus, the Prospectus or any such free writing prospectus, in the light of the circumstances under which such statements are made) not misleading; + +but in each case only to the extent that the untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with the written information furnished to the Issuers by or on behalf of the Remarketing Agent specifically for inclusion therein (which consists of the information specified in Section 2(c)), and shall reimburse the Company and any such director, officer or employee, the Trust or any such Trustee or such controlling person promptly upon demand for any legal or other expenses reasonably incurred by the Company or any such director, officer or employee, the Trust or any Trustee or any such controlling person in connection with investigating or defending or preparing to defend against any such loss, claim, damage, liability or action as such expenses are incurred. The foregoing indemnity agreement is in addition to any liability which the Remarketing Agent may otherwise have to the Company or any such director, officer or employee, the Trust or any such Trustee or any such controlling person. + +(c) Promptly after receipt by an indemnified party under this Section 7 of notice of any claim or the commencement of any action, the indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under this Section 7, notify the indemnifying party in writing of the claim or the commencement of that action; provided however, that the failure to notify the indemnifying party shall not relieve it from any liability which it may have under this Section 7 except to the extent it has been materially prejudiced by such failure and, provided further, that the failure to notify the indemnifying party shall not + +23 + + + + + + + +relieve it from any liability which it may have to an indemnified party otherwise than under this Section 7. If any such claim or action shall be brought against an indemnified party, and it shall notify the indemnifying party thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it wishes, jointly with any other similarly notified indemnifying party, to assume the defense thereof with counsel satisfactory to the indemnified party. After notice from the indemnifying party to the indemnified party of its election to assume the defense of such claim or action, the indemnifying party shall not be liable to the indemnified party under this Section 7 for any legal or other expenses subsequently incurred by the indemnified party in connection with the defense thereof other than reasonable costs of investigation; provided however, the Remarketing Agent shall have the right to employ separate counsel to represent the Remarketing Agent and its respective officers, employees and controlling persons who may be subject to liability arising out of any claim in respect of which indemnity may be sought by the Remarketing Agent against the Company under this Section 7 if, in the reasonable judgment of counsel to the Remarketing Agent it is advisable for the Remarketing Agent, its officers, employees and controlling persons to be jointly represented by separate counsel, due to the availability of one or more legal defenses to them which are different from or additional to those available to the indemnifying party, and in that event the reasonable fees and expenses of such separate counsel shall be paid by the Company; provided further, that the Company shall not be liable for the fees and expenses of more than one separate firm of attorneys (in addition to one local counsel in each relevant jurisdiction) at any time for all such indemnified parties. No indemnifying party shall: + +(i) without the prior written consent of the indemnified parties (which consent shall not be unreasonably withheld), settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified parties are actual or potential parties to such claim or action) unless such settlement, compromise or consent includes an unconditional release of each indemnified party from all liability arising out of such claim, action, suit or proceeding, or + +(ii) be liable for any settlement of any such action effected without its written consent (which consent shall not be unreasonably withheld), but if settled with its written consent or if there be a final judgment of the plaintiff in any such action, the indemnifying party agrees to indemnify and hold harmless any indemnified party from and against any loss or liability by reason of such settlement or judgment. + +(d) If the indemnification provided for in this Section 7 shall for any reason be unavailable to or insufficient to hold harmless an indemnified party under Section 7(a), 7(b) or 7(c) in respect of any loss, claim, damage or liability, or any action in respect thereof, referred to therein, other than to the extent that such indemnification is unavailable or insufficient due to a failure to provide prompt notice in accordance with Section 7(c), then each indemnifying party shall, in lieu of indemnifying such indemnified party, contribute to the amount paid or payable by such indemnified party as a result of such loss, claim, damage or liability, or action in respect thereof: + +24 + + + + + + + +(i) in such proportion as shall be appropriate to reflect the relative benefits received by the Issuers on the one hand and the Remarketing Agent on the other hand from the Remarketing; or + +(ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Issuers on the one hand and the Remarketing Agent on the other with respect to the statements or omissions or alleged statements or alleged omissions which resulted in such loss, claim, damage or liability (or action in respect thereof) as well as any other relevant equitable considerations. + +The relative benefits received by the Issuers, on the one hand, and the Remarketing Agent, on the other, with respect to such offering shall be deemed to be in the same proportion as the aggregate Accreted Value of the Remarketing Securities as of the end of day on the day next preceding the Remarketing Settlement Date less the fee paid to the Remarketing Agent pursuant to Section 4(a) and less the expenses paid by the Company pursuant to Section 4(b), on the one hand, and the total fees received by the Remarketing Agent pursuant to such Section 4(a), plus the expenses paid by the Company pursuant to Section 4(b), on the other hand, bear to such aggregate Accreted Value of the Remarketing Securities. The relative fault shall be determined by reference to whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Issuers on the one hand or the Remarketing Agent on the other hand, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Remarketing Agent agree that it would not be just and equitable if the amount of contributions pursuant to this Section 7(d) were to be determined by pro rata allocation or by any other method of allocation which does not take into account the equitable considerations referred to herein. The amount paid or payable by an indemnified party as a result of the loss, claim, damage or liability, or action in respect thereof, referred to above in this Section 7(d) shall be deemed to include, for purposes of this Section 7(d), any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 7(d), the Remarketing Agent shall not be required to contribute any amount in excess of the total price at which Remarketing Securities distributed in the Remarketing exceed the amount of any damages which the Remarketing Agent has otherwise paid or become liable to pay by reason of any untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. + +Section 8. [Reserved] + +Section 9. Dealing in the Remarketing Securities. The Remarketing Agent, when acting as a Remarketing Agent or in its individual or any other capacity, may, to the extent permitted by law, buy, sell, hold and deal in any of the Remarketing Securities. The Remarketing Agent may to the extent permitted by law exercise any vote or join in any action which any beneficial owner of Remarketing Securities + +25 + + + + + + + +may be entitled to exercise or take pursuant to the Trust Agreement or the Indenture with like effect as if it did not act in any capacity hereunder. The Remarketing Agent, in its individual capacity, either as principal or agent, may, to the extent permitted by law, also engage in or have an interest in any financial or other transaction with the Issuers as freely as if it did not act in any capacity hereunder. + +Section 10. Remarketing Agent's Performance; Duty of Care. The duties and obligations of the Remarketing Agent shall be determined solely by the express provisions of this Agreement, the Trust Agreement and the Indenture. No implied covenants or obligations of or against the Remarketing Agent shall be read into this Agreement, the Trust Agreement or the Indenture. In the absence of bad faith on the part of the Remarketing Agent, the Remarketing Agent may conclusively rely upon any document furnished to it, which purports to conform to the requirements of this Agreement, the Trust Agreement or the Indenture as to the truth of the statements expressed in any of such documents. The Remarketing Agent shall be protected in acting upon any document or communication reasonably believed by it to have been signed, presented or made by the proper party or parties. The Remarketing Agent, acting under this Agreement, shall incur no liability to the Company or to any holder of Remarketing Securities in its individual capacity or as Remarketing Agent for any action or failure to act, on its part in connection with a Remarketing or otherwise, except if such liability is judicially determined to have resulted from the gross negligence or willful misconduct on its part. The Remarketing Agent will be entitled to rely conclusively on any determination by the Calculation Agent under the Calculation Agency Agreement, dated as of December 18, 2001 between the Company and Reinsel & Company LLP, as Calculation Agent, of the Accreted Value or Discount relating to the Preferred Securities and Debentures, as applicable, and will incur no liability to the Company or any holder of Remarketing Securities relating to inaccuracies in calculating such Accreted Value or Discount. + +Section 11. Termination. This Agreement shall terminate (i) the Business Day immediately following the Remarketing Settlement Date, (ii) at 5:00 p.m., New York City time, on the last date of the Remarketing if the Remarketing is not successful or (iii) on the effective date of the resignation or removal of the Remarketing Agent and the appointment of a new Remarketing Agent. In addition, the obligations of the Remarketing Agent hereunder may be terminated by it by notice given to the Company prior to 5:00 p.m. (New York City time) on the date immediately preceding the Commencement Date if, prior to that time, any of the events described in Sections 6(i), (j) or (k) shall have occurred. + +If this Agreement is terminated pursuant to any of the provisions hereof, except as otherwise provided herein, the Company shall not be under any liability to the Remarketing Agent and the Remarketing Agent shall not be under any liability to the Company, except that: + +(x) if this Agreement is terminated by the Remarketing Agent because of any failure or refusal on the part of the Company to comply with the terms or to fulfill any of the conditions of this Agreement, the Company will reimburse the Remarketing Agent + +26 + + + + + + + +for all of its out-of-pocket expenses (including the fees and disbursements of its counsel) reasonably incurred by it; and + +(y) if the Remarketing Agent failed or refused to perform its obligations hereunder, without some reason sufficient hereunder to justify the cancellation or termination of its obligations hereunder, the Remarketing Agent shall not be relieved of liability to the Company for damages occasioned by its default and shall not be entitled to be reimbursed for any expense. + +Section 12. Notices, etc. + +Notices given pursuant to any provision of this Agreement shall be given in writing and shall be addressed as follows: + +(a) if to the Remarketing Agent, to Barclays Capital Inc., 745 Seventh Avenue, New York, New York 10019, Attention: Syndicate Registration (Fax No.: 646-834-8133); + +with a copy to Simpson Thacher & Bartlett, 425 Lexington Avenue, New York, New York 10017, Attention: Gary I. Horowitz, Esq. (Fax No.: 212-455- 2502).; and + +(b) if to the Company or to the Trust, to 1370 Timberlake Manor Parkway, Chesterfield, Missouri 63017, Attention: Jack B. Lay, Executive Vice President and Chief Financial Officer (Fax No.: 636-736-7839), with a copy to William L. Hutton, Esq., Senior Vice President General Counsel and Secretary, at the same address (Fax No.: 636-736-7739); and + +with a copy to Bryan Cave LLP, One Metropolitan Square, 211 North Broadway, Suite 3600, St. Louis, Missouri 63102, Attention: R. Randall Wang, Esq. (Fax No.: 314-552-8149); + +or in any case to such other address as the person to be notified may have requested in writing. Any such statements, requests, notices or agreements shall take effect at the time of receipt thereof. + +Section 13. Persons Entitled to Benefit of Agreement. This Agreement shall inure to the benefit of and be binding upon the Remarketing Agent, the Company, the Trust and their respective successors. This Agreement and the terms and provisions hereof are for the sole benefit of only those persons, except that (A) the representations, warranties, indemnities and agreements of the Issuers contained in this Agreement shall also be deemed to be for the benefit of the officers, directors and employees of the Remarketing Agent and the person or persons, if any, who control the Remarketing Agent within the meaning of Section 15 of the Securities Act; and (B) any indemnity agreement of the Remarketing Agent contained in this Agreement shall be deemed to be for the benefit of directors, trustees, officers and employees of the Company, and the Trust, and any person controlling the Company or the Trust within the meaning of Section 15 of the Securities Act. Nothing contained in this Agreement is intended or shall be construed to give any person, other than the persons referred to in this Section 13, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision contained herein. + +27 + + + + + + + +Section 14. Survival. The respective indemnities, representations, warranties and agreements of the Issuers and the Remarketing Agent contained in this Agreement or made by or on behalf of them, respectively, pursuant to this Agreement, shall survive the Remarketing and shall remain in full force and effect, regardless of any termination or cancellation of this Agreement or any investigation made by or on behalf of any of them or any person controlling any of them. + +Section 15. Definition of the term "Business Day". For purposes of this Agreement, "business day" means any day on which the New York Stock Exchange is open for trading. + +Section 16. Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York. + +Section 17. Counterparts. This Agreement may be executed in one or more counterparts and, if executed in more than one counterpart, the executed counterparts shall each be deemed to be an original but all such counterparts shall together constitute one and the same instrument. + +Section 18. Headings; Interpretation. The headings herein are inserted for convenience of reference only and are not intended to be part of, or to affect the meaning or interpretation of, this Agreement. Any reference herein to an agreement entered into in connection with the issuance of securities contemplated therein as of the date hereof shall mean such agreement as it may be amended, modified or supplemented in accordance with its terms. + +Section 19. Amendment; Intention of Parties. This Agreement may be amended by any written instrument (including by an amendment and restatement hereof) at any time after the date hereof by the parties hereto. + +The Company acknowledges and agrees that the Remarketing Agent is acting solely in the capacity of an arm's length contractual counterparty to the Company with respect to the Remarketing contemplated hereby (including in connection with determining the terms of the Remarketing) and not as a financial advisor or a fiduciary to, or an agent of, the Company or any other person. Additionally, the Remarketing Agent is not advising the Company or any other person as to any legal, tax, investment, accounting or regulatory matters in any jurisdiction. The Company shall consult with its own advisors concerning such matters and shall be responsible for making its own independent investigation and appraisal of the transactions contemplated hereby, and the Remarketing Agent shall have no responsibility or liability to the Company with respect thereto. Any review by the Remarketing Agent of the Company, the transactions + +28 + + + + + + + +contemplated hereby or other matters relating to such transactions will be performed solely for the benefit of the Remarketing Agent and shall not be on behalf of the Company. + +[The rest of this page has been left blank intentionally; the signature page follows.] + +29 + + + + + + + +If the foregoing correctly sets forth the agreement among the Company, the Trust and the Remarketing Agent, please indicate your acceptance in the space provided for that purpose below. + +30 + + Very truly yours, REINSURANCE GROUP OF AMERICA, INCORPORATED + + + + By:/s/ Todd C. Larson Name:Todd C. Larson Title: EVP, Corporate Finance &Treasurer RGA CAPITAL TRUST I By:/s/ Todd C. Larson Name:Todd C. Larson Title: Administrative Trustee BARCLAYS CAPITAL INC. By:/s/ Gary Antenberg Authorized Representative + + + + + + + +SCHEDULE 1 + +Issuer Free Writing Prospectus dated March [1], 2011 Filed pursuant to Rule 433(d) Relating to Preliminary Prospectus Supplement dated February [16], 2011 Registration Statement Nos. 333-172296 and 333-172296-01 + +Term Sheet Remarketing Preferred Securities of RGA Capital Trust I Issuer: RGA Capital Trust 1 Securities Remarketed: $___ Remarketed Preferred Securities Maturity Date: June [5], 2011 Pricing Date: March [1], 2011 Settlement Date: March [4], 2010 Distribution Rate: ___% per annum Distribution Dates: March 15, 2011 for the period from the settlement date to and including March 14, 2011 and June 6, 2011 for the period from March 15, 2011 to and including June 4, 2011. Security Ratings (Expected)*: ___(Moody's) / ___(S&P) / ___(A.M. Best) Guarantee: Reinsurance Group of America, Incorporated has guaranteed payment of distributions to the extent described in the prospectus supplement and prospectus Deferral of Distributions: None CUSIP: 74956T 20 4 Remarketing Agent: Barclays Capital Inc. + + + +* An explanation of the significance of ratings may be obtained from the rating agencies. Generally, rating agencies base their ratings on such material and information, and such of their own investigations, studies and assumptions, as they deem appropriate. The rating of the notes should be evaluated independently from similar ratings of other securities. A credit rating of a security is not a recommendation to buy, sell or hold securities and may be subject to review, revision, suspension, reduction or withdrawal at any time. by the assigning rating agency + + + + + + + +The Issuers (Reinsurance Group of America, Incorporated and RGA Capital Trust I) have filed a registration statement, including a prospectus, which consists of a preliminary prospectus supplement, dated February 16, 2011 and an attached prospectus dated February 15, 2011, with the Securities and Exchange Commission for the remarketing to which this communication relates. Before you invest, you should read the prospectus in that registration statement, the prospectus supplement and other documents the Issuers have filed with the SEC for more complete information about the Issuers and this remarketing. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the Issuers or the Remarketing Agent will arrange to send you the prospectus if you request by calling Barclays Capital toll free at 1-888-603-5847. + +Any disclaimer or other notice that may appear below is not applicable to this communication and should be disregarded. Such disclaimer or notice was automatically generated as a result of this communication being sent by Bloomberg or another email system. + +2 + + + + + + + +SCHEDULE 2 + +SUBSIDIARIES OF REINSURANCE GROUP OF AMERICA, INCORPORATED + +Manor Reinsurance, Ltd., Barbados corporation owned by RGA Reinsurance Company Parkway Reinsurance Company, Missouri corporation Reinsurance Company of Missouri, Incorporated, Missouri corporation RGA Americas Reinsurance Company, Ltd., Barbados corporation RGA Atlantic Reinsurance Company, Ltd., Barbados corporation RGA Australian Holdings Pty, Limited, Australian corporation RGA Capital Limited, United Kingdom corporation RGA Capital Trust I, Delaware statutory business trust RGA Financial Group, L.L.C. — 55% owned by RGA Reinsurance Company (Barbados) Ltd. and 45% owned by Reinsurance Group of America, Incorporated RGA Global Reinsurance Company, Ltd., Bermuda corporation RGA Holdings Limited, United Kingdom corporation RGA International Corporation (Nova Scotia ULC) RGA International Division Sydney Office Pty. Ltd, Australian corporation RGA International Reinsurance Company Limited, Ireland corporation RGA International Services Pty Ltd., Australian corporation RGA Life Reinsurance Company of Canada, Federal corporation RGA Reinsurance (UK) Limited, United Kingdom corporation RGA Reinsurance Company (Barbados) Ltd., Barbados corporation RGA Reinsurance Company of Australia Limited, Australian corporation RGA Reinsurance Company of South Africa, Limited, South African corporation RGA Reinsurance Company, Missouri corporation RGA Services (Singapore) Pte Ltd., a Singapore corporation RGA Services India Private Limited, Indian corporation RGA South African Holdings (Pty) Limited, South African corporation RGA Technology Partners, Inc., Missouri corporation RGA UK Services Limited (formerly RGA Managing Agency Limited, United Kingdom corporation) RGA Worldwide Reinsurance Company, Ltd., Barbados corporation Rockwood Reinsurance Company, a Missouri corporation Timberlake Financial, L.L.C., Delaware corporation Timberlake Reinsurance Company II, South Carolina corporation + + + + + + + +SCHEDULE 3 + +JURISDICTIONS OF FOREIGN QUALIFICATION + +RGA Reinsurance Company: + +Alabama + +California + +Colorado + +Florida + +Virginia + +RGA Life Reinsurance Company of Canada: + +British Columbia \ No newline at end of file diff --git a/full_contract_txt/RemarkHoldingsInc_20081114_10-Q_EX-10.24_2895649_EX-10.24_Content License Agreement.txt b/full_contract_txt/RemarkHoldingsInc_20081114_10-Q_EX-10.24_2895649_EX-10.24_Content License Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..a3efa9fe5c47eff9c5fd0b5c89a659be8f8ed415 --- /dev/null +++ b/full_contract_txt/RemarkHoldingsInc_20081114_10-Q_EX-10.24_2895649_EX-10.24_Content License Agreement.txt @@ -0,0 +1,279 @@ +Exhibit 10.24 *Portions of this exhibit marked [*] are requested to be treated confidentially. CONTENT LICENSE AGREEMENT This CONTENT LICENSE AGREEMENT (the "Agreement") is entered into and effective September 17, 2008 (the "Effective Date"), by and between World Book, Inc. ("World Book"), a Delaware corporation with offices at 233 North Michigan Avenue, Suite 2000, Chicago, IL 60601, and HSW International, Inc. ("HSWI"), a Delaware corporation with offices at One Capital City Plaza, 3350 Peachtree Road, Suite 1600, Atlanta, Georgia 30326. WHEREAS, World Book owns or licenses certain articles and other materials including, without limitation, the Reference Content and Images content. WHEREAS, HSWI desires to Display certain Content on the HSWI Websites and World Book desires to license the Content for this use in accordance with the terms and conditions set forth herein. NOW, THEREFORE, in consideration of the mutual promises and covenants set forth below, the parties hereto agree as follows: 1. DEFINITIONS. Capitalized terms not otherwise defined herein shall have the meanings specified below. 1.1 "Acquisition" is defined in Section 11.8 hereof. 1.2 "Payments/Advances" is defined in Section 4.1(ii) hereof. 1.3 "Affiliate" means any distributor or franchisee of HSWI or any company or other entity worldwide, including without limitation corporations, partnerships, joint ventures, and limited liability companies in which HSWI directly or indirectly holds at least a 19% ownership, equity, control or financial interest and which HSWI intends to enjoy any of HSWI's rights hereunder. A list of Affiliates as of the Effective Date is attached hereto as Attachment A. Attachment A may be modified from time to time upon notice by HSWI to reflect a revised list of Affiliates and each modified Attachment A shall be deemed incorporated herein by reference. 1.4 "Affinity" means the arrangement of Reference Content and Images into articles about a variety of subjects as agreed by HSWI and World Book in accordance with this Agreement and identified in detail in Schedule A. 1.5 "Article" is defined in Section 2.2(i) hereof. 1.6 "Buy-Out Fee" is defined in Section 4.2 hereof. 1.7 "Competitors" is defined in Section 11.8 hereof. 1.8 "Competitors II" is defined in Section 2.1(ii) hereof. + +Source: REMARK HOLDINGS, INC., 10-Q, 11/14/2008 + + + + + +1.9 "Confidential Information" means any and all trade secrets, proprietary or confidential information of either party and includes, without limitation: (a) any information, software, material, data or business, financial, operational, customer, vendor, and other information disclosed by one party to the other, (b) the terms of this Agreement, and/or (c) the fact of the existence of this Agreement except as specifically permitted in Section 7. Confidential Information will not include information that the receiving party can prove: (w) was already in such party's possession prior to receipt; (x) was independently developed by such party; (y) was obtained from a third party who had the right to disclose such information to such party, and/or (z) was or became generally available to the public other than as a result of disclosure by such party. 1.10 "Content" means, collectively: (a) the Reference Content; (b) Translated Content; (c) any updates to any of the foregoing provided by World Book; and (d) World Book Derivatives. The term "Content" shall not include any HSWI Modifications. 1.11 "Delivery Period" means the following: (i) July 1, 2008 - December 30th, 2009 1.12 "Display" means to use, publicly display, publicly perform, provide a link to, provide the ability to download and/or print and otherwise make available on or through web sites. 1.13 "Effective Date" is defined in the preamble of this Agreement. 1.14 "Encyclopedia" means a tab or section of a website: (a) branded with the word "encyclopedia"; or (b) that consists solely of multiple unrelated Affinities as provided by World Book hereunder. 1.15 "Excess Royalties" is defined in Section 4.1(iii) hereof. 1.16 "Exclusive" shall mean World Book shall have no further right to grant to third parties the same or any other licenses to the Content in the Open Free Web and itself retains no such rights or other licenses. 1.17 "Force Majeure Event" is defined in Section 11.1 hereof. 1.18 "HSWI Modifications" means modifications to the Content made by or on behalf of HSWI or its Affiliates in accordance with this Agreement, except to the extent the HSWI Modifications are World Book Derivatives. 1.19 "HSWI Websites" means, collectively, the Chinese language website found at bowenwang.com.cn, and all other websites (be they Chinese language or non-Chinese language) owned or controlled by HSWI or its Affiliates whether presently existing or later developed, and all successor websites to any of the foregoing websites + +Source: REMARK HOLDINGS, INC., 10-Q, 11/14/2008 + + + + + +1.20 "Images" means illustrative materials, including but not limited to charts, graphs, photographs, tables and renderings wholly owned by World Book and licensed to HSWI. 1.21 "Intellectual Property Rights" means any and all rights, titles and interests, whether foreign or domestic, in and to any and all trade secrets, patents, copyrights, service marks, trademarks, know-how, or similar intellectual property rights, as well as any and all moral rights, rights of droit moral, rights of privacy, publicity and similar rights of any type under the laws or regulations of any governmental, regulatory, or judicial authority, foreign or domestic. 1.22 "Net Revenue" means gross revenue less costs not to exceed [*] percent ([*]%) of such gross revenue, including reasonable third-party agency/ third-party advertising sales commissions and rebates and serving, bad debts and applicable taxes. 1.23 "Open Free Web" means all websites (i) through which content can be indexed by Google and/or other consumer search engines; (ii) through which content is openly accessible by the public free of charge, and/or (iii) that do not charge a subscription fee or other fee for access to the content of the website. 1.24 "Reference Content" means content created from various World Book digital databases, print products, outside reference sources or materials acquired by World Book and which shall be provided in simplified Chinese characters and shall consist of sixteen million (16,000,000) to [*] ([*]) Chinese characters. 1.25 "Royalties" means fees payable by HSWI to World Book and calculated on the basis set forth in Section 4.1 hereof. 1.26 "Significant Breach" means an uncured breach (pursuant to the cure provisions of Section 6.2(i)) by HSWI of one or more of the following: (i) HSWI brands the Affinities with the word "Encyclopedia" and/or Displays the Affinities or the underlying Reference Content and/or Images as an Encyclopedia in breach of Section 2.2(iii); (ii) HSWI uses or Displays the World Book Brand to promote the Content in violation of Section 7.4; (iii) HSWI assigns this Agreement to a Competitor (as defined in Section 11.8) of World Book in violation of Section 11.8; and/or (iv) HSWI fails to make payments as required by Section 4. 1.27 "Translated Content" means non-Chinese versions of the Affinities and/or the Reference Content, created pursuant to Section 2.3. [*] Confidential treatment requested; certain information omitted and filed separately with the SEC. + +Source: REMARK HOLDINGS, INC., 10-Q, 11/14/2008 + + + + + + 1.28 "Updating Services" means that upon World Book's update to or maintenance of the World Book Online Reference Center or the Reference Content, World Book will provide notice, a reference to the affected Articles, and the actual content of the update to HSWI so that HSWI can update and maintain the factual data in the Affinities. Such services shall be of the scope and nature with which World Book updates and maintains its content in the normal course of its own updating and maintenance process. 1.29 "World Book Brand" is defined in Section 7.4 hereof. 1.30 "World Book Derivatives" means any modifications, updates or other derivative works to the Content based on other Content provided by World Book regardless of who performs such modifications, updates or other derivative works. 1.31 "World Book Online Reference Center" means World Book's online product found at www.worldbookonline.com or any successor URL thereto. 2. LICENSE GRANT. 2.1 License Grant and Restrictions. (i) License Grant. Subject to the terms and conditions set forth herein, World Book hereby grants to HSWI, a perpetual, irrevocable limited license to use, copy, store, archive, distribute, transmit, modify (subject to Section 2.1(iv)), and Display the Content, Images and Affinities in whole or in part, only on the HSWI Websites or in promotions in any media for the HSWI Websites. The license to each component of the Content, Images and Affinities shall be subject to the term and exclusivity provisions set forth in this Section 2. The license to each component of the Content, Images and Affinities shall be supplemented by any additional license rights in this Section 2, and in the event of any conflict with this Section 2.1 such other additional license rights in this Section 2 shall prevail. (ii) Right to Sublicense. World Book further grants HSWI the right to sub-license the Content, Images and Affinities to users of the HSWI Websites to view, to store, and to make reasonable copies of the Content, Images and Affinities to use such Content, Images and Affinities for non-commercial, private purposes, provided that HSWI sets forth the limited terms of such sublicense in writing in the HSWI Websites' terms and conditions. In addition, World Book grants HSWI the right to sub-license the Content for business development purposes, with no more than [*] ([*]%) of the Content being licensed to any single third party, and in limited, non-material usage in other mediums for promotional or public relations purposes. HSWI may not sublicense the Content, Images or Affinities to any paid-subscription website which is an aggregator of third-party content (for the avoidance of doubt, such shall not include the [*] Confidential treatment requested; certain information omitted and filed separately with the SEC. + +Source: REMARK HOLDINGS, INC., 10-Q, 11/14/2008 + + + + + + HSWI Websites). Notwithstanding anything to the contrary herein, attached as Attachment B is a list of companies (the "Competitors II") which are competitors with World Book and to whom sublicense may be made only with prior written consent of World Book, which World Book may withhold at its sole discretion. The Competitors II may be modified from time to time by notice to and approval of the other party, not to be unreasonably withheld. HSWI shall provide World Book on or before June 30th and December 31st of each year with a list of third parties to whom sublicense hereunder has been made during such semiannum. (iii) No Other Rights. Except as set forth herein, HSWI has no other right to sublicense the Content except with the advance written consent of World Book. World Book retains all rights not specifically granted herein. (iv) Restrictions. The Content and Images shall be available to Display on the HSWI Websites as one or more individual articles, via commercially available browsers using personal computers, mobile devices, kiosks, or other equipment. HSWI may modify the Content, including using excerpts, for purposes of exercising its rights under this Agreement, including without limitation, to fit the format and the look-and-feel of the HSWI Websites, for promotion of the Content or HSWI Websites, for allowing third parties to sponsor certain Content, and to include links in the Content to HSWI Websites or third party websites; provided, however, HSWI may not edit, modify, or create derivative works from the Content for purposes of changing the substantive information contained in the Content, except (i) as otherwise approved by World Book in writing; or (ii) as otherwise expressly provided in this Agreement. HSWI may not Display the Content or Images on any website which is pornographic. HSWI may not translate the Content provided by World Book hereunder except as set forth in Section 2.3 or for purposes of performing updates. (v) Third Party Service Provider Rights. HSWI may permit third party suppliers of services and facilities (including, without limitation, agents, consultants, host providers, data centers, outsource service providers, disaster backup and recovery service providers) to use the Content, Images and Affinities under the terms of this Agreement in support of HSWI exercising its rights under this Agreement. HSWI also may designate one or more third party suppliers of services as HSWI's agent for the administration of this Agreement and the receipt of services under this Agreement from World Book. (vi) Affiliate Rights. All rights granted to HSWI under this Agreement may be exercised by or through HSWI and/or its Affiliates. + +Source: REMARK HOLDINGS, INC., 10-Q, 11/14/2008 + + + + + + 2.2 Affinities. (i) Creation. World Book shall create and deliver the Affinities in the Delivery Period. The Affinities will be organized into stand-alone articles around specific topics (each, an "Article") according to the taxonomy set forth in Schedule A. Any given Affinity will consist of multiple Articles in the same subject area (i.e., history or life sciences). There shall be at least one Article for each of those topics identified in Schedule B. World Book shall create the Affinities based on Reference Content and other content owned or licensed by World Book, including without limitation, various World Book digital databases, print products, outside reference sources or materials acquired by World Book. World Book will make reasonable efforts to cross check the Reference Content against other World Book products for factual accuracy. World Book will create the Affinities according to the guidelines and instructions provided by HSWI from time to time, and agreed to by World Book whose consent shall not be unreasonably withheld, and according to the high quality standards for commercially published works, but in no event less than the standards of World Book for its own published works. If an Affinity does not meet the requirements set forth herein, World Book will promptly revise the Affinity to meet such. The total amount of material World Book makes available for all Affinities shall be no less than sixteen million (16,000,000) Chinese characters. Additionally, the Affinities shall collectively contain at least sixteen thousand (16,000) Articles written in simplified Chinese characters, with an average and median number of words per Article of no less than one thousand (1,000) simplified Chinese characters. (ii) Delivery. World Book will deliver at least [*] percent ([*]%) of the Articles in the Affinities on or before [*], and at least [*] percent ([*]%) on or before the [*]. World Book will deliver the Affinities according to the following schedule. Date for Delivery Affinities for Delivery a) [*] Prior to [*] b) [*] c) [*] a) [*] b) [*] Prior to [*] c) [*] d) [*] e) [*] f) [*] [*] Confidential treatment requested; certain information omitted and filed separately with the SEC. + +Source: REMARK HOLDINGS, INC., 10-Q, 11/14/2008 + + + + + +The format and media for the delivery of the Affinities, such as FTP or other mutually-agreeable method, and the XML schema and applicable metadata requirements are set forth in Schedule C. (iii) Scope of License for Affinity & Content Included in Affinity. Subject to the terms and conditions of this Agreement, World Book grants HSWI the right to use, copy, store, archive, distribute, transmit, modify, translate (subject to Section 2.3), and Display the Content that comprises the Affinities as part of the Affinities, and the Affinities themselves, in any manner and in any digital media (and to sublicense such rights to third parties), provided that HSWI does not resell all or license substantially all of the Content for a fee to other content publishers. The term of the license for the Content delivered to HSWI as part of the Affinities, and the Affinities themselves, shall be perpetual, Exclusive, and irrevocable. World Book shall have no right to allow any party other than HSWI, including World Book, to publish, distribute, duplicate, or otherwise use the Reference Content that comprises the Affinities on the Open Free Web for purposes of creating any materials that are the same or similar to the Affinities and published online or in any other free digital media. World Book shall have no right to use the Reference Content that comprises the Affinities on the Open Free Web except for purposes of performing its obligations to HSWI under this Agreement. HSWI may not brand the Affinities with the word "Encyclopedia." Notwithstanding anything to the contrary in this Agreement, the Affinities or the underlying Reference Content and/or Images may not be Displayed as an Encyclopedia. World Book shall not license to any third parties or otherwise use the Content as Affinities in any digital form during the term of the license. (iv) Scope of License for Images Included in Affinity. World Book grants HSWI the right to use, copy, store, archive, distribute, transmit, modify, translate (subject to Section 2.3), and Display the Images as part of the Affinity. The term of the license for the Images delivered to HSWI as part of the Affinity, shall be perpetual and irrevocable. [*] ([*]) of the Images shall be Exclusive for the Open Free Web. [*] Confidential treatment requested; certain information omitted and filed separately with the SEC. + +Source: REMARK HOLDINGS, INC., 10-Q, 11/14/2008 + + + + + +2.3 Translated Content. (i) Right to Create Translated Content. Where rights permit, HSWI shall have the right to translate the Affinities for Display on the Open Free Web on HSWI Websites. HSWI shall, promptly after creating such Translated Content, provide World Book with a copy of the Translated Content in a format and manner acceptable to the parties. HSWI shall advise World Book that it desires to translate the Affinities prior to commencing such translation and World Book shall notify HSWI if World Book does not hold the rights necessary to allow HSWI to translate any Articles or portions thereof. HSWI may not Display the Translated Content as an Encyclopedia, and may not translate any Affinity for which a same subject-matter Affinity has not been previously licensed by HowStuffWorks, Inc. Additionally, if HSWI translates any of the Affinities into English, HSWI's sole rights to publish such English Translated Content shall be as a translation on those foreign language HSWI Websites which are not intended for English-language audiences. Notwithstanding the foregoing, HSWI may not translate any Affinity into English for which a same subject Affinity has not been previously licensed by World Book to HowStuffWorks, Inc. (ii) Scope of License. The term of the license for Translated Content shall be for a term of [*] ([*]) years from the time such Translated Content is first Displayed on an HSWI Website. In addition, such license for Translated Content shall be Exclusive for Display on the Open Free Web. At the end of such [*] ([*]) year period, HSWI shall have the right to renew the Agreement under materially the same terms or shall have an option to purchase the Translated Content outright to the extent rights permit and to the extent the parties mutually agree to terms for such sale. 2.4 Non-Display. HSWI may, in its sole discretion, decide not to Display Content obtained from World Book. If HSWI elects in a written notice to World Book that HSWI will not Display any such Content, notwithstanding anything to the contrary herein, the license to such Content shall be non-Exclusive. 2.5 Exclusivity. Commencing on the Effective Date and continuing for eighteen (18) months, World Book shall work exclusively with HSWI to publish Chinese language Content for the Open Free Web and shall not itself, directly or indirectly, publish Chinese language Content for the Open Free Web. For purposes of clarity, and except as otherwise set forth herein, World Book maintains the right to continue to publish Content and Images for its paid-subscription websites and other existing or new partner paid-subscription websites, provided that such are not within the definition of the Open Free Web. Additionally commencing on the Effective Date and continuing for eighteen (18) months, World Book shall offer HSWI a right of first refusal to create any paid-subscription Chinese language websites, which do not exist as of the date hereof, using the Content on equal or better terms as agreed to between World Book and a third party. [*] Confidential treatment requested; certain information omitted and filed separately with the SEC. + +Source: REMARK HOLDINGS, INC., 10-Q, 11/14/2008 + + + + + + 2.6 Updating Services. World Book shall provide Updating Services to HSWI until the later of: (a) such time as World Book's cessation of providing Updating Services to HowStuffWorks, Inc. or its successor, but such Updating Services shall be only for the same Content under this Agreement for which World Book is obligated to provide Updating Services to HowStuffWorks, Inc. or its successor; (b) such time as the Royalties paid in a given year are less than $[*]; or (c) [*] years from the Effective Date. World Book shall provide the updates in the manner and form as set forth in Schedule D. HSWI acknowledges that the Updating Services will not be automated and may require review and editing by HSWI. Notwithstanding anything to the contrary, HSWI shall have the right to update the Content, Affinity and Images to correct errors or alleged errors (including, without limitation, errors of omission) in such or in response to third party claims related to the Content, Images or Affinity, and may use World Book content and data in connection with such updates. World Book shall provide the Updating Services in English, and HSWI may translate any such updates into Chinese only. Any authored content provided under the Updating Services, even when translated into Chinese by HSWI, shall be subject to the license herein for that Content which is being updated, and for the avoidance of doubt shall not be considered Translated Content. 3. INTELLECTUAL PROPERTY RIGHTS; OWNERSHIP AND LICENSES. 3.1 World Book's Ownership Rights. World Book shall own all right, title and interest, including all Intellectual Property Rights, in and to the Content and in all Intellectual Property Rights in the Content, including, without limitation, World Book Brands (as defined in Section 7.4) and any derivative works to any of the foregoing. HSWI shall have no proprietary interest in the Content, other than the license rights set forth herein. 3.2 HSWI's Ownership Rights. HSWI shall own all right, title and interest, including all Intellectual Property Rights, in and to (i) the HSWI Websites, their look and feel and the software code or web site infrastructure that it develops, licenses, or purchases to support Display of the Content; and (ii) the HSWI Modifications. 3.3 Documents. Each party agrees (without further compensation) to execute any applications, agreements and instruments and to do all other things reasonably requested by the other party, at the requesting party's expense (both during and after the term of this Agreement) in order to vest the rights provided in this Agreement. 4. PAYMENT. 4.1 Royalties. (i) Royalty Rates. HSWI shall pay to World Book Royalties calculated as a defined percentage of the Net Revenue received by HSWI from [*] Confidential treatment requested; certain information omitted and filed separately with the SEC. + +Source: REMARK HOLDINGS, INC., 10-Q, 11/14/2008 + + + + + + advertising generated directly from Content by web pages containing Content or any portion of the Content provided by World Book to HSWI hereunder. The Royalty rate shall be [*] percent ([*]%) on the Affinities and Reference Content; and [*] percent ([*]%) on Translated Content. (ii) Payments/Advances. During the applicable Contract Period, HSWI shall pay World Book non-refundable advances towards the Royalties in the amounts set forth below ( "Payments/Advances"): Due Date Amount [*] $[*] [*] [*] $[*] [*] $[*] [*] $[*] [*] $[*] [*] [*] $[*] [*] $[*] [*] $[*] TOTAL $[*] World Book will submit invoices to HSWI for the Payments/Advances at least [*] ([*]) days prior to the due date of such Payment/Advance, with the exception of the first payment which shall be due [*]. No Royalty payments will be due until the amount of the Royalties exceed the amount of the Payments/Advances described above for the development and delivery of the Affinities and Content licensed hereunder, and then Royalties will only be owed for any Royalties in excess of the amount of the Payments/Advances, as further detailed in the following Sub-Section. If, subsequent to the Effective Date and prior to the end of 2009, HowStuffWorks, Inc. enters into one or more new agreements or modifies an existing agreement with World Book to license content with guaranteed payment obligations in such new agreement or in such modification totaling at least [*] dollars ($[*]) in additional fees, then each of HSWI's [*], and [*], [*] shall be reduced from $[*] to $[*]. Nothing paid in Contract Period 1 pursuant to the [*], as amended shall be used to calculate guaranteed payment obligations hereunder. [*] Confidential treatment requested; certain information omitted and filed separately with the SEC. + +Source: REMARK HOLDINGS, INC., 10-Q, 11/14/2008 + + + + + + (iii) Calculation and Payment of Excess Royalties. Royalties for Content will be calculated based on the Royalty rates set forth in Subsection (i) and compared to the Payments/Advances paid by HSWI during the term of this Agreement. If such calculated Royalties exceed all Payments/Advances paid during the term of this Agreement ("Excess Royalties"), HSWI will pay such Excess Royalties within [*] ([*]) days after the end of the calendar year in which such Excess Royalties were earned. Additionally, within [*] ([*]) days after the end of each calendar year, HSWI will provide to World Book a report of its Royalty calculations. If Excess Royalties are earned before all Payments/Advances have been paid, the Excess Royalties will be deducted from future Payments/Advances. In the event that Royalties are [*] than Payments/Advances, [*]. By way of example, if the calculated Royalties for 2008 are $[*]. Royalty statements shall be final and accepted by the parties unless World Book has, in good faith, notified HSWI of the amount and specific reasons for the dispute within [*] ([*]) days from the date of the statement. 4.2 Buy-Out Option. HSWI shall have the right at any time following [*] to pay World Book a single fee (the "Buy-Out Fee"), the payment of which would eliminate HSWI's obligation to pay any further Excess Royalties. The Buy-Out Fee shall be the [*] of: a) the amount [*], or b) an amount equal to [*] times the calculated Royalties of the most recent calendar year. 4.3 Taxes. To the extent required, HSWI shall pay all sales, use or similar state or local taxes in connection with this Agreement, except for employment taxes or taxes related to World Book's income. 5. AUDIT. HSWI shall maintain complete and accurate records to support and document the Royalties owed under this Agreement in accordance with generally accepted accounting principles consistently applied and to document compliance with the terms of this Agreement. HSWI shall also provide reasonable assistance to World Book or its designated agent to conduct audits to confirm the payments hereunder. Any such audit will be conducted upon [*] ([*]) days notice and during regular business hours, and shall be at [*] expense, unless such audit reveals a discrepancy of more than [*] percent ([*]%) in the total applicable amount reported by HSWI, in which case [*] shall pay for, or reimburse [*] the cost of, such audit. Any such audit shall be conducted by an independent certified public accounting firm which is not engaged in performing other work for World Book or its affiliates; which agrees to enter into a confidentiality agreement with HSWI; and which is not compensated in any manner of contingency arrangements on the basis of its findings. HSWI further agrees that until the expiration of [*] ([*]) year after the termination of this Agreement, HSWI will make available upon written request to World Book or any of its duly authorized representatives, this Agreement and books, documents, and records of HSWI that are necessary to verify the nature and extent of the revenue derived by HSWI from advertising related to the Content hereunder. No more than [*] audit may be conducted in any [*] month period, unless the then-most-recent audit reveals a discrepancy of more than [*] percent ([*]%) in the total applicable amount reported by HSWI. [*] Confidential treatment requested; certain information omitted and filed separately with the SEC. + +Source: REMARK HOLDINGS, INC., 10-Q, 11/14/2008 + + + + + + 6. TERM, EXTENSION, AND TERMINATION. 6.1 Term. (i) Term of Agreement. This Agreement shall commence on the Effective Date and, except as set forth in Subsection (ii), continue in full force and effect through the Delivery Period. (ii) Term of Licenses. Notwithstanding Subsection (i), certain license grants for Content, Images and Affinities extend beyond the expiration or earlier termination of this Agreement as set forth herein. With respect to such Content, Images and Affinities, the terms and conditions of this Agreement shall continue to apply. 6.2 Termination for Cause or Bankruptcy. This Agreement may be terminated by a party in the event of: (i) any material default in, or material breach of, any of the material terms and conditions of this Agreement by the other party, which default continues in effect after the defaulting party has been provided with written notice of default and sixty (60) days to cure such default; (ii) the commencement of a voluntary case or other voluntary proceeding seeking liquidation, reorganization or other relief with respect to the other party of its debts under any bankruptcy, insolvency, or other similar law now or hereafter in effect, that authorizes the reorganization or liquidation of such other party or its debt or the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property; (iii) the other party's consent to any such relief or to the appointment of or taking possession by any such official in an involuntary case or other proceeding commenced against it; or (iv) the other party's making a general assignment for the benefit of creditors; or the other party's being adjudicated insolvent; or the other party taking any corporate action to authorize any of the foregoing. 6.3 Effect of Termination. Upon the expiration or termination of this Agreement, HSWI shall pay World Book all amounts due and owing up to the date of termination, within [*] ([*]) days after such expiration or termination. In addition, upon the expiration or termination of the applicable license, HSWI shall cease to Display the applicable Content that is not licensed under a perpetual license, return or destroy such Content within [*] ([*]) days after such expiration or termination at the direction of World Book, and, upon request by World Book, certify completion of the return or destruction in writing. There shall be no effect upon the applicable Content that is licensed under a perpetual license. [*] Confidential treatment requested; certain information omitted and filed separately with the SEC. + +Source: REMARK HOLDINGS, INC., 10-Q, 11/14/2008 + + + + + +Source: REMARK HOLDINGS, INC., 10-Q, 11/14/2008 + + + + + + 6.4 Remedies. The termination or expiration of this Agreement for any reason shall not affect either party's rights or obligations arising prior to the effective date of such termination. For purposes of clarification, upon a Significant Breach of this Agreement by HSWI which remains uncured, the rights to publicly use the World Book Brand as set forth in Section 7.4 may be revoked by World Book. Notwithstanding anything in this Agreement to the contrary, the rights and remedies of the parties as set forth in this Agreement are not exclusive and are in addition to any other rights and remedies available to it at law or in equity. 6.5 Equitable Relief. Each party acknowledges that its breach of certain provisions of this Agreement would cause irreparable injury to the other party for which monetary damages may not be an adequate remedy. Accordingly, each party will be entitled to seek injunctions and other equitable remedies in the event of such a breach or threatened breach by the other party, or to seek specific performance of any provision hereof. A party's right to seek equitable relief shall not limit in any manner such party's respective rights to seek other and/or additional remedies at law or in equity. 7. CONFIDENTIALITY. 7.1 Protection of Confidential Information. Solely for the purposes of the use and disclosure of Confidential Information, each of World Book and HSWI is defined to include such party's directors, officers, employees, legal counsel, and consultants, with a need to know, and who are advised by such party of the confidential nature of the information or who are required to execute a nondisclosure agreement with the confidentiality terms at least as restrictive in all material respects as set forth in this Agreement. Each party shall maintain all of the Confidential Information disclosed to it by the other party in strict confidence and will protect such information with the same degree of care that each party exercises with its own Confidential Information, but in no event less than a reasonable degree of care. Each party may use the Confidential Information disclosed to it by the other party only to perform its obligations under this Agreement. Except as provided in this Agreement, neither party shall use or disclose any Confidential Information disclosed to it by the other party without the express prior written consent of such disclosing party. Neither party shall decompile, disassemble, or reverse engineer any Confidential Information disclosed to such party by the other party, and any information derived in violation of such covenant shall automatically be deemed Confidential Information. All of the Confidential Information, and all copies, extracts, summaries and other reproductions thereof, shall be and remain the property of the respective disclosing party. Upon written request or upon the expiration of this Agreement, all Confidential Information (and all copies thereof) will be returned to the party disclosing such or destroyed, with written certification thereof, except that one archival copy of written material to be kept confidential and segregated from the parties' regular files may be retained by each party's legal counsel solely for purposes of verifying compliance with this Agreement. + +Source: REMARK HOLDINGS, INC., 10-Q, 11/14/2008 + + + + + + 7.2 Disclosures Required by Law. If a party is required to disclose Confidential Information received from the other party, by law or a governmental authority, including, without limitation, pursuant to a subpoena, court order, interrogatories, civil investigation demand, or other process, such Confidential Information may be disclosed, provided that the disclosing party, if permitted: (a) promptly notifies the other party of the disclosure requirement; (b) cooperates with the other party's efforts to resist or narrow the disclosure and to obtain an order or other reliable assurance that confidential treatment will be accorded Confidential Information; and (c) furnishes only Confidential Information that is legally compelled to be disclosed according to advice of its legal counsel. 7.3 Disclosures to Investors. HSWI may disclose the contents of this Agreement to promote investment to potential financial investors or institutions, provided that such parties are subject to a confidentiality agreement at least as restrictive in all material respects as the confidentiality terms in this Agreement. 7.4 Use of World Book Brand. Except as set forth herein, neither party shall issue any press releases or public statements concerning this Agreement or the subject matter herein without the other party's prior written agreement, except as required by law. World Book grants no right to HSWI for the use or Display of World Book's brands, logos, service marks, or other trade names or trademarks of World Book ("World Book Brand") in any manner, except as permitted in this Section. HSWI may not use the World Book Brand to promote the Content on any of the HSWI Websites to existing or potential users. HSWI may use World Book's name solely to promote advertising or investment to potential advertising clients or financial investors or institutions. Notwithstanding the foregoing, and subject to the terms and conditions of this Agreement, HSWI may identify the Content on the HSWI Websites and elsewhere as "From the editors of World Book, Inc.," in simplified Chinese language as set forth in Schedule E or such other credit or credits as the parties hereto may mutually agree in writing, except for any of that Content which has been modified without the approval of World Book. Additionally, World Book agrees to cooperate with HSWI's issuing a press release within one month of entering into this Agreement which identifies HSWI as receiving exclusive content created by World Book and includes relevant quotes from World Book executives. Any press releases issued by HSWI including the World Book Brand shall be previously approved in writing by World Book, which consent shall not be unreasonably withheld. 7.5 Required Disclosures. Notwithstanding the foregoing, World Book acknowledges that HSWI is a publicly listed company subject to various disclosure regulations. In connection with such, World Book acknowledges that HSWI may disclose in its regulatory filings, investor communications, and associated statements the World Book Brand and those aspects of this Agreement that HSWI reasonably finds are required to be disclosed by law or regulation. HSWI will use its commercially reasonable efforts to consult with World Book on any such legally required public disclosures of the World Book Brand and this Agreement. + +Source: REMARK HOLDINGS, INC., 10-Q, 11/14/2008 + + + + + + 7.6 The restrictions on use and disclosure of Confidential Information under this Section 7 shall remain in effect [*] ([*]) years following disclosure of the Confidential Information; provided, however, for trade secrets such restrictions shall continue for so long as such information is deemed a trade secret under applicable law. 8. REPRESENTATIONS AND WARRANTIES. 8.1 Mutual Representations. Each party represents and warrants to the other party that: (i) It is duly organized and validly existing under the laws of the jurisdiction of its organization or incorporation and, if relevant under such laws, in good standing; (ii) It has the corporate and/or other legal capacity, authority and power to execute, deliver, and perform its obligations under this Agreement and any other document relating hereto to which it is a party, and has taken all necessary action to authorize such execution, delivery and performance; (iii) Such execution, delivery and performance do not violate or conflict with any law applicable to it, any provision of its constitutional documents, any order or judgment of any court or other agency of government applicable to it or any of its assets or any contractual restriction binding on or affecting it or any of its assets; (iv) All governmental and other authorizations, approvals, consents, notices and filings that are required to have been obtained or submitted by it with respect to this Agreement and any other document relating hereto to which it is a party have been obtained or submitted and are in full force and effect and all conditions of any such authorizations, approvals, consents, notices and filings have been complied with; (v) Its obligations under this Agreement and any other document relating hereto or thereto to which it is a party constitute its legal, valid and binding obligations, enforceable in accordance with their respective terms; (vi) There is not pending or, to its knowledge, threatened against it any action, suit or proceeding at law or in equity or before any court, tribunal, governmental body, agency or official or any arbitrator that is likely to affect the legality, validity or enforceability against it of this Agreement or any other document relating hereto to which it is a party or its ability to perform its obligations under the same; [*] Confidential treatment requested; certain information omitted and filed separately with the SEC. + +Source: REMARK HOLDINGS, INC., 10-Q, 11/14/2008 + + + + + + (vii) There is not pending or, to its knowledge, threatened against it any action, suit or proceeding at law or in equity or before any court, tribunal, governmental body, agency or official or any arbitrator related to the violation of the Intellectual Property Rights of a third party related to the subject matter of this Agreement; and (viii) It is not relying upon any representations of the other party other than those expressly set forth in this Agreement or any other document relating hereto. 8.2 HSWI's Representations and Warranties. HSWI hereby represents and warrants that it has all applicable rights in and to the HSWI Websites and the HSWI Websites do not and will not infringe or misappropriate the Intellectual Property Rights of any third persons. 8.3 World Book's Representations and Warranties. World Book hereby represents and warrants that: (i) it has all applicable rights in and to the Content and the Content does not and will not infringe or misappropriate any Intellectual Property Rights of any third persons; (ii) it will perform all services in a professional, diligent, and workmanlike manner; (iii) the Content will be free from material errors or inaccuracies; (iv) the Content will comply with all laws and regulations of the People's Republic of China, including without limitation for distribution, publication and educational use as contemplated herein; and, (v) the Content as delivered by World Book is expressly approved by or within the applicable guidelines of the national government, any ministries, and provincial governments, as applicable, of the People's Republic of China for distribution, publication and education use as contemplated herein. In the event of a breach of the foregoing warranties, and without limitation to any other remedies of HSWI, World Book shall promptly remedy the breach at no additional cost or expense to HSWI. 8.4 Disclaimer. EXCEPT AS SET FORTH IN THIS AGREEMENT, NEITHER PARTY MAKES ANY OTHER REPRESENTATIONS OR WARRANTIES, INCLUDING, WITHOUT LIMITATION, AS TO THE ACCURACY OR COMPLETENESS OF THE CONTENT. TO THE FULL EXTENT ALLOWED BY APPLICABLE LAW, EACH PARTY DISCLAIMS ALL OTHER WARRANTIES, WHETHER EXPRESS, IMPLIED, STATUTORY, OR OTHERWISE INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR USE OR PURPOSE. + +Source: REMARK HOLDINGS, INC., 10-Q, 11/14/2008 + + + + + + 9. INDEMNIFICATION. 9.1 HSWI HSWI hereby agrees to defend, indemnify and hold harmless World Book and its officers, directors, agents, and employees from all costs, damages, liabilities and expenses (including reasonable attorneys fees) arising out of: (a) any third party claim or action alleging that any of the following infringe or misappropriate the Intellectual Property Rights of a third party: (i) the HSWI Websites or the HSWI trade dress utilized in the Display of the Content on the HSWI Websites; (ii) any Translated Content; or (iii) any HSWI Modifications and any World Book Derivatives independently created by or on behalf of HSWI; and/or (b) any third party claim or action arising out of HSWI's material breach of this Agreement; provided that (i) World Book notifies HSWI promptly in writing of any such threat, claim, and/or proceedings related thereto; (ii) HSWI is given the opportunity to assume sole control over the defense and all related settlement negotiations, except that World Book shall have sole authority over approval of any settlement that admits fault or liability on the part of World Book; and, (iii) World Book provides HSWI with all reasonably necessary assistance, information and authority to perform the foregoing at HSW's expense. Notwithstanding anything to the contrary, the indemnity under this Section shall not apply to the extent the Content provided by World Book, or any accurate translation, contributes or results in an infringement or misappropriation of the Intellectual Property Rights of a third party. 9.2 World Book. World Book hereby agrees to defend, indemnify and hold harmless HSWI, its Affiliates, and their officers, directors, agents, employees, advertisers, service providers, end users and related entities from all costs, damages, liabilities and expenses (including reasonable attorneys fees) arising out of: (a) any third party claim or action alleging that the Content, Affinities and Images (excluding any World Book Derivatives independently created by or on behalf of HSWI) in the manner delivered by World Book or as contemplated for HSWI's use hereunder infringes or misappropriates any Intellectual Property Rights of any third party; and/or (b) any third party claim or action arising out of World Book's material breach of this Agreement; provided that: (i) HSWI notifies World Book promptly in writing of any such threat, claim, and/or proceedings related thereto; (ii) World Book is given the opportunity to assume sole control over the defense and all related settlement negotiations, except that HSWI shall have sole authority over approval of any settlement that admits fault or liability on the part of HSWI; and, (iii) HSWI provides World Book with all reasonably necessary assistance, information and authority to perform the foregoing at World Book's expense. + +Source: REMARK HOLDINGS, INC., 10-Q, 11/14/2008 + + + + + + 10. LIMITATIONS OF LIABILITY. 10.1 EXCEPT FOR EITHER PARTY'S VIOLATION OF THE CONFIDENTIALITY OBLIGATIONS AND FOR EITHER PARTY'S INDEMNIFICATION OBLIGATIONS, NEITHER PARTY SHALL BE LIABLE UNDER ANY CONTRACT, NEGLIGENCE, STRICT LIABILITY, OR OTHER LEGAL OR EQUITABLE THEORY FOR ANY AMOUNTS IN EXCESS IN THE AGGREGATE OF THE AMOUNT OF THE FEES PAID OR PAYABLE UNDER THIS AGREEMENT. 10.2 EXCEPT FOR EITHER PARTY'S VIOLATION OF THE CONFIDENTIALITY OBLIGATIONS AND FOR EITHER PARTY'S INDEMNIFICATION OBLIGATIONS, IN NO EVENT WILL EITHER PARTY BE LIABLE FOR SPECIAL, INCIDENTAL, CONSEQUENTIAL, INDIRECT OR PUNITIVE DAMAGES, OR LOST PROFITS, REGARDLESS OF WHETHER SUCH LIABILITY IS BASED ON BREACH OF CONTRACT, TORT, STRICT LIABILITY, BREACH OF WARRANTIES, FAILURE OF ESSENTIAL PURPOSE OR OTHERWISE AND EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. 11. MISCELLANEOUS PROVISIONS. 11.1 Force Majeure. In the event that either party is unable to perform any of its obligations under this Agreement or to enjoy any of its benefits because of any event beyond the control of the affected party including, but not limited to, natural disaster, acts of God, actions or decrees of governmental bodies or failure of communication lines (a "Force Majeure Event"), the party who has been so affected shall promptly give written notice to the other party and shall use commercially reasonable efforts to resume performance. Upon receipt of such notice, all obligations under this Agreement shall be immediately suspended for the duration of such Force Majeure Event. 11.2 Notice. All notices, demands, requests or other communications required or permitted under this Agreement will be deemed given when (i) personally delivered; (ii) upon receipt after being sent by registered U.S. mail, return receipt requested; or (iii) upon receipt after being sent by commercial overnight carrier service with tracking capabilities to the address of the party set forth below, or such other address as such party last provided to the other party by written notice. World Book, Inc. 233 North Michigan Avenue Suite 2000 Chicago, IL 60601 Attn: Chief Financial Officer + +Source: REMARK HOLDINGS, INC., 10-Q, 11/14/2008 + + + + + + HSW International, Inc. One Capital City Plaza 3350 Peachtree Road, Suite 1600 Atlanta, Georgia 30326 Attn: Chief Executive Officer with a copy to: HSW International, Inc. One Capital City Plaza 3350 Peachtree Road, Suite 1600 Atlanta, Georgia 30326 Attn: General Counsel 11.3 Waiver. Failure to enforce any term of this Agreement at any time for any period shall not be construed as a waiver of such rights. No waiver shall be valid against any party hereto unless made in writing and signed by the party against whom enforcement of such waiver is sought and then only to the extent expressly specified therein. 11.4 Amendments. No changes or modifications to any provision of this Agreement shall be effective unless made in writing and signed by both parties. 11.5 Severability. In the event any one or more of the provisions of this Agreement shall for any reason be held to be invalid, illegal or unenforceable, the remaining provisions of this Agreement shall be unimpaired and the parties will substitute a new enforceable provision of like economic intent and effect. 11.6 Governing Law. This Agreement, the rights and obligations of the parties hereto, and any claims or disputes thereto, shall be governed by and construed in accordance with the laws of the State of New York without reference to conflict of law principles. Venue for any proceedings not subject to arbitration under this Agreement shall be in the state and federal courts located in New York, New York. 11.7 Arbitration. If any dispute arises under this Agreement that is not settled promptly in the ordinary course of business, the Parties shall seek to resolve any such dispute between them; first, by negotiating promptly with each other in face-to-face negotiations. Any controversy or claim arising out of or relating to the interpretation, enforcement or breach of this Agreement that cannot be resolved within fifteen (15) business days (or such period as the Parties shall otherwise agree) through face-to-face negotiations shall be resolved by binding arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association. Arbitration shall be by a single arbitrator mutually acceptable to the parties and experienced in the matters at issue and selected by the Parties in accordance with the Commercial Arbitration Rules of the American Arbitration Association. If the parties are unable to agree upon a single arbitrator, each party shall select an arbitrator and the two arbitrators shall select the third arbitrator. The arbitration shall only be held in New York, New York. The decision of the arbitrator shall be final and binding and may be enforced in any court having jurisdiction over the subject matter or either of the Parties, except that each party reserves all rights of appeal. The arbitrator(s) shall determine to what extent each of the Parties shall bear the costs and expenses incurred in connection with any such arbitration proceeding (including reasonable attorneys' fees and expenses) on the basis of the arbitrator's assessment of the relative merits of the Parties' positions. + +Source: REMARK HOLDINGS, INC., 10-Q, 11/14/2008 + + + + + + 11.8 Assignment. Except as set forth herein, the parties shall not have any right or ability to assign, transfer, or sublicense any obligations or benefit under this Agreement without the prior written consent of the other party, which shall not be unreasonably withheld, except that, upon written notice to the other party, a party (i) may assign and transfer this Agreement and its rights and obligations hereunder to any third party who succeeds to substantially all its business, stock, or assets related to this Agreement, including, without limitation, to a Competitor (as defined below) (an "Acquisition"); and (ii) may assign or transfer any rights to receive payments hereunder. Notwithstanding the foregoing, attached as Attachment C is a list of companies (the "Competitors") to whom assignment of this Agreement outside of an Acquisition may be made only with prior written consent of the other party, which the other party may withhold at its sole discretion. Such list of Competitors may be modified from time to time by notice to and approval of the other party, not to be unreasonably withheld. In the event of an assignment of this Agreement in connection with an Acquisition of HSWI by any party other than a Competitor, notwithstanding anything to the contrary herein, such acquiring party's license to the Content shall be expanded, to the extent the licenses are available, to include also such acquiring party's paid subscription site(s) (if any) so long as: (i) such acquiring party's paid subscription site(s) are not primarily marketed to the school and/or library market; and (ii) such Content is not provided to any Competitor or Competitor II; and (iii) the Royalties shall also be calculated as the applicable defined percentage of the Net Revenues received by HSWI from subscription fees generated on the paid-subscription websites where the Content is Displayed. In addition, in the event of an Acquisition of HSWI by a Competitor of World Book, in no event shall the Content be provided to such Competitor or to any Competitor II. Notwithstanding the foregoing, nothing in this Agreement shall be deemed to prevent an Acquisition of HSWI by any party, including without limitation a Competitor. 11.9 Additional Actions and Documents. Each of the parties hereto hereby agrees to take or cause to be taken such further actions, to execute, deliver and file or cause to be executed, delivered and filed such further documents, and will obtain such consents, as may be necessary or as may be reasonably requested in order to fully effectuate the purposes, terms and conditions of this Agreement. However, in no case will World Book be required to execute any lien UCC documentation for public filing. 11.10 Headings. Section headings contained in this Agreement are inserted for convenience or reference only, shall not in no way affect the interpretation of any of the provisions herein. 11.11 Independent Contractors. Notwithstanding any provision hereof, for purposes of this Agreement, each party shall be and act as an independent contractor and not as a partner, a joint venturer, or an agent of the other party, and shall not bind nor attempt to bind the other party in any way without prior written consent. 11.12 Survival. Sections 1, 2, 3, 4, 6.1(ii), 6.3, 6.4, 6.5, 7, 8, 9, 10 and 11 shall survive the expiration or termination of this Agreement for any reason. 11.13 Entire Agreement. This Agreement, including all Attachments hereto, constitutes the entire agreement of the parties and supersedes all proposals, oral or written, all negotiations, conversations, discussions, or agreements between the parties relating to the subject matter of this Agreement and all past dealing or industry custom. [Signatures Follow On Next Page] + +Source: REMARK HOLDINGS, INC., 10-Q, 11/14/2008 + + + + + + IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of its Effective Date. AGREED: HSW International, Inc. WORLD BOOK, INC. By: /s/ Bradley T. Zimmer By: /s/ Donald Keller Name: Bradley T. Zimmer Name: Donald Keller Title: Executive Vice President & General Counsel Title: VP & CFO + + + + + + + + + + + + + + LIST OF ATTACHMENTS Attachment A List of HSWI Affiliates Attachment B List of Competitors II Attachment C List of Competitors Schedule A Taxonomy Schedule Schedule B Article Schedule Schedule C Format and Delivery Schedule Schedule D Updating Format Schedule E World Book Brand Translation + + + +Source: REMARK HOLDINGS, INC., 10-Q, 11/14/2008 + + + + + +Attachment A HSWI AFFILIATES 1.HSW (HK) Inc. Limited 2.HSWI (HK) Holdings, Ltd. 3.HSW Brasil - Tecnologia e Informacao, Ltda. 4.Bowenwang Technology (Beijing) Limited Liability Company 5.HSW (PRC) Co. 6.BoNet (Beijing) Technology Limited 7.Intac International, Inc. 8.[*] 9.[*] 10.[*] 11.[*] + +[*] Confidential treatment requested; certain information omitted and filed separately with the SEC. + +Source: REMARK HOLDINGS, INC., 10-Q, 11/14/2008 + + + + + +Attachment B COMPETITORS II ·[*] ·[*] ·[*] ·[*] ·[*] ·[*] ·[*] ·[*] ·[*] ·[*] ·[*] + +[*] Confidential treatment requested; certain information omitted and filed separately with the SEC. + +Source: REMARK HOLDINGS, INC., 10-Q, 11/14/2008 + + + + + + Attachment C COMPETITORS World Book Competitors ·[*] ·[*] ·[*] ·[*] ·[*] ·[*] ·[*] ·[*] ·[*] + +[*] Confidential treatment requested; certain information omitted and filed separately with the SEC. + +Source: REMARK HOLDINGS, INC., 10-Q, 11/14/2008 + + + + + +Schedule A AFFINITIES TAXONOMY [*] [*] Confidential treatment requested; certain information omitted and filed separately with the SEC. + +Source: REMARK HOLDINGS, INC., 10-Q, 11/14/2008 + + + + + +Schedule B ARTICLES The topics for the Articles include the following, which may be expanded upon. [*] + + [*] Confidential treatment requested; certain information omitted and filed separately with the SEC. + +Source: REMARK HOLDINGS, INC., 10-Q, 11/14/2008 + + + + + +Schedule C FORMAT & DELIVERY To Be Determined + + + +Source: REMARK HOLDINGS, INC., 10-Q, 11/14/2008 + + + + + +Schedule D UPDATING FORMAT Updating Services shall be provided in the following or substantially similar format, e-mailed by World Book to an address or addresses specified by HSWI. Data for such will be provided, expressed as [*], in the form [*], or as World Book [*], in order by World Book [*]. + +[*] [*] + +[*] + +[*] [*] + +[*] + +[*] + +[*] + +[*] + +[*] Confidential treatment requested; certain information omitted and filed separately with the SEC. + +Source: REMARK HOLDINGS, INC., 10-Q, 11/14/2008 + + + + + +Schedule E WORLD BOOK BRAND TRANSLATION + + [*] + +[*] Confidential treatment requested; certain information omitted and filed separately with the SEC. + +Source: REMARK HOLDINGS, INC., 10-Q, 11/14/2008 \ No newline at end of file diff --git a/full_contract_txt/RevolutionMedicinesInc_20200117_S-1_EX-10.1_11948417_EX-10.1_Development Agreement.txt b/full_contract_txt/RevolutionMedicinesInc_20200117_S-1_EX-10.1_11948417_EX-10.1_Development Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..f88bfc3cbdcae03084c24154465c9f2d3f2543ef --- /dev/null +++ b/full_contract_txt/RevolutionMedicinesInc_20200117_S-1_EX-10.1_11948417_EX-10.1_Development Agreement.txt @@ -0,0 +1,1747 @@ +Exhibit 10.1 + +[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded information is not material and would likely cause competitive harm to the registrant if publicly disclosed. + +Execution Copy + +COLLABORATIVE RESEARCH, DEVELOPMENT AND COMMERCIALIZATION AGREEMENT + +This COLLABORATIVE RESEARCH, DEVELOPMENT AND COMMERCIALIZATION AGREEMENT (this "Agreement") is entered into as of June 8, 2018 (the "Execution Date"), by and between Revolution Medicines, Inc., a corporation organized and existing under the laws of Delaware, having its principal place of business at 700 Saginaw Dr. Redwood City, CA 94063, USA ("RevMed"), and Aventis, Inc., a corporation organized and existing under the laws of Pennsylvania, having offices at 55 Corporate Drive, Bridgewater, NJ 08807 ("Sanofi"). Sanofi and RevMed are referred to in this Agreement individually as a "Party" and collectively as the "Parties." + +RECITALS + +WHEREAS, RevMed has developed expertise in cancer biology and related drug discovery and precision medicine capabilities enabling RevMed to design and optimize drug candidates that inhibit the activity of the cancer target known as Src homology region 2-containing protein tyrosine phosphatase 2; + +WHEREAS, Sanofi is a pharmaceutical company working to develop and commercialize novel therapies; + +WHEREAS, RevMed and Sanofi desire to establish a collaboration for the research, development and potential commercialization of such drug candidates and biologic compounds that inhibit the activity of such cancer target for the treatment of cancer, and potentially other indications; and + +WHEREAS, Sanofi desires to acquire from RevMed, and RevMed desires to grant to Sanofi, certain licenses with regard to SHP2 Inhibitors and Products (as defined below), as further described herein. + +NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants contained herein, the receipt and sufficiency of which are hereby acknowledged, RevMed and Sanofi hereby agree: + +Article I. + +DEFINITIONS + +The terms in this Agreement with initial letters capitalized shall have the meanings set forth below, or the meaning as designated in the indicated places throughout this Agreement. + +1.1 "Accounting Standards" means, with respect to a Party or its Affiliate or Sublicensee, IFRS or GAAP, as such Person uses for its financial reporting obligations, consistently applied. + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +1.2 "Acquired Party Family" means in the case of a Change of Control of a Party or its Affiliate, such Party or such Affiliate existing immediately prior to the Change of Control transaction and any subsidiaries thereof (then existing or thereafter created). + +1.3 "Acquiror Family" means in the case of a Change of Control of a Party or any of its Affiliates, the Acquiror and its Affiliates existing immediately prior to the closing of the Change of Control transaction together with any future Affiliates other than the Acquired Party Family. + +1.4 "Act" means the United States Federal Food, Drug, and Cosmetic Act, as amended, and the rules, regulations, guidance, guidelines and requirements promulgated thereunder (including all additions, supplements, extensions and modifications) in effect from time to time. + +1.5 "Affiliate" means, with respect to a Party or other Person, any corporation or other business entity that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with that Party or other Person for so long as such Party or other Person controls, is controlled by or is under common control with such corporation or other business entity. For the purpose of this definition only, "control" (including, with correlative meaning, the terms "controlled by" and "under the common control") means the actual power, either directly or indirectly through one or more intermediaries, to direct or cause the direction of the management and policies of such Party or other Person, whether by the ownership of 50% or more of the voting equity of such Party or other Person, by contract or otherwise. Notwithstanding the foregoing, solely with respect to Sections 1.61 (Major Biopharmaceutical Company), and 3.1 (Licenses to Sanofi), "Affiliates" will not include (a) with respect to an entity, its bona fide venture capital or private equity investors, (b) with respect to an entity, its bona fide institutional investors, provided that such institutional investors routinely make venture capital investments for the potential financial return on such investments and for so long as such institutional investors do not (x) obtain any rights (including options, rights to negotiate, rights of first refusal or other contingent rights) to acquire control of such entity or its assets or (y) enter into or agree to enter into any research, development, commercial, license or other strategic transaction with such entity (each investor in clause (a) and (b), an "Excluded Investor"), or (c) Affiliates of such venture capital, private equity or institutional investors that do not otherwise qualify as Affiliates of such entity under this Section 1.5 (i.e., for a reason other than by virtue of their status as Affiliates of such investors). + +1.6 "Ancillary Agreement" means the Co-Promotion Agreement, the Pharmacovigilance Agreement, the Profit/Loss Share Agreement, any Supply Agreement, any Quality Agreement and any other agreement entered into between the Parties (or their respective Affiliates) pursuant to this Agreement. + +1.7 "Antitrust Law" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and the rules and regulations promulgated thereunder (the "HSR Act"), the Sherman Act, as amended, the Clayton Act, as amended, the Federal Trade Commission Act, as amended, and any other Applicable Laws related to merger control or designed to prohibit, restrict or regulate actions having the purpose or effect of monopolization or restraint of trade. 2 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +1.8 "Applicable Law" means (a) any federal, state, local, foreign or multinational law, statute, standard, ordinance, code, rule, regulation, resolution or promulgation (including written governmental interpretations thereof, the guidance related thereto), (b) any judicial, governmental or administrative order, judgment, decree or ruling by any Governmental Authority, or (c) any license, franchise, permit or similar right granted under any of the foregoing, or any similar provision having the force or effect of law, in each case (a), (b) and (c) that may be in effect from time to time and as applicable to the subject matter and the Persons at issue. + +1.9 "Business Day" means a day other than a Saturday or Sunday or a day on which banking institutions in San Francisco, California or in Paris, France are permitted or required to be closed. + +1.10 "Calendar Quarter" means each successive period of three calendar months commencing on January 1, April 1, July 1 and October 1, except that the first Calendar Quarter of the Term shall commence on the Effective Date and end on the day immediately prior to the first to occur of January 1, April 1, July 1 or October 1 after the Effective Date, and the last Calendar Quarter shall end on the last day of the Term. + +1.11 "Calendar Year" means each successive period of 12 calendar months commencing on January 1 and ending on December 31, except that the first Calendar Year of the Term shall commence on the Effective Date and end on December 31 of the year in which the Effective Date occurs and the last Calendar Year of the Term shall commence on January 1 of the year in which the Term ends and end on the last day of the Term. + +1.12 "Change of Control" means with respect to a Party (a) any sale, exchange, transfer, or issuance to or acquisition in one transaction or a series of related transactions by one or more Third Parties of units and/or shares of equity (as applicable) representing 50% or more of the aggregate ordinary voting power entitled to vote for the election of directors or managers represented by the issued and outstanding units of equity of such Party (or any Affiliate that directly or indirectly controls such Party (such Affiliate, the "Parent")), whether such sale, exchange, transfer, issuance or acquisition is made directly or indirectly, by merger or otherwise, or beneficially or of record (collectively, a "Stock Sale"); (b) a merger or consolidation under Applicable Law of such Party or a Parent with a Third Party, other than a merger or consolidation in which the units and/or shares of equity of such Party or Parent outstanding immediately prior to such merger or consolidation continue to represent, or are converted into or are exchanged for units and/or shares of equity which represent, immediately following such merger or consolidation, 50% or more of the aggregate ordinary voting power of such units and/or shares of equity of the surviving or resulting entity or a parent entity of such surviving or resulting entity, whether direct or indirect (collectively, a "Merger"); (c) a sale, lease, transfer, exclusive license or other disposition of all or substantially all of the assets of such Party or a Parent to one or more Third Parties in one transaction or a series of related transactions (collectively, the "Asset Transfer"). Notwithstanding the foregoing, a purchase of shares in a Stock Sale by one or more Third Parties in a bona fide financing transaction the primary purpose of which is to raise working capital for RevMed or to acquire assets from a Third Party (in either case including one or more public offerings) shall not constitute a Change of Control even if such Third Parties collectively negotiate or receive their rights as security holders in such financing transaction(s), except that such exemption shall not apply with respect to any Change of Control that would result in any Major Biopharmaceutical Company having more than 50% of the aggregate ordinary voting power in RevMed or its Parent. The Parent of a Party for purposes of this Section 1.12 shall not include any 3 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +Excluded Investor, provided that the applicable Stock Sale, Merger or Asset Transfer does not result in any Major Biopharmaceutical Company having more than 50% of the aggregate ordinary voting power in, or control over all or substantially all of the assets of, RevMed or its Parent or any surviving or resulting entity or a parent entity of such surviving or resulting entity. + +1.13 "Clinical Trial" means any clinical investigation conducted on human subjects, as that term is defined in FDA regulations at 21 C.F.R. § 312.3. Without limiting the foregoing, Clinical Trial includes any Phase 1 Clinical Trial, Phase 2 Clinical Trial, Phase 3 Clinical Trial, Phase 4 Study or variations of the foregoing. + +1.14 "Collaboration" means the collaboration of the Parties with respect to the Research, Development, Manufacture and Commercialization of Products in the Field, as and to the extent set forth in this Agreement and the Ancillary Agreements. + +1.15 "Combination Product" means any pharmaceutical preparation in final form containing a SHP2 Inhibitor in combination with one or more additional active ingredients, for sale by prescription or any other method either as a fixed dose or unit or as separate doses or units in a single package. + +1.16 "Commercialization" means the marketing, promotion, sale or distribution of Products (or Companion Diagnostics for Products in accordance with this Agreement) in the Field, including: (a) commercial activities conducted in preparation for commercial launch of a Product; (b) strategic marketing, sale force detailing, advertising, medical education and liaison; (c) any Phase 4 Studies, except Required Phase 4 Studies; and (d) all customer support, product distribution, invoicing and other sales activities. "Commercialize" and "Commercializing" have a correlative meaning. + +1.17 "Commercially Reasonable Efforts" means: (a) with respect to Sanofi, [***], consistent with [***] that [***], taking into account [***], including [***] and (b) with respect to RevMed, [***], consistent with [***] that [***], taking into account [***], including [***]. + +1.18 "Committee" means the JSC, JRDC, JCC, JPC or any subcommittee established under Article II, as applicable. + +1.19 "Companion Diagnostic" means, with respect to a Product, (a) a companion diagnostic approved by the applicable Regulatory Authority that provides information essential to the safe and effective use of such Product or is otherwise necessary for the Regulatory Approval of such Product, or (b) a complementary diagnostic that provides information helpful to the safe and effective use of such Product but is not a companion diagnostic referred to in the foregoing clause (a). + +1.20 "Competing Product" means, other than a Product, any pharmaceutical preparation [***] that satisfies the criteria [***], alone or in combination with one or more additional active ingredients, for sale by prescription or any other method. 4 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +1.21 "Confidential Information" of a Party means all proprietary Know-How, unpublished patent applications and other non-public information and data of a financial, commercial, business, operational or technical nature of such Party that is disclosed by or on behalf of such Party, its Affiliates or its or their Sublicensees, or otherwise made available to the other Party, its Affiliates or its or their Sublicensees, prior to, on or after the Effective Date, whether made available orally, in writing or in electronic form in connection with this Agreement or any Ancillary Agreement, including the terms of this Agreement and any Ancillary Agreements, information comprising or relating to concepts, discoveries, inventions, data, designs or formulae in connection with this Agreement or any Ancillary Agreement. All (a) RevMed Licensed Know-How to the extent relating to SHP2 Inhibitors or Products, (b) Joint Program Know-How, and (c) the terms of this Agreement and any Ancillary Agreements, shall be deemed to be the Confidential Information of both Parties (and both Parties shall be deemed to be the Receiving Party and the Disclosing Party with respect thereto). All RevMed Licensed Know-How to the extent relating to RevMed's products and product candidates (other than SHP2 Inhibitors or Products) shall not be deemed Confidential Information of both Parties. + +1.22 "Control" or "Controlled" means, with respect to any item of Know-How, Patent Right, other intellectual property right or Regulatory Material, a Party has the ability (whether by sole, joint or other ownership interest, license, sublicense or otherwise, and including any such abilities which are contingent) (other than by operation of the licenses granted in this Agreement) to grant a license, sublicense, access or right to use (as applicable) under such item of Know-How, Patent Right, other intellectual property right or Regulatory Material to the other Party on the terms and conditions set forth herein at the time of such grant, in each case without breaching the terms of any agreement with a Third Party. + +1.23 "Correspondence" means that certain letter between Sanofi and RevMed dated as of the Execution Date. + +1.24 "Decision-Making Committee" means each Committee (other than the JPC and JMC). + +1.25 "Designated Senior Officer" means: (a) with respect to RevMed, [***] and, (b) with respect to Sanofi, [***]. + +1.26 "Detail" means, with respect to a Co-Promotion Product in the Co-Promotion Territory, a face-to-face contact between a sales representative and a physician or other medical professional licensed or authorized to prescribe drugs, during which a primary position detail or a secondary position detail is made to such person, in each case as measured by each Party's internal recording of such activity in accordance with the Co-Promotion Agreement; provided that such meeting is consistent with and in accordance with the requirements of Applicable Law, this Agreement and the Co- Promotion Agreement. For the avoidance of doubt, the following activities will not constitute Details: e-details; sample drops; reminder details; activities conducted at conventions, exhibit booths, speaker meetings or similar gatherings; and activities performed by market development specialists, managed care account directors and other personnel not performing face-to-face sales calls or not specifically trained with respect to a Co-Promotion Product. The definition of "Detail" may be further refined in the Co-Promotion Agreement. When used as a verb, "Detail" means to engage in a Detail. 5 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +1.27 "Development" means all development activities for any Product (or a Companion Diagnostic for such Product in accordance with this Agreement) that are directed to obtaining Regulatory Approval(s) of such Product, including: all non-clinical, preclinical and clinical activities conducted in support of Regulatory Approval (including any Required Phase 4 Studies); testing and studies of such Product (including IND-enabling studies and translational research); toxicology, pharmacokinetic and pharmacological studies; manufacture and distribution of such Product for use in Clinical Trials (including comparators, process development and scale up, and Combination Therapies); statistical analyses; assay development; instrument design and development; protocol design and development; quality assurance and control; report writing; the preparation, filing and prosecution of any MAA for such Product; development activities directed to label expansion or obtaining Regulatory Approval for one or more additional indications following initial Regulatory Approval; health economic studies relating to the indication for which the applicable Product is being developed conducted prior to Regulatory Approval; and all regulatory affairs related to any of the foregoing. "Develop" and "Developing" have a correlative meaning. + +1.28 "Dollars" means the U.S. dollar, and "$" shall be interpreted accordingly. + +1.29 "Drug Treatment Regimen" means either (a) SHP2 Inhibitor monotherapy, or (b) SHP2 Inhibitor Combination Therapy. + +1.30 "EMA" means the European Medicines Agency or any successor entity thereto. + +1.31 "EU" or the "European Union" means the economic, scientific and political organization of European Union member states as it may be constituted from time to time, which as of the Effective Date consists of: Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxemburg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and the United Kingdom, as well as Norway and Iceland. For purposes of this Agreement, the "EU" shall continue to include each foregoing territory whether or not such territory is a participating member state as of the applicable time. + +1.32 "Excluded List" means any of the United States Department of Health and Human Service's List of Excluded Individuals/Entities or the United States General Services Administration's Lists of Parties Excluded from Federal Procurement and Non-Procurement Programs. + +1.33 "FCPA" means the U.S. Foreign Corrupt Practices Act of 1977, as amended, including the rules and regulations thereunder. A summary of the FCPA and related information can be found at http://www.justice.gov/criminal/fraud/fcpa. + +1.34 "FDA" means the United States Food and Drug Administration or any successor entity thereto. + +1.35 "FFDCA" means the United States Federal Food, Drug, and Cosmetic Act, 21 U.S.C. 301, et. seq., as it may be amended from time to time, and the rules, regulations, guidance, guidelines, and requirements promulgated or issued thereunder. + +1.36 "Field" means any and all uses. 6 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +1.37 "First Commercial Sale" means, with respect to any Product in any country or jurisdiction, the first sale for monetary value of such Product to a Third Party for distribution, use or consumption in such country or jurisdiction after Marketing Approval has been obtained for such Product in such country or jurisdiction. Sales prior to receipt of Marketing Approval for such Product, such as so-called "treatment IND sales," "named patient sales," and "compassionate use sales," shall not be construed as a First Commercial Sale. + +1.38 "FTE" means a full time equivalent person year (consisting of [***] hours per year) of work as an employee or contractor [***] hereunder as tracked by each Party using its respective standard practice and methodologies. For clarity, [***] will not constitute FTEs. Notwithstanding the foregoing, the time of a single individual will not account for more than one FTE for a given Calendar Year (or applicable pro-rata portion of an FTE during any Calendar Quarter or other period of less than a Calendar Year). + +1.39 "FTE Costs" means, with respect to a Party for any period, the applicable FTE Rate multiplied by the applicable number of FTEs of such Party performing the applicable activity described hereunder during such period. + +1.40 "FTE Rate" means the applicable rate set forth in Exhibit A of the Correspondence or in any Ancillary Agreement or exhibit thereto, which rate shall be adjusted annually, with each annual adjustment effective as of January 1 of each Calendar Year, with the first such annual adjustment to be made as of January 1, 2019, to correspond with respect to Research, Development, Manufacturing or Commercialization activities under the Collaboration by or on behalf of a Party, [***] preceding each such January 1. + +1.41 "GAAP" means the U.S. generally accepted accounting principles. + +1.42 "Generic Product" means, with respect to a Product, any pharmaceutical or biological product (a) that is sold by a Person other than a Party or its Affiliates or Sublicensees, which Person did not purchase such product in a chain of distribution that included such Party or its Affiliate or Sublicensee as intentional participants, (b) contains, for a pharmaceutical product, the same or a bioequivalent SHP2 Inhibitor or, for a biologic product, a biosimilar or interchangeable SHP2 Inhibitor, to such Product[***]. + +1.43 "Genotype" means one or more [***]. In the cases where such [***]. + +1.44 "Good Clinical Practice" or "GCP" means the then-current standards for Clinical Trials for pharmaceuticals, as set forth in the Act or other Applicable Law, and such standards of good clinical practice as are required by the Regulatory Authorities of the European Union and other organizations and Governmental Authorities in countries for which the SHP2 Inhibitor or Product is intended to be Developed, to the extent such standards are not less stringent than United States GCP. + +1.45 "Good Laboratory Practice" or "GLP" means the then-current standards for laboratory activities for pharmaceuticals, as set forth in the Act or other Applicable Law, and such standards of good laboratory practice as are required by the Regulatory Authorities of the European Union and other organizations and Governmental Authorities in countries for which the applicable SHP2 Inhibitor or Product is intended to be Developed, to the extent such standards are not less stringent than United States GLP. 7 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +1.46 "Good Manufacturing Practice" or "GMP" means the current good manufacturing practices applicable from time to time to the manufacturing of a SHP2 Inhibitor, Product or any intermediate thereof pursuant to Applicable Law. + +1.47 "Governmental Authority" means any multi-national, federal, national, state, provincial, local, municipal or other government authority of any nature (including any governmental division, subdivision, commission, department, bureau, prefecture, agency, branch, office, governmental arbitrator or arbitral body, council, court or other tribunal entitled to exercise any administrative, executive, judicial, legislative, police, regulatory or taxing authority or power). + +1.48 "IFRS" means the International Financial Reporting Standards. + +1.49 "Immuno-Oncology Agent" means any treatment [***]. For clarity, Immuno-Oncology Agent shall include any treatment that primarily targets [***]. + +1.50 "IND" means (a) in the United States, an Investigational New Drug Application, as defined in the Act, that is required to be filed with the FDA before conducting a Clinical Trial (including all supplements and amendments that may be filed with respect to the foregoing); and (b) any foreign counterpart of the foregoing filed with a Regulatory Authority in conformance with the requirements of such Regulatory Authority. + +1.51 "Indication" means a type of cancer for which Regulatory Approval for a Product is being sought that (i) is distinct from other types of cancer by [***]. + +1.52 "Initial R&D Term" means the first [***] of the Term. + +1.53 "Initiation" means, with respect to a Clinical Trial of a Product, [***] subject for such Clinical Trial. + +1.54 "Joint Program Patents" means any Patent Right covering or claiming the Joint Program Know-How. + +1.55 "Joint Program Technology" means Joint Program Know-How and Joint Program Patents. + +1.56 "Knowledge" means, with respect to a Party, the actual knowledge of such Party, or what such Party should have known after due inquiry. + +1.57 "Know-How" means any information and materials, including but not limited to discoveries, inventory, information, regulatory filings, processes, formulae, data, databases, protocols, inventions (whether patentable or not), improvements (whether patentable or not), invention disclosures, developments, skills, experience, know-how and trade secrets (whether patentable or not), including without limitation, all chemical, pharmaceutical, toxicological, biochemical, and biological, technical and non-technical data, and information relating to the results of tests, assays, methods, techniques, and processes, and specifications or other documents containing information and related data, and any preclinical, clinical, assay control, manufacturing, regulatory and any other data or information, but excluding any Patent Rights. 8 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +1.58 "Licensed Territory" means all countries and territories of the world. + +1.59 "Line of Therapy" means the treatment with a Product [***]. + +1.60 "Losses" means any and all liability, loss, damage, injury, costs or expenses (including reasonable attorneys' fees and expenses of litigation) of any kind. + +1.61 "MAA" or "Marketing Authorization Application" means an application to the appropriate Regulatory Authority for Marketing Approval (but excluding pricing approval) in the Field in any particular jurisdiction (including, without limitation, a New Drug Application in the U.S.) and all amendments and supplements thereto. + +1.62 "Major Biopharmaceutical Company" means (a) any entity that develops or commercializes healthcare products for human consumption that has a fully diluted market capitalization of at least $[***] as measured at the closing price on the last day of the preceding Calendar Quarter during which the measurement is taken or any Affiliate of such entity or (b) any entity that has [***]. + +1.63 "Major Market Countries" means the [***]. + +1.64 "Manufacture" and "Manufacturing" mean activities directed to manufacturing, processing, filling, finishing, packaging, labeling, quality assurance testing and release, storing and transporting any Product, SHP2 Inhibitors or any intermediate or component thereof, including manufacturing and analytical development, process and formulation development, process qualification, process validation, scale-up, pre-clinical, clinical and commercial manufacture and analytic development, product characterization, stability testing, quality assurance and quality control, and chemistry, manufacturing and controls. + +1.65 "Manufacturing Costs" means, with respect to a Product, the costs incurred by a Party or its Affiliate or Sublicensee in connection with Manufacturing or purchasing from a Third Party, as applicable, each Product that is either (a) supplied by a Third Party, or (b) manufactured directly by a Party or an Affiliate or Sublicensee of such Party, determined as follows and in accordance with Accounting Standards: + +In the case of clause (a) above, Manufacturing Costs means [***]. To the extent any non-refundable or non-creditable value added or similar tax is due with respect to amounts paid to such Third Party for Manufacture of any portion of a Product, such amounts shall be considered Manufacturing Costs under this clause (a). + +In the case of clause (b) above, Manufacturing Costs means: (i) [***] and a reasonable allocation of [***], which allocation is made [***]; (ii) [***]; and (iii) a reasonable allocation of [***]. All components of Manufacturing Costs shall be allocated [***]. + +Such Party may elect, in its sole discretion, to [***] the above Manufacturing Cost definition. 9 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +Third Party payments shall be included on a pass-through basis for purposes of clause (a) or clause (b) above. + +1.66 "Marketing Approval" means all Regulatory Approvals necessary for the commercial sale of a Product in the Field in a given country or regulatory jurisdiction, including pricing and reimbursement approval. + +1.67 "Material Adverse Event" means any event, occurrence, condition, change, circumstance, development, effect or state of facts that has had or would reasonably be expected to have, individually or in the aggregate, materially adverse to [***]; provided, however, that "Material Adverse Effect" shall not include the effect of any event, occurrence, condition, change, circumstance, development, effect or state of facts arising out of or attributable to any of the following, either alone or in combination: [***], in each case of clauses (i), (ii) or (iv) only to the extent such event, occurrence, condition, change, circumstance, development, effect or state of facts has a disproportionate effect on a Party or its Affiliates as compared to other participants operating in the biopharmaceutical industry in the same markets in which such Party or its Affiliates conduct their businesses. + +1.68 "NDA" means (a) in the United States, a New Drug Application or Biologics License Application that is submitted to the FDA for Regulatory Approval for a Product, and (b) any foreign counterpart of either of the foregoing filed with a Regulatory Authority in conformance with the requirements of such Regulatory Authority. + +1.69 "Net Sales" means, with respect to a Product for any period, the gross amount billed or invoiced by Sanofi, its Affiliates or its or their Sublicensees for the sale of a Product to Third Parties (including Distributors) commencing with the First Commercial Sale of such Product less the following deductions determined in accordance with Accounting Standards from such gross amounts which are actually incurred, allowed, accrued or specifically allocated: (a) [***] (b) [***] (c) [***] (d) [***] (e) [***] (f) [***] (g) [***] (h) [***] (i) [***] and (j) [***]. 10 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +Any of the deductions listed above that involves a payment by such Party, its Affiliates or its or their Sublicensees shall be taken as a deduction in the Calendar Quarter in which the payment is accrued by such entity. For purposes of determining Net Sales, a Product shall be deemed to be sold when [***]. Net Sales shall not include [***]. Such Party's, its Affiliates' or its or their Sublicensees' transfer of any Product to an Affiliate or Sublicensee shall not result in any Net Sales unless the transferee is an end user. + +In the event that a Product is sold in any country in the form of a Combination Product, Net Sales of such Combination Product shall be adjusted by [***]; provided that the invoice price [***]. If either such Product that contains the SHP2 Inhibitor(s) as its sole active ingredient or any such product that contains active ingredient(s) other than the SHP2 Inhibitor(s) is not sold separately in a particular country, then the adjustment to Net Sales shall be [***]. + +In the case of pharmacy incentive programs, hospital performance incentive programs, chargebacks, disease management programs, similar programs or discounts on portfolio product offerings, [***]; provided that [***] shall be done in accordance with Applicable Law, including any price reporting laws, rules and regulations. + +Subject to the above, Net Sales shall be calculated [***]. + +1.70 "Non-SHP2 Collaboration Product" means for any Drug Treatment Regimen under the Collaboration that is [***]. + +1.71 "Non-SHP2 Same Class Product" means, with respect to a Non-SHP2 Collaboration Product, any [***]. + +1.72 "Other SHP2 Inhibitor" means any small molecule or biologic compound that (a) satisfies the criteria specified in the SHP2 Inhibitor Criteria and (b) is not a SHP2 Inhibitor that is Controlled by RevMed or its Affiliates. + +1.73 "Patent Rights" means any and all national, regional and international (a) issued patents and pending patent applications (including provisional patent applications), (b) patent applications filed either from the foregoing or from an application claiming priority to the foregoing, including all provisional applications, converted provisionals, substitutions, continuations, continuations-in-part, divisions, renewals and continued prosecution applications, and all patents granted thereon, (c) patents-of-addition, revalidations, reissues, reexaminations and extensions or restorations by existing or future extension or restoration mechanisms, including patent term adjustments, patent term extensions, supplementary protection certificates or the equivalent thereof, (d) inventor's certificates, utility models, petty patents, innovation patents and design patents, (e) other forms of government-issued rights substantially similar to any of the foregoing, including so-called pipeline protection or any importation, revalidation, confirmation or introduction patent or registration patent or patent of additions to any of such foregoing and (f) United States and foreign counterparts of any of the foregoing. + +1.74 "Permitted Contractors or Researchers" means (a) any Third Party independent contractor that RevMed has entered into a written agreement with prior to the Effective Date and which Person is listed on Exhibit B of the Correspondence, (b) any other Third Party to which Sanofi consents in writing as a subcontractor of RevMed pursuant to Section 3.4, and (c) any named Third Party set forth in the Research Plan or Development Plan. 11 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +1.75 "Person" means any individual, partnership, limited liability company, firm, corporation, association, trust, unincorporated organization or other entity. + +1.76 "Phase 1 Clinical Trial" means a Clinical Trial of a Product that generally provides for the first introduction into humans of such Product, with the primary purpose of determining metabolism and pharmacokinetic properties and side effects of such product, in a manner that is generally consistent with 21 C.F.R. § 312.21(a), as amended (or its successor regulation), excluding, for clarity, any investigator-initiated Clinical Trials unless agreed to by the JRDC. + +1.77 "Phase 2 Clinical Trial" means a Clinical Trial of a Product conducted on a sufficient number of subjects for evaluating (and the principal purpose of which is to evaluate) the effectiveness of a pharmaceutical product for its particular intended use and obtaining (and to obtain) information about side effects and other risks associated with the drug, in a manner that is generally consistent with 21 C.F.R. § 312.21(b), as amended (or its successor regulation), or a similar clinical study prescribed by the Regulatory Authorities in a country or jurisdiction outside the United States, to permit the design of further Clinical Trials of such Product, excluding, for clarity, any investigator-initiated Clinical Trials unless agreed to by the JRDC. + +1.78 "Phase 3 Clinical Trial" means a pivotal Clinical Trial of a Product with a defined dose or a set of defined doses of such Product and conducted on a sufficient number of subjects for ascertaining (and that is designed to ascertain) the overall risk-benefit relationship of the Product for its intended use and determining (and to determine) warnings, precautions, and adverse reactions that are associated with such Product in the dosage range to be prescribed, in a manner that is generally consistent with 21 C.F.R. § 312.21(c), as amended (or its successor regulation), or a similar clinical study prescribed by the Regulatory Authorities in a country or jurisdiction outside the United States, which trial is necessary to support Regulatory Approval of such Product, excluding, for clarity, any investigator-initiated Clinical Trials unless agreed to by the JRDC. + +1.79 "Phase 4 Study" means a Clinical Trial or data collection effort with respect to any Product that is commenced after the receipt of Regulatory Approval in the country where such trial is conducted. + +1.80 "PMDA" means Japan's Pharmaceuticals and Medical Devices Agency and any successor thereto. + +1.81 "Pre-Registrational Meeting" means the meeting with the FDA or the equivalent meeting with the EMA or PMDA or other Regulatory Authority (as applicable) to be conducted to discuss the requirements of the FDA, EMA, or PMDA or other Regulatory Authority (as applicable) for a Registration Program for a given Product to support Marketing Approval, e.g., end-of-Phase 2 or pre-Phase 3 meetings. + +1.82 "Product" means any pharmaceutical preparation in final form containing a SHP2 Inhibitor, alone or in the form of a Combination Product. 12 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +1.83 "Program Inventions" means any Know-How conceived, reduced to practice, developed, made or otherwise generated by or on behalf of a Party or its Affiliates or Sublicensees in connection with the Research, Development, Manufacture or Commercialization of SHP2 Inhibitors or Products under this Agreement or any Ancillary Agreement, including all rights, title and interest in and to the intellectual property rights therein. + +1.84 "Publication" means any release of information, including any presentation, which information (a) has not been disclosed pursuant to Section 11.3 or (b) has not previously been publicly disclosed. + +1.85 "Registrational Clinical Trial" means a Clinical Trial of a Product designed to be adequate to achieve Regulatory Approval of such Product and that would satisfy the requirements of 21 C.F.R 312.21(c), as amended, or corresponding foreign regulations, regardless of whether such trial is referred to as a "phase 2b clinical trial", "phase 2b/3 clinical trial" or "phase 3 clinical trial", but excluding, for clarity, any investigator-initiated Clinical Trials. + +1.86 "Regulatory Approval" means, with respect to a country or jurisdiction, any and all approvals (including Marketing Approvals), licenses, registrations or authorizations of any Regulatory Authority necessary to commercially distribute, sell or market a Product in such country or jurisdiction, including, where applicable, (a) pricing or reimbursement approval in such country or jurisdiction, (b) pre- and post-approval marketing authorizations (including any prerequisite Manufacturing approval or authorization related thereto) and (c) labeling approval. + +1.87 "Regulatory Authority" means any applicable Governmental Authority involved in the granting Regulatory Approvals for the Products or otherwise exercising authority with respect to biopharmaceutical products in the applicable country or jurisdiction, including the FDA, the EMA, the PMDA and any corresponding national or regional regulatory authorities. + +1.88 "Regulatory Exclusivity" means any rights or protections which are recognized, afforded or granted by the FDA or any other Regulatory Authority in any country or region of the Territory pursuant to Applicable Laws of such country or region, in association with the marketing authorization of the Product, providing the Product[***] a period of marketing exclusivity, during which a Regulatory Authority recognizing, affording or granting such marketing exclusivity will refrain from either reviewing or approving a marketing authorization application or similar regulatory submission, submitted by a Third Party seeking to market a Generic Product of such Product[***]. + +1.89 "Regulatory Materials" all (a) applications (including all INDs), registrations, licenses, authorizations and approvals (including MAAs and Regulatory Approvals), (b) correspondence and reports submitted to or received from Regulatory Authorities (including minutes and official contact reports relating to any communications with any Regulatory Authority) and all supporting documents with respect thereto, including all adverse event files and complaint files, (c) clinical and other data contained, referenced or otherwise relied upon in any of the foregoing, and (d) for clarity, any drug master file. + +1.90 "Required Phase 4 Studies" means any Phase 4 Studies that are required by the applicable Regulatory Authority to be conducted as a condition for Regulatory Approval, including Regulatory Approval for a label expansion, whether or not also required for pricing or reimbursement approval. 13 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +1.91 "Research" means all research activities conducted by or on behalf of either Party or the Parties jointly pursuant to the Research Plan. + +1.92 "Research and Development Costs" means all RevMed R&D Costs and Sanofi R&D Costs. + +1.93 "Residual Knowledge" means intangible Know-How (but, for the avoidance of doubt, not Patents) relating to the Collaboration or otherwise to this Agreement or any Ancillary Agreement that has been retained in the unaided memories of any employees of a Party. + +1.94 "RevMed Background Know-How" means, subject to Section 3.1(b), all Know-How that is (a) Controlled by RevMed or its Affiliates as of the Effective Date or during the Term, excluding the RevMed Sole Program Know-How and Joint Program Know-How; and (b) necessary or useful for the Research, Development, Manufacture, Commercialization or other exploitation of any Product in the Field. + +1.95 "RevMed Background Patents" means, subject to Section 3.1(b), any Patent Right (a) (i) that is Controlled by RevMed or its Affiliates as of the Effective Date; or (ii) that comes into the Control of RevMed or its Affiliates during the Term, excluding the RevMed Sole Program Patents and Joint Program Patents; and [***]. + +1.96 "RevMed Background Technology" means RevMed Background Patents and RevMed Background Know-How. + +1.97 "RevMed Licensed Know-How" means RevMed Background Know-How and RevMed Sole Program Know-How. + +1.98 "RevMed Licensed Patent" means RevMed Background Patents and RevMed Sole Program Patents. + +1.99 "RevMed Licensed Technology" means RevMed Background Technology, RevMed Sole Program Technology and RevMed's undivided one- half ownership of the full right, title and interest in and to the Joint Program Technology. + +1.100 "RevMed R&D Costs" means RevMed R&D FTE Costs and RevMed R&D Out-Of-Pocket Costs. + +1.101 "RevMed R&D FTE Costs" means FTE Costs incurred by or on behalf of RevMed or its Affiliates in the Research or Development of Product in the Field in accordance with the Research Plan or Development Plan for such Product, as applicable. + +1.102 "RevMed R&D Out-Of-Pocket Costs" means amounts paid by RevMed in cash to Third Parties for goods and services required in order for RevMed to conduct Research or Development of Product in the Field in accordance with the Research Plan or Development Plan for such Product, as applicable. 14 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +1.103 "RevMed Sole Program Know-How" means all Program Inventions owned solely by RevMed pursuant to Section 10.1(a). + +1.104 "RevMed Sole Program Patents" means any Patent Right covering or claiming the RevMed Sole Program Know-How. + +1.105 "RevMed Sole Program Technology" means RevMed Sole Program Patents and RevMed Sole Program Know-How. + +1.106 "Sanofi R&D Costs" means Sanofi R&D FTE Costs and Sanofi R&D Out-Of-Pocket Costs. + +1.107 "Sanofi R&D FTE Costs" means FTE Costs incurred by or on behalf of Sanofi or its Affiliates in the Research or Development of Product in the Field in accordance with the Research Plan or Development Plan for such Product, as applicable. + +1.108 "Sanofi R&D Out-Of-Pocket Costs" means amount paid by Sanofi in cash to Third Parties for good and services required in order for Sanofi to conduct Research or Development of Product in the Field in accordance with the Research Plan or Development Plan for such Product, as applicable. + +1.109 "Sanofi Sole Program Know-How" means all Program Inventions owned solely by Sanofi pursuant to Section 10.1(a). + +1.110 "Sanofi Sole Program Patents" means any Patent Right covering or claiming the Sanofi Sole Program Know-How. + +1.111 "SHP1" means [***]. + +1.112 "SHP1 Inhibitor" means [***]. + +1.113 "SHP1 Inhibitor Criteria" means [***], as set forth in Exhibit C of the Correspondence. + +1.114 "SHP1-SHP2 Dual Inhibitor" means [***]. + +1.115 "SHP1-SHP2 Dual Inhibitor Product" means any pharmaceutical preparation in final form containing a SHP1-SHP2 Dual Inhibitor, alone or in combination with one or more additional active ingredients, for sale by prescription, over-the-counter or any other method. + +1.116 "SHP1-SHP2 Dual Inhibitor Criteria" means [***], as set forth in Exhibit D of the Correspondence. + +1.117 "SHP2" means [***]. + +1.118 "SHP2 Inhibitor Combination Therapy" means [***]. + +1.119 "SHP2 Inhibitor" means [***]. 15 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +1.120 "SHP2 Inhibitor Criteria" means [***], as set forth in Exhibit E of the Correspondence. + +1.121 "Study Report" means a written report that contains information required by ICH guidelines after the Clinical Trial in question is closed but before database lock for such Clinical Trial. + +1.122 "Sublicensees" means a Person, other than an Affiliate or a Distributor, that is granted a sublicense by a Party or its Affiliate under the license grants in this Agreement. + +1.123 "Subsidiary" means, with respect to a Party, any corporation or other business entity that, directly or indirectly, through one or more intermediaries, is controlled by that Party for so long as such Party controls such corporation or other business entity. For the purpose of this definition only, "control" (including, with correlative meaning, the terms "controlled by" and "under the common control") means the actual power of such Party, either directly or indirectly through one or more intermediaries, to direct or cause the direction of the management and policies of such corporation or other business entity, whether by the ownership of 50% or more of the voting equity of such corporation or other business entity, by contract or otherwise. + +1.124 "Targeted Anti-Cancer Agent" means, other than an Immuno-Oncology Agent, any molecularly targeted therapy that blocks the growth of cancer [***]. For clarity, Targeted Anti-Cancer Agent includes [***]. + +1.125 "Third Party" means any Person other than a Party or an Affiliate of a Party. + +1.126 "Third Party Claims" means all Third Party demands, claims, actions, investigations and proceedings (whether criminal or civil, in contract, tort or otherwise). + +1.127 "Trademark" means any word, name, symbol, color, shape, designation or any combination thereof, including any trademark, service mark, trade name, brand name, sub-brand name, trade dress, product configuration, program name, delivery form name, certification mark, collective mark, logo, tagline, slogan, design or business symbol, that functions as an identifier of source or origin, whether or not registered and all statutory and common law rights therein and all registrations and applications therefor, together with all goodwill associated with, or symbolized by, any of the foregoing. + +1.128 "Tumor Type" means a cancer that differs from another type of cancer in [***]. + +1.129 "United States" or "U.S." means the United States of America, including its territories and possessions. + +1.130 "Valid Claim" means [***]. 16 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +1.131 In addition to the foregoing definitions, the following table identifies the location of the following definitions set forth in various other Sections of, or Exhibits to, the Agreement: Defined Term Section Acquiror Section 15.2(a) Agreement Preamble Alliance Manager Section 2.1 Applicable Reduction Percentage Section 9.3(c)(ii) Asset Transfer Section 1.12 Base Net Sales Section 9.3(c)(ii) Closing Conditions Section 13.6 Co-Promotion Agreement Section 8.7(c) Co-Promotion Option Section 8.7(a) Co-Promotion Product Section 8.7(a) Co-Promotion Territory Section 8.7(a) Combination Therapy Section 5.3(a) Commercialization Plan Section 8.2 Confidentiality Agreement Section 15.9 CREATE Act Section 10.3 Data Package Section 5.2(c) Development Candidate Section 4.3 Development Budget Section 5.2(a) Development Plan Section 5.2(a) [***] Section 5.2(b) Disclosing Party Section 11.1(a) Dispute Section 15.6(a) Distributor Section 8.3 Effective Date Section 3.8 Execution Date Preamble Force Majeure Section 15.1 Indemnification Claim Notice Section 14.3(a) Indemnified Party Section 14.3(a) Indemnifying Party Section 14.3(a) Indemnitee Section 14.3(a) Initial Know-How Section 3.7(a) Joint Commercialization Committee or JCC Section 2.4 Joint Research and Development Committee or JRDC Section 2.3 Joint Steering Committee or JSC Section 2.2 Joint Program Know-How Section 10.1(a) Know-How Index Section 3.7(a) Launch Quarter Section 9.3(c)(ii) Merger Section 1.12 Milestone Event Section 9.2 Milestone Payment Section 9.2 Non-SHP2 Termination Product Section 12.3(c)(ii)(A) Parent Section 1.12 Party or Parties Preamble Pharmacovigilance Agreement Section 6.5 17 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +Defined Term Section Product Infringement Section 10.4(a) Product Marks Section 10.5(a) Profit/Loss Share Agreement Section 9.4 Quality Agreement Section 7.3 Receiving Party Section 11.1(a) Remainder Section 10.4(f) Remedial Action Section 6.7 Research Budget Section 4.2(a) Research Plan Section 4.1 [***] Section 4.2(b) RevMed Preamble RevMed Commercialization Costs Section 8.2 RevMed Indemnitee Section 14.2 RevMed Program Invention Section 12.3(c)(ii) RevMed Study Section 5.6(b) Royalty Floor Section 9.3(c)(iii) Royalty Term Section 9.3(b) Sanofi Preamble Sanofi Indemnitee Section 14.1 Sanofi Program Invention Section 12.3(c)(ii) Sanofi Prosecuted Patents Section 10.2(a) [***] Section 12.3(c)(ii) [***] Section 12.3(c)(ii) [***] Section 12.3(c)(ii) SHP1-SHP2 Dual Inhibitor License Rights Section 3.5(a) SHP1-SHP2 Dual Inhibitor Licensing Decision Section 3.5(a) SHP1-SHP2 Dual Inhibitor Licensing Negotiation Period Section 3.5(a) Stock Sale Section 1.12 Supply Agreement Section 7.3 Term Section 12.1 Third Party Right Section 10.7(a) Termination Product Section 12.3(c)(ii)(D) Third Party Right Notification Section 10.7(a) VAT Section 9.7(b) + +1.132 Interpretation. In this Agreement, unless otherwise specified: + +(a) The words "include", "includes" and "including" shall be deemed to be followed by the phrase "without limitation"; + +(b) the words "will" and "shall" have the same meaning; 18 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +(c) the word "or" shall be interpreted to mean "and/or" unless the context requires otherwise; + +(d) words denoting the singular shall include the plural and vice versa and words denoting any gender shall include all genders; + +(e) words such as "herein", "hereof", and "hereunder" refer to this Agreement as a whole and not merely to the particular provision in which such words appear; and + +(f) the Exhibits and other attachments to this Agreement and the Correspondence form part of the operative provision of this Agreement and references to "this Agreement" shall include references to such Exhibits and attachments. + +Article II. + +GOVERNANCE + +2.1 Alliance Managers. Each Party hereby appoints the person listed on Exhibit F of the Correspondence to act as its alliance manager under this Agreement as of the Effective Date (the "Alliance Manager"). Each Party's Alliance Manager shall: (a) serve as the primary contact point between the Parties for the purpose of providing the other Party with information on the progress of such Party's activities under this Agreement; (b) be primarily responsible for facilitating the flow of information and otherwise promoting communication, coordination and collaboration between the Parties; and (c) have the right to attend all Committee meetings, all as non-voting members. Without limiting the foregoing, the Alliance Managers (or their designees) shall be responsible for (i) scheduling meetings of each Decision-Making Committee; (ii) setting agendas for meetings of each Decision-Making Committee with solicited input from members of the respective Committee, and (iii) preparing the draft minutes of such meetings (with such responsibility alternating between the Alliance Managers), which minutes shall provide a description in reasonable detail of the discussion held at the meeting and a list of any actions, decisions or determinations approved by the respective Committee. Each Party may replace its Alliance Manager at any time upon written notice to the other Party. + +2.2 Joint Steering Committee. The Parties hereby establish an executive steering committee (the "Joint Steering Committee" or the "JSC"). + +(a) Composition. The JSC shall consist of three senior executives of each Party, with at least one such senior executive from each such Party holding the position of vice president or above. + +(b) Function and Powers. The JSC shall manage the overall Collaboration, and shall in particular: + +(i) coordinate the activities of the Parties under this Agreement, including facilitating communications between the Parties with respect to the Research, Development, Manufacture and Commercialization of the SHP2 Inhibitors and Products; 19 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +(ii) provide a forum for discussion of matters relating to the Research, Development, Manufacture and Commercialization of the SHP2 Inhibitors and Products presented to the JSC by the other Committees; + +(iii) direct and oversee the operation of the JRDC, JCC, JPC and any other joint subcommittee established by JSC, including resolving any disputed matter of the JRDC, JCC, JPC and other subcommittees in accordance with Section 2.10, and promote effective member participation in each such Committee's or subcommittee's operations; + +(iv) approve each Research Plan and Development Plan prepared by the JRDC, and the Research Budget and Development Budget therein, respectively, and amendments to the foregoing in accordance with Section 5.2(d); + +(v) establish additional subcommittees as appropriate; + +(vi) [***]; and + +(vii) perform such other duties as are expressly assigned to the JSC in this Agreement, and perform such other functions as appropriate to further the purposes of this Agreement as may be allocated to it by the Parties' written agreement, except where in conflict with any provision of this Agreement. + +2.3 Joint Research and Development Committee. The Parties hereby establish a joint research committee (the "Joint Research and Development Committee" or the "JRDC"). + +(a) Composition. The JRDC shall consist of three representatives of each Party that have knowledge and expertise in the Research and Development of pharmaceutical or biologic products in the Field. + +(b) Function and Powers. The JRDC shall have the following responsibilities: + +(i) prepare each Research Plan and Development Plan, and the Research Budget and Development Budget therein, respectively, and amendments to the foregoing in accordance with Section 5.2(d); + +(ii) oversee the implementation of each Research Plan and Development Plan; + +(iii) monitor, coordinate and evaluate the activities and performance of the Parties under each Research Plan and Development Plan[***]; + +(iv) following completion of early Development activities for a Product, determine whether to further develop such Product for Regulatory Approval; + +(v) if the JRDC determines to further Develop a Product for Regulatory Approval, develop the Data Package for such Product in accordance with Section 5.2(c); + +(vi) provide a forum for and facilitate communications between the Parties with respect to the Research and Development of the SHP2 Inhibitors and Products; 20 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +(vii) review and approve a format for the expense reports to be provided by RevMed to Sanofi pursuant to Section 4.5 and Section 5.5; + +(viii) monitor and coordinate all regulatory actions, communications and submissions for the SHP2 Inhibitors and Products allocated to each Party under the Development Plans; + +(ix) oversee and coordinate the Manufacturing of the SHP2 Inhibitors and Products for clinical supply in accordance with Article VII, unless the JSC designates a manufacturing committee or subcommittee to perform such activities; + +(x) establish other subcommittees, as appropriate, to carry out its functions; and + +(xi) perform such other functions as determined by the JSC to further the purposes of this Agreement with respect to the Research and Development of SHP2 Inhibitors and Products, except where in conflict with any provision of this Agreement. + +(c) Decision-Making. Notwithstanding anything to the contrary in Section 2.10(a), if the JRDC is unable to reach unanimous agreement on the following matters then such matters shall not be submitted for resolution to the JSC and shall instead be subject to Sanofi's final decision-making power: [***]. + +2.4 Joint Commercialization Committee. The Parties shall establish a joint commercialization committee (the "Joint Commercialization Committee" or "JCC") no later than the date that is [***] prior to the anticipated submission of the first NDA for the first Product. + +(a) Composition. The JCC shall consist of three representatives of each Party that have knowledge and expertise in the commercialization of pharmaceutical or biologic products in the Field. + +(b) Function and Powers. The JCC shall monitor and oversee the Commercialization activities (and certain Manufacturing activities as provided hereunder) of the SHP2 Inhibitors and Products and in particular have the following responsibilities: + +(i) coordinate the messaging and branding strategy for Products in the United States; + +(ii) coordinate the activities of the Parties under the Commercialization Plan and oversee the implementation of the Commercialization Plan; + +(iii) if the Co-Promotion Option has been exercised, coordinate the activities of the Parties under the applicable Co-Promotion Agreement and oversee the implementation of such Co-Promotion Agreement; + +(iv) review and discuss the Commercialization Plans and amendments thereto in accordance with Section 8.2; 21 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +(v) provide a forum for and facilitate communications between the Parties with respect to the Commercialization of the Products in the United States; + +(vi) oversee and coordinate the Manufacturing of the SHP2 Inhibitors and Products for commercial supply in the United States in accordance with Article VII, unless the JSC designates a manufacturing committee or subcommittee to perform such activities; + +(vii) establish subcommittees, as appropriate, to carry out its functions; and + +(viii) perform such other functions as determined by the JSC to further the purposes of this Agreement with respect to the Commercialization of the Products, except where in conflict with any provision of this Agreement. + +2.5 Joint Patent Committee. The Parties shall establish a joint patent committee ("Joint Patent Committee" or "JPC"). + +(a) Composition. The JPC shall be composed of one patent counsel representing Sanofi, one patent counsel representing RevMed, (who may be internal or outside counsel to RevMed), and up to two additional representatives of each Party that have knowledge and expertise in patent prosecution of pharmaceutical or biologic products. + +(b) No Power or Authority; Function. The JPC shall not have any power or authority (including decision making) with respect to Collaboration matters. Rather, the JPC shall serve as an information-sharing forum for the Parties with respect to the following: + +(i) the filing, prosecution, and maintenance of the RevMed Licensed Patents and Joint Program Patents, including deadlines for responses to patent authorities and Sanofi's proposed timelines for submission of comments to patent authorities; + +(ii) any periodic reports or updates for Collaboration-related intellectual property matters as may be requested by the JRDC; + +(iii) strategy for patent term extensions to extend exclusivity in the Licensed Territory and for listings in the FDA's Approved Drug Products with Therapeutic Equivalence Evaluations (known as the "Orange Book") and its foreign counterparts; + +(iv) confer regarding any related information to ensure the Parties' compliance with the 37 C.F.R. 1.56 duty of disclosure as it relates to SHP2 Inhibitors or SHP2 inhibition; and + +(v) such other intellectual property-related matters as determined by the JSC to further the purposes of this Agreement, except where in conflict with any provision of this Agreement. + +2.6 Joint Manufacturing Committee. The Parties shall establish a joint manufacturing committee ("Joint Manufacturing Committee" or "JMC"). 22 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +(a) Composition. The JMC shall consist of three representatives of each Party that have knowledge and expertise in the manufacture or supply management of pharmaceutical or biologic products in the Field. + +(b) No Power or Authority; Function. The JMC shall not have any power or authority (including decision making) with respect to Collaboration matters. Rather, the JMC shall serve as an information-sharing forum for the Parties with respect to the following: + +(i) transfer of the Manufacturing Know-How in accordance with Section 7.2 hereof; + +(ii) periodic reports or updates for Collaboration-related Manufacturing matters as may be requested by the JSC; + +(iii) logistical strategies, capacity planning and inventory levels for each Product for consistency with the then-current Development Plans and Commercialization Plans for such Product; + +(iv) results of regulatory inspections related to Products and steps taken by the concerned Party to address any Manufacturing deficiencies noted; + +(v) such other functions as may be agreed upon by the Parties to further the purposes of this Agreement, except where in conflict with any provision of this Agreement. + +2.7 Limitation of Committee Authority. Each Committee shall only have the powers expressly assigned to it in this Article II and elsewhere in this Agreement and shall not have the authority to: (a) modify or amend the terms and conditions of this Agreement; (b) waive either Party's compliance with the terms and conditions of this Agreement; or (c) determine any issue in a manner that would conflict with the express terms and conditions of this Agreement. + +2.8 Committee Membership and Meetings. + +(a) Committee Members. The initial members of each Party on each Committee (other than the JCC) as of the Effective Date are set forth in Exhibit F of the Correspondence. Each Party may replace its representatives on any Committee by written notice to the other Party. Each Committee representative shall have appropriate knowledge and expertise and sufficient seniority within the applicable Party to make decisions arising within the scope of the applicable Committee's responsibilities. A particular individual may serve as a Party's representative on more than one Committee, provided that such individual satisfies the requirements of the preceding sentence for each applicable Committee. Each Party shall appoint one of its representatives on each Committee to act as a co-chairperson of such Committee. The Alliance Managers shall be responsible for calling any regularly scheduled meetings for each Decision-Making Committee on no less than [***] notice and shall also jointly prepare and circulate agendas for each Decision-Making Committee meeting no less than [***] prior to such meeting. In addition, members of each Decision-Making Committee may request that the Alliance Managers schedule and facilitate ad hoc meetings. The Alliance Managers shall jointly prepare and circulate reasonably detailed minutes for each Decision-Making Committee meeting within [***] of such meeting. For the avoidance of doubt, meetings of the JPC shall not require any formal agenda or preparation or circulation of any minutes unless otherwise agreed by the Parties. 23 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +(b) Meetings. + +(i) Decision-Making Committees. Each Decision-Making Committee shall meet in accordance with a schedule established by mutual written agreement of both Parties, but no less frequently than [***]. Meetings of any Decision-Making Committee will be held in person, at locations to be alternately selected by each Party, with [***] deciding the location for the first such meeting of each Decision-Making Committee. Alternatively, each Decision-Making Committee may meet by means of teleconference, videoconference, or other similar communications equipment; provided, however, to the extent practicable at least [***] meetings of each Decision-Making Committee per [***] should be conducted in-person. A meeting shall be deemed to be "in-person" as long as one representative of each Party is participating in person; for clarity, other representatives of such Party may participate remotely during an "in person" meeting as provided under this subsection. Each Party shall be responsible for all of its own expenses of participating in any Decision-Making Committee. No action taken at any meeting of a Decision-Making Committee shall be effective unless at least one representative of each Party is participating. + +(ii) JPC and JMC. The JPC and JMC shall hold meetings as agreed upon by both Parties but in no event less frequently than [***]. Meetings of the JPC and JMC will be held by telephone, video conference or similar means in which each participant can hear what is said by, and be heard by, the other participants, unless the Parties agree to meet in person. + +(c) Non-Member Attendance. Each Party may from time to time invite a reasonable number of participants, in addition to its representatives, to attend the Committee meetings in a non-voting capacity; provided that if either Party intends to have any Third Party (including any consultant) attend such a meeting, such Party shall provide prior written notice to the other Party and shall ensure that such Third Party is bound by confidentiality and non-use obligations consistent with the terms of this Agreement. + +2.9 Continuity of Representation. Notwithstanding the Parties' respective rights to replace its Alliance Manager and members of Committees by written notification to the other Party, each Party shall strive to maintain continuity in the representation of such Alliance Manager and Committee members. + +2.10 Decision-Making. + +(a) All decisions of each Decision-Making Committee shall be made by unanimous vote, with each Party's representatives collectively having one vote (such vote to be cast by the Party's co-chair to the extent such Party's representatives do not unanimously agree on a decision). If after reasonable discussion and good faith consideration of each Party's view on a particular matter before a Decision-Making Committee, the representatives of the Parties cannot reach an agreement as to such matter within [***] after such matter was brought to such Decision-Making 24 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +Committee for resolution or after such matter has been referred to such Decision-Making Committee, such disagreement shall, upon the written request of either Party, be referred to the JSC (in the case of disagreement of the JRDC, JCC or subcommittees of the JSC), or the Designated Senior Officers (in the case of disagreement of the JSC) for resolution, in each case, to discuss such matter in good faith for resolution. If the Designated Senior Officers cannot resolve any matter referred to them by the JSC within [***] after such matter has been referred to them, then such matters shall be finally and definitively resolved as set forth in Section 2.10(b) or otherwise by consensus. The Parties may by mutual written agreement determine to shorten the timeframes specified above in this Section 2.10. If any decision-making authority assigned to any Committee necessarily extends beyond the term of such Committee as set forth in Section 2.11, then such decision making authority shall be automatically transferred to Sanofi. + +(b) For any matters submitted for resolution by the Designated Senior Officers, the Designated Senior Officer of Sanofi shall have final decision- making power with respect to such matter; provided that the Designated Senior Officer of Sanofi shall not have the right to exercise its final decision- making authority without RevMed's consent to: + +(i) [***] + +(ii) [***] + +(iii) [***] or + +(iv) [***]. Notwithstanding anything to the contrary in this Agreement, except as expressly set forth in Section 4.2(a)(i)(A) and, if applicable, Section 4.2(a)(i)(B), [***]: + +A. Sanofi cannot without cause exercise such final decision-making authority to [***] from one of its assigned activities under the applicable Research Plan or Development Plan and [***] similar activity; + +B. for any proposal to [***], the JRDC shall first use good faith efforts to [***], a pending amendment thereto or as otherwise determined by the JRDC, that [***]; and + +C. if [***] does not occur and if Sanofi [***] by [***] without RevMed's consent, then [***] for a period of [***] in which such [***], provided that RevMed shall use good faith efforts to [***] during [***], and provided further that Sanofi shall not be required to make any such [***] during [***]. Without limiting the foregoing, Sanofi shall be deemed to have cause to [***], for example, in the case of [***]. + +2.11 Discontinuation of Committees. The activities to be performed by each Committee shall solely relate to governance under this Agreement, and are not intended to be or involve the delivery of services. Each Committee shall continue to exist until the Parties mutually agree to disband such Committee, or if RevMed provides Sanofi with written notification of its decision to discontinue its participation in such Committee; provided that (a) the JPC shall disband upon [***], (b) the JCC shall disband if [***]; (c) the JRDC shall disband upon [***]; and (d) the JMC shall disband upon [***]. If a Committee is so disbanded, such Committee shall have no further obligations under this Agreement and, thereafter, the Alliance Managers shall be the contact persons for the exchange of information under this Agreement and decisions of such 25 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +Committee shall be decisions of Sanofi. Upon disbandment of the JRDC, JCC, JPC or JMC or at any time in the JSC's discretion, the JSC may assume from the JRDC, JCC, JPC or JMC any and all of such Committees' respective responsibilities. Notwithstanding anything to the contrary in Section 2.8(b)(i), following substantial completion of RevMed's activities under the Research Plan and Development Plan, the JRDC shall meet no less frequently than [***], provided that there are bona fide agenda items for such meetings. If RevMed undergoes a Change of Control following substantial completion of RevMed's activities under the Research Plan and Development Plan, [***] may, in its sole discretion, [***]. The JSC shall disband if all other Committees have disbanded. + +Article III. + +LICENSE + +3.1 Licenses and Option to Sanofi. + +Licenses. Subject to the terms and conditions of this Agreement, RevMed hereby grants to Sanofi an exclusive (even as to RevMed and its Affiliates), royalty-bearing license (which shall be sub-licensable solely as provided in Section 3.4) under the RevMed Licensed Technology, to Research, Develop, Manufacture, use, sell, offer for sale, import and otherwise Commercialize and exploit Products (including, for clarity, any Companion Diagnostics with respect to such Products) in the Field in the Licensed Territory. + +(a) Option. + +(i) Option. Subject to the terms and conditions of this Agreement, RevMed hereby grants to Sanofi an exclusive option, under the Patent Rights and Know-How claiming or embodied in the [***]. + +(ii) Exercise. Sanofi may exercise its Option at any time during the Term by providing RevMed with written notice of such exercise. During the Term prior to the Option exercise by Sanofi, RevMed shall provide to Sanofi any additional information Controlled by RevMed that is reasonably requested by Sanofi in order to assist Sanofi in determining whether to exercise its Option. If Sanofi so exercises its Option pursuant to this Section 3.1(b)(ii), [***]. Upon Sanofi's exercise of the Option, [***] accordingly subject to the license granted to Sanofi under Section 3.1(a) and the payment obligations therefor pursuant to this Agreement. + +3.2 License to RevMed. Subject to the terms and conditions of this Agreement, Sanofi hereby grants to RevMed a non-exclusive, royalty-free sublicense (which shall only be further sub-licensable (a) to RevMed's Subsidiaries, (b) to the Permitted Contractors or Researchers, and (c) solely with Sanofi's prior written consent, such consent not to be unreasonably withheld, delayed or conditioned, to Third Parties who are not Permitted Contractors or Researchers) under the rights exclusively licensed to Sanofi pursuant to Section 3.1, solely to the extent necessary for RevMed to perform its obligations under this Agreement and the Ancillary Agreements. + +3.3 Retained Rights; Residuals. RevMed hereby retains subject to Section 3.5(b), all rights in and to the RevMed Licensed Technology other than the rights expressly licensed to Sanofi thereunder pursuant to Section 3.1. Notwithstanding the foregoing, each Party shall have the right to use [***]. Notwithstanding anything to the contrary in this Agreement, nothing shall [***]. 26 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +3.4 Sublicense and Subcontracting Rights. Subject to the terms and conditions of this Agreement: + +(a) Subject to Section 3.4(c) below, Sanofi may exercise its rights and perform its obligations under this Agreement by itself or through the engagement of any of its Affiliates without RevMed's consent. For the avoidance of doubt, RevMed shall not have any responsibility for any taxes relating to or arising out of the engagement of Sanofi's Affiliates or Sanofi's use of subcontractors, except for any taxes to the extent that RevMed would have incurred such taxes even in the absence of such engagement of Sanofi's Affiliates or Sanofi's use of subcontractors. + +(b) Sanofi shall have the right to grant sublicenses (through multiple tiers) under the rights granted to it under Section 3.1 to one or more Third Parties (i) outside of the United States, and (ii) in the United States; provided that for purposes of subsection (ii), Sanofi shall not sublicense substantially all of the rights granted to it under Section 3.1 in the United States to Third Parties without RevMed's prior written consent, such consent not to be unreasonably withheld, delayed or conditioned. + +(c) Subject to the remainder of this Section 3.4(c), (i) Sanofi may subcontract to Third Parties the performance of Sanofi's tasks and obligations with respect to the Research, Development, Manufacture and Commercialization of any Product as Sanofi deems appropriate (ii) RevMed may subcontract to the Permitted Contractors or Researchers listed on Exhibit B of the Correspondence as of the Effective Date the performance of RevMed's tasks and obligations with respect to the Research, Development, Manufacture and Commercialization of any Product, and (iii) RevMed shall not, without the prior written approval of Sanofi, otherwise subcontract to Third Parties the performance of RevMed's tasks and obligations with respect to the Research, Development, Manufacture and Commercialization of any Product. If Sanofi approves a Third Party subcontractor of RevMed following the Effective Date, or such Third Party is named in the Research Plan or the Development Plan, then RevMed, unless otherwise explicitly waived by the Sanofi Alliance Manager, shall enter into a written agreement with such Third Party substantially in a form approved by Sanofi and such Third Party shall be deemed a Permitted Subcontractor or Researcher under this Agreement. Each Party shall remain liable for any action or failure to act by its Affiliates, Sublicensees or subcontractors to whom such Party's obligations under this Agreement have been delegated, subcontracted or sublicensed and which action or failure to act would constitute a breach of this Agreement if such action or failure to act were committed by such Party. Such Party shall require that such Affiliates, Sublicensees and subcontractors agree in writing to comply with the applicable terms and conditions of this Agreement. Without limiting the foregoing, if a Party first engages a subcontractor after the Effective Date to perform any activities assigned to it under this Agreement, such Party shall require that such subcontractor be bound by written obligations of confidentiality and non-use consistent with this Agreement and shall have agreed to assign to the Party engaging such subcontractor (or, if an assignment cannot be made, grant an irrevocable, perpetual, fully-paid, exclusive, royalty-free, worldwide license to such Party, with the right to sublicense through multiple tiers, to Research, Develop, Manufacture, Commercialize and otherwise exploit SHP2 Inhibitors and Products) under all Program Inventions made by such subcontractor in the course of performing such subcontracted work that relate to any Products or their use, manufacture or sale. 27 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +3.5 SHP1-SHP2 Dual Inhibitors. + +(a) Except pursuant to or as expressly permitted by this Agreement, RevMed shall not, shall cause its Affiliates not to, conduct or agree to conduct, outside of the Collaboration, on its own or together with one or more Third Parties, the Research, Development or Commercialization of any product that contains a SHP2 Inhibitor, including any SHP1-SHP2 Dual Inhibitor that [***]. For purposes of this Section, [***]. + +(b) If [***] (such determination, the "SHP1-SHP2 Dual Inhibitor Licensing Decision" and such Third Party's rights, the "SHP1-SHP2 Dual Inhibitor License Rights"), then prior to commencing any negotiations with any Third Party with regard to any SHP1-SHP2 Dual Inhibitor License Rights, RevMed shall promptly notify Sanofi in writing of such SHP1-SHP2 Dual Inhibitor Licensing Decision and provide to Sanofi a detailed summary of the data then in RevMed's Control regarding the relevant SHP1-SHP2 Dual Inhibitor. Sanofi shall notify RevMed in writing (a "Notice of Interest"), within [***] after Sanofi's receipt of such notice, if Sanofi desires to enter into negotiations with RevMed of the terms under which Sanofi would obtain SHP1-SHP2 Dual Inhibitor License Rights. If Sanofi provides a Notice of Interest to RevMed within [***], then (i) RevMed shall, upon request of Sanofi, provide Sanofi with reasonable access to all other then-existing Know-How in RevMed's Control that exists in either paper or electronic form and pertains to the relevant SHP1-SHP2 Dual Inhibitor and (ii) the Parties shall negotiate exclusively in good faith and on a commercially reasonable basis the terms of a definitive agreement under which Sanofi would be granted SHP1-SHP2 Dual Inhibitor License Rights for [***] after RevMed receives such Notice of Interest (such period, the "SHP1-SHP2 Dual Inhibitor Licensing Negotiation Period"). If Sanofi provides such Notice of Interest during [***], then RevMed shall not negotiate with any Third Party the terms under which such Third Party would obtain any development or commercialization rights with respect to a SHP1-SHP2 Dual Inhibitor during the SHP1-SHP2 Dual Inhibitor Licensing Negotiation Period. If (x) Sanofi does not provide a Notice of Interest within [***] or (y) Sanofi does provide a Notice of Interest within [***] but Parties have not entered into an agreement under which Sanofi is granted SHP1-SHP2 Dual Inhibitor License Rights prior to the expiration of the SHP1-SHP2 Dual Inhibitor Licensing Negotiation Period, then RevMed shall have no further obligations to Sanofi with respect to such SHP1-SHP2 Dual Inhibitor Products, and RevMed shall have the right to enter into negotiations and execute an agreement with a Third Party under which such Third Party is granted the SHP1-SHP2 Dual Inhibitor License Rights [***]. For clarity, the Parties' rights and obligations under this Section 3.5(b) shall apply one time only, upon the occurrence of the first SHP1-SHP2 Dual Inhibitor Licensing Decision. + +3.6 No Implied Licenses. Except as expressly set forth herein, neither Party shall acquire any license or other intellectual property interest, by implication or otherwise, under or to any trademarks, Patents, Know-How, or other intellectual property rights Controlled by the other Party. For clarity, any exclusive license granted to each Party under any particular Patent Rights or Know-How Controlled by the other Party shall confer exclusivity to the Party obtaining such license only to the extent the Party granting such license Controls the exclusive rights to such Patent Rights or Know-How. 28 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +3.7 Technology Transfers. + +(a) Initial. As of the Effective Date RevMed shall have included in the electronic dataroom for this Agreement: (i) all Know-How in its Control that is necessary or useful to the Research, Development, Manufacture, Commercialization or other exploitation of the Development Candidate on Exhibit I of the Correspondence that currently exists in either paper or electronic form (the "Initial Know-How") and (ii) a complete, accurate and detailed index of all other SHP2 Inhibitors which RevMed, as of the Effective Date, has made or had made and all related Know-How in RevMed's Control, which consists of the data regarding the structure and biochemical and other characteristics of such SHP2 Inhibitors that currently exists in RevMed's database(s) (the "Index"). + +(b) Ongoing. Following the Effective Date, RevMed shall disclose to the JRDC on a [***] basis all RevMed Licensed Know-How created, generated, invented or developed by or on behalf of RevMed under the Collaboration. In addition, upon Sanofi's reasonable written request, RevMed shall deliver to Sanofi updates to the Index, and related RevMed Licensed Know-How, including the data regarding the structure and biochemical and other characteristics of such SHP2 Inhibitors that then exists in RevMed's database(s). + +(c) Breach of Section 3.7(a) or 3.7(b) by RevMed. Notwithstanding anything to the contrary in Section 12.2(b), in the event Sanofi believes RevMed has materially breached Section 3.7(a) or 3.7(b), Sanofi shall so notify RevMed in writing. RevMed may, within [***] following receipt of such notice from Sanofi, request that [***]. + +3.8 Government Approvals. + +(a) Efforts. Each of RevMed and Sanofi will use its commercially reasonable good faith efforts to remove promptly any and all impediments to consummation of the transaction contemplated by this Agreement, including obtaining government antitrust clearance, cooperating in good faith with any Governmental Authority investigation, promptly producing any documents and information and providing witness testimony if requested by a Governmental Authority. Notwithstanding anything to the contrary in this Agreement, this Section 3.8 and the term "commercially reasonable good faith efforts" do not require that either Party (i) offer, negotiate, commit to or effect, by consent decree, hold separate order, trust or otherwise, the sale, divestiture, license or other disposition of any capital stock, assets, rights, products or businesses of RevMed or Sanofi or its Affiliates, (ii) agree to any restrictions on the businesses of RevMed or Sanofi or its Affiliates, or (iii) pay any amount or take any other action to prevent, effect the dissolution of, vacate, or lift any decree, order, judgment, injunction, temporary restraining order, or other order in any suit or proceeding that would otherwise have the effect of preventing or delaying the transaction contemplated by this Agreement (collectively, an "Antitrust Remedy"), where such Antitrust Remedy would represent a Material Adverse Event for RevMed or Sanofi. + +(b) HSR/Antitrust Filings. Each of RevMed and Sanofi will, within [***] after the execution of the Agreement (or such later time as may be agreed to in writing by the Parties) file with the U.S. Federal Trade Commission ("FTC") and the Antitrust Division of the U.S. Department of Justice ("DOJ") any HSR/Antitrust Filing required of it under the HSR Act and, as soon as practicable, file with the appropriate Governmental Authority any other 29 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +HSR/Antitrust Filing required of it under any other Antitrust Law as determined in the reasonable opinion of either Party with respect to the transactions contemplated by the Agreement and Ancillary Agreements. The Parties shall cooperate with one another to the extent necessary in the preparation of any such HSR/Antitrust Filing. Each Party shall be responsible for its own costs, expenses, and filing fees associated with any HSR/Antitrust Filing; provided, however, that Sanofi shall bear solely all fees (other than penalties that may be incurred as a result of actions or omissions on the part of a Party, which penalties shall be the sole financial responsibility of such Party), required to be paid to any Governmental Authority in connection with making any such HSR/Antitrust Filing. In the event that the Parties make an HSR/Antitrust Filing under this Section 3.8, this Agreement shall terminate (i) at the election of either Party, immediately upon notice to the other Party, in the event that the FTC, DOJ or other Governmental Authority obtains a preliminary injunction or final order under Antitrust Law enjoining the transactions contemplated by the Agreement, or (ii) at the election of either Party, immediately upon notice to the other Party, in the event that the Antitrust Clearance Date shall not have occurred on or prior to [***] after the date upon which a HSR/Antitrust Filing has been submitted by each Party to a Governmental Authority in relation to the Agreement. Notwithstanding anything to the contrary contained herein, except for the terms and conditions of this Section 3.8, none of the terms and conditions contained in this Agreement shall be effective until the "Effective Date," which is agreed and understood to mean, subject to the Closing Conditions having been fulfilled or waived in accordance with Section 13.6, the later of (A) if a determination is made pursuant to this Section 3.8 that an HSR/Antitrust Filing is not required to be made under any Antitrust Law for this Agreement, the date of such determination, or (B) if a determination is made pursuant to this Section 3.8 that an HSR/Antitrust Filing is required to be made under any Antitrust Law for this Agreement, the Antitrust Clearance Date. As used herein: (1) "Antitrust Clearance Date" means the earliest date on which the Parties have actual knowledge that all applicable waiting periods under the HSR Act and any comparable waiting periods as required under any other Antitrust Law, in each case with respect to the transaction contemplated by this Agreement have expired or have been terminated; and (2) "HSR/Antitrust Filing" means (x) a filing by RevMed and a filing by Sanofi with the FTC and the DOJ of a Notification and Report Form for Certain Mergers and Acquisitions (as that term is defined in the HSR Act), together with all required documentary attachments thereto or (y) any comparable filing by RevMed or Sanofi required under any other Antitrust Law, in each case ((x) and (y)) with respect to the transaction contemplated by this Agreement. + +(c) Information Exchange. Each of RevMed and Sanofi will, in connection with any HSR/Antitrust Filing, (i) reasonably cooperate with each other in connection with any communication, filing or submission and in connection with any investigation or other inquiry, including any proceeding initiated by a private party; (ii) keep the other Party and/or its counsel informed of any communication received by such Party from, or given by such Party to, the FTC, the DOJ or any other U.S. or other Governmental Authority and of any communication received or given in connection with any proceeding by a private party, in each case regarding the transaction contemplated by this Agreement; (iii) consult with each other in advance of any meeting or conference with the FTC, the DOJ or any other Governmental Authority or, in connection with any proceeding by a private party, with any other Person, and to the extent permitted by the FTC, the DOJ or such other Governmental Authority or other Person, give the Parties and/or their counsel the opportunity to attend and participate in such meetings and conferences; and (iv) to the extent practicable, permit the other Party and/or its counsel to review in advance any submission, filing or communication (and documents submitted therewith) 30 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +intended to be given by it to the FTC, the DOJ or any other Governmental Authority; provided, that materials may be redacted to remove references concerning the valuation of the business of the disclosing Party or other sensitive information in the judgment of such disclosing Party. RevMed and Sanofi, as each deems advisable and necessary, may reasonably designate any competitively sensitive material to be provided to the other under this Section 3.8 as "Antitrust Counsel Only Material." Such materials and the information contained therein shall be given only to the outside antitrust counsel of the recipient and will not be disclosed by such outside counsel to employees, officers or directors of the recipient unless express permission is obtained in advance from the source of the materials (RevMed or Sanofi, as the case may be) or its legal counsel. + +Article IV. + +RESEARCH + +4.1 General. Subject to the terms and conditions of this Agreement, the Parties will conduct a research program for the identification, validation and optimization of SHP2 Inhibitors (including without limitation back-up compound chemistry and characterization, pre-clinical studies, and translation and biomarker studies) pursuant to a research plan (such plan, the "Research Plan"). + +4.2 Research Plan. + +(a) Research Plan and Budget. + +(i) Initial. As of the Effective Date, the Parties have agreed on an initial Research Plan and Research Budget for Calendar Years 2018, 2019 and 2020, which is set forth in Exhibit H of the Correspondence. + +A. Calendar Year 2018. The initial Research Plan and Research Budget for Calendar Year 2018 are final and may only be amended or modified by mutual agreement of the Parties (i.e., Sanofi shall not have the unilateral right, either directly or through its participation in the JRDC or the JSC, including by exercising its final decision-making power under Section 2.10(b), [***]). + +B. Calendar Years 2019 and 2020. The initial Research Budget for Calendar Years 2019 and 2020 included in Exhibit H of the Correspondence represents, as of the Effective Date, what the Parties believe to be a reasonable estimate of the Research Budget for Calendar Years 2019 and 2020 and shall become final only if the Parties mutually agree in writing with respect to the detailed Research activities and timelines to be set forth in the Research Plan for Calendar Years 2019 and 2020. Upon any such mutual agreement, such Research Plan and Research Budget may only be amended or modified by mutual agreement of the Parties (i.e., Sanofi shall not have the right to exercise its final decision-making power under Section 2.10(b), [***]. If the Parties do not reach such mutual agreement and Sanofi exercises its final decision-making power under Section 2.10(b) [***]. For clarity, if the Parties mutually agree upon activities under the Research Plan for a Research Budget equal to or greater than that set forth in Exhibit H of the Correspondence then Section 4.5(b) shall apply and Sanofi shall be responsible for 80% of the Research and Development Costs and RevMed shall be responsible for 20% of the Research and Development Costs, provided that Sanofi shall be responsible for [***]% of the Research and Development Costs associated with [***]. 31 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +C. Calendar Year 2021 and Beyond. The Research Plan and Research Budget for Calendar Year 2021 and any Calendar Year after 2021 shall be subject in all respects to the governance set forth in Article II (including Sanofi's final decision-making power under Section 2.10(b) and the procedure for amendments set forth in Section 4.2(a)(ii)). + +(ii) Amendments. From time to time after the Effective Date, the JRDC may propose any amendment to the Research Plan, which shall be made in good faith, based on scientific and regulatory judgment. The Research Plan shall set forth: (a) the Research activities to be conducted by either Party; (b) the estimated timelines for such Research activities; and (c) a detailed budget setting forth the estimated RevMed R&D Costs to be incurred in connection with such activities (the "Research Budget"). If the terms of the Research Plan contradict, or create inconsistencies or ambiguities with, the terms of this Agreement, then the terms of this Agreement shall govern. + +(b) Conduct of Research. Each Party shall perform all Research activities under this Agreement in compliance with all Applicable Law (including GMP, GLP and GCP). In furtherance and not in limitation of the foregoing, RevMed shall use diligent efforts to conduct its activities under each Research Plan in accordance with the terms of such Research Plan (including timelines), as the same may be amended from time to time (and which basis for comparison shall be tolled until any then-contemplated or pending amendments are completed or for the duration of any bona fide dispute between the Parties with respect to a Research Plan or amendment thereto), and this Agreement. If Sanofi believes RevMed has materially breached its obligation in the foregoing sentences with respect to any Product, Sanofi shall so notify RevMed in writing. If either RevMed agrees or it is determined in accordance with [***], that RevMed has committed a material breach of its obligations under this Section 4.2(b) with respect to such Product, the JRDC shall, within [***] after such agreement on or determination of material breach, meet in person or by teleconference to discuss such material breach and specify reasonable actions that RevMed should take to cure such material breach. If RevMed fails to commence within [***] after such discussion occurs such actions recommended by the JRDC, or fails to cure any such material breach within [***] after the JRDC meets (or such longer timeframe as the JRDC decides is necessary to complete the actions specified by the JRDC), then Sanofi shall have the right, without prejudice to any other rights or remedies Sanofi may have under this Agreement or otherwise at law or in equity, [***]. In such case, RevMed shall, [***], (i) make available [***], (ii) provide [***], and (iii) otherwise provide [***]. + +4.3 Designation of Development Candidates As of the Effective Date, the Parties agree that the SHP2 Inhibitor set forth on Exhibit I of the Correspondence is deemed a Development Candidate (defined below) under this Agreement. From time to time, either Party may nominate one or more additional SHP2 Inhibitors to the JRDC for consideration as a candidate for Development under a Development Plan (the "Development Candidate"). Such nomination (and approval thereof by the JRDC) shall be made prior to the initiation of the IND-enabling studies for such SHP2 Inhibitor(s), unless otherwise permitted by the JRDC. Promptly after such nomination, each Party shall present to the JRDC the data and results it has obtained with respect to such SHP2 Inhibitor(s) as well as, if requested by the other Party, written records maintained 32 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +by or on behalf of such Party or its Affiliates with respect to the discovery or development history of such SHP2 Inhibitor. The JRDC shall determine whether such SHP2 Inhibitor(s) shall be approved as a Development Candidate under this Agreement. The JRDC may also request that further Research activities be conducted with respect to such SHP2 Inhibitor(s) (under an amended Research Plan), after which activities such SHP2 Inhibitor(s) may be reconsidered for nomination as a Development Candidate. If the JRDC (or Designated Senior Officers, as applicable) approve a particular SHP2 Inhibitor as a Development Candidate, then the Parties shall proceed to conduct further Development of such SHP2 Inhibitor (including IND-enabling studies, other pre-clinical and non-clinical studies, and clinical studies) pursuant to a Development Plan (as further described in Section 5.2) and under the oversight of the JRDC. In addition, at any time after a SHP2 Inhibitor is designated as a Development Candidate, if requested by Sanofi, RevMed shall make available written records (such as lab notebooks) maintained by or on behalf of RevMed or its Affiliates with respect to the discovery and/or development history of such SHP2 Inhibitor or any Product under Development that contains such SHP2 Inhibitor, provided that such request shall not be made more than once for each SHP2 Inhibitor or each Product, as applicable, except for cause. + +4.4 Research Records and Reports. Each Party shall maintain complete, current and accurate records of all Research activities conducted by it hereunder, and all data and other information resulting from such activities. Such records shall fully and properly reflect all work done and results achieved in the performance of the Research activities in good scientific manner appropriate for regulatory and patent purposes. Each Party shall keep the other Party reasonably informed as to its progress in the conduct of the Research activities through meetings of the JRDC. Upon written request from the JRDC, each Party shall submit to the JRDC a written summary (in slide format unless otherwise agreed by the Parties) of its Research activities since its prior report. + +4.5 Research Costs. + +(a) Calendar Years 2018, 2021 and All Calendar Years After 2021. Sanofi shall be responsible for 100% of the Research and Development Costs for Calendar Years 2018, 2021 and all Calendar Years after 2021. Sanofi will reimburse RevMed for any RevMed R&D Costs incurred by or on behalf of RevMed after the Execution Date in the performance of its activities under the Research Plan, provided that such RevMed R&D Costs are incurred per the Research Budget for such activities as approved by the JSC and [***] set forth in the Research Budget for the particular Calendar Quarter. Promptly following the end of each Calendar Quarter during which RevMed is responsible for activities under the Research Plan, but in no event later than [***] following the end of such Calendar Quarter, RevMed will provide to Sanofi a detailed expense report in form approved by the JRDC with respect to the RevMed R&D Costs incurred by or on behalf of RevMed during such Calendar Quarter consistent with the previous sentence (including, if requested by Sanofi in writing, copies of receipts or invoices from Third Parties for all RevMed R&D Out-of-Pocket Costs) together with an invoice for the same, provided that[***]. Sanofi will reimburse RevMed in Dollars all undisputed amounts within such expense reports under this Section 4.5 within [***] following receipt of the invoice therefor. RevMed shall invoice Sanofi for costs under this Section 4.5 on an accrual basis. 33 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +(b) Calendar Years 2019 and 2020. Subject to Section 4.2(a)(i)(B), Sanofi shall be responsible for 80% of the Research and Development Costs for Calendar Years 2019 and 2020 and RevMed shall be responsible for 20% of the Research and Development Costs for Calendar Years 2019 and 2020 (provided that such Research and Development Costs are incurred per the Research Budget for such activities as approved by the JSC and [***] set forth in the Research Budget for the particular Calendar Quarter). Research and Development Costs shall initially be borne by the Party incurring the cost or expense. Promptly following the end of each Calendar Quarter during Calendar Years 2019 and 2020, but in no event later than [***] following the end of such Calendar Quarter, each Party will provide to the JRDC a detailed expense report in form approved by the JRDC with respect to the Research and Development Costs incurred by or on behalf of such Party during such Calendar Quarter consistent with the previous sentence (including, if requested by Sanofi in writing, copies of receipts or invoices from Third Parties for all RevMed R&D Out-of-Pocket Costs). The Party that incurs more than its share of the total Research and Development Costs during any such Calendar Quarter shall deliver an invoice to the other Party for an amount of cash sufficient to reconcile to the invoicing Party's agreed percentage of Research and Development Costs. Such other Party will reimburse the invoicing Party in Dollars all undisputed amounts within such expense reports under this Section 4.5 in accordance with Section 9.5 mutatis mutandis. + +Article V. + +DEVELOPMENT + +5.1 General. Subject to the terms and conditions of this Agreement, the Parties will collaborate on the Development of the Products in the Field for Regulatory Approval under the direction of the JRDC and pursuant to the Development Plan, as set forth in more detail below. + +5.2 Development. + +(a) Development Plan and Budget. As of the Effective Date, the Parties have agreed on an initial Development Plan and Development Budget (each as defined below), which is set forth in Exhibit J of the Correspondence. After the Effective Date, for the Development Candidate listed in Exhibit J of the Correspondence, and at the time any other SHP2 Inhibitor is designated as a Development Candidate by the JRDC, the JRDC shall prepare and approve a Development plan for Products containing such SHP2 Inhibitor through Regulatory Approval of the Product from the FDA, EMA, or PMDA, as applicable, that includes the items described below (the "Development Plan"). The Development Plan for each Product shall set forth the timeline and details of: (i) all clinical Development activities to be conducted by the Parties that are designed to generate data sufficient to present to the FDA, EMA, and PMDA or other Regulatory Authority at the Pre-Registrational Meetings; (ii) the protocol synopsis for each Clinical Trial included in such Development Plan; (iii) a Manufacturing plan for the Manufacturing of the Product for such Clinical Trials; (iv) all additional clinical Development activities to be conducted by the Parties that are designed to generate data sufficient to seek Regulatory Approval of the Product from the FDA, EMA, or PMDA, as applicable, for the indication(s) to be pursued; (v) any other Development activities to be performed in order to obtain Regulatory Approval by the FDA, EMA, PMDA or the Regulatory Authority of any other jurisdiction; (vi) a detailed budget setting forth the estimated RevMed R&D Costs to be incurred in connection with such activities (the "Development Budget"); and (vi) the Party responsible for conducting each Development activity under such Development Plan. 34 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +(b) Conduct of Development. Each Party shall perform all Development activities under this Agreement in compliance with all Applicable Law (including GMP, GLP and GCP). In furtherance and not in limitation of the foregoing, RevMed shall use diligent efforts to conduct its activities under each Development Plan in accordance with the terms of such Development Plan (including timelines), as the same may be amended from time to time (and which basis for comparison shall be tolled until any then-contemplated or pending amendments are completed or for the duration of any bona fide dispute between the Parties with respect to a Development Plan or amendment thereto), and this Agreement. If either RevMed agrees or it is determined in accordance with [***] that RevMed has committed a material breach of its obligations under this Section 5.2(b) with respect to any Clinical Trial of a Product, the JSC shall, within [***] after such agreement on or determination of material breach, meet in person or by teleconference to discuss such material breach and specify reasonable actions that RevMed should take to cure such material breach. If RevMed fails to commence within [***] after such discussion occurs such actions recommended by the JSC, or fails to cure any such material breach within [***] after the JSC meets (or such longer timeframe as the JSC decides is necessary to complete the actions specified by the JSC), then Sanofi shall have the right, without prejudice to any other rights or remedies Sanofi may have under this Agreement or otherwise at law or in equity[***]. In such case, RevMed shall, [***], (i) make available [***], (ii) provide [***], (iii) provide [***], and (iv) otherwise provide [***]. + +(c) Pre-Registrational Meeting. After obtaining early Development data and results under the Development Plan for a particular Product, in the event the JRDC determines to further Develop such Product for Marketing Approval, the JRDC shall develop a package setting forth such data and results, a planned regulatory strategy for the Development of such Product for a defined indication in the Field, the protocol synopses for each Registrational Clinical Trial included in the applicable Registration Program, any other Development activities to be conducted in support of such regulatory strategy, any other materials as may be required by the FDA, EMA, or PMDA or other Regulatory Authority for the Pre-Registrational Meetings for the applicable Products, and the Party responsible for conducting each Development activity under such package (the "Data Package"). After developing such Data Package, the Parties shall conduct the Pre-Registrational Meetings as set forth in Section 6.3(a). + +(d) Development Plan Amendments. From time to time during the Term, the JRDC shall prepare amendments, as appropriate, to the then-current Development Plan. Subject to the foregoing, the JRDC shall have the right to approve amendments to the Development Plan, with final decision-making authority as provided in Section 2.10. Once approved by the JRDC, such amended Development Plan shall replace the prior Development Plan. + +5.3 Combination Therapies. + +(a) The JRDC shall discuss whether to include in the Development Plan for a Product the Development of such Product for use with other products to the extent not already provided for in the Development Plan (each, a "Combination Therapy"), including products developed or sold by a Third Party or that are in the public domain. Subject to this Section 5.3, each Party shall have the right to propose to the JRDC studies for co-development of Products with other products under the applicable Development Plan. 35 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +(b) The Development Plan shall address the conduct of any Clinical Trial for a Combination Therapy and shall (i) specify which Party will be responsible for each activity for the Development of such Combination Therapy and (ii) specify which Party will be responsible for obtaining supplies of the Product or other product in such Combination Therapy as necessary. The JRDC shall review and approve the terms of any agreement with a Third Party in connection with any supply or other aspect of Development of such Combination Therapy. + +5.4 Conflicts. If the terms of a Development Plan contradict, or create inconsistencies or ambiguities with, the terms of this Agreement, then the terms of this Agreement shall govern. + +5.5 Development Costs. + +(a) Sanofi will reimburse RevMed for RevMed R&D Costs incurred by or on behalf of RevMed after the Execution Date in the performance of its activities under the Development Plan, as applicable, provided that such RevMed R&D Costs are incurred per the Development Budget, as applicable, for such activities as approved by the JSC and do not exceed [***]% of the applicable amounts set forth in the Development Budget for the particular Calendar Quarter. Promptly following the end of each Calendar Quarter during which RevMed is responsible for activities under any Development Plan, but in no event later than [***] following the end of such Calendar Quarter, RevMed will provide to Sanofi a detailed expense report in form approved by the JRDC with respect to the RevMed R&D Costs incurred by or on behalf of RevMed during such Calendar Quarter consistent with the previous sentence (including, if requested by Sanofi in writing, copies of receipts or invoices from Third Parties for all RevMed Out-of-Pocket Costs) together with an invoice for the same, provided that [***]. Sanofi will reimburse RevMed in Dollars all undisputed amounts within such expense reports under this Section 5.5 within [***] following receipt of the invoice therefor. RevMed shall invoice Sanofi for costs under this Section 5.5 on an accrual basis. + +5.6 RevMed Studies. + +(a) RevMed or its Affiliates may propose to the JRDC that the Parties conduct a Clinical Trial of a Product in the Field that is not included in the Development Plan for such Product, in which case RevMed shall present the proposed design and projected costs of such Clinical Trial to the JRDC. If Sanofi agrees to include such Clinical Trial and related costs in the Development Plan and Development Budget for such Product, the Parties shall prepare an updated Development Plan and Development Budget and such Clinical Trial shall become part of the Collaboration and subject to this Agreement. + +(b) In the event Sanofi, through the JRDC, decides not to pursue a Clinical Trial that RevMed presents in accordance with Section 5.6(a), then (i) the matter will be escalated pursuant to Section 2.10 and (ii) notwithstanding anything to the contrary in Section 2.10(b), if such matter remains unresolved after the matter is escalated to Designated Senior Officers, then RevMed, subject to this Section 5.6(b), may elect to conduct such study, on its own and at its own expense, provided that if such study [***], RevMed shall not have the right to conduct such study unless Sanofi agrees in writing that RevMed may conduct such study (any such study so conducted, a "RevMed Study"). For purposes of determining whether subsections (x), (y) or (z) apply, RevMed shall, prior to commencing a RevMed Study, submit to the JRDC for comment and review 36 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +the protocol for such RevMed Study. Any disagreement among the JRDC members as to whether subsections (x), (y) or (z) apply shall be submitted for resolution to the Designated Senior Officers, provided that if the Designated Senior Officers do not agree on such matter, then RevMed shall not conduct such study. Provided that RevMed is permitted to conduct a RevMed Study, RevMed shall report to the JRDC on an ongoing basis any and all data arising from a RevMed Study (the "RevMed Study Data") and provide the JRDC with updates and any other information pertaining to any RevMed Study as may be requested by the JRDC. + +A. Sanofi shall have rights to use, at no additional cost, any RevMed Study Data in its performance of its obligations and exercise of its rights under the Collaboration except in connection with filing of MAAs for the Indication and Product Treatment Regimen that were the subject of such RevMed Study. + +B. If Sanofi wishes to use, or actually uses, RevMed Study Data in support of filing a MAA for the Indication and Product Treatment Regimen that were the subject of such RevMed Study, it shall notify RevMed in writing and shall make a buy-in payment to RevMed in Dollars equal to [***] within [***] after the date that Sanofi receives a detailed invoice from RevMed setting forth [***]. In such case the RevMed Study shall be deemed a Clinical Trial under the Collaboration for all purposes, including that all Know-How conceived, reduced to practice, developed, made or otherwise generated by or on behalf of RevMed or its Affiliates in the course of the RevMed Study activities shall be deemed Program Inventions hereunder. + +C. Each Party shall have rights to use RevMed Study Data for internal research and development outside the scope of the Collaboration. + +5.7 Diligence. Consistent with [***] or as otherwise agreed by the Parties, Sanofi shall use Commercially Reasonable Efforts [***] to file and seek approval for an MAA for at least one Product in all of such countries or, in the case of the Major Market Countries in the European Union, through the centralized European Union approval process. If Sanofi materially breaches its obligation set forth in this Section 5.7, [***]. + +5.8 Development Records. Each Party shall maintain complete, current and accurate records of all Development activities conducted by it hereunder, and all data and other information resulting from such activities, for at least [***] after the expiration or termination of this Agreement in its entirety or for such longer period as may be required by Applicable Law. Such records shall fully and properly reflect all work done and results achieved in the performance of the Development activities in good scientific manner appropriate for regulatory and patent purposes. Each Party shall document all non-clinical studies and Clinical Trials for Products in formal written study reports in accordance with Applicable Law and national and international guidelines (e.g., GCP, GLP, and GMP). Each Party shall have the right to review and copy such records maintained by the other Party at reasonable times and to obtain access to the original to the extent necessary for regulatory and patent purposes or for other legal proceedings. + +5.9 Data Exchange and Development Reports. In addition to adverse event and safety data reporting obligations pursuant to Section 6.5, each Party shall promptly provide the other Party with copies of all data and results generated by or on behalf of such Party in the course of performing the Development activities hereunder, including, in each case of data arising from 37 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +Clinical Trials for Products, or in such form as the JRDC may agree from time to time. Each Party shall provide the JRDC with regular reports detailing its Development activities for the Products, and the results of such activities at each regularly scheduled JRDC meeting. The Parties shall discuss the status, progress and results of each Party's Development activities at such JRDC meetings. + +5.10 Clinical Samples. The Party who sponsors the applicable Clinical Trial of SHP2 Inhibitors shall retain and archive all clinical samples obtained by such Party in the course of such Clinical Trial, and shall provide the other Party reasonable access to such retained clinical samples. + +Article VI. + +REGULATORY + +6.1 Regulatory Responsibilities. Subject to the Parties' cooperation as set forth in Section 6.3, and except as otherwise set forth in a Development Plan or this Article VI, Sanofi shall have the sole right and responsibility to perform all regulatory activities under the Collaboration (including conducting all correspondence and communications with Regulatory Authorities and filing all Marketing Authorization Applications and other filings with Regulatory Authorities). The Development Plan shall set forth the regulatory strategy for seeking Regulatory Approval for the Products in the Field by the FDA, EMA and other Regulatory Authorities in the Major Market Countries. + +6.2 Regulatory Materials and Database. All INDs in existence as of the Effective Date related to a Product shall be solely owned and held in the name of RevMed or its Affiliate for so long as necessary for RevMed to conduct any Clinical Trial for such Product it is responsible for under the Development Plan for such Product. Following the Effective Date, each Party shall file and hold the IND and NDA for all Products in Clinical Trials conducted by it. Once RevMed has completed conducting all Clinical Trials for a Product assigned to it under the Development Plan for such Product, RevMed agrees to assign, and hereby does assign, to Sanofi all of its rights, title and interests in and to all Regulatory Approvals (including INDs and NDAs) for such Product. + +6.3 Cooperation. For each Product, each Party shall cooperate reasonably with the other Party with respect to all regulatory activities under the Research Plan or Development Plans relating to the Products. Without limiting the foregoing, for such activities, each Party: + +(a) shall meet and discuss with the other Party through the JRDC the timing, strategy and presentation of the Pre-Registrational Meeting with the goal of developing the Registration Program and setting the regulatory path to obtain Regulatory Approval for the Product from the FDA, EMA, and PMDA; + +(b) shall consult with each other with respect to the preparation of the Data Package; + +(c) shall consult with the other Party through the JRDC regarding material regulatory matters pertaining to all Regulatory Materials of the Products in the United States, European Union and the Major Market Countries outside the European Union, including plans, strategies, filings, reports, updates and supplements in connection therewith and perform its responsibilities in connection with the preparation of the portion of such Regulatory Materials allocated to such Party for preparation in the Development Plan; 38 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +(d) shall provide the other Party with drafts of any Regulatory Materials for the Products to be submitted by such Party to any Regulatory Authority in the United States, European Union and the Major Market Countries outside the European Union within a reasonable time (but in no event less than [***], unless impractical) prior to submission for review and comment, and shall consider in good faith any comments received from the other Party; + +(e) shall provide the other Party with copies in electronic format (e.g., eCTD format) of any Regulatory Materials submitted to and any correspondence received from any Regulatory Authority in the United States, European Union and the Major Market Countries outside the European Union pertaining to the Products promptly after its submission or receipt by such Party; and + +(f) shall provide the other Party written minutes or other records of any material oral discussions with any Regulatory Authority in the European Union and the Major Market Countries outside the European Union pertaining to the Products promptly after any such discussion. + +If any Regulatory Material to be provided under this Section 6.3 was originally created in a language other than the English language, if requested by the receiving Party, the providing Party shall provide an English translation along with the original document to the receiving Party at the receiving Party's cost if such translation would not normally be made by the providing Party in accordance with its standard operating procedures. + +6.4 Meetings with Regulatory Authorities. The Development Plan shall set forth which Party shall lead and present at each meeting or teleconference with Regulatory Authorities for the applicable Product, provided that, notwithstanding the foregoing, RevMed shall lead and present at such meetings or teleconferences with respect to any RevMed Studies and for Clinical Trials conducted under RevMed's IND while RevMed remains the holder of such IND. The Party leading such regulatory interactions shall provide the other Party with advance notification of any in-person meeting or teleconference with the Regulatory Authorities that relates to the Development of any Product as promptly as possible after such meeting has been scheduled, but in no event less than [***] before the meeting is scheduled to occur. The Party leading such regulatory interactions shall, as applicable, seek permission from the Regulatory Authority for representatives of the other Party to attend any such meeting or teleconference, and such other Party shall have the right, but not the obligation, to have its representatives attend (but, unless otherwise requested by the Party responsible for such meeting, not participate in) such meetings. + +6.5 Adverse Events Reporting. Following the Effective Date, but in any case prior to the Initiation of the first Clinical Trial for a Product or earlier upon the written request of either Party, the Parties shall enter into a pharmacovigilance agreement setting forth the worldwide pharmacovigilance procedures for the Parties with respect to the Products, such as safety data sharing, adverse events reporting and safety profile monitoring (the "Pharmacovigilance Agreement"). Such procedures shall be in accordance with, and enable the Parties to fulfill, local and national regulatory reporting obligations under Applicable Law. Each Party shall be responsible for reporting quality complaints, adverse events and safety data related to the Products 39 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +to the applicable Regulatory Authorities in its territory, as well as responding to safety issues and to all requests of Regulatory Authorities related to the Products in its territory, in each case at its own cost. The initial global safety database shall be established by RevMed using its Permitted Contractors or Researchers, and RevMed shall, at RevMed's sole cost and expense, transfer such global safety database to Sanofi upon Sanofi's written request reasonably in advance of the desired transfer date, which transfer date shall be no later than [***] prior to the initiation of Sanofi's first Clinical Trial for a Product and in the form requested by Sanofi. Prior to such transfer RevMed shall provide to Sanofi all safety information obtained by RevMed for the Products prior to Sanofi's assumption of the global safety database. Each Party agrees to comply with its respective obligations under the Pharmacovigilance Agreement and to cause its Affiliates, and Sublicensees to comply with such obligations. + +6.6 Notification of Threatened Action. Each Party shall immediately notify the other Party of any information it receives regarding any threatened or pending action, inspection or communication by any Regulatory Authority, which may affect the safety or efficacy claims of any Product or the continued marketing of any Product. Upon receipt of such information, the Parties shall promptly consult with each other in an effort to arrive at a mutually acceptable procedure for taking appropriate action. + +6.7 Remedial Actions. Each Party shall notify the other immediately, and promptly confirm such notice in writing, if it obtains information indicating that any Product may be subject to any recall, corrective action, market withdrawal or other similar regulatory action with respect to the Product taken by virtue of Applicable Law (a "Remedial Action"). The Parties shall fully assist each other in gathering and evaluating such information as is necessary to determine the necessity of conducting a Remedial Action. Each Party shall, and shall ensure that its Affiliates, Sublicensees, (sub)contractors and Distributors shall, maintain adequate records to permit the Parties to trace the Manufacture, distribution and use of the Products, as required by Applicable Law. Sanofi shall have sole discretion with respect to any matters relating to any Remedial Action in the Licensed Territory, including the decision to commence such Remedial Action and the control over such Remedial Action, at its sole cost and expense; provided that to the extent such Remedial Action results from (a) the breach of RevMed's obligations hereunder or under any Ancillary Agreement or (b) the negligence, recklessness or willful misconduct of RevMed or its Affiliate, in each case, RevMed shall bear the costs and expenses of such Remedial Action. + +6.8 Compassionate Use. Promptly after the Pre-Registrational Meeting with the FDA, EMA, and PMDA for a particular Product (or in the case in which a Product is only being developed for the US or the EU, but not both, after the applicable FDA, EMA or PMDA Pre-Registrational Meeting) or at a time otherwise agreed by the Parties, the JRDC shall decide on a procedure for managing Product requests for compassionate use. + +6.9 Audit Vendors & Contractors. Each Party shall have in place standard operating procedures for their vendor management processes (including with respect to compliance). Each Party shall notify the other Party of any inspections of such Party or any of its Affiliates or subcontractors conducted by any Regulatory Authority or other government entity and any related findings to the extent that such inspections relate to the activities conducted hereunder. In addition, Sanofi shall have the right to conduct customary reviews and audits of RevMed and its Affiliates and subcontractors (provided that, with respect to Permitted Contractors or Researchers that 40 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +RevMed entered into a written agreements with prior to the Effective Date, such right of Sanofi shall be to the extent RevMed has the right to permit Sanofi to do so under such written agreements, and provided further, that RevMed shall use Commercially Reasonable Efforts to secure such right for Sanofi where one does not exist). + +Article VII. + +MANUFACTURING AND SUPPLY + +7.1 General. The Manufacture of the SHP2 Inhibitors and Products, including all process and formulation development in connection therewith, including Chemistry, Manufacturing and Controls (CMC) activities, shall be overseen and coordinated by (a) RevMed for clinical supply related to Phase 1 Clinical Trials, and Phase 2 Clinical Trials that are not Registrational Clinical Trials, and (b) Sanofi for supply of all Clinical Trials other than those set forth in clause (a) and all supply associated with Commercialization. If requested by the JMC, each Party shall provide reports summarizing its Manufacturing activities and the results of such activities. + +7.2 Transfer of Manufacturing Know-How. Upon Sanofi's request, RevMed shall transfer to Sanofi or its designee Know-How Controlled by RevMed that is necessary or useful to enable the Manufacture of each SHP2 Inhibitor that is nominated or designated as a Development Candidate pursuant to Section 4.3, Development Candidate and Product, including regulatory starting materials and key starting materials, as set forth in this Section 7.2. Sanofi may also request such Know-How for backup SHP2 Inhibitors that Sanofi is considering for nomination or designation as a Development Candidate, and RevMed shall transfer such Know-How to Sanofi (to the extent any exists). RevMed shall (a) at [***] cost, provide copies or samples of relevant documentation (including, but not limited to, documentation listed in Exhibit K of the Correspondence), materials and other embodiments of such Know-How, (b) at [***] cost (calculated on [***]), make available RevMed's qualified technical employees, and use Commercially Reasonable Efforts to make available the qualified technical personnel of RevMed's independent manufacturing contractors, in each case, on a reasonable basis to consult with Sanofi or its designee with respect to such Know-How, and (c) if requested by Sanofi, at [***] cost, use Commercially Reasonable Efforts to support Sanofi in the establishment of its own supply agreements with Third Party suppliers of RevMed. + +7.3 Supply Agreement. In each case where one Party shall Manufacture Product for the other Party for clinical use or commercial use, (with the cost and expense of the commercial supply of Product for the U.S. being subject to Section 9.4), the Parties shall negotiate in good faith to enter into a supply agreement (a "Supply Agreement") and a quality agreement (a "Quality Agreement") for such Manufacture on commercially reasonable terms. Such Supply Agreement shall cover the documentation and other quality requirements for the acceptance of previously manufactured supply of Product for use by the other Party. The price charged by the manufacturing Party under any Supply Agreement shall be equal to [***] unless otherwise agreed by the Parties. 41 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +Article VIII. + +COMMERCIALIZATION + +8.1 General. Subject to Section 8.7 and unless otherwise delegated to RevMed by the JCC, Sanofi shall have the sole right and responsibility, at its own expense, for all aspects of the Commercialization of the Products in the Field in the Licensed Territory including: (a) developing and executing a commercial launch and pre-launch plan, (b) negotiating with applicable Governmental Authorities regarding the pricing and reimbursement status of the Products; (c) marketing and promotion (including promotional materials); (d) booking sales and distribution and performance of related services; (e) handling all aspects of order processing, invoicing and collection, inventory and receivables; (f) providing customer support, including handling medical queries, and performing other related functions; and (g) conforming its practices and procedures to Applicable Law relating to the marketing, detailing and promotion of the Products. + +8.2 Commercialization Plan. Promptly after the formation of the JCC, Sanofi shall prepare and provide to the JCC for review and discussion a written plan for the Commercialization of such Product in the Licensed Territory (the "Commercialization Plan"). Each Commercialization Plan shall include a reasonably detailed description of (a) [***]; (e) non-binding sales and marketing forecasts in the U.S.; (f) non-binding net sales projections in the U.S.; (g) [***]; (h) non-binding sales and marketing forecasts and non-binding net sales projections, in each case, outside of the U.S. (i) [***], and in such case the Parties shall amend the Profit/Loss Share Agreement accordingly. Sanofi shall periodically (at least [***]) prepare updates and amendments to its Commercialization Plan to reflect changes in its plans, including in response to changes in the marketplace, relative success of the Products and other relevant factors influencing such plans and activities. Sanofi shall submit all updates and amendments to each Commercialization Plan to the JCC for review and discussion before adopting such updates and amendments. + +8.3 Distributorships. Sanofi shall have the right, in its sole discretion, to appoint its Affiliates, and Sanofi and its Affiliates shall have the right, in its sole discretion, to appoint any other Persons, in the Licensed Territory to distribute, market, and sell the Products (with or without packaging rights), in circumstances where the Person purchases its requirements of Products from Sanofi or its Affiliates but does not otherwise make any royalty or other payment to Sanofi or its Affiliates with respect to its intellectual property or other proprietary rights. Where Sanofi or its Affiliates appoints such a Person and such Person is not an Affiliate of Sanofi, that Person shall be a "Distributor" for purposes of this Agreement. The term "packaging rights" in this Section means the right for the Distributor to package Products supplied in unpackaged bulk form into individual ready-for-sale packs. + +8.4 Pricing Approvals. Sanofi shall control all pricing and reimbursement approvals for Products in the Licensed Territory. RevMed shall provide Sanofi with reasonable assistance and cooperation with respect to obtaining pricing and reimbursement approvals for the Products, at Sanofi's request and expense. 42 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +8.5 Patent Marking. Each Party shall mark all Products in accordance with the applicable patent marking laws, and shall require all of its Affiliates, Sublicensees and Distributors to do the same. + +8.6 Reports. Each Party shall update the JCC at each regularly scheduled JCC meeting regarding its Commercialization activities with respect to the Products. Each such update shall be in a form to be agreed by the JCC by mutual agreement of its representatives (without application of any final decision-making right of either Party) and shall summarize such Party's (either by itself or through its Affiliates and its Sublicensees) Commercialization activities with respect to the Products. + +8.7 Co-Promotion of Products in the United States. + +(a) RevMed shall have the one-time exclusive right to elect to assume up to [***]% (but not less than [***]%) of the Detailing effort for all Products in the United States (such geography, the "Co-Promotion Territory"; such right, the "Co-Promotion Option"; such Products that are co- promoted by the Parties, the "Co-Promotion Product"); provided that (i) [***] and (ii) RevMed shall provide to Sanofi, at the time of RevMed's exercise of the Co-Promotion Option pursuant to Section 8.7(b), a plan demonstrating to Sanofi's reasonable satisfaction that RevMed has, or will have on a timely basis, the necessary resources in place sufficient to Detail the applicable Co-Promotion Products in a manner consistent with and within the timelines required under the applicable Commercialization Plan. RevMed shall be obligated to perform the activities set forth in such plan within the timelines provided therein. + +(b) Sanofi shall notify RevMed of the anticipated launch date for the first Product in the Co-Promotion Territory at least [***] in advance thereof. If RevMed wishes to exercise its one-time Co-Promotion Option, it shall so notify Sanofi in writing at least [***] prior to the anticipated launch of such Product in the Co-Promotion Territory. If (i) RevMed does not provide the above election notice in compliance with the requirements of this Section 8.7(b), or (ii) RevMed provides notice to Sanofi that it does not intend to exercise its one-time Co-Promotion Option, then RevMed shall be deemed to have waived such one-time right to co-promote any and all Products in the Co-Promotion Territory. For clarity, once RevMed has exercised its Co- Promotion Option pursuant to this Section 8.7(b), RevMed's right to co-promote Products shall apply to all other existing and subsequent Products in the Co-Promotion Territory. + +(c) If RevMed exercises the Co-Promotion Option for the Co-Promotion Territory, the Parties shall negotiate in good faith terms and conditions of a co-promotion agreement pursuant to which they will co-promote Products in the Co-Promotion Territory (the "Co-Promotion Agreement"). The Co- Promotion Agreement will contain the terms and conditions set forth in Exhibit L of the Correspondence and other terms and conditions as are reasonable and customary for the co-promotion of similar products in the Co-Promotion Territory. The Parties shall use Commercially Reasonable Efforts to enter into the Co-Promotion Agreement no later than [***] following the date upon which RevMed exercises the Co-Promotion Option, or such later date as the Parties may agree in writing. 43 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +Article IX. + +FINANCIAL PROVISIONS + +9.1 Upfront Payment. Sanofi shall pay to RevMed a one-time, non-refundable, non-creditable upfront payment of $50,000,000 within [***] Business Days after the Effective Date. + +9.2 Milestone Payments. Upon first achievement of a milestone event described below in this Section 9.2 (a "Milestone Event") by Sanofi or any of its Affiliates or Sublicensees, Sanofi shall notify RevMed of such achievement and RevMed will issue an invoice to Sanofi for the corresponding one- time, non-refundable and non-creditable milestone payment (a "Milestone Payment"). RevMed will also have the right to notify Sanofi in writing if RevMed believes a Milestone Event has been achieved even if Sanofi has not provided such notice to RevMed, and unless Sanofi notifies RevMed within [***] Business Days after receipt of such notice from RevMed that such Milestone Event has not been achieved, RevMed may issue an invoice to Sanofi for the corresponding Milestone Payment. Subject to the terms and conditions of this Agreement, Sanofi will pay to RevMed the following Milestone Payments within [***] after receipt of such invoice therefor as follows: + +Milestone Event Milestone Payment (a) [***] [***] (b) [***] [***] (c) [***] [***] (d) [***] [***] (e) [***] [***] (f) [***] [***] (g) [***] [***] (h) [***] [***] (i) [***] [***] (j) [***] [***] (k) [***] [***] (l) [***] [***] 44 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +Milestone Event Milestone Payment (m) [***] [***] (n) [***] [***] (o) [***] [***] (p) [***] [***] In no event shall the total Milestone Payments under this Agreement exceed: $520,000,000 + +Each Milestone Payment is due only once and will be payable only upon the first Product to achieve the corresponding Milestone Event for the first time. + +*For purposes of determining whether a Milestone Event has occurred with respect to the EMA, a Marketing Approval must be obtained [***]. + +The Milestone Payments shall be payable with respect to Initiation of any RevMed Study only if [***]. + +9.3 Royalty Payments for Products. + +(a) Royalty Rates for Royalties Payable by Sanofi on Net Sales outside the United States. Subject to the other terms of this Section 9.3, during the Royalty Term, Sanofi shall make quarterly royalty payments to RevMed on aggregate Net Sales of each Product sold outside the United States during a Calendar Year at the applicable royalty rates as set forth below. For clarity, royalties shall only be payable once on any sale of Product under this Agreement. + +Aggregate Net Sales of each Product outside the United States during a Calendar Year Royalty Rate Portion of aggregate Net Sales of each Product outside the United States during a Calendar Year less than or equal to $[***] [***]% Portion of aggregate Net Sales of each Product outside the United States during a Calendar Year greater than $[***] and less than or equal to $[***] [***]% Portion of aggregate Net Sales of each Product outside the United States during a Calendar Year greater than $[***] and less than $[***] [***]% Portion of aggregate Net Sales of each Product outside the United States during a Calendar Year greater than $[***] [***]% 45 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +(b) Royalty Term. Sanofi's royalty payment obligations under this Section 9.3 with respect to a particular Product and country shall commence upon the First Commercial Sale of such Product in such country (by Sanofi or its Affiliates or Sublicensees) and shall continue, on a Product-by-Product and country-by-country basis, until the latest of (i) the date on which there is no Valid Claim that would be infringed by the sale of such Product in such country; (ii) the expiration of any Regulatory Exclusivity granted with respect to such Product in such country[***] (the "Royalty Term" for such Product and country). + +(c) Royalty Reductions. + +(i) In any country in which there is no Valid Claim and no Regulatory Exclusivity for such Product, at the time of sale of such Product in such country during the applicable Royalty Term, Sanofi's obligation to pay royalties under Section 9.3(a) on Net Sales of such Product in such country shall be reduced to [***]% of the rates otherwise payable under such section. + +(ii) If during the Royalty Term for a Product in a country, one or more Generic Products of such Product are sold in such country, and during any Calendar Quarter following the Calendar Quarter in which such Generic Product(s) are first sold in such country (the "Launch Quarter") Net Sales of such Product in such country during any Calendar Quarter following the Launch Quarter are less than the Designated Percentage (as defined below) of average Net Sales occurring during the [***] immediately preceding the Launch Quarter (such average Net Sales during such Calendar Quarters, the "Base Net Sales"), then the royalty rates provided in Section 9.3(a) for such Product shall be reduced in such country by the "Applicable Reduction Percentage" set forth below for such Calendar Quarter and for all future Calendar Quarters, unless and until the Generic Product is no longer sold or the Net Sales increase above the Base Net Sales in a Calendar Quarter. If Net Sales of the applicable Product in a country in a Calendar Quarter following the Launch Quarter for such country are: + +A. lower than or equal to [***]%, but more than [***]%, of Base Net Sales of the applicable Product in such country, then the Applicable Reduction Percentage shall be [***]%; or + +B. lower than or equal to [***]% of Base Net Sales of the applicable Product in such country, then the Applicable Reduction Percentage shall be [***]%. + +(iii) If Sanofi enters into an agreement with a Third Party in order to obtain a license or other right to a Third Party Right that is reasonably necessary to manufacture, use or sell a Product (or the SHP2 Inhibitor contained therein) in a country pursuant to Section 10.7, Sanofi shall be entitled to deduct from the royalties payable under Section 9.3(a) with respect to such Product in such country in a particular Calendar Quarter [***] paid by Sanofi to such Third Party in respect of such agreement for such Calendar Quarter, in each case to the extent reasonably allocable to such Third Party Right and such Product and country; provided that in no event shall the royalties payable for such Product and country in any Calendar Quarter be reduced to less than [***]% of the amount otherwise due under Section 9.3(a) (the "Royalty Floor"). If any of such amounts cannot be offset against royalties due with respect to a Product for any Calendar Quarter because they would result in royalties payable to RevMed being lower than the Royalty Floor, Sanofi shall have 46 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +the right to carry forward and offset such excess amount against royalties or any other payments otherwise due to RevMed in subsequent Calendar Quarters up to a maximum reduction for each Quarter of [***]% of the amounts owed in respect of such subsequent Calendar Quarter. Upon RevMed's written request Sanofi shall provide a summary to RevMed with respect to the scope of the licensed rights and payments due pursuant to such Third Party license, provided that RevMed may only make such a request one time for each Third Party license. + +(d) Royalty Reports and Payment. + +(i) Within [***] after each Calendar Quarter, commencing with the Calendar Quarter during which the First Commercial Sale of the first Product is made anywhere in the Licensed Territory, Sanofi shall provide RevMed with a report that contains the following information for the applicable Calendar Quarter: (i) on a country-by-country and Product-by-Product basis, the amount of Net Sales of the Products (which may be provided in Dollars or Euros), (ii) on a country-by-country basis and on a Product-by-Product basis, a calculation of the royalty payment due on such sales, and (iii) the exchange rate for such country. Within [***] following delivery of the applicable quarterly report, Sanofi shall pay in Dollars all royalties due to RevMed with respect to Net Sales by Sanofi, its Affiliates and their respective Sublicensees for such Calendar Quarter. + +(ii) Within [***] after each Calendar Year, commencing with the Calendar Year during which the First Commercial Sale of the first Product is made anywhere in the Licensed Territory, Sanofi shall provide RevMed with [***]. + +(e) Clarifications. For the purpose of calculating the aggregate Net Sales of a particular Product for an applicable country to determine the applicable royalty rate under Section 9.3, all Products containing the same SHP2 Inhibitor shall be deemed a single Product, regardless of form, formulation, dosage, packaging, other active ingredient or component, label or intended patient population. All royalty payments under this Section 9.3 are non-refundable and non-creditable. + +9.4 U.S. Profit/Loss Share. No later than the Initiation of the first Registrational Clinical Trial for the first Product, Sanofi and RevMed shall enter into a profit/loss share agreement (the "Profit/Loss Share Agreement") pursuant to which the Parties shall equally share the Net Profit and Net Loss (as defined in Exhibit M of the Correspondence) applicable with respect to Commercialization of Products (but, for clarity, not any costs of Development) of Products in the U.S. The Profit/Loss Share Agreement for a Product in the U.S. shall continue in effect until the expiration of the Royalty Term for such Product in the U.S. and shall contain the terms and conditions set forth in Exhibit M of the Correspondence and other terms and conditions as are reasonable and customary for the sharing of profits and losses with respect to similar products in the United States (including that each Party shall bear its own income taxes, that each Party is entitled to withhold any tax on behalf of the other Party on payments made to the other Party as required by Applicable Law (taking into account any legally available reduction or elimination of such tax pursuant to an applicable tax treaty or otherwise), and each Party shall indemnify the other Party with respect to any withholding taxes asserted or assessed by any taxing authority on amounts received directly by, or deemed allocable to, such other Party. 47 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +9.5 Payment Terms; Exchange Rate. Notwithstanding any term to the contrary of this Agreement, RevMed shall deliver an invoice to Sanofi for all payments owed by Sanofi to RevMed under this Agreement. Sanofi will make all payments owed to RevMed within [***] after the date on which Sanofi receives an undisputed invoice for such owed amount, except where a different timeframe is expressly provided in another Section of this Agreement (e.g., for the reimbursement of RevMed R&D Costs pursuant to Sections 4.5 and 5.5; the payment of the buy-in payment pursuant to Section 5.6(b)B; the upfront payment set forth in Section 9.1; the royalties payable pursuant to Section 9.3, the payment of VAT pursuant to Section 9.7(b); and the payment of unpaid or overpaid amounts pursuant to Section 9.9(b)). All payments to be made by a Party to the other Party under this Agreement shall be made in Dollars by bank wire transfer in immediately available funds to a bank account designated by written notice from the Party that receives the payment. Conversion of Net Sales or reimbursable costs incurred hereunder that are recorded in local currencies to Dollars by a Party, its Affiliates or its or their Sublicensees shall be performed in a manner consistent with its normal practices used to prepare its audited financial statements for internal and external reporting purposes. + +9.6 Late Payments. If a Party does not receive payment of any undisputed sum due to it on or before the due date therefor, then it shall notify the paying Party. The paying Party shall pay interest on any undisputed late payments (before and after any judgment) at an annual rate (but with interest accruing on a daily basis) of the lesser of (a) [***] percent above the London Interbank Offered Rate for deposits in Dollars having a maturity of one month published by the British Bankers' Association, as adjusted from time to time on the [***] of each month, such interest to run from the date on which payment of such sum became due until payment thereof in full together with such interest or (b) the maximum rate permitted by Applicable Law. + +9.7 Taxes. + +(a) General. Each Party shall be solely responsible for the payment of all income taxes imposed on its share of income arising directly or indirectly from the activities of the Parties under this Agreement. In the event that Sanofi is required, under Applicable Law, to withhold any deduction or tax from any payment due to RevMed under this Agreement (taking into account any legally available reduction or elimination of such tax pursuant to an applicable tax treaty or otherwise), such amount will be deducted from the payment to be made by Sanofi, paid to the proper taxing authority, and Sanofi will notify RevMed and upon RevMed's request promptly provide RevMed with copies of any tax certificate or other documentation evidencing such withholding, provided, however, that in the event that any such withholding tax arises as a result of Sanofi's re-domiciliation, assignment of its rights or obligations hereunder to an Affiliate, or use of any Third Party subcontractor, payments to RevMed hereunder shall be made on a grossed-up basis to ensure that RevMed receives the same amount it would have in the absence of such withholding. Each Party agrees to cooperate with the other Party in claiming exemptions from such deductions or withholdings under any agreement or treaty from time to time in effect. + +(b) Value Added Tax. Notwithstanding anything contained in Section 9.7(a), this Section 9.7(b) will apply with respect to value added tax (or sales, use or indirect tax) ("VAT"). All payments to be made by Sanofi hereunder are exclusive of VAT. If any VAT is chargeable in respect of any such payments, Sanofi will notify RevMed and pay VAT at the applicable rate in respect of any such payments following the receipt of a VAT invoice in the appropriate form issued by RevMed in respect of those payments or Sanofi shall self-assess and pay such VAT, such VAT to be payable on the later of the due date of the payment to which such VAT relates and [***] after the receipt by Sanofi of the applicable invoice relating to that VAT payment. 48 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +9.8 Records. Each Party shall, and shall cause its Affiliates and its and their Sublicensees to, maintain complete and accurate financial books and records in sufficient detail to permit the other Party to confirm the accuracy of the amount of amounts payable under this Agreement. Each Party shall, and shall cause its Affiliates and its and their Sublicensees to, retain such books and records until the later of (a) [***] after the end of the period to which such books and records pertain and (b) the expiration of the applicable tax statute of limitations (or any extensions thereof) or for such longer period as may be required by Applicable Law. + +9.9 Audit Procedures. + +(a) Upon reasonable prior notice of the other Party, but in any event at least [***] prior notice, each Party shall and shall cause its Affiliates and its and their Sublicensees to permit an independent auditor of international prominence, selected by the auditing Party and reasonably acceptable to the audited Party, to audit the books and records maintained pursuant to Section 9.8 for the sole purpose of verifying for the auditing Party the accuracy of the financial reports furnished by the audited Party pursuant to this Agreement or of any payments made, or required to be made, by or to the audited Party pursuant to this Agreement or any Ancillary Agreement. Such audit shall not occur more than [***] in a given Calendar Year, unless for cause, and shall not concern books and records relating to a period more than [***] preceding the current Calendar Year. Any failure by a Party to exercise its rights under this Section 9.9 with respect to a Calendar Year within such [***] period shall constitute a waiver by such Party of its right to later object to any payments made by the other Party under this Agreement during such Calendar Year. + +(b) Upon completion of the audit, the auditor shall provide a report to both Parties, which report shall be limited to a description of any failure to comply with the terms of this Agreement and the amount of the financial discrepancy. Such auditor shall not disclose the audited Party's Confidential Information to the auditing Party, except to the extent such disclosure is necessary to verify the accuracy of the financial reports furnished by the audited Party or the amount of payments to or by the audited Party under this Agreement. Any amounts shown to be owed but unpaid, or overpaid and in need of reimbursement, shall be paid or refunded (as the case may be) within [***] after the auditor's report, plus interest (as set forth in Section 9.6) from the original due date (unless challenged in good faith by the audited Party in which case any dispute with respect thereto shall be resolved in accordance with Section 15.6). + +(c) The auditing Party shall bear the full cost of such audit unless such audit reveals an underpayment by the audited Party that resulted from a discrepancy in the financial report provided by the audited Party for the audited period, which underpayment was more than [***] percent of the amount set forth in such report, in which case the audited Party shall reimburse the auditing Party for the costs for such audit. + +(d) The auditing Party shall treat all information subject to review under this Section 9.9 in accordance with the confidentiality provisions of Article XI and the Parties shall cause the auditor to enter into a reasonably acceptable confidentiality agreement with the audited Party obligating such auditor to retain all such financial information in confidence pursuant to such confidentiality agreement. 49 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +Article X. + +INTELLECTUAL PROPERTY RIGHTS + +10.1 Ownership. + +(a) [***] Each Party shall ensure that every Third Party performing activities on behalf of such Party in connection with the Collaboration executes a binding and enforceable invention assignment agreement assigning all of such Third Party's right, title and interest in and to Program Inventions to such Party, provided that [***], provided that for those Permitted Contractors or Researchers for whom [***], [***], or [***], provided that [***]. + +(b) Subject to the other terms and conditions of this Agreement (including the licenses and other rights granted under this Agreement or any Ancillary Agreement), each Party shall have the right to exploit, including license, the Joint Program Technology, without a duty of accounting or any obligation to seek consent from the other Party to exploit such Joint Program Technology. To the extent necessary to effect the foregoing in a country other than the United States, each Party grants to the other Party a nonexclusive, irrevocable, perpetual, fully-paid, worldwide license, with the right to grant sublicenses, under the granting Party's interest in Joint Program Technology, for any and all purposes, provided that RevMed's interest therein shall be subject to the other terms and conditions of this Agreement, including the exclusive licenses granted herein (during the Term) and all payment obligations. + +(c) Each Party shall promptly disclose to the other Party in writing and shall cause its Affiliates, and its and their Sublicensees to so disclose, any Joint Program Know-How and any other Program Inventions. Each Party shall also respond promptly to reasonable requests from the other Party for additional information relating to such Joint Program Know-How and other Program Inventions as reasonably necessary to exercise such Party's rights and perform its obligations, hereunder and under any Ancillary Agreement, with respect thereto. + +10.2 Patent Prosecution. + +(a) Sanofi Prosecuted Patents. Sanofi shall have the sole and exclusive right [***] to file, prosecute and maintain the RevMed Licensed Patents and [***] (the "Sanofi Prosecuted Patents"), [***]. Such right shall be subject to [***], provided that [***]. RevMed shall transfer the applicable prosecution files for the RevMed Licensed Patents to Sanofi within [***] after the Effective Date. Sanofi shall, through the JPC, consult with RevMed and keep RevMed reasonably informed of the status of the Sanofi Prosecuted Patents and shall promptly provide RevMed with all correspondence received from any patent authorities in connection therewith, including with respect to Sanofi's proposed timelines for submission of comments to patent authorities (to the extent not shared via the JPC). In addition, Sanofi shall promptly provide RevMed, through the JPC, with drafts of all proposed material filings and correspondence to any patent authorities with respect to the Sanofi Prosecuted Patents for RevMed's review and comment reasonably in advance of the intended submission of such proposed filings and correspondence. Sanofi shall, through the 50 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +JPC, confer with RevMed and take into consideration RevMed's comments prior to submitting such proposed filings and correspondence. If RevMed does not provide such comments at least [***] prior to the proposed submission date, then RevMed shall be deemed to have no comment to such proposed filings or correspondence. In case of disagreement between the Parties with respect to the filing, prosecution and maintenance of such Sanofi Prosecuted Patents, the final decision shall be made pursuant to Section 2.10. + +(b) Collaboration. RevMed shall provide Sanofi all reasonable assistance and cooperation in the patent prosecution and maintenance efforts under this Section 10.2, including providing any necessary powers of attorney and executing any other required documents or instruments for such prosecution or maintenance. + +(c) Patent Listings. As between the Parties, [***]. + +10.3 CREATE Act. Notwithstanding anything to the contrary in this Article X, each Party shall have the right to invoke the Cooperative Research and Technology Enhancement Act of 2005, 35 U.S.C. §102(c) (the "CREATE Act") when exercising its rights under this Article X without the prior written consent of the other Party. Where such Party intends to invoke the CREATE Act, as permitted by the preceding sentence, it shall notify the other Party and the other Party shall cooperate and coordinate its activities with the Party invoking the CREATE Act with respect to any submissions, filings or other activities in support thereof. The Parties acknowledge and agree that this Agreement is a "joint research agreement" as defined in 35 U.S.C. § 100(h). + +10.4 Patent Enforcement and Defense. + +(a) Each Party shall promptly notify the other Party (but in any case no later than [***] after becoming aware) of any alleged or threatened infringement by a Third Party of any of the RevMed Licensed Patents or Joint Program Patents, and RevMed shall promptly notify Sanofi (but in any case no later than [***] after becoming aware) of any alleged or threatened infringement by a Third Party of any of the Sanofi Sole Program Patents, in each case including (i) any such alleged or threatened infringement on account of a Third Party's manufacture, use or sale of a Product in the Field or (ii) any "patent certification" filed in the United States under 21 U.S.C. §355(b)(2) or 21 U.S.C. §355(j)(2) or similar provisions in other jurisdictions in connection with an ANDA (an Abbreviated New Drug Application in the United States or a comparable application for Regulatory Approval under Applicable Law in any country other than the United States) or other MAA for a Product in the Field and (iii) any declaratory judgment action filed by a Third Party that is developing, manufacturing or commercializing a Product in the Field alleging the invalidity, unenforceability or non-infringement of any of the RevMed Licensed Patents, Joint Program Patents or Sanofi Sole Program Patents ((i)-(iii), collectively, "Product Infringement"). + +(b) Sanofi, at its sole cost and expense, shall have the sole and exclusive right, but not the obligation, to bring (or defend) and control any legal action in connection with any Product Infringement at its own expense, as it reasonably determines appropriate. + +(c) RevMed, at its sole cost and expense, shall have the sole and exclusive right to enforce the RevMed Licensed Patents for any infringement that is not a Product Infringement at its own expense as it reasonably determines appropriate. Each Party shall have the right to enforce the Joint Program Patents for any infringement that is not a Product Infringement at its own expense as it reasonably determines appropriate. Sanofi shall have the sole and exclusive right to enforce the Sanofi Sole Program Patents at its sole cost and expense. 51 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +(d) [***] + +(e) At the request of Sanofi, RevMed shall provide reasonable assistance in connection with any such suit or action, including by executing reasonably appropriate documents, cooperating in discovery and joining as a party to the action if required (at Sanofi's expense). In connection with a proceeding with respect to a Product Infringement covered by this Section 10.4, Sanofi shall not enter into any settlement admitting the invalidity of, or otherwise impairing RevMed's rights in, the RevMed Licensed Patents or Joint Program Patents without the prior written consent of RevMed. + +(f) Any recoveries resulting from an enforcement action relating to a claim of Product Infringement shall be first applied against payment of each Party's costs and expenses in connection therewith. Any such recoveries in excess of such costs and expenses (the "Remainder") shall be shared by the Parties as follows. The Remainder shall, [***]. + +10.5 Trademarks. + +(a) Product Marks. Sanofi shall have the right to Commercialize the Products in the Licensed Territory, in accordance with Applicable Law, using (i) the corporate Trademarks of Sanofi and its Affiliates, Sublicensees and Distributors and (ii) subject to Section 11.5(a)(ii), any other Trademarks it determines appropriate for such Products in such countries (such Trademarks in clause (ii), the "Product Marks"), which may vary by country or within a country, provided that the Parties shall coordinate in good faith a global branding strategy with respect to the Products through the JCC pursuant to Section 2.4(a). Sanofi shall own all rights in the Product Marks and shall have the sole right to register, prosecute and maintain the Product Marks using counsel of its own choice in the countries and regions in the Licensed Territory that it determines reasonably necessary, at Sanofi's cost and expense. + +(b) Trademark Infringement. RevMed shall provide to Sanofi prompt written notice of any actual or threatened infringement of the Product Marks and of any actual or threatened claim that the use of such Product Marks violates the rights of any Third Party, in each case, of which RevMed becomes aware. Sanofi shall have the sole right to take such action as Sanofi deems necessary against a Third Party based on any alleged, threatened or actual infringement, dilution, misappropriation or other violation of or unfair trade practices or any other like offense relating to, the Product Trademarks by a Third Party at its sole cost and expense, subject to Section 9.4, and using counsel of its own choice. Sanofi shall retain any damages or other amounts collected in connection therewith. + +(c) Domain Names. Sanofi shall have the sole right to register and shall own and control any domain names for the Product Marks that it registers in any generic Top Level Domain (e.g., .com, .info, .net or .org) or in any country code Top Level Domain for any country in the Licensed Territory (e.g., .us for the United States and .ca for Canada). 52 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +10.6 Patent Extensions. + +(a) The Parties shall cooperate in obtaining patent term restoration (under but not limited to the U.S. Drug Price Competition and Patent Term Restoration Act and its foreign equivalents), supplemental protection certificates or their equivalents, and patent term extensions with respect to the RevMed Licensed Patents and Joint Program Patents in any country or region where applicable. + +(b) Sanofi shall determine the RevMed Licensed Patents and Joint Program Patents for which it shall apply to extend in any country and notify RevMed of such determination and any such extensions that are granted. Each Party shall provide all reasonable assistance to the other Party in connection with such filings and each Party shall bear its own costs with respect to such assistance. + +10.7 Third Party Rights. + +(a) If either Party reasonably determines, in consultation with the JRDC, that (i) the Research, Development, Manufacture, or Commercialization of [***] infringes or misappropriates any Patent Right or other intellectual property right of a Third Party, such that such Party or its respective Affiliates or Sublicensees cannot [***] without infringing or misappropriating the Patent Right or other intellectual property right of such Third Party (a "Third Party Right") or (ii) [***], such Party shall notify the other Party (such notification, the "Third Party Right Notification"), and promptly thereafter the Parties shall discuss obtaining a license to the applicable intellectual property right. + +(b) Sanofi shall have the first right, but not the obligation, through counsel of its choosing, to negotiate and obtain a license with respect to such Third Party intellectual property right and shall provide RevMed with a copy of such license if it obtains such a license (to the extent permitted by the terms of such license, provided that Sanofi shall use Commercially Reasonable Efforts to obtain such permission to provide such copy). If Sanofi elects not to obtain such license, or fails to obtain such license within [***] after the Third Party Right Notification, then RevMed shall have the right to obtain such license, with the right to grant the corresponding sublicense to Sanofi pursuant to Section 10.7(c). The Party negotiating a license shall keep the other Party reasonably informed of the material terms for such prospective license applicable to the Products and shall consider in good faith the comments of such other Party with respect to such Third Party license. + +(c) If RevMed obtains such license, then notwithstanding anything to the contrary in this Agreement, the Patent Rights and Know-How licensed thereunder will be included in the RevMed Background Technology only if Sanofi provides RevMed with written notice within [***] following its receipt from RevMed of the substantive terms of the license agreement, in which [***]. Sanofi shall [***] no later than [***] before the applicable due date therefor. 53 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +Article XI. + +CONFIDENTIALITY; PUBLICATION + +11.1 Duty of Confidence. At all times during the Term and for a period of [***] thereafter, subject to the other provisions of this Article XI: + +(a) all Confidential Information of a Party (the "Disclosing Party") shall be maintained in confidence and otherwise safeguarded by the other Party (the "Receiving Party") and its Affiliates, using commercially reasonable efforts, but in any event no less than in the same manner and the same protections with which the Receiving Party maintains its own confidential information; and + +(b) the Receiving Party may only use any such Confidential Information for the purposes of performing its obligations or exercising its rights under this Agreement or any Ancillary Agreement. + +11.2 Exceptions. The foregoing obligations shall not apply to the extent that the Receiving Party can demonstrate that any information: + +(a) is known by the Receiving Party at the time of its receipt without an obligation of confidentiality with respect to such information, and not through a prior disclosure by the Disclosing Party; + +(b) is in the public domain before its receipt from the Disclosing Party, or thereafter enters the public domain through no fault of the Receiving Party; + +(c) is subsequently disclosed to the Receiving Party by a Third Party who may lawfully do so and is not under an obligation of confidentiality to the Disclosing Party with respect to such information; or + +(d) is developed by the Receiving Party independently and without use of or reference to any Confidential Information received from the Disclosing Party. + +Any combination of features or disclosures shall not be deemed to fall within the foregoing exclusions merely because individual features are published or available to the general public or in the rightful possession of the Receiving Party unless the combination itself and principle of operation are published or available to the general public or in the rightful possession of the Receiving Party. + +11.3 Authorized Disclosures. Notwithstanding the obligations set forth in Sections 11.1 and 11.5, a Party may disclose the other Party's Confidential Information (including this Agreement and the terms herein) to the extent: + +(a) such disclosure: (i) is reasonably necessary for the filing or prosecuting Patent Rights as contemplated by Article X; (ii) is reasonably necessary in connection with regulatory filings for the Products in the Field consistent with this Agreement; or (iii) is made to any Third Party bound by written obligations of confidentiality and non-use similar to those set forth under this Article XI, to the extent otherwise necessary or appropriate in connection with the exercise of its rights or the performance of its obligations hereunder or under any Ancillary Agreement; + +(b) such disclosure is reasonably necessary: (i) to its and its Affiliates', Sublicensees' and Distributors' employees and subcontractors in connection with the exercise of its rights or the performance of its obligations hereunder or under any Ancillary Agreement; (ii) to such Party's directors, attorneys, independent accountants or financial advisors for the sole purpose of enabling 54 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +such directors, attorneys, independent accountants or financial advisors to provide advice to such Party relating to this Agreement; or (iii) to actual or potential investors or Acquirers of such Party solely for the purpose of evaluating or carrying out a bona fide investment in or acquisition of such Party; provided that in each case, (i), (ii) and (iii), such party(ies) to whom disclosure is made under this Section 11.3(b) shall be bound by confidentiality and non-use obligations substantially consistent with those contained in the Agreement; or + +(c) such disclosure is required by Applicable Law, rules of a securities exchange or judicial or administrative process or is reasonably necessary for prosecuting or defending litigation under Article X or Article XIV; provided that in such event such Party (to the extent legally permissible) shall promptly inform the other Party of such required disclosure and use reasonable efforts to provide the other Party an opportunity to challenge or limit the disclosure obligations; provided, further that Confidential Information disclosed shall be limited to that information which is required under the relevant Applicable Law, rule, judicial or administrative process or court or governmental order. Confidential Information that is so disclosed shall remain otherwise subject to the confidentiality and non-use provisions of this Article XI, provided that the Party disclosing Confidential Information in such situation shall use reasonable efforts, including seeking confidential treatment or a protective order, to seek and obtain continued confidential treatment of such Confidential Information. + +11.4 Publications. The JRDC shall, directly or through a subcommittee (a) discuss and approve a publication strategy and plan with respect to Development activities hereunder (including details of the Parties' participation in appropriate conferences and scientific or medical publications relating to Products and processes for review of proposed Publications by each Party) and (b) review and comment on and approve any Publication relating to the scientific or medical aspects of the Products in accordance with such strategy, and if applicable coordinate such review and comment process with the JCC. The Parties acknowledge RevMed's interest in publishing the results of the Research and Development activities under this Agreement in order to obtain recognition within the scientific, medical or other applicable community, to advance the state of knowledge in the field, and RevMed's need to fulfill its obligations to principal investigators and researchers with respect to publications under its relevant agreements; the need to protect Confidential Information; and the Parties' mutual interest in obtaining valid patent protection and protecting reasonable business interests and trade secret information. Consequently, each Party and their Affiliates, employee(s) and consultant(s) shall deliver to the JRDC or the applicable subcommittee, and if applicable to the JCC, for review and comment a copy of any proposed Publication that pertains to SHP2 inhibition or any SHP2 Inhibitor or Product using Commercially Reasonable Efforts to provide such copy at least [***] (but in no event less than [***] unless otherwise agreed by the Parties) prior to its intended submission or publication, and in accordance with the applicable strategy determined by the JRDC and the ICMJE guidelines or other similar guidelines. The non-publishing Party shall have the right to require reasonable modifications of the Publication: (a) to protect the non-publishing Party's Confidential Information or trade secrets; or (b) to delay such submission for a reasonable time period (not to exceed [***]) as may be reasonably necessary to seek patent protection for the information disclosed in such proposed submission to the extent consistent with Article X. 55 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +11.5 Publicity; Use of Names. + +(a) The Parties have agreed to issue a joint press release or separate press releases announcing this Agreement, subject to mutual agreement by the Parties with respect to the content thereof and issued at a mutually agreed date and time. Subject to Sections 11.3 and 11.4 above and the remainder of this Section 11.5, (i) no other disclosure of the existence or the terms of this Agreement or otherwise relating to this Agreement or the activities hereunder may be made by either Party or its Affiliates, and (ii) no Party shall use the name, trademark, trade name or logo of the other Party, its Affiliates or their respective employees in any publicity, promotion, news release or disclosure relating to this Agreement or its subject matter, except in each case (i) and (ii) as provided in this Section 11.5 or as otherwise provided in this Agreement or any Ancillary Agreement or with the prior express written permission of the other Party, except as may be required by Applicable Law. + +(b) If a Party is required by Applicable Law, rule or regulation to make a securities filing relating to the signing or effectiveness of this Agreement, or to the terms of this Agreement, with the appropriate Governmental Authorities (including the U.S. Securities and Exchange Commission, and any securities exchange on which securities of such Party are listed), then the Party under such requirement will prepare a draft of such securities filing for review and comment by the other Party. If such securities filing includes the disclosure of this Agreement and its terms, the Party under such disclosure obligation will submit a confidential treatment request and a proposed redacted version of this Agreement as part of such draft. Such draft securities filing will, where possible, be provided to the other Party reasonably in advance of the deadline for such securities filing, and the other Party agrees to promptly (and in any event, no less than [***] (or such shorter time to meet any filing deadline where it was not possible to provide the other Party with [***] notice) after receipt of such confidential treatment request and proposed redactions) give its input in a reasonable manner in order to allow the Party seeking disclosure to file its request within the timelines proscribed by the regulations of applicable Governmental Authorities or securities exchange. The Party seeking such disclosure will use reasonable efforts to obtain confidential treatment of this Agreement from the applicable Governmental Authority or securities exchange as represented by the redacted version reviewed by the other Party, provided that the Party seeking such disclosure shall, notwithstanding the foregoing, at all times have the right to submit such disclosure in accordance with such requirement prior to or on the relevant deadline therefor. + +(c) At any time after the release of the initial press release(s) described in Section 11.5(a), each Party shall notify the other Party if it desires to disclose publicly (including on its website) any of the following: [***]. For clarity, this Section 11.5 does not apply to scientific or medical Publications, which are governed by Section 11.4. If the other Party also desires to make such a public disclosure, the Parties will coordinate and agree upon the form, content and timing of such disclosure. If the other Party does not desire to make such a public disclosure, the requesting Party may nonetheless make such disclosure so long as it provides the other Party with a draft of such disclosure at least [***] prior to its intended release for such other Party's review and comment. The non-disclosing Party shall have the right to require reasonable modifications of the disclosure: (a) to protect the non- publishing Party's Confidential Information or trade secrets; or (b) to delay such disclosure for a reasonable time period (not to exceed [***]) as may be reasonably necessary to seek patent protection for the information disclosed in such proposed submission to the extent consistent with Article X. If either Party requests to make any other disclosure with respect to this Agreement or the Collaboration (including any public statement or press release) that is not otherwise permitted under this Agreement, the other Party shall reasonably consider such request. 56 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +11.6 Return of Confidential Information. Upon the effective date of the termination of this Agreement for any reason in its entirety, or with respect to a Product, either Party may request in writing and the non-requesting Party shall (at the non-requesting Party's election), with respect to Confidential Information to which such non-requesting Party does not retain rights under the surviving provisions of this Agreement (if applicable, with respect to the terminated Region or terminated Product) promptly destroy all copies of such Confidential Information in the possession or control of the non-requesting Party and confirm such destruction in writing to the requesting Party. Notwithstanding the foregoing, the non-requesting Party shall be permitted to retain such Confidential Information (i) to the extent necessary or useful for purposes of performing any continuing obligations or exercising any ongoing rights hereunder and, in any event, a single copy of such Confidential Information for archival purposes and (ii) any computer records or files containing such Confidential Information that have been created solely by such non-requesting Party's automatic archiving and back-up procedures, to the extent created and retained in a manner consistent with such non-requesting Party's standard archiving and back-up procedures, but not for any other uses or purposes. All Confidential Information shall continue to be subject to the terms of this Agreement for the period set forth in Section 11.1. + +11.7 Attorney-Client Privilege. As to any Third Party, neither Party is waiving, nor shall be deemed to have waived or diminished, any attorney work product protection or attorney-client privilege as a result of disclosing information pursuant to this Agreement, or any Confidential Information (including Confidential Information related to pending or threatened litigation) to the Receiving Party, regardless of whether the Disclosing Party has asserted, or is or may be entitled to assert, such privileges and protections. The Parties: (a) share a common legal and commercial interest in such information to the extent available under Applicable Law that is subject to such privileges and protections; (b) are or may become joint defendants in proceedings to which the information covered by such protections and privileges relates; (c) intend that such privileges and protections remain intact should either Party become subject to any actual or threatened proceeding initiated by or against a Third Party to which the Disclosing Party's Confidential Information covered by such protections and privileges relates; and (d) intend that after the Effective Date both the Receiving Party and the Disclosing Party shall have the right to assert such protections and privileges as against a Third Party to the extent available under Applicable Law. In the event of any litigation (or potential litigation) with a Third Party related to this Agreement or the subject matter hereof, the Parties shall, upon either Party's request, enter into a reasonable and customary joint defense agreement. Each Party shall consult in a timely manner with the other Party before producing information or documents in connection with litigation or other proceedings brought by or initiated against a Third Party that would likely implicate privileges maintained by the other Party. Notwithstanding anything contained in this Section 11.7, nothing in this Agreement shall prejudice a Party's ability to take discovery of the other Party in disputes between them relating to the Agreement and no information otherwise admissible or discoverable by a Party shall become inadmissible or immune from discovery, including without limitation based on an assertion of attorney work product protection or attorney-client privilege, solely by this Section 11.7. 57 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +11.8 Permitted Disclosure for CREATE Act. In order for a Party to exercise its rights under Section 10.3, such Party shall be allowed to disclose in a patent application it prepares and files pursuant to this Agreement the names of the Parties to this Agreement, or amends a pending application it is prosecuting pursuant to this Agreement to state the names of the Parties to this Agreement. + +Article XII. + +TERM AND TERMINATION + +12.1 Term. The term of this Agreement shall commence upon the Effective Date and, unless earlier terminated pursuant to this Article XII, shall continue in full force and effect until the expiration of Sanofi's payment obligations under Article IX or the Profit/Loss Share Agreement, whichever is later (the "Term"). + +12.2 Termination. + +(a) Terminations by Sanofi. + +(i) Termination by Sanofi for Convenience. Sanofi may terminate this Agreement (A) in its entirety by providing [***] written notice of termination to RevMed or (B) on a country-by-country or Product-by-Product basis by providing [***] written notice of termination to RevMed; provided that if Sanofi desires to terminate this Agreement under this Section 12.2(a)(i)B only with respect to the U.S. (for all Products or one or more Products), Sanofi shall provide [***] written notice of termination to RevMed. + +(ii) For a Change of Control of RevMed. RevMed will notify Sanofi in writing as soon as possible after RevMed announces publicly any information regarding any proposed Change of Control of RevMed (or if the Change of Control will not be publicly announced, then no later than [***] after the signing of the Change of Control). Sanofi will have the option to either (A) terminate this Agreement in its entirety upon written notice to RevMed provided to RevMed within [***] of the effective date of such Change of Control; or (B) [***]. + +(iii) For Safety. Sanofi will have the right to terminate this Agreement in its entirety or on a country-by-country or Product-by-Product basis, upon [***] prior written notice to RevMed, due to safety concerns raised by a Regulatory Authority, an Institutional Review Board for a Clinical Trial or by Sanofi's internal regulatory decision makers acting in accordance with Sanofi's standard internal policies (any such entity or group, a "Safety Reviewer"), where such Safety Reviewer recommends cessation of Development or Commercialization of such SHP2 Inhibitor or Product with respect to any SHP2 Inhibitor or Product (and a summary of such concerns will be stated in the notice of termination). During such [***] notice period, each Party will continue to perform all of its obligations under this Agreement then in effect. 58 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +(b) Termination for Material Breach. If either Party believes that the other is in material breach of this Agreement, then the non-breaching Party may deliver notice of such breach to the other Party. For all material breaches other than a failure to make a payment as set forth in this Agreement, the allegedly breaching Party shall have [***] from such notice to dispute or cure such breach. For any material breach arising from a failure to make a payment set forth in this Agreement, the allegedly breaching Party shall have [***] from the receipt of the notice to dispute or cure such breach. If the Party receiving notice of material breach under this Agreement fails to cure, or fails to dispute, such breach within the applicable time period set forth above, then the Party originally delivering the notice of material breach may terminate this Agreement effective on written notice of termination to the other Party. If the allegedly breaching Party in good faith disputes such material breach or disputes the failure to cure or remedy such material breach and provides written notice of that dispute to the other Party within the applicable period set forth above, the matter shall be addressed under the dispute resolution provisions in Section 15.6. During the pendency of any such dispute, all of the terms and conditions of this Agreement will remain in effect and the Parties will continue to perform all of their respective obligations hereunder. + +(c) Termination for Insolvency. In the event that either Party (i) files for protection under bankruptcy or insolvency laws, (ii) makes an assignment for the benefit of creditors, (iii) appoints or suffers appointment of a receiver or trustee over substantially all of its property that is not discharged within [***] after such filing, (iv) proposes a written agreement of composition or extension of its debts, (v) proposes or is a party to any dissolution or liquidation, (vi) files a petition under any bankruptcy or insolvency act or has any such petition filed against it that is not charged within [***] of the filing thereof or (vii) admits in writing its inability generally to meet its obligations as they fall due in the general course, then the other Party may terminate this Agreement in its entirety effective immediately upon writing notice to such Party. + +(d) Termination for Competing Product of Sanofi. If after [***]: (i) Sanofi or its Affiliates, alone or with or through a Third Party, develop, manufacture or commercialize a Competing Product and (ii) Sanofi or its Affiliates have not commenced a Registrational Clinical Trial for a Product prior to commencing the activities in Section 12.2(d)(i), RevMed may terminate this Agreement effective [***] after it delivers written notice to Sanofi that it is exercising its rights under this Section 12.2(d) unless Sanofi elects in writing within such [***] period to [***]. + +(e) Termination for Sanofi's Decision to Cease [***] of Product. + +(i) If at any time during the period commencing on the Effective Date, there is a consecutive [***] period during which Sanofi [***] and such [***] is not (A) by written agreement of the Parties, (B) a result of [***], (C) as a result of [***], (D) a result of [***], or (E) a direct result, in whole or in part, of [***], then RevMed shall promptly notify Sanofi in writing upon becoming aware of such [***]. Alternatively, RevMed, no more often than [***], may request for Sanofi to notify RevMed whether there has been any [***] and Sanofi shall respond to such request within [***], providing reasonable support for any assertion that [***]. Within another [***] following either receipt of notice from RevMed or receipt of any such response from Sanofi confirming [***], as applicable, the Parties shall meet (which may be by teleconference) to discuss the nature and circumstances surrounding such [***]. Sanofi shall have [***] from such meeting date to cure such [***]. If Sanofi fails to cure such [***] within such [***] period, RevMed may terminate this Agreement upon written notice to Sanofi. 59 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +(ii) If RevMed reasonably believes a [***] is likely to occur but it has not yet been [***], RevMed may, no more than [***] per Calendar Year, request for the Parties to discuss such potential [***] and Sanofi's intended plans with respect to [***], provided that, for clarity, such discussion shall not be deemed to accelerate the timeframes specified above in Section 12.2(a). + +12.3 Effects of Expiration or Termination. + +(a) General. Upon termination or expiration of this Agreement with respect to any particular Product or country, all rights and obligations of the Parties under this Agreement with respect to such Product or country shall cease except as otherwise set forth in this Section 12.3 or elsewhere in this Agreement, but, for clarity, such termination or expiration shall not affect the Parties' rights and obligations under this Agreement with respect to the other Products or countries. + +(b) Effect of Expiration. Upon expiration of this Agreement, the licenses granted to Sanofi under Section 3.1 will become fully paid up, royalty free, perpetual and irrevocable. + +(c) Effect of Termination by Sanofi for Convenience, Change of Control or Termination by RevMed for Sanofi's Material Breach, Insolvency, Competing Product, or Cessation of [***]. Upon the termination of this Agreement by Sanofi pursuant to Section 12.2(a)(i) (Termination by Sanofi for Convenience) or Section 12.2(a)(ii)A (Termination by Sanofi for Change of Control of RevMed) or by RevMed pursuant to Section 12.2(b) (Termination for Material Breach), 12.2(c) (Termination for Insolvency), 12.2(d) (Termination for Competing Product of Sanofi) or 12.2(e) (Termination for Sanofi's Decision to Cease [***] of Product), the following provisions shall apply: + +(i) License to Sanofi. All licenses and other rights granted to Sanofi under the RevMed Licensed Technology shall terminate (except as necessary to permit Sanofi to perform its surviving obligations under this Article XII) and all rights thereunder shall revert to RevMed. + +(ii) Licenses. + +A. License Grants. + +1. RevMed License to SHP2 Inhibitors. Sanofi shall, effective upon any such termination of this Agreement, and hereby does, grant to RevMed [***], under all [***], and [***], to [***]. Notwithstanding the foregoing, [***] shall not include [***], and [***] shall include [***] (to the extent [***]). + +2. RevMed License to Practice Certain Combinations. Sanofi shall, effective upon any such termination of this Agreement, and hereby does, grant to RevMed [***], under [***], and [***] (but excluding [***]). For the avoidance of doubt, [***] licensed under this Section 12.3(c)(ii)(A)(2) do not [***]. 60 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +3. Sanofi License to Practice Certain Combinations. [***] RevMed shall, effective upon any such termination of this Agreement, and hereby does, grant to Sanofi [***], under [***], and [***]. For the avoidance of doubt, [***] licensed under this Section 12.3(c)(ii)(A)(3) do not [***]. If Sanofi [***], Sanofi shall so notify RevMed in writing, and [***]. + +B. Third Party Restrictions. If the rights licensed to RevMed pursuant to subsection A are sublicensed to RevMed under an agreement between Sanofi and a Third Party, then Sanofi shall so notify RevMed within [***] after the effective date of termination of this Agreement, and the foregoing licenses shall be subject to the applicable provisions of such Third Party agreement (including any applicable payment obligations to the extent arising from the exercise of RevMed's practice of its license under subsection A). RevMed shall have the right to terminate all or any portion of the rights granted to it under subsection A, upon written notice to Sanofi. + +C. Royalties. If this Agreement is terminated in its entirety or with respect to one or more Products, other than by RevMed pursuant to Section 12.2(b) (Termination for Material Breach) or 12.2(c) (Termination for Insolvency), RevMed shall pay to Sanofi on a Product-by-Product basis royalties on sales of terminated Products (such Products, which for the purpose of clarity shall not include any Non-SHP2 Product, hereinafter referred to as "Termination Products"), calculated based on worldwide Net Sales (as such term is applied mutatis mutandis to RevMed and including sales in the U.S.) by RevMed and its Affiliates and Sublicensees of such Termination Products as follows: [***]. RevMed shall pay Sanofi such royalties until the earlier of (x) expiration of the Post-Termination Royalty Term therefor and (y) a Change of Control of Sanofi. Upon any termination of this Agreement, RevMed shall pay to Sanofi any amounts owed to Third Parties under license agreements to which Sanofi is a party that grant Sanofi a license under such Third Party's Patent Rights or Know-How that is sublicensed to RevMed pursuant to Section 12.3(c)(ii)A, unless RevMed declines in writing to obtain such sublicense. "Post-Termination Royalty Term" means: (I) with respect to a particular country and a particular Termination Product that is the subject of the royalty obligations under Section 12.3(c)(ii)B(1), the period of time commencing upon the First Commercial Sale of such Termination Product in such country (by RevMed or its Affiliates or sublicensees) and ending upon the latest of (a) the date on which there is no Valid Claim (as such term is applied mutatis mutandis to Sanofi Sole Program Patents) of a Sanofi Sole Program Patent that would be infringed by the sale of such Termination Product in such country; (b) the expiration of any Regulatory Exclusivity granted with respect to such Termination Product in such country[***] and (II) with respect to a particular country and a particular Termination Product that is subject of the royalty obligations under Section 12.3(c)(ii)B(2) or Section 12.3(c)(ii)B(3), the period of time commencing upon the First Commercial Sale of such Termination Product in such country (by RevMed or its Affiliates or sublicensees) and ending upon the latest of (a) the expiration of any Regulatory Exclusivity granted with respect to such Termination Product in such country; and (b) [***]. 61 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +(iii) Inventory Sell-Off Period. In the case of a termination of this Agreement, Sanofi (with respect to the Termination Products in the Licensed Territory), shall be entitled, for a period of [***] after termination, to (i) complete Manufacture of work-in-progress, and (ii) continue conducting Commercialization activities being conducted by Sanofi hereunder as of such termination (if applicable, with respect to the terminated country(ies)), to the extent related to such Termination Product in Sanofi's inventory as of such termination (or added to such inventory as a result of the completion described in clause (i)), provided that Sanofi fulfills its payment obligations under this Agreement in connection with such inventory sell-off, provided further that the sharing of Net Profits and Net Losses under the Profit/Loss Share Agreement shall continue to apply during the sell-off period. For clarity, from and after the expiration of such [***] period all rights and licenses granted to Sanofi hereunder (if applicable, with respect to the terminated country(ies)) shall terminate (except as necessary to permit Sanofi to perform its obligations under this Article XII). + +(iv) Regulatory Materials; Data. Within [***] after the effective date of such termination for Termination Products for which Regulatory Approval has been obtained prior to the effective date of such termination or [***] for other Termination Products (or as promptly as practical thereafter, if such period is not practical under Applicable Law), Sanofi shall transfer and assign to RevMed all Regulatory Approvals relating to such Termination Products, and, to the extent not previously provided to RevMed, transfer other Regulatory Materials including data from preclinical, non-clinical and clinical studies conducted by or on behalf of Sanofi, its Affiliates or Sublicensees on such Termination Products and all pharmacovigilance data (including all adverse event databases) on such Termination Products. In addition, subject to any applicable provisions of any Third Party contract manufacturing agreement, Sanofi shall, or cause its Affiliate or Third Party contract manufacturer to, grant RevMed and any of its Affiliates and Third Party contract manufacturer the right to reference any and all drug master files pertaining to Termination Products within the foregoing time period for the relevant Termination Products. At RevMed's reasonable request, for a period not to exceed [***] following the effective date of termination, Sanofi shall provide RevMed with assistance up to a total of [***] with any inquiries and correspondence with Regulatory Authorities relating to any such Termination Product. [***] The foregoing shall not apply to the extent containing proprietary information or technology of any Third Party relating to proprietary active ingredients contained in Combination Products or any Non-SHP2 Products, provided that Sanofi shall, for any Combination Products, upon written request by RevMed and to the extent permitted by the terms of its Third Party agreements, provide reasonable assistance to RevMed to enable RevMed to access such information or technology by, for example, facilitating introductions to and discussions with the relevant Third Party with respect to such information or technology, provided that such assistance shall count toward the [***] total set forth in the preceding sentence. + +(v) Trademarks. Sanofi shall transfer and assign, and shall ensure that its Affiliates transfer and assign, to RevMed, at no cost to RevMed, all Product Marks exclusively relating to any Termination Product, provided that such Product Marks do not contain the business entity names of Sanofi or its Affiliates or variations thereof, except as may otherwise be required by Applicable Law during a transition period to avoid any interruptions in supply of Termination Product to patients. In such case if requested by Sanofi, RevMed shall sign a non-royalty bearing trademark license agreement in the form mutually agreed by the Parties, as requested by Sanofi. 62 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +(vi) Transition Assistance. With regard to Termination Products in countries for which the licenses to Sanofi are terminating, Sanofi shall provide the following transitional assistance, with costs allocated as set forth below: + +A. Each Party shall comply with Section 11.6 with regard to each Party's Confidential Information. + +B. To the extent Sanofi has the right to do so, Sanofi shall promptly provide RevMed with a copy (which may be redacted in Sanofi's discretion if required to protect confidential information of Sanofi or a Third Party) of each license agreement, collaboration agreement or vendor agreement then effective between Sanofi (or its Affiliates) and a Third Party that exclusively relates to any Termination Product, or the Development, Manufacture and Commercialization thereof, and, upon RevMed's request, to the extent Sanofi has the right to do so, Sanofi shall assign or sublicense, and shall ensure that its Affiliates assign or sublicense, to RevMed any such agreement(s). If Sanofi does not have the right to do so, Sanofi will provide RevMed with contact information for such Third Party so that RevMed may pursue an agreement directly with such licensor, collaborator or vendor with respect to Termination Products. + +C. Sanofi shall, at RevMed's request, for a period not to exceed [***] following the effective date of termination, provide reasonable technical assistance up to a total of [***] and, to the extent not already provided to RevMed, transfer copies of (including when available, in electronic format) all Sanofi Sole Program Know-How to RevMed or its designee, including without limitation: [***], in each case to the extent such materials are exclusively related to the Termination Product. All such Know-How so provided to RevMed shall be deemed Confidential Information of Sanofi. Furthermore, Sanofi shall within [***] after the effective date of such termination, transfer to RevMed all files and documents relating to the prosecution, defense or enforcement of the RevMed Licensed Patents or Joint Program Patents and provide reasonable assistance for a period not to exceed [***] following the effective date of termination, up to a total of [***], in the transfer of the prosecution, defense and enforcement responsibilities to RevMed, including by executing any documents reasonable necessary therefor. + +D. At the end of the sell-off period set forth in Section 12.3(c)(iii), Sanofi shall transfer to RevMed any and all inventory of SHP2 Inhibitors and Termination Products (including all research materials, final product, bulk drug substance, intermediates, work-in-process, formulation materials, reference standards, drug product clinical reserve samples, packaged retention samples, and the like) then in the possession of Sanofi, its Affiliates or Sublicensees, and continue or have continued any ongoing stability studies pertaining to any materials so transferred to RevMed for a reasonable period of time until RevMed can assume responsibility for such activities. Notwithstanding the allocation of costs described below, all such inventory shall be purchased by RevMed at a price equal to [***]. + +E. If at the time of such termination, RevMed or its Affiliates are not Manufacturing a particular Termination Product, then, at RevMed's request, Sanofi shall: (1) [***], provided that Sanofi shall in no case be obligated to [***], and provided further that such [***]; and (2) if it has the right to do so, assign or transfer to RevMed any Manufacturing agreement between Sanofi and a Third Party contract manufacturer with respect to such Termination Product; or (3) conduct a technology transfer analogous to that described in Section 7.2. 63 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +F. If at the time of such termination, Sanofi or its Affiliates are conducting any Clinical Trials (including Registrational Clinical Trials) of a Termination Product, then, at RevMed's election on a trial-by-trial basis, Sanofi shall cooperate, and shall ensure that its Affiliates cooperate, with RevMed to transfer the conduct of all such Clinical Trials to RevMed within [***] after the effective date of such transfer (to the extent practical in light of applicable regulatory and patient safety concerns) and RevMed shall assume any and all liability, and is liable, for such Clinical Trials conducted after the effective date of such termination (except to the extent Sanofi has an obligation of indemnification under Article XIV existing for a claim that arose prior to the effective date of such termination). + +G. If at the time of such termination, Sanofi or its Affiliates are Commercializing a particular Termination Product, then, at RevMed's request, the Parties shall negotiate in good faith a transition services agreement to cover detailing and promotion of such Termination Product (in the same manner and no more extensive than the then-current detailing and promotional efforts of Sanofi) by Sanofi or its Affiliate or contract sales force pursuant to a transition plan agreed by the Parties for a period not to exceed [***], and RevMed shall pay Sanofi a commercially reasonable amount to conduct such activities (which amount would include a commercially reasonable per-detail rate). + +H. In addition to the foregoing, Sanofi shall use reasonable efforts with respect to those activities for which it is responsible hereunder to cooperate with RevMed to achieve an orderly transition of the Development, Manufacturing and Commercialization of Termination Products from Sanofi or its applicable Affiliate to RevMed. + +I. Except as provided in Sections 12.3(c)(vi)D-E, Sanofi's activities under this Section 12.3(c)(vi) shall be conducted [***]. + +(d) Effect of Termination by Sanofi for Safety or for RevMed's Material Breach or Insolvency. Upon termination of this Agreement by Sanofi pursuant to Section 12.2(a)(iii) (Termination by Sanofi for Safety), Section 12.2(b) (Termination for Material Breach) or 12.2(c) (Termination for Insolvency), the following provisions shall apply: + +(i) License to Sanofi. All licenses and other rights granted to Sanofi under the RevMed Licensed Technology under this Agreement shall terminate (except as necessary to permit Sanofi to perform its surviving obligations under this Article XII) and all rights thereunder shall revert to RevMed; provided, however, RevMed shall, effective upon any such termination of this Agreement, and hereby does, grant to Sanofi a non- exclusive, worldwide license, with the right to grant sublicenses to contractors and otherwise only with RevMed's prior written consent, under each (1) RevMed Program Invention and (2) [***]. For the avoidance of doubt, the Patent Rights licensed under this Section 12.3(d)(i) do not include any [***]. 64 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +(ii) Inventory Sell-Off Period. In the case of a termination of this Agreement, Sanofi (with respect to the Termination Products in the Licensed Territory), shall be entitled, for a period of [***] after termination, to (i) complete Manufacture of work-in-progress, and (ii) continue conducting Commercialization activities being conducted by Sanofi hereunder as of such termination (if applicable, with respect to the terminated country(ies)), to the extent related to Termination Product in Sanofi's inventory as of such termination (or added to such inventory as a result of the completion described in clause (i)), provided that Sanofi fulfills its payment obligations under this Agreement in connection with such inventory sell-off, provided further that the payment of royalties to RevMed and the sharing of Net Profits and Net Losses under the Profit/Loss Share Agreement shall continue to apply during the sell-off period. For clarity, from and after the expiration of such [***] period all rights and licenses granted to Sanofi hereunder (if applicable, with respect to the terminated country(ies)) shall terminate (except as necessary to permit Sanofi to perform its obligations under this Article XII). + +(iii) Regulatory Materials; Data. Within [***] of the effective date of such termination (or as promptly as practical thereafter, if such period is not practical under Applicable Law), [***], Sanofi shall transfer and assign to RevMed all Regulatory Approvals relating to Termination Products, and, to the extent not previously provided to RevMed, transfer other Regulatory Materials including data from preclinical, non-clinical and clinical studies conducted by or on behalf of Sanofi, its Affiliates or Sublicensees on any Termination Products and all pharmacovigilance data (including all adverse event databases) on any Termination Products. + +(iv) Trademarks. [***], Sanofi shall transfer and assign, and shall ensure that its Affiliates transfer and assign, to RevMed, [***], all Product Marks exclusively relating to any Termination Product, provided that such Product Marks do not contain the business entity names of Sanofi or its Affiliates or variations thereof. + +(e) Effect of Termination by Sanofi of [***] for Change of Control of RevMed. Upon termination of [***] by Sanofi pursuant to Section 12.2(a)(ii)B (Termination by Sanofi for Change of Control) in the case of an Acquiror of RevMed that is a Major Biopharmaceutical Company, RevMed, [***], will (1) make available to Sanofi copies of [***], (2) provide Sanofi with copies of [***], (3) provide Sanofi with all [***], and (4) otherwise provide Sanofi all reasonable assistance in [***]. Furthermore, in such case, except for [***], all Committees shall [***]. + +12.4 Survival. The following Sections and Articles shall survive the termination or expiration of this Agreement: Articles I (Definitions) (to the extent necessary to give effect to the other Sections and Articles that survive under this Section 12.4) and XV (General Provisions) and Sections 5.8 (Development Records) (for the period stated therein), 9.8 (Records) (for the period stated therein), 11.1 (Duty of Confidence), 11.2 (Exceptions), 11.3 (Authorized Disclosures), 11.5(a) and 11.5(b) (Publicity; Use of Names), 11.6 (Return of Confidential Information), 11.7 (Attorney-Client Privilege), 11.8 (Permitted Disclosures for CREATE Act), 12.3 (Effects of Expiration or Termination), 12.4 (Survival), 12.5 (Accrued Rights and Obligations), 12.6 (Termination Not Sole Remedy), 14.1 (Indemnification by RevMed) (as to activities conducted during the Term), 14.2 (Indemnification by Sanofi) (as to activities conducted during the Term), 14.3 (Indemnification Procedure), 14.4 (Mitigation of Loss), and 14.5 (Limitation of Liability). 65 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +12.5 Accrued Rights and Obligations. Expiration or termination of this Agreement shall not diminish either Party's rights, or relieve either Party of any of its obligations, in each case that have been accrued prior to the effective date of such expiration or termination. + +12.6 Termination Not Sole Remedy. Except as set forth in Section 5.7, termination is not the sole remedy under this Agreement and, whether or not termination is effected and notwithstanding anything contained in this Agreement to the contrary, all other remedies shall remain available except as agreed to otherwise herein. + +Article XIII. + +REPRESENTATIONS, WARRANTIES AND COVENANTS; CLOSING CONDITIONS + +13.1 Representations and Warranties of Each Party. Each Party hereby represents and warrants, as of the Execution, and covenants (as applicable) to the other Party as follows: + +(a) It is a company or corporation duly organized, validly existing, and in good standing under the laws of the jurisdiction in which it is incorporated, and has the full right, power and authority to enter into this Agreement, to perform its obligations hereunder. + +(b) (i) This Agreement has been duly executed by it and is legally binding upon it, enforceable in accordance with its terms, (ii) it has taken all necessary corporate action on its part required to authorize the execution and delivery of this Agreement and, (iii) this Agreement, and the performance of its obligations hereunder, do not conflict with any agreement, instrument or understanding, oral or written, to which it is a party or by which it may be bound, nor violate any material law or regulation of any court, governmental body or administrative or other agency having jurisdiction over it. + +(c) (i) It is familiar with the provisions and restrictions contained in the FCPA and has adopted and maintains an FCPA policy; (ii) it shall comply with the FCPA in connection with its activities under this Agreement; (iii) it shall not, in the course of its activities under this Agreement, offer, promise, give, demand, seek or accept, directly or indirectly, any gift or payment, consideration or benefit in kind that would or could be construed as an illegal or corrupt practice; and (iv) it is not a government official (as the term is defined in the FCPA) or affiliated with any government official. + +(d) (i) Neither it nor any of its Affiliates has been debarred or is subject to debarment pursuant to Section 306 of the FFDCA or analogous provisions of Applicable Law outside the United States or listed on any Excluded List and (ii) neither it nor any of its Affiliates has, to its knowledge, used in any capacity, in connection with the activities to be performed under this Agreement, any individual or entity that has been debarred pursuant to Section 306 of the FFDCA or analogous provisions of Applicable Law outside the United States, or that is the subject of a conviction described in such Section or analogous provisions of Applicable Law outside the United States, or listed on any Excluded List. + +(e) It will maintain throughout the Term all permits, licenses, registrations and other forms of authorizations and approvals from any Governmental Authority, necessary or required to be obtained or maintained by such Party in order for such Party to execute and deliver this Agreement and to perform its obligations hereunder in a manner which complies with all Applicable Law. 66 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +13.2 Representations and Warranties by RevMed. Except as disclosed in the Disclosure Schedule to this Agreement in Exhibit N of the Correspondence, RevMed represents and warrants to Sanofi as of the Execution Date that: + +(a) RevMed has not had any Affiliates prior to the Execution Date and does not have any Affiliates as of the Execution Date; + +(b) RevMed is the sole and exclusive owner of all of the RevMed Background Technology, free and clear or all liens and encumbrances, and no Third Party owns or possesses any right, title or interest in or to any of the RevMed Licensed Technology existing as of the Execution Date; + +(c) RevMed has not previously agreed to or otherwise committed to assign, transfer or convey or otherwise encumber its rights, title and interests in and to RevMed Licensed Technology existing as of the Execution Date; + +(d) To the Knowledge of RevMed, all Patent Rights owned or Controlled by RevMed, existing as of the Execution Date, and reasonably necessary or useful for conducting the Collaboration or otherwise necessary or useful for Researching, Developing, Manufacturing, Commercializing or otherwise exploiting Product in the Field, including the Development or Manufacture of the Products as contemplated in the initial Research Plan and Development Plan attached to this Agreement as of the Execution Date and Commercialization of the Products, as provided hereunder are listed in Exhibit O of the Correspondence; + +(e) RevMed has the right to grant the licenses and other rights expressly granted herein to Sanofi, and it has not granted any license, right or interest in, to or under the RevMed Licensed Technology to any Third Party (or agreed to make any such grant) to exploit SHP2 Inhibitors or Products in the Field; + +(f) To RevMed's Knowledge, the research and development of the Development Candidate and use of RevMed Background Know-How in connection therewith does not infringe the claims of any issued Patent or published patent application of any Third Party; + +(g) The research and development of the SHP2 Inhibitors and use of RevMed Background Know-How in connection therewith does not misappropriate the Know-How of any Third Party; + +(h) The research and development of SHP2 Inhibitors (including pursuant to the activities set forth in the initial Research Plan and initial Development Plan) does not breach any obligation of confidentiality or non-use owed by RevMed to a Third Party; + +(i) To RevMed's Knowledge, no Third Parties are misappropriating the RevMed Background Know-How and there are no activities by Third Parties that are infringing the RevMed Background Patents; 67 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +(j) There are no judgments or settlements against or owed by RevMed, and to RevMed's Knowledge, there are no pending claims or litigation or written threats of possible claims or litigation, in each case relating to the SHP2 Inhibitors or otherwise to RevMed Background Technology; + +(k) The issued RevMed Background Patents are valid, enforceable and subsisting, and the pending applications included in the RevMed Background Patents are being prosecuted in accordance with Applicable Law in all material respects, and RevMed has presented all relevant references, documents and information of which it and the inventors are aware to the relevant patent examiners and patent offices that are required to be so submitted under Applicable Law; + +(l) The RevMed Background Patents have been filed and maintained properly and correctly and all applicable fees have been paid on or before the due date for payment in all material respects; + +(m) RevMed has not received any written notice alleging that the RevMed Background Patents, existing as of the Execution Date, are or would be invalid or unenforceable or that the applications included in such RevMed Background Patents will not proceed to grant; + +(n) There (i) are no actual, pending or, to RevMed's Knowledge, alleged or threatened, adverse actions, suits, claims, interferences, re-examinations, oppositions, inventorship challenges or formal governmental investigations involving the RevMed Background Technology that are in or before any Governmental Authority, and (ii) are no actual, pending or, to RevMed's Knowledge, alleged or threatened, adverse actions, suits, claims, interferences, re-examinations, oppositions, inventorship challenges or formal governmental investigations involving the RevMed Licensed Technology; + +(o) The inventions claimed or covered by the RevMed Licensed Technology (i) were not conceived, discovered, developed or otherwise made in connection with any research activities funded, in whole or in part, by the federal government of the United States or any agency thereof, (ii) are not a "subject invention" as that term is described in 35 U.S.C. § 201(e), (iii) are not otherwise subject to the provisions of the Patent and Trademark Law Amendments Act of 1980, as amended, codified at 35 U.S.C. §§ 200-212, as amended, as well as any regulations promulgated pursuant thereto, including in 37 C.F.R. part 401, and (iv) are not the subject of any licenses, options or other rights of any other Governmental Authority, within or outside the United States, due to such Governmental Authority's funding of research and development or otherwise (other than the right to receive payments or any law of general application that applies to personal property generally, e.g., takings laws); + +(p) None of the RevMed Background Patents are licensed to RevMed from a Third Party; + +(q) There are no exclusivity provisions or any other restrictions in any agreement between RevMed or its Affiliates, on the one hand, and any Third Party, on the other hand, of any SHP2 Inhibitor or Product, that would limit Sanofi's ability to exercise its rights under this Agreement; 68 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +(r) All current and former officers, employees, and consultants of RevMed who are inventors of or have otherwise contributed in a material manner to the creation or development of any RevMed Background Technology have executed and delivered to RevMed an assignment or other agreement regarding the protection of proprietary information and the assignment to RevMed of inventions or work product created or generated in the course of employment by or providing services for RevMed, the current forms of which has been made available for review by Sanofi; + +(s) The portions of RevMed Background Know-How that are proprietary to RevMed and unpublished as of the Execution Date and material to Research, Development, Manufacture or Commercialization of SHP2 Inhibitors or Products in the Field have been kept confidential by RevMed and have only been disclosed to Third Parties under obligations of confidentiality, and to the Knowledge of RevMed, no such Third Party has breached any such confidentiality obligation to RevMed; + +(t) RevMed has included in the electronic dataroom for this Agreement all information in its possession that is material to the Research, Development, Manufacture or Commercialization of the Development Candidate as of the Execution Date, and such information does not contain any untrue statement(s) of fact, or omit to state any fact(s), in either case that are collectively material to the Research, Development, Manufacture or Commercialization of the Development Candidate; and + +(u) To RevMed's Knowledge, RevMed and its contractors and consultants have conducted all research and development of the SHP2 Inhibitors and Products in material compliance with all Applicable Laws. + +13.3 Covenants by RevMed. RevMed covenants to Sanofi that: + +(a) RevMed will not, and will cause its Affiliates not to, grant a lien on the RevMed Licensed Technology to any Third Party or knowingly permit a lien to be imposed on the RevMed Licensed Technology other than those disclosed to Sanofi by RevMed and that do not conflict with the rights granted Sanofi hereunder. + +(b) RevMed will not, and will cause its Affiliates and (sub)contractors not to, use any government or not-for-profit organization funding that would encumber the RevMed Licensed Technology without the prior written consent of Sanofi, which consent may be withheld in Sanofi's sole discretion. For clarity, this Section 13.3(b) does not apply to Permitted Contractors and Researchers. + +(c) At any time upon written request from Sanofi, if the Parties mutually agree that an agreement between RevMed and a Permitted Contractor or Researcher should be amended to optimize language regarding assignment of inventions or intellectual property to ensure conformance with the principles relating thereto set forth in this Agreement, RevMed will use Commercially Reasonable Efforts to cause such Permitted Contractors or Researchers to sign written agreements substantially in the form agreed upon by the Parties. 69 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +(d) With respect to the sponsored research agreements of RevMed in effect as of the Effective Date, if after the Effective Date, there is a material amendment or modification to any such sponsored research agreement or work plan thereunder, and if Sanofi in good faith desires to assume and perform the subject research in-house and if Sanofi reasonably possesses the relevant expertise, capacity and applicable materials necessary for such research at such time (the "Capabilities"), then Sanofi shall notify RevMed and if RevMed does not give notice to terminate such sponsored research agreement to the applicable Third Party under such agreement within [***] after Sanofi reasonably demonstrates that it has the Capabilities for such research activities, then RevMed shall obtain a license to the intellectual property rights in any inventions arising out of such sponsored research such that they are "Controlled" by RevMed for purposes of this Agreement and RevMed shall [***]. + +13.4 Mutual Covenants. + +(a) No Debarment. In the course of the Research, Development, Manufacture and Commercialization of the Products, neither Party nor its Affiliates shall use any employee or consultant who has been debarred by any Regulatory Authority or, to such Party's or its Affiliates' Knowledge, is the subject of debarment proceedings by a Regulatory Authority. Each Party shall notify the other Party promptly upon becoming aware (in the case of Sanofi, by its compliance department) that any of its or its Affiliates' employees or consultants has been debarred or is the subject of debarment proceedings by any Regulatory Authority. + +(b) Compliance. Each Party and its Affiliates shall comply in all material respects with all Applicable Law (including all anti-bribery laws and laws applicable to the manufacture of human pharmaceuticals) in the Research, Development, Manufacture and Commercialization of the Products and performance of its obligations under this Agreement and the Ancillary Agreements. + +(c) Information. In addition to the requirements of Section 6.5, each Party will provide the other Party with all information in its control reasonably necessary or desirable for such other Party to comply with its pharmacovigilance responsibilities in all countries in the Territory, including, as applicable, any adverse drug experiences (including those events or experiences that are required to be reported to the FDA under 21 C.F.R. §§ 312.32 or 314.80 or to foreign Regulatory Authorities under corresponding Applicable Law outside the United States of America) from pre-clinical or clinical laboratory, animal toxicology, pharmacology studies and clinical studies, in each case in the form reasonably requested by such other Party. + +13.5 No Other Warranties. EXCEPT AS EXPRESSLY STATED IN THIS ARTICLE XIII, (A) NO REPRESENTATION, CONDITION OR WARRANTY WHATSOEVER IS MADE OR GIVEN BY OR ON BEHALF OF SANOFI OR REVMED; AND (B) ALL OTHER CONDITIONS AND WARRANTIES WHETHER WRITTEN OR ORAL OR EXPRESS OR IMPLIED ARE HEREBY EXPRESSLY EXCLUDED, INCLUDING ANY CONDITIONS AND WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR NON-INFRINGEMENT. 70 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +13.6 Closing Conditions. The obligations of each Party to consummate the transactions contemplated by this Agreement and the Ancillary Agreements (the "Contemplated Transactions") is subject to the fulfillment, or, to the extent permitted by Applicable Law, waiver by such Party, of each of the following conditions (collectively, the "Closing Conditions"): + +(a) The representations and warranties of the other Party contained in this Agreement (i) that are not qualified by materiality, material adverse effect, substantial compliance or similar materiality qualifier will be true and correct in all material respects both when made and at the closing with the same force and effect as if made on the Effective Date and (ii) that are qualified by materiality, material adverse effect, substantial compliance or similar materiality qualifier will be true and correct in all respects both when made and at the closing with the same force and effect as if made on the Effective Date, except, in each of (i) and (ii) as would not reasonably be expected, individually or in the aggregate, to have a material impact on the transaction contemplated by this Agreement. + +(b) All actions by (including any authorization, consent or approval) in respect of (including notice to), or filings with, any Governmental Authority or other Person that are required to be obtained pursuant to Section 3.8 to consummate the Contemplated Transactions (including any HSR/Antitrust Filing) will have been obtained or made, in a manner reasonably satisfactory in form and substance to such Party, and no such authorization, consent or approval will have been revoked. + +(c) No Material Adverse Event shall have occurred or arisen since the Execution Date. + +Article XIV. + +INDEMNIFICATION; LIABILITY; INSURANCE + +14.1 Indemnification by RevMed. RevMed shall indemnify, defend and hold harmless Sanofi, its Affiliates and their respective officers, directors, agents and employees ("Sanofi Indemnitees") from and against any Third Party Claims and Losses arising therefrom under or related to this Agreement against any of them to the extent arising or resulting from: + +(a) the negligence, recklessness or willful misconduct of any of the RevMed Indemnitees; or + +(b) the material breach of any of the warranties or representations made by RevMed to Sanofi under this Agreement or any Ancillary Agreement; or + +(c) the material breach by RevMed of any of its obligations pursuant to this Agreement or any Ancillary Agreement; + +except in each case ((a) through (c)), to the extent the applicable Third Party Claim and Losses arising therefrom arise or result from (i) the negligence, recklessness or willful misconduct of any Sanofi Indemnitee; (ii) the breach of any of the warranties or representations made by Sanofi to RevMed under this Agreement or any Ancillary Agreement; or (iii) any breach by Sanofi of its obligations pursuant to this Agreement or any Ancillary Agreement. + +14.2 Indemnification by Sanofi. Sanofi shall indemnify, defend and hold harmless RevMed, its Affiliates, and their respective officers, directors, agents and employees ("RevMed Indemnitees") from and against any Third Party Claims and Losses arising therefrom under or related to this Agreement against any of them to the extent arising or resulting from: + +(a) (i) the Research, Development or Manufacture of any Products by or on behalf of Sanofi or any of its Affiliates, Sublicensees or contractors (other than by RevMed or its Affiliates), or (ii) the Commercialization of Products by or on behalf of Sanofi; or 71 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +(b) the negligence, recklessness or willful misconduct of any of the Sanofi Indemnitees; or + +(c) the material breach of any of the warranties or representations made by Sanofi to RevMed under this Agreement or any Ancillary Agreement; or + +(d) the material breach by Sanofi of any of its obligations pursuant to this Agreement or any Ancillary Agreement; + +except in each case ((a) through (d)), to the extent the applicable Third Party Claim and Losses arising therefrom arise or result from (i) the negligence, recklessness or willful misconduct of any RevMed Indemnitee; (ii) the breach of any of the warranties or representations made by RevMed to Sanofi under this Agreement or any Ancillary Agreement; or (iii) any breach by RevMed of its obligations pursuant to this Agreement or any Ancillary Agreement. + +14.3 Indemnification Procedure. + +(a) Notice of Claim. All indemnification claims in respect of any Sanofi Indemnitee or RevMed Indemnitee seeking indemnity under Section 14.1 or Section 14.2 (collectively, the "Indemnitees" and each an "Indemnitee") will be made solely by the corresponding Party (the "Indemnified Party"). The Indemnified Party will give the indemnifying Party (the "Indemnifying Party") prompt written notice (an "Indemnification Claim Notice") of any Losses or discovery of fact upon which such Indemnified Party intends to base a request for indemnification under Section 14.1 or Section 14.2, but failure to provide prompt notice will not relieve the Indemnifying Party from its obligation to indemnify the Indemnitee hereunder except to the extent any Losses result from such delay in providing such notice. Each Indemnification Claim Notice must contain a description of the claim and the nature and amount of such Loss (to the extent that the nature and amount of such Loss are known at such time). Together with the Indemnification Claim Notice, the Indemnified Party will furnish promptly to the Indemnifying Party copies of all notices and documents (including court papers) received by any Indemnitee in connection with the Third Party Claim. + +(b) Control of Defense. At its option, the Indemnifying Party may assume the defense of any Third Party Claim subject to indemnification as provided for in Section 14.1 or Section 14.2 by giving written notice to the Indemnified Party within [***] after the Indemnifying Party's receipt of an Indemnification Claim Notice. Upon assuming the defense of a Third Party Claim, the Indemnifying Party may select and appoint the lead legal counsel for the defense of the Third Party Claim. Should the Indemnifying Party assume the defense of a Third Party Claim, the Indemnifying Party will not be liable to the Indemnified Party or any other Indemnitee for any legal expenses subsequently incurred by such Indemnified Party or other Indemnitee in connection with the analysis, defense or settlement of the Third Party Claim. 72 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +(c) Right to Participate in Defense. Without limiting Section 14.3(b), any Indemnitee will be entitled to participate in, but not control, the defense of such Third Party Claim and to employ counsel of its choice for such purpose; provided, however, that such employment will be at the Indemnitee's own expense unless (a) the employment thereof has been specifically authorized by the Indemnifying Party in writing, or (b) the Indemnifying Party has failed to assume the defense and employ counsel in accordance with Section 14.3(b) (in which case the Indemnified Party will control the defense). + +(d) Settlement. With respect to any Losses relating solely to the payment of money damages in connection with a Third Party Claim and that will not result in the Indemnitee's becoming subject to injunctive or other relief or otherwise adversely affect the business of the Indemnitee in any manner, and as to which the Indemnifying Party has acknowledged in writing the obligation to indemnify the Indemnitee hereunder, the Indemnifying Party will have the sole right to consent to the entry of any judgment, enter into any settlement or otherwise dispose of such Loss, on such terms as the Indemnifying Party, in its sole discretion, will deem appropriate. The Indemnifying Party will pay all amounts on behalf of the Indemnified Party at or prior to the time of the entry of judgment. With respect to all other Losses in connection with Third Party Claims, where the Indemnifying Party has assumed the defense of the Third Party Claim in accordance with Section 14.3(b), the Indemnifying Party will have authority to consent to the entry of any judgment, enter into any settlement or otherwise dispose of such Loss provided it obtains the prior written consent of the Indemnified Party (which consent will be at the Indemnified Party's sole and absolute discretion). The Indemnifying Party that has assumed the defense of the Third Party Claim in accordance with Section 14.3(b) will not be liable for any settlement or other disposition of a Loss by an Indemnitee that is reached without the written consent of such Indemnifying Party. Regardless of whether the Indemnifying Party chooses to defend any Third Party Claim, no Indemnitee will admit any liability with respect to, or settle, compromise or discharge, any Third Party Claim without first offering to the Indemnifying Party the opportunity to assume the defense of the Third Party Claim in accordance with Section 14.3(b). + +(e) Cooperation. If the Indemnifying Party chooses to defend any Third Party Claim, the Indemnified Party will, and will cause each other Indemnitee to, cooperate in the defense thereof and will furnish such records, information and testimony, provide such witnesses and attend such conferences, discovery proceedings, hearings, trials and appeals as may be reasonably requested in connection with the defense of such Third Party Claim. Such cooperation will include access during normal business hours afforded to the Indemnifying Party to, and reasonable retention by the Indemnified Party of, records and information that are reasonably relevant to such Third Party Claim, and making Indemnitees and other employees and agents available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder. The Indemnifying Party will reimburse the Indemnified Party for all its reasonable out-of-pocket costs in connection with such cooperation. + +(f) Expenses. Except as provided above, the reasonable and verifiable costs and expenses, including fees and disbursements of counsel, incurred by the Indemnified Party in connection with any claim will be reimbursed on a [***] by the Indemnifying Party, without prejudice to the Indemnifying Party's right to contest the Indemnified Party's right to indemnification and subject to refund in the event the Indemnifying Party is ultimately held not to be obligated to indemnify the Indemnified Party. 73 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +14.4 Mitigation of Loss. Each Indemnified Party shall take and shall procure that its Affiliates take all such reasonable steps and action as are reasonably necessary or as the Indemnifying Party may reasonably require in order to mitigate any Third Party Claims (or potential losses or damages) under this Article XIV. Nothing in this Agreement shall or shall be deemed to relieve any Party of any common law or other duty to mitigate any losses incurred by it. + +14.5 Limitation of Liability. NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL, PUNITIVE, OR INDIRECT DAMAGES OR LOST PROFITS ARISING FROM OR RELATING TO ANY BREACH OF THIS AGREEMENT, REGARDLESS OF ANY NOTICE OF THE POSSIBILITY OF SUCH DAMAGES. NOTWITHSTANDING THE FOREGOING, NOTHING IN THIS SECTION 14.5 IS INTENDED TO OR SHALL LIMIT OR RESTRICT THE INDEMNIFICATION RIGHTS OR OBLIGATIONS OF ANY PARTY UNDER SECTION 14.1 OR SECTION 14.2, OR DAMAGES AVAILABLE FOR A PARTY'S BREACH OF ITS OBLIGATIONS RELATING TO CONFIDENTIALITY UNDER ARTICLE XI OR INTELLECTUAL PROPERTY UNDER ARTICLE X. + +14.6 Insurance. Each Party shall procure and maintain insurance, including product liability insurance, with respect to its activities hereunder and under the Ancillary Agreements and which is consistent with normal business practices of companies similarly situated at all times during which any SHP2 Inhibitors or Product is being clinically tested in human subjects or commercially distributed or sold. Sanofi may fulfill such obligation through self- insurance. Each Party shall provide the other Party with evidence of such insurance upon request and, in the case of RevMed, shall provide Sanofi with written notice at least [***] prior to the cancellation, non-renewal or material changes in such insurance. It is understood that such insurance shall not be construed to create a limit of either Party's liability with respect to its indemnification obligations under this Article XIV. + +Article XV. + +GENERAL PROVISIONS + +15.1 Force Majeure. Neither Party shall be held liable to the other Party nor be deemed to have defaulted under or breached this Agreement for failure or delay in performing any obligation under this Agreement to the extent such failure or delay is caused by or results from causes beyond the reasonable control of the affected Party, including embargoes, war, acts of war (whether war be declared or not), acts of terrorism, insurrections, riots, civil commotions, strikes, lockouts or other labor disturbances (whether involving the workforce of the nonperforming Party or of any other Person), fire, floods, earthquakes or other acts of God, or acts, generally applicable action or inaction by any governmental authority (but excluding any government action or inaction that is specific to such Party, its Affiliates or Sublicensees, such as revocation or non-renewal of such Party's license to conduct business), or omissions or delays in acting by the other Party, or unavailability of materials related to the Manufacture of the Products (each cause, an event of "Force Majeure"). The affected Party shall give notice to the other Party in writing as soon as reasonably practical but no later than [***] after the occurrence of the event of Force Majeure, specifying the nature and extent of the event of Force Majeure, its anticipated duration and any 74 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +action being taken to avoid or minimize its effect. The suspension of performance allowed hereunder shall be of no greater scope and no longer duration than is reasonably required, and the affected Party shall promptly undertake and continue diligently all reasonable efforts necessary to cure such force majeure circumstances or to perform its obligations in spite of the ongoing circumstances. In the event that RevMed is the non-performing Party and the Force Majeure continues for more than [***] (which period, in its entirety or a portion thereof, is prior to the commencement of the Registration Program for a Product, which Development thereof is impacted by such Force Majeure), Sanofi's payment obligations under Article IX shall be suspended until notification by RevMed to Sanofi of the termination of such Force Majeure Event (and any related triggers and deadlines shall be similarly suspended). + +15.2 Assignment; Change of Control. + +(a) Neither Party may assign this Agreement or any of its rights or obligations hereunder, except as expressly permitted hereunder, or delegate any of its obligations under this Agreement, whether by operation of law or otherwise, in whole or in part, without the consent of the other Party, except as follows: + +(i) Sanofi may, without consent of RevMed, assign this Agreement or its rights and obligations hereunder in whole or in part to any Affiliate of Sanofi, and RevMed may, with the consent of Sanofi (not to be unreasonably withheld, delayed or conditioned), assign this Agreement or its rights and obligations hereunder in whole or in part to any Affiliate of RevMed; and + +(ii) Either Party may, without consent of the other Party, assign this Agreement in whole to (i) in the case of RevMed, its successor in interest or assignee or purchaser, as applicable, in the case of a Change of Control or (ii) in the case of Sanofi, its successor in interest or assignee or purchaser, as applicable, in connection with the sale of all or substantially all of its assets to which this Agreement relates, or in connection with a merger, acquisition or similar transaction. In the case of Sanofi the intellectual property owned or controlled by any such successor in interest or assignee or purchaser (such successor in interest or assignee or purchaser, as applicable, an "Acquiror") or its Acquiror Family prior to the applicable Change of Control or other similar transaction immediately prior to such acquisition (other than as a result of a license from the acquired Party) or thereafter developed outside the scope of this Agreement in accordance with this Agreement shall be excluded from [***] and the Acquiror Family shall be excluded from "Affiliate" solely for purposes of the applicable components of the intellectual property definitions set forth herein. In the case of RevMed, the intellectual property owned or controlled by any such Acquiror or its Acquiror Family prior to the applicable Change of Control or other similar transaction immediately prior to such acquisition (other than as a result of a license from the acquired Party) or is thereafter developed outside the scope of this Agreement in accordance with this Agreement shall be excluded from the RevMed Licensed Technology, in each case only for so long as the remainder of the conditions of this Section 15.2 are met, and the Acquiror Family shall be excluded from "Affiliate" solely for purposes of the applicable components of the intellectual property definitions set forth herein, in all such cases if and only if: (A) the acquired Party remains a wholly-owned subsidiary of the Acquiror; (B) all intellectual property of the Acquired Party Family and 75 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +all research and development assets and operations of the Acquired Party Family, in each case relating to SHP2 Inhibitors and Products, remain with the Acquired Party Family and are not licensed or otherwise transferred to the Acquiror Party Family for any purpose; (C) the scientific and Development activities with respect to SHP2 Inhibitors and Products of the Acquired Party Family and Competing Products of the Acquiror Family (if any) are maintained separate and distinct, and (D) there is no exchange of Know-How relating to SHP2 Inhibitors and Products between the Acquired Party Family and the Acquiror Family. Any attempted assignment not in accordance with this Section 15.2 shall be null and void and of no legal effect. Any permitted assignee shall assume all assigned obligations of its assignor under this Agreement. The terms and conditions of this Agreement shall be binding upon, and shall inure to the benefit of, the Parties and their respected successors and permitted assigns. For clarity, any assignment by Sanofi shall be subject to Section 9.7(a). + +(b) Except as part of a transaction permitted under this Section 15.2, in no event shall RevMed assign or transfer, or agree to assign or transfer to any Third Party, any or all of the RevMed Licensed Patents without the consent of Sanofi, not be unreasonably withheld or conditioned. + +15.3 Severability. If any provision of this Agreement is held to be illegal, invalid or unenforceable under any present or future law and if the rights or obligations of either Party under this Agreement will not be materially and adversely affected thereby, (i) such provision shall be fully severable, (ii) this Agreement shall be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part hereof, (iii) the remaining provisions of this Agreement shall remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable provision or by its severance here from and (iv) in lieu of such illegal, invalid or unenforceable provision, there shall be added automatically as a part of this Agreement a legal, valid and enforceable provision as similar in terms to such illegal, invalid or unenforceable provision as may be possible and reasonably acceptable to the Parties. To the fullest extent permitted by Applicable Law, each Party hereby waives any provision of law that would render any provision hereof illegal, invalid or unenforceable in any respect. + +15.4 Notices. All notices which are required or permitted hereunder shall be in writing and sufficient if delivered personally, sent by e-mail (and promptly confirmed by personal delivery, registered or certified mail or overnight courier), sent by an internationally-recognized overnight courier or sent by registered or certified mail, postage prepaid, return receipt requested, addressed as follows: + +If to RevMed: + +Revolution Medicines, Inc. 700 Saginaw Dr. Redwood City, CA 94063 USA Attn: General Counsel Email: [***] 76 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +With a copy to: + +[***] Latham & Watkins LLP 140 Scott Drive Menlo Park, CA 94025 Fax: [***] + +If to Sanofi: + +Sanofi 50 Binney Street Cambridge, MA 02142 Attn: [***] + +With a copy to: + +Sanofi 50 Binney Street Cambridge, MA 02142 Attn: [***] + +or to such other address(es) as the Party to whom notice is to be given may have furnished to the other Party in writing in accordance herewith. Any such notice shall be deemed to have been given: (a) when delivered if personally delivered or sent by facsimile on a Business Day (or if delivered or sent on a non-Business Day, then on the next Business Day); (b) on the second (2nd) Business Day after dispatch if sent by an internationally- recognized overnight courier; or (c) on the tenth (10th) Business Day following the date of mailing, if sent by mail. + +15.5 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York without reference to any rules of conflict of laws. + +15.6 Dispute Resolution. + +(a) Except for matters within the JSC's authority that are resolved under Section 2.10, including through a Party's exercise of its final decision making authority in accordance therewith, and matters resolved pursuant to Section 5.6, any dispute, claim or controversy arising out of or relating to this Agreement, or the breach, termination, enforcement, interpretation or validity thereof, including the determination of the scope or applicability of this Agreement to arbitrate (a "Dispute") that is not resolved within [***] after written notice of the Dispute by one Party to the other shall be determined by arbitration in [***] before [***] arbitrators, unless the Parties mutually agree in writing otherwise. The arbitration shall be administered by JAMS pursuant to its Comprehensive Arbitration Rules and Procedures then in effect and the Expedited Procedures contained therein, as modified in this paragraph, except (i) to the extent such rules are inconsistent with this Section 15.6(a), in which case, this Section 15.6(a) shall control (including with regard to any limitations of liability or forms of relief), and (ii) [***] discovery depositions may be 77 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +conducted per side. The JAMS Expedited Procedures shall be modified to [***] of such procedures as in effect on the Effective Date, and the [***] shall be modified to provide that [***]. The language of the arbitration shall be English. The proceedings and decisions of the arbitrator shall be final and binding on the Parties, and judgment on the award may be entered in any court having jurisdiction. + +(b) The Parties shall maintain the confidential nature of the arbitration proceeding and the award, including the hearing, except as may be necessary to prepare for or conduct the arbitration hearing on the merits, or except as may be necessary in connection with a court application for a preliminary remedy, a judicial challenge to an award or its enforcement, or unless otherwise required by law or judicial decision. All arbitration proceedings and decisions of the arbitrators under this Section 15.6(b) shall be deemed Confidential Information of both Parties under Article XI. + +(c) Within [***] after the commencement of arbitration, each Party shall select [***] within [***] of the commencement of the arbitration. If the arbitrator selected by the Parties are unable or fail to agree upon [***] within the allotted time, [***] shall be appointed by JAMS in accordance with its rules. All arbitrators shall serve as a neutral, independent and impartial arbitrators. Each arbitrator shall have not less than [***] years of experience in biotechnology or pharmaceutical industry disputes. + +(d) The award shall be rendered within [***] of the constitution of the arbitral tribunal, unless the arbitrators determine that the interest of justice requires that such limit be extended. + +(e) The arbitrators may award to the prevailing Party, if any, as determined by the arbitrators, the costs and attorneys' fees reasonably incurred by the prevailing Party in connection with the arbitration. If the arbitrators determine a Party to be the prevailing Party under circumstances where the prevailing Party won some but not all of the claims and counterclaims, the arbitrators may award the prevailing Party an appropriate percentage of the costs and attorneys' fees reasonably incurred by the prevailing Party in connection with the arbitration. + +(f) The arbitrators are not empowered to award punitive or exemplary damages, and the Parties waive any right to recover any such damages. + +(g) Unless the Parties otherwise agree in writing, during the period of time that any arbitration proceeding is pending under this Agreement, (i) the Parties shall continue to comply with all those terms and provisions of this Agreement that are not the subject of the pending arbitration proceeding; and (ii) in the event that the subject of the dispute relates to the exercise by a Party of a termination right hereunder, including in the case of a material breach of this Agreement, the effectiveness of such termination shall be stayed until the conclusion of the proceedings under this Section 15.6. + +(h) Notwithstanding the foregoing, any dispute, controversy or claim relating to the scope, validity, enforceability or infringement of any Patent Rights or Trademark covering the manufacture, use, importation, offer for sale or sale of Products shall be submitted to a court of competent jurisdiction in the country in which such Patent Rights or Trademark were granted or arose. 78 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +(i) Notwithstanding anything to the contrary in Section 15.6(c), any dispute relating to the ownership of any Program Invention shall be finally adjudicated, according to U.S. patent law, by an independent U.S. patent counsel with appropriate expertise that is jointly appointed by Sanofi and RevMed. Some adjudication shall be completed within [***] after such counsel is appointed, and such counsel must be appointed within [***] after submission of the issue for resolution. + +(j) Nothing in this Section 15.6 will preclude either Party from seeking equitable relief or interim or provisional relief from a court of competent jurisdiction, including a temporary restraining order, preliminary injunction or other interim equitable relief, either prior to or during any arbitration. + +15.7 Rights in Bankruptcy. All rights and licenses granted under or pursuant to this Agreement by Sanofi or RevMed are and shall otherwise be deemed to be, for purposes of Section 365(n) of the U.S. Bankruptcy Code or any analogous provisions in any other country or jurisdiction, licenses of right to "intellectual property" as defined under Section 101 of the U.S. Bankruptcy Code. The Parties agree that the Parties, as licensees of such rights under this Agreement, shall retain and may fully exercise all of their rights and elections under the U.S. Bankruptcy Code or any analogous provisions in any other country or jurisdiction. The Parties further agree that, in the event of the commencement of a bankruptcy proceeding by or against either Party under the U.S. Bankruptcy Code or any analogous provisions in any other country or jurisdiction, the Party hereto that is not a Party to such proceeding shall be entitled to a complete duplicate of (or complete access to, as appropriate) any such intellectual property and all embodiments of such intellectual property, which, if not already in the non-subject Party's possession, shall be promptly delivered to it (i) upon any such commencement of a bankruptcy proceeding upon the non-subject Party's written request therefor, unless the Party subject to such proceeding elects to continue to perform all of its obligations under this Agreement or (ii) if not delivered under clause (i) above, following the rejection of this Agreement by or on behalf of the Party subject to such proceeding upon written request therefor by the non-subject Party. The Parties acknowledge and agree that payments made under Section 9.1 and Section 9.2 or pursuant to the Co-Promotion Agreement shall not (x) constitute royalties within the meaning of Section 365(n) of the U.S. Bankruptcy Code or any analogous provisions in any other country or jurisdiction or (y) relate to licenses of intellectual property hereunder. + +15.8 No Action. In no event shall either Party be obligated under the Agreement to take any action or omit to take any action that such Party believes, in good faith, would cause it to be in violation of any Applicable Law. + +15.9 Entire Agreement; Amendments. This Agreement, together with the Correspondence and the Exhibits hereto and thereto, contains the entire understanding of the Parties with respect to the collaboration and the licenses granted hereunder. Any other express or implied agreements and understandings, negotiations, writings and commitments, either oral or written, in respect to the collaboration and the licenses granted hereunder are superseded by the terms of this Agreement. The Exhibits to this Agreement and the Correspondence are incorporated herein by reference and shall be deemed a part of this Agreement. This Agreement may be amended, or any term hereof modified, only by a written instrument duly executed by authorized representatives of both Parties hereto. The Parties agree that, effective as of the Effective Date, 79 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +that certain Confidentiality Agreement between an Affiliate of Sanofi and RevMed dated as of June 21, 2017, as amended ("Confidentiality Agreement") shall be superseded by this Agreement, and that disclosures made prior to the Effective Date pursuant to the Confidentiality Agreement shall be subject to Article XI. + +15.10 Exhibits/Ancillary Agreements. In the event there is a conflict or inconsistency between or among the terms of this Agreement, the terms of the Correspondence, the terms of any Exhibit hereto or thereto, or the terms of any Ancillary Agreement, the order of precedence for resolution of such conflict or inconsistency in descending order shall be as follows: (i) this Agreement, (ii) the Correspondence, (iii) any Exhibit or Schedule of this Agreement or the Correspondence; (iii) any Ancillary Agreement; and (iv) any exhibit or schedule of any Ancillary Agreement. + +15.11 Headings. The captions to the several Articles, Sections, subsections and Exhibits hereof are not a part of this Agreement, but are merely for convenience to assist in locating and reading the several Articles, Sections, subsections and Exhibits hereof. + +15.12 Independent Contractors. It is expressly agreed that RevMed and Sanofi shall be independent contractors and that the relationship between the two Parties shall not constitute a partnership, joint venture or agency. Neither RevMed nor Sanofi shall have the authority to make any statements, representations or commitments of any kind, or to take any action, which shall be binding on the other Party, without the prior written consent of the other Party. + +15.13 Waiver. The waiver by either Party hereto of any right hereunder, or of any failure of the other Party to perform, or of any breach by the other Party, shall not be deemed a waiver of any other right hereunder or of any other breach by or failure of such other Party whether of a similar nature or otherwise. + +15.14 Cumulative Remedies. No remedy referred to in this Agreement is intended to be exclusive, but each shall be cumulative and in addition to any other remedy referred to in this Agreement or otherwise available under law. + +15.15 Waiver of Rule of Construction. Each Party has had the opportunity to consult with counsel in connection with the review, drafting and negotiation of this Agreement. Accordingly, the rule of construction that any ambiguity in this Agreement shall be construed against the drafting Party shall not apply. + +15.16 Business Day Requirements. In the event that any notice or other action or omission is required to be taken by a Party under this Agreement on a day that is not a Business Day then such notice or other action or omission shall be deemed to be required to be taken on the next occurring Business Day. + +15.17 Translations. This Agreement is in the English language only, which language shall be controlling in all respects, and all versions hereof in any other language shall be for accommodation only and shall not be binding upon the Parties. All communications and notices to be made or given pursuant to this Agreement, and any dispute proceeding related to or arising hereunder, shall be in the English language. If there is a discrepancy between any translation of this Agreement and this Agreement, this Agreement shall prevail. 80 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +15.18 Further Actions. Each Party agrees to execute, acknowledge and deliver such further instruments, and to do all such other acts, as necessary or appropriate in order to carry out the purposes and intent of this Agreement. + +15.19 Counterparts. This Agreement may be executed in two or more counterparts by original signature, facsimile or PDF files, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. + +[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 81 + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +IN WITNESS WHEREOF, the Parties intending to be bound have caused this Collaborative Research, Development and Commercialization Agreement to be executed by their duly authorized representatives as of the Effective Date. Revolution Medicines, Inc. Aventis, Inc. + +By: /s/ Mark A. Goldsmith, M.D., Ph.D. By: /s/ Douglas J. McCormack Name: Mark A. Goldsmith, M.D., Ph.D. Name: Douglas J. McCormack Title: President & Chief Executive Officer Title: Vice President + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +Aventis, Inc. c/o Sanofi 50 Binney Street Cambridge, MA 02142 + +August 24, 2018 + +Revolution Medicines, Inc. 700 Saginaw Dr. Redwood City, CA 94063 Attention: General Counsel + +Re: Amendment to Collaborative Research, Development and Commercialization Agreement + +Dear Revolution Medicines, Inc.: + +Reference is hereby made to that certain Collaborative Research, Development and Commercialization Agreement (the "Collaboration Agreement"), dated as of June 8, 2018, by and between Revolution Medicines, Inc. ("RevMed") and Aventis, Inc. ("Sanofi"). Capitalized terms used but not defined in this letter agreement (this "Letter") shall have the meanings assigned to them in the Collaboration Agreement. + +Each of RevMed and Sanofi acknowledges and agrees as follows: + +1. Amendment to Section 6.5 of the Collaboration Agreement. The first sentence of Section 6.5 of the Collaboration Agreement is hereby amended and restated in its entirety as follows: + +"Following the Effective Date, but in any case prior to the Initiation of the first Clinical Trial sponsored by Sanofi for a Product, the Parties shall enter into a pharmacovigilance agreement setting forth the worldwide pharmacovigilance procedures for the Parties with respect to the Products, such as safety data sharing, adverse events reporting and safety profile monitoring (the "Pharmacovigilance Agreement")." + +2. No Other Amendments. This Letter shall be deemed to be a part of and incorporated into the Collaboration Agreement. In the event of a conflict between this Letter and the Collaboration Agreement, this Letter shall control. Except as expressly set forth in this Letter, all of the terms and conditions of the Collaboration Agreement shall remain unchanged and are ratified and confirmed in all respects and remain in full force and effect. + +3. Entire Agreement. This Letter, together with the Collaboration Agreement and any exhibits or attachments thereto (including, without limitation, the Correspondence and the Exhibits thereto), constitutes the entire agreement between the Parties regarding the subject matter hereof, and any reference to the Collaboration Agreement shall refer to the Collaboration Agreement, as amended by this Letter. + +4. Counterparts. This Letter may be executed in one (1) or more counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument. + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +5. Governing Law. This Letter shall be governed by and construed in accordance with the laws of the State of New York without reference to any rules of conflict of laws. + +[Remainder of Page Intentionally Left Blank] + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 + + + + + +Please indicate your agreement by countersigning in the space provided below and returning a copy to my attention. + +Sincerely, + +Aventis, Inc. By: /s/ Douglas J. McCormack Name: Douglas J. McCormack Title: Vice President + +Acknowledged and Agreed: + +Revolution Medicines, Inc. By: /s/ Mark A. Goldsmith Name: Mark A. Goldsmith Title: Chief Executive Officer + +[Signature Page to Letter Agreement] + +Source: REVOLUTION MEDICINES, INC., S-1, 1/17/2020 \ No newline at end of file diff --git a/full_contract_txt/ReynoldsConsumerProductsInc_20191115_S-1_EX-10.18_11896469_EX-10.18_Supply Agreement.txt b/full_contract_txt/ReynoldsConsumerProductsInc_20191115_S-1_EX-10.18_11896469_EX-10.18_Supply Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..479d5c6017dc7c8ee246c20416ee91cbddb2196e --- /dev/null +++ b/full_contract_txt/ReynoldsConsumerProductsInc_20191115_S-1_EX-10.18_11896469_EX-10.18_Supply Agreement.txt @@ -0,0 +1,183 @@ +Exhibit 10.18 + +MASTER SUPPLY AGREEMENT + +MASTER SUPPLY AGREEMENT (the "Agreement") dated November 1, 2019 (the "Effective Date") between REYNOLDS CONSUMER PRODUCTS LLC, a Delaware limited liability company with its headquarters at 1900 West Field Court, Lake Forest, IL 60045 ("Seller"), and PACTIV LLC, a Delaware limited liability company with its headquarters at 1900 West Field Court, Lake Forest, IL 60045 ("Buyer"). Seller and Buyer are referred to individually at times as a "Party" and collectively at times as the "Parties". + +BACKGROUND + +A. Seller sells various types of products used in the consumer and food service markets. + +B. Buyer sells various types of products, including certain products of the type made by Seller, to its customers. + +C. The Parties are entering into this Agreement to establish the terms and conditions under which Seller may agree to sell specific products to Buyer, and Buyer may agree to purchase specific products from Seller for later resale by Buyer to its business customers. + +AGREEMENT + +1. Term. The "Term" of this Agreement will commence on the Effective Date and will end on the earlier of: (a) the first anniversary of the expiration date of the last Purchase Schedule (as defined in this next Section); (b) a termination date elected by a Party in a written notice delivered to the other Party any time after the expiration of the last Purchase Schedule; or (c) a termination date elected by a Party in a written notice delivered to the other Party as provided in Subsection 11(d) of this Agreement. The rights and obligations of the Parties under this Agreement will survive the expiration or earlier termination of this Agreement with respect to any (i) products purchased and sold under this Agreement during the Term and products sold after the Term for orders accepted during the Term; (ii) Confidential Information (as defined in Section 10 of this Agreement) disclosed or received by a Party during the Term; (iii) breach of this Agreement by a Party; (iv) any other statement, decision, act or omission of a Party concerning or related to this Agreement; (v) any Dispute (as defined in Section 11 of this Agreement) between the Parties concerning or related to this Agreement; (vi) products and other materials manufactured or maintained by Seller in inventory for sale to Buyer that Buyer is obligated to purchase under a Purchase Schedule; and (vii) any provision that expressly states that it will survive the expiration or earlier termination of this Agreement. + +2. Scope. This Agreement will apply to all products sold by Seller to Buyer, and all products purchased by Buyer from Seller, during the Term unless the Parties expressly agree that this Agreement will not apply to a particular type of transaction in a separate written document signed by an officer of each Party. This Agreement will not require Seller to sell any type or quantity of a product to Buyer, nor will this Agreement required Buyer to purchase any type or quantity of a product from Seller, except as expressly provided by the Parties in a Purchase Schedule. The phrase "Purchase Schedule" will mean a written supplement to this Agreement signed by an officer of each Party which references this Agreement and which identities, among other terms and conditions, the specific types and quantities of products that will be purchased and sold by the Parties on terms and conditions in the schedule, the specifications for the identified products, the duration of the commitment period during which the Parties will be obligated to purchase and sell the identified products on the terms and conditions in the schedule, the prices of the identified products, any mechanisms for adjusting the prices of the identified products over the commitment period, and the facilities at which the identified products will be manufactured, stored and delivered by Seller. The Parties may add terms and conditions to, and amend the terms and conditions of, this Agreement in a Purchase Schedule, but any additional and amended terms and conditions in a Purchase Schedule supplementing and modifying this Agreement will only apply the specific products identified in that Purchase Schedule for its duration. + +Source: REYNOLDS CONSUMER PRODUCTS INC., S-1, 11/15/2019 + + + + + +3. Standard Operating Procedures. Over approximately the past eight years, the Parties have been supplying select Products to one another for use in the operation of their respective businesses within the United States of America, Canada and Mexico. The Parties developed and been following certain standard operating procedures in connecting with, among other topics, forecasting, production planning, ordering, delivering and resolving claims on the Products supplied to one another (the "Current SOPs"). The Parties will be updating their respective business systems over the next six months, and the updates to these business systems will require the Parties to modify the Current SOPs. Once the Parties have completed the updates to the business systems and agreed on the necessary modifications to the Current SOPs, the Parties will sign a written amendment to this Agreement appending the updated standard operating procedures (the "Updated SOPs"). Until the Parties have signed a written amendment appending the Updated SOPs, the parties will continue to follow the Current SOPs. The Parties will comply with the applicable SOPs in connection with the purchase and sale of products identified in a Purchase Schedule. The Parties may add terms and conditions to, and amend the terms and conditions of, the SOP in a Purchase Schedule, but any additional and amended terms and conditions in a Purchase Schedule supplementing and modifying the SOP will only apply the specific products identified in that Purchase Schedule for its duration. + +4. Order and Priority of Interpretation. In the event of any conflict, inconsistency or ambiguity between two or more provisions in this Agreement, including the provisions in its Exhibits and Purchase Schedules, the provisions in the documents will govern, supersede and control over one another in the following order of priority: (1st) a Purchase Schedule with regards to the purchase and sale of the specific products identified in that Purchase Schedule for its duration; (2nd) the SOP; (3rd) any Exhibit to this Agreement but only with regards to specific subject matter of the Exhibit; and (4t h) the main body of this Agreement prior to the signature page. + +5. General Representations, Warranties and Covenants. A Party represents, warrant and covenants on the Effective Date and at all times during the Term that: a. The Party is formed, registered, licensed and operating its business in compliance with the laws of the United States of America, its states and territories, and any districts, municipalities and other political subdivisions of the foregoing ("Applicable Laws"). b. The Party is operating its business in compliance with a commercially reasonable code of ethics adopted by such Party. c. The Party may enter into and perform its obligations under this Agreement without being in conflict with, or in breach of, any other agreement of the Party. d. The Party is solvent, is capable of paying its debts as and when they become due and is paying its debts as and when due. e. The Party is not the subject of a criminal investigation nor a defendant in any criminal indictment, petition, complaint or proceeding that carries a potential sentence involving incarceration in excess of one year for any director or executive officer of the Party involved in the alleged criminal misconduct or a fine in excess of $100,000 USD. + +A Party will promptly notify the other Party of any change in circumstance during the Term in which the Party is no longer in compliance with the foregoing general representations, warranties and covenants. An incident of actual, alleged or suspected non-compliance by a Party with a warranty under this Section being investigated, contested or corrected in good faith by the Party and which, regardless of outcome, will have no material adverse effect on the Party or its performance under this Agreement or on the other Party, will not be considered a breach of this clause. An incident of actual, alleged or suspected non-compliance by a Party of this Section or any other Section of this Agreement will be grounds for the other Party to demand adequate assurances of performance as provided by Section 2-609 of the Illinois Uniform Commercial Code. A Party will have ten (10) days to provide adequate assurances of performance to the other Party in a form acceptable to the other Party in its good faith discretion. + +Source: REYNOLDS CONSUMER PRODUCTS INC., S-1, 11/15/2019 + + + + + +6. Specific Product Warranties. Seller represents and warrants to Buyer that each product sold under this Agreement will at the time of delivery to Buyer: a. Be in new, undamaged and unadulterated condition free of any defects in design, materials and manufacture. Seller is not making any representation or warranty under this clause with regards to the design of a product to the extent the design constitutes, incorporates or otherwise embodies intellectual property that Buyer has represented and warranted to Seller is owned by Buyer and which Buyer has licensed to Seller to manufacture the product for Buyer. b. Have been manufactured and stored by Seller at a plant (and, if applicable under a Purchase Schedule, a warehouse) of Seller approved in the applicable Purchase Schedule prior to its delivery to Buyer. c. Has been manufactured, packaged, labelled, sold and delivered by Seller, and may be sold by Buyer in interstate commerce, in compliance with Applicable Laws, including without limitation with food safety regulations issued by the United States Food and Drug Administration that are applicable to the product. Seller will not be in breach of this warranty because an Applicable Law prohibits, restricts or imposes a charge on a product in a district, municipality or other political subdivision of the United States of America or its states or territories. d. Comply with the written specifications for the product identified in the applicable Purchase Schedule. e. Be fit for the purpose of packaging, selling or use in consuming food subject to qualifications and instructions on the use of the product in the written specifications for the product identified in the applicable Purchase Schedule. f. Be conveyed by Seller to Buyer with good and marketable title free and clear of all liens, encumbrances and claims arising by, through or under Seller. g. Not infringe on any patent, trademark, copyright, trade secret or other the intellectual property of any third-party registered or otherwise recognized and enforceable under Applicable Law. Seller is not making any representation or warranty under this clause with regards to the design of a product to the extent the design constitutes, incorporates or otherwise embodies intellectual property that Buyer has represented and warranted to Seller is owned by Buyer and which Buyer has licensed to Seller to manufacture the product for Buyer. h. Comply with any additional representations and warranties of Seller regarding the product in the applicable Purchase Schedule. + +If a Buyer receives a product that fails to conform to these representations and warranties, the sole remedies of Buyer for the breach of warranty will be to: (1) reject and return the non-conforming product to Seller for a refund or credit, or a replacement conforming product, in the manner and time period provided in the SOP; (2) obtain reimbursement from Seller for actual, reasonable, substantiated out-of-pocket expenses incurred by Buyer in the recovery, return or disposal of a non-conforming product that is the subject of a mandatory product recall required under Applicable Laws or a voluntary withdrawal declared by Seller or approved by Seller (such approval not to be unreasonably withheld, conditioned or delayed); and (3) obtain indemnification from Seller for any Indemnified Claim arising from or related to the non-conforming product as provided in Section 7. + +Source: REYNOLDS CONSUMER PRODUCTS INC., S-1, 11/15/2019 + + + + + +7. Indemnification. a. A claim that a Party (referred to at times in this Section as an "Indemnifying Party") is required to defend and indemnify the other Party (referred to at times in this Section as an "Indemnified Party") under this Agreement is referred to at times in this Section as an "Indemnified Claim". Defense and indemnification under this Section will include, without limitation, (1) paying or reimbursing the actual, reasonable, substantiated out-of-pocket expenses incurred in connection with the investigation, defense and settlement of any civil, criminal or administrative action, suit, arbitration, mediation, hearing, audit, investigation or other proceeding threatened or commenced against an Indemnified Party on an Indemnified Claim (e.g., fees and expenses of attorneys, accountants, auditors, investigators, consulting experts, testifying experts and other consultants; fees and expenses of an arbitrator or mediator; filing fees and costs imposed by any court, administrative agency or other tribunal; etc.), and (2) satisfying any judgment, award, order, lien, levy, fine, penalty or other sanction imposed against an Indemnified Party on an Indemnified Claim. b. Seller will defend and indemnify Buyer against: (1) any third-party claim for personal injury, damage to tangible property or other loss to the extent caused by any actual or alleged breach of this Agreement by Seller, including, without limitation, any product supplied by Seller which fails to conform to the representations and warranties in this Agreement; (2) any third-party claim for personal injury, damage to tangible property or other loss to the extent caused by any actual or alleged negligence or other legally culpable misconduct of Seller in the design, manufacture, storage, sale or delivery of any product sold by Seller under this Agreement or in the performance of other obligation of Seller under this Agreement; (3) any third-party claim for actual or alleged infringement of a product sold by Seller under this Agreement or its design, manufacture, storage, packaging, sale or delivery by Seller under this Agreement or in the performance of any other obligation of Seller under this Agreement (except to the extent that the infringement is based on intellectual property that that Buyer has represented and warranted to Seller that Buyer owns and that Buyer has licensed to Seller and that Seller has used in compliance with the license terms in supplying the product); (4) the threat or imposition of any fine, penalty or other sanction by a governmental authority on Buyer to the extent caused by any actual or alleged violation by Seller of Applicable Law; or (5) any other matter that Seller has agreed to defend and indemnify Buyer against under a Purchase Schedule. c. Buyer will defend and indemnify Seller against: (1) any third-party claim for personal injury, damage to tangible property or other loss to the extent caused by any actual or alleged breach of this Agreement by Buyer; (2) any third-party claim for personal injury, damage to tangible property or other loss to the extent caused by any actual or alleged negligence or other legally culpable misconduct of Buyer in the purchase, storage, repackaging, resale or delivery of any product purchased from Seller under this Agreement or in the performance of other obligation of Buyer under this Agreement; (3) any third-party claim for actual or alleged infringement of a product sold by Seller under this Agreement or its design, manufacture, storage, sale or delivery by Seller under this Agreement or in the performance of any other obligation of Seller under this Agreement to the extent based on intellectual property that that Buyer has represented and warranted to Seller that Buyer owns and that Buyer has licensed to Seller and that Seller has used in compliance with the license term in supplying the product; (4) the threat or imposition of any fine, penalty or other sanction by governmental authority on Seller to the extent caused by any actual or alleged violation by Buyer of Applicable Law; or (5) any other matter that Buyer has agreed to defend and indemnify Seller against under a Purchase Schedule. d. As a condition of receiving defense and indemnification under this Section for an Indemnified Claim, the Indemnified Party must: (1) notify and tender the defense of an Indemnified Claim to the Indemnifying Party promptly after the Indemnified Party learns of the Indemnified Claim; and + +Source: REYNOLDS CONSUMER PRODUCTS INC., S-1, 11/15/2019 + + + + + +(2) provide information and cooperation reasonably requested by the Indemnifying Party in the investigation, defense, settlement and satisfaction of the Indemnified Claim. An Indemnifying Party will reimburse the Indemnified Party of any reasonable, actual, substantiated out-of-pocket expense incurred in providing the requested information or cooperation. e. If the Indemnifying Party accepts the tender of defense of an Indemnified Claim, with or without reservation, the Indemnifying Party will: (1) promptly notify the Indemnified Party of the acceptance of the tender of defense of the Indemnified Claim. (2) control the investigation, defense, settlement and satisfaction of the Indemnified Claim, including, without limitation, the selection of licensed, qualified and reputable attorneys and expert witnesses and all decisions over settlement and litigation strategy. The Indemnifying Party must act in good faith in exercising control over the investigation, defense, settlement and satisfaction of the Indemnified Claim. (3) Provide information reasonably requested by the Indemnified Party regarding the investigation, defense, settlement and satisfaction of the Indemnified Claim f. An Indemnifying Party, acting in good faith, may settle an Indemnified Claim for which it is responsible under this Agreement involving infringement on the intellectual property of a third-party by: (1) obtaining a license from the third-party allowing the required use of its intellectual property; (2) modifying a product, equipment or process in a manner which avoids infringing on the intellectual property of the third-party; or (3) voluntarily withdrawing the infringing product from the market and either refunding the amount paid by the Indemnified Party for the infringing product or replacing the infringing product with a non-infringing product. g. The Parties may disagree on whether a claim is an Indemnified Claim under this Agreement, which Party should be considered the Indemnifying Party and Indemnified Party for an Indemnified Claim or whether each Party is partially liable for an Indemnified Claim and how liability for such an Indemnified Claim should be allocated between them. In these and other circumstances in which an actual or potential conflict of interest exists or arises between the Parties with regards to an alleged or agreed upon Indemnified Claim that would preclude their joint representation by a single defense counsel, the Parties will endeavor in good faith to attempt to resolve the conflict. If the Parties are able to resolve the actual or potential conflict of interest, the Parties will memorialize the agreed upon resolution in a written joint defense agreement signed by officers of each Party and their joint defense counsel. If the Parties are unable to resolve the actual or potential conflict of interest, each Party may independently and separately investigate, defend, settle and satisfy the claim subject to their right to pursue payment or reimbursement for costs incurred in doing so from the other Party as provided in this Agreement. + +8. Insurance. During the Term of this Agreement, each Party will maintain the following minimum types and amounts of insurance coverage during the Term of this Agreement: a. Commercial General Liability Insurance. Occurrence based coverage with a combined single limit of at least $10,000,000 per occurrence and in the aggregate for premises and operations; products and completed operations; contractual liability coverage for indemnities of a Party contained within this Agreement; broad form property damage (including completed operations); explosion, collapse and underground hazards; and personal injury. Requires additional insured endorsement and waiver of subrogation endorsement. + +Source: REYNOLDS CONSUMER PRODUCTS INC., S-1, 11/15/2019 + + + + + +b. Automobile Liability Insurance. Occurrence based coverage with a combined single limit of at least $10,000,000 per occurrence and in the aggregate for owned, non-owned, and hired automotive equipment of the Party. Requires additional insured endorsement and waiver of subrogation endorsement. c. Workers' Compensation Liability Insurance. Occurrence based coverage providing benefits in the minimal amount required by Applicable Law for workplace and work related injuries and illnesses to the employees of a Party, including, without limitation, Workers Compensation Acts of applicable U.S. States, the U.S. Longshoremen's and Harbor Workers Compensation Act and the U.S. Jones Act. Requires alternate employer endorsement and waiver of subrogation endorsement. d. Employers' Liability Insurance. Occurrence based coverage with a limit of at least $10,000,000 per occurrence or any greater limits set by Applicable Law workplace and work related injuries and illnesses to the employees of a Party. Requires waiver of alternate employer endorsement. e. Property Insurance. Coverage providing "all risk" property insurance at the replacement value of the machinery, equipment, fixtures, tools, materials and other property of the Party. "All risk" coverage will include, by way of example and not limitation, loss or damage resulting from earthquakes, floods, wind, fire or other natural or weather-related phenomenon. Requires waiver of subrogation endorsement. + +All insurers of a Party on such policies must have at all times an A.M. Best financial rating of at least "A-Minus VII". An insuring Party may satisfy the required minimum amounts of insurance through a primary policy and one or more excess policies. All insurance of an insuring Party must be "primary and non-contributory" with respect to any insurance that the other Party may maintain, but only with respect to the negligence or other legal liability of the insuring Party. + +An insuring Party must deliver the following written evidence of the required insurance coverage to the other Party (Attention: Risk Management), or its designated insurance monitoring service, within ten (10) of written request and at least thirty (30) days in advance of the expiration of a then current policy term (if a declaration or endorsement is not available from an insurer at the time requested or required, an insuring Party will provide them as soon as the declaration or endorsement is available from the insurer): i. Certificate of insurance confirming that the required insurance coverage and minimal limits are met for the extended, renewed or replacement policy term. ii. Declaration pages of insurance policy (or a copy of the binder until the declaration pages are available) confirming that the required insurance coverage and minimal limits are met for the extended, renewed or replacement policy term. iii. Copies of additional insured endorsements required for applicable policies in the name and for the benefit of: "[NAME OF OTHER PARTY], its parent, subsidiaries and affiliates; any lessors of the foregoing and any mortgagees, deed of trust beneficiaries and secured creditors of such lessors; and any successors and assignees of all of the foregoing." iv. Copies of alternate employer endorsements and waiver of subrogation endorsements required for applicable policies in the name and for the benefit of: ""[NAME OF OTHER PARTY], its parent, subsidiaries and affiliates; any lessors of the foregoing and any mortgagees, deed of trust beneficiaries and secured creditors of such lessors; and any successors and assignees of all of the foregoing." + +Source: REYNOLDS CONSUMER PRODUCTS INC., S-1, 11/15/2019 + + + + + +A Party may maintain any level of deductible on required insurance coverage allowed by Applicable Law. A Party may also self-insure any of the required insurance coverage, in whole or in part, if allowed by Applicable Law during any period that the Party maintains a tangible net worth in excess of $100 million USD and maintains a professionally managed and adequately reserved for and funded self-insurance program. + +9. Limitations on Liability. a. Disclaimer of Representations and Warranties. Each Party: (1) disclaims all representations and warranties regarding its products, performance, supplied information or business, whether oral or written, express or implied, arising by operation of law or otherwise, including, without limitation, the implied warranty of merchantability and the implied warranty of fitness for a particular purpose, other than those express representations and warranties of the Party in this Agreement; (2) acknowledges that the Party has not relied on, and will not rely on, any representations and warranties of the other Party regarding its products, performance, supplied information or business, whether oral or written, express or implied, arising by operation of law or otherwise, other than those express representations and warranties of the other Party in this Agreement; and (3) waives any claim that the Party may have based, in whole or in part, on any representations and warranties of the other Party regarding its products, performance, supplied information or business, whether oral or written, express or implied, arising by operation of law or otherwise, other than those express representations and warranties of the other Party in this Agreement. Notwithstanding the foregoing, Buyer is entitled to rely on (i) the descriptive information in transaction documents issued by either Party in the ordinary course of business during the Term identifying the ordered Products (e.g., the type and quantity of ordered products and scheduled date and location for delivery) and (ii) FDA guaranty letters and other similar written assurances in Seller's standard forms certifying that a product complies with Applicable Laws issued by Seller to Buyers and other U.S. customers in the ordinance course of business during the Term. b. Exclusion of Indirect Damages; Waiver of Claim for Insured Damage or Loss. A Party that breaches this Agreement will only be liable to the other Party for direct damages arising from the breach. Each Party waives any right to recover consequential, incidental, indirect, exemplary, punitive or any other types of indirect damages from the other Party for a breach of this Agreement. Notwithstanding the preceding sentences, this Subsection will not limit the liability of a Party for any amount or type of damages for: (1) the defense and indemnification of an Indemnified Claim on which the Party is the Indemnifying Party; (2) infringement by the Party on the intellectual property of the other Party; (3) the unauthorized disclosure or use by the Party of the Confidential Information of the other Party; (4) payment or reimbursement of any amount expressly required to be paid or reimbursed by the Party under a provision of this Agreement; or (5) the intentional misconduct of the Party in violation of Applicable Laws. c. Force Majeure. A Party will not be considered in breach of this Agreement or liable to the other Party for any interruption or delay in performance under this Agreement to the extent caused by an event outside of the ability of the performing Party to foresee and avoid with the exercise of commercially reasonable efforts (such an event is referred to at times as an event of "Force Majeure"). Examples of events of Force Majeure include, without limitation: natural disasters; war; acts of terrorism; government action; accident; strikes, slowdowns and other labor disputes; shortages in or inability to obtain material, equipment, transportation or labor; any breach, negligence, criminal misconduct or other act or omission of any third-party; fire or other insured or uninsured casualty. A Party whose performance is interrupted or delayed by an event of Force Majeure will be excused from the interruption or delay in performance during the event of Force Majeure and for a commercially reasonable period of additional time after the event of Force Majeure that the Party needs to recover from the event of Force Majeure and restore performance. Notwithstanding the foregoing, a Party will only be excused for an interruption or delay in performance under this Subsection for an event of Force Majeure only if the Party (1) promptly notifies the other Party of the event of Force Majeure and provides information reasonably requested by the other Party regarding the event of Force Majeure, the efforts undertaken by the + +Source: REYNOLDS CONSUMER PRODUCTS INC., S-1, 11/15/2019 + + + + + +Party to foresee and avoid interruption or delay in its performance before the occurrence of the event, to mitigate interruption or delay in performance during the event, and to recover from and restore performance following the event; and (2) the Party exercises commercially reasonable efforts to mitigate, recover from and restore performance following the event of Force Majeure. During, and while recovering from and restoring performance following, an event of Force Majeure, Seller will act in good faith in allocating its available manufacturing capacity to supply products to Buyer under this Agreement and any products to other customers of Seller. If an event of Force Majeure interrupts or delays Seller from supplying a product to Buyer under this Agreement in the quantities and timetable required by Buyer, Buyer may cancel any unfilled orders for the product with Seller and procure the required quantities of the product from one or more other sources until Seller has recovered from and restored its ability to perform following the event of Force Majeure. If the interruption or delay in the supply of a product to Buyer under this Agreement caused by an event of Force Majeure has exceeded, or is reasonably likely to exceed, thirty (30) days, Buyer may enter into longer term supply agreements or make other arrangements to procure the required quantities of the product from one or more other sources for a duration and on terms acceptable to Buyer in its good faith discretion. In such a circumstance, Buyer will not have to resume purchasing the product from Seller under this Agreement until Seller has recovered from and restored its ability to perform following the event of Force Majeure and the longer term agreements or other arrangements have expired or Buyer is able to end them without liability. This Subsection will not excuse nor extend a deadline by which a Party must pay an amount owed under this Agreement or Applicable Law or by which a Party must exercise any right or remedy under this Agreement or Applicable Law. + +10. Confidential Information and Other Intellectual Property. a. The Parties anticipate exchanging Confidential Information (as defined in in the next Subsection) over the Term of this Agreement for the purpose of negotiating and entering into Purchase Schedules and amendments to this Agreement, transacting business with one in accordance with this Agreement and exercising their rights and performing their obligations under this Agreement (collectively referred to as the "Authorized Purpose"). b. The phrase "Confidential Information" means information meeting all of the following criteria: 1) The information is a trade secret or other non-public, proprietary information owned by a Party or its direct and indirect subsidiaries under Applicable Law (this Party is referred to at times in this Section as the "Disclosing Party"); and 2) The other Party (referred to at times in this Section as the "Receiving Party") requests such information from the Disclosing Party for the Authorized Purpose during the Term (i.e., neither Party wants unsolicited Confidential Information from the other Party); and 3) The Disclosing Party discloses such requested information to the Receiving Party during the Term either labelled as "Confidential" or words of similar intent, or describes the disclosed information in reasonable detail in a written notice to the Receiving Party delivered, either at the time of disclosure or within five (5) days of disclosure. If a Disclosing Party neglects to label or deliver timely written notice to the Receiving Party identifying the disclosed information as confidential in nature, the disclosed information will only be treated as Confidential Information under this Agreement if the Disclosing Party is able to demonstrate by clear and convincing evidence that the Receiving Party knew that the disclosed information was a trade secret or other non-public, proprietary information of the Disclosing Party at the time of disclosure. + +Source: REYNOLDS CONSUMER PRODUCTS INC., S-1, 11/15/2019 + + + + + +The criteria in Clause (2) and Clause (3) will not apply to Confidential Information of a Disclosing Party observed or heard by a Receiving Party in a plant, warehouse, facility or system of the Disclosing Party. The existence and terms of this Agreement, and the existence, nature and extent of the business relationship between the Parties, will be considered the Confidential Information of each Party. c. The phrase "Confidential Information" also means the Know-How of a Disclosing Party and its direct and indirect subsidiaries that a Receiving Party and its direct and indirect subsidiaries learned of, acquired or otherwise used prior to the Effective Date. The phrase "Know-How" means trade secret and other confidential, proprietary information of a Party or its Affiliate concerning the manufacture, storage, packaging, marketing, sale and delivery of its products. Examples of Know-How may be in the form of drawings, equipment specifications, formulae, formulations, guidelines, manuals, methods, plans, policies, procedures, processes, properties and applications of raw materials and products, tools, dies and molds. A Receiving Party and its direct and indirect subsidiaries may continue to use the Know- How of the Disclosing Party and its direct and indirect subsidiaries in the possession of the Receiving Party and its direct and indirect subsidiaries as of the Effective Date for the Authorized Purpose and in connection with the operation of the business of the Receiving Party and its direct and indirect subsidiaries. Nothing in this Subsection or any other provisions of this Agreement will obligate a Party to disclose or license the use of its Know-How of any kind and in any form arising, discovered, acquired or developed after the Effective Date to the other Party. d. The phrase "Confidential Information" does not include, and there will not be any duties of confidentiality or other restrictions under this Agreement for, the following types of information: (1) Information which is or becomes available as part of the public domain through any means other than as a result of a breach of this Agreement by the Receiving Party; or (2) Information, other than Know-How received prior the Effective Date, which is known to the Receiving Party before the disclosure of the same information by the Disclosing Party; or (3) Information which is or becomes available to the Receiving Party from a third-party who is not under any duty to preserve the confidentiality of such information; or (4) Information which is furnished by the Disclosing Party to a third-party without imposing any duty on the third-party to preserve the confidentiality of such information; or (5) Information which is independently developed by the Receiving Party without the use of or reliance on any trade secret or other non-public, proprietary information provided by the Disclosing Party as Confidential Information under this Agreement or under any prior agreement between the Parties; or (6) Information that ceases to be a trade secret or other non-public, proprietary information of the Disclosing Party under applicable law through any means other than those enumerated above that does not involve nor result from a breach of this Agreement by the Receiving Party. e. A Party may request and disclose Confidential Information in any form or medium. Confidential Information may include, without limitation, information concerning the assets, liabilities, financing, financial statements, ownership, goods, services, customers, suppliers, marketing, manufacturing, equipment, software, technology, supply chain, business strategies, plans, models, policies, methods, processes, formulae, specifications, drawings, schematics, software and technical know-how of a Disclosing Party. A Receiving Party will take all commercially reasonable actions required to safeguard the Confidential Information of a Disclosing Party in the possession of such Receiving Party against the unauthorized disclosure or use of the Confidential Information by other persons. A Receiving Party will promptly notify the Disclosing Party if the Receiving Party learns of any unauthorized disclosure or use of the Confidential Information of the Disclosing Party by any + +Source: REYNOLDS CONSUMER PRODUCTS INC., S-1, 11/15/2019 + + + + + +person. A Receiving Party will cooperate in good faith with the Disclosing Party to prevent any unauthorized disclosure or use of the Confidential Information of the Disclosing Party by any person. f. A Receiving Party will not disclose nor use the Confidential Information of a Disclosing Party except as follows: (1) A Receiving Party may disclose Confidential Information of a Disclosing Party on a "need to know" basis to the Representatives of the Receiving Party who require such information for the Authorized Purpose and in order for the Receiving Party and its Affiliates to comply with Applicable Laws, accounting standards and securities exchange requirements. Before making such a disclosure, the Receiving Party will advise the Representatives of the confidential nature of the information being shared and ensure that duties and restrictions are, or have been, imposed on the Representatives receiving the Confidential Information similar to those imposed on the Receiving Party under this Agreement. A Receiving Party will be liable for any breach of this Agreement by its Representatives. An "Affiliate" of a Party means a legal entity that owns and controls, or is owned and controlled by, or is under common ownership and control with, a Party (other than the other Party or any of its direct and indirect subsidiaries), with ownership and control of a legal entity being determined by the ownership of the majority voting interest in the legal entity. A "Representative" means the Affiliates of a Party and the directors, officers, managers, employees, accountants, attorneys, auditors and other agents and consultants of a Party and its Affiliates. (2) A Receiving Party may disclose Confidential Information of a Disclosing Party to a court, governmental entity or any other person in order for the Receiving Party and its Affiliates to comply with Applicable Laws, accounting standards and securities exchange requirements. If legally permissible and reasonably possible, a Receiving Party will notify the Disclosing Party prior to disclosing its Confidential Information pursuant to this Section and cooperate in good faith with any lawful efforts by the Disclosing Party to avoid or limit the disclosure of its Confidential Information. A Receiving Party will not be obligated to incur any liability, expense or risk in extending such cooperation to a Disclosing Party. Based on legal advice of its attorney, a Receiving Party may disclose the Confidential Information of the Disclosing Party by any deadline established under an Applicable Law, accounting standard and securities exchange requirement. (3) A Receiving Party may disclose and use the Confidential Information of a Disclosing Party to enforce or interpret this Agreement or any other agreement with the Disclosing Party in any arbitration, court or other legal proceeding. A Receiving Party may disclose and use this Confidential Information of a Disclosing Party to defend the Receiving Party or its Affiliates or their respective Representatives in any arbitration, court or other legal proceeding. In either circumstance, the Receiving Party will ensure that a protective order, agreement or other mechanism is in place to preserve the confidentiality of the Confidential Information. (4) A Receiving Party and its Representatives may disclose and use the Confidential Information for any other purpose consented to by a Disclosing Party in a written notice signed by an officer of the Disclosing Party delivered to the Receiving Party. g. In disclosing its Confidential Information to a Receiving Party, a Disclosing Party represents, warrants and covenants to the Receiving Party that: (1) The Disclosing Party owns and has the right to disclose and authorize the use of Confidential Information as provided in this Agreement. + +Source: REYNOLDS CONSUMER PRODUCTS INC., S-1, 11/15/2019 + + + + + +(2) The Receiving Party and its Representatives may use the Confidential Information of the Disclosing Party for the Authorized Purpose and other limited purposes provided in this Agreement. (3) The Disclosing Party will indemnify, defend and hold harmless the Receiving Party and its Representatives against any claim of a third-party that the disclosure and use of the Confidential Information of the Disclosing Party as provided in this Agreement infringes on a patent, trademark, copyright, trade secret or other intellectual property of the third-party registered in or otherwise recognized and enforceable under Applicable Laws. + +Except for the limited representations and warranties in this Section, a Disclosing Party disclaims all other representations and warranties of any kind related to its Confidential Information, whether express, implied or arising by operation of law, including the disclaimer, without limitation, of any representation and warranties concerning merchantability, fitness for a particular purpose, truth, accuracy or completeness. h. The rights and obligations of the Parties under this Section with regards to disclosed Confidential Information will continue: (1) Until the earlier of (i) sixty (60) months from the date of disclosure to a Receiving Party or (ii) the date such information ceases to be considered Confidential Information under this Agreement, for Confidential Information that is not a trade secret of a Disclosing Party under Applicable Law; and (2) Until Confidential Information that is a trade secret of a Disclosing Party under Applicable Law ceases to be a trade secret of the Disclosing Party under Applicable Law. i. A Receiving Party will return or destroy all forms of Confidential Information of the Disclosing Party in the custody of the Receiving Party and its Representatives within ten (10) days of receipt of a written request from the Disclosing Party and after the expiration or earlier termination of this Agreement. This will include, without limitation, all copies, records, documents and other information representing, comprising, containing, referencing or created based on Confidential Information of the Disclosing Party. Notwithstanding the foregoing, a Receiving Party and its Representatives may retain copies of Confidential Information of the Disclosing Party which (x) the Receiving Party and its Representatives are required to retain to comply with Applicable Laws, accounting standards and security exchange requirements (but only for the duration and in the manner so required for this limited purpose); or (y) have been archived in electronic form by the Receiving Party and its Representatives and which would be unduly burdensome for the Receiving Party and its Representatives to have to search for and delete the Confidential Information of the Disclosing Party. j. Except for the limited right to disclose and use Confidential Information of a Disclosing Party for the Authorized Purpose and other purposes provided in the this Section and except for any license of intellectual property granted by a Disclosing Party to the Receiving Party in a Purchase Schedule, this Agreement does not grant a Receiving Party or its Representatives any right, title, interest or ownership in the Confidential Information of the Disclosing Party nor in any patent, trademark, copyright or other intellectual property of the Disclosing Party. As between the Parties during the Term, to be effective, the grant of any right, title, interest and ownership in and to any Confidential Information of Party or in an patents, trademarks, copyrights and other intellectual property of the Party must be in writing and signed by the chief executive officers of the Parties. During the Term, a Party will not develop intellectual property for, on behalf of, or in collaboration with, the other Party unless the Parties have entered into a Purchase Schedule or other separate written agreement signed by an officer of each Party. + +Source: REYNOLDS CONSUMER PRODUCTS INC., S-1, 11/15/2019 + + + + + +11. Dispute Resolution. a. Negotiation. If a Party believes that the other Party has breached this Agreement or if there is a dispute between the Parties over the interpretation of this Agreement (a "Dispute"), the Parties will endeavor to resolve the Dispute through good faith negotiation for a period of thirty (30) days after a Party notifies the other Party of the Dispute and before either Party requests mediation or files litigation to resolve the Dispute. b. Mediation. If the Parties have been unable to resolve a Dispute through good faith negotiation as provided in the prior Subsection, a Party may request that the Parties attempt to resolve the Dispute through mediation by notifying the other Party with a copy to JAMS. The Parties will attempt to select a mutually acceptable JAMS mediator within ten (10) days of the notice requesting mediation. The mediation will be held in Lake County or Cook County, Illinois within thirty (30) days of the notice requesting mediation before a JAMS mediator and in compliance with JAMS mediation guidelines. Each party will bear its own costs in preparing for and participating in the mediation and one-half of the fees and expenses charged by JAMS for conducting the mediation. c. Litigation. If the Parties have been unable to resolve a Dispute through mediation as provided in the prior Subsection, a Party may file litigation against the other Party in a court of competent jurisdiction in the United States of America. With respect to litigation involving only the Parties or their Affiliates, the Parties irrevocably consent to the exclusive personal jurisdiction and venue of the U.S. federal and Illinois state courts of competent subject matter jurisdiction located in Lake County, Illinois or Cook County, Illinois and their respective higher courts of appeal for the limited purpose of resolving a Dispute, and the Parties waive, to the fullest extent permitted by law, any defense of inconvenient forum. The Parties waive any right to trial by jury as to any Disputes resolved through litigation. Notwithstanding the foregoing, a Party may file litigation to resolve a Dispute without undergoing either negotiation or mediation as provided in the prior Subsections for any Dispute involving: (i) infringement on intellectual property; (ii) the unauthorized use or disclosure of Confidential Information; or (iii) a request for a temporary restraining order, a preliminary or permanent injunction or any other type of equitable relief. d. Remedies. Except as expressly limited in the preceding Subsections and the other provisions in this Agreement, a Party may immediately exercise any rights and remedies available to the Party under Applicable Law upon a breach of this Agreement by the other Party. A Party will not suspend performance under or terminate this Agreement or any accepted purchase order for a product being purchased and sold under this Agreement unless: (1) the other Party is in material breach of this Agreement and has either refused to cure the material breach or has failed to cure the material breach within thirty (30) day of its receipt of written notice of the failure; and (2) the Parties have been unable to resolve the Dispute related to the material breach through negotiation or mediation, or the breaching Party has refused or failed to attempt to resolve the Dispute through negotiation or mediation, as provided in this Section. Notwithstanding the foregoing, a Party may suspend performance or terminate this Agreement or any accepted purchase order for a product being purchase and sold under this Agreement immediately on written notice to the other Party, and without providing the other Party an opportunity to cure the material breach or attempting to resolve a Dispute over the material breach by negotiation or mediation as provided in this Section, for a material breach by the other Party involving substantial harm to the reputation, goodwill and business of the non-breaching Party that cannot reasonably be avoided or fully redressed by providing the other Party an opportunity to cure the material breach. e. Late Fees and Collection Costs. If Buyer fails to pay Seller an amount owed under this Agreement by the invoice due date, then Buyer will owe Seller: (i) the delinquent amount; and (ii) a late payment fee equal to two percent (2%) of the delinquent amount for each full or partial calendar month past the invoice due date that the delinquent amount remains unpaid. In addition, if Seller has to file + +Source: REYNOLDS CONSUMER PRODUCTS INC., S-1, 11/15/2019 + + + + + +litigation to collect the amount owed and Seller prevails in the litigation, Buyer will reimburse Seller for actual, reasonable, substantiated out-of-pocket expenses incurred by Seller in collecting the delinquent amount and accrued late payment fees on the delinquent amount. Under no circumstance will the late payment fee payable to Seller exceed the amount that a creditor may lawfully impose on a debtor on a delinquent amount under Applicable Law. + +12. Miscellaneous. a. Entire Agreement. This Agreement, including its appended Exhibits and Purchase Schedules entered into during the Term, constitutes the entire agreement between the Parties with respect to the sale of products by Seller to Buyer and the purchase of products by Buyer from Seller. This Agreement supersedes all prior and simultaneous representations, discussions, negotiations, letters, proposals, agreements and understandings, whether written or oral, with respect to this subject matter. This Agreement will not be binding on either Party unless and until signed by the chief executive officers of each Party. No handwritten or other addition, deletion or other modification to the printed portions of this Agreement will be binding upon either Party to this Agreement. b. Amendments. A Party may not amend nor supplement the terms and conditions in this Agreement through the inclusion of additional or different terms and conditions in any quotation, purchase order, invoice, bill of lading, letter, email or other document or communication. This Section does not prevent the reliance on the descriptive information in transaction documents identifying the ordered Products (e.g., the type and quantity of ordered products and scheduled date and location for delivery). No amendment of this Agreement will be valid or effective unless made in writing and signed and exchanged by the chief executive officers of the Parties. A Party may approve or reject a request for an amendment in its sole and absolute discretion. c. Waiver. The failure of either party to insist in any one or more instances upon strict performance of any of the provisions of this Agreement or to take advantage of any of its rights shall not operate as a continuing waiver of such rights. No right or obligation under this Agreement will be considered to have been waived by a Party unless such waiver is in writing and is signed by an officer of the waiving Party and delivered to the other Party. No consent to or waiver of a breach by either Party will constitute a consent to, waiver of, or excuse for any other, different, or subsequent breach by such Party. d. Governing Law. This Agreement and all claims or causes of action arising out of or related to this Agreement shall be governed in all respects, including as to validity, interpretation and effect, by the laws of the State of Illinois and the United States of America, without giving effect to its principles or rules of conflict of laws. The United Nations Convention on Contracts for the International Sale of Goods will not govern or otherwise be applicable to this Agreement. e. Severability. If any term of provision of this Agreement, or the application thereof shall be found invalid, void or unenforceable by any government or governmental organization having jurisdiction over the subject matter, the remaining provisions, and any application thereof, shall nevertheless continue in full force and effect. f. Assignment. This Agreement, its rights and obligations, is not assignable or transferable by either Party, in whole or in part, except with the prior written consent of the other Party, which consent will not be unreasonably withheld, conditioned or delayed. Notwithstanding the foregoing, either Party may transfer and assign this Agreement to any of its affiliates or in connection with any merger, consolidation or sale of assets without the other Party's prior consent provided (a) that any such assignment will not result in the assigning Party being released or discharged from any liability under this Agreement, and (b) the purchaser/assignee will expressly assume all obligations of the assigning Party under this Agreement. The assigning Party will provide the other Party with written + +Source: REYNOLDS CONSUMER PRODUCTS INC., S-1, 11/15/2019 + + + + + +notice of such assignment prior to or promptly following the effective date of such assignment. A change of control shall be deemed an assignment requiring consent hereunder provided that any transfer or assignment that results in Seller's and Buyer's current common parent, Reynolds Group Holdings Limited, ceasing to control either party shall not require consent of the other party. The restrictions in this Section will not preclude a Party for authorizing an Affiliate to purchase or sell a product on behalf of a Party under this Agreement. Subject to the foregoing, all of the terms, conditions and provisions of this Agreement shall be binding upon and shall inure to the benefit of the successors and assignees of the respective Parties. g. Third Party Beneficiaries. Except as otherwise provided in a Purchase Schedule, there are no intended third-party beneficiaries of this Agreement. h. Good Faith and Cooperation. Except where this Agreement states that a Party may expressly exercise a right or render a decision in its "sole and absolute discretion", a Party will exercise its rights under this Agreement in its good faith business judgment. A Party will perform its obligations under this Agreement in a commercially reasonable manner consistent with industry practices and in compliance with Applicable Law. A Party will promptly take such actions, provide such information and sign such documents as the other Party may reasonably request to obtain the benefits and exercise the rights granted, and to perform the obligations imposed, under this Agreement. i. Notices. Any notice required or permitted to be provided by a Party under this Agreement will be made to the notice address of the receiving Party set forth below or to an alternate notice address later designated by the receiving Party in accordance with this Subsection. Notices will be effective upon actual receipt by the receiving Party. An emailed notice will be effective against a receiving Party only if the Receiving Party acknowledge receipt of the emailed notice in a return notice to the notifying Party. A receiving Party agrees to acknowledge receipt of an email notice in good faith promptly following receipt. A Party may change its address for notice by giving notice to the other party Pursuant to this Subsection. + +Address for notice to Buyer: + +Pactiv LLC 1900 West Field Court Lake Forest, IL 60045 Attn: John McGrath, Chief Executive Officer Email: jmcgrath@pactiv.com + +For any notice concerning default or termination, with a copy to: + +Pactiv LLC 1900 West Field Court Lake Forest, IL 60045 Attn: Steven R. Karl, General Counsel Email: skarl@pactiv.com + +Address for notices to Seller: + +Reynolds Consumer Products LLC 1900 W. Field Court Lake Forest, IL 60045 Attention: Lance Mitchell, Chief Executive Officer Email: Lance.Mitchell@@ReynoldsBrands.com + +Source: REYNOLDS CONSUMER PRODUCTS INC., S-1, 11/15/2019 + + + + + +For any notice concerning default or termination, with a copy to: + +Reynolds Consumer Products LLC 1900 W. Field Court Lake Forest, IL 60045 Attention: David Watson, General Counsel Email: David.Watson@ReynoldsBrands.com j. Independent Contractors. The relationship of the Parties established by this Agreement is that of independent contractors, and nothing contained in this Agreement shall be construed to: (a) give either Party the power to direct and control the day-to-day activities of the other Party, (b) establish the Parties as partners, joint ventures, co-owners or otherwise as participants in a joint or common undertaking, or (c) allow a Party to bind the other Party in any manner or otherwise create or assume any obligation on behalf of the other Party for any purpose whatsoever. A Party will not be considered an agent of the other Party. k. Non-Exclusive Supply Relationship. Except as may be provided in a Purchase Schedule, the Agreement is not evidence of, nor does it create, any form of exclusive supply relationship between the Parties concerning the purchase and sale of products. Except as may be provided in a Purchase Schedule and for the types and quantities of products in an accepted purchase order, nothing in the Agreement obligates a Party to sell or purchase any specified volume, market share or other minimum level of products during the Term. l. Construction. Unless the context otherwise requires, the following rules of construction will be applied to in the interpretation of the Agreement: (1) Headings are for convenience only and do not affect interpretation; (2) Singular includes the plural and vice-versa; (3) Gender includes all genders; (4) If a word or phrase is defined, its other grammatical forms have a corresponding meaning; (5) The meaning of general words is not limited by specific examples introduced by "includes", "including" or "for example" or similar expressions; (6) The word "person" includes an individual, corporation, company, trust, partnership, limited partnership, unincorporated body, joint venture, consortium or other legal entity; (7) A reference in any Purchase Schedule or Exhibit to an Article, Section, Subsection or Clause is a reference to an Article, Section, Subsection or Clause in that Purchase Schedule or Exhibit unless otherwise identified; (8) Reference to a Purchase Schedule or Exhibit is a reference to a Schedule, Exhibit described, appended or otherwise identified in this Agreement; (9) A reference to conduct includes, without limitation, an omission, statement or undertaking, whether or not in writing; (10) A reference to a third-party is a reference to a person who is not a Party to this Agreement; (11) Where a period of time is specified for the performance of any act and dates from a given day or the day of an act or event, the period shall be exclusive of that date; and (12) the Parties agree that the Agreement is the product of negotiation between sophisticated parties and individuals, all of whom were or have been given the opportunity to be represented by counsel, and each of whom had an opportunity to participate in, and did participate in, negotiation of the terms hereof. Accordingly, the Parties acknowledge and agree that the Agreement is not a contract of adhesion and that ambiguities in the Agreement, if any, shall not be construed strictly or in favor of or against either Party, but rather shall be given a fair and reasonable construction. m. Execution. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original as against the Party whose signature appears thereon, but all of which taken together shall constitute but one and the same instrument. Acceptance of this Agreement may be made by e-mail, mail or other commercially reasonable means showing the signatures of the chief executive officers of the Parties. + +Source: REYNOLDS CONSUMER PRODUCTS INC., S-1, 11/15/2019 + + + + + +In witness whereof, Seller and Buyer have executed this Master Supply Agreement as of the Effective Date. REYNOLDS CONSUMER PRODUCTS LLC, as Seller + +By: //s// Lance Mitchell Lance Mitchell Chief Executive Officer + +PACTIV LLC, as Buyer + +By: //s// John McGrath John McGrath Chief Executive Officer + +Source: REYNOLDS CONSUMER PRODUCTS INC., S-1, 11/15/2019 \ No newline at end of file diff --git a/full_contract_txt/ReynoldsConsumerProductsInc_20200121_S-1A_EX-10.22_11948918_EX-10.22_Service Agreement.txt b/full_contract_txt/ReynoldsConsumerProductsInc_20200121_S-1A_EX-10.22_11948918_EX-10.22_Service Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..d99d49a5be71d7ac2d3bd7edbe589c474776d1cd --- /dev/null +++ b/full_contract_txt/ReynoldsConsumerProductsInc_20200121_S-1A_EX-10.22_11948918_EX-10.22_Service Agreement.txt @@ -0,0 +1,989 @@ +Exhibit 10.22 + +TRANSITION SERVICES AGREEMENT + +TRANSITION SERVICES AGREEMENT (the "Agreement") dated as of [•], 2020, between Reynolds Group Holdings Inc., a Delaware corporation ("RGHI"), and Reynolds Consumer Products Inc., a Delaware corporation, (the "Company" or "RCP"). Each Party or any of its Affiliates providing services hereunder shall be a "Provider," and each Party or any of its Affiliates receiving services hereunder shall be a "Recipient." + +PRELIMINARY STATEMENT + +A. Prior to the Commencement Date, RGHI and the Company were wholly owned subsidiaries of Reynolds Group Holdings Limited, a company organized under the laws of New Zealand ("RGHL"). Effective February 4, 2020 (the "Commencement Date"), RCP is undertaking an initial public offering of shares of common stock and thereafter the Company will no longer be a subsidiary of RGHL. + +B. In order to facilitate the separation of the Company and its Affiliates from RGHI and its Affiliates, (i) RGHI will provide, or cause its Affiliates to provide, certain services to the Company and its Affiliates, and (ii) the Company will provide, or cause its Affiliates to provide, certain services to RGHI and its Affiliates, all on the terms and conditions set forth herein. + +NOW, THEREFORE, the Parties agree as follows: + +ARTICLE I DEFINITIONS + +Section 1.1 Definitions. The following terms shall have the respective meanings set forth below throughout this Agreement: + +"Affiliate" means, with respect to any person, any other person who directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such person. The term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract or otherwise, and the terms "controlled" and "controlling" have meanings correlative thereto. For the avoidance of doubt, for the purposes of this Agreement and all exhibits thereto, the term Affiliate shall not apply to the relationship between RGHI or RGHL or either of their respective Affiliates on the one hand and RCP and its direct and indirect subsidiaries on the other hand. + +"Applicable Rate" means the average of the daily "prime rate" (expressed rate per annum) published in The Wall Street Journal for each of the days in the applicable period, plus two percent (2%). + +"Business" means the manufacture and sale of consumer products including cooking products, waste & storage products, and tableware by the Company and activities ancillary thereto. + +Source: REYNOLDS CONSUMER PRODUCTS INC., S-1/A, 1/21/2020 + + + + + +"Business Day" means any day that is not (a) a Saturday, (b) a Sunday, or (c) any other day on which commercial banks are authorized or required by law to be closed in the City of New York. + +"Change" has the meaning set forth in Section 3.1(c). + +"Commencement Date" has the meaning set forth in the preamble. + +"Confidential Information" means any information of a Party, its Affiliates, members, licensors, consultants, service providers, advisors or agents that is confidential or proprietary, however recorded or preserved, whether written or oral. Confidential Information includes trade secrets, pricing data, employee information, customer information, cost information, supplier information, financial and tax matters, third-party contract terms, inventions, know-how, processes, methods, models, technical information, schedules, code, ideas, concepts, data, software and business plans (regardless of whether such information is identified as confidential). + +"Dispute Negotiations" has the meaning set forth in Section 3.3(b). + +"Fees" has the meaning set forth in Section 5.1. + +"Force Majeure Event" has the meaning set forth in Section 10.1. + +"Governmental Authority" means governmental or quasi-governmental entity of any nature (including any governmental agency, branch, department, official, or entity and any court or other tribunal) or (iii) body exercising, or entitled to exercise any administrative, executive, judicial, legislative, police, regulatory or taxing authority or power of any nature, including any arbitral tribunal. + +"Indemnified Parties" has the meaning set forth in Section 9.1. + +"Indemnifying Party" has the meaning set forth in Section 9.1. + +"Law" means a law, statute, order, ordinance, rule, regulation, judgment, injunction, order, or decree. + +"Litigation" means any action, cease and desist letter, demand, suit, arbitration proceeding, administrative or regulatory proceeding, citation, summons or subpoena of any nature, civil, criminal, regulatory or otherwise, in law or in equity. + +"Losses" means any and all damages, liabilities, losses, obligations, claims of any kind, interest and expenses (including reasonable fees and expenses of attorneys). + +"Migration Plan" has the meaning set forth in Section 2.1(c). + +"Migration Services" has the meaning set forth in Section 2.1(c). + +Source: REYNOLDS CONSUMER PRODUCTS INC., S-1/A, 1/21/2020 + + + + + +"Multi-party Contract" means a contract with a customer or supplier pursuant to which both RCP and RGHI or any of its Affiliates provides a benefit to or receives a benefit from a third party. + +"Party" means RGHI or Company, as applicable (collectively, the "Parties"). + +"Personnel" means, with respect to any Party, (i) the employees, officers and directors of such Party or its Affiliates or (ii) agents, accountants, attorneys, independent contractors and other third parties engaged by such Party or its Affiliates. + +"Provider" has the meaning set forth in the preamble. + +"RCP Names" means the registered and unregistered trademarks and corporate names used by RCP, RGHI and its respective Affiliates immediately prior to the Commencement Date which include the word "Reynolds" and any derivatives thereof. + +"Recipient" has the meaning set forth in the preamble + +"Reverse Transition Services" has the meaning set forth in Section 2.1(b). + +"RGHI Letters of Credit" means all letters of credit, performance bonds or other surety agreements that RGHL or RGHI or its Affiliates have in place with respect to the Company. + +"RGHI Guarantees" means all guarantees extended by RGHI or RGHL or its Affiliates on behalf of the Company. + +"Sale and Services Taxes" has the meaning set forth in Section 5.5. + +"Security Incident" has the meaning set forth in Section 4.1. + +"Security Regulations" means a Party's and its Affiliates' system security policies, procedures and requirements, as amended from time to time. + +"Service Coordinator" has the meaning set forth in Section 3.3(a). + +"Service Standard" has the meaning set forth in Section 3.1(a). + +"Services" means the Transition Services and the Reverse Transition Services, unless the context requires otherwise. + +"Systems" has the meaning set forth in Section 3.5. + +"Tax" means any federal, state, local or foreign income, alternative, minimum, accumulated earnings, personal holding company, franchise, capital stock, profits, windfall profits, gross receipts, sales, use, value added, transfer, registration, stamp, premium, excise, customs duties, severance, environmental (including taxes under section 59A of the Code), real property, personal property, ad valorem, occupancy, license, occupation, employment, payroll, social security, disability, unemployment, workers' compensation, withholding, estimated or other similar tax, duty, fee, assessment or other governmental charge or deficiencies thereof (including all interest and penalties thereon and additions thereto). + +Source: REYNOLDS CONSUMER PRODUCTS INC., S-1/A, 1/21/2020 + + + + + +"Terminating Party" has the meaning set forth in Section 6.3. + +"Term" has the meaning set forth in Section 6.1. + +"Termination Date" has the meaning set forth in Section 6.1. + +"Transition Services" has the meaning set forth in Section 2.1(a). + +"TSA Records" has the meaning set forth in Section 7.1(a). + +ARTICLE II SERVICES AND INTERNAL CONTROLS + +Section 2.1 Services. + +(a) During the applicable Term of any Service, and in accordance with the terms and conditions of this Agreement, RGHI shall provide, or shall cause its Affiliates or, subject to Section 2.2, third parties to provide, to the Company or one or more of its Affiliates (in connection with the conduct of the Business) the services described on Exhibit A hereto (the "Transition Services"). Notwithstanding the content of Exhibit A, RGHI agrees to consider in good faith any reasonable request by the Company for access to any additional service that is necessary for the operation of the Business, at fees to be agreed upon after good faith negotiation between the parties. RGHI will not be in in breach of this Agreement if RGHI declines to provide a requested additional service for any good faith reason, including the failure of the Parties to agree to the scope, term, and fee for the additional service. Any such additional services so provided by RGHI shall constitute Services hereunder and be subject in all respects to the provisions of this Agreement as if fully set forth on Exhibit A as of the date hereof. + +(b) During the applicable Term of any Service, and in accordance with the terms and conditions of this Agreement, Company shall provide, or shall cause its Affiliates or, subject to Section 2.2, third parties to provide, to RGHI or one or more of its Affiliates, the services described on Exhibit B hereto (the "Reverse Transition Services"). + +(c) In addition to the Services described on Exhibit A hereto, RGHI shall, and shall cause its Affiliates to undertake the segregation and extraction required to separate the IT systems, data, records and processes of the Company, or thereafter created in the conduct of the Business from RGHI's IT environment or infrastructure, and migrate them to RCP's, or any of its Affiliates', IT environment or infrastructure (collectively, the "Migration Services"). For the avoidance of doubt, Migration Services apply to services only and do not include the acquisition or supply of any hardware, software, license (except where RGHI, at the request of RCP, acquires such hardware, software, or license at RCP's cost), or ongoing operational support service for the operating environment(s) (except as otherwise contemplated by Exhibit A). The costs of such Migration Services + +Source: REYNOLDS CONSUMER PRODUCTS INC., S-1/A, 1/21/2020 + + + + + +shall be paid by RCP, including any out-of-pocket costs incurred by RGHI or its Affiliates in connection with such Migration Services and for the time spent by RGHI, its Affiliates or their Personnel, as applicable, in providing such Migration Services. RGHI will also provide to RCP any available reasonable documentation around the systems implementation, configuration documents, process maps, or any other documentation related to the systems that are part of the separation. RGHI and RCP shall work together in good faith to develop a detailed plan for migrating RCP's IT systems, data, records and processes to its IT environment or infrastructure (the "Migration Plan"). + +Section 2.2 Performance by Affiliates or Subcontractors. Either Party may, in its sole discretion, engage, or cause one of their Affiliates to engage, one or more parties (including other third parties or Affiliates) to provide some or all of the Services; provided, (i) such Party is using such Affiliate or third party to perform the same Services for itself and its Affiliates (to the extent applicable), (ii) such arrangement would not increase the cost to Recipient for such Services, and (iii) if such third party is not already engaged with respect to such Service as of the date hereof, Provider shall obtain the prior written consent of Recipient (not to be unreasonably withheld). Provider shall (x) be responsible for the performance or non-performance of any such parties and (y) in all cases remain responsible for ensuring that obligations with respect to the standards of Services set forth in Article III of this Agreement are satisfied with respect to any Services provided by such Affiliate or third party. + +Section 2.3 Scope of Services. Other than as expressly set forth on Exhibit A, Section 2.1, Exhibit B, or as agreed by the Parties in writing, in no event shall Provider be obligated to provide any Service to the Recipient for any purpose other than to facilitate, on a transitional basis, the Recipient's ability to conduct business as conducted immediately preceding the date hereof. + +Section 2.4 Internal Controls and Procedures. In addition to the requirements of Article III and Article VII herein, with respect to the Services provided by RGHI and its Affiliates providing Services hereunder, certain of the Services may involve processes that directly or indirectly support financial information that the Company includes within its consolidated financial reports. The Company has an obligation to ensure that it has internal controls over financial reporting that comply with the Sarbanes-Oxley Act of 2002 and must also ensure that its external auditors can complete their necessary evaluation of the Company's internal controls over financial reporting in accordance with auditing standards issued by the U.S. Public Company Accounting Oversight Board. The Company and RGHI and such Affiliates shall use reasonable commercial efforts to agree (i) what key controls over financial reporting will be performed by RGHI and such Affiliates within the processes that directly or indirectly support financial information that the Company includes within its consolidated financial reports; (ii) the frequency as to the performance of the agreed key controls; and (iii) the form of documentation required to evidence the effective performance of the agreed key controls. RGHI and such Affiliates will perform the agreed key controls and evidence such performance in the agreed format. Company shall have the right, in a manner to avoid unreasonable interruption to RGHI's or its Affiliates' business, to (1) evaluate the effectiveness of the key controls; and (2) upon at least thirty (30) days' written notice to RGHI, perform (through its external auditor) audit procedures over RGHI's internal controls and procedures for the Services provided under this Agreement; provided that such right to audit shall exist solely to the extent reasonably required by Company's external auditors to ensure Company's compliance with the Sarbanes-Oxley Act of 2002. Company shall pay or reimburse all of RGHI's expenses and costs arising from such audit. The performance of the agreed key controls, preparation of documentation, providing access to the Company or its delegate and the Company's auditors will be billed at the agreed rates as set forth on Exhibit A. + +Source: REYNOLDS CONSUMER PRODUCTS INC., S-1/A, 1/21/2020 + + + + + +ARTICLE III SERVICE LEVELS; SERVICE COORDINATORS; TSA COMMITTEE + +Section 3.1 Quality of Services. + +(a) Provider shall perform the Services (i) at a level of quality substantially similar in all material respects to that at which such Services were performed or enjoyed during the twelve (12) month period prior to the date hereof and (ii) in accordance with applicable Law (collectively, (i) and (ii), the "Service Standard"). Subject to Section 3.1(c), internal controls of Provider and its Affiliates with respect to the Service Standard shall remain materially the same in effect throughout the term of this Agreement. Each Party acknowledges that the other Party and their Affiliates are not professional service providers of the Services. + +(b) In the event of any material failure of a Provider to perform the Services, as applicable, in accordance with the Service Standards, Recipient shall provide Provider with written notice of such material failure, and Provider will use commercially reasonable efforts to remedy such failure as soon as reasonably possible and in the same manner that Provider would remedy such a failure for their other businesses undergoing such a material failure. + +(c) A Provider may, from time to time: (i) reasonably supplement, modify, upgrade, substitute or otherwise alter ("Change") any Service in a manner consistent with Changes made with respect to similar services provided by Provider on their own behalf or to their Affiliates, including taking any physical or information security measures with respect to such Service, in a manner that does not (x) adversely affect in any material respect the quality or availability of such Service or (y) materially increase the fees payable in connection with such Changed Service; provided that to the extent that any such Change is reasonably likely to modify, substitute or otherwise alter the receipt or use of such Service, Provider shall provide Recipient with reasonable advance written notice of the implementation of the Change to the extent practicable under the circumstances; provided, further, that the Service Standard shall continue to apply to such Service following any Change. If a Change is required by applicable Law or is in response to a threatened Security Incident, Provider may make any and all changes to the Service necessary to comply with applicable Law and any changes thereto or to respond to such threatened Security Incident in a manner consistent with responses made by Provider on its own behalf or in respect of their Affiliates; provided that Provider shall provide Recipient such reasonable advance written notice of the implementation of any such Change as may be practicable under the circumstances; and (ii) with reasonable advance written notice to Recipient, temporarily suspend the provision of a Service as necessary to conduct Systems maintenance or patching without such suspension constituting a breach of the Service Standard. + +Source: REYNOLDS CONSUMER PRODUCTS INC., S-1/A, 1/21/2020 + + + + + +(d) A Provider need not provide any Service if it is not permitted to do so by applicable Law. To the extent that any Service is not permitted pursuant to applicable Law, the Parties will cooperate in good faith to enter into arrangements reasonably acceptable to each of the Parties under which the Recipient would obtain the benefit of such Service to the same extent (or as nearly as practicable) as if such Service were permitted by applicable Law. + +Section 3.2 Policies. Each Party shall, and shall cause any of its Affiliates or third parties providing or receiving Services (as the case may be) to, follow the reasonable policies, procedures and practices of the other Party and its Affiliates applicable to the Services that are known or made known to such Party. A failure of a Recipient to act in accordance with this Section 3.2 that prevents a Provider from providing a Service hereunder shall, upon reasonable advance written notice to the Recipient (where practicable), relieves Provider of its obligations under the Service until such time as the failure has been cured. + +Section 3.3 Service Coordinators and Dispute Resolution. + +(a) RGHI and Company shall each nominate a representative to act as the primary contact person with respect to the performance of the Services (each, a "Service Coordinator"). Unless otherwise agreed upon by the Parties, the Parties shall direct all initial communications relating to this Agreement and the Services to the Service Coordinators. The initial Service Coordinators for RGHI and Company, including their contact information, are set forth on Exhibit C. Either Party may replace its Service Coordinator at any time by providing notice and contact information for the newly designated Service Coordinator in accordance with Section 10.5. The Service Coordinators shall oversee the implementation and ongoing operation of this Agreement. The Parties shall ensure that their respective Service Coordinators shall meet in person or telephonically at such times as are reasonably requested by RGHI or Company to review and discuss the status of, and any issues arising in connection with, the Services or this Agreement. + +(b) In the event a dispute arises between the Parties under this Agreement, telephonic negotiations shall be conducted between the Parties' respective Service Coordinators within ten (10) days following a written request from any Party ("Dispute Negotiations"). If the Service Coordinators are unable to resolve the dispute within ten (10) days after the Parties have commenced Dispute Negotiations, then either RGHI or the Company, by written request to the other Party, may request that such dispute be referred for resolution to the respective presidents (or similar position) of the divisions implicated by the matter for the Parties, or more senior executive of a Party if such Party so designates, which presidents (or other executives) will have fifteen (15) days to resolve such dispute. If the presidents of the relevant divisions (or other executives) for each Party do not agree to a resolution of such dispute within fifteen (15) days after the reference of the matter to them, or if the dispute is not otherwise resolved in a friendly manner as set forth in this Section 3.3, then any unresolved dispute may be resolved pursuant to Section 10.8. + +Source: REYNOLDS CONSUMER PRODUCTS INC., S-1/A, 1/21/2020 + + + + + +Section 3.4 Limitation of Services Provided. Except to the extent required to meet the Service Standards, in providing the Services, the Parties are not obligated to: (i) hire any additional employees; (ii) maintain the employment of any specific employee; (iii) purchase, lease or license any additional equipment or software; or (iv) make any capital investment to provide or continue providing the Services. The Parties have no responsibility to verify the correctness of any information given to them on behalf of the other Party for the purposes of providing the Services. + +Section 3.5 Third Party Licenses and Consents. The Parties will cooperate and assist each other, and use commercially reasonable efforts, to obtain, or direct its Affiliates to obtain, any third party consents required under the terms of any agreement between a Party or any of its Affiliates, on the one hand, and a third party, on the other hand, in order for a Party or its Affiliates to provide the Services during the Term. Notwithstanding the foregoing, if the provision of any Service as contemplated by this Agreement requires the consent, license or approval of any third party not previously obtained, the Parties shall use commercially reasonable efforts, to obtain as promptly as possible after the Commencement Date, any third party consents, permits, licenses and approvals required under the terms of any third party agreement in order for Provider to provide the Services hereunder. The cost of obtaining any consent, permit, license or approval with respect to any Service shall be borne by the Recipient of the relevant Services. If any such consent, permit, license or approval is not obtained, the Parties will cooperate in good faith to enter into reasonably acceptable arrangements under which Recipient would obtain the benefit of such Service to the same extent (or as nearly as practicable) as if such consent were obtained (at Recipient's cost), and each Party will continue to use commercially reasonable efforts to obtain any such required consent or amendment. The Parties acknowledge that it may not be practical to try to anticipate and identify every possible legal, regulatory, and logistical impediment to the provision of Services hereunder. Accordingly, each Party will promptly notify the other Party if it reasonably determines that there is a legal, regulatory, or logistical impediment to the provision of any Service, and the Parties shall each use commercially reasonable efforts to overcome such impediments so that the Services may be provided otherwise in accordance with the terms of this Agreement. All computer systems or software ("Systems"), data, facilities and other resources owned by a Party, its Affiliates or third parties used in connection with the provision or receipt of the Services, as applicable, shall remain the property of such Party, its Affiliates or third parties. + +ARTICLE IV SECURITY; SYSTEMS + +Section 4.1 Security Breaches. If any Party discovers (a) any material breach of the Security Regulations or of the systems used to provide the Services or (b) any breach or threatened breach of the Security Regulations that involves or may reasonably be expected to involve unauthorized access, disclosure or use of the other Party's or its Affiliates' Confidential Information (each of (a) and (b), a "Security Incident"), such Party shall, at the cost of the Party responsible for the Security Incident, (i) promptly (both orally, if practicable, and in any event in writing) notify the other Party of the Security Incident and (ii) reasonably cooperate with the other Party (1) to take commercially reasonable measures necessary to control and contain the security of such Confidential Information, (2) to remedy any such Security Incident, including using commercially reasonable efforts to identify and address any root causes for such Security Incident, (3) to furnish full details of the Security Incident to the other Party and keep such other Party advised of all material measures taken and other developments with respect to such Security Incident, (4) in any litigation or formal action with third parties or in connection with any regulatory, investigatory or other action of any Governmental Authority and (5) in notifying the other Party's or its Affiliates' customers and Personnel and other persons of the Security Incident to the extent reasonably requested by the other Party. + +Source: REYNOLDS CONSUMER PRODUCTS INC., S-1/A, 1/21/2020 + + + + + +Section 4.2 Systems Security. + +(a) If RGHI, Company, their Affiliates or their respective Personnel receive access to any of RGHI's, Company's, or their respective Affiliates', as applicable, Systems in connection with the Services, the accessing Party or its Personnel, as the case may be, shall comply with all of such other Party's and its Affiliates' reasonable Security Regulations known to such accessing Party or its Personnel or made known to such accessing Party or its Personnel in writing, and will not tamper with, compromise or circumvent any security, Security Regulations or audit measures employed by such other Party or its relevant Affiliate. + +(b) Each Party shall, and shall cause its Affiliates to, as required by applicable Law, (i) ensure that only those of its Personnel who are specifically authorized to have access to the Systems of the other Party or its Affiliates gain such access and (ii) prevent unauthorized access, use, destruction, alteration or loss of information contained therein, including by notifying its Personnel regarding the restrictions set forth in this Agreement and establishing appropriate policies designed to effectively enforce such restrictions. + +(c) Each Party shall, and shall cause their respective Affiliates to, access and use only those Systems of the other Party and its Affiliates, and only such data and information within such Systems, to which they have been granted the right to access and use. Any Party and its Affiliates shall have the right to deny the Personnel of the other Party or its Affiliates access to such first Party's or its Affiliates' Systems, after prior written notice and consultation with the other Party, in the event the Party reasonably believes that such Personnel pose a security concern. + +Section 4.3 Viruses. Provider and Recipient shall each use its commercially reasonable efforts consistent with its past practices to prevent the introduction or coding of viruses or similar items into the Systems of the other Party. Without limiting the rights and remedies of any party hereunder, in the event a virus or similar item is introduced into the Systems of a Party, whether or not such introduction is attributable to the other Party (including such other Party's failure to perform its obligations under this Agreement), the other Party shall, as soon as practicable, use its commercially reasonable efforts to assist such Party in reducing the effects of the virus or similar item, and if the virus or similar item causes a loss of operational efficiency or loss of data, upon such Party's request, work as soon as practicable to contain and remedy the problem and to restore lost data resulting from such introduction. + +Section 4.4 Providers' Software. Except as authorized by this Agreement or by Provider's express written consent, Recipient shall not, and shall cause its Affiliates not to, copy, modify, reverse engineer, decompile or in any way alter any software of Provider or any of its Affiliates. + +Source: REYNOLDS CONSUMER PRODUCTS INC., S-1/A, 1/21/2020 + + + + + +Section 4.5 System Upgrades. No Provider shall be required to purchase, upgrade, enhance or otherwise modify any Systems used by any Recipient as of the date hereof in connection with the business of any Party, or to provide any support or maintenance services for any Systems that have been upgraded, enhanced or otherwise modified from the Systems that are used in connection with the business of any Party as of the date hereof. + +ARTICLE V FEES + +Section 5.1 Fees. Recipient shall pay Provider (i) the fee for each Service set forth on Exhibit A or Exhibit B, (ii) Providers' and their Affiliates' reasonable and documented out-of-pocket expenses incurred in providing the Services, including the third-party fees and expenses that are charged to Recipient or their Affiliates in connection with provision of the Services (including any fees and expenses charged by subcontractors permitted to provide the Services under Section 2.2) but excluding payments made to employees of Provider or any of their Affiliates pursuant to Section 5.2, and (iii) any other fees as agreed to by the Parties in writing (collectively, the "Fees"). + +Section 5.2 Responsibility for Wages and Fees. Any employees of Provider or any of their Affiliates providing Services to Recipient under this Agreement will remain employees of Provider or such Affiliate and shall not be deemed to be employees of Recipient for any purpose. Provider or such Affiliate shall be solely responsible for the payment and provision of all wages, bonuses and commissions, employee benefits, including severance and worker's compensation, and the withholding and payment of applicable Taxes relating to such employment. + +Section 5.3 Invoices. Provider shall submit or cause to be submitted to Recipient in writing, within 15 days after the end of each month, an invoice setting forth the Fees for the Services provided to Recipient during such month in reasonable detail, as applicable, due under such invoice. + +Section 5.4 Payment. Recipient shall pay, or cause to be paid, the Fees shown on an invoice no later than the last business day of the month Recipient received such invoice unless disputed in accordance with Section 5.7. Any amount not received from the invoiced Party within such period shall bear interest at the Applicable Rate, from and including the last date of such period to, but excluding, the date of payment. + +Section 5.5 Sales Tax, Etc. Provider shall be entitled to invoice and collect from Recipient any additional amounts required for state, local and foreign sales Tax, value added Tax, goods and services Tax or similar Tax with respect to the provision of the Services hereunder, as applicable ("Sale and Services Taxes"). Notwithstanding the previous sentence, if the Recipient is exempt from liability for such Sale and Services Taxes, it shall provide Provider with a certificate (or other proof) evidencing an exemption from liability for such Sale and Services Taxes. Provider shall be responsible for any losses (including any deficiency, interest and penalties) imposed as a result of a failure to timely remit such Sale and Services Taxes to the applicable tax authority to the extent the Recipient timely remits such Sale and Services Taxes to Provider or Provider's failure to do so results from Provider's failure to timely charge or invoice such Sale and Services Taxes. The Recipient shall be entitled to any refund of any such Sale and Services Taxes paid in excess of liability as determined at a later date. Provider shall promptly notify the Recipient of any deficiency claim or similar notice by a tax authority with respect to Sale and Services Taxes payable hereunder, and of any pending audit or other proceeding that could lead to the imposition of Sales and Services Taxes payable hereunder. + +Source: REYNOLDS CONSUMER PRODUCTS INC., S-1/A, 1/21/2020 + + + + + +Section 5.6 No Offset. Recipient shall not withhold any payments due under this Agreement in order to offset payments due (or to become due) to Recipient pursuant to this Agreement unless such withholding is mutually agreed to by the Parties in writing or is provided for in the final ruling of a court. Any required adjustment to payments due hereunder will be made as a subsequent invoice. + +Section 5.7 Invoice Disputes. In the event of an invoice dispute, the disputing Party shall deliver a written statement to the other Party no later than the date payment is due on the disputed invoice listing all disputed items and providing a reasonably detailed description of each disputed item. Amounts not so disputed shall be deemed accepted and shall be paid, notwithstanding disputes on other items, within the period set forth in Section 5.4. The Parties shall seek to resolve all such disputes expeditiously and in good faith. Provider shall continue performing the Services in accordance with this Agreement pending resolution of any dispute. + +Section 5.8 Audit. At the request of Recipient, Provider shall provide to Recipient and its Affiliates reasonable access to Provider's applicable Personnel and records with respect to the amount charged in connection with any Service so that Recipient may confirm that the pass through costs incurred by Provider or, to the extent such Service is provided on an hourly basis, information related to hours worked in connection with such Service, are commensurate with the amount charged to Recipient for such Service. In the event that Recipient believes that the amount charged to Recipient materially exceeds the pass through costs actually incurred by Provider or hours charged in connection with such Service, the Parties shall review such matter in good faith. + +ARTICLE VI TERM AND TERMINATION + +Section 6.1 Term of Services. With respect to each of the Services, the term thereof will be for a period commencing as of the date hereof, unless a different date is specified as the commencement date for any applicable Service on Exhibit A or Exhibit B (either, a "Commencement Date"), and shall continue until 12 months following the Commencement Date unless (i) such other date as is specified as the termination date for any applicable Service in this Agreement or on Exhibit A or Exhibit B, as applicable (the "Term") or (ii) earlier terminated pursuant to this Agreement (a "Termination Date"). + +Section 6.2 Termination of Services. Except as agreed by the Parties in writing or as otherwise stated in the Exhibits, Company may terminate for convenience any Transition Service, and RGHI may terminate for convenience any Reverse Transition Service, upon 30 days' prior written notice of such termination; provided, (a) that, with respect to the Services described in Section G1 of Exhibit A, unless otherwise indicated therein, those Services may not be terminated independently except in accordance with an agreed Migration Plan and, (b) any unamortized costs associated with Provider's purchase of any license or other costs incurred specifically for the purpose of providing the Services hereunder will be passed through to the Terminating Party. Upon termination of any Service pursuant to this Section 6.2, the Terminating Party's obligation + +Source: REYNOLDS CONSUMER PRODUCTS INC., S-1/A, 1/21/2020 + + + + + +to pay for such Service will cease except any sums accrued or due as of the date of such early termination for Services rendered (which shall include (i) any amounts contemplated by 6.2(b), plus (ii) a pro rata portion of any fees applicable to the current period in which such Services are being performed if the applicable fee is determined on a period by period basis as set forth on Exhibit A or Exhibit B, as applicable). The provisions of this Section 6.2 shall apply mutatis mutandis with respect to any assignment of this Agreement subject to Section 10.10(b) and the Parties will negotiate in good faith regarding fee allocations and, if necessary, early termination or partial termination of any Services. + +Section 6.3 Termination of Agreement. This Agreement shall terminate when the Termination Date has occurred for all Services. In addition, this Agreement may be terminated by either Party (the "Terminating Party") upon written notice to the other Party (which notice, in case of material breach, shall specify the basis for such claim for breach), if: + +(a) the other Party or its Affiliates materially breaches this Agreement and such breach is not cured, to the reasonable satisfaction of the Terminating Party, within thirty (30) days of written notice thereof, it being understood that a good-faith dispute over an invoice or Service shall not constitute a material breach of this Agreement; or + +(b) the other Party files for bankruptcy or similar proceeding, is the subject of an involuntary filing for bankruptcy or similar proceeding (not dismissed within sixty (60) days), makes a general assignment of all or substantially all of its assets for the benefit of creditors, becomes or is declared insolvent, becomes the subject of any proceedings (not dismissed within sixty (60) days) related to its liquidation, insolvency, bankruptcy or the appointment of a trustee or a receiver, takes any corporate action for its winding up or dissolution, or a court approves reorganization proceedings on such Party. + +Section 6.4 Effect of Termination. Upon any termination or expiration of this Agreement or any Service provided hereunder: + +(a) each Party shall, and shall cause its Affiliates to, as soon as practicable, return to the other Party any equipment, books, records, files and other property, not including current or archived copies of computer files, of the other Party, its Affiliates and their respective third-party service providers, that is in the Party's or its Affiliates' possession or control (and, in case of termination of one or more specific Services, only the equipment, books, records, files and other property, not including current or archived copies of computer files, that are used in connection with the provision or receipt solely of such Services and of no other Services); and + +(b) the intellectual property license granted by Section 8.2 shall terminate; provided, however, that in the case of termination of a specific Service, such license shall terminate only to the extent such license was necessary for the provision or receipt of such Service and is not necessary for any other Service that has not yet terminated. + +Section 6.5 Survival. The following Articles and Sections shall survive the termination or expiration of this Agreement, including the rights and obligations of each Party thereunder: Article I; Article V; this Article VI; Article VII; Article IX; and Article X. + +Source: REYNOLDS CONSUMER PRODUCTS INC., S-1/A, 1/21/2020 + + + + + +ARTICLE VII BOOKS AND RECORDS + +Section 7.1 TSA Books and Records. + +(a) The Parties shall, and shall cause each of their respective Affiliates to, take reasonable steps to maintain books and records of all material transactions pertaining to, and all data used by it, in the performance of the Services (the "TSA Records"). The TSA Records shall be maintained (a) in a format substantially similar to the format such books and records are maintained as of the date hereof, (b) in accordance with any and all applicable Laws and (c) in accordance with the maintaining Party's business record retention policies. + +(b) Each Party shall make the TSA Records it maintains available to the other Party and its Affiliates and their respective auditors or other representatives, and in any event to any Governmental Authority, during normal business hours on reasonable prior notice (it being understood that TSA Records that are not stored on a Party's regular business premises will require additional time to retrieve), for review, inspection, examination and, at the reviewing Party's reasonable expense, reproduction. Access to such TSA Records shall be exercised by a Party and its Affiliates and their authorized representatives in a manner that shall not interfere unreasonably with the normal operations of the Party maintaining the TSA Records. In connection with such review of TSA Records, and upon reasonable prior notice, a reviewing Party and its Affiliates shall have the right to discuss matters relating to the TSA Records with the employees of the Party or its Affiliates who are maintaining the relevant TSA Records and providing the Services, as applicable, during regular business hours and without undue disruption of the normal operations of such maintaining and providing Party or its Affiliates. Neither Party shall have access to any TSA Records, and neither Party shall be required to provide access or disclose information, when such access or disclosure would jeopardize any attorney-client privilege or violate any applicable Law (provided that such party shall use commercially reasonable efforts to provide such access or share such information in a manner that would not jeopardize any such privilege or violate any such Law). Each Party's rights under this Section 7.1(b) shall continue for so long as TSA Records are required to be maintained by the other Party under Section 7.1(a). + +Section 7.2 Access to Information; Books and Records. + +(a) On and after the Commencement Date, RGHI shall, and shall cause its Affiliates to, until the 6th anniversary of the Commencement Date, afford to RCP and its employees and authorized representatives during normal business hours reasonable access to their books of account, financial and other records (including accountant's work papers), information, employees and auditors at the Company's expense to the extent necessary or useful for the Company in connection with any audit, investigation, or dispute or Litigation (other than any Litigation involving a dispute between the Parties) or any other reasonable business purpose relating to the Business; provided that any such access by RCP shall not unreasonably interfere with the conduct of the business of RGHI and its Affiliates. + +Source: REYNOLDS CONSUMER PRODUCTS INC., S-1/A, 1/21/2020 + + + + + +(b) After the Commencement Date, RCP shall, and shall cause its Affiliates to, until the 7th anniversary of the date on which RGHL or its Affiliates owns less than 10% of the capital stock in RCP, afford to RGHI and its employees and authorized representatives reasonable access to RCP's employees and auditors, retain all books, records (including accountant's work papers), and other information and documents pertaining to the Business in existence on the Commencement Date and make available for inspection and copying by RGHI (at RGHI's expense) during normal business hours, in each case so as not to unreasonably interfere with the conduct of the business of RCP and its Affiliates, such information (A) as may be required by any Governmental Authority, including pursuant to any applicable Law or regulatory request or to prepare or file any Tax related documentation, (B) as may be necessary for RGHI or its Affiliates in connection with their ongoing financial reporting, accounting or other purpose related to RGHI and Company's affiliation immediately prior to the Commencement Date, or (C) as may be necessary for RGHI or its Affiliates to perform their respective obligations pursuant to this Agreement or in connection with any Litigation (other than any Litigation involving a dispute between the parties), in each case subject to compliance with all applicable privacy Laws. + +(c) Notwithstanding anything to the contrary in this Section 7.2, the Party granting access under Section 7.2(a) or Section 7.2(b) may withhold any document (or portions thereof) or information (i) that is subject to the terms of a non-disclosure agreement with a third party (provided that such party shall use commercially reasonable efforts to share such information in a manner that would not violate any such obligation), (ii) that may constitute privileged attorney-client communications or attorney work product and the transfer of which, or the provision of access to which, as reasonably determined by such Party's counsel, constitutes a waiver of any such privilege (provided that such party shall use commercially reasonable efforts to share such information in a manner that would not jeopardize any such privilege), or (iii) if the provision of access to such document (or portion thereof) or information, as determined by such Party's counsel, would reasonably be expected to conflict with applicable Laws. + +Section 7.3 Non-Disclosure Agreements. To the extent that any third-party proprietor of information or software to be disclosed or made available to a Recipient in connection with performance of the Services requires a specific form of non-disclosure agreement as a condition of such third party's consent to use the same for the benefit of Recipient or to permit the Recipient access to such information or software, each Party shall, or shall cause its relevant Affiliate to, as a condition to the receipt of such portion of the Services, execute (and shall cause its Personnel to execute, if reasonably required) any such form. + +Section 7.4 Confidential Information. + +(a) Each Party agrees to take the necessary steps to protect any Confidential Information of the other Party with at least the same degree of care that the receiving Party uses to protect its own confidential or proprietary information of like kind, but not less than reasonable care. Neither Party shall use the other Party's Confidential Information other than to perform Services pursuant to this Agreement or pursuant to Section 7.2 herein. The obligation of confidentiality hereunder shall not apply to information that (i) was already + +Source: REYNOLDS CONSUMER PRODUCTS INC., S-1/A, 1/21/2020 + + + + + +in the possession of the receiving Party without restriction on its use or disclosure prior to the receipt of the information from the disclosing Party, (ii) is or becomes available to the general public through no act or fault of the receiving Party, (iii) is rightfully disclosed to the receiving Party by a third party without restriction on its use or disclosure, (iv) is independently developed by employees and/or consultants of the receiving Party who have not had access to the disclosing Party's Confidential Information, (v) is disclosed to the receiving Party after the receiving Party properly gave notice to the disclosing Party that the receiving Party no longer desired to receive any additional Confidential Information from the disclosing Party, or (vi) is required to be disclosed pursuant to judicial or governmental decree or order, provided that the disclosing Party is, where permitted, given prompt written notice of and the opportunity to defend against disclosure pursuant to such decree or order. + +(b) Upon any termination or expiration of this Agreement, at the written request of the other Party, each Party shall, and shall cause any of its Affiliates or third-party vendors used in connection with the provision or receipt of the Services to, deliver to the other Party (i) all records and data (including backup tapes, records and related information) received, computed, developed, processed and stored by it hereunder in a readable format reasonably acceptable to the other Party, and (ii) all other Confidential Information of such other Party, but excluding, in each case, (1) any information stored electronically in a back-up file pursuant to the receiving Party's customary electronic back-up practices which may be retained by such Party solely for archival purposes and subject to the continuing confidentiality obligations set forth in herein, and (2) any information obtained pursuant to Section 7.2 herein; provided that, in lieu of delivering all of the foregoing to the other Party, the relevant delivering Party may confirm in writing that it has destroyed, or has caused RGHI or Company, as the case may be, to destroy, all of the foregoing. + +ARTICLE VIII INTELLECTUAL PROPERTY + +Section 8.1 Ownership of Intellectual Property. Any intellectual property owned by a Party, its Affiliates or third-party vendors and used in connection with the provision or receipt of the Services, as applicable, shall remain the property of such Party, its Affiliates, or third-party vendors. + +Section 8.2 License. Each Party grants, and shall cause its Affiliates to grant, to the other Party and its Affiliates, a royalty-free, non-exclusive, non- transferable, worldwide license, during the Term, to use the intellectual property owned by such Party or its Affiliates (but excluding any trademarks) only to the extent necessary for the other Party and its Affiliates to provide or receive the Services, as applicable. Other than the license granted to a Party and its Affiliates pursuant to the preceding sentence, neither Party nor its Affiliates shall have any right, title or interest in the intellectual property owned by the other Party or its Affiliates. + +Section 8.3 Use of RCP Names. By the third anniversary of the Commencement Date, RGHI and its Affiliates will change its corporate names to remove RCP Names and will cease use of RCP Names as trademarks unless such use is pursuant to a separate license agreement with RCP. + +Source: REYNOLDS CONSUMER PRODUCTS INC., S-1/A, 1/21/2020 + + + + + +ARTICLE IX REMEDIES + +Section 9.1 Indemnification. Subject to the limitations set forth in this Article IX, each Party (the "Indemnifying Party") agrees to indemnify, defend and hold harmless the other Party and its Affiliates and its and their respective directors, officers, employees, agents, representatives, successors and permitted assigns (collectively, the "Indemnified Parties") from and against all Losses imposed upon or incurred by an Indemnified Party to the extent arising out of or resulting from the Indemnifying Party's or its Affiliates' material breach of this Agreement, except to the extent that such Losses are primarily caused by the Indemnified Party. + +Section 9.2 Exclusive Remedy. The indemnities provided for in Section 9.1 shall be the sole and exclusive monetary remedy of the Parties hereto and their Affiliates and their respective officers, directors, employees, agents, representatives, successors and permitted assigns for any breach of or inaccuracy in any representation or warranty or any breach, nonfulfillment or default in the performance of any of the covenants or agreements contained in this Agreement, and the Parties shall not be entitled to a rescission of this Agreement or to any further indemnification rights or claims of any nature whatsoever in respect thereof (including any common law rights of contribution), all of which the Parties hereto hereby waive. + +Section 9.3 Disclaimer. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, (A) NO PARTY MAKES ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, WITH RESPECT TO THE MATERIALS AND SERVICES, AS APPLICABLE, PROVIDED HEREUNDER, AND ALL SUCH MATERIALS AND SERVICES, AS APPLICABLE, ARE PROVIDED ON AN "AS IS" BASIS AND (B) EACH PARTY DISCLAIMS ANY AND ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED WARRANTIES OF MERCHANTABILITY, NON- INFRINGEMENT OR FITNESS FOR A PARTICULAR PURPOSE. + +Section 9.4 Limitations. + +(a) IN NO EVENT SHALL ANY PARTY BE LIABLE TO THE OTHER PARTY FOR ANY INDIRECT, SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES, OR LOST PROFITS OR LOST REVENUES THAT THE OTHER PARTY MAY INCUR BY REASON OF ITS HAVING ENTERED INTO OR RELIED UPON THIS AGREEMENT, OR IN CONNECTION WITH ANY OF THE SERVICES PROVIDED HEREUNDER OR THE FAILURE THEREOF, REGARDLESS OF THE FORM OF ACTION IN WHICH SUCH DAMAGES ARE ASSERTED, WHETHER IN CONTRACT OR TORT (INCLUDING NEGLIGENCE) OR OTHERWISE, EVEN IF ADVISED OF THE POSSIBILITY OF THE SAME OTHER THAN TO THE EXTENT AWARDED IN A THIRD PARTY CLAIM. + +(b) EXCEPT WITH RESPECT TO A MATERIAL BREACH CONSTITUTING WILLFUL MISCONDUCT BY A PROVIDER, REPEAT PERFORMANCE OF A SERVICE BY THE PROVIDER OR REFUND OF THE FEES PAID FOR A SERVICE SHALL BE THE SOLE AND EXCLUSIVE REMEDY FOR BREACH OF THE SERVICES STANDARD FOR SUCH SERVICE. + +Source: REYNOLDS CONSUMER PRODUCTS INC., S-1/A, 1/21/2020 + + + + + +(c) IN NO EVENT SHALL A PARTY'S LIABILITY IN RELATION TO SERVICES PROVIDED UNDER THIS AGREEMENT EXCEED THE FEES PAID TO IT UNDER THIS AGREEMENT FOR THE SPECIFIC SERVICE THAT RESULTED IN THE LOSS. + +Section 9.5 Insurance. Each Party shall obtain and maintain, for the Term (i) commercial general liability insurance with a single combined liability limit of at least $5,000,000 per occurrence, (ii) workers compensation/employer's liability insurance with a liability limit of at least $1,000,000 per occurrence or, if greater, the statutory minimum, and (iii) "all risk" property insurance on a replacement cost basis adequate to cover all assets and business interruption Losses that a Party may suffer in connection with or arising out of this Agreement, subject to policy limits, and in the case of the policies described in clause (i) above, naming the other Party as an additional insured thereunder. Upon request, each Party shall provide the other Party a certificate of insurance as proof of insurance coverage. + +ARTICLE X MISCELLANEOUS + +Section 10.1 Force Majeure. In the event that a Party is wholly or partially prevented from, or delayed in, providing one or more Services, or one or more Services are interrupted or suspended, by reason of events beyond their reasonable control, which by their nature were not foreseen, or, if it was foreseen, was not reasonably avoidable, including acts of God, act of Governmental Authority, act of the public enemy or due to fire, explosion, accident, floods, embargoes, epidemics, war, acts of terrorism, nuclear disaster, civil unrest or riots, civil commotion, insurrection, severe or adverse weather conditions, lack of or shortage of adequate electrical power, malfunctions of equipment or software (each, a "Force Majeure Event"), such Party shall promptly give notice of any such Force Majeure Event to Company and shall indicate in such notice the effect of such event on their ability to perform hereunder and the anticipated duration of such event. The Party whose performance is affected by the Force Majeure Event shall not be obligated to deliver or cause to be delivered the affected Services during such period, and the applicable Party shall not be obligated to pay during such period for any affected Services not delivered. During the duration of a Force Majeure Event, the Party whose performance is affected by the Force Majeure Event shall, and shall cause their relevant Affiliates to, minimize to the extent practicable the effect of the Force Majeure Event on their obligations hereunder and use commercially reasonable efforts to avoid or remove such Force Majeure Event and to resume delivery of the affected Services with the least delay practicable. + +Section 10.2 Authority. A Provider shall not be permitted to bind a Recipient or any of its Affiliates or enter into any agreements (oral or written), contracts, leases, licenses or other documents (including the signing of checks, notes, bills of exchange or any other document, or accessing any funds from any bank accounts of Recipient or any of its Affiliates) on behalf of Recipient or any of its Affiliates except with the express prior written consent of Recipient, which consent may be given from time to time as the need arises and for such limited purposes as expressed therein. + +Source: REYNOLDS CONSUMER PRODUCTS INC., S-1/A, 1/21/2020 + + + + + +Section 10.3 Specific Performance. The Parties shall be entitled to seek an injunction to prevent actual or threatened breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement, this being in addition to any other remedy to which they are entitled at law or in equity. For the avoidance of doubt, nothing contained herein shall prevent a Party from seeking damages (to the extent permitted herein) in the event that specific performance is not available. + +Section 10.4 Status of Parties. This Agreement is not intended to create, nor will it be deemed or construed to create, any relationship between RGHI and its Affiliates, on the one hand, and Company and its respective Affiliates, on the other hand, other than that of independent entities contracting with each other solely for the purpose of effecting the provisions of this Agreement. Neither RGHI and its Affiliates, on the one hand, nor Company and its Affiliates, on the other hand, shall be construed to be the agent of the other. + +Section 10.5 Notices. All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given by delivery in person, by facsimile (followed by overnight courier), Email (followed by overnight courier), or by registered or certified mail (postage prepaid, return receipt requested) to the other Party hereto as follows: + +if to Company, Reynolds Consumer Products Inc. 1900 W. Field Court Lake Forest, IL 60045 Attention: David Watson Email: David.Watson@reynoldsbrands.com + +if to RGHI, Reynolds Group Holdings Inc. 1900 W. Field Court Lake Forest, IL 60045 Attention: Joseph Doyle Email: Joseph.Doyle@RankNA.com + +with a copy (which shall not constitute notice) to: Reynolds Group Holdings Limited Level Nine 148 Quay Street P.O. Box 3515 Auckland, New Zealand Attention: Helen Golding Email: helen.golding@rankgroup.co.nz + +or such other address, Email or facsimile number as such party may hereafter specify for the purpose by notice to the other Party hereto. All such notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received prior to 5:00 p.m. on a Business Day in the place of receipt. Otherwise, any such notice, request or + +Source: REYNOLDS CONSUMER PRODUCTS INC., S-1/A, 1/21/2020 + + + + + +communication shall be deemed to have been received on the next succeeding Business Day in the place of receipt. Notwithstanding the forgoing, normal business communications with respect to the Services may be given by the Parties by whatever means are usual and appropriate for such types of communications. + +Section 10.6 Entire Agreement. This Agreement, including all Exhibits, constitute the sole and entire agreement and supersede all prior agreements, understandings and representations, both written and oral, between the Parties with respect to the subject matter hereof provided, however, nothing in this Agreement shall supersede any other agreement or understanding entered into in connection with the initial public offering of the Company. + +Section 10.7 Waivers and Amendments; Non-Contractual Remedies; Preservation of Remedies. No amendment, modification or discharge of this Agreement, and no waiver hereunder, shall be valid or binding unless set forth in writing and duly executed by the Party against whom enforcement of the amendment, modification, discharge or waiver is sought. Any such waiver shall constitute a waiver only with respect to the specific matter described in such writing and shall in no way impair the rights of the Party granting such waiver in any other respect or at any other time. Neither the waiver by any of the Parties hereto of a breach of or a default under any of the provisions of this Agreement, nor the failure by any of the Parties, on one or more occasions, to enforce any of the provisions of this Agreement or to exercise any right or privilege hereunder, shall be construed as a waiver of any other breach or default of a similar nature, or as a waiver of any of such provisions, rights or privileges hereunder. The rights and remedies herein provided are cumulative and none is exclusive of any other, or of any rights or remedies that any Party may otherwise have at law or in equity. + +Section 10.8 Governing Law, etc. + +(a) This Agreement shall be governed in all respects, including as to validity, interpretation and effect, by the Laws of the State of Illinois, without giving effect to its principles or rules of conflict of laws, to the extent such principles or rules are not mandatorily applicable by statute and would permit or require the application of the Laws of another jurisdiction. Each of the Parties hereto submits to the jurisdiction of any state or federal court sitting in Lake County, Illinois, in any action or proceeding arising out of or relating to this Agreement, agrees to bring all claims under any theory of liability in respect of such action or proceeding exclusively in any such court and agrees not to bring any action or proceeding arising out of or relating to this Agreement in any other court. Each of the Parties hereto waives any defense of inconvenient forum to the maintenance of any action or proceeding so brought and waives any bond, surety or other security that might be required of any other party with respect thereto. Each Party hereto agrees that service of summons and complaint or any other process that might be served in any action or proceeding may be made on such Party by sending or delivering a copy of the process to the Party to be served at the address of the Party and in the manner provided for the giving of notices in Section 10.5. Nothing in this Section 10.8, however, shall affect the right of any Party to serve legal process in any other manner permitted by Law. Each Party hereto agrees that a final, non-appealable judgment in any action or proceeding so brought shall be conclusive and may be enforced by suit on the judgment or in any other manner provided by Law. + +Source: REYNOLDS CONSUMER PRODUCTS INC., S-1/A, 1/21/2020 + + + + + +(b) The Parties each hereby waive, to the fullest extent permitted by Law, any right to trial by jury of any claim, demand, action, or cause of action (i) arising under this Agreement or (ii) in any way connected with or related or incidental to the dealings of the Parties hereto in respect of this Agreement or any of the transactions related hereto, in each case whether now existing or hereafter arising, and whether in contract, tort, equity, or otherwise. The Parties to this Agreement each hereby agree and consent that any such claim, demand, action, or cause of action shall be decided by court trial without a jury and that the parties to this Agreement may file an original counterpart of a copy of this Agreement with any court as written evidence of the consent of the Parties hereto to the waiver of their right to trial by jury. + +Section 10.9 Further Assurances. Each Party covenants and agrees that, without any additional consideration, it shall execute and deliver, or shall cause its Affiliates to execute and deliver, such documents and other papers and shall take, or shall cause its Affiliates to take, such further actions as may be reasonably required to carry out the provisions of this Agreement and give effect to the transactions contemplated by this Agreement. + +Section 10.10 Assignment. No Party may assign this Agreement, or any of its rights or obligations under this Agreement (whether by operation of Law or otherwise), without the prior written consent of the other Party; provided, that notwithstanding the foregoing, any Party may assign any or all of its rights or obligations under this Agreement without the consent of the other Party to: (a) its Affiliates, (b) a purchaser of: (i) one or more of its Affiliates that is a Provider or Recipient under this Agreement; (ii) all or substantially all of the business or assets of one or more of its Affiliates that is a Provider or Recipient under this Agreement; or (iii) all or substantially all of such Party's business or assets, or (c) its financing sources solely for collateral purposes, in each case so long as the assignee agrees to be bound by the terms of this Agreement. Any permitted assignment shall be binding upon and inure to the benefit of the Parties and their respective heirs, successors and permitted assigns. Any attempted assignment of this Agreement, or the rights or obligations herein, not in accordance with the terms of this Section 10.10 shall be void. If an RGHI Affiliate Provider is no longer affiliated with RGHI due to the sale of all or substantially all of the business or assets of such Affiliate to a third party, RGHI shall cause such Affiliate to agree to continue providing the Services that it is providing at the time of such transaction consistent with the terms of this Agreement for the remaining Term. + +Section 10.11 Multi-party Contracts. The Company and RGHI will use all commercially reasonable efforts to obtain within 24 months following the Commencement Date, from the counterparty to each Multi-party Contract any needed consent to separate the portion of such contract that relates to the goods or services purchased from or supplied to the Business under such Multi-party Contract (including but not limited to assignment or partial assignment of such contracts to the Company or RGHI or its Affiliates). The contract constituting the separated portion of any Multi-party Contract that relates to the Business as described in the preceding sentence shall be assumed by and become the responsibility of the Company. Each Party making purchases or receiving services under any Multi-party Contract shall indemnify and hold harmless the other Party and its Affiliates for any claims, damages, etc. arising out of such purchases or receipt of services. + +Source: REYNOLDS CONSUMER PRODUCTS INC., S-1/A, 1/21/2020 + + + + + +Section 10.12 Letters of Credit and Guarantees. RGHI and the Company shall use commercially reasonable efforts to cause all RGHI Letters of Credit and RGHI Guarantees, in each case with respect to the Company, to be canceled or terminated, as of the Commencement Date such that RGHI and its Affiliates shall be released and have no further obligation or liability (contingent or otherwise) under such RGHI Letters of Credit or RGHI Guarantees (to the extent applicable to the Company) from and after the Commencement Date. With respect to any RGHI Letters of Credit or RGHI Guarantees not terminated at the Commencement Date, RCP shall use commercially reasonable efforts to replace, cash collateralize or otherwise "backstop" such RGHI Letters of Credit and RGHI Guarantees at or prior to the Commencement Date. Following the Commencement Date, RCP shall indemnify RGHI and its Affiliates against any and all losses suffered or incurred in connection with the Company under the RGHI Guarantees or RGHI Letters of Credit. + +Section 10.13 Severability. If any term or other provision of this Agreement is determined by a court of competent jurisdiction to be invalid, illegal or unenforceable, all other provisions of this Agreement shall remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any Party. Upon any such determination, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the fullest extent possible. + +Section 10.14 Interpretation. + +(a) The Parties acknowledge and agree that, except as specifically provided herein, they may pursue judicial remedies at law or equity in the event of a dispute with respect to the interpretation or construction of this Agreement. + +(b) This Agreement shall be interpreted and enforced in accordance with the provisions hereof without the aid of any canon, custom or rule of law requiring or suggesting constitution against the Party causing the drafting of the provision in question. + +Section 10.15 No Third-Party Beneficiaries. Other than the rights granted to the Indemnified Parties under Section 9.1, nothing in this Agreement is intended or shall be construed to give any person, other than the Parties hereto, their successors and permitted novates, transferees and assigns, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision contained herein. + +Section 10.16 Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed an original and all of which shall together constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Agreement by facsimile or scanned pages shall be effective as delivery of a manually executed counterpart to this Agreement. + +Section 10.17 Headings. The headings in this Agreement are for reference only and shall not affect the interpretation of this Agreement. + +Source: REYNOLDS CONSUMER PRODUCTS INC., S-1/A, 1/21/2020 + + + + + +Section 10.18 Order of Precedence. In the event of any conflict between the provisions of any Exhibit and the other provisions of this Agreement, the other provisions of this Agreement shall govern, except to the extent that the relevant provision of the Exhibit expressly identifies the provision of this Agreement it supersedes and expressly indicates that such provision is being superseded or this Agreement expressly indicates that the Exhibit governs. + +[Signature page follows] + +Source: REYNOLDS CONSUMER PRODUCTS INC., S-1/A, 1/21/2020 + + + + + +IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above. Reynolds Group Holdings Inc. + +By: Name: Title: + +Reynolds Consumer Products Inc. + +By: Name: Title: + +Source: REYNOLDS CONSUMER PRODUCTS INC., S-1/A, 1/21/2020 + + + + + +EXHIBIT A + +Transition Services + +Section G1: IT Services12 + +Service Name Description of Service Term + +Monthly Fee (USD) - Commencement Date - 2020 + +Monthly Fee (USD) - 2021 G1.1 IT Service Category: Major Applications - Hosting and Infrastructure Support + +Hosting - shared and dedicated environments + +Provision of infrastructure and hosting services at RGHI's data center for shared hardware and hardware dedicated to RCP's systems. Services include: •   Access to and use of the noted applications groups •   Disaster Recovery •   Administration •   Security management •   Help Desk services •   Backup/restore management Service also includes provision of equivalent access to this set of RCP applications in alternative data center(s) upon migration to RCP's new operating environment(s), and/or equivalent services from alternative providers, managed under this Agreement by RGHI. + +All services in group 24 months from the Commencement Date Termination can only be as per an agreed Migration Plan + +G1.1.1 Autosys Job Scheduling and Monitoring System. $10,109 TBD 1 Where reference is made to RGHI's data center, this means either (1) the Lincolnshire facility at 605 Heathrow Drive, (2) the Lake Forest backup data center at 1900 West Field Court, or (3) the Cloud Service provider selected to house certain infrastructure operations from time to time during the Term and migration. 2 Fees for 2021 are not yet finalized, and will be negotiated in good faith by RGHI and RCP during the course of 2020. + +Source: REYNOLDS CONSUMER PRODUCTS INC., S-1/A, 1/21/2020 + + + + + +Service Name Description of Service Term + +Monthly Fee (USD) - Commencement Date - 2020 + +Monthly Fee (USD) - 2021 G1.1.2 Citrix/Virtual Desktops VDI environment for remote application routing and access. $5,834 TBD + +G1.1.3 Collaboration - Email, Instant Messaging & Teams + +MS Exchange email Service, Outlook integration, MS teams, and Skype for Business Instant Messaging/Collaboration. $32,155 TBD + +G1.1.4 CRM RCP's instance of the MS Dynamics Customer Relationship Management System. $2,014 TBD + +G1.1.5 Easy Software Easy payments software suite for Accounts Payable management. $5,073 TBD + +G1.1.6 EDI Infrastructure Electronic data Interchange services for transactional interfacing with vendors and suppliers. $4,094 TBD + +G1.1.7 HP Dazel SAP printing control subsystem. $5,918 TBD + +G1.1.8 Hyperion/HFM Hyperion Financial Management system for consolidation and reporting. $4,028 TBD + +G1.1.9 JDA JDA suite of applications for planning and transportation management. $4,815 TBD + +G1.1.10 RightFax Electronic fax messaging system. $2,292 TBD + +G1.1.11 RPA/AA Automation Anywhere ecosystem for Robotic Process Automation. $11,861 TBD + +G1.1.12 Sabrix Thomson Reuters Sales and Use Tax calculation Engine. $7,597 TBD + +G1.1.13 SharePoint MS SharePoint environment for collaboration, file-sharing and intranet delivery. $9,649 TBD + +G1.1.14 Maintenance Connect Plant Maintenance system. $4,316 TBD + +Source: REYNOLDS CONSUMER PRODUCTS INC., S-1/A, 1/21/2020 + + + + + +Service Name Description of Service Term + +Monthly Fee (USD) - Commencement Date - 2020 + +Monthly Fee (USD) - 2021 G1.2 IT Service Category: Support Services + +General support services Overall services associated with delivery of general support from RGHI to RCP, including components such as: •   Administration of vendors •   Procurement •   Network management •   Infrastructure administration and management + +All services in group 24 months from the Commencement Date Termination can only be as per an agreed Migration Plan + +G1.2.1 Site Security Application Services Management of various site security systems, badge processing, video surveillance. $1,583 TBD + +G1.2.2 Desktop & Site Management Centralized management services for facility environments: patching, backup, package delivery, imaging, RF device support. $39,079 TBD + +G1.2.3 IT Security Provisioning Management of security provisioning for all applications and access, including SSO and AD. $18,479 TBD + +G1.2.4 IT Procurement Handling of procurement activities for existing and new vendors, including contract management, SOW completion, PR and PO processing. $9,233 TBD + +G1.2.5 IT Finance Payments, allocation processing, invoicing & reporting, and budgeting for existing and new vendors. $11,113 TBD + +G1.2.6 Voice and Cellular Phone Support General provisioning and management of VOIP services and CRU mobility with vendors. $12,137 TBD + +G1.2.7 Microsoft Tenant Management Interaction with the MS cloud services agency for MS tenancy management and administration in Azure. $15,637 TBD + +G1.2.8 AWS Tenant Management Interaction with the AWS cloud services agency and LemonGrass for AWS tenancy management and administration in Amazon. $36,835 TBD + +Source: REYNOLDS CONSUMER PRODUCTS INC., S-1/A, 1/21/2020 + + + + + +Service Name Description of Service Term + +Monthly Fee (USD) - Commencement Date - 2020 + +Monthly Fee (USD) - 2021 G1.2.9 LAN & WAN Management Provisioning, monitoring, troubleshooting and administration of all long distance and local network facilities, including AT&T (and other) MPLS, DMVPN, Routers and Switches, and Wi-Fi APs. $97,353 TBD + +G1.2.10 Governance Overall management of services delivered under this Agreement. $41,820 TBD + +G1.2.11 SAP Basis Support for SAP technical environment, configuration, and database management. $61,082 TBD + +G1.2.12 SQL Management Management of environments for miscellaneous MS SQL databases/systems. $32,720 TBD + +G1.2.13 Base Infrastructure All management and administration of core datacenter environments in support of all centralized applications and utility delivery, including all services associated with the Lincolnshire Data Center, Cloud Hosting environments, third party administration and support services. $220,775 TBD + +G1.3 IT Service Category: General Pass-thru / Variable Costs + +Variable and Pass-thru costs Service fees for consumption or license maintenance as levied by vendors to RGHI based on RCP utilization of such services or licenses. + +All services in group 24 months from the Commencement Date Termination will occur as services are contracted directly with RCP + +All services costs are pass- through of actual third- party costs incurred in providing the service + +G1.3.1 WAN Services - Site Network Vendor (AT&T and other) costs for usage of MPLS and ISP services. G1.3.2 Voice and Cellular Phone Service Local, Long Distance, & Mobile usage costs. + +Source: REYNOLDS CONSUMER PRODUCTS INC., S-1/A, 1/21/2020 + + + + + +Service Name Description of Service Term + +Monthly Fee (USD) - Commencement Date - 2020 + +Monthly Fee (USD) - 2021 G1.3.3 Multi-function device (MFD) Services Lexmark usage and consumables costs. + +G1.3.4 Hosting - Microsoft O365 - Microsoft usage + +G1.3.5 Licensing—Microsoft Microsoft license maintenance (SA) and subscriptions. + +G1.3.6 Licensing - SAP SAP license maintenance - R/3 + +G1.3.7 Licensing—SAP BI/MII SAP license maintenance - BI (Hana), MII (IFP) + +G1.3.8 Licensing— Oracle/HFM Oracle license maintenance for Hyperion Financial Manager. + +G1.3.9 Licensing - JDA JDA Transportation and Planning license maintenance fees. + +G1.3.10 Licensing - GEP GE Procurement system license fees. + +G1.3.11 Licensing - Novatus Novatus contract management system license fees. + +G1.3.12 Licensing - Thingworxs Thingworks (PTC) license fees (IFP). + +G1.3.13 Licensing - Winshuttle Winshuttle (MDM management) license fees. + +G1.3.14 Licensing - SpecRight Specright license fees. + +G1.3.15 Domain Names Domain name annual registration fees. + +G1.3.16 IT Procurement - Fees Hardware/Software/Services procured on behalf of RCP. + +G1.3.17 Licensing - Other Kronos, Minitab, & KnowBe4, plus other miscellaneous minor licenses maintenance fees. + +Source: REYNOLDS CONSUMER PRODUCTS INC., S-1/A, 1/21/2020 + + + + + +Service Name Description of Service Term Monthly Fee (USD) - Commencement Date - 2020 Monthly Fee (USD) - 2021 G1.4 IT Service Category: Project Management / IT Consulting3 + +G1.4.1 Discretionary Enhancements Any system changes or enhancements to the technical operating environment (excluding, for the avoidance of doubt, Migration Services described in G1.4.4) requested by RCP during the Term require agreement between RGHI and RCP. Provision of this Service is subject to the availability of internal resource within RGHI and agreement between the Parties regarding the scope of the changes/enhancements. Where this Service is used, the rates will be as follows: •   Project Manager at $150 / hour •   Senior Engineer at $200 / hour •   Junior Engineer at $150 / hour + +24 months from the Commencement Date + +Quoted hourly rate with respect to the particular service to be provided Plus the pass-through of actual third-party costs incurred in providing the service + +Quoted hourly rate with respect to the particular service to be provided Plus the pass- through of actual third- party costs incurred in providing the service + +G1.4.2 IT Consulting Services Provision of advice, guidance and recommendations on new services (excluding, for the avoidance of doubt, Migration Services described in G1.4.4), new technical solutions related to applications and infrastructure, etc. Provision of this Service is subject to availability of internal resource within RGHI and agreement between the Parties. Where this Service is used, the rates will be as follows: •   IT Consulting Services at $200 / hour + +24 months from the Commencement Date + +Quoted hourly rate with respect to the particular service to be provided Plus the pass-through of actual third-party costs incurred in providing the service + +Quoted hourly rate with respect to the particular service to be provided Plus the pass- through of actual third- party costs incurred in providing the service 3 RGHI shall provide the first 3,500 hours of internal labor pursuant to G1.4.1, G1.4.2, G1.4.3, and G1.4.4 at no charge; thereafter, the stated rates shall apply. + +Source: REYNOLDS CONSUMER PRODUCTS INC., S-1/A, 1/21/2020 + + + + + +Service Name Description of Service Term Monthly Fee (USD) - Commencement Date - 2020 Monthly Fee (USD) - 2021 G1.4.3 Project Management Services Provision of Project Management services and resources and technical resources required to deliver projects agreed between RGHI and RCP (excluding, for the avoidance of doubt, Migration Services described in G1.4.4). Provision of this Service is subject to availability of internal resource within RGHI and agreement between the Parties. Where this Service is used, the rates will be as follows: •   Project Manager at $150 / hour •   Senior Engineer at $200 / hour •   Junior Engineer at $150 / hour Any costs for engaging external resources will be passed through to RCP. + +24 months from the Commencement Date + +Quoted hourly rate with respect to the particular service to be provided Plus the pass-through of actual third-party costs incurred in providing the service + +Quoted hourly rate with respect to the particular service to be provided Plus the pass- through of actual third- party costs incurred in providing the service + +G1.4.4 Migration Services Project services to manage and execute the extraction of IT operations from the RLS managed environment(s) and enable RCP to exit this TSA, as defined in the TSA Migration Services in Section 2.1.(c). For the avoidance of doubt, this service includes all internal RGHI labor and third-party costs associated with project management and execution of all separation activities, and any license or technology acquisitions required to facilitate the establishment of RCP's new, stand-alone IT environment and the handover of same to RCP for future management. This Service cannot be terminated until such time as separation has concluded to the satisfaction of RGHI and RCP. + +24 months from the Commencement Date + +Quoted hourly rate with respect to the particular service to be provided Plus the pass-through of actual third-party costs incurred in providing the service + +Quoted hourly rate with respect to the particular service to be provided Plus the pass- through of actual third- party costs incurred in providing the service + +Source: REYNOLDS CONSUMER PRODUCTS INC., S-1/A, 1/21/2020 + + + + + +Service Name Description of Service Term + +Monthly Fee (USD) - Commencement Date - 2020 Monthly Fee (USD) -2021 G1.4.5 Crossover Services Provision of desktop support and core applications services for scenarios where people not transferred are required to temporarily assist in RCP to augment transferred peoples' expertise or capacity, notwithstanding both parties' intentions to have these areas of support self-sufficient inside RCP by commencement date. + +12 months from the Commencement Date + +No fee No fee + +Source: REYNOLDS CONSUMER PRODUCTS INC., S-1/A, 1/21/2020 + + + + + +Section G2: HR Services Service Name Description of Service Term Fee (USD) G2.1 General HR - Ancillary Services RGHI will be available to provide transition of support and agreements and provide support for meetings to share information and answer any questions with current vendors regarding current practices, including but not limited to support for separation of 401(K), H&W, and pension plans. The parties shall cooperate in good faith regarding preparation of 5500s and ACA reporting for plan year 2019, with responsibility for filings as follows: •   401(K) 5500s •   RGHI shall file for existing Employee Savings Plan (non-bargaining) and Employee Savings Plan for Pactiv Bargaining •   RCP shall file for Employee Savings Plan for Reynolds Bargaining and any new Company savings plans established as of the Commencement Date •   Pension and H&W 5500s •   RGHI shall file for Reynolds Services Inc. Group Benefit Plan, Pactiv Retirement Plan, Reynolds Services Inc. Group Benefit Plan for Bargaining Unit Employees, Pactiv Retiree Health & Welfare Plan, Reynolds Group Pension Plan, Evergreen Packaging Pension Plan •   RCP shall file for new Company plans established as of the Commencement Date •   ACA Reporting •   RCP shall coordinate filing + +12 months from the Commencement Date No fee + +G2.2 General HR - Administrative Services Administrative Assistant, HR Benefits will be available (50%) to provide services to RCP under a Secondment Agreement. Services will includes all as currently provided, including: preparation of informational bulletins related to benefits, vendor billing administration, tracking vendor performance guarantees, and general administrative duties. + +The earlier of (i) December 31, 2020 or (ii) the cessation of current Administrative Assistant's employment + +$3,300 per month Plus pass- through of actual third- party costs incurred in providing the service + +Source: REYNOLDS CONSUMER PRODUCTS INC., S-1/A, 1/21/2020 + + + + + +Service Name Description of Service Term Fee (USD) G2.3 Payroll Services - Systems and Support Provision of payroll services comprising: •   Management of the relationship and contract with ADP and Kronos •   Software and hosting access to Kronos •   Ongoing support of interface files with ADP and third-party vendors consistent with current practices, including management and oversight of existing vendor feeds •   Access to ADP and Kronos so that RCP may undertake: •   Processing salaried and hourly payrolls •   New hire reporting •   Year-end tax reporting and preparation for employees (if applicable) •   Payroll tax return preparation •   Access to HRIS reporting capabilities (where applicable and with existing vendors/feeds) RCP will be responsible for generating their own reports from the payroll systems. RGHI and its Affiliates will not permit the payroll provider to create any additional programmed reports that are not part of the menu of standard reports available to RGHI. + +December 31, 2020 $11,000 per month $29,150 per month for ADP $3,700 per month for Kronos software (hosting fees included in Section G1) Plus pass- through of actual third- party costs incurred in providing the service + +G2.4 Payroll Services - Consulting/Project Management Services + +Provision of access to RGHI Director of Payroll & HRIS and Senior HRIS Payroll Analyst in relation to carve-out efforts to establish RCP instance of ADP. + +December 31, 2020 $100 per person / per hour Plus pass- through of actual third- party costs incurred in providing the service + +G2.5 General HR -Employment Services Employment of current Director, Supplier Product and Process Quality - Europe & Asia, including, without limitation, provision of human resources support, payroll processing, and benefits coverage. + +The earlier of (i) the transfer of Director, Supplier Product and Process Quality - Europe & Asia to RCP or (ii) March 31, 2020 + +Pass-through of actual costs and third-party costs incurred in providing the service + +Source: REYNOLDS CONSUMER PRODUCTS INC., S-1/A, 1/21/2020 + + + + + +Section G3: Financial Services Service Name Description of Service Term Fee (USD) G3.1 Financial Services - Technical Accounting Provision of support and handover services for technical accounting including: •   Assistance with accounting guidance in relation to specific transactions (i.e. lease review, casualty loss, customer contract review, restructures, etc.), including research (consistent with past practices) for review by RCP management and auditors + +12 months from the Commencement Date $125 per person / per hour Plus pass-through of actual third-party costs incurred in providing the service + +G3.2 Financial Services - Lease Administration Provision of support and handover services for lease administration including: •   Lease accounting and lease administration services consistent with current practices and procedures, including but not limited to: •   Mass data uploads leveraging ETL templates into Costar system (10+ lease records) •   Upload of discount rates (as prepared by RCP) •   Preparation of monthly and quarterly reports •   System controls in relation to RGHI instance of Costar, backup, exchange rates review, facilitation of user security review, cost center/hierarchy maintenance, etc. •   Assistance with system issue resolution •   Copies of all records, standard reports, and schedules, etc. from the Costar system for purposes of adoption of the lease accounting standard + +The earlier of (i) 12 months from the Commencement Date or (ii) the date RCP obtains its own instance of Costar + +$125 per person / per hour $1,235 per month for Costar Plus pass-through of actual third-party costs incurred in providing the service + +G3.3 Financial Services - Benefits Reporting Support4 + +Administration, execution, and handover of financial reporting and accounting services for reports required for financial reporting related to medical and benefits costs including vendor cost tracking, and other HR/benefits related accounting matters consistent with past practices. + +18 months from the Commencement Date $3,365 per month Plus pass-through of actual third-party costs incurred in providing the service 4 Process RE quarterly true-ups will change during the Term from reconciling claims by headcount to where incurred and will reconcile back to the Commencement Date. + +Source: REYNOLDS CONSUMER PRODUCTS INC., S-1/A, 1/21/2020 + + + + + +Service Name Description of Service Term Fee (USD) G3.4 Financial Services - Treasury Administration Handover Services + +Reasonable provision of treasury administration handover services, including: •   Assistance with transitioning signatories, online access and other bank account transition considerations if required (including but not limited to establishment of new banking platforms)* •   Assistance with transition of administration of letters of credit and any other assumed indebtedness* •   Assistance with transition of corporate credit card programs administration •   Assistance with completion of development of the structure and documentation of intercompany loan agreements that are in process at the time of the Commencement Date •   Models and historical cash management reports/materials •   Assistance with cash settlements, movements related to trade balances, intercompany loans, dividends, cash forecasting, and banking platforms •   Assistance with development of daily cash report preparation processes •   Assistance with development of escheatment reporting and filing processes •   Training on review of bank-generated reports •   Assistance with transition of wire transfer administration (i.e. authorization for tokens) •   Backup assistance with wire transfer administration and approvals •   Support for day to day cash management activities consistent with past practices RGHI and RCP shall work together in good faith to finalize transition of the services denoted with an asterisk (*) above within 3 months from the Commencement Date. + +12 months from the Commencement Date $95 per person / per hour Plus pass-through of actual third-party costs incurred in providing the service + +Source: REYNOLDS CONSUMER PRODUCTS INC., S-1/A, 1/21/2020 + + + + + +Service Name Description of Service Term Fee (USD) G3.5 Financial Services - Reporting Applications Support Services + +Provision of access to and/or application support services for FIS Integrity. Service is subject to ability to apply security so RCP cannot view or access RGHI data in those systems. + +12 months from the Commencement Date $10,100 per month Plus pass-through of actual third-party costs incurred in providing the service + +G3.6 Financial Services - External Reporting5 RGHI External Reporting team will be available to provide background support and consulting services related to RCP's external reporting requirements. + +18 months from the Commencement Date $$22,500 per month Plus pass-through of actual third-party costs incurred in providing the service + +G3.7 Financial Services - Compliance Advisory Services + +Provision of support services of RGHI Senior Compliance Manager related to SAP access and security risks (SOX 404). The earlier of (i) 12 months from the Commencement Date or (ii) the cessation of current Senior Compliance Manager's employment + +$8,000 per month Plus pass-through of actual third-party costs incurred in providing the service + +G3.8 Financial Services - SOX Compliance In connection with RCP's obligation to comply with the Sarbanes-Oxley Act of 2002, provision of reasonable support and performance of key controls related to financial reporting as agreed between the Parties. + +24 months from the Commencement Date $200 per person / per hour Plus pass-through of actual third-party costs incurred in providing the service 5 RCP needs to obtain its own instance of Wdesk (or similar system) to prepare and file annual and quarterly filings as of the Commencement Date. + +Source: REYNOLDS CONSUMER PRODUCTS INC., S-1/A, 1/21/2020 + + + + + +Service Name Description of Service Term Fee (USD) G3.9 Treasury Services - FBAR Reporting Provision of Foreign Bank and Financial Accounts ("FBAR") reporting services. 12 months from the Commencement Date $80 per person / per hour Plus pass-through of actual third-party costs incurred in providing the service + +G3.10 Treasury Services - Hedging Provision of support and handover services related to commodity hedging activities, including: •   Determining hedge quantities and timing •   Execution of hedging trades in Kiodex •   Tracking open hedge positions •   Facilitate provision of month-end journal entries + +12 months from the Commencement Date $105 per person / per hour $8,500 per month for Kiodex Plus pass-through of actual third-party costs incurred in providing the service + +Source: REYNOLDS CONSUMER PRODUCTS INC., S-1/A, 1/21/2020 + + + + + +Section G4: Internal Audit and Tax Services Service Name Description of Service Term Fee (USD) G4.1 Audit and IT Audit Handover Services Provision of audit handover services, including information relating to IT internal audit processes and procedures of RCP. Reasonable provision of: •   Training of new RCP staff and existing documentation for all relevant processes •   Assistance, related to the services included in this section •   Transition handover support as required + +12 months from the Commencement Date $175 per person / per hour Plus pass- through of actual third-party costs incurred in providing the service + +G4.2 Tax Services - Direct (US and Canada) Provision of support services for tax accounting and direct tax filings, including preparation and filing of federal and state tax returns. For the avoidance of doubt, preparation and filing of returns may be completed by a third-party service provider consistent with current practice. Reasonable handover tax services, including: •   The transfer by Sellers of any and all historical information and explanations necessary for Transferred Entities to completely and accurately prepare and file the tax returns related to post-Closing period. •   Identification of all information sources, including information gathering formats, for the collection of information required for Transferred Entities to prepare and file the tax returns related to post-Closing periods. •   Providing continued support in providing historical documentation and explanations in relation to tax audits currently in process. •   Providing working papers and support related to accounting for income taxes. •   Providing historical transfer pricing studies and working papers. •   Assistance with registrations and/or electronic payment registrations as needed. + +24 months from the Commencement Date $100,275 per month Pass-through of actual third-party costs incurred in providing the service + +Source: REYNOLDS CONSUMER PRODUCTS INC., S-1/A, 1/21/2020 + + + + + +Service Name Description of Service Term Fee (USD) G4.3 Tax Services - Indirect (US and Canada) Provision of support services for indirect tax filings, including preparation and filing of Sales and Use, VAT, Personal, and Property tax returns. For the avoidance of doubt, preparation and filing of returns may be completed by a third-party service provider consistent with current practice. Reasonable handover services, including: •   Providing copies of all existing documentation required for Property tax and Sales and Use tax compliance, including resale and manufacturer's exemption certificates as well as continued services in support of processes to obtain, review, and maintain necessary documentation. •   Facilitating and assisting in the creating of documentation required for tax compliance. •   The transfer by Sellers of any and all historical information and explanations necessary for Transferred Entities to completely and accurately prepare and file the tax returns related to post-Closing period. •   Identification of all information sources, including information gathering formats, for the collection of information required for Transferred Entities to prepare and file the tax returns related to post-Closing periods. •   Providing continued support in providing historical documentation and explanations in relation to tax audits currently in process. •   Assistance with registrations and/or electronic payment registrations as needed. Providing working papers to support calculations related to the accounting for income taxes. + +24 months from the Commencement Date $13,285 per month Plus pass- through of actual third-party costs incurred in providing the service + +G4.4 Tax Services - China Provision of handover services related to returns and filings with retained third-party service provider. 12 months from the Commencement Date $140 per person / per hour Plus pass- through of actual third-party costs incurred in providing the service + +Source: REYNOLDS CONSUMER PRODUCTS INC., S-1/A, 1/21/2020 + + + + + +Service Name Description of Service Term Fee (USD) G4.5 Tax Services - Audit Support Provision of support for state and federal income tax audits, including: •   Providing documentation and explanations to the examiners •   Preparing necessary paperwork related to any filings or settlements + +24 months from the Commencement Date $175 per person / per hour Plus pass- through of actual third-party costs incurred in providing the service + +G4.6 Tax Services - Transfer Pricing Consulting Services + +Provision of support and handover services for transfer pricing compliance and other matters related to RCP Canada/US transactions and sales services. Transfer Pricing support in connection with audits and Country by Country (CbC) and customs reporting will be available on an ad hoc basis and charged at an hourly rate. + +The earlier of (i) 24 months from the Commencement Date or (ii) the cessation of current Director of Transfer Pricing's employment + +$1,500 per month $140 per person / per hour for ad hoc support Plus pass- through of actual third-party costs incurred in providing the service + +Source: REYNOLDS CONSUMER PRODUCTS INC., S-1/A, 1/21/2020 + + + + + +Section G5: Procurement Services Service Name Description of Service Term Fee (USD) G5.1 Procurement - Support and Handover Services Provision of support and handover services to assist RCP (consistent with past practices) in obtaining supply and or service agreements, including assisting with negotiations (which shall not include legal advice, except to the extent included pursuant to the legal transition services schedule) in relation to: •   Small parcel freight (UPS, FedEx) •   Energy (i.e. natural gas, electricity, etc.) •   ISN •   IT multifunction devices (printers, etc.) •   Raw materials - Poly (i.e. $110M+ PS, $50M+ PP, $40M+ PET, $20M Master Batch and Fillers) •   Raw materials - Packaging (corrugate, pallets, poly bags, molded fiber and related chemicals) •   MRO •   IT procurement •   Vendor mall administration (i.e. support of Ariba Catalogues) •   GEP IT extract + +12 months from the Commencement Date $100 per person / per hour Plus the pass- through of actual third-party costs incurred in providing the service + +G5.2 Procurement - Freight Procurement Services Provision of freight procurement services to arrange shipments from RCP vendors to RCP facilities (consistent with current practices) in accordance with the processes and procedures set forth in the Warehousing and Freight Services Agreement between Pactiv LLC and Reynolds Consumer Products LLC effective November 1, 2019. + +12 months form the Commencement Date Services billed through the Warehousing and Freight Services Agreement dated November 1, 2019 + +Source: REYNOLDS CONSUMER PRODUCTS INC., S-1/A, 1/21/2020 + + + + + +Section G6: Travel and Expense Services Service Name Description of Service Term Fee (USD) G6.1 Travel and Expense Services - Concur & Travel Booking Assistance + +Provision of: •   Access to discounted airline, hotel, and rental car rates •   Services relating to travel booking assistance and ticket issuance by World Travel •   Access to the Concur system for travel booking, filing expense reports, processing and payment of expense reports, and reimbursement for cash expenses + +12 months from the Commencement Date + +Monthly Fee: $19,000 Plus pass-through of actual third-party costs incurred in providing the service + +G6.2 Travel and Expense Services - Corporate Travel Card Administration of corporate travel credit card program and purchasing "ProCard" credit card program for cards provided by HSBC and used by RCP employees solely for business travel and business expenses. Services include: •   Procurement of new cards and cancellation of existing cards •   Facilitating changes to credit limits •   Audits of employee expense reports for compliance with RCP's policies using current audit tools and practices •   Other services consistent with current practices RCP employees may continue to use their current HSBC credit cards under existing rules and limits. At or before the end of the Term, all cards must either be transferred to accounts established by RCP with HSBC or cancelled. + +12 months from the Commencement Date + +Monthly Fee: $7,000 Plus pass-through of actual third-party costs incurred in providing the service (including, for the avoidance of doubt, all charges incurred on the credit cards) + +Source: REYNOLDS CONSUMER PRODUCTS INC., S-1/A, 1/21/2020 + + + + + +Section G7: Trade Compliance Service Name Description of Service Term Fee (USD) G7.1 Trade Compliance Handover Services Provision of access to RGHI's and its Affiliates' trade compliance team who will provide ongoing support, background information and handover support services for the current trade compliance function, including: •   Assistance in data handover of historical import and export transactions and classification databases •   Familiarization with trade compliance procedures, in particular: •   Export controls •   Transition supplier communication regarding Importer Security Filings •   Reporting and filing services, but will not require Sellers to carry out reporting or filing on behalf of the Transferred Entities •   Understanding of current issues, including routine filings, prior disclosures, protests, remediations and assistance declarations •   Coordination of shipments with brokers (import and export) •   Classifications •   Preparation of customs documentation •   Denied party screening •   Monthly import and export reports •   FTA support + +12 months from the Commencement Date + +No fee Plus pass- through of actual third-party costs incurred in providing the service + +Source: REYNOLDS CONSUMER PRODUCTS INC., S-1/A, 1/21/2020 + + + + + +Section G8: Legal and Other Regulatory Support Services Service Name Description of Service Term Fee (USD) G8.1 General Services - Legal Support Provision of support and handover services with respect to all legal services provided by RGHI and its Affiliates', including: •  Information, relevant documents and knowledge transfer related to the legal matters and legal functions, including: •  in-house legal services, including advisory, regulatory, reporting and filing services •  employment and labor relations •  Review of contracts relating to Information Technology, real estate, general procurement, and advertising and intellectual property matters •  Ongoing information and assistance in connection with all other matters for which employees of RGHI or its Affiliates were providing legal services prior to the Commencement Date •  Access to contract management database (Conga Novatus) + +24 months from the Commencement Date $190 per person / per hour for lawyers and $70 per person / per hour for paralegals Plus pass-through of actual third-party costs incurred in providing the service (i.e. external legal firm fees to compile data for RCP) + +G8.2 General Services - Intellectual Property Provision of handover and support services related to RCP's intellectual property portfolio, including: •  Facilitation of ongoing portfolio maintenance (i.e. renewal decisions and required filings) •  Management and oversight of patent and trademark prosecution activities (i.e. office action responses) •  Filing new registrations and applications consistent with past practices •  Assistance, information and knowledge transfer related to the legal matters and legal functions of RCP, including transferring to RCP, in such electronic or hard copy format as reasonably requested by RCP, any and all documentation in the possession of RGHI, its Affiliates or their outside legal counsel, relating to the prosecution, enforcement, registration and application of any owned intellectual property, including all information in any intellectual property docket maintained by RGHI, its Affiliates or their outside legal counsel + +The earlier of (i) 24 months from the Commencement Date or (ii) the cessation of current Administrator of IP Operations/Paralegal's employment + +$190 per person / per hour for lawyers and $70 per person / per hour for paralegals Plus pass-through of actual third-party costs incurred in providing the service (i.e. external legal firm fees to compile data for RCP) + +Source: REYNOLDS CONSUMER PRODUCTS INC., S-1/A, 1/21/2020 + + + + + +Service Name Description of Service Term Fee (USD) G8.3 General Services - Corporate Secretarial Provision of corporate secretarial duties and government filing assistance. To the earlier of (i) 24 months from the Commencement Date or (ii) the cessation of current Corporate Governance Paralegal's employment + +$190 per person / per hour for lawyers, $45 per hour for Corporate Governance Paralegal Plus pass-through of actual third-party costs incurred in providing the service (i.e. external Co-Sec/legal firm fees) + +G8.4 General Services - SEC Reporting and Compliance + +RGHI Legal Counsel will be available to provide assistance and support related to reporting and filing requirements with the U.S. Securities and Exchange Commission and corporate governance matters. + +24 months from the Commencement Date $10,000 per month Plus pass-through of actual third-party costs incurred in providing the service + +G8.5 General Services - Regulatory Provision of handover services and support related to compliance with FDA regulations, food-contact product rules, product compliance, and other regulatory and compliance schemes. + +12 months from the Commencement Date No fee + +Source: REYNOLDS CONSUMER PRODUCTS INC., S-1/A, 1/21/2020 + + + + + +Service Name Description of Service Term Fee (USD) G8.6 General Services - Real Estate Provision of support and handover services related to real estate administration (consistent with past practices), including but not limited to: •  Coordination of insurance, environmental, and legal functions to review leases, prepare annual reports, etc. •  Reconciliation of annual lease expenses •  Assistance with resolution of facility issues (i.e. repairs, etc.) •  Review and monitoring of tenant improvement allowances •  Assistance with establishing new facilities or closing existing facilities •  Support for year-end reporting + +12 months from the Commencement Date $1,630 per month Plus pass-through of actual third-party costs incurred in providing the service + +Source: REYNOLDS CONSUMER PRODUCTS INC., S-1/A, 1/21/2020 + + + + + +EXHIBIT B + +Reverse Transition Services + +Section GR1: IT Service Name Description of Service Term Fee (USD) GR1.1 IT - Crossover Services Provision of desktop support and core applications services for scenarios where people transferred are required to temporarily assist in RGHI to augment non-transferred peoples' expertise or capacity, notwithstanding both parties' intentions to have these areas of support self-sufficient inside RGHI by commencement date. + +12 months from the Commencement Date No fee + +Source: REYNOLDS CONSUMER PRODUCTS INC., S-1/A, 1/21/2020 + + + + + +Section GR2: HR Service Name Description of Service Term Fee (USD) GR2.1 General HR - Ancillary Services RCP will be available to provide transition of support and agreements and provide support for meetings to share information and answer any question with current vendors regarding current practices, including but not limited to support for separation of 401(K), H&W, and pension plans. The parties shall cooperate in good faith regarding preparation of 5500s and ACA reporting for plan year 2019, with responsibility for filings as follows: •  401(K) 5500s •  RGHI shall file for existing Employee Savings Plan (non-bargaining) and Employee Savings Plan for Pactiv Bargaining •  RCP shall file for Employee Savings Plan for Reynolds Bargaining and any new Company savings plans established as of the Commencement Date •  Pension and H&W 5500s •  RGHI shall file for Reynolds Services Inc. Group Benefit Plan, Pactiv Retirement Plan, Reynolds Services Inc. Group Benefit Plan for Bargaining Unit Employees, Pactiv Retiree Health & Welfare Plan, Reynolds Group Pension Plan, Evergreen Packaging Pension Plan •  RCP shall file for new Company plans established as of the Commencement Date •  ACA Reporting •  RCP shall coordinate filing for 2019 plan year + +12 months from the Commencement Date No fee + +GR2.2 General HR - ACA and HSA Training Provision of handover and support services related to ACA reporting and HSA funding and reporting. 12 months from the Commencement Date No fee Plus pass-through of actual third-party costs incurred in providing the service + +Source: REYNOLDS CONSUMER PRODUCTS INC., S-1/A, 1/21/2020 + + + + + +Section GR3: Regulatory Service Name Description of Service Term Fee (USD) G3.1 General Services - Regulatory Provision of handover services and support related to compliance with FDA regulations, food-contact product rules, product compliance, and other regulatory and compliance schemes. + +12 months from the Commencement Date No fee + +Source: REYNOLDS CONSUMER PRODUCTS INC., S-1/A, 1/21/2020 + + + + + +Section GR4: Procurement Service Name Description of Service Term Fee (USD) GR4.1 Procurement Handover Services Provision of handover services to assist RGHI in establishing relationships with vendors for the following services: •  Fleet program •  Office supplies •  T&E (including rental car, airline, World Travel, and Concur) Provision of purchasing support and handover services for poly bags. + +12 months from the Commencement Date $100 per person / per hour Plus pass-through of actual third-party costs incurred in providing the service + +Source: REYNOLDS CONSUMER PRODUCTS INC., S-1/A, 1/21/2020 + + + + + +Section GR5: Trade Compliance Service Name Description of Service Term Fee (USD) GR5.1 Trade Compliance Handover Services Provision of access to RCP's and its Affiliates' trade compliance team who will provide ongoing support, background information and handover support services for the current trade compliance function, including: •  Assistance in data handover of historical import and export transactions and classification databases •  Familiarization with trade compliance procedures, in particular: o   Export controls o   Transition supplier communication regarding Importer Security Filings o   Reporting and filing services, but will not require Sellers to carry out reporting or filing on behalf of the Transferred Entities o   Understanding of current issues, including routine filings, prior disclosures, protests, remediations and assistance declarations •  Coordination of shipments with brokers (import and export) •  Classifications •  Preparation of customs documentation •  Denied party screening •  Monthly import and export reports •  FTA support + +12 months from the Commencement Date No fee Plus pass-through of actual third-party costs incurred in providing the service + +Source: REYNOLDS CONSUMER PRODUCTS INC., S-1/A, 1/21/2020 + + + + + +EXHIBIT C + +Service Coordinators + +To be designated in writing from time to time by each party. + +Source: REYNOLDS CONSUMER PRODUCTS INC., S-1/A, 1/21/2020 \ No newline at end of file diff --git a/full_contract_txt/RgcResourcesInc_20151216_8-K_EX-10.3_9372751_EX-10.3_Franchise Agreement.txt b/full_contract_txt/RgcResourcesInc_20151216_8-K_EX-10.3_9372751_EX-10.3_Franchise Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..76627ed05b83fa9a07ae8a3c6133ae24ea52fbac --- /dev/null +++ b/full_contract_txt/RgcResourcesInc_20151216_8-K_EX-10.3_9372751_EX-10.3_Franchise Agreement.txt @@ -0,0 +1,71 @@ +Exhibit 10.3 + +GAS FRANCHISE AGREEMENT + +THIS AGREEMENT ("Agreement"), made and entered into this 17th day of November, 2015, by and between the TOWN OF VINTON, VIRGINIA, a Virginia municipal corporation ("Grantor"), and ROANOKE GAS COMPANY, a Virginia corporation ("Grantee"). + +WHEREAS, Grantor has reviewed the proposal for a Gas Franchise of Grantee; and + +WHEREAS, Grantor, at a duly authorized and regular meeting of its Town Council, did vote to grant a renewal of the Gas Franchise to Grantee pursuant to provisions of the State Code and Town Charter. + +NOW, THEREFORE, in consideration of said grant of renewal of the Gas Franchise, the parties agree as follows: + +1. GRANT. Grantor hereby grants to Grantee and Grantee hereby accepts a franchise to construct, reconstruct, operate, maintain, repair, and extend a Gas Distribution System within Grantor's Territorial Limits in accordance with the terms and conditions set forth below ("Franchise"). The Franchise is granted pursuant to Grantor's Franchise Ordinance (Ordinance No. 967), adopted November 17, 2015, ("Ordinance"), which is incorporated by reference herein, including any applicable definitions. + +2. TERM. The term of the Franchise shall be twenty (20) years, commencing on January 1, 2016. + +3. FRANCHISE FEE. + +(a) Grantee shall pay to Grantor a Franchise Fee which shall be calculated pursuant to this Section. It is understood that Grantee has or will enter into franchise agreements with the City of Roanoke ("Roanoke") and the City of Salem ("Salem") and the Town of Vinton ("Vinton") (Grantor, Roanoke and Salem being hereinafter sometimes collectively referred to as the "localities" and singularly as a "locality") with fee provisions identical to this one, and that the total annual Franchise Fee to be paid to the three localities in aggregate is $98,196 for calendar year 2016 ("base year total annual Franchise Fee"). Grantor's Franchise Fee shall be a percentage share of the base year total annual Franchise Fee, which shall be determined on a pro rata basis according to its percentage share of the total dollar value of Grantee's gas sales occurring within the localities during the calendar year. For each calendar year of the Franchise, each locality's percentage share shall be determined by the following formula: + +total dollar value of Grantee's gas sales within Locality's percentage share = the Territorial Limits of the locality total dollar value of Grantee's gas sales in the three localities + +For calendar year 2016, the Franchise Fee shall be paid to Grantor on or before March 31, 2017. + +1 + +Source: RGC RESOURCES INC, 8-K, 12/16/2015 + + + + + +(b) For each succeeding calendar year during the term of this Franchise, the total annual Franchise Fee paid by Grantee to the localities shall be the base year total annual Franchise Fee increased by three (3) percent compounded annually over the term of the Franchise. For each calendar year during the term of this Franchise, Grantor's percentage share shall be determined pursuant to this Section, and paid to Grantor on or before March 31 of the succeeding calendar year. + +4. BUSINESS OFFICE. Grantee shall during the term of this Franchise maintain at least one business office within the Territorial Limits of Grantor. Such office shall be open at least forty (40) hours per week for the conduct of business between Grantee and its customers. + +5. NONDISCRIMINATION. Grantee shall not discriminate on the basis of race, religion, color, sex, national origin, age, disability, or any other basis prohibited by state law relating to discrimination in employment, except where there is a bona fide occupational qualification reasonably necessary to the normal operation of the Grantee. + +6. NOTICE. All notices required under this Agreement or the Ordinance shall be in writing and shall be deemed validly given, unless otherwise required, when sent by certified mail, return receipt requested, or by a nationally recognized overnight courier, addressed as follows (or any other address the party to be notified may have designated to the sender by like notice): + +Grantor: Grantee: + +Town of Vinton Roanoke Gas Company Attention: Town Manager Attention: President 311 S. Pollard Street 519 Kimball Avenue, N.E. Vinton, Virginia 24179 P.O. Box 13007 Roanoke, Virginia 24030 + +The parties may, by notice given under this Section, designate such other addresses as they may deem appropriate for the receipt of notices under this Agreement. + +7. EFFECTIVE DATE. The effective date of the Franchise will be January 1, 2016. + +SIGNATURES APPEAR ON FOLLOWING PAGES + +2 + +Source: RGC RESOURCES INC, 8-K, 12/16/2015 + + + + + +IN WITNESS WHEREOF, the parties hereto have signed this Agreement by their authorized representatives. + +WITNESS: ROANOKE GAS COMPANY + +/s/ Diane L. Conner By /s/ John S. D'Orazio John S. D'Orazio, President and CEO Diane L. Conner, Assistant to CEO 12/14/2015 Printed Name and Title + +WITNESS: TOWN OF VINTON, VIRGINIA + +/s/ Susan N. Johnson By /s/ Christopher S. Lawrence Christopher S. Lawrence, Town Manager Susan N. Johnson, Town Clerk Printed Name and Title + +3 + +Source: RGC RESOURCES INC, 8-K, 12/16/2015 \ No newline at end of file diff --git a/full_contract_txt/RitterPharmaceuticalsInc_20200313_S-4A_EX-10.54_12055220_EX-10.54_Development Agreement.txt b/full_contract_txt/RitterPharmaceuticalsInc_20200313_S-4A_EX-10.54_12055220_EX-10.54_Development Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..bb13b5a854d3492c1fffbd1f9da53ea99e0684d9 --- /dev/null +++ b/full_contract_txt/RitterPharmaceuticalsInc_20200313_S-4A_EX-10.54_12055220_EX-10.54_Development Agreement.txt @@ -0,0 +1,415 @@ +Exhibit 10.54 DISTRIBUTION AND DEVELOPMENT AGREEMENT This Distribution and Development Agreement (this "Agreement") is made and entered into as of May 1, 2016 by and between Sekisui Diagnostics, LLC and its Affiliates, a Delaware limited liability company with principal offices at 4 Hartwell Place, Lexington, Massachusetts 02421 ("Sekisui"), and Qualigen, Inc. and its Affiliates, a Delaware corporation with principal offices at 2042 Corte Del Nogal, Carlsbad, California 92011 ("Qualigen" and together with Sekisui, each a "Party" and together the "Parties"). WHEREAS, Qualigen is engaged in the manufacture, supply and development of certain clinical rapid diagnostic test devices and controls; and WHEREAS, Qualigen wishes to appoint Sekisui as its exclusive distributor for such products in the Territory (as defined below); and WHEREAS, Sekisui wishes to be appointed as the exclusive distributor of such products and to fund the development of certain future products. NOW, THEREFORE, in consideration of the mutual covenants hereinafter contained, the parties hereto agree as follows: 1. Definitions 1.1. Adverse Event shall mean an incident in which the Product was alleged to have caused or contributed to the death or serious injury of a patient or operator and would require submitting a Medical Devices Report to the FDA (as hereinafter defined) as per 21 CFR 803, or a similar report to a Competent Authority (as hereinafter defined) as per Vigilance Guidance MEDDEV 2.12-1. 1.2. Affiliate shall mean, (i) with respect to Qualigen, any corporation or other form of business organization, which directly or indirectly owns, controls, is controlled by, or is under common control with Qualigen, and (ii), with respect to Sekisui, shall mean Sekisui Diagnostics (UK) Ltd., Sekisui Diagnostics PEI, Inc., SEKISUI MEDICAL CO., LTD., and Sekisui Diagnostics GmbH. An entity shall be regarded as being in control of another entity if the former entity has the direct or indirect power to vote more than fifty percent (50%) of the outstanding voting securities (or other ownership interest for a business organization other than a corporation) of that entity, or the direct or indirect ability to direct or cause the direction of the general management and policies of the other entity. 1.3. Applicable Markets shall mean the United States, Canada, the European Union, Japan and other additional geographies that are added from time to time at the request of Sekisui, but only to the extent that it is commercially reasonable for Qualigen to expand to such additional geographies. 1.4. Available Margin is defined on Exhibit A. 1.5. Business Plan shall mean the business plan attached as Exhibit B hereto, which business plan may be amended from time to time by mutual agreement of Qualigen and Sekisui. 1.6. COGS is defined on Exhibit A. + +Source: RITTER PHARMACEUTICALS INC, S-4/A, 3/13/2020 + + + + + +1.7. Competent Authority shall mean the governmental authority in a member state of the European Union which has competence in relation to the Products. 1.8. Development Plan shall mean the development plan attached as Exhibit C hereto, which development plan may be amended from time to time by mutual agreement of Qualigen and Sekisui. 1.9. Effective Date shall mean May 1, 2016. 1.10. European Union shall mean the countries in Europe that are under the CE mark regulatory regime. 1.11. Exclusivity Period shall mean the period from the Effective Date until December 31, 2018. 1.12. FDA shall mean the U.S. Food and Drug Administration or any successor agency. 1.13. Health Canada shall mean the department of the government of Canada with responsibility for national public health. 1.14. Intellectual Property Rights means all intellectual property rights in any jurisdiction worldwide, including, without limitation: (a) Patent Rights; (b) rights associated with works of authorship including copyrights, copyright applications, and copyright registrations; (c) rights relating to the protection of trade secrets, know-how or confidential information; and (d) rights in any trade names, trademarks, service marks, domain names, logos, trade dress and brand features. 1.15. Net Revenue is defined on Exhibit A. 1.16. Patent Rights means all patents, patent applications and inventions on which patent applications are filed and all patents issuing therefrom worldwide, together with any extensions, registrations, confirmations, reissues, continuations, divisionals, continuations- in-part, re-examination certificates, substitutions or renewals, supplemental protection certificates, term extensions (under applicable patent law or other law), provisional rights and certificates of inventions. 1.17. Potentially Serious Complaint shall mean any information coming to the notice of Qualigen or Sekisui which might relate to a Serious Incident (as hereinafter defined), or to a significant lapse in the quality of the Products, or might lead to significant adverse public or media comment, or otherwise significantly, adversely affect the reputation or business of Sekisui or Qualigen. 1.18. Products shall mean all of Qualigen's current and future products, including without limitation those listed on Exhibit D, for sale under the trade names listed with such products, including any improvements thereto. 1.19. Qualigen Retained Customers shall mean certain of Qualigen's existing direct sales customers, all as listed on Exhibit E. 1.20. Regulatory Approval shall mean the approval of the applicable Regulatory Authority required for the promotion, marketing, distribution and/or sale of the Products in any territory in which they are being sold, including any Product registration or license, and any supplement, amendment or variation thereto, required before the commencement of commercial sales of the Products in such territory, and export and import approvals for the Products. 2 + +Source: RITTER PHARMACEUTICALS INC, S-4/A, 3/13/2020 + + + + + +1.21. Regulatory Authorities shall mean the FDA, each Competent Authority, Health Canada and the Japanese Pharmaceuticals and Medical Devices Agency. 1.22. Revenue Affiliate shall mean any entity of which Sekisui has the direct or indirect power to vote more than fifty percent (50%) of the outstanding voting securities (or other ownership interest for a business organization other than a corporation) of that entity, or the direct or indirect ability to direct or cause the direction of the general management and policies of that entity. 1.23. Sale Transaction shall mean (i) any transaction in which Qualigen, Qualigen's business or control of Qualigen is acquired, (ii) any license, sale, lease, transfer, or other disposition, in a single transaction or series of related transactions, of all or substantially all of Qualigen's assets other than in the ordinary course of business, (iii) any sale of a majority of the outstanding shares of capital stock of Qualigen, (iv) any sale or license of any rights to any Qualigen products, now or hereafter existing, other than in the ordinary course of business, (v) any liquidation or dissolution of Qualigen, (vi) any similar transaction resulting in a change of control of Qualigen, or (vii) any of the foregoing with respect to any now or hereafter existing subsidiary of Qualigen which holds, on a consolidated basis, all or substantially all of Qualigen's assets (i.e., of the assets of Qualigen and all its Affiliates considered together). 1.24. Serious Incident shall mean an incident involving the Products, which is reportable to a Competent Authority and as defined in Section 5 of Annex III of the IVD Directive, and the European Commission Medical Devices Vigilance Guidelines 2.12-1 or such other Guidelines as may be issued from time to time. 1.25. Territory shall mean worldwide excluding Qualigen Retained Customers. 1.26. Third Party shall mean a party other than Sekisui or Qualigen or any Affiliate of Sekisui or Qualigen. 2. Appointment and Term 2.1. Appointment. Qualigen hereby appoints Sekisui, and Sekisui accepts the appointment to act on an exclusive basis pursuant to the terms and conditions of this Agreement, as a distributor for the sale of the Products in the Territory. Sekisui shall be permitted to appoint sub-distributors in the Territory (including any current Qualigen distributors) with the approval of Qualigen, not to be unreasonably withheld or delayed. Sekisui shall purchase the Products exclusively from Qualigen, and Qualigen shall supply the Products exclusively to Sekisui, in each case for the Territory. Qualigen shall assign to Sekisui Qualigen's agreements with Qualigen's current distributors (such that such current Qualigen distributors shall become Sekisui subdistributors), each of which is set forth on Schedule 2.1 hereto; if any of such agreements do not allow such assignment and the current distributor declines to consent to such an assignment to Sekisui, Qualigen shall (if Sekisui so requests) act pursuant to such agreement to terminate such agreement. 2.2. Term. The initial term of this Agreement shall commence on the Effective Date and shall continue for a period of five (5) years unless earlier terminated pursuant to Section 14 hereof (the "Term"). The initial term of this Agreement and any renewal term thereof shall be automatically extended at the end of the initial term and any renewal term thereof for an additional one (1) year period unless either Party notifies the other Party not less than six (6) months before the end of the then in effect term of its intent to terminate this Agreement. References in this Agreement to "Term" shall be deemed to include the initial five (5) year term as well as a reduction or extension of that time period that may occur as a result of the provision of this Section 0 or the provisions of Section 14. 3 + +Source: RITTER PHARMACEUTICALS INC, S-4/A, 3/13/2020 + + + + + +2.3. Customer Product Rentals. All instruments placed with customers under a rental program during the Term shall be owned by Sekisui ("Sekisui Instruments"), while Qualigen shall retain ownership of instruments placed with customers under a rental program before the execution of this Agreement ("Qualigen Instruments") and any instruments (including FastPack® 2.0) placed by Qualigen to the Qualigen Retained Customers. 2.4. Qualigen Retained Customers. In addition to the retention of the Qualigen Instruments, Qualigen shall be permitted to continue selling the existing Qualigen products directly to the Qualigen Retained Customers. However, Qualigen shall not engage any distributors (whether exclusive or non-exclusive) other than Sekisui for the Qualigen Retained Customers. Sekisui shall not, and shall cause its subdistributors not to, market, rent or sell any Products to the Qualigen Retained Customers. 3. Supply; Orders 3.1. Supply. Qualigen shall supply Sekisui with all of Sekisui's commercial requirements for the Product in the Applicable Markets. All Products supplied by Qualigen to Sekisui shall have on the date of shipment by Qualigen a shelf life of not less than a minimum three (3) month shelf life for products shipped within the United States and not less than a minimum four (4) month shelf life for products shipped outside the United States (or such longer shelf-life as may be mutually agreed by Qualigen and a Sekisui customer with respect to a specific customer order). Qualigen shall use reasonable efforts to assure that the Products, as manufactured by Qualigen, conform to the applicable product specifications and requirements of the Regulatory Authorities in, and are manufactured in accordance with all Regulatory Approvals, laws and regulations applicable to the Products in the Applicable Markets. Qualigen shall maintain the necessary records to comply with all Regulatory Approvals and other applicable rules and regulations in the Applicable Markets. 3.2. Forecast. Sekisui shall submit to Qualigen by the fifth day of each calendar month a rolling twelve (12) month (month-by-month) forecast of the quantity of each Product that Sekisui anticipates selling during the following twelve (12) months (the "Forecast"). As to Reagent Kits each respective Forecast shall represent reasonable estimates to be used for planning and inventory stocking purposes as indicated in Exhibit D, and shall not be binding on Sekisui; provided, however, that as to Instruments the quantities for each of the first three months of each respective Forecast shall be deemed to constitute and shall constitute firm, binding orders for such quantities of Instruments in such respective months (but in no event for a lesser quantity for a month than the quantity for such month which, pursuant to an earlier Forecast, had already become a firm, binding order). 4 + +Source: RITTER PHARMACEUTICALS INC, S-4/A, 3/13/2020 + + + + + +3.3. Orders. Orders shall be processed as set forth in Exhibit F. Each purchase order shall be governed by the terms and conditions of this Agreement (regardless of whether such purchase order references the Agreement). Sekisui shall be allowed to, for convenience, document its purchase orders by using Sekisui's standard form of purchase order, but in no event shall anything in such purchase order vary, contradict or augment the terms of this Agreement, and the parties agree that any "preprinted" provisions in the purchase orders shall, if they are inconsistent with or additive to this Agreement, simply be disregarded and shall be deemed inapplicable and/or rejected (regardless of acceptance, performance or apparent acquiescence, none of which shall constitute or be construed to constitute Qualigen's or Sekisui's consent to or recognition of terms, conditions or provisions that are different from or are not contained in this Agreement), unless in a separate and nonboilerplate agreement which expressly identifies and waives this Section 3.3 Qualigen agrees to accept such "preprinted" term. Similarly, Qualigen shall be allowed to, for convenience, document its acknowledgements, confirmations and similar instruments by using Qualigen's standard form of acknowledgement, confirmation and similar instruments, but in no event shall anything in such acknowledgements, confirmations and similar instruments vary, contradict or augment the terms of this Agreement, and the Parties agree that any "preprinted" provisions in the acknowledgements, confirmations and similar instruments shall, if they are inconsistent with or additive to this Agreement, simply be disregarded and be deemed inapplicable and/or rejected (regardless of acceptance, performance or apparent acquiescence, none of which shall constitute or be construed to constitute Qualigen's or Sekisui's consent to or recognition of terms, conditions or provisions that are different from or are not contained in this Agreement), unless in a separate and nonboilerplate agreement which expressly identifies and waives this Section 3.3 Sekisui agrees to accept such "preprinted" term. 3.4. Product Records. Qualigen shall test or cause to be tested each lot of Product purchased by Sekisui. Qualigen shall provide Sekisui with copies of any Product test records requested or Sekisui may audit Qualigen to review the Product test records. 3.5. No Alterations or Mishandling. Sekisui shall not, and shall also cause its subdistributors not to, alter or modify (or add to or subtract from) in any way any Products delivered by Qualigen hereunder. Sekisui shall, and shall also cause its subdistributors to, handle, store and transport the Products in accordance with Qualigen's guidelines and shall not, and shall also cause its subdistributors not to, subject such Products to abuse, mishandling or unusual physical, thermal, chemical or electrical stress or sell any Product after its expiration date. 3.6. Packaging and Labeling. The Products shall be delivered by Qualigen, and Sekisui shall cause the Products to be delivered to end users, in Qualigen packaging and with Qualigen labeling, all as intended to be received by the end user. Such packaging and labeling (and the Products themselves) (and "product inserts," which Qualigen may provide online so long as it is done in compliance with all legal requirements of the applicable jurisdiction) shall include such Qualigen trade names, brand names, trademarks and logos (and patent notices) as Qualigen shall select and with such size, colors, positioning and prominence as Qualigen shall select in its sole discretion, and shall not include any Sekisui trade names, brand names, trademarks or logos (except that, if so required by applicable law, Qualigen shall include a statement that Sekisui is the distributor and/or that Sekisui is the importer). Sekisui shall not imprint or affix any of its (or any non-Qualigen person's) trade names, brand names, trademarks or logos to any Product or its packaging or labeling, and shall also cause its subdistributors not to do so. Sekisui shall not deface, cover, obscure, erase, alter or remove any Qualigen trade names, brand names, trademarks or logos (or patent notices) applied by Qualigen to the Products or to the Products' packaging or labeling, and shall also cause its subdistributors not to do so. 5 + +Source: RITTER PHARMACEUTICALS INC, S-4/A, 3/13/2020 + + + + + +4. Price, Shipment and Payment 4.1. Price. The price that Sekisui shall pay for the Products shall be established separately for the Reagent Kits and for the products other than Reagent Kits. The price that Sekisui shall pay for the Reagent Kits Products shall be based upon a formula intended to ensure that Sekisui will receive 90% of the total Available Margin for all Products during the first 12 months of this Agreement, 70% of the total Available Margin for all Products during months 13-24 of this Agreement, and 65% of the total Available Margin for all Products thereafter. Accordingly, the prices (established separately for the Reagent Kits and for the products other than Reagent Kits) to be paid by Sekisui for the Products shall be fixed (subject to a later lookback true up) for each respective prospective six month period in the manner set forth in Exhibit D. The initial prices Sekisui agrees to pay for the respective Products for the first such prospective "six month period" (in this instance actually a five month period: May-September 2016) shall be fixed (subject to a later lookback true up) in the manner set forth in Exhibit D. Thereafter such prices shall be revisited and recalculated (prospectively) every six months in the manner set forth in Exhibit D (i.e., for purposes of such calculations for establishing the new prospective prices for the reagent products, the applicable Net Revenue, COGS and Available Margin shall be the Net Revenue, COGS and Available Margin for the applicable historical 6-month period as defined in Exhibit D). In addition, on a semi-annual basis, such amount shall be reviewed based on the actual Net Revenue, COGS and Available Margin for the 6 months then ended. In the event that such review results in a difference from the intended share of Available Margin between the Parties as contemplated above, the Parties shall make a true up payment between them in order to compensate for such overpayment or shortfall, all as provided in Exhibit D. Any true-up payments shall be paid by the applicable Party within 30 days of the receipt of an invoice for the agreed to true up amount. Sekisui shall set the customer selling prices in good faith and in a commercially reasonable manner. 4.2. Shipment. The shipment of orders to Sekisui's customers shall be subject to the ability of Sekisui and Qualigen to obtain all required licenses and permits then in effect. Qualigen agrees (i) to assist Sekisui in obtaining such required licenses or permits, (ii) to comply with all Regulatory Approvals in, including all approvals and licenses necessary to import the Product into, the Applicable Markets, and (iii) to maintain the necessary records to comply with all Regulatory Approvals and other applicable rules and regulations in the Applicable Markets. Qualigen shall not be subject to unreasonable requests for assistance in applying for Regulatory Approvals such as providing original or proprietary documents, submitting free product samples or extensive translations. All Product ordered by Sekisui's customers shall be suitably packed for shipment and storage by Qualigen on behalf of Sekisui in accordance with Qualigen's standard commercial shipping practices. Each order shall be shipped as designated by Sekisui's customers in the order. If the carrier noted on the Sekisui customer's purchase order is not available, or if the purchase order does not designate a carrier, then Sekisui shall select the mode of shipment or, if Sekisui does not select the mode of shipment, Qualigen shall select the mode of shipment. Qualigen's responsibility shall be to deposit the ordered goods with the designated carrier within the shipping periods specified, and Qualigen shall not be liable for late delivery if so accomplished. 4.3. Delivery Terms. Qualigen shall deliver Products ordered by Sekisui, FCA (Incoterms 2010) Qualigen's facility in Carlsbad, California. Title to Products ordered by Sekisui shall pass to Sekisui upon delivery to the designated Sekisui storeroom at Qualigen's facility. While held at the Sekisui storeroom, any physical inventory loss will be the responsibility of Qualigen. Sekisui undertakes that all Sekisui inventory of Products shall be kept at such designated Sekisui storeroom at Qualigen's facility, until resale to Sekisui's customers. 6 + +Source: RITTER PHARMACEUTICALS INC, S-4/A, 3/13/2020 + + + + + +4.4. Sales Expense; Business Plan. For the avoidance of doubt, Sekisui shall be responsible for all sales and related sales expense except for Qualigen Retained Customers. The Business Plan sets forth Sekisui's plans for the sale and distribution of the Products, including target budget and resource allocations for the marketing and sales of the Products and estimated forecasts of sales to customers. Sekisui shall in good faith use commercially reasonable efforts, in conformance with good commercial practice and standards, government regulations and other applicable requirements, to promote, market and sell the Products, to execute the Business Plan and to achieve its objectives. Except as set forth in Section 3.2, such forecasts and budgets are intended for guidance purposes only and are not binding obligations. Sekisui shall be responsible for bad debt (customer nonpayment) and credit card merchant fees and expenses. 4.5. Financing Payments; Development Plan. In addition to the payments for the purchase of Products set forth in Section 4.1 above, in connection with this Agreement and in furtherance of the Development Plan, Sekisui shall provide to Qualigen up to $6,200,000 of financing in accordance with the timing and other provisions of the Development Plan and the achievement of the applicable milestones set forth therein (the "Financing Payments"). All such Financing Payments shall be used in accordance with the Development Plan and shall be non-refundable once paid, other than as set off in connection with a Sale Transaction as further described below. Time is of the essence for the payment by Sekisui of the resulting Financing Payments upon confirmation of achievement by Qualigen of the respective Development Plan milestones as set forth in Section 6.2 and the Development Plan. 4.6. Personnel Matters. Sekisui shall offer employment to four Qualigen sales representatives to become employees of Sekisui with primary responsibility for the sale of the Products, and Qualigen hereby consents to and permits such employment. Such offers of employment are subject to Sekisui's employment policies, including the successful completion of customary background checks, and are not a guarantee of ongoing employment. Upon the expiration or termination of the Term (other than in connection with a Sale Transaction in which Sekisui acquires Qualigen), Sekisui shall cooperate in permitting Qualigen to offer to rehire any Sekisui sales representatives who are primarily responsible for selling the Products. A sales person "primarily responsible for selling the Products" is one that spends more than half of his or her time and receives more than half of his or her commission based compensation based on sales of the Products. 4.7. Invoice Terms. Sekisui shall pay for each Product sold by Qualigen within 30 days after Sekisui has received the applicable invoice from Qualigen. 4.8. Marketing Claims. Sekisui covenants to Qualigen that Sekisui will not make any written or oral representation or marketing claim (either formal or informal) about any Product's capabilities or characteristics other than those representations and claims that are fully and directly supported by factual materials provided by Qualigen to Sekisui. Sekisui shall not make any false or misleading representations to customers or others regarding Qualigen or the Products. Sekisui shall not make any representations, warranties or guarantees with respect to the specifications, features or capabilities of the Products that are not contained within Qualigen's documentation accompanying the Products or Qualigen's literature describing the Products, including Qualigen's standard limited warranty and disclaimers. 7 + +Source: RITTER PHARMACEUTICALS INC, S-4/A, 3/13/2020 + + + + + +4.9. Taxes. Qualigen's stated Product prices do not include any foreign, federal, state or local sales taxes that may be applicable to the Products, but in the event that such sales taxes are applicable and Qualigen has the legal obligation to collect such sales taxes (or are sales taxes imposed on a seller), Qualigen shall be entitled to add to its invoice the amount of such sales taxes and Sekisui shall pay such amount unless Sekisui provides Qualigen with a valid tax exemption certificate authorized by the appropriate taxing authority. As between the Parties, all customs duties shall be the responsibility of Sekisui, and all duty expenses will be included as an element of COGS as referenced in Exhibit A and will be included as part of the Actual Margin True-Up as defined in Exhibit D. The parties agree to cooperate with one another and use reasonable efforts to avoid or reduce tax withholding or similar obligations in respect of Financing Payments, Product purchase payments, and other payments made by Sekisui to Qualigen under this Agreement. To the extent Sekisui is required to withhold taxes on any payment to Qualigen, Sekisui shall pay the amounts of such taxes to the proper governmental authority in a timely manner and promptly transmit to Qualigen evidence of such payment and/or an official tax certificate, or such other evidence as Qualigen may reasonably request, to establish that such taxes have been paid. Qualigen shall provide Sekisui any tax forms that may be reasonably necessary in order for Sekisui to not withhold tax or to withhold tax at a reduced rate under an applicable bilateral income tax treaty. Each Party shall provide the other with reasonable assistance to enable the recovery, as permitted by applicable law, of withholding taxes, value added taxes, or similar obligations resulting from payments made under this Agreement, such recovery to be for the benefit of the Party bearing such withholding tax or value added tax. 4.9.1. Medical Device Tax. The party responsible for paying any applicable medical device excise tax pursuant to Section 4191 of the U.S. Internal Revenue Code or any successor thereto will be as determined under such tax provisions. If any, such medical device excise tax will be treated as a cost element to be included in COGS as referenced in Exhibit A. 4.10. Interest. Accrual and payment of interest shall not be deemed to excuse or cure breaches of contract arising from late payment or nonpayment. Cumulative with and not exclusive of any and all other available remedies, payments that are more than 30 days past due hereunder, and which are not otherwise subject to a good faith dispute, shall accrue interest, from the due date until paid, at an annual rate equal to the prime rate, as reported in The Wall Street Journal, Eastern U.S. Edition, on the date such payment is due, plus an additional 200 basis points (2%). 4.11. Currency. All invoices under this Agreement shall be paid in United States dollars. 5. Manufacturing and Quality Assurance 5.1. Manufacturing Conformance. Qualigen represents and warrants that it shall manufacture all Products in accordance with the applicable product specifications and all applicable federal, state and local laws, regulations, and guidelines. Qualigen represents and warrants that no Product delivered by Qualigen under this Agreement will be adulterated or misbranded within the meaning of 21 U.S.C. Sections 351-352, or within the meaning of any other applicable law as such laws are constituted and effective at the time of such shipment or delivery. Qualigen shall maintain appropriate certification status and compliance with the FDA's Quality System Regulation, the Directive of 27 October 1998 on In Vitro Diagnostic Medical Devices (IVDD) and/or all other applicable regulations. Upon request, Qualigen shall furnish to Sekisui any such information required to enable Sekisui to comply with all applicable regulations and standards that pertain to distributors for the Products. 5.2. Manufacturing Changes. Qualigen shall notify Sekisui in writing no less than 3 months prior to any material changes which affect (i) the form, fit or function of any Products, or (ii) the labeling or regulatory status of the Products in any of the Applicable Markets. 5.3. Manufacturing Site. During the Term, Qualigen shall manufacture all Products using Qualigen's facilities located in Carlsbad, California. Qualigen shall give at least six (6) months prior written notice to Sekisui of any proposed relocation of the manufacturing of any Product. Any new facility proposed to be used by Qualigen in manufacturing any Product shall be subject to a new and separate audit by Sekisui personnel in accordance with Quality Systems Regulations (QSR), as well as ISO 13485. 8 + +Source: RITTER PHARMACEUTICALS INC, S-4/A, 3/13/2020 + + + + + +5.4. Approved Supplier. It is acknowledged that Qualigen is an "Approved Supplier" as to Products manufactured at Qualigen's Carlsbad, California facility. As part of Sekisui's supplier approval program, Sekisui will have the option to perform an audit (applying Sekisui's standard supplier criteria for qualification as an "Approved Supplier") at Qualigen's Carlsbad, California manufacturing facility annually and at each relocated manufacturing facility at which Qualigen will manufacture the Products within sixty (60) days of Qualigen's notice to Sekisui of the relocation of such manufacturing facility. Within thirty (30) days after the completion of an audit, Sekisui shall inform Qualigen in writing of the results of such audit. If Qualigen does not pass such audit and the reasons for such failure can be remedied within a reasonable period of time (which shall not be less than sixty (60) days), then Sekisui shall provide Qualigen with a list of proposed remedial action items and a proposed timeframe within which to accomplish such action items. If Qualigen does not pass such audit and the reasons for such failure cannot be remedied within a reasonable period of time or Qualigen fails or elects not to complete any remedial actions reasonably suggested by Sekisui, then Sekisui's sole and exclusive remedy shall be to terminate this Agreement in accordance with the provisions of Section 14 of this Agreement, with such termination to be effective upon receipt of a termination notice by Qualigen sent by Sekisui at any time after the sixty day remedy period described in this Section 5.4 has passed. As scheduled, Sekisui may perform an audit during reasonable business hours to confirm ongoing compliance with the Quality System Regulations and confirm adequate process controls. Sekisui shall notify Qualigen at least one month in advance of a planned audit and Qualigen shall make reasonable efforts to accommodate the desired schedule. Sekisui further agrees that any information obtained from Qualigen or its Affiliates or agents in connection with any such audit shall be deemed Qualigen Confidential Information and subject to the provisions of Section 13 of this Agreement. 5.5. Technical Support. Qualigen shall provide to Sekisui and its customers commercially reasonable technical support (i) for the promotion, sale, after-sale service and support of Products sold in the Territory pursuant to this Agreement; (ii) in connection with any customer inquiries or complaints and (iii) in connection with interactions with the Regulatory Authorities. Qualigen shall be responsible for the management and costs of all such service. Qualigen shall be entitled to charge customers for, and to retain, commercially reasonable fees for service and support of out-of-warranty Instruments. 5.6. Trade Compliance. Upon execution of this Agreement, Qualigen, with Sekisui's assistance, shall provide to Sekisui the Export Commodity Control Number (ECCN) and Harmonized Tariff Codes (HTS), Country of Origin (COO), Trade Agreement Act (TAA) and Buy America Act (BAA) determinations or other relevant information for any Product supplied to Sekisui pursuant to this Agreement. 9 + +Source: RITTER PHARMACEUTICALS INC, S-4/A, 3/13/2020 + + + + + +5.7. REACH and RoHS Compliance. If any Product supplied by Qualigen is manufactured in or imported into the European Union, Qualigen shall, at its sole cost and expense, comply with applicable requirements under Regulation (EC) 1907/2006 concerning the Registration, Evaluation, Authorization and Restriction of Chemicals ("REACH"), and Directive 2011/65/EC concerning the Restriction of the Use of Certain Hazardous Substances in Electrical and Electronic Equipment ("RoHS"), each as may be amended from time to time. Upon reasonable request, Qualigen shall provide reasonable proof of compliance with REACH and RoHS, including any registration, communication, safety data sheet, chemical report, or technical or other supporting documentation. Qualigen represents and certifies that it has gathered, or will gather, the compliance documentation information with appropriate methods to ensure its accuracy and that such information is true, correct and complete to the best of its knowledge and belief as of the date that Qualigen provides its declaration. Qualigen acknowledges that Sekisui will rely on this certification in determining the compliance of the Products with REACH and RoHS. Sekisui acknowledges that Qualigen may have relied on information provided by Third Parties in completing its compliance review, and that Qualigen may not have independently verified such information, provided that Qualigen has conducted appropriate due diligence and its reliance on such Third Parties is reasonable and that Qualigen has no reason to question the reliability of such Third Parties' information and certifications. Qualigen-controlled manufacturing processes shall be in compliance with REACH and RoHS in that they do not add any substances to the resultant Product to the extent currently prohibited by REACH and RoHS. Based upon the information supplied by Third Parties along with Qualigen's knowledge of its own manufacturing processes, Qualigen will certify that, to the best of its knowledge, each of the Products identified in any certification is in compliance with the substance restrictions of REACH and RoHS or is exempt from REACH and RoHS, unless Qualigen has advised Sekisui in advance that any Product or any material incorporated into, or used to produce, any Product ("Material") do not comply with REACH or RoHS. Qualigen has processes in place to ensure proper control of Materials declarations, and segregation of ROHS- compliant and non-compliant Material within Qualigen's manufacturing processes. Qualigen shall maintain REACH and RoHS records and compliance documentation for the amount of time required under REACH or RoHS. Qualigen and Sekisui agree to promptly notify each other if either learns of any developments relating to REACH or RoHS that might impact Sekisui's ability to use any Product or place it on the market in the European Union. Qualigen agrees to notify Sekisui promptly: (1) if there are changes to the REACH registration relevant to the Product; (2) if any of the substances, preparations, or substances in articles purchased by Sekisui meet the criteria referred to in Art. 57 of REACH or are on the candidate list for eventual inclusion in Annex XIV of REACH; (3) if a REACH registration has been rejected by the European Chemicals Agency (ECHA); or (4) of any other development relating to any Product's status under REACH or RoHS where such development might affect Sekisui's ability to use any Product or to place it on the market in the European Union. 6. Management Committee 6.1. Management Committee. Each Party shall, within five (5) business days after the Effective Date, designate four (4) representatives, at least one of whom shall have sufficient authority to enable him or her to make decisions on behalf of the Party he or she represents, to comprise the management committee (the "Management Committee") overseeing the implementation and revision of the Business Plan and Development Plan. Each Party shall (A) promptly notify the other Party in writing of any change in its appointed representatives; and (B) be solely responsible for all travel-related costs and expenses for its respective representatives to attend meetings or to otherwise participate in, or carry out its obligations under, the Management Committee. The Qualigen representatives on the Management Committee shall initially be Paul Rosinack, Michael Poirier, Chris Lotz and Shishir Sinha. The Sekisui representatives on the Management Committee shall initially be Bob Schruender, Lee Lipski, Alan Bauer and Tom Cummins. 10 + +Source: RITTER PHARMACEUTICALS INC, S-4/A, 3/13/2020 + + + + + +6.2. Meetings. The Management Committee shall be responsible for: (A) meeting quarterly unless otherwise specified in writing by the Parties (in person or via phone/webmeeting) to monitor, review, and discuss the progress under the Business Plan and Development Plan; (B) resolving disputes or disagreements between the Parties with respect to the implementation of the Business Plan and Development Plan; (C) coordinating the exchange of information between the Parties in connection with the activities contemplated by the Business Plan, the Development Plan and this Agreement; (D) confirming the achievement of any milestones resulting in an additional payment under the Development Plan, and (E) carrying out any other responsibilities as are set forth in this Agreement, or that are assigned to it by the Parties. Each Party may invite other representatives of such Party to join any management committee meeting if it would be useful to have their input for a particular agenda topic. For the avoidance of doubt, the Management Committee shall not have the power to amend this Agreement or to waive a Party's compliance with the terms and conditions contained in this Agreement. 6.3. R&D Subcommittee. The Management Committee shall also organize research and development review meetings, which may include members of the Management Committee as well as other representatives of either Party, meeting monthly unless otherwise specified in writing by the Parties (in person or via phone/webmeeting) to monitor, review, and discuss the progress of the development of future Products and manufacturing capability in accordance with the Development Plan, including a review of all applicable data and an assessment of resources. 6.4. Quality Subcommittee. The Management Committee may also organize quality review meetings, which may include members of the Management Committee as well as other representatives of either Party, meeting quarterly unless otherwise specified in writing by the Parties (in person or via phone/webmeeting) to monitor, review, and discuss various aspects of Qualigen's quality assurance programs, including a one day Quality program management review and one day of internal auditing of quality matters. 6.5. Other Subcommittees. The Management Committee may establish other subcommittees from time to time as it deems appropriate. 7. Information Rights 7.1. Development Plan. Qualigen shall maintain complete and accurate records and data regarding the work completed under the Development Plan. Representatives of Sekisui may, upon reasonable advance notice, (a) visit the facilities where the Development Plan activities are being performed, and (b) consult with any such Qualigen personnel performing such activities. 7.2. Delivery of Financial Statements and Other Information. Qualigen shall deliver to Sekisui: 7.2.1. as soon as practicable, but in any event within one-hundred eighty (180) days after the end of each fiscal year of Qualigen (i) a balance sheet as of the end of such year, (ii) a statement of income for such year, and (iii) a comparison between (x) the actual amounts as of and for such fiscal year and (y) the comparable amounts for the prior year and as included in Qualigen's budget for such year, with an explanation of any material differences between such amounts, all such financial statements in the form of a compilation prepared by independent public accountants; 7.2.2. as soon as practicable, but in any event within thirty (30) days after the end of each quarter of each fiscal year of Qualigen, an unaudited statement of income for such fiscal quarter, and an unaudited balance sheet as of the end of such fiscal quarter, all prepared in accordance with GAAP (except that such financial statements may (i) be subject to normal year-end audit adjustments; and (ii) not contain all notes thereto that may be required in accordance with GAAP); 11 + +Source: RITTER PHARMACEUTICALS INC, S-4/A, 3/13/2020 + + + + + +7.2.3. as soon as practicable, but in any event within thirty (30) days of the end of each month, an unaudited income statement for such month, and an unaudited balance sheet as of the end of such month, all prepared in accordance with GAAP (except that such financial statements may (i) be subject to normal year-end audit adjustments and (ii) not contain all notes thereto that may be required in accordance with GAAP); 7.2.4. as soon as practicable, but in any event within forty five (45) days after the end of each quarter of each fiscal year of Qualigen, a progress report setting forth Qualigen's business results and progress against the Development Plan; and 7.2.5. as soon as practicable, but in any event no later than sixty (60) days before the end of each fiscal year, a budget and business plan for the next fiscal year, prepared on a monthly basis, including balance sheets and income statements. 8. Intellectual Property Rights 8.1. Background Intellectual Property Rights. Each Party shall own and retain all right, title and interest in and to all of its Intellectual Property Rights created before or independently from the Development Plan and this Agreement ("Qualigen Background IP" and "Sekisui Background IP," respectively). 8.2. Development Plan Intellectual Property Rights. Except as set forth in this Section, Qualigen shall own all right, title and interest in and to all Intellectual Property Rights (if any) resulting from Qualigen's activities under the Development Plan ("Development IP"), but excluding all Sekisui Background IP. In the event that any Development IP is jointly invented by the Parties in accordance with applicable intellectual property laws, then the ownership of such Development IP that has been jointly invented shall be co-owned by the Parties in accordance with such applicable intellectual property laws; provided, however, that neither Party shall have any duty or obligation to account to the other for any use or exploitation of such jointly invented Development IP and as between the Parties, each Party shall be entitled to retain any and all benefit, financial or otherwise, derived by such Party from such jointly invented Development IP. 8.3. Prosecution and Enforcement of Development IP. Except as set forth below, Qualigen shall have the sole right to prepare, file applications on and registrations for, prosecute, obtain, maintain, defend and enforce all Intellectual Property Rights in the Development IP in such manner as Qualigen deems appropriate in its sole discretion, including incurring and paying all expenses required for such purposes. Notwithstanding the foregoing, Qualigen shall use commercially reasonable efforts to preserve, obtain and maintain in the Applicable Markets all material Development IP and Qualigen Background IP related to or used in connection with the development and manufacturing of the Products as well as any improvements or alternative embodiments thereof, and shall consult Sekisui before determining not to pursue in any Applicable Market any particular Intellectual Property Rights related to any product development efforts covered by the Development Plan. In the event that Qualigen elects not to prosecute or maintain in a particular Applicable Market country any Patent Rights in the jointly developed Development IP (the "Abandoned Joint IP"), Sekisui may elect to prosecute such Abandoned Joint IP in such particular Applicable Market country, in which case the Patent Rights for such Abandoned Joint IP in such particular in Applicable Market country shall be owned solely by Sekisui. 12 + +Source: RITTER PHARMACEUTICALS INC, S-4/A, 3/13/2020 + + + + + +8.4. Marks. During and after the Term, neither Party shall register, use or claim ownership or other rights in any logo, trade name, brand name or trademark of the other Party in existence during the Term (nor any logo, trade name, brand name or trademark confusingly similar to any logo, trade name, brand name or trademark of the other Party in existence during the Term), nor assist anyone else to do so, nor make or assist in any challenge to any logo, trade name, brand name or trademark of the other Party in existence during the Term. 9. Sale Transaction 9.1. Exclusivity Period. The parties anticipate that they will entertain a potential acquisition of Qualigen by Sekisui during 2018 on terms to be mutually agreed. Accordingly, Qualigen hereby agrees that during the Exclusivity Period, Qualigen shall not, directly or indirectly, through its affiliates, agents, stockholders, officers, directors or otherwise solicit, initiate, participate in discussions or negotiations or otherwise cooperate in any way with, or provide any information to any person, entity or group other than Sekisui concerning a Sale Transaction. In the event that Qualigen nonetheless receives an unsolicited offer to engage in a Sale Transaction during such Exclusivity Period, Qualigen may engage with such party to the extent legally required to comply with its fiduciary duties, so long as Qualigen (i) promptly communicates to Sekisui the material terms of any proposal or offer or request for information which it may receive in respect of any such proposed Sale Transaction, including the purchase price, form and timing of consideration and the identity of the acquirer, and (ii) complies with Sekisui's Right of First Refusal (as defined below). 9.2. Negotiation Period. No later than July 1, 2018 (and sooner upon Sekisui's written request at any time before July 1, 2018), the parties shall engage in good faith negotiations for a period of up to 6 months (the "Negotiation Period") with respect to a potential acquisition by Sekisui of Qualigen. During the Negotiation Period, Qualigen shall provide to Sekisui all due diligence information reasonably requested by Sekisui so that it may make an informed offer to acquire Qualigen. Any Financing Payments made by Sekisui will be credited against any such Sale Transaction agreed to between Sekisui and Qualigen. If the parties do not mutually agree to the terms of such potential acquisition within the Negotiation Period then the Exclusivity Period shall end and, subject to Sekisui's Right of First Refusal, Qualigen shall be free to negotiate the terms of a Sale Transaction with any Third Party. 9.3. Right of First Refusal. During the Term, Sekisui shall have a right of first refusal to match the terms of any arms length, bona fide proposed Sale Transaction with a Third Party ("Sekisui's Right of First Refusal"). Qualigen shall provide Sekisui with at least 30 days prior written notice and access to all due diligence materials provided to any potential acquirer, such 30 day period to commence upon the notification to Sekisui that Qualigen's board of directors has approved such Proposed Sale Transaction (as set forth in a term sheet or draft definitive agreement provided to Sekisui), subject to Sekisui's Right of First Refusal. At any time during such 30 day period, Sekisui may elect to match the terms of such proposal. Sekisui will be credited in any such proposal by the cumulative amount of all Financing Payments made to date. For example, if a Third Party offers to acquire Qualigen for $50,000,000 and Sekisui has funded the full $6,200,000 of Financing Payments, Sekisui's Right of First Refusal to match the proposed transaction would be a price of $43,800,000. In the event that Sekisui elects not to move forward with such proposal for a Sale Transaction, Qualigen shall have a period of 120 days to consummate a Sale Transaction on the same terms as provided to Sekisui. If a Sale Transaction has not been consummated within such 120 days period, any Sale Transaction must once again comply with the provisions of this Section 9.3. 13 + +Source: RITTER PHARMACEUTICALS INC, S-4/A, 3/13/2020 + + + + + +9.4. Penalty for Breach. In the event of any breach of Sections 9.1 through 9.3, including without limitation, any actions by stockholders of Qualigen that result in a Sale Transaction without complying with Sections 9.1 through 9.3 above, or otherwise hinder the intent and purpose of the provisions of Sections 9.1 through 9.3 above, in addition to any other remedies available to Sekisui under the terms of this Agreement, including the right to specific performance and other equitable remedies, Sekisui shall be entitled to liquidated damages in the amount of three times any and all Financing Payments made to date. For the avoidance of doubt, this clause does not apply to a failure of the stockholders of Qualigen to approve a Sale Transaction proposed by Sekisui, so long as such stockholders did not approve a Sale Transaction on the same terms with a Third Party during the Term. 9.5. Molecular Clinical Diagnostics. In furtherance of the foregoing, during the Exclusivity Period, Qualigen shall, in consultation with Sekisui, take commercially reasonable steps to seek to regain any rights in any Qualigen molecular clinical diagnostic product technology that Qualigen has previously granted to Gen-Probe, Hologic, or any of their affiliates. 10. Representations and Warranties 10.1. By Qualigen. Qualigen hereby represents, warrants and covenants that: (a) Qualigen has the full right, power and corporate authority to enter into this Agreement, and to make the promises set forth in this Agreement, and to grant the rights herein, and that there are no outstanding agreements, assignments or encumbrances in existence inconsistent with the provisions of this Agreement and that this Agreement is enforceable against Qualigen. (b) The Products supplied to Sekisui under this Agreement shall conform to the applicable product specifications and shall not infringe upon the patents or proprietary rights of any Third Party. To the extent any Third Party owns any patents or proprietary rights relating to the use, sale, or manufacture of a Product in the Territory, Qualigen represents and warrants that it has sufficient valid rights from such Third Party under which (1) Qualigen may manufacture and sell such Product to Sekisui, and (2) Sekisui may use and sell such Products royalty free in the Territory. (c) As of the Effective Date, Qualigen has not been notified with respect to, and to Qualigen's best knowledge there is no patent infringement action pending before any court or governmental agency or other tribunal relating to any Product. (d) As of the Effective Date, Qualigen has not been notified with respect to, and to Qualigen's best knowledge no material actions are pending before any court or governmental agency or other tribunal relating to any Product. (e) All Product delivered to Sekisui or Sekisui's customers pursuant to this Agreement, at the time of such delivery, shall not be adulterated or misbranded within the meaning of any applicable law, regulation or guideline effective at the time of delivery and shall not be an article which may not be introduced into interstate commerce under any applicable law, regulation or guideline. 14 + +Source: RITTER PHARMACEUTICALS INC, S-4/A, 3/13/2020 + + + + + +(f) The manufacturing facilities and processes utilized for the manufacture of each Product shall comply with applicable FDA regulations including, without limitation, applicable current Good Manufacturing Practices as described in 21 CFR 820. Qualigen does not represent, warrant or covenant that the Development Plan will be successfully accomplished, that the Development Plan will produce any particular results or any favorable results, that the Development Plan will result in any Development IP (or in any valuable Development IP), that the Products (if any) arising from the Development Plan can ever receive Regulatory Approvals or be successfully or profitably commercialized, or that any other current or future Products can be successfully or profitably commercialized by Sekisui. Moreover, Sekisui acknowledges and accepts the risks inherent in attempting to develop and commercialize any medical product. There is no implied representation that any Products can be successfully developed or commercialized. Qualigen shall provide to Sekisui and for the benefit of Sekisui's customers of Products a standard commercial written warranty that the Products will be free of defects in materials or workmanship starting from the date the Product has been received by Sekisui's customer and ending after the length of time stated for the applicable Product on Exhibit D hereto (the "User Warranty"). The User Warranty is contingent upon proper use of a Product in the application for which such Product was intended and does not cover Products that were altered or modified (or added to or subtracted from), that were used after the expiration date thereon or that were subjected by the carrier, distributor or the customer to abuse, mishandling or unusual physical, thermal, chemical or electrical stress. 10.2. By Sekisui. Sekisui represents, warrants and covenants that: (a) Sekisui has the full right, power and corporate authority to enter into this Agreement and to make the promises set forth in this Agreement and that there are no outstanding agreements, assignments or encumbrances in existence inconsistent with the provisions of this Agreement and that this Agreement is enforceable against Sekisui. (b) As of the Effective Date, Sekisui has not been notified in writing with respect to, nor is there, to Sekisui's best knowledge, any patent infringement action pending before any court or governmental agency or other tribunal relating to Sekisui's sale or distribution of the Products. (c) As of the Effective Date, Sekisui has not been notified in writing with respect to, nor is there, to Sekisui's best knowledge, any action pending preventing Sekisui from selling and distributing the Products in the Territory. (d) Sekisui shall use its commercially reasonable efforts to obtain before distribution of each Product, all licenses, registrations and permits required to enable Sekisui to act as a distributor of such Product in the Territory. (e) Sekisui shall not make, or advise its customers to make, any alterations or modifications to, or any additions to or subtractions from, any Product. (f) Sekisui shall make no attempt to reverse-engineer any Product nor encourage or assist anyone else to do so. 15 + +Source: RITTER PHARMACEUTICALS INC, S-4/A, 3/13/2020 + + + + + +10.3. No Implied Warranties. The express warranties set forth in this Section 10 and elsewhere in this Agreement are provided in lieu of, and EACH PARTY HEREBY DISCLAIMS, all other warranties, express and implied, relating to the subject matter of this Agreement. EXCEPT FOR THE EXPRESS WARRANTIES SET FORTH IN THIS AGREEMENT, NEITHER PARTY MAKES ANY OTHER WARRANTY, EXPRESS, IMPLIED OR STATUTORY, TO THE OTHER PARTY WITH RESPECT TO THE PRODUCTS OR THE OTHER SUBJECT MATTER OF THIS AGREEMENT. THE PARTIES EXPRESSLY EXCLUDE ANY IMPLIED WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE OR OF MERCHANTABILITY. Each Party's representations, warranties and/or covenants under this Agreement are solely for the benefit of the other Party and may be asserted only by the other Party and not by anyone else (including without limitation any customer of the other Party; provide, however, that end user customers may assert the User Warranty against Qualigen). 11. Indemnities 11.1. Indemnification by Sekisui. Sekisui shall indemnify, defend and hold harmless Qualigen, and its directors, officers, employees, agents and representatives (collectively, the "Qualigen Indemnitees") from and against any and all claims, suits and proceedings by a Third Party (individually and collectively, "Claims"), and any and all losses, obligations, damages, deficiencies, costs, penalties, liabilities, assessments, judgments, amounts paid in settlement, fines and expenses (including court costs and reasonable fees and expenses of attorneys), incurred in the investigation, defense and/or settlement of any Claims (individually and collectively, "Losses"; it being expressly understood, however, that incidental, special, indirect and consequential damages and lost profits, lost savings and interruptions of business are expressly excluded therefrom and from such defined term): (a) arising out of the negligence or willful misconduct of Sekisui or its directors, officers, employees, agents or representatives in the performance of Sekisui's obligations under this Agreement; or (b) arising out of or in connection with a breach or violation by Sekisui or its subdistributor of any applicable law or a material breach by Sekisui of any of its obligations under this Agreement, including any representations or warranties set forth herein; provided, however, that Sekisui shall have no liability or obligation to any Qualigen Indemnitee for any Claims or Losses to the extent that such Claims or Losses are primarily caused by a Qualigen Indemnitee's breach of applicable law, breach of this Agreement, negligence or willful misconduct. 11.2. Indemnification by Qualigen. Qualigen shall indemnify, defend and hold harmless Sekisui and its directors, officers, employees, agents and representatives (collectively, the "Sekisui Indemnitees") from and against any and all Losses incurred in the investigation, defense and/ or settlement of any Claims: (a) related to bodily injury, death or property damage directly caused by any Product which has not been altered or modified (or added to or subtracted from) in any way, has been handled, stored, transported and used in accordance with Qualigen's guidelines and has not been used after its expiration date or subjected to abuse, mishandling or unusual physical, thermal, chemical or electrical stress; (b) arising out of the negligence or willful misconduct of Qualigen or its directors, officers, employees, agents or representatives; (c) arising out of a breach or violation by Qualigen of any applicable law or a material breach by Qualigen of any of its obligations under this Agreement, including any representations or warranties set forth herein; or (d) arising out of any claim that any of the manufacture, marketing, import, offer for sale, sale, or use of any Product infringes upon any patent, proprietary, or intellectual property right of any Third Party in the Territory; provided, however, that Qualigen shall have no liability or obligation to any Sekisui Indemnitee for any Claims or Losses to the extent that such Claims or Losses are primarily caused by a Sekisui Indemnitee's (or any other entity or person within the Sekisui corporate family's) breach of applicable law, breach of this Agreement, negligence or willful misconduct. 16 + +Source: RITTER PHARMACEUTICALS INC, S-4/A, 3/13/2020 + + + + + +11.3. Patent Indemnity. Qualigen and Sekisui shall notify each other promptly in writing of any action (and all prior claims relating to such action) brought against Qualigen or Sekisui alleging that the manufacture, marketing, import, offer for sale, sale or use of a Product constitute infringement of the intellectual property rights of a Third Party, and (provided that such a Claim does not arise from Sekisui's noncompliance with Sections 3.6, 8.4, 10.2(b), 10.2(c), 10.2(e) or 10.2(f) of this Agreement (e.g., Sekisui has altered a Product or has used a Sekisui trademark in connection with a Product)) Qualigen agrees to defend Sekisui in such action at its expense and shall pay any costs or damages finally awarded against Sekisui in any such action; provided, that Qualigen shall have had sole control of the defense of any such action and all negotiations for its settlement or compromise and provided further that no settlement or compromise shall be binding on a Party hereto without its prior written consent, which consent shall not be unreasonably withheld. In the event a lawsuit is filed against Sekisui or Qualigen alleging that the manufacture, marketing, import, offer for sale, sale or use of a Product constitute infringement of the intellectual property rights of a Third Party, or Qualigen files an action for declaratory judgment because of a serious threat of such a lawsuit, or if in Qualigen's reasonable business judgment a Product is likely to become the subject of a claim of infringement of a patent or other intellectual property right; then Qualigen may, at its expense, and may request Sekisui's assistance to, attempt to obtain a license to such patent or other intellectual property right. 11.4. Indemnification Procedures. The Party or other Indemnitee intending to claim indemnification under this Section 11 (an "Indemnified Party") shall promptly notify the other Party (the "Indemnifying Party") of any Claim in respect of which the Indemnified Party intends to claim such indemnification (provided, that no delay or deficiency on the part of the Indemnified Party in so notifying the Indemnifying Party will relieve the Indemnifying Party of any liability or obligation under this Agreement except to the extent the Indemnifying Party has suffered actual prejudice directly caused by the delay or other deficiency), and the Indemnifying Party shall assume the defense thereof (with counsel selected by the Indemnifying Party and reasonably satisfactory to the Indemnified Party) whether or not such Claim is rightfully brought; provided, however, that an Indemnified Party shall have the right to retain its own counsel and participate in the defense thereof, with the fees and expenses to be paid by the Indemnified Party, unless the Indemnifying Party does not assume the defense or unless a representation of both the Indemnified Party and the Indemnifying Party by the same counsel would be inappropriate due to the actual or potential differing interests between them, in which case the reasonable fees and expenses of counsel retained by the Indemnified Party shall be paid by the Indemnifying Party. Notwithstanding the previous sentence, in no event shall the Indemnifying Party be required to pay for more than one separate counsel no matter the number or circumstances of all Indemnified Parties. If the Indemnifying Party shall fail to timely assume the defense of and reasonably defend such Claim, the Indemnified Party shall have the right to retain or assume control of such defense and the Indemnifying Party shall pay (as incurred and on demand) the fees and expenses of counsel retained by the Indemnified Party and all other expenses of investigation and litigation. The Indemnified Party, and its directors, officers, advisers, agents and employees, shall cooperate fully with the Indemnifying Party and its legal representatives in the investigations of any Claim. The Indemnifying Party shall not be liable for the indemnification of any Claim settled (or resolved by consent to the entry of judgment) without the written consent of the Indemnifying Party. Also, if the Indemnifying Party shall control the defense of any such Claim, the Indemnifying Party shall have the right to settle such Claim; provided, that the Indemnifying Party shall obtain the prior written consent (which shall not be unreasonably withheld or delayed) of the Indemnified Party before entering into any settlement of (or resolving by consent to the entry of judgment upon) such Claim unless (A) there is no finding or admission of any violation of law or any violation of the rights of any person or entity by an Indemnified Party, no requirement that the Indemnified Party admit fault or culpability, and no adverse effect on any other claims that may be made by or against the Indemnified Party and (B) the sole relief provided is monetary damages that are paid in full by the Indemnifying Party and such settlement does not require the Indemnified Party to take (or refrain from taking) any action. 17 + +Source: RITTER PHARMACEUTICALS INC, S-4/A, 3/13/2020 + + + + + +Regardless of who controls the defense, the other Party hereto shall reasonably cooperate in the defense as may be requested. Without limitation, the Party hereto which is not the Indemnifying Party and (if different) the Indemnified Party, and their respective directors, officers, advisers, agents and employees, shall cooperate fully with the Indemnifying Party and its legal representatives in the investigation and defense of any Claim. 11.5. Expenses of Enforcement. As the Parties intend complete indemnification, all costs and expenses of enforcing any provision of this Section 11 shall also be reimbursed by the Indemnifying Party except as otherwise set forth in Section 11.4. 11.6. Insurance. Qualigen, at its own expense, shall procure and maintain during the Term, insurance policies with the minimum coverages set forth below ("Insurance"). Sekisui shall be named as an additional insured with respect to the Insurance. The Insurance shall be primary for all purposes to other insurance coverage, whether such other insurance is stated to be primary, contributory, excess, contingent or otherwise, without recourse to or contribution from any Sekisui-owned coverage. (a) Commercial General Liability Insurance - Combined single limit for bodily and property damage of not less than $1,000,000 for each occurrence and $2,000,000 annual aggregate providing: ● Assault and Battery coverage, ● Broad form property damage coverage, ● Broad form contractual liability coverage, ● Products and completed operations coverage, and ● Personal and advertising injury coverage. (b) Workers' Compensation and Employer's Liability Insurance - With limits of liability for: ● Workers' compensation as required by statute; ● Employer's liability for bodily injury by accident: $500,000 each accident; bodily injury by disease: $500,000 policy limit; and bodily injury by disease: $500,000 each employee. All Qualigen's Insurance shall be placed with an insurer that (a) has an A.M. Best rating of A- or better or (b) is a qualified self- insurance program that is approved by Sekisui. Qualigen shall provide Sekisui, upon request, with written evidence of the Insurance, including where it is provided through qualified self-insurance. Nothing in this Section shall be deemed to limit Qualigen's responsibility to the amounts stated above or to any limits of Qualigen's insurance policies. 12. Regulatory Matters 12.1. Regulatory Approval. Qualigen shall be responsible for maintaining, at its sole cost, the Regulatory Approvals required for the marketing and sale of the Products in the Applicable Markets. Qualigen shall hold in its name all Regulatory Approvals required for the marketing and sale of the Products in a country or region and shall (to the extent commercially reasonable to do so) maintain in good standing all existing Regulatory Approvals. Qualigen and Sekisui shall provide reasonable advice and assistance to each other as may be necessary to maintain required Regulatory Approvals. In addition, Qualigen shall use commercially reasonable efforts to obtain Regulatory Approval for any additional territories upon Sekisui's commercially reasonable request. 18 + +Source: RITTER PHARMACEUTICALS INC, S-4/A, 3/13/2020 + + + + + +12.2. Distribution Approvals. Sekisui shall be responsible for seeking, obtaining and maintaining (i) all licenses, registrations and permits (excluding patents) required to be obtained by Sekisui to enable Sekisui to act as a distributor of the Product pursuant to this Agreement, and (ii) all approvals from the Regulatory Authorities regarding marketing and advertising materials to be used by Sekisui to promote the Product. Qualigen shall cooperate with Sekisui in making and maintaining all filings that may be necessary or desirable in connection with obtaining and maintaining any regulatory approvals necessary for Sekisui to act as a distributor of the Product in the Applicable Markets. 12.3. Communication With Agencies. In the Applicable Markets, Qualigen shall have responsibility for communications with the Regulatory Authorities concerning any required Regulatory Approvals, approval of Product related marketing and advertising materials, and Product quality matters. 12.4. Governmental Warnings. Each Party shall advise the other Party promptly (but in any event within no more than 48 hours) of any warning (including any FDA Form 483), citation, indictment, claim, lawsuit, or proceeding issued or instituted by any federal, state or local governmental entity or agency against the Party, or of any revocation of any license or permit if, and only to the extent that, the manufacture, storage, or handling of the Product, or the marketing, selling, promotion or distribution of the Product, is affected. 12.5. Adverse Events, Recalls and Field Corrections. Qualigen shall have responsibility to determine whether any Adverse Events, Recalls or Field Corrections information must be reported to the FDA (under United States law) or any other Regulatory Authorities and Qualigen shall have responsibility to prepare and submit notification of Adverse Events, Recalls and/or Field Corrections to respective Regulatory Authorities for the Products. Qualigen shall provide prompt notice to Sekisui of any Adverse Events, Recalls or Field Corrections, which notice shall in any event be delivered within no more than 3 business days from Qualigen learning of such occurrence. 12.6. Complaints. Qualigen shall receive, investigate in a timely manner, and as appropriate, resolve customer complaints in the Territory. If an investigation is needed in response to a complaint or inquiry related to the Product, Qualigen shall perform the investigation and shall bear the cost of such investigation. The documentation of such investigation shall include, but not be limited to, investigation results, cause analysis, corrective and preventative action and health hazard/medical assessment, as appropriate. In the event a Product is returned by a customer for investigation, Qualigen shall ship a replacement Product to the customer. (Provided, that if a request for a return of Product is due to a change of mind over using the Product or the Sekisui customer has overstocked the product, rather than due to a warranty issue, Qualigen need not accept the return or provide any replacement or substitute.) Qualigen shall retain records of all Product related complaints, or Adverse Events for a period of not less than five (5) years beyond the expiration date of the Product or for such longer period as may be required by applicable law. Qualigen shall use commercially reasonable efforts to ensure that all complaints are appropriately closed within 90 days or less from the receipt of such complaint. 19 + +Source: RITTER PHARMACEUTICALS INC, S-4/A, 3/13/2020 + + + + + +12.7. Product Recalls. In the event that (i) any Applicable Market governmental agency or authority issues a request or directive or orders that the Products be recalled or retrieved, (ii) an Applicable Market court of competent jurisdiction orders that the Products be recalled or retrieved, or (iii) Qualigen and Sekisui reasonably determine, after mutual consultation, that the Products should be recalled, corrected or retrieved in any particular country or countries, Qualigen and/or Sekisui shall conduct such activity and the parties shall take all appropriate corrective actions and shall execute the steps detailed in the recall strategy. Qualigen shall be responsible for the content of any communication to the customers regarding any Recall or Field Correction. In the event such action results from Sekisui's gross negligence or willful misconduct, Sekisui shall be responsible for the expenses thereof. Otherwise, Qualigen shall be responsible for the expenses of the action. Sekisui and Qualigen shall cooperate fully with one another in conducting any such action. Sekisui shall destroy units of Products lawfully recalled only upon Qualigen's (or any governmental authority's) written instruction to destroy such units of Products, and only then in accordance with Qualigen's procedures and instructions. Otherwise, Sekisui shall return the recalled units of Product to Qualigen in accordance with Qualigen's procedures and instructions after completion of the action. 12.8. European Union Vigilance and Canada Mandatory Problem Reporting. In the event that Qualigen receives any Potentially Serious Complaints regarding the Products from a customer located in the European Union or Canada, then Qualigen shall notify Sekisui promptly, but in any event within no more than (3) business days. If Qualigen receives a complaint from any Competent Authority or Health Canada with regard to the Products, Qualigen shall notify Sekisui promptly, but in any event within no more than 48 hours. Qualigen shall have the responsibility to correspond with the Competent Authority or Health Canada, as the Authorized Representative or Regulatory Correspondent, regarding any such complaints. If corrective actions are required, the cost of the corrective action shall be borne by Qualigen up to the extent such complaint is related to the manufacturing of the Products by Qualigen, or some other cause or event attributable to Qualigen, and shall be borne by Sekisui up to the extent such complaint is due to some other cause or event attributable to Sekisui. 20 + +Source: RITTER PHARMACEUTICALS INC, S-4/A, 3/13/2020 + + + + + +13. Confidential Information; Audit Rights 13.1. Confidentiality Obligation. It is contemplated that in the course of the performance of this Agreement each Party may, from time to time, disclose proprietary and confidential information to the other ("Confidential Information"). Except to the extent expressly authorized by this Agreement or otherwise agreed to in writing, during the Term and for a period of five (5) years following the expiration or termination of this Agreement, the receiving Party shall disclose the other Party's Confidential Information only to its own (or its Affiliates') officers, employees, consultants, Third Party service providers, attorneys, accountants, agents, bankers, lenders, prospective lenders and prospective equity investors, and in each case only if and to the extent necessary to carry out their respective responsibilities under this Agreement or in accordance with the exercise of their rights under this Agreement or in accordance with customary permitted practice (such as to seek or maintain financing or credit), and such disclosure shall be limited to the maximum extent possible consistent with such responsibilities and rights. Except as set forth in the foregoing sentence, neither Party shall disclose Confidential Information of the other to any Third Party without the other's prior written consent. In all events, however, any and all disclosure to a Third Party (or to any such Affiliate) shall be pursuant to the terms of a non-disclosure/nonuse agreement no less restrictive than this Section 13 (or, in the case of attorneys, to a duty and obligation of nondisclosure/nonuse pursuant to the applicable rules of the profession). The Party which disclosed Confidential Information of the other to any Third Party (or to any such Affiliate) shall be responsible and liable for any disclosure or use by such Third Party or Affiliate (or its disclosees) which would have violated this Agreement if committed by the Party itself. Neither Party shall use Confidential Information of the other except as expressly allowed by and for the purposes of this Agreement or in accordance with the exercise of their rights under this Agreement or in accordance with customary permitted practice (such as to seek or maintain financing or credit) or and, after the Term, by Qualigen only to the extent required to continue to offer and provide goods and services to former Sekisui customers of Products. Each Party shall take such action to preserve the confidentiality of each other's Confidential Information as it would customarily take to preserve the confidentiality of its own Confidential Information (but in no event less than a reasonable standard of care). Upon expiration or termination of this Agreement, each Party, upon the other's request, promptly shall return or destroy all the Confidential Information disclosed to the other Party pursuant to this Agreement, including all copies, reflections, analyses and extracts of documents, except for one archival copy (and such electronic copies that exist as part of the Party's computer systems, network storage systems and electronic backup systems) of such materials solely to be able to monitor its obligations that survive under this Agreement. The non-use and non-disclosure obligations set forth in this Section 13 shall not apply to any Confidential Information, or portion thereof, that the receiving Party can demonstrate: (a) is at the time of disclosure in the public domain; 21 + +Source: RITTER PHARMACEUTICALS INC, S-4/A, 3/13/2020 + + + + + +(b) after disclosure, becomes part of the public domain, by publication or otherwise, through no fault of and or without violation of any duty of confidentiality of the receiving Party or its disclosees; (c) at the time of disclosure is already in the receiving Party's possession with no duty of confidentiality, and such prior possession can be demonstrated by the receiving Party by written proof (provided that this subsection shall not apply to Confidential Information exchanged between the Parties before the execution of this Agreement that was subject to a confidentiality obligation at the time of such disclosure); (d) is rightfully received by the receiving Party on a non-confidential basis from an independent Third Party without obligation of confidentiality; provided, however, that to the receiving Party's best knowledge, such information was not obtained by said Third Party, directly or indirectly, from the disclosing Party; or (e) is independently developed by or expressly for the receiving Party, in either case solely by personnel without any access to or use of the disclosing Party's Confidential Information, as shown by receiving Party's contemporaneous written records. In the event either Party must disclose the other Party's Confidential Information in order to comply with applicable governmental regulations or as otherwise required by law or judicial process, such Party shall give reasonable advance notice to the other Party of such proposed disclosure in order that the non-disclosing Party may intercede and oppose such process, and shall use its best efforts to secure a protective order or confidential-treatment order preventing or limiting (to the greatest possible extent and for the longest possible period) the disclosure and/or requiring that the Confidential Information so disclosed be used only for the purposes for which the law or regulation required, or for which the order was issued. The Parties acknowledge that the defined term "Confidential Information" shall include not only a disclosing Party's own Confidential Information but also Confidential Information of an Affiliate or of a Third Party which is in the possession of a disclosing Party. However, both Parties agree not to disclose to the other Party any Confidential Information of a Third Party which is in the possession of such Party, unless the other Party has given an express prior written consent (which specifies the owner of such Confidential Information) to receive such particular Confidential Information. 22 + +Source: RITTER PHARMACEUTICALS INC, S-4/A, 3/13/2020 + + + + + +Notwithstanding anything to the contrary in this Agreement or any other agreement between Sekisui and Qualigen, nothing in this Agreement or any other agreement between the Parties prohibits, or is intended in any manner to prohibit, either Sekisui or Qualigen from reporting possible violations of federal law or regulation to any governmental agency or entity, including but not limited to the Department of Justice, the Securities and Exchange Commission, the Congress, and any agency Inspector General, or making other disclosures that are protected under the whistleblower provisions of federal law or regulation. Sekisui and Qualigen do not need the prior authorization of anyone at the other Party or the other Party's legal counsel to make any such reports or disclosures and they are not required to notify the other Party that it has made such reports or disclosures. 13.2. Use of Names. During the Term, Sekisui is hereby permitted to use the Qualigen name and any Qualigen content (including the content of any existing sales collateral and marketing materials) in any sales collateral, marketing materials or other communications used in connection with the marketing and sales of the Product with the prior written consent of Qualigen, which consent shall not be reasonably withheld or delayed. Other than as provided in the foregoing sentence or to the extent such use is based on a public disclosure previously made by the other Party, during the Term neither Qualigen nor Sekisui shall use the name of the other in any verbal or written communications with any Third Party, except as allowed or contemplated herein, without the prior written consent of the other Party. 13.3. Press Releases. Neither Party shall make any press release or other similar public announcement concerning this Agreement without the prior written consent of the other Party, which consent shall not be unreasonably withheld. Notwithstanding the foregoing, in the event such disclosure or public announcement is required to be made on a more immediate basis to comply with applicable laws, then approval will be deemed granted if no response is received from the non-disclosing Party within the time frames required by law; provided, however, that the disclosing Party provides the non-disclosing Party with notice of the legally required time frame for the approval of the disclosure. Neither Party shall use the trademark or logo of the other Party, its Affiliates or their respective employee(s) in any publicity, promotion, news release or public disclosure relating to this Agreement or its subject matter, except as may be required by law or except with the prior express written permission of such other Party, such permission not to be unreasonably withheld or delayed, or except in Sekisui's advertisement, promotion and sale of the Products in compliance with this Agreement in the ordinary course of business. Notwithstanding the above, once a public disclosure has been made, either Party shall be free to disclose to Third Parties any information contained in said public disclosure, without further pre-review or pre-approval. 13.4. Audit Rights. Each Party shall keep accurate books and records in sufficient detail to comply with applicable laws, rules and regulations and this Agreement and enable the other Party to determine the correctness of any report made under this Agreement and monitor compliance with applicable laws, rules and regulations and this Agreement through the process below. Upon reasonable written notice (and no more often than once every 150 days), the auditing Party shall have the right, during normal business hours, to audit the books and records maintained by the audited Party pursuant to this Agreement to ensure the accuracy of all reports and payments made hereunder. 23 + +Source: RITTER PHARMACEUTICALS INC, S-4/A, 3/13/2020 + + + + + +14. Termination 14.1. Termination by Either Party. Either Party may terminate this Agreement (i) immediately upon written notice in the event of the closing of a Sale Transaction; or (ii) immediately upon written notice if the other files a voluntary bankruptcy petition or makes a general assignment for the benefit of creditors or becomes subject to any order for relief or involuntary bankruptcy petition under any bankruptcy, liquidation, insolvency or similar law which is not dismissed within 60 days. 14.2. Termination by Qualigen. Qualigen may terminate this Agreement (i) upon thirty (30) days prior written notice in the event of any failure of Sekisui to make a Financing Payment that is determined to be due, which failure is not cured within such 30 day period, or (ii) upon sixty (60) days prior written notice in the event of any material breach of the diligence obligations (which is understood not to include failing to meet forecasts for sales to customers) set forth in the Business Plan (as it may be amended by the Parties from time to time), which breach is not cured within such 60 day period. 14.3. Termination by Sekisui. Sekisui may terminate this Agreement upon prior written notice (i) in the event of any failure of Qualigen to meet a milestone set forth in the Development Plan (as it may be amended by the Parties from time to time), or (ii) at any other time upon ninety (90) days' prior written notice of impending termination. 14.4. Effect of Termination. Sections 4.6, 5.5, 8.1, 8.2, 11.1-11.4, 13, 14.4 and 15 shall survive the later of the expiration or termination of the Term. In addition, all provisions that survive termination, that are irrevocable or that arise due to termination shall survive in accordance with their terms. Any other provisions of this Agreement contemplated by their terms to pertain to a period of time following termination or expiration of this Agreement shall survive only for the specified period of time. Upon the expiration or termination of the Term, (i) Sekisui shall cooperate in permitting Qualigen to offer to rehire any Sekisui sales representatives who are primarily responsible for selling the Products as set forth in Section 4.6, (ii) Sekisui shall transfer to Qualigen the ownership of any Sekisui Instruments (subject to reimbursement from Qualigen for the book value (original cost less depreciation) of such Sekisui Instruments), (iii) Qualigen shall reimburse Sekisui for a prorated portion of all prepaid distribution fees paid by Sekisui during the final year of this Agreement to subdistributors, (iv) Sekisui shall assign to Qualigen each subdistributor agreement which Qualigen requests be assigned to Qualigen, and (v) each Party shall remain liable for its obligations accrued before the effective date of such expiration or termination (and for avoidance of doubt: upon expiration or termination Sekisui shall remain liable to pay Qualigen all Financing Payments then due under the Development Plan based upon the milestones that Qualigen has completed by the date of such expiration or termination). In the event there are unfulfilled orders for Products outstanding as of termination of this Agreement, Sekisui may, at its option, cancel such orders upon notice to Qualigen (in which case Qualigen agrees to fill such orders to Sekisui's end customers directly unless such customer chooses to cancel such order) or cause Qualigen to fulfill such orders and invoice Sekisui for amounts owed with respect thereto. If either Party is aware of an impending expiration or termination of the Term, it shall conduct its business with respect to the subject matter of this Agreement in the ordinary course (and not otherwise than in the ordinary course) for the duration of the Term. 24 + +Source: RITTER PHARMACEUTICALS INC, S-4/A, 3/13/2020 + + + + + +15. Miscellaneous 15.1. Independent Contractor. For the purpose of the Agreement each Party shall be, and shall be deemed to be, an independent contractor and not an agent, partner, joint venturer or employee of the other Party. Neither Party shall have authority to make any statements, representations or commitments of any kind, or to take any action which shall be binding on the other Party (except as may be explicitly provided for herein or authorized in writing), and each Party agrees not to purport to do so. 15.2. Assignment. The Agreement shall not be assigned and is not assignable or delegable by either Party without the written consent of the other, which consent shall not be unreasonably withheld; provided, that Sekisui and Qualigen each may assign this Agreement without the consent of the other to a successor in connection with the merger, consolidation or sale of such Party or of all or substantially all of its assets or the portion of its business to which this Agreement relates. 15.3. No Waiver. Failure of either Party to enforce (or reasonable delay in enforcing) a right under this Agreement shall not act as a waiver of that right or the ability to later assert that right relative to the particular situation involved or to terminate this Agreement arising out of any subsequent default or breach. A waiver by a Party of any of the terms and conditions of this Agreement in any instance shall not be deemed or construed to be a waiver of such term or condition for the future, or of any other term or condition hereof. 15.4. Severability. This Agreement is divisible and separable. If any provision of this Agreement is determined by a final and binding court judgment (for which no further appeal is possible) to be invalid, illegal or unenforceable to any extent, such provision shall not be not affected or impaired up to the limits of such invalidity, illegality or unenforceability; the validity, legality and enforceability of the remaining provisions of this Agreement shall not be affected or impaired in any way; and the affected provision shall (if at all possible) be construed as if it had been written in such a way as to both be valid, legal and enforceable and to achieve, to the greatest lawful extent, the evident economic, business and other purposes of such invalid, illegal or unenforceable provision (or portion of provision). 15.5. Notices. All notices required or permitted under this Agreement shall be in writing and shall be deemed given and made (i) if by personal delivery, on the date of such delivery, (ii) if by recognized overnight courier specifying next-business-day delivery, on the next business day after the date of deposit with such courier (by the courier's stated time for enabling next-business-day delivery), (iii) if by email, on the date sent by email if sent during normal business hours of the recipient, and on the next business day if sent after normal business hours of the recipient, and (iv) if by US registered mail, on the fifth business day following such mailing in the US, in each case addressed at the address shown below for, or such other address as may be designated by 10 days' advance written notice hereunder by, such Party. If to Sekisui: Sekisui Diagnostics, LLC 4 Hartwell Place Lexington, MA 02421 Attn: President Email: bob.schruender@sekisuidiagnostics.com 25 + +Source: RITTER PHARMACEUTICALS INC, S-4/A, 3/13/2020 + + + + + +With copies (which shall not constitute notice) to: Sekisui Diagnostics LLC 4 Hartwell Place Lexington, MA 02421 Attn: Vice President, Legal Affairs Email: elizabeth.mcevoy@sekisuidiagnostics.com Foley Hoag LLP Seaport West 155 Seaport Boulevard Boston, MA 02210 Attn: Mark A. Haddad Email: mhaddad@foleyhoag.com If to Qualigen: Qualigen, Inc. 2042 Corte Del Nogal Carlsbad, CA 92011 Attn: President Email: prosinack@qualigeninc.com With a copy (which shall not constitute notice) to: Stradling Yocca Carlson & Rauth, P.C. 4365 Executive Drive, Suite 1500 San Diego, CA 92121 Attn: Hayden Trubitt Email: htrubitt@sycr.com 15.6. Entire Agreement and Modification. The Agreement, including the Exhibits thereto, constitutes the entire understanding between the parties with respect to the subject matter hereof and supersedes and cancels any previous or contemporaneous agreements or understandings, whether oral, written or implied, heretofore in effect, including any letter of intent, and sets forth the entire agreement between Sekisui and Qualigen with respect to the subject matter hereof (provided, that any and all previous nondisclosure/nonuse obligations, including the July 7, 2015 Confidential Disclosure Agreement) are not superseded and remain in full force and effect for all disclosures made prior to the date of this Agreement). Each Party acknowledges that it has not relied, in deciding whether to enter into this Agreement on this Agreement's expressly stated terms and conditions, on any representations, warranties, agreements, commitments or promises which are not expressly set forth within this Agreement. No agreements amending, altering, supplementing or waiving the terms hereof may be made except by the express terms of a written document signed by duly authorized representatives of the Parties. 15.7. Governing Law. This Agreement shall be governed by, and construed and interpreted in accordance with, the laws of the State of Delaware, without reference to its conflicts of laws principles. The parties agree that the United Nations Convention on Contracts for the International Sale of Goods shall be inapplicable to this Agreement. 15.8. Attorney Fees. If litigation becomes necessary to enforce the provisions of this Agreement, the successful Party shall be entitled to recover from the other Party reasonable expenses, including attorneys' and other professional fees, in addition to any other available remedies. 26 + +Source: RITTER PHARMACEUTICALS INC, S-4/A, 3/13/2020 + + + + + +15.9. Headings. The headings contained in this Agreement are for reference purposes only and are in no way intended to describe, interpret, define or limit the scope, extent or intent of this Agreement or any provision hereof. 15.10. Counterparts; Delivery. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Signatures to this Agreement may be delivered by email attachment or other electronic transmission, and such signatures and such delivery shall be fully effective and binding on the Party sending the same. 15.11. Further Assurances. Each Party covenants and agrees to, without the necessity of any further consideration, execute, acknowledge and deliver any and all such further or other documents and instruments and take any such further or other action as may be necessary or appropriate in order to carry out the purposes and intent of this Agreement. 15.12. Force Majeure. No Party shall be liable to any other Party or be deemed to have breached or defaulted under this Agreement for failure or delay in the performance of any of its obligations under this Agreement (other than obligations for the payment of money) for the time and to the extent such failure or delay is caused by or results from acts of God, earthquake, riot, civil commotion, terrorism, war, strikes or other labor disputes, fire, flood, failure or delay of transportation, omissions or delays in acting by a governmental authority, acts of a government or an agency thereof or judicial orders or decrees or restrictions or any other like reason which is beyond the control of the respective Party. The Party affected by force majeure shall provide the other Party with full particulars thereof as soon as it becomes aware of the same (including its best estimate of the likely extent and duration of the interference with its activities), and shall use commercially reasonable efforts to overcome the difficulties created thereby and to resume performance of its obligations hereunder as soon as practicable, and the time for performance shall be extended for a number of days equal to the duration of the force majeure. 15.13. Equitable Relief. Each Party recognizes that the covenants and agreements herein and their continued performance as set forth in this Agreement are necessary and critical to protect the legitimate interests of the other Party, that the other Party would not have entered into this Agreement in the absence of such covenants and agreements and the assurance of continued performance as set forth in this Agreement, and that a Party's breach or threatened breach of such covenants and agreements will cause the opposed Party irreparable harm and significant injury, the amount of which will be extremely difficult to estimate and ascertain, thus making any remedy at law or in damages inadequate. Therefore, each Party agrees that an opposed Party shall be entitled to specific performance, an order restraining any breach or threatened breach of Section 13 and all other provisions of this Agreement, and any other equitable relief (including but not limited to temporary, preliminary and/or permanent injunctive relief), without the necessity of posting of any bond or security. This right shall be in addition to and not exclusive of any other remedy available to such other Party at law or in equity. 15.14. Rights and Remedies are Cumulative. Except to the extent as may be expressly set forth herein, all rights, remedies, undertakings, obligations and agreements contained in or available upon violation of this Agreement shall be cumulative and none of them shall be in limitation of any other remedy or right authorized in law or in equity, or any undertaking, obligation or agreement of the applicable Party. 27 + +Source: RITTER PHARMACEUTICALS INC, S-4/A, 3/13/2020 + + + + + +15.15. Third Party Beneficiaries. Except as expressly set forth in Section 11, the terms and provisions of this Agreement are intended solely for the benefit of each Party hereto and their respective successors or permitted assigns and it is not the intention of the Parties to confer third-party beneficiary rights upon any other person. 15.16. No Implied License. No right or license is granted to Sekisui by implication, estoppel, or otherwise to any know-how, patent or other intellectual property right owned or controlled by Qualigen. 15.17. Exhibits. The Exhibits referred to in the Agreement are deemed incorporated by reference at each place in the Agreement when reference is made thereto. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their duly authorized representatives as of the date first above written. SEKISUI DIAGNOSTICS, LLC QUALIGEN, INC. By: /s/ Robert T. Schruender By: /s/ Paul A. Rosinack Name: Robert T. Schruender Name: Paul A. Rosinack Title: President and COO Title: President and CEO 28 + +Source: RITTER PHARMACEUTICALS INC, S-4/A, 3/13/2020 + + + + + +Exhibit A Revenue, Cost and Available Margin April 28, 2016 Revenue Actual Gross Revenue - Consistent with GAAP revenue recognition, Gross Revenue reflects amounts invoiced or otherwise charged by Sekisui Diagnostics, LLC and its Affiliates to unrelated Third Parties for Products sold to customers, including amounts for any shipping, handling, freight, postage, insurance and transportation charges, to the extent included as a separate line item in the gross amount invoiced. Actual Gross Revenue does not include the following: ● any sales or value added taxes imposed on the sale, delivery or use of the Products. ● Reagent Rental Early Termination Fees. Any such fees collected shall belong exclusively to Qualigen. ● Warranty Agreement Revenue and other Service Contract Revenue. Any such revenue shall belong exclusively to Qualigen. Notwithstanding the foregoing, amounts invoiced by Sekisui and its Affiliates for sales of Products among Sekisui and its Affiliates ('Sekisui Intercompany Sales') for resale shall not be included in the computation of Net Revenue. Actual 'Gross to Net' (GTN) Adjustments - consist of: a) discounts, refunds, rebates, sub distributor "channel" fees, chargebacks, retroactive price adjustments, and any other allowances given and taken which effectively reduce the net selling price (other than such which have already diminished the gross amount invoiced), including, without limitation, volume discounts. b) Product returns and allowances Net Revenue - Actual Gross Revenue less Actual GTN Adjustments Cost of Goods Sold (COGS) Components of COGS include: Actual Material Costs - Consists of: ● Qualigen Bill of Material (BOM) Standard Costs (for instrument, reagent kit and related consumable products sold by Sekisui): ○ raw materials ○ component materials ○ packaging materials ● Allocated standard shipping material costs, including envirocoolers, shipping boxes and filler materials ● Actual cost of ice packs ● Actual outbound freight expense (as applicable based on shipping terms) for sales and rentals of instruments, and sales of reagents and related consumables. Exhibit A-1 + +Source: RITTER PHARMACEUTICALS INC, S-4/A, 3/13/2020 + + + + + +(Note: Qualigen records costs of raw material, component, packaging and shipping materials (excluding ice packs) at standard, and records manufacturing variances including purchase price and material usage variances as part of Labor & Overhead. If Qualigen's manufacturing variances exceed 3% of its total production costs in any True-Up Period referenced in Exhibit D, such variances are to be allocated between inventory and COGS based on total inventory turns for the applicable True-Up Period) Actual Labor & Overhead Costs - Consists of: Instrument and Reagent Manufacturing Cost Center Expenses - Including direct instrument and reagent manufacturing-related wages and related taxes and benefits, direct Property Plant & Equipment depreciation, direct production supplies, direct production-related repairs & maintenance expenses, inbound freight expenses, material variances and allocated manufacturing-related occupancy expenses for expenses such as rent, utilities, janitorial services, telephone expense, supplies and depreciation. Reagent manufacturing also includes an allocation of R&D department expenses relating to formulation oversight. In Qualigen's FY 2016 financial data, this allocation represented approximately $60k. Workers' comp insurance is included as part of the occupancy allocation in Qualigen's FY2016 financial results. Beginning with Qualigen's FY 2017 financial reporting, Workers' comp insurance will be included as a direct allocation to the Instrument and Reagent Manufacturing cost centers based on salary amounts. Quality Cost Center Expenses - Including wages and related taxes and benefits, equipment repairs and maintenance expenses, professional consulting services, supplies, dues & subscriptions, filing fees, depreciation and allocated Quality occupancy expenses. Wages include expenses for VP - Operations. The Quality Cost Center is responsible for: ● Regulatory filings ● Quality System Management ● Complaint review ● Batch record review ● Document Control ● Quality Control (QC), including: Ø Test incoming raw materials, WIP, and FG items Ø Complaint testing confirmation Ø Product troubleshooting Exhibit A-2 + +Source: RITTER PHARMACEUTICALS INC, S-4/A, 3/13/2020 + + + + + +Materials Management Cost Center Expenses - Including wages and related taxes and benefits, professional consulting services, supplies, depreciation and allocated Material Management occupancy expenses. The Materials Management Cost Center is responsible for: ● Production planning ● Scheduling ● Purchasing ● Shipping & Receiving Occupancy allocations to Instrument and Reagent manufacturing, Quality and Materials Management departments are based on applicable square footage percentages. Actual Labor & Overhead Costs also include the standard cost of FastPacks consumed for QC testing, retainage, scrap, and obsolete inventory write-downs. Actual Labor & Overhead Costs do not include instrument repair costs. Such costs shall be the responsibility of Qualigen with respect to instruments under warranty that are repaired or replaced, and shall be included in the instrument transfer prices with respect to refurbished instruments sold to Sekisui. Currently, the Medical Device Excise Tax provision of the Affordable Care Act is repealed (from Jan. 2016 through December 2017). However, should this provision be re-enacted, or similar such provision enacted, the cost of such excise taxes will be included as a cost element included in Actual Cost of Goods. The margin share and true-up process will reflect this cost. Any duty expenses incurred by Sekisui Diagnostics to enable sales of Products will be included as a cost element included in Actual Cost of Goods. The margin share and true-up process will reflect this cost. Actual 'Reagent Rental' Instrument Depreciation Costs - Reflects depreciation expenses for all Product-related instruments placed in service before and after execution of the DISTRIBUTION AND DEVELOPMENT AGREEMENT. Assets placed in service before April 2015 reflect a 5 year useful life. Assets placed in service beginning April 2015 reflect a 3 year useful life. Sekisui Diagnostics has a $5,000 Asset Capitalization Threshold (ACT) and all capitalized instruments will utilize a 3 year life for all Reagent Rental units it owns. (all instruments purchased at costs < $5,000 will be expensed, with the expense included as part of COGS in the Margin Sharing True-Up process.) All depreciation expenses reflect straight-line depreciation. Available Margin Available Margin is defined and calculated as: Net Revenue less Cost of Goods Sold (COGS) Exhibit A-3 + +Source: RITTER PHARMACEUTICALS INC, S-4/A, 3/13/2020 + + + + + +Exhibit B-1 + +Source: RITTER PHARMACEUTICALS INC, S-4/A, 3/13/2020 + + + + + +Exhibit B-2 + +Source: RITTER PHARMACEUTICALS INC, S-4/A, 3/13/2020 + + + + + +Exhibit C Development Plan April 28, 2016 FY 2016 Target Review Month April 2016 August 2016 December 2016 Payment ($000) $1,000 $1,000 $1,000 Payment Due Date May 1, 2016 September 1, 2016 January 1, 2017 Criteria for Payment Milestones Completed (Dates shown are projected Completion dates) + +Execution of Definitive Agreement ● FP2.0 Analyzer Validated Software 8/15 ● Vitamin D-Clinical Studies 11/18 + +● Delivery of first 5 FP2.0 Analyzer Prototypes 8/8 ● Vitamin D-510k Submission 12/16 + +● Vitamin D- Design Verification 8/12 ● Testosterone-Feasibility 12/16 ● FP2.0 Analyzer Production - Order Production Tooling 10/24 Milestones in progress and on schedule (Dates shown are projected start and completion dates) + +● Vitamin D- Design Transfer/ Design Validation (8/22 - 10/21) ● Vitamin D-CE Mark (12/19 - 1/13) + +● Testosterone-Feasibility (7/11 - 12/16) ● Vitamin D-CLIA Waiver Study (12/12 - 3/10) ● FP2.0 Analyzer Production - Order Production Tooling (7/19 - 10/24) ● Testosterone- Design Verification (12/19 - 3/10) ● Pouch Production Line, Issuance of Purchase Order to Manufacturer ($600K on 10/28/16) + +● TSH-Feasibility (1/9 - 6/16) ● FP2.0 Analyzer Production - Draft Production Documents (10/25- 12/19) ● Pouch Production Line - Concept Design (10/31 - 1/6) ● Pouch Production Line - Engineering Drawings ($600K on 3/17/17) Exhibit C-1 + +Source: RITTER PHARMACEUTICALS INC, S-4/A, 3/13/2020 + + + + + +Exhibit C Development Plan April 28, 2016 FY 2017 Target Review Month April 2017 August 2017 January 2018 Payment ($000) $1,300 $800 $375 Payment Due Date May 1 and June 1, 2017 September 1, 2017 February 1, 2018 Criteria for Payment May be split ½ May 1 and ½ June 1 if underlined milestones not completed by May 1. Milestones Completed (Dates shown are projected Completion dates) + +● Vitamin D-CE Mark 1/13 ● Vitamin D-510k Clearance 5/19 ● Vitamin D-Commercialized 10/30 ● Vitamin D-CLIA Waiver Study 3/10 ● Vitamin D-CLIA Waiver Submission 5/22 ● Testosterone-510k Clearance 12/22 ● Vitamin D-510k Clearance 5/19 ● Testosterone-CE Mark 8/18 ● Testosterone-CLIA Waiver Study 10/13 ● Vitamin D-CLIA Submission 5/22 ● Testosterone-510k Submission 7/21 ● Testosterone-CLIA Waiver Submission 12/25 ● Testosterone- Design Verification Review 3/24 ● TSH-Feasibility 6/16 ● TSH- Design Transfer/Design Validation 9/25, 10/30 ● FP2.0 Analyzer Production - Setup Production Line/Training/QC Documents 3/6 + +● FP2.0 Analyzer Pilot Builds 1 through 3 8/14 ● PSA-Feasibility 12/15 + +● Pouch Production Line - Hardware/Software Design 1/9 ● Pouch Production Line - Acceptance Review 7/7 ● FT4-Feasibility 12/15 + +● Pouch Production Line Installation 8/18 ● Pouch Production Line in service 10/20 ($200K) Milestones in progress and on schedule (Dates shown are projected start and completion dates) + +● Testosterone-Design Transfer/Design Validation (3/27 - 5/26) + +● Testosterone-CLIA Waiver Study (7/17 - 10/13) ● TSH-Clinical Studies (11/27 - 12/29) + +● TSH-Feasibility (1/9 - 6/16) ● TSH- Design Verification (6/19 - 9/22) ● PSA-Design Verification (12/18 - 3/23) ● FP2.0 Analyzer Production - Order Parts (3/7 - 7/24) ● TSH- Design Transfer/ Design Validation (9/25 - 11/24) ● FT4-Design Verification (12/18 - 3/23) ● Pouch Production Line Fabrication (3/6 - 5/12) ● PSA-Feasibility (7/10 - 12/15) + +● Pouch Production Machine Acceptance Test ($600K on 7/17/17) + +● FT4-Feasibility (7/10 - 12/15) + +● Pouch Production Line Training (8/21 - 9/1) Exhibit C-2 + +Source: RITTER PHARMACEUTICALS INC, S-4/A, 3/13/2020 + + + + + +Exhibit C Development Plan April 28, 2016 FY 2018 Target Review Month April 2018 August 2018 January 2019 Payment ($000) $365 $232 $100 Payment Due Date May 1, 2018 September 1, 2018 February 1, 2019 Criteria for Payment Milestones Completed (Dates shown are projected Completion dates) + +● TSH-510k Submission 1/19 ● Testosterone-Commercialized 6/4 ● TSH-Commercialized 12/3 ● TSH-CE Mark 2/16 ● TSH-510k Clearance 6/22 ● PSA-CLIA Waiver Study 9/14 ● TSH-CLIA Waiver Study 4/13 ● TSH-CLIA Waiver Submission 6/25 ● PSA-510k Clearance 12/21 + +● PSA- Design Verification 3/9 ● PSA-CE mark 7/23 ● PSA-CLIA Submission 12/24 ● FT4- Design Verification 3/9 ● FT4-CE mark 7/23 ● FT4-CLIA Waiver Study 9/14 ● FT4-510 Clearance 12/21 ● FT4-CLIA Submission 12/24 Milestones in progress and on schedule (Dates shown are projected start and completion dates) + +● Testosterone CLIA Waiver Submission under review (12- 26 - 4/30) + +● TSH-CLIA Waiver Submission under review (6/26 - 10/29) + +● PSA- Design Transfer/ Design Validation (3/26 - 5/25) ● PSA-CLIA Waiver Study (7/16 - 9/14) ● FT4- Design Transfer/ Design Validation (3/26 - 5/25) ● FT4-CLIA Waiver Study (7/16 - 9/14) ● Payments made based on progress against the Development Plan as evidenced by completion of milestones indicated and progress against milestones yet to be completed. Target review month is estimated timing only. ● Completion of milestones will be based upon the completion of the deliverables, to Sekisui's satisfaction, in accordance with Qualigen's standard product development practices as defined in Qualigen's Quality System Procedure Document #91000002 Rev018. Key terms, such as Feasibility, Verification, Validation and Transfer, are also defined in Qualigen's Quality System Procedure Document #91000002 Rev018. Exhibit C-3 + +Source: RITTER PHARMACEUTICALS INC, S-4/A, 3/13/2020 + + + + + +Exhibit D-1 + +Source: RITTER PHARMACEUTICALS INC, S-4/A, 3/13/2020 + + + + + +Exhibit D Transfer Price and True-Up Process April 22, 2016 Transfer Prices Initial Transfer Prices for all Products in aggregate are based on Qualigen's actual April 2015 - December 2015 COGS plus an amount estimated to represent Qualigen's 10% share of the actual April 2015 - December 2015 Available Margin as defined in Exhibit A and summarized in Table C. Going forward, transfer prices for Products other than reagent kits will be set as of each October 1 and April 1 for the prospective 6-month period based on Qualigen's standard unit cost in effect on the first day of the month prior to the date the new transfer prices are agreed upon (either September 1 and March 1) for the prospective 6-month period. Going forward, transfer prices for reagent kits will be set as of each October 1 and April 1 for the prospective 6-month period based on historical COGS for the earliest 6 months of the 9-month period ended the day before such date plus an amount that is estimated to represent Qualigen's applicable share of Available Margin with regard to the retrospective 6-month period as noted in Table A below. Table A below provides timeframes for the contract term. Both companies' fiscal years run from April 1st to March 31st. Table A + +Transfer Price Effective Transfer Price Basis: Retrospective Periods 5/1/2016 - 9/30/2016 4/1/2015 - 12/31/2015 10/1/2016 - 3/31/2017 1/1/2016 - 6/30/2016 4/1/2017 - 9/30/2017 7/1/2016 - 12/31/2016 10/1/2017 - 3/31/2018 1/1/2017 - 6/30/2017 4/1/2018 - 9/30/2018 7/1/2017 - 12/31/2017 10/1/2018 - 3/31/2019 1/1/2018 - 6/30/2018 4/1/2019 - 9/30/2019 7/1/2018 - 12/31/2018 10/1/2019 - 3/31/2020 1/1/2019 - 6/30/2019 4/1/2020 - 9/30/2020 7/1/2019 - 12/31/2019 10/1/2020 - 3/31/2021 1/1/2020 - 6/30/2020 Exhibit D-2 + +Source: RITTER PHARMACEUTICALS INC, S-4/A, 3/13/2020 + + + + + +True-Up Process Per Table B below, for each "True-Up Period", an all-Products true-up will be prepared to ensure each party receives their contractual margin share of the actual Available Margin. The true-up process will result in a payment due from either party, depending on which party has received excess Available Margin for the True-Up Period. True-ups will be determined every six months. The first true-up will be based on a stub period consisting of results from the first day of this Agreement to September 30, 2016. Table B below provides the true-up periods and Available Margin shares. Table B True-Up Period True-up Completed Available Margin Split Sekisui/Qualigen 5/1/2016 - 9/30/2016 10/5/2016 90% / 10% 10/1/2016 - 3/31/2017 4/5/2017 90% / 10% 4/1/2017 - 9/30/2017 10/4/2017 90% Apr, 70% May - Sep / 10% Apr, 30% May - Sep 10/1/2017 - 3/31/2018 4/4/2018 70% / 30% 4/1/2018 - 9/30/2018 10/3/2018 70% Apr, 65% May - Sep / 30% Apr, 35% May - Sep 10/1/2018 - 3/31/2019 4/3/2019 65% / 35% 4/1/2019 - 9/30/2019 10/3/2019 65% / 35% 10/1/2019 - 3/31/2020 4/4/2020 65% / 35% 4/1/2020 - 9/30/2020 10/3/2020 65% / 35% 10/1/2020 - 3/31/2021 4/3/2021 65% / 35% Sekisui and Qualigen jointly have the responsibility to review and approve each true-up calculation. The process follows the following steps: 1) Qualigen provides Qualigen-incurred COGS information to Sekisui (see Table C) 2) Sekisui adds its Net Revenue information and Sekisui-incurred COGS information (see Table C) to the Qualigen-incurred COGS information and develops the first draft of the true-up calculation 3) Qualigen and Sekisui review and agree on the calculation. Both parties will use best efforts to complete the review and approval process in a timely manner. Note: to ensure the True-up calculation is available for recording in September or March results, both Qualigen and Sekisui need to be diligent in providing their data on a timely basis according to the dates set forth in Table B above. Exhibit D-3 + +Source: RITTER PHARMACEUTICALS INC, S-4/A, 3/13/2020 + + + + + +Table C Available Margin Element Qualigen Sekisui Notes Net Revenue x Sales to customer (e.g. McKesson, Direct or EMEA), less deductions expressly allowed by the Exhibit A definition Material cost within COGS x x Sekisui cost is for outbound freight and expensed Sekisui Instruments after 5/1/2016 (instruments sold to customers by Sekisui, and provided to customers through the reagent rental program when instrument cost is less than Sekisui's capitalization threshold) Labor & Overhead within COGS x Qualigen's manufacturing variances will be charged to COGS in the period unless such variances exceed 3% of its total production costs, in which case the variances are to be allocated between inventory and COGS based on total inventory turns for the True-Up Period Instrument Depreciation x x Sekisui's cost is for Sekisui Instruments purchased after 5/1/2016 and provided to customers through the reagent rental program (when instrument cost is greater than Sekisui's capitalization threshold). All Available Margin Elements referenced above shall not include any of Qualigen's sales to Sekisui that have not been sold at the end of the True- Up Period by Sekisui to its customers. Exhibit D-4 + +Source: RITTER PHARMACEUTICALS INC, S-4/A, 3/13/2020 + + + + + +EXHIBIT E Qualigen Retained Customers Acct # Name City State 11436 Low T Centers, Inc. and Affiliates Southlake TX 08260 Chicago Prostate Cancer Center Westmont IL 02217 Elias Tawil, MD Pittsburg KS 03268 Lake Success Urological Lake Success NY 01815 Mason City Clinic Mason City IA 02358 Surgical Assoc. Northwest PC Federal Way WA 03197 Surgical Assoc. Northwest, PC Auburn WA 02845 Urological Assoc. Grand Island Grand Island NE 02575 Urology Care, Inc.- Jefferson Jefferson City MO 01343 Warren L. Lowry, M.D., S.C Rockford IL 00051 Iowa Clinic West Des Moines IA Exhibit E-1 + +Source: RITTER PHARMACEUTICALS INC, S-4/A, 3/13/2020 + + + + + +Exhibit F Qualigen Financial Process flow overview: Requirements for Purchasing/OTC/Finance reporting Updated 4/15/16 All customer and inventory transactions will be recorded at SD at a summary level. Qualigen would maintain all supporting detail on their accounting system. Procure to Pay 1) Qualigen to provide SD purchasing an SD inventory report by SKU on the first work day of the month. 2) SD and Qualigen to prepare and agree to a monthly rolling 12 month product forecast by SKU to be provided to Qualigen by SD purchasing the fifth work day of the month. 3) SD Purchasing will coordinate with Qualigen to determine safety stock levels and re-order timing based on current SD inventory levels and lead times. 4) SD Purchasing will submit a purchase order for inventory to Qualigen monthly. 5) Qualigen will invoice SD for inventory purchased according to the SD Purchase order. 6) SD A/P to pay invoice from Qualigen per agreed upon terms of payment. Order to Cash 1) SD customer to submit Purchase order to Qualigen for Qualigen products. 2) Sales order entered into Qualigen ERP system by Qualigen customer service on behalf of SD. 3) Credit card customers provide credit card information to Qualigen customer service via SD credit card form. Qualigen customer service provides to SD finance credit card information for verification prior to shipment. 4) Order fulfilled and shipped to SD customer by Qualigen. 5) Qualigen generates SD invoice to customer at full commercial value on behalf of SD. 6) Freight charges should be managed as freight collect on Customer account or SD account. 7) Invoice sent to SD customer by Qualigen on behalf of SD. 8) Customer remits to SD lock box 9) Qualigen manages the cash applications for SD accounts receivable. 10) Customer relationship for management of debt collections to be managed by SD. Exhibit F-1 + +Source: RITTER PHARMACEUTICALS INC, S-4/A, 3/13/2020 + + + + + +Finance month end reporting 1) Qualigen to provide no later than work day 2 the following information for SD related data to SD Finance: a. A/R balances by Customer b. Inventory Balances by SKU - quantity, and SD cost (transfer price) c. Units Sold in the month by SKU and cost (transfer price, if available) d. Summary Invoiced Revenue by Customer by SKU e. Prompt pay, channel fees, chargebacks information f. Fixed Asset information, e.g. instrument by customer, location, serial #, etc. 2) SD Finance will create journal entries to record Sales, A/R, COGS, Inventory and any related reserve or revenue adjustments using monthly reports with information provided by Qualigen. 3) SD Finance will coordinate with Qualigen to conduct an annual physical count of inventory at their location. 4) SD finance and Qualigen finance will schedule routine meetings to discuss monthly reports or discrepancies. 5) SD finance reconciles margin split, per the agreement terms, with Qualigen. Qualigen will have custodial responsibility for Sekisui inventory held at Qualigen. Any inventory shrinkage or damage to Sekisui inventory while at Qualigen will be Qualigen's responsibility. Exhibit F-2 + +Source: RITTER PHARMACEUTICALS INC, S-4/A, 3/13/2020 + + + + + +Exhibit F-3 + +Source: RITTER PHARMACEUTICALS INC, S-4/A, 3/13/2020 + + + + + +Exhibit F-4 + +Source: RITTER PHARMACEUTICALS INC, S-4/A, 3/13/2020 + + + + + +Exhibit F-5 + +Source: RITTER PHARMACEUTICALS INC, S-4/A, 3/13/2020 + + + + + +SCHEDULE 2.1 Qualigen Distribution Agreements 1. McKesson Distribution Agreement effective April 20, 2010 as amended August 12, 2013 and April 20, 2015 2. McKesson Marketing Service Agreement effective July 1, 2014 3. Woongbee MeDiTech Inc. Distribution Agreement dated November 12, 2002 4. Nanova Co., Ltd. Distribution Agreement dated October 29, 2014 5. Axon Lab A.G. Distribution Agreement effective September 22, 2015 The following Distribution Agreements also shall be assigned upon Sekisui's request. A. Alpha Diagnostics Sp. Z o.o Distribution Agreement dated November 15, 2010 B. Cariad Technologies Ltd. distribution Agreement dated April 15, 2005, as amended May 30, 2005 C. CliniLine, S.A. Distribution Agreement dated February 5, 2003, as amended October 27, 2004 Schedule 2.1 + +Source: RITTER PHARMACEUTICALS INC, S-4/A, 3/13/2020 \ No newline at end of file diff --git a/full_contract_txt/SANDRIDGEENERGYINC_08_06_2009-EX-10.6-OPERATIONS AND MAINTENANCE AGREEMENT.txt b/full_contract_txt/SANDRIDGEENERGYINC_08_06_2009-EX-10.6-OPERATIONS AND MAINTENANCE AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..a48da6f13a73c803e9ca6ed591671fed5769a853 --- /dev/null +++ b/full_contract_txt/SANDRIDGEENERGYINC_08_06_2009-EX-10.6-OPERATIONS AND MAINTENANCE AGREEMENT.txt @@ -0,0 +1,737 @@ +Exhibit 10.6 + +OPERATIONS AND MAINTENANCE AGREEMENT + +Between + +Piñon Gathering Company, LLC + +And + +SandRidge Midstream, Inc. + + + + + + + + + + + + + +TABLE OF CONTENTS + +i + + PAGE ARTICLE I DEFINITIONS 1 ARTICLE II ENGAGEMENT OF OPERATOR 6 2.1 Engagement 6 2.2 Independent Contractor 6 2.3 Owner Cooperation 6 ARTICLE III TERM; RESIGNATION OR REMOVAL OF OPERATOR 7 3.1 Term 7 3.2 Owner Default 7 3.3 Operator Default 7 3.4 Cooperation with Owner or Successor Operator 8 3.5 Effect of Termination 8 3.6 No Breach 8 ARTICLE IV DUTIES AS OPERATOR 9 4.1 Duties as Operator 9 4.1.1 Operation and Maintenance of the Gathering System 9 4.1.2 Purchase of Material and Supplies 9 4.1.3 Personnel 9 4.1.4 Payment of Operating Expenses 9 4.1.5 Proposed Operating Expense Budget 10 4.1.6 Capital Projects 10 4.1.7 Emergencies 11 4.1.8 Reporting By Operator 11 4.1.9 Commercial Activities 12 4.1.10 Regulatory Affairs 12 4.1.11 Devotion of Time 12 4.2 Standard of Care 12 4.3 Limitation of Authority 13 4.3.1 Binding Owner 13 4.3.2 Asset Sales 13 4.3.3 Material Alteration of Owner's Business 13 4.3.4 Debt 13 ARTICLE V COST REIMBURSEMENT 13 5.1 Responsibility for Costs and Expenses 13 5.2 Procedure 13 + + + + + + + +TABLE OF CONTENTS + +ii + + PAGE 5.2.1 Invoicing and Payment 13 5.2.2 Disputes 14 5.3 Setoff 14 ARTICLE VI ACCOUNTING; REPORTS; RECORDS 14 6.1 Accounting Methods 14 6.2 Financial Statements 14 6.3 Accounting and Taxation 15 6.3.1 Maintenance of Accounts 15 6.3.2 Preparation of Tax Returns 15 6.3.3 Owner to Supply Information 16 6.4 Banking 16 6.5 Independent Audits 16 6.6 Credit Inquiries 17 ARTICLE VII FORCE MAJEURE 18 7.1 Procedure 18 7.2 Strikes 18 ARTICLE VIII INSURANCE AND INDEMNIFICATION 18 8.1 Operator Insurance 18 8.2 Contractors 19 8.3 Notice of Claims 20 8.4 Mutual Release and Indemnification 20 8.4.1 Owner's Indemnification 20 8.4.2 Operator's Indemnification 20 ARTICLE IX GENERAL PROVISIONS 21 9.1 Notices 21 9.2 Rights 21 9.3 Applicable Laws 22 9.4 Rules of Construction 22 9.5 Governing Law 22 9.6 Dispute Resolution 22 9.6.1 Negotiation 22 9.6.2 Jurisdiction and Venue 22 9.6.3 Jury Waiver 23 9.6.4 Costs and Expenses 23 9.7 Limitation of Liability 23 + + + + + + + +TABLE OF CONTENTS + +EXHIBITS: + + EXHIBIT A — DUTIES AND RESPONSIBILITIES OF OPERATOR + + EXHIBIT B — FORM OF MONTHLY OPERATING AND FINANCIAL REPORT + +iii + + PAGE 9.8 Entirety of Agreement, Amendments 23 9.9 Waivers 24 9.10 Exhibits 24 9.11 Headings 24 9.12 Assignment 24 9.13 Rights and Remedies 24 9.14 Counterparts 24 9.15 No Third Party Beneficiary 24 9.16 Further Assurances 25 + + + + + + + +OPERATIONS AND MAINTENANCE AGREEMENT + + This OPERATIONS AND MAINTENANCE AGREEMENT dated June 30, 2009 (the "Effective Date"), is made and entered into by and between Piñon Gathering Company, LLC, a Delaware limited liability company ("Owner"), with offices at 333 Clay Street, Suite 4150, Houston, Texas 77002, and SandRidge Midstream, Inc., a Texas corporation ("Operator"), with offices at 123 Robert S. Kerr Avenue, Oklahoma City, Oklahoma 73102. + +RECITALS + + A. Pursuant to that certain Membership Interest Purchase Agreement between Operator and TCW Pecos Midstream, L.L.C., a Texas limited liability company ("TCW Pecos Midstream") dated as of even date herewith (the "Membership Interest Purchase Agreement"), TCW Pecos Midstream has purchased from Operator all issued and outstanding membership interests in Owner, which owns the Gathering System (as hereinafter defined). + + B. Owner wishes to retain Operator to maintain and operate the Gathering System and advance the commercial interests of Owner through the negotiation and execution of agreements relative to the commercial offerings provided by Owner, as well as administering the business and regulatory affairs of Owner relating to the Gathering System, all in accordance with the terms and conditions set forth below. + + NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements contained herein, Operator and Owner hereby agree as follows: + +ARTICLE I DEFINITIONS + + Except as otherwise defined in this Article I, capitalized terms used in this Agreement shall have the meanings assigned to them in the Gathering Agreement. + + "Adjustment Claims" shall have the meaning set forth in Section 6.5. + + "Affiliate" means, with respect to any Person, any other Person that, directly or indirectly, controls, is controlled by, or is under common control with, such specified Person through one or more intermediaries or otherwise. For the purposes of this definition, "control" means, where used with respect to any Person, the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of Voting Securities or interests, by contract or otherwise, and the terms "controlling" and "controlled" have correlative meanings. + + "Agreement" means this Operations and Maintenance Agreement (including all exhibits), as amended from time to time in accordance with the terms hereof. + + "Audit Costs" shall have the meaning set forth in Section 6.5. + + + + + + + + + + "Business Day" means any calendar day, other than a Saturday or Sunday, on which commercial banks in Dallas, Texas are open for business. + + "Calendar Year" means the time period from January 1 through December 31 of the same calendar year. + + "Capital Project" means any capital expenditure to repair, maintain, construct, expand, or modify the Gathering System. + + "Capital Project Proposal" shall have the meaning set forth in Section 4.1.6. + + "Claim" means any lawsuit, claim, proceeding, investigation, review, audit or other cause of action of any kind. + + "Company Conveyance" means that certain Assignment of Membership Interests dated as of June 30, 2009, between Operator and TCW Pecos Midstream, together with all amendments, modifications or waivers thereto. + + "Confidentiality and Disclosure Agreement" means that certain Confidentiality and Disclosure Agreement dated as of June 30, 2009, between SandRidge Energy, Inc., TCW Asset Management Company, and Piñon Gathering Company, LLC, together with all amendments, modifications or waivers thereto. + + "Constituent of Concern" means any substance defined as a hazardous substance, hazardous waste, hazardous material, toxic substance, solid waste, pollutant or contaminant by an Environmental Law. + + "Dedicated Gas" shall have the meaning ascribed to such term in the Gathering Agreement. + + "Effective Date" shall have the meaning set forth in the preamble to this Agreement. + + "Emergency" means a sudden or unexpected event that causes, or risks causing, imminent material damage to the Gathering System, death or injury to any Person, or material damage to property or the environment. + + "Emergency Work" shall have the meaning set forth in Section 4.1.7. + + "Enterprise Gathering Agreement" means that certain Gas Gathering Agreement dated as of June 26, 2009, between Enterprise Products Operating, LLC and Operator, together with all amendments, modifications or waivers thereto. + + "Environmental Law" means all applicable Laws and Environmental Permits of any Governmental Authority relating to the environment, natural resources, or the protection thereof, including, without limitation: (a) all requirements pertaining to liability for reporting, management, licensing, permitting, investigation, and remediation of emissions, discharges, releases, or threatened releases of a Constituent of Concern; and (b) CERCLA, the Hazardous Materials Transportation Act, 49 U.S.C. § 5101 et seq. the Federal Clean Water Act, the Federal + +2 + + + + + + + +Clean Air Act, the Federal Solid Waste Disposal Act (which includes the Resource Conservation and Recovery Act), the Federal Toxic Substances Control Act, and the Federal Insecticide, Fungicide and Rodenticide Act, the Oil Pollution Act of 1990, 33 U.S.C. § 2701 et seq., and the Safe Drinking Water Act, 42 U.S.C. § 300f et seq. and any applicable Law relating to health, safety, the environment, natural resources or the protection thereof, each as amended from time to time, including any regulations promulgated pursuant thereto, and any state or local counterparts. + + "Environmental Permits" all permits, licenses, registrations, authorizations, certificates and approvals, and any other similar items, of Governmental Authorities required by Environmental Laws and necessary for or held in connection with the ownership and/or operation the Gathering System or any of the transactions contemplated hereby. + + "Force Majeure" means any cause or causes not reasonably within the control of the Party claiming suspension and which, by the exercise of reasonable diligence, such Party is unable to prevent or overcome, including, without limitation, acts of God, acts, omissions to act, and/or delays in action of federal, state, or local government or any agency thereof, strikes, lockouts, work stoppages, or other industrial disturbances, acts of a public enemy, sabotage, wars, blockades, insurrections, riots, acts of terror, epidemics, landslides, lightning, earthquakes, fires, storms, storm warnings, floods, washouts, extreme cold or freezing weather, arrests and restraints of governments and people, civil or criminal disturbances, interruptions by governmental or court orders, present and future valid orders of any regulatory body having jurisdiction, explosions, mechanical failures, breakage, or accident to equipment installations, machinery, compressors, or lines of pipe, and associated repairs, freezing of wells or lines of pipe, partial or entire failure of wells, pipes, facilities, or equipment, electric power unavailability or shortages, failure of pipelines or carriers to transport, partial or entire failure or refusal of operators of upstream or downstream pipelines or facilities to receive gas, governmental regulations, and inability to obtain or timely obtain, or obtain at a reasonable cost, after exercise of reasonable diligence, pipe, materials, equipment, rights-of- way, servitudes, governmental approvals, or labor, including those necessary for the facilities provided for in this Agreement. + + "GAAP" means generally accepted accounting principles, consistently applied. + + "Gathering Agreement" means that certain Gas Gathering Agreement dated as of even date herewith by and between SandRidge Exploration and Production, LLC, as "Shipper," and Owner, as "Gatherer," as amended, restated or otherwise modified from time to time. + + "Gathering System" shall have the meaning ascribed to such term in the Gathering Agreement. + + "Governmental Authority" means any federal, state, municipal, local or similar governmental authority, regulatory or administrative agency, court or arbitral body with jurisdiction over the Parties, this Agreement, any of the transactions contemplated hereby or the Gathering System. + + "Guaranty Agreements" means, collectively, that certain (a) Guaranty Agreement dated as of June 30, 2009, by SandRidge Energy, Inc. in favor of TCW Pecos Midstream, (b) Guaranty + +3 + + + + + + + +Agreement dated as of June 30, 2009, by SandRidge Energy, Inc. in favor of Owner, (c) Guaranty Agreement dated as of June 30, 2009, by SandRidge Exploration and Production, LLC in favor of Owner, and (d) Guaranty Agreement dated as of June 30, 2009, by Operator in favor of Owner, in each case, together with all amendments, modifications or waivers thereto. + + "Intercompany Conveyance" means that certain Assignment, Bill of Sale and Conveyance dated as of June 30, 2009, between Operator and Owner, together with all amendments, modifications or waivers thereto. + + "Law" means any statute, writ, law, common law, rule, regulation, ordinance, order, judgment, injunction, award, determination or decree of a Governmental Authority, or any requirement under the common law. + + "LLC Agreement" means that certain Amended and Restated Limited Liability Company Agreement of Piñon Gathering Company, LLC, together with all amendments, modifications or waivers thereto. + + "Liability Claim" means a Claim arising out of the administration, operation, or maintenance of the Gathering System, or arising out of or incidental to the activities carried on or work performed or required by this Agreement. + + "Loss" means any loss, cost, expense, liability, damage, sanction, judgment, lien, fine, or penalty, including reasonable attorney's and consultant's fees and expenses, incurred, suffered or paid by, or resulting to, the applicable indemnified Persons on account of (i) injuries (including death) to any Person or damage to or destruction of any property, sustained or alleged to have been sustained in connection with or arising out of the matters for which the indemnifying Party has indemnified the applicable indemnified Persons, (ii) any failure of any representation or warranty made by Operator in this Agreement to be true and correct when made, or (iii) the breach of any covenant or agreement made or to be performed by the indemnifying Party pursuant to this Agreement. + + "Material Overpayment" shall have the meaning set forth in Section 6.5. + + "Membership Interest Purchase Agreement" shall have the meaning set forth in the first recital of this Agreement. + + "Operator" shall have the meaning set forth in the preamble to this Agreement. + + "Operator Change of Control" means the occurrence of an event where upon (i) at least seventy-five percent (75%) of the equity interests in Operator and (ii) at least seventy-five percent (75%) of the monthly volumes of Dedicated Gas projected to be produced during the period extending from the date of calculation to the estimated date of the Trigger Event shall cease to be owned, directly or indirectly, by the same Person. + + "Operator Indemnified Parties" means, collectively, Operator, its successors and permitted assigns, and their respective Affiliates, shareholders, members, partners, officers, directors, employees, and agents. + +4 + + + + + + + + "Operator Parties" means, collectively, Operator, Operator's Affiliates, and their respective successors and assigns; "Operator Party" means any such Person individually. + + "Owner" shall have the meaning set forth in the preamble to this Agreement. + + "Owner Indemnified Parties" means, collectively, Owner, its successors and permitted assigns, and their respective Affiliates, shareholders, members, partners, officers, directors, employees, and agents. + + "Owner Operating Expense Account" means the bank account designed by Owner as its operating expense account. + + "Owner Revenue Account" means the bank account designed by Owner as its revenue account. + + "Party" means either Owner or Operator, as applicable, and "Parties" means both Owner and Operator. + + "Person" means an individual, a corporation, a partnership, a limited partnership, a limited liability company, an association, a joint venture, a trust, an unincorporated organization, or any other entity or organization, including a government or political subdivision or an agency or instrumentality thereof. + + "Preventing Factors" shall have the meaning set forth in Section 6.3.1. + + "Proposed Operating Expense Budget" means, with respect to each period, the Proposed Operating Expense Budget established pursuant to the Gathering Agreement for such period. + + "Shipper" shall have the meaning set forth in the Gathering Agreement. + + "Subject Gathering Agreements" means, collectively, the Gathering Agreement, the Enterprise Gathering Agreement and any gathering agreements entered into in accordance with Section 4.1.9. + + "Tax" or "Taxes" means any (i) federal, state, provincial, county, local or foreign taxes, charges, fees, levies or other assessments, including all sales and use, goods and services, ad valorem, transfer, gains, profits, excise, franchise, real and personal property, gross receipt, value added, capital stock, production, business and occupation, disability, employment, payroll, license, estimated, stamp, custom duties, severance, unemployment, social security, Medicare, alternative minimum or withholding taxes or charges imposed by any Governmental Authority, and including any interest and penalties (civil or criminal) on or additions to any such taxes, but expressly excluding any income tax or tax based on income, such as, without limitation, the franchise tax set forth in V.T.C.A. Tax Code Section 171.0001 et. seq., as the same may be amended or recodified from time to time, and (ii) liability for items in (i) of any other Person by contract, operation of Law (including Treasury Regulation 1.1502-6) or otherwise. + +5 + + + + + + + + "Tax Returns" means any return, report, election, declaration, statement, notice, information return, schedule, or other document (including any related or supporting information) filed or required to be filed with any Governmental Authority in connection with the determination, assessment, collection or administration of any Taxes or any income tax or tax based on income, such as, without limitation, the franchise tax set forth in V.T.C.A. Tax Code Section 171.0001 et. seq., as the same may be amended or recodified from time to time, or the administration of any laws, regulations or administrative requirements relating to any Taxes or any amendment thereof. + + "Transaction Documents" means, collectively, this Agreement, the Gathering Agreement, the Membership Interest Purchase Agreement, the Intercompany Conveyance, the Company Conveyance, the Guaranty Agreements, the Confidentiality and Disclosure Agreement and the LLC Agreement. + + "Trigger Event" shall have the meaning ascribed to such term in the Gathering Agreement. + + "Voting Securities" means, as it relates to a Person, securities of any class of such Person entitling the holders thereof to vote in the election of, or to appoint, members of the board of directors or other similar governing body of the Person; provided that if such Person is a limited partnership, Voting Securities of such Person shall be the general partner interest in such Person. + +ARTICLE II ENGAGEMENT OF OPERATOR + +2.1 Engagement. + + Owner hereby appoints and retains Operator to manage, operate, and maintain the Gathering System and to administer the business and regulatory affairs of Owner relating to the Gathering System in accordance with the terms and conditions set forth herein, and Operator hereby accepts such appointment. + +2.2 Independent Contractor. + + The Parties expressly understand and agree that Operator is acting and shall perform and execute the provisions of this Agreement as an independent contractor unrelated to Owner or any Owner Affiliate, and the work performed by Operator hereunder shall be subject to Owner's general right of inspection and approval. Nothing in this Agreement is intended to create a relationship, expressed or implied, of employer- employee or principal-agent between Owner and Operator or between Owner and any individual employed or provided to work hereunder by Operator. + +2.3 Owner Cooperation. + + Owner shall cooperate with Operator and provide Operator with such information as Operator may reasonably request from time to time in connection with the performance of Operator's duties hereunder. + +6 + + + + + + + +ARTICLE III TERM; RESIGNATION OR REMOVAL OF OPERATOR + +3.1 Term. + + This Agreement shall commence on the Effective Date and, unless terminated earlier pursuant to Section 3.2 or 3.3 of this Agreement, shall continue until the twentieth (20th) anniversary of the Effective Date; provided, however, (i) Operator shall have the right to terminate this Agreement at any time upon no less than 120 days prior written notice to Owner, if Operator provides a substitute operator acceptable to Owner, as determined in its reasonable discretion, who (A) has experience operating similar assets, (B) has the ability to provide at least the same quality of service as Operator, (C) has the financial ability to perform the obligations hereunder, and (D) is ready, willing and able to execute an operation and maintenance agreement substantially similar to this Agreement and acceptable to Owner, as determined in its reasonable discretion, and (ii) Owner shall have the right to terminate this Agreement at any time upon no less than 120 days prior written notice to Operator. + +3.2 Owner Default. + + Operator may terminate this Agreement at any time upon the occurrence of any of the following: + +If any of the above occurs and Operator elects to terminate this Agreement, then Operator may give a written notice of termination to Owner, which termination shall be effective on the date specified by Operator in such notice, provided that such termination date shall be within 60 days of the date such notice is delivered to Owner. Operator's notice of breach to Owner under Section 3.2(b) or (c) shall state with particularity the breach alleged by Operator. To the extent Owner disputes the basis for Operator's notice of breach, then the matter shall be addressed under Section 9.6. Nothing in this Section 3.2 shall be construed to limit or preclude any remedy Operator may have at law or in equity with respect to any material breach by Owner. + +3.3 Operator Default. + + Owner may terminate this Agreement at any time upon the occurrence of any of the following: + +7 + + (a) the dissolution or bankruptcy of Owner; + + (b) Owner fails to pay when due any amount due and payable hereunder, including, without limitation, any interest, fees, reimbursements or indemnifications, and such failure shall continue for a period of 15 days after the due date thereof; or + + (c) other than as set forth in clause (b) above, Owner breaches or fails to observe or perform any material term, condition, or obligation contained in this Agreement and fails to correct, or fails to diligently pursue correction of, such breach within 60 days after receipt of written notice from Operator of any such breach. + + (a) the dissolution or bankruptcy of Operator; + + + + + + + +If any of the above occurs and Owner elects to terminate this Agreement, then Owner may give a written notice of termination to Operator, which termination shall be effective on the date specified by Owner in the notice, provided that such termination date shall be within 60 days of the date the notice is delivered to Operator. Owner's notice of breach to Operator under Section 3.3(c) or (d) shall state with particularity the breach alleged by Owner. To the extent Operator disputes the basis for Owner's notice of breach, then the matter shall be addressed under Section 9.6. Nothing in this Section 3.3 shall be construed to limit or preclude any remedy Owner may have at law or in equity with respect to any material breach by Operator. + +3.4 Cooperation with Owner or Successor Operator. + + Upon the termination of this Agreement, Operator shall cooperate in the transition of operations to Owner or a successor operator and upon Owner's request, will promptly deliver all books and records and other property (including, without limitation, intellectual property) of Owner to Owner or the successor operator, as applicable. + +3.5 Effect of Termination. + + Any termination of this Agreement pursuant to this Article III will release Operator from, and Owner agrees to indemnify Operator against any liability accruing or accrued hereunder after the effective date of termination, except with respect to the obligations and liabilities of Operator that survive termination. Termination of this Agreement shall not relieve the Parties from any liability or obligation accruing or accrued prior to the date of such termination or deprive a Party not in breach (other than a breach which occurs because such Party is rightfully withholding performance in response to a breach by the other Party) of its right to any remedy otherwise available to such Party. + +3.6 No Breach. + + No violation of any of the terms or conditions of this Agreement shall be deemed a breach of this Agreement by Owner if and to the extent such violation or failure results, directly or indirectly, from a breach of the Gathering Agreement by Shipper. + +8 + + (b) an Operator Change of Control; + + (c) Operator fails to pay when due any amount due and payable hereunder, including, without limitation, any interest, fees, reimbursements or indemnifications, and such failure shall continue for a period of 15 days after the due date thereof; or + + (d) other than as set forth in clause (c) above, Operator breaches or fails to observe or perform any material term, condition, or obligation contained in this Agreement and fails to correct, or fails to diligently pursue correction of, such breach within 60 days after receipt of written notice from Owner of any such breach. + + + + + + + +ARTICLE IV DUTIES AS OPERATOR + +4.1 Duties as Operator. + + Operator shall be responsible for (1) administering the regulatory, business, and financial affairs of Owner; (2) maintaining the financial and product accounting records of Owner; (3) preparing and distributing financial statements; (4) complying with any and all instructions it receives from Owner with respect to the operation and maintenance of the Gathering System, provided that such instructions are consistent with applicable Laws; (5) performing the requirements and obligations of Owner set forth in the Subject Gathering Agreements; and (6) taking any actions necessary to avoid any exercise of remedies by any shipper under any Subject Gathering Agreement. + + 4.1.1 Operation and Maintenance of the Gathering System. + + 4.1.1.1 Operation of the Gathering System. Operator shall manage and operate the Gathering System, supervise the operation and maintenance of the Gathering System and the construction and future modifications to the Gathering System, negotiate agreements in Owner's name with third parties related to the operation of Owner's business (provided that (i) Owner shall have the right to approve or disapprove any such agreements, and (ii) if approved, except as provided in Section 4.1.2, Owner, and not Operator, shall execute all such agreements), comply with any instructions it receives from Owner with respect to the operation and maintenance of the Gathering System, provided that such instructions are consistent with applicable Laws, and perform all other services and functions related thereto, including, but not limited to, those services and functions listed on Exhibit A, subject to the limits, requirements, and restrictions otherwise set forth in this Agreement. + + 4.1.1.2 Maintenance Authority. Subject to the terms, conditions and limitations set forth in this Agreement, Owner hereby authorizes and empowers Operator, and Operator agrees, in the name of and on behalf of Owner, to do and perform any and all acts reasonably necessary for the prudent operation and maintenance of the Gathering System. + + 4.1.1.3 Operator Recommendations. In the event that Operator makes a good-faith recommendation in writing regarding an operational issue to Owner, and Owner does not, for any reason whatsoever, approve such recommendation, then Operator shall not be liable and Owner hereby releases and shall indemnify, defend and hold Operator harmless from and against any Claim or Loss that arises from, or is attributable to, the failure to implement such recommendation. + + 4.1.1.4 Compliance With Owner Instructions. Notwithstanding anything to the contrary in this Agreement, in the event that Owner instructs Operator to take any action or refrain from taking any action in connection with the operation or maintenance of the Gathering System and Operator in good faith + +9 + + + + + + + +disagrees with Owner because, among other reasons, it is not consistent with prudent operating standards, then Operator shall notify Owner of such disagreement in writing, and Owner hereby releases and shall indemnify, defend and hold Operator harmless from and against any Claim or Loss that arises from, or is attributable to, Operator's compliance with Owner's instructions. + + 4.1.1.5 Environmental Laws. Operator shall comply in all respects with all Environmental Laws and all Environmental Permits. + + 4.1.2 Purchase of Services, Materials and Supplies. Except as otherwise provided below and subject to the limitations herein, Operator shall, on Owner's behalf and as its agent, purchase or cause to be purchased necessary services, materials and supplies and incur such expenses and enter into such commitments as may be necessary to operate and maintain the Gathering System, including, but not limited to, (i) contracts for the maintenance, repair and replacement of the Gathering System and, if requested by Owner, constructions of additions to the Gathering System; and (ii) contracts for power, fuel, other utilities, and communication facilities as may be necessary in connection with proper operation and maintenance of the Gathering System and for providing adjustments and replacements thereto. + + 4.1.3 Personnel. Except as otherwise provided below and subject to the limitations herein, Operator, in its reasonable judgment, shall employ such personnel, with Operator or an Affiliate as their employer, as it may deem necessary to operate and maintain the Gathering System and to provide adjustments and replacements thereto and to perform its other obligations hereunder. In addition to Operator's or Operator's Affiliates' employees who are either full-time or part-time dedicated to operating and maintaining the Gathering System, Operator may: (i) utilize from time to time its other employees or the employees of Operator's Affiliates in services in connection therewith at a usual and customary rate of compensation; and/or (ii) engage the services of third-party contractors in the performance of such functions. + + 4.1.4 Payment of Operating Expenses. Operator shall promptly pay all costs and expenses incurred in operating and maintaining the Gathering System as they become due, and Owner shall reimburse Operator for such costs and expenses in accordance with, and to the extent provided in, Section 5.1. + + 4.1.5 Proposed Operating Expense Budget. Operator shall (i) administer and otherwise comply with the budget process set forth in Section 6.6 of the Gathering Agreement and (ii) operate and maintain the Gathering System in compliance with the Proposed Operating Expense Budget established for the Gathering System; provided, however, if Owner instructs Operator to perform any services outside of the scope of the services contemplated in the Proposed Operating Expense Budget, then Owner shall reimburse Operator for the costs and expenses associated therewith. + + 4.1.6 Capital Projects. Operator may propose an unbudgeted Capital Project at any time by giving notice to Owner. The notice (the "Capital Project Proposal") must specifically describe the proposed Capital Project and shall include the following: + +10 + + + + + + + + (1) a good-faith estimate of the total cost of engineering, construction, operation, and maintenance of the proposed Capital Project, and preliminary engineering designs and plans, and + + (2) general requirements or provisions for the Capital Project, including construction of the Capital Project and insurance coverage. + +Owner shall approve or reject the proposed Capital Project set forth in the applicable Capital Project Proposal within 30 days from the date of receipt of the same, such approval not to be unreasonably withheld, conditioned or delayed. If Owner approves the applicable Capital Project, then Operator shall have the right and authority with respect to the approved Capital Project to make expenditures, or enter into contracts to incur expenditures, without further authorization by Owner, up to the cost approved by Owner with respect to the applicable Capital Project. + + 4.1.7 Emergencies. Notwithstanding any provision of this Agreement, in the event of an Emergency, Operator shall proceed with maintenance or repair work or with any other action when necessary to minimize damage and to end the Emergency ("Emergency Work"), without regard to the limits set forth in this Article IV. Operator shall, as soon as reasonably practicable, notify Owner of the existence or occurrence of the Emergency, setting forth the nature of the emergency, the corrective action taken or proposed to be taken, and the actual or estimated cost of such corrective action. Emergency Work shall include only such work as is necessary to immediately address the Emergency and does not include any work necessary to restore the Gathering System or improve the Gathering System in order to permit continued operations. + + 4.1.8 Reporting By Operator. Operator shall (by either (i) submitting written reports or (ii) providing Owner with access to Operator's internet website containing the relevant information, at Operator's discretion) provide to Owner the following reports, based on the best data available at the time of preparation and subject to revision based on acquisition of more accurate data: + + (1) a daily report of the prior day's 24 hour volume of natural gas throughput on the Gathering System; + + (2) as soon as available, and in any event within 30 days after the end of each calendar month, a report of environmental, health, or safety incidents that are material or potentially material, including year-to-date data, for such month; + + (3) as soon as available, and in any event within 30 days after the end of each calendar month, a report concerning any government agency inspections, inquiries, citations, or other actions for such month; + + (4) as soon as available, and in any event within 30 days after the end of each calendar month, an operational report on major repairs and other operational details materially affecting the operations of the Gathering System during such month; + +11 + + + + + + + + (5) promptly after the sending thereof, all notices and information sent to Shipper (as defined in the Gathering Agreement) under the Gathering Agreement or to any other shipper under any gathering agreement; + + (6) as soon as available, and in any event within 30 days after the end of each calendar month, a monthly operating and financial report which shall be substantially in the form of Exhibit B and shall include such information as reasonably requested by Owner; + + (7) as soon as available, and in any event within 30 days after the end of each Calendar Year, a certificate from the president or chief executive officer of Operator stating that no event or condition exists or has occurred that violates, results in a breach of, or constitutes a default on the part of any Operator Party under, any of the terms, conditions or provisions of any Transaction Document; and + + (8) such other information regarding the Gathering System or the operation and maintenance of the Gathering System as Owner may from time to time reasonably request. + + 4.1.9 Commercial Activities. Operator shall negotiate on behalf of Owner all agreements for gathering services provided by Owner; provided that (i) Owner shall have the right to approve or disapprove any such agreements, and (ii) if approved, Owner, and not Operator, shall execute all such agreements. When Operator receives payments or remittances from customers of Owner, Operator shall deposit and promptly forward all such payments or remittances to Owner. Operator shall make no allowances or adjustments in accounts, unless given specific advance authorization by Owner. + + 4.1.10 Regulatory Affairs. Operator shall be responsible for preparing and submitting all regulatory filings pertaining to the Gathering System required by any Governmental Authority. + + 4.1.11 Devotion of Time. The employees of Operator designated to perform the functions under this Agreement shall devote such time to Owner's business as necessary to accomplish the responsibilities of Operator as set forth in this Article IV. Owner recognizes that the employees of Operator shall not be obligated to devote full time to Owner's business and that such employees of Operator may act on behalf of Operator or its Affiliates in activities not associated with this Agreement. + +4.2 Standard of Care. + + Operator shall perform its duties and obligations hereunder and its responsibilities as Operator of the Gathering System, (i) in a good and workmanlike manner, (ii) in conformity with the good practices in the natural gas gathering industry, (iii) in accordance with all valid and applicable Laws, including, without limitation, all Environmental Laws and Environmental Permits, (iv) in accordance with the Subject Gathering Agreements, and (v) in accordance with the Proposed Operating Expense Budget. + +12 + + + + + + + +4.3 Limitation of Authority. + + Notwithstanding anything in this Agreement, Operator shall seek prior approval of Owner prior to taking the following actions: + + 4.3.1 Binding Owner. Endorsing the name of Owner on any contract, commercial paper, or instruments of any nature or otherwise creating any obligation binding upon Owner except as expressly permitted under this Agreement. + + 4.3.2 Asset Sales. Acquiring or disposing of any assets of Owner in a single transaction or in a series of related transactions, with a fair market value exceeding $100,000, provided, however that Operator is expressly permitted to terminate leases or other contracts in respect of rental equipment regardless of value. + + 4.3.3 Material Alteration of Owner's Business. Altering Owner's business in a material manner. + + 4.3.4 Debt. Incurring any indebtedness on behalf of Owner, except for trade credit incurred by Operator in the ordinary course of business or within its expenditure authority set forth in this Agreement. + +ARTICLE V COST REIMBURSEMENT + +5.1 Responsibility for Costs and Expenses. + + Owner shall reimburse Operator for all costs and expenses incurred by Operator relating to the operation and maintenance of the Gathering System incurred in accordance with the terms hereof. + +5.2 Procedure. + + 5.2.1 Invoicing and Payment. Operator shall invoice Owner, monthly, for all costs and expenses incurred hereunder during the immediately preceding month and, without duplication, in any prior month. Owner shall pay all such amounts prior to the later of (a) 50 days after the end of the month in which the expenses were incurred or (b) 10 days after the date of receipt of each invoice. Invoices received after 1:00 pm local time will be deemed received on the next Business Day. If the day on which any payment is due is not a Business Day, then the relevant payment shall be due upon the immediately succeeding Business Day. Any amounts which remain due and owing after the due date shall bear interest at the lower of the prime rate as published in the "Money Rates" section of The Wall Street Journal plus two percent (2%) per annum and the maximum lawful rate of interest, compounded daily from the date such payment is due until such payment is made. Notwithstanding anything herein to the contrary, any indemnification payments required to be made by a Party hereunder shall be made to the indemnified Party upon receipt by the indemnifying Party of written demand therefor from the indemnified Party. + +13 + + + + + + + + 5.2.2 Disputes. If a good faith dispute arises as to the amount payable under any invoice issued by Operator, Owner shall pay the amount not in dispute on or before the due date, and if Owner elects to withhold any portion of a payment which otherwise would be due if not for such dispute, Owner shall provide Operator a written notice of such dispute on or before the date such payment is due setting forth, in reasonable detail, its reasons for withholding the disputed amount. If it is subsequently determined, whether by mutual agreement of the Parties or otherwise, that Owner is required to pay all or any portion of the disputed and withheld amounts, then in addition to paying such amounts, Owner shall pay interest accrued on such amounts (including amounts withheld) at the default interest rate described in Section 5.2.1 from the original due date until paid in full. + +5.3 Setoff. + + 5.3.1 All payments required to be made hereunder by Operator shall be (i) absolute and unconditional, (ii) calculated without reference to any netting, set-off, counterclaim or other right which Operator may have against Owner, including, without limitation, any right to set-off against any amounts owed by Owner under this Agreement or any other Transaction Document, and (iii) made free and clear of and without any deduction for or on account of any such netting, set-off or counterclaim. + + 5.3.2 Owner is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to net, set-off and apply any payments owing to Owner against any and all of the obligations of any Operator Party under this Agreement or any other Transaction Document. Owner agrees to promptly notify Operator after any such netting, set-off or application is made; provided that the failure to give such notice shall not affect the validity of such netting, set-off or application. + +ARTICLE VI ACCOUNTING; REPORTS; RECORDS + +6.1 Accounting Methods. + + Operator shall keep proper and complete records and books of account, which shall fully and accurately reflect all transactions and other matters relative to Owner's business as are usually entered into records and books of account, and the same shall be supported by purchase orders, invoices, payrolls or other customary or necessary records pertaining thereto. Owner's financial books and records shall be kept in accordance with GAAP and shall be maintained on an accrual basis, and Owner shall provide Operator with the applicable income tax provisions. The costs of any audit of Owner's books or records shall be borne by Owner. + +6.2 Financial Statements. + + Operator shall deliver to Owner the financial statements of Owner prepared, in each case, in accordance with GAAP (and subject, where applicable, to normal year-end adjustments) as follows: + +14 + + (a) promptly upon availability, and in any event within 30 days after the end of each + + + + + + + +6.3 Accounting and Taxation. + + 6.3.1 Maintenance of Accounts. Operator shall perform Owner's Tax and financial accounting with respect to the Gathering System, except to the extent that Operator is prohibited or prevented from doing so by Law, or by the administrative practice of any taxing office, or by the fact that to do so requires information that is in the possession of Owner, but not of Operator and that Owner cannot legally furnish to Operator (all of which are herein called "Preventing Factors"). + + 6.3.2 Preparation of Tax Returns. + + 6.3.2.1 Income Tax Returns. Unless otherwise instructed by Owner, Operator shall, on behalf of Owner, (i) provide all the necessary financial and other data for a tax preparer (appointed by Owner) to prepare all Tax Returns for taxes measured or based on income required to be filed by Owner in connection with its ownership and operation of the Gathering System no later than 75 days prior to the filing date for the relevant Tax Return (taking into account all valid extensions approved by Owner prior to filing), (ii) cooperate with Owner and its accountants in their preparation of such Tax Returns and review all modifications to such Tax Returns indicated by Owner, and (iii) help facilitate completion of such Tax Returns by no later than 45 days prior to the filing date for the relevant Tax Return. + + 6.3.2.2 Other Tax Returns. Unless otherwise instructed by Owner, Operator shall, on behalf of Owner, (i) prepare and file all Tax Returns and all + +15 + + month, (i) an unaudited balance sheet as of the end of such month; and (ii) an unaudited statement of income or loss for the interim period through such month end; + + (b) promptly upon availability, and in any event within 45 days after the end of each of the first three quarterly periods of each fiscal year, Owner's balance sheet as of the end of such quarterly period and statements of Owner's earnings and cash flows for the period from the beginning of the then current fiscal year to the end of such quarterly period; and + + (c) promptly upon availability and in any event within 90 days after the end of each fiscal year, complete financial statements of Owner, together with all notes thereto, prepared in reasonable detail in accordance with GAAP, together with an unqualified opinion, based on an audit using generally accepted auditing standards, by an independent certified public accounting firm selected by Owner, stating that such financial statements have been so prepared. These financial statements shall contain a balance sheet as of the end of such fiscal year and statements of earnings, of cash flows, and of changes in Owner's equity for such fiscal year, each setting forth in comparative form the corresponding figures for the preceding fiscal year. Owner shall engage an auditor for this purpose no later than 45 days after the end of each fiscal year. + + + + + + + +other regulatory or state filings required to be filed by Owner in connection with its ownership and operation of the Gathering System other than those Tax Returns described in Section 6.3.2.1 no later than the filing date for the relevant Tax Return or other filing (taking into account all valid extensions approved by Owner prior to filing). + + 6.3.3 Owner to Supply Information. Upon the request of Operator, Owner shall (except to the extent it is prohibited by Law from doing so) promptly (i) furnish Operator with any information needed by Operator in order to carry out its obligations under Section 6.3, (ii) cooperate with Operator in minimizing Taxes and (iii) execute such agency, power-of-attorney or other similar documents reasonably required by Operator in order to carry out its duties under this Section 6.3. If, at any time, Operator determines that because of one or more Preventing Factors it cannot perform its obligations under Section 6.3, then Operator shall notify Owner in writing, specifying the Preventing Factors concerned and the Taxes and the Governmental Authorities to which such Preventing Factors apply. Any incremental Tax or penalty resulting from Owner's failure to comply with this Section 6.3.3 shall be the responsibility of Owner. + +6.4 Banking. + + 6.4.1 Except as provided in Section 6.4.2, all revenues and other funds of Owner shall be deposited in its name in the Owner Revenue Account. Withdrawals from the Owner Revenue Account will be made only by Owner or Persons designated by Owner from time to time. Operator shall have view only access to the Owner Revenue Account. Owner will provide the Operator with copies of reconciled bank statements on a monthly basis, for accounting and audit purposes. + + 6.4.2 All Operations Fees (as defined in the Gathering Agreement) shall be deposited in the name of Owner in the Owner Operating Expense Account. Withdrawals from the Owner Operating Expense Account will be made only by Owner, Operator or other Persons designated by Owner from time to time. + + 6.4.3 Notwithstanding the foregoing, all funds of Owner will be used solely for the business of Owner. All interest and other benefits pertaining to the Owner Revenue Account and the Owner Operating Expense Account belong to Owner. At no time may Operator commingle the funds in the Owner Revenue Account, the Owner Operating Expense Account or any other bank account of Owner with Operator's funds or the funds of any other Person, nor may such funds be subject to liens or Claims of any kind in favor of Operator or its creditors. + +6.5 Independent Audits. + + Upon reasonable prior written notice to Operator, Owner shall have the right during normal business hours to audit or examine all books and records of Operator to the extent they relate to Operator's performance hereunder as well as the relevant books of account of Operator's contractors, relating to the performance of Operator's obligations under this Agreement. Operator shall cooperate with Owner's auditors by (i) making the applicable books + +16 + + + + + + + +and records available for inspection by Owner's auditors, and (ii) making such copies of books and records as may be reasonably requested by such auditors. In no event shall Owner's audits unreasonably interfere with Operator's operations. Owner will be responsible for all costs of any such audit; provided that if, in any audit, Owner discovers overpayments by Owner of at least $250,000 in the aggregate ("Material Overpayment"), Operator will reimburse Owner for such Material Overpayment and all reasonable costs incurred by Owner in connection with such audit ("Audit Costs"). Owner shall have up until two years after the close of a Calendar Year in which to make an audit of Operator's records for such Calendar Year. Except for any bill or statement with respect to which an Adjustment Claim is made within the two-year audit period, the bills and statements rendered for the Calendar Year prior to such two-year audit period shall be conclusively established as correct. An "Adjustment Claim" shall mean a written claim by Owner to Operator requesting a refund or other financial adjustment in respect of any overpayment by Owner (including in the case of a Material Overpayment, all Audit Costs) and setting forth in reasonable detail the basis for such claim. Operator shall, within 10 days of receipt of an Adjustment Claim, provide Owner with the requested refund or other financial adjustment; provided that if Operator shall dispute in good faith some or all of the amounts set forth in such Adjustment Claim, Operator may elect to withhold any disputed amounts, pending resolution of the dispute. If the Parties shall fail to resolve their dispute with respect to the remaining Adjustment Claim amount within 15 Business Days, Owner may, at its sole option, refer such dispute for resolution in accordance with the terms of Section 9.6. Unless otherwise resolved by the Parties, any bill or statement that is the subject of an Adjustment Claim shall be conclusively established as correct if dispute resolution procedures have not been initiated under Section 9.6 of this Agreement within 180 days of the submission of an Adjustment Claim. Any and all information pertaining to Operator and its business that is disclosed to Owner or discovered by Owner in connection with any audit hereunder shall be subject to the Confidentiality and Disclosure Agreement without regard to whether it has been designated as such and Owner shall be subject to the same restrictions and standard of care set forth therein with respect to Operator's confidential information. + +6.6 Credit Inquiries. + + If a customer, vendor, or other Person requests financial information concerning Owner, Operator may provide such customer, vendor, or Person a certificate or affidavit, on behalf of Owner, to the effect that Owner owns the Gathering System, free and clear of any mortgage or other liens or encumbrances except for (1) encumbrances consisting of zoning or planning restrictions, servitudes, permits, and other restrictions or limitations on the use of immovable property that do not materially detract from the value of, or impair the use of, the Gathering System by Owner in the operation of its business, (2) liens arising by operation of law in the ordinary course of business and in an aggregate amount that is not material in relation to the value of the Gathering System, (3) liens for current taxes, assessments, or governmental charges or levies, and (4) such other liens or encumbrances, if any, of which Operator has actual knowledge at the time. + +17 + + + + + + + +ARTICLE VII FORCE MAJEURE + +7.1 Procedure. + + If either Party is rendered unable, wholly or in part, by Force Majeure to carry out its obligations under this Agreement, other than the obligation to indemnify and to make payments then or thereafter due hereunder, upon such Party giving notice and full particulars of such Force Majeure in writing to the other Party as soon as reasonably possible after the occurrence of the cause relied on, then the obligations of the Party giving such notice, so far as they are affected by such Force Majeure, will be suspended during the continuance of any inability so caused but for no longer period, and such cause must as far as possible be remedied with all reasonable and diligent dispatch by the Party claiming such in order to put itself in a position to carry out its obligations under this Agreement. Such notifying Party must also provide notice of the date of termination of such Force Majeure event. A Force Majeure event affecting the performance by either Party shall not relieve it of liability in the event of its negligence, where such negligence was a cause of the Force Majeure event, or in the event of its failure to use commercially reasonable efforts to remedy the situation and remove the cause with all reasonable dispatch. + +7.2 Strikes. + + It is understood and agreed that the settlement of strikes or lockouts is entirely within the discretion of the Party directly involved in the strike or lockout, and that the above requirement that any Force Majeure must be remedied with all reasonable dispatch will not require the settlement of strikes or lockouts by acceding to the demands of the opposing party when such course is inadvisable in the discretion of the Party having the difficulty. + +ARTICLE VIII INSURANCE AND INDEMNIFICATION + +8.1 Operator Insurance. + + 8.1.1 Operator, with respect to Operator's activities provided for under this Agreement, shall maintain the following insurance coverage with responsible insurance carriers and/or through a program of self-insurance: + +18 + + (a) Workers' Compensation. Operator shall maintain statutory worker's compensation insurance, covering all of its and its Affiliates' employees and statutory employees, in accordance with the benefits afforded by the statutory Worker's Compensation Acts applicable to the state, territory, or district of hire, supervision, or place of accident. In addition, Operator shall maintain employer's liability insurance with a limit of not less than one million dollars ($1,000,000) each accident, one million dollars ($1,000,000) disease each employee, and one million dollars ($1,000,000) disease policy limit. Where not prohibited by law, Operator shall waive its right of subrogation against Owner. + + (b) Commercial General Liability Insurance. Operator shall maintain Commercial General Liability Insurance covering its operations under this Agreement + + including, without limitation, bodily injury, death, property damage, independent contractors, products/completed operations, contractual, and personal injury liability, with a limit of not less than one million dollars ($1,000,000) per occurrence and two million dollars ($2,000,000) in the annual aggregate. + + + + + + + 8.1.2 To the extent of the liabilities assumed by Operator in this Agreement, Operator shall name Owner Indemnified Parties as additional insured on all insurance policies, except Workers' Compensation. The Owner Indemnified Parties' additional insured status will not limit the application of insurance protection as required by this Agreement which arises out of the Operator's indemnity obligations. These policies shall provide primary coverage for claims in which Operator has agreed to hold harmless and/or to indemnify the Owner Indemnified Parties. No "other insurance" clause may be invoked by any insurer. This coverage shall apply whether or not the indemnification is valid. Operator shall have its insurer(s) waive its right of subrogation against Owner Indemnified Parties on all insurance carried. Unless expressly stated to the contrary elsewhere in this Agreement or prohibited by applicable law or legal statute, Operator's indemnification obligations under this Agreement shall not be limited by amount or in scope to coverage provided by insurance which is required under this Agreement. + + 8.1.3 Upon request, Operator agrees to furnish to Owner certificates of insurance or other evidence satisfactory to Owner to demonstrate that the required insurance has been procured and is in force. The certificate shall accurately reflect the required insurance coverages and shall provide that in the event of modification, expiration, cancellation or material change in a policy affecting the certificate holder, thirty days prior written notice shall be given to the certificate holder. Operator waives all rights against Owner for recovery of damages to the extent such damages are covered by the insurance maintained in accordance with this Section 8.1. + +8.2 Contractors. + + Operator shall attempt to obtain reasonable indemnification and insurance protection from contractors performing services for Owner to protect Owner and Operator. Operator shall require each of its contractors to carry insurance coverage substantially equivalent to the insurance required of Operator above, and to include provisions for its contractors to name Owner and Operator as additional insureds, with the exception of Workers' Compensation Insurance, and state that such policies will be primary to and non-contributory with any other insurance maintained by Operator and Owner. With respect to Workers' Compensation + +19 + + + (c) Commercial Automobile Insurance. Operator shall maintain Commercial Automobile Insurance coverage, including, without limitation, bodily injury and property damage for owned, hired, rented, and non-owned automotive equipment with a limit of not less than one million dollars ($1,000,000) per accident. + + (d) Umbrella Liability Insurance. Operator shall maintain Umbrella Liability Insurance coverage covering in excess of (a), (b), and (c) above, excluding Worker's Compensation, in the amount of ten million dollars ($10,000,000). + + + + + + + +Insurance, the applicable contractor shall be required to cause its insurers to wave all rights of recovery or subrogation against Owner and Operator, where not prohibited by law. + +8.3 Notice of Claims. + + In the event that Operator receives notice, either in writing or orally, of an asserted or threatened Liability Claim against Operator or Owner, Operator shall provide Owner within 10 days of receipt of such Liability Claim a copy of any demand letter, petition, or similar documentation of the Liability Claim. + +8.4 Mutual Release and Indemnification. + + 8.4.1 Owner's Indemnification. SUBJECT TO THE TERMS OF THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, SECTION 9.7 OF THIS AGREEMENT, OWNER SHALL INDEMNIFY, DEFEND, AND HOLD HARMLESS THE OPERATOR INDEMNIFIED PARTIES FROM AND AGAINST ALL CLAIMS AND LOSSES ARISING OUT OF OR RELATING TO (I) ALLEGATIONS OF DEATH OR BODILY INJURY OR DAMAGE TO PROPERTY, TO THE EXTENT ARISING OUT OF OR RESULTING FROM THE NEGLIGENCE, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF OWNER, ITS AFFILIATES OR ITS OR THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, OR CONTRACTORS IN CONNECTION WITH THIS AGREEMENT OR THE PERFORMANCE HEREOF; PROVIDED THAT OWNER SHALL NOT BE REQUIRED TO INDEMNIFY THE OPERATOR INDEMNIFIED PARTIES AGAINST SUCH CLAIMS AND LOSSES TO THE EXTENT SUCH CLAIMS AND LOSSES ARE ATTRIBUTABLE TO THE ACTS OR OMISSIONS OF ANY OPERATOR INDEMNIFIED PARTIES, (II) ANY BREACH OF THIS AGREEMENT BY OWNER, AND (III) ANY AGREEMENTS RELATING TO THE GATHERING SYSTEM BETWEEN OWNER AND THIRD PARTIES NOT AFFILIATED WITH THE OPERATOR PARTIES. THE DUTY TO INDEMNIFY, DEFEND AND HOLD HARMLESS UNDER THIS SECTION 8.4.1 SHALL CONTINUE IN FULL FORCE AND EFFECT, NOTWITHSTANDING THE EXPIRATION OR EARLY TERMINATION OF THIS AGREEMENT, WITH RESPECT TO ANY CLAIMS OR LOSSES BASED ON FACTS OR CONDITIONS THAT OCCURRED PRIOR TO SUCH EXPIRATION OR TERMINATION. + + 8.4.2 Operator's Indemnification. SUBJECT TO THE TERMS OF THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, SECTION 9.7 OF THIS AGREEMENT, OPERATOR SHALL INDEMNIFY, DEFEND, AND HOLD HARMLESS THE OWNER INDEMNIFIED PARTIES FROM AND AGAINST ALL CLAIMS AND LOSSES ARISING OUT OF OR RELATING TO (I) ALLEGATIONS OF DEATH OR BODILY INJURY OR DAMAGE TO PROPERTY, TO THE EXTENT ARISING OUT OF OR RESULTING FROM THE NEGLIGENCE, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF OPERATOR, ITS AFFILIATES OR ITS OR THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, OR CONTRACTORS IN CONNECTION WITH THIS AGREEMENT OR THE PERFORMANCE HEREOF; PROVIDED THAT OPERATOR SHALL NOT BE REQUIRED TO INDEMNIFY THE OWNER INDEMNIFIED PARTIES AGAINST SUCH CLAIMS OR LOSSES TO THE EXTENT SUCH CLAIMS OR LOSSES ARE ATTRIBUTABLE TO THE ACTS OR OMISSIONS OF ANY OWNER INDEMNIFIED PARTY, AND (II) ANY BREACH OF THIS AGREEMENT BY OPERATOR. THE DUTY TO INDEMNIFY, DEFEND AND HOLD HARMLESS UNDER THIS SECTION 8.4.2 SHALL CONTINUE IN FULL FORCE AND EFFECT, NOTWITHSTANDING THE EXPIRATION OR EARLY TERMINATION OF THIS AGREEMENT, WITH RESPECT TO ANY CLAIMS OR LOSSES BASED ON FACTS OR CONDITIONS THAT OCCURRED PRIOR TO SUCH EXPIRATION OR TERMINATION. + +20 + + + + + + + +ARTICLE IX GENERAL PROVISIONS + +9.1 Notices. + + Except as specifically provided otherwise herein, any notice, claim, or other communication provided for in this Agreement or any notice that either Party may desire to give to the other shall be in writing and shall be: (i) sent by facsimile transmission; (ii) delivered by hand; (iii) sent by United States mail with all postage fully prepaid; or (iv) delivered by courier with charges paid in accordance with the customary arrangements established by such courier, in each of the foregoing cases addressed to the Party at the following addresses: + +or at such other address as either Party may at any time designate by giving written notice to the other Party. Such notices, invoices, allocation statements, claims, or other communications shall be deemed received as follows: (i) if delivered personally, upon delivery; (ii) if sent by United States mail, whether by express mail, registered mail, certified mail or regular mail, the notice shall be deemed to have been received on the day receipt is refused or is confirmed orally or in writing by the receiving Party; (iii) if sent by a courier service, upon delivery; or (iv) if sent by facsimile, the Business Day following the day on which it was transmitted and confirmed by transmission report or such earlier time as confirmed orally or in writing by the receiving Party. + +9.2 Rights. + + The failure of either Party to exercise any right granted hereunder shall not impair nor be deemed a waiver of that Party's privilege of exercising that right at any subsequent time or times. + +21 + + To Owner: Piñon Gathering Company, LLC c/o TCW Asset Management Company 333 Clay Street, Suite 4150 Houston, Texas 77002 Attention: Clay Taylor Fax Number: 713.615.7460 with a copy to: TCW Asset Management Company 865 South Figueroa Street, Suite 1800 Los Angeles, California 90017 Attention: R. Blair Thomas Fax Number: 213.244.0604 To Operator: SandRidge Midstream, Inc. 123 Robert S. Kerr Avenue Oklahoma City, Oklahoma 73102-6406 Attention: Midstream — Manager of Administration Fax Number: 405.429.5990 + + + + + + + +9.3 Applicable Laws. + + This Agreement is subject to all valid present and future laws, regulations, rules, and orders of governmental authorities now or hereafter having jurisdiction over the Parties, this Agreement, any of the transactions contemplated hereby or the Gathering System. + +9.4 Rules of Construction. + + In construing this Agreement, the following principles shall be followed: + + 9.4.1 no consideration shall be given to the fact or presumption that one Party had a greater or lesser hand in drafting this Agreement; + + 9.4.2 examples shall not be construed to limit, expressly or by implication, the matter they illustrate; + + 9.4.3 the word "includes" and its syntactical variants mean "includes, but is not limited to" and corresponding syntactical variant expressions; and + + 9.4.4 the plural shall be deemed to include the singular and vice versa, as applicable. + +9.5 Governing Law. + + This Agreement shall be governed by, construed, and enforced in accordance with the laws of the State of Texas, without regard to choice of law principles that would require the application of the laws of any other jurisdiction. + +9.6 Dispute Resolution. + + 9.6.1 Negotiation. Prior to submitting any dispute for resolution by a court, a Party shall provide written notice to the other of the occurrence of such dispute. If the Parties have failed to resolve the dispute within 15 Business Days after such notice was given, the Parties shall seek to resolve the dispute by negotiation between senior management personnel of each Party. Such personnel shall endeavor to meet and attempt to amicably resolve the dispute. If the Parties are unable to resolve the dispute for any reason within 30 Business Days after the original notice of dispute was given, then either Party shall be entitled to pursue any remedies available at law or in equity; provided, however, this Section 9.6.1 shall not limit a Party's right to initiate litigation prior to the expiration of the time periods set forth herein of such limitations would prevent a Party from filing a lawsuit or claim within the applicable period for filing lawsuits (e.g. statutes of limitation, prescription, etc.). + + 9.6.2 Jurisdiction and Venue. + + 9.6.2.1 Each Party agrees that the appropriate, exclusive and convenient forum for any disputes between any of the Parties arising out of this Agreement or the transactions contemplated hereby shall be in any state or federal court in + +22 + + + + + + + +Houston or Dallas, Texas, and each of the Parties irrevocably submits to the jurisdiction of such courts solely in respect of any legal proceeding arising out of or related to this Agreement or the transactions contemplated hereby. The Parties further agree that the Parties shall not bring suit with respect to any disputes arising out of this Agreement or the transactions contemplated hereby in any court or jurisdiction other than the above specified courts. + + 9.6.2.2 Each Party hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby in any court referred to in paragraph (a) above. Each of the Parties hereby irrevocably waives, to the fullest extent permitted by applicable law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court. + + 9.6.3 Jury Waiver. THE PARTIES HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE, TO THE FULLEST EXTENT THEY MAY LEGALLY AND EFFECTIVELY DO SO, THE RIGHT TO A JURY IN ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. + + 9.6.4 Costs and Expenses. The prevailing Party in any litigation pertaining to any dispute hereunder shall be entitled to recover its reasonable costs, expenses, and attorney's fees in connection with such litigation. + +9.7 Limitation of Liability. + + NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR SPECIAL, INDIRECT, CONSEQUENTIAL, PUNITIVE, OR EXEMPLARY DAMAGES SUFFERED BY SUCH PARTY RESULTING FROM OR ARISING OUT OF THIS AGREEMENT OR THE BREACH THEREOF OR UNDER ANY OTHER THEORY OF LIABILITY, WHETHER TORT, NEGLIGENCE, STRICT LIABILITY, BREACH OF CONTRACT, WARRANTY, INDEMNITY, OR OTHERWISE, INCLUDING, WITHOUT LIMITATION, LOSS OF USE, INCREASED COST OF OPERATIONS, LOSS OF PROFIT OR REVENUE, OR BUSINESS INTERRUPTIONS. IN FURTHERANCE OF THE FOREGOING, EACH PARTY RELEASES THE OTHER PARTY AND WAIVES ANY RIGHT OF RECOVERY FOR SPECIAL, INDIRECT, CONSEQUENTIAL, PUNITIVE, OR EXEMPLARY DAMAGES SUFFERED BY SUCH PARTY REGARDLESS OF WHETHER ANY SUCH DAMAGES ARE CAUSED BY THE OTHER PARTY'S NEGLIGENCE (AND REGARDLESS OF WHETHER SUCH NEGLIGENCE IS SOLE, JOINT, CONCURRENT, ACTIVE, PASSIVE, OR GROSS NEGLIGENCE), FAULT, OR LIABILITY WITHOUT FAULT. + +9.8 Entirety of Agreement, Amendments. + + This Agreement, including, without limitation, all exhibits hereto, and the other Transaction Documents integrate the entire understanding between the Parties with respect to the subject matter covered and supersede all prior understandings, drafts, discussions, or statements, + +23 + + + + + + + +whether oral or in writing, expressed or implied, dealing with the same subject matter. This Agreement may not be amended or modified in any manner except by a written document signed by the Parties that expressly amends this Agreement. + +9.9 Waivers. + + No waiver by either Party of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision hereof (whether or not similar), nor shall such waiver constitute a continuing waiver unless expressly provided. No waiver shall be effective unless made in writing and signed by the Party to be charged with such waiver. + +9.10 Exhibits. + + Exhibits A and B are made a part of this Agreement and incorporated herein by this reference. + +9.11 Headings. + + The headings and captions in this Agreement have been inserted for convenience of reference only and shall not define or limit any of the terms and provisions hereof. + +9.12 Rights and Remedies. + + Except as otherwise provided in this Agreement, each Party reserves to itself all rights, counterclaims, other remedies, and defenses to which such Party is or may be entitled arising from or out of this Agreement or as otherwise provided by law. + +9.13 Assignment. + + Operator shall not make any assignment of all or any part of this Agreement or any of the rights or obligations hereunder unless there first shall have been obtained the written consent thereto of Owner, which consent shall not be unreasonably withheld, conditioned, or delayed. Owner shall not make any assignment of all or any part of this Agreement or any of the rights or obligations hereunder except in connection with the sale or conveyance of all or any part of the Gathering System. This Agreement shall be binding upon and inure to the benefit of the successors and assigns of the Parties. Any attempted assignment of this Agreement in violation of this Section 9.13 shall be null and void. + +9.14 Counterparts. + + This Agreement may be executed in one or more counterparts (including by facsimile), each of which shall be deemed an original, and all of which shall be deemed one and the same Agreement. + +9.15 No Third Party Beneficiary. + + Except for parties indemnified hereunder, this Agreement is for the sole benefit of the Parties and their respective successors and permitted assigns, and shall not inure to the benefit of + +24 + + + + + + + +any other Person whomsoever or whatsoever, it being the intention of the Parties that no third Person shall be deemed a third-party beneficiary of this Agreement. + +9.16 Further Assurances. + + Each Party shall take such acts and execute and deliver such documents as may be reasonably required to effectuate the purposes of this Agreement. + + IN WITNESS WHEREOF, authorized representatives of the Parties have executed this Agreement to be effective on the Effective Date. + +25 + + OPERATOR: SANDRIDGE MIDSTREAM, INC. + + + + By: /s/ Richard J. Gognat Richard J. Gognat Senior Vice President OWNER: PIÑON GATHERING COMPANY, LLC + + + + By: TCW Asset Management Company, its Manager: By: /s/ Clayton R. Taylor Clayton R. Taylor Vice President By: /s/ Kurt A. Talbot Kurt A. Talbot Managing Director \ No newline at end of file diff --git a/full_contract_txt/SCOUTCAMINC_05_12_2020-EX-10.22-SERVICES AGREEMENT.txt b/full_contract_txt/SCOUTCAMINC_05_12_2020-EX-10.22-SERVICES AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..cba1761a9cae66b74c16b0ac2b960a2d80851334 --- /dev/null +++ b/full_contract_txt/SCOUTCAMINC_05_12_2020-EX-10.22-SERVICES AGREEMENT.txt @@ -0,0 +1,13 @@ +Exhibit 10.22 SERVICES AGREEMENT SERVICES AGREEMENT, dated as of April 1, 2019 (the "Agreement"), between Idan Maimon ("Maimon") and Intellisense Solutions, Inc., a Nevada corporation (the "Company"). WHEREAS, the Company desires to engage Maimon as the Company's Chief Executive Officer ("CEO"), to provide services to the Company that are ordinarily and customarily performed by a CEO, and Maimon is willing to serve as the CEO and member of the board of directors of the Company, on the terms and conditions set forth below; and WHEREAS, the Company desires Maimon to serve on the Company's Board of Directors. NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, the receipt and sufficiency of which are hereby acknowledged, the Company and Maimon agree as follows: 1. Services. The Company hereby retains Maimon, and Maimon hereby agrees to make himself available as the Company's CEO, upon the terms and subject to the conditions contained herein. 2. Duties. During the Service Term (as hereinafter defined), the parties agree that Maimon shall serve as the Company's CEO, and shall perform all the duties that are ordinarily and customarily performed by a CEO. 3. Term. Subject to the provisions for termination hereinafter provided, the term of this Agreement shall commence on the date hereof (the "Effective Date") and shall continue for a minimum period of 12 months (the "Minimum Period") and thereafter upon the mutual agreement of the Company and Maimon (the "Service Term"). 4. Compensation. In consideration of the services to be rendered by Maimon hereunder and for Maimon's service as a director on the Board of Directors of the Company, the Company will pay Maimon a monthly fee of $1,000 during the Minimum Period, beginning on the Effective Date. 5. Termination. If Maimon should become unable to serve as CEO, or should fail to perform any of the obligations hereunder for any cause including death or disability, always in the sole judgment and decision of the Company, then the Company shall have the right to terminate this agreement on five days prior written notice. Maimon shall have the right to resign at any time upon 30 days prior written notice. The Company may in its discretion and at its option terminate this Agreement at any time after the Minimum Period upon five days prior written notice to Maimon. 6. Reimbursement. The Company will reimburse Maimon for all reasonable pre- approved out-of-pocket expenses incurred in connection with this Agreement. 1 + + + + + +7. Confidential Information. Maimon recognizes and acknowledges that by reason of his retention by and service to the Company, Maimon will have access to certain confidential and proprietary information relating to the Company's business, which may include, but is not limited to, trade secrets, trade "know-how," product development techniques and plans, formulas, customer lists and addresses, financing services, funding programs, cost and pricing information, marketing and sales techniques, strategy and programs, computer programs and software and financial information (collectively referred to as "Confidential Information"). Maimon acknowledges that such Confidential Information is a valuable and unique asset of the Company and covenants that he will not, unless expressly authorized in writing by the Company, at any time use any Confidential Information or divulge or disclose any Confidential Information to any person, firm or corporation except in connection with the performance of his duties for the Company and in a manner consistent with the Company's policies regarding Confidential Information. Maimon also covenants that at any time after the termination of this Agreement, directly or indirectly, he will not use any Confidential Information or divulge or disclose any Confidential Information to any person, firm or corporation, unless such information is in the public domain through no fault of his or except when required to do so by applicable law. All written Confidential Information (including, without limitation, in any computer or other electronic format) which comes into Maimon's possession during the Service Term shall remain the property of the Company. Except as required in the performance of Maimon's duties for the Company, or unless expressly authorized in writing by the Company, Maimon shall not remove any written Confidential Information from the Company's premises, except in connection with the performance of his duties for the Company and in a manner consistent with the Company's policies regarding Confidential Information. Upon termination of this Agreement, Maimon agrees to return immediately to the Company all written Confidential Information (including, without limitation, in any computer or other electronic format) in his possession. 8. Conflicts of Interest, Non-Competition, Non-Solicitation. Maimon agrees during the term of this Agreement not to accept work or enter into a contract or accept an obligation inconsistent or incompatible with Maimon's obligations under this Agreement or with the scope of services to be rendered for the Company. Maimon warrants that to the best of Maimon's knowledge, there is no other contract or duty on Maimon's part now in existence inconsistent with this Agreement. During the term of this Agreement and for a period of two (2) years after expiration or termination for any reason of this Agreement, Maimon agrees not to: (a) compete with the business of the Company, whether individually or through any entity, or to use (or permit the use of) any Confidential Information, directly or indirectly, for the purpose of competing with the business of the Company; or (b) suggest to, induce or persuade any customer, client, vendor, supplier, employee, consultant or agent of the Company to terminate or diminish its relationship with the Company.. 9. Waiver of Breach. The waiver by any party hereto of a breach of any provision of this Agreement shall not operate nor be construed as a waiver of any subsequent breach. 10. Binding Effect; Benefits. Neither of the parties hereto may assign its or his rights hereunder without the prior written consent of the other party hereto, and any such attempted assignment without such consent shall be null and void and without effect. This Agreement shall inure to the benefit of, and shall be binding upon, the parties hereto and their respective successors, permitted assigns, heirs and legal representatives. 2 + + + + + +11. Entire Agreement; Amendments. This Agreement contains the entire agreement and supersedes all prior agreements and understandings, oral or written, between the parties hereto with respect to the subject matter hereof. This Agreement may not be changed orally, but only by an agreement in writing signed by the party against whom any waiver, change, amendment, modification or discharge is sought. 12. Severability. The invalidity of all or any part of any provision of this Agreement shall not render invalid the remainder of this Agreement or the remainder of such provision. If any provision of this Agreement is so broad as to be unenforceable, such provision shall be interpreted to be only so broad as is enforceable. 13. Governing Law; Consent to Jurisdiction. This Agreement shall be governed by and construed in accordance with the law of the State of New York without giving effect to the principles of conflicts of law thereof. The parties hereto each hereby submits herself or itself for the sole purpose of this Agreement and any controversy arising hereunder to the exclusive jurisdiction of the state courts in the State of New York. 14. Headings. The headings herein are inserted only as a matter of convenience and reference, and in no way define, limit or describe the scope of this Agreement or the intent of the provisions thereof. 15. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. Signatures evidenced by facsimile transmission will be accepted as original signatures. IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed as of the date first above written. /s/ Oded Gilboa INTELLISENSE SOLUTIONS, INC. Oded Gilboa, CFO 3 \ No newline at end of file diff --git a/full_contract_txt/SEASPINEHOLDINGSCORP_10_10_2018-EX-10.1-SUPPLY AGREEMENT.txt b/full_contract_txt/SEASPINEHOLDINGSCORP_10_10_2018-EX-10.1-SUPPLY AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..5ff645dd1bd72ddfb499e794de02ed80eaf87d55 --- /dev/null +++ b/full_contract_txt/SEASPINEHOLDINGSCORP_10_10_2018-EX-10.1-SUPPLY AGREEMENT.txt @@ -0,0 +1,447 @@ +Exhibit 10.1 + +CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETED ASTERISKS [***], HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. SUPPLY AGREEMENT + +THIS SUPPLY AGREEMENT ("Agreement") is entered into as of this 15th day of May, 2013 (the "Effective Date") by and between Integra LifeSciences Corporation ("Integra"), a Delaware corporation with offices at 311 Enterprise Drive, Plainsboro, New Jersey 08536, and PcoMed, LLC ("PcoMed"), a Colorado limited liability company with offices at 105 S. Sunset Street, Longmont, Colorado 80501. + +RECITALS: + +WHEREAS, Integra is a medical device company that is developing and commercializing implantable spinal medical devices and procedures in the field of spinal surgery; + +WHEREAS, PcoMed has experience and expertise in the surface modification of medical device materials; + +WHEREAS, Integra desires to engage PcoMed to apply certain of its surface technologies onto Integra's implantable spinal medical devices for preclinical, clinical and commercial use and distribution by Integra; and + +WHEREAS, PcoMed is willing to apply such surface technologies onto Integra's implantable spinal medical devices and to grant Integra certain exclusive rights to use and commercialize those devices; and + +NOW, THEREFORE, in consideration of the mutual covenants and promises herein contained, the parties hereto agree as follows: 1. DEFINITIONS. + +As used in this Agreement, the following initially capitalized terms, whether used in the singular or plural form, shall have the meanings set forth in this Section 1. + +1.1. "Affiliate" means any corporation, limited liability company, person or entity that directly or indirectly controls, is controlled by, or is under common control with, a party to this Agreement. For purposes of this Section 1.1, the term "control" (with a correlative meaning for "controlled by") means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of the subject corporation, person or entity, whether through the ownership of voting securities, by contract or otherwise. + +1.2. "*** Run" means a single production run of PcoMed's *** to apply the PcoMed Surface Modification Technology to Integra Products. + +1.3. "*** Run Fee" means the fee for a single *** Run. The *** Run Fee is exclusive of potential fees for any surface preparation requirements currently performed prior to PcoMed's receipt of Integra Product. + +1.4. "Confidential Disclosure Agreements" means all Mutual Non-Disclosure Agreements previously or hereafter entered into by certain Integra Affiliates and PcoMed. 1 *** Portions of this page have been omitted pursuant to a request for Confidential Treatment filed separately with the Commission. + + + + + +1.5. "Confidential Information" means, whether disclosed in oral, written, graphic, electronic form, or other form, and whether developed by the disclosing party or by others, any confidential, non-public, proprietary information of Integra or PcoMed that is designated by the disclosing party as confidential or secret or that should reasonably be assumed by the receiving party to be confidential or secret. Confidential Information includes, without limitation: (i) specifications, know-how, trade secrets, designs, technical information, drawings, sketches, engineering drawings, work of authorship, software, prototypes, samples, models, business information, marketing information, current products and services, future products and services, proposed products and services, inventions, discoveries, devices, apparatus, equipment, algorithms, business methods, plans, assays, methods, procedures, processes, formulae, protocols, techniques, data, research and development data, experimental work, clinical data, engineering data, manufacturing data, technical or non-technical information, ideas, media, and unpublished patent applications; (ii) personnel and financial information, product cost information, contractual relationships, operational and procedural manuals; (iii) information or data regarding product research and development, including technical, engineering, or production data, test data, or results, information concerning a disclosing party's efforts to acquire, protect, and license proprietary rights, (iv) a disclosing party's price, cost and fee data, pricing and billing policies, forecasts, plans, procurement requirements, and strategies for all aspects of the disclosing party's operations, marketing, and sales, whether or not in effect; and (v) data relating to the type, quality, specifications, and price of the disclosing party's products and/or services received or provided by any customer or vendor. + +1.6. "Derive" and cognates thereof means to develop, make, invent, discover, create, synthesize, conceive, reduce to practice, design or result from, to be based upon or to otherwise generate (whether directly or indirectly, or in whole or in part). + +1.7. "FDA" means the United States Food and Drug Administration, or any successor thereto, having the administrative authority to regulate the marketing of pharmaceutical products, biological therapeutic product, delivery systems, and medical devices in the United States. + +1.8. "Field" means spinal interbody and/or intervertebral surgical methods and procedures, including without limitation, interbody and/or intervertebral fusion and/or spacer procedures and interbody and/or intervertebral spinal arthroplasty procedures. + +1.9. "First Product Order" means the first purchase order issued by Integra to PcoMed for the production of salable Treated Integra Product or Partially Treated Integra Product. + +1.10. "Integra Customers" means Third Parties who purchase Treated Integra Products and Partially Treated Integra Products from Integra or its Affiliates and does not include any Integra Affiliates."Integra Products" means any implantable spinal surgery interbody and/or intervertebral medical device designed and/or manufactured by or for Integra. 2 + + + + + +1.11. "Integra Regulatory Data" means Integra information associated with regulatory procedures relating to Treated Integra Product and/or Partially Treated Integra Product, including bench and animal data, submission data and methodologies, responses of Regulatory Authorities to submissions, information pertaining to such submissions, and additional data generated as required for US Marketing Clearance, EU Marketing Clearance or commercial launch of any Treated Integra Product or Partially Treated Integra Product. + +1.12. "Integra Technology" means any technology owned, licensed or controlled by Integra and/or any Integra Affiliates including but not limited to SeaSpine and Theken Spine as of the Effective Date and all technology Derived solely by Integra and/or Integra Affiliates during or after the Term, including but not limited to the devices described in U. S. Patent Numbers 7,799,083 and 8,097,036 together with any improvements, enhancements, or extensions of or to any of the foregoing, and Intellectual Property Rights therein, but excluding any technology or information relating to or derived from PcoMed Technology. The Integra Technology shall include all proprietary ideas in any form and embodied in any media, technical information, ideas, discoveries, knowledge, know-how, skill, experience, concepts, data, processes, procedures, methods, techniques, protocols, formulae, trade secrets, Inventions (whether or not patentable), media, research tools, compositions, software, hardware, instruments, documents, works of authorship, formulations, and other physical, chemical or biological materials and information, including, without limitation, clinical and regulatory strategies, test data (including pharmacological, toxicological and clinical test data), analytical and quality control data, manufacturing, patent, marketing and legal data or descriptions, apparatus, prototypes, devices, chemical formulations, compound compositions of matter, product samples, assays and similar information and Inventions. + +1.13. "Intellectual Property Rights" means any and all intellectual property and industrial design rights, whether protected, created or arising under the laws of the United States or any other foreign jurisdiction, including the following: (i) patent rights; (ii) copyrights, mask work rights, database rights and design rights, whether or not registered, published or unpublished, and registrations and applications for registration thereof, and all rights therein whether provided by international treaties or conventions or otherwise; (iii) trade secrets and Inventions; (iv) moral rights; and (v) other applications and registrations related to any of the rights set forth in the foregoing clauses (i) through (iv); provided, however, that as used in this Agreement, the term "Intellectual Property" expressly excludes rights in trademarks, trade names, service marks, service names, design marks, logos, slogans, trade dress, or similar rights with respect to indicators of origin, whether registered or unregistered, as well as rights in internet domain names, uniform resource locators and e-mail addresses. + +1.14. "Inventions" means conceptions, ideas, innovations, discoveries, inventions, processes, machines, formulae, formulations, biological materials, molecules, compounds, compositions, improvements, enhancements, modifications, technological developments, know-how, show-how, methods, techniques, systems, designs, production system, plans, source code, object code and documentation pertaining thereto, including, without limitation, functional specifications, object libraries, design documentation, technical documentation, statements of principles of operations, schematics, programmers' guides, and other documentation, data, programs and information and works of authorship, whether or not patentable, copyrightable or susceptible to any other form of legal protection. + +1.15. "Minimum Payment" means the amounts set forth on Attachment B as payable by Integra to PcoMed in each Minimum Payment Period. + +1.16. "Minimum Payment Period" has the meaning set forth on attached Attachment B. 3 *** Portions of this page have been omitted pursuant to a request for Confidential Treatment filed separately with the Commission. + + + + + +1.17. "Net Sales" means the gross amount of all revenues invoiced and received by Integra and its Affiliates from Integra Customers from the Sale of Treated Integra Products and Partially Treated Integra Products, less the following deductions (to the extent otherwise then or previously included in the gross amounts invoiced and in respect of which no previous deduction was taken): (i) amounts taken or accrued for sales, distributor or other commissions allowed, discounts allowed dealers, trade and/or quantity and cash discounts; (ii) refunds, rebates, chargebacks, replacements or credits and allowances actually allowed or granted to purchasers on account of contractual obligations, rejections, returns, or billing errors and for uncollectible amounts (except to the extent later collected) on Sales; (iii) sales, use and/or other excise taxes, import and/or export duties paid, tariffs, and any other governmental tax or charge (except income taxes) imposed on or at the time of production, importation, use, or sale of the Treated Integra Product or Partially Treated Integra Product, including any value added taxes, and taxes on medical devices; (iv) shipping insurance costs and prepaid transportation and/or freight charges. Net Sales shall exclude any amounts Integra or its Affiliates receive for Treated Integra Product or Partially Treated Integra Product that are used for clinical trials required or reasonably deemed to be desirable for Regulatory Approval or additional product indications in any country. + +1.18. "Non-Treated Integra Product" means an Integra Product that does not utilize or embody, in whole or in part, the PcoMed Surface Modification Technology. + +1.19. "Notice of Initial Acceptance of First Product Order" means Integra's acceptance of the Treated Integra Product or Partially Treated Integra Product pursuant to the First Product Order. Such acceptance shall be issued in the form of Attachment C by Integra within ten (10) business days of receipt by Integra or its Affiliates of product (and related quality and testing documentation) meeting specifications mutually agreed upon by Integra and PcoMed. + +1.20. "Partially Treated Integra Product" means an Integra Product that (i) utilizes or embodies, in whole or in part, the PcoMed Surface Modification Technology and (ii) a portion of which (not including radiographic or radiopaque markers) is formed from a material other than PEEK or PAEK and does not utilize or embody the PcoMed Surface Modification Technology. + +1.21. "PcoMed Regulatory Data" means PcoMed information associated with regulatory procedures relating to the PcoMed Surface Modification Technology, including bench and animal data, submission data and methodologies, responses of Regulatory Authorities to submissions, information pertaining to such submissions, and additional data generated as required for US Marketing Clearance, EU Marketing Clearance or commercial launch of a product using or embodying the Surface Modification Technology. + +1.22. "PcoMed Surface Modification Technology" means a proprietary PcoMed osteoconductive commercially pure titanium *** molecular surface modification of PEEK (polyetheretherkeytone), PEKK (polyetherkeytonekeytone), and/or PAEK (polyaryletherkeytone) materials as illustrated in Attachment A. + +1.23. "PcoMed Technology" means any technology owned, licensed or controlled by PcoMed as of the Effective Date, including the (i) PcoMed Surface Modification Technology and (ii) coating, surface, application, surface modification and pretreatment technology and knowhow, and all technology Derived by PcoMed during or after the Term, together with any improvements, enhancements, or extensions of or to any of the foregoing, and Intellectual Property Rights therein, but excluding any technology or information relating solely to or Derived solely from Integra Technology. The PcoMed Technology includes all proprietary ideas in any form and embodied in any media, technical information, ideas, discoveries, knowledge, know-how, skill, experience, 4 *** Portions of this page have been omitted pursuant to a request for Confidential Treatment filed separately with the Commission. + + + + + +concepts, data, processes, procedures, methods, techniques, protocols, formulae, trade secrets, Inventions (whether or not patentable), media, research tools, compositions, software, hardware, instruments, documents, works of authorship, formulations, and other physical, chemical or biological materials and information, including, without limitation, clinical and regulatory strategies, test data (including pharmacological, toxicological and clinical test data), analytical and quality control data, manufacturing, patent, marketing and legal data or descriptions, apparatus, prototypes, devices, chemical formulations, compound compositions of matter, product samples, assays and similar information and Inventions. + +1.24. "Regulatory Approval" means, with respect to a country in the Territory, all approvals, licenses, registrations, or authorizations by an applicable Regulatory Authority necessary to import, commercialize, transport, store, market and sell Treated Integra Product and/or Partially Treated Integra Product in such country, including labeling, pricing, or reimbursement approvals. + +1.25. "Regulatory Authority" means the FDA in the United States, and the equivalent regulatory authority or governmental entity having the responsibility, jurisdiction, and authority to approve the to importation, commercialization, transport, storage, marketing and sale of the Treated Integra Product or Partially Treated Integra Product in any country or jurisdiction outside of the United States. + +1.26. "Sale" or "Sales" or "Sell" or "Sold" means the transfer or disposition by Integra or its Affiliates of a Treated Integra Product or a Partially Treated Integra Product for value to Integra Customers in the Territory + +1.27. "Territory" means worldwide, during the thirty six (36) month period following Notice of Initial Acceptance of First Product Order. Thereafter, "Territory" may exclude the People's Republic of China ("PRC"), to the extent that Integra has had no sales of Treated Integra Products in that country. In the event that Integra has had no such sales, PcoMed shall give sixty (60) days advance written notice of PcoMed's intent to utilize a third party to market the PcoMed Surface Modification Technology in the PRC . + +1.28. "Third Party" means any entity or person other than (i) Integra and its Affiliates, or (ii) PcoMed and its Affiliates. + +1.29. "Treated Integra Product" means an Integra Product that utilizes or embodies, in whole or part, the PcoMed Surface Modification Technology, excluding Partially Treated Integra Product. + +1.30. "US Marketing Clearance" means Regulatory Approval of a Treated Integra Product or Partially Treated Integra Product for use in the Field in the United States. 2. CONSIDERATION. + +2.1. Milestone Payments. + +(a) First Payment. Integra shall pay PcoMed $*** ( *** US dollars) upon full execution of this Agreement. + +(b) Second Payment. Integra shall pay PcoMed $*** ( *** US dollars) within 30 days after Notice of Initial Acceptance of First Product Order. Integra shall place the First Product Order within sixty (60) days of the Effective Date of this Agreement. 5 *** Portions of this page have been omitted pursuant to a request for Confidential Treatment filed separately with the Commission. + + + + + +2.2. Fees. + +(a) Treated Integra Products. Subject to Section 2.2(c), for so long as the Agreement has not been converted to a non-exclusive arrangement under the provisions of Section 3.2, Integra shall pay PcoMed a Fee of ***% of Net Sales of all Treated Integra Product Sold by Integra or its Affiliates. Subject to Section 2.2(c), for so long as Integra's Rights under the Agreement have been converted to a non-exclusive arrangement under the provisions of Section 3.2, Integra shall pay PcoMed a Fee of ***% of Net Sales of all Treated Integra Product Sold by Integra or its Affiliates. The Fee rate payable shall be determined based on whether this Agreement is exclusive or non-exclusive at the time of Integra's Sale of the Treated Integra Product, not at the time of PcoMed's production of the Treated Integra Product. + +(b) Partially Treated Integra Products. Subject to Section 2.2(c), for so long as Agreement has not been converted to a non-exclusive arrangement pursuant to Section 3.2, Integra shall pay PcoMed a Fee of ***% of Net Sales of all Partially Treated Integra Product Sold by Integra or its Affiliates. Subject to Section 2.2(c), for so long as Integra's rights under the Agreement have been converted to a non-exclusive arrangement under the provisions of Section 3.2, Integra shall pay PcoMed a Fee of ***% of Net Sales of all Partially Treated Integra Product Sold by Integra or its Affiliates. The Fee rate payable shall be determined based on whether this Agreement is exclusive or non-exclusive at the time of Integra's Sale of Partially Treated Integra Product, not at the time of PcoMed's production of the Partially Treated Integra Product. + +(c) Fee Adjustment. The Fees may be subject to reduction according to the provisions of Sections 8.5 and 10.1. If it becomes necessary for Integra to settle a Third Party patent infringement suit covered by Section 10.1 (i), solely because of any action or omission of PcoMed or because of Third Party claims against PcoMed Surface Modification Technology and/or such settlement involves obtaining a license from a Third Party, in order to make, have made, import, export, use, offer for Sale, or Sell a Treated Integra Product or a Partially Treated Integra Product in the Field, then Integra may offset, dollar for dollar, against Fees up to *** percent (***%) of Integra's reasonable, out-of-pocket expenses, costs, fees (including reasonable attorneys' fees), and other consideration related to the investigation, negotiation and settlement paid by Integra to such Third Party to obtain such settlement or license with respect to the PcoMed Surface Modification Technology. + +The parties agree that, to the extent Fees are reduced pursuant to this Agreement, for purposes of determining the contribution toward the Minimum Payments, the Fee shall be counted as if it had not been reduced. + +(d) Payment. All Fees shall be due and payable quarterly as provided in Section 6.1. + +2.3. *** Run Fees. + +(a) For Distribution. Integra shall pay PcoMed a flat *** Run Fee of $*** (*** US dollars) for each *** Run in which a maximum of one hundred (100) Non-Treated Integra Product are converted by PcoMed to Treated Integra Product or Partially Treated Integra Product. PcoMed and Integra will make commercially reasonable efforts to increase the *** Run capacity. Changes to the *** Run Fee based on increased capacity will be determined upon completion of the appropriate process validations. + +(b) For Regulatory Purposes. PcoMed will not charge *** Run Fees for reasonable quantities, not to exceed *** units or four *** Runs, of Treated Integra Products or Partially Treated Integra Product and test samples required to complete US Marketing Clearance and/or EU Marketing Clearance testing and validations. 6 *** Portions of this page have been omitted pursuant to a request for Confidential Treatment filed separately with the Commission. + + + + + +(c) Payment. *** Run Fees shall be due and payable within thirty (30) days of each *** Run. + +2.4. Minimum Payments. Integra shall use commercially reasonable efforts to Sell Treated Integra Products and Partially Treated Integra Products that generate payments to PcoMed of no less than the Minimum Payments applicable to each Minimum Payment Period. The Minimum Payment applicable to each Minimum Payment Period shall be due annually on or before 45 days after the last day of each Minimum Payment Period. The Minimum Payment may be satisfied either by payments of the Fees paid pursuant to Sections 2.2 and 2.3, or by the sum of Fees paid and an additional elective cash payment from Integra to PcoMed. It shall remain in Integra's sole discretion whether or not to satisfy the Minimum Payment for any Minimum Payment Period by making an additional elective cash payment. + +In the event that Integra fails to satisfy the Minimum Payment for any Minimum Payment Period, PcoMed may, at its sole election, give notice, as set forth in Section 3.2, for conversion of Integra's exclusive arrangement under Section 3.1 to a non-exclusive arrangement. PcoMed's conversion right is PcoMed's sole and exclusive remedy for Integra's failure to satisfy the Minimum Payment for any Minimum Payment Period. Integra shall have no liability at any time to PcoMed for Integra's failure to pay the Minimum Payment. 3. GRANT OF EXCLUSIVITY COMMERCIALIZATION + +3.1. Grant of Exclusive Rights. Subject to the terms and conditions of this Agreement, PcoMed hereby grants to Integra and its Affiliates a sole and exclusive worldwide right to sell and commercialize Integra Products treated by PcoMed, with the PcoMed Surface Modification Technology (the "Right") for use in the Field in the Territory, including the right to conduct research and development in support of any of the foregoing. Nothing herein grants any rights to Integra (i) to manufacture any products using the PcoMed Surface Modification Technology or (ii) to sell or commercialize any products utilizing the PcoMed Surface Modification Technology other than the Integra Products for use in the Field in the Territory. Neither PcoMed nor its Affiliates shall sell or offer for sale, or grant rights under the PcoMed Surface Modification Technology to any Third Party in the Field in the Territory for products that utilize or embody the PcoMed Surface Modification Technology. Except as expressly stated in the preceding sentence, PcoMed shall not be subject to any restriction under this Agreement with regard to the PcoMed Surface Modification Technology. Without limiting the foregoing or Section 8.3 below, the exclusive nature of the Rights shall not in any way limit PcoMed from making, having made, using, selling or offering for sale products and/or services that do not utilize or embody the PcoMed Surface Modification Technology. + +3.2. Conversion of Rights to Non-Exclusive. Notwithstanding the provisions of Section 3.1, if Integra (i) fails to timely pay any Minimum Payments due under Section 2.4 for any Minimum Payment Period or (ii) fails to make the payments described in Sections 2.1, 2.2, or 2.3 when due, or otherwise defaults under any provision of this Agreement, the exclusive Rights granted to Integra under Section 3.1 shall, at the option of PcoMed, to be exercised in PcoMed's sole and absolute discretion at any time, convert to a non-exclusive arrangement provided that PcoMed gives Integra written notice of its breach and Integra does not cure such breach within forty-five (45) days following Integra's receipt of such notice. If PcoMed makes such election, the Right shall be a nonexclusive right at the end of such 45-day cure period, and PcoMed may thereafter allow other Third Parties to use the PcoMed Surface Modification Technology in products that are in competition with the Integra Products. + +3.3. Exclusive Coating. Integra (i) shall not apply or have applied any other coating to any Integra Products treated with the PcoMed Surface Modification Technology, unless that coating is for the sole purpose of identification or sterilization and (ii) shall not process the PcoMed Surface Modification Technology in any way that will adversely affect its integrity or performance. 7 *** Portions of this page have been omitted pursuant to a request for Confidential Treatment filed separately with the Commission. + + + + + +4. TERM AND TERMINATION. + +4.1. Initial Term. The initial term of this Agreement (the "Initial Term") shall commence on the Effective Date and shall end on the date that payment is due for Minimum Payment Period 7, pursuant to Section 2.4 hereof and as set forth in Attachment B hereof, unless earlier terminated as provided herein. + +4.2. Right to Renew. Thereafter, this Agreement may be renewed for such periods of time and under such terms and conditions as are mutually agreed to in writing and pursuant to Section 12.7. + +4.3. Termination for Cause. Without limiting the other rights to terminate set forth in this Agreement, this Agreement may be terminated by either party as follows: + +(a) Material Breach. In the event that a party materially defaults under or materially breaches any of the provisions of this Agreement, the other party shall have the right to terminate this Agreement upon 60 days' prior written notice, unless such material default or breach is cured during such 60-day period (or in the event any breach is incapable of being cured in such time period, the other party presents a plan to attempt cure of such breach and prevent similar breaches, which plan is reasonably acceptable to the terminating party), in which event this Agreement shall continue in full force and effect. + +(b) Bankruptcy. If a party institutes for its protection or is made a defendant in any proceeding under bankruptcy, insolvency, reorganization or receivership law, or such party is placed in receivership, makes an assignment for benefit of creditors or is unable to meet its debts in the regular course of business, the other party may elect to terminate this Agreement immediately by written notice to the first party without prejudice to any right or remedy the other party may have, including damages for breach. + +4.4. Effects of Termination. + +(a) Obligations Accruing Prior to Termination. Expiration or termination of this Agreement shall not relieve the Parties of any obligation accruing prior to such expiration or termination. + +(b) Termination of Rights. Subject to Section 4.-4(c), upon expiration or termination of this Agreement, the Rights and all rights of either party hereunder shall immediately cease and terminate. + +(c) Transition. After early termination of this Agreement (other than a termination based on a breach of Sections 5 or 8 by Integra) and continuing for a period of eighteen (18) months thereafter, Integra and its Affiliates may Sell any Treated Integra Product and Partially Treated Integra Product in its inventory in the Field, and may, with respect to all components which, prior to the effective date of termination, were ordered or manufactured with the anticipation of being included as Treated Integra Product or Partially Treated Integra Product, complete their manufacture and sell them as though they had been inventory on the effective date of termination, subject to payment of all amounts payable to PcoMed for such Sales under this Agreement. + +(d) Survival. The following provisions of this Agreement and all defined terms shall survive termination of this Agreement for any reason: Sections 2.1, 2.2, 2.3, 4.4(c), 5, 6, 7, 8, 9, 10 and 12. 8 + + + + + +5. CONFIDENTIALITY. + +5.1. Confidential Information. Except to the extent expressly authorized by this Agreement or otherwise agreed to in writing by the parties, each party agrees that, for the term of this Agreement and for 20 years thereafter, it shall keep confidential and shall not publish or otherwise disclose and shall not use for any purpose other than as provided for in this Agreement any Confidential Information furnished to it by the other party pursuant to this Agreement, except that the foregoing shall not apply to any information for which the receiving party can demonstrate that such information: (i) was already known to the receiving party, other than under an obligation of confidentiality, at the time of disclosure by the other party; (ii) was generally available to the public or otherwise part of the public domain at the time of its disclosure to the receiving party; (iii) later became part of the public domain through no act or omission of the receiving party; (iv) was disclosed to the receiving party by a Third Party who had no obligation to the disclosing party not to disclose such information to others; (iv) was independently developed by a person having no knowledge of or access to the disclosing party's Confidential Information; or (v) is an Authorized Disclosure under Section 5.3 below. + +5.2. Ownership of Confidential Information. Confidential Information relating to the PcoMed Technology is PcoMed's Confidential Information. Confidential Information relating to the Integra Technology is Integra's Confidential Information. PcoMed's Confidential Information and Integra's Confidential Information will include all Confidential Information as such term is defined in Section 1.6. + +5.3. Authorized Disclosure. + +(a) Authorized Disclosure. Except as expressly agreed to in writing by Integra or as permitted by this Agreement, PcoMed shall keep Integra Technology and all Integra Confidential Information confidential. Except as expressly agreed to in writing by PcoMed or as permitted by this Agreement, Integra shall keep PcoMed Technology and all PcoMed Confidential Information confidential. Each party may disclose the other party's Confidential Information to the extent such disclosure is reasonably necessary for the following reasons: (i) regulatory filings, including filings with the U.S. Securities Exchange Commission and Regulatory Authorities; (ii) prosecuting or defending litigation provided the Confidential Information is under seal or protective order; and (iii) complying with applicable governmental regulations and legal requirements. + +(b) Notice of Disclosure. Notwithstanding the foregoing, in the event a party is required to make a disclosure of the other party's Confidential Information pursuant to this Section it will, except where impracticable, give reasonable advance notice to the other party of such disclosure and use best efforts to secure confidential treatment of such information. In any event, the parties agree to take all reasonable actions to avoid any unauthorized use or disclosure of Confidential Information hereunder. + +5.4. Employees; Agents. Each party shall ensure that each of its Affiliates and each employee, director, officer, consultant, or other agent of it or of its Affiliates (collectively "Agents"), who has access to Confidential Information of the other party is bound to obligations of confidentiality and non-use substantially similar in scope to those set forth herein Each party agrees that any disclosure or distribution of the other party's Confidential Information within its own organization shall be made only as is reasonably necessary to carry out the intent of this Agreement. + +5.5. Regulatory Submissions of Integra Regulatory Data. During the Term, Integra shall provide all Integra Regulatory Data directly to the relevant Regulatory Authority within the required timeframes. PcoMed is expressly not authorized to disclose Integra Confidential Information directly to 9 + + + + + +any Regulatory Authority unless such disclosure is authorized in writing by Integra, except in the following circumstances: + +(a) where PcoMed is required by regulation or other legal requirement to disclose such information; + +(b) as part of a complaint filing concerning a Treated Integra Product or a Partially Treated Integra Product; + +(c) as part of an FDA audit response; or + +(d) as otherwise required or permitted by this Agreement. + +5.6. Regulatory Submissions of PcoMed Regulatory Data. PcoMed shall provide all PcoMed Regulatory Data directly to the relevant Regulatory Authority within the required timeframes. Integra is expressly not authorized to disclose PcoMed Confidential Information directly to any Regulatory Authority unless such disclosure is authorized in writing by PcoMed, except in the following circumstances: + +(a) where Integra is required by regulation or other legal requirement to disclose such information, + +(b) as part of a complaint filing concerning a Treated Integra Product or a Partially Treated Integra Product; + +(c) as part of an FDA audit response; or + +(d) as otherwise required or permitted by this Agreement + +5.7. Injunctive Relief. The parties expressly acknowledge and agree that any breach or threatened breach of this Section 5 may cause immediate and irreparable harm to the owner of the Confidential Information which may not be adequately compensated by damages. Each party therefore agrees that in the event of such breach or threatened breach and in addition to any remedies available at law, the party that owns the Confidential Information shall have the right to seek equitable and injunctive relief, in connection with such a breach or threatened breach, without posting bond. + +5.8. Terms of Agreement Confidential. The parties agree that the terms of this Agreement are confidential and shall not be disclosed by either party to any Third Party (except to a party's professional advisors) without advance written permission of the other party, subject to the following: (i) either party may make any filings of this Agreement required by law or regulation in any country so long as such party uses its reasonable efforts to obtain confidential treatment for portions of this Agreement as available, consults with the other party, and permits the other party to participate, to the extent practicable, in seeking a protective order or other confidential treatment; (ii) either party may disclose the terms of this Agreement to a Third Party (and its professional advisors) when such disclosure is reasonably necessary in connection with (A) the grant of a license or sublicense to such Third Party, (B) prosecuting or defending litigation, (C) an actual or potential merger, 10 + + + + + +acquisition, placement, investment, or other such transaction with such Third Party, or (D) the sale of securities to or other financing from such Third Party or a financing underwritten by such Third Party, in which case disclosure may be made to any person or entity to whom such Third Party sells such securities (and its professional advisers); (iii) advance written permission for disclosure will not be required when a party is ordered to disclose information concerning the Agreement by a competent tribunal or such disclosures are required by law, regulation, or stock exchange rules, except that such party shall make all reasonable efforts to limit any disclosure as may be required in the course of legal proceedings by entry of an appropriate protective and confidentiality order, and shall provide the other party with as much advance notice of such circumstances as is reasonably practical. + +5.9. Return of Materials. Any materials or documents which have been furnished by a disclosing party to a receiving party will be promptly returned, accompanied by all copies thereof, or certified as destroyed upon request by the disclosing party following termination of this Agreement, except that a party may retain one copy solely for reference to comply with regulatory or other legal requirements, subject to the obligations of confidentiality herein. 6. PAYMENT AND ACCOUNTING. + +6.1. Payment Terms and Reports. Payments due under Section 2.2 shall be payable to PcoMed by Integra on a quarterly basis within 45 days following the end of each calendar quarter. Each such payment shall be accompanied by a statement setting forth in reasonable detail (i) the number and type of Treated Integra Product and Partially Treated Integra Product sold and the Net Sales applicable thereto, (ii) a breakdown of all the components of Net Sales for the determination of payments due under Sections 2.2 (the numbers may be and type of products may be stated in the aggregate and not by customer and are not required to be detailed by geographic area unless Fee rates are different in different geographic areas). Treated Integra Product and/or Partially Treated Integra Product shall be considered as being sold for the purpose of the calculation of payments due under Sections 2.2 when the payments for the Treated Integra Product and/or Partially Treated Integra Product are received by Integra or its Affiliates from a Third Party. All payments to be made under this Agreement shall be paid in United States dollars. Net Sales of Treated Integra Product and/or Partially Treated Integra Product and fees in currencies other than United States dollars shall be first determined in the currency of the country in which they are earned and shall be converted (for the purpose of calculation only) in accordance with generally accepted accounting principles for financial reporting in the United States. + +6.2. Records and Audits. Integra shall keep and maintain accurate records and documentation pertaining to Net Sales of Treated Integra Product in sufficient detail to permit PcoMed to calculate payments due hereunder. Integra shall retain such records and documentation for a period that is consistent with its Records Retention Policy. Such records and documentation will be available for inspection during such period by an independent certified public accountant selected by PcoMed and reasonably acceptable to Integra, solely for the purpose of verifying the payments made by Integra under this Agreement. Said accountant shall enter into a confidentiality agreement with Integra and shall not disclose to PcoMed any information except that which is necessary to determine whether PcoMed has received all amounts due to it from Integra. Such inspections shall be made no more than once each calendar year during ordinary business hours and on reasonable prior notice and shall be at PcoMed's sole cost and expense. PcoMed shall report the results of any such audit to Integra within 60 days of completion and provide a copy of such audit 11 + + + + + +to Integra. The results of any such audit shall be the Confidential Information of Integra. To the extent that such audit reveals any underpayments by Integra, Integra shall pay to PcoMed the amount of shortfall within 60 days from the date on which the parties actually agreed on the amount of the shortfall, or, in the event the parties do not reach agreement on the shortfall, the date a court issues a judgment finally resolving the matter. + +6.3. Taxes. PcoMed shall pay any and all taxes levied on account of payments it receives under this Agreement. Integra shall pay, or cause to be paid, any and all taxes required to be paid or withheld on any Sales, supply or other transfers for value of Treated Integra Product and/or Partially Treated Integra Product (other than taxes imposed on the income or revenues of PcoMed). All amounts due hereunder shall be without deduction of exchange, collection or other charges, provided that if Integra is required to withhold and pay on behalf of PcoMed any income or other similar tax with respect to the amounts payable under this Agreement, Integra shall deduct such tax payments from and offset against any said payments prior to remittance to PcoMed; and further provided that in regard to any tax so deducted, Integra shall give to PcoMed such assistance as may reasonably be necessary to enable PcoMed to claim exemption therefrom and credit therefor, and in each case shall furnish PcoMed proper evidence of the taxes paid on PcoMed's behalf, provided that Integra shall not be required to incur any out-of-pocket expenses or costs. 7. REPRESENTATIONS AND WARRANTIES + +7.1. Mutual Representations and Warranties. Each party represents and warrants as to itself the following: + +(a) Corporate Power. Such party is duly organized and validly existing under the laws of the state of its organization and has full corporate power and authority to enter into this Agreement and to carry out the provisions hereof. + +(b) Due Authorization. Such party is duly authorized to execute and deliver this Agreement and to perform its obligations hereunder. The person executing this Agreement on such party's behalf has been duly authorized to do so by all requisite corporate action. + +(c) Binding Agreement. The execution, delivery and performance of this Agreement by such party does not conflict with any agreement, instrument or understanding, oral or written, to which it is a party or by which it may be bound, nor, to the party's knowledge, does it violate any material law or regulation of any court, governmental body or administrative or other agency having jurisdiction over it. + +7.2. PcoMed's Representations and Warranties. PcoMed hereby represents and warrants to Integra as follows: + +(a) Sole Owner; No Prior Grant. Except as disclosed to Integra, PcoMed is the sole holder of all legal and equitable right, title and interest in and to the PcoMed Technology. PcoMed has not assigned any of its right, title or interest in or to the Inventions disclosed in the PcoMed Surface Modification Technology. PcoMed has not granted to a Third Party any license under the PcoMed Surface Modification Technology that is inconsistent with, or otherwise restricts, the rights granted to Integra hereunder. PcoMed currently holds valid and effective assignments of all inventors' rights to all the inventions covered by the PcoMed Surface Modification Technology. No Third Party has any right, title or interest in or to the PcoMed Surface Modification Technology. No unnamed inventor has any valid claim to any rights to the inventions contained in the PcoMed Surface Modification Technology and all named inventors are properly named as such. + +(b) No Asserted Infringement. To PcoMed's knowledge after diligent investigation, (i) the PcoMed Surface Modification Technology does not include any trade secret, confidential information, or know-how of such Third Party that has been misappropriated or improperly used or disclosed, or (ii) the application of the PcoMed Surface Modification Technology to Integra Products or the offer, Sale and use of Treated Integra Products or Partially Treated Integra Products will not infringe a Third Party's patent rights because of the PcoMed Surface Modification Technology being applied thereto or practiced thereby. 12 + + + + + +(c) No Litigation. There is no suit, arbitration or legal, administrative or other proceeding or governmental investigation pending or, to PcoMed's knowledge, threatened against (i) PcoMed's consummation of the transactions described herein, or (ii) PcoMed respecting the PcoMed Surface Modification Technology. To PcoMed's knowledge, there are no claims, judgments or settlements involving PcoMed and relating to the PcoMed Surface Modification Technology or the manufacture, use or Sale of any products using the PcoMed Surface Modification Technology, and no pending claims, litigation or proceedings against PcoMed relating to the PcoMed Surface Modification Technology, PcoMed Technology or the manufacture, use or Sale of products using the PcoMed Surface Modification Technology. + +(d) No Approvals. No approval or consent of any person, court or governmental agency is required in connection with PcoMed's execution and delivery of this Agreement and the performance of its obligations hereunder. There are no outstanding liens, encumbrances, Third Party rights, agreements or understandings of any kind, either written or oral, express of implied, regarding the the PcoMed Technology that are inconsistent or conflict with any provision of this Agreement. + +(e) Non-Compete. The Settlement Agreement and Mutual Release between *** and *** does not contain a covenant-non-compete applicable to *** and, to the best of PcoMed's current knowledge, *** is not subject to any covenant-non-compete that would prevent is employment with PcoMed. + +7.3. Integra's Representations and Warranties. Integra hereby represents and warrants to PcoMed as follows: + +(a) Sole Owner; No Prior Grant. Integra is the sole holder of all legal and equitable right, title and interest in and to the Integra Technology. Integra has not assigned any of its right, title or interest in or to the Inventions disclosed in the Integra Technology. Integra has not granted to a Third Party any license under the Integra Technology that is inconsistent with, or otherwise restricts, this Agreement. Integra currently holds valid and effective assignments of all inventors' rights to all the inventions covered by the Integra Technology. No Third Party has any right, title or interest in or to the Integra Technology. No unnamed inventor has any valid claim to any rights to the inventions contained in the Integra Technology and all named inventors are properly named as such. + +(b) No Asserted Infringement. To Integra's knowledge after diligent investigation, (i) the Integra Technology does not include any trade secret, confidential information, or know-how of such Third Party that has been misappropriated or improperly used or disclosed and, (ii) to the best of Integra's knowledge, the Sale of Treated Integra Products or Partially Treated Integra Products will not infringe any currently known Third Party patent rights. + +(c) No Litigation. There is no suit, arbitration or legal, administrative or other proceeding or governmental investigation pending or, to Integra's knowledge, threatened against (i) Integra's consummation of the transactions described herein, or (ii) Integra respecting the Integra Technology. To Integra's knowledge, there are no claims, judgments or settlements involving Integra and relating to the Integra Technology or the manufacture, use or Sale of any products using the Integra Technology, and no pending claims, litigation or proceedings against Integra relating to the Integra Technology or the manufacture, use or Sale of products using the Integra Technology. + +(d) No Approvals. No approval or consent of any person, court or governmental agency is required in connection with Integra's execution and delivery of this Agreement and the performance of its obligations hereunder. There are no outstanding liens, encumbrances, Third Party rights, agreements or understandings of any kind, either written or oral, express of implied, regarding the the Integra Technology that are inconsistent or conflict with any provision of this Agreement. 13 *** Portions of this page have been omitted pursuant to a request for Confidential Treatment filed separately with the Commission. + + + + + +8. INTELLECTUAL PROPERTY OWNERSHIP; PROSECUTION, ENFORCEMENT. + +8.1. Ownership. All PcoMed Technology shall remain the property of PcoMed, and all Integra Technology shall remain the property of Integra. Any Invention that is neither PcoMed Technology nor Integra Technology but that is Derived during the Term jointly by the parties relating to this Agreement shall be the property of (i) PcoMed if it relates primarily to the PcoMed Technology and (ii) Integra if it relates primarily to the Integra Products; provided that the parties may agree that an Invention that is Derived during the Term jointly may become the property of both parties, including Inventions or methods related to the surface preparation of Integra Products. Except with regard to the foregoing joint Inventions or methods, each party hereby assigns to the other, by way of present and future assignment, all of the right, title and interest (including all Intellectual Property Rights therein) that it has or may have in any such Invention that is jointly Derived and that is subject to ownership by the other party. + +8.2. Inventions. All Inventions and Intellectual Property Rights that relate primarily to the PcoMed Technology Derived during the Term of this Agreement shall remain as the sole and exclusive property of PcoMed. + +8.3. Reservation of Rights. Nothing in this Agreement shall be construed as granting to any party any right, title or interest in or to or under any Intellectual Property Rights or Inventions of the other party, other than as expressly agreed by the parties in writing in this Agreement. All rights not specifically granted herein are reserved to the applicable party, which may at all times fully and freely exercise the same except as otherwise restricted herein. + +8.4. Filing, Prosecution, and Maintenance of PcoMed Surface Modification Technology. PcoMed shall at all times, at its sole election and expense, have the exclusive and sole right to file patent applications covering the PcoMed Surface Modification Technology in its own name. If PcoMed elects to file patent applications covering the PcoMed Surface Modification Technology, PcoMed shall be responsible for diligently prosecuting and maintaining, at its sole expense, such patent applications and patents issuing thereon. PcoMed shall retain patent counsel of its choosing in connection with the performance of its obligations under this Section. PcoMed shall keep Integra reasonably informed of its patent prosecution activities with respect to the PcoMed Surface Modification Technology. + +8.5. Enforcement against Third Parties. + +(a) Notice. If either party learns of the actual, suspected, threatened or likely infringement or misappropriation of any of the PcoMed Surface Modification Technology, or any of the Integra Technology, then that party shall give written notice thereof to the other party and shall provide the other party with any evidence of such infringement or misappropriation in its possession. + +(b) Infringement Not Relating Solely to PcoMed Surface Modification Technology. (i) Integra shall have the sole right, but shall be under no obligation, to take any action to enforce any suspected or actual infringement, misappropriation or other unauthorized use of Intellectual Property Rights relating to Treated Integra Products or Partially Treated Integra Products where such infringement, misappropriation or other unauthorized use does not relate exclusively to the PcoMed Technology. If Integra does not have standing without PcoMed joining the action, PcoMed shall join the action at Integra's expense. 14 + + + + + +(c) Infringement Relating Exclusively to PcoMed Surface Modification Technology. (i) PcoMed shall have the first and primary right, but shall be under no obligation, to take any action to enforce any suspected or actual infringement, misappropriation or other unauthorized use of Intellectual Property Rights relating to Treated Integra Products or Partially Treated Integra Products to the extent that such infringement, misappropriation or other unauthorized use relates exclusively to the PcoMed Surface Modification Technology. (ii) PcoMed shall notify Integra of its intent to take any such action. If Integra desires PcoMed to take any such action, Integra shall notify PcoMed of such desire in writing and PcoMed shall have ninety (90) days in which to notify Integra whether it decides to take any action, if it has not already so notified Integra. (iii) Integra may elect to join as a party in PcoMed's action at Integra's expense; provided, however, that if PcoMed does not have standing without Integra joining the action, Integra shall join the action at PcoMed's expense. (iv) If PcoMed does not notify Integra of its desire to take action within ninety (90) days after written request by Integra to do so, or PcoMed agrees to take action and fails to resolve or bring suit to enforce any suspected or actual infringement, misappropriation or other unauthorized use within six months thereafter, then Integra may, but shall be under no obligation to, and at its own cost, require PcoMed to take such enforcement action as Integra deems necessary. If PcoMed takes any such enforcement action, Integra shall reimburse PcoMed for all of its reasonable expenses, costs, and fees, including reasonable attorney fees, incurred in connection therewith, except as provided in Section 8.5(d)(i). Any such reimbursement shall be deducted from the Fees payable by Integra pursuant to Section 2.2 hereof. + +(d) Disagreements; Procedures. (i) Whichever party takes or controls an enforcement action under this Section 8.4 shall be entitled to reimburse itself first out of any sums recovered in such suit or in settlement thereof for all costs and expenses, including reasonable attorneys' fees, involved in the prosecution of such action. Any amount remaining after this reimbursement shall be used to reimburse the other party for all costs and expenses, including reasonable attorney's fees, if any, involved in its participation in such action. Any amounts thereafter remaining shall be split in proportion to the damages from the suspected or actual infringement, misappropriation or other unauthorized use reasonably attributable to the PcoMed Surface Modification Technology versus the damages from the suspected or actual infringement, misappropriation or other unauthorized use reasonably not attributable to the PcoMed Surface Modification Technology. + +Any and all of Integra's reasonable expenses, costs and fees (including reasonable attorneys' fees) incurred by Integra in the investigation, commencement, pursuit, enforcement, defense and settlement of any infringement related exclusively to the PcoMed Surface Modification Technology that are not reimbursed as provided above, shall be fully creditable, dollar for dollar, against the Minimum Payments or Fees that would otherwise be due and owing hereunder. 15 + + + + + +(ii) In the event that a declaratory judgment action alleging invalidity or noninfringement of any of the PcoMed Surface Modification Technology shall be brought against Integra as a result of any enforcement action taken by Integra, Integra shall be responsible for defending such action; provided, however, that within thirty (30) days after commencement of such action, PcoMed shall have the right to intervene and take over the sole defense of the action at its own expense. In the event that a declaratory judgment action alleging invalidity or noninfringement of any of the Integra Technology shall be brought against PcoMed as a result of any enforcement action taken by PcoMed, PcoMed shall be responsible for defending such action; provided, however, that within thirty (30) days after commencement of such action, Integra shall have the right to intervene and take over the sole defense of the action at its own expense. Notwithstanding the foregoing, in the event that a declaratory judgment action is brought against one or both of the parties alleging invalidity or noninfringement of PcoMed Technology and Integra Technology, PcoMed and Integra shall each have the right to participate in the defense of the action at its own expense. 9. LIMITATION OF LIABILITY. + +9.1. Limitation of Liability. NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL, OR INDIRECT DAMAGES ARISING FROM OR RELATING TO ANY BREACH OF THIS AGREEMENT, REGARDLESS OF ANY NOTICE OF THE POSSIBILITY OF SUCH DAMAGES. NOTWITHSTANDING THE FOREGOING, NOTHING IN THIS SECTION IS INTENDED TO LIMIT OR RESTRICT THE DAMAGES AVAILABLE FOR BREACHES OF SECTION 3.1 (GRANT OF RIGHTS), SECTION 5 (CONFIDENTIALITY PROVISIONS), OR SECTIONS 8.1 AND 8.2 (OWNERSHIP AND LICENSE). 10. INDEMNIFICATION. + +10.1. PcoMed's Indemnification. PcoMed shall indemnify and defend Integra and its Affiliates, and the directors, officers, members, employees, counsel , agents and representatives of Integra and its Affiliates, and the successors and assigns of any of the foregoing (the "Integra Indemnitees"), and hold the Integra Indemnitees harmless from and against any and all claims, demands, actions, liabilities, damages, losses, judgments, costs or expenses (including interest and penalties and reasonable attorneys' fees and professional fees and expenses of litigation) (collectively, "Claims") arising out of, in connection with, or resulting from any and all claims incurred by or asserted against Integra Indemnitees for (i) infringement of any patent or other proprietary rights arising solely from or occurring as a result of the manufacture, sale, offer to sell, importation and/or use of PcoMed Surface Modification Technology; (ii) any and all breaches of the representations and warranties of this Agreement by PcoMed; and (iii) product defects or liability associated with the PcoMed Surface Modification Technology. Integra may offset all costs and expenses covered under (i) above against the Fees as provided in Section 2.2 (c) as its sole and exclusive remedy for the recovery of such costs and expenses. + +10.2. Integra's Indemnification. Integra shall indemnify and defend PcoMed and its Affiliates, and the directors, officers, members, employees, counsel , agents and representatives of PcoMed and its Affiliates, and the successors and assigns of any of the foregoing (the "PcoMed 16 + + + + + +Indemnitees"), and hold the PcoMed Indemnitees harmless from and against any and all claims, demands, actions, liabilities, damages, losses, judgments, costs or expenses (including interest and penalties and reasonable attorneys' fees and professional fees and expenses of litigation) (collectively, "Claims") asserted by third parties and arising out of, in connection with, or resulting from any and all claims incurred by or asserted against PcoMed for (i) infringement of any patent or other proprietary rights arising from or occurring as a result of the manufacture, sale, offer to sell, importation and/or use of Integra Technology; (ii) any and all breaches of the representations and warranties of this Agreement by Integra; and (iii) any product defects or liability associated with any Integra Products except that arising solely from the PcoMed Surface Modification Technology. 11. USE OF NAMES. + +11.1. Names and Trademarks. Each party agrees not to use or reference the name of the other party, or the other party's logos or trademarks in any advertising, sales promotion, press release or other communication relating to this Agreement without obtaining such party's prior written consent. Notwithstanding the foregoing, a party may use or reference such information to the extent reasonably necessary for (i) regulatory filings, including filings with the U.S. Securities Exchange Commission and Regulatory Authorities, (ii) prosecuting or defending litigation, or (iii) complying with applicable governmental regulations and legal requirements. Notwithstanding the foregoing, Integra shall have the right to indicate that the Treated Integra Products and Partially Treated Integra Products were partly manufactured by PcoMed. 12. MISCELLANEOUS. + +12.1. Notices. Any notice, request, instruction or other document required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been given (i) if mailed with the United States Postal Service by prepaid, first class, certified mail, return receipt requested, at the time of receipt by the intended recipient, (ii) if sent by Federal Express, Airborne, or other overnight carrier, signature of delivery required, at the time of receipt by the intended recipient, (iii) if sent by facsimile transmission, when so sent and when receipt has been acknowledged by appropriate telephone or facsimile receipt, or (iv) if hand-delivered, at the time of receipt by the intended recipient, addressed as follows: (a) For Integra: + +Brian Larkin, President, Global Spine and Orthobiologics Integra LifeSciences Corporation 311 Enterprise Drive Plainsboro, New Jersey 08536 + +Patricia Jacobson, Corporate Counsel Integra LifeSciences Corporation 2302 La Mirada Drive Vista, CA 92081 + +General Counsel Integra LifeSciences Corporation 311 Enterprise Drive Plainsboro, NJ 08536 17 + + + + + +(b) For PcoMed: + +Steve Jacobs CEO PcoMed, LLC. 105 S. Sunset St. Suite O Longmont, CO 80501 + +With required copy to: + +Alan Keeffe Sherman & Howard LLC 675 Snapdragon Way Suite 350 Steamboat Springs, CO 80477 + +12.2. Compliance with Laws. Each party shall comply with all applicable federal, state and local laws and regulations in connection with its activities pursuant to this Agreement. + +12.3. Governing Law. This Agreement shall be construed and enforced in accordance with the laws of the State of New Jersey. + +12.4. Dispute Resolution. In the event of any controversy or claim relating to, arising out of or in any way connected to any provision of this Agreement (a "Dispute"), either Party may, by notice to the other Party, have such dispute referred to their respective senior officials designated below or their successors, for attempted resolution by good faith negotiations within 30 days after such notice is received. Any Dispute that is not resolved through such negotiations may be referred to binding arbitration in Denver, Colorado with the Judicial Arbiter Group as part of a 3 person panel, with costs borne separately by each party, to be conducted in accordance with the rules of the American Arbitration Association. (a) For Integra: + +Brian Larkin President, Global Spine and Orthobiologics Integra LifeSciences Corporation 311 Enterprise Drive Plainsboro, New Jersey 08536 (b) For PcoMed: + +Steven Jacobs CEO PcoMed, LLC. 105 S. Sunset St. Suite O Longmont, CO 80501 18 + + + + + +12.5. No Waiver. Failure of any party to enforce a right under this Agreement shall not act as a waiver of that right or the ability to assert that right unless such party has signed an express written waiver as to a particular matter for a particular period of time. + +12.6. Severability. If any provision of this Agreement shall be found by a court of competent jurisdiction to be void, invalid or unenforceable, the provision shall be considered severed from this Agreement and shall not affect the validity or enforceability of the remainder of this Agreement. The parties shall make a good faith effort to replace any invalid or unenforceable provision with a valid and enforceable one such that the objectives contemplated by the parties when entering this Agreement may be realized. + +12.7. Modification. No change, modification, addition or amendment to this Agreement is valid or enforceable unless in writing and signed and dated by the authorized officers of the parties to this Agreement. + +12.8. Entire Agreement. This Agreement and the Attachments attached hereto constitute the entire agreement between the parties and replace and supersede as of the Effective Date any and all prior agreements and understandings, whether oral or written, between the parties with respect to the subject matter hereof, except any prior Confidential Disclosure Agreement(s). + +12.9. Successors. Except as otherwise expressly provided in this Agreement, this Agreement shall be binding upon, inures to the benefit of, and is enforceable by, the parties and their respective heirs, legal representatives, successors and permitted assigns. + +12.10. Construction. This Agreement has been prepared, examined, negotiated and revised by each party and their respective attorneys, and no implication shall be drawn and no provision shall be construed against any party to this Agreement by virtue of the purported identity of the drafter of this Agreement or any portion thereof. + +12.11. Counterparts. This Agreement may be executed simultaneously in one or more counterparts, each of which shall constitute one and the same instrument. + +12.12. Assignment. This Agreement shall be binding upon and shall inure to the benefit of PcoMed and Integra, and their successors and assigns. Neither party shall assign their respective rights under this Agreement without the prior written consent of the other party. Notwithstanding the foregoing, no such consent shall be required for either party to assign this Agreement (i) to an Affiliate provided the party to this Agreement continues to be liable for all obligations hereunder, or (ii) in connection with a merger or sale of all or substantially all of the assets of such party to which this Agreement relates, provided in the case of (ii) the successor or assignee assumes all liabilities hereunder. + +12.13. Further Assurances. Each party shall do, execute, acknowledge and deliver, and cause to be done, executed, acknowledged or delivered, all such further acts, transfers, conveyances, assignments or assurances as may be reasonably required to consummate the transactions contemplated by this Agreement. + +12.14. Force Majeure. Except for obligations to make payments payable under this Agreement, each party shall be excused from the performance of its obligations under this Agreement to the extent that such performance is prevented by force majeure and the nonperforming party promptly provides the other party with written notice of the event of force majeure and its effect. Such excuse shall be continued so long as the condition constituting force 19 + + + + + +majeure continues and the nonperforming party takes reasonable efforts to remove or circumvent the interference caused by the condition. For purposes of this Agreement, force majeure shall include an act of God, war, civil commotion, terrorist act, labor strike or lock-out other than at a party's facility, epidemic, failure or default of public utilities or common carriers, destruction of production facilities or materials by fire, earthquake, storm or like catastrophe, and failure of plant or machinery (provided that such failure could not have been prevented by the exercise of skill, diligence, and prudence that would be reasonably and ordinarily expected from a skilled and experienced person engaged in the same type of undertaking under the same or similar circumstances). + +12.15. Independent Contractors. Each party shall act solely as an independent contractor, and nothing in this Agreement shall be construed to give either party the power or authority to act for, bind or commit the other party in any way. Nothing herein shall be construed to create the relationship of partnership, principal and agent or joint venture between the parties. + +IN WITNESS WHEREOF, the parties have caused their duly authorized representatives to execute this Agreement as of the Effective Date. INTEGRA LIFESCIENCES CORPORATION PCOMED, LLC + +By: /s/ Brian Larkin By: /s/ Steve Jacobs + +Name: Brian Larkin Name: Steve Jacobs + +Title: President Title: CEO + +Date: May 29, 2013 Date: May 15, 2013 20 + + + + + +ATTACHMENT A PcoMed Surface Modification Technology + +*** i *** Portions of this page have been omitted pursuant to a request for Confidential Treatment filed separately with the Commission. + + + + + +ATTACHMENT A PcoMed Surface Modification Technology (continued) + +*** ii *** Portions of this page have been omitted pursuant to a request for Confidential Treatment filed separately with the Commission. + + + + + +Attachment B Minimum Payments + +PERIOD MINIMUM PAYMENT Minimum Payment Period 1 $ *** Minimum Payment Period 2 $ *** Minimum Payment Period 3 $ *** Minimum Payment Period 4 $ *** Minimum Payment Period 5 $ *** Minimum Payment Period 6 $ *** Minimum Payment Period 7 $ *** + +For this purpose: + +"Minimum Payment Period 1" means the one-year period commencing on the date set forth in the Notice of Initial Acceptance of First Product Order. + +"Minimum Payment Period 2" means the one-year period commencing on the first day after Minimum Payment Period 1. + +"Minimum Payment Period 3" means the one-year period commencing on the first day after Minimum Payment Period 2. + +"Minimum Payment Period 4" means the one-year period commencing on the first day after Minimum Payment Period 3. + +"Minimum Payment Period 5" means the one-year period commencing on the first day after Minimum Payment Period 4. + +"Minimum Payment Period 6" means the one-year period commencing on the first day after Minimum Payment Period 5. + +"Minimum Payment Period 7" means the one-year period commencing on the first day after Minimum Payment Period 6. *** Portions of this page have been omitted pursuant to a request for Confidential Treatment filed separately with the Commission. + + + + + +ATTACHMENT C + +NOTICE OF INITIAL ACCEPTANCE OF FIRST PRODUCT ORDER + +This Notice references the Agreement executed effective as of , 2013, by and between Integra LifeSciences Corporation ("Integra") and PcoMed, LLC ("PcoMed") ("Agreement"). In accordance with Section 12.1 (Notices) and pursuant to Section 4.1 of the Agreement, notice is hereby given that the date of Integra's acceptance of the First Product Order (as defined in the Agreement and as approved by the applicable Regulatory Authority for sale) is designated as the day of , 20 . + +This Notice of Initial Acceptance of the First Product Order is issued by Integra LifeSciences Corporation on this day of , 20 . By: + +Name: + +Title: \ No newline at end of file diff --git a/full_contract_txt/SECURIANFUNDSTRUST_05_01_2012-EX-99.28.H.9-NET INVESTMENT INCOME MAINTENANCE AGREEMENT.txt b/full_contract_txt/SECURIANFUNDSTRUST_05_01_2012-EX-99.28.H.9-NET INVESTMENT INCOME MAINTENANCE AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..eb2cdd10f9159b2c955b50d192dd582ea44ed81c --- /dev/null +++ b/full_contract_txt/SECURIANFUNDSTRUST_05_01_2012-EX-99.28.H.9-NET INVESTMENT INCOME MAINTENANCE AGREEMENT.txt @@ -0,0 +1,125 @@ +Exhibit 28(h)(9) + +RESTATED NET INVESTMENT INCOME MAINTENANCE AGREEMENT SECURIAN FUNDS TRUST + +RESTATED NET INVESTMENT INCOME MAINTENANCE AGREEMENT, effective as of May 1, 2012, by and between Advantus Capital Management, Inc. (the "Investment Adviser"), Securian Financial Services, Inc. (the "Underwriter") and Securian Funds Trust (the "Trust"), a Delaware statutory trust, on behalf of the Trust's Advantus Money Market Fund (the "Fund"). + +WHEREAS, pursuant to an Agreement and Plan of Reorganization approved by both the Board of Trustees of the Trust and the Board of Directors of Advantus Series Fund, Inc. (the "Series Fund") on July 28, 2011, and approved by a majority of the shareholders of each Portfolio of the Series Fund on October 21, 2011, each Portfolio of the Series Fund was reorganized into a separate Fund of the Trust effective as of May 1, 2012; and + +WHEREAS, the Investment Adviser, the Underwriter and the Series Fund have previously entered into a Net Investment Income Maintenance Agreement, effective as of February 1, 2009 and an Amended and Restated Net Investment Income Maintenance Agreement effective as of October 29, 2009 (the "Prior Agreements"); and + +WHEREAS, the parties have determined that each desires to restate and adopt the Prior Agreements as set forth herein; and + +WHEREAS, the Trust is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end management company of the series type, and the Fund is a series of the Trust; and + +WHEREAS, the Trust and the Investment Adviser have entered into an Investment Advisory Agreement dated May 1, 2012 (the "Advisory Agreement"), pursuant to which the Investment Adviser will render investment advisory services to the Fund for compensation based on the value of the average daily net assets of the Fund; and + +WHEREAS, the Trust and the Underwriter have entered into an Underwriting and Distribution Agreement dated May 1, 2012 (the "Underwriting Agreement") pursuant to which the Underwriter acts the principal underwriter for the Fund, and receives compensation thereunder pursuant to the Fund's Rule 12b-1 Plan; and + +WHEREAS, the Trust and the Investment Adviser have determined that it is appropriate and in the best interests of the Fund and its shareholders to maintain the Fund's daily "Net Investment Income" (as defined in paragraph 1.1 below) at or in excess of zero. + + + + + +NOW, THEREFORE, the parties hereto agree as follows: + + + + + + + + + + + + 2 + +1. Net Investment Income Maintenance. + + + +1.1 Net Investment Income. "Fund Investment Income", as defined in paragraph 1.2 below, minus "Fund Operating Expenses" as defined in paragraph 1.3 below equals Net Investment Income. If the Fund's Net Investment Income on any day is below zero, the Investment Adviser shall waive its Advisory Fee or reimburse the Fund an amount (defined as "Expense Waiver") sufficient to produce a Net Investment Income of zero. + + 1.2 Fund Investment Income. Fund Investment Income includes interest and dividends, net of foreign withholding taxes, plus income from securities lending activities, if applicable. Fund Investment Income does not include realized and unrealized gains or losses on investments and foreign currencies. + + + +1.3 Fund Operating Expenses. Fund Operating Expenses are the aggregate expenses of every character incurred by the Fund, including but not limited to investment advisory fees of the Investment Adviser (but excluding interest, taxes, brokerage commissions and other expenditures which are capitalized in accordance with generally accepted accounting principles and other extraordinary expenses not incurred in the ordinary course of the Fund's business). Fund Operating Expenses do not include "acquired fund fees and expenses" as defined in SEC Form N-1A, as it may be amended from time to time. + + + +1.4 Method of Computing Expense Waiver. To determine the Expense Waiver (Investment Adviser's liability), each day the Fund Operating Expenses shall be subtracted from the Fund Investment Income to produce the daily Net Investment Income. If the daily Net Investment Income is below zero for any day, the Investment Adviser shall first waive or reduce its advisory fee for such day by an amount sufficient to bring the Net Investment Income to zero. If the amount of the waived or reduced advisory fee for any such day is insufficient to bring the Net Investment Income to zero , the Investment Adviser shall also pay Fund expenses or reimburse the Fund an amount that, together with the waived or reduced advisory fee, is sufficient to bring the Net Investment Income to zero. + + + +1.5 Right of Recovery. The Investment Adviser shall have the option to recover the full amount waived, paid or reimbursed (the Expense Waiver) by the Investment Adviser on any day on which the Fund's Net Investment Income exceeds zero. In no event, however, shall the Expense Waiver, or any portion thereof, constitute an obligation of the Fund to the Investment Adviser on any such day unless the Investment Adviser has expressly exercised its right to recover all or a portion of the Expense Waiver on that day, in which case such portion of the Expense Waiver elected by the Investment Adviser for recovery that day shall then be due and payable. If, and to the extent, the payment by the Fund to the Investment Adviser of the Expense Waiver would cause the Fund's Net Investment Income to fall below zero, such payment shall be deferred until such date on which the + + + + + + + + + + + +In connection with the obligation of the Investment Adviser to maintain the Fund's Net Investment Income as set forth in section 1 herein, the Underwriter may waive its Rule 12b-1 fees contemplated by the Underwriting Agreement, and shall have the same rights to be reimbursed by the Fund as the Investment Adviser, as set forth in Section 1 herein, to the extent the Investment Adviser has not already been reimbursed by the Fund for its payment of Rule 12b-1 fees. + +This Agreement shall continue in effect for a period of one year from the date of its execution and from year to year thereafter provided such continuance is specifically approved by a majority of the trustees of the Trust who (i) are not "interested persons" of the Trust or any other party to this Agreement, as defined in the 1940 Act, and (ii) have no direct or indirect financial interest in the operation of this Agreement ("Non- Interested Trustees"). This Agreement will terminate upon the termination of the Advisory Agreement except the Investment Adviser's Right of Recovery set forth in section 1.5 herein. + + + + 3 + + + +payment would not cause the Fund to have a Net Investment Income of less than zero, provided that the right of the Investment Adviser to receive such payment shall expire three years after the day it effected such waiver, or made such payment or reimbursement. For purposes of this paragraph 1.5 (and for purposes of paragraph 2), the Expense Waiver that may be recovered from the Fund shall include the amount of any unrecovered Expense Waiver under the Prior Agreements, provided that the Investment Adviser's right to receive such payment shall also expire three years after the day it effected such waiver, or made such payment or reimbursement. + + + +1.6 Payment. If the Investment Adviser is required to reimburse the Fund, the Investment Adviser shall make such payment within 30 days after each month-end in the amount due the Fund as of each month. If the Fund is required to pay the Investment Adviser the Expense Waiver, the Fund shall make such payment within 30 days after each month-end. Reimbursements to the Fund or the Expense Waiver shall not include any additional charges or fees whatsoever, including, e.g., interest accruable on such reimbursements or the Expense Waiver. + + 1.7 Operating Expense Limit. Any Expense Waiver recovery payment by the Fund to the Investment Adviser shall not cause the Operating Expense for the Fund's full year of operations to exceed 1.25% of the Fund's average daily net assets. + +2. The Underwriter. + +3. Term and Termination of Agreement. + +4. Miscellaneous. + + 4.1 Captions. The captions in this Agreement are included for convenience of reference only and in no other way define or delineate any of the provisions hereof or otherwise affect their construction or effect. + + + + + + + +IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written. + + + + + + 4 + + 4.2 Interpretation. Nothing herein contained shall be deemed to require any party hereto to take any action contrary to its Articles of Incorporation or Agreement and Declaration of Trust or By-Laws, or any applicable statutory or regulatory (including self-regulatory) requirement to which it is subject or by which it is bound. + + + +4.3 Definitions. Any question of interpretation of any term or provision of this Agreement, including, but not limited to the investment advisory or Rule 12b-1 fee, the computations of net asset values, and the allocation of expenses, having a counterpart in or otherwise derived from the terms and provisions of the Advisory Agreement, the Underwriting Agreement, or the 1940 Act, shall have the same meaning as and be resolved by reference to such Advisory Agreement, the Underwriting Agreement, or the 1940 Act. + +SECURIAN FUNDS TRUST + +By: /s/ David M. Kuplic Name: David M. Kuplic Title: President + +ADVANTUS CAPITAL MANAGEMENT, INC. + +By: /s/ Robert L. Senkler Name: Robert L. Senkler Title: President + +SECURIAN FINANCIAL SERVICES, INC. + +By: /s/ George I. Connolly Name: George I. Connolly Title: President and CEO \ No newline at end of file diff --git a/full_contract_txt/SENMIAOTECHNOLOGYLTD_02_19_2019-EX-10.5-Collaboration Agreement.txt b/full_contract_txt/SENMIAOTECHNOLOGYLTD_02_19_2019-EX-10.5-Collaboration Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..224a6a1836c3d4f173cd69c303373dbf987e8ff2 --- /dev/null +++ b/full_contract_txt/SENMIAOTECHNOLOGYLTD_02_19_2019-EX-10.5-Collaboration Agreement.txt @@ -0,0 +1,145 @@ +Contract No.: DDCX S DG KC 201812130044 Exhibit 10.5 Collaboration Agreement This Collaboration Agreement (hereinafter referred to as this "Agreement") is made and entered into by and between the following parties in Haidian District, Beijing. This Agreement may be executed in paper form offline or in electronic form through the Didi Chuxing Online Contracting Platform (website: https://Agreement.didichuxing.com/, hereinafter referred to as the "Contracting Platform"). The Agreement executed offline in paper form shall become effective upon the completion of the execution by both Parties (hereinafter referred to as the "Effective Date"); and the Agreement executed online in electronic form shall become effective upon the completion of the execution on the Contracting Platform by both Parties (hereinafter referred to as the "Effective Date") recorded by the third-party Online Document Depository. Party A: Didi Chuxing Technology Co., Ltd. Legal Representative: Ting Chen Party B: Hunan Ruixi Financial Leasing Co., Ltd Legal Representative: Xianglong Li Party A and Party B shall be individually referred to as a "Party" and collectively as the "Parties". Whereas 1. As a company providing third-party e-commerce platform services, and desires to assist the Driver User (hereinafter referred to as the "Driver User") registered on the platform to lease vehicles from Party B with the most favorable treatment in the market, so as to reduce the cost of using vehicles for the Driver User; 2. Party B is an automobile leasing company, with the qualification, resources and ability to carry out the automobile financial leasing business, and it acknowledges and undertakes to implement the platform rules formulated by Party A; 3. Both Parties hope to clarify the cooperation contents, rights and obligations of each Party And other matters through this Agreement. NOW, THEREFORE, the Parties hereto agree as follows: 1. Definitions Unless otherwise stated, the following terms used in this Agreement shall have the following meanings: 1.1 "Platform" refers to the third-party e-commerce platform operated by Party A: Xiaoju Online Ride-Hailing Marketplace. + + + + + +Contract No.: DDCX S DG KC 201812130044 1.2 "Platform Rules" refers to normative documents related to the platform noticed to Party B by Party A by E-mail or other means as well as the various normative documents published on the platform such as the Regulations on Vehicle Rental Service Business of Xiaoju Online Ride-hailing Marketplace and Code of Conduct and Risk Notification of Vehicle Service Company. 1.3 "Didi" refers to Party A, Party A's Affiliates and their respective software and platforms operated by them. 1.4 "Ride-hailing Vehicles" refers to the online car-hailing vehicles. 1.5 "Ride-hailing Service" refers to the online non-peripatetic car hailing service provided by certain entities through the service platforms based on Internet technology using qualified vehicles and Driver Users, which integrates supply and demand information. 1.6 "Affiliates" refers to companies that have an affiliated relationship with each other, including, but not limited to, the companies, firms, corporations or other organizations of such nature established, participated in the establishment, operated, controlled by shareholders, legal representative, actual controllers or directors, supervisors, etc. and their immediate family members, collateral relatives within three generations, close relatives, etc. 1.7 "Senior Management" refers to the officers defined in the Company Law of the People's Republic of China and the chief executive officer, chief financial officer, supervisors, etc. in a company. 1.8 "Laws" refers to laws, administrative regulations, local laws and regulations, autonomous regulations and separate regulations promulgated by the competent authorities, rules and regulations of the Ministries and Commissions of the State Council and local governments, judicial interpretations, normative documents, etc. in China. 1.9 "Period of Cooperation" refers to the term of validity of this Agreement. 1.10 "Confidential Information" refers to any oral or written materials and information exchanged between the Parties in respect of this Agreement, including, but not limited to, the following: 1.10.1 The content of this Agreement and its supplemental agreement(s); 1.10.2 The business (including, but not limited to, business decisions, management methods, operating strategies, incentive strategies, promotional information), operating, financial, technical, product, service information of any party obtained or received by the other party during the performance of this Agreement or during the term of this Agreement; 1.10.3 The other party's user profiles, information, etc.; 1.10.4 The processes and results of settlement of any dispute arising from this Agreement 1.11 "Intellectual Property Rights" refers to: (a) patents and patent applications; (b) trademarks, service marks, trade names, trade dress and domain names, and goodwill exclusively attached thereto; (c) copyrights, including the copyrights of computer software and the copyrights of the database; (d) secrets and proprietary information, including trade secrets and technical secrets; and (e) any rights similar to subparagraphs (a)-(d) provided in any law, whether or not any one of the foregoing has been applied for registration or registered. 1.12 "Personal Injury Compensation" refers to the compensation provided in the Interpretation of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Cases on Personal Injury Compensation. + + + + + +Contract No.: DDCX S DG KC 201812130044 1.13 "Xiaoju online Ride-Hailing Marketplace SaaS System" refers to the operation and management service system for Party B's vehicles developed by Xiaoju online Ride-Hailing Marketplace. When Party B signs the Vehicle Operation Management Service Agreement, it shall be deemed to be connected to the SaaS system of Xiaoju online Ride-Hailing Marketplace. Party B is free to choose the following two types of services: One is the regular free service of Xiaoju online Ride-Hailing Marketplace. One is the regular value-added charging service of Xiaoju online Ride-Hailing Marketplace. 2. The Cooperation During the term of cooperation, Party B shall, through the Platform provided by Part A, present to the Driver User the vehicle for rent and financing and leasing solutions in line with this agreement between Party A and Party B and the Platform Rules. Party B shall provide the Driver User with long-term and stable rental sources and the most favorable financial leasing scheme, complete the vehicle leasing transactions with the Driver User through the Platform, and provide the Driver User with high-quality financial leasing services. 3. Rights and Obligations 3.1 Party A's rights and obligations: 3.1.1 Party A shall maintain and operate the Platform in accordance with the available technology, so that the Platform can operate normally, and Party B can use the Platform normally and conduct vehicle financial leasing transactions with the Driver User smoothly. 3.1.2 Party A shall reply to problems encountered by Party B during the registration in and use of the Platform in a timely manner. 3.1.3 Party A is entitled to inspect any information and materials submitted by Party B and the information generated by the use of the Platform from time to time. In case any problem or question is discovered in the aforesaid information or materials, Party A is entitled to take the following measures: 3.1.3.1 To request Party B to submit more information or documentary evidence; 3.1.3.2 To request Party B to correct such problem; 3.1.3.3 Removing commodities from the shelves and temporarily shutting down some functions of the Platform account and other measures considered necessary by Party A. 3.1.4 Party A is entitled to inspect the information released by Party B on the Platform. If the information released by Party B contains the following information, Party A may, without informing Party B, take restrictive measures such as deleting the information or removing the commodities from the shelves: 3.1.4.1 Information unrelated to or not intended for a vehicle leasing transaction; + + + + + +Contract No.: DDCX S DG KC 201812130044 3.1.4.2 False information that is misleading or exaggerating the facts or inconsistent with the facts; 3.1.4.3 Information of malicious competition or other information that may disrupt the normal transaction order of the Platform; 3.1.4.4 Information that violates the Laws or the public interests or may harm the legitimate interests of the Platform and/or other third parties. 3.1.5 During the cooperation, Party A shall have the right to inquire relevant information of Party B through various channels and investigate Party B's background. If the investigation results show that Party B has major business risks and other conditions, Party A shall have the right to unilaterally terminate the cooperation if the assessment suggests that Party A's reputation is sufficiently affected therefrom. 3.2 Party B's rights and obligations: 3.2.1 Party B shall be entitled to use the Platform to publish commodities and its own information subject to the compliance with this Agreement and the Platform Rules and prior approval by Party A. 3.2.2 Party B shall guarantee the authenticity, legality, completeness, accuracy and validity of any materials and information provided by it to Party A, and guarantee that such materials and information are in compliance with this Agreement and the Platform Rules during the Period of Cooperation; and shall guarantee the validity and security of the email address, telephone number, address, postal code, etc., provided by it to Party A, and the successful contact by Party A or the Driver Users with Party B through the aforementioned contact information. In case such materials or information or contact information is changed or invalid, Party B shall notify Party A of the changed information or the invalidity at least 3 working days in advance. 3.2.3 Party B guarantees that the vehicles released and leased on the Platform shall meet the following conditions simultaneously: 3.2.3.1 Obey the requirements of this agreement, Platform Rules, Laws; can drive on the road, and can be used to engage in online Ride-hailing operation in the place where the leased vehicle is used; 3.2.3.2 The vehicles are passenger cars that meet the Safety Specifications for Power-driven Vehicles Operating on Roads (GB 7258-2012) and have less than 7 seats, including the driver's seat; 3.2.3.3 No decorations, devices or equipment (except those required by law) have been installed, and there are no other modifications or additions that may affect the safe operation of the vehicle or endanger the personal and property safety of the vehicle drivers and passengers; 3.2.3.4 The engine has not been replaced or adjusted in a way different from that of the factory, or the performance has been substantially modified or installed (except those permitted by local laws and passed the safety inspection of the traffic administrative department of the public security organ). + + + + + +Contract No.: DDCX S DG KC 201812130044 3.2.3.5 There is no any right defect or ownership dispute. Party B is entitled to lease the vehicle to others in the form of financial leasing for the operation of online Ride-hailing or other purposes. 3.2.4 Party B shall be obliged to verify the actual use of the leased vehicles, assist and ensure that the Driver User purchases corresponding insurance according to the actual use of the leased vehicles; if the leased vehicle is used for online Ride- hailing operation, in case that the provisions of the local Laws on online Ride-hailing insurance are changed within the term of cooperation or the provisions of the local Laws on online Ride-hailing are officially implemented within the term of cooperation, Party B shall inform the Driver User within 3 working days after the change of local Laws and regulations on Ride-hailing or the effective implementation thereof, assist the Driver User and ensure that the insurance of the leased vehicle shall be changed in accordance with the provisions of local Laws on ride-hailing to make the insurance of the leased vehicle comply with the provisions of relevant Laws and regulations on Ride-hailing at that time. 3.2.5 If the vehicle released by Party B on the Platform does not comply with the Platform Rules or legal provisions irregularly updated, Party B shall notify the Platform within 1 working day after the new Platform Rules or new Laws come into force and remove the vehicle by itself. 3.2.6 When the vehicle leased by Party B is used by the Driver User to provide online Ride-hailing Services on Didi platform, Party B shall try its best to cooperate with Party A to conduct investigation and collect evidence and assist Party A to deal with relevant matters in case of passenger complaints, traffic accidents or complaints received by Party A or reports of Party B's behaviors in violation of this Agreement or platform rules. 3.2.7 Party B shall ensure a long-term and stable supply of vehicles and give priority to meeting the rental needs of the Driver User. 3.2.8 Party B shall complete automobile lease transactions with Driver Users through the Platform, and enter into agreements with Driver Users by using the Financial Leasing Agreement template provided by Party A. 3.2.9 Party B shall truthfully provide Party A with one original copy of the Financial Leasing Agreement signed by and between Party B and the Driver User, together with its annexes of Vehicle Handover List and Financial Leasing Confirmation Letter, etc., and shall upload the scanned copy to the Platform within 1 working day after the signing of the Agreement. 3.2.10 Party B shall fulfill its rights and obligations to the Driver User who has signed the Agreement with Party B by means of strictly following the template of Financial Leasing Agreement and its annex provided by Party A. 3.2.11 Party B is entitled to collect a deposit from the Driver User for the leased vehicle. The amount of the deposit shall be the same as or lower than the amount of the deposit announced by Party B on the Platform, and the collected deposit shall be less than RMB20,000 (RMB TWENTY THOUSAND ). + + + + + +Contract No.: DDCX S DG KC 201812130044 3.2.12 Party B shall ensure that the Driver User's down payment, monthly rent, last payment, deposit (fee items shall not exceed the aforementioned items) are collected only in accordance with the Financial Leasing Agreement, and the overall internal rate of return (IRR) of the financial leasing scheme shall be kept within 25%. 3.2.13 In the cases that Party B guarantees to sign the Financial Leasing Agreement with Party A's users, Party B will agree on the provisions of terminating the Financial Leasing Agreement unilaterally by the Driver User in advance with the Driver User according to the conditions or better conditions specified in Annex 2 Terms and Conditions for the Driver User to Terminate Financial Leasing Agreement in Advance, and the relevant provisions shall at least comply with the following agreements: 3.2.13.1 Party B shall clarify the logic and method for calculating the liquidated damages due to the unilateral termination of the Financial Leasing Agreement by the Driver User; 3.2.13.2 After signing the agreement with Party B, the Driver User is entitled to terminate the Financial Leasing Agreement 7 days in advance in the last week (7 natural days) of every three months. 3.2.13.3 In case that the Driver User unilaterally terminates the Financial Leasing Agreement in advance, he/she does not need to pay the remaining rent and the last payment; 3.2.13.4 In case that the Driver User unilaterally terminates the Financial Leasing Agreement in advance, Party B shall collect the liquidated damages from the Driver User within 30% of the "down payment + total monthly rent + last payment" stipulated in the Financial Leasing Agreement; If major maintenance (maintenance fee is RMB3,000 or above) of the leased vehicle occurs during the lease period, Party B may charge the depreciation expense of the Driver User's rental of the vehicle in addition to the liquidated damages mentioned above, and the depreciation expense for each time shall be less than 20% of the current maintenance fee. (Depreciation expense can only be charged in that the Driver User unilaterally terminates the Agreement in advance without paying the full amount to buy the vehicle.) 3.2.13.5 Party B shall refund all the monthly rental paid by the Driver User in accordance with the Financial Leasing Agreement and all the other expenses excluding that paid to the third party (e.g. vehicle purchase tax, insurance premium, etc.). 3.2.13.6 Party B shall explain the conditions for the termination of the Agreement to the Driver User, fully communicate to reach consensus, and obtain the signature confirmation from the Driver User. 3.2.13.7 In case that Party B has different conditions for termination of agreement for different types of vehicles, they shall all conform to the provisions of this agreement, and the written consent of Party A shall be obtained in advance before they can be applied to the Financial Leasing Agreement signed with the Driver User. + + + + + +Contract No.: DDCX S DG KC 201812130044 3.2.14 Where a traffic accident or other safety accident occurs in a leased vehicle, Party B shall actively deal with relevant matters and settle insurance claims. If the Driver User has paid the maintenance fee and personal injury compensation for the leased vehicle caused by traffic accident or other safety accident, Party B shall pay full insurance premium after deducting the expenses that the Driver User shall pay to Party B (if any) to the Driver User within 1 working day after receiving the insurance compensation. 3.2.15 In case that the vehicle leased by Party B to the Driver User is used for the online Ride-Hailing Service, where a traffic accident or other safety accident occurs when a leased vehicle provides an online Ride-Hailing Service, if passengers or other subjects in traffic accidents or safety accidents (subjects other than the Driver User who rent vehicles and passengers) require the Driver User to Compensate For Their Personal Injury, or if the Driver User fails to pay or is unable to pay while the carriage Agreement losses, or if the passenger requests the Driver User or other subjects to bear the carriage liability of the online Ride-hailing Service, Party B shall deal with these situations timely, assume the carrier responsibility of leasing the vehicle which provides online Ride-Hailing Service and pay the compensation in time; If it is the Driver User's responsibility, Party B may recover it from the Driver User. 3.2.16 In case that the Driver User fails to pay the monthly rent in full and on time as stipulated in the Financial Leasing Agreement, Party B shall deal with it according to the following procedures: a notification shall be sent to the Driver User to require the Driver User to pay the monthly rent within a reasonable time firstly. If the Driver User refuses to correct and delays the payment of the monthly rent for more than 30 days, Party B can take reasonable measures to recover the vehicle or terminate or waive the Financial Leasing Agreement. 3.2.17 Party B guarantees that the Driver User will enjoy the most favorable treatment in accordance with the terms and conditions stipulated in This Agreement during the Period of Cooperation. In case that the price and other substantive terms offered by Party B to such entity are more favorable than those enjoyed by the Driver User in any commercial cooperative relationship signed or formed between Party B and any entity, the Driver User and Party B shall amend the provisions in the Financial Leasing Agreement signed by both parties to enable the Driver User to enjoy the same or more favorable provisions as those enjoyed by such other entities, such modifications shall include but not limit to the modifications of the monthly rent terms. 3.2.18 Party B shall guarantee that after this agreement comes into force, Party B shall sign the Vehicle Operation Management Service Agreement on the related platform of Party A (i.e. "Xiaoju online Ride-Hailing Marketplace") and uniformly access to the SaaS system of Xiaoju online Ride-Hailing Marketplace, otherwise, Party A is entitled to unilaterally terminate this agreement. 4. Deposit 4.1 Party B confirms that the deposit paid in accordance with this Agreement is a deposit for the successful cooperation between Party B and Party A on the vehicle operational leasing business and the vehicle financing leasing business to guarantee that Party B will fulfill its obligations under this Agreement and the Cooperation Agreement signed by and between Party A and Party B regarding the vehicle operational leasing business and the Platform Rules and Party B agrees that Party A may deduct reasonable liquidated damages, overdue fines, compensations, etc. from the deposit when Party B breaches this Agreement, or the above mentioned Cooperation Agreement or the Platform Rules. In case that Party A deducts any amount from the deposit, it shall issue a corresponding receipt to Party B. + + + + + +Contract No.: DDCX S DG KC 201812130044 4.2 During the period of cooperation, Party B shall pay the deposit in accordance with the following rules: For each payment of RMB 100,000, Party B can list up to 100 vehicles on Party A's platform (for example, if Party B wishes to list 275 vehicles, it shall pay RMB 300,000. A deposit of RMB300,000 permits Party B to list up to 300 (included) vehicles on Party A's platform. 4.3 Party B shall first pay a deposit of RMB100,000 to Party A within 5 working days after the signing of this Agreement. For list more products, Party B shall apply to Party A 3 working days in advance and after obtaining the consent of Party A, pay the deposit in full within 5 working days from the date of receipt of the deposit notice from Party A. 4.4 If Party B shall pay liquidated damages for breach of this Agreement or violation of the platform rules, Party A is entitled to request Party B to pay the liquidated damages. If Party B refuses or fails to pay, Party A is entitled to deduct the corresponding amount from the deposit. In this case, Party B shall pay additional deposit equivalent to the liquidated damages when it pays the liquidated damages. For example, if Party B shall pay liquidated damages as much as RMB N, it shall pay additional RMB N to increase the deposit paid in accordance with Article 4.2 after it pays the liquidated damages or Party A deducts the liquidated damages from the deposit. 4.5 If Party B shall increase the deposit in accordance with this Agreement, it shall pay the additional deposit in full within 5 working days from the date of receipt of Party A's deposit payment notice. If Party B's deposit is deducted in whole or in part due to Party B's breach of this Agreement or other reasons, Party B shall replenish the deposit within 5 working days from the deduction date of the deposit as well as pay the additional deposit in full in accordance with Article 4.4. 4.6 If Party B fails to pay, increase or replenish the deposit in accordance with this Agreement, Party A shall have the right to charge a penalty as much as 1‰ of the unpaid amount for each day. If Party B fails to pay, increase or replenish the deposit in full within 15 days after the expiration of the payment period specified in this Agreement, Party A shall have the right to terminate this Agreement unilaterally. 4.7 After Party B terminates or rescinds this Agreement, if there is no effective Vehicle Lease Agreement between Party B and a Driver User (if the operational leasing business is conducted) and there is no dispute on the vehicle lease between Party B and a Driver User, Party A shall refund the remaining deposit to Party B on a interest-free basis within 30 days after receipt of the deposit receipt returned by Party B; if there is any effective Vehicle Lease Agreement between Party B and a Driver User or if there is any disputes on the vehicle lease between Party B and a Driver User, Party A shall refund the remaining deposit to Party B on a interest-free basis within 30 days after receipt of the deposit receipt returned by Party B after the driver confirms the Vehicle Lease Agreement has been fulfilled or the dispute has been resolved. + + + + + +Contract No.: DDCX S DG KC 201812130044 5. Taxes The taxes incurred by the Parties hereto due to the performance of this Agreement shall be borne by the Parties respectively. 6. Intellectual Property Rights Party A has exclusive rights and interests in all rights, ownership, titles, interests and intellectual property rights arising from or created by the performance of this Agreement. 7. Confidentiality 7.1 Each party shall maintain the confidentiality of all confidential information and shall not disclose any confidential information to any third party without the prior written consent of the other party, except for the information which (a) is or will be known by public (not caused by the disclosure to the public by the receiving party); (b) is required to be disclosed by the applicable law or any securities exchange rules or regulations; (c) is necessary to be disclosed to the counsels or financial consultants by either party in respect of the transaction under this Agreement, and such counsels or financial consultants are bound by similar confidentiality obligations hereunder. Disclosure of any confidential information by an employee or agency employed by either party shall be deemed to be a disclosure of such confidential information by that party, and the party shall be liable for breach of this Agreement. This provision shall survive any change or the termination of this Agreement for any reason. 7.2 Without the written consent of Party A, Party B shall not disclose the relevant information of Party A or Party A's Driver Users obtained by Party B due to this Agreement or the cooperation hereunder to any third parties (including but not limited to disclosing the cooperation content to any media, website, WeChat Official Account and other promotional channels or making false propaganda and report), or Party A is entitled to unilaterally cancel the cooperation and pursue Party B's liability for breach of the Agreement according to the actual loss. 8. Representations and Warranties 8.1 Party A represents and warrants as follows: 8.1.1 Party A is a company duly incorporated and validly existing under the Laws of China; 8.1.2 The execution and performance of this Agreement by Party A is within the scope of its corporate capacity and its business scope approved by and registered with competent authorities; Party A has taken necessary corporate actions and has been duly authorized and has obtained the consent and approval from third parties and governmental agencies, and will not be in violation of any Laws or other restrictions binding upon Party A. 8.1.3 This Agreement constitutes the legal, valid and binding obligations of Party A and may be enforced in accordance with its terms. + + + + + +Contract No.: DDCX S DG KC 201812130044 8.2 Party B represents and warrants as follows: 8.2.1 Party B is a company duly incorporated and validly existing under the Laws of China; 8.2.2 The registered capital of Party B is more than RMB5 million (FIVE MILLION) 8.2.3 Party B is in good standing and has not been included in the Lists of Enterprises with Abnormal Operations and the List of Enterprises with Serious Illegal and Dishonest Acts; 8.2.4 Party B's signing and performance of this Agreement is within the permissive scope registered by virtue of its legal personality (the administrative license for or filing of the business scope has been obtained or completed if required); Party B has taken necessary corporate actions and has been duly authorized and has obtained the consent and approval from third parties and governmental agencies, and will not be in violation of any laws or other restrictions binding upon Party B. 8.2.5 This Agreement constitutes the legal, valid and binding obligations of Party B and may be enforced in accordance with its terms. 9. Termination 9.1 In the following cases, either party may terminate this Agreement immediately by written notice to the other party, and this Agreement shall terminate as of the date on which such party gives such written notice of termination: 9.1.1 The other party ceases to carry on business or goes into liquidation (other than voluntary liquidation for the purpose of reorganization or combination of bona fide bankruptcy with prior written consent of such party) or dissolution; 9.1.2 The other party is unable to pay its debts as they become due, or has a receiver, administrative receiver or administrator (or any similar person provided by the Laws of the place where the company is located or incorporated) appointed for bankruptcy of all or any part of its property, or will go into any bankruptcy; 9.1.3 Unless otherwise agreed, the other party is in violation of any provision of this Agreement and fails to remedy such violation within 30 days from the receipt of notice of such violation from such party (if capable of remedy); 9.1.4 The other Party Breaches the Agreement, and such party may terminate this Agreement in accordance with this Agreement or the Platform Rules. 9.2 In the event of any changes in industry policies, industry restrictions, business strategy adjustments and/or business adjustments, the Parties shall notify the other Party At least 30 days in advance to terminate this Agreement. This Agreement shall terminate as of the date of termination specified in the notice of termination. If this Agreement terminates pursuant to this Article, in addition to the payment of the amount incurred and confirmed under this Agreement to the other Party, the Parties shall not be liable for the termination of this Agreement, including, but not limited to, payment of late fees, liquidated damages, compensation. 9.3 In the case of a written notice 15 days in advance from either party to the other Party And a payment of the liquidated damages of RMB10,000 (RMB TEN THOUSAND), this Agreement shall terminate as of the date of termination stated in the notice of termination. + + + + + +Contract No.: DDCX S DG KC 201812130044 9.4 Upon the termination of this Agreement, Party A is not obliged to retain any information on the Platform or provide such information to Party B; but Party A is entitled to retain Party B's registration data and Party B's data in connection with the driver services during the Period of Cooperation. Upon the termination of the Agreement, in the event of any violation by Party B of this Agreement or the Platform Rules during the Period of Cooperation is discovered, Party A is still entitled to exercise its rights under this Agreement to prosecute Party B for such violation 9.5 After the termination of this Agreement, Party B shall strictly perform the Financial Leasing Agreement signed with the Driver User until the lease expires. 9.6 Upon the termination of this Agreement, Party B shall remove and delete any information or signs related to Didi contained in the materials in the building, equipment, furnishings inside and outside Party B's premises and materials published by Party B in any form. 10. Liability for Breach 10.1 The following acts belong to Class I breaches of the Agreement. If Party B has any of the following acts, Party B shall immediately correct the breach and Party A is entitled to send to Party B a Confirmation Letter on the Breach of the Partner of Xiaoju Online Ride-Hailing Marketplace 10.1.1 Party B fails to cooperate with Didi's staff, for example: 10.1.1.1 Party B is in violation of Article 3.1.3.1, and fails to provide more information or documentary evidence as required by Party A; 10.1.1.2 Party B is in violation of Article 3.2.6, and fails to cooperate with Party A in the investigation and evidence collection or to assist Party A in handling related matters; 11.1.1.3 Party B fails to affix its seal on the reply letter of the Confirmation Letter on the Breach of the Partner of Xiaoju Online Ride-hailing Marketplace or fails to provide Party A with such original sealed letter; 11.1.1.4 Other noncooperation with Didi's staff by Party B. 10.1.2 Being complained due to the service for more than 3 times by different Driver Users within 1 natural month, including but not limited to the noncompliance of the requirements for the time limits for telephone invitations and offline interviews (Party B shall make an invitation by phone within 1 day after a Driver User places an order and conduct an offline interview with the driver within 7 days), bad service attitude, etc. 10.1.3 Party B is in violation of Article 3.2.2, and fails to notify Party A of any change or invalidity of any material, information, contact information provided to Party A at least 3 working days prior to such change or invalidity; 10.1.4 Party B is in violation of Article 3.2.9, and fails to upload the scanned copy of the Consulting Service Agreement to the Platform within 1 working day from the execution of such Agreement with any Driver User; + + + + + +Contract No.: DDCX S DG KC 201812130044 10.1.5 Party B disseminates any information not published through Didi's official channels, or disseminates rumors relating to Didi; 10.1.6 Party B conducts other Class A breaches specified in the Platform Rules. 10.2 The following acts constitute Class B breaches. In the event of any breach below by Party B, Party B shall immediately remedy the breach, and Party A is entitled to request Party B to pay the liquidated damages of an amount from RMB1,000 (RMB ONE THOUSAND) to RMB 5,000 (RMB FIVE THOUSAND) based on the consequences of the breach, and send the Confirmation Letter on the Breach of the Partner of Xiaoju Online Ride-hailing Marketplace to Party B. 10.2.1 In the event of any Class A breach, Party B fails to remedy such breach in a timely manner or within the time limit notified by Party A, or the Agreement is still breached upon the completion of the remedy; 10.2.2 In the event of three Class A breaches in 12 consecutive calendar months, the third Class A breach shall be regarded as a Class B breach; 10.2.3 The breach provided in Article 10.1.3 occurs twice in 12 consecutive natural months; 10.2.4 Violating Article 3.2.7 for being complained due to no stock of vehicles for more than 3 times by different Driver Users within 1 natural month; 10.2.5 Listing or leasing on the platform a vehicle that does not meet the requirements of this Agreement or the requirements of the Platform Rules. For example: 10.2.5.1 Any vehicle listed and leased on the Platform failing to comply with Article 3.2.3; 10.2.5.2 Any vehicle listed and leased on the Platform failing to meet the other requirements of the Platform Rules; 10.2.6 Party B failing to remove any vehicle from the Platform within 1 working day after a recall decision is issued for breach of Article 3.2.5 or in case that any vehicle is recalled after being listed on the Platform; 10.2.7 Violating Article 3.1.4 for releasing information which is not related to the vehicle lease business or releasing malicious competition and other information which may disrupt the normal trading order of the Platform, or releasing any information in violation of the Law or against the public interest or any information which may damage the legitimate interests of the three parties; 10.2.8 Concealing significant vehicle information (eg, whether a major repair has occurred), or the vehicle information published on the Platform (eg, service life) and the financial leasing programs (including but not limited to the down payment, monthly rent, balance payment, value-added services, etc.) being inconsistent with the actual vehicles delivered by the drivers or the Financial Leasing Agreement; 10.2.9 Being complained due to any failures of Class A vehicles (including but not limited to oil leakage, safety system failure, power system failure, etc.) listed on the Platform for more than 5 times from different Driver Users; + + + + + +Contract No.: DDCX S DG KC 201812130044 10.2.10 The monthly efficiency indicators failing to meet the standards or the assessment results of the experience indicators failing to meet the standards (failing to reach 60 points (excluded)) in three consecutive indicator assessments; 10.2.11 Violating Article 3.2.11 for charging a Driver User a deposit of more than RMB20,000 (twenty thousand); 10.2.12 Violating Article 3.2.17 due to not providing the most preferential treatment to a Driver User; 10.2.13 Being in any Class II violations as specified in the Platform Rules. 10.3 The following acts constitute Class C breaches. In the event of any breach below by Party B, Party B shall immediately remedy the breach, and Party A is entitled to request Party B to pay the liquidated damages of an amount from RMB5,000 (RMB FIVE THOUSAND) to RMB50,000 (RMB FIFTY THOUSAND) based on the consequences of the breach, and send the Confirmation Letter on the Breach of the Partner of Xiaoju Online Ride-hailing Marketplace to Party B. 10.3.1 In the event of any Class B breach, Party B fails to remedy such breach in a timely manner or within the time limit notified by Party A, or the Agreement is still breached upon the completion of such remedy; 10.3.2 In the event of three Class B breaches in 12 consecutive calendar months, the third Class B breach shall be regarded as a Class C breach; 10.3.3 Inducing Platform users to transfer the vehicle ownerships to Party B; 10.3.4 Violating Article 3.2.3.3 or 3.2.3.4 for leasing an unqualified vehicle, which later causes a traffic accident or any other safety accident due to retrofitting or installation of new parts; 10.3.5 Violating Article 3.2.4 for the following reasons: The actual use of a leased vehicle is inconsistent with the purpose as agreed in the Financial Leasing Agreement, or although the actual use of the leased vehicle is consistent with the purpose as agreed in the Financial Leasing Agreement, the Driver User is not pursued to buy the corresponding insurance according to the actual use nature of the leased vehicle and therefore the insurance company refuses to pay for the compensation when the leased vehicle has a traffic accident or the Driver User is not pursued to buy the insurance meeting the requirements for the insurance value and type as provided by the law for online vehicle leasing in accordance with Article 3.2.4 and therefore the compensation amount paid by the insurance company is insufficient to cover the Driver User's liability for tort or carrier liability in the traffic accident or safety accident. 10.3.6 Violating Article 3.2.8 for inducing the Driver User to carry out a vehicle leasing transaction outside the Platform or sign a Agreement without using the platform's template of Financial Leasing Agreement; 10.3.7 Violating Article 3.2.10 for failing to perform its obligations to the Driver User in accordance with the Financial Leasing Agreement signed with the Driver User; 10.3.8 Violating Platform Rules for carrying out misleading propaganda (including but not limited to exaggerating the scale of the company, making exaggerated advertisement or fictitious promise of service projects, preferential programs, etc., or misleading the Driver User by use of false facts such as Didi's order precedence); + + + + + +Contract No.: DDCX S DG KC 201812130044 10.3.9 Entering into other agreements with the Driver User in any form other than the Platform's template of Financial Leasing Agreement; or restricting the rights of the Driver User or increasing the obligations of the driver in any form, without a prior written notice to Party A and without the written consent of Party A; 10.3.10 Charging the Driver User any fees under any name in any form other than Party A's template of Financial Leasing Agreement or forcing the Driver User to subscribe any business not related to Didi or forcing Driver Users to make unreasonable consumption; 10.3.11 Disseminate any information not published by Didi through official channels, or spreading rumors that have a negative impact on Didi (eg, causing losses to drivers); 10.3.12 Insulting, intimidating, threatening, deceiving, or forcing any Driver User; 10.3.13 Publishing a system that does not comply with or goes against Didi's business policy or the Platform Rules; 10.3.14 Violating Article 3.2.12 for the IRR of the Financial Leasing Program exceeding the upper limit as agreed in this Agreement; 10.3.15 Violating Article 3.2.13; 10.3.16 Violating Article 3.2.14; 10.3.17 Violating Article 3.2.15; 10.3.18 Violating Article 3.2.16; 10.3.19 Party B conducts other Class C breaches specified in the Platform Rules. 10.4 The following acts constitute Class D breaches. In the event of any breach below by Party B, Party B shall immediately remedy the breach, and Party A is entitled to request Party B to pay the liquidated damages of not less than RMB50,000 (RMB FIFTY THOUSAND) based on the consequences of the breach, and send the Confirmation Letter on the Breach of the Partner of Xiaoju Online Ride-hailing Marketplace to Party B, and terminate the Agreement. 10.4.1 In the event of any Class C breach, Party B fails to remedy such breach in a timely manner or within the time limit notified by Party A, or this Agreement is still breached upon the completion of such remedy; 10.4.2 In the event of three Class C breaches in 12 consecutive calendar months, the third Class C breach shall be regarded as a Class D breach; 10.4.3 Party B is in violation of Article 3.2.2 and provides false materials or information to Party A ; 10.4.4 Party B or Party B's Affiliates use or use in disguised form the company name, trade name, trademark and logo of Party A or Party A's Affiliates without the consent of Party A or Party A's Affiliates or fail to use such names, trademark or logo as agreed, or Party B uses the company name and logo similar to above trademarks and logo (if Party A or Party A's Affiliates considers that the company name or logo used by Party B or Party B's Affiliates is similar to the trade name or trademark of Party A or Party A's Affiliates, Party A may notify Party B and Party B's Affiliates to change its name. If Party B or Party B's Affiliates fail to take measures within 20 days from the receipt of such notice, it shall be deemed as a use of trademark and logo similar to those of Party A or Party A's Affiliates). + + + + + +Contract No.: DDCX S DG KC 201812130044 10.4.5 Party B or Party B's Affiliates conduct illegal or criminal activities relying on the partnership with Didi; 10.4.6 Party B, Party B's shareholders, legal representatives, Senior Management or Party B's Affiliates make illegal profits relying on their relationship with the Didi's staff (including, but not limited to, relatives, couples, friends); 10.4.7 Party B or Party B's shareholders, legal representative, Senior Management or Party B's Affiliates is in violation of the provisions of the Trust and Integrity and Commercial Anti-Bribery Agreement between the Parties; 10.4.8 Party B charges any fee against the Driver Users in the name of Didi; 10.4.9 Party B forces the Driver Users to transact any business irrelative to Didi or forces the Driver Users to have unreasonable consumption, which causes material adverse effects to Didi or causes adverse social effects (including but not limited to collective complaints, illegal assembly, petitions, march, sit-in or containment of Didi by Driver Users, news media releases); 10.4.10 Party B, Party B's staff or Party B's Affiliates are in violation of Article 7 and discloses Party A's confidential information to third parties in any form; 10.4.11 In consideration of the fact that Party B may have access to the relevant trade secrets of Didi during the cooperation, Party B or Party B's any affiliate cooperates with any entity competitive with Didi (including but not limited to Meituan, CAR, Yongche, izu, Caocao, Dida) in any form without prior written notice to and confirmation by Didi; 10.4.12 Party B introduces the entities competitive with Didi (including but not limited to Meituan, CAR, Yongche, izu, Caocao, Dida) to Driver Users, and induces Driver Users to conduct activities directly competing or conflicting with Didi; 10.4.13 Party B instigates and organizes the Driver Users to conduct illegal assembly, petition, march, sit-in or containment of Didi, etc. in any form, or any collective complaints, illegal assembly, petitions, marches, sit-in or containment of Didi and other mass disturbances by Driver Users are incurred by the products or services provided by Party B; 10.4.14 Party B disseminates any information not published through Didi's official channels, or disseminates rumors and causes material adverse effects to Didi (including but not limited to collective complaints, illegal assembly, petitions, marches, sit-in or containment of Didi by Driver Users, and News media releases); 10.4.15 Party B maliciously slanders other companies or takes other mean measures to disrupt the market order and conducts unfair competition: 10.4.15.1 Party B disseminates other rumors to maliciously slander other companies; 10.4.15.2 Party B dispatches undercover personnel to other companies to disrupt the operation order of other companies and solicits Driver Users or management personnel of other companies; + + + + + +Contract No.: DDCX S DG KC 201812130044 10.4.15.3 Party B conducts other activities of unfair competition which seriously disrupt the market order; 10.4.16 Violating Article 8.2 for failing to meet Party A's requirements for cooperative vehicle leasing companies; 10.4.17 Party B conducts other Class D breaches stipulated in the Platform Rules; 10.5 If Party B has a violation of Article 10.3.5, resulting in the insurance company's refusal to pay or insufficient compensation to pay the driver's tort liability or carrier's liability in the traffic accident, the claim amount rejected by the insurance company and the compensation supposed to be paid by the insurance company if the corresponding insurance has been bought shall be borne by Party B. If Party B fails to bear the above mentioned amount rejected and compensation, resulting in any losses to Party A or its users, Party B shall compensate Party A for the losses of Party A and Party A shall have the right to terminate this Agreement unilaterally and shall pursue Party B's liability for breach in accordance with Articles 10.3 and 10.6. 10.6 In the event of any breach of the terms of this Agreement by either party, the breaching party shall remedy such breach within the time limit notified by the observing party. In the event of any losses incurred to the observing party, in addition to the corresponding liability for breach under the Agreement, the breaching party shall also be liable for the compensation for such losses (including, but not limited to, the losses incurred to the counterParty By such breach, the legal costs, notarial fees, appraisal fees, the attorney's fee, the travel expenses, etc., arising from the investigation and affixation of the liabilities of the breaching Party By the counterparty) . Unless any party is in violation of the confidentiality clause, in any case, neither party shall be liable for any indirect, punitive claims, or claims for losses of commercial profits, or damages for business losses of the company or any third Party Arising from this Agreement, or for any loss or inaccuracy of data of any form, whether based on Agreement, tort or any other legal principle, even though the party has been informed of the possibility of such damage. 10.7 If Party B violates this Agreement or the Platform Rules, Party A is entitled to take measures such as suspending the platform services, permanently stopping the platform services, and/or temporarily or permanently disabling the corresponding functions of the vehicle service company, and/or removing the products from the platforms. 10.8 In case any act of either party is in violation of several provisions of this Agreement at the same time, the observing party is entitled to choose one provision as the basis for the investigation and affixation of the liability for breach of the breaching party. In case several acts of either Party Are in violation of several provisions of this Agreement at the same time, the observing party is entitled to investigate and affix the liability for breach of the breaching party in accordance with each provision violated. 10.9 In the event of several valid agreements between Party A and Party B, any act of either party is in violation of such agreements between the Parties at the same time, the observing party is entitled to choose to investigate and affix the liability for breach of the breaching party in accordance with all provisions of all of such agreements or provisions of part of such agreements. + + + + + +Contract No.: DDCX S DG KC 201812130044 11. Governing Law; Dispute Settlement 11.1 The execution, validation, interpretation, performance, modification and termination of this Agreement and the settlement of disputes under this Agreement shall be governed by the Laws of China. 11.2 Any dispute arising from the interpretation and performance of the terms of this Agreement shall be settled by the Parties through negotiation in good faith. If the Parties fail to reach an agreement on the settlement of such dispute within 30 days from the requirement of such negotiation by either party, such dispute may be submitted to the Beijing Arbitration Commission for arbitration in accordance with its arbitration rules in force then. The arbitral award shall be final and binding upon the Parties. 11.3 During the settlement of the dispute, the Parties shall continue to fully perform this Agreement, except for the matters in dispute. 12. Notices 12.1 All notices and other communications to either party hereto required or permitted hereunder shall be made in Chinese, by personal delivery or by registered mail with postage prepaid, commercial courier service or by e-mail to the address of the party specified in this Agreement. The date on which such notice shall be deemed to have been served upon such party shall be determined as follows: 12.1.1 Notices given by personal delivery, registered mail with postage prepaid or commercial courier service shall be deemed effectively given on the date of receipt or rejection at the designated address for notices; 12.1.2 Notices given by e-mail shall be deemed effectively given when the mail enters into the addressee's e-mail address contained in this article or at the time of the receipt of the system prompt for the failed transaction in the case of the invalidation of receiver's e-mail address. 12.2 For the purpose of notices, the contacts and contact information designated by the Parties are as follows: 12.2.1 Party A's contacts: (Telephone/Mobile number:) Address: E-mail: 12.2.2 Party B's contacts: Xianglong Li (Telephone/Mobile number: 0731-85240273) Address:Floor 9, Huitong Building, No. 168 Hehua Road, Hehua Street, Furong District, Changsha City, Hunan Province E-mail: 77128824@qq.com 12.3 In the event of any change to the contacts, address or e-mail address of either party, such party shall notify the other Party At least 3 working days in advance by the means provided in this article. Otherwise, the original address or e-mail address shall still be the valid address for notices. + + + + + +Contract No.: DDCX S DG KC 201812130044 13. Force Majeure 13.1 "Force Majeure" means an event beyond the reasonable control of the Parties, unforeseeable or even foreseeable, but unavoidable by the Parties to this Agreement, which prevents, affects or delays the performance by either party of its obligations under this Agreement in whole or in part. Such event includes, but is not limited to, natural disaster, war, fire, riot, strike, Internet connection failure, computer system failure, communication failure, computer virus, hacker attack or any other similar events that shall be considered as events of force majeure in accordance with commercial practices. 13.2 The affected party may temporarily suspend the performance of its obligations under this Agreement until the effects of the event of force majeure are eliminated. The affected party shall fully notify the other party in writing of the occurrence of such event of force majeure in a timely manner, notifying the other party of the possible effects of such event on this Agreement, and shall use its best efforts to eliminate such event and mitigate its adverse effects, and provide the written evidence issued by relevant notary office within a reasonable period. Upon the fulfillment of the aforesaid obligations, the affected party shall not be liable to the other party for the breach within the scope of effects of such event of force majeure. 13.3 In case the event of force majeure sustains for more than 20 days, either party is entitled to terminate this Agreement unilaterally by written notice, and this Agreement shall terminate from the date on which such party gives such written notice of termination. 14. Independent Contractor Nothing in this Agreement shall be deemed to create any joint venture, partnership, or agency relationship between the Parties. Without the written consent of the authorized representative of the other party, neither party is entitled to execute any agreement on behalf of the other party or cause the other party to be bound by any law or borrow money or incur any liability or obligation on behalf of the other party hereto. Each party shall be solely liable for the actions of its employees and contractors employed for the purposes of the promotional activities. 15. Data and Privacy Protection The collection, storage and maintenance by either party of the third-party data, personal data or information obtained as a result of the execution or performance of this Agreement shall comply with all applicable laws, regulations or rules. + + + + + +Contract No.: DDCX S DG KC 201812130044 16. Business Principles 16.1 Party B warrants that it does not give or offer any gift to any employee, agent or representative of Party A, and that there is no other improper interest transfer (including but not limited to giving material benefits or other non-material benefits in the form of gifting or lending or at a price significantly higher or lower than the market price) with the aforesaid persons, and it will not offer or grant such items or carry out improper benefits transfer in the future, in order to obtain any business from Party A, or to affect the aforesaid persons in the aspects of the terms, conditions or performance of any purchase agreement or order (including but not limited to this Agreement) between the Parties. 16.2 Party B warrants and undertakes that it will strictly abide by the commercial anti-bribery Laws and regulations in force in China and provisions for anti-corruption in all applicable Laws and regulations including the Foreign Corrupt Practices Act (FCPA) of the United States, and it shall not provide any bribes to any government official, employee of state-owned enterprises or public agency during the performance of this Agreement. Any violation of this article by Party B shall be considered as a material breach of the this Agreement, and Party A is entitled to immediately terminate this Agreement and the cooperation relationship between the Parties, and request Party B to pay the liquidated damages of RMB 50,000 (RMB FIFTY THOUSAND) and indemnify for all losses incurred to Party A thereby. 16.3 Party A's e-mail address for receiving the report of any violation of Code of Business Conduct is jubao@didiia.com. In the event of any violation of its Code of Business Conduct found by Party A, Party B shall cooperate with Party A in the investigation as required by Party A. If Party B fails to cooperate with Party A in such investigation, it shall be deemed as a material breach by Party B. In such case, Party A is entitled to immediately terminate the Agreement and the cooperation relationship between the Parties, and request Party B to pay the liquidated damages of RMB50,000 (RMB FIFTY THOUSAND) and indemnify for all losses incurred to Party A thereby. 17. Transfer During the term of this Agreement, neither party may assign, or transfer its rights and obligations under this Agreement in whole or in part, without the prior written consent of the other party. However, Party A may transfer its rights and obligations under this Agreement to any of its Affiliates in whole or in part with the written notice to Party B, and Party B irrevocably agrees and permits Party A's such rights, provided that Party A shall ensure that such transferee or assignee will comply with relevant laws and regulations, and ensure that Party B is exempt from any liability and consequences arising from any violation of applicable laws and regulations by such transferee or assignee, and Party A shall indemnify for the losses incurred to Party B thereby. 18. Severability If any one or more provisions contained in this Agreement is held to be invalid, illegal or unenforceable in any way in accordance with any law or regulation, the validity, legality or enforceability of the remaining provisions in this Agreement shall not in any way be affected or impaired. Such invalid, illegal or unenforceable provision shall be replaced by a valid, legal or enforceable provision that has similar economic effects of such invalid, illegal or unenforceable provision by the Parties through good faith negotiation to the fullest extent permitted by laws and expected by the Parties. + + + + + +Contract No.: DDCX S DG KC 201812130044 19. Composition, Modification and Supplement of this Agreement 19.1 All Platform Rules are an integral part of this Agreement. In the event of any inconsistence between the Platform Rules and this Agreement, the Platform Rules shall prevail. If Party B signs this Agreement and uses the Platform, it shall accept to be bound by the Platform Rules. Party A is entitled to develop and revise the Platform Rules pursuant to the operation of the Platform. For the development and revision of the Platform Rules that may affect Party B's rights and obligations, Party A will notify Party B in writing via email 10 days prior to the implementation of the new Platform Rules, and Party B shall decide whether to continue to perform this Agreement within 10 days from the date of receipt of the notice via email. If Party B rejects the new Platform Rules, it shall send a written application for the termination of this Agreement to Party A within 10 days from the date of receipt of such notice. If Party B fails to terminate this Agreement or continue to log in and use the Platform within such 10-day period, it shall be deemed to agree to the new Platform Rules. The new Platform Rules shall become effective as of the effective date specified in the Platform Rules, and Party B shall strictly abide by the new Platform Rules as of the effective date. 19.2 Except for the Platform Rules, any modification and addition to this Agreement shall be signed by the Parties in writing. The modified and supplemental agreements signed by the Parties in connection with this Agreement shall be an integral part of this Agreement and shall have the same legal effect as this Agreement. 20. Limited Liability 20.1 Party A only provides the Platform, and Party B shall select (at its own discretion) the Driver Users to establish the consulting service relationship. Any dispute or controversy arising from the consulting services between Party B and any Driver User shall be settled by Party B and the Driver User, and Party A neither shall be liable for such dispute, nor shall be liable for the losses incurred to Party B and the Driver User during the provision of the consultation service by Party B to the Driver User. 20.2 Party A shall only conduct a formal review for the materials submitted and the information published by Party B. The approval by Party A shall not represent that Party A acknowledges the authenticity and legality of such material and information. In the event of any loss incurred to Party A or any third party due to the false materials and information provided by Party B, Party B shall be liable for compensation and shall be liable to Party A for the breach. 20.3 Party B has fully understood the functions and characteristics of services of the Platform prior to the use of the Platform and agrees that Party A shall not be liable to Party B for any defect in software, insufficiency of function or any necessary improvement. 20.4 Party B's use of the Platform and the acquisition of any information by using the Platform are solely at Party B's independent judgment and is at Party B's own risk (including but not limited to the losses caused by damage to Party B's computer system or mobile phone system or loss of data.) + + + + + +Contract No.: DDCX S DG KC 201812130044 21. Validation and Term This Agreement shall enter into force as of the effective date. Unless this Agreement is early terminated in accordance with this Agreement or other agreements signed by the Parties hereof, the term of the validity of this Agreement shall be one year from the effective date. Party A is entitled to unilaterally terminate this Agreement within three natural months from the signing date of this Agreement. 22. Miscellaneous 22.1 The online Ride-hailing Service agreements such as the Vehicle Leasing Service Cooperation Agreement, the Management Consulting Service Agreement, the Consultation Service Cooperation Agreement, and the Corporate Franchising Management Consulting Service Agreement, the vehicle leasing and consulting service agreements (only limited to the Agreements relevant to Party A's fast ride business, except for those on general franchise business) shall continue to be valid within the scope of cooperation before the signing of this Agreement by and between the Parties hereof, and the deposits received by Party A in accordance with such agreements will temporarily not be refunded. Such agreements shall not be terminated until the end of the cooperation between the Parties under the agreements, at which time the Parties will conduct friendly negotiations on the termination of these agreements. 22.2 The expressions of "not less than", "no more than" and "within" in this Agreement, include the given figure; the expressions of "N working days in advance", "within N working days", "N days in advance", "within N days", include the Nth working day and the Nth day. 22.3 This Agreement shall be executed in triplicate of equal legal effect, with two original copies for Party A and one original copy for Party B. Annex: Agreement for Didi Chuxing Partners on Honesty & Integrity and Anti-Commercial Bribery ————————— [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]—————— Party A: Didi Chuxing Technology Co., Ltd. /s/ Didi Chuxing Technology Co., Ltd. [signature authenticated by third party document depository on December 17, 2018] Party B: Hunan Ruixi Financial Leasing Co., Ltd. /s/ Hunan Ruixi Financial Leasing Co., Ltd. [signature authenticated by third party document depository on December 17, 2018] + + + + + +Contract No.: DDCX S DG KC 201812130044 Agreement for Didi Chuxing Partners on Honesty & Integrity and Anti-Commercial Bribery Party A: Didi Chuxing Technology Co., Ltd. Party B: Hunan Ruixi Financial Leasing Co., Ltd [Instruction: this Agreement shall be exclusively used by Didi Chuxing Technology Co., Ltd. to conclude Agreements with external sides. This Agreement shall be attached to all Agreements signed with external sides as an appendix to guarantee the interests of Contracting parties.] To build a fair and honest business cooperation ecology, the cooperating Parties hereby make and enter into the honesty & integrity and anti-commercial bribery agreement binding on both Parties. To ensure stricter compliance with the provisions of laws and regulations concerning the prohibition of commercial bribery, maintain common interests, and promote sound development of the Parties' relationship, the Parties hereby agree as follows through friendly negotiation for mutual compliance: Article I [Purpose of Contracting] The Parties shall comply with national laws and regulations on anti-commercial bribery, ensure legal business transactions between the Parties, and shall never damage either party's interest for the purpose of improper cooperation interest in any illegal or corruptible manner. The Parties shall strictly comply with this Agreement. The term commercial bribery used in this Agreement refers to all direct or indirect improper interests in material, service or spiritual forms given by Party B or its personnel to Party A's employees in order to obtain the opportunity of cooperation with Party A and cooperation benefits. Article II [Honesty and Integrity Commitments] (I) Party B undertakes: 1. Not to bribe any employee of Didi Chuxing or family members thereof in any way. 2. To support the honesty and integrity construction of Didi Chuxing and assume the obligation of real-name reporting; if any employee directly under Party B or involved in the cooperation doesn't refuse or report any bribe demand from the employees of Didi Chuxing or their family members and meets such demand, it shall be deemed Party B's commitment of bribery. 3. To voluntarily report the connection and interest relationship with the employees of Didi Chuxing. 4. To insist on integrity principle during transactions with Didi Chuxing and at least ensure: all information, documents, materials, data and relevant written and oral statements provided for Didi Chuxing are true and accurate. + + + + + +Contract No.: DDCX S DG KC 201812130044 5. To strictly comply with the commitments made to Didi Chuxing, Agreements, agreements and memos between the Parties, not to conceal any information that may impact the interest of Didi Chuxing, and actively cooperate in the audit of Didi Chuxing. 6. To comply with the provisions in the code of conduct for Didi Chuxing partners, cooperation agreements and other policies. 7. To strictly comply with the provisions concerning Didi Chuxing brand management, and without authorization, shall not use 滴滴, DIDI, Didi Chuxing, DIDI Club, authorized partner and any other easily confusing words. 8. To strictly comply with relevant national laws and regulations, and not to engage in any illegal activity. 9. To strictly manage company employees. 10. To keep practical and realistic, not to communicate any false information internally or to the society, and not to disclose any business secrets of Didi Chuxing. 11. To comply with national laws, regulations and Didi Chuxing provisions, keep honest in bid & tender or business cooperation course, and participate in bid or tender activities and business cooperation according to laws and regulations. Article III [Improper Interest] Party B, Party B's associated companies or employees and associated persons thereof: (1) shall not give cash gift, articles, negotiable securities directly or indirectly, or provide improper interest in other disguised forms in the name of Party B or in personal name to any employee of Party A or associated person (including but not limited to direct relative, collateral relative within three generations, close relatives by marriage or other persons who are closely related or have interest relationship); including but not limited to cash, checks, credit card gifts, samples, or other commodities, entertainment tickets, membership cards, or kickback, return commission in the form of currency or goods, employment or properties, introduction of private business cooperation, and travel, entertainment or personal service at the cost of Party B. (2) Introduce business or other activities to Party A, or to any spouse, friend or relative of Party A's employees as required by Party A's employees. Article IV [Conflicts of Interest] including but not limited to: (1) Party B shall not provide loan or financing of any form for Party A's employees and associated persons; (2) If any of Party B's shareholders, supervisors, managers, senior management personnel (including but not limited to the senior management, chief executive officer, chief financial officer, and other department managers subject to powers or duties as defined in the Company Law), cooperation project manager and project members is Party A's employee or its associated person, the aforesaid person shall truthfully and fully report the same to Party A in writing before cooperation; + + + + + +Contract No.: DDCX S DG KC 201812130044 (3) In the process of cooperation, Party B shall not allow Party A's employees and their direct relative to hold or have a third party to hold Party B's equities (other than shares held through less than 1% outstanding equities in open securities exchange market, through funds without actual control right held directly or indirectly, or through trust of which the beneficiary is not any of the aforesaid person or his/her associated person), or employ Party A's employees and their direct relative (including but not limited to the establishment of formal labor relations, labor dispatching and outsourcing services, part-time consulting, and other forms). If Party B has employed any relative or other associated person of Party A's employees (including but not limited to direct relative, collateral relative within three generations, close relatives by marriage or other persons who are closely related or have interest relationship), Party B shall truthfully and fully report to Party A in written form before Party A and Party B conclude the cooperation agreement or within three days upon employment. Article V [Liability for Default] (1) If Party B commits any violation of the aforesaid agreements, Party A is entitled to unilaterally and completely terminate the Agreement and cooperation with Party B, and no associated entities of Party A will establish commercial cooperation with Party B at any time and under any circumstance in the future, including but not limited to Party B and all of its subsidiaries, branches and associated companies (the associated companies of Party B includes without limitation the companies or other organizations established, participated in, operated, controlled by or otherwise affiliated with Party B's shareholders, legal person, actual controller or directors, supervisors, and their direct relative, collateral relative within three generations, close relatives by marriage or other persons who are closely related or have interest relationship); besides, Party B shall pay liquidated damages to Party A at an amount of RMB 100,000 or 50% of the total amount paid/discharged under the involved order (Agreement), whichever is higher; if Party B's default causes any loss to Party A that cannot be covered by liquidated damages, Party A will recover compensations for actual losses from Party B. (2) Party B shall pay the liquidated damages within 5 working days upon Party A's discovery of any breach, and if the payment is not made in time, Party A is entitled to directly deduct the same from the Agreement price. (3) Where any improper interest is provided for any employee of Party A or his/her associated person, whether actively or passively, if Party B voluntarily provides effective information for Party A actively, Party A will consider based on actual situations whether to continue cooperation with Party B and/or waive the aforesaid liability for default. (4) The aforesaid circumstances are at absolute sole discretion of Party A. (5) Where any violation of the commitments on part of either party or its employee constitutes a crime, either party may report the crime to a judicial authority, and the persons involved will be prosecuted for criminal offense; the party violating the commitments and its employees, if causing economic loss to other party, shall provide compensations. Article VI [Reporting Channels and Reward] If Party B becomes aware of/suspects any violation of the aforesaid provisions on part of Party A's employees, Party B shall contact the Risk Control Compliance Department (RCCD) of Party A. If the information provided by the information provider about any commercial bribery is verified to be true, Party A will reward the information provider depending on the influence extent of the event, and in case of any event producing significant influence, will give special reward. Party A has a special email address to accept the complaints from Party B: jubao@didiia.com; complaint hotline: 010-62962880. Party A will keep all information providers and all materials provided by them strictly confidential. + + + + + +Contract No.: DDCX S DG KC 201812130044 Article VII [Miscellaneous] This Agreement is an appendix to the Cooperation agreement, made in two copies, and have equal legal force to the Cooperation agreement. The issues that are not agreed upon in this Agreement shall be subject to the terms of the Master Agreement. Party A: Didi Chuxing Technology Co., Ltd. /s/ Didi Chuxing Technology Co., Ltd. [signature authenticated by third party document depository on December 17, 2018] Party B: Hunan Ruixi Financial Leasing Co., Ltd. /s/ Hunan Ruixi Financial Leasing Co., Ltd. [signature authenticated by third party document depository on December 17, 2018] \ No newline at end of file diff --git a/full_contract_txt/SEPARATEACCOUNTIIOFAGL_05_02_2011-EX-99.(J)(4)-UNCONDITIONAL CAPITAL MAINTENANCE AGREEMENT.txt b/full_contract_txt/SEPARATEACCOUNTIIOFAGL_05_02_2011-EX-99.(J)(4)-UNCONDITIONAL CAPITAL MAINTENANCE AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..557960acec1dc62af546ed96d55779e5371e5931 --- /dev/null +++ b/full_contract_txt/SEPARATEACCOUNTIIOFAGL_05_02_2011-EX-99.(J)(4)-UNCONDITIONAL CAPITAL MAINTENANCE AGREEMENT.txt @@ -0,0 +1,113 @@ +EXHIBIT (J)(4) + + UNCONDITIONAL CAPITAL MAINTENANCE AGREEMENT BETWEEN AMERICAN INTERNATIONAL GROUP, INC. AND AMERICAN GENERAL LIFE INSURANCE COMPANY OF DELAWARE + +This Unconditional Capital Maintenance Agreement (this "Agreement"), is made, entered into and effective as of March 30, 2011, by and between American International Group, Inc., a corporation organized under the laws of the State of Delaware ("AIG"), and American General Life Insurance Company of Delaware, a corporation organized under the laws of the Delaware (the "Company"). + + WITNESSETH: + + WHEREAS, the Company is a life insurer subject to certain capital requirements of the insurance laws and regulations of Delaware (the "Domiciliary State"); + + WHEREAS, the Company is an indirect wholly owned subsidiary of AIG; and + + WHEREAS, AIG has an interest in unconditionally maintaining and enhancing the Company's financial condition: + + NOW, THEREFORE, in consideration of the mutual promises herein contained, the parties hereto agree as follows: + + 1. In the event that the Company's Total Adjusted Capital for each of the Company's first and third fiscal quarters (as determined based on the Company's first and third fiscal quarterly filed statutory financial statements, respectively, subject to any adjustments or modifications thereto required by the Domiciliary State's insurance department or the Company's independent auditors) falls below the Specified Minimum Percentage of the Company's projected Company Action Level RBC (in each case as estimated by the Company as of the end of each such first and third fiscal quarters, as the case may be), AIG shall, within the respective time periods set forth under paragraph 4, in accordance with paragraph 5 and in compliance with applicable law, provide to the Company cash, cash equivalents, securities or other instruments that qualify (as admitted assets) for purposes of calculating the Company's Total Adjusted Capital, as a contribution and not as a loan, in an amount such that the Company's Total Adjusted Capital as of the end of each of the + + Company's second and fourth fiscal quarter, as the case may be, will be projected to be at least equal to the Specified Minimum Percentage of the Company's Company Action Level RBC. Notwithstanding the foregoing, AIG may, at any time as it deems necessary in its sole discretion and in compliance with applicable law, make a contribution to the Company in such amount as is required for the Company's Total Adjusted Capital to equal a percentage of its Company Action Level RBC determined to be appropriate by the Company and AIG. + + 2. In the event that the Company's Total Adjusted Capital (a) for each of the Company's first, second and third fiscal quarters (as determined based on the Company's first, second and third fiscal quarterly filed statutory financial statements, respectively, subject to any adjustments or modifications thereto required by the Domiciliary State's insurance department or the Company's independent auditors) is in excess of the Specified Minimum Percentage of the Company's projected Company Action Level RBC (in each case as estimated by the Company as of the end of each such first, second and third fiscal quarters, as the case may be) or (b) as of each fiscal year end (as shown in the Company's fiscal year-end filed statutory financial statements, together with any adjustments or modifications thereto required by the Domiciliary State's insurance department or the Company's independent auditors) is in excess of the Specified Minimum Percentage of the Company's Company Action Level RBC (as shown in such fiscal year-end statutory financial statements), the Company shall, within the respective time periods set forth under paragraph 4, in accordance with paragraph 5 and subject to approval by the Company's board of directors as required by the laws of the Domiciliary State, declare and pay dividends ratably to its equity holders in an aggregate amount equal to the lesser of (i) the amount necessary to reduce the Company's projected or actual Total Adjusted Capital as of each of the end of the Company's fiscal quarter or fiscal year, as the case may be, to a level equal to or not materially greater than the Specified Minimum Percentage of the Company's Company Action Level RBC or (ii) the maximum amount permitted by the Domiciliary State's law to be paid as an ordinary dividend less an amount that the Company and AIG agree is appropriate to protect the Company from exceeding such maximum amount allowed by such Domiciliary State's law as a result of potential audit adjustments or adjustments to the projections on which such dividend amount is based. For the avoidance of doubt, this paragraph shall only require the Company to pay ordinary dividends; under no circumstances shall the Company be required to pay any dividend which would trigger the + + extraordinary dividend provisions of Section 18 (S) 5005 (B) of the + + + + + + Insurance Law of the Domiciliary State or that is otherwise prohibited by the Domiciliary State. Notwithstanding the foregoing, this Agreement does not prohibit the payment of extraordinary dividends to reduce the Company's projected or actual Total Adjusted Capital to a level equal to or not materially greater than the Specified Minimum Percentage of the Company's Company Action Level RBC. + + 3. For the avoidance of doubt, the terms "Total Adjusted Capital", "Company Action Level RBC", and "Surplus to Policyholders" shall have the meanings ascribed thereto under the insurance laws and regulations of the Domiciliary State, or, with respect to "Total Adjusted Capital" and "Company Action Level RBC", if not defined therein, shall have the meanings ascribed thereto in the risk-based capital ("RBC") instructions promulgated by the National Association of Insurance Commissioners ("NAIC"). The term "Specified Minimum Percentage" shall be equal to the percentage set forth on Schedule 1 attached hereto, which shall be agreed to by AIG and the Company at least once every year beginning upon the date of the filing of the Company's 2010 Annual Statement with the Domiciliary State's insurance department and following review against the capital adequacy standards and criteria ("Agency Criteria") of each of Standard & Poor's Corp. ("S&P"), Moody's Investors Service ("Moody's") and A.M. Best Company ("A.M. Best"). Notwithstanding the obligation of the Company and AIG to review the Specified Minimum Percentage on an annual basis, the parties hereto agree to review and revise the Specified Minimum Percentage on a more frequent basis, if the parties agree it is appropriate, to take into account (a) any material changes after the date hereof to any Agency Criteria adopted by any of S&P, Moody's or A.M. Best, on the one hand, or to the law of the Domiciliary State or NAIC RBC rules or instructions, on the other hand, which causes the results under the Agency Criteria to diverge from that under the law of the Domiciliary State or NAIC RBC rules or instructions, (b) the Company completes a material transaction that is treated materially differently by the Agency Criteria, on the one hand, and the NAIC RBC rules or instructions, on the other hand, or (c) any other material development or circumstance affecting the Company which AIG and the Company agree merits a reevaluation of the Specified Minimum Percentage then in effect. + + 4. The Company and AIG agree that any contribution to be made under paragraph 1 will take place within the following two time periods per year, as applicable: (a) during the time beginning on the first business day after the filing of the Company's first fiscal + + 3 + + quarterly statutory financial statements and ending on the last business day prior to the end of the Company's second fiscal quarter; and (b) during the time beginning on the first business day after the filing of the Company's third fiscal quarterly statutory financial statements and ending on the last business day prior to the end of the Company's fourth fiscal quarter. Notwithstanding the foregoing, in compliance with applicable law, any capital contribution provided for under paragraph 1 may be made by AIG after the close of any fiscal quarter or fiscal year of the Company but prior to the filing by the Company of its statutory financial statements for such fiscal quarter or fiscal year, respectively, and contributions of this nature shall be recognized as capital contributions receivable as of the balance sheet date of the yet to be filed quarterly or annual financial statement (as the case may be), pursuant to paragraph 8 of Statement of Statutory Accounting Principles No. 72, to the extent approved by the Domiciliary State. The Company and AIG further agree that any dividends to be made under paragraph 2 will take place as soon as practicable after the filing by the Company of the relevant fiscal quarter-end or fiscal year-end statutory financial statements or such earlier time as may be agreed by the Company and AIG. + + 5. At the time that any contribution is due under paragraph 4, AIG agrees that it will either (a) make such contribution to the Company's direct parent and cause such direct parent to then contribute such funds, securities or instruments so contributed by AIG to the Company, or (b) make such contribution directly to the Company without receiving any capital stock or other ownership interest in exchange therefor, subject in either case to any required regulatory approvals. At any time any dividends are due under paragraph 4, the Company agrees that it will make such dividend to the Company's direct parent and will use its best efforts to cause such direct parent to then dividend or otherwise provide such funds to AIG. All contributions and dividends contemplated under this Agreement shall be approved, declared and made, as applicable, in compliance with applicable law, including, without limitation, approval by the board of directors of each applicable entity (including the Company) and any prior notice requirements specified under applicable rules and regulations of the Domiciliary State. + + 6. Subject to the requirements of applicable law and the approval, to the extent required, by any or all of the Company's senior management, relevant management committees, board of directors, and of any insurance regulator, the Company hereby acknowledges that, in a manner consistent with past practice and + + any other reasonable requirements of AIG, it will comply with all financial and budgetary planning, risk mitigation, derisking or pricing, corporate governance, investment, informational and procedural + + + + + + requirements set forth by AIG. + + 7. AIG hereby waives any failure or delay on the part of the Company in asserting or enforcing any of its rights or in making any claims or demands hereunder. + + 8. Unless earlier terminated in accordance with this paragraph 8, this Agreement shall continue indefinitely. AIG shall have the absolute right to terminate this Agreement upon thirty (30) days' prior written notice to the Company, which notice shall state the effective date of termination (the "Termination Date"); PROVIDED, HOWEVER, that AIG agrees not to terminate this Agreement unless (a) AIG significantly modifies the corporate structure or ownership of the Company, or (b) AIG sells the Company to an acquirer (i) having a rating from at least one of S&P, Moody's, A.M. Best or a substitute agency, which is a nationally recognized statistical rating organization, that is at least equal to the lower of (x) AIG's then-current rating from such agency or (y) the Company's then-current rating as supported by this Agreement from such agency; or (ii) such that, immediately on the effective date of the sale by AIG of the Company, the Company's capitalization is consistent with the minimum capital adequacy standards and criteria of at least one of S&P, Moody's, A.M. Best or a substitute agency, which is a nationally recognized statistical rating organization, for a rating that is equal to or better than the Company's then-current rating on the date immediately preceding such sale. To the extent not terminated previously by AIG pursuant to the foregoing, this Agreement will terminate automatically one year after the closing of any sale of the Company by AIG, and all provisions hereof will be of no further force and effect. For the avoidance of doubt, the termination of this Agreement pursuant to this paragraph 8 shall not relieve either party of any obligation it may owe to the other party hereunder that existed prior to, and remains outstanding as of, the Termination Date. + + 9. Any policyholder holding a policy issued by the Company prior to the termination of this Agreement shall have the right to demand that the Company enforce the Company's rights under paragraphs 1, 4 and 5 of this Agreement, and, if the Company fails or refuses to take timely action to enforce such rights or the Company defaults in any claim or other payment owed to any such policyholder when due, such policyholder may proceed directly against AIG to enforce the Company's rights under paragraphs 1, 4 and 5 of this + + 5 + + Agreement; PROVIDED, HOWEVER, that no policyholder of the Company may take any action authorized under this paragraph 9 unless and until (a) such policyholder has given AIG written notice of its intent to enforce the terms of this Agreement as provided in this paragraph 9, which notice shall specify in reasonable detail the nature of and basis for the policyholder's complaint and (b) AIG has failed to comply with this Agreement within sixty (60) days after such notice is given; and, PROVIDED, FURTHER, that upon termination of this Agreement in accordance with paragraph 8 hereof, the rights of any policyholder as provided for under this paragraph 9 shall terminate effective as of the Termination Date, except with respect to the obligation of AIG (if any) to make capital contributions to the Company pursuant to paragraphs 1, 4 and 5 of this Agreement solely to the extent such obligation arose prior to, and remained unsatisfied as of, the Termination Date (it being understood that upon AIG's satisfaction of all such obligations after the Termination Date, no such policyholder shall have any rights against the Company or AIG, as the case may be, under this paragraph 9). + + 10.This Agreement is not, and nothing herein contained and nothing done pursuant hereto by AIG shall constitute or be construed or deemed to constitute, an evidence of indebtedness or an obligation or liability of AIG as guarantor, endorser, surety or otherwise in respect of any obligation, indebtedness or liability, of any kind whatsoever, of the Company. This Agreement does not provide, and is not intended to be construed or deemed to provide, any policyholder of the Company with recourse to or against any of the assets of AIG. + + 11.Any notice, instruction, request, consent, demand or other communication required or contemplated by this Agreement shall be in writing, shall be given or made or communicated by United States first class mail, addressed as follows: + + If to AIG: + + American International Group, Inc. 180 Maiden Lane New York, New York 10038 Attention: Secretary + + If to the Company: + + American General Life Insurance Company of Delaware c/o SunAmerica Financial Group, Inc. 2727-A Allen Parkway + + Houston, Texas 77019 Attention: Chief Financial Officer + + + + + + with a copy (which shall not constitute notice) to: + + American General Life Insurance Company of Delaware c/o SunAmerica Financial Group, Inc. 1999 Avenue of the Stars Los Angeles, CA 90067 Attention: General Counsel + + 12.On April 24, 2011, this Agreement shall supersede and replace that certain letter agreement, dated December 13, 1991, by and between AIG and the Company regarding capital maintenance without the need for any action. + + 13.The covenants, representations, warranties and agreements herein set forth shall be mutually binding upon and inure to the mutual benefit of AIG and its successors and the Company and its successors. + + 14.This Agreement shall be governed by and construed in accordance with the laws of New York, without giving effect to the principles of conflict of laws. + + 15.If any provision of this Agreement shall be declared null, void or unenforceable in whole or in part by any court, arbitrator or governmental agency, said provision shall survive to the extent it is not so declared and all the other provisions of this Agreement shall remain in full force and effect unless, in each case, such declaration shall serve to deprive any of the parties hereto of the fundamental benefits of or rights under this Agreement. + + 16.This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings, negotiations and discussion, whether oral or written, of the parties. This Agreement may be amended at any time by written agreement or instrument signed by the parties hereto. + + 17.This Agreement may be signed by the parties in one or more counterparts which together shall constitute one and the same agreement among the parties. + + [signature page follows] + + 7 + + IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written. + +AMERICAN INTERNATIONAL GROUP, INC. + +By: /S/ BRIAN T. SCHREIBER -------------------------- Name: Brian T. Schreiber Title: Executive Vice President + +By: /S/ ROBERT A. GENDER -------------------------- Name: Robert A. Gender Title: Senior Vice President and Treasurer + +AMERICAN GENERAL LIFE INSURANCE COMPANY OF DELAWARE + +By: /S/ DON W. CUMMINGS -------------------------- Name: Don W. Cummings Title: Senior Vice President and Chief Financial Officer + + SCHEDULE 1 + +The Specified Minimum Percentage shall initially equal 350% of the Company's Company Action Level RBC. \ No newline at end of file diff --git a/full_contract_txt/SFGFINANCIALCORP_05_12_2009-EX-10.1-SOFTWARE LICENSE AND MAINTENANCE AGREEMENT.txt b/full_contract_txt/SFGFINANCIALCORP_05_12_2009-EX-10.1-SOFTWARE LICENSE AND MAINTENANCE AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..84ada407185292aa40fe5cc2445232871c2aeb2f --- /dev/null +++ b/full_contract_txt/SFGFINANCIALCORP_05_12_2009-EX-10.1-SOFTWARE LICENSE AND MAINTENANCE AGREEMENT.txt @@ -0,0 +1,449 @@ +SOFTWARE LICENSE AND MAINTENANCE AGREEMENT THIS SOFTWARE LICENSE AND MAINTENANCE AGREEMENT ("Agreement") is made and entered into as of this 27th day of April 2009 by and between SFG Financial Corp, a/k/a E-Path FX, a Delaware Corporation whose principal address is 575 Madison Avenue, 8th Floor, New York, NY 10022 ("Licensor"), and 551 FX IB Associates, LLC a Delaware Limited Liability Company, whose principal address is located at 575 Madison Avenue, 8th Floor, New York, NY 10022 ("Licensee"). WHEREAS, Licensor is the owner of a certain proprietary trading software known as the "E-Path FX Trading Platform", specifically, and variations thereof, along with documentation and related information, including the intellectual property rights pertaining thereto: and WHEREAS, Licensor is the owner of the computer equipment (the "Hardware") required for the operation of the Platform that is located at a single centralized location, specifically at Internap Inc,76 Ninth Avenue, New York, New York10011; and WHEREAS, Licensee desires to obtain from licensor a Non Exclusive, Non Transferrable license rights and licenses granted herein to the Platform, for purposes of implementing and marketing an over-the-counter, ("OTC") Foreign Currency Exchange Service utilizing the Platform; and WHEREAS, Licensor shall convey a Non Exclusive license to the Licensee solely for Licensee's use in the field of foreign exchange transactions only; and WHEREAS, Licensor is willing to grant such rights, licenses and options under the terms and conditions of this agreement; NOW THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows: ARTICLE I CERTAIN DEFINITIONS For the purposes of this Agreement: + + + + + +1.1 "AFFILIATE" means, in the case of any corporation, partnership, limited liability company or other business or investment entity, a different business entity or other individual that directly or indirectly, through one or more intermediaries controls, or is controlled by, or is under common control with the business entity. + +1.2 "CONFIDENTIAL INFORMATION" shall mean, all existing and future information, including but not limited to Software documentation, Software training and instruction manuals, data, reports, programs, methods, tapes, recorded notes, computer-generated data, tests, studies and other written documents, computer programs, proprietary trade secrets and know-how, Software, Intellectual Property Rights and any and all other information embodied in a tangible form relating to and disclosed to the Licensee in connection with this Agreement, including but not limited to those related to the Licensed Technology. The foregoing items referenced in the preceding sentence shall be deemed to be "confidential" within the meaning hereof when, and so long as it is not in possession of the Licensee prior to the disclosure thereof (except in the event same wrongfully obtained by, or wrongly disclosed to the Licensee); or is not then and does not become part of the public knowledge and literature through the fault of the Licensee. + + + + + + + + + + + + + + + + + + + +1.3 "DERIVATIVE WORK" means any additions, modifications, improvements or enhancements based upon or incorporating the Licensed Technology, such as modifications, enhancements or any other form in which the Licensed Software may be recast, transformed or adapted. + +1.4 "DOCUMENTATION" means documentation developed by Licensor from time to time in printed or computer file format relating to the installation or use of the Licensed Software. + +1.5 "FIELD OF USE" means, and is limited to, the utilization of the Licensed Technology by the Licensee for the exclusive purpose of fulfilling Spot FX transactions by transmitting market data and orders. The "Field of Use" shall not include any functions or applications not expressly described in the preceding sentence, but shall include functions or applications developed by Licensor to enhance the performance within the "Field of Use". + +1.6 "INTELLECTUAL PROPERTY RIGHTS" means, collectively, all of the following intellectual and similar property rights of Licensor, whether or not filed, perfected, registered, issued or recorded and whether now or hereafter existing including, but not limited to, all: (i) patents, patent applications, and patent rights, including any and all continuations, divisions, reissues, reexaminations, or extensions thereof; (ii) rights associated with works of authorship, including but not limited to copyrights, copyright applications and copyright registrations. Moral Rights (as defined below) trademarks, trademark applications, service marks, trade dress and mask works; (iii) rights relating to the protection of trade secrets, know-how and other confidential information including, but not limited to, rights in industrial property and all associated information and confidential or proprietary information; (iv) industrial design rights; (v) utility models, inventions, and/or discoveries; (vi) know-how or other data or information, software, databases and all embodiments or fixations thereof; (vii) Licenses, documentations, registrations and franchises, and all additions, improvements and accessions to , and books and records describing or used in connection with, any of the items set forth in the preceding clause and (viii) any rights analogous to those set forth in the preceding clauses and any other proprietary rights relating to intangible property. + +1.7 "LICENSED KNOW-HOW" means the proprietary know-how and trade secrets related to the Licensed Software and all Intellectual Property Rights with respect to the Licensed Software. + +1.8 "LICENSED SOFTWARE" means the Platform Software. + + + + + + + + + + + + + + ARTICLE II LICENSE GRANT AND RESTRICTIONS I. Licensee acknowledges and agrees that: + + + + + +1.9 "LICENSED TECHNOLOGY" means the Licensed Know-How and the Licensed Software, collectively. + +1.10 "MORAL RIGHTS" means and right of paternity or integrity, any right to claim authorship of, to object to or prevent and distortion, mutilation or modification of, or other derogatory action in relation to, the subject work, whether or not such would be prejudicial to the author's honor or reputation, to withdraw from circulation or control the publication or distribution of the subject work, or similar right, existing under judicial or statutory law of any county in the world, or under and treaty, regardless of whether or not such right is denominated or generally referred to as a "moral" right. + +1.11 "PLATFORM SOFTWARE" means all Software owned, licensed and/or controlled by Licensor necessary for the Licensee to operate "E- Path FX Trading Platform" ("Platform"), which provides real-time consolidation of multiple Electronic Communication Networks ("ECN") markets, exchanges, and other pools of liquidity for Spot FX (collectively the "Pools of Liquidity") via proprietary processes and front- end user interface for viewing market data and trading Spot FX. + +1.12 "SOFTWARE" means computer programs and systems, whether embodied in software , firmware or otherwise, including, software compilations, software, software implementations of algorithms, software tool sets, compilers, and software models and methodologies (regardless of the stage of development or completion) including any and all: (a) media on which any of the foregoing is recorded; (b) forms in which any of the foregoing is embodied (whether in Source Code, Object Code, executable code or human readable form); (c) translation, ported versions and modifications or any of the foregoing. Source Code means fully documented human-readable source code form of the Software, including programmer's notes and materials and documentation, sufficient to allow a reasonably skilled programmer to understand the design, logic, structure, functionality, operation and features and to use, operate, maintain, modify, support and diagnose errors. Object Code means Software in machine-readable form that is substantially or entirely in binary form or otherwise directly executable by a computer after processing or linking. + +i. The Licensed Technology is comprised of Licensor's trade secrets and other proprietary, confidential information; and + +ii. Licensee will not sell, lease, lend, transfer, assign, hypothecate, or otherwise distribute the licensed programs to any third party for use in the field of foreign exchange transactions unless the Licensee receives specific approval of the Licensor. + + + + + + + + + + + + + + The licensee will not use the Licensed Technology or permit the use of the Licensed Technology for any illegal purpose, and will use the Licensed Technology only in accordance with the terms of this License Agreement. + + Licensor, specifically and without limiting any of the foregoing assumes neither, responsibility or liability for the availability, timeliness or accuracy of the system or any equipment, regardless of whether or not the equipment was recommended, selected, is contained for, or is located on the Licensor's premises. The Licensee has independently evaluated the system, and has concluded that use of the system confers a significant benefit to the Licensee. Accordingly the Licensee hereby assumes all liabilities and risks associated with the use of the system and equipment, except for direct damages arising from gross negligence or willful misconduct of the Licensor. + +iii. Licensor hereby, subject to the terms and conditions of this Agreement and provided that Licensee makes payments to Licensor as required under this Agreement, grants to Licensee a non-exclusive license to utilize Licensed Technology solely in the Field of Use and subject to the additional restrictions set forth below and otherwise in this License Agreement. + +iv. It is hereby acknowledged by Licensor, that Licensee desires to make use of the Licensed Technology to access consolidated market data and to enter orders for trading Spot FX. + +v. The Licensee's rights to access and use the Licensed Technology is limited to Licensor's operating hours, on days that the foreign exchange markets are open for trading ("FX") ("Market Day"). At the end of the Licensor's operating hours or each market day the system will automatically transmit cancellation messages for each open ticket that is processed on the system or on any of the Pools of Liquidity at that time. There is no guarantee that these cancellations of the open tickets, nor that such tickets will not result in executions outside of the Licensor's operating hours. The Licensee will be responsible for immediately reporting to the Licensor any apparent failure of either transmissions or other system failure or delays. + +vi. The Licensee will use the Licensed Technology only for (i) receiving market data, and (ii) entering trading tickets in the ordinary course of the Licensee's business activities. + +vii. The Licensee acknowledges and understands neither, the Licensor, nor any of its respective affiliates, employees, officers or agents shall assume any responsibility or liability for the system's operations, involving the operations of any equipment, (including but not limited to computer equipment or peripherals, server equipment, communication equipment and data lines, all such equipment, collectively referred to herein as the "Equipment"). + + + + + + + + + + + + The foregoing shall apply regardless of whether a claim arises in contract, tort, negligence, strict liability or otherwise. II. Additional Restrictions. The Licensee expressly agrees and acknowledges that, notwithstanding anything herein to the contrary, Licensee is not licensed to, and Licensee expressly agrees that it shall not(and shall not permit any third party to); + + + + + + + +viii. The Licensee acknowledges and understands that accessing the Licensed Technology triggers and constitutes a renewed assumption of such liabilities and risk. + +i. The Licensee agrees that neither the Licensor, nor any of its respective affiliates, employees, officers, or agents, shall be liable for any loss, damage, cost or expense, (direct or indirect) except for direct damages arising from the gross negligence of willful misconduct of the Licensor. + +ii. Licensor shall assume no liability, both contingent and otherwise, which may arise out of or be in any way related to the following; (a) furnishing, performance, maintenance, use of, or inability to use all or any part of the system, (b) any fault in the delivery or operation of the system, (c) suspension or termination of the Licensee's ability to use all or part of the system, or any inaccuracies or omissions in any information or documentation provided, (d) any failure or delay suffered or allegedly suffered by Licensee in initiating and terminating trades, (e) the termination of all or part of this Licensee Agreement by the Licensor, (f) the termination or modification of any and all parts of the License. + +(a) use the Licensed Technology (all or any portion thereof) other than within the scope of the license granted by Licensor under this Agreement; + +(b) disclose any Licensed Technology to, or permit the use or access of any Licensed Technology by, any third party for any reason without the prior written consent of Licensor; + +(c) sublicense, assign, lease, transfer or distribute any Licensed Technology, or operate and Licensed Technology for timesharing, rental, outsourcing, or service bureau operations, or to train persons (other than employees of the Licensee on the use of any Licensed Technology solely in the Field of Use); + + + + + + + + + + + + + + In addition, Licensor acknowledges and agrees that, except to the extent necessary for Licensee to exercise its rights under the license granted in this Agreement, Licensee is not being granted, and will not hold, any other intellectual property rights of Licensor whatsoever. Licensee's rights in the Licensed Technology are hereby limited to the license rights expressly granted to Licensee under this Agreement and all rights not expressly granted to Licensee herein are expressly reserved and retained by Licensor. Licensee acknowledges that the grant of the license set forth in this Section is a non-exclusive license and that the Licensor shall have the right to use and to license to other parties the Licensed Technology for any purpose and in any manner as Licensor may determine in its sole discretion. Licensee acknowledges and agrees that the restrictions set forth in this Section, constitute a material inducement and consideration for Licensor's willingness to grant the license set forth herein. Any failure of Licensee to adhere to these restrictions will constitute a material failure of consideration and material breach of this Agreement that will entitle Licensor to terminate this Agreement and all Licensee's rights and licenses hereunder upon written notice to Licensee in accordance with the provisions of this Agreement. + +(d) create or develop, and/or allow any third party to create or develop, any Derivative Work of any Licensed Technology; + +(e) disclose any Licensed Technology to, or permit the use or access of any Licensed Technology by any individuals other than the employees of the Licensee for use in the Field of Use. + +(f) directly or indirectly, reverse engineer, reverse assemble, disassemble or decompile all and/or part of the Licensed Technology, or otherwise attempt to discover any source code, algorithms, trade secrets or other proprietary rights embedded in or relating to the Licensed Technology by any means whatsoever (except and solely to the extent that applicable law prohibits reverse engineering restrictions), nor shall it knowingly permit any other individual or corporation, association, partnership, limited liability Licensee, joint venture, joint stock or other Licensee, business trust, trust, organization, governmental authority or other entity of any kind to do so. + +(g) Modify, alter, improve and/or change in any manner all and/or any portion of the Licensed Technology in any manner without the prior written consent of Licensor. + + + + + + ARTICLE III OWNERSHIP Licensee acknowledges that Licensor owns all right, title, and interest in and to the Licensed Technology and all Intellectual Property Rights therein. Licensee will not delete or in any manner alter the copyright, or other proprietary rights, notices of Licensor appearing on or in the Licensed Technology as delivered to Licensee. Licensee will not copy or reproduce the Licensed Technology (including Derivative Works of Licensed Technology), in whole or in part without the prior written consent of Licensor. To the extent Licensee is provided reproduction rights pursuant to such written consent, Licensee must reproduce on each copy of any Software related to the Licensed Technology, all copyrights, patent, or trademark notice, and any other proprietary legends that were provided in the originals. In addition, Licensee will use its reasonable efforts to protect Intellectual Property Rights in the Licensed Technology and will report promptly to Licensor any infringement of such rights of which the Licensee becomes aware. Licensor reserves the right at its discretion to assert claims against third parties for the infringement or misappropriation of Licensor's Intellectual; Property Rights in the Licensed Technology and to retain all compensation, damages and other amount payable to Licensor with regard to such infringement or misappropriation therein. ARTICLE IV TERM I Subject to termination pursuant to this Agreement, the Non Exclusive license granted by Licensor to Licensee shall be for an initial period of 36 months, commencing from the acceptance date, (the "Initial Period"). The Agreement may be renewed for an additional period of seven (7) years at the option of the Licensor. Upon any breach by Licensee of any representation, warranty, covenant and/or obligation hereunder, the Licensor may immediately terminate this Agreement and prohibit the Licensee's use of any and/or all of the Licensed Technology. In the event of such immediate termination Licensor shall retain all of it rights under this Agreement and applicable law including but not limited to the right to receive payments for all trades performed using the Licensed Technology. II The Initial Period shall be extended by mutual written of the parties within 45 days of the close of the Initial Period. III Any additional extension of this License Agreement will be by mutual agreement in writing. ARTICLE V LICENSEE FEE, TAXES, AND TERM I As consideration for the Licensee to use the licensed programs and software system as set forth in this agreement, Licensee shall pay to Licensor the Non Exclusive license fee as set forth below. + + + + + + (a) Form of Payment: Licensee shall remit to Licensor, contemporaneous with the execution of this Agreement, a n Initial Payment of $35,000.00 which has previously been advanced by Licensee to the Licensor. All payments provided for in this Agreement are exclusive of, (and Licensee shall pay) all taxes, customs, duties, insurance, shipping, and other charges. Payments made to Licensor shall be in United States Dollars. (b) Taxes: All taxes in connection with this Agreement including foreign or domestic sales, use, personal property, excise, or other similar taxes, duties, and charges that may become due as a result of sales of the Platform, however, designated, which charges shall be paid directly by Licensee. + + + + USER FEES - Non-Exclusive User Fee and Pay Periods + + Charges and Payment Terms + + + +(c) Option + +The Licensor shall grant to the Licensee a six month option (the "Option") to purchase up to 3,333,333 shares of its common stock. If the Option is exercised in part or in whole on or before June 30, 2009, the exercise price of the Option shall be $0.15. However, if the Option is exercised after July 1, 2009, the exercise price of the Option shall be $0.20. The Licensor acknowledges that to date the Licensee has advanced the aggregate sum of $63,309, of which $28,309 shall be applied against the partial exercise of the Option. Additional sums advanced to SFG, prior to the execution of this Agreement, and subsequent to the execution of this Agreement shall be detailed in Schedule "A" and annexed hereto and will be applied consistent with the terms of the Option granted pursuant to this section. + +II. As compensation for the Licensee to use the Licensed Technology during the Initial Period, Licensee shall pay to Licensor, the following user fees: + +Monthly Notional Volume bands (US$bn) traded on Platform by Licensee + +Payments to Licensor Fee rate per US$1million traded (for each one-way part of the trade) + +0-10 US$7.50 + +10-20 US$7.00 + +20-30 US$6.00 + +30-50 US$5.50 + +50+ US$5.00 + + + + + + + + + + + + + + + + + + + + + + + + The cost of the audit will be borne by Licensor unless a discrepancy of more than five-percent (5%) is discovered, in which case the cost of the audit shall be borne by Licensee. + +i. For the purpose of this Agreement: + +(i) "Monthly Notional Volume" means the US$ (US Dollar) equivalent of the primary currency traded Client turnover, provided that US$ (US Dollar) conversion should be made based upon the monthly revaluation rate (last business day) and volume should be rounded to the nearest million; and + +(ii) For the avoidance of doubt, if any of the Monthly Notional Volume is reached in one relevant month, the fee rate per trade applicable to the highest Monthly Notional Volume band reached in that month shall apply to all trades (each way) in that month; not just to the trades within a particular band. For example, if in any given month the Monthly Notional volume traded is (US$10.1 billion), the fee rate per (US$1 million trade will be US$7 for the entire amount of US$10.1 billion. + +III. Time of Payment + +(a) Each payment for a particular calendar month shall be due no later than the (20th) day of the subsequent calendar month. + +(b) The Licensee shall calculate the license fee payable to the Licensor for each month based on the Monthly Notional Volume bands for that pay period and shall pay the Licensor accordingly. In no event shall the amount payable by the Licensor be less than the amount recorded by the Licensee as being traded with the Licensed Technology multiplied by the applicable Fees set forth above. + +IV. Record Keeping and Reports + +(a) As a condition of Licensee receiving the grant of a license herein, Licensee agrees to maintain reasonable records relating to all trades conducted through the Licensed Technology and all other uses of the Licensed Technology by the Licensee under this Agreement. Licensee shall prepare and submit summary quarterly reports to Licensor no later than 20 days following the last business day of each calendar quarter, which reports must specify a complete record of usage of the Licensed Technology by the Licensee and shall accompany the payments made to Licensor. + +(b) Licensee agrees to allow an independent Certified Public Accountant or other Audit Professional, (selected by mutual agreement) to audit and analyze appropriate accounting records to ensure compliance with all terms of this Agreement. Any such audit shall be permitted by Licensee within 30 days of Licensee's receipt of a written request of Licensor. + + + + + + + + + + + + + + + + + + + + Supplemental Payments will be paid by the Licensee to the Licensor within (10) days of receipt of said payments by the Licensee from third parties + + (a) Simultaneously with the execution hereof, the Licensor shall issue to the Licensee 350,000 shares of its common stock as a bonus. + +(b) Rebate Shares. During the period commencing on the Acceptance Date through the thirty six (36th) month anniversary of this Agreement, the Licensor shall remit to Licensee a series of rebates based upon the amount of Notional Volumes traded on the EPath FX Trading Platform by Licensee. The computation of the rebates received by Licensee shall be expressed as a fixed percentage (15%) of Billable Platform Fees paid by Licensee to Licensor. The rebates shall be payable in shares of Licensor's Common Stock; priced at $.25 cents per share. The amount of rebates earned by Licensee shall be calculated for each tranche of 30 Billion of Notional Volume traded in the EPath FX Platform by Licensee. The amount of shares earned by Licensee shall terminate at the earlier of, the expiration of the term of this Agreement or the receipt of Six (6,000,000) Million shares of Licensor's common stock by Licensee. By way of illustration, if the Licensee trades 30 Billion of Notional Volume on the Platform, with a Billable Platform Fee of $279,000. The rebate to Licensee will be calculated as follows: Rebate = 15% of $279,000 = $41,850; Shares of Licensor representing $41,850/$.25 = 167,400 shares of Licensor. + +V. Enhancements: Supplemental Payments + +I. During the term of the non-exclusive license agreement, Licensor shall receive from Licensee one third (33%) of the gross amounts earned by the Licensee from third parties applicable to the following areas of the Licensed Technology usage (if any), ("Supplemental Payments"): + +(a) Clearing fees + +(b) Banking Rebates ("give-up fees") + +(c) Processing of half pips + +(d) Swap rates (swap interest rate differential) + +(e) Currency spreads + +II. Shares + + + + + + ARTICLE VI SUB LICENSE AGREEMENT Licensee agrees it shall not exchange, lease, sublease, distribute, assign, sell or otherwise transfer in any manner any right and/or interest incident to the License Technology to any third party under any circumstances, without the prior written consent of the Licensor. ARTICLE VII TECHNICAL SUPPORT SERVICES (a) The Licensor shall provide Technical Support Services relating to the maintenance and support of the Software and the Licensee shall pay the Licensor $2,500 per month for such Technical Support Services. (b) The Licensee may request that the Licensor performs further development and customization work for creating a unique client front end and other enhancements to the Platform Software after the effective date. In the event the Licensee desires such services, the Licensee must agree in writing to a price and the terms for such services based upon the scope of the work requested by Licensee. Until such an agreement is entered into in writing, the Licensor shall have no obligation to perform such work. (c) The parties agree that (except for the customization work) (above) all future enhancements to the Software, including any new Revisions, Versions, updates to, or any other non-customized development work regarding the Software (which the Licensee may accept or decline) shall be provided to the Licensee during the term of this Agreement at no additional cost. (d) Except for the Charges set forth above, there shall be no additional fees payable by the Licensee to the Licensor for technical support services pursuant to this Agreement, unless the parties agree to the contrary in writing. (e) Licensee and Licensor Responsibilities + + + + + +i. The Licensor shall provide customer support to Licensee on terms and conditions set forth herein below. + +ii. The Licensee agrees to notify the Licensor in writing (including by email) or telephone promptly following the discovery of any Error. Further, upon discovery of such an Error, Licensee agrees, if requested by the Licensor, to submit to the Licensor a list of output and any other data that the Licensor may reasonably require to reproduce the Error (to the extent reasonably available to the Licensee) and the operating conditions under which the Error occurred or was discovered. + + + + + + + + + + (f) Error Corrections. During the term of this Agreement, the Licensor shall use commercially reasonable efforts to provide Error Corrections for Errors in the Software reported by Licensee to the Licensor. (g) Revisions. During the term of this Agreement, the Licensor shall make available to Licensee any Revisions of the Software or Documentation at no extra charge, subject to limitations explicitly set forth in this Agreement. The Licensor will make such available to the Licensee when the Licensor makes such Revisions generally available to its other licensees. (h) Limitations. The Licensor shall have no obligation under this Agreement to make any modifications, Revisions, or Error Corrections, other than those required to conform to the requirements of the Specifications and this Agreement. Notwithstanding the foregoing, the Licensor shall have no obligation under this Agreement to correct Errors which result from the breach by Licensee of this Agreement, or which cannot be remedied due to any modifications of the Software made by Licensee or any third party without authorization from the Licensor. If the Licensor agrees to remedy any errors or problems not covered by the terms of this Agreement, Licensee shall pay the Licensor for all such work performed at the Licensor's then-current standard rates. Licensee acknowledges that the Licensor is under no obligation to perform services with respect to any hardware or any software which is not the Software. ARTICLE VIII + +CONTACT INFORMATION + + + + + +Licensor Information: + + + + + + + +iii. If required by the Licensee, the Licensor product managers and engineers will host free Web-based training seminars covering a variety of topics to facilitate the use of the Software. These seminars will be broadcast on a periodic basis, provided, however, that the Licensor is under no obligation to provide them on any specific schedule. + +iv. Any software, modules, or other methods of communication developed by the Licensor in performing duties under this Agreement shall be kept secure from access by the unauthorized third parties. Any failure of such security shall be deemed, notwithstanding anything to the contrary, a failure of the Primary Function of the Software. + +Account Manager: Michael C. Caska Telephone: 917-226-9630 Fax: 646-607-9711 E-mail: mcaska@caskaco.com + +Billing: Michael C. Caska Telephone: 917-226-9630 Fax: 646-607-9711 E-mail: mcaska@caskaco.com + +Tech Support: Michael C. Caska Telephone: 917-226-9630 Fax: 646-607-9711 E-mail: mcaska@caskaco.com + +Written Notices: SFG Financial Corporation + +575 Madison Avenue, 8th Floor, + +New York, NY 10022 Att: Michael C. Caska + + + + + + + +Licensee Information: + + + + + + + + + + ARTICLE VIX + +WARRANTY DISCLAIMER + + + +THE LICENSED TECHNOLOGY IS PROVIDED ON AN "AS IS" BASIS WITHOUT WARRANTY OF ANY KIND AND LICENSOR HEREBY + +DISCLAIMS ALL WARRANTIES CONCERNING THE LICENSED TECHNOLOGY, WHETHER EXPRESS OR IMPLIED, INCLUDING, WITHOUT + +LIMITATION, ANY IMPLIED WARRANTIES OF MERCHANTABILITY, NON-INFRINGEMENT, FITNESS FOR PARTICULAR PURPOSE , + +COMPLETENESS, USE, ACCURACY AND/OR TITLE. LICENSOR DOES NOT WARRANT THAT THE LICENSED TECHNOLOGY IS ERROR- + +FREE OR THAT IT WILL MEET LICENSEE'S REQUIREMENTS OR THAT THE OPERATION OF THE LICENSED TECHNOLOGY WILL BE + +UNINTERRUPTED,TIMELY SECURE OR ERROR-FREE, OR THAT ERRORS IN THE LICENSED TECHNOLOGY OR NONCONFORMITY TO ITS + +DOCUMENTATION CAN OR WILL BE CORRECTED. + + + +Account Manager: Name: Fred Miller Telephone 212-605-0200 Fax: 212-605-0222 E-mail:_____________________________ + +Billing: Name: Fred Miller Telephone 212-605-0200 Fax: 212-605-0222 E-mail:_____________________________ + +Written Notices: 551 FX IB Associates LLC + +575 Madison Avenue, 8th Floor, + +New York, NY 10022 Att: Fred Miller + + + + + + ARTICLE X + +CONFIDENTIAL INFORMATION/NON SOLICITATION + + (a) NONDISCLOSURE. The Licensee shall not disclose, publish, or disseminate the Confidential Information to anyone other than the Licensee's employees with a need to know and who have agreed in writing to be bound by the confidentiality provisions of this Section, or as may be required by legal process. The Licensee agrees to use the same degree of care with respect to the Confidential Information that it takes to hold in confidence its own most valuable proprietary information, but not less than reasonable care, to prevent any unauthorized use, disclosure, publication, or dissemination of the Confidential Information. The Licensee agrees to accept and use the Confidential Information only for the purpose of carrying out its authorized activities under this Agreement. In the event the Licensee is required to disclose the Confidential Information by an order of a court or governmental agency, then the Licensee shall first give written notice to Licensor to allow Licensor to make a reasonable effort to obtain a protective order or other confidential treatment for the Confidential Information. (b) NON SOLICITATION. During the Term of this Agreement and during the three year period after the expiration or termination of this Agreement, the Licensee will not solicit any person employed by Licensor and/or its Affiliates to leave his or her employment with Licensor. For purpose of this Article the term "Solicit" means any affirmative recruitment specifically aimed at one or more individuals identified by name, title or affiliation, but shall not mean generally advertising job openings or any activities that constitute follow-up to individuals who respond to job opening advertisements or who voluntarily initiate employment inquiries. ARTICLE XI INJUNCTIVE RELIEF Licensee acknowledges that (i) any breach of its obligations under this Agreement with respect to the Licensed Technology, the Licensed Know-How Rights, , the disclosure of Confidential Information and/or the Non Solicitation of Licensor Employees; (ii) any failure by Licensee to use Licensed Technology strictly in accordance with the license rights granted to Licensee under this Agreement and/or (iii) any breach of its obligations under the additional restrictions contained in this Agreement, will cause Licensor irreparable injury for which there are inadequate remedies at law, and therefore, Licensor will be entitled to equitable relief without the posting of any bond or indemnity (including but not limited to injunctive relief and the remedy of specific performance) in addition to all other rights and remedies provided by this Agreement or available at law. + + + + + + ARTICLE XII INDEMNITY Licensee will be solely responsible for any commercial or legal liability that may arise as a result of Licensee's exercise of any of the license rights granted by Licensor to Licensee under this Agreement, and Licensee shall defend, indemnify, and hold Licensor harmless from and against any and all suits, claims, proceedings, judgments, awards, damages, loss, liability, cost and expenses (including without limitation reasonable attorney's fees and other related costs) that are incurred or suffered by Licensor or any of its affiliates, directors, officers, employees, or agents to the extent they arise or result, directly or indirectly, from (i) Licensee's exercise of any license or other rights granted to Licensee under this Agreement; (ii) the conduct of Licensee's business directly or through any affiliate of Licensee and/or (iii) the breach by the License of any representation, warranty, obligation, restriction, term and/or covenant under this Agreement. + + ARTICLE XIII EXCLUSION OF DAMAGES; LIMITATION OF LIABILITY (a) IN NO EVENT SHALL LICENSOR BE LIABLE TO LICENSEE OR TO ANY THIRD PARTY FOR ANY SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING WITHOUT LIMITATION LOSS OF USE, DATA, BUSINESS OR PROFITS) ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR THE USE, OPERATION OR PERFORMANCE OF ANY OF THE LICENSED TECHNOLOGY, WHETHER SUCH LIABILITY ARISES FROM ANY CLAIM BASED UPON CONTRACT, WARRANTY, TORT (INCLUDING NEGLIGENCE), PRODUCT LIABILITY BREACH OR FAILURE OF EXPRESS OR IMPLIED WARRANTY OR CONDITION, MISREPRESENTATION OR OTHERWISE, AND WHETHER OR NOT LICENSORHAS BEEN ADVISED OF THE POSSIBILITY OF SUCH LOSS OR DAMAGE (INCLUDING, BUT NOT LIMITED TO, CLAIMS FOR LOSS OF DATA, GOODWILL, USE OF MONEY OR USE OF THE LICENSED TECHNOLOGY, INTERRUPTION IN USE OR AVAILABILITY OF DATA, STOPPAGE OF OTHER WORK OR IMPAIRMENT OR OTHER ASSETS), ARISING OUT OF BREACH OR FAILURE OF EXPRESS OR IMPLIED WARRANTY OR CONDITION, BREACH OF CONTRACT, MISREPRESENTATION, NEGLIGENCE, STRICT LIABILITY IN TORT, OR OTHERWISE UNDER NO CIRCUMSTANCE SHALL LICENSOR BE LIABLE FOR ANY ACTIONS, CLAIMS OR THE LIKE BY LICENSEE OR ANY THIRD PARTY THAT THE USE OF THE LICENSED TECHNOLOGY HAS RESULTED, RESULTS OR MAY RESULT IN ANY INFRINGEMENT, DEPRIVATION OR VIOLATION OF THE INTELLECTUAL PROPERTY, CONSTITUTIONAL, STATUTORY, CONTRACTUAL, COMMON LAW OR OTHER RIGHTS OF ANY PERSON (b) IN NO EVENT SHALL LICENSOR'S AGGREGATE CUMULATIVE TOTAL LIABILITY UNDER THIS AGREEMENT EXCEED ONE HALF OF THE AMOUNT PAID BY THE LICENSEE TO Licensor HEREUNDER. (c) THIS SECTION IS A MATERIAL INDUCEMENT TO AND CONDITION FOR LICENSOR ENTERING INTO THIS AGREEMENT. + + + + + + ARTICLE XIX INSOLVENCY Either party shall have the right to terminate this Agreement immediately upon notice to the other party if the other party: (a) becomes the subject of a voluntary petition in bankruptcy or any voluntary proceeding relating to insolvency, receivership, liquidation, or composition for the benefit of creditors; or (b) becomes the subject of an involuntary petition in bankruptcy or any involuntary proceeding relating to insolvency, receivership, liquidation, or composition for the benefit of creditors, if such petition or proceeding is not dismissed within sixty (60) days of filing. ARTICLE XX CERTAIN OTHER EVENTS OF TERMINATION (a) Upon the occurrence of any Change of Control (as defined below) this Agreement and all Licensee's rights and licenses hereunder shall automatically terminate unless, prior to the occurrence of such Change of Control, Licensor has consented to such Change of Control in a writing executed by an officer of Licensor; provided that Licensor will not unreasonably withhold its consent to the consummation of a Change of Control. For purposes of the preceding sentence, Licensor will be deemed to have reasonably withheld its consent to a Change of Control if any person or entity who would acquire direct or indirect control (as defined below) of Licensee pursuant to such Change of Control then conducts a business that is directly or indirectly competitive with a business then conducted by Licensor or any of its Affiliates and/or Licensor reasonably believes that Licensor's interests will be adversely effected by the continuing of this Agreement upon such a Change in Control. As used herein, the term "CHANGE OF CONTROL" means: (i) a transaction or series of related transactions that results in the sale or other disposition of all or substantially all of Licensee's assets; or (ii) a merger or consolidation in which Licensee is not the surviving corporation or in which, if Licensee is the surviving corporation, the shareholders of Licensee immediately prior to the consummation of such merger or consolidation do not, immediately after consummation of such merger or consolidation, own stock or other securities of Licensee that possess a majority of the voting power of all Licensee's outstanding stock and other securities and the power to elect a majority of the members of Licensee's board of directors; or (iii) a transaction or series of related transactions (which may include without limitation a tender offer for Licensee's stock or the issuance, sale or exchange of stock of Licensee) if the shareholders of Licensee immediately prior to the initial such transaction do not, immediately after consummation of such transaction or any of such related transactions, own stock or other securities of Licensee that possess a majority of the voting power of all Licensee's outstanding stock and other securities and the power to elect a majority of the members of Licensee's board of directors. As used herein, the term "CONTROL" (including, with correlative meanings, the terms, "CONTROLS" "CONTROLLING", "CONTROLLED BY" or "UNDER COMMON CONTROL WITH") with respect to a designated person means the possession, directly or indirectly, of the power to vote a majority of the securities having voting power for the election of directors (or other persons acting in similar capacities) of such person or otherwise to direct or cause the direction of the management and policies of such person, whether through the ownership of voting securities, by contract or otherwise. (b) In the event Licensee winds up, dissolves or otherwise ceases doing business, Licensor shall be entitled to terminate this Agreement immediately upon written notice to Licensee. + + + + + + ARTICLE XXI EFFECT OF TERMINATION Upon termination of this Agreement: for any reason (a) the rights and licenses granted to Licensee pursuant to this Agreement will automatically terminate, and (b) Licensee shall, within five (5) days, ship to Licensor all Licensed Technology, API's Documentation with respect to the Licensed Technology and other Confidential Information in Licensee's possession or control, and an officer of Licensee shall certify in writing that Licensee as complied with the provisions of this Section. All of the Licensor's rights under this Agreement shall survive termination of this Agreement. + + + + ARTICLE XXII RIGHT OF FIRST REFUSAL During the term of this Agreement, the Licensor shall have the right (the "Right of First Refusal"), for a period (the "Exercise Period") expiring at 11:59 PM (Eastern Time) on the fifth (5th) business day after the giving of written notice by the Licensee that it has received a bonafide offer from a third party to (ii) purchase all or substantially all of the assets of Licensee; or (ii) to engage in a merger or consolidation in which Licensee is not the surviving corporation or in which, if Licensee is the surviving corporation, the owners of Licensee immediately prior to the consummation of such merger or consolidation do not, immediately after consummation of such merger or consolidation, own stock or other securities of Licensee that possess a majority of the voting power of all Licensee's outstanding stock and other securities and the power to elect a majority of the members of Licensee's board of directors. + + In the event the Licensor declines or fails to exercise in full the Right of First Refusal before the expiration of the Exercise Period, the + +Licensee shall have the right to consummate the transaction with the third party. + + ARTICLE XXIII NON EXCLUSIVE REMEDY Termination of this Agreement by either party will be a nonexclusive remedy for breach and will be without prejudice to any other right or remedy of such party. NO DAMAGES FOR TERMINATION. NEITHER PARTY WILL BE LIABLE TO THE OTHER FOR DAMAGES OF ANY KIND, INCLUDING WITHOUT LIMITATION INCIDENTAL OR CONSEQUENTIAL DAMAGES, DAMAGES FOR THE LOSS OF GOODWILL, PROSPECTIVE PROFITS OR ANTICIPATED INCOME, OR DAMAGES RESULTING FROM ANY EXPENDITURES, INVESTMENTS, LEASES OR COMMITMENTS MADE BY EITHER PARTY ON ACCOUNT OF THE TERMINATION OR EXPIRATION OF THIS AGREEMENT IN ACCORDANCE WITH ITS TERMS. + + + + + + ARTICLE XXIV + +GENERAL PROVISIONS + + (a) GOVERNING LAW. The parties agree that it is to their mutual benefit that their respective rights and obligations under this Agreement are guided by, and their disputes hereunder are determined in accordance with, a well developed body of law. Accordingly, the parties agree that the validity, interpretation and legal effect of this Agreement shall be governed by the internal laws of the State of New York, U.S.A., applicable to contracts entered in and performed entirely within the State of New York, U.S.A. without regard to any conflict of law principles. The parties agree that any legal suit, action or proceeding arising out of or relating to this Agreement must be instituted in the City of New York, State of New York, and the parties each (i) irrevocably submits to the exclusive jurisdiction of the United States District Court for the Southern District of New York, or any court of the State of New York, and (ii) waives any objection to the venue of any such suit, action or proceeding and any claim relating to forum non conveniens. In any such suit, action, or proceeding, any summons, order to show cause, writ, judgment, decree or other process may be delivered to the parties outside the State of New York or outside the United States and when so delivered, such party shall be subject to the jurisdiction of such court, and amenable to the process so delivered as though the same had been served within the State of New York but outside the county in which such suit, action or proceeding is pending. (b) COMPLIANCE WITH LAWS. Licensee agrees to comply in all material respects with all applicable laws, rules, and regulations in connection with its activities under this Agreement, including without limitation, any applicable export controls imposed by the U.S. Export Administration Act of 1978, as amended (the "ACT") and the regulations promulgated under the Act. (c) ASSIGNMENT. Licensee may not assign this Agreement or assign, sublicense and/or transfer in any manner its license rights hereunder in whole or in part without Licensor's prior written consent. Any attempt to assign this Agreement or assign, sublicense and/or transfer in any manner Licensee's license rights hereunder without such consent will be void and of no effect. For purposes of this Agreement, any Change of Control (as defined in Section 13.4(a)) shall be governed by the provisions of the section entitled Change Of Control and not the provisions of this Section Subject to the terms of this Section, this Agreement will bind and inure to the benefit of the parties and their respective successors and permitted assigns. (d) ATTORNEYS' FEES. In the event that any action or proceeding is brought in connection with this Agreement, the prevailing party shall be entitled to recover its costs and reasonable attorneys' fees following a final judgment. (e) SEVERABILITY. If for any reason a court of competent jurisdiction finds any provision of this Agreement invalid or unenforceable, then that provision of the Agreement will not be voided, but rather will be enforced to the maximum extent legally permissible and the other provisions of this Agreement will remain in full force and effect. + + + + + + (f) INDEPENDENT CONTRACTOR. The parties to this Agreement are independent contractors and this Agreement will not establish any relationship of partnership, joint venture, employment, franchise, or agency between the parties. Neither party will have the power to bind the other or incur obligations on the other's behalf without the other's prior written consent. (g) NOTICES. All notices required or permitted under this Agreement will be in writing and delivered by confirmed facsimile transmission, by courier or overnight delivery service, or by certified mail, and in each instance will be deemed given upon receipt. All communications to a party will be sent to the address of the party set forth in the preamble above or to such other address as may be specified by such party to the other in accordance with the Section called Contact Information. Either party may change its address for notices under this Agreement by giving written notice to the other party by the means specified in this Section. (h) COUNTERPARTS. This Agreement may be executed in counterparts, each of which will be deemed an original, but both of which together will constitute one and the same instrument. (e) ENTIRE AGREEMENT. This Agreement, constitutes the complete and exclusive agreement between the parties with respect to the subject matter hereof, superseding and replacing any and all prior and contemporaneous agreements, communications, and understandings (both written and oral) regarding such subject matter. (h) MODIFICATION. No modification to this Agreement, nor any waiver of any rights, shall be effective unless consented to in writing and the waiver of any breach or default shall not constitute a waiver of any other right or of any subsequent breach or default. (i) FORCE MAJEURE. Except for the obligations to make payments hereunder, each Party shall be relieved of the obligations hereunder to the extent that performance is delayed or prevented by any cause beyond its reasonable control, including without limitation, acts of God, public enemies, war, civil disorder, fire, flood, explosion, labor disputes or strikes or any acts or orders of any governmental authority. (j) CONSTRUCTION. The parties agree that no ambiguity (if any) found in this Agreement shall be resolved against any party by virtue of its participation in the drafting of this Agreement. (k) REPRESENTATION BY COUNSEL. Each party acknowledges that it has had the opportunity to be represented by separate independent counsel in the negotiation of this Agreement, that any such respective attorneys were of its own choosing, that each authorized representative has read this Agreement and that it understands its meaning and legal consequences to each party. Each Party warrants and represents that it has consulted with its attorney of choice, or voluntarily chose not to do so, concerning the execution, the meaning and the import of this Agreement, and has read this Agreement and fully understands the terms hereof as signified by its signature below, and is executing the same of its own free will for the purposes and consideration herein expressed. Each Party warrants and represents that it has had sufficient time to consider whether to enter into this Agreement and that it is relying solely on its own judgment and the advice of its own counsel, if any, in deciding to execute this Agreement. Each Party warrants and represents that it has read this Agreement in its entirety and has consulted with its attorney, if any concerning the execution of this Agreement. If any or all Parties have chosen not to seek counsel, said party or parties hereby acknowledge that it or they refrained from seeking counsel entirely of its or their own volition and with full knowledge of the consequences of such a decision. + + + + + + IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the Effective Date by their duly authorized representatives. + + + + + + + + + +SFG FINANCIAL CORP. 551 FX IB ASSOCIATES LLC + +By: /s/ Michael C. Caska By: /s/ Fred Miller + +Name: Michael C. Caska Fred Miller + +Title: Chief Executive Officer Title: Member Manager \ No newline at end of file diff --git a/full_contract_txt/SIBANNAC,INC_12_04_2017-EX-2.1-Strategic Alliance Agreement.txt b/full_contract_txt/SIBANNAC,INC_12_04_2017-EX-2.1-Strategic Alliance Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..00bba5cc0f912faf6a7d9fd2fba086ebee91f106 --- /dev/null +++ b/full_contract_txt/SIBANNAC,INC_12_04_2017-EX-2.1-Strategic Alliance Agreement.txt @@ -0,0 +1,43 @@ +Exhibit 2.01 Strategic Alliance Agreement This agreement is made and entered into this 30th day of November, 2017 by and between Bravatek Solutions, Inc., a corporation organized under the laws of the State of Colorado, ("Bravatek"), with an address at 2028 E. Ben White Blvd., Unit #240-2835, Austin, Texas, 78741, and Sibannac, Inc. ("COMPANY"), a corporation organized under the laws of Nevada, with an address at 2122 E Highland Avenue, Suite 425, Phoenix, Arizona 85016. Whereas, Bravatek is a corporation, which has technical expertise in security-related software, tools and systems/services (including telecom services) to support, deploy and test its current and potential customers' most critical initiatives. Whereas, COMPANY a corporation engaged in the business of providing a novel, patented Air Cylinder Wheel, to replace the need for conventional rubber tires on a large range of vehicles used in the mining, military, construction and industries, delivering cost savings and reducing adverse environmental impact. Whereas, the parties desire to enter into a business relationship which will designate Bravatek as the project based business partnership channel for governmental and non-governmental departments / agencies / units for the purpose of promoting COMPANY's relevant capabilities, products and/or service solutions. Now therefore, the parties mutually agree to enter into a strategic alliance under the following terms and conditions: 1) Duties of Bravatek Bravatek agrees to serve as a non-exclusive project sales lead finder for COMPANY. In this capacity, Bravatek will use its best efforts to provide the following services to COMPANY. a. Promote, market and introduce the Products to prospective clients in the government space nationwide. b. Provide a quarterly Pipeline or project information leads report to COMPANY on a monthly basis which contains a 3-month rolling forecast of potential sales. c. Follow-up on on-going project leads that COMPANY is actively engaged with or believes is appropriate. d. Provide COMPANY with any promotional materials, technical papers, white papers, proposals, etc. prior to publication or delivery to prospective clients. + + 1 + + + + + + + + 2) Duties of COMPANY COMPANY agrees to use its best efforts to promote and support project lead finding and after-sales support of Bravatek by: a. Listing Bravatek in all appropriate sales and marketing materials as a non-exclusive alliance partner (with focus of government customers) b. Provide timely responses to both technical and administrative questions posed by Bravatek. c. Promote Bravatek's product and service offerings whenever possible. d. Aid Bravatek in the writing of any technical/marketing/sales documents when requested and participate in mutually-agreed upon sales calls. e. Provide Bravatek with co-branded marketing material that can be emailed or handed to prospective clients. 3) Obligations of the Parties Bravatek and COMPANY agree to jointly: a. Develop and implement a joint Product Solution and Application Strategy whereby targeted markets/potential client- types/applications are mutually agreed upon; b. Support each other in all agreed-upon technical, marketing and promotional efforts; c. Develop a joint strategy for developing new product/services/capabilities to mutually benefit both parties; d. Utilize each other as Preferred Vendors for services whenever possible upon mutual agreement. 4) Compensation When custom Products are designed, developed and to be delivered to Bravatek-identified perspective clients, the parties shall agree to a proposed sales price for use during the project in writing prior to the commencement of each project. + + 2 + + + + + + + + For any Product or Solution sold to any perspective clients introduced by Bravatek registered with COMPANY via email to COMPANY's CEO and delivered through Bravatek or a COMPANY-designated distribution affiliate(s) or sales channel(s), Bravatek will receive a lead-finder fee, to be mutually discussed and finally decided by COMPANY at the range of minimum of 10% to maximum of 20% of project revenue, with an exact fee to be depending upon the overall project sales margin and cost of development and delivery of each project, payable NET 30 days after each client payment on delivered products received at COMPANY's bank account. 5) Confidentiality "Confidential information" shall mean any and all technical and non-technical information, documents and materials related to client projects of party and products, services and business of each of the parties. COMPANY and Bravatek agree to maintain in strict confidence and not to disclose or disseminate, or to use for any purposes other than performance of the projects, the Confidential Information disclosed. The obligation of non-disclosure shall not apply to the following: a. Information at or after such time that is publicly available through no fault of either party b. Information at or after such time that is disclosed to either party by a third party entitled to disclose such information c. Information which is required by law to be disclosed to federal, state or local authorities. 6) Term of Confidentiality For a period of five (5) years after termination of this Agreement, the parties shall treat as confidential all information and take every reasonable precaution and use all reasonable efforts to prevent the unauthorized disclosure of the same. The parties agree to take all steps reasonably necessary and appropriate to ensure that their employees, agents, and/or assistants treat all information as confidential and to ensure that such employees, agents, and/or assistants are familiar with and abide by the terms of this Agreement. 7) Term The term of this Agreement is twelve (12) months from the date hereof, and will be automatically renewed for one (1) additional twelve month period unless either party shall notify the other in writing of its intention not to renew. Such notice must be given ninety (90) days prior to expiration of the original term. This Agreement may also be terminated by either party upon ninety (90) days written notice. + + 3 + + + + + + + + 8) Notices Any notices required under this Agreement shall be delivered to: Bravatek Technologies, Inc. 2028 E. Ben White Blvd., Unit #240-2835 Austin, Texas 78741 Sibannac, Inc. 2122 E Highland Avenue, STE 425 Phoenix, AZ 85016 9) Governing Law This Agreement is entered into in the State of Texas and shall be interpreted according to the laws of the State of Texas. 10) Indemnification COMPANY shall indemnify Bravatek, its directors, officers and employees, for any and all damages, costs, expenses, and other liabilities, including reasonable attorney's fees and court costs incurred in connection with any third-party claim, action or proceeding arising from the negligence or intentional misconduct of COMPANY or breach of COMPANY of any of its obligations under this Agreement. Bravatek shall indemnify COMPANY, its directors, officers and employees, for any and all damages, costs, expenses, and other liabilities, including reasonable attorney's fees and court costs, incurred in connection with any third-party claim, action or proceeding arising from the negligence or intentional misconduct of Bravatek or breach of Bravatek of any of its obligations under this Agreement. 11) Modifications No changes or modifications of this Agreement or any of its terms shall be deemed effective unless in writing and executed by the parties hereto. 12) Assignment This Agreement shall not be assignable by either party without the prior written consent of the other party. + + 4 + + + + + + + + 13) Entire Agreement This Agreement represents the complete and entire understanding between the parties regarding the subject matter hereof and supersedes all prior negotiations, representations, or agreements, either written or oral, regarding this subject matter. This Agreement shall not be considered accepted, approved or otherwise effective until signed by the appropriate parties. Bravatek Technologies, Inc. Sibannac, Inc. By: /s/ Thomas A.Cellucci By: /s/ David Mersky Name: Thomas A. Cellucci Name: David Mersky Title: Chairman & CEO Chief Executive Officer Date: November 30, 2017 Date: November 30, 2017 + + 5 \ No newline at end of file diff --git a/full_contract_txt/SLINGERBAGINC_05_27_2020-EX-10.7-CONSULTING AGREEMENT.txt b/full_contract_txt/SLINGERBAGINC_05_27_2020-EX-10.7-CONSULTING AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..d7fc89e3b0cdf3fbe45e1b493ca50a7b52c2e3af --- /dev/null +++ b/full_contract_txt/SLINGERBAGINC_05_27_2020-EX-10.7-CONSULTING AGREEMENT.txt @@ -0,0 +1,85 @@ +Exhibit 10.7 CONSULTING AGREEMENT THIS AGREEMENT made this 30th day of April (the "Effective Date") between Slinger Bag Inc., a Nevada company (the "Company") and Aitan Zacharin, an individual residing in Bet Shemesh, Israel (the "Consultant") A. The Company is engaging Consultant as a consultant in respect of investor relations, corporate structure, public relations and commercial development. B. The Company and the Consultant wish to formally record the terms and conditions of such engagement. C. Each of the Company and the Consultant has agreed to the terms and conditions set forth in this Agreement, as evidenced by their respective execution hereof. NOW THEREFORE THIS AGREEMENT WITNESSES that, in consideration of the premises and the mutual covenants and agreements herein contained, the parties hereto covenant and agree as follows: ARTICLE 1 CONTRACT FOR SERVICES 1.1 Engagement of Consultant. The Company hereby agrees to engage the Consultant in accordance with the terms and provisions hereof. (a) Term. Unless terminated earlier in accordance with the provisions hereof, this Agreement will commence on the Effective Date and will continue for a period of three (3) years therefrom (the "Term"). (b) Service. The Consultant agrees to faithfully, honestly and diligently serve the Company and to devote the time, attention efforts to further the business interests of the Company and utilize his professional skills and care during the Term. 1.2 Duties : The Consultant's services hereunder will be provided on the basis of the following terms and conditions: (a) The Consultant will report directly to the chief executive officer and/or other officers of the Company; (b) The Consultant will be responsible for advising on and facilitating the Company's investor relations, corporate structure and governance, public relations and commercial development activities and supervising, liaising and instructing outside service providers, in each case, subject to any applicable law and to instructions provided by the officers of the Company from time to time. + + + + + +2 (c) The Consultant will faithfully, honestly and diligently serve the Company and cooperate with the Company and utilize maximum professional skill and care to ensure that all services rendered hereunder are to the satisfaction of the Company, acting reasonably, and the Consultant will provide any other services not specifically mentioned herein, but which by reason of the Consultant's capability, the Consultant knows or ought to know to be necessary to ensure that the best interests of the Company are maintained. (d) The Consultant will assume, obey, implement and execute such duties, directions, responsibilities, procedures, policies and lawful orders as may be determined or given from time to time by the Company. (e) The Consultant will report the results of his duties hereunder to the Company as it may request from time to time. Article 2 COMPENSATION 2.1 Remuneration. (a) The Consultant's monthly base consulting fee shall be three thousand two hundred fifty United States dollars ($3,250 (together with any increases thereto as hereinafter provided, the "Base Consulting Fee") through 19 August 2020. Commencing on 20 August 2020, Consultant's Base Consulting Fee shall be increased to $8,500 per calendar month. The Base Consulting Fee shall be payable in accordance with the Company's normal payroll procedures in effect from time to time. All subsequent monthly payments of Base Consulting Fee shall be paid within the first five days of the following calendar month. The Base Consulting Fee may be increased by the Board from time to time during the Term, but shall be reviewed by the Board at least annually (b) The Company shall also issue Consultant as soon as reasonably practicable warrants to purchase 1,250,000 shares of common stock in the form attached hereto as Annex A. The Company agrees to bear all costs and fees to be charged by the Company's transfer agent in respect of such shares. (c) The Consultant shall be eligible to participate in benefit plans currently and hereafter maintained by the Company of general applicability to other consultants of the Company. Subject to the following sentence, the Consultant will be entitled to receive up to a one-time bonus of 1,500,000 shares of common stock of the Company promptly after the value of the Company's outstanding stock equals $100 million dollars. (d) In addition to the foregoing, the Company will grant the Consultant additional compensation in the form of cash or shares in cases of extraordinary contribution by him to the benefit of the Company as the Board of Directors of the Company will decide. + + + + + +3 + +2.2 Incentive Plans. The Consultant will be entitled to participate in any bonus plan or incentive compensation plans (including, without limitation, equity or option plans) for consultants or outside service-providers adopted by the Company. The Consultant's bonus payment level will be set at a minimum of 25% of the annual gross Base Consulting Fee. It is agreed that any such plans will be retroactive to the Effective Date. + +2.3 Expenses. The Consultant will be reimbursed by the Company for all reasonable business expenses incurred by the Consultant in connection with his duties. This includes, but is not limited to, payments of expenses incurred when traveling abroad and others. In this connection, the Consultant will be issued, as soon as practicable, a Company credit card that the Consultant will use to pay for any and all expenses that pertain to the Company. + +ARTICLE 3 CONFIDENTIALITY AND NON-COMPETITION 3.1 Maintenance of Confidential Information. (a) The Consultant acknowledges that, in the course of performing his obligations hereunder, the Consultant will, either directly or indirectly, have access to and be entrusted with confidential information (whether oral, written or by inspection) relating to the Company or its respective affiliates, associates or customers (the "Confidential Information"). (b) The Consultant acknowledges that the Company's Confidential Information constitutes a proprietary right, which the Company is entitled to protect. Accordingly, the Consultant covenants and agrees that, as long as he works for the Company, the Consultant will keep in strict confidence the Company's Confidential Information and will not, without prior written consent of the Company, disclose, use or otherwise disseminate the Company's Confidential Information, directly or indirectly, to any third party. (c) The Consultant agrees that, upon termination of his services for the Company, he will immediately surrender to the Company all Company Confidential Information then in his possession or under his control. 3.2 Exceptions. The general prohibition contained in Section 4.1 against the unauthorized disclosure, use or dissemination of the Company's Confidential Information will not apply in respect of any Company Confidential Information that: (a) is available to the public generally; (b) becomes part of the public domain through no fault of the Consultant; (c) is already in the lawful possession of the Consultant at the time of receipt of the Company's Confidential Information; or (d) is compelled by applicable law or regulation to be disclosed, provided that the Consultant gives the Company prompt written notice of such requirement prior to such disclosure and provides commercially reasonable assistance at the request and expense of the Company, in obtaining an order protecting the Company's Confidential Information from public disclosure. + + + + + +4 ARTICLE 4 TERMINATION 4.1 Termination of Engagement. The Consultant's engagement may be terminated only as follows: (a) Termination by the Company (i) For Cause. The Company may terminate the Consultant's engagement for Cause. (ii) Without Cause. The Company may terminate Consultant's engagement at any time by giving Consultant 60 days prior written Notice of the termination. In such case, 100% of the Consultant's unvested stock and, if applicable, option or warrant compensation of any nature will vest without any further action required on the part of the Consultant or the Company and the Company will deliver to the order of the Consultant promptly upon receipt of a written demand of the Consultant such shares of common stock or options at its sole expense as become due to Consultant hereunder. The Consultant's right to receive compensation whether in cash or securities shall survive any termination of this Agreement Without Cause. (b) Termination by the Consultant (i) For Good Reason. The Consultant may terminate the Consultant's engagement with the Company for Good Reason. (ii) Without Good Reason. The Consultant may voluntarily terminate the Consultant's engagement with the Company at any time by giving the Company 120 days prior written Notice of the termination. (c) Termination Upon Death or Disability (i) Death. The Consultant's engagement shall terminate upon the Consultant's death. (ii) Disability. The Company may terminate the Consultant's engagement upon the Consultant's Disability. (d) For the purpose of this Article 3, "Cause" means: (i) Breach of Agreement. Consultant's material breach of Consultant's obligations of this Agreement, not cured after 30 days' Notice from the Company. + + + + + +5 (ii) Gross Negligence. Consultant's gross negligence in the performance of Consultant's duties. (iii) Crimes and Dishonesty. Consultant's conviction of or plea guilty to any crime involving, dishonesty, fraud or moral turpitude. (iv) In the event of termination of this agreement for Cause, the Company may terminate the Consultant's engagement after 30 days' Notice. (e) For the purpose of this Article 5, "Good Reason" means: (i) Breach of Agreement. The Company's material breach of this Agreement, which breach has not been cured by the Company within 30 days after receipt of written notice specifying, in reasonable detail, the nature of such breach or failure from Consultant. (ii) Non Payment. The failure of the Company to pay any amount due to Consultant hereunder, which failure persists for 30 days after written notice of such failure has been received by the Company. (iii) Change of Responsibilities/Compensation. Any material reduction in Consultant's title or a material reduction in Consultant's duties or responsibilities or any material adverse change in Consultant's Base Consulting Fee or any material adverse change in Consultant's benefits. (f) It is agreed that in the event of termination of this agreement if the Company decides that the Consultant's services are not needed during the termination period, the Company will continue to be responsible for paying cash and equity compensation as defined in Article 2 of this Agreement for the entire termination period. Neither the Company, nor the Consultant will be entitled to any notice or payment in excess of that specified in this Article 5. (g) Upon the termination (whether for cause, disability, death, without cause, or by way of change of control), the Company shall pay to Consultant on the date required under applicable law: (i) any accrued but unpaid Base Consulting Fee for services rendered as of the date of termination, (ii) (if applicable) any accrued but unpaid vacation pay, and (iii) the business expenses reasonably incurred by the Consultant up to the date of termination or resignation and properly reimbursable, in each case less any applicable deductions or withholdings required by law. Section 4.2 Termination for Cause, Disability or Death (a) In the event that this Agreement and the Consultant's engagement with the Company is terminated for Cause, the Company shall provide the Consultant written notice thereof and Consultant or Consultants surviving next of kin shall be entitled only to the amounts specified in Section 3.1. plus all vested common shares and, if applicable options and warrants. + + + + + +6 (b) In the event of the Consultants service terminates by reason of the Consultants disability or death, the accrued salary may be paid, and options and warrants may be exercised by the by the Consultant or the Consultant's legal representatives, executors or assigns, as the case may be, for a period of one (1) year from the date of death or disability. Section 4.3 Termination without Cause In the event this Agreement and the Consultant's engagement with the Company is terminated by the Company without Cause (other than for death or Disability or in connection with a change of control), then in addition to the amounts specified in Section 4.1 and subject to the Consultant's execution and non-revocation of a separation agreement containing a general release and waiver of liability against the Company and anyone connected with it in form acceptable to the Company, the Consultant shall be entitled to receive, and the Company shall pay the Consultant, two (2) years Base Consulting Fee (less statutory deductions and withholdings) in a single lump sum, paid in full within 30 days of termination. Further, Consultant shall be entitled to all vested common shares and, if applicable, options and warrants with vesting continuing for 12 months following termination as applicable. ARTICLE 5 MUTUAL REPRESENTATIONS 5.1 The Consultant represents and warrants to the Company that the execution and delivery of this Agreement and the fulfilment of the terms hereof (a) will not constitute a default under or conflict with any agreement or other instrument to which he is a party or by which he is bound; and (b) do not require the consent of any person or entity. 5.2 The Company represents and warrants to the Consultant that this Agreement has been duly authorized, executed and delivered by the Company and that the fulfilment of the terms hereof (a) will not constitute a default under or conflict with any agreement of other instrument to which it is a party or by which it is bound; and (b) do not require the consent of any person of entity. 5.3 Each party hereto warrants and represents to the other that this Agreement constitutes the valid and binding obligation of such party enforceable against such party in accordance with its terms subject to applicable bankruptcy, insolvency, moratorium and similar laws affecting creditors' rights generally, and subject, as to enforceability, to general principles of equity (regardless if enforcement is sought in proceeding in equity or at law). + + + + + +7 ARTICLE 6 NOTICES 6.1 Notices. All notices required or allowed to be given under this Agreement must be made either personally by delivery to or by facsimile transmission to the address as hereinafter set forth or to such other address as may be designated from time to time by such party in writing: (a) in the case of the Company, to: Slinger Bag Inc. To be provided under separate cover within three days after the date hereof; in the event that Consultant does not receive notice of address within such period, then Consultant shall be entitled to send any notice to any email address of the Company known to Consultant and the sending of any such notice shall constitute receipt of notice whether the Company receives such notice or not. (b) and in the case of the Consultant, to the Consultant's last residence address known to the Company or aitan@gcanrx.com. 6.2 Change of Address. Any party may, from time to time, change its address for service hereunder by written notice to the other party in the manner aforesaid. ARTICLE 7 GENERAL 7.1 Further Assurances. Each party hereto will promptly and duly execute and deliver to the other party such further documents and assurances and take such further action as such other party may from time to time reasonably request in order to more effectively carry out the intent and purpose of this Agreement and to establish and protect the rights and remedies created or intended to be created hereby. 7.2 Waiver. No provision hereof will be deemed waived and no breach excused, unless such waiver or consent excusing the breach is made in writing and signed by the party to be charged with such waiver or consent. A waiver by a party of any provision of this Agreement will not be construed as a waiver of a further breach of the same provision. 7.3 Amendments in Writing. No amendment, modification or rescission of this Agreement will be effective unless set forth in writing and signed by the parties hereto. + + + + + +8 7.4 Assignment. Except as herein expressly provided, the respective rights and obligations of the Consultant and the Company under this Agreement will not be assignable by either party without the written consent of the other party and will, subject to the foregoing, inure to the benefit of and be binding upon the Consultant and the Company and their permitted successors or assigns. Nothing herein expressed or implied is intended to confer on any person other than the parties hereto any rights, remedies, obligations or liabilities under or by reason of this Agreement. For the avoidance of doubt, it is agreed that in the event that the Company participates in a merger, acquisition, restructuring, reorganization or other transaction in which the Company is merged into, sold to or otherwise becomes part of or owned by another company or entity, this Agreement will remain in force and be binding on any such successor, surviving or acquiring company or entity. 7.5 The Company acknowledges and agrees that the Consultant may submit to the Company invoices from a company that employs him in lieu of invoices on his name. The Consultant confirms that any such invoice will replace his own invoice and he agrees that his fees will be paid by the Company to third parties provided that it is done as per his instructions to the Company. 7.6 Severability. In the event that any provision contained in this Agreement is declared invalid, illegal or unenforceable by a court or other lawful authority of competent jurisdiction, such provision will be deemed not to affect or impair the validity or enforceability of any other provision of this Agreement, which will continue to have full force and effect. 7.7 Headings. The headings in this Agreement are inserted for convenience of reference only and will not affect the construction or interpretation of this Agreement. 7.8 Number and Gender. Wherever the singular or masculine or neuter is used in this Agreement, the same will be construed as meaning the plural or feminine or a body politic or corporate and vice versa where the context so requires. 7.9 Time. Time is of the essence in this Agreement. 7.10 Governing Law. This Agreement will be construed and interpreted in accordance with the laws of the State of New York without reference to its conflicts of laws principles or the conflicts of laws principles of any other jurisdiction, and each of the parties hereto expressly attorns to the jurisdiction of the courts of the State of New York. The sole and exclusive place of jurisdiction in any matter arising out of or in connection with this Agreement will be the applicable New York state or federal court. 7.11 This Agreement (including all Annexes thereto) constitutes the entire agreement between the Parties with respect to the subject matter thereof and supersedes all prior agreements, understandings and negotiations, both written and oral, between the Parties with respect to this matter. IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as of the date and year first above written. Slinger Bag Inc. By: Title: Agreed and accepted: Aitan Zacharin + + + + + +9 Annex A THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF ANY STATE AND, EXCEPT AND PURSUANT TO THE PROVISIONS OF ARTICLE 4 BELOW, MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAW OR, IN THE OPINION OF LEGAL COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS EXEMPT FROM REGISTRATION. WARRANT TO PURCHASE COMMON STOCK Company: Slinger Bag Inc. Holder: Aitan Zacharin Shares: 1,250,000 shares of the Company's common stock. Class of Stock: common shares of stock of the Company Exercise Price per share: par value Issue Date: 30 April 2020 Term: See Section 4.1 THIS WARRANT CERTIFIES THAT, for value received as consideration pursuant to that certain amended and restated service agreement dated 30 April 2020 (the "Service Agreement") and for other good and valuable consideration the sufficiency of which is hereby acknowledged, Holder is entitled to receive the Shares in the form of fully paid and nonassessable shares of the Company at the Exercise Price, all as set forth herein, subject to the provisions and upon the terms and conditions set forth in this Warrant. ARTICLE 1. EXERCISE. 1.1 Method of Exercise. Payment. (a) Cash Exercise. The purchase rights represented by this Warrant may be exercised by the Holder, in whole or in part, by the surrender of this Warrant (with the notice of exercise form attached hereto as Appendix 1 duly executed) at the principal office of the Company, and by the payment to the Company, by certified, cashier's or other check acceptable to the Company or by wire transfer to an account designated by the Company, of an amount equal to the aggregate Exercise Price of the Shares being purchased. + + + + + +10 (b) Net Issue Exercise. In lieu of exercising this Warrant, the Holder may elect to receive Shares equal to the value of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with notice of such election, in which event the Company shall issue to the Holder a number of Warrant Shares computed using the following formula: Y (A-B) X = ——————— A Where: X = the number of Shares to be issued to the Holder. Y = the number of the Shares being exercised on the date of determination. A = the fair market value of one Share on the date of determination. B = the per share Exercise Price (as adjusted to the date of such calculation). (c) Fair Market Value. For purposes of this Article 1, the per share fair market value of the Warrant Shares shall mean: + + + + + +11 (i) If the Company's Common Stock is publicly traded, the per share fair market value of the Warrant Shares shall be the average of the closing prices of the Common Stock as quoted on the Over-the-Counter Bulletin Board, or the principal exchange on which the Common Stock is listed, in each case for the fifteen trading days ending five trading days prior to the date of determination of fair market value; (ii) If the Company's Common Stock is not so publicly traded, the per share fair market value of the Warrant Shares shall be such fair market value as is determined in good faith by the Board of Directors of the Company after taking into consideration factors it deems appropriate, including, without limitation, recent sale and offer prices of the capital stock of the Company in private transactions negotiated at arm's length. 1.2 Delivery of Certificate and New Warrant. Promptly after Holder first exercises this Warrant, the Company shall deliver to Holder certificates for or other evidence (reasonably acceptable to the Holder) of the Shares received and, if this Warrant has not been fully exercised and has not expired, a new Warrant representing the Shares not so received. 1.3 Replacement of Warrants. On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of loss, theft or destruction, on delivery of an indemnity agreement reasonably satisfactory in form and amount to the Company or, in the case of mutilation, on surrender and cancellation of this Warrant, the Company shall execute and deliver, in lieu of this Warrant, a new warrant of like tenor. ARTICLE 2. ADJUSTMENTS TO THE SHARES. 2.1 Stock Dividends, Splits, Combinations, Etc. If the Company declares or pays a dividend on the Shares payable in Common Stock, or other securities, then upon exercise of this Warrant, for each Share acquired, Holder shall receive, without cost to Holder, the total number and kind of securities to which Holder would have been entitled had Holder owned the Shares of record as of the date the dividend occurred. If the Company subdivides the Shares by reclassification or otherwise into a greater number of shares or takes any other action which increases the amount of stock into which the Shares are convertible, the number of shares purchasable hereunder shall be proportionately increased and the Exercise Price shall remain the same. If the outstanding shares of the Company are combined or consolidated, by reclassification or otherwise, into a lesser number of shares, the Exercise Price shall be proportionately increased and the number of Shares shall be proportionately decreased. 2.2 Reclassification, Exchange or Substitution, Etc. Upon any reclassification, exchange, substitution, or other event that results in a change of the number and/or class of the securities issuable upon exercise or net exercise of this Warrant, Holder shall be entitled to receive, upon exercise or net exercise of this Warrant, the number and kind of securities and property that Holder would have received for the Shares if this Warrant had been exercised immediately before such reclassification, exchange, substitution, or other event. The Company or its successor shall promptly issue to Holder an amendment to this Warrant setting forth the number and kind of such new securities or other property issuable upon exercise or net exercise of this Warrant as a result of such reclassification, exchange, substitution or other event that results in a change of the number and/or class of securities issuable upon exercise or net exercise of this Warrant. + + + + + +12 2.3 Merger or Consolidation. Upon any capital reorganization of the Company's capital stock (other than a subdivision, combination, reclassification or exchange of shares provided for elsewhere in this Section 2) or a merger or consolidation of the Company with or into another corporation, then as a part of such reorganization, merger or consolidation, provision shall be made so that the Holder shall thereafter be entitled to receive upon the exercise of this Warrant, the number and kind of securities and property of the Company, or of the successor corporation resulting from such reorganization, merger or consolidation, to which that Holder would have received for the Shares if this Warrant had been exercised immediately before such reorganization, merger or consolidation. 2.4 Fractional Shares. No fractional Shares shall be issuable upon exercise or net exercise of this Warrant and the number of Shares to be issued shall be rounded up to the nearest whole Share. ARTICLE 3. COVENANTS OF THE COMPANY. 3.1 Notice of Certain Events. If the Company proposes at any time (a) to declare any dividend or distribution upon any of its stock, whether in cash, property, stock, or other securities and whether or not a regular cash dividend; (b) to effect any reclassification or recapitalization of any of its stock; or (c) to merge or consolidate with or into any other corporation, or sell, lease, license, or convey all or substantially all of its assets, or to liquidate, dissolve or wind up, then, in connection with each such event, the Company shall give Holder: (1) at least three (3) days prior written notice of the date on which a record will be taken for such dividend, distribution, or subscription rights (and specifying the date on which the holders of Common Stock will be entitled thereto) or for determining rights to vote, if any, in respect of the matters referred to in (a) above; and (2) in the case of the matters referred to in (b) and (c) above at least three (3) days prior written notice of the date when the same will take place (and specifying the date on which the holders of Common Stock will be entitled to exchange their Common Stock for securities or other property deliverable upon the occurrence of such event). 3.2 No Stockholder Rights or Liabilities. Except as provided in this Warrant, the Holder will not have any rights as a stockholder of the Company until the exercise of this Warrant. Absent an affirmative action by the Holder to purchase the Shares, the Holder shall not have any liability as a stockholder of the Company. 3.3 Closing of Books. The Company will at no time close its transfer books against the transfer of this Warrant or of any Shares issued or issuable upon the exercise of this Warrant in any manner which interferes with the timely exercise of this Warrant. ARTICLE 4. MISCELLANEOUS. 4.1 Term. This Warrant is exercisable in whole or in part at any time and from time to time on or before the earlier of 5:00 pm GMT on the tenth (10th) anniversary of the Issue Date. 4.2 Legends. This Warrant and the Shares (and the securities issuable, directly or indirectly, upon conversion of the Shares, if any) shall be imprinted with a legend in substantially the following form: THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAW OR, IN THE OPINION OF LEGAL COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS EXEMPT FROM REGISTRATION. + + + + + +13 4.3 Transfers. This Warrant and the Shares issuable upon exercise of this Warrant (and the securities issuable, directly or indirectly, upon conversion of the Shares, if any) may not be transferred or assigned in whole or in part without compliance with applicable federal and state securities laws by the transferor and the transferee (including, without limitation, the delivery of investment representation letters and legal opinions reasonably satisfactory to the Company, as reasonably requested by the Company). After compliance with all restrictions on transfer set forth in this Section 4.3, and within a reasonable time after the Company's receipt of an executed assignment agreement, the transfer shall be recorded on the books of the Company upon the surrender of this Warrant, properly endorsed, to the Company at its principal offices, and the payment to the Company of all transfer taxes and other governmental charges imposed on such transfer. In the event of a partial transfer, the Company shall issue to the new holders one or more appropriate new warrants. 4.4 Notices. All notices and other communications from the Company to the Holder, or vice versa, shall be deemed delivered and effective when given personally or mailed by first-class registered or certified mail, postage prepaid, at such address as may have been furnished to the Company or the Holder, as the case may (or on the first business day after transmission by facsimile) be, in writing by the Company or such Holder from time to time. Effective upon receipt of the fully executed Warrant, all notices to the Holder shall be addressed as set forth on the signature page hereto until the Company receives notice of a change of address in connection with a transfer or otherwise. Notice to the Company shall be addressed as set forth on the signature page hereto until the Holder receives notice of a change in address. 4.5 Waiver. This Warrant and any term hereof may be changed, waived, discharged or terminated only by an instrument in writing signed by the party against which enforcement of such change, waiver, discharge or termination is sought. 4.6 Counterparts. This Warrant may be executed in counterparts, all of which together shall constitute one and the same agreement. 4.7 Governing Law. This Warrant shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to its principles regarding conflicts of law. Please indicate your acceptance of these terms by countersigning where indicated below. Slinger Bag Inc. Name: Title: Agreed and accepted: Aitan Zacharin + + + + + +14 Appendix 1 SLINGER BAG INC. EXERCISE NOTICE Reference is made to the Warrant Agreement dated 30 April 2020 between Slinger Bag Inc. (the "Company") and Aitan Zacharin (the "Warrant Agreement"). In accordance with and pursuant to the Warrant Agreement, the undersigned hereby elects to exercise the Warrant to purchase shares of common stock of the Company as set forth below. Capitalized terms used but not defined herein have the meanings assigned to such terms in the Warrant Agreement. Date of Exercise: __________________________________________________ Number of shares of ordinary/common (or its equivalent) stock to be purchased:________________________________ Please issue shares of common stock in the following name and to the following address: Issue to: _________________________________________ Address: _________________________________________ Telephone Number: ________________________________ Email address: _________________________________ Holder: __________________________________________ By: Title: \ No newline at end of file diff --git a/full_contract_txt/SLOVAKWIRELESSFINANCECOBV_03_28_2001-EX-4.(B)(II).3-Maintenance and support contract for SICAP(R) modules.txt b/full_contract_txt/SLOVAKWIRELESSFINANCECOBV_03_28_2001-EX-4.(B)(II).3-Maintenance and support contract for SICAP(R) modules.txt new file mode 100644 index 0000000000000000000000000000000000000000..f12aaf727aa53f71f1b4a990ccb14832b310df77 --- /dev/null +++ b/full_contract_txt/SLOVAKWIRELESSFINANCECOBV_03_28_2001-EX-4.(B)(II).3-Maintenance and support contract for SICAP(R) modules.txt @@ -0,0 +1,505 @@ +Exhibit 4(b)(ii).3 + + [LOGO] sicap + + Maintenance and support contract for SICAP(R) modules PPB, VCA and OTA + + dated 10 October 2000 + + This contract replaces in full the Annex 7 "Maintenance and Support for SICAP(R) modules PPB, VCA and OTA and Sun Hardware" which was an integral part of the original Swisscom PURCHASE & LICENSE CONTRACT, made effective on 06 April 1998. + +concluded between: EuroTel + + Bratislava a.s., Stefanikova 17, PO Box 54, 838 01 Bratislava 38, Slovakia and Sicap Ltd, Bernstrasse 34, 3072 Ostermundigen, Switzerland. + + [LOGO] sicap + +M&S contract -------------------------------------------------------------------------------- + + Table of contents + +1 INTRODUCTION 4 + + 1.1 Standard service 4 + + 1.2 Over all responsibilities 4 + + 1.3 Additional service on request (as per clause 5) 5 + +2 PROCEDURES FOR SUPPORT 5 + + 2.1 Hotline ISC SICAP(R)(Case of incidents) 5 + + 2.2 Procedures for incidents 5 + + 2.3 Main flowchart 6 + +3 RESPONSE TIME 8 + + 3.1 Response time for hotline 8 3.1.1 Working hours at Sicap Ltd 8 + + 3.2 Emergency priority 8 + +4 CHANGE MANAGEMENT 9 + + 4.1 Responsibilities 9 + + 4.2 Procedures 9 + +5 ADDITIONAL SUPPORT 9 + + 5.1 Remote support outside working hours 10 + + 5.2 On-site support 10 + +6 PRICING 10 + + 6.1 Pricing for standard service 10 + + 6.2 Pricing for additional support 11 + +7 GENERAL TERMS AND CONDITIONS FOR MAINTENANCE AND SUPPORT 12 + + 7.1 Introduction 12 + + [LOGO] sicap + +M&S contract -------------------------------------------------------------------------------- + + 7.2 Definitions 12 + + 7.3 Remuneration 13 7.3.1 Prices 13 7.3.2 Price adjustments 13 7.3.3 Costs and expenses 13 + + 7.4 Co-operation by EuroTel 14 + + 7.5 Term and termination 14 + + 7.6 Liability 15 + + + + + + 7.7 Assignment 15 + + 7.8 Changes to the contract 15 + + 7.9 Counterparts 16 + + [LOGO] sicap + +M&S contract -------------------------------------------------------------------------------- + +1 Introduction + + Sicap Ltd provides to EuroTel a standard service for the SICAP(R) PPB, VCA and OTA modules. + + EuroTel can also request additional support which is not part of the offered standard support and is subject to a separate quotation and ordering procedure as described in Article 5. + +1.1 Standard service + + The following services are included for the SICAP(R) PPB, VCA and OTA modules + + o HotLine support (resolving of incidents) + + o 20 hours telephone support (during office hours) per month. This support includes every necessary support for the SICAP(R) PPB, VCA and OTA (no accumulation of unused hours) + + o Remote support via ISDN line (establishment and communication costs to be paid by customer). Security can be guaranteed under the following conditions: Firewall, only outgoing connections allowed + + o Change Management + + The following service is charged: + + o Installation costs if on-site support is required + + This Maintenance and Support contract does not include the following cases: + + Bugs or problems in third party software or middleware, like for example Veritas Cluster, Oracle, not-correct DB-management, faults of EuroTel's system management, hidden modification and/or "foreign" developments/adaptations of the SICAP application and/or the entire prepaid system. Misuse will be charged at cost. + +1.2 Over all responsibilities + + EuroTel is responsible for the initial fault tracing within the entire prepaid system including first level maintenance, Sicap Ltd for second level maintenance, as described under clause 1.1. + + First level of maintenance means all day by day activities in order to have the entire prepaid system running under normal condition including application administration, dB administration and system administration (hardware & operating system). + + For second level of maintenance are intended all the activities needed to have the SICAP(R) application running under unexpected conditions like bugs, unexpected performance limitations, etc. (HW configuration and any changes to be confirmed by Sicap Ltd) + + The clause 2.2 defines the procedure, which will allow EuroTel to qualify problems within its own support organisation in order to achieve problem resolution with Sicap Ltd support. + + [LOGO] sicap + +M&S contract -------------------------------------------------------------------------------- + + EuroTel will ensure that its personal is adequate trained to support the entire SICAP(R) prepaid application. + +1.3 Additional service on request (as per clause 5) + + o On-site support o Remote support (not covered by Hotline) o Training after acceptance + +2 Procedures for support + +2.1 Hotline ISC SICAP(R) (Case of incidents) + + The HotLine can be reached as follows: + + Phone: + + +41 878 807 387 (24 hours, 7 days a week) + + + + + + Fax: + + +41 41 360 10 29 + + Trouble Ticket: + + http:www.swissgsm.ch/gnats/SKEUROTEL + + (WEB based "GNATS problem report system", used by ISC, Lucerne) + + EuroTel defines up to 5 system administrators from their own staff. They must be trained for the following modules: + + o SICAP(R)VCA o SICAP(R)PPB o SICAP(R)OTA + + Only these system administrators have the permission to use the HotLine and the "GNATS tool". + +2.2 Procedures for incidents + + According to the priority request of EuroTel, ISC SICAP(R) (Installation and Service Center) will contact the responsible engineer from Sicap Ltd with its Subcontractor(s) immediately. + + The following procedures are applicable: + + 1. After the discovery of an incident, ISC SICAP(R) has to be notified without delay by the Web based "GNATS trouble ticket tool" and by phone (called HotLine). + + [LOGO] sicap + +M&S contract -------------------------------------------------------------------------------- + + 2. EuroTel shall use the HotLine number to report every incident. Together with notification of the HotLine the following information has to be provided: + + o Date and time of incident occurrence o User domain, site domain, application domain o Configuration item detail and a full and accurate description of the incident o Priority of Incident + + 3. On request from Sicap Ltd, EuroTel has to provide the following supplementary information: + + o SICAP(R) modules VCA- or PPB- or OTA-logfile o System logfiles o all necessary information from the crashed system in electronic way (if possible ) like memory dumps. + + 4. On request from Sicap Ltd, EuroTel has to open the ISDN remote access to the system to ISC SICAP(R) + +2.3 Main flowchart + + [LOGO] sicap + +M&S contract -------------------------------------------------------------------------------- + + -------------------- --------- --------- System Administrator \ \ /Project manager ---- Incident ----- Priority -------------------- / --------- /--------- | | | ----------------|---------------- &sbsp; | | | | --------- ------- -------------- ----------- GNATS Incidents [GRAPHIC] HotLine trouble ticket Information --------- ------- -------------- ----------- | | | | -------------- | RFC / | (request for ------- | change) \ | ------------ ---------- -------------- ---------------\ ISC SICAP(R) [GRAPHIC] | | |------- ------------ ---------- -------------- | | / | GNATS ---------------- | -------------- | -------- | | Response | | -------- -------------- / | | Quotation -------| | (schedule & \ | delivery plan) | -------------- | + + + + + + | -------- | Problem | detected | -------- | | | ----------|----------- | | | | | Problem ------- ------- ----------- | fixing On-site Remote Explanation | & action action with Call, | Installation E-Mail, Fax | ------- ------- ----------- | | | | | | --|-------|------------- | | | | --------- -------- -------------- Quotation \ Change \ Problem solved accepted --------------- accepted ---- --------- / -------- / -------------- + + [LOGO] sicap + +M&S contract -------------------------------------------------------------------------------- + +3 Response time + +3.1 Response time for hotline + + The Response Time during the HotLine availability hours shall be the following: + + -------------------------------------------------------------------------- Priority of reques Availability Response Time -------------------------------------------------------------------------- emergency 24 hours, 7 days a week 4 hours -------------------------------------------------------------------------- high during working hours 4 hours -------------------------------------------------------------------------- medium during working hours next working day -------------------------------------------------------------------------- low during working hours day after next working day -------------------------------------------------------------------------- + + It is up to EuroTel to decide which priority occurs. In case of an obvious misuse, Sicap Ltd has the right to charge the costs. + + Sicap Ltd will perform every possibility to make the system running as soon as possible. Staff of EuroTel must be on-site on request of Sicap Ltd. + +3.1.1 Working hours at Sicap Ltd + + The working hours for Sicap Ltd, ISC are: + + 08.00h - 18.00h except Saturday, Sunday and public holidays in Switzerland. + + Public holidays in Switzerland are: + + New Year January 1st Berchtoldsday January 2nd St. Joseph's day (date is not fixed) Good Friday Friday before Eastern Easter Monday Monday after Eastern Ascension day Thursday, 10 days before Whitsuntide White Monday Monday after Whitsuntide Corpus Christi (date is not fixed) National Holiday August 1st Assumption August 15th St. Leodegar October 2nd All Saints November 1st Immaculate Conceptions December 8th Before Christmas day December 24th after 12:00 am Christmas day December 25th Boxing day December 26th Sylvester December 31st after 12:00 am + +3.2 Emergency priority + + In an emergency case Sicap Ltd shall do every effort to make the SICAP(R) application running within 24 hours after response. This also includes to find temporary solution (work around) until the definitive acceptable solution is implemented. + + [LOGO] sicap + +M&S contract -------------------------------------------------------------------------------- + + The following standard procedure shall apply in such a case: + + emergency case happens: + + + + + + + 4 hours: Response from ISC + 10 hours: SICAP(R) application SW problem detected + 10 hours: SICAP(R) application SW problem solved. + + If Sicap Ltd is not successful within this time, Sicap Ltd's responsible shall come on-site with the next available flight or train and manages the recovery process on-site. + + During the whole process the system responsible of EuroTel must be on-site and work according to the instructions of Sicap Ltd. + +4 Change management + + All changes in the functionality of the SICAP(R) application of EuroTel must be proceeded by a Request for Change (RFC). + + A RFC can be originated by Sicap Ltd or EuroTel and can relate to any component in the SICAP(R) application. + + Changes can consist of: + + o Patches o Releases (also named upgrades) + +4.1 Responsibilities + + Under Change Management, Sicap Ltd has the responsibility to: + + o collect and assess RFC's, resulting in a quotation and a schedule to EuroTel o co-ordinate and communicate about progress on a weekly basis. + + EuroTel has the responsibility to: + + o accept or decline the quotation and the delivery plan o accept the implemented change + +4.2 Procedures + + o All communication concerning changes shall be in writing or entered in the ISC trouble ticketing system (GNATS) o All RFC's shall be addressed to Sicap Ltd o After placing an order based on Sicap Ltd's quotation, Sicap Ltd implements the change according to the agreed schedule. + +5 Additional support + + [LOGO] sicap + +M&S contract -------------------------------------------------------------------------------- + + Sicap Ltd can, on a case by case basis, provide support which is tailor made to EuroTel's requirements. This support is not part of the standard service and subject to availability and a separate quotation. + +5.1 Remote support outside working hours + + EuroTel can request Remote Support outside working hours, e.g. for installations, new releases, reconfiguration, migration activities. The written request must be received by Sicap Ltd at least 10 working days prior to its intended implementation. After confirmation, Sicap Ltd can provide a detailed planning after consultation with EuroTel, including a description of the service to be performed. + +5.2 On-site support + + In case Remote support is not feasible or in case of explicit request from EuroTel in certain cases Sicap Ltd can provide EuroTel with on-site support. Such support is subject to a separate quotation by Sicap Ltd and mutual agreement between both parties. + +6 Pricing + +6.1 Pricing for standard service + + -------------------------------------------------------------------------- Description for annual fee after the annual fee for 0-50'000 subscriber initial period the first year (during warranty period), beginning with launch of service -------------------------------------------------------------------------- + + SICAP(R) modules VCA, 151'440.-- CHF not applicable PPB & OTA + + -------------------------------------------------------------------------- + + -------------------------------------------------------------------------- Additional price annual fee after the annual fee for the for each further lot of 50 000 initial period first year (during &sbsp; warranty period), beginning with + + + + + + launch of service -------------------------------------------------------------------------- + + SICAP(R) modules VCA, PPB & OTA 49'500.-- CHF not applicable + + -------------------------------------------------------------------------- + + o Additional lots of licenses shall just be charged from the beginning of each six month period. + + [LOGO] sicap + +M&S contract -------------------------------------------------------------------------------- + +6.2 Pricing for additional support + + -------------------------------------------------------------------------- Support service Price -------------------------------------------------------------------------- within Sicap Ltd working hours CHF 235.-- / hour -------------------------------------------------------------------------- outside Sicap Ltd working hours CHF 352.50 / hour -------------------------------------------------------------------------- Travel and accommodation expenses at cost -------------------------------------------------------------------------- + + [LOGO] sicap + +M&S contract -------------------------------------------------------------------------------- + +7 General terms and conditions for maintenance and support + +7.1 Introduction + + These General Terms and Conditions are applicable for the maintenance and support services based on Service Levels Description which Sicap Ltd provides for its SICAP(R) System. No deviations from these General Terms and Conditions shall be valid unless expressly agreed in writing. + +7.2 Definitions + + SICAP(R) software: + + Specific software which has been supplied by Sicap Ltd + + SICAP(R) module: + + Specific software component which is a part of the complete SICAP(R) Software, but could be integrated separately or not + + System: + + Combination of third party hardware/software and SICAP(R) Software by Sicap Ltd + + Change management: + + Management of change requests + + Configuration item: + + Component characteristic definition, as part of the system, which has been defined for the customer specification + + Incident: + + A deviation from the normal behaviour of the System: + + o Emergency Priority Incident Critical, complete HA-System failure or a major impact on prepaid functionality. Priority Incident Incident causing a major impact on the SICAP(R) System's functionality. Conditions that prevent EuroTel normal business operations from being carried out in timely manner. o Medium Priority Incident Incident causing a partial or minor impact on the System's functionality o Low Priority Incident Incident having a low impact on the System's functionality such as screen or report layout changes. + + Patch: + + A minor correction or adaptation to the SICAP(R) application software. + + Problem: + + A condition of the system, identified through incident(s) which indicates an error for which the cause is yet unknown. + + Release / upgrade: + + + + + + A consistent set of software which provides major improvement and/or extensions to the previous software on the System. + + [LOGO] sicap + +M&S contract -------------------------------------------------------------------------------- + + Response time: + + The time between the receipt of the notification by Sicap Ltd of an incident or problem and the initiation by the HotLine of a solution for the incident or problem. + + Subcontractor: + + A subcontractor of Sicap Ltd, supplying and supporting hardware and/or software for the SICAP application. + + Third party: + + A party not being Sicap Ltd, supplying hardware and/or software for the system. + + Working days/hours: + + Mondays to Fridays during Sicap Ltd's regular office hours (8.00h - 18.00h), except public holidays in Switzerland, as specified under clause 3.1.1. + +7.3 Remuneration + + The General Terms and Conditions of the original Swisscom Purchase and License Contract shall also be valid for Maintenance and Support. + +7.3.1 Prices + + The total price for the selected service under the Maintenance and Support contract is listed in chapter 6. Maintenance and Support fees are payable semi-annually in advance. All prices are in CHF and exclusive of value added tax that has to be paid in the Slovak Republic. + +7.3.2 Price adjustments + + Prices are subject to yearly adjustments. Sicap Ltd may send a new offer. The offer shall be sent two month prior to the beginning of the dedicated next year. + +7.3.3 Costs and expenses + + Prices quoted are exclusive of travel, accommodation expenses made by Sicap Ltd personnel under this Maintenance and Support contract. Such costs and expenses will be charged according to the effective costs. + + In the event Sicap Ltd personnel is required to travel to EuroTel's premises under this maintenance and support contract, but is not able to perform the required services due to reasons beyond the control of Sicap Ltd, which means no physical access to the system or force major as well as for support cases not included under standard service, as per clause 1.1, then EuroTel shall pay all costs and expenses (e.g. hours, travel and accommodation expenses). + + All payments due under this Maintenance and Support contract shall be due and payable 30 days after the invoice date, with the first invoice to be issued on the date this Maintenance and Support contract comes into full force and effect. + + [LOGO] sicap + +M&S contract -------------------------------------------------------------------------------- + + If any payment is not received by Sicap Ltd on the date or dates, as laid down in this clause, or as may be further agreed upon by the parties, then Sicap Ltd has the right to suspend the services to EuroTel until payment has been received. Before suspending the services to EuroTel, a notification from Sicap Ltd will be given. + + In the event of a suspension of services by Sicap Ltd, as a result of a delay or lack of payment by EuroTel, Sicap Ltd will not be responsible for any damages resulting from this suspension. + +7.4 Co-operation by EuroTel + + EuroTel shall always give Sicap Ltd full co-operation and provide Sicap Ltd in good time with required data or information useful and necessary to the proper execution of the Maintenance and Support contract. + + EuroTel shall be responsible to maintain adequate climatic conditions in the spaces where the SICAP(R) systems is placed, such in accordance with the site specifications as mentioned in the Purchase and License Contract for the system. + + EuroTel shall prevent: + + + + + + o Installation deficiencies (unstable electricity supply network or others) that result from the non-observance of the installation standards of the Sicap Ltd equipment o The use of degraded or inappropriate consumable and accessories, contrary to the manufacturer's specifications o Negligence, carelessness or improper use on the part of EuroTel, specifically, the dropping of the equipment or the existence of foreign objects inside the equipment; o Incompatibilities resulting from modifications, repairs or maintenance carried out by personnel not belonging to Sicap Ltd and/or third party, or the connection of equipment not supplied or approved by Sicap Ltd. + + EuroTel shall grant access to Sicap Ltd or third party personnel to EuroTel's site in question, provided that this personnel abides by the security rules of EuroTel. Sicap Ltd or third party personnel will always be accompanied by a representative of EuroTel, if so required by EuroTel. + + EuroTel shall provide Sicap Ltd with an actual list stating the system administrators and how they can be reached. + +7.5 Term and termination + + This contract replaces in full the Annex 7 "Maintenance and Support for SICAP(R) modules PPB, VCA and OTA and Sun Hardware" which is an integral part of the original Swisscom PURCHASE & LICENSE CONTRACT, made effective on 06 April 1998. + + It shall be effective on 06 October 2000 and shall have a duration of two years. + + The prices remain valid for the first 12 months. + + After this period, Sicap Ltd reserves the right to adjust the prices annually. The offer must be submitted three (3) months in advance and EuroTel may decide within one (1) month to prolong or terminate this maintenance and support contract. If EuroTel doesn't react in writing, the new offer shall be considered as accepted. + + [LOGO] sicap + +M&S contract -------------------------------------------------------------------------------- + + After the initial period of two years, the maintenance and support contract shall be automatically renewed for a period of one year on each renewal date, unless one of the parties terminates the maintenance and support contract through written notification to the other party in the form of a registered letter with proof of receipt, at least six (6) weeks prior to the renewal date. There shall be no reimbursement of any paid fee. + + In case of a substantial breach of this maintenance and support contract by either party, which is not remedied within thirty days from the other party's notice thereof, the other party shall have the right to terminate this maintenance and support contract with immediate effect without juridical procedures. + + The termination or expiration of the maintenance and support contract for any reason whatever shall be without prejudice to any other right or obligation of any party hereto in respect of this maintenance and support contract which have arisen prior to such termination. + +7.6 Liability + + Sicap Ltd's liability for indirect loss, including consequential loss, loss of profit, lost savings and loss caused by interruption of operations is excluded. + + No right to damages shall ever arise unless EuroTel reports the loss to Sicap Ltd in writing as soon as possible after it has arisen. + +7.7 Assignment + + This maintenance and support contract is for the benefit of and binding upon each of the parties hereto and their respective successors and assigns. + + The rights and obligations under this maintenance and support contract may not be assigned in whole or in part by either party without the prior written consent by the other party. + + The parties may assign the rights and obligations under this maintenance and support Contract by written notice to a subsidiary. A subsidiary of a party is considered a company of which the party is holding a majority of the equities. + +7.8 Changes to the contract + + Except as otherwise specifically indicated herein, this maintenance and support contract will not be amended except by written agreement signed on behalf of the parties by their duly authorised representatives. + + At the end of each agreementual period, or at such time as mutually agreed + + + + + + by both parties, EuroTel has the option to select a different services, such with consequential price adjustments. + + [LOGO] sicap + +M&S contract -------------------------------------------------------------------------------- + +7.9 Counterparts + + IN WITNESS WHEREOF, the parties hereto have executed this contract in two (2) originals by their fully authorised representatives on the day and at the place written here below, each party receiving one (1) original hereof. For and on behalf of: + + -------------------------------- ----------------------------------- Thomas R. Berner Thomas Cancro Key Account Manager CFO / Procurator + + -------------------------------- ----------------------------------- Andreas Martschitsch Jozef Barta CEO (acting) CEO / Procurator + + Place: Place: + + Date: Date: \ No newline at end of file diff --git a/full_contract_txt/SMITHELECTRICVEHICLESCORP_04_04_2012-EX-10.26-FLEET MAINTENANCE AGREEMENT.txt b/full_contract_txt/SMITHELECTRICVEHICLESCORP_04_04_2012-EX-10.26-FLEET MAINTENANCE AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..3ff7f28fb70f2cb73ceabc771b2f932533694ee5 --- /dev/null +++ b/full_contract_txt/SMITHELECTRICVEHICLESCORP_04_04_2012-EX-10.26-FLEET MAINTENANCE AGREEMENT.txt @@ -0,0 +1,341 @@ +EXHIBIT 10.26 ***Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. FLEET MAINTENANCE AGREEMENT + + 1. Definitions 1.1 In this Agreement: 1.1.1 the following expressions have the following meanings unless inconsistent with the context: "the Act" means the Employment Rights Act 1996. "Additional Charges" means the charges to be calculated by SEV on a time and materials basis at the rates described in Clause 7 of this Agreement in respect of the provision of Excepted Services pursuant to Clause 6 of this Agreement. "Agreement" means this agreement including the Schedules and the appendix made between SEV and DCL "Bodywork" means, without limitation, the panels, doors, glazing, trim, seating and any custom built additions not supplied by the original Vehicle manufacturer "CDV" means an Engine powered car derived van included in this Agreement "Charger" means the battery charger and related equipment of an EGV. "Chassis" means the main frame, sub-frames and mounting brackets of the vehicle "Code of Practice" means the HMSO code of practice set out in the appendix "Commencement Date" means 16 October 2005. "Contracted Period" means the period during which this Agreement is in effect. "Contract Procedure Manual" means a separate operating manual that identifies procedures and documentation relevant to this Agreement. "DCL Financial Year" means the period of 12 (twelve) months commencing on the first day of each financial year of DCL during the term of this Agreement as notified by DCL to SEV in writing or as otherwise agreed between the parties in writing (and, in the + + DATED 13 October 2005 DCL + +DAIRY CREST LIMITED (Company no 2085882) whose registered office is at Claygate House, Littleworth Road, Esher, Surrey KT10 9PN SEV + +SEV GROUP LIMITED (company no 4463640) whose registered office is at Unit 95/2, Tanfield Lea Industrial Estate North, Stanley, Co Durham, DH9 9NX + + + + + + ***Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. absence of such notification or agreement, the period of 12 (twelve) months commencing on 1 April each year during the term of this Agreement). "EGV" means an electric powered goods vehicle included in this Agreement. "Employees" means the employees employed by SEV during the Contracted Period who provide the Maintenance Services, including but not limited to the Transferring Employees and/or the Future Transferring Employees "Employment Costs" means all salaries, wages, commissions, bonuses, all statutory contributions, holiday pay (including payment for accrued but untaken holiday), national insurance contributions, pension contributions made to or on behalf of an employee, taxation (including all income tax deductible under PAYE) and all other employment costs. "Engine" means an internal combustion engine consisting of the main engine block and head plus all the internal components thereof. "Excepted Services" means those services referred to in Clause 6.1 of this Agreement which do not fall within Maintenance Services. "Final Future Transferring Employees List" means the list of Future Transferring Employees who will transfer to DCL and/or a Replacement Supplier in accordance with Clauses 19 or 20 (as the case may be) upon the Termination Date. "Fleet Size" means the total number of Operational Vehicles and Spare Vehicles in use by DCL from time to time and included in this Agreement. "FTA" means Freight Transport Association or such other replacement association or organisation operating in the United Kingdom from time to time whose aims are to represent the freight transport industry generally "Future Maintenance Services" means any services which are the same as or similar to the Maintenance Services, which will be provided by DCL and/or any Replacement Supplier after the Termination Date. "Future Transfer Date" means the date(s) on which the Future Transferring Employees are transferred to DCL and/or any Replacement Supplier pursuant to Clauses 19 or 20 (as the case may be). "Future Transferring Employees" means any employee of SEV who is wholly or mainly assigned to work in the provision of the Maintenance Services immediately prior to the Termination Date and whose employment is liable to transfer to DCL and/or any Replacement Supplier pursuant to Clauses 19 or 20 (as the case may be). "Liabilities" includes without limitation all costs, expenses, losses, damages, claims, proceedings, awards, fines, orders (including, but not limited to, any order or notice issued by the Pensions Regulator) and other liabilities (including reasonable legal and other professional fees and expenses) whenever arising or brought 2 + + + + + + ***Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. "LGV" means an Engine powered large (over 7.5t gross vehicle weight) goods vehicle included in this Agreement. "Maintenance Agreement" means the agreement entered into by DCL and SEV on 28 March 1999. "Maintenance Charges" means the aggregate charge for the Maintenance Services calculated in accordance with Clause 3 of this Agreement. "Maintenance Rate" means the weekly charge levied by SEV to DCL tor each Vehicle included in this Agreement and set out in Schedule One. "Maintenance Services" means the provision of maintenance services as defined in Clause 4 of this Agreement. "MGV" means an Engine powered medium (over 3.5t but less than 7.5t gross vehicle weight) goods vehicle included in this Agreement. "Opening Fleet Size" means the Fleet Size on the later of the Commencement Date of the first day of any DCL Financial Year and stated in Schedule One "Operational Vehicles" means Vehicles from time to time that are in regular use in the course of DCL business "Permitted Sub-Contractor" means any person who SEV appoints to undertake work as all or part of the Maintenance Services pursuant to Clause 11 below. "PG9 Notice" means a PG9 Notice issued by VOSA. "Place of Repair" means any agreed location where the Vehicles are serviced or repaired "Place of Use" means any location within the local vicinity of the Site where the Vehicles are operated. "Provisional Future Transferring Employees List" means the list of Future Transferring Employees who SEV believes will transfer to DCL and/or a Replacement Supplier in accordance with Clauses 19 or 20 (as the case may be) upon the Termination Date. "Redundancy Costs" means in relation to each Transferring Employee the amount designated as such in Schedule Two and calculated as the sum of:- (i) the statutory redundancy payment (calculated in accordance with section 162 of the Act) to which such Transferring Employee would have been entitled had he been dismissed by reason of redundancy with effect from the Commencement Date; (ii) any contractual entitlement to additional redundancy or severance pay (including any such entitlement arising by virtue of custom and practice) which would accrue to such Transferring Employee were he dismissed in such circumstances. 3 + + + + + + ***Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. (iii) the contractual notice pay (or payment in lieu of notice) which would have been payable to such Employee in such circumstances together with any additional notice pay which would have been payable by virtue of section 86(1) of the Act. (iv) all income tax and national insurance contributions properly payable in connection with the payments set out in (i) to (iii) above but subject to variation in accordance with clause 11.7. "Regulations" means the Transfer of Undertakings (Protection of Employment) Regulations 1981 (as amended). "Replacement Supplier" means any person employed or engaged to provide to DCL services similar to the Maintenance Services provided prior to the Termination Date. "Retail Price Index" means the UK Index of Retail Prices (All Items) maintained by the Central Office of Information calculated by reference to the published figures in respect of such Index current at the last day of December in each year during the term of this Agreement. In the event of the abolition or a fundamental variation in the basis of the said Index prior to the date upon which the Retail Price Index is to be applied hereunder, the parties shall, at their mutual expense, obtain the opinion of an independent Fellow of the Institute of Chartered Accountants in England and Wales as to the increase which ought to be made (having regard to such varied or substituted index or indices as he considers appropriate) and the opinion of such accountant (who shall act as an expert and not as an arbitrator) shall be final and binding on the parties "Schedule One" means the Schedule One hereto setting out the variable terms of this Agreement and to be revised by SEV on the first day of each DCL Financial Year following which a signed copy of the new Schedule One shall be attached to each part of this Agreement. "SGV" means an Engine powered small (up to 3.5t gross vehicle weight) goods vehicle included in this Agreement. "Site" means the addresses of DCL premises where the Vehicles are stored when not in use. "Spare Vehicles" means Vehicles held in a maintained and roadworthy condition for occasional use by DCL "Surplus Vehicles" means Vehicles from time to time no longer in use by DCL either as Operational Vehicles or Spare Vehicles. "Termination Date" means the date on which this Agreement terminates pursuant to Clause 16 "Transferring Employees" means the persons employed by DCL who are providing the Maintenance Services or services which are the same or similar to the Maintenance Services immediately before the Commencement Date whose contracts of employment after the Commencement Date will be or are deemed effected between 4 + + + + + + ***Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. SEV and such persons under Regulation 5 of the Regulations and who are listed in Schedule Two. "Vehicle" means any vehicle included in this Agreement. "VOSA" means the Vehicle and Operator Services Agency 1.1.2 references to any statute or statutory provision include, unless she context otherwise requires, a reference to the statute or statutory provision as modified or reenacted and in force from time to time prior to the Commencement Date and any subordinate legislation made under the relevant statute or statutory provision in force prior to the Commencement Date; 1.1.3 references to persons will include bodies corporate, unincorporated associations and partnerships; 1.1.4 references to a document being "in the agreed terms" are to that document in the form agreed and for the purposes of identification initialled by or on behalf of DCL and SEV; 1.1.5 all obligations, representations and warranties on the part of two or more persons are entered into, given or made by such persons jointly and severally; 1.1.6 references to the singular include the plural and vice versa; 1.1.7 references to Clauses and Schedules are to Clauses of and Schedules to this Agreement, and references to paragraphs are to paragraphs in the Schedule in which such references appear; 1.1.8 the Schedules form part of this Agreement and will have the same force and effect as if expressly set out in the body of this Agreement; 1.1.9 the headings in this Agreement will not affect its interpretation; and 1.1.10 any phrase introduced by the term "include", including", "in particular" or any similar expression will be construed as illustrative and will not limit the sense of the words preceding that term. 1.2 SEV and DCL hereby expressly agree that this Agreement shall replace and take precedence over any terms set out in the Maintenance Agreement. Accordingly, SEV and DCL hereby agree that the Maintenance Agreement is deemed to have been terminated by them with effect from the date of this Agreement. 1.3 Within a period of three months of the Commencement Date, DCL shall enter into a master contract hire agreement with SEV (or SEV's nominated third party finance provider) in respect of the supply of all DCL's requirements for new small (up to 3.5t gross vehicle weight) goods vehicles for an initial period of 18 (eighteen) months from the Commencement Date. On completion of this initial 18 (eighteen) month period, and at each 18 (eighteen) month interval thereafter during the continuance of this Agreement, DCL will review the contracted rates and provided the rates remain within 5 + + + + + + ***Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. the same competitive framework as the original agreement, DCL will renew the master contract hire agreement for a further 18 (eighteen) months. 2. SEV's Obligations In consideration of the payment by DCL from time to time of the Maintenance Charges in accordance with the provisions of Clause 3 below SEV shall during the term of this Agreement. 2.1 provide the Maintenance Services in respect of the vehicles upon the terms and conditions of this Agreement and with all due skill, care and diligence using goods of satisfactory qualify and fit for the purpose; 2.2 ensure the Vehicles are in a roadworthy condition and comply with all relevant legal and statutory requirements so far as the same is possible by the provision of the Maintenance Services, however, SEV shall not be liable under this Clause 2.2 in the event that the Vehicles are not in a roadworthy conditions due to DCL breaching a term of its obligations under Clause 9 or the Code of Practice; 2.3 abide by the health and safety policy from time to time of DCL whilst working on DCL property (subject to the prior notification of any changes to the same by DCL to SEV); 2.4 advise DCL in writing in the event of a Vehicle not meeting its maintenance schedule for reason of being unavailable to SEV for Maintenance Services; 2.5 provide to DCL a defect reporting book and annual service schedule chart for each Site; 2.6 provide a "freefone' number for reporting out-of-hours breakdowns; 2.7 provide the following reports to DCL in a format as agreed with DCL; 2.7.1 weekly overdue service status current to date of printing; 2.7.2 monthly Vehicles serviced report; 2.7.3 monthly notification of any CDV, SGV, MGV or LGV predicted to exceed 25,000 miles per annum; 2.7.4 monthly fleet list of the Vehicles included in the Fleet Size for the purposes of calculating Maintenance Charges; 2.7.5 any further reports that may be reasonably requested by DCL from time to time; 2.8 provide suitable storage for vehicle records and reports of Maintenance Services for a period of 3 years from the date the Maintenance Services took place and allow DCL access to them on request and at the end of this period deliver said documents to a designated UK location as requested by DCL; 2.9 advise DCL in the event of SEV being aware of obsolete components that have a widespread usage on the Vehicles; 6 + + + + + + ***Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 2.10 use its reasonable endeavours to suggest and/or implement such new processes or procedures as may be deemed reasonable by SEV in the circumstances or as may be reasonably requested by DCL in order to ensure that the Maintenance Services are provided in an efficient and effective way. 3. Maintenance Charges 3.1 The Maintenance Charges shall be the aggregate charge during the continuance of this Agreement calculated calendar monthly in advance using the prevailing Fleet Size and the Maintenance Rate for each Vehicle included therein. 3.2 The Maintenance Charges shall not include the cost of any Excepted Services. 3.3 The Maintenance Charges shall be invoiced by SEV calendar monthly in advance and shall be payable by DCL within fourteen days of the invoice date. 3.4 SEV shall not be entitled to Maintenance Charges in respect of any Vehicle which is more than two weeks overdue for service inspection through no fault of DCL during the period from the week ending date when such inspection becomes two weeks overdue until the week ending date that the service inspection is duly carried out. DCL shall be entitled to receive a refund in respect of any such amounts that have already been paid and such refund to be made by credit note issued by SEV each week that the Vehicle remains overdue for service inspection. 3.5 Maintenance Charges shall be increased annually on the first day of each DCL Financial Year in line with the last published Retail Price Index and stated in Schedule One effective for the following year of this Agreement, a signed copy of which shall be attached to each copy of this Agreement. 3.6 Subject to a genuine dispute, SEV reserves the right to charge DCL interest in respect of the rate payment of any Maintenance Charges or Additional Charges due under this Agreement at the rate of 3% per annum above the base rate from time to time of Lloyds TSB Bank PLC from the due date therefor until payment (as well after as before any judgement binding on either party). 4. Maintenance Services The Maintenance Services shall comprise the provision by SEV during the continuance of this Agreement of the following: 4.1 servicing and inspections at intervals stated in Schedule One using the FTA report form for SGV, MGV, LGV and CDV and SEV's report form for EGV; 4.2 preparation and submission of SGV, MGV, LGV and CDV for the relevant annual VOSA test; 7 + + + + + + ***Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 4.3 recalibration and resealing of tachograph equipment on MGV and LGV to VOSA requirements; 4.4 in respect of transport refrigeration equipment on MGV and LGV up to eight years old, servicing and inspections at intervals stated in Schedule One and repairs as required; 4.5 in respect of tail-lift equipment on MGV and LGV up to eight years old, preventative maintenance inspections at intervals stated in Schedule One and repairs as required to the electrical and hydraulic systems but not to the main frame, sub-frames, platform or mountings; 4.6 labour and parts to make repairs to Vehicles and Chargers due to normal wear and tear; 4.7 tyre inspections every month, puncture repairs and replacement of tyres with equal to or less than 2mm of tread remaining and in the event of the Company failing to change a tyre with equal to or less than 2mm of tread remaining that is identified on the monthly inspection or which is not available for inspection and the Customer is not informed as such, issue a credit note to the Customer equal to two weeks Maintenance Charge for the Vehicle concerned; 4.8 transport to and from the Place of Repair; 4.9 respond to Vehicle breakdowns within two hours of receiving notification of the breakdown either by attending to the Vehicle if located at the Place of Use or by informing DCL of action to be taken if located at the Site. In the event of SEV failing to attend at the Place of Use within two hours then a senior representative of SEV will meet DCL to explain the reason for the failure. SEV shall undertake necessary repairs or where a repair cannot be completed, recover the vehicle back to the Site or Place of Repair and record the action taken in the defect reporting book; 4.10 battery topping (and removal of over-spill) at a maximum of fortnightly intervals for EGV; 4.11 replacement of light lenses, mirror glasses, heads and aims, number plates and vehicle charging connectors and parts thereof damaged through accident or driver abuse; 4.12 minor Bodywork repairs due to normal wear and tear in order to maintain Vehicles in roadworthy condition, specifically: 4.12.1 repairs to locks, catches, handles and hinges; 4.12.2 repairs to seats and seat frames; 4.12.3 repairs to window mechanisms (excluding glass); 4.12.4 minor repairs to remove sharp edges, straighten bent panels, refit bumpers and secure loose items. 8 + + + + + + ***Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 5. Times for Maintenance Services SEV will provide maintenance Services 24 hours a day Monday to Friday and until 6pm on Saturday (excluding Christmas Day). In the event of Maintenance Services being provided by SEV at DCL's request outside of this time frame, SEV will levy Additional Charges in respect of the work earned out at the rates set out in Schedule One. 6. Excepted Services 6.1 The Maintenance Services shall not include: 6.1.1 the transportation or relocation of the Vehicles other than as described in Clause 4.8; 6.1.2 repairs required due to the use (other than by SEV) of defective or inappropriate supplies or accessories; 6.1.3 repairs required due to any disaster affecting the Vehicles inducing without limitation fire, flood, water, wind, lightning, vandalism or burglary (other than as described in Clauses 4.11 and 4.12); 6.1.4 repairs required due to the neglect, misuse or abuse of the Vehicles by DCL, its employees or agents (other than as described in Clauses 4.11 and 4.12); 6.1.5 repairs required to rectify damage caused by continuing to operate a Vehicle with a serious defect that should reasonably have been recognised as such by DCL; 6.1.6 vehicle recovery from the Place Of Use to the Site (or any other location) due to a breakdown caused by a fault not covered by the Maintenance Services; 6.1.7 repairs or replacement of wheel rims; 6.1.8 repairs or replacement of CDV, SGV, MGV and LGV Engine, gearbox, prop shaft (excluding mountings) and drive axle repairs or replacement on Vehicles over six years old; 6.1.9 repairs or replacement of transport refrigeration equipment on EGV and SGV; transport refrigeration equipment Engine on MGV and LGV, and; repairs or replacement of transport refrigeration equipment on MGV and LGV more than eight years old; 6.1.10 repairs or replacement of tail-lift equipment on EGV and SGV, tail-lift main frame, sub-frames, platform and mountings on MGV and LGV and, repairs or replacement of tail-lift; equipment on any MGV or LGV more than eight years old; 6.1.11 daily Vehicle checks as specified in the Code of Practice and any damage caused by failing to carry out same; 9 + + + + + + ***Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 6.1.12 oils and fluids required to complete the daily Vehicle checks, 6.1.13 repairs to the Bodywork of the Vehicles other than as described in Clause 4.12; 6.1.14 repairs to the Chassis of the Vehicles; 6.1.15 repairs to the Bodywork as described in Clause 4.12 for a period of thirteen weeks from the Commencement Date; 6.1.16 damage or failure caused by corrosion of the Bodywork or Chassis; 6.1.17 upgrades, conversions and retrofits required due to the obsolescence of the original components used by the vehicle manufacturer; 6.1.18 repainting (other than to avoid leaving exposed bare metal following repairs described in Clause 4.12.4) or refurbishing of the Vehicles; 6.1.19 cleaning of the Vehicles save as necessary to complete the Maintenance Services; 6.1.20 traction battery (including boxes and connectors) replacement, maintenance (other than as described in Clause 4.10) and repair; 6.2 SEV shall upon request by DCL provide all or any of the Excepted Services but shall be entitled to charge for the same by levying Additional Charges in the manner described in Clause 7. 6.3 Without prejudice to Clause 6.2, SEV shall be entitled to levy Additional Charges in the manner described in Clause 7 if Maintenance Services are provided at DCL request in circumstances where it is agreed that DCL request was unnecessary. 7. Additional Charges 7.1 Rates for Additional Charges shall be increased annually in line with the last published Retail Price Index on the first day of each DCL Financial Year and stated in Schedule One effective for the following year of this Agreement. 7.2 Additional Charges shall be levied by SEV on completion of Excepted Services within fifteen working days otherwise DCL shall have no obligation to pay the Additional Charges. The Additional Charges shall be payable by DCL within fifteen working days of receipt of the invoice. 7.3 Additional Charges for labour and travelling time shall be levied at the rates stated in Schedule One. 7.4 Transportation of Vehicles on SEV transport shall be levied on a time plus mileage basis at the rates stated in Schedule One. 7.5 The time charged from the initial location of SEV transport to the point of collection and back shall be limited to a maximum of one hour each way 10 + + + + + + ***Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 7.6 Any CDV, SGV, MGV or LGV, reported monthly by SEV as described in Clause 2.7.3 and operating in excess of 25,000 miles per annum shall be subject to an Additional Charge, calculated on a pro-rata basis, levied annually on the first day of each DCL Financial Year 7.7 Subject always to Clause 2.1. SEV reserves the right to supply new, reconditioned or used replacement parts and materials in the performance of its duties hereunder. 7.8 New, used and reconditioned spare parts and materials used in the completion of Excepted Services shall be levied by SEV to DCL at a price agreed by DCL for each case. 7.9 Where SEV employs sub-contractors for Excepted Services, the Additional Charges shall be levied at the rates stated in Schedule One. 7.10 SEV shall have the consent of DCL to undertake Excepted Services without prior notification for which the Additional Charge does not exceed the amount stated in Schedule One and provided it is agreed that the Excepted Services were required; DCL accepts full liability for the payment thereof. Payment for Excepted Services in excess of the value stated in Schedule One that are completed without prior approval of DCL shall be payable in full only at the discretion of DCL 8. Fleet Size 8.1 The prevailing Fleet Size shall be recalculated by SEV and agreed by DCL on the last day of each calendar month for the purpose of calculating Maintenance Charges. 8.2 Spare Vehicles in the ratio of one Spare Vehicle to every ten Operational Vehicles (calculated by Vehicle category, and allowing for reasonable substitutes, across the whole fleet) shall be held at each Site and are included in this Agreement in respect of Fleet Size calculations. 8.3 The Fleet Size shall be allowed to fluctuate within a range defined as the Opening Fleet Size less ten percent to the Opening Fleet Size plus ten percent without penalty or notice. The Fleet Size, in respect of Maintenance Charges calculations shall only be allowed to exceed this range following either a revision of Schedule One agreed by SEV and DCL or on the first day of a DCL Financial Year. 8.4 DCL shall first offer all Surplus Vehicles that DCL wishes to sell for sale to SEV. Any Surplus Vehicle purchased by SEV shall be removed from DCL site within ten working days. Unless purchased by SEV, disposal of Surplus Vehicles shall be the responsibility of DCL. 8.5 Notwithstanding any other term of this Agreement, DCL shall within a period of five months of the Commencement Date reduce the number of MGV and LGV Vehicles in respect of which SEV is to provide Maintenance Services to a maximum of 52 Vehicles; 11 + + ***Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. so as to enable SEV to undertake appropriate redundancy consultation and selection processes with those Transferring Employees involved in the maintenance of such MGV and LGV Vehicles and where appropriate to effect the dismissal of those Transferring Employees on the ground of redundancy. 9. DCL's Obligations During the term of this Agreement, DCL shall: 9.1 pay SEV Additional Charges as required to ensure that any vehicle to be added to this Agreement after the Commencement Date is in a roadworthy condition, including bodywork as described in Clause 4.12. and capable of passing a VOSA inspection prior to inclusion in this Agreement; 9.2 use its reasonable endeavours to ensure the Vehicles are operated in accordance with the Vehicle manufacturers' instructions and for the purposes for which they were designed; 9.3 use its reasonable endeavours to ensure that daily Vehicle checks, in accordance with the Code of Practice are completed (and recorded daily in writing) and that tyre pressures, engine oil, coolant and windscreen washer fluid are maintained at the correct levels and topped up if necessary; 9.4 replace, at both DCL and SEV discretion and where practical, any blown bulbs or fuses using spares provided by SEV on a free of charge basis; 9.5 ensure that any faults or defects are reported without unnecessary delay to SEV using the procedure specified in the Contract Procedure Manual; 9.6 to provide and make use of a Spare Vehicle in the event of a Vehicle being unavailable for operation due to Maintenance Services; 9.7 if requested, in so far as is practical to do so, provide assistance to SEV to tow a Vehicle back to the Site or Place of Repair; + + + + + + 9.8 ensure that no alterations, modifications, repairs or maintenance to the Vehicles that directly affects SEV obligations under this Agreement, are carried out other than by SEV without prior consultation with SEV and such consent not to be unreasonably withheld; 9.9 provide a valid road fund licencse for each Vehicle; 9.10 provide a safe working area at each Site in which SEV personnel may work on the Vehicles; 9.11 provide a safe working area where batteries can be cleaned without contamination of the water course; 9.12 provide a reasonable amount of electricity and water to SEV whilst working on the Vehicles on Site at no charge to SEV; 12 + + + + + + ***Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 9.13 promptly notify SEV in writing in the event that a Vehicle is to be included within or removed from the scope of this Agreement 10. Access to Premises 10.1 DCL shall allow SEV and authorised sub-contractors reasonable access to any premises controlled by DCL in order to provide the Maintenance Services (the "Premises") and to the extent necessary for SEV to provide the Maintenance Services. The access shall be granted during the normal working hours for the relevant Premises. If access is required outside the normal working hours for the relevant Premises, SEV shall arrange an appointment in advance with DCL. 10.2 SEV shall make sure that all of its employees, agents and sub contractors attending the Premises: 10.2.1 carry and keep visible suitable means of identification; 10.2.2 comply with reasonable regulations applying to conduct at the Premises. 10.2.3 comply with lawful directions given by authorised personnel of DCL relating to conduct on the Premises. 10.3 SEV shall be liable for any damage caused to the Premises by its employees, agents, sub-contractors and invitees. 10.4 Unless otherwise agreed, SEV shall be responsible for property which it brings onto the Premises and shall remove it from the Premises when requested by DCL. 10.5 The use of the Premises is entirely at DCL's discretion and DCL may ask SEV to vacate the Premises or stop providing Maintenance Service from Premises from time to time by giving SEV at least 30 days' written notice. 10.6 SEV shall not be liable for the failure to provide Maintenance Services due to being unable to gain access to Vehicles through DCL exercising their rights under this Clause 10. 11. Transferring Employees 1l.1 DCL and SEV acknowledge and agree that, pursuant to the Regulations, the contracts of employment between DCL and the Transferring Employees (except in so far as such contracts relate to any occupational pension scheme as defined in Regulation 7 of the Regulations) will have effect after the Commencement Date as if originally made between SEV and the Transferring Employees. SEV and/or any Permitted Sub-Contractor will make such pension provisions in respect of the Transferring Employees as complies with its obligations under sections 257 and 258 Pensions Act 2004 and the regulations under these sections, namely the Transfer of Employment (Pension Protection) Regulations 2005. 13 + + + + + + ***Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 11.2 DCL and SEV agree that the following provisions of this Clause 11 will apply irrespective of whether or not the Regulations apply as a matter of law 11.3 All Employment Costs in relation to the Transferring Employees in respect of: 11.3.1 up to and including the Commencement Date (whether or not due for payment at that date) will be borne by DCL 11.3.2 after the Commencement Date up to and including the Termination Date will be borne by SEV; and will if necessary be apportioned on a time basis between SEV and DCL 11.4 DCL will indemnify and will keep SEV indemnified in full against all Liabilities arising directly or indirectly in connection with. 11.4.1 the employment or termination of employment by DCL of any of the Transferring Employees (whether or not terminated by notice and, if so terminated, whenever that notice expires) up to and including the Commencement Date; 11.4.2 any act, omission or default of DCL up to and including the Commencement Date in respect of the employment by DCL of the Transferring Employees; 11.4.3 DCL's failure to inform or consult as required under Regulation 10 and 10A of the Regulations except to the extent that any such action or claim (or any part of such action or claim) arises from any failure by SEV to give DCL the information required from SEV to enable DCL to comply with its obligations under Regulation 10(3) of the Regulations; 11.4.4 any claim by a Transferring Employee that such person is entitled for any reason to take benefits not relating to old age, invalidity or survivors pursuant to the terms of any pension scheme in which SEV is not then participating, or pursuant to the Transferring Employee's terms and conditions of employment prior to the Commencement Date; 11.4.5 any claim by any trade union, staff association or staff body recognised by DCL in respect of all or any of the Transferring Employees arising out of DCL's failure to comply with its legal obligations to such trade unions or staff associations or bodies; and 11.4.6 any claim by any former, existing or future employee of DCL (other than the Transferring Employees) against SEV concerning or relating to any matter whatever. 11.5 Subject to Clause 11.6. SEV will indemnify and keep DCL indemnified in full against all Liabilities arising directly or indirectly in connection with: 11.5.1 any Employment Costs arising in relation to the Contracted Period in relation to the Employees; 14 + + + + + + ***Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 11.5.2 the employment or termination of employment by SEV of any of the Employees (whether or not terminated by notice and, if so terminated, whenever that notice expires); and 11.5.3 any act, omission or default of SEV in respect of the employment by SEV of the Employees. 11.6 SEV has indicated to DCL that following the Commencement Date, it will undertake a review of the provision of the Maintenance Services and the services that SEV already provides to DCL, which are similar to the Maintenance Services, and it is possible that headcount reductions may be necessary within its workforce as a result of that review. To the extent that such headcount reductions are effected through compulsory redundancies which affect the Transferring Employees, DCL understands that SEV will seek to establish that such redundancies are for an economic technical or organisational reason entailing a change in the workforce. Accordingly, DCL agrees that (subject to Clause 11.7) in the event that SEV terminates the employment of any of the Transferring Employees on the ground of redundancy and:- 11.6.1 the date on which the applicable redundancy notice is issued falls on or within a period of 6 months commencing on and including the Commencement Date; and 11.6.2 a copy of such redundancy notice is served (in accordance with clause 32.1) upon DCL within the same period; then DCL will reimburse the Redundancy Costs validly incurred by SEV in association with such termination(s) to SEV within 14 days of receipt of an invoice from SEV detailing the name of the Transferring Employee, the effective date of termination of their employment and the date and amount of any payment of the Redundancy Costs (including a breakdown of PAYE deducted). 11.7 DCL will reimburse Redundancy Costs to SEV in accordance with Clause 11.6 up to a maximum total sum as set out in Schedule Two ("the Redundancy Cap"). However, in the event that the basis of calculation of the Redundancy Costs applicable to all or any of the Transferring Employees as stated in Schedule Two ("the Anticipated Redundancy Costs") is challenged (whether by one or more of the Transferring Employees or by any trade union, staff association or staff body recognised by DCL or SEV in respect of all or any of the Transferring Employees) with the result that the Anticipated Redundancy Costs are agreed by the parties or adjudged by a competent court or tribunal to be less than the actual Redundancy Costs ("the Actual Redundancy Costs"), DCL agrees to forthwith pay to SEV in addition to the Anticipated Redundancy Costs such sum as represents the difference between the Anticipated Redundancy Costs and the Actual Redundancy Costs; provided that DCL's liability in respect of such difference shall not exceed the sum of [***] [***] 11.8 SEV will for the purposes of its accounts and tax return consider whether any payment received from DCL under the terms of Clause 11.6 can be treated as a non taxable income receipt with a claim being made for the Redundancy Costs as deductible for corporation tax purposes. Provided SEV considers that there are reasonable grounds 15 + + + + + + ***Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. for submitting its tax return on this basis then upon acceptance by the HM Revenue and Customs of this treatment or upon expiry of the relevant time limit for the HM Revenue and Customs to raise enquiries in relation to the tax return covering the provision of the Maintenance Services SEV will pay to DCL an amount equal to the reduction in the SEV's corporation tax liability attributable to the deductibility of the Redundancy Costs within 14 days of such acceptance or expiry. 11.9 SEV shall only terminate the employment of any Transferring Employees under Clause 11.6 in the event that headcount reductions are necessary (as specified under Clause 11.6) and SEV has used all reasonable endeavours to try and find alternative employment for such employees within SEV. 11.10 SEV hereby undertakes to DCL that it will comply with all relevant legislation and case law and will use best practice in any redundancy process it undertakes in relation to the Transferring Employees where it intends to call upon or does call upon DCL to reimburse any Redundancy Costs so as to ensure that such dismissals are fair and reasonable in all the circumstances. 11.11 DCL acknowledges that SEV requested DCL to provide it with various employment details in relation to the Transferring Employees as set out in Schedule Three ("Transferring Employees Information") before: the Commencement Date DCL used all reasonable endeavours to ensure that it provided SEV with all the Transferring Employees Information and warrants that to the best of its knowledge and belief (having undertaken all reasonable investigations and conducted all relevant enquiries) the Transferring Employees Information was true complete and accurate when given and remains true, complete and accurate until the Commencement Date. 11.12 DCL acknowledges that SEV is relying on the warranty set out in Clause 11.11. 11.13 The rights and remedies of SEV in respect of any breach of the warranty set out in Clause 11.11 shall not be affected by completion of the transfer of the Transferring Employees, by any knowledge of SEV or its advisers, by the rescission or non-rescission of this Agreement, by any investigation made by or on behalf of SEV into the affairs of DCL or by SEV failing to exercise or delaying the exercise of any of its rights or remedies. 11.14 SEV hereby warrants to DCL that as at the date of this Agreement no claim is contemplated against DCL in relation to clause 11.11 11.15 DCL shall subject to clause 11.16 indemnify and keep SEV indemnified against any Liabilities incurred by SEV during a period of 12 months from the Commencement Date or any potential Liabilities of which SEV becomes aware during the period of 12 months from the Commencement Date as a result of a breach by DCL of the warranty set out in clause 11.11 provided that: 11.15.1 SEV promptly notifies DCL of any allegation of loss or damage within a period of 12 months from the Commencement Date. 16 + + + + + + ***Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 11.15.2 SEV makes no admission or prejudicial statement without DCL's consent (such consent not to be unreasonably withheld or delayed); 11.15.3 the parties conduct and settle all negotiations and proceedings in a manner which is mutually acceptable in the circumstances, both parties acting reasonably in the circumstances; and 11.15.4 SEV complies with its common law duty to mitigate its losses. 11.16 DCL shall not be liable to SEV under the provisions of this clause 11 for indirect loss, consequential loss or loss of profits. 11.17 DCL and SEV acknowledge that DCL may, in the normal course of its business, acquire various undertakings during the term of this Agreement ("New Undertakings") which may consist of (amongst other things) vehicles and employees involved in the maintenance and repair of such vehicles ("New Employees"). Accordingly, and in the event that; (i) DCL completes the acquisition of a New Undertaking and becomes the employer of the New Employees; (ii) DCL notifies SEV of its desire for SEV to provide such Maintenance Services in respect of such New Undertaking; (iii) SEV is prepared to provide such Maintenance Services in accordance with the terms of this Agreement; and (iv) the parties agree that the Now Employees are to be employed by SEV (whether in accordance with the Regulations or otherwise as the case may be) in order to enable SEV to provide such Maintenance Services. the parties agree to use all reasonable endeavors to effect and document the employment by SEV of the New Employees (again whether in accordance with the Regulations or otherwise as the case may be) and the inclusion of the applicable vehicles within the scope of this Agreement within such timescale as the parties may agree (both parties acting reasonably in the circumstances). For the avoidance of doubt, the parties agree that; 11.17.1 where the New Employees are to transfer to SEV in accordance with the Regulations then the terms of such transfer shall be in substantially the same form as that wording set out in this Agreement in respect of the Transferring Employees; and 11.17.2 whether the New Employees are to be employed by SEV pursuant to the Regulations or otherwise the agreement between SEV and DCL providing for their employment by SEV shell include provisions which are the same or substantially the same as clauses 18, 19 and 20 of this Agreement. 17 + + + + + + ***Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 12. Changes in Legislation In the event of changes in legislation taking place during the Contracted Period that directly affects DCL Vehicles, SEV shall seek a cost effective resolution and such costs incurred by SEV in, meeting the new legal requirements shall be met in full by DCL, either through Additional Charges or a revision of Schedule One. 13. Warranties and Liability 13.1 SEV does not warrant that the Maintenance Services will cause Vehicles to operate without breakdown or interruption. 13.2 SEV warrants and represents to DCL that: 13.2.1 all written information and materials given by SEV to DCL are, when given and so far as SEV is aware at the time, accurate in all material respects, 13.2.2 it has full right, power and authority to provide the Maintenance Services to DCL on the terms of this Agreement; 13.2.3 it will provide the Maintenance Services with the degree of skill, diligence, prudence, foresight and care which would reasonably be expected from a skilled, experienced and properly resourced person providing similar services to that of SEV in this Agreement in similar or the same circumstances, and 13.2.4 it will use all reasonable endeavours to make sure that, when complying with its obligations under this Agreement, it does not unreasonably interfere with the activities of DCL, its members, employees or agents. 13.3 All warranties and representations shall, unless otherwise expressly stated, continue in full force and effect during the term of this Agreement and shall survive termination. 13.4 Subject always to Clause 13.7, SEV shall indemnify DCL against all claims, demands, actions, costs and expenses (including legal costs and disbursements) which DCL incurs directly or indirectly as a result of any act, omission or default of SEV, its employees, officers, agents, sub-contractors, suppliers and invitees in respect of: 13.4.1 any breach of the warranties in Clause 13.2; 13.4.2 damage to real or personal property; 13.4.3 injury to persons, including injury resulting in death. 13.5 If and to the extent that a Vehicle breakdown is caused by SEV failure to meet its obligations described in Clause 2.1, SEV shall (subject always to Clause 13.7) indemnify DCL against any costs directly associated with and attributable to the breakdown in relation to the Vehicle concerned and the provision of a Spare Vehicle. 18 + + + + + + ***Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. SEV's liability under this Clause 13.5 shall be SEV's entire liability to DCL in relation to a Vehicle which breaks down. 13.6 SEV's entire liability in respect of the sums payable pursuant to the indemnities contained in Clauses 13.4 and 13.5 shall be limited to the annualised value of the Maintenance Charges calculated on the Commencement Date or the last anniversary thereof, unless SEV is insured in respect of such liability, in which case SEV's liability under Clauses 13.4 and 13.5 shall be limited to the extent of such cover. 13.7 Nothing in this Agreement shall limit either party's liability to the other for death or injury resulting from its own or its employees', agents' or sub-contractors' negligence or fraudulent misrepresentation. 14. Amendments Any provision of this Agreement may be amended with the written consent of both parties. 15. Duration of Agreement This Agreement shall commence on the Commencement Date and shall continue for an initial period of five years until terminated in the manner described in Clause 16 below. 16. Termination 16.1 Following expiry of the initial period described in Clause 15 above, DCL or SEV giving not less than six months notice in writing may terminate this Agreement. In addition, DCL may terminate this Agreement with effect from the 3rd, 4th or 5th anniversary of the Commencement Date by giving not less than six months notice in writing to SEV. During the notice period, all Clauses and provisions of this Agreement shall remain in effect. Any defects in Vehicles notified to SEV by DCL during the notice period shall be remedied prior to the end of this Agreement. If Schedule One has expired during the notice period then all Maintenance Charges and Additional Charges shall be charged at the rates shown in the last effective Schedule One increased in line with the last published Retail Price Index. 16.2 DCL or SEV may terminate this Agreement forthwith by notice in writing to the other if: 16.2.1 the other is in breach of this Agreement and shall have failed (where the breach is capable of remedy) to remedy the breach within 14 days of the date of a request in writing from the party not in breach requiring the breach to be remedied; 16.2.2 has a Receiver, Manager, Administrator or Administrative Receiver appointed over all or any part of its undertaking, assets or income resolution for its 19 + + + + + + ***Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. winding up or has a petition granted by any Court for its winding up or for an Administration Order. 16.3 DCL may terminate this Agreement with immediate effect if Dairy Crest and/or SEV (on behalf of Dairy Crest) receives more than three PG9 Notices in relation to the Vehicles or a Vehicle in the preceding 6 month period specifically caused by SEV failing to meet its obligations under this Agreement or in the event that SEV breaches the Codes Of Practice relevant to the Maintenance Services more than 3 times in the preceding 6 month period. 16.4 SEV shall remain liable for the repairs described in Clause 4.12 identified by DCL for a period of thirteen weeks from the end of the Contracted Period and shall provide such repairs on a free of charge basis. 16.5 From receipt of notice of termination of this Agreement. SEV agrees not to employ any person to work wholly or mainly in the provision of the Maintenance Services without the consent of DCL or any Replacement Supplier having first been obtained (provided that such consent is not unreasonably withheld or delayed). 16.6 All Employment Costs in relation to the Future Transferring Employees in respect of the period: 16.6.1 up to and including the Termination Date (whether or not due for payment at that date) will be borne by SEV; 16.6.2 after the Termination Date will be borne by DCL and/or any Replacement Supplier; and will if necessary be apportioned on a time basis between SEV and DCL and/or any Replacement Supplier. 16.7 SEV shall take all such steps as shall be necessary to agree with DCL and/or any Replacement Supplier a plan for the orderly hand-over of the Maintenance Services to DCL and/or any Replacement Supplier, such that the Maintenance Services or Future Maintenance Services can be carried on with the minimum of interruption and inconvenience to DCL and/or any Replacement Supplier and to effect such handover. 16.8 SEV shall with effect from the Termination Date, and until such time as the plan for the handover of the Services pursuant to Clause 16.7 has been fully implemented, SEV agrees to continue the provision of the Maintenance Services to DCL in accordance with the terms and conditions of this Agreement. 16.9 SEV shall with effect from the Termination Date immediately cease any publicity linking itself to, and any holding of itself out as being in any way linked with, DCL. 16.10 Termination in accordance with this Clause 16 shall not prejudice or affect a right or action which has accrued to either party. 20 + + + + + + ***Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 16.11 Any provisions which expressly or by implication are necessary for the enforcement or interpretation of this Agreement shall survive termination 17. Provision of Information at the Termination Date 17.1 Within 14 days of receipt of written notice from DCL in accordance with Clause 16 or as soon as reasonably practicable thereafter SEV shall, subject to the appropriate confidentiality undertakings being given, and further subject to any restrictions imposed by law including, without limitation, any obligation under the Data Protection Act 1998, provide DCL with; 17.1.1 SEV's Provisional Future Transferring Employees List: 17.1.2 all material terms and conditions of employment relating to the employment of the persons listed on SEV's Provisional Future Transferring Employees List and written job descriptions if such written job descriptions are in place: 17.1.3 a list of all other Employees who are engaged, or have beer engaged during the preceding six months, in the provision of the Maintenance Services, together with details of their roles and an explanation of why SEV does not consider that they will transfer under the Regulations (for example because SEV does not consider that the Regulations will apply at all or to them). such information together being "Staffing Information". 17.2 Where Staffing Information has been provided in accordance with Clause 17.1 and SEV makes or becomes aware of any material changes or discovers material new information SEV shall notify DCL, in writing, upon any such change or discovery. 17.3 SEV shall warrant and represent to DCL that to the best of its knowledge and belief any Staffing Information (including copies thereof) shall be complete and accurate in all respects and shall be kept complete and accurate. 17.4 Fourteen (14) days prior to any Future Transfer Date, SEV shall provide DCL with SEV's Final Future Transferring Employees List and shall warrant and represent that as at that Future Transfer Date: 17.4.1 SEV's Final Future Transferring Employees List shall be complete and accurate; 17.4.2 all the Future Transferring Employees are employed by SEV and no other person employed by SEV shall be working in or assigned to the provision of the Maintenance Services; and 17.4.3 it shall have disclosed to DCL, all material terms and conditions of employment relating the Future Transferring Employees. 17.5 From receipt of notice of termination of this Agreement; or in respect of the actual or proposed termination of SEV's provision of some (but not all) of the Maintenance 21 + + ***Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. Services, the date upon which either party notifies the other of such partial termination, SEV shall not, and will not, other than in the ordinary course of business (to include but not limited to any steps considered necessary by SEV to ensure compliance with the term of this Agreement) (or if not within the ordinary course of business. without the prior written consent of DCL, such consent not to be unreasonably withheld or delayed): 17.5.1 replace a material number of the employees on SEV's Provisional Future Transferring Employees List, deploy or assign any other person to perform the Maintenance Services or increase the number of such employees or terminate or give notice to terminate the employment or contracts of any persons on SEV's Provisional Future Transferring Employees List; or 17.5.2 make, propose or permit any material changes to the terms and conditions of employment of any employees listed on SEV's Provisional Future Transferring Employees List which may reasonably be viewed as detrimental from an employer's perspective or 17.5.3 increase the proportion of working time spent on the Maintenance Services by any of the Employees without the prior consent of DCL (which shall not be withheld unless the granting of consent would result in an increase in the overall number of Employees to be transferred under the Regulations to DCL and/or a Replacement Supplier); or 17.5.4 introduce any new contractual or customary practice (including for the avoidance of couot any payments on termination of employment) applicable to any person listed on SEV's Provisional Future Transferring Employees List, and SEV will promptly notify DCL of the period of notice given (by SEV) or received (from any person listed on SEV's Provisional Staff Future Transferring Employees or SEV's Final Future Transferring Employees List) regardless of when such + + + + + +notice takes effect. 17.6 Where SEV proposes to effect or effects (whether in the ordinary course of business or otherwise) any changes envisaged under Clause 17.5.2, SEV shall supply a copy and/or details of any such amendments at two monthly intervals prior to three (3) months before the Future Transfer Date and at monthly intervals thereafter uo to the Future Transfer Date to DCL. 18. Application of the Regulations 18.1 SEV and DCL anticipate that the Regulations will apply in respect of the termination of the Agreement and the subsequent transfer of the Maintenance Services to DCL and/or to a Replacement Supplier. However, should the Regulations not apply for whatever reason, SEV and DCL agree to nevertheless act in accordance with, and be bound by, the Regulations. 22 + + + + + + ***Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 18.2 With effect from the termination of this Agreement (for whatever reason), DCL shall procure the transfer of the Management Services either from SEV to DCL or from SEV to any Replacement Supplier 18.3 In the event that the Regulations do apply, the provisions of Clause 20 shall apply. 18.4 If the Regulations do not apply, the provisions of Clause 19 shall apply. 19. If the Regulations do not apply at the Termination Date 19.1 If the Regulations do not apply to the full or partial termination or expiry of this Agreement (for any reason) then the provisions of this Clause 19 shall apply. 19.2 DCL shall offer (or where applicable) procure that the Replacement Supplier offers employment to any employee of SEV who is wholly or mainly assigned to work in the provision of the Maintenance Service immediately prior to the Termination Date ("Future Agreed Transferring Employees"); such offer in each case to: 19.2.1 commence on the day immediately following the date on which the Agreement terminates, 19.2.2 be on terms no less favourable than the terms on which the Future Agreed Regulation Transferring Employees are engaged by SEV immediately before the termination of this Agreement; 19.2.3 be made in writing and copied to SEV 20. If the Regulations do apply at the Termination Date 20.1 If the Regulations do apply to the full or partial termination or expiry of this Agreement (for any reason) then DCL and SEV acknowledge and agree that, pursuant to the Regulations, the contracts of employment between SEV and the Future Transferring Employees (except in so far as such contracts relate to any occupational pension scheme as defined in Regulation 7 of the Regulations) will have effect after the Termination Date as if originally made between the DCL and/or any Replacement Supplier and the Future Transferring Employees. 20.2 DCL shall provide (or, if appropriate shall procure the provision by the Replacement Supplier of) such information as may be requested by SEV in order to comply with its duties of information and consultation under the Regulations and under sections 259-261 of the Pensions Act 2004. 20.3 SEV will from the Termination Date keep DCL and/or any Replacement Supplier indemnified in full against all Liabilities arising directly or indirectly in connection with: 20.3.1 SEV's failure to inform or consult as required under Regulation 10 of the Regulations except to the extent that any such action or claim (or any part of 23 + + + + + + ***Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. such action or claim) arises from any failure by DCL or any Replacement Supplier to give SEV the information required from DCL or any Replacement Supplier to enable SEV to comply with its obligations under the Regulations; 20.3.2 any claim by a Future Transferring Employee that such person is entitled for any reason to take benefits (other than benefits relating to old age, invalidity or survivorship) pursuant to the terms of any pension scheme in which DCL or any Replacement Supplier is not then participating, or pursuant to the Future Transferring Employee's terms and conditions of employment prior to Termination Date. 21. Step in rights 21.1 If SEV fails to provide part or all of the Maintenance Services in accordance with this Agreement in any material respect. DCL may notify SEV that it intends to exercise its rights under this Clause 21. DCL agrees that it shall provide SEV with notice of its intention to exercise this Clause and shall provide SEV with a reasonable opportunity to rectify the failure to provide Maintenance Services to the satisfaction of Dairy Crest. 21.2 DCL shall notify SEV of the reasonable costs to be incurred by DCL in the event that this Clause 21 is exercised by DCL. 21.3 If SEV does not substantially remedy the failure within a reasonable period of the notice referred to in Clause 21.1 (not to exceed 15 days), DCL may itself provide or may employ and pay a third party supplier to provide the Maintenance Services or any part of the Maintenance Services. DCL's reasonable costs in doing this may, at DCL's option, be deducted from any sums due to the SEV or shall be recoverable from SEV by DCL as a debt. 21.4 To the extent to which the Maintenance Services are being provided by DCL or a third party supplier under Clause 21.3, SEV will be relieved of its obligations to provide the Maintenance Services. SEV will not be liable for the acts or omissions of DCL or the third party supplier in providing the Maintenance Services. 21.5 DCL shall permit SEV to resume delivery of the Maintenance Services once it is satisfied on reasonable grounds that SEV will be able to resume delivery of the Maintenance Services in accordance with this Agreement. 21.6 SEV shall co-operate in all reasonable respects with DCL and any third party supplier engaged by DCL under this Clause. 22. Insurance 22.1 SEV shall maintain in force (at its own expense) for the term of this agreement and for six years after its termination: 24 + + + + + + ***Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 22.1.1 employer's liability insurance for the minimum amount of £5 million to cover injury (including death) relating to the provision of the Maintenance Services to DCL; and 22.1.2 comprehensive general liability insurance, including professional indemnity, public liability and product liability insurance, for the minimum amount of £5 million to cover injury (including death), loss and damage relating to the provision of the Maintenance Services to DCL. 22.2 The insurance policies referred to in Clause 22.1 shall be with a reputable insurer and shall not include unreasonable excesses which are unusual for this type of insurance. 22.3 Within 14 calendar days of a request by DCL, SEV shall provide evidence of the insurances which it is obliged to maintain under Clause 22.1. 23. Legal status SEV is an independent contractor and nothing in this Agreement shall be deemed to constitute a partnership or any employment relationship between the parties nor shall anything in this Agreement be deemed to constitute one party the agent of the other for any purpose. 24. Force Majeure 24.1 SEV shall not be liable for any breach of its obligations hereunder resulting from causes beyond its reasonable control including but not limited to fires, insurrection or riots, embargoes, inability to obtain supplies and raw materials due to strikes or market shortages (acknowledged by DCL) affecting the relevant third party suppliers, or regulations of any civil or military authority (an "Event of Force Majeure"). 24.2 If a default due to an Event of Force Majeure shall continue for more than eight wooks then the party not in default shall be entitled to terminate this Agreement on giving written notice to the other party. Neither party shall have any liability to the other in respect of the termination of this Agreement as a result of an Event of Force Majeure. However, any termination of this Agreement shall not affect any liability of DCL to discharge any Maintenance Charges and/or Additional Charges outstanding at that time. 25. Invalidity and Severability Each of the provisions contained in this Agreement shall be construed as independent of every other such provision, so that if any provision of this Agreement shall be found by any Court or administrative body of competent jurisdiction to be invalid or unenforceable the invalidity or unenforceability of such provision shall not affect the other provisions of this Agreement and all provisions not affected by such invalidity or unenforceability shall remain in full force and effect 25 + + + + + + ***Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. The parties hereby agree to attempt to substitute for any invalid or unenforceable provision a valid or enforceable provision that achieves to the greatest extent possible the economic, legal and commercial objectives of the invalid or unenforceable provision 26. Assignment and sub-contractors 26.1 Neither party shall be entitled to assign the benefit of this Agreement without the prior written consent of the other party nor shall such consent be unreasonably withheld. 26.2 SEV, with the consent of DCL and without incurring unnecessary expense, may sub-contract the performance of its obligations under this Agreement or any part thereof and such consent will not be unreasonably withheld. 26.3 SEV shall not engage agents or sub-contractors to provide the Maintenance Services (or any material part of the Maintenance Services) without DCL's prior consent and DCL's consent shall not be unreasonably withheld or delayed. 26.4 SEV shall remain responsible for obligations that are performed by agents or sub-contractors (and for the acts or omissions of agents and sub-contractors) as if they were acts or omissions of SEV. 27. Value Added Tax Save insofar as otherwise expressly provided, all amounts stated in this Agreement are expressed exclusive of value added tax and any value added tax arising in respect of any supply made hereunder shall on the issue of a valid tax invoice in respect of the same be paid to the party making such supply by the party to whom it is made in addition to any other consideration payable therefor. 28. Law and jurisdiction This Agreement shall be governed by and construed in all respects in accordance with the law of England and Wales and both parties submit to the exclusive jurisdiction of the English Courts. 29. Headings Headings to Clauses in this Agreement are for the purposes of information and identification only and shall not be construed as forming part of this Agreement. 30. Entire agreement 30.1 This Agreement, and the documents referred to in it, constitute the entire agreement and understanding of the parties and extinguishes any prior drafts, and all previous 26 + + + + + + ***Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. contracts, arrangements, representations, warranties of any nature whether or not in writing between the parties relating to its subject matter 30.2 Each of the parties acknowledges and agrees that in entering into this Agreement, and the documents referred to in it, it does not rely on, and shall have no remedy in respect of, any statement, representation, warranty or understanding (whether negligently or innocently made) of any person (whether party to this Agreement or not) other than as expressly set out in this Agreement 31. Third party rights A person who is not a party to this Agreement has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this Agreement but this does not affect any right or remedy of a third party which exists or is available apart from that Act. 32. General 32.1 Notices between the parties relating to this Agreement shall be in writing and shall either be delivered personally or sent by first class post or fax to the registered office for the time being of the recipient. Communications if delivered by hand shall be treated as received when delivered, if sent by first class post 48 hours after posting, if sent by air-mail post 72 hours after posting and if sent by fax when sent. Any notices that would be treated as received out of business hours (9.00 a.m. to 5.00 p.m Monday to Friday, excluding bank holidays) shall be deemed given on the next business day (Monday to Friday, excluding bank holidays). 32.2 Except as expressly provided under this Agreement, the rights and remedies contained in this Agreement are cumulative and are not exclusive of any other rights or remedies provided by law or otherwise. 32.3 A failure or delay by either party to exercise any right or remedy under this Agreement shall not be construed or operate as a waiver of that right or remedy nor shall any single or partial exercise of any right or remedy preclude the further exercise of that right or remedy. 32.4 A waiver by either party of any breach of or default under this Agreement shall not be considered a waiver of a preceding or subsequent breach or default. 32.5 A purported waiver or release under this Agreement is not effective unless it is a specific authorised written waiver or release. 27 + + + + + + ***Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. SCHEDULE ONE Effective 16 October 2005 to 31 March 2006 Opening Fleet Size: 2367 Maintenance Rate and Service Intervals: Vehicle Type Make/Model Service Interval Maintenance Rate Smith's Cabac/Consort EGV W&E Rangemaster & 4/40 Electricars E/F model 13 weeks [***] per week Ford Fiesta Van COV Ford Escort Van 13 weeks [***] per week Vauxhall Astra Van Ford Transit <3.5t GVW SGV LDV Convoy <3.5t GVW 13 weeks [***] per week Mercedes <3.5t GVW + +s t + + + + + + 28 + +MGV + +Leyland DAF with Fridge 3501-/7500kgs 6 weeks A/B/C [***] per week MGV + +Leyland DAF with T/L & Fridge 3501-7500kgs 6 weeks A/B/C [***] per week LGV + +Leyland DAF with Fridge 7501-14740kgs 6 weeks A/B/C [***] per week LGV + +Leyland DAF with T/L & Fridge 7501-14740kgs 6 weeks A/B/C [***] per week LGV + +Leyland DAF with Fridge 14740-18000kgs 6 weeks A/B/C [***] per week LGV + +Leyland DAF with T/L & Fridge 14740-18000kgs 6 weeks A/B/C [***] per week + + + + + + ***Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. Age related Discounts/Surcharges for SGV, MGV & LGV: + + Additional Charges: + + + + + + + + Age of Vehicle Discount/Surcharge from Weekly Charge Year 1 [***] discount + + + +Year 2 [***] discount + + + +Year 3 [***] discount + + + +Year 4 NIL + + + +Year 5 NIL + + + +Year 6 NIL + + + +Year 7 NIL + + + +Year 8 onwards [***] surcharge + + + + Provider Time Period Labour Rate Transport Rate Company 7am to 5pm Weekdays [***] per hour [***] per mile Company 5pm to 7am Weekdays [***] per hour [***] per mile Company Saturday [***] per hour [***] per mile Company Sunday & Bank Holidays [***] per hour [***] per mile + + Provider Invoice Value Plus Min Mark-up Max Mark-up Sub-contractor 7.5% [***] [***] + + Authority Level [***] Without prior authorisation + + + + + +29 + + ***Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. SCHEDULE TWO Transferring Employees + + + + + + ***Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. Redundancy Cap The parties agree that the Redundancy Cap referred to in Clause 11.7 is [***] [***] + + + + + + ***Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. APPENDIX Code of Practice on Acceptable Standards of Maintenance The Department of Transport accepts that many operators, particularly those new to the profession, are unaware of what is needed to meet the required standards, and have issued, in consultation with representatives of the industry a Code of Practice to provide guidance for operators on what is needed for good maintenance. The Code is entitled Guide to Maintaining Roadworthiness, and is published by HMSO. The Preface to the Code repeats the caveat in the Department's Guide to Operator Licensing that the ultimate test of an operator's maintenance system is the condition of his vehicles on the road. It assures operators that if their maintenance systems accord with the Code they will be acceptable to Traffic Commissioners, providing the resulting condition of their vehicles is satisfactory. However, it adds a rider that Traffic Commissioners remain free to require more stringent arrangements than those which the operator proposes. Advice contained in the code The Code offers much sensible advice on what is acceptable. It thus fills the gap which previously existed between the legal requirement for safe operation and the means by which this can be fulfilled. The Vehicle and Operator Services Agency (VOSA) is now much more specific than hitherto about these means. VOSA examiners have always been prepared to visit operators and advise them on their maintenance. The VOSA is now an Executive Agency with a commercial remit, self funded by the fees it charges for inspections it provides for a commercial fee, courses for goods vehicle operators' staffs responsible for inspecting vehicles. The Code places considerable emphasis on regular inspections of vehicles, including a daily "walkround check", the keeping of records of inspections (Croners' Road Transport Operation: Records and Procedures gives valuable information on the types of records to be kept), and the importance of driver defect reports (including the making of NIL Defects reports where appropriate). The practice of keeping defect reports and records of inspection for 15 months is confirmed in the Code. A clear indication is given that safety inspections should follow a pattern based on time, and that the interval of time between inspections should be determined by operating conditions. Operators are advised to own or have access to means of measuring braking efficiency. The VOSA is currently offering, on an experimental basis, this facility to operators at some goods vehicle testing stations. 32 + + + + + + ***Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. Maintenance Staff Vehicle maintenance must be carried out by qualified maintenance staff so that the driver is well supported in his operational duties thus enabling him to give maximum productivity during his working hours. Fleet maintenance should be planned, with regular vehicle testing and inspection, to minimise breakdowns on the road and to assist maximum vehicle utilisation. The Driver's Responsibilities The driver is the operator's representative and as such is responsible — with his employer — for any infringement of the law and he should therefore have a working knowledge of the appropriate regulations. Whatever the standards laid down by vehicle operators for maintenance and servicing, ultimately it is the driver who is responsible for reporting on performances He, more than anyone else, handles the vehicle under load, which is the only time when a true test of vehicle performance can be obtained. The driver, therefore, must ensure that he reports in good time, to the maintenance staff, any defects likely to infringe the law or affect the safety requirements. For such purposes a Vehicle Defects Report Sheet should be supplied by the operator to his driver so that any abnormalities can be recorded and dealt with as soon as possible. The items for checking and reporting on the Defects Report Sheet are: (a) fuel, oil and water (b) brakes (c) tyre condition and inflation pressures, spare wheel and jack (d) wheel security, making sure that: (i) all nuts and studs are tight (ii) no nuts or studs are missing (iii) no cracks are evident around wheel holes and where the centre joins the rim (iv) where a wheel has been replaced recently the nuts are tight (these should be checked again after 30 minutes of the work being carried out) Note: A vehicle should not be moved if any problems are found which should be reported immediately. (e) driving mirrors, windscreen wipers and washers (f) lights and reflectors (g) stop-lights and direction indicators (h) steering 33 + + + + + + ***Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. (i) the tachograph instrument (j) care and attention of batteries (k) all controls within the cab (lighting controls and connections) (l) water-cooling system and the use of anti-freeze (m) fuel supply, checking and clearing air-locks (diesel fuel system) (n) spray suppression equipment-around wheels (o) sideguards and rear under-run guards (p) cold starting procedure (q) brake and light coupling systems (trailer and articulated vehicles) (r) special equipment and controls used with tankers, tail-lifts, autocranes, etc. (s) refrigeration systems and controls (t) speed limiters. Note. Headlamps, front and rear fog lamps, reversing lamps (if fitted) must be set so they do not cause dazzle to other road users Also, all obligatory lamps and reflectors (including rear reflective markings) must be kept clean and in good working order. 34 + + + + + + ***Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. + + 35 + + SIGNED by MARK ARLEN ) duly authorised for and on behalf of ) /s/ Mark Arlen DAIRY CREST LIMITED ) + + + + SIGNED by STEPHEN FISHER ) + + + +duly authorised for and on behalf of ) /s/ S. Fisher SEV GROUP LIMITED ) + + + + + + + + ***Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. ADDENDUM TO FLEET MAINTENANCE AGREEMENT + + Insert Additional Clause: 3.7 Notwithstanding Clause 6, SEV agrees that DCL may withhold the final monthly payment due to SEV in respect of a vehicle on hire from Lex Vehicle Leasing t/a Business Partner (the "Hirer") at the end of its contracted hire period to cover the cost of repairs or replacement that should have been completed under the terms of this Fleet Maintenance Agreement so that it can be returned to the Hirer in good condition. For the purposes of this Fleet Maintenance Agreement good condition means free from exterior or interior damage including dents, scratches, damaged paintwork caused by any reason other than normal wear and tear. + + DATED 13 OCTOBER 2005 DCL + +DAIRY CREST LIMITED (Company no 2085882) whose registered office is at Claygate House, Littleworth Road, Esher, Surrey KT10 9PN SEV + +SEV GROUP LIMITED (company no 4463640) whose registered office is at Unit 95/2, Tanfield Lea Industrial Estate North, Stanley, Co Durham, DH9 9NX + + SIGNED by [NAME] RJR BETHAM ) duly authorised for and on behalf of ) /s/ R.J.R. Betham DAIRY CREST LIMITED ) + + + + DATE 19-1-06 + + + + SIGNED by [NAME] S FISHER ) + + + +duly authorised for and on behalf of ) /s/ S. Fisher SEV GROUP LIMITED ) + + + + + + + + + + + + DATE 19-1-06 \ No newline at end of file diff --git a/full_contract_txt/SOLUTIONSVENDINGINTERNATIONAL,INC_03_31_2020-EX1A-1 UNDR AGMT-SERVICES AGREEMENT.txt b/full_contract_txt/SOLUTIONSVENDINGINTERNATIONAL,INC_03_31_2020-EX1A-1 UNDR AGMT-SERVICES AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..a08a3de8f5d44e69e277056503763b88b85a544b --- /dev/null +++ b/full_contract_txt/SOLUTIONSVENDINGINTERNATIONAL,INC_03_31_2020-EX1A-1 UNDR AGMT-SERVICES AGREEMENT.txt @@ -0,0 +1,13 @@ +Exhibit 1.2 SERVICES AGREEMENT This Services Agreement ("Services Agreement" or "Agreement") is entered into as of the date noted below (the "Effective Date") between StartEngine Crowdfunding, Inc., a Delaware corporation ("Company"), and Solutions Vending International, Inc a ___ DE corporation ("Customer" or "you"). 1. Services Company agrees to make available to Customer the ability to present information with respect to its securities offering (the "Offering") to Users, and to permit Users to create and manage online accounts, view information regarding the Customer, indicate interest in the Offering, and to subscribe to the Offering by signing a subscription agreement or similar instrument and transmitting payment instructions (together, the "Services"). A "User" means a natural person, corporation or other entity that has established an account on the Company's website. 2. Fees and expenses a) Generally In exchange for the Services, you shall pay the Company the then applicable fees and expenses set out below. The Company reserves the right to change the applicable charges and to institute new charges and fees at the end of the Initial Term (as defined below) or then current renewal term, upon 30 days prior notice to you. If you believe that the Company has billed you incorrectly, you must contact Company no later than 60 days after the closing date on the first billing statement in which the error or problem appeared, in order to receive an adjustment or credit. Inquiries should be directed to contact@startengine.com. b) Monthly Fees and Billing The Company will bill you monthly for the Services. You authorize the Company to instruct Prime Trust or any escrow agent used by Company to deduct such fees, debts and any other amounts liabilities incurred under this Service Agreement, prior to releasing any amounts due to you or to any other person (including another escrow agent) from escrow. Amounts which remain unpaid for 30 days are subject to a finance charge of 1.5% per month on any outstanding balance, or the maximum permitted by law, whichever is lower, plus all expenses of collection and may result in immediate termination of Service. You shall be responsible for all taxes associated with Services other than U.S. taxes based on the Company's net income. c) Transaction Fees Company's transaction fees depend on the method of payment (e.g. ACH-US or WIRE-US). ACH transaction: $1 Wire: $15 d) AML Fees AML fees are charged per User per initial transaction. AML: $2 AML UK: $5 + + + + + +e) Reimbursable expenses You shall reimburse the Company for the following expenses: (i) All credit card charges charged to the Company by its third-party credit card processor. (ii) All transaction fees charged to the Company or its affiliates by its third-party transaction processor. (iii) Escrow agent fees charged to the Company or its affiliates by third-party escrow agents. (iv) Return fees as set out in Section 4 (Returns, Reversals, Disputes and Reserves) below. Credit cards: average is 3.5% (varies because it is a combination of fixed and a percentage charged by the credit card vendor) 2. Customer Representations and Warranties Customer represents and warrants to the Company that then executed and delivered by Customer, this Service Agreement will constitute the legal, valid, and binding obligation of Customer, enforceable in accordance with its terms. 4. Returns and Reversals a) Returns and Reversals User transactions debited from bank accounts via ACH are subject to returns (e.g., non-sufficient funds) and reversals from chargebacks (e.g., unauthorized activity) per the Electronic Fund Transfer Act (15 U.S.C. 1693 et seq. as may be amended), Regulation E, and NACHA guidelines (collectively, such returns and reversals are "Reversals"). The Company will work to protect Customer and the receiving Users from unwarranted Reversals; however, Customer acknowledges and agrees that: i) Customer is liable for all User Activity and Reversals associated with User Activity; ii) If Company's agent receives a Reversal, the Company may in its sole discretion charge Customer the full amount of the Reversal ("Reversed Payment") plus an additional $7 reversal fee ("Reversal Fee" and collectively the "Reversal Liability"); iii) The Company has sole discretion to determine who is at fault and liable for the Reversed Payment and Reversal Fee; iv) Customer authorizes the Company to take any of the following actions (in any particular order): (i) collect the unpaid portion of the Reversal Liability from funds sent to your third party escrow account; (ii) debit your bank account in the amount of the unpaid portion of the Reversal Liability; (iv) engage in collection efforts to recover the unpaid portion of the Reversal Liability and/or (v) take legal action or any other action under this Service Agreement. 5. Term and Survival a) Subject to earlier termination as provided below, this Service Agreement is for the total duration of the Company's Offering (the "Initial Term") unless either party requests termination at least 30 days prior to the end of the then-current term. + + + + + +b) Additionally, either party may terminate this Service Agreement in the event: i) The other party's material breach that remains not cured and continues for a period of (A) in the case of a failure involving the payment of any undisputed amount due hereunder, 15 days and (B) in the case of any other failure, 30 days after the non performing party receives notice from the terminating party specifying such failure; ii) Any statement, representation or warranty of the other party is untrue or misleading in any material respect or omits material information; iii) The other party (A) voluntarily or involuntarily is subject to bankruptcy proceedings, (B) applies for or consents to the appointment of a receiver, trustee, custodian, sequestrator, or similar official, (C) makes a general assignment to creditors, (D) commences winding down or liquidation of its business affairs, (E) otherwise takes corporate action for the purpose of effecting any of the foregoing, or (F) ceases operating in the normal course of business; iv) If any change to, enactment of, or change in interpretation or enforcement of any law occurs that would have a material adverse effect upon a party's ability to perform its obligations under this Service Agreement or a party's costs/revenues with respect to the services under this Service Agreement; v) Upon direction to a party from any regulatory authority or National Automated Clearing House Association to cease or materially limit the exercise or performance of such party's rights or obligations under this Service Agreement; vi) If there shall have occurred a material adverse change in the financial condition of the other party; or vii) Upon a force majeure event that materially prevents or impedes a party from performing its obligations hereunder for a period of more than 10 business days. StartEngine Crowdfunding, Inc. Customer: By: /s/ Dawn Dickson, By:Dawn Dickson, CEO and Founder Date: 08/19/2019 /s/ Howard Marks Howard Marks CEO \ No newline at end of file diff --git a/full_contract_txt/SONUSCORP_03_12_1997-EX-10.11-SPONSORSHIP AGREEMENT.txt b/full_contract_txt/SONUSCORP_03_12_1997-EX-10.11-SPONSORSHIP AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..7648d5b485505514dc9f3deac4665230b4b4f100 --- /dev/null +++ b/full_contract_txt/SONUSCORP_03_12_1997-EX-10.11-SPONSORSHIP AGREEMENT.txt @@ -0,0 +1,409 @@ +SPONSORSHIP AGREEMENT + +THIS AGREEMENT, dated for reference March 13, 1996, is made + +BETWEEN: + + HEALTHCARE CAPITAL CORP., a corporation incorporated pursuant to the laws of the Province of Alberta and having an office located at 1120-595 Howe Street, Vancouver, British Columbia, V6B 1N2 + + (the "Issuer"); + +AND: + + C.M. OLIVER & COMPANY LIMITED, a company amalgamated under the laws of British Columbia, having its head office at the 2nd Floor, 750 West Pender Street, Vancouver, British Columbia, V6C 1B5 + + (the "Sponsor"). + +WHEREAS: + +A. The Issuer wishes to distribute to residents of British Columbia and Alberta units, comprised of one common share and one share purchase warrant, to be issued on the exercise of previously issued special warrants, on the terms and conditions described in the prospectus of the Issuer to be filed with the British Columbia Securities Commission and the Alberta Securities Commission (the "Prospectus"); + +B. The Sponsor is an investment dealer based in Vancouver and is a member of the Vancouver, Alberta, Toronto and Montreal stock exchanges and of the Pacific District of the Investment Dealers Association of Canada, and is registered as a dealer under the Securities Act (British Columbia); + +C. The Sponsor is prepared, on and subject to the terms and conditions of this Agreement, to conduct an investigation of the organization, management, business and affairs of the Issuer, sufficient to enable it to sign the certificate for the final Prospectus of the Issuer. + +THEREFORE, the parties agree: + +1. INTERPRETATION + +1.1 Defined Terms + +In this Agreement: + +AG2432.386 [097] + + - 2 - + + (a) "Distribution" means the distribution by the Issuer of the Units to holders of the Securities under the Prospectus and "distribute" has a corresponding meaning; + + (b) "Finders' Special Warrants" means the Special Warrants issued by the Issuer as a finders' fee pursuant to a private placement completed by the Issuer on February 28, 1996; + + (c) "Indemnified Parties" means the Sponsor, its affiliates and their respective directors, officers, employees and agents; + + (d) "Issuer" means HealthCare Capital Corp.; + + (e) "Marketing Materials" means any marketing materials to be used in connection with the Offering; + + (f) "material change", "material fact" and "misrepresentation" have the respective meanings assigned in the Securities Act (British Columbia); + + (g) "Offering" means the offering, sale and distribution of the Securities pursuant to the Prospectus; + + (h) "Prospectus" means the final prospectus of the Issuer to be filed with the Securities Commissions in connection with the Offering; + + (i) "Related Agreements" means any contract which may be + + + + + + regarded as material to the purchase of Securities, each as more particularly described in the Prospectus; + + (j) "Securities" means the 1,870,000 Units of the Issuer issuable pursuant to the Special Warrants and additional 35,750 Units of the Issuer issuable pursuant to the Finders' Special Warrants offered under the Prospectus; + + (k) "Securities Commissions" means the Alberta Securities Commission and the British Columbia Securities Commission; + + (l) "Securities Law" means collectively the applicable laws, regulations, policies and prescribed forms of Alberta and British Columbia relating to the distribution of the Securities; + + (m) "Security Holder" means any person whose subscription for Securities is accepted by the Issuer, or any subsequent transferee or successor of such person; + + (n) "Sponsor" means C.M. Oliver & Company Limited; and + +AG2432.386 [097] + + - 3 - + + (o) "Special Warrants" means the outstanding special warrants of the Issuer each such special warrant entitling the acquisition of one common share and one non-transferable share purchase warrant to purchase one additional common share in the capital of the Issuer. + +1.2 Accounting Terms + +Any accounting terms used herein which are not specifically defined in the preceding section 1.1 shall be construed in accordance with generally accepted Canadian accounting principles. + +1.3 Number and Gender + +Words importing the singular number include plural and vice versa and words importing gender include the masculine, feminine and neuter genders. + +1.4 Headings + +The division of this Agreement into sections, subsections, paragraphs, subparagraphs, schedules and clauses, and the insertion of headings and captions are for convenience of reference only and do not affect the construction or interpretation of this Agreement. + +1.5 Severability + +Any provision of this Agreement which may be found to be prohibited by or unenforceable pursuant to the laws of any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such unenforceability or prohibition without invalidating the remaining terms and provisions hereof. + +1.6 Certificates and Certified Copies + +Whenever in this Agreement reference is made to a certificate or a certified copy to be delivered by a party, unless specifically provided otherwise, such certificate or certified copy must be executed by an officer of the party who, by virtue of his office, is familiar with the subject of such certificate or certified copy and shall certify the completeness, truth and accuracy thereof as of the date of such certificate or certified copy. + +1.7 Governing Law + +This Agreement is governed by, and will be construed in accordance with, the laws of British Columbia, Canada. + +1.8 Entire Agreement + +AG2432.386 [097] + + - 4 - + +This Agreement, including any thing expressly incorporated by reference herein, contains all the terms and conditions in connection with the subject matter hereof and no other agreements, written or oral, respecting such subject matter + + + + + +shall be deemed to exist or to bind any party. + +1.9 Currency References + +All dollar amounts referred to in this Agreement are in Canadian dollars unless otherwise specifically provided. + +2. APPOINTMENT OF SPONSOR + +2.1 Appointment of Sponsor + +The Issuer appoints the Sponsor as sponsor of the Offering and the Sponsor accepts the appointment and agrees to act as sponsor of the Issuer under the Prospectus on the terms of this Agreement. + +2.2 Duties of Sponsor + +As sponsor of the Issuer under the Prospectus, the Sponsor will conduct an investigation of the organization, management, business and affairs of the Issuer sufficient, in its sole discretion, to enable it to determine whether or not it is able to sign the certificate of the Prospectus. + +2.3 Signature of Certificate + +If, following the investigation referred to in subsection 2.2, the Sponsor determines in its sole discretion that it is able to do so, the Sponsor will sign the certificate for the Prospectus, certifying that, to the best of its knowledge, the Prospectus contains full, true and plain disclosure of all material facts relating to the Securities. + +2.4 Review of Business + +The Issuer will provide, or cause to be provided, to the Sponsor, its counsel and its agents a reasonable opportunity to conduct such full and comprehensive review of its business, capital, finances, operations and principals as the Sponsor, in its sole discretion, considers reasonably necessary in the circumstances. + +2.5 Sponsor's Fee + +For the services of the Sponsor as sponsor of the Offering and as full and complete compensation therefor, the Issuer will pay to the Sponsor the sum of $32,100 (inclusive of Goods and Services Tax), the receipt of which is acknowledged by the Sponsor. + +AG2432.386 [097] + + - 5 - + +3. REPRESENTATIONS AND WARRANTIES + +3.1 Representations and Warranties of the Issuer + +The Issuer represents and warrants to the Sponsor that: + + (a) Status of the Issuer + + The Issuer, and each of its subsidiaries, is a corporation duly incorporated, validly existing and in good standing under the respective laws of the jurisdiction of its incorporation and each has all requisite power and authority and holds all material licences, certificates, consents, permits and other authorizations as are necessary to enable it to carry on its proposed business as disclosed in the Prospectus. + + (b) Regular Business + + The business of the Issuer and its subsidiaries have been carried on, in all material respects, as contemplated by and in compliance with the requirements of their respective constating documents and in compliance with all applicable laws, rules and regulations, and neither the Issuer nor any of its subsidiaries is in breach of or in default under any mortgage, note, indenture, contract, instrument, lease or other document or agreement to which it is a party. + + (c) Corporate and Partnership Authority + + The execution, delivery and performance by the Issuer of this Agreement and the Related Agreements, when executed and delivered, to which it is or will be a party are within the Issuer's powers, have been or will have been, at the time of execution and delivery thereof, duly authorized by all necessary corporate + + + + + + action and do not and will not contravene its constating documents or any provision of any contract binding on it. + + (d) Claims and Potential Claims + + To the knowledge of the Issuer, no litigation, proceeding or investigation is pending or threatened before any court, agency, arbitrator or otherwise which will or might reasonably result in any material adverse change in the business, affairs or properties or conditions (financial or otherwise) of the Issuer or any of its subsidiaries or which might reasonably result in any material liability on the part of the Issuer or any of its subsidiaries. + +AG2432.386 [097] + + - 6 - + + (e) Prospectus + + The Prospectus complies with the requirements of the Securities Law in all material respects. The Prospectus does not contain any misrepresentation or any untrue statement of a material fact or omit any statement or information, the omission of which constitutes a misrepresentation, or omit to state any material fact required to be stated or necessary to make any statement contained therein not false or misleading in light of the circumstances in which it is made and all information and statements contained in the Prospectus are true and correct. In addition, all information and statements contained in the Prospectus constitute full, true and plain disclosure of all material facts. + + (f) Financial Statements + + The financial statements of the Issuer contained in the Prospectus accurately reflect the financial position of the Issuer on a consolidated basis at the dates thereof and there have been no adverse material changes in the financial position of the Issuer or any of its subsidiaries since the respective dates thereof, except as fully and plainly disclosed in the Prospectus. + + (g) Representations and Warranties + + The representations and warranties in this Agreement are true and will remain true as of the date of the Prospectus. + +3.2 Representations and Warranties of the Sponsor + +The Sponsor represents and warrants to the Issuer that: + + (a) Corporate Status + + It is a corporation duly amalgamated, validly existing and in good standing under the laws of British Columbia. + + (b) Corporate Authority + + The execution, delivery and performance by the Sponsor of this Agreement is within the Sponsor's corporate powers, has been duly authorized by all necessary corporate action and does not contravene: + + (i) the memorandum or articles of the Sponsor; or + + (ii) any law; or + +AG2432.386 [097] + + - 7 - + + (iii) any provision of any other contract binding on the Sponsor. + + (c) Governmental Approvals + + + + + + Except for compliance with the requirements of the Securities Law, no authorization or approval or other action by and no notice to or filing with any governmental authority or regulatory body is required for the due execution, delivery and performance by the Sponsor of this Agreement. + +3.3 Survival of Representations and Warranties + +Each of the parties hereto acknowledges that the other parties are relying on each of the representations and warranties addressed to such other parties set forth in section 3.1 or 3.2, as the case may be, and any representations made in any certificate issued to such other parties in connection with this Agreement notwithstanding any investigations heretofore or hereafter made by such other parties or their counsel or representatives. All such representations and warranties shall not merge in or be prejudiced by, and shall survive for a period of three years from the completion of the distribution of the Units. + +4. COVENANTS OF THE ISSUER + +The Issuer covenants with the Sponsor that: + + (a) it will take all such acts and execute, file and deliver all such documents, amendments, notices and information as may be necessary to cause the purchasers of Securities to become Security Holders of the Issuer; + + (b) it will execute or procure the execution of all documents and use its best efforts to take or cause to be taken all steps which may be reasonably necessary to enable the transactions contemplated herein to be completed; + + (c) it will notify the Sponsor promptly in writing of the full particulars of any material change, whether actual, anticipated or threatened, in any material fact stated or referred to in the Prospectus or which would result in an omission from the Prospectus to state a material fact necessary to make any statement contained therein not misleading in light of the circumstances in which it is made; + + (d) during the period of distribution, distribution to the public or primary distribution to the public (as contemplated by the Securities Law) of the Securities, it will advise the Sponsor promptly of any request of any securities commission or other securities authority for a cease trading order relating to the Securities, or of the institution or threat of institution of any proceedings for that purpose, or of the receipt by it, or its counsel + +AG2432.386 [097] + + - 8 - + + of any material communication from any securities commission or other securities authority relating to the Prospectus or any supplements or amendments thereto; + + (e) upon the occurrence of a material change, it shall, to the satisfaction of the Sponsor, promptly comply with all applicable filing and other requirements under the Securities Law as a result of such material change; + + (f) the Securities, when issued, will have the attributes described in the Prospectus; and + + (g) it will deliver or cause to be delivered all documents, including legal opinions, required hereunder and by the Prospectus. + +5. EXPERT OPINIONS + +The Issuer shall deliver to the Sponsor on the date of filing the Prospectus: + + (a) a letter dated as of a date not more than one Business Day prior to the date of the Prospectus, in form and substance satisfactory to the Sponsor, from the then current auditor of the Issuer: + + (i) stating that, in such auditor's opinion, the financial statements and notes thereto of the Issuer examined by them and included in the Prospectus covered by his report therein comply as to form in all material respects + + + + + + with the applicable accounting requirements of the Securities Law; and + + (ii) stating that, in such auditor's opinion, the balance sheet of the Issuer examined by the auditor and included in the Prospectus and covered by his report therein complies as to form in all material respects with the applicable accounting requirements of the Securities Law; and + + (iii) addressing such other matters relating to the financial information in the Prospectus to which the Sponsor may reasonably require comfort; + + (b) a favourable legal opinion, in form and content reasonably satisfactory to the Sponsor, by counsel to the Issuer dated the date of the Prospectus and addressed to the Sponsor, relating to such legal matters as the Sponsor may reasonably request, including, without limitation, certain of the matters in section 3.1, title to the Issuer's property, and matters pertaining to the Securities Law; + +AG2432.386 [097] + + - 9 - + + (c) a certificate of the Issuer certifying certain facts relating to the business of the Issuer, and its affairs as may be reasonably requested by the Sponsor; and + + (d) any other certificates, comfort letters or opinions in connection with any matter related to the Prospectus which are reasonably requested by the Sponsor or their legal counsel. + +6. TERMINATION + +6.1 Term of Agreement + +This Agreement shall terminate and, subject to the provisions set forth below, be of no further force or effect on the exercise by the Sponsor of its right to terminate this Agreement as provided in subsection 6.2, provided that, in any event, sections 3, 7 and 8 and, in the event that such termination occurs by virtue of paragraph 6.2(b), subsection 2.5 shall not terminate (except as set forth therein) and shall continue in full force and effect for the benefit of the Sponsor or the other parties to this Agreement, as the case may be. + +6.2 Termination of Agreement + +The Sponsor may, at its sole option, terminate this Agreement at any time prior to the issuance of a receipt for the Prospectus by all of the Securities Commissions by notice in writing to the Issuer if: + + (a) any representation or warranty made by or on behalf of the Issuer herein or in any certificate delivered in connection with this Agreement proves to have been incorrect in any material respect when made; + + (b) any material adverse change occurs in the business or financial condition of the Issuer or any of its subsidiaries; + + (c) the Issuer breaches or fails to perform or observe any of the covenants or agreements to be performed or observed by it hereunder; + + (d) any order operating to restrict, prevent or cease trading in the Securities is made under the Securities Law; + + (e) any inquiry or investigation, whether formal or informal, is commenced or threatened by a securities commission against the Issuer or its directors, officers or agents; or + + (f) any of the conditions set forth in section 5 are not satisfied. + +AG2432.386 [097] + + + + + + - 10 - + +6.3 Obligations of Sponsor Clarified + +For greater certainty, the Sponsor is obligated under this Agreement, subject to subsection 6.2, only to perform the investigation referred to in subsection 2.2, and nothing in this Agreement will obligate the Sponsor to sign the certificate for the Prospectus, unless, in its sole discretion, it considers itself able to do so. + +7. COSTS, EXPENSES AND TAXES + +Whether or not the Sponsor signs the certificate as contemplated in subsection 2.3, the Issuer will bear the costs and expenses in connection with the Offering, the preparation, execution and delivery of this Agreement, amendments to the Prospectus and the other documents to be delivered hereunder, including, without limitation: + + (a) the reasonable fees and out-of-pocket expenses of counsel for the Sponsor with respect thereto (which fees, not including expenses and taxes, are not expected to exceed $15,000 but may after consultation with and receipt of the prior approval of the Issuer) and with respect to advising the Sponsor as to its rights and responsibilities under this Agreement; + + (b) fees and costs of preparing and reproducing the Prospectus, any amendments thereto and any other Marketing Materials prepared by the Issuer; + + (c) filing fees in connection with compliance with the Securities Law; + + (d) all costs and expenses associated with obtaining an assessment report in compliance with Interim Local Policy Statement 3-17 of the British Columbia Securities Commission, if required; and + + (e) all costs and expenses, if any (including reasonable counsel fees and expenses), in connection with the enforcement of this Agreement, and the other documents to be delivered hereunder. + +8. INDEMNIFICATION + +8.1 Indemnification of Indemnified Parties + +The Issuer shall and does hereby indemnify and save the Indemnified Parties harmless from and against any liability, claim, demand or loss, excluding loss of profits, which the Indemnified Parties may suffer, whether pursuant to statute or otherwise, howsoever arising, in consequence of: + +AG2432.386 [097] + + - 11 - + + (a) any statement or omission in the Prospectus, or otherwise made or omitted by the Issuer in connection with the Offering, being or being alleged to be a misrepresentation; + + (b) the Issuer not complying with any requirement of applicable legislation of Canada or of British Columbia or Alberta; or + + (c) any order made or any inquiry, investigation or proceeding commenced, threatened or announced by any securities regulatory authority or other competent authority in British Columbia, Alberta or Ontario which prevents or restricts trading in or the sale or distribution in British Columbia and Alberta of the Securities. + +8.2 Right to Counsel + +If any claim contemplated by this section is asserted against any of the Indemnified Parties, the Issuer shall be entitled (but not required) to assume the defence on behalf of the Indemnified Parties of any suit brought to enforce such claim, provided that the defence shall be through legal counsel acceptable to the Indemnified Parties and no admission of liability shall be made by the Issuer or the Indemnified Parties without, in each case, the prior written consent of all the parties hereto, such consent not to be unreasonably withheld. Any of the Indemnified Parties shall have the right to employ separate counsel in any such suit and participate in the defence thereof, at the expense of the Issuer. + +8.3 Indemnity + + + + + +The indemnity provided for in this section will not be limited or otherwise affected by any other indemnity obtained by the Sponsor from any other person in respect of any matters specified in this Agreement and will continue in full force and effect until all possible liability of the Sponsor arising out of the transactions contemplated by this Agreement has been extinguished by the operation of law. + +9. NOTICES + +Any notice required or permitted to be given hereunder shall be in writing and be given by personal service, telex, telegram, telecopy or by registered letter, with postage fully prepaid, to the address set forth below: + +AG2432.386 [097] + + - 12 - + + (a) if to the Issuer at: + + HealthCare Capital Corp. c/o Ballem MacInnes Barristers and Solicitors First Canadian Centre 1800, 350-7th Avenue S.W. Calgary, Alberta T2P 3N9 Attention: William DeJong Telephone: (403) 292-9800 Fax: (403) 233-8979 + + (b) if to the Sponsor at: + + C.M. Oliver & Company Limited 2nd Floor, 750 West Pender Street Vancouver, B.C. V6C 1B5 Attention: Lyle Davis Telephone: (604) 668-6700 Fax: (604) 681-8964 + +Any notice delivered personally or by telex, telegram or telecopy shall be deemed to be received by and given to the addressee on the day of delivery. Any notice mailed as aforesaid shall be deemed to have been received by and given to the addressee on the fifth Business Day following the date of mailing except in the event of a disruption of postal service, in which event notice shall be delivered personally or given by telex, telegram or telecopy. Either party hereto may designate a new address by giving written notice thereof to the other party at least ten days in advance of the effective date of such designation. + +10. MISCELLANEOUS + +10.1 Amendments, Etc. + +No amendment or waiver of any provision of this Agreement nor consent to any departure by the Issuer therefrom shall in any event be effective unless it is in writing and signed by the Sponsor and then such waiver or consent will be effective only in the specific instance and for the specific purpose for which given. + +10.2 Time + +Time shall be of the essence of this Agreement. + +AG2432.386 [097] + + - 13 - + +10.3 Binding Effect + +This Agreement is binding upon and enures to the benefit of the parties and their respective successors and assigns, and no party shall have the right to assign its rights hereunder or any interest herein without the prior written consent of the other parties. + +10.4 Governing Law + +This Agreement will be governed by the law of British Columbia and the parties attorn to the non-exclusive jurisdiction of the courts of British Columbia for the resolution of all disputes arising in connection with this Agreement. + +11. EXECUTION IN COUNTERPART + + + + + +This Agreement may be executed by any party in two or more counterparts, each such counterpart will be deemed to be an original, and all such counterparts taken together will constitute one and the same agreement. + +IN WITNESS of this Agreement, the parties have executed and delivered this Agreement as of the date given above. + +HEALTHCARE CAPITAL CORP. + +By: /s/ Douglas F. Good Title: Chief Financial Officer + +C.M. OLIVER & COMPANY LIMITED + +By: /s/ C. M. O'Brian Title: Chairman + +AG2432.386 [097] \ No newline at end of file diff --git a/full_contract_txt/SPARKLINGSPRINGWATERHOLDINGSLTD_07_03_2002-EX-10.13-SOFTWARE LICENSE AND MAINTENANCE AGREEMENT.txt b/full_contract_txt/SPARKLINGSPRINGWATERHOLDINGSLTD_07_03_2002-EX-10.13-SOFTWARE LICENSE AND MAINTENANCE AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..19ec3cbfc8fc584d19defe9bf730a5650360981c --- /dev/null +++ b/full_contract_txt/SPARKLINGSPRINGWATERHOLDINGSLTD_07_03_2002-EX-10.13-SOFTWARE LICENSE AND MAINTENANCE AGREEMENT.txt @@ -0,0 +1,335 @@ +Exhibit 10.13 + + SOFTWARE LICENSE AND MAINTENANCE AGREEMENT + + BETWEEN + + GARMAN ROUTING SYSTEMS, INC. ("GARMAN") + + AND + + SPARKLING SPRING WATER GROUP LIMITED ("SPARKLING") + + WHEREAS Garman has developed and is entitled to license to others certain software and supporting materials which Sparkling wishes to license, the parties agree as follows: + +1. DEFINITIONS AND SCHEDULES + + In this Agreement the following definitions shall apply: + + (a) Authorized Locations means the locations listed in Schedule "C." + + (b) Confidential Information has the meaning specified in Section 14. + + (c) Documentation means the documentation related to use of the Software described in Schedule "B." + + (d) Maintenance Commencement Date means the date that acceptance testing is successfully completed at all of the Authorized Locations. + + (e) Maintenance Services means the Software Update Service, Telephone Support Service and Software Repair Service described in Section 10. + + (f) Modifications means the modifications set out in Schedule "D." + + (g) Person includes an individual, corporation, partnership, joint venture, trust, unincorporated organization, the Crown or any agency or instrumentality thereof or any other judicial entity recognized by law. + + (h) Software means the software described in Schedule "B." + + (i) Specifications means the specifications set out in Schedule "D." + + (j) Work means the Software and the Documentation collectively. + + The following is a summary of the Schedules, which shall form an integral part of this Agreement: + + PAGE 1 + + Schedule "A": Fee Schedule. + + Schedule "B": Software and Documentation. + + Schedule "C": Authorized Locations and Software copies for Authorized Locations. + + Schedule "D": Specifications, Modifications, Data Conversion. + + Schedule "E": Implementation and Training. + + Schedule "F": Telephone Support Schedule. + +2. GRANT OF LICENSE + + Garman hereby grants to Sparkling, for the use of Sparkling and affiliated companies of Sparkling operating at Authorized Locations, a non-transferable and non-exclusive licence to use: (i) the Software, safely in executable object code format, at each AS400 at each of the Authorized Locations; and (ii) the Documentation. Sparkling's right, if any, to use the Software and Documentation at locations other than the Authorized Locations is subject to the payment of additional fees in accordance with the Fee Schedule. + +3. RESTRICTIONS ON USE + + Sparkling shall: + + (a) not copy the Software except to copy it onto another AS400 at the Authorized Locations and to make copies of the Software at each Authorized Location solely for backup purposes; + + (b) not copy any of the Documentation except as required for Sparkling's internal purposes related to Sparkling's use of the Software; + + (c) not assign this Agreement or transfer, lease, export or grant a sublicence of the Work to any Person, except as and when authorized to do so by Garman in writing; + + (d) not reverse engineer, decompile or disassemble the Software; + + (e) not use the Work except as authorized herein; + + (f) take all reasonable precautions to prevent third parties from using + + + + + +the Work in any way that would constitute a breach of this Agreement including, without limitation, such precautions as Sparkling would otherwise take to protect its own proprietary software or hardware or information; and + + PAGE 2 + + (g) not use the Work to act as a service bureau in whole or in part, for any other Person, except for any affiliate of Sparkling operating at the Authorized Locations. + +4. DELIVERY, INSTALLATION AND DATA CONVERSION + + (a) In accordance with Schedule "C," Garman has delivered the required number of copies of the executable object code of the Software to those Authorized Locations (together with copies of the Documentation as is reasonably required by Sparkling to operate the Software in the manner contemplated hereunder) and installed the Software on the applicable AS400's at each Authorized Location. The installation of the Software at each existing Authorized Location shall be deemed to be completed including contracted changes and has been properly installed, is in good working order. Modifications and changes shall fall within the 60 day testing period at which time they are deemed to be completed and has been properly installed, is in good working order. + + (b) For Future Installations and Conversions at an existing or new Authorized Location, Garman shall be available for Contracting required installation and conversion tasks as reasonably required, in consultation with and with the reasonable assistance of Sparkling, including conversion of Sparkling's data, as more particularly described in Schedule "D," from its current electronic form into a form suitable for processing with the Software and as required for the testing of the Software and for use of the Software as contemplated hereunder. + +5. TRAINING + + In conjunction with the installation of the Software at each existing or new Authorized Location, and prior to the commencement of acceptance testing at each Authorized Location, Garman shall provide as contracted a qualified personnel as specified in Schedule "E." Garman shall also provide copies of reference documentation and manuals for training and reference by Sparkling's personnel. + +6. ACCEPTANCE TESTING AT EACH AUTHORIZED LOCATION + + (a) For each new Authorized Location, upon written notice by Garman of the completion of the installation of the Software as contracted for in Section 4 including training provided for in Section 5, Sparkling shall operate and test the Software for an acceptance period of 30 business days in accordance with Sparkling's normal operating practices. At the end of each day during the acceptance period, Sparkling shall notify Garman of any instances in which the Software does not perform in accordance with the Specifications. + + (b) If Garman receives such notification, then it shall take the actions that are necessary to make the Software perform in accordance with the Specifications. + + PAGE 3 + +Once it has completed such action, the Software shall be retested by Sparkling for a new 30 day period in accordance with Section 6(a). Such testing and notification by Sparkling and remedial action by Garman shall be repeated until the Software has been accepted by Sparkling, acting reasonably, as meeting the Specifications. + + (c) Notwithstanding (a) and (b) of this Section 6, Sparkling acknowledges and agrees that there may be minor deficiencies in the Software and provided that on notification thereof Garman promptly rectifies such deficiencies, the acceptance of the Software will not be delayed thereby. + + (d) If Garman does not receive notice of any deficiencies within ten (10) business days after the completion of the acceptance period, then Sparkling shall be deemed to have accepted the Software at that Authorized Location. + +7. OPTION TO REJECT SOFTWARE + + If during the acceptance period described in Section 6, the Software has failed to perform in accordance with the Specifications and Garman has been unable to correct the deficiency within 45 business days of written notice being provided to Garman of such failure then Sparkling shall have the option, exercisable on 15 business days written notice to Garman, in lieu of any other remedy, to reject the Software. Such option shall terminate if in the interim, the Software successfully completes acceptance testing and meets the Specifications. + +8. OPTION TO REJECT EXERCISED + + If Sparkling exercises its option to reject the Software in accordance with Section 7, then the parties shall forthwith carry out the following actions and this Agreement will terminate upon their completion: + + (a) Sparkling shall return all copies of the Work and all of Garman's Confidential Information in its possession or control to Garman. + + (b) Garman shall return to Sparkling any and all amounts paid to Garman hereunder, and all of Sparkling's Confidential Information in its possession or + + + + + +control. + +9. CO-OPERATION AND IMPLEMENTATION + + (a) Both Garman and Sparkling have designated in Schedule "E" a responsible individual from their respective organizations with the authority and competence to act, and responsibility to serve, as a project manager hereunder and deal with the other party with respect to the Software. Sparkling's project manager shall also be responsible for providing or coordinating the provision of such information about Sparkling and its operations, external and internal procedures and such other information as Garman may reasonably require in order to perform its obligations hereunder. Sparkling's project manager shall have the authority on behalf + + PAGE 4 + +of Sparkling to notify Garman that any acceptance tests provided for herein have been successfully passed or, where applicable, that Sparkling waives compliance with any such acceptance tests. Garman's project manager shall be responsible for coordinating with Sparkling's project manager the delivery and installation of the Software. The project managers shall meet for this purpose, as may be reasonably requested by either of them in writing. + + (b) Garman and Sparkling shall use their best efforts to carry out their respective obligations under this Agreement in accordance with the Implementation and Training Schedule. + +10. MAINTENANCE AND SUPPORT + + For a renewable one-year term commencing upon the Maintenance Commencement Date, subject to payment of maintenance fees in accordance with the Fee Schedule but without additional fees or charges, Garman shall provide the following Maintenance Services: + + (a) SOFTWARE UPDATE SERVICE + + As part of the Software Update Service, Garman shall provide to Sparkling as soon as reasonably available: + + (1) corrections and bug fixes for the Software; + + (2) all modifications, refinements, and enhancements ("Improvements") of the Software; + + (3) new releases of the Software; and + + (4) updated user manuals to support all of the above in a reasonable time frame. + + (b) TELEPHONE SUPPORT SERVICE + + Telephone Support Service includes Sparkling having direct telephone access to employees of Garman who have the necessary technical expertise and experience to understand and consider Sparkling's inquiries concerning the failure of Software to operate according to Specifications and to clarify Documentation that is either insufficient or unclear. Such direct telephone access shall be available in accordance with the Telephone Support Schedule. In the event that the Telephone Support Service does provide a resolution to Sparkling (acting reasonably) within 2 business days to permit the Software to meet the Specifications, then Garman shall provide Software Repair Services to address the Software failure. The existing Telephone support numbers are for Garman business hours 1-800-667-6901 or 1-306-242-6322 + + PAGE 5 + +and after hours 1-306-717-1999, which is a pager number being monitored directly by qualified Garman staff. + + (c) SOFTWARE REPAIR SERVICE + + Should the Software not operate substantially in conformance with the Sparkling's Specifications in all material respects, Garman will use its best efforts to repair the Software under the support agreement at no additional charge to Sparkling. Notwithstanding the foregoing, Garman may charge a fee at its rates set out in the Fee Schedule to provide Software Repair Services which are required due to: + + (1) failure due to Sparkling operator errors; + + (2) failure to maintain Software at such updated version or release of the Software provided by Garman to Sparkling, from time to time, at no additional charge as part of the Maintenance Services or otherwise; + + (3) material modification of the Software by Sparkling; or + + (4) the Software being transferred to a different networking environment or hardware configuration without the prior written consent of Garman; or + + (5) any failure of the hardware or the operating system not caused by Garman or the Software. + +11. FEES + + + + + + Sparkling shall pay the fees as set out in the Fee Schedule in accordance with the terms of this Agreement and the Fee Schedule. + +12. SPECIFICATIONS AND WARRANTY + + For the acceptance period and for a period of one year from the Maintenance Commencement Date, and thereafter for as long as the Software is covered by Maintenance Services and is used by Sparkling in accordance with this Agreement, Garman warrants that the Software shall perform in conformance with the Specifications in all material respects. + +13. INTELLECTUAL PROPERTY INDEMNITY + + Garman is the owner of all intellectual property rights in the Work (including any Improvements or Modifications thereto), including all related materials, logos, and names provided pursuant to the terms of this Agreement. No title to the intellectual property in the Work is transferred to Sparkling by this Agreement. + + PAGE 6 + +Garman represents and warrants that it owns or controls all rights necessary to grant the rights to Sparkling in accordance with this Agreement and that there are not, nor will there be, any lien, encumbrance, security interest or other rights against the Work which will interfere in any way with the rights granted to Sparkling. Garman agrees to indemnify Sparkling and hold it harmless from any and all losses, damages and expenses including without limitation, court costs, arbitration fees, penalties, fines, amounts paid in settlement of claims and reasonable legal fees and expenses of investigation (collectively the "Losses") which Sparkling or any of its respective officers or directors may incur due to a breach of this warranty. Sparkling shall notify Garman in writing of any such claim within ten calendar days of a responsible officer of Sparkling becoming aware of such claim. If the Work or any portion thereof is held to constitute an infringement of another Person's rights, and use thereof is enjoined, Garman shall, at its election and expense, make every reasonable effort to correct the situation with minimal effect upon the operations of Sparkling and shall either: + + (a) procure the right to use the infringing element of the Work; + + (b) procure the right to an element which performs the same function without any material loss of functionality; or + + (c) replace or modify the element of the Work so that the infringing portion is no longer infringing and still performs the same function without any material loss of functionality. + +14. CONFIDENTIALITY + + By virtue of this Agreement, the parties may have access to information that is confidential to one another ("Confidential Information"). Confidential Information means all data and information related to the business and management of either party, including proprietary and trade secrets, technology and accounting records for which access is obtained by the other party pursuant to this Agreement, provided that such Confidential Information shall not include data or information which: + + (a) is or becomes publicly available through no fault of the other party; + + (b) is already in the rightful possession of the other party prior to its receipt from the other party; + + (c) is independently developed by the other party; + + (d) is lawfully obtained by the other party from a third party; + + (e) is disclosed as required by law; or + + (f) is disclosed to professional advisors in confidence. + + PAGE 7 + + The parties agree to hold each other's Confidential Information in confidence. The parties agree not to make each other's Confidential Information available in any form to any third party or to use each other's Confidential Information for any purpose outside the scope of this Agreement. Each party agrees to take all reasonable steps to ensure the Confidential Information is not disclosed or distributed by its employees or agents in violation of this Section. + +15. LIMITATION OF GARMAN'S LIABILITY + + The exclusive remedy of either party in a claim against the other under this Agreement shall be the recovery of its direct damages. In no event shall either party be liable to the other for the recovery of any special, indirect or consequential damages even if the defendant party had been advised of the possibility of such damages including but not limited to lost profits, lost revenues, failure to realize expected savings, loss of data and loss of use. The parties agree that the limitation of liability in this paragraph reflects the allocation of risk between the parties and the price of the licenced Software. The limitation of liability in this Section 15 shall not apply to breaches of Sections 13 and 14. + +16. SOURCE CODE ESCROW + + + + + + (a) Immediately upon execution of this Agreement, Garman shall maintain on each AS400 at an Authorized Location the most current version of: + + (1) all source code for the Software in machine readable form, with user option to print; + + (2) all program and user documentation in machine readable and printed form; + + (3) all tools such as compilers, assemblers, linkers and editors required to make the source code into the functional Software operating in accordance with the Specifications as amended from time to time; + + (4) a complete explanation of any procedures that are not standard practice, required to create from the source code the functional Software; (5) all documentation listing program and module inputs and their sources, outputs and their destinations, and any other relevant program and module documentation, + +(collectively, the "Codes"). + + PAGE 8 + + This Source Code shall remain the property of Garman unless Sparkling exercises its option to purchase as specified in the Source Code Agreement. The Source Code on each AS400 shall be the most current version of all Codes for all corrections, bug fixes, Improvements and new releases of the Software which are licensed by Sparkling hereunder. Sparkling shall not be entitled to make use of the Codes except as provided in Section (b), provided that Sparkling may itself or by retaining independent experts, examine and test the materials for compliance with the obligations of Garman hereunder. + + (b) Garman hereby grants to Sparkling, a perpetual, fully paid, non-exclusive license entitling Sparkling to use and reproduce the Codes deposited with it pursuant to Section (a) to change, update, add to, or substitute the Codes, the Software or any part thereof, limited to Sparkling's needs for the use and improvement of the Software or Sparkling's operations, provided that Sparkling shall only be entitled to utilize such license if Sparkling terminates this Agreement pursuant to Section 17(c) due to Garman's default, or if Garman ceases to support the Software as required pursuant to this Agreement. The parties acknowledge that the bankruptcy of Garman shall not prevent Sparkling's continued use of the Work or the Codes in accordance with United States Bankruptcy Code section 365(n) or any similar provisions in any jurisdiction. + +17. TERM AND TERMINATION + + (a) This Agreement and the license granted under this Agreement shall remain in effect perpetually as long as fees are paid by Sparkling in accordance with the Fee Schedule and the Agreement is not otherwise terminated in accordance with this Section. + + (b) Sparkling may terminate this Agreement at any time upon ninety (90) calendar days written notice to Garman. If Sparkling terminates this Agreement pursuant to this Section 17(b), Sparkling shall cease using the Software at the end of the ninety (90) day notice period, and shall certify to Garman within thirty (30) calendar days of termination that Sparkling has destroyed or has returned to Garman all Software, Documentation and Codes. + + (c) If either party: + + (1) makes an assignment in bankruptcy or is adjudicated a bankrupt; + + (2) makes a general assignment for the benefit of its creditors; + + (3) has a receiver, administrator or manager of its property, assets or undertaking appointed in such circumstances as would in the reasonable discretion of the other party, detrimentally affect such other party's rights under this Agreement; + + PAGE 9 + + (4) is ordered by any court to be wound up; + + (5) becomes insolvent or makes a sale in bulk of its assets; + + (6) ceases doing business as a going concern; + + (7) defaults on any of its material obligations provided for hereunder and such default is not cured within thirty calendar days of written notice thereof by the other party, or the defaulting party fails to take sufficient actions to the reasonable satisfaction of the other party to cure the default within thirty calendar days of written notice; + +this Agreement may be terminated by the other party. If this Agreement is terminated by Sparkling, due to Garman's default, the license herein granted shall continue, but shall be converted to a perpetual license pursuant to which Sparkling shall not be required to pay any further fees to Garman hereunder, and Garman shall immediately return all fees paid under this Agreement for services + + + + + +not yet rendered. + +18. SURVIVAL OF CERTAIN SECTIONS + + Any provisions of this Agreement that require or contemplate performance after termination are enforceable against each party notwithstanding termination. These provisions include but are not limited to Sections 13, 14, 15, 16(b), 18, 19 and 20. + +19. NON-SOLICITATION OF EMPLOYEES + + During the term of this Agreement and for a period of one year thereafter, both parties agree not to hire or allow its respective affiliates to hire any employee of the other party, or any person who was an employee of the other party during the previous six months and who was directly involved in the provision of services under this Agreement. + +20. GENERAL MATTERS + + (a) Time shall be of the essence with respect to all matters under this Agreement. + + (b) All notices required or permitted to be given under this Agreement shall be given in writing and may be sent by personal delivery or facsimile transmission addressed to the recipient at the addresses shown below (or such other address as may be designated by notice in accordance with this Agreement): + + PAGE 10 + + Garman: GARMAN ROUTING SYSTEMS, INC #1 - 502 45th Street West Saskatoon, SK S7L 6H2 + + Sparkling: SPARKLING SPRING WATER GROUP LIMITED 19 Fielding Avenue Dartmouth, NS B3B 1C9 + +Any notice sent by personal delivery shall be deemed to be given on the day of its delivery provided it is received during regular business hours on a business day, and if it is not received as such then it shall be deemed to be given on the next business day. Any notices sent by facsimile transmission shall be deemed to be given on the day of transmission if received during regular business hours on a business day, and if it is not received as such then it shall be deemed to be given on the next business day. + + (c) Unless otherwise permitted by this Agreement, no waiver of any part of this Agreement shall be binding unless executed in writing by both parties. No waiver of any part of this Agreement shall constitute a waiver of any other part or a continuing waiver unless otherwise agreed to in writing by both parties. + + (d) Neither party may assign this Agreement or any rights and obligations under this Agreement to any third party without the written consent of the other party. + + (e) The parties are acting as independent contractors under this Agreement and not as agents or representatives of the other and not as partners or joint ventures. Neither party shall enter into any agreement or commitment on behalf of the other without the written consent of the other. + + (f) If either party is delayed or prevented from exercising its obligations or making deliveries in accordance with this Agreement due to circumstances beyond the reasonable control of that party including without limitation, strikes, lockouts, labor disputes, fire, explosion, act of god or other similar causes, then such failure to meet obligations or make deliveries shall not be a breach of this Agreement. + + (g) Each of the provisions contained in this Agreement is distinct and severable. If one or more of the provisions of this Agreement is found to be illegal or unenforceable, this Agreement shall not be rendered inoperative or invalid but the remaining provisions shall continue in full force and effect. + + (h) This Agreement shall be governed by the laws of Nova Scotia and the laws of Canada applicable in Nova Scotia. All disputes under this Agreement shall be subject to the non-exclusive jurisdiction of the courts of Nova Scotia. + + (i) All paragraph headings contained in this Agreement are for convenience only and shall not affect the interpretation of this Agreement. + + PAGE 11 + + (j) This Agreement constitutes the entire Agreement between the parties with respect to its subject matter, and this Agreement supersedes all prior understandings, representations, negotiations and communications between the parties, oral and written. + + Dated the ____ day of May, 2000. + + GARMAN ROUTING SYSTEMS, INC. + + Per: ___________________________________ + + SPARKLING SPRING WATER GROUP LIMITED + + + + + + Per: ___________________________________ + + PAGE 12 \ No newline at end of file diff --git a/full_contract_txt/SPHERE3DCORP_06_24_2020-EX-10.12-CONSULTING AGREEMENT.txt b/full_contract_txt/SPHERE3DCORP_06_24_2020-EX-10.12-CONSULTING AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..341af502bde51fdda0813d551ef8f0df0d054859 --- /dev/null +++ b/full_contract_txt/SPHERE3DCORP_06_24_2020-EX-10.12-CONSULTING AGREEMENT.txt @@ -0,0 +1,107 @@ +Exhibit 10.12 CONSULTING AGREEMENT + +THIS CONSULTING AGREEMENT is made and entered into as of June 1st, 2020 (the "Effective Date") by and between GROUPE PARAMEUS CORP , a (hereinafter, the "Consultant"), with an address at 80 Cumberland street, suite 1707 Toronto Ont. (the "Consultant"), and Sphere 3D Corp., with an address at 895 Don Mills Road Bldg 2 Toronto Ontario Canada ("Company"). + +WHEREAS, Consultant has experience in the area of corporate finance, investor communications and financial and investor public relations and the Company and Consultant wish for Consultant to provide services to the Company as hereinafter provided. + +NOW, THEREFORE, in consideration of the premises and the mutual covenants set forth herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Consultant hereby agree as follows: + +DUTIES. + +The Company hereby engages the Consultant and the Consultant hereby accepts engagement as a consultant. It is understood and agreed, and it is the express intention of the parties to this Agreement, that the Consultant is an independent contractor, and not an employee or agent of the Company for any purpose whatsoever. Consultant shall perform all duties and obligations as described on Exhibit A hereto (the "Services") and agrees to be available at such times as may be scheduled by the Company. It is understood, however, that the Consultant will maintain Consultant's own business in addition to providing services to the Company. The Consultant agrees to promptly perform all services required of the Consultant hereunder in an efficient, professional, trustworthy and businesslike manner. A description of the Consultant's services are attached hereto as Exhibit A and incorporated by reference herein. + +In connection with Consultant's performance of the Services specified in the Statement of Work, Company agrees to provide Consultant and/or each subcontractor, such materials as may be necessary for the Services to be performed (the "Materials"). The Company hereby represents, warrants, covenants and agrees that the Materials will be true and accurate and shall be free of any material omissions or misstatements and otherwise compliant will all applicable laws. + +The Company shall provide disclosures in each of its Forms 10-K and 10-Q as to the existence of this Agreement and any Statement of Work, the amount paid or to be paid in connection with each Statement of Work and the types of services to be provided under each Statement of Work. + +During the Term, the Company shall advise Consultant of any and all promotional activities with respect to its securities, prior to the commencement of such activities, including, but not limited to, press releases and engagements with other investment relations firms or other service providers providing services similar to those or the Services provided in a Statement of Work. + +CONSULTING SERVICES & COMPENSATION. Commencing on the Effective Date, the Consultant will be retained as a Consultant and independent contractor for the Company for the Term as set forth in Section 3. For services rendered hereunder during the term, the Consultant shall receive: + +A cash pre-payment of US$150,000 which Consultant acknowledges it received directly from an investor participating in the Company's March 2020 convertible debenture offering and that no additional cash payment is due and payable under this Agreement. + +A total of 100,000 of the Company's restricted common stock issued under and pursuant to the terms of Regulation D under the Securities Act of 1933 (the "Shares") shall be issued upon execution of this contract provided that the issuance of the Shares shall be subject to prior approval of the Board of Directors. The company shall cause its counsel to provide an opinion letter for removal of any legend when and if such legend may be removed in accordance with applicable law. + + + + + +A one time issuance of 50,000 Common Stock options priced at the Nasdaq Official Closing Price ("NCOP") on the date of approval of the Board of Directors of the company. All options shall vest monthly for six months. + +A total of 100,000 RSA's ("Restricted Stock Awards") that vest immediately, subject to prior approval of the Board of Directors. + +TERM & TERMINATION. This Agreement is for a term (the "Term") of 12 months from the Effective Date on June 1s t 2020 and expiring May 31st 2021. + +(a) In the case that the company would not like to extend the terms of agreement for an additional month. The company must notify the consultant within 5 days of the conclusion of the 12 month term. Without notification the contract will automatically extend for an additional month of service. + +Upon termination, Consultant agrees to perform the necessary information transfer required at the time. + +CONFIDENTIALITY. All knowledge and information of a proprietary and confidential nature relating to the Company which the Consultant obtains during the Consulting period, from the Company or the Company's employees, agents or Consultants shall be for all purposes regarded and treated as strictly confidential for so long as such information remains proprietary and confidential and shall be held in trust by the Consultant solely for the Company's benefit and use and shall not be directly or indirectly disclosed in any manner whatsoever by the Consultant. + +CONSULTANT'S REPRESENTATIONS & WARRANTIES. Consultant represents and warrants to the Company as follows: + +The Consultant (i) has adequate means of providing for the Consultant's current needs and possible personal contingencies; (ii) is acquiring the Shares for investment and not with a view to their distribution and has no need for liquidity in this investment; (iii) is able to bear the substantial economic risks of an investment in the Shares for an indefinite period; and (iv) is an "accredited investor" as defined in Rule 501 of Regulation D of the Securities Act of 1933, as amended. + +Consultant is not under any legal obligation, including any obligation of confidentiality or non-competition, which prevents Consultant from executing or fully performing this Consulting Agreement, or which would render such execution or performance a breach of contract with any third party, or which would give any third party any rights in any intellectual property which might be developed by Consultant hereunder; and + +Consultant shall perform the Services hereunder in accordance with the terms of this Agreement and applicable regulations, guidelines and licensing requirements; and + +Consultant has all requisite power and authority to execute, deliver, and perform this Agreement, and this Agreement has been duly authorized, executed and delivered by Consultant and is Consultant's legal, valid and binding obligation, and is enforceable as to Consultant in accordance with its terms. + +The Consultant certifies, under penalties of perjury that the Consultant is not subject to backup withholding as a result of a failure to report all interest or dividends, or because the Internal Revenue Service has notified the Consultant that the Consultant is no longer subject to backup withholding, and that Consultant has provided the Company an accurate taxpayer ID number. + +SEVERABILITY. In the event any provision of this Consulting Agreement is determined by a court of competent jurisdiction to be unenforceable, the parties will negotiate in good faith to restore the unenforceable provision to an enforceable state and to provide reasonable additions or adjustments to the terms of the other provisions of this Consulting Agreement so as to render the whole Consulting Agreement valid and binding to the fullest extent possible, and in any event, this Consulting Agreement shall be interpreted to be valid and binding to the fullest extent possible. + +NON-DISCLOSURE OF TERMS. The terms of this Agreement shall be kept confidential, and no party, representative, attorney or family member shall reveal its contents to any third party except as required by law or as necessary to comply with law or preexisting contractual commitments. + + + + + +INDEMNIFICATION. Consultant shall indemnify, defend and hold harmless the Company, the Parent, and each of their members, their affiliates and their respective directors, officers, employees, representatives, agents, successors and assigns (collectively, "Indemnitees") from and against any and all claims, losses, liabilities, damages, costs, expenses (including, without limitation, attorneys fees and expenses) demands, fines, penalties, injunctions, suits and causes of action of any kind or nature whatsoever (collectively referred to as "Damages") instituted by any third party and arising out of Consultant's performance of services under this Consulting Agreement, unless said Damages arise out of the negligence or willful misconduct of the Company, its members, affiliates and their respective directors, officers, employees, representatives, agents, successors and assigns. + +SEC & LEGAL COMPLIANCE. Consultant hereby represents that it has in place policies and procedures relating to, and addressing, with the commercially reasonable intent to ensure compliance with, all applicable securities laws, rules and regulations, including but not limited to the use, release or other publication of forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act and disclosure requirements outlined in Section 17B of the Exchange Act regarding the required disclosure of the nature and terms of its relationship with the Company in any and all literature or other communication(s) relating to these services, including but not limited to: Press Releases, letters to investors and telephone or other personal communication(s) with potential or current investors. In addition, Consultant acknowledges that United States securities laws and the rules and regulations promulgated thereunder prohibit any person with material, non- public information about a company from purchasing, selling, trading, or entering into options, puts, calls or other derivatives in respect of securities of such issuer or from communicating such information to any other person or entity and Consultant shall comply with such laws, rules and regulations. Consultant will take no action to manipulate the market price of the Company's securities in violation of law or regulation, nor pay or otherwise induce others to take any such actions, nor publish comments about the Company without appropriately disclosing payments received therefor. + +MISCELLANEOUS + +This Consulting Agreement shall be governed by, and construed pursuant to the laws of the State of New York, applicable to agreements made and performed wholly within such State. Any disputes under this Consulting Agreement shall be resolved by appropriate proceedings in the state of New York. + +This Consulting Agreement may not be changed orally, but may be changed only in a writing executed by the party to be charged with enforcement. + +If any terms and conditions of this Consulting Agreement shall be held to be illegal, invalid or otherwise unenforceable by a court of competent jurisdiction, all remaining terms and conditions shall remain in full force and effect + +IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the Effective Date. + +Sphere 3D Corp. + +/s/ Peter Tassiopoulos + +Name: Peter Tassiopoulos + +Title: CEO + +GROUPE PARAMEUS CORP. + +/s/ Samuel Kafkas + +Name: + +Title: President + + + + + +EXHIBIT A + +Consultant Services + +The Consultant agrees, to the extent reasonably require in the conduct of its business with the Company, to place at the disposal of the Company its judgment and experience and to provide business development services to the Company, including, but not limited to, the following: + +a. Advise and assist the company in developing and implementing appropriate plans and materials for presenting the Company and its business plan, strategy and personnel to the financial community. + +b. With the cooperation of the Company, maintain an awareness during the term of the agreement of the Company's plan's and strategy as it relates to the financial community. + +c. Create awareness of the company among investors and media. + +d. Assist the Company in steps for financial and public relations. \ No newline at end of file diff --git a/full_contract_txt/SPIENERGYCO,LTD_03_09_2011-EX-99.5-OPERATIONS AND MAINTENANCE AGREEMENT.txt b/full_contract_txt/SPIENERGYCO,LTD_03_09_2011-EX-99.5-OPERATIONS AND MAINTENANCE AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..9b3f423328b374147d932d103fcef0d4b2794ca6 --- /dev/null +++ b/full_contract_txt/SPIENERGYCO,LTD_03_09_2011-EX-99.5-OPERATIONS AND MAINTENANCE AGREEMENT.txt @@ -0,0 +1,579 @@ +Exhibit 99.5 + +[*] Designates portions of this document that have been omitted pursuant to a request for confidential treatment filed separately with the Commission. + +OPERATIONS AND MAINTENANCE AGREEMENT + +Service Provider: Solar Power, Inc. SEF Host Customer: Aerojet — Phase 1 SEF Site Location: Rancho Cordova, CA + +THIS OPERATIONS AND MAINTENANCE AGREEMENT (this "Agreement") is made and entered into as of the latest date referenced on the signature page below (the "Effective Date"), by and between Solar Tax Partners 1, LLC, a California limited liability company ("Owner"), and Solar Power, Inc. ("Service Provider"). Owner and Service Provider are sometimes hereinafter referred to individually as a "Party" and collectively as the "Parties." + +RECITALS + +A. Owner operates a solar energy facility (the "SEF"), and more particularly defined in Exhibit A hereto on the premises (the "Premises") described in Exhibit B hereto for the purposes of providing electric power to the Owner's host customer, Aerojet — Rancho Cordova, CA (the "User"); + +B. Owner desires to retain the services of Service Provider to operate and manage the SEF and provide scheduled maintenance of the SEF, and Service Provider is willing to perform such services upon the terms and conditions set forth in this Agreement. + +AGREEMENT + +In consideration of the foregoing recitals, the mutual agreements, representations, warranties and covenants set forth in this Agreement and the Exhibits hereto, and other good and valuable consideration, the receipt of which is hereby acknowledged, Owner and Service Provider agree as follows: + +ARTICLE 1. RESPONSIBILITIES OF SERVICE PROVIDER + +1.1 Appointment of Service Provider. + +(a) Owner hereby appoints Service Provider, and Service Provider hereby accepts the appointment, to perform the SEF operations and maintenance services ("Services") on behalf of Owner as of the Services Commencement Date as further described in Exhibit C hereto in accordance with and subject to the terms and conditions set forth in this Agreement. + +(b) Except as otherwise expressly provided in this Agreement, Service Provider shall perform the Services and its obligations under this Agreement, and act at all times as an independent Service Provider of Owner. None of Service Provider's employees shall be, or shall be considered to be, employees of Owner. Service Provider shall be fully responsible for the payment of all wages, salaries, benefits and other compensation to its employees. This Agreement is not intended to create, and shall not be construed to create, and neither Party shall be or constitute, or be deemed or construed to be or constitute, under any circumstances or for any purpose whatsoever, a partner, joint venturer, agent (except as specifically provided in this Agreement) or legal representative of the other Party, and the Parties expressly disclaim any intention to create a partnership, joint venture, association or other such relationship. Neither Party is granted any right or authority to assume or create any obligation or responsibility, express or implied, on behalf of or in the name of the other Party, or to bind the other Party in any manner (except as specifically provided in this Agreement). + +1.2 Performance of Maintenance Services. Service Provider shall perform the maintenance portion of the Services in a clean, safe, efficient and environmentally reasonable manner and maintain the SEF in good operating and mechanical condition in accordance with this Agreement and (i) all applicable laws and permits, (ii) all applicable express warranties and guarantees provided by manufacturers, suppliers, or Service Providers who provided materials or labor under the Engineering, Procurement and Construction Agreement dated September 30, 2009 (the "EPC Agreement") for the SEF subject to the terms and limitations thereof, and (iii) all manufacturer's maintenance instructions and specifications. + +1.3 Performance Objectives. Service Provider shall perform the Services and its obligations under this Agreement in a manner that (a) insures the operation of the SEF within all required operational parameters and requirements, (b) preserves all warranties provided by manufacturers, suppliers, or Service Providers who provided materials or labor under the EPC Agreement relating to the SEF, subject to Force Majeure, (c) maintains the SEF, and + +1 + + + + + + + +(d) seeks to minimize the variable operating costs of and wear and tear on the SEF, including using commercially reasonable efforts to achieve industry standard levels of SEF availability. + +1.4 Non-Covered Services. + +(a) The Services shall not include, and Service Provider shall not be responsible for, any operations, maintenance, repair, or other services beyond the Services set forth in Exhibit C (such non-covered services referred to hereinafter as "Non-Covered Services"). All work associated with Non- Covered Services will be billed according to the terms of Section 2.2. Any studies or other services required by Owner to review options to optimize system performance will be provided as Non-Covered Services. + +(b) The Performance of any Non-Covered Services by Service Provider shall require a written request from Owner specifying the Non-Covered Services to be performed by Service Provider. Notwithstanding the foregoing, if (i) the costs of Non-Covered Services to be performed by Service Provider do not exceed $500.00 in any single instance, or (ii) the Non-Covered Services are provided by Service Provider on an emergency basis to prevent an imminent danger of injury, loss, or damage (exceeding $500.00), Service Provider shall attempt to notify Owner via telephone prior to the performance of any Non-Covered Services and shall be authorized to proceed with the performance of such Non-Covered Services upon receiving verbal approval from Owner. Should Service Provider be unable to contact Owner prior to providing any Non-Covered Services on an emergency basis, Service Provider shall be authorized to perform such emergency Non-Covered Services without prior approval from Owner and shall notify Owner immediately thereafter in writing specifying the nature of the emergency and the Non-Covered Services provided. + +(c) Service Provider shall perform any Non-Covered Services only to the extent Service Provider is capable of, and licensed to, provide such Non- Covered Services and in accordance with the provisions of this Agreement. + +1.5 Permits. Service Provider shall identify, procure, obtain, maintain and comply with all permits that may be required under applicable laws for or in connection with the performance of Services (and Non-Covered Services as actually provided by Service Provider) and that need to be procured, obtained and maintained by or in the name of Service Provider. Owner shall provide Service Provider with such assistance and cooperation as may reasonably be required in order to obtain and maintain all such Permits. Service Provider shall submit copies of all applications for, and proposed forms of, all such Permits to Owner with sufficient time to allow for Owner's review and approval. + +1.6 Cooperation with Other Service Providers. Service Provider acknowledges that Owner has retained, and may from time to time retain, other Service Providers to provide maintenance, administrative and management services for Owner in connection with the SEF or otherwise at the Premises. Service Provider shall cooperate and coordinate its activities hereunder with such other Service Providers. Service Provider shall not be responsible in any way for any services provided by other Service Providers retained by Owner. Owner shall instruct all other Service Providers to coordinate the performance of services with Service Provider so as to not interfere with Service Provider's performance of Services. + +1.7 Personnel Standards. + +(a) Service Provider's employees shall be qualified (and if required by applicable law, licensed, certified or registered) and experienced in the functions to which they are assigned and shall meet the requirements of all permits, all applicable laws and the then-current SEF maintenance manuals (to the extent copies of which have been provided to Service Provider by Owner). If requested, Service Provider shall provide to Owner evidence of the competence of such personnel including details of their previous experience and qualifications. If Owner or User reasonably determines an employee of Service Provider to be under-qualified, disruptive, non-cooperative or otherwise undesirable at the Premises, Owner or User may request the immediate removal of such employee from the Premises for any existing or future delivery of the Services and the replacement of such employee with a different employee of Service Provider; provided that Owner or User, as the case may be, will use commercially reasonable efforts to provide reasonable notice to Service Provider of the need for such proposed removal. Neither Owner's or User's request to Service Provider to remove an employee, nor Service Provider's removal of an employee following Owner's or User's request, shall relieve Service Provider of any of its obligations hereunder or be construed as a waiver by Owner or User of any of its rights under this Agreement. + +(b) Service Provider shall institute policies to forbid and prevent the possession or use of firearms, alcohol and illegal drugs at the Premises. Service Provider shall institute policies that require post-accident and for-cause drug or alcohol testing. Service Provider shall institute policies that require the immediate removal and permanent expulsion from the Premises, and from any activity associated with the Services being performed at the Premises, of any individual person who at any time is found in possession of firearms, alcohol or illegal drugs at the Premises or otherwise not in compliance with this Section 1.6. + +1.8 O&M Data and Records. + +(a) Service Provider shall prepare and maintain all reports and other information relating to the SEF maintenance (the "SEF O&M Reports") and make such SEF O&M Reports available to Owner (i) within ten (10) business days following performance of any Services under this Agreement and (ii) upon reasonable request at any time + +2 + + + + + + + +by Owner, within ten (10) business days following such request. Service Provider shall make the SEF O&M Reports available to Owner in hard copy and electronic formats. + +(b) Service Provider shall prepare reports and data related to the maintenance of hazardous materials introduced on-site by the Service Provider at the SEF in a manner complying with all applicable laws. + +1.9 Performance of Operational Services Service Provider shall perform the operational portion of the Services in a professional manner consistent with standards for the management and operation of an SEF of this size and type. + +ARTICLE 2. COMPENSATION AND PAYMENT + +2.1 Services Fee. + +(a) As full compensation to Service Provider for the performance of Services hereunder, Owner shall pay Service Provider the Services Fee ("Services Fee") set forth on Exhibit D hereto. + +(b) Unless agreed otherwise in writing by Owner or pursuant to Section 1.4, the payment of Services Fee shall be full consideration for all time and materials used by Service Provider in the performance of Services and Service Provider shall not be entitled to any additional cost reimbursement for any materials used during Services. + +2.2 Billing for Non-Covered Services. + +(a) In the event that Service Provider provides any Non-Covered Services (or any other services not included within the scope of the Services), Service Provider shall submit an invoice and Owner shall compensate Service Provider for such services per the Billing Rate Schedule in Exhibit D. Third party services will be billed directly to Owner by the applicable third party and shall be paid by Owner directly in a timely manner. + +(b) Service Provider shall invoice Owner within thirty (30) days of completion of any Non-Covered Services. + +2.3 Terms of Payment. Owner shall pay Service Provider within thirty (30) days after the invoice date. Fees are conditioned upon timely payment and any past due balance will accrue interest at the monthly rate of one and one half percent (1.5%). + +2.4 Taxes. Notwithstanding any provision in this Agreement to the contrary, amounts set forth in this Agreement are inclusive of sales, use, ad valorem, business or any other taxes duties, or other fees, assessments, or charges payable by Service Provider on the Services provided by Service Provider hereunder. + +2.5 User has No Obligation to Pay. Owner and Service Provider each acknowledge that User shall have no obligation to pay any amounts whatsoever under this Agreement. + +ARTICLE 3. TERM; TERMINATION + +3.1 Term. + +(a) The term of this Agreement shall commence on the Services Commencement Date and remain effective for ten (10) years (the "Initial Term") unless terminated in accordance with its terms. This Agreement shall be subject to an automatic extension for consecutive one (1) year periods thereafter (each, an "Extension Term" and together with the Initial Term, the "Term"), unless terminated (i) in accordance with its terms or (ii) upon thirty (30) days' written notice by either Party to the other Party. + +(b) Notwithstanding the foregoing, either Party may terminate this Agreement at any time with immediate effect by written notice to the other Party, if such other Party is in breach of its representations, warranties, obligations and covenants under the terms of this Agreement, which breach has remained uncured for more than thirty (30) days after initial notice of such breach from the nonbreaching Party to the other Party. + +3.2 Obligations Following Termination. Within five (5) days after the termination or expiration of this Agreement, and upon Owner's payment in full of the amounts due Service Provider under the Agreement, Service Provider shall deliver to Owner all of the SEF O&M Reports, SEF books, records and property in its possession or under its control, and all materials, supplies, consumables, manuals and any other items furnished to Service Provider by Owner. + +ARTICLE 4. INSURANCE + +4.1 Service Provider Insurance. Within thirty (30) days after the Effective Date, Service Provider shall provide a certificate of insurance and thereafter shall maintain the following insurance during the Term with insurance carriers reasonably acceptable to Owner: + +(a) Commercial General Liability. Service Provider shall provide and maintain commercial general liability insurance with combined single policy limits not less than Two Million Dollars ($2,000,000) for bodily injury or property damage for each occurrence and in the aggregate, including broad form contractual liability insurance, broad form property damage, personal injury, products and completed operations insurance. + +(b) Automobile Liability. Service Provider shall provide and maintain business auto liability insurance covering owned, non-owned and hired automobiles in the amount of One Million Dollars ($1,000,000) combined + +3 + + + + + + + +single policy limit for bodily injury and property damage for each accident. + +(c) Worker's Compensation. Service Provider shall provide and maintain worker's compensation insurance as required by applicable law where the Services are performed and employer's liability insurance with a limit of liability of One Million Dollars ($1,000,000) for each accident and in the aggregate. + +(d) Excess Liability Insurance. Service Provider shall provide and maintain excess liability insurance covering employer's liability, commercial general liability, and business automobile liability, in the amount of Five Million Dollars ($5,000,000) combined single limit policy limit per occurrence and in the aggregate for bodily injury and property damage. + +(e) Primary Insurance. All policies of insurance referred to in this Section 4.1 shall be endorsed: (i) to specify that they are primary to and not excess to or on a contributing basis with any insurance or self-insurance maintained by Owner, Owner and User (and their respective Affiliates) or any SubService Providers in respect of losses arising out of or in connection with the Services; (ii) to include Owner, Owner, User and, upon User's request and if applicable, User's landlord, or a subsequent owner, tenant or subtenant of the Premises as additional insureds; and (iii) contain a standard severability of interests clause. + +(f) Payment of Deductible. The payment of any deductible for any insurance required pursuant to this Section 4.1 shall be the responsibility of Service Provider, unless the loss covered by such insurance is caused by the negligence or willful misconduct of Owner, its officers, directors, agents, employees, and assigns, in which case the deductible shall be paid by Owner. + +(g) Waiver of Subrogation. Service Provider shall require that its insurers release and waive all rights of subrogation against Owner, User, User's landlord, if applicable, or a subsequent Owner, tenant or subtenant of the Premises with respect to any insurance carried by Service Provider, whether or not required by this Agreement. + +4.2 General. The provisions of this Article 4 do not modify, change or abrogate any responsibility of Service Provider stated elsewhere in this Agreement. Owner assumes no responsibility for the solvency of any insurer or the failure of any insurer to settle any claim. + +ARTICLE 5. INDEMNIFICATION + +5.1 Indemnification. Each party ("Indemnifying Party") shall indemnify the other party, its officers, directors, agents, employees, and assigns (each, an "Indemnified Party"), and undertake to defend and hold the Indemnified Party harmless from and against any claim, demand, suits, cause of action, losses, penalties, obligations, liabilities, damages, and expenses (including court costs, reasonable attorneys' fees, interest expenses and amounts paid in compromise or settlement) ("Loss") arising out of personal injury or third party property damages to the extent caused by or arising out of the fault of or negligent acts or omissions of the Indemnifying Party. + +5.2 Claims for Indemnification. The following provisions shall apply to any claim for indemnification pursuant to this Article 5 (each, an "Indemnity Claim"): + +(i) If an Indemnified Party determines that it is entitled to indemnification under this Section 5, such Indemnified Party shall promptly notify the Indemnifying Party in writing of the Loss specifying (to the extent that such information is available) the following: the factual basis for the Indemnity Claim and the amount of the Indemnity Claim or, if an amount is not then determinable, and, if an estimate is feasible in the circumstances, an estimate of the amount of the Indemnity Claim; + +(ii) a reasonably detailed description of the basis for its potential claim for indemnification with respect to such Indemnity Claim; and + +(iii) a complete copy of all notices, pleadings and other papers related to such Indemnity Claim that have been received by the Indemnified Party prior to the date such notice is provided to Indemnifying Party; provided that failure to give such notice or to provide such information and documents shall not relieve Indemnifying Party of any indemnification obligation it may have under this Article 5 unless and only to the extent that such failure shall materially diminish the ability of Indemnifying Party to respond to the Indemnity Claim or to defend the Indemnified Party. + +(b) The Indemnified Party agrees to provide all reasonably necessary or useful information, assistance and authority to settle and/or defend any Loss; provided that failure to do so will not affect the indemnity except to the extent the Indemnifying Party is prejudiced thereby. In the event of a Loss claimed by a third party, the selection of counsel, the conduct of the defense of any lawsuit, arbitration, or other proceeding, and any settlement shall solely be within the Indemnifying Party's control, provided that the Indemnified Party shall have the right to participate in the defense of such Loss using counsel of its choice, at its expense. No settlement that would impose any costs or expense upon the Indemnified Party shall be made without such Party's prior written consent. + +(c) Any dispute as to whether or not the Indemnified Party's right to indemnification applies, and the amount of the Indemnity Claim (as it may have been compromised or settled by the Indemnified Party, or determined in a proceeding, pending resolution of such dispute) shall be resolved in accordance with the dispute resolution procedures set forth in Article 6. + +ARTICLE 6. DISPUTE RESOLUTION AND ARBITRATION + +4 + + + + + + + +6.1 If disputes or disagreements arise related to this Agreement, Owner and Service Provider each commit to resolving such disputes or disagreements in an amicable, professional and expeditious manner so as to avoid unnecessary losses, delays and disruptions to the Services. + +6.2 Owner and Service Provider will first attempt to resolve disputes or disagreements through discussions between their respective representatives. + +6.3 [reserved] + +6.4 In the event of a dispute, claim, or controversy arising out of or in connection with this Contract, the Parties through their designated representatives or program managers agree to confer and attempt to resolve the matter informally in good faith. If such dispute cannot be resolved in this manner within ten (10) calendar days after notice of the dispute is given to the other Party, then the matter shall be referred to the Parties' senior officers for their review and resolution. If the matter cannot be resolved in good faith by such officers within fifteen (15) calendar days following such referral, the matter shall be submitted to non-binding mediation. Such mediation shall commence no later than thirty (30) calendar days after submission of the dispute and shall be conducted in the locality where the Services have been performed and in accordance with the then prevailing rules of the Construction Industry Mediation Rules of the American Arbitration Association. The mediation shall be conducted by one neutral mediator, who shall have experience in the general subject matter to which the dispute relates and who shall be agreed to by the Parties. In the event that the dispute is not resolved pursuant to such mediation, each Party may pursue any rights and remedies as each may have, whether at law or in equity. EACH OF THE PARTIES HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY DISPUTE ARISING OUT OF OR RELATING TO THIS CONTRACT. During the course of the dispute resolution procedures provided in this Article 6 (Dispute Resolution), Service Provider shall continue to perform its obligations hereunder in good faith until the final resolution of the dispute, claim or controversy, so long as there has not occurred an event of default by Owner which is not cured within the applicable period under Section 3.1. + +ARTICLE 7. CONFIDENTIAL INFORMATION + +7.1 Confidentiality. + +(a) Confidentiality. Except as required under applicable law, each Party shall hold in confidence all documents and other information, whether technical or commercial, relating to this Agreement or the design, financing, construction, ownership, operation or maintenance of the SEF that is of a confidential nature and that is supplied to it by or on behalf of the other Party. The Party receiving such documents or information shall not publish or otherwise disclose them or use them for its own purposes (otherwise than as may be required by it, its professional advisers, or potential or actual lenders or investors, or potential or actual subcontractors to perform its obligations or to assert its rights under this Agreement). Each Party further agrees, to the extent requested by the supplier of such information, to require its subcontractors, vendors, suppliers and employees to enter into appropriate nondisclosure agreements relative to such confidential information, prior to the receipt thereof. To the extent reasonably required, confidential information may be made available to potential debt and equity investors and as necessary subject to a mutually acceptable confidentiality agreement or to respective advisors who are bound to confidentiality by applicable rules of professional conduct or by mutually acceptable confidentiality agreements. The provisions of this Section 7.1 shall not apply to information within any one of the following categories or any combination thereof: (1) information that was in the public domain prior to the receiving Party's receipt or that subsequently becomes part of the public domain by publication or otherwise, except by the receiving party's wrongful act; (2) information that the receiving Party can demonstrate was in its possession prior to receipt thereof from the disclosing Party and not otherwise subject to an obligation of confidentiality; or (3) information received by a Party from a third party having no obligation of secrecy with respect thereof. + +(b) The obligations of the Parties under this Section will survive for a period of two (2) years from and after the expiration or termination of the Agreement. + +ARTICLE 8. NOTICES + +8.1 Notices. All notices, requests, statements or payments will be made to the addresses and persons specified on the signature page below. All notices, requests, statements or payments will be made in writing. Notices required to be in writing will be delivered by hand delivery, overnight delivery or U.S. mail. Notice by hand delivery or overnight delivery will be deemed to have been received when delivered. A Party may change its address by providing notice of the same in accordance with the provisions of this section. + +ARTICLE 9. ASSIGNMENT; BINDING EFFECT + +9.1 Assignment; Binding Effect. + +(a) Service Provider shall not, without the prior written consent of Owner, which consent will not be unreasonably withheld or delayed, assign, pledge or transfer all or any part of, or any right or obligation under, this Agreement, whether voluntarily or by operation of law, and any such assignment or transfer without such consent will be null and void; provided, however, that notwithstanding the foregoing, Service Provider may, without the consent of Owner, assign, + +5 + + + + + + + +pledge or transfer all or any part of Service Provider's payment rights under this Agreement (i) to any affiliate of Service Provider, (ii) to any party that acquires Service Provider or all or substantially all of Service Provider's assets, or (iii) for security purposes in connection with any financing and, provided further, that Service Provider shall remain fully liable for the performance of all of Service Provider's obligations under this Agreement. Service Provider shall deliver notice of any such assignment, pledge or transfer to Owner in writing as soon as reasonably practicable thereafter. Owner agrees to execute such reasonable consents to assignment and other documents, and to provide such information, as is reasonably requested by Service Provider in connection with any such assignment, pledge or transfer. Any payment made by Owner to Service Provider after the effective date of such assignment, pledge or transfer and within ten (10) business days after receipt of Service Provider's written notice, shall be deemed payment to the assignee, pledgee, or transferee identified in Service Provider's notice. In addition, Service Provider may subcontract any or all of its duties hereunder, but no such subcontract shall relieve Service Provider of any such subcontracted duties + +(b) Owner may, without the consent of Service Provider, assign, pledge or transfer all or any part of, or any right or obligation under this Agreement (i) to any affiliate of Owner (including any affiliate of Owner's manager), (ii) to any party that acquires Owner or all or substantially all of Owner's assets, (iii) to User, or (iv) for security purposes in connection with any financing or other financial arrangements regarding the SEF, provided, however, that Owner shall remain fully liable as a guarantor for all of its payment obligations under this Agreement. Owner shall deliver notice of any such assignment, pledge or transfer to Service Provider in writing as soon as reasonably practicable thereafter. Service Provider agrees to execute such reasonable consents to assignment and other documents, and to provide such information, as is reasonably requested by Owner in connection with any such assignment, pledge or transfer. + +(c) Subject to the foregoing restrictions on assignment, this Agreement will inure to the benefit of and be binding upon the Parties and their respective successors and permitted assigns. + +9.2 Cooperation with Financing. Service Provider acknowledges that Owner will be financing the acquisition of the SEF and Service Provider agrees that it shall reasonably cooperate with Owner and its financing parties in connection with such financing for the SEF, including the furnishing of such information and the giving of such certificates; provided that the foregoing undertaking shall not obligate Service Provider to materially change any rights or benefits, or materially increase any burdens, liabilities or obligations of Service Provider, under this Agreement (except for providing notices and additional cure periods to the financing parties with respect to Events of Defaults with respect to Owner as a financing party may reasonably request). + +ARTICLE 10. MISCELLANEOUS + +10.1 Hazardous Conditions. Service Provider is not responsible for any Hazardous Conditions encountered at the Premises. Upon encountering any Hazardous Conditions, Service Provider will stop work immediately in the affected area and duly notify Owner and, if required by any legal requirements, all government or quasi-government entities with jurisdiction over the Premises. "Hazardous Conditions" are any materials, wastes, substances and chemicals deemed to be hazardous under applicable legal requirements, or the handling, storage, remediation, or disposal of which are regulated by applicable legal requirements. + +(a) Upon receiving notice of the presence of suspected Hazardous Conditions, Owner shall take the necessary measures required to ensure that the Hazardous Conditions are remediated or rendered harmless. Such necessary measures shall include Owner retaining qualified independent experts to (i) ascertain whether Hazardous Conditions have actually been encountered, and, if they have been encountered, (ii) prescribe the remedial measures that Owner must take either to remove the Hazardous Conditions or render the Hazardous Conditions harmless. + +(b) Service Provider shall be obligated to resume Services at the affected area of the Premises only after Owner's expert provides it with written certification that (i) the Hazardous Conditions have been removed or rendered harmless and (ii) all necessary approvals have been obtained from all government and quasi-government entities having jurisdiction over the Premises. + +(c) To the fullest extent permitted by law, Owner shall indemnify, defend and hold harmless Service Provider, and its officers, directors, employees and agents, from and against any and all claims, losses, damages, liabilities and expenses, including reasonable attorneys' fees and expenses, arising out of or resulting from the presence, removal or remediation of Hazardous Conditions at the Premises + +(d) Notwithstanding the preceding provisions of this Section 10.1, Owner is not responsible for Hazardous Conditions introduced to the Premises by Service Provider or anyone for whose acts they may be liable. To the fullest extent permitted by law, Service Provider shall indemnify, defend and hold harmless Owner and Owner's officers, directors, employees and agents from and against all claims, losses, damages, liabilities and expenses, including attorneys' fees and expenses, arising out of or resulting from those Hazardous Conditions introduced to the Premises by Service Provider or anyone for whose acts it may be liable. + +10.2 Governing Law. This Agreement will be governed by the laws of the State of California, without + +6 + + + + + + + +giving effect to the conflicts of laws principles thereof. The parties agree to perform their respective obligations under this Agreement in accordance with applicable laws. + +10.3 Entire Agreement; Amendments. This Agreement (including the exhibits, any written schedules, supplements or amendments) constitutes the entire agreement between the Parties, and shall supersede any prior oral or written agreements between the Parties, relating to the subject matter hereof. Except as otherwise expressly provided in this Agreement, any amendment, modification or change to this Agreement will be void unless in writing and executed by both Parties. + +10.4 Non-Waiver. No failure or delay by either Party in exercising any right, power, privilege, or remedy hereunder will operate as a waiver thereof. No waiver by either Party of a breach of any term or provision contained herein shall be effective unless signed and in writing and signed by the waiving party. No consent by either Party to, or waiver of, a breach by either Party, whether express or implied, shall be construed, operate as, or constitute a consent to, waiver of, or excuse of any other or subsequent or succeeding breach by either Party. + +10.5 Severability. If any part, term, or provision of this Agreement is determined by an arbitrator or court of competent jurisdiction to be invalid, illegal, or unenforceable, such determination shall not affect or impair the validity, legality, or enforceability of any other part, term, or provision of this Agreement, and shall not render this Agreement unenforceable or invalid as a whole. Rather the part of this Agreement that is found invalid or unenforceable will be amended, changed, or interpreted to achieve as nearly as possible the same objectives and economic effect as the original provision, or replaced to the extent possible, with a legal, enforceable, and valid provision that is as similar in tenor to the stricken provision, within the limits of applicable law or applicable court decisions, and the remainder of this Agreement will remain in full force + +10.6 No Third Party Beneficiary. Nothing in this Agreement will provide any benefit to any third party or entitle any third party to any claim, cause of action, remedy or right of any kind. + +10.7 No Recourse to Affiliates. This Agreement is solely and exclusively between the Parties, and any obligations created herein on the part of either Party shall be the obligations solely of such Party. No Party shall have recourse to any parent, subsidiary, partner, member, affiliate, lender, director, officer or employee of the other Party for performance or non-performance of any obligation hereunder, unless such obligations were assumed in writing by the Person against whom recourse is sought. + +10.8 Counterparts. This Agreement may be executed in any number of counterparts, and in original or portable document format, and by the different parties hereto on the same or separate counterparts, each of which shall be deemed to be an original instrument, and all of which together shall constitute one and the same Agreement. + +10.9 Further Assurances. The Parties shall at their own cost and expense do such further acts, perform such further actions, execute and deliver such further or additional documents and instruments as may be reasonably required or appropriate to consummate, evidence, or confirm the agreements and understandings contained herein and to carry out the intent and purposes of this Agreement. + +10.10 General Interpretation. The terms of this Agreement have been negotiated by the Parties hereto and the language used in this Agreement shall be deemed to be the language chosen by the Parties hereto to express their mutual intent. This Agreement shall be construed without regard to any presumption or rule requiring construction against the Party causing such instrument of any portion thereof to be drafted, or in favor of the Party receiving a particular benefit under this Agreement. No rule of strict construction will be applied against any person. + +10.11 Access to Premises. Owner shall furnish reasonable access to the Premises in order to allow Service Provider to perform the Services. Service Provider's access to the Premises (including its agents, employees, and representatives) shall be subject to User's rules and regulations, security policies and guidelines and access control systems and procedures (as provided by Owner to Service Provider as of the Effective Date). Owner shall coordinate and provide for User's, or User's agent's, supervision of Service Provider, as may be required by User, in a manner that shall not disrupt Service Provider's performance of the Services. + +10.12 No Claims against the Premises. Service Provider understands and acknowledges that the SEF is separate from, and not an improvement to or a part of the Premises and that the SEF is separately owned by Owner. Owner, and not User, any owner, landlord, tenant, or subtenant of the Premises, is solely responsible for the payment of all Services Fees, and Service Providers shall have no claim against the Premises for unpaid Services Fees. Service Provider agrees not to attempt to record any lien against the Premises for unpaid Services Fees. + +10.13 Headings. The headings of the Sections of this Agreement are inserted for convenience of reference only and do not form a part or affect the meaning hereof. + +10.14 Public Announcements. Notwithstanding anything to the contrary set forth herein, each Party acknowledges that the other Party (the "Public Party") is or may become a publicly-held company, and in conjunction with its duties as a publicly-held company, such Public Party may from time to time be required to report to the public by filing appropriate disclosure statements with the Securities and Exchange Commission on form 8(k,) periodical reports, or otherwise according to applicable securities laws and regulations, or through press releases (collectively, "Public Information"); provided, however, that unless required by law, the Public Party shall not use the other Party's, Owner's, or User's name or brand in such Public Information without prior written consent of the other Party, which shall not be + +7 + + + + + + + +unreasonably, withheld, conditioned or delayed. To the extent consistent with applicable law, the Public Party shall have given the other Party, Owner, or User advance notice and an opportunity to review and provide comment on such releases. On the Public Party's request, the other Party shall provide a written description of information about such Party as it should appear in such filings. + +10.15 Force Majeure. Notwithstanding anything to the contrary elsewhere in this Agreement, neither Party shall be liable for any failure to comply with its obligations under the this Agreement, other than to pay moneys due, to the extent arising out of any circumstances not within the reasonable control, directly or indirectly, of the Party affected ("Force Majeure"). Force Majeure shall include fire, explosion, flood, earthquake, hurricane, tornado, storm, wind or other unusually adverse weather, civil commotions, civil disobedience, war, rebellion, sabotage, acts of civil or military authority, acts of public enemy, acts of terrorism, boycotts, industry-wide strike or labor difficulties, acts of God, and any actions or inactions by the local utility, but shall not include any inability to make payments that are due hereunder. Each Party shall be entitled to an equitable adjustment for its performance obligations hereunder arising from Force Majeure. A Party claiming Force Majeure shall promptly notify the other party, specifying in reasonable detail the event of Force Majeure, the expected duration, and the steps such party is taking to remedy any delay. + +[SIGNATURE PAGE FOLLOWS] + +8 + + + + + + + +Operations and Maintenance Agreement Aerojet 1 + +INTENDING TO BE LEGALLY BOUND, Owner and Service Provider have signed this Agreement through their duly authorized representatives effective as of the latest date set forth below. + +"OWNER:" + +Date: December 11, 2009 + +SOLAR TAX PARTNERS 1, LLC + +By: /s/ HEK Partners, LLC by William Hedden and Steven Kay + +Printed name: William Hedden and Steven Kay + +Title: Members + +Address: + +1838 15th Street + +San Francisco, CA + +"SERVICE PROVIDER:" + +Date: December 11, 2009 + +SOLAR POWER, INC. + +By: /s/ Todd Lindstrom + +Printed name: Todd Lindstrom + +Title: Executive Vice President + +Telephone: ( 916 ) 745-0900 + +Address: + +1115 Orlando Drive Roseville, CA 95661 + +Telephone: (916) 745-0900 Telefax: (916) 721-0428 + + + + + + + +Opertations and Maintenance Agreement Aerojet 1 + +EXHIBIT A + +SEF DESCRIPTION + +3.6 MW SYSTEM + +(17,632) SPI SP205 MODULES + +(6) (AE 500KW) INVERTERS + +(3) 480V-12.7 KV TRANSFORMERS + +SEF IS A SINGLE AXIS CONERGY TRACKER SYSTEM + +Exhibit A-1 + + + + + + + +Operations and Maintenance Agreement Aerojet 1 + +EXHIBIT B + +DESCRIPTION OF PREMISES + +AEROJET — PHASE 1 + +RANCHO CORDOVA, CA + +Exhibit B-1 + + + + + + + +Operations and Maintenance Agreement Aerojet 1 + +EXHIBIT C + +SCOPE OF SERVICES + +As of the Delivery Date (as defined in the EPC) ("Services Commencement Date"), Service Provider shall provide the Services marked below as frequently as indicated below in accordance with the terms and conditions of this Agreement: + +MAINTENANCE SERVICE SCHEDULE + +Exhibit C-1 + + SERVICES INCLUDED (ONLY IF CHECKED) SERVICE DESCRIPTION SERVICE FREQUENCY þ + + + +INSPECTION OF SEF'S GENERAL SITE CONDITIONS, PV ARRAYS, ELECTRICAL EQUIPMENT, MOUNTING STRUCTURE, DATA ACQUISITION SYSTEM, AND BALANCE OF SYSTEM PROVIDED UNDER EPC. + +BI-ANNUALLY (TBD) + + þ SYSTEM TESTING, INCLUDING STRING LEVEL OPEN CIRCUIT VOLTAGE AND DC OPERATING AMPERAGE TESTS. EVERY 2 YEARS + + o RECALIBRATION OR REPLACEMENT OF DAS SENSORS AND METERS (PER MANUFACTURER'S INSTRUCTIONS) EVERY 3 YEARS + + þ INVERTER PREVENTIVE MAINTENANCE PER MANUFACTURER'S OPERATING GUIDELINES. ANNUALLY + + þ CLEANING OF INVERTER CABINET AIR VENTS BI-ANNUALLY (TBD) þ CLEANING AND CHANGING INVERTER AIR FILTERS (PER MANUFACTURER WARRANTY REQUIREMENTS) ANNUALLY + + þ CLEANING AND REMOVING DUST FROM INVERTER HEAT SINKS (PER MANUFACTURER WARRANTY REQUIREMENTS) BI-ANNUALLY (TBD) + + + + + + + +Operations and Maintenance Agreement Aerojet 1 + +Exhibit C-2 + + SERVICES INCLUDED (ONLY IF CHECKED) SERVICE DESCRIPTION SERVICE FREQUENCY þ + + + +CHECKING TORQUE MARKS AND RE-TIGHTENING APPROPRIATE WIRING CONNECTIONS TO DESIGN SPECIFICATION TORQUE FORCE (PER MANUFACTURER'S GUIDELINES) + +ANNUALLY + + þ CLEANING OF PV ARRAY MODULES (USING CLEAR WATER AND SOFT BRUSH ONLY) BI-ANNUALLY, AS REQUIRED + + þ REMOVAL OF ANY MATERIALS (E.G. TRASH, BIRDS NESTS, ETC.) THAT MAY BE FOUND UNDER THE PV ARRAY MODULES OBSTRUCTING AIRFLOW ANNUALLY + + þ INSPECTION, MAINTENANCE AND TESTING OF MECHANICAL TRACKERS, REPLACEMENT OF FLUIDS BI-ANNUALLY, AS REQUIRED + + þ INSPECT ARRAY MOUNTING STRUCTURE, CARPORT STRUCTURE, CONDUIT RUNS, AND OTHER PHYSICAL COMPONENTS FOR WEAR OR DAMAGE ANNUALLY + + o INSPECT AND REPAIR MODULE WATER SPRAY / RINSING SYSTEM ANNUALLY þ INSPECT AND TEST, AS APPROPRIATE, TRACKING ELECTRICAL COMPONENTS (PER MANUFACTURER'S GUIDELINES) ANNUALLY + + þ + + + +PROVIDE WRITTEN SEF MAINTENANCE REPORT + + + +TEN (10) BUSINESS DAYS FOLLOWING PERFORMANCE OF MAINTENANCE SERVICES + + + + + + + +Operations and Maintenance Agreement Aerojet 1 + +OPERATIONAL AND MANAGEMENT SERVICE SCHEDULE + +GENERAL REQUIREMENTS: + +OWNER IS OBLIGATED TO SATISFY CERTAIN OPERATIONAL REQUIREMENTS IN CONNECTION WITH THAT CERTAIN POWER PURCHASE AGREEMENT DATED MAY 8, 2009 ("PPA"), BETWEEN OWNER AND USER), AND CERTAIN MAINTENANCE AND REPAIR OBLIGATIONS UNDER THAT CERTAIN LEASE DATED DECEMBER ___, 2009 ("LEASE") BETWEEN OWNER AND MASTER TENANT 2008-C, LLC ("MASTER TENANT"). SERVICE PROVIDER AGREES TO PROVIDE OPERATIONAL AND MANAGEMENT SERVICES TO OWNER, INCLUDING WITHOUT LIMITATIONS, TO ADMINISTER THE OPERATIONAL OBLIGATIONS OF OWNER UNDER THE PPA AND THE MAINTENANCE AND REPAIR OBLIGATIONS UNDER THE LEASE, AND TO PROVIDE ADDITIONAL OPERATIONAL AND MANAGEMENT SERVICES AS SET FORTH BELOW. + +OPERATE AND MAINTAIN SEF IN ACCORDANCE WITH PRUDENT INDUSTRY PRACTICES AND APPLICABLE UTILITY STANDARDS AND AS REQUIRED BY THE INTERNAL REVENUE CODE IN ORDER FOR THE OWNER TO QUALIFY FOR AND MAINTAIN ENERGY CREDITS OR CASH GRANT. [SOURCE: PPA 2 (A)] + +INSTALL AND MAINTAIN IN ACCORDANCE WITH PRUDENT INDUSTRY STANDARDS A REVENUE QUALITY METER THAT MEETS UTILITY REQUIREMENTS WITH ELECTRONIC DAS CAPABILITIES. IF REQUESTED BY USER, SERVICE PROVIDER SHALL TEST DAS ANNUALLY AND CERTIFY RESULTS. [SOURCE: PPA 6(A)] + +PRESERVE ALL PPA DATA FOR A MINIMUM OF TWO YEARS FOLLOWING THE COMPILATION OF DATA. [SOURCE: PPA 6(C)] + +ENSURE ALL ENERGY GENERATED BY THE SEF CONFORMS TO UTILITY SPECIFICATIONS, INCLUDING THE INSTALLATION AND MAINTENANCE OF PROPER POWER CONDITIONING AND SAFETY EQUIPMENT, SUBMITTAL OF NECESSARY SPECIFICATIONS, COORDINATION OF UTILITY TESTING AND VERIFICATION. [SOURCE: PPA 7(B)] + +ARRANGE DELIVERY OF ENERGY OUTPUT TO USER AND ANY INSTALLATION AND OPERATION OF EQUIPMENT ON USER'S SIDE NECESSARY FOR ACCEPTANCE AND USE OF THE ENERGY OUTPUT [SOURCE PPA 7(C)] + +PERFORM ALL INVOICING, INVOICE ADJUSTMENTS, AND INVOICE DISPUTES, AND OTHER ACCOUNTING FUNCTIONS RELATED TO THE OPERATION OF THE SEF UNDER THE PPA. [SOURCE: PPA 8 AND 9] + +Exhibit C-3 + + + + + + + +Operations and Maintenance Agreement Aerojet 1 + +PROVIDE AND TAKE REASONABLE MEASURES FOR SECURITY OF THE GENERATING FACILITY AGAINST ACCESS BY UNAUTHORIZED PERSONS, INCLUDING REASONABLE SECURITY FENCING IF APPROPRIATE [SOURCE: PPA 12(A)] + +RESPONSIBLE FOR THE IDENTIFICATION, CLEANUP, REMOVAL, REMEDIATION AND DISPOSAL OF HAZARDOUS MATERIALS USED, GENERATED, TREATED, STORED OR TRANSPORTED TO THE PREMISES. [SOURCE: PPA 13(E)] + +MAINTAIN COMPLETE AND ACCURATE RECORDS ON ALL MATTERS RELATING TO THE SEF AND MAINTAIN DATA AS MAY BE NECESSARY TO DETERMINE WITH REASONABLE ACCURACY ANY ITEM RELEVANT TO THE PPA. [SOURCE: PPA 17] + +TAKE GOOD CARE OF THE SEF; KEEP THE SAME IN GOOD ORDER AND CONDITION; AND MAKE AND PERFORM ALL REPAIRS. ALL REPAIRS SHALL BE AT LEAST EQUAL IN QUALITY AND COST TO THE ORIGINAL IMPROVEMENTS AND SHALL BE MADE IN ACCORDANCE WITH ALL LEGAL REQUIREMENTS, AND THE REQUIREMENTS OF THE PPA AND EASEMENT. THE NECESSITY FOR OR ADEQUACY OF REPAIRS SHALL BE MEASURED BY THE STANDARDS WHICH ARE APPROPRIATE FOR IMPROVEMENTS OF SIMILAR CONSTRUCTION AND CLASS, PROVIDED THAT SERVICE PROVIDER SHALL IN ANY EVENT MAKE ALL REPAIRS REASONABLY NECESSARY TO AVOID ANY STRUCTURAL DAMAGE OR OTHER DAMAGE OR INJURY TO THE SEF. [SOURCE: LEASE 5.02] + +OPERATE THE SEF AS REQUIRED UNDER THE INTERNAL REVENUE CODE AND CASH GRANT GUIDANCE IN ORCDER TO MAINTAIN THE ELIGIBILITY OF THE SEF FOR ENERGY CREDITS UNDER SECTION 48 OF THE INTERNAL REVENUE CODE OR APPLICABLE CASG GRANTS UNDER SECTION 1603 OF THE AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009 [SOURCE: STP1 OA, 4.01(Z), 4.02(W)] + +OBTAIN AND MAINTAIN IN GOOD STANDING ALL PERMITS, LICENSES AND GOVERNMENTAL APPROVALS NECESSARY FOR THE OPERATION AND MAINTENANCE OF THE SEF. [SOURCE: STP1 OA 4.02(B)] + +PROVIDE OWNER WITH SUCH INFORMATION AS NECSSARY FOR OWNER AND MASTER TENANT TO MAKE TIMELY, ACCURATE AND COMPLETE SUBMISSIONS OF REPORTS TO GOVERNMENTAL AGENCIES RELATED TO THE OPERATIONOR MAINTENANCE OF THE SEF. [SOURCE: STP1 OA 4.02 (G)] + +COMPLY WITH THE PROVISIONS OF ALL APPLICABLE LAWS IN THE OPERATION AND MAINTENANCE OF THE SEF, INCLUDING WITHOUT LIMITATION, ALL STATE AND LOCAL ZONING LAWS, BUILDING CODES, HEALTH AND SAFETY CODES AND ALL OTHER GOVERNMENTAL OBLIGATIONS, AND CONTRACTUAL OBLIGATIONS IDENTIFIED TO SERVICE PROVIDER. [SOURCE: STP1 OA 4.02(H)] + +PROVIDE OWNER AND MASTER TENANT OF NOTICE OF ANY WRITTEN OR ORAL NOTICE OF ANY DEFAULT OF FAILURE OF COMPLIANCE; LITIGATION OR CRIMINAL ACTION OR ADMINISTRATIVE PROCEEDINGS, OR COMMUNICATION FROM ANY LENDER OR OTHER PERSON OR GOVERNMENTAL AUTHORITY WHICH IS NOT IN THE ORDINARY COURSE OF BUSINESS, WITH RESPECT TO THE SERVICES [SOURCE: STP1 OA 4.02(K)] + +Exhibit C-4 + + + + + + + +Operations and Maintenance Agreement Aerojet 1 + +IN OPERATING THE SEF, USE COMMERCIALLY REASONABLE EFFORTS TO OBTAIN ALL CONTRACTS, MATERIALS, SUPPLIES, UTILITIES AND SERVICES REQUIRED ON THE MOST ADVENTAGEOUS TERMS AVAILABLE, PROVIDED THAT OWNER SHALL BE OBLIGATED TO PAY THE COST OF ALL MATERIALS AND SUPPLIES. [SOURCE: STP1 OA 4.02(L)] + +OPERATE THE SEF IN A MANNER THAT SATISFIES THE REQUIREMENTS OF ALL COVENANTS AND RESTRICTIONS APPLICABLE TO THE PROPERTY, INCLUDING THE EASEMENT AND THE LEASE, AND PROJECTS GENERATING ENERGY CREDITS. [SOURCE: STP1 OA 4.02(O), 4.02(Y)] + +TAKE ALL ACTIONS NECESSARY TO ENSURE THAT THE PROPERTY CONTAINS NO, AND IS NOT AFFECTED BY THE PRESENCE OF, ANY HAZARDOUS SUBSTANCE, AND TO ENSURE THAT THE PROPERTY IS NOT IN VIOLATION OF ANY FEDERAL, STATE, OR LOCAL STATUTE, LAW, REGULATION, RULE, OR ORDINANCE, INCLUDING ANY ENVIRONMENTAL LAW. SERVICE PROVIDER SHALL PROMPTLY DELIVER TO OWNER AND MASTER TENANT ANY NOTICE RECEIVED FROM ANY SOURCE WHATSOEVER OF THE EXISTENCE OR POTENTIAL EXISTENCE OF ANY HAZARDOUS SUBSTANCE ON THE PROPERTY OR OF A VIOLATION OF ANY FEDERAL, STATE, OR LOCAL STATUTE, LAW, REGULATION, RULE OR ORDINANCE, INCLUDING ANY ENVIRONMENTAL LAW WITH RESPECT TO THE PROPERTY. [SOURCE: STP1 OA 4.02(S)] + +CAUSE TO BE PREPARED AND DELIVERED TO OWNER AND MASTER TENANT THE FOLLOWING: + +WITHIN FIFTEEN (15) DAYS OF THE END OF EACH CALENDAR MONTH + +(i) A REPORT OF ANY CONSTRUCTION ACTIVITY (INCLUDING MONTHLY DRAW REQUESTS AS AND WHEN SUBMITTED TO THE LENDER; ANY AND ALL INSPECTION REPORTS DONE BY OR ON BEHALF OF THE LENDER; ALL ARCHITECT'S REPORTS; AND THE MINUTES OF ALL MEETINGS OF THE MANAGING MEMBER REGARDING ANY ISSUE OF REHABILITATION OF THE PROPERTY); + +(ii) REPORTS OF OPERATIONS, INCLUDING AN UNAUDITED COMPARISON OF ACTUAL OPERATING EXPENDITURES DURING THE APPLICABLE QUARTER WITH THE PROJECTIONS FOR SUCH QUARTER AS SET FORTH IN THE BUDGET APPROVED AND PROVIDED BY MASTER TENANT; + +(iii) AN ANALYTIC REPORT OF THE ENERGY PRODUCED BY THE SEF AND COMPARED TO THE PROJECTED PRODUCTION INCORPORATED INTO THE PROJECTIONS. + +(iv) A REPORT OF SUCH OTHER INFORMATION AS MAY BE DEEMED BY THE OWNER OR MASTER TENANT TO BE MATERIAL TO THE OPERATION OF THE SEF + +IMMEDIATELY: + +(v) FROM TIME TO TIME AS MAY BE REASONABLY REQUESTED BY THE OWNER OR MASTER TENANT, INFORMATION ON THE STATE OF SEF OR ANY OF THE SERVICES; + +(vi) UPON RECEIPT OF NOTICE OF ANY VIOLATION OF ANY HEALTH, SAFETY, BUILDING CODE, OR OTHER STATUTE OR REGULATION, A DETAILED STATEMENT + +Exhibit C-5 + + + + + + + +Operations and Maintenance Agreement Aerojet 1 + +DESCRIBING SUCH MATTERS ALONG WITH ANY WRITTEN NOTICES THEREOF RECEIVED BY ANY FEDERAL, STATE, OR LOCAL GOVERNMENTAL ENTITY. + +(vii) UPON LEARNING OF AN OPERATIONAL CONDITION OR CIRCUMSTANCE WHICH IS EXPECTED TO REDUCE BELOW THE PROJECTED LEVELS THE AMOUNT OF ENERGY CREDITS, A DETAILED STATEMENT DESCRIBING SUCH MATTERS; + +(viii) UPON LEARNING OF ANY MATERIAL DEFAULT OR VIOLATION OF THE EASEMENT, PPA OR UPON ANY TERMINATION OF ANY SUCH DOCUMENTS, A DETAILED STATEMENT DESCRIBING THE NATURE OF SUCH DEFAULT AND ANY ACTIONS THAT THE SERVICE PROVIDER PROPOSES TO TAKE IN RESPONSE TO SUCH DEFAULT OR TERMINATION; OR + +WITHIN TWO (2) DAYS AFTER RECEIPT BY THE COMPANY: + +(ix) COPIES OF ALL REPORTS, NOTICES, FILINGS OR CORRESPONDENCE SENT OR RECEIVED BY THE COMPANY REGARDING THE OCCURRENCE OF ANY EVENT WHICH HAS OR MAY HAVE A MATERIAL ADVERSE EFFECT ON THE SEF (INCLUDING, WITHOUT LIMITATION, ANY REPORTS, NOTICES, FILINGS OR CORRESPONDENCE WITH ANY GOVERNMENTAL AGENCY, DEFAULT NOTICES, NOTICES OF REDUCTIONS OR ELIMINATION OF BENEFITS UNDER ANY FEDERAL, STATE, OR LOCAL PROGRAM PREVIOUSLY ENJOYED BY THE COMPANY, NOTICE OF ANY IRS PROCEEDING INVOLVING THE COMPANY, NOTICE OF ANY DEMAND FOR PAYMENT OR DRAW UNDER ANY CONSTRUCTION COMPLETION GUARANTEE, PERFORMANCE BOND; OR LETTER OF CREDIT REGARDING THE COMPANY; AND NOTICES REGARDING THE PROPERTY'S COMPLIANCE WITH ANY REGULATORY RESTRICTIONS IMPOSED THEREON); AND + +(x) COPIES OF ALL LAWSUITS OR LEGAL PROCEEDINGS OR ALLEGED VIOLATIONS OF LAW, AND NOTICES OF ALL ACTIONS TAKEN, OR PROPOSED TO BE TAKEN, AFFECTING THE SEF. + +[SOURCE: STP1 13.04, MT 13.04] + +Exhibit C-6 + + + + + + + +Operations and Maintenance Agreement Aerojet 1 + +EXHIBIT D + +SERVICES FEE SCHEDULE + +As full compensation to Service Provider for the performance of Services hereunder, Owner shall pay Service Provider the following Services Fee after the Services Commencement Date: + +The Services Fee will escalate at a rate of three percent (3%) per year beginning at the first anniversary of the Services Commencement Date. + +Billing Rate Schedule for Non-Covered Services + +Payment for Non-Covered Services shall be on a Time & Materials Basis per the following schedule: + +Exhibit D-1 + + PAYMENT FREQUENCY INITIAL ANNUAL SERVICES FEE (AS MARKED) o QUARTERLY $41,000 þ SEMI-ANNUALLY o ANNUALLY + + 1. Service Provider Employees billed at $[*] per hour. + + 2. Subcontractor charges will be billed at cost plus [*] percent ([*]%). + + 3. Materials, travel, lodging and other expenses will be billed at direct cost plus [*] percent ([*]%). + + 4. Hourly Rates listed will escalate at a rate of [*]% per year beginning at the first anniversary of the Services Commencement Date. \ No newline at end of file diff --git a/full_contract_txt/SPIENERGYCO,LTD_07_10_2014-EX-10-Cooperation Agreement of 50MWp Photovoltaic Grid-connected Power Generation Project in Yangqiao of~1.txt b/full_contract_txt/SPIENERGYCO,LTD_07_10_2014-EX-10-Cooperation Agreement of 50MWp Photovoltaic Grid-connected Power Generation Project in Yangqiao of~1.txt new file mode 100644 index 0000000000000000000000000000000000000000..301b636bafa02561c72f8fefe5be0a3cafe14168 --- /dev/null +++ b/full_contract_txt/SPIENERGYCO,LTD_07_10_2014-EX-10-Cooperation Agreement of 50MWp Photovoltaic Grid-connected Power Generation Project in Yangqiao of~1.txt @@ -0,0 +1 @@ +Exhibit 10.47 Cooperation Agreement of 50MWp Photovoltaic Grid-connected Power Generation Project in Yangqiao of Fenyi County Party A: People's Government of Fenyi County Party B: Xinyu Xinwei New Energy Co., Ltd. Party A welcomes and supports Party B to invest and develop new energy project in Fenyi County, and Party B is willing to invest and build 50MWp photovoltaic grid-connected power generation project in Fenyi County; both parties, in the principle of equality, mutual benefits, win-win cooperation and solid progress, reach the following cooperation agreement as for relevant matters of the project: I. Party A supports and guarantees the project construction and development of Party B, and will provide the most preferential policies and all- round service in the aspects of preliminary work, construction and grid-connected of the project, and actively coordinate relevant departments and units to help Party B accelerate project construction progress. Party B will give full play to the advantages in funds, talents, technologies, and etc. to accelerate the preliminary work progress of the project, ensure the early commencement of the project and produce benefits upon early completion. II. As required by Party B building PV grid-connected power station project, Party A accepts the Cooperation Agreement of 50MWp Photovoltaic Grid-connected Power Generation Project in Yangqiao Town of Fenyi County signed by Party B and Yangqiao Town of Fenyi County, and actively coordinates Yangqiao Town to perform relevant responsibilities. III. In the principle of win-win cooperation, based on 50MWp photovoltaic grid-connected power generation project in Yangqiao Town, Party B will vigorously promote the application of PV products, improve local energy-saving and emission reduction benefits, increase local fiscal levy, enhance villagers' income and increase villagers' employment. IV. Party B promises that land nature will not be changed for building large-scale PV grid-connected power generation project in the plot; comprehensive development will be carried out according to relevant national stipulations, such commercial crops will be interplanted as agriculture and forestry as well as medicinal materials; local employees will enjoy the priority to be employed; local building materials will be adopted and relevant expenses will be paid on schedule. V. Party B will register a foreign-funded company in Fenyi County before implementing the project; Party A will offer all the preferential policies to the company as per local investment promotion policies for foreign investment introduction. Party A: People's Government of Fenyi County (seal) Rao Cheng (signature) June 25, 2014 Party B: Xinyu Xinwei New Energy Co., Ltd. (seal) Xiahou Min (signature) June 25, 2014 \ No newline at end of file diff --git a/full_contract_txt/SPOKHOLDINGS,INC_06_19_2020-EX-10.1-COOPERATION AGREEMENT.txt b/full_contract_txt/SPOKHOLDINGS,INC_06_19_2020-EX-10.1-COOPERATION AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..1d43ecf26709bbe586b1bb333300dcb3fbae4f7b --- /dev/null +++ b/full_contract_txt/SPOKHOLDINGS,INC_06_19_2020-EX-10.1-COOPERATION AGREEMENT.txt @@ -0,0 +1,91 @@ +Exhibit 10.1 + +COOPERATION AGREEMENT + +This Cooperation Agreement ("Agreement") is entered into as of June 18, 2020, by and between Spôk Holdings, Inc., a Delaware corporation (the "Company"), and White Hat Strategic Partners LP, a Delaware limited partnership, White Hat SP GP LLC, a Delaware limited liability company, White Hat Capital Partners LP, a Delaware limited partnership, and White Hat Capital Partners GP LLC, a Delaware limited liability company (collectively, the "White Hat Parties") (each of the Company and the White Hat Parties, a "Party" to this Agreement, and collectively, the "Parties"). + +RECITALS + +WHEREAS, the White Hat Parties have voting power or sole dispositive power or otherwise have beneficial ownership of 319,708 shares (the "Current Position") of the common stock, par value $0.0001 per share, of the Company (the "Common Stock") as of the date of this Agreement; and + +WHEREAS, as of the date of this Agreement, the Company and the White Hat Parties have determined to come to an agreement with respect to certain matters set forth below; and + +NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the Parties to this Agreement, intending to be legally bound, agree as follows: + +1. Board Nominations; Certain Information. + +(a) Brett Shockley (the "New Director") has provided the Company with responses to a Director and Officer Questionnaire customarily used for NASDAQ-listed companies and certain biographical information in compliance with Item 401 of Regulation S-K as promulgated by the Securities and Exchange Commission (the "SEC") (collectively, the "Information"), has executed all documents required to be executed by directors of the Company, and has cooperated with a background check. (b) Based on the Information, the Nominating and Governance Committee (the "Nominating Committee") of the Board of Directors (the "Board") of the Company and the Board have determined that the New Director may serve as an "independent" director of the Company in accordance with the rules and listing standards of the NASDAQ National Market and applicable rules and regulations of the Securities Exchange Commission (the "SEC"). (c) Concurrently with the execution of this Agreement, the Board shall increase the size of the Board by one and appoint the New Director to the Board to fill the resulting vacancy. Concurrently with the execution of this Agreement, the Board shall also appoint the New Director to the Nominating Committee. (d) Concurrently with the execution of this Agreement, the White Hat Parties shall send a letter to the Corporate Secretary and Treasurer of the Company irrevocably withdrawing (i) the nomination letter they previously sent to the Company on May 26, 2020, and, accordingly, (ii) their nomination (the "Nominations") of three directors for election to the Board at the Company's 2020 Annual Meeting of Stockholders (including any adjournments or postponements thereof, the "2020 Annual Meeting"). (e) The Nominating Committee and the Board shall take all necessary action to nominate Brett Shockley for election to the Board at the 2020 Annual Meeting, and to recommend his election and to support and solicit proxies in the same manner as the other candidates nominated by the Board in the Company's proxy statements for the 2020 Annual Meeting. (f) Nothing in this Agreement shall be deemed to abridge or limit the fiduciary duties of any member of the Board under Delaware law. 2. Representations of the White Hat Parties. The White Hat Parties represent and warrant to the Company as of the date hereof as follows: (a) The White Hat Parties are the beneficial owners of 319,708 shares of Common Stock, such shares of Common Stock constitute all of the Common Stock beneficially owned by the White Hat Parties and the White Hat Parties have no agreements, understandings or undertakings with any third party to share or delegate disposition or voting control over such shares of Common Stock, or to transfer, hypothecate or lend such shares Common Stock. (b) Each of the White Hat Parties has the power and authority to execute and deliver this Agreement. This Agreement (i) has been duly and validly authorized by each of the White Hat Parties, and constitutes a legal, valid and binding obligation of each of the White Hat Parties, enforceable against each of the White Hat Parties in accordance with its terms except as may be limited by bankruptcy, insolvency or similar laws affecting creditors' rights and general equitable principles, (ii) does not require the approval of any investor in or member of the White Hat Parties and (iii) does not violate any law, order of any court or any governmental agency or regulation or the charter or any organizational document + + + + + +Exhibit 10.1 + +of the White Hat Parties, or conflict with, result in a breach of or constitute a default under any agreement or instrument by which the White Hat Parties or any of their respective assets is bound. 3. Representations of the Company. The Company represents and warrants to the White Hat Parties as of the date hereof that it has the corporate power and authority to execute and deliver this Agreement. This Agreement (i) has been duly and validly authorized by the Company and constitutes a legal, valid and binding obligations of the Company, enforceable against the Company in accordance with its terms except as may be limited by bankruptcy, insolvency or similar laws affecting creditors' rights and general equitable principles and (ii) does not violate any law, order of any court or any agency or regulation or the Company's Certificate of Incorporation or the Bylaws, or conflict with, result in a breach of or constitute a default under any agreement or instrument by which the Company or any of its assets or the assets of its subsidiaries are bound. 4. Voting Commitments. The White Hat Parties shall appear in person or by proxy for quorum purposes at the 2020 Annual Meeting, including any adjournment or postponement thereof, to vote all of the shares of Common Stock beneficially owned by the White Hat Parties on the record date (if the 2020 Annual Meeting is within thirty (30) days of the anniversary of the Company's 2019 Annual Meeting of Stockholders, such number of shares shall be no less than 90% of the Current Position) for such meeting (i) in favor of all persons nominated by the Board to serve as directors of the Company and against any stockholder nominated candidate not endorsed by the Board, (ii) against the stockholder proposal made pursuant to Rule 14a-8 under the Exchange Act as disclosed to the White Hat Parties prior to the execution of this Agreement, (iii) to ratify the appointment of the Company's independent registered public accounting firm, and (iv) in accordance with the Board's recommendation with respect to the Company's "say-on-pay" proposal and new equity compensation plan (collectively, the "2020 Proposals"), provided, that with respect to the proposals described in clauses (ii) through (iv) of this Section 4, the White Hat Parties may vote in accordance with the recommendation of Institutional Shareholders Services to the extent such recommendation differs from the voting commitments set forth herein and provided that the White Hat Parties do not publicly disclose their vote on such proposals if it differs from the Board's recommendation; and provided, further, that White Hat Parties shall have the right to vote the shares of Common Stock beneficially owned by the White Hat Parties in their sole discretion with respect to all other proposals brought before the 2020 Annual Meeting. The White Hat Parties shall provide written evidence of the votes made in accordance with the foregoing sentence to the Company no later than ten business days before the 2020 Annual Meeting. 5. Support Period Covenants. Except as otherwise contemplated in this Agreement, at all times during the period commencing on the date hereof and ending on the date that is thirty (30) days prior to expiration of the advance notice period for the submission by stockholders of director nominations for consideration at the 2021 Annual Meeting as set forth in the Bylaws, the White Hat Parties shall not, and shall cause the White Hat Representatives not to, directly or indirectly, in any manner, alone or in concert with others: (a) attempt to call a special meeting of stockholders of the Company; or (b) make a request for any stockholder list or other Company books and records, whether pursuant to Section 220 of the Delaware General Corporation Law or otherwise. 6. Press Release. The Parties agree that the Company shall issue a press release and file a Current Report on Form 8-K in substantially the forms agreed to between the Parties promptly following the execution and delivery of this Agreement by the Parties and shall not make any other public disclosure relating to this Agreement or the transactions contemplated herein without the prior review and good faith consideration of any comments made by the White Hat Parties. The White Hat Parties agree that they shall not issue a press release regarding the subject matter of this Agreement for a period of three (3) months after the date of this Agreement. 7. Miscellaneous. (a) Specific Enforcement; Special Remedy. Each of the Parties agrees that the other Party would be irreparably injured in the event that any provision of the Agreement is breached or not performed. Accordingly, it is agreed that each Party shall be entitled to temporary and permanent injunctive relief with respect to each and any breach or purported repudiation of this Agreement by the other and to specifically enforce strict adherence to this Agreement and the terms and provisions hereof against the other in any action instituted in a court of competent jurisdiction, in addition to any other remedy which such aggrieved Party may be entitled to obtain. Moreover, in the event of the breach of any of the provisions of this Agreement, timeliness in obtaining relief is of the essence. (b) Amendments; Waiver. Neither this Agreement nor any term hereof may be changed, waived, discharged or terminated orally or in writing without a writing signed by the Parties. No delay on the part of either Party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any waiver on the part of either Party of any right, power or privilege hereunder operate as a waiver of any other right, power or privilege hereunder, nor shall any single or partial exercise of any right, power or privilege hereunder, preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder. (c) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties. This Agreement may not be assigned without the prior written consent of the other Party hereto. (d) No Third Party Beneficiaries. Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any person or entity, other than the Parties and their respective successors and assigns, any legal or equitable right, remedy or claim under or in respect of this Agreement and any conditions and provisions hereof being intended to be and being for the + + + + + +Exhibit 10.1 + +sole and exclusive benefit of the parties hereto and their respective successors and assigns, and for the benefit of no other person or entity. (e) Counterparts. This Agreement may be executed in any number of counterparts and by the Parties in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. (f) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. (g) Governing Law; Choice of Venue. (i) This Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware applicable to agreements made and to be performed within that state. (ii) Each Party (A) consents to submit itself to the personal jurisdiction of the Court of Chancery or other federal or state courts of the State of Delaware in the event any dispute arises out of this Agreement or the transactions contemplated by this Agreement, (B) agrees that it shall not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court, (C) agrees that it shall not bring any action relating to this Agreement or the transactions contemplated by this Agreement in any court other than the Court of Chancery or other federal or state courts of the State of Delaware, and each Party irrevocably waives the right to trial by jury and (D) each Party irrevocably consents to service of process by a reputable overnight mail delivery service, signature requested, to the address of such Party's principal place of business or as otherwise provided by applicable law. (h) Reimbursement. The Company shall reimburse the White Hat Parties for their out-of-pocket expenses, including the fees and expenses of counsel, incurred in connection with their engagement with the Company, the Nominations and the negotiation of, and all matters arising under this Agreement; provided, however, that such reimbursement shall not exceed $55,000. (i) Severability. If at any time subsequent to the date hereof, any provision of this Agreement shall be held by any court of competent jurisdiction to be illegal, void or unenforceable, such provision shall be of no force and effect, but the illegality or unenforceability of such provision shall have no effect upon the legality or enforceability of any other provision in this Agreement. (j) Interpretation and Construction. Each of the Parties acknowledges that it has been represented by counsel of its choice throughout all negotiations that have preceded the execution of this Agreement, and that it has executed the same with the advice of said independent counsel. Each Party and its counsel cooperated and participated in the drafting and preparation of this Agreement and the documents referred to herein, and any and all drafts relating thereto exchanged among the parties shall be deemed the work product of all of the parties and may not be construed against any Party by reason of its drafting or preparation. Accordingly, any rule of law or any legal decision that would require interpretation of any ambiguities in this Agreement against any Party that drafted or prepared it is of no application and is hereby expressly waived by each Party, and any controversy over interpretations of this Agreement shall be decided without regards to events of drafting or preparation. (k) Entire Agreement. This Agreement contains the entire understanding of the Parties with respect to the subject matter hereof. (l) Notices. Any notices, consents, determinations, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by e-mail to the e-mail address for a Party set forth below; and (iii) one (1) business day after deposit with a nationally recognized overnight delivery service, in each case properly addressed to the Party to receive the same. The addresses for such communications shall be: + + + + + +Exhibit 10.1 + +If to the Company or the Board: + +Spôk Holdings, Inc. 6850 Versar Center, Suite 420 Springfield, Virginia 22151-4148 Attention: Vince Kelly Email: vince.kelly@spok.com + +with a copy (which shall not constitute notice) to: + +Latham & Watkins LLP 555 Eleventh Street, NW Suite 1000 Washington, D.C. 20004 Attention: William O'Neill and Christopher Drewry E-mail: William.O'Neill@retiredpartner.lw.com and Christopher.Drewry@lw.com + +If to the White Hat Parties: + +White Hat Capital Partners LP 150 East 52nd Street 21st Floor New York, NY 10022 Attention: David Chanley and Mark Quinlan Email: DChanley@whitehatcp.com and MQuinlan@whitehatcp.com + +with a copy (which shall not constitute notice) to: + +Olshan Frome Wolosky LLP 1325 Avenue of the Americas New York, NY 10019 Attention: Elizabeth Gonzalez-Sussman E-mail: egonzalez@olshanlaw.com + +(m) Termination. Unless earlier terminated as provided in this Agreement, upon the expiration of the Support Period in accordance with Section 4, this Agreement shall immediately and automatically terminate in its entirety and no Party shall have any further rights or obligations under this Agreement; provided, however, no Party shall be released from any breach of this Agreement that occurred prior to the termination of this Agreement. + + + + + +Exhibit 10.1 + +IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement, or caused the same to be executed by its duly authorized representative as of the date first above written. + +Spōk Holdings, Inc. By: /s/ Vincent D. Kelly Name: Vincent D. Kelly Title: President and Chief Executive Officer + + + + + +Exhibit 10.1 + +White Hat Strategic Partners LP + +By: White Hat SP GP LLC, its General Partner + +By: /s/ Mark Quinlan Name: Mark Quinlan Title: Managing Member + +White Hat SP GP LLC + +By: /s/ Mark Quinlan Name: Mark Quinlan Title: Managing Member + +White Hat Capital Partners LP + +By: /s/ Mark Quinlan Name: Mark Quinlan Title: Managing Partner + +White Hat Capital Partners LP + +By: /s/ Mark Quinlan Name: Mark Quinlan Title: Managing Member \ No newline at end of file diff --git a/full_contract_txt/SPORTHALEYINC_09_29_1997-EX-10.2-10-ENDORSEMENT AGREEMENT.txt b/full_contract_txt/SPORTHALEYINC_09_29_1997-EX-10.2-10-ENDORSEMENT AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..d334de10ab12422a53004d86dd8847a4a2aa9211 --- /dev/null +++ b/full_contract_txt/SPORTHALEYINC_09_29_1997-EX-10.2-10-ENDORSEMENT AGREEMENT.txt @@ -0,0 +1,81 @@ +ENDORSEMENT AGREEMENT + + THIS ENDORSEMENT AGREEMENT is made and entered into effective this day of ___________________, 19__, by and between SPORT-HALEY, INC., a Colorado corporation (the "Company"), and _________________ (hereinafter referred to as the "Professional"). + + WHEREAS, the Professional is an active, exempt and full-time touring professional on the Professional Golfer's Association Tour (the "PGA Tour"); and/or (the "Senior PGA Tour") and + + WHEREAS, the company is in the business of designing and marketing quality men's and women's golf and active sportswear under the Haley label and desires to obtain the services of the Professional in endorsing, promoting and publicizing the Company and Haley apparel; + + NOW, THEREFORE, in consideration of the agreements of the parties set forth below, and in consideration of the Company's agreement to make the payments below described to the Professional the parties hereto agree as follows: + + 1. SERVICES OF THE PROFESSIONAL. The Professional agrees to perform the following services during the term of this Agreement: + + a. The Professional agrees that, with respect to men's apparel, he will exclusively endorse and use exclusively in play, practice, exhibits, clinics and other events open to the media or public, Haley brand apparel which shall consist of shirts, vests, jackets, sweaters, pants and shorts (if permitted by applicable rules). + + b. The Professional grants to the Company the exclusive worldwide right and license to use his name, autograph, likeness, photographs, electronic media depiction, signature and any other words, symbols or depiction's which would identify the Professional to the public in connection with the advertising, promotion, publicizing, sale and distribution of Haley apparel by the Company. + + c. Upon reasonable written request of the Company which shall be tendered at least 30 days prior the date requested, the Professional shall make himself available for the purpose of posing for print ads, making commercials and other promotional materials, or attending promotional events organized by the Company once per calendar year. In the event of such requests by the Company, the company shall be responsible for the payment of all reasonable travel, lodging and meal expenses incurred in connection with the Professional rendering services described in this subsection. Should the services of the Professional be required for longer than one day, the Professional shall be entitled to his daily appearance fee, plus reasonable expenses, for each day in excess of one day. + + d. The Professional shall have the opportunity to select from the Company's semi-annual golf sportswear collections for the purposes of obtaining a wardrobe of Haley apparel suitable to the Professional at the Company's expense. The Company shall have the right to place on the left chest and right sleeve of any jackets, shirts, vests, or sweaters and above the back pocket of any pants selected by the Professional the Company's logo and name in use by the Company at that time. + + 2. RIGHTS OF USAGE. As described in Section 1(b) above, the Professional has granted the company an exclusive worldwide right and license to use his name, autograph, likeness, photographs, electronic media depiction, signature and any other words, symbols or depiction's (hereinafter the "Professional's Image") which will identify the Professional to the public in connection with the advertising, promotion, publicizing, sale and distribution of Haley apparel. The Company shall have unlimited rights of utilization of the Professional's Image in all advertising, promotion, publicity and other forms of communication with any part during the term of this Agreement, it being the intent of the Professional that the Company's utilization of the Professional's Image shall be at the discretion of the Company. The right of usage described herein shall be subject to the requirement that the Company shall not place the Professional's Image in an unfavorable light. The Professional or the Professional's designated agent shall have the right to review any advertising, promotion or publicity materials utilized by the company which contain the Professional's Image on reasonable written or oral request to the Company during the term of this Agreement. + + 3. COMPENSATION OF THE PROFESSIONAL. In consideration of the rights granted to the Company and the services to be provided by the Professional, the Professional shall receive the following compensation: + + 4. PAYMENTS. All payments to be made to the Professional pursuant to the terms of this Agreement shall be made to the Professional and delivered to ________________________________________________________ _____________________________________________________________________ + + + + + + _____________________________________________________________________ + + or at such other address as shall be designated in writing by Professional. + + 5. RETENTION OF ENDORSEMENT RIGHTS. Except with respect to endorsement rights granted to the Company for the apparel described herein, the Professional shall retain all rights in and to the professional's name and endorsement and the Professional shall not be prevented from using, permitting or licensing others to use the Professional name or endorsement in connection with the advertising, promotion or sale of any product other than golf apparel as described in Section 1 hereof. The Professional represents and warrants that no agreement, contract or understanding exists which would prevent or limit the performance of any of his obligations under this Agreement. + + 6. TERM. The term of this Agreement shall extend from the date of execution hereof through and until _______, unless extended by written agreement of the parties. The parties shall use their best efforts to reach agreement on the terms of any such extension. In the event the Professional should for any reason become a non-exempt PGA Tour player, the Company shall have the right to terminate this Agreement at its discretion at any time during the initial term or any extension thereof. Additionally, if either part shall fail to observe or perform any of the agreements or obligations undertaken by such party hereunder, and such failure or default shall continue for a period of 30 days following notice from the non-defaulting party to the defaulting party during which such failure or default shall not have been cured by the defaulting party, then the non-defaulting party shall have the right to terminate this Agreement following the expiration of such 30-day notice period. The non-defaulting part hereunder. Following the expiration of 90 days from the termination or expiration of this Agreement, the Company shall cease usage of all publicity, promotion and advertising materials which contain the Professional's Image, it being the understanding of the parties that during such 90-day period the Company shall have the right to use such remaining publicity, promotion or advertising materials as shall then be available to the Company. + + 7. NOTICE. All notices and communications required or permitted to be given hereunder shall be in writing, signed by the sender, and delivered by registered or certified mail to: + + If to the Company: Robert G. Tomlinson, Chairman and CEO Sport-Haley, Inc. 4600 East 48th Avenue Denver, CO 80216 + + With a copy to: Robert W. Walter, Esq. Berliner Zisser Walter & Gallegos, P. C. Suite 4700 1700 Lincoln Street Denver, CO 80203 + + If to the Professional: + + With a copy to: + + or such other address as shall have been furnished in writing by the parties to each other. + + 8. ENTIRE AND SOLE AGREEMENT. This Agreement constitutes the entire agreement between the parties and supersedes all statements, promises and understandings, whether oral or written, with respect to subject matter hereof. + + 9. SUCCESSORS AND ASSIGNS. This Agreement may not be assigned by the Professional under any circumstances. The Company shall not be entitled to assign this Agreement to any other party without the Professional's express prior written consent, except any assignment by the Company as a result of a stock exchange, merger, consolidation, or sale of substantially all of the assets of the Company, in which case not such consent shall be required. + + 10. SEVERABILITY. Should any one or more of the provisions of this Agreement be determined to be illegal or unenforceable, all other provisions of this Agreement shall be given effect separately from the provision or provisions determined to be illegal or unenforceable. + + 11. GOVERNING LAW. This Agreement shall be construed and enforced in accordance with, and governed by the laws of the State of Colorado without regard to conflicts of laws principles. + + 12. COUNTERPARTS. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be an original, but all of which together shall constitute one and the same Agreement. Facsimile signatures shall be accepted by the parties hereto as original signatures for all purposes. + + 13. HEADINGS. The headings in this Agreement are for purposes of convenience and easy reference only and shall not limit or otherwise + + + + + + affect the meaning hereof. + + 14. DISPUTES. In the event of any dispute which arises between the parties and which relates to the subject matter of this Agreement, the parties acknowledge and agree that any such dispute shall be submitted for binding arbitration in accordance with the arbitration procedures established by the American arbitration Association in Denver, Colorado. If such association is not then in existence, an independent association of arbitrators may be utilized which is designated by agreement of the parties. In the event the parties are unable to agree on an independent association of arbitrators, either party may apply to a court of competent jurisdiction for appointment of arbitrators. + +IN WITNESS WHEREOF, the Company and the Professional have executed this Endorsement Agreement as of the day and year first above written. + + PROFESSIONAL: + + ---------------------------------------- + + COMPANY: + + SPORT-HALEY, INC. + + By: ------------------------------------- \ No newline at end of file diff --git a/full_contract_txt/SPRINGBANKPHARMACEUTICALS,INC_04_08_2020-EX-99.A-JOINT FILING AGREEMENT.txt b/full_contract_txt/SPRINGBANKPHARMACEUTICALS,INC_04_08_2020-EX-99.A-JOINT FILING AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..434e6d8364379a5cbcb3e39623e95ae16fffb643 --- /dev/null +++ b/full_contract_txt/SPRINGBANKPHARMACEUTICALS,INC_04_08_2020-EX-99.A-JOINT FILING AGREEMENT.txt @@ -0,0 +1 @@ +EXHIBIT A JOINT FILING AGREEMENT In accordance with Rule 13d-1(k) under the Securities Exchange Act of 1934, as amended, the undersigned agree to the joint filing on behalf of each of them of a statement on Schedule 13G (including amendments thereto) with respect to the Common Stock of Spring Bank Pharmaceuticals, Inc. and further agree that this agreement be included as an exhibit to such filing. Each party to the agreement expressly authorizes each other party to file on its behalf any and all amendments to such statement. Each party to this agreement agrees that this joint filing agreement may be signed in counterparts. In evidence whereof, the undersigned have caused this Agreement to be executed on their behalf this 7t h day of April, 2020. UBS ONCOLOGY IMPACT FUND L.P. ONCOLOGY IMPACT FUND (CAYMAN) MANAGEMENT L.P. By: Oncology Impact Fund (Cayman) Management L.P, By: MPM Oncology Impact Management LP, its General Partner its General Partner By: MPM Oncology Impact Management LP, By: MPM Oncology Impact Management GP LLC, its General Partner its General Partner By: MPM Oncology Impact Management GP LLC, By: /s/ Ansbert Gadicke its General Partner Name: Ansbert Gadicke Title: Managing Member By: /s/ Ansbert Gadicke Name: Ansbert Gadicke Title: Managing Member MPM ONCOLOGY IMPACT MANAGEMENT LP MPM ONCOLOGY IMPACT MANAGEMENT GP LLC By: MPM Oncology Impact Management GP LLC, By: /s/ Ansbert Gadicke its General Partner Name: Ansbert Gadicke Title: Managing Member By: /s/ Ansbert Gadicke Name: Ansbert Gadicke Title: Managing Member \ No newline at end of file diff --git a/full_contract_txt/STAMPSCOMINC_06_24_1999-EX-10.18-SPONSORSHIP AGREEMENT.txt b/full_contract_txt/STAMPSCOMINC_06_24_1999-EX-10.18-SPONSORSHIP AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..7a0e82daeb6206111b148d83cd783ef10a8f9f25 --- /dev/null +++ b/full_contract_txt/STAMPSCOMINC_06_24_1999-EX-10.18-SPONSORSHIP AGREEMENT.txt @@ -0,0 +1,323 @@ +EXHIBIT 10.18 + + SPONSORSHIP AGREEMENT + +This Sponsorship Agreement ("Agreement") is entered into as of the 14th day of May, 1999 ("Effective Date"), by and between Intuit Inc. a Delaware corporation, located at 2550 Garcia Ave., Mountain View, California 94043 ("Intuit"), and Stamps.com Inc., a Delaware corporation, located at 2900 31st Street, Suite 150, Santa Monica, CA 90405-3035 ("Client"). + + RECITALS + +A. Intuit maintains sites on the Internet at http://www.quicken.com (the "Quicken.com Site") and at http://www.quickbooks.com (the "QuickBooks ------------------------- Site"), and owns, manages or is authorized to place advertising on the following affiliated Web sites worldwide http://www.quicken.excite.com ----------------------------- ("Excite Money & Investing Site"), http://www.quicken.webcrawler.com --------------------------------- ("WebCrawler Money & Investing Site"), and http://www.quicken.aol.com -------------------------- ("AOL.com Personal Finance Site") (all such sites, including the Quicken.com Site and QuickBooks Site, collectively referred to as the "Intuit Sites"). Within the Intuit Sites, content is organized into topical channels ("Channels"). + +B. Intuit maintains the Quicken'99 software product into which Banner Advertisements are served ("Quicken Software"). + +C. Client is engaged in the business of the sale and delivery of electronic postage at its Web site located at http://www.stamps.com (the "Client Site"). + +D. Client wishes to promote its business to users of the Intuit Sites through promotions and advertising in various portions of the Intuit Sites. + +Therefore, the parties agree as follows: + +1. ADDITIONAL DEFINITIONS + +1.1 "Above-the-Fold" means the portion of a page that is designed to be visible on a standard computer screen with a resolution of 640 pixels by 480 pixels without requiring the user to scroll horizontally or vertically through the page. + +1.2 "Banner Advertisement" means advertisements consisting of billboard-like graphics displayed in a standardized specific location on the Intuit Sites, which advertisements click-through to the Client Site, or such other address mutually agreed upon by the parties from time to time. + +1.3 "Channel Home Page" means, with respect to any Channel the introductory or welcome page for such Channel. + +1.4 "Client Competitor" means any of the entities listed on Exhibit A to this Agreement, as such list may be amended by mutual agreement by the parties, provided such entity derives any of its annual gross revenues from the sale or delivery of electronic postage or postage meters. + +1.5 "Client Graphic" means those mutually agreed upon graphics, artwork, logos, descriptions and other material provided by Client for use on the Intuit Sites. + +1.6 "Impression" is generated where a User's browser software requests a file via the World Wide Web service of the Internet, where such file contains a Banner Advertisement or Link. + + 1 + +1.7 "Launch Date" means [***] --- + +1.8 "Link" means a hypertext text and/or graphic link from the Intuit Sites to the Client's Site. + +1.9 "Net Transaction Revenues" means the aggregate amount of transaction fees received by Client during the Term from a New Customer for the purchase of U.S. postage from Client by such New Customer, less amounts attributable to taxes, shipping, returns, bad debt, handling, credit card charges and similar charges (collectively, "Deductions"). Notwithstanding the foregoing, such Deductions, with the exception of credit card charges, shall not exceed an aggregate of [***] of such transaction fees. --- + +1.10 "New Customer" means a User who (a) registers for Client's service using a unique credit card number, electronic mail address or name not previously received by Client, and (b) purchases U.S. postage from Client's service. + +1.11 "Sponsor Client Graphic" means a Client Graphic which indicates Client as a "Sponsor" with respect to the sale or delivery of electronic postage, + + + + + + which graphics click-through to the Client Site, or such other address mutually agreed upon by the parties from time to time. + +1.12 "User" means any person or entity that accesses one or more pages on the Intuit Sites and is transported via the World Wide Web from the Intuit Site to the Client's Site. + +2. SMALL BUSINESS CHANNEL PROMOTION + +2.1 Promotions. Commencing on the Launch Date and continuing throughout the ---------- Term, Intuit shall promote Client on the "Small Business" Channel of the Quicken.com Site, Excite Money & Investing Site and WebCrawler Money & Investing Site as follows: + + 2.1.1 A Sponsor Client Graphic consisting of 160x40 pixels shall be rotated amongst the following pages (or their successor pages, if any): (1) "Starting a Business" page, (2) "Managing your Business" page, (3) "Marketing" page, (4) "Legal Issues" page, and (5) "Taxes & Accounting" page. Each such Sponsor Client Graphic shall be Above the Fold. + + 2.1.2 A Sponsor Client Graphic of 88x31 pixels to be found at the bottom of each page where a sponsorship strip exists. + + 2.1.3 A text Link to be located Above-the-Fold in a text sponsor bar on the "Small Business" Channel home page of the Quicken.com Site, Excite Money & Investing Site and WebCrawler Money & Investing Site. + + 2.1.4 A text Link on the "Products & Promos" area of the "Small Business" Channel Home Page of the Quicken.com Site, Excite Money & Investing Site and WebCrawler Money & Investing Site. + + 2.1.5 A Sponsor Client Graphic consisting of a minimum number of pixels mutually agreed upon by the parties, will appear on the "Small Business Mailing/Shipping, OnLine Postage" page in the "Small Business" Channel, when such page is made publicly available on the applicable Intuit Sites. Such graphic shall be displayed in a position mutually agreed upon by the parties. + +2.2 Email Promotions. Intuit will place a Sponsor Client Graphic consisting of ---------------- a minimum of 234x60 pixels, with a mutually agreed upon text in two (2) mutually agreed upon, small business email newsletters sent by Intuit, to all its registered small business users who have elected to receive such newsletter ("Small Business Newsletters"). Client shall be the only sponsor in each Small Business Newsletter. For the avoidance of doubt, it is understood that the Small Business Newsletters shall not contain advertisements + +- ----------------------- [***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission. + + 2 + + (excluding any editorial content or directory listings which include third parties that are not Client Competitors) for any entity, other than Client. + +2.3 Additional Banner Advertisements. Commencing on the Launch Date and -------------------------------- continuing throughout the Term, Intuit will include on the Quicken.com Site, Banner Advertisements consisting of 468x60 pixels. + +2.4 Total Small Business Impressions. Intuit estimates but does not guarantee -------------------------------- to deliver [***] Impressions of Client's Banner Advertisements, Client --- Graphics and Links described in this Section 2 during the entire Term of this Agreement. Intuit acknowledges it is Client's preference to have Intuit deliver such Impressions as follows: + + [***] --- + + If Intuit fails to deliver such Impressions during the twelve (12) month period following the Launch Date, Intuit agrees to run such promotions in equivalent areas and placement, as mutually agreed upon by the parties, until such Impressions have been delivered. + +3. [***] PROMOTION --- + +3.1 Promotions. Commencing on the day after the date on which the [***] ---------- --- available and continuing throughout the Term, Intuit shall promote Client on the [***] of the Quicken.com Site, Excite Money & Investing Site, --- WebCrawler Money & Investing Site, and AOL.com Personal Finance Site as follows: + + 3.1.1 A Sponsor Client Graphic of a pixel size mutually agreed upon by the parties, shall be rotated throughout the "Features and Deals" area. Each such Sponsor Client Graphic shall be Above the Fold. + + + + + + 3.1.2 A Sponsor Client Graphic of 88x31 pixels to be found at the bottom of each page where a sponsorship strip exists. + +3.2 Additional Banner Advertisements. Commencing on the Launch Date and -------------------------------- continuing throughout the Term, Intuit will include on the Quicken.com Site, Excite Money & Investing Site, WebCrawler Money & Investing Site, and AOL.com Personal Finance Site, Banner Advertisements consisting of 468x60 pixels. + +3.3 Total [***] Impressions. Intuit estimates but does not guarantee to deliver ----------------------- [***] Impressions of Client's Banner Advertisements and Client Graphics --- described in this Section 3 during the entire Term of this Agreement. Intuit acknowledges it is Client's preference to have Intuit deliver such Impressions as follows: + + [***] --- + + If Intuit fails to deliver such Impressions during the twelve (12) month period following the Launch Date, Intuit agrees to run such promotions in equivalent areas and placement, as mutually agreed upon by the parties, until such Impressions have been delivered. + +4. QUICKEN.COM SITE HOME PAGE PROMOTION + +4.1 Promotions. Commencing on the Launch Date and continuing for a period of ---------- six (6) months throughout the Term, as mutually agreed by the parties, Intuit shall promote Client on the Quicken.com Site home page, with a Sponsor Client Graphic of 88x31 pixels to be found at the bottom of such home page. + +4.2 Total Impressions. Intuit estimates but does not guarantee to deliver [***] ----------------- --- Impressions of Client's Sponsor Graphics described in this Section 4 during the period agreed upon by the parties. If Intuit fails to deliver + +- -------------------- [***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission. + + 3 + + such Impressions during the agreed upon time period, Intuit agrees to run such promotions in equivalent areas and placement, as mutually agreed upon by the parties until such Impressions have been delivered. + +5. QUOTES PLUS TAB EXCITE MONEY & INVESTING SITE PROMOTION + +5.1 Promotions. Commencing on the Launch Date and continuing for a period of ---------- six (6) months throughout the Term, as mutually agreed by the parties, Intuit shall promote Client on the "Quotes Plus" tab within the "Investment" Channel of the Excite Money & Investing Site with a Sponsor Client Graphic of 160x40 pixels will be included Above the Fold at each of the following "Quotes Plus" page tabs: (1) "Insider Trading", (2) "Comparison", (3) "Company Profile", (4) "Broker Research", (5) "Analysts", and (6) "Alerts". + +5.2 Total Impressions. Intuit estimates but does not guarantee to deliver [***] ----------------- --- Impressions of Client's Sponsor Graphics described in this Section 5 during the period agreed upon by the parties. If Intuit fails to deliver such Impressions during the agreed upon time period, Intuit agrees to run such promotions in equivalent areas and placement, as mutually agreed upon by the parties until such Impressions have been delivered. + +6. QUICKBOOKS SITE PROMOTION + +6.1 Banner Advertisements. Commencing on the Launch Date and continuing --------------------- throughout the Term, Intuit will include Banner Advertisements consisting of 468x60 pixels on the QuickBooks Site. + +6.2 Total Impressions: Intuit estimates but does not guarantee to deliver [***] ----------------- --- Impressions of Banner Advertisements described in this Section 6 during the Term of this Agreement. Intuit acknowledges it is Client's preference to have Intuit deliver such Impressions as follows: + + [***] --- + + If Intuit fails to deliver such Impressions during the twelve (12) month period following the Launch Date, Intuit agrees to run such promotions in equivalent areas and placement, as mutually agreed upon by the parties, until such Impressions have been delivered. + +7. QUICKEN SOFTWARE PROMOTION + + + + + +7.1 Banner Advertisements. Commencing on the Launch Date and continuing --------------------- throughout the Term, Intuit will serve Banner Advertisements consisting of 468x60 pixels into the Quicken Software. + +7.2 Total Impressions: Intuit estimates but does not guarantee to deliver [***] ----------------- --- Impressions of Banner Advertisements described in this Section 7 during the Term of this Agreement. Intuit acknowledges it is Client's preference to have Intuit deliver such Impressions as follows: + + [***] --- + + If Intuit fails to deliver such Impressions during the twelve (12) month period following the Launch Date, Intuit agrees to run such promotions in equivalent areas and placement, as mutually agreed upon by the parties, until such Impressions have been delivered. + +8. LAUNCH DATE, RESPONSIBILITY FOR INTUIT SITES AND REPORTING + +8.1 Client Obligations. Client will use reasonable efforts to assist Intuit in ------------------ implementing the promotional placements and advertising described in the Agreement. The parties recognize that the Launch Date can be met only if Client provides final versions of all Client Graphics, text, Banner Advertisements and other promotional media and valid URL links necessary to implement the promotional placements and + +- ------------------ [***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission. + + 4 + + advertising described in this Agreement (collectively, "Impression Material") to Intuit at least ten (10) days prior to the Launch Date. + +8.2 Untimely Delivery Options. In the event that Client fails to provide the ------------------------- Impression Material to Intuit at least ten (10) days in advance of the Launch Date, Intuit may, at its sole discretion (i) reschedule the Launch Date to the earliest practicable date according to the availability of Intuit's engineering resources after delivery of the complete Impression Material or (ii) commence delivery of Impressions based on Impression Material in Intuit's possession at the time and/or reasonable placeholders created by Intuit. + +8.3 Intuit Sites. Intuit will have sole responsibility for providing, hosting ------------ and maintaining, at its expense, the Intuit Sites. Subject to the terms and conditions set forth herein, including without limitation, the obligations of Intuit set forth in Sections 2-7, Intuit will have sole control over the "look and feel" of the Intuit Sites including, but not limited to, the display, appearance and placement of the parties' respective names and/or brands and the promotional links. Notwithstanding the above, Client acknowledges that the Banner Advertisements may be served by a third party authorized by Intuit ("Authorized Advertisement Server") + +8.4 Reports. Intuit or its Authorized Advertisement Server will provide Client ------- with monthly reports ("Usage Reports") substantiating the number of Impressions of Client's Banner Advertisements, Client Graphics, Sponsor Client Graphics and Links displayed on the Intuit Sites, the total number of click-throughs generated by each such advertisement or graphic, and such other information as the parties shall mutually agree. + +8.5 Records/Audit. Intuit will maintain accurate records with respect to the ------------- calculation of Impressions delivered pursuant to this Agreement. Client may, upon no less than thirty (30) days prior written notice to Intuit, cause an independent Certified Public Accountant to inspect all relevant records of Intuit upon which the calculation of Impressions under the Usage Reports are based during Client's normal business hours. The fees charged by such Certified Public Accountant in connection with the inspection will be paid by Client unless the number of Impressions are determined to have been less than ninety-five percent (95%) of the Impressions due to Client, in which case Client will be responsible for the payment of the reasonable fees for such inspection. In addition, if the audit reveals such shortfall in the number of Impressions generated, Intuit shall continue to display Client's Banner Advertisements, Client Graphics, Sponsor Client Graphics and Links on the Intuit Sites as set forth herein. The audit rights set forth herein shall continue for one (1) year following the termination of this Agreement for any reason. No such audit may occur more than once a year during the Term. + +9. EXCLUSIVITY + + Throughout the Term Intuit will not place, and will not allow any party acting on its behalf to place, any graphic, link or other form of advertising or media on any page of the Quicken.com Site and/or on any page on the AOL.com Personal Finance Site (other than the Channel Home Page), which markets or promotes any electronic postage product, postage meter + + + + + + and/or service ("Postage Products") offered by a Client Competitor. Notwithstanding the above, Intuit may include editorial content or tools about or from a Client Competitor and include Client Competitors in directory listings. + +10. FEES + +10.1 Sponsorship, Advertising and Exclusivity Fees. Client will pay Intuit --------------------------------------------- sponsorship and advertising fees of $2,644,010 and an exclusivity fee of $661,003. Such fees shall be paid to Intuit as follows. An initial fee of $[***] shall be due and payable on the Effective Date. The remaining --- balance of $[***] shall be paid to Intuit in 12 equal monthly installments --- of [***]. Each monthly installment should be payable in advance and due no --- later than the fifth (5th) of the month. + +- ------------------- [***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission. + + 5 + +10.2 Transaction Fees. Separate and apart from the fees in Subsection 10.1 above, at such time as Client has acquired [***] New Customers (the --- "Minimum Customer Number") Client will pay Intuit [***] of the Net --- Transaction Revenues it receives from each New Customer acquired by Client above the Minimum Customer Number ("Transaction Fee"). Within fifteen (15) days after the end of each month, Client will provide a monthly report (the "Transaction Fee Report") to Intuit. The Transaction Fee Report will report the Net Transaction Revenue and Transaction Fees for such month. All Transaction Fees due per the Transaction Fee Report will be paid with the submission of such Report. + +10.3 Records/Audit. Client will maintain accurate records with respect to the ------------- calculation of all Transaction Fees due under this Agreement. Intuit may, upon no less than thirty (30) days prior written notice to Client, cause an independent Certified Public Accountant to inspect all relevant records of Client upon which the calculation of such payments are based during Client's normal business hours. The fees charged by such Certified Public Accountant in connection with the inspection will be paid by Intuit unless the payments made to Intuit are determined to have been less than ninety- five percent (95%) of the payments actually owed to Intuit, in which case Client will be responsible for the payment of the reasonable fees for such inspection. In addition, Client shall immediately remit payment to Intuit for the full amount of any disclosed shortfalls. The audit rights set forth herein shall continue for one (1) year following the termination of this Agreement for any reason. No such audit may occur more than once a year during the Term. + +10.4 Cost and Expenses. Unless otherwise provided in this Agreement, each ------------------ party shall bear its own costs and expenses in connection with its activities performed under this Agreement. + +11. PUBLICITY + + Unless required by law, neither party will make any public statement, press release or other announcement relating to the terms of or existence of this Agreement without the prior written approval of the other. Notwithstanding the foregoing, the parties agree to issue a mutually acceptable initial press release regarding the relationship between Intuit and Client, within thirty (30) days of the Effective Date unless agreed otherwise by the parties. + +12. TERM AND TERMINATION + +12.1 Term. Unless otherwise terminated as specified in this Section 12, the ---- term of this Agreement shall begin on the Effective Date and will not end until the later of (a) twelve (12) months from the Launch Date; or (2) the date Intuit displays a total of 176,717,916 Impressions in accordance with the terms set forth herein ("Term"). + +12.2 Termination. Either party may terminate this Agreement if the other party ----------- materially breaches a material obligation hereunder and such breach remains uncured for thirty (30) days following the notice to the breaching party of the breach and the notifying party's intention to terminate. All undisputed payments that have accrued prior to the termination or expiration of this Agreement for any reason will be payable in full within thirty (30) days thereof. In addition, upon the termination of this Agreement by Client for any reason, a pro-rata amount of the Monthly Payment Fee shall be refunded to Client calculated as follows: the Monthly Payment Fee less the cost of the Impressions displayed for such month as of the effective date of the termination, calculated on an average CPM basis. + +12.3 Survival. The provisions of Section 6.5, Section 10.3, Section 12.3, -------- + + + + + + Section 13.1, Section 14, Section 15, Section 16, Section 17, and Section 18 will survive any termination or expiration of this Agreement. + +- --------------------- [***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission. + + 6 + +12.4 Renewal. If Intuit elects to provide advertising, sponsorship or other ------- promotional space on all or any portion of the Intuit Sites for a Client Competitor, Intuit agrees to negotiate with Client in good faith regarding such promotional opportunity. In the event the parties fail to reach agreement within ten (10) business days following the commencement of such good faith negotiations (or such later date as the parties may agree to), Intuit may offer the opportunity to any third party on terms and conditions no less favorable then those offered to Client. + +13. TRADEMARK OWNERSHIP AND LICENSE + +13.1 Ownership. Client will retain all right, title and interest in and to its --------- trademarks, service marks and trade names worldwide, subject to the limited license granted to Intuit hereunder. Intuit will retain all right, title and interest in and to its trademarks, service marks and trade names worldwide, subject to the limited license granted to Client hereunder. + +13.2 License. Each party hereby grants to the other a non-exclusive, limited ------- license to use its trademarks, service marks or trade names only as specifically described in this Agreement. All such use shall be in accordance with each party's reasonable policies regarding advertising and trademark usage as shall be established or changed from time to time in each party's sole discretion. Upon the expiration or termination of this Agreement, each party will cease using the trademarks, service marks and/or trade names of the other except as the parties may agree in writing or to the extent permitted by applicable law. + +14. CONTENT OWNERSHIP + + Client will retain all right, title and interest in and to the Client Site worldwide including, but not limited to, ownership of all copyrights, look and feel and other intellectual property rights therein. Intuit will retain all right, title, and interest in and to the Intuit Sites worldwide including, but not limited to, ownership of all copyrights, look and feel and other intellectual property rights therein. + +15. CONFIDENTIALITY AND USER DATA + +15.1 Definition. For the purposes of this Agreement, "Confidential Information" ---------- means this Agreement, and all information about the disclosing party's (or its suppliers') business or activities that is proprietary and confidential, which shall include all business, financial, technical and other information of a party marked or designated by such party as "confidential or "proprietary" at the time of disclosure. In addition, the Usage Reports are considered to be confidential to Intuit. + +15.2 Exclusions. Confidential Information will not include information that (i) ---------- is in or enters the public domain without breach of this Agreement, (ii) the receiving party lawfully receives from a third party without restriction on disclosure and without breach of a nondisclosure obligation, (iii) the receiving party rightfully knew prior to receiving such information from the disclosing party or (iv) the receiving party develops independent of any information originating from the disclosing party. + +15.3 Restrictions. Each party agrees (i) that it will not disclose to any third ------------ party or use any Confidential Information disclosed to it by the other except as expressly permitted in this Agreement and (ii) that it will take all reasonable measures to maintain the confidentiality of all Confidential Information of the other party in its possession or control, which will in no event be less than the measures it uses to maintain the confidentiality of its own information of similar importance. + +15.4 User Data. All information and data provided to Intuit by users of the --------- Intuit Sites or otherwise collected by Intuit relating to user activity on the Intuit Sites shall be retained by and owned solely by Intuit. All information and data provided to Client by users of the Client Site or otherwise collected by Client relating to user activity on the Client Site shall be retained by and owned solely by Client. Each party agrees to usesuch information only as authorized by the user and shall not disclose, sell, license, or otherwise transfer any such information to any third party (except as required by law) or use the user information for the transmission of "junk mail," "spam," or any other unsolicited mass distribution of information. + + 7 + +15.5 Limitations. Notwithstanding the foregoing, each party may disclose + + + + + + ----------- Confidential Information (i) to the extent required by a court of competent jurisdiction or other governmental authority or otherwise as required by law or (ii) on a "need-to-know" basis under an obligation of confidentiality to its legal counsel, accountants, banks and other financing sources and their advisors. + +16. WARRANTY/INDEMNITY/DISCLAIMER OF WARRANTIES + +16.1 By Client. Client represents and warrants that (i) it has full power and --------- authority to enter into this Agreement; (ii) entering into and performance of this Agreement by Client does not violate, conflict with, or result in a material default under any other contract or agreement to which Client is a party, or by which it is bound; and (iii) it has the right to make available the services on the Client Site. + +16.2 By Intuit. Intuit represents and warrants that (i) it has full power and --------- authority to enter into this Agreement; (ii) entering into and performance of this Agreement by Intuit does not violate, conflict with, or result in a material default under any other contract or agreement to which Intuit is a party, or by which it is bound; and (iii) it has the right to make available on the Intuit Sites the Banner Advertisements, Sponsor Client Graphics, Links and other advertisements placed hereunder. + +16.3 By Client. Client will defend and/or settle any third party claim brought --------- against Intuit, its affiliates, officers, directors, employees, consultants and agents arising from: (1) a breach of Client's representations or warranties under Section 16.1; (2) any claim that Client's Impression Materials infringe or violate any third party's copyright, U.S. patent, trade secret, any patent outside of the US which Client has knowledge of, or trademark; or (3) content provided by Client for the Client Site or the products and services of Client offered on the Client Site, and will pay resulting costs, damages and reasonable attorneys' fees finally awarded, provided that Intuit promptly notified Client in writing of any and all such claims. Client has sole control of the defense and all related settlement negotiations and Intuit reasonably cooperates with Client with the defense and/or settlement thereof, at Client's expense. Notwithstanding the foregoing, Client shall not, without Intuit's prior written consent (which consent shall not be unreasonably withheld or delayed), make any such settlement that imposes any obligation, financial or otherwise, upon Intuit. Intuit may not settle or compromise such claim, action or allegation, except with the prior written consent of Client. Intuit may have its own counsel in attendance at all proceedings and substantive negotiations relating to such claim, action or allegation, at Intuit's cost and expense. + +16.4 By Intuit. Intuit will defend and and/or settle any third party claim --------- brought against Client, its affiliates, officers, directors employees, consultants and agents arising from (1) a breach of Intuit's representations or warranties under Section 16.2; or (2) any claim arising from the Intuit Sites other than content or services provided by Client, and will pay resulting costs, damages and reasonable attorneys' fees finally awarded, provided that Client promptly notifies Intuit in writing of any and all such claims. Intuit has sole control of the defense and all related settlement negotiations, and Client reasonably cooperates with Intuit with the defense and/or settlement thereof at Intuit's expense. Notwithstanding the foregoing, Intuit shall not, without Client's prior written consent (which consent shall not be unreasonably withheld or delayed), make any such settlement that imposes any obligations, financial or otherwise, upon Client. Client may not settle or compromise such claim, action or allegation, except with the prior written consent of Intuit. Client may have its own counsel in attendance at all proceedings and substantive negotiations relating to such claim, action or allegation, at Client's costs and expense. + +16.5 DISCLAIMER. EXCEPT AS SPECIFIED IN THIS AGREEMENT, NEITHER PARTY MAKES ANY ---------- WARRANTY IN CONNECTION WITH THE SUBJECT MATTER OF THIS AGREEMENT AND HEREBY DISCLAIMS ANY AND ALL IMPLIED WARRANTIES AND CONDITIONS, INCLUDING WITHOUT LIMITATION ALL IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE REGARDING SUCH SUBJECT MATTER. + +17. LIMITATION OF LIABILITY + + EXCEPT UNDER SECTIONS 15 AND 16, IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, WHETHER + + 8 + + BASED ON BREACH OF CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE, WHETHER OR NOT THAT PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE. THE LIABILITY OF EITHER PARTY FOR DAMAGES OR ALLEGED DAMAGES HEREUNDER (EXCEPT UNDER SECTIONS 15 AND 16), WHETHER IN CONTRACT, TORT OR ANY OTHER LEGAL THEORY, IS LIMITED TO, AND WILL NOT EXCEED, THE AMOUNTS TO BE PAID BY CLIENT TO INTUIT HEREUNDER. + +18. GENERAL + +18.1 Assignment. Neither party may assign this Agreement, in whole or in part, ---------- without the other party's written consent (which will not be unreasonably + + + + + + withheld or delayed); provided however, that either party may assign its rights and obligations hereunder in the event of a sale of all, or substantially all of such party's assets related to this Agreement, whether by merger, reorganization, operation of law or otherwise, or (2) either party's assignment and/or delegation of its rights and responsibilities hereunder to a wholly-owned subsidiary or joint venture in which the assigning party holds an interest. Any attempt to assign this Agreement other than as permitted above will be null and void. Subject to the foregoing, this Agreement shall be binding upon and shall inure to the benefit of both parties, their successors and permitted assigns. + +18.2 Applicable Law and Jurisdiction. This Agreement and the performance of ------------------------------- the parties under this Agreement shall be governed by and construed in accordance with the laws of the State of California, U.S.A., except that body of law concerning conflicts of laws. In any action relating to the parties, the parties consent to jurisdiction in a state or federal court in Santa Clara County, California. + +18.3 Notice. Unless otherwise stated, all notices required under this Agreement ------ shall be in writing and shall be considered given (i) when delivered personally, (ii) within five (5) days of mailing, certified mail, return receipt requested and postage prepaid (iii) one (1) day after deposit with a commercial overnight carrier, or (iv) when delivered by facsimile transmission. All communications will be addressed as follows (unless changed by notice): + + To Client: Stamps.com 2900 31st Street, Suite 150 Santa Monica, CA 90405-3035 Attn: Vice President, Business Development + + 9 + + To Intuit: If hand delivered or faxed: -------------------------- Intuit Inc. 2535 Garcia Avenue MS 2550 Mountain View, California 94043 Attn: General Counsel Phone: 650.944.6000 Fax: 650.944.5656 + + If mailed: --------- Intuit Inc. P.O. Box 7850 MS 2550 Mountain View, CA 94039-7850 Attn: General Counsel + +18.4 No Agency. The parties are independent contractors and will have no power --------- or authority to assume or create any obligation or responsibility on behalf of each other. This Agreement will not be construed to create or imply any partnership, agency or joint venture. + +18.5 Force Majeure. Any delay in or failure of performance by either party ------------- under this Agreement will not be considered a breach of this Agreement and will be excused to the extent caused by any occurrence beyond the reasonable control of such party including, but not limited to, acts of God, power outages, failures of the Internet, and Client's failure to obtain any necessary governmental approval required in connection with the performance of its obligations hereunder. + +18.6 Severability. In the event that any of the provisions of this Agreement ------------ are held to be unenforceable by a court or arbitrator, the remaining portions of the Agreement will remain in full force and effect. + +18.7 Entire Agreement. This Agreement is the complete and exclusive agreement ---------------- between the parties with respect to the subject matter hereof, superseding any prior agreements and communications (both written and oral) regarding such subject matter. This Agreement may only be modified, or any rights under it waived, by a written document executed by both parties. + +18.8 Counterparts. This Agreement may be executed in counterparts, each of ------------ which will serve to evidence the parties' binding agreement. + +Client: Stamps.com Inc. Intuit Inc. --------------- + +By: __________________________ By: _______________________ + +Name: __________________________ Name: _______________________ + +Title: __________________________ Title: _______________________ + +Date: __________________________ Date: _______________________ + + + + + + 10 + + EXHIBIT A + + CLIENT COMPETITORS + +E-Stamp + +Pitney Bowes + +Neopost + +United States Postal Service Francotype Postalia Ascom + +The parties shall meet on a quarterly basis to determine what, if any, changes shall be made to the Client Competitor list. Notwithstanding the above, in the event a Client Competitor is acquired by a third party which is involved in the sales and/or marketing of goods and services outside of electronic postage products, postage meters and/or postage services ("Non Postage Products"), Intuit shall be restricted from promoting the Postage Products of such entity but shall not be restricted from marketing and/or promoting the Non Postage Products of such entity. + + 11 \ No newline at end of file diff --git a/full_contract_txt/STARTECGLOBALCOMMUNICATIONSCORP_11_16_1998-EX-10.30-CONSTRUCTION AND MAINTENANCE AGREEMENT.txt b/full_contract_txt/STARTECGLOBALCOMMUNICATIONSCORP_11_16_1998-EX-10.30-CONSTRUCTION AND MAINTENANCE AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..2236cd8e946070cc3a507a4dead776048abf3eca --- /dev/null +++ b/full_contract_txt/STARTECGLOBALCOMMUNICATIONSCORP_11_16_1998-EX-10.30-CONSTRUCTION AND MAINTENANCE AGREEMENT.txt @@ -0,0 +1,1233 @@ +TAT-14 CABLE NETWORK + + CONSTRUCTION AND MAINTENANCE AGREEMENT + + [GRAPHIC OMITTED] + + Certified to be a true and complete copy of the original document in the + + custody of Deutsche Telekom + +- -------------------------------------------------------------------------------- Volkmar Rompke Carmen Bornefeld + + Deutsche Telekom AG, Friedrich-Ebert-Allee 140, 53113 Bonn, Germany + + TABLE OF CONTENTS + +1 DEFINITIONS 2 + +2 BASIC PRINCIPLES 6 + +3 CONFIGURATION 6 + +4 PROVISION OF SEGMENTS T AND S 8 + +5 OWNERSHIP OF SEGMENTS AND ADDITIONAL PROPERTY 9 + +6 ESTABLISHMENT OF THE GENERAL COMMITTEE 9 + +7 ESTABLISHMENT OF MANAGING GROUP 11 + +8 PROCUREMENT GROUP; SUPPLY CONTRACT FOR SEGMENT S 12 + +9 ACQUISITION AND USE OF CAPACITY 13 + +10 EQUIPAGE 15 + +11 INCREASE OR DECREASE OF DESIGN CAPACITY 15 + +12 OWNERSHIP PRICING 16 + +13 DEFINITION OF CAPITAL COSTS OF SEGMENT S 16 + +14 ALLOCATION AND BILLING OF SEGMENT S CAPITAL COSTS 17 + +15 TRANSIT FACILITIES TO EXTEND TAT-14 CAPACITY 19 AND CONNECTION WITH INLAND SYSTEMS + +16 OPERATION AND MAINTENANCE OF SEGMENTS T AND S 20 + +17 OPERATION AND MAINTENANCE COSTS OF SEGMENTS -ALLOCATION AND BILLING 23 + +18 USE OF SEGMENTS Tl TO T7; COSTS, ALLOCATION AND BILLING 23 + +19 KEEPING AND INSPECTION OF BOOKS 25 + +20 CURRENCY AND PLACE OF PAYMENT 26 + +21 DEFAULT OF PAYMENT 27 + +22 LIABILITY 27 + +23 FORCE MAJEURE 28 + +24 SETTLEMENT OF CLAIMS BY THE PARTIES 28 + +25 DURATION OF AGREEMENT AND REALIZATION OF ASSETS 29 + +- -------------------------------------------------------------------------------- September 2, 1998 i + +26 RELATIONSHIP OF THE PARTIES 30 + + + + + +27 OBTAINING OF LICENSES 30 + +28 PRIVILEGES FOR DOCUMENTS OR COMMUNICATIONS 30 + +29 CONFIDENTIALITY 30 + +30 ASSIGNMENT OF RIGHTS AND OBLIGATIONS 31 + +31 WAIVER 32 + +32 COMMUNICATIONS 32 + +33 PARAGRAPH HEADINGS, REFERENCES 32 + +34 SEVERABILITY 33 + +35 EXECUTION OF AGREEMENT AND AMENDMENTS 33 + +36 INTERPRETATION OF THE AGREEMENT AND SETTLEMENT OF DISPUTES 33 + +37 SUCCESSORS BOUND 34 + +38 ENTIRE AGREEMENT 34 + +39 TESTIMONIUM 35 + +- -------------------------------------------------------------------------------- September 2, 1998 ii + + SCHEDULES + +SCHEDULE A PARTIES TO THE AGREEMENT + +SCHEDULE B VOTING INTERESTS, OWNERSHIP INTERESTS IN SEGMENT S AND ALLOCATION OF CAPITAL, OPERATING AND MAINTENANCE COSTS IN SEGMENTS T AND S + +SCHEDULE C SUMMARY OF ALLOCATED CAPACITY + +SCHEDULE C-1 SUMMARY OF ALLOCATED CAPACITY AS ASSIGNED AT THE TIME OF C&MA SIGNING + + ANNEXES + +ANNEX 1 TERMS OF REFERENCE FOR MANAGING GROUP + +ANNEX 2 TERMS OF REFERENCE FOR THE PROCUREMENT GROUP + +ANNEX 3 TERMS OF REFERENCE FOR THE AR&R SUBCOMMITTEE + +ANNEX 4 TERMS OF REFERENCE FOR THE F&A SUBCOMMITTEE + +ANNEX 5 TERMS OF REFERENCE FOR THE CENTRAL BILLING PARTY + +ANNEX 6 TERMS OF REFERENCE FOR THE NETWORK ADMINISTRATOR + +ANNEX 7 SOURCE OF FINANCIAL CHARGE RATES + +ANNEX 8 INITIAL OWNERSHIP PRICING MATRIX + +ANNEX 9 CAPACITY STRUCTURE + +ANNEX 1O ORGANIZATION STRUCTURE + +ANNEX 11 CONFIGURATION DIAGRAM + +- -------------------------------------------------------------------------------- September 2, 1998 iii + + + + + + TAT-14 CABLE NETWORK + + CONSTRUCTION AND MAINTENANCE AGREEMENT + +This Agreement, made and entered into this 2nd day of September 1998, hereinafter called the Effective Date, between and among the Parties signatory hereto (hereinafter collectively called "Parties" and individually called "Party"), which Parties are identified in Schedule A attached hereto and made a part hereof, + +WITNESSETH: + +WHEREAS, telecommunication services are being provided between and among Europe, and North America, by means of submarine cable and satellite facilities; and + +WHEREAS, the Parties plan to supplement such facilities with an optical fibre submarine cable system called the TAT-14 Cable Network (hereinafter called "TAT-14") which will be used to provide telecommunication services between points in or reached via the United States of America, the United Kingdom, France, The Netherlands, Germany, Denmark and points beyond; and + +WHEREAS, a Memorandum of Understanding was signed on the 27th of May 1997 and amended on the 18th of November 1997 ("First Supplementary Agreement") and amended on the 27th of January, 1998 ("First Amendatory Agreement"), and amended on the 27th of January, 1998 ("Second Supplementary Agreement"), and amended on the 28th of January, 1998 ("Third Supplementary Agreement"), and amended on the 12th of May, 1998 ("Fourth Supplementary Agreement"), and amended on the 12th of May, 1998 ("Fifth Supplementary Agreement"), and amended on 18th of June, 1998 ("Sixth Supplementary Agreement"), collectively hereinafter referred to as the "MOU" establishing a framework of organization to be effective prior to the signature of this Agreement and to be superseded by it; and + +WHEREAS, the parties to the MOU invited other International Telecommunications Entities to become Parties to this Agreement; and + +WHEREAS, the Parties now desire to define the terms and conditions upon which TAT-14 will be engineered, provided, constructed, operated and maintained in a cost effective manner for the duration of this Agreement. + +NOW, THEREFORE, the Parties, in consideration of the mutual covenants herein expressed, covenant and agree with each other as follows: + +- -------------------------------------------------------------------------------- September 2, 1998 Page 1 + +1 DEFINITIONS + +1.1 Definition of Terms + +AFFILIATE + + A company in which not less than either ten percent (10%) or the highest percentage allowed by the local law, whichever is the lowest, of its voting capital is owned directly or indirectly by a Party or a company owning directly or indirectly not less than either ten (10%) or the highest percentage allowed by the local law, whichever is the lowest, of the voting capital of a Party. + +AGENT + + An entity acting on behalf of a Party or a Purchaser for access to a Terminal Station which has an appropriate license to provide backhaul and access in the respective Country. + +BASIC SYSTEM MODULE (BSM) + + A Basic System Module of TAT-14 shall consist of a 155,520,000 bits per second digital line section with interfaces in accordance with ITU-T Recommendations G.707 "Network Node Interface for the Synchronous Digital Hierarchy" Issue 1996 (STM-1). A Basic System Module shall contain 63 MIUs (Minimum Investment Units). + + + + + +CABLE LANDING POINT + + Cable Landing Point shall be the beach joint at the respective cable landing locations or mean low watermark of ordinary spring tides line if there is no beach joint. + +CABLE STATIONS + + The Cable Stations are the locations where TAT-14 is terminated and where access to other cable systems may be provided. + +- -------------------------------------------------------------------------------- September 2, 1998 Page 2 + +CAPACITY + + Capacity shall be categorized as follows: + + (i) Design Capacity + + The design ring capacity of Segment S of TAT-14, which is 640 Gbit/s. + + (ii) Allocated Capacity + + Number of Ring-MlUs distributed to Parties, based on their financial commitments at the time of signing of this Agreement, as shown in Schedule C. + + (iii) Purchased Capacity + + Capacity purchased after signing of this Agreement by a Purchase Contract. + + (iv) Sold Capacity + + The sum of the Allocated Capacity and the Purchased Capacity. + + (v) Common Reserve Capacity (CRC) + + The difference between the Design Capacity and the Sold Capacity. + +COUNTRY + + Country as used in this Agreement shall mean country, territory or place, as appropriate. For the purposes of Paragraph 15 of this Agreement the Country associated with Telia shall mean Denmark. + +INTERNATIONAL TELECOMMUNICATIONS ENTITY (ITE) + + Any entity authorized or permitted under the laws of its respective Country, or another Country in which it operates, to acquire and use international transmission facilities for the provision of international telecommunications services and which is in possession of any necessary operating license to enable it to do so. + +MAINTENANCE AUTHORITIES + + The Maintenance Authorities in TAT-14 shall be the Terminal Parties. + +- -------------------------------------------------------------------------------- September 2, 1998 Page 3 + + + + + +MINIMUM INVESTMENT UNIT (MIU) + + One Ring-MIU + +MOU PARTIES + + The MOU Parties are AT&T, BT, C&W, DTAG, FT, KPN, MCII, PGE, Sprint, Swisscom, Telia. + +PRIVATE AGREEMENT + + An agreement to make capacity available on conditions other than on an ownership basis from a Party to another Party or to another assignee of capacity in possession of any and all requisite licenses for the provision of international telecommunications. + +PURCHASER + + An assignee of capacity, including a Party, obtaining TAT-14 capacity by means of a Purchase Contract and in possession of any and all requisite licenses for the provision of international telecommunications. + +PURCHASE CONTRACT + + A contract to make capacity available from the CRC on conditions other than on an ownership basis. + +READY FOR CUSTOMER SERVICE (RFCS) DATE + + The Ready for Customer Service Date (hereinafter called "RFCS Date") shall be considered as the date at which the Parties agree to place TAT-14 into operation for customer service. The RFCS Date is planned to be by 15 December 2000. + +READY FOR PROVISIONAL ACCEPTANCE (RFPA) DATE + + The date on which Segment S of TAT-14 is accepted by the Procurement Group on behalf of the Parties. The Ready for Provisional Acceptance Date (hereinafter called "RFPA Date") is planned to be by 31 October 2000. + +- -------------------------------------------------------------------------------- September 2, 1998 Page 4 + +RING + + An electrical and/or optical loop that provides two independent bi-directional paths between two points for the same traffic. + +RING-MIU + + A nominal 2 Mbps bearer, and all the additional overhead bits per second recommended by ITU-T standards for multiplexing, in a Ring configuration with the capability of bi-directional operation. + +SUBSIDIARY + + A company having at least the majority of its shares owned legally or beneficially, directly or indirectly by its parent company. + +SUPPLY CONTRACT + + The contract to be placed with the Supplier for the provision of Segment S of TAT-14. + + + + + +SYSTEM INTERFACE + + The System Interface shall be the nominal 155,520,000 bit/s (STM-1) digital optical/electrical input/output ports, including STM-4, STM-16, and/or any other higher level, on the digital distribution frame (including the digital distribution frame itself, and any additional access equipment as shall be deemed necessary by the Managing Group, including any crossconnect equipment, and shall be regarded as the interface location where TAT-14 connects with other transmission facilities or equipment. + +TERMINAL PARTIES + + The Terminal Parties are AT&T, BT, Deutsche Telekom, France Telecom, KPN, Sprint, and Telia. + +- -------------------------------------------------------------------------------- September 2, 1998 Page 5 + +1.2 Schedules and Annexes + + The Schedules and Annexes to this Agreement, and any supplementary or amendatory agreement thereto or any Schedules and Annexes substituted therefore, shall form part of this Agreement, and any Paragraph which contains a reference to a Schedule or Annex shall be read as if the Schedule or Annex was set out at length in the body of the Paragraph itself. In the event that there is any conflict between the terms and conditions of this Agreement and the Schedules and Annexes to this Agreement, the terms and conditions of this Agreement shall prevail. + +2 BASIC PRINCIPLES + +2.1 Parties to this Agreement are ITEs and shall be entitled to participate in the General Committee in accordance with Paragraph 6. + +2.2 A Managing Group shall be established for the purpose of supervising TAT-14. The Managing Group will consist of one representative from each of the MOU Parties and one representative from any other Party or Parties who, individually or collectively, represent 10% or more of the total voting interests specified in Schedule B. The Managing Group will take all decisions not reserved for the General Committee, which are necessary to engineer, provide, install, bring into service, operate and maintain, administer, bill and market TAT-14. + +2.3 The acquisition of capacity on an ownership basis is not permitted after the Effective Date of this Agreement, at which time Schedule B will be fixed. + +3 CONFIGURATION + +3.1 TAT-14 is a ring system comprising two transatlantic links and terminals in the USA (two), the UK, France, the Netherlands, Germany and Denmark (as referenced in Annex 11). The cable contains four fibre pairs, each initially operating at 160 Gbit/s. + +3.2 In accordance with this Agreement, TAT-14 shall be regarded as consisting of the following Segments: + + Segment S: The submarine portion of TAT-14 as defined in Subparagraphs 3.3 and 3.4 of this Agreement; + + Segment T1: The Sprint Cable Station at Manasquan in the United States of America; + +- -------------------------------------------------------------------------------- September 2, 1998 Page 6 + + + + + + Segment T2: The AT&T Cable Station at Tuckerton in the United States of America, + + Segment T3: The BT Cable Station at Widemouth, the intermediate station at Pentewan and the duct between these stations, in the United Kingdom; + + Segment T4: The FT Cable Station at St. Valery-en-Caux in France; + + Segment T5: The KPN Cable Station at Katwijk in the Netherlands; + + Segment T6: The DTAG Cable Station at Norden in Germany; + + Segment T7: The Telia Cable Station at Blaabjerg in Denmark. + +3.3 Segments T1 to T7 shall each consist of: + + (i) an appropriate share of the land and buildings at the specified locations for the cable landing, the Cable Station and the cable rights-of-way and ducts between a Cable Station and its respective Cable Landing Point, and an appropriate share of common services and equipment associated with and necessary for Segment S; (ii) interface equipment in each of the cable stations associated solely and directly with TAT-14 to operate and interface at the System Interface operating point associated solely with TAT-14; and (iii) an appropriate share of the test equipment (not solely associated with TAT- 14). + +3.4 Segment S shall consist of the following Subsegments: + + Subsegment S: The submarine cable consisting of four fibre pairs between Manasquan and Tuckerton; + + Subsegment S2: The submarine cable consisting of four fibre pairs between Tuckerton and Widemouth; + + Subsegment S3: The submarine cable consisting of four fibre pairs between Widemouth and St Valery-en-Caux; + +- -------------------------------------------------------------------------------- September 2, 1998 Page 7 + + Subsegment S4: The submarine cable consisting of four fibre pairs between St Valery-en-Caux and Katwijk; + + Subsegment S5: The submarine cable consisting of four fibre pairs between Katwijk and Norden; + + Subsegment S6: The submarine cable consisting of four fibre pairs between Norden and Blaabjerg; + + Subsegment S7: The submarine cable consisting of four fibre pairs between Blaabjerg and Manasquan. + +3.5 Segment S shall consist of the whole of the submarine cable between the Cable Stations and shall include but shall not be limited to: + + (i) all transmission equipment, System Interface equipment, power feeding equipment and special test equipment directly associated with the submersible plant, located in the respective Cable Station;, (ii) the power equipment provided wholly for use with the equipment listed in (i) above; (iii) the transmission cable equipped with appropriate amplifiers, and joint housings between the Cable Stations including spare cable and spare amplifiers; (iv) the sea earth cable and electrode system or the land earth system, or an appropriate share thereof, associated with the terminal power feeding equipment in the respective Cable + + + + + + Stations; (v) all special test equipment, system supervisory and control equipment solely associated with TAT-14; (vi) the interconnection equipment which shall be used to groom all payload virtual containers transported by TAT-14 as required, however configured, in order to meet the internal connectivity requirements of TAT-14; + +3.6 TAT-14 will operate as a SDH submarine cable system in accordance with ITU-T Recommendations G.707 Issue 1996 supporting VC12, VC3 and VC4 paths and higher order paths as defined in the System Interface. + +4 PROVISION OF SEGMENTS T AND S + +4.1 Each of the Segments T1 to T7 shall be provided by the Terminal Party owning that segment, as shown in Subparagraph 5.1, in accordance with the terms of Paragraph 18 of this Agreement. Segments T1 to T7 shall be provided in sufficient time to permit TAT-14 to be placed into operation by the RFPA Date. + +- -------------------------------------------------------------------------------- September 2, 1998 Page 8 + +4.2 Segment S shall be provided through a Supply Contract to be placed by the Procurement Group on behalf of the Parties in accordance with Paragraph 8 of this Agreement. + +5 OWNERSHIP OF SEGMENTS AND ADDITIONAL PROPERTY + +5.1 Segments T1 to T7 of TAT-14 shall be owned as follows; + + (i) Segment T1 shall be owned by Sprint; (ii) Segment T2 shall be owned by AT&T; (iii) Segment T3 shall be owned by BT; (iv) Segment T4 shall be owned by FT; (v) Segment T5 shall be owned by KPN; (vi) Segment T6 shall be owned by DTAG; (vii) Segment T7 shall be owned by Telia. + +5.2 Segment S shall be owned by the Parties in common and undivided shares in the proportions set forth in Schedule B. Ownership of Segment S and voting interests, as shown in Schedule B to this Agreement, shall be based upon the financial investment of each Party. + +5.3 References to any Segment in this Agreement shall be deemed to include, unless the context otherwise requires, additional property incorporated therein by agreement of the Parties. Each Segment shall be regarded as including its related spares and standby units and components, including, but not limited to, submersible amplifiers, cable lengths and terminal equipment as necessary for the operational capability of TAT-14. + +6 ESTABLISHMENT OF THE GENERAL COMMITTEE + +6.1 For the purpose of monitoring the provision and continued operation of TAT-14, of making key decisions as specified in this Agreement, the Parties shall, upon the signing of this Agreement, form a TAT-14 General Committee (hereinafter called the "General Committee") consisting of one representative of each of the Parties. + + 6.2 At each General Committee meeting a hosting Party for the next meeting will be decided. The hosting Party for each General Committee meeting will provide the chairperson who will retain the coordination function until the next meeting. + +6.3 To aid the General Committee in the performance of the duties assigned to it, pursuant to this Agreement, and to ensure flexibility and efficiency in constructing, operating, maintaining and marketing TAT-14, the General Committee immediately after signing this Agreement, shall establish the Managing Group, as set forth in Subparagraph 2.2 and Paragraph 7. The General Committee shall also + +- -------------------------------------------------------------------------------- September 2, 1998 Pages 9 + + + + + + be responsible for: + + (i) the overall supervision of the project; (ii) approval of the initial budget for TAT-14; (iii) approval of the TAT-14 annual report submitted by the Managing Group; (iv) approval of the administrative budget of the Managing Group; (iv) reviewing and acting on any other reports submitted by the Managing Group; and (v) providing a forum for approval and execution of any amendments to the C&MA in accordance with Subparagraph 35.1. + +6.4 During the project implementation, the General Committee shall meet at least once a year on the call of the chairperson. After the RFCS Date, the General Committee shall meet whenever requested by the chairperson. Furthermore, the General Committee shall meet whenever it is requested by two or more Parties collectively representing at least 5 % of the total voting interests as specified in Schedule B. + +6.5 In calling the General Committee meetings, the chairperson shall give at least forty-five (45) days' advance notice of each meeting together with a copy of the draft agenda. In cases of emergency, such notice period may be reduced if Parties representing at least one-third (1/3) of the total voting interests as specified in Schedule B, are in agreement. + +6.6 All decisions made by the General Committee shall be subject, in the first place, to consultation among the Parties, who shall make all reasonable efforts to reach agreement with respect to matters to be decided. However, in the event agreement cannot be reached, the decision shall be carried on the basis of a vote. The vote shall be carried by a majority (more than 50 %) of the total voting interest as specified in Schedule B, unless otherwise stated in this Agreement. A member of the General Committee representing more than one Party shall separately cast the vote to which each Party he represents is entitled. + +6.7 Decisions required between scheduled General Committee meetings may also be reached by correspondence, provided : + + (i) all Parties are provided with all the necessary and relevant information regarding the decision to be taken; and (ii) the decision taken is reduced to writing and approved by the required majority of the total voting interest as specified in Schedule B. + +6.8 All decisions made by the General Committee shall be binding on all the Parties. No decisions of the General Committee shall override any provision of this Agreement. + +- -------------------------------------------------------------------------------- September 2, 1998 Page l0 + +7 ESTABLISHMENT OF THE MANAGING GROUP + +7.1 The Managing Group will consist of one representative from each MOU Party and one representative from any other Party or Parties who individually or collectively represent 10 % or more of the total voting interest as specified in Schedule B. + +7.2 To aid the Managing Group in the performance of the duties assigned to it pursuant to this Agreement, the following bodies shall be formed under the direction of the Managing Group: + + (i) a Procurement Group; (ii) a Capacity Assignment, Routing and Restoration Subcommittee (hereinafter called "AR&R Subcommittee"); (iii) a Financial and Administrative Subcommittee (hereinafter called "F&A Subcommittee"); (iv) a Central Billing Party (hereinafter called "CBP"), and (v) a Network Administrator (hereinafter called "NA"). + + These bodies shall be responsible for their respective areas of interest as listed in the respective Annexes 2 to 6 of this Agreement and any other tasks designated by the Managing Group, The Managing Group may also appoint other groups or Subcommittees to address specific questions which may arise during the period this Agreement is in force. + +7.3 The Managing Group shall act in the interest of the TAT-14 Cable + + + + + + Network. All decisions made by the Managing Group, in accordance with its Terms of Reference contained in Annex 1, shall be binding on all the Parties. No decisions of the Managing Group or its Subcommittees or any other group established by the Managing Group shall override any provision of this Agreement. + +7.4 The Subcommittees shall meet at least once annually after the Effective Date of this Agreement and more frequently if necessary, until the RFCS Date of TAT-14 and thereafter as may be appropriate. The Chairperson shall give reasonable advance notice of each meeting, together with a copy of the draft agenda, insofar as possible at least forty-five (45) days prior to the date of the proposed meeting. The Chairperson of each Subcommittee, or a designated representative, may attend meetings of the other Subcommittees in an advisory capacity as necessary. + +7.5 After the RFCS Date of TAT-14, the Managing Group shall determine whether any of its Subcommittees or any other group should remain in existence. In the event that the Managing Group determines that any of its Subcommittees, or any other group should not remain in existence, the Managing Group has the right to determine, in accordance with its Terms of Reference contained in Annex 1 of + +- -------------------------------------------------------------------------------- September 2, 1998 Page 11 + + this Agreement, the manner in which the Subcommittee's, or any other group's responsibilities shall be reassigned. + +8 PROCUREMENT GROUP; SUPPLY FOR SEGMENT S + +8.1 The Procurement Group shall consist of AT&T, BT, C&W, DTAG, FT, KPN, MCII, PGE, Sprint and Telia. This group shall act on a joint but not several basis on behalf of the Parties to this Agreement and, in accordance with its Terms of Reference contained in Annex 2, shall negotiate the Supply Contract with the selected supplier (hereinafter called the "Supplier") to engineer, provide and install or to cause to be engineered, provided and installed all of Segment S of TAT-14, except for such Segment S work as may be performed by the Terminal Parties or their subcontractors. + +8.2 The Procurement Group shall recommend a Supplier to the Managing Group after submission and evaluation of proposals following an open international tender. After Managing Group approval, the Procurement Group shall execute the Supply Contract. + +8.3 The Procurement Group shall ensure that the Supply Contract will require the Supplier to engineer, provide and install Segment S in sufficient time to permit TAT-14 to be placed into operation by the RFCS Date. Notwithstanding that certain work of Segment S will be performed by the Terminal Parties or their subcontractors, the Supply Contract shall require the Supplier to guarantee that Segment S will conform to the technical performance requirements for TAT-14 as specified in the Supply Contract. + +8.4 The Procurement Group shall ensure that the Supply Contract shall afford its designated representatives reasonable rights of access to examine, test and inspect the submarine cable, land cable, submarine cable and land cable equipment, material, supplies and installation activities. Such representatives shall provide reasonable advance notice to the relevant Terminal Party when access to any of the Segments T1 to T7 is required. The relevant Terminal Party shall have the right to have its own representatives present during such activities. + +8.5 In the event that any portion of Segment S of TAT-14 fails to meet the specifications referenced in the Supply Contract for its provision, fails to provide the specified capacity, or is not engineered, provided, installed and ready in sufficient time to permit Segment S to be provisionally accepted on or before the RFPA Date, the Procurement Group shall take such action as may be necessary to exercise the rights and remedies under the terms and conditions of the Supply Contract. The Procurement Group shall also take any other actions directly against the Supplier as may be necessary to exercise any or all rights and remedies available under the Supply Contract. Such actions by the + + + + + + Procurement Group shall be subject to any direction deemed necessary by the Managing Group. + +- -------------------------------------------------------------------------------- September 2, 1998 Page 12 + +8.6 Neither the individual members of the Procurement Group, nor the Parties they represent, shall be liable to any other Party for any loss or damage sustained by reason of a Supplier's failure to perform in accordance with the terms and conditions of its Supply Contract, or as a result of Segment S of TAT-14 not meeting the RFPA Date as specified in the Supply Contract, or if TAT-14 does not perform in accordance with the technical specifications and other requirements of the Supply Contract, or TAT-14 is not integrated or placed into operation. The Parties recognize that the Procurement Group does not guarantee or warrant: + + (i) the performance of the Supply Contract by the Supplier; (ii) the performance or reliability of Segment S; or (iii) that TAT-14 shall be integrated or placed into operation. + +8.7 The Managing Group shall authorize the Procurement Group to implement contract variations provided that the cumulative total of all such changes to the Supply Contract does not increase the value of the Supply Contract by more than $ 50M. Any further contract variations which increase the revised budget shall be submitted to the General Committee for approval. + +9 ACQUISITION AND USE OF CAPACITY + +9.1 The Parties hereby acquire Allocated Capacity in the form of Ring-MlUs on an ownership basis as shown in Schedule C. After the signing of this Agreement, capacity may only be acquired through a Purchase Contract or through a Private Agreement, in accordance with this Paragraph 9. + +9.2 An assignee of capacity under a Purchase Contract or Private Agreement must be either a Party or an entity in possession of any and all requisite licenses authorizing it to own, operate, acquire, sell and/or use, as appropriate, the capacity in TAT-14 for the provision of international telecommunications. + +9.3 The Parties and Purchasers shall designate the Cable Stations and the amount of capacity to the NA that is planned to be activated, at some period in advance of the date of the activation, Such period would be determined by the Managing Group. + +9.4 The assignment of each Party's Allocated Capacity to each Cable Station at the time of the signing of this Agreement is shown in Schedule C-1. A Party or Purchaser may move any portion of its capacity, from one Cable Station, to any other Cable Station without any increase in investment. A request for such a reassignment shall be notified to the NA at some period in advance of the date of reassignment, such period and reassignment shall be in accordance with procedures developed by the NA and approved by the Managing Group. + +- -------------------------------------------------------------------------------- September 2, 1998 Paqe 13 + +9.5 The CRC of TAT-14 shall be owned by the Parties in common and undivided shares. + +9.6 The Managing Group shall establish the terms and conditions including pricing criteria for sales of capacity from the CRC. The NA shall develop procedures for sale of capacity from the CRC and a Purchase Contract for approval by the Managing Group. Following such approval, the NA shall be authorized to execute any such Purchase Contract on behalf of all the Parties. No provisions of any Purchase Contract shall override the provisions of this Agreement. The Purchase Contract price structure may be reviewed and amended if necessary, by the Managing Group + +9.7 Each Party shall be compensated from the sale of capacity from the CRC + + + + + + under conditions set forth by the Managing Group in accordance with Schedule C. + +9.8 Any Party shall be entitled to transfer any part of its Allocated Capacity through a Private Agreement. No provisions of a Private Agreement shall override the provisions of this Agreement. + +9.9 Each Purchase Contract or Private Agreement shall + + (i) contain at least the same conditions on utilization of capacity as specified in Subparagraphs 9.16 and 9.17; and (ii) require that the entity acquiring the capacity may only further transfer its capacity under the same conditions. + +9.10 Notwithstanding Subparagraph 2.3, at the discretion of the Managing Group, the distribution of capacity from the CRC may be made on a pro rata basis, in whole Ring-MlUs, in accordance with the percentages in Schedule C. + +9.11 No later than three years after the TAT-14 RFCS the remaining CRC shall be distributed to the Parties on a pro rata basis in accordance with Schedule C. The Managing Group will determine the process for the sale of capacity of those Parties that do not need their pro rata distribution. + +9.12 The Managing Group may authorize the utilization of the CRC for restoration of other communications systems based on appropriate terms and conditions. Parties will be refunded in accordance with Schedule B. + +9.13 The Managing Group may study and negotiate the exchange or sale of a portion of the CRC with other cable systems on such basis as is deemed mutually beneficial to the Parties. The terms and conditions of such exchange or sale of capacity shall be approved by the General Committee. + +- -------------------------------------------------------------------------------- September 2, 1998 Page 14 + +9.14 The Managing Group may authorize occasional use of the CRC, if available, for the provision of temporary or occasional telecommunications services, including but not limited to leases to any Party or Purchaser and paid restoration of other systems, on terms and conditions to be determined by the Managing Group. The revenue from such occasional use shall be shared by the Parties in accordance with Schedule B + +9.15 TAT-14 shall be capable of at least supporting payload paths of VC12, VC3 and VC4. The Parties shall have the right to access such payload paths which shall require 1, 21 and 63 contiguous MIUs respectively. Each Party will also be permitted to access its capacity ownership on defined SDH levels of its choice at a higher order in accordance with the System Interface. + +9.16 The communications capability of any capacity may be optimized by the Parties or Purchasers to whom such capacity is assigned by the use of equipment which will more efficiently use such capacity, provided that the use of such equipment does not cause an interruption of, or interference to the use of any other capacity in TAT-14 or prevent the use of similar equipment by other Parties or Purchasers. Such equipment, if used, shall not constitute a part of TAT-14. + +9.17 Data streams entering into and being transported by TAT-14 must be compliant with the ITU Recommendation G.707, issue 1996, in order to avoid any interruption, degradation or any other adverse effect on the performance of TAT-14 or other data streams in TAT-14. Each Party agrees that all of its capacity will comply with this obligation in respect of all capacity which is assigned to that Party. If after notification by the Maintenance Authorities, the Party responsible for such capacity does not take immediate action to prevent any further interruption, degradation or other negative influence, the Maintenance Authorities may take any reasonable action to protect the other capacity in TAT-14 including the disconnection of the capacity responsible for such interruption, degradation or adverse effect. + +10. EQUIPAGE + + Unless otherwise decided by the Managing Group, TAT-14 shall be fully + + + + + + equipped for 640 Gb/s to the System Interface level at the RFPA Date. + +11 INCREASE OR DECREASE OF DESIGN CAPACITY + +11.1 The Managing Group may decide to increase the Design Capacity. Following such a decision, the Managing Group shall develop an implementation plan for and the terms and conditions of such an increase. The proposed implementation plan and terms and conditions shall be submitted to the General Committee for approval. + +- -------------------------------------------------------------------------------- September 2, 1998 Page 15 + +11.2 If subsequent to the RFCS Date, the Design Capacity is decreased pursuant to the agreement of the Managing Group and such decrease of the Design Capacity affects neither the routing of circuits assigned in TAT-14 nor the Sold Capacity of TAT-14, the reduction in Design Capacity will be subtracted from the CRC as determined by the Managing Group. + +11.3 In the event that the capacity which TAT-14, or any Segment thereof, is capable of providing is reduced below the capacity required to support the Sold Capacity on its existing or planned routings as a result of physical deterioration, or for other reasons beyond the control of the Parties, the Managing Group shall initiate a review of the capacity routings in order to support the rerouting of such Sold Capacity. If necessary, the Managing Group may further consider changes to capacity assignments. + +11.4 Financial adjustments shall be made among the Parties, as necessary, under terms and conditions recommended by the Managing Group and approved by the General Committee. + +12 OWNERSHIP PRICING + +12.1 The TAT-14 Initial Ownership Pricing Matrix is shown in Annex 8. + +12.2 In the event that the final cost of TAT-14 is lower than the initial budget, each Party's investment shall be reduced on a pro-rata basis in accordance with Schedule B, with no change to its Allocated Capacity. If the final cost of TAT-14 is higher than the initial budget each Party's investment shall be increased on a pro-rata basis in accordance with Schedule B. Schedule C shall not be affected. + +13 DEFINITION OF CAPITAL COSTS OF SEGMENT S + +13.1 Capital costs of Segment S, as used in this Agreement, refers to costs incurred in engineering, providing, and constructing Segment S, or causing it to be engineered, provided, and constructed, or in laying or causing to be laid cables, amplifiers and joint housings, or in installing or causing to be installed cable system equipment, and shall include: + + (i) the costs incurred under the terms of the TAT-14 MOU as identified in the TAT-14 budget; (ii) those costs payable to the Supplier under the Supply Contract, and + +- -------------------------------------------------------------------------------- September 2, 1998 Page 16 + + (iii) other costs incurred under the direction of the Managing Group, or the Procurement Group, and those capital costs directly incurred by the Terminal Parties, the CBP, the NA or any Party authorized by the Managing Group, which shall be fair and reasonable in amount and not included in the Supply Contract and which have been directly and reasonably incurred for the purpose of, or to be properly chargeable, in respect of such engineering, provision, construction, installation and laying of Segment S of TAT-14. Such costs shall include, but are not limited to, the costs of engineering, design, materials, + + + + + + manufacturing, procurement and inspection, installation, removal (with appropriate reduction for salvage), cable ship and other ship costs, route surveys, burying, testing associated with laying or installation, customs duties, taxes (except income tax imposed upon the net income of a Party), appropriate financial charges attributable to other Parties' shares of costs incurred by the Terminal Parties or any other Party authorized by the Managing Group, at the rate at which such Party generally incurred such financial charges, supervision, billing activities, overheads and insurance or a reasonable allowance in lieu of insurance, if such Party elects to carry a risk itself, being a risk against which insurance is usual or recognized or would have been reasonable. Such costs shall include costs incurred by the Parties in the holding of the Data Gathering and the General Committee meetings but excluding attendance by the Parties' representatives at such meetings. Such costs shall also include costs incurred by the Parties in holding the meetings of the Managing Group, the Procurement Group and its Working Groups and the preparation and attendance by the Parties' representatives at such meetings. + +13.2 Capital costs shall exclude costs incurred by the Parties holding meetings of the AR&R Subcommittee and F&A Subcommittee established pursuant to Subparagraph 7.2 of this Agreement or the attendance by the Parties' representatives at such meetings. + +13.3 Any amounts received by, or credited to, a Party or the CBP as a consequence of letters of guarantee, liquidated damages, or other similar amounts resulting from the failure of the Supplier to fully perform any provision of the Supply Contract, shall accrue to the benefit of all the Parties in accordance with Schedule B. + +13.4 The cost of repair or replacement of any part of TAT-14 in the event of damage or loss arising during construction, laying, burying, installing and the bringing into operation of TAT-14, which is attributable under the Supply Contract to the Parties, shall be regarded as part of the capital costs for the purpose of Subparagraph 13.1. Any of the Parties may at its own expense insure against such risks so far as its own share of costs is concerned. Should the Managing Group agree to jointly insure against such risks, the cost of such insurance will form part of the capital costs referred to in Subparagraph 13.1. + +14 ALLOCATION AND BILLING OF SEGMENTS CAPITAL COSTS + +14.1 The capital costs of Segment S of TAT-14, as defined in Paragraph 13, including any additional work or property incorporated subsequent to the RFPA Date + +- -------------------------------------------------------------------------------- September 2, 1998 Page 17 + + by agreement of the Parties, shall be borne by the Parties in the proportions set forth in Schedule B. + +14.2 The CBP will receive invoices from the Supplier for the costs due and included in the Supply Contract. The Parties shall promptly render invoices to the CBP for the cost of items directly incurred by them in accordance with Subparagraph 13.1. The CBP shall promptly render bills to each of the Parties for such Party's pro rata share of costs due and included in the invoices it has received in accordance with Schedule B. Such bills shall contain a reasonable amount of detail to substantiate them. On the basis of such bills, each Party shall pay to the CBP the amount owed within forty-five (45) days from the date the bill was rendered by the CBP in the currency shown on the respective bill. + +14.3 For the purpose of this Agreement, financial charges shall be computed, as appropriate, at a rate equal to the lowest publicly announced prime rate or minimum commercial lending rate, however described, for ninety-day loans on the 1st working day of each month of the period to be considered in the Country and in the currency in which the bill is rendered. With respect to the Parties rendering invoices under this Agreement, Annex 7 specifies those rates. If the Managing Group should authorize a Party in a Country other than those Parties listed in Annex 7 to render invoices, the Managing Group shall specify the applicable rates. + +14.4 For the purposes of this Agreement, "paid" shall mean that the funds are available for immediate use by the recipient. + +14.5 Bills not paid when due shall accrue extended payment charges from the + + + + + + day following the date on which payment was due in accordance with Subparagraph 14.2 until the day on which it is paid. For the purposes of this Agreement, extended payment charges shall be computed at a rate equal to 150 % of the appropriate financial charges as indicated in Subparagraph 14.3 on the day following the date payment of the bill was due. In the event that applicable law allows the imposition of extended payment interest charges only at a rate less than that established in accordance with this Subparagraph, extended payment charges shall be at the highest rate permitted by such applicable law. In this case, appropriate documents to demonstrate the applicability of such law shall be provided by the concerned Party. + +14.6 Extended payment charges recovered by the CBP, in excess of the amounts paid or due, excluding interest paid by whichever Party or Parties have covered the deficit in the intervening period, shall accrue to the benefit of all the Parties in accordance with Schedule B. + +14.7 Procedures for rendering credits for refunds of appropriate financial charges and bills for extended payment charges will be developed by the CBP in conjunction with the F&A Subcommittee. + +- -------------------------------------------------------------------------------- September 2, 1998 Page 18 + +14.8 As soon as practicable after the RFPA Date, the amount of each Party's share of the costs of Segment S shall be computed by the CBP which will make appropriate adjustments and render any necessary bills or arrange for any necessary refunds by way of final settlement in order that each Party may bear its appropriate share of the costs as provided in Subparagraph 14.1. + +14.9 A bill shall be deemed to have been accepted by the Party to whom it is rendered if that Party does not present a written objection to the CBP on or before fifteen (15) days prior to the date when payment is due. If such objection is made, the Parties concerned shall make every reasonable effort to settle promptly the dispute concerning the bill in question. If the objection is sustained and the billed Party has paid the disputed bill, the agreed upon overpayment shall be refunded promptly to the objecting Party by the billing Party together with any financial charges calculated thereon at a rate determined in accordance with Subparagraph 14.3 of this Agreement from the date of payment of the bill to the date on which the refund is transmitted to the objecting Party. If the objection is not sustained and the billed Party has not paid the disputed bill, said Party will pay such bill promptly together with any extended payment charges calculated thereon at a rate determined in accordance with Subparagraph 14.5 of this Agreement from the day following the date on which payment of the bill was due until paid. Nothing in this Subparagraph shall relieve a Party from paying those parts of a bill that are not in dispute. The provisions of this Subparagraph shall be without prejudice to the rights of any Party pursuant to Paragraph 21 of this Agreement. + +15 TRANSIT FACILITIES TO EXTEND TAT-14 CAPACITY AND CONNECTION WITH INLAND SYSTEMS + +15.1 The Terminal Parties shall use all reasonable efforts to furnish and maintain, or cause to be furnished and maintained, in working order for the other Parties and for the Purchasers in TAT-14, for the duration of this Agreement, the necessary facilities in their respective Countries as may be reasonably required for extending capacity in TAT-14 assigned to such Parties or Purchasers for the purpose of handling communications transiting the Country involved. No Party shall be required under this Agreement to furnish such transit facilities in its Country to other Parties or Purchasers of its own Country. + +15.2 Such facilities referred to in Subparagraph 15.1 shall be suitable for extending capacity in TAT-14 and shall be furnished and maintained on terms and conditions which shall be no less favorable than those granted to other ITEs for transmission facilities of similar type and quantity transiting the Country. Such terms and conditions shall not override any applicable governmental laws and regulations in the Country in which the facilities are located. + +15.3 Each Terminal Party shall provide, within the Country of its Cable Station, connection to TAT-14 at the SDH Interface Equipment levels, VC12, VC3 or VC4 levels, to Parties and Purchasers on terms and conditions to be agreed by the Terminal Party and the other Party or Purchaser under a separate agreement. + +- -------------------------------------------------------------------------------- + + + + + +September 2, 1998 Page 19 + +15.4 The Terminal Parties shall, at its own expense, on or before the RFPA Date do or cause to be done, all such acts and things as may be necessary within its operating territory to provide and maintain throughout the period of this Agreement suitable connection of capacity in, or connected with capacity in TAT-14 with appropriate inland communications facilities in its operating Country. + +15.5 Upon request, each Terminal Party in its Country shall make all reasonable efforts to provide to other Parties or Purchasers, or Agents of the Parties or Purchasers from such Terminal Party's Country, access to TAT-14 in the vicinity of its Cable Station (not necessarily co-located) at the level of a Basic System Module or multiples thereof, given that the requesting Party or Purchaser has the appropriate capacity assigned to it. Such facilities shall be provided in a timely manner and for the duration of this Agreement under the terms and conditions to be negotiated and agreed between the Parties or Purchasers concerned under a separate agreement. + +15.6 As U.S. Terminal Parties, AT&T and SPRINT shall provide to other U.S. Parties, upon request, suitable space and connection with TAT-14 for operating and technical control purposes relating to capacity assigned, or to be assigned, to them in TAT-14. AT&T and SPRINT shall provide such space in a building separate, but adjacent to its cable station and located on the land which forms a part of Segments T1 and T2. These U.S. Parties shall have the right to provide their own personnel and equipment in such space. Such U.S. Parties shall reimburse AT&T and SPRINT for the reasonable costs incurred by AT&T and SPRINT in providing such space and connection pursuant to this Paragraph 15, including but not limited to, the costs of any additional building that may be reasonably required + +15.7 The Managing Group is responsible for determining and setting service level objectives for access and activation intervals jointly with the Terminal Parties. + +16 OPERATION AND MAINTENANCE OF SEGMENTS T AND S + +16.1 The Terminal Parties, on behalf of the Parties and Purchasers, are responsible for operation and maintenance as follows: + + (i) Sprint shall be responsible for Segment T1; (ii) AT&T shall be responsible for Segment T2; (iii) BT shall be responsible for Segment T3; (iv) FT shall be responsible for Segment T4; (v) KPN shall be responsible for Segment T5; (vi) DTAG shall be responsible for Segment T6; (vii) Telia shall be responsible for Segment T7; + +16.2 Each Terminal Party shall also be responsible for the operation and maintenance of that portion of Segment S beginning at its respective Cable Landing Point and + +- -------------------------------------------------------------------------------- September 2, 1998 Page 20 + + extending to its respective Segment T, on behalf of the Parties and the Purchasers. + +16.3 All Terminal Parties as the Maintenance Authorities, acting on behalf of the Parties and Purchasers, shall be jointly responsible for the operation and maintenance of Segment S from the respective Cable Landing Points and extending seaward, and shall undertake such activities necessary for the continued operation of TAT-14. + +16.4 Sixty (60) days before the RFPA Date the Maintenance Authorities shall submit for review by the Procurement Group and approval by the Managing Group appropriate practices and procedures for the continued operation and maintenance of Segment S. The Maintenance Authorities shall each provide information to the Procurement Group regarding the practices and procedures for the continued operation and maintenance of their respective Segments. The Maintenance Authorities shall also each develop and furnish such budgetary estimates of the cost of such operation and maintenance of TAT-14 as the Managing Group may reasonably request and provide this information to the F&A Subcommittee. Following the RFPA Date, the Maintenance Authorities shall each provide the Managing Group with such reports as it may + + + + + + reasonably require on the operation and maintenance of TAT-14 including any proposals for planned repair or improvement work, together with appropriately revised budgetary estimates relating to the operation and maintenance of TAT-14 and the inclusion of TAT-14 in any cable maintenance agreements. The Procurement Group may review and amend the practices and procedures for the operation and maintenance of Segment S, subject to the approval of the Managing Group. The Managing Group may revise the allocation of responsibility for the operation and maintenance of Segment S. + +16.5 The Maintenance Authorities, individually or collectively as appropriate, shall each use all reasonable efforts to maintain, or cause to be maintained, economically the Segments for which each is responsible, in efficient working order. Each Maintenance Authority shall discharge its responsibility in a manner consistent with applicable international submarine cable maintenance practices and with an objective of achieving effective and timely repairs when necessary. + +16.6 The Maintenance Authorities shall have the right to temporarily de-activate Segment S, or any part thereof, in order to perform their duties as Maintenance Authorities. Prior to such de-activation, reasonable notice shall be given to and coordination shall be made with the other Parties. To the extent possible, sixty (60) days prior to initiating action, the Maintenance Authority(ies) shall advise the other Parties in writing of the timing, scope, and costs of significant planned maintenance operations, of significant changes to existing operation and maintenance methods, and of contractual arrangements for cable ships that will or may have a significant impact on operation or maintenance costs. Should one or more Parties representing at least 5 % of the total voting interests specified in Schedule B wish to review such an operation or change prior to its occurrence, such Party or Parties shall notify the Maintenance Authorities involved and the Managing Group chairperson in writing within thirty (30) days of such advice. Upon such notification, the Managing Group shall initiate action to convene an ad hoc meeting for such review. + +- -------------------------------------------------------------------------------- September 2, 1998 Page 2l + +16.7 Each Maintenance Authority shall have prompt access to all system maintenance information, necessary to the performance of its duties, appropriate to those parts of TAT-14 not covered by its authority. + +16.8 No Party shall be liable to any other Party or Purchaser for any loss or damage sustained by reason of any delay in provision, failure in or breakdown of the facilities constituting TAT-14 or any interruption of service, whatsoever shall be the cause of such failure, breakdown or interruption, and however long it shall last. + +16.9 In the event of a failure or breakdown of any of such facilities, if the responsible Maintenance Authority fails to restore those facilities to efficient working order and operation within a reasonable time after having been called upon to do so by any Party or Purchaser, the Managing Group may, to the extent that it is practical to do so, place or cause to be placed, such facilities in efficient working order and operation and charge the Parties their proportionate shares of the cost reasonably incurred in doing it. + +16.10 Each Party, at its own expense, and upon reasonable advance notice to the relevant Maintenance Authorities, shall have the right to inspect from time to time the operation and maintenance of any part of TAT-14 and to obtain copies of the maintenance records. For this purpose, each Maintenance Authority shall retain significant records, including recorder charts, for a period of not less than five (5) years from the date of the record. If these records are destroyed at the end of this period, a summary of important items shall be retained for the life of TAT-14. + +16.11 Each Maintenance Authority shall be authorized to pursue claims in its own name, on behalf of the Parties, in the event of any damage or loss to TAT-14 and may file appropriate lawsuits or other proceedings on behalf of the Parties. Subject to obtaining the prior concurrence of the Managing Group, a Maintenance Authority may settle or compromise any claims and execute releases and settlement agreements on behalf of the Parties as necessary to effect a settlement or compromise. Any money ordered by the tribunal or under a settlement approved by the Managing Group shall be shared among all Parties in accordance with Schedule B. + +16.12 The Maintenance Authorities shall be entitled to enter into agreements in respect of the crossing of Segment S with undersea plant (including, but not limited to, pipelines) with the owners of such plant. The Maintenance Authorities may sign such agreements on behalf of all the Parties after agreement by the Managing Group and shall provide the + + + + + + Parties with copies of such agreements on request. + +- -------------------------------------------------------------------------------- September 2, 1998 Page 22 + +17 OPERATION AND MAINTENANCE COSTS OF SEGMENT S - ALLOCATION AND BILLING + +17.1 The operation and maintenance costs for Segment S shall be shared by the Parties in the relevant proportions specified in Schedule B. The Managing Group shall be responsible for determining the method and procedure for the charging of O&M costs to Purchasers and the distribution of any credit to the Parties in accordance with Schedule B. + +17.2 The operation and maintenance costs to which Subparagraph 17.1 refers are the costs reasonably incurred in operating and maintaining the facilities involved, including, but not limited to, the cost of attendance, testing, adjustments, repairs (including repairs at sea) and replacements, cable ships (including standby costs), re-burial and the replacement of plant, cable depots, maintenance and repair devices that are or may hereafter become available, customs duties, taxes (except income tax imposed upon the income of a Party) paid in respect of such facilities, billing activities, appropriate financial charges attributable to other Parties' shares of costs incurred by a Maintenance Authority at the rate at which the appropriate Maintenance Authority generally incurred such financial charges, supervision, overheads and costs and expenses reasonably incurred on account of claims made by or against other persons in respect of such facilities or any part thereof and damages or compensation payable by the Parties concerned on account of such claims and costs for the Managing Group and the NA costs, General Committee meeting costs, expenses and damages or compensation payable to the Parties on account of such claims shall be shared by them in the same proportions as they share the operation and maintenance costs of the relevant Segment S under Subparagraph 17.1. + +17.3 The Managing Group may authorize the provision of special tools and test equipment for use on board cable ships which are required for the maintenance and repair of TAT-14. The related costs may include, but not be limited to, the costs, or an appropriate share thereof, for the provision, storage and maintenance of this equipment. + +17.4 The Maintenance Authorities individually, the Terminal Parties or the CBP, as appropriate, shall bill the Parties in accordance with this Paragraph 17. Bills shall not be rendered more frequently than once a quarter and shall be paid by the end of the month following the month in which the bills were rendered. The billing procedures specified in Subparagraphs 14.3, 14.4, 14.5, and 14.9 shall be applicable to all bills rendered pursuant to this Paragraph 17. + +18 USE OF SEGMENTS T1 TO T7; COSTS, ALLOCATION AND BILLING + +18.1 The owners of Segments T1 to T7, respectively, as defined in Paragraph 5, hereby grant the Parties, commencing on the RFPA Date or the date a Party places any of its capacity into operation, whichever occurs first, and continuing for the term of this Agreement, the right to use such Segments for the purpose of using its Allocated Capacity and carrying on the related activities, in accordance with this Agreement as provided in this Paragraph 18 at no additional cost unless + +- -------------------------------------------------------------------------------- September 2, 1998 Page 23 + + otherwise identified in this Paragraph 18 (hereinafter referred to as "Cable Station Right of Use"). + + + + + +18.2 For the use of Segments T1 to T7, the respective Terminal Party shall identify the charge to cover capital costs and cost of maintenance, supervision and operation of that Segment. + +18.3 The Procurement Group is responsible for submitting all the detailed costs of the Cable Stations to the Managing Group for review and approval. + +18.4 The capital costs associated with Segments T1 to T7 will be borne by the Parties in accordance with Schedule B. + +18.5 The operation and maintenance costs associated with Segments T1 to T7 will be borne by the Parties in accordance with Schedule B. The Managing Group shall be responsible for determining the method and procedure for the charging of O&M costs to Purchasers and the distribution of any credit to the Parties in accordance with Schedule B. + +18.6 In determining the charge of the Cable Station Right of Use, the Terminal Parties have taken into account the estimated cost of the provision and construction of each of the Cable Stations, or causing them to be provided and constructed, and installing or causing to be installed Cable Station equipment, in accordance with the accounting practices of each Terminal Party. This includes all such expenditure reasonably incurred and includes but is not limited to, the purchase costs of land, building costs, access road, cable rights of way, amounts incurred for development, engineering, design, materials, manufacturing, procurement and inspection, installation, removing (with appropriate reduction for salvage), testing associated with installation, customs duties, taxes (except income tax imposed upon the net income of a Party), appropriate financial charges, supervision, overheads and insurance or a reasonable allowance in lieu thereof, or losses against which insurance was not provided, or for which an allowance in lieu thereof was not provided. Such charges shall be borne by the Parties in the proportions specified in Schedule B. + +18.7 In determining the operation and maintenance cost of the Cable Station Right of Use, the Terminal Parties shall take into account an estimate of costs reasonably incurred in operating and maintaining the facilities involved, including, but not limited to, the cost of attendance, testing, adjustments, repairs and replacements, customs duties, taxes (except income tax as imposed upon the net income of a Party) paid in respect of such facilities, billing activities, administrative costs, appropriate financial charges, and costs and expenses reasonably incurred on account of claims made by or against other persons in respect of such facilities or any part thereof, and damages or compensation payable by the Terminal Party on account of such claims, costs, expenses, damages, or compensation payable to or by the Terminal Party on account of claims made against other persons. + +- -------------------------------------------------------------------------------- September 2, 1998 Page 24 + +18.8 Where the use of a Cable Station or of certain equipment situated therein, such as power supply or testing and maintenance equipment, is shared by TAT-14 and other communications systems terminating at that Cable Station, the Cable Station Right of Use capital and operating and maintenance charges shall reflect the pro-rata share of the common costs attributable to TAT-14. + +18.9 If any of the Cable Stations are not available for the landing and termination of TAT-14 for any reason, the relevant Terminal Party, in agreement with the other Parties, shall take all necessary measures to ensure that another suitable Cable Station will be available for TAT-14 on fair and equitable terms for the duration of this Agreement. + +18.10 Nothing contained in this Agreement shall be deemed to vest in any Party, other than the owner of the relevant Segment, any salvage rights in Segments T1 to T7 or in the respective Cable Station or in any Cable Station substituted for any of them. + +18.11 Payments due under this Paragraph 18 shall be made in accordance with the following principles: + + (i) On the RFPA Date, or as soon after as practicable but no later than one (1) year after RFPA, the Terminal Parties will submit invoices to the CBP for their capital cost of the Cable Stations Right of Use. In the event a Terminal Party incurs additional capital costs related to TAT-14 after the RFPA Date, these invoices shall also be submitted to the CBP as soon as practicable; + + + + + + (ii) by the 1st of April of each year, the Terminal Parties will submit invoices to the CBP for their O&M charges incurred for the Cable Stations Right of Use for the previous calendar year; (iii) the Parties shall be billed individually by the CBP for the Cable Station Right of Use operation and maintenance costs shared in the proportions specified in Schedule 13; (iv) the billed Party shall pay such bills to the CBP, by the end of the month following the month in which the bills were rendered. A bill shall be payable in the currency in which it is rendered; + + (v) the Terminal Parties will be reimbursed by the CBP; + + (vi) the billing procedures specified in Subparagraphs 14.3, 14.4, 14.5, and 14.9 of this Agreement shall be applicable to all bills rendered pursuant to this Paragraph 18. + +18.12 Each Terminal Party agrees to grant a Cable Station Right of Use to TAT-14 Purchasers pursuant to the terms and conditions of the Purchase Contract. + +19 KEEPING AND INSPECTION OF BOOKS + +19.1 For the items specified in the Supply Contract, the Procurement Group shall ensure that the Supply Contract requires the Supplier to keep and maintain such books, records, vouchers and accounts of all the incurred costs with respect to + +- -------------------------------------------------------------------------------- September 2, 1998 Page 25 + + the engineering, provision and installation of facilities in Segment S of TAT-14 for a period of five (5) years from the RFPA Date. + +19.2 The Procurement Group shall ensure that the Supply Contract requires the Supplier to obtain from its contractors and subcontractors such supporting records as are specified in Subparagraph 19.1 of this Agreement and to maintain such records for a period of five (5) years from the RFPA Date. + +19.3 The Procurement Group shall ensure that the Supply Contract shall afford the representatives designated by the Managing Group the right to review the books, records, vouchers and accounts required to be kept, maintained and obtained pursuant to Subparagraphs 19.1 and 19.2 of this Agreement. + +19.4 Each Terminal Party and any other Party having properly incurred costs for implementation of TAT-14 as authorized by the Managing Group shall each keep and maintain such books, records, vouchers and accounts of all Segment S costs as defined in Paragraph 14 of this Agreement and Segments T1 to T7 costs, which they incur and are not included in the Supply Contract for a period of five (5) years from the RFPA Date or the date the work is completed, whichever is later. + +19.5 The CBP shall keep and maintain such books, records, vouchers and accounts with respect to its billing of costs incurred by the Terminal Parties and any other Party having incurred costs for implementation of TAT-14 as authorized by the Managing Group and costs billable under the Supply Contract for a period of five (5) years from the RFPA Date or the date on which the work is completed, whichever is later. + +19.6 With respect to operation and maintenance costs of Segment S and Segments T1 to TT such books, records, vouchers and accounts of costs as are relevant shall be kept and maintained by the Maintenance Authorities for a period of five (5) years from the date on which the corresponding bills were rendered to the Parties. + +19.7 Any Party keeping and maintaining books, records, vouchers and accounts of costs pursuant to Subparagraphs 19.4, 19.5 and 19.6 of this Agreement shall afford the Parties the right to review at their own expense said books, records, vouchers and accounts of costs in accordance with the audit procedures established by the F&A Subcommittee. + +20 CURRENCY AND PLACE OF PAYMENT + + Amounts due under this Agreement shall be payable in US dollars. The Managing Group may vary these procedures at its discretion. Bills shall be payable to the designated office or account of the payee. + +- -------------------------------------------------------------------------------- September 2, 1998 Page 26 + + + + + +21 DEFAULT OF PAYMENT + +21.1 If any Party fails to make any payment required by this Agreement on the date when it is due and such default continues for a period of at least two (2) months after the date when payment is due, the CBP or billing Party shall notify the billed Party in writing of its intent to notify the Managing Group of the status of the matter and to request the reclamation of capacity, as provided for in this Paragraph 21, if full payment is not received within four (4) months of such notification to the billed Party. If full payment is not received within such specific period, the billing Party or CBP may notify the Managing Group of the status of the matter and request that the Managing Group reclaim the capacity in TAT-14 assigned to the defaulting Party. + +21.2 The Managing Group shall have the option of reclaiming the capacity assigned to a Party that is in default with any payment required by this Agreement or is in default with any other material obligation under this Agreement, if such default has existed for a period of six (6) months. The Managing Group shall consider any extenuating circumstances not within the specific control of the defaulting Party and the interests of any Party or Parties that have jointly assigned capacity with the defaulting Party in determining whether or not to reclaim the capacity assigned to such defaulting Party. Prior to reclaiming the capacity the Managing Group will notify the Party in writing that it is in default and of the intent to reclaim the capacity after one (1) month. The Managing Group shall determine arrangements for disposition of any reclaimed capacity. The remaining Parties shall not be obliged to make any payment to a defaulting Party for the reclaimed capacity. Except for the rights and obligations as specified in Paragraphs 25 and 29 the rights and obligations under this Agreement of a defaulting Party shall terminate at the time the Managing Group reclaims all of the capacity previously assigned to a defaulting Party. This Agreement shall be appropriately amended to reflect the default of a Party and the reallocation of interests pursuant to arrangements determined by the Managing Group. + +22 LIABILITY + +22.1 No Party excludes or restricts its liability for death or personal injury resulting from its own negligence. Subject to the preceding sentence, no Party shall be liable to any other Party in contract, tort or otherwise including any liability for negligence for any indirect or consequential loss or damage including, without limitation, corruption or loss of data, loss of profit, loss of anticipated savings all in connection with this Agreement, caused by its own acts or those of any of its auxiliaries, such as employees, servants or agents. Furthermore, no Party shall be liable to any other Party in contract, tort or otherwise for any direct damage unless and to the extent it is based on intent or gross negligence. In no event shall any employee, servant or agent of a Party be liable to another Party for any negligence or intent in connection with this Agreement. + +22.2 No Party shall be liable to any other Party for any matter resulting from planned interruptions of TAT-14 including but not limited to final acceptance tests. + +- -------------------------------------------------------------------------------- September 2, 1998 Page 27 + +23 FORCE MAJEURE + + If any Party cannot fulfill its obligations in this Agreement due to an event beyond its reasonable control, including, but not limited to flood, exceptionally severe weather, hurricane, explosion, civil disorder, war or military operations, national or local emergency, action or inaction of government or other competent authority, it shall not be liable to the other Parties for such delay in performing or failure to perform and shall give notice to the other Parties as soon as reasonably practicable after the event has occurred. + +24 SETTLEMENT OF CLAIMS BY THE PARTIES + +24.1 Each Party shall indemnify and hold harmless the other Parties and each of their employees, servants and agents to the extent hereinafter agreed, from and against all claims, demands, actions, suits, proceedings, writs, judgment, orders and decrees brought, made or rendered against them or any of them by third parties and all damages, losses and expenses suffered or incurred by them or any of them howsoever arising out of or related to any respect of providing, constructing and maintaining TAT-14. + + + + + +24.2 If any Party is obliged by a final judgment of a competent tribunal or under a settlement approved by the Managing Group, to discharge any claim, including all reasonable costs and expenses associated therewith, resulting from the implementation of this Agreement, the Party which has discharged the claim shall be entitled to receive from the other Parties reimbursement in the proportions as set out in Schedule B. + +24.3 If any claim is brought against one or more Parties it shall, as a condition of reimbursement under Subparagraph 24.2, give written notice thereof to the Managing Group as soon as practicable and shall not admit liability nor settle, adjust or compromise the claim without the approval of the Managing Group. + +24.4 Before any Party brings a claim against any third party in respect of loss or damage to any part of TAT-14, it shall first consult with the Managing Group and shall not settle, adjust or compromise such a claim without its consent. Any money received by the claimant Party as a result of an award by a competent tribunal or under a settlement approved by the Managing Group shall be shared among the Parties in the proportions of their respective ownership shares in accordance with Schedule B. + +24.5 In the case where a claim is brought against one of the Terminal Parties, in its capacity as a Maintenance Authority for TAT-14 in respect of a sacrificed anchor and/or loss of, or damage to fishing gear, then such Terminal Party may settle such a claim for an amount not greater than $ 25,000 on each occasion or such an amount as agreed by the Managing Group from time to time, and obtain reimbursement under Subparagraph 24.2. + +- -------------------------------------------------------------------------------- September 2, 1998 Page 28 + +25 DURATION OF AGREEMENT AND REALIZATION OF ASSETS + +25.1 This Agreement shall become effective on the Effective Date and shall continue in operation for at least a period of twenty-five (25) years (hereinafter called "Initial Period") after the RFCS Date and shall be terminable thereafter by agreement of the Parties. However, any Party may terminate its participation in this Agreement at the end of the Initial Period or at any time thereafter by giving at least one year's prior notice, in writing, to the other remaining Parties. Upon the effective date of termination of participation of a Party, the Schedules of this Agreement shall be appropriately modified. The remaining Parties shall assume the capital, operation, and maintenance interests of the Party terminating its participation in proportion to their interests assigned immediately preceding such effective date of termination, except for the continuing rights and obligations of the terminating Party as specified in Subparagraphs 25.4, 25.5 and of this Agreement. No credit for capital costs will be made to a Party that terminates its participation in accordance with this Subparagraph 25.1. Termination of this Agreement or termination of the participation of any Party herein shall not terminate Subparagraphs 25.4, 25.5 of this Agreement or prejudice the operation or effect thereof or affect or diminish any other right or obligation of any Party hereto accrued or incurred prior to such termination. + +25.2 This Agreement may be terminated at any time during the Initial Period by unanimous written agreement of the Parties. If unanimous agreement cannot be reached between all the Parties for the retirement of TAT-14 during its intended lifetime, this matter will be referred to the General Committee for resolution in accordance with Subparagraph 6.6 but in this case requiring a 85 % majority of the total voting interests as specified in Schedule B. + +25.3 If a Terminal Party terminates its participation in this Agreement after the Initial Period, pursuant to Subparagraph 25.1 of this Agreement, the Managing Group and said Terminal Party will negotiate a reasonable agreement in order to ensure the continuous operation of that Cable Station after the Initial Period. + +25.4 The interests of a Party in Segment S which come to an end by reason of the termination of its participation in this Agreement, or of the termination of this Agreement, shall be deemed to continue for as long as is necessary for effectuating the purposes of Subparagraph 25.5. + +25.5 Notwithstanding Subparagraph 25.1 upon termination of this Agreement pursuant to this Paragraph 25 the Parties shall not be relieved from any liabilities, costs, damages or obligations which may arise pursuant to Paragraph 17 and/or in connection with costs or claims made by persons with respect to TAT-14 or any part thereof, or which may arise in relation to TAT-14 due to any law, order or regulation made by any government or international legal authority pursuant to any international convention, treaty or agreement. Any such liabilities, costs, damages or obligations shall be divided among the Parties in the + + + + + + proportions of their respective ownership shares in accordance with Schedule B. + +- -------------------------------------------------------------------------------- September 2, 1998 Page 29 + +26 RELATIONSHIP OF THE PARTIES + + The relationship between or among the Parties hereto shall not be that of partners or joint ventures and nothing herein contained shall be deemed to constitute a partnership between them. In relation to third parties, the Parties will not act as partners, or as any kind of joint legal entity. Any co-operation among the Parties in Committees, Groups or Subcommittees is only to facilitate the performance of this Agreement. + +27 OBTAINING OF LICENSES + +27.1 The Parties shall at all times hold the governmental and regulatory approvals necessary to operate as an ITE. The Parties shall make all reasonable efforts to obtain the appropriate consents, governmental authorizations, licenses and permits necessary to carry out their duties under this Agreement. + +27.2 The Terminal Parties will use all reasonable efforts, in their respective Country, to obtain and to have continued in effect all governmental approvals, consents, authorizations, licenses, and permits for the construction and operation of TAT-14 in the respective Countries. + +27.3 In the event that any Terminal Party fails, or is likely to fail, to obtain such approvals, consents, authorizations, licenses or permits, that Terminal Party shall give immediate notice to the Managing Group for it to take appropriate action pursuant to this Agreement. + +28 PRIVILEGES FOR DOCUMENTS OR COMMUNICATIONS + + Each Party hereto specifically reserves, and is granted by each of the other Parties, in any action, arbitration or other proceeding between or among the Parties or any of them in a Country other than that Party's own Country, the right of privilege, in accordance with the laws of that Party's own Country, with respect to any documents or communications which are material and pertinent to the subject matter of the action, arbitration or proceeding as respects which privilege could be claimed or asserted by that Party in accordance with those laws, and such privilege, whatever may be its nature and whenever it be claimed or asserted, shall be allowed to that Party as it would be allowed if the action, arbitration or other proceeding had been brought in a court of, or before an arbitrator in, the Party's own Country. + +29 CONFIDENTIALITY + +29.1 All data and information that is acquired or received by any Party in anticipation of or under this Agreement shall be confidential and shall not be divulged in any + +- -------------------------------------------------------------------------------- September 2, 1998 Page 30 + + way to any third party, without the prior written approval of the other Parties, nor shall it be used for any purpose beyond the scope of this Agreement. Any Party may, without such approval, disclose such data and information to: + + (i) the employees of that Party; or (ii) the extent required by any applicable laws, or the requirement of any recognized stock exchange in compliance with its rules and regulations or in the case if a party wholly owned by a sovereign government, by the rules of governance of the Party, or (iii) any government agency or regulatory authority lawfully requesting such information or to which such information needs to be submitted in order to obtain any necessary consent or approval', or (iv) any Court of competent jurisdiction acting in pursuance of its powers; or + + + + + + (v) professional advisors, auditors and bankers or any bona fide intending assignee upon obtaining a similar undertaking of confidentiality; or (vi) the extent that such data and/or information is generally available to the public. + + Any Party may disclose such data and information to such persons as may be necessary in connection with the conduct of operations of TAT-14 upon obtaining a similar undertaking of confidentiality from such persons. + +29.2 Each Party shall remain bound by the provisions of this Paragraph 29 during the period of this Agreement and for the period of five years following termination of this Agreement. + +30 ASSIGNMENT OF RIGHTS AND OBLIGATIONS + +30.1 No Party may assign, sell, transfer or dispose of part or parts of its rights or obligations under this Agreement except as otherwise provided for in Paragraph 9. + +30.2 A Party may assign the whole of its rights under this Agreement to a successor by law, Subsidiary or Affiliate of such Party, or a corporation or an entity jointly controlling or under the same common control as such Party, provided that the assigning Party shall remain jointly and severally liable with the assignee for the performance of this Agreement for the duration of the Agreement. The Managing Group may decide that the assigning Party will not remain jointly and severally liable with the assignee for the performance of this Agreement for the duration of the Agreement provided that the assigning Party will give notice to the other Parties in a timely manner, and provided that the assignee agrees in writing to be bound by the provisions of this Agreement. + +30.3 Except in accordance with Subparagraph 30.2, no Party may assign the whole of its rights under this Agreement without the written consent of all the other Parties, such consent shall not be unreasonably withheld. + +- -------------------------------------------------------------------------------- September 2, 1998 Page 3l + +30.4 If a governmental or other regulatory approval is required lawfully to effect the proposed assignment, the assigning Party shall be responsible, at its own expense, for preparing and pursuing the application for such approval. Such approval shall be obtained in advance of the assignment unless the relevant governmental or regulatory authority has formally indicated in writing that the transfer may proceed in advance of the receipt of the formal approval. + +30.5 In each such case of assignment written notice shall be given to the other Parties in a timely manner by the Party making said assignment. + +31 WAIVER + + Silence, lateness to invoke or the waiver by any Party of a breach of, or a default under, any of the provisions of this Agreement, or the failure of any Party, on one or more occasions, to enforce any of the provisions of this Agreement or to exercise any right or privilege hereunder, shall not thereafter be construed as a waiver of any subsequent breach or default of a similar nature, or as a waiver of any such provision, right, or privilege hereunder. + +32 COMMUNICATIONS + + Any notice under this Agreement shall be delivered by hand, first class mail with postage prepaid, facsimile or e-mail and shall be deemed to have been given: + + (i) when delivered if delivered by hand, facsimile or e-mail (with receipt acknowledged); or; (ii) at the expiration of ten (10) days (or thirty (30) days, if a notice of termination of this Agreement) from the date of dispatch if delivered by mail. + +33 PARAGRAPH HEADINGS, REFERENCES + + Headings are inserted for convenience only and shall not affect the interpretation of this Agreement, References to recitals, clauses, and attachments are to recitals and clauses of and Schedules to this + + + + + + Agreement. Unless the context otherwise requires, words importing the singular number shall include the plural and vice versa. Unless the context otherwise requires, references to a person include an individual, firm, body, corporation, unincorporated association, and government or governmental, semi-governmental or local authority or agency. Reference to the male shall include the female. + +- -------------------------------------------------------------------------------- September 2, 1998 Page 32 + +34 SEVERABILITY + + If any of the provisions of this Agreement shall be invalid or unenforceable, such invalidity or unenforceability shall not invalidate or render unenforceable the entire Agreement, but rather the entire Agreement shall be construed as if not containing the particular invalid or unenforceable provision or provisions, and the rights and obligations of the Parties shall be construed and enforced accordingly. + +35 EXECUTION OF AGREEMENT AND AMENDMENTS + +35.1 Except for revisions to the relevant Schedules, in accordance with Paragraphs 9, 11 and 21 of this Agreement, the provisions of this Agreement may be amended or supplemented only by unanimous consent of all the Parties to this Agreement through an Amendatory Agreement. Such an Amendatory Agreement shall be signed by a duly authorized representative of each and every Party or by certain Parties on behalf of all the Parties, as decided by the General Committee. + +35.2 This Agreement and any Amendatory Agreement thereof shall be executed in three counterparts in English. The NA, one Eastern Terminal Party and one Western Terminal Party shall receive originals. The NA shall be the official custodian of the Agreement and shall accord access to such Agreement and any Amendatory Agreement. The Parties to this Agreement shall be provided a certified photocopy of any counterpart and any revised Schedules. + +35.3 For revision to the relevant Schedules, in accordance with Paragraphs 9, 11 and 21 of this Agreement, the agreement in writing of the Parties having their ownership percentages increased or their capacity assignment changed will be required to formalize the revised Schedules, which will be considered as part of this Agreement, in substitution for the preceding version of those Schedules. + +36 INTERPRETATION OF THE AGREEMENT AND SETTLEMENT OF DISPUTES + +36.1 The construction, interpretation and performance of this Agreement shall be governed by the laws of Switzerland, except for its conflicts of law principles. + +36.2 Any dispute relating to this Agreement or its subject matter, including disputes as to validity, performance, breach, or termination, which cannot be settled by mutual agreement between the Parties, shall be submitted to binding arbitration under the Rules of Conciliation and Arbitration of the International Chamber of Commerce as in force on the date of the commencement of the arbitration and as modified by this arbitration clause. The appointing and administering body shall be the International Chamber of Commerce. There shall be only one arbitrator. The arbitration shall take place in Geneva, Switzerland, and the proceedings shall be conducted in the English language. The award shall be final and binding and the Parties hereby waive all means of recourse to the courts of + +- -------------------------------------------------------------------------------- September 2, 1998 Page 33 + + + + Switzerland or any other Country. Jucgment on the award may be entered in any court of competent Jurisdiction. + +37 SUCCESSORS BOUND + + This Agreement shall be binding on the Parties, their successors and permitted assigns. + + + + + +38 ENTIRE AGREEMENT + +38.1 This Agreement represents the entire understanding and agreement between the Parties in relation to the matters dealt with herein, and supersedes all previous representations, understandings and agreements, whether oral or written, relating thereto. + +38.2 It includes the following documents which are attached hereto and incorporated herein by reference + + SCHEDULES + +SCHEDULE A PARTIES TO THE AGREEMENT + +SCHEDULE B VOTING INTERESTS, OWNERSHIP INTERESTS IN SEGMENTS AND ALLOCATION OF CAPITAL, OPERATING AND MAINTENANCE COSTS IN SEGMENTS S AND T. + +SCHEDULE C SUMMARY OF ALLOCATED CAPACITY + +SCHEDULE C-1 SUMMARY OF ALLOCATED CAPACITY AS ASSIGNED AT THE TIME OF C&MA SIGNING + + ANNEXES + +ANNEX 1 TERMS OF REFERENCE FOR MANAGING GROUP + +ANNEX 2 TERMS OF REFERENCE FOR THE PROCUREMENT GROUP + +ANNEX 3 TERMS OF REFERENCE FOR THE AR&R SUBCOMMITTEE + +ANNEX 4 TERMS OF REFERENCE FOR THE F&A SUBCOMMITTEE + +- -------------------------------------------------------------------------------- September 2, 1998 Paqe 34 + +ANNEX 5 TERMS OF REFERENCE FOR THE CENTRAL BILLING PARTY + +ANNEX 6 TERMS OF REFERENCE FOR THE NETWORK ADMINISTRATOR + +ANNEX 7 SOURCE OF FINANCIAL CHARGE RATES + +ANNEX 8 INITIAL OWNERSHIP PRICING MATRIX + +ANNEX 9 CAPACITY STRUCTURE + +ANNEX 10 ORGANIZATION STRUCTURE + +ANNEX 11 CONFIGURATION DIAGRAM + +39 TESTIMONIUM + +IN WITNESS WHEREOF the Parties have severally subscribed these presents or caused them to be subscribed in their names and on their behalf by their respective officers thereunto duly authorized. + + For and on behalf of ABS Telecom plc + + --------------------------- + + For and on behalf of AT&T Corp. + + --------------------------- + + For and on behalf of + + + + + + BARAK I.T.C + + --------------------------- + +- -------------------------------------------------------------------------------- September 2, 1998 Page 35 + + For and on behalf of BC TEL + + --------------------------- + + For and on behalf of Belgacom S.A. + + --------------------------- + + For and on behalf of BellSouth International, Inc. + + --------------------------- + + For and on behalf of British Telecommunications pIc + + --------------------------- + + For and on behalf of Cable & Wireless Global Network Organisation Limited + + --------------------------- + +- -------------------------------------------------------------------------------- September 2, 1998 Paqe 36 + + For and on behalf of Cable & Wireless, Inc. + + --------------------------- + + For and on behalf of Carrier 1 AG + + --------------------------- + + For and on behalf of COMPANHIA PORTUGUESA RADIO MARCONI, SA. + + --------------------------- + + + + + + For and on behalf of Com Tech International Corporation + + --------------------------- + + For and on behalf of CYPRUS TELECOMMUNICATIONS AUTHORITY + + --------------------------- + +- -------------------------------------------------------------------------------- September 2, 1998 Page 37 + + For and on behalf of Deutsche Telekom AG + + --------------------------- + + For and on behalf of Energis Communications Limited + + --------------------------- + + For and on behalf of Emirates Telecommunications Corporation - ETISALAT + + --------------------------- + + For and on behalf of France Telecom + + --------------------------- + + For and on behalf of GTE Intelligent Network Services Incorporated + + --------------------------- + +- -------------------------------------------------------------------------------- September 2, 1998 Page38 + + For and on behalf of Hellenic Telecommunications Organisation S.A. + + --------------------------- + + For and on behalf of IXC Communications, Inc. For and on behalf of + + --------------------------- + + + + + + IXNET Limited + + --------------------------- + + For and on behalf of Japan Telecom Co., Ltd. + + --------------------------- + + For and on behalf of Kokusai Denshin Denwa Americas Inc. + + --------------------------- + +- -------------------------------------------------------------------------------- September 2, 1998 Page 39 + + For and on behalf of KPN Telecom B.V + + --------------------------- + + For and on behalf of MCI International Inc. + + --------------------------- + + For and on behalf of NTT Worldwide Network Corporation + + --------------------------- + + For and on behalf of OY FINNET International AB + + --------------------------- + + For and on behalf of Pacific Gateway Exchange + + --------------------------- + +- -------------------------------------------------------------------------------- September 2, 1998 Page 40 + + For and on behalf of Pacific Gateway Exchange Inc. + + --------------------------- + + + + + +- -------------------------------------------------------------------------------- September 2, 1998 Page 40a + + For and on behalf of Rostelecom + + --------------------------- + + For and on behalf of RSL Communications Limited + + --------------------------- + + For and on behalf of Singapore Telecommunications Limited + + --------------------------- + + For and on behalf of Slovenske Telecomunicatie s.e. + + --------------------------- + + For and on behalf of Sonera Ltd. + + --------------------------- + +- -------------------------------------------------------------------------------- September 2, 1998 Page 41 + + For and on behalf of Sprint Communications Company L.P. + + --------------------------- + + For and on behalf of STAR Telecommunications Inc. + + --------------------------- + + For and on behalf of StarHub + + --------------------------- + + + + + + For and on behalf of STARTEC GLOBAL COMMUNICATIONS CORPORATION + + --------------------------- + + For and on behalf of Swisscom Ltd + + --------------------------- + +- -------------------------------------------------------------------------------- September 2, 1998 Page 42 + + For and on behalf of Swisscom North America Inc. + + --------------------------- + + For and on behalf of Tele 2 AB + + --------------------------- + + For and on behalf of TeleBermuda International Limited + + --------------------------- + + For and on behalf of Tele Danmark A/S + + --------------------------- + + For and on behalf of Telef6nica de Espana, S.A. + + --------------------------- + +- -------------------------------------------------------------------------------- September 2, 1998 Page 43 + + For and on behalf of Teleglobe USA + + --------------------------- + + For and on behalf of Telenor Global Services AS + + --------------------------- + + + + + + For and on behalf of Telesur + + --------------------------- + + For and on behalf of TELIA AB (publ) + + --------------------------- + + For and on behalf of Telia North America Inc. + + --------------------------- + +- -------------------------------------------------------------------------------- September 2, 1998 Page 44 + + For and on behalf of Transoceanic Communications Incorporated + + --------------------------- + + For and on behalf of Turk Telekomunikasyon A.S. + + --------------------------- + + For and on behalf of Ultrallne (Bermuda) Limited + + --------------------------- + + For and on behalf of VIATEL + + --------------------------- + + For and on behalf of Videsh Sanchar Nigam Limited + + --------------------------- + +- -------------------------------------------------------------------------------- September 2, 1998 Page 45 \ No newline at end of file diff --git a/full_contract_txt/STWRESOURCESHOLDINGCORP_08_06_2014-EX-10.1-COOPERATION AGREEMENT.txt b/full_contract_txt/STWRESOURCESHOLDINGCORP_08_06_2014-EX-10.1-COOPERATION AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..7faab0c8e6745f3757a109b8421492c66c98bfff --- /dev/null +++ b/full_contract_txt/STWRESOURCESHOLDINGCORP_08_06_2014-EX-10.1-COOPERATION AGREEMENT.txt @@ -0,0 +1,115 @@ +Exhibit 10.1 COOPERATION AGREEMENT BETWEEN THE CITY OF FORT STOCKTON, TEXAS AND STW RESOURCES HOLDING CORP. REGARDING DEVELOPMENT OF WATER WELL(S) IN THE CAPITAN REEF AQUIFER FORMATION + +This AGREEMENT regarding development of water well(s) in the Capitan Reef Aquifer Formation (the "AGREEMENT") is entered into by the City of Fort Stockton, Texas, a Texas Type A-General Law city ("COFS") and STW Resources Holding Corp., a Nevada corporation ("STW"), effective as of the last date of signature on the signature pages below. STW and COFS are sometimes individually referred to as a "Party" and collectively referred to as the "Parties." + +WHEREAS, the City of Fort Stockton, Texas ("COFS") owns the surface and groundwater rights to several areas of the Capitan Reef Aquifer Formation; and + +WHEREAS, COFS has an existing Capitan Reef Aquifer ("CRA") water well located at Section 112 on COFS property, which is currently drilled to an approximate depth of 3,500 feet (the "Existing CRA Well"), and also owns property at Section 71; and + +WHEREAS, STW desires to attempt to deepen the Existing CRA Well in order to make it a producing water well and/or drill an alternate well(s) at its own expense, and to lease CRA groundwater rights from Sections 112 and 71 of COFS property; and WHEREAS, STW and COFS desire to work together for the development of a CRA water supply project within the area that will serve to meet the future needs of COFS and the municipal and industrial needs within the region. + +THE PARTIES HEREBY AGREE AS FOLLOWS: + +1. Leasing of Property and Drilling of Water Well(s). COFS hereby grants, leases and lets unto STW the right to explore for, drill for, produce, utilize, transport, and treat groundwater from the CRA only from beneath the surface of the property more specifically described in Exhibit "A," which is attached hereto and fully incorporated into this AGREEMENT (hereinafter collectively referred to as the "Property"). STW is further authorized to drill, deepen, and/or rework at its expense the Existing CRA Well on Section 112 of the Property from its current depth of approximately 3,500 feet to approximately 4,000 feet, so as to determine the following to be verified by a study to be performed by a hydrogeologist mutually agreed upon by both Parties ("Post-Well Study"): (a) the gallons per day ("GPD") of maximum water capacity of the Existing CRA Well or alternate well, as may be required under Section 5 of the AGREEMENT; and (b) the quality of the water to be obtained from the Existing CRA Well or alternate well. The rights granted to STW under this AGREEMENT also include the right of access to the Property to perform the activities authorized herein. 2. Acces s and Surface Use. STW agrees to coordinate reasonably with COFS with respect to location of any new wells, roadways, power infrastructure, and other improvements that are to be constructed or used on the Property. COFS shall provide STW rent free site leases for the commercially reasonable amounts of surface area required for CRA pumping and filling stations located on the Property. STW shall pay for or repair all actual damages to roads, fences, or improvements caused by its activities on the Property within sixty (60) days of the occurrence, and will fill and level all pits, mounds, ruts, and shall restore the surface to as near its original condition as is reasonably practicable within ninety (90) days after termination of the provisions of this AGREEMENT related only to the Property. Upon termination of the provisions of this AGREEMENT related to the Property only, STW, or its successors or assigns, shall transfer title of all water conveyance pipelines from the Property to COFS. STW shall administer and provide all necessary and reasonable insurance to insure its activities on the Property in relation to the AGREEMENT and shall list COFS as additional insured. + + -1- + + + + + + 3. Term. Subject to the other provisions contained herein, this AGREEMENT shall be for a term of thirty (30) years from the Effective Date, which shall automatically renew from year-to-year thereafter unless terminated by a Party upon sixty (60) days' written notice after the end of the term. Notwithstanding the 30-year term of this agreement, should STW procure sales agreements with customers for a duration of longer than 30 years, STW shall be authorized to maintain and service such contract(s) to the extent of the water volume(s) purchased, and this AGREEMENT shall not terminate during the initial term of any such water supply agreement with a term extending beyond this AGREEMENT. 4. Post-Well Study Generally. The Post-Well Study shall provide information on the feasibility of developing a water well field in that location that would produce water from the CRA for: (a) the availability of a minimum 1,200 gallons per minute ("GPM") per day CRA water production for STW, its successors or assignees, to sell to communities and users within a 500-mile radius outside of COFS (the "Permitted Sale Water") during the Term, with the further requirement that STW would be responsible for the pipelines and pumping facilities required to transport the Permitted Sale Water to the intended end-users; and that all such water obtained from the Existing CRA Well contains acceptable levels of Total Dissolved Solids ("TDS") to meet municipal use standards. If such water does not meet municipal use standards according to the Post-Well Study, STW may either treat the water to municipal use standards or to sell it as-is to industrial end-users. 5. Replacement CRA Well. If, based on the Post-Well Study of the Existing CRA Well, it is determined that the Existing CRA Well is not suitable for the purposes of this AGREEMENT, then STW may elect to drill at its expense a second water well (the "Replacement CRA Well") at a place to be mutually agreed on the Property, with the Existing CRA Well to remain as a monitoring well. After completion of the Replacement CRA Well, a second Post-Well Study will be conducted for the same purposes as that for the Existing CRA Well. 6. Construction Requirements. STW's construction of the improvements to the Existing CRA Well, any Replacement CRA Well, and any additional production wells shall be pursuant to any recommendation and requirements as may be specified by and agreed upon with COFS, and the construction shall also be conducted in a manner meeting prevailing industry standards, the Middle Pecos Groundwater Conservation District regulations, Texas Department of Licensing and Regulation (TDLR) regulations, and the Texas Commission on Environmental Quality (TCEQ) regulations. 7. Cooperation Regarding Studies. COFS shall provide to STW any and all documents pertaining to this project, including all hydrogeological studies and any existing Pre-Well Studies for the Existing CRA Well, as well as any similar documents for the Replacement CRA Well to include: a. the best location for the Replacement CRA Well on the Property, considering the spacing with any other wells that might now or in the future be located on the Property; b. the location on the Property that will best provide data for determining the feasibility of pumping water from the CRA on the Property and be the most productive; c. documents showing current ownership of the Property including both CRA and surface ownership rights, to demonstrate COFS' ability to lease the land for the Sale of CRA Water Rights to STW, including any documents showing the prior sale or conveyance of any CRA or water rights from the Property; and d. names and addresses of engineers and/or hydrogeologists recommended to perform the Post-Well Study (ies). The Post-Well Study (ies) shall be performed by a hydrogeologist(s) mutually agreed to by both Parties. + + -2- + + + + + + 8. Post-Well Study Requirements. Any Post-Well Studies shall be paid for by STW and shall include: a. a chemical analysis and performance by a qualified certified laboratory mutually approved by the Parties to determine the quality of the water and its characteristics at that location; b. any documents related to the drawdown or recharge rate affecting the producing capacity; and c. TDS measurements of CRA water produced by STW. 9. COFS Responsibilities. COFS shall perform the following services: a. administer and provide all necessary insurance to insure its activities in relation to the AGREEMENT; and b. possess or obtain any and all necessary property rights for the activities covered in this AGREEMENT, including both CRA and surface rights to the Property. 10. Construction and Post-Well Study Costs. STW will pay all reasonable and necessary costs to: (a) construct the improvements to the Existing CRA Well or the Replacement CRA Well (including the cost of securing any necessary regulatory approval for the improvements to the Existing CRA Well and the Replacement CRA Well); (b) obtain the Post-Well Study (ies); and (c) reasonable consulting costs related to the negotiation and execution of the AGREEMENT. 11. STW Termination Rights. STW shall have the right to unilaterally terminate the provisions of this AGREEMENT related only to the Property, and not proceed further after the completion of any phase of the project and not incur any additional costs. So long as STW is progressing through the following phases, and subject to the other terms of this AGREEMENT, COFS may not terminate the AGREEMENT during the: a. Pre-well study (ies), b. completion of improvements to the Existing CRA Well, c. completion of the Replacement CRA Well, if necessary, and d. Post-Well Study (ies). Should COFS unilaterally terminate the provisions of this AGREEMENT related to COFS Property only, with the right to do so beginning on a period beginning no sooner than ninety (90) days following the Post-Well Study (ies), and ending at the one year period following the Post-Well Study (ies), during which STW may exercise its Option to Produce Water, in accordance with Section 15 of this AGREEMENT, COFS shall reimburse STW for 100% of the costs paid by STW up to the point of such termination, pursuant to the AGREEMENT, according to a reasonable accounting schedule of costs prepared by STW and submitted to COFS. Once STW exercises its Option to Produce Water pursuant to Section 15 of this AGREEMENT, and pays COFS its Bonus Payment, in accordance with Section 14(b) of this AGREEMENT, COFS may no longer unilaterally terminate this AGREEMENT during the Term. If STW terminates the AGREEMENT and COFS sells water within twenty (20) years from the Effective Date of this AGREEMENT from one or more producing water well(s) developed by STW, STW shall be reimbursed the amount expended for drilling the producing well(s), to be paid from the sale of water produced by COFS from the producing well(s). Such reimbursement shall occur based on COFS' net revenues received from CRA water sales from the producing well(s) in six (6) month increments, which shall begin on the date COFS begins selling CRA water from producing water well(s), and shall end upon reimbursement in full of the amount STW is owed for drilling any producing well(s). + + -3- + + + + + + 12. Title of Producing Wells. Title and ownership of the Existing CRA Well, the Replacement CRA Well and any additional wells drilled on the Property by STW (the "Additional Wells") shall be transferred to STW by COFS and shall be held by STW; however, upon termination of the provisions of this AGREEMENT that relate to COFS Property, STW shall transfer the title(s) back to COFS upon COFS' reimbursement of STW as necessary under this AGREEMENT. 13. Uses, Maintenance, Construction and Operation of Wells. STW will construct, maintain, operate, own, and repair (as needed) the Existing CRA Well, the Replacement CRA Well and any Additional Wells, and in doing so, and in the wells' operation and repair, STW shall: a. conduct all work and operations in a businesslike manner consistent with good and economical practices and with due regard for good land management, damage prevention and environmental protection; b. comply with all federal, state, and local laws, regulations and requirements governing the development, production, collection, transportation, and disposal of the water (and any waste or reject water); c. allow COFS or its authorized representatives to enter upon the premises at reasonable times to be arranged in advance of entry; and d. plug all wells, when abandoned, in accordance with the applicable regulatory requirements of the Middle Pecos Groundwater Conservation District, TDLR, and/or TCEQ. 14. Obligations Following the Post-Well Study. a. For purposes of this section, the Post-Well Study must show that the Existing CRA Well or Replacement CRA Well can produce CRA water at a minimum of 1,200 GPM or more or a combination of 1,200 GPM from one or more wells on the Property in order for STW to proceed with the obligations set forth in this section ("Critical Criterion"). b. Obligations if Post-Well Study shows that the Critical Criterion has been met: If all necessary regulatory approvals are obtained that allow the production and transport of up to 10 million GPD or the maximum capacity of the well, for STW's use or resale, in conjunction with STW exercising its Option to Produce Water under Section 15 of this AGREEMENT, STW will pay COFS an upfront Bonus Payment of Five Million and 00/100 Dollars ($5,000,000.00), and STW shall have the immediate right to develop Additional Wells on the Property, subject to all necessary regulatory approvals, in the event STW procures additional water supply contracts that require additional volume of production, the feasibility of which shall be by a Post Well hydrogeological study and report that shows the ability of STW to produce the additional amounts of CRA water. STW shall have the right to the sale of and transport of such additional water produced from Additional Wells. STW shall pay COFS a seventeen percent (17%) royalty of the price STW receives per 1,000 gallons of CRA water produced from the Property and sold. STW shall also provide to COFS three (3) million GPD of CRA water at no cost to COFS at such time that COFS requests delivery of the water for COFS use. Each payment made by STW to COFS will include an accounting statement providing the number of gallons sold, the price paid by any customer(s), the gross revenues received by STW, and the expenses paid by STW for the sale, treatment, use, and/or delivery of the CRA water. STW shall calculate the amount owed to COFS every one hundred-eighty (180) days ("Accrual Period"), and shall provide required payments to COFS within thirty (30) days after the end of the previous Accrual Period. + + -4- + + + + + + c. Options if Post-Well Study shows that the Critical Criterion has not been met: (1) STW may choose to not pursue the production and transport of the water from the Property. If one or more producing wells are developed by STW and COFS sells the CRA water produced from the well(s), COFS will reimburse STW from the net revenues COFS receives up to the point STW has been fully reimbursed for drilling any producing well(s) if such sale occurs within twenty (20) years from the date of this AGREEMENT. (2) STW may choose to pursue the production and transport of the water. STW shall have the right to produce and transport the water upon obtaining all necessary regulatory approvals, and will not seek reimbursement of any of its costs incurred pursuant to the AGREEMENT. (3) If regulatory approvals have been granted, but the permit obtained from the Middle Pecos Groundwater Conservation District allows the transport of less than the full amount requested for STW's use or sale, then STW may: i. elect to produce and transport the water; or ii. elect to not produce and transport the water, in which case the conditions of Subsection (c)(1) of this section shall apply. 15. Option to Produce Water. a. STW will have one year from completion of the last of the Post-Well Study (ies) completed on the Existing CRA Well or Replacement CRA Well to exercise its option to produce and transport the water produced from the CRA on the Property ("Option to Produce"). The AGREEMENT shall thereafter terminate as to both Parties if STW has not exercised its Option to Produce at the expiration of the one-year period unless STW pays as royalty on the first day of each month the sum of Five Hundred and 00/100 Dollars ($500.00) per month. STW shall have no right to maintain this AGREEMENT through payment of such a royalty for any one period greater than three consecutive years. b. If, after STW has exercised its option to produce CRA water from the Property, one or more producing wells on the Property are capable of producing CRA water for sale, but CRA water is not being sold for a consecutive period of 180 days or more, then the lease shall terminate as to both parties unless STW pays as royalty on the first day of each month after such period of 180 days, the sum of Five Thousand and 00/100 Dollars ($5,000) per month. STW shall have no right to maintain this AGREEMENT through payment of such a royalty for any one period greater than three (3) consecutive years. c. If STW exercises its option to produce and transport the CRA water, STW will construct additional facilities or expand existing facilities, as necessary, to be able to produce and transport the CRA water for sale. -5- + + + + + + 16. Payment for Use of COFS Pipeline Easements and COFS Assistance with Project. a. STW shall be entitled to use existing COFS easements and right of ways within Pecos County for laying of pipelines necessary for the delivery of CRA water produced within Pecos County. COFS will assist STW with any negotiations required to procure any additional easements and groundwater rights in Pecos County that are necessary for the production and delivery of CRA water. STW shall also be entitled to use and upgrade existing COFS water treatment infrastructure as necessary for the treatment of raw CRA water. STW shall pay COFS a seven percent (7%) royalty of the price STW receives per 1,000 gallons of CRA water produced from other properties within Pecos County and sold as consideration for the rights provided by COFS to STW under this subsection. Such payment shall be made according to the schedule and terms set forth in Section 14(b) of this AGREEMENT. The requirements under this Section 16 shall remain in force and effect despite any termination of those provisions of this AGREEMENT that apply only to COFS Property. The provisions of this section shall terminate in the event STW is not producing CRA water from other properties in Pecos County for sale due to termination of all such agreements or failure of STW to enter into such agreements regarding other properties in Pecos County within ten (10) years from the Effective Date of this AGREEMENT. b. COFS shall manage well maintenance and production operations for all CRA water produced within Pecos County under the direction of STW. STW shall pay COFS for its reasonable costs incurred to manage such well maintenance and production operations. c. STW shall conduct all necessary storage, holding, and treatment of CRA water produced from the Property and from other properties within Pecos County, as set forth in Subsection (a) of this section, within the boundaries of Pecos County. 17. Authorized Third Party Beneficiary. STW shall be listed as a third party beneficiary to any contracts to guarantee payment of any of the obligations of this contract between COFS and Pecos County or any other entity or individual. 18. Venue. This AGREEMENT is controlled by the laws of the State of Texas, and venue for any actions brought to enforce this AGREEMENT shall be brought exclusively in a court of competent jurisdiction in Pecos County, Texas. 19. Authority. The Parties executing this AGREEMENT represent that they have full and actual authority to sign and to be bound by this AGREEMENT. 20. Taxes and Fees. STW shall pay all taxes, fees, assessments, and costs associated with the rights, pumping, and use of the CRA water from the Property and other properties in Pecos County. COFS shall bear and pay any ad valorem taxes assessed directly against COFS' royalty, any federal or state income taxes payable on the royalty and on the other compensation payable to COFS under this AGREEMENT, and taxes assessed on COFS' ownership of the surface of the Property and other minerals not conveyed under this AGREEMENT. 21. Governmental Authority. STW shall be responsible for obtaining any approval required from any applicable governmental authority with jurisdiction over the activities under this AGREEMENT. COFS shall assist STW with any documentation needed to obtain the necessary approvals required. + + -6- + + + + + + 22. Force Majeure. If a Party is rendered unable, wholly or in part, to carry out any of its obligations under the Agreement, other than an obligation to pay money, as a result of Force Majeure, then its obligations shall be suspended, to the extent affected by such Force Majeure, during the continuance of any inability so caused, provided that notice of the Force Majeure is provided to the other Party as soon as reasonably practicable. The Party claiming the Force Majeure shall use due diligence to resume performance at the earliest practicable time, and such suspension shall not extend for a period longer than twenty-four (24) months from the date notice of the Force Majeure is provided without payment as set forth under Section 15(a) of this AGREEMENT by STW, or the option to terminate this AGREEMENT by STW if COFS is the party asserting the Force Majeure. 23. Notice of Breach. In the event of default by any Party, a non-defaulting party may give the defaulting party written notice specifying the default. If the defaulting party fails to fully cure any monetary default that can be cured by payment within sixty (60) days after receipt of the notice, or fails to commence the curing of any default specified in such notice that is other than a monetary default within sixty (60) days from the date of the notice provided, then the non-defaulting party may pursue all legal or equitable remedies against the defaulting party. 24. Notices. Service of all notices under this AGREEMENT shall be sufficient when hand- delivered or sent by certified mail to the respective address set forth below, unless notice is provided by a Party under this section to the other Party indicating a change to the address listed herein. Any such notice mailed to such address shall be effective when hand- delivered, deposited in the United States mail, certified, duly addressed, and with postage prepaid or national overnight courier. STW: STW Resources Attn: Stanley Weiner 3424 South County Road 1192 Midland, Texas 70706 COFS: City of Fort Stockton Attn: City Manager 121 W. 2nd Street Fort Stockton, Texas 79735 25. Indemnification. The Parties shall indemnify, hold harmless, and defend each other, their heirs, successors, and assigns, from and against any and all losses, liabilities, damages, costs, attorney's fees, expenses, causes of action, suits, claims, and judgments of any kind or character for injury to person or property arising in whole or in part out of the responsibilities set forth in this AGREEMENT, whether due to the negligence of a Party or otherwise. 26. Waiver. The failure on the part of either Party to require performance by the other of any portion of this AGREEMENT shall not be deemed a waiver of, or in any way affect that Party's rights to enforce such provision. Any waiver by either Party or any provision of this AGREEMENT shall not be a waiver of any other provision hereof. 27. Severability. The invalidity or unenforceability of any provision of this AGREEMENT shall not affect the validity or enforceability of any other provision of this AGREEMENT. The provisions of Section 16 are severable from the provisions of the AGREEMENT related to the Property, and shall remain in full force in effect upon termination of the provisions related only to the Property. 28. Binding Effect. The AGREEMENT shall be binding upon and inure to the benefit of the parties and their respective successors and assigns. + + -7- + + + + + + 29. No Partnership, Agency, or Third Party Beneficiaries Intended. Nothing in this AGREEMENT will be construed as creating any form of partnership or joint venture relationship between the Parties, nor shall any party be authorized to act as an agent for any other party. Nothing in this AGREEMENT shall be construed to confer any right, privilege or benefit on, or to otherwise create any vested right or third-party beneficiary relationship with any person or entity not a party to the AGREEMENT, unless otherwise provided in this AGREEMENT. 30. Authority. Each of the persons signing on behalf of the Parties hereby confirm that they have the authority to execute this AGREEMENT on behalf of the Party indicated by their signature and have the authority to bind such Party hereto. 31. Further Assurances. STW and COFS shall take all further actions and shall execute and deliver to the other any other document or instrument which is necessary to fully carry out the transactions evidenced by this AGREEMENT. STW and COFS shall cooperate with each other and act in good faith to accomplish the purposes of this AGREEMENT. 32. Compliance with Laws. The Parties agree that each Party will comply with all applicable federal, state, and local laws and any applicable ordinances, rules, orders, and regulations of any of the authorities having jurisdiction in carrying out its duties and obligations hereunder. However, nothing contained in this AGREEMENT shall be construed as a waiver of any right to question or contest any law, ordinance, order, rule, or regulation in any forum having jurisdiction. 33. Entire Agreement. This AGREEMENT contains the entire agreement between the Parties and any agreement not contained herein shall not be recognized by the parties. The captions used herein are for convenience only and shall not be used to construe this AGREEMENT. 34. Counterparts. This AGREEMENT may be executed by the parties in any number of counterparts, each of which when so executed and delivered shall be deemed an original instrument, but all such counterparts together shall constitute but one and the same instrument. + + (Signature Pages Follow) + + -8- + + + + + + CITY OF FORT STOCKTON: + + CITY OF FORT STOCKTON + +By: _ (Printed Name) Title: Date: + + + + STATE OF TEXAS § COUNTY OF PECOS § + +This instrument was acknowledged before me on the day of , 2014, by Raul B. Rodriguez, City Manager of the City of Fort Stockton. + + + + Notary Public, State of Texas My Commission Expires + + -9- + + + + + + STW RESOURCES HOLDING CORP.: + + STW Resources Holding Corp. + + By: _ Stanley T. Weiner + +Title: CEO Date: + + + + STATE OF TEXAS § COUNTY OF § + + This instrument was acknowledged before me on the day of , 2014, by Stanley T. Weiner, CEO of STW Resources Holding Corp. + + + + Notary Public, State of Texas My Commission Expires \ No newline at end of file diff --git a/full_contract_txt/SUCAMPOPHARMACEUTICALS,INC_11_04_2015-EX-10.2-STRATEGIC ALLIANCE AGREEMENT.txt b/full_contract_txt/SUCAMPOPHARMACEUTICALS,INC_11_04_2015-EX-10.2-STRATEGIC ALLIANCE AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..01f5bf63cd4a1ee0f3e4336ee6b1003146d92ab7 --- /dev/null +++ b/full_contract_txt/SUCAMPOPHARMACEUTICALS,INC_11_04_2015-EX-10.2-STRATEGIC ALLIANCE AGREEMENT.txt @@ -0,0 +1,253 @@ +Exhibit 10.2 STRATEGIC ALLIANCE AGREEMENT dated as of August 26, 2015 among Sucampo Pharmaceuticals, Inc., Sucampo Pharma, LLC. and R-Tech Ueno, Ltd. + + + + + +TABLE OF CONTENTS + +ARTICLE I DEFINITIONS AND INTERPRETATION + +Section 1.01 Definitions 2 Section 1.02 Interpretation 8 + +ARTICLE II TRANSACTION + +Section 2.01 Strategic Alliance 8 Section 2.02 Obligations of Acquiror 9 Section 2.03 Obligations of the Company 11 + +ARTICLE III REPRESENTATIONS AND WARRANTIES + +Section 3.01 Representations and Warranties of the Company 11 Section 3.02 Representations and Warranties of Acquiror 12 + +ARTICLE IV COVENANTS OF THE PARTIES + +Section 4.01 The Company's Obligation 12 Section 4.02 Consummation of the Squeeze-out 15 Section 4.03 Applications and Consents; Governmental Communications and Filings 15 Section 4.04 Further Assurance 15 Section 4.05 Access 15 Section 4.06 Notifications 16 Section 4.07 Confidentiality 16 Section 4.08 Public Announcement 17 Section 4.09 No Lender Liability 17 Section 4.10 Employees of Company 17 Section 4.11 Development Programs and Clinical Trials 18 + +ARTICLE V INDEMNIFICATION + +Section 5.01 Indemnification by the Company 18 Section 5.02 Indemnification by Acquiror 18 Section 5.03 Indemnification Procedure 18 Section 5.04 Limitations 18 + +i + + + + + +ARTICLE VI TERMINATION + +Section 6.01 Termination 19 Section 6.02 Notice of Termination 19 Section 6.03 Effect of Termination 19 + +ARTICLE VII GUARANTEE + +Section 7.01 Guarantee 19 + +ARTICLE VIII MISCELLANEOUS + +Section 8.01 Governing Law 19 Section 8.02 Jurisdiction 19 Section 8.03 Cost and Expenses 20 Section 8.04 Assignment 20 Section 8.05 Amendments and Waivers 20 Section 8.06 Severability 20 Section 8.07 Counterparts 21 Section 8.08 Entire Agreement 21 Section 8.09 Notices 21 Section 8.10 Language 22 Section 8.11 Disclosure Schedules 22 Section 8.12 Fraud 22 Section 8.13 Third-party Beneficiaries 23 + +ii + + + + + +STRATEGIC ALLIANCE AGREEMENT This STRATEGIC ALLIANCE AGREEMENT is made and entered into as of August 26, 2015 (this "Agreement"), by and among R-Tech Ueno, Ltd., a corporation organized under Japanese law (the "Company"), Sucampo Pharma, LLC., a corporation organized under Japanese law ("Acquiror"), and Sucampo Pharmaceuticals, Inc., a corporation organized under Delaware law ("SPI," and, together with the Company and Acquiror, collectively, the "Parties"). RECITALS WHEREAS, the Acquiror is a wholly-owned subsidiary of SPI, which operates a biopharmaceutical business focused on the research and development of proprietary drugs; WHEREAS, the Company operates a drug discovery and manufacturing business; WHEREAS, Acquiror and the Company share the objective of creating a combined biopharmaceutical company that can drive considerable growth in global markets, including Japan; WHEREAS, the Company has currently in issuance and outstanding 19,312,300 shares of common stock (the "Common Stock") and stock options representing an additional 328,600 shares of Common Stock (the "Stock Options", and together with the issued and outstanding Common Stock, the "Target Securities"); WHEREAS, pursuant to the terms and subject to the conditions set forth herein, Acquiror has agreed to commence a tender offer bid (such tender offer bid, including any amendments or extensions thereto made in accordance with the terms of this Agreement and applicable Law, including Articles 27-2 through 27-22 of the FIEL, the "Offer") to acquire for cash (i) all of the issued and outstanding shares of Common Stock at a price per share of JPY1,900 (the "Share Offer Price") and (ii) all of the outstanding Stock Options at the price prescribed in this Agreement; WHEREAS, the Company has agreed, on the terms and subject to the conditions set forth herein, to support the Offer and recommend the holders of Target Securities to tender their shares of Common Stock and Stock Options to the Offer and publicly announce such statement; WHEREAS, Jefferies Finance LLC ("Jefferies") has entered into a financing commitment letter, dated as of August 26, 2015, between SPI and Jefferies (the "Financing Commitment"), pursuant to which Jefferies has committed to provide debt financing for the Offer in the aggregate amount and on the terms and conditions set forth therein (the "Financing"); + +1 + + + + + +NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements herein contained, and intending to be legally bound hereby, the Parties hereby agree as follows: ARTICLE I + +DEFINITIONS AND INTERPRETATION Section 1.01 Definitions. As used in this Agreement, the following terms have the respective meanings set forth below: "Acquiror" shall have the meaning set forth in the preamble hereto. "Action" shall mean any claim, action, suit, arbitration, mediation, proceeding or investigation, whether civil, criminal or administrative, by or before any Governmental Authority or arbitral body. "Affiliate" shall mean, (i) with respect to a particular individual, (A) the individual's spouse and any parent, child, sibling, grandparent, grandchild, aunt, uncle, niece, nephew of the individual or the individual's spouse, (B) any Person that is directly or indirectly controlled by the particular individual or any such family member of the particular individual or his/her spouse, (C) any Person in which the particular individual or any such family member of the particular individual or his/her spouse has a material financial interest, and (D) any Person with respect to which the particular individual or such family member of the particular individual or his/her spouse serves as a director, officer or partner (or in a similar capacity); and (ii) with respect to any specified Person other than an individual, (A) any Person that directly, or indirectly through one or more intermediaries, Controls, or is Controlled by, or is under common Control with, the Person specified, (B) any Person in which the specified Person has a material financial interest, and (C) any Person which has a material financial interest in the specified Person. "Control" and its derivative words mean the possession, direct or indirect, of the power to direct or cause the direction of the decisions, management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise, including the ability to elect the majority of the directors or the members of a similar governing body of a Person. "Agreement" shall have the meaning set forth in the preamble hereto. "Annual Financial Statements" shall have the meaning set forth in Section (j) of Schedule 3.01. "Business Day" shall mean any day other than a Saturday or Sunday, or any other day on which commercial banks in Tokyo, Japan or New York in the U.S.A. are authorized or required by applicable Law to close. "Closing" shall mean the Settlement in accordance with the terms of this Agreement. + +2 + + + + + +"Closing Date" shall mean the date on which the Closing occurs. "Common Stock" shall have the meaning set forth in the recitals hereto. "Company" shall have the meaning set forth in the recitals hereto. "Company Disclosure Letter" shall mean the letter dated the same date as this Agreement from the Company to the Acquiror disclosing information constituting exceptions to the representations and warranties given by the Company pursuant to Section 3.01. "Company's Position Statement" shall have the meaning set forth in Section 2.03(b). "Contract" shall mean any contract, agreement, instrument, undertaking, indenture, commitment, loan, license or other legally binding obligation, whether written or oral. "Environmental Claim" shall mean any claim, action, cause of action, suit, investigation or proceeding by any Person alleging liability (including liability for investigatory costs, cleanup costs, governmental response costs, natural resource damages, fines or penalties) for any Losses arising from (a) presence or Release of any Hazardous Substance at any location, whether or not owned or operated by the Company or any Subsidiaries, or (b) circumstances forming the basis of noncompliance with or liability under any Environmental Laws. "Environmental Laws" shall mean any Law or Order of any Governmental Authority relating to the protection of the environment (including protection of air, water, soil, and natural resources), human health, natural resources or the use, storage, handling, release, exposure to or disposal of any Hazardous Substance, as in effect on the date hereof. "FIEL" shall mean the Financial Instruments and Exchange Law of Japan (kinyuu-shohin-torihiki-ho) (Law No. 25 of 1948, as amended). "Financing" shall have the meaning set forth in the recitals hereto. "Financing Commitment" shall have the meaning set forth in the recitals hereto. "Financing Party" shall have the meaning set forth in Section 4.09. "Financial Statements Date" shall have the meaning set forth in Section (j) of Schedule 3.01. "GAAP" shall mean Japanese generally accepted accounting principles in effect from time to time. + +3 + + + + + +"Governmental Authority" shall mean any domestic, foreign or supranational government, governmental authority, court, tribunal, agency or other regulatory, administrative or judicial agency, commission or organization (including self-regulatory organizations), tribunal or arbitral body, stock exchange, and any subdivision, branch or department of any of the foregoing. "Hazardous Substance" shall mean any substance that is regulated as hazardous, toxic, radioactive, or as a pollutant, contaminant or harmful biological agent, including petroleum and any derivative or by-products thereof, that may give rise to liability under any Environmental Laws. "Indebtedness" shall mean, for any Person, all obligations, contingent or otherwise, of that Person (i) for borrowed money, (ii) evidenced by notes, debentures or similar instruments, (iii) under capitalized lease obligations, (iv) in respect of the deferred purchase price of securities or other assets, and (v) in respect of reimbursement obligations to reimburse any other Person for or in respect of any letter of credit, bankers' acceptance, surety bonds or other financial guaranties. "Indemnified Party" shall have the meaning set forth in Section 5.03. "Indemnifying Party" shall have the meaning set forth in Section 5.03. "Intellectual Property Rights" shall mean all patents, patent rights, licenses, inventions, copyrights, trademarks, service marks, logos, trade dress, design rights, trade or business names, domain names, trade secrets, know-how, in each case of a proprietary nature and any proprietary confidential information systems processes or procedures of the intellectual property (whether, in each case, registered, unregistered or unregistrable, and including pending applications for registration and rights to apply for registration) and all rights of a similar nature or having similar effect which may subsist in any part of the world. "Japan Business Day" shall mean any day other than a Saturday or Sunday, or any other day on which commercial banks in Tokyo, Japan are authorized or required by Japanese Law to close. "Jefferies" shall have the meaning set forth in the recitals hereto. "Launch Date" shall have the meaning set forth in Section 2.02(a). "Law" shall mean, with respect to any Person, any law, statute or ordinance, or any rule, regulation, standard, judgment, order, writ, injunction, ruling, decree, arbitration award, agency requirement, license or permit of any Governmental Authority that is legally binding on such Person. "Lenders" shall mean Jefferies and a syndicate of banks, financial institutions and other lenders providing the Financing pursuant to the terms of the Financing Commitment. + +4 + + + + + +"Lien" shall mean a lien, charge, option, mortgage, pledge, security interest, claim, deed of trust, hypothecation or encumbrance of any kind. "Losses" shall mean damages, losses or liabilities (including judgments, awards, interest and penalties), together with costs and expenses reasonably incurred, including the reasonable fees and disbursements of legal counsel. "Material Adverse Effect" shall mean any fact, event, circumstance, occurrence, change or effect that individually or in the aggregate has or is reasonably likely to have a material adverse effect on the business, financial condition, assets, operations, or results or prospects of operations of the Company, taken as a whole. "Material Contract" shall mean any Contract or other agreement to which the Company is a party, and is material to the business, operations, or material properties or assets of the Company. The Material Contracts shall include, without limitation, any Contract or other agreement: (i) which is described under "Part 1. Company's Information - II. Description of the Company - 5. Material Contracts Relating to Business" in the securities report (yuka-shoken-hokokusho) of the Company filed with the Kanto Local Finance Bureau on June 24, 2015 in accordance with Article 24, Paragraph 1 of the FIEL, except for the License Agreement with Astellas Pharma Inc., which is no longer effective; (ii) under which the Company has incurred outstanding Indebtedness, guarantees or Liens, or has assumed other similar obligations; (iii) which will materially limit ability of the Company to compete in any line of business or geographic area or make use of any material Intellectual Property Rights owned by the Company; (iv) relating to the acquisition or disposition of companies or businesses by the Company (whether by purchase or sale of shares or assets, by merger, or otherwise); (v) under which the Company has made a loan or capital contribution to or any investment in any Person other than the Company; (vi) which establishes or relates to the termination, creation or operation of a joint venture, partnership, or other similar profit (or loss) sharing arrangement; (vii) which requires or restricts the payment of dividends or distributions in respect of the capital stock of the Company; (viii) which was entered into outside the ordinary course of business and which involves obligations or liabilities in excess of [… ***…]; + +5 + + + + + +(ix) which requires the Company or any successor or acquiror of the Company to make any payment to another Person as a result of a change of control of the Company; (x) with any Affiliate, director, executive officer, any holder of 5% or more of the outstanding shares of Common Stock or immediate family members (other than Contracts for stock options); or which, either as a single Contract or series of related or affiliated Contracts or work orders, constituted one of the 20 largest Contracts of the Company on the basis of revenues generated in the most recent fiscal year. "Offer" shall have the meaning set forth in the recitals hereto. "Offer Documents" shall have the meaning set forth in Section 2.02(d). "Offer Period" shall have the meaning set forth in Section 2.02(a). "Order" shall mean any order, injunction, judgment, decree, ruling, assessment, judicial or administrative order, award or determination of any Governmental Authority or arbitrator. "Organizational Documents" shall mean the articles of incorporation, the rules of the board of directors, the share handling regulations, the partnership agreement, the limited liability company agreement, the operating agreement or other similar governing instruments, in each case as amended as of the date specified, of any Person. "Owned Real Property" shall mean the land listed on Schedule III. "PAL" shall mean the Pharmaceutical Affairs Law of Japan (iyakuhin-iryoukikito-no-hinshitu-yukousei-anzensei-no-kakuhoto-ni- kansuru-horitu) (Law No. 145 of 1955, as amended). "Parties" shall have the meaning set forth in the preamble hereto, and "Party" shall mean either of the Parties. "Permits" shall have the meaning set forth in Section (g) of Schedule 3.01. "Person" shall mean any natural person, general or limited partnership, limited liability company, limited liability partnership, corporation, joint stock company, trust, unincorporated association, joint venture, Governmental Authority, or other entity, whether acting in an individual, fiduciary or other capacity. "Products" shall have the meaning set forth in Section (u) of Schedule 3.01. "Registered IP" shall have the meaning set forth in Section (v) of Schedule 3.01. + +6 + + + + + +"Release" shall mean any release, spill, emission, leaking, pumping, pouring, dumping, emptying, injection, deposit, disposal, discharge, dispersal, leaching or migration on or into the Environment or into or out of any property. "Settlement" shall have the meaning set forth in Section 2.02(e). "Settlement Date" shall mean the 5t h Japan Business Day following the last day of the Offer Period, except as such date may be adjusted pursuant to Section 2.02(f). "Share Offer Price" shall have the meaning set forth in the recitals hereto. "SPI" shall have the meaning set forth in the recitals hereto. "Squeeze-out" shall mean any squeeze out transaction that Acquiror determines necessary and appropriate to make the Company wholly owned subsidiary of the Acquiror after the Settlement. "Stock Options" shall have the meaning set forth in the recitals hereto. "Stock Purchase Agreement" shall mean the stock purchase agreement among, dated August 26, 2015 entered into by Acquiror, and Ryuji Ueno, MD, Sachiko Kuno, S&R Technology Holdings, LLC and S&R Foundation. "Strategic Business Alliance" shall have the meaning set forth in Section 2.01. "Subsidiaries" shall mean, with respect to any Person, any juridical Person of which more than 50% of the voting power of the outstanding voting securities or more than 50% of the outstanding economic equity interest is held, directly or indirectly, by such Person, and in any event will include any Person that is fully included in the consolidated financial statements of such Person prepared in accordance with GAAP. "Sucampo Group" shall have the meaning set forth in Section 2.01. "Superior Offer" shall have the meaning set forth in Section 2.03(a). "Target Securities" shall have the meaning set forth in the recitals hereto. "Taxes" shall mean all taxes, charges, fees, levies or other assessments, including income, capital, gross receipts, excise, property, stamp, registrations, sales, license, payroll, consumption, withholding and franchise taxes, escheat obligation, and any secondary tax liability, imposed by Japan or any other country or any local government or taxing authority or political subdivision or agency thereof or therein, and such term shall include any interest, penalties or additions attributable to such taxes, charges, fees, levies or other assessments. "Tax Returns" shall mean any return, declaration, report, claim for refund, or information return or statement filed or required to be filed with any Governmental Authority with respect to Taxes, including any schedule or attachment thereto, and including any amendment thereof. + +7 + + + + + +"Tender Offer Agent" shall mean Nomura Securities Co., Ltd. "Tender Offer Explanatory Statement" shall have the meaning set forth in Section 2.02(d). "Tender Offer Registration Statement" shall have the meaning set forth in Section 2.02(d). Section 1.02 Interpretation. Unless otherwise indicated to the contrary in this Agreement by the context or use thereof: (a) the words, "herein," "hereto," "hereof" and words of similar import refer to this Agreement as a whole and not to any particular section or paragraph of this Agreement; (b) references in this Agreement to articles, sections or paragraphs refer to articles, sections or paragraphs of this Agreement; (c) headings of sections are provided for convenience only and should not affect the construction or interpretation of this Agreement; (d) words importing the masculine gender shall also include the feminine and neutral genders, and vice versa; (e) words importing the singular shall also include the plural, and vice versa; (f) the words "include", "includes" and "including" shall be deemed to be followed by the phrase "without limitation"; (g) any reference to a statute refers to such statute as it may have been or may be amended from time to time, or to such statute's successor, and shall be deemed also to refer to all rules and regulations promulgated thereunder; (h) any reference to a Contract or other document as of a given date means the Contract or other document as amended, supplemented and modified from time to time through such date; (i) "or" shall include the meanings "either" or "both"; and (j) the symbols "JPY" or "¥" shall refer to the lawful currency of Japan. ARTICLE II + +TRANSACTION Section 2.01 Strategic Alliance. For the purpose of creating a combined company that can drive considerable growth in global markets, including Japan, the Parties agree to form a strategic business alliance (the "Strategic Business Alliance") among Acquiror and SPI and its Affiliates (collectively, the "Sucampo Group") and the Company, subject to the successful Closing. The Parties intend to achieve the purpose of such Strategic Business Alliance by mutual cooperation in, among others, the following areas: (a) ensuring that the transaction contemplated in this Agreement would provide Sucampo Group with increased revenues—primarily from combining Sucampo Group's existing sales with those from the Company—enhanced profitability, strong cash flow generation and a robust balance sheet and the improved financial strength of SPI as the parent company would also accrue to the benefit of its subsidiaries, which will include the Company after the Closing; (b) ensuring that Sucampo Group and the Company together would have a deeper and broader development pipeline of potential drug candidates in development across four major therapeutic areas—gastroenterology, ophthalmology, autoimmune, and inflammation—and greater resources, both financially and operationally, to maximize these opportunities, and consistent with the Target Company's business strategy, such development pipelines (some of these drug candidates) could be out-licensed to external firms to create even greater value; and + +8 + + + + + +(c) ensuring that both Sucampo Group and the Company would have greater opportunity to conduct business development transactions, and through the relationships of the Company and increased presence in the Japanese market, Sucampo Group would gain greater access to the Japanese biotech community and Japan's well-regarded scientific institutions and researchers, and the Company would receive access to Sucampo Group's expertise in identifying, negotiating and managing key alliances. Section 2.02 Obligations of Acquiror. (a) Commencement of the Offer. Subject to the terms and conditions herein, Acquiror agrees to commence the Offer on August 27, 2015 (the "Launch Date") to acquire for cash (i) all of the issued and outstanding shares of Common Stock at the Share Offer Price and (ii) all of the outstanding Stock Options at the price as set out in Schedule I. The Offer shall be open for acceptance from the time of commencement until a time that is not earlier than 3:30 p.m. (Tokyo time) on the 30t h Japan Business Day from and including the Launch Date (as adjusted pursuant to Section 2.02(f) below, the "Offer Period"). (b) Conditions to the Commencement of the Offer. Acquiror's obligation to commence the Offer will be subject to satisfaction (or waiver in writing by Acquiror in its sole discretion) of each of the following conditions on the Launch Date: (i) The representations and warranties of the Company set forth in Section 3.01 shall be true and correct in all material respects; (ii) The Company shall have duly performed its obligations required to be performed by it prior to the Launch Date under this Agreement; (iii) The board of directors of the Company unanimously (a) shall have made a resolution approving a statement of opinion in support of the Offer and recommending the holders of shares of Common Stock and Stock Options to tender their shares and Stock Options to the Offer, with recommendation by the independent committee of the Company, and have publicly announced such statement, and (b) have not revoked such statement; (iv) The board of directors of the Company unanimously shall have made a resolution revealing its intention to support the Squeeze-out (including the price to be offered therein) and have publicly announced such intention, and have not revoked such intention; (v) For the purpose of approving the transfer of Stock Options that will be tendered to the Offer and releasing any transfer restriction for such Stock Options provided in relevant contracts between the Company and the holders of such Stock Options, the board of directors of the Company shall have made a resolution to authorize and instruct appropriate board members to approve the said transfer and release the said transfer restriction in a timely manner if requested in writing by any holders of such Stock Options; + +9 + + + + + +(vi) The Financing Commitment shall have been duly made and entered into by Jefferies; (vii) No temporary restraining order, preliminary or permanent injunction or other Order preventing the commencement of the Offer or the consummation of the Squeeze-out shall be in effect, and no Law shall have been enacted or shall be deemed applicable to the Offer or the Squeeze-out which makes the consummation of the Offer or the Squeeze-out illegal; (viii) All necessary consents, approvals (including, but not limited to, approval of the Financial Services Agency, Kanto Local Financial Bureau and Tokyo Stock Exchange) for the Offer shall have been obtained by Acquiror and the Company; (ix) The Company shall not have suffered a Material Adverse Effect since the Financial Statements Date; and (x) Acquiror shall have concurrently entered into a Stock Purchase Agreement with Ryuji Ueno, MD, Sachiko Kuno, S&R Technology Holdings, LLC and S&R Foundation. (c) Withdrawal of the Offer. Acquiror may withdraw the Offer upon the occurrence of any event listed in the FIEL Enforcement Ordinance and the Tender Offer Registration Statement. (d) Publication and Filing. Upon the commencement of the Offer, Acquiror shall publish a tender offer public notice and shall file a tender offer registration statement (the "Tender Offer Registration Statement") with the Kanto Local Finance Bureau, each in accordance with the terms and conditions set forth in this Section 2.02 and Article 27-3 of the FIEL. Acquiror shall file with the relevant Governmental Authorities, publish and/or mail to holders of the Target Securities as required by Law (i) a copy of the Tender Offer Registration Statement, (ii) a tender offer explanatory statement (the "Tender Offer Explanatory Statement") and (iii) each other document required under applicable Law to be so filed, published or mailed by it in connection with the Offer (collectively, the "Offer Documents"). (e) Settlement of the Offer. Unless the Offer has been withdrawn by Acquiror in accordance with terms of this Agreement, Acquiror shall cause payment in full for all Target Securities validly tendered (and not withdrawn) under the Offer (the "Settlement") to be made by the Tender Offer Agent in immediately available funds as promptly as practicable following the end of the Offer Period and in no event later than the Settlement Date. + +10 + + + + + +(f) Extensions of the Offer Period and Amendments. Acquiror may, in its sole discretion, extend the Offer Period for such period as designated by Acquiror in accordance with Article 27-6 of the FIEL. Section 2.03 Obligations of the Company. (a) Support of the Offer. Upon the commencement of the Offer, the Company (i) shall, by a unanimous resolution of its board of directors, and with recommendation by the independent committee of the Company, approve a statement of opinion in support of the Offer and recommending the holders of shares of Common Stock and Stock Options to tender their shares and Stock Options to the Offer and have publicly announced such statement, and (ii) shall not revoke such statement. The Company (1) shall also, by a unanimous resolution of its board of directors, and with recommendation by the independent committee of the Company, reveal its intention to support the Squeeze-out and (2) publicly announce such intention, and (3) shall not revoke such intention. Notwithstanding the forgoing, the Company may, upon prior consultation with the Acquiror, revoke or change such statement or intention, only if (A) there is any counter tender offer bid or any bona fide offer to acquire the Target Securities that is a Superior Offer and (B) the failure to take such action, on the basis of legal opinion issued in writing by legal counsel of the Company, would be reasonably expected to cause the board of directors of the Company to be in breach of its duty of care (zenkan-tyui-gimu) under Japanese law. For purposes of this Agreement, "Superior Offer" shall mean an unsolicited bona fide written offer by a third party to purchase all of the outstanding Target Securities that the Board of Directors of the Company determines, in its good faith judgment, after consultation with its outside legal counsel and its financial advisors, is reasonably likely to be consummated in accordance with its terms, taking into account all legal, regulatory and financing aspects (including certainty of closing) of the offer and the ability of the Person making the offer to consummate the transaction and that would result in a transaction more favorable to the Company's stockholders (solely in their capacity as such) from a financial point of view than the transaction contemplated by this Agreement. (b) Publication and Filing. Upon the commencement of the Offer, the Company shall make public disclosure and file a company's position statement (iken-hyoumei-houkokusho) (the "Company's Position Statement") with the Kanto Local Finance Bureau, each in accordance with in accordance with Section 2.03(a) and applicable Laws and in a manner and content as agreed with Acquiror. ARTICLE III + +REPRESENTATIONS AND WARRANTIES Section 3.01 Representations and Warranties of the Company. The Company hereby represents and warrants to Acquiror that, except as disclosed in the Company Disclosure Letter, the statements set forth in Schedule 3.01 are true and correct as of the date of this Agreement and will be true and correct as of the Launch Date and the Closing Date (or, if made as of a specified date, as of such specified date only). + +11 + + + + + +Section 3.02 Representations and Warranties of Acquiror. Each of Acquiror and SPI hereby represents and warrants to the Company that the statements set forth in Schedule 3.02 are true and correct as of the date of this Agreement and will be true and correct as of the Launch Date and the Closing Date (or, if made as of a specified date, as of such specified date only). ARTICLE IV + +COVENANTS OF THE PARTIES Section 4.01 The Company's Obligation. (a) Ordinary Course of Business of the Company's Operation. During the period from the date of this Agreement and the completion of the Squeeze-out (the "Restricted Period"), except as contemplated by this Agreement, required by applicable Law or otherwise agreed to in writing by Acquiror, the Company shall operate in the ordinary course of business consistent with the past practice and use its reasonable efforts to preserve intact the material components of its current business organization, including keeping available the services of current officers and key employees, and use its reasonable efforts to maintain its relations and good will with all material suppliers, material customers, governmental bodies and other material business relations intact its business relationships. (b) Restrictive Covenants. Without limiting Section 4.01(a), during the Restricted Period, except as contemplated by this Agreement, set forth in Schedule 4.01(b), required by applicable Law or otherwise agreed to in writing by Acquiror, the Company shall not: (i) sell, issue, grant, pledge or transfer or authorize the sale, issuance, grant, pledge or transfer of any capital stock or equity interest or other security of the Company or any instrument convertible into or exchangeable for any security of the Company, except for approval of the transfer of Stock Options that will be tendered to the Offer and release from any transfer restriction for such Stock Options provided in relevant contracts between the Company and the holders of such Stock Options; (ii) establish or adopt new employee benefits plans or provide increases in employee salaries, or benefits outside the ordinary course of business; (iii) hire new employees, other than at positions with annual salary and benefits costs of not more than […***…] or positions listed on Schedule 4.01(b) hereto; (iv) enter into change-in-control, severance, bonus or retention agreements with any directors, officers, employees or consultants of the Company; (v) enter into any collective bargaining agreement or other agreement with any labor organization or work council; + +12 + + + + + +(vi) make any material capital expenditure; (vii) license, acquire, dispose or cause or permit any Lien on any material right or material asset or property other than the sale of inventory in the ordinary course of business or dispositions of obsolete, surplus or worn out assets; (viii) amend or relinquish any material rights under any Material Contract or enter into any new Material Contracts; (ix) enter into any new line of business or discontinue any existing business, including commencement of any new development programs, pre-clinical studies or clinical trials except for those activities and costs that cannot be postponed and the Company is contractually obligated to perform or pay during the Restricted Period, and not to exceed the costs set forth in Schedule 4.01(b)(ix) of this Agreement, which Schedule shall include the budgeted costs of the development activities listed therein; (x) make any material change to any accounting methods or make any material tax election; (xi) commence or settle any legal proceeding; (xii) enter into any action or decision that could fall under any category of information subject to insider trading regulation under Article 166, Paragraph 1 or Article 167, Paragraph 1 of the FIEL; (xiii) declare or make payment of any dividends or other distribution to its shareholders; (xiv) revoke the resolution by the board of directors as set out in Section 2.02(b)(v); (xv) incur any Indebtedness or grant any Liens on any of its property or assets outside the ordinary course of business; (xvi) adopt, implement or take any actions or measures except for those permitted under this Agreement that could require Acquiror to amend or change, in part or whole, any of the Offer Documents or extend the Offer Period; or (xvii) authorize any of, or agree or commit to take, any of the actions described in clauses (i) through (xv) of this Section 4.01(b). (c) Notice and Consent. Prior to Closing, the Company shall provide a written notice to, or use its commercially reasonable efforts to obtain a written consent from each counterparty to a Material Contract to which the Company is party, if such contract so requires the Company in connection with the consummation of the transactions contemplated hereby. + +13 + + + + + +(d) Cooperation with the Offer. The Company agrees to take all reasonable actions available to them to cooperate with Acquiror in making the Offer and gathering tenders from existing shareholders of the Company, and shall provide such information and assistance as Acquiror or its agents may reasonably request in connection with communicating the Offer and any amendments and supplements thereto to the holders of the Target Securities and to such other Persons as are entitled to receive the Offer Documents under applicable Law, including, to the extent permissible, under the Personal Information Protection Law of Japan and other applicable Law. The Company acknowledges and agrees that Acquiror may state in any Offer Document or press release the Company's support of the Offer and the Squeeze-out as set out in Section 2.03(a). (e) Financing. Acquiror shall use its reasonable efforts to take all actions and to do all things necessary, proper or advisable to arrange, consummate and obtain the proceeds of the Financing. The Company shall use its reasonable efforts to provide to Acquiror such customary cooperation as may be reasonably requested by Acquiror to assist Acquiror in causing the conditions in the Financing Commitment to be satisfied and such customary cooperation as is otherwise reasonably necessary and reasonably requested by Acquiror solely in connection with obtaining the Financing, which cooperation shall include (without limitation): (i) causing its management team, external auditors and other non-legal advisors to assist in preparation for and to participate in a reasonable number of meetings with the Lenders, and conference calls (including customary one-on-one meetings with the parties acting as lead arrangers, bookrunners or agents for, and prospective lenders of, the Financing and senior management (with appropriate seniority and expertise) of the Company), presentations and sessions with prospective lenders, investors and ratings agencies in connection with any of such Financing; (ii) using its reasonable efforts to cause the syndication and marketing efforts in connection with the Financing to benefit from the Company's relationships with potential financing sources; (iii) providing customary authorization letters to the Lenders under the Financing Commitment authorizing the distribution of information to other prospective lenders and containing customary representations to the Lenders under the Financing Commitment; (iv) furnishing Acquiror and the Lenders promptly, and in any event at least five (5) business days prior to Closing, with all documentation and other information that any Lender has reasonably requested and that such Lender has determined is required by regulatory authorities in connection with the Financing under applicable "know your customer" and anti-money laundering rules and regulations, including without limitation the PATRIOT Act; + +14 + + + + + +(v) assisting in preparing of and, subject to the successful Squeeze-out, executing and delivering of any customary pledge and security documents, credit agreements, indentures, guarantees, ancillary documents and instruments and customary closing certificates and documents and assisting in preparing schedules (and providing necessary information relating thereto) as may be reasonably requested by Acquiror; (vi) obtaining customary payoff letters, Lien terminations and instruments of discharge to be delivered at Closing to allow for the payoff, discharge and termination in full on the Closing Date of all Indebtedness; (vii) permitting the use of the Company's logos, trademarks and trade names in connection with the Financing contemplated by the Financing Commitment; provided, that such logos, trademarks and trade names are used solely in a manner that is not intended to, nor reasonably likely to, harm or disparage the Company; (viii) timely preparing a customary confidential information memorandum and other customary marketing materials with respect to the Financing; and (ix) promptly furnishing any other information as reasonably requested by Acquiror or the Lender in connection with the Financing. Section 4.02 Consummation of the Squeeze-out. Subject to the successful Closing, the Company agrees to take all reasonable actions available to it to consummate the Squeeze-out and appointment of new directors of the Company as designated by Acquiror as soon as possible after the Closing, as reasonably requested by Acquiror, and shall provide such information and assistance as Acquiror or its agents may reasonably request in connection with communicating the Squeeze-out. Section 4.03 Applications and Consents; Governmental Communications and Filings. Each Party shall cooperate and use its reasonable efforts in making all notifications to, and seeking all consents of, Governmental Authorities necessary or advisable to consummate the transactions contemplated hereby as promptly as practicable. No Party shall take any action that would reasonably be expected to prevent or materially delay or impede the filing or receipt of such necessary or advisable notifications or consents. Section 4.04 Further Assurance. Subject to the terms and conditions hereof, each Party covenants and agrees to use its reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, in good faith, all things applicable to it that are necessary, proper or desirable, or advisable under applicable Law to carry out the provisions contained in this Agreement and the transactions contemplated hereunder. Section 4.05 Access. During the Restricted Period, upon reasonable advance notice to the Company, the Company shall: (a) provide Acquiror with reasonable access during normal business hours of the Company to the Company's employees, consultants and other personnel and assets and to all existing books, records, Tax Returns, work papers and other documents and information relating to the Company; and (b) promptly provide Acquiror copies of the existing books, records, Tax Returns, work papers and other documents and information relating to the Company, and with such additional financial, operating and other data and information regarding the Company, as Acquiror may reasonably request; provided, however, that any such access shall be conducted at Acquiror's expense, at a reasonable time, under the supervision of appropriate personnel of the Company and in such a manner as not to unreasonably interfere with the normal operation of the business of the Company. + +15 + + + + + +Section 4.06 Notifications. Each Party shall give prompt notice to the other Parties (and subsequently keep the other Parties informed on a current basis) upon its becoming aware of (a) any Actions commenced or, to such Party's knowledge, threatened against, relating to or involving or otherwise affecting such Party or any of its Affiliates which relate to the Offer or the transactions contemplated by this Agreement, or (b) the occurrence or existence of any fact, event or circumstance that would or would be reasonably likely to (i) cause or constitute a material breach of any of its covenants or agreements contained herein, or (ii) impair or delay the completion of the Offer or the Closing; provided, however, the delivery of any notice pursuant to this Section 4.06 shall not (x) cure any breach of, or non-compliance with, any other provision of this Agreement or (y) limit the remedies available to any Party receiving such notice. Section 4.07 Confidentiality. (a) For […***…] ([…***…]) years from and after the date of this Agreement, the Company will hold and treat in confidence, and will not use, and will cause their Affiliates to hold and treat in confidence, all non-public documents and information (including any information with regard to terms and conditions of this Agreement) concerning Acquiror and each of its respective Affiliates, except to the extent that such documents and information (1) are required or requested (with prompt notice of such request to be made to Acquiror) to be disclosed by applicable Law or any Governmental Authority, (2) generally become available to the public through no fault of the Company, (3) become available to the Company on a non-confidential basis, or (4) are independently developed by the Company or its Affiliates without reference to the furnished information. (b) Until earlier of (i) the consummation of the Squeeze-out and (ii) the expiration of […***…] ([…***…]) year period from and after the date of this Agreement, Acquiror will hold and treat in confidence, and will not use, and will cause its Affiliates to hold and treat in confidence, all non-public documents and information concerning the Company, except to the extent that such documents and information (1) are required or requested (with prompt notice of such request to be made to Acquiror) to be disclosed by applicable Law or any Governmental Authority, (2) generally become available to the public through no fault of Acquiror or its Affiliates, (3) become available to Acquiror or its Affiliates on a non- confidential basis, or (4) are independently developed by Acquiror or its Affiliates without reference to the furnished information. Notwithstanding the foregoing, Acquiror may disclose such documents and information to its directors, officers, agents, consultants and other representatives (including attorneys, financial advisors, accountants, potential financing sources and the Lenders) of Acquiror or its Affiliates to the extent reasonably necessary for execution or performance of this Agreement. + +16 + + + + + +Section 4.08 Public Announcement. Notwithstanding Section 4.07(b), Acquiror may make public announcement regarding the transactions contemplated by this Agreement, including the tender offer public notice, the Tender Offer Registration Statement, the Tender Offer Explanatory Statement, any amendments to any of the foregoing, and public announcements to be made in connection with the execution of this Agreement and after the Closing, in each case taking into account the requirements of all applicable Law. The Company shall not otherwise communicate with any news media in respect of this Agreement or the transactions contemplated by this Agreement without the prior written consent of Acquiror. Section 4.09 No Lender Liability. Notwithstanding anything herein to the contrary, the Company hereby waives any rights or claims against Jefferies, each lead arranger and each other agent or co-agent (if any) with respect to the Financing, the Lenders, or any affiliate thereof and all of their respective affiliates and each director, officer, employee, representative and agent thereof (each, a "Financing Party") in connection with this Agreement, the Financing or the Financing Commitment, whether at law or equity, in contract, in tort or otherwise, and the Company agrees not to commence (and if commenced agrees to dismiss or otherwise terminate) any Action against any Financing Party in connection with this Agreement or the transactions contemplated hereby (including any action relating to the Financing or the Financing Commitment). In furtherance and not in limitation of the foregoing waiver, it is agreed that no Lender shall have any liability for any claims, losses, settlements, damages, costs, expenses, fines or penalties to the Company in connection with this Agreement or the transactions contemplated hereby (including the Financing or the Financing Commitment). Section 4.10 Employees of Company. Following the Closing Date, SPI shall develop an integration plan in consultation with the management of the Company as required for combining the business operations of the two companies. Subject to the goals, parameters and integration activities outlined in the integration plan, SPI shall (i) provide the employees of the Company with employee incentives under such terms and conditions as not less favorable (taking into account, among other things, tax implications) to the incentives made available by the Company to such its employees as of the date of this Agreement […***…], and thereafter under such terms and conditions as not less favorable (taking into account, among other things, tax implications, local laws, and SPI's practices with respect to the employees of Acquiror) to those of the incentives made available by SPI to its employees, and (ii) […***…] the […***…] of the […***… ] of the […***…] as of the […***…] of this [… ***…] at […***…] the […***…] of the […***…] of the […***…] on […***…]. For the sake of achieving the purpose of the strategic alliance as set forth in Section 2.01, both Parties acknowledge their mutual intention to, in principle, maintain the Company's employment at levels consistent with the requirements of the Company from time to time. + +17 + + + + + +Section 4.11 Development Programs and Clinical Trials. Following the Closing Date, SPI hereby agrees to engage in a program review in consultation with the management of the Company with respect to the development programs and clinical trials listed in Schedule 4.11, with the goal of […***…] an […***…] of […***…] and […***…]. Such review shall be conducted consistent with SPI's process and practices applied to the assessment of its own product candidates, including the […***…] of a […***…] of […***…] on […***…] of the […***…] of […***…] and […***…] and the […***…] for […***…], and the […***…] at the […***…] be […***…]; provided, however, that […***…] the […***…] to […***…] or […***…] and […***…] its […***…] or […***…] of […***…]. ARTICLE V + +INDEMNIFICATION Section 5.01 Indemnification by the Company. The Company shall indemnify Acquiror from and against all Losses incurred by Acquiror to the extent arising out of or resulting from (i) any inaccuracy or breach of a representation or warranty made by the Company under Section 3.01 or (ii) any breach or failure by the Company to perform any of their covenants or obligations contained in this Agreement. Section 5.02 Indemnification by Acquiror. Acquiror shall indemnify the Company from and against all Losses incurred by the Company to the extent arising out of or resulting from (i) any inaccuracy or breach of a representation or warranty made by Acquiror under Section 3.02 or (ii) any breach or failure by Acquiror to perform any of its covenants or obligations contained in this Agreement. Section 5.03 Indemnification Procedure. Whenever any claim shall arise for indemnification under this Article V, the indemnified Person making such claim (the "Indemnified Party") shall notify the Party from whom indemnification is sought (the "Indemnifying Party") in writing of the claim and, when known, the facts constituting the basis for such claim; provided, however, that the failure timely to provide such notice shall not release the Indemnifying Person from its obligations under this Article V. Section 5.04 Limitations. The Indemnifying Party's liability for all claims made under this Agreement shall be subject to the following limitations: (i) the Indemnifying Party shall […***…] for such claims until the […***…] of the […***…] shall […***…] of the […***…] by the […***…] of all of the […***…] and […***…] of […***…], in which case the Indemnifying Party shall be liable only for the […***…] of the [… ***…] of the […***…] by the […***…] of all of the […***…] and […***…] of […***…], and (ii) the Indemnifying Party's […***…] for [… ***…] shall not […***…] of the […***…] by the […***…] of all of the […***…] and […***…] of […***…]. Notwithstanding the above provisions of this Section 5.04, the limitations provided in this Section 5.04 shall not apply to (i) any claim for fraud or intentional misrepresentation or (ii) any claim for breach of any agreement or covenant contained herein. + +18 + + + + + +ARTICLE VI + +TERMINATION Section 6.01 Termination. This Agreement may be terminated prior to the end of the Offer Period by Acquiror if a condition for withdrawal of the Offer has occurred. This Agreement shall be automatically terminated if the Offer has been withdrawn or the Offer is not successful due to the failure of obtaining the minimum threshold. This Agreement may not be terminated after the end of the Offer Period if the Offer is successful. Section 6.02 Notice of Termination. Any Party desiring to terminate this Agreement pursuant to Section 6.01 shall give written notice of such termination to the other Party to this Agreement. Section 6.03 Effect of Termination. In the event of the termination of this Agreement as provided in Section 6.01, this Agreement shall forthwith become void and there shall be no liability on the part of any Party to this Agreement or any Financing Party except as set forth in Article V. This sentence and Section 4.07, Section 4.09, Article V and Article VIII shall survive any termination of this Agreement. ARTICLE VII + +GUARANTEE Section 7.01 Guarantee. SPI hereby absolutely, unconditionally and irrevocably guarantees to and in favor of the Company that the Acquiror shall perform and discharge any and all of its obligations under this Agreement as set forth in this Agreement. ARTICLE VIII + +MISCELLANEOUS Section 8.01 Governing Law. The construction, validity and performance of this Agreement shall be governed in all respects by the laws of Japan. Section 8.02 Jurisdiction. (a) Any dispute, action or proceeding arising out of or in connection with this Agreement, including any question regarding its existence, validity, binding effect, breach, amendment or termination shall be subject to the exclusive jurisdiction of the Tokyo District Court. + +19 + + + + + +(b) Notwithstanding anything herein to the contrary, the Parties hereto acknowledge and irrevocably agree (i) that any dispute, action, or proceeding, whether in law or in equity, whether in contract or in tort or otherwise, involving the Lenders arising out of, or relating to, the transactions contemplated hereby, the Financing or the performance of services thereunder or related thereto shall be subject to the exclusive jurisdiction of any state or federal court sitting in the County of New York, Borough of Manhattan, New York, New York and any appellate court thereof and each Party hereto submits for itself and its property with respect to any such dispute, action or proceeding to the exclusive jurisdiction of such court, (ii) not to bring or permit any of their Affiliates to bring or support anyone else in bringing any such dispute, action or proceeding in any other court, (iii) to waive and hereby waive, to the fullest extent permitted by law, any objection which any of them may now or hereafter have to the laying of venue of, and the defense of an inconvenient forum to the maintenance of, any such dispute, action or proceeding in any such court, (iv) to waive and hereby waive any right to trial by jury in respect of any such dispute, action or proceeding, (v) that a final judgment in any such action shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law and (vi) that any such dispute, action or proceeding shall be governed by, and construed in accordance with, the laws of the State of New York, without regard to the conflicts of law rules of such State that would result in the application of the laws of any other jurisdiction. Section 8.03 Cost and Expenses. Except as otherwise provided in this Agreement, each Party shall bear the costs, expenses and fees (including fees and expenses of the attorneys, certified public accountants, tax advisors and other advisors) incurred by such Party in relation to the preparation, execution and performance of this Agreement. Section 8.04 Assignment. No Party shall assign or transfer or purport to assign or transfer (whether by operation of Law or otherwise) any of its rights, interests or obligations hereunder without the prior written consent of the other Party; provided, that Acquiror may assign this Agreement and its rights and interests herein without any such consent as collateral to the Lenders in connection with the Financing. Subject to the preceding sentence, this Agreement shall be binding upon and shall inure to the benefit of the Parties and their respective successors and assigns. Section 8.05 Amendments and Waivers. No amendment, modification or discharge of this Agreement, and no waiver hereunder, shall be valid or binding unless set forth in writing and duly executed by the Party against whom enforcement of the amendment, modification, discharge or waiver is sought (except that Section 4.09, Section 6.03, Section 8.02(b), Section 8.04, this Section 8.05 and Section 8.13 shall not be amended, modified, discharged or waived in a manner that is adverse to the Lenders without the prior written consent of the Lenders). No failure or delay by Acquiror or the Company in exercising any right hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise of any other right hereunder. Section 8.06 Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced under any Law or as a matter of public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated by this Agreement is not affected in any manner materially adverse to either Party. The Parties shall negotiate in good faith in order to seek to agree on the terms of a mutually satisfactory provision to be substituted for any provision found to be invalid, illegal or unenforceable. + +20 + + + + + +Section 8.07 Counterparts. This Agreement may be executed in two or more counterparts (including by facsimile or email pdf format), each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Section 8.08 Entire Agreement. This Agreement (including the Schedules and Disclosure Letters hereto) constitutes the entire agreement of the Parties hereto with respect to the subject matter hereof, and supersede any and all previous oral or written agreements or understandings between the Parties in relation to the matters dealt with herein. The Schedules referred to in this Agreement are intended to be and hereby are specifically made a part of this Agreement. Any and all previous agreements and understandings between the Parties regarding the subject matter hereof, whether written or oral, are superseded by this Agreement. Section 8.09 Notices. Any notice or communication under this Agreement shall be sent to the Parties in English at their respective addresses set forth below or such other addresses as may from time to time be notified. Notices may be sent by hand, or by registered mail (internationally recognized courier service if overseas) or by fax or email, and shall be deemed to be received, if sent by hand, fax or email, one normal working hour (at the place of delivery) after delivery or transmission, and if by registered mail the second Business Day after posting (or, in the case of international courier service, on the fifth Business Day following the date of deposit with such courier service, or such earlier delivery date as may be confirmed in writing to the sender by such courier service). If to Acquiror: Sucampo Pharma, LLC. 2-2-16, Sonezakishinchi, Kita-ku, Osaka Attention: […***…] Phone: […***…] Fax: […***…] Email address: […***…] If to SPI: Sucampo Pharmaceuticals, Inc. 4520 East West Highway Bethesda, MD 20814 USA Attention: General Counsel Phone: […***…] + +21 + + + + + +Fax: […***…] Email address: […***…] If to the Company: R-Tech Ueno, Ltd. NBF Hibiya Bldg. 10F Uchisaiwaicho 1-1-7 Chiyoda-ku, Tokyo 100-0011 JAPAN Attention: Office of the President Phone: […***…] Fax: […***…] Email address: […***…] Section 8.10 Language. This Agreement has been prepared and executed in, and shall be construed in accordance with, the English language. Any Japanese translation prepared by any Party shall be for convenience purposes only, and in the event of a dispute as to interpretation of this Agreement, shall have no bearing on such interpretation. Section 8.11 Disclosure Schedules. Each Party acknowledges and agrees that disclosure of any item in any section or subsection of a Disclosure Letter shall be deemed disclosure by such Party with respect to any other section or subsection to which the item relates, to the extent the relevance of such item is readily apparent. Matters reflected in the Company Disclosure Letter are not necessarily limited to matters required by this Agreement to be so reflected. Such additional matters are set forth for informational purposes and do not necessarily include other matters of a similar nature. No reference to or disclosure of any item or other matter in any Section, Disclosure Letter or Schedule of this Agreement shall be construed as an admission or indication that such item or other matter is material or that such item or other matter is required to be referred to or disclosed in this Agreement. Without limiting the foregoing, no such reference to or disclosure of a possible breach or violation of any contract, Law or Governmental Order shall be construed as an admission or indication that such a breach or violation exists or has actually occurred. Section 8.12 Fraud. Each Party acknowledges and agrees that nothing herein shall relieve or release a Person of any liability in connection with any fraudulent or criminal acts committed by such Person, its Affiliates or their respective representatives, and nothing herein shall provide any indemnification to or release of any Person committing such fraudulent or criminal acts. + +22 + + + + + +Section 8.13 Third-party Beneficiaries. It is expressly agreed by the Parties that the Lenders shall be third party beneficiaries of Section 4.09, Section 6.03, Section 8.02(b), Section 8.04, Section 8.05 and this Section 8.13. Nothing in this Agreement shall be construed to create a right in any employee to employment with Acquiror or the Company or any of their respective Affiliates or successors. No current or former employee or any other individual associated with the Company shall be regarded as a third party beneficiary of this Agreement or have a right to enforce any provisions hereof. [remainder of page intentionally left blank] + +23 + + + + + +IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first above written. Sucampo Pharmaceuticals, Inc. By: /s/ Peter Greenleaf Name: Peter Greenleaf Title: Chief Executive Officer Sucampo Pharma, LLC. By: /s/ Misako Nakata Name: Misako Nakata Title: Representative Executor R-Tech Ueno, Ltd. By: /s/ Y. Mashima Name: Yukihiko Mashima Title: President \ No newline at end of file diff --git a/full_contract_txt/SUMMAFOURINC_06_19_1998-EX-10.3-SOFTWARE LICENSE AND MAINTENANCE AGREEMENT.txt b/full_contract_txt/SUMMAFOURINC_06_19_1998-EX-10.3-SOFTWARE LICENSE AND MAINTENANCE AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..e89f6d04cebb9e7339aa552a61a844a0ba6d7b08 --- /dev/null +++ b/full_contract_txt/SUMMAFOURINC_06_19_1998-EX-10.3-SOFTWARE LICENSE AND MAINTENANCE AGREEMENT.txt @@ -0,0 +1,1117 @@ +1 EXHIBIT 10.3 + + SOFTWARE LICENSE AND MAINTENANCE AGREEMENT + + This Software license and maintenance agreement ("Agreement") is entered into effective as of August 4, 1997 (the "Effective Date") by and between D2 Technologies, Inc., a California corporation with offices at 104 West Anapamu Street, Santa Barbara, CA 93101 ("D2"), and Summa Four Inc., a Delaware corporation with offices at 25 Sundial Avenue, Manchester, New Hampshire 03103-7251 ("LICENSEE"). + + WHEREAS, D2 has previously developed certain software and designs capable of performing certain voice processing functions; + + WHEREAS, LICENSEE is developing a product which requires certain software functions and designs capable of performing certain voice processing functions; + + WHEREAS, D2 desires to license to LICENSEE certain of its software technology for use in connection with Licensee's products: + + WHEREAS, D2 is further willing to provide certain maintenance and support services to LICENSEE in relation to such software technology; + + NOW THEREFORE, in consideration of the mutual promises and covenants contained herein, the parties agree as follows: + +1. DEFINITIONS + + 1.1 "Licensed Technology" shall mean software licensed to LICENSEE by D2 as listed in Exhibit A. + + 1.2 "DSP" shall mean digital signal processing. + + 1.3 "Runtime License Fee" shall have the meaning set forth in Article 2.2(iii). + + 1.4 "Specifications" shall mean D2's specifications of the Licensed Technology which are attached hereto as Exhibit A. + + 1.5 "Update" shall mean a new release of a software product which typically includes bug fixes and/or minor feature changes, but does not include substantial new functionality. + +Software License D2 Technologies, Inc. and Maintenance Agreement August 4, 1997 CONFIDENTIAL + + 2 + + 1.6 "New Version" in this Agreement shall mean a new release of Licensed Technology that provides significant performance enhancements, including new releases of software product optimized for different members of the same DSP processor family which is based on the same core architecture and instruction set. + + 1.7 "Defect" shall mean any failure of Licensed Technology to meet the Specification as a result of a material failure (including an error or "bug" that is material) of the Licensed Technology. "Material" is defined as priority A, B, and C in Article 6.3. + + 1.8 "Source Code" shall mean all computer programming instructions relating to a software product in a form readable by humans and typically prepared by a programmer. Source Code includes associated procedural code, comments, utilities, tools, notes, data diagrams and related and supporting technical documentation. + + 1.9 "Object Code" shall mean software code resulting from the translation or processing of Source Code by a computer into machine language or intermediate code, which thus is in a form that would not be convenient to human understanding of the program logic, but which is appropriate for execution or interpretation by a computer. + + 1.10 "Licensed Source Code" shall mean Source Code for Licensed Technology. + + 1.11 "Licensee Product" shall mean the product being developed by LICENSEE as described in Exhibit B, which utilizes Licensed Technology. LICENSEE shall own all rights, title and interest in Licensee Product. D2 shall have no rights to Licensee Product. + + 1.12 "End User" shall mean a person or business entity that purchases, leases or otherwise properly obtains the right to use or distribute a Licensee Product directly from LICENSEE or through one or more intermediaries. + +2. LICENSED TECHNOLOGY + + 2.1 Ownership. Subject to the rights granted to LICENSEE in this Agreement, D2 owns all right, title and interest in and to the Licensed Technology. Notwithstanding the foregoing, LICENSEE shall retain all right, title and interest in and to modifications to the Licensed Source Code made by LICENSEE pursuant to the license in Article 2.2 below, subject always to D2's ownership rights in the underlying Licensed Technology. + +Software License D2 Technologies, Inc. and Maintenance Agreement August 4, 1997 CONFIDENTIAL + +3 + + + + + + 2.2 License to LICENSEE. + + (i) Subject to the terms and conditions of this Agreement, D2 hereby grants LICENSEE a perpetual non-exclusive, worldwide license, to use Licensed Technology in Object Code format only as an incorporated part of the Licensee Product. For this purpose, LICENSEE may also modify, create derivative works, of and reproduce and have reproduced the Licensed Technology, and to develop, use, market and distribute (directly or through third parties) Licensed Technology, or modifications or derivative works of the Licensed Technology created by or for LICENSEE. + + (ii) In consideration for the right to modify, develop and completely own derivative works of the Licensed Technology set forth in Article 2.2 (i) above, LICENSEE shall pay D2 a license fee (the "Development License Fee") as set forth in Exhibit C. Final acceptance testing shall be completed by the parties according to Article 4 of this Agreement. + + (iii) LICENSEE shall pay D2 a license fee ("Runtime License Fee") as set forth in Exhibit C for each copy of the Licensed Technology that LICENSEE distributes to end users directly or through third parties for such end-user's use in connection with Licensee's Product. The Runtime License Fee shall be paid by LICENSEE quarterly for Licensee Products which have been paid for by Licensee's end-user customer in the prior quarter. To the extent Licensee accepts returns or is required to provide refunds to its customers (and to the extent additional Licensee Products are delivered to customers for warranty or maintenance/support purposes), such circumstances will either entitle Licensee to obtain a credit against future Runtime License Fees owed or, in the case of warranty/maintenance or support deliveries, no Runtime License Fees shall be due at all. + + (iv) LICENSEE is also granted a limited non-transferable non-exclusive license to Licensed Source Code to perform software maintenance functions according the terms set forth in Article 7 of this Agreement. + + (v) D2 shall provide LICENSEE with master copies of the Licensed Technology, in Source Code and Object Code format, promptly after such software has been completed, tested and approved for release by D2 and Licensee. In any event, D2 shall deliver all Licensed Technology completely tested and approved for performance in accordance with the specifications. + + 2.3 End User License. LICENSEE shall ensure that all Licensed Technology distributed by LICENSEE shall be subject to a shrink-wrap agreement or other end user agreement which contains a provision substantially similar to the provision set forth in Exhibit D. + +Software License D2 Technologies, Inc. and Maintenance Agreement August 4, 1997 CONFIDENTIAL + +4 + +3. ADDITIONAL TECHNOLOGY LICENSE + + 3.1 New Functions. In the event that LICENSEE requires any additional functionality or technology substantially different from those set forth in Exhibit A or otherwise made available by D2 to other Licensees, D2 shall license such additional functionality or technology to LICENSEE at D2's then best price to its other Licensees. Such additional technology licenses shall be subject to the same terms of this agreement except for an amendment to the product specification and price schedule of Exhibits A and C. Any other new licensing terms shall be negotiated in advance and included in said amendment. + + 3.2 Different Processors. + + (A) "Supported Processors": If D2 offers or plans to offer all or part of Licensed Technology on a processor ("Supported Processor") different from the Texas Instruments (TI) TMS320C54x family of processors, D2 shall make available to LICENSEE such new versions of Licensed Technology under the same terms of this Agreement subject to the license fees as follows: + + (i) The development license fees for any part or all of Licensed Technology for each "Supported Processor" shall be 50% of that for the TMS320C54x processor family as listed in Exhibit C. + + (ii) The per-processor runtime license fees for any "Supported Processor" shall be the same as that specified in Exhibit C for the TI TMS320C54x. + + (iii) The runtime license fee CAP in exhibit C shall be cumulative across the TI TMS320C54x, TMS32OC55x, TMS330C6x, and other TI processors based on the same core processor architecture. For processors other than the TI processors listed in this Article 3.2A(iii) ("additional supported processors"), the runtime license fee CAP and buy-out license fee in Exhibit C shall be increased by 25% for each "additional supported processor." The CAP for Licensed Technology shall be cumulative across all "Supported Processors" (including "additional supported processors") utilized by LICENSEE. If the cumulative inflation index (according to government published Consumer Price Index) exceeds 25% from the effective date of this Agreement to the time when D2 makes available Licensed Technology for an "additional supported processor", D2 and LICENSEE agree to negotiate in good faith reasonable incremental runtime license fees for Licensed Technology used in such "additional supported processor. + +Software License D2 Technologies, Inc. and Maintenance Agreement August 4, 1997 CONFIDENTIAL + +5 + + (B) "Unsupported Processors". If LICENSEE requires versions of Licensed Technology on a processor other than the "Supported Processors", D2 agrees to negotiate in good faith with LICENSEE an agreement to develop such a version of Licensed Technology. Such an agreement shall include appropriate development license fees and runtime license fees as well as special engineering + + + + + +service fees. + +4. ACCEPTANCE + + Upon delivery of the Licensed Technology to Licensee, D2 will have tested and verified that such Licensed Technology shall perform in accordance with an acceptance specification agreed to by D2 and LICENSEE. The acceptance specification shall be completed no later than 90 days after the effective date of this Agreement and shall be attached to this agreement as Exhibit F. Upon successful completion of the acceptance testing, LICENSEE shall make the final "Development License Fee" payment described in Exhibit C LICENSEE shall, within thirty (30) days after delivery of any Licensed Technology, either accept such Licensed Technology or reject such Licensed Technology because of nonconformance with the Specifications. LICENSEE shall provide D2 with written notification of any rejection of Licensed Technology which explains the basis for such rejection. If completion of testing is precluded or delayed due to performance deficiencies, incompatibilities or other Defects in the Licensed Technology, D2 shall immediately and without any additional payment, correct such Defects.. All corrected versions of the Licensed Technology shall be subject to the acceptance procedures set forth above in this Article 4. + +5. REPORTS, AUDITS + + 5.1 Reports. Within thirty days after the end of each calendar quarter during the term of this Agreement, LICENSEE shall provide D2 with written reports setting forth the number of LICENSEE Products containing the Licensed Technology that were licensed to end users by LICENSEE in such calendar quarter as more particularly described in Article 2.2 (iii) above. + + 5.2 Audits. LICENSEE shall maintain records of its distribution of Licensee Products containing the Licensed Technology, for a period of one year after the date on which LICENSEE distributes the Products to which such records pertain. D2 may audit such records by engaging an independent public audit firm, approved in advance by Licensee, upon thirty days written notice, provided that (i) no more than one such audit may be made in any twelve month period, (ii) D2 may only audit LICENSEE's records for a particular time period once, and (iii) D2 shall be responsible for ensuring that the auditor executes and abides by LICENSEE's confidentiality agreement. + +Software License D2 Technologies, Inc. and Maintenance Agreement August 4, 1997 CONFIDENTIAL + +6 + +6. MAINTENANCE AND SUPPORT + + 6.1 Maintenance and Support Obligation, Fees. On the date of expiry of the Warranty period defined in Article 8.3, and on any anniversary of the expiry date, LICENSEE may in its sole discretion pay D2 a "Maintenance and Support Fee" according to Exhibit C. In return for payment of such fee, D2 shall provide LICENSEE with the maintenance and support set forth in this Article 6 for a period of twelve months (the "Contract Year"). In any event, D2 shall provide support and maintenance services to Licensee during the Warranty period in breadth and scope which is no less than the support and maintenance services described in this Article. D2 shall make available to LICENSEE the maintenance and support services according to the terms of this Article 6 for a minimum of five years after Acceptance of Licensed Technology. + + 6.2 Maintenance. Maintenance to be provided by D2 to LICENSEE shall include without limitation the following services; + + (i) D2 shall update and maintain the Licensed Technology throughout the term of this Agreement. It is intended that D2 shall release at least 1 Update or New Version release during each 12 month calendar year. Upon the releases of any Update or New Version of the Licensed Technology (including manuals), D2 shall promptly notify and deliver to LICENSEE such Update or New Version. + + (ii) D2 will initially deliver to LICENSEE one (1) copy of any Updates or New Versions to the Licensed Technology and one (1) set of corresponding manuals for each copy of the Licensed Technology for which LICENSEE has paid the appropriate development license fees and maintenance fees pursuant to Exhibit C as soon as such Updates or New Versions and corresponding manuals become available and shall maintain such Updates or New Versions throughout this agreement. + + 6.3 Error Correction. If D2 becomes aware of any Defect in the Licensed Technology, D2 shall promptly provide LICENSEE with written notice of such Defect. D2 shall have no obligation to actively monitor the Licensed Technology for Defects after such software has been accepted by LICENSEE. D2 shall work diligently to promptly correct Defects in accordance with the following schedule; "days" shall mean calendar days. + + ERROR PRIORITY (1) RESPONSE (2) CLOSURE (3) + + Emergency (A) 24 hours 7 days + + Critical (B) 2 days 14 days + +Software License D2 Technologies, Inc. and Maintenance Agreement August 4, 1997 CONFIDENTIAL + +7 + + Non-Critical (C) 30 days Next Update or New Version + + (1) Priority: + + -A- Catastrophic product or module Defects that do not have a viable detour or work around available. + + + + + + -B- Defects that have been substantiated as a serious inconvenience to LICENSEE or an End User. This includes any priority A Defect for which a viable detour or work around is available. + + -C- All other problems that LICENSEE and an End User can easily avoid for which there is no urgency for a resolution. + + (2) Response: Response consists of providing, as appropriate, one of the following to the LICENSEE: an existing correction; A new correction; a viable detour or work around; a request for more information to complete analysis of the problem, or a plan on how the problem will be corrected. + + (3) Closure: Closure consists of providing a final correction or work around of the problem including an Update and revised or new Documentation as necessary. + + If D2 fails to correct Defects according to the schedule specified in this Article 6, LICENSEE shall deduct from future runtime license fees, as specified in Exhibit C, a "late fee" for each day past the deadline in the schedule of this section. The "late fee" shall equal to 50% (fifty percent) of the runtime license fees paid to D2 for the previous two calendar quarters equally divided over 180 (one hundred eighty) days. In the event LICENSEE has selected the Buy-out option in the runtime license fee schedule of Exhibit C, then the "late fee" for each day past the deadline shall be 50% (fifty percent) of the Buy-out fee equally divided over 1095 (one thousand and ninety five) days; and this "late fee" shall be paid to LICENSEE each calendar month until the error is corrected either by D2 or LICENSEE. + + 6.4 Support. D2 will provide the following support to LICENSEE throughout the Warranty period and for those subsequent years for which support has been purchased by Licensee: + + (i) D2 will assist LICENSEE in determining if problems encountered by LICENSEE are caused by programming errors in the Licensed Technology. + +Software License D2 Technologies, Inc. and Maintenance Agreement August 4, 1997 CONFIDENTIAL 8 + + (ii) D2 will answer questions concerning the installation of Licensed Technology. + + (iii) D2 will assist LICENSEE in resolving LICENSEE's problems, if any, arising from the normal usage of the Licensed Technology. + + (iv) D2 shall appoint a qualified technical staff as the "Technical Contact" to co-ordinate all support and maintenance services. The "Technical Contact" shall be available to LICENSEE during D2's normal business hours; in the event that appointed "Technical Contact" is not available, a back-up "Technical Contact" shall be temporarily assigned and LICENSEE shall be notified. + + 6.5 Notification and Cooperation by LICENSEE. To obtain support from D2 under this Article 6, LICENSEE shall provide D2 with written notice which will contain a description of the problem for which LICENSEE is seeking support. D2 shall have no obligation to correct problems which are due to modifications to Licensed Technology performed by LICENSEE; provided, that if D2 agrees to correct such problems it shall charge its then current time and materials rates, which shall be payable by LICENSEE within thirty days after invoicing by D2. LICENSEE agrees to provide D2 with access to LICENSEE's equipment and computer systems on a temporary basis and as needed to allow D2 to reproduce, correct and verify the correction of the problem reported by LICENSEE or otherwise identified by D2. + +7. LIMITED SOURCE CODE LICENSE AND PROTECTION + + 7.1 Source Code delivery. D2 shall, after acceptance of Licensed Technology by LICENSEE and within fifteen days after receiving such a request from LICENSEE deliver a copy of the fully commented Source Code for the then current version of the Licensed Technology and information needed for compiling and building the Licensed Technology Object Code to LICENSEE. Thereafter, D2 shall automatically deliver a copy of the fully commented Licensed Source Code for the then current version of the Licensed Technology within fifteen days after the release of any Updates or New Versions of the Licensed Technology. + + 7.2 Source Code Access Conditions. The following events shall constitute "Source Code Access Conditions": (i) D2's insolvency, general assignment for the benefit of creditors, or ceasing to do business, or (ii) D2's failure or inability to meet its warranty, maintenance and support obligations under Article 6, or its warranty obligations under Article 8.3, within fifteen days after written notice by LICENSEE to D2 of D2's failure to meet such obligations, or (iii) termination of this Agreement by LICENSEE pursuant to Articles 9.3 and 9.4, or (iv) as needed by LICENSEE for fault isolation. + +Software License D2 Technologies, Inc. and Maintenance Agreement August 4, 1997 CONFIDENTIAL 9 + + 7.3 Use of Licensed Source Code. After "Source Code Access Conditions" is met, LICENSEE shall have the right to use, modify, reproduce and have reproduced Object Code from Licensed Source Code to develop, use, market, distribute, and to maintain and support the Licensed Technology in the Licensee Product. LICENSEE shall not have any right to develop new DSP technology or derivative DSP technology with the Licensed Source Code. + + 7.4 Confidentiality and security. + + (A) General. LICENSEE acknowledges and agrees that the Licensed Source Code constitutes the confidential and proprietary trade secrets of D2, and that LICENSEE's protection thereof is essential to this Agreement and + + + + + +a condition of LICENSEE's use and possession of the Licensed Source Code. LICENSEE shall retain in strict confidence any and all elements of the Licensed Source Code and use the Licensed Source Code only as expressly licensed herein. LICENSEE agrees that it will under no circumstances distribute or in any way disseminate or disclose the Licensed Source Code to third parties, except as expressly provided in this Article 7. LICENSEE shall be relieved of this obligation of confidentiality to the extent that such information was in the public domain at the time it was disclosed or has become in the public domain through no fault of LICENSEE. + + (B) Security. LICENSEE agrees to use the Licensed Source Code under carefully controlled conditions for the purposes set forth in this Agreement, and to inform all employees who are given access to the Licensed Source Code by LICENSEE that such materials are confidential trade secrets of D2 and are licensed to LICENSEE as such. LICENSEE shall restrict access to the Licensed Source Code to those employees and Contractors of LICENSEE who have agreed to be bound by a confidentiality obligation which incorporates the protections and restrictions substantially as set forth herein, and who have a need to know in order to carry out the purposes of this Agreement. D2 shall be made a third party beneficiary of any such agreements, and shall have the right to directly enforce the terms of those agreements, and of this Agreement, insofar as such enforcement relates to the Licensed Source Code. + + (C) LICENSEE agrees to notify D2 promptly in the event of any breach of its security under conditions in which it would appear that the Licensed Source Code were prejudiced or exposed to loss. LICENSEE shall, upon request of D2, take all other reasonable steps necessary to recover any compromised trade secrets disclosed to or placed in the possession of LICENSEE by virtue of this Agreement. The cost of taking such steps shall be borne solely by LICENSEE. + +Software License D2 Technologies, Inc. and Maintenance Agreement August 4, 1997 CONFIDENTIAL + +10 + + (D) Remedies. LICENSEE acknowledges that any breach of any of its obligations under this Article 7 is likely to cause or threaten irreparable harm to D2, and accordingly, LICENSEE agrees that in such event, D2 shall be entitled to equitable relief to protect its interest therein, including but not limited to preliminary and permanent injunctive relief, as well as money damages. + + (E) Hardware. + + (i) Two (2) computers, as identified in Exhibit E, may be used as the Development Computer and Back-up Computer. The Back-up Computer may be used as the Development Computer during any time when the Development Computer is inoperative because it is malfunctioning or undergoing repair, maintenance or other modification. + + (ii) LICENSEE may at any time notify D2 in writing of any changes, such as replacements or additions, that LICENSEE wishes to make to Development and Back-up Computers for specific Licensed Source Code. D2 will prepare an amended Exhibit E as required to cover such changes, and such changes shall become effective after execution of the amended Exhibit E by LICENSEE. + + (iii) Upon request, LICENSEE shall furnish to D2 a statement, certified by an authorized representative of LICENSEE, listing the location, type and serial number of all Development and Back-up Computers hereunder and stating that the use by LICENSEE of the Licensed Source Code subject to this Agreement has been reviewed and that the Licensed Source Code is being used solely on the Development Computer (or temporarily on Back-up Computer) for such Licensed Source Code in full compliance with the provisions of this Agreement. + + (F) Third Party Contractors. LICENSEE may appoint a third party contractor ("Contractor") to assist the LICENSEE in LICENSEE's modification of the Licensed Source Code as authorized hereunder; provided that any such Contractor's access to and use of the Licensed Source Code shall only be permitted pursuant to a signed written agreement between LICENSEE and such Contractor giving the Contractor rights no broader than those granted LICENSEE in this Agreement, but limited to the sole purpose of assisting the LICENSEE, and including provisions incorporating the additional requirements set forth below: + + (i) Any claim, demand or right of action arising on behalf of a Contractor from furnishing to it or use by it of Licensed Source Code shall be solely against LICENSEE, and LICENSEE hereby indemnifies D2 against any such claims. + + (ii) Contractor shall agree to the same responsibilities and obligations and other restrictions pertaining to the use of Licensed Source Code as those undertaken by LICENSEE under this Agreement. + +Software License D2 Technologies, Inc. and Maintenance Agreement August 4, 1997 CONFIDENTIAL + +11 + + (iii) Contractor may not retain any copy of the Licensed Source Code or any modification or derivative work thereof and, upon completion of the project for which Contractor was permitted access to the Licensed Source Code or termination of this Agreement, shall return or destroy (i) all copies of Licensed Source Code furnished to such Contractor or made by such Contractor and (ii) all copies of any modifications or derivative works made by such Contractor based on such Licensed Source Code copies stored in any computer memory or storage medium, and Contractor's computer shall be removed from Exhibit E if such computer was listed as a Development Computer. A writing executed by an officer of Contractor shall be provided to D2 certifying that the Contractor has returned or destroyed all copies of the Licensed Source Code in its possession or control. + + + + + + (iv) Unless Contractor obtains a license for the Licensed Source Code from D2, Contractor may not acquire any ownership interest in any modification or derivative work prepared by such Contractor based upon or using Licensed Source Code licensed to LICENSEE under this Agreement. + + (v) Copies of such agreements shall be provided to D2 on request; provided however, that portions of such agreements not required by this Article 7 may be deleted from such copies. + +8. REPRESENTATIONS AND WARRANTIES + + 8.1 By Both Parties. D2 warrants that it owns all rights, title, and interests to Licensed Technology listed as Basic Services in Exhibit A. LICENSEE and D2 each individually warrants that it (i) has all right, power and authority necessary to enter into this Agreement and to grant the rights granted herein; (ii) has obtained all approvals and authorizations that it is required to obtain in connection with this Agreement; and (iii) has not entered, and will not enter, into any arrangements or agreements inconsistent with this Agreement. + + 8.2 Additional D2 Warranties. D2 additionally warrants that it (i) is not aware of any pending or actual litigation which is likely to have a material adverse effect on the rights or obligations of LICENSEE under this Agreement; and (ii) is not aware of any claim or any basis for any claim that Licensed Technology, or LICENSEE's use of the Licensed Technology as contemplated herein, will infringe any patents, trade secrets of other intellectual property rights belonging to any third party. + + 8.3 Software Warranty. D2 warrants to LICENSEE that the media upon which the Licensed Technology is delivered to LICENSEE will be free from Defects in materials and workmanship, and that Licensed Technology shall meet and perform in accordance with D2's specifications on Exhibit A. D2 shall promptly correct any + +Software License D2 Technologies, Inc. and Maintenance Agreement August 4, 1997 CONFIDENTIAL + +12 + +errors in the Licensed Technology, or failures of the Licensed Technology according to the terms of Article 6 of this Agreement. D2's warranty and error correction obligations with respect to any portion of the Licensed Technology shall extend for a period (the "Warranty period") of one year commencing on acceptance of such portion of the Licensed Technology by LICENSEE. + + 8.4 Disclaimer of Other Warranties. THE REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN THIS ARTICLE 8 ARE IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW, STATUTORY OR OTHERWISE. D2 SPECIFICALLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE IN CONNECTION WITH THE LICENSED TECHNOLOGY. + +9. TERM AND TERMINATION. + + 9.1 Term. This Agreement shall become effective on the Effective Date and shall continue in effect until terminated in accordance with the provisions of this Article 9. + + 9.2 For Convenience. LICENSEE may terminate this Agreement upon ninety (90) days written notice. + + 9.3 Default. If either party defaults in the performance of any of its material obligations hereunder and if such default is not corrected within thirty (30) days after written notice thereof by the other party, then the nondefaulting party, at its option, may, in addition to any other remedies it may have, terminate this Agreement by giving written notice of termination to the defaulting party. + + 9.4 Survival. Articles 7.2, 7.3,7.4, 8, 9, 10, 11, 12, 13, 14 shall survive any termination or expiration of this Agreement. + +10. INDEMNIFICATION + + 10.1 By D2. D2 agrees to indemnify and hold LICENSEE harmless against any cost, loss, liability, or expense (including attorney's fees) arising out of any breach of D2's warranties hereunder, or out of third party claims against LICENSEE alleging that the Licensed Technology, or LICENSEE's use or distribution of the Licensed Technology as set forth in this Agreement, infringes any third party's patent, trade secret, copyright of other intellectual property right in any country, provided that LICENSEE shall (i) notify D2 promptly in writing of such claims, and (ii) give D2 sole control of the defense or settlement of such claims. D2 shall not be liable for any claims to the extent that such claims arise out of the LICENSEE's unauthorized modifications of the Licensed Technology, and not out of the Licensed Technology as delivered by D2 to LICENSEE. If the Licensed Technology, or any part thereof, is + +Software License D2 Technologies, Inc. and Maintenance Agreement August 4, 1997 CONFIDENTIAL + +13 + +adjudicatively determined to be, or in either party's reasonable opinion will be, the subject of any claim, suit or proceeding for infringement of any third party's patent, copyright or trade secret in any country, or if the distribution of use of the Licensed Technology is enjoined, then D2 may, at D2's sole option and expense, (i) obtain for LICENSEE and its distributors, resellers and customers the right to distribute or use the Licensed Technology under such third party patents, trade secrets, copyrights or other intellectual property rights, or (ii) replace the Licensed Technology with other software of equivalent or superior functionality, or (iii) suitably modify the Licensed Technology to avoid such infringement. In the event that D2 is unable to carry out the options set forth in (i), (ii) and (iii) of the proceeding sentence, at the option of Licensee D2 may terminate this Agreement and refund all amounts paid by LICENSEE to D2 hereunder; provided, that such termination shall have no effect on the rights of end users to use LICENSEE products, incorporating any + + + + + +Licensed Technology, which were acquired by such end users prior to such termination. + +11. LIMITATION OF LIABILITY + + IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR LOST PROFITS OR ANY CONSEQUENTIAL, SPECIAL, INCIDENTAL, OR INDIRECT DAMAGES OR SUCH OTHER PARTY, HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY, ARISING OUT OF THIS AGREEMENT. THESE LIMITATIONS SHALL APPLY NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED REMEDY. IN NO EVENT SHALL D2'S LIABILITY HEREUNDER EXCEED THE TOTAL AMOUNT PAID OR OWED BY LICENSEE TO D2 UNDER THIS AGREEMENT. + +12. CONFIDENTIALITY. + + 12.1 Confidential Information. As used in this Agreement, the term "Confidential Information" shall mean any information disclosed by one party to another pursuant to this Agreement which is marked as confidential or proprietary, or, if disclosed orally, is designated as confidential at the time of disclosure and is subsequently reduced to a writing which is marked as confidential or proprietary and is provided to the receiving party within thirty (30) days after such oral disclosure. + + 12.2 Confidentiality. Each party shall treat as confidential all Confidential Information of the other party, shall not use such Confidential Information except as set forth herein, and shall use reasonable efforts not to disclose such Confidential Information disclosed to it by the other party under this Agreement. Each party shall promptly notify the other party of any actual or suspected misuse or unauthorized disclosure of such other party's Confidential Information. + +Software License D2 Technologies, Inc. and Maintenance Agreement August 4, 1997 CONFIDENTIAL + +14 + + 12.3 Exception. Not withstanding the above, neither party shall have liability to the other party with regard to any Confidential Information of such other party which the receiving party can demonstrate: + + (i) was in the public domain at the time it was disclosed or has entered the public domain through no fault of the receiving party; + + (ii) was known to the receiving party, at the time of disclosure, as demonstrated by files in existence at the time of disclosure; + + (iii) was disclosed with the prior written approval of the disclosing party; + + (iv) was, is presently or may be in the future independently developed by the receiving party without any use of the Confidential Information of any other party, as demonstrated by files created at the time of such independent development; + + (v) became known to the receiving party, without restriction, from a source other than the disclosing party without breach of this Agreement by the receiving party and otherwise not in violation of the disclosing party's rights; + + (vi) has been disclosed to third parties by the disclosing party without restrictions similar to those contained in this Agreement; or + + (vii) is disclosed pursuant to the order or requirement of a court, administrative agency, or other governmental body; provided, however, that the receiving party shall provide prompt written notice thereof to the disclosing party to enable the disclosing party to seek a protective order or otherwise prevent or restrict such disclosure. + + 12.4 Return of Confidential Information. Upon expiration or termination of this Agreement each party shall upon request promptly return all tangible Confidential Information received from the other party. + + 12.5 Survival of Confidentiality Obligations. This Article 12 will survive the termination of this Agreement, for any item of Confidential Information, for five (5) years after the disclosure of such Confidential Information to the receiving party under this Agreement. + +13. CONFIDENTIALITY OF AGREEMENT. + + D2 and LICENSEE agree that the terms and conditions of this Agreement shall be treated as confidential and shall not be disclosed to any third party without the + +Software License D2 Technologies, Inc. and Maintenance Agreement August 4, 1997 CONFIDENTIAL + +15 + +prior written consent of the other party. Notwithstanding the statements above in this Article 13, any party may disclose any of the terms and conditions of this Agreement; + + (i) as required by any court of other governmental body; + + (ii) as otherwise required by law (including without limitation with regard to any registration statement filed by a party with the Securities and Exchange Commission); + + (iii) to legal counsel of the parties; + + + + + + (iv) in confidence, to accountants, banks, and financing sources, and other advisors or consultants of the parties; + + (v) in connection with the enforcement of this Agreement or rights under this Agreement; + + (vi) in confidence, in connection with an actual or proposed license, merger, acquisition, or similar transaction; + + (vii) which have been previously disclosed in a joint press release by the parties hereto, or + + (viii) in confidence, to a third party to the extent reasonable necessary to permit the consideration of a bona fide collaboration which would involve rights, obligations or limitations arising under this Agreement, provided that such collaboration is not prohibited under this Agreement. + + In the event of any disclosure pursuant to (i) or (ii) above, the disclosing party shall use all reasonable efforts to obtain confidential treatment of materials so disclosed. The parties shall in good faith consult regarding the text of any proposed public announcement regarding this Agreement or the terms and conditions hereof before such announcement is actually made. Any press release to be issued in connection with the terms and conditions of this Agreement must be approved in advance by both parties. + +14. EXPORT RESTRICTIONS + + LICENSEE's distribution of products incorporating Licensed Technology shall be subject to all United States laws and regulations governing the license and delivery of technology and products abroad by persons subject to the jurisdiction of the United States. LICENSEE shall not export any such products without first + +Software License D2 Technologies, Inc. and Maintenance Agreement August 4, 1997 CONFIDENTIAL 16 + +obtaining all required licenses and approvals from the appropriate government agencies. + +15. GENERAL + + 15.1 Governing Law. This Agreement shall be governed by and interpreted in accordance within the laws of the State of New York without reference to conflicts of laws provisions. + + 15.2 Venue. The parties agree that any litigation arising out of this Agreement shall be brought in the state courts in Delaware. + + 15.3 Partial Invalidity. If any provision in this Agreement shall be found or be held to be invalid or unenforceable in any jurisdiction in which this Agreement is being performed, then the meaning of said provision shall be construed, to the extent feasible, so as to render the provision enforceable, and if no feasible interpretation would save such provision, it shall be severed, solely in such jurisdiction, from the remainder of this Agreement, which shall remain in full force and effect. In such event, the parties shall negotiate, in good faith, a substitute, valid and enforceable provision, effective solely in such jurisdiction, which most nearly effects the parties' intent in entering into this Agreement. + + 15.4 Relationship of the Parties. D2 and LICENSEE are independent contractors under this Agreement. Nothing contained in this Agreement is intended to, nor is it to be construed so as to, constitute D2 and LICENSEE as partners or joint ventures with respect to this Agreement. Employees of any party remain employees of said party and shall at not time be considered agents of or to be obligated to render a fiduciary duty to the other party. + + 15.5 Modification. No alteration, amendment, waiver, cancellation or any other change in any term or condition of this Agreement shall be valid or binding on any party unless the same shall have been mutually assented to in writing by both parties. + + 15.6 Waiver. The failure of any party of enforce at any time any of the provisions of this Agreement, or the failure to require at any time performance by the other parties of any of the provisions of this Agreement, shall in no way be construed to be a present or future waiver of such provision, nor in any way affect the right of any party to enforce each and every such provision thereafter. The express waiver by any party of any provision, condition or requirement of this agreement shall not constitute a waiver of any future obligation to comply with such provision, condition or requirement. + +Software License D2 Technologies, Inc. and Maintenance Agreement August 4, 1997 CONFIDENTIAL + +17 + + 15.7 Assignment. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns. No party may assign any of its rights, obligations or privileges (except by operation of law or other corporate reorganization) hereunder without the prior written consent of the other party, which shall not be unreasonable withheld, provided, that any party shall have the right to assign its rights, obligations and privileges hereunder to a successor in business or an acquirer of all or substantially all of its business or assets to which this Agreement pertains without obtaining the consent of the other party. + + 15.8 Notices. Any notice required or permitted to be given by any party under this Agreement shall be in writing, shall be addressed to the President of D2, or to the President of LICENSEE, and shall be personally delivered or set by certified or registered letter, or by telecopy confirmed by registered or certified letter, to the receiving party at its address first set forth above, or such new address as may from time to time be supplied hereunder by the receiving party. Notices will be deemed effective upon receipt. + + + + + + 15.9 Force Majeure. Notwithstanding anything else in this Agreement, no default, delay or failure to perform on the part of any party shall be considered a breach of this Agreement if such default, delay or failure to perform is shown to be due to causes beyond the reasonable control of the party charged with a default, including, but not limited, causes such as strikes, lockouts or other labor disputes, riots, civil disturbances, actions or inactions of governmental authorities or suppliers, epidemics, war, embargoes, were weather, fire, earthquakes, acts god, acts of the public enemy or nuclear disasters; provided, that for the duration of such force majeure the party charged with such default must continue to use all reasonable efforts to overcome such force majeure. + + 15.10 Entire Agreement. The terms and conditions contained in this Agreement constitute the entire agreement between the parties and supersede all previous agreements and understandings, whether oral or written, between the parties hereto with respect to the subject matter hereof. + + IN WITNESS WHEREOF, the parties hereto have caused this agreement to be signed by duly authorized officers or representatives as of the date first above written. + +"LICENSEE" D2 TECHNOLOGIES, INC. + +- --------------------------------- ----------------------------------- + +BY: /s/ Dick Swee BY: /s/ David Y. Wong ----------------------------- ------------------------------- + +Software License D2 Technologies, Inc. and Maintenance Agreement August 4, 1997 CONFIDENTIAL + +18 + +PRINT NAME: Dick Swee PRINT NAME: David Y. Wong --------------------- ----------------------- + +TITLE: VP Engineering TITLE: President -------------------------- ------------------------------ + +Software License D2 Technologies, Inc. and Maintenance Agreement August 4, 1997 CONFIDENTIAL + +19 + + EXHIBIT A + + LICENSED TECHNOLOGY SPECIFICATION + +Basic Services: + +The Basics Services algorithm group shall include the following list of standard D2 products with LICENSEE required modifications as specified in the attached Specification and the Contract for Products and Services, dated August 6, 1997: + + DTMF Detection and Removal Algorithm 5007-54A Universal Tone Detection Algorithm 50030-54A Multifrequency Tone Detection Algorithm 50028-54A Tone Generation Algorithm 50015-54A Voice Activity Detection and AGC 50013-54A + +Software License D2 Technologies, Inc. and Maintenance Agreement August 4, 1997 CONFIDENTIAL + +20 + + Exhibit A continued. + +Detailed Signal Processing Algorithm Specification + +A.1 HDLC Communications + +Not included as Licensed Technology. + +A.2 Voice Activity Detection + +Voice Activity Detection (VAD) detects voice activity, adapts to background ambient or line noise as well as the presence of echo, classifies voice activity as "early" versus "sustained", and assigns an "effort level" to the speaker that is independent of network loss. + + + + + +This module is used to detect voice activity in the CP Detect state. + +A.2.1 Functional requirements: + +The Voice Activity Detector discriminates voice activity generated by a caller from background noise (acoustic and line noise) as well as echo and sidetones reflected back to the receive voice path. It also provides an "effort level" quantity that indicates the level of effort of the caller. The functional and performance requirements are specified to cover a wide range of applications, such as voice activated recordings (as in voice messaging), outbound call classification, digital speech interpolation (DSI), and voice conferencing. + +1. The Voice Activity Detector classifies every block of voice data (8 ms long) as "port active" (early detect), "speaker active" (port sustained), and "not active". + +2. It provides a measurement that approximates the level of effort exerted by the caller. Such an approximation is made by normalizing the short term RMS of the voice signal by a longer term RMS value. The "effort level" varies between -32 dB and 31 dB, and is at 0 dB when the speaker is speaking at his/her "normal" level. + +3. The Voice Activity Detector adapts to background noise up to -24 dBm. Adaptation is 200 ms when the noise level drops, and is approximately 1000 ms when noise rises. + +4. The Voice Activity Detector screens out sidetone or echo as speech up to an ERL of -26 dB. + +Software License D2 Technologies, Inc. and Maintenance Agreement August 4, 1997 CONFIDENTIAL 21 + +A.2.2 Performance Requirements: + +The accuracy of the voice Activity detector is measured by the rate of "false detection" (i.e. classifying noise or echo as voice activity) and "clipping" (i.e. classifying voice activity as noise or echo) under different ambient noise and echo conditions. "Port active" detection under different ambient noise conditions: + +1. No perceptible clipping at quiet to modest noise levels of -50 dBm to -40 dBm with nominal levels of speech activity (-20 dBm average power over 2 seconds of speech). No more than 5% of voice onsets is clipped for noisy conditions (noise level from -40 dBm to -30 dBm). + +2. No more than 1% of "silence" periods is detected as speech for the modest noise condition. No more than 2% of "silence" is detected as port active for noisy conditions. + +3. The performance goals above is met when noise levels change during the test. + +"Speaker active" detection under different ambient noise conditions: + +1. Speech activity that lasts more than tSUSTAIN is detected as "Sustained" or "Speaker Active". + +2. The clipping requirements is better than "Port Activity" detection. Fewer than 0.5% of onsets/hour (2.5 per hour) for modest noise condition (-45 dBm) and fewer than 2% (10 per hour) for high noise condition (-35 dBm) have perceptible clipping. + +3. False detection performance (i.e., detecting noise as "speaker active") exceeds those of "port activity" due to tSUSTAIN criteria. No more than 1% (36 seconds per hour) of noise segments is misclassified as "sustained" for modest noise conditions, and no more than 2% (72 seconds per hour) of "silence" is detected as port active for noisy conditions. + +"Port active" and "Speaker active" detection in the presence of echo: + +1. Less than 1% of residual echo is detected as "port active" - (i.e. 36 sec. per hour) during normal operation of canceller. + +2. Less than 0.1 % (i.e. 3.6 sec per hour) of residual echo is detected as "speaker active" or "port sustained" during normal operation of canceller. + +3. Clipping of input speech in the presence of echo is no higher than clipping in the presence of modest to high level of noise. + +Software License D2 Technologies, Inc. and Maintenance Agreement August 4, 1997 CONFIDENTIAL + +22 + +A.3 DTMF Detection + +A.3.1 Functional requirements: + +Table A-1 specifies the nominal frequencies for the DTMF digits that must be detected. + + -------------------------------------------------------------- Nominal High Group Frequencies (Hz) 1209 1336 1477 1633 -------------------------------------------------------------- Nominal 697 1 2 3 A + + + + + + Low Group 770 4 5 6 B Frequencies 852 7 8 9 C (Hz) 941 * 0 # D -------------------------------------------------------------- + + Table A-1: Nominal DTMF Frequencies + +1. Detect the presence of all 16 DTMF digits that are produced by different phones on the market under a broad range of network conditions. + +2. DTMF digit information is provided as soon as the minimum duration is met. This information is called leading edge detection. This allows the earliest possible response to the digit, such as stopping voice output. + +3. The trailing edge of a DTMF digit must be detected. This allows the system to delay any response (such as playing out voice) to the digit until the user has released the DTMF key. The criteria selected for trailing edge detection will debounce DTMF digits. + +4. The DSP reports leading and trailing edge in the 8 ms block that they are detected. DTMF events are not buffered. + +A.3.2 Performance requirements: + +Table A-2 consists of performance requirements taken from EIA-464A and Bellcore TR-TSY-000181. Also shown is D2's DTMF performance requirements, which is a superset of the EIA and Bellcore requirements. + +Software License D2 Technologies, Inc. and Maintenance Agreement August 4, 1997 CONFIDENTIAL + +23 + +- -------------------------------------------------------------------------------------------------------------------- Requirement - -------------------------------------------------------------------------------------------------------------------- Characteristic Bellcore EIA/TIA-464A D2 - -------------------------------------------------------------------------------------------------------------------- Frequency Deviation +/-1.5% must accept; +/-1.5% must accept; Configurable choice of +/-3.5% must reject +/-3.5% must reject four sets of must accept/must reject: +/-2.0% accept to +/-3.0% reject; +/-2.5% accept to +/-3.5% reject; +/-3.0% accept to +/-4.0% reject; +/-3.5% accept to +/-4.5% reject. - -------------------------------------------------------------------------------------------------------------------- Minimum Tone 40 ms must accept; 23 40 ms must accept Configurable from 24 Duration ms must reject to 80 ms - -------------------------------------------------------------------------------------------------------------------- Minimum Interdigital 40 ms 40 ms Configurable from 24 Interval to 80 ms - -------------------------------------------------------------------------------------------------------------------- Minimum Cycle Time 93 ms 93 ms Configurable from 48 to 160 ms - -------------------------------------------------------------------------------------------------------------------- Accept Levels 0 to -36 dBm must 0 to -25 dBm must 0 dBm to configurable accept, -55 dBm must accept minimum (-25 to -45 reject dBm range) - -------------------------------------------------------------------------------------------------------------------- Twist (ratio of high -8 to +4 dB -8 to +4 dB Separately group power to low) configurable positive and negative twists: +/- 4, 6, 8, 10, and 12 dB - -------------------------------------------------------------------------------------------------------------------- Bellcore talkoff tape Fewer than 670 total - Fewer than 20 talkoffs talkoffs; fewer than (with default 330 talkoffs of digits 0- configuration of 2.5% 9; fewer than 170 to 3.5% frequency talkoffs of signals * deviation; 40 msec min and #. tone duration; +/- 8 dB twists; -45 dBm min accept level) - -------------------------------------------------------------------------------------------------------------------- Mitel talkoff tape - - 0 talkoffs (with default configuration) - -------------------------------------------------------------------------------------------------------------------- SNR 23 dB 15 dB 15 dB - -------------------------------------------------------------------------------------------------------------------- Impulse Noise Fewer than 14 missed Fewer than 10 errors Pass both Bellcore and or split digits in in 10,000 tones for EIA EIA/TIA-464A Bellcore Impulse Noise test #1; fewer than 500 impulse noise Tape No. 201 errors in 10,000 tones requirements for test #2 - -------------------------------------------------------------------------------------------------------------------- + +Software License D2 Technologies, Inc. and Maintenance Agreement August 4, 1997 CONFIDENTIAL + +24 + + + + + + + +- ------------------------------------------------------------------------------------------------------------------- Echo 16 dB Signal-to-Echo 10 dB Signal-to-Echo Pass both Bellcore and ratio at 20 ms; 24 dB at ratio at 20 ms EIA/TIA-464A echo 45 ms requirements - ------------------------------------------------------------------------------------------------------------------- Dial Tone DTMF Detection in the DTMF Detection in the Pass both Bellcore and presence of dial tone presence of dial tone EIA/TIA-464A at -15 dBm per dial at -16 dBm per dial requirements for tone frequency tone frequency detection of DTMF digits in the presence of dial tone - ------------------------------------------------------------------------------------------------------------------- + + TABLE A-2: DTMF Performance Requirements + +Other performance requirements: + +1. A leading edge of DTMF digit is signaled during the block in which the minimum duration is met, and the trailing edge is signaled during the block in which the minimum debounce interval is met. + +2. Talk-down: DTMF detection must work reliably in the presence of echo (for the maximum allowable output voice level) and with varying levels of DTMF signals (due to network loss). D2's DTMF detector combined with the echo must meet the performance requirements of Figure A-I in the presence echo generated by playing pause-removed voice (male and female) at - 18 dBm ASL (averaged over 3 seconds) over a telephone circuit with 15 dB echo return loss (ERL). + + INSERT GRAPH + + Figure A-1: DTMF Talk-down Acceptance Curve + +3. Debounce test: Long tones (generated by "hard" key presses) must not be detected as multiple tones in the presence of echo interference or line noise. Combined with the echo canceller, the DTMF detector is required to reliably "debounce" all DTMF digits above -18 dBm in the presence of voice levels below -15 dBm (ASL) and a telephone circuit with echo return loss (ERL) of 15 dB. + +Software License D2 Technologies, Inc. and Maintenance Agreement August 4, 1997 CONFIDENTIAL + +25 + +4. Double-talk talk-off: Many voice processing hardware or semiconductor manufacturers significantly degrade the "talk-off' performance of their detector in the presence of voice echo or sidetone to achieve a high level of talk-down performance. This strategy is acceptable in a pure digit-in-voice-out scenario, but for voice conferencing or voice recognition applications, voice could be present in the both the transmit and receive path. In such cases, the DTMF detector must be very robust against "talk-off" in double-talk situations. The talk-off requirements for D2's DTMF detector under double-talk is fewer than 66 talkoffs for the Bellcore talk-off tape. + +A.4 Tone Generation + +The tone generation module can be programmed to generate any single, dual or amplitude modulated tone required to meet international telecommunications specifications. This functionality is provided by the GENF module, which produces the sum or product of two independently generated sine waves as its output. Each sine wave can be individually parameterized. + +A.4.l Functional requirements: + +The GENF module is designed to generate a wide range of DTMF, Call Progress Signals, MF Rl/R2, and miscellaneous tones. In order to meet or exceed international telecommunication specifications, GENF must meet or exceed the following functional requirements. + +1. Independent arguments shall be supplied for each frequency for dual tones that GENF generates. Single tones are generated by specifying that one of the dual tone's frequencies is 0 Hz. + +2. Independent arguments shall be supplied for the carrier and modulation frequencies for amplitude modulated tones that GENF generates. + +3. Arguments shall be supplied that allow the frequency of a tone to be set in the range of 0 to 4000 Hz in 1 Hz units. + +4. Arguments shall be supplied that allow the output power to be set in the range of +3 to -50 dBm in 0.5 dB steps. + +5. Arguments shall be supplied that allow an amplitude modulated tone's modulation percentage to be set in the range of 0 to 300% in 1% units. + +6. The tone duration (make time) shall be specified in 1 ms units. Tone durations shall be specified in the range of 0 to 8191 ms. + +Software License D2 Technologies, Inc. and Maintenance Agreement August 4, 1997 CONFIDENTIAL + + + + + +26 + +7. An unlimited tone duration shall be specified by setting the make duration to -1. + +8. The silence duration between tones (break time) shall be specified in 1 ms units. Silence durations shall be specified in the range of 0 to 8191 ms. + +9. An unlimited silence duration shall be specified by setting the make duration to -1 and setting both frequencies of a dual tone to 0 Hz. + +10. The GENF module shall allow tones to be generated that meet or exceed EIA/TIA-464 requirement for DTMF and call progress tone generation. + +11. The GENF module shall allow tones to be generated that meet or exceed CCITT Blue Book Volume VI Fascicle VI.4 recommendations Q.310-Q.490 requirements for MF R1 and R2 tone generation. + +12. The GENF module shall generate tones with one to three unique cadence pairs (on/off pairs). + +A.4.2 Performance Requirements + +1. Frequency accuracy shall exceed 1 Hz. 2. Level accuracy shall exceed 0.5 dB. 3. Timing information shall exceed 1 ms accuracy. + +A.5 Universal Tone Detector + +A.5.l Overview + +The Universal Tone Detector (UTD) is a high configurable tone detector. By changing parameters, this algorithm can classify a wide range of single and dual tone call progress signals generated in a wide variety of countries. + +A.5.2 General + +Since different tones need different detection heuristics, and tones may have multiple specifications, each tone is tagged with a tone category identifier. + +Software License D2 Technologies, Inc. and Maintenance Agreement August 4, 1997 CONFIDENTIAL + +27 + + ----------------------------------------------- Tone Category Call Progress Signal ----------------------------------------------- 1 Modem 2 FAX CNG 3 Audible Ringback 4 Busy 5 Reorder or Congestion 6 Number Unobtainable 7 SIT 8 Dial tone 9 Unknown Tone ----------------------------------------------- + + Table A-3: Tone Categories + +In addition to specifying a tone category, the parameters include a value that is returned to the application when the tone is detected. This parameter need not be unique. This allows multiple specifications to report the same tone event to the application. UTD is table driven. Using this approach, the tone detector searches parameter tables for a matching tone. When a tone matches, the tone code determines the heuristics necessary to completely classify the tone. Also, the tones must be specified in a way that a set of parameters corresponds to either a single tone, a dual tone, or an amplitude modulated tone. + + --------------------------------- Code Tone Type --------------------------------- 0 Single Tone 1 Dual Tone 2 Modulated Tone --------------------------------- + + Table A-4: Call Progress Tone Types + +A.5.3 General Functional Requirements + +UTD functionally combines a single tone detector and a dual/modulated tone detector into a single module. UTD combines the results of these detectors into a single result. UTD has the following requirements. + +1. The DSP shall indicate that the first ringback has started after at least 400 ms of ringback like signal has been processed, as long as no other tone type is early detected. If more than one type of tone is early detected, the first ringback reporting shall be delayed until either cadence information disqualifies the other types, or tone precedence is used as a 'tie-breaker'. + + + + + +Software License D2 Technologies, Inc. and Maintenance Agreement August 4, 1997 CONFIDENTIAL + +28 + +2. The DSP shall indicate ringback has stopped when ringback is no longer detected. + +3. The DSP shall indicate a busy tone has been detected after the requisite number of make and break intervals have been processed, and no other tone category is still a candidate for detection. + +4. The DSP shall indicate a reorder tone has been detected after the requisite number of make and break intervals have been processed, and no other tone category is still a candidate for detection. + +5. The DSP shall indicate a number unobtainable tone has been detected after the requisite number of make and break intervals have been processed, and no other tone category is still a candidate for detection. + +6. In the event that more than one tone is a candidate for detection, detection is delayed until all characteristics that may disqualify any of the candidates are tested (for example, waiting for multiple cadence pairs to occur). If there is still more than one potential tone after all differentiating features have been exhausted, then the tone with the highest precedence is detected. Also, if the tone ceases prior to singling out one candidate tone, then the tone with the highest precedence is detected. Precedence is shown in Table A-3. + +7. The DSP shall supply an early detect flag. This flag shall be valid after the detector has processed no more than 72 ms of a tone. If more than one tone category is early detected, then the early detect flag shall indicate the tone category with the highest precedence. + +8. The DSP shall indicate that a modem has been detected if a single tone falls within the specified frequencies for modem tones, the minimum make interval has been exceeded while the average tone power is in excess of the minimum power requirement, and no other tone category is still a candidate for detection. + +9. The DSP shall indicate that a FAX CNG tone has been detected if a single tone falls within the specified frequencies for a CNG tone, the requisite number of on/off cadences have been processed, and no other tone category is still a candidate for detection. + +10. The DSP shall indicate that a SIT tone has been detected if at least two of the three segments of possible SIT tones have been detected for at least the minimum interval in excess of the minimum power requirement. + +Software License D2 Technologies, Inc. and Maintenance Agreement August 4, 1997 CONFIDENTIAL + +29 + +11. The DSP shall indicate that an Unknown tone has been detected when it has been determined that a tone has been detected that falls within the specified frequencies for an Unknown tone, the minimum duration has been exceeded, and the tone does not match and other category tones. + +A.5.3.1 TONE DETECTOR PERFORMANCE REQUIREMENTS + +A.5.3.1.1 Single Tones + +There are four types of parameters that shall be used to control single tone detection. The variation of each parameter shall be limited by the constraints listed in Table A-5. + + ------------------------------ Minimum Maximum -------------------------------------------------------------- Frequency 300 Hz 3300 Hz -------------------------------------------------------------- Bandwidth 0 Hz 1800 Hz -------------------------------------------------------------- Duration 100 msec 32760 msec -------------------------------------------------------------- Minimum Power Level -45 dBm 3 dBm -------------------------------------------------------------- + + Table A-5: Single Tone Detection Constraints + +The frequency detection range shall be specified the Frequency and Bandwidth parameters. Figure A-2 shows the relationship of these parameters. Note that the bandwidth specification is symmetric about the center frequency. The Frequency and Bandwidth parameters define a "must detect" range. The detector shall not use frequency criteria to reject any tones which are within the range specified Frequency/Bandwidth parameters. Tones whose frequencies are outside but close to frequency range may be detected. + +Software License D2 Technologies, Inc. and Maintenance Agreement August 4, 1997 CONFIDENTIAL + + + + + +30 + + INSERT GRAPH + +Figure A-2: Frequency Domain Representation of tone parameters for a Single Tone + +If the Power Level of the detected parameter is greater than the minimum power specified by the parameters, the signal shall not be rejected by Power Level heuristics. Duration parameters are used to set the allowable duration of a tone. Minimum and maximum tone durations may be specified (make durations). Also, minimum and maximum silence durations between tones may be specified. + +A.5.3.1.2 Dual Tones + +Dual tones are created by summing two sinusoids. Since each tone can be isolated in the frequency domain, dual tones are specified as a pair of single tones. Parameters for each tone of a dual pair use the same constraints as single tones. Namely, frequency1 is the center frequency of the lower tone, and bandwidth1 specifies its frequency tolerance. The same is true for frequency2 and bandwidth2 for the high tone. Figure A-3 shows the definition of the frequency and bandwidth parameters for a dual tone. + + INSERT GRAPH + +Figure A-3: Frequency Domain Representation of Tone Parameters for a Dual Tone + +Software License D2 Technologies, Inc. and Maintenance Agreement August 4, 1997 CONFIDENTIAL + +31 + +Not all dual tones are detectable by UTD. A dual tone shall detected only when the difference between the two component frequencies is greater than 10 Hz and less than 230Hz. + +A.5.3.1.3 Amplitude Modulated Tones + +Amplitude modulated tones are created by multiplying two sinusoids. When analyzed in the frequency domain, a modulated tone looks like three tones. Figure A-4 shows the frequency spectrum for a modulated tone. + +The tone whose frequency is the average of the other tones is the carrier. The other two tones can be referred to as side lobes. For amplitude modulated tones, frequencyl and bandwidth1 specify the low sidelobe and its tolerance, while frequency2 and bandwidth2 specify the high sidelobe and its tolerance. + + INSERT GRAPH + + Figure A-4: Frequency Domain Representation of Tone Parameters for an Amplitude Modulated Tone + +As with dual tones, not all modulated tones will be detected by UTD. Modulated tones shall be detected if the difference between the carrier frequency and the sidelobes is between 10 Hz and 230 Hz. + +A.5.3.l.4 Precedence + +By assigning a detection precedence to the classification process, tone frequency ranges can overlap. When a tone's parameters fall into a range shared by two or more signals, the signal is classified as the one with the highest precedence. + +Software License D2 Technologies, Inc. and Maintenance Agreement August 4, 1997 CONFIDENTIAL + +32 + + ------------------------------------------- Precedence Call Progress Signal + + + + + + ------------------------------------------- 1 Modem 2 FAX CNG 3 Audible Ringback 4 Busy 5 Reorder or Congestion 6 Number Unobtainable 7 SIT 8 Dial Tone 9 Unknown Tone ------------------------------------------- + + Table A-6: Tone Detection Precedence + +Table A-6 shows the precedence of typical tones that the UTD module detects. Modem signals have the highest precedence, and Unknown tones have the lowest. Therefore, the frequency range of unknown tones can safely overlap the other tone ranges without causing tones to be misclassified. If the range for Unknown tones is allowed to be the maximum range allowed by the detector, any detected tone that is unclassified would be designated as Unknown. + +A.5.3.1.5 North American Call Progress Signal Detection + +Functional Requirements: + +The tables below specify the frequencies, power levels, and cadence of the Bellcore and EIA-464A call progress tones. + +- -------------------------------------------------------------------------------- Frequency (Hz) Power Level (dBm) - -------------------------------------------------------------------------------- Name 350 440 480 620 Per Frequency Combined - -------------------------------------------------------------------------------- Audible Ring X X -22.5 +/- 1.5 - -------------------------------------------------------------------------------- Busy X X -27 +/- 1.5 - -------------------------------------------------------------------------------- Dial Tone X X -17.5 to -15 -13 to -14.5 - -------------------------------------------------------------------------------- Intercept X X -20 +/- 1.5 - -------------------------------------------------------------------------------- Reorder X X -27 +/- 1.5 - -------------------------------------------------------------------------------- + + Table A-7: Call Progress Tone Frequency and Power Requirements + +Software License D2 Technologies, Inc. and Maintenance Agreement August 4, 1997 CONFIDENTIAL + +33 + +- ------------------------------------------------------------------------------- Audible ring (ring- repetition of the tone on for 0.8 to 2.2 seconds, and back) off for 2.7 to 4.4 seconds - ------------------------------------------------------------------------------- Busy repetition of the tone on for 0.5+/-0.05 seconds, and off for 0.5 +/-0.05 seconds - ------------------------------------------------------------------------------- Dial steady uninterrupted - ------------------------------------------------------------------------------- Intercept repetition of an alternating sequence, of the two frequencies each being on for 0.16 to 0.30 seconds with a total cycle time of 0.5 +/-0.05 seconds - ------------------------------------------------------------------------------- Reorder (fast busy) repetition of the tone on for 0.25+/-0.025 seconds, and off for 0.25+/-0.025 seconds - ------------------------------------------------------------------------------- + + Table A-8: Call Progress Tone Cadence + +Performance Requirements: + +1. Frequency Deviation: Even though the generator is required to meet a frequency tolerance per tone of +/-0.5%, the detector needs to allow for a wider frequency tolerance due to variations in generators and line distortions. The CP detector detects all tones whose component frequencies deviate less than 1% from nominal. + +2. Twist: The CP detector detects all tones whose twist is less than +/-4 dB. + +3. Dynamic Range: The CP detector exhibits a minimum dynamic range of 25 dB. + +4. Cadence: The CP detector must detect call progress tones whose cadence is within +/-10%. + +5. Talkoff: The CP detector makes no false detections in 12 hours of testing with voice at -15 to -18 dBm ASL. + +A.5.3.1.6 FAX CNG Tone Detection + +The standard connection protocol for automatic connection of a FAX modem requires that the calling FAX modem generate a calling tone (CNG). Hence for incoming calls, the EVP software has to detect a CNG signal. When CNG is detected, EVP alerts the Core Processor to redirect the call to a FAX machine or a FAX modem embedded within the call processing system. + +Software License D2 Technologies, Inc. + + + + + +and Maintenance Agreement August 4, 1997 CONFIDENTIAL + +34 + +Functional Requirements: + +Detect the presence of the FAX calling tone (CNG). A CNG signal is defined as follows. + + INSERT GRAPH + + Figure A-5: Fax calling tone (CNG) + + a) The CNG tone is within 38 Hz of nominal frequency. + + b) The timing tolerance of a CNG tone is +/-15%. + + c) The power of a CNG tone is between 0 and -43 dBm. + +Performance Requirements: + +1. The detector does not miss any CNG signals on a prerecorded tape containing 50 CNG tone samples collected from S different FAX machines. + +2. The detector does not miss any CNG signals from the same FAX machines connected to a local CO with a noise level of less than -45 dBm. + +3. The detector misses less than 0.5% of CNG signals (generated at -10 dBm) when compressed voice is output at a level of-15 dBm or less (average over 3 seconds) into a network whose ERL is greater than 15 dB. + +4. The detector does not falsely detect more than 1 CNG tone per 5 hours of voice (based on Bellcore recorded talk radio voice tapes.) + +A.5.3.1.7 Modem Tone Specification + +All answering modems that conform to the ITU V.25 answering sequence present a 2100 Hz tone 1.8 to 2.5 seconds after answering the telephone line. Figure A-6 and Figure A-7 show the timing of the answering tone (ANS). In Figure A-6, the 2100 Hz + +Software License D2 Technologies, Inc. and Maintenance Agreement August 4, 1997 CONFIDENTIAL + +35 + +tone reverses phase every [tau] intervals. These phase reversals disconnect echo cancellers and echo suppressors from the network. According to ITU G.164, phase reversal shall be accomplished such that the phase is within 180 +/-10 degrees in 1 ms and that the amplitude of the 2100 Hz tone is not more than 3 dB below its steady state value for more than 400 musec. + + INSERT GRAPH + + Figure A-6: Timing for Answering Modem with Phase Reversal + +A timing diagram for an answering modem without phase reversal is shown in Figure A- 7. The timing is identical with that of phase reversing tone except for the reversal timing. + + INSERT GRAPH + + Figure A-7: Timing for Answering Modem without Phase Reversal + +Table A-9 contains the nominal frequency, power, and duration requirements for + + ------------------------------------------------ Minimum Maximum Unit --------------------------------------------------------------------- Frequency 2085 2115 Hz --------------------------------------------------------------------- Duration 2.6 4.0 seconds --------------------------------------------------------------------- Power -18.0 -6.0 dBm0 --------------------------------------------------------------------- + +generating modem tones as derived from V.25 and G.164. + + Table A-9: Modem Tone Generation Requirements + + + + + +Performance Requirements: + +Software License D2 Technologies, Inc. and Maintenance Agreement August 4, 1997 CONFIDENTIAL + +36 + +1. The detector does not miss any modem answer tone on a pre-recorded tape containing 50 modem answer tone samples collected from 5 different data modems. + +2. The detector does not miss any modem answer tone signals from the same data modem connected via a local CO with a noise level of less than -45 dBm. + +3. The detector does not miss more than 0.5% of modem answer tones (generated at -10 dBm) when compressed voice is played at a level of -15 dBm (ASL) or lower into a network connection with ERL greater than 15 dB. + +4. The detector does not falsely detect the presence of a modem answer tone more than once per 5 hours of voice (using Bellcore recorded talk radio voice tapes). + +5. There is no talkdown performance requirement. The near end is always silent and does not interfere with far end modem ANS signals. + +6. There shall be fewer than 1 talkoff in 5 hours of call classification when the detector is programmed with the recommended parameters. Assuming that each call is resolved within an average time of 10 seconds, there shall be less than 1 talkoff in 1800 calls. + +A.5.3.1.8 Three Tone Sequences + +Most countries that generate Special Information Tones (SIT) use a three tone sequence. SIT sequences are generated by various central offices or common carrier switching points to indicate a problem with the dialed call. A SIT tone sequence generally precedes a recorded voice announcement such as "the number you have dialed is no longer in service..." and is provided specifically for the purpose of detection of the problem type by an automated device. + +There are two popular types of SIT sequences. The first type is used mainly in Europe. It consists of a sequence of three tones of identical durations. The second type is the one used in North America. There are several North American SIT sequences that are encoded using various combinations of frequency and duration for each of the three tones. The encoding has been standardized by Bellcore. + +Performance Requirements: + +1. The UTD shall handle both types of sequences. + +2. There is no talkdown performance requirement. The near end is always silent and does not interfere with far end SIT signals. + +Software License D2 Technologies, Inc. and Maintenance Agreement August 4, 1997 CONFIDENTIAL + +37 + +3. There shall be fewer than 1 talkoff in 5 hours of voice when the detector is programmed with the recommended parameters. Assuming that each voice call is has an average of 2 seconds of voice, there shall be fewer than 1 talkoff in 9000 calls. + +A.5.3.1.9 Unknown Tone + +Any single tone, dual tone, amplitude modulated tone or single tone sequence that is not classified as a CP, SIT, CNG or modem ANS tone, shall be reported as an unknown tone. + +Performance Requirements: + +1. Talkdown performance requirement [TBD] + +2. There shall be fewer than 1 talkoff in 5 hours of voice when the detector is programmed with the recommended parameters (minimum tone duration 400 ms). Assuming that each voice call is has an average of 2 seconds of voice, there shall be fewer than 1 talkoff in 9000 calls. + +A.6 Multifrequency Tone Detection (MFD) + +The MFD algorithm module detects the presence of Rl, R2 Forward, and R2 Backward Multi frequency (MF) tones under a broad range of network conditions and under international telecommunications specifications. + +A.6.1 Functional requirements: + +Table A-10, Table A-11, and Table A-12 specify the nominal frequencies for the MF digits that must be detected. + +- ----------------------------------------------------------------------- F1 (Hz) F2 (Hz) + + + + + + 900 1100 1300 1500 1700 ------------------------------------------------------------- 700 1 2 4 7 Spare 900 -- 3 5 8 Spare 1100 -- -- 6 9 KP 1300 -- -- -- 0 Spare 1500 -- -- -- -- ST - ----------------------------------------------------------------------- Table A-10: Nominal MF R1 Frequencies and corresponding digit definitions + +Software License D2 Technologies, Inc. and Maintenance Agreement August 4, 1997 CONFIDENTIAL + +38 + +- ----------------------------------------------------------------------- F1 (Hz) F2 (Hz) 1500 1620 1740 1860 1980 ------------------------------------------------------------- 1380 1 2 4 7 11 1500 -- 3 5 8 12 1620 -- -- 6 9 13 1740 -- -- -- 10 14 1860 -- -- -- -- 15 - ----------------------------------------------------------------------- + +Table A-11: Nominal MF R2 Forward Frequencies and corresponding combination numbers + +- ----------------------------------------------------------------------- F1 (Hz) F2 (Hz) 1020 900 780 660 540 ------------------------------------------------------------- 1140 1 2 4 7 11 1020 -- 3 5 8 12 900 -- -- 6 9 13 780 -- -- -- 10 14 660 -- -- -- -- 15 - ----------------------------------------------------------------------- + +Table A-12: Nominal MF R2 Backward Frequencies and corresponding combination numbers + +1. Be configurable to detect either R1, R2 forward, or R2 backward MF digits on a per-call basis. + +2. Detect the presence of all 15 R1, 15 R2 Forward, and 15 R2 Backward digits under a broad range of network conditions. + +3. MF digit information is provided as soon as the minimum duration is met. This information is called leading edge detection. This allows the earliest possible response to the digit, such as in compelled signaling. + +4. The trailing edge of a MF digit must be detected. This allows the system to delay any response (such as in compelled signaling) to the digit until it is removed. The criteria selected for trailing edge detection will debounce MF digits. + +5. The DSP reports leading and trailing edge in the 8 ms block that they are detected. MF events are not buffered. + +Software License D2 Technologies, Inc. and Maintenance Agreement August 4, 1997 CONFIDENTIAL + +39 + +A.6.2 R1 Detection Performance requirements: + +Table A- 13 consists of MF R1 tone detection performance requirements taken from CCITT/ITU Q310-Q331 and Bellcore TR-NWT-000506. Also shown is D2's MF R1 performance requirements, which is a superset of the CCITT and Bellcore requirements. + +- ------------------------------------------------------------------------------------------------------------------ Requirement - ------------------------------------------------------------------------------------------------------------------ Characteristic Bellcore CCITT/ITU D2 - ------------------------------------------------------------------------------------------------------------------ Frequency Deviation +/-(1.5% + 5 Hz) must +/-1.5% must accept Configurable choice of accept three sets of must accept frequency tolerance: +/-(1.5% + 5 Hz), +/-(1.5% + 10 Hz), +/-(1.5% + 15 Hz) - ------------------------------------------------------------------------------------------------------------------ Tone Duration KP signal >/= 54 ms >/=30 ms must accept Minimum duration is must accept; must reject steps, from 28 ms up. All others: >/=30 ms Can be configured for must accept; /=30 ms must accept; must reject - ------------------------------------------------------------- + + + + + +----------------------------------------------------- Minimum Interdigital Must accept Must accept Minimum interdigital Interval interdigital intervals interdigital intervals interval is configurable >/=25 ms. Must bridge >/=20 ms in 4 ms steps. Can be interdigital intervals configured for >/=20 ms - ------------------------------------------------------------------------------------------------------------------ Minimum Cycle Time Up to 10 pulses per - >10 pulses per second second (100 ms cycle ( time) - ------------------------------------------------------------------------------------------------------------------ Accept Levels 0 to -25 dBm must - Minimum power is accept configurable from -25 frequency - ------------------------------------------------------------------------------------------------------------------ Twist (ratio of high group power to low) accept accept accept - ------------------------------------------------------------------------------------------------------------------ SNR (white noise) 20 dB - 20 dB - ------------------------------------------------------------------------------------------------------------------ Impulse Noise Fewer than 14 missed - Fewer than 14 missed or split digits in or split digits in Bellcore Impulse Noise Bellcore Impulse Noise Tape No. 201 Tape No. 201 - ------------------------------------------------------------------------------------------------------------------ + +Software License D2 Technologies, Inc. and Maintenance Agreement August 4, 1997 CONFIDENTIAL + +40 + + - ------------------------------------------------------------------------------------------------------------------ Disturbing Frequencies Detection in the - Detection in the presence of 2A-B and presence of 2A-B and 2B-A modulation 2B-A modulating products 28 dB below products 28 dB below each frequency each frequency component level of the component level of the signals. signals - ------------------------------------------------------------------------------------------------------------------ + + Table A-13: MFD R1 Detection Performance Requirements + +A.6.3 R2 Detection Performance Requirements + +Table A- 14 shows the MF R2 tone detection performance requirements taken from CCITT/1TU Q400-490. The MFD module is required to pass all CCITT/ITU requirements. + +Software License D2 Technologies, Inc. and Maintenance Agreement August 4, 1997 CONFIDENTIAL + +41 + +- -------------------------------------------------------------------------------------------------------- Characteristic CCITT/ITU Requirement CCITT/ITU Requirement - -------------------------------------------------------------------------------------------------------- Frequency Deviation +/-10 Hz must accept Configurable choice of three - -------------------------------------------------------------------------------------------------------- sets of must accept frequency tolerance: +/-10 Hz +/-15 Hz +/-20 Hz + +- -------------------------------------------------------------------------------------------------------- Tone Duration Must reject signals - ----------------------------------------------------------------------------------------------- --------- Minimum response time for R2 detect delay + generate detect delay + generate delay compelled signaling delay detect delay + decision detect delay + decision delay + delay + generate delay - -------------------------------------------------------------------------------------------- ------------ Accept Levels -5 dBm0 to -31.5 dBm0 must Minimum power is detect; configurable from -25 dBm to -38.5 dBm0 must reject -45 dBm per frequency - -------------------------------------------------------------------------------------------------------- Twist (ratio of high group power to low) adjacent frequencies; for adjacent frequencies; non-adjacent frequencies; for non-adjacent frequencies 20 ddB twist must reject 20 dB twist must reject - -------------------------------------------------------------------------------------------------------- + +Software License D2 Technologies, Inc. and Maintenance Agreement August 4, 1997 CONFIDENTIAL + +42 + +- -------------------------------------------------------------------------------------------------------- + + + + + +Disturbing Frequencies Must not falsely detect due to Must not falsely detect due to any one or more valid R2 any one or more valid R2 frequencies at -55 dBm per frequencies at -55 dBm per frequency. frequency. In the presence of a valid R2 In the presence of a valid R2 tone, no missed detections and tone, no missed detections and no false detections due to any no false detections due to any of the remaining frequencies at of the remaining frequencies at 20 dB below the highest of the 20 dB below the highest of the MF tone pair. MF tone pair. Must not falsely Must not falsely detect due to: detect due to: 1. Any 1 or 2 pure sine waves, 1. Any 1 or 2 pure sine waves, each at -38.5 dBm0, 300-3400 each at -38.5 dBm0, 300-3400 Hz. Hz. 2. Any 1 or 2 pure sine waves, 2. Any 1 or 2 pure sine waves, each at -42 dBm, 300-3400 Hz. each at -42 dBm, 300-3400 Hz. 3. Forward detector: Any 2 3. Forward detector: Any 2 pure sine waves, each at -5 pure sine waves, each at -5 dBm, 330-1150 Hz or 2130-3400 dBm, 330-1150 Hz or 2130-3400 Hz. Hz. 4. Backward detector: Any 2 4. Backward detector: Any 2 pure sine waves, each at -5 pure sine waves, each at -5 dBm, 1300-3400 Hz. dBm, 1300-3400 Hz. - -------------------------------------------------------------------------------------------------------- Transmitted signal interference Must not falsely detect due to Must not falsely detect due to generation of outgoing MF generation of outgoing MF digits. digits. - -------------------------------------------------------------------------------------------------------- + + Table A-14: MFD R2 Detection Performance Requirements + +A.7 MFcR2 compelled signaling + +In order to pass the CCITT requirements for compelled signal timing, the following additional requirements are made on the MFD detector: + +1. The MFD detector shall detect the leading edge of an R2 digit after processing no more than 24 ms of the digit. + +2. The MFD detector shall detect the trailing edge of an R2 digit after processing no more than 16 ms of the silence following the digit. + +Software License D2 Technologies, Inc. and Maintenance Agreement August 4, 1997 CONFIDENTIAL + +43 + + EXHIBIT B + + LICENSEE PRODUCT DESCRIPTION + +Service Resource Module (SRM) for high density programmable switching systems. + +Software License D2 Technologies, Inc. and Maintenance Agreement August 4, 1997 CONFIDENTIAL + +44 + + EXHIBIT C + +DEVELOPMENT, MAINTENANCE, AND RUNTIME LICENSE FEE SCHEDULE + +DEVELOPMENT LICENSE FEES: LICENSED TECHNOLOGY FOR THE BASIC SERVICES SPECIFIED IN EXHIBIT A + +Development license fees are specified in PO #104962. + +50% of which has already been paid to D2 and the final 50% to be paid upon the delivery and acceptance of the Licensed Technology for Basic Services by Licensee in accordance with Article 4 of this Agreement. + +MAINTENANCE FEES: LICENSED TECHNOLOGY FOR THE BASIC SERVICES SPECIFIED IN EXHIBIT A + +The Maintenance Fee after the expiry of the Warranty period shall be $20,000 per year, starting from the date after the Warranty period (Contract Year), + + + + + +renewable at the end of each Contract Year. + +In the event that during the four consecutive calendar quarters which begin immediately after the start of a Contract Year, LICENSEE completes payments to D2 of one hundred thousand dollars in Runtime License Fees under this Agreement, D2 will apply a credit equaling to 100% of the Maintenance Fee against the Runtime License Fees of that Contract Year. + +In the event that LICENSEE exercises the Buy Out option for Runtime License Fees, there shall be no Maintenance Fee for the first three years after the expiry of the Warranty period. + +RUNTIME LICENSE FEES: LICENSED TECHNOLOGY FOR BASIC SERVICES SPECIFIED IN EXHIBIT A AND SIMPLE CONFERENCING TECHNOLOGY + +A runtime license fee shall be paid for each SRM in the Licensee Product (Exhibit B) which contains the Licensed Technology for Basic Services and simple conferencing which does not require network echo cancellation technology (Exhibit A) sold by LICENSEE. Licensee Products which do not run the Licensed Technology are not subject to runtime license fees. + +The runtime license fee is based on the number of ports of service that a customer can expect the SRM to provide. As such, this runtime license fee calculation may be used for an SRM with any number of DSP processors (DSPs), with any MIPS + +Software License D2 Technologies, Inc. and Maintenance Agreement August 4, 1997 CONFIDENTIAL + +45 + +performance rating, as long as it is from the TI TMS320C54x, TMS320C55x, or TMS320C6x processor family. + +Fee_per_SRM = Fee_per_Port * DSPs_per_SRM * Average_Ports_per_DSP + +Where: + + Fee_per_SRM is the runtime license fee for each SRM. Fee_per_Port is on Table 1. DSPs_per_SRM is the number of DSPs on each SRM. Average_Ports_per_DSP is defined below. + + ----------------------------------------------------------- total quantity of processors licensed Fee_per_port ----------------------------------------------------------- 1-5,000 $2.00 ----------------------------------------------------------- 5,001 - 25,000 $1.00 ----------------------------------------------------------- 25,001 - 50,000 $0.75 ----------------------------------------------------------- 5,001 - 75,000 $0.50 ----------------------------------------------------------- > 75,000 $0.00 ----------------------------------------------------------- + + Table 1. Fee per port + +If LICENSEE commits to purchase licenses for a minimum of 10,000 processors for the first year after first customer shipments, the fee_per_port will be reduced for $1.00 for the first 5,000 processors. + +The SRM will provide 5 Basic Services and simple conferencing (which does not require network echo cancellation): + + 1. DTG -- Digital Tone Generation (static channels and outpulsing) 2. CPA -- Call Progress Analysis (with Voice Activity Detection) 3.- DRC -- DTMF Detection 4. MFR(1) -- Multifrequency Reception (1) 5. MFCR2 -- Multifrequency Reception and Transmission, Compelled R2 + +To determine the Average ports per DSP, the completed software will be tested in a heavily-loaded VCO/20 to determine the maximum number of ports that a single DSP processor performing each of the Basic Services can reliably satisfy. This + +Software License D2 Technologies, Inc. and Maintenance Agreement August 4, 1997 CONFIDENTIAL + +46 + +maximum will be documented in Table 2 below, and will be encoded in software, to prevent a customer from exceeding it. + +This maximum will vary depending on the DSP processor speed, so a separate measurement will have to be done for SRMs containing faster processors. Due to system limitations, this number will never exceed 63. + +The number of ports supported for each of the Basic Services, per DSP processor, will be averaged (arithmetic mean) to create an average number of ports per DSP (Average_Ports_per_DSP). Because of the computational simplicity of the DTG Service, it will not be included in this calculation: + + Average_Ports_per_DSP = (#CPA + #DRC + #MFR1 + #MFCR2)/4 + +- -------------------------------------------------------------------------------- Service Predicted Measured Included in + + + + + + Maximum # Ports Maximum # Ports Average? - -------------------------------------------------------------------------------- DTG 63 To be measured Not included - -------------------------------------------------------------------------------- CPA 30 To be measured Included - -------------------------------------------------------------------------------- DRC 30 To be measured Included - -------------------------------------------------------------------------------- MFR1 30 To be measured Included - -------------------------------------------------------------------------------- MFCR2 30 To be measured Included - -------------------------------------------------------------------------------- + + TABLE 2. MEASURED PERFORMANCE OF SERVICES + +CAP: The runtime license fees is fully paid up after it reaches the CAP, which is the cumulative runtime license fees paid by LICENSEE for the first 75,000 processors as specified in Table 1 above. The CAP is cumulative across the Texas Instruments TMS320C54x, TMS320CSSx, and TMS320C6x, and other TI processors based on the same core processor architecture. + +BUYOUT OPTION: Within the Warranty period, LICENSEE may elect to pay D2 a sum of $1,400,000 as a one time paid-up runtime license fees for the Basic Services specified in Exhibit A. + +Software License D2 Technologies, Inc. and Maintenance Agreement August 4, 1997 CONFIDENTIAL + +47 + + EXHIBIT D + + MODEL LICENSEE AGREEMENT FOR LICENSEE PRODUCT + +SOFTWARE LICENSE + +Licensed Technology incorporated in LICENSEE Product, together with Updates and New Versions thereof, are provided to LICENSEE's Customer under a non-exclusive worldwide license subject to the following terms: + +1. LICENSEE's Customer shall have the right to distribute copies of the Licensed Technology to end users in Object Code form either directly or indirectly through others for use in connection with the LICENSEE Product. LICENSEE's Customer shall require that such end users agree to protect D2's and LICENSEE's intellectual property rights in the Licensed Technology as set forth in this LICENSEE's Customer Agreement. + +2. LICENSEE's Customer shall have the right to reproduce the Licensed Technology for distribution and make a reasonable number of copies of the Licensed Technology for backup or archival purposes. + +3. LICENSEE's Customer shall not have the right to modify, reverse engineer, decompile or derive Source Code from the Licensed Technology, nor shall LICENSEE's Customer permit any third party to do so. LICENSEE's Customer shall not have the right to disclose the Licensed Technology except as permitted herein. + +4. LICENSEE's Customer shall have the right to transfer a licensed copy of the Licensed Technology to a third party provided LICENSEE's Customer does not retain any copies of such licensed copy and the third party agrees to abide by the terms and conditions of this LICENSEE's Customer Agreement. All Licensed Technology must be transferred upon a change in title of any hardware in which it was installed. + +5. LICENSEE's Customer agrees that D2 or LICENSEE retain the entire right and title to Licensed Technology. + +6. The provisions of this Article (paragraphs 1 through 6 preceding) shall survive the termination or expiration of this LICENSEE's Customer Agreement. + +Software License D2 Technologies, Inc. and Maintenance Agreement August 4, 1997 CONFIDENTIAL + +48 + + EXHIBIT E + +1. Development and Back-up Computers + + Computer Manufacturer and Model Serial Number Dev/Backup + +(1) -- -- + +(2) -- -- + +(3) -- -- + +1. FORMAT OF Licensed Software Media + +(1) -- -- + +(2) -- -- + +(3) -- -- + +Date: + + + + + +Software License D2 Technologies, Inc. and Maintenance Agreement August 4, 1997 CONFIDENTIAL + +49 + + EXHIBIT F + + Acceptance Test Specification + +To be provided by D2 and LICENSEE within 90 days of effective date of this Agreement. + +Software License D2 Technologies, Inc. and Maintenance Agreement August 4, 1997 CONFIDENTIAL \ No newline at end of file diff --git a/full_contract_txt/SUNTRONCORP_05_17_2006-EX-10.22-MAINTENANCE AGREEMENT.txt b/full_contract_txt/SUNTRONCORP_05_17_2006-EX-10.22-MAINTENANCE AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..021f93cb53dc347e1cc3b196c9f1f75c8366707b --- /dev/null +++ b/full_contract_txt/SUNTRONCORP_05_17_2006-EX-10.22-MAINTENANCE AGREEMENT.txt @@ -0,0 +1,193 @@ +Exhibit 10.22 + +MAINTENANCE AGREEMENT + +THIS MAINTENANCE AGREEMENT (this "Agreement") is made and entered into as of the 28th day of March 2006 by THAYER EQUITY INVESTORS IV, L.P. (the "Investor"), in favor of U.S. BANK NATIONAL ASSOCIATION, a national banking association in its capacity as administrative agent (in such capacity and together with its successors and assigns in such capacity, the "Agent"), for itself and the lending institutions from time to time party to the Financing Agreement (defined below) (collectively and together with their respective successors and assigns, the "Lenders"). + +RECITALS: + +A. The Agent, Lenders and SUNTRON CORPORATION, a Delaware corporation, K*TEC OPERATING CORP., a Delaware corporation, SUNTRON GCO, L.P., a Texas limited partnership, EFTC OPERATING CORP., a Delaware corporation, SUNTRON-IOWA, INC., a Delaware corporation, CURRENT ELECTRONICS, INC., an Oregon corporation, RM ELECTRONICS, INC., a New Hampshire corporation, and SUNTRON-KANSAS, INC., a Delaware corporation (collectively, the "Borrowers") entered into a certain Financing Agreement bearing event date herewith (as the same may be amended, modified, restated or supplemented from time to time, the "Financing Agreement"). + +B. As a condition precedent to the effectiveness of the Financing Agreement, the Agent has required that the Investor execute and deliver this Agreement. + +D. The Investor is a shareholder of Suntron Corporation and, as such, expects to derive benefits from the Amendment and from the credit accommodations extended to the Borrowers pursuant to the Financing Agreement, and finds it in its best interests to execute and deliver this Agreement to the Agent. + +AGREEMENTS: + +NOW, THEREFORE, in consideration of the premises herein set forth and for other good and valuable consideration, the nature, receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows: + +1. Defined Terms. Capitalized terms not otherwise defined in this Agreement shall have the meanings given such terms in the Financing Agreement. For purposes of this Agreement, the following terms shall have the following meanings: + +"Required Capital Contributions" means some combination of (a) one or more unrestricted cash contributions to the capital of one or more of the Borrowers made by the Investor, and/or (b) one or more Qualified Subordinated Loans made by the Investor to one or more of the Borrowers, in each case as required under Section 2 below, in any or all cases, in an aggregate amount not to exceed $5,000,000 during the term of this Agreement. + +"Qualified Subordinated Loan" shall mean a loan or other financial accommodation (excluding interest paid in kind) extended by any Person to one or more of the Borrowers which is subordinated in right of payment and security to the Obligations pursuant to the terms of a written subordination agreement (substantially equivalent to the Subordination Agreement bearing even date herewith executed by the Investor in favor of the Agent), the proceeds of which loan or other financial accommodation have been delivered to the applicable Borrower(s) in the form of cash or cash equivalents. + +2. Contributions to Capital. The Investor agrees to make, and the applicable Borrower(s) agree(s) to accept, Required Capital Contributions in respect of the applicable 12 Month Period (or shorter period prior to July 3, 2006, as applicable) in an amount sufficient to cause (via an addition to Adjusted EBITDAR in the amount of such Required Capital Contributions) the Borrowers to comply with Section 2 of Schedule 10.28 to the Financing Agreement as of the last day of each Fiscal Quarter. Notwithstanding the foregoing or any other provision of this Agreement to the contrary, the Agent acknowledges and agrees that the Investor's obligation to make Required Capital Contributions hereunder shall be limited to an aggregate amount of $5,000,000 during the term of this Agreement. The Agent further acknowledges and agrees that, regardless of whether other "Events of Default" (as defined therein) have occurred and are continuing under the Financing Agreement, in no event shall the Investor be obligated to make any Required Capital Contributions hereunder if the Borrowers have fully complied with Section 2 of Schedule 10.28 to the Financing Agreement as of the last day of the applicable Fiscal Quarter for the applicable 12 Month Period (or shorter period prior to July 3, 2006, as applicable). + +3. Timing of Required Capital Contributions. The Required Capital Contributions shall be made within forty-five (45) days following the last day of each Fiscal Quarter, unless the last day of such Fiscal Quarter is the same as the fiscal year end, and in such case, ninety (90) days following such fiscal year end. + +4. Specific Performance and Liquidated Damages. The Investor acknowledges and agrees that if a Maintenance Event of Default (as defined in Section 10 below) has occurred and is continuing hereunder, the Agent, for itself and on behalf of the Lenders, shall have the non-exclusive right to + + + + + +obtain specific performance of the obligation of the Investor to make the Required Capital Contributions. If specific performance is not a remedy then available to the Agent and the Lenders for any reason, the Agent and the Lenders will suffer damages in an amount which, due to the special nature of the transaction contemplated by this Agreement, will be impracticable or extremely difficult to ascertain. Determination of such damages would necessitate determinations of value which would be based upon speculative determination of the value of assets of the Borrowers and the capacity of assets of the Borrowers to pay the Obligations and other Indebtedness of the Borrowers. Such damages are uncertain and incapable of estimation as of the date of this Agreement and shall remain so to the date of the occurrence of any Maintenance Event of Default hereunder. The Investor, the Agent and the Lenders hereby acknowledge and agree that (a) an amount equal to the lesser of (i) the full amount of each Required Capital Contribution that has not been made by the Investor and (ii) the then-outstanding balance of the Obligations, represents a reasonable estimate of the damages which the Agent and the Lenders will sustain upon the occurrence of an Maintenance Event of Default hereunder, and (b) such lesser amount will be the full, agreed and liquidated damages resulting from the occurrence of any Maintenance Event of Default hereunder. The payment of such amount is intended to constitute liquidated damages to the Agent and the Lenders and shall not be deemed to constitute a forfeiture or penalty. Upon receipt by the Agent, such amount may, in the sole discretion of the Agent, be applied to the Obligations when and as due; provided, however, that such amount, if so applied, may not be reborrowed by any Borrower under the Financing Agreement. + +5. Representations and Warranties. The Investor hereby represents and warrants as follows: + +(a) The execution, delivery and performance of this Agreement will not result in any violation of, or be in conflict with or constitute a default under, any agreement or under any law, statute, regulation or ordinance applicable to the Investor or result in the creation of any Lien upon any properties or assets of the Investor. + +2 + +(b) This Agreement has been duly executed and delivered by the Investor, and constitutes a legal, valid and binding obligation of the Investor, enforceable against the Investor in accordance with its&bbsp;terms. + +(c) No consent or authorization of, filing with or other act by or in respect of, any governmental authority and no consent of any other Person (including, without limitation, any creditor of the Investor) is required in connection with the execution, delivery, performance, validity or enforceability of this Agreement. + +6. Special Account. All Required Capital Contributions shall be made by Investor via wire transfer directly into the Special Account. + +7. Unconditional Obligations, Waivers of Defenses. The obligations of the Investor under this Agreement shall be absolute and unconditional under any and all circumstances, and shall not be to any extent or in any way discharged, impaired or otherwise affected except by performance in full. Without limiting the generality of the foregoing, such obligations shall not be affected by: (a) any lack of validity or enforceability of the Financing Agreement or any other Loan Document, (b) any amendment of or addition or supplement to, or any waiver or consent with respect to, the Financing Agreement or any other Loan Document, (c) any exercise or nonexercise of any right, power or remedy under or in respect of the Financing Agreement or any other Loan Document (d) any exchange, release or nonperfection of all or any portion of the Collateral, or any other action or omission to act with respect to all or any portion of the Collateral, or any release or amendment or waiver of or consent to departure from any guaranty for all or any of the Obligations, or any other release, extension, settlement, compromise, indulgence or other action, inaction, change, waiver or omission under or in respect of the Financing Agreement or any other Loan Document, (e) the value of all or any portion of the Collateral regardless of the manner of determining such value, (f) the subordination of the payment of the Obligations or any part thereof to the payment of any other Indebtedness which may at the time be due or owing by the Borrowers (or any of them) to the Agent or the Lenders or to any other Person, (g) any insolvency, bankruptcy, receivership, liquidation, reorganization, readjustment, composition, dissolution or other similar proceeding involving any Borrower or the Investor, (h) any "Event of Default" (as defined therein) under the Financing Agreement whether or not the Obligations shall have become, or been declared, due and payable (i) any claim, abatement, reduction, limitation, impairment, termination, set-off, defense, counterclaim or recoupment whatsoever or any right to any of the foregoing (including, but not limited to, claims, abatements, reductions, limitations, impairments, terminations, set-offs, defenses, counterclaims or recoupment for or on account of any past, present or future Indebtedness of any Borrower to the Investor or which may be asserted by any Borrower against the Agent or the Lenders, whether or not arising under this Agreement and whether or not arising out of any action or nonaction on the part of such Borrower, the Agent or the Lenders, including any disposition of any assets of such Borrower, pursuant to requirements of any governmental authority, actions of judicial receivers or trustees or otherwise, and whether or not arising from willful or negligent acts or omissions), (j) any failure on the part of any Borrower to perform its duties and obligations under this Agreement, (k) any other circumstances which constitutes or might be construed to constitute, an equitable or legal discharge of the Borrowers (or any of them) for the Obligations, or of the Investor under this Agreement, in bankruptcy or in any other instance, (l) any action or thing which might, but for this provision of this Agreement, be deemed a legal or equitable discharge of a surety or guarantor, other than irrevocable making of the Required Capital + + + + + +Contributions or the liquidated damage amount specified in this Agreement, or (m) any other circumstance, happening, condition or event whatsoever, whether or not similar to any of the foregoing; whether or not the Investor shall have notice or knowledge of any of the foregoing or shall have consented to any of the foregoing. + +3 + +8. Waivers. The Investor hereby irrevocably waives, to the extent that it may do so under applicable law: (a) any defense based on the adequacy of a remedy at law which may be asserted as a bar to the remedy of specific performance in any action brought against the Investor for specific performance of this Agreement by Agent, for itself and on behalf of the Lenders, or for the benefit of the Agent and the Lenders by a receiver or trustee appointed for any Borrower or in respect of all or a substantial part of any Borrower's assets under the bankruptcy or insolvency laws of any jurisdiction to which such Borrower is, or its assets are, subject, (b) all statutes of limitations as a defense to any action or proceeding brought against the Investor by the Agent, for itself and on behalf of the Lenders under this Agreement, to the fullest extent permitted by law, (c) any right the Investor may have to require the Agent or the Lenders to proceed against the Borrowers (or any of them), proceed against or exhaust any security held from the Borrowers (or any of them), or pursue any other remedy in the Agent's or the Lenders' power to pursue, (d) any defense based on any claim that the Investor's obligations hereunder exceed or are more burdensome than those of the Borrowers under the Financing Agreement or the other Loan Documents (as defined in the Financing Agreement), (e) any defense based on (i) any legal disability of any Borrower, (ii) any release, discharge, modification, impairment or limitation of the liability of any Borrower to the Agent or the Lenders from any cause, whether consented to by the Agent and/or the Lenders or arising by operation of law or from any bankruptcy or other voluntary or involuntary proceeding, in or out of court, for the adjustment of debtor creditor relationships ("Insolvency Proceeding") and (iii) any rejection or disaffirmance of this Agreement or the obligations hereunder, or the Obligations, or any portion thereof, or any security held therefor, in any such Insolvency Proceeding; (f) any defense based on any action taken or omitted by the Agent or the Lenders in any Insolvency Proceeding involving any Borrower, including any election to have the Agent's claims allowed as being secured, partially secured or unsecured, any extension of credit by the Agent and the Lenders to the Borrowers (or any of them) in any Insolvency Proceeding, and the taking and holding by the Agent and the Lenders of any security for any such extension of credit, (g) all presentments, demands for performance, notices of nonperformance, protests, notices of protest, notices of dishonor, notices of acceptance of this Agreement and of the existence, creation, or incurring of new or additional indebtedness, and demands and notices of every kind, (h) any defense based on or arising out of any defense that the Borrowers (or any of them) may have to the payment or performance of the Obligations or any part of them; and (i) any defense based on or arising out of any action of the Agent or the Lenders under this Agreement, the Financing Agreement or any of the Loan Documents (as defined in the Financing Agreement). + +9. Non-Reliance on Agent or Lenders. The Investor hereby warrants and represents to the Agent and the Lenders that: (a) the Investor now has, and will continue to have, independent means of obtaining information concerning the affairs, financial condition and business of each Borrower, (b) the Investor is familiar with the financial condition of each Borrower and has independently evaluated such financial condition, (c) the Investor is not in any way relying on any representations made by the Agent or the Lenders as to any Borrower, the Obligations, the Loan Documents or any collateral security therefore or other guarantors or endorsers, co-singers or sureties thereof or any related matters, and (d) the Investor has had an opportunity to review the Financing Agreement, the Amendment and all of the other Loan Documents. Neither the Agent nor the Lenders shall have any duty or responsibility to provide the Investor with any credit or other information concerning the affairs, financial condition or business of any Borrower which may come into the Agent's or any Lender's possession. + +10. Events of Default; Remedies. Any one or more of the following events shall constitute a "Maintenance Event of Default" under this Agreement: (a) if the Investor shall fail to pay, when and as due, any Required Capital Contribution and such failure shall continue for five (5) days; (b) if the Investor shall fail to perform any other of the Investor's obligations in this Agreement, and such failure shall continue for fifteen (15) days, (c) if any warranty or statement made or information provided + +4 + +by the Investor in connection with this Agreement is untrue or misleading in any material respect on the date made; (d) if Investor shall, at any time, fail to have committed capital in an aggregate minimum amount equal to $5,000,000 less the sum of all Required Capital Contributions (if any) actually made by the Investor during the term of this Agreement, as determined based on the most recent information made available by the Investor to the Agent pursuant to Section 20 below; or (e) the Investor shall become insolvent or generally fail to pay, or admit in writing its inability to pay, its debts as they mature or apply for or consent to the appointment of a trustee or other custodian for its properties, or make a general assignment for the benefit of creditors, or any bankruptcy, reorganization, debt arrangement or other proceeding under any bankruptcy or insolvency law, is instituted by or against the Investor. Upon the occurrence of any Maintenance Event of Default hereunder, the Agent, for itself and on behalf of the Lenders, may exercise any of its rights and remedies + + + + + +available at law or in equity (including, without limitation, the rights and remedies described in Section 4 above). The Investor and the Borrowers each expressly acknowledge and agree that the occurrence of any Maintenance Event of Default hereunder shall constitute an "Event of Default" (as defined therein) under the Financing Agreement. + +11. Expenses. The Investor agrees to pay or reimburse (or cause the Borrowers to pay or reimburse) the Agent and the Lenders on demand for all out-of-pocket expenses (including in each case all reasonable attorneys' fees and expenses of counsel) incurred by the Agent or the Lenders in connection with enforcement of this Agreement. + +12. Consideration and Reliance. The Investor acknowledges that the Agent and the Lenders have relied upon and will continue to rely hereafter upon the Investor's undertakings herein in making or maintaining the advances under the Financing Agreement. The Investor acknowledges that the making or maintenance of such advances by the Agent and the Lenders produces economic benefit to the Investor, and that the Investor will receive consideration as the result of the making or maintaining of such advances. + +13. Miscellaneous. This Agreement supersedes and merges into it all prior agreements and understandings between the Investor, the Agent and the Lenders, whether oral or written, with respect to the subject matter of this Agreement. No delay or failure by the Agent or the Lenders in the exercise of any right or remedy shall constitute a waiver thereof and no single or partial exercise by the Agent or the Lenders of any right or remedy shall preclude other or further exercise of any other right or remedy. This Agreement shall be binding upon the Investor and the Investor's successors, transferees and assigns and shall inure to the benefit of, and be enforceable by, the Agent, for itself and on behalf of the Lenders, and its successors, transferees, and assigns. Any invalidity or unenforceability of any provision or application of this Agreement shall not affect other lawful provisions and applications hereof and to this end the provisions of this Agreement are declared to be severable. + +14. No Third Party Beneficiaries. The Investor, the Agent and the Lenders have agreed that there are no intended third party beneficiaries of this Agreement, and specifically, that the Borrowers and their respective affiliates, successors and assigns are not third party beneficiaries. + +15. GOVERNING LAW. THE VALIDITY, CONSTRUCTION AND ENFORCEABILITY OF THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF MINNESOTA, WITHOUT GIVING EFFECT TO CONFLICT OF LAWS PRINCIPLES THEREOF. + +16. CONSENT TO JURISDICTION. AT THE OPTION OF&sbsp;THE AGENT, FOR ITSELF AND ON BEHALF OF THE LENDERS, THIS AGREEMENT MAY BE ENFORCED IN ANY FEDERAL COURT OR MINNESOTA STATE COURT SITTING IN HENNEPIN COUNTY OR + +5 + +RAMSEY COUNTY, MINNESOTA; AND THE INVESTOR, THE AGENT AND THE LENDERS CONSENT TO THE JURISDICTION AND VENUE OF ANY SUCH COURT AND WAIVE ANY ARGUMENT THAT VENUE IN SUCH FORUMS IS NOT CONVENIENT. IN THE EVENT ANY BORROWER OR THE AGENT, FOR ITSELF AND ON BEHALF OF THE LENDERS, COMMENCES ANY ACTION IN ANOTHER JURISDICTION OR VENUE UNDER ANY TORT OR CONTRACT THEORY ARISING DIRECTLY OR INDIRECTLY FROM THE RELATIONSHIP CREATED BY THIS AGREEMENT, THE OTHER PARTY AT ITS OPTION SHALL BE ENTITLED TO HAVE THE CASE TRANSFERRED TO ONE OF THE JURISDICTIONS AND VENUES ABOVE-DESCRIBED, OR IF SUCH TRANSFER CANNOT BE ACCOMPLISHED UNDER APPLICABLE LAW, TO HAVE SUCH CASE DISMISSED WITHOUT PREJUDICE. + +17. WAIVER OF TRIAL BY JURY. EACH OF THE INVESTOR, THE AGENT AND THE LENDERS IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT. + +18. Continuing Agreement; Reinstatement. This Agreement shall in all respects be a continuing agreement and, subject to Section 19 below, shall remain in full force and effect (notwithstanding, without limitation, the dissolution of the undersigned or that at any time or from time to time all of the Obligations may have been paid in full) until such time as (a) all of the Obligations (other than contingent indemnification obligations to the extent no unsatisfied claim giving rise thereto has been asserted) have been paid in full in cash, and (b) any commitment on the part of the Agent and the Lenders to extend further financial accommodations to the Borrowers (or any of them) has been terminated. This Agreement shall continue to be effective, or be reinstated, as the case may be, if at any time any payment, or any part thereof, on account of any of the Obligations is invalidated, declared to be fraudulent or preferential, set aside, rescinded or must otherwise be restored or returned by the Agent or the Lenders upon the insolvency, bankruptcy, liquidation, dissolution or reorganization of any Borrower or upon or as a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar officer for any Borrower, or any substantial part of its property, or otherwise, all as though such payment had not been made. + +19. Release of Agreement. The Investor may, at any time after March 31, 2007, and not more than once during any fiscal quarter of the Borrowers, request that the Agent release this Agreement by providing the Agent with written notice of the same (each, a "Release Request"). If such a request is made, the Agent agrees to release this Agreement on or before the Release Date (defined below) provided that all of the following conditions have been satisfied: + +(a) Unaudited financial statements of the Borrowers required under Section 8.5 of the Financing Agreement, for the period of four (4) + + + + + +consecutive Fiscal Quarters ending on, or most recently ended prior to, the date of such Release Request (or, if the Fiscal Quarter ending on or most recently ended prior to the date of such Release Request is the last Fiscal Quarter of any Fiscal Year of the Borrowers, the audited financial statements for the Borrowers required under Section 8.7 of the Financing Agreement the Fiscal Year ending on, or most recently ended prior to, the date of such Release Request) have been received by the Agent, and based on the information contained in such financial statements, the Adjusted Fixed Charge Coverage Ratio (as defined in the Financing Agreement) as of last day of the Fiscal Quarter ending on or most recently ended prior to, the date of such Release Request, for said period of four (4) consecutive Fiscal Quarters, is no less than 1.25 to 1.0; + +(b) no "Default" or "Event of Default" (as those terms are defined in the Financing Agreement) shall have occurred and be continuing as of the date of such Release Request; and + +6 + +(c) the Investor shall have provided the Agent, and shall have caused the Borrowers to have provided the Agent, with such information as the Agent may reasonably request to confirm that the conditions set forth in subsections (a) and (b) above have been satisfied. + +For purposes of this Section 19, the term "Release Date" shall mean the date which is five (5) days after the date on which the Agent has received all documentation and other information reasonably necessary to determine that all of the foregoing conditions have been satisfied and has confirmed such satisfaction to the Borrowers in writing. + +20. Evidence of Minimum Liquidity. The Investor agrees to deliver to the Agent, from time to time, promptly following Agent's request therefor, a sworn affidavit or other evidence reasonably acceptable to the Agent substantiating that the Investor has committed capital in an aggregate minimum amount equal to $5,000,000 less the sum of all Required Capital Contributions (if any) actually made by the Investor during the term of this Agreement. + +21. Termination. This Agreement shall terminate upon the earliest to occur of: (i) the date on which the aggregate Required Capital Contributions paid by the Investor, and received by the Borrowers, in accordance with the terms of this Agreement equal $5,000,000; (ii) the Release Date (as defined in Section 19) or (iii) payment in full, in cash, of all Obligations and the termination of the Financing Agreement; provided, however, that this Agreement shall continue to be effective, or be reinstated, as the case may be, if at any time the aggregate Required Capital Contributions paid by the Investor, and received by the Borrowers, in accordance with the terms of this Agreement is less than $5,000,000 and any payment, or any part thereof, on account of any of the Obligations is invalidated, declared to be fraudulent or preferential, set aside, rescinded or must otherwise be restored or returned by the Agent or the Lenders upon the insolvency, bankruptcy, liquidation, dissolution or reorganization of any Borrower or upon or as a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar officer for any Borrower, or any substantial part of its property, or otherwise, all as though such payment had not been made. + +[Remainder of page intentionally left blank; Signature page follows] + +7 + +IN WITNESS WHEREOF, this Agreement has been duly executed as of the day and year first above written. + +THAYER EQUITY INVESTORS IV, L.P. + +By: TC Equity Partners IV, L.L.C., its general partner + +By: Thayer Management Partners, L.L.C., its managing member + +By /s/ Douglas P. McCormick ------------------------------------- &sbsp; Its Managing Partner + +Address: + +c/o Thayer Capital Partners 1455 Pennsylvania Avenue, N.W. Washington, D.C. 20004 Attention: Rona Kennedy Facsimile No.: (202) 371-0391 + +Acknowledged and Accepted as of the day and year first written above: + +U.S. BANK NATIONAL ASSOCIATION, a national banking association + + + + + +By: /s/ Christopher J. Schaaf --------------------------------- Christopher J. Schaaf, Vice President + +8 + +ACKNOWLEDGMENT OF BORROWERS + +The undersigned, SUNTRON CORPORATION, a Delaware corporation, K*TEC OPERATING CORP., a Delaware corporation, SUNTRON GCO, L.P., a Texas limited partnership, EFTC OPERATING CORP., a Delaware corporation, SUNTRON-IOWA, INC., a Delaware corporation, CURRENT ELECTRONICS, INC., an Oregon corporation, RM ELECTRONICS, INC., a New Hampshire corporation, and SUNTRON-KANSAS, INC., a Delaware corporation (collectively, the "Borrowers"), hereby acknowledge receipt of a copy of the foregoing Maintenance Agreement (the "Agreement"). Capitalized terms not otherwise defined herein shall have the meanings specified in the Agreement. Each Borrower hereby waives notice of acceptance of the Agreement by the Agent and the Lenders and agrees to be bound by the terms and provisions thereof, to accept all payments of Required Capital Contributions due from the Investor pursuant to terms and provisions thereof, and to do every other act and thing necessary or reasonably appropriate to carry out such terms and provisions. Each Borrower represents and warrants to the Agent and the Lenders that no shareholder agreement, voting trust or other similar agreement binding upon such Borrower or the holder of any ownership interest in such Borrower will be violated by the payment of Required Capital Contributions by the Investor, or by the acceptance of the same by such Borrower, in each case pursuant to the terms and provisions of the Agreement. + +SUNTRON CORPORATION, a Delaware corporation + +By: /s/ Thomas B. Sabol ------------------------------------ Name: Thomas B. Sabol Title: Chief Financial Officer + +K*TEC OPERATING CORP., a Delaware Corporation + +By: /s/ James A. Doran ------------------------------------ Name: James A. Doran Title: Vice President + +SUNTRON GCO, L.P., a Texas limited partnership + +By: RodniC LLC, a Texas limited liability company, its general partner + +By: /s/ James A. Doran ------------------------------------ Name: James A. Doran Title: Chief Accounting Officer + +9 + +EFTC OPERATING CORP., a Delaware corporation + +By: /s/ James A. Doran ------------------------------------ Name: James A. Doran Title: Vice President + +SUNTRON-IOWA, INC., a Delaware corporation + +By: /s/ James A. Doran ------------------------------------ Name: James A. Doran Title: Vice President + +CURRENT ELECTRONICS, INC., a Oregon corporation + +By: /s/ James A. Doran + + + + + +------------------------------------ Name: James A. Doran Title: Vice President + +RM ELECTRONICS, INC., a New Hampshire corporation + +By: /s/ James A. Doran ------------------------------------ Name: James A. Doran Title: Vice President + +SUNTRON -KANSAS, INC., a Delaware corporation + +By: /s/ James A. Doran ------------------------------------ Name: James A. Doran Title: Vice President + +10 \ No newline at end of file diff --git a/full_contract_txt/SYKESHEALTHPLANSERVICESINC_04_24_1998-EX-10.14-OUTSOURCING AGREEMENT.txt b/full_contract_txt/SYKESHEALTHPLANSERVICESINC_04_24_1998-EX-10.14-OUTSOURCING AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..cf40487d8e499be80fe7442853f1ddd9d56bdc49 --- /dev/null +++ b/full_contract_txt/SYKESHEALTHPLANSERVICESINC_04_24_1998-EX-10.14-OUTSOURCING AGREEMENT.txt @@ -0,0 +1,103 @@ +1 EXHIBIT 10.14 + + OUTSOURCING AGREEMENT + + This Outsourcing Agreement (the "Agreement") is made and entered into as of January 1, 1998, by and between Sykes HealthPlan Services, Inc., a Florida corporation ("SHPS"), and HealthPlan Services, Inc., a Florida corporation ("HPS"). + + BACKGROUND + + HPS (or one of its affiliates other than SHPS) provides certain administrative services and Care Management Services (as defined below) to clients ("Clients") pursuant to the terms of agreements with such Clients (the "Client Agreements") as of January 1, 1998. HPS desires that SHPS provide, and SHPS is willing to provide, the Care Management Services to the Clients on behalf of HPS in accordance with the terms and conditions of this Agreement. Accordingly, in consideration of the mutual covenants and agreements set forth below, the parties agree as follows: + + TERMS + + 1. SERVICES PROVIDED; TERM AND TERMINATION + + 1.1 AGREEMENT TO OUTSOURCE CARE MANAGEMENT SERVICES. HPS agrees to outsource to SHPS, and hereby appoints SHPS as the exclusive provider of, Care Management Services to the Clients, subject to the terms and conditions set forth in this Agreement. SHPS shall provide the Care Management Services directly to the Clients in accordance with the terms of the Client Agreements. "Care Management Services" means the business of providing utilization review (which includes, but is not limited to, pre-admission certification, prior authorization, prospective length of stay approvals, second opinions, concurrent review and discharge planning), catastrophic medical case management, disease management and demand management (24 hours per day, 7 days per week) services to benefits payors and health providers, in all cases in accordance with the terms of the applicable Client Agreement. + + 1.2 TERM. The term of this Agreement will commence on January 1, 1998 (the "Effective Date") and will end on December 31, 1998. Unless either party gives the other at least ninety days' prior written notice that it has elected not to extend the term of this Agreement beyond December 31, 1998, the term of this Agreement will be automatically extended until December 31, 1999. Thereafter this Agreement will automatically be renewed for successive additional periods of one year, unless either party gives notice of cancellation on or before October 1 of any such year. + + 1.3 TERMINATION FOR CAUSE. In the event that either party materially or repeatedly defaults in the performance of any of its duties or obligations hereunder and does not substantially cure such default within thirty days after being given written notice specifying the default, or, with respect to those defaults which cannot reasonably be cured within thirty days, if the defaulting party fails to proceed promptly after being given such notice to commence curing the default and thereafter to reasonably proceed to cure the same, then the party not in default + +2 + +may, by giving written notice to the defaulting party, terminate this Agreement as of a date specified in such notice of termination. + + 2. PAYMENTS + + 2.1 FEES FOR CURRENT HPS CLIENTS. For each month during the term of this Agreement, HPS will pay to SHPS an amount equal to (i) eighty-two and one-half percent (82.5%) of the first $500,000 of Care Management Revenues (as defined below) during such month plus (ii) eighty percent (80%) of Care Management Revenues during such month in excess of $500,000. HPS shall pay such amount to SHPS within fifteen days following the end of the applicable month. At the time of payment HPS shall submit to SHPS a schedule for the month of payment setting forth the calculation of fees payable under this Section 2.1 and Care Management Revenues by Client. + + 2.2 CALCULATION OF CARE MANAGEMENT REVENUES. "Care Management Revenues" means, with respect to any month during the term, the revenues collected by HPS from Clients (or new Clients, as applicable) for the Care Management Services. Monthly revenues for Care Management Services shall be calculated based on a per employee per month fee equal to: (i) the amount (as of the date of this Agreement) set forth in the applicable Client Agreement (including hourly medical case management fees); or (ii) if the Client Agreement does not include a per employee per month fee for Care Management Services, $2.00 (this amount shall apply to all individual and small group business). Prospectively, for new Clients, SHPS and HPS shall agree to the rate HPS will offer to such new Clients (including hourly medical case management fees). + + 2.3 ALLOCATION OF COSTS. SHPS shall pay to HPS its allocable portion (which portion shall approximate HPS' direct costs chargeable to the business function) of depreciation, information system services, rent and utilities for the use by SHPS of HPS facilities in connection with its delivery of Care Management Services to the Clients. SHPS shall also reimburse HPS for direct costs for postage and telecommunications incurred by HPS in connection with such use by SHPS of HPS facilities. For convenience, the parties + + + + + +acknowledge that HPS will deduct amounts owed by SHPS under this Section 2.3 from the fees described in Section 2.1 and reflect such deductions in the schedule prepared by HPS. + + 2.4 NEW CLIENTS. In the event that HPS (or one of its affiliates other than SHPS) enters into an agreement to provide Care Management Services with a client which is not a Client as of the date of this Agreement (a "New Client"), SHPS shall provide such Care Management Services to the New Client in accordance with the terms of this Agreement. HPS will pay to SHPS all Care Management Revenues collected from such New Client, and SHPS will pay a commission to HPS equal to five percent (5%) of such amount received by SHPS from HPS pursuant to this Section 2.4. HPS shall pay such amount to SHPS within fifteen days following the end of each month. At the time of payment HPS shall submit to SHPS a schedule for the month of payment setting forth the calculation of fees payable under this Section 2.4 and Care + + 2 + +3 + +Management Revenues by New Client. For convenience, the parties acknowledge that HPS will deduct amounts owed by SHPS under this Section 2.4 from the amounts owed by HPS under this Section 2.4 and reflect such deductions in the schedule prepared by HPS. + + 2.5 REPORTS; AUDIT RIGHTS. For the purpose of determining the fees payable to SHPS under this Agreement, HPS shall preserve adequate records of Care Management Revenues by Client. SHPS shall have the right, upon reasonable prior written notice, to examine, copy and audit such records. Such audit shall be conducted at the location where such records are maintained and shall be at the expense of SHPS. Notwithstanding the foregoing, should any audit reveal that additional payments to SHPS are due which exceed five percent (5%) of the amount paid to SHPS for the period under audit, HPS shall pay SHPS on demand for the cost of such audit. + + 3. INDEMNIFICATION. Each party agrees to defend, save and hold harmless the other from and against all suits and claims that may be based on any injury to any person (including death) or to the property of any person or entity arising out of the operations of the indemnifying party or any willful act, negligence or omission of any of the indemnifying party's agents, servants or employees, provided that the indemnified party shall give notice promptly in writing of any suit or claim to the other party and that the indemnified party and its agents, servants and employees shall cooperate fully with the indemnifying party and its counsel. The indemnifying party shall, at its own cost and expense, pay all charges of attorneys and all costs and other expenses arising therefrom or incurred in connection therewith, provided that it retains the right, at its own expense, to handle any action hereunder by employing its own counsel. + + 4. MISCELLANEOUS + + 4.1 CONFIDENTIALITY. SHPS and HPS each agree that all information communicated to it by the other will be held in strict confidence and will be used only for purposes of this Agreement, and that no such information will be disclosed by the recipient party, its agents or employees without the prior written consent of the other party. + + 4.2 BINDING NATURE AND ASSIGNMENT. This Agreement shall be binding on the parties and their respective successors and assigns, but neither party may, or shall have the power to, assign this Agreement without the prior written consent of the other, which consent shall not be unreasonably withheld. + + 4.3 NOTICES. Wherever under this Agreement one party is required or permitted to give notice to the other, such notice shall be deemed given when delivered in hand, or when mailed by overnight delivery or United States mail, registered or certified, return receipt requested, postage prepaid, and addressed as follows: + + 3 + +4 + + In the case of SHPS: + + Sykes HealthPlan Services, Inc. 11405 Bluegrass Parkway Louisville, Kentucky 40299 Attention: David E. Garner, President + + In the case of HPS: + + HealthPlan Services Corporation 3501 Frontage Road Tampa, Florida 33607 Attention: Philip S. Dingle, Chief Counsel + + 4.4 COUNTERPARTS. This Agreement may be executed in several counterparts, all of which taken together shall constitute the single agreement between the parties. + + + + + + 4.5 HEADINGS. The section headings used in this Agreement are for reference and convenience only and shall not enter into the interpretation of this Agreement. + + 4.6 RELATIONSHIP OF PARTIES. SHPS shall be and remain an independent contractor with respect to the performance of its obligations under this Agreement. Nothing contained in this Agreement shall be deemed to constitute either of the parties a joint venturer or partner of the other. + + 4.7 APPROVALS AND SIMILAR ACTIONS. Where agreement, approval, acceptance, consent, or similar action by either party is required by any provision of this Agreement, such action shall not be unreasonably delayed or withheld. + + 4.8 SEVERABILITY. If any provision of this Agreement is declared or found to be illegal, unenforceable, or void, then both parties shall be relieved of all obligations arising under such provision, but only to the extent that such provision is illegal, unenforceable, or void. + + 4.9 WAIVER. No delay or omission by either party to exercise any right or power in this Agreement shall impair such right or power or be construed to be a waiver of such right or power. A waiver by either of the parties shall not be construed to be a waiver of any succeeding breach or of any other covenant contained in this Agreement. + + 4.10 AMENDMENTS. No amendment, change, waiver, or discharge of this Agreement shall be valid unless in writing and signed by an authorized representative of the party against which such amendment, change, waiver, or discharge is sought to be enforced. + + 4 + +5 + + 4.11 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement between the parties with respect to the subject matter of this Agreement and there are no representations, understandings or agreements relating to this Agreement which are not fully expressed in this Agreement. + + 4.12 GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws, other than choice of law rules, of the state of Florida. + + IN WITNESS WHEREOF, SHPS and HPS each caused this Agreement to be signed and delivered by its duly authorized officer, all as of the date first set forth above. + +SYKES HEALTHPLAN SERVICES, INC. HEALTHPLAN SERVICES, INC. + +By: By: ---------------------------- ---------------------------- Name: Name: -------------------------- -------------------------- Title: Title: ------------------------- ------------------------- + + 5 \ No newline at end of file diff --git a/full_contract_txt/SalesforcecomInc_20171122_10-Q_EX-10.1_10961535_EX-10.1_Reseller Agreement.txt b/full_contract_txt/SalesforcecomInc_20171122_10-Q_EX-10.1_10961535_EX-10.1_Reseller Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..a5a3407c60677040e26030cce82014b6f5dcd9bf --- /dev/null +++ b/full_contract_txt/SalesforcecomInc_20171122_10-Q_EX-10.1_10961535_EX-10.1_Reseller Agreement.txt @@ -0,0 +1,35 @@ +Exhibit 10.1 + +FORM OF SUB-RESELLER AGREEMENT + +Signature Page + +Reseller Full Legal Name Salesforce.org, a nonprofit public benefit corporation having its principal place of business at 50 Fremont Street, Suite 300, San Francisco, California 94105 + +This Form of Sub-Reseller Agreement (this "Sub-Reseller Agreement") is made and entered in by and between salesforce.com, inc., a Delaware corporation having its principal place of business at The Landmark @ One Market, Suite 300, San Francisco, California 94105 ("SFDC" or "Salesforce") and the Reseller named above and amends that certain Reseller Agreement between Salesforce and Reseller dated as of August 1, 2015, as previously amended (the "Agreement"). This Sub-Reseller Agreement is effective as of the later of the dates beneath the Parties' signatures below ("Sub-Reseller Effective Date"), provided, however, that the dates of the Parties' signatures are not separated by a period of time greater than ten (10) business days. If such period is greater than ten (10) business days then this Sub-Reseller Agreement shall be deemed null and void and to be of no effect. Capitalized terms not defined herein shall have the meanings given to them in the Agreement. + +The Parties, by their respective authorized signatories, have duly executed this Sub-Reseller Agreement as of the Sub-Reseller Effective Date. + +Salesforce.com, Inc. Reseller + +By: By: Name: Name: Title: Title: Date: Date: + +Source: SALESFORCE.COM, INC., 10-Q, 11/22/2017 + + + + + +Exhibit 10.1 + +Sub-Reseller Agreement Terms & Conditions + +1. Resale Rights. SFDC hereby appoints SUB-RESELLER ("Sub-Reseller") as a sub-reseller to whom Reseller may resell Services in accordance with Section 2(ii) of the Agreement, provided that Sub-Reseller may only resell such Services to Customer. Reseller must ensure that Sub-Reseller complies with the terms of the Agreement applicable to Reseller as if Sub- Reseller were an original party to the Agreement and any breach by Sub-Reseller of the Agreement will be deemed a breach by Reseller. Sub-Reseller is not be a third-party beneficiary of the Agreement. + +2. Effect of Sub-Reseller Agreement. Subject to the above modifications, the Agreement remains in full force and effect. + +3. Entire Agreement. The terms and conditions herein contained constitute the entire agreement between the Parties with respect to the subject matter of this Sub-Reseller Agreement and supersede any previous and contemporaneous agreements and understandings, whether oral or written, between the Parties hereto with respect to the subject matter hereof. + +4. Counterparts. This Sub-Reseller Agreement may be executed in one or more counterparts, including facsimiles or scanned copies sent via email or otherwise, each of which will be deemed to be a duplicate original, but all of which, taken together, will be deemed to constitute a single instrument. + +Source: SALESFORCE.COM, INC., 10-Q, 11/22/2017 \ No newline at end of file diff --git a/full_contract_txt/ScansourceInc_20190509_10-Q_EX-10.2_11661422_EX-10.2_Distributor Agreement.txt b/full_contract_txt/ScansourceInc_20190509_10-Q_EX-10.2_11661422_EX-10.2_Distributor Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..a7afbeed65d3098f9c976273c4b7919ce267a433 --- /dev/null +++ b/full_contract_txt/ScansourceInc_20190509_10-Q_EX-10.2_11661422_EX-10.2_Distributor Agreement.txt @@ -0,0 +1,133 @@ +Exhibit 10.2 + +IN ACCORDANCE WITH ITEM 601(b) OF REGULATION S-K, CERTAIN IDENTIFIED INFORMATION (THE "CONFIDENTIAL INFORMATION") HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM IF PUBLICLY DISCLOSED. THE CONFIDENTIAL INFORMATION IS DENOTED HEREIN BY [*****]. + +ZEBRA® PARTNERCONNECT PROGRAM + +ADDENDUM TO + +ZEBRA® PARTNERCONNECT DISTRIBUTOR AGREEMENT + +THIS ADDENDUM ("Addendum") is made on the 4th day of February 2019 ("Effective Date") between the following parties: Zebra Technologies International, LLC, with an office at 3 Overlook Point, Lincolnshire IL 60069 ("Zebra"); + +Zebra Technologies do Brasil - Comércio de Produtos de Informåtica Ltda., a company incorporated and organized under the laws of Brazil, with offices at Av. Magalhäes de Castro, 4800, sala 72-A, Cidade Jardim, CEP 05676-120, Säo Paulo, sp ("Zebra Brazil") + +Xplore Technologies Corporation of America, a company with its principal place of business at 8601 RR 2222, Building 2, Suite #100, Austin, Texas 78730, U.S.A. ("Xplore"); + +(collectively "Zebra") + +AND + +ScanSource, Inc., a company incorporated in South Carolina, with its registered office at 6 Logue Court, Greenville, South Carolina 29615 ("ScanSource"). + +ScanSource Latin America, Inc. a ScanSource Affiliate incorporated in Florida, whose registered business address is 1935 NW 87 Avenue, Miami, Florida 33172 ("ScanSource Latin America") + +ScanSource Brazil Distribuidora de Technologias, Ltda., a ScanSource Affiliate incorporated and organized under the laws of Brazil, with offices in the City of Säo José dos Pinhais, State of Paranå, at Avenida Rui Barbosa, 2529, Modulos 11 and 12, Bairro Jardim Ipé, CEP: 83055-320, enrolled with the Taxpayer Register (CNPJ/MF) under No. 05.607.657/0001-35 ("ScanSource Brazil") + +SCANSOURCE DE MEXICO S. DE R.L. DE C.V., a ScanSource Affiliate incorporated in Mexico, whose registered business address is Calle 4 No. 298, Colonia Franccionamiento Industrial Alce Blanco, Naucalpan de Juarez, Estado de México 53370 ("ScanSource Mexico") + +(Collectively "Distributor') + +"Zebra" and the "Distributor" are referred to collectively as 'Parties" and individually as a "Party". + +WHEREAS: (A) On February 12, 2014 the Parties entered into an agreement that was renamed, as of April 11, 2016, to: PartnerConnectTM EVM Distribution Agreement, (as amended) ("Distribution Agreement"), which relates to Zebra Enterprise Visibility and Mobility ('EVM") products and services, and which, as acknowledged by the Parties by entering into this Amendment, is in full force and effect and valid as when this Amendment is executed; + +(B) Distributor purchases Products from Zebra under the Distributor Agreement; + +(C)​ Zebra has recently completed the acquisition of Xplore, which transaction closed on August 14, 2018; + +(D) Zebra has expanded its products portfolio by adding the product families listed in Exhibit A, that as of the Effective Date hereof are branded Xplore or Motion Computing, thereto ("Xplore Products"); (E) Xplore, now a Zebra Affiliate, is the seller of Xplore Products; + +Source: SCANSOURCE, INC., 10-Q, 5/9/2019 + + + + + +(F) Xplore wishes to sell Xplore Products to Distributor and Distributor wishes to purchase such products from Xplore pursuant to the terms and conditions of the Distributor Agreement by entering into this Addendum; and + +(G) The Parties desire to amend the Distributor Agreement by adding Xplore Products and authorizing Distributor to purchase such products from Xplore for further resale to members of the Zebra PartnerConnect Program in the Market or Territory. THEREFORE, in consideration of the mutual covenants and promises, and subject to the terms and conditions of the Distributor Agreement, the Parties agree as follows: + +1. Expressions used in this Addendum shall have the same meanings given to them in the Distributor Agreement, unless the context requires otherwise. + +2. This Addendum automatically incorporates any future amendments to the Distributor Agreement and such amendments will be made part of this Addendum to the extent that the amendments do not conflict therewith, unless otherwise agreed in writing by the Parties. + +3. Commencing on the Effective Date hereof, Xplore Products will be considered for all intents and purposes of the Distributor Agreement as Products and the purchase and sale thereof will be conducted in accordance with, and be subject to the terms and conditions of the Distributor Agreement, unless otherwise set out in this section: + +a. The actual sale of Xplore Products (or any part thereof) is subject to Zebra obtaining the relevant regulatory approvals for the sale of Xplore Products in and into the Market or Territory (or any portion thereof) and shall commence only upon the attainment of such approvals. b. Zebra Consolidated Global Limited Warranty posted at www.zebra.com/partnerconnect-tc or any equivalent website thereof, will not apply to Xplore Products which shall carry the warranty posted at: https://support.xploretech.com/us/support/warranty-specifications/. + +c. Certain operational aspects relating to the purchase of Xplore Products, will be governed by the terms and conditions of Exhibit B, attached to this Addendum and incorporated therein by this reference. The terms of the Distribution Agreement will apply to all areas not covered by Exhibit B. + +4. By signing this Addendum, Xplore hereby agrees to be bound by the terms of the Distributor Agreement as a party thereto for the sole purpose of selling Xplore Products to Distributor. With the exception of the sale of Xplore Products, Xplore does not assume any obligations (prior, current or future) of Zebra under the Distributor Agreement. + +5. In the event of a conflict between the Distributor Agreement with this Addendum, the terms of this Addendum shall take precedence. + +6. Signature Counterparts. This Addendum and any additional amendments of addenda to the Distribution Agreement may be executed in two or more of counterparts, each of which shall be an original, but all of which together shall constitute one instrument. A facsimile copy or Computer image, such as a PDF or tiff image, of a signature shall be treated as and shall have the same effect as an original signature. In addition, a true and correct facsimile copy or computer image of this Addendum and any additional amendments of addenda thereto shall be treated as and shall have the same effect as an original signed copy of this document. + +7. Term and Termination. This Addendum may be terminated at any time by either Party in accordance with the termination provisions of the Distribution Agreement. The Addendum shall not have an Initial Period. + +8. Governing Law and Dispute Resolution. The terms of the Governing Law and Dispute Resolution provisions of the Distribution Agreement will apply to this Addendum. + +Source: SCANSOURCE, INC., 10-Q, 5/9/2019 + + + + + +IN WITNESS HEREOF, the Parties have executed this Addendum on the dates specified herein. + +ZEBRA TECHNOLOGIES INTERNATIONAL, LLC SCANSOURCE, INC. By: /s/ Alex Castaneda By: /s/ Brenda McCurry Name: Alex Castaneda Name: Brenda McCurry Title: VP NA Territory and Channel Sales Title: Vice President, Supplier Services Date: May 7, 2019 Date: 1/29/2019 + +ZEBRA TECHNOLOGIES DO BRASIL- COMÉRCIO DE PRODUTOS DESCANSOURCE LATIN AMERICA, INC. + +By: By: /s/ Marcelo Hirsch Name: Vanderlei Ferreira Name: Marcelo Hirsch Title: Director Title: Managing Director Date: May 8, 2019 Date: 2/7/2019 + +XPLORE TECHNOLOGIES CORPORATION OF AMERICA SCANSOURCE DE MEXICO S. DE R.L. DE C.V. + +By: /s/ Alex Castaneda By: /s/ Victor Perez Name: Alex Castaneda Name: Victor Perez Title: VP NA Territory and Channel Sales Title: Country Manager Date: May 7, 2019 Date: 26/2/19 + +SCANSOURCE BRASIL DISTRIBUIDORA DE TECHNOLOGIAS LTDA. By: /s/ Paulo Roberto Ferreira Name: Paulo Roberto Ferreira Title: Executive Director Date: 22/02/19 + +Source: SCANSOURCE, INC., 10-Q, 5/9/2019 + + + + + +EXHIBIT A + +Xplore Products and Distributor Upfront Discounts off List Price therefore + +[*****] [*****] [*****] L10 [*****] [*****] R12 [*****] [*****] F5 [*****] [*****] C5 [*****] [*****] B10 [*****] [*****] D10 [*****] [*****] Bobcat [*****] [*****] XC6 [*****] [*****] M60 [*****] [*****] Accessories & Services [*****] [*****] + +EXHIBIT B Operational Terms for Purchase of Xplore Products + +ARTICLE I. PURCHASE ORDERS AND STOCK ON HAND + +1. Issuance and Acceptance of Purchase Order. To order the Xplore Products, Distributor shall place a purchase order via sending an email to xpldistributors@zebra.com. Each purchase order shall specify the bill-to address, ship-to address, quantity and description of each Xplore Product ordered, the unit price for each Xplore Product, the requested ship date, the preferred means of delivery, and tax-exempt certifications, if any. Orders received without this information or which contain any discrepancy may be returned to Distributor for completion or revision as applicable. Each purchase order placed by Distributor, as well as each invoice sent by Xplore, shall be governed by the terms of this Addendum and the Distribution Agreement and any additional or different terms within the purchase order or invoice shall have no effect. Each purchase order for the Xplore Products shall be subject to Xplore's acceptance and, upon acceptance, Xplore shall confirm the purchase order and the Estimated Shipping Date with Distributor. Notwithstanding such acceptance, Xplore reserves the right where necessary to amend the Orders including without limitation part numbers, special pricing and Estimated Shipping Date, and may at its sole discretion require an amended Order from Distributor incorporating such changes. For the purposes of this Exhibit B, "Estimated Shipping Date" shall mean the estimated shipping date of an accepted purchase order. + +2. Purchase Order Rescheduling, Cancellation and Modification. Distributor has the right to cancel, reschedule or modify all or any portion of a purchase order that has been accepted by Xplore at no cost to Distributor only if such cancellation or modification request is made within [*****] business days of PO acceptance or rescheduling request is made at least [*****] business days prior to the most current Estimated Shipping Date for that purchase order. Distributor has the right to change the destination of all or any portion of a purchase order that has been accepted by Xplore at no cost to Distributor only if such change in destination request is made at least [*****] business days prior to the most current Estimated Shipping Date for that purchase order. Except as set forth above, purchase orders are non-changeable and non- cancellable by Distributor, once accepted by Xplore. + +Certain purchase orders, determined at Xplore's sole discretion, and generally of large volume and/or extended lead times, may be subject to alternative rescheduling, cancellation, and modification rights. Should such purchase orders be subject to alternative rights, Xplore shall inform Distributor of alternative rights prior to order acceptance. Distributor will then have [*****] business days to accept, or reject, the alternative terms of Xplore for that certain purchase order. If Distributor rejects such alternative terms, the purchase order will not be accepted by Xplore. + +3. Product Allocation. If for any reason, Xplore's production is not on schedule, Xplore may, at its sole and absolute discretion, allocate available inventory to Distributor and make shipments in accordance with Zebra's then current processes. + +Source: SCANSOURCE, INC., 10-Q, 5/9/2019 + + + + + +4. Stock on Hand. Distributor shall use commercially reasonable efforts to maintain thirty (30) days of stock in Distributor's inventory to support sales. Xplore acknowledges that from time to time, Distributor's inventory levels may fall below the thirty (30) days goal that is agreed upon by both Parties. If inventory levels fall below the thirty (30) day goal for more than sixty (60) consecutive days, Xplore, upon written notice to Distributor, shall replenish the stock to an amount agreed by both Parties. + +5. Product Return and Stock Rotation. The terms of Section 3 of Schedule 2 of the Distribution Agreement will apply to Xplore Products, provided however that stock rotation allowance for Xplore Products will be based on the net dollar value of Distributor's purchases in each calendar quarter of Xplore Products and such allowance will be calculated separate and apart from all other Products purchased by Distributor during such period. + +ARTICLE II. DELIVERY OF PRODUCTS + +1. Shipping Terms. Notwithstanding anything to the contrary contained in the Distribution Agreement, and unless notified by Xplore otherwise, shipping terms for Xplore Products will be Delivery Duty Paid (DDP) INCOTERMS® 2010, whereby Distributor's price, includes all costs of delivery, insurance, import and / or export duties and tariffs. Such prices are exclusive of all federal, state, municipal or other government excise, sales, use, occupational or like taxes in force, and any such taxes shall be assumed and paid for by Distributor in addition to its payment for the Xplore Products. Title and risk of loss to Xplore Products shall pass to Distributor upon delivery to Distributor, as indicated in the Proof of Delivery (PoD) documents. [*****] + +1. At Distributor's request, Xplore may deliver Xplore Products directly to Program Members or their respective End Users on behalf of Distributor, and in such instances title and risk of loss will pass to Distributor upon delivery to the applicable recipients, as indicated on the PoD documents. Some exclusions may apply, including countries not served by Xplore shipping and importing methods, and/or countries where Xplore Products, are not certified for resale and/or use. + +1. Proof of Delivery ("POD"). Xplore shall provide to Distributor, at no charge, a means for confirming proof of delivery for Xplore Product shipments when requested by Distributor. Xplore shall provide packing slips for all shipments. + +Source: SCANSOURCE, INC., 10-Q, 5/9/2019 \ No newline at end of file diff --git a/full_contract_txt/ScansourceInc_20190822_10-K_EX-10.38_11793958_EX-10.38_Distributor Agreement1.txt b/full_contract_txt/ScansourceInc_20190822_10-K_EX-10.38_11793958_EX-10.38_Distributor Agreement1.txt new file mode 100644 index 0000000000000000000000000000000000000000..381d0594136edcb7944155291bec264d78f737e7 --- /dev/null +++ b/full_contract_txt/ScansourceInc_20190822_10-K_EX-10.38_11793958_EX-10.38_Distributor Agreement1.txt @@ -0,0 +1,745 @@ +Exhibit 10.38 + +IN ACCORDANCE WITH ITEM 601(b) OF REGULATION S-K, CERTAIN IDENTIFIED INFORMATION (THE "CONFIDENTIAL INFORMATION") HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM IF PUBLICLY DISCLOSED. THE CONFIDENTIAL INFORMATION IS DENOTED HEREIN BY [*****]. + +CISCO SYSTEMS, INC. NONEXCLUSIVE VALUE ADDED DISTRIBUTOR AGREEMENT + +This Nonexclusive Value Added Distributor Agreement ("Agreement"), between ScanSource, Inc., a South Carolina corporation, with its principal place of business at 6 Logue Court, Greenville, South Carolina, 29615 ("Distributor"), and Cisco Systems, Inc., a California corporation with its principal place of business at 170 West Tasman Drive, San Jose, California 95134 - 1706, ("Cisco") is entered into as of the date last written below ("the Effective Date"). + +This Agreement consists of this signature page and the following attachments, each of which is incorporated into this Agreement by reference: + +1. Nonexclusive Value Added Distributor Agreement Terms and Conditions 2. EXHIBIT A: Territory 3. EXHIBIT B: Value Added Distributor Support Exhibit 3.1 Appendix 1: Cisco Problem Prioritization and Escalation Guideline 4. EXHIBIT C: Software License Agreement 5. EXHIBIT D: Distributor Freight Policy 6. EXHIBIT E: Affiliate List 7. EXHIBIT F: Software Transfer and Relicensing Policy 8. EXHIBIT G: End of Life Policy + +This Agreement is the complete agreement between the parties hereto concerning the subject matter of this Agreement and replaces any prior or contemporaneous oral or written communications between the parties. In the event of conflict between the terms of this Agreement and the terms of an Exhibit hereto, the terms of the Exhibit shall govern. There are no conditions, understandings, agreements, representations or warranties, express or implied, which are not specified herein. This Agreement may only be modified by a written document executed by the parties hereto. + +IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed. Each party warrants and represents that its respective signatories whose signatures appear below have been and are on the date of signature duly authorized to execute this Agreement. + +ScanSource,Inc. ("Distributor") Cisco Systems, Inc. ("Cisco") By: /s/ Jeffrey E. Yelton By: /s/ Frank A. Calderon Name: Jeffrey E. Yelton Name: Frank A . Calderon Title: VP Merchandising Title: VP, WW Sales Finance + +Date: 1/19/07 Date: January 22, 2007 + +Source: SCANSOURCE, INC., 10-K, 8/22/2019 + + + + + +Exhibit 10.38 + +NONEXCLUSIVE VALUE ADDED DISTRIBUTOR AGREEMENT TERMS AND CONDITIONS + +1.0 DEFINITIONS. + +Affiliate(s) are the entities listed on Exhibit E to this Agreement that are either business units of Distributor (and therefore wholly-owned and a part of Distributor) or are wholly-owned subsidiaries of Distributor, but in either case, only for so long as ownership remains as defined in this provision. + +Cisco Quarter shall mean Cisco's fiscal quarters (August 1-October 31; November 1-January 31; February 1-April 30; and May 1-July 31). + +Documentation shall mean user manuals, training materials, Product descriptions and specifications, technical manuals, license agreements, supporting materials and other printed information relating to any Product, whether distributed in print, in electronic form, or in CD-ROM or video format. + +End User is the final purchaser or licensee who has acquired Products for its own internal use and not for resale, remarketing or redistribution. An entity that performs stocking, sparing or warehousing activities for third parties or procures Cisco Products, Services or Software for delivery to third parties is not an End User. + +Global Price List means a complete listing of those Cisco products, services, including products and services which Cisco may make available to Distributor at its sole discretion, and associated prices. + +Hardware is the tangible product made available to Distributor. + +Major Release or New Release means a release of Software which is designated by Cisco as a change in the ones digit in the Software version number [(x).x.x]. + +Non-Genuine Products are any and all products: (i) to which a Mark or other Cisco trademark or service mark has been affixed without Cisco's consent; (ii) that have not been manufactured by Cisco or Cisco Technologies, Inc. ("CTI") or by a licensed manufacturer of either Cisco or CTI in accordance with the applicable license; or (iii) are produced with the intent to counterfeit or imitate a genuine Cisco Product + +Obsolete Product shall mean any Product that is removed from the then-current Value Added Distributor Price List. + +Purchase Order is a written or electronic order from Distributor to Cisco for Hardware, Software or Services to be purchased, licensed or provided under this Agreement. + +Product means, individually or collectively as appropriate, Hardware, licensed Software, Documentation, developed products, supplies, accessories, and goods to the foregoing, listed on the then-current published Global Price List. + +Reseller means an authorized reseller of Distributor that meets Cisco's then-current requirements for resellers, including, without limitation, the requirements set out in Section 26.0 of this Agreement. In the event Cisco enters into authorization agreements whereby Cisco authorizes particular resellers to purchase Products or Services from Distributor and to resell Products or Services to End User, then "Reseller" shall mean a reseller that is a party to such an authorization agreement. + +Services means Cisco's SmartNet family of packaged service offerings, as well as such other service offerings as Cisco makes available for purchase by Distributor on Cisco's Wholesale or Global Price List. + +Software is the machine readable (object code) version of the computer programs listed from time to time on the Wholesale or Global Price List and made available by Cisco for license by Distributor, and any copies or Updates thereof. Cisco reserves the right, during the term of this Agreement, to license and distribute items of Software from time to time. Such items of Software may be licensed under additional or different policies and license terms, which will be made available to Distributor. Notwithstanding the use of the term "purchase" to refer to any item of Software comprising or included within a Product, Cisco and Distributor agree that all Software provided by Cisco to Distributor under this Agreement is licensed by Cisco to Distributor rather than purchased by Distributor from Cisco. + +Source: SCANSOURCE, INC., 10-K, 8/22/2019 + + + + + +Exhibit 10.38 + +Territory is comprised of those regions or countries listed in Exhibit A. + +Unauthorized Cisco Product means any genuine Cisco Product or Cisco Service that Distributor purchases or acquires from any party other than Cisco and/or an Approved Source. Unauthorized Cisco Products do not include Non-Genuine Products. + +Update means a bug fix, error correction, patch or workaround for the Software which is provided by Cisco to Distributor in response to Distributor's request, or at Cisco's option, which Cisco chooses to provide to Distributor. + +Value Added Distributor Price List shall mean a portion of the Global Price List containing Products which Cisco makes available to Distributor for stocking and the prices at which Cisco will sell such Products to Distributor. + +2.0 SCOPE. This Agreement and the attached Exhibits set forth the terms and conditions for Distributor's purchase of Hardware and license of Software, and redistribution of Products, during the term of this Agreement. + +Affiliates of Distributor listed on Exhibit E may purchase Products, solely for redistribution, from Cisco under this Agreement. Distributor hereby guarantees the performance by such Affiliates of the financial and other contractual obligations set forth in this Agreement and represents and warrants that it is empowered to enter into this Agreement on behalf of such Affiliates, and to bind (and does so bind) such Affiliates to the terms and conditions of this Agreement. + +Cisco may require certain of the listed Affiliates to execute an agreement with Cisco or an affiliate of Cisco such that the legal relationship shall be between Cisco or Cisco's affiliate and Distributor's Affiliate. + +Any breach by Distributor or by an Affiliate of (i) this Agreement, or (ii) any other agreement between Cisco and Distributor or an Affiliate of either party, shall entitle Cisco to terminate this Agreement and/or any such agreement with Affiliate and/or any other Affiliate pursuant to Section 18. + +The limit of liability set forth in this Agreement shall be deemed an aggregate limit of liability, not per Affiliate, regardless of whether an Affiliate or Affiliates has executed a separate agreement with Cisco or a Cisco Affiliate permitting such Affiliate to purchase under the terms of this Agreement. + +In addition, any reporting requirements hereunder shall be performed solely by Distributor. All reporting information related to Distributor or any Affiliate(s) shall be aggregated and submitted as part of a single report, as required herein. + +3.0 APPOINTMENT OF DISTRIBUTOR. 3.1 By this Agreement, Cisco makes, and Distributor accepts, the appointment of Distributor as an authorized, non-exclusive distributor of Products and Services to Resellers located in the Territory. Distributor agrees to use its best efforts to distribute Product solely to Resellers located in the Territory. Those Resellers may resell Product only to End Users who intend to use the Product in the Territory. All Resellers to which Distributor distributes Product must meet Cisco's then-current guidelines for Resellers, as amended from time to time. + +3.2 Distributor is authorized to resell only those Products and Services which are listed on the Value Added Distributor Price List. Notwithstanding the foregoing, Cisco may, in its discretion, make available for purchase and resale by Distributor, but not for stocking by Distributor, certain other products and/or services which are listed on the Global Price List. Upon such products or services being made available to Distributor, such products and services will be deemed to be Products and Services as defined herein. + +3.3 Products Requirements. For new Products or Services added to the Global or Value Added Distributor Price List, including products or services which become available to Cisco as a result of an acquisition by Cisco of another entity, Cisco may impose certification, installation, or training requirements on Distributor prior to allowing Distributor to purchase, resell, or provide support for such Products or Services. + +3.4 Distributor agrees not to solicit orders for Products or Services, or to engage salespeople or establish warehouses or other distribution centers for the redistribution of Products or Services, outside the Territory, except to the extent advertising is placed in a particular advertising medium (except catalogs) which is distributed both inside and outside of the Territory. + +Source: SCANSOURCE, INC., 10-K, 8/22/2019 + + + + + +Exhibit 10.38 + +3.5 Unauthorized Cisco Products. Distributor acknowledges that the purchase and Resale of Non-Genuine or Unauthorized Cisco Products are not within the scope of this Agreement and Integrator is not entitled to the rights granted herein with respect to the resale of such Non-Genuine or Unauthorized Cisco Products. For all Unauthorized Cisco Products, Cisco reserves the right to withhold any warranty or Cisco Support on such products, unless such products pass a Cisco equipment inspection and Cisco receives payment for the applicable equipment inspection and/or software license fees, as required in the then​ current Software Transfer and Licensing Policy. A printed copy of the Software Transfe and Licensing Policy, in effect on the Effective Date of this Agreement and available at http://www.cisco.com/warp/public/csc/refurb_equipment/swpolicy.html, shall accompany this agreement. This policy is subject to change without notice. If Cisco determines that Reseller has Resold and/or redistributed Unauthorized Cisco Products purchased from Unauthorized Sources, then Cisco may, at Cisco's sole discretion: (a) audit Reseller's purchase and resale records of Cisco Product and relevant records pursuant to Section 17.0 (Reports and Records) and/or (b) invoice Reseller for all reasonable costs incurred by Cisco in its performance of the Audit and/or (c) suspend all Product shipments to Reseller. + +4.0 ORDERS. 4.1 Upon and subject to credit approval by Cisco at the time of Cisco's receipt of any Purchase Order, Distributor shall purchase or license Products or Services by issuing a Purchase Order, signed, if requested by Cisco, or (in the case of electronic transmission) sent by its authorized representative, indicating specific Products and Services, Cisco Product numbers, quantity, unit price, total purchase price, shipping instructions, requested shipping dates, bill-to and ship-to addresses, tax exempt certifications, if applicable and contract reference, if any. No contingency contained on any Purchase Order shall be binding upon Cisco. The terms of this Agreement shall apply, regardless of any additional or conflicting terms on any Purchase Order or other correspondence or documentation submitted by Distributor to Cisco, and any such additional or conflicting terms are deemed rejected by Cisco. + +4.2 Cisco shall use commercially reasonable efforts to provide order acknowledgement information within [*****] business days for all Purchase Orders placed on Cisco.com or within [*****] business days of Purchase Orders faxed or hand delivered to Cisco. Cisco Customer Service will review and accept or decline all Purchase Orders for the Cisco entity that will supply the Products or Services, and no other person is authorized to accept Purchase Orders on behalf of Cisco. Cisco Customer Service may accept a Purchase Order even if some of the information required by Section 4.1 above is missing or incomplete. In relation to Services, Cisco will confirm acceptance of a Purchase Order for Services by issuing a list of Products covered by such Services (the "Equipment List"). + +4.3 Distributor may defer Product shipment for up to [*****] from the original shipping date scheduled by Cisco, provided written or electronic notice (issued, in either case, by an authorized representative of Distributor) is received by Cisco at least [*****] days before the originally scheduled shipping date. Cancelled Purchase Orders, rescheduled shipments or Product configuration changes requested by Distributor less than [*****] days before the original scheduled shipping date shall be subject to (a) acceptance by Cisco, and (b) a charge of [*****] of the total invoice amount relating to the affected Products. Cisco reserves the right to reschedule shipment in cases of configuration changes requested by Distributor within [*****] days of scheduled shipment. No cancellation shall be accepted by Cisco where Products are purchased with implementation Services, including design, customization or installation Services, except as may be set forth in the agreement or Statement of Work under which the Services are to be rendered. + +5.0 SHIPPING AND DELIVERY 5.1 Scheduled shipping dates will be assigned by Cisco as close as practicable to the Distributor's requested date based on Cisco's then-current lead times for the Products. Cisco will communicate scheduled shipping dates in the order acknowledgement or on Cisco.com. Cisco will ship Product in compliance with Distributor Freight Policy set forth in Exhibit D. If no guidance is contained on Exhibit D for any particular shipment, Cisco shall select the carrier. + +5.2 For shipments to the United States, shipping terms are [*****], which shall appear on Cisco's order acknowledgement or be accessible via Cisco.com. Title and risk of loss shall pass from Cisco to Distributor [*****]. For orders placed and/or shipments to destinations outside of the United States but within the Territory ("International Orders"), Distributor may need to contract with, and/or order from, a Cisco affiliate. Different shipping terms may apply to International Orders, as Cisco shall specify at the time and as shall be recorded in Distributor's agreement with such Cisco affiliate or otherwise set out on Cisco.com. + +5.3 CISCO SHALL NOT BE LIABLE FOR LOSS, DAMAGE OR PENALTY FOR DELAY IN DELIVERY OR FOR FAILURE TO GIVE NOTICE OF ANY DELAY. EXCEPT IN ACCORDANCE WITH THE APPLICABLE DELIVERY TERMS SET FORTH IN THIS AGREEMENT, CISCO SHALL NOT HAVE ANY + +Source: SCANSOURCE, INC., 10-K, 8/22/2019 + + + + + +Exhibit 10.38 + +LIABILITY IN CONNECTION WITH SHIPMENT, NOR SHALL THE CARRIER BE DEEMED TO BE AN AGENT OF CISCO. + +6.0 PAYMENT. 6.1 Prices for Products shall be those specified in Cisco's then-current Global or Value Added Distributor Price List. [*****] As provided in sub- section 3.2, in its discretion, Cisco may choose to make products or services which are on the Global Price List but not on the Value Added Distributor Price List available to Distributor. The prices for such products or services will be provided by Cisco to Distributor at the time Cisco makes such products available. + +6.2 Upon and subject to credit approval by Cisco, payment terms shall be [*****] days from shipping date. All payments shall be made in the currency in which the Price List is quoted for the applicable Purchase Order [*****]. + +6.3 The purchase price does not include any federal, state or local taxes, or sales, use, excise, ad valorem, value-add, withholding or other taxes or duties that may be applicable to the purchase of Products. When Cisco has the legal obligation to collect such taxes, the appropriate amount shall be added to Distributor's invoice and paid by Distributor, unless Distributor provides Cisco with a valid tax exemption certificate prior to issuance of a purchase order. Such certificate must be in a form authorized by the appropriate taxing authority. + +6.4 Distributor is free to determine its minimum resale prices unilaterally. Distributor understands that neither Cisco nor any employee or representative of Cisco may give any special treatment (favorable or unfavorable) to Distributor as a result of Distributor's selection of minimum resale prices. No employee or representative of Cisco or anyone else has any authority to determine what Distributor's minimum resale prices for the Products must be, or to limit Distributor's pricing discretion with respect to the Products and Services. + +6.5 In the event any provisions of this Agreement or any other agreement between Distributor and Cisco require that Cisco grant credits to Distributor's account, Cisco will grant such credit to Distributor's account. [*****]. Cisco will only consider debit memos initially received from Distributor during the time period associated with such request, as set forth herein. + +All debit memos Distributor submits to Cisco will be submitted using any method identified in 25.8, or as otherwise agreed between the parties. + +6.6 Except as stated in Sections 7 (Price Protection), 12 (Inventory Balance), 13 (Return of Obsolete Product), 18 (Term and Termination) or as otherwise stated herein, for all price adjustment related credits requested by the Distributor to be granted by Cisco, the + +6.7 Distributor must make the initial credit request to Cisco, in writing, within [*****] of the underlying point of sale transaction. Any initial credit requests submitted by the Distributor to Cisco greater than [*****] after the underlying point of sale transaction will not be honored by Cisco and Cisco will not grant such credit to Distributor. + +7.0 PRICE PROTECTION. 7.1 Definition: For purposes of this Section 7.0, Products "In-Transit" shall be defined as all Products with a particular Cisco part number shipped by Cisco to Distributor in the [*****] day period prior to the date on which Cisco announces a general price decrease for Products with such part number, excluding those Products which Distributor has received into its inventory during such [*****] day period. + +7.2 In the event Cisco puts into effect a general price decrease for any Product from the Value Added Distributor Price List, Cisco will provide to Distributor a price credit on any such Product on order, In Transit or in Distributor's inventory as of the effective date of the price decrease, provided that the price credit for such Product in inventory or In Transit shall not exceed the dollar value of shipments of that Product (measured by the appropriate Cisco product number) to Distributor over the preceding [*****]. Cisco will credit Distributor's account with an amount equal to the number of units of such Product in Distributor's inventory and In Transit on the effective date of a price decrease multiplied by the difference between the net price paid and the new net price. Distributor will have [*****] from the effective date of the price change to exercise protection under this program by issuing a request for credit memo with supporting documentation to Cisco. Claims for price protection submitted more than [*****] from the effective date of a price decrease will be rejected. Notwithstanding the foregoing, Product on order will receive an automatic retroactive price credit. The only inventoried Product covered under this price protection clause is Product which has been identified by Distributor to Cisco in the daily inventory reports required in sub-sub-section 17.2.2, excluding any Third-Party + +Source: SCANSOURCE, INC., 10-K, 8/22/2019 + + + + + +Exhibit 10.38 + +Sourced Product. Cisco will use commercially reasonable efforts to notify Distributor within [*****] of all such pricing changes. + +8.0 RESERVED + +9.0 PROPRIETARY RIGHTS AND SOFTWARE LICENSING. 9.1 Distributor's use of Software is governed by the terms contained in Exhibit C (End User License Agreement ("EULA")). For purposes of this Agreement, all references to "Customer" or "You" therein shall refer to Distributor. + +9.2 Distributor shall notify Cisco promptly of any breach or suspected breach of the EULA and further agrees that it will, at Cisco's request, assist Cisco in efforts to preserve Cisco's intellectual property rights including pursuing an action against any breaching third parties. + +10. WARRANTY. 10.1 C i s c o P r o d u c t s a r e p r o v i d e d w i t h w r i t t e n l i m i t e d w a r r a n t i e s , a s s e t f o r t h a t t h e f o l l o w i n g U R L : http://www.cisco.com/warp/public/cc/serv/mkt/sup/tsssv/wnty/. Distributor will pass through to Resellers all written limited warranties provided by Cisco with Products purchased by Distributor and Distributor shall contractually require (in whatever manner Distributor deems appropriate) each such Reseller to provide such warranty and other terms to any End User to which the Reseller redistributes the Product. + +10.2 In addition to the written limited warranty provided by Cisco with its Products, such warranty statement shall apply to Distributor during the period between when it receives a Product and when it resells or redistributes such Product, + +10.3 Notwithstanding any other provision hereof, Cisco's sole and exclusive warranty and obligation with respect to the Products sold hereunder are set forth in Cisco's Limited Warranty Statement delivered with the Product. Distributor SHALL NOT MAKE ANY WARRANTY COMMITMENT, WHETHER WRITTEN OR ORAL, ON CISCO'S BEHALF. Distributor shall indemnify Cisco against any warranties made in addition to Cisco's standard warranty and for any misrepresentation of Cisco's reputation or Cisco's Products. + +10.4 DISCLAIMER OF WARRANTY. EXCEPT AS EXPRESSLY PROVIDED IN THIS SECTION 10.0, CISCO HEREBY DISCLAIMS AND DISTRIBUTOR WAIVES ALL REPRESENTATIONS, CONDITIONS AND WARRANTIES (WHETHER EXPRESS, IMPLIED, OR STATUTORY), INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OR CONDITION (A) OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NONINFRINGEMENT, SATISFACTORY QUALITY, QUIET ENJOYMENT, ACCURACY, OR SYSTEM INTEGRATION, OR (B) ARISING FROM ANY COURSE OF DEALING, COURSE OF PERFORMANCE, OR USAGE IN THE INDUSTRY. TO THE EXTENT AN IMPLIED WARRANTY CANNOT BE DISCLAIMED, SUCH WARRANTY IS LIMITED IN DURATION TO THE APPLICABLE EXPRESS WARRANTY PERIOD. + +NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS SECTION 10, CISCO MAKES NO REPRESENTATION OR WARRANTY AS TO OWNERSHIP OF INTELLECTUAL PROPERTY OR OF PROPRIETARY RIGHTS, OR AS TO INFRINGEMENT OR MISAPPROPRIATION THEREOF. DISTRIBUTOR'S SOLE AND EXCLUSIVE REMEDIES IN THE EVENT OF ANY SUCH INFRINGEMENT, MISAPPROPRIATION OR ANY CLAIM THEREOF SHALL BE AS SET FORTH IN SECTION 15 OF THIS AGREEMENT ("PATENT AND COPYRIGHT INFRINGEMENT"). + +11.0 TRADEMARKS. 11.1 Cisco grants to Distributor the right to use the name, logo, trademarks, and other marks of Cisco (collectively, the "Marks") for all proper purposes in the sale of Cisco Products and Services to End Users and the performance of Distributor's duties hereunder only so long as this Agreement is in effect. Distributor's use of such Marks shall be in accordance with Cisco's policies including, but not limited to trademark usage and advertising policies, and be subject to Cisco's written approval. Distributor further agrees not to affix any Marks to products other than genuine Products. Distributor shall have no claim or right in the Marks, including but not limited to trademarks, service marks, or trade names owned, used or claimed now or which Cisco has authority to grant Distributor the right to use in the future. Distributor agrees that upon notice from Cisco it will immediately terminate its use of a particular Mark. + +11.2 Distributor shall not acquire, use, promote or Resell Non-Genuine Products. Additionally, Distributor shall + +Source: SCANSOURCE, INC., 10-K, 8/22/2019 + + + + + +Exhibit 10.38 + +notify Cisco promptly of the existence, or suspected existence, of Non​ Genuine Products in possession of or promoted by third parties, and further agrees that it will, at Cisco's request, assist Cisco to diligently pursue any action against any third party in possession of or promoting Non- Genuine Products. + +11.3 If Distributor acquires, uses, promotes or Resells Non-Genuine Products, Cisco may take one or more of the following actions, at Cisco's discretion: (i) invoice Distributor, and the latter further agrees to pay within [*****] of receipt of the invoice, for all reasonable costs associated with any Audit and/or any investigation carried out by Cisco or its independent accountants or investigators, that disclosed a material breach by Distributor of this Section, and/or (ii) require Distributor, [*****] of Cisco's request, to recall and destroy all Non-Genuine Products that Distributor has sold to Resellers and replace such products with legitimate, equivalent Products at Distributor's expense, (iii) require Distributor, within [*****] of receiving Cisco's written request, to provide Cisco with all details related to Distributor's acquisition of all Non-Genuine Products, including without limitation, its suppliers, shipping details and all buyers to whom Distributor resold Non-Genuine Products, and (iv) terminate this Agreement by notice with immediate effect. + +12.0 INVENTORY BALANCE. For a [*****] period, beginning on the effective date of this agreement, Distributor has the option to return to Cisco, for credit, up to [*****] of the dollar value of Product listed on the Value Added Distributor Price List and shipped to Distributor in the preceding Cisco Quarter, net of credits issued by Cisco to Distributor. [*****] Cisco shall credit Distributor's account in the amount of the price paid by Distributor for returned Products, less any price protection credits issued to Distributor related to the Product returned (the "Return Credit"). Each of the following requirements must be met by Distributor: + +12.1 [*****] + +12.2 Distributor may submit the inventory balance claim between the first and [*****] calendar days of the following months: February, May, August, and November. + +12.3 [*****] + +12.4 Distributor shall bear all shipping and handling charges to the Cisco designated United States site for Product returned for credit; + +12.5 Distributor shall obtain an RMA number prior to returning any Product to Cisco. Distributor shall follow Cisco's then-current RMA process; and + +12.6 Distributor reports must be provided to Cisco in accordance with the requirements of sub- section 17.2. + +[*****] + +13.0 RETURN OF OBSOLETE PRODUCT 13.1 Cisco will use commercially reasonable efforts to notify Distributor, including by electronic posting, when a Product becomes an Obsolete Product. + +13.2 Provided Distributor provides required reports to Cisco in accordance with Section 17.0 of this Agreement, Distributor shall have the right to return Obsolete Product for full credit under Cisco's then-current RMA Process. [*****] + +13.3 Distributor must notify Cisco of the quantity of Obsolete Product to be returned to Cisco within [*****] of notification of obsolescence by Cisco. Such right to return is contingent upon return by Distributor of Obsolete Product within [*****] of such notification by Cisco. Such Product must be in new and unused condition and in factory sealed boxes. + +13.4 [*****] + +14.0 RESERVED + +15.0 PATENT AND COPYRIGHT INFRINGEMENT. 15.1 Cisco will have the obligation and right to defend any claim, action, suit or proceeding ("IPR Claim") brought + +Source: SCANSOURCE, INC., 10-K, 8/22/2019 + + + + + +Exhibit 10.38 + +against Distributor, its officers, directors, employees and agents ("Named Parties") so far as it is based on a claim that any Product supplied under this Agreement infringes Third Party IPR (as defined below). Cisco will indemnify Named Parties and hold harmless against any final judgment entered in respect of such an IPR Claim by a court of competent jurisdiction and against any settlements arising out of such an IPR Claim. Cisco's obligations to defend the IPR Claim and indemnify Distributor are conditional upon: + +15.1.1 Distributor notifying Cisco promptly in writing of the IPR Claim or threat thereof; Distributor granting Cisco full and exclusive authority for the conduct of the defense and settlement of the 15.1.2 IPR Claim and any subsequent appeal; and 15.1.3 Distributor providing Cisco all information and assistance reasonably requested by Cisco in connection with the conduct of the defense and settlement of the IPR Claim and any subsequent appeal. + +15.2 For the purposes of this Agreement, Third Party IPR means a United States copyright existing as at the Effective Date, a United States patent issued as at the Effective Date, a trademark registered in the United States as at the Effective Date, trade dress existing in the United States as at the Effective Date, or a claim that a Product is manufactured by means of misappropriation of a third party's trade secrets. + +15.3 If an IPR Claim has been made, or in Cisco's opinion is likely to be made, Distributor agrees to permit Cisco, at its option and expense, either to: (a) procure for Distributor the right to continue using the Product; (b) replace or modify the Product so that it becomes non-infringing; or (c) immediately terminate both parties' respective rights and obligations under this Agreement with regard to the Product, in which case Distributor will return the Product to Cisco and Cisco will refund to Distributor the price originally paid by Distributor to Cisco for the Product, [*****]. + +15.4 Notwithstanding the foregoing, Cisco has no liability for, and Distributor will defend and indemnify Cisco against, any IPR Claim arising from: + +15.4.1 the combination, operation, or use of a Product supplied under this Agreement with any product, device, or software not supplied by Cisco; 15.4.2 the amount or duration of use which Distributor, a Reseller or an End User makes of the Product, revenue earned by Distributor, a Reseller or an End User from services it provides that use the Product, or services offered by Distributor, a Reseller or an End User to external or internal customers; 15.4.3 the alteration or modification of any Product supplied under this Agreement; 15.4.4 Cisco's compliance with Distributor's designs, specifications, or instructions; or 15.4.5 Distributor's use of the Product after Cisco has informed Distributor of modifications or changes in the Product required to avoid such an IPR Claim if the alleged infringement would have been avoided by implementation of Cisco's recommended modifications or changes. + +15.5 This Section states the entire obligation of Cisco and its suppliers, and the exclusive remedy of Distributor, in respect of any infringement or alleged infringement of any intellectual property rights or proprietary rights. THIS INDEMNITY OBLIGATION AND REMEDY ARE GIVEN TO Distributor SOLELY FOR ITS BENEFIT AND IN LIEU OF, AND CISCO DISCLAIMS, ALL WARRANTIES, CONDITIONS AND OTHER TERMS OF NON-INFRINGEMENT OR TITLE WITH RESPECT TO ANY PRODUCT. + +15.6 [*****]. + +16.0 SUPPORT. Support shall be provided in accordance with Exhibit B. Distributor acknowledges that Cisco will not be responsible for warranty service and support except as specifically provided in Exhibit B or a Cisco support program (e.g., SmartNet). + +17.0 REPORTS AND RECORDS. 17.1 With regard to both Distributor and Affiliates' activity, Distributor shall keep full, true, and accurate records and accounts, in accordance with generally-accepted accounting principles, of each Product or Service purchased and deployed, Resold, or distributed by serial number, including information regarding compliance with Cisco marketing and sales programs, Software usage, and export or transfer. Distributor shall make these records available for audit by Cisco upon [*****] prior written notice, during regular business hours, at Distributor's principal place of business or such other of Distributor's locations where Distributor may maintain relevant records. [*****]. + +All reporting and related obligations in this Section 17 apply to not only data regarding Distributor's activities, but also + +Source: SCANSOURCE, INC., 10-K, 8/22/2019 + + + + + +Exhibit 10.38 + +the activities of the Affiliates. All such information shall be compiled into one report unless otherwise directed herein. The report(s) shall identify the specific Distributor entity involved in the subject transaction. + +17.2 Reporting. [*****] + +17.3 Distributor agrees to use commercially reasonable efforts, commensurate with the manner in which Distributor treats any of its other leading vendors, in order to facilitate Cisco's ability to obtain daily sales information from Distributor via EDI. + +17.4 ECCN Numbers. Upon request by Distributor, Cisco agrees to make available to Distributor the Export Control Classification Number (ECCN) for each of Cisco's Product and information as to whether or not any of such Products are classified under the U.S. Munitions license. + +17.5 Unauthorized Cisco Product. Distributor will not purchase Products for resale to any Reseller from any person or entity other than Cisco, provided that Distributor may accept returned Product from Resellers if Distributor initially sold the Product to be returned to such Reseller. [*****] + +18.0 TERM AND TERMINATION. 18.1 This Agreement shall commence on the Effective Date and continue thereafter for a period of two (2) years, unless extended by written agreement of both parties or sooner terminated as set forth below. Without prejudice to either party's right to terminate this Agreement as set forth in sub​ sections 18.2 to 18.5 below, Cisco may, by written notice to Distributor, given at least thirty (30) days prior to the end of the then-current term of the Agreement, extend the term of the Agreement for the period set forth in such notice, up to a maximum of one (1) year beyond the then- current expiration date. Any extension shall be on the same terms and conditions then in force, except as may be mutually agreed in writing by the parties. In the event the Agreement expires and Cisco intends to not renew the Agreement, Cisco will provide written notice of same to Distributor. Notwithstanding Cisco's right to extend the term of this Agreement, each party acknowledges that this Agreement shall always be interpreted as being limited in duration to a definite term and that the other party has made no commitments whatsoever regarding the duration or renewal of this Agreement beyond those expressly stated herein. + +18.2 Termination for Convenience. Either party may terminate this Agreement, without cause, by giving the other party [*****] days prior written notice. Notwithstanding the foregoing, Cisco may terminate this Agreement immediately upon written notice in the event of breach by Distributor of Section 9.0 (Proprietary Rights and Software Licensing), Section 11.0 (Trademarks), Section 19.0 (Confidentiality) or Section 20.0 (Export Restrictions) of this Agreement. + +18.3 A party may terminate this Agreement immediately through written notice if (i) the other party ceases to carry on business as a going concern; or (ii) the other party becomes or may become the object of the institution of voluntary or involuntary proceedings in bankruptcy or liquidation; or (iii) a receiver or similar officer is appointed with respect to the whole or a substantial part of the other party's assets; or (iv) an event similar to any of the foregoing occurs under applicable law. + +18.4 Cisco may terminate this Agreement upon [*****] days' written notice, in the event it becomes known that (i) Distributor or an Affiliate or Distributor's direct or indirect parent has acquired or intends to acquire a controlling interest in a third party that is a competitor of Cisco, or (ii) Distributor or its direct or indirect parent is to be acquired by a third party, or (iii) a controlling interest in Distributor or its direct or indirect parent is to be transferred to a third party. + +18.5 Upon termination or expiration of this Agreement, (a) Cisco reserves the right to cease all further delivery of Product or Services due against any existing Purchase Orders unless Distributor agrees to pay for such deliveries in advance by certified or cashier's check, (b) all outstanding invoices immediately become due and payable by certified or cashier's check, and (c) all rights and licenses of Distributor hereunder shall terminate, subject to the terms of the following sentence. Except for a termination of this Agreement resulting from Distributor's breach of Section 9.0 (Proprietary Rights and Software Licensing) or Section 19.0(Confidential Information), upon termination or expiration of this Agreement, Distributor may continue to use, in accordance with the terms and conditions of this Agreement, Products shipped to it by Cisco prior to the date of termination or expiration. + +18.6 Upon termination or expiration of this Agreement, Distributor shall immediately return to Cisco all Confidential Information (including all copies thereof) then in Distributor's possession, custody or control; provided, that except for a termination resulting from Distributor's breach of Section 9.0 (Proprietary Rights and Software Licensing) or Section 19.0 (Confidential Information), Distributor may retain a sufficient amount of such Confidential Information and material + +Source: SCANSOURCE, INC., 10-K, 8/22/2019 + + + + + +Exhibit 10.38 + +to support its installed base of Products. + +18.7 [*****]. + +18.8 In the event of termination by Cisco for convenience, termination by Distributor for Cisco's material breach, or expiration of this Agreement where Cisco has provided Distributor with written notice from an authorized representative of its intention not to renew the Agreement, Cisco agrees to repurchase all Product in Distributor's inventory within [*****] days following the effective date of termination or expiration. Within [*****] days following the effective date of termination or expiration, Distributor shall return to Cisco all Product held in inventory as of the effective date of termination. Distributor shall receive credit for any Product so returned in an amount equal to the original purchase price thereof, less any credits or discounts which have been previously paid or applied to Distributor. Such credits shall be first applied to any uncontested amounts due Cisco. Any remaining balance shall be payable to Distributor as soon as commercially practicable. Cisco shall have the option to select the method of return and shall bear all freight costs associated with returns of Product by Distributor under this Section 18.8. + +18.9 In the event of termination by Cisco for Distributor's material breach, or termination by Distributor for convenience, Cisco may, at its option, allow Distributor to return unsold Product, but Cisco is in no way obligated to do so. In the case of authorized return of Product by Cisco under Section 18.9, Distributor will bear all freight costs associated with return of Product to Cisco. + +18.10 [*****] + +Distributor shall obtain an RMA number prior to returning any Product to Cisco. Distributor shall follow Cisco's then-current RMA process. + +18.11 DISTRIBUTOR AGREES THAT, IN THE EVENT OF ANY TERMINATION OF THIS AGREEMENT, IT SHALL HAVE NO RIGHTS TO DAMAGES OR INDEMNIFICATION OF ANY NATURE, SPECIFICALLY INCLUDING COMMERCIAL SEVERANCE PAY, WHETHER BY WAY OF LOSS OF FUTURE PROFITS, EXPENDITURES FOR PROMOTION OF ANY PRODUCT, OR OTHER COMMITMENTS IN CONNECTION WITH THE BUSINESS AND GOOD WILL OF DISTRIBUTOR. DISTRIBUTOR EXPRESSLY WAIVES AND RENOUNCES ANY CLAIM TO COMPENSATION OR INDEMNITIES FOR ANY TERMINATION OF A BUSINESS RELATIONSHIP. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH HEREIN, THIS SECTION SHALL IN NO WAY BE INTERPRETED TO RELEASE EITHER CISCO OR DISTRIBUTOR FROM ANY PAYMENTS OR FINANCIAL OBLIGATION MADE PRIOR TO TERMINATION. + +19.0 CONFIDENTIALITY. Distributor acknowledges that, in the course of selling Products and Services and performing its duties under this Agreement, Distributor, its Resellers, and End Users to which Distributor provides access to Cisco technical data (including without limitation Products, Services, and technical data made available on Cisco Connection Online pursuant to Exhibit C), may obtain information relating to Products, Services, or to Cisco, which is of a confidential and proprietary nature ("Proprietary Information"). Such Proprietary Information includes, but is not limited to, trade secrets, know-how, inventions, techniques, processes, programs, schematics, software source documents, data, Customer lists, financial information and sales and marketing plans. + +Cisco owns and intends to maintain its ownership of all such Proprietary Information. [*****] Distributor shall appropriately bind each of its employees to whom such disclosure is made, to hold the Proprietary Information in strict confidence and not to disclose such information to any person other than as is necessary in the course of its employment by Distributor and will indemnify Cisco for all damages suffered by Cisco in the event of wrongful disclosure of such Proprietary Information. Neither party shall disclose, advertise, or publish either the existence, the subject matter, any discussions relating to, or any of the terms and conditions, of this Agreement (or any summary of any of the forgoing) to any third party without the prior written consent of the other party. Any press release, publication, advertisement or public disclosure regarding this Agreement is subject to both the prior review and the written approval of both parties. + +Cisco acknowledges that, under this Agreement, Distributor may provide Point of Sale ("POS") reports, financial information, sales and marketing plans, Distributor network design information and Distributor lists, of a proprietary and confidential nature ("Distributor Confidential Information"). Such Distributor information, excluding POS reports and Distributor lists, shall be used by Cisco only in connection with this Agreement. [*****] Cisco further agrees to immediately return to Distributor, at Distributor's request, all Distributor Confidential Information in Cisco's possession, custody, or control upon termination of this Agreement at any time and for any reason, except for POS reports or Distributor + +Source: SCANSOURCE, INC., 10-K, 8/22/2019 + + + + + +Exhibit 10.38 + +lists that Cisco may use for internal business or end user support purposes or government-related purposes. + +20.0 EXPORT RESTRICTIONS. Certain of the Products supplied by Cisco under the Agreement are subject to export controls under the laws and regulations of the United States (U.S.) and elsewhere. Distributor shall comply with such laws and regulations governing use, export, re-export, and transfer of Products and will obtain all required U.S. and local authorizations, permits, or licenses. + +21.0 COMPLIANCE WITH LAWS. 21.1 Distributor shall obtain all licenses, permits and approvals required by any government, including any recycling or take-back programs applicable to packaging or Products, and shall comply with all applicable laws, rules, regulations, policies and procedures and any requirements applicable to the importation, exportation, use, sale, loan, purchase, and distribution of Products under telecommunications, consumer rights related, environmental, labor, tax, and any other laws and regulations, of any government or other competent authority where the Products are to be sold, used or deployed (collectively "Applicable Laws"). + +21.2 Distributor will indemnify and hold harmless Cisco for any claim arising from or relating to Distributor's violation or alleged violation of any Applicable Laws. + +21.3 Distributor hereby represents and warrants that: (a) it shall comply with all Applicable Laws; (b) this Agreement and each of its terms are in full conformance and in compliance with such laws; and (c) it shall not take any action or permit or authorize any action which will render Cisco liable for a violation of the U.S. Foreign Corrupt Practices Act, which prohibits the offering, giving or promising to offer or give, directly or indirectly, money or anything of value to any official of a government, political party or instrumentality thereof in order to assist it or Cisco in obtaining or retaining business and (i) it will not violate or cause Cisco to violate such Act in connection with the sale or distribution of Cisco Products or Services; and (ii) if Distributor is a non-governmental entity, it will notify Cisco in writing if any of its owners, partners, principals, officers, and employees are or become during the term of this Agreement officials, officers or representatives of any government, political party or candidate for political office outside the United States and are responsible for a decision regarding obtaining or retaining business for Cisco Products by such government. Cisco strives to maintain the highest standards of business integrity and, accordingly, if Distributor has any cause for concern regarding any business practices these should be reported to Cisco at [EMAIL ADDRESS] or by Fax to [FAX NUMBER]. + +21.4 Distributor shall use its best efforts to regularly and continuously inform Cisco of any requirements under any Applicable Laws that directly or indirectly affect this Agreement, the sale, use and distribution of Products, or Cisco's trade name, trademarks or other commercial, industrial or intellectual property interests, including, but not limited to, certification or type approval of the Products from the proper authorities in the Territory. + +22.0 LIMITATION OF LIABILITY. NOTWITHSTANDING ANYTHING ELSE IN THIS AGREEMENT TO THE CONTRARY, AND EXCEPT FOR LIABILITY ARISING OUT OF DISTRIBUTOR'S BREACH OF SECTION 9 (PROPRIETARY RIGHTS AND SOFTWARE LICENSING) OR EXHIBIT C (SOFTWARE LICENSE AGREEMENT), OR AMOUNTS DUE FOR PRODUCTS AND SERVICES PURCHASED WITH RESPECT TO THE PAYMENT OF WHICH NO BONA FIDE DISPUTE EXISTS, ALL LIABILITY OF EACH PARTY, INCLUDING EACH PARTY'S AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES, AGENTS AND SUPPLIERS COLLECTIVELY, FOR CLAIMS ARISING UNDER THIS AGREEMENT OR OTHERWISE HOWSOEVER ARISING SHALL BE LIMITED SEPARATELY FOR PRODUCTS AND SERVICES PURCHASES TO THE GREATER OF I) [*****] OR (ll)THE MONEY PAID TO CISCO FOR PRODUCTS OR FOR SERVICES, SEPARATELY AND AS APPLICABLE, UNDER THIS AGREEMENT DURING THE [*****] PERIOD PRECEDING THE EVENT OR CIRCUMSTANCES FIRST GIVING RISE TO SUCH LIABILITY. THESE LIMITATIONS OF LIABILITY FOR PRODUCT AND SERVICES ARE CUMULATIVE AND NOT PER-INCIDENT (I.E., THE EXISTENCE OF TWO OR MORE CLAIMS WILL NOT ENLARGE THIS LIMIT). + +23.0 CONSEQUENTIAL DAMAGES WAIVER. EXCEPT FOR LIABILITY ARISING OUT OF OR IN CONNECTION WITH DISTRIBUTOR'S BREACH OF SECTION 9 (PROPRIETARY RIGHTS AND SOFTWARE LICENSING) OR EXHIBIT C (SOFTWARE LICENSE AGREEMENT), IN NO EVENT SHALL EITHER PARTY, ITS RESPECTIVE AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR SUPPLIERS BE LIABLE FOR ANY SPECIAL, INCIDENTAL, + +Source: SCANSOURCE, INC., 10-K, 8/22/2019 + + + + + +Exhibit 10.38 + +INDIRECT OR CONSEQUENTIAL DAMAGES, OR LOST REVENUE, LOST PROFITS, OR LOST OR DAMAGED DATA, WHETHER ARISING IN CONTRACT, TORT (INCLUDING NEGLIGENCE), OR OTHERWISE, EVEN IF SUCH PARTY HAS BEEN INFORMED OF THE POSSIBILITY THEREOF. + +24.0 GENERAL INDEMNIFICATION Each party shall defend, indemnify and hold harmless the other, and their respective officers, directors, employees, and agents from and against any and all claims, losses, liabilities, damages, and expenses (including, without limitation, reasonable attorneys' fees), including without limitation, those based on contract or tort, arising out of or in connection with a claim, suit or proceeding brought by a third party based upon bodily injury (including death) or damage to tangible personal property (not including lost or damaged data) arising from the negligent or intentional acts or omissions of the indemnifying party or its subcontractors, or the officers, directors, employees, agents, successors and assigns of any of them. In the event that the indemnified party's or a third party's negligent or intentional acts or omissions contributed to cause the injury or damage for which a claim of indemnity is being asserted against the indemnifying party hereunder, the damages and expenses (including, without limitation, reasonable attorneys' fees) shall be allocated or reallocated, as the case may be, between the indemnified party, the indemnifying party and any other party bearing responsibility in such proportion as appropriately reflects the relative fault of such parties, or their subcontractors, or the officers, directors, employees, agents, successors and assigns of any of them, and the liability of the indemnifying party shall be proportionately reduced. + +The foregoing indemnification obligations are conditioned upon the indemnified party promptly notifying the indemnifying party in writing of the claim, suit or proceeding for which the indemnifying party is obligated under this Section 24, cooperating with, assisting and providing information to, the indemnifying party as reasonably required, and granting the indemnifying party the exclusive right to defend or settle such claim, suit or proceeding. + +25.0 INSURANCE (a) Each party shall be responsible for maintaining Worker's Compensation insurance in the statutory amounts required by the applicable state laws. + +(b) Each party shall maintain Commercial General Liability insurance with bodily injury and property damage limits of $[*****] per occurrence and $[*****] aggregate. Such insurance shall (a) provide for contractual liability coverage, (b) provide for cross liability coverage, and (c) name the other party and its subcontractors, as well as the directors, officers, employees, agents, successors and assigns of all of them, as additional insureds, but only to the extent of liabilities falling within the indemnity obligations of the other party pursuant to the terms of Section 24 in this Agreement. + +26.0 REQUIREMENTS FOR RESELLERS 26.1 [*****] + +26.2 [*****] + +27.0 GENERAL PROVISIONS. 27.1 Choice of Law. The validity, interpretation, and performance of this Agreement shall be controlled by and construed under the laws of the State of New York, United States of America, as if performed wholly within the state and without giving effect to the principles of conflicts of law, and the state and federal courts of California shall have jurisdiction over any claim arising under this Agreement. The parties specifically disclaim the UN Convention on Contracts for the International Sale of Goods. Notwithstanding the foregoing, either party may seek interim injunctive relief in any court of appropriate jurisdiction with respect to any alleged breach of such party's intellectual property or proprietary rights. + +27.2 Force Majeure. Except for the obligation to pay monies due and owing, neither party shall be liable for any delay or failure in performance due to events outside the defaulting party's reasonable control, including without limitation acts of God, earthquakes, labor disputes, industry wide shortages of supplies, actions of governmental entities, riots, war, acts of terrorism, fire, epidemics, or delays of common carriers or other circumstances beyond its reasonable control. The obligations and rights of the defaulting party shall be extended for a period equal to the period during which such event prevented such party's performance. + +27.3 No Waiver. The waiver by either party of any right provided under this Agreement shall + +Source: SCANSOURCE, INC., 10-K, 8/22/2019 + + + + + +Exhibit 10.38 + +not constitute a subsequent or continuing waiver of such right or of any other right under this Agreement. + +27.4 Assignment. Distributor may not assign or delegate its rights or obligations under this Agreement (other than (i) the right to receive any amount due, which shall be freely assignable, or (ii) to Distributor's parent or majority-owned subsidiary company of sufficient net worth to meet any potential liability under this Agreement) without the prior written consent of Cisco, such consent not to be unreasonably withheld or delayed, provided that any such assignment shall not relieve Distributor of any obligation to pay monies that were owed Cisco prior to the date of the assignment. + +27.5 Severability. In the event that one or more terms of this Agreement becomes or is declared to be illegal or otherwise unenforceable by any court of competent jurisdiction, each such term shall be null and void and shall be deemed deleted from this Agreement. All remaining terms of this Agreement shall remain in full force and effect. Notwithstanding the foregoing, if this paragraph is invoked and, as a result, the value of this Agreement is materially impaired for either party, as determined by such party in its sole discretion, then the affected party may terminate this Agreement by written notice with immediate effect to the other. + +27.6 Attorneys' Fees. In any suit or proceeding relating to this Agreement the prevailing party will have the right to recover from the other its costs and reasonable fees and expenses of attorneys incurred in connection with the suit or proceeding, including costs, fees and expenses upon appeal, separately from and in addition to any other amount included in such judgment. This provision is intended to be severable from the other provisions of this Agreement, and shall survive expiration or termination and shall not be merged into any such judgment + +27.7 No Agency. This Agreement does not create any agency, partnership, joint venture, or franchise relationship. No employee of either party shall be or become, or shall be deemed to be or become, an employee of the other party by virtue of the existence or implementation of this Agreement. Each party hereto is an independent contractor. Neither party has the right or authority to, and shall not, assume or create any obligation of any nature whatsoever on behalf of the other party or bind the other party in any respect whatsoever. + +27.8 Notices. All notices required or permitted under this Agreement will be in writing and will be deemed given one (1) day after deposit with a commercial express courier specifying next day delivery (or two (2) days for international courier packages specifying 2-day delivery), with written verification of receipt. All communications will be sent to the addresses set forth on the cover sheet of this Agreement or such other address as may be designated by a party by giving written notice to the other party pursuant to this paragraph. Notwithstanding the foregoing, notices regarding general changes in product status, pricing, policies, financial transactions or programs may also be made by posting on Cisco.com or delivery by e-mail or fax, as applicable. Cisco shall use commercially reasonable efforts to provide Distributor [*****] notice when introducing new Programs or Product or modifying Product pricing. Any notice regarding discontinuation of Product shall be pursuant to Cisco's then-current End of Life Policy, as found at http://www.cisco.com/en/US/products/products end-of-life policy.html. A current copy of this policy, as of the Effective Date of this Agreement, is attached hereto as Exhibit G. [*****]. + +27.9 Non-exclusive Market and Purchase Rights. It is expressly understood and agreed that this Agreement does not grant to Cisco or Distributor an exclusive right to purchase or sell Products and shall not prevent either party from developing or acquiring or selling competing Products of other vendors or customers. + +27.10 Survival. Sections 6.0 (Payment), 10.0 (Limited Warranty), 19.0 (Confidential Information), 15.0 (Patent and Copyright Infringement), 18 (Term and Termination), 17.0 (Reports and Records), 20.0 (Export Restrictions), 22.0 (Limitation of Liability), 23.0 (Consequential Damages Waiver), 27.0 (General) and the license to use the Software set out in Exhibit C (Software License Agreement) (subject to the termination provisions set forth in Section 18.0) shall survive the termination of this Agreement. + +27.11 Counterparts. This Agreement may be executed in two counterparts, each of which shall be deemed an original and together which shall constitute one and the same instrument. A validly executed counterpart that is delivered by + +Source: SCANSOURCE, INC., 10-K, 8/22/2019 + + + + + +Exhibit 10.38 + +one party to the other via electronic transmission (a "Counterpart Image") shall be valid and binding to the same extent as one delivered physically, provided that the valid signature is clearly visible in the Counterpart Image. In the event that a party delivers a Counterpart Image in place of an originally-executed counterpart, such party shall retain the originally-executed counterpart in its files for at least the duration of the Term hereof. + +27.12 Headings. Headings of sections have been added solely for convenience of reference and shall not be deemed part of this Agreement. + +Source: SCANSOURCE, INC., 10-K, 8/22/2019 + + + + + +Exhibit 10.38 + +EXHIBIT A TERRITORY + +Territory: The United States, excluding its territories. + +Source: SCANSOURCE, INC., 10-K, 8/22/2019 + + + + + +Exhibit 10.38 + +EXHIBIT B VALUE ADDED DISTRIBUTOR SUPPORT EXHIBIT + +1.0 DEFINITIONS. Capitalized terms used in this Exhibit B have the meanings assigned to those terms in Section 1.0 of the Nonexclusive Value Added Distributor Agreement Terms and Conditions. Additional capitalized terms and the definitions assigned to those terms in this Exhibit B follow: + +CCO means Cisco Connection Online, Cisco's online information web server. + +Customer means End Users and Resellers. + +Standard Business Hours means 6:00 AM to 6:00 PM Pacific Standard Time Monday through Friday, excluding Cisco-observed holidays, in the U.S. and Canada and outside the U.S. and Canada, means 8:00 AM to 6:00 PM Australia's Eastern Standard Time and Central European Time, Monday through Friday, excluding local Cisco-observed holidays. + +TAC means Cisco's Technical Assistance Center. + +2.0 CISCO RIGHTS AND OBLIGATIONS. For Products purchased under the Agreement, Cisco provides the services described below. [*****] + +2.1 CCO Access. Cisco will provide DISTRIBUTOR with partner-level access to CCO. + +2.2 Technical Support. [*****]. + +2.3 Updates. [*****]. + +2.4 Hardware Support. 2.4.1 Return for Replacement. During the Cisco warranty period, DISTRIBUTOR may return failed Product to Cisco for replacement. Cisco will use commercially reasonable efforts to ship a replacement within [*****] days after receipt of the failed Product from DISTRIBUTOR. After the end of the warranty period, parts will be charged at Cisco's then-current rates. + +2.4.2 DISTRIBUTOR may request advance replacement delivery of replacement parts (Cisco will send the part upon DISTRIBUTOR's receipt of an RMA number) at Cisco's then-current Advance Replacement charge. + +2.4.3 Product used for replacement may be new or equivalent to new, at Cisco's discretion. + +2.5 Cisco Brand Services Option. Cisco will make available for purchase by DISTRIBUTOR, all appropriate Cisco Brand support Products for Distributor's internal use and for resale to Resellers. This option to resell Cisco brand services whereby services are delivered directly by Cisco to the End User is available in accordance with Cisco's then-current packaged service resale program. Availability of Cisco brand services is subject to geographic limitations. Information on w h e r e s u c h s e r v i c e s a r e a v a i l a b l e f o r r e s a l e , a s w e l l a s t h e p r o c e s s f o r r e s e l l i n g C i s c o b r a n d s e r v i c e s i s l o c a t e d a t "http://www.cisco.com/warp/cproreg/45/index.html". + +3.0 DISTRIBUTOR RIGHTS AND OBLIGATIONS. 3.1 Prioritization and Escalation Guideline. DISTRIBUTOR will escalate problems to Cisco pursuant to the Escalation and Prioritization Guideline (Appendix A). + +3.2 Spare Parts. DISTRIBUTOR shall maintain sufficient spare parts inventory to support its Customer base for a one-month period under normal circumstances. DISTRIBUTOR shall maintain adequate manpower and facilities to assure prompt handling of inquiries, orders and shipments for Products. + +3.3 Warranty Service. DISTRIBUTOR shall provide to its Resellers, [*****] all warranty service for a minimum + +Source: SCANSOURCE, INC., 10-K, 8/22/2019 + + + + + +Exhibit 10.38 + +of the warranty period set forth in the published Product warranty provided with the original Product. Such warranty shall commence upon shipment to the End User. Warranty service will consist of Software and Hardware replacement service as follows: + +3.3.1 Software Service. DISTRIBUTOR will use reasonable efforts to provide work​ around solutions or implement a Cisco-provided patch. DISTRIBUTOR will use reasonable effort to make latest release of all Cisco Software available to its resellers. + +3.3.2 Hardware Advance Replacement. DISTRIBUTOR will ship replacement parts and/or Product to its Resellers in accordance with Cisco's then- current published Product warranty applicable to the particular Product. + +3.4 Returns Coordination. DISTRIBUTOR will comply with the following: 3.4.1 DISTRIBUTOR shall coordinate the return of all failed parts and/or Product, freight and insurance prepaid, to the Cisco repair center specified by Cisco. + +3.4.2 DISTRIBUTOR shall comply with the following RMA procedure: 3.4.2.1 DISTRIBUTOR will ensure all Products are properly packaged prior to being shipped, and will include a written description of the failure and specification of any changes or alterations made to the Product. Product returned to Cisco will conform in quantity and serial number to the RMA request. + +3.4.2.2 DISTRIBUTOR shall tag each Product returned with the RMA transaction number and a brief description of the problem. + +3.4.2.3 Cisco will not accept any Product returned which is not accompanied by an RMA number. + +3.4.3 Title and risk of loss to failed Product and parts transfers to Cisco upon delivery to the Cisco repair center specified by Cisco. + +3.5 Reseller Support. DISTRIBUTOR will ensure Reseller has all appropriate support as follows: 3.5.1 DISTRIBUTOR shall provide competent technical support staff to support the Product so as to ensure that the Reseller is able to provide the necessary support to the End User Reseller. + +3.5.2 Reseller Frontline Support. DISTRIBUTOR will use best efforts to ensure that its Resellers provide high quality front-line support. + +3.5.3 [*****] Cisco is not responsible for any claims arising from failure by Distributor's Resellers to provide this support. + +3.5.4 Resale of Cisco Brand Services. Where available, DISTRIBUTOR will offer for purchase by its Resellers, all appropriate Cisco brand support products through its normal products availability process. + +4.0 SERVICES NOT COVERED UNDER THIS EXHIBIT. 4.1 New Releases or Major Releases for Software. + +4.2 Customization of existing Software for non-standard applications. + +4.3 Support or replacement of Product that is altered, modified, mishandled, destroyed or damaged by natural causes or damaged during unauthorized use. + +4.4 Software problems resulting from third party equipment or causes beyond Cisco's control. + +4.5 Any hardware upgrade of Product required to accept Updates. + +5.0 TERMINATION. Upon expiration or termination of the Agreement, (a) all rights and licenses of DISTRIBUTOR under this Support Exhibit shall terminate, (b) DISTRIBUTOR shall immediately discontinue all representations that DISTRIBUTOR + +Source: SCANSOURCE, INC., 10-K, 8/22/2019 + + + + + +Exhibit 10.38 + +provides maintenance services for Cisco Product, and (c) DISTRIBUTOR access to CCO shall terminate. + +6.0 SOFTWARE LICENSE. DISTRIBUTOR acknowledges that it may receive Software as a result of services provided under this Agreement. DISTRIBUTOR agrees that it is licensed to distribute such Software only on Product covered under the services and subject to the terms and conditions of this Agreement and the Software license granted with the original acquisition. Except as otherwise specified in this Exhibit, DISTRIBUTOR shall not copy, in whole or in part, Software or documentation; modify the Software, reverse compile or reverse assemble all or any portion of the Software; or rent, lease, distribute, sell, or create derivative works of the Software. + +Source: SCANSOURCE, INC., 10-K, 8/22/2019 + + + + + +Exhibit 10.38 + +APPENDIX 1 CISCO PROBLEM PRIORITIZATION AND ESCALATION GUIDELINE To ensure that all problems are reported in a standard format, Cisco has established the following problem priority definitions. These definitions will assist Cisco in allocating the appropriate resources to resolve problems. Distributor must assign a priority to all problems submitted to Cisco. [*****] + +Source: SCANSOURCE, INC., 10-K, 8/22/2019 + + + + + +Exhibit 10.38 + +EXHIBIT D SCANSOURCE FREIGHT POLICY + +TO: All SUPPLIERS SUBJECT: ROUTING INSTRUCTIONS In order to mm1m1ze inbound transportation cost, and to maximize control over transit time, tracing, and expediting, this routing guide has been issued. These instructions supercede all previous shipping instructions and are to be retained for ready reference. + +For shipments of Catalyst Telecom and Paracon products: Contact: + +Melinda Hamilton, Receiving Supervisor Phone: (800) 854-9570 ext. 8187 Fax: (901) 369-7876 Email: melinda.hamilton@partnerservicesinc.com + +Ship to address: ScanSource, Inc. 4020 Quest Way, Ste. 114 Memphis, TN. 38115 Receiving hours: 7:00 am - 2:00 pm + +For shipments of ScanSource and ScanSource Security products: Contact: + +Deborah Lucas, Receiving Manager + +Phone: (800) 854-9570 ext. 8111 Fax: (901) 367-0666 Email: deborah.lucas@partnerservicesinc.com + +Ship to address: ScanSource, Inc. 4100 Quest Way Memphis, TN. 38115 Receiving hours 7:00 am - 12:00 pm (noon) + +Note: A packing slip/manifest must be included with each shipment. It should include: a) A listing of products and quantities shipped b) Purchase order number (this must also show on the bill of lading) c) Date shipped d) Name of carrier e) Tracking or pro number + +Please comply with the following instructions when transportation is our responsibility: 1. All freight charges assigned to ScanSource must be shipped "freight collect". For UPS shipments ship "bill recipient". Please consolidate all of one day's shipments on one bill of lading. Exceptions will be charged back. Cisco may accomplish this by leveraging an order grouping process and setting up internal tools accordingly. OG will only be available for LTL or TL carriers. In order to support OG, ScanSource must include a LTL and TL carriers in their routing config in SRC tool. If combined shipments do not meet the minimum requirement to ship LTL or TL (i.e. number pieces, min weight) then no grouping will be done. 2. Do not insure shipments or declare value for carriage. 3. Each bill of lading must display the total number of cartons in the shipment, i.e. 24 cartons on 1 pallet. Bill of lading must be filled out completely. Please accurately describe products with the appropriate NMFC code. If you do not have the NMFC information available, ask the carrier to identify it for you. + +Source: SCANSOURCE, INC., 10-K, 8/22/2019 + + + + + +Exhibit 10.38 + +4. Indicate our purchase order number and number of boxes on all containers and shipping documents. 5. All pallets must be standard 40" wide X 48" long four way pallets. Primary fork entry from the 40" end. 6. Banding must be plastic, no metal. 7. Stack height on pallets is 48" maximum. + +All freight bills are audited, and any premium transportation charges incurred because these instructions have not been followed will be charged to Cisco. The charges will be based on the actual premium paid. ScanSource agrees to provide Cisco with advance notice in the event such a charge becomes necessary. Cisco will have the opportunity to validate any such charge prior to actually incurring same. + +If pickup service, via the carrier shown below, is not available in your area or if you have any other questions concerning this guide, please contact the ScanSource Traffic Department at (901) 362-0421, Bob Balsano. Your cooperation in following this program is appreciated. + +STANDARD SURFACE TRANSPORTATION + +I. Shipments, not individual cartons, weighing less than 250 lbs. and meeting the weight and size restrictions, must be shipped by United Parcel Service. II. Approved motor carriers for all LTL shipments from the States shown below are listed. + +CARRIER SERVICING + +FedEx Freight East Toll free number for pickups (800) 874-4723 -Alabama -Arkansas -Georgia -Illinois -Indiana -Kentucky -Louisiana -Minnesota -Mississippi -Missouri -New Jersey -North Carolina -Oklahoma -South Carolina -Tennessee -Texas -Virginia -West Virginia -Wisconsin + +Con-way: Arizona California Colorado Oregon Washington + +ALL REMAINING STATES Yellow Freight Toll free (800) 610-6500 + +PREMIUM ROUTINGS + +Source: SCANSOURCE, INC., 10-K, 8/22/2019 + + + + + +Exhibit 10.38 + +ScanSource Purchasing or Traffic Department must authorize use of premium freight (air, special truck, truckload) in advance. All premium shipments must state the total number of cartons in the shipment and the correct dimension of each carton. + +Source: SCANSOURCE, INC., 10-K, 8/22/2019 + + + + + +Exhibit 10.38 + +EXHIBIT E + +AFFILIATE LIST + +The following entities are either business units of Distributor or are wholly-owned subsidiaries of Distributor. For the purposes of this Agreement, and as set forth in Section 1 ("Definitions"), all such entities listed below shall be referred to herein as "Affiliate(s)." + +1. ScanSource, Inc. 2. ScanSource, Inc. d/b/a Catalyst Telecom 3. ScanSource, Inc. d/b/a Paracon 4. ScanSource Security Distribution, Inc. 5. T2 Supply, Inc. + +Source: SCANSOURCE, INC., 10-K, 8/22/2019 + + + + + +Exhibit 10.38 + +EXHIBIT F + +Software Transfer and Relicensing Policy September 15, 2000 This document sets forth Cisco's policy with respect to the transferability of any Cisco software ("Software"). A transfer occurs when: (1) the original or authorized subsequent licensee tries to convey or reassign its right to use the Software to another entity, or (2) the original lessor of Cisco used hardware (including bundled Software) ("Hardware") tries to reassign the original lessee's right to use the Software to another lessee, or the lessor tries to convey or reassign its right to lease the Hardware and Software bundle to another lessor. A rental would be treated the same as the lease situation as described in item 2 above. + +This policy applies to all Software whether Standalone or Embedded. Standalone Software is Software which is not required to operate the Hardware upon which it resides (i.e., ICSG software such as call center, unified messaging, network management software). Embedded Software is Software which is incorporated into the Hardware and is required for its operation (i.e., operating system software, certain features of IOS). + +Policy: + +Cisco's policy is that Software, whether Standalone or Embedded, is not transferable, except where a listed exception below applies, and except, of course, where Cisco's contract expressly allows it. Any other transfers will require the payment of a new license fee (see Global Price List). For products where there is no separate line item for the Software (i.e. the prices for both the Hardware and Software are bundled), and therefore, a fee cannot be determined, an exception will be made to allow for the transfer without the customer being required to obtain a new license (the customer may be required to pay an inspection fee), if (A) Software to be transferred (i) will be under a support contract provided by either Cisco or a Cisco​‐ authorized support partner or (ii) is still supported by Cisco; or (B) approval from the theatre Sales Controller has been obtained. + +Use of the Software will be governed by either the original license terms and conditions in place between Cisco and the original Software licensee or by the new license between Cisco and the new user. Cisco may withhold its consent to any transfer not conforming to this policy. + +License Fee: + +The License Fee is generally the same amount as the fee charged for a new license or a portion of the fee of a new license, unless otherwise noted on the Global Price List. + +It is the obligation of the transferor to obtain Cisco's consent and/or a new license before the transfer occurs. + +Exceptions: + +Provided the conditions of transfer are met as set forth below, the follow exceptions apply to the prohibition against transfer without written approval and payment of the applicable fee. These exceptions may be overridden by express terms in an applicable licensing agreement governing the transferability of Special License Software (Special License Software is the term now used in our templates to refer to ICSG Product) + +Affiliate: An entity may transfer its right to use a certain piece of Software to its Affiliate. An Affiliate is another entity where at least 50.1% of its voting power is owned or controlled by the transferring entity or where as least 50.1% of the transferring entity's voting power is owned or controlled by the transferee. + +Merger or Acquisition: An entity may transfer its right to use a certain piece of Software to the purchaser of all or substantially all of the capital stock of the transferor or all or substantially all of the assets of that portion of the transferor's business to which those licenses pertain. Lease: In a leasing situation where the original lessee/customer would like to buy out the equipment from the leasing company during or at the end of the lease term, the original lessee/customer may retain the license without paying a new License Fee, provided leasing company gives Cisco prior written notice. Also, if the original lessee/customer defaults under the lease and the leasing company takes the equipment back before the end of the lease term, the leasing company may transfer the license to the another lessee for the remainder of the original lease term, without paying Cisco a License Fee, upon 30 days' prior written notice to Cisco, or as soon as practicable if the equipment is re-leased before such 30- day period. If the new lease term is in + +Source: SCANSOURCE, INC., 10-K, 8/22/2019 + + + + + +Exhibit 10.38 + +excess of the original lease term, the leasing company is expected to pay Cisco a new License Fee on or before the expiration date of the original lease term. [NOTE: In the situation where a leasing company leases Cisco equipment to Customer A for a specified term and at the end of the lease term, the leasing company desires to lease the same equipment to Customer B, leasing company may not transfer the license without obtaining a new license from Cisco.)]. + +Outsource: Customer desires to outsource the operation, support and maintenance of its network to a third party (e.g. EDS) ("Third-Party Service Provider"), for the benefit of that customer. As part of the outsourcing, customer transfers all of its rights, title and interest to the assets, including certain Cisco products and software licenses, to the Third-Party Service Provider. Customer may transfer the license to the Third-Party Service Provider solely for the purposes of providing services to Customer upon 30 days' prior written notice to Cisco. + +All notices should be sent to sw-license@cisco.com or as indicated in the agreement between Cisco and the customer or transferor, if any. + +Conditions of Transfer: + +Transfers, in any event, shall only be allowed under the following conditions: + +◦ The parties involved in the transfer are not in breach of the agreement governing the use of the Software or any other agreement with Cisco; + +◦ Any additional services or charges incurred by Cisco as the result of any transfer shall be borne by the transferor and transferee; and + +◦ The parties involved in the transfer shall provide written prior notice of a permitted transfer to Cisco and the transferee shall, in a writing to Cisco, (i) assume all of the obligations of the transferor, and (ii) agree that transferee's use of the Software shall be governed by the terms of the then-current license agreement between Cisco and transferor or, at Cisco's sole discretion, by the terms of Cisco's then-current standard license agreement. + +Questions? + +Any questions or comments regarding this policy should be sent to sw-license@cisco.com. + +Source: SCANSOURCE, INC., 10-K, 8/22/2019 + + + + + +Exhibit 10.38 + +EXHIBIT G + +Cisco End of Life Policy + +Products reach the end of their Product Life Cycle for a number of reasons. These reasons may be due to market demands, technology innovation and development driving changes in the product, or the products simply mature over time and are replaced by functionally richer technology. While this is an established part of the overall product life cycle, Cisco Systems recognizes that end-of-life milestones often prompt companies to review the way in which such end-of-sale and end-of-life milestones impact the Cisco products in their networks. With that in mind, we have set out below Cisco's end-of-life policy to help customers better manage their end-of-life transition and to understand the role that Cisco can play in helping to migrate to alternative Cisco platforms and technology. + +The End of Life Policy only applies to End of Life and End of Sale announcements made in all Theaters on or after November 30, 2002 for all Cisco product lines. The Policy does not apply to product that is already subject to an End of Life and/or End of Sale announcement. The general policy guidelines are: + +1. As a general rule, Cisco will provide 6 months' notice of the affected product's end-of-sale date and/or the last day when the affected product can be ordered. This notice will appear on Cisco.com site (http://www.cisco.com/en/US/products/prod_end_of_life.html) and we encourage you to visit this site regularly as it contains useful information regarding Cisco's end-of-life program. Sign up to receive notification here: http://www.cisco.com/pcgi-bin/Support/FieldNoticeTool/field-notice + +2. Access to Cisco's Technical Assistance Center (TAC) will be available 24 hours a day, seven days a week for a period of 5 years from the end-of-sale date for hardware and operating system software issues and for a period of 3 years from the end-of-sale date for application software issues. + +3. Spares or replacement parts for hardware will be available for a period of 5 years from the end-of​ sale date. We will provide spares and replacement parts in accordance with our Return Materials Authorization (RMA) process. + +4. Software support will be as follows + +a. For the first year following the end-of-sale date, we will provide bug fixes, maintenance releases, workarounds, or patches for critical bugs reported via the TAC or Cisco.com Web site. + +b. After the first year and for Operating System SW -where available- we will provide bug fixes, maintenance releases, workarounds or patches for a period of 4 years for operating system software. Bear in mind that it may be necessary to use software upgrade release to correct a reported problem. + +c. After the first year and for Application SW -where available - we will provide bug fixes, maintenance releases, workarounds or patches for a period of 2 years for application software. Bear in mind that it may be necessary to use software upgrade release to correct a reported problem. + +5. You will need to ensure that you have a current and fully paid support contract with Cisco. Please contact your Support Account Manager regarding fees payable during the end-of-life period so that we can support you right through the end-of-life transition period. + +6. Below are guidelines that should be followed to ensure that you receive effective support for the affected products within your network: + +a. For hardware or software that is not covered under a service contract, customers may add the product(s) to a current contract or purchase a new contract until 12 months after the end-of-sale date. + +b. Service contracts that have not been renewed or have lapsed after 12 months of end-of​ sale date are not re-newable. + +c. Renewal of your service contract will generally be available until the last year of support, but will not extend + +Source: SCANSOURCE, INC., 10-K, 8/22/2019 + + + + + +Exhibit 10.38 + +beyond the last date of support. + +The end-of-life milestones and Cisco commitments are presented in Table 1. + +Table 1. Standard Guideline for End-of-Life Milestones Milestone - 6 mos Day 0 1 Year 2 Year 3 Year 4 year 5 Year + +End-of-sale date + +End-of-Sale Notice Period + +Operating System Software Maintenance Support See 4(a) See 4(b) above + +Add or attach new service contracts + +Renew service contracts - for HW & Operating System SW + +Hardware Repair or Replacement + +Customer Service and Support of HW & Operating System SW (TAC access & support) + +Application Software maintenance support See 4(a) See 4(c) above + +Renew service contracts - for Application SW + +Here is an explanation of some of the terms that we have used in this notice: End of Product Life Cycle: A process that guides the final business operations associated with the product life cycle. The end-of-life process consists of a series of technical and business milestones and activities that, once completed, make a product obsolete. Once obsolete, the product is not sold, manufactured, improved, repaired, maintained, or supported. + +End-of-sale date: The last date to order the product through Cisco point-of-sale mechanisms. The product is no longer for sale. + +Hardware: The physical product and its physical components. + +Operating System Software: Cisco operating system software that runs on Cisco hardware Application software: Cisco software that requires the presence of some non-Cisco operating system software. + +Software Maintenance support: The time period that Cisco may release any software maintenance releases or bug fixes to the software product. After this date, Cisco Engineering will no longer develop, repair, maintain, or test the product software. + +Source: SCANSOURCE, INC., 10-K, 8/22/2019 \ No newline at end of file diff --git a/full_contract_txt/ScansourceInc_20190822_10-K_EX-10.38_11793958_EX-10.38_Distributor Agreement2.txt b/full_contract_txt/ScansourceInc_20190822_10-K_EX-10.38_11793958_EX-10.38_Distributor Agreement2.txt new file mode 100644 index 0000000000000000000000000000000000000000..4f6fe2716d0e5352038e252f6d1a55bf6d0ca616 --- /dev/null +++ b/full_contract_txt/ScansourceInc_20190822_10-K_EX-10.38_11793958_EX-10.38_Distributor Agreement2.txt @@ -0,0 +1,77 @@ +Exhibit 10.38 + +EXHIBIT C + +Software License Agreement [v.08.05.03] + +PLEASE READ THIS SOFTWARE LICENSE AGREEMENT CAREFULLY BEFORE DOWNLOADING, INSTALLING OR USING CISCO OR CISCO- SUPPLIED SOFTWARE. + +BY DOWNLOADING OR INSTALLING THE SOFTWARE, OR USING THE EQUIPMENT THAT CONTAINS THIS SOFTWARE, YOU ARE BINDING THE BUSINESS ENTITY THAT YOU REPRESENT ("CUSTOMER") TO THIS AGREEMENT. IF YOU DO NOT AGREE TO ALL OF THE TERMS OF THIS AGREEMENT, THEN (A) DO NOT DOWNLOAD, INSTALL OR USE THE SOFTWARE, AND (B) YOU MAY RETURN THE SOFTWARE FOR A FULL REFUND, OR, IF THE SOFTWARE IS SUPPLIED AS PART OF ANOTHER PRODUCT, YOU MAY RETURN THE ENTIRE PRODUCT FOR A FULL REFUND. YOUR RIGHT TO RETURN AND REFUND EXPIRES 30 DAYS AFTER PURCHASE FROM CISCO OR AN AUTHORIZED CISCO RESELLER, AND APPLIES ONLY IF CUSTOMER IS THE ORIGINAL END USER PURCHASER. + +The following terms of this Software License Agreement ("Agreement') govern Customer's access and use of the Software, except to the extent (a) there is a separate signed agreement between Customer and Cisco governing Customer's use of the Software or (b) the Software includes a separate "click-accept" license agreement as part of the installation and/or download process. To the extent of a conflict between the provisions of the foregoing documents, the order of precedence shall be (1) the signed agreement, (2) the click-accept agreement, and (3) this Software License Agreement. + +License. Subject to the terms and conditions of this Agreement, Cisco Systems, Inc. or its subsidiary licensing the Software instead of Cisco Systems, Inc. ("Cisco"), grants to Customer a nonexclusive and nontransferable license to use for Customer's internal business purposes the Software and the Documentation for which Customer has paid the required license fees. "Documentation" means written information (whether contained in user or technical manuals, training materials, specifications or otherwise) regarding the Software and made available by Cisco in any manner (including on CD-Rom, or on-line). + +Customer's license to use the Software shall be limited to, and Customer shall not use the Software in excess of, a single hardware chassis or card or that number of agent(s), concurrent users, sessions, IP addresses, port(s), seat(s), server(s) or site(s), as set forth in the applicable Purchase Order which has been accepted by Cisco and for which Customer has paid to Cisco the required license fee. + +Unless otherwise expressly provided in the Documentation, Customer shall use the Software solely as embedded in, for execution on, or (where the applicable documentation permits installation on non-Cisco equipment) for communication with Cisco equipment owned or leased by Customer. NOTE: For evaluation or beta copies for which Cisco does not charge a license fee, the above requirement to pay license fees does not apply. + +General Limitations. Except as otherwise expressly provided under this Agreement, Customer shall have no right, and Customer specifically agrees not to: + +(i) transfer, assign or sublicense its license rights to any other person or entity, or use the Software on unauthorized or secondhand Cisco equipment, and Customer acknowledges that any attempted transfer, assignment, sublicense or use shall be void; + +(ii) make error corrections to or otherwise modify or adapt the Software or create derivative works based upon the Software, or permit third parties to do the same; + +(iii) decompile, decrypt, reverse engineer, disassemble or otherwise reduce the Software to human- readable form; or + +(iv) use or permit the Software to be used to perform services for third parties without the express written authorization of Cisco. + +To the extent required by law, and at Customer's written request, Cisco shall provide Customer with the interface information needed to achieve interoperability between the Software and another independently created program, on payment of Cisco's + +Source: SCANSOURCE, INC., 10-K, 8/22/2019 + + + + + +Exhibit 10.38 + +applicable fee, if any. Customer shall observe strict obligations of confidentiality with respect to such information. + +Software, Upgrades and Additional Copies. For purposes of this Agreement, "Software" shall include (and the terms and conditions of this Agreement shall apply to) computer programs, including firmware, as provided to Customer by Cisco or an authorized Cisco reseller, and any upgrades, updates, bug fixes or modified versions thereto (collectively, "Upgrades") or backup copies of the Software licensed or provided to Customer by Cisco or an authorized Cisco reseller. NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT: (1) CUSTOMER HAS NO LICENSE OR RIGHT TO USE ANY ADDITIONAL COPIES OR UPGRADES UNLESS CUSTOMER, AT THE TIME OF ACQUIRING SUCH COPY OR UPGRADE, ALREADY HOLDS A VALID LICENSE TO THE ORIGINAL SOFTWARE AND HAS PAID THE APPLICABLE FEE FOR THE UPGRADE; (2) USE OF UPGRADES IS LIMITED TO CISCO EQUIPMENT FOR WHICH CUSTOMER IS THE ORIGINAL END USER PURCHASER OR LESSEE OR WHO OTHERWISE HOLDS A VALID LICENSE TO USE THE SOFTWARE WHICH IS BEING UPGRADED; AND (3) THE MAKING AND USE OF ADDITIONAL COPIES IS LIMITED TO NECESSARY BACKUP PURPOSES ONLY. + +Proprietary Notices. Customer agrees to maintain and reproduce all copyright and other proprietary notices on all copies, in any form, of the Software in the same form and manner that such copyright and other proprietary notices are included on the Software. Except as expressly authorized in this Agreement, Customer shall not make any copies or duplicates of any Software without the prior written permission of Cisco. + +Protection of Information. Customer agrees that aspects of the Software and associated Documentation, including the specific design and structure of individual programs, are trade secrets and/or copyrighted materials of Cisco, its suppliers or licensors. Customer shall not disclose, provide, or otherwise make available such trade secrets or copyrighted material in any form to any third party without the prior written consent of Cisco. Customer shall implement reasonable security measures to protect such trade secrets and copyrighted materials. Title to Software and Documentation shall remain solely with Cisco, its suppliers or licensors. + +Term and Termination. This Agreement and the license granted herein shall remain effective until terminated. Customer may terminate this Agreement and the license at any time by destroying all copies of Software including any Documentation. Customer's rights under this Agreement will terminate immediately without notice from Cisco if Customer fails to comply with any provision of this Agreement. Upon termination, Customer shall destroy all copies of Software and Documentation in its possession or control. + +Customer Records. Customer grants to Cisco and its independent accountants the right to examine Customer's books, records and accounts during Customer's normal business hours to verify compliance with this Agreement. In the event such audit discloses non-compliance with this Agreement, Customer shall promptly pay to Cisco the appropriate license fees. + +Export. Software, including technical data, may be subject to U.S. export control laws, including the U.S. Export Administration Act and its associated regulations, and may be subject to export or import regulations in other countries. Customer agrees to comply strictly with all such regulations and acknowledges that it has the responsibility to obtain licenses to export, re-export, or import Software. + +Government End User Purchasers. The Software and Documentation qualify as "commercial items," as that term is defined at 48 C.F.R. 2.101, consisting of "commercial computer software" and "commercial computer software documentation" as such terms are used in 48 C.F.R. 12.212. Consistent with 48 C.F.R.12.212 and 48 C.F.R. 227.7202-1 through 227.7202-4, Customer will provide to Government end user, or, if this Agreement is direct Government end user will acquire, the Software and software documentation with only those rights set forth herein that apply to non- governmental customers. Use of this Software and Documentation constitutes agreement by the Government entity that the computer software and Documentation is commercial, and constitutes acceptance of the rights and restrictions herein. + +Limited Warranty Cisco warrants that commencing from the date of shipment to Customer (but in case of resale by an authorized Cisco reseller, commencing not more than ninety (90) days after original shipment by Cisco), and continuing for a period of the longer of (a) ninety (90) days or (b) the software warranty period (if any) set forth in the warranty card accompanying the Product (if any): (a) the media on which the Software is furnished will be free of defects in materials and workmanship under normal use; and (b) the Software substantially conforms to its published specifications. The date of shipment of a Product by Cisco is set forth on the packaging material in which the Product is shipped. Except for the foregoing, the Software is provided AS IS. This limited warranty extends only to the Customer who is the original licensee. Customer's sole and exclusive remedy and the entire liability of Cisco and its suppliers and licensors under this limited warranty will be, at Cisco's option, repair, replacement, + +Source: SCANSOURCE, INC., 10-K, 8/22/2019 + + + + + +Exhibit 10.38 + +or refund of the Software if reported (or, upon request, returned) to Cisco or the party supplying the Software to Customer, if different than Cisco. In no event does Cisco warrant that the Software is error free or that Customer will be able to operate the Software without problems or interruptions. In addition, due to the continual development of new techniques for intruding upon and attacking networks, Cisco does not warrant that the Software or any equipment, system or network on which the Software is used will be free of vulnerability to intrusion or attack. + +Restrictions. This warranty does not apply if the Software, Product or any other equipment upon which the Software is authorized to be used (a) has been altered, except by Cisco, (b) has not been installed, operated, repaired, or maintained in accordance with instructions supplied by Cisco, (c) has been subjected to abnormal physical or electrical stress, misuse, negligence, or accident; or (d) is licensed, for beta, evaluation, testing or demonstration purposes for which Cisco does not charge a purchase price or license fee. + +DISCLAIMER OF WARRANTY. EXCEPT AS SPECIFIED IN THIS WARRANTY, ALL EXPRESS OR IMPLIED CONDITIONS, REPRESENTATIONS, AND WARRANTIES INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTY OR CONDITION OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NONINFRINGEMENT, SATISFACTORY QUALITY OR ARISING FROM A COURSE OF DEALING, LAW, USAGE, OR TRADE PRACTICE, ARE HEREBY EXCLUDED TO THE EXTENT ALLOWED BY APPLICABLE LAW AND ARE EXPRESSLY DISCLAIMED BY CISCO, ITS SUPPLIERS AND LICENSORS. TO THE EXTENT AN IMPLIED WARRANTY CANNOT BE EXCLUDED, SUCH WARRANTY IS LIMITED IN DURATION TO THE WARRANTY PERIOD. BECAUSE SOME STATES OR JURISDICTIONS DO NOT ALLOW LIMITATIONS ON HOW LONG AN IMPLIED WARRANTY LASTS, THE ABOVE LIMITATION MAY NOT APPLY. THIS WARRANTY GIVES CUSTOMER SPECIFIC LEGAL RIGHTS, AND CUSTOMER MAY ALSO HAVE OTHER RIGHTS WHICH VARY FROM JURISDICTION TO JURISDICTION. This disclaimer and exclusion shall apply even if the express warranty set forth above fails of its essential purpose. + +General Terms Applicable to the Limited Warranty Statement and Software License + +Disclaimer of Liabilities. IN NO EVENT WILL CISCO OR ITS SUPPLIERS BE LIABLE FOR ANY LOST REVENUE, PROFIT, OR LOST OR DAMAGED DATA, OR FOR SPECIAL, INDIRECT, CONSEQUENTIAL, INCIDENTAL, OR PUNITIVE DAMAGES HOWEVER CAUSED AND REGARDLESS OF THE THEORY OF LIABILITY OR WHETHER ARISING OUT OF THE USE OF OR INABILITY TO USE SOFTWARE OR OTHERWISE AND EVEN IF CISCO OR ITS SUPPLIERS OR LICENSORS HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. In no event shall Cisco's or its suppliers' or licensors' liability to Customer, whether in contract, tort (including negligence), or otherwise, exceed the price paid by Customer for the Software that gave rise to the claim or if the Software is part of another Product, the price paid for such other Product. The foregoing limitations shall apply even if the above​ stated warranty fails of its essential purpose. BECAUSE SOME STATES OR JURISDICTIONS DO NOT ALLOW LIMITATION OR EXCLUSION OF CONSEQUENTIAL OR INCIDENTAL DAMAGES, THE ABOVE LIMITATION MAY NOT APPLY TO YOU. + +The Warranty and the Software License shall be governed by and construed in accordance with the laws of the State of California, without reference to principles of conflict of laws. The United Nations Convention on the International Sale of Goods shall not apply. If any portion hereof is found to be void or unenforceable, the remaining provisions of the Agreement shall remain in full force and effect. Except as expressly provided herein, this Agreement constitutes the entire agreement between the parties with respect to the license of the Software and supersedes any conflicting or additional terms contained in any purchase order or elsewhere all of which terms are excluded. + +Source: SCANSOURCE, INC., 10-K, 8/22/2019 \ No newline at end of file diff --git a/full_contract_txt/ScansourceInc_20190822_10-K_EX-10.39_11793959_EX-10.39_Distributor Agreement.txt b/full_contract_txt/ScansourceInc_20190822_10-K_EX-10.39_11793959_EX-10.39_Distributor Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..b3acab483c131a782a633d43cb1c4568b0b6294b --- /dev/null +++ b/full_contract_txt/ScansourceInc_20190822_10-K_EX-10.39_11793959_EX-10.39_Distributor Agreement.txt @@ -0,0 +1,107 @@ +Exhibit 10.39 + +IN ACCORDANCE WITH ITEM 601(b) OF REGULATION S-K, CERTAIN IDENTIFIED INFORMATION (THE "CONFIDENTIAL INFORMATION") HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM IF PUBLICLY DISCLOSED. THE CONFIDENTIAL INFORMATION IS DENOTED HEREIN BY [*****]. + +AMENDMENT NO. 3 TO THE NONEXCLUSIVE VALUE ADDED DISTRIBUTOR AGREEMENT + +This Amendment No. 3 ("Amendment No. 3") to the Nonexclusive Value Added Distributor Agreement, as amended ("Agreement''), by and between Cisco Systems, Inc. ("Cisco"), a California corporation having Its principal place of business at 170 West Tasman Drive, San Jose, CA, 95134, and ScanSource, Inc. ("Distributor"), a South Carolina corporation with a place of business at 6 Logue Court, Greenville, South Carolina, 29615, is effective as of the date last signed below ("Amendment Effective Date"). All capitalized terms contained herein shall have the same meaning as the terms defined in the Agreement unless specifically modified in this Amendment. + +WHEREAS, Cisco and Distributor have previously entered into the Agreement dated January 22, 2007, and + +WHEREAS, Cisco and Distributor wish to renew and update certain terms and conditions in the Agreement regarding payment; and, + +NOW WHEREFORE, the parties agree to further amend the Agreement as follows: + +1. The Term of the Agreement is hereby extended to January 20, 2012 unless sooner terminated as provided for in the Agreement. If the Agreement expired prior to the Amendment Effective Date, any orders received and Products and Services purchased between the date of expiration and the Amendment Effective Date shall be in all respects deemed made under the Agreement as in effect prior to this Amendment. The parties further agree that if Distributor places Purchase Orders after the expiration of the Agreement, and Cisco accepts such Purchase Orders, then any such Purchase Orders shall be governed by the terms and conditions of the Agreement; provided, however that acceptance by Cisco of any Purchase Order placed after the Agreement has expired will not be considered as an extension of the term of the Agreement nor a renewal thereof. Notwithstanding Cisco's right to extend the term of the Agreement, each party acknowledges that the Agreement shall always be interpreted as being limited in duration to a definite term and that the other party has made no commitments whatsoever regarding the renewal of the Agreement beyond those expressly agreed in writing. + +2. Section 6.0 ("Payment") of the Agreement is modified by adding the following new Section 6.7: 6.7 [*****] + +3. Section 12 ("Inventory Balance") is deleted in its entirety and hereby replaced with the following: + +12.0 INVENTORY BALANCE + +12.1 Distributor shall have the option to return to Cisco, for credit, up [*****] of the dollar value of Products from the Wholesale Price List (or, if no Wholesale Price Lists exists for Distributor's Territory, then the applicable price list) shipped to Distributor, net of credits, less returns to Cisco, in the preceding [*****] period (the "Balancing Cap") of the preceding Cisco fiscal quarter. The above-referenced cap shall be determined based on all Product purchases made under this Agreement. The responsibility to manage the Balancing Cap shall rest solely upon Distributor. Distributor shall be entitled to return Product once per quarter, provided such returns do not exceed the Balancing Cap. "Dead on Arrival" and Obsolete Products returned pursuant to Section 13 of this Agreement shall be excluded from calculation of the Balancing Cap. Cisco shall credit Distributor's account in the amount of the price paid by Distributor therefore, less any price protection credits issued to Distributor related to the Product returned (the "Return Credit"). + +12.2 For all returns made pursuant to this Section 12, the following requirements must be met by Distributor: + +12.2.1 [*****] + +12.2.2 [*****] + +Source: SCANSOURCE, INC., 10-K, 8/22/2019 + + + + + +Exhibit 10.39 + +12.2.3 Distributor shall bear all shipping and handling charges to the Cisco designated site set forth ln Cisco's published Return Materials Authorization ("RMA") Policy for Product returned for credit; + +12.2.4 Distributor shall obtain an RMA number prior to returning any Product to Cisco. Distributor shall follow Cisco's then-current RMA process; and + +12.2.5 Distributor reports must be provided to Cisco In accordance with the terms of this Agreement. + +4.0 Section 21.0 ("Compliance with Laws") is hereby deleted in its entirety and replaced with the following: + +21.0 COMPLIANCE WITH LAWS, INCLUDING ANTI-CORRUPTIONLAWS + +21.1 In connection with the sale or distribution of Cisco Products or Services, or otherwise in carrying out its obligations under this Agreement, Distributor represents and warrants the following: + +(a) Distributor will comply with all country, federal, state and local laws, ordinances, codes, regulations, rules, policies and procedures, Including, without limitation, all anti-corruption laws, Including, the U.S. Foreign Corrupt Practices Act (Applicable Laws). Distributor can find more information about the Foreign Corrupt Practices Act at the following URL: http://www.usdoj.gov/criminal/fraud/docs/dojdocb.html, o r b y contacting publicsectorcompllance@cisco.com. + +(b) Distributor shall not take any action or permit or authorize any action in violation of the Applicable Laws; + +(c) Distributor will not use money or other consideration paid by Cisco (and Distributor will not use its own money on Cisco's behalf) for any unlawful purposes, including any purposes violating Applicable Laws, such as direct or indirect payments, for the purpose of assisting Cisco in obtaining or retaining business, to any of the following: + +(i) Government officials (including any person holding an executive, legislative, judicial or administrative office, whether elected or appointed, or of any public international organization, such as the United Nations or World Bank, or any person acting in any official capacity for or on behalf of such government, public enterprise or state-owned business); (ii) Political parties or party officials; (iii) Candidates for political office; or (iii) Any person, while knowing that all or a portion of such money or thing of value will be offered, given or promised, directly or indirectly to any of the above identified persons or organizations. + +(d) Distributor remains responsible for undertaking appropriate and reasonable measures to ensure that its own relevant subcontractors, consultants, agents or representatives who interact with government​ affiliated organizations comply with applicable anti-corruption laws; + +(e) Distributor's key personnel who directly support Cisco's account have or will have completed training (provided by Distributor, Cisco Cisco's on-line anti-corruption training is available in numerous languages and is free of charge for up to five of Distributor's personnel at http://corpedia.com/clients/cisco/pre_reg.asp?lid-300446001., or another third party) on compliance with applicable anti-corruption laws within the past 12 months (from the date when this Agreement becomes effective); + +(f) Distributor's record-keeping obligations, set forth In the "Audit" provision herein, shall apply equally to Distributor's representations and warranties In this section, Cisco's audit rights, as set forth herein, and Distributor's compliance with the Applicable Laws; + +(g) In no event shall Cisco be obligated under this Agreement to take any action or omit to take any action that Cisco believes, in good faith, would cause it to be In violation of any laws of the Territory(ies) identified in this Agreement or the Applicable Laws; + +(h) Distributor Is unaware of any of Its directors, officers or employees serving as government officials or employees (at any level of government); + +(i) The directors, officers and employees of Distributor's business are not employees of Cisco (Including any of Its affiliated companies); + +Source: SCANSOURCE, INC., 10-K, 8/22/2019 + + + + + +Exhibit 10.39 + +(j) Neither Distributor nor, to Distributor's knowledge, any of its directors or officers have been formally charged with, convicted of, or plead guilty to, any offense involving fraud or corruption; + +(k) Distributor, its directors and officers have not been listed by any government or public agency (such as the United Nations or World Bank) as debarred, suspended, or proposed for suspension or debarment or otherwise ineligible for government procurement programs; + +(l) Distributor has not offered to pay, nor has Distributor paid, nor will Distributor pay, any political contributions to any person or entity on behalf of Cisco; + +(m) If Distributor is a non-governmental entity, it will notify Cisco In writing lf any of its owners, partners, principals, officers, or employees are or become, during the term of this Agreement, officials, officers or representatives of any government, political party or candidate for political office outside the United States and are responsible for a decision regarding obtaining or retaining business for Cisco Products or Services by such government. Distributor will also promptly inform Cisco if any other portion of the statements set forth in subsections (g) through (k) above changes. + +(n) Notwithstanding any other provision in this Agreement, Cisco may terminate this Agreement immediately upon written notice if Distributor breaches any of the representations and warranties set forth in this section. + +(o) Distributor can report to Cisco any concerns it may have regarding any business practices by emailing ethics@cisco.com, or by calling Cisco's Helpline toll free number In North America 1- 877-571-1700 or worldwide number (reverse calling charges to Cisco) 001-770-776-5611. Contact ethics@cisco.com for other Cisco) 001-770-776-5611. Contact ethics@cisco.com for other available regional hotline numbers; + +(p) Distributor has read Cisco's "Compliance with Global Anticorruption Laws by Cisco' Partners", published at http://www.cisco.com/legal/anti corruption.html. + +5.0 All capitalized terms not defined in this Amendment No. 3 shall have the meaning assigned to them in the Agreement. In the event of conflict between the terms of this Amendment No. 3 and the Agreement, the terms of this Amendment No. 3 shall prevail. All other terms and conditions of the Agreement remain unchanged. + +IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 3 to be duly executed as of the Effective Date. + +Cisco Systems, Inc. ScanSource, Inc. + +BY: /s/ S.K. Vereschagin BY: /s/ Jeffry E. Yelton (Authorized Signature) (Authorized Signature) + +NAME: S.K. Vereschagin NAME: Jeff Yelton + +TITLE: Director, Finance TITLE: President POS/Barocoding + +DATE: 8/4/10 DATE: 7-29-10 + +Source: SCANSOURCE, INC., 10-K, 8/22/2019 \ No newline at end of file diff --git a/full_contract_txt/SigaTechnologiesInc_20190603_8-K_EX-10.1_11695818_EX-10.1_Promotion Agreement.txt b/full_contract_txt/SigaTechnologiesInc_20190603_8-K_EX-10.1_11695818_EX-10.1_Promotion Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..b001d956876526f8c0f6b2831d9b1c3fd221941e --- /dev/null +++ b/full_contract_txt/SigaTechnologiesInc_20190603_8-K_EX-10.1_11695818_EX-10.1_Promotion Agreement.txt @@ -0,0 +1,737 @@ +Exhibit 10.1 Certain portions of this exhibit have been omitted pursuant to Rule 601(b)(10) of Regulation S-K. The omitted information is (i) not material and (ii) would likely cause competitive harm to the Company if publicly disclosed. Information that has been omitted has been noted in this document with a placeholder identified by the mark "[***]". EXECUTION COPY PROMOTION AGREEMENT + +by and between + +SIGA TECHNOLOGIES, INC. + +and + +MERIDIAN MEDICAL TECHNOLOGIES, INC., a Pfizer company + +Source: SIGA TECHNOLOGIES INC, 8-K, 6/3/2019 + + + + + +TABLE OF CONTENTS PAGE ARTICLE 1 DEFINITIONS 1 ARTICLE 2 GRANT OF RIGHTS 11 2.1 Grant of Rights to MMT 11 2.2 Negative Covenants 11 2.3 Non-Compete Covenant 11 2.4 Retained Rights 12 2.5 No Implied Licenses 12 2.6 [***] 12 ARTICLE 3 GOVERNANCE 12 3.1 Joint Steering Committee 12 3.2 Good Faith 12 3.3 Scope of Governance 13 ARTICLE 4 PROMOTION AND OTHER COMMERCIALIZATION 13 4.1 Promotion in the Territory 13 4.2 Diligence 14 4.3 Customer Contracts 14 4.4 Regulatory Matters 15 4.5 Discontinued Countries 15 ARTICLE 5 FORECASTING AND ORDERING 15 5.1 Product Forecasts 15 5.2 Purchase Orders 15 5.3 Delivery 16 5.4 Supply Limitation 16 5.5 Supply Penalties 16 5.6 Adverse Event Reporting 16 ARTICLE 6 PAYMENTS 16 6.1 Promotion Fee 16 6.2 Payments 17 6.3 Currency 17 6.4 Records 17 6.5 Audits 18 6.6 Blocked Payment and Indemnification 19 6.7 Source of Recovery 19 6.8 Taxes 19 ARTICLE 7 INTELLECTUAL PROPERTY 20 7.1 Ownership of SIGA Intellectual Property 20 7.2 Intellectual Property Maintenance 20 7.3 New Patents and Trademarks 20 + +-i- + +Source: SIGA TECHNOLOGIES INC, 8-K, 6/3/2019 + + + + + +TABLE OF CONTENTS (CONTINUED) PAGE ARTICLE 8 REPRESENTATIONS AND WARRANTIES; COVENANTS 21 8.1 Mutual Representations and Warranties 21 8.2 Additional Representations, Warranties and Covenants of SIGA 22 8.3 Additional Representations and Warranties of MMT 26 8.4 Covenants 27 8.5 No Other Representations or Warranties 29 ARTICLE 9 INDEMNIFICATION 29 9.1 Indemnification by SIGA 29 9.2 Indemnification by MMT 30 9.3 Indemnification Procedures 30 9.4 Insurance 31 9.5 Limitation of Liability 31 ARTICLE 10 CONFIDENTIALITY 31 10.1 Confidentiality 31 10.2 Authorized Disclosure 32 10.3 Technical Publication 33 10.4 Publicity; Terms of Agreement 33 10.5 Prior Confidentiality Agreements 34 10.6 Return of Confidential Information 34 10.7 Unauthorized Use 34 10.8 Exclusive Property 34 ARTICLE 11 TERM AND TERMINATION 35 11.1 Term 35 11.2 Termination for Cause 35 11.3 Termination Upon Certain Changes of Control 36 11.4 Termination for Failure to [***] 36 11.5 Termination for Convenience 36 11.6 Effect of Termination 36 11.7 Survival 36 ARTICLE 12 DISPUTE RESOLUTION 36 12.1 Executive Officer Resolution 36 12.2 Governing Law 37 12.3 Jurisdiction 37 12.4 NO JURY TRIAL 37 ARTICLE 13 MISCELLANEOUS 38 13.1 Entire Agreement; Amendment 38 13.2 Force Majeure 38 + +-ii- + +Source: SIGA TECHNOLOGIES INC, 8-K, 6/3/2019 + + + + + +TABLE OF CONTENTS (CONTINUED) PAGE 13.3 Notices 38 13.4 No Strict Construction; Interpretation; Headings 39 13.5 Assignment 40 13.6 Performance by Affiliates 40 13.7 Further Assurances and Actions 40 13.8 Severability 41 13.9 No Waiver 41 13.10 Relationship of the Parties 41 13.11 English Language 42 13.12 Counterparts 42 13.13 Schedules 42 13.14 Expenses 42 + +Exhibit A Permitted Subcontractors Exhibit B Business Plan Exhibit C SIGA Press Release Schedule 1 SIGA Patents Schedule 2 SIGA Trademarks Schedule 3 Safety Reporting Requirements Schedule 8.2(b) Encumbrances + +-iii- + +Source: SIGA TECHNOLOGIES INC, 8-K, 6/3/2019 + + + + + +PROMOTION AGREEMENT This PROMOTION AGREEMENT (this "Agreement") is entered into as of May 31, 2019 (the "Effective Date") by and between SIGA TECHNOLOGIES, INC., a Delaware corporation having an address at 31 East 62nd Street, New York, NY 10065 ("SIGA"), and MERIDIAN MEDICAL TECHNOLOGIES, INC., a Pfizer company, and Delaware corporation having an address at 6350 Stevens Forest Road, Suite #301, Columbia, MD 21046 ("MMT"). SIGA and MMT are sometimes referred to individually as a "Party" and collectively as the "Parties". RECITALS WHEREAS, SIGA developed the FDA-approved oral capsule formulation of TPOXX® (tecovirimat) for the treatment of smallpox; WHEREAS, MMT possesses resources and expertise in the marketing, promoting, advertising, offering for sale and selling of pharmaceutical and antiviral products; and WHEREAS, MMT desires to obtain from SIGA, and SIGA desires to grant to MMT certain exclusive licenses in the Territory to market, promote, advertise, offer for sale and sell the Product in the Field in the Territory, as set forth herein. NOW, THEREFORE, in consideration of the foregoing premises and the mutual promises, covenants and conditions contained in this Agreement, the Parties hereby agree as follows: ARTICLE 1 + +DEFINITIONS "Active Country" has the meaning set forth in Section 4.4(b). "Affiliate" means, with respect to each Party, any corporation, firm, partnership or other entity or Person which directly or indirectly controls or is controlled by or is under common control with that Party. A Person will be regarded as in "control" (including, with correlative meaning, the terms "controlled by" and "under common control with") of another Person if it (a) owns or controls at least fifty percent (50%) of the equity securities of the subject Person entitled to vote in the election of directors, or (b) possesses, directly or indirectly, the power to direct or cause the direction of the management or policies of any such Person (whether through ownership of securities or other ownership interests, by contract or otherwise). "Alliance Manager" has the meaning set forth in Section 3.1(d). "Anti-Corruption Law" means any applicable Law of any jurisdiction concerning or relating to bribery, kickbacks or corruption including the United States Foreign Corrupt Practices Act of 1977, the Anti-Kickback Statute, the UK Bribery Act 2010, any Laws enacted pursuant to the OECD Convention on Combating Bribery of Foreign Public Officials, and other similar anti-corruption legislation in other jurisdictions, as may be amended from time to time and each to the extent applicable to a Party. + +Source: SIGA TECHNOLOGIES INC, 8-K, 6/3/2019 + + + + + +"Audit Report" has the meaning set forth in Section 6.5. "Bankruptcy Code" means, as applicable, the U.S. Bankruptcy Code, as amended from time to time, and the rules and regulations and guidelines promulgated thereunder or the bankruptcy laws of any other country or Governmental Authority, as amended from time to time, and the rules and regulations and guidelines promulgated thereunder. "Binding Portion of Forecast" has the meaning set forth in Section 5.1(a). "Business Day" means any day other than a day on which the commercial banks in New York City are authorized or required to be closed. "Business Plan" has the meaning set forth in Section 4.1(a). "Calendar Quarter" means a period of three (3) consecutive months ending on the last day of March, June, September, or December, respectively, except that the first Calendar Quarter of the Term shall commence on the Effective Date and end on June 30, 2019 and the last Calendar Quarter shall end on the last day of the Term. "Calendar Year" means a period of twelve (12) consecutive months beginning on January 1 and ending on December 31, except that the first Calendar Year of the Term shall commence on the Effective Date and end on December 31 of the year in which the Effective Date occurs and the last Calendar Year of the Term shall commence on January 1 of the year in which the Term ends and end on the last day of the Term. "Change of Control" means, with respect to either Party, [***]. "Claims" has the meaning set forth in Section 9.1. "Commercialize" means to Promote, distribute, obtain Pricing Approvals and Reimbursement Approvals, import, export and/or conduct other commercialization activities, and "Commercialization" means commercialization activities related to a product, including any and all activities relating to Promoting, distributing, obtaining Pricing Approvals and Reimbursement Approvals, importing and exporting. "Commercialize" or "Commercialization" shall expressly exclude "Develop" or "Development". "Commercially Reasonable Efforts" means, with respect to the efforts to be expended by any Person with respect to any objective, reasonable, diligent and good faith efforts to accomplish such objective. With respect to the Promotion or other exploitation of the Product, "Commercially Reasonable Efforts" means [***]. "Competing Product" means [***]. "Compliance Communications" has the meaning set forth in Section 8.2(x)(i). + +2 + +Source: SIGA TECHNOLOGIES INC, 8-K, 6/3/2019 + + + + + +"Confidential Information" of a Party means (a) any and all information of such Party or its Affiliates that is provided or disclosed by such Party or its Affiliates to the other Party or its Affiliates under this Agreement, whether in oral, written, graphic, or electronic form, and (b) the terms of this Agreement. "Control" means, with respect to any material, Know-How, or intellectual property right, that a Party (a) owns or (b) has a license (other than a license granted to such Party under this Agreement) or other right to such material, Know-How, or intellectual property right, and in each case, has the ability to grant to the other Party access, a license, sublicense or other rights (as applicable) to the foregoing on the terms and conditions set forth in this Agreement without violating the terms of any then-existing agreement or other arrangement with any Third Party. "Credit Amount" has the meaning set forth in Section 6.1(b). "Customer" means a Third Party that has entered into a Customer Contract with MMT. "Customer Contract Notice" has the meaning set forth in Section 4.3(b). "Customer Contract" has the meaning set forth in Section 4.3(a). "Delivery Date" shall mean the date set forth in each Purchase Order by which SIGA is to deliver the Product ordered thereunder, which date shall not be any earlier than the corresponding lead time set forth in the applicable Purchase Order. "Develop" or "Development" means any and all activities relating to researching or developing (including synthesizing, screening, testing or evaluating), preparing and conducting non-clinical studies, preparing and conducting clinical studies, and conducting certain regulatory activities (including preparation of regulatory applications) that are necessary or useful to obtain and maintain Regulatory Approval of the Product in any country in the Territory. "Develop" or "Development" may include "Manufacture" or "Manufacturing" but shall expressly exclude "Commercialize" or "Commercialization". "Discontinued Country" has the meaning set forth in Section 4.2. "Dollars" or "$" means U.S. dollars. "EMA" means the European Medicines Agency or any successor entity. [***] "EU" means the economic, scientific and political organization of member states of the European Union as it may be constituted from time to time, which as of the Effective Date consists of Austria, Belgium, Bulgaria, Croatia, Cyprus, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, and the United Kingdom. For clarity, the EU will at all times be deemed to include the United Kingdom, whether or not the United Kingdom remains a member state of the EU. + +3 + +Source: SIGA TECHNOLOGIES INC, 8-K, 6/3/2019 + + + + + +"Executive Officers" has the meaning set forth in Section 3.1(e). "Expanded Field" has the meaning set forth in Section 2.1(c). "FD&C Act" means the U.S. Federal Food, Drug, and Cosmetic Act, as amended. "FDA" means the U.S. Food and Drug Administration or any successor entity. "Field" means [***]. "Final Audit Report" has the meaning set forth in Section 6.5. "Final Report" has the meaning set forth in Section 6.2(b). "First Commercial Sale" means the date of the first sale of the Product in the Field in a country in the Territory to a Third Party for monetary value and for end use, including stockpiling, administration, or other consumption of the Product in the Field in such country in the Territory. "GCP" means the then-current standards, practices and procedures promulgated or endorsed by the FDA as set forth in the guidelines entitled "Guidance for Industry E6 Good Clinical Practice: Consolidated Guidance," including related regulatory requirements imposed by the FDA and, as applicable, comparable regulatory standards, practices and procedures promulgated by the EMA or other Regulatory Authority, as such standards, practices and procedures may be updated from time to time, including applicable quality guidelines promulgated under the ICH Q7. "Global Trade Control Laws" means the U.S. Export Administration Regulations, the U.S. International Traffic in Arms Regulations; the U.S. economic sanctions rules and regulations implemented under statutory authority and/or the President's Executive Orders and administered by the U.S. Department of the Treasury Office of Foreign Assets Control; EU Council Regulations on export controls, including No.428/2009; other EU Council sanctions laws and regulations, as implemented in EU Member States and enforced by EU Member State authorities, including Her Majesty's Treasury in the United Kingdom; United Nations sanctions policies; all relevant regulations and legislative instruments made under any of the above; other relevant economic sanctions, export and import control laws, and other laws, regulations, legislation, orders and requirements imposed by a relevant Governmental Authority. "GLP" means the then-current good laboratory practice standards promulgated or endorsed by the FDA as defined in 21 C. F. R. Part 58, and, as applicable, comparable regulatory standards promulgated by the EMA or other Regulatory Authority, as such standards may be updated from time to time, including applicable quality guidelines promulgated under the ICH. + +4 + +Source: SIGA TECHNOLOGIES INC, 8-K, 6/3/2019 + + + + + +"GMP" means the standards relating to current Good Manufacturing Practices for fine chemicals, active pharmaceutical ingredients, intermediates, bulk products or finished pharmaceutical products set forth in (i) 21 U.S. C. 351(a)(2)(B), in FDA regulations at 21 C. F. R. Parts 210 and 211 and, as applicable, in The Rules Governing Medicinal Products in the European Community, Volume IV, Good Manufacturing Practice for Medicinal Products, or (ii) the ICH Guidelines relating to the manufacture of active pharmaceutical ingredient and finished pharmaceuticals, as such standards may be updated from time to time, including applicable quality guidelines promulgated under the ICH. "Governmental Authority" means any supra-national, multi-national, federal, state, local, municipal, provincial or other governmental authority or political subdivision of any nature (including any governmental division, prefecture, subdivision, department, agency, bureau, branch, office, public-institution, commission, council, court or other tribunal exercising executive, judicial, legislative, police, regulatory, administrative or taxing authority or functions of any nature pertaining to government). "ICH" means the International Council for Harmonisation of Technical Requirements for Pharmaceuticals for Human Use. "Indemnified Party" has the meaning set forth in Section 9.3. "Indemnifying Party" has the meaning set forth in Section 9.3. "Independent Auditor" has the meaning set forth in Section 6.5. "Initial Business Plan" has the meaning set forth in Section 4.1(a). "Initial Term" has the meaning set forth in Section 11.1. "JSC" has the meaning set forth in Section 3.1(a). "Know-How" means all technical, scientific and other information, know-how and data, including trade secrets, knowledge, inventions, discoveries, methods, specifications, processes, practices, formulae, instructions, skills, techniques, procedures, experiences, ideas, technical assistance, designs, drawings, assembly procedures, computer programs, expertise, technology, other non-clinical, pre-clinical and clinical data, documentation and results (including pharmacological, toxicological, pharmaceutical, biological, chemical, physical, safety and manufacturing data and results), analytical, regulatory and quality control data and results, Regulatory Materials, study designs, protocols, assays, biological methodologies and other technical information, in each case, whether or not confidential, proprietary, patented or patentable. "Know-How" expressly excludes any Patents. + +5 + +Source: SIGA TECHNOLOGIES INC, 8-K, 6/3/2019 + + + + + +"Laws" means any law, statute, rule, regulation, standard, order, judgment or ordinance having the effect of law of any applicable national, federal, provincial, state, county, city, or other political subdivision, or foreign, supranational or multinational law, including any statute, standard, code, resolution, or promulgation, or any order, writ, judgment, injunction, decree, stipulation, ruling, determination, or award entered by or with any Governmental Authority, or any license, franchise, permit, or similar right granted under any of the foregoing, or any similar provision having the force or effect of law, including the Federal Food, Drug, and Cosmetic Act (21 U.S.C. § 301, et seq.), the Anti-Kickback Statute (42 U.S.C. § 1320a- 7b), the Civil Monetary Penalty Statute (42 U.S.C. § 1320a-7a), the False Claims Act (31 U.S.C. § 3729 et seq.), comparable state statutes, the regulations promulgated under all such statutes, and the regulations issued by the FDA, and all applicable Anti-Corruption Laws, accounting and recordkeeping laws, and laws relating to interactions with HCPs and Government Officials. For the avoidance of doubt, any specific references to any Law or applicable Law or any portion thereof shall be deemed to include all then-current amendments thereto or any replacement or successor law, statute, standard, ordinance, code, rule, regulation, resolution, promulgation, order, writ, judgment, injunction, decree, stipulation, ruling, or determination thereto. + +"Losses" has the meaning set forth in Section 9.1. "Manufacture" or "Manufacturing" means all activities related to the manufacturing of a compound or product, including test method development and stability testing, formulation, process development, manufacturing scale-up, manufacturing for use in non-clinical and clinical studies, manufacturing for commercial sale, packaging, release of product, quality assurance/quality control development, quality control testing (including in-process, in-process release and stability testing) and release of product or any component or ingredient thereof, and regulatory activities related to all of the foregoing. "Manufacture" or "Manufacturing" may be included as part of "Develop" or "Development" to the extent applicable, but is expressly exclude from "Commercialize" or "Commercialization". [***] [***] "MMT Indemnitees" has the meaning set forth in Section 9.1. "MMT Promotion Personnel" any employees of MMT or its Affiliates and other approved Third Party contractors, agents and personnel and Permitted Sublicensees, that MMT will assign to conduct Promotion pursuant to this Agreement. "Net Product Sales Amount" means [***] "Non-Compliance Action" has the meaning set forth in Section 8.2(x)(ii). "Non-Promotion Notice" has the meaning set forth in Section 4.2. "Notice of Disagreement" has the meaning set forth in Section 6.5. "Notice of Dispute" has the meaning set forth in Section 12.1(a). + +6 + +Source: SIGA TECHNOLOGIES INC, 8-K, 6/3/2019 + + + + + +"Patents" means (a) pending patent applications, issued patents, utility models and design patents anywhere in the world; (b) provisionals, non-provisionals, reissues, substitutions, confirmations, registrations, validations, re-examinations, additions, continuations, continued prosecution applications, continuations-in-part, or divisionals of or to any of the foregoing; (c) any other patent application claiming priority to any of the foregoing anywhere in the world; (d) extension, renewal or restoration of any of the foregoing by existing or future extension, renewal or restoration mechanisms, including supplementary protection certificates or the equivalent thereof; and (e) any foreign equivalents to any of the foregoing. "PDF" means Adobe™ Portable Document Format sent by electronic mail. "Permitted Sublicensee" has the meaning set forth in Section 2.1(b). "Person" means an individual, sole proprietorship, partnership, limited partnership, limited liability partnership, corporation, limited liability company, business trust, joint stock company, trust, incorporated association, joint venture or similar entity or organization, including a government or political subdivision or department or agency of a government or other Governmental Authority. "Pfizer" means Pfizer Inc., a Delaware corporation. "Potential New Field" has the meaning set forth in Section 2.1(c). "Pricing and Reimbursement Authority" means, as applicable, the body with the authority to control, approve, recommend, decide, or otherwise determine pricing and reimbursement of pharmaceutical products, including those with authority to enter into risk sharing schemes or to impose retroactive price reductions, discounts, or rebates (including the National Institute for Health and Care Excellence and the Scottish Medicines Consortium in the U.K.; the Institute for Quality and Efficiency in Health Care in Germany; the Technical Scientific Commission and the Price and Reimbursement Committee within the Italian Medicines Agency in Italy; the Directorate General for the Basic Portfolio of the National Health and Pharmacy System of the Ministry of Health in Spain; the National Union of Health Insurance Funds and the National Authority of Health in France; and Health Canada in Canada) or non-governmental authority (including "Sick Funds" in Germany)). "Pricing Approval" means the approval, agreement, determination or decision establishing prices for Product that can be charged in countries where Governmental Authorities or their designees control, approve, recommend, decide, or otherwise determine the price of pharmaceutical products. "Product" means the FDA-approved oral formulation of TPOXX® (tecovirimat) for use in the Field, or any oral formulation of tecovirimat for use in the Field for which a Regulatory Authority grants Drug Approval to SIGA in a country or jurisdiction in the Territory. + +7 + +Source: SIGA TECHNOLOGIES INC, 8-K, 6/3/2019 + + + + + +"Promote" or "Promotion" means to market, advertise, promote, offer for sale, or sell a product. "Promotion Fee" has the meaning set forth in Section 6.1(a). "Purchase Order" shall mean a written purchase order generated by MMT for Product to be delivered pursuant to Customer Contracts which includes the information set forth in Section 5.2(a). "Quarterly Collected Revenue" means Net Product Sales Amount that is collected during the applicable Calendar Quarter. "Quarterly Payment" has the meaning set forth in Section 6.2(a). "Quarterly Report" has the meaning set forth in Section 6.2(a). "Regulatory Approval" means, with respect to the Product in a particular country in the Territory, marketing authorization granted by the relevant Regulatory Authority permitting the marketing and sale of the Product in such country but excludes any and all Pricing Approvals and Reimbursement Approvals. "Regulatory Authority" means, in a particular country, the Governmental Authority with the authority to grant Regulatory Approval in such country. "Regulatory Materials" means any documentation comprising any regulatory application, submission, notification, communication, correspondence, proof of approval or license, registration, Regulatory Approval or other filing made to, received from or otherwise conducted with a Regulatory Authority to Develop, Manufacture, market, sell or otherwise Commercialize the Product in a particular country in the Territory. "Reimbursement Approval" means the approval, agreement, determination or decision regarding the prices for Product that can be reimbursed in jurisdictions where the applicable Pricing and Reimbursement Authority approves, determines or recommends the reimbursement of pharmaceutical products. "Renewal Term" has the meaning set forth in Section 11.1. "Restricted Markets" means, as applicable under Global Trade Control Laws, the Crimean Peninsula, Cuba, Iran, North Korea, and Syria. "Restricted Party" means any individual(s) or entity(ies) on any of the following (collectively referred to herein as the "Restricted Party Lists"): the list of sanctioned entities maintained by the UN; the Specially Designated Nationals List and the Sectoral Sanctions Identifications List, as administered by the U.S. Department of the Treasury Office of Foreign Assets Control; the U.S. Denied Persons List, the U.S. Entity List, and the U.S. Unverified List, all administered by the U.S. Department of Commerce; the entities subject to restrictive measures and the Consolidated List of Persons, Groups and Entities Subject to E.U. Financial Sanctions, as implemented by the E.U. Common Foreign & Security Policy; the List of Excluded Individuals / Entities, as published by the U.S. Health and Human Services - Office of Inspector General; any lists of prohibited or debarred parties established under the U.S. Federal Food Drug and Cosmetic Act; the list of Persons and entities suspended or debarred from contracting with the U.S. government; and similar lists of restricted parties maintained by the Governmental Authorities of the countries that have jurisdiction over the activities conducted under this Agreement. + +8 + +Source: SIGA TECHNOLOGIES INC, 8-K, 6/3/2019 + + + + + +"Restricted Party Lists" has the meaning set forth in the definition of Restricted Party. [***] [***] [***] "Rolling Forecast" has the meaning set forth in Section 5.1(a). "SEC" has the meaning set forth in Section 10.4(d). "Sell or Offer to Sell" means actual negotiation of terms of purchase and contracting for sale of Product in the Field in the Territory. "Selling Party" has the meaning set forth in the definition of Net Product Sales Amounts. "SIGA Indemnitees" has the meaning set forth in Section 9.2. "SIGA Intellectual Property" means the SIGA Know-How, SIGA Trademarks, SIGA Patents and SIGA Inventions. "SIGA Know-How" means all Know-How that (a) is necessary or useful for the Development, Manufacture or Commercialization of the Product in the Field in the Territory and (b) (i) is Controlled by SIGA or its Affiliates as of the Effective Date or (ii) is or becomes Controlled by SIGA or its Affiliates during the Term. "SIGA Patent" means any Patent that (a) claims, generically or specifically, the Product, or the Manufacture or use of the Product in the Field (including its intermediates and relevant compounds) and (b)(i) is Controlled by SIGA or its Affiliates as of the Effective Date, which such Patents are set forth in Schedule 1 hereto, (ii) is Controlled by SIGA or its Affiliates during the Term and claims priority to the Patents Controlled by SIGA or its Affiliates as of the Effective Date, or (iii) is or becomes Controlled by SIGA or its Affiliates during the Term. "SIGA Trademark" means any Trademark that (a) is necessary for the Development, Manufacture or Commercialization of a Product in the Field in the Territory and (b) (i) is Controlled by SIGA or its Affiliates as of the Effective Date (which such Trademarks are set forth in Schedule 2 hereto) or (ii) is or becomes Controlled by SIGA or its Affiliates during the Term. + +9 + +Source: SIGA TECHNOLOGIES INC, 8-K, 6/3/2019 + + + + + +"SIGA's Auditor" has the meaning set forth in Section 6.5. "South Korea" means South Korea, including all of its territories and possessions. "Special Access Approval" has the meaning set forth in Section 4.4(b). "Supply Limitation" has the meaning set forth in Section 5.4. "Supply Terms" means [***]. "Term" has the meaning set forth in Section 11.1. "Territory" means all countries and territories in the world other than (a) the U.S., (b) South Korea, (c) any Restricted Market, and (d) any Discontinued Country and, in the case of (a)-(c), each of their respective territories and possessions. "Third Party" means any Person other than SIGA or MMT or an Affiliate of either of them. "Tier 1 Countries" mean [***]. "Tier 2 Countries" mean [***]. "Tier 3 Countries" mean [***]. "Tier Period" has the meaning set forth in Section 4.2. "Trademark" means any trademark, service mark, trade name, brand name, sub-brand name, trade dress, product configuration, program name, product name, delivery form name, certification mark, collective mark, logo, tagline, slogan, design or business symbol, that functions as an identifier of source or origin, whether or not registered and all statutory and common law rights therein and all registrations and applications therefor, together with all goodwill associated with, or symbolized by, any of the foregoing. "U.S." means the United States of America, including all of its territories and possessions. "VAT" has the meaning set forth in Section 6.8(c). "Yearly Collected Revenue" means Net Product Sales Amount that is collected during the applicable Calendar Year. + +10 + +Source: SIGA TECHNOLOGIES INC, 8-K, 6/3/2019 + + + + + +ARTICLE 2 + +GRANT OF RIGHTS 2.1 Grant of Rights to MMT. (a) Grant to MMT. Subject to the terms and conditions of this Agreement, SIGA hereby grants to MMT an exclusive right and license, with the right to grant sublicenses as permitted under Section 2.1(b), under the SIGA Intellectual Property solely to Promote the Product in the Field in the Territory. The license granted by SIGA to MMT under this Section 2.1(a) will be exclusive even as to SIGA with respect to rights to Promote the Product in the Field in the Territory, except as set forth in Section 2.4 below. (b) Sublicense Rights. Except for the subcontractors appointed by MMT as of the Effective Date as listed on Exhibit A attached hereto, MMT may not grant sublicenses of the rights and licenses granted to it in Section 2.1(a) to any Affiliate (including Pfizer or any Affiliate of Pfizer) or Third Party without the prior written approval of SIGA (such approval not to be unreasonably withheld). Each such subcontractor listed on Exhibit A attached hereto and any Affiliate or Third Party approved by SIGA as an MMT sublicensee pursuant to this Section 2.1(b) shall be deemed to be a "Permitted Sublicensee" for purposes of this Agreement. (c) Potential New Field. From time to time, MMT may request to expand the Field in a particular country in the Territory because it believes that there is an opportunity to Promote the Product in such new field (a "Potential New Field"). MMT shall make such request to SIGA in writing. SIGA will determine whether to approve such Potential New Field, based upon available information regarding the regulatory environment in such country for such Potential New Field, and whether SIGA will need to seek Regulatory Approval and Pricing Approval and Reimbursement Approval. The Parties shall discuss the Potential New Field in good faith and upon the mutual written agreement of the Parties to proceed with a Potential New Field in such country, such Potential New Field shall be deemed hereunder to be an "Expanded Field" for purposes of that country only in the Territory. 2.2 Negative Covenants. (a) MMT will not, and will not permit any of its Affiliates or sublicensees to, use or practice any SIGA Intellectual Property outside the scope of the licenses granted to it under Section 2.1. (b) SIGA will not, and will not permit any of its Affiliates or licensees to, Promote the Product in the Field in the Territory, except as set forth in Section 2.4. 2.3 Non-Compete Covenant. During the Term, MMT shall not Commercialize in any manner any Competing Product in the Field in any country in the Territory; provided, however, the Parties hereby acknowledge that the restrictions set forth in this Section 2.3 shall not apply to any Affiliates of MMT (including Pfizer). Furthermore, [***]. + +11 + +Source: SIGA TECHNOLOGIES INC, 8-K, 6/3/2019 + + + + + +2.4 Retained Rights. Notwithstanding anything herein to the contrary, SIGA retains the right on behalf of itself and its Affiliates, licensees or any Third Parties to Develop, Manufacture, supply, distribute and otherwise Commercialize the Product in Field the Territory, except that SIGA may not Promote or Sell or Offer to Sell the Product in the Field in the Territory to any Third Party; provided that SIGA may, at its sole cost and discretion engage in promotional activities regarding (but not enter into any Customer Contracts in respect of) the Product in support of MMT's efforts to Promote or Sell and Offer to Sell the Product. 2.5 No Implied Licenses. Except as explicitly set forth in this Agreement, neither Party will be deemed by estoppel or implication to have granted the other Party any license or other right to any intellectual property of such Party. For clarity, MMT acknowledges and agrees that SIGA has not granted any license to MMT hereunder to Develop or Manufacture the Product, and MMT does not have any right to Commercialize the Product, other than the license granted by SIGA to MMT to Promote the Product in the Field in the Territory as set forth in Section 2.1(a). 2.6 [***]. (a) [***]. ARTICLE 3 + +GOVERNANCE 3.1 Joint Steering Committee. (a) Formation and Role. Within thirty (30) days after the Effective Date, the Parties will establish a joint steering committee (the "JSC") to govern the activities of the Parties with respect to the Promotion and Commercialization of the Product in the Field in the Territory pursuant to this Agreement. The role of the JSC is: [***] (b) Members. [***]. (c) Meetings. [***]. (d) Alliance Managers. [***]. (e) Decision Making. [***]. 3.2 Good Faith. In conducting themselves on any committees, each representative of either Party, including the chairperson, will consider diligently, reasonably and in good faith all input received from the other Party, and will use commercially reasonably efforts to reach consensus on all matters before them. In exercising any decision-making authority granted to it under this ARTICLE 3, each Party will conduct its discussions in good faith with a view toward operating for the mutual benefit of the Parties and in furtherance of the Commercialization and Promotion of the Product in the Field in the Territory. Notwithstanding anything to the contrary in this Agreement, neither Party nor any of their respective Affiliates will be required to take, or will be penalized for not taking, any action that is not in compliance with such Party's ethical business practices and policies or that such Party reasonably believes is not in compliance with Laws. + +12 + +Source: SIGA TECHNOLOGIES INC, 8-K, 6/3/2019 + + + + + +3.3 Scope of Governance. The Parties agree not to share or discuss any Confidential Information beyond the scope of the collaboration contemplated by this Agreement. Each Party acknowledges and agrees that the JSC members and participants will receive Confidential Information in connection with their service on the JSC. Each Party will ensure that its JSC members and its non-voting observers and participants are informed that they should regard all JSC-related information as Confidential Information, and are subject to obligations of confidentiality and non-disclosure no less stringent than those set forth in ARTICLE 10. ARTICLE 4 + +PROMOTION AND OTHER COMMERCIALIZATION 4.1 Promotion in the Territory. (a) [***] (b) MMT shall use Commercially Reasonable Efforts at its sole cost and expense to Promote the Product in the Field within the Territory in accordance with the then-current Business Plan; provided that MMT shall not Promote any Product within any Restricted Market or Discontinued Country. (c) MMT shall conduct all Promotion activities in accordance with applicable Laws, Pfizer policies and practices regarding advertising, marketing, promotional and other Product-specific communications, and the terms of this Agreement. MMT may prepare marketing, advertising, promotional materials and other communications relating to the Product for Promotion use in the Field in the Territory. All such materials shall be truthful and non-misleading, and in compliance with applicable Laws, and subject to review by SIGA through the JSC; provided that the final decision to use any approved materials will be at the sole discretion of MMT. (d) Subject to Section 4.2, SIGA shall provide reasonable assistance to MMT with respect to MMT's conduct of Promotion activities with respect to the Product in the Field in the Territory as specifically set forth in the Business Plan, including providing responses to medical inquiries communicated to MMT's sales representatives or other external-facing MMT representatives or received by MMT by letter, phone call or email or other means of communication, at MMT's sole cost and expense; provided, however, SIGA shall solely be responsible for the costs and expenses associated with the response to any medical inquiries. + +13 + +Source: SIGA TECHNOLOGIES INC, 8-K, 6/3/2019 + + + + + +(e) MMT will provide appropriate (as determined by MMT in its sole discretion) training (including regarding compliance with applicable Laws) of the MMT Promotion Personnel who will be communicating with potential customers about the Product. (f) Subject to Section 13.6, MMT may not use any subcontractor that is not a Permitted Sublicensee to fulfill its obligations under this Agreement. 4.2 Diligence. Notwithstanding anything herein to the contrary, MMT's commitment to use Commercially Reasonable Efforts as set forth herein shall not preclude the suspension or discontinuance of the Promotion of the Product in the Field in a country within the Territory, if reasonably appropriate, based on the application of Commercially Reasonable Efforts with respect to the Promotion of the Product in such country. If MMT does not document in the Business Plan [***]the Product in the Field in a country in the Territory ("[***]") for a period of either (i) [***] calendar months after the Effective Date for Tier 1 Countries, (ii) [***] calendar months after the Effective Date for Tier 2 Countries or (iii) [***] calendar months after the Effective Date for Tier 3 Countries (each such time period set forth in (i)-(iii) being a "Tier Period"), then no later than [***] Business Days after the expiration the applicable Tier Period for such country, SIGA may provide MMT with written notice [***] non-[***] (a "Non-[***] Notice") in such country, and upon MMT's receipt of such Non-[***] Notice, such country shall be deemed to be a "Discontinued Country" for purposes of this Agreement. If [***], SIGA shall have the right to designate the applicable country as a Discontinued Country at any time thereafter as long as the relevant Tier Period [***] for the country has been met at the time of the Non-[***] Notice. SIGA hereby acknowledges and agrees that MMT and its Affiliates make (and have made) no representation or warranty, either express or implied, at law or in equity, that it will be able to successfully achieve any amount of Net Product Sales Amount, and SIGA specifically disclaims that it is relying upon or has relied upon any such representations or warranties that may have been made by any individual or entity. SIGA acknowledges and agrees that MMT and its Affiliates have, and will continue to have, other programs that may compete for resources that may be expended in the Promotion of the Product. Except as otherwise set forth in Section 2.3 with respect to Competing Products, nothing in this Agreement shall limit or restrict the right of MMT or its Affiliates to develop, make regulatory filings, obtain regulatory approvals with respect to, or to Commercialize any product that is not the Product or, with respect to MMT only, a Competing Product or to engage in any business or other activity. 4.3 Customer Contracts. (a) Subject to Section 2.4 and Section 4.3(b), MMT shall serve as the primary contracting party [***]. (b) [***]. + +14 + +Source: SIGA TECHNOLOGIES INC, 8-K, 6/3/2019 + + + + + +4.4 Regulatory Matters. (a) Subject to Sections 4.4(b) and (c) each Party, at its sole cost and expense, will be responsible for obtaining all regulatory authorizations, permits, licenses, and approvals required to carry out its obligations under this Agreement. (b) [***]. (c) MMT will provide SIGA with final copies of any marketing, advertising, promotional materials and other communications developed pursuant Section 4.1(c), and as soon as reasonably practicable thereafter, SIGA will be responsible for submitting on MMT's behalf such materials or other communications to seek to obtain any approvals necessary under applicable Law for the use of such materials in the Territory. (d) MMT will promptly notify SIGA, and shall provide SIGA with a copy, of any information it receives regarding any threatened or pending action, inspection or communication by or from any Third Party, including a Regulatory Authority, which may affect the regulatory status of the Product and will reasonably cooperate with SIGA in its response thereto. MMT may choose not to disclose communications, other than communications from Regulatory Authorities, to the extent that MMT's counsel reasonably believes that such disclosure to SIGA could violate applicable privacy laws or have a significant adverse impact on MMT's legal position or defense (including the loss of attorney-client privilege), in which case MMT shall promptly notify SIGA that it is exercising its right not to disclose. 4.5 Discontinued Countries. For clarity, notwithstanding anything to the contrary set forth herein, upon the designation of a country as a "Discontinued Country" under this Agreement, SIGA shall have the right to Promote the Product in the Discontinued Country at its sole discretion and cost. Upon designation of a country as a "Discontinued Country" in accordance with Section 4.2, MMT shall immediately cease all Promotional efforts related to the Product in such country, and SIGA shall have the sole right to Promote the Product in such Discontinued Country during and after the Term. ARTICLE 5 + +FORECASTING AND ORDERING 5.1 Product Forecasts. (a) [***]. (b) [***]. 5.2 Purchase Orders. (a) [***]. [***]. [***]. + +15 + +Source: SIGA TECHNOLOGIES INC, 8-K, 6/3/2019 + + + + + +5.3 Delivery. [***]. 5.4 Supply Limitation. [***]. 5.5 Supply Penalties. [***]. 5.6 Adverse Event Reporting. MMT or its Affiliates will reasonably cooperate with SIGA to meet applicable pharmacovigilance and safety reporting requirements and in the event of a Product recall. To facilitate pharmacovigilance and safety reporting, the Parties agree that they will follow the procedures described in Schedule 3 Safety Reporting Requirements, which may be amended from time-to-time, to ensure that adverse event and other safety information is identified, reviewed, and reported in a manner that will permit SIGA to comply with applicable Laws, including any reporting requirements with any applicable Regulatory Authority. ARTICLE 6 + +PAYMENTS 6.1 Promotion Fee. (a) In consideration for the services provided by MMT hereunder, commencing with the First Commercial Sale of the Product in the Territory, MMT shall be entitled to retain a fee (the "Promotion Fee") of: (i) [***] of the Yearly Collected Revenue of the Product in the Territory in each Calendar Year during the Term if the aggregate Net Product Sales Amounts for such Calendar Year are equal to or below [***]; and (ii) [***] of the Yearly Collected Revenue of the Product in the Territory in each Calendar Year during the Term if the aggregate Net Product Sales Amounts for such Calendar Year exceed [***]. (b) In satisfaction of MMT's rights to the Promotion Fee, MMT shall retain from each payment to SIGA of the Quarterly Collected Revenue an amount equal to (i) [***] of the Quarterly Collected Revenue in the Territory during such Calendar Quarter so long as the total Net Product Sales Amounts in the Territory during the relevant Calendar Year are equal to or below [***] and (ii) [***] of the Quarterly Collected Revenue in the Territory during such Calendar Quarter where the total Net Product Sales Amounts in the Territory during the relevant Calendar Year exceeds [***] and (iii) any Credit Amounts. If the Net Product Sales Amounts in the Territory exceeds [***] during any Calendar Year after any Quarterly Payment has been made, MMT shall automatically accrue a credit of [***] (the "Credit Amount") (representing the additional [***] fee that MMT would be entitled to receive with respect to the first [***] of the Quarterly Collected Revenue as a result of total Net Product Sales Amounts in the relevant Calendar Year having [***]), which Credit Amount will be deducted from future payments of Quarterly Collected Revenue to SIGA until the full Credit Amount is retained by MMT. + +16 + +Source: SIGA TECHNOLOGIES INC, 8-K, 6/3/2019 + + + + + +6.2 Payments. (a) Within [***] days after the conclusion of each Calendar Quarter to occur during the Term, commencing with the First Commercial Sale of the Product in the Field in the Territory, MMT shall deliver to SIGA a written report containing the following information (each a "Quarterly Report"): [***]. All such reports shall be considered Confidential Information of MMT. Concurrent with the delivery of the applicable Quarterly Report, MMT shall pay to SIGA in Dollars by wire transfer of immediately available funds into an account designated by SIGA in writing in advance of such payment the net result of Quarterly Collected Revenues, minus the corresponding Promotion Fee, and minus any applicable Credit Amount for such Calendar Quarter (all amounts as calculated in the Quarterly Report, and the payment of the net result being a "Quarterly Payment"). (b) Upon the expiration or termination of this Agreement, MMT shall submit a final written report covering the time period between the date of the last Quarterly Report submitted by MMT and the date of expiration or termination of this Agreement (the "Final Report"). The Final Report shall contain all information required to be included in a Quarterly Report with respect to the time period between the conclusion of the most recent Calendar Quarter and the date of expiration or termination of this Agreement. If MMT owes any outstanding amounts to SIGA as calculated pursuant to such Final Report, then MMT shall pay to SIGA in Dollars such outstanding amounts by wire transfer of immediately available funds into an account designated by SIGA in writing in advance of such payment within [***] days after delivery of the Final Report. If SIGA owes any amounts relating to any portion of any outstanding Credit Amounts or otherwise, then SIGA shall pay such outstanding amounts to MMT within [***] days after delivery of the Final Report. 6.3 Currency. All sums due under this Agreement shall be payable in Dollars. Any amounts in currencies other than Dollars shall, for purposes of determining Net Product Sales Amounts or Quarterly Collected Revenue, be converted to Dollars using the [***]. Once the Net Product Sales Amount or Quarterly Collected Revenue payable in respect of a particular Calendar Quarter has been converted into Dollars, such amount of Dollars shall be used for the purpose of calculating the total Net Product Sales Amount and Quarterly Collected Revenue during the Calendar Year that includes such Calendar Quarter. 6.4 Records. MMT will keep (and will ensure that its Affiliates and sublicensees keep) such records as are required to determine, in accordance with U.S. generally accepted accounting principles or international financial reporting standards, as applicable, and this Agreement and the sums or credits due under this Agreement, including Net Product Sales Amounts. MMT will retain all such books, records and accounts until the later of (a) [***] after the end of the period to which such books, records and accounts pertain and (b) the expiration of the applicable tax statute of limitations (or any extensions thereof), or for such longer period as may be required by Laws. MMT will require its sublicensees to provide to it a report detailing the foregoing expenses and calculations incurred or made by such sublicensee, which report will be made available to SIGA in connection with any audit conducted by SIGA pursuant to Section 6.5. + +17 + +Source: SIGA TECHNOLOGIES INC, 8-K, 6/3/2019 + + + + + +6.5 Audits. SIGA may have an independent top four certified public accountant, reasonably acceptable to MMT ("SIGA's Auditor"), have access during normal business hours, and upon [***] Business Days' prior written notice, to examine only those records of MMT (and its Affiliates and sublicensees) as may be reasonably necessary to determine, with respect to any Calendar Year ending not more than [***] before SIGA's request, the correctness or completeness of any report or payment made under this Agreement; provided, however, MMT shall not be required to provide, and neither SIGA nor SIGA's Auditor shall be entitled to review, the tax returns or tax records of MMT or those of its Affiliates and sublicensees. The foregoing right of review may be exercised only once per year and only once with respect to each periodic report and payment delivered in accordance with Section 6.2. Reports of the results of any such examination (each an "Audit Report") will be (a) limited to details of any discrepancies in MMT's records relating to the Product together with an explanation of the discrepancy and the circumstances giving rise to the discrepancy (b) made available to both Parties and (c) subject to ARTICLE 10. An Audit Report shall become final and binding on the Parties thirty (30) days following MMT's receipt thereof, unless MMT delivers written notice of its agreement thereto (in which case such Audit Report shall become final and binding on the date of delivery of such notice of agreement) or written notice of its disagreement thereto ("Notice of Disagreement") to SIGA in either case on or prior to such date. If a timely Notice of Disagreement is delivered by MMT to SIGA, then the Audit Report shall become final and binding on the Parties on the earlier of (i) the date MMT and SIGA resolve in writing any differences they have with respect to the matters specified in the Notice of Disagreement, and (ii) the date all matters in dispute are finally resolved in writing by the Independent Auditor. During the thirty (30) days following delivery of a Notice of Disagreement, MMT, SIGA and SIGA's Auditor shall seek to resolve in writing any differences which they may have with respect to the matters specified in the Notice of Disagreement. At the end of such thirty (30) day period, if no resolution has been reached, MMT and SIGA shall submit such dispute to an independent top four certified public accountant other than SIGA's Auditor and reasonably acceptable to both Parties (the "Independent Auditor") for resolution of all matters which remain in dispute which were included in the Notice of Disagreement, and the Independent Auditor shall make a final determination with respect thereto (with it being understood that the Parties will request that the Independent Auditor deliver to the Parties its resolution in writing not more than 30 days after its engagement). The Independent Auditor shall make a determination only with respect to the matters still in dispute and, with respect to each such matter, its determination shall be within the range of the dispute among MMT, SIGA and SIGA's Auditor. If an Audit Report as finally determined pursuant to this Section 6.5 (a "Final Audit Report") concludes that (i) additional amounts were owed by MMT, MMT will pay the additional amounts, or (ii) excess payments were made by MMT, SIGA will reimburse such excess payments, in either case ((i) or (ii)), within thirty (30) Business Days after the date on which an Audit Report is deemed a Final Audit Report. SIGA will bear the full cost of the performance of any such audit, including the fees of SIGA's Auditor and the Independent Auditor, unless a Final Audit Report, which covers the entire Calendar Year, discloses a variance to the detriment of the auditing Party of more than [***] from the amount of the original report, royalty or payment calculation, in which case MMT will bear the full cost of the performance of such audit. The results of such audit, including any determination made by the Independent Auditor, will be final, absent manifest error. + +18 + +Source: SIGA TECHNOLOGIES INC, 8-K, 6/3/2019 + + + + + +6.6 Blocked Payment and Indemnification. If either Party utilizes a Restricted Party in the activities contemplated under this Agreement, without a license or other authorization required by Global Trade Control Laws or in circumstances where reimbursement by the non-utilizing Party would violate or create exposure to adverse consequences under Global Trade Laws, the non-utilizing Party shall not be responsible for any payments due to the utilizing Party or any other party resulting from the activities involving such Restricted Party even if the contractual obligation related thereto has already accrued. Any and all payments due to such utilizing Party or any other party resulting from such activity involving a Restricted Party shall be entirely at such utilizing Party's expense. Further, if the conduct of any activity or a transaction under this Agreement was in violation of applicable Global Trade Control Laws for any reason, such violating Party shall indemnify the other Party for any liability resulting from such activity or transaction, including any and all fines and penalties assessed to such other Party as a result of such activity or transaction. 6.7 Source of Recovery. Any outstanding amounts due and payable by SIGA pursuant to the terms of this Agreement, including reimbursements for Supply Penalties pursuant to Section 5.5 and any amounts owed to an MMT Indemnitee pursuant to SIGA's indemnification obligations in Section 9.1, at MMT's option, can be set-off by MMT from any Quarterly Payment until such amounts are fully recovered; provided that any amounts that are subject to a dispute properly brought under ARTICLE 12 may not be set-off pursuant to this Section 6.7. 6.8 Taxes. (a) Taxes on Income. Each Party will pay all taxes (including related interest and penalties) imposed on its share of income arising directly or indirectly from the efforts of, or the receipt or deemed receipt of any payment by, such Party under this Agreement. (b) Tax Withholding. Subject to Section 6.8(c) and Section 6.8(d), if any taxes (including related interest and penalties) are required to be withheld by or on behalf of MMT with respect to an amount payable to SIGA, (a) MMT will withhold such taxes from such amount, timely pay the withheld taxes to the proper taxing authority and furnish reasonably satisfactory proof of payment to SIGA; and (b) SIGA will reasonably assist MMT in its efforts to obtain a refund of or credit for such withholding tax in accordance with Section 6.8(c). Any amount actually withheld and remitted by MMT to a taxing authority pursuant to this Section 6.8(b) will be treated for all purposes of this Agreement as having been paid to SIGA. If MMT makes a payment without deduction for tax withholding and an amount of tax should have been withheld from such payment, MMT shall be entitled to recover the under withheld tax by an additional withholding from any amount payable to SIGA under this Agreement, and to the extent such recovery is insufficient, SIGA shall indemnify MMT for any such amount. No amount shall be withheld, or a reduced amount shall be withheld, as applicable, if, in accordance with Section 6.8(d), a Party that is entitled to a payment timely furnishes the other Party with the necessary tax forms and other documents prescribed by Laws, which shall be in a form reasonably satisfactory to the Party receiving the documents, identifying that the relevant payment is exempt from tax or subject to a reduced tax rate. + +19 + +Source: SIGA TECHNOLOGIES INC, 8-K, 6/3/2019 + + + + + +(c) VAT. It is understood and agreed between the Parties that the amount of any payments contemplated under this Agreement are exclusive of any value added tax, sales tax or any similar tax ("VAT"), which shall be added thereon as applicable. Where VAT is properly added to a payment made under this Agreement, MMT or SIGA, as applicable, will pay the amount of the VAT, if applicable, but only on receipt of a valid tax invoice issued in accordance with applicable Law of the country in which the VAT is chargeable. (d) Tax Cooperation. The Parties agree to cooperate with one another and use reasonable efforts to reduce or eliminate tax withholding, VAT or similar obligations in respect of royalties, milestone payments, and other amounts payable under this Agreement. SIGA and MMT will provide each other with any applicable tax forms that may be reasonably necessary in order for the other Party not to withhold tax or to withhold tax at a reduced rate under an applicable income tax treaty or pursuant to applicable internal law. Each Party will provide the other with reasonable assistance to enable the recovery, as permitted by Law, of withholding taxes, VAT, or similar obligations resulting from payments made under this Agreement, such recovery to be for the benefit of MMT or SIGA, as applicable, to the extent it has complied with the requirements of this Section 6.8 in respect of such obligations. ARTICLE 7 + +INTELLECTUAL PROPERTY 7.1 Ownership of SIGA Intellectual Property. Subject to the license granted to MMT under Section 2.1, SIGA shall own and retain all of its rights, title and interest in and to the SIGA Intellectual Property and the goodwill related to such Intellectual Property. 7.2 Intellectual Property Maintenance. SIGA shall control and be solely responsible for, at its sole discretion, the filing, preparation, prosecution, enforcement, maintenance and defense of the SIGA Intellectual Property worldwide and all claims and other aspects related thereto at SIGA's sole cost and expense, except as set forth in Section 7.3. 7.3 New Patents and Trademarks. For each Active Country, SIGA shall prosecute (a) applications in respect of any SIGA Patents listed on Schedule 1, and (b) trademark registrations for the SIGA Trademarks listed on Schedule 2 (or such other Trademark in respect of the Products as mutually agreed by the Parties at the JSC), in each case ((a) and (b)), with the appropriate Governmental Authorities, provided that there are no Trademarks which may be substantially similar or Patents which may limit patentability, and provided further, if SIGA determines that it is not commercially reasonable to prosecute such Patents and Trademarks, SIGA shall consult with MMT in respect of the appropriate prosecution strategy in such Active Country. For clarity, any new Patent or Trademark filed and/or registered, as applicable, by SIGA, pursuant to this Section 7.3 shall be deemed a SIGA Patent or a SIGA Trademark, respectively, and shall be subject to the grant of rights to MMT set forth in Section 2.1. SIGA's obligation to make the filings described in the first sentence of this Section 7.3 shall not apply with respect to an Active Country if the Product is sold in such Active Country pursuant to a Special Access Approval or other Regulatory Approval, without the need to file for SIGA Patents or SIGA Trademarks in such country. + +20 + +Source: SIGA TECHNOLOGIES INC, 8-K, 6/3/2019 + + + + + +ARTICLE 8 + +REPRESENTATIONS AND WARRANTIES; COVENANTS 8.1 Mutual Representations and Warranties. Each Party hereby represents and warrants to the other Party as follows: (a) Corporate Existence. As of the Effective Date, it is a company or corporation duly organized, validly existing, and in good standing under the Laws of the jurisdiction in which it was incorporated or formed; (b) Corporate Power, Authority and Binding Agreement. As of the Effective Date, (i) it has the power and authority and the legal right to enter into this Agreement and perform its obligations hereunder; (ii) it has taken all necessary action on its part required to authorize the execution and delivery of this Agreement and the performance of its obligations hereunder; and (iii) this Agreement has been duly executed and delivered on behalf of such Party, and constitutes a legal, valid, and binding obligation of such Party that is enforceable against it in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting or relating to the enforcement of creditors' rights generally, and general principles of equity; (c) No Conflict. The execution and delivery of this Agreement, the performance of such Party's obligations hereunder and the licenses and sublicenses to be granted pursuant to this Agreement (i) do not and will not conflict with or violate any requirement of Laws existing as of the Effective Date; (ii) do not and will not conflict with or violate the certificate of incorporation, by-laws or other organizational documents of such Party; and (iii) do not and will not conflict with, violate, breach or constitute a default under any contractual obligations of such Party or any of its Affiliates existing as of the Effective Date; (d) Other Rights. Neither such Party nor any of its respective Affiliates is a party to or otherwise bound by any oral or written contract or agreement that will result in any other Person obtaining any interest in, or that would give to any other Person any right to assert any claim in or with respect to, any of such Party's rights under this Agreement; + +21 + +Source: SIGA TECHNOLOGIES INC, 8-K, 6/3/2019 + + + + + +(e) No Violation. Neither such Party nor any of its respective Affiliates is under any obligation to any Person, contractual or otherwise, that is in violation of the terms of this Agreement or that would impede the fulfillment of such Party's obligations hereunder; and (f) No Debarment. As of the Effective Date, neither such Party, its respective Affiliates, nor any of its respective employees, consultants or contractors involved in the performance of activities under this Agreement: (i) is debarred under Section 306(a) or 306(b) of the FD&C Act or by the analogous Laws of any Regulatory Authority; (ii) has, to such Party's knowledge, been charged with, or convicted of, any felony or misdemeanor within the ambit of 42 U.S. C. §§ 1320a-7(a), 1320a-7(b)(l)-(3), or pursuant to the analogous Laws of any Regulatory Authority, or is proposed for exclusion, or the subject of exclusion or debarment proceedings by a Regulatory Authority; (iii) is excluded, suspended or debarred from participation, or otherwise ineligible to participate, in any U.S. or non-U.S. healthcare programs (or has been convicted of a criminal offense that falls within the scope of 42 U.S. C. §1320a-7 but not yet excluded, debarred, suspended, or otherwise declared ineligible), or excluded, suspended or debarred by a Governmental Authority from participation, or otherwise ineligible to participate, in any government contract or program, including procurement or non-procurement programs; and (iv) is a Restricted Party or is owned or controlled by a Restricted Party. 8.2 Additional Representations, Warranties and Covenants of SIGA. SIGA represents and warrants to MMT as of the Effective Date, and covenants to MMT during the Term, as follows: (a) SIGA Patent Schedule. Schedule 1 sets forth a true and complete list of all SIGA Patents owned or otherwise Controlled by SIGA or its Affiliates that relate to the Product or its Manufacture or use, including in the case of SIGA Patents that are licensed to SIGA, the name of the owner(s) and licensor(s) and the agreement(s) providing SIGA with Control. (b) Title; Encumbrances. Except as set forth on Schedule 8.2(b), (i) it has sufficient legal or beneficial title, ownership or license, rights, free and clear from any mortgages, pledges, liens, security interests, options, conditional and installment sale agreements, encumbrances, charges or claims of any kind, of or to the SIGA Intellectual Property to grant the licenses to MMT as purported to be granted pursuant to this Agreement and (ii) no Third Party has taken any action before any patent and trademark office (or similar Governmental Authority), which would render any of the SIGA Intellectual Property invalid or unenforceable; (c) Notice of Infringement or Misappropriation; Non-Infringement of Rights by Third Parties. To SIGA's knowledge, no Third Party is infringing or misappropriating or has infringed the SIGA Intellectual Property. In addition, it has not received any notice from any Third Party asserting or alleging that (i) the Product or any SIGA Trademark has infringed or misappropriated the intellectual property rights of any Third Party or (ii) the performance of MMT's obligations under this Agreement infringes or would infringe any Third Party intellectual property rights; + +22 + +Source: SIGA TECHNOLOGIES INC, 8-K, 6/3/2019 + + + + + +(d) Non-Infringement of Third Party Rights. To SIGA's knowledge, the Commercialization of the Product can be carried out as contemplated by this Agreement as of the Effective Date without infringing any issued patents or pending applications controlled by a Third Party and without infringing any Trademark rights of any Third Party. (e) Non-Assertion by Third Parties. No Third Party has asserted or threatened in writing legal action asserting, that the SIGA Patents or the SIGA Trademarks are invalid or unenforceable by challenging or threatening to challenge the inventorship, ownership, SIGA's right to use, scope, validity or enforceability of any SIGA Patent (including by way of example, through the institution or written threat of institution of interference, derivation, post-grant review, opposition, nullity or similar invalidity proceedings before any Governmental Authority); (f) No Proceeding. There are no pending, and to SIGA's knowledge, no threatened, adverse actions, claims, investigations, suits or proceedings against SIGA or any of its Affiliates, at law or in equity, or before or by any Governmental Authority, involving the SIGA Intellectual Property or the Product, nor to SIGA's knowledge has any such adverse action, claim, investigation, suit or proceeding been brought or threatened since the inception of SIGA as a company, in each case, which has been resolved in a manner that impairs any of SIGA's rights in and to any such SIGA Intellectual Property or the Product; (g) No Consents. No authorization, consent, approval of a Third Party, nor any license, permit, exemption of or filing or registration with or notification to any court or Governmental Authority is or will be necessary for the (i) valid execution, delivery or performance of this Agreement by SIGA, including SIGA's obligations under this Agreement; (ii) the consummation by SIGA of the transactions contemplated hereby and the rights conveyed to MMT hereunder; or (iii) prevention of the termination of any right, privilege, license or agreement relating to the SIGA Intellectual Property or the continuation thereof following the Effective Date; (h) No Non-Competition Agreements. Neither SIGA nor any of its Affiliates are bound by any non-competition agreements related to the Product; (i) Compliance with Laws. SIGA has complied with all Laws in connection with the prosecution of the SIGA Patents, including any duty of candor owed to any patent office pursuant to such Laws; (j) No Grant of Rights. As of the Effective Date, there are no rights with respect to the Product or the SIGA Trademarks in the Territory granted by SIGA, in each case, to any Person or entity other than MMT; + +23 + +Source: SIGA TECHNOLOGIES INC, 8-K, 6/3/2019 + + + + + +(k) No Third Party Rights to Sublicense. No Third Party has the right to sublicense any SIGA Patent or SIGA Trademark without the express written consent of SIGA, which consent will be withheld if in any way it conflicts with this Agreement. (l) No Unauthorized Use. Neither SIGA nor any of its Affiliates has received any written notice of any unauthorized use, infringement, or misappropriation by any Person, including any current or former employee or consultant of SIGA or its Affiliates, in respect of the Product or of any of the SIGA Intellectual Property; (m) Intellectual Property Rights. The SIGA Intellectual Property includes and will continue to include all intellectual property rights Controlled by SIGA which are reasonably necessary for the Commercialization of the Product in accordance with the terms of this Agreement. (n) Maintenance of SIGA Patent and Trademark Rights. SIGA will, at SIGA's sole discretion, diligently prosecute, maintain, enforce, and defend each of the SIGA Patents and the SIGA Trademarks reasonably necessary for the Commercialization of the Product in accordance with the terms of this Agreement. (o) SIGA Patents and Patent Applications. (i) The SIGA Patents listed on Schedule 1 are the only patents and patent applications relating to the Product in the Field in the Territory which SIGA has an interest either alone or jointly with any Third Party, and (ii) SIGA does not have knowledge of any information which leads it to believe that any issued patents included in the SIGA Patents are invalid or unenforceable; (p) SIGA Trademarks and Trademark Applications. (i) The SIGA Trademarks listed on Schedule 2 are the only Trademarks and Trademark applications relating to the Product in which SIGA has an interest either alone or jointly with any Third Party (other than applications made during the Term in accordance with Section 7.3), and (ii) to SIGA's knowledge none of the SIGA Trademarks are invalid or unenforceable; (q) Renewal and Maintenance Fees. All material renewal and maintenance fees due as of the Effective Date with respect to the prosecution and maintenance of the SIGA Patents and SIGA Trademarks have been paid, and to SIGA's knowledge, all issued patents within the SIGA Patents, and each claim set forth therein are in full force and effect and are valid and enforceable; (r) Access to Information. SIGA has allowed, and will continue to allow, MMT reasonable access to material information in SIGA's possession or Control (i) concerning side effects, injury, toxicity or sensitivity reaction and incidents or severity thereof with respect to the Product; and (ii) in respect of the SIGA Intellectual Property and the Product; (s) Inventors. The inventors named in the SIGA Patents are, to SIGA's knowledge, all of the true inventors for such SIGA Patents and each of such inventors has assigned to SIGA or its Affiliates all of his or her right, title and interest to such SIGA Patents and the inventions described therein; + +24 + +Source: SIGA TECHNOLOGIES INC, 8-K, 6/3/2019 + + + + + +(t) Employee Confidentiality Agreements. All current and former employees and paid consultants (in the case of academic consultants, those acting outside the scope of their academic affiliation) of SIGA and its Affiliates who are or have been substantively involved in the conception, design, review, evaluation, reduction to practice, or Development of SIGA Patents or the Product have executed written contracts or are otherwise obligated to protect the confidential status and value thereof and to vest in SIGA exclusive ownership of the SIGA Patents and the Product; (u) Third Party Confidentiality. With the exception of the Government Authorities, to our knowledge, no Third Party has any SIGA Know-How in its possession or Control which is not subject to continuing obligations of confidentiality owed to SIGA or its Affiliates for at least the duration of the Term; provided that SIGA Know-How may be disclosed to Governmental Authorities without a continuing obligation of confidentiality owed to SIGA or its Affiliates if disclosed in connection with the Promotion of the Product hereunder or by SIGA outside of the Territory; (v) Safety and Efficacy. SIGA is not aware of any problems concerning the safety or efficacy of the Product (including any of its ingredients) or of any questions raised by any Regulatory Authority with respect thereto, and SIGA has provided relevant information to MMT of all adverse drug reactions known to SIGA relating to the Product or their use; (w) Good Practices. The Development and Manufacture of the Product has been carried out as of the Effective Date in accordance with United States GLP, GCP and GMP, as applicable and where required. After the Effective Date, the Development and Manufacture of the Product will be carried in accordance with the GLP, GCP and GMP of the United States and any country in the Territory where the Product has received Regulatory Approval, in all cases, as applicable and where required; and (x) Regulatory Matters. (i) SIGA has provided or made available, when requested by MMT to conduct its due diligence review, documents and communications in its possession from and to any Governmental Authority, or prepared by any Governmental Authority, related to the Product, that may bear on the compliance with the requirements of any Governmental Authority, including any notice of inspection, inspection report, warning letter, deficiency letter, or similar communication (collectively "Compliance Communications"); (ii) Neither SIGA nor any of its Affiliates has received, with respect to SIGA Intellectual Property and the Product, any oral or written communication (including any warning letter, untitled letter, or similar notices) from any Governmental Authority and, there is no action pending or, to SIGA's knowledge, threatened (including any prosecution, injunction, seizure, civil fine, suspension or recall), in each case alleging that with respect to the SIGA Intellectual Property or Product, SIGA or any of its Affiliates is not currently materially in compliance with any and all Laws implemented by such Governmental Authority (collectively, a "Non-Compliance Action"). Neither SIGA nor any of its Affiliates has received any oral or written notice from any Governmental Authority claiming that the Development, Commercialization or Promotion of the Product is not in material compliance with all Laws and permits; + +25 + +Source: SIGA TECHNOLOGIES INC, 8-K, 6/3/2019 + + + + + +(iii) As to any Product, during the Term SIGA shall provide, or make available, to MMT copies of any (A) Compliance Communications within five (5) Business Days after provision to, or receipt from, any Governmental Authority and (B) Non-Compliance Action within five (5) Business Days after receipt from a Governmental Authority; except (in the cases of (A) and (B)) to the extent that SIGA's counsel reasonably believes that such disclosure to MMT could violate applicable privacy Laws or have a significant adverse impact on SIGA's legal position or defense (including the loss of attorney-client privilege). In the event that SIGA determines that disclosure could violate applicable privacy laws or have a significant adverse impact on its legal position or defense, SIGA shall promptly notify MMT that it is exercising its right not to disclose; and (iv) To SIGA's knowledge, none of SIGA, any of its Affiliates or any of their respective officers, employees or agents has made, with respect to the SIGA Intellectual Property or the Product, an untrue statement of a material fact to any Governmental Authority or has failed to disclose a material fact required to be disclosed to such Governmental Authority. 8.3 Additional Representations and Warranties of MMT. MMT represents and warrants to SIGA as of the Effective Date, and covenants to SIGA during the Term, as follows: (a) With respect to each country in the Territory in which MMT Promotes or intends to Promote the Product, if MMT knows or becomes aware that Governmental Authorities in such country cannot purchase the Product unless the Product has received Regulatory Approval in such country, then MMT shall promptly notify SIGA of such requirement; and (b) With respect to each country in the Territory, MMT has not received, any oral or written communication relating to the Products or the Promotion of the Products contemplated by this Agreement (including any warning letter, untitled letter, or similar notices) from any Governmental Authority in such country and, there is no action pending or, to MMT's knowledge, threatened (including any prosecution, injunction, seizure, civil fine, suspension or recall), in each case alleging that MMT is not currently materially in compliance with any and all Laws implemented by such Governmental Authority that would materially impact MMT's ability to perform its obligations hereunder in such country. + +26 + +Source: SIGA TECHNOLOGIES INC, 8-K, 6/3/2019 + + + + + +8.4 Covenants. (a) No Debarment or Restricted Party. Neither Party will knowingly use any employee, consultant, contractor or agent or knowingly engage in Promotion, Commercialization, or distribution of Product to any entity or Person: (i) who has been debarred under Section 306(a) or 306(b) of the FD&C Act or pursuant to the analogous Laws of any Regulatory Authority; (ii) who, to such Party's knowledge, has been charged with, or convicted of, any felony or misdemeanor within the ambit of 42 U.S.C. §§ 1320a-7(a), 1320a-7(b)(l)-(3), or otherwise pursuant to the analogous Laws of any Regulatory Authority, or is proposed for exclusion, or the subject of exclusion or debarment proceedings by a Regulatory Authority, during the employee's or consultant's employment or contract term with such Party; (iii) who is excluded, suspended or debarred from participation, or otherwise ineligible to participate, in any U.S. or non- U.S. healthcare programs (or who has been convicted of a criminal offense that falls within the scope of 42 U.S. C. §1320a-7 but has not yet been excluded, debarred, suspended, or otherwise declared ineligible); (iv) who is excluded, suspended or debarred by a Governmental Authority from participation, or otherwise ineligible to participate, in any government contract or government program, including procurement and non-procurement programs; or (v) who is otherwise a Restricted Party. (b) Each Party will conduct appropriate screening of employees, consultants, contractors or agents that perform services on behalf of such Party under this Agreement against the relevant Restricted Party Lists. Each Party will notify the other Party promptly, but in no event later than five (5) Business Days, upon becoming aware that any of its employees, consultants, contractors or agents has been excluded, debarred, suspended or is otherwise ineligible, or is the subject of exclusion, debarment or suspension proceedings by any Regulatory Authority. Notwithstanding the foregoing, each Party will notify the other Party immediately in the event that any employee, consultant, contractor or agent performing services on behalf of such Party under this Agreement becomes a Restricted Party during the Term and, in such event, the Parties shall immediately suspend all activities relating thereto, including the performance of any accrued obligations under this Agreement or any Customer Contract. (c) Compliance. (i) Health Authorities. Each Party and its Affiliates will comply in all material respects with all Laws in the Development, Manufacture, Promotion and Commercialization of the Product and the performance of its obligations under this Agreement, including where applicable the statutes, regulations and written directives of the FDA, the EMA, and any Regulatory Authority having jurisdiction in the Territory, and all applicable Anti-Corruption Laws. + +27 + +Source: SIGA TECHNOLOGIES INC, 8-K, 6/3/2019 + + + + + +(ii) Anti-Corruption. In connection with the performance of its obligations under this Agreement, neither Party, including its officers, directors, employees, or agents, has taken, nor will either Party take during the Term, any direct or indirect action to knowingly (i) offer, promise, provide, or authorize the offer or provision of money or anything of value, in order to improperly or corruptly seek to influence any official, employee, or representative of a Governmental Authority or any other Person in order to obtain or retain business or any other improper business advantage, (ii) request or accept any such improper payment, (iii) establish or maintain any unlawful fund of corporate monies or other properties, (iv) use any corporate funds for any illegal contributions, gifts, entertainment, travel or other unlawful expenses, or (v) cause a violation of any applicable Anti-Corruption Law. For illustrative purposes only, an example of the activities described in the second sentence of this Section 8.4(c) would be to knowingly provide any improper inducement for a Government Official or other Person to approve, reimburse, prescribe, or purchase the Product, to influence the outcome of a clinical trial, or otherwise to benefit a Party's or its Affiliates' business activities improperly. (iii) Trade Controls. (A) Each Party will perform the activities under this Agreement in compliance with all applicable Global Trade Control Laws. (B) Neither Party will knowingly transfer to the other Party any goods, software, technology, or services that are (a) controlled at a level other than EAR99 under the U.S. Export Administration Regulations, (b) controlled under the U.S. International Traffic in Arms Regulations, (c) specifically identified as an E.U. Dual Use Item or (d) on an applicable export control list of a foreign country. (C) The Parties acknowledge that activities under this Agreement will not (i) be in or with a Restricted Market, (ii) involve individuals ordinarily resident in a Restricted Market, or (ii) include companies, organizations, or Governmental Authorities organized or located in a Restricted Market. (d) No Violation. Neither Party nor any of its Affiliates will enter into an agreement or otherwise create any obligation to any Person or entity, contractual or otherwise, that is in material violation of the terms of this Agreement. (e) Third Party Confidentiality. SIGA will use Commercially Reasonable Efforts to (i) maintain the confidentiality of the SIGA Know-How, and (ii) ensure that no Third Party has any SIGA Know-How in its possession or Control which is not subject to continuing obligations of confidentiality owed to SIGA or its Affiliates for at least the duration of the Term; provided that SIGA Know-How may be disclosed to Governmental Authorities without a continuing obligation of confidentiality owed to SIGA or its Affiliates if disclosed in connection with the Promotion of the Product. + +28 + +Source: SIGA TECHNOLOGIES INC, 8-K, 6/3/2019 + + + + + +8.5 No Other Representations or Warranties. EXCEPT AS EXPRESSLY STATED IN THIS AGREEMENT, NO REPRESENTATIONS OR WARRANTIES WHATSOEVER, WHETHER EXPRESS OR IMPLIED, INCLUDING WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT, OR NON-MISAPPROPRIATION OF THIRD PARTY INTELLECTUAL PROPERTY RIGHTS, ARE MADE OR GIVEN BY OR ON BEHALF OF EITHER PARTY, AND ALL REPRESENTATIONS AND WARRANTIES, WHETHER ARISING BY OPERATION OF LAW OR OTHERWISE, ARE HEREBY EXPRESSLY EXCLUDED. ARTICLE 9 + +INDEMNIFICATION 9.1 Indemnification by SIGA. SIGA will, at its sole expense, defend, indemnify, and hold MMT and its Affiliates and their respective officers, directors, shareholders, owners, employees, agents and representatives (the "MMT Indemnitees") harmless from and against any and all, damages, losses, liabilities, taxes, costs, expenses (including court costs and reasonable attorneys' fees and expenses) and recoveries (collectively, "Losses") to the extent arising out of or resulting from any claims, suits, proceedings or demands of Third Parties (including, for the avoidance of doubt, Governmental Authorities) ("Claims"), arising from or occurring as a result of (a) allegations that the Product and /or the SIGA Intellectual Property infringes any Third Party intellectual property rights, (b) SIGA's failure to comply with any Regulatory Approval requirements of Regulatory Authorities in the Territory with respect to the Product, (c) product liability claims arising from SIGA's Development, Manufacture or Commercialization of the Product, (d) the breach of any of SIGA's obligations under this Agreement, including SIGA's representations and warranties, covenants and other agreements, (e) any breach by SIGA of any obligation that MMT has delegated or otherwise appointed SIGA to perform under a Customer Contract and SIGA has agreed to such delegation or appointment in writing, including a failure to supply the Product to Customers pursuant to the terms of this Agreement and/or any Customer Contract or (f) the willful misconduct or gross negligence of SIGA, its Affiliates, or the officers, directors, employees, agents or representatives of SIGA or its Affiliates in connection with performance by or on behalf of SIGA of SIGA's obligations or exercise of SIGA's rights under this Agreement. The foregoing indemnity obligation will not apply (i) to the extent that (x) the MMT Indemnitees fail to comply with the indemnification procedures set forth in Section 9.3 and SIGA's defense of the relevant Claims is prejudiced by such failure or (y) such Claims arise out of or result from the gross negligence or willful misconduct of MMT or its Affiliates or the officers, directors, employees, agents or representatives of MMT or its Affiliates, or breach by MMT of its representations, warranties or covenants or any other obligation of MMT hereunder; or (ii) to Claims for which MMT has an obligation to indemnify SIGA pursuant to Section 9.2, as to which Claims each Party will indemnify the other to the extent of its respective liability for such Claims, provided, for clarity, notwithstanding the provisions of Section 9.2(a) or (b), SIGA shall in all cases be solely responsible for any Claims relating to matters described in Section 9.1(c) and (e). + +29 + +Source: SIGA TECHNOLOGIES INC, 8-K, 6/3/2019 + + + + + +9.2 Indemnification by MMT. MMT will, at its sole expense, defend, indemnify, and hold SIGA and its Affiliates and their respective officers, directors, shareholders. owners, employees, agents and representatives (the "SIGA Indemnitees") harmless from and against any and all Losses to the extent arising out of or resulting from any Claims arising from or occurring as a result of (a) the breach of any of MMT's obligations under this Agreement, including MMT's representations and warranties, covenants and other agreements, (b) subject to Section 9.1(e) any breach by MMT under any Customer Contract, including MMT's representations and warranties, covenants and other agreements, or the failure to comply with this Agreement, or (c) the willful misconduct or gross negligence of MMT, its Affiliates, or the officers, directors, employees, agents or representatives of MMT or its Affiliates in connection with performance by or on behalf of MMT of MMT's obligations or exercise of MMT's rights under this Agreement. The foregoing indemnity obligation will not apply (i) to the extent that (x) the SIGA Indemnitees fail to comply with the indemnification procedures set forth in Section 9.3 and MMT's defense of the relevant Claims is prejudiced by such failure or (y) such Claims arise out of or result from the gross negligence or willful misconduct of SIGA or its Affiliates or the officers, directors, employees, agents or representatives of SIGA, or any breach by SIGA of its representations, warranties or covenants hereunder; or (ii) to Claims for which SIGA has an obligation to indemnify MMT pursuant to Section 9.1, as to which Claims each Party will indemnify the other to the extent of its respective liability for such Claims. 9.3 Indemnification Procedures. The Party claiming indemnity under this ARTICLE 9 (the "Indemnified Party") shall give written notice to the Party from whom indemnity is being sought (the "Indemnifying Party") promptly after becoming aware of a Claim for which indemnity may be sought hereunder (it being understood and agreed, however, that the failure by an Indemnified Party to give notice of a Claim for which indemnity may be sought as provided in this Section 9.3 shall not relieve the Indemnifying Party of its indemnification obligation under this Agreement except that in no event shall the Indemnifying Party be liable for any Losses that result from any delay in providing such notice). The Indemnified Party will provide the Indemnifying Party with reasonable assistance, at the Indemnifying Party's reasonable expense, in connection with the defense of the Claim for which indemnity is being sought. The Indemnified Party may participate in and monitor such defense with counsel of its own choosing at its sole expense; provided, however, the Indemnifying Party shall assume and conduct the defense of the Claim and may so defend any such Claim with counsel of its choosing. The Indemnifying Party will not settle any Claim without the prior written consent of the Indemnified Party, not to be unreasonably withheld, unless the settlement involves only the payment of money by the Indemnifying Party. So long as the Indemnifying Party is actively defending the Claim in good faith, the Indemnified Party will not settle or compromise any such Claim without the prior written consent of the Indemnifying Party. If the Indemnifying Party does not assume and conduct the defense of the Claim as provided above, (a) the Indemnified Party may defend against, consent to the entry of any judgment, or enter into any settlement with respect to such Claim in any manner the Indemnified Party may deem reasonably appropriate (and the Indemnified Party need not consult with, or obtain any consent from, the Indemnifying Party in connection therewith), and (b) the Indemnifying Party will remain responsible to indemnify the Indemnified Party as provided in this ARTICLE 9. The assumption of the defense by the Indemnifying Party will not be construed as an acknowledgment that the Indemnifying Party is liable to indemnify the Indemnified Party with respect to such Claim, nor will it constitute a waiver by the Indemnifying Party of any defenses it may assert against the Indemnified Party's claim for indemnification. + +30 + +Source: SIGA TECHNOLOGIES INC, 8-K, 6/3/2019 + + + + + +9.4 Insurance. MMT and SIGA shall each, at their sole cost and expense, procure and maintain (a) commercial general liability insurance in amounts not less than $[***] per incident and $[***] annual aggregate, and (c) product liability insurance in amounts not less than $[***] annual aggregate, and each naming the other Party as additional insured. MMT and SIGA shall maintain such insurance throughout the Term, and shall from time to time provide copies of certificates of such insurance the other Party upon request. 9.5 Limitation of Liability. EXCEPT (I) IN THE EVENT OF THE FRAUD OF A PARTY OR OF A PARTY'S BREACH OF ITS OBLIGATIONS UNDER ARTICLE 7 (INTELLECTUAL PROPERTY) OR ARTICLE 10 (CONFIDENTIALITY), OR (II) TO THE EXTENT ANY SUCH DAMAGES ARE REQUIRED TO BE PAID TO A THIRD PARTY AS PART OF A CLAIM FOR WHICH A PARTY PROVIDES INDEMNIFICATION UNDER THIS ARTICLE 9, NEITHER PARTY NOR ANY OF ITS AFFILIATES OR SUBLICENSEES SHALL BE LIABLE TO THE OTHER IN CONTRACT, TORT, NEGLIGENCE, BREACH OF STATUTORY DUTY OR OTHERWISE FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL, PUNITIVE, REMOTE, EXEMPLARY OR SPECULATIVE DAMAGES OR OTHER DAMAGES THAT ARE NOT PROBABLE AND REASONABLY FORESEEABLE AND IRRESPECTIVE OF WHETHER THAT PARTY OR ANY REPRESENTATIVE OF THAT PARTY HAS BEEN ADVISED OF, OR OTHERWISE MIGHT HAVE ANTICIPATED THE POSSIBILITY OF, ANY SUCH LOSS OR DAMAGE; PROVIDED, FOR CLARITY, [***]. ARTICLE 10 + +CONFIDENTIALITY 10.1 Confidentiality. Each Party agrees that, during the Term and for a period of [***] years thereafter, such Party and its Affiliates will keep confidential and will not publish or otherwise disclose and will not use for any purpose other than as provided for in this Agreement (which includes the exercise of any rights or the performance of any obligations hereunder) any Confidential Information furnished to it or its Affiliates by the other Party or its Affiliates pursuant to this Agreement, except to the extent expressly authorized by this Agreement or as otherwise agreed to in writing by the Parties; provided, however, that the confidentiality and non-use obligations imposed by this Agreement with respect to trade secrets included in an item of Confidential Information will continue for as long as the disclosing Party continues to treat such Confidential Information as a trade secret. The foregoing confidentiality and non-use obligations do not apply to any portion of the other Party's Confidential Information that the receiving Party can demonstrate by competent written proof: + +31 + +Source: SIGA TECHNOLOGIES INC, 8-K, 6/3/2019 + + + + + +(a) was already known to the receiving Party or its Affiliate, other than under an obligation of confidentiality hereunder, at the time of disclosure by the other Party or any of its Affiliates; (b) was generally available to the public or otherwise part of the public domain at the time of its disclosure to the receiving Party or any of its Affiliates; (c) became generally available to the public or otherwise part of the public domain after its disclosure and other than through any act or omission of the receiving Party or any of its Affiliates in breach of this Agreement; (d) was disclosed to the receiving Party or any of its Affiliates by a Third Party who had a legal right to make such disclosure and who did not obtain such information directly or indirectly from the other Party or any of its Affiliates; or (e) was independently discovered or developed by the receiving Party or any of its Affiliates without access to or aid, application or use of the other Party's Confidential Information, as evidenced by a contemporaneous writing. 10.2 Authorized Disclosure. Notwithstanding the obligations set forth in Section 10.1, either Party or its respective Affiliates may disclose the other Party's Confidential Information and the terms of this Agreement to the extent: (a) such disclosure is reasonably necessary (i) for the filing or prosecuting of Patent or Trademark rights as contemplated by this Agreement; (ii) to comply with the requirements of Regulatory Authorities with respect to obtaining and maintaining Regulatory Approval of Product; or (iii) for prosecuting or defending litigation as contemplated by this Agreement; (b) such disclosure is reasonably necessary to its officers, directors, employees, agents, consultants, contractors, licensees, sublicensees, attorneys, accountants, lenders, insurers, shareholders, or licensors on a need-to-know basis for the sole purpose of performing its obligations or exercising its rights under this Agreement; provided that in each case, the disclosees are bound by obligations of confidentiality and non-use no less stringent than those contained in this Agreement; (c) such disclosure is reasonably necessary to any bona fide potential or actual investor, acquiror, merger partner, or other financial or commercial partner for the sole purpose of evaluating an actual or potential investment, acquisition or other business relationship with the disclosing Party; provided that in each case, the disclosees are bound by written obligations of confidentiality and non-use having a minimum term of two (2) years; or + +32 + +Source: SIGA TECHNOLOGIES INC, 8-K, 6/3/2019 + + + + + +(d) such disclosure is reasonably necessary to comply with Laws, including regulations promulgated by applicable security exchanges, court order, administrative subpoena or other order. Notwithstanding the foregoing, if either Party or any of its respective Affiliates is required to make a disclosure of the other Party's Confidential Information pursuant to Section 10.2(a) or 10.2(d), such Party will promptly notify the other Party of such required disclosure and, upon the other Party's request, such Party and its Affiliates will use reasonable efforts to obtain, or to assist the other Party in obtaining, a protective order preventing or limiting the required disclosure at the non-disclosing Party's sole cost. 10.3 Technical Publication. Upon request, SIGA will provide to MMT publications, and other forms of public disclosure such as abstracts and presentations, of results of studies carried out to the extent they relate to the Product and are not protected by a confidentiality agreement with a Third Party, in each case, as soon as reasonably practicable after such disclosure. 10.4 Publicity; Terms of Agreement. (a) The Parties agree that the material terms of this Agreement are the Confidential Information of both Parties, subject to the special authorized disclosure provisions set forth in this Section 10.4. (b) SIGA may make a public announcement of the execution of this Agreement in the form attached as Exhibit C, which will be issued on or promptly after the Effective Date. (c) If either Party or its Affiliates desires to make a public announcement concerning the material terms of this Agreement such Party will give reasonable prior advance notice of the proposed text of such announcement to the other Party for its prior review and approval (except as otherwise provided herein), such approval not to be unreasonably withheld. A Party commenting on such a proposed announcement will provide its comments, if any, within five (5) Business Days after receiving the announcement for review, or such shorter period as may be reasonably required in order for the proposing Party to comply with any applicable deadline for making such announcement (as such deadline is communicated by the proposing Party to the commenting Party). In addition, where required by Laws or sought by either Party, including regulations promulgated by applicable security exchanges, such Party or its Affiliates may make a press release announcing the achievements of any material event with respect to this Agreement or the Parties' performance thereof, subject only to the review procedure set forth in the preceding sentence; provided that the review period will be reduced to two (2) Business Days (or such shorter period as may be reasonably required in order for the proposing Party to comply with any applicable deadline for making such press release, as such deadline is communicated by the proposing Party to the commenting Party) if the deadline for making such disclosure is five (5) or fewer Business Days after such achievement or event. In relation to the other Party's review of such an announcement, such other Party may make specific, reasonable comments on such proposed press release within the prescribed time for commentary, but will not withhold, condition, or delay its consent to disclosure of the information. Neither Party nor their respective Affiliates are required to seek the permission of the other Party to repeat any information regarding the terms of this Agreement that has already been publicly disclosed by such Party or its Affiliate, or by the other Party or its Affiliate, in accordance with this Section 10.4, if such information remains accurate as of such time. + +33 + +Source: SIGA TECHNOLOGIES INC, 8-K, 6/3/2019 + + + + + +(d) The Parties acknowledge that either or both Parties may be obligated to file under Laws a copy of this Agreement with the U.S. Securities and Exchange Commission ("SEC") or other Governmental Authorities. Each Party will make such a required filing and will request confidential treatment of the commercial terms and sensitive technical or other competitively sensitive terms hereof and thereof to the extent such confidential treatment is available to such Party or file redacted versions of such terms as permitted by the SEC. In the event of any such filing, the filing Party will provide the other Party with a copy of this Agreement marked to show the provisions for which such Party intends to seek confidential treatment and will reasonably consider and incorporate the other Party's comments thereon to the extent consistent with the legal requirements, with respect to the filing Party, governing disclosure of material agreements and material information that must be publicly filed. 10.5 Prior Confidentiality Agreements. Any prior confidentiality agreements between the Parties are hereby superseded by this Agreement. Additionally, all information disclosed by a Party or its Affiliates to the other Party or its Affiliates pursuant to any prior confidentiality agreements shall be deemed to be such Party's Confidential Information disclosed hereunder and the confidentiality, non-use and non-disclosure obligations set forth in this ARTICLE 10 will apply to the receiving Party, its Affiliates and disclosees. If any such obligations conflict with the obligations set forth in any prior confidentiality agreements, then the receiving Party, its Affiliates and disclosees will comply with the more stringent obligations. 10.6 Return of Confidential Information. Except as otherwise set forth in this Agreement, upon termination of this Agreement, the receiving Party shall promptly return, or upon request of the disclosing party destroy and provide written certification of such destruction, all of the disclosing Party's Confidential Information, including all reproductions and copies thereof in any medium, except that the receiving Party may retain a reasonable number of archival copies as may be required by Law or its reasonable standard document retention policies. 10.7 Unauthorized Use. If either Party becomes aware or has knowledge of any unauthorized use or disclosure of the other Party's Confidential Information, it will promptly notify the other Party in writing of such unauthorized use or disclosure. 10.8 Exclusive Property. All Confidential Information is the sole and exclusive property of the disclosing Party and the permitted use thereof by the receiving Party for purposes of its performance hereunder will not be deemed a license or other right of the receiving Party to use any such Confidential Information for any other purpose. + +34 + +Source: SIGA TECHNOLOGIES INC, 8-K, 6/3/2019 + + + + + +ARTICLE 11 + +TERM AND TERMINATION 11.1 Term. This Agreement becomes effective on the Effective Date and, unless earlier terminated as provided in this ARTICLE 11, shall continue until the five (5) year anniversary of the Effective Date (the "Initial Term"). This Agreement shall be automatically renewed for successive three (3) year terms thereafter (each a "Renewal Term" and together with the Initial Term, the "Term") until and unless (i) either Party provides the other Party written notice of non-renewal no later than ninety (90) days prior the end of the Initial Term or any Renewal Term or (ii) earlier terminated as provided in this ARTICLE 11. 11.2 Termination for Cause. (a) This Agreement may be terminated by either Party on country-by-country basis, or in its entirety, upon [***] days prior written notice at any time during the Term by giving written notice to the other Party in the event that such other Party has committed a material breach of its obligations under this Agreement with respect to such country(ies) or the Agreement in its entirety, as applicable, and such material breach remains uncured for [***] days from the date of such notice. (b) Either Party may terminate this Agreement in its entirety immediately by written notice if the other Party (i) applies for or consents to the appointment of, or the taking of possession by, a receiver, custodian, trustee or liquidator of itself or of all or a substantial part of its property, (ii) makes a general assignment for the benefit of its creditors, (iii) commences a voluntary case under the Bankruptcy Code of any country, (iv) files a petition seeking to take advantage of any Laws relating to bankruptcy, insolvency, reorganization, winding-up, or composition or readjustment of debts, (v) fails to controvert in a timely and appropriate manner, or acquiesces in writing to, any petition filed against it in any involuntary case under the Bankruptcy Code of any country, (vi) takes any corporate action to effect any of the foregoing, (vii) has a proceeding or case commenced against it in any court of competent jurisdiction, seeking (A) its liquidation, reorganization, dissolution or winding-up, or the composition or readjustment of its debts, (B) the appointment of a trustee, receiver, custodian, liquidator or the like of all or any substantial part of its assets, or (C) similar relief under the Bankruptcy Code of any country, or an order, judgment or decree approving any of the foregoing is entered and continues unstayed for a period of sixty (60) days, or (viii) has an order for relief against it entered in an involuntary case under the Bankruptcy Code of any country. (c) SIGA may immediately terminate this Agreement on a country-by-country basis on notice to MMT if SIGA receives any information that it in good faith determines to be evidence of an actual breach by MMT or its Affiliates of Section 8.4(c)(ii) in such country. In the event of such termination, SIGA shall have no liability to MMT for any charges, fees, reimbursements, or other compensation or claims under this Agreement with respect to such country, including for services previously performed. + +35 + +Source: SIGA TECHNOLOGIES INC, 8-K, 6/3/2019 + + + + + +11.3 Termination Upon Certain Changes of Control. [***]. 11.4 Termination for Failure to [***]. SIGA may terminate this Agreement immediately upon written notice to MMT if MMT does not, in accordance with the provisions of Section 2.3, notify SIGA in writing [***]. 11.5 Termination for Convenience. Notwithstanding any other provision of this Agreement, MMT may at any time terminate this Agreement on country-by-country basis, or in its entirety, upon [***] months' prior written notice to SIGA. 11.6 Effect of Termination. Upon termination of this Agreement pursuant to this ARTICLE 11, for all Customer Contracts then in force in the Territory, MMT shall either (i) promptly exercise its rights to terminate such Customer Contracts pursuant to termination rights accruing from the occurrence of a termination of this Agreement or otherwise or (ii) upon timely written request of SIGA, use Commercially Reasonable Efforts to assign any Customer Contract identified in such notice then in force to SIGA. SIGA shall be solely responsible for all costs and expenses incurred under or in connection with the assignment of a Customer Contract to SIGA pursuant to clause (ii) of this Section 11.6. All costs, penalties or other expenses incurred under or in connection with any Customer Contract as a result of MMT's termination of a Customer Contract pursuant to clause (i) of this Section 11.6 shall be the responsibility of the Party terminating this Agreement, provided that in the event of a termination under Section 11.2, such costs shall be the responsibility of the non-terminating Party. 11.7 Survival. Termination or expiration of this Agreement will not affect rights or obligations of the Parties under this Agreement that have accrued before the date of termination or expiration, including any accrued obligations relating to the delivery of the Product pursuant to ARTICLE 5. Notwithstanding anything to the contrary, the following provisions will survive any expiration or termination of this Agreement: Section 5.6 (Adverse Event Reporting), Section 7.1 (Ownership of SIGA Intellectual Property), ARTICLE 1 (Definitions), ARTICLE 6 (Payments) (solely with respect to accrued payment obligations as of the date of termination or expiration of this Agreement), ARTICLE 9 (Indemnification), ARTICLE 10 (Confidentiality), ARTICLE 11 (Term and Termination), ARTICLE 12 (Dispute Resolution) and ARTICLE 13 (Miscellaneous). ARTICLE 12 + +DISPUTE RESOLUTION 12.1 Executive Officer Resolution. Except with respect to disputes arising from the delivery of an Audit Report which disputes shall be governed by the terms of Section 6.6, if any dispute or disagreement arises between the Parties in respect of this Agreement, to the extent not resolved by the JSC: (a) The Party claiming that such a dispute exists will give notice in writing to the other Party of the nature of the dispute (a "Notice of Dispute"). + +36 + +Source: SIGA TECHNOLOGIES INC, 8-K, 6/3/2019 + + + + + +(b) Within thirty (30) days of receipt of a Notice of Dispute, the Parties' Executive Officers will meet and confer in person or by teleconference and at this meeting will use their reasonable efforts to resolve such dispute. (c) If, within a further period of thirty (30) days, or in any event within sixty (60) days of initial receipt of the Notice of Dispute, the dispute has not been resolved, or if, for any reason, the meeting described in Section 12.1(b) has not been held within sixty (60) days of initial receipt of the Notice of Dispute, then the Parties agree that either Party may initiate litigation to resolve such dispute. (d) Notwithstanding any provision of this Agreement to the contrary, either Party may immediately seek preliminary, temporary or permanent injunctive and other equitable relief in any court of competent jurisdiction to (i) prevent or curtail any actual or threatened breach of this Agreement that is reasonably likely to cause it irreparable harm or (ii) enforce its rights under this Agreement. 12.2 Governing Law. This Agreement and all disputes arising out of or related to this Agreement or any breach hereof are governed by and construed under the Laws of the State of New York, without giving effect to any choice of law principles that would require the application of the Laws of a different state. 12.3 Jurisdiction. Each Party to this Agreement hereby (a) irrevocably submits to the exclusive jurisdiction of the state courts of the State of New York or the United States District Court for the Southern District of New York for the purpose of any and all actions, suits or proceedings arising in whole or in part out of, related to, based upon or in connection with this Agreement or the subject matter hereof, (b) waives to the extent not prohibited by Law, and agrees not to assert, by way of motion, as a defense or otherwise, in any such action, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that any such action brought in one of the above-named courts should be dismissed on grounds of forum non conveniens, should be transferred to any court other than one of the above-named courts or that this Agreement or the subject matter hereof may not be enforced in or by such court and (c) agrees not to commence any such action other than before one of the above-named courts nor to make any motion or take any other action seeking or intending to cause the transfer or removal of any such action to any court other than one of the above-named courts whether on the grounds of forum non conveniens or otherwise. 12.4 NO JURY TRIAL. THE PARTIES EXPRESSLY WAIVE AND FOREGO, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREBY OR THE ACTIONS OF THE PARTIES IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT HEREOF. + +37 + +Source: SIGA TECHNOLOGIES INC, 8-K, 6/3/2019 + + + + + +ARTICLE 13 + +MISCELLANEOUS 13.1 Entire Agreement; Amendment. This Agreement, including the Schedules and Exhibits hereto, together with the confidentiality agreements referenced in Section 10.5, and any other documents delivered pursuant hereto or thereto, sets forth the complete, final and exclusive agreement and all the covenants, promises, agreements, warranties, representations, conditions and understandings between the Parties hereto and thereto and their Affiliates with respect to the subject matter hereof and supersedes, as of the Effective Date, all prior and contemporaneous agreements and understandings between the Parties with respect to the subject matter hereof. There are no covenants, promises, agreements, warranties, representations, conditions or understandings, either oral or written, between the Parties with respect to the subject matter of this Agreement other than as are set forth in this Agreement. No subsequent alteration, amendment, change or addition to this Agreement will be binding upon the Parties unless reduced to writing and signed by an authorized officer of each Party. 13.2 Force Majeure. Both Parties will be excused from the performance of their obligations under this Agreement to the extent that such performance is prevented by force majeure and the non-performing Party promptly provides notice of the prevention to the other Party. Such excuse will continue for so long as the condition constituting force majeure continues and the non-performing Party takes reasonable efforts to remove the condition. For purposes of this Agreement, force majeure includes conditions beyond the control of the Parties, including an act of God, war, civil commotion, terrorist act, epidemic, failure or default of public utilities or common carriers, destruction of production facilities or materials by fire, earthquake, and storm or like catastrophe. Notwithstanding the foregoing, a Party will not be excused from making payments owed hereunder because of a force majeure affecting such Party. If a force majeure persists for more than sixty (60) days, then the Parties will discuss in good faith the modification of the Parties' obligations under this Agreement to mitigate the delays caused by such force majeure. 13.3 Notices. Any notice required or permitted to be given under this Agreement will be in writing, will specifically refer to this Agreement, and will be addressed to the appropriate Party at the address specified below or such other address as may be specified by such Party in writing in accordance with this Section 13.3, and will be deemed to have been given for all purposes (a) when received, if hand-delivered or sent by email with non-automated confirmed read receipt or a reputable courier service, or (b) five (5) Business Days after mailing, if mailed by first class certified or registered airmail, postage prepaid, return receipt requested. If to SIGA: SIGA Technologies, Inc. 31 East 62nd Street, 5t h Floor New York, NY 10065 Attn: General Counsel + +38 + +Source: SIGA TECHNOLOGIES INC, 8-K, 6/3/2019 + + + + + +With copies to (which will not constitute notice): Lily Wound, Esq. WilmerHale 7 World Trade Center 250 Greenwich Street New York, NY 10007 Email: lily.wound@wilmerhale.com If to MMT: Meridian Medical Technologies, Inc. 6350 Stevens Forest Road, Suite 301 Columbia, Maryland 21046 Attn: General Manager With a copy to: Legal Department + +With a copy to (which will not constitute notice): Arnold & Porter Kaye Scholer LLP 250 West 55t h Street New York, NY 10019-9710 Attn: Lowell Dashefsky and Eric Rothman Email: lowell.dashefsky @arnoldporter.com and eric.rothman@arnoldporter.com + +13.4 No Strict Construction; Interpretation; Headings. The language in this Agreement is to be construed in all cases according to its fair meaning. Except where the context otherwise requires, wherever used, the singular includes the plural, the plural the singular, the use of any gender applies to all genders. The word "or" is used in the disjunctive sense and the word "and" is used in the conjunctive sense. The captions of this Agreement are for convenience of reference only and in no way define, describe, extend, or limit the scope or intent of this Agreement or the intent of any provision contained in this Agreement. The term "including," "include," or "includes", whether or not followed by "without limitation" or "including, but not limited to," or words of similar import, shall be construed to mean in each case including, without limiting the generality of any description preceding such term. The Parties agree that no meaning should be inferred about the use of "without limitation" or "including, but not limited to" in some instances but not others. Unless the context requires otherwise, (i) any definition of or reference to any agreement, instrument or other document will be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein or therein), (ii) any reference to any Laws will be construed as referring to such Laws as from time to time enacted, repealed or amended, (iii) any reference to any Person will be construed to include the Person's successors and permitted assigns, (iv) the words "herein", "hereof" and "hereunder", and words of similar import, will be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (v) any reference to the words "mutually agree" or "mutual written agreement" will not impose any obligation on either Party to agree to any terms relating thereto or to engage in discussions relating to such terms except as such Party may determine in such Party's sole discretion, (vi) all references to Sections, Exhibits or Schedules will be construed to refer to Sections, Exhibits and Schedules to this Agreement, (vii) the word "days" means calendar days and the word "month" means calendar month unless otherwise specified, (viii) the words "copy" and "copies" and words of similar import when used in this Agreement include, to the extent available, electronic copies, files or databases containing the information, files, items, documents or materials to which such words apply, and (ix) any reference "dollar", "dollars" or "$" will be construed to refer to U.S. dollars. The headings of each Article and Section in this Agreement have been inserted for convenience of reference only and are not intended to limit or expand on the meaning of the language contained in the particular Article or Section. Each Party represents that it has been represented by legal counsel in connection with this Agreement and acknowledges that it has participated in the drafting hereof. In interpreting and applying the terms and provisions of this Agreement, the Parties agree that no presumption will apply against the Party which drafted such terms and provisions. + +39 + +Source: SIGA TECHNOLOGIES INC, 8-K, 6/3/2019 + + + + + +13.5 Assignment. Neither Party may assign or transfer this Agreement or any rights or obligations hereunder without the prior written consent of the other Party, except that a Party may make such an assignment without the other Party's consent to its Affiliates or to a Third Party successor of, or transferee to, assets of such Party to which this Agreement relates, whether in a merger, sale of stock, sale of assets or other transaction. Any successor or assignee of rights or obligations permitted hereunder will, in writing to the other Party, expressly assume performance of such rights or obligations. Any permitted assignment will be binding on the successors of the assigning Party. Any assignment or attempted assignment by either Party in violation of the terms of this Section 13.5 is null, void and of no legal effect. 13.6 Performance by Affiliates. Subject to Section 2.1(b), each Party may discharge any obligations and exercise any right hereunder through any of its Affiliates. Each Party hereby guarantees the performance by its Affiliates of such Party's obligations under this Agreement, and will cause its Affiliates to comply with the provisions of this Agreement in connection with such performance. Any breach by a Party's Affiliate of any of such Party's obligations under this Agreement is a breach by such Party, and the other Party may proceed directly against such Party without any obligation to first proceed against such Party's Affiliate. 13.7 Further Assurances and Actions. Each Party, upon the request of the other Party, whether made before or after the Effective Date and without further consideration, will do, execute, acknowledge, and deliver or cause to be done, executed, acknowledged or delivered all such further acts, deeds, documents, assignments, transfers, conveyances, powers of attorney, instruments and assurances as may be reasonably necessary to effect complete consummation of the transactions contemplated by this Agreement, and to do all such other acts, as may be necessary or appropriate to carry out the purposes and intent of this Agreement. The Parties agree to execute and deliver such other documents, certificates, agreements and other writings and to take such other actions as may be reasonably necessary to consummate or implement expeditiously the transactions contemplated by this Agreement. + +40 + +Source: SIGA TECHNOLOGIES INC, 8-K, 6/3/2019 + + + + + +13.8 Severability. Each of the provisions contained in this Agreement will be severable, and the unenforceability of one will not affect the enforceability of any others or of the remainder of this Agreement. If any one or more of the provisions of this Agreement, or the application thereof in any circumstances, is held to be invalid, illegal, or unenforceable in any respect for any reason, the Parties will negotiate in good faith with a view to the substitution therefor of a suitable and equitable solution to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid provision; provided, however, that the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions of this Agreement will not be in any way impaired thereby, it being intended that all of the rights and privileges of the Parties hereto will be enforceable to the fullest extent permitted by Law. 13.9 No Waiver. Any term or condition of this Agreement may be waived at any time by the Party that is entitled to the benefit thereof, but no such waiver will be effective unless set forth in a written instrument duly executed by or on behalf of the Party waiving such term or condition. The waiver, delay or the failure of any Party to enforce or exercise any term, condition or part of this Agreement at any time or in any one or more instances will not be deemed to be or construed as a waiver of the same or any other term, condition or part, nor will it forfeit any rights, power or privilege to future enforcement thereof. No single or partial exercise of any right, power or privilege will preclude any other or further exercise of such right, power or privilege or the exercise of any other right, power or privilege. To the maximum extent permitted by Law, (a) no claim or right arising out of this Agreement or any of the documents referred to in this Agreement can be discharged by one Party, in whole or in part, by a waiver or renunciation of the claim or right unless in writing signed by the other Party; (b) no waiver that may be given by a Party will be applicable except in the specific instance for which it is given; and (c) no notice to or demand on one Party will be deemed to be a waiver of any obligation of that Party or of the right of the Party giving such notice or demand to take further action without notice or demand as provided in this Agreement or the documents referred to in this Agreement. Except as expressly set forth in this Agreement, all rights and remedies available to a Party, whether under this Agreement or afforded by Law or otherwise, will be cumulative and not in the alternative to any other rights or remedies that may be available to such Party. 13.10 Relationship of the Parties. Neither Party will have any responsibility for the hiring, termination or compensation of the other Party's employees or for any employee benefits of such employee. No employee or representative of a Party will have any authority to bind or obligate the other Party to this Agreement for any sum or in any manner whatsoever, or to create or impose any contractual or other liability on the other Party without said Party's approval. For all purposes, and notwithstanding any other provision of this Agreement to the contrary, SIGA's legal relationship to MMT under this Agreement will be that of independent contractor and nothing in this Agreement gives either Party the power or authority to act for, bind, or commit the other Party in any way. This Agreement is not a partnership agreement. Nothing in this Agreement will be construed to establish a relationship of partners, principal and agent or joint venturers between the Parties or their respective employees or Affiliates. Nothing contained in this Agreement shall be construed to create a "separate entity" or "business entity" within the meaning of the U.S. Internal Revenue Code or the regulations thereunder and any foreign equivalents thereto. Neither MMT nor SIGA will make any statements, representations, or commitments of any kind, or to take any action that is binding on the other, without the prior consent of the other Party to do so. + +41 + +Source: SIGA TECHNOLOGIES INC, 8-K, 6/3/2019 + + + + + +13.11 English Language. This Agreement was prepared in the English language, which language governs the interpretation of, and any dispute regarding, the terms of this Agreement. 13.12 Counterparts. This Agreement may be executed in one or more counterparts, each of which is an original, but all of which together constitute one and the same instrument. Each Party may execute this Agreement by facsimile transmission or by PDF. In addition, facsimile or PDF signatures of authorized signatories of any Party will be deemed to be original signatures and will be valid and binding, and delivery of a facsimile or PDF signature by any Party will constitute due execution and delivery of this Agreement. 13.13 Schedules. The disclosure of any matter in any Section of or on any Schedule to this Agreement will only be deemed to be a disclosure for the Section or subsection of this Agreement to which it corresponds in number, unless the applicability of such Schedule to any other Section is readily apparent. The disclosure of any matter in any Schedule to this Agreement will expressly not be deemed to (a) constitute an admission by either Party hereto, or (b) imply that any such matter is material for purposes of this Agreement. 13.14 Expenses. Each of the Parties will bear its own direct and indirect expenses incurred in connection with the negotiation and preparation of this Agreement and, except as set forth in this Agreement, the performance of the obligations contemplated hereby and thereby. [Remainder of this page intentionally left blank] + +42 + +Source: SIGA TECHNOLOGIES INC, 8-K, 6/3/2019 + + + + + +IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed by their duly authorized officers as of the Effective Date. SIGA TECHNOLOGIES, INC. MERIDIAN MEDICAL TECHNOLOGIES, INC. By: /s/ Phillip L. Gomez, III By: /s/ Thomas Handel Name:Phillip L. Gomez, III Name:Thomas Handel Title: CEO Title: General Manager and President + +SIGNATURE PAGE TO PROMOTION AGREEMENT + +Source: SIGA TECHNOLOGIES INC, 8-K, 6/3/2019 + + + + + +EXHIBIT A PERMITTED SUBCONTRACTORS None. + +Source: SIGA TECHNOLOGIES INC, 8-K, 6/3/2019 + + + + + +EXHIBIT B BUSINESS PLAN [***] + +Source: SIGA TECHNOLOGIES INC, 8-K, 6/3/2019 + + + + + +EXHIBIT C SIGA PRESS RELEASE See attached. + +Source: SIGA TECHNOLOGIES INC, 8-K, 6/3/2019 + + + + + +SCHEDULE 1 + +SIGA PATENTS Issued Patents Patent Number Country Protection Conferred Issue Date Expiration Date + +SG 184201 Singapore Certain polymorphs of ST-246, method of preparation of the polymorphs and pharmaceutical compositions containing the polymorphs June 22, 2015 March 23, 2031 + +RU 2578606 Russia Certain polymorphs of ST-246, method of preparation ofthe polymorphs and their use in treating orthopoxvirus March 27, 2016 March 23, 2031 + +OA 16109 OAPI/Africa Certain polymorphs of ST-246, method of preparation ofthe polymorphs and their use in treating orthopoxvirus October 31, 2013 March 23, 2031 + +NZ 602578 New Zealand Certain polymorphs of ST-246, method of preparation ofthe polymorphs and their use in treating orthopoxvirus December 2, 2014 March 23, 2031 + +MX 326231 Mexico Pharmaceutical compositions containing ST-246 and one or more additional ingredients and dosage unit forms containing ST-246 December 11, 2014 April 23, 2027 + +MX 348481 Mexico Compounds, compositions and methods for treatment and prevention of orthopoxvirus infections and associated diseases June 15, 2017 April 23, 2027 + +MX 361428 Mexico Polymorphic forms of ST-246 and methods of preparation December 6, 2018 March 23, 2031 + +MX 363189 Mexico Compounds, compositions and methods for treatment and prevention of orthopoxvirus infections and associated diseases March 14, 2019 April 23, 2027 + +JP 4884216 Japan Therapeutic agent for treating orthopoxvirus including ST-246, pharmaceutical composition of matter for the ST- 246 compound and method of manufacturing ST-246 December 16, 2011 June 18, 2024 + +JP 5657489 Japan Method of manufacturing ST-246 December 5, 2014 June 18, 2024 + +JP 6018041 Japan Certain polymorphs of ST-246, method of preparation of the polymorphs and pharmaceutical compositions containing the polymorphs October 7, 2016 March 23, 2031 + +JP 6188802 Japan Methods of preparing Tecovirimat August 10, 2017 August 14, 2033 JP 6444460 Japan Methods of preparing Tecovirimat December 7, 2018 August 14, 2033 + +CN 2011800245893 China Certain polymorphs of ST-246, method of preparation of the polymorphs and pharmaceutical compositions containing the polymorphs August 26, 2015 March 23, 2031 + +CN 2013800429237 China Methods of preparing Tecovirimat June 20, 2017 August 14, 2033 + +CA 2529761 Canada Use of ST-246 to treat orthopoxvirus infection, pharmaceutical compositions containing ST-246 and composition of matter for the ST-246 compound August 13, 2013 June 18, 2024 + +CA 2685153 Canada Pharmaceutical compositions containing ST-246 and one or more additional ingredients and dosage unit forms containing ST-246 December 16, 2014 April 23, 2027 + +CA 2793533 Canada Certain polymorphs of ST-246, method of preparation of the polymorphs and pharmaceutical compositions containing the polymorphs February 26, 2019 March 23. 2031 + +CA 2866037 Canada Chemicals, compositions and methods for treatment and prevention of orthopoxvirus infections and associated diseases May 16, 2017 April 23, 2027 + +AU 2004249250 Australia Method of treating orthopoxvirus infection, pharmaceutical composition containing ST-246 and composition of matter for the ST-246 compound March 29, 2012 June 18, 2024 + +Source: SIGA TECHNOLOGIES INC, 8-K, 6/3/2019 + + + + + +Patent Number Country Protection Conferred Issue Date Expiration Date + +AU 2007351866 Australia Pharmaceutical compositions containing ST-246 and one or more additional ingredients and dosage unit forms containing ST-246 January 10, 2013 June 18, 2024 + +AU 2011232551 Australia Certain polymorphs of ST-246, method of preparation ofthe polymorphs and their use in treating orthopoxvirus February 26, 2015 March 23, 2031 + +AU 2013302764 Australia Methods of preparing Tecovirimat April 5, 2018 August 14, 2033 + +AU 2012268859 Australia Pharmaceutical compositions containing ST-246 and one or more additional ingredients and dosage unit forms containing ST-246 August 18, 2016 June 18, 2024 + +AP 3221 ARIPO*/Africa Certain polymorphs of ST-246, method of preparation ofthe polymorphs and their use in treating orthopoxvirus April 3, 2015 March 23, 2031 + +ZA 2012/07141 South Africa Certain polymorphs of ST-246, method of preparation of the polymorphs and pharmaceutical compositions containing the polymorphs June 29, 2016 March 23, 2031 + +IL 201736 Israel Pharmaceutical compositions containing ST-246 and one or more additional ingredients and dosage unit forms containing ST-246 October 1, 2016 April 23, 2027 + +IL 236944 Israel Methods of preparing Tecovirimat February 1, 2017 August 14, 2033 + +IL 242666 Israel Compounds, compositions and methods for treatment and prevention of orthopoxvirus infections and associated diseases December 1, 2018 April 23, 2027 + +AT 1638938 Austria Compounds, compositions and methods for treatment and prevention of orthopoxvirus infections and associated diseases April 12, 2017 June 18, 2024 + +BE 1638938 Belgium Compounds, compositions and methods for treatment and prevention of orthopoxvirus infections and associated diseases April 12, 2017 June 18, 2024 + +BE 2549871 Belgium Polymorphic forms of ST-246 August 22, 2018 March 23, 2031 + +CH 1638938 Switzerland Compounds, compositions and methods for treatment and prevention of orthopoxvirus infections and associated diseases April 12, 2017 June 18, 2024 + +CH 2549871 Switzerland Polymorphic forms of ST-246 August 22, 2018 March 23, 2031 + +DE 1638938 Germany Compounds, compositions and methods for treatment and prevention of orthopoxvirus infections and associated diseases April 12, 2017 June 18, 2024 + +DE 2549871 Germany Polymorphic forms of ST-246 August 22, 2018 March 23, 2031 DE 2887938 Germany Methods of preparing Tecovirimat January 10, 2018 August 14, 2033 + +DK 1638938 Denmark Compounds, compositions and methods for treatment and prevention of orthopoxvirus infections and associated diseases April 12, 2017 June 18, 2024 + +DK 2549871 Denmark Polymorphic forms of ST-246 August 22, 2018 March 23, 2031 + +ES 1638938 Spain Compounds, compositions and methods for treatment and prevention of orthopoxvirus infections and associated diseases April 12, 2017 June 18, 2024 + +FI 1638938 Finland Compounds, compositions and methods for treatment and prevention of orthopoxvirus infections and associated diseases April 12, 2017 June 18, 2024 + +Source: SIGA TECHNOLOGIES INC, 8-K, 6/3/2019 + + + + + +Patent Number Country Protection Conferred Issue Date Expiration Date + +FR 1638938 France Compounds, compositions and methods for treatment and prevention of orthopoxvirus infections and associated diseases April 12, 2017 June 18, 2024 + +FR 2887938 France Methods of preparing Tecovirimat January 10, 2018 August 14, 2033 FR 2549871 France Polymorphic forms of ST-246 August 22, 2018 March 23, 2031 + +GB 1638938 United Kingdom Compounds, compositions and methods for treatment and prevention of orthopoxvirus infections and associated diseases April 12, 2017 June 18, 2024 + +GB 2887938 United Kingdom Methods of preparing Tecovirimat January 10, 2018 August 14, 2033 GB 2549871 United Kingdom Polymorphic forms of ST-246 August 22, 2018 March 23, 2031 + +IE 1638938 Ireland Compounds, compositions and methods for treatment and prevention of orthopoxvirus infections and associated diseases April 12, 2017 June 18, 2024 + +IT 502017000078377 Italy Compounds, compositions and methods for treatment and prevention of orthopoxvirus infections and associated diseases April 12, 2017 June 18, 2024 + +NL 1638938 Netherlands Compounds, compositions and methods for treatment and prevention of orthopoxvirus infections and associated diseases April 12, 2017 June 18, 2024 + +PL 1638938 Poland Compounds, compositions and methods for treatment and prevention of orthopoxvirus infections and associated diseases April 12, 2017 June 18, 2024 + +SE 1638938 Sweden Compounds, compositions and methods for treatment and prevention of orthopoxvirus infections and associated diseases April 12, 2017 June 18, 2024 + +Source: SIGA TECHNOLOGIES INC, 8-K, 6/3/2019 + + + + + +Patent Applications [***] + +Source: SIGA TECHNOLOGIES INC, 8-K, 6/3/2019 + + + + + +SCHEDULE 2 + +SIGA TRADEMARKS + +[***] + +Source: SIGA TECHNOLOGIES INC, 8-K, 6/3/2019 + + + + + +SCHEDULE 3 + +Safety Reporting Requirements + +Safety Reporting Requirements for the Product + +1. Scope: SIGA has a legal and corporate responsibility to comply with applicable regulations governing the collection and reporting of adverse events ("AE(s)"), at risk scenarios ("ARSs"), unexpected therapeutic effects ("UTEs"), and product quality complaints ("PQC(s)") associated with the Product, as these terms are defined below. For the purposes of this Exhibit, AEs, ARSs, UTEs, and PQCs are collectively termed "Safety Reports." + +MMT is expressly entitled to perform any regulatory responsibilities for the Product through any of its Affiliates. MMT or an Affiliate of MMT shall exchange Safety Reports with the SIGA contact listed in section 4.1 Reporting Time-Frames. Throughout this Safety Reporting Exhibit, SIGA shall be referred to as "SIGA" and MMT and its Affiliates collectively as "Promoter." At all times SIGA and Promoter shall follow the procedures set out below. + +The procedures described in this Agreement are to be followed for pharmacovigilance activities for the Product, irrespective of any other activities between SIGA and Promoter which are contained within the Agreement. + +2. Definitions: 2.1. Adverse event (AE): an AE is any untoward medical occurrence in a patient administered the Product. The event need not have a causal relationship with the treatment or usage. This includes, but is not limited to: • Abnormal test findings • Clinically significant symptoms and signs + +Source: SIGA TECHNOLOGIES INC, 8-K, 6/3/2019 + + + + + +• Changes in physical examination findings • Hypersensitivity • Progression/worsening of underlying disease • Lack of drug efficacy • Drug abuse • Drug dependency • Signs and symptoms resulting from drug withdrawal and drug interactions • Suspected transmission of an infectious agent via a medicinal product 2.2. At risk scenarios (ARSs): circumstances where the report does not include an AE per se, but nevertheless needs to be reported to SIGA. These circumstances include: • Medication errors (including incorrect prescription or dispensing of a prescription, whether or not administered to the patient) • Exposure during pregnancy • Exposure during breastfeeding • Overdose • Extravasation • Occupational exposure • Off-label use 2.3. Unexpected therapeutic effect (UTEs): a beneficial therapeutic effect of the Product aside from the use for which it had been given. 2.4. Product quality complaint (PQC(s)): is any written or oral expression of dissatisfaction relative to the physical properties, condition, labelling, potency and/or packaging of the Product, including whether the Product is suspected or confirmed to be counterfeit. + +3. Promoter Responsibilities: 3.1. Promoter shall ensure that all employees and, if applicable, subcontractor employees performing activities under this Agreement ("Promoter Personnel") who may become aware of a Safety Report associated with the use of the Product comply with the requirements set out in this Exhibit. 3.2. If Promoter Personnel become aware of a Safety Report that may be associated with the Product, Promoter shall inform SIGA in accordance with the reporting procedures included in this Exhibit and as may be updated and provided to Promoter in the future by SIGA. 3.3. In the event Promoter engages a subcontractor to perform services related to this Agreement, Promoter shall request fulfilment by that subcontractor of these safety reporting requirements on substantially the same terms as those outlined in this Exhibit, unless it is established that there is no possibility that the subcontracted services will involve receipt or handling of Safety Reports by the subcontractor. + +Source: SIGA TECHNOLOGIES INC, 8-K, 6/3/2019 + + + + + +3.4. In the event that Promoter receives a communication from a Regulatory Authority relating to the Product, Promoter shall inform SIGA as soon as possible, but in any event no later than one (1) Business Day or three (3) calendar days of receipt, whichever is shorter. Where possible, SIGA shall be informed prior to, and have the opportunity to review, any response to the regulatory authority by Promoter. + +4. Reporting Process: 4.1. Reporting Time-Frames: Promoter shall report all Safety Reports to SIGA within two (2) Business Days or four (4) calendar days of awareness, whichever is shorter. All reports shall be sent to: + +Drug Safety Unit - Contact Details: Regulatory Affairs, SIGA Technologies E-mail: drugsafety@siga.com Telephone: 541-753-2000 Fax: 541-753-9999 + +Postal Address: SIGA Technologies, Inc.4575 Research Way, Suite 110, Corvallis, OR 97333 + +4.2. Case Receipt Confirmation: The receipt of Safety Reports from Promoter shall be acknowledged by SIGA in writing no later than one (1) Business Day following receipt. If acknowledgement of receipt is not received within this timeframe, then Promoter shall contact SIGA to determine if the source documents need to be re-sent. 4.3. Case Documentation and Record Retention: Promoter shall document all Safety Reports received and reported to SIGA. Documentation shall include, where possible the name, address, and telephone number of the reporter, and whether consent has been given by the reporter to be re-contacted by SIGA. Promoter will maintain a record of each Safety Report received, including relevant source documents, and a record of each Safety Report reported to SIGA for a minimum period of ten (10) years after the expiration or termination of this Agreement and, if requested, will provide these and any other information requested by SIGA. Notwithstanding the aforementioned requirement, before Promoter destroys any Safety Reports and associated source documents, or training records, it will notify SIGA of its intention to do so and afford SIGA the opportunity to retain such records if it so wishes. + +Source: SIGA TECHNOLOGIES INC, 8-K, 6/3/2019 + + + + + +5. Data Privacy: In forwarding Safety Reports to SIGA, Promoter shall comply with all applicable privacy and data protection laws, rules and regulations on the protection of individuals with regard to the processing of Personal Data and the free movement of such data. "Personal Data" means information that can be used by itself or in combination with other available information to identify a specific individual. The Promoter shall collect, use and disclose any Personal Data obtained in the course of performing the safety related activities under this Agreement solely for the purposes of complying with the regulatory obligations as described in this Agreement, or as otherwise required by law or by a court order. Promoter shall use electronic, physical, and other safeguards appropriate to the nature of the information to prevent any use or disclosure of Personal Data other than as provided for by this Agreement. Promoter will also take reasonable precautions to protect the Personal Data from alteration or destruction. + +Promoter shall notify SIGA promptly of any accidental, unauthorized, or unlawful destruction, loss, alteration, or disclosure of, or access to, the Personal Data ("Security Breach"), and take immediate steps to rectify any Security Breach. + +6. Audit: SIGA, or its authorized representatives, shall have the right, at its cost, with reasonable advance notice, during regular business hours, to audit the facility used by the Promoter in order to review the Promoter activities under this Exhibit including, but not limited to, any documents relevant to these activities, for compliance with the safety reporting requirements set out in this Exhibit. Where evidence of non- compliance is identified SIGA and Promoter will jointly discuss to determine appropriate corrective and preventive actions and Promoter will provide SIGA with regular reports on the completion status of the identified corrective and preventive actions. + +Source: SIGA TECHNOLOGIES INC, 8-K, 6/3/2019 + + + + + +SCHEDULE 8.2(b) + +ENCUMBRANCES The assets of SIGA are subject to a lien under the Loan and Security Agreement dated September 2, 2016. + +Source: SIGA TECHNOLOGIES INC, 8-K, 6/3/2019 \ No newline at end of file diff --git a/full_contract_txt/SightLife Surgical, Inc. - STRATEGIC SALES _ MARKETING AGREEMENT.txt b/full_contract_txt/SightLife Surgical, Inc. - STRATEGIC SALES _ MARKETING AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..e8f8f9f3ab93af82119c4d0a2a4278f51b126606 --- /dev/null +++ b/full_contract_txt/SightLife Surgical, Inc. - STRATEGIC SALES _ MARKETING AGREEMENT.txt @@ -0,0 +1,61 @@ +EXHIBIT 10.1 STRATEGIC SALES & MARKETING AGREEMENT THIS STRATEGIC SALES & MARKETING AGREEMENT (the "Agreement") is effective as of the last date provided for on the signature page and is entered into by and between SightLife Surgical, Inc., a Delaware corporation, having its principal place of business at 1200 6th Ave, Ste. 300, Seattle, WA 98101 ("Surgical") and Imprimis Pharmaceuticals, Inc., a Delaware corporation, and its subsidiaries, having its principal place of business at 12264 El Camino Real, Suite 350, San Diego, CA 92130 ("Imprimis"). WHEREAS, Imprimis and/or its subsidiary companies are licensed and accredited pharmacies and/or outsourcing facilities; WHEREAS, Surgical is a cornea-focused organization that provides comprehensive services to support ophthalmic surgeons; and WHEREAS, Imprimis wishes to engage Surgical and its employees to provide contract sales services under the terms and conditions as set forth below. NOW THEREFORE, in consideration of the mutual promises contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Surgical and Imprimis agree, intending to be legally bound, as follows: 1. Sales Representation Services. 1.1. Surgical will provide sales representation services to Imprimis during the Term of this Agreement (Surgical and its sales representatives may be referred to collectively hereinafter as Surgical). The sales representation services ("Services") are set forth in the Statement of Work ("SOW") that is attached hereto as Appendix A and made a part hereof, as it may be amended from time to time by the parties hereto. 1.2. Surgical represents and warrants to Imprimis that: (a) Surgical has the required skill, experience and qualifications to perform the Services, shall perform the Services in a professional and workmanlike manner in accordance with generally recognized industry standards for similar services and shall devote sufficient resources to ensure that the Services are performed in a timely and reliable manner; and (b) Surgical shall perform the Services in compliance with all applicable federal, state and local laws and regulations. 2. Effective Date; Term and Termination. 2.1. This Agreement shall be effective on the later of the dates that it is executed by Imprimis and Surgical (the "Effective Date") and shall terminate pursuant to the terms of the SOW (the "Term"). 2.2. Surgical shall immediately cease to provide any further Services under this Agreement and/or any applicable SOW upon receipt of notice from Imprimis that Imprimis is terminating this Agreement and/or such SOW. Upon termination of this Agreement and/or such SOW, Surgical shall be entitled to payment for Services completed prior to such termination. Thereafter, Imprimis shall owe Surgical no further amounts or obligations in law or equity. Page 1 of 11 + + + + + + 3. Sales Commissions. In consideration of the Services provided hereunder, Imprimis shall pay Surgical sales commissions ("Sales Commissions") as set forth in the SOW. Surgical shall be responsible for all expenses incurred in association with performance of the Services. 4. Sales Commission Payment. Within sixty (60) days after the end of each calendar quarter during the Term, Imprimis shall deliver to Surgical a report setting forth for such calendar quarter the calculation of the applicable Sales Commission due under this Agreement for the sale of the Product (as defined in the SOW). Imprimis shall remit the total Sales Commission payments due for the sale of Product during such calendar quarter at the time such report is made. 5. Ownership of Intellectual Property / Inventions / Work Product. Surgical agrees that it shall disclose promptly to Imprimis all inventions, ideas, concepts, and discoveries, including but not limited to processes, methods, formulas, biological materials, specimens, chemical compounds, formulations, software, data, techniques, products, applications, systems, procedures, technical information, drawings, reports and designs as well as improvements and modifications thereof and know-how thereto (whether or not protectable by copyright, patent, trademark, trade secret or any other proprietary rights), that it makes, conceives of, discovers or develops as a result of the receipt of Confidential Information (as defined in the Confidentiality Agreement referenced in Section 6 below) ("Work Product"). Surgical agrees that all Work Product shall be the sole and exclusive property of Imprimis. 5.1. Surgical represents and warrants that all Work Product is and shall be Surgical's original work (except for material in the public domain or provided by Imprimis) and, to the best of Surgical's knowledge, does not and will not violate or infringe upon the intellectual property right or any other right whatsoever of any person, firm, corporation or other entity. 5.2. Surgical agrees that any Work Product, if subject to copyright, shall be considered a "work made for hire" within the meaning of the Copyright Act of 1976, as amended (the "Act"). If and to the extent that any Work Product is found as a matter of law not to be a "work made for hire" within the meaning of the Act, Surgical agrees to assign, and by this Agreement and Surgical's signature below, Surgical hereby does assign to Imprimis all right, title and interest in and to Work Product, and all copies thereof, and the copyright, patent, trademark, trade secret and all other proprietary rights in Work Product. 5.3. Surgical agrees that, at the request of Imprimis, Surgical will execute all such documents and perform all such acts as Imprimis or its duly authorized agents may reasonably require: (a) to effect the assignment of Work Product as agreed above; (b) to apply for, obtain, and vest in the name of Imprimis alone patents, patent applications, copyrights or other intellectual property rights in any country and (c) at Imprimis' expense, to assist Imprimis in prosecuting any such rights. Page 2 of 11 + + + + + + 5.4. Surgical agrees that promptly upon termination of this Agreement, Surgical shall deliver to Imprimis all Work Product, either completed or uncompleted, and any documents, reports and other materials which are in Surgical's possession in connection with the performance of Services under this Agreement. 6. Confidentiality. Concurrently with this Agreement, the parties shall enter into a confidentiality agreement (the "Confidentiality Agreement"), a copy of which has been attached hereto as Exhibit A, which shall govern the confidentiality of any Confidential Information (as defined in the Confidentiality Agreement) disclosed between the parties. In addition, Surgical shall, at Imprimis' request and in Imprimis' sole discretion, if given access to patient health information, execute a "Business Associate Agreements" as required by the U.S. Health Insurance Portability and Accountability Act of 1996 ("HIPAA"). 7. Conflicts of Interest. 7.1. Surgical represents and warrants that Surgical is not under any pre-existing obligation in conflict or in any way inconsistent with the provisions of this Agreement. Surgical represents and warrants that Surgical's performance of all the terms of this Agreement will not (a) breach any agreement to keep in confidence proprietary information acquired by Surgical in confidence or in trust prior to commencement of this Agreement, or (b) breach any other agreement with any third party. Surgical warrants that Surgical has the right to disclose and/or or use all ideas, processes, techniques and other information, if any, which Surgical has gained from third parties, and which Surgical discloses to Imprimis or uses in the course of performance of this Agreement, without liability to such third parties. Surgical represents and warrants that Surgical has not granted and will not grant any rights or licenses to any intellectual property or technology that would conflict with Surgical's obligations under this Agreement. Surgical will not knowingly infringe upon any copyright, patent, trade secret or other property right of any former client, employer or third party in the performance of the Services. 7.2. Subject to the SOW, Imprimis acknowledges that Surgical may perform services for other clients. Surgical represents and warrants that as of the Effective Date, there is no conflict of interest which would prevent Surgical from performing the Services for Imprimis, and that Surgical is not under any legal or contractual relationship with any third party which is inconsistent with any provision of this Agreement. During the Term of this Agreement, Surgical will not to enter into any other agreement or arrangement that will directly or indirectly compete with the Services to be rendered hereunder, as such agreement shall be considered a breach of this Agreement. In the event that Surgical becomes aware of any potential or actual conflicts of interest regarding the provision of the Services, Surgical shall promptly disclose the fact and nature of such conflict to Imprimis. 8. Debarred Person. Surgical hereby certifies that Surgical is not currently nor has been debarred by the U.S. Food and Drug Administration pursuant to 21 USC §335a(a) or (b), or under any similar law or regulation by the European Medicines Evaluation Agency or any other national or regulatory authority or agency. If Surgical becomes aware that Surgical is or becomes the subject of any debarment or similar proceedings in any jurisdiction, then Surgical shall promptly notify Imprimis. Page 3 of 11 + + + + + + 9. Compliance with Laws and Quality Standards. As further outlined in the SOW, Surgical and its employees shall conduct all activities under this Agreement or relating to the Product in accordance with all applicable laws and regulations and all quality standards, protocols and systems established by Imprimis from time to time therefor. 10. Tax Indemnity. Surgical agrees to indemnify and hold harmless Imprimis from any and all claims or demands under the Internal Revenue Code of 1986, as amended, or any state or local tax law or ordinance in respect of any failure of Imprimis to withhold income tax, FICA or any other tax from the Sales Commissions paid to Surgical, including any interest or penalties relating thereto and any costs or expenses incurred in defending such claims. 11. Indemnification and Insurance. 11.1. Each party shall indemnify and hold harmless the other party, and its directors, officers, employees and agents, from and against all losses, liabilities, damages and expenses, including reasonable attorneys' fees and costs (collectively, "Liabilities"), resulting from any claims, demands, actions or other proceedings by any third party to the extent resulting from the breach of any representation, warranty or covenant by the breaching party under this Agreement. 11.2. Insurance. Each party shall maintain insurance, including comprehensive or commercial general liability and products liability insurance (contractual liability included), with respect to its activities under this Agreement in such amounts and with such limits as reasonable and customary in the industry, but with limits not less than the following: (a) each occurrence, one million dollars ($1,000,000); (b) products/completed operations aggregate, five million dollars ($5,000,000); (c) personal and advertising injury, one million dollars ($1,000,000); and (d) general aggregate (commercial form only), five million dollars ($5,000,000). Each Party shall maintain such insurance for so long as it continues its activities under this Agreement, and thereafter for so long as it customarily maintains insurance for itself covering similar activities. 12. Assignment. Surgical shall not assign this Agreement or any of its rights or privileges without the prior written consent of Imprimis, which consent Imprimis may grant or withhold in its sole discretion. Imprimis may assign this Agreement to any party that agrees to assume this Agreement and all of Imprimis' duties and obligations thereunder. 13. Waiver. No waiver of this Agreement or any of its provisions shall be binding upon a party unless in writing and signed by each party. The waiver by either party of a breach or violation of any provision of this Agreement shall not constitute or be construed as a waiver of any subsequent breach or violation of that provision or as a waiver of any breach or violation of any other provision. 14. Severability. If any provision of this Agreement is held by a court of competent jurisdiction to be invalid, illegal or unenforceable, the remaining provisions of this Agreement shall be unimpaired, and the invalid, illegal or unenforceable provision shall be replaced by a mutually acceptable provision, which, being valid, legal and enforceable, comes closest to the intention of the parties underlying the invalid, illegal or unenforceable provision. Page 4 of 11 + + + + + + 15. Survival. The provisions of Sections 2, 5, 6, 9-20 and any other obligation under this Agreement which is to survive or be performed after termination of this Agreement, regardless of the cause therefor, shall survive any termination or expiration of this Agreement. 16. Notices. Any notice or other communication required or permitted to be made or given under this Agreement to either party shall be in writing and shall be sufficiently given if (i) hand delivered, (ii) sent by overnight guaranteed delivery service, such as Federal Express or UPS; or (iii) sent by facsimile transmission or electronic mail during addressee's normal business hours, with a duplicate copy sent by overnight delivery or certified or registered mail (except for any notice of termination which must be sent by method (i) or (ii)), addressed as follows: If to Surgical: SightLife Surgical, Inc. 1200 6t h Ave., Ste. 300 Seattle, WA 98101 Attn: Monty Montoya, CEO E-mail: monty.montoya@sightlife.org If to Imprimis: Imprimis Pharmaceuticals, Inc. 12264 El Camino Real, Suite 350 San Diego, CA 92130 Attn: Mark L. Baum, CEO Email: mark@imprimispharma.com or to such other address or addressee as either party may from time to time designate to the other by written notice. Any such notice or other communication shall be deemed to be given as of the date it is received by the addressee. 17. Publicity. Neither party nor its Affiliates shall make any public announcements concerning matters regarding this Agreement or the negotiation thereof without the prior written consent of the other party unless such disclosure is required by law, in which case the announcing party shall provide the other party with reasonable notice of such disclosure sufficient to make written comments concerning such disclosure. For the avoidance of doubt, mutually agreed upon marketing plans shall be deemed to have received the requisite consent pursuant to the preceding sentence. 18. Advice of Counsel. Each party acknowledges that, in executing this Agreement, such party has had the opportunity to seek the advice of independent legal counsel, and has read and understood all of the terms and provisions of this Agreement. This Agreement shall not be construed against any party by reason of the drafting or preparation hereof. 19. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California, excluding the choice of law rules, and the parties hereby agree to submit to the jurisdiction and venue of the State and Federal courts of the State of California, and agree that the State and Federal courts of the State of California shall be the exclusive forum for the resolution of all disputes related to or arising out of this Agreement. Page 5 of 11 + + + + + + 20. Entire Agreement; Amendments; Counterparts. This Agreement, including Appendix A, and the Confidentiality Agreement represents the entire agreement between the parties in relation to the subject matter contained herein and supersedes all previous other agreements and representations, whether oral or written. This Agreement may be modified only if such modification is in writing and signed by a duly authorized representative of each party. This Agreement may be executed in separate counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. *****SIGNATURE PAGE FOLLOWS*** Page 6 of 11 + + + + + + SIGNATURE PAGE IN WITNESS WHEREOF, the parties hereto have caused this Strategic Sales & Marketing Agreement to be duly executed in duplicate original on the dates set forth below. IMPRIMIS PHARMACEUTICALS, INC. SIGHTLIFE SURGICAL, INC. /s/ Mark L. Baum /s/ Monty Montya By: Mark L. Baum By: Monty Montoya Its: Chief Executive Officer Its: Its: President & Chief Executive Officer Date: 4/26/2017 Date: 4/28/2017 Page 7 of 11 + + + + + + APPENDIX A Statement of Work under Strategic Sales & Marketing Agreement by and between SightLife Surgical, Inc. and Imprimis Pharmaceuticals, Inc. Services: Surgical will provide "Services" for Imprimis and its subsidiaries which shall include: 1. In coordination with Imprimis, calling on potential clients including, but not limited to, doctors, practitioners, practice groups, surgical centers, hospitals and other prescribers (collectively "Clients") and assisting in the promotion, marketing and generation of inbound sales and prescription orders for the Product in the Territory. 2. Opening new Client accounts, servicing existing Client accounts, promoting products, facilitating sales orders and handling customer services for Clients in the Territory, including interfacing with the Imprimis customer service team and the Imprimis commercial sales team on a regular basis. 3. Providing a dedicated sales staff of four (4) Surgical employees (the "Sales Team") in the provision of the Services. The Sales Team shall have specific and sufficient related ophthalmic experience and relationships with potential purchasers of the Product to adequately provide the Services. Product "Product" shall mean Imprimis' autologous serum tears formulation. Territory "Territory" shall mean the United States of America. Exclusivity: Surgical shall not promote, market or sell any products for any third party during the Term, which directly or indirectly compete with the Product. Imprimis Support, Training & Marketing: Imprimis has provided marketing materials and product information to Surgical and the Sales Team which they have deemed adequate in order to allow them to understand the Product and perform the Services. Surgical's Chief Executive Officer and Imprimis' Chief Commercial Officer shall initially meet, and continue to meet on a regular basis, to transition, train and manage the Sales Team in order to allow them to integrate into the existing Imprimis commercial sales and marketing plan and adequately perform the Services during the Term. Page 8 of 11 + + + + + + The Sales Team shall use only such marketing and other materials for the Product in the Territory as are expressly approved in writing in advance by Imprimis, are consistent in all respects with the external marketing of such Product by Imprimis, include all warnings and instructions applicable for the proper use of the Product, comply with all applicable laws and regulations in the Territory, and do not contain any claims regarding a Product or its performance that the Sales Team does not reasonably demonstrate are supported by such Product or its performance. The Sales Team has adequate experience and is knowledgeable in applicable state and federal laws and FDA regulations related to the sales and marketing of the Product in the Territory, including, but not limited to: Stark Law; Anti-Kickback Statute; Food, Drug and Cosmetic Act (Sections 503A and 503B); and Drug Quality and Security Act. The Sales Team shall have the right to use copies of marketing materials provided by Imprimis to the Sales Team hereunder to the extent reasonably necessary to perform its obligations under this Agreement and subject to the terms and conditions of this Agreement. If Imprimis reasonably believes that any marketing materials or strategies used by the Sales Team for the Product in the Territory fail to fully comply with the terms and conditions of this Agreement or any applicable law, Imprimis shall give written notice thereof and the Sales Team immediately shall cease to use such non-compliant materials. The Sales Team shall not make any warranty or claim, express or implied, relating to any Product other than those contained in any marketing materials provided by Imprimis to the Sales Team or otherwise expressly authorized in writing by Imprimis. Compensation: 1. Sales Commissions. During the Term of the Agreement and subject to the terms and conditions of the Agreement, Imprimis shall pay to Surgical Sales Commissions equal to ten percent (10%) of the Net Sales for Product. "Net Sales" shall mean the gross sales price of such Product in the Territory invoiced by Imprimis and its affiliates to customers who are not affiliates less: (a) credits, allowances, discounts and rebates to, and chargebacks from the account of, such customers; (b) freight and insurance costs in transporting such Product; (c) cash, quantity and trade discounts, rebates and other price reductions for such Product; (d) sales, use, value-added and other direct taxes; and (e) an allowance for uncollectible or bad debts determined in accordance with accounting principles generally accepted in the United States of America ("GAAP"). 2. Milestone Payments; Stock Issuances. a. Initial Milestone Payment. An initial milestone payment of five thousand (5,000) shares of Imprimis' restricted common stock, par value $0.001 ("Common Stock") shall become due and issuable to Surgical if Net Sales for Product reaches $2,000,000 prior to December 31, 2017. b. Periodic Milestone Payments. In addition to the initial milestone payment as outlined in Section 2(a) above, Imprimis may make four (4) additional milestone payments to Surgical during the Term as follows: Page 9 of 11 + + + + + + i. seven thousand five hundred (7,500) shares of Common Stock if Net Sales for Product reaches $2,500,000; ii. seven thousand five hundred (7,500) shares of Common Stock if Net Sales for Product reaches $5,000,000; iii. seven thousand five hundred (7,500) shares of Common Stock if Net Sales for Product reaches $7,500,000; and iv. seven thousand five hundred (7,500) shares of Common Stock if Net Sales for Product reaches $10,000,000. c. Insider Trading Policy. If any shares of Common Stock are issued to Surgical, Surgical (or any related holder of Common Stock) shall be required to execute and follow Imprimis' standard form insider trading policy. Term & Termination: 1. Term. The Agreement shall commence on the Effective Date and, unless terminated earlier pursuant to this Agreement or extended by mutual agreement between the parties, shall continue in effect for thirty six (36) months following the Effective Date (the "Term"). 2. Termination. Either party shall have the right to terminate this Agreement at any time for any reason. Expiration or termination of this Agreement shall not limit any obligations of a party that were incurred prior to such expiration or termination. Page 10 of 11 + + + + + + EXHIBIT A Confidentiality Agreement Page 11 of 11 \ No newline at end of file diff --git a/full_contract_txt/SimplicityEsportsGamingCompany_20181130_8-K_EX-10.1_11444071_EX-10.1_Franchise Agreement.txt b/full_contract_txt/SimplicityEsportsGamingCompany_20181130_8-K_EX-10.1_11444071_EX-10.1_Franchise Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..2b2b9d76e12708186a519a6c7924363541fd38e3 --- /dev/null +++ b/full_contract_txt/SimplicityEsportsGamingCompany_20181130_8-K_EX-10.1_11444071_EX-10.1_Franchise Agreement.txt @@ -0,0 +1,67 @@ +Exhibit 10.1 MASTER FRANCHISE AGREEMENT This Master Franchise Agreement ("Agreement") is made and entered into on the 20t h day of November, 2018 (the "Effective Date") at Mumbai, by and between Smaaash Entertainment Private Limited, an Indian company, with its address at Trade View, Level 2, Kamala Mills, Lower Parel, Mumbai 400013, India ("Franchisor") and I-AM Capital Acquisition Company, a company incorporated in the United States of America, with an address at 1345 Avenue of the Americas, 11th floor, New York, 10105 ("Franchisee"). RECITALS A. WHEREAS, Franchisor operates entertainment centers and gaming arcades throughout India as well as at the Mall of the Americas in Minneapolis Minnesota where Franchisor, through its virtual reality and sports simulation technology and proprietary gamification technologies provides sport and recreational activities/services; and B. WHEREAS, Franchisee is [•] (add the business of the Franchisee); and C. WHEREAS, Franchisor desires to appoint Franchisee, and Franchisee desires to be so appointed, to act as Franchisor's exclusive Franchisee in the territories of North America and South America ("Territory") in the manner set out in this Agreement, for setting up, managing and operating entertainment centres and gaming arcades involving virtual reality, sports simulation technology and proprietary gamification technologies to provide sport and recreational activities/services to the public ("Smaaash Centres"), upon the terms and subject to the conditions hereinafter provided. NOW, THEREFORE, the parties agree as follows: 1. Grant of Franchise 1.1 Rights granted to the Franchisee. Subject to Section 1.2, Franchisor hereby grants to Franchisee the exclusive right, (a) to establish and operate Smaaash Centres in the Territory, (b) to sub-license the right to establish and operate Smaaash Centres to third party franchisees in and for the Territory, (c) a license to use the products and other services developed by Franchisor with respect to the Smaaash Centres (including a right to authorise the use of products and services developed by the Franchisor by third party franchisees), in the Territory, and (d) to identify third party franchisees for the Smaaash Centres in the Territory. The rights granted herein include the limited license to use the Trademarks of the Franchisor (the details of which are morefully set out in Exhibit A), as set out in Section 3 of this Agreement, for the purposes of establishing and operating the Smaaash Centres in the Territory. It is clarified that if third party franchisees shall be establishing and operating Smaaash Centres in the manner contemplated under this Agreement, then the Franchisee shall ensure that such third party franchisees complies with all the obligations and duties of the Franchisee, as recorded under this Agreement, and to this extent, Franchisee may enter into relevant agreements with such third party franchisees. 1.2 Notwithstanding the right granted to the Franchisee in Section 1.1, the Franchisor and its affiliates shall retain the right on the terms and conditions that the Franchisor may deem fit and without granting any rights therein to the Franchisee, (i) to own, acquire, establish and / or operate, and to a grant a license to third parties to establish and operate Smaaash Centres at any location outside the Territory, and (ii) to own, acquire, establish and / or operate, and to grant a license to third parties to establish and operate, gaming and entertainment centres under other proprietary marks or other systems, whether such centres are the same, similar or different from the Smaaash Centres, at any location within or outside the Territory. 1.3 This arrangement has been entered into by the parties on an arms'length basis. All commercials between the parties in relation to the transactions contemplated under this Agreement, if not specifically provided in this Agreement, shall be agreed mutually between the parties. 1.4 Additional Considerations (a) Pricing. Franchisor and Franchisee shall agree upon and decide the locations at which the Smaaash Centres shall be set up within the Territory. The Franchisee shall not be entitled to set up any new Smaaash Centres without consulting with, and obtaining the prior written consent of Smaaash. (b) The prices of the products and services offered in each of the Smaaash Centres shall be decided mutually among the parties. Any revision to the agreed fees, including any discounts or prizes or other promotional measures shall require the prior written consent from Franchisor. + +Source: SIMPLICITY ESPORTS & GAMING CO, 8-K, 11/30/2018 + + + + + +(c) Franchisee or the third party franchisee, as the case may be, shall be entitled to receive the revenue generated from each of the Smaaash Centres. If third party franchisees are operating the Smaaash Centres, then the Franchisee shall be entitled to receive, (i) 5% (five percent) of the capital expenditure as agreed among the parties for the particular Smaaash Centre as sign -on fees or upfront advance, and (ii) 5% (five percent) fee or commission of the revenue generated by such third party franchisees from the Smaash Centres on an annual basis. 1.5 Operation of Smaaash Centres. Franchisee or third party sub -franchisees shall be under an obligation to set up at least 6 (six) Smaaash Centres during the first Contract Year or any other time period as may be provided by Franchisor. The Smaaash Centres shall be established and operated in the Territory using the assumed trade name 'Smaaash'or any other trade name that the Franchisor may designate. Franchisee shall maintain good customer relations in accordance with prudent and reasonable business practices. Franchisee shall perform its obligations hereunder without using subcontractors, sub-distributors, independent sales representatives, agents, Franchisee's affiliates or other non-employees ("Third Parties") to perform the obligations of Franchisee under this Agreement except to the contrary specifically stated in this Agreement or unless they have been approved, in writing, in advance, by Franchisor, such approval not to be unreasonably withheld. 2. Term The term of this Agreement shall commence as of the Effective Date and shall continue until terminated as hereinafter provided (the "Term"). Each calendar year during the Term is sometimes hereinafter referred to as a "Contract Year." 3. Grant of License in the Trademarks 3.1 License. Subject to the terms of this Agreement (including all obligations to first obtain Franchisor's written approval), Franchisor hereby grants to Franchisee the right to use the Trademarks (the details of which are set out in Exhibit A to this Agreement) (including sub-licensing this right to third party franchisees with the approval of Franchisor), on a royalty-free basis, for the purpose of operating and promoting the Smaaash Centres in the Territory. Franchisee is, in particular entitled to: (a) offer, market and/or distribute any products and services in connection with the Smaaash Centres under the Trademarks; and + +Source: SIMPLICITY ESPORTS & GAMING CO, 8-K, 11/30/2018 + + + + + +b) use the Trademarks on business stationery and/or in advertising in connection with the advertising, promotion and distribution of Smaaash Centres in the Territory. 3.2 Exclusivity of License. Except as provided in the next sentence, the license granted herein shall be exclusive. "Exclusivity" shall mean that Franchisor shall not grant any further licenses to third parties in the Trademarks for use in connection with Smaaash Centres in the Territory, and the Franchisee shall not enter into any arrangement or agreement with any third parties for establishing or operating any gaming and entertainment centres identical or similar to Smaaash Centres, in the Territory except as otherwise provided in this Agreement; provided, however, that Franchisor may continue to use the Trademarks in the Territory in connection with the operation of Franchisor's entertainment centers already set up as of the Effective Date in the Territory. The restriction contained in this Agreement shall apply on the parties throughout the Term. 3.3 Form of Use. Unless otherwise provided herein or agreed by the parties in writing, Franchisee shall use the Trademarks that are registered in the Territory in their registered form. 4. Compliance with Law Franchisee shall ensure that the Smaaash Centres shall be set up, established, operated, managed, advertised, marketed, promoted, publicized and otherwise exploited, in accordance with all applicable laws and regulations in the Territory, including without limitation, all customs requirements and country of origin regulations. 5. Marketing and Promotional Activities 5.1 Best Efforts. (a) Franchisee shall exercise its best efforts to effectively market, promote, and publicise the Smaaash Centres throughout the Territory. Franchisee shall also be obligated to identify suitable locations to set up the Smaaash Centres. Franchisee shall comply with, and ensure that the third party sub-franchisees comply with the standards prescribed by Franchisor (as provided in the operating manuals which shall be shared by Franchisor with Franchisee) with respect to the services, products and operations of the Smaaash Centres and shall operate the Smaaash Centres in strict conformity with such standards and specifications as Franchisor may from time to time prescribe to Franchisee. Franchisee shall refrain from deviating from such standards and specifications without Franchisor's prior written consent and from otherwise operating in any manner which reflects adversely on the Trademarks and Smaaash Centres. (b) Unless otherwise agreed by Franchisor in writing, throughout the Term, Franchisee shall maintain, and shall ensure that the third party sub -franchisees maintain an organizational structure or local management reasonably necessary to adequately support the advertising, marketing and promotion of the Smaaash Centres and the services and products offered by Smaaash Centres throughout the Territory. The third party sub -franchisees shall also be responsible for all employee related compliances as per the relevant applicable laws. Towards this purpose, Franchisee shall appoint a qualified chief operating officer, in consultation with Franchisor, to undertake and manage the obligations of Franchisee as set out in this Agreement. Franchisor shall also be entitled to designate and appoint personnel from its managerial team to assist and train the personnel and staff of the Franchisee or any other third party sub - franchisee in setting up the Smaaash Centres, and further provide technical and design knowledge to the third party sub - franchisees. 5.2 Promotional Material and Products. Franchisee shall submit to Franchisor, for Franchisor's prior written approval, samples of all advertising and promotional materials that Franchisee desires to use to promote Smaaash Centres, including without limitation, print and online advertising designs, trade show display materials, press releases and interviews for publication in any media ("Promotional Material"). Franchisee shall modify any disapproved Promotional Material to satisfy Franchisor's reasonable objections so that it is acceptable to Franchisor. Franchisor shall provide Franchisee with the creative elements of any Promotional Materials that Franchisor creates or acquires for use in connection with the advertising and sale of Products outside the Territory. 6. Intellectual Property 6.1 Ownership. (a) Franchisor is the sole owner of any and all intellectual property rights relating to the Smaaash Centres and their products and services existing as of the Effective Date, including, but not limited to, the Trademarks and all the goodwill relating thereto (the "Franchisor Property"). Franchisee, or any third party franchisee, by reason of this Agreement, has not and shall not acquire any right, title, interest or claim of ownership in any of the Franchisor Property in the Territory or elsewhere, except to the extent provided under the license granted under Sections 1 and 3 of this Agreement. + +Source: SIMPLICITY ESPORTS & GAMING CO, 8-K, 11/30/2018 + + + + + +(b) Franchisee acknowledges that, (i) Franchisor is the sole and exclusive owner of all right, title and interest in any Franchisor Property; (ii) nothing contained in this Agreement shall give to Franchisee any right, title or interest in any Franchisor Property; and (iii) Franchisee's use of the Franchisor Property, and any associated goodwill, shall inure only to the benefit of Franchisor and shall be deemed to be solely the property of Franchisor should this Agreement be terminated for any reason. 6.2 Registration and Cooperation. Franchisee shall not, directly or indirectly, seek or obtain any new registration for Franchisor Property (including without limitation, any colorable imitations, translations, or transliterations thereof), anywhere in the world without Franchisor's prior written consent. If Franchisee has obtained or obtains in the future, in any country, any right, title or interest in any Franchisor Property notwithstanding the previous sentence (including any colorable imitations, translations, or transliterations thereof), Franchisee will be deemed to have so acted as an agent and for the benefit of Franchisor for the limited purpose of obtaining such registrations and assigning them to Franchisor. Franchisee shall execute, for no additional consideration, any and all documents deemed necessary by Franchisor or its attorneys to be necessary to transfer such right, title or interest to Franchisor. 6.3 No Challenges. Franchisee shall not do anything or suffer anything to be done which may adversely affect any rights of Franchisor in and to any Franchisor Property, or any registrations thereof or which, directly or indirectly, may reduce or dilute the value or distinctiveness of such Franchisor Property, in particular the Trademarks, or disparage or detract from Franchisor's reputation. Franchisee shall not challenge, directly or indirectly, Franchisor's interest in, or the validity of, any Franchisor Property, or any application for registration or trademark registration thereof or any rights of Franchisor therein. The provisions of this Section 6.3 shall survive the termination of this Agreement. 7. Third Party Infringements; Attacks on Use of the Trademarks; Cooperation 7.1 Third Party Infringements. (a) Mutual Information. Each of the parties shall inform the other without undue delay when such party becomes aware of any infringements of any of the Franchisor Property in the Territory. (b) Initiation of Action. Any actions against infringers of any of the Franchisor Property, whether or not such actions involve litigation (including any actions taken to oppose a third party application to register an infringing trademark or a cancellation action against a third party's infringing trademark registration), shall be exclusively reserved to Franchisor, unless otherwise agreed by Franchisor in writing. Notwithstanding the foregoing, Franchisor shall be under no obligation to initiate any such action. If requested by Franchisor, Franchisee shall support Franchisor, at Franchisor's expense, in any such proceedings and, if requested by Franchisor, Franchisee shall promptly provide Franchisor with any relevant documentation in Franchisee's possession. 7.2 Attacks on the Use of the Franchisor Property. Each of the parties shall inform the other if it becomes aware of a claim by a third party that the use of any of any of the Franchisor Property infringes on the rights of such third party. If requested by Franchisor, Franchisee shall support Franchisor, at Franchisor's expense, in connection with Franchisor's defense against any such third party claims. Unless otherwise agreed by Franchisor in writing, Franchisor shall take the lead in any defense against a third party action, whether brought against Franchisor and/or Franchisee. The decision whether or not a defense is appropriate shall be in Franchisor's sole discretion. Franchisee shall not settle any third party claims against it regarding its use of any of the Franchisor Property without the prior written consent of Franchisor. 7.3 Indemnity. The Franchisee shall indemnify and hold the Franchisor, its affiliates and their respective agents and employees harmless from all claims, actions, suits, damages, costs and expenses in relation to or arising out of the breach of any representations, warranties, covenants and obligations of the Franchisee as set out in this Agreement. The indemnification rights of the Franchisor shall be without prejudice to, and independent of any other rights and remedies that the Franchisor may have at law or in equity, including the right to seek specific performance, injunctive relief or restitution, none of which rights or remedies shall be affected or diminished thereby. The provisions of this Section 7.3 shall survive the termination of this Agreement. 8. Termination 8.1 Termination by Mutual Agreement. This Agreement may be terminated at any time upon the mutual written agreement of the parties. + +Source: SIMPLICITY ESPORTS & GAMING CO, 8-K, 11/30/2018 + + + + + +8.2 Termination by Franchisor with Notice. Franchisor may terminate this Agreement upon thirty (30) days written notice to Franchisee upon the occurrence of any of the following: (a) Franchisee fails to make any payment required under or in connection with this Agreement; (b) Franchisee ceases to operate or otherwise abandon the Smaaash Centres without the consent of Franchisor, or otherwise forfeit the right to do or transact business in the Territory; (c) Franchisee fails to use its best efforts to market and promote Smaaash Centres and the services and products offered by Smaaash Centres within the Territory and such failure is not cured within thirty (30) days of Franchisor's notification to Franchisee of such failure. 8.3 Termination for Cause. This Agreement may be terminated by either party for "Cause" without the need of providing a notice period prior to such termination becoming effective. "Cause" shall exist if circumstances occur which, taking into consideration the substance and purpose of this Agreement, would make it unreasonable for one or both of the parties to continue the contractual relationship and the other party fails to cure the cause (assuming that such cause is susceptible to cure) within thirty (30) days after the date of receipt of a corresponding written notice ("Remedy Notice"). If such cause by its nature is not curable, then no such Remedy Notice is required. Without limiting the generality of the foregoing, a party may terminate this Agreement for "Cause"if: (a) the other party to this Agreement is in breach of one or more of its material obligations; or (b) the other party to this Agreement becomes insolvent, generally cannot pay its obligations when due or otherwise suffers a substantial deterioration of its financial situation, or if insolvency/bankruptcy proceedings are initiated against such party or such party initiates any dissolution or liquidation of its business and/or assets. 8.4 Effects of Termination. (a) Upon the termination of this Agreement, any indebtedness of Franchisee to Franchisor shall become immediately due and payable. Franchisee shall immediately cease to operate the Smaaash Centres and shall not thereafter, directly or indirectly, represent to the public or hold itself out as a franchisee of Franchisor. Franchisor shall have the right to suspend the performance of any of their obligations under this Agreement. Franchisor shall have the right to provide the rights and license granted herein to Franchisee to any other third party entity that Franchisor may deem fit. (b) All benefits which may accrue by reason of the activities of Franchisee hereunder shall be deemed transferred automatically to Franchisor, and all licenses and other rights granted to Franchisee hereunder shall immediately cease. Unless otherwise agreed by Franchisor in writing, Franchisee shall immediately discontinue the advertising and marketing of Smaaash Centres and the products and services offered by Smaaash Centres. (c) Each of the parties shall continue to maintain in confidence any and all confidential information received from the other party. At Franchisor's election, Franchisor may purchase from Franchisee any materials used by Franchisee for the advertising, marketing, promotion, publicizing or other exploitation of Smaaash Centres and the products and services offered by the Smaaash Centres, including all Promotional Materials, Franchisor Property, or any other materials which contain any of the Trademarks. (d) The termination of this Agreement for any reason shall not affect obligations accrued prior to the effective date of such termination of this Agreement or any obligations which, either expressly or from the context of this Agreement, are intended to survive the termination of this Agreement. 9. Notices and Other Communications All reports, approvals, requests, demands, notices and other communications (collectively "Communications") required or permitted by this Agreement shall be in writing and signed by a duly authorized officer of or such other individual designated in writing by a party. Communications will be duly given if delivered personally, if mailed (by registered mail, return receipt requested) or if delivered by nationally-recognized courier or mail service which requires the addressee to acknowledge, in writing, the receipt thereof, to the party concerned at the following addresses (or at any other address as a party may specify by notice in writing to the other): If to Franchisor: Smaaash Entertainment Private Limited Trade View, Level 2 Kamala Mills Lower Parel, Mumbai 400013, India Attention: Mr. Vishwanath Kotian If to Franchisee: 1345 Avenue of the Americas, 11th floor New York, NY 101015, USA Attention: Mr. Suhel Kanuga + +Source: SIMPLICITY ESPORTS & GAMING CO, 8-K, 11/30/2018 + + + + + +10. Miscellaneous 10.1 Entire Agreement. This Agreement contains the entire understanding and agreement between the parties with respect to its subject matter, supersedes all prior oral or written understandings and agreements relating thereto and may not be modified, discharged or terminated, nor may any of the provisions hereof be waived, orally. 10.2 Right to inspect and request information. During the Term, Franchisor shall have the right to conduct audits of Franchisee with respect to the Smaaash Centres, and inspect the Smaaash Centres, after providing a written notice of 5 (five) days. Franchisee shall be under an obligation to provide any information as may be requested by Franchisor with respect to the Smaaash Centres, including the books of accounts and other relevant documents or records maintained in relation to the Smaaash Centres. 10.3 Insurance. During the Term, Franchisee shall maintain policies of insurance as may be requested by Franchisor, subject to applicable law, in relation to the Smaaash Centres. 10.4 Representations and warranties. Each of the parties represents and warrants to the other party that, (i) the Agreement constitutes a valid, legal and binding obligation of such party and is enforceable against such party in accordance with its terms, (ii) it has the power and authority to execute the Agreement and perform all its terms, and (iii) the execution and performance of this Agreement shall not violate any charter documents of such party, contravene any provisions of law as applicable to such party (including any order, decree, injunction of any competent court) or conflict with the provisions of any material agreement or contract executed by such party. The provisions of this Section 10.4 shall survive the termination of this Agreement. 10.5 Governing Law. (a) The parties hereto have expressly agreed that this Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, applicable to contracts executed and fully to be performed therein, to the exclusion of any other applicable body of governing law. (b) Except as hereafter provided, the parties hereby consent to the jurisdiction of the New York State Supreme Court, County of New York or in the United States District Court for the Southern District of New York to resolve any dispute arising under this Agreement. (c) In the event of any litigation or other action arising out of this Agreement, the court shall award to the substantially prevailing party all reasonable costs and expenses including reasonable attorney's fees. 10.6 WAIVER OF JURY. THE PARTIES HEREBY WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED UNDER THIS AGREEMENT, WHETHER NOW OR EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE. THE PARTIES AGREE THAT ANY OF THEM MAY FILE A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARY AND BARGAINED FOR AGREEMENT AMONG THE PARTIES IRREVOCABLY TO WAIVE THE TRIAL BY JURY COURT, AND THAT ANY PROCEEDINGS WHATSOEVER BETWEEN THEM RELATING TO THIS AGREEMENT SHALL INSTEAD BE TRIED IN A COURT OF COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY. 10.7 Force Majeure. The parties will not be liable to each other for any failure or delay in performance, other than failure to make timely payments due under this Agreement, if it is because of earthquake, flood, fire, acts of God, civil unrest, terrorism, acts of any governmental authority or any other reason beyond the reasonable control of either or both of the parties ("Force Majeure"). However, either party may terminate this Agreement by and upon notice to the other if the other is unable to perform any of its material obligations for a period of thirty (30) days by reason of a Force Majeure. 10.8 No Joint Venture. Nothing herein is intended to constitute the parties as partners or as joint venturers, or either as agent of the other, and neither party may obligate or bind the other. 10.9 Headings, Definitions and other particulars. Headings and titles of sections and/or paragraphs are for convenience only. The definitions in this Agreement shall apply equally to both the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The use of "including" in this Agreement shall be construed as illustrative. + +Source: SIMPLICITY ESPORTS & GAMING CO, 8-K, 11/30/2018 + + + + + +10.10 Amendment. This Agreement shall, from the Effective Date, bind the parties to the terms herein and cannot be amended without the consent of the parties. Further, this Agreement cannot be terminated by any party except in accordance with Clause 8 of this Agreement. 10.11 Assignment. The Franchisor shall be entitled to assign, transfer, encumber or dispose of any of its rights and or obligations under this Agreement, including to an affiliate, without the prior written consent of the Franchisee. The Franchisee shall not be entitled to assign, transfer, encumber or dispose of any of its rights and or obligations under this Agreement, including to an affiliate, without the prior written consent of the Franchisor. 10.12 Expenses. The Franchisee shall bear all the costs and expenses in relation to the execution of this Agreement and the consummation of all the transactions hereunder. 10.13 Counterparts. This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument. The delivery of signed counterparts by facsimile transmission or electronic mail in "portable document format" (".pdf") shall be as effective as signing and delivering the document in person. + +Source: SIMPLICITY ESPORTS & GAMING CO, 8-K, 11/30/2018 + + + + + +IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement the day and year first above written. SMAAASH ENTERTAINMENT PRIVATE LIMITED By: /s/ Shripal Morakhia Name: Shripal Morakhia Title: I-AM CAPITAL ACQUISITION COMPANY By: /s/ F. Jacob Cherian Name: F. Jacob Cherian Title: Chief Executive Officer (exhibits follow) + +Source: SIMPLICITY ESPORTS & GAMING CO, 8-K, 11/30/2018 + + + + + +Exhibit A Trademarks Separately annexed + +Source: SIMPLICITY ESPORTS & GAMING CO, 8-K, 11/30/2018 \ No newline at end of file diff --git a/full_contract_txt/SmartRxSystemsInc_20180914_1-A_EX1A-6 MAT CTRCT_11351705_EX1A-6 MAT CTRCT_Distributor Agreement.txt b/full_contract_txt/SmartRxSystemsInc_20180914_1-A_EX1A-6 MAT CTRCT_11351705_EX1A-6 MAT CTRCT_Distributor Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..5229fee56164cd5f4123cb8924a589aac90ebf39 --- /dev/null +++ b/full_contract_txt/SmartRxSystemsInc_20180914_1-A_EX1A-6 MAT CTRCT_11351705_EX1A-6 MAT CTRCT_Distributor Agreement.txt @@ -0,0 +1,175 @@ +Exhibit 6.7 EXCLUSIVE DISTRIBUTOR AGREEMENT This Distributor Agreement ("Agreement") is made and entered into this 17t h day of May, 2017 by and between SMART RX SYSTEMS, INC., a Florida corporation, with its principal place of business at Red Bug Lake Road, Suite 256, Winter Springs, Florida 32708, U.S.A. ("Company") and A3 DEVELOPMENT GROUP, LLC, a Texas limited liability company, with its principal place of business at 17521 Highway 69 South, Suite 120, Tyler, Texas 75703 ("Distributor"). 1. DEFINITIONS: Background IP or "Background Technology" means existing Intellectual Property not generated in the course of the Company's Business and owned by Smart RX Systems, Inc. Business means the Business to be conducted by the parties as described in Section 2 of this Agreement. Code means the Internal Revenue Code of 1986, as amended. All references herein to sections of the Code shall include any corresponding provision or provisions of succeeding law. Company Marks shall mean those trademarks, service marks, logos and trade names specified in Exhibit A used by Company in its commercial activities related to the Products. Confidential Information means all proprietary information of Company or a third party disclosed on or after the date hereof by Company to Distributor in any form (written, oral, photographic, electronic, magnetic, or otherwise) which is designated as confidential or proprietary, including, without limitation: technical data; methods; computer programs and related materials; product specifications; documentation; processes; inventions; products under development; sales; marketing; business and financial information; pro formas and projections; customer lists; internal memoranda; and correspondence. Customers shall have the meaning as set forth in Section 2.5. Intellectual Property means any Invention, Patent, trade secret, technical know-how, trademark, or work for which copyright protection is available under Title 17 of the United States Code. Invention means an invention patentable under Title 35 of the United States Code, or any patent on such an invention. Kiosk Location means each Pharmacy where the Pharmacy Kiosk is installed and operational. Medications means the inventory contained within each Kiosk Location. + +EXCLUSIVE DISTRIBUTOR AGREEMENT Page 1 of 18 + +Source: SMART RX SYSTEMS INC, 1-A, 9/14/2018 + + + + + +Operations Expense means all operating costs incurred in the operations of the Pharmacy (Wages, Taxes, and benefits of Pharmacist and or Pharmacy Tech, Liability Insurance of $100/month, miscellaneous expenses not exceeding $250/month, Fax, Phone, Internet, cost of supplies (Paper, cartridges, vials, vial caps, envelopes, prescription labels). The supplies costs are a flat fee of $0.75 per prescription filled). Operating costs exclude the cost of space and utilities. Patents mean all patents and applications relating to the Kiosk or resulting from any Inventions relating to the Smart Pharm Assist Kiosk™. Person means a natural person, corporation, limited liability company (LLC), Series LLC, partnership, succession, trust, estate, association or other form of legal entity. Physician(s) means any physician, physician group practice, or other health care provider identified by Distributor in writing to the Company as a potential user of the Smart Pharm Assist Kiosk™ in the Territory. Products shall mean the Company's Smart Pharm Assist Kiosk™ and associated documentation, inventions, software, application and processes. Regulations means any regulations adopted under the Code. Territory shall mean Exclusivity for the state of Texas, USA, and Exclusive Distribution opportunities in all other states (with either the Company or Distributor), except the state of Florida. 2. APPOINTMENT AND ACCEPTANCE: 2.1 Exclusive Appointment. Company hereby appoints Distributor as Company's exclusive Distributor for the State of Texas, and Distributor accepts the appointment and agrees to represent the Products within the Territory. Company agrees that no other Distributor will be appointed in any other state as a Distributor unless it is either the Company or Distributor, save and except for the state of Florida. 2.2 Marketing. Distributor agrees to use commercially reasonable efforts to market Company's Products in the Territory. Distributor agrees to include Company's trademarks, and the phrase "Authorized Company Distributor," on all literature, marketing collateral, stationery and business correspondence in which the Products or related services are mentioned. 2.3 Direct Marketing. Company reserves the right to directly market and license Company products to customers within the state of Florida. 2.4 Promotion. Each party to this contract shall act in good faith towards the other in order to promote the business and meet the milestone targets and other goals of the Business Plan. + +EXCLUSIVE DISTRIBUTOR AGREEMENT Page 2 of 18 + +Source: SMART RX SYSTEMS INC, 1-A, 9/14/2018 + + + + + +2.5 Distributor Responsibilities. The primary responsibilities of the Distributor shall be as follows: (i) Marketing the Smart Pharm Assist Kiosk™ to Physicians, Physician group practices, Urgent Care Center, Freestanding Emergency Rooms, other retail convenience stores, other medical facilities, retailers (such as grocery stores (Brookshires), variety stores, (i.e., Family Dollar), medical office building owners, and other similar business in the Territory (collectively, "Customers"); and Smart Rx Reserves the right to market directly to Retailers nationally. (ii) Entering into pharmacy management services agreements ("PMAs") with Customers in the Territory (similar in form as set forth on Exhibit B); (iii) Arranging to have Smart Pharm Assist Kiosk™ supplied to Customers in the Territory under various contractual arrangements with Customers, including lease agreements, joint ventures, license agreements, jointly owned entities or other such ventures, between Customers in the Territory (and may also include contractual relationships with the manufacturer of Smart Pharm Assist Kiosk™ and the Distributor); (iv) Except as otherwise provided by the applicable law, the debts, obligations and liabilities of both the Distributor and the Company, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the party incurring such and neither Distributor, nor Company shall be obligated for any such debt, obligation or liability of the other party; (v) devotion of such time, energy, and skill on a regular and consistent basis as is necessary to distribute, promote the sale of, and sell the Products through all channels of distribution in the Territory in conformity with the Company's established marketing policies and programs; (vi) accurate representation and statement of Company policies to all potential and present customers; (vii) disclosure of any problems concerning Customers to the Company; (viii) Distributor has the sole right to bring in additional dealers under this Agreement. All new dealers will be compensated by A3 Development Group, LLC. 3. SERVICES PROVIDED BY COMPANY: 3.1 Purchasing of medications, vials, labels and other items for Customers in the Territory needed to supply prescription and over the counter (OTC) medications to be dispensed via the Smart Pharm Assist Kiosk™. 3.2 Management and training services to be rendered to all employees of the Pharmacy. + +EXCLUSIVE DISTRIBUTOR AGREEMENT Page 3 of 18 + +Source: SMART RX SYSTEMS INC, 1-A, 9/14/2018 + + + + + +3.3 Coordinate installation, training, support, and maintenance of the Smart Pharm Assist Kiosk™. 3.4 Locating and hiring services of one or more pharmacists to support medication dispensing via the Smart Pharm Assist Kiosk™ at locations of the Customers in the Territory who contract with Smart RX Systems, Inc. 3.5 All related operating support. 3.6 All inventory and purchasing management, and all accounting and financial activities including the preparation of Profit & Loss Statements for each Kiosk Location on a monthly basis. 3.7 Profits from the operation of the Business shall be calculated according to the methodology set forth in Section 4.1 or as otherwise mutually agreed upon in writing by the parties. 3.8 INTENTIONALLY LEFT BLANK. 3.9 Sales and Marketing Plans. From time-to-time, but in no event less frequently than annually, Company and Distributor will negotiate in good faith mutually acceptable sales and marketing plans ("Plans") for Distributor for each twelve-month period corresponding to the Distributor's fiscal quarter, which Plans may include revenue targets and other specific performance obligations of Distributor. The initial Plan will be established by the parties written ninety (90) days following the effective date of this Agreement and incorporated by reference into this Agreement as a new Exhibit C to this Agreement. This Plan shall be reviewed by the parties each year. 3.10 The Company agrees that it shall: (i) comply with the laws and regulations that govern its business; (ii) carry reasonable amounts of insurance, whether through self-insurance or otherwise, to cover its responsibilities with respect to indemnification under Section 9 below. The Distributor shall have the right to examine the Company's insurance policies on request; (iii) provide reasonable assistance in answering any questions the Distributor may have about the Products; (iv) provide the Distributor with merchandising assistance from time to time in the form of advertising programs, promotions, manuals, product and sales training, and sales promotions; + +EXCLUSIVE DISTRIBUTOR AGREEMENT Page 4 of 18 + +Source: SMART RX SYSTEMS INC, 1-A, 9/14/2018 + + + + + +(v) cooperate with the Distributor and its dealers in providing advertising and promotion of the Products through the Territory; 3.11 Product Recalls. If the Company (or any Pharmaceutical Manufacturer) recalls any Products dispensed by the Kiosk, Smart RX Systems, Inc. will immediately contact the Pharmacist at the location to remove the recalled products and contact the customers. 4. PAYMENT: 4.1 Payment. Payment to the Distributor for the sale of the Products to Customers shall be as follows: (i) Company will pay Distributor (or its Assignee) Ten Percent (10%) of the Master Distributor Override generated by each Customer Kiosk Location. (Master Distributor Override ("MDO") shall mean Total Revenue per Customer Kiosk Location collected by SRXS from third party payors and patient cash payments). This 10% of the total revenue generated is payable only if the EBITDA is a positive EBITDA and exceeds the 10% of the revenue. In cases of a positive EBITDA but shortage of funds compared to the 10% of the revenue, Distributor will take less than 10%. If the EBITDA is negative, no payments will be made to Distributor. Additionally, it will be the sole responsibility of Distributor to make a full disclosure of the 10% MDO to all its clients. (ii) The MDO will be payable within ninety (90) days from the date of the transaction (First Month payable by the end of ninety (90) days from the end of the month). (iii) For each Customer Kiosk contracted and implemented by Distributor, Company shall also pay a management fee of 40% of Net Income (Net Income for this purpose is defined as EBITDA less percentage paid to the client. The balance is then split 40%/60% to A3 Development Group, LLC and Smart RX Systems, Inc. respectively). Net Income is defined as total Customer revenue collections less all incurred expenses, and is the distributable cash generated by each Customer location. These payments will also follow the payment policy outlined in 4.1 above. (iv) The Payment(s) to Distributor or its Assignee, as set forth herein, shall be further set forth in each Class A Series Agreement, along with the respective ownership interest for both the Company and the Distributor (or its Assignee) for each respective Kiosk Location which shall have its own separate Series, as defined by the Texas Business Organizations Code for Series Limited Liability Companies, and as set forth in the Company's Operating Agreement. (v) The Payments set forth in Section 4.1(i) and 4.1(iii) above will reflect the following: + +EXCLUSIVE DISTRIBUTOR AGREEMENT Page 5 of 18 + +Source: SMART RX SYSTEMS INC, 1-A, 9/14/2018 + + + + + +The Parties further agree that to the extent a Pharmacy Kiosk is located in a medical facility that is subject to the Stark Law (or similar State Stark Law), that such medical facility may not be able to fulfill any Federal Healthcare Program ("FHP") (Medicare, Medicaid, Tricare) prescription, but rather the Pharmacy Kiosk will bill such FHP prescriptions through a separate billing system. The Parties cannot share such FHP revenues with the Healthcare Facility Investors who are subject to the applicable Stark Laws, but Company and A3 Development Group, LLC shall share in the EBITDA on a 60/40 basis respectfully. 4.2 Method of Payment. Payments shall be made according to such methods as may be designated or agreed to by the Parties from time to time. 4.3 Expenses. Each party shall be responsible for their respective expenses incurred under this Agreement and shall be responsible for all taxes based on its own net income. 4.4 U.S. Currency. All payments under this Agreement shall be made in lawful United States currency. Due to the fact that no retail model has been developed to date, the retail agreement will be a separate agreement. 4.5 Auditable Records. Each Party shall keep true, accurate and consistent records containing regular entries relating to the disposition of the Products, distributed reproduced or maintained in inventory by each respective Party. These records shall be available for examination during normal business hours by accountants representing the other Party, who shall be entitled to perform an audit and to make copies and extracts, and receive any explanations that may reasonably be requested. Each Party is responsible for payment of the accountant's fee, except that the other Party shall be responsible for such fees in the event the examination disclose a discrepancy in a Party's favor of more than five percent (5%) of the payments due under this Agreement. 4.6 Quarterly Reports, Distributor agrees to provide Company, within thirty (30) days after the end of each calendar quarter, with a report depicting sales and sales leads, including volume projections. Distributor shall commence providing Company such reports within thirty (30) days following the end of the calendar quarter in which this Agreement is executed. 5. INTELLECTUAL PROPERTY RIGHTS: 5.1 License. For the term of this Agreement, Company grants Distributor a limited, revocable, non-transferable, non-exclusive license under Company's copyrights to use the Company Products at Distributor's facilities in the Territory solely for marketing and support purposes directly related to the performance of its duties under this Agreement. Except as may be reasonably necessary for marketing and technical support purposes, Distributor shall not duplicate or otherwise copy any Products without express written permission from Company. All Products shall be reshipped by Distributor exactly as delivered by Company, and may not be modified in any manner by Distributor. + +EXCLUSIVE DISTRIBUTOR AGREEMENT Page 6 of 18 + +Source: SMART RX SYSTEMS INC, 1-A, 9/14/2018 + + + + + +5.2 Ownership of Technology. Except for the limited license granted in subsection 5.1 above, Distributor acknowledges and agrees that Company or its licensors own and will continue to own all right, title, and interest in and to the Products, including all copyright rights (including rights in audiovisual works), moral rights, patent rights (including patent applications and disclosures), rights of priority and trade secret rights recognized in any country or jurisdiction of the world, regardless of whether the Products are separate or combined with any other products, programs, or data. Company may, at its option, provide Distributor with copies of the Products for demonstration purposes, ill such cases, the demonstration products shall remain the property of Company and may not be duplicated, resold, lent, leased, given away or otherwise distributed. Distributor agrees to return aforesaid software at its expense upon written request from Company or at the termination of this agreement. 5.3 Notices. Distributor agrees not to alter, erase, deface or overprint any trademark, copyright and other notices of proprietary rights included by Company on or in Products. 5.4 Ownership of Marks. The Company Marks are the exclusive property of Company. Distributor has paid no consideration for the use of Company's trademarks, logos, copyrights, trade names or designations, and nothing contained in this Agreement shall give Distributor any interest in any of them. Distributor may use the Company Marks in marketing the Products but such use does not confer any right, title or interest in the Company Marks or in any of the Products. Distributor acknowledges that Company owns and retains all copyrights and other proprietary rights in all the Products, and agrees that it will not at any time during or after the term of this Agreement assert or claim any interest in or do anything that may adversely affect the validity or enforceability of any trademark, trade name, copyright or logo belonging to or licensed to Company (including without limitation any act, or assistance to any act, which may infringe or lead to the infringement of any copyright in the Products). Distributor agrees not to attach any additional trademarks, logos or trade designations to any Product. Distributor further agrees not to affix any Company trademark, logo, or trade name to any non-Company product. Distributor shall not register any Company Marks with any government authority or agency. All rights to use such Company Marks shall cease upon expiration or termination of this Agreement. 5.5 Infringement Enforcement. Distributor agrees to use its best efforts to cooperate in Company's efforts to protect its proprietary rights. Distributor agrees to immediately notify Company of any known or suspected breach of Company's proprietary rights that comes to Distributor's attention. 5.6 Ownership of Intellectual Property, Company shall retain ownership of its respective Background IP that each owned prior to this partnership and nay other IP developed during this marketing relationship. 6. NON-DISCLOSURE OF CONFIDENTIAL INFORMATION: 6.1 Generally. It may be necessary during the performance of this Agreement for Company to disclose to Distributor Confidential Information. Distributor agrees to use the same degree of care to protect the confidentiality of the Confidential Information and to prevent its unauthorized use or dissemination as it uses to protect its own confidential information of a similar nature. Distributor agrees to use the Confidential Information only for purposes directly related to the performance of this Agreement. All Confidential Information remains the property of Company or the relevant third party, and no license or other rights to Confidential Information is granted or implied hereby. Company acknowledges Distributors value for identifying and contracting Customers and will not circumvent Distributor in any manner relative to its relationships with existing customers or leads. + +EXCLUSIVE DISTRIBUTOR AGREEMENT Page 7 of 18 + +Source: SMART RX SYSTEMS INC, 1-A, 9/14/2018 + + + + + +6.2 Internal Procedures. Distributor shall secure and protect and shall make and keep only the minimum number of copies of any Confidential Information provided hereunder as may be required for technical or archival reasons, and will ensure that each copy is marked with a clearly legible confidentiality notice. Distributor shall restrict access to the Confidential Information to its bona-fide full-time employees, or consultants who have signed a non-disclosure agreement no less restrictive than terms of this Section, and who have a bona-fide need for such access. 6.3 No Derivative Developments. Distributor may not develop, market, license, sell or otherwise distribute any products derived in part or whole from the Confidential Information or Products or based on techniques revealed by Distributor's inspection of the Confidential Information or Products, except as expressly authorized by this Agreement. 6.4 Equitable Relief. Distributor consents to an injunction without bond or other equitable relief if sought by Company from a court of competent jurisdiction against the breach of the terms of this Section, in addition to any other legal or equitable remedies which may be available to Company. 6.5 Survival. Distributor's obligations under this Section shall survive any termination or expiration of this Agreement. 7. CONDUCT OF BUSINESS: 7.1 Reputational. Distributor will conduct all its business in its own name and in such manner as it may see fit. However, conduct which Company, in its discretion, deems detrimental to Company's image or reputation, shall be grounds for termination of this Agreement, upon reasonable notice and the failure to cure such behavior by Distributor. 7.2 Public Access. Distributor shall maintain publicly accessible facilities, including offices, a Website and toll-free telephone number within the Territory, and shall use its best efforts and devote such time as may be reasonably necessary to promote the sale of the Products within the Territory. 7.3 No Partnership or Agency. Nothing in this Agreement shall be construed to constitute the Distributor as the partner, employee or agent of Company, nor shall either party have any authority to bind the other in any respect, it being intended that each shall remain an independent contractor responsible only for its own actions. Distributor will pay all expenses of its office and activities and be responsible for the acts and expenses of its employees. + +EXCLUSIVE DISTRIBUTOR AGREEMENT Page 8 of 18 + +Source: SMART RX SYSTEMS INC, 1-A, 9/14/2018 + + + + + +8. MARKETING MATERIALS: Company will provide Distributor with reasonable amounts of Company's standard marketing literature for Distributor's use in marketing the Products. Distributor may reproduce exact copies of such materials for such use. 9. REPRESENTATIONS AND WARRANTIES, LIMITATION OF LIABILITY, INDEMNIFICATIONS: 9.1 Distributor Representations. Distributor represents and warrants that it is a limited liability company organized and in good standing under the laws of the State of Texas. 9.2 Company Representations. Company represents and warrants that it is a corporation organized and in good standing under the laws of the State of Florida. 9.3 Disclaimer of Warranty. COMPANY MAKES NO WARRANTIES OR REPRESENTATIONS AS TO PERFORMANCE OF COMPANY PRODUCTS OR AS TO SERVICE TO DISTRIBUTOR OR TO ANY OTHER PERSON, EXCEPT AS SET FORTH IN ANY COMPANY OR END USER LICENSE AGREEMENT FOR SUCH COMPANY PRODUCTS. 9.4 No Implied Warranties. TO THE EXTENT PERMITTED BY APPLICABLE LAW, ALL IMPLIED WARRANTIES, INCLUDING BUT NOT LIMITED TO IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, ARE HEREBY EXCLUDED. 9.5 Indemnification by Company. Company represents that it has sufficient right, title and interest in the Products and business processes to make this Agreement. Company agrees to defend at its expense any claim, suit or action against Distributor or any Company Licensee based on a claim that Company does not have sufficient right, title, and interest in the Products as furnished by Company, or that the Products as furnished by Company infringe on any Berne Convention copyright, United States or European patent, license, trade secret or other proprietary rights, and to pay the amount of any settlement, award, or the costs and damages finally awarded after appeal, if any, in any such claim, suit or action, provided (i) that Company is notified promptly in writing of any notice of claim or of threatened or actual suit; (ii) at Company's request and expense Company is given assistance for the defense of same; and (iii) the alleged infringement is not based upon the use of the Products in a manner prohibited under this Agreement, in a manner for which the Products were not designed, or in a manner not in accordance with the Products' specifications. 9.6 INTENTIONALLY LEFT BLANK. 9.7 Representations and Warranties. Each party (a "Representing Party" represents and warrants to the other party that: + +EXCLUSIVE DISTRIBUTOR AGREEMENT Page 9 of 18 + +Source: SMART RX SYSTEMS INC, 1-A, 9/14/2018 + + + + + +(i) It (1) has the power and authority and the legal right to enter into this Agreement and perform its obligations hereunder and (2) has taken all necessary action on its part required to authorize the execution and delivery of this Agreement and the performance of its obligations hereunder. (ii) This Agreement has been duly executed and delivered on its behalf and constitutes a legal, valid, and binding obligation of such Party and is enforceable against it in accordance with its terms subject to the effects of bankruptcy, insolvency, or other laws of general application affecting the enforcement of creditor rights and judicial principles affecting the availability of specific performance and general principles of equity, whether enforceability is considered a proceeding at law or equity. (iii) It is not aware of any pending or threatened litigation (and has not received any communication) that alleges that its activities related to this Agreement have violated, or that by conducting the activities as contemplated herein it would violate, any person's intellectual property rights. (iv) All necessary consents, approvals, and authorizations of all regulatory and governmental authorities or other persons required to be obtained by it in connection with the execution and delivery of this Agreement and the performance of its obligations hereunder have been obtained. (v) The execution and delivery of this Agreement and the performance of its obligations hereunder (1) do not conflict with or violate any requirement of applicable law or regulation or any provision of its articles of incorporation, bylaws, limited partnership agreement, or any similar instrument, as applicable, in any material way, and (2) do not conflict with, violate, or breach or constitute a default or require any consent under, any contractual obligation or court or administrative order by which it is bound. (vi) It is duly organized and in good standing under the laws of its respective state of organization, and has full power and authority and the legal right to own and operate its property and assets and to carry on its business as it is now being conducted and as it is contemplated to be conducted by this Agreement. (vii) In the event of any dispute, any deadlock among both parties, or any claim, question, or disagreement arising from or relating to this Agreement or the interpretation, performance or breach thereof, the Parties shall use their best efforts to settle the dispute, claim, question, or disagreement. To this effect, they shall consult and negotiate with each other in good faith and, recognizing their mutual interests, attempt to reach a just and equitable solution satisfactory to the parties. (viii) If any dispute, any deadlock among the Parties, or any claim, question, or disagreement arises out of or relates to this Agreement, or to the interpretation, performance, or breach thereof, and if the dispute or deadlock is not resolved through negotiation, all such disputes, deadlocks, claims, questions, or differences shall be finally resolved by arbitration in Orlando, Florida. + +EXCLUSIVE DISTRIBUTOR AGREEMENT Page 10 of 18 + +Source: SMART RX SYSTEMS INC, 1-A, 9/14/2018 + + + + + +10. ARBITRATION: Any dispute arising over the terms and conditions of this Agreement or in any manner relating to this Agreement which the parties are unable to resolve informally between themselves or by mediation shall be submitted, upon the motion of either party, to arbitration under the appropriate rules of the American Arbitration Association ("AAA"). All such arbitration proceedings shall be administered by the AAA and held in Dallas, Texas. The parties agree that the decision of the arbitrator shall be final and binding as to each of them. The AAA administrative fee shall be advanced by the party initiating the proceeding, but shall be subject to final apportionment by the arbitrator. The arbitrator's fee shall be shared equally by the parties. The arbitrator's award may be enforced in any court having jurisdiction thereof. Prior to invoking arbitration, the parties will make a reasonable effort to settle any dispute in an informal and expeditious manner. The parties separately and specially agree that if either shall contend that this Agreement is invalid or that grounds exist for its rescission or cancellation, that any dispute concerning such contention shall be submitted to arbitration in the manner provided in this section. Each party shall bear such party's own attorneys' fees in any arbitration proceeding; however, if either party commences an action in court to compel arbitration, enforce an arbitration award, or otherwise seek by judicial means to secure compliance with the arbitration provisions of this Agreement, then the prevailing party shall be entitled to recover from the losing party the prevailing party's reasonable attorneys' fees and costs of suit incurred for such purpose. 11. TRAINING: Company will schedule and provide training classes regarding Company products for Company Pharmacists and Pharmacy Technicians. 12. TERM OF THE AGREEMENT: 12.1 Generally. This contract shall remain in effect initially for the five (5) year term ("Initial Term") from the date signed and shall be automatically extended for one (1) year periods after the Initial Term ("Renewal Term") unless (i) either party provides written notice of its intention not to renew the Agreement within 180 days prior to any Renewal Term; or (ii) this Agreement is otherwise terminated pursuant to the terms of this Section 12. 12.2 Termination for Cause. In addition to termination under Section 12.1, either party may terminate this Agreement by giving written notice to the other party: (i) if the other party fails to perform or comply with this Agreement or any provision thereof (subject to the cure period described below); or (ii) if the other party becomes insolvent, admits in writing its inability to pay its debts as they mature, makes an assignment for the benefit of creditors, or becomes the subject of a petition under any bankruptcy act. Termination by Company under this Section 12.2 shall be effective sixty (60) days following Company's giving of notice to Distributor if the occurrence giving rise to the right of termination has not been cured, or immediately in the event of a breach of Section 6 regarding Non-Disclosure of Confidential Information or Section 7.1 regarding conduct injurious to Company's reputation. + +EXCLUSIVE DISTRIBUTOR AGREEMENT Page 11 of 18 + +Source: SMART RX SYSTEMS INC, 1-A, 9/14/2018 + + + + + +12.3 The rights and remedies of Company provided in this Section shall not be exclusive and are in addition to any other rights and remedies provided by law or this agreement. 13. OBLIGATIONS AFTER TERMINATION: In the event that this Agreement is terminated for any reason, both Parties acknowledge that there are certain obligations that they are required to fulfill, therefore the Parties agree that, upon termination of this Agreement: 13.1 Distributor Obligations. Distributor shall: (i) pay all valid outstanding and final invoices issued by Company within thirty (30) days after termination is effective; (ii) immediately cease all distribution, duplication, and representation of the Products and marketing literature; (iii) immediately cease all use of any Company trademarks, and not there after use any mark which is confusingly similar to any trademark associated with any Product; (iv) immediately cease all representation of an existing relationship with Company; and (v) within thirty (30) days deliver to Company copies of all customer records (electronic, paper or otherwise) related to the Products. 13.2 Company Obligations. (i) Immediately cease all representation of an existing relationship with Distributor; (ii) All medication inventory is owned by Smart RX Systems, Inc. only; and (iii) Distributor shall continue to receive Net Income per Customer location for so long as Customer continues to utilize the Products. 13.3 No Use of Products. From and after termination Distributor shall not use internally or employ any of the Products or related materials as a part, portion, or basis of any product which Distributor shall use, sell, sublicense, assign, lease, loan, license or transfer to any third party. 13.4 Survival. The terms of Sections 5, 6, and 13-23 shall survive any termination or expiration of this Agreement. 14. NOTICES AND REQUESTS: Notices required under this Agreement shall be deemed given (i) when delivered in writing personally, (ii) when sent by confirmed telex or facsimile, (iii) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid; or (iv) one (1) day after deposit with a commercial overnight carrier, with written verification of receipt. All communications will be sent to the addresses set forth below (or such other address as either party may subsequently designate): + +EXCLUSIVE DISTRIBUTOR AGREEMENT Page 12 of 18 + +Source: SMART RX SYSTEMS INC, 1-A, 9/14/2018 + + + + + +Company: Smart RX Systems, Inc. Red Bug Lake Road, Suite 256 Winter Springs, Florida 32708 Distributor: A3 Development Group, LLC 17521 Highway 69 South, Suite 120 Tyler, Texas 75703 15. CONTROLLING LAW: 15.1 Generally. This Distributor Agreement shall be exclusively governed, construed, enforced and controlled by the laws of the United States of America and of the State of Texas. The parties agree that any controversy, claim, dispute, or disagreement arising under, out of, or relating to this Distributor Agreement shall be exclusively submitted for resolution exclusively to courts of competent jurisdiction located in the County of Orange, State of Florida, USA. Distributor consents and submits to the exclusive jurisdiction and venue of such courts for the resolution of such controversies, claims, disputes, or disagreements. 15.2 Service of Process. The Parties further agree that service of process in any such controversy, claim, dispute, or disagreement may be made by sending service by registered mail, return receipt requested, and the Parties expressly waive any other rights to service. If either party employs attorneys to enforce any rights arising out of or related to this Distributor Agreement, the party prevailing shall be entitled to recover reasonable attorneys' fees from the other party. 16. MODIFICATION OF THE AGREEMENT: This Distributor Agreement constitutes the entire agreement between the Parties with respect to the subject matter hereof and merges all prior and contemporaneous communications. It shall not be modified except by a written agreement dated even herewith or subsequent hereto signed on behalf of Company and Distributor by their respective duly authorized representatives. 17. SEVERABILITY; WAIVER; FORCE MAJEURE: 17.1 Severability. If any provision of this Agreement shall be found to be invalid or unenforceable for any reason, the remaining provisions nevertheless shall remain in full force and effect. 17.2 Waiver. Any waiver on the part of any parties hereto shall not imply the waiver of any other right or interest of such party, or any subsequent waiver. 17.3 Force Majeure. Except for failure to pay sums required under this Agreement, the parties hereto shall not be responsible for any failure or delay in the performance of any obligations hereunder caused by acts of God or the public enemy, flood, fire, natural disaster, war or preclusive acts of any governmental authority. + +EXCLUSIVE DISTRIBUTOR AGREEMENT Page 13 of 18 + +Source: SMART RX SYSTEMS INC, 1-A, 9/14/2018 + + + + + +18. ATTORNEYS' FEES: If either party employs attorneys to enforce any rights arising out of or related to this Distributor Agreement, the party prevailing shall be entitled to recover reasonable attorneys' fees and costs from the other party. 19. BINDING EFFECT: Subject to the limitations hereinbefore expressed, this Distributor Agreement will inure to the benefit of and shall be binding upon the parties, their successors, administrators, heirs, and assigns. 20. NATURE OF RELATIONSHIP: Nothing in this Agreement shall be construed as creating a joint venture, partnership, agency, employer/employee, or similar relationship between the Parties, or as authorizing either Party to act as the agent of the other. The Distributor's relationship to the Company is that of an independent contractor. 21. NO IMPLIED WAIVER: The failure of either Party to insist on strict performance of any covenant or obligation under this Agreement, regardless of the length of time for which such failure continues, shall not be deemed a waiver of such Party's right to demand strict compliance in the future. No consent or waiver, express or implied, to or of any breach or default in the performance of any obligation under this Agreement shall constitute a consent or waiver to or of any other breach or default in the performance of the same or any other obligation. 22. COUNTERPARTS/ELECTRONIC SIGNATURES: This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which shall constitute one and the same instrument. For purposes of this Agreement, use of a facsimile, e-mail, or other electronic medium shall have the same force and effect as an original signature. 23. SEVERABILITY: Whenever possible, each provision of this Agreement, will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal, or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality, or unenforceability will not affect any other provision or any other jurisdiction, but this Agreement will be reformed, construed, and enforced in such jurisdiction as if such invalid, illegal, or unenforceable provisions had never been contained herein. + +EXCLUSIVE DISTRIBUTOR AGREEMENT Page 14 of 18 + +Source: SMART RX SYSTEMS INC, 1-A, 9/14/2018 + + + + + +24. HEADINGS: Headings used in this Agreement are provided for convenience only and shall not be used to construe meaning or intent. IN WITNESS HEREOF, the parties have hereunto set their hands and seals as of the date stated at the beginning of this Agreement. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original for all purposes, and together shall constitute one and the same document. Telecopied signatures shall be relied on as original signatures in all respects. COMPANY: DISTRIBUTOR: SMART RX SYSTEMS, INC., A3 DEVELOPMENT GROUP, LLC, a Florida corporation a Texas limited liability company By: /s/ Sandeep Mathow By: /s/ Tracy W. Gunter Name: Sandeep Mathow Name: Tracy W. Gunter Title: Founder & CEO Title: Partner + +EXCLUSIVE DISTRIBUTOR AGREEMENT Page 15 of 18 + +Source: SMART RX SYSTEMS INC, 1-A, 9/14/2018 + + + + + +Exhibit A Company Marks trademarks, service marks, logos and trade names + +EXCLUSIVE DISTRIBUTOR AGREEMENT Page 16 of 18 + +Source: SMART RX SYSTEMS INC, 1-A, 9/14/2018 + + + + + +Exhibit B Example Pharmacy Management Services Agreements + +EXCLUSIVE DISTRIBUTOR AGREEMENT Page 17 of 18 + +Source: SMART RX SYSTEMS INC, 1-A, 9/14/2018 + + + + + +Exhibit C Sales and Marketing Plans + +EXCLUSIVE DISTRIBUTOR AGREEMENT Page 18 of 18 + +Source: SMART RX SYSTEMS INC, 1-A, 9/14/2018 \ No newline at end of file diff --git a/full_contract_txt/Sonos, Inc. - Manufacturing Agreement .txt b/full_contract_txt/Sonos, Inc. - Manufacturing Agreement .txt new file mode 100644 index 0000000000000000000000000000000000000000..efed0aa363864ffa83f10437841febae8e6a1de4 --- /dev/null +++ b/full_contract_txt/Sonos, Inc. - Manufacturing Agreement .txt @@ -0,0 +1,897 @@ +Exhibit 10.07 [*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + +Manufacturing Agreement + +Between + +Sonos, Inc. + +And + +IAC + + + + + +TABLE OF CONTENTS 1.0 DEFINITIONS 3 2.0 SCOPE OF RELATIONSHIP 8 3.0 OWNERSHIP; GRANT OF RIGHTS; TRADEMARKS USAGE 8 4.0 MANUFACTURING OPERATIONS; COMPLIANCE 9 5.0 FORECASTS, PURCHASE ORDERS AND DELIVERY 12 6.0 PRODUCT ACCEPTANCE, INVOICING, QUARTERLY PRICING UPDATES, AND SHIPPING TERM 13 7.0 PRICES; PAYMENT TERMS 14 8.0 NPI; FUTURE PRODUCTS 18 9.0 REPAIR SERVICES; PROVISION FOR EXTENDED WARRANTY 18 10.0 REPRESENTATIONS AND WARRANTIES 19 11.0 INDEMNITY 19 12.0 CONFIDENTIALITY 20 13.0 USE OF CONTRACTORS; COMPLIANCE WITH LABOR LAWS 22 14.0 LIMITATION OF LIABILITY 22 15.0 TERM AND TERMINATION 23 16.0 MISCELLANEOUS 24 Exhibit Exhibit Description A Statements of Work B Program Managers C Flexibility and Cancellation Guidelines D NPI Process E RMA and Repair Procedures F Sonos Supplier Performance Review G Product Pricing Formula H ERS Statement of Work I Engineering Change Process Page 2 of 38 + + + + + +Manufacturing Agreement + +This Manufacturing Agreement, including the Exhibits ("Agreement"), effective as of September 4, 2014 ("Effective Date"), is by and between Sonos, Inc., a Delaware corporation, having its principal offices at 223 E. De La Guerra Street, Santa Barbara, CA, 93101, USA ("Sonos"), and Inventec Appliances Corporation, having principal offices at 37, Wugong 5t h Road, Wugu District, New Taipei City, 24890, Taiwan, R.O.C. ("IAC"). + +RECITALS + +A. Sonos is in the business of designing, developing and selling consumer electronics products for use in the distribution and playback of digital content. + +B. IAC is in the business of, among other things, manufacturing products such as those developed by Sonos on an OEM basis. + +C. Sonos and IAC desire to enter into a relationship pursuant to which IAC and its Affiliates will manufacture for Sonos and its Affiliates the Sonos Products on the terms and conditions set forth herein. + +AGREEMENT + +In consideration of the foregoing and the mutual promises and covenants contained herein, the parties agree as follows: 1.0 DEFINITIONS. + +1.1. "Affiliate" means any entity controlled by, controlling, or under common control with Sonos or IAC, as the case may be, now or in the future (control shall be deemed to mean having a right to 50% of the entity's profits or ownership of at least 50% of the voting rights in the entity). + +1.2. "Arena" means the BOM management IT system used by Sonos, and will be used by IAC to access BOM and other Component information required by IAC to manufacture Products. + +1.3. "AVL" means the Approved Vendor List, which is a list representing those suppliers and vendors of Third Party Components that are approved by Sonos for use by IAC in the manufacture of Products, or those suppliers and vendors that are approved by Sonos for the procurement by IAC of tooling, equipment, fixtures, etc required for the manufacture or test of Products. + +1.4. "BOM" means the bill of materials for a given Product. + +1.5. "Build Start Date" means the date that a Product Build is scheduled to begin. + +1.6. "Build Complete Date" means the date that a Product Build is scheduled to be completed with respect to all Product Units in such Product Build. + +1.7. "Component(s)" means Sonos Sourced Components and IAC Sourced Components. Components shall be identified by Sonos' part numbers as defined in Arena. + +1.8. "Component Defect" means a Component that is not in compliance with the published specification for such Component or is causing a Product to not conform with the Statement of Work for such Product. Page 3 of 38 + + + + + +1.9. "Component Lead Time" means the time between the date IAC places a purchase order with a Component supplier for a Component and the date that Component arrives to IAC's factory. + +1.10. "Defective Product" means any Product that does not comply with the Specifications, the Purchase Order, Statement of Work or other provisions of this Agreement. + +1.11. "Deliverables" shall mean any tangible or intangible items to be delivered by one party to the other party. + +1.12. "Delivery Date" means the date that a Product Build (or portion thereof) is delivered by IAC to the Destination Port. + +1.13. "Designated Carrier" means any entity that has been designated in writing by Sonos to perform or procure the transport of Product Units by rail, road, air, sea, inland waterway or by combination of such modes. + +1.14. "Destination Port" means the port (which may be a shipping port or airport) where a given Product Build (or portion thereof) is designated for delivery by Sonos. + +1.15. "Documentation" means any user and technical materials that Sonos makes available for the Products. + +1.16. "Effective Date" means the date this Agreement is executed by the Parties. + +1.17. "Engineering Change", "Engineering Change Order" or "ECO" means a change to the design of a Product after Mass Production has begun. ECOs may be initiated by either party, but must be approved by Sonos prior to implementation. + +1.18. "Epidemic Failure" shall have the meaning set forth in Exhibit E. + +1.19. "Excess Component(s)" means any Third Party Component for which IAC has taken delivery and incurred a payment obligation that (i) is (a) a Unique Component, (b) an Obsolete Component, or (c) were to be consumed for Products that were rescheduled or cancelled in accordance with Exhibit C, and (ii) has not subsequently been consumed for Products within [*] after IAC takes physical delivery of the Component. + +1.20. "Future Product" means any product in development by Sonos that may become a Product under the terms of this Agreement. A Future Product is not considered a Product until (i) NPI is complete, (ii) a Statement of Work has been signed by both parties with respect to such Future Product, and (iii) Mass Production commences on such Future Product. + +1.21. "IAC Contributions" means the Technology made or otherwise provided by IAC under this Agreement. + +1.22. "IAC Manufacturing Facility" means the IAC facility where Product Units are manufactured. The initial IAC Manufacturing Facility is [*]. Production of Product Units shall not be moved to a different IAC Manufacturing Facility without Sonos' prior written consent. + +1.23. "IAC Property" shall mean (i) any and all Technology developed by IAC and/or its Affiliates prior to the Effective Date or outside of the scope and independent of its performance of this Agreement, (ii) any modifications, derivatives or improvements to the items in (i) made solely by IAC or its Affiliates that constitute manufacturing processes and (iii) all Intellectual Property Rights in the items in (i) and (ii).. Page 4 of 38 *Confidential Treatment Requested + + + + + +1.24. "IAC Subcontractor" shall mean any third party subcontractor selected by IAC to perform services on behalf of IAC under this Agreement. + +1.25. "Hardware Quality Test Plan" shall mean all required reliability testing of a Product throughout the NPI process. A Hardware Quality Test Plan will be provided by Sonos to IAC for each Product, and included in the relevant Statement of Work. + +1.26. "Intellectual Property Rights" means with respect to a given piece of Technology, all current and future worldwide patents and other patent rights, utility models, copyrights, mask work rights, trade secrets, and all other intellectual property rights and the related documentation or other tangible expression thereof. + +1.27. "Lead Time" means the time between the date a Purchase Order is acknowledged by IAC and the shipment ex-factory date. The default Lead Time is agreed to be [*], unless a shorter Lead Time is specified in the applicable Statement of Work for the Product. + +1.28. "Manufacturing Date" means the date a Product Unit is manufactured, packaged and ready for shipment. + +1.29. "Marks" means the trademarks, service marks, trademark and service mark applications, trade names, logos, insignia, symbols, designs or other marks identifying a party or its products. + +1.30. "Mass Production" means production line manufacturing in quantity of a Product for commercial release to Sonos customers. + +1.31. "New Product Introduction" or "NPI" means the process by which IAC and Sonos bring a Product or Future Product to the IAC Manufacturing Facility for the purpose of commencing Mass Production of such Product. The standard NPI process is outlined in Exhibit D hereto. + +1.32. "NRE Services" means the development and related engineering services provided by IAC during the NPI process. The services shall not include non-engineering related activities, such as facility costs, materials costs, direct labor costs, etc. + +1.33. "Obsolete Component" means a Third Party Component that is rendered obsolete by an ECO or a Product end of life, and cannot be used in any other Sonos Product. + +1.34. "Parties" means Sonos and IAC. + +1.35. "Product" means each product (including any hardware, software, technology, and Components) identified in detail in an applicable Statement of Work, attached hereto from time to time, to be manufactured by IAC for Sonos pursuant to the terms of this Agreement. + +1.36. "Product Build" means a Mass Production manufacturing build for a specified number of Product Units designated in a Purchase Order. A Product Build is not complete until all Product Units specified in the Purchase Order are complete. Page 5 of 38 *Confidential Treatment Requested + + + + + +1.37. "Product Customizations" shall mean any derivatives, improvements or modifications to any Product made by either party (or a subcontractor of such party) in the course of performance of this Agreement. Product Customizations does not mean the manufacturing processes utilized by IAC or an IAC Subcontractor to make such derivatives, improvements, or modifications to a Product. Any Product Customizations made by IAC or an IAC Subcontractor shall be on a "work for hire" (using the meaning given to such term under United States copyright law) basis to the maximum extent permissible under applicable law, and all Intellectual Property Rights therein shall be owned solely by Sonos. + +1.38. "Product Unit" means a single, individual Mass Production unit for any given Product. + +1.39. "Production Process Change Order" means a proposed change by either party to the Mass Production manufacturing process for a given Product. Production Process Change Orders may include proposed modifications, among other things, to printed circuit board assembly and test, Product sub-assemblies, Product final assembly, Product test or quality assurance procedures. + +1.40. "Purchase Order" or "PO" means a written or electronic purchase order issued by Sonos to IAC for purchase of a Product. + +1.41. "Purchase Price Variance" or "PPV" means the difference between the price for a Product Unit specified on an IAC invoice and the actual cost that should have applied for such Product Unit according to the terms of this Agreement and as determined at a later date. + +1.42. "Quality Plan" means for any given Product the series of tests and inspections that must be performed by IAC during the manufacturing process to ensure that the Product meets the applicable Specifications. Each Product shall have a separate Quality Plan that is set forth in the applicable Statement of Work. While each Quality Plan shall be jointly developed and determined between and by Sonos and IAC, Sonos owns the Quality Plan and reserves the final decision-making regarding its contents. + +1.43. "Rolling Forecast" means a forecast of Sonos' estimated future requirements for any Product to be manufactured by IAC for Sonos, [*]. Other than the Sonos obligations described under this Agreement, a Rolling Forecast is a non-binding projection of Sonos' future requirements for a Product. + +1.44. "Semi-Monthly Invoice Date" means the middle and final business day, respectively, of a given month. On such date, IAC is entitled to send an invoice to Sonos for the Product Units that have shipped during the first half or second half of the month, as applicable. + +1.45. "Shipping Term" means the default shipping term as set forth in Section 6.5. Such Shipping Term shall govern any Product manufactured by IAC for Sonos under this Agreement, unless otherwise agreed in writing by Sonos, or instructed in writing by Sonos, and expressly stated in an applicable Purchase Order and confirmed in the corresponding invoice. + +1.46. "Software" shall mean software developed by Sonos or licensed from a third party by Sonos that is used in the operation of a Product, whether embedded in a Component or otherwise. + +1.47. "Sonos Destination" means a Sonos Fulfillment Center (as defined below) or the delivery location of a Sonos customer. + +1.48. "Sonos Fulfillment Center" means a designated warehouse location run by or for Sonos from which Sonos warehouses or assembles Product Units, fulfills its customers' orders and/or processes returns. Sonos Fulfillment Centers may be located anywhere in the world. Page 6 of 38 *Confidential Treatment Requested + + + + + +1.49. "Sonos Sourced Component(s)" means all Third Party Components required for the manufacture of Products that the pricing and supply contract, including all terms and conditions, are negotiated and controlled by Sonos. IAC shall procure Sonos Sourced Components at the pricing, terms and conditions as directed by Sonos, unless otherwise agreed in writing between the Parties. Sonos Sourced Components are listed in the attached Statement of Works, and may be updated from time to time in writing by Sonos to IAC. + +1.50. "IAC Sourced Component(s)" means all Third Party Components required for the manufacture of Products that the pricing and supply contract, including all terms and conditions, are negotiated and controlled by IAC. IAC Sourced Components are listed in the attached Statement of Works, and may be updated from time to time in writing by Sonos to IAC. + +1.51. "Sonos Property" shall mean (i) all items provided by Sonos or its Affiliates, (ii) any and all Technology developed by Sonos and/or its Affiliates prior to the Effective Date, independent of performance of this Agreement or in the course of performance of this Agreement, (iii) the Products and Product Customizations (including software as further described in the Statement of Work), and (iv) all Intellectual Property Rights related to any of the foregoing. + +1.52. "Sonos Tool" means a custom tool, piece of equipment, fixture, jig or similar item either provided by Sonos or created by IAC or an IAC Subcontractor solely for the manufacture of a Product or Future Product, which Sonos Tool cannot be used for any other purpose or repurposed for future use by a different IAC customer. Sonos Tools shall be considered Sonos Property and be used solely on Sonos Product. + +1.53. "Specifications" shall mean the technical and other specifications for a Product set forth in an applicable Statement of Work. + +1.54. "Standard Components" shall mean Third Party Components which are not Unique Components. Standard Components can typically be used by IAC for another of its customers, or can be reallocated by the Component supplier for use by a customer other than IAC. Unless a Component is designated as a Unique Component in the applicable Statement of Work, it is assumed to be a Standard Component. + +1.55. "Statement of Work" means the document, attached hereto as an Exhibit A, that describes a Product, its specifications and all other related information and requirements necessary to produce such Product in a manner consistent with Sonos' expectations. + +1.56. "Technology" means all inventions, processes, tools, devices, prototypes, schematics, designs, documentation, methodologies, software and hardware. + +1.57. "Third Party Components" means all hardware, technology, software or materials that IAC incorporates into the Products that are procured by IAC or an IAC Affiliate. For the purpose of this Agreement, hardware, software, technology and materials supplied to IAC by an IAC Affiliate for IAC's manufacture of Products shall be considered a Third Party Component. Additionally, any hardware or other materials (but excluding Sonos or third party software) that are provided, consigned, or sold to IAC by Sonos shall be considered a Third Party Component. + +1.58. "Third Party Finished Goods" shall mean finished products that are produced for Sonos by an entity other than IAC. A Third Party Finished Good is typically complete except for being placed into consumer packaging. For the purpose of this Agreement, a finished product produced by an IAC Affiliate, or a finished product provided, consigned, or sold to IAC by Sonos, shall be considered a Third Party Finished Good. Page 7 of 38 + + + + + +1.59. "Third Party Property" shall mean equipment, designs, materials and other property embodied in Third Party Components that are procured by IAC or Sonos (as designated in the applicable Statement of Work) and incorporated into the Product. + +1.60. "Transfer Product" means a Sonos product that is commercially available prior to IAC commencing NPI for such product. + +1.61. "Unique Components" shall mean Third Party Components which must be ordered, designed and customized specifically for a given Product and cannot be used by IAC for its other customers. Unique Components, if any, for a given Product are designated in the applicable Statement of Work. + +1.62. "ERS SOW" shall mean a statement of work that describes the processes agreed by the Parties regarding the settlement of evaluated receipts and the management and acknowledgement of Purchase Orders. The ERS SOW is attached to this Agreement as Exhibit H, and may be updated periodically as mutually agreed by the Parties and in accordance with Section 16.7 of this Agreement. + +2.0 SCOPE OF RELATIONSHIP. + +2.1. Manufacturing of Products. Subject to the terms and conditions of this Agreement, IAC shall procure, directly or indirectly, certain Third Party Components (as identified on the Statement of Work and maintained in Arena), manufacture, assemble, and test Products which Sonos and/or its Affiliates may order from IAC, respectively. The various Products shall be manufactured by IAC according to the respective Statement of Work, as set forth in an applicable Exhibit A. IAC agrees to supply Product(s) in conformance with the applicable Statement of Work for the duration of this Agreement. IAC agrees to build and ship Product Units directly to a Sonos Destination. IAC will handle all necessary fulfillment, external packaging, customs clearance and shipping procedures necessary to deliver the Product Unit(s) directly to the designated Sonos Destination, anywhere in the world, in accordance with the shipping terms specified in Section 6.5, or any other terms that may be mutually agreed upon between the Parties in writing. + +2.2. Product Bundling. If requested by Sonos, IAC agrees that it will perform final consolidation, packaging and related activities, at Sonos' expense, for Third Party Finished Goods that require bundling with Sonos Products manufactured by IAC. Such Third Party Finished Goods will be delivered fully assembled and may be in temporary or sub-packaging. For the avoidance of doubt, the BOM for any Third Party Finished Good shall be excluded from the pricing formula in Section 7.1. + +3.0 OWNERSHIP; GRANT OF RIGHTS; TRADEMARKS USAGE. + +3.1. Ownership by IAC. IAC shall own, and hereby retains, all right, title, and interest in and to the IAC Property. + +3.2. Ownership by Sonos. Sonos shall own, and hereby retains, all right, title, and interest in and to the Sonos Property. Except for preexisting IAC Property and any third party's Intellectual Property, IAC shall and does hereby irrevocably assign, and shall and does cause IAC Affiliates and IAC Subcontractors to irrevocably assign, to Sonos all of IAC's, IAC Affiliates' or IAC Subcontractors' worldwide right title and interest in and to the Sonos Property , if any, whether developed solely by Sonos or jointly between Sonos or a Sonos Affiliate and IAC, an IAC Affiliate, or an IAC Subcontractor, that Page 8 of 38 + + + + + +may arise through the performance of its obligations under this Agreement. IAC shall cooperate fully with Sonos and execute such further instruments, documents and agreements and give such further written assurances, as may be reasonably requested by Sonos, at Sonos' expense, to perfect the foregoing assignment and obtain and enforce assigned Intellectual Property Rights. + +3.3. Licenses by Sonos to IAC. + +3.3.1. License to Manufacture. Subject to all terms and conditions of this Agreement, Sonos hereby grants to IAC and its Affiliates a non-exclusive, worldwide, nontransferable, royalty free right and license under Sonos' Intellectual Property Rights, to manufacture the Products solely for Sonos. + +3.3.2. Software License. Subject to all terms and conditions of this Agreement, Sonos hereby grants to IAC and its Affiliates a non- exclusive, worldwide, nontransferable, royalty-free right and license to make copies of the software specified in the applicable Statement of Work solely as necessary to install and embed such software in the Product. IAC shall: (i) ensure that all copies are exact copies and conform in all respects to the original master copy provided by Sonos; (ii) make only one (1) copy of such software per each Product manufactured; (iii) reproduce any proprietary notices contained in such software and not remove, alter or obfuscate any such proprietary notices; (iv) not modify or create derivative works of such software; and (v) not reverse engineer, decompile or otherwise attempt to derive the source code of such software. + +3.3.3. Necessary Export Permissions. The above license grants shall be deemed to include all necessary rights and licenses, if any, to permit IAC to export the Products to Sonos or Sonos' designee. + +3.4. Third Party Property. Each party shall be responsible for the payment of any royalties or other fees for any Third Party Property associated with a Third Party Component procured by such party (as set forth in the applicable Statement of Work), including any required rights to use, manufacture, copy, sell, offer for sell, distribution and export or import the Product. + +3.5. Trademarks License. Sonos hereby authorizes IAC to use and to cause its Affiliates to use, the Marks as specified by Sonos on the Products and relevant documents solely for the purpose of this Agreement. Except for the limited rights granted in this Section 3.5, nothing in this Agreement grants, or should be construed to grant, any right, title, or interest in or to the Sonos Marks to IAC. At no time shall IAC challenge or assist others to challenge the Sonos Marks, or registrations thereof, or attempt to register any trademarks, service marks, trade names or other marks confusingly similar to the Sonos Marks. All goodwill associated with the Sonos Marks shall inure solely to the benefit of Sonos. + +4.0 MANUFACTURING OPERATIONS; COMPLIANCE. + +4.1. Program Managers. Sonos and IAC will each appoint at least one Program Manager ("Program Manager"). The names, addresses, email IDs, and telephone numbers of the Program Managers are attached to this Agreement as Exhibit B. The Program Managers shall act as liaisons and principal points of contact between the parties with respect to their respective performances of this Agreement. All communications between the Parties with respect to development of Products shall be directed to the Program Managers. The Program Managers may provide the Parties from time to time with the names and telephone numbers of additional specific contact persons (e.g., to communicate specific information regarding support, enhancements, etc.) when such direct contact is preferable. In the event that either party appoints a new Program Manager, such party shall promptly notify the other in writing, provided that Sonos reserves the right to request that IAC replace any Program Manager that is not performing at a satisfactory level, and such requests shall not be unreasonably refused by IAC. Page 9 of 38 + + + + + +4.2. Production Process Change Order Request. IAC shall not make any changes to any manufacturing process with respect to any Product without first obtaining in writing from Sonos approval for a Production Process Change Order. IAC shall submit a request to make a change containing sufficient engineering data in support of the request. Within [*] of receiving such request, Sonos shall respond to IAC's request and shall either approve or disapprove the change, request more information, request samples built using the new manufacturing process for testing purposes, or the parties may mutually agree to extend the deadline for implementation of the proposed change. The foregoing request/approval process shall also apply during NPI for any Transfer Product or Future Product. + +4.3. Sonos' Engineering Change Order (ECO) Request. When an Engineering Change is required by either party, the requesting party shall provide the other party with all applicable and sufficient documentation, specifications, and the requested effective date of such engineering change. IAC shall respond initially within [*] or any other longer period agreed between the Parties, advising Sonos as to (i) implementation and the effective date of such change, (ii) associated costs and effect to on-hand materials, on-order materials and work in process which shall be borne by Sonos, (iii) the impact of the change upon existing Product pricing and shipment schedules for the entire period for which Purchase Orders are outstanding, and (iv) the costs and expenses of obsolete materials caused by implementing such engineering change which shall be borne by Sonos, subject to the provisions of Section 7.9. Costs associated with Engineering Change Orders shall be agreed in writing between the Parties prior to implementation. The foregoing request/approval process shall also apply during NPI for any Transfer Product or Future Product. The Engineering Change process agreed upon between the Parties is described in detail in Exhibit I attached to this Agreement. + +4.4. Notification Requirement. If at any time either party discovers an error, bug or other problem that such party believes will require a Production Process Change Order or Engineering Change Order, the discovering party will notify the other immediately and begin the process of fixing the issue in accordance with either Section 4.2 or 4.3, as appropriate. Sonos reserves the right to halt Mass Production of a given Product if Sonos determines, in its reasonable and good faith judgment, that there is a problem in manufacturing such Product that requires immediate remedial action. [*]. Unless otherwise authorized by Sonos in writing, the Mass Production line will remain stopped until the cause of the failure is understood, a solution is implemented and thoroughly tested and Sonos approves in writing to resume Mass Production. + +4.5. Quality Programs; Disaster Recovery Plan. IAC shall maintain various quality control programs consistent with best practices for the industry, each of which will be provided to Sonos if requested. When applicable, any additional or substitute quality requirements agreed to by the Parties shall be made to such programs and plans. IAC shall also have a disaster recovery plan in place detailing IAC's plans, procedures, and designated resources for timely response to and recovery from potential civil, natural, and physical plant disasters that could reasonably be expected to disrupt production and delivery to Sonos. The plan shall be approved by Sonos for each Product to ensure the supply of such Products to Sonos is not interrupted. Such plans may include multiple sources of supply for each Component and back-up manufacturing facilities. Any changes to the disaster recovery plan shall be subject to Sonos' prior written concurrence. + +4.6. Inspection of IAC Plants; Subcontractors. Upon [*] prior written notice from Sonos, Sonos or its representatives will have the right to inspect and audit, at Sonos' expense, IAC's factory, purchasing processes, manufacturing processes, quality program, physical inventory count and supporting documentation, including reports, quality test data and training documents and certificates of Page 10 of 38 *Confidential Treatment Requested + + + + + +conformance as related to Products at any time during the term of this Agreement. For information stored electronically and where IAC cannot give Sonos access to its systems, IAC will provide printouts of any requested documentation. If such an inspection is requested, IAC will reasonably furnish all relevant supporting documentation to verify compliance with its stated manufacturing and quality processes. Inspections shall be conducted at a reasonable time and during normal hours of operation. Such inspections and audits by Sonos or a Sonos authorized audit firm will be limited to [*], except for any case of an identified quality issue whereby Sonos will have the right to inspect IAC's facility and to review applicable documentation and processes at any time, provided Sonos provides IAC with written notice [*] in advance of the Sonos inspection. Subject to the prior written approval of IAC's vendor or IAC Subcontractor, Sonos or its representatives may also inspect such vendor or subcontractor. + +4.7. Safety Standard Changes. IAC shall promptly notify Sonos if, to its knowledge, any upgrade, substitution or other change to any Third Party Component is required to make the Component meet applicable safety standards or other governmental statutes, rules, orders or regulations. Sonos and IAC will discuss the costs of any subsequent upgrade, substitution or other required change in an equitable manner based on good faith discussions between the parties. + +4.8. Compliance with Laws and Regulations for Manufacturing; Fair Labor Practices. IAC shall comply with all applicable laws and regulations related to the manufacturing and/or production of the Products in jurisdictions in which IAC manufactures the Products, including labor and employment, environmental, safety, tax and other similar regulations. In addition, IAC currently complies and will continue to comply with any applicable regulations regarding foreign child labor laws and other abusive labor practices. + +4.9. EICC Membership. IAC shall maintain a membership in good standing with the Electronic Industry Citizenship Coalition (EICC) throughout the term of this Agreement. If IAC presently does not have an EICC membership, then after SONOS joins the EICC and unless otherwise agreed in writing between the Parties, one shall be obtained within six (6) months from the Effective Date. In the event IAC loses or discontinues their EICC membership during the term of this Agreement, Sonos must be notified in writing within three (3) business days, including the reason or reasons the membership has been disrupted. IAC shall cure any membership disruption within six (6) weeks time from the date of its occurrence. + +4.10. Compliance with Product Requirements. Sonos is responsible for identifying and securing approvals from regulatory, safety and/or standards organizations agencies in the various jurisdictions in which it sells or intends to sell the Products. IAC shall use commercially reasonable efforts to provide any and all assistance requested by Sonos to obtain such approvals from the relevant agencies and organizations, of which will be at Sonos' cost. IAC shall mark the Products and, as applicable, the Components, with regulatory, safety and standards organizations marks which signify compliance with the requirements of those organizations that Sonos has specified. IAC has the responsibility for obtaining any required regulatory, safety or other approvals for Components, provided that Sonos shall provide reasonable assistance in obtaining such approvals from any Sonos-appointed vendors. + +4.11. Origin Certification; Marking; HTS. Upon Sonos' request, IAC will provide Sonos with an appropriate certificate stating the country of origin for the Products and Components, provided that IAC can obtain such certification from the Components vendor. IAC shall mark the container or pallet with the country of origin in compliance with customs' requirements. IAC agrees that it will follow Sonos' guidelines for Harmonized Tariff Schedule ("HTS") classifications that may be required for either export or import of the Products. Page 11 of 38 *Confidential Treatment Requested + + + + + +4.12. Manufacturing Test Information. IAC shall provide Sonos with electronic tracking of Product assembly data (sub and final assemblies), Product test results, quality audits (dates, scope, findings, actions), packaging, shipping and ECO implementation details. [*]. + +4.13. On Site Presence. Sonos always has the right to have its employees or authorized representatives on IAC's manufacturing floor for the general purpose of overseeing and collecting manufacturing information related to the Mass Production, repair, or rework of Products. + +4.14. Performance Expectations. Sonos and IAC agree to work together to develop and achieve the supplier performance expectation as outlined by the Sonos Supplier Performance Review described in Exhibit F. [*]. IAC agrees to discuss and document in the performance review meetings any productivity improvement accomplishments and future plans relating thereto. Each party shall be responsible for its own costs associated with participating in these activities. + +5.0 FORECASTS, PURCHASE ORDERS AND DELIVERY. + +5.1. End of Life. If Sonos elects to discontinue the sale of any Product ("End of Life" or "EOL"), Sonos shall notify IAC in writing at least [*] prior to the approximate date on which Sonos intends to EOL the product, including the date and quantity of the last Product Build and any additional requirements for future, anticipated returns. + +5.2. Purchase Orders. From time to time [*], an authorized Sonos Planning Manager defined in Exhibit B shall send to IAC a binding Purchase Order in accordance with the Lead Time for a given Product. Sonos' Purchase Orders shall be submitted to IAC in writing or by any reasonable means, including but not limited to EDI, postal delivery, courier delivery, facsimile transmission or electronic mail. Each Purchase Order shall include: + +(a) Identification of Product ordered by Sonos part number; + +(b) Quantity to be purchased; + +(c) Requested Product ex-factory date; and + +(d) Sonos Destination and other specific instructions. + +5.3. Placement of Purchase Orders; Rolling Forecasts. All Purchase Orders under this Agreement shall be subject only to the terms and conditions hereof. IAC shall not be bound by any term or condition on a Purchase Order that is inconsistent with this Agreement or any of its exhibits except to the extent mutually agreed in writing by the Parties. In the event the terms of any such Purchase Order, confirmation or similar document conflict with or are additional to the terms of this Agreement, the terms of this Agreement alone shall apply and shall govern regardless of execution of such document by one or both parties. [*]. Unless requested by Sonos more frequently, IAC shall update Sonos [*] with current lead times and cancellation terms, as applicable, for all Components required to manufacture Products. Upon Sonos' request, IAC will provide documentation from the manufacturer of any Component proving the accuracy of applicable Component lead-times and cancellation terms, as applicable. + +5.4. Acknowledgment of Purchase Orders by IAC. The process describing Purchase Order acknowledgment is found in Exhibit H. If a Purchase Order shortens the Lead Time or Sonos requests an adjustment to a Purchase Order, IAC will use commercially reasonable efforts to adjust the Purchase Order or accommodate such shorter Lead Time. Any reasonable and actual costs incurred by IAC to accommodate a shorter Lead Time shall be borne by Sonos, provided that Sonos has approved such costs in advance in writing. If Sonos does not approve such costs, the Products shall be shipped no later than the originally scheduled shipment date. Page 12 of 38 *Confidential Treatment Requested + + + + + +5.5. Flexibility Guidelines. [*]. + +5.6. Delays. If IAC knows it cannot meet the ex-factory date for a given Purchase Order, IAC shall immediately notify Sonos in writing of such event. In such event, both parties will jointly develop alternatives to resolve any late delivery of Product in order to minimize adverse consequences resulting from such late delivery. If only a portion of the Product Build is available for shipment to meet the ex-factory date, IAC will notify Sonos and ship the available Products unless otherwise directed by Sonos. In the event that such delay is solely caused by IAC (an "IAC Delay"), IAC shall notify Sonos in writing [*] in advance of the change and provide a recovery plan within [*]. If the IAC Delay causes Products to ship more than [*] from the original ex-factory date, IAC shall pay for any resulting increase in the freight cost over that which Sonos would have been required to pay by the standard shipment method. + +5.7. Allocation. In the event of a reduced allocation, whether due to a Force Majeure event or otherwise, IAC shall provide Sonos and its Affiliates with written notice if it anticipates or has reason to believe that IAC's output of the Product shall not be sufficient to meet all of Sonos' and/or its Affiliates' requirements for any period. Sonos shall receive at least the same priority, with respect to IAC's allocation of production capacity and Components, as any other IAC customer. + +5.8. Duty to Fulfill Purchase Orders. IAC agrees to fulfill all Purchase Orders in accordance with the terms of this Agreement prior to the termination or cancellation of this Agreement, even if the Delivery Dates of Products under such Purchase Orders occur after the date of expiration or termination. + +5.9. Delivery. All Product Units specified in a Purchase Order shall be shipped complete, both as to quantity and overall Product contents, in accordance with the applicable Statement of Work. + +5.10. [*]. + +6.0 PRODUCT ACCEPTANCE ,INVOICING, QUARTERLY PRICING UPDATES, AND SHIPPING TERM. + +6.1. Production Line Testing and Acceptance. Acceptance for a given Product is typically governed by adherence to the applicable Quality Plan. Any Product that passes the Quality Plan is deemed accepted by Sonos, unless Sonos has indicated that it wishes to perform a separate acceptance inspection to verify compliance with the Quality Plan, in which case acceptance will be deemed to take place after satisfactory completion of such inspection. Transfer of title of Product to Sonos does not indicate acceptance by Sonos of that Product. Such acceptance, however, does not modify or otherwise limit in any respect the product warranty provided by IAC to Sonos under Section 10.2 hereof. + +6.2. Rejection. Any Product that does not meet the various tests specified in the applicable Sonos Quality Plan shall be deemed rejected. If rejected, IAC shall have the option, at its sole expense and cost, to either (i) take such remedial measures as shall be necessary to enable the Product to comply with the Sonos Quality Plan, or (ii) scrap the Product and build a replacement Product Unit that conforms to the Quality Plan. IAC shall make such decision in a timely manner, but in no event take longer than five (5) working days to reach such decision, so that the overall progress of the Product Build is not delayed. Under no circumstances will Sonos be obligated to pay for any Product (or any Components incorporated therein) that has not passed the applicable Quality Plan. + +6.3. Invoicing. Upon transfer of title of Product to Sonos and compliance with the process described by Exhibit H, IAC shall invoice Sonos with reference to the governing Purchase Order and Sonos shall pay such invoice in accordance with the payment terms described in Section 7.5. Page 13 of 38 *Confidential Treatment Requested + + + + + +Concurrent with the submission of the invoice, IAC shall transmit to Sonos the executed bill of lading and/or other shipping documents or statement for the Products. All invoices under this Agreement shall be subject only to the terms and conditions hereof. Sonos shall not be bound by any term or condition on an invoice that is inconsistent with this Agreement or any of its exhibits except to the extent mutually agreed in writing by the parties. In the event the terms of any such invoice or similar document conflict with or are additional to the terms of this Agreement, the terms of this Agreement alone shall apply and shall govern regardless of execution of such document by one or both parties. + +6.4. [*] Pricing Updates. [*], Sonos and IAC shall apply the cost model formula described in Exhibit G to determine a price for each Product that will be applied to invoices [*]. [*]. In order to capture the latest prices for Components [*], IAC shall provide Sonos with the BOM cost for each Product no later than [*]. Sonos will review the BOM cost data and the Parties will work in good faith to resolve any discrepancies and update their respective systems with the agreed upon Product pricing [*]. + +6.5. Shipping Term; Title and Risk of Loss. Unless otherwise specified to the contrary on a Purchase Order (and subsequently acknowledged in writing by IAC), shipping terms are [*] and include all elements of the INCOTERMS 2010 definition with the following modifications: + +[*] + +7.0 PRICES; PAYMENT TERMS. + +7.1. Product Prices. Unless otherwise mutually agreed, the price to be paid by Sonos for any Product manufactured by IAC hereunder will be quoted based on the calculation of the pricing formula described in Exhibit G and the Shipping Term described by Section 6.5. Subject to Section 7.6, the Price for any given Product shall be governed by the pricing formula set forth in Exhibit G and based on pricing formula inputs that are applicable on the date a Product is manufactured by IAC. In cases where a Product's price paid by Sonos is not equal to the applicable pricing formula calculation, the difference will be settled by the PPV process described herein. [*]. + +7.1.1. Items Specifically Excluded from Price and/or Pricing Formula. The parties agree that the following items shall not be charged to Sonos in the Price of any Product, whether separately itemized or amortized into an item of the Pricing Formula: + +(a) [*] + +(b) [*] + +(c) [*] + +(d) [*] + +7.2. Component, Tooling and Labor Pricing Provisions. + +7.2.1. Component and Sonos Tools Pricing. [*]. + +7.2.2. Component and Sonos Tools Shipping Costs. [*]. + +7.2.3. Production Line Labor Pricing. Labor pricing for IAC operators shall be competitive in the region IAC is operating in. Actual labor pricing shall be applied by IAC in calculating Product pricing using the cost model described in Exhibit G. + +7.2.4. First Pass Yield Costs. For each Product, the Statement of Work will establish a mutually agreed upon first pass yield rate. [*] allocation of costs shall be as follows: Page 14 of 38 *Confidential Treatment Requested + + + + + +Cause of Yield Loss Responsible Party [*] [*] [*] [*] [*] [*] [*] [*] + +7.3. Sonos Tools. To the extent that Sonos requires the creation or procurement of a Sonos Tool, Sonos shall pay IAC by [*] upon acceptance of the invoice provided by IAC in accordance with Exhibit H and/or other applicable SOW, which acceptance may not be unreasonably withheld. [*]. Upon payment to IAC, Sonos shall take full title and ownership of the applicable Sonos Tool, including any specifications associated with the Sonos Tool. IAC will execute any documents necessary to document or perfect Sonos' ownership of the Sonos Tool. If the Sonos Tool is created by an IAC Subcontractor, IAC shall secure such ownership rights in accordance with its responsibilities specified in Section 13.1 of the Agreement. [*]. IAC will hold the Sonos Tools as a bailee only and will not permit any lien or other encumbrance to be placed against it when in IAC's care, custody and control. IAC will apply Sonos asset tags provided by Sonos to all Sonos Tools. Under no circumstances will IAC move Sonos Tools from the location designated by Sonos, without Sonos' prior written consent, or deny Sonos access to the Sonos Tools. Immediately upon Sonos' request or termination of this Agreement, IAC will deliver the Sonos Tools to [*]. IAC agrees to return the Sonos Tools in the same condition it was provided to IAC, except for normal wear and tear. IAC agrees to use Sonos Tools solely for Sonos' benefit. IAC will not use Sonos Tools for any other purpose or permit a third party to use the Sonos Tools except as set forth in this Agreement. The Sonos Tools provided by Sonos is provided to IAC "as is" and Sonos disclaims all warranties, express or implied, including the implied warranties of merchantability and fitness for a particular purpose. Sonos reserves the right to inspect any Sonos Tools in IAC's control at any time, provided it gives IAC at least forty-eight (48) hours advance notice. Sonos shall not be required to pay for any tool, equipment, fixture, jig or similar item that is not a Sonos Tool. + +7.3.1. Sonos Tool Maintenance; Damaged Sonos Tool. IAC agrees to use commercially reasonable efforts to maintain Sonos Tools in good, satisfactory working condition and to keep Sonos Tools fully covered under IAC's property insurance at all times and without expense to Sonos. IAC will be responsible for physical loss of or damage to the Sonos Tools while in the possession or control of IAC. IAC is solely responsible for installing, testing, and maintaining Sonos Tools in its control in good working condition and in compliance with applicable manufacturing specifications, for purchasing and maintaining spare parts to repair such Sonos Tools with a minimum of downtime, and for any risk of loss in connection with the Sonos Tools. Normal maintenance of Sonos Tools will be at Sonos' expense. In the event that a Sonos Tool is damaged beyond what is considered normal wear and tear, it shall be the responsibility of IAC or its designated suppliers to notify Sonos within one (1) working day. It shall be the [*] responsibility of [*] to bear the full repair or replacement cost of a damaged Sonos Tool, [*]. All Sonos Tool repairs shall be made to the satisfaction of applicable manufacturing specifications. + +7.4. Taxes. All Prices are in U.S. dollars and do not include withholding taxes and the like. [*]. All other items of tax based in whole or in part on the income of a party shall be the sole responsibility of such party. [*]. + +7.5. Product Payment Terms. Payment terms are [*] from the date of acceptance by Sonos of an applicable invoice from IAC in accordance with Exhibit H and/or other applicable SOW, which acceptance may not be unreasonably withheld. IAC may not submit an invoice for a Product prior to Page 15 of 38 *Confidential Treatment Requested + + + + + +that Product's transfer of title to Sonos. All payments shall be made in U.S. currency, unless otherwise agreed in writing by the parties, by check or wire transfer (as may be agreed upon by the parties) to an account designated by IAC. Invoices for shall be remitted to: Sonos, Inc., Attn: Accounts Payable, 223 E. De La Guerra Street, Santa Barbara, CA, 93101, USA, and shall also sent by electronic mail on the date of the invoice to: [*]. Any alteration to the payment terms must be mutually agreed in writing by the Parties. + +7.6. On-Going Cost Reductions. [*] shall use commercially reasonable efforts to achieve on-going reductions in the costs of the BOM for each Product. [*]. + +7.6.1. [*]. + +7.7. Cost Calculation Process and Review. [*], IAC and Sonos shall meet to review any changes that have occurred in the total cost for each Product since the prior review and according to the cost model formula described in Exhibit G. [*]. + +7.8. Purchase Price Variance (PPV). Consistent with Section 6.4 of this Agreement, Sonos and IAC shall compare the cost model formula results between the invoiced pricing for Products [*] and the actual cost data that applied to the formula for the period. [*] Additionally, IAC and Sonos may agree to settle other costs that are incurred [*] in the next PPV calculation. Based on the results of the PPV calculation, the Parties will execute a credit or debit (positive or negative) memo for the entire Purchase Price Variance amount to be applied against the next payment(s) made by Sonos. IAC agrees to provide Sonos with any requested documentation relevant to the PPV calculation, including but not limited to copies of invoices from Components suppliers. + +7.9. Component Procurement, Supply Management, Component Buffer Inventory, and Excess Components. Sonos desires to empower IAC to place Component purchase orders and otherwise manage the Component supply chain necessary to execute the on-time manufacture and shipment of Products. IAC shall be responsible to maintain accurate and up to date Component Lead Times and cancellation terms for all Components required to manufacture Products, and to place purchase orders for all Components according to Component Lead Times and the most recent Sonos Purchase Orders and Rolling Forecast. For Components that more than one supplier is qualified for usage in Products ("multi-sourced Components"), IAC shall execute Component purchase orders according to the volume share instruction given by Sonos. For such multi-sourced Components, IAC and Sonos shall agree to a process to, on [*], review and revise according to Sonos' instruction the purchase order volume share to be placed by IAC between qualified Component suppliers. In the event of a change in quantities of Products in a Sonos Purchase Order or Rolling Forecast, IAC shall respond quickly to adjust its purchase orders for all Components and to confirm revised supply plans with all Component suppliers. Within [*] of receiving a new Sonos Rolling Forecast, IAC shall review Product manufacturing capacity and Component availability and provide Sonos a written shipment commitment plan (including shipment quantities by date). This plan should meet Sonos' latest Rolling Forecast unless Product manufacturing capacity or Component availability does not support the Rolling Forecast, in which case the Parties will work together to resolve such issues. Unless Sonos otherwise instructs IAC in writing, IAC shall not reduce or cancel purchase orders on any other Components due to such Component shortage. In the event that IAC notifies Sonos that it is in possession of Excess Components, (and subject to the maximum liability parameters set forth in Exhibit C), IAC will use commercially reasonable efforts to reduce its inventory of Excess Components, including, without limitation, returning such Excess Components to the supplier, using such Components for IAC's support and repair obligations, selling the Excess Components (subject to the limitations in this section) and/or using the Excess Components for other Products or the products of other customers of IAC or an IAC Affiliate. [*]. If IAC can only sell an Excess Component at a loss, it must obtain prior written authorization from Sonos for such sale, Page 16 of 38 *Confidential Treatment Requested + + + + + +unless the aggregate amount of the loss Sonos would incur is [*]. Unless otherwise instructed by Sonos in writing, IAC is not authorized at any time to sell Custom Components to any third party or IAC Affiliate. [*], IAC shall send to Sonos a written report detailing any remaining Excess Components. If requested by Sonos, IAC agrees to provide all documentation (purchase order date, quantity ordered, Component lead-time, etc.) supporting IAC's determination that the inventory is considered Excess Components. [*]. In the event Sonos instructs IAC to scrap any Components, IAC shall notify Sonos at least twenty-four (24) hours in advance of scrapping the Components and Sonos reserves the right to witness such scrap. + +7.9.1. Component Buffer Inventory. IAC agrees to maintain [*] of buffer inventory for Components to support possible short lead time increases in Product quantities. The [*] of Component inventory is IAC's responsibility to manage, and can be achieved through any one of the following methods: 1) [*] 2) [*] 3) [*] + +The Component buffer inventory amount shall be calculated by [*]. As this [*] increases or decreases, IAC will manage the Component buffer inventory up or down as required. All Component inventories will be utilized by IAC for the manufacture of Products on a [*] basis. For Component buffer inventory stored at a Component supplier factory, Sonos and IAC shall develop a process to regularly validate that the correct levels of Component buffer inventory are in fact in place. [*]. As a Product approaches end of life, Sonos will instruct IAC in writing to reduce or eliminate all Component buffer inventories in order to minimize the risk of an Excess Component occurrence. + +7.9.2. Clear to Build Reporting. On a [*] basis and covering at least [*] of the then-current Sonos Rolling Forecast, IAC shall provide Sonos with a written "Clear to Build" report for each Product. This report shall include each Component required for that Product and incorporate each Component supplier's supply commitment to IAC. The report shall compare the supplier supply commitments to IAC's Component requirements in order to meet the current Rolling Forecast. While the detailed format of the report will be agreed between Sonos and IAC, the intent of the Clear to Build report is to proactively highlight potential Component supply shortages so that they can be resolved in advance of becoming an impact to IAC's manufacture of Products. IAC agrees, if requested by Sonos, to publish an updated Clear to Build report more frequently than [*] during periods where significant Component shortage risks are present. + +7.9.3. Component Discontinuance Purchase. In the event IAC or Sonos receives a manufacture discontinuance or end of life notice for a Component and the Component being discontinued does not have a replacement or substitute approved by Sonos prior to the last time buy date from the manufacturer, IAC agrees to purchase and store such discontinued Component during the term of this Agreement at a quantity specified in writing by Sonos and a Sonos PO is placed on IAC for the specified Component quantity. [*]. + +7.10. Audit Right. During the term of this Agreement, and for a period of [*] thereafter, IAC shall keep accurate and complete records of any items that are used in calculating a payment obligation of Sonos. No more than once per year during the Term, Sonos shall have the right, [*], to examine and audit IAC's books and records related to Sonos [*]. In the event such records are stored electronically Page 17 of 38 *Confidential Treatment Requested + + + + + +on a system that IAC cannot give Sonos access to, IAC will provide print-outs of the requested documents. [*]. Any such audit will be conducted in a manner that does not unreasonably interfere with IAC's business activities. [*]. Sonos agrees that IAC may take reasonable precautions to preserve the identity of any IAC customer that might otherwise be compromised during such an audit. + +8.0 NPI; FUTURE PRODUCTS + +8.1. New Production Introduction. The outline of the New Product Introduction process is set forth on Exhibit D hereto, and shall be the basis for how existing Products or Future Products are prepared for Mass Production. + +8.2. Statements of Work. As specified in Exhibit D, Sonos and IAC will formally add Products to this Agreement by executing a Statement of Work. Each party shall use its best reasonable effort to agree upon and sign the Statements of Work within a reasonable period of time. Unless a Statement of Work specifically refers to and amends a term of this Agreement, the terms and conditions of this Agreement will control and take precedence over any conflicting terms in a Statement of Work. If any Future Product becomes a Product prior to a Statement of Work being signed for that Product, the terms of this Agreement shall still apply to that Product. + +8.3. Quality Plan. A Quality Plan will be created by the Parties for each Product and included in the applicable Statement of Work. The Quality Plan shall include in detail and where applicable: (a) All manufacturing and test process details, (b) All process variables and their control methods, (c) statistical process control methods used for monitoring and improvements, (d) quality and performance targets to be achieved as specified by Sonos, and (e) the necessary corrective actions planned. Each Quality Plan will be developed and owned jointly between the Parties, but Sonos will remain the owner of the Quality Plan and has final decision making authority of its contents. + +9.0 REPAIR SERVICES; PROVISION FOR EXTENDED WARRANTY. + +9.1. Technical Assistance. Each party shall make available to the other, [*], ongoing technical assistance with respect to the Product. + +9.2. Repair Services. Pursuant to Exhibit E, IAC shall provide the RMA and repair services to Sonos upon request for a minimum of [*] from the date on which Sonos discontinues the sale of any Product on the terms and conditions set forth therein. Fees for such services, when required to be paid, shall be pursuant to the provisions in Exhibit E. It is expressly understood and agreed to by IAC that this Agreement does not grant IAC an exclusive privilege or right to repair or replace any or all Product purchased by Sonos under this Agreement. Sonos may perform the repairs or Sonos may elect to contract with other suppliers for the required repair or replacement services. + +9.3. Extended Warranty. If requested by Sonos, IAC agrees to provide extended warranty coverage, [*]. The cost of such extended warranty coverage shall be mutually agreed upon in writing by the Parties on an individual Product basis, and included in the revised Statement of Work for each specified Product. Page 18 of 38 *Confidential Treatment Requested + + + + + +10.0 REPRESENTATIONS AND WARRANTIES. + +10.1. Mutual Warranty. Each party warrants and represents to the other that (i) it has the full corporate power and authority to enter into and carry out its obligations under this Agreement, and (ii) the execution and delivery of the Agreement by such party, and the performance by such party of its obligations pursuant to the Agreement, will not result in any material violation of or constitute a default under, any material agreement or obligation to which such party is currently bound. + +10.2. Product Warranty by IAC. IAC hereby represents and warrants that for a period of [*] after the Manufacturing Date (the "Warranty Period"), a Product Unit will be free from defects in manufacturing process and defects in workmanship, will conform to general expectations of performance of wireless audio products and will conform to the Statement of Work for the applicable Product. For any Product Unit which is agreed between the Parties (such agreement to be made fairly and reasonably) to be non conforming to the above product warranty, IAC will, [*]. The warranty granted in this Section 10.2 will not apply to Product Units that have been misused, modified, damaged, abused, improperly stored (by a party other than IAC, an IAC affiliate, or an IAC subcontractor), tampered with or otherwise altered by any party other than IAC, an IAC Affiliate or an IAC Subcontractor. The above warranty is provided to Sonos as a standard warranty, [*]. If Sonos requests an extension of the Warranty Period, the parties will negotiate in good faith to determine an appropriate charge to extend the Warranty Period. + +10.3. Third Party Component Warranty by IAC. IAC hereby warrants that (i) any IAC Sourced Component shall comply with the European Union Directive 2002/95/EC on the Restriction on the Use of Certain Hazardous Substances in electrical and electronic equipment or other similar environmental regulations that IAC is aware of, and (ii) any IAC Sourced Component shall be original. IAC will pass to Sonos all Component suppliers' warranties to the extent that they are transferable. + +10.4. DISCLAMER. EXCEPT AS EXPRESSLY SET OUT IN THIS SECTION, EACH PARTY MAKES NO WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, REGARDING THE PRODUCT OR ANY SERVICES TO BE PROVIDED UNDER THIS AGREEMENT, INCLUDING ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR NON-INFRINGEMENT OR FITNESS FOR A PARTICULAR PURPOSE. + +11.0 INDEMNITY. + +11.1. Indemnification by Sonos. Subject to Section 11.4, Sonos shall defend, indemnify and hold harmless IAC and its Affiliates, and their officers, directors, employees, shareholders, agents, successors and assigns from and against any and all loss, damages, liabilities, settlements, costs and expenses (including reasonable legal expenses and the expenses of other necessary professionals) as incurred, resulting from or arising out of breach of : + +(i) any representation or warranty provided by Sonos under this Agreement. + +(ii) the gross negligence or willful misconduct of Sonos, or its employees, directors, representatives, or agents; + +(iii) Sonos's failure to observe any applicable laws, regulations and/or statutory requirements + +(iv) any product liability claim with respect to [*] other than [*]. + +11.2. Indemnification by IAC. Subject to Section 11.4, IAC agrees to defend, indemnify and hold harmless Sonos and its Affiliates, and their officers, directors, employees, shareholders, agents, successors and assigns from and against any and all loss, damages, liabilities, settlements, costs and expenses (including reasonable legal expenses and the expenses of other necessary professionals) as incurred, resulting from or arising out of (i) a manufacturing defect or any product liability claim caused by workmanship [*], or (ii) a breach of any representation or warranty provided by IAC under this Agreement. Page 19 of 38 *Confidential Treatment Requested + + + + + +11.3. Intellectual Property Infringement. + +11.3.1. Subject to Section 11.4, Sonos shall defend, indemnify and/or settle and hold harmless IAC and its Affiliates, and their officers, directors, employees, shareholders, agents, successors and assigns from and against any and all loss, damages, liabilities, settlements, costs and expenses (including reasonable legal expenses and the expenses of other necessary professionals) as incurred, resulting from or arising out of any third party claim, action, suit or proceeding (collectively and individually, a "Claim") alleging that the Product (excluding any IAC Property) infringes any third party Intellectual Property Right, and shall pay all damages or settlement amounts finally awarded to the extent based upon such a Claim. + +11.3.2. Subject to Section 11.4, IAC shall defend, indemnify and/or settle and hold harmless Sonos and its Affiliates, and their officers, directors, employees, shareholders, agents, successors and assigns from and against any and all loss, damages, liabilities, settlements, costs and expenses (including reasonable legal expenses and the expenses of other necessary professionals) as incurred, resulting from or arising out of any Claim alleging that the IAC Property or use thereof infringe any third party Intellectual Property Right, and shall pay all damages or settlement amounts finally awarded to the extent based upon such a Claim. + +11.4. Procedure. The party seeking relief under this Section 11 ("Indemnitee") shall: (i) promptly notify the other party ("Indemnitor") in writing of any Claim; (ii) provide Indemnitor with sole control of the defense and/or settlement thereof; and (iii) provide Indemnitor, at Indemnitor's request and expense, with reasonable assistance and full information with respect thereto. Indemnitee shall have the right to participate, at its own expense, with counsel of its own choosing in the defense and/or settlement of such Claim. The indemnification obligations of the parties in this Section 11 shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the consent of Indemnitor, which consent shall not be unreasonably withheld or delayed. The failure to deliver written notice to Indemnitor within a reasonable time after the commencement of any Claim, if prejudicial to its ability to defend such Claim, shall relieve Indemnitor of any liability to Indemnitee under this Section 11. + +11.5. Pass-Through of Indemnities. If a party becomes the subject of a Claim of infringement with respect to a Third Party Component, to the extent the other party has the right to pass through an indemnity with respect to such Third Party Component, such other party shall pass through the indemnity to the party that is the subject of the Claim. + +12.0 CONFIDENTIALITY. + +12.1. Definition. "Confidential Information" shall mean any information that is transmitted or otherwise provided by or on behalf of the disclosing party, whether orally or in writing, to the receiving party during the course of its performance under this Agreement which is identified as "Confidential" at the time of disclosure or that should reasonably have been understood by the receiving party because of legends or other markings, the circumstances of disclosure or the nature of the information itself, to be proprietary and/or confidential to the disclosing party. All IAC Property, Sonos Property and Future Products, and any information related to such Future Products, shall always be deemed to be Confidential Information of the respective party providing such information. Confidential Information may be disclosed in written or other tangible form or by oral, visual or other means, including Page 20 of 38 + + + + + +documents, computer code, prototypes, samples, plans and equipment. Confidential Information may also include information of a third party that is in the possession of one of the parties and is disclosed to the other party under this Agreement. "Confidential Information" shall not, however, include any information that (i) was publicly known and made generally available in the public domain prior to the time of disclosure by the disclosing party through no faults of the receiving party; (ii) becomes publicly known and made generally available after disclosure by the disclosing party to the receiving party through no faults of the receiving party; (iii) is already in the possession of the receiving party at the time of disclosure by the disclosing party as shown by the receiving party's files and/or records; or (iv) is obtained by the receiving party from a third party lawfully in possession of such information and without a breach of such third party's obligations of confidentiality. + +12.2. Agreement as Confidential Information. The parties shall treat the terms and conditions and the existence of this Agreement as Confidential Information. Each party shall obtain the other's consent prior to any publication, presentation, public announcement or press release concerning the existence or terms and conditions of this Agreement. Notwithstanding the foregoing, Sonos may disclose that IAC is manufacturing its Products to potential investors, partners and customers. The Parties specifically acknowledge that disclosure of this Agreement or the relationship contemplated hereby, without the prior written consent of the other party, would have a material, adverse impact on the other party's relationship with its existing manufacturing partner. + +12.3. Non-use and Non-disclosure. Each party agrees not to use any Confidential Information of the other party for any purpose except as necessary to perform its obligations under this Agreement. Each party agrees not to disclose any Confidential Information of the other party to any third party, except that, a receiving party may disclose the other party's Confidential Information to those employees of the receiving party who are required to have the information in order to perform under this Agreement and who have agreed in writing to confidentiality obligations at least as protective of the disclosing party as those set forth herein. If a receiving party is required by a final authorized order from a recognized and applicable government body or from a court with competent jurisdiction to make any disclosure that is prohibited or otherwise constrained by this Agreement, the receiving party will provide the disclosing party with prompt written notice of such requirement so that the disclosing party may seek a protective order or other appropriate relief. Subject to the foregoing sentence, such receiving party may furnish that portion (and only that portion) of the Confidential Information that the receiving party is legally compelled or is otherwise legally required to disclose; provided, however, that the receiving party provides such assistance as the disclosing party may reasonably request in obtaining such order or other relief. Neither party shall reverse engineer, disassemble or decompile any prototypes, software or other tangible objects that embody the other party's Confidential Information and that are provided to the party under this Agreement. + +12.4. Maintenance of Confidentiality. Each party agrees that it shall take reasonable measures to protect the secrecy of and avoid disclosure and unauthorized use of the Confidential Information of the other party. Without limiting the foregoing, each party shall take at least those measures that it takes to protect its own confidential information of a similar nature, but in no case less than reasonable care (including, without limitation, all precautions the receiving party employs with respect to its own confidential materials). No party shall make any copies of the other party's Confidential Information except upon the other party's prior written approval. Each party shall reproduce the other party's proprietary rights notices on any such authorized copies, in the same manner in which such notices were set forth in or on the original or otherwise that can clearly express the other party's proprietary rights. A party receiving Confidential Information shall promptly notify the party disclosing such Confidential Information of any use or disclosure of such Confidential Information in violation of this Agreement of which the receiving party becomes aware. Confidentiality shall be maintained for a period of [*] after expiration of this Agreement. Page 21 of 38 *Confidential Treatment Requested + + + + + +12.5. IAC's Manufacturing Lines Building Sonos Products. With the exception of authorized contractors approved by the Parties required to perform equipment maintenance or other required work on IAC's manufacturing lines that are assembling and testing Sonos Products, no third party personnel will be allowed access to (including a walk-through or tour) IAC's lines that are manufacturing Products. Any exceptions to this must be approved in advance and in writing between a Sonos Program Manager and IAC Program Manager listed in Exhibit B. + +13.0 USE OF CONTRACTORS; COMPLIANCE WITH LABOR LAWS. + +13.1. IAC may retain IAC Subcontractors to furnish services to it in connection with the performance of its obligations hereunder and, if required, permit such IAC Subcontractors to have access to Sonos' Confidential Information, provided that such IAC Subcontractors have signed agreements with IAC with restrictions on the use and dissemination of such information at least as restrictive as the confidentiality provisions contained herein. Before engaging any IAC Subcontractor, IAC shall first notify and get written approval from Sonos for the use of such IAC Subcontractor. Sonos shall not unreasonably delay or withhold such approval. IAC represents and warrants that the quality of the services and/or work product of any IAC Subcontractor shall be of at least the same quality as the services and/or work product delivered by IAC hereunder. In addition, IAC shall secure any and all Intellectual Property Rights that may pertain to the Sonos Products that are created by such IAC Subcontractor, and hereby transfers and assigns all such Intellectual Property Rights. IAC agrees that it will not prohibit Sonos from purchasing Components or Sonos Tools directly from any IAC Subcontractor, using existing terms or on terms established between Sonos and such IAC Subcontractor. + +13.2. No Product will be (i) produced, manufactured, assembled, tested, or packaged by forced, prison, or child (defined as age 14 or below or the minimum working age within the applicable jurisdiction, whichever is older) labor, or (ii) transshipped for the purpose of mislabeling, evading quota or country of origin restrictions, or avoiding compliance with labor laws. + +13.3. IAC and all persons furnished by IAC shall comply at their own expense with all applicable Environmental, Occupational Health and Safety laws, ordinances, regulations and codes, including the identification and procurement of required permits, certificates, licenses, insurance, approvals and inspections in performance under this Agreement. + +14.0 LIMITATION OF LIABILITY. + +EXCEPT IN THE EVENT OF A VIOLATION OF SECTION 3 (OWNERSHIP; GRANT OF RIGHTS: TRADEMARKS USAGE), OR FOR EACH PARTY'S OBLIGATIONS UNDER SECTION 11 (INDEMNITY), OR BREACH OF SECTION 12 (CONFIDENTIALITY), UNDER NO CIRCUMSTANCES WILL EITHER PARTY BE LIABLE TO THE OTHER UNDER ANY CONTRACT, STRICT LIABILITY, NEGLIGENCE OR OTHER LEGAL OR EQUITABLE THEORY, FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES OR LOST PROFITS IN CONNECTION WITH THE SUBJECT MATTER OF THIS AGREEMENT. EXCEPT IN THE EVENT OF A VIOLATION OF SECTION 3 (OWNERSHIP; GRANT OF RIGHTS: TRADEMARKS USAGE), OR FOR EACH PARTY'S OBLIGATIONS UNDER SECTION 11 (INDEMNITY), OR BREACH OF SECTION 12 (CONFIDENTIALITY), IN NO EVENT SHALL EITHER PARTY'S TOTAL LIABILITY ARISING OUT OF OR RELATED TO THIS AGREEMENT EXCEED THE AMOUNTS PAID BY SONOS FOR THE PRODUCTS IN THE [*] PERIOD IMMEDIATELY PRECEDING THE EVENT GIVING RISE TO THE LIABILITY. THIS SECTION DOES NOT LIMIT EITHER PARTY'S LIABILITY FOR PERSONAL INJURY, DEATH, OR DAMAGE TO TANGIBLE PROPERTY. Page 22 of 38 *Confidential Treatment Requested + + + + + +15.0 TERM AND TERMINATION. + +15.1. Term. Unless terminated earlier as provided herein, this Agreement shall terminate on the date three (3) years from the Effective Date. This Agreement shall be automatically renewed for additional successive one (1) year periods, unless written notice of non-renewal is received no later than six (6) months prior to the expiration of the then current term. + +15.2. Termination for Cause. This Agreement may be terminated by a party for cause immediately upon the occurrence of and in accordance with the following: + +15.2.1. Insolvency Event. Either party may terminate this Agreement by delivering written notice to the other party upon the occurrence of any of the following events: (i) a receiver is appointed for any party or its property; (ii) any party makes a general assignment for the benefit of its creditors; (iii) any party commences, or has commenced against it, proceedings under any bankruptcy, insolvency or debtor's relief law, which proceedings are not dismissed within sixty (60) days; or (iv) any party is liquidated or dissolved. + +15.2.2. Default. Either party may terminate this Agreement effective upon written notice to the other if the other party violates any material covenant, agreement, representation or warranty contained herein in any significant respect or defaults or fails to perform any of its obligations or agreements hereunder in any material respect, which violation, default or failure is not cured within thirty (30) days after notice thereof from the non-defaulting party stating its intention to terminate this Agreement by reason thereof. + +15.3. Termination for Convenience. Either Party may terminate this Agreement hereunder for any reason at its convenience upon one hundred eighty (180) days prior written notice. In such case, Sonos' sole liability shall be limited to payment of the amount due under this Agreement, all the Component(s) procured by IAC, and any finished and work-in-process Products provided such Components and Products liabilities were incurred in compliance with this Agreement. + +15.4. Termination or Expiration of Agreement. For the avoidance of doubt, the termination or expiration of this Agreement shall be without prejudice to any rights or obligations which have already arisen under this Agreement, its Exhibits or any Purchase Order prior to such termination or expiration. + +15.5. Transfer. If a termination notice is delivered pursuant to 15.2, 15.3, 15.4 or if Sonos decides to transfer the manufacturing of a Product from IAC during the Term of the Agreement, IAC shall cooperate fully with Sonos to effect the transfer of the manufacturing of the Products (without any obligation that IAC transfers IAC Property from IAC to Sonos, or a third party designated by Sonos, in order to help minimize any potential disruption in the continuity of supply. In the event that such transfer is the result of a termination notice pursuant to 15.2, 15.3 or 15.4 and such transfer is not completed by the termination date pursuant to 15.2, 15.3 or 15.4, the parties shall, acting reasonably and in good faith, agree to continue to cooperate fully to effect the transfer and extend the Term of this Agreement on such appropriate terms as the parties may agree for one or more ninety (90) day periods (the succession of which must be notified to IAC in writing within thirty (30) days of the expiration of the first ninety (90) day period and within the same timeframe for each period thereafter), until such time as the transfer is completed. + +15.6. Survival of Rights and Obligations Upon Termination. Sections 1, 3.1, 3.2, 3.4, 7.10, 9.2, 9.3, 10, 11, 12, 13, 14, 15.4, 15.5, 15.6, 16 and Exhibit E shall survive termination or expiration of this Agreement. Page 23 of 38 + + + + + +16.0 MISCELLANEOUS. + +16.1. Force Majeure. Except for the obligation to make payments herein, neither party shall be liable for delays in delivery or performance of its obligations, or for failure to deliver or perform its obligations under this Agreement due to a cause or circumstances beyond its reasonable control, including, without limitation, an act of nature, act of civil, government, or military authority, act of terrorism, governmental priority, strike or other labor disturbance, flood, fire, explosion, epidemic, other hostilities, or failure of the Internet (not resulting from the actions or inactions of such party). For clarification purposes, an industry wide inability to obtain a Third Party Component is a force majeure event; however, all other material shortages shall not be considered force majeure events. The party claiming excuse because of force majeure shall use its commercially reasonable efforts to promptly correct such failure or delay in performance and shall promptly notify the other party to this Agreement of any delay or failure to perform which may be excused by this provision, which notification will also specify the expected date of resumption of performance. In the event of any such delay, the date of performance shall be extended for a period equal to the time lost by reason of the delay. If, however, either party is unable to perform its obligations under this Agreement for reasons excused by this provision for a period in excess of ninety (90) consecutive days, the other party may terminate this Agreement without penalty upon written notice to the other Party. + +16.2. No Third Party Beneficiaries. Unless otherwise expressly provided, no provisions of this Agreement are intended or shall be construed to confer upon or give to any person or entity other than Sonos and IAC any rights, remedies or other benefits under or by reason of this Agreement. + +16.3. Attorneys Fees. In addition to any other relief awarded, the prevailing party in any action arising out of this Agreement shall be entitled to its reasonable attorneys' fees and costs. + +16.4. Relationship of parties. The parties hereto are independent contractors. Neither party has any express or implied right or authority to assume or create any obligations on behalf of the other or to bind the other to any contract, agreement or undertaking with any third party. Nothing in this Agreement shall be construed to create a partnership, joint venture, employment or agency relationship between Sonos and IAC. + +16.5. Notices. Any notice required or permitted to be given by any party under this Agreement shall be in writing and shall be personally delivered or sent by a reputable overnight mail service (e.g., Federal Express), or by first class mail (certified or registered), or by facsimile confirmed by first class mail (registered or certified), to the Program Manager of the other party. Notices will be deemed effective (i) five (5) working days after deposit, postage prepaid, if mailed, (ii) the next day if sent by overnight mail, or (iii) the same day if sent by facsimile and confirmed as set forth above. A copy of any notice shall be sent to the following: + +Sonos, Inc. 223 E. De La Guerra Street Santa Barbara, CA, 93101, USA Attn: [*] Email: [*] Fax: [*] + +16.6. Assignment. No party may assign its rights or delegate its obligations hereunder, either in whole or in part, without the prior written consent of the other party, other than an assignment by Sonos or IAC of its rights and obligations hereunder to a wholly-owned subsidiary. Notwithstanding the foregoing, either party may assign, without the other's express written approval, all its rights and Page 24 of 38 *Confidential Treatment Requested + + + + + +delegate all its obligations as part of a merger, reorganization or sale of all or substantially all its assets other than to a direct competitor of the non- assigning Party. Any attempted assignment or delegation in violation of this section by either party without the prior written consent of the other will be void. The rights and liabilities of the parties under this Agreement will bind and inure to the benefit of the parties' respective successors and permitted assigns. + +16.7. Waiver and Modification. Failure by any party to enforce any provision of this Agreement will not be deemed a waiver of future enforcement of that or any other provision. Any waiver, amendment or other modification of any provision of this Agreement will be effective only if in writing and signed by the parties. + +16.8. Construction. The Parties agree that any principle of construction or rule of law that provides that an agreement shall be construed against the drafter of the agreement in the event of any inconsistency or ambiguity in such agreement shall not apply to the terms and conditions of this Agreement. Titles and headings to articles and sections of this Agreement are inserted for convenience of reference only and are not intended to affect the interpretation or construction of this Agreement. The terms "this Agreement," "herein," "hereof," "hereunder" and similar expressions refer to this Agreement and not to any particular section or other portion hereof. Unless otherwise specified, "days" means calendar days. Any use of the term "including" in this Agreement shall be construed as if followed by the phrase "without limitation." + +16.9. Severability. If for any reason a court of competent jurisdiction finds any provision of this Agreement to be unenforceable, that provision of the Agreement will be enforced to the maximum extent permissible so as to affect the intent of the parties, and the remainder of this Agreement will continue in full force and effect. + +16.10. Dispute Settlement; Governing Law. Any dispute or claim arising out of or in relation to this Agreement, or the interpretation, making, performance, breach or termination thereof, shall first be referred to the responsible executives of each party, each of whom shall use their best reasonable efforts in good faith to reach a mutually agreeable solution. If the parties are unable to resolve the dispute or claim despite such efforts, the dispute or claim shall be settled by binding arbitration under the International Rules of the American Arbitration Association as presently in force ("Rules") and by three (3) arbitrators appointed in accordance with such Rules. Judgment on the award rendered may be entered in any court having jurisdiction thereof. The place of arbitration shall be Los Angeles, California USA. Any monetary award shall be in U.S. dollars and the arbitration shall be conducted in the English language. The parties may apply to any court of competent jurisdiction for temporary or permanent injunctive relief, without breach of this Section 16.10 and without any abridgment of the powers of the arbitrator. + +This Agreement shall be governed by the law of California, U.S.A. and the arbitrators shall apply California law to the merits of any dispute or claim, without reference to conflict of law principles. The arbitration proceedings shall be governed by federal arbitration law and by the Rules, without reference to state arbitration law. The parties hereby exclude the application of the United Nations Convention on Contracts for the International Sale of Goods + +16.11. Entire Agreement. This Agreement, including all exhibits which are incorporated herein by reference, constitutes the entire agreement between the parties with respect to the subject matter hereof, and supersedes and replaces all prior and contemporaneous understandings or agreements, written or oral, regarding such subject matter. + +16.12. Counterparts. This Agreement may be executed in two counterparts, each of which shall be an original and together which shall constitute one and the same instrument. Page 25 of 38 + + + + + +16.13. Insurance Coverage. [*] will have insurance policies with reputable insurers to provide coverage and amounts that secure its obligations and potential liabilities under this Agreement. [*] is responsible for all premiums, deductibles and retentions for such insurance. After this Agreement expires or terminates, [*] will either have an active policy or purchase an extended reporting period that has coverage for claims first made and reported to the insurer within 2 years after this Agreement expires or terminates. These insurance requirements will not limit [*] liability under this Agreement. Page 26 of 38 *Confidential Treatment Requested + + + + + +IN WITNESS WHEREOF, the parties hereto have executed this Agreement by persons duly authorized as of the date and year first above written. SONOS, INC. IAC + +By: /s/ Craig Shelburne By: /s/ Joyce Chang Name: Craig Shelburne Name: Joyce Chang Title: Title: Page 27 of 38 + + + + + +Exhibit A + +Statement of Work for each transfer or future Sonos Product will be attached as part of Exhibit A. (to be added later, should not hold up contract signature) + +Exhibit A-1 PLAY:1 Statement of Work + +Exhibit A-2 Next transfer or future program. Page 28 of 38 + + + + + +Exhibit B + +Program Managers + +Sonos, Inc. Name Title Telephone and E-mail + +[*] Senior Factory Program Manager Cell: [*] [*] + +[*] Factory Program Manager Cell: [*] [*] + +[*] Factory Program Manager Cell: [*] [*] + +IAC: Name Title Telephone and E-mail + +Planning Manager(s) + +Sonos, Inc. Name Title Telephone and E-mail + +[*] Senior Operation Manager Cell: [*] [*] + +[*] Planning Manager Cell: [*] [*] + +[*] Planning Manager Cell: [*] [*] + +[*] Planning Manager Cell: [*] [*] + +Address : + +Suite 802, Tower A, Venture International Park, No. 2679 Hechuan Road, Minhang District, Shanghai, China 201103 Page 29 of 38 *Confidential Treatment Requested + + + + + +Exhibit C + +Flexibility and Cancellation Guidelines + +C.1. Purchase Orders and Rolling Forecast. Upon prior written notice by a Sonos Planning Manager to IAC, Sonos may cancel or reschedule Purchase Orders or adjust the Rolling Forecast as follows: Number of Calendar Days from Scheduled Product Shipment Date Quantity Allowed to Reschedule to a Later Date Quantity Allowed to Upside Quantity Allowed to Cancellation [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] + +C.2 Maximum Liability of Sonos; Best Efforts. In the event of a cancellation by Sonos of Purchase Orders ("cancellation") or a reduction in the Rolling Forecast quantities without rescheduling those quantities to a later date ("reduction"), IAC must [*] mitigate any losses it may suffer by reason of such cancellation or reduction. In any event, the maximum Sonos liability for such cancellation or reduction will be limited to [*], provided that [*]. Prior to payment under this section, Sonos may audit all relevant documents to ensure that actual losses reasonably approximating the Purchase Order cancellation or Rolling Forecast quantity reduction charge have been suffered by IAC as the result of the cancellation or quantity reduction. [*]. + +C.3 Upside Flexibility. In the event Sonos increases a Purchase Order or Rolling Forecast quantities with [*] notice to IAC, IAC agrees to [*] support the increased quantities. Consistent with Section 7.9.1, IAC agrees to maintain [*] of buffer Component inventories for each Product that can be applied to supporting any short lead-time Sonos requests for increased Product quantities. Page 30 of 38 *Confidential Treatment Requested + + + + + +Exhibit D + +NPI Process D.1 Future Product Specifications. [*]. D.2 Future Product Confidentiality. [*]. D.3 Development Efforts. [*]. + +Diagram 1: NPI Phase-Gate Process (Typical) + +[*] Page 31 of 38 *Confidential Treatment Requested + + + + + +Table 1: NPI Phase Description + +[*] D.4 Development Samples. [*]. D.5 Design Verification Testing. [*]. D.6. IAC's NPI Responsibilities. [*]. + +Table 2. Contract Manufacturer NPI Responsibility + +[*] + +D.7. Sonos Tools. To the extent that Sonos requires the creation or procurement of a Sonos Tool, Sonos shall pay IAC for the cost of such Sonos Tool [*]. IAC shall invoice Sonos at least [*] prior to such date, or on the date the Sonos Tool is accepted by Sonos if IAC has created the Sonos Tool itself. Prior to acceptance, all specifications and assembly drawings should be provided to Sonos for review. Upon payment to IAC, Sonos shall take full title and ownership of the applicable Sonos Tool, including any specifications and final assembly drawings associated with the Sonos Tool. If the Sonos Tool is created by an IAC Subcontractor, IAC shall secure such ownership rights in accordance with its responsibilities specified in Section 13.1 of the Agreement. + +D.8 Reports. As appropriate, each party shall provide the other with periodic reports detailing its work on a Product, any anticipated problems and any indication of delay in fixed or tentative schedules. At a minimum, the Program Managers shall meet once a week, in person or by telephone, as mutually agreed, for a formal progress presentation, describing in detail the status of work, including projections for time of completion, steps necessary to return to the schedule in case of any delay, and discussion of possible resolution of any problems which have arisen. + +D.9 NPI for Transfer Products. For Transfer Products, portions of the foregoing NPI process will apply, depending upon the complexity of the conversion of the existing manufacturing operations for the Transfer Product over to IAC. + +D.10 Charge for NPI. [*] acknowledges that unless otherwise clearly specified in this Exhibit D as being a cost that will be borne by [*], the NPI Process (for either Future Products or Transfer Products), including all services provided by IAC and/or costs incurred by IAC as set forth in this Exhibit D, are provided with reasonable charge to Sonos, if such service is not defined in an applicable SOW and/or the roles and responsibilities matrix described above in Table 2. Any such costs must be approved in advance by Sonos in writing. Page 32 of 38 *Confidential Treatment Requested + + + + + +Exhibit E + +RMA and Repair Procedures Table E.1 RMA Warranty Coverage Provisions + +Timing1 Nature of Defect Responsible Party2 Replacement Stock3 Warranty Period Coverage [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] + +E.1 Explanation of Table Footnotes. 1. [*] 2. [*] 3. [*] + +E.2 Definitions. + +[*] + +E.3 Repair Process. The following steps shall be followed by the parties: 1. [*] 2. [*] 3. [*] 4. [*] 5. [*] 6. [*] 7. [*] 8. [*] 9. [*] 10. [*] + +E.4 High Failure and Epidemic Failure Rate Procedures. In the case of either a High Failure or an Epidemic Failure, IAC's obligations shall be, within three (3) business days, to propose an action plan to fix the failure of any affected Products and to implement this action plan upon Sonos' acceptance thereof, which action plan may include sending engineers over to designated sites to repair the Defective Products. [*]. + +E.5 Shipments; Determination of Responsibility. [*]. + +E.6 Repair Cost. The cost of any repair for which Sonos is responsible (for example, because of a design defect or outside of warranty return) shall be based upon the BOM for the Components included in the repair plus labor, with mutually agreed upon repair labor rates applied. [*]. + +E.7 Repair Labor Pricing. Repair labor pricing will be agreed in writing between the Parties and will be based upon market competitive labor rates for the location(s) in which IAC is performing the repairs. Page 33 of 38 *Confidential Treatment Requested + + + + + +E.8 Repair Warranty. + +All repair work conducted within the general product warranty period specified in Section 10.2 and is performed to repair a defect that constitutes a breach of the warranties provided by IAC in Sections 10.2 or 10.3 shall carry a warranty [*]. For clarification, this repair warranty warrants that the work corrected in all respects the identified defect and does not cover other defects unrelated to the repair work that may later occur. + +All repair work conducted outside of the general product warranty period specified in Section 10.2 and all repair work conducted to correct a defect that is not covered by the warranties provided by IAC in Sections 10.2 or 10.3, shall carry a warranty of [*] that the work corrected in all respects the identified defect. For clarification, this repair warranty does not cover other defects unrelated to the repair work that may later occur. + +E.9 Repair Reporting and Status. IAC shall make available to Sonos detailed repair information for each RMA unit including but not limited to repair work performed on the unit, SA and FA test results, packaging, and shipping. The information shall be linked to the manufacturing data of the Product Unit electronically through its serial number. In addition, a summary report shall be provided to Sonos for approval of responsible party determination. The report should include, but not necessarily be limited to, Product type, Serial Number, Defect Symptoms, Analysis, Corrective actions, Suggested responsible party and status. Page 34 of 38 *Confidential Treatment Requested + + + + + +Exhibit F + +Sonos Supplier Performance Review F.1 Introduction. + +Sonos supplier management strategy is based on developing strong working relationships with its suppliers. The results Sonos seek will not occur from random sourcing or selecting suppliers solely on competitive quotations. It will result from working closely with the best existing suppliers to improve quality, productivity, cost, and all other elements of supplier performance. + +The basic strategy entails establishing mutual performance expectations and metrics, providing supplier performance feedback, initiating corrective actions to ensure continuous improvements, and rewarding the best suppliers with the opportunity for future new business. The Sonos Supplier Performance Review program provides a framework for effective communication between Sonos and its suppliers regarding the specific elements of supplier performance. The result of establishing our expectations and supplier performance feedback will ensure maximum customer satisfaction and increased profitability for all contributors to the system. To accomplish these objectives, Sonos aims to: • Establish and strengthen long-term partnerships that result in mutual success between the Parties • Set expectations and metrics that are aggressive yet realistic and achievable • Utilize a team approach to achieve performance improvements • Be open to 2-way feedback and commit ourselves to continuous improvement, just as we expect from our supply and manufacturing partners + +Successful supplier performance in the areas of Quality, Business, Engineering, Supply Chain & Operational Excellence is expected and necessary for both parties to achieve repeat business, increased sales and profitable growth. F.2 Supplier Performance Review Metrics. + +IAC must maintain a competitive advantage by providing products of the highest quality and a competitive total cost, with operations that demonstrate best in class manufacturing, quality, engineering and supply chain innovation and execution. The Parties will mutually agree in good faith upon valid performance metrics, goals, and a relevant scoring template and process. + +The Parties agree to meet [*] to review IAC's performance and scoring for the period. It is targeted to alternate meeting locations between Sonos' USA HQ office and IAC's factory. Dates and locations for such reviews will be agreed between the Parties with reasonable notice. Page 35 of 38 *Confidential Treatment Requested + + + + + +Exhibit G + +Product Pricing Formula Item Code Calculation [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] [*] G.1 Pricing Formula Definitions: + +[*] + +All inputs to the Pricing Formula should be based upon validated actual data. Sonos reserves the right to audit and measure any manufacturing or test process or cycle time, as well as review any relevant IAC documentation to verify that Product pricing is calculated accurately. Consistent with Section 6.4 of this Agreement, Sonos and IAC will review all inputs to the above Pricing Formula for each Product on a quarterly basis, and adjust Product pricing as necessary to become effective in the next quarter. Page 36 of 38 *Confidential Treatment Requested + + + + + +Exhibit H + +ERS Statement of Work + +ERS SOW to be added later Page 37 of 38 + + + + + +Exhibit I + +Engineering Change Process + +Engineering Change Process to be added later Page 38 of 38 + + + + + +[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + +SONOS, INC. + +AMENDMENT TO MANUFACTURING AGREEMENT + +September 24, 2014 + +WHEREAS, Sonos, Inc. (hereinafter "Sonos") and Inventec Appliances Corporation (hereinafter "IAC") have entered into a certain Manufacturing Agreement dated September 4, 2014 (the "Agreement"); and + +WHEREAS, both Sonos and IAC desire to modify certain terms of the Agreement as specified below. + +NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein and for other good and valuable consideration the sufficiency of which is hereby acknowledged by both parties hereto, the parties agree to amend and modify the Agreement as set forth below: 1. Section 6.5 of the Agreement is hereby replaced in its entirety with the following: + +6.5 Shipping Term; Title and Risk of Loss. Unless otherwise specified to the contrary on a Purchase Order (and subsequently acknowledged in writing by IAC), shipping terms are [*] and include all elements of the INCOTERMS 2010 definition with the following modifications: + +[*] 2. Exhibit D of the Agreement is hereby replaced in its entirety with Exhibit D attached hereto. 3. Except for terms amended, replaced or added herein, all of the provisions of the Agreement shall remain unchanged, in full force and effect. + +[Signature Page Follows] *Confidential Treatment Requested + + + + + +IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date first set forth above. INVENTEC APPLIANCES CORPORATION + +By: Name: Title: + +SONOS, INC. + +By: /s/ Craig A. Shelburne Craig A. Shelburne + + + + + +Exhibit D + +NPI Process + +D.1 Future Product Specifications. [*]. + +D.2 Future Product Confidentiality. [*]. + +D.3 Development Efforts. [*]. + +Diagram 1: NPI Phase-Gate Process (Typical) + +[*] *Confidential Treatment Requested + + + + + +Table 1: NPI Phase Description + +[*] + +D.4 Development Samples. [*]. + +D.5 Design Verification Testing. [*]. + +D.6. IAC's NPI Responsibilities. [*]. + +Table 2. Contract Manufacturer NPI Responsibility + +[*] + +D.7. Sonos Tools. To the extent that Sonos requires the creation or procurement of a Sonos Tool, Sonos shall pay IAC for the cost of such Sonos Tool [*]. IAC shall invoice Sonos at least [*] prior to such date, or on the date the Sonos Tool is accepted by Sonos if IAC has created the Sonos Tool itself. Prior to acceptance, all specifications and assembly drawings should be provided to Sonos for review. Upon payment to IAC, Sonos shall take full title and ownership of the applicable Sonos Tool, including any specifications and final assembly drawings associated with the Sonos Tool. If the Sonos Tool is created by an IAC Subcontractor, IAC shall secure such ownership rights in accordance with its responsibilities specified in Section 13.1 of the Agreement. + +D.8 Reports. As appropriate, each party shall provide the other with periodic reports detailing its work on a Product, any anticipated problems and any indication of delay in fixed or tentative schedules. At a minimum, the Program Managers shall meet once a week, in person or by telephone, as mutually agreed, for a formal progress presentation, describing in detail the status of work, including projections for time of completion, steps necessary to return to the schedule in case of any delay, and discussion of possible resolution of any problems which have arisen. + +D.9 NPI for Transfer Products. For Transfer Products, portions of the foregoing NPI process will apply, depending upon the complexity of the conversion of the existing manufacturing operations for the Transfer Product over to IAC. + +D.10 Charge for NPI. [*] acknowledges that unless otherwise clearly specified in this Exhibit D as being a cost that will be borne by [*], the NPI Process (for either Future Products or Transfer Products), including all services provided by IAC and/or costs incurred by IAC as set forth in this Exhibit D, are provided with reasonable charge to Sonos, if such service is not defined in an applicable SOW and/or the roles and responsibilities matrix described above in Table 2. Any such costs must be approved in advance by Sonos in writing. *Confidential Treatment Requested + + + + + +[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + +SONOS, INC. + +AMENDMENT TO MANUFACTURING AGREEMENT + +November 1, 2015 + +WHEREAS, Sonos, Inc. (hereinafter "Sonos") and Inventec Appliances Corporation (hereinafter "IAC") have entered into a certain Manufacturing Agreement dated September 4, 2014 (the "Agreement"); and + +WHEREAS, both Sonos and IAC desire to modify certain terms of the Agreement as specified below. + +NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein and for other good and valuable consideration the sufficiency of which is hereby acknowledged by both parties hereto, the parties agree to amend and modify the Agreement as set forth below: 1. Section 4.15 set forth below is hereby added to the Agreement following Section 4.14: 4.15 Locking Procedures. IAC represents and warrants that it shall comply with all locking and unlocking procedures communicated to IAC by Sonos for any Sonos Product. Sonos may update these procedures at any time by providing IAC with written notice of the revised procedures, and the original and revised procedures are hereby incorporated into this Agreement. The testing of Product Units shall be managed to ensure that a dev unlocked unit is relocked in preparation for storage when it is no longer actively in use, or is destroyed. No dev unlocked units shall be removed from the IAC manufacturing facility without the specific written consent of Sonos in each instance. In the event that a dev unlocked Product Unit is required to be transported outside of the IAC manufacturing facility, IAC hereby agrees that it will ensure that the Product Unit is dev relocked prior to transport. IAC shall never use a Product Unit for production if, at any point, IAC or Sonos has dev unlocked the Product Unit. 2. Section 4.16 set forth below is hereby added to the Agreement following Section 4.15: 4.16 Scrapping Procedures. IAC represents and warrants that it shall comply with all scrapping procedures communicated to IAC by Sonos for any Sonos Product. Sonos may update these procedures at any time by providing IAC with written notice of the revised procedures, and the original and revised procedures are hereby incorporated into this Agreement. 3. For purposes of Section 10.4 and 11 of the Agreement, the additional representations and warranties outlined herein shall be treated as if they are a part of Section 10 of the Agreement. + + + + + +4. Except for terms amended, replaced or added herein, all of the provisions of the Agreement shall remain unchanged, in full force and effect. + +[Signature Page Follows] + + + + + +IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date first set forth above. INVENTEC APPLIANCES CORPORATION + +By: Name: Title: + +SONOS, INC. + +By: /s/ Craig A. Shelburne Craig A. Shelburne + + + + + +[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + +SONOS, INC. + +AMENDMENT TO MANUFACTURING AGREEMENT + +October 1, 2017 + +WHEREAS, Sonos, Inc. (hereinafter "Sonos") and Inventec Appliances Corporation (hereinafter "IAC") have entered into a certain Manufacturing Agreement dated September 4, 2014, as amended (the "Agreement"); and + +WHEREAS, both Sonos and IAC desire to modify certain terms of the Agreement as specified below. + +NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein and for other good and valuable consideration the sufficiency of which is hereby acknowledged by both parties hereto, the parties agree to amend and modify the Agreement as set forth below: 1. Section 1.12 is hereby replaced in its entirety with the following: 1.12 "Delivery Date" means the date that a Product Build (or portion thereof) is presented for acceptance by a Designated Carrier at the IAC Manufacturing Facility. 2. Section 6.5 of the Agreement is hereby replaced in its entirety with the following: + +6.5 Shipping Term; Title and Risk of Loss. Unless otherwise specified to the contrary on a Purchase Order (and subsequently acknowledged in writing by IAC), shipping terms are [*], and include all elements of the INCOTERMS 2010 definition, subject to the specifics outlined in the table presented below. + +[*] + +Upon completion of its responsibilities above and delivery to the Designated Carrier, title will transfer to Sonos and IAC may submit an invoice for payment in accordance with Section 7.5. 3. Section 7.5 of the Agreement is hereby replaced in its entirety with the following: + +7.5. Product Payment Terms. Payment terms are [*] from the date of acceptance by Sonos of an applicable invoice from IAC, which acceptance may not be unreasonably withheld. IAC may not submit an invoice for a Product prior to that Product's transfer of title to Sonos. All payments shall be made in U.S. currency, unless otherwise agreed in writing by the parties, by check or wire transfer (as may be agreed upon by the parties) to an account designated by IAC. Invoices for shall be remitted to: Sonos, Inc., Attn: Accounts Payable, 614 Chapala St., Santa Barbara, CA, 93101, USA, and shall also sent by electronic mail on the date of the invoice to: [*]. Any alteration to the payment terms must be mutually agreed in writing by the Parties. *Confidential Treatment Requested + + + + + +4. Except for terms amended, replaced or added herein, all of the provisions of the Agreement shall remain unchanged, in full force and effect. + +[Signature Page Follows] + + + + + +IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date first set forth above. INVENTEC APPLIANCES CORPORATION + +By: Name: Title: + +SONOS, INC. + +By: /s/ Craig A. Shelburne Craig A. Shelburne Secretary \ No newline at end of file diff --git a/full_contract_txt/SoupmanInc_20150814_8-K_EX-10.1_9230148_EX-10.1_Franchise Agreement1.txt b/full_contract_txt/SoupmanInc_20150814_8-K_EX-10.1_9230148_EX-10.1_Franchise Agreement1.txt new file mode 100644 index 0000000000000000000000000000000000000000..09d09db0c8583fffa110fd1ba349b5ad54f4c58a --- /dev/null +++ b/full_contract_txt/SoupmanInc_20150814_8-K_EX-10.1_9230148_EX-10.1_Franchise Agreement1.txt @@ -0,0 +1,533 @@ +Exhibit 10.1 + + KIOSK CONCEPTS, INC. MASTER FRANCHISE AGREEMENT THE GRILLED CHEESE TRUCK, INC. MASTER FRANCHISEE DATE OF AGREEMENT + +Source: SOUPMAN, INC., 8-K, 8/14/2015 + + + + + + + + TABLE OF CONTENTS 1. GRANT OF FRANCHISE 1 1.1 Rights Granted to You 1 1.2 Non-Exclusive Grant 2 1.3 Our Reserved Rights 2 2. OPERATION OF THE FRANCHISED BUSINESS 2 2.1 Name of Franchised Business 2 2.2 Full Time, Attention and Best Efforts 2 2.3 Modifications to System and Manuals 3 3. INITIAL AND EXTENDED TERMS 3 3.1 Initial Term 3 3.2 Options to Renew 3 3.3 Renewal of Existing Agreement 4 3.4 Continued Compliance 4 3.5 Termination at End of Term 4 4. PAYMENT OF FEES 4 4.1 Initial Franchise Fee 4 4.2 Continuing Fees Payable to Us 4 4.3 Manner of Payment 5 4.4 Interest on Overdue Amounts 5 4.5 Late Fee; Insufficient Funds Fee 6 4.6 Unit Franchise Agreements and Revenue Reports 6 4.7 Security Interest 6 4.8 Reimbursement of Monies 7 4.9 Application of Fees 7 5. YOUR OBLIGATIONS 7 5.1 Sale of Unit Franchises; Minimum Development Quota 8 5.2 Initial Training and Services for Unit Franchisees 9 5.3 Use of Proprietary Marks 10 5.4 Place of Business 10 5.5 Insurance 10 5.6 Computer Hardware and Software 11 5.7 Payment of Taxes 12 5.8 Enforcement of Unit Franchise Agreements 12 5.9 Master Franchisee Training Program 12 5.10 Additional Training; Master Franchisee Meetings 13 5.11 Supplies and Equipment 13 5.12 Compliance with Governmental Regulations and Applicable Law 13 5.13 Office Location 13 5.14 Solicitation Advertising 14 5.15 Policies and Procedures 14 5.16 Changes to the System 14 5.17 Developments are Our Property 15 5.18 Financial Statements and Updated Unit Franchise Disclosure Document 15 5.19 Our Website 15 + +i + +Source: SOUPMAN, INC., 8-K, 8/14/2015 + + + + + + + + 6. PROPRIETARY MARKS 17 6.1 Our Representations 17 6.2 Your Representations 17 6.3 Your Acknowledgments 18 6.4 Changes in Law Affecting Proprietary Marks 19 7. NON-COMPETITION 20 7.1 Restrictions 20 7.2 Independent Covenants 20 7.3 Reduction of Scope 20 7.4 No Defense 20 7.5 Irreparable Injury 20 7.6 Additional Parties 20 8. MANUALS AND CONFIDENTIAL INFORMATION 21 8.1 Use of Manuals 21 8.2 Confidentiality of Information 21 8.3 Irreparable Injury from Disclosure of Confidential Information 21 8.4 Confidentiality Covenants from Individuals Associated with You 21 9. OUR OBLIGATIONS 22 9.1 Manuals and Assistance 22 9.2 Training Program 22 9.3 Advice and Assistance 22 9.4 Proprietary Marks 22 9.5 Advice 22 10. DEFAULT AND TERMINATION 22 10.1 Termination in the Event of Bankruptcy or Insolvency 22 10.2 Termination with Notice and Without Opportunity to Cure 23 10.3 Termination with Notice and Opportunity to Cure 24 10.4 Cross-Default 24 10.5 Our Right to Discontinue Services to You 25 10.6 Termination of This Agreement by You 25 10.7 Without Prejudice 25 10.8 Amendment Pursuant to Applicable Law 25 11. OBLIGATIONS UPON TERMINATION OR EXPIRATION 26 11.1 Cessation of Business 26 11.2 Cessation of Use of Confidential Information and Proprietary Marks 26 11.3 Cancellation of Assumed Name Registration 26 11.4 Payment of Monies Due; Liquidated Damages 26 11.5 Costs to Secure Compliance 27 11.6 Return of Manuals and Other Confidential Information 27 11.7 Irreparable Injury to Us 27 11.8 Compliance with Post-Term Covenants 27 12. TRANSFER OF INTEREST 27 12.1 Transfer by Us 27 12.2 Transfer by You 28 12.3 Granting of a Security Interest by You 28 + +ii + +Source: SOUPMAN, INC., 8-K, 8/14/2015 + + + + + + + + 12.4 Transfer Upon Death or Disability 28 12.5 Non-waiver of Claims 29 12.6 Transfer by You in Bankruptcy - Right of First Refusal 29 13. UNIT FRANCHISEES 29 13.1 Form of Unit Franchise Disclosure Document and Unit Franchise Agreement 29 13.2 Unit Franchise Disclosure Document and Unit Franchise Agreement Amendments 30 13.3 Use of Proprietary Marks 30 13.4 Effect of Termination of This Agreement 30 13.5 Unit Franchise Refund Policy 30 14. INDEPENDENT CONTRACTOR AND INDEMNIFICATION 30 14.1 No Fiduciary Relationship 30 14.2 Public Notice of Independent Status 31 14.3 Independent Contractor 31 14.4 Indemnification 31 15. APPROVALS, WAIVERS AND NOTICES 32 15.1 Obtaining Approvals 32 15.2 No Waiver 32 15.3 Notices 32 16. ENTIRE AGREEMENT; SEVERABILITY AND CONSTRUCTION 33 16.1 Entire Agreement 33 16.2 Severability and Construction 33 16.3 Survival of Obligations After Expiration or Termination of Agreement 34 16.4 Survival of Modified Provisions 34 16.5 Captions 34 16.6 Responsibility 34 16.7 Corporation, Partnership or Limited Liability Company 35 17. APPLICABLE LAW 35 17.1 Choice of Law 35 17.2 Non-Binding Mediation 36 17.3 Venue 36 17.4 Non-exclusivity of Remedy 36 17.5 Right to Injunctive Relief 36 17.6 Incorporation of Recitals 36 18. SECURITY INTEREST 37 18.1 Collateral 37 18.2 Indebtedness Secured 37 18.3 Additional Documents 37 18.4 Possession of Collateral 37 18.5 Our Remedies in Event of Default 37 18.6 Special Filing as Financing Statement 38 19. ACKNOWLEDGMENTS 38 19.1 Recognition of Business Risks 38 19.2 Receipt of Franchise Disclosure Document 38 + +iii + +Source: SOUPMAN, INC., 8-K, 8/14/2015 + + + + + + + + 19.3 Review of Agreement 38 19.4 Attorneys' Fees 38 19.5 Atypical Arrangements 38 19.6 Limitation of Adjudicative Proceedings 39 19.7 Trial by Jury 39 19.8 Punitive or Exemplary Damages 39 19.9 Additional Documents 39 19.10 Counterparts 39 ATTACHMENTS : A - Master Territory and Commencement Date B - Guarantees of Master Franchise Agreement C - Multi-State Addendum D - Confidentiality and Non-Competition Agreement E - Minimum Development Quota + +iv + +Source: SOUPMAN, INC., 8-K, 8/14/2015 + + + + + + + + KIOSK CONCEPTS, INC. MASTER FRANCHISE AGREEMENT AGREEMENT made as of the _____ day of __________________, 2015 (the "Effective Date") by and between Kiosk Concepts, Inc., a New York corporation having its principal place of business at 1110 South Avenue, Staten Island, New York 10314 ("we", "us" or "our"), and The Grilled Cheese Truck, Inc., a Nevada corporation having its principal address at 151 North Nob Hill Road, Suite 321, Fort Lauderdale, FL 33324 ("you" or "your"), with reference to the following facts: A. We are in the business of franchising outlets that sell proprietary gourmet soups, chilis, stews, desserts, wraps and non-proprietary products like salads, sandwiches, specialty coffees, soft drinks and other beverages under the name and trademark "The Original Soupman", together with any trademarks, trade names, service marks, slogans and logos which may be authorized in writing by us from time to time (collectively the "Proprietary Marks"). We have developed and used, and continue to use and control, the Proprietary Marks so as to impart to the public superior standards of quality and service. B. You desire us to grant you a license to use the methods, procedures and products developed by us and our parent (the "System") to operate an independent business (the "Franchised Business") that sells and services The Original Soupman franchises ("Unit Franchises") to qualified individuals and business entities ("Unit Franchisees") who will sell proprietary gourmet soups, chilis, stews, desserts, wraps and non- proprietary products like salads, sandwiches, specialty coffees, soft drinks and other beverages in the territory described in Section 1 of this Agreement, and you agree that your operation of the Franchised Business shall be governed by the terms, covenants and conditions contained in this Agreement. Our System includes a method of offering and selling Unit Franchises, management methods, marketing programs, financial reporting, Unit Franchisee performance reporting, and providing services to Unit Franchisees, all of which we may modify and/or update from time to time during the term of this Agreement. C. You represent and warrant to us, as an inducement to our execution of this Agreement, that all statements made by you and all materials provided to us by you in connection with the grant of this franchise to you are true, accurate and complete and that you have made no misrepresentations or material omissions in connection with obtaining this franchise. We grant this franchise in reliance upon each and all of your representations. NOW, THEREFORE, IT IS AGREED: 1. GRANT OF FRANCHISE 1.1 Rights Granted to You We grant to you, upon the terms and conditions contained in this Agreement, the exclusive right to establish and operate a Franchised Business and a license to use the methods, procedures and products developed by us in the business of selling and servicing Unit Franchises in the territory described on Attachment A attached to this Agreement and incorporated into this Agreement by reference (the "Master Territory"). You shall operate the Franchised Business at or from a location of your choice within the Master Territory upon the terms and conditions set forth in this Agreement. The Proprietary Marks, any Internet domain names, URLs, copyrights, toll-free "1-800", "1-888" and "1- 877" telephone numbers or other like toll-free telephone numbers which may be utilized by us or our affiliates, and their mnemonics, and other identifying marks constituting a part of the System, now or in the future, shall be used by you only in connection with the operation of the Franchised Business. The rights granted herein include the limited right to sublicense the use of the Proprietary Marks to Unit Franchisees in the Master Territory. + + + +Source: SOUPMAN, INC., 8-K, 8/14/2015 + + + + + + + + 1.2 Non-Exclusive Grant You acknowledge and agree that the franchise granted to you hereunder is non-exclusive and is only for one (1) Master Territory; that you are not granted any area, market, or protected territorial rights other than as expressly provided in Section 1.1 of this Agreement; and that you shall not have the right to sublicense, sublease, subcontract or enter into any management agreement providing for the right to operate the Franchised Business or to use the System granted pursuant to this Agreement, except in the manner expressly provided for in Section 5.1 of this Agreement. 1.3 Our Reserved Rights We and our affiliates retain the right, among others, in any manner and on any terms and conditions that we deem advisable, and without granting you any rights therein: 1.3.1 To own, acquire, establish, and/or operate, and license others to establish and operate, other Franchised Businesses at any location outside of the Master Territory. 1.3.2 To own, acquire, establish and/or operate, and license others to establish and operate, businesses under other proprietary marks or other systems, whether such businesses are the same, similar, or different from the Franchised Business, at any location within or outside of the Master Territory. 1.3.3 To license others to sell or distribute any products or services which bear any proprietary marks, including the Proprietary Marks, at any location outside of the Master Territory. 2. OPERATION OF THE FRANCHISED BUSINESS You acknowledge and agree that: 2.1 Name of Franchised Business You shall operate the Franchised Business in the United States of America Territory using the assumed trade name "The Original Soupman", "The Original Soupman of [City]" and/or any other trade name we designate in conjunction with your formal business name. You shall not use the Proprietary Marks, or any part thereof, as part of your corporate name or other legal name, nor shall your corporate or other legal name include any other service name. The name of your corporate entity and any trade or assumed names or other legal names used by you in the operation of the Franchised Business shall be approved by us prior to any use by you. 2.2 Full Time, Attention and Best Efforts You shall devote all of your time, attention and best efforts to the Franchised Business pursuant to this Agreement and all work and services performed and/or supervised by you under this Agreement shall be performed and/or supervised by you or by your authorized employees. You shall adhere to all current established policies, practices and procedures of the System, and as the same may be amended from time to time, and shall not deviate therefrom without our prior written consent. + +2 + +Source: SOUPMAN, INC., 8-K, 8/14/2015 + + + + + + + + 2.3 Modifications to System and Manuals The System, our Operations Manual, and any other manuals loaned to you by us pursuant to this Agreement (collectively the "Manuals"), and the products and services offered by the Franchised Business may be modified by us at any time and from time to time, including, without limitation, by the addition, deletion and/or modification of operating procedures, products and services. You shall comply, at your expense, with all such additions, deletions and/or modifications, including, without limitation, all requirements to implement the addition, deletion and/or modification. You shall implement any System changes upon receipt of notice thereof from us and shall complete their implementation within such time as we may specify. You shall ensure that each Unit Franchisee in your Master Territory also complies with any System changes, as such changes may affect the Unit Franchisees. 3. INITIAL AND EXTENDED TERMS 3.1 Initial Term The initial term of this Agreement shall commence upon the Effective Date and shall expire ten (10) years from the Effective Date, unless sooner terminated under the terms of this Agreement. You shall have no right or option to extend or renew the term of this Agreement except as provided in Section 3.2 of this Agreement. 3.2 Options to Renew You shall have the option to renew the term of this Agreement, on the terms and conditions set forth in this Agreement, for four (4) additional ten (10) year terms, upon written notice given by you to us not less than six (6) months nor more than twelve (12) months prior to the scheduled expiration date of the term then in effect, provided that each of the following conditions are satisfied: 3.2.1 You shall not be in default of any provision of this Agreement, or any other agreement between you and us or our affiliates, or any standards set forth in the Manuals, and you shall have complied with all the terms and conditions of this Agreement, the Manuals and any other agreements during the term of this Agreement. 3.2.2 You shall have satisfied all monetary obligations owed by you to us and our affiliates, and shall have timely met those obligations throughout the term of this Agreement. 3.2.3 You shall, at our option, execute our then-current form of Master Franchise Agreement and any addenda thereto for the renewal term, which renewal agreement shall supersede this Agreement in all respects, and the terms of which, including, without limitation, continuing fees payable to us, may differ materially and be less advantageous to you than the terms of this Agreement. 3.2.4 You shall comply with our then-current qualification and training requirements. 3.2.5 You shall pay us a renewal fee in the sum of Ten Thousand Dollars ($10,000) for the right to renew this Agreement. 3.2.6 You shall execute a general release, in a form prescribed by us, of any and all claims which you may have or believe to have against us and/or our affiliates and our respective officers, directors, agents and employees, whether the claims are known or unknown, which are based on, arise from or relate to this Agreement or the Franchised Business, as well as claims, known or unknown, which are not based on, do not arise from or do not relate to this Agreement or the Franchised Business, but which relate to other franchise agreements, Franchised Businesses and other agreements between us or our affiliates and you which arose on or before the date of the general release, including, without limitation, all obligations, liabilities, demands, costs, expenses, damages, claims, actions and causes of action, of whatever nature, character or description, arising under federal, state and local laws, rules and ordinances (provided, however, that all rights enjoyed by you and any causes of action arising in your favor from the provisions of Article 33 of the New York General Business Law ("GBL") and the regulations issued thereunder shall remain in force; it being the intent of this provision that the non-waiver provisions of GBL Sections 687.4 and 687.5 be satisfied). + +3 + +Source: SOUPMAN, INC., 8-K, 8/14/2015 + + + + + + + + 3.3 Renewal of Existing Agreement If we are not offering new master franchises, are in the process of revising, amending or renewing our form of Master Franchise Agreement or Master Franchise Disclosure Document or are not lawfully able to offer our then-current form of Master Franchise Agreement at the time you exercise an option to extend the term of this Agreement, we may offer to renew this Agreement upon the terms and conditions set forth in this Agreement for the extended term, or may offer to extend the term of this Agreement on a month-to-month basis following the expiration of the term of this Agreement for as long as we deem necessary or appropriate so that we may subsequently lawfully offer and utilize our then-current form of Master Franchise Agreement. 3.4 Continued Compliance Your right to extend the term of this Agreement shall be subject to your continued compliance with the terms and conditions in this Agreement as well as your compliance with the conditions set forth in Section 3.2 of this Agreement. 3.5 Termination at End of Term If you do not elect to extend the term of this Agreement, this Agreement shall terminate at the end of the term then in effect. 4. PAYMENT OF FEES 4.1 Continuing Fees Payable to Us You shall pay the following continuing fees to us each month during the term of this Agreement: 4.2.1 You shall pay to us a royalty fee based on revenue generated by Unit Franchisees (the "Unit Franchise Performance Royalty Fee") equal to twenty-five percent (25%) of aggregate royalty fees paid to you by Unit Franchisees in the Master Territory pursuant to their Unit Franchise Agreements. The Unit Franchise Performance Royalty Fee shall be paid by you to us in the manner provided in Section 4.3 of this Agreement by the fifteenth(15 th ) day of each calendar month based on royalty fees generated and received during the previous calendar month. 4.2.2 You shall pay to us a franchise sales royalty fee (the "Franchise Sales Royalty Fee") for each Unit Franchise you sell in the Master Territory as follows: twenty-five percent (25%) of the initial franchise fee collected from each Unit Franchisee upon execution of the Unit Franchisee's Franchise Agreement (a "Unit Franchise Agreement"); provided, however, that if you elect to discount or reduce an initial franchise fee for any reason, the Franchise Sales Royalty Fee shall be payable to us as if the full initial franchise fee had been paid. The Franchise Sales Royalty Fee shall be paid by you to us at the same time and in the same manner as the Unit Franchise Performance Royalty Fee provided in Section 4.2.1 above. Any Royalty Fee you collect from the Franchisee shall be immediately paid to Us, but no later than the fifteen (15 th ) day of each calendar month. A Unit Franchise shall be deemed to be sold to a Unit Franchisee on the date that you and the Unit Franchisee execute the Unit Franchise Agreement, irrespective of when the Unit Franchise begins operation. Fees and Royalties cannot be increased or decreased without our prior written consent. + +4 + +Source: SOUPMAN, INC., 8-K, 8/14/2015 + + + + + + + + 4.2.3 In addition to the Unit Franchise Performance Royalty Fee and Franchise Sales Royalty Fee described above, you shall collect from each Unit Franchisee in your Master Territory a "National Advertising Fund Contribution" to be contributed to our "National Advertising Fund" pursuant to the terms of the individual Unit Franchise Agreements. For each Unit Franchise you own and operate, you shall pay the National Advertising Fund Contribution on the same basis as Unit Franchisees. The National Advertising Fund Contribution shall be collected by you from each Unit Franchisee and spent by you in accordance with the agreement on behalf of the franchisor and Franchisees. 4.3 Manner of Payment You shall pay us all Unit Franchise Performance Royalty Fees and Franchise Sales Royalty Fees, due under this Section 4 by electronic funds transfer by us against a bank account maintained by you. You agree to execute the documents required by us, our bank and/or your bank in order to permit us to conduct electronic funds transfers to and from your account, and you shall not close your account without our prior consent. Your failure to comply with the terms of this Section 4.3 shall be deemed to be a breach of this Agreement. You hereby authorize us to initiate debit entries and/or credit collection entries to your bank account for the payment of Unit Franchise Performance Royalty Fees, Franchise Sales Royalty Fees, National Advertising Fund Contributions, and all other sums that may become due to us or our affiliates from you. You shall make funds available for withdrawal by us by electronic transfer on such dates of each month as we shall designate throughout the term of this Agreement. If you fail to provide the revenue reports described in Section 4.6 below, then in addition to the late fee described in such Section, we may debit your account for one hundred forty percent (140%) of the last Unit Franchise Performance Royalty Fee, Franchise Sales Royalty Fee and/or National Advertising Fund Contribution (as applicable) that we debited. If the Unit Franchise Performance Royalty Fee, Franchise Sales Royalty Fee and/or National Advertising Fund Contribution we debit are less than the fees you actually owe us, once we have been able to determine the true and correct revenue amounts, we will debit your account for the balance on a day we specify. If the Unit Franchise Performance Royalty Fee, Franchise Sales Royalty Fee and/or National Advertising Fund Contribution we debit are greater than the fees you actually owe us, we will credit the excess against the amount we otherwise would debit from your account for the next payment due. 4.4 Interest on Overdue Amounts Any payment not actually received by us on or before the Fifteen (15 th ) day of each month (or the next business day if the Fifteen(15 th ) of any month is not a business day) shall be deemed overdue and you shall pay to us, in addition to the overdue payment, interest on such overdue amount at the rate of one and one-half percent (1.5%) per month or the maximum rate permitted by law, whichever is less. Interest shall accrue from the original due date until payment is received in full. Our right to such interest shall be in addition to any other remedies we may have, including, without limitation, the right of set-off to withdraw or retain, from time to time and without notice to you, any amounts due and unpaid by us to you. You shall not be entitled to set-off any payments required to be made under this Section 4 against any monetary claim you may have against us. + +5 + +Source: SOUPMAN, INC., 8-K, 8/14/2015 + + + + + + + + 4.5 Late Fee; Insufficient Funds Fee In the event you fail to provide us with any report we require on or before the date we require it, you agree to pay to us a late fee in the amount of Two Hundred Fifty Dollars ($250). In addition, if, for any reason, any payment owed by you to us is denied by your bank due to insufficient funds in your account, then you shall, in addition to applicable interest as described in Section 4.4 above, pay us an insufficient funds fee in the amount of Two Hundred Fifty Dollars ($250). If you incur three (3) late fees or insufficient funds fees within any twelve (12) month period, we will have the right to terminate this Agreement without providing you an opportunity to cure the default. 4.6 Unit Franchise Agreements and Revenue Reports You shall submit to us copies of all Unit Franchise Agreements executed with Unit Franchisees within ten (10) days of the date of their execution, together with a copy of all checks presented to you at closing. You shall prepare and submit to us a monthly report, not later than the first (1 s t ) day of each month, of Franchise Sales Revenue generated by you during the previous calendar month. Contemporaneously with the submission of the Franchise Sales Revenue report, you shall prepare and submit to us a monthly report, in such form and including such detail as we require, reflecting royalty fees paid and owed to you by your Unit Franchisees for the previous calendar month. Any report not actually received by us when due shall be deemed overdue and you shall pay us a late charge as described above. 4.7 Security Interest In order to secure payment of all Unit Franchise Performance Royalty Fees, Franchise Sales Royalty Fees, National Advertising Fund Contributions, and all other sums that may become due to us or our affiliates from you under this Agreement, and to secure your performance of all obligations of any kind, whenever and however incurred, in favor of us or our affiliates: 4.7.1 You hereby grant us a security interest in and to all equipment, furniture, fixtures, inventory, supplies and vehicles used in connection with the Franchised Business, now or hereafter acquired by you, together with all accounts, payment intangibles, attachments, accessories, additions, substitutions and replacements, all cash and non-cash proceeds derived from insurance or the disposition of such assets, all of your rights to use the Proprietary Marks, patents, copyrights and their registrations, trade secret information and other proprietary rights, and all rights granted, owned or licensed to you under this Agreement for the use of the Proprietary Marks, trade names, trade styles, patents, copyrights, trade secret information and other proprietary rights. You hereby authorize us to prepare and file all Uniform Commercial Code ("UCC") financing statements and other documents necessary or desirable to evidence, perfect and continue the priority of this security interest under the UCC. 4.7.2 If you are and remain in good standing under this Agreement and all other agreements with us and our affiliates, we will consent to your grant of an additional security interest in the Franchised Business or in any of the assets of the Franchised Business if the conditions set forth in Section 12.4 of this Agreement are met. 4.7.3 If you are in default of any of the terms and conditions of this Agreement or any other agreements between us and our affiliates and you, we may, in our sole and absolute discretion, exercise our rights with respect to our security interest. In such event, you shall be and remain liable for any deficiency remaining due to us and shall be entitled to recover any surplus which results after application of the proceeds derived from the enforcement of our security interest. + +6 + +Source: SOUPMAN, INC., 8-K, 8/14/2015 + + + + + + + + 4.8 Reimbursement of Monies You shall pay to us, within fifteen (15) days of any written request by us accompanied by reasonable substantiating material, any monies which we have paid, or have become obligated to pay, on your behalf by consent or otherwise under this Agreement. 4.9 Application of Fees Notwithstanding any designation by you, we shall have the sole discretion to apply any payments made by you to any past due indebtedness of yours for Unit Franchise Performance Royalty Fees, Franchise Sales Royalty Fees, National Advertising Fund Contributions, or any other indebtedness, in such amounts and in such order as we shall determine. 5. YOUR OBLIGATIONS You understand and acknowledge that every detail of the System is essential to you and us in order to develop and maintain quality operating standards, to increase the demand for the products and services sold by all master franchisees operating under the System and to protect the Proprietary Marks and our reputation and goodwill. You shall comply with our standards with respect to services, products and operations and shall operate the Franchised Business in strict conformity with such methods, standards, and specifications as we may from time to time prescribe in the Manuals or otherwise. You shall refrain from deviating from such standards, specifications and procedures without our prior written consent and from otherwise operating in any manner which reflects adversely on the Proprietary Marks or the System. Without limiting the generality of the foregoing, you agree that: (a) You shall only use and serve soups that are approved by us and must be purchased from suppliers designated or approved in writing by us and you acknowledge that all soups approved shall not be those of Al Yeganeh. We will use our best efforts to have all soups produced to Al Yeganeh's standards. Any deviation from the above shall result in default of the Agreement and grounds for immediate termination without opportunity to cure. (b) Soups shall be cost plus 25% FOB the supplier. (c) You hereby agree that you shall serve three (3) soups daily, in any format approved in writing by us, inside the kettles located in the front line of the restaurant. We prefer you serve daily six (6) soups in any format, approved in writing by us. (d) In order to keep your exclusivity, you agree to purchase a minimum of the following: $170,000.00 of soup from us in 2015 $1,600,00.00 of soup from us in 2016 $3,200,000.00 of soup from us in 2017 $5,000,000.00 of soup from us in 2018 and shall increase 10% each year thereafter. (e) We maintain the right to open and operate new company units and to sell franchises to our existing franchisees. + +7 + +Source: SOUPMAN, INC., 8-K, 8/14/2015 + + + + + + + + (f) We shall be permitted to sell branded products to national accounts without any money due to you or your parent company. Once you have units open and operating in the trade area where a National Account is located, we will remit to you 25% of the profits derived from the sales in that specific trade area. (g) We will continue to collect the royalties from franchisees and service existing franchisee in the Master Territory. 5.1 Sale of Unit Franchises; Minimum Development Quota You shall have the right and obligation to market and sell independent Unit Franchises to qualified Unit Franchisees who shall operate a The Original Soupman business as granted in the Unit Franchise Agreement. The rights granted to you hereunder do not include the right to sub-franchise others to sell franchises. You may not grant any such right to a Unit Franchisee, and Unit Franchisees shall not have the right to sub-franchise or sell Unit Franchises. You shall commence operation of the Franchised Business no later than the "Commencement Date" set forth on Attachment A hereto. 5.1.1 In addition to The Original Soupman business you must own and continuously operate, you must sell and have open the minimum number of The Original Soupman businesses as set forth on Attachment E hereto (the "Minimum Development Quota") by the dates set forth on such Attachment. We will not grant other franchises nor establish our own Unit Franchises within the Master Territory during the term of this Agreement unless you do not meet the Minimum Development Quota. If you do not meet the Minimum Development Quota, we may cancel your exclusive right to market and sell Unit Franchises in your Master Territory and may sell additional Master Franchises within your Master Territory, or we may begin operations of our own in your Master Territory, or we may terminate this Agreement. 5.1.2 You shall prepare and present to each applicant for the purchase of a Unit Franchise (an "Applicant") a Franchise Disclosure Document and all other related documents in accordance with the requirements of all federal and state regulatory agencies which now or hereafter may have jurisdiction over the sale of franchises in the Master Territory (a "Unit Franchise Disclosure Document"). You may not present a Unit Franchise Disclosure Document to any Applicant until such Unit Franchise Disclosure Document has been submitted to and approved by us or our counsel in accordance with Section 13 of this Agreement and, if applicable, the Unit Franchise Disclosure Document has been registered with the appropriate state authority. You agree to make any changes to the Unit Franchise Disclosure Document (including its exhibits) as may be requested by us or our counsel. We shall have no responsibility whatsoever for the accuracy or legal compliance of your Unit Franchise Disclosure Document or your compliance with the requirements of any regulatory agencies which now or hereafter may have jurisdiction over the sale of franchises. You acknowledge and understand that you are solely and exclusively responsible for complying with all federal and state franchise registration and disclosure laws and the payment of all franchise registration and filing fees . To prepare your Unit Franchise Disclosure Document and comply with applicable franchise registration and disclosure laws as just discussed, you may require the services of a franchise attorney, who would be retained at your expense. 5.1.3 You must charge your Unit Franchisees the initial franchise fee, royalty fee, National Advertising Fund Contribution and any other continuing fees that we designate or require, within the limits established by all regulatory agencies which now or hereafter may have jurisdiction over the sale of franchises and the requirements imposed by this Agreement. Any deviations from these amounts must be pre- approved by us. + +8 + +Source: SOUPMAN, INC., 8-K, 8/14/2015 + + + + + + + + 5.1.4 You shall not make any misleading or untrue statements or any representations inconsistent with the Unit Franchise Disclosure Document in connection with the sale of Unit Franchises within the Master Territory. Further, you shall not provide any Applicant with any document or information in connection with the sale of Unit Franchises within the Master Territory other than documents and information included within the Unit Franchise Disclosure Document. You shall make no promises, representations or commitments to any Applicant in connection with the sale of Unit Franchises within the Master Territory, including representations concerning potential profit or income, other than promises, representations or commitments specifically included within the Unit Franchise Disclosure Document. 5.1.5 You shall defend at your expense (with legal counsel reasonably satisfactory to us) and shall indemnify and hold harmless us and our affiliates, and our respective officers, directors, shareholders, agents and employees, from and against any and all claims, losses, damages, liabilities, costs and expenses (including, without limitation, actual attorneys', accountants' and consultants' fees and other expenses, including any such expenses incurred in connection with investigating, defending against or settling any such claims sustained or incurred by us), however caused, resulting directly or indirectly from or pertaining to any acts, omissions to act and/or performance by you of your obligations and responsibilities under this Section 5.1, including, but not limited to, unauthorized disclosures to Applicants, any claims of Applicants or Unit Franchisees whose Unit Franchises were sold by you and/or any claims of any regulatory agencies which now or hereafter may have jurisdiction over the sale of franchises in connection with your sales of Unit Franchises. 5.2 Initial Training and Services for Unit Franchisees 5.2.1 In order to ensure that the integrity of the Proprietary Marks and our goodwill are preserved, you shall provide a comprehensive initial training program for each Unit Franchisee in the Master Territory according to our specifications, including classroom and on-site training and assistance. Each Unit Franchisee must complete the initial training program satisfactorily, according to the parameters we specify. 5.2.2 You shall thereafter provide sessions of on-location assistance in operations and business management. 5.2.3 You will further support and assist each Unit Franchisee by: (a) Making available to each Unit Franchisee in the Master Territory all applicable Manuals, training aids and any pertinent information concerning the System. (b) Providing assistance and guidance to each Unit Franchisee in the Master Territory. (c) Having personnel available for each Unit Franchisee in the Master Territory on an ongoing basis during normal business hours to provide technical assistance, consultation, and advice on marketing and operations procedures and by providing training and support for to each Unit Franchisee in the Master Territory at reasonable rates as established by us. + +9 + +Source: SOUPMAN, INC., 8-K, 8/14/2015 + + + + + + + + 5.2.4 You shall be solely responsible for ensuring that all The Original Soupman businesses in the Master Territory, including such businesses owned and operated by you, shall (a) purchase all proprietary products we require and maintain an inventory of such proprietary products as we specify for The Original Soupman businesses; and (b) offer and sell the mix of products, including proprietary products, that we designate for The Original Soupman businesses. 5.2.5 If you fail to insure and/or enforce the proper performance of the obligations described in Section 5.2.4, and any other obligations contained in a Unit Franchise Agreement and/or the Manuals, we shall have the right, in our sole and absolute discretion, to enforce any provision of any Unit Franchise Agreement if you fail to do so following receipt of a written request by us to enforce the terms of such Unit Franchise Agreement. 5.2.6 You shall indemnify, defend and hold us, our parent and our affiliates, and our respective officers, directors, shareholders, employees, agents and attorneys, and their respective heirs, successors and assigns, and each of them, harmless from and against any and all claims arising from any action or omissions to act by you or Unit Franchisees in the Master Territory. 5.3 Use of Proprietary Marks You shall supervise the use of all Proprietary Marks by Unit Franchisees in the Master Territory. If you fail to exercise the proper diligence in enforcing the terms of any Unit Franchise Agreement to insure that the Proprietary Marks are being properly used by Unit Franchisees, such failure shall constitute a default under the terms of this Agreement and may result in termination of this Agreement. 5.4 Place of Business You shall maintain a safe and reasonably clean place of business in compliance with all governmental and industry standards and conduct the Franchised Business in a manner that generates goodwill and public approval of you and us. 5.5 Insurance During the term of this Agreement, you shall maintain in force under policies of insurance issued by licensed insurers approved by us insurance coverage as we from time to time require. You must maintain insurance related to your operation of the Franchised Business. Such insurance coverage will include: 5.5.1 As it relates to the operation of your Franchised Business: broad form comprehensive general liability coverage against claims for employment practices coverage, bodily and personal injury, death and property damage caused by or occurring in conjunction with the conduct of business by you pursuant to this Agreement and broad form contractual liability coverage, including errors and omissions coverage, under one or more policies of insurance containing minimum liability coverage prescribed by us from time to time, but in no event in an amount less than Two Million Dollars ($2,000,000) aggregate. Such insurance shall not have a deductible or self-insured retention in excess of Five Thousand Dollars ($5,000); 5.5.2 As it relates to the operation of your Franchised Business: automobile liability insurance coverage, including owned and non-owned vehicles, with limits of not less than One Million Dollars ($1,000,000) per occurrence; + +10 + +Source: SOUPMAN, INC., 8-K, 8/14/2015 + + + + + + + + 5.5.3 As it relates to the operation of your Franchised Business: worker's compensation and employer's liability insurance in statutory amounts, unemployment insurance and state disability insurance as required by governing law for your employees; 5.5.4 As it relates to the Unit Franchisees' operation in the Master Territory, and if you elect to obtain such coverage: general liability insurance, which insurance is in addition to any general liability insurance the Unit Franchisees are required to maintain under their Unit Franchise Agreements. You shall also maintain such additional insurance as is necessary to comply with all legal requirements concerning insurance. We may periodically increase the amounts of coverage required under such insurance policies and require different or additional kinds of insurance at any time including excess liability insurance to reflect inflation, identification of new risks, changes in law or standards of liability, higher damage awards, or other relevant changes in circumstances. The insurance policies required herein shall: (a) name us as an additional named insured and contain a waiver of all subrogation rights against us, our affiliates, and our and their successors and assigns; (b) provide for thirty (30) days' prior written notice to us of any material modification, cancellation, or expiration of such policy; (c) provide that the coverage applies separately to each insured against whom a claim is brought as though a separate policy had been issued to each insured; (d) contain no provision which in any way limits or reduces coverage for you in the event of a claim by any one or more of the parties indemnified under this Agreement; (e) be primary to and without right of contribution from any other insurance purchased by the parties indemnified under this Agreement; and (f) extend to and provide indemnity for all obligations assumed by you hereunder and all other items for which you are required to indemnify us under this Agreement. You shall provide us with evidence of the insurance required hereunder not later than ten (10) days before you begin operating as a Master Franchisee, and with a complete copy of each insurance policy no more than thirty (30) days after delivery of the original proof of insurance. Thereafter, prior to the expiration of the term of each insurance policy, you shall furnish us with a copy of each renewal or replacement insurance policy to be maintained by you for the immediately following term and evidence of the payment of the premium therefor. Should you, for any reason, fail to procure or maintain the insurance required by this Agreement, as such requirements may be revised from time to time by us in writing, we shall have the right and authority (without, however, any obligation to do so) immediately to procure such insurance and to charge same to you, which charges shall be payable by you immediately upon notice together with a ten percent (10%) administrative fee. The foregoing remedies shall be in addition to any other remedies we may have at law or in equity. The maintenance of sufficient insurance coverage shall be your responsibility. Your obligations to maintain insurance coverage as herein described shall not be affected in any manner by reason of any separate insurance maintained by us nor shall the maintenance of such insurance relieve you of any indemnification obligations under this Agreement. 5.6 Computer Hardware and Software 5.6.1 You shall, in accordance with any specifications that we may prescribe and from any suppliers we may designate (which may include us or an affiliate), purchase, lease or license all computer hardware and software designated by us for the Franchised Business, whether in this Agreement, the Manuals or otherwise during the term of this Agreement. You shall likewise procure and install printers and other computer-related accessories or peripheral equipment as we may require. You shall at all times have a high speed internet connection for your computer system. All computer hardware and software specified by us shall be purchased, leased or licensed by you and your sole expense. You shall utilize all software programs that we may specify in connection with the operation of the Franchised Business. We reserve the right to develop proprietary software programs and, if we elect to do so, you shall execute our standard form of software license agreement for such proprietary software programs upon demand by us, and shall input and maintain in your computer system all software programs, data and information as we prescribe. You shall purchase, lease or license all software programs and materials whenever we elect to use new or upgraded programs and materials, either from us or from an approved distributor, if any, and, if from an approved distributor, upon terms determined by such distributor. During the term of this Agreement, you shall maintain and update all computer hardware and software as required by us. + +11 + +Source: SOUPMAN, INC., 8-K, 8/14/2015 + + + + + + + + 5.6.2 You shall also purchase all computer-related services (including, without limitation, e-mail services) from suppliers (which may include us or our affiliate) that we may require and designate from time to time. 5.7 Payment of Taxes You shall pay all personal property, sales, excise, use, and other taxes, regardless of type or nature, which may be imposed, levied, assessed or charged, on, against, or in connection with the Franchised Business and any products, services or equipment sold or furnished hereunder, whether those taxes are imposed by any federal, state, municipality, county or parish, or other governmental unity or agency, which may have jurisdiction over such products, services and equipment. It shall be your sole responsibility to insure that any Unit Franchisee operating in the Master Territory shall also comply with this Section 5.7 as it may apply to the operation of the Unit Franchisee's business. 5.8 Enforcement of Unit Franchise Agreements You shall take all necessary steps to enforce the terms and condition of all Unit Franchise Agreements and shall be bound by the terms thereof in all dealings with your Unit Franchisees and shall maintain normal office hours, provide adequate communication and support and otherwise maintain and operate your Franchised Business in a manner that will promote the efficiency and success of each Unit Franchisee. You shall not terminate the Unit Franchise Agreement of any Unit Franchisee without our prior written consent. 5.9 Master Franchisee Training Program Prior to the Commencement Date, you (or, if you are a corporation, partnership, or limited liability company, a principal of yours acceptable to us and who owns at least a twenty-five percent (25%) equity interest in you) and those of your managers who are approved by us, shall attend and complete to our satisfaction the initial training program (or segments thereof at our discretion) for master franchisees offered by us. We shall provide such training, instructors, a training manual, and other materials without charge to ,five_(5) persons, but if you request to send additional attendees to our master franchisee training program you shall pay our then-current training fee for each additional attendee sent to such training program by you. Except as stated in the preceding sentence, you shall be responsible for any and all other expenses incurred in connection with sending your managers to such training including, without limitation, the costs of transportation, lodging, meals, and any wages. We shall, in our sole discretion, select the time and location of the initial training program. We shall have the right to terminate this Agreement if, at any time during the initial training program, we conclude (in our sole judgment) that you or your principal do not appear to possess the skills necessary to properly fulfill and discharge the demands and responsibilities required by the System or this Agreement. + +12 + +Source: SOUPMAN, INC., 8-K, 8/14/2015 + + + + + + + + 5.10 Additional Training; Master Franchisee Meetings 5.10.1 You and your employees shall also attend such additional courses, seminars, and other training programs as we may reasonably require from time to time. We shall not charge any fees for those attending these additional courses, seminars, or other training programs, but you shall be responsible for any and all other expenses incurred in connection with attending and sending your employees to such training programs including, without limitation, the costs of transportation, lodging, meals, training materials and any wages. We shall, in our sole discretion, select the time and location of all additional training programs. 5.10.2 If you request that we provide additional training or assistance on-site at your Franchised Business, you must pay our then-current per diem fee for each representative we send to you to provide training or assistance, and you must reimburse each representative's travel, lodging and meals expenses while providing the additional on-site training or assistance. 5.10.3 When we believe it is beneficial to do so, we will hold an annual meeting of our master franchisees to conduct additional training, announce new products and/or services or discuss any other matters of interest. The annual meeting will be mandatory for all master franchisees, unless your absence is excused by us. You will bear all costs related to attending the annual meeting, including travel, lodging, meals, wages and a nominal fee for the meeting for each person attending such meeting. 5.11 Supplies and Equipment You shall require your Unit Franchisees in the Master Territory to purchase supplies and equipment used in the operation of its Unit Franchise business from only designated and approved suppliers to insure quality and uniformity and to take advantage of quantity purchasing discounts, if any. We shall provide you with a list of approved and designated suppliers for supplies and equipment prior to the Commencement Date. 5.12 Compliance with Governmental Regulations and Applicable Law You shall, as an independent business owner, timely obtain any and all permits, certificates, or licenses necessary for the lawful operation of the Franchised Business including, without limitation, licenses to do business, fictitious name registrations, sales tax permits, and the like. You and your principals agree to comply, and to assist us to the fullest extent possible in our efforts to comply, with Anti-Terrorism Laws (defined below). In connection with that compliance, you and your principals certify, represent, and warrant that none of your property or interests is subject to being blocked under, and that you and your principals otherwise are not in violation of, any of the Anti-Terrorism Laws. "Anti-Terrorism Laws" mean Executive Order 13224 issued by the President of the United States, the USA PATRIOT Act, and all other present and future federal, state, and local laws, ordinances, regulations, policies, lists, and other requirements of any governmental authority addressing or in any way relating to terrorist acts and acts of war. Any violation of the Anti-Terrorism Laws by you or your principals, or any blocking of your or your principals' assets under the Anti-Terrorism Laws, shall constitute good cause for immediate termination of this Agreement. 5.13 Office Location You shall be solely responsible for any leases of real or personal property in connection with the operation of your Franchised Business. We reserve the right, but are not required to, approve your office location and any leasehold improvements to such location to protect our image, reputation and goodwill. You may elect to operate the Franchised Business from The Original Soupman business you must own and operate, once such business is open and operating. + +13 + +Source: SOUPMAN, INC., 8-K, 8/14/2015 + + + + + + + + You shall at all times during the term of this Agreement maintain your office and all fixtures, furnishing, signs and equipment located therein in good order and condition, and in conformity with the System image as may be prescribed by us from time to time. You shall, within a reasonable time specified by us, make all necessary reasonable additions, alterations, repairs and replacements to your office as required by us to conform to our quality standards, but no others without our prior written consent, including, without limitation, periodic repainting or replacement of signs, furnishings, or equipment. No other business venture shall operate out of the premises utilized by you for your Franchised Business without our prior written consent. 5.14 Solicitation Advertising You shall conduct advertising to solicit Applicants for the purchase of Unit Franchisees in the Master Territory ("Solicitation Advertising"). You shall expend not less than $5,000 each month on such Solicitation Advertising. To protect the Proprietary Marks and our goodwill in the industry, you must submit samples of all proposed Solicitation Advertising materials to us at least fifteen (15) days before any use of the same. If we do not disapprove the proposed Solicitation Advertising materials within fifteen (15) days after receipt of the same, you may use the proposed Solicitation Advertising materials as submitted to us; provided, however, that if such Solicitation Advertising is required to be submitted to a government agency, you shall so submit such materials to the applicable government agency and shall not use such materials until the materials are approved or disapproved or if the use of the materials otherwise become permissible under law, such as if notice of disapproval is not received from a governmental agency within a stated period of time prescribed by law. We may, at any time after you begin to use the Solicitation Advertising materials, prohibit further use of the same, effective upon your receipt of written notice from us to do so. 5.15 Policies and Procedures You shall not have the right to establish policies and/or procedures pertaining to the operation of the Franchised Business to protect the Proprietary Marks and our goodwill in the industry outside of the policies and/or procedures that we designate. You and all Unit Franchisees subject to the license granted under this Agreement shall be bound by our policies and/or procedures upon receipt of the same. 5.16 Changes to the System You acknowledge and agree that the System must continue to evolve in order to reflect the changing market and to meet new and changing customer demands and that, accordingly, variations and additions to the System may be required from time to time in order to preserve and enhance the public image of the System and to insure the continuing operation efficiency of Unit Franchisees generally. Accordingly, you acknowledge and agree that we may from time to time change the System, including, without limitation, the adoption and use of new or modified trademarks, products, services, equipment and furnishings and new techniques and methodologies relating to the preparation, sale, promotion and marketing of services and supplies. You shall promptly accept, implement, use and display all such additions, modifications and changes at your sole cost and expense, and you shall ensure that all Unit Franchisees in your Master Territory promptly accept, implement, use and display all such additions, modifications and changes. You further acknowledge and agree that we may inspect your Franchised Business and any Unit Franchise in the Master Territory to verify that your Franchised Business and/or such Unit Franchise is operating in compliance with our System, as it may be modified from time to time. + +14 + +Source: SOUPMAN, INC., 8-K, 8/14/2015 + + + + + + + + 5.17 Developments are Our Property You acknowledge and agree that, in consideration for the right to use the System and our expertise in the field, if you, any of your employees or any Unit Franchisees in the Master Territory develop any new concept, process or improvement in the operation or promotion of the Franchised Business, you will promptly notify us and provide us with all necessary information concerning same, without any compensation to you, your employee or Unit Franchisee. You acknowledge and agree that any such concept, process or improvement shall become our property and we may utilize or disclose such information to other master franchisees and unit franchisees as we determine to be appropriate. 5.18 Financial Statements and Updated Unit Franchise Disclosure Document You shall, at your sole cost and expense, prepare and submit to us within one hundred twenty (120) days after each fiscal year end, a complete, audited financial statement for the preceding fiscal year prepared by an independent certified public accountant in accordance with generally accepted accounting principles. Each audited financial statement shall include a balance sheet and a profit and loss statement. If you own, directly or beneficially, a controlling financial interest in any other business, the financial statements required to be submitted by you must reflect your financial condition and your other business operations on a consolidated basis. You understand and acknowledge that the Federal Trade Commission's disclosure requirements for franchising (16 CFR Part 436) require you to include audited financial statements each year after your fiscal year end. You further understand and acknowledge that, as with your initial Unit Franchise Disclosure Document, all annual updates to your Unit Franchise Disclosure Document shall be submitted to us or our counsel for review within one hundred twenty (120) days after each fiscal year end. Notwithstanding the foregoing, we reserve the right to inspect or examine your accounts, books, records and tax returns, at any reasonable time, with or without prior notice to you. 5.19 Our Website We or one or more of our designees may establish a website or series of websites for the System to advertise, market and promote The Original Soupman businesses and the products and services they offer, the Unit Franchise and/or master franchise opportunity, and/or for any other purposes that we determine are appropriate for The Original Soupman businesses (collectively, the "System Website"). If we include information about your Franchised Business on the System Website, you agree to give us the information and materials that we periodically request concerning the Franchised Business and otherwise participate in the System Website in the manner that we periodically specify. By posting or submitting to us information or materials for the System Website, you are representing to us that the information and materials are accurate and not misleading and do not infringe upon any third party's rights. We shall own all intellectual property and other rights in the System Website and all information it contains, including the domain name or uniform resource locator ("URL") for the System Website, the log of "hits" by visitors, and any personal or business data that visitors (including you and your personnel) supply. We may implement and periodically modify System standards relating to the System Website and, at our option, may discontinue the System Website, or any services offered through the System Website, at any time. All advertising, marketing and promotional materials that you develop for your Franchised Business must contain notices of the URL of the System Website in the manner that we periodically designate. You may not develop, maintain or authorize any other website, other online presence or other electronic medium that mentions or describes the Franchised Business, the System or displays any of the Marks without our prior approval. We do not restrict the use of internet or web page advertising within or outside of your Master Territory, but the advertising content must be approved by us before it is used. + +15 + +Source: SOUPMAN, INC., 8-K, 8/14/2015 + + + + + + + + Nothing in the Franchise Agreement shall limit our right to maintain websites other than the System Website or to offer and sell products and services under the Marks from the System Website, another website or otherwise over the Internet without payment or obligation of any kind to you. You are strictly prohibited from establishing your own website related to the Proprietary Marks or our System without our prior written consent, which we do not have to provide. You are also prohibited from promoting your Franchised Business on social and networking websites, including Facebook, LinkedIn, MySpace Twitter and/or other social media sites or platforms, without our prior written consent. We will control all social media initiatives. You must comply with our System standards regarding the use of social media in the operation of your Franchised Business, including prohibitions on your and your employees posting or blogging comments about the Franchised Business or the System, other than on a website established or authorized by us ("social media" includes personal blogs, common social networks like Facebook and MySpace, professional networks like LinkedIn, live-blogging tools like Twitter, virtual worlds, file, audio and video-sharing sites, and other similar social networking or media sites or tools). We will provide access to branded social media pages/handles/assets, and you must update these regularly. We reserve the right to conduct collective/national campaigns via local social media on your behalf. We alone will be, and at all times will remain, the sole owner of the copyrights to all material which appears on any System Website we establish and maintain, including any and all material you may furnish to us as provided above. 5.20 Our Intranet 5.20.1 We may, at our sole discretion and option, establish and maintain a private method of communication for use only by employees and master franchisees of ours, as well as Unit Franchisees in the System (an "Intranet"), through which we, master franchisees, our employees and Unit Franchisees may communicate with each other, and through which we may disseminate the Manuals, updates thereto and other confidential information. We shall have sole discretion and control over all aspects of the Intranet, including the content and functionality thereof. We will have no obligation to maintain the Intranet indefinitely, and may dismantle it at any time without liability to you. 5.20.2 If we establish an Intranet, you shall have the privilege to use the Intranet, subject to your strict compliance with the standards and specifications, protocols and restrictions that we may establish from time to time. Such standards and specifications, protocols and restrictions may relate to, among other things, (a) the use of abusive, slanderous or otherwise offensive language in electronic communications; (b) communications between or among master franchisees that endorse or encourage breach of any master franchisee's agreement with us; (c) confidential treatment of materials that we transmit via the Intranet; (e) password protocols and other security precautions; (f) grounds and procedures for our suspending or revoking a master franchisee's access to the Intranet; and (g) a privacy policy governing our access to and use of electronic communications that master franchisees post to the Intranet. We may establish similar standards and protocols related to Unit Franchises. You acknowledge that, as administrator of the Intranet, we can technically access and shall be entitled to view any communication that any person posts on the Intranet. You further acknowledge that the Intranet facility and all communications that are posted to it will become our property, free of any claims of privacy or privilege that you or any other person may assert. + +16 + +Source: SOUPMAN, INC., 8-K, 8/14/2015 + + + + + + + + 5.20.3 Upon receipt of notice from us that we have established the Intranet, you shall establish and continually maintain (during all times that the Intranet shall be established and until the termination of this Agreement) an electronic connection (the specifications of which shall be specified in the Manuals) with the Intranet that allows us to send messages to and receive messages from you, subject to our standards and specifications. 5.20.4 If you fail to pay when due any fees or other amounts payable to us under this Agreement, or any other agreement with us or our affiliates, or otherwise fail to perform your obligations under this Agreement or any other agreement with us or our affiliates, we may, without prior notice and without any liability or recourse as against us or our affiliates, temporarily disable or terminate your access to the Intranet until such time as you pay and/or perform your outstanding obligation in full. 5.20.5 You shall, at our option and request, and without any additional consideration, assign to us all rights to all e-mail addresses, URLs, domain names, Internet listings, and Internet accounts related to the Franchised Business following demand by us upon your misuse of the same and/or the termination or expiration of this Agreement. Furthermore, you hereby appoint us as your attorney-in-fact with full power and authority for the sole purpose of assigning these rights to us. This appointment shall be deemed to be coupled with an interest and shall continue in full force and effect until and following the termination or expiration of this Agreement. 6. PROPRIETARY MARKS 6.1 Our Representations We represent with respect to the Proprietary Marks that: 6.1.1 We are the owner or the licensee of the owner of the Proprietary Marks with a license to use, and to license others to use, the Proprietary Marks. All references herein to our right, title and interest in and to the Proprietary Marks shall include the owner's right, title and interest in and to the Proprietary Marks. 6.1.2 All steps reasonably necessary to preserve and protect the validity of the Proprietary Marks, and our right to use and license others to use, the Proprietary Marks will be taken. 6.1.3 We will use and permit you and other master franchisees to use the Proprietary Marks only in accordance with the System and the standards and specifications attendant thereto which underlie the goodwill associated with and symbolized by the Proprietary Marks. 6.2 Your Representations You represent with respect to the Proprietary Marks that: 6.2.1 You shall use only the Proprietary Marks designated by us, and shall use them only in the manner authorized and permitted by us. 6.2.2 You shall use the Proprietary Marks only for the operation of the Franchised Business, in connection with approved advertising for the Franchised Business and with the authorized sub-license of the Proprietary Marks to your Unit Franchisees. 6.2.3 You shall identify yourself as an independent franchisee-owner of ours in conjunction with any use of the Proprietary Marks and the operation of the Franchised Business, including, but not limited to, such use on invoices, order forms, receipts, business stationery and contracts, as we may designate in writing. The form and content of the identification of the Franchised Business as being independently owned and operated shall comply with standards set forth in the Manuals. + +17 + +Source: SOUPMAN, INC., 8-K, 8/14/2015 + + + + + + + + 6.2.4 Your right to use the Proprietary Marks is limited to such uses as are authorized under this Agreement, and any unauthorized use thereof shall constitute an infringement. 6.2.5 You shall not use the Proprietary Marks to incur any obligation or indebtedness on our behalf. 6.2.6 You shall execute any documents deemed necessary by us or our affiliates to obtain protection for the Proprietary Marks or to maintain their continued validity and enforceability. 6.2.7 You shall not use the Proprietary Marks as part of your corporate or other legal name. 6.2.8 You shall promptly notify us of any suspected unauthorized use of or any challenge to the validity of the Proprietary Marks, or any challenge to our or our affiliate's ownership of, our license to use and to license others to use, or your right to use, the Proprietary Marks licensed under this Agreement. You acknowledge that we or our affiliate have the right to direct and control any administrative proceeding or litigation, or other adjudicative proceeding involving the Proprietary Marks, including any settlement thereof. We or our affiliate have the right, but not the obligation, to take action against uses by others that may constitute infringement of the Proprietary Marks. We shall defend you against any third-party claim, suit, or demand arising out of your use of the Proprietary Marks; provided, however, that your use of the Proprietary Marks is in compliance with this Agreement. If we, in our sole discretion, determine that you have used the Proprietary Marks in accordance with this Agreement, the cost of such defense, including the cost of any judgment or settlement, shall be borne by us. If we, in our sole discretion, determine that you have not used the Proprietary Marks in accordance with this Agreement, the cost of such defense, including the cost of any judgment or settlement, shall be borne by you. In the event of any litigation relating to your use of the Proprietary Marks, you shall execute any and all documents and do such acts as may, in our opinion, be necessary to carry out such defense or prosecution, including, but not limited to, becoming a nominal party to any legal action. Except to the extent that such litigation is the result of your use of the Proprietary Marks in a manner inconsistent with the terms of this Agreement, we agree to reimburse you for your out-of-pocket litigation costs in doing such acts. 6.3 Your Acknowledgments You acknowledge and agree that: 6.3.1 As between you and us, we are the owner of all right, title, and interest in and to the Proprietary Marks and the goodwill associated with and symbolized by them and we have the right to use, and license others to use, the Proprietary Marks. 6.3.2 The Proprietary Marks are valid and serve to identify the System and those who are franchised under the System. 6.3.3 During the term of this Agreement and after its expiration or termination, you shall not directly or indirectly contest the validity of, or our ownership of the Proprietary Marks, nor take any other action which may tend to jeopardize our or our affiliate's interest therein, or our right to use and to license others to use the Proprietary Marks. + +18 + +Source: SOUPMAN, INC., 8-K, 8/14/2015 + + + + + + + + 6.3.4 Your use of the Proprietary Marks pursuant to this Agreement does not give you any ownership interest or other interest in or to the Proprietary Marks other than the limited license granted by this Agreement. 6.3.5 Any and all goodwill arising from your use of the Proprietary Marks shall inure solely and exclusively to the benefit of us or our affiliate, and upon expiration or termination of this Agreement and the license herein granted no monetary amount shall be assigned as attributable to any goodwill associated with your use. 6.3.6 The right and license of the Proprietary Marks granted under this Agreement to you is non-exclusive, and we and our affiliates have and retain the rights described in Section 1.3 of this Agreement. 6.3.7 We reserve the right to change, revise, or substitute different proprietary marks for use in identifying the System and the Franchised Business, if the Proprietary Marks no longer can be used or if we, in our sole discretion, determine that substitution of different proprietary marks will be beneficial to the System. In such circumstances, the use of the substituted proprietary marks shall be governed by the terms of this Agreement, and we shall not compensate you for such substitution. If our currently licensed Proprietary Marks can no longer be used, you shall implement promptly any such substitution at your expense. 6.3.8 We shall have the right, at all reasonable times, to inspect the products and services on which the Proprietary Marks shall be used as we consider necessary to carry out the purposes of inspection as part of appropriate quality control. Upon request, you shall submit to us all packages, labels, advertising, advertising brochures and other materials bearing the Proprietary Marks and you specifically undertake to amend to our satisfaction any such packages, labels, advertising, advertising brochures and other materials which are not approved by us. 6.4 Changes in Law Affecting Proprietary Marks If trademark law is amended so as to render inapplicable any of the provisions of this Section 6, you shall execute any documents, and do such acts and things as in our opinion may be necessary to effect the intent and purpose of the provisions of this Agreement. + +19 + +Source: SOUPMAN, INC., 8-K, 8/14/2015 + + + + + + + + 7. NON-COMPETITION 7.1 Restrictions You acknowledge and agree that pursuant to this Agreement, you and your principals and employees will receive valuable specialized training, trade secrets and confidential information, including, without limitation, information regarding the operational, sales, promotional and marketing methods and techniques of us and the System, over and above the ordinary skills and experience possessed by you or your principals and employees prior to execution of this Agreement. In consideration for such training, trade secrets and confidential information, you and your principals agree that during the term of this Agreement, and for a continuous uninterrupted period commencing upon expiration or termination of this Agreement, regardless of the cause for termination, and continuing for a period of three (3) years thereafter, neither you nor your principals shall, directly or indirectly, for themselves, or through, on behalf of, or in conjunction with any person, persons, partnership, limited liability company or corporation: 7.1.1 Divert or attempt to divert any business or customer of the Franchised Business or any Unit Franchisee anywhere, by direct or indirect inducement or otherwise, or do or perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated with our Proprietary Marks or the System. 7.1.2 Employ or seek to employ any person who is at that time employed by us or by any other master franchisee or unit franchisee in the System, or otherwise directly or indirectly induce such person to leave his or her employment without our written consent. 7.1.3 Own, maintain, operate, engage in, or have any interest in any business which is the same as or similar to the Franchised Business, or any other business which performs any type of child tutoring services, anywhere. 7.2 Independent Covenants Each of the foregoing covenants shall be construed as independent of any other covenant or provision of this Agreement. If all or any portion of any covenant in this Section 7 is held unreasonable or unenforceable by a court having valid jurisdiction in any unappealed final decision to which we are a party, you and your principals shall be bound by any lesser covenant subsumed within the terms of such covenant that imposes the maximum duty permitted by law, as if the resulting covenant were separately stated in and made a part of this Section 7. 7.3 Reduction of Scope You acknowledge and agree that we shall have the right, in our sole and absolute discretion, to reduce the scope of any covenant set forth in this Section 7, or any portion thereof, without your consent, effective immediately upon written notice to you, and you further acknowledge and agree that you shall comply forthwith with any covenant as so modified, which shall be fully enforceable notwithstanding the provisions of any other provision of this Agreement. 7.4 No Defense You acknowledge and agree that the existence of any claims you may have against us, whether or not arising from this Agreement, shall not constitute a defense to our enforcement of the covenants in this Section 7. You shall pay all costs and expenses (including reasonable attorneys' fees) incurred by us in the enforcement of this Section 7. 7.5 Irreparable Injury You acknowledge and agree that any violation of the terms of this Section 7 would result in irreparable injury to us, for which no adequate remedy at law may be available, and you consent that we may apply for the issuance of an injunction prohibiting any conduct by you in violation of this Section 7, without the posting of any bond. 7.6 Additional Parties At our request, you shall require and obtain execution of covenants similar to those set forth in this Section 7 (including covenants applicable upon the termination of a person's relationship with you) from any or all principals of yours and other personnel employed by you who have received or will receive training from us or from you. Every covenant required by this Section 7.6 shall be in a form satisfactory to us, including, without limitation, specific identification of us as a third party beneficiary of such covenants with an independent right to enforce them. Your failure to obtain execution of any covenant required by this Section 7 shall constitute a material default under the terms of this Agreement. 20 + +Source: SOUPMAN, INC., 8-K, 8/14/2015 + + + + + + + + 8. MANUALS AND CONFIDENTIAL INFORMATION 8.1 Use of Manuals We shall provide the Manuals to you, on loan, for the term of this Agreement and any renewals hereof. You shall operate the Franchised Business in accordance with the standards, methods, policies, and procedures specified in the Manuals to ensure compliance with quality standards to protect the Proprietary Marks and our goodwill in the industry. You shall treat the Manuals, any other manuals created for or approved for use in the operation of the Franchised Business, and the information contained therein as confidential, and shall maintain such information as secret and confidential. You shall not at any time copy, duplicate, record, or otherwise reproduce the foregoing materials, in whole or in part, or otherwise make the same available to any unauthorized person. The Manuals shall at all times remain our sole property and shall be kept in a secure place at your office. You shall ensure that your copy of the Manuals is kept current at all times, and in the event of any dispute as to the contents of the Manuals, the terms of the master copy of the Manuals maintained by us shall be controlling. If you require or request additional copies of any of the Manuals, you agree to pay our then-current fee for each replacement volume of the Manuals required or requested. 8.2 Confidentiality of Information You shall not, during the term of this Agreement or thereafter, communicate, divulge, or use for the benefit of anyone else, any confidential information, knowledge, or know-how concerning the methods of operation of the Franchised Business which may be communicated to you, or of which you may be apprised, by virtue of your operation under the terms of this Agreement. You shall divulge such confidential information only to such of your employees as must have access to it in order to perform their employment responsibilities. Any and all matters, information, knowledge, know-how, techniques and other data which we designate as confidential shall be deemed confidential for purposes of this Agreement. 8.3 Irreparable Injury from Disclosure of Confidential Information You acknowledge that failure to comply with the requirements of this Section 8 will result in irreparable injury to us for which no adequate remedy at law may be available, and you consent to the issuance of, and agree to pay all court costs and reasonable attorneys' fees incurred by us in obtaining, without the posting of any bond, an ex parte or other order for injunctive or other legal or equitable relief with respect to the requirements of this Section 8. 8.4 Confidentiality Covenants from Individuals Associated with You You shall require any employee who may have access to any confidential information of ours to execute covenants that they will maintain the confidentiality of information they receive in connection with their association with you. Such covenants shall be in a form satisfactory to us, including, without limitation, specific identification of us as a third party beneficiary of such covenants with the independent right to enforce them. + +21 + +Source: SOUPMAN, INC., 8-K, 8/14/2015 + + + + + + + + 9. OUR OBLIGATIONS During the term of this Agreement, we shall provide you with the following: 9.1 Manuals and Assistance We will make the Manuals, training aids, and other pertinent information concerning our methods and practices available to you. You understand and acknowledge that such materials are provided to you on loan, and that such materials remain our property at all times. 9.2 Training Program We will provide you or one of your principals and up to five (5) additional persons with a comprehensive initial training program and additional training programs from time to time. Any additional training shall be at your expense. The group of trainees must include management level employees and the principal owner of at least 25% interest in the location, if it's a franchisee or the franchisee is a corporate entity. 9.3 Advice and Assistance We will have personnel available on an ongoing basis during normal business hours to provide technical assistance, consultation, and advice on marketing and operations procedures for the Franchised Business by telephone and e-mail. If you request additional on-site assistance and/or training at your Franchised Business location, you agree to pay our then-current per diem fee for each representative we send to your location, and you shall reimburse each representative's expenses while providing such on-site training or assistance, including, but not limited to, travel, lodging and meals. 9.4 Proprietary Marks We will allow you to use the Proprietary Marks in the Master Territory, subject to the limitations and restrictions set forth in this Agreement, and to use the processes, methods, materials, equipment and promotional plans developed by us. 9.5 Advice We will advise you on all appropriate facets of the System and all pertinent new developments in the operation of a The Original Soupman business and/or master franchise business. 10. DEFAULT AND TERMINATION 10.1 Termination in the Event of Bankruptcy or Insolvency You shall be in default under this Agreement, and all rights granted to you herein shall automatically terminate without notice to you, if you, or any of your partners, if you are a partnership, or any of your officers, directors, shareholders, or members, if you are a corporation or limited liability company, shall become insolvent or make a general assignment for the benefit of creditors; if a petition in bankruptcy is filed by you or such a petition is filed against and not opposed by you; if you are adjudicated a bankrupt or insolvent; if a bill in equity or other proceeding for the appointment of a receiver or other custodian for you or your business or assets is filed and consented to by you; if a receiver or other custodian (permanent or temporary) of your assets or property, or any part thereof, is appointed by any court of competent jurisdiction; if proceedings for a composition with creditors under any state or federal law should be instituted by or against you; if a final judgment remains unsatisfied or of record for thirty (30) days or longer (unless a supersedeas bond is filed); if you are dissolved; if execution is levied against your business or property; if suit to foreclose any lien or mortgage against the premises or equipment of the Franchised Business is instituted against you and not dismissed within thirty (30) days; or if the real or personal property of the Franchised Business shall be sold after levy thereupon by any sheriff, marshal, or constable. + +22 + +Source: SOUPMAN, INC., 8-K, 8/14/2015 + + + + + + + + 10.2 Termination with Notice and without Opportunity to Cure You shall be in default under this Agreement, and we may, at our option, terminate this Agreement and all rights granted under this Agreement, without affording you any opportunity to cure the default, effective immediately upon receipt of notice by you upon the occurrence of any of the following events: 10.2.1 If you at any time cease to operate or otherwise abandon the Franchised Business without our consent, or otherwise forfeit the right to do or transact business in the Master Territory. 10.2.2 If you (or an officer or director of or a shareholder in you, if you are a corporation, or a general or limited partner of you, if you are a partnership, or a member, if you are a limited liability company) are convicted of a felony, a crime involving moral turpitude, a crime against a child, or any other crime or offense that we believe is reasonably likely to have an adverse effect on the System, the Proprietary Marks, the goodwill associated therewith, or our interest therein. 10.2.3 If any purported assignment or transfer of any direct or indirect interest in this Agreement, in you, or in all or substantially all of the assets of the Franchised Business is made to any third party without our prior written consent, contrary to the terms of Section 12 of this Agreement. 10.2.4 If an approved transfer, as required by Section 12.6 of this Agreement, is not effected within the time provided following a death or permanent incapacity (mental or physical). 10.2.5 If you fail to comply with the covenants in Section 7 of this Agreement or fail to deliver to us the executed covenants required under Section 7.6 or Section 8.4 of this Agreement. 10.2.6 If, contrary to the terms of Section 8 of this Agreement, you or any principal or employee of yours disclose or divulge the contents of the Manuals or other confidential information provided to you by us. 10.2.7 If you or any principal of yours has made any material misrepresentations in connection with your application to us for the franchise granted herein. 10.2.8 If you, after curing a default pursuant to Section 10.3 of this Agreement, commit the same, similar, or different default again, whether or not cured after notice, or if you incur three (3) late fees or insufficient funds fees in any twelve (12) month period. 10.2.9 If you lose, through revocation, forfeiture, failure to renew, or otherwise, any license required with respect to the operation of the Franchised Business. 10.2.10 If you fail to successfully complete our initial training program. 10.2.11 If you understate any payment to us by two percent (2%) or more, or understate any such payment in any amount twice in any two (2) year period. + +23 + +Source: SOUPMAN, INC., 8-K, 8/14/2015 + + + + + + + + 10.2.12 If you knowingly maintain false books or records or submit any false reports or statements to us. 10.2.13 If you fail to obtain or maintain required insurance coverage and do not obtain such coverage within ten (10) days after written notice from us. 10.2.14 If, within ten (10) days after receipt of written notice from us that any required payment is overdue, you do not make such payment to us, our affiliates, or to your suppliers or creditors unless, with respect to your suppliers or creditors, you notify us of the existence on a bona fide dispute and takes immediate action to resolve it. 10.2.15 If you fail to make timely payments of any obligation of yours upon which we have advanced any funds for you or on your behalf. 10.2.16 If you (or any guarantor, officer or director of or a shareholder in you, if you are a corporation, or a general or limited partner of you, if you are a partnership, or a member, if you are a limited liability company) or any other franchisee of ours which controls, is controlled by, or is under common control with you fail to comply with any or all of the terms of this Agreement or any other agreement between us or our affiliates and you within ten (10) days after receipt of written notice from us to do so. 10.2.17 If you default in the repayment or performance of any obligation or financing transaction with third parties under which any asset of the Franchised Business is pledged as security for your performance. 10.2.18 If you fail to comply with all applicable laws and ordinances relating to the Franchised Business, including Anti- Terrorism Laws, or if your or any of your owners' assets, property, or interests are blocked under any law, ordinance, or regulation relating to terrorist activities, or you or any of your owners otherwise violate any such law, ordinance, or regulation. 10.2.19 If you fail to register the Unit Franchise Disclosure Document with any registration state applicable to the Master Territory or if you violate any requirements of applicable federal or state law related to the disclosure and sale of franchises. 10.2.20 If you fail to comply with the Minimum Development Quota. 10.3 Termination with Notice and Opportunity to Cure Except as otherwise provided in Sections 10.1 and 10.2 of this Agreement, you shall have thirty (30) days after your receipt from us of a written notice of default within which to remedy any default under this Agreement and to provide evidence thereof to us. If any such default is not cured within the specified time, or such longer period as applicable law may require, we shall have the right to terminate this Agreement by providing written notice of termination to you. You shall be in default pursuant to this Section 10.3 for failure to substantially comply with any of the requirements imposed by this Agreement, as it may from time to time reasonably be modified or supplemented by the Manuals, or your failure to carry out the terms of this Agreement in good faith. 10.4 Cross-Default Any default by you (or any person/company affiliated with you) under this Agreement may be regarded as a default under any other agreement between us (or any of our affiliates) and you (or any of your affiliates). Any default by you (or any person/company affiliated with you) under any other agreement, including, but not limited to, any lease and/or sublease, between us (or any of our affiliates) and you (or any person/company affiliated with you), and any default by you (or any person/company affiliated with you) under any obligation to us (or any of our affiliates) may be regarded as a default under this Agreement. Any default by you (or any person/company affiliated with you) under any lease, sublease, loan agreement, security interest or otherwise, whether with us, any of our affiliates and/or any third party may be regarded as a default under this Agreement and/or any other agreement between us (or any of our affiliates) and you (or any of your affiliates). + +24 + +Source: SOUPMAN, INC., 8-K, 8/14/2015 + + + + + + + + In each of the foregoing cases, we (and any of our affiliates) will have all remedies allowed at law, including termination of your rights (and/or those of any person/company affiliated with you) and our (and/or our affiliates') obligations. No right or remedy which we may have (including termination) is exclusive of any other right or remedy provided under law or equity and we may pursue any rights and/or remedies available. 10.5 Our Right to Discontinue Services to You If you are in breach of any obligation under this Agreement, and we deliver to you a notice of termination as provided herein, we have the right to suspend our performance of any of our obligations under this Agreement including, without limitation, the sale or supply of any services or products for which we are an approved supplier to you and/or suspension of your webpage and/or listing on the System Website, until such time as you correct the breach. 10.6 Termination of this Agreement by You You shall have no right to terminate this Agreement. 10.7 Without Prejudice The termination of this Agreement shall be without prejudice to any remedy or cause of action which we may have against you for the recovery of any monies due us or any equipment or other property of ours, or any other right of ours to recover damages for any breach hereof. 10.8 Amendment Pursuant to Applicable Law Notwithstanding anything to the contrary contained in this Article, if any valid, applicable law or regulation of a competent governmental authority having jurisdiction over this franchise and the parties hereto shall limit our rights of termination under this Agreement or shall require longer notice periods than those set forth above, this Agreement is deemed amended to satisfy the minimum notice periods or restrictions upon such termination required by such laws and regulations; provided, however, that such constructive amendment shall not be deemed a concession by us that the grounds for termination set forth in this Agreement do not constitute "good cause" for termination within the meaning ascribed to that term by any applicable law or regulation. We shall not be precluded from contesting the validity, enforceability or application of such laws or regulations in any action, hearing or proceeding relating to this Agreement or the termination of this Agreement. + +25 + +Source: SOUPMAN, INC., 8-K, 8/14/2015 + + + + + + + + 11. OBLIGATIONS UPON TERMINATION OR EXPIRATION Upon termination or expiration of this Agreement, all rights granted under this Agreement to you shall forthwith terminate and: 11.1 Cessation of Business You shall immediately cease to operate the Franchised Business, and shall not thereafter, directly or indirectly, represent to the public or hold yourself out as a present or former master franchisee of ours. 11.2 Cessation of Use of Confidential Information and Proprietary Marks You shall immediately and permanently cease to use, by advertising or in any other manner whatsoever, any confidential methods, procedures, and techniques associated with the System, and all Proprietary Marks and distinctive forms, slogans, signs, symbols, and devices associated with the System. 11.3 Cancellation of Assumed Name Registration You shall take such action as may be necessary to cancel any assumed name registration or equivalent registration obtained by you which contains the Proprietary Marks; and you shall furnish us with evidence satisfactory to us of compliance with this obligation within thirty (30) days after termination or expiration of this Agreement. 11.4 Payment of Monies Due; Liquidated Damages 11.4.1 You shall promptly pay all sums owing to us and our affiliates. In the event of termination for any default of yours, such sums shall include all damages, costs, and expenses, including reasonable attorneys' fees, incurred by us as a result of the default, which obligation shall give rise to and remain, until paid in full, a lien in our favor against any and all leasehold improvements, fixtures, furnishings and equipment, inventory, supplies and vehicles located at or used in connection with the Franchised Business, together with all accounts, payment intangibles, attachments, accessories, additions, substitutions and replacements, all cash and non-cash proceeds derived from insurance or the disposition of such assets, all your rights to use the Proprietary Marks, patents, copyrights and their registrations, trade secret information and other proprietary rights, and all rights granted, owned or licensed to you under this Agreement for the use of the Proprietary Marks, trade names, trade styles, patents, copyrights, trade secret information and other proprietary rights. We shall have full power and authority to file such documents as are necessary to obtain and perfect such lien. We shall have the right to set off any amounts which we deem are payable to us by you. 11.4.2 In addition to the foregoing, upon termination of this Agreement by us for cause as described in Section 10, you agree to pay to us within fifteen (15) days after the effective date of this Agreement's termination, in addition to the amounts owed hereunder, liquidated damages equal to the average monthly Unit Franchise Performance Royalty Fee and Franchise Sales Royalty Fee you paid during the twelve (12) months of operation preceding the effective date of termination multiplied by (a) twenty-four (24) (being the number of months in two (2) full years), or (b) the number of months remaining in the Agreement had it not been terminated, whichever is lower. 11.4.3 The parties hereto acknowledge and agree that it would be impracticable to determine precisely the damages we would incur from this Agreement's termination and the loss of cash flow from Royalty Fees due to, among other things, the complications of determining what costs, if any, we might have saved and how much the Royalty Fees would have grown over what would have been this Agreement's remaining term. The parties hereto consider this liquidated damages provision to be a reasonable, good faith pre-estimate of those damages. 11.4.4 The liquidated damages provision only covers our damages from the loss of cash flow from the Royalty Fees. It does not cover any other damages, including damages to our reputation with the public and landlords and damages arising from a violation of any provision of this Agreement other than the Royalty Fee sections. You and each of your principals agree that the liquidated damages provision does not give us an adequate remedy at law for any default under, or for the enforcement of, any provision of this Agreement other than the Royalty Fee sections. + +26 + +Source: SOUPMAN, INC., 8-K, 8/14/2015 + + + + + + + + 11.5 Costs to Secure Compliance You shall pay to us all damages, costs, and expenses, including reasonable attorneys' fees, incurred by us prior or subsequent to the termination or expiration of the franchise herein granted in obtaining injunctive or other relief for the enforcement of any provisions of this Section 11. 11.6 Return of Manuals and Other Confidential Information You shall immediately deliver to us the Manuals and all other records, correspondence, files, and any instructions containing confidential information relating to the operation of the Franchised Business which are in your possession, and all copies thereof, all of which are acknowledged to be our property. 11.7 Irreparable Injury to Us You agree and acknowledge that your failure to comply with the provisions of this Section 11 will result in irreparable harm to us and to the Proprietary Marks, and you agree to pay all damages, expenses, court costs and reasonable attorneys' fees incurred by us in obtaining specific performance of, or an injunction against violation of, and/or damages resulting from a violation of, the requirements of this Section 11. 11.8 Compliance with Post-Term Covenants All of your covenants, obligations, and agreements which by their terms or by reasonable implication are to be performed, in whole or in part, after the termination or expiration of this Agreement, shall survive such termination or expiration. 12. TRANSFER OF INTEREST 12.1 Transfer by Us We shall have the right to assign this Agreement and all of our attendant rights and privileges to any person, firm, corporation or other entity provided that, with respect to any assignment resulting in the subsequent performance by the assignee of our functions: (i) the assignee shall, at the time of such assignment, be financially responsible and economically capable of performing our obligations; and (ii) the assignee shall expressly assume and agree to perform such obligations. You expressly affirm and agree that we may sell our assets, our rights to the Proprietary Marks or to the System outright to a third party; may go public; may engage in a private placement of some or all of our securities; may merge, acquire other corporations, or be acquired by another corporation; may undertake a refinancing, recapitalization, leveraged buyout or other economic or financial restructuring; and, with regard to any or all of the above sales, assignments and dispositions, you expressly and specifically waive any claims, demands or damages arising from or related to the loss of said Proprietary Marks (or any variation thereof) and/or the loss of association with or identification of "Kiosk Concepts, Inc." as Franchisor. Nothing contained in this Agreement shall require us to remain in the same business or to offer the same products and services, whether or not bearing the Proprietary Marks, in the event that we exercise our right to assign our rights in this Agreement. + +27 + +Source: SOUPMAN, INC., 8-K, 8/14/2015 + + + + + + + + 12.2 Transfer by You You understand and acknowledge that the rights and duties set forth in this Agreement are personal to you, and that we have granted this franchise in reliance on your (or, if you are a corporation, partnership, or limited liability company, your principals') business skill, financial capacity, and personal character. Accordingly, neither you nor any immediate or remote successor to any part of your interest in this Agreement, nor any individual, partnership, corporation, or other legal entity which directly or indirectly owns any interest in you shall not sell, encumber, assign, transfer, convey, pledge, merge, or give away any direct or indirect interest in this Agreement, in you, or in all or substantially all of the assets of the Franchised Business. Any change in the control of you shall be deemed a transfer for purposes of this Agreement. Any purported assignment or transfer shall be null and void and shall constitute a material breach of this Agreement, for which we may immediately terminate without opportunity to cure pursuant to Section 10.2.3 of this Agreement. 12.3 Granting of a Security Interest by You You shall not grant a security interest in the Franchised Business or in any of the assets of the Franchised Business without first obtaining our prior written consent. Our consent or refusal to consent may be based upon whatever factors we, in our sole discretion, deem economically and commercially reasonable in protecting our interests and security interest under this Agreement and the relationship created under this Agreement; however, if you are in good standing under this Agreement and all other agreements between us or our affiliates and you, we shall, upon your written request, execute a written subordination of our security interest to lenders and/or lessors providing financing for the Franchised Business. Under any circumstances however, we shall not consent to any such granting of a security interest unless all of the following conditions are met: 12.3.1 Such security is granted only for the purpose of securing a loan in your favor, which loan shall only be for the benefit of the Franchised Business. 12.3.2 In the event of any default by you under any documents in any way relating to the security interest or the loan to which it relates, we shall have the right at our sole option (but not the obligation) to cure any such default and/or to be substituted as obligor to the lender whose interests are secured by such security interest. 12.3.3 In the event of any such default, and if we choose to be substituted as obligor, we shall be so substituted in all respects on the same terms and conditions to which you were subject, except that any acceleration of the obligations secured, due to your default, shall be void upon cure by us. 12.3.4 Such other conditions and terms as we shall deem necessary and/or prudent to protect our interests under this Agreement. 12.4 Transfer Upon Death or Disability Upon the death or permanent disability (mental or physical) of any person with an interest in this Agreement, in you, or in all or substantially all of the assets of the Franchised Business, the executor, administrator, or personal representative of such person shall transfer such interest to a third party approved by us within twelve (12) months after such death or disability. Such transfers, including, without limitation, transfers by devise or inheritance, shall be subject to the same conditions as any inter vivos transfer, except that the transfer fee shall be waived. In the case of transfer by devise or inheritance, however, if the heirs or beneficiaries of any such person are unable to meet the conditions of this Section 12, the executor, administrator, or personal representative of the decedent shall transfer the decedent's interest to another party approved by us within twelve (12) months, which disposition shall be subject to all the terms and conditions for transfers contained in this Agreement. We may, at our option, assume management and control of the Franchised Business during such twelve (12) month period and shall be paid a reasonable monthly management fee for our services as determined by us. If the interest is not disposed of within such period, we may, at our option, terminate this Agreement pursuant to Section 10.2.4 of this Agreement. + +28 + +Source: SOUPMAN, INC., 8-K, 8/14/2015 + + + + + + + + 12.5 Non-Waiver of Claims Our consent to a transfer shall not constitute a waiver of any claims we may have against the transferring party, nor shall it be deemed a waiver of our right to demand exact compliance with any of the terms of this Agreement by the transferor or transferee. 12.6 Transfer by You in Bankruptcy - Right of First Refusal If, for any reason, this Agreement is not terminated pursuant to Section 10.1 and this Agreement is assumed, or assignment of the same to any person or entity who has made a bona fide offer to accept an assignment of this Agreement is contemplated pursuant to the United States Bankruptcy Code, then notice of such proposed assignment or assumption setting forth: (a) the name and address of the proposed assignee, and (b) all of the terms and conditions of the proposed assignment and assumption shall be given to us within twenty (20) days after receipt of such proposed assignee's offer to accept assignment of this Agreement, and, in any event, within ten (10) days prior to the date application is made to a court of competent jurisdiction for authority and approval to enter into such assignment and assumption, and we shall thereupon have the prior right and option, to be exercised by notice given at any time prior to the effective date of such proposed assignment and assumption, to accept an assignment of this Agreement to us upon the same terms and conditions and for the same consideration, if any, as in the bona fide offer made by the proposed assignee, less any brokerage commissions which may be payable by you out of the consideration to be paid by such assignee for the assignment of this Agreement. 13. UNIT FRANCHISEES 13.1 Form of Unit Franchise Disclosure Document and Unit Franchise Agreement All Unit Franchise Disclosure Documents and Unit Franchise Agreements utilized by you with Unit Franchisees in the Master Territory shall be in substantially the form of our then-current Unit Franchise Disclosure Document and Unit Franchise Agreement, which shall be prepared by you in accordance with the provisions of this Section and those of Section 5.1, and shall be reviewed and approved by us or our counsel. You shall not use any Unit Franchise Disclosure Document or Unit Franchise Agreement that we or our counsel have disapproved. You shall not use any Unit Franchise Disclosure Document that has not been registered in any registration state applicable to the Master Territory. You and we acknowledge and agree that we are a third-party beneficiary to all Unit Franchise Agreements between you and Unit Franchisees in the Master Territory, and that we shall have the right to assume any of your responsibilities, duties or functions under such Unit Franchise Agreements in the event that this Agreement expires or is terminated for any reason. You shall include in the standard Unit Franchise Agreement used by you a provision which states that we are a third-party beneficiary to the Unit Franchise Agreement and are entitled to the rights granted in this Section 13. We shall have the right, but not the obligation, to enforce any provision of any Unit Franchise Agreement if you fail to properly and promptly do so. You shall not terminate any Unit Franchisee without our prior written consent. + +29 + +Source: SOUPMAN, INC., 8-K, 8/14/2015 + + + + + + + + 13.2 Unit Franchise Disclosure Document and Unit Franchise Agreement Amendments If you desire to change, modify, adjust or amend the terms of our form of the Unit Franchise Disclosure Document and/or Unit Franchise Agreement for the purpose of adapting the Unit Franchise Disclosure Document and/or Unit Franchise Agreement to reflect any terms or conditions which are peculiar to your circumstances or to reflect legal requirements which are peculiar to the Master Territory, or which are required by federal or state law and including, but not limited to, your obligation to update the Unit Franchise Disclosure Document annually as required by applicable law, you shall submit copies of the revised Unit Franchise Disclosure Document and/or Unit Franchise Agreement which include the requested changes to us and/or our counsel no less than thirty (30) days prior to the date said change, modification, adjustment or amendment is to be implemented. We reserve the right to deny the change, modification, adjustment or amendment and/or may recommend additional changes or modifications. No such change shall materially affect the terms and condition of this Agreement. You understand and acknowledge that you are solely responsible for ensuring that any material changes you make to the Unit Franchise Disclosure Document, once approved by us or our counsel, shall be submitted as an amendment to any registration state applicable to the Master Territory at your expense. You further understand and acknowledge that you shall renew the Unit Franchise Disclosure Document with such registration state(s) according to the rules of such registration state(s), but not less frequently than annually, at your expense. 13.3 Use of Proprietary Marks You shall have the responsibility and duty to properly supervise the use of the Proprietary Marks in the Master Territory. Your failure to exercise the proper diligence in enforcing the terms of any Unit Franchise Agreement and to insure the appropriate monitoring and use of the Proprietary Marks shall constitute a default under the terms of this Agreement which may result in termination of this Agreement. 13.4 Effect of Termination of this Agreement In the event this Agreement is terminated or expires prior to the end of the term of this Agreement, those portions of this Agreement which pertain to and apply to any Unit Franchise Agreement will continue in full force and effect, but only with regard to those Unit Franchise Agreements which have been entered into and were in effect prior to the date of termination or expiration of this Agreement. 13.5 Unit Franchise Refund Policy You shall comply with our requirements related to a Unit Franchisee's right to terminate its Unit Franchise Agreement according to the terms of such Unit Franchise Agreement, if any, as well as our policy regarding refunds of initial franchise fees to Unit Franchisees, if any. 14. INDEPENDENT CONTRACTOR AND INDEMNIFICATION 14.1 No Fiduciary Relationship This Agreement does not create a fiduciary relationship between the parties hereto. You shall be an independent contractor; and nothing in this Agreement is intended to constitute or appoint either party an agent, legal representative, subsidiary, joint venturer, partner, employee, or servant of the other for any purpose whatsoever. + +30 + +Source: SOUPMAN, INC., 8-K, 8/14/2015 + + + + + + + + 14.2 Public Notice of Independent Status You shall conspicuously identify yourself and the Franchised Business in all dealings with your customers, contractors, suppliers, public officials, and others, as an independent master franchisee of ours, and shall place such notice of independent ownership in your Franchised Business and on all forms. We shall have the right to specify the language of any such notice. 14.3 Independent Contractor You acknowledge and agree that you are not authorized to make any contract, agreement, warranty, or representation on our behalf, or to incur any debt or other obligations in our name; and that we shall in no event assume liability for, or be deemed liable under this Agreement as a result of, any such action; nor shall we be liable by reason of any act or omission of yours in your conduct of the Franchised Business or for any claim or judgment arising therefrom against you or us. 14.4 Indemnification You shall indemnify and hold harmless to the fullest extent by law us, our affiliates and our respective directors, officers, employees, shareholders, and agents, (collectively the "Indemnitees") from any and all losses and expenses (as hereinafter defined) incurred in connection with any litigation or other form of adjudicatory procedure, claim, demand, investigation, or formal or informal inquiry (regardless of whether same is reduced to judgment) or any settlement thereof which arises directly or indirectly from, as a result of, or in connection with your operation of the Franchised Business including, but not limited to, claims arising as a result of the maintenance and operation of vehicles (collectively an "event"), and regardless of whether same resulted from any strict or vicarious liability imposed by law on the Indemnitees; provided, however, that this indemnity shall not apply to any liability arising from the gross negligence of the Indemnitees (except to the extent that joint liability is involved, in which event the indemnification provided herein shall extend to any finding of comparative negligence or contributory negligence attributable to you). For the purpose of this Section 14.4, the term "losses and expenses" shall be deemed to include compensatory, exemplary, or punitive damages; fines and penalties; attorneys' fees; experts' fees; court costs; costs associated with investigating and defending against claims; settlement amounts; judgments; compensation for damages to our reputation and goodwill; and all other costs associated with any of the foregoing losses and expenses. You shall give us prompt notice of any event of which you are aware for which indemnification is required and, at your expense and risk, we may elect to assume (but under no circumstance are obligated to undertake) the defense and/or settlement thereof, provided that we will seek your advice and counsel. Any assumption of ours shall not modify your indemnification obligation. We may, in our sole judgment, take such actions as we deem necessary and appropriate to investigate, defend, or settle any event or take other remedial or corrective actions with respect thereto as may be, in our sole judgment, necessary for the protection of the Indemnitees or the System. You shall defend us and each of our affiliates, officers, directors, shareholders, agents, and employees named in any lawsuit based on such loss or expenses and shall pay all costs and reasonable attorneys' fees associated with such defense. If we wish to retain our own counsel to defend any such action, you shall reimburse us for all reasonable costs and legal fees incurred by us for such defense. Said reimbursement shall be made to us in a timely manner upon demand as such fees are incurred by us and billed to you. + +31 + +Source: SOUPMAN, INC., 8-K, 8/14/2015 + + + + + + + + 15. APPROVALS, WAIVERS AND NOTICES 15.1 Obtaining Approvals Whenever this Agreement requires our prior approval or consent, you shall make a timely written request to us therefor, and such approval or consent must be obtained in writing. We make no warranties or guarantees upon which you may rely, and assume no liability or obligation to you by providing any waiver, approval, consent, or suggestion to you in connection with this Agreement, or by reason of any neglect, delay, or denial of any request therefor. 15.2 No Waiver No delay, waiver, omission, or forbearance on our part to exercise any right, option, duty, or power arising out of any breach or default by you, or by any other franchisee, of any of the terms, provisions, or covenants thereof, and no custom or practice by the parties at variance with the terms of this Agreement, shall constitute our waiver to enforce any such right, option, or power as against you, or as to a subsequent breach or default by you. Subsequent acceptance by us of any payments due to us under this Agreement shall not be deemed to be our waiver of any preceding or succeeding breach by you of any terms, covenants, or conditions of this Agreement. 15.3 Notices All notices or demands shall be in writing and shall be served in person, by Express Mail, by certified mail; by private overnight delivery; or by facsimile. Service shall be deemed conclusively made (a) at the time of service, if personally served; (b) twenty-four (24) hours (exclusive of weekends and national holidays) after deposit in the United States mail, properly addressed and postage prepaid, if served by Express Mail; (c) upon the earlier of actual receipt or three (3) calendar days after deposit in the United States mail, properly addressed and postage prepaid, return receipt requested, if served by certified mail; (d) twenty-four (24) hours after delivery by the party giving the notice, statement or demand if by private overnight delivery; and (e) at the time of transmission by facsimile, if such transmission occurs prior to 5:00 p.m. on a business day and a copy of such notice is mailed within twenty-four (24) hours after the transmission. Notices and demands shall be given to the respective parties at the following addresses, unless and until a different address has been designated by written notice to the other party: To Franchisor: Kiosk Concepts, Inc. 1110 South Avenue Staten Island, New York 10314 Attention: President Fax: With a copy to: Harold L. Kestenbaum, Esq. 90 Merrick Avenue, Suite 601 East Meadow, New York 11554 Fax: (516) 745-0293 To Master Franchisee: The Grilled Cheese Truck, Inc. 151 North Nob Hill Road, Suite 321 Fort Lauderdale, FL. 33324 Fax: 32 + +Source: SOUPMAN, INC., 8-K, 8/14/2015 + + + + + + + + With a copy to: Martin J. Brill, Esq. Levene, Neale, Bender, Yoo & Brill, LLP 10250 Constellation Blvd., Suite 1700 Los Angeles, CA 90067 Fax: (310 229-1244 Either party may change its address for the purpose of receiving notices, demands and other communications as herein provided by a written notice given in the manner aforesaid to the other party. 16. ENTIRE AGREEMENT; SEVERABILITY AND CONSTRUCTION 16.1 Entire Agreement This Agreement, any attachments hereto, and any ancillary agreements between you and us or any affiliate which are executed contemporaneously with this Agreement, constitute the entire and complete Agreement between us (and, if applicable, any affiliate) and you concerning the subject matter thereof, and supersede all prior agreements. You acknowledge that you are entering into this Agreement, and any ancillary agreements executed contemporaneously herewith, as a result of your own independent investigation of the business franchised hereby and not as a result of any representation made by us or persons associated with us, or other franchisees, which are contrary to the terms herein set forth or which are contrary to the terms of any Franchise Disclosure Document or other similar document required or permitted to be given to you pursuant to applicable law. Except for those permitted under this Agreement to be made unilaterally by us, no amendment, change, or variation from this Agreement shall be binding on either party unless mutually agreed to by the parties and executed by their authorized officers or agents in writing. Nothing in this Section 16.1 is intended to disclaim, or require you to waive reliance on, any representation made in the Franchise Disclosure Document (the "FDD") that we have provided to you, except with respect to specific contract terms and conditions set forth in the FDD that you have voluntarily waived during the course of franchise-sale negotiations. 16.2 Severability and Construction Except as expressly provided to the contrary herein, each section, paragraph, part, term, and provision of this Agreement shall be considered severable; and if, for any reason, any section, paragraph, part, term, provision, and/or covenant herein is determined to be invalid and contrary to, or in conflict with, any existing or future law or regulation by a court or agency having valid jurisdiction, such shall not impair the operation of, or have any other effect upon, such other portions, sections, paragraphs, parts, terms, provisions, and/or covenants of this Agreement as may remain otherwise intelligible; and the latter shall continue to be given full force and effect and bind the parties hereto; and the invalid portions, sections, paragraphs, parts, terms, provisions, and/or covenants shall be deemed not to be a part of this Agreement. Neither this Agreement or any uncertainty or ambiguity in this Agreement shall be construed or resolved against the drafter of this Agreement, whether under any rule of construction or otherwise. On the contrary, this Agreement has been review by all parties and shall be construed and interpreted according to the ordinary meaning of the words used to fairly accomplish the purposes and intentions of all parties to this Agreement. We and you intend that if any provision of this Agreement is susceptible to two or more constructions, one of which would render the provision enforceable and the other or others of which would render the provision unenforceable, the provision shall be given the meaning that renders it enforceable. 33 + +Source: SOUPMAN, INC., 8-K, 8/14/2015 + + + + + + + + 16.3 Survival of Obligations After Expiration or Termination of Agreement Any provision or covenant of this Agreement which expressly or by its nature imposes obligations beyond the expiration or termination of this Agreement shall survive such expiration or termination. 16.4 Survival of Modified Provisions You expressly agree to be bound by any promise or covenant imposing the maximum duty permitted by law which is subsumed within the terms of any provision of this Agreement, as though it were separately articulated in and made a part of this Agreement, that may result from striking from any of the provisions of this Agreement any portion or portions which a court or agency having valid jurisdiction may hold to be unreasonable and unenforceable in an unappealed final decision to which we are a party, or from reducing the scope of any promise or covenant to the extent required to comply with such a court or agency order. 16.5 Captions All captions in this Agreement are intended for the convenience of the parties, and none shall be deemed to affect the meaning or construction of any provision of this Agreement. 16.6 Responsibility The term "Master Franchisee" or "you" as used in this Agreement shall refer to each person executing this Agreement as Master Franchisee/you, whether such person is one of the spouses, partners, shareholders, members, trustees, trustors or beneficiaries or persons named as included in Master Franchisee/you, and shall apply to each such person as if he were the only named Master Franchisee in this Agreement. 16.6.1 If Master Franchisee is a married couple, both husband and wife executing this Agreement shall be liable for all obligations and duties of Master Franchisee under this Agreement as if such spouse were the sole Master Franchisee under this Agreement. 16.6.2 If Master Franchisee is a partnership or if more than one person executes this Agreement as Master Franchisee, each partner or person executing this Agreement shall be liable for all the obligations and duties of Master Franchisee under this Agreement. 16.6.3 If Master Franchisee is a trust, each trustee, trustor and beneficiary signing this Agreement shall be liable for all of the obligations and duties of Master Franchisee under this Agreement. 16.6.4 If Master Franchisee is a corporation or limited liability company, all shareholders or members executing this Agreement shall be liable for all obligations and duties of Master Franchisee under this Agreement as if each such shareholder or member were the sole Master Franchisee under this Agreement. 16.6.5 If you are in breach or default under this Agreement, we may proceed directly against each such spouse, partner, signatory to this Agreement, shareholder, member, trustee, trustor or beneficiary without first proceeding against you and without proceeding against or naming in such suit any other Master Franchisee, partner, signatory to this Agreement, shareholder, member, trustee, trustor or beneficiary. The obligations of you and each such spouse, partner, person executing this Agreement, shareholder, member, trustee, trustor and beneficiary shall be joint and several. 34 + +Source: SOUPMAN, INC., 8-K, 8/14/2015 + + + + + + + + 16.6.6 Notice to or demand upon one spouse, partner, person signing this Agreement, shareholder, member, trustee, trustor or beneficiary shall be deemed notice to or demand upon you and all such spouses, partners, persons signing this Agreement, shareholders, members, trustees, trustors and beneficiaries, and no notice or demand need be made to or upon all such Master Franchisee's spouses, partners, persons executing this Agreement, shareholders, members, trustees, trustors or beneficiaries. 16.6.7 The cessation of or release from liability of you, or any such spouse, partner, person executing this Agreement, shareholder, member, trustee, trustor or beneficiary shall not relieve any other Master Franchisee, spouse, partner, person executing this Agreement, shareholder, member, trustee, trustor or beneficiary from liability under this Agreement, except to the extent that the breach or default has been remedied or monies owed have been paid. 16.7 Corporation, Partnership or Limited Liability Company 16.7.1 Except as otherwise approved in writing by us, if you are a corporation, you shall: (a) confine your activities, and your governing documents shall at all times provide that your activities are confined, exclusively to operating the Franchised Business; (b) maintain stop transfer instructions on your records against the transfer of any equity securities and shall only issue securities upon the face of which a legend, in a form satisfactory to us, appears which references the transfer restrictions imposed by this Agreement; (c) not issue any non-voting securities convertible into voting securities; (d) maintain a Schedule of Principals with a current list of all owners of record and all beneficial owners of any class of voting stock of you and furnish the list to us upon request. In addition, each present and future shareholder of yours shall jointly and severally guarantee your performance of each and every provision of this Agreement by executing a Guarantee in the form attached to this Agreement as Attachment B. 16.7.2 If you are a partnership you shall: (a) furnish us with your partnership agreement as well as such other documents as we may reasonably request, and any amendments thereto; and (b) prepare and furnish to us a Schedule of Principals with a current list of all general and limited partners in you. In addition, each present and future general partner of yours shall jointly and severally guarantee your performance of each and every provision of this Agreement by executing a Guarantee in the form attached to this Agreement as Attachment B. 16.7.3 If you are a limited liability company, you shall: (a) furnish us with a copy of your articles of organization and operating agreement, as well as such other documents as we may reasonably request, and any amendments thereto; (b) prepare and furnish to us a Schedule of Principals with a current list of all members and managers in you; and (c) maintain stop transfer instructions on your records against the transfer of equity securities and shall only issue securities upon the face of which bear a legend, in a form satisfactory to us. In addition, each present and future member of yours shall jointly and severally guarantee your performance of each and every provision of this Agreement by executing a Guarantee in the form attached to this Agreement as Attachment B. 17. APPLICABLE LAW 17.1 Choice of Law This Agreement shall be interpreted and construed under the laws of the State of New York. In the event of any conflict of law, the laws of New York shall prevail, without regard to the application of such state's conflict of law rules. If, however, any provision of this Agreement would not be enforceable under the laws of New York, and if the Franchised Business is located outside of New York and such provision would be enforceable under the laws of the state in which the Franchised Business is located, then such provision shall be interpreted and construed under the laws of that other state. Nothing in this Section 17.1 is intended by the parties to subject this Agreement to laws, rules, or regulation of any state to which it would not otherwise be subject. 35 + +Source: SOUPMAN, INC., 8-K, 8/14/2015 + + + + + + + + 17.2 Non-Binding Mediation 17.2.1 Franchisor and Franchisee acknowledge that during the term of this Agreement disputes may arise between the parties that may be resolvable through mediation. To facilitate such resolution, Franchisor and Franchisee agree that each party shall submit the dispute between them for non-binding mediation at a mutually agreeable location before commencing litigation proceedings If Franchisor and Franchisee cannot agree on a location, the mediation will be conducted in Staten Island, New York. The mediation will be conducted by one (1) mediator who is appointed under the American Arbitration Association's Commercial Mediation Rules and who shall conduct the mediation in accordance with such rules. Franchisor and Franchisee agree that statements made by Franchisor, Franchisee or any other party in any such mediation proceeding will not be admissible in any other legal proceeding. Each party shall bear its own costs and expenses of conducting the mediation and share equally the costs of any third parties who are required to participate in the mediation . 17.2.2 If any dispute between the parties cannot be resolved through mediation within forty-five (45) days following the appointment of the mediator, the parties agree to resolve such dispute pursuant to litigation in the County of New York, State of New York 17.3 Venue The parties agree that any action brought by either party against the other in any court, whether federal or state, shall be brought within the County of New York, State of New York at the time the action is initiated, and the parties hereby waive all questions of personal jurisdiction or venue for the purpose of carrying out this provision. 17.4 Non-exclusivity of Remedy No right or remedy conferred upon or reserved to us or you by this Agreement is intended to be, nor shall be deemed, exclusive of any other right or remedy herein or by law or equity provided or permitted, but each shall be cumulative of every other right or remedy. 17.5 Right to Injunctive Relief Nothing herein contained shall bar the right of either party to seek and obtain temporary and permanent injunctive relief from a court of competent jurisdiction consistent with this Section 17 in accordance with applicable law against threatened conduct that will in all probability cause loss or damage to you or us. 17.6 Incorporation of Recitals The recitals set forth in Paragraphs A through C of this Agreement are true and correct and are hereby incorporated by reference into the body of this Agreement. 36 + +Source: SOUPMAN, INC., 8-K, 8/14/2015 + + + + + + + + 18. SECURITY INTEREST 18.1 Collateral You grant to us a security interest ("Security Interest") in all of the furniture, fixtures, equipment, signage, and realty (including your interests under all real property and personal property leases) of the Franchised Business, together with all similar property now owned or hereafter acquired, additions, substitutions, replacements, proceeds, and products thereof, wherever located, used in connection with the Franchised Business. All items in which a security interest is granted are referred to as the "Collateral". 18.2 Indebtedness Secured The Security Interest is to secure payment of the following (the "Indebtedness"): 18.2.1 All amounts due under this Agreement or otherwise by you; 18.2.2 All sums which we may, at our option, expend or advance for the maintenance, preservation, and protection of the Collateral, including, without limitation, payment of rent, taxes, levies, assessments, insurance premiums, and discharge of liens, together with interest, or any other property given as security for payment of the Indebtedness; 18.2.3 All expenses, including reasonable attorneys' fees, which we incur in connection with collecting any or all Indebtedness secured hereby or in enforcing or protecting our rights under the Security Interest and this Agreement; and 18.2.4 All other present or future, direct or indirect, absolute or contingent, liabilities, obligations, and indebtedness of you to us or third parties under this Agreement, however created, and specifically including all or part of any renewal or extension of this Agreement, whether or not you execute any extension agreement or renewal instruments. Our security interest, as described herein, shall be subordinated to any financing related to your operation of the Franchised Business, including, but not limited to, a real property mortgage and equipment leases. 18.3 Additional Documents You will from time to time as required by us join with us in executing any additional documents and one or more financing statements pursuant to the Uniform Commercial Code (and any assignments, extensions, or modifications thereof) in form satisfactory to us. 18.4 Possession of Collateral Upon default and termination of your rights under this Agreement, we shall have the immediate right to possession and use of the Collateral. 18.5 Our Remedies in Event of Default You agree that, upon the occurrence of any default set forth above, the full amount remaining unpaid on the Indebtedness secured shall, at our option and without notice, become due and payable immediately, and we shall then have the rights, options, duties, and remedies of a secured party under, and you shall have the rights and duties of a debtor under, the Uniform Commercial Code of New York (or other applicable law), including, without limitation, our right to take possession of the Collateral and without legal process to enter any premises where the Collateral may be found. Any sale of the Collateral may be conducted by us in a commercially reasonable manner. Reasonable notification of the time and place of any sale shall be satisfied by mailing to you pursuant to the notice provisions set forth above. 37 + +Source: SOUPMAN, INC., 8-K, 8/14/2015 + + + + + + + + 18.6 Special Filing as Financing Statement This Agreement shall be deemed a Security Agreement and a Financing Statement. This Agreement may be filed for record in the real estate records of each county in which the Collateral, or any part thereof, is situated and may also be filed as a Financing Statement in the counties or in the office of the Secretary of State, as appropriate, in respect of those items of Collateral of a kind or character defined in or subject to the applicable provisions of the Uniform Commercial Code as in effect in the appropriate jurisdiction. 19. ACKNOWLEDGMENTS 19.1 Recognition of Business Risks You acknowledge that you have conducted an independent investigation of the proposed franchise, and recognize that the business venture contemplated by this Agreement involves business risks and that your success will be largely dependent upon your ability as an independent business person. We expressly disclaim the making of, and you acknowledge that you have not received, any warranty or guarantee, express or implied, as to the potential sales, income, profits, or success of the business venture contemplated by this Agreement, or of other Franchised Businesses. 19.2 Receipt of Franchise Disclosure Document You acknowledge that you have received a copy of our complete FDD for Master Franchised Businesses at least (14) calendar days prior to the date on which this Agreement was executed or any payment was made to us or any of our affiliates. You acknowledge and agree that we have made no promises, representations, warranties or assurances to you which are inconsistent with the terms of this Agreement or our FDD concerning the profitability or likelihood of success of the Franchised Business, that you have been informed by us that there can be no guaranty of success in the Franchised Business, and that your business ability and aptitude is primary in determining your success. 19.3 Review of Agreement You acknowledge that you have read and understood this Agreement, the attachments hereto, and agreements relating thereto, if any, and that we have accorded you ample time and opportunity to consult with advisors and counsel of your own choosing about the potential benefits and risks of entering into this Agreement. 19.4 Attorneys' Fees If we become a party to any legal proceedings concerning this Agreement or the Franchised Business by reason of any act or omission of you or your authorized representatives, you shall be liable to us for the reasonable attorneys' fees and court costs incurred by us in the legal proceedings. If either party commences a legal action against the other party arising out of or in connection with this Agreement, the prevailing party shall be entitled to have and recover from the other party its reasonable attorneys' fees and costs of suit. 19.5 Atypical Arrangements You acknowledge and agree that we may modify the offer of our franchises to other franchisees in any manner and at any time, which offers have or may have terms, conditions, and obligations which may differ from the terms, conditions, and obligations in this Agreement. You further acknowledge and agree that we have made no warranty or representation that all Master Franchise Agreements previously issued or issued after this Master Franchise Agreement by us do or will contain terms substantially similar to those contained in this Master Franchise Agreement. We may, in our reasonable business judgment and our sole and absolute discretion, due to local business conditions or otherwise, waive or modify comparable provisions of other Master Franchise Agreements executed before or after the date of this Master Franchise Agreement with other Master Franchisees in a non-uniform manner. 38 + +Source: SOUPMAN, INC., 8-K, 8/14/2015 + + + + + + + + 19.6 Limitation of Adjudicative Proceedings Any and all claims and actions arising out of or relating to this Agreement, the relationship of you and us, or your operation of the Franchised Business, brought by any party hereto against the other, shall be commenced within two (2) years from the occurrence of the facts giving rise to such claim or action, or such claim or action shall be barred. 19.7 Trial by Jury WE AND YOU EACH HEREBY WAIVE OUR RESPECTIVE RIGHT TO TRIAL BY JURY OF ANY CAUSE OF ACTION, CLAIM, COUNTERCLAIM OR CROSS-COMPLAINT IN ANY ACTION, PROCEEDING AND/OR HEARING BROUGHT BY EITHER US OR YOU ON ANY MATTER WHATSOEVER ARISING OUT OF, OR IN ANY WAY CONNECTED WITH, THIS AGREEMENT, THE RELATIONSHIP OF THE PARTIES, THE USE OF THE PROPRIETARY MARKS OR SYSTEM BY YOU, OR ANY CLAIM OF INJURY OR DAMAGE, OR THE ENFORCEMENT OF ANY REMEDY UNDER ANY LAW, STATUTE, REGULATION, EMERGENCY OR OTHERWISE, NOW OR HEREAFTER IN EFFECT, TO THE FULLEST EXTENT PERMITTED UNDER LAW. 19.8 Punitive or Exemplary Damages We and you, and our respective directors, officers, shareholders and guarantors, as applicable, each hereby waive to the fullest extent permitted by law, any right to, or claim for, punitive or exemplary damages against the other and agree that, in the event of a dispute between them, each is limited to recovering only the actual damages proven to have been sustained by it. 19.9 Additional Documents Each of the parties agrees to execute, acknowledge and deliver to the other party and to procure the execution, acknowledgment and delivery to the other party of any additional documents or instruments which either party may reasonably require to fully effectuate and carry out the provisions of this Agreement. 19.10 Counterparts This Agreement may be executed by the parties in one or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument. 39 + +Source: SOUPMAN, INC., 8-K, 8/14/2015 + + + + + + + + IN WITNESS WHEREOF, the parties have executed this Agreement on the date first shown above. KIOSK CONCEPTS, INC.: By: Witness Name: Title: MASTER FRANCHISEE : THE GRILLED CHEESE TRUCK, INC. By: Witness Name: Title: 40 + +Source: SOUPMAN, INC., 8-K, 8/14/2015 + + + + + + + +SCHEDULE OF PRINCIPALS (Not Applicable) ANY OTHER PERSON NOT LISTED IN THIS AGREEMENT WHO IS A SPOUSE, PARTNER, AN OFFICER, DIRECTOR, SHAREHOLDER, GENERAL PARTNER OR MEMBER OF MASTER FRANCHISEE: Name: Address: Telephone: Relationship: Name: Address: Telephone: Relationship: Name: Address: Telephone: Relationship: Name: Address: Telephone: Relationship: Name: Address: Telephone: Relationship: Name: Address: Telephone: Relationship: + +Source: SOUPMAN, INC., 8-K, 8/14/2015 + + + + + + + + Attachment A to Master Franchise Agreement MASTER TERRITORY AND COMMENCEMENT DATE MASTER TERRITORY: North America COMMENCEMENT DATE: Upon approval of the State of New York. KIOSK CONCEPTS, INC. MASTER FRANCHISEE THE GRILLED CHEESE TRUCK, INC. By: By: Name: Name: Title: Title: + +Source: SOUPMAN, INC., 8-K, 8/14/2015 \ No newline at end of file diff --git a/full_contract_txt/SoupmanInc_20150814_8-K_EX-10.1_9230148_EX-10.1_Franchise Agreement2.txt b/full_contract_txt/SoupmanInc_20150814_8-K_EX-10.1_9230148_EX-10.1_Franchise Agreement2.txt new file mode 100644 index 0000000000000000000000000000000000000000..79e8c8e33e82d9085eaedcf33b877c48e6a9f74b --- /dev/null +++ b/full_contract_txt/SoupmanInc_20150814_8-K_EX-10.1_9230148_EX-10.1_Franchise Agreement2.txt @@ -0,0 +1,17 @@ +Attachment B to Master Franchise Agreement GUARANTEES OF MASTER FRANCHISE AGREEMENT As an i nducemen t t o K iosk Concep t s , I nc . ( "F ranch i so r " ) t o en t e r i n to a Mas t e r F r anch i s e Agreemen t w i th __N/A____________________ ("Master Franchisee") dated __________________, 20____ (the " Master Franchise Agreement"), ___________________________________ ("Guarantors"), jointly and severally agree as follows: A. Guarantors shall pay or cause to be paid to Franchisor all monies payable by Master Franchisee under the Master Franchise Agreement on the days and times and in the manner therein appointed for payment thereof. B. Guarantors shall unconditionally guarantee full performance and discharge by Master Franchisee of all the obligations of Master Franchisee under the Master Franchise Agreement at the times and in the manner therein provided. C. Guarantors shall indemnify and save harmless Franchisor and its affiliates against and from all losses, damages, costs, and expenses which Franchisor and its affiliates may sustain, incur, or become liable for by reason of: (1) the failure for any reason whatsoever of Master Franchisee to pay the monies payable pursuant to the Master Franchise Agreement or to do and perform any other act, matter or thing pursuant to the provisions of the Master Franchise Agreement; or (2) any act, action, or proceeding of or by Franchisor for or in connection with the recovery of monies or the obtaining of performance by Master Franchisee of any other act, matter or thing pursuant to the provisions of the Master Franchise Agreement. D. Franchisor shall not be obligated to proceed against Master Franchisee or exhaust any security from Master Franchisee or pursue or exhaust any remedy, including any legal or equitable relief against Master Franchisee, before proceeding to enforce the obligations of the Guarantors under this Guarantee, and the enforcement of such obligations may take place before, after, or contemporaneously with, enforcement of any debt or obligation of Master Franchisee under the Master Franchise Agreement. E. Without affecting the Guarantors' obligations under this Guarantee, Franchisor, without notice to the Guarantors, may extend, modify, or release any indebtedness or obligation of Master Franchisee, or settle, adjust, or compromise any claims against Master Franchisee. Guarantors waive notice of amendment of the Master Franchise Agreement and notice of demand for payment or performance by Master Franchisee. F. Guarantors' obligations under this Guarantee shall remain in full force and effect, and shall be unaffected by: (1) the unenforceability of the Master Franchise Agreement against Master Franchisee; (2) the termination of any obligations of Master Franchisee under the Master Franchise Agreement by operation of law or otherwise; (3) the bankruptcy, insolvency, dissolution, or other liquidation of Master Franchisee, including, without limitation, any surrender or disclaimer of the Franchise Agreement by the trustee in bankruptcy of Master Franchisee; (4) Franchisor's consent or acquiescence to any bankruptcy, receivership, insolvency, or any other creditor's proceedings of or against Master Franchisee, or by the winding-up or dissolution of Master Franchisee, or any other event or occurrence which would have the effect at law of terminating the existence of Master Franchisee's obligations prior to the termination of the Master Franchise Agreement; or (5) by any other agreements or other dealings between Franchisor and Master Franchisee having the effect of amending or altering the Master Franchise Agreement or Master Franchisee's obligations under this Guarantee, or by any want of notice by Franchisor to Master Franchisee of any default of Master Franchisee or by any other matter, thing, act, or omission of Franchisor whatsoever. + + + +Source: SOUPMAN, INC., 8-K, 8/14/2015 + + + + + + + + G. Notice to Guarantors shall be given as follows: Names and addresses: H. This Guarantee shall be interpreted and construed under the laws of the state in which Franchisor has its principal place of business at the time the action is initiated. In the event of any conflict of law, the laws of such state shall prevail, without regard to the application of such state's conflict of law rules. If, however, any provision of this Guarantee would not be enforceable under the laws of the state in which Franchisor has its principal place of business at the time the action is initiated, and if the Master Franchisee's franchised business is located outside of such state and such provision would be enforceable under the laws of the state in which the Master Franchisee's franchised business is located, then such provision shall be interpreted and construed under the laws of that state. Any action brought to enforce or interpret this Guarantee in any court, whether federal or state, shall be brought within the county and state in which Franchisor has its principal place of business at the time the action is initiated, and Guarantors hereby waive all questions of personal jurisdiction or venue for the purpose of carrying out this provision. IN WITNESS WHEREOF, each of the undersigned has signed this Guarantee as of the day and year set forth below. GUARANTORS : Date: Date: Date: Date: + +2 + +Source: SOUPMAN, INC., 8-K, 8/14/2015 \ No newline at end of file diff --git a/full_contract_txt/SoupmanInc_20150814_8-K_EX-10.1_9230148_EX-10.1_Franchise Agreement3.txt b/full_contract_txt/SoupmanInc_20150814_8-K_EX-10.1_9230148_EX-10.1_Franchise Agreement3.txt new file mode 100644 index 0000000000000000000000000000000000000000..1d73600731c952463ccf00647fd1d3ee5fedb9b9 --- /dev/null +++ b/full_contract_txt/SoupmanInc_20150814_8-K_EX-10.1_9230148_EX-10.1_Franchise Agreement3.txt @@ -0,0 +1,25 @@ +Attachment C to Master Franchise Agreement MULTI-STATE ADDENDUM CALIFORNIA APPENDIX 1. California Business and Professions Code Sections 20000 through 20043 provide rights to you concerning termination or non-renewal of a franchise. If the Master Franchise Agreement contains provisions that are inconsistent with the law, the law will control. + + 2. The Master Franchise Agreement provides for termination upon bankruptcy. This provision may not be enforceable under Federal Bankruptcy Law (11 U.S.C.A. Sec. 101 et seq. ). + + 3. The Master Franchise Agreement contains covenants not to compete which extend beyond the termination of the agreement. These provisions may not be enforceable under California law. + + 4. Section 31125 of the California Corporation Code requires the franchisor to provide you with a disclosure document before asking you to agree to a material modification of an existing franchise. + + 5. Neither the franchisor, any person or franchise broker in Item 2 of the Disclosure Document is subject to any currently effective order of any national securities association or national securities exchange, as defined in the Securities Exchange Act of 1934, 15 U.S.C.A. 79a et seq., suspending or expelling such persons from membership in such association or exchange. + + 6. The Master Franchise Agreement requires non-binding mediation. The mediation will occur in New York with the costs being borne by equally by the parties. Prospective franchisees are encouraged to consult private legal counsel to determine the applicability of California and federal laws (such as Business and Professions Code Section 20040.5 and Code of Civil Procedure Section 1281) to any provisions of a franchise agreement restricting venue to a forum outside the State of California. + + 7. The Master Franchise Agreement requires application of the laws of New York. This provision may not be enforceable under California law. + + 8. You must sign a general release if you renew or transfer your franchise. California Corporation Code 31512 voids a waiver of your rights under the Franchise Investment Law (California Corporations Code 31000 through 31516). Business and Professions Code 20010 voids a waiver of your rights under the Franchise Relations Act (Business and Professions Code 20000 through 20043). + + 9. THE CALIFORNIA FRANCHISE INVESTMENT LAW REQUIRES THAT A COPY OF ALL PROPOSED AGREEMENTS RELATING TO THE SALE OF THE FRANCHISE BE DELIVERED TOGETHER WITH THE DISCLOSURE DOCUMENT. + + 10. The Master Franchise Agreement contains a liquidated damages clause. Under California Civil Code Section 1671, certain liquidated damages clauses are unenforceable. + + 11. OUR WEBSITE, www.originalsoupman.com, HAS NOT BEEN REVIEWED OR APPROVED BY THE CALIFORNIA DEPARTMENT OF BUSINESS OVERSIGHT. ANY COMPLAINTS CONCERNING THE CONTENT OF THIS WEBSITE MAY BE DIRECTED TO THE CALIFORNIA DEPARTMENT OF BUSINESS OVERSIGHT at www.dbo.ca.gov. + + + +Source: SOUPMAN, INC., 8-K, 8/14/2015 \ No newline at end of file diff --git a/full_contract_txt/SoupmanInc_20150814_8-K_EX-10.1_9230148_EX-10.1_Franchise Agreement4.txt b/full_contract_txt/SoupmanInc_20150814_8-K_EX-10.1_9230148_EX-10.1_Franchise Agreement4.txt new file mode 100644 index 0000000000000000000000000000000000000000..e33a493bc2cc7cf77a7bcfbbdc25333fe0f5d9c9 --- /dev/null +++ b/full_contract_txt/SoupmanInc_20150814_8-K_EX-10.1_9230148_EX-10.1_Franchise Agreement4.txt @@ -0,0 +1,21 @@ +ADDENDUM REQUIRED BY THE DEPARTMENT OF LAW OF THE STATE OF NEW YORK The following Items are required to be included within the Disclosure Document and shall be deemed to supersede the language in the Disclosure Document itself: 3. LITIGATION Neither the Franchisor, its Predecessor nor any person listed under Item 2 or an affiliate offering franchises under Franchisor's principal trademark: (A) has an administrative, criminal or civil action pending against that person alleging: a felony; a violation of a franchise, antitrust or securities law; fraud; embezzlement; fraudulent conversion; misappropriation of property; unfair or deceptive practices; or comparable civil or misdemeanor allegations. + + (B) has been convicted of a felony or pleaded nolo contendere to a felony charge or, within the ten year period immediately preceding the application for registration, has been convicted of or pleaded nolo contendere to a misdemeanor charge or has been the subject of a civil action alleging: violation of a franchise; anti-fraud or securities law; fraud; embezzlement; fraudulent conversion or misappropriation of property; unfair or deceptive practices; or comparable allegations. + + (C) is subject to a currently effective injunctive or restrictive order or decree relating to the franchise, or under a Federal, State or Canadian franchise, securities, antitrust, trade regulation or trade practice law, resulting from a concluded or pending action or proceeding brought by a public agency; or is subject to any currently effective order of any national securities association or national securities exchange, as defined in the Securities and Exchange Act of 1934, suspending or expelling such person from membership in such association or exchange; or is subject to a currently effective injunctive or restrictive order relating to any other business activity as a result of an action brought by a public agency or department, including, without limitation, actions affecting a license as a real estate broker or sales agent. 4. BANKRUPTCY Neither the Franchisor, its affiliate, its predecessor, officers, or general partner during the ten year period immediately before the date of the disclosure document: (a) filed as debtor (or had filed against it) a petition to start an action under the U.S. Bankruptcy Code (or any comparable foreign law); (b) obtained a discharge of its debts under the bankruptcy code; or (c) was a principal officer of a company or a general partner in a partnership that either filed as a debtor (or had filed against it) a petition to start an action under the U.S. Bankruptcy Code or that obtained a discharge of its debts under the U.S. Bankruptcy Code during or within one year after the officer or general partner of the Franchisor held this position in the company or partnership. IN WITNESS WHEREOF, the parties hereto have duly executed, sealed and delivered this Addendum dated this ______ day of ______________, 2015. + +2 + +Source: SOUPMAN, INC., 8-K, 8/14/2015 + + + + + + + + ATTEST KIOSK CONCEPTS, INC.: By: Witness Name: Title: MASTER FRANCHISEE: THE GRILLED CHEESE TRUCK, INC. By: Name: Title: Witness + +3 + +Source: SOUPMAN, INC., 8-K, 8/14/2015 \ No newline at end of file diff --git a/full_contract_txt/SouthernStarEnergyInc_20051202_SB-2A_EX-9_801890_EX-9_Affiliate Agreement.txt b/full_contract_txt/SouthernStarEnergyInc_20051202_SB-2A_EX-9_801890_EX-9_Affiliate Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..adc9aebbee39ed34da8ec77d828380fa9b001e78 --- /dev/null +++ b/full_contract_txt/SouthernStarEnergyInc_20051202_SB-2A_EX-9_801890_EX-9_Affiliate Agreement.txt @@ -0,0 +1,145 @@ +Exhibit 10.8 Affiliate Program / Premium Affiliate Management General Terms and Conditions + +The following General Terms and Conditions are intended for (i) Web site owners (hereafter, "Affiliates") who wish to participate as Affiliates in the Affiliate Program provided by element 5 (governed by II. and IV. in these General Terms and Conditions) on the basis of these General Terms and Conditions and also for (ii) Software Publishers who distribute their software products as downloads using the services of element 5 GmbH, Vogelsanger Strasse 78, 50823 Cologne, Germany and its subsidiaries (together hereafter, "element 5") and who wish to make use of the additional service provided by element 5 (hereafter, "Affiliate Management", governed under III. and IV. in these General Terms and Conditions) for integration of the Affiliate Program provided by element 5. + +I. Object of the Affiliate Program/ Affiliate Management Program for Software Publishers + +The object of the Affiliate Program provided by element 5 (hereafter, "Program") is to publish electronic advertisements on the Web site of the Affiliate for selected software products offered by element 5 Software Publishers. Instead of fixed compensation, the Affiliate receives result- dependent Advertising Cost Compensation (also known in the element 5 Control Panel as "Commission") in exchange for publishing the advertisements. The Advertising Cost Compensation depends on the actual sales generated by end users referred via the electronic advertisement (the Affiliate's link). + +Within the context of sales processed from this Program, element 5 acts (to the end user) as a service provider for Software Publisher and handles the sales process by proxy of Software Publisher in accordance with underlying share-it! Developer Agreement. element 5 receives an additional service fee from the participating Publishers for this Affiliate Management. + +Under the terms of this Affiliate Management, "Software Publisher's Control Panel" shall mean the password protected secure interface on element 5's Web servers that allows the Software Publisher to gain access to Sales data and End User data through a secure online connection and change Software Publisher related settings, e.g. the commission of the Affiliate and activation and deactivation of the Affiliate. + +"Affiliate's Control Panel" shall mean the password protected secure interface on element 5's Web servers that allows the Affiliate to (i) gain access to referred sales through a secure online connection and (ii) change Affiliate related settings, e.g. input or alteration of personal data, definition of default style within the context of the given technical limitations, and requests for new partnerships with Software Publishers or termination of existing partnerships. + +Source: SOUTHERN STAR ENERGY INC., SB-2/A, 12/2/2005 + + + + + +II. Affiliate Program + +§ 1 Affiliate Participation + +Participation of an individual Affiliate in the Program is dependent on activation by the Software Publisher. Once the Affiliate has registered, element 5 will send an e-mail to Software Publisher with a request to activate the Affiliate. Once the Affiliate is activated by the Software Publisher, the Affiliate is considered to be a participant in this program and is bound by these General Terms and Conditions. + +§ 2 Products under the Agreement + +(1) The Products under the Agreement are software products designated by the respective Software Publisher for this purpose and which can be selected by the Affiliate from a product catalog in the Affiliate Control Panel. (2) Following initial activation of a product under the agreement, the Affiliate has the opportunity to choose further software products (including those from other Software Publishers), found in the Affiliate's Control Panel, and offer them on the Affiliate's Web site under these General Terms and Conditions. However, the offering of these new products is dependent on the Software Publisher activating the Affiliate for the respective software. + +§ 3 Control Panel + +(1) After successfully completing the registration process for participation in the Program, the Affiliate will be sent a user ID and a password to access to the "Affiliate Control Panel". With the user ID and password, the "Affiliate Control Panel" provides the Affiliate access, via a secure online connection, to a secure area on element 5's Web server so that the Affiliate may, at any time, view the number of software sales the Affiliate has referred, as well as change other settings. (2) When using the user ID and password, the Affiliate shall observe the following obligations and precautions: (i) Only the Affiliate may use the user ID and password. (ii) The password shall be kept strictly confidential. The Affiliate shall take due care to ensure that no unauthorized parties learn the password. (iii) If the Affiliate loses its password or if there is a possibility that an unauthorized party has learned the user ID and password, the Affiliate shall immediately report this to element 5, which can then block access by the Affiliate to the Control Panel. All actions carried out with the user ID and password will be attributed to the Affiliate. + +§ 4 Integration of the Link + +(1) The Affiliate shall integrate the product under the agreement using the appropriate link on its Web site; the link points to the order form operated by element 5. This link is generated by a Link Generator for the respective product under the agreement. The Link + +Source: SOUTHERN STAR ENERGY INC., SB-2/A, 12/2/2005 + + + + + +Generator is located in the secure area of element 5's Web site in the "Affiliate Control Panel". The link that is generated contains an individualized affiliate user ID by means of which any sales can be attributed to the Affiliate. Proper technical integration of the link is the responsibility of the Affiliate. If the links do not function, no Advertising Cost Compensation will be paid. (2) The Affiliate shall indicate on its Web site that (i) the Affiliate is acting as an independent partner of the respective Software Publisher by participation in the Affiliate Program provided by element 5 and (ii) The Software Publisher is the seller of the product and the payment process is administered by element 5. (3) The Affiliate shall produce a brief description for each activated product on its Web site. The Affiliate is responsible for the content, the style and the layout of this information. The Software Publisher can provide the Affiliate with graphics and text in an electronic format for use in describing the product, which the Affiliate shall use for the purpose of advertising the Products under the Agreement and links according to the instructions of the Software Publisher. The Affiliate should be aware that the product prices and availability may change at any time. It is not recommended that the price be listed on the Web site of the Affiliate. Maintenance of these product prices is possible only on the Web sites of the Software Publisher and the Publisher's corresponding site operated by element 5. + +§ 5 Order Processing + +(1) element 5 shall be responsible for the entire order processing for the referred end user according to the terms and conditions of the underlying share-it! Developer Agreement between the Software Publisher and element 5. element 5 shall provide the order forms for the order processing on its Web server; receive payments from the referred end users and forward these payments, less the agreed Advertising Cost Compensation, the service fees and relevant value added tax (VAT) to the Software Publisher; handle refunds and returns according to the provisions of the underlying share-it! Developer Agreement; and provide end user service relating to the administration of the order. The Software Publisher shall provide technical end-user service. (2) element 5 reserves the right to reject queries and orders which do not meet its requirements; including, in particular, orders by referred end users who do not meet credit requirements, who do not authorize direct debiting from their bank account, or who do not present a valid credit card. (3) An agreement by the Software Publisher with the referred end user does not exist until either a written or electronic order confirmation arrives from element 5 in the name of the Software Publisher or when element 5 begins to fulfill the agreement in the name of the Software Publisher. Typographical, printing and computation errors on the Web site of the Affiliate shall be charged to said Affiliate. + +§ 6 Advertising Cost Compensation + +(1) element 5 will pay Affiliate its advertising costs (including Vat, if any, on presentation of a valid VAT invoice) if an end user arrives via the link integrated in Affiliate's Web site at the order page hosted by element 5 for the respective Software + +Source: SOUTHERN STAR ENERGY INC., SB-2/A, 12/2/2005 + + + + + +Publisher's Product under this Agreement and end user uses the automatic ordering system that carries out the registration and payment processing, so that the Affiliate's link is deemed to be directly causative for the entry of the End User into the agreement with the Software Publisher and End User's payment, proving that all requirements are irrevocably met ("agreements arising in a qualified manner"). Affiliate is only eligible to earn the Advertising Cost Compensation on sales occurring during the term of this Agreement and fees earned up to the date termination will remain payable only if the related orders are not cancelled or returned. (2) Insofar as the referred end user accepts cookies when clicking on Affiliate's link, proceeds from orders will be taken into account which do arise within the lifespan (of max. 180 days) of the cookie(s) used and/ or possibly within the lifespan of a special action of the Software Publisher via integrated link. (3) element 5 shall record and compute on a monthly basis the amount of said Advertising Cost Compensation for the Affiliate. (4) The computation basis for determining the value of the Advertising Cost Compensation is calculated by the gross sales price (including taxes, shipping and handling, etc.) actually invoiced to the referred end user. The percentage of the respective Advertising Cost Compensation shall be stipulated by the Software Publisher, but shall not exceed 50% of the effective gross sales price of the software. (5) The Advertising Cost Compensation shall not be paid if and insofar as it is determined that the end user will not meet its payment obligations or will meet them only partially, or if for any other reason the invoice to the end user was cancelled (e.g. in cases where a charge back of a credit card charge, a debit advice or other return or refund of the software product occurs). If the Advertising Cost Compensation was previously paid by element 5, it can be offset or invoiced to Affiliate at element 5's own discretion. (6) The payment of the Advertising Cost Compensation shall occur monthly insofar as the sum due exceeds a value of 100 EUR / 100 USD. If this is not the case, the sum due can be retained until a total value of at least 100 EUR / 100 USD is reached, at the latest, upon termination of the Affiliate's participation in the Program. (7) The payment can be made by wire transfer, Direct Deposit (US only) or check, as chosen by the Affiliate. (8) The invoicing is deemed to be approved if the Affiliate does not object in writing, including a statement of reasons, within four weeks. + +III. Affiliate Management for Software Publishers + +§ 1 Participation by the Software Publisher + +(1) Software Publisher's participation in Affiliate Management indicates that the Software Publisher agrees to these General Terms and Conditions, and that the Software Publisher shall integrate the Affiliate Program into the Web site using a corresponding link. (2) To generate revenue through this Program by means of sales referred by the Affiliate, the Affiliate, after completion of registration, must be activated by the Software Publisher in the Control Panel. The Software Publisher will be informed of the Affiliate's + +Source: SOUTHERN STAR ENERGY INC., SB-2/A, 12/2/2005 + + + + + +registration per e-mail with a request for the Affiliate's activation from element 5. (3) By configuring the settings in the Control Panel, the Software Publisher determines the amount of the success-based Advertising Cost Compensation. If the Publisher does not configure any settings, then it will accept the default settings proposed by element 5 when activating the Affiliate. Prior to making changes in the Control Panel regarding the amount of the Advertising Cost Compensation, written notification must be given to element 5 and the Affiliate. + +§ 2 Integration of the link + +(1) element 5 shall make a hyperlink available to the Software Publisher that links to the appropriate registration form for the Affiliate Program. The link can be accessed in the secure "Software Publisher Control Panel" on element 5's Web site under "Affiliate Management". (2) Every Affiliate must complete the registration form once prior to participating in the Program and agree to these General Terms and Conditions by checking the Online checkbox. Afterwards, the Affiliate can also advertise other Products under this Agreement (see above § 3) after activation by the respective Software Publisher. + +§ 3 element 5's Service Fee + +For each sale administered by element 5 of the Software under this Agreement, element 5 shall receive an additional service fee of 2% of the gross sales price (including taxes, shipping and handling, etc.) as well as the Advertising Cost Compensation defined in II. § 6 (4) and in addition to VAT or sales tax (where applicable). element 5 will pay the Affiliate the Advertising Cost Compensation as defined in II. § 6 . Further invoicing terms are obtained from the existing business relationship, defined in the respective share-it! Developer Agreement between Software Publisher and element 5. + +IV. General terms + +§ 1 License + +Upon activation of the Affiliate, the Software Publisher grants the Affiliate a non-exclusive, revocable right to use provided advertising material, notices and all further presentations (insofar as available - also known hereafter as "Material") only for the purpose of designating its Web site as a "partner Web site" and presenting the designated advertising Material. Under no circumstances may the transferred Material be edited or modified without prior written permission of the Software Publisher. element 5 and the Software Publisher retain all rights with regard to their logos, their trade name or their trademarks and other commercial protection rights. The Software Publisher and element 5 are authorized to revoke the license granted to the Affiliate at any time by written notice. + +Source: SOUTHERN STAR ENERGY INC., SB-2/A, 12/2/2005 + + + + + +§ 2 Changes to these provisions + +element 5 RESERVES THE RIGHT TO MODIFY AND TO SUPPLEMENT THESE GENERAL TERMS AND CONDITIONS AT ANY TIME. THE CURRENT VERSION WILL BE MAINTAINED FOR VIEWING AS A HYPERLINK ON element 5's WEB SITE IN THE CONTROL PANEL. MOREOVER, element 5 WILL ANNOUNNOUNCE ANY CHANGES TO THESE TERMS VIA E- MAIL. WHITHIN 14 DAYS OF THE ANNOUNCEMENT OF CHANGED PARTICIPATION TERMS, AFFILIATE AND SOFTWARE PUBLISHER MAY OBJECT TO SUCH CHANGES. IF NO OBJECTION IS RECEIVED DURING THIS TIME, THE PARTICIPANT IS DEEMED TO HAVE ACCEPTED THE CHANGES AND THEY WILL BECOME PART OF THE EXISTING RELATIONS UNDER THE AGREEMENT. + +§ 3 Correspondenceont> + +Correspondence shall take place preferably via e-mail, which is accorded the same status as postal mail. Qualifying dates are always agreed as "Receipt by Recipient", unless otherwise noted. For e-mail, the receipt of the message on the destination mail server is deemed to be the time of reception. + +§ 4 Independence of Relations under the Agreement + +The parties to the contract shall operate their Web sites independently of one another and are solely responsible for the content, technology used, and design. This agreement may not be construed as establishing between the parties a company or an association, nor does it establish an employment relationship or a commercial agent agreement. The parties to this agreement are not authorized to act in the name of the other party and / or to accept offers or make any statements on behalf of the other party. As an exception to the previous sentence, element 5 is authorized to make statements on behalf of the Software Publisher pursuant to these T&C and the element 5 vendor agreement (formerly known as e-sales contract). + +§ 5 Guarantee by the Party to the Agreement for its Web site + +(1) The Affiliate shall be responsible for the entire content of its Web site. The Affiliate guarantees in particular that (i) It will integrate advertising Material according to the provisions and instructions of the Software Publisher into that Affiliate's Web site insofar as said Material was transferred to the Affiliate; (ii) The material used the Affiliate's Web site will not contain any representations of violence, sexually related contents or discriminatory statements or representations with regard to race, sex, religion, nationality, handicap, sexual preference and orientation, or age, nor will said Material be unlawful in any way; (iii) The Material used on the Affiliate's homepage will not infringe upon the rights of third parties, particularly patents, copyrights, trademarks or other commercial protection rights as well as general personality rights and cannot be mistaken for the products of the Software Publisher and/or element 5 or a Web site operated by the Software Publisher and/or element 5; (iv) It will not send any e-mail without the express + +Source: SOUTHERN STAR ENERGY INC., SB-2/A, 12/2/2005 + + + + + +consent of the receiver(s) (no spam e-mails). (2) The Affiliate shall guarantee the above named properties of its Web sites and will pay defense costs and indemnify and keep fully indemnified the Software Publisher and element 5, its subsidiaries and its and their directors, officers, employees and agents upon demand from any and all claims, demands, costs, liabilities, losses, expenses, and damages (including reasonable attorneys' fees, costs, and expert witnesses' fees) arising out of or in connection with any breach by Affiliate of its warranty set out in this clause. + +§ 6 Limitation of liability + +(1) The parties exclude mutual liability for slightly negligent violation of obligations in connection with this agreement, with the exception of § 16 and § 5 (3) of this agreement. This includes in particular the liability exclusion for lost profit, the loss of data or interruption to or errors in the operation of the Web site of the Affiliate. The above liability exclusion also applies to the personal liability of employees, representatives and persons employed to perform the obligations of the parties to the agreement. The limitation of liability does not apply to claims arising through initial incapacity or in case of justifiable impossibility. (2) Any possible product liability claims are unaffected by the above limitations. Insofar as element 5 or the Software Publisher violates an essential obligation under the agreement, the obligation to pay restitution is limited to the damages that typically arise. (3) element 5 makes no guarantees in regard to the Software Publisher's software products offered via its Web site. Moreover, element 5 does not guarantee the Affiliate that the operation of its Web sites will be maintained without interruptions and without errors. Liability is expressly excluded for the consequences of such interruptions or errors. + +§ 7 Agreement period / Cancellation + +The term of this Agreement will begin upon acceptance of Affiliate's Program application and will end when terminated by either party of this Agreement. This Agreement is entered into for an unlimited period of time. Either party may cancel this Agreement at any time, with or without supplying a reason, through written notification or by making suitable settings in the respective Control Panel. + +§ 8 Termination of the agreement + +(1) When the agreement ends, all usage rights of the Affiliate and Software Publisher accorded by this agreement with regard to the provided logos or Web site contents expire. (2) Upon termination of the relationship under this agreement, the Affiliate is obligated to undertake all of the technical measures necessary to delete from its Web site all links that refer to the Web sites of element 5 or to the Software Publisher. The same applies upon termination of Affiliate Management for links of the Software Publisher that were established in connection with the participation in Affiliate Management on its Web site. (3) element 5 is authorized to retain final payment for a reasonable time, minimum for 30 days after the end of the respective quarter, to ensure that the correct amount is paid. + +Source: SOUTHERN STAR ENERGY INC., SB-2/A, 12/2/2005 + + + + + +Affiliate is only eligible to earn the Advertising Cost Compensation on sales of Software Publishers Products occurring during the term of this Agreement and fees earned up to the date termination will remain payable only if the related orders are not cancelled or returned. If the Advertising Cost Compensation was previously paid by element 5, it can be offset or invoiced to Affiliate at element 5's own discretion. + +§ 9 Final provisions + +(1) Force majeure If a party is unable to fulfill its obligations under the agreement for reason of force majeure, it shall immediately inform the other party thereof and do everything in its power to resume normal operations as quickly as possible. In such case, the affected party shall not be deemed to be in breach of contract and cannot be held liable. (2) Provision for written form Additional agreements, changes or additions are valid only if element 5 has confirmed them in writing. The same applies to the warranting of properties. (3) Severability clause If any provision of this agreement is or becomes invalid, the validity of the remaining provisions shall not be affected. Insofar as a provision is invalid, the parties will agree on a new provision which comes as close as possible to the intent of the invalid provision and which is legally valid. (4) Applicable law and jurisdiction Even in case of agreements with foreign (non-German) Software Publishers and Affiliates, the law of the Federal Republic of Germany applies. The place of jurisdiction for all claims arising in connection with this business relationship is Cologne, Germany. + +Source: SOUTHERN STAR ENERGY INC., SB-2/A, 12/2/2005 \ No newline at end of file diff --git a/full_contract_txt/StaarSurgicalCompany_20180801_10-Q_EX-10.37_11289449_EX-10.37_Distributor Agreement.txt b/full_contract_txt/StaarSurgicalCompany_20180801_10-Q_EX-10.37_11289449_EX-10.37_Distributor Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..a5f7890a4467d532445dc96dd9374fd63897b760 --- /dev/null +++ b/full_contract_txt/StaarSurgicalCompany_20180801_10-Q_EX-10.37_11289449_EX-10.37_Distributor Agreement.txt @@ -0,0 +1,179 @@ +Exhibit 10.37 DISTRIBUTORSHIP AGREEMENT THIS DISTRIBUTORSHIP AGREEMENT (the "Agreement") is entered into and made effective as of ____________ (the "Effective Date"), by and between STAAR SURGICAL AG, a Swiss corporation, with a principal place of business at Hauptstrasse 104, CH - 2560 Nidau, Switzerland, ("STAAR"), and _______________, a corporation organized and existing under the laws of _________________, with its principal place of business at _______________________ ("Distributor"). Recitals A. STAAR is engaged in the manufacture, global distribution and sale of ophthalmic products, including a range of devices for cataract, glaucoma and refractive surgery. B. Distributor is engaged in and has experienced and trained personnel for the marketing, distribution and sale of ophthalmic products in ________________. C. STAAR desires to engage Distributor, and Distributor desires to be engaged by STAAR, to market, distribute and sell the Products (as defined below) in _______________ on the terms and conditions set forth herein. NOW, THEREFORE, in consideration of the foregoing premises, and the mutual covenants and conditions contained herein, and other good and valuable consideration, the parties hereby agree as follows: Agreement 1. Appointment and Acceptance 1.1 STAAR hereby appoints Distributor, and Distributor hereby accepts such appointment, to purchase the Products from STAAR and market, distribute and sell them in the Territory on the terms and conditions set forth herein. Distributor shall not have the right to appoint any subdistributors, subcontractors or other third parties to market, distribute or sell the Products. All Products shall be marketed, distributed and sold solely under STAAR's Trademarks. STAAR may utilize any of its affiliates to carry out STAAR's obligations under this Agreement; provided that STAAR shall remain liable for the due observance and performance of this Agreement by any such affiliate. 1.2 Distributor shall (a) procure the Products solely from STAAR (or its affiliates) and not (b) procure, manufacture, market or sell in the Territory any implantable medical devices that compete directly or indirectly with the Products, during the term of this Agreement. Distributor shall use its best efforts to promote and sell the Products to the maximum number of responsible customers in the Territory. 1.3 Subject to Section 8.3, Distributor's right to market, distribute and sell the Products in the Territory shall be exclusive. Distributor shall not sell any Products to a customer if Distributor knows or has reason to believe that such customer intends to remove those Products from the Territory. Distributor acknowledges and agrees that STAAR retains the right to sell the Products in the Territory directly or indirectly, including but not limited to via electronic commerce (without compensation to the Distributor). The Distributor shall cooperate with STAAR in servicing corporate accounts for customers operating in multiple Territories. + +1 + +Source: STAAR SURGICAL CO, 10-Q, 8/1/2018 + + + + + +1.4 During the term of this Agreement, and subject to the terms and conditions hereof, STAAR hereby grants to Distributor, and Distributor hereby accepts, the limited, nontransferable, nonexclusive right and license to use the trade name, trademarks, and logos of STAAR (collectively, "Trademarks"), without the right to grant sublicenses, solely in connection with the marketing, distribution and sale of the Products in the Territory pursuant to this Agreement. Distributor shall use and display the Trademarks solely in the manner, form, design, color and layout agreed by STAAR in its sole discretion. Distributor shall not use the Trademarks as part of or in combination with Distributor's trade name or marks. Distributor shall only market, distribute and sell the Products under the Trademarks and shall not use the Trademarks in any advertising or promotional campaigns or otherwise, or use any confusingly similar names or logos, in any manner that, in STAAR's sole discretion, may be misleading or harmful to STAAR (or its affiliates). Subject to the limited use rights granted to Distributor in respect of the Trademarks under this Agreement, all powers that would be conferred on authorized users under other laws are expressly excluded. 1.5 The term "Products" shall mean those certain products, specified by brand name, manufactured and marketed under the Trademarks by STAAR that are listed on Exhibit A-1 hereto. STAAR may from time to time modify or change the Products on Exhibit A-1 in its sole discretion, and if so, will notify Distributor promptly thereof. In the event that STAAR discontinues a Product, it will provide at least thirty (30) days' prior written notice to Distributor. Distributor shall not modify, disassemble or reverse engineer any Product, in whole or in part. 1.6 The term "Territory" shall mean ________. Distributor shall not promote, market, distribute or sell the Products outside the Territory. 1.7 Except for the rights expressly granted to Distributor pursuant to Sections 1 and 2, Distributor acknowledges and agrees that STAAR reserves and retains all rights with respect to the marketing, distribution and sale of the Products in the Territory (and elsewhere). Notwithstanding any other provision hereof to the contrary, STAAR shall have the unrestricted right, at its sole discretion, directly or indirectly through third party distributors, to among other things (a) supply, market, distribute and sell any product in the Territory other than the Products, (b) supply, market, distribute and sell any Product in the Territory on an OEM basis under third party trademarks, and (c) market, distribute and sell the Products (or any other product) in any geographic region outside the Territory. 2. Business of Distributor Distributor is and shall remain an independent contractor. Distributor agrees that STAAR has granted it no authority to act or make any representations or warranties on behalf of STAAR. Distributor is at all times acting for its own account, and at its own expense. Distributor represents to STAAR that Distributor has trained and experienced personnel, facilities and other resources in the Territory in order to diligently, professionally and effectively market, distribute and sell the Products. Distributor shall comply with all applicable laws, statutes, regulations and treaties relating to the marketing, distribution and sale of the Products and the performance of its duties and obligations hereunder. Distributor shall be free to establish its own pricing for Products sold by Distributor and shall notify STAAR of its pricing, as in effect from time to time. + +2 + +Source: STAAR SURGICAL CO, 10-Q, 8/1/2018 + + + + + +3. Term The term of this Agreement shall commence on the Effective Date and terminate in _____________, on _____________, unless terminated earlier pursuant to the terms of this Agreement; provided, however, that this Agreement may be renewed for successive one (1) year periods if STAAR and Distributor expressly agree in writing and in their sole discretion to renew this Agreement prior to the foregoing termination date or any successive renewal term. 4. Prices and Terms 4.1 The prices which Distributor shall pay to STAAR for the Products shall be as specified on Exhibit A 1. Such prices are exclusive of any national, state, local or other governmental sales, transfer, use, excise, value-added or other taxes, customs duties, or similar tariffs and fees, which shall be the sole responsibility of Distributor. In the event that STAAR is required to pay any such taxes, duties, tariffs or fees, the full amount thereof shall be added to the applicable invoice and payable by Distributor. Company may change the prices of the Products from time to time with thirty (30) days prior written notice to Distributor. 4.2 Payment for the Products shall be in U.S. Dollars, or such other currency as STAAR may require in its sole discretion, and made within thirty (30) days of STAAR's invoice. Late payments shall be subject to an interest charge of 1% per month or the maximum amount permitted by applicable law, whichever is less. 4.3 In the event STAAR establishes a line of credit for Distributor or permits Distributor to purchase Products on open account, STAAR retains title to said Products and reserves all rights with respect to such delivered Products permitted by law, including, without limitation, the rights of recession, repossession, resale and stoppage in transit until the full amount due from Distributor in respect of such Products has been paid. 5. STAAR Obligations STAAR shall, during the term of this Agreement: 5.1 Provide Product training, at mutually acceptable times and places, for a reasonable number of Distributor's personnel; provided that Distributor shall pay all expenses of its personnel attending such training sessions (including without limitation salaries and transportation); 5.2 Furnish Distributor, without charge, reasonable quantities of English-language Product literature which STAAR may publish or prepare from time to time; 5.3 Render reasonable periodic assistance to Distributor on Product technical and sales issues; and + +3 + +Source: STAAR SURGICAL CO, 10-Q, 8/1/2018 + + + + + +5.4 Invoice Distributor for each Product sold by Distributor. 6. Distributor Obligations Distributor shall, during the term of this Agreement, and at its expense: 6.1 Actively use its best efforts to advertise, promote and penetrate the market for the Products in the Territory; 6.2 Employ adequate staff having specialized technical training, maintain adequate stocks of Products, and maintain facilities and other resources within the Territory, at its own expense, in order to maximize the distribution and sale of the Products; 6.3 Provide STAAR with an annual marketing plan setting forth Distributor's plan for the marketing, distribution and sale of the Products in the Territory, including (a) Distributor's goals and objectives for Product promotion, sales, and distribution, (b) advertising campaigns for trade journals and other publications, (c) customer training and education, (d) participation at trade shows and exhibits, (e) special promotions and financing and acquisition programs, such as reagent rental programs, (f) distribution strategies and market analysis, including a detailed summary of the activities of competitors in the marketplace, and (g) anticipated capital expenditures, personnel requirements and other resources to be utilized in the succeeding year; 6.4 Participate in appropriate exhibitions and trade shows as part of its marketing of the Products in the Territory, it being understood and agreed that STAAR and its affiliates also shall have the right to participate in exhibitions and trade shows in the Territory; 6.5 Submit to STAAR regular quarterly status reports reflecting sales activities (detailed by customer name and units sold per customer per month), anticipated requirements of customers in the Territory, general market conditions, and a summary of activities by competitors; 6.6 Provide customer training and warranty services; and 6.7 Refrain from making any claims or representations concerning the Products other than as set forth in the applicable specifications or labeling therefor and never disparage either STAAR or the Products. 6.8 In the event that Distributor terminates this Agreement, then for one year thereafter, Distributor shall not sell, promote, advertise or market in the Territory products which are competitive with the Products. 7. Forecasts/Purchase Orders/Minimum Product Quantities 7.1 Distributor shall on a calendar-quarter basis furnish to STAAR a written good-faith, non-binding estimate of Distributor's Product requirements in the Territory and requested shipping dates (the "Forecast") for each of the succeeding twelve (12) months. Any purchase orders issued by Distributor are subject to acceptance by STAAR and will not be deemed accepted until a written confirmation has been dispatched by STAAR. + +4 + +Source: STAAR SURGICAL CO, 10-Q, 8/1/2018 + + + + + +7.2 Distributor shall order Products from STAAR under this Agreement by submitting to STAAR a written purchase order specifying Products, quantities, and requested delivery dates to enable STAAR to fill the order. Each purchase order submitted to STAAR is subject to acceptance by STAAR at its offices to which such order was submitted. The purpose of the purchase order to be issued under this Agreement is for scheduling only; no terms and conditions of Distributor's purchase orders or any other document or instrument of Distributor shall be binding upon STAAR or amend or modify this Agreement in any manner, notwithstanding any language to the contrary contained in any such purchase order, instrument or document. Distributor should place its last order in each quarter by the tenth day of the last month in each quarter (e.g., March 10, June 10, September 10, and December 10). 7.3 During each Contract Year, as defined below, Distributor shall purchase from STAAR the minimum quantity of each Product that shall be mutually agreed between the parties in advance of the applicable Contract Year ("Minimum Product Quantities"). The Minimum Purchase Quantities for the Contract Year are as set forth on Exhibit B attached hereto. Within ninety (90) days prior to the expiration of each Contract Year, the parties will discuss in good faith and agree on the Minimum Product Quantities for the successive Contract Year; provided, however, that, if the parties fail to reach agreement on or otherwise specify the Minimum Purchase Quantities for the successive Contract Year, the Minimum Product Quantities for such successive Contract Year shall be __________ percent (___%) of the Minimum Purchase Quantities for the existing Contract Year. "Contract Year" means for the first Contract Year of the Agreement, the period commencing on the Effective Date hereof and ending one year thereafter and for subsequent Contract Years, the successive twelve (12) month period thereafter. Failure of Distributor to purchase the Minimum Purchase Quantities for any Contract Year, shall be considered a material breach of this Agreement. 8. Delivery 8.1 Delivery of all Products ordered by Distributor shall be made Ex Works at STAAR's export manufacturing or other facility or named shipping point as determined by STAAR. ICC INCOTERMS (2010 edition) shall apply, except insofar as these INCOTERMS may be inconsistent with the terms of this Agreement. 8.2 In the event Distributor fails to take delivery and/or shipment of Products pursuant to the terms of this Agreement: (a) STAAR shall be entitled to store the Products in a warehouse at the expense and risk of Distributor; (b) the price of the Products shall become immediately due and payable by Distributor; and (c) after thirty (30) days from the date upon which the price becomes payable, STAAR may dispose of the Products in a commercially reasonable manner without notice to Distributor and recover any shortfall and related expenses from Distributor. 8.3 All Products ordered pursuant to accepted purchase orders shall be scheduled for delivery in accordance with STAAR's then current and normal delivery times. + +5 + +Source: STAAR SURGICAL CO, 10-Q, 8/1/2018 + + + + + +9. Warranty and Quality Control 9.1 STAAR warrants that, for the period of twelve (12) months from the date of delivery to Distributor hereunder (the "Warranty Period"), the Products will meet STAAR's published specifications or labeling for such Products as in effect at the time of such delivery ("Warranty"). To the maximum extent permitted by applicable law and except as otherwise stated in this Agreement: (a) the foregoing Warranty is exclusive; and (b) all other terms, representations, undertakings, rights, remedies and warranties are excluded, whether express or implied (including but not limited to any warranties of merchantability, fitness for a particular purpose or against infringement). To the maximum extent permitted by applicable law, the exclusive remedy for breach of the Warranty shall be, at STAAR's option, the repair or replacement, at STAAR's expense, of the non-conforming Product; provided that Distributor notifies STAAR of the non-conformity and returns the non-conforming Product within the Warranty Period. Products may only be returned by Distributor when accompanied by a return material authorization number issued by STAAR. Shipping expenses for Products returned by Distributor will be prepaid by Distributor. STAAR shall pay for the return or replacement shipment to Distributor of Products repaired or replaced under the Warranty. For Products returned for repair or replacement that are not covered under Warranty, STAAR's standard repair charges shall be applicable in addition to all shipping expenses. The above Warranty is contingent upon proper installation, use and maintenance of the Products and does not apply to Products which have been misused, mishandled, adulterated, repaired or modified without STAAR's written approval. To the maximum extent permitted by applicable law, STAAR shall not be responsible for any incidental or consequential loss, damage, or expense which arises directly or indirectly from the use of any Product. Without limiting the above, and to the maximum extent permitted by applicable law, Distributor's sole remedy in contract or in tort (including in negligence) and STAAR's liability shall be limited to the repair or replacement of any Product which is returned to and found to be defective or non-conforming by STAAR. 9.2 Distributor shall not make any representation or warranty as to the Products except for the warranty stated in Section 9.1 above. Distributor shall not alter the Products and shall not recommend or knowingly sell the Products for any uses except as described in STAAR's Product label and labeling and in accordance with the written instructions and warnings furnished by STAAR. Distributor agrees to deliver to its customers at or before sale all specifications, inserts, instructions, and warnings furnished by STAAR and to retain records evidencing such delivery. 10. Regulatory and Post-Market Surveillance Requirements 10.1 During the term of this Agreement and for at least ten (10) years thereafter, Distributor shall maintain records to allow for traceability of individual serial/lot numbers to customers for all sales of the Products. Upon request by STAAR, Distributor shall supply STAAR with a report of the information contained in such records. 10.2 In the event that STAAR deems it necessary to recall any Product, or any governmental authority requests recall of any Product distributed or sold by Distributor in the Territory, Distributor and STAAR shall cooperate fully with each other in effecting such recall, with an effort to reduce as much as possible the expense thereof and Distributor must notify STAAR of any contemplated or requested recalls as soon as possible (and at all times within any period required to notify any regulatory authority under applicable law) and prior to Distributor taking any steps to effect such a recall. Without limiting Distributor's obligations under law, as between Distributor and STAAR, the decision of whether or not to recall any Product shall be made solely by STAAR. Distributor shall notify all customers who received the recalled Product and shall record all receipts of Product returned under any recall. Distributor shall maintain copies of recall notification letters and maintain distribution logs that detail where each Product was shipped by Distributor. + +6 + +Source: STAAR SURGICAL CO, 10-Q, 8/1/2018 + + + + + +10.3 Distributor shall fully document and inform STAAR in writing of any Complaints or other matters addressed in this Section 10. Documentation with respect to Complaints shall include the Product model and serial or lot number, customer contact information, and as much detail as possible regarding the nature of the Complaint. Distributor will forward to STAAR any Complaint involving significant bodily injury, illness or death resulting from use of Products within one (1) calendar day of receipt and Distributor must notify STAAR of any such incident prior to issuing any notice required by law in respect of such incident (including those to be issued to governmental or regulatory authorities). Distributor shall forward to STAAR all other Complaints within five (5) calendar days of receipt. If any evaluation of Product involved in a Complaint by STAAR is necessary or appropriate, Distributor will use best efforts to retrieve the affected Product, if available, and return it to STAAR. STAAR will pay for the return shipment of such Product to STAAR. STAAR will be responsible for investigating all Complaints, determining if reporting to regulatory authorities in the Territory is required, and submitting such reports to regulatory authorities when required. The term "Complaints" as used in this Section 10.3 means any report, complaint or other communication received by Distributor (or its employees, contractors, agents or representatives) from end users of Products or their healthcare providers related to the safety or efficacy of the Products. 10.4 STAAR informs Distributor that Sections 10.1, 10.2, and 10.3 above are requirements of the Medical Device Directive (93/42/EEC), and that non-compliance by Distributor of these Sections will constitute grounds for STAAR to immediately cease supply of Products to Distributor and will be deemed a failure by Distributor to perform a material obligation, warranty, duty or responsibility hereunder. 10.5 Distributor acknowledges and agrees that it has full understanding of and shall duly observe and abide by any and all legal and regulatory requirements applicable to the import, commercialization, marketing, distribution or sale of Products in the Territory (collectively, "Regulatory Requirements"). Distributor further acknowledges and agrees that STAAR does not take any, and shall not be responsible for, any legal liability or responsibility for damages, costs or legal consequences that may result from any failure by Distributor to observe or comply with any Regulatory Requirements. 10.6 Distributor shall observe all transport and storage requirements and conditions applicable to the Products as indicated on any Product packaging. 11. Governmental Approvals and Registrations 11.1 With the exception of the health registrations for the Products provided for in Section 11.2 below, Distributor shall secure (and provide copies thereof to STAAR) all necessary governmental permits, licenses, sponsorships and registrations required in connection with the importation and resale of the Products in the Territory. Upon expiration or termination of this Agreement, Distributor shall transfer to STAAR (or its nominee) all right and title to all sponsorships or import licenses or permits governing the importation and resale of the Products into the Territory. + +7 + +Source: STAAR SURGICAL CO, 10-Q, 8/1/2018 + + + + + +11.2 STAAR shall provide to Distributor all necessary information and data to obtain appropriate health registrations and applications in the Territory. Distributor shall use its best efforts to obtain all necessary registrations, which registrations shall be obtained in the name of STAAR. Distributor agrees that it will have no right or interest in said registrations and applications; that STAAR is and shall remain the exclusive owner of such registrations and applications free and clear of any claims by Distributor; and that Distributor shall make no claim to the same at any time during or after the term of this Agreement. Distributor shall respect such property rights of STAAR and comply with all local laws and regulations in respect thereof. Distributor shall also assist STAAR, at STAAR's request, in taking any steps necessary to defend such rights, and any reasonable expenses incurred in this regard by Distributor shall be reimbursed by STAAR. 11.3 Distributor shall at all times keep STAAR apprised of all Regulatory Requirements and any changes thereto and, on an annual basis, shall report to STAAR in writing of any such changes and confirm in such report that there have been no changes in any Regulatory Requirements other than as specified in the annual report. 11.4 Copies of all permits, licenses, sponsorships and registrations referred in Sections 11.1 and 11.2 shall be promptly forwarded to STAAR. 12. STAAR's Proprietary Information and Rights 12.1 Distributor recognizes and understands that all information not generally known concerning Company and the Products, including but not limited to Company's organization and business affairs, customer lists, sales information, operating procedures and practices, technical data, designs, software, know-how, trade secrets, and processes (the "Proprietary information"), whether owned by Company or licensed by Company from third parties, are subject to a valuable proprietary interest of Company, and that Distributor is under an obligation to maintain the confidentiality of such Proprietary Information. Without limiting the generality of the foregoing obligations, Distributor agrees that for the term of this Agreement and thereafter until such time as the Proprietary information is in the public domain, Distributor will (i) not disclose, publish or disseminate any Proprietary Information, (ii) not use any Proprietary Information for its own account, (iii) not authorize any other person to disclose, publish or disseminate the Proprietary information, and (iv) treat all Proprietary Information in a confidential manner, including appropriate marking and secure storage of written Proprietary Information. 12.2 No title or ownership of the software bundled or included with any Product ("Software") is transferred to Distributor, and such Software remains the proprietary property of Company. The Software is protected by the U.S. Copyright. Act and by international copyright treaties. All Software, including documentation and any subsequent updates provided by Company to Distributor, is licensed only for use on the single Product on which the Software is first installed. Unauthorized copying of the Software is expressly forbidden, and Distributor agrees not to distribute copies of the Software to nonlicensed parties. In no event shall Distributor reverse engineer, decompile, or disassemble the Software. + +8 + +Source: STAAR SURGICAL CO, 10-Q, 8/1/2018 + + + + + +12.3 Distributor acknowledges that the Company is the owner and/or licensee in the Territory of the trademark(s) indicated on the Product packaging, advertising or promotional material or utilized in the sale of the Products (the "Trademarks"). During the term of this Agreement, Distributor is authorized to use the Trademarks solely in connection with Distributor's advertisement, promotion and distribution of the Products in the Territory. Whenever the Trademark is used, e.g., on any package, label or advertisement, the right or most prominent use shall always be accompanied by a legend acceptable to Company indicating that the Trademark is licensed to the Distributor by Company. 12.4 Distributor shall neither use nor permit others to use the name "STAAR", or any abbreviation or modification thereof, or the Trademarks or any other trademark or trade name of Company as part of the Distributor's firm name or corporate titles, in signs or in letterheads without the prior written consent of Company. Distributor may designate itself as a Distributor of Products in the Territory in such form and manner as Company may approve of in advance in writing. Distributor shall not grant this privilege to any third party or to any affiliates without Company's prior written consent. 12.5 Distributor acknowledges that Company owns and retains all patents, trademarks, copyrights and other proprietary rights in the Products, and agrees that it will not at any time during or after the termination of this Agreement assert or claim any interest in or take any action which may adversely affect the validity or enforceability of any trademark, trade name, trade secret, copyright, or other proprietary right owned by or licensed to Company. No license, either express or implied, is granted to the Distributor by this Agreement to any patents, trademarks, copyrights, processes, or other proprietary rights of Company or its affiliates, except the right to sell the Products sold to the Distributor hereunder in the Territory, and the license to use the Software and Trademarks in connection therewith. 12.6 Distributor acknowledges that any breach of the provisions of this Section shall result in serious and irreparable injury to STAAR for which STAAR cannot be adequately compensated by monetary damages alone. Thus, Distributor agrees that, in addition to any other remedy it may have, STAAR shall be entitled to enforce the specific performance of the obligations of Distributor under this Section and to seek both temporary and permanent injunctive relief (to the extent permitted by law) without the necessity of proving actual damages. Distributor shall be responsible for any breach of the provisions for this Section by any employee, agent or representative of Distributor. 13. Indemnification; Infringement; Insurance; and Limitation of Liability 13.1 Distributor shall indemnify, defend with competent and experienced counsel and hold harmless STAAR, and its officers, directors, employees, affiliates and agents (each, a "Indemnities"), from and against any and all claims, demands, suits or actions (including without limitation attorneys' fees and disbursements) which may be asserted against STAAR for any kind of damages, including without limitation damage or injury to property or persons and incidental and consequential damages, by any third party or any of the Indemnities arising out of, in connection with or resulting from (a) any breach of any representation or performance obligation of Distributor hereunder, or (b) any act or omission of Distributor, its employees, agents or representatives. + +9 + +Source: STAAR SURGICAL CO, 10-Q, 8/1/2018 + + + + + +13.2 Distributor shall, at its own expense, maintain at a minimum general and product liability coverage in the Territory of at least US$2 million per occurrence, US$5 million in the aggregate. On a separate endorsement, Distributor shall name STAAR as an additional named insured. Such separate endorsement shall indicate that Distributor's insurance is primary and that STAAR's coverage as an additional named insured is not contributory. Each such insurance policy and endorsement shall provide that the insurance will not be canceled or reduces without at least thirty (30) days' prior written notice to STAAR. On request, Distributor shall provide STAAR with copies or certificates of all such insurance policies. 13.3 EXCEPT FOR EACH PARTY'S CONFIDENTIALITY OBLIGATIONS SET FORTH IN SECTION 12 AND INDEMNIFICATION OBLIGATIONS SET FORTH IN THIS SECTION 13, WITHOUT LIMITING ANY RIGHT DISTRIBUTOR MAY HAVE UNDER LOCAL STATUTES THAT CANNOT BE EXCLUDED, RESTRICTED OR MODIFIED, NEITHER PARTY SHALL BE LIABLE FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, PUNITIVE OR SPECIAL DAMAGES, OR FOR DAMAGES DUE TO LOSS OF PROFITS, LOSS OF BUSINESS, LOSS OF USE OR DATA, OR INTERRUPTION OF BUSINESS, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. 14. Termination 14.1 STAAR or Distributor shall have the right, at its option, to terminate this Agreement, by giving written notice to the other party, effective immediately on receipt of such notice, on the occurrence of any of the following events: (a) In the event that the other party becomes or is deemed insolvent; proceedings are instituted by or against it in bankruptcy, insolvency, reorganization or dissolution; or it makes a general assignment for the benefit of creditors; (b) In the event that the other party fails to observe or perform any obligation, warranty, duty or responsibility under this Agreement and such failure continues unremedied for a period of thirty (30) days following written notice thereof by the non breaching party; or 14.2 STAAR shall have the right to terminate this Agreement by giving written notice to Distributor, effective immediately on receipt of such notice, (a) if Distributor fails to meet the Annual Minimum Volume as set forth in Section 7.2 or (b) pursuant to Section 15, or in the event the parties are unable to agree upon changes in the prices for Products within thirty (30) days following STAAR's notice thereof. 14.3 Notwithstanding the provisions of Section 3 above, either party shall have the right to terminate this Agreement, without cause, upon no less than ninety (90) days' prior written notice to the other party. + +10 + +Source: STAAR SURGICAL CO, 10-Q, 8/1/2018 + + + + + +14.4 Upon any termination or expiration of this Agreement: (a) All sums due to either party from the other shall be promptly paid; (b) Distributor orders received and accepted by STAAR prior to the effective date of the termination of this Agreement shall be fulfilled in accordance with their terms; (c) All property belonging to one party but in the custody of the other shall be returned; (d) STAAR shall have the option to repurchase any or all current and resalable Products in Distributor's inventory at eighty percent (80%) of Distributor's original net purchase price (reflecting a twenty percent (20%) restocking and administrative fee); (e) Distributor shall cease all display, advertising and use of STAAR trade names, trademarks (including the Trademarks), logos and designations, except uses on the Products which remain in Distributor's possession, and shall transfer all registrations and sponsorships for the Products to STAAR or its designee; and (f) The parties have considered the possibility that one or both parties will incur expenses in preparing for performance of this Agreement and that one or both parties will incur expenses and suffer losses as a result of termination, and the parties have nevertheless agreed that the terminating party shall not incur any liability whatsoever for any damage, loss or expense of any kind suffered or incurred by the other party (or for any compensation to the other party) arising from or incident to any termination or non-renewal of this Agreement by the terminating party pursuant to its terms, whether or not the terminating party is aware of any such damage, loss or expense. Without limiting the generality of the foregoing, upon any termination of this Agreement by either Party in accordance with its terms (or otherwise), in no event shall STAAR be required to pay to Distributor any "good will" or other payment of any nature or kind based on the sales, business development or other activities of Distributor during the term of this Agreement. Distributor, for itself and on behalf of each of its employees, hereby waives any rights which may be granted to it or them under the laws and regulations of the Territory or otherwise which are not granted to it or them by this Agreement. Termination is not the sole remedy under this Agreement, and, whether or not termination is effected, all other remedies shall remain available. 15. U.S. Laws and Regulations 15.1 Distributor acknowledges and agrees that it shall comply in all respects with all United States and local country laws, regulations and standards applicable to its activities under this Agreement, including but not limited to the exporting and importing requirements (including the prohibition of the re-export of Products and associated technical data) set forth in this Agreement and in applicable governmental regulations. + +11 + +Source: STAAR SURGICAL CO, 10-Q, 8/1/2018 + + + + + +15.2 Distributor warrants and represents that neither Distributor nor any person acting on Distributor's behalf shall make, directly or indirectly, any offer or promise or authorization of a bribe, kickback, payoff or any other payment or gift intended to improperly influence an agent, government official, political party or candidate for public office to exercise their discretionary authority or influence in order to assist in the sale, marketing, promotion, importation, licensing or distribution of the Products and shall complete and sign the attached Foreign Corrupt Practices Certification (Exhibit C). Specifically, Distributor shall not (a) violate any applicable anti-bribery or anti-corruption laws; or (b) offer, pay or promise to pay, give or promise to give, or authorize the payment or giving of, anything of value to any official representative of any Governmental Entity or authority or any political party or officer thereof or any candidate for office in any jurisdiction (individually and collectively, a "Government Official"), (i) for the purpose of (A) influencing any act or decision of such Government Official in his official capacity, (B) inducing such Government Official to do or omit to do any act in violation of his lawful duty, (C) securing any improper advantage, or (iv) inducing such Government Official to influence or affect any act or decision of any Government Entity, or (ii) in order to assist Distributor in obtaining or retaining business for or with, or directing business to Distributor or any of its affiliates. The term "Governmental Entity" as used in this Section 15.2 means any government or any department, agency or instrumentality thereof, including any entity or enterprise owned or controlled by a government, or a public international organization. Distributor shall maintain for at least two (2) years and make readily available to STAAR or its duly authorized representatives' books, records and accounts prepared in accordance with generally accepted accounting principles that accurately and completely reflect the nature of every transaction related to the sale of the Products. 16. Data Protection 16.1 For the purposes of this Section, the following terms shall have the following meanings: "Data Protection Laws" means any applicable data protection or privacy laws. It shall include: (a) the EU Data Protection Directive 95/46/EC and EU ePrivacy Directive 2002/58/EC as implemented by countries within the European Economic Area ("EEA"); (b) from 25 May 2018, the EU General Data Protection Regulation ("GDPR") as implemented by countries within the EEA and the UK; and/or (c) other laws that are similar, equivalent to, successors to, or that are intended to or implement the laws that are identified in (a) and (b) above; "Shared Personal Data" shall have the meaning as set out in Section 16.4; and The terms "data controller", "data subject", "personal data", "processing", and "sensitive personal data" shall have the same meanings ascribed to them under Data Protection Laws. 16.2 STAAR and Distributor each acknowledge and agree that where a party processes personal data under or in connection with this Agreement it alone determines the purposes and means of such processing as a data controller. 16.3 Each Party confirms that it has complied, and will continue to comply, with its obligations relating to personal data that apply to it under applicable Data Protection Laws. 16.4 To the extent Distributor discloses, provides or otherwise makes available, personal data to STAAR under or in connection with the Agreement ("Shared Personal Data"), Distributor acknowledges that STAAR and/or its service providers or agents may process such Shared Personal Data for any purpose related to this Agreement, including, without limitation, for any purpose necessary for STAAR and/or its service providers or agents to comply with applicable law. + +12 + +Source: STAAR SURGICAL CO, 10-Q, 8/1/2018 + + + + + +16.5 In connection with the Shared Personal Data, Distributor warrants that it: (a) has provided adequate notices to, and obtained valid consents from, the relevant individuals, in each case, to the extent necessary for STAAR and/or its service providers or agents to process the Shared Personal Data (including any sensitive personal data) in connection with this Agreement which may include the transfer of the Shared Personal Data to STAAR outside of the EEA; and (b) shall not, by act or omission, cause STAAR to violate any Data Protection Laws, notices provided to, or consents obtained from, data subjects as result of processing the Shared Personal Data in connection with this Agreement. 16.6 To the extent of any conflict in relation to personal data between the terms contained in this Section and the rest of the Agreement, then the terms of this Section shall control to the extent of such conflict. 17. Survival In addition to Distributor's obligation to pay STAAR all amounts due hereunder, the provisions under Sections 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 24 and 25 shall survive termination of the Agreement, as well as such other provisions which by their meaning and intent have applicability beyond the terms of this Agreement. 18. Publicity Distributor agrees that any publicity or advertising which shall be released by it in which STAAR is identified in connection with the Products shall be in accordance with the terms of this Agreement and with any information or data which STAAR has furnished in connections with this Agreement (or related to the Product). STAAR shall have the right to review and approve all such publicity and advertising prior to dissemination thereof. 19. Assignment Neither party may, directly or indirectly (including in connection with a change of control transaction), transfer or assign this Agreement or any of the rights or obligations hereunder without the prior written consent of the other; provided that STAAR may assign any of its rights and delegate any of its obligations hereunder to its subsidiaries and affiliated companies or in connection with a sale or transfer of all or substantially all of its business to which this Agreement relates, whether by merger, sale of assets or otherwise, without Distributor's prior written consent. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns. 20. Integrated Agreement This Agreement constitutes the entire understanding and agreement between STAAR and Distributor regarding the subject matter hereof and terminates and supersedes all prior formal or informal understandings or agreements relating thereto. + +13 + +Source: STAAR SURGICAL CO, 10-Q, 8/1/2018 + + + + + +21. Force Majeure Performance of the parties hereto of their respective obligations hereunder shall be subject to force majeure and acts of God, including but not limited to insurrections, riots, wars and war-like operations, terrorist acts, explosions, governmental acts, epidemics, failure of contractors to perform, strikes, fires, accidents, acts of any public enemy, inability to obtain required materials, supplies, products or qualified labor, delay in transportation and any applicable law, regulation or restriction of any foreign, federal, state or local governmental entity or instrumentality. However, the parties hereto shall use their commercially reasonable efforts to avoid, remove or cure said circumstances. Any party temporarily excused for performances hereunder by any such circumstance shall resume performance with utmost dispatch when such circumstances are removed or cured. Any party claiming such circumstances as an excuse for delay in performance shall give prompt notice in writing thereof to the other party. Nothing herein and no contrary provisions of any law, regulation, or governmental pronouncement shall, however, relieve Distributor of its obligation to make the payments to STAAR required hereunder at the times and in the manner herein specified. 22. No Waiver No waiver by either party of any breach or default of any of the covenants or agreements herein contained shall be deemed a waiver as to any subsequent or similar breach or default. No right or remedy herein conferred upon either party is exclusive of any other right or remedy herein or by law or in equity provided or permitted. 23. Severability This Agreement is divisible, and provisions herein held to be violate of any applicable treaties, statutes or regulations of any governmental agency having jurisdiction shall effect only that portion held to be invalid or inoperative, and the remaining portions of this Agreement shall remain in full force and effect. 24. Notice Any notice required or permitted to be given hereunder shall be in writing and (a) delivered in person or by internationally-recognized express delivery or courier service (e.g., FedEx, DHL or UPS), (b) sent by facsimile, or (c) deposited in the mail registered or certified first class, postage prepaid and return receipt requested (provided that any notice given pursuant to clause (b) is also confirmed by the means described in clause (a) or (c)), to the address or facsimile number of the party appearing below its signature below or to such other address as such party from time to time may designate in writing in compliance with the terms hereof. Each notice shall be deemed given when so delivered personally, or sent by facsimile transmission, or, if sent by express delivery or courier service four (4) business days after being sent, or if mailed, ten (10) days after date of deposit in the mail. 25. Governing Law and Dispute Resolution 25.1 This Agreement, which is in English, shall be governed by and construed in accordance with the laws of the State of California without regard to the conflicts of laws principles thereof. The parties hereby expressly disclaim and exclude any applicable provisions of the United Nations Convention for the International Sales of Goods. + +14 + +Source: STAAR SURGICAL CO, 10-Q, 8/1/2018 + + + + + +25.2 The parties waive their rights to seek remedies in court (except where the relief sought is an injunction or other equitable relief), including any right to a jury trial. Except in a case where the relief sought is an injunction or other equitable relief, the parties agree that any dispute between the parties arising out of, relating to or in connection with this Agreement, whether characterized or sounding in contract or tort or otherwise, shall be resolved exclusively through binding arbitration conducted in accordance with the Rules of Conciliation and Arbitration of the International Chamber of Commerce by one or more arbitrators appointed in accordance with the said Rules. The arbitration shall be held in Los Angeles, California, USA. Judgment upon the award rendered may be entered in any court having jurisdiction. Each party shall bear its own expenses of the arbitration, but the arbitration fees and costs shall be borne equally between the parties participating in the arbitration. Disputes shall not be resolved in any other forum or venue. 26. Counterparts This Agreement may be executed in duplicate counterparts, each of which shall be deemed to be an original and all of which counterparts shall together constitute one and the same instrument. IN WITNESS WHEREOF, STAAR and Distributor have caused their duly authorized representatives to execute this Distributorship Agreement on this __ day of ____, 20___. STAAR SURGICAL AG DISTRIBUTOR By: By: Name: Name: Title: Title: + +15 + +Source: STAAR SURGICAL CO, 10-Q, 8/1/2018 + + + + + +EXHIBIT A-1 + +List of Products and Prices + +All prices in U.S. dollars, or such other currency as STAAR determines in its sole discretion. + +A-1-1 + +Source: STAAR SURGICAL CO, 10-Q, 8/1/2018 + + + + + +EXHIBIT B Minimum Product Quantities + +B-1 + +Source: STAAR SURGICAL CO, 10-Q, 8/1/2018 + + + + + +EXHIBIT C Foreign Corrupt Practices Certification I, _________, as the [__________] of ___________ hereby certify as follows: 1. I understand and will comply with the anti-bribery provisions of the U.S Foreign Corrupt Practices Act and the UK Bribery Act. Neither I, nor any person employed by me or my business or representing my business, has or will make, offer, promise or authorize, directly or indirectly, any payment or transfer of anything of value to any official, representative or employee of any government, government agency or instrumentality, for the purpose of influencing a decision by any of them to take actions favorable to STAAR Surgical Company or its subsidiaries ("STAAR") or represent them on any matter related directly or indirectly to the purchase of any of STAAR's products. 2. No officer, director, partner, owner, principle, employee or agent of my business is an official or employee of a governmental agency or instrumentality in a position to influence action or decisions regarding me or my business activities on behalf of STAAR and I will inform STAAR, by written notice, if, and as soon as , any such person assumes such a position as official or employee of a governmental agency or instrumentality while at the same time remaining an officer, director, partner, owner, principle, employee or agent of mine or my business at which time STAAR may elect to terminate this contract without any further liability to me or my business. 3. I will indemnify an hold harmless STAAR from any and all fines, damages, losses, costs and expenses (including without limitation reasonable attorneys' fees) incurred by STAAR as a result of any breach of this Certification by me. 4. I understand and agree that failure to comply with the terms of this Certification will entitle STAAR to terminate any and all if its contractual relationships with me and my business. DISTRIBUTOR: By: Officer Title: Print Name: Date: + +C-1 + +Source: STAAR SURGICAL CO, 10-Q, 8/1/2018 \ No newline at end of file diff --git a/full_contract_txt/StampscomInc_20001114_10-Q_EX-10.47_2631630_EX-10.47_Co-Branding Agreement.txt b/full_contract_txt/StampscomInc_20001114_10-Q_EX-10.47_2631630_EX-10.47_Co-Branding Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..a215f467769a2cf00d58557c4b5502c3833f3b59 --- /dev/null +++ b/full_contract_txt/StampscomInc_20001114_10-Q_EX-10.47_2631630_EX-10.47_Co-Branding Agreement.txt @@ -0,0 +1,603 @@ +EXHIBIT 10.47 + + MANIFEST SYSTEM SERVICES AND CO-BRANDING AGREEMENT -------------------------------------------------- + + This Manifest System Services and Co-Branding Agreement ("Agreement") is --------- made and entered into as of April 27, 1999 (the "Effective Date"), by and -------------- between iShip.com, Inc., a Washington corporation (the "Company"), and Mail ------- Boxes Etc. USA, Inc., a California corporation ("MBE"). --- + + RECITALS -------- + + A. The Company has developed an Internet-based shipping system. + + B. MBE wishes to have the Company provide an Internet-based service based on the Company's Internet-based shipping system and the MBE retail manifest system to the MBE Centers (as defined below) for use in manifesting and shipping customer packages, all subject to the terms and conditions set forth in this Agreement. + + C. The Company and MBE desire to engage in certain co-branding activities on the Internet so as to allow customers of MBE Centers to use the Company's Internet-based shipping system in a convenient manner and to list the MBE Centers as drop-off locations and retail shipping centers. + + D. In connection with the services to be provided hereunder, the Company desires to issue to MBE a warrant to purchase up to One million three hundred thirty three thousand three hundred thirty three (1,333,333) shares (as determined pursuant to the terms of the Warrant) of Series B Preferred Stock of the Company substantially in the form attached hereto as Exhibit A (the --------- "Warrant"). ------- AGREEMENT --------- + +1. Definitions. ----------- + + The following terms are defined for the purposes of this Agreement as follows: + + (a) "Acceptance" shall mean MBE's acknowledgment pursuant to Section 2 ---------- below that (i) access to the Service has been granted, and (ii) the Service functions in accordance with the Specifications. + + (b) "Authorized Equipment" shall mean the particular type of computer -------------------- equipment and the specifications thereof set forth in Exhibit B attached hereto --------- on which the Service is intended to be accessed and used by the MBE Centers. + + (c) "Brand Features" means each party's respective trademarks, trade names, -------------- service marks, service names and distinct brand elements that appear from time to time in each party's properties, ventures and services worldwide and are protected under U.S. copyright law or as to which each party has established trademarks or trade dress rights and any modifications to the foregoing that may be created during the term of this Agreement. + + (d) "Brand Guidelines" means the guidelines, if any, for use of the Brand ---------------- Features, which may be prescribed by each party from time to time during the term of this Agreement. + + (e) "Bounty Customer" shall mean any Company Internet Customer or Third --------------- Party/Company Customer. + + (f) "Company Internet Customer" shall have the meaning set forth on Exhibit ------------------------- ------- C attached hereto. - + + (g) "Company Site" shall mean the web site or sites of the Company on the ------------ Internet, one of which is currently located at www.iship.com. ------------- + + (h) "Company Technology" shall mean the Internet-based manifest system of + +Source: STAMPS.COM INC, 10-Q, 11/14/2000 + + + + + + ------------------ the Company that allows users to, among other things, compare various shipping services, print shipping labels and/or track shipments using the Internet. + + (i) "Confidential Information" shall mean the Service Documentation, the ------------------------ Specifications and any information disclosed by one party to the other pursuant to this Agreement that is in written, graphic, machine readable or other tangible form and is marked "Confidential," "Proprietary" or in some other manner to indicate its confidential nature, including but not limited to information related to the respective parties' business, products, proposed new products, customers or related information. Confidential Information may also include oral information disclosed by one party to the other pursuant to this Agreement, provided that such information is designated as confidential at the time of disclosure and is reduced to writing by the disclosing party within a reasonable time (not to exceed thirty (30) days) after its oral disclosure, and such writing is marked in a manner to indicate its confidential nature and delivered to the receiving party. + + (j) "eBay Customer" shall have the meaning set forth on Exhibit C. ------------- --------- + + (k) "In-Center Customer" shall have the meaning set forth on Exhibit C. ------------------ --------- + + (l) "Intellectual Property Rights" means all rights in and to trade ---------------------------- secrets, patents, copyrights, trademarks, know-how, as well as moral rights and similar rights of any type under the laws of any governmental authority, domestic or foreign, including rights in and to all applications and registrations relating to any of the foregoing. + + (m) "Link" means a URL hidden behind a formatting option that may take the ---- form of a colored item of text (such as a URL description), logo or image, and which allows a user to automatically move to or between web pages or web sites. + + (n) "Listings" shall mean the listing of the names, addresses, pricing and -------- other identifying information of each MBE Center which is a party to a Subscription Agreement (as defined in Section 3(b) [Service]). + + (o) "Manifest" means the exclusive MBE retail manifest system to be -------- developed by the parties hereto in accordance with the Specifications. + + -2- + + (p) "MBE Center" shall mean each franchise of MBE operating a franchise ---------- retail outlet within the United States which enters into a Subscription Agreement. + + (q) "MBE-Generated Customer" shall mean any In-Center Customer, Remote ---------------------- Self-Service Customer or MBE Internet Customer. + + (r) "MBE Internet Customer" shall have the meaning set forth on Exhibit C. --------------------- --------- + + (s) "MBE Sites" shall mean the web sites operated by MBE on the Internet --------- during the term of this Agreement, including but not limited to the websites currently located at www.mbe.com and www.mbeonline.com. + + (t) "Remote Self-Service Customer" shall have the meaning set forth on ---------------------------- Exhibit C. --------- + + (u) "Specifications" shall mean the specifications for the Manifest set -------------- forth on Exhibit D, as updated from time to time during the term of this --------- Agreement in accordance with the terms of this Agreement. + + (v) "Stations" shall mean the retail manifest shipping stations within each -------- MBE Center and the remote off-site manifest shipping stations, in each case within the United States, of any MBE Center utilizing Authorized Equipment. + + (w) "Service" shall mean the combination of the Company Technology and the ------- Manifest. + + (x) "Service Documentation" shall mean all manuals, instructions or other --------------------- + +Source: STAMPS.COM INC, 10-Q, 11/14/2000 + + + + + +information provided by the Company to MBE or MBE Centers which directly relate to the functionality and operation of the Service. + + (y) "Third Party/Company Customer" shall have the meaning set forth on ---------------------------- Exhibit C. --------- + + (z) "Third Party/MBE Customer" shall have the meaning set forth on ------------------------ Exhibit C. --------- + + (aa) "Update" shall mean any and all bug fixes, error corrections, and ------ maintenance updates of the Service. + +2. Development, Delivery and Acceptance. ------------------------------------ + + (a) Development License. Each party hereby grants to the other party a ------------------- [***]* (except as provided in Section 18(b) [Assignment]("Assignment")), [***]* (with no --- --- right to sublicense except as set forth below) under all of its Intellectual Property Rights to use, reproduce, modify, and create derivative works of each party's preexisting Intellectual Property Rights solely as is reasonably and actually necessary to complete the development of the Service. Each party may grant sublicenses to contractors or subcontractors it engages to work on the Service, provided + +---------- * Confidential treatment has been requested for the bracketed portion. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission. + + -3- + +that any such subcontractor has entered into an enforceable agreement reasonably acceptable to the other party relating to the assignment of Intellectual Property Rights. + + (b) Delivery. The Company shall use its commercially reasonable best -------- efforts to complete the design of the Manifest and the Service in a timely and professional manner consistent with commercial software industry standards on or before August 1, 1999 and deliver the URL and the access codes or passwords necessary to use the Service to MBE and each subscribing MBE Center on or before September 1, 1999. MBE and MBE Centers shall provide any assistance reasonably requested by the Company in connection with completing such design and effecting such delivery. The parties shall cooperate to implement a beta roll-out of the Service in approximately 100 Designated Locations of MBE Centers selected by mutual agreement of the Company and MBE on or before September 1, 1999, and thereafter shall mutually agree on a plan to make the Service available to all MBE Centers by no later than October 1, 1999. + + (c) Inspection. Following the completion of the beta roll-out and testing ---------- of the Service, MBE shall have a period of twenty (20) business days to undertake inspection and testing of the Manifest to determine conformance with applicable Specifications. The Company shall provide any assistance reasonably requested by MBE in assessing such conformance. If MBE finds that any part of the Manifest does not conform with the applicable Specifications, MBE shall, within the inspection period, notify the Company and provide a detailed written description of such nonconformance. Following confirmation by the Company of such nonconformance, the Company will alter the Manifest within a reasonable time to correct such nonconformance. + + (d) Acceptance. Upon verification by MBE that the Manifest conform with the ---------- Specifications in all material respects, or if MBE fails to notify the Company within the twenty (20) business day inspection period, the Service shall be deemed Accepted. MBE's sole remedy for correction of problems after Acceptance shall be under the Warranties set forth in Section 11. + +3. Provision of Service. -------------------- + + (a) Scope of Agreement. Any Service Documentation provided to MBE and/or ------------------ MBE Centers by the Company shall be subject to all terms and conditions of this Agreement. All use of and access to the Service by MBE and all MBE Centers shall also be subject to all terms and conditions of this Agreement. + + (b) Service. The Company will operate the Service at its network operating ------- + +Source: STAMPS.COM INC, 10-Q, 11/14/2000 + + + + + +center. The Company shall bear all costs associated with the network operating center, including without limitation hardware and software, networking equipment and bandwidth charges, redundant storage and/or mirroring across multiple geographic locations, and maintenance; provided, however, that Company and MBE -------- ------- shall each pay one-half of the costs and expenses associated with transmitting information and data from the servers maintained or used by the Company to the VSAT network hub, including hardware and backhaul circuits. The Company will make the Service available to MBE Centers via one or more secure Internet sites. Each MBE Center approved by MBE that wishes to participate in the Service shall enter into a Subscription Agreement with the Company in a form to be mutually agreed upon by the parties, which form + + -4- + +shall include appropriate obligations of the MBE Centers as set forth in this Agreement (the "Subscription Agreement"). MBE agrees to use its commercially ---------------------- reasonable best efforts to facilitate the execution of a Subscription Agreement by each participating MBE Center within a reasonable amount of time after the Effective Date. The Company hereby grants the MBE Centers a [***]* under all of --- Company's Intellectual Property Rights solely to access and use the Service in accordance with the terms and conditions of this Agreement and the Subscription Agreement. + + (c) Authorized Equipment. Each MBE Center shall be responsible for -------------------- obtaining, installing and maintaining the Authorized Equipment at its sole cost and expense. The Subscription Agreement shall provide that an MBE Center that accesses or uses the Service on any hardware or other equipment, or in conjunction with any software, that does not constitute Authorized Equipment does so as its own risk, and the Company shall not be liable for any failure of the Service on hardware or other equipment, or in conjunction with any software, that does not constitute Authorized Equipment. + + (d) Exclusivity ----------- + + (i) The Company shall not enter into any agreement or arrangement, including without limitation any sale, license, service agreement, co-branding agreement, co-marketing agreement or linking agreement with any provider of manifesting or shipping services through non-carrier retail shipping locations; provided, however, that: + + (A) the Company may provide listings of carrier drop-boxes or carrier-owned counter drop-off locations specific to a particular carrier (including, without limitation, locations within retail establishments) on the Company Site, provided that such listings do not include retail shipping locations, including UPS authorized shipping outlets, FedEx authorized shipping centers and other commercial mail receiving agencies; and + + (B) the Company may enter into any such agreement or arrangement so long as MBE is given advance written notice of such agreement or arrangement and such agreement or arrangement prohibits the use of the Manifest or any Company Technology to manifest or ship packages for retail customers and provided further that Company terminates service to any such entity that uses the Manifest or any Company Technology to serve retail customers. + + (ii) MBE shall not enter into any agreement or arrangement with any provider of an online or Internet-based manifest system other than the Company. + + (iii) The Company may, at its option, terminate the exclusivity provisions set forth in this Section 3(d) [Exclusivity] upon the occurrence of any of the following events: (A) MBE + +---------- * Confidential treatment has been requested for the bracketed portion. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission. + + -5- + + and all MBE Centers together fail to ship at least [***]* packages --- manifested by the Service in any period of three (3) full months commencing on the earlier of (x) March 1, 2000, and (y) the use of the Service to manifest packages by at least [***]* MBE Centers (other than any such --- failure which is directly caused by an event of force majeure (as set forth in Section 18(e) [Force Majeure] or by the failure of the Service to operate in accordance with the Specifications or by the Company's breach of any of its obligations hereunder), or (B) MBE ceases to own at least [***]* shares of + +Source: STAMPS.COM INC, 10-Q, 11/14/2000 + + + + + + --- common stock of the Company (calculated on an as-converted basis and as adjusted for any stock split, stock dividend, recapitalization or similar transaction). + + (iv) Beginning 18 months after the Effective Date, MBE may, at its option, terminate the exclusivity provisions set forth in this Section 3(d) [Exclusivity] if (A) MBE and all MBE Centers together fail to ship at least [***]* --- packages manifested by the Service in any three (3) full month period ending 18 months after the Effective Date and (B) such failure to meet the volume requirements set forth above is related to the unsatisfactory performance of the Service as evidenced by written communications from a commercially significant number of MBE Centers. + +4. Support; Training. ----------------- + + (a) Updates and Service Revisions. The Company will make Updates to the ----------------------------- Service in accordance with the requirements set forth in the Specifications at no charge for the entire term of this Agreement. Without limiting the foregoing, the Service shall be updated from time to time during the term of this Agreement to include accurate and current (i) Listings and (ii) pricing and service descriptions for each carrier supported by the Manifest, in each case as soon as reasonably practicable following the receipt by the Company of such Listings, pricing and service descriptions. As reasonably necessary, the Company shall update the Specifications to reflect such Updates and shall provide a copy of same to MBE at least once per calendar quarter. If the Company develops additional Intellectual Property Rights that are made available without development charge to other customers of the Company, the Company will also make such Intellectual Property Rights available to MBE without development charge. + + (b) MBE Center Support. MBE shall have the right to designate in writing up ------------------ to five (5) second-level support personnel individuals and alternates to such individuals as contact persons (the "Contact Persons") (although the parties may --------------- mutually agree to increase such number of Contact Persons to ensure adequate support exists for the MBE Centers) Such Contact Persons shall interface with the MBE Centers with respect to matters relating to the Service and may transmit request assistance and descriptions of problems encountered with the Service to the Company via electronic mail, fax, or overnight mail. The Company will provide telephone support to the Contact Persons at a level and in such a manner as the parties mutually agree to be adequate. The Company shall use reasonable efforts to provide the Contact Persons with answers and solutions to problems encountered by MBE or the MBE Center in the course of MBE's or MBE Centers' normal and proper use of the Service in accordance with the terms and + +---------- * Confidential treatment has been requested for the bracketed portion. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission. + + -6- + +conditions of this Agreement. Only the Contact Persons may contact the Company in connection with matters relating to technical support, and the Company shall have no obligation to answer questions or assist MBE or MBE Centers' personnel other than the Contact Persons. The Company shall provide a reasonable amount of training and training materials to the Contact Persons to provide the Contact Persons with information concerning the Service and to assist the Contact Persons in providing support to the MBE Centers and other personnel of MBE. MBE shall take reasonable steps to ensure that MBE Centers and personnel of MBE other than the Contact Persons do not contact the Company directly with respect to issues relating to support of the Service. The Company shall take reasonable steps to provide adequate industry standard support of all Internet users of the Company Site and other sites using the Company Technology. MBE and MBE Centers may refer all support questions relating directly to the Company Site or the Company Technology to the Company in accordance with the foregoing. + +5. Records; Audits. --------------- + + The Company shall maintain complete and accurate records of the number of packages shipped by the MBE Centers using the Service and all payments due or accrued to the Company by MBE Centers hereunder. MBE shall, at any time during the term of this Agreement, be entitled to audit all such records upon ten (10) days written notice to the Company, in order to confirm the accuracy of such records and conformance with the terms and conditions of this Agreement; provided, however, that no more than one (1) such audit may be conducted in any -------- ------- ninety (90)-day period. Any such audit shall be performed at MBE's expense during the Company's normal business hours; provided, however, that in the event -------- ------- that such audit reveals any non-compliance with any term of this Agreement by the Company, the Company shall bear the cost of such audit. + +Source: STAMPS.COM INC, 10-Q, 11/14/2000 + + + + + +6. Additional Development. ---------------------- + + (a) Request for Proposal. From time to time, MBE may request additional -------------------- custom software or other custom development to be provided by the Company under this Agreement. If MBE has a requirement for a specific enhancement or modification of the Service, MBE will identify to the Company in writing a summary of such requirement (the "Request for Proposal"). Such Request for -------------------- Proposal will provide a description sufficient to enable the Company to determine the general demand for and its plans, if any, to develop the same or similar enhancements or modifications. + + (b) Terms and Conditions. If the Company decides that it has the technical -------------------- ability to fulfill the Request for Proposal, then the Company will respond to MBE within forty-five (45) days of receiving the Request for Proposal, stating the terms and conditions upon which the Company would be able to undertake such development, including, but not limited to, changes to the Specifications, custom development charges, and a proposed delivery schedule. + + (c) Development and Billing Rates. The Company shall perform such ----------------------------- development in accordance with the highest professional standards. The cost of such development shall be the Company's standard billing rates then in effect (in addition to reimbursement of any expenses, in accordance with the Company's standard practices), which shall be paid by MBE within thirty (30) days of receipt of an invoice therfor. No additional fees or bounties shall be owed or + + -7- + +payable in connection with such development, unless such development results in a revenue-generating feature or functionality of the Service which is outside of the scope of the Specifications, in which case the parties shall negotiate in good faith to mutually agree upon a reasonable fee mechanism therefor and/or reimbursement of development expenses. Upon completion of such additional development, the Company shall update the Specifications to reflect such additional development and shall provide a copy of same to MBE. + + (d) Credit. MBE shall receive a credit applicable to such billing rates ------ (but not to reimbursement of expenses) for any development performed by the Company under this Section 6 equal to [***]* of the total fees paid by MBE and --- all MBE Centers, which credit shall be reflected on a monthly statement by the Company to MBE. Any such credit must be used within twelve (12) months of receipt of payment by the Company. + +7. Ownership. --------- + + (a) General. The Company will have full and exclusive right, title and ------- ownership interest in and to the Service and the Specifications and the Intellectual Property Rights therein. The Company is, and shall be, the sole owner of all inventions, discoveries and/or enhancements relating to the Service and the Specifications, including all copies, translations, compilations, partial copies, derivative works and updated works, whether partial or complete and whether or not merged into other program materials and whether in written or unwritten form. Except as authorized by this Agreement (including MBE's right to use the Specifications as set forth in Section 15(d)(iv) [Effect of Termination]) or as otherwise agreed in writing, MBE and MBE Centers may not, directly, or through any person or entity, in any form or manner, copy, distribute, reproduce, incorporate, use or allow access to the Service or the Specifications, or modify, prepare derivative works of, decompile, reverse engineer, disassemble or otherwise attempt to derive source code or object code from the Service or the Specifications. + + (b) Proprietary Notices. MBE will ensure that all copies of Service ------------------- Documentation made in accordance with this Agreement will incorporate copyright and other proprietary notices in the same manner that the Company incorporates such notices in the Service or in any manner reasonably requested by the Company, and MBE agree not to delete or modify any such notices incorporated in the Service Documentation in any respect. MBE will also permit the Company to enter any of MBE's premises during regular business hours to inspect the use of the Service in any reasonable manner. The Subscription Agreement shall provide that MBE Centers will comply with the terms of this Section 7(b) [Proprietary Notices]. + + (c) List of Trademarks. Each party (the "Granting Party") hereby grants the ------------------ -------------- other party (the "Using Party") a limited license to use its Brand Features in ----------- connection with the marketing, distribution, provision of access to, and support of the Service. The Using Party agrees that such Brand Features are the exclusive property of the Granting Party and that all usage of such marks and any goodwill established by the use of such marks shall inure to the benefit of + +Source: STAMPS.COM INC, 10-Q, 11/14/2000 + + + + + +the Granting Party and that this Agreement does not confer any goodwill or other + +---------- * Confidential treatment has been requested for the bracketed portion. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission. + + -8- + +interests in such marks on the Using Party The Using Party will comply with the Granting Party's Brand Guidelines. The Using Party shall provide to the Granting Party examples of any use of the Brand Features of the Granting Party prior to use. The Using Party shall modify or discontinue such use if requested by the Granting Party. Neither party shall adopt or attempt to register any trademark, trade name, or service mark which is confusingly similar to the other party's Brand Features such as "Ship Mailboxes" (and the like). + + (d) Customer Information. The Company and MBE shall jointly own (without -------------------- duty to account) all customer lists and related customer data gathered through the use of the Service by customers of MBE and MBE Centers ("Customer Data"). ------------- During the term of this Agreement, neither party shall provide any Customer Data to any third party (other than MBE Centers or an affiliate of MBE or the Company) without the prior written consent of the other party The Company shall initially provide the Customer Data to MBE in acceptable electronic format as soon as practicable following the reasonable request of MBE, and, once MBE (at its sole cost and expense) has implemented an appropriate means to warehouse the Customer Data, the parties shall take reasonable steps to transfer all existing Customer Data to MBE and implement a system whereby the Customer Data is automatically downloaded and provided to MBE on a periodic basis. The Company agrees to retain the Customer Data in accordance with the Company's own data retention policies, and in any case for no less than 13 months from the creation of such Customer Data. The Company, MBE, affiliates of the Company and MBE, and the MBE Centers may each use the Customer Data for marketing and other purposes in accordance with a mutually agreed upon privacy policy and in accordance with any mutually agreed upon privacy policy displayed to customers in connection with the Service. Notwithstanding the foregoing, the Company agrees not to use any Customer Data to solicit any MBE-Generated Customers with respect to any services offered by the Company; provided, however, that the Company may use Customer Data to solicit such customers who have a shipping account with a carrier or with respect to services not offered by MBE and the MBE Centers. Notwithstanding the foregoing, MBE agrees not to use any Customer Data in any manner which would reasonably be expected to eliminate any Bounty Package payment to the Company hereunder. + + (e) Reserved Rights. Without limitation of the foregoing, each party --------------- reserves all rights other than those expressly granted in this Agreement, and no licenses are granted except as expressly set forth herein. + + (f) Notices. Each party agrees to display mutually agreeable trademark and ------- copyright notices or legends of the other party when using such other party's Brand Features. Each party shall in advance submit to the other party the proposed placement of such notices or legends (including, without limitation, the place and manner of incorporation into electronic media or transmissions), and such other party shall have the right, acting reasonably, to approve the same. + +8. Payments; Taxes. --------------- + + (a) Basic Fee. In consideration for the Service provided hereunder, for --------- each package shipped utilizing the Service (other than a package which is shipped first class by the U.S. Postal + + -9- + +Service), the Company shall be entitled to receive the amount of [***]* (the --- "Basic Fee"). MBE agrees to use its commercially reasonable efforts to execute --------- agreements, or to facilitate the execution of agreements among the appropriate parties, so that such Basic Fee is paid to the Company directly from the carrier which ships such package no later than fifteen (15) days following the end of the month in which such package was shipped. If MBE is unable, despite its commercially reasonable efforts, to facilitate the execution of such an agreement with one or more carriers, the Basic Fee shall be paid by each MBE Center directly pursuant to the terms of the Subscription Agreement. + + (b) Bounty Fee. In further consideration for the Service and the other ---------- obligations of the Company hereunder, for each package shipped by or through an MBE Center by a Bounty Customer who pays the shipping rates charged by such MBE + +Source: STAMPS.COM INC, 10-Q, 11/14/2000 + + + + + +Center, ("Bounty Package"), the Company shall be entitled to receive the -------------- following amounts (the "Bounty Fee") from each such MBE Center, for Bounty ---------- Packages shipped during each calendar month: + + (i) in the event that less than [***]* Bounty Packages shall have --- been shipped by the MBE Centers during the twelve (12) full months prior to the shipping of such Bounty Package (or, if such information is not yet available for the month prior to the month in which such Bounty Package is shipped, the most recent twelve (12) full months for which such information is available) (the "Measurement Period"), the amount of [***]* per Bounty Package shipped via ------------------ --- air transportation and the amount of [***]* per Bounty Package shipped via --- ground transportation; + + (ii) in the event that at least [***]* but less than [***]* Bounty --- --- Packages have been shipped by the MBE Centers during the Measurement Period, the amount of [***]* per Bounty Package shipped via air transportation and the --- amount of [***]* per Bounty Package shipped via ground transportation; --- + + (iii) in the event that at least [***]* but less than [***]* Bounty --- --- Packages shall have been shipped by the MBE Centers during the Measurement Period, the amount of [***]* per Bounty Package shipped via air transportation --- and the amount of [***]* per Bounty Package shipped via ground transportation; --- and + + (iv) in the event that at least [***]* Bounty Packages shall have been --- shipped by the MBE Centers during the Measurement Period, the amount of [***]* --- per Bounty Package shipped via air transportation and the amount of [***]* per --- Bounty Package shipped via ground transportation. + + (c) eBay Fee. In further consideration for the Service and the other -------- obligations of the Company hereunder, for each package shipped by or through an MBE Center by an eBay Customer ("eBay Package"), the Company shall be entitled ------------ to receive the following amounts from such MBE Center for eBay Packages shipped during each calendar month, in each case + +---------- * Confidential treatment has been requested for the bracketed portion. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission. + + -10- + +after deduction of the lesser of (x) [***]* and (y) the amount paid or to be --- paid by such eBay Customer directly to the Company with respect to the shipment of such package (the "eBay Fee"): -------- + + (i) in the event that at least [***]* but less than [***]* eBay --- --- Packages have been shipped by MBE and the MBE Centers during the Measurement Period, the amount of [***]* per eBay Package shipped via air transportation and --- the amount of [***]* per eBay Package shipped via ground transportation; --- + + (ii) in the event that at least [***]* but less than [***]* eBay --- --- Packages shall have been shipped by the MBE Centers during the Measurement Period, the amount of [***]* per eBay Package shipped via air transportation and --- the amount of [***]* per eBay Package shipped via ground transportation; and --- + + (iii) in the event that at least [***]* eBay Packages shall have been --- shipped by the MBE Centers during the Measurement Period, the amount of [***]* --- per eBay Package shipped via air transportation and the amount of [***]* per --- eBay Package shipped via ground transportation. + +Source: STAMPS.COM INC, 10-Q, 11/14/2000 + + + + + + (d) Payment Cycle. The Company shall bill and collect all amounts due to ------------- the MBE Centers for Bounty Packages and eBay Packages from each Bounty Customer or eBay Customer, as the case may be, by processing credit card transactions over the Internet. The Company shall pay such amounts, less the relevant Bounty Fee or eBay Fee then in effect, to MBE on the next business day or as soon as reasonably practicable (but in any event within one week) following the shipment date of each package, and MBE agrees to distribute such amounts to the MBE Centers. At the Company's option, Bounty Customers or eBay Customers may also be entitled to pay directly for the shipment of such Bounty Package or eBay Package at MBE Centers, and the Company shall be entitled to deduct the relevant Bounty Fee or eBay Fee then in effect from any payments due to such MBE Center for shipment of Bounty Packages, eBay Packages or otherwise. + + (e) Right of Offset. In the event of any default in payment by an MBE --------------- Center under this Section 8 which continues uncured for a period of thirty (30) days, in addition to any rights or remedies which the Company may have at law or equity or pursuant to this Agreement, the Company shall have the right (but not the obligation) to (i) terminate providing the Service to such MBE Center and (ii) offset any amounts owed to the Company by such MBE Center from any payments owed to such MBE Center by the Company. + + (f) Taxes. MBE shall pay or reimburse the Company for all taxes, duties and ----- assessments imposed on MBE or the Company in connection with the license or use of the Service by MBE under this Agreement, including without limitation all sales, use, excise and other taxes and duties, excluding only taxes based upon the Company's net income. MBE shall + +---------- * Confidential treatment has been requested for the bracketed portion. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission. + + -11- + +hold the Company harmless from all claims and liability arising from MBE's failure to report or pay any such taxes, duties and assessments. + + (g) [***]* --- + + (h) Independent MBE Centers. Notwithstanding any other provision of this ----------------------- Agreement, Company acknowledges and agrees that each participating MBE Center is an independently owned and operated franchise and that MBE is not responsible for any debts or acts or omissions of its franchisees. Each use by an MBE Center of the Service shall be pursuant to the terms and conditions of a Subscription Agreement and each participating MBE Center shall be responsible for paying to Company any charges incurred. Company further acknowledges that each participating MBE Center may choose to make the Service (or some portion thereof) available to customers of MBE Centers. + +9. Co-Marketing Obligations. ------------------------ + + (a) Listings. MBE shall supply and regularly update the Listings, and the -------- Company shall include the Listings in the Company Site and shall use commercially reasonable best efforts to include such Listings on other third party web sites utilizing the Company Technology. + + (b) Mutual Links. During the term of this Agreement, each party will ensure ------------ that the relevant pages in each party's website will include Links to the other party's site(s). Without limiting the foregoing, and within the first three (3) months following the Effective Date, the Company shall assist MBE at no additional charge in developing a series of Links between the MBE Site and the Company Site. The purpose of such Links shall be to allow MBE Internet Customers to access certain agreed-upon features provided by the Company Site. At a minimum, such functionality shall be equivalent to that provided by the Company Site to public Internet users. As mutually agreed upon by the parties, the parties may place advertising banners promoting their products and services on appropriate pages of the other party's website. + + (c) Marketing and Public Relations. So long as such activities are in ------------------------------ compliance with MBE Brand Guidelines then in effect (i) the Company shall display the logo of MBE on the Company Site and identify MBE as the exclusive retail shipping partner of the Company, (ii) to the extent reasonably practicable, the Company shall include the logo of MBE on every carrier or shipping label generated pursuant to this Agreement and (iii) the parties agree to use reasonable efforts to cooperate to develop a co-branded Company/MBE logo to display on Internet-generated shipping labels generated pursuant to this Agreement. + +Source: STAMPS.COM INC, 10-Q, 11/14/2000 + + + + + +10. Confidential Information. ------------------------ + + (a) Limited Access. MBE and MBE Centers agree not to provide or otherwise -------------- make available any Service Documentation or other Confidential Information of the Company to any person other than employees, consultants, contractors or agents of MBE and MBE Centers with a + +---------- * Confidential treatment has been requested for the bracketed portion. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission. + + -12- + +need to use such Service Documentation or Confidential Information in accordance with the terms of this Agreement. + + (b) Confidentiality. Each party shall treat as confidential all --------------- Confidential Information of the other party, shall not use such Confidential Information except as set forth in this Agreement, and shall use reasonable efforts not to disclose such Confidential Information to any third party. Without limiting the foregoing, each of the parties shall use at least the same degree of care which it uses to prevent the disclosure of its own confidential information of like importance to prevent the disclosure of Confidential Information disclosed to it by the other party under this Agreement. Each party shall promptly notify the other party of any actual or suspected misuse or unauthorized disclosure of the other party's Confidential Information. + + (c) Exceptions. Each party agrees not to disclose or otherwise make such ---------- Confidential Information available to third parties without the other party's prior written consent except to the extent that the Confidential Information (i) was in the public domain at the time it was disclosed or has entered the public domain through no fault of such party, (ii) was known to such party, without restriction, at the time of disclosure, as demonstrated by files in existence at the time of disclosure, (iii) is disclosed with the prior written approval of the other party, (iv) was independently developed by such party without any use of Confidential Information, (v) became known to such party, without restriction, from a source other than the other party without breach of this Agreement by such party and otherwise not in violation of the other party's rights, (vi) is required to be disclosed under securities laws or (vii) is disclosed pursuant to the order or requirement of a court, administrative agency, or other governmental body; provided, however, that such party shall use -------- ------- all reasonable efforts to provide prompt, written, and sufficient advance notice thereof to the other party to enable the other party to seek a protective order or otherwise prevent or restrict such disclosure. Each party agrees that to take appropriate action by instruction, agreement, or otherwise with its employees, agents and representatives to satisfy such party's obligations under this Agreement with respect to use, copying, modification, protection and security of Confidential Information. + + (d) Return of Confidential Information. Upon expiration or termination of ---------------------------------- this Agreement, each party shall return all Confidential Information received from the other party. + + (e) Confidentiality of Agreement. Each party shall be entitled to disclose ---------------------------- the existence of this Agreement, but agrees that the terms and conditions of this Agreement shall be treated as Confidential Information and shall not be disclosed to any third party; provided, however, that each party may disclose -------- ------- the terms and conditions of this Agreement; (i) as required by any court or other governmental body; (ii) as otherwise required by law, (iii) to legal counsel of the parties; (iv) in confidence, to accountants, banks, and financing sources and their advisors; (v) in connection with the enforcement of this Agreement or rights under this Agreement; or (vi) in confidence, in connection with an actual or proposed merger, acquisition, or similar transaction. + +11. Representations, Warranties and Covenants. ----------------------------------------- + + (a) Warranty. Company represents and warrants that during the term of this -------- Agreement the Service shall confirm to its specifications and the Specifications in all material + + -13- + +respects, provided that the Service is properly used in accordance with the terms of this Agreement and the Subscription Agreement, and shall not contain a higher number of, or more serious errors, than would be expected by a reasonable + +Source: STAMPS.COM INC, 10-Q, 11/14/2000 + + + + + +commercial user of a service similar to the Service. + + (b) Outages. After Acceptance and during the term of this Agreement, ------- Company will use its best efforts to make the Service available to the MBE Centers from 4 a.m. to 9 p.m. PST every day. Scheduled maintenance which may result in an interruption to the Service shall be performed outside of these hours. Each party shall provide the other party with reasonable and prompt notification of all known failures of the Service to be operational during these hours ("Outages"). The Company shall make qualified personnel available to MBE personnel by telephone, e-mail or pager (response within twenty (20) minutes) for the reporting of Outages at no additional charge. Company will then use its best efforts to resolve the Outage as soon as possible. Within six months of the Effective Date, the Company and MBE will jointly develop a disaster recovery plan outlining plans to respond to Outages. + + (c) No Conflicts. The Company is not currently subject and throughout the ------------ term will not be subject to any obligations or disabilities that will or might prevent or interfere with fully keeping and performing all of the agreements, covenants and conditions to be kept or performed hereunder, and the Company has not made nor will make any agreement, commitment, grant or assignment, and will not do, or omit to do, any act or thing that could or might interfere or impair the complete enjoyment of the rights granted and the Services to be provided hereunder. + + (d) Originality. The Company represents and warrants that it currently has ----------- and throughout the term will have full title to and ownership of (or licenses to) the Service and all Intellectual Property Rights embodied in or used in connection therewith, free and clear of liens, claims and encumbrances, and that it has full power and authority to grant the rights provided herein. + + (e) Year 2000. Company represents, warrants and covenants that the Service --------- includes design, performance and functionality such that the Service will not generate any invalid and/or incorrect date-related results when used during any year prior to, during or after the calendar year 2000. + + (f) Remedies. The Company's sole and exclusive liability and MBE's sole and -------- exclusive remedy for breach of the representations and warranties set forth in this Section 11 shall be, at the Company's election, to either (i) use its best efforts to make the Service perform in accordance with the Specifications in all material respects as soon as reasonably practicable, or (ii) return the Fees paid by MBE and MBE Centers for the Service in which case MBE would have the right to either terminate the entire Agreement or the portions of the Agreement affected by breach of the representation and warranties. In the event that the Company elects (i) of this sub-section in accordance with the terms and conditions set forth herein and is unable to make the Service perform in accordance with the Specifications in all material respects within twenty one (21) days after such election, MBE may then elect to continue to proceed under (i) or MBE may elect to proceed under (ii) of this sub-section. + + -14- + + (g) Disclaimer. EXCEPT FOR THE EXPRESS WARRANTIES STATED ABOVE, NEITHER ---------- PARTY MAKES ANY PROMISES, REPRESENTATIONS OR WARRANTIES, EITHER EXPRESS, IMPLIED, STATUTORY, OR OTHERWISE, WITH RESPECT TO THE SYSTEM OR THE MANIFEST, INCLUDING ITS CONDITION, ITS CONFORMITY TO ANY REPRESENTATION OR DESCRIPTION, OR THE EXISTENCE OF ANY LATENT OR PATENT DEFECTS, AND EACH PARTY SPECIFICALLY DISCLAIMS ALL IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NONINFRINGEMENT OF THIRD PARTY INTELLECTUAL PROPERTY RIGHTS. + +12. Indemnity for Patent or Copyright Infringement. ---------------------------------------------- + + (a) Indemnity. The Company will defend, at its expense, any action brought --------- against MBE and its directors, officers, employees, agents, affiliates, successors, assigns or franchisees ("Indemnitees") based upon a claim that the Service used properly in accordance with the terms of this Agreement and the Subscription Agreement infringes a U.S. patent or copyright or misappropriates a trade secret under U.S. law (a "Claim"). The Company further agrees to pay all damages and costs (including reasonable attorneys' fee and expert witness fees) incurred by any Indemnitee in connection with such Claim. The Company shall have sole control of any such action or settlement negotiations. Without the consent of MBE, which shall not be unreasonably withheld, the Company shall not settle any such Claim in a manner that (i) imposes damages or costs on any Indemnitee not covered by the Company hereunder or (b) imposes any injunctive or other non-monetary relief on any Indemnitee. MBE shall notify the Company promptly in writing of each such Claim and gives the Company all authority, information and assistance, at the Company's expense, reasonably necessary to settle or defend such claim. + + (b) Remedy Options. If the Service becomes, or in the opinion of the + +Source: STAMPS.COM INC, 10-Q, 11/14/2000 + + + + + + -------------- Company may become, the subject of a claim of infringement of any U.S. patent or copyright, the Company shall notify MBE, and the Company may, at its option: (i) procure for MBE and MBE Centers the right to use the Service free of any liability or (ii) replace or modify the Service to make it non-infringing. + + (c) Sole and Exclusive Liability. THIS SECTION 12 SETS FORTH THE SOLE AND ---------------------------- EXCLUSIVE LIABILITY OF THE COMPANY FOR INFRINGEMENT OF THIRD PARTY INTELLECTUAL PROPERTY RIGHTS. + + (d) Exclusions from Indemnification. The Company assumes no liability, and ------------------------------- shall have no obligation to defend or pay any amounts to any Indemnitee hereunder for (i) any method or process in which the Service may be used by MBE or any MBE Center which is not set forth in the Specifications, (ii) any improper use of the Service by an Indemnitee or (iii) the combination, operation or use of the Service with non-Company software or data, if such infringement could have been avoided but for the combination, operation or use of the Service with such programs or data. + +13. Indemnification. --------------- + + (a) Indemnification by the Company. The Company, at its own expense, will ------------------------------ indemnify, defend and hold harmless MBE, and its employees, franchisees, representatives and + + -15- + +agents, against any claim, suit, action, or other proceeding brought against MBE or such party, to the extent that such claim, suit, action or other proceeding is based on or arises from. + + (i) any misrepresentation or breach or representation or warranty of the Company contained herein; or + + (ii) any breach of any covenant or agreement to be performed by the Company hereunder. + + The Company will pay all costs, damages, and expenses, including, but not limited to, reasonable attorneys' fees and costs awarded against or otherwise incurred by MBE in connection with or arising from any such claim, suit, action or proceeding attributable to any such claim. + + (b) Indemnification by MBE. MBE, at its own expense, will indemnify, defend ---------------------- and hold harmless the Company, and its employees, representatives and agents, against any claim, suit, action, or other proceeding brought against the Company or such party, to the extent that such claim, suit, action or other proceeding is based on or arises from: + + (i) any misrepresentation or breach of representation or warranty of MBE contained herein; or + + (ii) any breach of any covenant or agreement to be performed by MBE hereunder. + + MBE will pay all costs, damages, and expenses, including, but not limited to, reasonable attorneys' fees and costs awarded against or otherwise incurred by the Company in connection with or arising from any such claim, suit, action or proceeding attributable to any such claim. + + (c) Procedures. Each party's obligation to indemnify the other hereunder ---------- shall be conditioned upon (i) the indemnified party providing the indemnifying party with prompt notice of any claim that could lead to a claim for indemnification, (ii) the indemnified party permitting the indemnifying party to assume and control the defense of such action, with counsel chosen by the indemnifying party (who shall be reasonably acceptable to the indemnified party) and (iii) the indemnified party not entering into any settlement or compromise of any such claim without the indemnifying party's prior written consent, which shall not be unreasonably withheld or delayed. + + -16- + +14. Limitation of Liability. Notwithstanding anything to the contrary in ----------------------- this Agreement, in no event shall either party's liability under any provision of this Agreement or otherwise arising out of or related to this Agreement (other than payments due or accrued under Section 8, exceed the amounts paid by MBE and the MBE Centers to the Company pursuant to this Agreement. The parties further agree that NEITHER PARTY WILL BE LIABLE FOR ANY LOST PROFITS, FOR COSTS OF PROCUREMENT OF SUBSTITUTE GOODS OR SERVICES OR FOR ANY CLAIM OR DEMAND AGAINST A PARTY BY ANY OTHER PARTY. IN NO EVENT WILL EITHER PARTY BE LIABLE FOR + +Source: STAMPS.COM INC, 10-Q, 11/14/2000 + + + + + +CONSEQUENTIAL, INCIDENTAL, SPECIAL, INDIRECT, OR EXEMPLARY DAMAGES ARISING OUT OF THIS AGREEMENT, EVEN IF A PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, AND UNDER ANY CAUSE OF ACTION, INCLUDING NEGLIGENCE. THESE LIMITATIONS SHALL APPLY NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED REMEDY. + +15. Term and Termination. -------------------- + + (a) Term and Renewal Option. The initial term of this Agreement shall ----------------------- commence on the Effective Date and end on the fifth anniversary of the Effective Date. MBE shall have the right to elect by written notice to the Company at any time between two (2) and six (6) months prior to the end of such initial term or any subsequent Renewal Period (as defined below), to notify the Company that MBE elects to seek to extend such term for additional two (2)-year periods (each a "Renewal Period") In the event of such election, MBE and the Company shall have -------------- a period of sixty (60) days in which to negotiate commercially reasonable Basic Fees, Bounty Fees and eBay Fees (and other applicable fees) ("Fee Schedule") ------------ under which the Company would be willing to renew this Agreement for such Renewal Period. If the parties are unable to reach agreement during such sixty (60) day period, either party may request that the Fee Schedule be submitted to arbitration pursuant to Section 18(m) [Arbitration]. If MBE notifies the Company of its intent to so renew prior to the end of such initial term or such Renewal Period, the term of this Agreement shall automatically be extended for the Renewal Period and, other than the Fee Schedule, all of the terms and conditions of this Agreement shall remain in full force and effect. + + (b) Termination. ----------- + + (i) Either party may, at its option, terminate this Agreement upon notice to the other party if (A) the other party materially fails to comply with any of the material terms and conditions of this Agreement and (B) if such default has not been cured within thirty (30) days (forty five (45) days if required by the nature of the breach) after written notice to the other party or, if such breach is not curable within thirty (30) days (forty five (45) days if required by the nature of the breach), reasonable efforts and progress are not being made to cure such breach. + + (ii) This Agreement shall terminate, without notice, (A) upon the institution by or against either party of insolvency, receivership or bankruptcy proceedings or any other proceedings for the settlement of such party's debts, (B) upon either party's making an assignment for the benefit of creditors, or (C) upon either party's dissolution or ceasing to do business. + + -17- + + (c) Termination Period. ------------------ + + (i) If this Agreement is terminated or expires in accordance with this Section 15 (other than termination by the Company in the event of an uncured material breach by MBE), then MBE shall have a period of up to twenty-four (24) months from and after the date of such termination, to make arrangements with respect to the conversion of the Service to a non-Company manifest system (the "Termination Period"). The date when the Service shall have ------------------ been converted to a non-Company manifest system shall hereinafter be referred to as the "Termination Completion Date" and shall be the effective date of -------------------------- termination of this Agreement, in such event. During the Termination Period each party will continue to perform its obligations hereunder, and MBE and MBE Centers will continue to pay any applicable fees and payments hereunder to the Company. MBE shall keep the Company informed as reasonably necessary with respect to such conversion. MBE also shall give the Company written notice of the estimated Termination Completion Date promptly after a reasonably definitive projected Termination Completion Date is known by MBE, and shall give written notice to the Company promptly after any change in such estimated Termination Completion Date. + + (ii) During the Termination Period, the Company will give reasonable cooperation and support to MBE to assure an orderly and efficient transition and, without limiting the generality of the foregoing, at MBE's expense, the Company shall be obligated to provide MBE with data reasonably necessary for MBE to convert or implement the non-Company systems, procedures and practices. + + (d) Effect of Termination. ---------------------- + + (i) Sections 1, 7, 10, 13, 14, 15, 16 and 18, as well as any payments accrued prior to termination of this Agreement, shall survive any termination or expiration of this Agreement. + + (ii) Within thirty (30) days after the Termination Completion Date, + +Source: STAMPS.COM INC, 10-Q, 11/14/2000 + + + + + +each party shall, at its own expense, destroy or return to the Company and make no further use of, any property, materials or other items of the other party and shall certify, in writing that it has done so + + (iii) Nothing contained herein shall limit any other remedies that either party may have for the default of the other party under this Agreement nor relieve either party of any of their obligations incurred prior to termination of this Agreement. + + (iv) During the Termination Period and thereafter, and notwithstanding any other provision of this Agreement, MBE will be free to use its own personnel, and/or engage or contract with any third party to use the Specifications to design, develop and market an Internet-based manifest system similar to the Manifest (including products that contain functionality similar to the Service and which have a "look and feel" similar or identical to the Manifest), in each case solely for the benefit of MBE and the MBE Centers and international franchisees or licensees of MBE. MBE shall not use the object code or source code of the Manifest in the course of such development. Subject to MBE's compliance with the provisions of this subsection (iv), the Company shall not + + -18- + +assert any claim against MBE under the Company's Intellectual Property Rights in the Specifications or the Manifest in connection with such development, other than for use of the Company's trademarks, trade names, service marks and service names. Neither party shall have the right to retain or use the specific software implementation of the Manifest developed by the parties hereunder; provided, however, that the Company may retain one (1) copy of the software implementation of the Manifest solely for archival and evidentiary purposes. + +16. Publicity. Upon execution of this Agreement, the parties will jointly --------- prepare a mutually acceptable description of their business relationship as contemplated by this Agreement which may be used by either party in press releases and other marketing materials from time to time during the term of this Agreement. Additional press releases or publicity materials shall be approved by each party in writing prior to release. + +17. Warrant. On the Effective Date, the Company shall issue the Warrant to ------- MBE, upon the terms and subject to the conditions set forth therein. + +18. Miscellaneous. ------------- + + (a) Amendments and Waivers. Any term of this Agreement may be amended or ---------------------- waived only with the written consent of the parties or their respective successors and assigns. Any amendment or waiver effected in accordance with this Section 18(a) [Amendments and Waivers] shall be binding upon the parties and their respective successors and assigns. + + (b) Assignment. Each party shall have the right to assign its rights, ---------- obligations and privileges hereunder to an assignee in connection with any merger, acquisition or sale of all or substantially all of the business to which this Agreement relates. Each MBE Center shall have the right to assign its rights and obligations and privileges under a Subscription Agreement in connection with any merger, acquisition or sale of all or substantially all of such MBE Center's assets. The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective permitted successors and assigns of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement. + + (c) Entire Agreement. This Agreement is the product of both of the parties ---------------- hereto, and constitutes the entire agreement between such parties pertaining to the subject matter hereof, and merges all prior negotiations and drafts of the parties with regard to the transactions contemplated herein. Any and all other written or oral agreements existing between the parties hereto regarding such transactions are expressly canceled. + + (d) Independent Contractor. Neither party shall, for any purpose, be deemed ---------------------- to be an agent of the other party and the relationship between the parties shall only be that of independent contractors. Neither party shall have any right or authority to assume or create any obligations or to make any representations or warranties on behalf of any other party, whether express or implied, or to bind the other party in any respect whatsoever. + + -19- + +Source: STAMPS.COM INC, 10-Q, 11/14/2000 + + + + + + (e) Force Majeure. In the event that either party is prevented from ------------- performing or is unable to perform any of its obligations under this Agreement (other than a payment obligation) due to any Act of God, fire, casualty, flood, earthquake, war, strike, lockout, epidemic, destruction of production facilities, riot, insurrection, material unavailability, or any other cause beyond the reasonable control of the party invoking this section, and if such party shall have used its best efforts to mitigate its effects, such party shall give prompt written notice to the other party, its performance shall be excused, and the time for the performance shall be extended for the period of delay or inability to perform due to such occurrences. If a force majeure event causes the Company to allocate limited resources among all of its customers, [***]*. --- The Company shall resume operation of the Service as soon as reasonably practicable upon conclusion of any force majeure event. Notwithstanding the foregoing, if such party is not able to perform within sixty (60) days after the event giving rise to the excuse of force majeure, the other party may terminate the Agreement. + + (f) Governing Law. This Agreement and all acts and transactions pursuant ------------- hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of California, without giving effect to principles of conflicts of law. + + (g) Severability. If one or more provisions of this Agreement are held to ------------ be unenforceable under applicable law, the parties agree to renegotiate such provision in good faith, in order to maintain the economic position enjoyed by each party as close as possible to that under the provision rendered unenforceable. In the event that the parties cannot reach a mutually agreeable and enforceable replacement for such provision, then (i) such provision shall be excluded from this Agreement, (ii) the balance of the Agreement shall be interpreted as if such provision were so excluded and (iii) the balance of the Agreement shall be enforceable in accordance with its terms. + + (h) Waiver. The waiver of any particular breach or default or any delay in ------ exercising any rights shall not constitute a waiver of any subsequent breach or default. + + (i) Notices. Any notice required or permitted by this Agreement shall be in ------- writing and shall be deemed sufficient upon receipt, when delivered personally or by courier, overnight delivery service or confirmed facsimile, or forty-eight (48) hours after being deposited in the regular mail as certified or registered mail (airmail if sent internationally) with postage prepaid, if such notice is addressed to the party to be notified at such party's address or facsimile number as set forth below, or as subsequently modified by written notice. + +---------- * Confidential treatment has been requested for the bracketed portion. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission. + + -20- + + If to the Company: iShip.com, Inc. 2515 - 140th Ave. NE Suite E-110 Attn: President Bellevue, WA 98005 Facsimile Number: 425/602-5025 + + With a Copy To: Craig E. Sherman Venture Law Group 4750 Carillon Point Kirkland, WA 98033 Facsimile Number: 425/739-8750 + + If to MBE: Mail Boxes Etc. USA, Inc. 6060 Cornerstone Court West San Diego, CA 92121 Attn: Thomas K. Herskowitz Facsimile Number: 619/546-7499 + + (j) Headings. The headings of the several sections of this Agreement are -------- intended for convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement. + + (k) Counterparts. This Agreement may be executed in counterparts, each of ------------ which shall be deemed an original and all of which together shall constitute one instrument. + + (l) Advice of Legal Counsel. Each party acknowledges and represents that, + +Source: STAMPS.COM INC, 10-Q, 11/14/2000 + + + + + + ----------------------- in executing this Agreement, it has had the opportunity to seek advice as to its legal rights from legal counsel and that the person signing on its behalf has read and understood all of the terms and provisions of this Agreement. This Agreement shall not be construed against any party by reason of the drafting or preparation thereof. + + (m) Arbitration. ----------- + + (i) Every claim or dispute arising out of or relating to the negotiation, performance or non-performance of this Agreement shall be determined by arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association ("AAA"), or as otherwise agreed by the parties. The place of arbitration shall be San Diego, California. + + (ii) In the event of any such claim or dispute, the parties shall first attempt to resolve the matter through good faith, informal negotiations, including non-binding mediation. In the event that the parties are unable to resolve the dispute, either party hereto may demand arbitration by written notice to the other party and to the AAA in San Diego. The parties shall mutually agree on one arbitrator. If the parties cannot so agree, the single arbitrator shall be selected by the AAA. The costs of arbitration are to be shared equally by the parties. Each party shall be responsible for its own costs and attorneys' fees. + + -21- + + (iii) The arbitrator shall not have any power to alter, modify or change any of the terms of this Agreement or to grant any remedy which is either inconsistent with or prohibited by the terms of this Agreement, or not available in a court of law. The arbitrator shall not have the authority to commit errors of law or errors of legal reasoning. In addition, the arbitrator shall have no power or authority to award punitive, consequential or incidental damages. + + (iv) The arbitrator shall, within thirty (30) days after the matter has finally been submitted to him or her, render a written decision making specific findings of fact and setting forth the reasons for the decision which shall be consistent with the terms of this Agreement. The parties intend that this agreement to arbitrate be valid, binding, enforceable, and irrevocable. The terms of this Section shall survive the termination or expiration of this Agreement. Judgement on any award of the arbitrator shall be binding and may be entered in any court having jurisdiction thereof. + + [Signature page follows] + + -22- + + The parties have executed this Agreement as of the date first set forth above. + + COMPANY: LICENSEE: + +ISHIP.COM, INC. MAILBOXES ETC. USA, INC. + +/s/ Stephen M. Teglovic /s/ Charles Lynn Lowder --------------------------------------- ---------------------------------------- (Signature) (Signature) + +Stephen M. Teglovic Charles Lynn Lowder --------------------------------------- ---------------------------------------- (Print Name) (Print Name) + +CEO/Pres Executive Vice President/General Counsel --------------------------------------- ---------------------------------------- (Title) (Title) + + SIGNATURE PAGE TO MANIFEST SYSTEM LICENSE AND CO-BRANDING AGREEMENT + + EXHIBIT A + + FORM OF WARRANT + + EXHIBIT B + +Source: STAMPS.COM INC, 10-Q, 11/14/2000 + + + + + +AUTHORIZED EQUIPMENT: --------------------- + + A PC reasonably adequate to access and use the Service for manifesting and shipping packages, with the following minimum specifications: + + . a reasonably adequate scale and a label printer . An internet/network connection of at least 256k bits/sec . Processor: P5-233 . Ports: 2 Com ports, 1 Parallel port . RM: 64 Megs . HDD: 1.2 GB . Video. 4 MB . OS: Win 98/OSR2 . Browser: IE 5 SP1 + + EXHIBIT C POTENTIAL CUSTOMERS + +======================================================================================================================= TYPE DEFINITION ---------------------------------------------------------------------------------------------------------------------- I A customer physically present in the retail store-front or remote off-site locations of MBE Centers for a In-Center Customer transaction in which they do not utilize an LMS or MBEX (as such terms are defined below). ---------------------------------------------------------------------------------------------------------------------- A customer utilizing a self-service lobby manifest II system in a MBE Center ("LMS") or a self-service --- Remote Self-Service Customer MBE-branded remote manifest system ("MBEX") for a ---- transaction. ---------------------------------------------------------------------------------------------------------------------- A customer shipping a PLD-compliant and ramp-ready III A package* through a MBE Center that is manifested MBE Internet Customer through the MBE Sites. ---------------------------------------------------------------------------------------------------------------------- A customer shipping a PLD-compliant and ramp-ready III B package through a MBE Center, which package is Company Internet Customer manifested through the Company site. ---------------------------------------------------------------------------------------------------------------------- A customer shipping a PLD-compliant and ramp-ready package through a MBE Center, which package is III C (1) manifested through the Internet web site of a third Third Party/MBE Customer party that is con-branded or otherwise affiliated with MBE. ---------------------------------------------------------------------------------------------------------------------- A customer shipping a PLD-compliant and ramp-ready package through a MBE Center, which package is III C (2) manifested through the Internet web site of a third Third Party/Company Customer party that is co-branded or otherwise affiliated with the Company or the Service. ---------------------------------------------------------------------------------------------------------------------- A customer shipping a PLD-compliant and ramp-ready package through a MBE Center, which package is III C (3) manifested through an Internet web site operated by eBay Customer eBay Incorporated or in connection with an auction or sale conducted on such web site. ---------------------------------------------------------------------------------------------------------------------- IV A customer that utilizes the Service and/or the Company Customer Company's products and services other than in connection with a MBE Center. ---------------------------------------------------------------------------------------------------------------------- + +---------- * "PLD-compliant and ramp-ready" shall mean compliance with the electronic data requirements of each carrier supported by the Service. + + EXHIBIT D + + SYSTEM SPECIFICATIONS + + The Service will enable MBE and MBE Centers to process packages for domestic shipment, weigh these packages, and create shipping labels. The Service will export data to a given MBE Center's Point-of-Sale (POS) station, and will support ARS/BIN packages, consignee billing, freight insurance, MBE proprietary or designated transit declared value, and customer address book access. All carrier rating information will be maintained by the Company from its central database management system (DBMS). MBE Centers will be allowed to create or + +Source: STAMPS.COM INC, 10-Q, 11/14/2000 + + + + + +modify their own mark-ups for shipping, and, at its expense, the Company will update and/or adjust its pricing information for each MBE Center for each carrier to reflect such modifications. This Exhibit D may be modified from time to time by mutual agreement of the parties. + + The maximum amount of information downloaded from the Company's server to the counter manifest station will be 15 kilobytes or less per package processed. + + The following carriers and services will be supported: + +UPS --- + +Domestic: -------- Ground Three Day Select Second Day Air Second Day Air AM, Next Day Air Saver Next Day Air Next Day Air Early AM + +International: ------------- Canada Standard Worldwide Expedited (including Canada/Mexico as set forth in the Specifications) Worldwide Express (including Canada/Mexico as set forth in the Specifications) + +FedEx ----- + +Domestic: -------- Express Saver 2 Day Standard Overnight Priority Overnight First Overnight + +International: ------------- International Economy International Priority + +USPS ---- + +Domestic: -------- Parcel Post Priority Mail Express Mail First Class + +International: ------------- Parcel Post Air Parcel Post Surface Small Parcel Air Small Parcel Surface Express Mail Global Priority Mail + +-------------------------------------------------------------------------------- + + The Service will include the following features, the more detailed functionality of which will be agreed to from time to time by the parties as the Service is developed: + +1. Table of Contents 2. Table of Illustrations 3. Introduction 3.1. Purpose 3.2. Scope 3.3. Introduction 4. Implementation 4.1 Organization 4.1.1. Opening the Counter Manifest System 4.1.2. Main Screen Organization 4.1.3. Menu Structure 4.2. General Functionality 4.2.1. Keyboard & Mouse Behavior 4.2.2. Sortable List Boxes + +Source: STAMPS.COM INC, 10-Q, 11/14/2000 + + + + + +4.2.3. Find Package/Transaction Dialogs 4.2.4. Find Manifest Dialogs 4.2.5. Find Dialog Search Behavior 4.3. Process Menu 4.3.1. Process Package 4.3.2. Find Package 4.3.3. Find Customer 4.3.4. Customer Address Dialog 4.3.5. Recipient Address Dialog + +4.3.6. Address Book Dialog 4.3.7. City/State/Postal Verification Dialog 4.3.8. Region Locator Dialog 4.3.9. Transaction Complete Dialog 4.3.10. Point of Sale (POS) Export Records 4.3.11. Enter ARS/BIN Package 4.3.12. Process Consignee Billed 4.3.13. Freight Insurance 4.3.14. Reprint Last label 4.3.15. Reprint label 4.3.16. Edit Transaction 4.3.17. Void Transaction 4.3.18. Recall Voided Transaction 4.4. Estimate 4.4.1. Price a Package 4.4.2. Create Estimate 4.4.3. Edit Estimate 4.4.4. Delete Estimate 4.5. Manifest 4.5.1. Perform End of Day 4.5.2. Track a Package 4.5.3. View Manifests 4.5.4. View Transaction 4.5.5. Reprint Manifest 4.6. Reports 4.6.1. Manifest Reports 4.6.2. Rate Reports 4.6.3. Management Reports 4.7. Administration 4.7.1. Preferences 4.7.2. Center Information 4.7.3. Taxable Items 4.7.4. Scales and Printers 4.7.5. Modify Rates Dialog 4.7.6. Modify Rates for Zone Based Services 4.7.7. Modify Rates for Weight Based/Single Zone Services 4.7.8. Modify FedEx Service Option Rates Dialog 4.7.9. Modify UPS Service Option Rates Dialog 4.7.10. Modify USPS Service Option Rates Dialog 4.7.11. Copy Rates 4.7.12. Alternate Insurance Rates 4.8. About 4.8.1. Rate Effective Dates 4.8.2. Version 5. Services and Services Options 5.1. Services + +5.1.1. UPS 5.1.2. FedEx 5.1.3. USPS 5.2 Service Options 5.2.1. Declared Value 5.2.2. Delivery Notification 5.2.3. Proof of Delivery 5.2.4. COD 5.2.5. Call Tag 5.2.6. Earliest Delivery Time 5.2.7. Deliver Without Signature 5.2.8. Certified Mail + +Source: STAMPS.COM INC, 10-Q, 11/14/2000 \ No newline at end of file diff --git a/full_contract_txt/SteelVaultCorp_20081224_10-K_EX-10.16_3074935_EX-10.16_Affiliate Agreement.txt b/full_contract_txt/SteelVaultCorp_20081224_10-K_EX-10.16_3074935_EX-10.16_Affiliate Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..3709ed81d81ea27cd0b83654634c415197b14356 --- /dev/null +++ b/full_contract_txt/SteelVaultCorp_20081224_10-K_EX-10.16_3074935_EX-10.16_Affiliate Agreement.txt @@ -0,0 +1,67 @@ +Exhibit 10.16 + + + +MARKETING AFFILIATE AGREEMENT + +This Agreement is made this 1s t day of October 2008, (the "Effective Date"), by and between Equidata, Inc., a corporation organized under the laws of Virginia with its principal place of business at 724 Thimble Shoals Boulevard Newport News, Virginia 23606 ("Equidata"), and National Credit Report.com, LLC a Corporation organized under the laws of Florida, with its principal place of business at 7700 N. Congress Ave, Suite 3113, Boca Raton FL33487 ("Marketing Affiliate"). + +RECITALS + +Therefore, if accepted all parties agree that the following shall constitute a marketing agreement between the parties. + +TERMS AND CONDITIONS + +Permission. Subject to the terms and conditions of this Agreement, Marketing Affiliate may display Marketing Materials at its principal place(s) of business, or at the principal place(s) of its third party partners, together with a link from the Marketing Affiliate Web Site to Fquidata (and its partners) Web Site. Marketing Materials may also be used in the marketing of potential customers through direct mail and personal solicitation as well as inbound and outbound telemarketing. Marketing Affiliate may not otherwise offer for sale, market, sell or distribute the Services of Equidata without express written permission. + +1. Equidata provides certain personal credit, fraud detection, credit scoring services and credit monitoring for consumers, the ("Services"). 2. Marketing Affiliate and Equidata wish to enter into an agreement under which Marketing Affiliate may market the Services. 3. Marketing Affiliate wishes to market the Services indirectly through third party programs, direct mail, Internet and both inbound and outbound telemarketing. In addition, each may own and operate a web site utilizing direct access to the Services through Internet links. + + 1. Compensation. Marketing Affiliate shall be responsible for collecting all amounts due directly from the Consumer and shall bear sole responsibility for non-payment of any fees charged to the Consumer. Marketing Affiliate shall pay to Equidata, as compensation for its providing of Services under this agreement, such amounts as outlined and detailed in Exhibit A attached hereto. Such amounts shall be billed on a bi-monthly basis by Equidata and are due and payable in full by Marketing Affiliate 30 days from the invoice date. The prices set forth in Exhibit A do not include regulatory fees, sales tax, excise tax or any other fees or taxes that may be charged by states or local taxing authorities nor does it include additional fees or surcharges, including specific area Affiliate charges that may be accessed by the Credit Reporting Agencies (CRA's). Said amounts charged to Equidata will be billed separately to Marketing Affiliate and are due immediately upon receipt. Marketing Affiliate agrees to reimburse Equidata all costs of collecting any past due amounts from Marketing Affiliate by reason of non payment, including reasonable attorney fees and disbursements. Equidata reserves the right to increase the base cost of Services. Notice will be given to Marketing Affiliate in writing no less than 30 days prior to such increase taking affect. A development fee, yet To Be Determined and outlined in Exhibit A, is due upon a signed agreement of project scope. Marketing Affiliate agrees to pay promptly and in full all charges incurred through services rendered when billed. When paying by credit card, the Marketing Affiliate agrees to pay for all items that are revoked or disputed by the credit card company or the card holder along with any charges or fees charged by the credit card company including fees associated with processing the credit card transaction and that the Marketing Affiliate will be billed for those items in accordance with Equidata standard practices. Marketing Affiliate and the undersigned principal, partner or owner further agree that this Agreement will serve as a personal guaranty by the undersigned principal, partner or owner of the company, and the undersigned principal, partner or owner will become responsible for any unpaid balance past due on any invoice. The Marketing Affiliate agrees to pay a late charge of 1 l/2% per month on the unpaid, past-due amount as well as a returned check fee of not less than $35.00 per returned item. In addition, the Marketing Affiliate agrees to pay 25% attorney's fees plus court cost in the event that the Marketing Affiliate's account is referred to an attorney for collection. 2. Disputes. In the case of disputed charge, defined as a non-payment of an invoice for which notice of dispute has been given in writing by Marketing Affiliate to Equidata, Equidata or Marketing Affiliate may choose arbitration and Marketing Affiliate and Equidata shall be obligated by the terms agreed upon by arbitration and all monies determined owed shall be considered due and payable immediately. Such arbitration does not relieve Marketing Affiliate from its obligation to promptly pay for undisputed charges in accordance with the terms of this Agreement. Such disputes shall be settled by arbitration in the City of Newport News, Virginia. Marketing Affiliate shall give Equidata written demand of dispute within 10 days of the due date of the invoice. The demand shall set forth a statement for the nature of the dispute and the amount involved. If Equidata and Marketing Affiliate can not resolve the dispute on their own within 10 days after Equidata receive said dispute, the parties shall jointly select an arbitrator. Initials: /s/ IP + +Source: STEEL VAULT CORP, 10-K, 12/24/2008 + + + + + + + + If the parties do not agree on the selection of an arbitrator, each party will select an arbitrator of their choosing, and the two arbitrators will jointly select a third arbitrator(s). Not later than 5 calendar days after the arbitrator(s) have been selected, the arbitrator(s) shall schedule the arbitration hearing to commence on a mutually convenient date. The hearing shall commence no later than 25 calendar days after Equidata receives receipt of dispute from Marketing Affiliate and shall continue from day to day until completed. The arbitrator(s) shall issue an award in writing no later than 10 calendar days after the conclusion of the hearing. The arbitration award shall be final and binding on both parties. 3. Operational Specifications. Marketing Affiliate and Equidata shall agree upon Operational Specifications pertaining to the methodology and logistics of data transfer and database coordination. Upon mutual agreement as to the Operational Specifications, they shall be deemed to be a part of this Agreement by way of an Exhibit. Both parties must agree upon any changes to the Operational Specifications in writing. Any such changes will be deemed to be a part of the Operational Specifications. 4. Non-solicitation of Clients. Marketing Affiliate shall not directly or indirectly solicit an existing business customer of Equidata during the term and condition of this Agreement other than for joint marketing purposes. Further, Marketing Affiliate shall not market similar products from competing companies on any Web Site Landing Page containing the Equidata or Marketing Affiliate Web link as long as this Agreement is in effect. 5. Compliance. Marketing Affiliate nor Equidata, shall engage in any practice or activity that is not in compliance with the Fair Credit Reporting Act (FCRA), the Fair Debt Collection Practices Act (FDCPA) and the Health Insurance Portability and Accountability Act (HIPAA) as well as, but not limited to, any practice or activity that: + + 5.1. Violates any applicable law or regulation; including but not limited to the sale of illegal goods or the violation of export control or obscenity laws; that invade the privacy of any third party; that are in any way connected with the transmission of "junk mail", "spam" or the unsolicited mass distribution of e-mail, or with any unethical marketing practices. 5.2. Is misleading, deceptive, confusing or abusive as outlined in the Telemarketing Fraud Prevention Act; 5.3. Makes any representation or statement, or grants any warranty or creates any other obligation with respect to the Services, that is in addition to or otherwise inconsistent with any representation, statement or warranty stated expressly by Equidata. 5.4. Uses Marketing Materials, media or methods that are not approved, including, but nor limited to telemarketing scripts. Such approval shall not be unreasonably withheld and shall be completed within 48 hours of receipt of Marketing Materials for review. 5.5. Does not meet the standards for good industry practices for the direct marketing industry. 5.6. Further guidelines and requirements are provided in Exhibit B and C. + +6. Audit. Equidata may audit, at Equidata's expense, the Marketing Affiliate's marketing, practices and activities for the purpose of assuring compliance with this Agreement. Equidata reserves the right to site inspect Marketing Affiliate's physical location of business at any time. 7. Term and Termination. This Agreement commences on the Effective Date, and terminates, along with all licenses and authorizations granted under it, upon the earliest of termination in accordance with the following. + + 7.1. This Agreement shall be for the term of one year; thereafter, the Agreement shall renew automatically under these same terms and agreements unless superceded by future agreements. 7.2. This Agreement may be terminated by either party with cause upon thirty (30) days written notice. Upon Marketing Affiliate's default in payment or other breach of this Agreement, Equidata may terminate this Agreement without notice to Marketing Affiliate. Upon termination for any reason, Equidata reserves the right to deactivate Marketing Affiliate's access to the services including the Equidata Web Site. Termination does not release Marketing Affiliate from paying all amounts owed to Equidata. 7.3. At time of Agreement termination, Marketing Affiliate shall immediately remove all URL related data pertaining to said Agreement; and if data is not voluntarily removed, Equidata reserves the right to use all available legal resources to force the removal of Equidata URL related data and Marketing Affiliate agrees to be liable for the cost of such action, including but not limited to reasonable attorney fees. 7.4. Equidata reserves the right to terminate this Agreement immediately for cause if Experian, Equifax and/or TransUnion (Credit Reporting Agencies — CRAs) decline to render Services to Marketing Affiliate for any reason or if Equidata is notified by any of the CRAs to cease rendering Services to Marketing Affiliate. + +8. Representations and Warranties. Marketing Affiliate represents and warrants that: + + 8.1 Marketing Affiliate does not engage in any business with respect to, and the Marketing Affiliate Web Site will not be used, or display any materials, in any form or medium, in connection with a credit clinic, credit repair or restoration, credit counseling firm, financial counseling firm, detective agency, private investigation, security services, practice of law, news reporting or journalism, or fraudulent or unethical conduct. 8.2. The information regarding Marketing Affiliate set forth in this Agreement, and the information provided to Equidata with respect to Marketing Affiliate and the Marketing Affiliate Web Site, is accurate; and 8.3. Marketing Affiliate's business, including without limitation any business conducted in connection with the Marketing + +Source: STEEL VAULT CORP, 10-K, 12/24/2008 + + + + + +Affiliate Web Site, does not violate any applicable law, regulation, court order or material agreement to which Marketing Affiliate is subject. 8.4. Equidata warrants that it is an authorized provider of the Services as outlined in this Agreement and that it has the ability to provide said Services in the manner described herein. Page 2 of 3 Initials: /s/ IP + +Source: STEEL VAULT CORP, 10-K, 12/24/2008 + + + + + + + +Accepted and Agreed: Executive two (2) copies and return executed copies to: + +9. Indemnification. Equidata and Marketing Affiliate each hereby agree to defend, indemnify and hold harmless each other and each of its employees, agents, officers, directors and shareholders from and against any claims, suits, demand or actions arising from breach of any warranties under this Agreement or failure to provide Services under this Agreement. 10. Proprietary Information. Marketing Affiliate and Equidata mutually acknowledge that from time to time Confidential Information may be received by each. Confidential Information, includes, but is not limited to, Customer names and lists. The Receiving Party may not disclose or use the Disclosing Party's Confidential and Proprietary Information for any reason other than in the performance of this Agreement. It is agreed any information received or collected by Marketing Affiliate about its Customers or potential Customers, including information used to enroll Customers is Proprietary as defined by this section and will not be used by Equidata in any manner other than as outlined herein. 11. Liability. MARKETING AFFILIATE ACKNOWLEDGES AND AGREES THAT ANY PRODUCT, SERVICE, LICENSE OR PERMISSION PROVIDED BY EQUIDATA UNDER THIS AGREEMENT IS PROVIDED ON AN "AS IS" BASIS. EQUIDATA EXPRESSLY DISCLAIMS ANY WARRANTY OF ANY KIND WHATSOEVER, WHETHER EXPRESS, IMPLIED, STATUTORY, OR ARISING FROM COURSE OF DEALING OR PERFORMANCE, AND HEREBY DISCLAIMS AND EXCLUDES FROM THIS AGREEMENT ALL IMPLIED WARRANTIES, INCLUDING WITHOUT LIMITATION WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NONINFRINGEMENT, NONINTERFERENCE WITH DATA, ACCURACY, OR THAT THE SERVICE IS ERROR FREE. IN NO EVENT WILL EQUIDATA BE LIABLE FOR ANY INDIRECT, EXEMPLARY, PUNITIVE, SPECIAL, OR CONSEQUENTIAL DAMAGES INCLUDING WITHOUT LIMITATION LOST PROFITS OR OTHER ECONOMIC LOSS, LOST REIMBURSEMENTS, AND LOST DATA, OR FOR ANY CLAIM BY ANY THIRD PARTY. EVEN IF EQUIDATA, MARKETING AFFILIATE OR BOTH HAD BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES OR CLAIM, MARKETING AFFILIATE AGREES TO DEFEND, INDEMNIFY AND HOLD HARMLESS EQUIDATA, AND EACH OF ITS EMPLOYEES, AGENTS, OFFICERS AND DIRECTORS, FROM AND AGAINST ANY CLAIM, SUIT, DEMAND, OR ACTION, INCLUDING WITHOUT LIMITATION ATTORNEY FEES, ARISING FROM (A) BREACH OF THIS AGREEMENT BY MARKETING AFFILIATE, (B) THE MARKETING AFFILIATE WEB SITE, OR (C) MARKETING AFFILIATE'S BUSINESS. 12. Miscellaneous. This Agreement binds and inures to the benefit of each party's permitted successors, assigns and legal representatives, including the purchasers of the stock or assets of either party hereto. No delegation by either party of any duty hereunder shall be deemed an assignment of this Agreement, nor shall any change in control or an assignment of by operation of law by either party be deemed an assignment hereunder. Any failure or delay in exercising, or any single or partial exercise of, any right or remedy by either party may not be deemed a waiver of any further, prior, or future right or remedy hereunder. This Agreement is governed by and construed in accordance with the laws of the State of Virginia. All notices required to be given in writing must be sent by overnight delivery service to the name and address designated in this Agreement or to such other address that the receiving party may in advance designate by written notice. Notice is deemed effective on the day after delivery by the overnight carrier. If any provision of this Agreement is declared invalid, the other provisions remain in full force and effect and this Agreement is deemed to be amended to replace, to the extent legally possible, the rights and obligations contained in the invalid provision. The invalidity of any provision is not a failure of consideration. The Parties shall operate as Independent Contractors in performing their obligations under the Agreement and shall have exclusive control of the manner and means of performing such obligations. Each party shall be solely responsible for supervision, daily direction and control of its employees and payment of their salaries, worker's compensation, disability and other benefits. Nothing in the Agreement shall be construed as making either party the agent of the other party, as granting to the other party the right to enter into any contract on behalf of the other party, or as establishing an association, franchise, joint venture or partnership between the Parties. Under no circumstances shall the employees of one party be deemed to be employees of the other for any purpose. This Agreement constitutes the entire understanding of the parties with respect to the subject matter hereof, and supersedes all prior or contemporaneous agreements, statements and representations, oral or written, between the parties relating to the subject matter of the Agreement. No representation or promise, or modification or amendment to this Agreement is binding on either party unless in writing signed by authorized representatives of both parties. + + Company Name: Equidata, Inc. Marketing Affiliate Name: National Credit Report LLC Address: 724 Thimble Shoals Blvd. Newport News, VA 23606 Address: 7700 N Congress AVE, Suite 3113 Boca Raton, FL 33487 Phone Numbers: 757-873-0519 / 800-288-9809 Fax: 757-873-1224 Phone Numbers: 561-910 8900 + + Email Address: Kchase@equidata.com Email Address: ivan.posniak@nationalcreditreport.com Print Name: Kitty Chase Print Name: Ivan Posniak Title: SVP Title: CEO Signature: /s/ Kitty Chase Signature: /s/ Ivan Posniak + + Page 3 of 3 Initials: /s/ IP + +Source: STEEL VAULT CORP, 10-K, 12/24/2008 \ No newline at end of file diff --git a/full_contract_txt/TALCOTTRESOLUTIONLIFEINSURANCECO-SEPARATEACCOUNTTWELVE_04_30_2020-EX-99.8(L)-SERVICE AGREEMENT.txt b/full_contract_txt/TALCOTTRESOLUTIONLIFEINSURANCECO-SEPARATEACCOUNTTWELVE_04_30_2020-EX-99.8(L)-SERVICE AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..19e87de7f359e243993626c8b0855a39e7f9bfb1 --- /dev/null +++ b/full_contract_txt/TALCOTTRESOLUTIONLIFEINSURANCECO-SEPARATEACCOUNTTWELVE_04_30_2020-EX-99.8(L)-SERVICE AGREEMENT.txt @@ -0,0 +1,63 @@ +SERVICE AGREEMENT This Agreement is entered into as of 9/28/2004 by and among The Victory Portfolios (the "Trust"), a Delaware statutory trust, on behalf of those series identified on Schedule A to this Agreement individually and not jointly (such series being individual referred to herein as the "Fund" and collectively as the "Funds"), and Hartford Life Insurance Co., Inc. ("Administrator"), a Connecticut corporation. RECITALS 1. The Trust is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (hereinafter the "1940 Act") and its shares are registered under the Securities Act of 1933, as amended (hereinafter the "1933 Act"); and 2. The Administrator issues certain group variable annuity contracts and group funding agreements (the "Contracts") in connection with retirement plans intended to meet the qualification requirements of Sections 401, 403(b) or 457 of the Internal Revenue Code of 1986, as amended (the "Code"); and 3. Each Separate Account is a duly organized, validly existing segregated asset account, established by resolution of the Board of Directors of the Administrator under the insurance laws of the State of Connecticut to set aside and invest assets attributable to the Contracts; and 4. To the extent permitted by applicable insurance laws and regulations, the Administrator intends to purchase shares of the Funds set forth in Schedule A on behalf of each corresponding Separate Account set forth on such Schedule A to fund the Contracts and the Trust is authorized to sell such shares to unit investment trusts such as the Separate Accounts at net asset value; and 5. Administrator provides administrative services comprised of, but not limited to, recordkeeping, reporting and processing services (the "Administrative Services") to certain retirement plans (the "Plans"). Administrative Services for each Plan include processing and transfer arrangements for the investment and reinvestment of Plan assets in investment media specified by an investment adviser, sponsor or administrative committee of the Plan (a "Plan Representative") generally upon the direction of Plan beneficiaries (the "Participants"). The Administrative Services are provided by Administrator under service agreements with various Plans; and 6. The Trust and Administrator desire to facilitate the purchase and redemption of shares of the Funds listed on Schedule A (the "Shares") on behalf of the Plans and their Participants through one or more accounts (not to exceed one per Plan) in each Fund (individually an "Account" and collectively the "Accounts"), subject to the terms and conditions of this Agreement and the applicable Fund prospectus. + + + + + +Accordingly, the parties hereto agree as follows: 1. Fund Availability. Subject to Section 13 below, the Trust agrees to make shares of the Funds available during the term of this Agreement for purchase at the applicable net asset value per share by the Administrator on each Business Day (as defined below) in accordance with the terms, conditions and limitations set forth in the currently effective prospectus for the Funds. 2. Performance of Services. In consideration of the fees or compensation Administrator will receive from the Trust or other parties under other agreements or arrangements, in connection with the services Administrator performs under this agreement, the sufficiency of which Administrator acknowledges to be sufficient, Administrator agrees to perform the administrative services and functions specified in Schedule B attached hereto (the "Services") with respect to Shares owned by Plans and included in the Accounts. 3. Pricing Information. The Trust or its designee will furnish Administrator, subject to availability, on each business day that the New York Stock Exchange is open for business ("Business Day"), with (i) net asset value information for each Fund as of the close of regular trading (currently 4:00 p.m. Eastern Time) on the New York Stock Exchange or at such other times at which a Fund's net asset value is calculated as specified in such Fund's prospectus (the "Close of Trading"), and (ii) dividend and capital gains information for each Fund as it becomes available. The Trust or its designee shall provide such information, as soon as reasonably practicable after the close of trading each Business Day, but in no even later than 6:30 p.m. Eastern Time on the same Business Day. 4. Purchases and Redemptions. The Trust agrees to sell to the Administrator those shares of the Funds which the Administrator orders on behalf of any Separate Account, executing such orders on a daily basis at the net asset value next computed after receipt and acceptance by the Fund or its designee of such order. Receipt by such designee shall constitute receipt by the Fund; provided that the Fund receives notice of such order via the National Securities Clearing Corporation (the "NSCC") by 10:00 a.m. Eastern Time on the next following Business Day. The Fund will receive all orders to purchase Fund shares using the NSCC's Defined Contribution Clearance & Settlement ("DCC&S") platform. The Fund will also provide the Administrator with account positions and activity data using the NSCC's Networking platform. The Administrator shall pay for Fund shares by the scheduled close of federal funds transmissions on the same Business Day it places an order to purchase Fund shares in accordance with this section using the NSCC's Fund/SERV System. Payment shall be in federal funds transmitted by wire from the Fund's designated Settling Bank to the NSCC. "Business Day" shall any day on which the New York Stock Exchange is open for trading and on which the Fund calculates it net asset value pursuant to the rules of the SEC. "Networking" shall mean the NSCC's product that allows Fund's and Administrator to exchange account level information electronically. "Settling Bank" shall mean the entity appointed by the Fund to perform such settlement services on behalf of the Fund and agrees to abide by the NSCC's Rules and Procedures insofar as they relate to the same day funds settlement. If the Administrator is somehow prohibited from submitting purchase and settlement instructions to the Fund for Fund shares via the NSCC's DCC&S platform the following shall apply to this Section: 2 + + + + + +The Trust agrees to sell the Administrator those shares of the Funds which the Administrator orders on behalf of any Separate Account, executing such orders on a daily basis at the net asset value next computed after receipt and acceptance by the Fund or its agent of such order. For purposes of this Section, the Administrator shall be the agent of the Fund for the receipt of such orders from the Separate Account and receipt by such agent shall constitute receipt by the Fund; provided that the Fund receives notice of such order by 10:00 a.m. Eastern Time on the next following Business Day. The Administrator shall pay for Fund shares by the scheduled close of federal funds transmissions on the same Business Day it places an order to purchase Fund shares in accordance with this section. Payment shall be in federal funds transmitted by wire to the Fund's designated custodian. "Business Day" shall mean any day on which the New York Stock Exchange is open for trading and on which the Fund calculates it net asset value pursuant to the rules of the SEC. The Trust agrees to redeem for cash, upon the Administrator's request, any full or fractional shares of the Fund held by the Administrator on behalf of a Separate Account, executing such requests on a daily basis at the net asset value next computed after receipt and acceptance by the Fund or its designee of the request for redemption. For purposes of this Section, the Administrator shall be the agent of the Fund for receipt of requests for redemption from each Separate Account and receipt by such agent shall constitute receipt by the Fund; provided the Fund or the underwriter receives notice of such request for redemption via the NSCC by 10:00 a.m. Eastern Time on the next following Business Day. The Fund will receive all orders to redeem Fund shares using the NSCC's DCC&S platform. The Fund will also provide the Administrator with account positions and activity data using the NSCC's Networking platform. Payment for Fund shares redeemed shall be made in accordance with this section using the NSCC's Fund/SERV System. Payment shall be in federal funds transmitted by the NSCC to the Separate Account's Settling Bank as designated by the Administrator, on the same Business Day the Fund or the underwriter receives notice of the redemption order from the Administrator provided that the Fund or the underwriter receives notice by 10:00 a.m. Eastern Time on such Business Day. If the Administrator is somehow prohibited from submitting redemption and settlement instructions to the Fund for Fund shares via the NSCC's DCC&S platform the following shall apply to this Section: The Trust agrees to redeem for cash, upon the Administrator's request, any full or fractional shares of the Fund held by the Administrator on behalf of a Separate Account, executing such requests on a daily basis at the net asset value next computed after receipt and acceptance by the Fund or its designee of the request for redemption. For purposes of this Section, the Administrator shall be the designee of the Fund for receipt of requests for redemption from each Separate Account and receipt by such designee shall constitute receipt by the Fund; provided the Fund or the underwriter receives notice of such request for redemption by 10:00 a.m. Eastern Time on the next following Business Day. Payment shall be in federal funds transmitted by wire to the Separate Account as designated by the Administrator, on the same Business Day the Fund or the underwriter receives notice of the redemption order from the Administrator provided that the Fund or the underwriter receives notice by 10:00 a.m. Eastern Time on such Business Day. The Administrator will place separate orders to purchase or redeem shares of each Fund. 3 + + + + + +5. Maintenance of Records. The Trust or its designee and Administrator shall maintain and preserve all records as required by law to be maintained and preserved in connection with providing the Services and in making Shares available to the Plans. Upon the request of the Trust or its designee, Administrator shall provide copies of all the historical records relating to transactions between the Funds and the Plans, written communications regarding the Funds to or from such Plans and other materials, in each case (i) as are maintained by Administrator in the ordinary course of its business and in compliance with laws and regulations governing transfer agents, and (ii) as may reasonably be requested to enable the Trust or its representatives, including without limitation its auditors or legal counsel, to (a) monitor and review the Services, (b) comply with any request of a governmental body or self-regulatory organization or a Plan, (c) verify compliance by Administrator with the terms of this Agreement, (d) make required regulatory reports, or (e) perform general customer supervision. Administrator agrees that it will permit the Trust or such representatives to have reasonable access to its personnel and records in order to facilitate the monitoring of the quality of the Services. 6. Compliance with Laws. At all times, Administrator shall comply with all laws, rules and regulations applicable to a transfer agent under the Federal securities laws, including without limitation, requirements for delivery of prospectuses (which term includes prospectus supplements). Whether or not required by applicable law, Administrator shall deliver or arrange for the delivery of prospectuses to Plan Representatives and to Participants in Participant-directed Plans. Without limiting the foregoing: Administrator will be responsible for compliance with Regulation S-P, as adopted by the Securities and Exchange Commission. Administrator will adopt and maintain an anti-money laundering program in compliance with applicable laws and regulations, including provisions for necessary currency transaction reporting, detection of suspicious activities that could give rise to money laundering, and knowing Administrator's customers. In connection with the services contemplated in this Agreement, Administrator will identify sources of potential money laundering and notify the Fund or its agent of any potential areas that would reasonably raise concerns about the existence of money laundering or unlawful activity. 7 Representations With Respect to Funds. Administrator and its agents and representatives shall not make any representations concerning a Fund or the Shares except those contained in the then-current prospectus of such Fund and in current Fund sales literature. 8. Fund Representations. The Trust represents and warrants that (i) Fund shares sold pursuant to this Agreement shall be registered under the 1933 Act and duly authorized for issuance in accordance with applicable law and that the Fund is and shall remain registered under the 1940 Act for as long as the Fund shares are sold; (ii) the Fund shall amend the registration statement for its shares under the 1933 Act and the 1940 Act from time to time as required in order to effect the continuous offering of its shares; and (iii) the Fund shall register and qualify its shares for sales in accordance with the laws of the various states only if and to the extent deemed advisable by the Fund. The Trust represents that each Fund (a) is currently qualified as a Regulated Investment Company under Subchapter M of the Code; (b) will make every effort to maintain such qualification (under Subchapter M or any successor or similar provision); and (c) will notify the Administrator immediately upon having a reasonable basis for believing that such Fund has ceased to so qualify or might not so qualify in the future. 4 + + + + + +9. Fund Prospectuses. The Trust shall provide the Administrator at no charge with as many printed copies of the Fund's current prospectus and statement of additional information as the Administrator may reasonably request. If requested by the Administrator, in lieu of providing printed copies of the Fund's current prospectus and statement of additional information, the Trust shall provide camera-ready film, computer diskettes, e-mail transmissions or PDF files containing the Fund's prospectus and statement of additional information, and such other assistance as is reasonably necessary in order for the Administrator once each year (or more frequently if the prospectus and/or statement of additional information for the Fund are amended during the year) to have the prospectus for the Contracts (if applicable) and the Fund's prospectus printed together in one document or separately. The Administrator may elect to print the Fund's prospectus and/or its statement of additional information in combination with other fund companies' prospectuses and statements of additional information. The Trust shall provide the Administrator at no charge with copies of the Fund's proxy statements, Fund reports to shareholders, and other Fund communications to shareholders in such quantity as the Administrator shall reasonably require for distributing to Contract owners. The Trust shall pay for the cost of typesetting, printing and distributing all Fund prospectuses, statements of additional information, Fund reports to shareholders and other Fund communications to Contract owners and prospective Contract owners. The Trust shall pay for all costs for typesetting, printing and distributing proxy materials. Each Fund's statement of additional information shall be obtainable by Contract owners from the Trust, the Administrator or such other person as the Trust may designate. 10. Relationship of Parties. Except to the extent provided in Section 4 that the Administrator is the agent of the Trust for the limited purpose of receiving orders and transmitting those orders to the Trust, it is understood and agreed that all Services performed hereunder by Administrator shall be as an independent contractor and not as an employee or agent of the Trust or its designee, and none of the parties shall hold itself out as an agent of any other party with the authority to bind such party. 11. Price Errors. (a) Notification. If an adjustment is required in accordance with a Fund's then current policies on reimbursement ("Fund Reimbursement Policies") to correct any error in the computation of the net asset value of Fund shares ("Price Error"), Trust or its designee shall notify the Administrator as soon as practicable after discovering the Price Error. Notice may be made via facsimile or via direct or indirect systems access and shall state the incorrect price, the correct price and, to the extent communicated to the Fund's other shareholders, the reason for the price change. (b) Underpayments, If a Price Error causes an Account to receive less than the amount to which it otherwise would have been entitled, Trust shall make all necessary adjustments (subject to the Fund Reimbursement Policies) so that the Account receives the amount to which it would have been entitled. 5 + + + + + +(c) Overpayments. If a Price Error causes an Account to receive more than the amount to which it otherwise would have been entitled, the Administrator, when requested by Trust or its designee (in accordance with the Fund Reimbursement Policies), shall use its best efforts to collect such excess amounts from the applicable customers. (d) Fund Reimbursement Policies. Trust agrees to treat the Administrator's customers no less favorably than Trust treats other Fund shareholders in applying the provisions of paragraphs 9(b) and 9(c). 12. Termination. This Agreement shall terminate (a) at the option of any party, upon 90 days' advance written notice to the other parties hereto; or (b) in the event of a material breach that has not been cured within ten days following a written notice of breach to the breaching party. The provisions of Sections 5, I l, 13 and 14 shall survive any termination of this agreement. 13. Effect of Termination. Notwithstanding any termination of this Agreement, the Administrator may require the Trust to continue to make available additional shares of the Fund for so long after the termination of this Agreement as the Administrator desires pursuant to the terms and conditions of this Agreement as provided in paragraph (b) below, for all Contracts in effect on the effective date of termination of this Agreement (hereinafter referred to as "Existing Contracts"), unless such further sale of Fund shares is proscribed by law, regulation or an applicable regulatory body. Specifically, without limitation, the owners of the Existing Contracts shall be permitted to direct reallocation of investments in the Fund, redeem investments in the Fund and/or invest in the Fund upon the making of additional purchase payments under the Existing Contracts unless such further sale of Fund shares is proscribed by law, regulation or an applicable regulatory body. Nothing in this Agreement, however, shall restrict or prohibit the Trust from discontinuing the offering of shares of any Fund to new investors or from liquidating any Fund in accordance with state and federal laws and its organizational documents upon approval by the Board of Trustees of the Trust. The Trust shall remain obligated to pay Administrator the fee in effect as of the date of termination for so long as shares are held by the Accounts and Administrator continues to provide services to the Accounts. Such fee shall apply to shares purchased both prior to and subsequent to the date of termination. This Agreement, or any provision thereof, shall survive the termination to the extent necessary for each party to perform its obligations with respect to shares for which a fee continues to be due subsequent to such termination. 14. Indemnification. Administrator agrees to indemnify and hold harmless the Trust, the Trust's administrators, investment adviser, and transfer agent, and each of their directors, trustees, officers, employees, agents and each person, if any, who controls them within the meaning of the Securities Act of 1933, as amended (the "Securities Act"), against any losses, claims, damages, liabilities or expenses to which an indemnitee may become subject insofar as those losses, claims, damages, liabilities or expenses (or actions in respect thereof) arise out of or are based upon (i) any orders that are not timely transmitted by Administrator in accordance with Section 4 of this Agreement or any trades that are cancelled 6 + + + + + +by the Trust or its designee based upon payments for purchases of Shares that are not timely wired; (ii) Administrator's negligence or willful misconduct in performing the Services; (iii) any breach by Administrator of any material representation, warranty or covenant made in this Agreement; or (iv) any requests that are submitted by duly authorized representatives of Administrator on behalf of Participants or Plan Representatives for transaction adjustments (including, but not limited to, the pricing of net purchases or net redemptions of Shares on an "as of" basis). Administrator will reimburse the indemnities for any legal or other expenses reasonably incurred, as incurred, by them in connection with investigating or defending such losses, claims or actions. Trust agrees to indemnify and hold harmless the Administrator and its affiliates and their respective directors, officers, employees and agents (hereinafter "Administrator Indemnified Parties"), against any and all losses, claims, damages and liabilities to which Administrator may become subject (i) as a result of any untrue statement of a material fact contained in a Fund's prospectus or statement of additional information, as amended or supplemented from time to time, or the omission of a material fact required to be stated therein or necessary to make the statements therein not misleading or in any sales related materials provided to Administrator intended for dissemination to its Clients; (ii) failure to keep the registration of the shares and the prospectus by which they are sold current or to otherwise materially comply with the requirements of the 1940 Act and the Securities Act of 1933, as amended, in connection with such sales; or (iii) the Trust's willful misconduct or gross negligence in the performance or failure to perform its obligations under this Agreement, except to the extent the losses are a result of the negligence, willful misconduct or breach of this Agreement by an Administrator Indemnified Party. In any event, neither party shall be liable for any special, consequential or incidental damages. 15. Additional Representations, Warranties and Covenants. Each party represents that (a) it is free to enter into this Agreement and that by doing so it will not breach or otherwise impair any other agreement or understanding with any other person, corporation or other entity and (b) it has full power and authority under applicable law, and has taken all action necessary, to enter into and perform this Agreement. Administrator further represents, warrants and covenants that: (i) the arrangements provided for in this Agreement will be disclosed to the Plans through their representatives; it will not be a "fiduciary" of any Plan with respect to the provision of the Administrative Services, the Services or with respect to a Plan's purchase of Shares, as such term is defined in Section 3(21) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and Section 4975 of the Internal Revenue Code of 1986, as amended (the "Code"); (iii) it is not required to be registered as a broker-dealer or a transfer agent under the 1934 Act or any applicable state securities laws, including as a result of entering into and performing the Services set forth in this Agreement; and (iv) it has adopted and implemented internal controls reasonably designed to prevent instructions received from Participants or Plan Representatives on a 7 + + + + + +given Business Day after the Close of Trading from being aggregated with the order for net purchases or net redemptions of Shares for that Business Day. The Trust further represents, warrants and covenants that the Trust is registered as an investment company under the Investment Company Act of 1940, as amended, and its Shares are registered under the Securities Act. 16. Notice. Each notice required by this Agreement shall be given in writing and delivered personally or mailed by certified mail or courier service to the other party at the following address or such address as each party may give notice to the other: If to the Trust: Address: The Victory Portfolios 3435 Stelzer Road Columbus OH 43219 Attention: President If to Administrator: Hartford Life Insurance Company 200 Hopmeadow Street Simsbury, CT 06089 Attention: James Davey A notice given pursuant to this Section 16 shall be deemed given immediately when delivered personally, three days after the date of certified mailing, or one day after delivery by courier service. 17. Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of Ohio. 18. General Provisions. This Agreement contains the full and complete understanding of the parties and supersedes all prior representations, promises, statements, arrangements, agreements, warranties and understandings between the parties with respect to the subject matter hereof, whether oral or written, express or implied. This Agreement may be modified or amended, and the terms of this Agreement may be waived, only by writing signed by each of the parties. This Agreement shall not be assigned by either party hereto, without the prior written consent of the other party hereto. 19. About Victory. The name "The Victory Portfolios" refers to the Trust created under a Certificate of Trust filed at the office of the State Secretary of Delaware. The obligations of "The Victory Portfolios" entered into in the name or on behalf thereof by any of the Trustees, representatives or agents are made not individually but in such capacities, and are not binding upon any of the Trustees, Shareholders or representatives of the Trust personally, but bind only the Trust Property (as defined in the Trust Instrument), and all persons dealing with any class of Shares of the Trust must look solely to the Trust Property belonging to such class for the enforcement of any claims against the Trust. The Trust has 8 + + + + + +entered into this Agreement with respect to some or all of its Funds individually, and not jointly. The rights and obligations of the Trust described in this Agreement apply to each individual Fund. No Fund shall have any liability for any costs or expenses incurred by any other Fund. In seeking to enforce a claim against any Fund, Administrator shall look to the assets only of that Fund and not to the assets of any other Fund. IN WITNESS WHEREOF, the undersigned have executed this Agreement by their duly authorized officers as of this 28 day of September 2004. The Victory Portfolios on behalf of those Funds listed on Schedule A, individually and not jointly. By: /s/ Kathleen A. Dennis Title: Kathleen A. Dennis President Hartford Life Insurance Company By: /s/ James Davey James Davey Vice President 9 + +th + + + + + +SCHEDULE A The Funds Name of the Fund Share Class(es) Diversified Stock Class A Separate Accounts Each Separate Account established by resolution of the Board of Directors of the Administrator under the insurance laws of the State of Connecticut to set aside and invest assets attributable to the Contracts. Currently, those Separate Accounts are as follows: 401 Market K, Kl, K2, K3, K4 TK, TKI, TK2, TK3, TK4 VK, VKI, VK2, VK3, VK4 UK, UKI, UK2, UK3, UK4 403 and 457 Markets DCI, DCII, DCIII, DCIV, DCV, DCVI, 457, 403, UFC, Eleven + + + + + +SCHEDULE B The Services Administrator shall perform the following services, all in accordance with the terms of this Agreement: 1. Maintain separate records for each Plan, which records shall reflect Shares purchased and redeemed, including the date and price for all transactions, and Share balances. 2. Disburse or credit to the Plans, and maintain records of, all proceeds of redemption of shares and all other distributions not reinvested in Shares. 3. Prepare, and transmit to each Plan periodic account statements showing the total number of Shares owned by each Plan as of the statement closing date, purchases and redemptions of Shares by the Plan during the period covered by the statement, and the dividends and other distributions paid to the Plan during the statement period (whether paid in cash or reinvested in Shares.) 4. Transmit to the Trust or its designee purchase orders and redemption requests placed by Plans. 5. Transmit to the Trust or its designee such periodic reports as the Trust shall reasonably conclude is necessary to enable the Trust to comply with federal or state Blue Sky requirements. 6. Transmit to the Plans confirmations of purchase orders and redemption requests placed by the Plans. 7. Maintain all account balance information for the Plans and daily and monthly purchase summaries expressed in Shares and dollar amounts. 8. Settle purchase order and redemption requests placed by Administrator on behalf of the Plans in accordance with the terms of each Fund's prospectus. 9. Prepare file or transmit all Federal, state and local government reports and returns as required by law with respect to each account maintained on behalf of a Plan. \ No newline at end of file diff --git a/full_contract_txt/TALLGRASSENERGY,LP_02_20_2020-EX-99.26-JOINT FILING AGREEMENT.txt b/full_contract_txt/TALLGRASSENERGY,LP_02_20_2020-EX-99.26-JOINT FILING AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..020f45aa73649514c3001d142abbd84cee1a462e --- /dev/null +++ b/full_contract_txt/TALLGRASSENERGY,LP_02_20_2020-EX-99.26-JOINT FILING AGREEMENT.txt @@ -0,0 +1,81 @@ +Exhibit 26 + +JOINT FILING AGREEMENT + +Pursuant to and in accordance with the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder (the "Exchange Act") the undersigned hereby agree to the joint filing on behalf of each of them of any filing required by such party under Section 13 of the Exchange Act or any rule or regulation thereunder (including any amendment, restatement, supplement, and/or exhibit thereto) with respect to securities of Tallgrass Energy, LP, a Delaware limited partnership, and further agree to the filing, furnishing, and/or incorporation by reference of this Agreement as an exhibit thereto. Each of them is responsible for the timely filing of such filings and any amendments thereto, and for the completeness and accuracy of the information concerning such person contained therein; but none of them is responsible for the completeness or accuracy of the information concerning the other persons making the filing, unless such person knows or has reason to believe that such information is inaccurate. This Agreement shall remain in full force and effect until revoked by any party hereto in a signed writing provided to each other party hereto, and then only with respect to such revoking party. This Agreement may be executed in any number of counterparts all of which taken together shall constitute one and the same instrument. + +IN WITNESS WHEREOF, the undersigned hereby execute this Joint Filing Agreement as of February 19, 2020. PRAIRIE ECI ACQUIROR LP By: BIP Holdings Manager L.L.C., its general partner + +By: /s/ Sean Klimczak Name: Sean Klimczak Title: Senior Managing Director + +PRAIRIE NON-ECI ACQUIROR LP By: BIP Holdings Manager L.L.C., its general partner + +By: /s/ Sean Klimczak Name: Sean Klimczak Title: Senior Managing Director + +PRAIRIE VCOC ACQUIROR LP By: BIP Holdings Manager L.L.C., its general partner + +By: /s/ Sean Klimczak Name: Sean Klimczak Title: Senior Managing Director + +PRAIRIE SECONDARY ACQUIROR LP By: BIP Holdings Manager L.L.C., its general partner + +By: /s/ Sean Klimczak Name: Sean Klimczak Title: Senior Managing Director + + + + + +PRAIRIE SECONDARY ACQUIROR E LP By: BIP Holdings Manager L.L.C., its general partner + +By: /s/ Sean Klimczak Name: Sean Klimczak Title: Senior Managing Director + +BIP HOLDINGS MANAGER L.L.C. + +By: /s/ Sean Klimczak Name: Sean Klimczak Title: Senior Managing Director + +BLACKSTONE INFRASTRUCTURE ASSOCIATES L.P. By: BIA GP L.P., its general partner By: BIA GP L.L.C., its general partner + +By: /s/ Sean Klimczak Name: Sean Klimczak Title: Senior Managing Director + +BIA GP L.P. By: BIA GP L.L.C., its general partner + +By: /s/ Sean Klimczak Name: Sean Klimczak Title: Senior Managing Director + +BIA GP L.L.C. + +By: /s/ Sean Klimczak Name: Sean Klimczak Title: Senior Managing Director + +BLACKSTONE HOLDINGS III L.P. By: Blackstone Holdings III GP L.P., its general partner By: Blackstone Holdings III GP Management L.L.C., its general partner + +By: /s/ John G. Finley Name: John G. Finley Title: Chief Legal Officer + + + + + +BLACKSTONE HOLDINGS III GP L.P. By: Blackstone Holdings III GP Management L.L.C., its general partner + +By: /s/ John G. Finley Name: John G. Finley Title: Chief Legal Officer + +BLACKSTONE HOLDINGS III GP MANAGEMENT L.L.C. + +By: /s/ John G. Finley Name: John G. Finley Title: Chief Legal Officer + +BLACKSTONE HOLDINGS II L.P. By: Blackstone Holdings I/II GP L.L.C., its general partner By: The Blackstone Group Inc., its sole member + +By: /s/ John G. Finley Name: John G. Finley Title: Chief Legal Officer + +BLACKSTONE HOLDINGS I/II GP L.L.C. By: The Blackstone Group Inc., its sole member + +By: /s/ John G. Finley Name: John G. Finley Title: Chief Legal Officer + +THE BLACKSTONE GROUP INC. + +By: /s/ John G. Finley Name: John G. Finley Title: Chief Legal Officer + +BLACKSTONE GROUP MANAGEMENT L.L.C. + +By: /s/ John G. Finley Name: John G. Finley Title: Chief Legal Officer + +STEPHEN A. SCHWARZMAN + +By: /s/ Stephen A. Schwarzman By: Stephen A. Schwarzman \ No newline at end of file diff --git a/full_contract_txt/TEARDROPGOLFCO_10_23_1996-EX-10.12-ENDORSEMENT AGREEMENT.txt b/full_contract_txt/TEARDROPGOLFCO_10_23_1996-EX-10.12-ENDORSEMENT AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..7467512ad5f7f5f6973c612699d4f270144865c4 --- /dev/null +++ b/full_contract_txt/TEARDROPGOLFCO_10_23_1996-EX-10.12-ENDORSEMENT AGREEMENT.txt @@ -0,0 +1,239 @@ +EXHIBIT 10.12 + + ENDORSEMENT AGREEMENT + + This Endorsement Agreement is made and entered into this first (1st) day of January, 1996, by and between Teardrop Putter Corporation having its principal office at 207 WatersEdge, Shelter Cove, Hilton Head Island, South Carolina 29928 (hereinafter referred to as "TPC"), and Consolidated Artists Inc., Sommerville House, Phillips Street, St. Helier, Jersey JE1 1DE, Channel Islands, British Isles (hereinafter referred to as "Consolidated Artists"). + + WITNESSETH: + + WHEREAS, Brett Ogle (hereinafter referred to as "Ogle") is recognized and widely known throughout the world as an expert golfer; and + + WHEREAS, Ogle's name, by virtue of his ability and extensive experience, has acquired a secondary meaning in the mind of the purchasing public important to the advertisement, promotion and sale of golf putters; and + + WHEREAS, TPC is engaged in the manufacture, distribution and sale of golf putters, and is desirous of acquiring the exclusive right to utilize Ogle's name in connection with the advertisement, promotion and sale of the Teardrop Putter; and + + WHEREAS, Consolidated Artists holds all rights to and in Ogle's name and endorsement for purposes of this Agreement; and + + WHEREAS, Consolidated Artists being exclusively entitled to such rights within the Contract Territory (as hereinafter defined) + + - 2 - + +has agreed to authorize such use upon the terms and conditions hereinafter contained; + + NOW, THEREFORE, for and in consideration of the premises and mutual covenants herein set forth and for other good and valuable consideration, it is agreed as follows: + + 1. DEFINITIONS: As used herein, the terms set forth below shall be defined as follows: + + (a) "Ogle Endorsement" shall mean the name, likeness, photograph, and endorsement of Ogle. + + (b) "Endorsed Product" shall mean a putter manufactured, distributed, promoted, advertised and sold by TPC bearing the "Teardrop Putter" name and/or logo. + + (c) "Contract Territory" shall mean the entire world. + + (d) "Contract Period" shall mean that period of time commencing January 1, 1996, and concluding December 31, 1998, unless sooner terminated in accordance with the terms and conditions hereof. + + (e) "Contract Year" shall mean that twelve (12)month period of time commencing each first (1st) day of January throughout the Contract Period. + + (f) "Major Tournament" shall mean any of the following tournaments: the Masters, the U.S. Open, the British Open and the PGA Championship. + + - 3 - + + (g) "PGA Tour Tournament" shall mean PGA Tour tournaments, excluding the Major Tournaments. + + (h) "International Tournament" shall mean European PGA Tour tournaments (excluding the British Open),Japan PGA Tour tournaments and Australian PGA Tour tournaments. + + 2. OGLE TO USE ENDORSED PRODUCT. Consolidated Artists agrees to cause Ogle to use the Endorsed Product during the Contract Period and throughout the Contract Territory whenever he is playing competitive golf or otherwise participating in golf clinics and outings. + + 3. GRANT OF ENDORSEMENT RIGHTS. Subject to the terms and conditions set forth herein, Consolidated Artists grants to TPC the exclusive right and license, within the Contract Territory and during the Contract Period, to use the Ogle Endorsement in connection with the manufacture, distribution, advertisement, promotion and sale of the Endorsed Product. + + + + + + 4. CLOTHING IDENTIFICATION. Consolidated Artists agrees to cause Ogle to wear a patch and/or an embroidered non-patch bearing the Teardrop name and/or logo on the right chest, left sleeve, and back of his golf shirt and/or sweater (near the collar) and/or rain gear whenever he is playing competitive golf, participating in golf clinics and outings or otherwise engaging in golf promotional activities during the Contract Period and throughout the Contract Territory. The expenses for the clothing and placement of the + + - 4 - + +patch and/or embroidered non-patch shall be borne by TPC. TPC agrees to supply Consolidated Artists or its designee with adequate quantities of said patch and embroidered non-patch at no charge to Consolidated Artists. + + 5. RETENTION OF ENDORSEMENT RIGHTS. Subject to the provisions of Paragraphs 2, 3 and 4 above, TPC agrees that Consolidated Artists shall retain all rights in and to the Ogle Endorsement and shall not be prevented from using or permitting or licensing others to use his name or endorsement in connection with the promotion, advertisement, or sale of any product or service other than a golf putter in the Contract Territory during the Contract Period. TPC further agrees that upon the termination of this Endorsement Agreement for any cause whatsoever, it will cease using the Ogle Endorsement, the name "Brett Ogle," or any facsimile thereof, for any promotional or advertising purposes; provided, however, that TPC shall have the right to use the Ogle Endorsement in advertisements for ad space purchased by TPC prior to the termination of this Agreement for a period of up to six (6) months following such termination. In this connection, TPC shall provide Consolidated Artists with a list of such previously purchased ad space within seven (7) days of the effective date of termination and all such advertisements released after the effective date of termination shall be subject to Consolidated Artists' prior approval pursuant to the terms of Paragraph 7 below. + + - 5 - + + 6. PHOTOGRAPH SHOOTS; PERSONAL APPEARANCES. Consolidated Artists agrees, if requested by TPC, to make Ogle available for one (1) day on behalf of TPC in each Contract Year during the Contract Period at times and places mutually convenient to Ogle and TPC for the purpose of taking still photographs for the preparation and production of advertising and promotional materials. TPC agrees that such photograph shoots shall not exceed five (5) hours each in duration. Further, Consolidated Artists agrees, if requested by TPC, to make Ogle available for two (2) personal appearance days on behalf of TPC in each Contract Year during the Contract Period at times and places mutually convenient to Ogle and TPC. Such personal appearances shall be limited to one (1) day and shall not exceed five (5) hours each in duration. In addition, TPC agrees to pay all reasonable and necessary expenses (including first class travel, hotel accommodations and meal expenses) incurred by Consolidated Artists in connection with such photograph shoots and personal appearances. + + 7. PROMOTIONAL AND ADVERTISING MATERIALS. TPC agrees to provide Consolidated Artists and its representative, Advantage International Management, Inc. ("Advantage"), with a copy of all advertising and promotional materials which will use or show the Ogle Endorsement for their approval. Such promotional or advertising materials shall be delivered to Advantage at least fourteen (14) days prior to their release to the general public, and TPC agrees that the same shall not be released without the + + - 6 - + +prior written approval of Advantage. Advantage agrees that it will not unreasonably disapprove or reject promotional or advertising materials hereunder, and that Advantage's failure to disapprove such materials within fourteen (14) days of receipt shall be deemed to be approval. In addition, TPC agrees to provide Consolidated Artists with complimentary duplicates of all promotional and/or advertising materials featuring Ogle or the Ogle Endorsement. + + 8. RETAINER FEE. In consideration of the rights and benefits granted to TPC hereunder, TPC agrees to pay Consolidated Artists on behalf of Ogle a retainer fee in each Contract Year during the Contract Period ("Retainer Fee") in accordance with the following schedule: + +CONTRACT YEAR RETAINER FEE + +First (1st) Contract Year Fifty-Five Thousand U.S. (Jan. 1, 1996-Dec. 31, 1996) Dollars ($55,000) + +Second (2nd) Contract Year Seventy Thousand U.S. (Jan. 1, 1997-Dec. 31, 1997) Dollars (70,000) + +Third (3rd) Contract Year Ninety Thousand U.S. (Jan. 1, 1998-Dec. 31, 1998) Dollars ($90,000) + +Said Retainer Fee shall be paid in four (4) equal installments on or before the first (1st) day of February, May, August and November in each Contract Year. + + 9. TOURNAMENT BONUSES. In addition to the Retainer Fee set forth in Paragraph 8 above, TPC agrees to pay Consolidated Artists on behalf of Ogle the + + + + + +following tournament bonuses for Ogle's + + - 7 - + +tournament performances during the Contract Period (the "Tournament Bonus or Bonuses"): + + (a) Sixty Thousand U.S. Dollars ($60,000), each time Ogle wins a Major Tournament; and + + (b) Twenty Thousand U.S. Dollars ($20,000), each time Ogle wins a network televised US PGA Tour Tournament; and + + (c) Ten Thousand U.S. Dollars ($10,000) each time Ogle wins a cable televised US PGA Tour Tournament; and + + (d) Seven Thousand Five Hundred U.S. Dollars ($7,500) each time Ogle wins a Golf Channel televised US PGA Tour Tournament or a Golf Channel televised International Tournament; and + + (e) Five Thousand U.S. Dollars ($5,000) each time Ogle wins an International Tournament not televised by Golf Channel or a non-televised US PGA Tour Tournament. + +TPC shall pay any Tournament Bonuses due Consolidated Artists for a Major Tournament win within sixty (60) days following TPC's receipt of an invoice from Consolidated Artists or Advantage and any Tournament Bonuses due Consolidated Artists for a network televised US PGA Tour Tournament win shall be paid within forty-five (45) days following TPC's receipt of an invoice from Consolidated Artists or Advantage. All other Tournament Bonuses due to Consolidated Artists shall be paid by TPC within thirty (30) days following TPC's receipt of an invoice from Consolidated Artists or Advantage. + + - 8 - + + 10. MONEY LIST BONUS(ES). In addition to the Retainer Fee and the Tournament Bonuses set forth in Paragraphs 8 and 9 above, TPC agrees to pay Consolidated Artists on behalf of Ogle the following bonuses in each Contract Year for Ogle's position on the Official Year-End PGA Tour Money List ("Money List Bonus(es)"): + + (a) Fifty Thousand U.S. Dollars ($50,000) each time Ogle finishes in first (1st) place on the Official Year-End PGA Tour Money List; and (b) Twenty-Five Thousand U.S. Dollars ($25,000) each time Ogle finishes between second (2nd) and tenth (10th) place on the Official Year-End PGA Tour Money List; and + + (c) Fifteen Thousand U.S. Dollars ($15,000) each time Ogle finishes between eleventh (11th) and twentieth (20th) place on the Official Year-End PGA Tour Money List; and + + (d) Seven Thousand Five Hundred U.S. Dollars ($7,500) each time Ogle finishes between twenty-first (21st) and thirtieth (30th) place on the Official Year-End PGA Tour Money List; and + + (e) Five Thousand U.S. Dollars ($5,000) each time Ogle finishes between thirty-first (31st) and fortieth (40th) place on the Official Year-End PGA Tour Money List. + +TPC shall pay any Money List Bonuses due to Consolidated Artists within thirty (30) days following TPC's receipt of an invoice from Consolidated Artists or Advantage. + + - 9 - + + 11. ROYALTY COMPENSATION FOR ENDORSED PRODUCT. In addition to the Retainer Fee, Tournament Bonuses and Money List Bonuses set forth in Paragraphs 8, 9 and 10 above, TPC agrees to pay Consolidated Artists on behalf of Ogle royalty compensation of ten percent (10%) of the net sales of all Endorsed Products distributed or sold during the Contract Period in or to the Countries of Australia and New Zealand ("Royalty Compensation"). "Net sales" shall mean the gross invoice price billed to customers, less customary trade/quantity discounts, rebates and returns actually credited, but with no deductions of any kind. No costs incurred by TPC in the manufacture, advertisement, promotion or exploitation of any Endorsed Product shall be deducted as a cost in calculating the net sales. TPC agrees to guarantee to Consolidated Artists on behalf of Ogle a minimum Royalty Compensation of Twenty Thousand U.S. Dollars ($20,000) payable in four (4) equal installments of Five Thousand U.S. Dollars ($5,000) and due simultaneously with the Retainer Fee on or before the first (1st) day of February, May, August and November in each Contract Year. + + 12. PAYMENT OF ROYALTY COMPENSATION. Within thirty (30) days of the conclusion of each three (3) month period in each Contract Year during the Contract Period, TPC agrees to deliver to Consolidated Artists and Advantage an + + + + + +itemized statement setting forth the actual number of all Endorsed Products distributed and sold during the preceding three (3) month period. Simultaneous with the delivery of each statement setting forth such totals, TPC + + - 10 - + +agrees to pay Consolidated Artists the appropriate Royalty Compensation in excess of the $5,000 quarterly payment set forth in Paragraph 10 above, due on the sales of the Endorsed Product for the period covered by such statement. + + 13. ACCOUNTING FOR ROYALTY COMPENSATION. TPC agrees that it shall keep accurate and complete books and records showing all Endorsed Products manufactured, distributed and sold. Consolidated Artists and Advantage, at Consolidated Artists' expense, shall have the right during the Contract Period and until two (2) years after the termination of this Agreement to inspect and make copies of the books and records of TPC insofar as they relate to the computation of royalty payments due and owing to Consolidated Artists hereunder. + + 14. PAYMENTS TO CONSOLIDATED ARTISTS. All payments to be made to Consolidated Artists pursuant to the terms hereof shall be made by wire transfer in U.S. Dollars to the following account: + + Account Name: Advantage International Escrow Fund Account #: 20068160-13 ABA #: 054001547 Bank Name: Franklin National Bank of Washington Address: 1722 Eye Street Washington, D.C. 20006 U.S.A. Re: Consolidated Artists + + 15. MINIMUM PLAY REQUIREMENT. TPC shall have the right to prorate the Retainer Fee due Consolidated Artists upon fourteen (14) days written notice to Consolidated Artists or Advantage in the event Ogle fails to play a minimum of seventeen (17) U.S. PGA + + - 11 - + +Tour Events and the British Open in each Contract Year during the Contract Period. + + 16. TIME OF THE ESSENCE. TPC acknowledges that time is of the essence in the payment of all compensation due Consolidated Artists hereunder. For the purposes of this Agreement, all payments not received within thirty (30) days of the date due shall be deemed "past due". Such past due payments shall bear interest at a rate of two percent (2%) per month OR the maximum rate permissible by law, whichever is less. The imposition of interest provided for in this Paragraph shall be in addition to any other remedies available to Consolidated Artists under this Agreement or otherwise. Accordingly, Consolidated Artists shall not be precluded from exercising any other remedies, whether at law or in equity, to enforce the terms of this Agreement. + + 17. SPECIAL RIGHT OF NEGOTIATION AND TERMINATION. If at any time during the Contract Period Ogle determines that he no longer desires to use the Endorsed Product Consolidated Artists shall so notify TPC in writing and the parties shall meet and negotiate in good faith an amicable solution. Such discussion shall take place within fourteen (14) days of Consolidated Artists' notice and shall include such issues as Ogle's continued use of the Endorsed Product, the continued use of the Ogle Endorsement and the termination of this Agreement. If no solution is reached within fourteen (14) days of such negotiation, the parties agree that this Agreement shall automatically terminate and that TPC will cease + + - 12 - + +using the Ogle Endorsement, the name "Brett Ogle," or any facsimile thereof, for any promotional or advertising purposes in accordance with the terms set forth in Paragraph 5 above. In addition, TPC agrees that Consolidated Artists shall be entitled to the Retainer Fee prorated to the effective date of termination as well any Tournament Bonuses, Money List Bonuses and any Royalty Compensation earned by Consolidated Artists prior to the effective date of termination. + + 18. PRODUCTS FOR OGLE'S USE. During the Contract Period, TPC shall supply Consolidated Artists, at no charge, with such quantities of the Endorsed Product as Consolidated Artists may reasonably request for Ogle's use and the personal use of Ogle's immediate family. In addition, TPC shall supply Consolidated Artists at normal wholesale price with such quantities of the Endorsed Product as Ogle may reasonably request for gifts to others. + + 19. PROTECTING THE OGLE ENDORSEMENT. TPC and Consolidated Artists agree that they will take all necessary steps during the Contract Period and thereafter to protect the Ogle Endorsement, the name "Brett Ogle" or any facsimile thereof in connection with the advertisement, promotion, distribution and sale of the Endorsed Product. + + + + + + 20. TERM OF AGREEMENT. The term of this Agreement shall commence January 1, 1996, and shall continue for a period of three (3) years, concluding December 31, 1998. + + - 13 - + + 21. SPECIAL RIGHT OF TERMINATION BY CONSOLIDATED ARTISTS. Consolidated Artists shall have the right to terminate this Agreement upon thirty (30) days prior written notice to TPC in the event of the occurrence of any of the following contingencies: + + (a) If TPC is adjudicated as insolvent, declares bankruptcy or fails to continue its business of selling the Endorsed Product; or + + (b) If TPC fails to make payment to Consolidated Artists of any sums due pursuant to this Agreement within thirty (30) days following the date such payment is due hereunder, provided that TPC is notified in writing of such nonpayment by Consolidated Artists or Advantage and such payment is not made within ten (10) days following such notification. + +TPC agrees that such termination shall not relieve it of its obligation to pay Consolidated Artists all compensation contemplated hereunder. Accordingly, Consolidated Artists shall not waive any of its rights at law or in equity. + + 22. SPECIAL RIGHT OF TERMINATION BY TPC. TPC shall have the right to terminate this Agreement upon thirty (30) days prior written notice to Consolidated Artists or Advantage in the event of the occurrence of any of the following contingencies: + + (a) In the event of 0gle's death during the Contract Period; or + + - 14 - + + (b) In the event Ogle is convicted of a felony involving moral turpitude. + +In the event of such termination above, the parties agree that the Retainer Fee due Consolidated Artists shall be prorated to the effective date of termination. Furthermore, TPC agrees that any Tournament Bonuses, Money List Bonuses and any Royalty Compensation earned by Ogle prior to the effective date of termination shall be paid in full within thirty (30) days of such effective date of termination. + + 23. INDEMNITY. TPC agrees to protect, indemnify and hold harmless Consolidated Artists and Ogle from and against any and all expenses, damages, claims, suits, actions, judgments and costs whatsoever, including attorneys' fees, arising out of, or in any way connected with, any claim or action which arises from the use of the Endorsed Product, the use of the Ogle Endorsement, or the performance of Consolidated Artists' and Ogle's obligations hereunder. + + 24. WAIVER. The failure of TPC or Consolidated Artists at any time or times to demand strict performance by the other of any of the terms, covenants or conditions set forth herein shall not be construed as a continuing waiver or relinquishment thereof and either may at any time demand strict and complete performance by the other of said terms, covenants and conditions. + + 25. ASSIGNMENT. Neither TPC nor Consolidated Artists shall have any right to grant sublicenses hereunder or to otherwise + + - 15 - + +assign, transfer, alienate, encumber or hypothecate any of its rights or obligations hereunder without the express prior written consent of the other party, except that Consolidated Artists shall have the right to assign the financial benefits hereof and TPC hereby consents to such assignment. + + 26. NOTICES. All notices required hereunder shall be sent by telefax, overnight mail or first class mail, return receipt requested, as appropriate, to the parties at the following addresses: + + TPC Mr. Fred A. Hochman President Teardrop Putter Corporation 207 WatersEdge, Shelter Cove Hilton Head Island, South Carolina 29928 + + Consolidated Consolidated Artists, Inc. Artists Sommerville House Phillips Street St. Helier Jersey JE1 1DE Channel Islands British Isles + + cc: Advantage International Management, Inc. 1751 Pinnacle Drive Suite 1500 McLean, Virginia 22102 Attention: Mr. Peter Roisman + + + + + +Advantage and TPC shall promptly notify each other in writing of any change of address. + + 27. EMPLOYER/EMPLOYEE RELATIONSHIP. Nothing contained in this Agreement shall be construed as establishing an employer/employee relationship between TPC and Consolidated Artists. Accordingly, there shall be no withholding for tax + + - 16 - + +purposes from any payments due hereunder to Consolidated Artists by TPC. + + 28. GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Virginia applicable to contracts entered into and wholly to be performed within the Commonwealth of Virginia and, in the event of any litigation arising out of this Agreement, venue shall be the Commonwealth of Virginia. Should Consolidated Artists be required to institute litigation due to TPC's breach of any terms of this Agreement, all costs of such litigation, including reasonable attorneys' fees, shall be borne by TPC. + + 29. SIGNIFICANCE OF HEADINGS. Paragraph headings contained hereunder are solely for the purpose of aiding in speedy location of subject matter and are not in any sense to be given weight in the construction of this Agreement. Accordingly, in case of any question with respect to the construction of this Agreement, it is to be construed as though such paragraph headings had been omitted. + + 30. ENTIRE AGREEMENT. This Agreement constitutes the entire understanding between Consolidated Artists and TPC, and cannot be altered or modified except by an agreement in writing signed by both parties. Upon its execution, this Agreement shall supersede all prior negotiations, understandings and agreements, whether oral or written, and such prior agreements shall thereupon be null and void and without further legal effect. + + - 17 - + + IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first above written. + + TEARDROP PUTTER CORPORATION + +Date: 2-27-96 BY: /s/ Brian R. Hochman -------------------- -------------------------------- Brian R. Hochman President + + CONSOLIDATED ARTISTS, INC. + +Date: 10-4-96 By: /s/ M. M. Murray -------------------- -------------------------------- Its: Ass Secretary ------------------------------- + + GUARANTY + + I, the undersigned, Brett Ogle, do hereby acknowledge that I have read the foregoing Agreement between Teardrop Putter Corporation ("TPC") and Consolidated Artists, Inc. ("Consolidated Artists") and am aware of the terms thereof. In this connection, I agree that I will be bound by the terms and conditions of such Agreement and that I will be entitled to the rights and benefits set forth therein, as fully as if I have been a party to such Agreement. Furthermore, in consideration of the mutual covenants and conditions and as a material inducement to TPC to enter into said Agreement with Consolidated Artists, I do hereby guarantee the performance of said Agreement by Consolidated Artists. This guaranty shall only be effective upon the execution of the Agreement by Consolidated Artists. + +DATE: 3/28/96 /s/ Brett Ogle -------------------- ----------------------------------- BRETT OGLE \ No newline at end of file diff --git a/full_contract_txt/TELEGLOBEINTERNATIONALHOLDINGSLTD_03_29_2004-EX-10.10-CONSTRUCTION AND MAINTENANCE AGREEMENT.txt b/full_contract_txt/TELEGLOBEINTERNATIONALHOLDINGSLTD_03_29_2004-EX-10.10-CONSTRUCTION AND MAINTENANCE AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..1c28a3dabc74f9146972b9d4cc8fbee77df39b36 --- /dev/null +++ b/full_contract_txt/TELEGLOBEINTERNATIONALHOLDINGSLTD_03_29_2004-EX-10.10-CONSTRUCTION AND MAINTENANCE AGREEMENT.txt @@ -0,0 +1,633 @@ +Exhibit 10.10 ASIA PACIFIC CABLE NETWORK 2 CONSTRUCTION AND MAINTENANCE AGREEMENT Singapore April 18th, 2000 + + + + + + TABLE OF CONTENTS PARAGRAPH + + 1 Definitions and Interpretations + + 2 APCN 2 Configuration + + 3 Establishment of the APCN 2 Management Committee + + 4 Provision, Construction and Ownership of Segments + + 5 Definition of APCN 2 Capital Costs + + 6 Definition of Operation and Maintenance Costs + + 7 Allocation and Billing of APCN 2 Costs + + 8 Currency of Payment + + 9 Keeping and Inspection of Books for Segment S and T + + 10 Duties and Rights as to Operation and Maintenance of Segments + + 11 Use of Segment T + + 12 Acquisition and Use of Capacity + + 13 Expansion of Equipped Capacity + + 14 Increase or Decrease of Design Capacity + + 15 Obligation to Provide Transiting Facilities to Extend APCN2 Capacity + + 16 Obligation to Connect the APCN 2 with Inland Systems + + 17 Direct Access to Network Interface and Equal Access to Terminal Station + + 18 Duration of Agreement and Realization of Assets + + 19 Obtaining of Approvals + + 20 Privileges for Documents or Communications + + 21 Relationship of Parties + + 22 Assignment of Rights and Obligations + + 23 Default + + 1 + + + + + + + + 24 Waiver + + 25 Compliance with Law + + 26 Ratification of Decisions and Actions + + 27 Resolution of Disputes + + 28 Supplements and Amendments to this Agreement + + 29 Execution of Agreement + + 30 Successors Bound + + 31 Confidentiality + + 32 Settlement of Claims by Parties + + 33 Force Majeure + + 34 Severability + + 35 Entire Agreement + + + +Testamonium + + 2 + + + + + + SCHEDULES Schedule A Parties to the Agreement Schedule B Investment Shares, Ownership Interest, Voting Interests, and Allocation of Capital Cost and O&M Costs Schedule C Capacity Allocation and Interest in Unallocated Capacity Schedule D Sales of IRU Capacity ANNEXES + + Annex 1 Terms of Reference for the Procurement Group Annex 2 Terms of Reference for the AR&RSC, O&MSC, F&ASC and I&ASC Annex 3 Terms of Reference for the Network Administrator Annex 4 Terms of Reference for the Central Billing Party Annex 5 Configuration of APCN 2 Annex 6 Billing Currency and Source of Rate for Financial Charges Annex 7 Rules on Use of Capacity Annex 8 Segment T Facilities and Functions 3 + + + + + + ASIA PACIFIC CABLE NETWORK 2 CONSTRUCTION & MAINTENANCE AGREEMENT THIS AGREEMENT, made and entered into this 18th day of April 2000, between and among the Parties signatory hereto (hereinafter collectively called "Parties" and individually called "Party"), which Parties are identified in Schedule A, WITNESSETH: WHEREAS, digital telecommunications services are being provided in the Asia Pacific Region by means of fiber optic submarine cable and satellite facilities; and WHEREAS, other digital light-wave submarine cable systems, presently in service in the Asia Pacific Region, have facilitated a rapid growth of new telecommunications requirements designed to take advantage of reliable, secure and economically priced services based on state of the art and available digital technology; and WHEREAS, it is now apparent that this rapid growth in traffic demand will lead to a greater demand for facilities in the Asia Pacific Region necessitating the construction of additional Asia Pacific fiber optic submarine cable facilities (hereinafter referred to as the "Asia Pacific Cable Network 2" or "APCN 2"); and WHEREAS, the reliability of telecommunications services and its usefulness to customers requires the availability of the appropriate facilities and technology, including the APCN 2 for diverse routing and instantaneous restoration of services; and WHEREAS, China Telecom, CWHKTI, Chunghwa Telecom, Korea Telecom, Japan Telecom, NTT Com, KDD Corp., Telekom Malaysia, SingTel, and Telstra, (the "MOU" Parties") signed a Memorandum of Understanding to plan the APCN 2 effective from 16th June 1999 (hereinafter referred to as the "MOU") to permit activities, as defined in the MOU; and WHEREAS, the First Supplemental MOU, the Second Supplemental MOU, the Third Supplemental MOU and the Fourth Supplemental MOU were effective from October 5, 1999, October 6, 1999, February 29, 2000 and April 4, 2000 respectively; and WHEREAS, the MOU and the Supplemental MOUs are hereinafter collectively called the "MOU"; and WHEREAS, the MOU states that it shall continue in force until the signing, by the Parties, of the APCN 2 Construction and Maintenance Agreement; and WHEREAS, the Parties now desire to construct the APCN 2 as a fully integrated Asia Pacific network comprised of 4 fully restorable fiber optic pairs; and WHEREAS, the Parties now desire to define the terms and conditions upon which the APCN 2 will be provided, constructed, operated and maintained. 4 + + + + + + NOW, THEREFORE, the Parties hereto, in consideration of the mutual covenants herein expressed, covenant and agree with each other as follows: 1. DEFINITIONS AND INTERPRETATIONS 1.1 The following definitions and interpretations shall apply to certain terms used in this Agreement: (a) Affiliate: A company is the Affiliate of another if either company owns directly or indirectly less than 50% but no less than 10% of its equity. (b) Branching Unit (BU): Equipment that permits interconnection between 3 cable Segments and provides the optical fiber and power conductor between 3 cable Segments. (c) Cable Landing Point: Cable Landing Point shall be the beach joint or the mean low watermark of ordinary spring tides if there is no beach joint. (d) Capacity Types shall be categorized as follows: Allocated Capacity - capacity allocated in the APCN 2 to a Party in return for its financial investment. Design Capacity - the maximum capacity that the APCN 2 is designed to provide which shall be no less than 2.5 Tbit/s. + + Equipped Capacity - the amount of capacity physically provided in the APCN 2 at any one time. Initial Equipped Capacity - Initial Equipped Capacity of the APCN 2 shall be at least 80Gbit/s. IRU Capacity - capacity acquired after execution of this Agreement on an IRU basis from the Unallocated Capacity. + + Unallocated Capacity - the difference in capacity between the Equipped Capacity and the Allocated Capacity. + + (e) Carrier: Any entity authorized or permitted under the laws of its respective Country, or another Country in which it operates, to acquire and use international transmission facilities for the provision of international telecommunications services and which is in possession of any necessary operating license to enable it to do so. (f) Country: The word Country as used in this Agreement shall mean a country, territory or place, as appropriate. 5 + + + + + + (g) Direct Access: The direct connection to the Network Interface of Segment S without going through any other party's equipment. (h) Initial Parties: The Initial Parties are Advantel, C&W, China Telecom, China Unicom, Concert Ltd, Chunghwa Telecom, CWHKTI, Global One, JT, KDD, KPN, KT, Layer 2, MCIITI, MFN, NCIC, NTT Com, Onelink, PLDT, SingTel, StarHub, Teleglobe, Telstra, TFN, TM and Williams. (i) IRU: Indefeasible Right of Use which does not convey ownership and voting rights in the management of the APCN 2. (j) Minimum Investment Unit: A unit designated as the minimum unit of investment in the APCN 2, which is equivalent to one whole STM- 1 ring, allowing the use of two (2) half STM-1 ring circuits on any Path within the APCN 2. The Minimum Investment Unit is hereinafter termed as a "MIU". (k) Network Interface: The nominal STM-l digital/optical input/output ports, and/or STM-4, STM-16 and STM-64 on the digital/optical distribution frame (including the digital/optical distribution frame itself). (l) Parent Company: A company that owns directly or indirectly no less than 50% of equity of a company. (m) Path: The connectivity in the APCN 2 between any two Network Interfaces which is independent of the actual physical links used to connect these Network Interfaces. (n) Provisional Acceptance: The issuance of a certificate of Provisional Acceptance shall be that of Segment S pursuant to the terms and conditions set forth in the Supply Contract. (o) Ready For Provisional Acceptance Date: The date on which the entire Wet Segment of the APCN 2 is provisionally accepted by the Procurement Group on behalf of the Parties. The Ready for Provisional Acceptance Date (hereinafter referred to as the "RFPA Date") shall be 31st August 2001, or such other date as may be agreed by the Management Committee. (p) Ready for Service Date: The date on which commercial service can be placed on the entire APCN 2. For the purposes of this Agreement, the Ready For Service Date (hereinafter referred to as the "RFS Date") shall be 30th September 2001, or such other date as may be agreed by the Management Committee. (q) Subsidiary: A company that is directly or indirectly owned by a Parent Company holding no less than 50% of its equity. 6 + + + + + + (r) Supply Contract: The contracts placed by the Procurement Group on behalf of the Parties for the supply of the Wet Segment of the APCN 2. (s) Terminal Parties: The Terminal Parties are China Telecom, CWHKTI, Chunghwa Telecom, KDD, Korea Telecom, NTT Com, PLDT, SingTel, and Telekom Malaysia. (t) Wet Segment: For the purposes of this Agreement, Segments S1, S2, S3, S4, S5, S6, S7, and S8 as defined below are collectively called the Wet Segment. 1.2 Schedules and Annexes The Schedules and Annexes to this Agreement, and any written amendments thereto or any Schedules or Annexes substituted therefore, shall form part of this Agreement, and any Paragraph which contains a reference to a Schedule or Annex shall be read as if the Schedule or Annex was set out at length in the body of the Paragraph itself. In the event that there is any conflict between the terms and conditions of this Agreement and the Schedules and Annexes to this Agreement, the terms and conditions of this Agreement shall prevail. 1.3 Paragraph headings The headings of the paragraphs are inserted for convenience and do not form part of this Agreement and shall not have any effect on the interpretation thereof. 1.4 Interpretation Where the sense requires, words denoting the singular only shall also include the plural and vice versa. References to persons shall include firms and companies and vice versa. Reference to the male shall include the female. 2. APCN 2 CONFIGURATION 2.1 The configuration of APCN 2 shall be as shown in Annex 5, which shall be regarded as consisting of a terrestrial section (hereinafter called "Segment T") and a submarine section (herein called "Segment S" or the "Wet Segment"). 2.2 Segment T shall be regarded as comprising of the following Segments: Segment T1: A Terminal Station at Katong Segment T2: A Terminal Station at Kuantan Segment T3: A Terminal Station at Lantau Segment T4: A Terminal Station at Chongming 7 + + + + + + Segment T5: A Terminal Station at Pusan Segment T6: A Terminal Station at Kitaibaraki Segment T7: A Terminal Station at Chikura Segment T8: A Terminal Station at Tanshui Segment T9: A Terminal Station at Shantou Segment T10: A Terminal Station at Batangas 2.3 Segments T1, T2, T3, T4, T5, T6, T7, T8, T9 and T10 shall each consist of: (i) an appropriate share of land and buildings at the specified locations for the cable landing, Terminal Station and for the cable route including cable rights-of-way and ducts or conduits between the Terminal Station and its respective Cable Landing Point, and an appropriate share of common services and equipment at each of those locations together with equipment in each of those Terminal Stations and at a remote location as necessary which is solely associated with the APCN 2, but not part of the Wet Segment; and (ii) An appropriate share of the test equipment. 2.4 Segment S shall be regarded as comprising of the following Segments: Segment S1: The whole of the submarine cable containing four (4) optical fiber pairs provided between and including the Network Interface at the Terminal Station at Katong; and the Network Interface at the Terminal Station at Kuantan. Segment S2: The whole of the submarine cable containing four (4) optical fiber pairs provided between and including the Network Interface at the Terminal Station at Kuantan; and the Network Interface at the Terminal Station at Lantau. Segment S3: The whole of the submarine cable containing four (4) optical fiber pairs provided between and including the Network Interface at the Terminal Station at Lantau; and the Network Interface at the Terminal Station at Chongming. Segment S4: The whole of the submarine cable containing four (4) optical fiber pairs provided between and including the Network Interface at the Terminal Station at Chongming; and the Network Interface at the Terminal Station at Pusan; and the Network Interface at the Terminal Station at Kitaibaraki. 8 + + + + + + Segment S4A: + +The whole of the submarine cable containing four (4) optical fiber pairs, provided between and including the Network Interface at the Terminal Station at Chongming and BU1. Segment S4B: + +The whole of the submarine cable containing two (2) optical fiber pairs provided between BU1 and BU2. Segment S4C: + +The whole of the submarine cable containing four (4) optical fiber pairs, provided between and including the Network Interface at the Terminal Station at Kitaibaraki and BU2. Segment S4W: + +The whole of the submarine cable containing two (2) optical fiber pairs, provided between and including the Network Interface at the Terminal Station at Pusan and BU1. Segment S4E: + +The whole of the submarine cable containing two (2) optical fiber pairs, provided between and including the Network Interface at the Terminal Station at Pusan and BU2. Segment S5: The whole of the submarine cable containing four (4) optical fiber pairs provided between and including the Network Interface at the Terminal Station at Kitaibaraki; and the Network Interface at the Terminal Station at Chikura. Segment S6: The whole of the submarine cable containing four (4) optical fiber pairs provided between and including the Network Interface at the Terminal Station at Chikura; and the Network Interface at the Terminal Station at Tanshui. Segment S7: The whole of the submarine cable containing four (4) optical fiber pairs provided between and including the Network Interface at the Terminal Station at Tanshui; and the Network Interface at the Terminal Station at Shantou. Segment S8: The whole of the submarine cable containing four (4) optical fiber pairs provided between and including the Network Interface at the Terminal Station at Shantou; and the Network Interface at the Terminal Station at Batangas; and the Network Interface at the Terminal Station at Katong. 9 + + + + + + Segment S8A: + +The whole of the submarine cable containing four (4) optical fiber pairs, provided between and including the Network Interface at the Terminal Station at Shantou and BU3. Segment S8B: + +The whole of the submarine cable containing two (2) optical fiber pairs provided between BU3 and BU4. Segment S8C: + +The whole of the submarine cable containing four (4) optical fiber pairs, provided between and including the Network Interface at the Terminal Station at Katong and BU4. Segment S8N: + +The whole of the submarine cable containing two (2) optical fiber pairs, provided between and including the Network Interface at the Terminal Station at Batangas and BU3. Segment S8S: + +The whole of the submarine cable containing two (2) optical fiber pairs, provided between and including the Network Interface at the Terminal Station at Batangas and BU4. 2.5 Segment S shall include: (i) all transmission, power feeding, system management, Network Protection Equipment and test equipment directly associated with, and required to operate and maintain the submersible plant including, where applicable, a remote control and supervisory equipment; (ii) the power equipment provided wholly for use with the equipment listed in (i) above; (iii) the transmission cable equipped with appropriate optical amplifiers, BUs, and joint housings between the applicable Terminal Stations: (iv) the sea earth cable and electrode system and/or the land earth system, or an appropriate share thereof, associated with the terminal power feeding equipment in the respective Terminal Stations; and (v) terminal equipment, including Network Interface for STM-1, STM-4, STM-16 and STM-64 levels, in each of the Terminal Stations. 2.6 In this Agreement, references to any Segment, however expressed, shall be deemed to include, unless the context otherwise requires, additional property incorporated therein by agreement of the Management Committee. Each Segment shall be regarded as including 10 + + + + + + its related spare and standby units and components, including, but not limited to, optical amplifiers, BUs, cable lengths, and terminal equipment. 11 + + + + + + 3. ESTABLISHMENT OF THE APCN 2 MANAGEMENT COMMITTEE 3.1 The Parties shall form an APCN 2 Management Committee (hereinafter referred to as the "Management Committee"), for the purpose of directing the progress of engineering, provision, installation, bringing into service and continued operation of the APCN 2, consisting of one representative of each of the Parties to this Agreement. The Management Committee shall make all major decisions necessary to effectuate the purposes of this Agreement. 3.2 Two or more Parties may designate the same Party to serve as their representative at specific meetings of the Management Committee and/or its Subcommittees established pursuant to Subparagraph 3.7 of this Agreement. 3.3 Each of the Initial Parties shall, on a rotational basis, provide the Chairman of the Management Committee which will meet on the call of a Chairman or whenever requested by one or more Parties together representing at least five per cent (5%) of the total voting interests specified in Schedule B. The Chairman shall give at least thirty (30) days' advance notice of each meeting, together with a copy of the draft agenda. In cases of emergency, such notice period may be reduced where at least seventy-five (75) percent of the total voting interests are in agreement. Documents for the meeting should be made available to members at least fourteen (14) days before the meeting, but the Management Committee may agree to discuss papers distributed on less than fourteen (14) days' notice. 3.4 The Management Committee shall make every reasonable effort to reach agreement with respect to matters to be decided. Unless otherwise provided for in this Agreement, in the event an agreement cannot be reached, the decision will be carried on the basis of simple majority of the total voting interests specified in Schedule B, which must include a simple majority of the voting interests of the Terminal Parties and a simple majority of the voting interests of the non-Terminal Parties. A member of the Management Committee representing more than one Party shall separately cast the votes to which each Party he represents is entitled. 3.5 Any Party not represented at a Management Committee meeting, but entitled to vote, may vote on any matter on the agenda of such a meeting by either appointing a proxy in writing or giving notice of such vote to the Chairman prior to the submission of such matters for vote at such meetings. 3.6 No decisions of the Management Committee, its Subcommittees or any other groups established by the Management Committee shall override any provisions of this Agreement or in any way diminish the rights or prejudice the interests granted to any Party under this Agreement. 3.7 To aid the Management Committee in the performance of its duties, the following Subcommittees shall be formed, and said Subcommittees, under the direction of the 12 + + + + + + Management Committee, shall be responsible for their respective areas of interest listed in Annex 2 and any other areas of interest designated by the Management Committee: (i) Investment and Agreement Subcommittee (hereinafter referred to as "I&ASC") (ii) Financial and Administrative Subcommittee (hereinafter referred to as "F&ASC") (iii) Operations and Maintenance Subcommittee (hereinafter referred to as "O&MSC") (iv) Assignments, Routing, and Restoration Subcommittee (hereinafter referred to as "AR&RSC") 3.8 The Management Committee shall form a Procurement Group (hereinafter referred to as "PG"), consisting of representatives from each of the Initial Parties. This group shall act on behalf of the Parties to this Agreement for the purpose of arranging for the construction, implementation, and installation of the Wet Segment of APCN 2 and be solely responsible for all actions as may be required to contract with the Suppliers to provide the Wet Segment of the APCN 2. The Terms of Reference of the PG are contained in Annex 1. 3.9 The Management Committee may establish such other subcommittees or working groups as it shall determine within its discretion to provide assistance in the performance of its responsibilities. The PG and the Subcommittees shall meet at least once annually after the execution date of this Agreement and more frequently if necessary, until two years following the RFS Date and thereafter as may be appropriate. Meetings of the PG and a Subcommittee may be called to consider specific questions at the discretion of its Co-Chairmen whenever requested by one or more Initial Parties. 3.10 The respective Co-Chairmen of each Subcommittee, or a designated representative of each Subcommittee, shall attend the Management Committee meetings and meetings of each other Subcommittee in an advisory capacity as necessary. On or about two (2) years after the RFS Date, the Management Committee shall determine whether any of its Subcommittees should remain in existence. If the Management Committee determines that one or more of its Subcommittees shall not remain in existence, the responsibilities assigned to a Subcommittee whose existence has been terminated under this Subparagraph 3.10 shall revert to the Management Committee unless otherwise provided for in this Agreement. 3.11 The Terms of Reference for the Network Administrator (hereinafter referred to as "NA") are as set forth in Annex 3 of this Agreement. 3.12 The Terms of Reference for the Central Billing Party (hereinafter referred to as "CBP") are as set forth in Annex 4 of this Agreement. At or after the RFS Date the CBP shall be reappointed or a new CBP appointed from the Parties by an open tendering process. 3.13 The Terms of Reference of all Subcommittees, the NA, the CBP and the PG established pursuant to this Paragraph 3 shall be amended by the Management Committee as and when as it is necessary. 13 + + + + + + 4. PROVISION, CONSTRUCTION AND OWNERSHIP OF SEGMENTS 4.1 The following Parties shall own, provide and agree to act as the Terminal Parties for the following Segments; SEGMENT + +TERMINAL PARTY T1 + +SingTel T2 + +TM T3 + +CWHKTI T4 + +China Telecom T5 + +KT T6 + +NTT Com T7 + +KDD T8 + +Chunghwa Telecom T9 + +China Telecom T10 + +PLDT 4.2 The Terminal Parties shall make available to the other Parties hereto any reasonable information requested by the Parties relating to the engineering, provision, construction, or installation of Segment T in a timely manner. The various Segment T shall be provided in sufficient time to permit APCN 2 to be placed into operation by the RFS Date. 4.3 Ownership of the Wet Segment shall be as shown in Schedule B to this Agreement. The Wet Segment of APCN 2 shall be owned by the Parties in common and undivided shares. 4.4 The provision of the Wet Segment shall be through a Supply Contract to be placed by the PG with Suppliers subject to approval by the Management Committee. 4.5 Each of the Parties shall be entitled, on request and at its own expense, to receive from the PG a copy of the Supply Contract subject to the acceptance by each such Party of any reasonable conditions of confidentiality imposed by the Supply Contract. 4.6 The PG shall ensure that the Supply Contract specifies that the Wet Segment is to be provided by the RFPA Date. 4.7 The PG shall ensure that the Supply Contract shall afford them or their designated representatives reasonable rights of access to examine, test, and inspect the APCN 2 cable equipment, material, supplies and installation activities. 4.8 In the event that the Wet Segment fails to meet the specifications referred to in the Supply Contract for its provision, fails to provide the specified capacity, or is not engineered, provided, installed and ready in sufficient time to meet the RFPA Date as specified in the Supply Contract, or if the Suppliers are otherwise in material breach of the Supply Contract, the PG may, pursuant to this Paragraph 4 and in accordance with the Supply Contract, take such actions as may be necessary to exercise the rights and 14 + + + + + + remedies available under the terms and conditions of the Supply Contract. Such actions by the PG shall be subject to any direction deemed necessary by the Management Committee. 4.9 The members of the PG shall not be liable to any other Party or to each other for any loss or damage sustained by reason of a Supplier's failure to perform in accordance with the terms and conditions of its Supply Contract, or as a result of APCN 2 not meeting the RFPA Date as specified in the Supply Contract, or if APCN 2 does not perform in accordance with the technical specifications and other requirements of the Supply Contract, or APCN 2 is not integrated or placed into operation. The Parties recognize and agree that the PG does not make any representations or warranties, including, but not limited to, any representation or warranty regarding: (i) the performance of the Supply Contract by the Supplier (ii) the performance or reliability of the Wet Segment, or (iii) that APCN 2 shall be integrated or placed into operation and the Parties hereby agree that nothing in this Agreement shall be construed as such a warranty or guarantee. 5. DEFINITION OF APCN 2 CAPITAL COSTS 5.1 The capital costs (herein referred to as the "Capital Costs") are the costs incurred in connection with the engineering, provision, construction and installation of Segment S and Segment T, or causing them to be engineered, provided, constructed and installed and shall include: (a) appropriate costs, including appropriate financial charges, incurred under the MOU in respect of specific activities such as desk top surveys and meeting expenses that are reasonably related to the construction of the APCN 2; (b) those costs payable to the Supplier(s) under the Supply Contract attributable to the Wet Segment; (c) the fixed costs and the additional Capital Costs to be reimbursed to the Terminal Parties for the provision of the Terminal Stations in accordance with the costs schedule and scope of work given in Annex 8; (d) those costs directly incurred by the Initial Parties which shall be fair and reasonable in amount and not included in the Supply Contract and which have been directly and reasonably incurred solely for the purpose of, or to be properly chargeable in respect of, such engineering, provision, construction, installation and laying of the Wet Segment, including but not limited to, the costs of engineering, design, materials, manufacturing, procurement and inspection, installation, removing (with appropriate reduction for salvage), cable ship and other ship costs, burying, fisherman's compensation including reasonable related 15 + + + + + + expenses, testing associated with laying or installation, customs duties, taxes (except income tax imposed upon the net income of a Party), appropriate financial charges, supervision, billing activities, overheads and insurance of or a reasonable allowance in lieu of insurance if such Party elects to carry a risk itself, being a risk which is similar to one against which a supplier has insured or against which insurance is usual or recognized or would have been reasonable; (e) those fees payable to the NA, up to the RFS Date, in fulfilling its responsibilities as set forth in Annex 3; (1) those fees payable to the CBP, up to the RFS Date, in fulfilling its responsibilities as set forth in Annex 4; (g) those costs incurred, up to the RFS Date, by the custodians of the original, amendments and supplements to this Agreement, for distributing certified photocopies of this Agreement and/or amendments or supplements to the Parties to this Agreement; (h) those costs reasonably incurred (as approved by the Management Committee) by the Parties, up to the RFS Date, hereto in the holding of' the meetings of the PG and I&ASC; (i) those costs reasonably incurred (as approved by the Management Committee) by the Parties, up to the RFS Date, hereto in the hosting of the meetings of the Management Committee and its Subcommittees; and (j) the costs associated with any additional work or property incorporated into the Segment S or Segment T subsequent to the RFS Date by agreement of the Management Committee. 5.2 For purposes of this Agreement, the cost of the repair or replacement of any part of the APCN 2 in the event of damage or loss arising during construction, laying, burying installing and the bringing into operation of the APCN 2, which is attributable under the Supply Contract to the Parties, shall be regarded as part of the Capital Costs. 5.3 Any of the Parties may at its own expense insure against risks so far as its own share of such costs is concerned. Should the Parties jointly agree to insure against risks, the costs of such insurance shall form part of the Capital Costs, as approved by the Management Committee. 16 + + + + + + 6. DEFINITION OF OPERATION AND MAINTENANCE COSTS The costs associated with the operation and maintenance duties (herein called the "O&M Costs") are the costs reasonably incurred in the operation and maintenance of Segment S and Segment T including, but not limited to: (a) the cost of attendance, testing, adjustments, repairs and replacements, cable ships, (including standby costs), cable depots, maintenance and repair devices that are or may hereafter become available, customs duties, taxes, (except income tax imposed on the net income of a Party) paid in respect of such facilities, billing activities, financial charges attributable to other Parties, shares of costs incurred by a Terminal Parties, supervision, overheads and costs and expenses reasonably incurred on account of claims made by or against other persons in respect of such facilities or any part thereof and damages or compensation payable by the Parties concerned on account of such claims; (b) those costs incurred by the Terminal Parties, including additions thereto, with respect to the operation and maintenance of their respective Terminal Stations, allocable to the APCN 2. Where the use of a Terminal Station or of certain equipment situated therein, such as power supply or testing and maintenance equipment, is shared, by agreement of the Parties, by the APCN 2 and other communications systems terminating at that Terminal Station, the costs of operation and maintenance of such shared Terminal Station or equipment (not solely attributable to a particular communication system or systems) will be allocated among the systems involved in the proportions in which they use the shared equipment or facility. For such purposes, the Management Committee shall approve the method for determining the portion of a shared Terminal Station allocable to the APCN 2. Costs as used in this Paragraph 6 with reference to each of the Terminal Stations shall include costs reasonably incurred in operation and maintenance of the facilities involved, including, but not limited to, the cost of attendance, testing, adjustments, repairs and replacements, customs duties, taxes (except income tax imposed upon the net income of a Party) paid in respect of such facilities, billing activities, administrative costs, financial charges, and costs and expenses reasonably incurred on account of claims made by or against other persons in respect of such facilities or any part thereof and damages or compensation payable by the Terminal Station owner on account of such claims; (c) those fees payable to the NA, after the RFS Date, in fulfilling its responsibilities as set forth in Annex 3; (d) those fees payable to the CBP after the RFS Date, in fulfilling its responsibilities as set forth in Annex 4; 17 + + + + + + (e) those costs reasonably incurred (as approved by the Management Committee) by the Parties, after the RFS Date, hereto in the holding of the meetings of the PG and the I&ASC; and (f) those costs reasonably incurred (as approved by the Management Committee) by the Parties, after the RFS Date, hereto in the hosting of the meetings of the Management Committee and its Subcommittees. 7. ALLOCATION AND BILLING OF APCN 2 COSTS 7.1 The APCN2 Capital Costs as defined in Paragraph 5 shall be borne by the Parties in the proportions set forth in Schedule B. 7.2 The O&M Costs as defined in Paragraph 6 shall be borne by the Parties in the proportions set forth in Schedule B. 7.3 The Terminal Parties shall each render invoices to the CBP for any O&M Costs incurred as outlined in Paragraph 6 not more frequently than quarterly and by the tenth (10th) day of the appropriate month in accordance with procedures to be established by the F&ASC and approved by the Management Committee. The Party rendering an invoice shall furnish such further details of such invoice as the other Parties may reasonably require. On the basis of such invoices, the CBP shall pay such amounts as may be owed sixty (60) days from the 10th calendar day of the month in which the invoice was rendered or on the following working day if day sixty (60) is not a working day in the CBP's Country. 7.4 The Terminal Parties shall each render invoices to the CBP for any Capital Costs incurred as outlined in Paragraph 5 (except Terminal Station cost) not more frequently than quarterly and by the tenth (10th) day of the appropriate month in accordance with procedures to be established by the F&ASC and approved by the Management Committee. The Party rendering an invoice shall furnish such further details of such invoice as the other Parties may reasonably require. On the basis of such invoices, the CBP shall pay such amounts as may be owed sixty (60) days from the 10th calendar day of the month in which the invoice was rendered or on the following working day if day sixty (60) is not a working day in the CBP's Country. 7.5 Unless the Management Committee authorizes changes to the procedure for the rendering of bills associated with the Capital Costs or O&M Costs, the CBP shall promptly render bills, in accordance with this Paragraph 7 and the billing and payment procedures established by the F&ASC and approved by the Management Committee, to each of the Parties for such Parties' pro rata shares of these costs. Such bills shall be rendered by the CBP not more frequently than quarterly and shall contain a reasonable amount of detail to substantiate them. On the basis of such bills, each Party shall pay the CBP, such amounts as may be owed by the end of the calendar month following the calendar month in which the bill was rendered, on the date specified by the CBP. 18 + + + + + + 7.6 In the case of bills containing costs billed on a preliminary billing basis, appropriate adjustments will be made in subsequent bills promptly after the actual costs involved are determined. As soon as practicable the CBP shall make such adjustments and render such bills or arrange for such credits as appropriate due to changes in the cost actually incurred. 7.7 As soon as practicable after the RFS Date, the amount of each Party's share of the Capital Costs shall be computed by the CBP who shall make appropriate adjustments and render any necessary bills or arrange for any necessary refunds by way of final settlement in order that each Party may bear its proper share of the costs as provided in this Paragraph 7. 7.8 For purposes of this Agreement, financial charges shall be computed as applicable on a daily basis from the date payment is incurred until the date payment is due, at a rate equal to the lowest publicly announced prime rate or minimum commercial lending rate, however described, for 90 day loans in the currencies of the Initial Parties or the currency of billing, as applicable, charged by established commercial banks in the countries concerned on the fifteenth day of the month in which the costs were incurred by the invoicing Parties. If such a day is not a business day, the rate prevailing on the next business day shall be used. The source of the rate of such financial charges shall be as shown at Annex 6. The application of financial charges relating to costs incurred for the APCN 2 Capital Costs and O&M Costs shall be limited to a maximum of 120 days, unless otherwise approved by the Management Committee. 7.9 Amounts billed and not paid when due shall accrue extended payment charges from the day following the date on which payment was due until paid. If the due date is not a business day, the due date shall be postponed to the next business day. For the purpose of this Agreement, extended payment charges shall be computed at three hundred percent (300%) of the rate described in Subparagraph 7.8 on the day following the date payment on the bill was due. In the event that applicable law does not allow the imposition of extended payment charges at the rate established in accordance with this Subparagraph 7.9, extended payment charges shall be at the highest rate permitted by applicable law, which in no event shall be higher than the rate computed in accordance with this Subparagraph 7.9. For purposes of this Agreement, "paid" shall mean that the funds are immediately available for use by the recipient. 7.10 Credits for refunds of financial charges and bills for extended payment charges shall not be rendered if the amount of charges involved is less than the equivalent of one hundred ($100) US dollars or its equivalent in the billing currency. 7.11 A bill shall be deemed to have been accepted by the Party to whom it is rendered if that Party does not present a written objection on or before the date when payment is due. If such objection is made, the Parties concerned shall make every reasonable effort to settle promptly the dispute concerning the bill in question. If the objection is sustained and the billed Party has paid the disputed bill, the agreed upon overpayment shall be promptly refunded to the objecting Party by the invoicing Party together with any financial charges 19 + + + + + + calculated thereon at a rate determined in accordance with Subparagraph 7.8 of this Agreement from the date of payment of the bill to the date on which the refund is transmitted to the objecting Party. If the objection is not sustained and the billed Party has not paid the disputed bill, said Party will pay such bill promptly together with any extended payment charges calculated thereon at a rate determined in accordance with Subparagraph 7.9 of this Agreement from the day following the day on which payment was due until paid. Nothing in this Subparagraph 7.11 shall relieve a Party from paying those parts of a bill that are not in dispute. 7.12 Upon the signing of this Agreement, the CBP shall render bills to the Parties for approximately five percent (5%) of their financial commitment in APCN2 as determined by Schedule B. The exact amount of the bills and the billing procedure shall be determined by the Management Committee. The funds received by the CBP from these bills shall be kept in an interest bearing account for the benefit of the Parties to be maintained by the CBP and the used solely and in their entirety to pay the first invoices received by the CBP. 8. CURRENCY OF PAYMENT All invoices rendered to the CBP shall be in the currency of the United States, or in the currency of the invoicing Party which is specified in Annex 6 or the currency in which the cost was incurred in the case of O&M Costs. Such invoices shall be paid in the currency in which the invoices are rendered. The CBP shall render bills to the Parties in the currency of the United States and be paid in the same currency. In conjunction with the CBP, the F&ASC shall develop procedures to deal with the differences between the exchange rates in the circumstances when the currency of invoices rendered to the CBP is not the currency of the United States. 9. KEEPING AND INSPECTION OF BOOKS FOR SEGMENT S AND T 9.1 For those portions of the Wet Segment, if any, specified in the Supply Contract as cost incurred items, the PG shall ensure that the Supply Contract requires the Supplier to keep and maintain such books, records, vouchers and accounts of all such costs with respect to the engineering, provision and installation of those items for a period of five (5) years from the RFPA Date of the Wet Segment, as specified in the Supply Contract. 9.2 For those portions of the Wet Segment specified in the Supply Contract as fixed cost items, the PG shall ensure that the Supply Contract requires the Supplier to keep and maintain records with respect to their respective billing of those items for a period of five (5) years from the RFPA Date of the Wet Segment, as specified in the Supply Contract. 9.3 The PG shall ensure that the Supply Contract requires the Supplier to obtain from their contractors and subcontractors such supporting records, for other than the cost of fixed cost items, as may be reasonably required by Subparagraph 9.1 and to keep and maintain such records for a period of five (5) years from the RFPA Date of the Wet Segment, as specified in the Supply Contract. 20 + + + + + + 9.4 The PG shall ensure that the Supply Contract shall afford the Parties to this Agreement the right to review the books, records, vouchers, and accounts required to be kept, maintained, and obtained pursuant to Subparagraphs 9.1, 9.2 and 9.3. 9.5 With respect to costs incurred for the provision of the Wet Segment by a Party, comparable records to those specified in Subparagraphs 9.l, 9.2 and 9.3 as appropriate, shall be maintained by the Party for a period of five (5) years from the date that such costs were incurred. 9.6 The PG and the Terminal Parties shall each keep and maintain such books, records, vouchers, and accounts of all costs that are incurred in the engineering, provision and installation of the Wet Segment and Segment T and not included in the Supply Contract, which they incur directly, for a period of five (5) years from the RFS Date or the date the work is completed, whichever is later. The CBP shall keep and maintain such books, records, vouchers and accounts with respect to its billing of costs incurred by the Terminal Parties and any other Party having incurred costs for implementation of APCN 2 as authorized by the Management Committee, and costs billable under the Supply Contract for a period of five (5) years from the System RFS Date or the date on which the work is completed, whichever is later. 9.7 With respect to the operation and maintenance costs of Segments T and the Wet Segment, such books, records, vouchers, and accounts of costs, as are relevant, shall be kept and maintained by the Terminal Parties for a period of five (5) years from the date on which the corresponding bills are rendered to the Parties. If a Terminal Party does not retain these records beyond this period, a summary of important items should be retained for the life of APCN 2. 9.8 Any Party shall have the right to review or audit the relevant books, records, vouchers, and accounts of costs pursuant to this Paragraph 9. In affording the right to review or audit, any such Party whose records are being reviewed or audited shall be permitted to recover, from the Party or Parties requesting the review or audit, the entire costs reasonably incurred in complying with the review or audit. In the case of an audit initiated by the Management Committee and exercised by the F&ASC, the audited Party or Parties shall be permitted to recover the entire costs of the review or audit from the Parties in the proportions specified in Schedule B. 9.9 Any rights of review and audit pursuant to this Paragraph 9 shall only be exercisable through the F&ASC in accordance with the F&ASC's audit procedures. 10. DUTIES AND RIGHTS AS TO OPERATION AND MAINTENANCE OF SEGMENTS 10.1 Each Terminal Party shall be solely responsible for the operation and maintenance of their respective Segment T as identified in Paragraph 4 and that portion of Segment S between the Network Interface at the Terminal Station and their respective Cable 21 + + + + + + Landing Point. Such Terminal Party shall use all reasonable efforts to maintain or cause to be maintained economically their respective Segment T and such portion of Segment S, in efficient working order. 10.2 The Terminal Parties (for the purposes of this Paragraph 10, collectively called the "Maintenance Authorities" and each individual called a "Maintenance Authority" or "MA"), shall be jointly responsible for the operation and maintenance of the Wet Segment and shall use all reasonable efforts to maintain economically the Wet Segment in efficient working order and with an objective of achieving effective and timely repairs when necessary. 10.3 Prior to the RFS Date the MAs shall submit for review by the O&MSC and approval by the Management Committee appropriate practices and procedures for the continued operation and maintenance of the Wet Segment. The MAs shall each provide information to the O&MSC regarding the practices and procedures for the continued operation and maintenance of their respective Segments. The MAs shall also furnish such budgetary estimates of the cost of such operation and maintenance of the APCN 2 as the Management Committee may reasonably request. Following the RFS Date, the MAs shall provide the O&MSC and the Management Committee with such reports as it may reasonably require on the operation of the APCN 2 including any proposals for planned repair or improvement work, together with appropriately revised budgetary estimates relating to the operation and maintenance of the APCN 2. The O&MSC may review and amend the practices and procedures for the operation and maintenance of the Wet Segment, subject to the approval of the Management Committee. To facilitate in the maintenance of the APCN 2, the MAs may revise the allocation of responsibilities amongst themselves for the Wet Segment between the Cable Landing Points and any such decision shall be subject to the approval of the Management Committee. 10.4 The MAs shall have the right to deactivate the Wet Segment or any part thereof, in order to perform their duties. Prior to such deactivation, reasonable notice shall be given to, and coordination shall be made with, the other Parties hereto. To the extent possible, sixty (60) days prior to initiating action, the MA involved shall advise the other Parties hereto in writing of the timing, scope, and costs of significant planned maintenance operations, of significant changes to existing operations and maintenance methods and of contractual arrangements for cable ships that will have a significant impact on operation or maintenance costs. Should one or more Parties representing at least two- thirds (66.67%) of the total voting interests in accordance with Schedule B, wish to review such an operation or change prior to its occurrence, such Party or Parties shall notify the appropriate Maintenance Authority and a O&MSC Co-Chairman in writing within thirty (30) days of such advice. Upon such notification, the O&MSC shall initiate action to convene an ad hoc meeting for such review. 10.5 Notwithstanding Paragraph 32, each MA shall be authorized to pursue claims in its own name, on behalf of the Parties, in the event of any damage or loss to the APCN 2 and may file appropriate lawsuits or other proceedings on behalf of the Parties. The MA shall immediately inform the Management Committee and comply with any direction 22 + + + + + + therefrom. Subject to obtaining the prior concurrence of the Management Committee, a MA may settle or compromise any such claims and execute releases and settlement agreements on behalf of the Parties as necessary to effect a settlement or compromise. 10.6 Each Party that has designed or procured equipment used in the APCN 2 shall give necessary information relating to the operation and maintenance of such equipment to the MA responsible for operating and maintaining such equipment, as reflected in this Paragraph 10. Each Maintenance Authority shall have prompt access necessary for the performance of its 10.7 [Missing] interruption. if the MA responsible, as specified in this Paragraph 10, fails to restore those facilities to efficient working order and operation within a reasonable time after having been called upon to do so by any other Party to whom capacity is assigned by this Agreement, the Management Committee may, to the extent that it is practical to do so, place, or cause to be placed, such facilities in efficient working order and operation and charge the Parties their proportionate shares of the costs reasonably incurred in doing so. 10.8 Each Party to this Agreement, at its own expense, shall have the right to inspect from time to time the operation and maintenance of any portion of the APCN 2 and to obtain copies of the maintenance records. For this purpose, the Maintenance Authority shall retain significant records, for a period of not less than five (5) years from the date of the record. If these records are destroyed at the end of this period, a summary of important items should be retained for the life of the APCN 2. 10.9 The MAs shall be entitled to establish the necessary agreements in respect of the crossings by the Wet Segment of other undersea plant, including but not limited to pipelines, and may sign these agreements on behalf of the Parties after approval by the Management Committee and shall provide the Parties with appropriate copies of these agreements on request. 11. USE OF SEGMENT T 11.1 The Terminal Parties hereby grant to the Parties accessing APCN 2 at their respective terminal station, the right of use in the relevant Segment T (hereinafter referred to as "Terminal Station Right of Use") on the terms and conditions stated in this Paragraph 11, to the extent required for the use of its Allocated Capacity, for the purpose of using APCN 2 and carrying on the related activities at that location in accordance with this Agreement. This Terminal Station Right of Use shall commence on the RFS Date and shall continue for the duration of this Agreement. 11.2 In the event that an agreement for another cable system utilizing any Terminal Station of the APCN 2 is terminated prior to the termination of this Agreement, the owner of the respective Segment T, with the agreement of the Parties hereto, shall take all necessary 23 + + + + + + measures to ensure that the Terminal Station in question will be available for the APCN 2 for the duration of this Agreement on fair and equitable terms. If the Terminal Station in question is not available for the landing and terminating of the APCN 2 for any reason, the owner of the Terminal Station shall provide reasonable advance notice to all Parties and such owner, in agreement with the Parties hereto, shall take all necessary measures to ensure that another appropriate Terminal Station will be available for the APCN 2 for the duration of this Agreement on terms and conditions similar to those contained in this Agreement. Applicable costs to the Parties will be determined by the Management Committee. 11.3 For each Terminal Station Right of Use, the Parties hereto shall not be required to pay any additional charges over and above the Capital Costs and O&M costs. 11.4 Notwithstanding Subparagraph 11.1 of this Agreement, a Party thereby granted a Terminal Station Right of Use interest in Segment T may, prior to the commencement of that Terminal Station Right of Use interest, elect to renounce its Terminal Station Right of Use entitlement and to instead have use of any Segment T for the duration of this Agreement on such terms and conditions as are agreed between that Party and the relevant Terminal Party, and in such event the provisions of Subparagraphs 11.1 of this Agreement shall apply in relation to such use except insofar as they may be modified by such agreements. This Subparagraph 11.4 shall not operate to confer on a Party any financial or other benefit of substance to which that Party would not otherwise be entitled under this Agreement. 11.5 The Terminal Parties agree to grant a Terminal Station Right of Use to APCN 2 IRU purchasers. 11.6 In the event of a sale or other disposition of Segment T1, T2,T3, T4, T5, T6, T7, T8, T9 and T10, or part thereof prior to the termination of this Agreement, the owner shall share with the other Parties hereto any net proceeds, or costs, of such sale or disposition received, or expended, by the owner, to the extent allocable to the Capital Costs, in the proportions set forth in Schedule B. 12. ACQUISITION AND USE OF CAPACITY 12.1 Capacity of APCN 2 can only be used by a carrier. 12.2 Parties shall obtain Allocated Capacity in the form of MIU on an ownership basis as shown in Schedule C, in return for their financial investment as identified in Schedule B. 12.3 Procedures for Parties activation of their Allocated Capacity will be developed by the AR&RSC and the NA for Management Committee approval. 24 + + + + + + ASSIGNMENT OF CAPACITY 12.4 For each MIU of its Allocated Capacity, a Party is allowed to assign two (2) half STM-l circuits on any Path within the APCN 2. All such circuits are ring-protected. Additional ring-protected half STM-1 circuits may be granted proportionately to a Party's Allocated Capacity as shown in Schedule C at the discretion of the Management Committee according to the recommendation of the AR&RSC and the NA. 12.5 The Parties may designate a portion of their Allocated Capacity in specific Paths of the APCN 2 as: (i) Jointly Assigned Circuit (hereinafter referred to as "JAC") which shall be considered as consisting of two half STM-I circuits, with one half STM-1 circuit assigned to a Party, which together with the corresponding half STM-1 circuit, shall be used for the provision of international telecommunications services between such a Party and another Carrier that has received the right of use pursuant to this Paragraph 12 or an APCN 2 IRU purchaser. Any alteration to the JAC is subject to bilateral agreement between both Carriers. (ii) Wholly Assigned Circuit (hereinafter referred to as "WAC") which shall be considered as consisting of two half STM-1 circuits assigned to one Party. USE OF WHOLLY ASSIGNED CIRCUIT 12.6 A Party is allowed to use its WAC for the provision of international telecommunications services with itself, its Subsidiary, its Parent Company and/or the Subsidiary of the Party's Parent Company provided that the correspondent parties are also Carriers. 12.7 A Party is also allowed to use its WAC to interconnect with other communication systems for the provision of international telecommunications services terminating outside the APCN 2 landing Countries. If such WAC is originated from any APCN 2 landing Country, such Party must be a Carrier of that Country. 12.8 A Party is also allowed to use its WAC for the provision of international telecommunications services with its Affiliate and/or the Affiliate of the Party's Parent Company provided that this Affiliate is a Carrier and a cash contribution is made by the Party to a special fund dedicated solely to fund future upgrades to increase the Equipped Capacity. The amount of the contribution is described in Annex 7. PORTABILITY OF CAPACITY 12.9 A Party is allowed to de-assign its JAC and/or WAC to its Allocated Capacity provided that bilateral agreement is given by the concerned Camera and according to the guidelines to be developed by the AR&RSC and the NA. 12.10 Re-assignment of Allocated Capacity which resulted from the de-assignment of the JAC and/or WAC shall give priority to the assignment of Allocated Capacity which has not 25 + + + + + + been de-assigned before, in the event that there is any conflicting requirement for use of capacity on the APCN 2. 12.11 Under no circumstances shall a Party's JAC and/or WAC be de-activated due to the assignment of other Parties' Allocated Capacity. TRANSFER OF CAPACITY 12.12 For the purpose of this Agreement, Transfer of capacity (hereinafter called "Transfer") is the making available of all the right of use of the capacity being made available that is accorded to a Party by this Agreement to a third party without transferring the Party's other obligations and rights including the right of Transfer. 12.13 Transfer of a Party's Allocated Capacity to its Subsidiary or its Parent Company or the Subsidiary of the Party's Parent Company is allowed provided that the capacity transferred is in multiples of the MIU and that the recipient of the transferred capacity is a Carrier. 12.14 Transfer of a Party's Allocated Capacity to its Affiliate and/or the Affiliate of the Party's Parent Company is also allowed provided that the capacity transferred is in multiples of the MIU and that the recipient of the transferred capacity is a Carrier. For the Transfer to an Affiliate, the transferring party shall make a cash contribution to a special fund dedicated solely to fund future upgrades to increase the Equipped Capacity. The amount of the contribution is described in Annex 7. 12.15 The conditions applicable to the use and Transfer of capacity as specified in Annex 7 shall be relaxed after the Equipped Capacity is expanded to four (4) times of Initial Equipped Capacity or two (2) years after the RFS date whichever comes first unless an earlier date is approved by the Management Committee. Any relaxations on these conditions shall be approved by a vote of the members of the Management Committee representing at least seventy-five percent (75%) of the total voting interests as specified in Schedule B. 12.16 The Unallocated Capacity in the APCN 2 shall be owned by the Parties in common and undivided shares in accordance with the percentages in Schedule C. 12.17 IRU Capacity will be sold at the MJU level. Such IRU Capacity will be sold from the Unallocated Capacity. Proceeds from the sale of such IRU Capacity shall be used to fund the Expansion of the APCN 2 Equipped Capacity. 12.18 A Party or IRU purchaser may use its MIU with itself, another Party, or IRU purchaser to form matched circuits. 12.19 The distribution of capacity from the initial Unallocated Capacity shall be made no later than three (3) years from the RFS date on a pro rata basis, in MIUs, in accordance with the percentages in Schedule C. The exact time to implement such distribution of capacity 26 + + + + + + shall be decided by a vote of members of the Management Committee representing at least two-thirds (66.67%) of the total voting interests as specified in Schedule B. 12.20 Once the Equipped Capacity is expanded to six (6) times of Initial Equipped Capacity or three (3) years after the RFS date whichever comes first unless an earlier date is approved by the Management Committee, any Party is entitled to sell IRU to other Carriers from its Allocated Capacity on a private basis without any restrictions except that the IRU shall be for the life of APCN 2. The terms and conditions including pricing of such private IRU sales are bilateral matters between granting Party and purchaser. 12.21 When Unallocated Capacity is depleted, and during the period until the availability of additional Unallocated Capacity, a Party may be allowed to sell IRU to other Carriers from its Allocated Capacity privately subject to the Management Committee's approval on a case by case basis. The terms and conditions including pricing of such private IRU sales are bilateral matters between granting Party and purchaser. 12.22 Notwithstanding any other provisions in this Paragraph 12, when the Equipped Capacity is expanded to six (6) times of Initial Equipped Capacity or three (3) years after the RFS date whichever comes first, any Party is entitled to make available any of its Allocated Capacity for use by other Carriers on any commercial basis without any restrictions. 12.23 Guidelines for use of the IRU Capacity and Terms and Conditions of the IRU agreement shall be developed by the I&ASC and approved by a vote of members of the Management Committee representing at least two-thirds (66.67%) of the total voting interests as specified in Schedule B. The NA shall be authorized to execute IRU agreements for one or more whole MIUs with APCN 2 IRU Capacity purchasers on behalf of the Parties to this Agreement. No provisions of the IRU agreement shall override the provisions of this Agreement. 12.24 Schedules B, C, and D shall be modified by the NA, as appropriate, to reflect any revised ownership of capacity or sales of IRU Capacity pursuant to this Paragraph 12. 12.25 The Management Committee may authorize use of the Unallocated Capacity for restoration of telecommunications services and other purposes. The terms and conditions of such use shall be determined by the Management Committee based, in part, on terms to be agreed to by the relevant Terminal Parties of the APCN 2, in recognition of the technical and operational impact on the Terminal Station operations. Parties will receive revenues in accordance with Schedule C. 12.26 The communications capability of any capacity may be optimized by the Parties to whom such capacity is allocated by the use of equipment which will more efficiently use such capacity provided that the use of such equipment does not cause an interruption of, or interference, impairment, or degradation to, the use of any other capacity in the APCN 2 or prevent the use of similar equipment by other Parties. A Party to whom capacity is allocated shall permit the use of such equipment by a Carrier to which such Party has 27 + + + + + + made available the use of any such capacity, provided that such Carrier agrees that its use of the equipment will satisfy the conditions set forth in this Subparagraph 12.26. 12.27 A Party may sell capacity in fascicles smaller than a STM-1 in the APCN 2 at any time on any basis other than by transfer of ownership. The APCN 2 shall not be responsible for aggregating such capacity to the STM-1 level. 13. EXPANSION OF EQUIPPED CAPACITY 13.1 Any upgrade of Equipped Capacity of APCN 2, including any costs, financial adjustments and allocation of capacity associated with such upgrade, shall be approved by vote of members of the Management Committee representing at least two-thirds (66.67%) of the total voting interests as specified in Schedule B. 13.2 All Parties shall have the might to a pro-rata share of the upgrade capacity in accordance with Schedule C. However, no Party shall be forced to participate in such an upgrade. Parties not 14. INCREASE OR DECREASE OF DESIGN CAPACITY 14.1 In the event that the Initial Parties consider that it is beneficial to increase the Design Capacity of APCN 2, a Design Capacity expansion, including any costs, financial adjustments and allocation of capacity associated with such upgrade, shall be decided by the Management Committee representing at least two-thirds (66.67%) of the total voting interests as specified in Schedule B. However, no Party shall be forced to participate in such an upgrade, in the event that incremental funding is required to execute such an upgrade. Schedules B and C shall be appropriately modified to reflect the revisions associated with such increase of Design Capacity. 14.2 In the event that the capacity which APCN 2 or any Segment thereof is capable of providing is reduced below the capacity required to support the Allocated Capacity on its existing or planned routings as a result of physical deterioration, or for other reasons beyond the control of the Parties, the Management Committee shall initiate a review of the capacity routings, in order to support the rerouting of such Allocated Capacity. 14.3 In the event that the capacity which APCN 2 or any Segment thereof is capable of providing is lower than the capacity needed to support the routing of circuits assigned in APCN 2, the Allocated Capacity of the Parties may be reduced or changed as necessary and agreed by the Parties affected, and financial adjustments shall be made among the Parties, as necessary, on the terms and conditions to be agreed by the Management Committee. The Schedules shall be modified, as appropriate, to reflect the revised Allocated Capacity associated with such decrease of the Design Capacity. 28 + + + + + + 15. OBLIGATION TO PROVIDE TRANSITING FACILITIES TO EXTEND APCN2 CAPACITY TO EXTEND APCN 2 CAPACITY 15.1 The Terminal Parties shall use all reasonable efforts to provide and maintain or cause to be provided and maintained in working order for the duration of this Agreement, the necessary transit facilities within their respective Countries as may be reasonably required for extending capacity in the APCN 2 so as to provide connections to the other international cables' transmission facilities. 15.2 The facilities provided pursuant to Subparagraph 15.1 shall be suitable for extending capacity in the APCN 2 of all payload types as defined in Subparagraph 15.3 and shall be furnished and maintained on terms and conditions which shall be no less favorable than those granted to another Carrier for transmission facilities of similar type and quantity transiting the location involved. Such terms and conditions shall not be inconsistent with applicable governmental regulations in the Countries in which the facilities are located. 15.3 As required the Terminal Parties shall support payloads of STM-l, STM-4, STM-l6 and STM-64. 16. OBLIGATION TO CONNECT THE APCN 2 WITH INLAND SYSTEMS 16.1 The Parties shall, at their own expense, on or before the RFS Date, do or cause to be done, all such acts and things as may be necessary within its operating Country to provide and maintain throughout the period of this Agreement suitable connection of capacity from APCN 2 with appropriate inland communications facilities in its operating Country. 16.2 The Terminal Parties will provide connection to APCN 2 to other Carriers within their Countries on terms and conditions negotiated and agreed by the parties concerned. 17. DIRECT ACCESS TO NETWORK INTERFACE AND EQUAL ACCESS TO TERMINAL STATION 17.1 The Terminal Parties agree to confer the right of Direct Access at the Network Interface to each Party and all other Carriers that have received the Right of Use pursuant to Paragraph 12. The connection to the Network Interface at specific Terminal Stations shall be provided at a reasonable cost in accordance with the physical, engineering and any locally applicable arrangements between the Carriers accessing the Network Interface and the respective Terminal Parties at the Terminal Station. 17.2 Upon request by the Parties or the other Carriers, the Terminal Party shall enter into negotiation in good faith with these parties to agree the above arrangements in a timely manner. Any arrangements agreed upon shall be reasonable and non-discriminatory. 29 + + + + + + 17.3 The physical and engineering arrangements to be negotiated shall include all reasonable arrangements such as mid-span interconnection, equipment co-location (whether physical or virtual), or the sharing of Direct Access facilities by one or more Carriers in accordance with applicable commercial arrangements to be negotiated between the Terminal Party and the Carriers concerned. 17.4 The Terminal Parties shall not and hereby pledge not to impede or cause to impede any qualified Carriers in exercising their right of Direct Access hereby conferred, including but not limited to the negotiation between the non-Terminal Parties and Carriers for their own facilities to access their Allocated Capacity including for purpose of providing backhaul and transiting facilities. 18. DURATION OF AGREEMENT AND REALIZATION OF ASSETS 18.1 This Agreement shall become effective on the date and year first above written and shall continue in operation for at least an initial period of twenty-five (25) years following the RFS Date (hereinafter referred to as "initial Period") and shall be terminable thereafter by agreement of the Parties. However, any Party may terminate its participation in this Agreement at the end of the Initial Period or any time thereafter by giving not less than one (1) year's prior notice thereof, in writing, to the other Parties. 18.2 This Agreement may be terminated at any time during the Initial Period by agreement in writing of all the Parties. If unanimous agreement cannot be reached between all the Parties for the retirement of APCN 2 during its specified useful life, this subject matter shall be referred to the Management Committee for resolution in accordance with paragraph 3 but in this case a ninety percent (90%) majority of the total voting interests as specified in Schedule B is required. 18.3 After the Initial Period of twenty-five (25) years, decommissioning can be implemented by agreement of a number of Parties representing at least two-thirds (66.67%) of the voting interests specified in Schedule B. 18.4 If a Terminal Party terminates its participation in this Agreement pursuant to Subparagraph 18.1 of this Agreement after the Initial Period of twenty-five (25) years, the remaining Parties and the said Terminal Party will negotiate a reasonable agreement in order to ensure the continuous operation of the said Terminal Party's Terminal Station after the Initial Period. 18.5 Upon the effective date of termination of participation of a Party, Schedules of this Agreement shall be appropriately modified. The remaining Parties to this Agreement shall assume the obligations, capital, operation, and maintenance interests of the Party terminating its participation in proportion to their interests assigned immediately preceding such effective date of termination, except for the continuing rights and obligations of the terminating Party as specified in Subparagraph 18.7 of this Agreement. 30 + + + + + + No credit for capital costs will be made to a Party that terminates its participation in accordance with Subparagraph 18.1. 18.6 Upon decommissioning of the APCN 2, the Parties shall use all reasonable efforts to liquidate Segment S1, S2, S3, S4, S5, S6, S7, and S8 of the APCN 2, within one (1) year, by sale or other disposition between the Parties or any of them or by sale to other entities or persons; but no sale or disposition shall be effected except by agreement between or among the Parties to this Agreement at the time of decommissioning. In the event agreement cannot be reached, the decision will be carried on the basis of a simple majority vote of the total voting interests as specified in Schedule B. The net proceeds, or costs of decommissioning, removal, every sale or other disposition shall be divided between or among the Parties to this Agreement who have or were deemed to have interests in the subject thereof, in the proportions in which such Parties, interests are specified in Schedule B immediately preceding the time any Party terminates its participation in this Agreement. The Parties shall execute such documents and take such action as may be necessary to effectuate any sale or other disposition made pursuant to this Paragraph 18. 18.7 Unless the Management Committee shall otherwise determine, a Party's termination of its participation in this Agreement or the termination of this Agreement, pursuant to Subparagraph 18.1, shall not relieve that Party or the Parties hereto from any liabilities arising from events occurring before a Party's termination on account of claims made by third parties in respect of such facilities or any part thereof and damages or compensation payable on account of such claims, or obligations which may arise in relation to the APCN 2 due to any law, order or regulation made by any government or supranational legal authority pursuant to any international convention, treaty or agreement. Any such liabilities or costs incurred or benefits accruing in satisfying such obligations shall be divided among the Parties hereto in the proportions in which such Parties, interests are specified in Schedule B immediately preceding the time a Party terminates its participation in this Agreement or this Agreement is terminated pursuant to Subparagraph 18.1, whichever occurs first. 19. OBTAINING OF APPROVALS 19.1 The performance of this Agreement by the Terminal Parties is contingent upon the obtaining and continuance of such governmental approvals, consents, authorizations, licenses, and permits as may be required or be deemed necessary by the Terminal Parties and as may be satisfactory to them, and the Terminal Parties shall use all reasonable efforts to obtain and to have continued in effect such approvals, consents, authorizations, licenses, and permits. 19.2 The Terminal Parties shall make all reasonable efforts to handle matters relating to the obtaining and continuance of such governmental approvals, consents, authorizations, licenses, and permits for the Landing, construction and operation of APCN 2 in their respective Countries. 31 + + + + + + 19.3 In the event that any Terminal Party fails, or is likely to fail, to obtain such approvals, consents, authorizations, licenses or permits, that Terminal Party shall give immediate notice to the Management Committee for it to take appropriate action pursuant to this Agreement. 20. PRIVILEGES FOR DOCUMENTS OR COMMUNICATIONS In the event that the Management Committee decides to go to arbitration in accordance with Paragraph 27, each Party specifically reserves, and is granted by each of the other Parties, in any action, arbitration or other proceeding between or among the Parties or any of them in a country other than that Party's own country, the right of privileges, in accordance with the laws of the country in which the arbitration or litigation takes place with respect to any documents or communications which are material and pertinent to the subject matter of the action, arbitration or proceeding in which privilege could be claimed or asserted by that Party in accordance with those laws. 21. RELATIONSHIP OF PARTIES 21.1 The relationship among the Parties shall not be that of partners, and nothing herein contained shall be deemed to constitute a partnership among them. The common enterprise between and among the Parties shall be limited to the express provisions of this Agreement. The liability of the Parties shall be several and not joint or collective. 21.2 Each Patty agrees to indemnify each of the other Parties in respect of all costs, expenses, damages and demands, arising out of or in connection with any claim against, or liability of, the latter as an owner of APCN 2 where such claim is made by, or the liability is to, any third party not being a Party hereto and arises out of or in connection with APCN 2 provided that no indemnifying Party shall be obligated to contribute more than its share of liability as per Schedule B. Subject to there being no conflict of interest, each Party so indemnifying shall have the right, at its sole cost and expense, to observe but not directly participate in any discussions, meetings or conferences held prior to or during any settlement or legal proceedings resulting from any such claim or liability. 21.3 Under no circumstances shall any Party be liable to any other Party in contract, tort, (including negligence or breach of statutory duty) or otherwise for loss (whether direct or indirect) of profits, property, traffic, business or anticipated savings, or for any indirect or consequential loss or damage in connection with the operation of this Agreement howsoever caused. Such causes shall include (but not be limited to): (i) any delay in the provision of the APCN 2; (ii) any damage to, breakdown in or failure of the APCN 2; and (iii) any interruption of service, 32 + + + + + + whatever may be the reason or duration for such loss, damage or delay and for however long it shall continue. 22. ASSIGNMENT OF RIGHTS AND OBLIGATIONS 22.1 Except as otherwise provided in Paragraph 12 and Subparagraphs 22.2, 22.3, 22.4 and 22.5, during the term of this Agreement, no Party may assign, sell, transfer or dispose of the whole or any parts of its rights or obligations under this Agreement 22.2 A Party may at any time, with the prior written consent of the Management Committee, assign, sell or transfer the whole of its rights and obligations under this Agreement. The Management Committee must not unreasonably withhold or delay its approval. 22.3 A Party may at any time assign, sell or transfer the whole of' its rights and obligations under this Agreement to: (a) a successor of that Party; (b) a Parent Company of that Party; (e) a Subsidiary or Affiliate of that Party; and (d) another Subsidiary or Affiliate of that Party's Parent Company. 22.4 A Party (hereafter "Assignor") may assign, sell or transfer a portion of its rights under this Agreement to a Parent Company, its Subsidiary, and/or the Subsidiary of the Party's Parent Company (hereafter "Assignee"). Such partial assignment shall be allowed only once to any such Assignee, and shall not negate any of the obligations of the Assignor. If the Assignor is an Initial Party, then the Initial Party status of the Assignor shall be maintained and the Assignor's voting rights shall be shared with such Assignee. The relevant Schedules to this Agreement shall be revised to reflect each such partial assignment permitted hereunder, showing the Assignee as a Party. No subsequent assignment shall be effected by the Assignee except as provided in Subparagraph 22.3(a). 22.5 Without limiting the applicability of Subparagraph 22.4, a Party may assign its rights, title and interests in any portion of APCN 2 within the territorial limits of any Country (both under the current and any future configuration) to a Subsidiary, Parent Company or a Subsidiary of a Parent Company of that Party only if: a) the Assignee shall own and be responsible for the capital, operations and maintenance costs listed against the Party for that portion of APCN 2 within the territorial limits of any Country (both under the current and future configuration); the Party shall own and be responsible for the capital, operating and maintenance costs listed against the Party for the remainder of APCN 2; and b) the Assignee will have no tights and obligations independent from the rights and obligations of the Party in respect of the assigned portion of the APCN 2 33 + + + + + + The aforementioned provision shall not be used to circumvent the provisions under Paragraph 12. 22.6 A Party exercising its rights under Subparagraphs 22.2, 22.3, 22.4 or 22.5 must give notice in writing to all other Parties in a timely manner. 23. DEFAULT 23.1 If any Party fails to make any payment required by this Agreement on the date when it is due and such default continues for a period of at least one (1) month after the payment due date, the CBP shall notify the billed Party and also the Management Committee in writing of the status of the matter and will request the reclamation of capacity, as provided for in this Paragraph 23, if full payment is not received within two (2) months of such notification. If full payment is not received within such specified period, the Management Committee may reclaim the Capacity in the APCN 2 allocated to the billed Party. 23.2 The Management Committee shall consider any extenuating circumstances not within the specific control of the billed Party in determining whether or not to reclaim the capacity assigned to such billed Party. If the Management Committee nevertheless reclaims any capacity in the APCN 2 assigned to such defaulting Party, the defaulting Party shall not be entitled to any payment or credit for the reclaimed capacity. The Management Committee shall determine arrangements for disposition of any reclaimed capacity. All rights of a defaulting Party under this Agreement shall terminate as of the time all its capacity in the APCN 2 is reclaimed by the Management Committee; and concurrent with such reclamation of capacity, the defaulting Party will no longer be deemed to be a Party to this Agreement. Such reclamation shall not relieve the defaulting Party from its obligations under this Agreement, including but not limited to the payment of its unpaid accounts, which have been incurred prior to the actual reclamation. The defaulting Party is not entitled to any reimbursement of any amounts it had paid under this Agreement. In such circumstances, the Schedules shall be revised to reflect the default of a Party and the reallocation of interests pursuant to the arrangements determined by the Management Committee. 23.3 Notwithstanding Subparagraph 23.2, reclamation of a Terminal Party's capacity will not release the Terminal Party from providing, operating and maintaining its respective Terminal Station until a reasonable agreement is negotiated in order to ensure the continuous operation of the said Terminal Party's Terminal Station after reclamation of its capacity. 24. WAIVER The failure of any Party, on one or more occasions, to enforce any of the provisions of this Agreement or to exercise any right or privilege hereunder shall not thereafter be 34 + + + + + + construed as a waiver of any breach or default, or as a waiver of any such provision, right, or privilege hereunder. 25. COMPLIANCE WITH LAW In the performance of their obligations hereunder, the Parties agree to comply with all applicable laws of all Countries having jurisdiction over the activities performed under or stipulated by this Agreement. 26. RATIFICATION OF DECISIONS AND ACTIONS Each Party to this Agreement does hereby unconditionally ratify and accept as binding on it, its successors, permitted assigns or trustees all decisions and actions theretofore taken directly or indirectly by any other Party or Parties or any committee or Subcommittee or group pursuant to and in accordance with this Agreement. 27. RESOLUTION OF DISPUTES 27.1 If a dispute should arise under this Agreement between or among the Parties they shall make every reasonable effort to resolve such dispute. However, in the event that they are unable to resolve such dispute, the matter shall be referred to the Management Committee which shall either resolve the matter or determine the method, such as arbitration, by which the matter should be resolved. This procedure shall be the sole and exclusive remedy for any dispute which may arise under this Agreement between or among the Parties. The performance of this Agreement by the Parties shall continue during the resolution of any dispute. 27.2 If any difference shall arise between or among the Parties or any of them in respect of the interpretation or effect of this Agreement or any part or provision thereof or their rights and obligations thereunder, and by reasons thereof there shall arise the need to decide the question by what municipal or national law this Agreement or any part or provision thereof is governed, the following facts shall be excluded from consideration, namely that this Agreement was made in a particular country and that it may appear by reason of its form, style, language or otherwise to have been drawn preponderantly with reference to a particular system of municipal or national law; the intention of the Parties being that such facts shall be regarded by the Parties and in all courts and tribunals wherever situated as irrelevant to the question aforesaid and to the decision thereof. 28. SUPPLEMENTS AND AMENDMENTS TO THIS AGREEMENT 28.1 This Agreement shall not be amended, supplemented, or modified unless the Parties representing at least ninety percent (90%) of the voting interests specified in Schedule B 35 + + + + + + have indicated their approval in writing. The Chairman of the Management Committee must provide advance written notice, of at least thirty (30) days, to all Parties of the proposed amendment, supplement or modification and shall notify all Parties in writing once the required level of approval has been obtained and at least ten (10) days prior to execution of the amendatory or supplementary agreement 28.2 Each Party except SingTel and PLDT authorizes the Chairman of the Management Committee to execute on its behalf any amendatory or supplementary agreement implementing an amendment, supplement or modification approved under Subparagraph 28.1. SingTel and PLDT shall provide the Power of Attorney to the Chairman of the Management Committee to execute on its behalf any amendatory or supplementary agreement implementing an amendment, supplement or modification approved under Subparagraph 28.1 in a timely manner. 28.3 Subparagraphs 28.1 and 28.2 shall not apply to any Schedule or Annex modified in accordance with other provisions of this Agreement, and any Schedule or Annex so modified shall be deemed to be part of this Agreement in substitution for the immediately preceding version of that Schedule or Annex. 29. EXECUTION OF AGREEMENT 29.1 This Agreement and any Supplements and Amendments hereto shall be executed in one (1) original in the English language. Identical counterparts may be executed and when so executed shall be considered as an original. Such counterparts shall together, as well as separately constitute one and the same instrument. 29.2 The NA shall be the custodian of the original and will provide certified copies to Parties to this Agreement. 30. SUCCESSORS BOUND This Agreement shall be binding on the Parties, their successors, and permitted assigns. 31. CONFIDENTIALITY 31.1 All data and information that is acquired or received by any Party in connection with the APCN 2 in anticipation of or under this Agreement shall be held confidential and shall not be divulged in any way to any third party, without the prior approval of the Management Committee. 31.2 Notwithstanding Subparagraph 31.1, any Party may, without such approval, disclose such data and information to: 36 + + + + + + (i) the extent required by any applicable laws, or the requirements of any recognized stock exchange in compliance with its rules and regulations or in the case of a Party wholly owned by a sovereign government, by the rules of governance of the Party; or (ii) any government agency lawfully requesting such information; or (iii) any Court of competent jurisdiction acting in pursuance of its powers. 31.3 Any Party may disclose such data and information to such persons as may be necessary in connection with the conduct of the operations of the APCN 2 upon obtaining a similar undertaking of confidentiality from such persons to whom such information may be disclosed. 31.4 Each Party shall remain bound by the provisions of this Paragraph 31 during the period of this Agreement and for the period of five (5) years following termination of this Agreement. 32. SETTLEMENT OF CLAIMS BY PARTIES 32.1 If any Party is obliged by a final judgment of a competent tribunal or under a settlement approved by the Management Committee, to discharge any claim by a third party, including all costs and expenses associated therewith, resulting from the implementation of this Agreement, the Party which has discharged the claim shall be entitled to receive from the other Parties reimbursement in the proportions as set out in Schedule B. 32.2 If any claim is brought against a Party in connection with the APCN 2, the Party shall, as a condition of reimbursement under Subparagraph 32.1, give written notice thereof to the Management Committee as soon as practicable and shall not admit liability nor settle, adjust or compromise the claim without the approval of the Management Committee. 32.3 Before any Party brings a claim against any third party in respect of loss or damage to any part of the APCN 2, it shall first consult with the Management Committee and shall not settle, adjust, or compromise such a claim without the approval of the Management Committee. 32.4 Notwithstanding Subparagraphs 32.2 and 32.3, if the Management Committee issues any directions to a Party relating to the conduct of any such claim, then that Party must comply with those directions. 32.5 Costs, expenses, damages, or compensation payable to the Parties on account of claims made against third parties shall be shared by the Parties in the proportions as set out in Schedule B. 37 + + + + + + 32.6 Upon termination of this Agreement pursuant to Paragraph l8, the Parties shall not be relieved from any liabilities, costs, damages or obligations which may arise in connection with claims made by third parties with respect to the APCN 2, or any part thereof, or which may arise in relation to the APCN 2 due to any law, order or regulation made by any government or international convention, treaty or agreement. Any such liabilities, costs, damages or obligations shall be divided among the Parties in the proportions as set out in Schedule B. 33. FORCE MAJEURE If any Party cannot fulfill its obligations in this Agreement due to an event beyond its reasonable control, including, but not limited to lighting, flood, exceptionally severe weather, fire or explosion, civil disorder, war or military operations, national or local emergency, 35.2 This Agreement supersedes the MOU. Any liabilities which any Party has incurred arising out of or by virtue of the MOU shall be dealt with in accordance with the provisions of this Agreement. 38 + + + + + + TESTIMONIUM IN WITNESS WHEREOF, the Parties hereto have severally subscribed these presents or caused them to be subscribed in their names and on their behalf by their respective officers thereunto duly authorized. For and on behalf of Advantage Telecommunications Ltd. By: + + For and on behalf of Cable & Wireless Global Network Limited By: + + For and on behalf of Cable & Wireless HKT international Limited By: + + For and on behalf of China Telecom By: + + 39 + + + + + + For and on behalf of China United Telecommunications Corporation By: + + For and on behalf of Chunghwa Telecom Co., Ltd., By: + + For and on behalf of Concert Global Network Services, Ltd. By: + + For and on behalf of Global One Communications Network, Inc. + + + + By: + + For and on behalf of Japan Telecom Co., Ltd. + + + + By: + + 40 + + + + + + For and on behalf of KDD Corporation + + + + By: + + For and on behalf of Korea Telecom + + + + By: + + For and on behalf of KPN Telecom B.V. + + + + By: + + For and on behalf of Layer 2 Communications Group Ltd. + + + + By: + + For and on behalf of MCI International Telecommunications. Inc. + + + + By: + + 41 + + + + + + For and on behalf of Metromedia Fiber Network Services, Inc. + + + + By: + + For and on behalf of New Century InfoComm Ltd., Preparatory Office By: + + For and on behalf of NTT Communications Corporation + + + + By: + + For and on behalf of Onelink Cable Network Limited + + + + By: + + By: + + For and .on behalf of Philippine Long Distance Telephone Company By: + + 42 + + + + + + For and on behalf of Singapore Telecommunications Limited + + + + By: + + For and on behalf of StarHub Pte Ltd + + + + By: + + For and on behalf of Taiwan Fixed Network Co., Ltd. Preparatory Office + + + + By: + + For and on behalf of Teleglobe USA Inc. + + + + By: + + For and on behalf of Telekom Malaysia Berhad (128740-P) + + + + By: + + 43 + + + + + + For and on behalf of Telstra Global Networks Limited By: + + For and on behalf of Williams Communications, Inc., By: + + For and on behalf of APT Satellite Telecommunications Limited By: + + For and on behalf of Bayan Telecommunications, Inc. + + + + By: + + 44 + + + + + + For and on behalf of China Netcom Corporation Ltd. + + + + By: + + For and on behalf of The Communications Authority of Thailand + + + + By: + + For and on behalf of CTI International Limited + + + + By: + + For and on behalf of Dacom Corporation + + + + By: + + For and on behalf of edge2net Inc. + + + + By: + + 45 + + + + + + For and on behalf of Eastern Telecommunications Philippines, Incorporated By: + + For and on behalf of Global Access Ltd. + + + + By: + + For and on behalf of Globe Telecom, Inc. + + + + By: + + For and on behalf of GNG Networks. Inc. + + + + By: + + For and on behalf of GTE Intelligent Network Service Incorporated By: + + 46 + + + + + + For and on behalf of PT Indosat (Persero) Tbk + + + + By: + + For and on behalf of Maxis International Sdn. Bhd + + + + By: + + For and on behalf of New World Telephone Limited + + + + By: + + For and on behalf of NTT Com Asia Ltd. + + + + By: + + For and on behalf of Onse Telecom Corporation + + + + By: + + 47 + + + + + + For and on behalf of Telia AB (publ) + + + + By: + + For and on behalf of TT dotCom Sdn Bhd + + + + By: + + 48 \ No newline at end of file diff --git a/full_contract_txt/TELKOMSALTD_01_30_2003-EX-10-LICENCE AND MAINTENANCE AGREEMENT.txt b/full_contract_txt/TELKOMSALTD_01_30_2003-EX-10-LICENCE AND MAINTENANCE AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..b7cd0bc062384ff1fc40c27bd62e5e5710e0bf54 --- /dev/null +++ b/full_contract_txt/TELKOMSALTD_01_30_2003-EX-10-LICENCE AND MAINTENANCE AGREEMENT.txt @@ -0,0 +1,273 @@ +-1 - TELKOM CONTRACT No. 076C/01 LICENCE AND MAINTENANCE AGREEMENT entered into by and between SYSTEMS APPLICATIONS PRODUCTS (AFRICA) (PTY) LIMITED ("SAP AFRICA") a company incorporated in accordance with the laws of the Republic of South Africa with offices at SAP Business Park, 1 Woodmead Drive, Woodmead, Sandton and TELKOM SOUTH AFRICA LIMITED ("TELKOM") a company incorporated in accordance with the laws of the Republic of South Africa with its head office at 152 Proes Street, Pretoria + + + +- 2 - TELKOM CONTRACT No. 076C/01 1. RECORDAL It is recorded that: 1. 1. SAP AFRICA wishes to grant to TELKOM and TELKOM wishes to accept from SAP AFRICA a licence to use the SOFTWARE (as defined in clause 2. 3. 11), upon the terms and conditions hereinafter set forth. 1. 2. The SOFTWARE to be licensed in terms hereof will enable TELKOM to establish, manage and operate an Internet-based business platform for TELKOM'S e- commerce exchange, that is, a "Marketplace" as defined in clause 3. 9. 1. 3. The parties record their agreement in this document that, upon signature by the party signing last in time, shall supercede and prevail over all other arrangements and agreements between them as to its subject matter. 2. INTERPRETATION AND DEFINITIONS In this AGREEMENT: 2. 1. clause headings are for convenience and shall not be used in its interpretation; 2. 2. unless the context clearly indicates a contrary indication - 2. 2. 1. an expression which denotes - 2. 2. 1. 1. any gender includes the other genders; 2. 2. 1. 2. a natural person includes an artificial person and vice versa; 2. 2. 1. 3. the singular includes the plural and vice versa; + + + +- 3 - TELKOM CONTRACT No. 076C/01 2. 3. the following expressions shall bear the meanings assigned to them below and cognate expressions bear corresponding meanings - 2. 3. 1. "AFFILIATE" means a company located in the TERRITORY that is a subsidiary of TELKOM as defined in the Companies Act of 1973, as amended, provided that should any such entity cease, for whatever reason, to be a subsidiary of TELKOM, then it shall ipso facto cease to be an AFFILIATE for the purposes of this AGREEMENT and the provisions of clause 6. 4 shall apply to such entity; 2. 3. 2. "BUSINESS THIRD PARTIES" means those persons or entities who are authorised by TELKOM to access and/or USE the SOFTWARE in terms of formal arrangements that TELKOM has with such persons or entities; 2. 3. 3. "COMMERCE ONE INC. " means a company incorporated in accordance with the Laws of Switzerland with its head offices in Zurich; 2. 3. 4. "DESIGNATED SITE" means those facilities of TELKOM located in the TERRITORY in which one or more DESIGNATED UNITS are located and which initially is/are defined in annexure 1 to this AGREEMENT or, for additional DESIGNATED SITES, as may be agreed upon in writing by the parties; 2. 3. 5. "DESIGNATED UNIT" means an individual computer server located at a DESIGNATED SITE upon which the SOFTWARE is installed. Each DESIGNATED UNIT must be approved by SAP AFRICA as compatible with the SOFTWARE and must be identified in annexure 1 hereto or, for additional DESIGNATED UNITS as may be agreed upon in writing by the parties; + + + +- 4 - TELKOM CONTRACT No. 076C/01 2. 3. 6. "DOCUMENTATION " means SAP AFRICA's standard DOCUMENTATION in machine readable format in any medium that is delivered to TELKOM under this AGREEMENT, including SAP AFRICA's standard manuals, program listings, data models, flow charts, logic diagrams, input and output forms, functional specifications, instructions and complete or partial copies of the aforegoing; 2. 3. 7. "PROGRAM CONCEPTS" means the concepts, techniques, ideas and know-how embodied and expressed in any computer programs or modules included in the SOFTWARE, including the structure, sequence and organisation of such programs and modules; 2. 3. 8. "PROPRIETARY INFORMATION" means: - 2. 3. 8. 1. with respect to SAP AFRICA, the SOFTWARE and DOCUMENTATION and any complete or partial copies thereof, the PROGRAM CONCEPTS and any other information identified or reasonably identifiable as confidential and PROPRIETARY INFORMATION of SAP, SAP AG, or each of their respective licensors, whether marked with proprietary legend or not ("SAP AFRICA'S PROPRIETARY INFORMATION"); 2. 3. 8. 2. with respect to TELKOM, information identified or reasonably identifiable, as the confidential and PROPRIETARY INFORMATION of TELKOM, whether marked with proprietary legend or not ("TELKOM's PROPRIETARY INFORMATION"), excluding any part of the SAP's or TELKOM's PROPRIETARY INFORMATION which: - + + + +- 5 - TELKOM CONTRACT NO. 076C/01 2. 3. 8. 2. 1. is, or becomes, publicly available through no act or failure of the other party; or 2. 3. 8. 2. 2. was or is rightfully acquired by the other party from a source other than the disclosing party prior to receipt from the disclosing party; or 2. 3. 8. 2. 3. becomes independently available to the other party as a matter of right; 2. 3. 9. "RELEASE" means each issue of the SOFTWARE by SAP AG and its licensors that incorporates the most recent technological functionality and is identified by the numeral to the left of the decimal point (e. g. 2. 0); 2. 3. 10. "SAP AG" means SAP Aktiengesellschaft Systeme, Anwendungen, Produkte in der Datenverarbeitung, a German corporation, with its head office located in Walldorf, Germany. For the purposes of this AGREEMENT, and if required by the context, the phrase "SAP AG" shall be deemed to include its licensors, particularly, COMMERCE ONE INC.. Inc, a company incorporated in accordance with the laws of Switzerland with its head office at Zurich, Switzerland; 2. 3. 11. "SOFTWARE" means: 2. 3. 11. 1. the SOFTWARE specified in annexure 1 hereto, in machine - or human - readable form that is licensed to TELKOM hereunder; 2. 3. 11. 2. any RELEASES, VERSIONS or correction levels of the SOFTWARE; and + + + +- 6 - TELKOM CONTRACT No. 076C/01 2. 3. 11. 3. any complete or partial copies or replacements of any of the aforegoing; 2. 3. 11. 4. "TERRITORY" means, for the purposes of USING the SOFTWARE, all countries in. AFRICA; 2. 3. 11. 5. "THIRD-PARTY DATABASE" means a third party proprietary database or databases or portions thereof that are listed in annexure 1 and such other THIRD PARTY DATABASES that TELKOM may require in the future; 2. 3. 11. 6. "TRANSACTION USE" means USE including remote USE and access to the SOFTWARE by any method by TELKOM or third parties which results in a transaction as measured by the processor incorporated in the SOFTWARE; 2. 3. 11. 7. "USE" means to load, execute, employ, utilise, access, store process information that results in TRANSACTION USE or display of the SOFTWARE within the TERRITORY. USE is deemed to occur where any such USE occurs by TELKOM, its AFFILIATES or their respective employees or BUSINESS THIRD PARTIES authorised by TELKOM in terms of formal arrangements, to USE the SOFTWARE and, for the purposes of this AGREEMENT, TELKOM shall permit the SOFTWARE to be USED only within the TERRITORY; 2. 3. 11. 8. "VERSIONS" means each issue of each RELEASE of the SOFTWARE developed by SAP AG, or its licensors, which has incorporated further development work within the technology of that RELEASE. + + + +- 7 - TELKOM CONTRACT No. 076C/01 2. 4. Any reference to any legislation is to such legislation at the signature date as amended or re-enacted from time to time. 2. 5. All schedules and annexures to this AGREEMENT shall be deemed to be incorporated in, and form part of, this AGREEMENT. 2. 6. If any of the aforesaid definitions contains a substantive provision, effect shall be given thereto as if it were contained in the body of this AGREEMENT. 2. 7. Where any time period is stipulated in days, then same shall exclude Saturdays, Sundays and all statutory public holidays provided that any reference in annexure 2 to "days", shall include Saturdays, Sundays and statutory public holidays. 2. 8. Should any provision contain a provision for the benefit of a third party, whether named or not, then such third party shall be entitled to accept the benefits conferred in terms thereof, within 30 days of being notified of such benefit. It is recorded for the avoidance of doubt that the provisions of this AGREEMENT shall not in the normal course, be disclosed other than to the parties hereto and their respective employees. 3. LICENSE 3. 1. Subject to the provisions of this AGREEMENT, and with effect from the date when the party signing last in time appends its signature to this agreement ("the effective date"), and enduring in perpetuity unless terminated as provided for elsewhere in this AGREEMENT, SAP AFRICA grants, and TELKOM accepts a non-exclusive, non-transferable licence to USE the SOFTWARE, DOCUMENTATION and other SAP AFRICA PROPRIETARY INFORMATION at the specified DESIGNATED SITE within the TERRITORY. + + + +- 8 - TELKOM CONTRACT NO. 076C/01 3. 2. TELKOM agrees that, subject to the provisions of clause 3. 9, the license granted in terms hereof does not permit TELKOM to: 3. 2. 1. USE the SOFTWARE and THIRD-PARTY DATABASE in a manner that allows access to, and USE, (including TRANSACTION USE) directly or indirectly, to the SOFTWARE by third parties (other than BUSINESS THIRD PARTIES), whether on TELKOM'S hardware or otherwise; or 3. 2. 2. sublicense the SOFTWARE to any person or entity in a manner that allows such person or entity to provide the same or similar services as those provided by TELKOM utilising the SOFTWARE alone. 3. 3. TELKOM shall install the SOFTWARE only on the DESIGNATED UNIT located at the DESIGNATED SITE as agreed to by the parties in annexure 1 hereto. TELKOM further agrees to USE the SOFTWARE only in accordance with the DOCUMENTATION or as may otherwise be agreed in writing by SAP AFRICA, which may not be unreasonably withheld. TELKOM may connect multiple application servers to each DESIGNATED UNIT and connect a network of computer terminals and workstations to the application servers. TELKOM may install the software on another DESIGNATED UNIT for disaster recovery and business continuity purposes. It is recorded for the avoidance of doubt that TELKOM shall not be entitled to install the SOFTWARE on another DESIGNATED UNIT or other hardware situated at another site within the TERRITORY for the purposes of establishing and operating a Marketplace as defined in clause 3. 9. 3. 4. TELKOM may transfer the SOFTWARE from one DESIGNATED UNIT to another at a licensed DESIGNATED SITE upon prior written notice to SAP AFRICA. The + + + +- 9 - TELKOM CONTRACT No. 076C/01 SOFTWARE must be deleted in its entirety within 90 days from such transfer from the DESIGNATED UNIT no longer in use. 3. 5. If TELKOM is unable to use the SOFTWARE on a DESIGNATED UNIT because of conditions beyond its control, TELKOM may temporarily install the SOFTWARE on other equipment located within the TERRITORY until such condition is corrected, provided that TELKOM shall ensure that: 3. 5. 1. the temporary installation shall not impair TELKOM'S ability to prevent any third party's USE of the SOFTWARE; and 3. 5. 2. TELKOM shall notify SAP AFRICA in writing within 30 days of the location of such temporary installation. 3. 6. TELKOM is licensed to install at the DESIGNATED SITE no more than 1 (one) copy of the SOFTWARE on the DESIGNATED UNIT utilised for testing and backup purposes The DESIGNATED UNIT utilised for testing and backup purposes of the SOFTWARE, must be of the same type as those used at the DESIGNATED SITE for USE. Only 1 (one) copy of the SOFTWARE is licensed for USE on the DESIGNATED UNIT at the DESIGNATED SITE, unless otherwise agreed upon in writing by SAP AFRICA. 3. 7. Subject to the provisions of the Escrow Agreement embodied in annexure 3 hereto, TELKOM shall have no right to claim or to be supplied with the basis source code or the production and maintenance DOCUMENTATION for the SOFTWARE, except as may otherwise be agreed in writing by the parties hereto and by SAP AG. + + + +- 10 - TELKOM CONTRACT NO. 076C/01 3. 8. Unless agreed by the parties to the contrary, TELKOM may only USE the program modules referred to in the definition of SOFTWARE even if TELKOM is technically able to USE other modules from the SOFTWARE supplied. 3. 9. It is recorded that the SOFTWARE licensed in terms of this AGREEMENT, and its functionality, enables, and is to be USED to establish, operate and administer a central Internet/Web based market or "e-commerce exchange" ("a Marketplace"), for USE by TELKOM, it's employees and BUSINESS THIRD PARTIES for the purposes of: 3. 9. 1. buying or selling, or offering to buy or sell, products and/or services; 3. 9. 2. providing or being supplied with, or offering to provide or supply, information and/or accessing or USING the SOFTWARE or any functionality thereof to TELKOM or to each other, that may or may not result in TRANSACTION USE. Accordingly, TELKOM is entitled to access and USE the SOFTWARE and to allow access to, and USE of, the SOFTWARE for such purposes and within such functionality. 3. 10. TELKOM and its AFFILIATES shall only allow USE of the SOFTWARE and SAP PROPRIETARY INFORMATION by their respective employees, authorised representatives and persons and entities authorised by TELKOM in terms of formal arrangements and who are required as part of such arrangements to assist TELKOM or an AFFILIATE, to USE or enhance the USE of TELKOM'S or an AFFILIATE'S USE of the SOFTWARE. 3. 11. Unless the parties should agree otherwise, TELKOM may make 1 (one) copy of the SOFTWARE at the DESIGNATED SITE for archival purposes and such number of backup copies of the SOFTWARE consistent with TELKOM'S normal periodic backup procedures. Such copies must be held in a safe place for use + + + +- 1 1 - TELKOM CONTRACT No. 076C/01 only in the event of the SOFTWARE in regular use being rendered unusable or inoperable. TELKOM shall notify SAP AFRICA should TELKOM need to USE such backup or archival copy/ies. 3. 12. The DOCUMENTATION and SAP AFRICA PROPRIETARY INFORMATION may not be copied by TELKOM except for USE by TELKOM or AFFILIATE. 3. 13. TELKOM shall not alter or erase SAP AFRICA's, SAP AG's and any of their respective licensors' copyright, trademark, service marks, logos and other proprietary notices on any complete or partial copies of the SOFTWARE, DOCUMENTATION or SAP AFRICA's PROPRIETARY INFORMATION. 3. 14. It is recorded that the SOFTWARE requires those THIRD-PARTY DATABASES listed in annexure 1 which, unless the parties should agree otherwise, shall be acquired and licensed by TELKOM directly from THIRD-PARTY DATABASE licensors approved by SAP AFRICA, which approval shall not unreasonably be withheld. SAP AFRICA confirms that the SOFTWARE shall perform and conform to its functional specifications on all THIRD-PARTY DATABASES in respect of which it has given its approval aforesaid. Accordingly, the licence granted in terms of this AGREEMENT, shall be restricted to such extent if any, required to implement those restrictions imposed on TELKOM directly by such THIRD- PARTY DATABASE licensors. This AGREEMENT and the license granted in terms hereof shall be suspended, if for any reason: 3. 14. 1. TELKOM fails to obtain and/or maintain a licence from SAP AFRICA or such THIRD PARTY DATABASE licensor; or 3. 14. 2. TELKOM'S database licence/s terminates prior to the termination of this AGREEMENT and is not replaced with a suitable alternative. + + + +-12- TELKOM CONTRACT No. 076C/01 3. 15. It is recorded for the avoidance of doubt that, provided TELKOM is receiving and paying for Maintenance Service as contemplated in clause 9, SAP AFRICA shall provide Maintenance Services in accordance with the provisions of clause 9 and annexure 2, in respect of the third party software that is licensed by SAP AFRICA to TELKOM in terms of this AGREEMENT provided that SAP AFRICA shall not provide such Maintenance Services in respect of any THIRD PARTY DATABASE software that is not licensed in terms of this AGREEMENT. 4. DELIVERY AND INSTALLATION 4. 1. Delivery: SAP AFRICA shall deliver 1 (one) copy of the SOFTWARE and the DOCUMENTATION, in machine-readable format to TELKOM'S DESIGNATED 1SITE within 4 (four) weeks from the effective date ("delivery"). The DOCUMENTATION shall be delivered in the language version requested by TELKOM provided that such language version is commercially available. 4. 2. Installation and Support Services: 4. 2. 1. unless agreed otherwise in writing, TELKOM shall be responsible for installation of the SOFTWARE. TELKOM shall be responsible for configuring and installing any required disk storage systems, network software, application servers, DESIGNATED UNITS and computer terminals and workstations prior to installation of the SOFTWARE. It is recorded that upon TELKOM's request and on terms to be agreed upon separately, in writing, SAP AFRICA will provide installation services, pre- installation support, installation support, configuration, training and consulting services in respect of the SOFTWARE; + + + +- 1 3 - TELKOM CONTRACT NO. 076C/01 4. 2. 2 TELKOM shall test each module of the SOFTWARE extensively in its live business environment to determine that it appears to be free of any major defects and that it is suitable for TELKOM's application before TELKOM USES the SOFTWARE within and for the benefit of its business. 4. 3. TELKOM shall be entitled to utilise or operate the SOFTWARE on different operating software for no additional licence fee or consideration but TELKOM shall be liable for any installation, configuration or other costs incurred in changing such operating software. 5. LICENSE AND REVENUE SHARING FEES AND PAYMENT TERMS 5. 1. Licence Fee: In consideration for the licence granted hereunder, TELKOM shall pay to SAP AFRICA the licence fee as stipulated in annexure 1 ("the Licence Fee"). The Licence Fee is priced in US dollars ("USD"). Forthwith after the effective date, SAP AFRICA shall invoice TELKOM for payment of the License Fee. SAP AFRICA shall convert the agreed License Fee, expressed in USD, into ZAR using the USD: ZAR rate of exchange ruling at the close of business on the day immediately preceding the date of invoice. For the purposes of this AGREEMENT, the "ruling rate" shall be the "buy" rate for USD's offered by SAP AFRICA'S bankers on that day. The Licence Fee expressed in ZAR as aforesaid, shall be paid by TELKOM within 30 days of receipt by TELKOM of the invoice. 5. 2. In addition to the Licence Fee, TELKOM shall pay to SAP AFRICA an amount equal to that percentage stipulated in 5. 3 ("the REVENUE SHARE PERCENTAGE"), of TELKOM'S total gross revenue that TELKOM earns or derives from commercial exploitation of the SOFTWARE licensed in terms hereof. + + + +-14 - TELKOM CONTRACT No. 076C/01 ("the REVENUE SHARE FEE"). For the purposes of calculating the REVENUE SHARE FEE payable to SAP AFRICA, " the total gross revenue" earned or derived by TELKOM from the USE of the SOFTWARE: 5. 2. 1. shall exclude: 5. 2. 1. 1. VAT and other Government taxes raised on such revenue; 5. 2. 1. 2. any credits, if any, that TELKOM may grant on a formal basis, to a BUSINESS THIRD PARTIES; 5. 2. 1. 3. royalties or fees that may be payable by TELKOM to a bona fide third party who provides, in terms of formal arrangements with TELKOM, additional functionality, enhancement or value add services to, or in respect of, the SOFTWARE; any revenue earned or derived by TELKOM pursuant to TELKOM providing goods and/or services in a manner that does not USE the SOFTWARE; and 5. 2. 1. 4. any other type of cost or charge that SAP AFRICA and TELKOM may expressly agree shall be excluded; 5. 2. 2. shall include the following amounts payable to TELKOM by BUSINESS THIRD PARTIES for: 5. 2. 2. 1. all charges and fees for accessing the Marketplace, any value add services, any information, access to, or USE of, the SOFTWARE; 5. 2. 2. 2. regular or once - off subscription fees for access to, or USE of, the SOFTWARE, or the Marketplace or any information in respect thereof; + + + +-15- TELKOM CONTRACT No. 076C/01 5. 2. 2. 3. value add services that SAP AFRICA and it's licensors may provide to TELKOM and/or BUSINESS THIRD PARTIES USING, or in respect of, the SOFTWARE and/or the Marketplace; 5. 2. 2. 4. value added services that TELKOM may provide to BUSINESS THIRD PARTIES USING or in respect of the SOFTWARE and/or the Marketplace; and 5. 2. 2. 5. any other fee or charge that TELKOM and SAP AFRICA may in the future agree, should be included in the total gross revenue. Where REVENUE SHARE is levied from a Net Market Maker connected to the TELKOM Marketplace, then, the cumulative REVENUE SHARE shall not exceed the REVENUE SHARE PERCENTAGE. 5. 3 For the period commencing from the effective date and ending February 2002, the REVENUE SHARE PERCENTAGE shall be 10%. For the financial year commencing 01 March 2002 and thereafter until agreed otherwise, the REVENUE SHARE PERCENTAGE shall be 10% provided that should the percentage of TELKOM'S direct and indirect procurement expenditure that is transacted USING the SOFTWARE equal those percentage ranges stipulated below, then, the REVENUE SHARE PERCENTAGE shall be decreased to the corresponding percentage: Percentage of TELKOM'S procurement USING SOFTWARE Between 60% and 79% 80% or greater 9% 8% + + + +- 1 6 - TELKOM CONTRACT No. 076C/01 5. 4 The REVENUE SHARE FEE shall be payable quarterly in arrears 45 days after the end of each quarter for the duration of this AGREEMENT. 5. 5 Should TELKOM fail to pay the REVENUE SHARE FEE, such failure shall not effect TELKOM'S rights to USE the SOFTWARE but SAP AFRICA shall be entitled to separately claim such payments from TELKOM as provided for hereinabove. 5. 6 TELKOM shall keep accurate records and accounts as are reasonably necessary to verify TELKOM'S compliance with its' obligations in respect of the REVENUE SHARE FEE. For the duration of this AGREEMENT, TELKOM shall within 3 months after expiry of its financial year - end furnish to SAP AFRICA a certificate by TELKOM'S auditors, certifying the gross revenue earned by TELKOM or derived by TELKOM as calculated in accordance with clause 5. 2. SAP AFRICA shall repay to TELKOM or TELKOM shall pay to SAP AFRICA, as the case may be, any overpayment or underpayment respectively. 5. 7 Referral Fees TELKOM shall be entitled for the duration of this AGREEMENT, to market, at prices and on terms and conditions determined by SAP AFRICA and its licensors as being applicable to potential buyers. Should TELKOM be the effective cause of the sale and licensing to any person or entity, of the following products, then TELKOM shall be entitled to receive from the licensor of such product, a referral fee equal to 10 % of the agreed license fee of each such product: 5. 7. 1 Net Market Maker; 5. 7. 2 Enterprise Buyer (Professional); and/or 5. 7. 3 Private Exchange. + + + +-17- TELKOM CONTRACT No. 076C/01 5. 8 TELKOM shall invoice and recover from the licensee of such products the full license fee thereof and TELKOM shall pay to SAP Africa an amount equal to such license fee less the aforesaid referral fee. 5. 9 The Revenue Share Fee and other related commercial terms of this AGREEMENT shall be reviewed to market by the parties upon each anniversary of this AGREEMENT in an endeavour to agree upon any increases or decreases thereto. The parties acknowledge that the market for the SOFTWARE in South Africa is limited and that therefor it may be difficult to ascertain market conditions for the purposes of reviewing such commercial terms. Accordingly, the parties shall take cognisance of market conditions in other countries where the SOFTWARE is being used. Should the parties be unable to agree upon any such amendments within 30 days from the end of each year if any, then such dispute shall be referred for determination by the Arbitration Foundation of Southern Africa ("AFSA") in accordance with the rules of AFSA and to an arbitrator appointed by the Chairperson of AFSA upon application by either party. Except in the case of manifest error, the arbitrators' ruling shall be final and binding upon the parties but shall be without prejudice to a party's other rights and obligations arising from the AGREEMENT. 6. DURATION AND TERMINATION 6. 1. Duration: The licence granted hereunder shall become effective upon execution of this AGREEMENT by both parties and shall endure indefinitely unless terminated under clause 6. 2. + + + +-18 - TELKOM CONTRACT No. 076C/01 6. 2. Termination: This AGREEMENT and the licence granted hereunder shall terminate should any of the following events occur: 6. 2. 1. 30 (thirty) days after TELKOM gives SAP AFRICA written notice of TELKOM's wish to terminate this AGREEMENT for any reason. Any such termination shall be subject to accrued rights and obligations but only after payment of all Licence and Maintenance Fees then due and owing; or 6. 2. 2. Subject to the provisions of this AGREEMENT, should either party ("the defaulting party") breach a material obligation arising from this AGREEMENT and remain in breach, notwithstanding receipt of written notice from the other party ("the innocent party") affording the defaulting party 20 days to remedy its breach, then the innocent party shall be entitled to terminate this AGREEMENT alternatively, to claim specific performance of the defaulting party's obligations without prejudice to the innocent party's rights to claim damages for such breach. 6. 3. No Refund: Subject to, and without prejudice to, the provisions of clauses 6. 2. 2, 10 and 11, should this AGREEMENT be terminated for whatever reason, then TELKOM shall not be entitled to any refund of any of the Licence Fee payments or portions thereof made by TELKOM other than Maintenance Fees that may have been paid in advance. 6. 4. Duties upon Termination: + + + +- 19 - TELKOM CONTRACT NO. 076C/01 Upon any termination hereunder, TELKOM and its AFFILIATES shall immediately cease USE of the SOFTWARE, DOCUMENTATION, THIRD-PARTY DATABASE and other SAP AFRICA PROPRIETARY INFORMATION and shall irretrievably delete and remove such items from all DESIGNATED UNITS, application servers, computer terminals, workstations, data files and DESIGNATED SITES. Within 30 (thirty) days after any termination, TELKOM shall deliver to SAP AFRICA, at the latter's expense, (adequately packaged and insured for safe delivery) or, at SAP AFRICA'S request, destroy, all copies of SAP AFRICA's PROPRIETARY INFORMATION in every form. TELKOM shall irretrievably erase the SOFTWARE, and DOCUMENTATION, from any THIRD-PARTY DATABASE and SAP AFRICA's PROPRIETARY INFORMATION from any storage media. TELKOM agrees that an officer of TELKOM with the express authority to make such a representation, shall certify in writing to SAP AFRICA that it and each of its AFFILIATES has performed the foregoing. Within 3 months after any termination, SAP AFRICA shall at its' cost return TELKOM'S PROPRIETARY INFORMATION to TELKOM. 7. PROPRIETARY RIGHTS 7. 1. TELKOM acknowledges that ownership of and title in and to all intellectual property rights, including patent, trademark, service mark, copyright and trade secret rights in SAP'S AFRICA'S PROPRIETARY INFORMATION are and shall remain vested in SAP AFRICA and SAP AG and their respective licensors. TELKOM acquires only the right to USE the SOFTWARE, SAP AFRICA'S PROPRIETARY INFORMATION under the terms and conditions of this AGREEMENT and does not acquire any ownership, rights or title in or to the SOFTWARE nor to SAP AFRICA'S PROPRIETARY INFORMATION. + + + +- 20 - TELKOM CONTRACT NO. 076C/01 7. 2. TELKOM shall not itself, nor through any third party copy, translate, disassemble, or decompile, nor create or attempt to create, by reverse engineering or otherwise, the source code from the object code of the SOFTWARE licensed hereunder or use it to create a derivative work. 7. 3. TELKOM shall not remove any proprietary, copyright, trademark, or service mark legend from the SOFTWARE, DOCUMENTATION or SAP AFRICA'S PROPRIETARY INFORMATION. 7. 4. TELKOM shall maintain a log of the number and location of all originals and copies of the SOFTWARE. The inclusion of a copyright notice on any portion of the SOFTWARE, DOCUMENTATION or SAP AFRICA'S PROPRIETARY INFORMATION shall not cause, or be construed to cause, it to be a published work. 7. 5. Subject to the provisions of clause 8. 1 that expressly provide otherwise, all modifications and extensions to the SOFTWARE and DOCUMENTATION shall be considered part of the SOFTWARE and DOCUMENTATION for purposes of this clause 7. 7. 6. In order to protect the rights of SAP AFRICA and its licensors and TELKOM, in and to their respective PROPRIETARY INFORMATION, SAP AFRICA and TELKOM agree that neither party shall, without the other party's prior written consent, disclose, provide, or make available any of the PROPRIETARY INFORMATION of the other party in any form to any person, except to bona fide employees, officers, directors, or consultants of such party whose access is necessary to enable such party to exercise its rights hereunder. Each party agrees that prior to disclosing any PROPRIETARY INFORMATION of the other party to any such other person, it will obtain from such other person, a written + + + +- 21 - TELKOM CONTRACT NO. 076C/01 acknowledgement that he will be bound by the same terms as specified in this clause 7 with respect to the either party's PROPRIETARY INFORMATION. 7. 7. TELKOM and SAP AFRICA acknowledge that any disclosure to third parties of PROPRIETARY INFORMATION may cause immediate and irreparable harm to the owner of the disclosed PROPRIETARY INFORMATION. Accordingly, each party agrees to take all reasonable steps and the same protective precautions and measures to protect the other party's PROPRIETARY INFORMATION from disclosure to third parties as it would take with its own proprietary and confidential information. 8. MODIFICATIONS AND EXTENSIONS: 8. 1. TELKOM may make modifications and extensions to the SOFTWARE for use on the DESIGNATED UNIT(S) under the terms set forth in this clause 8. 8. 2. In the event that TELKOM develops any extension or modification (hereinafter referred to as "TELKOM extension" or "TELKOM modification") to the SOFTWARE, TELKOM shall have all rights, title and interest in such TELKOM extension or TELKOM modification subject to SAP AFRICA'S rights in the SOFTWARE. TELKOM agrees, however, that such TELKOM extension or TELKOM modification will be used solely in connection with TELKOM and its AFFILIATES' business operations and that such TELKOM extension or TELKOM modification will not be marketed, licensed or sublicensed, sold, assigned, or otherwise transferred or made available to any third party or other entity, without the express prior written consent of SAP AFRICA. TELKOM hereby grants SAP AFRICA the right of first refusal to any licence to, or assignment of, such TELKOM extension or TELKOM modification and TELKOM agrees not to dispose. + + + +- 22 - TELKOM CONTRACT NO. 076C/01 of or license, its rights thereto to any third party for a consideration not less than, and upon other terms not less favourable than those initially offered to SAP AFRICA. 8. 3. In the event that SAP AFRICA develops jointly with TELKOM for universal application and jointly funds with TELKOM, any extension or modification to the licensed SOFTWARE, then save as may otherwise be agreed upon in writing by SAP AFRICA and TELKOM, such extensions or modifications will be the joint property of SAP AFRICA and TELKOM provided that 8. 3. 1. Neither SAP AFRICA nor TELKOM will grant to any third party, either expressly or impliedly, any rights, title, interest in, or licences to, such jointly developed modification or extension. It is recorded that TELKOM shall be entitled to USE such modification and extension on the DESIGNATED UNIT(S) at the DESIGNATED SITE(S) in accordance with the provisions of this AGREEMENT. 8. 3. 2. 8. 4. The parties hereto agree that the granting of any rights, title or interest to TELKOM in any extension or modification (including TELKOM extensions and TELKOM modifications) shall not be construed by the parties hereto or any court of law to mean that SAP AFRICA has granted or given up any rights, title, or interest in or to SAP AFRICA'S PROPRIETARY INFORMATION or any part thereof. 8. 5. TELKOM agrees that it will not modify any third party SOFTWARE provided in terms of this AGREEMENT, unless expressly authorised in writing by such third party vendor and SAP AFRICA. + + + +- 23 - TELKOM CONTRACT No. 076C/01 8. 6. During such time as SAP AFRICA provides maintenance service to TELKOM in respect of the SOFTWARE, TELKOM shall not make modifications to the SOFTWARE without the prior written consent of SAP AFRICA which shall not be unreasonably withheld. 8. 7. Notwithstanding anything to the contrary contained herein and without prejudice to SAP AFRICA'S right of pre- emption provided for in clause 8. 2, should a party ("the acquiror") wish to acquire for itself only, the rights (and accompanying obligations) in and to the jointly developed and funded MODIFICATION OR EXTENSION, then the acquiror shall pay to the other party ("the divesting party") an amount equal to the market value of such modification or extension. 9. MAINTENANCE 9. 1 SAP AFRICA shall provide maintenance services in respect of the SOFTWARE in accordance with the provisions of this AGREEMENT and annexure 2 hereto ("Maintenance Service"). Maintenance Service by SAP AFRICA shall, unless expressly agreed otherwise in writing, be provided only to the DESIGNATED SITE as specified in annexure 1. Maintenance Service includes the delivery of RELEASES and VERSIONS, support via telephone, the correction of defects, SAP AFRICA'S remote support on-line SOFTWARE services, and those other services as set out in annexure 2. It is conditional upon TELKOM receiving Maintenance Service that TELKOM must make all required remote support and connections to the DESIGNATED UNIT, at its expense, as reasonably requested by SAP AFRICA. It is recorded that, unless the parties should agree otherwise, such remote access shall be by a dial - up facility only. 9. 2 The Maintenance Services to be provided by SAP AFRICA shall not include any services other than those contemplated in clause 9. 1 and those set out in + + + +- 24 - TELKOM CONTRACT No. 076C/01 annexure 2. Maintenance Services will be offered only for the current VERSION and RELEASE and the immediately preceding VERSION and RELEASE. SAP AFRICA shall use its best endeavours to provide Maintenance Services in respect of earlier VERSIONS and/or RELEASES provided that should SAP AFRICA and its licensors incur material costs in supporting such prior RELEASES and/or VERSIONS, then the parties shall negotiate with each other, observing the principles of good faith, to agree upon additional maintenance fees payable by TELKOM in respect of such prior RELEASES and/or VERSIONS. 9. 3 Upon TELKOM'S request and provided that TELKOM has paid the Maintenance Fee due to SAP AFRICA, SAP AFRICA shall, deliver new RELEASES and VERSIONS and related DOCUMENTATION to the DESIGNATED SITES at no * extra cost to TELKOM. Maintenance Service does not include the delivery of any SOFTWARE and DOCUMENTATION that SAP AFRICA offers as separate products and/or which have not been licensed in terms of this AGREEMENT. 9. 4 All other maintenance, consulting or related services not referred to in this clause 9 and/or in annexure 2, shall be agreed upon separately in writing and shall be subject to agreed additional charges. Maintenance Fees and Payment 9. 5 As consideration for providing the maintenance services, TELKOM shall pay to SAP AFRICA an annual fee, that shall be calculated as a percentage of the agreed License Fee, expressed in USD, for the SOFTWARE as specified in annexure 1 hereto. Such percentage is stipulated in the annexure 2 hereto ("the Maintenance Fee"). TELKOM shall pay the Maintenance Fee annually in advance, in ZAR, calculated at the ruling USD: ZAR rate of exchange on the + + + +- 25 - TELKOM CONTRACT No. 076C/01 date of invoice and otherwise in accordance with the other terms of payment set out in this AGREEMENT and annexure 2. 9. 6 SAP AFRICA shall be entitled, upon 3 months written notice, to increase the Maintenance Fee by increasing the percentage upon which the Maintenance Fee is calculated or, on another basis provided that any increase to the Maintenance Fee, caused by a combination of increases arising from: 9. 6. 1 inflation; and/or 9. 6. 2 the percentage at which the Maintenance Fee is calculated; and/or 9. 6. 3 USD/ZAR exchange rate movements, shall not be greater than the annual increase in the South African Consumer Price Index for all areas for the immediately preceding year ("the CPI"), as published by the Central Statistics Agency of South Africa, or its successors. However, should the Maintenance Fee not be increased by the full extent of the CPI for any one year then, future increases to the Maintenance Fee shall not exceed the difference between the actual increases to the maintenance fee and the cumulative effect of the annual increases in the CPI, for the immediately preceding thirty six consecutive months period. 9. 7 The Maintenance Services may be terminated by TELKOM in writing at any time upon 3 (three) months prior written notice. Subject to any accrued rights and obligations, SAP AFRICA shall be entitled to terminate the provision of Maintenance Services in respect of the SOFTWARE or any modules thereof in the event of: + + + +- 26 - TELKOM CONTRACT No. 076C/01 9. 7. 1 an unremedied material breach of this AGREEMENT by TELKOM; and/or 9. 7. 2 should SAP AFRICA, SAP AG or their respective licensors, cease, for whatever reason, providing such Maintenance Services, provided that in the latter case, SAP AFRICA and /or SAP AG shall procure that COMMERCE ONE INC.. Inc. shall provide the Maintenance Service and any related obligations of SAP Africa when providing Maintenance Service in terms of this AGREEMENT including, its' obligations arising out of annexure 3 Any Maintenance Fees paid in advance will be refunded to TELKOM. 9. 8 Wherever in terms of this AGREEMENT, TELKOM is obliged or required to provide remote access for whatever reason to SAP AFRICA, then SAP AFRICA and its representatives, shall comply strictly with TELKOM"S internal policies, arrangements and procedures with regard thereto. 9. 9 SAP AFRICA shall use its best endeavours to meet and comply with the projected resolution times set out in annexure 2 hereto. 10. WARRANTY 10. 1 SAP AFRICA warrants that the SOFTWARE will conform to the functional specifications contained in the DOCUMENTATION on the date of installation of the SOFTWARE and will perform, when in use without material alteration on the DESIGNATED UNIT in accordance with the functional specifications set forth in the DOCUMENTATION. + + + +- 27 - TELKOM CONTRACT NO. 076C/01 10. 2 SAP AFRICA'S warranty aforesaid is subject to TELKOM providing SAP AFRICA necessary access, including remote access, to the SOFTWARE and, if necessary, to the DESIGNATED UNIT and to TELKOM not being in breach of any material term of this AGREEMENT. 10. 3 TELKOM must specifically identify to SAP AFRICA, the nature of the perceived SOFTWARE defect and specifically describe the conditions under which the perceived defect occurs. TELKOM shall provide SAP AFRICA with sufficient test time and support on TELKOM'S DESIGNATED UNIT to duplicate the problem, to verify that the defect is within or in respect of the SOFTWARE and to confirm that the problem has been corrected, provided that SAP AFRICA shall do so in a manner and at a time that does not, in the circumstances, unreasonably disrupt, TELKOM'S day to day operations. 10. 4 Should any module or aspect of the SOFTWARE fail to conform to its' functional specifications, then SAP AFRICA shall, in terms of its warranty set out in this AGREEMENT, either correct the defect, or, at SAP AFRICA's option, replace the defective SOFTWARE or any module thereof. 10. 5 When the USE of the SOFTWARE is significantly restricted by a reported defect and TELKOM has complied with its obligations on reporting defects, then SAP AFRICA shall commence work on correcting the defect in accordance with the time periods stipulated in annexure 2, and to complete such correction as soon as possible thereafter, subject in all cases to the provisions of this clause 10. 10. 6 SAP AFRICA, at its cost, shall deliver and install a correction of the defect in machine-readable form. If, at TELKOM'S request, SAP AFRICA corrects a defect of any VERSION or RELEASE that is not subject to maintenance service, then + + + +- 28 - TELKOM CONTRACT No. 076C/01 SAP AFRICA shall be entitled to charge TELKOM in respect thereof, at SAP AFRICA'S standard or usual charges and rates. 10. 7 The warranty set forth in this clause 10 shall not apply: 10. 7. 1 if the SOFTWARE is not USED in accordance with the DOCUMENTATION; or 10. 7. 2 to any EXTENSIONS or MODIFICATIONS not carried out by SAP AFRICA; or 10. 7. 3 if the defect is caused by a MODIFICATION or EXTENSION not carried out or approved by SAP AFRICA; or 10. 7. 4 if the SOFTWARE is not installed on a DESIGNATED UNIT; or 10. 7. 5 to the extent that the defect is caused to a material extent by TELKOM; or 10. 7. 6 if TELKOM does not provide access, including remote access to the SOFTWARE as required under clause 10. 2; or 10. 7. 7 if the defect is caused by a malfunction in the THIRD PARTY DATABASE in which event, SAP AFRICA will assist TELKOM to obtain appropriate redress from the third party database supplier in accordance with SAP AFRICA'S and its licensors' arrangements with the supplier. 10. 8 SAP AFRICA does not warrant that the SOFTWARE will operate uninterruptedly or that it will be free from minor defects or errors, that do not materially affect the performance of the SOFTWARE or that the applications contained in the SOFTWARE are designed to meet all of TELKOM'S or its AFFILIATES' business requirements. + + + +- 29 - TELKOM CONTRACT No. 076C/01 10. 9 The warranty set out in this clause 10, is given and accepted in lieu of all other express or implied warranties in respect of the SOFTWARE. TELKOM acknowledges and agrees that save as otherwise herein contained, no guarantees, representations, warranties or undertakings of any nature have been given to TELKOM by SAP AFRICA or any other person acting or purporting to act, on behalf of SAP AFRICA, SAP AG or their respective licensors, and TELKOM acknowledges that no representations or undertakings other than those contained herein have been made to, or relied upon by TELKOM. 10. 10 Ownership of all data stored on, or by means of, the THIRD PARTY DATABASES vest in TELKOM. 11 LIMITATION OF LIABILITY 11. 1 TELKOM'S sole and exclusive remedies for any breach of SAP AFRICA'S warranties contained in clause 10 shall, at SAP AFRICA'S option, be either: 11. 1. 1 replacement of the SOFTWARE and/or performance of services in respect thereof; or 11. 1. 2 return or credit of an appropriate portion of any payment made, or to be made, by TELKOM with respect to the defective portion, or the whole of the SOFTWARE or Maintenance Services, but excluding the License Fee or any portion thereof. SAP AFRICA must exercise its option within 20 days of first becoming aware of the defect. 11. 2 TELKOM'S remedies for other loss or damages shall be as set out in clauses 11. 34 and 11. 5 below. + + + +- 30 - TELKOM CONTRACT No. 076C/01 11. 3 For the avoidance of doubt, it is recorded that SAP AFRICA will not be liable under this AGREEMENT for: 11. 3. 1 the MODIFICATION or improvement of the SOFTWARE by TELKOM to fit the particular requirements of TELKOM; or 11. 3. 2 the correction of any data errors resulting from MODIFICATIONS or EXTENSIONS by TELKOM or its agents; or 11. 3. 3 the correction of any data errors as a result of misuse of the SOFTWARE by TELKOM or its agents; or 11. 3. 4 preparation or conversion of data by TELKOM into the form required for use with the SOFTWARE. 11. 4 Subject to, and without prejudice to the provisions of this clause 11. 1 and clause 10, SAP AFRICA'S liability for any loss or damages of whatever nature or however arising, that may be suffered by TELKOM or AFFILIATE from USE or license of the SOFTWARE and irrespective of the number of occurrences giving rise to such liability, shall be limited to the aggregate of all License Fees paid by TELKOM to SAP AFRICA in terms of this AGREEMENT, up until the date when such damages are determined or agreed. 11. 5 Notwithstanding anything to the contrary contained in this AGREEMENT, a party hereto (the "defaulting party") shall not be liable for any consequential damage or loss of whatever nature and/or however caused, that may be suffered by the other party (the "innocent party") other than for consequential loss or damages suffered by the innocent party caused by the wilful or intentional acts or omissions of the + + + +- 31 - TELKOM CONTRACT No. 076C/01 defaulting party or any person or entity in respect of whom the defaulting party may be vicariously liable. However, it is recorded for the avoidance of doubt that if TELKOM should suffer a loss of revenue as a consequence of the SOFTWARE failing to conform or perform to its functional specifications, then SAP AFRICA's revenue share fee shall be decreased accordingly. 11. 6 It is agreed that each provision of this AGREEMENT that provides for a limitation of liability, or warranties or exclusion of damages, is intended by the parties to be severable and independent of any other provision and to be enforced as such. 11. 7 FAILURE OF MARKETPLACE 11. 7. 1 Notwithstanding anything to the contrary contained in this AGREEMENT and in particular, clause 11. 1, in instances where the module of the SOFTWARE constituting a portion of the Marketplace known as MarketSet 2. 0 Platform, fails and cannot be accessed or USED by TELKOM and BUSINESS THIRD PARTIES on the DESIGNATED UNIT and/or such other DESIGNATED UNIT where the SOFTWARE is installed for disaster recovery or back-up USE, and such failure is caused solely by a failure in the SOFTWARE to perform in accordance with the specifications set out in the DOCUMENTATION and should the Marketplace remain unable to be accessed or USED by TELKOM and/or BUSINESS THIRD PARTIES for a continuous period of 72 hours, commencing from the time when such failure is logged as a Priority 1 error (as defined in annexure 2) with SAP AFRICA as a SOFTWARE problem and SAP AFRICA is unable to provide a solution or resolution within the said 72 hours, then TELKOM shall be entitled to terminate this AGREEMENT and claim damages limited as provided for in clause 11. 4. + + + +- 32 - TELKOM CONTRACT No. 076C/01 11. 7. 2 The remedy granted to TELKOM in terms of clause 11. 7. 1 shall only be available until statistics with regard to the stability of the Marketset 2. 0 Platform has reached a level that is acceptable to Telkom. Such acceptance shall be based on market norms for the availability levels of Marketset software similar to or the same as Marketset considered to be mission critical, which can be established via independent market research, which shall be the responsibility and for the account of SAP. In the event of a dispute between the parties then clause 22 shall apply. 12 INDEMNITY 12. 1 SAP AFRICA warrants that SAP AG and its licensors own the SOFTWARE and CONFIDENTIAL INFORMATION licensed by SAP AFRICA hereunder, including all intellectual property rights therein and that SAP AFRICA has all rights from SAP AG and its licensors necessary to licence the SOFTWARE and SAP AFRICA'S CONFIDENTIAL INFORMATION to TELKOM in accordance with the terms of this AGREEMENT, 12. 2 SAP AFRICA makes no representations with regard to the possibility of infringement by combination use of the SOFTWARE. The parties agree that SAP AFRICA has no duty to investigate any such possibility. As used herein, "combination use" means use of the SOFTWARE in combination or conjunction with any of the following (unless such use is prescribed in the DOCUMENTATION): 12. 2. 1 any software other than the SOFTWARE (including TELKOM EXTENSION or TELKOM MODIFICATION) MODIFICATION) unless such EXTENSION or MODIFICATION has been incorporated, wholly or partially, in the SOFTWARE; or + + + +- 33 - TELKOM CONTRACT No. 076C/01 12. 2. 2 any apparatus other than a DESIGNATED UNIT; or 12. 2. 3 any activities of TELKOM or its authorised AFFILIATES not licensed under this AGREEMENT. 12. 3 Subject to clause 11. 2, SAP AFRICA shall indemnify TELKOM against all claims, liabilities, and costs, including reasonable attorneys fees, reasonably incurred in the defence of any claim brought against TELKOM in the TERRITORY by a third party alleging that TELKOM'S USE of the SOFTWARE and DOCUMENTATION infringes a third party's copyright, patent, PROPRIETARY INFORMATION and/or trade secrets; provided that TELKOM promptly notifies SAP AFRICA in writing of any such claim and SAP AFRICA is permitted to control fully the defence and any settlement of such claim at SAP AFRICA'S own expense. TELKOM shall co- operate fully in the defence of such claim and any reasonable costs incurred by TELKOM in giving such co-operation shall be reimbursed by SAP AFRICA. SAP AFRICA may, in its sole discretion, settle any such claim on a basis whereby SAP AFRICA, substitutes the SOFTWARE and DOCUMENTATION (in consultation with TELKOM) with alternative, substantially equivalent, non-infringing programs and support DOCUMENTATION, which TELKOM shall be obliged to accept. 12. 4 SAP AFRICA, SAP AG and their licensors, shall not be liable for any claims, liabilities and costs, including attorneys fees, reasonably incurred in the defence of any claim (other than for the infringement of intellectual property rights specified in clause 10. 3 above), arising out of TELKOM'S unauthorised use of the SOFTWARE, DOCUMENTATION, THIRD-PARTY DATABASE and SAP AFRICA PROPRIETARY INFORMATION, licensed under this AGREEMENT provided that SAP AFRICA promptly notifies TELKOM in writing of such claim and that TELKOM is permitted to control fully the defence and any settlement of such claim. + + + +- 34 - TELKOM CONTRACT NO. 076C/01 12. 5 SAP AFRICA shall be entitled, in its sole discretion, to take such actions against a third party that it determines are necessary or desirable in connection with any infringement or alleged infringement by a third party of the SOFTWARE and any module thereof or the DOCUMENTATION. 12. 6 Save as is set out in clause 11 and this clause 12, TELKOM shall have no other claim or remedy arising from the alleged infringement of third party intellectual property rights, against SAP AFRICA, SAP AG and their licensors. 13 ASSIGNMENT 13. 1 Neither Party shall be entitled to cede, or delegate its rights and obligations arising from this AGREEMENT or to assign this AGREEMENT to any other person or entity without the prior written consent of the other party provided that either party shall be entitled to assign this AGREEMENT, in whole and not part only, to any of its' subsidiary or holding companies (as defined and contemplated in the Companies Act of 1973, as amended) provided that any such assignment shall ipso facto cease to be of any further force and effect as between the parties, should the assignee cease, for whatever reason, to be a subsidiary or holding company, of the assignor. 13. 2 TELKOM recognises and agrees that the source code and all parts thereof, is the valuable proprietary and confidential information and trade secrets of SAP AFRICA, SAP AG and its licensors, and shall remain so even after a release of the source code to TELKOM under the Escrow agreement the provisions of which are set out in annexure 3. In the event of a release of the source code to TELKOM under the Escrow agreement, TELKOM agrees to hold same in strict confidence and to take appropriate action to preserve its confidentiality, and TELKOM shall + + + +- 35 - TELKOM CONTRACT No. 076C/01 have a non-exclusive, non-transferable LICENCE to use the source code solely for its own USE in order to support and maintain the SOFTWARE and for no other purpose whatsoever. TELKOM shall use the source code only at its own premises on its own data processing equipment or third parties in accordance with the license granted in terms of clause 3 and the provisions of this AGREEMENT. TELKOM shall not copy the source code, nor disclose it to any third party except agents retained by TELKOM to assist in maintaining the SOFTWARE, provided that no such agent is in the business of marketing or developing SOFTWARE competitive with the SOFTWARE. 14 GENERAL PROVISIONS 14. 1 AGREEMENT Binding - This AGREEMENT shall be binding upon and accrue for the benefit of the parties hereto and their respective successors and permitted assigns. 14. 2 Entire AGREEMENT - This AGREEMENT and each annexure hereto constitute the complete and exclusive statement of the AGREEMENT between SAP AFRICA and TELKOM as to its subject matter and all previous representations, discussions and writings are superseded by this AGREEMENT. No variation of, or addition to, this AGREEMENT shall be of any force or effect unless reduced to writing and signed by both parties. 14. 3 Severability - It is the intent of the parties that in case any one or more of the provisions contained in this AGREEMENT shall be held to be invalid or unenforceable in any respect, such invalidity or unenforceability shall not affect the other provisions of this AGREEMENT and this AGREEMENT shall be construed as if such invalid or unenforceable provisions had not been contained herein. + + + +- 36 - TELKOM CONTRACT No. 076C/01 14. 4 No Waiver - If either party should waive any breach of any provisions of this AGREEMENT, it shall not thereby be deemed to have waived any preceding or succeeding breach of the same or any other provision hereof. 14. 5 Publicity -Neither party shall use the name of the other in publicity, advertising, or similar activity, without the specific prior written consent of the other as to the content, appearance, layout and other features thereof, provided that TELKOM may use the marks "SAP", and "COMMERCE ONE INC" and the phrase "Powered by Market Set" in its websites that employ or utilise the SOFTWARE provided SAP AFRICA and/or COMMERCE ONE INC.. Inc. have given its/their prior consent to the format and typeface thereof which consent shall not be unreasonably withheld. 14. 6 Governing Law -This AGREEMENT shall be governed by and construed under the Laws of the Republic of South Africa. 1 5. DOMICILIA AND NOTICES 15. 1 Any notices to be given to the parties in terms of this AGREEMENT shall be in writing and delivered by hand during ordinary business hours or posted by prepaid registered post or transmitted by fax during normal business hours to the addresses mentioned hereunder, which respective addresses the parties choose as their domicilia citandi et executandi for the delivery or service of all notices, communications or legal processes arising out of this AGREEMENT: SAP AFRICA : SAP Business Park 1 Woodmead Drive Woodmead, Sandton Attention Managing Director + + + +- 37 - TELKOM CONTRACT NO. 076C/01 Fax: (011)235 6002 TELKOM The Managing Executive Procurement Services P 0 Box 447 Pretoria, 0001 19 th Floor, Telkom Towers North 152 Proes Street, Pretoria Fax: (012)311 6210/Tel: (012)311 6047 or such other address in the Republic of South Africa as either party may choose by written notice to the other from time to time. 15. 2 Every notice shall be deemed to have been properly given, in the absence of proof to the contrary: 15. 2. 1 if delivered by hand, on the date of delivery; 15. 2. 2 If sent by prepaid registered post, 14 (fourteen) days after the date on which the notice is posted; 15. 2. 3 If sent to a party at its telefax number, on the date of transmission where it is transmitted during normal business hours of the receiving instrument, and on the next business day where it is transmitted outside those business hours, in either event provided that it has been confirmed by registered letter posted no later than the business day immediately following the date of transmission. + + + +- 38 - TELKOM CONTRACT No. 076C/01 15. 2. 4 Notwithstanding anything to the contrary herein contained, a written notice or communication actually received by either party from the other, shall be an adequate written notice as communication to such receiving party notwithstanding that it was not sent to or delivered at that party's chosen domicilium citandi et executandi. 16. FRAUD 16. 1 If, at any time during the currency of this Agreement, TELKOM in its reasonable discretion based on prima facie evidence determines that SAP AFRICA has, in respect of this Agreement or any other contract or agreement to which they were or are Parties: 16. 2. 1 acted dishonestly and/or in bad faith, and/or 16. 2. 2 has made any intentional or negligent misrepresentation to TELKOM whether in any negotiations preceding the conclusion of, or in the execution of this or any other agreement between the Parties, then TELKOM will be entitled by written notice to SAP Africa forthwith to cancel this Agreement. Upon such cancellation TELKOM will be entitled in addition to all other remedies available to it, to recover from SAP Africa all damages it has suffered by virtue of such conduct by SAP Africa. If, at the time of such cancellation, TELKOM is indebted to SAP Africa for any amounts whatsoever, TELKOM will be entitled to withhold payment in respect thereof for a period of 90 (ninety) days from the date of cancellation in order to investigate SAP Africa's conduct and any damages suffered by TELKOM. No payment by TELKOM to SAP Africa after the lapse of such period will preclude TELKOM thereafter, from recovering from SAP Africa any such damages as it may have suffered. + + + +- 39 - TELKOM CONTRACT No. 076C/01 17. FORCE MAJEURE 17. 1 If circumstances which were not foreseeable with reasonable foresight or avoidable with reasonable care ("circumstances") arise, or be reasonably anticipated and delayed or have potential to delay the performance, whether in whole or in part impossible then, the party whose performance is affected, or whose performance may be affected ("affected party"), will forthwith, in good faith and by the most expeditious means, notify the other party in writing of: 17. 2. 1 the cause, nature and extent of the circumstances; 17. 2. 2 the expected duration of the circumstances; 17. 2. 3 the extent to, which the performance will be affected. 17. 3 If the circumstances change after the affected party has notified the other party in accordance with clauses stated above, the affected party will, forthwith, in good faith and by the most expeditious means, inform the other party of such changes and keep the other party undated on such changes. 17. 4 Subject to the Agreement clauses stated above, the circumstances will not terminate the Agreement between the parties, or absolve the affected party from performance. 17. 4. 1 If the circumstances make the agreed performance impossible, the affected party will, having regard to all relevant factors, as soon as possible and in good faith, put proposals for alternatives to the other party. Such proposals will be in sufficient details to enable the other party to technically and + + + +- 40 - TELKOM CONTRACT No. 076C/01 informatively assess the alternatives and to decide whether any alternative is acceptable. 17. 4. 2 If there is no alternative acceptable to the other party, it may elect to terminate the AGREEMENT with immediate effect and without prejudice to any other rights it may have, subject to payment of any amounts due and payable. 17. 5 If the circumstances delay the agreed performance- 17. 5. 1 the affected party will, forthwith and in good faith, take all reasonable steps to mitigate delay and recover lost time, and 17. 5. 2 having regard to all relevant factors and in good faith, notify the other party as soon as possible of the steps to be taken to mitigate the delay and recover lost time and keep the other party updated on changes and progress thereof. 17. 5. 3 the other party may, if the extent to which the delay may be mitigated and time lost be recovered are unacceptable to it, elect to terminate the AGREEMENT. 17. 5. 4 neither of the parties will have any claim, arising from the circumstances, on the other, provided any amounts due and payable, are paid in full. 17. 6 Without limiting the generality and intention of the clauses above in any way, the circumstances may include, without being limited thereto: 17. 6. 1 War, riots, civil or military insurrection and like political happenings. 17. 6. 2 Natural disasters such as earthquakes, fire, storms and floods. + + + +- 41 - TELKOM CONTRACT No. 076C/01 17. 6. 3 Governmental acts and omissions. 17. 6. 4 Terrorism and sabotage. 17. 7 Any delay or non performance of any provision of the AGREEMENT (other than for payment of amounts due hereunder) caused by conditions beyond the control of the performing party will not constitute a breach of the AGREEMENT and the time for performance of such provision, if any, will be deemed to be extended for a period equal to the duration of the conditions preventing performances. 18. SAFETY AND SECURITY 18. 1 SAP Africa agrees to comply with TELKOM'S security and safety procedures. Without limiting the generality thereof, SAP Africa will specifically comply with the Occupational Health and Safety Act. This AGREEMENT will constitute compliance with section 37(2) of said act and SAP Africa will ensure that all necessary steps are taken to comply the said Act. 19. CANVASSING, GIFTS, INDUCEMENTS AND REWARDS 19. 1 SAP Africa will not under any circumstances offer promise or make any gift, payment, loan, reward, inducement, benefit or other advantage to any of TELKOM'S employees. 19. 2 Such an act is a material breach of the AGREEMENT and will be dealt with accordingly. 20. MODIFICATION OF AGREEMENT + + + +- 42 - TELKOM CONTRACT No. 076C/01 20. 1 If it becomes necessary during the AGREEMENT period to amend this AGREEMENT or to delete any of the existing provisions contained in this AGREEMENT, then such amendments will be done after consultation and mutual agreement between SAP AFRICA and TELKOM and confirmed in writing and signed by the parties to this AGREEMENT. 21. MARKETING PLANS As soon as possible after signature of this AGREEMENT, representatives of the parties shall meet and commence discussions and negotiations on the establishment, compilation and content of a marketing and branding plan in respect of the SOFTWARE and the services offered and to be offered by TELKOM, USING the SOFTWARE. During such negotiations, the parties shall observe the principles of utmost good faith to each other and they shall use their best endeavours to reach agreement on the sharing of responsibilities and tasks, the financial and other contributions due from each party and such other appropriate terms and conditions. Failure by the parties to reach any such agreement, shall not entitle either party to terminate this AGREEMENT. 22. ARBITRATION 22. 1. 1 Should any dispute of whatever nature arise between the parties, then any and all disputes shall be submitted to and decided by arbitration. Any such arbitration ("the arbitration") will be governed by the provisions of this clause 22. 22. 2 Subject to the other provisions of this agreement specifically providing for the resolution of any dispute, where any dispute, disagreement, or claim arises between the parties (called here after the dispute) concerning this agreement, the parties shall try to resolve the dispute by negotiation. This entails that the one party + + + +- 43 - TELKOM CONTRACT NO. 076C/01 invites the other in writing (providing details of the dispute) to meet and to attempt to resolve the dispute within 7 (seven) days from the date of the written invitation. Should the dispute not be resolved in this manner, the dispute will go to arbitration. 22. 3 The arbitration shall be held informally in Johannesburg or such other place agreed upon by the parties and in accordance with the rules of the Arbitration Foundation of Southern Africa, it being the intention of the parties that, as far as possible, the arbitration shall be concluded within 21 days after it has been demanded. 22. 3 The arbitrator shall be a person agreed upon by the parties or, failing such agreement, by the chairperson of AFSA. The arbitrator shall be empowered to appoint such assistants as he deems fit in the event of the subject matter of the dispute requiring expertise in any particular field for its proper resolution. 22. 4 Unless the parties otherwise agree, the arbitrator's award shall be in writing, and shall be final and binding upon the parties and at the notice of either party, be capable of being made an order of a competent court. 22. 5 No provision in this arbitration clause shall be taken as prohibiting the rights of either party to approach the appropriate court for the purposes of any interim or interdictory relief. 23 INSURANCE 23. 1 Without limiting SAP AFRICA'S liabilities or responsibilities in terms of the AGREEMENT, SAP AFRICA will provide and maintain insurance to cover its liability and responsibilities in terms of this AGREEMENT. 23. 2 Notwithstanding anything elsewhere contained in the AGREEMENT, SAP AFRICA will provide at least: 23. 3 Insurance in terms of the Compensation for Injuries and Diseases Act, No. 130 of 1993, as amended. SAP AFRICA will upon request from TELKOM submit proof to the satisfaction of TELKOM that it is insured under the Compensation for + + + +- 44 - TELKOM CONTRACT NO. 076C/01 Injuries and Diseases Act by providing TELKOM with adequate proof stating that it has paid all assessments due; 23. 4 Legal liability in respect of claims for death and/or injury to persons or loss of/or damage to third party property; 23. 5 Motor Vehicle Liability Insurance in respect of all motor vehicles brought onto the premises of TELKOM. 24 CONFIDENTIALITY 24. 1 For the purposes of this clause, any person giving information shall be referred to as "the discloser" and any person receiving information shall be referred to as "the recipient". 24. 2 All information of a confidential nature (including, but not limited to, all information relating to the software), disclosed or made available by one party to the other in connection with this agreement, whether furnished verbally or in writing or in computer language, and whether marked with proprietary legend or not, shall constitute confidential, proprietary and trade secret information (collectively referred to as "the information") of the disclosure, provided that there shall be excluded from such information any information which is at the time of disclosure already in the public domain otherwise than by breach of this agreement and there shall furthermore be excluded such information as the recipient is able to show was within its knowledge prior to the disclosure thereof. + + + +- 45 - TELKOM CONTRACT NO. 076C/01 24. 3 The recipient shall at all times, including such times after this agreement has been terminated, unless otherwise agreed in writing by the discloser, hold the information furnished by the discloser in strict confidence and shall use such information solely for the purposes of this agreement. The recipient shall disclose such information only to its own employees and professional advisers as are necessary for the purposes of carrying out its obligations and duties in terms of this agreement, provided that prior to such disclosure such employees and professional advisers have been advised in writing by the recipient of the confidential nature of the information. The same shall be true of customers. The recipient shall make no other use or disclosure of any nature of the information. For the purposes of this clause 25, the phrase "personnel" shall be deemed to include directors, sub- contractors or other representatives of the recipient. 24. 4 The recipient shall at all times, unless otherwise agreed in writing by the discloser: 24. 4. 1 hold the information and the reports furnished by the discloser in the strictest confidence; 24. 4. 2 shall use such information and reports solely in connection with the recipient's internal evaluation of the possibilities, the advancement and implementation of the business association contemplated in this agreement. + + + +- 46 - TELKOM CONTRACT No. 076C/01 24. 5 24. 6 The recipient shall disclose such information and the reports only to its own employees and professional advisers as are necessary on a strictly need to know basis. The recipient and its employees shall not copy, reverse, engineer, exchange or reproduce the information and/or the reports, in whole or in part, by any method whatsoever. THUS DONE AND SIGNED at Pretoria on this 31st day of March 2001 For and on behalf of SYSTEMS APPLICATIONS (AFRICA)(Proprietary)limited /S/ /S/ (who warrants his authority to so sign) For: TELKOM SOUTH AFRICA LIMITED (who warrants his authority to so sign) /s/ (who warrants his authority to so sign) THUS DONE AND SIGNED at Pretoria on this 31st day of March 2001 For and on behalf of TELKOM SOUTH AFRICA LIMITED in the presence of the undersigned witnesses AS WITNESSES Signature /S/ Print name: name illegible Signature /S/ Print name: M.L.MORKEL + + + +- 47 - TELKOM CONTRACT No. 076C/01 + + + +- 48 - TELKOM CONTRACT NO. 076C/01 ANNEXURE 1 To AGREEMENT between SYSTEMS APPLICATION PRODUCTS (AFRICA) (PTY) LIMITED with TELKOM SOUTH AFRICA LIMITED Designated Site/Location: 91 OAK AVENUE, CENTURION Affiliate Name (if different from Licensee): Delivery Address: Contact Person: B L A I RE A B SH I RE Tel. No 012-677-3518 Designated Unit to be identified by Licensee to SAP AFRICA in writing. Hardware Manufacturer: Type/Model: Operating System: ____________________________ CENTURION DATA CENTRE 91 OAK AVENUE, CENTURION + + + +- 49 - TELKOM CONTRACT NO. 076C/01 Database Manager: Licence Number: 1. This Annexure 1 is annexed to and incorporated into the Agreement. Should any provision of this Annexure conflict with the provisions of the Agreement, then the provisions of this Annexure shall prevail. The Licence fee for the Software licensed in terms hereof is US$5, 000, 000, 00. The License Fee shall be converted into ZAR and TELKOM shall be invoiced on the day following signature of this AGREEMENT at the ruling USD/ZAR exchange rate being the average between "buy" and "sell" usd offered by SAP Africa's bankers at the close of business on the date of signature of this AGREEMENT. The License Fee expressed in ZAR plus VAT thereon shall be payable by TELKOM within 7 days of the date of invoice. Should TELKOM fail to pay the License Fee on due date then, TELKOM shall pay interest on such amounts due but outstanding at the legal rate of interest and any negative variation in the USD/ZAR exchange rate from due date of payment until receipt of payment shall be for TELKOM'S account. If this AGREEMENT is not signed by Telkom on or before 31 st March 2001, then the license fee shall be determined in accordance with the SAP Africa/COMMERCE ONE INC.. standard pricing policies. 3. The revenue share that TELKOM shall pay to SAP AFRICA shall be 10%. 4. The Software licensed in terms of this agreement comprises the following modules and components: A. Platform 15. 1. 1. Product Description The MarketSet 2. 0 Platform provides the infrastructure on which the MarketSet E- Marketplace is created and deployed. The MarketSet 2. 0 Platform provides the necessary tools and components to support the exchange of XML-based business documents (xCBL) between trading partners, and enables business services to interact with those business documents. More specifically, the MarketSet 2. 0 platform provides the messaging, routing, addressing, transaction, security, connectivity, and high availability components and services, necessary to create and deploy world class business-to-business e-marketplaces. The MarketSet 2. 0 platform shares a common feature/functionality set with COMMERCE ONE INC.. 's MarketSite 4. 0 and Net Market Maker 2. 0 e-Marketplace solutions. + + + +- 50 - TELKOM CONTRACT NO. 076C/01 16. B. Market Set Builder 16. 1. 1. Product Description MarketSet Builder is an essential element of the MarketSet E-MarketpIace infrastructure. It enables communities to develop and flourish within a marketplace. It enables the marketplace operator to create their own branded marketplace, register and manage users of their marketplace and target content and services to those users. In addition, it plays a critical role in the integration of business services to the marketplace 1 7. C. Business Services Framework 17. 1. 1. Product Description The Business Service Framework, or BSF, is a set of services, interfaces, tools, methodologies, and documentation that provides, as a whole, a comprehensive means for connecting new services into the Global Trading Web. Add-In Services The open and flexible Market Set Business Services Framework enables e- marketplaces to leverage their domain expertise and provide additional services and greater value for their users. An e-marketplace can incorporate third-party services specific to an industry, as well as cross-industry services such as shipping, taxation, and credit reports. 18. Core Market Set Services 19. A. Procurement Services 19. 1. Product Description Enterprise Buyer Professional Edition has been optimized for SAP customers looking for an e-procurement application that can automate the entire purchasing process, including MRO as well as direct goods purchases. When this application suite is run hosted at a MarketSet, this is referred to as Procurement Services. Professional has deep integration natively to the other supply chain components that make up the MarketSet solution. + + + +- 51 - TELKOM CONTRACT NO. 076C/01 20. B. Content Services 20. 1. Product Description Content Services offers a comprehensive set of offerings to handle all of the content needs of Market Set e-marketplaces and deliver value-added content to their trading communities.. Market Set's content and catalogue offering includes the following components and services: 21. Content Engine 21. 1. Product Description Content Engine addresses all the critical needs of an e-marketplace operator to create, operate, and maintain a commerce-ready Catalog. Content Engine combines unique data aggregation capabilities with an easy to use, powerful search engine that enables marketplace operators to offer a multi-supplier catalog that could potentially contain products and information from thousands of suppliers. Content Engine also allows marketplace operators to link 3rd party data (ratings, data sheets, regulations information) or self created content to product information to provide a unique value added search experience for their community. 22. C. Order Management Services 22. 1. Product Description MarketSet Order Management Services is a web-based application offered as a hosted service that enables sellers to simply manage orders and publish content through a Web browser. MarketSet Order Management Services allows suppliers to transact with buyers using only a browser and access to the Internet. MarketSet Order Management Services is a critical piece of the solution that allows the participation of small or specialized sellers. With MarketSet Order Management Services, the buying customer can access unique products from a full range of sellers, regardless of their technical infrastructures. MarketSet Order Management Services provides an efficient and easy-to-administer solution to enable sellers and automate the transaction process. At the same time, a MarketSet market maker is able to administer and monitor transaction related activities to ensure high service quality for their e-marketplace. + + + +- 52 - TELKOM CONTRACT NO. 076C/01 23. D. Auction Services 23. 1. 1. Product Description Market Set Auction Services offers real-time bidding solutions for corporate buyers and sellers, enabling them to quickly and cost-effectively implement B2B Internet bidding events to enhance existing procurement or liquidation processes. Market Set Auction Services supplies businesses with a fully hosted solution and provides users with administrative capabilities to control the data and the bidding process. It enables businesses to conduct online dynamic exchanges of products and services with their suppliers, their channel partners and their customers 24. E. Analysis Services 24. 1. Product Description The Reporting Solution in MarketSet 2. 0 includes capturing and retaining information about the data that passes through Enterprise Buyer Professional Edition on the e- marketplace and providing that data to Business Information Warehouse 1for analysis. Standard report templates are available out of Business Information Warehouse as well as the ability to create custom reports. Users can also use the build in online analytical processing (OLAP) engine for further evaluations and analyses. Currently, Enterprise Buyer Professional Edition is the only service providing data to Business Information Warehouse, but other services will provide data in future releases. 1 Branding name may change. + + + +- 53 - TELKOM CONTRACT No. 076C/01 2 4 . 2 . S o f t w a r e The following software is provided in the MarketSet 2. 0 Solution package: Market Site Platform 4. 0 Market Site Admin Console 4. 0 Market Site Builder 4. 0 Order Management Services x. x Supply Order 3. 0 SDK Pro 4. 0 BCC 4. 0 CPC 3. 2. 1 NT (128 Bit) Business Connector 3. 1. 1 Document Mapping Service 1. 1 Procurement Service (Enterprise Buyer Professional Edition) Content Engine 2. 0 with Service Pack 2 Planning Services 3. 0a (URL Link Only) Design Services Business Analysis 2. 0B ITS 3. 0 Auction Services 4. 0 Market Set 1. 0 Additional Components CD Business Connector 3. 1 (Developer Edition) Round Trip Broker 1. 1 Bulletin Board 1. 0 User Management Mapping Service 1. 0 Installation for Market Set 1. 0 (PDF) 24. 3. 3rd Party Proprietary Software also Licensed in terms of this Agreement + + + +- 54 - TELKOM CONTRACT No. 076C/01 The following 3rd party proprietary software is provided as a part of the MarketSet E- Marketplace Solution SonicMQ Message Broker Netscape's iPlanet Directory Server 4. 11 Extensibility's XML Authority 1. 1 d Allaire's JRun Pro 2. 3. 3 InetSoft's Style Report 2. 1 Cygnus'GNU Tools B20. 1 Release Sun's Java Naming and Directory Interface 1. 2 Sun's Java Server Development Kit 2. 0 Sun's JavaMail. 1. 2 Sun's JavaBeans Activation Framework 1. 0. 1 Release Sun's Java Runtime Environment Version 1. 2. 2 Sun's Java Foundation Classes (JFC) / Swing JFC 1. 1 with Swing 1. 1. 1 lAIK's Java toolkit for Cryptography Extension 2. 51 lAIK's iSaSiLk Java toolkit SSL 2. 51 RSA's BSafe Crypto-J James Clark's XT XSL Processing Library Version 19991105 ANTLR. ORG's ANTLR 2. 5. 0 SAX's SAX 1. 0 and 2. 0 W3C's Jigsaw 2. 0. 3 Microsoft Virtual Machine Build 3229 Microsoft's Data Access Components (MDAC) 2. 1. 2. 4202. 3 Service Pack 5. The following third party databases need to be acquired and licensed by Telkom (if not already acquired and licensed) to enable the software to be operated: + + + +- 5 5 - TELKOM CONTRACT No. 076C/01 SAP MARKETSET DATABASES Jrun JDK Web Server DB JDBC LDAP NT 4. 0 HotSpot Server 1. 2. 2 MJHS IIS 4. 0 MS SQL 7 SP 2 I-NET OPTA 2000 4. 1. 2 on NT SOLARIS 8 HotSpot Server 1. 2. 2 Apache 1. 3. 9 + Oracle DB 8. 1. 6 Oracle Driver for JD 1. 2 Netscape LDAP v 4. 1. 2 on Solaris WINDOWS 2000 HotSpot Server 1. 2. 2 MS IIS 5. 2 MS SQL 7 SP2 I-NET OPTA 2000 Netscape LDAP v 4. 1. 2 on NT + + + +-56- TELKOM CONTRACT NO. 076C/01 THUS DONE AND SIGNED at WOODMEAD by SYSTEMS APPLICATIONS PRODUCTS (AFRICA) (PROPRIETARY) LIMITED on this 31st day of March 2001 /S/ For SYSTEMS APPLICATIONS PRODUCTS (AFRICA)(Pty)limited / (who warrants his authority to so sign) For: TELKOM SOUTH AFRICA LIMITED (who warrants his authority to so sign) /s/ THUS DONE AND SIGNED at Pretoria by the TELKOM SOUTH AFRICA LIMITED on this 31st day of March 2001 AS WITNESSES Signature /S/ Signature /S/ + + + +- 57 - TELKOM CONTRACT No. 076C/01 ANNEXURE 2 to AGREEMENT between SYSTEMS APPLICATION PRODUCTS (AFRICA) (PTY) LTD and TELKOM SOUTH AFRICA LIMITED MAINTENANCE FEE 1. The Maintenance Fee shall be calculated at 17% of the License fee stipulated in annexure 1 for the license of the SOFTWARE. 2. MAINTENANCE SERVICES SAP Africa ("SAP") endeavours to provide the highest quality support and to ensure system stability throughout the life cycle of the Software solution. TELKOM will benefit through a lower total cost of ownership and will, in the future, experience an optimal usage of system resources and protection of existing investments. 7 x 24h Support Worldwide SAP Customer Support delivers help for software problems in a fast and competent manner. SAP provides a 7 x 24h Support availability for messages with 'very high' priority using the 'Follow-the-Sun' model. At any given time of day an expert will be at hand to provide advice. All Support centres are linked through a unique Support infrastructure, ensuring that all information provided to SAP is on hand regardless where or when. + + + +- 58 - TELKOM CONTRACT No. 076C/01 Software Maintenance Software Maintenance includes the further improvement of the software, as well as the continuous adaptation of the software to new database and operating system versions. Each new release contains solutions to all known software errors. Delivery of Functional Enhancements and Updates to the R/3 Software SAP and its Licensors continuously enhance and improve the Software to ensure that Licensees customers always have the latest technology and business functions (e. g. functionality supporting the introduction of the Euro). SAP ensures that customers always receive the latest release of the R/3 software as soon as it becomes available. Integrated Support for SAP and Partner Products SAP maintains Collaborative Support Agreements with SAP Partners who have provided Licensees with hardware, operating system and database platforms to ensure seamless support. Should a Licensee request SAP require the involvement of the respective partner, SAP has established interfaces and procedures to do so. Access to 'SAP's Frontend (formerly: OSS) SAP'sFrontend is a quick and user-friendly interface for communication between customers and SAP. Features include: - Access to the Software Support Package repository for downloads - Database access to individual problem solutions for downloads - Knowledge Database access to a wealth of information on the use of the Software - Electronic notification about important information (HotNews) - Access to SAP's request handling process. Support Services The requirement for deriving the full benefit from SAP's Global Support Network is a remote connection from the customer's Software System to SAP's Frontend. This enables the efficient usage of SAP's portfolio of Remote Services and will enable customers to work with the SAP Support experts whenever required and in particular, at the start of their + + + +- 59 - TELKOM CONTRACT NO. 076C/01 implementation. Also, a remote connection is a prerequisite for 7 x 24h support for priority 1 messages. Under the TeamSAP Support maintenance agreement, SAP Support deals with problem messages pertaining to: - An error in the software - An error in the software causes subsequent errors - There are problems when implementing corrections - There is no training or documentation available - The functions are not logical - The software ergonomics has flaws Messages of this nature are responded to in writing via SAP's Frontend. Any other messages are termed consulting issues and may be processed by either SAP's Remote Consulting department, the customer's implementation consultants or SAP consultants. This service is, however, priced separately and is not within scope of the maintenance agreement. Messages of this nature usually concern: - Processing logic of the software, the business processes and customising (questions regarding working with transactions, programs and screens, the contents of screens and pr in touts , e tc . ) - Administration or tuning of the SAP System, of the database or the operating system - Errors caused by a modification of the system - A solution is clear from the short text or from the help text of the system error Maintenance Service Levels Optimum support with fast reaction times is the cornerstone of SAP's Support organisation. SAP's Support process uses a three-tier Support structure: Local Support (in 50 countries worldwide) Local Support Centres at SAP subsidiaries are the local contact points for customers. During usual working hours, the Local Support Centres handle all inquiries relating to support in the language of the respective country and, if necessary, forward them to the + + + +-60- TELKOM CONTRACT NO. 076C/01 appropriate local partner or the nearest Regional Support Centre. Most inquiries are entered via SAP 's Frontend which offers all the advantages of automatic dispatching. Regional Support (more than 400 Support professionals in four Regional Support Centres) Regional Support Centres are located in Walldorf, Germany (Europe/Africa), Philadelphia, USA (Americas), Singapore (Asia-Pacific) and Tokyo, Japan (North East Asia). These Centres are responsible for processing support inquiries and also form part of the 7 x 24h support network. According to the 'FoIlow-the-Sun' principle, inquiries received outside normal working hours are automatically forwarded to the Regional Support Centre that is currently active. Another task is the co-ordination of regional partners in their co-operation with SAP customers. Development Support (Europe, Americas, Asia) SAP Africa's Local Support Centre supports all SAP customers in the Southern Africa/Sub- Sahara region. In the event of SAP Africa being unable to respond timeously or effectively, the support query will be elevated to COMMERCE ONE INC.. Inc. consultants, in which event, SAP Africa shall use its best endeavours to respond timeously in accordance with the service levels stipulated in the table below. The Quality Management processes implemented throughout the SAP Support organisation are certified globally according to the international standard ISO 9002. The workflow between the support levels is defined in an internal Support Level Agreement (SLA) and SAP's Support Process Monitoring team ensures that requests are forwarded smoothly between the support levels. SAP Africa, SAP AG and their respective licensors shall use their best endeavours and efforts to ensure that the below mentioned Initial Reaction Times and Projected Resolution Times ("PRT") are achieved in 80% of all cases; Priority Very High (1) High (2) Medium (3) Low (4) Initial Reaction Time (IRT) 30 minutes 2 hours 4 hours 8 hours Projected Resolution Time (PRT) 1 day 3 days 7 days 1 4 days Priority 1: d, h, min = days, hours, minutes in actual time Priority 2, 3, 4: d, h, min = days, hours, minutes during office hours + + + +- 61 - TELKOM CONTRACT No. 076C/01 The initial reaction time (IRT) is the time elapsed between message receipt at SAP ("Send to SAP" in SAP Service System) and initial contact with the customer or change of the message status. The Projected Resolution Time (PRT) is the time elapsed between IRT and providing a solution. Priorities of messages are defined as follows: Very High or Priority 1 A message with priority "Very high" is justified when critical restrictions in day-to-day operations are encountered. Critical tasks, especially time-critical jobs, cannot be performed, due to a total system shutdown or a malfunction in a main function of the production SAP system. This message requires immediate processing, as the malfunction can result in serious losses. High or Priority 2 A message with priority "High" is justified when serious restrictions in day-to-day operations are encountered. Necessary tasks cannot be performed due to a malfunction or failed function in the Software that is urgently required in the current situation. The message requires rapid processing, because the continuing malfunction could cause a serious interruption in the entire production system. Medium or Priority 3 A message with priority "Medium" is justified when restrictions in day-to-day operations are encountered. This is caused by a malfunction or failed functionality in the system. Low or Priority 4 A message with priority "Low" is justified when day-to-day operations are not affected or only affected in a minor fashion. This is caused by a malfunction or failed functionality in the system that is not used daily or is only used rarely. (Problem situations in test systems will normally result in a priority that is one level lower than the identical problem in a production system). + + + +- 62 - TELKOM CONTRACT No. 076C/01 On the anniversary of this AGREEMENT, the parties shall enter into discussions and negotiations for the purposes of reviewing the aforestated maintenance service level terms, more particularly, the related commercial terms thereof including, the maintenance fee and/or percentages; the response, processing and resolution times; the penalties that may be payable by SAP Africa and/or its licensors for failing to comply with such times and other aspects of the maintenance services. The parties acknowledge that the market for the SOFTWARE in South Africa is limited and that therefor it may be difficult to ascertain market conditions for the purposes of reviewing such commercial and related terms. Accordingly, the parties shall take cognisance of market conditions in other countries where the SOFTWARE is being used. Should the parties be unable to agree upon any such amendments within 30 days from the anniversary date, then such dispute shall be referred for determination by the Arbitration Foundation of Southern Africa ("AFSA") in accordance with the rules of AFSA and to an arbitrator appointed by the Chairperson of AFSA upon application by either party. The arbitrator shall upon request of either party, appoint a suitably qualified expert to assist him in determining the dispute. Except in the case of manifest error, the arbitrators' ruling shall be final and binding upon the parties but shall be without prejudice to a party's other rights and obligations arising from the AGREEMENT. + + + +- 6 3 - TELKOM CONTRACT No. 076C/01 Customer Message Support The process of customer message support is the interface between development and service. The process steps that impact upon the SLA are customer message recording, preliminary checking, search for relevant error notes (known problem solution), and problem analysis. Life Cycle of a Customer Message Refer to accompanying PDF for diagram Telkom customers can access the SAP's Frontend or SAPNet-Web Frontend and create their own requests and messages. Customer requests and messages that are received in writing via fax (+27 11 2356004) are first processed by the support facility of the Local Support Centre and then recorded for further processing in SAP's internal customer support system. A request or message is automatically assigned to an administrator in the SAP support organization (Local Support and Regional Support for the Software) based on the components assigned to it. Performing preliminary checks, searching for troubleshooting information The processor first checks whether the problem report is complete, and whether an entry has already been made in the system containing a solution to the reported problem. This search is conducted semi-automatically in SAP's support system. If an entry is found containing a solution to the problem, then the person who had submitted the problem report is notified in writing via SAPNet and the problem is closed for SAP. Problem Analysis If, following preliminary analysis, the Local Support level decides that the problem must be handled by an expert in the respective component, the problem is passed on to the Regional + + + +- 64 - TELKOM CONTRACT No. 076C/01 Support level. If the problem involves a program error or if the processor cannot find a solution despite intensive analysis, he or she transfers it to the Development Support level. The responsibility for Development Support lies with the user departments of the development areas. If no relevant error note (known solution) exists, the customer shall provide SAP with sufficient test time and support, as an attempt is made to reproduce the reported problem and to determine whether it is a problem with the software (at SAP or in the customer's system, provided that the latter does not negatively affect the customer's operations). If this reproduction of the problem is not possible, the next time the problem occurs, additional analyses are performed to narrow down the source of the problem. In the meantime, the problem receives the status of "customer action" in the support system. If special handling by an expert is required, then it is relayed to Development Support. Escalation Management In the event of SAP's Support Management deciding that the standard support processes are insufficient to solve a critical customer situation (problems as described in point 2 above) a formal escalation process is invoked. During this process, SAP will assign the required SAP personnel to the customer remotely (via a remote connection) and/or on site, as appropriate. These resources will be under the direct supervision of SAP's management and the customer will not incur any costs. A formal de-escalation process, involving an assigned Customer Services Manager, will take place once the critical issue has been resolved. During the implementation phase prior to the SOFTWARE being installed, SAP AFRICA and TELKOM will negotiate with each other to discuss and agree upon an appropriate detailed escalation process for the Maintenance Services that SAP AFRICA and its licensors will provide and that will apply during the said implementation phase and the "go-live" stage. The parties shall also determine an escalation process that is appropriate for TELKOM'S needs and business requirements when USING the SOFTWARE. + + + +-65- TELKOM CONTRACTN0. 076C/01 THUS DONE AND SIGNED at WOODMEAD by SYSTEMS APPLICATIONS PRODUCTS (AFRICA) (PROPRIETARY) LIMITED on this 31st day of March 2001 /S/ /S/ (who warrants his authority to so sign) For: TELKOM SOUTH AFRICA LIMITED (who warrants his authority to so sign) /s/ THUS DONE AND SIGNED at Pretoria by the TELKOM SOUTH AFRICA LIMITED on this 31st day of March 2001 in the presence of the undersigned witnesses AS WITNESSES Signature /S/ Signature /S/ + + + +- 66 - TELKOM CONTRACT No. 076C/01 ANNEXURE 3 to AGREEMENT between SYSTEMS APPLICATION PRODUCTS (AFRICA) (PTY) LTD with TELKOM SOUTH AFRICA LIMITED 1. ESCROW ARRANGEMENTS 1. 1 SAP Africa warrants that the entire source code for the SOFTWARE owned by or licensed by SAP AG and/or COMMERCE ONE INC.. ("Source Code"), together with related DOCUMENTATION as it is, or becomes available, shall be deposited into an escrow account by no later than 30 June 2001 which is maintained at Volksbank Wiesloch, Germany (the "Escrow Agent"), pursuant to an agreement between the Escrow Agent and SAP AG (the "Escrow Agreement"). The Escrow Agreement provides that the Escrow Agent shall, under certain circumstances, release the Source Code and related DOCUMENTATION to TELKOM. 1. 2 SAP Africa further warrants that SAP AG will from time to time (as soon as the relevant RELEASE and/or VERSION has been finalised) deposit into the escrow account copies of all new versions of the Source Code and related DOCUMENTATION encompassing any and all copies of all versions of the Source Code and related DOCUMENTATION encompassing any and all CORRECTION LEVELS. + + + +- 67 - TELKOM CONTRACT No. 076C/01 1. 3 TELKOM may, at its own cost, verify that the new version of the Source Code is deposited with the Escrow Agent. 1. 4 Without prejudice to any express provision to the contrary contained in the AGREEMENT, TELKOM shall have the right to access the Source Code if SAP: 1. 4. 1 is in default of any material term, condition or provision of this AGREEMENT as a consequence of which the TELKOM is prevented from having substantial USE and benefit of the SOFTWARE in terms thereof and remains in default for a period of 30 (thirty) days from receipt of the first written request to remedy the default concerned; or 1. 4. 2 ceases to carry on business or to provide the particular USE, service or benefit referred to in clause 12. 4. 1; or 1. 4. 3 becomes bankrupt or has a receiving order made against it, or is placed in liquidation or under judicial management in either case, whether provisional or final, or is deregistered. 1. 5 TELKOM shall not have the right to access the Source Code if SAP AG or a SAP AG affiliate agrees to assume, carries out and continues to carry out, SAP Africa's maintenance obligations under this AGREEMENT, pursuant to the terms and conditions hereof. 1. 6 TELKOM recognises and agrees that the Source Code and all parts thereof, is the valuable proprietary and confidential information and trade secrets of SAP AG, and shall remain so even after a release of the Source Code to TELKOM under the Escrow Agreement. In the event of a release of the Source Code to TELKOM under this AGREEMENT, TELKOM agrees to hold same in strict confidence and to take appropriate action to preserve its confidentiality, and + + + +- 68 - TELKOM CONTRACT No. 076C/01 TELKOM shall have a non-exclusive, non-transferable LICENCE to USE the Source Code solely for its own use in order to support and maintain the SOFTWARE and for no other purpose whatsoever. TELKOM shall USE the Source Code only at its own premises on its own data processing equipment or third parties in accordance with clause 3 of the AGREEMENT. TELKOM agrees not to copy the Source Code, nor to disclose it to any third party except Agents retained by TELKOM to assist in maintaining SOFTWARE, provided that no such Agent is in the business of marketing or developing software competitive to the SOFTWARE. + + + +-69- TELKOM CONTRACT No. 076C/01 THUS DONE AND SIGNED at WOODMEAD by SYSTEMS APPLICATIONS PRODUCTS (AFRICA) (PROPRIETARY) LIMITED on this 31st day of March 2001 /S/ For SYSTEMS APPLICATIONS PRODUCTS (AFRICA)(Pty)limited / (who warrants his authority to so sign) For: TELKOM SOUTH AFRICA LIMITED (who warrants his authority to so sign) /s/ THUS DONE AND SIGNED at Pretoria by the TELKOM SOUTH AFRICA LIMITED on this 31st day of March 2001 AS WITNESSES Signature /S/ Signature /S/ \ No newline at end of file diff --git a/full_contract_txt/THERAVANCEBIOPHARMA,INC_05_08_2020-EX-10.2-SERVICE AGREEMENT.txt b/full_contract_txt/THERAVANCEBIOPHARMA,INC_05_08_2020-EX-10.2-SERVICE AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..14aa0fadc4c8266b83c631af170d7ff2bc572f69 --- /dev/null +++ b/full_contract_txt/THERAVANCEBIOPHARMA,INC_05_08_2020-EX-10.2-SERVICE AGREEMENT.txt @@ -0,0 +1,143 @@ +Exhibit 10.2 + +STRICTLY PRIVATE AND CONFIDENTIAL + +1 April, 2020 + +THERAVANCE BIOPHARMA UK LIMITED and BRETT HAUMANN + +SERVICE AGREEMENT + + + + + +THIS AGREEMENT is entered into between the parties on 1 April, 2020. + +PARTIES (1) Theravance Biopharma UK Limited is a company registered in the United Kingdom and whose registered office is at 12 New Fetter Lane, London, United Kingdom, EC4A 1JP (the "Employer"); and (2) Brett Haumann of [address removed] (the "Executive"). + +AGREED TERMS 1. Definitions 1.1 The following terms shall have the following meanings unless the context requires otherwise: "Capacity" means as agent, consultant, director, employee, owner, partner, shareholder or otherwise; + +"Commencement Date" means 1 April 2020; + +"Confidential Information" means trade secrets, knowhow and information (whether or not recorded in documentary form, or stored on any magnetic or optical disk or memory) relating to the business, products, affairs and finances of any Group Company or any of their suppliers, customers, agents, shareholders or management, including (but not limited to): (a) business, financial or strategic information or plans; (b) technical data and know-how; (c) litigation, potential litigation or legal advice; (d) employment terms or pay of the Executive or others; (e) commercial terms with business partners; (f) products or services in the course of development; (g) processes or know-how; (h) details of any joint ventures, which (in each case) the Executive creates, develops, learns, receives or obtains in connection with the Executive's employment before or after the date of this agreement, whether or not such information is marked confidential; + +"Copies" means copies or records of any Confidential Information in whatever form (including, without limitation, in written, oral, visual or electronic form or on any magnetic or optical disk or memory and wherever located) including, without limitation, extracts, analysis, studies, plans, compilations or any other way of representing or recording and recalling information which contains, reflects or is derived or generated from Confidential Information; + +"Garden Leave" means any period during which the Company has exercised its rights under clause 19; "Group Company" means the Company and any group undertaking (as such term is defined in section 1161(5) of the Companies Act 2006) of the Company in any jurisdiction from time to time; "Intellectual Property Rights" means patents, rights to Inventions, copyright and related rights, trademarks, trade names and domain names, rights in get-up, rights in goodwill or to sue for passing off, unfair competition rights, rights in designs, rights in computer software, database rights, topography rights, rights in confidential information (including know-how and trade secrets) and any other intellectual property rights, in each case + +2 + + + + + +whether registered or unregistered and including all applications (or rights to apply) for, and renewals or extensions of, such rights and all similar or equivalent rights or forms of protection which subsist or will subsist now or in the future in any part of the world; "Invention" means any invention, idea, discovery, development, improvement or innovation, whether patentable or capable of registration, and whether or not recorded in any medium; "Permitted Investment" has the meaning given to it in clause 14.2; and "Termination" means the termination of the Executive's employment under this Agreement however caused, whether lawful or not, and "Termination Date" means the date of Termination. 1.2 In this Agreement, unless the context otherwise requires: 1.2.1 words in the singular include the plural and in the plural include the singular; 1.2.2 any phrase introduced by the terms "including", "include", "in particular" or any similar expression shall be construed as illustrative and shall not limit the sense of the words preceding those terms; 1.2.3 the headings are inserted for convenience only and shall not affect its construction; 1.2.4 reference to a particular law is a reference to it as it is in force for the time being taking account of any amendment, extension or re-enactment and includes any subordinate legislation for the time being in force made under it; 1.2.5 reference to any regulator or other body includes a reference to any successor. 2. Term of Employment 2.1 The Executive's employment with the Company will commence on the Commencement Date and shall continue, subject to the remaining terms of this Agreement, until terminated by either party giving the other the following minimum advance written notice: 2.1.1 6 weeks' notice; + +2.1.2 such other longer period as required by law. + +2.2 The Executive's period of continuous employment for the purposes of the Employment Rights Act 1996 commenced on 29 October 2013. 3. Pre-Conditions and Warranties The Executive's employment under this Agreement is conditional upon the Executive having produced to the Company for inspection original documents proving the Executive's right to work lawfully in the United Kingdom. + +3 + + + + + +4. Duties 4.1 The Executive shall serve as Chief Medical Officer and Senior Vice President, Development (reporting to Rick Winningham) or in such other role as the Company may determine. 4.2 During the employment the Executive shall: 4.2.1 devote the whole of their working time, attention and abilities to the business of the Company and any other Group Company for which the Executive is required to work from time to time; 4.2.2 promptly make such reports to the Company in connection with the Executive's duties or other such matters at such times as are reasonably required; 4.2.3 faithfully and diligently exercise such powers and perform such duties for each Group Company as may from time to time be assigned by the Company; 4.2.4 comply with all reasonable and lawful directions given by the Company; 4.2.5 report their own wrongdoing and any wrongdoing or proposed or potential wrongdoing of any other employee, officer or consultant of any Group Company to the Company immediately on becoming aware of it; 4.2.6 use their utmost endeavours to promote, protect, develop and extend the business of the Company; 4.2.7 comply with their common law, statutory, regulatory and fiduciary duties as well as any policies put in place by the Company from time to time; 4.2.8 exercise the Executive's powers jointly with such other person that the Company may appoint; and 4.2.9 at all times conduct the business of each Group Company for which the Executive is responsible in a lawful and ethical manner. 5. Place of Work 5.1 The normal place of work of the Executive is at the Executive's home (or such other location as agreed between the Company and the Executive from time to time). 5.2 The Executive agrees to travel on any business of any Group Company (both within the United Kingdom and abroad) as may be required for the proper performance of the Executive's duties. 5.3 The Executive shall not be required to work outside the United Kingdom for any continuous period of more than one month. If the Executive is required to do so, their terms of employment during this time will be communicated with them separately. + +4 + + + + + +6. Hours of Work 6.1 The Executive shall work such hours as are required for the proper and efficient performance of their duties including the Company's normal business hours which are 9am until 5:30pm from Monday to Friday. 6.2 The Executive agrees that the limit on weekly working time contained in Regulation 4 of The Working Time Regulations 1998 does not apply because Regulation 20 applies to the Executive. 7. Salary 7.1 The Executive shall be paid a basic salary of £448,903 per annum subject to deductions required by law. The Executive's salary shall accrue from day to day, shall be payable in equal monthly instalments in arrears on or about the last day of each month. 7.2 The salary paid to the Executive will be reviewed on or around 1 April 2021. The Company is under no obligation to award an increase following a salary review. 7.3 The Company may deduct from the salary or any other sums payable to the Executive any money owed to any Group Company by the Executive. The Executive will reimburse the Company upon demand for the personal use of any Company credit card, any other unauthorised transactions entered into by the Executive or any overpayments made to the Executive. 8. Expenses The Company shall reimburse any reasonable travel expenses wholly, exclusively and necessarily incurred by the Executive in the proper performance of the Executive's duties under this Agreement subject always to the rules and policies of the Company from time to time and subject to the Executive providing receipts or other evidence of payment as the Company may require. 9. Annual Bonus 9.1 The Executive shall be entitled to participate in an annual bonus plan on such terms and with such individual, team or corporate targets as the Company may communicate from time to time which shall provide the Executive with an opportunity to be considered each year for a bonus equivalent to up to 50% of the Executive's basic salary. The Company shall be entitled to determine whether such targets have been met and where such targets have been met in full or part shall have a discretion to determine whether to make payments and, if so, in what amount and when. 9.2 The Company may suspend, alter or discontinue any bonus payment(s) or any bonus plan and its eligibility requirements at any time (whether generally or in relation to the Executive only) at its absolute discretion. If the Executive receives any bonus payment the Company is not obliged to make any further bonus payments and any bonus payment will not become part of the Executive's contractual remuneration or fixed salary. In order to be eligible to receive a bonus payment, the Executive must be in the Company's employment and not under notice, given or received on the date that the bonus is paid. Bonus entitlement does not accrue in the course of a year, and the Executive is not entitled to + +5 + + + + + +payment of a bonus, or any pro rata portion of it, if the Executive leaves employment prior to the date that the bonus is paid. 9.3 The Executive shall not be eligible to be considered for any bonus nor shall any bonus be paid if the Executive is subject to any disciplinary action or investigation at the date any bonus is being considered and/or at the bonus payment date (as applicable) although the Company may reconsider the matter upon the conclusion of the disciplinary action or investigation in question. 10. Pensions 10.1 The Company intends to comply with the employer pension duties in respect of the Executive in accordance with Part 1 of the Pensions Act 2008. 10.2 The Executive's participation in the Company's pension arrangements is subject to the rules of the relevant scheme and the statutory requirement as each are varied from time to time. In particular the Company reserves the right to change the scheme provider, the funds available, the charging structure and the default fund from time to time. 11. Benefits During the course of employment the Executive may participate in benefit plans operated by the Company. The Executive's participation in any such benefit plans are subject to the terms and conditions of any such plan. The Company reserves the right to discontinue, vary or amend each benefit plan (including the level of cover) at any time on reasonable notice to the Executive. 12. Holidays 12.1 The Executive shall be entitled to 28 days' paid holiday in each holiday year (which includes public holidays) to be taken at times convenient to the Company and authorised in advance. 12.2 The Company's holiday year runs from 1 January to 31 December. If the Executive's employment commences or terminates part way through a holiday year, the Executive's entitlement during that holiday year shall be calculated on a pro rata basis rounded up to the nearest whole day. 12.3 The Executive shall have no entitlement to any payment in lieu of accrued but untaken holiday except on Termination. The amount of such payment in lieu shall be 1/260 of the Executive's salary for each untaken day of entitlement. 12.4 If on Termination the Executive has taken in excess of their accrued holiday entitlement, the Company shall be entitled to recover from the Executive by way of deduction from any payments due to the Executive or otherwise, one day's pay for each excess day calculated at 1/260 of the Executive's salary. 12.5 If either party has served notice to terminate the employment, the Company may require the Executive to take any accrued but unused holiday entitlement during the notice period. Any accrued but unused holiday entitlement shall be deemed to be taken during any period of Garden Leave. + +6 + +th + +th + + + + + +13. Sickness 13.1 The Company may in its absolute discretion pay the Executive an amount equal to the Executive's normal basic pay ("Company Sick Pay") for the first 3 months of sickness absence in any rolling 12-month period, subject to such conditions as the Company may specify. Company Sick Pay will include any entitlement to statutory sick pay or any benefits provided by virtue of any permanent health insurance scheme. Company Sick Pay is also subject to the Executive's compliance with this Agreement and will not be paid in respect of any period of illness that commences during the first 6 months of the Executive's employment or whilst the Company is addressing performance or disciplinary issues. 13.2 The Executive must comply with the Company's sickness absence notification procedures. Any period of absence of up to five days may be self-certified and any period of absence of more than five days must be supported by doctor's certificate. 13.3 The Executive consents to undergo a medical examination by a doctor nominated by the Company at the Company's request and expense. The Executive agrees that any report produced in connection with any such examination may be disclosed to the Company and the Company may discuss the contents of any such report with the relevant doctor. 13.4 The rights of the Company to terminate the Executive's employment under the terms of this Agreement apply even when such termination would or might cause the Executive to forfeit any entitlement to sick pay, permanent health insurance or other benefits. 14. Outside Activities and Interests 14.1 The Executive shall not during the employment except as a representative of the Company or with the Company's prior written consent (whether directly or indirectly, paid or unpaid) be employed, engaged, concerned or interested in any other actual or prospective business, organisation, occupation or profession. 14.2 Nothing in this Agreement shall prevent the Executive from holding an investment by way of shares or other securities to in any entity listed or dealt on a recognised stock exchange (a "Permitted Investment") provided always that during the term of the employment the Permitted Investment shall not constitute more than 3% of the issued share capital of the entity concerned . 15. Confidential Information 15.1 Without prejudice to the Executive's common law and fiduciary duties, the Executive shall not during employment or at any time after Termination and whether for their own benefit or for the benefit of any third party: 15.1.1 use any Confidential Information; or 15.1.2 disclose any Confidential Information to any person, company or other organisation whatsoever, except in the proper course of their duties, as required by law or as authorised by the Company in writing. + +7 + + + + + +15.2 The Executive shall be responsible for protecting the confidentiality of the Confidential Information and shall use best endeavours to prevent the misuse of Confidential Information by others. 15.3 All Confidential Information and Copies shall be the property of the Company and the Executive shall not make any Copies save in the proper course of their employment. 15.4 Save as authorised by the Company, the Executive shall not make or publish any comment regarding to the business or affairs of any Group Company or any Group Companies' current or former employees or directors to the media (including on social media). 16. Intellectual Property 16.1 The Executive shall disclose to the Company details of all Inventions and of all works embodying Intellectual Property Rights made solely or jointly with others at any time during the term of the employment which relate to, or are capable of being used in, the business of any Group Company whether or not in the course of their ordinary duties and whether or not made in working time (together, the "Company IP"). The Executive acknowledges that all Intellectual Property Rights subsisting (or which may in the future subsist) in such Company IP shall automatically, on creation, vest in the Company absolutely. To the extent that the Company IP does not vest automatically in the Company the Executive hereby assigns all right, title and interest in the Company IP to the Company with full title guarantee by way of a present assignment of all future rights and shall otherwise hold them on trust for the Company. The Executive agrees promptly to execute all documents and to do all acts as may, in the opinion of the Company, be necessary or desirable to give the Company full benefit of this clause. 16.2 The Executive irrevocably waives all "moral rights" under the Copyright, Designs and Patents Act 1988 (and, to the fullest extent permitted by law, all similar rights in other jurisdictions) which the Executive has or will have in any Company IP. 16.3 By way of security for the Executive's obligations under this Agreement, the Executive irrevocably appoints the Company to be the Executive's attorney to execute any instrument or to do anything and generally to use the Executive's name for the purpose of giving the Company or i ts nominee the benefit of this clause. The Executive acknowledges in favour of a third party that a certificate in writing signed by the Company that any instrument or act falls within the authority conferred by this clause shall be conclusive evidence that such is the case. 16.4 The Executive agrees that the Executive's work for the Company will be the Executive's own original work and the Executive will not violate the intellectual property rights of third parties. The Company does not want and does not need any confidential information relating to any former employer of the Executive and the Executive agrees to not to copy, use or disclose such information. 17. Payment in Lieu of Notice 17.1 The Company may, in its sole and absolute discretion, terminate the Executive's employment under this Agreement at any time and with immediate effect by notifying the Executive that the Company is exercising its right under this clause 17 and that it will make a payment in l ieu of not ice ("PILON") to the Executive. The Executive's employment will terminate immediately and any PILON due to the Executive in accordance with the + +8 + + + + + +provisions of this clause 17 will be paid within 28 days. The PILON will be equal to the basic salary (as at the Termination Date) which the Executive would have been entitled to receive under this Agreement during the notice period referred to at clause 2 (or, if notice has already been given, during the remainder of the notice period) less deductions required by law. 17.2 The Executive shall have no right to receive a PILON unless the Company has exercised its discretion in clause 17.1. 17.3 Notwithstanding clause 17.1, the Executive shall not be entitled to any PILON if the Company would otherwise have been entitled to terminate the Executive's employment under this Agreement without notice in accordance with clause 18. In that case the Company shall also be entitled to recover from the Executive any PILON already made. 18. Termination Without Notice 18.1 The Company may terminate the Executive's employment under this Agreement with immediate effect without notice and with no liability to make any further payment to the Executive (other than in respect of amounts accrued at the Termination Date) if in the reasonable opinion of the Company the Executive: 18.1.1 is guilty of gross misconduct; or 18.1.2 commits any serious or repeated breach or non-observance of any of the provisions of this Agreement or refuses to comply with any reasonable and lawful directions of the Company; or 18.1.3 commits any serious or repeated breach of the Company's policies or procedures; or 18.1.4 is grossly negligent or grossly incompetent in the performance of their duties; 18.1.5 is declared bankrupt or makes any arrangement with or for the benefit of their creditors or has a county court administration order made under the County Court Act 1984; or 18.1.6 is convicted of any criminal offence (other than an offence under any road traffic legislation in the United Kingdom or elsewhere for which a fine or non-custodial penalty is imposed); or 18.1.7 is no longer eligible to work in the United Kingdom; or 18.1.8 is guilty of any fraud or dishonesty or acts in any manner which brings or is likely to bring the Executive or any Group Company into disrepute or is materially adverse to the interests of any Group Company; or 18.1.9 makes any statement or other form of communication that disparages or undermines the goodwill or reputation of any Group Company. 18.2 The rights of the Company under clause 18.1 are without prejudice to any other rights that it might have at law to terminate the Executive's employment or to accept any breach of + +9 + + + + + +this Agreement by the Executive as having brought the Agreement to an end. Any delay by the Company in exercising it rights to terminate shall not constitute a waiver thereof. 18.3 The Company may suspend the Executive from any or all of the Executive's duties during any period in which the Company is investigating any disciplinary matter involving the Executive or while any disciplinary procedure or regulatory investigation is outstanding. Any such suspension shall not constitute disciplinary action. During any period of suspension, the Company may impose the same conditions that apply to Garden Leave. 19. Garden Leave 19.1 Following service of notice to terminate the employment by either party, or if the Executive purports to terminate the employment in breach of contract, the Company may by written notice place the Executive on Garden Leave for the whole or part of the remainder of the employment. 19.2 During any period of Garden Leave: 19.2.1 the Company shall be under no obligation to provide any work to the Executive and may revoke any powers the Executive holds on behalf of any Group Company; 19.2.2 the Executive shall continue to receive their basic salary but shall not be entitled to receive any bonus or other incentives in respect of the period of Garden Leave; 19.2.3 the Company may require the Executive to carry out alternative duties or to only perform such specific duties as are expressly assigned to the Executive, at such location (including the home of the Executive) as the Company may reasonably decide; 19.2.4 the Company may appoint another person to carry out the Executive's normal duties; 19.2.5 the Executive shall remain an employee of the Company and bound by the terms of this Agreement; 19.2.6 the Executive shall be contactable during each working day (except during any periods taken as holiday in the usual way); 19.2.7 the Company may exclude the Executive from any premises of any Group Company, require the Executive to return any Group Company property and remove the Executive's access from some or all of its information systems; and 19.2.8 the Company may require the Executive not to contact or deal with (or attempt to contact or deal with) any officer, employee, consultant, client or other business contact of any Group Company as it may reasonably determine. 20. Obligations Upon Termination 20.1 On Termination or, if earlier, at the start of a period of Garden Leave following the service of notice or purported Termination by the Executive, the Executive shall: + +10 + + + + + +20.1.1 immediately deliver to the Company all documents, books, materials, records, correspondence, papers, Copies, Confidential Information and other business information (on whatever media and wherever located) relating to the business or affairs of any Group Company or its business contacts, any keys and any other property of any Group Company, which is in the Executive's possession or control; 20.1.2 irretrievably delete any information relating to the business of any Group Company stored on any magnetic or optical disk or memory (including on any personal computer, personal device, personal email account or web account), and all matter derived from such sources which is in their possession or under their control outside the premises of the Company; 20.1.3 provide such handover of their duties as the Company shall consider appropriate; and 20.1.4 provide a signed statement confirming full compliance with the obligations under clauses 20.1.1 and 20.1.2 together with such reasonable evidence of compliance as the Company may request. 21. Post Termination Restrictions During the term of employment and for one (1) year thereafter, the Executive will not directly or indirectly, either themselves or through others, encourage or solicit any employee of the Company to leave the Company for any reason. This obligation shall not affect any responsibility the Executive has as an employee of the Company with respect to the bona fide hiring and firing of Company personnel. 22. Statutory Particulars 22.1 The Executive is subject to the Company's disciplinary and grievance procedures, copies of which are available upon request (although the Company reserves the right to deviate from these procedures in light of the Executive's seniority). These procedures do not form part of the Executive's contract of employment. 22.2 If the Executive wishes to raise a grievance or appeal a disciplinary decision the matter should be raised in writing with Rick Winningham. 22.3 There is no collective agreement which affects the Executive's employment or this Agreement. 23. Workplace Privacy 23.1 The Executive's attention is drawn to the Company's Privacy Notice which is available upon request. 23.2 The Executive consents to the Company monitoring their communication and electronic equipment including, without limitation, the Company's telephone, chat and e-mail systems, information stored on the Company's computer equipment (including all electronically stored information that is the property of the Company), recordings from the Company's closed circuit television cameras and any other computer equipment or other device used by the Executive in the performance of their duties. + +11 + + + + + +24. General 24.1 The Executive will, at the request of the Company at any time after the Termination Date, co-operate and provide assistance to any Group Company in any internal investigation, administrative, regulatory, quasi-judicial proceedings or any threatened or actual litigation concerning any Group Company where the Executive is aware of any facts or other matters which the Company reasonably considers is relevant to such process or legal proceedings (including, but not limited to, giving statements/affidavits, meeting with their legal and other professional advisers, attending any legal hearing and giving evidence) on the understanding that the Company will pay any reasonable expenses for which receipts and other supporting documents are provided to the reasonable satisfaction of the Company and provided any expense is authorised in advance by the Company). 24.2 If the Executive's employment is terminated at any time by reason of any reconstruction or amalgamation of any Group Company, whether by winding up or otherwise, and the Executive is offered employment with any concern or undertaking involved in or resulting from the reconstruction or amalgamation on terms which (considered in their entirety) are no less favourable to any material extent than the terms of this Agreement, the Executive acknowledges and agrees that there shall be no claim against the Company or any undertaking arising out of or connected with such termination. 24.3 This clause applies if the Executive subscribes for or is awarded shares in the Company or any Group Company or participates in any share option, restricted share, restricted share unit, long term incentive, carried interest, co-invest or any other form of profit sharing, incentive, bonus or equity plan or arrangement (each, an "Incentive") or may do so. Upon Termination, the Executive's rights (if any) in respect of each Incentive shall be solely determined by the articles of association, rules or other documents governing each Incentive which are in force on the Termination Date and the Executive hereby irrevocably waives all claims or rights of action in respect of the loss of any rights or benefits under or in respect of any Incentive granted or not yet granted to the Executive (including any loss relating to the lapse of, or their ineligibility to exercise, any share options, the value of any shares, the operation of any compulsory transfer provisions or the operation of any vesting criteria) + +24.4 A notice given to a party under this Agreement shall be in writing in the English language and signed by or on behalf of the party giving it. It shall be delivered by hand or sent to the party at the address given for that party in this Agreement, in the case of the Executive to their personal email address or as otherwise notified in writing to the other party. A notice given by email shall be deemed to take effect one hour after it is sent, a notice sent by first class post shall be deemed to take effect on the next working day and notice sent by courier upon delivery at the address in question. A notice required to be given to the Company under this Agreement shall not be validly given if sent by email. 24.5 This Agreement and any document referred to in it constitutes the entire agreement between the parties and supersedes and extinguishes all previous discussions, correspondence, negotiations, drafts, agreements, promises, assurances, warranties, representations and understandings between them, whether written or oral, relating to its subject matter. + +24.6 The Executive agrees that in entering into this Agreement the Executive does not rely on and shall have no remedies in respect of, any statement, representation, assurance or warranty (whether made innocently or negligently) that is not expressly set out in this + +12 + + + + + +Agreement. The Executive waives any claim for innocent or negligent misrepresentation or negligent misstatement including in respect of any statement set out in this Agreement. 24.7 No variation or agreed termination of this Agreement shall be effective unless it is in writing and signed by the parties (or their authorised representatives). If the Executive commences employment or continues in employment without executing a copy of this Agreement and fails to object within one month of the Commencement Date then the Executive will be deemed to have agreed to its terms. 24.8 The Executive shall not be contractually entitled to receive any benefit from the Company which is not expressly provided for by this Agreement. 24.9 This Agreement may be executed in any number of counterparts, each of which, when executed and delivered, shall be an original, and all the counterparts together shall constitute one and the same agreement. 24.10 The Contracts (Rights of Third Parties) Act 1999 shall only apply to this Agreement in relation to any Group Company. No person other than the parties to this Agreement and any Group Company shall have any rights under it and it will not be enforceable by any person other than those parties. 24.11 This Agreement and any dispute or claim arising out of or in connection with it or its subject matter or formation (including non-contractual disputes or claims) shall be governed by and construed in accordance with the law of England. 24.12 Each party irrevocably agrees that the courts of England shall have exclusive jurisdiction to settle any dispute or claim arising out of or in connection with this Agreement or its subject matter or formation (including non-contractual disputes or claims). + +13 + + + + + +Signed by Rick E Winningham for and on behalf of Theravance Biopharma UK Limited + +/s/ Rick E Winningham + +Signature Signed as a deed by Brett Haumann in the presence of: /s/ Brett Haumann Signature + +/s/ Connor Haumann Witness's Signature Name of witness Connor Haumann Address of witness [address removed] Occupation of witness Student + +14 \ No newline at end of file diff --git a/full_contract_txt/TICKETSCOMINC_06_22_1999-EX-10.22-SPONSORSHIP AGREEMENT.txt b/full_contract_txt/TICKETSCOMINC_06_22_1999-EX-10.22-SPONSORSHIP AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..b8a6b8d7c8fad77ddd4a4dda687c575c48fd4177 --- /dev/null +++ b/full_contract_txt/TICKETSCOMINC_06_22_1999-EX-10.22-SPONSORSHIP AGREEMENT.txt @@ -0,0 +1,43 @@ +1 + +CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR CERTAIN REDACTED PROVISIONS OF THIS AGREEMENT. THE REDACTED PROVISIONS ARE IDENTIFIED BY THREE ASTERISKS AND ENCLOSED BY BRACKETS. THE CONFIDENTIAL PORTION HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. + + EXHIBIT 10.22 + + MP3.com, Inc. P.O. BOX 910091 San Diego, CA 92191 (619) 558-9390 + + SPONSORSHIP AGREEMENT + +This Sponsorship Agreement ("Agreement") is made an entered into on February 17, 1999 ("Effective Date"), by and between Tickets.com, Inc., a Delaware corporation, located at 4061 Glencoe Ave., Marina del Rey, CA 90292 ("Tickets") and MP3.com, Inc., having an address at P.O. Box 910091, San Diego, CA 92191-0091 ("MP3.com"). MP3.com owns and operates the website located at www.mp3.com (the "Website"). + +1. Form of Sponsorship. During the term of this Agreement, Tickets shall be MP3.com's exclusive partner/source for sports, entertainment, and travel tickets, and MP3.com shall include a Tickets Portal on the "Music" page and the "Pop," "Rock" and "Alternative" genre pages on the Website. A "Portal" is defined as a web graphic with the dimensions not to exceed 125 x 125 pixels and 20Kb in size. The content of the Portal shall be supplied by Tickets and shall conform with reasonable technical and content specifications supplied by MP3.com. + +2. Impressions. MP3.com agrees to deliver a guaranteed minimum of 3,000,000 Impressions per month for the term of this Agreement. An "Impression" is defined as the display of the Tickets Portal to a user on one of the above referenced pages. + +3. Sponsor Fees. Tickets agrees to pay MP3.com, during the term of this Agreement, as follows: (i) $[***] payable on the Effective Date; (ii) $[***] payable on or before one month subsequent to the Effective Date; (iii) $[***] payable on or before two months subsequent to the Effective Date; (iv) $[***] payable on or before three months subsequent to the Effective Date; (v) $[***] payable on or before four months subsequent to the Effective Date; (vi) $[***] payable on or before five months subsequent to the Effective Date. Any late payments under this Agreement will be assessed a service fee of one and one-half percent (1.5%) per month, to the extent allowed by law. + +4. Term and Termination. This Agreement shall commence on the Effective Date and shall remain in full force and effect until one (1) year subsequent to the Effective Date, provided however, that Tickets may terminate this Agreement for any reason upon thirty (30) days' notice to MP3. com at any time prior to the expiration of sixty (60) days subsequent to the Effective Date. Furthermore, for a thirty (30) day period, beginning thirty (30) days prior to the first anniversary of this Agreement, Tickets shall have the right to renew the Agreement for another year with Sponsor Fees that do not exceed a [***] percent increase over the existing Sponsor Fees. Any payments which have accrued prior to the date of termination shall remain due and payable. Sections 6, 7, and 8 shall survive termination of this agreement. + +5. Measurement. Upon request, Tickets shall have access to pertinent statistics related to Impressions covering the period of this contract. Tickets agrees to accept MP3.com's measurement of Impressions (the "Count") according to MP3.com's logs and other tracking devices and/or software MP3.com may use, provided however, that Tickets shall have the right to audit MP3.com's records in this regard. If Tickets reasonably disputes the Count pursuant to this Agreement, then Tickets shall have the right to select the independent auditor of its choice to conduct an audit of MP3.com's records (the "Audit"). The Audit will be conducted in such a way so as not to interfere to any material extent with MP3.com's operations. If, for any applicable period, the independent auditor determines that MP3.com overstated the Count by more than five percent (5%), than MP3.com shall pay the cost of the Audit and shall refund Tickets the difference between the amount originally paid and the amount which should have been paid, or MP3.com shall credit the appropriate amount of Impressions to Tickets' account. + +[***] Confidential treatment has been requested for redacted portion. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission. + +2 + +6. Representations and Warranties. Each party is solely responsible for any legal liability arising out of or relating to the content of its site and any material to which users can link through the sites. Each party represents and warrants that its sites will not: (i) infringe upon any third party's copyright, patent, trademark, trade secret or other proprietary rights or rights of publicity or privacy; (ii) violate any law, statue, ordinance or regulation, including without limitation any laws regarding unfair competition, antidiscrimination or false advertising; (iii) be pornographic or obscene; (iv) be defamatory or trade libelous; or (v) contain viruses other harmful programming routines. Each party agrees to defend, indemnify and hold harmless the other and its shareholders, directors, officers, agents and employees for any and all losses, costs, liabilities or expenses (including without limitation + + + + + +reasonable attorneys' and expert witnesses' fees) incurred or arising from: (a) any breach of the foregoing representations or warranties; (b) any claim arising from the sale or license of either party's goods or services; or (c) any other act, omission or representation by either party. Either party may participate in the defense of itself at its option and expense. + +7. No Consequential Damages. Except for claims arising under section 6, in no event will either party be liable for any special, indirect, incidental or consequential damages. + +8. Miscellaneous. This Agreement shall be governed by and construed in accordance with the laws of the State of California without reference to conflict of law principles thereof. Any claim arising out of or related to this Agreement must be brought exclusively in the state or federal courts located in San Diego County, California, and each party hereby consent to the jurisdiction thereof. In any action to enforce this Agreement the prevailing party will be entitled to costs and attorneys' fees. This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior discussions, documents, agreements and prior course of dealing, and shall not be effective until signed by both parties. This Agreement may not be assigned by Tickets without MP3.com's written consent, which shall be promptly granted or denied and not unreasonably withheld, except that Tickets may assign this Agreement without MP3.com's consent if another entity acquires substantially all the assets of Tickets. The parties to this Agreement are independent contractors, and no agency, partnership, joint venture or employee-employer relationship is created by this Agreement. MP3.com intends to, and does, bind its successors and assigns to the terms of this Agreement. + +/s/ Greg Flores /s/ Adam Epstein - ----------------------------------- ----------------------------------- Representative of MP3.com Representative of Tickets.com, Inc. + +/s/ Greg Flores, VP Sales Adam Epstein, SVP Counsel - ----------------------------------- ----------------------------------- Printed Name & Position Printed Name & Position + +- ----------------------------------- ----------------------------------- Date Date \ No newline at end of file diff --git a/full_contract_txt/TRANSMONTAIGNEPARTNERSLLC_03_13_2020-EX-10.9-SERVICES AGREEMENT.txt b/full_contract_txt/TRANSMONTAIGNEPARTNERSLLC_03_13_2020-EX-10.9-SERVICES AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..6d7b9057631db7e79bbcc27315546f2854855079 --- /dev/null +++ b/full_contract_txt/TRANSMONTAIGNEPARTNERSLLC_03_13_2020-EX-10.9-SERVICES AGREEMENT.txt @@ -0,0 +1,71 @@ +Exhibits 10.9 SERVICES AGREEMENT + +This SERVICES AGREEMENT is entered into on, and effective as of, August __, 2019 (the "Effective Date") among TransMontaigne Management Company, LLC, a Delaware limited liability company ("EmployeeCo") and TLP Management Services, LLC, a Delaware limited liability company (the "Operating Company"). The above-named entities are sometimes referred to in this Agreement (as defined herein) each as a "Party" and collectively as the "Parties." + +WHEREAS, EmployeeCo employs certain individuals (the "Services Employees") who provide management, operational and administrative services as necessary to operate the business of the Operating Company and its affiliates (the "Services"). + +NOW THEREFORE, in consideration of the premises and the covenants, conditions, and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto hereby agree as follows: + +ARTICLE I Services + +1.1 Provision of Services. EmployeeCo agrees to provide to the Operating Company and its affiliates the Services and such other services as may be determined by the Parties from time to time. + +1.2 Reimbursement and Allocation. The Operating Company shall reimburse EmployeeCo for all direct or indirect costs and expenses incurred by EmployeeCo in connection with performing its obligations under this Agreement including, but not limited to: + +(a) salaries of the Services Employees; + +(b) the cost of employee benefits for the Services Employees, including 401(k), pension, bonuses and health insurance benefits (whether through insurance policies provided by third-parties or self-insurance); + +(c) costs associated with workers' compensation claims and other disputes or liabilities associated with the Services Employees; + +(d) severance costs with respect to any terminated Services Employees; and + +(e) all sales, use, employment, excise, value added or similar taxes, if any, that may be applicable from time to time with respect to the Services. + +Such reimbursements shall be made by the Operating Company to EmployeeCo in advance or immediately upon such costs being incurred, or otherwise in accordance with historical practice, unless otherwise agreed between the Operating Company and EmployeeCo. + +1 + + + + + +1.3 Additional Fee. As an additional fee, the Operating Company shall also pay to EmployeeCo an amount equal to 1% of the amount of all reimbursements made under Section 1.2, payable at the same time as such reimbursements, unless otherwise agreed between the Operating Company and EmployeeCo. + +1.4 Settlement of Obligations. The Parties may settle their financial obligations under this Agreement Pursuant to the Parties' normal inter-affiliate settlement processes. + +ARTICLE II Miscellaneous + +2.1 Choice of Law; Submission to Jurisdiction. This Agreement shall be subject to and governed by the laws of the State of Colorado, excluding any conflicts-of-law rule or principle that might refer the construction or interpretation of this Agreement to the laws of another state. Each Party hereby submits to the jurisdiction of the state and federal courts in the State of Colorado and to venue in Denver, Colorado. + +2.2 Entire Agreement. This Agreement constitutes the entire agreement of the Parties relating to the matters contained herein, superseding all prior contracts or agreements, whether oral or written, relating to the matters contained herein. + +2.3 Termination of Agreement. This Agreement shall remain in effect until terminated by the Parties. This Agreement may be terminated by (a) the written agreement of the Parties or (b) by either Party upon 5 days written notice to the other Party. All payment obligations hereunder shall survive the termination of this Agreement in accordance with their respective terms. + +2.4 Amendment or Modification. This Agreement may be amended or modified from time to time only by the written agreement of all the Parties hereto. Each such instrument shall be reduced to writing and shall be designated on its face an "Amendment" or an "Addendum" to this Agreement. + +2.5 Assignment. No Party shall have the right to assign its rights or obligations under this Agreement without the consent of the other Parties hereto; provided, however, that either party hereto may make a collateral assignment of this Agreement solely to secure working capital financing for such party. + +2.6 Counterparts. This Agreement may be executed in any number of counterparts with the same effect as if all signatory parties had signed the same document. All counterparts shall be construed together and shall constitute one and the same instrument. Delivery of an executed signature page of this Agreement by facsimile transmission or in portable document format (.pdf) shall be effective as delivery of a manually executed counterpart hereof. + +2.7 Severability. If any provision of this Agreement shall be held invalid or unenforceable by a court or regulatory body of competent jurisdiction, the remainder of this Agreement shall remain in full force and effect. + +2 + + + + + +2.8 Further Assurances. In connection with this Agreement and all transactions contemplated by this Agreement, each signatory party hereto agrees to execute and deliver such additional documents and instruments and to perform such additional acts as may be necessary or appropriate to effectuate, carry out and perform all of the terms, provisions and conditions of this Agreement and all such transactions. + +[Signature Page Follows] + +3 + + + + + +IN WITNESS WHEREOF, the Parties have executed this Agreement on, and effective as of, the date first written above. + +TRANSMONTAIGNE MANAGEMENT COMPANY, LLC By: /s/ Daniel R. Revers Name: Daniel R. Revers Title: President TLP MANAGEMENT SERVICES, LLC By: /s/ Michael A. Hammell Name: Michael A. Hammell Title: EVP, General Counsel \ No newline at end of file diff --git a/full_contract_txt/TRANSPHORM,INC_02_14_2020-EX-10.12(1)-JOINT VENTURE AGREEMENT.txt b/full_contract_txt/TRANSPHORM,INC_02_14_2020-EX-10.12(1)-JOINT VENTURE AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..b27991f2e5462dc7d8787a080f617099a5735815 --- /dev/null +++ b/full_contract_txt/TRANSPHORM,INC_02_14_2020-EX-10.12(1)-JOINT VENTURE AGREEMENT.txt @@ -0,0 +1,1019 @@ +Exhibit 10.12.1 + +Confidential Execution Version + +[***] Certain information in this document has been excluded because it both (i) is not material and (ii) would likely cause competitive harm to the registrant if publicly disclosed. + +JOINT VENTURE AGREEMENT + +by and among + +Aizu Fujitsu Semiconductor Limited + +Fujitsu Semiconductor Limited + +and + +Transphorm, Inc. + +Date + +May 23, 2017 + + + + + +Confidential Execution Version + +TABLE OF CONTENTS + +Page Article I Definitions 1 + +Article II Representations and Warranties of the Parties 4 + +2.1 Representations and Warranties of AFSL and FSL 4 2.2 Representations and Warranties of TPH-A and TPH 6 + +Article III Operation of the Company 7 + +3.1 Activities 7 3.2 Cash Requirement of the Company 7 3.3 Business Plan 7 3.4 Independent Entity 8 + +Article IV Management of the Company 8 + +4.1 Board 8 4.2 Composition of the Board 8 4.3 Board Observers 9 4.4 Meetings; Quorum 9 4.5 Personnel; Representative Director 9 4.6 Statutory Auditors 9 4.7 Actions Requiring Unanimous Board Approval 9 4.8 Agreement Regarding Board 12 4.9 Procedure in the Event of Failure to Agree 12 + +Article V Covenants 13 + +5.1 Capital Accounts 13 5.2 Provision of Support Services 13 5.3 GaN Equipment 13 5.4 Ancillary Agreements 13 5.5 Other Existing Agreements 14 5.6 Ownership of IP 14 5.7 Sufficiency of IP 14 5.8 Cooperation 14 5.9 Delivery of Financial Statements; Inspection Rights 14 5.10 TPH' s Stockholder Approval 15 + +Article VI Rights and Obligations of FSL, TPH AND TPH-A 15 + +6.1 FSL 15 6.2 TPH 15 6.3 TPH-A 15 + +Article VII Term and Termination 15 + +7.1 Termination Prior to the Effective Date 15 + +-i- + + + + + +Confidential Execution Version + +TABLE OF CONTENTS (continued) + +Page 7.2 Effect of Termination Prior to the Effective Date 16 7.3 Termination After the Effective Date 16 7.4 Dissolution and Winding-up 17 7.5 Shareholder Calls Upon Breach 17 7.6 Shareholder Calls Upon Bankruptcy After the Effective Date 18 7.7 Survival of Provisions After the Effective Date 19 7.8 Cooperation 19 + +Article VIII Transfer Restrictions 19 + +8.1 Restrictions on Transfers 19 8.2 Permissible Transfers 19 + +Article IX Put Option and Call Option 19 + +9.1 AFSL's Right to Require the Purchase of the Shares by TPH or TPH-A 19 9.2 TPH-A's Right to Require the Purchase of the Shares from FSL or AFSL 20 9.3 Conditions to Put Option or Call Option Closing 21 9.4 Other Obligations 22 + +Article X Treatment of Employees 22 + +10.1 New Terms and Conditions for Employment 22 10.2 Representations and Warranties Regarding Employment 22 + +Article XI Miscellaneous 23 + +11.1 No Partnership 23 11.2 Limitations on Parties' Authority 23 11.3 Indemnification 23 11.4 Confidentiality 24 11.5 Access to Company Information After the Put Closing Date or the Call Closing Date 24 11.6 Expenses 24 11.7 Notices 25 11.8 Successors and Assigns 26 11.9 Waiver 26 11.10 Announcements 26 11.11 Entire Agreement 26 11.12 Amendments 26 11.13 Limitations on Rights of Third Persons 26 11.14 Governing Law; Language 26 11.15 Resolution of Disputes 26 11.16 Severability 27 11.17 Execution in Counterparts 28 11.18 Titles and Headings 28 11.19 Counsel only to TPH and TPH-A 28 + +-ii- + + + + + +Confidential Execution Version + +JOINT VENTURE AGREEMENT + +THIS JOINT VENTURE AGREEMENT ("Agreement") is made as of this 23rd day of May, 2017 by and among Aizu Fujitsu Semiconductor Limited ("AFSL"), a kabushiki kaisha incorporated in Japan, with an address at No.4 Kogyo Danchi, Monden-Machi, Aizu Wakamatsu, Fukushima, Japan, Fujitsu Semiconductor Limited ("FSL"), a kabushiki kaisha incorporated in Japan, with an address at Shin-Yokohama Chuo Building, 2-100-45, Shin-Yokohama, Kohoku-Ku, Yokohama, Kanagawa, Japan, as a one hundred percent (100%) shareholder of AFSL, and Transphorm, Inc. ("TPH"), a corporation incorporated in Delaware, with an address at 75 Castilian Drive, Goleta, California 93117, U.S.A. (collectively referred to as the "Parties" and individually, a "Party"). + +W I T N E S S E T H: + +WHEREAS, Aizu Fujitsu Semiconductor Wafer Solution Limited ("AFSW" or the "Company"), a kabushiki kaisha incorporated in Japan, with an address at No.3 Kogyo Danchi, Monden-Machi, Aizu Wakamatsu, Fukushima, Japan has been engaged with the business of 150mm wafer foundry services and other services related thereto (the "Business"). + +WHEREAS, prior to the Effective Date (as defined below), TPH intends to incorporate a new wholly-owned subsidiary ("TPH-A") and make it a Party hereto. + +WHEREAS, with the consent of the Parties and the board of directors of the Company, AFSL has entered into the Shares Purchase Agreement dated May 23, 2017 (the "SPA"), by and among the Parties hereof, pursuant to which AFSL will sell and transfer [***] shares of the issued and outstanding shares in the Company (representing [***] of the issued and outstanding shares in the Company) to TPH-A; and + +WHEREAS, the Parties intend to regulate and agree upon the organization and operation of the Company and each Party's rights and obligations and other matters regarding the Company; and + +NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows: + +ARTICLE I DEFINITIONS + +As used in this Agreement, the following terms shall have the following meanings: + +1.1 "Affiliate" of AFSL, FSL, TPH-A or TPH, as the case may be, means a Person or group of Persons: (a) which owns or Controls, directly or indirectly, AFSL, FSL, TPH-A or TPH; (b) which is owned or Controlled, directly or indirectly, by AFSL, FSL, TPH-A or TPH; or (c) which is owned or Controlled, directly or indirectly, by any Person described in Section 1.1(a) or (b). + +1.2 "AFSW Secondment Agreement" has the meaning ascribed to that term in the SPA. + + + + + +Confidential Execution Version + +1.3 "Amended Process Development Agreement" has the meaning ascribed to that term in Section 2.1.7. + +1.4 "Ancillary Agreements" means the SPA, the AFSW Secondment Agreement, the TPH-J Secondment Agreement, the Wafer Supply Agreement, the Joinder Agreement, the Process Development Amendment and the Services Agreement Amendment. + +1.6 "Board" means the board of directors of the Company. + +1.7 "Business" has the meaning ascribed to that term in the Recitals. + +1.8 "Business Day" means any day other than a Saturday, Sunday or public holiday under the laws of Japan, or any other day on which banking institutions are authorized to close in Tokyo, Japan or in New York, New York, USA. + +1.9 "Business Plan" has the meaning ascribed to that term in Section 3.3.1. + +1.10 "Call Shares" means any and all Shares held by AFSL or FSL or any other Person Controlled by AFSL or FSL, as the case may be, on the date of the Call Exercise Notice. + +1.11 "Change of Control Transaction" means either (a) the acquisition of the Company by an entity not affiliated with FSL or TPH by means of any transaction or series of related transactions (including, without limitation, any stock acquisition, merger, demerger or share exchange but excluding any sale of stock for capital raising purposes) other than a transaction or series of related transactions in which the holders of the voting securities of the Company outstanding immediately prior to such transaction or series of related transactions retain, immediately after such transaction or series of related transactions, as a result of shares in the Company held by such holders prior to such transaction or series of related transactions, at least a majority of the total voting power represented by the outstanding voting securities of the Company or such other surviving or resulting entity (or if the Company or such other surviving or resulting entity is a wholly-owned Subsidiary (hereinafter defined) immediately following such acquisition, its parent); or (b) a sale, lease, transfer, exclusive license or other disposition of all or substantially all of the assets of the Company and its Subsidiaries taken as a whole by means of any transaction or series of related transactions with a party other than FSL or its Affiliates or TPH or its Affiliates, except where such sale, lease, transfer, exclusive license or other disposition is to a wholly owned Subsidiary of the Company. + +1.12 "Company Assets" has the meaning ascribed to that term in the SPA. + +1.13 "Control" means the power, right or authority to direct or cause the direction of the management or policies of a Person, or to elect a majority of the board of directors or similar governing body of a Person, whether through the ownership of securities or similar ownership interest, by contract or otherwise, and references to "change of control" include the transfer, disposition or relinquishment, whether directly or indirectly, of Control. + +1.14 "Designated Individuals" has the meaning ascribed to that term in Section 4.9. + +1.15 "Designated Nuclear Waste" has the meaning ascribed to that term in the SPA. + +- 2- + + + + + +Confidential Execution Version + +1.16 "Director" has the meaning ascribed to that term in Section 4.2. + +1.17 "Effective Date" means the date that the Initial Closing occurs. + +1.18 "Encumbrance" has the meaning ascribed to that term in the SPA. + +1.19 "Funded Work" has the meaning ascribed to that term in Section 2.1.7. + +1.20 "GaN Equipment" has the meaning ascribed to that term in Section 5.3. + +1.21 "GaN Wafers" has the meaning ascribed to that term in the Amended Process Development Agreement. + +1.22 "Governmental Authority" means any government, state (or any subunit thereof), political subdivision or regulatory authority, whether domestic, foreign or multinational, or any agency, authority, bureau, commission, department, or court of any government state, political subdivision or regulatory authority or similar body or instrumentality thereof, or any federal state, local, governmental, foreign or arbitral tribunal. + +1.23 "Governmental Approvals" mean all consents, approvals, orders, permits or authorizations of, and registrations, declarations and filings with, and expirations of waiting periods imposed by, any court, legislative body, administrative agency, commission or other Governmental Authority and required in connection with the transactions contemplated herein. + +1.24 "Harmful Materials" has the meaning ascribed to that term in the SPA. + +1.25 "Initial Closing" has the meaning ascribed to that term in the SPA. + +1.26 "Intellectual Property Rights" has the meaning ascribed to that term in the SPA. + +1.27 "Japanese GAAP" means generally accepted accounting principles in Japan. + +1.28 "Joinder Agreement" has the meaning ascribed to that term in Section 6.3. + +1.29 "Joint Venture" means the operation of the Company pursuant to this Agreement from the Effective Date to the earliest to occur of: (i) the Put Closing Date (hereinafter defined), (ii) the Call Closing Date (hereinafter defined), or (iii) termination of this Agreement pursuant to Article VII hereof. + +1.30 "Laws" means laws, statutes, ordinances, rules requirements, decrees, orders or regulations. + +1.31 "Net Book Value" has the meaning ascribed to that term in the SPA. + +1.32 "Option Starting Date" means February 1, 2020. + +1.33 "Person" includes any individual, company, corporation, firm, partnership, joint venture, association, organization or trust in each case whether or not having a separate legal identity. + +- 3- + + + + + +Confidential Execution Version + +1.34 "Pro Rata Ownership" means for any Shareholder, the ratio equal to the total number of Shares held by such Shareholder at any given time to the total number of outstanding Shares at such time. + +1.35 "Process Development Amendment" has the meaning ascribed to that term in the SPA. + +1.36 "Put Shares" means any and all Shares held by AFSL or FSL or any other Person Controlled by AFSL or FSL, as the case may be, on the date of the Put Exercise Notice. + +1.37 "Sale Shares" has the meaning ascribed to that term in the SPA. + +1.38 "Section" means a section of this Agreement. + +1.39 "Seller Disclosure Schedule" has the meaning ascribed to that term in the SPA. + +1.40 "Services Agreement Amendment" has the meaning ascribed to that term in the SPA. + +1.41 "Shareholder" means each Person that holds Shares. + +1.42 "Shares" means the shares of authorized and outstanding capital of the Company. + +1.43 "Shares Purchase Price" has the meaning ascribed to that term in the SPA. + +1.44 "SPA" has the meaning ascribed to that term in the Recitals. + +1.45 "Subsidiary" means a Person in which a Party hereto beneficially owns at least fifty percent (50%) of the equity interest or voting power of such Person. + +1.46 "Tax" has the meaning ascribed to that term in the SPA. + +1.47 "Tax Return" has the meaning ascribed to that term in the SPA. + +1.48 "TPH-J" means Transphorm Japan, Inc., a kabushiki kaisha incorporated in Japan, which is a wholly-owned Subsidiary of TPH. + +1.49 "TPH-J Secondment Agreement" has the meaning ascribed to that term in the SPA. + +1.50 "Wafer Supply Agreement" has the meaning ascribed to that term in the SPA. + +Unless the context clearly requires otherwise, reference to the singular shall include the plural, reference to the plural shall include the singular and reference to a gender shall include all genders. + +ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE PARTIES + +2.1 Representations and Warranties of AFSL and FSL. AFSL and FSL hereby represent and warrant to TPH-A and TPH as of the date hereof and as of the Effective Date as follows: + +- 4- + + + + + +Confidential Execution Version + +2.1.1 Organization. Each of AFSL and FSL is a kabushiki kaisha, duly organized, validly existing and in good standing under the laws of Japan, and has the corporate power and authority to execute, deliver and perform its obligations under this Agreement. + +2.1.2 Authorization; Execution and Delivery; Enforceability. All corporate action on the part of AFSL and FSL necessary for the authorization, execution and delivery of this Agreement and for the performance of all of their respective obligations hereunder has been taken. This Agreement has been duly executed and delivered by each of AFSL and FSL and constitutes a valid and legally binding obligation of each of them. + +2.1.3 Government and Other Consents. No consent, authorization, license, permit, registration or approval of, or exemption or other action by, any Governmental Authority, or any other Person, is required in connection with AFSL's or FSL's execution, delivery and performance of this Agreement. + +2.1.4 Effect of Agreement. Except as set forth in Section 3.2.3 of the Seller Disclosure Schedule, each of AFSL's and FSL's execution, delivery and performance of this Agreement will not (i) violate the Articles of Incorporation of either of them or any provision of Law, (ii) violate any judgment, order, writ, injunction or decree of any court applicable to AFSL, FSL or the Company, (iii) result in the breach of, give rise to a right of termination, cancellation or acceleration of any obligation with respect to (presently or with the giving of notice, the passage of time or both), or otherwise be in conflict with any term of, or affect the validity or enforceability of, any agreement or other commitment to which AFSL, FSL or the Company is a party and which would materially and adversely affect either of them or the Company, or (iv) result in the creation of any lien, pledge, mortgage, claim, charge or encumbrance upon any assets of AFSL, FSL or the Company. + +2.1.5 Litigation. There are no actions, suits or proceedings pending or, to either AFSL's or FSL's knowledge, threatened, against AFSL or FSL before any Governmental Authority which question AFSL's or FSL's right to enter into or perform this Agreement, or which question the validity of this Agreement. + +2.1.6 Equipment. FSL (as of the date hereof) and the Company (as of the Effective Date) have valid and perfected ownership of all GaN Equipment, free and clear of any Encumbrances. There are no third party agreements or licenses with respect to any software or firmware required to operate any GaN Equipment. + +2.1.7 Sufficiency of IP. As of the Effective Date, the Intellectual Property Rights owned by the Company, together with the Intellectual Property Rights licensed to TPH pursuant to (i) that certain Process Technology Development Services Agreement, dated as of November 28, 2013, by and between FSL and TPH, and (ii) the Process Development Amendment ((i) and (ii) collectively, the "Amended Process Development Agreement"), shall constitute all Intellectual Property Rights owned by FSL, AFSL, Fujitsu Limited or their Affiliates that are or will be necessary for the continued operation of the Business for GaN Wafers following the Effective Date in the manner conducted as of the Effective Date. For the avoidance of doubt, the Business does not include the Company's performance of the GaN work commissioned and funded by Fujitsu Limited and its Affiliates + +- 5- + + + + + +Confidential Execution Version + +(including Fujitsu Laboratories Ltd., but excluding FSL and AFSL) to the Company (such work, the "Funded Work"). + +2.2 Representations and Warranties of TPH-A and TPH. + +2.2.1 TPH hereby represents and warrants to AFSL and FSL as of the date hereof and as of the Effective Date as follows: + +(i) Organization. TPH is a corporation, duly organized, validly existing and in good standing under the laws of the State of Delaware, and has the corporate power and authority to execute, deliver and perform its obligations under this Agreement. + +(ii) Authorization; Execution and Delivery; Enforceability. All corporate action on the part of TPH necessary for the authorization, execution and delivery of this Agreement and for the performance of all its obligations hereunder has been taken. This Agreement has been duly executed and delivered by TPH and constitutes a valid and legally binding obligation of TPH. + +(iii) Government and Other Consents. No consent, authorization, license, permit, registration or approval of, or exemption or other action by, any Governmental Authority, or any other Person, is required in connection with TPH's execution, delivery and performance of this Agreement. + +(iv) Effect of Agreement. TPH's execution, delivery and performance of this Agreement will not (i) violate the Certificate of Incorporation or Bylaws of TPH, or any provision of Law, (ii) violate any judgment, order, writ, injunction or decree of any court applicable to TPH, (iii) result in the breach of, give rise to a right of termination, cancellation or acceleration of any obligation with respect to (presently or with the giving of notice, the passage of time or both), or otherwise be in conflict with any term of, or affect the validity or enforceability of, any agreement or other commitment to which TPH is a party and which would materially and adversely affect it or the Company, or (iv) result in the creation of any lien, pledge, mortgage, claim, charge or encumbrance upon any assets of TPH. + +(v) Litigation. There are no actions, suits or proceedings pending or, to TPH's knowledge, threatened, against TPH before any Governmental Authority which question TPH's right to enter into or perform this Agreement, or which question the validity of this Agreement. + +2.2.2 TPH-A hereby represents and warrants to AFSL and FSL as of the date of the Joinder Agreement and as of the Effective Date as follows: + +(i) Organization. TPH-A is a kabushiki kaisha, duly organized, validly existing and in good standing under the laws of Japan, and has the corporate power and authority to execute, deliver and perform its obligations under this Agreement. + +(ii) Authorization; Execution and Delivery; Enforceability. All corporate action on the part of TPH-A necessary for the authorization, execution and delivery of the Joinder Agreement, and for the performance of all its obligations thereunder and hereunder has been taken. + +- 6- + + + + + +Confidential Execution Version + +The Joinder Agreement has been duly executed and delivered by TPH-A and constitutes a valid and legally binding obligation of TPH-A. + +(iii) Government and Other Consents. No consent, authorization, license, permit, registration or approval of, or exemption or other action by, any Governmental Authority, or any other Person, is required in connection with TPH-A's execution, delivery and performance of the Joinder Agreement and this Agreement. + +(iv) Effect of Agreement. TPH-A's execution, delivery and performance of the Joinder Agreement and this Agreement, as applicable, will not (i) violate the Articles of Incorporation of TPH-A, or any provision of Law, (ii) violate any judgment, order, writ, injunction or decree of any court applicable to TPH-A, (iii) result in the breach of, give rise to a right of termination, cancellation or acceleration of any obligation with respect to (presently or with the giving of notice, the passage of time or both), or otherwise be in conflict with any term of, or affect the validity or enforceability of, any agreement or other commitment to which TPH-A is a party and which would materially and adversely affect it or the Company, or (iv) result in the creation of any lien, pledge, mortgage, claim, charge or encumbrance upon any assets of TPH-A. + +(v) Litigation. There are no actions, suits or proceedings pending or, to TPH-A's knowledge, threatened, against TPH-A before any Governmental Authority which question TPH-A's right to enter into or perform this Agreement and the Joinder Agreement, or which question the validity of this Agreement and the Joinder Agreement. + +ARTICLE III OPERATION OF THE COMPANY + +3.1 Activities. The Company shall manufacture the semiconductor products for which AFSL/FSL or TPH-A/TPH-J/TPH places an order to the Company from time to time during the term of this Agreement, using the technologies made available by AFSL/FSL and TPH-A/TPH-J/TPH, respectively. With the consent of the Board in compliance with Section 4.7, the Company may manufacture semiconductor products directly for Persons who are not parties to this Agreement. + +3.2 Cash Requirement of the Company. All cash requirements of the Company shall be satisfied from cash generated by the operations of the Company, from external financing (on a non-recourse basis and without guarantees of the Shareholders or their Affiliates) procured by the Company in its own name, from financing by the Shareholders (the burden of such financing shall be allocated to a Shareholder based on Pro Rata Ownership) and from the initial capitalization. + +3.3 Business Plan. + +3.3.1 Conduct of Business. The Company shall conduct its Business in conformity with a business plan jointly prepared and agreed to by the Parties on or prior to the Effective Date, as may be amended from time to time after the Effective Date with the unanimous approval of the Board (the "Business Plan"). In case where the Parties have not agreed on the Business Plan as of the date hereof, then the Parties shall continue to discuss in good faith immediately following the execution of this Agreement and agree on the Business Plan prior to the Effective Date. + +- 7- + + + + + +Confidential Execution Version + +3.3.2 Treatment of the Business Plan. The Parties expect the Company to comply with the Business Plan; provided, however, deviations from the Business Plan that result in an increase or decrease of less than twenty percent (20%) of the original cost or revenue to the Company attributable to such item as set forth in the Business Plan shall not require the consent of the Parties, so long as all such deviations in any given quarter do not represent a deviation of more than ten percent (10%) of total revenue or total expense, as the case may be, in the aggregate for the quarter in which the deviation occurs. No Party shall, however, have any assurance that the Company will achieve the Business Plan, except as to the number of wafers that each of FSL/AFSL and TPH/TPH-A commits to purchase in the Business Plan. In the event that FSL/AFSL or TPH/TPH-A, as applicable, has failed to purchase its applicable number of wafers in accordance with the Business Plan, then such Party shall compensate the Company for the shortfalls in the actual revenue of the Company attributable to its failure to purchase such wafers versus its share of the planned revenue set forth in the Business Plan. As soon as it becomes practicable after the end of each quarter, but not later than thirty (30) days thereafter, the Parties shall review the actual revenue of the Company versus the Business Plan based on the wafer loading by each of FSL/AFSL and TPH/TPH-A for the previous quarter, and if there are any shortfalls in revenue from the Business Plan in such quarter, the compensation for such shortfalls shall be made by a Party who caused such shortfalls to the Company within sixty (60) days after the end of the fiscal year of the Company where such quarter resides. For the avoidance of doubt, (i) if a Party, its Affiliate or another third party purchases such Party's committed number of wafers in the Business Plan, such Party shall not be deemed to have caused a shortfall in the revenue of the Company and (ii) the revenue attributable to a Party's failure to purchase its number of wafers in accordance with the Business Plan shall equal (A) the number of wafers not purchased, multiplied by (B) the agreed price (as set forth in the Business Plan) per wafer. + +3.3.3 Revised Budget. The budget of the Company shall be reviewed quarterly and may be revised by the Company with the unanimous approval of the Board. Such revised budget shall be deemed as the then-current Business Plan. + +3.4 Independent Entity. The Company shall be operated as an independent business entity, even though the Parties may provide products, personnel and services. + +ARTICLE IV MANAGEMENT OF THE COMPANY + +4.1 Board. Except where the approval of the Shareholders is required by applicable Laws, the Articles of Incorporation or this Agreement, the business and affairs of the Company shall be managed by the Board. + +4.2 Composition of the Board. The Board shall consist of five (5) members (each, a "Director"), three (3) of whom shall be nominated by AFSL and two (2) of whom shall be nominated by TPH-A, and each Shareholder shall vote all of its Shares in favor of the election of the Directors nominated by the other. Each of AFSL and TPH-A shall have the right to nominate a replacement for any Director previously nominated by it, and each shall vote all of its Shares in favor of the election of such replacement. A Director nominated by AFSL shall be a Chairman of the Board for all meetings. In the event that a Shareholder who is entitled to nominate a Director seeks to remove such + +- 8- + + + + + +Confidential Execution Version + +Director by written notice to the Company, all Shareholders shall be obligated to vote their Shares in favor of such removal. + +4.3 Board Observers. Representatives of TPH and FSL may attend and participate in any meeting of the Board, but shall in all other respects be a nonvoting observer. + +4.4 Meetings; Quorum. + +4.4.1 Regular meetings of the Board shall be held at least once per three (3) months at such place and time as set forth in notices provided to the Directors at least ten (10) Business Days in advance of such meeting. Special meetings of the Board shall be held upon notice of not less than three (3) Business Days setting forth an agenda or purpose for the meeting; provided, however, that any Director may waive compliance with such notice requirement before or after the meeting. Special meetings of the Board may be called by at least two (2) Directors upon three (3) Business Days' notice to the Chairman, which notice shall include an agenda for such meeting. + +4.4.2 Any Director may propose items for the agendas of any meeting of the Board whether in advance or at such meeting. + +4.4.3 A quorum shall be deemed to exist for purposes of Board actions so long as at least a majority of the total number of Directors then in office are present, provided that proper notice of such Board meeting has been given, in accordance with Section 4.4.1, to each of the Directors then in office. Directors may participate in Board meetings in person or electronically (including video or audio conference) in accordance with the Japanese Companies Act. + +4.4.4 Proceedings of Board meetings shall be in Japanese/English, as the case may be, and a record of each Board meeting shall be made in Japanese and English, and sent promptly to each Shareholder. In the event of a conflict between the English and Japanese versions, the Japanese version shall control. + +4.4.5 Minutes of the meetings of the Board shall be placed and duly maintained at the office of the Company. + +4.4.6 Any action that may be taken at a meeting of the Board may be taken in writing in accordance with the Company's Articles of Incorporation. + +4.5 Personnel; Representative Director. One of the Directors to be nominated by AFSL shall be the manager of the Company, who shall also be the Representative Director (as defined under the Japanese Companies Act). + +4.6 Statutory Auditors. The Company shall have one (1) statutory auditor. The statutory auditor shall be appointed by AFSL, subject to the approval of TPH-A, which approval shall not be unreasonably withheld. + +4.7 Actions Requiring Unanimous Board Approval. The Parties agree that the following matters require the unanimous approval of the Directors present at a properly-noticed Board meeting, + +- 9- + + + + + +Confidential Execution Version + +and no Shareholder shall convene a shareholders meeting with respect to the following matters without the prior written consent of the other Shareholder: + +4.7.1 revising the budget or Business Plan of the Company; + +4.7.2 making any capital contribution in excess of the capital required pursuant to the Business Plan; + +4.7.3 manufacturing semiconductor products directly for Persons who are not parties to this Agreement; + +4.7.4 selling, transferring, leasing, assigning or otherwise disposing of the property or assets of the Company, or contracting to do so, whether in a single transaction or series of related transactions; + +4.7.5 consummating a Change of Control Transaction including without limitation merger, demerger, share exchange, liquidating or dissolving the Company, the entering into of a composition with creditors or the authorization of any filing for bankruptcy by the Company or the transformation of the Company into another type of legal entity; + +4.7.6 entering into any agreement to effect a Change of Control Transaction or undertaking any action which effects a Change of Control Transaction, except pursuant to the exercise of the Put Option or Call Option, calls pursuant to Sections 7.5 and 7.6 and transfers permitted pursuant to Sections 8.1 and 8.2; + +4.7.7 issuing any shares of the authorized capital of the Company or the authorization or issuance of any new class or series of capital of the Company or any securities convertible into or exchangeable for any class or series of capital of the Company; + +4.7.8 recapitalizing, reclassifying, consolidating, subdividing or converting, or altering of any rights attaching to, any class or series of authorized capital of the Company; + +4.7.9 entering into any joint venture, partnership or profit-sharing agreement with any third party; + +4.7.10 purchasing or otherwise acquiring, or agreeing to purchase or otherwise acquire material assets of any other Person or any shares of capital stock of, or similar interest in, any other Person, or any other asset or group of assets, in a single transaction or series of related transactions; + +4.7.11 removing any Director during his/her term of office, unless such Director was requested to be removed by the Shareholder that nominated him/her; + +4.7.12 amending or repealing any provision of the Articles of Incorporation or other constituent documents of the Company, including, without limitation, the changing of the business purpose of the Company; + +- 10- + + + + + +Confidential Execution Version + +4.7.13 declaring or paying any dividend or distribution; + +4.7.14 adopting or changing a significant tax or accounting practice or principle of the Company or making any significant tax or accounting election by the Company; + +4.7.15 making or changing any election in respect of Taxes, filing any amendment to a Tax Return, entering into any agreement in respect of Taxes, settling, responding to, or making any filing or submission in respect of any audit, claim or assessment in respect of Taxes, or consenting to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes, other than those approved by the Directors nominated by TPH-A as immaterial or in the ordinary course of the Business, such approval not to be unreasonably withheld; + +4.7.16 settling or abandoning, on the part of the Company or any Party or Affiliate of any Party, any legal action that is in the name of the Company or that directly affects the Company, which legal action (A) involves a claim or claims for monetary damages, (B) involves a claim or claims by or against any Governmental Authority, (C) involves any claims raising antitrust issues, or (D) involves a request for injunctive relief; + +4.7.17 instituting or determining the strategy of any legal action in the name of the Company that (A) involves a claim or claims for monetary damages, (B) involves a claim or claims by or against any Governmental Authority, (C) involves any claims raising antitrust issues, or (D) involves a request for injunctive relief; + +4.7.18 entering into or amending an agreement between the Company and a Party or its Affiliates, other than (A) as expressly contemplated by this Agreement or the SPA, or (B) such amendments that result in an increase or decrease of less than 20% of the original cost or revenue to the Company attributable to such agreement as set forth in the Business Plan, so long as all such deviations in any given quarter do not represent a deviation of more than 10% of total revenue or total expense, as the case may be, in the aggregate for the quarter in which the deviation occurs; + +4.7.19 incorporating, liquidating, acquiring or transferring any legal entities; + +4.7.20 carrying on any business other than the Business and the businesses currently conducted by the Company as of the Effective Date; + +4.7.21 creating, incurring, assuming or permitting to exist any indebtedness, except to the extent consistent with the then-current Business Plan; + +4.7.22 creating, incurring, assuming or permitting to exist, directly or indirectly, any lien or other encumbrance upon any property, now owned or hereafter acquired, other than incidental liens or liens to secure indebtedness authorized pursuant to Section 4.7.21; + +4.7.23 making any loan or advance or the giving of any credit by the Company (other than normal trade credit) to any Person or the giving of any guarantee or indemnity to secure the liabilities or obligations of any Person or the creation of any mortgage, claim, charge, lien, security interest, easement, right of way, pledge or other encumbrance over the whole or any part of the property or assets of the Company; + +- 11- + + + + + +Confidential Execution Version + +4.7.24 entering into any contract, agreement, commitment, transaction or series of transactions requiring the expenditure by the Company, or the making of any investment, which would exceed thirty million Japanese Yen (¥30,000,000) in the aggregate, except for operational expenditures approved in the Business Plan; + +4.7.25 making any material change in (A) the role and responsibility of certain Company employees specified as "Key Employees" in the Appendix 1 attached hereto or (B) the Company's organization; + +4.7.26 adopting, materially amending or terminating any Employee Plan, entering into any change in control, severance or similar agreement or any retention or similar agreement with any officer, employee, director or consultant of the Company (including seconded employees), or hiring or making an offer to hire any new employee; + +4.7.27 increasing or making any other change that would result in increased cost to the Company to the salary, wage rate, incentive compensation opportunity, employment status, title of other compensation payable or to be become payable to any current or former employee, officer, director, or consultant of the Company (including seconded employees); + +4.7.28 entering into, amending or terminating any collective bargaining agreement, labor union contract, works council agreement or other contract with any labor organization or union; + +4.7.29 using any Company Assets for (A) the storage, manufacture, processing or disposal of any Harmful Materials, except for the storage of the Designated Nuclear Waste to the extent and in the manner set forth in Article 3.18 of the SPA, or (B) the processing or disposal of industrial waste; or + +4.7.30 increasing or decreasing the size of the Board. + +Notwithstanding the above, at the request of TPH or TPH-A, the Board shall, without following the procedures set forth in this subsection, approve and direct management to make operational changes to portions of the Company that (i) are specific solely to GaN operation or GaN Equipment and (ii) do not have a material and adverse effect on the Company's profit and loss. + +4.8 Agreement Regarding Board. Each Shareholder shall take all actions necessary to cause the Directors nominated by it to abide by and implement all of the provisions of this Agreement. + +4.9 Procedure in the Event of Failure to Agree. In the event that the Board has been unable to resolve any matter set forth in Section 4.7 within thirty (30) Business Days after such matter was referred to the Board, then any Party may bring the matter to the attention of the Chief Executive Officer of FSL and the Chief Executive Officer of TPH (the "Designated Individuals") for a decision, which joint decision of the Designated Individuals shall be final and binding on the Company, and the Parties shall direct the Directors nominated by them to exercise their voting rights and take all other necessary steps to ensure that such resolution is fully and promptly carried into effect. Should no solution be agreed upon within sixty (60) days after submission of the matter to the Designated Individuals, then any Party may refer the matter for resolution in accordance with the dispute resolution procedure set forth in Section 11.15. + +- 12- + + + + + +Confidential Execution Version + +ARTICLE V COVENANTS + +5.1 Capital Accounts. The capital accounts of each Shareholder shall be updated in proportion to such Shareholder's Pro Rata Ownership. + +5.2 Provision of Support Services. + +5.2.1 AFSL shall provide support services agreed upon by AFSL/FSL and the Company to the Company, with adequate consideration to FSL/AFSL and/or FSL's/AFSL's designees, the detailed terms and conditions of which services shall be the same as already have been provided in the applicable agreement(s) by and between AFSL/FSL and the Company (if any) or shall be discussed and determined by the Parties. + +5.2.2 TPH and TPH-A shall cause the Company to provide support services agreed upon by AFSL/FSL and the Company to FSL/AFSL and/or FSL's/AFSL's designees, with adequate consideration to the Company, the detailed terms and conditions of which services shall be the same as already have been provided in the applicable agreement(s) by and between AFSL/FSL and the Company (if any) or shall be discussed and determined by the Parties. + +5.3 GaN Equipment. During the term of this Agreement, TPH-A/TPH shall be responsible for the costs and expenses agreed by the Parties to maintain and/or procure the equipment for wafer processing specified in the Appendix 2 attached hereto and as amended from time to time upon the mutual agreement of the Parties (the "GaN Equipment"). At TPH's sole option, TPH or TPH-A may purchase the GaN Equipment by completion of payment of the purchase price or depreciation cost for such equipment as set forth in Appendix 2. In such case: (i) TPH-A or TPH, as the case may be, shall acquire sole and exclusive title to the GaN Equipment, free and clear of all Encumbrances, and none of FSL, AFSL or the Company shall have any right, title or interest in such GaN Equipment, (ii) such GaN Equipment shall be clearly labeled as the property of TPH-A or TPH, as the case may be, and (iii) FSL and AFSL shall cause to be assigned to TPH-A or TPH, as the case may be, all licenses and warranties for such GaN Equipment and the software or firmware required to operate such GaN Equipment that are attached to, installed on, or embodied in such GaN Equipment as of the Effective Date. During the term if this Agreement, the GaN Equipment shall be used exclusively in GaN wafer processing, and shall not be used in the silicon wafer processing for AFSL's or FSL's current products. In the event that the Company needs to use the GaN Equipment to provide products or services to any customer other than TPH- A or TPH or their Affiliates prior to the Put Closing Date or the Call Closing Date, the Company shall reimburse TPH-A or TPH for the use of such equipment in the manner to be discussed in good faith and agreed upon by the Parties, which reimbursement may be offset against amounts otherwise owing from TPH-A or TPH, as the case may be, to the Company. + +5.4 Ancillary Agreements. Prior to the Effective Date, the Parties shall take any actions necessary to cause the Wafer Supply Agreement, the AFSW Secondment Agreement, TPH-J Secondment Agreement, the Joinder Agreement and the Process Development Amendment to go into effect as of the Effective Date. + +- 13- + + + + + +Confidential Execution Version + +5.5 Other Existing Agreements. The Parties shall ensure that the following agreements stay in full force and effect without modification during the term of this Agreement unless they are terminated or modified pursuant to the terms and conditions thereunder: + +5.5.1 the Intellectual Property License Agreement, dated November 28, 2013, by and between TPH and Fujitsu Limited; + +5.5.2 the Secondment Agreement, dated as of January 31, 2014, by and between Fujitsu Limited and TPH-J; and + +5.5.3 the Fujitsu intercompany license agreement and Fujitsu intercompany services agreement. + +5.6 Ownership of IP. The Parties agree that the ownership of Intellectual Property Rights in technology developed by or for the Company pursuant to an Ancillary Agreement shall be governed by such Ancillary Agreement. + +5.7 Sufficiency of IP. FSL and AFSL represent and warrant that, as of the Put Closing Date or the Call Closing Date, the Intellectual Property Rights owned by the Company, together with the Intellectual Property Rights licensed to TPH pursuant to the Amended Process Development Agreement shall constitute all Intellectual Property Rights owned by FSL, AFSL, Fujitsu Limited or their Affiliates that are or will be necessary for the continued operation of the Business for GaN Wafers following the Put Closing Date or Call Closing Date in the manner conducted as of the Put Closing Date or Call Closing Date, as applicable. For the avoidance of doubt, the Business does not include the Company's performance of the Funded Work. + +5.8 Cooperation. The Parties shall cooperate reasonably with each other to obtain and maintain all necessary approvals and registrations to effect this Agreement and all related agreements and documents; provided, however, that the Parties shall not be required to change any provision of this Agreement to obtain or maintain any such approvals or registrations. + +5.9 Delivery of Financial Statements; Inspection Rights. The Parties shall cause the Company to deliver to each Party, at the Company's expense, (i) annual audited and quarterly and monthly unaudited financial statements prepared in accordance with Japanese GAAP consistently applied, including any independent auditor's report or opinion thereon, if any, and (ii) any information necessary to enable a Party to prepare consolidated financial statements, in each case within sixty (60) days after the end of each fiscal year of the Company and within thirty (30) days after the end of each quarterly accounting period of the Company and calendar month. Each Party will indemnify the Company and hold it harmless for, from and against any claims, demands, costs or expenses arising out of or relating to such consolidated financial statements, provided that such indemnity shall not apply to claims, demands, costs or expenses to the extent they are related to the Company's financial statements provided to such Party. In addition to any inspection rights granted under Law, upon notice to the Company of at least twenty-four (24) hours, each Party shall have full access to all properties, books of account, and records of the Company. + +- 14- + + + + + +Confidential Execution Version + +5.10 TPH's Stockholder Approval. TPH shall obtain approval of the acquisition of the Option Shares (as defined in the SPA) from the requisite stockholders of TPH in accordance with Delaware Law and TPH's Certificate of Incorporation and Bylaws, which approval shall have been obtained prior to the Effective Date, to the extent such an approval is permissible under Delaware Law. + +ARTICLE VI RIGHTS AND OBLIGATIONS OF FSL, TPH AND TPH-A + +6.1 FSL. FSL, as a one hundred percent (100%) shareholder of AFSL, shall cause AFSL to perform all obligations of AFSL hereunder. + +6.2 TPH. Until TPH-A is incorporated and made a party hereto, TPH shall assume all obligations of TPH-A hereunder. After TPH-A is incorporated and made a party hereto, TPH, as a one hundred percent (100%) shareholder of TPH-A, shall cause TPH-A to perform all obligations of TPH-A hereunder. + +6.3 TPH-A. TPH shall cause TPH-A to execute and deliver a joinder agreement to the Parties substantially in the form attached hereto as Exhibit A (the "Joinder Agreement"), and TPH-A shall agree to be bound by the terms and conditions of this Agreement and the SPA to be performed and complied with by TPH-A by executing and delivering the Joinder Agreement. + +ARTICLE VII TERM AND TERMINATION + +7.1 Termination Prior to the Effective Date. This Agreement may be terminated prior to the Effective Date, and the Joint Venture and the other transactions contemplated by this Agreement may be abandoned at any time prior to the Effective Date (by written notification with respect to Sections 7.1.2 to 7.1.5 below), notwithstanding any requisite approval of this Agreement and the transactions contemplated by this Agreement, as follows: + +7.1.1 by mutual written consent duly executed by FSL and AFSL on the one hand, and TPH-A and TPH on the other hand; + +7.1.2 by either FSL or AFSL on the one hand, and TPH-A or TPH on the other hand, if the Effective Date shall not have occurred on or before September 30, 2017 (the "Long Stop Date"), provided, however, that the right to terminate this Agreement under this Section 7.1.2 shall not be available to any Party whose failure to fulfill any obligation under this Agreement has been the cause of, or resulted in, the failure of the Effective Date to occur on or before the Long Stop Date; provided, however, in the event that any required waiting period (and any extension thereof) under the applicable Laws relating to the transactions contemplated hereby shall not have expired or terminated early before the Long Stop Date, the Long Stop Date shall be extended until December 31, 2017; + +7.1.3 by either FSL or AFSL on the one hand, and TPH-A or TPH on the other hand, upon the issuance of any Order which is final and nonappealable which would (i) prevent the consummation of the sale of the Shares under the SPA, (ii) prohibit TPH or TPH-A's ownership or operation of any portion of the business of the Company, or (iii) compel FSL, AFSL or the Company + +- 15- + + + + + +Confidential Execution Version + +on the one hand, and TPH-A or TPH on the other hand, to dispose of or hold separate, as a result of the Joint Venture, any portion of the business or assets of the Company; + +7.1.4 by FSL or AFSL upon a breach of any representation, warranty, covenant or agreement on the part of TPH or TPH-A set forth in this Agreement or the SPA, or if any representation or warranty of TPH or TPH-A in this Agreement or the SPA shall have become untrue, in either case such that the conditions set forth in Article 7.2 of the SPA would not be satisfied ("Terminating TPH Breach"); provided, however, that, if such Terminating TPH Breach is curable by TPH or TPH-A through the exercise of such Party's reasonable best efforts and for so long as such Party continues to exercise such reasonable best efforts, FSL or AFSL may not terminate this Agreement under this Section 7.1.4 unless such breach is not cured within thirty (30) days after written notice thereof is provided by FSL or AFSL to TPH and TPH-A pursuant to Section 11.7 (but no cure period is required for a breach which, by its nature, cannot be cured); or + +7.1.5 by TPH or TPH-A upon a breach of any representation, warranty, covenant or agreement on the part of FSL or AFSL set forth in this Agreement or the SPA, or if any representation or warranty of FSL or AFSL in this Agreement or the SPA shall have become untrue, in either case such that the conditions set forth in Article 7.1 of the SPA would not be satisfied ("Terminating FSL Breach"); provided, however, that, if such Terminating FSL Breach is curable by FSL or AFSL through the exercise of such Party's reasonable best efforts and for so long as such Party continues to exercise such reasonable best efforts, TPH or TPH-A may not terminate this Agreement under this Section 7.1.5 unless such breach is not cured within thirty (30) days after written notice thereof is provided by TPH or TPH-A to FSL and AFSL pursuant to Section 11.7 (but no cure period is required for a breach which, by its nature, cannot be cured). + +7.2 Effect of Termination Prior to the Effective Date. In the event of termination of this Agreement pursuant to Section 7.1, this Agreement shall forthwith become void and of no further force and effect, there shall be no liability under this Agreement on the part of any Party or any of their respective officers or directors, and all rights and obligations of each Party hereto shall cease; provided, however, that (i) Section 11.4 and Section 11.6 shall remain in full force and effect and survive any termination of this Agreement and (ii) nothing herein shall relieve any Party from liability for the willful breach of any of its representations or warranties or the breach of any of its covenants or agreements set forth in this Agreement. + +7.3 Termination After the Effective Date. + +7.3.1 After the Effective Date, this Agreement may be terminated on the date that the first of the following shall occur: + +(i) by mutual written consent duly executed by FSL and AFSL on the one hand, and TPH-A and TPH on the other hand; + +(ii) By FSL/AFSL or TPH/TPH-A, if there is only one (1) shareholder, whatsoever the reason, in the Company; + +- 16- + + + + + +Confidential Execution Version + +(iii) If the Put Option or Call Option is exercised, one (1) Business Day after the Put Closing Date or Call Closing Date, as applicable; + +(iv) By TPH/TPH-A, if FSL/AFSL has not exercised the Put Option within one hundred eighty (180) days of the Option Starting Date; or + +(v) By FSL/AFSL and TPH/TPH-A, if there is a change in the Control of the other and the acquiring/succeeding entity causing such change in the Control is an entity that may be reasonably believed to be objectionable to the Japanese Government and/or FSL including FSL's Affiliates in case of the termination by FSL/AFSL or the US Government and/or TPH in case of the termination by TPH/TPH-A, termination to be effective upon thirty (30) days' notice of termination. By way of example only, an entity that deals in weapons or weapon systems directly or indirectly may be deemed as such objectionable entity. + +7.3.2 In the event that any one of the following events applies to a Party, the other Party(ies) shall have the right to terminate this Agreement at any time: + +(i) it has breached any provisions of this Agreement and, after having received a written notice to cure the breach from the other Party(ies), has failed to cure such breach within thirty (30) days after the receipt of such notice; + +(ii) it has been subject to attachment, provisional disposition or has been subject to a procedure for the collection of a tax delinquency; or + +(iii) a petition for the commencement of any bankruptcy, civil rehabilitation, or corporation liquidation procedure has occurred. + +7.4 Dissolution and Winding-up. In case where this Agreement is terminated pursuant to Section 7.3 (except for the cases of Section 7.3.1(ii) and (iii), and the cases where a Shareholder has exercised the right as specified in Section 7.4 or 7.5), the Company shall be dissolved and wound up unless otherwise agreed by the Parties. In the absence of mutual agreement of the Parties to dissolve and wind up the Company on such terms and conditions as they shall determine, the business and affairs of the Company shall be dissolved and wound up in accordance with the Laws then in effect. + +7.5 Shareholder Calls Upon Breach. + +7.5.1 Calls by AFSL. If, after the Effective Date, TPH or TPH-A shall have materially breached any of its representations or warranties contained in this Agreement or shall have failed to comply in any material respect with any of the other covenants or agreements contained in this Agreement, which breach or failure shall not have been remedied within thirty (30) days after written notice thereof (the "Default Notice") has been given by AFSL to TPH/TPH-A, then AFSL shall have the option of purchasing from TPH-A, and TPH-A shall be obligated to sell, all of the Shares then owned by TPH-A at a purchase price per Share equal to the lesser of: (i) the Net Book Value as of the most recent month end (provided that, if the Net Book Value is a negative amount, the product of the Net Book Value multiplied by such Sale Shares shall be deemed to be one Japanese Yen (¥1)), or (ii) the Shares Purchase Price, divided by the number of Sale Shares. AFSL shall provide written notice of its election (the "Election Notice") to purchase the Shares owned by TPH-A within ten (10) Business Days following the expiration of the thirty (30) day cure period set forth in the Default Notice. The closing of the purchase of the Shares owned by TPH-A + +- 17- + + + + + +Confidential Execution Version + +shall take place within thirty (30) Business Days following the date of the Election Notice, or at such other time as the Parties may mutually agree. At such closing, AFSL shall deliver to TPH-A, by wire transfer, the full amount of the purchase price in Japanese Yen for such Shares as provided in this Section 7.5.1 against delivery by TPH-A of the following: (a) a sale agreement in form reasonably satisfactory to AFSL containing among other things, a representation and warranty of TPH-A that it is, and AFSL shall be, the beneficial owner of such Shares, with good title thereto, free and clear of all liens and other encumbrances; (b) documentary evidence reasonably satisfactory to AFSL of the transfer to it of all of TPH-A's Shares and (c) resignations of all Directors, if any, on the Board appointed by TPH-A. Notwithstanding the remedies provided in this Section 7.5.1, AFSL/FSL shall be entitled to all other remedies against TPH/TPH-A available at law or equity or under this Agreement. + +7.5.2 Calls by TPH-A. If, after the Effective Date, FSL or AFSL shall have materially breached any of its representations or warranties contained in this Agreement or shall have failed to comply in any material respect with any of the other covenants or agreements contained in this Agreement, which breach or failure shall not have been remedied within thirty (30) days after the Default Notice has been given by TPH-A to FSL/AFSL, then TPH-A shall have the option of purchasing from AFSL, and AFSL shall be obligated to sell, all of the Shares then owned by AFSL at a purchase price per Share equal to the lesser of: (i) the Net Book Value as of the most recent month end (provided that, if the Net Book Value is a negative amount, the product of the Net Book Value multiplied by such Sale Shares shall be deemed to be one Japanese Yen (¥1)), or (ii) the Shares Purchase Price, divided by the number of Sale Shares. TPH-A shall provide the Election Notice to purchase the Shares owned by AFSL within ten (10) Business Days following the expiration of the thirty (30) day cure period set forth in the Default Notice. The closing of the purchase of the Shares owned by AFSL shall take place within thirty (30) Business Days following the date of the Election Notice, or at such other time as the Parties may mutually agree. At such closing, TPH-A shall deliver to AFSL, by wire transfer, the full amount of the purchase price in Japanese Yen for such Shares as provided in this Section 7.5.2 against delivery by AFSL of the following: (a) a sale agreement in form reasonably satisfactory to TPH-A containing among other things, a representation and warranty of AFSL that it is, and TPH-A shall be, the beneficial owner of such Shares, with good title thereto, free and clear of all liens and other encumbrances; (b) documentary evidence reasonably satisfactory to TPH-A of the transfer to it of all of AFSL's Shares and (c) resignations of all Directors, if any, on the Board appointed by AFSL. Notwithstanding the remedies provided in this Section 7.5.2, TPH/TPH-A shall be entitled to all other remedies against FSL/AFSL available at law or equity or under this Agreement. + +7.6 Shareholder Calls Upon Bankruptcy After the Effective Date. + +7.6.1 Calls by AFSL. After the Effective Date, in the event of (a) any distress, execution, sequestration or other process being levied or enforced upon TPH or TPH-A; (b) the adjudication of TPH or TPH-A as a bankrupt or insolvent subject to any insolvency or bankruptcy law; (c) the making by the TPH or TPH-A of an assignment for the benefit of creditors; (d) the suspension of payments or a moratorium on payments to creditors; or (e) the appointment of a receiver or judicial manager or trustee for the business or properties of TPH or TPH-A, then AFSL shall have the right to purchase the Shares of TPH-A in the same manner and subject to the same terms and conditions as specified in Section 7.5.1. + +- 18- + + + + + +Confidential Execution Version + +7.6.2 Calls by TPH-A. After the Effective Date, in the event of (a) any distress, execution, sequestration or other process being levied or enforced upon FSL or AFSL; (b) the adjudication of FSL or AFSL as a bankrupt or insolvent subject to any insolvency or bankruptcy law; (c) the making by the FSL or AFSL of an assignment for the benefit of creditors; (d) the suspension of payments or a moratorium on payments to creditors; or (e) the appointment of a receiver or judicial manager or trustee for the business or properties of FSL or AFSL, then TPH-A shall have the right to purchase the Shares of AFSL in the same manner and subject to the same terms and conditions as specified in Section 7.5.2. + +7.7 Survival of Provisions After the Effective Date. Sections 11.4, 11.6, 11.7, 11.14 and 11.15 shall specifically survive the termination of this Agreement after the Effective Date. In case where this Agreement is terminated pursuant to Section 7.3.1(ii) and (iii), Section 9.4, Article X, and Section 11.5 shall also specifically survive the termination of this Agreement after the Effective Date. + +7.8 Cooperation. During the term of the Joint Venture, each Party shall cooperate with the other and shall take all actions necessary in order to consummate any sale and purchase of Shares, or dissolution and winding up of the Company. + +ARTICLE VIII TRANSFER RESTRICTIONS + +8.1 Restrictions on Transfers. Except as set forth in this Article VIII, prior to the Option Starting Date, without the prior written consent of the other Shareholders, no Shareholder may sell, assign, transfer, pledge, encumber or otherwise dispose of, by operation of Law or otherwise, any of its Shares, or rights in or associated with such Shares, and any purported sale, assignment, transfer, pledge, encumbrance or disposition by a Shareholder of its Shares in violation of this Article VIII shall be invalid and of no force and effect. + +8.2 Permissible Transfers. AFSL shall be entitled at any time to transfer all but not a portion of the Shares registered in its name to FSL or any other entity Controlled by FSL, and TPH-A shall be entitled at any time to transfer all but not a portion of the Shares registered in its name to TPH or any other entity Controlled by TPH; provided that FSL (or such other entity Controlled by FSL) and TPH (or such other entity Controlled by TPH), as applicable, shall assume the obligations of AFSL and TPH-A, as applicable, hereunder, as set forth in Article VI. + +ARTICLE IX PUT OPTION AND CALL OPTION + +9.1 AFSL's Right to Require the Purchase of the Shares by TPH or TPH-A. + +9.1.1 As longs as AFSL and FSL are not in material and continuing breach of this Agreement or the Ancillary Agreements, FSL or AFSL may trigger the option to sell the Put Shares to TPH-A or its designee (the "Put Option") by providing a written notice of the exercise of the Put Option (the "Put Exercise Notice") simultaneously to the Company, TPH and TPH-A, which notice states (i) such Party's bona fide intention to exercise the Put Option, and (ii) the date on which such Party intends that the Put Closing Date occur. + +- 19- + + + + + +Confidential Execution Version + +9.1.2 FSL or AFSL may not exercise the Put Option for less than one hundred percent (100%) of the Shares held by both FSL and AFSL or any Affiliate of FSL or AFSL, as the case may be. + +9.1.3 FSL and AFSL may not exercise the Put Option prior to the Option Starting Date nor more than one hundred eighty (180) days after the Option Starting Date. + +9.1.4 The purchase price for the Put Shares (the "Put Option Price") shall be the greater of (x) the amount in Japanese Yen equal to the Net Book Value as of the most recently completed month end prior to the Put Closing Date, minus the Net Book Value as of the most recently completed month end prior to the Effective Date, multiplied by the number of Put Shares, or (y) one Japanese Yen (¥1). + +9.1.5 Upon FSL's or AFSL's exercise of the Put Option, TPH-A shall be obliged to purchase or cause TPH-A's designees to purchase, and TPH shall be obliged to cause TPH-A or TPH-A's designees to purchase, the Put Shares in accordance with this Section 9.1. For the avoidance of doubt, the Put Option is the right of AFSL/FSL, and AFSL/FSL is not obliged to exercise the Put Option. + +9.1.6 Completion of the sale and purchase of the Put Shares pursuant to the exercise of the Put Option by AFSL/FSL shall take place on the date specified in the Put Exercise Notice (which shall be a date after at least sixty (60) days from the date of the Put Exercise Notice) (the "Put Closing Date") and on which date: + +(i) TPH-A shall, or shall cause its designees to, and TPH shall cause TPH-A or TPH-A's designees to, pay to AFSL the Put Option Price for the Put Shares by way of a bank transfer to the bank account as separately designated by AFSL; and + +(ii) in exchange for which, AFSL shall deliver to TPH-A or its designees duly executed a letter of request to enter in the shareholder register of the Company the information that is required to be registered with regard to the Put Shares; and + +9.1.7 AFSL and TPH-A shall cause the Board to approve the share transfer of the Put Shares on or prior to the Put Closing Date. + +9.2 TPH-A's Right to Require the Purchase of the Shares from FSL or AFSL. + +9.2.1 As longs as TPH-A and TPH are not in material and continuing breach of this Agreement or the Ancillary Agreements, TPH-A or TPH may trigger the option to purchase the Call Shares (the "Call Option") by providing a written notice of the exercise of the Call Option (the "Call Exercise Notice") simultaneously to the Company, FSL and AFSL, which notice states (i) such Party's bona fide intention to exercise the Call Option, and (ii) the date on which such Party intends that the Call Closing Date occur. + +- 20- + + + + + +Confidential Execution Version + +9.2.2 TPH or TPH-A may not exercise the Call Option for less than one hundred percent (100%) of the Shares held by both FSL and AFSL or any Affiliate of FSL or AFSL, as the case may be. + +9.2.3 TPH-A and TPH may not exercise the Call Option prior to the Option Starting Date nor more than one hundred eighty (180) days after the Option Starting Date. + +9.2.4 The purchase price for the Call Shares (the "Call Option Price") shall be the greater of (x) the amount in Japanese Yen equal to the Net Book Value as of the most recently completed month end prior to the Call Closing Date, minus the Net Book Value as of the most recently completed month end prior to the Effective Date, multiplied by the number of Call Shares, or (y) one Japanese Yen (¥1). + +9.2.5 Upon TPH-A's or TPH's exercise of the Call Option, AFSL/FSL shall be obliged to sell, or cause the holder of the Call Shares to sell, the Call Shares to TPH-A or its designee in accordance with this Section 9.2. For the avoidance of doubt, the Call Option is the right of TPH-A and TPH-A is not obliged to exercise the Call Option. + +9.2.6 Completion of the sale and purchase of the Call Shares pursuant to the exercise of the Call Option by TPH- A/TPH shall take place on the date specified in the Call Exercise Notice (which shall be a date after at least sixty (60) days from the date of the Call Exercise Notice) (the "Call Closing Date") and on which date: + +(i) TPH-A shall, or shall cause its designees to, and TPH shall cause TPH-A or TPH-A's designees to, pay to AFSL the Call Option Price for the Call Shares by way of a bank transfer to the bank account as separately designated by AFSL; and + +(ii) in exchange for which, AFSL shall deliver to TPH-A or its designees duly executed a letter of request to enter in the shareholder register of the Company the information that is required to be registered with regard to the Call Shares. + +9.2.7 AFSL and TPH-A shall cause the Board to approve the share transfer of the Call Shares on or prior to the Call Closing Date. + +9.3 Conditions to Put Option or Call Option Closing. Each Party's obligation to complete the Put Option or Call Option at the Put Closing Date or Call Closing Date, as applicable, is subject to the fulfillment on or before such Put Closing Date or Call Closing Date of each of the following conditions, unless waived in writing (where permissible) by the applicable party in such closing: + +9.3.1 TPH's Stockholder Approval. The acquisition of the Option Shares (as defined in the SPA), shall have been approved and adopted by the requisite stockholders of TPH in accordance with Delaware Law and TPH's Certificate of Incorporation and Bylaws, which approval shall have been obtained prior to the Effective Date, to the extent permissible under Delaware Law. + +9.3.2 No Order. No Governmental Authority or court of competent jurisdiction located or having jurisdiction over any of the Parties in the United States shall have enacted, issued, promulgated, enforced or entered any statute, rule, regulation, decree, judgment, injunction or other + +- 21- + + + + + +Confidential Execution Version + +order, whether temporary, preliminary or permanent (each an "Order") which is then in effect and has the effect of making the closing of the Put Option or Call Option, as applicable, illegal or otherwise prohibiting consummation of the Put Option or Call Option. + +9.3.3 Governmental Approvals. All required authorizations, permits, consents, orders, actions or approvals of, or declarations or filings with, or expirations or terminations of waiting periods imposed by, any Governmental Authority in the United States, whether federal, state or local, that may be required, as well as any Governmental Authority in any other jurisdiction which the parties mutually agree in good faith is required to be obtained, in each case, to consummate the Put Option or Call Option, shall have been filed, occurred or been obtained, including that any required waiting period (and any extension thereof) under the Hart-Scott-Rodino Act relating to the transactions contemplated by the Put Option or Call Option shall have expired or been terminated early. + +9.3.4 No Other Litigation. There shall not be pending any legal proceeding against or on behalf of any Party preventing or prohibiting or seeking to prevent or prohibit the closing of the Put Option or the Call Option, as applicable. + +9.4 Other Obligations. + +9.4.1 After the Put Closing Date or Call Closing Date, as applicable, the Parties shall use their best efforts to obtain and maintain all necessary approvals and registrations to effect this Agreement and all related agreements and documents; provided, however, that the Parties shall not be required to change any provision of this Agreement or the SPA, and no Party shall be required to divest any material business unless contemplated by this Agreement or the SPA. + +9.4.2 For two (2) years after the Put Closing Date or Call Closing Date, as applicable, TPH shall make, and cause TPH-A to make, every best effort to maintain the employees of the Company. + +9.4.3 The Directors appointed by FSL or AFSL shall take whatever steps as are necessary to resign effective as of the Put Closing Date or Call Closing Date, as applicable. Immediately after the Put Closing Date or Call Closing Date, as applicable, TPH-A, TPH and the Company shall be prohibited from using the logo, trademark, corporate name and other indications utilizing or showing the name of AFSL or its Affiliates (the "Fujitsu Logos"), and shall exclude the Fujitsu Logos from any material of the Company. TPH/TPH-A shall change the corporate name of the Company. + +ARTICLE X TREATMENT OF EMPLOYEES + +10.1 New Terms and Conditions for Employment. The terms and conditions of employment of any person employed by the Company after the Put Closing Date or Call Closing Date, as applicable, shall be on terms and conditions satisfactory to the Company, TPH and TPH-A. + +10.2 Representations and Warranties Regarding Employment. FSL and AFSL represent and warrant to TPH and TPH-A, as of the date hereof and as of the Put Closing Date or Call Closing Date, as applicable, that: + +- 22- + + + + + +Confidential Execution Version + +10.2.1 FSL, AFSL and the Company do not have any pension liability in respect of the Company's employees or the Company's pension plans; + +10.2.2 there is no material labor dispute between FSL, AFSL or the Company, on the one hand, and the Company's employees, on the other hand or legal proceeding against FSL, AFSL or the Company related to the Company's employees; and + +10.2.3 in the event of any liability to the Company's employees to the extent related to their employment by the Company, AFSL, FSL or AFSL/FSL's Affiliates prior to the Put Closing Date or Call Closing Date, as applicable, AFSL and FSL agree that such liability shall be borne solely by AFSL/FSL and not the Company or TPH-A/TPH. + +ARTICLE XI MISCELLANEOUS + +11.1 No Partnership. None of the provisions of this Agreement shall be deemed to constitute a partnership between or among the Parties and they shall have no authority to bind one another or the Company in any way. + +11.2 Limitations on Parties' Authority. None of the Parties shall have or hold itself out as having, any right, authority or agency to act on behalf of any other Party or the Company in any capacity or in any manner except as specifically authorized in this Agreement, and none of the Parties shall become liable to any other Parties or to any other Person by reason of any representation, action or omission of any other Party contrary to this provision. Without limiting the generality of the foregoing, in no event shall any Party have any liability or obligation for any debts, liabilities or contractual obligations of any other Party to any other Person and each Party agrees to indemnify and hold harmless any other Party as to such debts, liabilities and contractual obligations. + +11.3 Indemnification. + +11.3.1 Each Party agrees to indemnify, defend and hold harmless the Company and any other Party, its permitted successors and assigns, from and against any and all losses, liabilities, claims, damages, costs and expenses including reasonable legal fees and disbursements in connection therewith (collectively, "Claims") asserted against or incurred by the Company or such other Party which arise out of, result from, or may be payable by virtue of, any breach of any representation, warranty, covenant or agreement made or obligation required to be performed by the indemnifying Party pursuant to this Agreement. Notwithstanding the foregoing, claims related to the purchase of the Shares under the SPA shall be governed by the indemnification provisions set forth in the SPA. + +11.3.2 In the case of a third party Claim which is subject to indemnification under this Section 11.3, the indemnifying Party shall be notified promptly in writing of the existence of any such Claim instituted at any time against or made upon the indemnified Party or the Company by any third party, and shall be given the opportunity to defend the same with counsel of its choice, in which defense the indemnified Party or the Company, as the case may be, shall cooperate. If the indemnifying Party, after notification, fails promptly to undertake such defense, then the indemnified Party, or the Company, as the case may be, may undertake the defense with counsel of its choice, in which case the indemnifying Party shall bear the cost of such defense, including reasonable legal + +- 23- + + + + + +Confidential Execution Version + +fees and disbursements in connection therewith, and shall pay the amount of any judgment or settlement. + +11.4 Confidentiality. + +11.4.1 All information, whether written or oral, relating to the Company, the Parties or their Affiliates, or their respective businesses or operations, which includes but is not limited to information obtained as a proprietary right ("Confidential Information"), disclosed by any Party (the "Disclosing Party") to any other Party (or its directors, officers, employees or representatives) shall be kept strictly secret and confidential and shall not be disclosed to any Person except to the extent that any such disclosure is necessary in connection with the performance of this Agreement, and except to the extent that (i) such information is known to such other Parties when received or is or subsequently becomes lawfully obtained from other sources; (ii) the duty as to confidentiality and non-use is waived in writing by the Disclosing Party; or (iii) disclosure of such information is required by applicable Laws or is validly ordered by a Governmental Authority. The Parties further agree that they shall not use, nor permit their respective Affiliates to use, any Confidential Information for any purpose whatsoever except in the manner expressly provided or contemplated in this Agreement. Notwithstanding the foregoing, the treatment of any Confidential Information disclosed pursuant to the Amended Process Development Agreement shall be governed solely by the Amended Process Development Agreement. + +11.4.2 Each of the Parties agrees to take, and to cause its respective Affiliates and the Company to take, reasonably adequate security and precautionary measures to effect compliance with this Section 11.4 by directors, officers, employees and agents of each of the Parties, their respective Affiliates and the Company who are given access to Confidential Information. + +11.4.3 Each of the Parties hereby acknowledges that the Disclosing Party would be irreparably harmed by a breach of this Section 11.4 and it would not be possible to estimate damages resulting from such a breach. The Parties agree that the Disclosing Party shall be entitled to injunctive relief to prevent a breach or continued breach of this Section 11.4, or any part of it, and to secure the enforcement of this Section 11.4 and shall be entitled to recover from the other Parties reasonable legal fees and all costs and expenses incurred in connection with such an action + +11.5 Access to Company Information After the Put Closing Date or the Call Closing Date. In case it is necessary for AFSL/FSL to access to any materials or information of the Company prepared or otherwise made on or before the Put Closing Date or the Call Closing Date due to requirement by any Governmental Authority or any third party on or after the Put Closing Date or the Call Closing Date, then, TPH/TPH-A shall fully cooperate, and shall cause the Company to fully cooperate, with AFSL/FSL so that AFSL/FSL can access such materials or information. + +11.6 Expenses. Except as otherwise expressly provided herein, Each Party shall pay their own expenses incurred in connection with the execution of this Agreement and their respective performance of the obligations provided for herein, including the expenses incurred by Directors nominated by the respective Shareholders in connection with attendance at meetings of the Board. + +- 24- + + + + + +Confidential Execution Version + +11.7 Notices. All notice, waivers and other communications required or permitted hereunder shall be in writing and shall be deemed to have been duly given when delivered by hand or one (1) day after being sent by e-mail (with reasonable evidence of transmission) and followed by registered mail or an internationally recognized overnight courier service if those to be notified, including Shareholders, Directors and auditors, reside outside Japan, addressed to the Party to whom the notice is intended to be given at the addresses specified below: + +(a) If to AFSL: No.4 Kogyo Danchi, Monden-Machi, Aizu Wakamatsu, Fukushima, Japan Aizu Fujitsu Semiconductor Limited Attn: President and Representative Director + +(b) If to FSL: Shin-Yokohama Chuo Building, 2-100-45, Shin-Yokohama, Kohoku-Ku, Yokohama, Kanagawa, Japan Fujitsu Semiconductor Limited Attn: Head of Corporate Management Unit + +(c) If to TPH: 75 Castilian Drive Goleta, CA 93117, U.S.A. Transphorm, Inc. Attn: Chief Executive Officer + +With a copy, which shall not constitute notice, to each of: + +Wilson Sonsini Goodrich & Rosati, P.C. 650 Page Mill Road Palo Alto, CA 94304-1050, U.S.A. Attn: Mark Bertelsen and Julia Reigel + +and + +Mori Hamada & Matsumoto Marunouchi Park Building, 2-6-1 Marunouchi, Chiyoda-ku, Tokyo 100-8222, Japan Attn: Masujima Masakazu + +or to such other address or addresses as any such Party may from time to time designate by written notice. Notwithstanding the foregoing, the Parties acknowledge and agree that notice hereunder may be provided by e-mail, but such notice shall not be deemed effective unless and until the Party to whom such notice was delivered confirms, in writing, receipt of such notice. + +- 25- + + + + + +Confidential Execution Version + +11.8 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the Parties and their permitted successors and assigns. Notwithstanding the foregoing, no rights, obligations or liabilities hereunder shall be assignable by a Party without prior written consent of all of the other Parties; provided, however, that a Party shall not unreasonably withhold its consent to the assignment of rights and obligations by the other Parties to its Affiliate if that Affiliate's performance has been guaranteed satisfactorily in form and substance by the assigning Party. + +11.9 Waiver. No action taken pursuant to this Agreement shall be deemed to constitute a waiver of compliance with any representation, warranty, covenant or agreement contained in this Agreement and shall not operate or be construed as a waiver of a similar or dissimilar nature. A Party may by written notice (a) extend the time for performance of any of the obligations or other actions of any other Parties under this Agreement, (b) waive any inaccuracies in the representations or warranties of any other shareholder contained in this Agreement, or (c) waive or modify performance of any of the covenants or obligations of any other Parties under this Agreement. + +11.10 Announcements. FSL, AFSL TPH and TPH-A shall consult and confer with each other prior to making any public announcement concerning any of the transactions contemplated in this Agreement. + +11.11 Entire Agreement. This Agreement supersedes any previous agreement, whether written or oral, that may have been made or entered into by and among the Parties or any of them or their representatives relating to the matters contemplated hereby. This Agreement constitutes the entire agreement by and among the Parties with respect to the subject matter hereof. + +11.12 Amendments. This Agreement may be amended or supplemented only by written agreement signed by the Parties. + +11.13 Limitations on Rights of Third Persons. Nothing expressed or implied in this Agreement is intended or shall be construed to confer upon or give any Person other than the Parties any rights or remedies under or by reason of this Agreement or any transaction contemplated hereby, except the permitted assigns of the Parties. + +11.14 Governing Law; Language. The English text of this Agreement shall control any interpretation of its provisions, and this Agreement and the legal relations among the Parties and the Company shall in all respects be interpreted, construed and governed by and in accordance with the laws of Japan. + +11.15 Resolution of Disputes. + +11.15.1 The Parties shall attempt in good faith to resolve any and all disputes arising out of or relating to this Agreement through friendly consultations. If the Parties cannot resolve the dispute through friendly consultation, the provisions of Section 11.15.2 to Section 11.15.4 shall apply with respect to such dispute. + +11.15.2 Any dispute, controversy or claim arising out of or relating to this Agreement, or the breach, termination or invalidity hereof, shall be finally resolved exclusively by arbitration administered by the Hong Kong International Arbitration Centre ("HKIAC"). The arbitration shall be conducted in accordance with the HKIAC Administered Arbitration Rules in effect at the time of the arbitration, except as they may be modified by mutual agreement of the + +- 26- + + + + + +Confidential Execution Version + +Parties. The seat of the arbitration shall be Hong Kong. The arbitration shall be conducted in the English language. + +11.15.3 The arbitration shall be conducted by three (3) arbitrators. The Party initiating arbitration (the "Claimant") shall appoint an arbitrator in its request for arbitration (the "Request"). The other Party to the arbitration (the "Respondent") shall appoint an arbitrator within thirty (30) days of receipt of the Request and shall notify Claimant of such appointment in writing. The first two (2) arbitrators appointed in accordance with this provision shall appoint a third arbitrator, who shall act as chair of the tribunal. The arbitral award shall be in writing, state the reasons for the award, and be final and binding on the Parties. The award may include an award of costs, including, without limitation, reasonable attorneys' fees and disbursements. In addition to monetary damages, the arbitral tribunal shall be empowered to award equitable relief. + +11.15.4 The Parties agree that the arbitration shall be kept confidential, and that the costs of arbitration shall be borne by the losing Party unless otherwise determined by the arbitration award. All payments made pursuant to the arbitration decision or award and any judgment entered thereon shall be made in United States dollars, free from any deduction, offset or withholding for taxes. + +11.15.5 Notwithstanding this Section 11.15 or any other provision to the contrary in this Agreement, no Party shall be obligated to follow the foregoing arbitration procedures where such Party intends to apply to any court of competent jurisdiction for an interim injunction or similar equitable relief against any other Party, provided there is no unreasonable delay in the prosecution of that application. + +11.15.6 When any dispute occurs and when any dispute is under litigation or arbitration, except for the matters in dispute, the Parties shall continue to fulfill their respective obligations and shall be entitled to exercise their rights under this Agreement. However, this provision shall not apply to rights or obligations extinguished in connection with a valid termination of this Agreement. + +11.15.7 Judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction. Except as set forth above, each of the Parties hereby irrevocably waives any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby. + +11.16 Severability. Each section and subsection of this Agreement constitutes a separate and distinct undertaking or provision hereof. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable Laws. In the event that any provision of this Agreement shall finally be determined by a competent court or tribunal to be unlawful or unenforceable, such provision shall be deemed severed from this Agreement, but every other provision of this Agreement shall remain in full force and effect, and in substitution for any such provision held unlawful or unenforceable, there shall be substituted a provision of similar import reflecting the original intent of the Parties to the extent permissible under applicable Laws. + +- 27- + + + + + +Confidential Execution Version + +11.17 Execution in Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same agreement. The signature of each Party may be evidenced by an electronic (e.g., pdf) copy of this Agreement bearing such signature and transmitted to the other Parties. Such signature shall be valid and binding as if an original executed copy of this Agreement has been delivered. + +11.18 Titles and Headings. Titles and headings to sections herein are inserted for convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement. + +11.19 Counsel only to TPH and TPH-A. Wilson Sonsini Goodrich & Rosati, P.C. ("WSGR") and Mori Hamada & Matsumoto ("MHM") are counsel solely to TPH-A and TPH. The other Parties to the Agreement acknowledge that they are not relying on WSGR or MHM for advice in connection with the matters related to this Agreement and the transactions contemplated hereby, and that they have had the opportunity consult counsel of their own choosing and have elected not to do so. + +[Signature pages follow] + +- 28- + + + + + +Confidential Execution Version + +IN WITNESS WHEREOF, the Parties have caused their respective duly authorized officers to execute this Agreement as of the day and year first above written. + +Aizu Fujitsu Semiconductor Limited + +By: /s/ Atsuo Shimizu Name: Atsuo Shimizu Title: President and Representative Director + +Fujitsu Semiconductor Limited + +By: /s/ Kagemasa Magaribuchi Name: Kagemasa Magaribuchi Title: President and Representative Director + +Transphorm, Inc. + +By: /s/ Mario Rivas Name: Mario Rivas Title: Chief Executive Officer + +Signature page to the Joint Venture Agreement + + + + + +Confidential Execution Version + +EXHIBIT A FORM OF JOINDER AGREEMENT + +This JOINDER (this "Joinder"), dated as of [● ●], 2017, is delivered pursuant to (a) Section 6.3 of that certain Joint Venture Agreement dated as of May 23, 2017, by and among Aizu Fujitsu Semiconductor Limited (the "Seller"), Fujitsu Semiconductor Limited ("FSL") and Transphorm, Inc. ("TPH") (as such agreement may be amended, supplemented or modified from time to time in accordance with its terms, the "Joint Venture Agreement") and (b) Section 5.3.2 of that certain Shares Purchase Agreement dated as of May 23, 2017, by and among the Seller, FSL and TPH (as such agreement may be amended, supplemented or modified from time to time in accordance with its terms, the "Shares Purchase Agreement"). The undersigned, [●], a Japanese corporation ("TPH-A") hereby agrees that this Joinder may be attached to each of the Joint Venture Agreement and the Shares Purchase Agreement. + +1. Joinder to Joint Venture Agreement. TPH-A, by executing and delivering this Joinder, hereby becomes a party to the Joint Venture Agreement in the capacity of "TPH-A" as defined therein in accordance with Section 6.3 thereof, and agrees to be bound by all of the terms and conditions thereof (including without limitation all of the representations and warranties and covenants of TPH-A therein to be made or performed, as applicable, from and after the date hereof), in each case as if the undersigned were a direct signatory thereto. + +2. Joinder to Shares Purchase Agreement. TPH-A, by executing and delivering this Joinder, hereby becomes a party to the Shares Purchase Agreement in the capacity of the "Purchaser" as defined therein in accordance with Section 5.3.2 thereof, and agrees to be bound by all of the terms and conditions thereof (including without limitation all of the representations and warranties and covenants of the Purchaser therein to be made or performed, as applicable, from and after the date hereof), in each case as if the undersigned were a direct signatory thereto. + +3. Representations and Warranties. TPH-A hereby represents and warrants that: + +a. TPH-A has all requisite power and authority to enter into this Joinder and to perform its covenants and obligations hereunder; and + +b. The execution and delivery of this Joinder and the performance by TPH-A of its covenants and obligations hereunder have been duly authorized by all necessary action on the part of TPH-A and no further action is required on the part of TPH-A to authorize this Joinder or the performance by TPH-A of its covenants and obligations hereunder. + +[SIGNATURE PAGE FOLLOWS] + +-Exhibit A-1- + + + + + +Confidential Execution Version + +IN WITNESS WHEREOF, the undersigned has caused this Joinder to be duly executed and delivered by its officer thereunto duly authorized as of [● ●], 2017. + +[●], a Japanese corporation + +By: Name: Title: + +-Exhibit A-2- + + + + + +Confidential Execution Version + +APPENDIX 1 + +Key Employees + +Department Employee ID Name Date of hiring Title + +[***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] Manager [***] [***] [***] [***] [***] [***] [***] [***] [***] + +Name Current Employment [***] Seconded to TPH-J [***] Seconded to TPH-J [***] TPH-J [***] Seconded to TPH-J [***] Seconded to TPH-J [***] Seconded to TPH-J [***] TPH-J [***] Seconded to TPH-J [***] Seconded to TPH-J [***] Seconded to TPH-J [***] Seconded to TPH-J [***] Seconded to TPH-J + +-A1-1- + + + + + +Confidential Execution Version + +APPENDIX 2 + +GaN Equipment + +No Asset ID Tool name Tool ID Application + +1 I12026102439 [***] [***] [***] 2 I12016100800 [***] [***] [***] 3 I12016100427 [***] [***] [***] 4 I12016100801 [***] [***] [***] 5 I14086159094 [***] [***] [***] 6 I14086159092 [***] [***] [***] + +Invoice Amount + +Item Specification Last Invoice Month 2017/06 2017/07 2017/08 2017/09 2017/10 2017/11 2017/12 2018/01 2018/02 2018/03 2018/04 2018/5 2018/6 2018/7 2018/8 2018/9 2018/10 2018/11 2018/12 2019/01 2019/02 2019/03 2019/04 + +[***] [***] 201804 [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] + +[***] [***] 201802 [***] [***] [***] [***] [***] [***] [***] [***] [***] + +[***] [***] 201803 [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] + +[***] [***] 201804 [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] + +[***] [***] 201807 [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] + +[***] [***] 201802 [***] [***] [***] [***] [***] [***] [***] [***] [***] + +[***] [***] 201802 [***] [***] [***] [***] [***] [***] [***] [***] [***] + +[***] [***] 201802 [***] [***] [***] [***] [***] [***] [***] [***] [***] + +[***] [***] 201804 [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] + +[***] [***] 201804 [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] + +[***] [***] 201804 [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] + +[***] [***] 201802 [***] [***] [***] [***] [***] [***] [***] [***] [***] + +[***] [***] 201802 [***] [***] [***] [***] [***] [***] [***] [***] [***] + +[***] [***] 201804 [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] + +[***] [***] 201804 [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] + +[***] [***] 201803 [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] + +[***] [***] 201803 [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] + +[***] [***] 201802 [***] [***] [***] [***] [***] [***] [***] [***] [***] + +[***] [***] 201803 [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] + +[***] [***] 201803 [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] + +[***] [***] 201803 [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] + +[***] [***] 201803 [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] + +[***] [***] 201810 [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] + +[***] [***] 201812 [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] + +[***] [***] 201902 [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] + +[***] [***] 201904 [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] + +[***] [***] 201904 [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] + +[***] [***] 201904 [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] + +[***] [***] 201904 [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] + +[***] [***] 201904 [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] + +[***] [***] 201904 [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] + +[***] [***] 201904 [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] + +[***] [***] 201711 [***] [***] [***] [***] [***] [***] + +-A2-1- \ No newline at end of file diff --git a/full_contract_txt/TRICITYBANKSHARESCORP_05_15_1998-EX-10-OUTSOURCING AGREEMENT.txt b/full_contract_txt/TRICITYBANKSHARESCORP_05_15_1998-EX-10-OUTSOURCING AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..d140de009d734f4e0aa701d34760f60fec185bb1 --- /dev/null +++ b/full_contract_txt/TRICITYBANKSHARESCORP_05_15_1998-EX-10-OUTSOURCING AGREEMENT.txt @@ -0,0 +1,695 @@ +OUTSOURCING AGREEMENT + +BY AND BETWEEN + +TRI CITY NATIONAL BANK + +and + +MARSHALL & ILSLEY CORPORATION acting through its division M&I DATA SERVICES + +DATED AS OF + +February 16, 1998 + +TABLE OF CONTENTS + +Page 1. DEFINITIONS 1.1 Background 1.2 Definitions 1.3 References 1.4 Interpretation 2. TERM 2.1 Initial Term 2.2 Extensions 3. APPOINTMENT 3.1 Performance by M&I Affiliates 3.2 Third Party Services 3.3 Proper Instructions 4. CONVERSION 4.1 Banking Applications 4.2 Development of Conversion Plan 4.3 Conversion Resources 4.4 Conversion Milestones 5. OUTSOURCING OF TRUST SERVICES 6. BANKING APPLICATIONS 6.1 Services to be Rendered 6.2 Banking Application Processing 6.3 Corporate Support Services 6.4 Item Processing Services 6.5 Automated Clearing House Services 6.6 Home Banking and Internet Services 6.7 Retail Delivery Systems 6.8 Visa Check/MasterMoney Card Services 6.9 EFT Services 7. FACILITIES MANAGEMENT 8. FEES 8.1 Fee Structure 8.2 Conversion 8.3 Pricing and Operational Assumptions 8.4 Banking Applications Services 8.5 Corporate Support Services 8.6 Item Processing Services 8.7 Management Services 8.8 Visa Check/MasterMoney Card Services 8.9 EFT Services 8.10 Training and Education 8.11 Excluded Costs 8.12 Disputed Amounts 8.13 Terms of Payment 8.14 Modification of Terms and Pricing 9. PERFORMANCE STANDARDS 9.1 General 9.2 Banking Applications 10. MODIFICATION OR TERMINATION OF SERVICES 10.1 Modifications to Services 10.2 Partial Termination by M&I 10.3 Partial Termination by Customer 10.4 Development of Custom Software + + + + + +11. TERMINATION 11.1 For Convenience 11.2 For Cause 11.3 Following Change in Control of Customer 11.4 Termination Assistance 12. EVENTS OF DEFAULT; REMEDIES 12.1 By M&I 12.2 By Customer 12.3 Remedies 13. DAMAGES 13.1 Direct Damages 13.2 No Consequential Damages 13.3 Equitable Relief 13.4 Limitation of Liability 13.5 Liquidated Damages 14. INSURANCE AND INDEMNITY 14.1 Insurance 14.2 Indemnity 14.3 Indemnification Procedures 15. DISPUTE RESOLUTION 15.1 Representatives of Parties 15.2 Continuity of Performance 16. REPRESENTATIONS AND WARRANTIES 16.1 By M&I 16.2 By Customer 17. CONFIDENTIALITY AND OWNERSHIP 17.1 Customer Data 17.2 M&I Systems 17.3 Confidential Information 17.4 Obligations of the Parties 17.5 Security 18. MANAGEMENT OF PROJECT 18.1 Account Representatives 18.2 Change Control Procedures 18.3 Reporting and Meetings 18.4 Development Projects and Technical Support 19. REGULATORY COMPLIANCE 20. DISASTER RECOVERY 20.1 Disaster Recovery Plan 20.2 Relocation 20.3 Resumption of Services 20.4 Annual Test 21. GENERAL TERMS AND CONDITIONS 21.1 Force Majeure 21.2 Transmission of Data 21.3 Equipment and Network 21.4 Reliance on Data 21.5 Data Backup 21.6 Balancing and Controls 21.7 Use of Services 21.8 Regulatory Assurances 21.9 IRS Filing 21.10 Affiliates 21.11 Future Acquisitions 22. MISCELLANEOUS PROVISIONS 22.1 Governing Law 22.2 Venue and Jurisdiction 22.3 Entire Agreement; Amendments 22.4 Assignment 22.5 Relationship of Parties 22.6 Notices 22.7 Headings 22.8 Counterparts 22.9 Waiver 22.10 Severability 22.11 Attorneys' Fees and Costs 22.12 Financial Statements 22.13 Publicity 22.14 Solicitation 22.15 No Third Party Beneficiaries 22.16 Construction 23. SOURCE CODE 23.1 Escrow 23.2 Copy of Source Code 23.3 Cost of Escrow 23.4 Customer's Right to Obtain the Source Code 23.5 Use of Source Code + +Schedules + +4.2 Conversion Plan 6.2 Banking Application Services 8.1 Fee Schedule + +Exhibits + +A RDS Agreement B ACH Authorization Agreement C Attorney-in-Fact Appointment D Affidavit + +OUTSOURCING AGREEMENT + + + + + + This Outsourcing Agreement ("Agreement") is made as of the 16th day of February, 1998, by and between Tri City National Bank, a Wisconsin corporation (including its Affiliates, "Customer") and Marshall & Ilsley Corporation, a Wisconsin corporation, acting through its division, M&I Data Services ("M&I"). + + In consideration of the payments to be made and services to be performed hereunder, the parties agree as follows: + +1. DEFINITIONS + +1.1 Background. + + This Agreement is being made and entered into with reference to the following facts: + +A. Customer provides, through its Information Systems Department, systems development and operations, data processing, telecommunications and other information technology services for itself, and on behalf of its customers. + +B. M&I, through its divisions, subsidiaries and Affiliates, is a provider of data processing, systems development and operations, corporate support and item processing, home banking, internet banking, retail delivery services, trust data processing, and other services. M&I desires to perform for Customer the outsourcing services described in this Agreement. + +C. In reliance on its own independent analysis, and after careful evaluation of M&I's proposal and other alternatives, Customer has selected M&I to provide the Services (as defined in Section 1.2) to Customer. This Agreement documents the terms and conditions under which Customer agrees to purchase and M&I agrees to provide the Services. + +1.2 Definitions. + + The following terms shall have the meaning ascribed to them in this Section 1.2: + +A. "Affiliate" shall mean, with respect to a party, any entity at any time Controlling, Controlled by or under common Control with, such party. + +B. "Bank" shall mean each of the subsidiary financial institutions of Customer. + +C. "Change in Control" shall mean any event or series of events by which (i) any person or entity or group of persons or entities shall acquire Control of another person or entity or (ii) in the case of a corporation, during any period of 12 consecutive months commencing before or after the date hereof, individuals who at the beginning of such 12-month period were directors of such corporation shall cease for any reason to constitute a majority of the board of directors of such corporation. + +D. "Commencement Date" shall mean the date on which Conversion for all Banks has been completed. The parties anticipate the Commencement Date to be November 16, 1998. + +E. "Contract Year" shall mean a period commencing on the first day of the month in which the Commencement Date occurs (and each anniversary thereof) and terminating on the last date of the month occurring one (1) year thereafter. + +F. "Control" shall mean the direct or indirect ownership of over 50% of the capital stock (or other ownership interest, if not a corporation) of any entity or the possession, directly or indirectly, of the power to direct the management and policies of such entity by ownership of voting securities, by contract or otherwise. "Controlling" shall mean having Control of any entity and "Controlled" shall mean being the subject of Control by another entity. + +G. "Conversion" shall mean (i) the migration of Customer's data processing and other information technology services to the M&I system; (ii) completion of upgrades of other software modifications as set forth in this Agreement; and (iii) completion of all interfaces set forth in this Agreement and full integration thereof such that Customer is able to receive the Services in accordance with the criteria set forth in the Conversion Plan (as defined in Section 4.2 below). + +H. "Conversion Date" for a particular Bank shall mean the date on which M&I has completed the Conversion for the processing of the Services. + +I. "Conversion Period" for a particular Bank shall mean that portion of the Term beginning on the Effective Date and ending on the Conversion Date. + +J. "Core Services" shall mean services provided by M&I's Deposit System, Loan System and Customer Information System. + +K. "Damages" shall mean all direct, actual and verifiable losses, liabilities, damages and claims and related costs and expenses (including reasonable attorneys' fees and court costs, costs of investigation, litigation, settlement, judgment, interest and penalties) but excluding any and all consequential, incidental, punitive and exemplary damages. + + L. "Effective Date" shall mean February 16, 1998. + +M. "Effective Date of Termination" shall mean the last day on which M&I provides the Services to Customer (excluding any Termination Assistance) following delivery of a notice of termination. + + + + + +N. "Estimated Remaining Value" shall mean the number of calendar months remaining between the Effective Date of Termination and the last day of the Term, multiplied by the greater of (a) the Monthly Base Fee (as defined in Section 8.1 below) plus any other minimum monthly fee set forth in the Fee Schedule; and (b) the average monthly Fees payable by Customer during the three-month period prior to the event giving rise to termination rights under this Agreement. + +O. "Expenses" shall mean any and all direct, pass through expenses incurred by M&I for any equipment, personnel, postage, supplies, materials, travel, lodging or services of any kind provided to or for Customer under this Agreement; provided that Customer shall not be charged travel and living expenses for M&I employees traveling to and from any site within Milwaukee, Waukesha, Ozaukee and Racine Counties in Wisconsin, in connection with providing any services or training to Customer. + + P. "Initial Services" shall mean those Services requested by Customer from M&I under this Agreement as of the Effective Date. + +Q. "Millennium Compliant" shall mean the compliance of the Services with the guidelines established by the Federal Financial Institutions Examination Council ("FFIEC") issued in May, 1997 and any subsequent guidelines issued by the FFIEC or the Federal Regulators (as defined in Section 21.8(A)) in connection with the identification and renovation of issues relating to the data processing of the year 2000. + +R. "Network" shall mean the data communication lines and related software, data circuits, cabling and equipment which M&I is to install, manage or operate in accordance with the Systems Integration Agreement. + +S. "Operations Center" shall mean the datacenter used by M&I o provide some of the Services under this Agreement. + +T. "Performance Standards" shall mean those service levels set forth in Article 9. + +U. "Proper Instructions" shall mean the manner in which Customer shall provide instructions to M&I, as set forth in Section 3.3 below. + +V. "Services" shall mean the services, functions and responsibilities described in this Agreement to be performed by M&I during the Term following each Conversion Date. + +W. "Taxes" shall mean any manufacturers, sales, use, gross receipts, excise, personal property or similar tax or duty assessed by any governmental or quasi-governmental authority upon or as a result of the execution or performance of any service pursuant to this Agreement or materials furnished with respect to this Agreement, except any income, franchise, privilege or like tax on or measured by M&I's net income, capital stock or net worth. + +X. "Term" shall mean the period commencing on the Effective Date and terminating on the eighth anniversary of the Commencement Date, unless the Agreement is extended in accordance with its provisions. + +Y. "User Manuals" shall mean the documentation provided by M&I to Customer which describes the features and functionalities of each of the Accounts DP Services (defined in Section 6.2 below), as modified and updated by the customer bulletins distributed by M&I from time to time. + +1.3 References. In this Agreement and the schedules and exhibits attached hereto, which are hereby incorporated and deemed a part of this Agreement, references and mention of the word "include" and "including" shall mean "includes, without limitation" and "including, without limitation", as applicable. + +1.4 Interpretation. In the event of a conflict between this Agreement and the terms of any exhibits and schedules attached hereto, the terms of the schedules and exhibits shall prevail and control the interpretation of the Agreement and the exhibits and schedules as a single document. + +2. TERM + +2.1 Initial Term. The initial term of this Agreement shall be the Term, unless extended or earlier terminated in accordance with this Agreement. + +2.2 Extensions. Unless this Agreement has been earlier terminated, at least eighteen (18) months prior to the expiration of the Term, M&I shall submit to Customer a written proposal for renewal of this Agreement. Customer will respond to such proposal within six (6) months following receipt and inform M&I in writing whether or not Customer desires to renew this Agreement. If M&I and Customer are unable to agree upon the terms for renewal of this Agreement at least six (6) months prior to the expiration of the Term, then Customer may, at its option, renew this Agreement for one (1) twelve month period at the then-current terms and conditions of this Agreement. Customer shall exercise its option, if at all, by delivering written notice to M&I at least five (5) months prior to expiration of the Term. + +3. APPOINTMENT + + 3.1 Performance by M&I Affiliates. Customer understands and agrees that Marshall & Ilsley Corporation is a bank holding company and that the actual performance of the Services may be made by the divisions, subsidiaries and/or Affiliates of Marshall & Ilsley Corporation. For purposes of this + + + + + +Agreement, performance of the Services by any division, subsidiary or Affiliate of Marshall & Ilsley Corporation shall be deemed performance by Marshall & Ilsley Corporation itself. 3.2 Third Party Services. The parties acknowledge that certain services and information necessary for the performance of the Services may be provided by third parties. M&I agrees that the performance and warranties contained in this Agreement shall apply to the Initial Services even if the same are to be performed by third parties. Except as specifically stated in this Section 3.2, M&I shall have no liability to Customer for information supplied by, or services performed by, third parties in conjunction with the Services. + +3.3 Proper Instructions. + +A. M&I shall be deemed to have received "Proper Instructions" upon receipt of written or oral instructions which M&I believes in good faith to be signed or given by any person(s) whose name(s) and signature(s) are listed on the most recent certificate delivered by Customer to M&I which lists those persons authorized to give orders, corrections and instructions in the name of and on behalf of Customer. + +B. Proper Instructions shall specify the action requested to be taken or omitted. Proper Instructions shall include instructions sent to M&I or its agent(s) by letter, memorandum, telegram, cable, telex, telecopy facsimile, video (CRT) terminal or other "on-line" system, or similar means of communication, or given orally over the telephone or in person by a person authorized by Customer pursuant to Section 3.4(A) to provide Proper Instructions. Proper Instructions shall include any file transmission received by M&I from Customer, or any agent of Customer who is thereof authorized in writing. + +4. CONVERSION + +4.1 Banking Applications. The parties agree to use their best efforts to perform the Conversion of all Banks to M&I's service bureau system on or before November 16, 1998. + +4.2 Development of Conversion Plan. M&I has, in consultation with Customer, begun developing a detailed, customized plan for the Conversion (the "Conversion Plan"). The Conversion Plan includes (i) a description of the tasks to be performed for the Conversion; (ii) allocation of responsibility for each of such tasks; and (iii) the schedule on which each task is to be performed. The Conversion project leaders for each party shall regularly communicate on the progress of the Conversion, the feasibility of the Conversion Dates specified in the Conversion Plan, and such other matters which may affect the smooth transition of the Services. Customer agrees to maintain an adequate staff of persons who are knowledgeable with the systems currently used by Customer. Customer further agrees to provide such services and to perform such obligations as are specified as Customer's responsibility in the Conversion Plan and as necessary for Customer to timely and adequately meet the scheduled dates set forth therein. Customer also agrees to cooperate fully with all reasonable requests of M&I made necessary to effect the Conversion in a timely and efficient manner. The Conversion Plan (as it exists on the date of this Agreement and as it may be amended from time to time by the mutual agreement of the parties) is attached hereto as Schedule 4.2. Customer agrees to pay M&I for the costs of the Conversion in accordance with the provisions of Section 8.1. + +4.3 Conversion Resources. M&I and Customer will provide a team of qualified experts to assist in the conversion effort. The team and their responsibilities are outlined below. + +A. M&I Relationship Manager. This individual shall be responsible for the overall implementation of all aspects of the Conversion and shall be the key liaison between Customer and M&I. + +B. Conversion Project Manager. M&I will provide a team to the Conversion effort. The team members and their responsibilities are defined as follows: + +Conversion Project Manager - Will have the responsibility and accountability for the Bank Conversion as assigned. The project manager will direct the effort of the Conversion team. He/she will be responsible for managing the goals and will provide assessment of project risks. + +Product Consultant - Will direct the efforts of the product team assigned by M&I. Areas the product consultant is responsible for include: data mapping and conversion, development efforts, education and training, and third party integration activities. + +Technical Consultant - The technical consultant assigned manages the network implementation, the operational set-up at M&I, coordination of the data from the existing processors, conversion programmer development activities, and connectivity to third party processors. + +Conversion Programmers and Representative - This team of conversion professionals will work with Customer on the mapping of the data to be converted, development of program specifications and the program development. This team will assist in building the processing parameters, and provide assistance to Customer through the week of Conversion. + + The Conversion will be supported by the development staff, the network planner and implementation team, the branch automation team, and other resources within M&I that has responsibility for components of the solution + + + + + +to be delivered to Customer. + +C. Customer. Customer shall provide a Conversion team to complement the efforts of the M&I Conversion team, and to provide some consistency and direction. The recommended team structure would be as follows. + +Conversion Project Coordinator - The coordinator would have responsibility for the overall Conversion process and the management of the Conversion team. He/she would work to ensure that the people are given proper direction, and that all Conversion events are executed to meet the established goals, and to maintain consistency among the project teams. + +Conversion Project Manager - A project manager would be assigned to complement the M&I conversion project manager. The project manager would have a team assembled to work on the Conversion. The Project manager would assist in ensuring that the tasks on the project plan are executed and that the project remains on schedule. He/she would work with the M&I conversion manager to do risk assessment and evaluate overall project status. + +Conversion Representatives - Core teams of Conversion representatives shall be assigned to assist in establishing consistency in approach and execution. These teams would work closely with the M&I Conversion team. Primary areas of responsibility include: procedure development and adherence to the procedure, assist in evaluating the readiness of the converting institution, assist in the data mapping and test report review exercise, and work with the M&I Conversion team during the Conversion week. + +It is recommended that dedicated conversion representatives be established to support the following applications: Deposits, Loans, General Ledger, CIS, and Branch Automation. + +Conversion Trainers - The core group of trainers will be dedicated to the Conversion and shall be responsible for development and execution of the training curriculum to Customer's staff. This group will be trained by M&I using the train-the-trainer approach. + +Bank Balancers - A core group of Customer's staff would be trained on balancing the M&I applications. This group, in conjunction with M&I, would assist in providing support during Conversion. + +4.4 Conversion Milestones. During the conversion process for each of the Banks, M&I will analyze Customer's products, the setup of bank control, analyze and verify Customer's test data, analyze Customer's training needs and perform workflow analysis. During the next phase, Customer shall verify the converted test data and identify any changes to the Conversion programs. A review ("Readiness Review") will then be performed as a dress rehearsal to ensure that M&I and Customer are prepared to Convert. M&I and Customer shall mutually agree to and sign off on the Readiness Review assuring the Bank is prepared to Convert to the Services. The stabilization phase takes place approximately three (3) to four (4) weeks prior to Conversion, during which time software programs, bank control and interface tables are completed and stabilized. Changes, if any, are managed and require approval of both M&I and Customer. Finally, the Conversion phase includes the Conversion weekend and Conversion week support. The M&I Project Team manages the Conversion weekend, working with Customer's existing processors to meet targeted deadlines. During the Conversion week, M&I will provide support on site for Customer. On a daily basis, M&I and Customer will have status update meetings to understand levels of self sufficiency and areas requiring attention. + +5. OUTSOURCING OF TRUST SERVICES INTENTIONALLY OMITTED + +6. BANKING APPLICATIONS + +6.1 Services to be Rendered. M&I agrees to provide Customer with the services set forth in this Article. + +6.2 Banking Application Processing. M&I agrees to provide Customer with the accounts data processing services ("Accounts DP Services") set forth in attached Schedule 6.2, in accordance with the User Manuals. Schedule 6.2 identifies certain Services which are included in the Monthly Base Fee (as described in Section 8.2 below) as well as those Services to be charged to Customer based on the actual usage of resources. + +6.3 Corporate Support Services. INTENTIONALLY OMITTED + +6.4 Item Processing Services. INTENTIONALLY OMITTED + +6.5 Automated Clearing House Services. The following terms and conditions shall apply to the provision of ACH Services: + +A. Definitions. The following terms, as referenced from the NACHA Rules, shall have the following meanings for the purposes of the Agreement: + +1. "Applicable Law" means the NACHA Rules, the rules of local ACH Associations, the rules of any and all ACH Operators, and other applicable law. + +2. "Automated Clearing House Operator" or "ACH Operator" means the central clearing facility, operated by a Federal Reserve Bank (FRB) or a private organization, which receives entries from the ODFI or the third party processor acting as an agent for the ODFI, and distributes entries to the appropriate RDFI or the third party processor acting as an agent for the RDFI, and performs the settlement functions for the affected financial + + + + + +institutions. + +3. "Originating Depository Financial Institution" or "ODFI" means the institution that receives the payment instructions from the Originators and forwards the entries to the ACH Operator. + +4. "Originator" means a person that has authorized an ODFI to transmit a credit or debit entry to the deposit account of an RDFI. + +5. "Receiving Depository Financial Institution" means the institution that receives ACH entries from the ACH Operator and posts them to the accounts of its depositors. + +B. General. Customer hereby authorizes M&I to initiate and receive automated clearing house ("ACH") debit entries, adjustments to debit entries and credit entries to Customer's account indicated below, to credit and/or debit the same to such account, and to provide various ACH services, as described below, to Customer pursuant to the terms and conditions specified herein. The ACH entries covered shall hereinafter be referred to as the "ACH Entries." Except as otherwise provided herein, the terms used in this Section 6.5 shall have the same meanings as ascribed to such terms in the Operating Rules of the National Automated Clearing House Association, as in effect from time to time (the "NACHA Rules"). + +C. ACH Services. + +1. M&I shall act as Customer's agent for initiating and transmitting ACH Entries to the appropriate ACH Operator. In addition, M&I shall act as Customer's agent for receiving ACH Entries from an ACH Operator. For all ACH Entries initiated by M&I pursuant to this Agreement, Customer, and not M&I, shall be the ODFI when M&I receives payment instructions directed to Customer's routing number from an Originator, or the RDFI when M&I receives ACH Entries directed to Customer's routing number from an ACH Operator. + +2. M&I shall transmit ACH Entries in accordance with the format requirements of the NACHA Rules to an ACH Operator using Customer's Routing Number. M&I shall receive ACH Entries on behalf of Customer that are transmitted to M&I by an ACH Operator. M&I shall provide reports to Customer, as described in the M&I ACH Manual (the "Service Manual"). If agreed to between Customer and M&I, M&I shall provide for the posting of ACH Entries to Customer deposit accounts. + +3. All warranties of an ODFI or RDFI prescribed under Applicable Law shall be in effect and applicable to Customer, and not M&I, with respect to all ACH Entries. + +4. M&I may provide additional ACH services as requested by Customer and agreed to by M&I in writing. + +D. M&I PC ACH Services. Customer may provide its business depositors with access to M&I's ACH Services as provided in M&I's PC ACH User Manual (the "PC ACH Service"). Customer shall be responsible for informing M&I prior to permitting a new depositor to begin using the PC ACH Service. Customer also shall inform M&I whether any credit limit shall apply to the ACH Entries of a depositor utilizing the PC ACH Service. + +E. Customer Depositor Inquiries; Erroneous or Rejected ACH Entries. + +1. Customer shall be responsible for handling all inquiries of its depositors regarding ACH Entries, including but not limited to inquiries regarding credits or debits to a depositor's account resulting from an ACH Entry. M&I agrees to reasonably assist Customer in responding to such inquiries by providing information to Customer concerning ACH Entries. + +2. As described in the Service Manual, M&I shall provide reports to Customer showing errors and rejections resulting from ACH Entries transmitted on behalf of Customer during a particular day. It shall be Customer's responsibility to research and correct such ACH Entries. + +F. Credit Limits. + +1. Customer may from time to time establish one or more credit limits applicable to ACH Entries involving a particular depositor or all depositors of Customer. Such credit limits may be established by written notice from Customer and shall be implemented by M&I as soon as reasonably practicable. + +2. In the event that an ACH Entry exceeds a credit limit established pursuant to this Section 6(F), M&I shall promptly give oral or written notice to Customer. Customer may either approve the ACH Entry as an exception to the credit limit, request that it be held over to the next day, or reject such ACH Entry provided, however, that any exception to the credit limit must be approved in writing by Customer. + +G. Service Manuals; PC ACH User Manual. + + 1. M&I shall provide Customer with copies of M&I's current Service Manual and PC ACH User Manual and any updates to such manuals. Customer agrees to comply with the requirements of such manuals. + +2. It shall be Customer's responsibility, and Customer is authorized, to forward a copy of the PC ACH User Manual, and any updates to the PC ACH User Manual, to Customer's depositors that utilize the PC ACH Service. + +H. Compliance With Applicable Law. + + + + + +1. Each party shall be bound by, and comply with, Applicable Law. Neither party shall have any responsibility for the other's compliance with Applicable Law, nor any liability to any person for the other's failure to comply with Applicable Law. Each party shall indemnify the other and hold it harmless from any and all liabilities, claims, costs, expenses and damages of any nature (including but not limited to reasonable attorney's fees, allocated costs of staff counsel, expenses of litigation and any fees and expenses incurred in enforcing this provision) arising out of or related to any dispute or legal action by any party alleging a violation of Applicable Law by the indemnifying party. + +2. Without limiting the generality of subsection 6.5(G)(1), prior to providing ACH origination services, Customer shall enter into an agreement with the Originator in compliance with the NACHA Rules, including but not limited to the requirement of the NACHA Rules that such agreement include a provision whereby the Originator agrees to be bound by the NACHA Rules. M&I shall have no responsibility for ensuring that such Originators have entered into such agreements. + +I. Limitation On Liability. + +1. M&I is acting solely in its capacity as agent for Customer in connection with the initiation, transmission and receipt of ACH Entries on behalf of Customer. As agent, M&I shall be under no obligation to provide funds to any party to settle for any ACH Entry received or initiated by M&I. Upon notification from Customer of the occurrence of an error or omission with respect to an ACH Entry, M&I shall promptly furnish corrected ACH Entry(ies) to an ACH Operator, unless the NACHA Rules prohibit the processing of the correct ACH Entry(ies). Notwithstanding any provision in the Agreement to the contrary, M&I's liability to Customer for claims arising out of the ACH Services performed by M&I pursuant to this Section 6.5 shall be limited to errors and omissions which are caused solely by M&I's gross negligence or willful misconduct and which cannot be remedied through the processing of appropriate corrected ACH Entry(ies). + +2. M&I shall make reasonable efforts to deliver ACH Entries to Customer or to an ACH Operator, as appropriate, prior to any applicable deadline for such delivery. M&I does not guarantee timely delivery. M&I shall have no liability to Customer as a result of any late delivery, unless such late delivery is (i) caused solely by the gross negligence or wilful misconduct of M&I and (ii) made more than 24 hours delayed from its scheduled deadline. + +6.6 Home Banking and Internet Services. INTENTIONALLY OMITTED + + 6.7 Retail Delivery Systems. M&I agrees to provide the licenses, products, interfaces and network management services associated with the PC Teller and Sales Partner/BankerInsight software, in accordance with the Retail Delivery Systems Agreement ("RDS Agreement") set forth in attached Exhibit A. Customer shall execute the RDS Agreement contemporaneously with execution of this Agreement. + + 6.8 Visa Check/MasterMoney Card Services. M&I agrees to provide the Visa Check card ("Bankcard Services") as further described on Schedule 6.2. Customer agrees to use M&I primarily for Customer's Bankcard Services data processing. + + A. Customer has membership in Visa U.S.A. Inc. Customer shall provide M&I with copies of its fully executed Visa U.S.A. Inc. membership agreement promptly after execution of this Agreement by Customer. + + B. Customer shall comply with the articles, bylaws, operating regulations, rules, procedures and policies of Visa U.S.A. Inc. and shall be solely responsible, as between Customer and M&I, for any claims, liabilities, lawsuits and expenses arising out of or caused by Customer's failure to comply with the same. Customer agrees to maintain an account at Tri City National Bank and Customer hereby authorizes M&I to charge any amounts due to M&I, for Bankcard Services, against any credits due to Customer to Customer's account whether or not such charges create overdrafts. + + 6.9 EFT Services. M&I agrees to provide the EFT services more particularly described on Schedule 6.2. + + A. Customer understands and agrees that M&I may terminate EFT services immediately in the event M&I's access to any shared electronic funds transfer system is terminated by the network provider. Customer further agrees that the software used to provide the EFT services may not be available for license by Customer. + +7. FACILITIES MANAGEMENT INTENTIONALLY OMITTED + +8. FEES + + 8.1 Fee Structure. Schedule 8.1 attached hereto (the "Fee Schedule") sets forth the costs and charges to be paid by Customer for the Services. These costs and charges are included in one or more of the following categories: + + (i) one-time fees associated with Conversion, software licenses, interfaces and consulting fees; + + (ii) a minimum monthly fee ("Monthly Base Fee") for certain bundled data processing Services, based on the volume of resource units used to provide such Services. Increases in actual volumes shall result in additional charges based on resource Units used, which charges are further + + + + + +described in the Fee Schedule; and + + (iii) an hourly or daily fee for programming, training and related Services. + + 8.2 Conversion. Customer agrees to pay M&I the fees relating to the Conversion on the terms and conditions set forth on the Fee Schedule ("Conversion Fees"). In addition to the Conversion Fees, Customer agrees to (i) reimburse M&I for all Expenses reasonably incurred in connection with the Conversion; (ii) for all Conversion charges of additional accounts as they are incurred or for the Conversion of products not identified in the Conversion Plan; (iii) for M&I personnel or any independent contractors who perform Conversion or related services which are identified as the responsibility of the Customer in the Conversion Plan; and (iv) for Conversion charges which may arise after the Conversion or with respect to accounts which are not currently Customer accounts which are later converted to the M&I system. + + 8.3 Pricing and Operational Assumptions. The Fee Schedule sets forth the operational and pricing assumptions made by M&I following completion of its preliminary due diligence of Customer's requirements and its evaluation of information provided by Customer. If, prior to the Conversion Date, the parties determine that one of more of the pricing or operational assumptions listed in the Fee Schedule is inaccurate or incomplete in any material respect, the parties will negotiate in good faith regarding an equitable adjustment to any materially and adversely impacted provisions of this Agreement. + + 8.4 Banking Applications Services. Following the Conversion of the Accounts DP Services, Customer agrees to pay to M&I the fees for the Accounts DP Services as set forth on the Fee Schedule. + + 8.5 Corporate Support Services. INTENTIONALLY OMITTED + + 8.6 Item Processing Services. INTENTIONALLY OMITTED + + 8.7 Management Services. INTENTIONALLY OMITTED + + 8.8 Visa Check/MasterMoney Card Services. Following commencement of the Bankcard Services, Customer agrees to pay to M&I the fees set forth on the Fee Schedule. Notwithstanding any provision to the contrary in the Agreement, or any general discount specified in the Fee Schedule, the fees for Bankcard Services shall not be subject to any discounts. In addition to the charges specified on the Fee Schedule, Customer shall be responsible for all interchange fees and all dues, fees and assessments established by and owed to Visa U.S.A. Inc. and/or MasterCard International for the processing of Customer's transactions. + + 8.9 EFT Services. Following the commencement of the EFT Services, Customer agrees to pay to M&I the fees set forth on the Fee Schedule subject to the discounts specified in the Fee Schedule. Such discount shall not apply to any EFT service which is not a part of M&I's 1997 standard published priced list. In addition to the charges specified on the Fee Schedule, Customer shall be responsible for all interchange and network provider fees for the processing of Customer's transactions. + + 8.10 Training and Education. + + A. M&I shall provide training in accordance with the training schedule to be developed pursuant to the Conversion Plan. The sessions shall be held at an M&I Datacenter location to be determined by M&I. Customer shall be responsible for all Expenses incurred by the participants in connection with such education and training. + + B. M&I will provide two (2) copies each of the User Manuals (other than for branch systems covered under the RDS Agreement) to Customer. When said manuals are updated M&I will provide two (2) copies each of the replacement or additional pages. Additional copies of the User Manuals may be purchased by Customer at M&I's then current published price list. + + 8.11 Excluded Costs. The fees set forth in the Fee Schedule do not include communication costs, telecommunication charges, printline charges and other output costs, Expenses, third party pass-thru charges, workshop fees, training fees and late fees or charges and Taxes. + + 8.12 Disputed Amounts. If Customer disputes any charge or amount on any invoice and such dispute cannot be resolved promptly through good faith discussions between the parties, Customer shall pay the amounts due under this Agreement less the disputed amount, and the parties shall diligently proceed to resolve such disputed amount. An amount will be considered disputed in good faith if (i) Customer delivers a written statement to M&I on or before the due date of the invoice, describing in detail the basis of the dispute and the amount being withheld by Customer, (ii) such written statement represents that the amount in dispute has been determined after due investigation of the facts and that such disputed amount has been determined in good faith, (iii) such dispute has been submitted by Customer for resolution to the proper party, and (iv) all other amounts due from Customer that are not in dispute have been paid in accordance with the terms of this Agreement. If agreement with respect to the disputed amount is not reached within thirty (30) days after the date on which payment was due, Customer shall pay the disputed amount into an interest-bearing independent escrow account for the benefit of the prevailing party, pending resolution of the dispute. + + 8.13 Terms of Payment. All "one-time" fees shall be paid to M&I as + + + + + +set forth in the Fee Schedule. All minimum monthly fees (including the Monthly Base Fee) are due in advance on the first day of the calendar month in which the Services are to be performed, prorated for any partial month. To effect payment of such minimum monthly fees, Customer hereby authorizes M&I to initiate debit entries from and, if necessary, initiate credit entries and adjustments to Customer's account at the depository institution designated in the ACH Authorization Agreement attached hereto as Exhibit B, which shall be executed by Customer contemporaneously with the execution of this Agreement. All other amounts due hereunder shall be invoiced by M&I and shall be payable within thirty (30) days of invoice, unless otherwise provided in the Fee Schedule. Customer shall also pay any collection fees and Damages incurred by M&I in collecting payment of the charges and any other amounts for which Customer is liable under the terms and conditions of this Agreement. + + 8.14 Modification of Terms and Pricing. + + A. Following any Event of Default by Customer and pending completion of the dispute resolution procedures set forth in Article 15, Customer agrees that all charges for Services shall be computed using M&I's then-current standard published prices, paid in advance, as determined by M&I. Upon Customer's cure of all such Event(s) of Default, the pricing terms shall revert to that which were in place prior to the Event(s) of Default. + + B. REDACTED + + C. Customer shall be entitled to receive discounts on certain Services as specifically set forth in the marked up price list made part of the Fee Schedule. + +9. PERFORMANCE STANDARDS + + 9.1 General. Except as otherwise specified in this Agreement, M&I agrees to perform the Services in accordance with the Performance Standards and, where there are no Performance Standards, in a commercially reasonable manner and with no other or higher degree of care. M&I's performance under this Agreement shall be excused to the extent any delays are caused by the occurrence of an event of force majeure. + + 9.2 Banking Applications. Subject to the nonoccurrence of an event of force majeure as provided in Section 21.1 of this Agreement and the performance of Customer's obligations essential to M&I's performance of its obligations, M&I agrees that the Accounts DP Services will be provided in accordance with the following standards (the "Performance Standards"). + + A. Batch Processing. M&I will initiate batch processing and have bank operations reports available for transmission to Customer or make the processed item and reports available, within five (5) hours on all (but two) processing days in a calendar month [fifteen (15) hours at year end] provided M&I receives all input data from Customer at the Operations Center by 1:00 a.m. (local time of the Operations Center). + + B. On-line Availability. M&I will ensure that its on-line computing facilities are available for the processing of Customer's on-line transactions at a minimum of ninety-seven point five percent (97.5%) of the time, as prescribed by Customer, measured over a calendar month at the point of departure from M&I's communications controller. The time prescribed by Customer for each banking day for which on-line computing facilities shall be made available for each product or service is set forth below. "Availability" for purposes of this paragraph shall be expressed as a percentage for each calendar month and shall be the number 100 less the ratio of (i) time period of unscheduled outages over (ii) total time prescribed less the time period of scheduled outages. + + Service Availability ATM1 Monday-Thursday 12:01 a.m. - 12:00 midnight Friday 12:01 a.m. - 12:00 midnight Saturday 12:01 a.m. - 12:00 midnight Sunday 12:01 a.m. - 2:00 a.m. 6:00 a.m. 12:00 midnight + +Cardbase Management System Monday - Thursday 7:00 a.m. - 12:00 midnight Friday 7:00 a.m. - 12:00 midnight Saturday 7:00 a.m. - 12:00 midnight Sunday 7:00 a.m. - 12:00 midnight + +CIS & Deposit System Monday - Thursday 7:00 a.m. - 12:00 midnight Friday 7:00 a.m. - 12:00 midnight Saturday 7:00 a.m. - 12:00 midnight Sunday 7:00 a.m. - 12:00 midnight + +Loan System Monday - Thursday 7:00 a.m. - 12:00 midnight Friday 7:00 a.m. - 12:00 midnight Saturday 7:00 a.m. - 12:00 midnight Sunday 7:00 a.m. - 12:00 midnight + +General Ledger Monday - Thursday 7:00 a.m. - 12:00 midnight Friday 7:00 a.m. - 12:00 midnight Saturday 7:00 a.m. - 12:00 midnight + + + + + +Sunday 7:00 a.m. - 12:00 midnight + +Information Desktop Monday - Thursday 7:00 a.m. - 12:00 midnight Friday 7:00 a.m. - 12:00 midnight Saturday 7:00 a.m. - 12:00 midnight Sunday 7:00 a.m. - 12:00 midnight + +Teller System Monday - Thursday 6:45 a.m. - 12:00 midnight Friday 6:45 a.m. - 12:00 midnight Saturday 6:45 a.m. - 12:00 midnight Sunday 6:45 a.m. - 12:00 midnight + +IRS Government Reporting System Monday - Thursday 7:00 a.m. - 12:00 midnight Friday 7:00 a.m. - 12:00 midnight Saturday 7:00 a.m. - 12:00 midnight Sunday 7:00 a.m. - 12:00 midnight + +Account Analysis Monday - Thursday 7:00 a.m. - 12:00 midnight Friday 7:00 a.m. - 12:00 midnight Saturday 7:00 a.m. - 12:00 midnight Sunday 7:00 a.m. - 12:00 midnight + +Safe Box Monday - Thursday 7:00 a.m. - 12:00 midnight Friday 7:00 a.m. - 12:00 midnight Saturday - Sunday 7:00 a.m. - 12:00 midnight + +VRU 1 Monday - Thursday 12:01 a.m. - 12:00 midnight Friday 12:01 a.m. - 12:00 midnight Saturday 12:01 a.m. - 12:00 midnight Sunday 12:01 a.m. - 2:00 a.m. 6:00 a.m. 12:00 midnight + +Bank Control Monday - Thursday 7:00 a.m. - 12:00 midnight Friday 7:00 a.m. - 12:00 midnight Saturday 7:00 a.m. - 12:00 midnight Sunday 7:00 a.m. - 12:00 midnight + +Account Reconciliation Monday - Thursday 7:00 a.m. - 6:45 p.m. Friday 7:00 a.m. - 9:30 p.m. Saturday 7:00 a.m. - 4:30 p.m. + +Deposit Teller1 Monday - Thursday 12:01 a.m. - 12:00 midnight Friday 12:01 a.m. - 12:00 midnight Saturday 12:01 a.m. - 12:00 midnight Sunday 12:01 a.m. - 2:00 a.m. 6:00 a.m. 12:00 midnight + +_____________________ + + 1 M&I's objective is to provide 24 x 7 hour availability for these systems. M&I does however need to perform regular technical maintenance (e.g., NCP maintenance), CPU IPLs, DASD installs, IHS gens, etc.). This type of maintenance is performed between 2:00 a.m. and 6:00 a.m. CST/CDT. These activities may result in system downtime during this window. + + C. Processing Time. M&I will process transactions in an average of 2.5 seconds for teller transactions (not to exceed six (6) seconds for five percent (5%) of all transactions per month) and in an average of three point five (3.5) seconds (not to exceed seven (7) seconds for five percent (5%) of all transactions per month) for bank operations CRT transactions as measured over a calendar month, from the time the transaction is sent by the Customer's controller or gateway to the time the processed data is returned to the Customer's controller or gateway. Should M&I not be able to perform in accordance with the Performance Standards because Customer failed to acquire network or equipment recommended by M&I, or such additional network or equipment as may be reasonably necessary based on the circumstances, M&I shall notify Customer in writing and Customer shall either acquire such network and/or equipment or accept the response time that is achieved. + + D. Service Level Credits. REDACTED + +10. MODIFICATION OR TERMINATION OF SERVICES + + 10.1 Modifications to Services. M&I may modify, amend, enhance, update, or provide an appropriate replacement for the software used to provide the Services, or any element of its systems at any time to: (i) improve the Services or (ii) facilitate the continued economic provision of the Services to Customer or M&I, provided that the functionality of the Services is not materially adversely affected. + + 10.2 Partial Termination by M&I. M&I may, at any time, withdraw any of the Services (other than the Core Services) upon providing ninety (90) days' prior written notice to Customer. M&I may also terminate any of the Services immediately upon any final regulatory, legislative, or judicial + + + + + +determination that providing such Services is inconsistent with applicable law or regulation or upon imposition by any such authority of restrictions or conditions which would detract from the economic or other benefits to M&I or Customer to any element of the Services. In the event a Service provided as part of the monthly Base Fee is terminated by M&I, the parties agree to negotiate in good faith an appropriate reduction in the monthly Base Fee. + + 10.3 Partial Termination by Customer. + + A. Customer acknowledges and agrees that the Monthly Base Fee pricing offered to Customer by M&I is based on certain services provided by M&I's Integrated Banking System. Customer agrees that, during the Term, Customer shall be required to obtain from M&I all of those Services which are included in the Monthly Base Fee, as set forth on Schedule 6.2. + +REDACTED + + 10.4 Development of Custom Software. M&I reserves the right to determine the programming (whether hardware or software) utilized by M&I with the equipment used in fulfilling its duties under this Agreement. All programs (including ideas and know-how and concepts) developed by M&I are and shall remain M&I's sole property. Any writing or work of authorship created by M&I in the course of performing the Services under this Agreement, even if paid for by Customer, shall be the property of M&I ("Developed Software"). M&I may make such Developed Software available to any of its other customers; provided, however, if Customer has paid for such Developed Software and M&I offers, as part of M&I's standard price list, a separate service resulting exclusively from such Developed Software, M&I will refund, or credit, to Customer a portion of any amounts paid for such Developed Software on terms and conditions agreed to by the parties prior to commencement of work on the Developed Software. + +11. TERMINATION + + 11.1 For Convenience. Customer may terminate this Agreement during the Term upon at least one (1) years' written notice to M&I, provided that Customer pays M&I an early termination fee ("Termination for Convenience Fee") in an amount equal to REDACTED of the Estimated Remaining Value. The Termination for Convenience Fee shall apply to any early termination of this Agreement other than pursuant to an Event of Default on the part of Customer or M&I or pursuant to Section 11.3 below. Fifty percent of the Termination for Convenience Fee shall be paid to M&I within thirty (30) days following the date of Customer's notice and the remaining 50% shall be paid to M&I within thirty (30) days prior to the Effective Date of Termination. In addition to the foregoing, Customer shall pay to M&I, any unamortized Conversion or other costs, reasonable Expenses in connection with the disposition of equipment, facilities and contracts related to M&I's performance of the Services on behalf of Customer. The Termination for Convenience Fee shall not be subject to the limitations set forth in Section 13.4. + + 11.2 For Cause. + + A. If M&I terminates this Agreement following an Event of Default on the part of Customer, or if Customer terminates this Agreement in accordance with Section 11.1 above without complying with the notification requirements set forth in Section 11.1, then Customer shall pay M&I a termination fee ("Termination for Cause Fee") in an amount equal to REDACTED of the Estimated Remaining Value, payable as set forth in Section 11.1 above. In addition to the foregoing, Customer shall pay to M&I, reasonable Expenses in connection with the disposition of equipment, facilities and contracts related to M&I's performance of the Services on behalf of Customer. The Termination for Cause Fee shall not be subject to the limitations set forth in Section 13.4. + + B. If Customer terminates this Agreement following an Event of Default on the part of M&I, Customer shall not be responsible for any termination fees or charges as a result thereof. + +REDACTED + + 11.4 Termination Assistance. Commencing six (6) months prior to the expiration of the Term of this Agreement, or upon any termination of this Agreement for any reason, M&I shall provide Customer, at Customer's expense, all necessary assistance to allow the Services to continue without interruption or adverse affect to Customer and to facilitate the orderly transition of Services to Customer or its designee ("Termination Assistance"). At the written request of Customer, given at least 100 days prior to expiration of the Term of the Agreement, M&I shall continue to provide Customer all Services at the rates set forth in this Agreement, for a maximum period of six (6) months. As part of the Termination Assistance, M&I shall assist Customer to develop a plan for the transition of all data processing services from M&I to Customer or its designee on a reasonable schedule developed by Customer. Prior to providing any Termination Assistance, M&I shall deliver to Customer a good faith estimate of all such Expenses and charges including, without limitation, charges for custom programming services. Customer understands and agrees that all Expenses and charges for Termination Assistance shall be computed in accordance with M&I's then-current rates for such products, materials and services. Nothing contained herein shall obligate Customer to receive Termination Assistance from M&I. + +12. EVENTS OF DEFAULT; REMEDIES + + + + + + 12.1 By M&I. It shall be an Event of Default on the part of M&I if: (i) M&I becomes insolvent, or a receiver of conservator shall be appointed with respect to M&I; or (ii) M&I shall fail to perform any of its obligations under this Agreement which have a material adverse effect on Customer, and such failure is not cured within 30 days after written notice from Customer; or (iii) M&I fails to meet any Performance Standard and such failure is not cured within ninety (90) days after written notice from Customer. + + 12.2 By Customer. It shall be an Event of Default on the part of the Customer if: (i) Customer becomes insolvent, or a receiver of conservator shall be appointed with respect to the Customer; or (ii) Customer shall fail to pay any sum due M&I within the prescribed time period, and such failure continues for ten days after written notice thereof from M&I; or (iii) Customer shall fail to perform any of its other obligations under this Agreement which have a material adverse effect on M&I, and such failure is not cured within 30 days after written notice from M&I. + + 12.3 Remedies. Following an Event of Default, the non-defaulting party shall have the right to and commence the dispute resolution procedures set forth in Article 15 or to terminate this Agreement and collect its Damages. + +13. DAMAGES + + 13.1 Direct Damages. Customer and M&I shall be liable to the other only for direct damages arising out of or relating to their respective performance or non-performance of obligations under this Agreement; provided, however, that the following shall be considered direct damages for the purposes of this Agreement: + + A. Costs of recreating or reloading any of Customer's information that is lost or damaged; + + B. Costs of implementing a work-around in respect of a failure to provide the Services; + + C. Costs of replacing lost or damaged equipment, software, and materials; + + D. Costs and expenses incurred by Customer to correct errors in software maintenance and enhancements provided as part of the Services; + + E. Costs and expenses incurred by Customer to procure the Services from an alternate source, to the extent in excess of M&I's charges under this Agreement; and + + F. Straight time, overtime, or related expenses incurred by Customer, including overhead allocations of Customer for Customer's employees, wages and salaries of additional employees, travel expenses, overtime expenses, telecommunication charges, and similar charges, due to failure of M&I to provide the Services or incurred in connection with subsections (A) through (E) above, to the extent that such straight time, overtime, or related expenses exceed what Customer would have paid to M&I if M&I were providing the Services, and limited to the amount that M&I would have paid to Customer under subsection (E) above if Customer chose to procure the Services from an alternate source. + + 13.2 No Consequential Damages. Neither Customer nor M&I shall be liable for, nor will the measure of any damages in any event include, any indirect, incidental, punitive, special or consequential damages or amounts for loss of income, profits or savings arising out of or relating to performance or non-performance under this Agreement. + + 13.3 Equitable Relief. Either party may seek equitable remedies, including specific performance and injunctive relief, for a breach of the other party's obligations under this Agreement. + + 13.4 Limitation of Liability. Notwithstanding any provision in this Agreement, M&I's total liability under this Agreement shall not exceed payments made to M&I by Customer under this Agreement during the three (3) months prior to the event. No lawsuit or other action may be brought by either party hereto, or on any claim or controversy based upon or arising in any way out of this Agreement be brought, after one (1) year from the date on which the cause of action arose; provided, however, the foregoing limitation shall not apply to the collection of any amounts due under this Agreement. + + 13.5 Liquidated Damages. Customer acknowledges that M&I shall suffer a material adverse impact on its business if this Agreement is terminated pursuant to Sections 11.1 or 11.2(A) and that the resulting damages may not be susceptible of precise determination. Customer acknowledges that the Termination for Convenience Fee and the Termination for Cause Fee are each a reasonable approximation of such damages and shall be deemed to be liquidated damages and not a penalty. + +14. INSURANCE AND INDEMNITY + + 14.1 Insurance. + + A. Throughout the Term of this Agreement, M&I shall maintain at all times at its own cost and expense: + + 1. Commercial General Liability Insurance covering its premises, including bodily injury, property damage, broad form contractual + + + + + +liability and independent contractors, with primary limits of not less than two million dollars ($2,000,000). + + 2. Fidelity Insurance covering employee dishonesty with respect to all aspects of the Services, in an amount not less than ten million dollars ($10,000,000). + + 3. Workers' Compensation Insurance as mandated or allowed by the state in which the Services are being performed, including at least five hundred thousand dollars ($500,000) coverage for Employer's Liability. + + 4. All Risk Property Insurance in an amount adequate to cover the cost of replacement of all equipment, improvements, and betterments at M&I locations in the event of loss or damage. + + B. All policies of such insurance shall be written by a carrier or carriers rated "A" or above by Best, shall contain a clause requiring the carrier to give Customer at least thirty (30) days' prior written notice of any material change or cancellation of coverage for any reason, and simultaneously with M&I's execution of this Agreement, and annually thereafter, at Customer's request, M&I shall deliver to Customer original Certificates of Insurance evidencing the coverage required by this Section. + + 14.2 Indemnity. + + A. By Customer. Customer shall indemnify M&I from, and defend M&I against, any liability or expenses arising out of or relating to (i) the inaccuracy or untruthfulness of any representation or warranty made by Customer to M&I, (ii) a violation of Federal, state, or other laws or regulations for the protection of persons or members of a protected class or category of persons by Customer or its employees or agents, (iii) sexual discrimination or harassment by Customer or its employees or agents, (iv) work-related injury or death caused by Customer or its employees or agents, (v) tangible personal or real property damage or financial or monetary loss incurred by M&I resulting from Customer's acts or omissions, or those of its employees or agents and (vi) those matters included in Section 6.6(B) above. Customer shall be responsible for any costs and Expenses incurred by M&I in connection with the enforcement of this Paragraph A. + + B. By M&I. M&I shall indemnify Customer from, and defend Customer against, any liability or expenses arising out of or relating to (i) any claim by a third party that the Services or M&I's software infringe upon any United States patent, copyright or trademark of a third party, (ii) any claim by a third party in respect of services or systems provided by M&I to a third party, (iii) the inaccuracy or untruthfulness of any representation or warranty made by M&I to Customer, (iv) a violation of Federal, state, or other laws or regulations for the protection of persons or members of a protected class or category of persons by M&I or its employees or agents (v) sexual discrimination or harassment by M&I, its employees, or agents, (vi) work-related injury or death caused by M&I, its employees, or agents, and (vii) tangible personal or real property damage or financial or monetary loss incurred by Customer resulting from M&I's acts or omissions or those of its employees or agents. M&I shall be responsible for any costs and Expenses incurred by Customer in connection with the enforcement of this Paragraph B. + + 14.3 Indemnification Procedures. If any third party makes a claim covered by this Section against an indemnitee with respect to which such indemnitee intends to seek indemnification under this Section, such indemnitee shall give notice of such claim to the indemnifying party, including a brief description of the amount and basis therefor, if known. Upon giving such notice, the indemnifying party shall be obligated to defend such indemnitee against such claim, and shall be entitled to assume control of the defense of the claim with counsel chosen by the indemnifying party, reasonably satisfactory to the indemnitee. Indemnitee shall cooperate fully with, and assist, the indemnifying party in its defense against such claim in all reasonable respects. The indemnifying party shall keep the indemnitee fully apprised at all times as to the status of the defense. Notwithstanding the foregoing, the indemnitee shall have the right to employ its own separate counsel in any such action, but the fees and expenses of such counsel shall be at the expense of such indemnitee; provided, however (1) if the parties agree that it is advantageous to the defense for the indemnitee to employ its own counsel or (2) in the reasonable judgment of the indemnitee, based upon an opinion of counsel which shall be provided to the indemnifying party, representation of both indemnifying party and the indemnitee would be inappropriate under applicable standards of professional conduct due to actual or potential conflicts of interest between them, then reasonable fees and expenses of the indemnitee's counsel shall be at the expense of the indemnifying party, provided that the indemnifying party approves such counsel. Neither the indemnifying party nor any indemnitee shall be liable for any settlement of action or claim effected without its consent. Notwithstanding the foregoing, the indemnitee shall retain, assume, or reassume sole control over all expenses relating to every aspect of the defense that it believes is not the subject of the indemnification provided for in this section. Until both (a) the indemnitee receives notice from indemnifying party that it will defend, and (b) the indemnifying party assumes such defense, the indemnitee may, at any time after ten (10) days from the date notice of claim is given to the indemnifying party by the indemnitee, resist or otherwise defend the claim or, after consultation with and consent of the indemnifying party, settle or otherwise compromise or pay the claim. The indemnifying party shall pay all costs of indemnity arising out of or relating to that defense and any such settlement, compromise, or payment. The indemnitee shall keep the indemnifying party fully apprised at all times as to the status of the defense. Following indemnification as + + + + + +provided in this Section, the indemnifying party shall be subrogated to all rights of the indemnitee with respect to the matters for which indemnification has been made. + +15. DISPUTE RESOLUTION + + 15.1 Representatives of Parties. All disputes arising under or in connection with this Agreement shall initially be referred to the Account Representatives (as defined in Section 18.1). If the Account Representatives are unable to resolve the dispute within five (5) business days after referral of the matter to them, the managers of the Account Representatives shall attempt to resolve the dispute. If, after five (5) days they are unable to resolve the dispute, senior executives of the parties shall attempt to resolve the dispute. If, after give (5) days they are unable to resolve the dispute, the parties shall submit the dispute to the chief executive officers of the parties for resolution. + + 15.2 Continuity of Performance. M&I acknowledges that the provision of the Services is critical to the business and operations of Customer. Accordingly, in the event of a dispute between Customer and M&I, during the pendency of the dispute resolution proceedings described in this Article 15, M&I shall continue to provide the Services and Customer shall continue to pay any undisputed amounts to M&I. + +16. REPRESENTATIONS AND WARRANTIES + + 16.1 By M&I. M&I represents and warrants that: + + A. Capability of Computer Systems and Software. M&I's computer systems (hardware and software) are capable of performing the Services in accordance with the provisions of this Agreement. + + B. User Manuals. The reports made available to Customer shall be in substantial conformity with the customer bulletins and the User Manuals, as amended from time to time, copies of which have been, or will be, provided to Customer. + + C. Rights. M&I has the right to provide the Services hereunder, using all computer software required for that purpose. + + D. Organization and Approvals. M&I is a validly organized corporate entity with valid authority to enter into this Agreement. This Agreement has been duly authorized by all necessary corporate action. + + E. Millennium Compliance. The Services, including any software interfaces and enhancements created by M&I, shall be Millennium Compliant on or before December 31, 1998. Any modification to make the Services Millennium Compliant shall be made by M&I at no additional charge. + + F. Disclaimer of Warranties. EXCEPT AS SPECIFICALLY SET FORTH IN THIS SECTION 16.1, M&I DISCLAIMS ALL OTHER WARRANTIES, WHETHER WRITTEN, ORAL, EXPRESSED OR IMPLIED INCLUDING, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. + + 16.2 By Customer. Customer represents and warrants that: + + A. Organization. It is a corporation validly existing and in good standing under the laws of the State of its incorporation; + + B. Authority. It has all the requisite corporate power and authority to execute, deliver and perform its obligations under this Agreement, the execution, delivery and performance of this Agreement has been duly authorized by Customer and this Agreement is enforceable in accordance with its terms against Customer; + + C. Approvals. No approval, authorization or consent of any governmental or regulatory authorities required to be obtained or made by Customer in order for Customer to enter into and perform its obligations under this Agreement; and + + D. Compliance. In connection with its obligations under this Agreement, Customer shall comply with all applicable federal, state and local laws, rules and regulations and shall obtain all applicable permits and licenses. + +17. CONFIDENTIALITY AND OWNERSHIP + + 17.1 Customer Data. Customer shall remain the sole and exclusive owner of all Customer Data and other Confidential Information (as hereinafter defined), regardless of whether such data is maintained on magnetic tape, magnetic disk, or any other storage or processing device. All such Customer Data and other Confidential Information shall, however, be subject to regulation and examination by the appropriate auditors and regulatory agencies to the same extent as if such information were on Customer's premises. "Customer Data" means any and all data and information of any kind or nature submitted to M&I by Customer, or received by M&I on behalf of Customer, in connection with the Services. + + 17.2 M&I Systems. Customer acknowledges that it has no rights in any software, systems, documentation, guidelines, procedures and similar related materials or any modifications thereof provided by M&I, except with respect to Customer's use of the same during the Term to process its data. 17.3 Confidential Information. "Confidential Information" of a party + + + + + +shall mean all confidential or proprietary information and documentation of such party, whether or not marked as such, including without limitation with respect to Customer, all Customer Data. Confidential Information shall not include: (i) information which is or becomes publicly available (other than by the person or entity having the obligation of confidentiality) without breach of this Agreement; (ii) information independently developed by the receiving party; (iii) information received from a third party not under a confidentiality obligation to the disclosing party; or (iv) information already in the possession of the receiving party without obligation of confidence at the time first disclosed by the disclosing party. The parties acknowledge and agree that the substance of the negotiations of this Agreement, and the terms of this Agreement are considered Confidential Information subject to the restrictions contained herein. Neither party shall use, copy, sell, transfer, publish, disclose, display, or otherwise make any of the other party's Confidential Information available to any third party without the prior written consent of the other. + + 17.4 Obligations of the Parties. M&I and Customer shall hold the Confidential Information of the other party in confidence and shall not disclose or use such Confidential Information other than for the purposes contemplated by this Agreement, and shall instruct their employees, agents, and contractors to use the same care and discretion with respect to the Confidential Information of the other party or of any third party utilized hereunder that M&I and Customer each require with respect to their own most confidential information, but in no event less than a reasonable standard of care, including but not limited to, the utilization of security devices or procedures designed to prevent unauthorized access to such materials. Each party shall instruct its employees, agents, and contractors of its confidentiality obligations hereunder and not to attempt to circumvent any such security procedures and devices. Each party's obligation under the preceding sentence may be satisfied by the use of its standard form of confidentiality agreement, if the same reasonably accomplishes the purposes here intended. All such Confidential Information shall be distributed only to persons having a need to know such information to perform their duties in conjunction with this Agreement. + + 17.5 Security. M&I shall be responsible for, and shall establish and maintain safeguards against, a disaster, loss or alteration of the Customer Data in the possession of M&I. Such safeguard shall be no less rigorous than that M&I uses to protect its own data of a similar nature. + +18. MANAGEMENT OF PROJECT + + 18.1 Account Representatives. Each party shall cause an individual to be assigned to the position of Account Representative to devote time and effort to management of the Services under this Agreement. Neither party shall reassign or replace its Account Representative during the first year of his or her assignment without the consent of the other party, except if such individual voluntarily resigns, is dismissed for cause, or is unable to work due to his or her death or disability. + + 18.2 Change Control Procedures. On or prior to the Conversion Date, M&I shall deliver to Customer the Change Control Procedures to be used by M&I to perform the Services. At a minimum, the Change Control Procedures shall provide for prior notice to Customer of changes which materially adversely effect the quality or timeliness of the Services, in which case such change shall be made only on a temporary basis. M&I agrees to schedule projects and changes so as to not unreasonably interrupt Customer's business operations. + + 18.3 Reporting and Meetings. Within sixty (60) days after the Effective Date, the parties shall mutually agree upon an appropriate set of periodic reports to be issued by M&I to Customer during the Conversion Period and during the remainder of the Term. Within sixty (60) days after the Effective Date, the parties will mutually agree on an appropriate set of periodic meetings to be held between the Account Representatives during the Conversion Period and the remainder of the Term. Meetings shall be held to review performance, changes, resource utilization and such other matter as appropriate. + + 18.4 Development Projects and Technical Support. Upon Customer's written request, M&I will develop and provide to Customer a good faith estimate of any additional charges which Customer may incur in connection with the operation of any new software, major modification or enhancements developed by M&I or the acquisition of third party software. Customer agrees that M&I will have the opportunity to bid on and be considered for all software development, maintenance and other technology projects related to the Services that Customer wishes to implement. + +19. REGULATORY COMPLIANCE + + A. M&I shall comply with, and M&I shall provide Customer with data and reports necessary for Customer to comply with, all federal laws applicable to the transactions or accounts processed by M&I. Customer shall have the right to notify M&I of any requirements or changes in state law which affect the provision of the Services. Thereafter, M&I shall schedule implementation of the changes prior to the deadline imposed by the regulatory or other governmental agency having jurisdiction for such change. M&I's obligation to meet the compliance deadline shall be contingent upon M&I receiving timely notice from Customer or any other service bureau customer of M&I so as to enable M&I to schedule and implement such change prior to the regulatory deadline. M&I shall implement such change at Customer's sole cost and expense (shared equitably among all of M&I's other service bureau customers who are affected by such change). + + + + + + B. Provided that such enactments or regulations do not prohibit M&I from performing the Services for Customer, M&I shall use commercially reasonable efforts to perform the Services regardless of changes in legislative enactments or regulatory requirements. If such changes prevent M&I from performing its obligations under this Agreement, M&I shall, when appropriate, make commercially reasonable efforts to develop and implement a suitable work around until such time as M&I can perform its obligations under this Agreement without such work around. + +20. DISASTER RECOVERY + + 20.1 Disaster Recovery Plan. M&I shall maintain throughout the term of the Agreement a Disaster Recovery Plan in compliance with all regulatory requirements, which Disaster Recovery Plan shall cover all the Services. For the purposes of this Agreement, "Disaster" means any unplanned interruption of operations which materially affects the ability of M&I to provide Services, or as otherwise provided in the Disaster Recovery Plan. Review and acceptance of any Disaster Recovery Plan as may be required by any such regulatory organizations shall be the responsibility of Customer, provided that M&I provides Customer and any such regulatory organizations such cooperation and assistance in conducting such reviews as Customer or such regulatory organizations may from time to time reasonably request. Any Disaster Recovery Plan shall provide, at a minimum, for M&I to provide alternate electrical power supplies for uninterrupted service. The Disaster Recovery Plan shall also designate one or more facilities (each a "Disaster Recovery Site") or separate computer resources to which M&I shall move the affected portion of any Services upon the declaration of a Disaster (as provided in the Disaster Recovery Plan) requiring such a relocation. Any Disaster Recovery Site must be appropriately equipped with data processing resources sufficient to provide all Services in compliance with regulatory requirements. Any Disaster Recovery Plan must also specify all procedures for the determination or declaration of a Disaster, which determination or declaration may not be unreasonably withheld or delayed by either party. A detailed Executive Summary of the Disaster Recovery Plan, as amended from time to time, shall be provided to Customer without charge. + + 20.2 Relocation. M&I shall relocate all affected Services to the Disaster Recovery Site as expeditiously as possible after declaration of a Disaster (as provided in the Disaster Recovery Plan), and shall coordinate with Customer all requisite telecommunications modifications necessary to achieve full connectivity to the Disaster Recovery Site in material compliance with all regulatory requirements. + + 20.3 Resumption of Services. The Disaster Recovery Plan shall provide that, in the event of a Disaster, M&I is able to resume all Services in accordance herewith utilizing the Disaster Recovery Site within a commercially reasonable period following the declaration of any Disaster as provided in the Disaster Recovery Plan. In the event M&I is unable to resume all Services to Customer within thirty (30) days following the declaration of any Disaster, Customer shall have the right to terminate this Agreement without penalty upon written notice to M&I delivered within forty-five (45) days after declaration of such Disaster. + + 20.4 Annual Test. M&I shall test its Disaster Recovery Plan by conducting one (1) test annually and shall provide Customer with a description of the test results in accordance with applicable laws and regulations. + +21. GENERAL TERMS AND CONDITIONS + + 21.1 Force Majeure. Notwithstanding any provision contained in this Agreement, neither party shall be liable to the other to the extent fulfillment or performance of any terms or provisions of this Agreement is delayed or prevented by revolution or other civil disorders; wars; acts of enemies; strikes; lack of available resources from persons other than parties to this Agreement; labor disputes; electrical equipment or availability failure; fires; floods; acts of God; federal, state or municipal action; statute; ordinance or regulation; or, without limiting the foregoing, any other causes not within its control, and which by the exercise of reasonable diligence it is unable to prevent, whether of the class of causes hereinbefore enumerated or not. This clause shall not apply to the payment of any sums due under this Agreement by either party to the other. + + 21.2 Transmission of Data. The responsibility and expense for transportation and transmission of, and the risk of loss for, data and media transmitted between M&I and Customer shall be borne by Customer. Data lost by M&I following processing, including loss of data transmission, shall either be restored by M&I from its back-up media or shall be reprocessed at no charge. + + 21.3 Equipment and Network. Customer shall obtain and maintain at its own expense its own data processing and communications equipment as may be necessary or appropriate to facilitate the proper use and receipt of the Services. Customer shall pay all installation, monthly, and other charges relating to the installation and use of communications lines in connection with the Services. M&I maintains and will continue to maintain a network control center with diagnostic capability to monitor communication line reliability and availability. M&I shall not be responsible for the continued availability or reliability of the communications lines used by Customer in accessing the Services. M&I agrees to perform reasonable diagnostic services and communicate to vendors any deficiencies of which M&I is, or becomes, aware. + + 21.4 Reliance on Data. M&I will process Items and data and perform + + + + + +those Services described in this Agreement on the basis of information furnished by Customer. M&I shall be entitled to rely upon any such data, information, or instructions as provided by Customer. If any error results from incorrect input supplied by Customer, Customer shall be responsible for discovering and reporting such error and supplying the data necessary to correct such error to M&I for processing at the earliest possible time. Customer will indemnify and hold M&I harmless from any cost, claim, damage, or liability (including attorneys' fees) whatsoever arising out of such data, information or instructions, or any inaccuracy or inadequacy therein. + + 21.5 Data Backup. In the event Customer does not receive Item Processing Services from M&I, Customer shall maintain adequate records for at least ten (10) business days including (i) microfilm images of items being transported to M&I or (ii) backup on magnetic tape or other electronic media where transactions are being transmitted to M&I, from which reconstruction of lost or damaged items or data can be made. Customer assumes all responsibility and liability for any loss or damage resulting from failure to maintain such records. + + 21.6 Balancing and Controls. Customer shall (a) on a daily basis, review all input and output, controls, reports, and documentation, to ensure the integrity of data processed by M&I; and (b) on a daily basis, check exception reports to verify that all file maintenance entries and nondollar transactions were correctly entered. Customer shall be responsible for initiating timely remedial action to correct any improperly processed data which these reviews disclose. + + 21.7 Use of Services. (A) Customer assumes exclusive responsibility for the consequences of any instructions Customer may give M&I, for Customer's failure to properly access the Services in the manner prescribed by M&I, and for Customer's failure to supply accurate input information; (B) Customer agrees that, except as otherwise permitted in this Agreement or in writing by M&I, Customer will use the Services only for its own internal business purposes to service its banking customers and clients and will not sell or otherwise provide, directly or indirectly, any of the Services or any portion thereof to any third party; and (C) Customer agrees and represents that (i) the performance of this Agreement by the Customer will not affect the safety or soundness of the Customer or any of its affiliates, and (ii) this Agreement, and the obligations evidenced hereby, will be properly reflected on the books and records of the Customer, and the Customer will provide evidence of the same to M&I upon request. + + 21.8 Regulatory Assurances. M&I and Customer acknowledge and agree that the performance of these Services will be subject to regulation and examination by Customer's regulatory agencies to the same extent as if such Services were being performed by Customer. Upon request, M&I agrees to provide any appropriate assurances to such agency and agrees to subject itself to any required examination or regulation. Customer agrees to reimburse M&I for reasonable costs actually incurred due to any such examination or regulation that is performed solely for the purpose of examining Services used by Customer. + + A. Notice Requirements. The Customer shall be responsible for complying with all regulatory notice provisions to any applicable governmental agency, which shall include providing timely and adequate notice to the Chief Examiner of the Federal Home Loan Bank Board, the Office of Thrift Supervision, the Office of the Comptroller of the Currency, The Federal Deposit Insurance Corporation, the Federal Reserve Board, or their successors, as applicable (collectively, the "Federal Regulators"), as of the effective date of Services under this Agreement, identifying those records to which this Agreement shall apply and the location at which such Services are to be performed. + + B. Examination of Records. The parties agree that the records maintained and produced under this Agreement shall, at all times, be available for examination and audit by governmental agencies having jurisdiction over the Customer's business, including any Federal Regulator. The Director of Examinations of any Federal Regulator or his or her designated representative shall have the right to ask for and to receive directly from M&I any reports, summaries, or information contained in or derived from data in the possession of M&I related to the Customer. M&I shall notify Customer as soon as reasonably possible of any formal request by an authorized governmental agency to examine Customer's records maintained by M&I, if M&I is permitted to make such a disclosure to Customer under applicable law or regulations. Customer agrees that M&I is authorized to provide all such described records when formally required to do so by a Federal Regulator. + + C. Audits. M&I shall cause a third party review of its data processing center, the Operations Center, and related internal controls to be conducted annually by its independent auditors. M&I shall provide without charge to Customer, upon written request, one copy of the audit report resulting from such review. M&I agrees to promptly implement any changes recommended as a result of such audit. + + 21.9 IRS Filing. Customer represents it has complied with all laws, regulations, procedures, and requirements in attempting to secure correct tax identification numbers (TINs) for Customer's payees and customers and agrees to attest to this compliance by an affidavit provided annually. Customer authorizes M&I to act as Customer's agent and sign on Customer's behalf the Affidavit required by the Internal Revenue Service on Form 4804, or any successor form. Exhibit C (Attorney-in-Fact Appointment) and Exhibit D (Affidavit) shall be executed by Customer contemporaneously with the execution of this Agreement. Customer acknowledges that M&I's execution of the Form 4804 Affidavit on Customer's behalf does not relieve Customer of responsibility to provide accurate TINs or liability for any + + + + + +penalties which may be assessed for failure to comply with TIN requirements. Customer agrees to hold M&I harmless from any liabilities, claims, expenses, penalties, or damages (including attorneys' fees) which may be assessed or incurred as a result of the failure to comply with TIN requirements. + + 21.10 Affiliates. All processing for Customer and Customer's subsidiaries and Affiliates which M&I does shall be included as part of the Services provided under this Agreement and shall be done in accordance with the terms and conditions of this Agreement. Customer agrees that it is responsible for assuring compliance with the Agreement by its affiliates and subsidiaries. Customer agrees to be responsible for the submission of its affiliates' data to M&I for processing and for the transmission to Customer's affiliates of such data processed by and received from M&I. Customer agrees to pay any and all fees owed under this Agreement for Services rendered to it and its subsidiaries and other Affiliates. + + 21.11 Future Acquisitions. Customer acknowledges that M&I has established the Fee Schedule and enters into this Agreement on the basis of M&I's understanding of the Customer's current need for Services and Customer's anticipated future need for Services as a result of internally generated to include additional branch locations which Customer may open and other operations Customer may commence. If the Customer expands it operations by acquiring Control of additional financial institutions or the Customer experiences a Change in Control (as hereinafter defined), the following provisions shall apply: + + A. Acquisition of Additional Financial Institutions. If Customer acquires Control after the date hereof of one or more bank holding companies, banks, savings and loan associations or other financial institutions that are not currently Affiliates, M&I agrees to provide Services for such new Affiliates and such Affiliates shall automatically be included in the definition of "Customer"; provided that (a) the Conversion of each new Affiliate must be scheduled at a mutually agreeable time (taking into account, among other things, the availability of M&I Conversion resources) and must be completed before M&I has any obligation to provide Services to such new Affiliate; (b) the Customer will be liable for any and all Expenses in connection with the Conversion of such new Affiliate and (c) Customer shall pay Conversion Fees in an amount to be mutually agreed upon with respect to each new Affiliate. + + B. Change in Control of Customer. If a Change in Control occurs with respect to Customer, M&I agrees to continue to provide Services under this Agreement; provided that (a) M&I's obligation to provide Services shall be limited to the entities comprising the Customer prior to such Change in Control and (b) M&I's obligation to provide Services shall be limited in any and all circumstances to the number of accounts and items processed in the 3-month period prior to such Change in Control occurring plus 25%. + +22. MISCELLANEOUS PROVISIONS + + 22.1 Governing Law. The validity, construction and interpretation of this Agreement and the rights and duties of the parties hereto shall be governed by the internal laws of the State of Wisconsin, excluding its principles of conflict of laws. + + 22.2 Venue and Jurisdiction. In the event of litigation to enforce the terms of this Agreement, the parties consent to venue in an exclusive jurisdiction of the courts of Milwaukee County, Wisconsin and the Federal District Court for the Eastern District of Wisconsin. The parties further consent to the jurisdiction of any federal or state court located within a district which encompasses assets of a party against which a judgment has been rendered, either through arbitration or litigation, for the enforcement of such judgment or award against such party or the assets of such party. + + 22.3 Entire Agreement; Amendments. This Agreement, together with the exhibits and schedules hereto, constitutes the entire agreement between M&I and the Customer with respect to the subject matter hereof. There are no restrictions, promises, warranties, covenants or undertakings other than those expressly set forth herein and therein. This Agreement supersedes all prior negotiations, agreements, and undertakings between the parties with respect to such matter. This Agreement, including the exhibits and schedules hereto, may be amended only by an instrument in writing executed by the parties or their permitted assignees. + + 22.4 Assignment. This Agreement may not be assigned by either party, by operation of law or otherwise, without the prior written consent of the other party, which consent shall not be unreasonably withheld, provided that (a) M&I's consent need not be obtained in connection with the assignment of this Agreement pursuant to a merger in which Customer is a party and as a result of which the surviving corporation becomes an Affiliate of another bank holding company, bank, savings and loan association or other financial institution having a capital and surplus of at least $100,000,000 so long as the provisions of Section 21.11 are complied with and (b) M&I may freely assign this Agreement (i) in connection with a merger, corporate reorganization or sale of all or substantially all of its assets, stock or securities, or (ii) to any entity which is a successor to the assets or the business of the M&I Data Services division of M&I. + + 22.5 Relationship of Parties. The performance by M&I of its duties and obligations under this Agreement shall be that of an independent contractor and nothing contained in this Agreement shall create or imply an agency's relationship between Customer and M&I, nor shall this Agreement be + + + + + +deemed to constitute a joint venture or partnership between Customer and M&I. + + 22.6 Notices. Except as otherwise specified in the Agreement, all notices, requests, approvals, consents and other communications required or permitted under this Agreement shall be in writing and shall be personally delivered or sent by (i) first class U.S. mail, registered or certified, return receipt requested, postage pre-paid; or (ii) U.S. express mail, or other, similar overnight courier service to the address specified below. Notices shall be deemed given on the day actually received by the party to whom the notice is addressed. + + In the case of Customer: Tri City National Bank 6400 South 27th Street Oak Creek, WI 53154 Attn: Mr. Ronald K. Puetz Executive Vice President + + In the case of M&I: M&I Data Services 4900 West Brown Deer Road Brown Deer WI 53223 Attn: Mr. Thomas R. Mezera Vice President Sales & Marketing + + 22.7 Headings. Headings in this Agreement are for reference purposes only and shall not effect the interpretation or meaning of this Agreement. + + 22.8 Counterparts. This Agreement may be executed simultaneously in any number of counterparts, each of which shall be deemed an original but all of which together constitute one and the same agreement. + + 22.9 Waiver. No delay or omission by either party to exercise any right or power it has under this Agreement shall impair or be construed as a waiver of such right or power. A waiver by any party of any breach or covenant shall not be construed to be a waiver of any succeeding breach or any other covenant. All waivers must be in writing and signed by the party waiving its rights. + + 22.10 Severability. If any provision of this Agreement is held by court or arbitrator of competent jurisdiction to be contrary to law, then the remaining provisions of this Agreement will remain in full force and effect. Articles 11, 13 and 17 shall survive the expiration or earlier termination of this Agreement for any reason. + + 22.11 Attorneys' Fees and Costs. If any legal action or arbitration proceeding has commenced in connection with the enforcement of this Agreement or any instrument or agreement required under this Agreement, the prevailing party shall be entitled to attorneys' fees actually incurred, costs and necessary disbursements incurred in connection with such action or proceeding, as determined by the court or arbitrator. + + 22.12 Financial Statements. M&I agrees to furnish to the Customer copies of the then-current annual report for the Marshall & Ilsley Corporation, within 45 days after such document is made publicly available. + + 22.13 Publicity. Neither party shall use the other parties' name or trademark or refer to the other party directly or indirectly in any media release, public announcement or public disclosure relating to this Agreement or its subject matter, in any promotional or marketing materials, lists or business presentations, without consent from the other party for each such use or release. Customer agrees that neither it, its directors, officers, employees or agents shall disclose this Agreement or any of the terms or provisions of this Agreement to any other party. + + 22.14 Solicitation. Neither party shall solicit the employees of the other party during the Term of this Agreement, for any reason. + + 22.15 No Third Party Beneficiaries. Each party intends that this Agreement shall not benefit, or create any right or cause of action in or on behalf of, any person or entity other than the Customer and M&I. + + 22.16 Construction. M&I and Customer each acknowledge that the limitations and exclusions contained in this Agreement have been the subject of active and complete negotiation between the parties and represent the parties' agreement based upon the level of risk to Customer and M&I associated with their respective obligations under this Agreement and the payments to be made to M&I and the charges to be incurred by M&I pursuant to this Agreement. The parties agree that the terms and conditions of this Agreement shall not be construed in favor of or against any party by reason of the extent to which any party or its professional advisors participated in the preparation of this document. + +23. SOURCE CODE + + 23.1 Escrow. M&I has entered into a Master Preferred Escrow Agreement ("Escrow Agreement") with Data Securities International, Inc. ("DSI"), Account no. 1309046-0001, pursuant to which M&I has deposited with DSI the source code for the IBS Licensed Software (the "IBS Software"). + + 23.2 Copy of Source Code. M&I agrees that Customer shall have the right to obtain a copy of the source code for the IBS Software pursuant to the terms and conditions of this Article 23. + + 23.3 Cost of Escrow. M&I shall be responsible for the cost of maintaining and updating the source code escrow including any fees to be + + + + + +paid to DSI. M&I shall have the right to change escrow agents and shall promptly notify Customer of such change during the Term. + + 23.4 Customer's Right to Obtain the Source Code. M&I hereby grants to Customer a non-exclusive, non-transferable license, through the end of the Term, to use the source code (including the right to make modifications thereto) on the terms and conditions set forth in this Article 23, upon payment of the then current license fees and the occurrence of the following events: + + A. M&I ceases to do business or refuses to provide the Services to Customer; or + + B. A voluntary or involuntary petition is commenced by or against M&I under any federal or state bankruptcy law, or a trustee in bankruptcy fails to timely assume this Agreement as an executory contract, or a substantial part of M&I's property or assets become subject to levy or seizure by any creditor and, in the case of an involuntary petition, the same is not dismissed within sixty (60) days after filing. + + 23.5 Use of Source Code. In the event Customer obtains a copy of the source code pursuant to Section 23.4 above, Customer (or its designee) shall use the source code during the term of the license granted herein solely for Customer's own internal processing and computing needs and to process the Customer Data, but shall not (1) distribute, sell, transfer, assign or sublicense the source code or any parts thereof to any third party, (2) use the source code in any manner to provide service bureau, time sharing or other computer services to third parties, or (3) use any portion of the source code to process data under any application or functionality other than those applications or functionalities which were being provided by M&I to Customer at the time Customer became entitled to receive a copy of the source code. + + IN WITNESS WHEREOF, the parties have caused this Agreement to be executed in their names as of the date first above written. + +MARSHALL & ILSLEY CORPORATION ("M&I") 4900 W. Brown Deer Road Brown Deer, WI 53223 + +By: Name: Patrick C. Foy Title: President, Outsourcing Business Group + +By: Name: Thomas R. Mezera Title: Vice President, Sales & Marketing + +TRI CITY NATIONAL BANK ("Customer") 6400 South 27th Street Oak Creek, WI 53154 + +By: Name: Ronald K. Puetz Title: Executive Vice President \ No newline at end of file diff --git a/full_contract_txt/TRIZETTOGROUPINC_08_18_1999-EX-10.17-TECHNICAL INFRASTRUCTURE MAINTENANCE AGREEMENT.txt b/full_contract_txt/TRIZETTOGROUPINC_08_18_1999-EX-10.17-TECHNICAL INFRASTRUCTURE MAINTENANCE AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..3e475ba2ca7d46c3accd2900392ce3bd9915b73a --- /dev/null +++ b/full_contract_txt/TRIZETTOGROUPINC_08_18_1999-EX-10.17-TECHNICAL INFRASTRUCTURE MAINTENANCE AGREEMENT.txt @@ -0,0 +1,161 @@ +1 EXHIBIT 10.17 + + [MEDICAL MANAGER LETTERHEAD] + + TECHNICAL INFRASTRUCTURE MAINTENANCE AGREEMENT + +Date: March 1, 1998 + +Contract No.: pr-4544 + + Between + +Client Name: MEDICAL MANAGER MIDWEST, INC. 53702 Generations Drive South Bend, IN 46635 Principle Contact: Tom Liddell + + And + +Customer Name: MTS, INC. 9931 Corporate Service Drive Louisville, KY 40223 Principle Contact: Gail Knopf + +ANNUAL FEE. [ ] Technical Support Hours Maximum: [*]; If Retainer $[*] support extends beyond [*] hours, Support will be charged at [*] per hour. + +[*]. + +MEDICAL MANAGER, MIDWEST, INC., hereinafter referred to as "MMMW", hereby agrees to provide service with respect to the technical infrastructure and MTS, INC., hereinafter referred to as "Customer", agrees to accept such service, subject to the following terms and conditions: + +THE ATTACHED TERMS AND CONDITIONS ARE PART OF THIS AGREEMENT. THIS AGREEMENT IS THE SOLE AND EXCLUSIVE AGREEMENT BETWEEN THE PARTIES RELATING TO SERVICES FOR THE ABOVE ITEMS. THE "Customer" HAS READ THIS AGREEMENT, UNDERSTANDS IT AND AGREES TO BE BOUND BY IT. + + TERMS AND CONDITIONS + +1. TECHNICAL INFRASTRUCTURE + + (a) Technical Infrastructure Maintenance Agreement covers applicable items that make up the underlying technical infrastructure that is required to run an application. This would include items such as hardware, operating system, network connections, etc. + + (b) Maintenance refers to the services involved in maintenance of equipment already purchased. + + (c) This Agreement shall be effective on the date of signed acceptance ("Effective Date") by MMMW. + + (d) Renewal agreement shall be effective on the "Effective Date" if it is signed and returned to MMMW by the "Effective Date." + + (e) Renewal agreement not signed and received by MMMW by the "Effective Date" will suspend all coverage of technical infrastructure support between the "Effective Date" and the actual date of receival of the renewal technical infrastructure maintenance agreement. Services provided between these two dates are billable. + +[*] Confidential portions omitted and filed separately with the Securities and Exchange Commission. + +2 2. TERM + + (a) MMMW provided Customer with an all inclusive warranty for a period of 12 months commencing on the date of installation to include system purchased by Customer from MMMW. Upon expiration of that 12 months, MMMW affords the Customer the opportunity of a continuation of support on an annual basis as follows: The Initial Term of this Technical Infrastructure Maintenance Agreement is twelve months, commencing on the Effective Date. The support agreement will be subject to prior inspection and acceptance of the hardware for service and to the Customer's payment of any charges for the inspection and/or the pre-agreement servicing and repair of the hardware, such estimates to be approved in advance by Customer. + + (b) MMMW shall make two options of hardware support available to Customer: + + TECHNICAL SUPPORT RETAINER is a Support Plan that allows the Customer + + + + + + to pay a Retainer that provides technical Related Support by qualified Support Analysts and Field Technicians. This Support Plan covers a 12 Month period, with a Maximum Cap of hours for that period. If the Cap of Hours is met before the end of the 12 Month period, Customer may choose to purchase an additional Retainer Support Plan at the same rates. This Support Plan is to include all necessary labor in a repair situation, but Customer is to incur the cost of components to replace broken or faulty equipment. Customer is to incur reasonable cost of travel time/expenses of MMMW personal. MMMW accepts the responsibility for payment of shipping and handling costs of the components. Customer is to incur the cost for any swap equipment. Fee for swap equipment is a flat-rate, one time fee as follows (not applicable from the central site): terminal $[*], color terminal $[*], [*] printer $[*], [*] printer $[*], personal computer $[*]. Cluiterports $[*], muxes $[*], multiport boards $[*], power supplies $[*], and [*] printers $[*] are subject to availability. All other equipment is subject to availability. Phone calls to the MMMW Support Department or Technical Department related to Technical Issues are also charged against your Technical Support Retainer in 15 minute increments. Example: If your office places a call to the MMMW Support Desk to receive help for a non-functioning printer, our Support Analyst will track and log the length of the call to deduct from the total of your available Technical Support Retainer. + + (c) If customer elects to not accept the Technical Support Retainer Contract, MMMW will make available to Customer support on their Technical Infrastructure in the following manner. MMMW will take Customer Technical related calls and process through MMMW Support Department. The Customers issue will then be queued and handled as soon as possible directly behind contracted Technical Supported clients. Customer is to be billed an Hourly rate of $[*] per hour on all Technical Related Issues, unless notified otherwise by MMMW. Customer is to incur the cost of swap equipment. Swap equipment is subject to availability. Customer is to incur the cost of travel time/expenses of MMMW Personal. + + (d) Customer, upon thirty days prior written notice, may cancel this Agreement at the end of the Initial Term and thereafter on each anniversary of the end of the Initial Term. MMMW may cancel this Agreement if the Customer does not remit payment according to the terms of MMMW's invoice. + + (e) The term of this Agreement consists of the Initial Term and any continuations. + + (f) Equipment under Warranty: A Manufacturer's Warranty accompanies most items, pleas refer to the Warranty for specific coverage. Copies of Warranty will be provided to Customer. Where applicable, Customer is to incur the cost for labor, travel time/expenses of MMMW personnel, swap equipment rental fees, and Phone Support from the MMMW Support Desk. + +3. SERVICE + + (a) MMMW will provide on-call service for the Technical Infrastructure during the term of this Agreement from 7:00am to 5:00pm CST, with a guaranteed response time of 3 hours with a goal of on site within 2 hours. Support to include 7X24 hour pager support for emergency services. After the customer has 30 locations, MMMW will locate technical personnel in the current geography. If a system is not able to be on-line after hours, on-site help will be made available. + + (b) The Customer shall provide a suitable environment for the Technical Infrastructure in accordance with MMMW specifications of non-humid environment, between the temperature range of 60 degrees F and 80 degrees F. + + (c) MMMW may elect to: repair a failing hardware with new or serviceable used parts; or exchange the hardware with a hardware that is new or used but in good working order, cleaned, lubricated, adjusted and tested. + + (d) Replaced parts and hardware become MMMW's property or at clients discretion. + +[*] Confidential portions omitted and filed separately with the Securities and Exchange Commission. 3 (e) All programs (excluding any MMMW supplied), data, storage media not requiring service, parts, options, attachments or alterations not provided by MMMW shall be removed before hardware is submitted to MMMW for service. The Customer agrees that if any such material is not removed, it will be deemed to have been discarded by the Customer and shall not be liability of MMMW. + + (f) The Customer is responsible to implement appropriate safeguards to protect and/or recreate the Customer's data, should it be destroyed through hardware malfunction or otherwise (see exclusions 4b). + + (g) On Call Service Selection: At the time this Agreement is agreed to by the Customer, the Customer will have notified MMMW of the location(s) of the hardware. MMMW shall not be required to furnish On Call + + + + + + service at any other location. The Customer shall notify MMMW of any change in location and MMMW may elect not to provide On Call service at the changed location. + + i) The Customer shall provide full, free, timely and safe access to the hardware for MMMW to provide the service. + + ii) MMMW may elect to exchange or repair the hardware requiring remedial service during MMMW's normal service hours at the hardware location. MMMW may use a MMMW selected independent contractor for exchange service. MMMW accepts responsibility for all work performed. + +4. EXCLUSIONS + + (a) There could be an increase in service time caused by accident, misuse, disaster, abuse, alterations, attachments, parts, options, or repairs not provided by MMMW, failure to provide a suitable operating environment, relocation of the equipment by non-Medical Manager, Midwest, Inc. personnel, or use of the hardware for purposes other than intended. + + (b) Service does not include repair or replacement of normally dispensable items such as diskettes, tapes, printer ribbons, cartridges, toners, etc. + +5. CHARGES + + (a) Charges will be invoiced and are payable within thirty (30) days after the date of the invoice. All charges are subject to change by MMMW for the forthcoming period capped at the CPI annually, on thirty days written notice. MMMW reserves the right to apply [*] finance charges. + + (b) If MMMW notifies the Customer of any increase in charges in accordance with paragraph (a) above, the Customer may cancel the forthcoming service by advising MMMW in writing within thirty (30) days after notification of the change. If MMMW is not so advised, it is conclusively presumed that the Customer has accepted such change. + + (c) The charges do not include applicable taxes. Any applicable taxes or amounts in lieu thereof and interest thereon paid or payable by MMMW, shall be borne by the Customer. + +6. NON-DISCLOSURE + + While this Agreement is in effect and thereafter, the Customer shall keep confidential and protect from disclosure to others any materials designated as containing information confidential or proprietary to MMMW and/or its licensor. On the ending or cancellation of this Agreement any proprietary information shall be destroyed or returned to MMMW. + +7. SAFETY CHANGES + + If MMMW determines that changes in safety are required for the Technical Infrastructure, MMMW has the right to install them and to select the method of installation. + +8. WARRANTY + + (a) MMMW warrants that the Technical Infrastructure remains in satisfactory operating condition provided it is: + + 1) continuously subject to MMMW's inspection and acceptance of the hardware for service; and + + 2) subject to normal use and conditions. MMMW's sole and exclusive obligation under this warranty shall be at its option to repair or exchange any hardware not in satisfactory operating condition. Said obligation shall be subject to the conditions and charges of Section 3, 4 and 5 and the prompt submission of (or notification to MMMW of the problem) the hardware to MMMW for service. + + (b) EXCEPT AS EXPRESSLY STATED IN THIS AGREEMENT, THERE ARE NO WARRANTIES, EXPRESS OR + +[*] Confidential portions omitted and filed separately with the Securities and Exchange Commission. + +4 IMPLIED, BY OPERATI0N OF LAW OR OTHERWISE. MMMW DISCLAIMS ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR PARTICULAR PURPOSE. + + (c) MMMW's warranties extend only to the Customer and may not be changed except by an instrument in writing as provided in Section 11(g). + + + + + +9. LIMITATION OF LIABILITY + + (a) MMMW's entire liability and the Customer's sole and exclusive remedy for claims related to or arising out of this Agreement for any cause and regardless of the form of action, whether in contract or tort, including negligence and strict liability, shall be the remedies set forth in Section 8, provided that if MMMW fails after repeated attempts to perform those remedies, MMMW's entire liability shall be the Customer's actual, direct damages such as would be provided in a court of law, not to exceed the charge for service for the item that caused the damages. + + (b) MMMW shall NOT be liable for INCIDENTAL or CONSEQUENTIAL DAMAGES, even if MMMW has been advised, knew or should have known of the possibility of such damages. + + (c) SOME STATES HAVE LAWS REQUIRING WARRANTY AND LIABILITY RIGHTS DIFFERENT FROM THOSE STATED IN THIS AGREEMENT. IN SUCH STATES, THE MINIMUM REQUIRED WARRANTY AND LIABILITY TERMS WILL APPLY. + +10. GENERAL PROVISIONS + + (a) MMMW is not responsible for failure to provide services due to cases beyond its reasonable control. + + (b) The Customer is solely responsible for the acquisition, use and results of any products or services not provided by MMMW, not withstanding any MMMW recommendation of or referral to such products or services. + + (c) The Customer shall not assign or transfer its rights or obligations under this Agreement except with MMMW's prior written consent; any prohibited assignment or transfer shall be void. + + (d) This Agreement shall be interpreted in accordance with the laws of the State of Indiana. + + (e) No action, regardless of form, related to, or arising out of this Agreement may be brought by either party more than two (2) years after the cause of action has arisen. + + (f) The customer represents that the Customer is either the owner of the hardware, or if not, that the Customer has the authority from the owner to include the hardware under this Agreement. Also, the Customer warrants that no liens, security interest or encumbrances upon the hardware exist, or will exist when the hardware is submitted to MMMW for services, or if any encumbrance does exist, that the holder thereof has consented to this agreement and the service. + + (g) This Agreement may not be changed, released or discharged except by a written agreement entered into by duly authorized representatives of the parties. + +MMMW and Customer accept and agree to the terms and conditions of this Agreement. + +MTS, INC. MEDICAL MANAGER, MIDWEST, INC. By: /s/ Gail Knopf By: /s/ Tom Liddell -------------------------------- -------------------------------- + +Date: March 4, 1998 Date: 3-5-98 ------------------------------ ------------------------------ \ No newline at end of file diff --git a/full_contract_txt/TRUENORTHENERGYCORP_02_08_2007-EX-10.1-DEVELOPMENT AGREEMENT.txt b/full_contract_txt/TRUENORTHENERGYCORP_02_08_2007-EX-10.1-DEVELOPMENT AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..13ddad4cb624585b96622623faff6cf9b71eaf3c --- /dev/null +++ b/full_contract_txt/TRUENORTHENERGYCORP_02_08_2007-EX-10.1-DEVELOPMENT AGREEMENT.txt @@ -0,0 +1,367 @@ +EXHIBIT 10.1 + +DEVELOPMENT AGREEMENT + +THIS DEVELOPMENT AGREEMENT ("Agreement"), made and entered into effective as of January 1, 2007 (the "Effective Date"), by and between BP AMERICA PRODUCTION COMPANY ("BP"), a Delaware corporation, with an office at 501 Westlake Park Boulevard, Houston, Texas 77079, and TRUE NORTH ENERGY CORP. ("Company"), a Nevada corporation, with an office at 1200 Smith Street, 16th Floor, Houston, Texas 77002 (individually, a "Party" and collectively, the "Parties"). + +WITNESSETH: + +WHEREAS, BP owns those certain oil, gas and mineral leases set forth in Exhibit "A" (the "Leases") covering the Contract Area; and + +WHEREAS, subject to the terms, provisions and conditions set forth below, Company will pay a disproportionate 11.67% of the Drilling Costs for the BP America Production Company - A. Major Heirs No. 1 well (the "Initial Well") to be drilled at the location shown on the plat attached as Exhibit "C", and in return BP will assign to Company an 8.75% interest in the Initial Well and the BP Interests, all as further provided in this Agreement. + +NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements hereinafter contained, to be kept and performed by the Parties, it is hereby agreed by and between the Parties as follows: + +ARTICLE I DEFINITIONS + +Each capitalized term in this Agreement has the meaning given to it in this Article. All defined terms include the singular and the plural. All references to: Articles and Sections refer to Articles and Sections in this Agreement, and Exhibits refer to Exhibits attached to this Agreement. + +1.1 "Additional Well" means a well, other than the Initial Well or a Substitute Well, drilled on the Contract Area after Company earns its proportionate share of the BP Interests in accordance with Section 4.1. + +1.2 "Affiliate" of a Party means (i) the parent company thereof or (ii) any Person directly or indirectly controlled by, controlling, or under common control with that party (for the purposes of this definition, ownership of fifty percent (50%) or more of the stock, equity or property of such Person, or having the right to appoint fifty percent (50%) or more of the members or owner representatives of such Person are examples of forms of control). + +1.3 "AFE" means an Authority for Expenditure prepared by a Party for the purpose of estimating the costs to be incurred in conducting an operation on a well subject to this Agreement and for providing such other information as may be specifically set forth elsewhere in this Agreement. + +1.4 "Agreement" has the meaning given to it in the preamble. + +1.5 "BP" has the meaning given to it in the preamble. + +1.6 "BP Interests" means the Leases to the extent they are contained within the Contract Area. + +1.7 "BP GROUP" means the following Persons, individually and collectively: BP and its Affiliates and the officers, directors, employees, agents, and representatives of all of those Persons. + +1.8 "Carried Interests" has the meaning given to it in Section 5.7. + + + + + + + +1.9 "Casing Point" means the time when (a) a well has been drilled to the Objective Zone, (b) all logs, tests, and evaluations have been completed and the results thereof have been furnished to the Parties, and (c) a recommendation has been made whether to run and set production casing and attempt to Complete the well as a producer or to abandon the well as a dry hole. + +1.10 "Company" has the meaning given to it in the preamble. + +1.11 "Complete" or "Completion" or "Completing" means a single operation intended to complete a well as a producer of oil and/or gas in one or more Zone(s), including, but not limited to, the setting of pipe/production lining and casing tie-back, installing tubing, wellhead and tree, perforating, plugging back, well stimulation, and testing. + +1.12 "Completion Costs" means the actual costs and expenses incurred in Completing a well subject to this Agreement. + +1.13 "Contract Area" means the geographic area (covering all depths) defined by the following Units, as they may be amended from time to time: (a) the 640-acre Moore Sams Field 18,100' TUSC RA SUW, created by the State of Louisiana Office of Conservation Order No. 1063-A- 1, effective November 29, 1979; (b) the 640-acre Moore Sams Field 18,100' TUSC RA SUCC, created by the State of Louisiana Office of Conservation Order No. 1063-A-2, effective February 20, 1980; and (c) the 640-acre Moore Sams Field 18,100' TUSC RA SUDD, created by the State of Louisiana Office of Conservation Order No. 1063-A-2, effective February 20, 1980. The "Contract Area", as it exists now, is outlined in red on the plat attached as Exhibit "B", but in the event of any conflict between the definition set forth in the preceding sentence and Exhibit "B", the definition set forth in the preceding sentence shall govern and control. + +1.14 "Data" means 3D seismic data, in whatever form (reels, paper, film, tape, magnetic or electronic, covering the Contract Area. + +1.15 "Data Owner" means a Third Party who owns the Data. + +1.16 "Drilling Costs" means the actual costs and expenses incurred in drilling a well subject to this Agreement beginning with the initiation of preliminary site preparation activities through and including logging, testing and evaluating the well prior to recommending whether to attempt a Completion. Drilling Costs shall include, but shall not be limited to, the costs and expenses associated with permitting, preparing the site, drilling to the Objective Zone, and evaluating any Zone(s) in such well to which a Completion may be attempted, as well as any unplanned or unforeseen events such as fire, explosion, or loss of well control. Drilling Costs shall also include brokerage, abstracting, and reasonable attorney fees related to the preparation of drilling title opinions for such well. Drilling Costs shall not include the cost to plug and abandon any well, including a dry hole, and shall not include any Completion Costs. 1.17 "Estimated Drilling Costs" has the meaning given to it in Section 2.1. + +1.18 "Effective Date" has the meaning given to it in the preamble. + +1.19 "Exhibits" has the meaning given to it in Section 16.6. + +1.20 "Force Majeure" has the meaning given to it in Section 9.1. + +1.21 "Initial Well" has the meaning given to it in the recitals. + +1.22 "Insurance Requirements" has the meaning given to it in Exhibit "G". + +1.23 "Leases" has the meaning given to it in the recitals. + + + + + + + +1.24 "Objective Zone", with respect to the Initial Well, means the base of the Tuscaloosa C-1 sand, being the stratigraphic equivalent of the base of the Tuscaloosa C-1 sand as seen at 18,484 feet (electrical log measurement) for the Amarex - Major Heirs No. 1 well, located in Section 47, Township 4 South, Range 10 East, Pointe Coupee Parish, Louisiana, or eighteen thousand, five hundred feet measured depth (18,500' MD), whichever occurs first in the Initial Well. The term "Objective Zone", with respect to any Substitute Well or Additional Well, means the deepest Zone to which the Substitute Well or Additional Well is proposed to be drilled as provided in the relevant AFE for such well. + +1.25 "Operating Agreement" has the meaning given to it in Section 5.5. + +1.26 "Partial Assignment" has the meaning given to it in Section 4.1. + +1.27 "Partial Interest" has the meaning given to it in Section 4.2. + +1.28 "Party" and "Parties" have the meaning given to them in the preamble. + +1.29 "Person" means any individual or entity, in the broadest sense possible, including but not limited to a corporation, partnership, limited partnership, limited liability company, trust, trustee, association or unincorporated organization. + +1.30 "Plants" has the meaning given to it in Section 5.6. + +1.31 "Properties" mean all of BP's right, title and interest (real or immovable, personal or movable, mixed, contractual or otherwise), as of the Effective Date, in, to and under or derived from the following: (a) the Leases, as well as the production of oil, gas or other hydrocarbon substances attributable thereto; + + (b) all unitization, communitization and pooling declarations, orders and agreements (including all units formed by voluntary agreement and those formed under the rules, regulations, orders or other official acts of any governmental entity or tribal authority having jurisdiction) to the extent they relate to the Initial Well and any Additional Well, or the production of oil, gas or other hydrocarbon substances attributable thereto; + + (c) all product sales contracts, processing contracts, gathering contracts, transportation contracts, easements, rights-of- way, servitudes, surface leases, subsurface leases, farm-in and farm-out contracts, areas of mutual interest, operating agreements, balancing contracts and other contracts, agreements and instruments to the extent they relate to the Initial Well and any Additional Well, or the production of oil, gas or other hydrocarbon and non-hydrocarbon substances attributable thereto; + + (d) all personal or movable property, improvements, fixtures and other appurtenances, to the extent situated upon and exclusively used, or situated upon and held exclusively for use in connection with ownership, operation, maintenance or repair of the interests described in the Leases, or production of oil, gas or other hydrocarbon and non-hydrocarbon substances attributable thereto, including all wells (whether producing, shut-in, injection, disposal, water supply or plugged and abandoned), gathering and processing systems, platforms, buildings, pipelines, compressors, meters, tanks, equipment, machinery, tools, utility lines, permits, licenses, imbalances and suspense funds; and (e) all partnerships (tax, state law or otherwise) affecting any of the items enumerated above. + + + + + + + +1.32 "Rig Release Date" has the meaning given to it in Section 3.2. + +1.33 "Seismic Use Agreements" means those agreements between BP and the Data Owner governing BP's rights and obligations concerning the Data. + +1.34 "Substitute Well" means a well proposed within one (1) year of the Rig Release Date and drilled by BP within the Contract Area, all in accordance with Section 3.2. + +1.35 "Third Party" means a Person other than a Party or an Affiliate of a Party. + +1.36 "Unit" means a compulsory unit established by the Commissioner of the Office of Conservation within the State of Louisiana Department of Natural Resources pursuant to Chapter 39 of Part XIX of Title 43 of the Louisiana Administrative Code, as same may be amended from time to time. + +1.37 "Well Information" has the meaning give to it in Section 2.2 + +1.38 "Zone" or "Zone(s)" means a stratum of earth containing or thought to contain a common accumulation of oil and/or gas separately producible from any other common accumulation of oil and/or gas. ARTICLE II DRILLING AND COMPLETING THE INITIAL WELL + +2.1 BP has commenced drilling operations for the Initial Well, and, except as provided elsewhere in this Agreement, BP shall continue drilling the Initial Well with due diligence to the Objective Zone and perform all logging and testing operations to which the Parties agree. Company shall pay 11.67% of the Drilling Costs of the Initial Well, regardless of whether the Initial Well is successfully drilled to the Objective Zone. BP has estimated that Drilling Costs will be approximately FOURTEEN MILLION, EIGHT HUNDRED SIXTY TWO THOUSAND DOLLARS ($14,862,000) (the "Estimated Drilling Costs") for the Initial Well. Company shall pay its share of Estimated Drilling Costs, being ONE MILLION, SEVEN HUNDRED THIRTY FOUR THOUSAND, THREE HUNDRED NINETY FIVE DOLLARS ($1,734,395), at execution of this Agreement via wire transfer according to the wiring instructions set forth in Exhibit "I", but Company will pay its share of actual Drilling Costs in accordance with this Article II and Section 5.4. + +2.2 When and if Casing Point is reached in the Initial Well, BP shall give written notice to Company of such occurrence, and such notice shall state whether BP proposes to attempt to Complete the Initial Well as a producer, whether in the Objective Zone or in a shallower Zone, or to abandon the Initial Well as a dry hole. The notice shall be accompanied by all well information and data set forth in Exhibit "D" (the "Well Information"), unless such information has been previously furnished to Company. + + (A) If BP reaches Casing Point and proposes to Complete the Initial Well as a producer, whether in the Objective Zone or in a shallower Zone, such notice shall also include a completion AFE. The completion AFE shall include, at a minimum, an estimate of Completion Costs for the Initial Well. Company shall have forty-eight (48) hours (exclusive of Saturday, Sunday and holidays) from receipt of the notice to elect, by written notice, whether it will participate in accordance with Section 2.3. BP shall not Complete the Initial Well until Company has notified BP in writing whether or not it will participate or until forty-eight (48) hours (exclusive of Saturday, Sunday and holidays) have elapsed since Company's receipt of BP's notice. Failure to respond within the time period allowed shall be deemed to be an election not to participate in the Completion of the Initial Well. + + (B) If BP reaches Casing Point and proposes to abandon the Initial Well as a dry hole, (i) BP shall plug and abandon the Initial Well in accordance with Section 2.6, and (ii) Company shall have no right or option to takeover the Initial Well. + + + + + + + +2.3 If BP proposes to Complete the Initial Well and Company timely elects to participate in such Completion attempt in accordance with Section 2.2(A), Company shall pay 8.75% of the Completion Costs associated with the Initial Well and 8.75% of the cost of any newly acquired surface equipment associated with the Initial Well beyond the wellhead connections (including but not limited to stock tanks, separators, treaters, pumping equipment, piping, and metering devices). 2.4 If BP proposes to Complete the Initial Well and Company elects not to participate in such Completion attempt, or is deemed not to participate, BP may nonetheless continue with such operation and carry Company's proportionate part of Completion Costs. If the Completion attempt is ultimately not successful, BP shall abandon the Initial Well in accordance with Section 2.6 or propose to Complete the Initial Well in another Zone under the provisions of Section 2.2 (and Company shall be given another election to participate in such newly proposed Completion). If the Completion attempt results in the production of oil and/or gas in paying quantities, the Initial Well shall be operated by BP at the expense and for the account of BP and other parties who agreed to participate in the Completion attempt. By electing not to participate in any Completion attempt, or being deemed not to participate in any Completion attempt, Company shall be deemed to have relinquished to BP, and BP shall own and be entitled to receive, all of Company's interest in the Initial Well and share of production therefrom until the proceeds of the sale of such share, calculated at the well, or market value thereof if such share is not sold (after deducting applicable ad valorem, production, severance, windfall profits, and excise taxes, royalty, overriding royalty and other interests payable out of or measured by the production from the Initial Well accruing with respect to such interest until it reverts), shall equal the total of the following: + + (A) twenty six and one-quarter percent (26.25%) of the Completion Costs associated with the Initial Well and twenty six and one-quarter percent (26.25%) of the cost of any newly acquired surface equipment beyond the wellhead connections (including but not limited to stock tanks, separators, treaters, pumping equipment, piping and metering devices) (i.e., 300% non-consent penalty on a non-promoted basis); and + + (B) eight and three quarters percent (8.75%) of the cost of operation of the Initial Well commencing with first production and continuing until Company's interest shall revert to it in accordance with this Section 2.4 (i.e., 100% non-consent penalty on a non-promoted basis). + +2.5 Company shall bear its proportionate part, being eight and three quarters percent (8.75%), of any severance, production and gathering taxes and any other taxes imposed or measured by the volume or value of production from the Initial Well, including, but only by way of illustration, excise taxes and windfall profit taxes, whether enacted by federal, state or local authority. + +2.6 The Initial Well shall be plugged and abandoned in accordance with applicable regulations and at the cost, risk and expense of the parties who participated in the cost of drilling the Initial Well. Company's proportionate share of the cost, risk and expense to plug and abandon the Initial Well shall be eight and three quarters percent (8.75%). ARTICLE III SUBSTITUTE WELLS + +3.1 If, prior to reaching Casing Point in the Initial Well, BP should encounter geological or mechanical conditions which render further operations impracticable or economically infeasible, in the sole reasonable opinion of BP, BP shall (i) give written notice of such occurrence to Company, and (ii) such notice shall state whether BP proposes to attempt to Complete the Initial Well in a shallower Zone or to abandon the Initial Well as a dry hole. + + + + + + + + (A) If BP proposes to Complete the Initial Well without reaching the Objective Zone, such notice shall also include a completion AFE. The completion AFE shall include, at a minimum, an estimate of Completion Costs for the Initial Well. Company shall have forty-eight (48) hours (exclusive of Saturday, Sunday and holidays) from receipt of the notice to elect, by written notice, whether it will participate in accordance with Section 2.3. BP shall not Complete the Initial Well until Company has notified BP in writing whether or not it will participate or until forty-eight (48) hours (exclusive of Saturday, Sunday and holidays) have elapsed since Company's receipt of BP's notice. Failure to respond within the time period allowed shall be deemed to be an election not to participate in the Completion of the Initial Well. If BP proposes to Complete the Initial Well and Company elects not to participate in such Completion attempt, or is deemed not to participate, BP may nonetheless continue with such operation and carry Company's proportionate part of Completion Costs in accordance with Section 2.4. + + (B) If BP proposes to abandon the Initial Well as a dry hole, (i) BP shall plug and abandon the Initial Well in accordance with Section 2.6, and (ii) Company shall have no right or option to takeover the Initial Well. + +3.2 If BP does not drill the Initial Well to the Objective Zone, Company shall have the right, but not the obligation, for a period of one (1) year from the date the drilling rig used to drill the Initial Well is removed from the well site location for the Initial Well (the "Rig Release Date"), to participate in the drilling of a Substitute Well. BP shall have no obligation to drill a Substitute Well, and Company shall have no right to propose a Substitute Well. If and when BP elects to drill a Substitute Well, BP shall provide Company with an AFE for the Substitute Well. The AFE for the Substitute Well shall include, at a minimum, the surface and bottomhole location of the Substitute Well, the Objective Zone, and the estimated costs for the Substitute Well as a dry hole and as a producer. Company shall have thirty (30) days from receipt of such written notice to elect whether it shall participate in such Substitute Well. Failure to respond within the time period allowed shall be deemed to be an election not to participate in the Substitute Well. + +3.3 If BP proposes to drill a Substitute Well and Company timely elects to participate in such Substitute Well in accordance with Section 3.2, such Substitute Well shall be treated for all purposes herein as the Initial Well (including, but not limited to, Company's obligation to pay 11.67% of the Drilling Costs for such Substitute Well), except that the Objective Zone for such Substitute Well shall be governed by the AFE for such Substitute Well. + +3.4 If Company elects not to participate in a Substitute Well, or is deemed not to participate in a Substitute Well, this Agreement shall terminate except as provided in Sections 6.2, 6.3, 6.4, and 6.5. + +ARTICLE IV EARNING RIGHTS + +4.1 When and if the Initial Well is drilled to the Objective Zone and successfully Completed as a well capable of producing oil and/or gas in paying quantities, BP shall assign to Company, by partial assignment in the form attached hereto as Exhibit "E"(the "Partial Assignment"), an eight and three quarters percent (8.75%) working interest in the Initial Well and an eight and three quarters percent (8.75%) interest in the BP Interests. 4.2 If the Initial Well is not drilled to the Objective Zone, for any reason, but the Initial Well is successfully Completed as a well capable of producing oil and/or gas in paying quantities, BP shall assign to Company, by partial assignment in the form of the Partial Assignment, an eight and three quarters percent (8.75%) working interest in the Initial Well and an undivided eight and three quarters percent (8.75%) interest in the BP Interests, but limited as to the geographic boundaries of the Unit in which the Initial Well is located and further limited as to those depths between the surface and the stratigraphic equivalent of the deepest Zone penetrated in the Initial Well (the "Partial Interest"). BP and Company shall conduct operations with respect to such Initial Well as if they have entered into the Operating Agreement until such well or a Substitute Well is drilled to and successfully Completed in the Objective Zone or until this Agreement is terminated; provided, however, if this Agreement is to be terminated without Company earning its proportionate share of the BP Interests in accordance with Section 4.1, then the Parties shall enter into an operating agreement in the form of the Operating Agreement except that the contract area of such operating agreement shall be limited to the Partial Interest. + + + + + + + +ARTICLE V JOINT OPERATIONS + +5.1 BP does not own but has a limited non-exclusive right to use the Data in accordance with the Seismic Use Agreements. Under the Seismic Use Agreements, BP may not sell, assign, copy, transfer, display, exhibit or in any way reveal the Data, except as authorized by and in compliance with the provisions of the Seismic Use Agreements. Therefore, Company's access to the Data shall be limited, and may be prohibited all together upon execution of this Agreement, unless Company obtains the consent or otherwise enters into a seismic license or seismic use agreement with the Data Owner. BP does not represent or warrant in any way, and expressly disclaims any representations or warranties, of any kind, express, implied or otherwise, that it owns the Data or otherwise has the right to provide all or any portion of the Data to Company. + +5.2 BP shall deliver to Company the Well Information derived from or attributable to the Initial Well and any Substitute Well and Additional Well, if such Well Information is acquired, obtained, or performed by BP. + +5.3 The Initial Well and each Substitute Well and Additional Well shall be under the exclusive control of BP and the operation thereof shall be conducted in a prudent and workmanlike manner. BP shall conduct all its activities under this Agreement as a reasonable prudent operator, in a good and workmanlike manner, with due diligence and dispatch, in accordance with good oilfield practice, and in compliance with applicable law and regulation, but in no event shall BP have any liability to Company for losses sustained or liabilities or obligations incurred except such as may result from BP's gross negligence or willful misconduct. + +5.4 Except as otherwise specifically provided in this Agreement, BP shall promptly pay and discharge expenses incurred in drilling the Initial Well and each Substitute Well and Additional Well pursuant to this Agreement and shall charge Company with its proportionate shares upon the expense basis provided in Exhibit "C" to the Operating Agreement, whether or not such Operating Agreement has been executed by the Parties. BP shall keep an accurate record, in accordance with generally accepted accounting principles, showing expenses incurred and charges and credits made and received. + +5.5 When and if the Initial Well is drilled to the Objective Zone and successfully Completed as a well capable of producing oil and/or gas in paying quantities, BP and Company shall enter into an operating agreement attached hereto as Exhibit "F" (the "Operating Agreement") covering the Contract Area. The Operating Agreement shall be executed contemporaneously with the Partial Assignment but shall be effective on October 1, 2006. The Operating Agreement shall apply to all Additional Wells. In the event of any conflict between the Operating Agreement and this Agreement, this Agreement shall govern. + +5.6 Unless Company elects by thirty (30) days' prior written notice to BP either to take in kind or to separately dispose of its share of oil, gas and other hydrocarbons, BP shall in good faith, to the extent it can do so, cause Company's share of production from the Initial Well and each Substitute Well and Additional Wells to be marketed and sold to either a Third Party or to an Affiliate of BP in a commercially reasonable manner, which terms shall not be less than on the same terms and conditions as BP's share of production from such wells are sold. It is recognized by the Parties that BP, or its predecessor, has provided at its cost or made arrangements with Third Parties to provide certain facilities beyond the wellhead (the "Plants") needed for producing, storing, separating, gathering, treating, processing and delivering production from the Initial Well and each Substitute Well and Additional Well. It is agreed that BP will continue to make the Plants (as they or any contractual arrangements related thereto may be modified, changed or upgraded) proportionately available to handle BP, Company and Third Party production from the Contract Area. It is understood that a proportionate share of the cost of maintaining and operating the Plants, including depreciation or rental in lieu of depreciation and actual Third Party costs, whether on a cash fee basis or on a retained volume basis, will be allocated to the Parties on a "throughput" basis (being that portion of such costs relating to the production volumes from the Initial Well or, if drilled, any Substitute Well or Additional Well, as each may bear to the total production volumes handled by the Plants, including any Third Party or BP volumes not produced from the Initial Well or, if drilled, any Substitute Well or Additional Well). Nothing herein shall be construed to impart, transfer or convey any ownership interest in the Plants to Company. + + + + + + + +5.7 If any lands within the Contract Area (other than those lands covered by the Leases) contain an interest which is unleased or leased to a Third Party and such interest must be carried in order to conduct operations consistent with this Agreement (such Third Party interest being a "Carried Interest"), Company shall bear eight and three quarters percent (8.75%) of the Carried Interests in order to conduct such operations. + +5.8 At all times while this Agreement is in effect, Company shall carry insurance of the types and in the minimum amounts set forth in Exhibit "G". All such insurance set forth in Exhibit "G" shall specifically name BP as an additional insured or provide that the insurer shall waive all rights of subrogation against BP. + +ARTICLE VI TERM AND TERMINATION + +6.1 Except as provided in Sections 6.2, 6.3, 6.4, and 6.5, this Agreement shall terminate one (1) year from the Rig Release Date, if such has not been terminated sooner pursuant to the provisions hereof. + +6.2 Notwithstanding Section 6.1, if the Initial Well is drilled to the Objective Zone and successfully Completed as a well capable of producing oil and/or gas in paying quantities, this Agreement shall continue for so long as the Operating Agreement remains in full force and effect. + +6.3 Notwithstanding Section 6.1, this Agreement shall remain in full force and effect for so long as Company participates in the drilling of a Substitute Well in accordance with Section 3.2. + +6.4 Notwithstanding anything in this Agreement to the contrary, if Company earns a Partial Interest in the Initial Well and the BP Interests pursuant to Section 4.2, the Parties shall first enter into an operating agreement in the form of the Operating Agreement, except that the contract area of such operating agreement shall be limited to the Partial Interest, prior to termination of this Agreement. + +6.5 Notwithstanding anything in this Agreement to the contrary, the expiration or termination of this Agreement shall not release any of the Parties from any obligation or liability which accrued prior to such expiration or termination (including the costs to plug and abandon the Initial Well and any Substitute Wells and Additional Wells) or which, by the terms hereof, is intended to survive such expiration or termination, including but not limited to Articles I, X, XI, XII, XIII, XIV, XV, and XVI and Sections 5.1 and 5.6, which terms shall survive indefinitely. + + + + + + + +ARTICLE VII ASSIGNMENT; PREFERENTIAL RIGHTS + +7.1 The rights and obligations created by this Agreement may not be assigned by Company, in whole or in part, without first obtaining BP's written consent under this Agreement, such consent not to be unreasonably withheld. If BP consents to an assignment by Company of all or part of its rights and obligations under this Agreement, it is nevertheless understood and agreed that any such consent shall not relieve Company of its primary liability for the performance of and compliance with the terms and provisions hereof, and shall not have the effect nor be construed to have the effect of waiving this limitation as to future, further, or additional assignments. Any assignment of the rights and obligations under this Agreement by Company without the consent of BP shall be voidable by BP. + +7.2 Notwithstanding anything to the contrary in any other agreement, including the Operating Agreement, should Company desire to sell all or any part of its interest in the Initial Well, the BP Interests, or any Substitute Well or Additional Well, Company shall promptly give written notice to BP, with full information concerning its proposed disposition, which shall include the name and address of the prospective transferee (who must be ready, willing and able to purchase), the purchase price, a legal description sufficient to identify the property, and all other terms of the offer. BP shall then have an optional prior right, for a period of fifteen (15) days after receipt of such written notice, to purchase for the stated consideration on the same terms and conditions the interest which Company proposes to sell. + + + + + + + +ARTICLE VIII NOTICE + +8.1 All notices and other communications required or desired to be given hereunder must be in writing and sent (properly addressed as set forth below) by (a) certified or registered U.S. mail, return receipt requested, with all postage and other charges fully prepaid, (b) hand or courier delivery, or (c) facsimile transmission. Date of service by mail and delivery is the date on which such notice is received by the addressee and by facsimile is the date sent (as evidenced by fax machine generated confirmation of transmission); provided, however, if such date received is a Saturday, Sunday or legal holiday, then date of receipt will be on the next date that is not a Saturday, Sunday or legal holiday, and if a facsimile is received after 5:00 pm local time, then date of receipt will be the next date that is not a Saturday, Sunday or legal holiday. Each Party may change its address by notifying the other Party in writing of such address change, and the change will be effective thirty (30) days after such notification is received by the other Party. + +FOR COMPANY: True North Energy Corp. 1200 Smith Street, 16th Floor Houston, Texas 77002 Fax No.: (832) 553-7244 + +FOR BP: BP America Production Company 501 Westlake Park Boulevard Houston, Texas 77079 Attention: Tuscaloosa Area Land Negotiator Fax No.: (281) 366-4519 + +ARTICLE IX FORCE MAJEURE + +9.1 If either Party is rendered unable, wholly or in part, by Force Majeure to carry out its obligations under this Agreement, upon such Party giving notice and reasonably full particulars of such Force Majeure in writing to the other Party within a reasonable time after the occurrence of the cause relied upon, the obligations of such Party, upon giving said notice, so far as such Party's ability to perform such obligations are materially affected by such Force Majeure, shall be suspended during the continuance of any inability so caused, and the cause of the Force Majeure as far as possible shall be remedied with all reasonable dispatch. The term "Force Majeure" means one or a set of circumstances such as an act of God, strike, lockout or other industrial disturbances, act of the public enemy, war, terrorism, blockade, riot, lightning, fire, storm, freezing, flood, explosion, governmental action, delay, restraint or inaction (whether said government's jurisdiction or authority be actual or assumed), including without limitation, governmental action or inaction relating to the permitting of wells, and any other cause, circumstance or condition (except financial) whether of the kind herein enumerated or otherwise, not reasonably within the control of the Party claiming Force Majeure. The above requirement that any Force Majeure shall be remedied with all reasonable dispatch shall not require the settlement of strikes, lockouts or other labor difficulty by acceding to the demands of opponents therein when such course is inadvisable in the discretion of the Party claiming Force Majeure. + + + + + + + +ARTICLE X RELATIONSHIP OF THE PARTIES; TAX PARTNERSHIP + +10.1 This Agreement does not create, and shall not be construed to create, a partnership, association, joint venture or fiduciary relationship of any kind or character between the Parties, and shall not be construed to impose any duty, obligation, or liability arising from such a relationship by or with respect to any Party. + +10.2 For federal and state income tax purposes only, the Parties shall be governed by the terms and provisions of the Badger Prospect Tax Partnership provisions attached as Exhibit "H". + +ARTICLE XI ENTIRE AGREEMENT AND CORPORATE AUTHORITY + +11.1 When executed by the duly authorized representatives of Company and BP, this Agreement shall constitute the entire agreement between the Parties regarding the subject matter herein and shall supersede and replace any and all other writings, understandings, letters of intent or memorandums of understanding entered into or discussed prior to the execution date hereof. + +11.2 The Parties hereto represent that, as of the date of the execution hereof, they are corporations duly authorized, validly existing and in good standing under the laws of the state of their incorporation and are qualified and authorized to do business in the State of Louisiana and that all requisite corporate power and authority to duly execute, deliver and effectuate this Agreement have been duly obtained. + +ARTICLE XII LAWS AND REGULATIONS; GOVERNING LAW + +12.1 Each Party shall comply with and conduct its operations hereunder in accordance with the Leases, and if applicable, assignment(s) and other agreements relating to the Properties, and all applicable laws, ordinances, rules, regulations, and orders of all federal, state and local governmental authorities having jurisdiction over the operations. + +12.2 This Agreement and all matters pertaining hereto shall be governed by and construed under the laws of the State of Louisiana, except to the extent that the conflict of law rules of said state would require that the laws of another state would govern its validity, construction, or interpretation. + +ARTICLE XIII DISCLAIMERS AND LIMITATION OF LIABILITY + +13.1 BP hereby expressly disclaims any and all representations and warranties associated with the Properties, express, statutory, implied or otherwise, including without limitation: (a) warranty of title, except as expressly provided in the Partial Assignment, (b) existence of any and all prospects, (c) geographic, geologic or geophysical characteristics associated with any and all prospects, (d) existence, quality, quantity or recoverability of hydrocarbon and non-hydrocarbon substances associated with the Properties, (e) costs, expenses, revenues, receipts, accounts receivable, accounts payable, suspense fund or gas imbalances associated with the Properties, (f) contractual, economic or financial information and data associated with the Properties, (g) continued financial viability or productivity of the Properties, (h) environmental or physical condition of the Properties, (i) federal or state income or other tax consequences associated with the Properties, (j) absence of patent or latent defects, (k) safety, (l) state of repair, (m) merchantability, and (n) fitness for a particular purpose; and Company (on behalf of itself and its Affiliates and each of their officers, directors, agents, employees, successors and assigns) irrevocably waives any and all claims it may have against BP GROUP with respect to the matters set forth in this Section 13.1. + + + + + + + +13.2 Each of the Parties expressly waives and agrees not to seek indirect, consequential, punitive or exemplary damages of any kind with respect to any dispute arising out of or relating to this Agreement or breach hereof. + +13.3 Company: (a) waives all rights in redhibition pursuant to Louisiana Civil Code Articles 2520, et seq.; (b) acknowledges that this express waiver shall be considered a material and integral part of this Agreement and the consideration thereof; and (c) acknowledges that this waiver has been brought to the attention of Company, has been explained in detail and that Company has voluntarily and knowingly consented to this waiver of warranty of fitness and warranty against redhibitory vices and defects for the Properties. + +13.4 To the extent applicable to the Properties, Company hereby waives the provisions of the Louisiana Unfair Trade Practices and Consumer Protection Law (La. R.S. 51:1402, et seq.). Company warrants and represents that it: (a) is experienced and knowledgeable with respect to the oil and gas industry generally and with transactions of this type specifically; (b) posses ample knowledge, experience and expertise to evaluate independently the merits and risks of the transactions herein contemplated; and (c) is not in a significantly disparate bargaining position. + +ARTICLE XIV NOT CONSTRUED AGAINST DRAFTER + +14.1 The Parties acknowledge that they have had an adequate opportunity to review each and every provision contained in this Agreement, including the opportunity to submit the same to legal counsel for review and comment. Based on said review and consultation, the Parties agree with each and every term contained in this Agreement. Based on the foregoing, the Parties agree that the rule of construction that a contract be construed against the drafter, if any, shall not be applied in the interpretation and construction of this Agreement. + +ARTICLE XV CONSPICUOUSNESS OF PROVISIONS + +15.1 The Parties acknowledge that the provisions contained in this Agreement that are set out in "bold" satisfy any requirement at law or in equity that provisions contained in a contract be conspicuously marked or highlighted. + +ARTICLE XVI MISCELLANEOUS PROVISIONS + +16.1 The terms and conditions of this Agreement (including the Exhibits) shall be binding upon and inure to the benefit of the Parties and their successors and permitted assigns, and the terms, covenants and conditions shall be covenants running with the Properties and with each transfer or assignment of the Properties, or portion thereof. + +16.2 If any provision of this Agreement is declared invalid or unenforceable, such declaration shall not affect the validity of the other provisions of this Agreement, which other provisions shall continue and remain in full force and effect. + +16.3 This Agreement may be executed in any number of counterparts, each of which shall be considered an original for all purposes. + + + + + + + +16.4 The article headings in this Agreement are inserted for convenience and identification only, and are in no way intended to describe, interpret, define, extend or limit the scope or intent of this Agreement or any provisions hereof. + +16.5 This Agreement may be amended, modified, changed, altered or supplemented only by written instrument (not electronic) duly executed by the parties hereto which specifically refers to this Agreement. + +16.6 The following constitute all of the exhibits to this Agreement (the "Exhibits") and are attached hereto and incorporated by reference herein: + +Exhibit "A" Lease Schedule Exhibit "B" Map of the Contract Area Exhibit "C" Plat of the Initial Well Exhibit "D" Well Information Requirements Exhibit "E" Form of Partial Assignment Exhibit "F" Form of Operating Agreement Exhibit "G" Insurance Requirements Exhibit "H" Badger Prospect Tax Partnership Provisions Exhibit "I" Wiring Instructions EXECUTED by the Parties on the date(s) indicated in the acknowledgments below, but effective as of the Effective Date. BP AMERICA PRODUCTION COMPANY /s/ Peter Wroe Foster + +Witness + + Peter Wroe Foster + +Full Name (Typed or Printed) + + By: /s/ Stacey J. Garvin + +/s/ Craig Alan Carley + + Stacey J. Garvin Attorney-in-Fact + +Witness + + Craig Alan Carley + +Full Name (Typed or Printed) + + TRUE NORTH ENERGY CORP. /s/ Peter Wroe Foster + +Witness + + Peter Wroe Foster + +Full Name (Typed or Printed) + + By: /s/ John I. Folnovic + +/s/ Craig Alan Carley + + Name: John I. Folnovic Title: President and Chief Executive Officer + +Witness + + Craig Alan Carley + +Full Name (Typed or Printed) + + + + + + + + + +ACKNOWLEDGMENTS STATE OF TEXAS § § COUNTY OF HARRIS § On this 7t h day of February, 2007, before me appeared STACEY J. GARVIN, to me personally known, who, being by me duly sworn, did say that he is Attorney-in-Fact for BP AMERICA PRODUCTION COMPANY, and that said instrument was signed on behalf of said corporation. Given under my hand and seal this 7t h day of February, 2007 My Commission Expires: /s/ Teresa L. Bowerman + +Notary Public, State of Texas + + Teresa L. Bowerman + +(NOTARY SEAL OF TERESA L. BOWERMAN) Name (Typed or Printed) 131239-6 + +Notary's Identification Number STATE OF TEXAS § § COUNTY/PARISH OF HARRIS § + +On this 7t h day of February, 2007, before me appeared John I. Folnovic, to me personally known, who, being by me duly sworn, did say that he or she is President and Chief Executive Officer of or for TRUE NORTH ENERGY CORP., and that said instrument was signed on behalf of said corporation. Given under my hand and seal this 7t h day of February, 2007 My Commission Expires: /s/ Teresa L. Bowerman + +Notary Public, State of Texas Teresa L. Bowerman + +(NOTARY SEAL OF TERESA L. BOWERMAN) Name (Typed or Printed) 131239-6 + +Notary's Identification Number \ No newline at end of file diff --git a/full_contract_txt/TUNIUCORP_03_06_2014-EX-10-COOPERATION AGREEMENT.txt b/full_contract_txt/TUNIUCORP_03_06_2014-EX-10-COOPERATION AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..c50dcd49500ea96e07987e827413a7342429ba81 --- /dev/null +++ b/full_contract_txt/TUNIUCORP_03_06_2014-EX-10-COOPERATION AGREEMENT.txt @@ -0,0 +1,209 @@ +Exhibit 10.4 + +COOPERATION AGREEMENT + +(2014 Amendment) + +This Cooperation Agreement (2014 Amendment) (this "Agreement") is entered into on January 24, 2014 in Beijing by and between: + +(1) Nanjing Tuniu Technology Co., Ltd., with its registered address at 3-5/F Building No.6, Southeast University Science Park, 6 Changjianghou Street, Xuanwu District, Nanjing and its legal representative being Yu Dunde ("Party A"); + +(2) Beijing Tuniu Technology Co., Ltd., with its registered address at R1006 10/F Building No.4, Yard No.1 of Shangdishi Street, Haidian District, Beijing and its legal representative being Yu Dunde ("Party B"). + +WHEREAS + +1. Party A is a company with exclusively domestic capital incorporated under the laws of the People's Republic of China, mainly engaged in the internet-based sale, promotion of tour products, room reservation and conference affairs services. + +2. Party B is a limited liability company incorporated under the laws of the People's Republic of China, mainly engaged in research and development of computer software technology, technology transfer, technical consultancy and technical services, computer technology training, technical services and business consultancy services in relation to the internet-based sale and promotion of tour products. + +3. Party A intends to authorize Party B to provide to Party A and its subsidiaries the technical services and business consultancy services in relation to the internet-based sale and promotion of tour products, including but not limited to development, operation, maintenance of internet technology platform as well as consultancy services relating to sale and promotion of tour products or cooperation provided by Party B in other forms as required under this Agreement, and Party B agrees to accept such authorization. + +4. After an amiable consideration, the Parties unanimously agree that the establishment of a long-term and close cooperation relationship is in the best interests of the Parties and their beneficiaries. + +5. The Parties have entered into the Cooperation Agreement on September 17, 2008 in respect of the aforementioned cooperative matters (the "Original Cooperation Agreement"). + + + + + +The Parties unanimously agree to amend and restate the Original Cooperation Agreement through friendly negotiation and the Original Cooperation Agreement is amended and restated as follows: + + 1. Business Cooperation + +Party A and Party B unanimously agree that the proposed cooperation shall be the internet-based sale and promotion of tour products conducted by Party A and its subsidiaries or other value-added business carried out by Party A. Party B shall provide the business consultancy and technical services as well as the technical consultancy as set forth in Article 3 hereinafter to Party A and its subsidiaries to facilitate them to conduct the aforementioned business and supply relevant products and services. + + 2. Exclusive Cooperation + + + +2.1 Party A irrevocably undertakes that Party A will take Party B as its exclusive and sole partner to provide the business consultancy and technical services as well as technical consultancy to Party A and its subsidiaries. Party A shall not establish any same or similar cooperative relationship with any third party in respect of such businesses nor shall it make any same or similar arrangement, unless with the prior written consent of Party B. + + 2.2 Party A irrevocably undertakes that it will make best efforts to assist and endeavor to achieve the exclusive operation of thecooperative business to the extent permitted by laws. + + + +2.3 Party A irrevocably undertakes that, without Party B's consent, Party A shall not conduct any other business or make any commercial arrangement, including without limitation being engaged in or otherwise participating in any commercial activities and businesses independently or together with any other person or entity, nor shall it carry out any activities that may be competitive with or cause adverse effect to Party B's business. + + 3. Party B's Services + +Party B undertakes to provide the following technical consultancy and services to Party A and its subsidiaries in respect of the cooperative business (collectively referred to as "Party B's Services"): + + 3.1 Research, development, production, test, operation and maintenance, upgrade and other services of relevant technology; + + 3.2 Development, construction, operation and maintenance, upgrade and other services of relevant internet platform and system; + + 3.3 Design the relevant tour products plan, and provide relevant training, implementation and upgrade and other services; + + + + + + 3.4 Consultancy services related to sale and promotion of tour products; + + 3.5 Other services as agreed by the Parties. + +Party A agrees that Party B may, at its own discretion, provide the aforementioned Party B's Services to Party A and its subsidiaries, or purchase the required services from any third party and provide the services to Party A and its subsidiaries. + +Party A shall cause its subsidiaries to accept Party B's Services. The Parties agree that the subsidiaries of Party A may otherwise enter into an agreement with Party B in respect of Party B's Services in accordance with this Agreement. + + 4. Cooperation Remuneration + + 4.1 Party A and Party B unanimously agree that they will allocate the proceeds generated from cooperation in accordance with thefollowing provisions: + +Party B shall have the right to charge, on a quarterly basis, the service fee ("Service Fee") from Party A or its subsidiaries who have accepted Party B's Services, or designate another person to charge Service Fee from Party A or its subsidiaries who have accepted Party B's Services. The total sum of Service Fee shall be equal to the amount of profits gained by Party A or its subsidiaries who have accepted Party B's Services. Party B shall have the right to adjust the amount of Service Fee at its own discretion, without the prior consent of Party A or its subsidiaries. + +Party A shall cause its subsidiaries to pay the Service Fee in respect of Party B's Services provided to such subsidiaries. + + 4.2 The Service Fee of the last quarter shall be paid prior to the seventh business day following the commencement of the next quarter. Such Service Fee shall be paid to the bank account designated by Party B in writing. If Party B intends to change its bank account, it shall send a written notice to Party A seven business days in advance. + + 4.3 Except as otherwise agreed hereunder, if Party A or its subsidiaries fail to pay the Service Fee in full on schedule according to provisions of Article 4.1 and Article 4.2, then Party A or its subsidiaries shall, in addition to the continuance of the payment of Service Fee in full, it shall pay Party B the liquidated damages at a daily interest rate of 0.03% in respect of the outstanding Service Fee. + + 5. Term of Cooperation + +Party A and Party B agree and confirm that the term of cooperation under this Agreement shall commence from the execution date hereof and end on the expiration date of the operation term of Party B ("Term of Cooperation"). + + + + + +6. Termination + + 6.1 Prior to the expiration of the Term of Cooperation , this Agreement shall only be terminated upon occurrence of the followingcircumstances: + + 6.1.1 Party B shall have the right to terminate this Agreement in advance without the prior written consent from Party A, bysending a written notice to Party A but Party A may not terminate or rescind this Agreement; + + 6.1.2 One Party requests to terminate this Agreement when the other Party is declared bankrupt in accordance with the laws; + + 6.1.3 Party B fails to provide Party B's Services to Party A for more than three consecutive years due to the force majeure event. + + 6.2 Rights and Obligations of the Parties upon Termination + + 6.2.1 If this Agreement is terminated according to the aforementioned Article 6.1.1, neither Party shall assume any obligations or liabilities to the other Party as of the termination hereof, unless as otherwise agreed by the Parties, provided that the liabilities for breach occurring prior to the termination shall not be exempted; + + 6.2.2 If this Agreement is terminated according to the aforementioned Article 6.1.2, the rights and obligations of the Parties at thetime of termination hereof shall be subject to the relevant bankruptcy laws; + + 6.2.3 If this Agreement is terminated according to the aforementioned Article 6.1.3, neither Party shall assume any obligations or liabilities to the other Party as of the termination hereof, provided that the liabilities for breach that occured prior to the force majeure event shall not be exempted. + + 6.3 Each Party hereby irrevocably waives other rights to terminate this Agreement it may have under any applicable laws, except for therights of the Parties agreed under this Article 6. + + + +6.4 Party A hereby expressly undertakes that it waives the right to request amendment and revocation of any term of this Agreement on the ground of material misunderstanding or unconscionability, regardless of whether such request is based on the percentage and amount of payment specified hereunder or the quantity and quality of any service provided by Party B, or is raised against the provisions under which Party A is prohibited from having any cooperation with a third party and conducting any businesses other than those agreed hereunder. + + + + + +7. Representations and Warranties + + 7.1 Each Party hereby represents and warrants to the other Party that: + + 7.1.1 It has sufficient capacity for action, power and authorization (including necessary government approval and internal permit ofcorporation) to execute and perform this Agreement; + + 7.1.2 This Agreement shall be legally binding on the Parties as of the execution date hereof; and + + 7.1.3 There is no outstanding litigation, arbitration or other legal or governmental proceedings, or to the knowledge of that Party, there is no litigation, arbitration or other legal or governmental proceedings threatening or affecting the performance of obligations of that Party hereunder. + + 7.2 Each Party shall be responsible for and hold the other Party harmless from any loss, damages and claim arising out of violation of anyrepresentations and warranties hereunder. + + 8. Breach + +The Parties agree and acknowledge that: + + + +8.1 If any Party commits any act in violation of this Agreement, such Party shall assume the liabilities for breach according to this Agreement and applicable laws. If both Parties breach this Agreement, they shall each assume their own liabilities for breach respectively. Notwithstanding the foregoing provisions, neither Party shall be responsible to the other Party in respect of any indirect loss or damage caused hereunder. + + 8.2 The demand for liquidated damages and specific performance in respect of any breach during the Term of Cooperation are all remedies that the non-breaching Party shall have under this Agreement. The non-breaching Party shall waive the right to request termination of this Agreement it may have according to any applicable laws as a result of the violation acts committed by the breaching Party. + + 9. Governing Law + +This Agreement shall be governed by and interpreted pursuant to the laws of the People's Republic of China that are promulgated and are publicly available, provided that the general international business practices shall apply if the laws of the People's Republic of China that are promulgated and are publicly available do not involve any matter in relation to this Agreement. + + + + + +10. Force Majeure + +The force majeure hereunder shall mean the natural disaster, war, political event, and adjustment of laws, regulations and state policies. If the performance of this Agreement by one Party or the Parties according to provisions agreed hereunder is directly affected by the force majeure event, the affected Party shall immediately notify the other Party or its attorney-in-fact of the situation of the force majeure event, and shall, within fifteen (15) days, provide the detailed information of the force majeure event or the reason for non-performance or partial performance or delay of performance of this Agreement as well as valid evidence thereof (which shall be issued by the notarization authority at the place where the force majeure event occurs). The Parties shall negotiate to decide the performance of this Agreement depending on to what degree the performance of this Agreement is influenced by the force majeure, and decide on whether the affected Party may partially perform or postpone the performance of its obligations hereunder. Except as provided for under Article 6.1.3 hereof, neither Party shall exercise the right to termination this Agreement that it may have under any applicable laws on the ground of occurrence of force majeure event. + + 11. Dispute Resolution + + 11.1 Any dispute arising out of performance of this Agreement or in connection with this Agreement shall be resolved by the Partiesthrough friendly negotiation. + + 11.2 If the dispute cannot be resolved through negotiation within thirty (30) days after a Party sends the written notice to the other Party stating its opinions on this dispute, either Party may submit the dispute to China International Economic and Trade Commission for arbitration in Beijing according to its arbitration rules then in effect. The arbitration award shall be final and binding on each Party. + + 12. Miscellaneous + + + +12.1 This Agreement shall take effect as of the date when the authorized representatives of the Parties sign hereon. The Parties agree and confirm that this Agreement shall constitute all understanding, interpretation and intentions of the Parties in respect of the cooperative business. This Agreement shall be taken as an amendment and restatement of the Original Cooperation Agreement and supersede the Original Cooperation Agreement in all respects. + + 12.2 The rights and obligations of each Party under this Agreement shall not be transferred, except for the transfer by Party B to its affiliates. + + + + + + + +12.3 The Parties agree that any and all intellectual property researched and developed, created and invented by the Parties (including their employees) in the course of performance of this Agreement shall be owned by Party B. For the purpose of this Article 12.3, "Intellectual Property" means the patent, patent application right, trademark, service mark, logo, image, trade name, internet domain name, design right, copyright (including copyright of computer software) and moral rights, database right, right of semiconductor design drawing, utility model, proprietary technology and other intellectual property that are registered and unregistered including those that have applied for registration, as well as all other rights or protection methods with same or similar effect on a global scope. + + 12.4 To the extent permitted under the laws of the People's Republic of China, the failure or delay of performance of any right under this Agreement by any Party shall not be deemed as a waive of such right, and any single or partial exercise of any right shall not preclude the further exercise of such right in the future. + + 12.5 This Agreement shall constitute an entire agreement between the Parties in respect of the subject matter of this Agreement and supersede any and all prior expression of intention or understanding reached by the Parties in relation to this Agreement. This Agreement shall not be amended or modified unless the authorized representatives of the Parties sign a written agreement thereof. + + 12.6 This Agreement shall be executed in two (2) copies, each of which shall have the same legal effect. + + + +12.7 Any notice or written communication sent by a Party to the other Party under this Agreement shall be made in writing and delivered by courier service or by facsimile accompanied with a confirmation hard copy delivered by courier service. The notice, communication or letter sent under this Agreement shall be deemed as effectively received on the seventh (7) day after sending to the courier service, or shall be deemed as effectively received on the first (1) day after delivered by facsimile, which shall be evidenced by the transmission confirmation. All notice and communication shall be sent to the following addresses until a Party notify the other Party in writing to change such addresses: + +Party A: Nanjing Tuniu Technology Co., Ltd. Address: Tuiniu Building, 699-32Xuanwu Avenue, Xuanwu District, Nanjing Fax No.: (86 25) 86853999 Attention: General Manager + +Party B: Beijing Tuniu Technology Co., Ltd. Address: Tuiniu Building, 699-32Xuanwu Avenue, Xuanwu District, Nanjing Fax No.: (86 25) 86853999 Attention: General Manager + + + + + + 12.8 Confidentiality Obligations + + 12.8.1 Neither Party shall disclose the financial and technical information obtained in the course of conclusion of this Agreement to any third party nor use such information for matters irrelevant to this Agreement, regardless of written or oral information, unless the other Party gives a prior written consent thereto. + + 12.8.2 The Parties shall be obligated to take measures (including without limitation preparing the confidentiality rules, entering into the confidentiality agreement, establishing the archive management system and etc.) to ensure their respective employees will observe the confidentiality obligations specified hereunder. + +(The remaining of this page is intentionally left blank) + + + + + +In witness whereof, this Agreement has been executed by the duly authorized representatives of the Parties on the date first mentioned above. Party A: Nanjing Tuniu Technology Co., Ltd. + +By: /s/ Yu Dunde Name: Yu Dunde Title: Chairman + +Party B: Beijing Tuniu Technology Co., Ltd. + +By: /s/ Yu Dunde Name: Yu Dunde Title: Chairman \ No newline at end of file diff --git a/full_contract_txt/TURNKEYCAPITAL,INC_07_20_2017-EX-1.1-Strategic Alliance Agreement.txt b/full_contract_txt/TURNKEYCAPITAL,INC_07_20_2017-EX-1.1-Strategic Alliance Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..a2212c85ebc3acc8026a46b879404c10fefebfbb --- /dev/null +++ b/full_contract_txt/TURNKEYCAPITAL,INC_07_20_2017-EX-1.1-Strategic Alliance Agreement.txt @@ -0,0 +1,189 @@ +1. + +2. + +2.1 + +2.2 + +3. + +3.1 + +3.2 + +4. + +4.1 + + + +EXHIBIT 1.1 Strategic Alliance Agreement + +This Agreement is made and entered into this 30th day of June 2017, + +Between: Turnkey Capital Inc., having its office located at 2929 E. Commercial Blvd, Suite PH-D, Ft. Lauderdale, Florida, hereinafter referred to as "TKCI"; + +And: + +A Seminole Indian Company to be formed by Former Seminole Tribal Chairman James E. Billie and Craig Talesman, having an office located at 1800 Frank Huff Road, Seminole Reservation, Okeechobee, FL 34974, hereinafter referred to as "SIC". + +Overview + +The purpose and intent of this strategic alliance is to combine the resources and talents of, TKCI and SIC, in order to take advantage of every opportunity permitted by tribal sovereignty to create revenue streams in multiple areas in conjunction with operating partners that have existing marketing and customers in place, thereby limiting the capital requirements and risk. New marketing advantages based upon competitive pricing, cross marketing and new revenue streams from expansion into other industries will grow the business beyond anything previously imagined. The structure may also be used for additional compatible acquisitions which will also fuel growth. TKCI believes that structuring operations with Tribal Sovereignty will deliver the financial advantages of operating in a tax free environment with limited liability, plus other benefits such as permit and zoning ease, supporting an ideal structure for investment capital and successful entrepreneurial ventures. + +Term + +The term of this Agreement is twenty-four (24) months. The Agreement may be renewed, subject to mutual written approval. + +Notwithstanding the completion, expiration or termination of this Agreement, the indemnities warranties and undertakings contained or referred to in this Agreement shall continue to subsist for as long as may be necessary for the purpose of giving effect to each one and every one of them. + +TKCI Committments + +TKCI shall establish a wholly-owned subsidiary (the "Holding Company") for the sole purpose of conducting and developing business on behalf of this alliance. The utilization of this subsidiary will provide for separate record keeping, reporting and tracking of all business related to this agreement. + +In addition to capital recruitment functions, TKCI shall perform all of the functions and accept all of the responsibilities of the position of Chief Financial Officer including but not limited to management of accounts receivable and accounts payable, interfacing with Holding Company accountants on tax matters, interfacing with Holding Company accountants and lawyers on regulatory and compliance matters, and all other tasks typically and reasonably associated with the post and position of Chief Financial Officer. + +Committments and Rights of SIC + +SIC acknowledges and agrees that the ability of TKCI to render its services is uniquely dependent upon + + + + + +4.2 + +4.3 + +4.4 + +4.5 + +4.6 + +4.7 + +5. + +5.1 + +5.1.1 + +5.1.2 + +5.2 + +5.5.1 + +5.5.2 + +5.3 + +5.4 + + + +the cooperation and provision of information to TKCI by Chief James E. Billie and Craig Talesman for SIC. In the event that information is required, it shall be provided in writing. + +SIC, represented by Chief James E. Billie and Craig Talesman, will assist in the closing of the transactions by: 1) participating in meetings with key decision makers, providing process overview, and describing case histories of similarly situated projects; and 2) providing advice on issues such as i) location; (ii) deal structure; (iii) funding; (iv) timing/phasing; (v) cash flow/revenue collection issues; and (vi) other major implementation issues. + +SIC shall allow TKCI to review and analyze all business opportunities that could be mutually beneficial to TKCI and SIC within the time frame of this alliance. + +SIC, represented by Chief James E. Billie and Craig Talesman, will assist in the finalization of project structuring plans geared toward maximizing all available revenue streams. + +SIC, represented by Chief James E. Billie and Craig Talesman, will provide access to other opportunities. + +The decision to join this alliance is at the absolute discretion of Chief James E. Billie and Craig Talesman. TKCI affirms that it shall not have any claim towards SIC if the management decides not to sign the agreement in the investigation stage, and before any agreements are signed, for any reasons whatsoever. + +SIC may try to locate, or authorize others to locate potential investors who are not Reserved Investors (or Rejected Investors), and SIC may accept investments from such other investors, without incurring any liability towards TKCI + +Fees and Financial Structuring + +A wholly-owned subsidiary (the "Holding Company") shall be established by TKCI to accomplish the following: + +To hold the assets and liabilities of the TKCI/SIC alliance and provide for separate management of the alliance business operations. + +Operating capital may be raised and a growing shareholder base may be established to support future expansion. + +Net revenue from business operations created by Holding Company for the alliance will be distributed by Holding Company equally - 50/50 - to TKCI and SIC: + +SIC's original business concepts and plans, as well as opportunities brought to the table through its connections, and third-party contracts, are ways that we anticipate business could be generated, and revenues created; TKCI's advisory and management services and capital resources will provide the critical structure and business mechanism to carry concepts through to revenue. Turnkey Capital Inc. (TKCI) will reserve ten percent (10%) of the shares of TKCI for SIC. These shares will be issued once an exclusivity agreement is reached. Once the Holding Company is raising funds and generating revenue, the parties will negotiate a monthly fee. + + + + + +6 + +7. + +8. 8.1 + +8.2 + +9. 9.1 + +9.2 + +9.3 + + + +Confidentiality and non-compete During the term of this Agreement and for one (1) year thereafter, TKCI will keep in confidence, not reveal, not use and not allow or assist others to use, any information marked "Confidential" received from or through SIC in the context of its activities hereunder, except as authorized in writing by SIC. However, TKCI may assume that unless SIC specifically advises it to the contrary, in writing, with respect to an item of information, it may reasonably make such information available to third parties that TKCI is attempting to introduce to SIC. Such information includes, but is not limited to SIC's business plans and proprietary disclosures. The above provisions will survive the termination of this Agreement, except they will not apply to information that (i) is in the public domain or later becomes available to the public through no breach of this Agreement by either party; (ii) is obtained by either party from a third party who had the legal right to disclose the information to that party; (iii) is already in the possession of the receiving party on the date this Agreement becomes effective; (iv) is independently developed by either party or (v) is required to be disclosed by law, government regulation, or court order. + +Termination This Agreement may be terminated early if mutually agreed to by both parties in writing, or for cause, which is defined as conviction of either party of a criminal offense, actions in bad faith, and knowing or intentional misconduct, failure to perform as determined by SIC, or a material breach of this Agreement. The expiration or early termination of this Agreement shall not affect any of its provisions which are expressed to operate or have an effect afterwards or any right of action already accrued to either party in respect of any breach by the other party. + +Warranties and Indemnification SIC represents and warrants to TKCI that the undersigned are duly authorized to execute and enter into this Agreement, and that all information relating to SIC furnished by Chief James E. Billie and Craig Talesman, or its other representatives, to TKCI will be complete, accurate and not misleading. + +Each party ("the Defaulting party") shall indemnify the other party ("the Innocent party") and keep the Innocent Party indemnified and harmless from and against any claims brought against the Innocent Party as a result of any acts or omissions of the Defaulting Party, whether such acts or omissions relate to the Defaulting Party's tasks under this Agreement or not. The Defaulting Party's liability under this provision shall extend to legal fees and to court and/or arbitration expenses, as the case may be as well as any other expenses incurred by the Innocent Party in the course of defending and/or handling and/or settling such claim. + +Strategic Alliance TKCI is performing under this Agreement as a Strategic Alliance member and is not a legal or implied agent or employee of SIC. This Agreement does not create agency or employment relationship between the parties hereto. + +TKCI shall not, by reason of this Agreement or the performance of the services delineated herein, be or be deemed to be, an employee of SIC, and TKCI shall have no power to enter into any agreement on behalf of, or otherwise bind SIC. Without limiting the foregoing, TKCI shall not enter into any contract or commitment on behalf of SIC. + +SIC acknowledges and agrees that TKCI shall have no liability resulting from TKCI's failure to obtain any financing for any of its programs or business concepts. Neither party shall have any claim whatsoever against the other if an investment or a sales opportunity was lost because of any of the other party's acts or omissions. + + + + + +9.4 + +9.5 + +10. 10.1 10.2 + +10.3 + +11. 11.1 + +11.2 + +11.3 + +11.4 + +11.5 + + + +SIC understands that TKCI is not acting as a broker-dealer or dealer in securities with respect to any transaction contemplated hereunder, and that any securities which may be sold in respect to any such transaction are being sold directly by or to SIC, to or by TKCI parties to such transaction. SIC acknowledges and agrees that no liability will be attributed to TKCI in connection with the issuance of any equity or securities. Any fees due to TKCI are to be paid solely as finder's fee and as remuneration for other services provided for under this Agreement. + +TKCI will have First Right of Refusal with regard to any sale or disposition of any part or the whole of companies or projects developed in relationship with this alliance. + +Arbitration This Agreement shall be governed by the laws of the State of Florida. Any disputes arising under or in connection with the validity, interpretation and performance of this Agreement that cannot be resolved amicably by the parties shall be settled in arbitration before a single arbitrator. If arbitration fails to render a mutually agreement resolution the Courts of the State of Florida will be deemed to have jurisdiction. In addition to all other remedies provided in this Agreement, the prevailing party shall be entitled to all costs and expenses reasonably incurred as a result of said breach, including arbitration and court costs, and reasonable attorney's fees. + +Miscellaneous This Agreement, together with any added Appendices, constitutes the entire agreement between the parties with respect to its subject matter and supersedes any prior agreement. This Agreement may be changed only by mutual agreement between the parties, expressed in writing. + +All notices under this Agreement shall be in writing and shall be deemed given if delivered to the party personally, or five (5) days after sent by registered airmail or by an express courier, as well as delivery by confirmed facsimile transmission or confirmed electronic mail. The addresses for notices given under this Agreement shall be those provided above. + +If any provision of this Agreement is held by an arbitrator to be invalid, void or unenforceable, the remaining provisions shall nevertheless continue in full force, and the stricken provision shall be replaced by a valid, legal and enforceable provision having as nearly as possible the same economic and practical effect. + +This Agreement shall be binding on all parties' respective assigns and successors. + +Facsimile copies of this Agreement, with signatures, shall be given the same legal effect as an original with original signatures. + +And in witness, the parties sign on the day and date first above written: + +For Chief James E. Billie Craig Talesman Turnkey Capital Inc. Sign: /s/ Chief James E. Billie /s/ Craig Talesman /s/ Neil Swartz Name: Craig Talesman Neil Swartz Title: Chief Executive Officer \ No newline at end of file diff --git a/full_contract_txt/TcPipelinesLp_20160226_10-K_EX-99.12_9454048_EX-99.12_Transportation Agreement.txt b/full_contract_txt/TcPipelinesLp_20160226_10-K_EX-99.12_9454048_EX-99.12_Transportation Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..002ff60cd5b4ce11c2c73abe8f35788c00407209 --- /dev/null +++ b/full_contract_txt/TcPipelinesLp_20160226_10-K_EX-99.12_9454048_EX-99.12_Transportation Agreement.txt @@ -0,0 +1,125 @@ +QuickLinks -- Click here to rapidly navigate through this document + +Exhibit 99.12 + +TRANSPORTATION SERVICE AGREEMENT Contract Identification FT18150 + +This Transportation Service Agreement (Agreement) is entered into by Great Lakes Gas Transmission Limited Partnership (Transporter) and ANR PIPELINE COMPANY (Shipper). + +WHEREAS, Shipper has requested Transporter to transport Gas on its behalf and Transporter represents that it is willing to transport Gas under the terms and conditions of this Agreement. + +NOW, THEREFORE, Transporter and Shipper agree that the terms below constitute the transportation service to be provided and the rights and obligations of Shipper and Transporter. + +1. EFFECTIVE DATE: November 01, 2016 + +2. CONTRACT IDENTIFICATION: FT18150 + +3. RATE SCHEDULE: FT + +4. SHIPPER TYPE: Interstate Pl + +5. STATE/PROVINCE OF INCORPORATION: Delaware + +6. TERM: November 01, 2014 to October 31, 2017 + +7. EFFECT ON PREVIOUS CONTRACTS: + +This Agreement supersedes, cancels and terminates, as of the effective date stated above, the following contract(s): Service Agreement dated November 01, 2015 with Contract Identification FT18150. + +8. MAXIMUM DAILY QUANTITY (Dth/Day): 101,300 + +Please see Appendix A for further detail. + +9. RATES: + +Unless Shipper and Transporter have agreed to a rate other than the maximum rate, rates shall be Transporter's maximum rates and charges plus all applicable surcharges in effect from time to time under the applicable Rate Schedule (as stated above) on file with the Commission unless otherwise agreed to by the parties in writing. Provisions governing a Rate other than the maximum shall be set forth in this Paragraph 9 and/or on Appendix B hereto. + +10. POINTS OF RECEIPT AND DELIVERY: + +The primary receipt and delivery points are set forth on Appendix A. + +11. RELEASED CAPACITY: + +N/A + +12. INCORPORATION OF TARIFF INTO AGREEMENT: + +This Agreement shall incorporate and in all respects be subject to the "General Terms and Conditions" and the applicable Rate Schedule (as stated above) set forth in Transporter's FERC Gas Tariff, Third Revised Volume No. 1, as may be revised from time to time. Transporter may file and seek Commission approval under Section 4 of the Natural Gas Act (NGA) at any time and from time to time to change any rates, charges or provisions set forth in the applicable Rate Schedule (as stated above) and the "General Terms and Conditions" in Transporter's FERC Gas Tariff, Third Revised Volume No. 1, and Transporter shall have the right to place such changes in effect in accordance with the NGA, and this Agreement shall be deemed to include such changes and any such changes + +Source: TC PIPELINES LP, 10-K, 2/26/2016 + + + + + +which become effective by operation of law and Commission Order, without prejudice to Shipper's right to protest the same. + +13. MISCELLANEOUS: + +No waiver by either party to this Agreement of any one or more defaults by the other in the performance of this Agreement shall operate or be construed as a waiver of any continuing or future default(s), whether of a like or a different character. + +Any controversy between the parties arising under this Agreement and not resolved by the parties shall be determined in accordance with the laws of the State of Michigan. + +14. OTHER PROVISIONS: + +It is agreed that no personal liability whatsoever shall attach to, be imposed on or otherwise be incurred by any Partner, agent, management official or employee of the Transporter or any director, officer or employee of any of the foregoing, for any obligation of the Transporter arising under this Agreement or for any claim based on such obligation and that the sole recourse of Shipper under this Agreement is limited to assets of the Transporter. + +Upon termination of this Agreement, Shipper's and Transporter's obligations to each other arising under this Agreement, prior to the date of termination, remain in effect and are not being terminated by any provision of this Agreement. + +15. NOTICES AND COMMUNICATIONS: + +All notices and communications with respect to this Agreement shall be in writing by mail, e-mail, or fax, or other means as agreed to by the parties, and sent to the addresses stated below or to any other such address(es) as may be designated in writing by mail, e-mail, or fax, or other means similarly agreed to: + +ADMINISTRATIVE MATTERS Great Lakes Gas Transmission Limited Partnership Commercial Services 700 Louisiana St., Suite 700 Houston, TX 77002-2700 + +ANR PIPELINE COMPANY 700 Louisiana St., Suite 700 Houston, TX 77002-2700 Attn: AGREED TO BY: + +GREAT LAKES GAS TRANSMISSION LIMITED PARTNERSHIP By: Great Lakes Gas Transmission Company + +ANR PIPELINE COMPANY + +/s/ STEVEN D. JASKOLSKI + +Steven D. Jaskolski Director, Commercial Services + +/s/ JOSEPH E. POLLARD + +Joseph E. Pollard Director, Long Term Marketing + +Dated: December 14, 2015 Dated: December 14, 2015 + +Source: TC PIPELINES LP, 10-K, 2/26/2016 + + + + + +APPENDIX A + +Contract Identification FT18150 + +Date: November 01, 2016 Supersedes Appendix Dated: November 01, 2015 + +Shipper: ANR PIPELINE COMPANY + +Maximum Daily Quantity (Dth/Day) per Location: + +Begin Date End Date Point(s) of Primary Receipt Point(s) of Primary Delivery MDQ + +Maximum Allowable Operating Pressure (MAOP) + +11/01/2014 03/31/2015 SOUTH CHESTER 101,300 974 11/01/2014 03/31/2015 DEWARD 101,300 974 04/01/2015 10/31/2015 SOUTH CHESTER 0 974 11/01/2015 03/31/2016 SOUTH CHESTER 101,300 974 11/01/2015 03/31/2016 DEWARD 101,300 974 04/01/2016 10/31/2016 SOUTH CHESTER 0 974 11/01/2016 03/31/2017 SOUTH CHESTER 101,300 974 11/01/2016 03/31/2017 DEWARD 101,300 974 04/01/2017 10/31/2017 SOUTH CHESTER 0 974 11/01/2014 03/31/2015 FARWELL 101,300 974 04/01/2015 10/31/2015 FARWELL 0 974 11/01/2015 03/31/2016 FARWELL 101,300 974 04/01/2016 10/31/2016 FARWELL 0 974 11/01/2016 03/31/2017 FARWELL 101,300 974 04/01/2017 10/31/2017 FARWELL 0 974 + +Source: TC PIPELINES LP, 10-K, 2/26/2016 + + + + + +QuickLinks + +Exhibit 99.12 + +TRANSPORTATION SERVICE AGREEMENT Contract Identification FT18150 APPENDIX A Contract Identification FT18150 + +Source: TC PIPELINES LP, 10-K, 2/26/2016 \ No newline at end of file diff --git a/full_contract_txt/TheglobeComInc_19990503_S-1A_EX-10.20_5416126_EX-10.20_Co-Branding Agreement.txt b/full_contract_txt/TheglobeComInc_19990503_S-1A_EX-10.20_5416126_EX-10.20_Co-Branding Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..080aab08e42eb8587bd1440d4aef402aeb47546b --- /dev/null +++ b/full_contract_txt/TheglobeComInc_19990503_S-1A_EX-10.20_5416126_EX-10.20_Co-Branding Agreement.txt @@ -0,0 +1,351 @@ +EXHIBIT 10.20 + + CO-BRANDING Agreement + + This Co-Branding Agreement (the "Agreement") is entered into as of March ___, 1999 (the "Effective Date") by and between theglobe.com, Inc., with its principal place of business at 31 West 21st Street, New York, NY 10010 ("theglobe"), and The Boxlot Company, with its principal place of business at 12626 High Bluff Drive, Suite 370, San Diego, CA 92130 ("Boxlot"). + +1. DEFINITIONS. + + (a) "Boxlot Banners" means any banner, button, text or similar ads Boxlot provides to theglobe in connection with this Agreement. + + (b) "Boxlot Content" means any content or information (including without limitation any text, music, sound, photographs, video, graphics, data or software), in any medium, provided by Boxlot to theglobe (other than Boxlot Banners), as part of the Service or on the Co-Branded Pages, including any content specified in Exhibit A. + + (c) "Boxlot Marks" means all Boxlot domain names, trademarks, logos, and other graphics reasonably necessary or desirable for theglobe to perform under this Agreement. + + (d) "Boxlot Site" means the Boxlot-branded (i.e., non-co-branded) version of the Service and associated pages. + + (e) "Co-Branded Pages" means all pages of the Service (including, without limitation, any Java screens associated with the Service or emails or other direct communications sent to Users by operation of the Service). + + (f) "Domain Name" means the domain name described in Exhibit A. + + (g) "Launch Date" means the first date on which the Service is made publicly available. + + (h) "Marks" means the Boxlot Marks or theglobe Marks, as applicable. + + (i) "Net Revenues" means all monetary consideration theglobe actually receives for CPM- or CPC-based advertisements and promotions (other than those for its commerce partners) delivered in connection with the Co-Branded Pages, less a sales and administration fee of 15%. + + (j) "Page Templates" means theglobe's standard page layout templates, as revised by theglobe from time to time. + + (k) "Service" means the services described in Exhibit A, as changed over time in accordance with this Agreement, which are co-branded using the Page Templates. The Service + + 1 + + also includes any Boxlot-operated back-end administration tools or pages used by theglobe or Boxlot to exchange data in accordance with this Agreement. + + (l) "Shadow Site" means the password-protected site where the Co-Branded Pages are made available for theglobe's review and approval prior to being made publicly available. + + (m) "theglobe Marks" means all theglobe domain names, trademarks, logos, and other graphics reasonably necessary or desirable for Boxlot to perform under this Agreement. + + (n) "theglobe Site" means all pages under the theglobe.com domain. + + (o) "User" means any person who accesses any Co-Branded Page. + +2. DEVELOPMENT AND IMPLEMENTATION. + + 2.1 Pre-Launch Deliverables. On or around March 31, 1999, theglobe shall deliver to Boxlot the Page Templates and the other materials specified in Exhibit A. + + 2.2 Initial Development. Boxlot shall develop the Co-Branded Pages using the Page Templates and take all other steps required to co-brand the Service in accordance with Exhibit A. In addition, if theglobe is passing any user data to Boxlot, theglobe's standard Automatic Partner Registration procedure shall apply, and Boxlot shall perform the development necessary to use such procedure. The current Automatic Partner Registration procedure is described in Exhibit D. Boxlot shall make the Service implementation available to theglobe on the Shadow Site prior to making it publicly available. Boxlot shall not make the initial Service implementation publicly available without theglobe's prior written approval. Unless otherwise specified, each party shall be responsible for all development, hosting and other costs associated with the pages living on their servers and all emails they send. + + 2.3 Changes. theglobe shall have sole control over the Service's look and feel, and Boxlot shall not make any change in the Service's look and feel without theglobe's prior consent. Further, Boxlot shall notify theglobe if Boxlot changes or adds any functionality of the services described in Exhibit A (as modified by Boxlot over time) as implemented on the Boxlot Site. Unless requested by theglobe, Boxlot shall implement such changes or additions to the Service and make such implementation available on the Shadow Site for theglobe's approval within 30 days of their introduction on the Boxlot Site. However, under no circumstances shall Boxlot offer Users any community features (such as email, chat, message boards, or the ability to create home pages) from the Co- Branded Pages without theglobe's consent, and if Boxlot desires to do so, the parties will work together to discuss appropriate implementations. Boxlot shall make available via the Shadow Site all changes to the Service or the Co-Branded Pages completed in this Section 2, and Boxlot shall not implement such changes on the publicly available Service or Co-Branded Pages until it has received theglobe's approval. + + 2.4 Service Operation. Boxlot shall host and operate the Service under + +Source: THEGLOBE COM INC, S-1/A, 5/3/1999 + + + + + +the Domain Name in accordance with the terms of Exhibit B. + + 2 + + 2.5 Rebranding. If requested by theglobe, Boxlot shall implement on the Co-Branded Pages new versions of the Page Templates if theglobe changes the Page Templates across theglobe Site generally. Further, if requested by theglobe, Boxlot shall create additional branded versions of the Service and Co-Branded Pages branded with the branding of theglobe's distribution partners, which branded versions shall be implemented within 30 days and subject to approval in accordance with this Section 2. + + 2.6 Boxlot Content. Boxlot shall provide Boxlot Content to Users via the Co-Branded Pages, except that Boxlot shall deliver to theglobe those elements of Boxlot Content residing on theglobe's servers in accordance with the terms of Exhibit A. Unless otherwise directed by theglobe, the Co-Branded Pages shall include all of the content displayed on the Boxlot Site, and the Boxlot Content shall be updated to keep the Co-Branded Pages in parity with the Boxlot Site. Any nonconformance with the terms of the frequency/quantity columns of Exhibit A shall permit theglobe to terminate immediately if the breach is not cured within 12 hours. + + 2.7 Navigation. Boxlot shall not, in conjunction with the Service, use any interstitials, pop-up windows, other intermediate steps or any other technology or content which acts as a barrier to the transition of a User from theglobe Site to the Co-Branded Pages, nor shall Boxlot otherwise frame the Co-Branded Pages or use any other technology which interferes with or affects the page layout of such pages. All Co-Branded Pages shall link back to theglobe Site as specified by theglobe. + + 2.8 User Relations. Boxlot shall be responsible for providing all customer support regarding the Service or the Co-Branded Pages, and theglobe may redirect to Boxlot any associated customer support inquiries. Boxlot shall have sole control over the user agreement that governs the Service, and Boxlot shall have the sole responsibility for dealing with breaches of such user agreement. However, if theglobe has an issue with the user agreement or Boxlot's enforcement of it, the parties shall discuss such issues in good faith. Furthermore, Boxlot's privacy policy shall make any disclosures, or obtain any User consent, reasonably requested by theglobe that the parties believe are necessary to make the disclosures about Users back to theglobe required by this Agreement. All Users shall be treated at least as favorable in all respects (including without limitation with respect to pricing, quality of service, and customer support responsiveness) as Boxlot treats users of the Boxlot Site. + + 2.9 Database Synchronization. If requested by theglobe and if Boxlot captures relevant information, Boxlot shall use reasonable efforts to cooperate with theglobe to implement ways for theglobe to capture User information to the extent that such information would change the relevant information in theglobe's databases. + + 2.10 Promotions. Following the Launch Date, the parties shall conduct the promotions specified in Exhibit A. + +3. ADVERTISING. + + 3 + + 3.1 Ad Sales. theglobe shall have sole control over all advertising and promotion inventory on the Co-Branded Pages. Boxlot shall not introduce any advertising spots or third party branding in conjunction with the Co-Branded Pages or the Service without theglobe's approval. If, after theglobe (or its designee) uses commercially reasonable efforts to sell such inventory, there remains unsold inventory, then theglobe may, in its sole discretion, place house or barter ads in such inventory. + + 3.2 Ad Serving. theglobe or its designee shall be solely responsible for serving all advertisements and promotions in connection with the Co-Branded Pages. theglobe shall provide Boxlot with ad serving code, which Boxlot shall implement at its own expense on all Co-Branded Pages. theglobe hereby grants to Boxlot a nonexclusive license to use such code solely to permit theglobe or its designee to serve ads in connection with the Co-Branded Pages. Boxlot shall notify theglobe at least 15 days prior to making any changes that would affect serving ads on the Co-Branded Pages. + + 3.3 Boxlot Banners. Boxlot shall deliver to theglobe any Boxlot Banners which are to be run in accordance with this Agreement. Such banners shall comply with theglobe's then-current technical standards. The terms of any insertion order or similar document regarding the Boxlot Banners are expressly rejected, except to the extent that they specify the location, timing or duration of the display of the Boxlot Banners and such terms are accepted by theglobe. Unless mutually agreed otherwise, Boxlot Banners shall link to the Co-Branded Pages. theglobe may request that Boxlot Banners be co-branded with theglobe Marks, in which case the parties shall work together to develop a mutually acceptable implementation. theglobe may approve or reject any Boxlot Banner in its sole discretion. theglobe shall use commercially reasonable efforts not to run banners on the Co-Branded Pages for the companies enumerated on Exhibit C. Boxlot may update Exhibit C from time to time during the term; however: (a) Boxlot may not add any site or company to Exhibit C which is not reasonably considered to be in the online auctions business, and (b) if Boxlot adds any new sites or companies to Exhibit C, theglobe shall be entitled to complete any contractual obligations pursuant to contracts in place with such sites or companies at the time of addition. + +4. LICENSES AND STANDARDS. + + 4.1 Content. Boxlot hereby grants to theglobe a non-exclusive, worldwide license to use, reproduce, create derivative works of (only as necessary to build pages in a manner consistent with this Agreement), publicly display, publicly perform and digitally perform Boxlot Banners, and those elements of the Boxlot Content served from theglobe's servers (as denoted in Exhibit A), on theglobe Site or otherwise as reasonably appropriate to advertise and promote the Service and the Co-Branded Pages. Subject to the approval process in Section 2, theglobe hereby grants to Boxlot a non-exclusive, worldwide license to use, reproduce, create derivative works of (only as necessary to build Co- Branded Pages), publicly display, publicly perform and digitally perform the Page Templates on Co-Branded Pages. + + 4.2 Trademarks. Boxlot hereby grants to theglobe a non-exclusive license to use the Boxlot Marks (including the Domain Name if applicable) to advertise + +Source: THEGLOBE COM INC, S-1/A, 5/3/1999 + + + + + +and promote the Service. + + 4 + + theglobe hereby grants to Boxlot a non-exclusive license to use theglobe Marks (including the Domain Name if applicable) on the Co-Branded Pages. + + 4.3 Trademark Restrictions. The Mark owner may terminate the foregoing trademark license if, in its reasonable discretion, the licensee's use of the Marks tarnishes, blurs or dilutes the quality associated with the Marks or the associated goodwill and such problem is not cured within 10 days of notice of breach; alternatively, instead of terminating the license in total, the owner may specify that certain licensee uses may not contain the Marks. Title to and ownership of the owner's Marks shall remain with the owner. The licensee shall use the Marks exactly in the form provided and in conformance with any trademark usage policies. The licensee shall not take any action inconsistent with the owner's ownership of the Marks, and any benefits accruing from use of such Marks shall automatically vest in the owner. The licensee shall not form any combination marks with the other party's Marks other than the Domain Name (if applicable). If the Domain Name is deemed a combination mark, neither party shall use the Domain Name for any purpose except as expressly provided herein or attempt to register the Domain Name, and the parties will jointly cooperate on any enforcement action of infringement of the Domain Name. + + 4.4 Ownership. As between theglobe and Boxlot: (a) theglobe and its suppliers retain all rights, title and interest in and to all intellectual property rights embodied in or associated with the Page Templates, and (b) Boxlot and its suppliers retain all rights, title and interest in and to all intellectual property rights embodied in or associated with the Boxlot Content, Boxlot Banners and Boxlot Marks. There are no implied licenses under this Agreement, and any rights not expressly granted to a licensee hereunder are reserved by the licensor or its suppliers. Neither party shall exceed the scope of the licenses granted hereunder. + + 4.5 Standards. Boxlot shall not provide Boxlot Banners or Boxlot Content, and theglobe shall not provide to Boxlot any Page Templates, that: (a) infringe any third party's intellectual property right or right of publicity or privacy; (b) violate any law or regulation; (c) are defamatory, obscene, harmful to minors or child pornographic; (d) contain any viruses, trojan horses, worms, time bombs, cancelbots or other computer programming routines that are intended to damage, detrimentally interfere with, surreptitiously intercept or expropriate any system, data or personal information; or (e) are materially false, inaccurate or misleading. + +5. USER DATA. + + 5.1 Rights/Restrictions. Except as specified in this section, each party may freely use and disclose any information (both individual and aggregated) about Users ("User Data"). Neither party shall disclose any User Data in any manner that permits the User Data to be associated with the other party or permits the targeting of Users on the basis of their status as Users (in theglobe's case) or theglobe users (in Boxlot's case), nor shall a party use the User Data to target Users on the basis of their status as Users (in theglobe's case) or theglobe users (in Boxlot's case). However, either party may disclose User Data if it is aggregated (in a non-associatable way) with data from multiple online properties. Each party shall use and disclose User Data only in accordance with the privacy policy under which it was collected. + + 5 + + 5.2 Delivery to theglobe. Boxlot shall deliver to theglobe all information about Users who register with Boxlot on the Co-Branded Pages that Boxlot collects from its registration process. Such information shall be delivered weekly in an electronic format specified by theglobe using a process reasonably specified by theglobe. + +6. PAYMENT TERMS. + + 6.1 Payments. The parties shall make the payments described in Exhibit A. Overdue payments shall accrue interest, at the lesser of 1 1/2% per month or the maximum allowable interest under applicable law, from due date until paid, and the owing party shall pay the owed party's costs of collection (including reasonable attorneys' fees). + + 6.2 Taxes. All fees and payments stated herein exclude, and the party making payment shall pay, any sales, use or other tax related to the parties' performance of their obligations or exercise of their rights under this Agreement, exclusive of taxes based on the receiving party's net income. + + 6.3 Audit Rights. A party obligated to make payments hereunder shall keep for 3 years proper records and books of account relating to the computation of such payments. Once every 12 months, the party receiving payment or its designee may inspect such records to verify reports. Any such inspection will be conducted in a manner that does not unreasonably interfere with the inspected party's business activities. The inspected party shall immediately make any overdue payments disclosed by the audit plus applicable interest. Such inspection shall be at the inspecting party's expense; however, if the audit reveals overdue payments in excess of 5% of the payments owed to date, the inspected party shall immediately pay the cost of such audit, and the inspecting party may conduct another audit during the same 12 month period. + +7. REPORTS. + + 7.1 By theglobe. Within 30 days following the end of each month, theglobe shall provide Boxlot with its standard reports regarding theglobe's promotions hereunder and reports on the computation of Net Revenues. + + 7.2 By Boxlot. In addition to any other reports specified herein, Boxlot shall provide to theglobe the following reports: (a) daily usage reports regarding the Co-Branded Pages describing the number of page impressions, number of Users and such other information as Boxlot generally provides to its other similar partners, (b) weekly demographic reports regarding the Service containing summary information regarding user demographic profiles, and (c) if applicable, within 30 days following the end of each month, reports regarding the computation of the fees it owes under Section 6. + + In addition to the foregoing, as soon as commercially reasonable (but in no event later than 6 months following the Launch Date), Boxlot (with assistance as + +Source: THEGLOBE COM INC, S-1/A, 5/3/1999 + + + + + +necessary from theglobe) shall deliver reports to theglobe about individual registered Users on the Co-Branded Pages when the User bids on an item, purchases an item, lists an item for sale and successfully sells an item. The report shall be broken down into at least the following categories: the User's unique UserID + + 6 + + number assigned by theglobe, the action being logged (bid, purchase, list, sale), the date and time of the event, and the topic/category in which the event occurred. Such reports shall be provided to theglobe on at least a monthly basis in an electronic format that is easily decoded in an automated manner for import into theglobe's statistics database, and the file shall be a delimited text file with each line corresponding to an event and including the information outlined above. + +8. TERM AND TERMINATION. + + 8.1 Term. This Agreement will become effective on the Effective Date and will continue in effect for 2 years following the Launch Date. + + 8.2 Termination for Failure to Perform. By providing written notice, a party may immediately terminate this Agreement: (a) if the other party materially breaches this Agreement and fails to cure that breach within 15 days after receiving written notice of the breach, or (b) as provided in Sections 2.6 [Boxlot Content] or 12.7 [Force Majeure] or Exhibit B. In addition, by providing written notice, theglobe may immediately terminate this Agreement, or at its option immediately suspend its promotion and other efforts hereunder, in the case of Boxlot's breach of Section 12.1 [Compliance with Laws]. + + 8.3 Termination for Change of Control. By providing written notice, theglobe may terminate this Agreement in its sole discretion if one of the following companies (or their subsidiaries) does an "Ownership Change Event": Lycos, Yahoo (including GeoCities, which shall be included even if their proposed merger does not occur), Xoom, Fortune City, Excite, Go Network (including Disney and Infoseek), Snap! (including NBC) and AOL. An "Ownership Change Event" means: (x) the acquisition of 50% or more of Boxlot's equity or voting interests; (y) a merger or consolidation of Boxlot; or (z) the sale, exchange or transfer of all or substantially all of Boxlot's assets related to the Service. + + 8.4 Termination for Changes. By providing written notice, theglobe may terminate this Agreement in its sole discretion if: (a) Boxlot's business model changes such that the Service is no longer Boxlot's primary line of business, or (b) at the one year anniversary of the Launch Date, the Service is significantly inferior to the comparable services being offered by the market leaders in the person to person auction space. + + 8.5 Termination for Failure to Grow. By providing written notice, Boxlot may immediately terminate this Agreement if theglobe's registered user base has not increased by *** users by the 1 year anniversary of the Effective Date. + + 8.6 Effects of Termination. Upon expiration or termination, all licenses granted hereunder shall terminate unless such licenses are expressly stated as surviving. Boxlot shall promptly remove all theglobe Marks and Page Templates from its servers, and theglobe shall promptly remove all Boxlot Marks, Boxlot Banners and Boxlot Content from its servers. Sections 1, 4.4 [Ownership], 5.1 [Rights/Restrictions], 6.2 [Taxes], 6.3 [Audit Rights], 8.6 [Effects of Termination], 9, 10, 11 and 12.2 [Governing Law] to 12.9 [Entire Agreement; Waiver], and any obligation to pay any owed but unpaid amounts, shall survive any expiration or termination. + + 7 + + In addition, Boxlot acknowledges that the placement fees set forth in Exhibit A were intended to be *** in year 1 and *** in year 2, even though theglobe has agreed to extend credit terms to Boxlot by allowing Boxlot to pay over time. Thus, in the event that this Agreement terminates under Section 8.2 [Termination for Failure to Perform] due to Boxlot's failure to perform (excluding the cross-reference to Section 12.7 [Force Majeure]) prior to the end of the applicable year, Boxlot shall immediately pay to theglobe the amount necessary to pay the total year's placement fee for that year. Boxlot waives any right to assert that the foregoing fee is a liquidated damage or a penalty. + +9. NO WARRANTIES. EACH PARTY PROVIDES ALL MATERIALS AND SERVICES TO THE OTHER PARTY "AS IS." EACH PARTY DISCLAIMS ALL WARRANTIES AND CONDITIONS, EXPRESS, IMPLIED OR STATUTORY, INCLUDING WITHOUT LIMITATION THE IMPLIED WARRANTIES OF TITLE, NON-INFRINGEMENT, MERCHANTABILITY, AND FITNESS FOR A PARTICULAR PURPOSE. Each party acknowledges that it has not entered into this Agreement in reliance upon any warranty or representation except those specifically set forth herein. Unless an approval process is specified herein, all deliverables provided by one party to the other shall be deemed accepted (for purposes of the UCC) when delivered. + +10. INDEMNITY. Each party (the "Indemnifying Party") shall indemnify the other party (the "Indemnified Party") against any and all claims, losses, costs and expenses, including reasonable attorneys' fees, which the Indemnified Party may incur as a result of claims in any form by third parties arising from: (x) the Indemnifying Party's acts, omissions or misrepresentations to the extent that the Indemnifying Party is deemed an agent of the Indemnified Party, or (y) the Indemnifying Party's breach of its privacy policy. In addition, theglobe shall indemnify Boxlot against any and all claims, losses, costs and expenses, including reasonable attorneys' fees, which Boxlot may incur as a result of claims in any form by third parties arising from the Page Templates or theglobe Marks. In addition, Boxlot shall indemnify theglobe against any and all claims, losses, costs and expenses, including reasonable attorneys' fees, which theglobe may incur as a result of claims in any form by third parties arising from Boxlot Banners, Boxlot Content, Boxlot Marks, the Service (excluding the Page Templates or theglobe Marks) or Boxlot's breach of Section 12.1 [Compliance with Laws]. The foregoing obligations are conditioned on the Indemnified Party: (i) giving the Indemnifying Party notice of the relevant claim, (ii) cooperating with the Indemnifying Party, at the Indemnifying Party's expense, in the defense of such claim, and (iii) giving the Indemnifying Party the right to control the defense and settlement of any such claim, except that the Indemnifying Party shall not enter into any settlement that affects the Indemnified Party's rights or interest without the Indemnified Party's prior written approval. The Indemnified Party shall have the right to participate in the defense at its expense. + +11. LIABILITY LIMITS. NEITHER PARTY SHALL BE LIABLE FOR LOST PROFITS OR SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES (HOWEVER ARISING, INCLUDING + +Source: THEGLOBE COM INC, S-1/A, 5/3/1999 + + + + + +NEGLIGENCE) ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT, EVEN IF THE PARTIES ARE AWARE OF THE POSSIBILITY OF SUCH DAMAGES. + +EXCEPT IN THE EVENT OF A CLAIM UNDER SECTION 10 OR FAILURE TO PAY UNDER SECTION 6, IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE + + 8 + + OTHER PARTY IN AN AMOUNT GREATER THAN THE AMOUNT BOXLOT ACTUALLY PAYS TO THEGLOBE HEREUNDER. + +12. GENERAL. + + 12.1 Compliance with Laws. At its own expense, Boxlot shall comply with all applicable laws and regulations regarding providing and operating the Service. Without limiting the foregoing, Boxlot shall (a) obtain all governmental approval, permits and licenses, and make all governmental filings and registrations, necessary for the marketing and performance of the Service in every United States jurisdiction, (b) ensure that theglobe is not required to obtain any governmental approval, permits or licenses as a result of this Agreement, theglobe's performance hereunder or any payments made to theglobe hereunder, and (c) promptly resolve any assertions that the Service is illegal or violating a protected third party interest. + + 12.2 Governing Law. This Agreement will be governed and construed in accordance with the laws of the State of New York without giving effect to conflict of laws principles. Both parties submit to personal jurisdiction in New York and further agree that any cause of action arising under this Agreement shall be brought in a court in New York City, NY. + + 12.3 Publicity. Prior to the release of any press releases or other similar promotional materials related to this Agreement, the releasing party shall submit a written request for approval to the other party with a copy of the materials to be released, which request shall be made no less than 3 business days prior to the requested release date. A party shall not unreasonably withhold or delay the granting of its approval of such materials. The parties shall issue the first press release jointly. + + 12.4 Independent Contractors. The parties are independent contractors, and no agency, partnership, franchise, joint venture or employment relationship is intended or created by this Agreement. Neither party shall make any warranties or representations on behalf of the other party. + + 12.5 Assignment. Neither party may assign its rights or delegate its duties hereunder (except to an affiliated company, or to a successor in interest in the event of a merger, sale of assets of the business to which this Agreement is related, or consolidation) without the other party's prior written consent, and any purported attempt to do so is null and void. + + 12.6 Severability; Headings. If any provision herein is held to be invalid or unenforceable for any reason, the remaining provisions will continue in full force without being impaired or invalidated in any way. The parties agree to replace any invalid provision with a valid provision that most closely approximates the intent and economic effect of the invalid provision. Headings are for reference purposes only and in no way define, limit, construe or describe the scope or extent of such section. + + 12.7 Force Majeure. Except as otherwise provided, if performance hereunder (other than payment) is interfered with by any condition beyond a party's reasonable control, the affected party, upon giving prompt notice to the other party, shall be excused from such performance to + + 9 + + the extent of such condition. However, if a force majeure detrimentally affects a party's performance of a material covenant hereunder for 14 days or more, the other party can terminate this Agreement. Each party acknowledges that website operations may be affected by numerous factors outside of a party's control. In the case of Boxlot's performance, a Boxlot force majeure includes theglobe's failure to perform its obligations described in this Agreement or an outage that affects the entire Internet in the United States; however, in no event shall a failure of any Boxlot supplier or vendor be deemed a Boxlot force majeure. + + 12.8 Notice. Any notice under this Agreement will be in writing and delivered by personal delivery, overnight courier, confirmed facsimile, confirmed email, or certified or registered mail, return receipt requested, and will be deemed given upon personal delivery, 1 day after deposit with an overnight courier, 5 days after deposit in the mail, or upon confirmation of receipt of facsimile or email. Notices will be sent to a party at its address set forth above or such other address as that party may specify in writing pursuant to this Section. + + 12.9 Entire Agreement; Waiver. This Agreement sets forth the entire understanding and agreement of the parties, and supersedes any and all oral or written agreements or understandings between the parties, as to the subject matter of the Agreement. This Agreement may be changed only by a writing signed by both parties. The waiver of a breach of any provision of this Agreement will not operate or be interpreted as a waiver of any other or subsequent breach. + + 12.10 Equity Stake. Boxlot shall grant to theglobe, pursuant to industry- standard terms negotiated between the parties in good faith, immediately vested options to purchase shares of common stock equal to up to 4% of Boxlot's fully diluted capital stock (in accordance with the chart below). Theglobe shall be restricted from exercising such options until the first anniversary of the Effective Date, and such options shall have a five-year term. Each such option shall have an exercise price equal to the lesser of (1) the price at which Boxlot's common stock is sold to the public in an initial public offering or (2) $6 per share; each of the foregoing as may be adjusted for any stock splits, combinations or re-organizations affecting Boxlot's capital stock. Boxlot shall grant to theglobe registration rights for such options and any shares of common stock issued or issuable upon the exercise of such options (including without limitation, two demand registration rights and unlimited piggyback registration rights) on Form S-1, Form S-3 or such other form as may be applicable pursuant to the Securities Act of 1933 as amended. + +- ------------------------------------------------------------------------------------------------------------------ + +Source: THEGLOBE COM INC, S-1/A, 5/3/1999 + + + + + + Number of aggregate unique users, as measured by Aggregate percent of Boxlot's equity subject to the unique IP addresses, in a month who visit a page options upon achieving such level once under the Domain Name - ------------------------------------------------------------------------------------------------------------------ 500,000 1% - ------------------------------------------------------------------------------------------------------------------ 1,000,000 2% - ------------------------------------------------------------------------------------------------------------------ 1,500,000 3% - ------------------------------------------------------------------------------------------------------------------ 1,750,000 3.5% - ------------------------------------------------------------------------------------------------------------------ 2,000,000 4% - ------------------------------------------------------------------------------------------------------------------ + + 10 + + THEGLOBE.COM, INC.: THE BOXLOT COMPANY: + +By: /s/ Dean Daniels By: /s/ Frederick Cary + +Name: Dean Daniels Name: Frederick Cary + +Title: COO Title: CEO + + 11 + + EXHIBIT A BUSINESS TERMS + +Description of the Service: person-to-person auctions + +Description of Boxlot Content: + +*** + +Domain Name for the Co-Branded Pages: auctions.theglobe.com + +theglobe's Promotions. In positions determined by theglobe in its sole discretion, theglobe shall: + + . list "Classifieds/Auctions" in the tools category of the left hand nav bar . list auctions in relevant theme areas . list auctions in myglobe [Note: this will be done when commercially reasonable to do so some time after the Launch Date] . list auctions in shop.theglobe.com + +theglobe may provide substitute placement if theglobe changes or reorganizes its site or navigation/directory structure. theglobe shall provide a minimum of *** impressions per month of promotion for auctions on the Co-Branded Pages (including without limitation any of the foregoing). theglobe's sole and exclusive obligation for failing to deliver the minimum number of impressions shall be to continue performing the promotion until it delivers the total number of required impressions. + +Boxlot's Promotions. theglobe may place up to 100 listings a month on the Boxlot Site (and all co-branded versions thereof) promoting products being sold by theglobe or its affiliates without having to pay any listing fee, closing value fee, transaction fee or other fee. + +theglobe Pre-Launch Deliverables: In addition to developing the Page Templates, theglobe shall provide to Boxlot a media and promotional plan and a plan for doing the production/design services related to the Service's integration into theglobe Site. + +PAYMENTS + + . *** + + . Placement Fee. The following schedule of payments apply: + + - ------------------------------------------------------------------------------------------------------------------ Time of Payment Amount of Payment - ------------------------------------------------------------------------------------------------------------------ Execution *** - ------------------------------------------------------------------------------------------------------------------ Launch Date *** - ------------------------------------------------------------------------------------------------------------------ 1st monthly anniversary of Launch Date *** - ------------------------------------------------------------------------------------------------------------------ 2nd monthly anniversary of Launch Date *** - ------------------------------------------------------------------------------------------------------------------ + + 12 + + 3rd monthly anniversary of Launch Date *** - ------------------------------------------------------------------------------------------------------------------ 4th monthly anniversary of Launch Date *** - ------------------------------------------------------------------------------------------------------------------ 5th monthly anniversary of Launch Date *** - ------------------------------------------------------------------------------------------------------------------ 6th monthly anniversary of Launch Date *** - ------------------------------------------------------------------------------------------------------------------ 7th monthly anniversary of Launch Date *** - ------------------------------------------------------------------------------------------------------------------ 8th monthly anniversary of Launch Date *** - ------------------------------------------------------------------------------------------------------------------ 9th monthly anniversary of Launch Date *** + +Source: THEGLOBE COM INC, S-1/A, 5/3/1999 + + + + + +- ------------------------------------------------------------------------------------------------------------------ 10th monthly anniversary of Launch Date *** - ------------------------------------------------------------------------------------------------------------------ 11th monthly anniversary of Launch Date *** - ------------------------------------------------------------------------------------------------------------------ Each monthly anniversary thereafter (excluding the *** final monthly anniversary (e.g., the last day of the contract)) - ------------------------------------------------------------------------------------------------------------------ + + . Ad Split. theglobe shall pay Boxlot *** of Net Revenues. + + . Transactional Revenue. Boxlot shall retain *** of the transaction revenues it generates from operation of the Service. + + 13 + + EXHIBIT B PERFORMANCE STANDARDS + +A. Service Availability. The Service generally shall be publicly available to Users a minimum of 95% of the time during any 7 day period and 98% of the time during any 30 day period, excluding "Maintenance." Maintenance is defined as scheduled Service outages for Service maintenance or upgrades of which theglobe is notified at least 48 hours in advance, so long as such outages are scheduled for low-usage time periods and do not exceed a total of 20 hours in any 30 day period. + +B. Response Time. The mean response time for server response to access the Service shall not exceed more than 6 seconds during any 1 hour period. + +C. Bandwidth. Throughout the term, Boxlot shall have an agreement in place with its Internet connectivity provider which requires such provider to automatically increase bandwidth capacity if such capacity exceeds 25% utilization. + +D. Security. Boxlot shall prevent unauthorized access to restricted areas of its servers and any databases or other sensitive material generated from or used in conjunction with the Service. In addition, Boxlot shall immediately notify theglobe of any known security breaches or holes in the Service or Co-Branded Pages. + +E. Error Correction. Boxlot shall resolve any errors with the Service (including without limitation any Javascripts or ActiveX controls used in connection with such pages) that cause such services not to be able to perform one or more major functions within 24 hours of the earlier of its discovery of the error or theglobe's notice of the error. Boxlot shall resolve all other errors with such services within 7 days of the earlier of its discovery of the error or theglobe's notice of the error. + +F. Browser Compatibility. The Service shall initially be compatible with Netscape Navigator 3.X and 4.X and Microsoft Internet Explorer 3.X and 4.X. theglobe may unilaterally add additional browsers or versions that the Service must be compatible with, effective after 30 days advance written notice, if theglobe certifies that such additional browsers or versions are used by more than 5% of its Users. Users shall not require any plug-ins in order to access any Service functionality. + +G. Data Authentication. Boxlot shall use commercially reasonable efforts, no less than industry-standard, to authenticate the origin of all information provided by theglobe as having come from theglobe. + +H. Customer Support. Boxlot shall auto-respond to all customer and technical support inquiries within 10 minutes of the receipt of inquiry. Boxlot shall manually respond to all such inquiries within 24 hours. Boxlot shall resolve all such inquiries within 72 hours or shall notify theglobe that it cannot do so, in which case theglobe at its sole discretion may intervene to assist in resolving the inquiry. + +I. Remedies. In addition to other applicable remedies, theglobe may immediately terminate this Agreement without a further cure period if: (a) any breach of this Exhibit lasts 2 consecutive specified time periods, or if no time period for measurement is specified, 10 days, or (b) the same provision is breached on two separate occasions (even if the first was cured). + + 14 + + EXHIBIT C BOXLOT COMPETITIVE SET + +aciauction Auction 123 Auction Net Online Auction Network Auction Online Auction Sales Online Auction Universe Auction USA Auction Warehouse Auction World AuctionAddict AuctionFloor AuctionGate AuctionInc. AuctionLine AuctionPC AuctionPort-Interactive Online Auctions Auctionsamerica Auctionware Technologies AuctionWorks AuctionX Autographs...and more! B2BAuction BargainsUSA Bid on Collectibles + +Source: THEGLOBE COM INC, S-1/A, 5/3/1999 + + + + + +Bid Online Bid4it BidAway Web Auctions Biddernet Bidders Paradise BidderSuite bidnask.com Bidnow Boekhout's Collectibles Mall Buck Auction Butterfield & Butterfield Central Missouri Internet Auction Christie's CityAuction Classifieds Live CoinTrade Online CommPublic Online Consultants Research Institute CSL Associates Online Auction for Pearls Dan's Online Auction DealDeal Deep Discount Network Digitalauction eBay + + 15 + + Electronic Auction Encore E-Z Auction FairAuction FinalBid Internet Auction Service First Auction FocalPoint Online Photo Auction Foryourneeds Fun Time Auction G.B. Tate & Sons Online Auction GEMS AUCTION Gifts and More Online Auction Glenn Johnson Coins Going Going Sold Going Once Going, Going...Sold! Golden Age Antiques and Collectibles Golf Auction GolfClubExchange GolfWeb GolfAuction Haggle Online Hobby Markets Online Human Digital Auction Infinite Auction Insight Corp Auction Interactive Auction Online interAUCTION Services Intermodal Equipment Exchange International Electronic Auction Internet Auction House Internet Liquidators Int IWA Auction House John Morelli Auctioneers Keybuy Auction House Klik-Klok Dutch Auction Labx Lightningauctions Magnolia Auction Metric Equipment Sales ML Coins Motherlode Gold Auction Nab-it National Auction Properties, Inc. Nationwide Dealer Exchange Netauction Netauctions NetMarket Nettworth NonProfitAuction Northerbys Online Auctions Numisma Online Coin Auctions Numismatists Online Coin Auctions Old Auction Barn OneWebPlace Online Auction Services + + 16 + + OnLine Exchange ONSALE Interactive Marketplace Paulus Swaen Internet Auction PC Buyer Philatelists Online Prizefight ProAuctions RacerX Remington York Online Auction Rotman Collectibles Sandafayre Sandy's Super Auction Save the Earth Foundation ArtRock Auction Scala-Mathis Auctions, Inc. SCC Exchange Southeast Auction Company Sotheby's Sportsauctionsusa Steal-a-Record Auction Super Auction Superior Coin & Stamp Auction Galleries SurplusAuction Teletrade The Auction Block The Auction Store + +Source: THEGLOBE COM INC, S-1/A, 5/3/1999 + + + + + +The Sell And Trade Internet Marketplace TIME MACHINE....Silent Watch Auction u-Auction-it uBid Universe Auctions University of Michigan AuctionBot Up4Sale USAuctions USCents VintageUSA Direct Auction WebAuction Wild Auction World Wide Auctions Yahoo Auction ZAuction 1st Sporting Equipment Auction 3WAuction + + 17 + + EXHIBIT D AUTOMATIC PARTNER REGISTRATION To maintain a consistent user experience, any theglobe member should not need to separately log in to the Service or the Co-Branded Pages. The only login or registration that should be required to access the Service or the Co-Branded Pages is theglobe Site's login or registration. Because Boxlot hosts the Service and the Co-Branded Pages, theglobe will pass to Boxlot information about each User accessing the Service or the Co-Branded Pages as described below: + + . Accounts will be created for each User via a one-time "welcome" page (hosted by theglobe) when the User tries to access the portion of the Service requiring such registration for the first time. + + . The "welcome" page will include registration fields for any information about the User needed to use the Service but not currently in theglobe's database. + + . The "welcome" page will include a "Privacy Policy" informing the User that their data is being passed to a third party (Boxlot) in order to use the Services. + + . Any additional required User information is collected and entered into theglobe's database. Then, the required User information is sent to Boxlot all at once to create the new account. theglobe will include the User's "username" and "UserID#" in the data passed to Boxlot. + +Additional notes on account creation: + + . The User will only see the "Welcome" page until they consent to the privacy policy and enter any required information. This page will not appear after the User completes the initial account creation process. + + . Account information stored on Boxlot's servers in connection to the Service will need to be kept in parity with theglobe. To do so, the parties shall work together to implement a mechanism for updating information on Boxlot's servers when User information changes on theglobe Site. + + . The technology used to pass the data to Boxlot for account creation and ongoing account updates will be determined jointly by Boxlot and theglobe. + + . The UserID# theglobe passes to Boxlot during account creation will be stored by Boxlot in association with each User. This UserID# is necessary to link individual user reporting and individual account updates between Boxlot and theglobe on an ongoing basis. + + 18 + +Source: THEGLOBE COM INC, S-1/A, 5/3/1999 \ No newline at end of file diff --git a/full_contract_txt/ThriventVariableInsuranceAccountB_20190701_N-6_EX-99.D(IV)_11720968_EX-99.D(IV)_Endorsement Agreement.txt b/full_contract_txt/ThriventVariableInsuranceAccountB_20190701_N-6_EX-99.D(IV)_11720968_EX-99.D(IV)_Endorsement Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..326bfb52072a757cb7daca2884bd5148b5790c3d --- /dev/null +++ b/full_contract_txt/ThriventVariableInsuranceAccountB_20190701_N-6_EX-99.D(IV)_11720968_EX-99.D(IV)_Endorsement Agreement.txt @@ -0,0 +1,99 @@ +ENDORSEMENT + +Contract Number: ENDORSEMENT + +Effective Date: July 1, 2019 + +Thrivent Life Insurance Company has been dissolved. (Thrivent Life Insurance Company was formerly known as Lutheran Brotherhood Variable Insurance Products Company.) All assets and related liabilities of Thrivent Life Insurance Company have been transferred to Thrivent Financial for Lutherans. That includes contracts of insurance, separate accounts, and cash and investment securities. Thrivent Financial for Lutherans now has all obligations under this contract. It is the same as if Thrivent Financial for Lutherans had originally issued the contract. All references to "Thrivent Life Insurance Company" are amended to read "Thrivent Financial for Lutherans." All benefits and other terms of this contract remain unchanged except as described below. + +You may direct inquiries to: + +Thrivent Financial for Lutherans 4321 N. Ballard Road Appleton, WI 54919-0001 (800) 847-4836 + +The following amendments apply in lieu of any contract provisions to the contrary. + +The following provisions are included as part of this contract: + +MAINTENANCE OF SOLVENCY. This provision applies only to benefits provided through the General Account. If the solvency of the Society becomes impaired, you may be required to make an extra payment. The Board of Directors will determine the amount of any extra payment. It will be based on each member's fair share of the deficiency. You may make the extra payment by an equivalent reduction in benefits or by a payment in cash. If you do not make the extra payment within 60 days from the date we notify you of your share of the deficiency, the amount will be charged as an indebtedness against the contract with interest compounded at the rate of 5% per year. + +MEMBERSHIP. The person(s) named as the Insured(s) or the Annuitant(s) is a benefit member of the Society. Rights and privileges of membership are set forth in the Articles of Incorporation and Bylaws of the Society. These rights and privileges are separate from the ownership of this contract. + +DIVIDENDS. Each year, we will determine our divisible surplus. This contract's share, if any, will be credited as a dividend. Since we do not expect this contract to contribute to divisible surplus, it is not expected that any dividends will be credited. + +DIVIDEND OPTIONS. If dividends are credited after premiums can no longer be paid under this contract, dividends will be paid in cash. Otherwise, dividends will be applied under the Payment of Premium option unless the Cash option has been chosen in writing. + +Cash. Dividends are paid in cash. + +Payment of Premium. Dividends are applied as payment of a Net Premium. VB-TL-TFFL (18) page TL-1 @TL18#AA + +Source: THRIVENT VARIABLE INSURANCE ACCOUNT B, N-6, 7/1/2019 + + + + + +Contract Number: ENDORSEMENT (continued) + +The following provisions of this contract are amended: + +DEFINITIONS + +The DEFINITIONS section of the contract is amended to include the following: + +Service Center. Where this contract is administered. Our Service Center address is 4321 North Ballard Road, Appleton, WI 54919-0001. + +And in the DEFINITIONS section, the definition: + +We, Our, Us. Lutheran Brotherhood Variable Insurance Products Company. + +Which previously was amended to read: + +We, Our, Us. Thrivent Life Insurance Company. + +Is amended to read: + +We, we, Our, our, Us, us, Society. Thrivent Financial for Lutherans. + +ENTIRE CONTRACT + +In the ENTIRE CONTRACT section, the first phrase and numbered list are amended to read: + +The Entire Contract consists of: 1) This contract including any attached riders, amendments, or endorsements; 2) The Application attached to this contract; and 3) The Articles of Incorporation and Bylaws of the Society and all amendments to them. Benefits will not be reduced or eliminated by any future amendments to our Articles of Incorporation or Bylaws. + +ASSIGNMENT + +The ASSIGNMENT section is amended to include the following: + +You may transfer ownership of this contract in accordance with our bylaws. Society membership rights and privileges cannot be transferred or assigned. VB-TL-TFFL (18) page TL-2 + +Source: THRIVENT VARIABLE INSURANCE ACCOUNT B, N-6, 7/1/2019 + + + + + +Contract Number: ENDORSEMENT (continued) + +The following words or phrases in this contract are amended as follows. Any reference to: Is amended to read: + +Thrivent Life Insurance Company Thrivent Financial for Lutherans + +the Company the Society + +the company. the Society + +A Stock Life Insurance Company. A Fraternal Benefit Society + +625 Fourth Avenue South. 4321 North Ballard Road Minneapolis, MN 55415 Appleton, WI 54919-0001 + +Minneapolis, MN Appleton, WI + +Home Office. Service Center + +Nonparticipating Eligible for annual dividends Signed for Thrivent Financial for Lutherans + +President + +Secretary VB-TL-TFFL (18) page TL-3 + +Source: THRIVENT VARIABLE INSURANCE ACCOUNT B, N-6, 7/1/2019 \ No newline at end of file diff --git a/full_contract_txt/TodosMedicalLtd_20190328_20-F_EX-4.10_11587157_EX-4.10_Marketing Agreement_ Reseller Agreement.txt b/full_contract_txt/TodosMedicalLtd_20190328_20-F_EX-4.10_11587157_EX-4.10_Marketing Agreement_ Reseller Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..1da9e3d27be960af25b5339b1169cf774b0e92a5 --- /dev/null +++ b/full_contract_txt/TodosMedicalLtd_20190328_20-F_EX-4.10_11587157_EX-4.10_Marketing Agreement_ Reseller Agreement.txt @@ -0,0 +1,131 @@ +Exhibit 4.10 MARKETING AND RESELLER AGREEMENT (the "Agreement") THIS AGREEMENT is made and entered into this 20t h day of December 2018 (the "Effective Date"), by and between Todos Medical Ltd., a corporation organized and existing under the laws of the State of Israel, with an address at 1 Hamada St., Rehovot, Israel ("Todos") and Care G. B. Plus Ltd., a corporation organized and existing under the laws of the State of Israel, with an address at Rechov HaYasmin 50, Carmei Yosef, Israel (the "Reseller"). WHEREAS, Todos has developed and owns a proprietary blood screening test for the early detection of certain forms of cancer which consists of a Physician Kit (for collecting blood samples) and a Lab Kit (for separating plasma and mononuclear cells in the blood samples) which consists of an Isolation Kit and an Analysis Kit, all as more fully described on Exhibit A attached hereto (the "Products"), as well as a proprietary algorithm for the analysis of the blood samples data; and WHEREAS, the Reseller is interested in marketing, distributing, and reselling the Products to customers located in and taking delivery in the State of Israel, including the territory of the Palestinian Authority, (the "Territory" and the "Customers"), all in accordance with the terms set forth herein; NOW THEREFORE in consideration of the agreements, covenants, and conditions hereinafter set forth, the parties agree as follows: 1. Grant of Rights 1.1 Subject to the terms and conditions of this Agreement, Todos hereby grants the Reseller a non-sublicensable, non-transferable, exclusive right to distribute and sell the Products to Customers in the Territory; provided, however, that Reseller may sub-license or transfer its distribution rights to a subsidiary or affiliate of the Reseller. The Reseller shall have a right of first refusal to include within this Agreement any additional products developed, manufactured, or sold by the Company following the Effective Date that are not currently included in Exhibit A, and upon the exercise of such right, the term "Products" shall be expanded to mean such additional products as well. For purposes of clarity, the parties agree that upon Todos's development of a blood screening test for colon cancer, such product shall be added to this Agreement and included within the definition of "Products", subject to the Reseller and Todos agreeing on the commercial terms for such product, including the price. 1.2 The Reseller shall not market, distribute, or sell the Products, whether directly or indirectly, to customers outside of the Territory. This Section 1.2 is a fundamental provision of this Agreement. 1.3 Subject to Section 1.4 below, Todos shall not market, distribute, or sell the Products, whether directly or indirectly, to customers inside of the Territory in any manner other than through the Reseller. + +Source: TODOS MEDICAL LTD., 20-F, 3/28/2019 + + + + + +1.4 Notwithstanding the grant of exclusivity to the Reseller, nothing herein shall derogate from Todos's right to distribute the Products in the Territory for non-revenue producing purposes such as research, testing, evaluation, proof of concept, and clinical trials. 2. Exclusivity 2.1 The Reseller's exclusive right to market and sell the Products in the Territory is subject to the Reseller achieving the following milestones by the end of each year this Agreement is in effect (the "Annual Milestones"): Year Annual Milestone(s) Year 1 Not Applicable Each Year Thereafter The parties will agree at the beginning of the year on the Annual Milestone for such year 2.2 If the Reseller sells less than 50% of any year's Annual Milestone, Todos, in its sole discretion, may either (a) cancel the Reseller's exclusivity, and market, distribute, and sell the Products in the Territory directly or indirectly through other distributors and resellers, while leaving the Reseller with a non-exclusive right to distribute and sell the Products for the remainder of the term, or (b) terminate the Agreement upon one hundred eighty (180) days prior written notice, provided that the Reseller does not cure its failure to achieve 50% of the applicable year's Annual Milestone within the 180-day notice period. 3. Duties of Todos 3.1 Todos shall provide technical assistance and advice to support the Reseller's preparation of marketing materials, including technical sales literature, catalogs and the like, to be used in the Territory. 3.2 Todos shall provide the Reseller, at no charge, with initial training relating to the efficient use and operation of the Products as well as instruction regarding use of all associated equipment required to effectively carry out the TM-B1 and TM-B2 cancer screening tests. Additionally, Todos will provide the Reseller with training relating to the handling of all blood samples throughout the screening process, and any and all other training, guidance and support reasonably required to sell the Products in the Territory. 3.3 Todos shall provide the Reseller, at no charge, with technical support relating to the use of the Products. 3.4 Todos shall support the Reseller, at no charge, in providing Customers with scientific data supporting the efficacy of the Products. 3.5 Todos is responsible for obtaining AMAR approval from the Israeli Ministry of Health. 3.6 Todos shall comply with all relevant standards of quality assurance and shall ensure that the Products conform to all Israeli standards and certifications. + +2 + +Source: TODOS MEDICAL LTD., 20-F, 3/28/2019 + + + + + +3.7 Todos shall appoint a relationship manager, who shall serve as the primary point of contact with Reseller regarding all maters arising from the business relationship contemplated in this Agreement. 3.8 Todos shall be available for periodic meetings with the Reseller to discuss any issues arising in connection with this Agreement. 3.9 Todos shall fulfill with reasonable dispatch all orders received from the Reseller and accepted by Todos. 3.10 Todos shall refer to the Reseller all Product inquiries and sales opportunities in the Territory that come to the attention of Todos. 4. Duties of the Reseller 4.1 The Reseller shall use all commercially reasonable efforts to market, promote, distribute, and sell the Products to Customers in the Territory, and shall, on its own account, provide a trained and competent sales and marketing team for the efficient promotion and sale of the Products. The Reseller shall achieve the commercialization milestones by the dates set forth in the Commercialization Timetable attached hereto as Exhibit C. 4.2 The Reseller shall be responsible for preparing marketing materials, including technical sales literature, catalogs and the like, to be used in the Territory. All marketing materials shall be subject to the prior written approval of Todos. 4.3 Except for AMAR approval which is the responsibility of Todos, the Reseller shall be responsible for obtaining all necessary governmental, regulatory, and other permits and licenses required to distribute and sell the Products in Israel. Todos shall provide the Reseller with all required assistance in this matter in order to obtain the necessary licenses and permits. 4.4 The Reseller shall be responsible for setting up at least one laboratory in the Territory to support the assay protocol (the "Laboratory"), including the provision of a FTIR that is approved by Todos, as further described in Exhibit B. The Reseller shall obtain the prior approval of Todos for all lab equipment. The Reseller will contract with existing certified laboratories in Israel to obtain the blood samples data, subject to the approval by Todos of each such laboratory. 4.5 The Reseller shall be responsible for providing post-sale support services to Customers, and shall, on its own account, provide a trained and competent support team for the efficient support of the Products. The Reseller shall retain a medical doctor to assist with the provision of support services. 4.6 The Reseller shall run a fifty (50) patient pilot trial to evaluate the performance of the Laboratory and the Reseller's support team. 4.7 The Reseller shall follow Todos's protocols in dealing with or handling the Products, including the shipment of blood samples to the laboratory. + +3 + +Source: TODOS MEDICAL LTD., 20-F, 3/28/2019 + + + + + +4.8 The Reseller shall, in marketing, selling, and distributing the Products, not make any promises, representations, statements, warranties or guarantees on behalf of Todos or concerning the Products, except as are expressly authorized in writing by Todos. 4.9 The Reseller shall comply at all times with all applicable laws, rules, regulations, and industry standards relating to the storage, packaging, marketing, distribution, laboratory work, and sale of the Products in the Territory. 4.10 The Reseller shall appoint a relationship manager, who shall serve as the primary point of contact with Todos regarding all maters arising from the business relationship contemplated in this Agreement. Todos's relationship manager shall meet with Todo no less frequently than quarterly and provide a status report on the Reseller's commercialization efforts. In addition, the Reseller will promptly bring to the notice of Todos any information which it has or which it may receive in future which is likely to be of interest, benefit, or use to Todos in relation to both the marketing of the Products in the Territory and the future market requirements of Customers. 4.11 The Reseller shall provide Todos with feedback for a least one percent (1%) of the consumed tests, including providing the actual screening result (by a yearly base) of each test. 4.12 The Reseller shall not market, distribute, or sell any product that competes with Products, nor provide services to any direct competitor of Todos. 4.13 The Parties hereby declare and confirm their awareness to the fact that to the date of the signing of this Agreement, Todos has yet to sell a single Product and lacks any and all sales experience and/or knowledge of the matter. The Reseller shall act as a pioneer in the sales department and shall share with Todos all the sales experience and information it shall gather in order to help Todos' with its worldwide sales. 4.14 The Reseller shall be entitled to enter into agreements with its subsidiaries and affiliates to act as sub-distributors and/or selling agents of the Products in the Territory. 4.15 The Reseller herby declares its awareness that Todos has not yet acquired the required AMAR approval for distribution of the Products in the Territory nor FDA approval. 5. Ordering, Pricing, and Payment Procedures 5.1 Non-Binding Forecasts. On the first day of each calendar quarter, the Reseller will provide Todos with a non-binding rolling weekly forecast of the Reseller's estimated Product purchase requirements over the upcoming six months (the "Forecasts"). 5.2 Orders. From time to time as needed, the Reseller shall provide Todos with firm purchase orders for the Products. Each purchase order shall include the name and address of the Customer. All orders are subject to written acceptance by Todos, which acceptance shall be provided unless the order contains terms that differ from the terms set forth in this Agreement. 5.3 Product Price. The Reseller shall be entitled to purchase the Products from Todos for resale to Customers at a price between US$[ ] and US$[ ], with the actual price to be agreed upon by the Parties (the "Product Price"). At the end of each year this Agreement is in effect, the Parties will discuss each party's costs and whether to revise the Product Price. Todos shall provide the Reseller with Products for clinical trials at no charge. + +4 + +Source: TODOS MEDICAL LTD., 20-F, 3/28/2019 + + + + + +5.4 Lead Time. The lead time for each Lab Kit is three (3) months, and the lead time for each Physician Kit is one month, provided that Reseller's order for the Products does not deviate from the applicable Forecast by more than ten percent (10%). 5.5 Delivery. Todos shall ship ordered Products to the Reseller within ninety (90) days of Todos's acceptance of the applicable purchase order DAP Reseller's warehouse (Incoterms 2010), provided that Reseller's order for the Products does not deviate from the applicable Forecast by more than ten percent (10%). 5.6 Todos shall provide the Reseller with the screening results and analysis of each customer blood sample data sent to Todos within one business day of receiving the blood sample data. 5.7 Payment for Products. Todos shall invoice the Reseller for all sums due for Products ordered upon shipment of the ordered Products to the Reseller, and the Reseller shall pay such sums by no later than thirty (30) days from the date of shipment. All payments made to Todos shall be in New Israeli Shekels. 5.8 Taxes. Reseller shall be responsible for paying all sales, use, excise, and value-added taxes imposed on the sale or use of the Products. 6. Reporting and Audit Rights 6.1 Books and Records. During the term and for a period of three (3) years following the termination or expiration of this Agreement, the Reseller shall maintain complete books of accounts and records consistent with sound business and accounting principles and practices consistently applied. 6.2 Quarterly Reports. Within fifteen (15) days of the end of each quarter, the Reseller shall provide Todos with a written report of (a) the quantities of Products distributed, sold, or otherwise transferred; the prices at which the Products were sold; and payments received therefore; and (b) the identity and location of all Customers to whom Products were sold, during the preceding quarter (each a "Quarterly Report"). 6.3 Audits. Todos shall have the right to have an inspection and audit of all the relevant accounting and sales books and records of Reseller conducted by an independent auditor reasonably acceptable to both parties. Any such audit shall be upon five (5) days prior written notice and shall be conducted during normal business hours. If any such audit should disclose any material error in the Quarterly Reports or any resale of the Products by Reseller in contravention of the terms of this Agreement, in addition to any other remedies to which Todos shall be entitled, Reseller shall promptly reimburse Todos for the reasonable cost of the audit. 6.4 On-Site Inspections. Todos shall have the right to conduct periodic on-site inspections to ensure the quality control of the cancer screening processes and the Reseller's compliance with Todos's protocols. + +5 + +Source: TODOS MEDICAL LTD., 20-F, 3/28/2019 + + + + + +6.5 Medical Device Reporting. The Reseller shall provide Todos with reports of any adverse events and product problems in accordance with the Mandatory Medical Device Reporting regulations of 21 CFR 803. 7. Warranties 7.1 Performance Warranty. Todos warrants that for a period of one (1) year from the date of delivery of each Product to the Reseller, the Product, except for those components that have a shorter expiration date as set forth on Exhibit A, shall perform substantially in accordance with the Product's documentation and specifications, and shall be free from all defects in materials, manufacture, and workmanship. Todos shall correct or repair any reported non-conformity or defect, or replace the non-conforming Product with a Product that conforms to this warranty. 7.2 Non-Infringement. Todos represents and warrants to the Reseller that Todos has full right to produce and sell the Products as contemplated by this Agreement, and that the Reseller's exercise of the resale rights granted herein will not violate any copyright, patent, or other proprietary right of any third party. 7.3 EXCEPT FOR THE EXPRESS WARRANTIES STATED IN THIS SECTION 7, TODOS DISCLAIMS ANY AND ALL WARRANTIES, INLCUDING ANY IMPLIED WARRANTY OR CONDITION OF MERCHANTABLE QUALITY, MERCHANTABILITY, DURABILITY OR FITNESS FOR A PARTICULAR PURPOSE. NO REPRESENTATION OR OTHER AFFIRMATION OF FACT, INCLUDING BUT NOT LIMITED TO STATEMENTS REGARDING PERFORMANCE OF THE PRODUCTS, WHICH IS NOT CONTAINED IN THIS AGREEMENT, SHALL BE DEEMED TO BE A WARRANTY BY TODOS. 8. Insurance. Each party shall carry appropriate and commercially reasonable amounts of insurance adequate for the activities detailed in this Agreement, as well as sufficient levels of all legally mandated insurance, if any. 9. Intellectual Property 9.1 Reseller acknowledges and agrees that any and all proprietary rights, trade secrets, trademarks, trade names, copyrights, patents, know-how, and other intellectual property rights used or embodied in, related to, or associated with the Products, including all developments, modifications, enhancements, improvements, and derivative works thereof, and all documentation with respect thereto, are and shall remain the sole and exclusive property of Todos or its licensors. 9.2 Subject to the terms and conditions of this Agreement, Todos hereby grants Reseller a limited license to use the Todos name and Todos's trademarks, trade names, service marks, logos and related symbols (the "Todos Marks") in the performance of its activities hereunder and in the marketing of the Products in the Territory. The Reseller's use of the Todos Marks shall be subject to Todos's prior approval. The Reseller will use Todos's designated trademarks, trade names, and intellectual property related notices on or in all marketing materials and packaging, and the Reseller shall market and sell the Products under the Todos brand name. The Reseller will not register or take other action with respect to any Todos Mark used anywhere in the world by Todos, except to the extent authorized in writing by Todos in advance. + +6 + +Source: TODOS MEDICAL LTD., 20-F, 3/28/2019 + + + + + +9.3 Reseller shall immediately bring to the attention of Todos any improper or wrongful use of Todos's trademarks or other intellectual or commercial property rights which come to the notice of Reseller, and will, in the performance of its duties hereunder, use every effort to safeguard the property rights and interests of Todos, and will, at the request and cost of Todos, take all steps required by Todos to defend such rights. 9.4 Reseller acknowledges that it does not have and that it will not obtain any proprietary interest in the Todos Marks and agrees not to use the same in any other manner and to discontinue all use thereof immediately upon termination of the Agreement. 10. Confidentiality 10.1 Any technical, scientific, design, or commercial information transferred by one Party to the other under this Agreement which is identified as confidential or which may reasonably be deemed to be confidential, shall be considered confidential and shall be maintained in confidence by the receiving party. In addition, each party shall comply with all applicable health care privacy rules and regulations and maintain the confidentiality of all health care and patient information. 10.2 The receiving party shall maintain in confidence and protect the secrecy of all confidential information of the other Party, and agrees that it shall not disclose, transfer, use in an unauthorized manner, copy, or allow access to any such confidential information to any employees, agents, or third parties, except for those who have a need to know such confidential information to fulfill the purposes of this Agreement, and who are bound by contractual obligations of confidentiality and limitation of use sufficient to give effect to this Section 10. In no event shall the receiving party disclose any of the other Party's confidential information to any competitor of the disclosing party. 10.3 The receiving party shall use the same degree of care to avoid publication, unauthorized disclosure, and unauthorized use of such confidential information as it applies with respect to its own confidential information (but no less than reasonable care), and shall take all reasonable care to ensure that such confidential information is not disclosed to third parties, except insofar as: (a) such confidential information is made public by the disclosing party; (b) such confidential information is in the public domain otherwise than as a consequence of a breach of the obligations herein undertaken; or (c) such confidential information was previously and demonstrably known to the receiving party, or was subsequently independently developed. 10.4 The terms of this Agreement shall be deemed to be confidential information. Each party undertakes that it will not make any announcement or issue any circular or other publicity relating to the existence or subject matter of this Agreement, the terms of this Agreement, or the transactions contemplated hereby, without the prior written approval of the other party as to such announcement's/circular's/publicity's content, form, and manner of publication. + +7 + +Source: TODOS MEDICAL LTD., 20-F, 3/28/2019 + + + + + +10.5 Each party acknowledges that the unauthorized use, commercialization or disclosure of the other party's confidential information would cause irreparable harm to such other party. The parties acknowledge that remedies at law may be inadequate to redress the actual or threatened unauthorized use, commercialization, or disclosure of such confidential information and that the foregoing restrictions may be enforced by temporary and permanent injunctive relief without necessity of posting bond. In addition, any award of injunctive relief shall include recovery of associated costs and expenses (including reasonable attorneys' fees). 10.6 The provisions of this Section 10 shall survive the expiration or termination of this Agreement. 11. Term and Termination 11.1 This Agreement shall be effective as of the Effective Date and shall continue in effect for a period of five (5) years from the Reseller's first purchase order for Product issued to Todos (the "Initial Term"), unless terminated earlier by one of the parties in accordance with the terms of this Section 11. Upon completion of the Initial Term, provided that the Reseller has achieved the Annual Milestones, the term of the Agreement shall be automatically renewed for an additional five (5) years. Thereafter, at the end of each renewal term, the Agreement shall renew for an additional two (2) years unless one party provides the other party with prior written notice of non-renewal at least sixty (60) days prior to the expiration of the then-current term. 11.2 Notwithstanding anything to the contrary, a party may terminate this Agreement upon the occurrence of any of the following events, and such party shall not be liable to the other party for the proper exercise of such right: (a) The other party materially breaches this Agreement and continues in such breach for thirty (30) days after the non-breaching party has given written notice thereof to the other party; or (b) For a period of ninety (90) consecutive days, the other party is declared to be insolvent or is the subject of bankruptcy or liquidation proceedings, whether compulsory or voluntary, or has a receiver, judicial administrator or similar officer appointed over all or any material part of its assets, or any security holder or encumbrance lawfully takes possession of any property of or in possession of the other party, or if the other party ceases to carry on its business. 12. Limitation of Liability 12.1 IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR ANY INCIDENTAL, CONSEQUENTIAL, INDIRECT, SPECIAL, OR PUNITIVE DAMAGES (INCLUDING, BUT NOT LIMITED TO, LOST PROFITS, BUSINESS INTERRUPTION, LOSS OF BUSINESS INFORMATION OR OTHER PECUNIARY LOSS) REGARDLESS OF WHETHER SUCH LIABILITY IS BASED ON BREACH OF CONTRACT, TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY, BREACH OF WARRANTIES, FAILURE OF ESSENTIAL PURPOSE OR OTHERWISE AND EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. + +8 + +Source: TODOS MEDICAL LTD., 20-F, 3/28/2019 + + + + + +12.2 Except with regard to a breach of confidentiality, a party's indemnification obligations hereunder, or infringement of intellectual property rights, either party's total liability to the other party under this Agreement shall be limited to the amounts paid or payable by the Reseller to Todos during the twelve-month period preceding the interposition of the claim. 13. Indemnification 13.1 Todos's Duty to Indemnify. Todos shall defend against any claim or lawsuit by a third party (a "Claim") against Reseller to the extent such Claim alleges that the Products infringe any patent, copyright, or trademark or misappropriate a trade secret of a third party, and will indemnify Reseller against all costs, damages, losses, liabilities and expenses (including reasonable attorneys' fees and costs) ("Damages") awarded against Reseller by a court of competent jurisdiction, or agreed to in a written settlement agreement signed by Todos, arising out of such Claim. Todos shall have no indemnification obligation or other liability for any Claim of infringement arising from (a) use of the Products other than in accordance with this Agreement; (b) modification of the Products or the combination of the Products with any other products, services, or materials if the Products would not be infringing without such modification or combination; or (c) any third party products, services, or materials. If Reseller's use of the Products under the terms of this Agreement is enjoined or Todos determines that such use may be enjoined, then Todos may, at its sole option and expense, either (i) procure for Reseller a license to continue using the Products in accordance with the terms of this Agreement; (ii) replace or modify the allegedly infringing Products to avoid the infringement; or (iii) terminate this Agreement. 13.2 Reseller's Duty to Indemnify. Reseller agrees to defend any Claim against Todos (i) that the Reseller's actions infringe any third party patent, or copyright, or any other proprietary right; or (ii) arising out of any act or omission by Reseller relating to the Products. Reseller will indemnify Todos (and its directors, employees and agents) against all Damages awarded against Todos or agreed to in a written settlement agreement signed by Reseller arising out of such Claim. 13.3 General Indemnity. Each party shall defend and indemnify the other party and its employees, officers, directors and agents against all Damages for Claims for bodily injury, death, or damage to real property or tangible physical equipment, proximately caused by the indemnifying Party in the course of performing this Agreement. 13.4 Conditions to Indemnification. The obligations set forth in this Section 13 shall apply only if (i) the indemnified Party promptly notifies the indemnifying Party in writing of a claim upon learning of or receiving the same; (ii) the indemnified Party provides the indemnifying Party with reasonable assistance requested by the indemnifying Party, at the indemnifying Party's expense, for the defense and settlement, if applicable, of any claim; and (iii) the indemnified Party provides the indemnifying Party with the exclusive right to control and the authority to settle any claim. 13.5 Sole and Exclusive Remedies. THE RIGHTS AND OBLIGATIONS IN THIS SECTION 13 ARE THE INDEMNIFYING PARTY'S SOLE AND EXCLUSIVE OBLIGATIONS, AND THE INDEMNIFIED PARTY'S SOLE AND EXCLUSIVE REMEDIES, WITH RESPECT TO ANY SUCH CLAIMS. + +9 + +Source: TODOS MEDICAL LTD., 20-F, 3/28/2019 + + + + + +14. Relationship of the Parties The parties to this Agreement are independent contractors. No relationship of principal to agent, master to servant, employer to employee, or franchisor to franchisee is established hereby between the parties. Neither party has the authority to bind the other or incur any obligation on the other's behalf. Any agreement for the sale of Products negotiated or executed between the Reseller and a Customer shall be binding upon the Reseller alone. The Reseller is not authorized to, and shall not, enter into any contracts nor make any other commitments on behalf of or in the name of Todos, unless expressly authorized in writing to do so by Todos. Reseller shall not incur any liabilities, obligations, or commitments on behalf of Todos. 15. Miscellaneous 15.1 Entire Agreement. This Agreement, including its exhibits, constitutes the entire agreement between the parties concerning the subject matter hereof, and supersedes all prior or contemporaneous statements, representations, discussions, negotiations, and agreements, both oral and written. 15.2 Amendments or Waiver. This Agreement may not be amended or modified except in a writing signed by authorized officers of both parties. No order, invoice, or similar document will modify the terms of this Agreement even if accepted by the receiving party. 15.3 Severability. In the event that any one or more of the provisions of this Agreement shall be found to be illegal or unenforceable, this Agreement shall nevertheless remain in full force and effect, and such term or provision shall be deemed severed unless such severance defeats the purpose of this Agreement or results in substantial injustice to one of the parties. 15.4 No Waiver. Neither of the party's rights to enforce provisions of this Agreement shall be affected by any prior course of dealing, waiver, delay, omission, or forbearance. 15.5 Assignment. This Agreement and the rights granted hereunder shall not be assigned, encumbered by security interest or otherwise transferred by the Reseller without the prior written consent of Todos, except for the assignment or transfer of rights to a subsidiary company or an affiliated company. 15.6 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Israel, and the courts of Tel-Aviv, Israel 15.7 Arbitration. Any dispute, controversy, or claim relating to, connected with, or arising out of this Agreement, including any question regarding its existence, validity, or termination, shall be referred to and finally resolved by arbitration in accordance with the Arbitration Law, before a single arbitrator to agreed upon by both parties and in lack of such agreement as to the identity of the arbitrator, each side shall be eligible, within 7 days of any notice given by any party to the other, to request that the head of the Tel-Aviv Bar Association appoint said arbitrator. [Remainder of Page Left Blank] + +10 + +Source: TODOS MEDICAL LTD., 20-F, 3/28/2019 + + + + + +IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized representatives. Todos Medical Ltd. Care G. B. Plus Ltd. /s/ Herman Weiss /s/ Assaf Gold Name: Herman Weiss Name: Assaf Gold Title: CEO Title: Manager Date: 20/12/2018 Date: 20/12/2018 Lists of Exhibits: Exhibit A: The Products Exhibit B: The Laboratory Exhibit C: Commercialization Timetable + +11 + +Source: TODOS MEDICAL LTD., 20-F, 3/28/2019 + + + + + +EXHIBIT A THE PRODUCTS Each unit of Product consists of one Physician Kit and one Laboratory Kit. TM-B1 breast cancer screening test and TB-B2 breast cancer diagnostic test General Information: Physician Kit: Laboratory Kit: The Laboratory Kit consists of the Isolation Kit and the Analysis Kit. Isolation Kit: Item 7 (page 8) in the "Isolation Kit" are items that are not provided with the kit and the Reseller is responsible to purchase these items. Analysis Kit: Item 7 (page 8) in the "Analysis Kit" are the items that are not provided with the kit and the Reseller is responsible to purchase these items. Components with an expiration date: [please insert] + +12 + +Source: TODOS MEDICAL LTD., 20-F, 3/28/2019 + + + + + +EXHIBIT B THE LABORATORY [please insert description of the laboratory and its components] + +13 + +Source: TODOS MEDICAL LTD., 20-F, 3/28/2019 + + + + + +EXHIBIT C COMMERCIALIZATION TIMETABLE Milestone Target Date Todos to obtain AMAR approval Q3 2019 Reseller to set-up a diagnostic Laboratory (internal or external) that complies with the requirements in the TM-B2 Isolation Kit Instruction for Use. Q3 2019 Reseller to commence 30-50 Women Pilot Trial. Isolation at Reseller's lab, and FTIR analysis at Todos's facility. Q3 2019 Reseller to commence commercial sales. Q4 2019 Todos to provide kits and computer analysis of files. Q4 2019 14 + +Source: TODOS MEDICAL LTD., 20-F, 3/28/2019 \ No newline at end of file diff --git a/full_contract_txt/TomOnlineInc_20060501_20-F_EX-4.46_749700_EX-4.46_Co-Branding Agreement.txt b/full_contract_txt/TomOnlineInc_20060501_20-F_EX-4.46_749700_EX-4.46_Co-Branding Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..c7d95359f06c9bd22c872d4459ffe7328f792d6e --- /dev/null +++ b/full_contract_txt/TomOnlineInc_20060501_20-F_EX-4.46_749700_EX-4.46_Co-Branding Agreement.txt @@ -0,0 +1,693 @@ +Exhibit 4.46 6 rue Adolphe Fischer L-1520 Luxembourg Luxembourg + + + + + +CO-BRANDING AGREEMENT + +THIS CO-BRANDING AGREEMENT (this "Agreement"), entered into on the 22nd day of August 2005 and effective as of the 22nd day of August 2005 ("Effective Date"), by and among (a) Skype Communications, S.A. ("Skype"), a limited company (société anonyme) incorporated in Luxembourg, with its principal place of business at 6 rue Adolphe Fischer, L-1520 Luxembourg, Luxembourg, (b) Skype Technologies, S.A. ("Skype Holding"), a limited company (société anonyme) incorporated in Luxembourg, with its principal place of business at 6 rue Adolphe Fischer, L-1520 Luxembourg; (c) TOM Online (BVI) Limited ("Online BVI"), a company incorporated in the British Virgin Islands with limited liability, whose correspondence address is at 8th Floor, Tower W3, Oriental Plaza No.1 Dong Changan Avenue, Dong Chang District, Beijing 100738, PRC; (d) TOM Online Inc. ("Tom Holding"), a company incorporated in the Cayman Islands with limited liability and listed on the NASDAQ National Market in the United States of America and the Growth Enterprise Market of The Stock Exchange of Hong Kong Limited, whose correspondence address is at 8th Floor, Tower W3, Oriental Plaza No.1 Dong Changan Avenue, Dong Chang District, Beijing 100738, PRC; and (e) Tel-Online Limited ("Company"), a company incorporated in the Cayman Islands, whose correspondence address is at 8th Floor, Tower W3, Oriental Plaza No.1 Dong Changan Avenue, Dong Chang District, Beijing 100738, PRC. Skype, Online BVI and the Company may be referred to individually as "Party" and collectively as "Parties." Skype, Online BVI, the Company, Skype Holding and Tom Holding may be referred to individually as "party to this Agreement" and collectively as "parties to this Agreement." + +RECITALS A. Each of Skype, Skype Holding, Online BVI, and Tom Holding are parties to that certain Memorandum of Terms dated October 12, 2004 ("Memorandum"), pursuant to which Skype and Online BVI have, among other things, agreed to (i) create, market and distribute a co- branded, customized version of the Skype Software (as defined below) to be distributed in the PRC (as defined below) by incorporating certain brand features of the Online Group (as defined below), and, (ii) develop and host a co-branded web site or web site content featuring the Online Group's and Skype's brand features as related to the customized version of the Skype Software to be distributed in the PRC; + +B. The parties to this Agreement are parties to that certain Shareholders' Deed dated as of the date hereof ("Deed"), and Skype and Online BVI are the shareholders of the Company, a newly formed company formed for the purpose of marketing and distributing the Company-Skype Branded Application (as defined below) on the terms of this Agreement; + +C. Skype is a developer, distributor and supporter of the Skype Software, and is the owner and operator of a web site located at the URL www.skype.com ("Skype Site"); and + +D. The parties to this Agreement wish to terminate the Memorandum and enter into this Agreement pursuant to which the parties to this Agreement will, inter alia, (i) grant the Company (or Online BVI, to act on behalf of the Company) certain rights to provide co-marketing and co-branding activities, and (ii) expand the business relationship among the parties to this Agreement as they may mutually agree from time to time. 1 + +Source: TOM ONLINE INC, 20-F, 5/1/2006 + + + + + +AGREEMENT + +NOW, THEREFORE, in consideration of the mutual covenants contained herein, the parties to this Agreement agree as follows: + +1. DEFINITIONS + +In addition to the capitalized terms defined elsewhere in this Agreement, the following terms shall have the meanings set forth below: + + 1.1 "Adjusted Net Revenue" means Gross Revenue less Direct Expenses. + + 1.2 "Affiliate" means in relation to any Person, any Subsidiary or Holding Company, and any company in which such Person or any such Holding Company holds or Controls directly or indirectly not less than 30% of the issued share capital. + + + +1.3 "Affiliate Program" means a marketing and/or advertising affiliate program made generally available from time to time to third parties on non-negotiated and generally available terms by (i) Skype or (ii) any third party that contracts with Skype which (a) is not a Primarily PRC Based Service Provider and (b) operates in multiple international markets (which may include the PRC) ("Third Party Affiliate Partner"), in each case whereby other third parties are permitted to (x) in the case of a program made available by Skype, advertise the Skype Software and/or link to the Skype Site from Web Sites hosted and operated by such third parties, or (y) in the case of a program made available by a Third Party Affiliate Partner, (1) advertise the Skype Software together with such Third Party Affiliate Partner's software and/or (2) link to Web Sites hosted and operated by such Third Party Affiliate Partner, provided that, in each case, the arrangement with the Third Party Affiliate Partner applies to multiple territories (which may include the PRC). + + 1.4 "Code" means the existing proprietary computer software of any Party or any Affiliate of any Party (as the case may be). + + + +1.5 "Company-Skype Branded Application" means a customized version of the Skype Software which includes both Skype Brand Features and Online BVI Brand Features (and with the prior approval of Skype, which approval may be withheld in its sole discretion, newly created brand features and/or brand features licensed from third parties), and which includes SkypeOut, SkypeIn and Skype Plus (except for the Skype Toolbar). + + + +1.6 "Company-Skype Branded Content" means the combined content and branding of both the Online Group and Skype (and with the prior approval of Skype, which approval may be withheld in its sole discretion, (i) newly created content and/or branding, and/or (ii) content and/or branding licensed from third parties) in a specified Look and Feel format subject to the Skype Policies. Company-Skype Branded Content shall be comprised of both Online BVI Intellectual Property and Skype Intellectual Property. + + + +1.7 "Company-Skype Branded Customer" means all subscribers, users or other customers of the Company-Skype Branded Application, the Company-Skype Toolbar, the Company-Skype Branded Web Site and/or the Company-Skype Branded Content including, without limitation, those procured by the Online Group, as principal or as agent or through agents, distributors or resellers, through any distribution or marketing channels. 2 + +Source: TOM ONLINE INC, 20-F, 5/1/2006 + + + + + + 1.8 "Company-Skype Branded Web Site" means the set of Web Pages, initially located and hosted on skype.tom.com, containing, inter alia, the Company-Skype Branded Content. + + 1.9 "Company-Skype Toolbar" means the Skype Toolbar made available and/or distributed through or in connection with the Company- Skype Branded Application, the Company-Skype Branded Web Site and/or the Online BVI Web Site (and any other Web Site mutually agreed by the Parties in accordance with Section 2.2). + + 1.10 "Confidential Information" shall have the meaning set forth in Section 11 herein. + + 1.11 "Consumer" means, in relation to a product or service or market for a product or service, an individual who takes the product or service for primarily non-business and non-work purposes (even if, for the avoidance of doubt, that individual sometimes, as a secondary purpose, uses the product or service for their work or business). + + + +1.12 "Control" means, with respect to any Person, the possession, directly or indirectly, of the affirmative power to direct or cause the direction of the management and policies of such Person, whether through the ownership of securities, partnership interests or other ownership interests, by contract, by membership or involvement in the board of directors or other management structure of such Person, or otherwise. For purposes hereof, the holding, directly or indirectly, of 30% or more of the issued share capital of a Person shall be deemed the Control of such Person. + + + +1.13 "Customers" means all subscribers, users or other customers procured by the Online Group or the Group, as principal or as agent or through agents, distributors or resellers, through any distribution or marketing channels, of the Company-Skype Branded Application, the Company-Skype Toolbar, the Company-Skype Branded Web Site and/or the Company-Skype Branded Content and the Online Group's and the Group's internet services, value-added services and other products and services in the Territory. + + 1.14 "Deliverable" means an item specified in the "Deliverables" portion of any Statement of Work. + + 1.15 "Direct Expenses" means only those direct expenses set forth below that are incurred by a Party in connection with the Company- Skype Branded Application from a non-affiliated third party: + + • Transmission fees + + • CODEC fees (or other similar fees or royalties, including all interconnection and delivery fees) + + • Sales taxes or other regulatory charges + + • Telecommunications network operators' fees, including transmission fees, call termination fees and collection charges + + • Alliance fees payable to handset manufacturers and/or mobile operators + + • Fees payable to payment agencies such as online-banking charges and charges of collection agents and banks for payment collection + + • Technology license fees approved by Skype and Online BVI in writing + + • Other costs approved by Skype and Online BVI in writing. 3 + +Source: TOM ONLINE INC, 20-F, 5/1/2006 + + + + + + + +1.16 "Gross Revenue" means any and all revenue actually received and collected by a Party, or any Subsidiary or other Affiliate, licensee, distributor or reseller thereof, from (i) any SkypeOut, SkypeIn or Skype Plus services (or other products or services similar to Skype Plus developed under this Agreement by the Parties) provided through or in connection with the Company-Skype Branded Application, Company-Skype Branded Content or Company-Skype Branded Web Site, and (ii) any advertising, licensing, distribution or other exploitation of the Company-Skype Branded Application, Company-Skype Branded Content or Company-Skype Branded Web Site. For purposes of clarity, save as otherwise provided in this Agreement, no development (including, without limitation, any development, updating, upgrading and improvement of software or other technology), sales, promotional, operating, customer support or marketing costs incurred by any Party, including, without limitation, of any third party, in connection with the Company- Skype Branded Application, Company-Skype Branded Content or Company-Skype Branded Web Site, shall be deducted from Gross Revenue. + + 1.17 "Group" means the Company and its Subsidiaries. + + 1.18 "HTML" means the series of commands for formatting Web Pages known as HyperText Markup Language, and shall include any current and future extensions thereto, whether or not the extensions are commonly viewed as "official". + + + +1.19 "Improvement" means any invention, modification, addition, derivative work, enhancement, revision, translation, abridgment, condensation or expansion to or arising from the Skype Intellectual Property or the Online BVI Intellectual Property (as the case may be), or any other form in which the Skype Intellectual Property or the Online BVI Intellectual Property (as the case may be) or any part thereof, may be recast, transformed, or adapted. + + 1.20 "Indemnified Party" means the Party claiming indemnification under Section 13. + + 1.21 "Indemnifying Party" means the Party liable to indemnify the Indemnified Party under Section 13. + + 1.22 "Intellectual Property" means, in the case of Skype, the Skype Intellectual Property, and in the case of Online BVI, the Online BVI Intellectual Property. + + 1.23 "Internet" means the world-wide network of computers commonly understood to provide features and functions, including, without limitation, electronic mail, file transfers, electronic commerce, and World Wide Web access. + + 1.24 "Link" means a hypertext link directly between Web Pages on the World Wide Web which may be initiated by clicking an icon, logo, button, image or text. + + 1.25 "Look and Feel" means the general appearance and functionality of any Company-Skype Branded Content mutually agreed upon by the Parties, displayed in the Company-Skype Branded Application or made available by the Online Group or the Group on the Company-Skype Branded Web Site. + + 1.26 "Online BVI Brand Features" means the trade marks, trade names, service marks, service names and logos proprietary or licensed to the Online Group (exclusive of the Skype Intellectual Property), and any additions, modifications or Improvements to the foregoing that may be made from time to time. 4 + +Source: TOM ONLINE INC, 20-F, 5/1/2006 + + + + + + + +1.27 "Online BVI Intellectual Property" means all Online BVI Brand Features, the Online BVI Web Site, the Company-Skype Branded Web Site (exclusive of any Skype Intellectual Property contained therein), the Online Group's software and Code, databases of the Online Group, including, without limitation, customer information databases and account information related to Customers (other than, and not including, the databases and account information related specifically to "user" names and "user profiles" within the Company- Skype Branded Application and the Skype Software (as set forth in Section 4.2.3.2.1)), text, pictures, sound, graphics, video and all other intellectual property owned or licensed to the Online Group (exclusive of the Skype Intellectual Property) and all copyrights, patents, trade marks, service marks, right of publicity, authors' rights, contract and licensing rights, goodwill and all other intellectual property rights therein and thereto as may exist now and/or hereafter come into existence and all renewals and extensions thereof, regardless of whether such rights arise under the laws of the PRC, the United States, European Union, or any other state, country or jurisdiction. + + 1.28 "Online BVI Web Site" means www.tom.com and any other "*.tom.com" Web Site (excluding the Company-Skype Branded Web Site). + + 1.29 "Online Group" means Tom Holding and its Subsidiaries (other than the Group). + + 1.30 "Person" means any individual, company (whether general or limited), limited liability company, corporation, trust, estate, association, nominee or other entity. + + 1.31 "PRC" or "Territory" means the People's Republic of China (excluding the Hong Kong Special Administrative Region of the PRC, the Macau Special Administrative Region of the PRC and Taiwan). + + 1.32 "Primarily PRC Based Service Provider" means a service provider having all or substantially all of its revenue and operations generated from, and conducted in, respectively, the PRC. + + 1.33 "Services" means those services specified in the "General Description of Services" portion of any Statement of Work. + + 1.34 "Skype API" means application program interface consisting of the set of routines utilized by the Skype Software to provide the Skype Software functionality for a given platform or operating system, Skype API being included in or linked to the Skype Software. + + 1.35 "Skype Brand Features" means the trade marks, trade names, service marks, service names and logos proprietary or licensed to Skype (exclusive of the Online BVI Intellectual Property), and any additions, modifications or Improvements to the foregoing that may be made by Skype from time to time. + + 1.36 "Skype Group" means Skype Holding and its subsidiaries. + + + +1.37 "Skype Intellectual Property" means all Skype Brand Features, Skype Software, Skype Toolbar, Skype's Code (including, without limitation, that contained within the Skype Software and Skype Toolbar), databases and account information related to any member of the Skype Group and the Skype Software (other than, and not including, the databases and account information related to the Customers and not otherwise related specifically to "user" names and "user profiles" within the Company-Skype Branded Application and the Skype Software (as set forth in Section 4.2.3.2.1)), text, pictures, sound, graphics, video and all other intellectual property owned or licensed to Skype (exclusive of the Online BVI Intellectual Property) and all copyrights, patents, trade marks, service marks, right of publicity, authors' rights, contract and licensing rights, goodwill and all other intellectual property rights therein and thereto as may exist now and/or hereafter come into existence and all renewals and extensions thereof, regardless of whether such rights arise under the laws of the PRC, United States, European Union, or any other state, country or jurisdiction. 5 + +Source: TOM ONLINE INC, 20-F, 5/1/2006 + + + + + + 1.38 "Skype Parties" means Skype and Skype Holding and "Skype Party" means any one of them. + + + +1.39 "Skype Plus" means any Skype Toolbar (or similar Skype product), if any, and any paid service or product offering accessible through the Skype Software or a feature of the Skype Software, including, without limitation, mobile and/or wireless functionality, the pricing for which shall be as set forth by Skype from time to time and for which pricing for the Company-Skype Branded Application will be the same as pricing set by Skype for customers using Skype Software subject to such modifications as are reasonably necessary to take into account the effect of applicable taxation, currency fluctuations and to comply with PRC regulations and provided that Skype shall be permitted from time to time to set prices which provide for the same gross margin as the prices set forth from time to time for non co-branded versions of Skype Plus. + + 1.40 "Skype Policies" means the guidelines and policies provided by Skype to its branding partners for the use of Skype Brand Features and co-branding with Skype, which guidelines and policies Skype may modify from time to time in its sole discretion. + + 1.41 "Skype Software" means the proprietary communication software product entitled "Skype", distributed by Skype and which Skype may update or upgrade from time to time, in its sole discretion, and which includes SkypeOut, SkypeIn and Skype Plus. + + 1.42 "Skype Toolbar" means a proprietary software product, distributed by Skype and which Skype may update or upgrade from time to time, in its sole discretion, which enables the Skype Software to be activated directly from a toolbar appearing in another software application such as, without limitation, a Web Browser and/or an e-mail manager. + + 1.43 "Skype Zones" means the proprietary software product entitled "Skype Zones" distributed by Skype as of the Effective Date which enables the Skype Software to be accessed through Wi-Fi hot spots but for the avoidance of doubt does not include any updated or upgraded versions thereof. + + + +1.44 "SkypeIn" means a feature of the Skype Software which allows a user of the Skype Software to receive calls from telephone numbers through the public switched telephone network ("PSTN"), the pricing for which shall be as set forth by Skype from time to time and for which pricing for the Company-Skype Branded Application will be the same as pricing set by Skype for customers using Skype Software subject to such modifications as are reasonably necessary to take into account the effect of applicable taxation, currency fluctuations and to comply with PRC regulations and provided that Skype shall be permitted from time to time to set prices which provide for the same gross margin as the prices set forth from time to time for non co-branded versions of SkypeIn. 6 + +Source: TOM ONLINE INC, 20-F, 5/1/2006 + + + + + + + +1.45 "SkypeOut" means a feature of the Skype Software which allows a user of the Skype Software to place calls from the Skype Software to telephone numbers through the PSTN , the pricing for which shall be as set forth by Skype from time to time and for which pricing for the Company-Skype Branded Application will be the same as pricing set by Skype for customers using Skype Software subject to such modifications as are reasonably necessary to take into account the effect of applicable taxation, currency fluctuations and to comply with PRC regulations and provided that Skype shall be permitted from time to time to set prices which provide for the same gross margin as the prices set forth from time to time for non co-branded versions of SkypeOut. + + 1.46 "Statement" shall have the meaning set forth in Section 5.3.1 herein. + + + +1.47 "Statement of Work" means each sequentially numbered document executed by the Parties from time to time following the execution of this Agreement, the form of which is attached hereto as Exhibit A, describing the Services to be performed by the applicable Party, the Deliverables, applicable fees, scope of work and appropriate project timelines, as well as any requirements, considerations, or objectives which differ from the general provisions of this Agreement. If any provision of a Statement of Work conflicts with any of the terms and conditions of this Agreement, the provisions of this Agreement shall take precedence. + + 1.48 "Subsidiary" and "Holding Company" each have the meaning set out in Section 736 of the Companies Act 1985 of the United Kingdom. + + 1.49 "Term" shall have the meaning set forth in Section 6.1 herein. + + 1.50 "Third Party Affiliate Partner" shall have the meaning set forth in Section 1.3 herein. + + 1.51 "Tom Parties" means Online BVI and Tom Holding and "Tom Party" means any one of them. + + 1.52 "Transaction Documents" means this Agreement, the Deed and any other agreement or arrangement entered into by a Tom Party (or its Affiliate) and a Skype Party (or its Affiliate) in respect of the subject matter of this Agreement or the Deed. + + 1.53 "Web Browser" means third party software designed to allow interactive access to the World Wide Web (and in some cases to other Internet resources as well). + + 1.54 "Web Page" means a document or file that is formatted using HTML, Java, Active-X, CGI Scripting, and/or any other Internet programming and formatting language developed now or in the future, and that is intended to be accessible by Internet users with a Web Browser. + + 1.55 "Web Site" means a group of related HTML documents and associated files, scripts, and data bases that are made available on the World Wide Web through a server. 7 + +Source: TOM ONLINE INC, 20-F, 5/1/2006 + + + + + + 1.56 "World Wide Web" means all of the Web Pages that are accessible to a typical computer user with appropriate access to the Internet and a Web Browser. 2. COMPANY-SKYPE BRANDED APPLICATION, COMPANY-SKYPE BRANDED WEB SITE and COMPANY-SKYPE BRANDED CONTENT + +2.1. Company-Skype Branded Application. At its sole cost, Skype shall design and produce the Company-Skype Branded Application in accordance with the terms and conditions of this Agreement. Skype shall provide updates and upgrades of the Company-Skype Branded Application and/or the Company-Skype Toolbar at or about the same times as updates and upgrades to the Skype Software and/or the Skype Toolbar, respectively, are generally provided by Skype to other users of the Skype Software and/or the Skype Toolbar, as applicable, to the extent commercially practicable, it being understood that localisation will take place after the generally distributable versions of the update or upgrades to the Skype Software and/or the Skype Toolbar, as applicable, have been generally released. Notwithstanding the foregoing, Skype agrees to take under advisement and consider the Company's recommendations (or the recommendations of Online BVI on behalf of the Company) on the timing and suitability of any updated or upgraded Company-Skype Branded Application and/or the Company-Skype Toolbar. For the purposes of this Agreement, any reference to the Company-Skype Branded Application and/or the Company-Skype Toolbar shall include any updates and/or upgrades thereto. Without limiting the generality of the foregoing, Skype agrees that as soon as practicable after such time as the technology that would allow the Skype Software to be distributed to and used on mobile communication devices (for purposes hereof, the "Mobile Technology") is made available by Skype or any of its Affiliates to users of the Skype Software, Skype will update or upgrade the Company-Skype Branded Application to include such technology therein. Skype further agrees that in the event that, prior to such time as the Company-Skype Branded Application is updated or upgraded to include the Mobile Technology, Skype or any of its Affiliates makes available to Skype users a new software product which allows access to services available through the Skype Software but on or through mobile communication devices (but in any event excluding Skype Zones), it will license that software product to the Company and Online BVI on the terms and conditions set forth in this Agreement with respect to the Skype Software and the Company-Skype Branded Application customized therefrom, and references to the Skype Software in this Agreement shall be deemed to include such software product. + +2.2. Company-Skype Branded Web Site. The Company will, and Online BVI will cause the Company to, design, produce, host, and maintain the structure, appearance, and content mutually agreed by the Parties, as described below, comprising the Company-Skype Branded Web Site and the Company-Skype Branded Content located therein, including, without limitation, by providing any necessary and suitable hardware and any other equipment or facilities necessary to fulfil such requirements. Except with respect to the Skype Brand Features and the Online BVI Brand Features located on the Company-Skype Branded Web Site, the Online BVI Web Site and/or in the Company-Skype Branded Content, which Skype and Online BVI, respectively, may approve or reject in its sole discretion, the design, production, hosting, and maintenance of the structure, appearance, and content comprising the Company-Skype Branded Web Site and the Company-Skype Branded Content shall be mutually agreed by the Parties. Skype shall provide the Company-Skype Branded Application to the Company, and the Company will, and Online BVI will cause the Company to, make the Company-Skype Branded Application available for download by Customers through the Online BVI Web Site and/or the Company-Skype Branded Web Site and any other Web Site mutually agreed by the Parties, and once the technology is made available by Skype for it to do so, through mobile phones and other distribution channels. 8 + +Source: TOM ONLINE INC, 20-F, 5/1/2006 + + + + + +2.3. Promotions. + +2.3.1. The Company will, and Online BVI will cause the Company to, use its commercially reasonable efforts to promote the Company- Skype Branded Application and the Company-Skype Branded Web Site to all of Online BVI's customers in the Territory, as each is agreed by the Parties in accordance with Section 2.2 above. Subject to Section 2.3.2, all decisions relating to the specific promotional activities of the Company and the Online Group hereunder, including, without limitation, any advertising, licensing, distribution or other exploitation of the Company-Skype Branded Application, Company-Skype Toolbar, Company-Skype Branded Content or Company-Skype Branded Web Site, shall be mutually agreed upon, provided, however, that the Online Group shall at a minimum (i) promote the availability of the Company-Skype Branded Application to all visitors of the Online BVI Web Site, (ii) promote the availability of the Company-Skype Branded Application to all its existing customers and/or users, provided that this obligation shall not require the Online Group to communicate with those customers and/or users by SMS or e-mail where prohibited by contract, applicable laws, regulations and/or policies of telecommunications operators, and (iii) place each of the following in a reasonably conspicuous position within a prominent home or next level Web Page, the "preferred partners" area, and any other area or other Web Pages within the Online BVI Web Site as the Parties may mutually agree to from time to time: (x) links to the Company-Skype Branded Application and a mutually-agreeable short profile of Skype; and (y) promotional material for the Company-Skype Branded Application and links to the Company-Skype Branded Web Site. + +2.3.2. Notwithstanding anything herein to the contrary, the Parties agree that they shall in the first quarter of each calendar year and the third quarter of each calendar year reach an agreement on the respective semi-annual promotional plan prepared by the Company, or by Online BVI for and on behalf of the Company, in each case in consultation with Skype ("Semi-Annual Promotions Plan"). In the event the Parties are unable to agree at any time with respect to such Semi-Annual Promotions Plan, the Semi-Annual Promotions Plan for the immediately prior period shall apply. So long as the Company does not materially deviate from the Semi-Annual Promotions Plan for that relevant year, neither Online BVI nor the Company, as applicable, need to seek a separate approval from Skype under Section 2.3.1 prior to undertaking a promotional activity during that year. + +2.4. Customer Support. + +2.4.1. During the Term, each of Online BVI and the Company, on the one hand, and Skype, on the other hand, shall provide to the other, at no cost, technical support, documentation and co-ordination reasonably requested to assist in the optimal offering of the Company-Skype Branded Application in the PRC. + +2.4.2. The Company shall be responsible for, and Online BVI shall cause the Company to provide, all first level support to the Company- Skype Branded Customers, which shall be its standard customer support—twenty four hours a day, seven days a week, provided that Skype shall provide the Online Group with reasonably prompt back-end support and network connection support, in each case to the extent such support is within the control of Skype, on a twenty four hours a day and seven days a week basis, as may be reasonably required from time to time. In this connection, Skype shall provide assistance and give a reply to the Company on each back-end and network connection service request in no less than twelve (12) hours after the receipt of such request from the Company. Skype shall also maintain and provide access to the customer support forum on the Skype Site, in the English language only. + +2.4.3. In the event any Party has a major service fault, they will inform the other Party and make commercially reasonable efforts to resolve such issue as soon as practicable, and will not be in breach so long as such Party is exercising its commercially reasonable efforts to resolve such service fault. 9 + +Source: TOM ONLINE INC, 20-F, 5/1/2006 + + + + + +2.5. Payment Methods. The Company will, and Online BVI will cause the Company to, use its commercially reasonable efforts to make available and promote the Online Group's existing payment processing and customer billing and payment gateway methods for the purchase of Skype premium features by Company-Skype Branded Customers, including, without limitation, prepaid card distribution networks, vouchers and mobile payment methods, provided, that all payment processing and customer billing and payment gateway charges for such payment methods are on terms that are as or more favourable than the most favourable pricing and terms for such services otherwise provided at the applicable time by any member of the Online Group, and provided further that such pricing and terms have first been mutually approved in writing by the Parties. + +2.6. Support Information. Should Online BVI or Company at any time develop support information for end users regarding the Company- Skype Branded Application ("Support Information"), all such Support Information must receive the prior written approval of Skype, which approval shall not be unreasonably withheld. Should Online BVI, or the Company, at any point during the Term, remove such Support Information from the Company-Skype Branded Web Site, the Company will, and Online BVI will cause the Company to, provide a link to the relevant Skype Software customer support page on the Skype Site in a prominent position on the Company-Skype Branded Web Site. + +2.7. Look and Feel. Subject to the express terms contained in any Statement of Work, the Company will, and Online BVI will cause the Company to, work together with Skype to develop an acceptable Look and Feel for projects developed under this Agreement, including, without limitation, the Company-Skype Branded Application, Company-Skype Toolbar, the Company-Skype Branded Web Site and the Company-Skype Branded Content, as applicable. Notwithstanding anything in this Agreement to the contrary, all such projects shall be subject to, and comply with, the Skype Policies, a copy of the most recent version of which shall be provided by Skype to Company prior to the execution of this Agreement. + +2.8. Skype EULA. Each of Online BVI and the Company acknowledges and agrees that each Company-Skype Branded Customer who installs the Company-Skype Branded Application and/or the Company-Skype Toolbar must agree (by electronically acknowledging acceptance or any other means) to Skype's then standard End User License Agreement for the Skype Software and/or the Skype Toolbar (as the case may be) which Skype may modify from time to time at its sole discretion ("EULA"). To the extent practicable and otherwise not adversely affecting the rights of Skype therein, Skype shall cause the provisions of the EULA to comply with the applicable laws and regulations of the PRC and/or policies/practices of the telecommunications operators and handset manufacturers in the PRC that are requested in writing by Online BVI and/or the Company and delivered to Skype in advance, and which are agreeable to both parties. If Skype is unwilling to modify its EULA and counsel for the Company or Skype provides Skype with a legal opinion that unless modifications are made to the EULA the Company will thereafter be in material violation of applicable laws of the PRC and Skype nevertheless elects not to make such modifications as are necessary to comply with the laws of the PRC, the Company, Online BVI or Skype may thereafter terminate this Agreement by delivery to the other parties 30 days written notice of termination. Upon any such termination, the Parties will comply with the other provisions surviving termination hereunder, including, without limitation, Section 6.3. + +2.9. Compliance with Laws. To the extent practicable and not otherwise adversely affecting the rights of any party to this Agreement, the Parties shall use their commercially reasonable efforts to ensure that the Company-Skype Branded Content and Company-Skype Branded Web Site complies with the applicable laws and regulations of the PRC that are identified in writing by Online BVI and/or the Company and delivered to Skype in advance. 10 + +Source: TOM ONLINE INC, 20-F, 5/1/2006 + + + + + +3. PUBLIC ANNOUNCEMENTS + +The Parties agree to participate in a joint press announcement regarding this Agreement, the Company-Skype Branded Application and the Company-Skype Branded Web Site, which will take place on a mutually agreed upon date. The form and content of any joint press release shall be mutually agreed upon by the Parties in writing prior to the public transmittal, display, distribution or publication thereof. In any press release regarding the Company-Skype Branded Application, both Skype's and Tom Holding's name and logo shall be included in the press release, and shall appear with equal prominence. + +4. PROPRIETARY RIGHTS & LICENSE GRANTS + +4.1 Licenses. + +4.1.1 Skype License. Subject to the terms and conditions of this Agreement, Online BVI hereby grants to Skype and the Company a limited, non-exclusive, non-sublicensable (except as set forth herein), non-transferable, non-assignable (except as provided in Section 14.4), royalty- free (but subject to the provisions of Section 5), license during the Term to use, market, provide access to, promote, reproduce and display the Online BVI Intellectual Property solely as incorporated in, and for the development of and for transmission pursuant to this Agreement of the Company-Skype Branded Application, the Company-Skype Branded Content and the Company-Skype Branded Web Site. Notwithstanding the foregoing, upon the prior written approval of Online BVI, which approval may be withheld in its sole discretion, the Company shall be permitted to sublicense its rights hereunder to a wholly-owned Subsidiary of the Company or a majority-owned Subsidiary of Tom Holding, for the same purpose and under the same terms and conditions as the license set forth herein. + +4.1.2 Company License. Subject to the terms and conditions of this Agreement: + +4.1.2.1 Skype hereby grants to Online BVI and the Company a limited, non-exclusive, non-sublicensable (except as set forth herein), non-transferable, non-assignable (except as provided in Section 14.4), royalty-free (but subject to the provisions of Section 5), license during the Term to use, market, provide access to, promote, reproduce and display the Skype Intellectual Property solely (i) as incorporated in the Company-Skype Branded Application and/or the Company-Skype Toolbar, and (ii) as incorporated in, for the development of, and for transmission pursuant to this Agreement of, the Company-Skype Branded Content and the Company-Skype Branded Web Site, in each case for the sole purposes (unless otherwise mutually agreed by the Parties) of promoting and distributing, pursuant to this Agreement, the Company-Skype Branded Application, the Company-Skype Toolbar, the Company-Skype Branded Content and the Company-Skype Branded Web Site in the Territory; (a) provided, that it is understood that the Company-Skype Branded Customers will have the right under the EULA to use the Company- Skype Branded Application and the Company-Skype Toolbar and will have the right to access the Company-Skype Branded Content, the Company-Skype Branded Web Site and the Online BVI Web Site through the Internet and to otherwise receive support from the Company anywhere in the world, and that the Company shall be permitted to provide access to and reproduce and display the Skype Intellectual Property through the Internet anywhere in the world, and (b) provided further, that Online BVI and the Company shall ensure that no Company-Skype Branded Customer (or potential Company-Skype Branded Customer) shall be permitted to access, using the Company-Skype Branded Application or the Company-Skype Toolbar or through the Company-Skype Branded Web Site, any Skype premium features requiring payment by the Company-Skype Branded Customer (or potential Company-Skype Branded Customer), including, but not limited to, SkypeIn, SkypeOut, or Skype Plus, unless such Company-Skype Branded Customer (or potential Company-Skype Branded Customer) uses the payment methods made available by the Company pursuant to Section 2.5 for the purchase of such premium features. 11 + +Source: TOM ONLINE INC, 20-F, 5/1/2006 + + + + + +4.1.2.2 Notwithstanding the foregoing, upon the prior written approval of Skype, which approval may be withheld in its sole discretion, the Company shall be permitted to sublicense its rights hereunder to a wholly-owned Subsidiary, a majority-owned Subsidiary of Tom Holding, or to an unaffiliated third party distributor or reseller, for the same purpose and under the same terms and conditions as the license set forth herein. In connection with approval of any unaffiliated third party distributor, or reseller the Company will discuss the manner of collection of revenue by, the audit provisions to be obtained from, and the creditworthiness of the proposed unaffiliated third party distributor or reseller, and, if agreed by Skype, with respect to such unaffiliated third party distributor or reseller only, Skype may, in its sole discretion notwithstanding the provisions of Section 5, agree that "Gross Revenue" to the extent generated by that unaffiliated third party distributor or reseller will arise on the date payment with respect to that revenue is due from the unaffiliated third party distributor or reseller to the Company as opposed to the date upon which the applicable revenue is actually collected by the third party distributor or reseller and the operation of the provisions of Section 5 in respect of the revenue due from that unaffiliated third party distributor or reseller shall be amended accordingly. + +4.1.3 Restrictions. Each Party may only use the Intellectual Property of the other Party as expressly set forth in the licenses provided in this Section 4. + +4.1.3.1 Except as provided herein, no member of the Online Group or the Group may in any manner (i) modify the Skype Software, Skype Toolbar, Company-Skype Toolbar and/or Company-Skype Branded Application or any Improvement thereof; (ii) distribute, sell, transfer, encumber, sublicense, rent, loan, lend or lease the Skype Software and/or the Skype Toolbar, and/or any component thereof to any third party; or (iii) reverse engineer, decompile, disassemble or otherwise attempt to discover or directly access the source code of the Skype Software, Skype Toolbar and/or Company-Skype Branded Application, and/or any component thereof. For purposes of clarity, the rights granted to Online BVI pursuant to this Section 4 exist solely for the purposes of performance of this Agreement. + +4.1.3.2 Except as provided herein, no member of the Skype Group or the Group may in any manner (i) modify any of the Online BVI Intellectual Property or any Improvements thereof; or (ii) distribute, sell, transfer, encumber, sublicense, rent, loan, lend or lease any Online BVI Intellectual Property, and/or any component thereof to any third party. For purposes of clarity, the rights granted to Skype pursuant to this Section 4 exist solely for the purposes of performance of this Agreement. + +4.1.4 Reservation of Rights. Each Party does not grant, and hereby expressly reserves unto itself, all rights not granted in this Agreement. Nothing in this Agreement shall be construed to prevent either party from using or from granting any other licenses and rights to other Persons to use the Intellectual Property licensed under this Section 4 in any manner whatsoever in the Territory. + +4.2 Ownership. + +4.2.1 Skype Intellectual Property. Each of Online BVI and the Company acknowledges and agrees that Skype shall, at all times, exclusively own all rights, title, and interest in the Skype Intellectual Property, and all Improvements and translations thereof ("Skype Rights"). Neither Online BVI nor the Company will grant, nor claim for itself or other affiliated entities, independent contractors, or employees, either expressly or impliedly, any rights, title, interest, or licenses to the Skype Rights. For purposes of clarity, any and all language translations to the Company-Skype Branded Application or Company-Skype Toolbar created by or on behalf of Skype, or the Company, or Online BVI, on behalf of the Company (other than translations to any Online BVI Intellectual Property or any Improvements thereof made by the Group or the Online Group), shall be deemed Improvements of the Skype Intellectual Property and shall be subject to Skype's approval, which shall not be unreasonably withheld or delayed. The Company and Online BVI each assign to Skype, with full title guarantee, all copyrights, patents, trade marks, service marks, rights of publicity, authors' rights, contract and licensing rights, goodwill and all other intellectual property rights in and to the foregoing translations as may exist now and/or hereafter come into existence and arising under the laws of any jurisdiction for the entire term of such rights and all renewals, revivals and extensions thereof. 12 + +Source: TOM ONLINE INC, 20-F, 5/1/2006 + + + + + +4.2.2 Online BVI Intellectual Property. Each of Skype and the Company acknowledges and agrees that the Online Group shall, at all times, exclusively own all rights, title, and interest in the Online BVI Intellectual Property, and all Improvements and translations thereto ("Group Rights"). Neither Skype nor the Company will grant, nor claim for itself or other affiliated entities, independent contractors, or employees, either expressly or impliedly, any rights, title, interest, or licenses to the Group Rights. + +4.2.3 Improvements; Jointly Created Intellectual Property. + +4.2.3.1. Each of Online BVI and the Company acknowledges and agrees that Skype shall, at all times, exclusively own all right, title, and interest in the Company-Skype Branded Application and the Company-Skype Toolbar, save and except for the Group Rights (including, without limitation, any Improvement to the Group Rights) to the extent included therein, and that Skype will exclusively own any Improvement to any Skype Rights. Each of Skype and the Company acknowledges and agrees that the Online Group shall, at all times, exclusively own all right, title, and interest in the Company-Skype Branded Web Site, save and except for the Skype Rights (including, without limitation, any Improvement to the Skype Rights) to the extent included therein, and that Online BVI will exclusively own any Improvement to any Group Rights. The right, title and interest in and to the Company-Skype Branded Content shall be owned by Skype to the extent made up of the Skype Rights which have been integrated into the Company-Skype Branded Content, and by the Online Group to the extent made up of the Group Rights which have been integrated into the Company-Skype Branded Content. + +4.2.3.2. If any intellectual property rights that are subject to legal protection are created or developed jointly by the Parties as a result of the collaboration under this Agreement, such intellectual property rights shall be owned as follows: + +4.2.3.2.1. if such rights comprise (i) intellectual property that constitutes predominantly communication software or related communication hardware or other technology, including without limitation, any upgrades and Improvements thereof, or (ii) any "user" names, and other "user profile" information included within the Company-Skype Branded Application (i.e., dates of birth, addresses, languages spoken, etc.), of Company-Skype Branded Customers collected as part of the registration process for the Company-Skype Branded Application (it being understood that Skype will make such user information available to Online BVI and the Company for use consistent with the applicable privacy policies and the EULA) and any database incorporating the same, then such rights shall be owned exclusively by Skype and neither Online BVI nor the Company will grant, nor claim for itself or its affiliated entities, independent contractors, or employees, either expressly or impliedly, any rights, title, interest, or licenses to such rights and each assigns to Skype, with full title guarantee, all copyrights, patents, trade marks, service marks, rights of publicity, authors' rights, contract and licensing rights, goodwill and all other intellectual property rights in and to the same as may exist now and/or hereafter come into existence and arising under the laws of any jurisdiction for the entire term of such rights and all renewals, revivals and extensions thereof. 13 + +Source: TOM ONLINE INC, 20-F, 5/1/2006 + + + + + +4.2.3.2.2. if such rights comprise any data specifically provided to the Group by Customers during the billing process ("Billing Data"), then such rights shall be owned exclusively by the Online Group and neither Skype nor the Company will grant, nor claim for itself or its affiliated entities, independent contractors, or employees, either expressly or impliedly, any rights, title, interest, or licenses to such rights and each assigns to Online BVI, with full title guarantee, all copyrights, patents, trade marks, service marks, rights of publicity, authors' rights, contract and licensing rights, goodwill and all other intellectual property rights in and to the same as may exist now and/or hereafter come into existence and arising under the laws of any jurisdiction for the entire term of such rights and all renewals, revivals and extensions thereof. + +4.2.3.2.3. if such rights comprise (i) analysis prepared for or on behalf of the Parties as participants in the Company-Skype Branded Application, or (ii) any intellectual property right co-developed by the Parties, or (iii) of any Support Information, or (iv) any data as specifically provided to Skype or the Online Group by Company-Skype Branded Customers ("Joint Data"), other than that set forth in Sections 4.2.3.2.1 and 4.2.3.2.2 above and other than any Group Rights or Skype Rights, then such rights shall be jointly owned by the Parties, and may be exploited by any Party in accordance with this Agreement, and outside of this Agreement to the extent such exploitation would not, (x) in the case of Online BVI, violate or infringe upon the Skype Rights, (y) in the case of Skype, violate or infringe upon the Group Rights, or (z) in the case of the Company, violate or infringe upon the Group Rights or the Skype Rights. + +4.2.3.2.4. Notwithstanding the foregoing, the Company may use the Skype API for the sole purpose of developing applications that connect with the Company-Skype Branded Application ("Add-On Applications"), and provided that such use is at all times in compliance with the terms of the API provisions of the EULA as released by Skype from time to time, such Add-On Applications shall be owned by the Company as set forth in the EULA. + +5. PAYMENTS AND REPORTING + +5.1 Other Revenue. The Company-Skype Branded Application will permit Company-Skype Branded Customers to access basic features at no charge to the Company-Skype Branded Customers. It is hereby acknowledged and agreed that the rights granted by the Online Group hereunder are not exclusive (save as provided herein) and the Online Group will offer its own products and services through various channels and may receive subscription and other fees ("Separate Fees") for such services ("Separate Services"), other than and not in any manner relating to the Company-Skype Branded Application, the Company-Skype Toolbar, the Company-Skype Branded Web Site or the Company-Skype Branded Content, offered by the Online Group from time to time and accessible separate from, and entirely independent of, the Company-Skype Branded Application, the Company-Skype Toolbar, Company-Skype Branded Web Site and/or the Company-Skype Branded Content. No portion of the Separate Fees shall be payable to or shared in by Skype or the Group. Notwithstanding the foregoing, if approved in writing by Skype, which approval may be withheld in its sole discretion, the Online Group may (i) charge any additional or separate fees to access the Company-Skype Branded Web Site, Company-Skype Branded Content, Company-Skype Branded Application or Company-Skype Toolbar, or (ii) offer any Separate Services or charge any Separate Fees by or through the Company-Skype Branded Web Site, Company-Skype Branded Content, Company-Skype Branded Application or Company-Skype Toolbar. It is hereby acknowledged and agreed that the rights granted by Skype hereunder are not exclusive (save as provided herein) and Skype will offer its own products and services, other than and not in any manner relating to the Company- Skype Branded Application, Company-Skype Toolbar, Company-Skype Branded Web Site or Company-Skype Branded Content, through various channels accessible separate from, and entirely independent of, the Company-Skype Branded Application, Company-Skype Toolbar, Company- Skype Branded Web Site and/or the Company-Skype Branded Content, and that no portion of the revenue derived from such products and services shall be payable to or shared with the Online Group or the Group. 14 + +Source: TOM ONLINE INC, 20-F, 5/1/2006 + + + + + +5.2 Revenue Sharing. In consideration of the licenses and other agreements set forth herein, Skype shall be entitled to receive 50% of all Adjusted Net Revenue, and the Company shall be entitled to receive 50% of all Adjusted Net Revenue. Notwithstanding the foregoing, Online BVI shall be entitled to receive 50% of all Adjusted Net Revenue, in lieu of the Company's right to be paid hereunder, in the event that (A) this Agreement remains in effect, (B) Online BVI assumes the obligations of the Company hereunder, and (C) (i) the Deed is terminated pursuant to the terms thereof, or (ii)) the Company is being or has been wound up, liquidated or dissolved. Unless otherwise mutually agreed by the Parties in writing, the Company and Online BVI shall provide for, or make available, the payment methods, fraud prevention mechanisms, and other services related to the receipt of payments in connection with SkypeOut, SkypeIn or Skype Plus services provided through the Company-Skype Branded Application or Company-Skype Branded Web Site ("Payment Services"), in each case as shall be previously approved in writing by Skype, which approval may be withheld in its sole discretion. The Company and Online BVI shall provide the Payment Services directly, or make available, or, to the extent previously approved in writing by Skype, which approval may be withheld in its sole discretion, through a respective Subsidiary or other Affiliate (including, without limitation, a Subsidiary or other Affiliate of the Online Group), licensee, distributor or reseller thereof. For purposes of clarity, Company will, and Online BVI will cause the Company to, pay directly any and all Direct Expenses, including, without limitation, Direct Expenses incurred by Skype, promptly upon invoice. In the event that Skype provides any Payment Services, Skype shall provide the Payment Services directly, or, to the extent previously approved in writing by Online BVI, which approval may be withheld in its sole discretion, through a respective Subsidiary or other Affiliate (including, without limitation, a Subsidiary or other Affiliate of the Skype Group), licensee, distributor or reseller thereof. For purposes of clarity, in the event Skype provides any Payment Services, Skype will pay directly any and all Direct Expenses incurred in order for the Payment Services to be provided by Skype promptly upon invoice, and will be entitled to receive reimbursement of such Direct Expenses from the Company upon invoice. + +5.3 Statements; Payments. + +5.3.1 Within thirty (30) days of the end of each calendar quarter during the Term, the Company will, and Online BVI will cause the Company to, furnish to Skype complete and accurate statements (each, a "Statement") in a form acceptable to Skype, certified to be accurate by an officer of the Company or Online BVI, as applicable, showing with reasonable detail (i) the Gross Revenue actually received and collected by the Company or Online BVI, or if applicable, any Subsidiary or other Affiliate (including, without limitation, a Subsidiary or other Affiliate of Tom Holding), licensee, distributor or reseller thereof, during the preceding calendar quarter and on a cumulative basis, (ii) the Direct Expenses incurred thereby, during the preceding calendar quarter and on a cumulative basis, and (iii) the calculation of Adjusted Net Revenue. In the event that Skype provides any Payment Services hereunder, within thirty (30) days of the end of each calendar quarter during the Term, Skype shall furnish to the Company complete and accurate Statements in a form acceptable to Online BVI, certified to be accurate by an officer of Skype, showing with reasonable detail (i) the Gross Revenue actually received and collected by Skype, or if applicable, its Subsidiaries or other Affiliates (including, without limitation, a Subsidiary or other Affiliate of Skype Holding), licensee, distributor or reseller thereof, during the preceding calendar quarter and on a cumulative basis, (ii) the Direct Expenses incurred thereby, during the preceding calendar quarter and on a cumulative basis, and (iii) the calculation of Adjusted Net Revenue. The respective Parties shall use their best efforts to accompany each respective Statement with payment, to Skype, if provided by the Company or Online BVI (or their associated third parties set forth above), or to the Company (or Online BVI, as applicable), if provided by Skype (or its associated third parties set forth above), as applicable, of 50% of the Adjusted Net Revenue shown on the respective Statements. Provided that the respective Parties utilize their best efforts to provide such payments together with the respective Statements, no Party shall be deemed in breach hereof for delivering late payment until the date which is sixty (60) days following the last day of the respective applicable calendar quarter. All payments shall be paid in Euros, and in the event revenue is earned by a Party (or its associated third parties set forth above) in currencies other than in Euros, then such Party shall convert said amounts each month into Euros based upon the exchange rate published by the Wall Street Journal as of the fifteenth day of such month or if such day shall fall on a non-business day then as of the first business day following said fifteenth day. 15 + +Source: TOM ONLINE INC, 20-F, 5/1/2006 + + + + + +5.3.2 Interest shall be payable on any amounts paid later than the date due hereunder at the prime rate as reported by the New York edition of the Wall Street Journal on the day the amount is due calculated from the date any amount is due until the date of receipt of the relevant sum by the applicable Party. + +5.3.3 The Parties agree to provide such further information relating to Adjusted Net Revenue as may be reasonably available and as may be reasonably requested by the other Parties by giving 14 days' prior written notice to the relevant Party from time to time. + +5.3.4 All sums payable to a Party under this Agreement shall be made to such Party by bank wire transfer to the account set forth in accordance with details given by such Party from time to time and shall only be treated as received when credited to such Party's account by its bank. + +5.3.5 All payments will be made without deduction, withholding, counterclaim or set-off of any kind or nature. The Parties will supply each other with all appropriate forms required to be submitted to avoid withholding taxes insofar as local laws allow and shall give each other reasonable help in completing and filing these forms and shall give each other a certificate for any such tax which is withheld. In the event that the law requires deduction or withholding from any payments due to a receiving Party under this Agreement, the paying Party shall increase the applicable gross amounts payable to the extent necessary to ensure that the amount received by the receiving Party is not less than the stated amounts due hereunder. If the receiving Party receives the benefit of a tax credit or an allowance resulting from a payment which includes such an additional amount, the receiving Party shall pay to the paying Party such part of that benefit as in its opinion will leave it (after such payments) in no more and no less favourable a position then it would have been in if no deduction or withholding had been made. + +5.3.6 All payments to be made to a receiving Party hereunder shall be exclusive of any applicable Value Added Tax or sales or similar tax, duty, or levy which shall be paid by the paying Party (where applicable) upon submission of the appropriate invoice for them. + +5.4 Audit Rights. The Parties (including Online BVI on behalf of the Online Group) agree to maintain records (i) of all information reasonably necessary to verify all calculations to be made under Section 8.3.2, and (ii) supporting, verifying and necessary to demonstrate the calculation and collection of fees and/or revenue, as well as any deductions thereto, and payments made hereunder, including, without limitation, budgets, purchase orders, expense records, invoices, correspondence, banking and financial and other records pertaining to the determination of Gross Revenue, Direct Expenses and Adjusted Net Revenue, during the term of this Agreement and for a period of two (2) years following the expiration or termination hereof. Not more than once per calendar quarter, each Party or its independent auditor (who shall be a certified public accountant) shall have the right, on not less than fifteen (15) calendar days prior notice and not during the first twenty (20) days after the close of any fiscal quarter of the other Parties, or within sixty (60) day of the close of such Parties' respective fiscal years, to audit the books of account and records of any and all such Parties. Such audit shall be conducted at the premises where the audited Party maintains consolidated books of account; provided however, that the auditing Party may conduct all or any part of such audit at any of the audited Party's premises where any relevant books of account and/or records are located. During such audits, the auditing Party shall have the right to take extracts and/or make copies of the audited Party's records as it deems necessary. Such audits shall be at the auditing Party's cost, except that, subject to Section 5.5, if an audit by an independent accounting firm establishes a deficiency of more than three percent (3%) between the amount shown to be due to the auditing Party and the amount actually paid for the period being audited, all actual and reasonable costs and expenses incurred by the auditing Party in connection with such audit shall be paid by the audited Party, along with the amount of any deficiency, within five (5) business days. 16 + +Source: TOM ONLINE INC, 20-F, 5/1/2006 + + + + + +The exercise by any Party in whole or in part, at any time of the right to inspect and/or audit records and accounts or of any other right herein granted, or the acceptance by such Party of any statement or statements or the receipt and/or deposit by such Party, of any payment tendered by or on behalf of an audited Party shall be without prejudice to any rights or remedies of the accepting Party and such acceptance, receipt and/or deposit shall not preclude or prevent such accepting Party from thereafter disputing the accuracy of any such statement or payment. + +Each Party shall cause any Subsidiary or other Affiliate (including, without limitation, a Subsidiary or other Affiliate of the Online Group or Skype Group, as applicable) to grant to the other Party the audit rights granted hereunder with respect to such other Party. + +5.5 Notwithstanding any other provision in this Agreement, in the event of a discrepancy between the records of any Party with that of a third party billing agent that is not an Affiliate of such Party (including, without limitation, records of telecommunications network operators), in the absence of manifest error, the revenue statement or other records provided by such third party billing agent shall prevail and be conclusive for the purposes of this Agreement, including, without limitation, the determination of the amounts of Gross Revenue under this Agreement; provided, however, that the Company shall use commercially reasonable efforts to verify the reporting of, and collect payment from, all third party billing agents.. + +6. TERM AND TERMINATION + +6.1 Term. The term of this Agreement shall continue for a period of five years following the initial date of execution of the Memorandum, unless terminated earlier pursuant to Section 6.2 or Section 2.8 ("Initial Term"). This Agreement shall automatically continue following the Initial Term, for an additional period of three (3) years, unless a party to this Agreement provides written notice of termination to the other parties at least sixty (60) days prior to the expiration of the Initial Term or this Agreement ("Extended Term" and, with the Initial Term, "Term"). + +6.2 Termination for Cause. Any party to this Agreement shall have the right to terminate this Agreement during the Term by giving notice to another party to this Agreement or to any party that is not an Affiliate of the terminating party (collectively, "Defaulter"): (i) if a petition is presented or a proceeding is commenced or an order is made or an effective resolution is passed for the winding-up, insolvency, administration, reorganisation, reconstruction, dissolution or bankruptcy of the Defaulter or for the appointment of a liquidator, receiver, administrator, trustee or similar officer of the Defaulter or of all or any part of its business or assets; (ii) if the Defaulter is unable or admits its inability to pay its debts as they fall due or enters into any composition or other arrangement with its creditors or is declared or becomes bankrupt or insolvent; (iii) if a creditor takes possession of all or any part of the business or assets of the Defaulter or any execution or other legal process is enforced against the business or any substantial asset of the Defaulter and is not discharged within 90 days (iv) any procedure or step is taken in any jurisdiction analogous to any of the matters referred to in this clause; (v) if the Defaulter ceases to carry on its business or any substantial part thereof or if the Defaulter disposes of or threatens to dispose of or any governmental or other authority expropriates or threatens to expropriate all or any substantial part of its business or assets or displaces or threatens to displace the management of the Defaulter; (vi) if the Defaulter or any Affiliate of the Defaulter is in material breach of its obligations hereunder or under any Transaction Document and such breach, if capable of remedy, has not been remedied at the expiry of 30 days following written notice to that effect having been served on the Defaulter by the other Shareholder indicating the steps required to be taken to remedy the failure; (vii) if the Defaulter or any Affiliate of the Defaulter repeats or continues (after written warning) to breach its obligations hereunder or under any Transaction Document (such breach, having not been remedied within 30 days following written notice to that effect having been served on the Defaulter by the other Shareholder indicating the steps required to be taken to remedy the failure); and/or (viii) if the Parties have consummated a transaction whereby Skype has purchased all of the Shares (as defined in the Deed) of Company held by Online BVI or its Affiliates pursuant to the terms of the Deed. 17 + +Source: TOM ONLINE INC, 20-F, 5/1/2006 + + + + + +6.3 Duties Upon Termination. Subject to Section 6.5 and to the extent required for the Parties to give effect to Section 6.4, upon termination or expiration of this Agreement, the following shall occur: + +6.3.1 Each Party shall (i) immediately stop displaying, featuring, linking or in any other manner using the Company-Skype Branded Application (provided in the case of Skype, other than the Skype Software in the Company-Skype Branded Application), Company-Skype Toolbar, Company-Skype Branded Web Site, Company-Skype Branded Content, any co-branded materials or any other Intellectual Property of the other Parties (including, without limitation, Intellectual Property deemed to be owned by the other Parties under Section 4.2.3.2); (ii) return such materials directly to the other Parties, or delete and overwrite any electronically stored copies of such materials within thirty (30) days from the date of termination of this Agreement; (iii) within such thirty (30) day period, deliver to the other Parties a certificate duly executed by its authorised officer certifying its compliance with the foregoing, and (iv) provide the other Parties with such information and access to data and databases as may be necessary to permit such other Parties to fulfil any contractual obligations by them to users of the Company-Skype Branded Application undertaken by such other Parties prior to the time of termination. + +6.3.2 The Parties agree that upon termination of this Agreement, all Links, if any, between the Skype Site and the Online BVI Web Site or the Company-Skype Branded Web Site shall be removed. + +6.3.3 The termination or expiration of this Agreement shall not act as a waiver of any breach of this Agreement and shall not act as a release of either party for any liability or obligation, including, without limitation, any payment due pursuant to Section 5.3, incurred under this Agreement. + +6.4 The Parties agree that notwithstanding any termination or expiration of this Agreement, the rights and licenses granted to any Company- Skype Branded Customers prior to termination or expiration of this Agreement pursuant to any EULA shall continue during the 24 months after such termination or expiration for the sole purpose of permitting such users to continue to access and utilize the Company-Skype Branded Application and the Company-Skype Toolbar, and so long as any Gross Revenue is received with respect to the Company-Skype Branded Application and/or the Company-Skype Toolbar, the provisions of Section 5 shall continue to be applicable after any termination or expiration. + +6.5 Except as otherwise set forth in Section 4.2.3.2.3 and this Section 6, upon termination or expiration of this Agreement all rights and licenses granted hereunder shall immediately terminate. + +7. REPRESENTATIONS AND WARRANTIES + +7.1 Mutual Representations and Warranties. Each of the parties to this Agreement warrant and represent that it has the full right and power to enter into this Agreement and that no contractual right of any third party will be violated, breached or negatively impacted by entering into this Agreement. Skype further warrants and represents that the Skype Rights will not contain any libelous or otherwise unlawful material or violate any copyright, trade mark, or personal or proprietary right of any Person, regardless of whether such rights arise under the laws of the PRC, the United States, European Union, or any other state, country or jurisdiction. Online BVI further warrants and represents that the Group Rights will not contain any libelous or otherwise unlawful material or violate any copyright, trade mark, or personal or proprietary right of any Person, regardless of whether such rights arise under the laws of the PRC, the United States, European Union, or any other state, country or jurisdiction. 18 + +Source: TOM ONLINE INC, 20-F, 5/1/2006 + + + + + +7.2 No Representation as to Number of Users, Capabilities or Revenue Hereunder. For the avoidance of doubt, and notwithstanding any portion of this Agreement to the contrary, no party to this Agreement has made and no party to this Agreement does hereby make any representation or warranty with respect to the quantity of Company-Skype Branded Customers (if any) that shall arise hereunder, the commercial success of the Company-Skype Branded Application, Company-Skype Toolbar or Company-Skype Branded Web Site, the future features or functionality of the Company-Skype Branded Application, Company-Skype Toolbar or the aggregate revenues to be received by the parties to this Agreement. + +8. NON-COMPETITION + +8.1 Non-Competition. + +8.1.1 Each Party agrees that, for a period of five years ("Non-Competition Period") from the Effective Date ("End Date"), no Party, nor any of their respective Affiliates, will enter into an agreement with any third party, or otherwise carry on any business, directly or indirectly, which is focused on, and targets, primarily Consumers within the PRC, and (i) in the case of Skype and Skype Holding, which provides for a co-branded Internet-based application in simplified Chinese similar in functionality and features as the Company-Skype Branded Application (as may be updated or upgraded from time to time) (and for the avoidance of doubt, a co-branded Internet-based application in simplified Chinese shall be similar in functionality and features as the Company-Skype Branded Application only in the event such application is a customized co-branded version of the Skype Software having one or more functionality or features contained in the Company-Skype Branded Application), or provides for distribution in the PRC of the Skype Software in simplified Chinese by a Primarily PRC Based Service Provider; and (ii) in the case of Online BVI, Tom Holding and the Company, which provides for any voice over internet protocol and/or instant messaging products or services that compete or are likely to compete with the Skype Software. + +8.1.2 Each Party agrees that, from the Effective Date and through the three (3) month period ("Enterprise Non-Competition Period") immediately following the date ("Enterprise Launch Date") that Skype launches an enterprise version of the Skype Software primarily targeted for non-Consumer customers ("Enterprise Skype Software"), no Party, nor any of their respective Subsidiaries, will (i) discuss, negotiate or enter into (whether verbal or in writing) with any third Person or other third party ("Other Party") any understanding, arrangement, or memorandum of understanding, letter of intent, agreement or any other documents (whether or not legally binding); and/or (ii) voluntarily accept or solicit any offer made by any Other Party in respect of or in relation to, (a) in the case of Skype, an enterprise co-branded Internet-based application in simplified Chinese that is focused on, and targeted primarily at, non-Consumers within the PRC, and that is substantially similar in functionality and features as the Enterprise Skype Software, and (b) in the case of Online BVI, Tom Holding and the Company, any voice over internet protocol and/or instant messaging products or services that compete or are likely to compete with the Enterprise Skype Software. During the Enterprise Non-Competition Period, the Parties agree to use their commercially reasonable efforts to discuss mutually agreeable terms pursuant to which the Company would, and Online BVI would cause the Company to, promote, market and distribute in the PRC an enterprise co-branded Internet-based application in simplified Chinese that is focused on, and targeted primarily at, non-Consumers within the PRC, and that is substantially similar in functionality and features as the Enterprise Skype Software. 19 + +Source: TOM ONLINE INC, 20-F, 5/1/2006 + + + + + +8.2 Skype Exception. In the case of Skype and its Affiliates, the foregoing restrictions shall not apply: + +8.2.1 (a) (i) for the avoidance of doubt, to the operations of Skype as existing now or hereafter undertaken with respect to any non co- branded version of the Skype Software distributed by Skype except where those operations provide for distribution in the PRC of the Skype Software in simplified Chinese by a Primarily PRC Based Service Provider, or (ii) the operations of Skype customers and Affiliates under any agreement existing as of the date hereof (e.g., with HGC), or (b) to any agreement now existing or hereafter entered into with an entity that operates in multiple international markets, which may include the PRC, so long as such agreement applies to multiple territories, which may include the PRC in addition to other territories, and does not, directly or indirectly, allow or provide for distribution in the PRC of the Skype Software in simplified Chinese by a Primarily PRC Based Service Provider (other than any service provider formed for the sole purpose of performing such agreement and not operating in the PRC prior to the date of such agreement), or (c) to any (i) Affiliate Program or (ii) any agreement or activity under the Affiliate Program by or with any third party, except in the case where the Affiliate Program, directly or indirectly, allows or provides for distribution in the PRC of the Skype Software in simplified Chinese by a Primarily PRC Based Service Provider (other than any service provider formed for the sole purpose of performing such agreement and not operating in the PRC prior to the date of such agreement); or + +8.2.2 with respect to the provisions of Section 8.1.2, during any period following the expiration of the Enterprise Non-Competition Period. + +8.3 Termination of Non-Competition Period. Notwithstanding any portion of the foregoing to the contrary, the Non-Competition Period shall terminate prior to the End Date, and for the avoidance of doubt, no party shall be obligated to comply with the restrictions set out in Section 8.1 after the termination of the Non-Competition Period: + +8.3.1 within thirty (30) days of the end of the Type One Cure Period (defined below) where: + +8.3.1.1 Skype or Online BVI has delivered a notice ("Type One Notice") to (i) the Company and Online BVI (in the case of Skype), or (ii) the Company and Skype (in the case of Online BVI), in the event that: + + (A) the SkypeOut or SkypeIn service has been available for use in the PRC for at least forty-five (45) days; and + + + +(B) neither the Company nor Online BVI are providing services themselves or making available services for the SkypeOut or SkypeIn service, which in each case are reasonably accessible to all Company-Skype Branded Customers, which allow the Company-Skype Branded Customers to make payment for the Company-Skype Branded Application, including, without limitation, by at least one of the following methods: prepaid cards or mobile phone billing or online payment gateway or telephone company billing; and 20 + +Source: TOM ONLINE INC, 20-F, 5/1/2006 + + + + + +8.3.1.2 the circumstances under Section 8.3.1.1(B) have not been cured by the end of the full calendar month following the delivery of the Type One Notice ("Type One Cure Period"); and + +8.3.1.3 the Party who delivers the Type One Notice gives notice to the other Parties of its intention to exercise its right to end the Non-Competition Period within 30 days of the expiry of the Type One Cure Period.; or 8.3.2 within thirty (30) days of the end of the Type Two Cure Period (defined below) where: + +8.3.2.1 Skype or Online BVI has delivered a notice ("Type Two Notice") to (i) the Company and Online BVI (in the case of Skype), or (ii) the Company and Skype (in the case of Online BVI), in the event that, either: + + + +(A) in any calendar quarter (measured as of the last day of the applicable calendar quarter) during the Non-Competition Period ("Quarter"), the total number of Customers utilizing the Company-Skype Branded Application does not increase at a growth rate (i.e., the number of new registered users as of the last day of the Quarter divided by the total number of registered users on the first day of the same Quarter ) that is equal to or better than 50% of the growth rate of the number of Skype customers using the non-co-branded versions of the Skype Software for the same period (determined by excluding from the denominator and the numerator any Skype customers obtained by Skype by corporate merger or acquisition of another VOIP business, and through any other co-branding relationships); or + + + +(B) in any two consecutive calendar quarters (measured as of the last day of each applicable calendar quarter) during the Non- Competition Period ("Consecutive Quarters"), the total number of Customers utilizing the Company-Skype Branded Application does not increase at a growth rate in either one of the Consecutive Quarters (i.e., the number of new registered users as of the last day of each of the Consecutive Quarters divided by the total number of registered users on the first day of the same quarter) that is equal to or better than 70% of the growth rate of the number of Skype customers using the non-co-branded versions of the Skype Software in the same two quarter period (determined by excluding from the denominator and the numerator any Skype customers obtained by Skype by corporate merger or acquisition of another VOIP business, and through any other co-branding customers), + +provided that where there is any period ("Affected Period") during a Quarter (in the case of Section 8.3.2.1(A)) or any one of the Consecutive Quarters (in the case of Section 8.3.2.1(B)) in which there is any act or embargo of governmental, quasi-governmental or regulatory authorities or any regulations or restrictions imposed, whether by such authorities, by law or by court action ("Regulatory Event"), directly or indirectly affecting the performance by any Party of any obligation hereunder or otherwise affecting the number of Customers utilizing the Company-Skype Branded Application and a notice of such Regulatory Event has been given by a Party to the other Parties, the Quarter and/or Consecutive Quarters (as the case may be) for calculating any growth rate under Section 8.3.2.1(A) and/or Section 8.3.2.1(B) (as the case may be) shall be deemed to commence on the first day of the full calendar month immediately after the end of the Affected Period (provided that where a Regulatory Event continues for more than three months, the Affected Period in respect of such Regulatory Event shall be deemed to have ended at the end of the third month following the delivery of notice of such Regulatory Event by the applicable Party and the applicable Party shall not be entitled to deliver another notice for such Regulatory Event which was so deemed to have ended) and any period between the end of the previous Quarter and/or Consecutive Quarters (as the case may be) and the start of the Affected Period shall be disregarded for the purposes of calculating the growth rate under Section 8.3.2.1(A) and Section 8.3.2.1(B); and 21 + +Source: TOM ONLINE INC, 20-F, 5/1/2006 + + + + + +8.3.2.2 the growth rate specified in Section 8.3.2.1(A) or Section 8.3.2.1(B) (as the case may be) has not been met when calculated for the applicable Quarter or Consecutive Quarters (as the case may be), and the required growth rate fails to have been met when calculated for the period beginning on the first day of the applicable Quarter or Consecutive Quarters (as the case may be) specified in the Type Two Notice (as the Quarter or Consecutive Quarters in which the relevant growth rate was not met) and ending on the last day of the full calendar month immediately following the date of delivery of the Type Two Notice (or where such calendar month is affected by a Regulatory Event, the last day of the full calendar month immediately after the end of the Affected Period) (such cure period shall be referred to herein as "Type Two Cure Period"); and + +8.3.2.3 the Party who delivers the Type Two Notice gives notice to the other Parties of its intention to exercise its right to end the Non-Competition Period within 30 days of the expiry of the Type Two Cure Period. + +9. LICENSES + +9.1 The Group shall, and Online BVI shall cause the Group to, use its reasonable endeavours to obtain from the applicable PRC regulatory authorities such licenses as are necessary for the operation of their respective businesses in the PRC ("Operating Licenses"). + +9.2 The parties to this Agreement agree that, during the Term and prior to the obtaining by the Group of the Operating Licenses, the Online Group will act as agent for the Group in carrying out such distribution of the Company-Skype Branded Application or other activities as are restricted under PRC laws and regulations to holders of the relevant licenses which activities are represented by the Online Group to be permitted under the licenses held by the Online Group. + +10. DEPENDENCY + +10.1 In the event that a Tom Party, a Skype Party, the Company or any other member of the Group ("Affected Party") is prevented from performing an obligation or undertaking or complying with any provision under this Agreement as a direct result of a breach of any of the terms of this Agreement or the Deed ("Breach") by: + + 10.1.1 in the case of a Tom Party, a Skype Party; + + 10.1.2 in the case of a Skype Party, a Tom Party; and + + 10.1.3 in the case of the Company or any member of the Group, a Skype Party or a Tom Party, + +and the Affected Party provides written notice to the breaching party detailing the Breach and requiring the breaching party to cure the Breach within thirty (30) days of the date of the notice, the Affected Party shall not be obligated to perform the relevant obligation or undertaking affected by the Breach so long as such Breach continues uncured where such non-performance or non-compliance would be deemed a material breach of this Agreement or the Deed, and shall not be liable for such material breach. For the avoidance of doubt, the withholding by any Party of consent as a Shareholder under the Deed, as such consent may be required in the Deed from time to time (including, without limitation, pursuant to clause 6 thereof), shall not be deemed a Breach. 22 + +Source: TOM ONLINE INC, 20-F, 5/1/2006 + + + + + +11. CONFIDENTIAL INFORMATION + +11.1 Each party to this Agreement acknowledges and agrees that by reason of its relationship to the other parties to this Agreement it will have access to and acquire knowledge from, material, data, systems and other information concerning the operation, business, financial affairs, products, customers and intellectual property of the other parties to this Agreement that may not be accessible or known to the general public, including, but not limited to the terms of this Agreement ("Confidential Information"). The parties to this Agreement agree that Confidential Information shall remain the sole and exclusive property of the disclosing party ("Disclosing Party"), and the receiving party ("Receiving Party") agrees to maintain the Confidential Information in strict confidence and to use Confidential Information solely for the purposes set forth in this Agreement. The parties to this Agreement further acknowledge and agree for the purposes of this Section 11, Confidential Information shall be deemed to include all Skype Intellectual Property and all Online BVI Intellectual Property, as applicable. + +11.2 The Receiving Party agrees: (i) that it will maintain and preserve the confidentiality of all Confidential Information, including, but without limitation, taking such steps to protect and preserve the confidentiality of the Confidential Information as it takes to preserve and protect the confidentiality of its own confidential information; (ii) that it will disclose such Confidential Information only to its own Affiliates and employees on a "need-to-know" basis only, and only to those Affiliates and employees who have entered into a confidentiality agreement, the obligations of which are at least as stringent as those contained in this Section 11; (iii) that if software is involved, it will not disassemble, "reverse engineer," "reverse compile" or analyze the inputs and outputs of any software or hardware provided under this Agreement for any purpose, including but not limited to, attempting to ascertain or deduce the functionality or workings of the software or hardware; and (iv) that it will not disclose such Confidential Information to any third party (including subcontractors and consultants) without the express written consent of the Disclosing Party, provided, however, that the Receiving Party may disclose the financial terms of this Agreement and/or any Statement of Work to its legal and business advisors and to potential investors, so long as such third parties have entered into a confidentiality agreement with the Receiving Party, the obligations of which are at least as stringent as those contained in this Section 11. + +11.3 The Receiving Party agrees (i) not to alter or remove any identification of any copyright, trade mark or other proprietary rights notice which indicates the ownership of any part of the Confidential Information, and (ii) to notify the Disclosing Party of the circumstances surrounding any possession, use or knowledge of the Confidential Information by any Person other than those authorized by this Agreement. + +11.4 Confidential Information shall exclude any information that (i) has been or is obtained by the Receiving Party from a source independent of the Disclosing Party and not receiving such information from the Disclosing Party, (ii) is or becomes generally available to the public other than as a result of an unauthorized disclosure by the Disclosing Party or its personnel, (iii) is independently developed by the Receiving Party without reliance in any way on the Confidential Information provided by the Disclosing Party, (iv) the Receiving Party is required to disclose under judicial order, regulatory requirement, or statutory requirement, provided that the Receiving Party provides written notice and an opportunity for the Disclosing Party to take any available protective action prior to such disclosure, or (v) is owned by the Disclosing Party pursuant to the terms hereof or provided on a non-confidential basis under the terms hereof. 23 + +Source: TOM ONLINE INC, 20-F, 5/1/2006 + + + + + +12. DISCLAIMER & LIMITATION OF LIABILITY + +12.1 Disclaimer of Warranties. THE WARRANTIES SET FORTH HEREIN ARE LIMITED WARRANTIES AND ARE THE ONLY WARRANTIES MADE BY THE RESPECTIVE PARTIES TO THIS AGREEMENT. THE PARTIES TO THIS AGREEMENT EXPRESSLY DISCLAIM, AND HEREBY EXPRESSLY WAIVE, ALL OTHER WARRANTIES AND ALL OTHER CONDITIONS, TERMS AND UNDERTAKINGS WHATSOEVER, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY, PERFORMANCE, QUALITY AND FITNESS FOR A PARTICULAR PURPOSE AND SUCH WARRANTIES, CONDITIONS, TERMS AND UNDERTAKINGS ARE EXCLUDED TO THE FULLEST EXTENT PERMITTED BY LAW. EXCEPT AS MAY BE SET FORTH HEREIN, THE SKYPE SOFTWARE IS LICENSED "AS IS" WITHOUT WARRANTY OF ANY KIND. IN ADDITION, NO PARTY TO THIS AGREEMENT MAKES ANY REPRESENTATION THAT THE OPERATION OF ITS RESPECTIVE PRODUCTS, SERVICES OR WEB SITES WILL BE UNINTERRUPTED OR ERROR-FREE, THAT DEFECTS WILL BE CORRECTED, AND THAT THE PRODUCTS, SERVICES OR WEB SITE WILL BE FREE OF VIRUSES OR OTHER HARMFUL COMPONENTS. + +12.2 Limitation of Liability. + +12.2.1 TO THE MAXIMUM EXTENT PERMISSIBLE UNDER APPLICABLE LAW, EXCEPT FOR THE WILFUL MISAPPROPRIATION OR INFRINGEMENT OF THE INTELLECTUAL PROPERTY OF A PARTY TO THIS AGREEMENT, OR THE OBLIGATIONS OF THE PARTIES TO THIS AGREEMENT PURSUANT TO SECTION 13, (A) THE LIABILITY OF ANY PARTY TO THIS AGREEMENT, IF ANY, FOR DAMAGES FOR ANY CLAIM OF ANY KIND WHATSOEVER AND REGARDLESS OF THE LEGAL THEORY, WITH REGARD TO THE RIGHTS GRANTED HEREUNDER OR THE SERVICES PERFORMED HEREUNDER, SHALL NOT INCLUDE COMPENSATION, REIMBURSEMENT OR DAMAGES ON ACCOUNT OF THE LOSS OF PRESENT OR PROSPECTIVE PROFITS, EXPENDITURES, DATA, OPPORTUNITY, ANTICIPATED SAVINGS, INVESTMENTS OR COMMITMENTS, WHETHER MADE IN ESTABLISHMENT, DEVELOPMENT OR MAINTENANCE OF REPUTATION OR GOODWILL OR FOR ANY OTHER REASON WHATSOEVER; AND (B) IN NO EVENT SHALL ANY PARTY TO THIS AGREEMENT BE LIABLE TO THE OTHER PARTIES TO THIS AGREEMENT FOR SPECIAL, INDIRECT, CONSEQUENTIAL, INCIDENTAL, PUNITIVE OR CONSEQUENTIAL DAMAGES. THE PARTIES ACKNOWLEDGE AND AGREE THAT NOTHING IN THIS SECTION 12.2 SHALL LIMIT A PARTY'S OBLIGATION TO PAY ANY AMOUNTS DUE AND OWING TO THE OTHER PARTY UNDER SECTION 5 ON OR BEFORE ANY DATE OF EXPIRATION OR TERMINATION HEREOF. + +13. INDEMNIFICATION + +13.1 Company Indemnification. Tom Holding unconditionally guarantees the timely performance of all of the obligations of Online BVI, the Group and the Online Group hereunder, and agrees to defend, indemnify, and hold harmless Skype, Skype Holding, their affiliated companies and Subsidiaries and their respective officers, directors, employees and agents from and against any loss, claim, cost, expense, liability or damage, including reasonable attorney's fees and costs resulting from a third-party claim that directly arises from: (i) a claim that the Group Rights infringe the intellectual property or other proprietary rights of any third party; (ii) a breach of the Online Group's and the Group's representations and warranties hereunder made; (iii) the performance of the Online Group's and the Group's obligations hereunder; or (iv) the Online Group's and the Group's, or their respective employees' negligence, misrepresentations or other tortious, illegal or unauthorized conduct in the promotion of the Company-Skype Branded Application or any other act or omission arising out of or relating to this Agreement. Such indemnification obligation of Tom Holding is conditioned upon Skype promptly notifying Tom Holding in writing setting forth with specificity the claim or action to which such indemnification obligation applies, and reasonable cooperation, information, and assistance in connection therewith. Tom Holding will have the right to control the defense of each such claim and any lawsuit or proceeding arising therefrom. In no event will Skype settle any such claim or lawsuit or proceeding arising therefrom without the prior written approval of Tom Holding. In defending against such claim or action, Tom Holding may (i) contest; (ii) settle; (iii) and in the case of any claim that the Group Rights infringe the intellectual property or other proprietary rights of a third party, (a) procure for Skype and its customers the right to continue using the Group Rights, as applicable, or (b) modify or replace the Group Rights, as applicable, so that it they longer infringe. 24 + +Source: TOM ONLINE INC, 20-F, 5/1/2006 + + + + + +13.2 Skype Indemnification. Skype Holding unconditionally guarantees the timely performance of all of the obligations of Skype hereunder, and agrees to defend, indemnify, and hold harmless Online BVI, Tom Holding, the Company and any member of the Online Group and the Group, its affiliated companies and Subsidiaries and their respective officers, directors, employees and agents from and against any loss, claim, cost, expense, liability or damage, including reasonable attorney's fees and costs resulting from a third-party claim that directly arises from: (i) a claim that the Skype Rights infringe the intellectual property or other proprietary rights of any third party; (ii) a breach of Skype's representations and warranties hereunder made; (iii) the performance of its obligations hereunder; or (iv) its or its employees' negligence, misrepresentations or other tortious, illegal or unauthorized conduct in the promotion of the Company-Skype Branded Application or any other act or omission arising out of or relating to this Agreement. Such indemnification obligation of Skype is conditioned upon Tom Holding promptly notifying Skype Holding in writing setting forth with specificity the claim or action to which such indemnification obligation applies, and reasonable cooperation, information, and assistance in connection therewith. Skype Holding will have the right to control the defense of each such claim and any lawsuit or proceeding arising therefrom. In no event will the Online Group or the Group settle any such claim or lawsuit or proceeding arising therefrom without the prior written approval of Skype Holding. In defending against such claim or action, Skype Holding may (i) contest; (ii) settle; (iii) and in the case of any claim that the Skype Rights infringe the intellectual property or other proprietary rights of a third party, (a) procure for Online Group and its customers, or the Group, the right to continue using the Skype Rights, as applicable, or (b) modify or replace the Skype Rights, as applicable, so that it they longer infringe. + +13.3 Guarantor. The guarantees in the foregoing clauses are to be continuing guarantees and accordingly to remain in force until all the obligations or liabilities of the relevant parties shall have been performed or satisfied in full. Subject to any other provisions of this Agreement, the guarantees are in addition to and without prejudice to and not in substitution for any rights or security which parties may now or hereafter have or hold for the performance and observance of the obligations, commitments, undertakings and warranties of the parties under this Agreement. + +13.4 Notice; Participation. The party claiming indemnification pursuant to this Section 13 ("Indemnified Party") shall promptly notify the other party ("Indemnifying Party") of any such claim of which it becomes aware and shall: (i) at the Indemnifying Party's expense, provide reasonable cooperation to the Indemnifying Party in connection with the defense or settlement of any such claim, and (ii) at the Indemnified Party's expense, be entitled to participate in the defense of any such claim. + +13.5 Infringement Remedy. If a claim, action, suit or proceeding is brought against the Skype Group under Section 13.1(i), or against the Online Group or the Group under Section 13.2(i), resulting from any party's respective use of the other party's Intellectual Property, then the Indemnifying Party may at its own election (and at its own expense) (i) replace substantially equivalent Intellectual Property for the infringing item, (ii) modify or fix the infringing item so that it no longer infringes but remains functionally equivalent, (iii) obtain for the benefit of the other party the right to continue using such item in accordance with this Agreement, or (iv) immediately terminate this Agreement. THE FOREGOING PROVISIONS OF THIS SECTION 13.5 STATE THE ENTIRE LIABILITY AND THE EXCLUSIVE REMEDY OF THE PARTIES TO THIS AGREEMENT WITH RESPECT TO INFRINGEMENT OR ALLEGED INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS. 25 + +Source: TOM ONLINE INC, 20-F, 5/1/2006 + + + + + +13.6 Settlement. The Indemnified Party agrees that the Indemnifying Party shall have sole and exclusive control over the defense and settlement of any such third party claim. However, the Indemnifying Party shall not acquiesce to any judgment or enter into any settlement that adversely affects the Indemnified Party's rights or interests without prior written consent of the Indemnified Party. + +14. GENERAL + +14.1 Effect of Termination of Deed; References to Company. In the event that, while this Agreement remains in effect, (i) the Deed is terminated pursuant to the terms thereof, or (ii) the Company is being or has been wound up, liquidated or dissolved, Online BVI shall assume the rights and obligations of the Company hereunder. + +14.2 Governing Law. This Agreement will be governed by and construed in accordance with the laws of England and Wales, without regard to conflict of laws principles. Subject to the parties' rights to seek injunctive relief or other right in equity by any court of competent jurisdiction, the parties to this Agreement expressly understand and agree that any dispute arising under this Agreement will be brought exclusively in the courts located in England and Wales and the parties to this Agreement hereby consent to the exclusive personal jurisdiction and venue therein. The foregoing shall not preclude the parties to this Agreement from seeking injunctive relief permitted hereunder in courts with such jurisdiction as may be needed to grant injunctive relief for protection of that party's intellectual property rights. Each of the parties to this Agreement hereby irrevocably appoints the following persons as its agent to receive and acknowledge on its behalf service of any writ, summons, order, judgment or other notice of legal process in England: + +For Online BVI and Tom Holding: + +Simmons & Simmons Citypoint One Ropemaker Street London EC2Y 9SS United Kingdom + +For Skype and Skype Holding: + +S Technologies 2nd Floor, 7-11 Lexington Street London W1F 9AF United Kingdom + +For the Company: + +Simmons & Simmons Citypoint One Ropemaker Street London EC2Y 9SS United Kingdom 26 + +Source: TOM ONLINE INC, 20-F, 5/1/2006 + + + + + +If for any reason the relevant agent named above (or its successor) refuses to serve or no longer serves as agent of the Company or Online BVI/Tom Holding or, as the case may be, Skype/Skype Holding for this purpose, the Company or Online BVI/Tom Holding or, as the case may be, Skype/Skype Holding` shall promptly appoint a successor agent, notify each of the other parties thereof and deliver to each of the other parties a copy of the new process agent's acceptance of appointment, provided that until each of the other parties receive such notification, the party or parties not having received such notification shall be entitled to treat the agent named above (or its said successor) as the agent of such party for the purposes of this Section 14.2. Each of the parties to this Agreement agrees that any such legal process shall be sufficiently served on it if delivered to such agent for service at its address set forth above whether or not such agent gives notice thereof to it. + +14.3 Entire Agreement; Termination of Memorandum. This Agreement, including the Exhibits attached hereto, and the Deed, constitute the entire Agreement and understanding between the parties to this Agreement and integrates and supersedes all prior discussions, agreements or arrangements between them related to its subject matter. No modification of any of the terms of this Agreement shall be valid unless in writing and signed by an authorized representative of each party to this Agreement. Upon execution of this Agreement by all parties to this Agreement, the Memorandum shall be deemed terminated and cancelled. Each party acknowledges that in entering into this Agreement, it does not rely on, has not relied on, and shall have no remedy in respect of, any statement, representation, warranty or other provision (in any case whether oral or written, express or implied and whether negligently or innocently made) of any Person (whether a party to this Agreement or not) which is not expressly set out in this Agreement and the only remedy available in respect of any misrepresentation or untrue statement made to such party shall be a claim for breach of contract under this Agreement except to the extent that the misrepresentation or untrue statement is repeated in this Agreement in which case any remedies for misrepresentation shall be unaffected and nothing in this clause shall operate to limit or exclude any liability arising from any fraudulent or dishonest statement, act or omission. + +14.4 Assignment. This Agreement may not be assigned by a party to this Agreement to any other Person without the express written approval of the other parties to this Agreement and any attempt at assignment in violation of this section shall be null and void. Notwithstanding the foregoing, Skype or Skype Holding may assign this Agreement to a third party without such consent in the event of a merger, reorganization or sale of all or substantially all of Skype's or Skype Holding's assets or voting securities, provided that written notice of such assignment is delivered to Online BVI and the Company and the assignee assumes all the responsibilities and obligations provided herein. + +14.5 Notices. All legal notices required or permitted hereunder shall be given in writing addressed to the respective parties to this Agreement as set forth below and shall either be (i) personally delivered, (ii) transmitted by postage prepaid certified mail, return receipt requested, or (iii) transmitted by nationally recognized private express courier, and shall be deemed to have been given on the date of receipt if delivered personally, or three (7) days after deposit in mail or three (3) days if delivered by express courier. A party to this Agreement may change its address for purposes hereof by written notice to the other in accordance with the provisions of this Section 14.5. The addresses for the parties to this Agreement are as set forth in the preamble hereof, with attention in each case to the respective Chief Executive Officer. + +14.6 Rights to Injunctive Relief. The parties to this Agreement acknowledge that remedies at law or damages may be inadequate to the other parties to this Agreement to provide full compensation in the event of a material breach relating to the other parties' obligations, representations, and warranties hereunder, and each party to this Agreement shall therefore be entitled to seek injunctive relief or specific performance in the event of any actual or threatened material breach by a party to this Agreement. 27 + +Source: TOM ONLINE INC, 20-F, 5/1/2006 + + + + + +14.7 Waiver. The waiver, express or implied, by a party to this Agreement of any breach of this Agreement by another party to this Agreement will not waive any subsequent breach by such party of the same or a different kind. A failure to exercise or delay in exercising any right, remedy or power provided under this Agreement or by law does not constitute a waiver of the right, remedy or power or a waiver of any other right, remedy or power. No single or partial exercise of any right, remedy or power prevents any further exercise of it or the exercise of any other right, remedy or power. Except where this Agreement provides otherwise, the rights, remedies and powers provided by this Agreement are cumulative and not exclusive of any rights, remedies or powers provided by law. + +14.8 Headings. The headings to the Sections and Exhibits of this Agreement are included merely for convenience of reference and shall not affect the meaning of the language included therein. + +14.9 Independent Contractors. The parties to this Agreement acknowledge and agree that they are dealing with each other hereunder as independent contractors. Nothing contained in this Agreement shall be interpreted as constituting any party the joint venturer, employee or partner of the other party or as conferring upon any party the power of authority to bind another party in any transaction with third parties. + +14.10 Severability. In the event any provision of this Agreement is held by a court or other tribunal of competent jurisdiction to be unenforceable, such provision shall be reformed only to the extent necessary to make it enforceable, and the other provisions of this Agreement will remain in full force and effect. + +14.11 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. For purposes hereof, a facsimile copy of this Agreement, including the signature pages hereto, shall be deemed to be an original. Notwithstanding the foregoing, the parties to this Agreement shall deliver original execution copies of this Agreement to one another as soon as practicable following execution thereof. + +14.12 Attorney's Fees. Should a party hereto initiate a legal or administrative action or proceeding ("Action") to enforce any of the terms or conditions of this Agreement, the prevailing party (as determined by the court or other fact-finder) shall (to the extent permitted by English law) be entitled to recover from the losing party or parties all reasonable costs of the Action, including without limitation attorneys' fees and costs. + +14.13 Further Assurances. Each Party shall promptly execute and deliver all such documents, and do all such things, as the other Party may from time to time reasonably require for the purpose of giving full effect to the provisions of this Agreement. + +14.14 Governing Language. This Agreement is in the English language only, and all communications between the parties relative to this Agreement shall be conducted in the English language only. + +14.15 Survival. Sections 1, 4.2 (but not 4.2.3.2.4), 5.4, 6.3, 6.4, 6.5, 7, 11, 12, 13, and 14 and the obligation to pay any amount accrued but not yet paid shall survive termination or expiration of this Agreement. + +14.16 The parties agree that the provisions of this Agreement are personal to them and are not intended to confer any rights of enforcement on any third party. The Contracts (Rights of Third Parties) Act 1999 shall not apply to this Agreement or to any of its provisions. 28 + +Source: TOM ONLINE INC, 20-F, 5/1/2006 + + + + + +IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the Effective Date. SKYPE COMMUNICATIONS, S.A. + +By: Its: Chief Executive Officer + +SKYPE TECHNOLOGIES , S.A. + +By: Its: Chief Executive Officer + +TOM ONLINE (BVI) LIMITED + +By: Its: Chief Executive Officer + +TOM ONLINE INC. + +By: Its: Chief Executive Officer + +TEL-ONLINE LIMITED + +By: Its: Director 29 + +Source: TOM ONLINE INC, 20-F, 5/1/2006 + + + + + +EXHIBIT A + +FORM OF STATEMENT OF WORK 1. Introduction: + +The following is Statement of Work No. ("Statement of Work"), made as of , 200 , to the Co-Branding Agreement ("Agreement") executed on August 22, 2005, by and among (a) Skype Communications, S.A., a Luxembourg limited company (société anonyme) ("Skype"), with its principal place of business at 6 rue Adophe Fischer, L-1520 Luxembourg, Luxembourg, (b) Skype Technologies, S.A., a Luxembourg limited company (société anonyme) ("Skype Holding"), with its principal place of business at 6 rue Adolphe Fischer, L-1520 Luxembourg; (c) Tom Online (BVI) Limited, a company formed under the laws of the British Virgin Islands ("Online BVI"), whose correspondence address is at 8th Floor, Tower W3, Oriental Plaza No.1 Dong Changan Avenue, Dong Chang District, Beijing 100738, PRC; (d) Tom Online Inc., a Cayman Islands corporation ("Tom Holding"), a company listed on GEM Board of The Stock Exchange of Hong Kong and NASDAQ, with its correspondence address at 8th Floor, Tower W3, Oriental Plaza No.1 Dong Changan Avenue, Dong Chang District, Beijing 100738, PRC; and Tel-Online Limited, a company formed under the laws of the Cayman Islands ("Company"), whose correspondence address is at 8th Floor, Tower W3, Oriental Plaza No.1 Dong Changan Avenue, Dong Chang District, Beijing 100738, PRC. Except as specifically stated herein, each capitalized term used in this Statement shall have the same meaning as is assigned to it in the Agreement. The effective date ("Effective Date") of this Statement is , , 200 . 2. General Description of Services: + +[TO BE ADDED] 3. Deliverables: + +[TO BE ADDED] 4. Completion Dates: + +[TO BE ADDED] 5. Fees: + +[TO BE ADDED] 6. Term: + +[TO BE ADDED] 7. Contributor's Agreement: + +The Company will, and Online BVI will cause the Company to, require any employee or independent contractor who works on or provides materials or services pursuant to Paragraph 3 above to execute a Contributor's Agreement in a form reasonably acceptable to Skype. Upon Skype's request, the Company will, and Online BVI will cause the Company to, provide Skype copies of all executed Contributor's Agreements. + +Source: TOM ONLINE INC, 20-F, 5/1/2006 + + + + + +Online BVI and the Company agree that the Project Manager listed below as Company Project Manager has full authority to direct and provide feedback relating to the Services described in this Statement. Any party may change its Project Manager from time to time, upon notice to the other parties and subject to the qualifications set forth in the preceding sentence. Company Project Manager: Skype Project Manager: ____________________________________________________ ____________________________________________________ + +____________________________________________________ ____________________________________________________ Phone:_______________________________________________ Phone: _______________________________________________ Fax: ________________________________________________ Fax: ________________________________________________ E-mail: ______________________________________________ E-mail: ______________________________________________ + +IN WITNESS WHEREOF, the parties hereto have agreed to this Statement of Work as of the Effective Date written above. SKYPE COMMUNICATIONS, S.A. + +By: Its: Chief Executive Officer + +SKYPE TECHNOLOGIES , S.A. + +By: Its: Chief Executive Officer + +TOM ONLINE (BVI) LIMITED + +By: Its: Chief Executive Officer + +TOM ONLINE INC. + +By: Its: Chief Executive Officer + +TEL-ONLINE LIMITED + +By: Its: Director + +Source: TOM ONLINE INC, 20-F, 5/1/2006 \ No newline at end of file diff --git a/full_contract_txt/TubeMediaCorp_20060310_8-K_EX-10.1_513921_EX-10.1_Affiliate Agreement.txt b/full_contract_txt/TubeMediaCorp_20060310_8-K_EX-10.1_513921_EX-10.1_Affiliate Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..b5ef85e3ebc1ed8b4f3c46cc113a0ded06643dd3 --- /dev/null +++ b/full_contract_txt/TubeMediaCorp_20060310_8-K_EX-10.1_513921_EX-10.1_Affiliate Agreement.txt @@ -0,0 +1,257 @@ +Execution Copy CHARTER AFFILIATE AFFILIATION AGREEMENT THIS AGREEMENT (the "Agreement"), made as of the 6t h day of March, 2006 (the "Effective Date"), is by and between The TUBE Music Network, Inc., a Florida corporation (the "Network"), and Tribune Broadcasting Company, a Delaware corporation ("Affiliate"), regarding the television programming service currently known as "The TUBE" (the "Service"). The parties hereby mutually agree as follows: + +1. DEFINITIONS: In addition to any other defined terms in this Agreement, the following terms shall have the following meanings when used in this Agreement: "Acquired Station" means any Broadcast Television station that is acquired by Affiliate after the Effective Date. "Affiliate Advertising Share" has the meaning set forth in Exhibit D. "Affiliate Launch Date" means the date on which the Service is initially transmitted by the first of Affiliate's Stations. "Affiliate Transactional Share" has the meaning set forth in Exhibit D. "Broadcast Television" means traditional, free, FCC-licensed, over-the-air broadcast television. "Charter Affiliate" means a Broadcast Television station or station group that (i) entered into an affiliation agreement with the Network on or before the date of this Agreement, and/or (ii) is owned, operated or licensed to Sinclair Television Group, Inc. or an affiliate thereof. "Costs" means all losses, liabilities, claims, costs, damages and expenses, including fines, forfeitures, reasonable attorneys' and expert witness fees, disbursements and court or administrative costs. "Designated Market Area" or "DMA" means a particular market area or classification to demarcate local television markets as defined by Nielsen Media Research, Inc. from time-to-time, or, if DMA falls from general or standardized usage, a replacement term to demarcate local television markets in a substantially similar manner which shall be determined by the parties in good faith. "Licensed Community" has the meaning set forth in Section 3(a). "Local Advertising" has the meaning set forth in Section 8(c). "MVPD" means a multichannel video program distributor as such term is set forth in 47 C.F.R. §76.905(d) of the rules of the Federal Communications Commission ("FCC"). + +Source: TUBE MEDIA CORP., 8-K, 3/10/2006 + + + + + + "Network's Advertising Revenue" means the gross dollar amount of collections received by or credited to Network from the sale by Network of commercial advertising time included in the Service, less actual agency representative fees and sales commissions. For clarification, Network's Advertising Revenue shall not include accounts receivable or Network's Transactional Revenue. "Network's Transactional Revenue" means the gross dollar amount of revenue actually received by Network (e.g., net of the cost of goods and services and all fulfillment costs associated with the sale of such goods and services) from (i) the sale of products and services by way of direct response telephone orders from the toll-free number included on the Service, and (ii) e-commerce sales of products and services by or on behalf of Network over the Internet originating from Network's website (i.e., URL www.thetubetv.com or any replacement or supplemental URL) or Affiliate's website, in all cases, originating from within the Zip Codes in the DMA of the Station(s) transmitting the Service, and from Zip Codes in the DMA of any MVPD(s) that carry a Station if, at the time of the sale, Network does not have an affiliation with a Broadcast Station that is transmitting the Service and whose Licensed Community is located in such DMA. "Primary Feed" means the audio and video presentations of each Station's primary one-way over-the-air digital television signal (which signal may be in either standard definition or high definition television (as such term is defined by the Advanced Television Systems Committee) format). "Promotional Spots" has the meaning set forth in Section 8(a). "Service" means the television programming service provided by Network as defined in the preamble to this Agreement. "Station(s)" means a Broadcast Television station licensed to Affiliate or a subsidiary of Affiliate by the FCC that provides or is capable of providing the Service to the Licensed Community that it is licensed to serve. "TV Households" means the number of television households in a given DMA as determined by Nielsen Media Research, Inc. (which, as of the date hereof, is published annually by Nielsen Media Research, Inc. as the Nielsen Media Research Local Universe Estimates (US)) or, if Nielsen Media Research, Inc. ceases to publish the number of television households in a DMA, a replacement term to determine the number of television households in local television markets in a substantially similar manner which shall be determined by the parties in good faith. "Zip Code(s)" means a specific geographic delivery area defined by the United States Postal Service, which consists of a five (5)- digit zip code plus a four (4)-digit add-on code. + +2.TERM, EXTENSION AND RENEWAL: (a) Initial Term. Unless terminated earlier in accordance with the terms of this Agreement, the "Term" of this Agreement shall consist of, collectively, the Initial Term and the Renewal Term, if applicable. The "Initial Term" shall commence upon the Effective Date and shall expire on March 31, 2011. + +2 + +Source: TUBE MEDIA CORP., 8-K, 3/10/2006 + + + + + + (b) Renewal Term. If Affiliate fails to notify Network of its desire that this Agreement terminate on its expiration date, at least six (6) months before the expiration date, this Agreement will automatically renew, upon the same terms and conditions, for an additional four (4) -year period ("Renewal Term"). (c) If the Term is renewed as described in Section 2(b), Network and Affiliate will negotiate exclusively and in good faith concerning further renewal of this Agreement upon mutually-agreed terms and conditions; provided, that unless Network and Affiliate otherwise agree in writing, the exclusive negotiation period will end six (6) months before the expiration of the Term. 3.GRANT OF RIGHTS; ACQUIRED STATIONS: (a) Network hereby grants to Affiliate the exclusive right via Broadcast Television, and Affiliate hereby accepts such exclusive right and the obligation during the Term to broadcast the Service via Broadcast Television (i) over the transmission facilities of each Station identified on Exhibit A, which is licensed by the FCC to serve the community for each such Station (the "Licensed Community"), for receipt by TV Households in the DMA in which the Licensed Community is located, as such DMA is identified on Exhibit A, and (ii) over the transmission facilities of any Acquired Station, except to the extent that, as of the date Affiliate notifies Network in writing of its binding agreement to acquire such Acquired Station, (A) another Broadcast Television station in the same DMA as the Acquired Station has exclusive rights to broadcast the Service, or (B) the Acquired Station is obligated to broadcast other material that precludes it from also carrying the Service. Affiliate shall telecast the Service from each Station's origination transmitter and antenna for free over-the-air television reception, and by other customary means used by each Station to transmit its signal in its DMA (e.g., FCC-licensed translators and fiber or microwave connections to MVPDs). Notwithstanding the foregoing, Affiliate shall have the right to authorize, and shall use reasonable efforts to obtain, carriage of the Service's signal by MVPDs that retransmit digital Broadcast Television signals in the DMA of each Station that transmits the Service, which Service signal shall be transmitted by Affiliate together with the Primary Feed. Affiliate's failure to obtain such carriage by any MVPD shall not be deemed a breach of this Agreement. Affiliate shall endeavor to secure carriage of the Service by MVPDs on the most highly penetrated level of digital service. Further, Affiliate shall have the right to authorize carriage of the Service's signal on a nonexclusive basis by MVPDs that retransmit a Station's Primary Feed outside the Station's DMA, and that are carrying the Station's analog signal as of the date of this Agreement. Notwithstanding the provisions of the preceding sentence, (1) Affiliate shall not authorize an MVPD to deliver the Service to subscribers outside the Station's DMA in areas in which the Station, pursuant to FCC rules, is not "significantly viewed," if the MVPD receives the Station's signal via satellite, and (2) any agreement by Affiliate for out-of-DMA carriage of the Service shall require that the MVPD's authorization from Affiliate to carry the Service terminate upon the initial over- the-air transmission of the Service by a Broadcast Television station whose Licensed Community is located within the DMA of the pertinent MVPD system if such station has exclusive rights to broadcast the Service in such DMA. Network shall provide Affiliate with at least 45 days' advance written notice of such Broadcast Television's station's initial over-the-air transmission of the Service and Affiliate shall provide such notice to the pertinent MVPD. In the event Affiliate owns more than one Station in any DMA (a "Duopoly Market"), then Affiliate, at its option, shall have the right to determine which of its Stations in such DMA shall broadcast the Service; it being understood that Affiliate shall have no obligation to broadcast the Service over more than one of its Stations in any particular DMA. 3 + +Source: TUBE MEDIA CORP., 8-K, 3/10/2006 + + + + + + (b) Any Acquired Station that is transmitting the Service at the time of acquisition by Affiliate shall (subject to the provisions of the preceding paragraph concerning Duopoly Markets) continue to transmit the Service and become a "Station" hereunder. Any existing agreement between or among Network and any one or more third parties applicable to such Station for the transmission of the Service shall terminate and cease to be effective upon its acquisition by Affiliate. Any Acquired Station in a DMA that is not transmitting the Service at the time of acquisition by Affiliate shall likewise become a "Station" hereunder upon acquisition and shall commence transmitting the Service within one hundred eighty (180) days after the acquisition is consummated, unless, as provided in 3(a) above, (A) another Broadcast Television station in the same DMA as the Acquired Station has exclusive rights to broadcast the Service, or (B) the Acquired Station is obligated to broadcast other material that precludes it from also carrying the Service. If condition (A) or (B) applies, the Acquired Station shall have no obligations hereunder, and Network shall have the right to license the transmission of the Service to another Broadcast Television station in such DMA, including on an exclusive basis. Notwithstanding the foregoing, if condition (A) applies, unless the existing affiliate is a Charter Affiliate, Network shall give Affiliate at least six (6) months' prior written notice of the impending expiration of an existing affiliate's affiliation agreement and, upon such notice, Affiliate shall have the option to add the pertinent Acquired Station as a "Station" hereunder as of the date of expiration of the existing affiliate's affiliation agreement, provided that Affiliate exercises such right in writing at least four (4) months prior to the expiration of the existing affiliate's affiliation agreement. (c) Except as expressly provided in Section 3(a), Affiliate shall not have the right (i) to subdistribute or otherwise sublicense the Service, or (ii) to transmit or otherwise distribute the Service by any technology (other than Broadcast Television), or on an interactive, time- delayed, "video-on-demand" or similar basis. For purposes hereof, "video-on-demand" means the transmission of a television signal by means of a point-to-point distribution system containing audiovisual programming chosen by a viewer for reception on a viewer's television receiver, where the scheduling of the exhibition of the programming is not predetermined by the distributor, but rather is at the viewer's discretion. + +(d) Except as expressly provided in Sections 3(a) and 3(b) and this Section 3(d), Network shall not have the right to distribute or otherwise license the Service for reception in a Station's DMA, including distributing the Service directly through an MVPD in a Station's DMA, other than through this license to Affiliate. Without limiting the generality of the preceding sentence, Network shall not distribute or authorize third parties to distribute the Service to subscribers by any technology (other than Broadcast Television and transmission by an MVPD), on an interactive, time-delayed (other than multiple time-zone feeds of the Service), "video-on-demand" or similar basis, as an audio-only service (e.g., radio) or over the Internet. For purposes of clarification, a promotional or marketing "stunt" simulcasting a live or special event, or brief excerpts of the Service made available on a non-subscription basis for promotional purposes shall not be prohibited by this Section 3(d) or any other provision herein. + +4 + +Source: TUBE MEDIA CORP., 8-K, 3/10/2006 + + + + + + (e) Network hereby grants Affiliate during the Term a royalty-free, fully paid up, non-transferable, non-exclusive license to use the Marks (as defined in Section 8(e)) in any advertising and promotional materials undertaken in connection with Affiliate's transmission of the Service, provided that such use complies with the terms and conditions of Section 8(e). (f) Upon execution of this Agreement, Affiliate shall promptly complete and deliver to Network a notice of launch (in the form attached hereto in Exhibit B) for each Station ("Launch Notice") and subsequently launch the Service on each Station listed on Exhibit A (subject to the provisions of 3(a) above concerning Duopoly Markets) no later than the Launch Date set forth opposite each Station on Exhibit A (for each Station, the "Launch Date"). In addition, Affiliate shall promptly complete a Launch Notice for any Acquired Station that is subsequently added to this Agreement. (g) Each Station, by the terms of this contract, shall be entitled to invoke the protection against duplication of Service programming imported under the compulsory copyright license as provided in Sections 76.101 and 76.123 of the FCC Rules. (h) Each Station transmitting the Service shall have the right to broadcast the Service on its Primary Feed, in addition to its broadcasts under Section 3(a). Such broadcasts shall be subject to all terms and conditions of this Agreement, including Sections 4(e) and 8(c). 4.CONTENT OF THE SERVICE: (a) Content. Throughout the Term, the Service shall be a professionally produced, advertiser-supported television service with programming consisting of music videos, occasional programs discussing, reviewing and/or relating to music and concerts, related interstitial programming, promotional announcements and commercial announcements in the amounts specified herein, 24 hours a day, seven days a week, primarily targeted to reach adults ages 25-54. Subject to the preceding sentence and other provisions of this Agreement, the selection, scheduling, renewal, substitution and withdrawal of any content on the Service shall at all times remain within Network's sole discretion and control. (b) Local Programming. Affiliate, at its own cost, shall be provided with thirty (30) minutes per week on the Service, on the same day and at the same time each week, as determined by Network in consultation with Affiliate, for the insertion of programming by Affiliate that is complementary to the Service ("Local Programming"), at Affiliate's option. Service programming will be provided during this thirty (30) -minute period for Stations that do not insert Local Programming. It is anticipated that, at a future date to be mutually agreed upon by the parties, Affiliate shall have the right to expand such Local Programming to one (1) hour per week. Affiliate shall be solely responsible for the insertion on a timely basis of the Local Programming into the signal of the Service at the Stations transmitting the Service. Affiliate shall retain all revenue derived from sponsorship of the Local Programming. Affiliate shall apply the same broadcast standards to the Local Programming that it applies to each Station's broadcasts over the Primary Feed. Without limiting the immediately preceding sentence, Local Programming shall not consist of or contain infomercials, home shopping or direct on air sales programming that are not directly related to music and concerts. + +5 + +Source: TUBE MEDIA CORP., 8-K, 3/10/2006 + + + + + +(c) Preemption. Affiliate shall retain the right to elect not to transmit any programming on the Service over the broadcast facilities of a Station if Affiliate reasonably believes that such programming is unsatisfactory or unsuitable or contrary to the public interest, or in order to substitute a program which, in Affiliate's judgment, is of greater local or national importance. Affiliate agrees to notify Network either before or as soon as reasonably practicable after Affiliate exercises such right. + +(d) Children's Programming. (i) Network will provide as part of the Service the minimum number of hours of "Core Programming," as defined in 47 C.F.R. §73.671(c), as the same may be amended from time to time ("Core Children's Programming"), and will comply with related requirements of the definition of "Core Programming" in order to enable Affiliate to comply with the "safe harbor" established by law or FCC regulation, solely with regard to the Service and as a result of the broadcast by the Stations of the Service on each such Station's free, over-the-air, multicast feed. (ii) Network represents and warrants that if it supplies to Affiliate any programming produced primarily for children 12 years old or younger, such programming shall comply with the FCC's commercial limits, including 47 C.F.R. §73.670, as the same may be amended from time to time, including limits on the amount of commercial matter and the prohibitions on host-selling, program- length commercials and the display of website addresses. (iii) At the end of each calendar quarter, Network will provide to Affiliate a copy of the Service's schedule of Core Children's Programming planned for the following calendar quarter, together with a certification indicating the amount of Core Children's Programming made available to Affiliate during the preceding quarter and certifying that any programming produced primarily for children 12 years old or younger, as provided by Network, complied with the FCC's rules. Network will provide copies of program logs or other documentation substantiating the amount of Core Children's Programming or the amount of commercial matter in any Network program or program segment subject to the commercial limits, promptly upon request by Affiliate. + +(e) Advertising. Except for the Local Advertising and advertising broadcast in Local Programming, Network shall have the exclusive right and authority to sell all of the advertising on the Service and shall share a portion of Network's Advertising Revenue generated from such sales with Affiliate in accordance with the terms of this Agreement. A Station will not be obligated to broadcast advertising that does not comply with the Station's generally applicable broadcast standards. Network and Affiliate will cooperate in a good-faith effort to ensure that all Network advertising meets Stations' broadcast standards. Without limiting the generality of the foregoing sentence, Network will not accept political or controversial-issue advertising, or advertising promoting distilled spirits or gambling, without Affiliate's prior written approval. (f) Program Service Information. Network must provide to a reputable program information services entity a program schedule for the Service. 6 + +Source: TUBE MEDIA CORP., 8-K, 3/10/2006 + + + + + +(g) Closed Captioning; Program Ratings. Network shall provide full-time closed captioning for the Service in all programming and at all times for which captioning is required by applicable law as applied to the Service. Network also shall display and encode program ratings for the Service using the industry-standard "V-chip" ratings system. 5.DELIVERY AND DISTRIBUTION OF THE SERVICE: + +(a) During the Term, Network, at its expense, shall deliver a 24 hours per day, 7 days per week signal of the Service by transmitting it via AMC-3 or another domestic satellite commonly used for transmission of television programming to Broadcast Television stations. The signal of the Service, including any program-related data and enhancements, shall be contained in no more than a 5.0 megabits-per-second ("mbps") stream of data and shall consist of a resolution of no less than 480 x 720i. Network's failure, for reasons other than force majeure, to deliver a signal meeting the requirements of this Section 5(a) for more than twelve (12) hours in any consecutive thirty (30) day period without the written consent of Affiliate shall constitute a material breach of this Agreement, not subject to the cure provisions of Section 10(d); provided, however that Affiliate shall provide Network with notice of each event in which Network fails to deliver a signal meeting the requirements of this Section 5(a) as soon as reasonably practicable. (b) Exhibit C sets forth the specific equipment necessary for each Station to receive the signal of the Service (the "Receiving Equipment"). At Affiliate's option, Network shall furnish and install, at its expense, or reimburse Affiliate for its cost of furnishing and installing, the Receiving Equipment to each Station that transmits the Service, provided that the Receiving Equipment for all of the Stations initially listed on Exhibit A shall not exceed, in the aggregate, one hundred twenty-five thousand dollars ($125,000.00) (the "Equipment Reimbursement Cap"). At Affiliate's option, Network also shall furnish and install, or reimburse Affiliate for its cost of furnishing and installing, Receiving Equipment for any Acquired Station not transmitting the Service at the time of acquisition by Affiliate, at a cost not to exceed three thousand five hundred dollars ($3,500.00). Affiliate, at its expense, shall furnish all other equipment and facilities necessary for the receipt of the satellite transmission of the signal of the Service and the delivery of such signal to TV Households in each Station's DMA. In addition, each Station shall be responsible, at its sole expense, for installing, maintaining or repairing the Receiving Equipment during the Term. Affiliate shall cause each of the Stations to maintain and repair the Receiving Equipment in good working condition, at its sole cost, as necessary and appropriate to maintain the ability of the Receiving Equipment to receive the signal of the Service from its initial satellite and transponder without interruption during the Term. If Network changes the satellite, transponder or encryption method used to transmit the Service and if the Receiving Equipment or other existing equipment will not be suitable for receiving the Service after the changes are implemented, with respect to such Station(s), Network agrees to furnish and install at its expense, or reimburse Affiliate for its reasonable cost of furnishing and installing, Receiving Equipment suitable for receiving the Service after the changes are implemented, without regard to the Equipment Reimbursement Cap; provided, however, that with respect to new equipment made necessary by a satellite, transponder or encryption method change, which equipment may be used to receive the signals of other television services carried by such Station, Network shall be obligated to reimburse Affiliate only for Network's pro-rata share of the cost of such equipment (based on the total number of television services being received by such affected System and utilizing such new equipment within ninety (90) days of the effective date of such change). + +7 + +Source: TUBE MEDIA CORP., 8-K, 3/10/2006 + + + + + +(c) Each Station transmitting the Service shall transmit a good-quality video and audio signal of the Service, but in no event shall such Station be required to deliver a signal of a technical quality higher than the technical quality of the video and audio signal of the Service as delivered by Network hereunder. (d) Each Station agrees to transmit the Service on a full-time basis 24 hours per day, 7 days per week, except in cases of force majeure, emergency broadcasts, when a Station's Primary Feed is not being transmitted, as provided in 4(c) above, or when a Station must stop broadcasting for maintenance or repairs. Each Station will provide Network with up to 5.0 mbps, but, at all times, not less than 2.0 mbps, for this purpose, except as required in infrequent and exceptional circumstances resulting from a Station's carriage of the primary television network with which such Station is affiliated with regard to its Primary Feed (e.g., ABC, CBS, NBC and Fox). Except for a Station's Local Advertising Time and Local Programming, station identification messages, and as except provided in 4(c) and 4(e) above, each Station shall transmit the Service without alteration, editing or delay. (e) Network agrees to transmit SCTE 35-compliant DPI commands within the Service that will trigger insertion of Local Advertising and rejoin commands to signal the return to Network programming. Network also will deliver a separate set of SCTE 35-compliant commands to trigger local insertion and removal of station identification messages on the hour, and station logos before and after commercial breaks. To ensure clean switching, Network will ensure that switch commands occur coincident with transmission of an "I"-frame from the network MPEG 2 encoder. (f) Each Station that transmits the Service may superimpose over the programming on the Service a transparent station identification logo/"bug" that does not materially interfere with the Service or any graphics or other data therein. (g) Affiliate and each Station shall take the same security measures to prevent the unauthorized or otherwise unlawful copying or taping of the Service (or any portion thereof) by others as it takes to protect the Primary Feed transmitted by such Station. Network acknowledges that Affiliate and the Stations do not, as of the Effective Date, take any such security measures. 6.NO FEES; REVENUE SHARE: + +(a) Neither Affiliate nor any Station shall pay any fees to Network for any rights granted under this Agreement. (b) In consideration of the terms and conditions set forth herein, Network shall pay Affiliate (i) the Affiliate Advertising Share, and (ii) the Affiliate Transactional Share, each as provided in Exhibit D. 7.REPORTS; AUDITS: (a) Affiliate shall promptly notify Network in writing of any MVPD that has agreed to retransmit the Service. Network and Affiliate thereafter shall cooperate in an effort to secure the MVPD's agreement to provide to Network and Affiliate, within thirty (30) days following each calendar quarter during the Term, a certified report stating the number of households that receive the Service from such MVPD ("Digital Cable Subscriber Households") in the DMA of a Station on average over such quarter ("Report"). If an MVPD fails to submit a Report, Network and Affiliate shall estimate the number of Digital Cable Subscriber Households receiving the Service pursuant to paragraph I.1. of Exhibit D. + +8 + +Source: TUBE MEDIA CORP., 8-K, 3/10/2006 + + + + + + (b) Network shall submit to Affiliate, within forty-five (45) days of the end of each calendar quarter during the Term, a statement reporting for such calendar quarter the following information on a Station-by-Station basis: (i) Network's Advertising Revenue, (ii) the Affiliate Advertising Share, (iii) Network's Transactional Revenue, (iv) the average number of households receiving the Service through each MVPD in each DMA served by a Station, as calculated herein, and (v) the Affiliate Transactional Share. If this Agreement terminates on any date other than at the end of a calendar quarter, Network shall supply such statement as of the date of termination, within forty-five (45) days thereafter, and this obligation shall survive the termination of this Agreement until Affiliate receives such statement. (c) Affiliate shall submit to Network, within forty-five (45) days of the end of each calendar quarter, a report on behalf of each Station with respect to the Promotional Spots aired by each Station during such calendar quarter, setting forth the date and time each such Promotional Spot aired on the Primary Feed. (d) Audit. (i) During the Term and for one (1) year thereafter, Network shall maintain accurate and complete books and records in accordance with generally accepted accounting principles and practices that shall contain sufficient information to enable an auditor to verify, for the period under audit, Network's Advertising Revenue, Network's Transactional Revenue, the Affiliate Advertising Share, the Affiliate Transactional Share and the accuracy of the amounts paid by Network to Affiliate hereunder, including under Exhibit D (collectively, the "Revenue Share Records"). Upon not less than thirty (30) days' prior written notice and not more than once in any calendar year, Affiliate shall have the right, at its sole cost and expense, during the Term and for one (1) year thereafter, to examine during normal business hours the books and records of Network for up to the prior calendar year and the then-current calendar year solely to the extent reasonably necessary to verify the Revenue Share Records. (ii) Any audit conducted pursuant to this Section 7(d) shall be conducted by Affiliate's corporate audit staff or an independent auditing firm designated by Affiliate (in each case, an "Auditor"). Any such audit shall be subject to the provisions of this Section 7(d) and the confidentiality provisions of Section 12, and the Auditor shall execute, in advance, a confidentiality agreement that obligates it to maintain the confidentiality of the terms of this Agreement and the information acquired during the course of the audit. Any officer, employee, consultant or agent of Affiliate that has access to an audit report (who shall be limited to those who are members of Affiliate's corporate audit staff and have a specific need to know the contents thereof) shall also execute a confidentiality agreement consistent with the prior sentence. 9 + +Source: TUBE MEDIA CORP., 8-K, 3/10/2006 + + + + + + (iii) Network and Affiliate shall use good faith efforts to resolve any dispute arising from an audit conducted pursuant to this Section 7(d). Any litigation by Affiliate with respect to amounts owing by Network in respect of an audit must be brought within one (1) year after the Auditor completes its on-site review at Network's offices, or Affiliate will be deemed to have waived its right, whether known or unknown, to collect any shortfalls from Network for the period(s) audited; provided, however, that such limitation shall not apply to intentional misconduct by Network or its agents or employees. 8.PROMOTION; AFFILIATE ADVERTISING: (a) Affiliate shall actively promote the Service consistent with its business judgment, including the broadcast by each Station transmitting the Service of an average of at least ten (10) thirty (30)-second promotional announcements per week for the Service ("Promotional Spots") on the Station's Primary Feed, including the Station's analog signal for so long as the Station broadcasts an analog signal, on a run-of- station basis, commencing no later than the first air date of the Service on the applicable Station. Affiliate will submit program listings for the Service to local print and on-screen guides. Additionally, Affiliate will provide a link to Network's website (i.e., URL www.thetubetv.com or any replacement or supplemental URL) on the websites of each of the Stations. + +(b) Network shall produce and deliver the Promotional Spots to each Station at least two (2) weeks prior to the first air date, and on a regular basis thereafter, in a format mutually agreed with Affiliate and in a broadcast-ready state. Affiliate or a Station also may prepare its own Promotional Spots and other promotional materials, which, if using any programming from the Service, must be approved in advance by Network, such approval not to be unreasonably withheld. Network and Affiliate agree to consult on a regular basis during the Term concerning the content of the Promotional Spots, promotional materials and on Network and Affiliate promotional strategies, and Affiliate shall cease airing particular Promotional Spots or using particular promotional materials upon the reasonable objection of Network to such Promotional Spots or the use of such promotional materials. (c) Network shall provide to each Station that transmits the Service for local advertising sales, public service announcements, newsbreaks, station-produced vignettes or promotion one (1) minute of commercial announcement time per hour ("Local Advertising"), normally at the same approximate time each hour of the broadcast day. Affiliate shall have the right to retain for itself all the proceeds derived from the sale of Local Advertising. Affiliate agrees not to sell commercial time to or for the benefit of direct competitors of the Service (e.g., music video networks carried by MVPDs such as MTV, VH1 and Fuse). All Local Advertising shall comply with the pertinent Station's generally applicable broadcast standards and Affiliate shall be solely responsible for all Local Advertising and all liabilities associated therewith, including insertion, trafficking, billing and collection activities relating to the Local Advertising and for the content of the material inserted into the Local Advertising. (d) Network, from time to time, may undertake marketing tests and surveys, rating polls and other research in connection with the Service. With respect to any tests, surveys or research that apply to any Station or DMA for which Network seeks Affiliate's cooperation, Network shall notify Affiliate of the nature and scope of each such project and Affiliate, to the extent permitted by applicable law and agreements by which Affiliate or a Station is bound, shall cooperate in such research by rendering such assistance as Network may reasonably request and which Affiliate can reasonably provide without incurring any additional expense. Network shall, promptly following receipt, provide the full results of any such research to Affiliate, on a confidential basis, unless Network is prevented from doing so by a confidentiality agreement or applicable law. + +10 + +Source: TUBE MEDIA CORP., 8-K, 3/10/2006 + + + + + + (e) Affiliate acknowledges that the name and mark "The TUBE" (and the names of certain programs that appear in the Service and any subsequently selected names or marks for the Service and accompanying websites) (collectively, the "Marks") are the exclusive property of Network and its suppliers and that Affiliate has not and will not acquire any ownership thereof by reason of this Agreement. Provided they do not infringe the marks of Affiliate or an affiliate of Affiliate, Affiliate shall not directly or indirectly question, attack, contest or in any other manner impugn the validity of the Marks or Network's rights in and to the Marks and shall reasonably cooperate with Network's quality control, monitoring and inspection of the use of the Marks. Any and all goodwill arising from Affiliate's use of the Marks shall inure solely to the benefit of Network. Affiliate shall submit to Network representative samples of Affiliate's promotional materials mentioning or using the Marks (other than materials provided by Network to Affiliate, if any) and shall cease using the Marks in a particular manner upon the reasonable objection of Network to the use of the Marks in such manner. Uses of the Marks in routine promotional materials, such as program guides and program listings, shall be deemed approved unless Network specifically notifies Affiliate to the contrary. Network shall acquire no rights in any of Affiliate's marks by virtue of this Agreement. 9.WARRANTIES AND INDEMNITIES: + +(a) Network and Affiliate each represents and warrants to the other that (i) it is duly organized, validly existing and in good standing under the laws of the state under which it is organized; (ii) it has the power and authority to enter into this Agreement and to perform fully its obligations hereunder; (iii) it is under no contractual or other legal obligation that shall in any way interfere with its full, prompt and complete performance hereunder; (iv) the individual executing this Agreement on its behalf has the authority to do so; and (v) the obligations created by this Agreement, insofar as they purport to be binding on it, constitute legal, valid and binding obligations enforceable in accordance with their terms. (b) Network further represents and warrants to Affiliate that it holds all necessary rights and licenses in and to the materials transmitted to Affiliate as part of the Service and such rights and licenses are sufficient to permit the transmission of the Service in the DMA of each of the Stations as contemplated herein, without infringing the copyright or other rights of any person. (c) Affiliate further represents, warrants and covenants to Network that (i) it has the power and authority to cause each Station, including any Acquired Station, to perform fully its obligations hereunder; and (ii) it holds and will continue to hold all necessary rights and licenses (A) to operate the Stations and permit the broadcast of the Service in the DMA of each of the Stations and (B) to broadcast the Local Programming and Local Advertising as contemplated herein. 11 + +Source: TUBE MEDIA CORP., 8-K, 3/10/2006 + + + + + +(d) Affiliate and Network shall each indemnify, defend and forever hold harmless the other, the other's parent, subsidiary and affiliated companies and each of the other's (and the other's parent, subsidiary and affiliated companies') respective present and former officers, shareholders, directors, employees, consultants, partners and agents ("Network Indemnitees" and "Affiliate Indemnitees," respectively), against and from any and all Costs incurred as a result of third-party claims arising out of any breach of any term of this Agreement or of any warranty, covenant or representation contained herein. (e) Without limiting Section 9(d), Network shall indemnify, defend and forever hold harmless the Affiliate Indemnitees from and against any and all Costs arising directly or indirectly out of third-party claims (i) that the transmission by Affiliate of the Service as contemplated herein infringes the rights of any person, (ii) based on the content of the Service and any promotional material provided by Network to Affiliate (including the Promotional Spots), as furnished by Network and transmitted by Affiliate and each Station in accordance with the terms and conditions of this Agreement (i.e., not based upon any deletions, modifications or additions by Affiliate or any Station), including any claim that such content or material is obscene, indecent, libelous, or slanderous, or violates any right of privacy or publicity, copyright, trademark or any other proprietary, literary, or dramatic right of any person or any rule or regulation of the FCC, and (iii) relating to any contest, sweepstakes or other promotion conducted by Network. Affiliate shall, to like extent, indemnify, defend and forever hold harmless the Network Indemnitees for Costs arising directly or indirectly out of third-party claims relating to (A) any deletion, addition or other modification of content, programming or other material by Affiliate to the Service, including Local Advertising and Local Programming, (B) any editing or deletion of program or promotional material by Affiliate contrary to Network's instructions, (C) Promotional Spots and/or other promotional materials prepared by Affiliate, and (D) any contest, sweepstakes or other promotion conducted by Affiliate in connection with Network and/or the Service. (f) A party claiming indemnity under this Section 9 must give the indemnifying party prompt notice of any claim, and the indemnifying party shall, unless the parties otherwise agree, assume the full defense of any claims to which its indemnity applies. The indemnified party, at the indemnifying party's cost, will cooperate fully with the indemnifying party in the defense or settlement of any such claim. Subject to the foregoing, the indemnified party may participate in the defense, through counsel of its choice, at its own expense. (g) The representations, warranties and indemnities contained in this Section 9 shall continue throughout the Term and the indemnities shall survive the termination of this Agreement, regardless of the reason for such termination. (h) Network has procured, and shall maintain during the Term, at its sole expense, Commercial General Liability insurance at liability limits of not less than $1,000,000 each occurrence and $2,000,000 in the aggregate. Additionally, Network will procure on or before the Affiliate Launch Date, and shall maintain during the Term, at its sole expense, Errors and Omissions insurance that covers Network's media activities at a liability limit of $1,000,000 in any one (1) policy period. Affiliate shall be named as an additional insured on the policies, and, prior to the Affiliate Launch Date, shall receive certificates evidencing such insurance, providing that such coverage will not be cancelled or materially changed except upon 30 days' prior written notice to Affiliate. + + 12 + +Source: TUBE MEDIA CORP., 8-K, 3/10/2006 + + + + + + 10.TERMINATION: (a) In addition to Network's other rights to terminate this Agreement, Network may, by providing Affiliate with thirty (30) days' prior notice, terminate this Agreement if Affiliate is in material breach of this Agreement, provided that Affiliate shall have thirty (30) days from Network's notice specifying in detail the nature of such breach to cure such breach; provided, however, if such breach is confined to a single breach by a Station or group of Stations during the Term, then Network shall have the right to terminate this Agreement only as to such Station or Stations, but if Affiliate willfully and repeatedly materially breaches any of the material provisions of this Agreement, then Network, at its option, shall have the right to terminate this Agreement in its entirety or only as to such breaching Station or Stations. (b) Network retains the right at all times during the Term to discontinue its distribution of the Service in its entirety and to terminate this Agreement and all other affiliates' agreements on at least ninety (90) days' prior notice without any liability therefor to Affiliate, other than amounts payable hereunder which accrued prior to such termination, including amounts payable pursuant to Section 6(b) and Exhibit D. (c) In the event that a Station initially listed on Exhibit A does not launch the Service by the Launch Date as required by Section 3(f) other than as a result of a force majeure event pursuant to Section 13(e), Network shall have the right to terminate this Agreement only as to such Station, but if three (3) or more Stations initially listed on Exhibit A do not launch the Service by the pertinent Launch Date for each such Station as required by Section 3(f) for reasons other than force majeure, Network, at its option, shall have the right to terminate this Agreement in its entirety or only as to such Station or Stations. In the event that Network terminates this Agreement as to a particular Station or several Stations, or in its entirety pursuant to Sections 10(a) or (c), Affiliate shall, within thirty (30) days of termination, at its option either reimburse Network for the cost of all equipment or return such equipment related to such Station(s) that was paid for by Network pursuant to Section 5(b) herein. (d) In addition to Affiliate's other rights to terminate this Agreement, Affiliate may, by providing Network with thirty (30) days' prior notice, terminate this Agreement if Network is in material breach of this Agreement, provided that Network shall have thirty (30) days from its receipt of Affiliate's written notice specifying in detail the nature of such breach to cure such breach; provided, however, if such breach is confined to a Station or group of Stations during the Term, then Affiliate shall have the right to terminate this Agreement only as to such Station or Stations, but if Network willfully and repeatedly materially breaches any of the material provisions of this Agreement, then Affiliate, at its option, shall have the right to terminate this Agreement in its entirety or only as to such breaching Station or Stations. (e) Notwithstanding anything to the contary in this Section 10, any breach involving failure to pay any amount due hereunder must be cured within ten (10) days after notice. A breach involving Network's failure to pay an amount due to Affiliate pursuant to Section 6 above or Exhibit D hereto shall be deemed a breach as to Affiliate rather than a particular Station or Stations. + +13 + +Source: TUBE MEDIA CORP., 8-K, 3/10/2006 + + + + + + 11. NOTICES Any notice given under this Agreement shall be in writing, shall be sent postage prepaid by certified mail, return receipt requested, or by hand delivery, or by Federal Express or similar overnight delivery service, to the other party, at the following address (unless either party at any time or times designates another address for itself by notifying the other party pursuant to the provisions of this Section 11, in which case all notices to such party thereafter shall be given at its most recently so designated address): + +To Network: The TUBE Music Network, Inc. 1451 West Cypress Creek Road, Suite 300 Ft. Lauderdale, FL 33309 Attn: John W. Poling, CFO Facsimile Number: (954) 714-8500 cc: Les Garland, President and CEO Facsimile Number: (305) 861-9409 To Affiliate: Tribune Broadcasting Company 435 North Michigan Avenue Chicago, IL 60611 Attn: Gina Mazzaferri Facsimile Number: (312) 222-5981 cc: Charles J. Sennet Facsimile Number: (312) 222-4206 + +Notices given by hand delivery shall be deemed received upon delivery to the addressee. Notices given by certified mail shall be deemed received on the date specified on the return receipt. Notices given by Federal Express or similar overnight delivery service shall be deemed received on the next business day following delivery of the notice to such service with instructions for overnight delivery. 12. CONFIDENTIALITY: + + Neither Affiliate nor Network shall disclose (whether orally or in writing, or by press release or otherwise) to any third party outside their respective companies (other than their respective officers, directors and employees, in their capacity as such, and their respective auditors, consultants, financial advisors, lenders, potential buyers or investors and attorneys; provided, however, that the disclosing party agrees to be responsible for any breach of the provisions of this Section 12 by any of such parties) the terms of this Agreement (other than the existence hereof) except: (a) to the Auditor as provided in Section 7(d); (b) to the extent necessary to comply with the valid order or compulsory process of an administrative agency or a court of competent jurisdiction, in which event the party making such disclosure shall so notify the other as promptly as practicable (and, if possible, prior to making such disclosure); (c) in accordance with the regulations of any securities exchange on which such party (or its parent company) is listed, or otherwise as required by law; (d) in order to enforce its rights pursuant to this Agreement; or (e) if mutually agreed by Affiliate and Network, in advance of such disclosure, in writing. This Section 12 shall survive the termination of this Agreement. The parties agree to issue a mutually agreeable press release concerning this Agreement upon execution of this Agreement. 14 + +Source: TUBE MEDIA CORP., 8-K, 3/10/2006 + + + + + + 13.MISCELLANEOUS: (a) Assignment; Binding Effect; Reorganization. This Agreement shall be binding on the respective transferees and successors of the parties hereto, except that neither this Agreement nor either party's rights or obligations hereunder shall be assigned or transferred by either party without the prior written consent of the other party. Affiliate agrees to use reasonable efforts to obtain the agreement of any proposed assignee or transferee that, upon consummation of the assignment or transfer of control of the FCC license for any Station, such assignee or transferee shall negotiate in good faith with Network for continued rights to broadcast the Service over the affected Station. It will not be a breach of this Agreement, and Affiliate will not be required to accept a lower price or different terms in a proposed acquisition, if the proposed assignee or transferee does not accept this condition. Affiliate agrees to give Network timely notice of the filing of an assignment or transfer of control application with the FCC. (b) Entire Agreement; Amendments; Waivers; Cumulative Remedies. This Agreement, including the Exhibits attached hereto, contains the entire understanding of the parties hereto and supersedes and abrogates all contemporaneous and prior understandings of the parties, whether written or oral, relating to the subject matter hereof. This Agreement may not be modified except in a writing executed by both parties hereto. No waiver of any breach of any provision hereof shall be or be deemed to be a waiver of any preceding or subsequent breach of the same or any other provision of this Agreement. The failure of Affiliate or Network to enforce or seek enforcement of the terms of this Agreement following any breach shall not be construed as a waiver of a subsequent breach of the same or any other terms of this Agreement. All remedies, whether at law, in equity or pursuant to this Agreement shall be cumulative. (c) Governing Law. The obligations of Affiliate and Network under this Agreement are subject to all applicable federal, state and local laws, rules and regulations, and this Agreement and all matters or issues collateral thereto shall be governed by the laws of the State of New York applicable to contracts to be entirely performed therein. (d) Relationship. Neither party shall be, or hold itself out as, the agent of the other or as joint venturers under this Agreement. Nothing contained herein shall be deemed to create, and the parties do not intend to create, any partnership, association, joint venture, fiduciary or agency relationship between Affiliate and Network, and neither party is authorized to or shall act toward third parties or the public in any manner which would indicate any such relationship with the other. (e) Force Majeure. Neither Affiliate nor Network shall have any rights against the other party hereto for the non-operation of facilities or the non-furnishing of the Service if such non-operation or non-furnishing is due to an act of God; inevitable accident; fire; weather; lockout; strike or other labor dispute; riot or civil commotion; action or inaction of government or governmental instrumentality (whether federal, state or local); failure of performance by a common or private carrier; material failure or unavailability in whole or in part of technical facilities, software or equipment which are material to the transmission of the Service; or other cause beyond either party's reasonable control (financial inability is excepted). A party will have the right to terminate this Agreement as to the affected Station(s), by notice to the other, if the other party's inability to perform continues for thirty (30) days or more; provided, that Network may not terminate this Agreement due to a Station's failure to launch the Service for reasons specified solely in this Section 13(e) unless such Station is unable to launch the Service for ninety (90) days or more beyond the applicable Launch Date. 15 + +Source: TUBE MEDIA CORP., 8-K, 3/10/2006 + + + + + +(f) No Inference Against Author. Network and Affiliate each acknowledge that this Agreement was fully negotiated by the parties and, therefore, no provision of this Agreement shall be interpreted against any party because such party or its legal representative drafted such provision. (g) No Third-Party Beneficiaries. The provisions of this Agreement are for the exclusive benefit of the parties hereto (including the Stations) and their permitted assigns, and no third party shall be a beneficiary of, or have any rights by virtue of, this Agreement. (h) Headings. The titles, headings of the sections and defined terms in this Agreement are for convenience only and shall not in any way affect the interpretation of this Agreement. Any reference in this Agreement to "Section" or an "Exhibit" shall, unless the context expressly requires otherwise, be a reference to "Section" in, or an "Exhibit" to, this Agreement. Forms of the word "include" mean "including without limitation;" and references to "hereunder," "herein," "hereof," and the like, refer to this Agreement. (i) Non-Recourse. Notwithstanding anything contained in this Agreement to the contrary, it is expressly understood and agreed by the parties hereto that each and every representation, warranty, covenant, undertaking and agreement made in this Agreement was not made or intended to be made as a personal representation, undertaking, warranty, covenant, or agreement on the part of any individual, and any recourse, whether in common law, in equity, by statute or otherwise, against any individual is hereby forever waived and released. (j) LIMITATION OF LIABILITY. NOTWITHSTANDING ANY OTHER PROVISION IN THIS AGREEMENT TO THE CONTRARY, NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR INCIDENTAL, CONSEQUENTIAL, PUNITIVE OR SPECIAL DAMAGES (INCLUDING LOSS OF PROFITS OF REVENUES, OR DAMAGES TO OR LOSS OF PERSONAL PROPERTY) IN ANY CAUSE OF ACTION ARISING OUT OF, RELATED TO, OR IN CONNECTION WITH A DEFAULT UNDER OR A BREACH OF THIS AGREEMENT. (k) Taxes. Network shall not be liable for, and Affiliate shall pay and hold harmless Network from, any federal, state or local taxes, surcharges, levies or any other charges which are based upon revenues derived by operations of Affiliate or each Station. Neither Affiliate nor Station shall be liable for, and Network shall pay and hold Affiliate and each Station harmless from, any federal, state or local taxes, surcharges, levies or any other charges which are based upon revenues derived by operations of Network. 16 + +Source: TUBE MEDIA CORP., 8-K, 3/10/2006 + + + + + +(l) Right of First Refusal. In the event Network decides to offer any new television programming channels (the "New Channels"), then Affiliate shall have ninety (90) calendar days from Affiliate's receipt of Network's comprehensive business plan for such New Channels to determine whether Affiliate desires to enter into an agreement with respect to the New Channels. At the expiration of the ninety (90)-day period, Affiliate's right of first refusal shall expire. If, during said ninety (90)-day period, Affiliate notifies Network in writing of its desire to add the New Channels to this Agreement, then both parties shall work diligently together and in good faith to enter into an agreement within ninety (90) days of such notice to include the terms and conditions pursuant to which the New Channels may be distributed by Affiliate. If, having used good faith diligent efforts, Affiliate and Network have failed to enter into such an agreement within such ninety (90)-day period, then neither party shall have an obligation to continue such negotiations or enter into an agreement with respect to the New Channels. (m) Matter Broadcast. Federal law and FCC regulations require Network to disclose to Affiliate, and the Stations to disclose to their audiences, the identity of any person or entity that has given anything of value to Network or anyone associated with the Service in exchange for the inclusion of a product, service, trademark, brand name, or other program material in the Service. Network agrees to disclose to Affiliate, in writing, the existence, source and nature of any payments or other consideration received in connection with the production of the Service. Such disclosure shall be made prior to the time such matter is broadcast, so that each Station can satisfy its disclosure obligations under federal law. Notwithstanding anything to the contrary herein, proper disclosure in the content of the Service will satisfy Network's disclosure obligations to Affiliate under this Section 13(m), provided Network agrees to provide full details to Affiliate immediately upon request. (n) Counterparts. This Agreement may be executed in counterparts, each of which will have the full force and effect of a fully- executed original. This Agreement may be executed by each or either party by delivering signed signature pages thereof to the other party by facsimile. Any party delivering an executed counterpart of this Agreement by facsimile shall also deliver to the other party an original executed counterpart of this Agreement, but the failure to do so does not affect the validity, enforceability or binding effect of this Agreement. [Remainder of page intentionally left blank.] + + + +17 + +Source: TUBE MEDIA CORP., 8-K, 3/10/2006 + + + + + + The parties hereto have executed this Agreement to be effective as of the Effective Date. AFFILIATE: NETWORK: TRIBUNE BROADCASTING COMPANY THE TUBE MUSIC NETWORK, INC. By: /s/ John E. Reardon By: /s/ Les Garland + +Title: President Title: President [Signature page: Charter Affiliate Affiliation Agreement by and between The TUBE Music Network, Inc. and Tribune Broadcasting Company] + + 18 + +Source: TUBE MEDIA CORP., 8-K, 3/10/2006 + + + + + +EXHIBIT A To Affiliation Agreement By and Between Tribune Broadcasting Company and The TUBE Music Network, Inc. Dated as of March 6, 2006 STATION IDENTIFICATION Call Street Address Launch DMA Letters Date New York WPIX 220 E. 42nd St., 10th floor, New York, NY 10017 6/1/06 Los Angeles KTLA 5800 Sunset Blvd., Los Angeles, CA 90028 6/1/06 Chicago WGN 2501 W. Bradley Pl., Chicago, IL 60618 7/1/06 Philadelphia WPHL 5001 Wynnefield Ave., Philadelphia, PA 19131 7/1/06 Boston WLVI 75 Morrissey Blvd., Boston, MA 02138 6/1/06 Dallas-Fort Worth KDAF 8001 John Carpenter Fwy., Dallas, TX 75247 7/1/06 Washington, D.C. WBDC 2121 Wisconsin Ave. N.W., Washington, DC 20007 8/15/06 Atlanta WATL One Monroe Place, Atlanta, GA 30324 7/15/06 Houston KHWB 7700 Westpark Dr., Houston, TX 77063 7/15/06 Seattle-Tacoma KCPQKTWB 1813 Westlake Ave. N., Seattle, WA 98109 7/15/06 + +Miami-Ft. Lauderdale WBZL 2055 Lee St., Hollywood, FL 33020 7/15/06 Denver KWGN 6160 S. Wabash Way, Greenwood Village, CO 80111 6/1/06 Sacramento-Stockton-Modesto KTXL 4655 Fruitridge Rd., Sacramento, CA 95820 8/1/06 St. Louis KPLR 2250 Ball Dr., St. Louis, MO 63146 8/1/06 Portland, OR KWBP 10255 S.W. Arctic Dr., Beaverton, OR 97005 6/15/06 Indianapolis WXIN WTTV WTTK 6910 Network Pl., Indianapolis, IN 46278 6/15/06 + +San Diego KSWB 7191 Engineer Rd., San Diego, CA 92111 6/15/06 Hartford & New Haven WTICWTXX One Corporate Center, Hartford, CT 06123 8/15/06 + +Grand-Rapids-Kalamazoo-Battle Creek WXMI 3117 Plaza Dr. N.E., Grand Rapids, MI 49525 &bbsp; 6/15/06 Harrisburg-Lancaster-Lebanon-York WPMT 2005 S. Queen St., York, PA 17403 7/1/06 Albany-Schenectady-Troy WEWB 14 Corporate Woods Blvd., Albany, NY 12211 8/1/06 19 + +Source: TUBE MEDIA CORP., 8-K, 3/10/2006 + + + + + +EXHIBIT B To Affiliation Agreement By and Between Tribune Broadcasting Company and The TUBE Music Network, Inc. Dated as of March 6, 2006 LAUNCH NOTICE BROADCAST LAUNCH FORM STATION NAME: STATION GROUP OWNER: STATION MAILING ADDRESS: PHONE NUMBER: FAX NUMBER: GENERAL MANAGER: MARKETING CONTACT: ENGINEER PHONE (IF DIFFERENT): EMAIL ADDRESS: AREAS SERVED (PLEASE INCLUDE ZIP CODES): DMA: FILL OUT THE LINE BELOW FOR ONE EARTH STATION RECEIVE SITE (EACH ADDITIONAL SITE REQUIRES A SEPARATE FORM) Do you have an antenna capable of receiving a C band feed from AMC-3 Transponder 17 located at 87 degrees west? YES____ NO____ Do you have space for an additional antenna on your roof or in your antenna farm? YES____ NO____ Does this space have a good southern exposure looking at 95 degrees? YES____ NO____ Do you have the resources to install the antenna? YES____ NO____ STREET ADDRESS (Shipping Address): CITY/STATE/ZIP: COUNTY: LAUNCH DATE: ______________ CHANNEL NUMBER: ______________ SIGNATURE: TITLE: DATE: + +Email COMPLETED FORM to linefinder_1999@yahoo.com + + 20 + +Source: TUBE MEDIA CORP., 8-K, 3/10/2006 + + + + + + EXHIBIT C To Affiliation Agreement By and Between Tribune Broadcasting Company and The TUBE Music Network, Inc. Dated as of March 6, 2006 RECEIVING EQUIPMENT + +• C-Band Antenna equipped with appropriate feed assembly and 45-degree digitally compatible LNB • 150 Feet of RG6 Coaxial Cable • Integrated receiver/decoder, including MPEG 2 standard definition decoder that can decode an AC3 encoded audio stream at 384 kbps (the audio stream to be delivered by Network), and an unscrambled DVB-compliant ASI output. • De-icing equipment and/or radomes at the following Stations (and any later-acquired stations where climatologically WXIN/WTTV/WTTK, Indianapolis; WPHL-TV, Philadelphia; WGN-TV, Chicago; WXMI, Grand Rapids. + +21 + +Source: TUBE MEDIA CORP., 8-K, 3/10/2006 + + + + + +Execution Copy EXHIBIT D To Affiliation Agreement By and Between Tribune Broadcasting Company and The TUBE Music Network, Inc. Dated as of March 6, 2006 REVENUE SHARE Commencing on the Affiliate Launch Date and thereafter throughout the Term, Network shall pay to Affiliate the following amounts: + +I.Affiliate Advertising Share. 1.Determining Affiliate Advertising Share. Commencing with the calendar quarter beginning on April 1, 2006 and for each calendar quarter thereafter during the Term, Network shall pay to Affiliate the Affiliate Advertising Share. For purposes hereof, the "Affiliate Advertising Share" shall be determined by multiplying fifteen percent (15%) of Network's Advertising Revenue for such calendar quarter by a fraction, the numerator of which is the total number of Digital Cable Subscriber Households in the DMA(s) of the Station(s) transmitting the Service pursuant to this Agreement, and the denominator of which is the total number of Digital Cable Subscriber Households in all of the DMAs in which Network has a broadcast television station affiliate that is transmitting the Service. If a Station commences transmitting the Service on other than the first day of a calendar quarter, then the Affiliate Advertising Share for such quarter shall be further prorated based on the number of days in such quarter that such Station transmitted the Service. For purposes of this Exhibit D, The number of Digital Cable Subscriber Households shall be determined by the certified report supplied by each MVPD distributing the service, described in Section 7(a) of the body of this Agreement. In the event that such report is not received by Network with respect to each and every MVPD that carries the Service, then, for purposes of this Exhibit D, the number of Digital Cable Subscriber Households shall be determined as follows: a.In the event that the total number of linear digital video subscribers served by an MVPD that distributes the Service is not broken out by DMAs in such MVPD's reported data, then, for purposes of this Exhibit D, the number of Digital Cable Subscriber Households for such non-reporting MVPD shall be equal to the product of (x) the number of TV Households receiving linear video services from such MVPD's systems that carry the Service in the pertinent DMA as set forth in a Nielsen report such as FOCUS multiplied by (y) the National Digital Cable Penetration Percentage most recently reported by such MVPD. The "National Digital Cable Penetration Percentage" shall be equal to the quotient of (i) the total number of subscribers to linear digital video services as most recently publicly reported by such MVPD, divided by (ii) the total number of TV Households receiving linear video services from such MVPD as most recently publicly reported by such MVPD. + +22 + +Source: TUBE MEDIA CORP., 8-K, 3/10/2006 + + + + + + b. In the event that a particular MVPD does not report its total number of subscribers to linear digital video services and total number of TV Households receiving linear video services, then, for purposes of this Exhibit D, the number of Digital Cable Subscriber Households for such non-reporting MVPD shall be equal to the product of (x) the number of TV Households receiving linear video services served by such MVPD's systems that carry the Service as set forth in a Nielsen report such as FOCUS multiplied by (y) a national digital cable penetration estimate from Kagan Research, LLC. c. In the event that a more accurate independent publicly available source for determining the number of television households that receive the Service through a subscription cable service hereafter becomes available, the parties may mutually agree to use such source in lieu of the foregoing. 2.Payment. The Affiliate Advertising Share, if any, shall be payable quarterly and shall be due no later than forty-five (45) days following the end of each calendar quarter for which a payment is due. If this Agreement is terminated during a calendar quarter, the amount payable shall be determined as of the termination date. II.Affiliate Transactional Share. 1.Determining Affiliate Transactional Share. Commencing with the calendar quarter beginning on April 1, 2006 and for each calendar quarter thereafter during the Term, Network shall pay to Affiliate the Affiliate Transactional Share. For purposes hereof, the "Affiliate Transactional Share" means fifteen percent (15%) of Network's Transactional Revenue for the pertinent calendar quarter. 2.Payment. The Affiliate Transactional Share, if any, shall be payable quarterly and shall be due no later than forty-five (45) days following the end of each calendar quarter for which a payment is due. If this Agreement is terminated during a calendar quarter, the amount payable shall be determined as of the termination date. 23 + +Source: TUBE MEDIA CORP., 8-K, 3/10/2006 + + + + + +EXHIBIT E To Affiliation Agreement By and Between Tribune Broadcasting Company and The TUBE Music Network, Inc. Dated as of March 6, 2006 ADDITIONAL TERMS AND CONDITIONS Music Rights and Copyright Indemnification Without limiting Network's indemnification obligations as set forth in the body of this Agreement: Network agrees to indemnify the Affiliate Indemnitees against any and all Costs arising out of any (i) third-party claims that Network's music performance rights licenses with ASCAP, BMI and SESAC (or directly with the applicable composer(s) and publisher(s)) do not cover music performances through to the viewers of the Service; and (ii) written agreement between Affiliate and an MVPD for the retransmission of the Service (together with the Primary Feed as provided in Section 3(a) of the body of the Agreement) solely within the Station's DMA, or where the Station's signal is deemed "significantly viewed" pursuant to FCC rules, pursuant to which Affiliate is obligated to indemnify such MVPD against any Incremental Copyright Cost (as defined below) resulting directly from the retransmission of the Service by such MVPD in the Station's DMA. For purposes hereof, "Incremental Copyright Cost" shall mean the difference, if any, between (A) the copyright royalties that would be payable by the MVPD in the Station's DMA without carriage of the Service, and (B) the copyright royalties that would be payable by such MVPD in such DMA with the carriage of the Service. Network hereby authorizes Affiliate to enter into such an agreement if, in Affiliate's reasonable and good faith judgment, such an agreement is necessary to obtain an MVPD's consent to carry the Service. For purposes of clarification, ASCAP, BMI and SESAC are and shall be considered "third parties." Network represents and warrants that it has and throughout the Term will have a valid through- to-the-viewer music performance rights license with ASCAP and BMI (and any other society that may license such rights for music contained in the Service) (or directly with the applicable composer(s) and publisher(s)) covering all of the music contained in the Service. Network has commenced negotiations for a through-to-the-viewer music performance rights license with SESAC and expects to attain such license within a reasonable period of time. + +24 + + + +Source: TUBE MEDIA CORP., 8-K, 3/10/2006 \ No newline at end of file diff --git a/full_contract_txt/UAGHINC_04_14_2004-EX-10.18-MAINTENANCE AGREEMENT.txt b/full_contract_txt/UAGHINC_04_14_2004-EX-10.18-MAINTENANCE AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..df427df135116ace5887d34e24c9f4cd2a00d5c8 --- /dev/null +++ b/full_contract_txt/UAGHINC_04_14_2004-EX-10.18-MAINTENANCE AGREEMENT.txt @@ -0,0 +1,77 @@ +Exhibit 10.18 MAINTENANCE AGREEMENT MAINTENANCE AGREEMENT (this "Agreement"), dated as of July 23, 2003, made by Universal Access, Inc., a corporation organized and existing under the laws of the State of Delaware (the "Company"), and CityNet Telecommunications, Inc., a corporation organized and existing under the laws of the State of Delaware (the "Provider"). All capitalized terms used herein and not otherwise defined shall have the meaning set forth in the Purchase Agreement (as defined below). WITNESSETH: WHEREAS, the Provider and the Company entered into that certain Stock Purchase Agreement (the "Purchase Agreement") by and between the Provider and the Company dated as of April 7, 2003; WHEREAS, pursuant to the Purchase Agreement, the Provider will transfer the Fiber Ring Assets to the Company upon the Closing; WHEREAS, as a condition to the Closing, the Provider and the Company agreed to enter into this Agreement; NOW, THEREFORE, in consideration of the mutual agreements set forth herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereby agree as follows: SECTION 1 TERM OF AGREEMENT 1.1. Initial Term. This Agreement commences on the date first above written, and will remain in effect for the period of five (5) years, except as otherwise provided herein. 1.2. Extension of Term. This Agreement will extend automatically for monthly periods unless either party to this Agreement notifies the other party in writing at least thirty (30) days before the expiration of the then current term. 1.3 Termination of Term. Notwithstanding the foregoing, either party may terminate this Agreement at any time without liability by providing one hundred eighty (180) days written notice to the other party. SECTION 2 DESCRIPTION OF SERVICES AND FEES 2.1. Services. (a) The Provider or its affiliate will provide the Company, with respect to the Fiber Ring Assets, all maintenance services (including but not limited to jetwashing and related ancillary services) required under the Provider's license agreements with the municipalities in which the Fiber Ring Assets are located (each a "City Rights Agreement"), and monitoring, emergency response and emergency splicing (collectively, the "Services"). If a + + + + + + service call is required to restore the Fiber Ring Assets to good operating condition, the Company will notify the Provider promptly after it becomes aware of the service affecting problem. (b) The Services shall not include any of the following: (i) remedial or preventive maintenance service performed outside that expressly defined in this Section 2.1; (ii) repair of damage or loss resulting from accident, neglect, misuse or abuse or causes other than ordinary use by the Company for the purpose for which any of the Fiber Ring Assets was designed (collectively, "Repairs"); provided that Services do include Repairs if the damage or loss is caused by the Provider; (iii) making specification or field engineering changes; (iv) unless authorized in writing by the Provider, services resulting from, or which are impractical for the Provider to render because of, any adjustment, repair, maintenance, modification or alteration of the Fiber Ring Assets by any person other than the Provider; and (v) service calls required to restore any of the Fiber Ring Assets to good operating condition, if the Company fails to notify the Provider of a need for service within one (1) day of the Company's knowledge of such need, and such delay has made the provision of the Services more costly. 2.2. Availability of the Services and Repairs. The Provider will be available to provide the Services 24 hours per day, seven (7) days per week. Periodically during the term of this Agreement, the Provider will provide to the Company contact information and reasonable protocols to be followed in order to schedule performance of the Services. 2.3. Fees. In each of the first twelve months of this Agreement, the Company shall pay to the Provider $40,000 per month in exchange for the Services (the "Service Fee"). Upon each anniversary of the commencement of this Agreement, the Service Fee shall be increased by a percentage that reflects the actual increases in the Provider's cost of providing the Services, if any. All materials and labor required to provide any Repairs or any other services or other work not specified in Section 2.1(a) hereof requested by the Company shall be billed to the Company, in addition to the Service Fee as adjusted, at a rate equal to the Provider's actual cost plus 10% service/overhead fee. SECTION 3 COVENANTS OF THE COMPANY As a condition to receiving the Services under this Agreement, the Company hereby agrees and covenants as follows: + + + + + + 3.1. Access to the Fiber Ring Assets. The Company will provide full and free access to the equipment in which to perform service on a 24/7 basis. 3.2. Operation of the Fiber Ring Assets. The Company shall take any and all actions, and refrain from taking any action, within the control of the Company, to ensure that the Provider remains in compliance with, and does not breach or violate the terms of, a City Rights Agreement or any other agreement related to the Fiber Ring Assets to which the Provider is a party. This obligation shall include operating the Fiber Ring Assets in such a manner, and performing certain of the obligations of the operator of the Fiber Ring Assets, so as to remain in compliance with such agreements. The Company acknowledges that it has received and reviewed each of the City Rights Agreements set forth on Schedule 3.2 hereto. The obligations under this Section 3.2 shall survive termination of this Agreement for the life of any applicable City Rights Agreement or similar license. In any sale of a fiber ring, any transferee must agree to assume these obligations from Buyer. 3.3. Transfer of the Fiber Ring Assets. The Company shall not sell, transfer or otherwise attempt to convey or dispose of any part of the Fiber Ring Assets, other than sales and leases of capacity or of individual fiber strands in the ordinary and usual course of business unless the Provider consents to such transaction, which consent will not be withheld if, (a) the proposed transferee consents in writing to the assumption of all obligations of the Company under this Agreement, including those obligations to be undertaken under other agreements pursuant to Section 3.3, and (b) all governmental approvals (under City Rights Agreements or otherwise) have been obtained, with the Provider having the right (if it elects) to coordinate such efforts if it is the counterparty under such agreements requiring approval (with the Company to pay the reasonable costs of doing so). SECTION 4 COVENANTS OF THE PROVIDER As a condition to receiving the Service Fee and any other fees payable to the Provider under this Agreement, the Company hereby agrees and covenants as follows: 4.1. Commercially Reasonable Efforts. The Provider shall undertake commercially reasonable efforts to provide the Services and Repairs. The Provider shall provide the Services and Repairs in a professional and workmanlike manner. 4.2. Access to Information. The Provider shall make available any and all information held by it that is necessary and reasonable for the Company to fulfill its obligations under Section 3.3 of this Agreement. 4.3 Maintenance of Insurance. The Provider will obtain and maintain appropriate liability insurance in an amount of not less than $1,000,000 combined single limit for accidents or occurrences which cause bodily injury, death or property damage related to the performance of the Services. The insurance policy willname the Company as an additional insured. The Provider will provide the Company with a certificate of insurance issued to evidence such coverage. Such certificate will provide that there shall be no cancellation, non-renewal, or modification of such coverage without thirty days' prior written notice to the Company. + + + + + + 4.4 Operation of the Fiber Ring Assets. The Provider shall take any and all actions, and refrain from taking any action, within the control of the Provider, to ensure that the Company remains in compliance with, and does not breach or violate the terms of a City Rights Agreement. SECTION 5 MISCELLANEOUS 5.1. Excused Non-Performance. The Provider shall not be liable nor deemed to be in default for any delay or failure in performance under this Agreement resulting, directly or indirectly, from causes beyond the reasonable control of the Provider, provided that the Provider shall refund to the Company a pro rata portion of the Service Fee for any period in excess of two (2) weeks during which the Provider fails to or is unable for any reason to provide the Services or Repairs called for under this Agreement. Service provided under this Agreement does not assure uninterrupted operation of equipment. 5.2. Limited Warranty. The Provider shall provide maintenance under this Agreement for the fixed rate without regard to the number of legitimate service requests by the Company. 5.3 Limitation of Liability. EXCEPT AS STATED ABOVE, THE PROVIDER'S OBLIGATIONS UNDER THIS AGREEMENT ARE IN LIEU OF ALL OTHER WARRANTIES, EXPRESSED OR IMPLIED. ALL IMPLIED WARRANTIES ARE LIMITED TO THE DURATION OF THIS AGREEMENT. A PARTY'S TOTAL LIABILITY TO THE OTHER PARTY IN CONNECTION WITH THIS AGREEMENT, FOR ANY AND ALL CAUSES OF ACTIONS AND CLAIMS, INCLUDING, WITHOUT LIMITATION, BREACH OF CONTRACT, BREACH OF WARRANTY, NEGLIGENCE, STRICT LIABILITY, MISREPRESENTATION AND OTHER TORTS, SHALL BE: (a) FOR BODILY INJURY OR DEATH TO ANY PERSON PROXIMATELY CAUSED BY A PARTY'S NEGLIGENCE, THE AMOUNT OF DIRECT DAMAGES PROVEN; (b) FOR LOSS OR DAMAGE TO REAL PROPERTY OR TANGIBLE PERSONAL PROPERTY PROXIMATELY CAUSED BY A PARTY'S NEGLIGENCE, THE AMOUNT OF DIRECT DAMAGES PROVEN; (c) FOR ANY DAMAGES ARISING OUT OF THE WILLFUL OR INTENTIONAL MISCONDUCT OF A PARTY, THE AMOUNT OF DIRECT DAMAGES PROVEN; (d) FOR ALL OTHER DAMAGES OTHER THAN THOSE SET FORTH ABOVE AND NOT EXCLUDED UNDER THIS AGREEMENT, EACH PARTY'S LIABILITY TO THE OTHER PARTY DURING ANY TWELVE (12) MONTH PERIOD SHALL BE LIMITED TO THE LESSOR OF (i) DIRECT DAMAGES PROVEN BY THE PARTY, OR (ii) THE AMOUNT PAID BY THE COMPANY TO THE PROVIDER UNDER THIS AGREEMENT FOR THE TWELVE (12) MONTH PERIOD PRIOR TO THE CLAIM. The foregoing limitations do not apply to the Company's obligation to pay the Service Fees. + + + + + + THE PROVIDER SHALL NOT BE LIABLE FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES, INCLUDING BUT NOT LIMITED TO LOSS OF REVENUES OR LOSS OF PROFIT, ARISING OUT OF THE PROVISION OF THE SERVICES OR REPAIRS, NOTWITHSTANDING ADVANCE NOTICE FROM THE COMPANY THAT THE POSSIBILITY OF SUCH DAMAGE OR LOSS EXISTS. 5.3. Notices. Any notice, request, demand or other communication required or permitted hereunder shall be deemed to have been given if delivered by facsimile transmission, upon receipt, if by hand delivery, upon receipt, if sent by nationally recognized overnight courier service, one day after deposit with such, or if sent by registered or certified mail, upon the sooner of the date on which receipt is acknowledged or the expiration of three days after deposit in United States post office facilities properly addressed with postage prepaid. All notices to a party will be sent to the addresses set forth below or to such other address or person as such party may designate by notice to each other party hereunder: TO THE PROVIDER: + + + +CityNet Telecommunications, Inc. 8405 Colesville Road 6th Floor Silver Spring, Maryland 20910 Attention: General Counsel Facsimile: 301-608-8121 TO THE COMPANY: + + + +Universal Access Global Holdings Inc. 233 S. Wacker Drive, Suite 600 Chicago, IL 60606 Attention: General Counsel Facsimile: 312-660-1290 If notice is sent by facsimile transmission, in order to be effective, such notice must also be sent by one of the other means of delivery identified above. Any notice given hereunder may be given on behalf of any party by his counsel or other authorized representatives. 5.4. Amendments. Any term, covenant, agreement or condition of this Agreement may be amended only in a writing signed by the Company and the Provider. 5.5. Assignment; Successors or Assigns. This Agreement and the rights and obligations hereunder may be assigned by the Provider upon written notice to the Company. All rights and obligations under this Agreement shall be binding upon any and all successors or assigns. 5.6. Survival. All covenants, representations and warranties made herein by the Company shall survive and not be waived by the execution and delivery of this Agreement. + + + + + + 5.7. Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be an original, but all of which shall constitute one and the same instrument. It shall not be necessary in making proof of this Agreement to produce or account for more than one such counterpart. 5.8. Headings. The headings of the sections and subsections hereof are provided for convenience only and shall not in any way affect the meaning or construction of any provision of this Agreement. 5.9. Governing Law; Submission To Jurisdiction; Venue. (a) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED ACCORDING TO AND GOVERNED BY THE SUBSTANTIVE LAWS OF THE STATE OF DELAWARE, EXCLUDING ITS CONFLICTS OF LAWS PRINCIPLES TO THE EXTENT SUCH PRINCIPLES WOULD LEAD TO THE APPLICATION OF A SUBSTANTIVE LAW OTHER THAN THE LAW OF THE STATE OF DELAWARE. (b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF DELAWARE OR IN ANY UNITED STATES DISTRICT COURT SITTING WITHIN THE STATE OF DELAWARE, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE COMPANY AND THE PROVIDER CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE COMPANY AND THE PROVIDER IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, THAT IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT. EACH OF THE COMPANY AND THE PROVIDER WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, THAT MAY BE MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH STATE. (c) EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS AGREEMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THIS AGREEMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. + + + + + + 5.10. Severability. If any provision of this Agreement is determined to be illegal, invalid or unenforceable, such provision shall be fully severable and the remaining provisions shall remain in full force and effect and shall be construed without giving effect to the illegal, invalid or unenforceable provisions. 5.11. Entirety. This Agreement represents the entire agreement of the parties hereto, and supersedes all prior agreements and understandings, oral or written, if any, relating to the transactions contemplated herein. + + + + + + IN WITNESS WHEREOF, the parties hereto have caused this Maintenance Agreement to be executed by their duly elected officers duly authorized as of the date first above written. + +UNIVERSAL ACCESS, INC. + +By: + + + +Name: + +Title: + +CITYNET TELECOMMUNICATIONS, INC. + +By: + + + +Name: + +Title: + + + + + + SCHEDULE 3.2 City Rights Agreements (1) Access and License Agreement dated December 8, 2000, between the Consolidated City of Indianapolis, Marion County, Indiana and the Department of Capital Asset Management (jointly as "Licensor") and CityNet Telecommunications, Inc. as "Licensee," as amended by the Amendment to the Access and License Agreement dated as of June 25, 2003, by and between Licensor, Licensee and Universal Access, Inc. (2) License Agreement dated November 8, 2000, between the City of Albuquerque, New Mexico and CityNet Telecommunications, Inc. \ No newline at end of file diff --git a/full_contract_txt/ULTRAGENYXPHARMACEUTICALINC_12_23_2013-EX-10.9-SUPPLY AGREEMENT.txt b/full_contract_txt/ULTRAGENYXPHARMACEUTICALINC_12_23_2013-EX-10.9-SUPPLY AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..54a6c0d140a41fa1a8347c9e4f946fc39e72f0ed --- /dev/null +++ b/full_contract_txt/ULTRAGENYXPHARMACEUTICALINC_12_23_2013-EX-10.9-SUPPLY AGREEMENT.txt @@ -0,0 +1,185 @@ +Exhibit 10.9 + +SUPPLY AGREEMENT + +between + +CREMER OLEO GmbH & Co KG, Glockengiesserwall 3, 20095 Hamburg, + +Germany + +— hereinafter referred to as Cremer — + +and + +Ultragenyx Pharmaceutical Inc, 60 Leveroni Court, Suite 200, Novato, California 94949, United States of America + +— hereinafter referred to as Ultragenyx — + +­ each party also referred to as a "Party" and jointly as the "Parties" - + +Preamble + +Whereas, Cremer is a producer of oleo chemical products; + +Whereas, Ultragenyx is a biotechnology company committed to bringing life-enhancing therapeutics for patients with rare and ultra-rare genetic diseases, also known as orphan diseases, to market; + +Whereas, the Parties desire that Cremer supplies to Ultragenyx the product Triheptanoin (hereinafter also referred to as the "Product") in bulk form pursuant to the terms and conditions of this Agreement; + +Whereas, Ultragenyx intends to process the Product into a pharmaceutical product in the meaning of Sec. 2 German Pharmaceuticals Act (Arzneimittelgesetz—AMG) and to market the processed Product in the Field (as defined below) (hereinafter referred to as the "Purpose"); and + +Whereas, Ultragenyx intends to obtain regulatory approval for the processed Product as a pharmaceutical product in the meaning of Sec. 2 AMG. + +Now therefore, the Parties hereto agree as follows: + +Article 1 Supply of Product + +1) Subject to the terms and conditions set forth in this Agreement Cremer shall supply Ultragenyx with the Product free from defect and meeting the product specification attached to this Agreement as Annex A (the "Product Specifications"). + +2) Cremer shall supply Ultragenyx exclusively with the Product worldwide. The aforesaid exclusivity is limited to [***] (collectively, the "Field"). Cremer may supply the Product to other customers outside of the Field. + +3) Ultragenyx shall purchase the Product exclusively from Cremer. + +[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. + +1 + + + + + +Article 2 Orders and Delivery + +1) The Product will be ordered by Ultragenyx through purchase orders. Purchase orders shall be submitted in any written or electronic form or by facsimile, setting out the quantity of Product required and the date for delivery. Cremer shall give its order confirmation in writing stating the quantity and Price (as defined below). Cremer shall not be obliged to deliver the Product in the absence of a written order confirmation given to Ultragenyx. + +2) Delivery of the Product in bulk form by Cremer shall be EXW (Incoterms 2010), unless otherwise agreed in writing by the Parties. + +3) Within [***] days of execution of this Agreement, Cremer shall deliver to Ultragenyx the Master Batch Record for the Product for Ultragenyx to review. + +4) All Product shall be delivered with the applicable certificate of analysis and batch records for the Product delivered and an invoice for the quantity of Product delivered. + +5) If Ultragenyx obtains regulatory approval for the processed Product, the Parties shall enter into a separate commercial supply agreement for the Product that sets forth the forecasting and ordering mechanism for commercial supply of the Product, enablement of the manufacturing process in the event of a failure to supply, the term of such commercial supply agreement and other customary terms and conditions. + +Article 3 Prices and payment + +1) The prices payable by Ultragenyx to Cremer for the Product (the "Price") shall be agreed [***] every contract year; provided, that the Price may not increase more than the [***] for such period or [***]%, whichever is higher. At the date of signing the Parties agree on a Price of €[***] per kilogram for the Product. + +2) If the parties cannot agree on a price for the Product by the beginning of a following contract year, Cremer may refuse to deliver the Product to Ultragenyx until the Parties agreed on a respective price. + +3) Payments shall be made by Ultragenyx in Euro and within [***] days after receipt of a proper invoice. + +4) Transfer of title with respect to any Product shall be subject to full payment and settlement of all claims Cremer may have against Ultragenyx in connection with the execution of this Agreement. + +Article 4 Specification; Warranties; Cremer's Liability; Indemnification + +1) The Parties assume that the Product constitutes an active pharmaceutical ingredient in the meaning of Sec. 4 para. 19 AMG. Ultragenyx shall process the Product into a pharmaceutical product in the meaning of Sec. 2 AMG and market the processed Product as a pharmaceutical product in the meaning of Sec 2 AMG and to perform clinical trials. Cremer does not participate in the processing, manufacturing and marketing of the respective pharmaceutical product or in the clinical trials. + +[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. + +2 + + + + + +2) Upon execution of this Agreement and any purchase order, Cremer shall provide Ultragenyx with following documentation regarding the Product: Certificate of Analysis and the applicants' part of the Drug Master File once compiled. + +3) Cremer represents and warrants that all quantities of Product delivered under the Agreement were manufactured in accordance with GMP. The Product shall be free from defects if it is within the specifications according to Annex A. + +4) Cremer represents and warrants that it has not received any written notice from a third party alleging that the manufacture, use or sale of the Product infringes intellectual property rights of a third party. + +5) Ultragenyx will perform final release of the Product. Ultragenyx may rely on the documentation provided by Cremer and Ultragenyx will not need to independently test the Product unless Ultragenyx determines such independent testing is necessary. In the event that the Product fails to conform to the Product Specifications, and/or GMP, Ultragenyx may reject the Product by giving written notice to Cremer within [***] days after receipt of the Product and all documentation (except such [***] day period will not apply for any latent defect). Within [***] days following receipt of the rejected and returned Product from Ultragenyx, Cremer will, at Ultragenyx's choice, replace such quantity of Product with Product conforming to the Product Specifications, and GMP or refund Ultragenyx the Price paid for such Product. + +6) Cremer does not warrant or represent that the Product is effective in a pharmaceutical way within the meaning of Sec. 4 para. 19 AMG. Cremer does not warrant or represent that the Product is safe in a pharmaceutical and pharmacological way. Cremer does not warrant or represent that the Product is suitable for the intended Purpose by Ultragenyx. Cremer is not a pharmaceutical manufacturer within the meaning of Sec. 4 para. 18 AMG. Cremer's liability in connection with the Purpose and the processing and marketing of a pharmaceutical product is excluded. No. 9 below applies. + +7) Except for a claim arising out of Cremer's intentional misconduct or gross negligence under this Agreement, in the event of legal proceedings being instituted against Cremer by a third party arising out of Ultragenyx's development, processing and commercialization of the Product, Ultragenyx shall indemnify and keep indemnified Cremer in full against all damages, losses, injuries, costs and expenses in connection with such legal proceedings. Cremer will inform Ultragenyx about any legal proceedings being instituted against Cremer without delay. Ultragenyx shall control the respective legal proceedings but shall not settle any claim that admits fault on behalf of Cremer without Cremer's consent (not be unreasonably withheld). + +[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. + +3 + + + + + +8) In the event of legal proceedings being instituted against Ultragenyx by a third party arising out of Cremer's intentional misconduct or gross negligence under this Agreement, Cremer shall indemnify and keep indemnified Ultragenyx in full against all damages, losses, injuries, costs and expenses in connection with such legal proceedings. Ultragenyx will inform Cremer about any legal proceedings being instituted against Ultragenyx without delay. Cremer shall control the respective legal proceedings but shall not settle any claim without Ultragenyx's consent (not be unreasonably withheld). + +9) Cremer's liability arising from this Agreement is limited to intentional misconduct or gross negligence. This limitation of liability does not apply to the injury of the life, body or health of a person, to claims according to the Product Liability Act (Produkthaftungsgesetz) or any other coercive legal liability claims. + +10) NEITHER PARTY MAY CLAIM AND NEITHER PARTY IS LIABLE FOR CLAIMS FOR INDIRECT DAMAGES AND LOSSES, SUCH AS SPECIAL OR CONSEQUENTIAL LOSS OR DAMAGE, ANY LOSS OF ACTUAL OR ANTICIPATED PROFIT, OR REVENUE, ANTICIPATED SAVINGS OR BUSINESS OR DAMAGE TO GOODWILL OR BRAND EQUITY, ARE EXCLUDED. + +Article 5 Term and Termination + +1) This Agreement shall become effective on the date of its execution and shall remain in force for three years (the "Initial Term"). Thereafter, the Agreement shall be automatically renewed for additional two year periods (each a "Renewal Term", the Initial Term and all Renewal Terms, the "Term") unless either Party notifies the other Party of its intention not to renew in writing at least three calendar months before the expiration of the then current Term. + +2) If a Party materially breaches an obligation under this Agreement and does not cure such breach within sixty (60) days of receiving notice of such breach from the non-breaching Party, the non-breaching Party may terminate this Agreement immediately upon written notice to the breaching Party. + +3) Every termination has to be in writing. + +Article 6 General Terms and Conditions + +The application of General Terms and Conditions of any Party is excluded. + +Article 7 Product Development + +At the request and expense of Ultragenyx, Cremer shall perform development work for Ultragenyx to develop new formulations of the Product. All such work shall be performed pursuant to a statement of work (including a budget) to be agreed upon by the Parties and attached as an annex to this Agreement (each, a "Statement of Work"). In the event that in the course of performing a Statement of Work new Product know­how and intellectual property rights may result, can be created or have been created the Parties will enter into a separate Agreement in order to define the rights and duties regarding the aforesaid know how and intellectual property rights. + +[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. + +4 + + + + + +Article 8 Invalidity + +In the event that any individual clauses of these terms and conditions are, or shall become, invalid, this shall not affect the validity of the remaining clauses. An invalid condition shall be deemed to have been replaced by such provision which is legally valid and corresponds nearest to the economic purpose of the clause originally deemed invalid. + +Article 9 Applicable Law; Modifications; Annexes; Miscellaneous + +1) The laws of the Federal Republic of Germany shall apply to the Agreement and any legal relations thereof, especially any purchase order, between Cremer and Ultragenyx shall be governed by that law. The law of the United Nations Conventions of the formation of Agreements for the international sale of goods (CISG) is excluded. Exclusive place of Jurisdiction is Hamburg, Germany. + +2) No addition or modification to this Agreement shall be valid unless made in writing and signed by the Parties. + +3) The Annex attached to this Agreement form an integral part of the Agreement. + +4) This Agreement, including the Annexes and any Statement of Work, constitutes the entire agreement between the Parties concerning the subject matter hereof and supersedes all written or oral prior agreements or understandings with respect thereto except the Confidentiality Agreement between the parties dated September 26t h, 2012. This Agreement shall be binding upon and shall inure to the benefit of the Parties hereto, their successors and assigns. + +5) All waivers must be in writing and signed by the Party to be charged. Any waiver or failure to enforce any provision of this Agreement on one occasion will not be deemed a waiver of any other provision or of such provision on any other occasion. + +6) Each Party must deliver all notices, consents, and approvals required or permitted under this Agreement in writing to the other Party at the address specified above, by personal delivery, by certified or registered mail (postage prepaid and return receipt requested), by a nationally- recognized overnight carrier, or by facsimile transmission with electronic confirmation of transmission. Notice will be effective upon receipt or refusal of delivery. Each Party may change its address for receipt of notice by giving notice of such change to the other Party. + +7) This Agreement may be executed in counterparts by original signature, facsimile or PDF files, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. + +5 + + + + + +Hamburg, November 19t h, 2012 + + /s/ Thomas Kassberg /s/ Dr. R. Stephan Ultragenyx Pharmaceutical Inc + + + +CREMER OLEO GmbH & Co KG + + CREMER OLEO GmbH & Co. KG Postfach 10 11 20, D-20007 Hamburg Tel: 040/320 11-0, Telefax 320 11-400 + +6 + + + + + +Annex A — Specification of the Product Trihepatanoin (Heptansäuretriglycerid) + +No Test EP method Limits + +1 [***] [***], [***] 2 [***] [***] [***] 3 [***] [***] [***] 4 [***] [***] [***] 5 [***] [***] [***] 6 [***] [***] [***] 7 [***] [***] [***] 8 [***] [***] [***] 9 [***] [***] [***] 10 [***] [***] [***] 11 [***] [***] [***] 12 [***] [***] 13 [***] [***] [***] 18 [***] [***] [***] + +[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. + +7 \ No newline at end of file diff --git a/full_contract_txt/UNITEDNATIONALBANCORP_03_03_1999-EX-99-Outsourcing Agreement with the BISYS Group, Inc..txt b/full_contract_txt/UNITEDNATIONALBANCORP_03_03_1999-EX-99-Outsourcing Agreement with the BISYS Group, Inc..txt new file mode 100644 index 0000000000000000000000000000000000000000..e9572aa2f70b71b0b66e104df25402ebe6ea3f48 --- /dev/null +++ b/full_contract_txt/UNITEDNATIONALBANCORP_03_03_1999-EX-99-Outsourcing Agreement with the BISYS Group, Inc..txt @@ -0,0 +1,11 @@ +United National Bancorp Enters Into Outsourcing Agreement with the BISYS Group, Inc. + +Bridgewater, NJ -- February 18, 1999 -- United National Bancorp (Nasdaq: UNBJ) announced today that its principal subsidiary, United National Bank, has entered into a multi-year agreement with the BISYS Group, Inc. whereby BISYS will provide integrated information processing services, as well as item processing and deposit services, for United National. + +"We are excited about the opportunities available to us as a result of our new partnership with BISYS," stated Thomas C. Gregor, chairman and chief executive officer of United National. "During the past year we completed an assessment of our information processing needs going forward into the next century. After evaluating a number of different options, we determined that the flexibility and quality of BISYS' TOTALPLUS (R) system would best serve our needs today and for years to come." + +United Financial Services, a third party services provider that United National Bancorp owns with another joint venture partner, currently handles the Bank's information processing services, item processing and deposit services. As a result of its planned move to BISYS, United National will be liquidating its interest in United Financial Services during the first half of 1999 after it goes live with BISYS. + +"Our investment in United Financial Services has made a great deal of sense since we established it in 1995," said Mr. Gregor. "United Financial Services has allowed United National to realize significant efficiencies through the sharing of technology and processing costs. Nevertheless, we believe that the enhanced capabilities which BISYS offers are better matched to the future direction of our Bank." + +Contact: media, Donald Reinhard, 908-429-2370 or investors, Donald Malwitz, 908-429-2405, both of United National. \ No newline at end of file diff --git a/full_contract_txt/URSCORPNEW_03_17_2014-EX-99-COOPERATION AGREEMENT.txt b/full_contract_txt/URSCORPNEW_03_17_2014-EX-99-COOPERATION AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..239de95bee43bf17685597f529501caee739e621 --- /dev/null +++ b/full_contract_txt/URSCORPNEW_03_17_2014-EX-99-COOPERATION AGREEMENT.txt @@ -0,0 +1,361 @@ +EXHIBIT B + +COOPERATION AGREEMENT + +This Agreement dated March 13, 2014 is by and between JANA Partners LLC ("JANA") and URS Corporation (the "Company"). In consideration of and reliance upon the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows: + +1. Representations and Warranties of the Company. The Company represents and warrants to JANA that this Agreement has been duly authorized, executed and delivered by the Company, and is a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms. + +2. Representations and Warranties of JANA. JANA represents and warrants to the Company that this Agreement has been duly authorized, executed and delivered by JANA, and is a valid and binding obligation of JANA, enforceable against JANA in accordance with its terms. As of the date of this Agreement, JANA beneficially owns 6,745,623 shares of the Company's common stock and has voting authority over such shares. + +3. Board Nomination and Other Company Matters. + +(a) In accordance with the Company's By­Laws and Delaware law, the Company agrees that, effective as of the next meeting (the "March Board Meeting") of the Board of Directors of the Company (the "Board"), which shall be held not later than March 27, 2014, and prior to taking any other formal action at such meeting, the Board will: + +(1) increase the size of the Board to fourteen (14) members; and + +(2) appoint Diane C. Creel, William H. Schumann, III, David N. Siegel and V. Paul Unruh (together, the "JANA Nominees") (other than in the case of the refusal or inability of any such person to serve, in which case, the Board shall appoint his/her substitute chosen in accordance with Section 3(c)) as Company directors to fill the vacancies created thereby and to have the same rights of participation in all other matters undertaken at the March Board Meeting as the other Company directors; provided, however, that as a condition to the appointment of each JANA Nominee, such JANA Nominee shall have completed and executed the Company's 2014 Questionnaire for Potential Director Nominees and the Director Nominee Representation and Agreement, provided that such documents have not been amended in any material respect from the versions provided to JANA prior to the date of this Agreement, and have agreed to comply with all policies, codes of conduct, confidentiality obligations and codes of ethics applicable to all of the Company's directors, including the Company's Code of Business Conduct, to provide the information regarding themselves that is required to be disclosed for candidates for directors and directors in a proxy statement under the federal securities laws of the United States of America and/or applicable New York Stock Exchange rules and regulations, and to provide such other customary information as reasonably requested by the Company; and provided, further that any JANA Nominee may participate in the March Board Meeting telephonically if unable to attend in person. + +(b) The Company agrees that: + + + + + + + + (1) the Board will not approve any material new transactions prior to the March Board Meeting; + +(2) at the 2014 annual meeting of the Company's shareholders (the "2014 Annual Meeting"), the Board will nominate the JANA Nominees (other than in the case of the resignation, refusal or inability of any such person to serve, in which case, the Board shall nominate his/her substitute chosen in accordance with Section 3(c)), together with the other persons included in the Company's slate of nominees for election as director at the 2014 Annual Meeting in accordance with Section 3(d), as directors of the Company, in each case with a term expiring at the 2015 annual meeting of the Company's shareholders (the "2015 Annual Meeting"); + +(3) the Board will recommend that the shareholders of the Company vote to elect the JANA Nominees as directors of the Company at the 2014 Annual Meeting; + +(4) the Company shall use its reasonable best efforts (which shall include the solicitation of proxies) to obtain the election of the JANA Nominees at the 2014 Annual Meeting (it being understood that such efforts shall be not less than the efforts used by the Company to obtain the election of any other independent (as determined under Section 303A of the New York Stock Exchange's Listed Company Manual) director nominee nominated by it to serve as a director on the Board at the 2014 Annual Meeting); and + +(5) two individuals who are Company directors as of the date of this Agreement (other than Martin M. Koffel, or in addition to Mr. Koffel if applicable under Section 4(b) of this Agreement) will not seek re-election to the Board at the 2014 Annual Meeting, and the Company shall not seek to fill such vacancies. + +(c) The Company agrees that if any of the JANA Nominees resigns as a director or otherwise refuses to or is unable to serve as a director at any time prior to the 2015 Annual Meeting, including as a result of death or disability, JANA shall be entitled to designate a replacement director who shall be independent of JANA, would be considered an independent director of the Company under Section 303A of the New York Stock Exchange's Listed Company Manual, is reasonably acceptable to the Board as a replacement director and has a comparable amount of business experience, although such experience need not be in the same industry or industries, and is in equally good standing in all material respects, as the JANA Nominee being replaced. For the avoidance of doubt, the substitute director shall thereafter be deemed a JANA Nominee for purposes of this Agreement and be entitled to the same rights and subject to the same requirements under this Agreement applicable to the resigning JANA Nominee prior to his or her resignation, and such person shall be appointed to the Board to serve the unexpired term, if any, of such JANA Nominee. + +(d) Other than the JANA Nominees, the Board will only nominate eight (8) individuals for election at the 2014 Annual Meeting, including Mr. Koffel subject to Section 4(b) of this Agreement. + +(e) Promptly following the 2014 Annual Meeting, the Board will decrease the size of the Board to twelve (12) members. Until the 2015 Annual Meeting, the Company shall not increase the size of the Board in excess of twelve (12) members, and shall not decrease the size of the Board if such decrease would require the resignation of one or more of the JANA Nominees. Other than for vacancies filled pursuant to Section 3(c) or arising as a result of a breach of this Agreement by the Company, nothing in this Agreement shall prevent the Company from filling all vacancies in accordance with the By-Laws of the Company. + + + + + + + + (f) The Company will take appropriate action so that, prior to the 2015 Annual Meeting, its director change of position policy does not require a JANA Nominee to resign by reason of any material change in his or her primary job responsibility or position held at the time such JANA Nominee was appointed to the Board. + +4. CEO Succession. + +(a) At the March Board Meeting, the Company shall appoint two JANA Nominees chosen by JANA to the CEO Succession Committee of the Board (the "CEO Succession Committee") and shall appoint such JANA Nominees to any other committee currently or in the future designated to review or oversee the selection process for a successor to Mr. Koffel as chief executive officer or substantially similar position (the "New CEO"), and shall not otherwise increase the size of the CEO Succession Committee or any such other committee. In the event of the replacement as set forth in Section 3(c) of any JANA Nominee appointed to the CEO Succession Committee pursuant to this Section 5, his or her successor shall be promptly appointed to the committee seat vacated by such former director to serve until the 2015 Annual Meeting. The CEO Succession Committee and any other committee currently or in the future designated to review or oversee the selection process for the New CEO shall not take any material action prior to the March Board Meeting. + +(b) In order to ensure an orderly transition, Mr. Koffel may in his sole discretion continue (including, for the avoidance of doubt, after the 2014 Annual Meeting) as the Chief Executive Officer, Chairman of the Board and a director of the Company during the selection process for the New CEO until the Board shall appoint the New CEO, which shall not be later than the earlier of December 31, 2014, or Mr. Koffel's voluntary resignation from such positions; provided that Mr. Koffel will resign as a director of the Company and the Chairman of the Board upon the effectiveness of the Board's appointment of the New CEO; provided, further, that nothing contained herein is intended to modify any employment agreement, equity award, retirement plan or other pre-existing obligation of the Company to Martin Koffel or to impose any additional obligations on Martin Koffel (beyond the obligation to resign as provided in this Section 4(b)). The Board shall appoint the New CEO as a director of the Company with a term expiring at the Company's next annual meeting after his or her appointment. + +5. Compensation Committee. At the March Board Meeting, the Company shall appoint one JANA Nominee chosen by JANA (provided that such JANA Nominee must have prior experience serving on the Compensation Committee of a public company incorporated in the United States and listed for trading on the New York Stock Exchange or NASDAQ) to the Compensation Committee of the Board (the "Compensation Committee"), and shall not otherwise increase the size of the Compensation Committee until the 2015 Annual Meeting. In the event of the replacement as set forth in Section 3(c) of any JANA Nominee appointed to the Compensation Committee pursuant to this Section 5, his or her successor shall be promptly appointed to the committee seat vacated by such former director to serve until the 2015 Annual Meeting. The Compensation Committee and any other committee currently or in the future designated to review or oversee compensation shall not take any material action prior to the March Board Meeting. + +6. Value Creation Committee and Other Matters. + +(a) At the March Board Meeting, the Board shall establish a new committee of the Board (the "Value Creation Committee"), whose purpose will be to evaluate all options for enhancing shareholder value, including by (i) engaging Bank of America Merrill Lynch, or if Bank of America Merrill Lynch is unavailable or the Company is unable to reach acceptable terms with Merrill Lynch Bank of America despite using reasonable best efforts to do so, another investment bank mutually agreeable to the Company and JANA, as promptly as practicable, to review all options for enhancing value, including by conducting a strategic review of the Company's business, operations and capital + + + + + + + + structure; (ii) engaging a cost consultant, mutually agreeable to the Company and JANA, to conduct a cost review commencing with the completion of the investment banker review described in clause (ii) above; and (iii) reviewing the Company's management compensation structure to enhance alignment with shareholder value creation. There shall be four (4) members of the Value Creation Committee, two (2) of whom shall be JANA Nominees chosen by JANA, and the Board shall not increase the size of the Value Creation Committee until the 2015 Annual Meeting, if still in existence at such time. In the event of the replacement as set forth in Section 3(c) of any JANA Nominee appointed to the Value Creation Committee pursuant to this Section 5, his or her successor shall be promptly appointed to the committee seat vacated by such former director to serve until the 2015 Annual Meeting + +(b) The Company hereby agrees that it will not make any acquisitions during the Cooperation Period, except for ordinary course acquisitions individually under $10 million (not to exceed $30 million in the aggregate) or acquisitions that a majority of the JANA Nominees have recommended. + +7. Cooperation. + +(a) JANA agrees that, from the date of this Agreement until the earliest of (i) the date that is thirty (30) calendar days prior to any applicable deadline by which a shareholder must give notice to the Company of its intention to nominate a director for election at or bring other business before the 2015 Annual Meeting under the Company's By­Laws and (ii) any material breach of this Agreement by the Company (provided that the Company shall have three (3) business days following written notice from JANA of material breach to remedy such material breach if capable of remedy) (such period, the "Cooperation Period"), neither it nor any of its Affiliates or Associates will in any manner, directly or indirectly, make, or cause to be made, or in any way encourage any other person to make or cause to be made, any statement or announcement that relates to and constitutes an ad hominem attack on, or relates to and otherwise disparages, the Company, any of its officers or directors or any person who has served as an officer or director of the Company, including: (i) in any document or report filed with or furnished to the Securities and Exchange Commission (the "SEC") or any other governmental agency, (ii) in any press release or other publicly available format or (iii) to any journalist or member of the media (including without limitation, in a television, radio, newspaper or magazine interview), or otherwise; provided, that if the Company makes any material announcement prior to the March Board Meeting, JANA will be permitted to make objective statements that solely reflect JANA's view, as a shareholder, with respect to such announcement. + +(b) The Company agrees that, from the date of this Agreement until the earliest of (i) the date that is thirty (30) calendar days prior to any applicable deadline by which a shareholder must give notice to the Company of its intention to nominate a director for election at or bring other business before the 2015 Annual Meeting under the Company's By­Laws and (ii) any material breach of this Agreement by JANA (provided that JANA shall have three (3) business days following written notice from the Company of material breach to remedy such material breach if capable of remedy), neither it nor any of its Affiliates or Associates will in any manner, directly or indirectly make, or cause to be made, or in any way encourage any other person to make or cause to be made, any statement or announcement that relates to and constitutes an ad hominem attack on, or relates to and otherwise disparages, JANA, any of its members, officers or directors or any person who has served as a member, officer or director of JANA, including: (i) in any document or report filed with or furnished to the SEC or any other governmental agency, (ii) in any press release or other publicly available format or (iii) to any journalist or member of the media (including without limitation, in a television, radio, newspaper or magazine interview), or otherwise. + + + + + + + + (c) The limitations set forth in Sections 7(a) and 7(b) shall not prevent either party from responding to any public statement made by the other party of the nature described in Sections 7(a) and 7(b) if such statement by the other party was made in breach of this Agreement. + +(d) During the Cooperation Period, JANA shall cause all shares of the Company's capital stock ("Shares") beneficially owned, directly or indirectly, by it, or by any of its Affiliates or Associates (including without limitation all Shares beneficially owned as of the respective record dates for the 2014 Annual Meeting and as of the record dates for any special meeting of shareholders) over which it exercises or has voting authority, to be present for quorum purposes and to be voted, at such meetings or at any adjournments or postponements thereof, in favor of the current members of the Board (including the JANA Nominees) that will be up for election at such meetings, and not to submit any proposal for consideration at, or bring any other business before, the 2014 Annual Meeting or initiate, encourage or participate in any "withhold" or similar campaign with respect to the election of directors at the 2014 Annual Meeting and shall not permit any of its Affiliates or Associates to do any of the foregoing or publicly or privately encourage or support any other stockholder to take any such actions. + +(e) During the Cooperation Period, JANA will not, and shall cause its Affiliates and Associates to not, directly or indirectly, without the prior written consent of the Company: (i) acquire, seek or propose (publicly or otherwise) to acquire, beneficial ownership, directly or indirectly, of any additional Shares or rights or options to acquire any additional Shares if such acquisition would cause JANA's beneficial ownership to exceed 14.9% of the Company's common stock; (ii) publicly seek or propose to influence or control the management or policies of the Company, seek or propose (publicly or otherwise) to obtain representation on the Board (except as set forth herein), or solicit, or participate in the solicitation of, any proxies or consents with respect to any securities of the Company, or publicly request permission to do any of the foregoing, or take any action which would, or would reasonably be expected to, require public disclosure regarding any of the types of matters set forth in this clause (ii); (iii) submit (publicly or otherwise) a proposal for, or offer of (with or without conditions) any extraordinary transaction (including a tender offer, exchange offer, merger, acquisition or consolidation) involving the Company or its securities or assets or take any action which would, or would reasonably be expected to, require public disclosure regarding any of the types of matters set forth in this clause (iii); (iv) request (publicly or otherwise) a special meeting of the Company's shareholders or submit, or participate in, any shareholder proposal to the Company or any "shareholder access" proposal that may be adopted by the SEC; or (v) encourage, assist or enter into any discussions, negotiations, arrangements or understandings with any third party with respect to any of the foregoing, or otherwise form, join or in any way participate in a "group" (as defined in Section 13(d)(3) of the Exchange Act) in connection with any of the foregoing. JANA also agrees not to, and to cause its Affiliates and Associates not to, request during the Cooperation Period that the Company (or its directors, officers, employees or agents), directly or indirectly, amend or waive any provision of this Section (including this sentence), publicly or in a manner that would require public disclosure of such request. + +(f) Nothing in this Agreement shall be deemed to limit JANA's ability to provide its views privately to the Board on any matter or to privately request a waiver of any provision of this Agreement, provided that such actions are not reasonably expected to require public disclosure of such actions. + +8. Public Announcement and SEC Filing. + +(a) JANA and the Company shall announce this Agreement and the material terms hereof including the terms of Section 6 by means of a joint press release in the form attached hereto as Exhibit A (the "Press Release") as soon as practicable but in no event later than 9:00 a.m., New York City time, on March 17, 2014. + + + + + + + + (b) JANA shall promptly prepare and file an amendment (the "13D Amendment") to its Schedule 13D with respect to the Company filed with the SEC on February 27, 2014 reporting the entry into this Agreement and amending applicable items to conform to its obligations hereunder. The 13D Amendment shall be consistent with the Press Release and the terms of this Agreement. JANA shall provide the Company with reasonable opportunity to review and comment upon the 13D Amendment prior to filing, and shall consider in good faith any changes proposed by the Company necessary to cause such 13D Amendment to comply with this Agreement. + +9. Definitions. For purposes of this Agreement: + +(a) the terms "Affiliate" and "Associate" shall have the respective meanings set forth in Rule 12b­2 promulgated by the SEC under the Securities Exchange Act of 1934, as amended (the "Exchange Act"); + +(b) the terms "beneficial owner" and "beneficially own" shall have the same meanings as set forth in Rule 13d­3 promulgated by the SEC under the Exchange Act except that a person shall also be deemed to be the beneficial owner of all Shares which such person has the right to acquire (whether such right is exercisable immediately or only after the passage of time) pursuant to the exercise of any rights in connection with any securities or any agreement, arrangement or understanding (whether or not in writing), regardless of when such rights may be exercised and whether they are conditional, and all Shares which such person or any of such person's Affiliates or Associates has or shares the right to vote or dispose; and + +(c) the terms "person" or "persons" shall mean any individual, corporation (including not­for­profit), general or limited partnership, limited liability or unlimited liability company, joint venture, estate, trust, association, organization or other entity of any kind or nature. + +10. Notices. All notices, consents, requests, instructions, approvals and other communications provided for herein and all legal process in regard hereto shall be in writing and shall be deemed validly given, made or served, if (a) given by telecopy and email, when such telecopy is transmitted to the telecopy number set forth below and sent to the email address set forth below and the appropriate confirmation is received or (b) if given by any other means, when actually received during normal business hours at the address specified in this Section: + +if to the Company: URS Corporation 600 Montgomery Street, 26th Floor San Francisco, California 94111 Attention: General Counsel Facsimile: (415) 834-1506 Email: joseph.masters@urs.com with a copy to: Wachtell, Lipton, Rosen & Katz 51 W. 52nd Street New York, NY 10019 Attention: David E. Shapiro Facsimile: (212) 403-2000 Email: DEShapiro@wlrk.com + + + + + + if to JANA: JANA Partners LLC 767 Fifth Avenue, 8th Floor New York, New York 10153 Attention: General Counsel Facsimile: (212) 455-0901 Email: jennifer.fanjiang@janapartners.com with a copy to: Schulte Roth & Zabel 919 Third Avenue New York, NY 10022 Attention: Marc Weingarten Facsimile: (212) 593-5955 Email: marc.weingarten@srz.com + +11. Specific Performance; Remedies. + +(a) In furtherance and not in limitation of Section 11(b), the parties hereto shall be entitled to seek an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement, in addition to any other remedy to which they are entitled at law or in equity. FURTHERMORE, EACH OF THE PARTIES HERETO (A) IRREVOCABLY WAIVES THE RIGHT TO TRIAL BY JURY AND (B) AGREES TO WAIVE ANY BONDING REQUIREMENT UNDER ANY APPLICABLE LAW, IN THE CASE ANY OTHER PARTY SEEKS TO ENFORCE THE TERMS BY WAY OF EQUITABLE RELIEF. THIS AGREEMENT SHALL BE GOVERNED IN ALL RESPECTS, INCLUDING VALIDITY, INTERPRETATION AND EFFECT, BY THE LAWS OF THE STATE OF DELAWARE WITHOUT GIVING EFFECT TO THE CHOICE OF LAW PRINCIPLES OF SUCH STATE. + +(b) Notwithstanding any other Section in this Agreement and without limiting any other remedies the Company may have in law or equity, in the event that JANA (or any Affiliate or Associate of JANA) fails to perform or otherwise fulfill its obligations set forth in Section 7 in any material respect, and shall not have remedied such failure or non-fulfillment if capable of being remedied or fulfilled within three (3) business days following written notice from the Company of such failure or non-fulfillment, the Company shall not be required to perform or fulfill its obligations set forth in Sections 3, 4, 5 or 7 and the JANA Nominees shall each promptly tender their resignation as a member of the Board effective immediately upon its acceptance by the Company. As a condition to nomination and/or appointment to the Board pursuant to this Agreement, each JANA Nominee shall have executed an irrevocable letter agreement with the Company in which each such JANA Nominee shall agree to resign if required in accordance with the immediately preceding sentence. + +12. Severability. If at any time subsequent to the date hereof, any provision of this Agreement shall be held by any court of competent jurisdiction to be illegal, void or unenforceable, such provision shall be of no force and effect, but the illegality or unenforceability of such provision shall have no effect upon the legality or enforceability of any other provision of this Agreement. + +13. Termination. This Agreement shall terminate on the expiry of the Cooperation Period. + +14. Counterparts. This Agreement may be executed in two (2) or more counterparts which together shall constitute a single agreement. + +15. No Third Party Beneficiaries. This Agreement is solely for the benefit of the parties hereto and is not enforceable by any other persons. + + + + + + + + + +16. No Waiver. No failure or delay by either party in exercising any right or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial waiver thereof preclude any other or further exercise thereof or the exercise of any other right or remedy hereunder. + +17. Entire Understanding. This Agreement contains the entire understanding of the parties with respect to the subject matter hereof and may be amended only by an agreement in writing executed by the parties hereto. + +18. Interpretation and Construction. + +(a) The Company acknowledges that its Board is bound by the obligations of the Company hereunder. + +(b) Each of the parties hereto acknowledges that it has been represented by counsel of its choice throughout all negotiations that have preceded the execution of this Agreement, and that it has executed the same with the advice of said counsel. Each party and its counsel cooperated and participated in the drafting and preparation of this Agreement and the documents referred to herein, and any and all drafts relating thereto exchanged among the parties shall be deemed the work product of all of the parties and may not be construed against any party by reason of its drafting or preparation. Accordingly, any rule of law or any legal decision that would require interpretation of any ambiguities in this Agreement against any party that drafted or prepared it is of no application and is hereby expressly waived by each of the parties hereto, and any controversy over interpretations of this Agreement shall be decided without regard to events of drafting or preparation. + + + + + + + + + +IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the duly authorized signatories of the parties as of the date hereof. + + URS CORPORATION By: /s/ Martin M. Koffel Name: Martin M. Koffel Title: Chairman of the Board and Chief Executive Officer + +JANA PARTNERS LLC By: /s/ Barry Rosenstein Name: Barry Rosenstein Title: Managing Partner + + + + + + + + + + + +EXHIBIT A + +URS CORPORATION ADDS FOUR NEW INDEPENDENT DIRECTORS TO BOARD JANA Partners Agrees to Support All Nominees at 2014 Annual Meeting Board to Establish Value Creation Committee + + SAN FRANCISCO, CA - March [XX], 2014 - URS Corporation (NYSE: URS) today announced that it will add four new independent directors to its Board of Directors, effective March 27, 2014. These four directors will be on URS' slate of directors nominated for election to the Board of Directors at the Company's 2014 Annual Meeting, along with eight incumbents, pursuant to an agreement with JANA Partners LLC. The four new directors will be: Diane C. Creel, William H. Schumann, III, + +David N. Siegel and V. Paul Unruh. Biographical information on the new directors is provided below. + +Current directors [A] and [B] have advised the Company that they do not plan to stand for re-election at the 2014 + +Annual Meeting. Therefore, from March 27, 2014 until the Annual Meeting, the Board will increase to fourteen members from the + +current ten, but will be comprised of twelve directors following the 2014 Annual Meeting. + +Under the agreement with JANA, URS will also form a Value Creation Committee of the Board that will evaluate all + +options for enhancing shareholder value, including by engaging an investment bank to conduct a strategic review of the + +Company's business segments, operations and capital structure, and reviewing the Company's management compensation structure to enhance alignment with shareholder value creation. The Committee will be comprised of four members, two of whom + +will be new directors. + +Martin M. Koffel, Chairman and Chief Executive Officer of URS, stated: "[A] and [B] are superb directors and have contributed much to our success, but each has decided for his own reasons not to stand for re-election. I and their fellow board + +members look forward to continuing to work with them until the Annual Meeting but will take this opportunity to express our + +gratitude for their service, sound counsel and friendship." Koffel continued: "With [A]'s and [B]'s decisions to stand down and the expansion of our Board, we are adding four new, highly qualified independent directors to the Board on March 27 and we will nominate these directors for election at the + +2014 Annual Meeting. All are accomplished business leaders with experience + + + + + + relevant to the URS enterprise, and we are confident that they will prove to be valuable additions as we continue working to build + +value for our stockholders." As previously disclosed, the URS Board has been engaged in succession planning for the Company's Chief Executive Officer position and has appointed a CEO Succession Committee comprised of independent directors. Two of the new directors + +will promptly be appointed to this Committee. One of the new directors will also be appointed to the Compensation Committee. + +Said Koffel, "Having led URS for more than 25 years, I had previously communicated to the Board that it was important to have my successor in place in 2014, and our goal is to do just that. The Board has asked me to remain as Chairman and Chief + +Executive Officer until a successor is named, which I expect to do unless circumstances change." Barry Rosenstein, Managing Partner of JANA Partners, said, "We have appreciated our constructive dialogue with Martin Koffel and his team. We share their view that the Company is significantly undervalued, particularly given its strong cash + +flows and the valuable work Martin and his team have done over many years to ensure that URS is well-positioned to meet the + +needs of its clients. I am confident that the addition of four highly-qualified directors and the formation of the Value Creation + +Committee will help unlock this value for all shareholders." JANA Partners currently owns approximately 9.7 percent of the Company's common shares outstanding. URS' incumbent directors expected to be nominated for re­election at the 2014 Annual Meeting are: [C]; [D]; [E]; [F]; [G]; [H]; [I]; and [J]. + +The director nominations will be included in the Company's 2014 proxy statement and submitted for stockholder approval at the Company's 2014 Annual Meeting, [to be held on [date]]. The Company expects to file its proxy materials for the + +2014 Annual Meeting [in the near future] and encourages stockholders to review the proxy materials when they become available. + +The agreement between URS and JANA Partners will be filed on Form 8-K with the Securities and Exchange + +Commission. The agreement includes certain standstill restrictions that will be in effect until 30 days prior to the deadline by which + +a shareholder must give notice to the Company of its intention to nominate a director at or bring other business before the 2015 + +Annual Meeting. JANA Partners has committed to + + + + + + vote the shares that it controls in support of URS' twelve director nominees at the Company's 2014 Annual Meeting. Wachtell, Lipton, Rosen & Katz and Cooley LLP are serving as legal advisors to URS. + + + +Biographical Information on New Director Nominees + + + +Diane Creel, 65 + +Ms. Diane Creel retired as Chairman, Chief Executive Officer and President of Ecovation, Inc., a subsidiary of Ecolab + +Inc. and a waste stream technology company using patented technologies, in September 2008. Ms. Creel had held such positions + +since 2003. Previously, Ms. Creel served as Chief Executive Officer and President of Earth Tech, an international consulting + +engineering firm, which is now part of AECOM, from 1992 to 2003. Ms. Creel has served on the ATI Board of Directors since + +1996 and as Lead Independent Director since the position was established in September 2011. Ms. Creel is also a member of + +the Boards of Directors of The Timken Company (since 2012) and Enpro Industries, Inc. (since 2009). She also served on the + +Board of Directors of Goodrich Corporation from 1997 to 2012 and Foster Wheeler Ltd. until 2008. + + + +William H. Schumann, III, 63 + +Mr. William H. Schumann, III, has served as the non-executive Chairman of the Board of Directors of Avnet, Inc., a + +distributor of electronic components, since November 2012 and has been on the board since 2010. He retired in August 2012 as + +Executive Vice President of FMC Technologies, Inc., a provider of technology solutions for the energy industry. He served as + +Chief Financial Officer of FMC Technologies from 2001 to 2011 and Chief Financial Officer of FMC Corporation (the + +predecessor to FMC Technologies) from 1999 to 2001. Mr. Schumann served on the board of UAP Holdings, an agricultural + +chemical distributor, from 2005 to 2008 and Great Lakes Advisors, a registered investment advisor, from 1992 to 2011. Mr. + +Schumann has been a director of AMCOL International Corporation, a producer of specialty materials and related products and + +services for industrial and consumer markets, since 2012 and McDermott International, Inc., an engineering and construction + +company, since 2012. + + + + + + + + David N. Siegel, 52 + +David N. Siegel is President & CEO of Frontier Airlines and serves on its board of directors. He was a Director of + +Republic Airways, from October 2009 to December 2013, including serving as Lead Independent Director from May 2011 until + +January 2012 when he was appointed President & CEO of Frontier, at the time a wholly-owned subsidiary of Republic. Prior to + +joining Frontier, Mr. Siegel was Chairman & CEO of XOJET, a private aviation company, controlled by TPG Capital. From June + +2004 to May 2008, Mr. Siegel was Chairman and Chief Executive Officer, and from June 2008 to April 2009 Chairman, of + +gategroup Holding AG, the world's largest independent airline catering, hospitality and logistics company. Prior to that, Mr. Siegel + +served as President, Chief Executive Officer and member of the Board of US Airways Group, Inc., and US Airways, Inc., the + +airline operating unit. Prior to US Airways, Mr. Siegel was Chairman and Chief Executive Officer of Avis Rent A Car System, + +Inc., a subsidiary of Cendant Corp. Mr. Siegel also spent seven years at Continental Airlines in various senior management roles, + +including President of its Continental Express subsidiary. Mr. Siegel is currently a member of the board of directors of gategroup + +Holding AG, having served since June 2004. + + + +V. Paul Unruh, 65 + +Mr. V. Paul Unruh retired as vice chairman of Bechtel Group, Inc. in June 2003. During his 25-year tenure he held a + +number of management positions including treasurer, controller, and chief financial officer. He also served as president of Bechtel + +Enterprises, the finance, development, and ownership arm, from 1997 to 2001. Unruh is also a certified public accountant. Mr. + +Unruh is currently a member of the board of directors of Symantec Corporation, a provider of security, backup and availability + +solutions, Move, Inc., a provider of real estate media and technology solutions, and Heidrick & Struggles International, Inc., a + +provider of executive search and leadership consulting services. He also serves on the boards of two private companies. + +URS Corporation (NYSE: URS) is a leading provider of engineering, construction, and technical services for public + +agencies and private sector companies around the world. The Company offers a full range of program management; planning, + +design and engineering; + + + + + + systems engineering and technical assistance; construction and construction management; operations and maintenance; information + +technology; and decommissioning and closure services. URS provides services for federal, oil and gas, infrastructure, power, and + +industrial projects and programs. Headquartered in San Francisco, URS Corporation has more than 50,000 employees in a + +network of offices in nearly 50 countries (www.urs.com). + + + +[add FLS Tag] + + + +# # # \ No newline at end of file diff --git a/full_contract_txt/USASYNTHETICFUELCORP_10_21_2010-EX-10.10-STRATEGIC ALLIANCE AGREEMENT.txt b/full_contract_txt/USASYNTHETICFUELCORP_10_21_2010-EX-10.10-STRATEGIC ALLIANCE AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..50e48ecc206e945e8d39ed868cde2855d53527f8 --- /dev/null +++ b/full_contract_txt/USASYNTHETICFUELCORP_10_21_2010-EX-10.10-STRATEGIC ALLIANCE AGREEMENT.txt @@ -0,0 +1,115 @@ +Exhibit 10.11 Execution Copy STRATEGIC ALLIANCE AGREEMENT This STRATEGIC ALLIANCE AGREEMENT (this "Agreement") is made as of December 21, 2006 by and among OXBOW CARBON & MINERALS LLC, a Delaware limited liability company having a principal office address at 1601 Forum Place, Suite 1400, West Palm Beach, Florida 33401 ("Oxbow") and GLOBAL ENERGY, INC., an Ohio corporation having a principal office address at 312 Walnut Street, Suite 2650, Cincinnati, Ohio 45202 ("Global Energy"). Oxbow and Global each may be referred to from time to time herein as a "Party" and collectively as the "Parties". RECITALS WHEREAS, Oxbow is a world leader in petroleum coke trading, marketing, sales, and shipping; and WHEREAS, Global Energy is a world leader in petroleum coke gasification, having optimized operations of the leading petroleum coke gasification technology, EGAS™ technology, at its Wabash gasification facility in Indiana; and WHEREAS, Oxbow leases a marine terminal site in Texas City, Texas which it believes to be well-suited for installation of petroleum coke gasification technology, in that gasification would optimize Oxbow's flexibility in the sale and use of petroleum coke currently stored on the site, which could be converted into pipeline SNG or hydrogen, as well as being shipped onward to Oxbow's traditional petroleum coke customers; and WHEREAS, Global Energy is a leader in the development and permitting of gasification facilities, and currently is the only gasification facility owner/operator with permits to construct new gasification facilities (specifically, its Lima and Westfield Projects); and WHEREAS, the Parties believe that an alliance as described in this Agreement will prove mutually beneficial; NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows: AGREEMENT 1. Purchase of Shares. Global Energy shall issue and sell to Oxbow, and Oxbow shall purchase from Global Energy, on the Closing Date, Twenty-Five Thousand (25,000) common shares of Global Energy (the "Shares"), on the following terms and conditions, and subject to satisfaction of the conditions set forth in Section 6 hereof: (a) Purchase Price. The purchase price for the Shares shall be Five Million and No/100 Dollars ($5,000,000.00), or $200.00 per Share. 1 + + + + + + (b) Payment. Payment of the Purchase Price shall be made on the Closing Date by wire transfer of immediately available funds to Global Energy, as applicable, at the applicable account designated by Global Energy, as follows: Bank: PNC Bank, N.A. Cincinnati, OH ABA No.: 042000398 Account No.: 40-7690-5189 Account Name: Global Energy, Inc. (c) Closing. Unless this Agreement shall have been terminated and subject to the satisfaction or waiver of the conditions set forth in Section 6, the closing of the purchase of the Shares (the "Closing") shall take place at 11:00 a.m., on December 22, 2006 (such date of closing referred to herein as the "Closing Date") at the offices of Oxbow, 1601 Forum Place, Suite 1400, West Palm Beach, Florida 33401, unless another date, time or place is agreed to in writing by the parties hereto. At the Closing, Oxbow shall pay to Global Energy the Purchase Price and Global Energy shall deliver to Oxbow a stock certificate evidencing the issuance to Oxbow of the Shares. The Closing shall be deemed effective as of 12:01 a.m. U.S. Eastern Standard Time, on the Closing Date. 2. Strategic Alliance. The Parties hereby form a strategic alliance having the following key elements: (a) Preferred Suppliers. Oxbow and Global Energy hereby designate one another as their preferred suppliers of certain goods and services, as follows: (i) Oxbow shall be the preferred petroleum coke supplier to petroleum coke gasification projects owned or controlled by Global Energy. (ii) Oxbow shall be a preferred supplier of coal, coal fines, gob or waste coal products (collectively, "Coal") to gasification projects owned or controlled by Global Energy. (iii) Global Energy shall be the preferred gasification technology supplier to petroleum coke gasification projects majority owned or controlled by Oxbow. (iv) Global Energy shall be the preferred gasification project operator for petroleum coke gasification projects at sites majority owned or controlled by Oxbow. 2 + + + + + + (b) Further Cooperation. The Parties also agree to cooperate in good faith as follows in furtherance of their strategic alliance: (i) Oxbow will identify Oxbow petroleum coke related sites for collaboration with Global Energy. (ii) Global Energy will identify Global Energy petroleum coke related sites for collaboration with Oxbow. The obligations of the Parties pursuant to this Section 2 are subject to continued demonstrated performance and their mutual agreement on the schedule, pricing, financing, economics and other terms and conditions applicable to any such project. 3. Lima Project. In addition to the strategic alliance described in Section 2 of this Agreement, the parties specifically agree to the following with respect to Global Energy's proposed Lima, Ohio gasification project (the "Lima Project"): (a) Investment by Oxbow. Oxbow will make a investment (the "Lima Investment") in the company which owns the Lima Project (the "Lima Project Company") in the amount of [*], as consideration for obtaining the fuel supply management agreement for the Lima Project and the other revenues and benefits described in this Section 3. Oxbow's obligation to make this investment would be subject to: (i) Oxbow obtaining the consent of its existing lenders; and (ii) Global Energy securing one or more firm written commitments in form and substance reasonably acceptable to Oxbow for at least Two Hundred Seventeen Million and No/100 Dollars ($217,000,000.00) of equity funding for the Lima Project, or in the alternative, evidence demonstrating that Global has available cash of Two Hundred Seventeen Million and No/100 Dollars ($217,000,000.00) in its account. (iii) Global Energy providing evidence satisfactory to Oxbow in its reasonable discretion that it has secured the right to purchase the site for the Lima Project from the City of Lima, Ohio for a purchase price of One Million Five Hundred Thousand and No/100 Dollars ($1,500,000.00). (b) Revenues and Benefits to Oxbow. If Oxbow makes the Lima Investment: (i) Oxbow will receive four percent (4%) of the Lima Project's pre-tax project cash flow after debt service and operation and maintenance ("O&M") expenses. The Lima Project Company's obligation to make such payment would be subject to satisfaction of the same lender covenants which will apply to distributions to equity investors in the Lima Project; and 3 + + + + + + (ii) Oxbow will receive two percent (2%) of those non-O&M revenues of Global Energy's affiliate, Gasification Engineering Corporation, Inc. ("GEC") related to the Lima Project (e.g., any of the $200 million EPC reserves/construction contingency which is not spent). (iii) Oxbow will have a seat on the Board of Directors of GEC or any subsidiary or affiliate of GEC which is responsible for the engineering, procurement and construction ("EPC") contract for the Lima Project. (c) Fuel Management and Supply Agreement. In addition, if Oxbow makes the Lima Investment, Oxbow and Global Energy will enter into a fuel management and supply agreement (the "Fuel Management and Supply Agreement") for all fuel to be utilized by the Lima Project, which would include the following material provisions: (i) Oxbow will manage all fuel coke and Coal supply and logistics for the Lima Project. (ii) Oxbow will be paid a management fee of One Million and No/100 Dollars ($1,000,000.00) per year, such fee to be paid irrespective of actual Coal or petroleum coke use by the Lima Project. (iii) As fuel supply manager, Oxbow will receive a base commission of $0.12 per MMBTU consumed by the Lima Project, independent of fuel type (the "Base Commission"). As an incentive to obtain the lowest cost of fuel throughout the life of the Lima Project, the Lima Project Company would receive two-thirds (2/3) of any cost savings below $1.07 per MMBTU delivered to the project (such price, the "Price Basis"), escalated each year beginning in 2009 in accordance with increases in the Consumer Price Index, and Oxbow would receive one- third (1/3) of any such cost savings. Should the price of fuel delivered to the Lima Project be above the Price Basis, the commission will be reduced on a sliding scale according to the following formula: C= BC+(PB-PI)*0.1094 Where: C = commission BC = Base Commission PI = price invoiced per MMBTU PB = Price Basis per MMBTU However, the commission will never be less than $0.05 per MMBTU regardless of fuel price. For purposes of calculating this commission, the price of all fuel supply transactions would be based on the direct cost of supply and transportation expenses as invoiced. 4 + + + + + + (iv) Global Energy may provide up to ten percent (10%) of the annual fuel requirements of the Lima Project from renewable sources. Oxbow would receive the same commission on a per-BTU basis on any such fuel supplied by Global Energy. (d) Project Management. In the event Oxbow funds its investment in the Lima Project Company as set forth in Section 3(a), and either or both of the following occur: (i) Closing and funding of the Lima Project financing does not occur on or before December 15, 2007; or (ii) There is a delay of twelve months or more in meeting any project milestones as set forth in Schedule 3(d) ("Project Milestones"); then Oxbow shall have the right to take over the development and management of the Lima Project; provided, however, that the Lima Project fuel supply arrangements shall continue to be managed as set forth in the Fuel Management and Supply Agreement and Oxbow shall not be entitled to direct the disposition of ownership interests in the Lima Project Company, unless additional equity is required to finance the project. Further, if Oxbow elects to take over the development and management of the Lima Project and Oxbow subsequently determines that it does not desire to continue to participate in the Lima Project, it may withdraw from further participation, relinquish its economic interests in the Lima Project Company and GEC and terminate the Fuel Management and Supply Agreement, without further liability or obligation to Global Energy and/or the other Lima Project participants. 4. Representations and Warranties of Global Energy. Global Energy represents and warrants that the statements contained in this Section 4 are true and correct as of the date of this Agreement and will be true and correct as of the Closing Date. (a) Organization. Global Energy is a corporation duly formed, validly existing and in good standing under the laws of the State of Ohio, and has full corporate power and authority to own, or hold under lease, and operate its properties, and to conduct its business as such business is now being conducted. (b) Capitalization of Global Energy. The total authorized share capital of Global Energy as of the date of this Agreement is 10,000,000 common shares and 500,000 preferred shares. As of this date, 5,549,847 common shares and 105,086 preferred shares have been issued. The preferred shares are convertible into common shares at the conversion rate of 1.0 preferred shares to 1.71 common shares. As of the Closing Date, after giving effect to the Share purchase and the conversion of the preferred shares, 5,729,544 common shares of Global Energy will be issued and outstanding. (c) The Shares. (i) The Shares are duly authorized, validly issued and fully paid and non-assessable and were issued in accordance with all applicable securities laws or pursuant to exemptions therefrom. As of the Closing Date, after giving effect to the Share purchase and the conversion of Global Energy's preferred shares, the Shares will constitute a forty-four hundredths of one percent (0.44%) interest in the common shares of Global Energy. 5 + + + + + + (ii) As of Closing Date, Global Energy shall own, beneficially and of record, all of the Shares free and clear of all Liens. (iii) No Person has a right to acquire any of the Shares. None of the Shares are subject to any preemptive or subscription right, right of first refusal or offer, option, warrant, put or call right, consent right, restrictive covenant, or any other agreement with any Person other than Oxbow. (d) No Violation; Consents. (i) The execution and delivery of, and performance under, this Agreement by Global Energy and the consummation of the transactions contemplated hereby by Global Energy and GEC, will not: (A) violate any provision of Applicable Law or require any approval from or filing with any Governmental Authority; (B) violate the provisions of any Governmental Approval, or the organizational or governing documents of Global Energy or GEC, or any agreement or other restriction to which Global Energy or GEC is a party or by which the property of Global Energy or GEC is bound or subject; (C) result in a breach of or constitute (with due notice or lapse of time or both) a default under (or require notice or give rise to any right of termination, consent, cancellation, or acceleration under) any contract or agreement to which Global Energy or GEC is a party or by or to which the property of Global Energy or GEC is subject or bound; or (D) result in or give to any Person any right of termination, cancellation, acceleration or modification in or with respect to or result in any loss of benefit under or with respect to, or give any Person any additional rights or entitlement to increased, additional, accelerated or guaranteed payments under, or result in the creation or imposition of any Lien upon Global Energy, GEC or any of their assets, in each case under any contract or license to which Global Energy or GEC is a party or by which any of its respective assets is bound or any Applicable Law. (ii) The execution and delivery of, and performance under, this Agreement by Global Energy and the consummation of the transactions contemplated hereby will not require any Consent as to Global Energy. (e) Authority; Enforceabilitv. Global Energy has full legal capacity, power and authority to execute, deliver and perform this Agreement, and the other agreements and instruments to be executed and delivered by him pursuant hereto and to consummate the transactions 6 + + + + + + contemplated hereby and thereby. This Agreement has been duly and validly executed and delivered by Global Energy and, assuming due authorization, execution and delivery hereof by Oxbow, is a legal, valid and binding obligation of Global Energy, enforceable against it in accordance with its terms. (f) Disclosure. No representation or warranty of Global Energy made in this Agreement or any certificate, statement, schedule, list or other information furnished or to be furnished to Oxbow (or any Affiliate or representative thereof) pursuant to this Agreement or in connection with the transactions contemplated hereby ("Transaction Information") contains any untrue statement or omits to state a material fact necessary to make the statements herein, in light of the circumstances in which they are made (including any materiality or knowledge qualifiers), not misleading. (g) Qualification; Organization. Global Energy is qualified to conduct its business as such business is now being conducted and is in good standing in all jurisdictions listed on Schedule 4(g), which are all the jurisdictions in which the nature of its business makes such qualification necessary or advisable. True and complete copies of the Articles or Certificates of Incorporation and Bylaws of Global Energy and GEC (the "Governing Documents") have been furnished to Oxbow. Each such Governing Document is in full force and effect and has not been amended or modified. (h) Bankruptcy. Neither Global Energy nor GEC has filed any voluntary petition in bankruptcy or been adjudicated bankrupt or insolvent, or filed any petition or answer seeking any reorganization, liquidation, dissolution or similar relief under any federal or state bankruptcy, insolvency or other debtor relief or similar law, or sought or consented to or acquiesced in the appointment of any trustee, receiver, conservator or liquidator of all or any substantial part of its properties. No court of competent jurisdiction has entered an order, judgment or decree approving a petition filed against Global Energy or GEC seeking any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any federal or state bankruptcy act, or other debtor relief or similar law, and no other liquidator has been appointed for any of them, or of all or any substantial part of any of their properties. No proceeding has been commenced or, to Global Energy's knowledge, has been threatened, seeking to adjudicate Global Energy or GEC as bankrupt or seeking any reorganization, arrangement, composition, readjustment, liquidation, dissolution or other similar relief. (i) Shareholder List. Global Energy has provided to Oxbow prior to the execution of this Agreement a true and correct list of the shareholders of Global Energy and their respective shareholdings as of the date of such list. (j) Officers and Directors. The officers and directors of Global Energy and GEC are listed on Schedule 4(j) hereto. (k) Litigation and Claims. There are no Proceedings pending or threatened against Global Energy which question the validity of this Agreement or any of the transactions contemplated hereby, and Global Energy does not have knowledge of any substantive basis for any such Proceeding. Global Energy is not subject to any Decree and does not have any knowledge of any substantive basis for any Decree. 7 + + + + + + (1) Environmental Matters. Except as set forth on Schedule 4(1) hereto: (i) Each of Global Energy and GEC has complied in all respects with all Environmental Laws or has resolved any non-compliance to the satisfaction of the Governmental Authority having jurisdiction thereof and has provided Oxbow with evidence of such satisfaction. Each of Global Energy and GEC is in compliance with all Environmental Laws. (ii) Neither Global Energy nor GEC has any liability, known or unknown, contingent or absolute, under any Environmental Law, nor is either Global Energy or GEC responsible for any such liability of any other Person under any Environmental Law, whether by contract, by operation of law or otherwise. There are no pending or, to the knowledge of Global Energy threatened, Environmental Claims and there are no fact(s) which might reasonably form the basis for any Environmental Claim and Neither Global Energy nor any of its Affiliates, including GEC, has received any notice of any Environmental Claim or threatened Environmental Claim. (m) Permits, Approvals and Site for Lima Project. Global Energy and/or its Affiliates: (i) have obtained all licenses, permits or franchises required to be issued by or obtained from any Governmental Authority for the construction, commissioning and operation of the Lima Project; and (ii) have obtained a legally binding right to purchase the site for the Lima Project from the City of Lima, Ohio for a purchase price of One Million Five Hundred Thousand and No/100 Dollars ($1,500,000.00). The representations and warranties set forth in this Section 4 shall survive the Closing. 5. Representations and Warranties of Oxbow. Oxbow represents and warrants that the statements contained in this Section 5 are true and correct as of the date of this Agreement and will be true and correct as of the Closing Date. (a) Organization. Oxbow is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware, and has full power and authority to conduct its business as such business is now being conducted. Oxbow is properly registered to do business in all jurisdictions in which the nature of the business conducted by it makes such registration necessary in order to avoid any material disadvantage or liability to it. (b) Authority; Enforceability. Oxbow has full power and authority to execute, deliver and perform this Agreement, and the other agreements and instruments to be executed and delivered by it pursuant hereto, and to consummate the transactions contemplated hereby and thereby. This Agreement has been duly and validly authorized, executed and delivered by Oxbow and, assuming 8 + + + + + + due authorization, execution and delivery hereof by Global Energy, is a legal, valid and binding obligation of Oxbow, enforceable against Oxbow in accordance with its terms, except as enforcement thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the rights of creditors generally or by general principles of equity (regardless of whether such enforceability is considered in a proceeding at law or equity). No other or further authorization is required for Oxbow's performance hereunder other than those authorizations to be obtained by Oxbow on or prior to the consummation of the transactions contemplated by this Agreement. (c) No Violation: Consents. The execution and delivery of, and performance under, this Agreement by Oxbow and the consummation by Oxbow of the transactions contemplated hereby and thereby, will not: (a) violate any provision of Applicable Law; (b) violate the provisions of any Governmental Approval, or the organizational or governing documents of Oxbow, or any agreement or other restriction to which any Oxbow is a party or by or pursuant to which Oxbow or the property of Oxbow is bound or subject; or (c) result in a breach of or constitute (with due notice or lapse of time or both) a default under (or give rise to any right of termination, consent, cancellation, or acceleration under) any material contract or agreement to which Oxbow is a party or by or pursuant to which Oxbow's property is subject or bound. The execution and delivery of, and performance under, this Agreement by Oxbow will not require any Consent, other than (i) such Consents which, if not obtained or made, will not prevent Oxbow from performing its obligations hereunder, (ii) such Consents which become applicable to Oxbow solely as a result of the specific regulatory status of Global Energy or GEC, and (iii) the Consents set forth on Schedule 5(c). (d) Litigation and Claims. There are no Proceedings pending or threatened against Oxbow which question the validity of this Agreement or any of the transactions contemplated hereby, and Oxbow does not have knowledge of any substantive basis for any such Proceeding. Oxbow is not subject to any Decree and does not have any knowledge of any substantive basis for any Decree. (e) Investment Representations. Oxbow is acquiring the Shares for its own account for investment, and not with a view to resale or other distribution within the meaning of the Act, and Oxbow will not distribute the Shares or any part thereof in violation of the Act or any other applicable securities law. Oxbow understands that the Shares have not been, and prior to appropriate registration statements becoming effective will not be, registered under the Act, by reason of a specific exemption from the registration provisions of the Act which depends upon, among other things, the bona fide nature of the investment intent and the accuracy of Oxbow's representations as expressed herein. Oxbow acknowledges that it is able to fend for itself, can bear the economic risk of its investment and has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of the investment in the Shares. (f) Bankruptcy. There are no bankruptcy, reorganization, or arrangement proceedings pending against, being contemplated by or, to the knowledge of Oxbow, threatened against, Oxbow. The representations and warranties set forth in this Section 5 shall survive the Closing. 9 + + + + + + 6. Conditions to Closing of the Share Purchase. (a) Oxbow Conditions. The obligation of Oxbow to proceed with the Closing of the Share purchase contemplated under Section 1 is subject to the satisfaction of all of the conditions set forth in this Section 6(a): (i) Representations and Warranties. The representations and warranties made by Global Energy in this Agreement shall be true and correct in all material respects on and as of the Closing Date with the same force and effect as though all such representations and warranties were made on and as of that date (without giving effect to any materiality qualifications contained therein), and Global Energy shall have delivered to Oxbow a certificate, dated as of the Closing Date and signed by Global Energy, to such effect. (ii) Covenants and Agreements. All of the covenants and agreements in this Agreement to be complied with and performed by Global Energy on or before the Closing Date shall have been complied with and performed in all material respects, and Global Energy shall have delivered to the Oxbow a certificate, dated as of the Closing Date and signed by Global Energy, to such effect. (iii) Consents. Each Consent necessary in order to authorize the acquisition by Oxbow of the Shares and to execute and deliver this Agreement, including all those applicable Consents set forth on Schedule 5(c), shall have been obtained and delivered to Oxbow and shall be in full force and effect. (iv) No Injunction. No preliminary or permanent injunction or other order or Decree by any Governmental Authority which, prevents the consummation of the purchase of the Shares shall have been issued and remain in effect (and Global Energy and Oxbow agree to use commercially reasonable efforts to have any such injunction, order, or Decree lifted). (v) Constitutive Documents. Global Energy shall have delivered to Oxbow copies of the Governing Documents of Global Energy and GEC, including all amendments thereto, each certified as true, correct, complete and in effect as of the Closing by the secretary of each such company. (b) Global Energy Conditions. The obligations of Global Energy to proceed with the Closing of the Share purchase contemplated under Section 1 is subject to the satisfaction of all of the conditions set forth in this Section 6(b): (i) Representations and Warranties. The representations and warranties made by Oxbow in this Agreement shall be true and correct in all material respects on and as of the Closing Date with the same force and effect as though all such representations and warranties were made on and as of that date (without giving effect to any materiality or qualifications contained therein), and Oxbow shall have delivered to the Global Energy a certificate, dated as of the Closing Date and signed by an officer of Oxbow, to such effect. 10 + + + + + + (ii) Covenants and Agreements. All of the covenants and agreements in this Agreement to be complied with and performed by Oxbow on or before the Closing Date shall have been complied with and performed in all material respects, and Oxbow shall have delivered to the Global Energy a certificate, dated as of the Closing Date and signed by an executive officer of such Oxbow, to such effect. (iii) Consents. All Consents necessary in order to authorize the acquisition by Oxbow of the Shares and to execute and deliver this Agreement shall have been obtained and delivered to Global Energy and shall be in full force and effect. (iv) No Injunction. No preliminary or permanent injunction or other order or Decree by any Governmental Authority which prevents the consummation of the purchase of the Shares shall have been issued and remain in effect (and Global Energy and Oxbow agree to use commercially reasonable efforts to have any such injunction, order, or Decree lifted.) 7. Covenants of the Parties. (a) Access to Information. Global Energy and Oxbow shall, in good faith, and subject to the terms and conditions hereof, disclose to one another such information relative to the strategic alliance contemplated by this Agreement as may be necessary or appropriate to effectuate the purposes thereof. (b) Further Assurances. (i) Subject to the terms and conditions of this Agreement, each of the Parties hereto shall use commercially reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things reasonably necessary, proper or advisable to consummate and make effective the purchase and sale of the Shares pursuant to this Agreement and the other transactions contemplated herein. (ii) Each Party also further agrees that it will not take any action in breach of this Agreement or that will cause any representation or warranty contained herein to become untrue in any material respect, including any action which would result in any assignment or transfer of (or encumbrance not permitted hereunder upon) any of the Shares or which would restrict such Party's ability to consummate the transactions herein contemplated. (c) Confidential Information. Confidential Information shall not be used for any purpose other than to evaluate and consummate the transactions contemplated by this Agreement, and shall not be disclosed without prior written consent of the other Party, except to: (i) those employees with a need to know the Confidential Information for the purpose of performing work related to the transactions contemplated by this Agreement; provided, however that the Parties shall require all such employees receiving the Confidential Information abide by the terms of this confidentiality covenant. Each Party shall be responsible for any breach of this Agreement by its employees or Affiliates; or 11 + + + + + + (ii) those advisors, agents, contractors or lenders with a need to know the Confidential Information for the purpose of performing work related to the transactions contemplated by this Agreement; provided, however that the Parties shall require all such advisors, agents, contractors or lenders to agree to abide by the terms of this Agreement and to undertake the same obligations as the Parties have undertaken hereunder. Each Party shall be responsible for any breach of this Agreement by its advisors, agents, contractors or lenders. (iii) If a Party is requested or required by legal or regulatory authority to disclose any Confidential Information, such disclosing Party shall promptly notify the other Party of such request or requirement prior to disclosure so that the other Party may seek an appropriate protective order and/or waive compliance with the terms of this Agreement. If a protective order or other remedy is not obtained, or the other Party waives compliance with the provisions hereof, the disclosing Party agrees to furnish only that portion of the Confidential Information that it reasonably determines, in consultation with its counsel, is consistent with the scope of the subpoena or demand, and to exercise reasonable efforts to obtain assurance that confidential treatment will be accorded such Confidential Information. (iv) Each Party agrees that money damages would not be a sufficient remedy for any breach of this Section 7(c) and that the Parties shall be entitled to injunctive or other equitable relief to remedy or prevent any breach or threatened breach of this Section 7(c). Such remedy shall not be the exclusive remedy for any breach of this Section 7(c), but shall be in addition to all other rights and remedies available at law or in equity. (v) Any Confidential Information, including all copies of same (including that portion of the Confidential Information that consists of analyses, forecasts, studies or other documents prepared by a Party or its advisors, agents, contractors or lenders), shall be returned to the other Party, or at such Party's option destroyed, within five (5) days of (A) a request by a Party at anytime; or (B) the termination of this Agreement in accordance with the terms hereof. Upon the written request of a Party, the other Party shall certify the destruction of such material by written notice to the requesting Party. (vi) This covenant shall survive the termination or expiration of this Agreement and shall continue in full force and effect for a period of three (3) years thereafter. (d) Regulatory Approvals. (i) Each Party shall use all commercially reasonable efforts to obtain all authorizations, consents, orders, and approvals of, and to give all notices to and make all filings with, all Governmental Authorities (including those pertaining to the Governmental Approvals) and third parties that may be or become necessary for its execution and delivery of, and the performance of its obligations under, this Agreement and will cooperate fully with the other Party in promptly seeking to obtain all such authorizations, consents, orders, and approvals, giving such notices, and making such filings. 12 + + + + + + (ii) Each Party agrees to use its commercially reasonable efforts to assist the other Party in obtaining any consents of third parties and Governmental Authorities which may be necessary or advisable for such Party to obtain in connection with the transactions contemplated by this Agreement, including providing to such third parties and Governmental Authorities such financial statements and other financial information with respect to such Party and their Affiliates as such third parties or Governmental Authorities may reasonably request. (e) Exclusive Dealing. Each Party agrees that it will not circumvent or attempt to circumvent the other by contacting or participating with any third party with respect to, or otherwise attempting to consummate, the transactions contemplated by this Agreement, except in participation with each other. (f) Price Protection. If at any time on or prior to the earlier of (i) December 31, 2007, or (ii) the date on which Global Energy completes an initial public offering ("IPO") of its common stock, Global Energy sells additional common shares or other financial instruments convertible into its common shares, or enters into any similar transaction for the sale of an ownership interest in Global Energy which is the same or substantially the same as that sold to Oxbow under Section 1 of this Agreement, and the price of which is less than $200.00 per share, Global Energy shall issue additional common shares to Oxbow such that Oxbow's adjusted per-share price for its stockholdings shall be no greater than the lowest price paid by any such subsequent purchaser of its shares. It is understood that the price protection afforded by this covenant extends to and includes the offering price pursuant to the IPO. (g) Board of Directors. During the term of this Agreement, and so long as Oxbow continues to own at least 15,000 common shares of Global Energy (as such amount may be adjusted to reflect any subsequent stock splits), Global Energy agrees that Oxbow shall have a seat on Global Energy's Board of Directors. 8. Term; Termination and Remedies. (a) Term. This Agreement shall be for an initial term of five (5) years, and unless earlier terminated in accordance with this Agreement, shall automatically renew for an additional term of five (5) years thereafter. (b) Termination for Default or Bankruptcy. Either Party may terminate this Agreement by written notice to the other Party in the event of the following: (i) Default. Material nonperformance by the other Party of any provisions set forth in this Agreement which is not cured within thirty (30) days after receipt of notice thereof from the Party not in default; or 13 + + + + + + (ii) Bankruptcy. The filing by or against the other Party of a petition or application in any proceeding relating to such other Party as debtor under any bankruptcy or insolvency law of any jurisdiction; provided that in the event of an involuntary bankruptcy or insolvency proceeding, such other Party shall have a sixty (60) day period in which to obtain dismissal or withdrawal of such petition or application. (c) Remedies. In the event of termination of this Agreement, the Party not in default shall be entitled to obtain all appropriate relief available to it under this Agreement and at law or equity. (d) Survival. The expiration or earlier termination of this Agreement shall not terminate or otherwise affect Oxbow's ownership of the Shares or the validity of any other definitive agreements executed prior to such expiration or termination in connection with the Lima Project, the Texas City Project or any other business arrangement arising out of the strategic alliance contemplated by this Agreement. 9. Defined Terms. (a) As used in this Agreement, the following terms have the following meanings: "Act" means the Securities Act of 1933, as amended, and the rules and regulations thereunder. "Affiliate" of any Person means any other Person directly or indirectly controlling, controlled by or under common control with such Person. For purposes of this definition, "control" when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise, and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "Agreement" has the meaning specified in the preamble to this Agreement, and includes all exhibits and schedules hereto. "Applicable Law" means, with reference to any Person, all Laws applicable to such Person or its property or in respect of its operations. "Base Commission" has the meaning specified in Section 3(c). "BTU" means British Thermal Units. "Closing" has the meaning specified in Section 1(c). "Closing Date" has the meaning specified in Section 1(c). "Coal" has the meaning specified in Section 2(a). 14 + + + + + + "Confidential Information" means any information not in the public domain, in any form, whether acquired prior to or after the Closing Date, received by a Party from the other Party or any of its Affiliates or advisors, relating to the business and operations of such Party and its respective Affiliates, including, without limitation, information regarding vendors, suppliers, trade secrets, training programs, technical information, contracts, systems, procedures, know-how, trade names, improvements, price lists, financial or other data, business plans, computer programs, software systems, internal reports, personnel files or any other compilation of information, written or unwritten, which is or was used in the business of such Party or its Affiliates, except for information (i) that was or becomes generally available to the public, other than as a result of disclosure by a Party receiving such information; or (ii) that is received by a Party on a non-confidential basis from a third party that is not prohibited from disclosing such information by obligation to the disclosing Party. "Consent" means any authorization, approval, consent, waiver, license, filing, registration, ruling, permit or certification by or with any Person. "Consumer Price Index" shall mean the Consumer Price Index for all Urban Consumers (CPI-U), base years 1982-1984=100, for the Cleveland- Akron OH metropolitan area, as published by the United States Department of Labor, Bureau of Labor Statistics. "Decree" means any claim, consent decree, conciliation agreement, settlement agreement, outstanding judgment, rule, order, writ, injunction or other decree of a Governmental Authority. "Environmental Claim" means any and all administrative or judicial actions, suits, orders, claims, liens, notices, notices of violations, investigations, complaints, proceedings, or other written communication, whether criminal or civil, pursuant to or relating to any applicable Environmental Law by any Person, including any Governmental Authority, based upon, alleging, asserting, or claiming any actual or potential (i) violation of, or liability under any Environmental Law, (ii) violation of any Environmental Permit, or (iii) liability for investigatory costs, cleanup costs, removal costs, remedial costs, response costs, natural resource damages, property damage, personal injury, fines, or penalties arising out of, based on, resulting from, or related to the presence, Release, or threatened Release into the environment of any Hazardous Materials at, from, or related to any Real Property or any other property owned, leased, licensed, or operated by any of the Companies, including any off-site location to which Hazardous Materials, or materials containing Hazardous Materials, were sent for handling, storage, treatment or disposal. "Environmental Law" means all Applicable Laws relating to pollution or protection of the environment, natural resources and health and safety, including laws relating to Releases or threatened Releases of Hazardous Materials (including Releases to ambient air, surface water, groundwater, land, surface and subsurface strata) or otherwise relating to the generation, manufacture, processing, distribution, use, treatment, storage, Release, transport, disposal or handling of Hazardous Materials. "Environmental Laws" include the Comprehensive Environmental Response Conservation and Liability Act ("CERCLA") (42 U.S.C. §§ 960 et seq.), the Hazardous Materials Transportation Act (49 U.S.C. §§1801 et seq.), the Resource Conservation and Recovery Act (42 U-S.C. §§ 6901 et seq.), the Federal Water Pollution Control Act (also known as the Clean 15 + + + + + + Water Act) (33 U.S.C. §§ 1251 et seq.), the Clean Air Act (42 U.S.C. §§ 7401 et seq.), the Toxic Substances Control Act (15 U.S.C. §§ 2601 et seq.), the Oil Pollution Act (33 U.S.C. §§ 2701 et seq.), the Emergency Planning and Community Right-to-Know Act (42 U.S.C. §§ 11001 et seq.), the Occupational Safety and Health Act (29 U.S.C. §§ 651 et seq.) and their implementing regulations, state implementation plans, and analogous state or local laws or regulations, and all other applicable federal state or local laws that address the release or discharge of Hazardous Materials into the environment or the impact of Hazardous Materials on human health or the environment. "Fuel Management and Supply Agreement" has the meaning specified in Section 3(c). "GEC" has the meaning specified in Section 3(b). "Governing Documents" has the meaning specified in Section 4(g). "Governmental Approval" means any authorization, approval, consent, waiver, license, filing, registration, ruling, permit or certification by or with any Governmental Authority, including all environmental permits. "Governmental Authority" means any applicable federal, state, county, municipal or local governmental, judicial or regulatory authority, agency, arbitration board, body, commission, instrumentality or court. "Hazardous Material" means (i) any substance or material regulated under applicable Environmental Laws or any other product, substance, pollutant, chemical, material or waste whose presence, nature, quantity and/or intensity of existence, use, manufacture, disposal, transportation, spill, Release or effect, either by itself or in combination with other materials used by the Business, is either potentially injurious to the public health, safety or welfare, or the environment, or (ii) could reasonably be expected to provide a basis for liability of any of the Companies or to any Governmental Authority or other Person under any Applicable Environmental Law. Hazardous Material shall include, without limitation, infectious or toxic substances, pollutants, radioactive materials, toxic hydrocarbons, petroleum or petro chemical products, gasoline, oil, diesel fuel or polychlorinated biphenyls or any products, by-products or fractions thereof, and asbestos. "IPO" has the meaning specified in Section 6(f). "Laws" means all laws, statutes, rules, regulations, ordinances and other pronouncements having the effect of law in the United States or any other country, or any domestic or foreign state, county, city or other political subdivision or of any Governmental Authority. "Lima Investment" has the meaning specified in Section 3(a). "Lima Project" has the meaning specified in Section 3. "Lima Project Company" has the meaning specified in Section 3 (a). "MMBTU" mean one million British Thermal Units. 16 + + + + + + "Party" and "Parties" means either or both of Global Energy or Oxbow. "Person" means and includes (i) an individual, (ii) a legal entity, including a partnership, a joint venture, a corporation, a trust, a limited liability company, a limited duration company, or a limited liability partnership, (iii) companies or associations or bodies of persons, whether or not incorporated, and (iv) a Governmental Authority. "Price Basis" has the meaning specified in Section 3(c). "Proceedings" means judicial or administrative actions, labor disputes, suits, proceedings, arbitrations, citations, complaints, or investigations. "Project Milestones" has the meaning specified in Section 3(d). "Purchase Price" has the meaning specified in Section 1. "Release" means any spilling, leaking, pumping, pouring, discharging, injecting, dumping or disposing of any (i) Hazardous Material or (ii) other substance which is not a Hazardous Material, in each case not in compliance with all applicable Laws, whether intentional or unintentional. "Shares" has the meaning specified in Section 1. "Transaction Information" has the meaning specified in Section 4(f). (b) In this Agreement, unless otherwise indicated or otherwise required by the context: (i) Reference to and the definition of any document (including this Agreement) shall be deemed a reference to such document including the exhibits and schedules thereto and as such document may be amended, supplemented, revised, assigned or modified from time to time prior to the applicable Closing Date; provided, however, that this rule of interpretation shall not apply to references to documents in the Schedules; (ii) All references to an "Article", "Section", "Schedule" or "Exhibit" are to an Article or Section hereof or to a Schedule or an Exhibit attached hereto, unless otherwise noted; 1. The table of contents, article and Section headings, and other captions in this Agreement are for the purpose of reference only and do not limit or affect its meaning; 2. Defined terms in the singular include the plural and vice versa, and the masculine, feminine, or neuter gender include all genders; 3. Accounting terms used herein but not defined in this Agreement shall have the respective meanings given to them under GAAP; 17 + + + + + + 4. The words "hereof", "herein" and "hereunder" and words of similar import when used in this Agreement refer to this Agreement as a whole and not to any particular provision of this Agreement; 5. Any reference herein to a time of day means Eastern Standard Time or Eastern Daylight Time, as appropriate; 6. References to any Person or Persons shall be construed as a reference to any successors or permitted assigns of such Person or Persons; and 7. The words "including", "include" and "includes", when used in this Agreement shall mean, as required by the context, including, include, and includes "without limitation" and "without limitation by specification." 10. Miscellaneous. (a) Contracts. All contracts contemplated to be entered into by the Parties pursuant to this Agreement shall be negotiated in good faith and shall contain terms and conditions, and be performed for prices, which are commercially reasonable. (b) Publicity. No public statements or press releases shall be issued by either Party relating to the terms of this Agreement or the business affairs of the Parties hereunder without the prior consent of the other Parties, However, nothing herein shall prevent a Party from supplying such information or making such statements relating to this Agreement as such Party may consider necessary in order to satisfy its legal obligations (including, but not limited to, its obligations of disclosure under applicable securities laws). (c) Notices. All notices and other communications required or permitted hereunder shall be in writing and shall be deemed to have been duly given upon delivery, if delivered personally or by recognized overnight courier service; if sent by first-class mail, five (5) days after being mailed, return receipt requested and postage prepaid; or if sent by facsimile or e-mail, upon receipt. Such notices shall be sent to the following addresses, or at such other address as either Party shall hereafter specify in writing. If to Global: Global Energy, Inc. 312 Walnut Street, Suite 2650 Cincinnati, Ohio 45202 Facsimile No.: (513) 621-5947 Attention: H.H. Graves, President and CEO HHG@globalenergyinc.com 18 + + + + + + If to Oxbow: Oxbow Carbon & Minerals LLC 1601 Forum Place, Suite 1400 West Palm Beach, FL 33401 Facsimile No.: (561) 697-1876 Attention: John P. Stauffer, Vice President john.stauffer@oxbow.com (d) Consequential Damages. Neither Party shalI be liable to the other Party in connection with this Agreement or the subject matter hereof for any indirect, incidental, special or consequential damages, including but not limited to loss of revenue, cost of capital or loss of profit or business opportunity, whether such liability arises out of contract, tort (including negligence), strict liability or otherwise. (e) Successor and Assigns: No Partnership. This Agreement shall be binding upon and shall inure to the benefit of the Parties and their respective Affiliates, and to their respective successors and permitted assigns. Nothing contained in this Agreement shall be construed as creating a partnership among the Parties. (f) Exclusive Understanding. This Agreement and the exhibits hereto sets forth the sole and complete understanding between the Parties with respect to the subject matter hereof, and supersedes all other prior oral or written agreements, arrangements and understandings between the Parties with respect thereto. This Agreement shall not confer any legal rights or benefits on any third party (other than Affiliates of the Parties hereto, to the extent set forth herein). (g) Attorneys' Fees. In the event either Party files an action to enforce or otherwise arising out of this Agreement, the prevailing Party in such action shall be entitled to reasonable attorneys' fees and court costs in addition to such other relief to which it may be entitled. (h) Governing Law. This Agreement, and the rights and obligations of the Parties hereunder, shall be subject to, and construed in accordance with, the laws of the State of New York. (j) Counterparts. This Agreement may be executed in counterparts, each of which shall constitute an original for all purposes, but all of which shall constitute one and the same instrument. [BALANCE OF PAGE LEFT BLANK. SIGNATURES ON NEXT PAGE] 19 + + + + + + IN WITNESS WHEREOF, the Parties have entered into this Agreement as of the date first set forth above. OXBOW CARBON & MINERALS LLC By /s/ Brian L. Acton Brian L. Acton President GLOBAL ENERGY, INC. By /s/ H.H. Graves H.H. Graves President and Chief Executive Officer 20 \ No newline at end of file diff --git a/full_contract_txt/UnionDentalHoldingsInc_20050204_8-KA_EX-10_3345577_EX-10_Affiliate Agreement.txt b/full_contract_txt/UnionDentalHoldingsInc_20050204_8-KA_EX-10_3345577_EX-10_Affiliate Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..1fb6174de45f00967350112bbc8f0e0f62410be7 --- /dev/null +++ b/full_contract_txt/UnionDentalHoldingsInc_20050204_8-KA_EX-10_3345577_EX-10_Affiliate Agreement.txt @@ -0,0 +1,109 @@ +EXHIBIT 10.1 + + BUSINESS AFFILIATE AGREEMENT + +This Business Affiliate Agreement ("Agreement") dated January 28, 2005, effective as of October 15, 2004, ("Effective Date") is entered into by and between Dr. George D. Green (the "Business Affiliate") and UNION DENTAL CORP., a Florida corporation ("UDC") (collectively, Business Affiliate and UDC may be referred to collectively as the "Parties" and singularly as a ("Party"). + + RECITALS + + WHEREAS, the Business Affiliate wishes to help further UDC's mission of Managing dental offices, whereby Business Affiliate and UDC will exchange confidential information (as defined below): + + NOW THEREFORE, in consideration of the premises, covenants and agreements and the mutual promises herein made, and in consideration of the representations, warranties, and covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereto agree as follows: + + AGREEMENT + + 1. Definitions. A Confidential Information@ shall mean any and all information that a Party may reasonably expect to remain confidential and not shared with the general public at any time or that information that is protected by law. + + 2. Services. It is anticipated that the Business Affiliate will provide services both for clients of the Business Affiliate and UDC that involve the use and disclosure of Confidential Information (the "Services"). Except as otherwise specified herein, the Parties may make any and all uses of Confidential Information necessary to perform the Services. Additionally, the Parties may disclose Confidential Information for the purposes authorized by this Agreement only (a) to its employees, subcontractors and agents, in accordance with this Agreement, or (b) as directed by the other Party. The Parties expressly agree that any and all uses or disclosures of the Confidential Information by a Party will be done in accordance with the terms of this Agreement and the provisions of all applicable federal and state laws and regulations. + + 3. Responsibilities of the Parties. With regard to its use and/or disclosure of Confidential Information, each Party hereby agrees to do the following: + + a. Use and/or disclose the Confidential Information only as permitted or required by this Agreement or as otherwise required by law; + + 1 + + b. Report to the other Party, in writing, any use and/or disclosure of the Confidential Information that is not permitted or required by this Agreement of which a Party becomes aware within five (5) days of a Party=s discovery of such unauthorized use and/or disclosure; + + c. Use appropriate safeguards to maintain the security of the Confidential Information and to prevent unauthorized use and/or disclosure of such Confidential Information; + + d. Require all of its employees, representatives, subcontractors or agents that receive or use or have access to Confidential Information under this Agreement to agree in writing to adhere to the same restrictions and conditions on the use and/or disclosure of Confidential Information that apply herein, including the obligation to return or destroy the Confidential Information as provided under paragraph g of this Section 3. + + e. Make available, during normal business hours, at a Party=s offices all records, books, agreements, policies and procedures relating to the use and/or disclosure of Confidential Information that is subject to this Agreement, to the other Party within ten (10) days of a Party's written request, for the purpose of enabling a Party to verify the other Party=s compliance with the terms of this Agreement; + + f. Within fifteen (15) days of receiving a written request from a Party, provide to the other Party such information as is requested by a Party to permit the other Party to respond to a request by the subject individual for amendment and accounting purposes of the disclosures of the individual=s Confidential Information; + + g. Return to a Party or destroy, as requested by a Party, within fifteen (15) days of the termination of this Agreement, any Confidential Information provided to such Party and in its possession and retain no copies or back-up tapes; + + h. Parties agrees to mitigate, to the extent practicable, any harmful effect that is known to a Party of a use or disclosure of Confidential Information by a Party in violation of the requirements of this Agreement; + + i. To inform a Party of any changes in the form of notice of privacy practices that the other Party provides to individuals and provide the Party a copy of the notice currently in use; and + + j. To inform the Party of any changes in, or withdrawal of, the consent or authorization provided to a Party by individuals whose Confidential Information may be used and/or disclosed by a Party under this Agreement. + + 2 + +Source: UNION DENTAL HOLDINGS, INC., 8-K/A, 2/4/2005 + + + + + + 4. Mutual Representation and Warranty. Each Party represents and warrants to the other Party that all of its employees, agents, representatives and members of its work force, whose services may be used to fulfill obligations under this Agreement, are or shall be appropriately informed of the terms of this Agreement and are under legal obligation to comply fully with all provisions of this Agreement. + + 5. Term and Termination. + + a. Term. This Agreement shall become effective on the Effective Date and shall continue in effect until either Party informs the other Party with thirty (30) day prior written notice of termination of this Agreement. + + b. Termination. UDC may immediately terminate this Agreement without notice and any related agreement if it determines that the Business Affiliate has breached a material provision of this Agreement or if the activities contemplated under this Agreement will result in a violation of any federal or state law or if such Services would, in the opinion of UDC and its counsel. Alternatively, UDC may choose to: (i) provide the Business Affiliate with ten (10) days written notice of the existence of an alleged material breach; and (ii) afford the Business Affiliate an opportunity to cure said alleged material breach upon mutually agreeable terms. Failure to cure in the manner set forth in this paragraph is grounds for the immediate termination of the Agreement. + + c. Effect of Termination. Upon termination of this Agreement, for any reason, each Party hereto shall return to the other Party, or destroy, all of such Party's Confidential Information in the possession of the other Party. This provision shall apply to Confidential Information that is in the possession of subcontractors or agents of each Party. Each Party shall retain no copies of the Confidential Information of the other Party except as may be required by law. + + 6. Indemnification. The Parties hereby covenant and agree to indemnify and hold harmless each other, it's agents and representatives from and against any and all losses, costs, expenses, liabilities, claims, demands, judgments and its settlements of every nature that are actually incurred by a Party, including without limitation reasonable attorney's fees for pre-trial, trial, appellate, judgment, post-judgment, execution, and alternative dispute resolution, which arise out of any use or disclosure of Confidential Information not specifically permitted by this Agreement or arise out of the services rendered by Business Affiliate. The provisions of this Paragraph 6 shall survive the termination of this Agreement for whatever reasons whatsoever. + + 7. Miscellaneous. + + a. Survival. The respective rights and obligations of Business Affiliate and UDC under the provisions of Sections 3(g) [Responsibilities of the Parties] and 3(h) [Responsibilities of the Parties] and 6 shall survive the termination of this Agreement indefinitely. + + 3 + + b. Amendment. This Agreement may not be modified or amended, except in writing as agreed to by each Party. + + c. No Third Party Beneficiaries. Nothing express or implied in this Agreement is intended to confer, nor anything herein shall confer, upon any person other than the Parties hereto any rights, remedies, obligations, or liabilities whatsoever. + + d. Notices. All notices or communications required or permitted pursuant to the terms of this Agreement will be in writing and will be delivered in person or by means of certified or registered mail, postage prepaid, return receipt requested, to such Party at its last known address, or such other person or address as such Party may specify by similar notice to the other Party hereto or by telephone facsimile with a hard copy sent by mail on the next business day. All such notices will be deemed given upon delivery if delivered by hand, on the third business day after deposit with the U.S. Postal Service, and on the first business day after sending it by facsimile. + + e. Relationship of the Parties. It is expressly understood and agreed that (i) in the performance of Services under this Agreement, the Business Affiliate shall at all times act as an independent contractor with respect to UDC and not as an employee or agent of UDC and (ii) nothing contained in this Agreement shall be construed to create a joint venture, partnership, association or other affiliation, or like relationship, between the Parties, it being specifically agreed that the relationship is and shall remain that of independent Parties to a contractual relationship. Accordingly, UDC shall neither have nor exercise any specific control or direction over the particular methods by which Business Affiliate performs services required by this Agreement. In no event shall either Party be liable for the debts or obligations of the other, except as otherwise specifically provided in this Agreement. Neither Party shall have any claim under this Agreement or otherwise against the other Party for vacation pay, paid sick leave, retirement benefits, social security, worker=s compensation, health, disability, professional malpractice or unemployment insurance benefits, or other employee benefits of any kind. Based on the foregoing, (i) Business Affiliate will not be treated as an employee of UDC for Federal tax purposes; (ii) UNION DENTAL CORP., will not withhold on behalf of Business Affiliate any sums for income tax, unemployment insurance, social security or any other withholding pursuant to any law or requirement of any government body, or make available any of the benefits afforded to employees of UDC (iii) all of such payments, withholdings or benefits due any governmental agency, if any, are Business Affiliate=s sole responsibility; and (iv) Business Affiliate will indemnify and hold harmless UDC from any and all loss or liability arising from his failure to make such payments, withholds and benefits, if any. In the event the Internal Revenue Service or any other governmental agency should question or challenge the Business Affiliate=s independent contractor status, the Parties hereby agree that both Business Affiliate and UDC shall have the right to participate in any discussions or negotiations + +Source: UNION DENTAL HOLDINGS, INC., 8-K/A, 2/4/2005 + + + + + + 4 + + occurring with such agency or agencies, regardless of with whom or by whom such discussions or negotiations are initiated. + + f. Business Affiliate acknowledges that the Business Affiliate has read, understood and accepted the terms and conditions in UDC's Business Affiliate manual, the terms and conditions of which are hereby incorporated into this agreement by reference. + + IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be signed as of the date and year first above written. + + Business Affiliate + + -------------------------------- + + By: /s/ George D. Green -------------------------------- Name: George D. Green -------------------------------- + + Title: -------------------------------- + + UNION DENTAL CORP. + + By: /s/ George D. Green -------------------------------- Name: George D. Green -------------------------------- + + Title:CEO and President -------------------------------- + +udc-8ka_ex10baa1.doc + + 5 + +Source: UNION DENTAL HOLDINGS, INC., 8-K/A, 2/4/2005 \ No newline at end of file diff --git a/full_contract_txt/UpjohnInc_20200121_10-12G_EX-2.6_11948692_EX-2.6_Manufacturing Agreement_ Supply Agreement.txt b/full_contract_txt/UpjohnInc_20200121_10-12G_EX-2.6_11948692_EX-2.6_Manufacturing Agreement_ Supply Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..21c415b582daf3001359c428224200de7857ee4c --- /dev/null +++ b/full_contract_txt/UpjohnInc_20200121_10-12G_EX-2.6_11948692_EX-2.6_Manufacturing Agreement_ Supply Agreement.txt @@ -0,0 +1,889 @@ +Exhibit 2.6 + +FINAL VERSION + +FORM OF + +MANUFACTURING AND SUPPLY AGREEMENT + +BY AND BETWEEN + +PFIZER INC. + +AND + +UPJOHN INC. + +DATED AS OF [●] + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +TABLE OF CONTENTS Page 1.  DEFINITIONS 1 + +2.  SUPPLY OF PRODUCT 13 + +2.1   Agreement to Supply 13 2.2   Use of Facility, Equipment, Molds and Tooling 15 2.3   Capacity 15 2.4   Forecasts and Purchase Orders 16 2.5   Failure to Supply 19 2.6   Delivery; Risk of Loss 21 2.7   Procurement of Materials 22 2.8   Product Samples 23 2.9   Storage 23 2.10  Transitional Support 24 + +3.  PRICE; PAYMENT; PRICE ADJUSTMENTS; TAXES 26 + +3.1   Price 26 3.2   Price Adjustment 27 3.3   Cost Improvement 30 3.4   Price Review and Audit Procedure 31 3.5   Invoices and Payment 32 3.6   Taxes 33 3.7   No Duplicative Payments 35 + +4.  MANUFACTURING STANDARDS AND QUALITY ASSURANCE 35 + +4.1   Quality Agreement 35 4.2   Manufacturing Standards 35 4.3   Manufacturing Changes 35 4.4   Pest Control 36 4.5   Legal and Regulatory Filings and Requests 36 4.6   Quality Tests and Checks 37 4.7   Responsibility for Non-Complying Product 38 4.8   Rejection of Non-Complying Product 38 4.9   Disposal of Rejected and Non-Complying Product 40 4.10  Maintenance and Retention of Records 40 4.11  Government Inspections, Seizures and Recalls 40 4.12  Inspections 41 4.13  Segregation of Restricted Compounds 42 4.14  Packaging Material 43 + +5.  COVENANTS 43 + +5.1   Mutual Covenants 43 5.2   Manufacturer Covenants 44 5.3   Manufacturer's Social Responsibility 46 -ii- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +TABLE OF CONTENTS (continued) Page 5.4   Notice of Material Events 46 5.5   Disclaimer of Warranties 47 + +6.  ENVIRONMENTAL COVENANTS 47 + +6.1   Compliance with Environmental Laws 47 6.2   Permits, Licenses and Authorization 47 6.3   Generation of Hazardous Wastes 48 6.4   Environmental Sustainability Information 48 6.5   Environmental and Health and Safety Reviews 48 + +7.  TERM; TERMINATION 49 + +7.1   Term of Agreement 49 7.2   Term of Facility Addendum 50 7.3   Termination for Cause 50 7.4   Termination for Disposition of Facility 50 7.5   Termination in Event of Insolvency 51 7.6   Termination for Breach of Anti-Bribery Representation 51 7.7   Termination for Convenience by Customer 52 7.8   Effect of Termination or Expiration 52 7.9   Unused Materials 53 7.10  Return of Materials, Tools and Equipment 54 + +8.  INTELLECTUAL PROPERTY 55 + +8.1   Customer's Intellectual Property 55 8.2   Improvements and Developments 55 8.3   Ownership of Other Property 56 8.4   Limited Right to Use 56 + +9.  JOINT ADVISORY COMMITTEE 56 + +9.1   Formation and Role 56 9.2   Membership; Chairs 57 9.3   Meetings 57 9.4   Areas of Responsibility 58 9.5   Advisory Role; No Decision-Making Authority 58 + +10.  INDEMNIFICATION; LIMITATIONS OF LIABILITY 58 + +10.1  Indemnification of Customer 58 10.2  Indemnification of Manufacturer 59 10.3  Indemnification Procedures 60 10.4  Limitations on Liability 62 10.5  Indemnification Obligations Net of Insurance Proceeds and Other Amounts 63 10.6  Additional Matters 64 -iii- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +TABLE OF CONTENTS (continued) Page 11.  INSURANCE 65 + +11.1  Requirements to Maintain 65 11.2  Amounts and Limits 65 + +12.  CUSTOMER-SUPPLIED MATERIALS; BUY-SELL MATERIALS; TRANSITION 66 + +12.1  Supply; Rejection; Transition 66 12.2  Title and Risk of Loss 68 12.3  Reimbursement for Loss of Customer-Supplied Materials 68 + +13.  CONFIDENTIALITY 69 + +14.  SUPPLY CHAIN SECURITY 69 + +14.1  Supply Chain Representations 69 14.2  C-TPAT 69 + +15.  RECORDS AND AUDITS 70 + +15.1  Records 70 15.2  Audits 70 + +16.  NOTICES 71 + +17.  MISCELLANEOUS 71 + +17.1  Negotiations of Dispute 71 17.2  Publicity 72 17.3  Governing Law and Venue 72 17.4  Relationship of the Parties 73 17.5  Assignment; Binding Effect 73 17.6  Force Majeure 74 17.7  Severability 75 17.8  Non-Waiver; Remedies 75 17.9  Further Documents 75 17.10  Forms 75 17.11  Headings; Interpretation 76 17.12  Rules of Construction 77 17.13  Counterparts 77 17.14  Amendments 77 17.15  Entire Agreement 77 Attachment A Form of Facility Addendum Attachment B Quality Agreement Attachment C Monthly Inventory Report Attachment D Anti-Bribery and Anti-Corruption Principles Attachment E Policies Attachment F Example Product Materials Adjustment Calculation Attachment G Example Price Calculation of Volume Change Pricing Adjustment -iv- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +MANUFACTURING AND SUPPLY AGREEMENT + +THIS MANUFACTURING AND SUPPLY AGREEMENT (this "Agreement"), dated as of [●] (the "Effective Date"), is by and between Pfizer Inc., a Delaware corporation (hereinafter "Manufacturer"), and Upjohn Inc., a Delaware corporation (hereinafter "Customer"). Manufacturer and Customer may be referred to herein individually as a "Party" or collectively as the "Parties". + +W I T N E S S E T H: + +WHEREAS, Pfizer Inc. ("Pluto") and Upjohn Inc. ("Spinco") have entered into a Separation and Distribution Agreement, dated as of July 29, 2019 (as amended, modified or supplemented from time to time in accordance with its terms, the "Separation Agreement"), pursuant to which Pluto and Spinco have agreed to separate the Spinco Business from the Pluto Business so that, as of the Distribution Date, the Spinco Business shall be held by members of the Spinco Group and the Pluto Business is held by members of the Pluto Group (the "Separation"); + +WHEREAS, after the Separation, Spinco shall become a standalone publicly traded company, pursuant to the terms of the Separation Agreement and a Business Combination Agreement, dated as of July 29, 2019 (the "Business Combination Agreement"), by and among Pluto, Spinco, Mylan N.V., a public company with limited liability incorporated under the laws of the Netherlands, and certain of their Affiliates; and + +WHEREAS, in connection with the Separation, the Parties are entering into this Agreement, pursuant to which Customer desires to procure from Manufacturer, and Manufacturer desires to supply or cause one of its Affiliates to supply to Customer, Products for sale by Customer or its Affiliates in the Territory during the Term, upon the terms and subject to the conditions set forth herein. + +NOW, THEREFORE, in consideration of these premises and the covenants and agreements set forth herein, and intending to be legally bound thereby, the Parties hereby agree as follows: 1. Definitions. + +As used in this Agreement, the following capitalized terms shall have the meanings set forth below. Capitalized terms not otherwise defined in this Agreement shall have the meanings ascribed to such terms in the Separation Agreement. 1.1 "Accounting Method" means U.S. Generally Accepted Accounting Principles (GAAP) or, if otherwise agreed by the Parties, an alternative accounting method used in the ordinary course of business. 1.2 "Act" means the U.S. Federal Food, Drug, and Cosmetic Act, as amended. 1.3 "Action" means any demand, action, claim, dispute, suit, countersuit, arbitration, inquiry, subpoena, proceeding or investigation of any nature (whether criminal, civil, legislative, administrative, regulatory, prosecutorial or otherwise) by or before any federal, state, local, foreign or international Governmental Authority or any arbitration or mediation tribunal. + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +1.4 "Additional Quantities" shall have the meaning set forth in Section 2.4(c). 1.5 "Affected Products" shall have the meaning set forth in Section 10.4(a). 1.6 "Affiliate(s)" means, when used with respect to a specified Person, a Person that controls, is controlled by, or is under common control with such specified Person. As used herein, "control" (including, with correlative meanings, "controlled by" and "under common control with"), when used with respect to any specified Person shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities or other interests, by contract, agreement, obligation, indenture, instrument, lease, promise, arrangement, release, warranty, commitment, undertaking or otherwise. It is expressly agreed that, from and after the Effective Date, solely for purposes of this Agreement (a) each member of the Spinco Group shall be deemed to not be an Affiliate of any member of the Pluto Group and (b) each member of the Pluto Group shall be deemed to not be an Affiliate of any member of the Spinco Group. 1.7 "Agreement" shall have the meaning set forth in the Preamble. 1.8 "API" means active pharmaceutical ingredient. 1.9 "Batch Size" shall have the meaning set forth in Section 2.4(e)(ii). 1.10 "Binding Forecast Period" shall have the meaning set forth in Section 2.4(b). 1.11 "Bulk Drug Product" means Product that has been manufactured into a final pharmaceutical product following a specific formulation and set of specifications, including drug substance (e.g., tablets or granules) for administration to humans but has not been packaged for use or for commercialization. 1.12 "Business Combination Agreement" shall have the meaning set forth in the Recitals. 1.13 "Business Day" means (a) any day other than a Saturday, Sunday or a day on which banking institutions are authorized or obligated by Law to be closed in New York, New York or (b) with respect to those activities specific to a Facility, any day other than any day on which banks located in the city and country in which the Facility is located are authorized or obligated to be closed. 1.14 "Buy-Sell Materials" means the materials that Customer sells to Manufacturer for use in manufacturing Product for Customer under the terms of this Agreement and as set forth in the applicable Facility Addendum. For the avoidance of doubt, Buy-Sell Materials are distinguishable from and exclusive of both Product Materials and Customer-Supplied Materials. -2- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +1.15 "Conflict Minerals" shall have the meaning set forth in Section 5.3(c). 1.16 "Conversion Cost Markup" shall have the meaning set forth in Section 2.5(e). 1.17 "Conversion Costs" means, with respect to a given Product, (a) direct and indirect labor costs, (b) equipment costs, including depreciation, (c) laboratory and quality control costs at the applicable Facility, including Product testing and on-going stability studies, (d) quality assurance costs, (e) general site and manufacturing support costs for resources that support the manufacture of the applicable Product (including utilities, warehousing, consumables, maintenance, engineering, safety, human resources, finance, information technology, plant management and other similar activities, capital improvements in the form of depreciation, an allocation of costs for above site services provided to the applicable Facility for resources that support the manufacture of the applicable Product and an allowance for inventory loss, in each case, at the Facility-level), (f) costs paid to Third Party manufacturers for the manufacture and supply of such Product (or components thereof), (g) all costs associated with the performance of Manufacturer's obligations under Section 4.6, including all activities, tests and checks set forth therein, and (h) costs paid to Third Party contractors for services provided in connection with the manufacture and supply of such Product, in each case associated with such Product. 1.18 "CPP" shall have the meaning set forth in Section 4.5(a). 1.19 "C-TPAT" means the Customs-Trade Partnership Against Terrorism program of the U.S. Bureau of Customs and Border Protection. 1.20 "C-TPAT Benefits" means the expected benefit afforded to importers that have joined C-TPAT related to substantially fewer of their imports being inspected and, hence, fewer supply chain delays. 1.21 "Current Good Manufacturing Practices" or "cGMP" means all applicable standards and applicable Laws (as defined below) relating to manufacturing practices for products (including ingredients, testing, storage, handling, intermediates, bulk and finished products) promulgated by the FDA or any other applicable Governmental Authority (including, without limitation, EU or member state level) having jurisdiction, including, but not limited to, standards in the form of applicable Laws, guidelines, advisory opinions and compliance policy guides and current interpretations of the applicable authority or agency thereof (as applicable to pharmaceutical and biological products and ingredients), as the same may be updated, supplemented or amended from time to time. 1.22 "Customer" shall have the meaning set forth in the Preamble. 1.23 "Customer Indemnified Party" shall have the meaning set forth in Section 10.1(a). 1.24 "Customer-Owned Improvements and Developments" shall have the meaning set forth in Section 8.2(b). -3- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +1.25 "Customer Property" means all Intellectual Property, together with all materials, data, writings and other property in any form whatsoever, which is (a) owned or controlled by Customer or its Affiliates as of and following the Effective Date and (b) provided to Manufacturer by or on behalf of Customer or its Personnel under this Agreement. 1.26 "Customer-Supplied Materials" means the materials supplied by Customer to Manufacturer under the terms of this Agreement and as set forth in the applicable Facility Addendum. For the avoidance of doubt, Customer-Supplied Materials are distinguishable from and exclusive of both Product Materials and Buy-Sell Materials. 1.27 "Delivery" shall have the meaning set forth in Section 2.6(a). 1.28 "Developments" shall have the meaning set forth in Section 8.2(a). 1.29 "Effective Date" shall have the meaning set forth in the Preamble. 1.30 "Environmental Laws" means any Laws relating to (a) human or occupational health and safety; (b) pollution or protection of the environment (including ambient air, indoor air, water vapor, surface water, groundwater, wetlands, drinking water supply, land surface or subsurface strata, biota and other natural resources); or (c) exposure to, or use, generation, manufacture, processing, management, treatment, recycling, storage, disposal, emission, discharge, transport, distribution, labeling, presence, possession, handling, Release or threatened Release of, any hazardous or toxic material, substance or waste and any Laws relating to recordkeeping, notification, disclosure, registration and reporting requirements respecting hazardous or toxic materials, substances or wastes. 1.31 "Environmental Liability" means any Liability arising under Environmental Laws. 1.32 "Exclusive Purchase Requirement" means, on a Product SKU-by-Product SKU and country-by country basis within the applicable Territory, (a) in the first two (2) years of the Initial Term, one hundred percent (100%) of Customer's total requirements for such Product SKU and (b) in the third (3rd) year of the Initial Term, fifty percent (50%) of Customer's total requirements for such Product SKU; provided, however, that (x) such quantities of Product reasonably procured by Customer to qualify a back-up supplier for such Product shall be excluded from the Exclusive Purchase Requirement, and (y) for the avoidance of doubt, Customer may commercialize such quantities of Product procured under (x) above without violating the applicable Exclusive Purchase Requirement or related provisions in Section 2.1(e). 1.33 "Exclusive Purchase Requirement Suspension Period" shall have the meaning set forth in Section 2.5(b). -4- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +1.34 "Exclusivity Period" means the three (3) year period immediately following the Effective Date, as such period may be earlier terminated pursuant to this Agreement. 1.35 "Extension Period" shall have the meaning (a) with respect to this Agreement, as set forth in Section 7.1 and (b) with respect to a Facility Addendum, as set forth in Section 7.2. 1.36 "Facility" means, with respect to a given Product, Manufacturer's manufacturing facility located at the address set forth in the applicable Facility Addendum for such Product and such other facilities permitted pursuant to this Agreement and any applicable Facility Addendum to be used by Manufacturer in the manufacture, packaging or storage of (a) such Product or (b) materials utilized in the manufacture or storage of such Product hereunder. 1.37 "Facility Addendum" means a document executed by the Parties or their respective Affiliates for one or more Products to be manufactured in a Facility pursuant to this Agreement, which shall be substantially in the form of Attachment A to this Agreement. 1.38 "Facility Conversion Cost" means, with respect to a given Facility and Fiscal Year, the sum of all Product Conversion Costs for Products manufactured for Customer or the applicable Affiliate of Customer at such Facility during such Fiscal Year. 1.39 "Facility Conversion Cost Adjustment Fiscal Year" shall have the meaning set forth in Section 3.2(b)(i). 1.40 "Facility Conversion Cost Baseline Fiscal Year" shall have the meaning set forth in Section 3.2(b)(i). 1.41 "Facility Conversion Cost Threshold" shall have the meaning set forth in Section 3.2(b)(i). 1.42 "Facility Disposition" shall have the meaning set forth in Section 7.4. 1.43 "Facility Actual Product Materials Cost" means, with respect to a given Facility and Fiscal Year, the sum of all actual costs of Product Materials for Products manufactured for Customer or the applicable Affiliate of Customer at such Facility during such Fiscal Year. 1.44 "Facility Estimated Product Materials Cost" means, with respect to a given Facility and Fiscal Year, the sum of all estimated costs, as determined in good faith by Manufacturer and notified to Customer prior to the beginning of such Fiscal Year, of Product Materials for Products manufactured for Customer or the applicable Affiliate of Customer at such Facility during such Fiscal Year. 1.45 "Familial Relative(s)" means a parent, spouse, child or sibling (including any such relationships formed by marriage). -5- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +1.46 "FDA" means the U.S. Food and Drug Administration or any successor agency. 1.47 "Finished Product" means Product that has been packaged for commercialization and distribution to patients incorporating Bulk Drug Product. 1.48 "Firm Order" shall have the meaning set forth in Section 2.4(b). 1.49 "Fiscal Year" means each twelve-month fiscal period commencing on January 1 with respect to Facilities located in the United States and December 1 for all other facilities, in each case, during the Term. 1.50 "Force Majeure Event" shall have the meaning set forth in Section 17.6. 1.51 "Forecast" shall have the meaning set forth in Section 2.4(b). 1.52 "Forms" shall have the meaning set forth in Section 17.10. 1.53 "Global Trade Control Laws" means all applicable economic sanctions, export and import control laws, regulations and orders. 1.54 "Government" means all levels and subdivisions of U.S. and non-U.S. governments (i.e., local, regional or national and administrative, legislative or executive). 1.55 "Government Official" means (a) any elected or appointed governmental official (e.g., a member of a ministry of health), (b) any employee or person acting for or on behalf of a governmental official, agency or enterprise performing a governmental function, (c) any candidate for public office, political party officer, employee or person acting for or on behalf of a political party or candidate for public office or (d) any person otherwise categorized as a Government Official under local Law. As used in this definition, "government" is meant to include all levels and subdivisions of U.S. and non-U.S. governments (i.e., local, regional or national and administrative, legislative or executive). 1.56 "Governmental Authority" means any nation or government, any state, municipality or other political subdivision thereof, and any entity, body, agency, commission, department, board, bureau, court, tribunal or other instrumentality, whether federal, state, local, domestic, foreign or multinational, exercising executive, legislative, judicial, taxing, regulatory, administrative or other similar functions of, or pertaining to, government and any executive official thereof. 1.57 "Hazardous Materials" means (a) any petroleum or petroleum products, radioactive materials, toxic mold, radon, asbestos or asbestos- containing materials in any form, lead-based paint, urea formaldehyde foam insulation or polychlorinated biphenyls; and (b) any chemicals, materials, substances, compounds, mixtures, products or byproducts, biological agents, living or genetically modified materials, pollutants, contaminants or wastes that are now or hereafter become defined, regulated or characterized as or included in the definition of "hazardous substances," "hazardous wastes," "hazardous materials," "extremely hazardous wastes," "restricted hazardous wastes," "special waste," "toxic substances," "pollutants," "contaminants," "toxic," "dangerous," "corrosive," "flammable," "reactive," "radioactive," or words of similar import, under any Environmental Law. -6- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +1.58 "Improvements" shall have the meaning set forth in Section 8.2(a). 1.59 "Increments" shall have the meaning set forth in Section 2.4(e)(ii). 1.60 "Indemnifying Party" shall have the meaning set forth in Section 10.3(a). 1.61 "Indemnitee" shall have the meaning set forth in Section 10.3(a). 1.62 "Indemnity Payment" shall have the meaning set forth in Section 10.5(a). 1.63 "In-Flight or Shared Volume Product" means those Products identified as such in a Facility Addendum. 1.64 "Initial Price" shall have the meaning set forth in Section 3.1(a). 1.65 "Initial Price Term" means, with respect to a Product set forth in a Facility Addendum, the period of time beginning on the Effective Date and ending on the last day of the first full Fiscal Year of the Term of such Facility Addendum. 1.66 "Initial Term" shall have the meaning (a) with respect to this Agreement, set forth in Section 7.1 and (b) with respect to a Facility Addendum, set forth in Section 7.2. 1.67 "Insolvent Party" shall have the meaning set forth in Section 7.5. 1.68 "Insurance Proceeds" means those monies (a) received by an insured from an insurance carrier; (b) paid by an insurance carrier on behalf of the insured; or (c) received (including by way of setoff) from any Person in the nature of insurance, contribution or indemnification in respect of any Liability, in each of cases (a), (b) and (c), net of any applicable premium adjustments (including reserves or retentions and retrospectively rated premium adjustments) and net of any costs or expenses incurred in the collection thereof. 1.69 "Intellectual Property" means all intellectual property rights throughout the world, including: (a) patents and patent applications and all related provisionals, divisionals, continuations, continuations-in-part, reissues, reexaminations, extensions and substitutions of any of the foregoing; (b) trademarks, service marks, names, corporate names, trade names, domain names, social media names, tags or handles, logos, slogans, trade dress, design rights, and other similar designations of source or origin, together with the goodwill symbolized by any of the foregoing, whether or not registered or applied for registration, including common law trademark rights; (c) copyrights and copyrightable subject matter, whether or not registered or applied for registration; (d) technical, scientific, regulatory and other information, designs, ideas, inventions (whether patentable or unpatentable and whether or not reduced to practice), research and development, discoveries, results, -7- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +creations, improvements, know-how, techniques and data (including biological, chemical, pharmacological, toxicological, pharmaceutical, physical and analytical, safety, quality control, manufacturing and preclinical and clinical data), technology, algorithms, procedures, plans, processes, practices, methods, trade secrets, instructions, formulae, formulations, compositions, specifications, and marketing, pricing, distribution, cost and sales information, tools, materials, apparatus, creations, improvements, works of authorship in any media, confidential, proprietary or nonpublic information, and other similar materials, and all recordings, graphs, drawings, reports, analyses and other writings, and other tangible embodiments of the foregoing in any form whether or not listed herein, in each case, other than Software; (e) Software; and (f) applications, registrations and common law rights for the foregoing. 1.70 "JAC Chair" shall have the meaning set forth in Section 9.2(b). 1.71 "JAC Meeting" shall have the meaning set forth in Section 9.3(a). 1.72 "JAC Member" shall have the meaning set forth in Section 9.2(a). 1.73 "Joint Advisory Committee" or "JAC" shall have the meaning set forth in Section 9.1. 1.74 "Late Payment Date" shall have the meaning set forth in Section 3.5. 1.75 "Latent Defects" shall have the meaning set forth in Section 4.8(a). 1.76 "Laws" means any U.S. and non-U.S. federal, national, international, multinational, supranational, state, provincial, local or similar law (including common law and privacy and data protection laws), statute, ordinance, regulation, rule, code, order, treaty (including any tax treaty on income or capital), binding judicial or administrative interpretation or other requirement or rule of law or legal process, in each case, enacted, promulgated, issued, entered or otherwise put into effect by a Governmental Authority or any rule or requirement of any securities exchange. 1.77 "Losses" means any and all damages, losses, deficiencies, Liabilities, Taxes, obligations, penalties, judgments, settlements, claims, payments, fines, charges, interest, costs and expenses, whether or not resulting from Third-Party Claims, including the costs and expenses of any and all Actions and demands, assessments, judgments, settlements and compromises relating thereto and the reasonable costs and expenses of attorneys', accountants', consultants' and other professionals' fees and expenses incurred in the investigation or defense thereof or the enforcement of rights hereunder. 1.78 "Make to Order Products" means all Products that are identified as "Make to Order Products" in the applicable Facility Addendum. 1.79 "Manufacturer" shall have the meaning set forth in the Preamble. -8- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +1.80 "Manufacturer Indemnified Party" shall have the meaning set forth in Section 10.2(a). 1.81 "Manufacturer-Owned Improvements and Developments" shall have the meaning set forth in Section 8.2(c). 1.82 "Manufacturer Third Party Suppliers" shall have the meaning set forth in Section 2.7(a). 1.83 "Manufacturing Change" shall have the meaning set forth in Section 4.3(a). 1.84 "Minimum Order Quantity" shall have the meaning set forth in the applicable Facility Addendum with respect to each Product. 1.85 "Non-Complying Buy-Sell Materials" means any Buy-Sell Material that, as of or prior to its delivery by or on behalf of Customer or its Affiliate to Manufacturer or its Affiliate or designee pursuant to this Agreement, does not comply in all material respects with, or has not been used, handled or stored in all material respects in accordance with, the specifications for such Buy-Sell Material, all applicable Laws, cGMP, the Quality Agreement, this Agreement or the applicable Facility Addendum. 1.86 "Non-Complying Customer-Supplied Materials" means any Customer-Supplied Material that, as of or prior to its delivery by or on behalf of Customer or its Affiliate to Manufacturer or its Affiliate or designee pursuant to this Agreement, does not comply in all material respects with, or has not been used, handled or stored in all material respects in accordance with, the specifications for such Customer-Supplied Material, all applicable Laws, cGMP, the Quality Agreement, this Agreement or the applicable Facility Addendum. 1.87 "Non-Complying Product" shall have the meaning set forth in Section 4.7. 1.88 "Party" or "Parties" shall have the meaning set forth in the Preamble. 1.89 "Person" means an individual, a general or limited partnership, a corporation, a trust, a joint venture, an unincorporated organization, a limited liability entity, any other entity and any Governmental Authority. 1.90 "Personnel" means, with respect to a Party, such Party's Affiliates, contractors and agents together with such Party's and its Affiliates', contractors' and agents' respective individual employees, contractors and other agents. 1.91 "Pluto" shall have the meaning set forth in the Recitals. 1.92 "Price" means, with respect to a Product: (a) during the Initial Price Term, the Initial Price of such Product; and -9- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +(b) after the Initial Price Term, the adjusted price for such Product, as calculated on a Fiscal Year basis, in accordance with Section 3.2. 1.93 "Product" means a product specified in the applicable Facility Addendum which, for the avoidance of doubt, includes all applicable SKUs of such product, in each case, as the same may be amended from time to time by the mutual written agreement of the Parties. 1.94 "Product Conversion Cost" means, with respect to a given Product, the total units of such Product anticipated to be shipped or actually shipped, as applicable, during a given Fiscal Year (determined in a manner consistent with Manufacturer's customary practices) multiplied by the per-unit Conversion Cost for such Product for such Fiscal Year. 1.95 "Product Materials" means all raw materials (including, without limitation, active pharmaceutical ingredients and excipients), labeling or packaging materials and components needed for the manufacture and supply of a given Product. For the avoidance of doubt, Product Materials are distinguishable from and exclusive of both Buy-Sell Materials and Customer-Supplied Materials. 1.96 "Product SKU" means the specific Stock Keeping Unit (SKU) number for a given Product supplied for sale in a given country or region in the applicable Territory, in each case, as such SKU number may be updated from time to time. 1.97 "Purchase Order" means a written or electronic order form submitted by Customer in accordance with the terms of this Agreement to Manufacturer authorizing the manufacture and supply of a given Product. 1.98 "Quality Agreement" means those supplemental quality provisions set forth in any Quality Agreement between Manufacturer and Customer relating to a Facility, as the same may be amended or modified from time to time by mutual written agreement of the Parties. The form of Quality Agreement for each Facility is attached hereto as Attachment B. 1.99 "Recall" means a "recall", "correction" or "market withdrawal" and shall include any post-sale warning or mailing of information. 1.100 "Receiving Site" shall have the meaning set forth in Section 2.10(a). 1.101 "Record Retention Period" shall have the meaning set forth in Section 15.1. 1.102 "Records" means any books, documents, accounting procedures and practices and other data, regardless of type or form, of all matters relating to Manufacturer's performance of its obligations under this Agreement that enable Manufacturer to demonstrate compliance with such obligations, including, without limitation, Manufacturer's compliance with applicable Laws. -10- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +1.103 "Regulatory Approvals" means the permit, approval, consent, registration, license, authorization or certificate of a Governmental Authority necessary for the manufacturing, distribution, use, promotion and sale of a Product for one or more indications in a country or other regulatory jurisdiction, including approval of New Drug Applications and Biologics License Applications (each as defined by applicable Law) in the United States and Marketing Authorizations (as such term is defined by applicable Law) in the European Union. 1.104 "Release" means any release, spill, emission, leaking, dumping, pumping, injection, pouring, deposit, disposal, discharge, dispersal, leaching or migration into or through the indoor or outdoor environment (including ambient air, surface water, groundwater, land surface or subsurface strata, soil and sediments) or into, through or within any property, building, structure, fixture or equipment. 1.105 "Restricted Markets" means, as applicable and as may be updated from time to time, in each case, under Global Trade Control Laws, the Crimean Peninsula, Cuba, the Donbass Region, Iran, North Korea, and Syria. 1.106 "Restricted Party" means any: (a) individual or entity placed on lists maintained by an applicable Governmental Authority, including those established under the Act, the List of Excluded Individuals / Entities published by the U.S. Health and Human Services Office of Inspector General, the regulations administered by the U.S. Department of the Treasury Office of Foreign Assets Control, the U.S. Department of Commerce Bureau of Industry and Security, or similar lists of restricted parties maintained by the Governmental Authorities of the countries that have jurisdiction over the activities conducted under this Agreement; (b) individual or entity suspended or debarred from contracting with the U.S. government; or (c) any entity in the aggregate owned or controlled, directly or indirectly, fifty percent (50%) or greater by one or more such individuals or entities described in clause (a). 1.107 "Separation" shall have the meaning set forth in the Recitals. 1.108 "Separation Agreement" shall have the meaning set forth in the Recitals. 1.109 "Serialization" means the assigning of a unique identification code on a given Product unit or Product units of sale at the primary, secondary and/or tertiary level for the purpose assuring authenticity and/or tracking and tracing of the movement of a given Product through the entire supply chain. 1.110 "Service Taxes" shall have the meaning set forth in Section 3.6(b). 1.111 "Specifications" means the specifications for the manufacture, processing, packaging, labeling, testing and testing procedures, shipping, storage and supply of a given Product, including all formulae, know-how, raw materials requirements, analytical procedures and standards of quality control, quality assurance and sanitation, set forth with respect to such Product in the applicable Regulatory Approval(s) and provided by Customer to Manufacturer. -11- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +1.112 "Spinco" shall have the meaning set forth in the Recitals. 1.113 "Standard Cost" means, with respect to a given Product in a given Fiscal Year, an amount equal to: (a) the cost of Product Materials (including the cost of active ingredients, intermediates, semi-finished materials, excipients and primary and secondary packaging) associated with such Product ("Standard Product Materials Cost"); and (b) the Conversion Costs for such Product ("Standard Conversion Cost"), + +in each case of clauses (a) and (b), calculated in accordance with Manufacturer's accounting policies in effect as of the Effective Date and applied consistently across Manufacturer's entire manufacturing operations for the full applicable Facility. Depreciation will be based on original acquisition cost of fixed assets, and not impacted by fair value accounting for business transactions. 1.114 "Technical Support" shall have the meaning set forth in Section 2.10(a). 1.115 "Term" shall have the meaning (a) with respect to this Agreement, as set forth in Section 7.1 and (b) with respect to a Facility Addendum, as set forth in Section 7.2. 1.116 "Territory" means, with respect to a given Product, the countries set forth in the applicable Facility Addendum for such Product. 1.117 "Third Party" means a Person other than Manufacturer, Customer or their respective Affiliates. 1.118 "Third-Party Claim" shall have the meaning set forth in Section 10.3(a). 1.119 "Triggering Event" shall have the meaning set forth in Section 2.5(a). 1.120 "VAT" means (A) any Tax imposed in compliance with the council directive of 28 November 2006 on the common system of value added tax (EC Directive 2006/112); and (B) any other Tax of a similar nature, however denominated, to the Taxes referred to in clause (A) above, whether imposed in a member state of the European Union in substitution for, or levied in addition to, the Taxes referred to in clause (A) above, or imposed elsewhere (including goods and services Taxes, but excluding transfer Tax, stamp duty and other similar Taxes). 1.121 "VMR Products" means all Products that are identified as "VMR Products" in the applicable Facility Addendum. 1.122 "Waste" means all wastes that arise from the manufacture, handling or storage of Product hereunder, or which is otherwise produced through the implementation of this Agreement, including Hazardous Materials. -12- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +2. Supply of Product. 2.1 Agreement to Supply. (a) Affiliates and Facility Addenda. Either the entity designated above as Customer or any Affiliate of Customer and either the entity designated above as Manufacturer or any Affiliate of Manufacturer may enter into Facility Addenda under this Agreement. The entities that execute a Facility Addendum are also deemed to be "Customer" and "Manufacturer" (respectively) for all purposes of the Facility Addendum and this Agreement (with respect to the applicable Facility Addendum). (b) Supply Pursuant to Facility Addenda. During the Term of each Facility Addendum, Manufacturer shall manufacture and supply Product to Customer for the Territory applicable to such Product on the terms and subject to the conditions of this Agreement and the applicable Facility Addendum. The terms of this Agreement shall be incorporated by reference into each Facility Addendum that may be executed by the Parties or, as described in Section 2.1(a), their respective Affiliates. During the term of this Agreement, Customer may request that Manufacturer manufacture and supply to Customer clinical trial material, and the Parties shall negotiate in good faith the terms and conditions of such manufacturing and supply arrangement applying the terms and conditions of this Agreement to the extent mutually agreeable. (c) Hierarchy of Terms; Effect of Amendments. In the event of a conflict between the terms of any Facility Addendum and the terms of this Agreement, the terms of this Agreement shall govern and control, except to the extent that the applicable Facility Addendum expressly and specifically states an intent to supersede a specific section of this Agreement on a specific matter. Any amendment to the terms of this Agreement contained in a Facility Addendum shall be effective solely with respect to such Facility Addendum, and not with respect to this Agreement or any other Facility Addendum. Any amendment to the terms of this Agreement shall be effective with respect to all Facility Addenda. Except to the extent otherwise expressly stated in this Agreement, in the event of a conflict between the terms of this Agreement and the terms of the Separation Agreement, the terms of the Separation Agreement shall govern and control. (d) Use of Subcontractors. Subject to Section 2.2(a), Manufacturer shall manufacture and supply Product itself or through its Affiliates, in each case, at the applicable Facilities (and such other facilities as may be specified in the applicable Facility Addendum with respect to applicable Products). With respect to those Third-Party contractors, subcontractors or service providers used by Manufacturer or its Affiliates in the manufacturing or supply of a given Product immediately prior to the Effective Date, Manufacturer may engage such Third-Party contractors, subcontractors or -13- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +service providers to perform the same activities for such Product under this Agreement without first obtaining Customer's prior written consent. For the avoidance of doubt, the use of any Third-Party contractors, subcontractors or service providers other than in the manner expressly permitted pursuant to this Section 2.1(d) must be approved in advance in writing by Customer, such approval not to be unreasonably withheld, conditioned or delayed. Manufacturer shall be liable for all actions and omissions of its contractors, subcontractors and service providers, and any breach of the terms and conditions of this Agreement by such contractors, subcontractors or service providers shall be deemed a breach of the terms and conditions by Manufacturer under this Agreement. For the avoidance of doubt, as of the Effective Date, as between Manufacturer and Customer, Manufacturer will be solely responsible for maintaining and establishing relationships with the Third-Party contractors, subcontractors or service providers used in the manufacturing or supply of Product (other than the manufacturing or supply of Buy-Sell Materials or Customer-Supplied Materials). (e) Exclusivity. (i) Customer Exclusivity. During the Exclusivity Period, on a Product SKU-by-Product SKU and country-by-country basis within the applicable Territory, Customer shall purchase from Manufacturer, in accordance with the terms and conditions of this Agreement, at least the Exclusive Purchase Requirement of its requirements for such Product SKU in such country; provided, however, that In-Flight or Shared Volume Products shall be excluded from the exclusivity requirements set forth in this Section 2.1(e)(i). Following the Exclusivity Period (and during the Exclusivity Period, with respect to Product SKU quantities in excess of the Exclusive Purchase Requirement in accordance with the preceding sentence), nothing in this Agreement shall prevent Customer or any of its Affiliates from manufacturing Product for itself, or having Product manufactured by a Third Party, including in amounts in addition to the Purchase Orders for Product issued to Manufacturer in accordance with this Agreement. For clarity and notwithstanding anything contained herein, nothing in this Section 2.1(e)(i) (A) is intended to be inconsistent with Section 2.4(e)(i) or to otherwise indicate that Customer is subject to any requirement to purchase Product under this Agreement or (B) is intended to prevent Customer from qualifying a back-up supplier for any Product during the Exclusivity Period. -14- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +(ii) Upon request by Manufacturer, which Manufacturer may make from time to time during the Term but not more than once during any quarter of a Fiscal Year, Customer shall provide to Manufacturer within thirty (30) days of such request a certification attesting to Customer's compliance with its Exclusive Purchase Requirement obligations pursuant to Section 2.1(e)(i) and signed by a representative of Customer with a title of Vice President or more senior. 2.2 Use of Facility, Equipment, Molds and Tooling. (a) Facilities. For each Product, Manufacturer shall perform all manufacturing activities and all storage activities at the Facilities set forth in the Facility Addendum applicable to such Product. Manufacturer may use any other facility for the manufacture and storage of Products if (i) such facility has been approved for such manufacture by all applicable Governmental Authorities and (ii) Manufacturer obtains Customer's prior written consent with respect to the use of such other facility as set forth in Section 4.3(a) (such approval not to be unreasonably withheld, conditioned or delayed). The Parties shall agree to either execute a new Facility Addendum or amend an existing Facility Addendum in order to include such facility. Manufacturer shall notify Customer of its intent to use any alternate facility as soon as reasonably practicable. (b) Purchase and Installation of Equipment, Dedicated Change Parts and Tooling. Subject to this Section 2.2(b), Manufacturer shall be responsible for (i) purchasing, installing and validating at the Facilities all new equipment, dedicated change parts and tooling; (ii) modifications to existing equipment, dedicated change parts and tooling necessary for the manufacture, packaging, labeling and Delivery of Product hereunder; and (iii) maintenance of all such equipment, dedicated change parts and tooling, and all costs and expenses associated therewith; provided that in no event shall Manufacturer be required to purchase any new equipment, install any equipment purchased or requested by Customer or add (or, for clarity, allocate or dedicate) any additional manufacturing or storage capacity in connection with Customer's requests for additional capacity for manufacturing or for other activities to be carried out by Manufacturer hereunder not otherwise expressly provided for hereunder or in an applicable Facility Addendum. If Customer makes such a request for additional equipment or capacity, then the Parties shall promptly meet and discuss Customer's request in good faith, including an appropriate allocation of costs between the Parties with respect thereto. 2.3 Capacity. + +Subject to Section 2.2(b), Manufacturer shall devote adequate manufacturing capacity to be capable of manufacturing and supplying Product to Customer in accordance with the provisions of this Agreement and the Facility Addenda. Manufacturer shall promptly notify Customer if Manufacturer reasonably believes its existing capacity and demands thereon would prevent it from meeting Customer's anticipated Product requirements as set forth in any Forecast that conforms to the requirements set forth in Section 2.4. -15- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +2.4 Forecasts and Purchase Orders. (a) VMR Products Forecasting and Purchase Orders. With respect to the VMR Products, the processes and mechanisms by which Forecasts are prepared and Purchase Orders are issued shall be as set forth in the applicable Facility Addenda and the remainder of this Section 2.4 shall not apply with respect to such VMR Products as applicable. (b) Make to Order Product Forecasts. Except as otherwise set forth in a Facility Addendum, in each calendar month during the Term of a Facility Addendum, Customer shall provide to Manufacturer a rolling Product SKU-level forecast of its estimated requirements of Make to Order Products for the eighteen (18)-month period commencing with the month in which such forecast is provided (each, a "Forecast"). In the event Customer delivers a Forecast where the allocation of Product requirements over the time period of the Forecast are not consistent with historical trends, at Manufacturer's request, the Parties will meet to discuss the Forecast in good faith in the context of previous allocations of Product requirements. Such Forecasts represent Customer's reasonable estimates of the quantity of Products it will require during the applicable period covered by each such Forecast. Except as otherwise set forth in a Facility Addendum, each Forecast shall be a non-binding forecast and for informational purposes only, except that: (i) the portion of such Forecast covering the first three (3) calendar months reflected therein (the "Binding Forecast Period") shall be binding and shall constitute a firm order for the quantity of each Product specified therein (each, a "Firm Order"), (ii) each of months four (4) through six (6) of a given Forecast may not differ by more than twenty-five percent (25%) (whether positive or negative) from the quantity of such Product set forth in those months in the previous Forecast, and (iii) each of months seven (7) through twelve (12) of a given Forecast may not differ by more than fifty percent (50%) (whether positive or negative) from the quantity of such Product set forth in those months in the previous Forecast. For the avoidance of doubt, (1) this subsection (b) applies to Forecasts for API and Bulk Drug Product and (2) the Forecast with respect to Finished Product shall apply to the roll-up level of the Bulk Drug Product that is incorporated into the Finished Product. (c) Make to Order Purchase Orders. Manufacturer shall provide Product to Customer pursuant to Purchase Orders issued by Customer to Manufacturer, which Purchase Orders will be issued on a Product SKU-by-Product SKU basis, not to exceed one (1) Purchase Order per Product SKU per calendar month unless otherwise agreed between the Parties in advance in writing. No verbal communications or e-mail shall be construed to mean a commitment to purchase Product. Customer shall be required to order -16- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +pursuant to a Purchase Order at least the amount of Product set forth in the Firm Order for such Product in the applicable calendar month. Manufacturer shall provide to Customer such quantities of Product as may be ordered by Customer pursuant to such Purchase Orders, up to one hundred ten percent (110%) of the quantity set forth in the most recent Forecast for the applicable period. In the event that Customer orders quantities of Product above one hundred ten percent (110%) of the quantity set forth in the most recent Forecast for the applicable period (such quantities above one hundred ten percent (110%) referred to as "Additional Quantities"), Manufacturer shall use its commercially reasonable efforts, but shall not be obligated, to supply such Additional Quantities. For purposes of this paragraph, the most recent Forecast for any given month shall mean the Forecast submitted by Customer in the month prior to the month in which the applicable Purchase Order is issued. All Purchase Orders shall specify the quantity and description of Products ordered, the applicable Facility where such Products will be Delivered, the required delivery date (subject to the provisions of Section 2.4(d)), and the manner of Delivery (including the carrier to be used). (d) Delivery Date. Unless expressly set forth to the contrary in a Facility Addendum, Customer will issue Purchase Orders for Product no later than a period equal to the Binding Forecast Period prior to the required delivery date. By way of example only, if the Binding Forecast Period is the first three (3) months of a Forecast with respect to a Product, then Customer will issue Purchase Order for such Product no later than three (3) months prior to the required delivery date. (e) No Minimum Purchase Obligation; Minimum Order Quantities. (i) No Obligation. Without limiting Customer's obligations under Section 2.1(e), 2.4(b), 2.4(c), 2.4(d) or 2.4(e)(ii), Manufacturer hereby acknowledges and agrees that Customer is not otherwise obligated to purchase any minimum or specific quantity, volume or dollar amount of Product under any Facility Addendum unless expressly set forth in the applicable Facility Addendum. (ii) Minimum Order Quantities. Notwithstanding Section 2.4(e)(i), Customer acknowledges and agrees that (A) each Purchase Order Customer places hereunder for Product that is either API or Bulk Drug Product shall be equal to, or a whole multiple of, the Batch Size for such applicable Product as set forth in the applicable Facility Addendum and (B) each Purchase Order that Customer places hereunder for Product that is Finished Product shall be equal to or greater than the Minimum Order Quantity for such applicable Product as set forth in the applicable Facility Addendum; provided that, where Customer places Purchase Orders under (B) above that exceed the applicable Minimum Order Quantity, Customer shall -17- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +place such Purchase Orders for such excess quantities in Increments above the Minimum Order Quantity as specified in the applicable Facility Addendum. As used herein, "Batch Size" means the production quantity for a given run of a Product SKU and "Increments" means the quantity step change above the applicable Minimum Order Quantity, in each case, as specified in the applicable Facility Addendum. (f) Acceptance and Rejection of Orders. Within ten (10) Business Days of receipt of a Purchase Order, Manufacturer may reject such Purchase Order by written notice to Customer only on the basis that it is inconsistent with the terms of this Agreement, including a Purchase Order containing (i) a delivery schedule that is inconsistent with Section 2.4(d), (ii) a Product quantity that is inconsistent with Section 2.4(e)(ii), (iii) a Product quantity that is less than the Firm Order for the applicable period or (iv) subject to Section 2.4(c), a Product quantity that is more than one hundred ten percent (110%) of the Forecast for the applicable period. Manufacturer shall be deemed to have accepted Customer's Purchase Order for Products in the event it either (a) indicates its acceptance of Customer's Purchase Order in writing or (b) does not indicate its rejection of a Purchase Order within ten (10) Business Days of receipt pursuant to this Section 2.4(f). (g) Changes to Purchase Orders. Purchase Orders, once submitted to Manufacturer, may be amended only by mutual written agreement of the Parties; provided that Manufacturer shall exercise its commercially reasonable efforts to comply with proposed amendments to Purchase Orders that Customer may request after sending a Purchase Order to Manufacturer. (h) Cancellations. In the event that Customer cancels all or part of a Purchase Order (provided that a cancellation shall be deemed to have occurred to the extent that Customer fails to issue a Purchase Order with respect to the full amount of Product contemplated by any portion of a Forecast with respect to the Binding Forecast Period) and such cancellation is not due to Manufacturer's breach of this Agreement or any Facility Addendum, Manufacturer will use good faith efforts to reallocate capacity and mitigate any resultant costs of such cancellation and, unless otherwise set forth with respect to the relevant cancelled Product under the applicable Facility Addendum, Customer will be charged for one hundred percent (100%) of any and all non-cancellable Third-Party costs actually and reasonably incurred by Manufacturer in accordance with this Agreement prior to cancellation for materials or services related to the cancelled portion of the Purchase Order for which reasonably acceptable documentation is submitted by Manufacturer to Customer. -18- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +(i) Conflicts. In the event of any conflict between the provisions of this Agreement and any Customer Purchase Order, Manufacturer's acceptance form or Manufacturer's invoice form or any similar such forms, the provisions of this Agreement shall govern and control. (j) Product Inventory as of Effective Date. Promptly following the Effective Date, Manufacturer shall provide Customer with a Product inventory report organized by Facility, lot number, remaining shelf life, and such other data points with respect to such Product inventory as Customer may request. For the avoidance of doubt, (i) Manufacturer shall be entitled to fill Purchase Orders with such inventory that complies with the terms and conditions of this Agreement, including Section 5.2, and (ii) the Parties shall meet to discuss in good faith the disposition of all such Product inventory that does not meet the criteria set forth in (i) above. 2.5 Failure to Supply. (a) Capacity Allocation. In the event that Manufacturer fails to manufacture and deliver Product in accordance with accepted Purchase Orders or applicable Specifications, Manufacturer shall notify Customer promptly, including details of the reasons for the failure and Manufacturer's estimated timeline of when the failure will be corrected. Manufacturer shall be solely responsible for undertaking commercially reasonable measures to minimize any shortage of Product delivered to Customer as a result of such manufacturing issues. If Manufacturer fails to manufacture and deliver Product in accordance with accepted Purchase Orders or applicable Specifications by the delivery date specified in the applicable Purchase Order(s) in accordance with Section 2.4(d), other than due to a Force Majeure Event, (i) for a period of two (2) or more months past such delivery date four (4) or more times in any rolling twelve (12) month period, or (ii) for a period of four (4) or more months past such delivery date on one occasion (each of (i) and (ii), a "Triggering Event"), then Manufacturer shall use its best efforts to allocate on a quarterly basis its manufacturing capacity and Product Materials to the manufacture and supply of Products for Customer on a ratable basis based on the use of each during the twelve (12)-month period immediately preceding such Triggering Event (or either (1) the Term of the applicable Facility Addendum, if the Term is less than twelve (12) months, or (2) such other period set forth in the applicable Facility Addendum); provided that (A) if Customer's Minimum Order Quantity for the applicable Product(s) exceeds its ratable allocation of manufacturing capacity or Product Materials (as applicable) for the applicable quarter, Customer shall continue to accrue its allocation of capacity until such quarter when Customer's allocation of capacity is equal to or greater than its accrued allocation of capacity and (B) this Section 2.5(a) shall not apply to the extent that Customer fails to timely provide adequate Customer-Supplied Materials or Buy-Sell Materials to Manufacturer in accordance with Section 12. For the avoidance of doubt, Manufacturer shall notify Customer promptly in writing of any anticipated Triggering Event when Manufacturer has reason to believe that such Triggering Event is likely to occur and provide such information with respect to such anticipated Triggering Event as Customer may reasonably request. -19- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +(b) Suspension of the Exclusive Purchase Requirement. In the event of a Triggering Event, Customer's Exclusive Purchase Requirement with respect to each and every Product that is the subject of the Triggering Event shall be temporarily suspended until such time as Manufacturer notifies Customer that Manufacturer is able to resume the manufacture and supply of the subject Product(s) on the terms and conditions of this Agreement (such period referred to as the "Exclusive Purchase Requirement Suspension Period"); provided that, (i) during such Exclusive Purchase Requirement Suspension Period, Customer shall use commercially reasonable efforts to limit its orders for the subject Product(s) to the quantities specified in the last Forecast that preceded the Triggering Event for the applicable period(s) and promptly notify Manufacturer in the event and to the extent that Customer's orders exceed such quantities specified in such Forecast and (ii) Customer shall be entitled to take delivery of Product(s) ordered during the Exclusive Purchase Requirement Suspension Period even if such delivery is scheduled for or actually occurs subsequent to the Exclusive Purchase Requirement Suspension Period. (c) Modification of the Exclusive Purchase Requirement. Upon the expiration of the Exclusive Purchase Requirement Suspension Period, Customer shall use commercially reasonable efforts to resume ordering from Manufacturer, on a Product-by-Product basis, the subject Product(s) in accordance with Customer's Exclusive Purchase Requirement during the Exclusivity Period. (d) Business Continuity. Manufacturer shall maintain a written business continuity plan to be able to assure supply of Product to Customer in the event of a disruption to supply from the primary location or Facility of manufacture, including any disruption resulting from a Force Majeure Event and make such plan available from time to time upon Customer's request. (e) Remedies. Customer shall have the right to terminate this Agreement on an affected Product-by-affected Product basis immediately upon written notice to Manufacturer in the event a Triggering Event (under clause (ii) thereof) continues for more than one hundred and eighty (180) days. Customer shall also have the right to cancel orders for any quantities of Product affected by any Triggering Event effective upon notice to Manufacturer, and Customer shall have no further obligations to purchase any such cancelled quantities of Product. In the event a Triggering Event occurs during the Exclusivity Period, Manufacturer shall, at Manufacturer's cost and expense, provide such assistance as is reasonably requested by Customer to assist any alternate manufacturer in meeting Customer's requirements for the Product until Manufacturer has remedied the cause of such Triggering Event and is -20- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +able to supply Product to Customer in its requested quantities. Such assistance shall include providing, subject in all cases to Section 2.10(h), Technical Support in respect of the affected Product(s). In the event of a Triggering Event, Manufacturer shall be liable for any actual amounts that Customer is contractually required to pay to any Third-Party customer of Customer that result from Customer's inability to supply the affected Product to such Third-Party customer as a direct result of such Triggering Event; provided that (1) Customer shall provide to Manufacturer appropriate evidence of such amounts (including invoices from the applicable customers) and the applicable contractual requirements (redacted, in each case, of information pertaining to pricing and other commercial terms that are not directly related to the claimed amounts), it being understood and agreed that, upon request, Manufacturer will enter into customary confidentiality arrangements prior to such information being shared and (2) Manufacturer shall not be liable for any such amounts in the aggregate in any Fiscal Year in excess of the aggregate Conversion Cost Markup during such Fiscal Year with respect to all Products manufactured at the Facility that is the subject of the applicable Triggering Event. "Conversion Cost Markup" means, for a Product for any Fiscal Year, ten percent (10%) of the product of (A) Manufacturer's Standard Conversion Cost for such Product for such Fiscal Year and (B) the quantity of such Product ordered by Customer for delivery during such Fiscal Year. The rights of Customer set forth in this paragraph are in addition to any other rights set forth in this Agreement. 2.6 Delivery; Risk of Loss. (a) Delivery. Unless otherwise set forth in the applicable Facility Addendum, Manufacturer shall deliver Product to Customer FCA (Incoterms 2010) at the applicable Facility, and all Purchase Orders will be deemed to have been completed when the quantity of Product made available to Customer at the applicable Facility is between ninety percent (90%) and one hundred and ten percent (110%) of the quantity of Product set forth in any accepted Purchase Order (each such event, a "Delivery"). Delivery shall occur by or within the delivery date(s) set forth in the applicable Purchase Order or such other date as may be agreed to in writing by the Parties from time to time. Without limiting Customer's rights and remedies under Section 4.8, Manufacturer acknowledges and agrees that, unless such early Delivery was agreed upon by the Parties in writing, Manufacturer shall provide Customer with such data as Customer may reasonably request from time to time for measures of key performance indicators (KPI). (b) Certificates of Compliance. Manufacturer shall include certificates of compliance and certificates of analysis with all Delivery of Product or prior to Delivery upon reasonable request of Customer. -21- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +(c) Title. Unless otherwise set forth in the applicable Facility Addendum, title to Product and risk of loss or damage shall pass to Customer upon Delivery to Customer pursuant to Section 2.6(a). 2.7 Procurement of Materials. (a) Manufacturer shall order and maintain sufficient quantities of all Product Materials, including safety stock as required by the applicable Facility Addendum, to enable Manufacturer to manufacture and Deliver Product in accordance with its Delivery obligations under this Agreement and the applicable Facility Addendum. With respect to those Third Party suppliers of Product Materials used by Manufacturer or its Affiliates in the ordinary course in the manufacturing or supply of a given Product immediately prior to the Effective Date ("Manufacturer Third Party Suppliers"), Manufacturer shall be permitted to purchase solely the same Product Materials from such Manufacturer Third Party Suppliers in connection with its activities under this Agreement without first obtaining Customer's prior written consent. Any other Third-Party supplier for Product Materials (or procurement of a different Product Material from any Third-Party supplier) must be approved in advance in writing by Customer (such approval not to be unreasonably withheld, conditioned or delayed). For the avoidance of doubt, as of the Effective Date, as between Manufacturer and Customer, Manufacturer will be solely responsible for maintaining and establishing relationships with the Third-Party suppliers of Product Materials. The costs of all such Product Materials shall be included in the Price of the applicable Product. (b) Unless otherwise set forth in the applicable Facility Addendum for a specific Product, Customer shall have no liability for excess or obsolete Product Materials purchased by Manufacturer, (x) except as set forth in Section 2.4(h) or Section 7.9 or (y) unless the excess or obsolescence is caused by a change to the specifications for such Product Materials or the Specifications of a given Product in accordance with this Agreement after such Product Materials have been purchased by Manufacturer based upon a Firm Order or accepted Purchase Order). (c) Customer understands and acknowledges that (i) certain Product Materials have a limited shelf-life, are long lead time items, and are subject to minimum order quantities specified by the applicable supplier and (ii) Manufacturer will rely on the Firm Orders and Forecasts to order Product Materials required to meet the Firm Orders (plus safety stock for certain Product Materials of a Product as reasonably determined by Manufacturer). In addition, Customer understands that, to ensure an orderly supply of the Product Materials, Manufacturer may elect to purchase the Product Materials in sufficient volumes to meet the production requirements for Products during part or all of the forecasted periods; provided, however, that Customer shall not have any liability with respect to any purchase by Manufacturer or any of its Affiliates of labeling or packaging materials (including labels, cartons and leaflets) in excess of the amount required to meet the Firm Order applicable at such time plus the amount of applicable Product forecasted to be ordered in months four (4) through six (6) of the Forecast applicable at such time. -22- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +(d) Manufacturer must review with Customer any assessment made (or related action proposed to be taken) by Manufacturer related to rejection or destruction of any Customer-Supplied Materials, Buy-Sell Materials, Product, or Product Materials intended for Customer's Product to discuss viability for commercial use. 2.8 Product Samples. + +If representative lot samples of production batches of Product are requested by Customer in order to satisfy its obligations under applicable Law, including any regulatory requirements, or to any Governmental Authority, then Manufacturer shall provide Customer (or any such Third Party as Customer shall designate) with representative lot samples of each production batch of Product promptly upon Customer's request. Customer shall be entitled to review, upon reasonable prior written notice, all manufacturing Records relating to such samples, including all analytical procedures and cleaning validation relating to the equipment used in connection with the manufacture of the samples. Such Product samples shall be Delivered to Customer (or such Third Party as Customer shall designate) in accordance with the provisions set forth in Section 2.6(a) and at the Price as determined in accordance with the terms of Section 3. Customer shall pay for such samples when invoiced in accordance with Section 3.5. 2.9 Storage. + +Manufacturer will store Products, Buy-Sell Materials, Product Materials, and Customer-Supplied Materials in accordance with the requirements of the Quality Agreement. With respect to those Third-Party warehouses used by Manufacturer or its Affiliates in the ordinary course for the storage of a given Product, Buy-Sell Materials, Product Materials, or Customer-Supplied Materials immediately prior to the Effective Date, Manufacturer may engage such Third-Party warehouse to perform the solely same activities for such Product, Buy- Sell Materials, Product Materials, and Customer-Supplied Materials under this Agreement without first obtaining Customer's prior written consent. The use of any Third Party warehouse for the storage of any Product, Buy-Sell Materials, Product Materials, or Customer- Supplied Materials other than in the manner expressly permitted pursuant to this Section 2.9 must be approved in advance in writing by Customer, such approval not to be unreasonably withheld, conditioned or delayed. Manufacturer shall obtain the right for Customer to audit, at Customer's expense, any such Third-Party warehouse upon reasonable prior advance written notice and during normal business hours. Manufacturer has no obligation to store Product more than fifteen (15) Business Days following the requested delivery date for such Product; provided that (a) Manufacturer shall be obligated to store Product for such longer -23- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +period as may be reasonably necessary for Customer to arrange transportation for such Product in the event that Manufacturer experiences delays in the manufacture, release, or supply of a particular Product that results in the delivery of a quantity of Product that exceeds historical or Forecast quantities of Product for the applicable period and; (b) with respect to any Product that Customer reasonably believes should not be released by Manufacturer, Manufacturer shall store such Product until the Parties' definitive resolution pursuant to this Agreement and the Quality Agreement as to whether such Product should be released. At the expiration of the applicable time frame in the preceding sentence, notwithstanding any provision of this Section 2.9 to the contrary, Manufacturer may transport and store the subject Product at a Third-Party warehouse at Customer's expense. 2.10 Transitional Support. (a) On a Product-by-Product basis, Customer may elect, upon written notice to Manufacturer, for Manufacturer to provide Customer with reasonable technical support, as more fully set forth in this Section 2.10, to transfer production of a given Product or Products to a Customer facility or a facility of an alternative source of supply as designated by Customer (such support, "Technical Support" and such facility, the "Receiving Site"). Customer may make such election for Technical Support at any time during the Term (including in the event of a Triggering Event under Section 2.5(a) or in advance of any expiration of this Agreement) or promptly after the termination or expiration of this Agreement but in no event more than ninety (90) days following the effective date of such termination or expiration. Such reasonable Technical Support shall consist of: (i) supply of a technical package to facilitate the transfer of all relevant manufacturing information for such Product(s) to the Receiving Site, including formulation descriptions, manufacturing instructions, Specifications, methods, data required for applicable regulatory submissions and facility qualification, and material supplier information, as applicable, except for any information that is subject to confidentiality obligations owing to a Third Party; provided that the technical package will not include any manufacturing information, including formulation descriptions, manufacturing instructions, Specifications, methods and material supplier information, that is generally available to or known by the public, can be obtained on reasonable terms from Third Parties or is already available or being utilized by Customer or its Affiliate at one of Customer's or its Affiliate's facilities; (ii) host site visits to the Manufacturer's Facility by Customer to observe production of the applicable Product or Products, in each case, at a mutually agreed date and subject to confidentiality procedures or requirements as may be requested or implemented by Manufacturer; provided that the request for each such visit shall be made so as to allow for sufficient advance preparation time and can be accommodated in the requested timeframe without interruption to Manufacturer's routine production or operations; -24- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +(iii) performance of high-level consultation and answering reasonable queries for Customer through the transfer process; and (iv) provision of reasonable Product samples required under applicable Law for transfer activities. (b) Customer shall be responsible for identifying and requesting any and all Technical Support that is required from Manufacturer to assure such technology transfer is successful. (c) The Parties shall reasonably cooperate and mutually agree to facilitate the provision of any additional reasonable Technical Support with respect to the applicable Product or Products to Customer, including assistance through the transfer process, Manufacturer Personnel visits to the Receiving Site and training and troubleshooting during the Receiving Site's first production run of the applicable Product or Products, in each case, as and to the extent reasonably agreed by Manufacturer in each instance (and subject to Sections 2.10(d), 2.10(e) and 2.10(f)). (d) The Parties will work together in good faith to plan for upcoming and ongoing Technical Support needs and to accommodate such plans in order to maintain ongoing business continuity. In addition, Manufacturer shall have no obligation to hire or retain any individuals or make any capital expenditures in connection with Technical Support, and Manufacturer's obligation to provide Technical Support is contingent upon the continued employment by Manufacturer of those individuals capable of providing such Technical Support. Manufacturer may terminate its obligation to provide any Technical Support with respect to the applicable Product under this Agreement if Customer or any of its Affiliates hires any Manufacturer Personnel involved in providing Technical Support to Customer hereunder (without limiting any applicable non-solicitation obligations of Customer pursuant to the Business Combination Agreement). (e) Customer shall be solely responsible for any and all regulatory or other Governmental Authority requirements, activities and related costs and expenses that arise in conjunction with any Technical Support, technology transfer of production or production of each Product to or at the Receiving Site. These activities may also include, but are not limited to, creation of additional data or technical information, analytical method modifications or other work of a technical nature required to support regulatory queries or contemporary standards and guidelines driven by the manufacturing transfer (subject to Section 8.2). -25- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +(f) Subject to Section 2.5(e), Customer is responsible for, and shall promptly reimburse Manufacturer for, any and all reasonable out-of- pocket costs and expenses incurred by or on behalf of Manufacturer in connection with any Technical Support provided to Customer under this Agreement, including employee costs to be charged at a rate that reasonably approximates the cost of providing the Technical Support, without any intent to cause Manufacturer to make profit or incur loss. (g) With respect to each Product for which Manufacturer provides Technical Support under this Agreement, Manufacturer shall provide to Customer any analytical materials and methods in Manufacturer's possession or control that are required in connection with disclosures to any applicable Governmental Authority to qualify the applicable Product Materials, Buy-Sell Materials, or Customer- Supplied Materials for such Product or such Product itself for release testing to meet the then-current applicable marketing authorization, in each case, subject to Section 13. (h) Nothing in this Agreement shall require Manufacturer to provide more than 75 hours per calendar year per Product in connection with any Technical Support. Notwithstanding anything to the contrary herein, except as expressly provided in Section 2.10(g), Manufacturer shall have no obligation to disclose, license or otherwise provide confidential or proprietary information of Manufacturer, its Affiliates or any Third Party in connection with this Agreement or any Technical Support or technology transfer therein. 3. Price; Payment; Price Adjustments; Taxes. 3.1 Price. (a) Initial Price. On a Fiscal Year-by-Fiscal Year basis, Customer shall purchase each Product from Manufacturer at the Price for such Product for such Fiscal Year, as determined in accordance with the terms of this Section 3. The Price for each Product during the Initial Price Term (such Price, the "Initial Price" for such Product) is set forth in the Facility Addendum for such Product. Following the Initial Price Term, the Price of such Product may be adjusted only as set forth in Section 3.1(b) and Section 3.2. (b) Price in Extension Periods. In the event that Customer elects to extend the Initial Term of the Agreement or of a Facility Addendum, the Price for each applicable Product in any Extension Period shall be one hundred percent (100%) of Manufacturer's Standard Product Materials Cost plus one hundred and ten percent (110%) of Manufacturer's Standard Conversion Cost of such Product, each for the initial Fiscal Year of the first Extension Period with respect to such Product. During each Extension Period, the Price of such Product may be adjusted as set forth in Section 3.2; provided that the initial Fiscal Year of the first Extension Period shall operate as the Facility Conversion Cost Baseline Fiscal Year (as defined below). -26- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +(c) Subject to the limitations and conditions set forth in this Agreement, it is the intention of the Parties that the Price of each Product reflects one hundred percent (100%) of Manufacturer's Standard Product Materials Cost plus one hundred and ten percent (110%) of Manufacturer's Standard Conversion Cost of such Product. The Price for each Product will be set forth in the currency specified in the applicable Facility Addendum. (d) Changes to the Standard Cost Methodology. Manufacturer shall have the right to change the Standard Cost methodology once per Fiscal Year; provided that any change shall be consistent with the Accounting Method and applied across all products manufactured at the applicable Facility. If Manufacturer elects to change the Standard Cost methodology, Manufacturer shall calculate both (i) the revised Standard Cost using the methodology effective during the then-current Fiscal Year of the Term of the applicable Facility Addendum and (ii) the percentage change in Standard Cost caused by the change in methodology relative to the former methodology. If such Standard Cost methodology change results in an increase of Facility Conversion Cost for Products manufactured for Customer of more than two percent (2%), then Manufacturer shall revert to the former methodology for purposes of the calculation of Price during such Fiscal Year. 3.2 Price Adjustment. (a) Product Materials Adjustment. (i) On a Facility-by-Facility basis, with respect to each full Fiscal Year of the Term of the applicable Facility Addendum, the Price of each Product manufactured at the applicable Facility will be updated to reflect one hundred percent (100%) of the full estimated amount of the increase or decrease in the cost of Product Materials for each such Product. (ii) In each Fiscal Year of the Term of this Agreement, Manufacturer shall submit a report to Customer by no later than the end of the first quarter of such Fiscal Year setting out the Facility Actual Product Materials Cost with respect to each Facility for the prior Fiscal Year. In the event that the Facility Actual Product Materials Cost differs from the Facility Estimated Product Materials Cost, when adjusted to reflect actual volume, then Manufacturer shall issue either (A) an invoice to Customer for any amounts owed by Customer to Manufacturer or (B) a credit memo for amounts owed by Manufacturer to Customer reflecting the difference between the Price as invoiced and an adjusted Price for such Fiscal Year; -27- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +provided, however, that any such adjustment made in accordance with the foregoing shall be subject in all cases to the provisions of Section 3.2(e). Customer shall pay all undisputed amounts due in the currency specified in the applicable Facility Addendum within sixty (60) calendar days from the date of the invoice. If Customer disputes all or any portion of an invoice, it shall be required to pay only the amount not in dispute, and in such event Customer shall notify Manufacturer of the amount and nature of the dispute. Payment by Customer of any amount reflected in any invoice shall not result in a waiver of any of Customer's rights under this Agreement. (b) Conversion Cost Adjustments. (i) Subject to the remainder of this Section 3.2(b), on a Facility-by-Facility basis, if the Facility Conversion Costs of a Facility during any Fiscal Year following the first full Fiscal Year of the Term of the applicable Facility Addendum (such Fiscal Year, a "Facility Conversion Cost Adjustment Fiscal Year") are estimated to be (a) less than seventy-five percent (75%) of the Facility Conversion Costs for the Facility Conversion Cost Baseline Fiscal Year (as defined below) or (b) greater than one hundred and twenty-five percent (125%) of the Facility Conversion Costs for the Facility Conversion Cost Baseline Fiscal Year (clauses (a) and (b) referred to collectively as the "Facility Conversion Cost Threshold"), when adjusted to reflect a constant volume between the Facility Conversion Cost Adjustment Fiscal Year and the Facility Conversion Cost Baseline Fiscal Year, then the Price for such Product will be updated beginning with such Facility Conversion Cost Adjustment Fiscal Year to reflect one hundred and ten percent (110%) of the increase or decrease in Facility Conversion Costs. An example calculation of the foregoing Price adjustment is attached hereto as Attachment G. Subject to the last sentence of Section 3.1(b), the "Facility Conversion Cost Baseline Fiscal Year" shall be, as of the Effective Date, 2019 budget volumes and costs as summarized in the applicable Facility Addenda; provided that in each instance in which the Price is adjusted in accordance with the immediately preceding sentence of this Section 3.2(b)(i), the Facility Conversion Cost Baseline Fiscal Year shall be the applicable Facility Conversion Cost Adjustment Fiscal Year. (ii) In the event that Price is adjusted as a result of a change to Facility Conversion Cost under Section 3.2(b)(i), the Facility Conversion Cost Threshold for all remaining Fiscal Years in the Initial Term (or Extension Periods as appropriate) will be reduced such that if Facility Conversion Costs of a Facility during any Facility Conversion Cost Adjustment Fiscal Year are estimated to be (a) less -28- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +than eighty percent (80%) of the Facility Conversion Costs for the Facility Conversion Cost Baseline Fiscal Year or (b) greater than one hundred and twenty percent (120%) of the Facility Conversion Costs for the Facility Conversion Cost Baseline Fiscal Year, then the Price for such Product will be updated beginning with such Facility Conversion Cost Adjustment Fiscal Year to reflect the full estimated amount of the increase or decrease in Conversion Cost. (iii) Notwithstanding anything to the contrary in this Section 3.2(b), Manufacturer shall not have the ability to adjust the Price to reflect actual volume for Products in a Facility to the extent that Customer has reduced its demand for one or more Products in such Facility due to Manufacturer's breach of or other failure to supply under this Agreement or the applicable Facility Addendum. (iv) In each Fiscal Year following the first full Fiscal Year of the Term of this Agreement, Manufacturer shall submit a report to Customer by no later than the end of the first quarter of such Fiscal Year setting out the actual volume of Product for each Facility for the prior Fiscal Year. In the event that the actual Facility Conversion Costs demonstrate that the then applicable Facility Conversion Cost Threshold has been exceeded, and Manufacturer had not previously adjusted the applicable Price in accordance with this Section 3.2(b) to account for such adjustment, then Manufacturer shall either issue (A) an invoice to Customer for any amounts owed by Customer to Manufacturer or (B) a credit memo for amounts owed by Manufacturer to Customer reflecting the difference between the Price as invoiced and the adjusted Price for such Fiscal Year; provided, however, that any such adjustment made in accordance with the foregoing shall be subject in all cases to the provisions of Section 3.2(b)(iii). For clarity, any amount owed by Customer to Manufacturer or owed by Manufacturer to Customer shall be one hundred and ten percent (110%) of Manufacturer's Conversion Cost, reduced by a 20% allowance for variable costs. Customer shall pay all undisputed amounts due in the currency specified in the applicable Facility Addendum within sixty (60) calendar days from the date of the invoice. If Customer disputes all or any portion of an invoice, it shall be required to pay only the amount not in dispute, and in such event Customer shall notify Manufacturer of the amount and nature of the dispute. Payment by Customer of any amount reflected in any invoice shall not result in a waiver of any of Customer's rights under this Agreement. (c) Notwithstanding the above, the price for Buy-Sell Materials will be updated annually in each year following the first Fiscal Year to reflect one hundred percent (100%) of the full estimated amount of the cost of Buy-Sell Materials to Manufacturer. Customer may not change the price of Buy-Sell -29- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +materials during any Fiscal Year. Upon any notification by Customer to Manufacturer of any reduction in the price of Buy-Sell Materials for the upcoming Fiscal Year, Manufacturer shall submit to Customer an inventory of such Buy-Sell Materials on hand and a calculation of the positive difference between the aggregate price for such Buy-Sell Materials applying the price for the current Fiscal Year and the aggregate price for such Buy-Sell Materials applying the price for the upcoming Fiscal Year. Customer shall promptly and in no event later than sixty (60) days issue to Manufacturer a credit memo in the amount of such positive difference reflected in Manufacturer's notice. (d) The increases or decreases described in this Section 3.2 shall be determined by Manufacturer in a manner consistent with the accounting methodologies used by Manufacturer as of the Effective Date and shall be based on the applicable Forecasts provided by Customer in July of the applicable Fiscal Year and applied consistently across Manufacturer's entire manufacturing operations for the full Facility. (e) Manufacturer shall notify Customer of any estimated expected changes to Prices for the upcoming Fiscal Year by no later than June 1 of the then-current Fiscal Year and shall notify Customer of any actual changes to Prices for the upcoming Fiscal Year by no later than October 30 of the then-current Fiscal Year. Between June 1 and October 30, the Parties will engage in ongoing discussions to ensure that any final changes to Prices for the applicable Fiscal Year conform to the terms and conditions of this Agreement. Manufacturer will promptly respond to Customer's inquiries regarding any proposed changes to the Price of Products and provide reasonable documentation to Customer supporting the estimated or actual change in such Prices. Any actual, adjusted Price of each Product shall become effective on the first day of the first month of such upcoming Fiscal Year. (f) Any disputes relating to changes in Price for a given Product will be resolved pursuant to Section 3.4. 3.3 Cost Improvement. + +At Customer's reasonable request, Manufacturer and Customer agree to discuss in good faith the implementation of possible cost reduction opportunities with the objective to reduce the net Price of Product. Without limiting the generality of the foregoing, Manufacturer shall use commercially reasonable efforts to reduce the price of Product Materials. -30- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +3.4 Price Review and Audit Procedure. (a) Manufacturer shall maintain complete and accurate Records that fairly reflect the relevant costs and calculations used to determine the Price of each Product and shall retain such Records for a period of not less than three (3) years after the applicable Product was manufactured and delivered hereunder. With respect to a Price change under Section 3.2 for any Product in an upcoming Fiscal Year, if Customer requests such a review in writing within thirty (30) days following notice to Customer of such change, then: (i) the Parties shall reasonably discuss and attempt to resolve any disagreement with respect thereto and (ii) if such disagreement is not resolved within thirty (30) days following commencement of such discussions, Customer shall have the right, no more than one (1) time per Fiscal Year each for the subject of (1) and (2) below and on no less than thirty (30) days' notice to Manufacturer, to appoint a reputable and internationally recognized independent Third-Party audit firm reasonably acceptable to Manufacturer (and which agrees to be bound by Manufacturer's customary confidentiality agreement) to audit such relevant Records, during normal business hours and on a confidential basis, to verify that, either (1) the change in the relevant Products' Price for an applicable Facility for the upcoming Fiscal Year, as applicable, or (2) the true-up determination with respect to (x) the estimated and actual Facility Conversion Costs of a Facility with respect to any Fiscal Year or (y) the Facility Estimated Product Materials Cost and the Facility Actual Product Materials Cost with respect to any Fiscal Year, was accurately and equitably calculated by Manufacturer in accordance with this Agreement; provided that Customer shall be deemed to have waived its right for such a review if Customer does not make such request within thirty (30) days following delivery of Manufacturer's notice to Customer of such increase. For the avoidance of doubt, any such audit initiated by Customer in accordance with clause (ii) above shall include in the scope of audit all of the Products manufactured at the applicable Facility, and not be limited in scope to the discrete Product(s) in question. Subject to Section 3.4(b)(2), Customer shall bear all costs and expenses of conducting such an audit, and such accounting firm shall work on an hourly or flat fee basis without a contingency fee or other performance or bonus fee. Such accounting firm shall, as promptly as practicable, provide in writing (I) a detailed report of such audit to Manufacturer and (II) a separate report limited to the Price for the subject Products in the relevant Fiscal Year as calculated by such accounting firm in accordance with this Agreement to Manufacturer and Customer. The Price for the Products during a Fiscal Year, as calculated by such accounting firm, absent any manifest error, shall be binding upon the Parties with respect to such increase or required payment, as applicable; provided that, within fifteen (15) days of receipt of the audit report, Manufacturer shall have the right to dispute such Price or calculation thereof by submitting written notice to Customer and the accounting firm accompanied by information supporting Manufacturer's position. Within thirty (30) days of receipt of Manufacturer's notice of dispute, the accounting firm shall issue its final findings with respect to the Price for the relevant Product in the relevant Fiscal Year and such decision, absent manifest error, shall be binding upon the Parties. -31- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +(b) If, as a result of any audit by Customer pursuant to Section 3.4(a), the aggregate Price calculated by the accounting firm with respect to all Products manufactured at the applicable Facility for a Fiscal Year is: (i) less than ninety-five percent (95%) of the aggregate Price for all such Products established by Manufacturer pursuant to Section 3.2 for such Products during such Fiscal Year, then, if Customer has made payments to Manufacturer for such Products at the higher Price established by Manufacturer during such Fiscal Year, Manufacturer shall refund to Customer the overpayment made by Customer; or (ii) more than one hundred and five percent (105%) of the aggregate Price for all such Products established by Manufacturer pursuant to Section 3.2 for such Products during such Fiscal Year, then, if Customer has made payments to Manufacturer for such Products at the lower Price established by Manufacturer for such period, Customer shall promptly pay Manufacturer for the amount of the underpayment that should have been paid by Customer; + +in each case of clauses (i) and (ii), (1) such payment to be made within sixty (60) days of the owing Party's receipt of the relevant detailed report and final Price pursuant to Section 3.4(a) and (2) Manufacturer shall be responsible for payment of the applicable accounting firm's reasonable and actual fees in connection with such audit. 3.5 Invoices and Payment. + +Manufacturer shall submit invoices to Customer upon Delivery of Product. All invoices for Products will be in functional currency unless otherwise specified in the applicable Facility Addendum, and all undisputed payments hereunder shall be in full and be made without any withholding, offset or any other deductions. Manufacturer shall include the following information on all invoices: (a) the applicable Purchase Order number and billing address; (b) the quantity of Product delivered (and where applicable, the type, description or part number, if any); (c) the required delivery date specified in the applicable Purchase Order; (d) the actual date of Delivery; (e) the Price; (f) any applicable Taxes, transportation charges or other charges provided for in the applicable Purchase Order; (g) the applicable invoice number; and (h) the Delivery Facility, unless otherwise specified in the Facility Addendum. Subject to Customer's rights under Section 4.8 to reject Non-Complying Product or Product that is not otherwise Delivered in accordance with the terms of and conditions of this Agreement, Manufacturer shall invoice Customer for Product upon Delivery of the applicable Product in accordance with Section 2.6(a). Customer shall be obligated to pay only for actual quantities of -32- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +Product delivered. Unless otherwise set forth in the applicable Facility Addendum with respect to a particular Product or Products, Customer shall pay all undisputed amounts due in the currency specified in the applicable Facility Addendum within sixty (60) calendar days from the date of the invoice. If Customer disputes all or any portion of an invoice, it shall be required to pay only the amount not in dispute, and in such event Customer shall notify Manufacturer of the amount and nature of the dispute. Payment by Customer of any amount reflected in any invoice shall not result in a waiver of any of Customer's rights under this Agreement. If any payment required to be made under this Agreement is not made within twenty (20) days of the applicable date when such payment is due (the "Late Payment Date"), interest shall accrue on such past due amount from the Late Payment Date until the date payment is actually made at a quarterly rate equal to the lesser of (i) the Three-Month U.S. dollar LIBOR (Reuters Page LIBOR01) on the Late Payment Date (or the next Business Day if such Late Payment Date is not a Business Day), and (ii) the maximum rate permitted by applicable Law. Time for any payments hereunder shall be of the essence. 3.6 Taxes. (a) All sums payable under this Agreement are exclusive of any amount in respect of VAT. If any action of one Party (the "Supplier") under this Agreement constitutes, for VAT purposes, the making of a supply to another Party (or a member of that Party's Group) (the "Recipient") and VAT is or becomes chargeable on that supply, the Recipient shall pay to the Supplier, in addition to any amounts otherwise payable under this Agreement by the Recipient, a sum equal to the amount of the VAT chargeable on that supply against delivery to the Recipient of a valid VAT invoice issued in accordance with the laws and regulations of the applicable jurisdiction. (b) Without duplication of amounts covered by Section 3.6(a), Customer (or the applicable Affiliate) shall be responsible for all VAT, sales, goods and services, use, gross receipts, transfer, consumption and other similar Taxes (excluding, for clarity, Taxes imposed on net income, profits and gains and franchise Taxes), together with interest, penalties and additions thereto ("Service Taxes"), imposed by applicable taxing authorities on the direct sale of Products to Customer or any of its Affiliates or any payment hereunder; provided that such Service Taxes are shown on a valid invoice. If Manufacturer or any of its Affiliates is required to pay any part of such Service Taxes, Manufacturer shall provide Customer with evidence that such Service Taxes have been paid, and Customer (or its applicable Affiliate) shall reimburse Manufacturer for such Service Taxes. Manufacturer shall, upon the reasonable request of Customer, promptly revise any invoice to the extent such invoice was erroneously itemized or categorized. Each Party shall, and shall cause its Affiliates to, use commercially reasonable efforts to (i) minimize the amount of any Service Taxes imposed on the provision of Services hereunder, including by availing itself of any available exemptions from or reductions to any such -33- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +Service Taxes, and (ii) cooperate with the other Party in providing any information or documentation that may be reasonably necessary to minimize such Service Taxes or obtain such exemptions or reductions. If at any time Manufacturer (or any of its Affiliates) receives a refund (or credit or offset in lieu of a refund) of any Service Taxes borne by Customer (or any of its Affiliates), then Manufacturer or its Affiliate receiving such refund or utilizing such credit or offset shall promptly pay over the amount of such refund, credit or offset (net of all reasonable related out-of-pocket costs, expenses and Taxes incurred in respect thereof) to Customer or its applicable Affiliate, it being understood that Customer and its applicable Affiliate shall be liable for (x) any subsequent disallowance of such refund, credit or offset and any related interest, penalties or additions thereto and (y) any reasonable out-of- pocket costs and expenses related to such disallowance. (c) The Parties and their Affiliates shall reasonably cooperate to determine whether any Tax withholding applies to any amounts paid under this Agreement and, if so, shall further reasonably cooperate in (i) minimizing the amount of any such withholding Taxes, including by availing itself of any available exemptions from or reductions to any such withholding Taxes, (ii) providing any information or documentation that may be reasonably necessary to minimize such withholding Taxes or obtain such exemptions (including, without limitation, pursuant to any applicable double taxation or similar treaty) or (iii) receiving a refund of such withholding Taxes or claiming a Tax credit therefor. If any such withholding is required by applicable Law, the paying Party (or its applicable Affiliate) shall properly and timely withhold and remit such Taxes to the applicable taxing authority and use reasonable efforts to provide the other Party with a copy of any receipt (where it is common practice for the applicable taxing authority to provide such a receipt) or other documentation confirming such payment, and such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the receiving Party (or its applicable Affiliate). The paying Party (or its applicable Affiliate) shall not be required to "gross up" any amounts invoiced to the paying Party to account for, or otherwise compensate the receiving Party (or its applicable Affiliate) for, any Taxes that are required to be withheld under applicable Law. (d) Where a Party or any member of its Group is required by this Agreement to reimburse or indemnify the other Party or any member of its Group for any cost or expense, the reimbursing or indemnifying Party (or the applicable member of its Group) shall reimburse or indemnify the other Party (or the applicable member of its Group) for the full amount of the cost or expense, inclusive of any amounts in respect of VAT imposed on that amount to the extent properly reflected on a valid invoice, except to the extent that the reimbursed or indemnified Party reasonably determines that it (or such member of its Group), or a member of the same group as it (or such member of its Group) for VAT purposes, is entitled to credit for or repayment of that VAT from any relevant taxing authority. -34- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +(e) For purposes of this Agreement, and except as otherwise specifically provided in this Agreement, Tax matters shall be exclusively governed by the Tax Matters Agreement, and in the event of any inconsistency between the Tax Matters Agreement and this Agreement with respect to Tax matters, the Tax Matters Agreement shall control. 3.7 No Duplicative Payments. Notwithstanding anything to the contrary in this Agreement, no Party (or Affiliate thereof) shall enjoy a duplicative right, entitlement, obligation, or recovery with respect to any matter arising out of the same facts and circumstances. 4. Manufacturing Standards and Quality Assurance. 4.1 Quality Agreement. + +On a Facility-by-Facility and Product-by-Product basis, the Parties will comply with the requirements and provisions set forth in the Quality Agreement applicable to the applicable Facility and Product, the form of which has been attached hereto as Attachment B and, through such attachment, made a part hereof. In the event of a conflict between the terms of the applicable Quality Agreement and the terms of this Agreement, the terms of the Quality Agreement shall govern and control for all quality and regulatory compliance matters and the terms of this Agreement shall govern and control for all other matters. 4.2 Manufacturing Standards. + +Manufacturer shall manufacture and supply each Product (including disposing of all Waste and other materials) in accordance with all applicable Specifications, applicable Laws, requirements under the applicable Quality Agreement, and this Agreement. 4.3 Manufacturing Changes. (a) Discretionary Changes. Subject to Section 4.3(b), in the event that either Party desires to change, revise, modify or otherwise alter the Specifications, manufacturing processes, Product Materials, Buy-Sell Materials, Customer-Supplied Materials, or Facilities with respect to a given Product in any manner (each, a "Manufacturing Change"), the Party desiring the Manufacturing Change shall notify the other Party in writing of the proposed Manufacturing Change and the Parties will promptly meet to discuss, in good faith, the feasibility of implementing such Manufacturing Change and the allocation of costs between the Parties for such Manufacturing Change; provided that the requested Manufacturing Change will not be implemented unless and until the Parties mutually agree in writing to implement such Manufacturing Change. Unless otherwise agreed upon by the Parties, the Party requesting the Manufacturing Change will be responsible for, and will bear the costs of, any filings or other actions that either Party must take with the applicable Governmental Authority as a result of such Manufacturing Change. -35- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +(b) Required Changes. If, at any time, a Manufacturing Change is required by a Governmental Authority in a country in which Regulatory Approval for a given Product has been granted, a Governmental Authority in a country in which Customer seeks to obtain Regulatory Approval for a given Product, or a Governmental Authority in the country in which the Facility that manufactures a given Product is located, then the Party that first has knowledge of the required Manufacturing Change shall notify the other Party in writing of such required Manufacturing Change, and Manufacturer will review such Manufacturing Change with Customer. Manufacturer will bear all costs and expenses associated with implementing the Manufacturing Change, unless such Manufacturing Change relates solely to a Product or Products manufactured for Customer (including any required labeling changes), in which case Customer will bear all costs and expenses associated with implementing such Manufacturing Change for such Product, including any changes to labeling or packaging, but only to the extent such costs are reasonable and documented. 4.4 Pest Control. + +Manufacturer shall manufacture all Products, and Manufacturer shall store all Product Materials, Buy-Sell Materials, Customer-Supplied Materials, and all Products, in a clean, dry area, free from insects and rodents, in a manner to prevent entry of foreign materials and contamination of Product. Manufacturer's pest control measures shall include the adequate cleaning of the Facility, control of food and drink, protection of Product from the environment, monitoring of flying and crawling pests and logs detailing findings and actions taken. Manufacturer's pest control program shall be detailed in a written procedure which complies with applicable Laws, including cGMPs, and which shall be subject to review and approval by Customer. If Customer has specific concerns about procedures in place at any Facility, Customer will present such issues in its audit findings and the Parties will discuss in good faith a mutually agreeable plan for resolution of such issues. Failure of Manufacturer to comply with this Section 4.4 shall be deemed a material breach of this Agreement. 4.5 Legal and Regulatory Filings and Requests. (a) Manufacturer shall reasonably cooperate with Customer in responding to all requests for information from, and in making all legally required filings with, Governmental Authorities in the Territory having jurisdiction to make such requests or require such filings. Manufacturer shall: (a) obtain and comply with all licenses, consents and permits required under applicable Laws in the Territory (and Manufacturer shall provide Customer with a -36- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +copy of all such licenses, consents and permits that are material upon Customer's reasonable request); and (b) comply with all applicable Laws in the Territory with respect to its manufacturing and packaging processes, the Facility or otherwise, to permit the performance of its obligations hereunder. Upon Customer's request, Manufacturer shall apply for and obtain Certificates of Pharmaceutical Production ("CPP") from the Governmental Authorities of the country where the Facility is located, such CPPs to be issued to countries where CPPs according to Customer's opinion are required. Manufacturer shall pay all reasonable costs necessary to obtain such CPPs and be entitled to be reimbursed against invoice by Customer at cost; provided that Manufacturer shall make good faith efforts to consolidate its invoices for such reimbursement for CPPs and submit to Customer on a Fiscal Year quarterly basis. (b) In the event that Customer wishes to extend the Territory with respect to a certain Product, Customer shall notify Manufacturer of such request and Manufacturer shall consider Customer's request in good faith. For the avoidance of doubt, in the event that the Parties agree to extend the Territory with respect to a certain Product, any resulting Manufacturing Change shall be treated as a discretionary Manufacturing Change and governed by Section 4.3(a). 4.6 Quality Tests and Checks. + +Manufacturer shall perform all bulk holding stability, manufacturing trials, validation (including, but not limited to, method, process and equipment cleaning validation), raw material, in-process, bulk finished product and stability (chemical and/or microbial) tests or checks required to assure the quality of a given Product and any tests or checks required by the Specifications, the Quality Agreement, applicable Facility Addendum or applicable Laws. With respect to any Product manufactured prior to Closing or located at a Facility as of Closing, Manufacturer shall maintain, continue and complete any and all such activities, tests and checks, including, without limitation, all ongoing stability testing. All costs associated with the performance of Manufacturer's obligations under this Section 4.6 (including with respect to any Product manufactured prior to Closing or located at a Facility as of Closing) are included in the Price of each Product and, accordingly, Manufacturer shall perform the foregoing at its cost and expense, without further reimbursement from Customer. Manufacturer shall obtain Product for these tests from batches of Product manufactured under this Agreement, and Manufacturer is responsible for providing all necessary technical, quality and operational resources. All tests and test results shall be performed, documented and summarized by Manufacturer in accordance with the Specifications, Quality Agreement, applicable Facility Addendum, applicable Laws and reasonable quality assurance requirements provided by Customer to Manufacturer in writing. Manufacturer shall maintain all production Records and disposition of each batch of Product. -37- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +4.7 Responsibility for Non-Complying Product. + +Manufacturer shall not release any Product for Delivery to Customer that does not conform to the covenants set forth in Section 5.2(e) (such non-conforming Product, "Non-Complying Product"), without the prior written approval of Customer. Manufacturer shall quarantine all such Non-Complying Products and shall promptly submit to Customer a report detailing the nature of such non-compliance and Manufacturer's recommended disposition, including the investigation and testing done. Manufacturer shall also provide any additional information regarding such Non-Complying Product as may reasonably be requested by Customer. Customer shall not be required to pay for any Non-Complying Product or for the destruction or other disposition thereof (unless an investigation determines that the root cause for such Product being Non-Complying Product is Non-Complying Buy-Sell Materials or Non-Complying Customer-Supplied Material). 4.8 Rejection of Non-Complying Product. (a) Customer's Ability to Reject. Customer may reject any Non-Complying Product or Product that is not delivered to Customer in accordance with this Agreement by providing written notice of such rejection to Manufacturer within seventy-five (75) days following Customer's receipt of any Delivery of Product hereunder; provided, however, that Customer may, until the expiry date for a Product, provide notice of rejection of any Delivery of such Product having (i) latent defects, (ii) any defects that are not reasonably discoverable by Customer through standard inspection and testing of Products or (iii) defects caused by the breach by Manufacturer of any of its representations or warranties under this Agreement (collectively, "Latent Defects"); provided, further, that, and notwithstanding the foregoing, Customer shall notify Manufacturer within sixty (60) days after Customer first becomes aware of any such Latent Defect. (b) Manufacturer's Ability to Reject. Manufacturer may reject any Non-Complying Product by (i) providing Customer with no less than sixty (60) days' prior written notice of Manufacturer's intention to reject such Non-Complying Product along with the documentation set forth in Section 4.7, (ii) meeting with Customer at Customer's request to discuss the basis for the proposed rejection of the subject Non-Complying Product, and (iii) providing Customer with notice of rejection in the event that Manufacturer rejects the subject Non- Complying Product at the end of such sixty (60) day period (or such other time frame as the parties may agree upon). (c) Manufacturer's Obligation; Replacement. Manufacturer shall respond to any rejection, defect notice or any quality-related complaint from Customer pursuant to Section 4.8(a) in a timely manner or such other time frame as may be specified in the applicable Quality Agreement. Manufacturer shall conduct an analysis of the causes of any such complaint, shall report to Customer on any corrective action taken and shall reasonably consider -38- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +Customer's suggestions related to such corrective action or other quality-related matters. Customer shall promptly return any Product (or portions thereof) rejected pursuant to Section 4.8(a) to Manufacturer at Manufacturer's expense. With respect to any Non- Complying Product rejected by Customer, in addition to any other rights or remedies of Customer hereunder, Customer may elect, in its sole discretion, upon written notice to Manufacturer to either (i) have Manufacturer replace any Non-Complying Product as soon as practicable at no additional charge to Customer; provided that (A) the Manufacturer shall replace such Non-Complying Product within a period of ninety (90) days beginning on the date that the Manufacturer confirms or a Third-Party laboratory determines that the subject Product is a Non-Complying Product, and (B) if Manufacturer fails to replace such Non-Complying Product within such ninety (90) day period, then a Triggering Event shall be deemed to have occurred and the provisions of Section 2.5 shall apply; or (ii) be reimbursed for the Price of the Non-Complying Product actually paid. Manufacturer shall reimburse Customer for the cost of all Customer-Supplied Materials used to manufacture any Non-Complying Product (unless such Product is a Non-Complying Product due to any Non-Complying Customer-Supplied Material, as applicable). (d) Independent Testing. If the Parties are unable to agree on whether Product rejected by Customer is Non-Complying Product, then Manufacturer may hire an independent Third-Party laboratory, subject to Customer's prior written approval of such laboratory, not to be unreasonably withheld, conditioned or delayed, to perform testing on such rejected Product in accordance with the Specifications, applicable Laws and the Quality Agreement, which Third Party laboratory shall promptly provide the results thereof to Customer and Manufacturer. Manufacturer must engage such Third-Party laboratory within the thirty (30) day period following Manufacturer's receipt of Customer's rejection notice. If Manufacturer fails to engage such Third-Party laboratory during such thirty (30) day period, then Manufacturer will be deemed to have waived its right to engage such Third-Party laboratory. The determination of such tests shall be binding upon the Parties for all purposes hereunder; provided that, if such tests are unable to determine whether or not such rejected Product is Non-Complying Product, or if Manufacturer does not engage such Third-Party laboratory within the thirty (30) day period, then such Product shall be deemed to be Non-Complying Product. If such tests determine that the rejected Product is, or such Product is so deemed to be, Non-Complying Product, then Manufacturer shall bear the costs of such tests and Customer's remedies with respect to Non-Complying Product as set forth in this Agreement shall apply to such Non-Complying Product. Otherwise, Customer shall (i) bear the costs of such tests and shall remain obligated to pay Manufacturer the Price for such Product in accordance with Section 3 and (ii) reimburse Manufacturer for any shipping charges paid by Manufacturer pursuant to Section 4.8(c) with respect to the return of such -39- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +Product to Manufacturer. Without limiting the foregoing obligations, if Customer reasonably requests in writing, then Manufacturer shall use commercially reasonable efforts to re-deliver such Product to Customer at Customer's expense. For the avoidance of doubt, provided that the Product conforms to the minimum shelf-life dating set forth in Section 5.2(e)(v) upon initial Delivery, such minimum shelf-life dating requirement shall not apply to the subject Product upon re-delivery in accordance with the immediately preceding sentence. (e) Survival. The provisions of this Section 4.8 shall survive termination or expiration of this Agreement or the applicable Facility Addendum. 4.9 Disposal of Rejected and Non-Complying Product. + +All Non-Complying Product and Product rejected pursuant to this Agreement shall be removed (if applicable) and disposed of by Manufacturer in accordance with all applicable Laws, and as approved in advance by Customer in writing (such disposal cost to be at Manufacturer's expense, unless it is subsequently determined that Customer wrongly rejected such Product pursuant to Section 4.8). Manufacturer shall make documentation relating to such disposition available to Customer upon Customer's reasonable request. Manufacturer shall not sell for salvage or for any other purpose any rejected or Non-Complying Product, without the prior written approval of Customer. Manufacturer shall destroy all Non-Complying Product prior to disposal and Manufacturer shall deface and render unreadable all words or symbols that identify Customer, including Customer's trademarks and logotypes that adorn any packaging containing such Product, prior to disposal of such Product. 4.10 Maintenance and Retention of Records. + +Manufacturer shall maintain detailed Records with respect to Product Materials, Buy-Sell Materials, and Customer-Supplied Materials usage and finished Product production in accordance with the Quality Agreement. 4.11 Government Inspections, Seizures and Recalls. (a) Notification; Initiation of Recalls. If (i) Manufacturer determines or comes to learn that a Product distributed to the market contains a latent defect or (ii) the FDA or any other Governmental Authority conducts an inspection at Manufacturer's Facility, seizes any Product, Buy-Sell Materials, Customer-Supplied Materials, or Product Materials, requests a Recall of any Product, Buy-Sell Materials, Customer-Supplied Materials, or Product Materials, or otherwise notifies Manufacturer of any violation or potential violation of any applicable Law at the Facility, or (iii) Customer notifies Manufacturer of its intent to initiate a Recall, then, with respect to each ((i)- (iii)), Manufacturer shall promptly notify Customer (as applicable) and shall take such actions as may be required under the Specifications or Quality -40- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +Agreement. As applicable, Manufacturer shall promptly send any reports relating to such inspections, Recalls, violations or potential violations of applicable Law to Customer; provided that Manufacturer may reasonably redact any such reports to protect its confidential and proprietary Information that does not relate to Products. In the event that any such Governmental Authority requests, but does not seize, a given Product in connection with any such inspection, Manufacturer shall, to the extent reasonably practicable and permitted by applicable Law (1) promptly notify Customer of such request, (2) satisfy such request only after receiving Customer's approval, (3) follow any reasonable procedures instructed by Customer in responding to such request and (4) promptly send any samples of the applicable Product requested by the Governmental Authority to Customer. Manufacturer shall give and permit full and unrestricted access to all or any of its premises at any time to any authorized representative of any Governmental Authority or any of its agents or advisers and shall cooperate fully with any such representatives, in each case, relating to any such inspection. Manufacturer shall not initiate any Recall of Product, except as provided in the Quality Agreement, without the prior written agreement by Customer. (b) Costs. In the event a Recall results from any breach by Manufacturer of this Agreement, including Recalls on account of a given Product containing a latent defect, in addition to any other rights or remedies available to Customer under this Agreement, Manufacturer shall reimburse Customer for Customer's costs and expenses associated with such Recall, including costs of materials supplied by Customer (including Customer-Supplied Materials), shipping costs, administrative costs associated with arranging and coordinating the Recall and all actual Third Party costs associated with the distribution of replacement Product; provided that Customer shall be solely responsible for all, and shall reimburse Manufacturer for Manufacturer's costs and expenses associated with any Recall to the extent such Recall does not result from a breach by Manufacturer of this Agreement (e.g., is due to any Non- Complying Customer-Supplied Material or Non-Complying Buy-Sell Material). 4.12 Inspections. + +Subject to the remainder of this Section 4.12, no more than once per calendar year, upon thirty (30) days' advance written notice to Manufacturer, Customer may physically inspect or audit (consistent with Section 15.2) the Facilities under this Section 4.12; provided that Customer will use good faith efforts to choose dates of inspection or audit that do not unreasonably interfere with the operation of Manufacturer's business; provided, further, that Customer shall consider in good faith any alternative dates of inspection or audit proposed by Manufacturer within five (5) days of Manufacturer's receipt of such notice (it being understood that nothing in this Section 4.12 shall require Customer to accept any such proposed alternative dates of inspection or audit). Notwithstanding the limits set forth in the -41- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +foregoing sentence, Customer may more frequently conduct "for cause" physical inspections or audits of a Facility with five (5) days' advance written notice to Manufacturer if Customer has reasonable cause to believe that an inspection or audit of such Facility is warranted because Manufacturer's activities with respect to such Facility are in breach of this Agreement, applicable Laws, the Quality Agreement or the applicable Facility Addendum. Any such inspection or audit shall include access to relevant Records (subject to the terms of Section 15.2) and Personnel and being present during, as applicable, start-up manufacturing operations, validation, cleaning, sampling, laboratory testing, warehouse receiving and storage, pack out and shipping. Manufacturer shall provide technical assistance and direction to Customer and its representatives at the Facility. Subject to the terms and conditions set forth herein, Customer may conduct, at its own expense, periodic quality audits, to ensure Manufacturer's compliance with the terms of this Agreement. Manufacturer shall cooperate with Customer's representatives for all of these purposes, and shall promptly correct any deficiencies noted during the audits. Any Records or information accessed or otherwise obtained by Customer or its representatives during any such inspection or audit or any visit at any Facility shall be deemed Manufacturer's confidential and proprietary Information and each representative of Customer will be subject to non-use and other confidentiality obligations substantially comparable to those set forth herein for Customer. 4.13 Segregation of Restricted Compounds. + +Unless otherwise set forth in a Facility Addendum with respect to a Product, Manufacturer shall not manufacture a Product using facilities or equipment shared with the following classes of product without prior consultation and agreement with Customer: (a) steroids, hormones, or otherwise highly active or toxic products that carry a likelihood of a serious adverse effect (e.g., carcinogenicity; anaphylaxis; reproductive and/or developmental toxicity; serious target organ toxicity) following a potential product cross-contamination or carry-over scenario, particularly at low exposure concentrations (i.e., with reference to an acceptable daily exposure (ADE) value or permitted daily exposure (PDE) value < 10 µg/day); (b) immunosuppressors where the ADE or PDE value < 10 µg/day; (c) live or infectious biological agents; (d) live or attenuated vaccines; (e) biotherapeutics where the ADE or PDE value < 10 µg/day and sufficient deactivation cannot be demonstrated; (f) products exclusive for animal use; (g) non-medicinal products; or (h) radiopharmaceuticals. Manufacturer shall not manufacture any highly sensitizing products, including beta-lactam antibiotics, as well as certain non-beta-lactam antibiotics, or otherwise highly sensitizing products that can elicit an immediate hypersensitivity reaction (Type I hypersensitivity; immunoglobulin E-mediated) in the same Facility as a Product. -42- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +4.14 Packaging Material. + +Unless otherwise provided in the applicable Facility Addendum, Customer shall determine and be responsible for the text (including any logos or other graphics) for all packaging material used in connection with Product. Manufacturer shall assure that all packaging materials are accurate and consistent with Customer's specifications for such text or graphics, including such matters as placement, size and colors. Manufacturer shall promptly notify Customer of any errors or deficiencies in such provided packaging materials. 5. Covenants. 5.1 Mutual Covenants. Each Party hereby covenants to the other Party that it will perform its activities under this Agreement in full compliance with all applicable Global Trade Control Laws, including as follows: (a) unless a license or other authorization is first obtained, the issuance of which is not guaranteed, neither Party will knowingly transfer to the other Party any goods, software, technology or services that are (1) controlled at a level other than EAR99 under the U.S. Export Administration Regulations; (2) controlled under the U.S. International Traffic in Arms Regulations; (3) specifically identified as an E.U. Dual Use Item; or (4) on an applicable export control list of a foreign country; (b) prior to engaging in any activities in a Restricted Market, involving individuals ordinarily resident in a Restricted Market or including companies, organizations, or Governmental Authorities from or located in a Restricted Market in each case in connection with this Agreement, each Party must first notify the other Party (which notice, notwithstanding Section 17, shall be addressed to (a) Pluto at gtc@pfizer.com and (b) Spinco at [●]), who will review and, if compliant with Global Trade Control Laws, approve (subject to any appropriate conditions) such activities (such approval not to be unreasonably withheld or delayed), within five (5) Business Days of such notification; provided that (1) to the extent relating to U.S. sanctions or export controls, such notification and approval shall not be required if the activity contemplated would be permissible for U.S. persons subject to U.S. sanctions (including without limitation under a U.S. Department of the Treasury Office of Foreign Assets Control general license), and (2) once notification is made and approval is granted with respect to a specific counterparty in a Restricted Market, further notification and approval will not be required for future transactions or activities with the same counterparty (unless there is a change in circumstances, processes or intermediate parties, including, but not limited to, carriers, or otherwise a change to Global Trade Control Laws relevant to that Restricted Market or counterparty); provided that, notwithstanding the foregoing, neither Party shall undertake any of the activities described in this clause (2) without the prior written approval of the other Party; and -43- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +(c) notwithstanding anything set forth in Section 4.14 to the contrary, for the purposes of any and all packaging and shipping of any goods, software, technology or services pursuant to the activities contemplated under this Agreement, Manufacturer will determine: (i) a classification under relevant import and export laws; (ii) the country of origin; and (iii) a value for customs; + +provided, however, that the Party acting as the importer of record (IOR) or exporter of record (EOR) shall have the right to request a review of any determination contemplated by clause (i), (ii) or (iii) above; provided, further, that if the IOR or EOR (as applicable) disagrees with such determination, then such Party shall maintain the right to refuse to export or import the applicable goods, software, technology or services. 5.2 Manufacturer Covenants. Manufacturer hereby covenants to Customer that: (a) The Facility and all equipment, tooling and molds utilized in the manufacture and supply of Product hereunder by or on behalf of Manufacturer shall, during the Term of this Agreement, be maintained in good operating condition and shall be maintained and operated in accordance with all applicable Laws. The manufacturing and storage operations, procedures and processes utilized in manufacture and supply of Product hereunder (including the Facility) shall be in full compliance with all applicable Laws, including cGMP and health and safety laws. (b) Manufacturer shall perform all of its obligations under this Agreement in compliance with the applicable Laws in the Territory. Manufacturer is in compliance and shall continue to comply, and shall cause its Personnel to comply, with all applicable Laws, including Laws requiring Serialization; provided that, with respect to compliance with Laws requiring Serialization, Customer shall reimburse Manufacturer for all investments made or costs incurred by Manufacturer in connection with any Serialization requirements specific to a given Product or Products (which, for clarity, shall not include Serialization requirements applicable to both Products and other products produced by Manufacturer in the Facility), but only to the extent such costs are reasonable and documented and are directed specifically with respect to a Product or Products. Manufacturer has and shall continue to have, and shall cause its Personnel to have, all professional licenses, consents, authorizations, permits, and certificates, and shall have and shall cause its Personnel to have completed all registrations and made such notifications as required by applicable Law for its performance of the services under this Agreement. (c) Manufacturer shall hold during the Term of this Agreement all licenses, permits and similar authorizations required by any Governmental Authority in the Territory for Manufacturer to perform its obligations under this Agreement. -44- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +(d) Manufacturer shall have good title to all Product supplied to Customer pursuant to this Agreement and shall pass such title to Customer (or its designee) free and clear of any security interests, liens, or other encumbrances. (e) Products furnished by Manufacturer to Customer under this Agreement: (i) shall be manufactured, packaged, labeled, handled, stored and Delivered in accordance with, shall be of the quality specified in, and shall conform upon Delivery to Customer (or its designee) to, the Specifications; (ii) shall be manufactured, packaged, labeled, handled, stored and Delivered in compliance with all applicable Laws including, without limitation, cGMPs, and in accordance with the Quality Agreement, this Agreement and the applicable Facility Addendum; (iii) shall not contain any Product Material that has not been used, handled or stored by or on behalf of Manufacturer in accordance with the Specifications, all applicable Laws, the Quality Agreement, this Agreement and the applicable Facility Addendum; (iv) shall not be adulterated or misbranded within the meaning of Sections 501 and 502, respectively, of the Act or any other applicable Law; and (v) shall, at the time Delivered, have at least a remaining shelf-life as specified in the applicable Facility Addendum. + +Notwithstanding the foregoing clauses (i) through (v) of this Section 5.2(e) or anything else contained in this Agreement or any Facility Addendum or Quality Agreement, Manufacturer shall have no liability under this Agreement (including under Section 4.11(b) or Section 10.1) or any Facility Addendum or Quality Agreement for any Non-Complying Product which is non-complying due to any Non-Complying Customer-Supplied Materials or Non-Complying Buy-Sell Materials. (f) Manufacturer has not and will not directly or indirectly offer or pay, or authorize such offer or payment, of any money or anything of value or improperly or corruptly seek to influence any Government Official or any other Person in order to gain an improper business advantage, and, has not accepted, and will not accept in the future, such a payment. Manufacturer will comply with the Anti-Bribery and Anti-Corruption Principles set forth in Attachment D. (g) Manufacturer shall ensure that it and its Personnel comply with the standard policies, regulations and directives listed on Attachment E and incorporated herein. -45- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +5.3 Manufacturer's Social Responsibility. (a) Manufacturer covenants that it shall not, during the Term of this Agreement (i) use involuntary or underage labor (defined in accordance with applicable Laws) at the Facilities where its performance under this Agreement will occur or (ii) maintain unsafe or unhealthy conditions in any dormitories or lodging that it provides for its employees. Manufacturer agrees that during the Term of this Agreement, it shall promptly correct unsafe or unhealthy conditions in any dormitories or lodging that it provides for its employees. (b) Manufacturer covenants that it will perform its obligations under this Agreement in a manner consistent with all of the Pharmaceutical Industry Principles for Responsible Supply Chain Management, as codified as of the Effective Date at http://www.pharmaceuticalsupplychain.org. (c) Manufacturer shall not use, and shall not allow to be used, any (i) cassiterite, columbite-tantalite, gold, wolframite, or the derivatives tantalum, tin or tungsten that originated in the Democratic Republic of Congo or an adjoining country or (ii) any other mineral or its derivatives determined by the Secretary of State to be financing conflict pursuant to Section 13(p) of the Securities Exchange Act of 1934 ((i)-(ii) collectively, "Conflict Minerals"), in the production of any Product. Notwithstanding the foregoing, if Manufacturer uses, or determines that it has used, a Conflict Mineral in the production of any Product, Manufacturer shall immediately notify Customer, which notice shall contain a written description of the use of the Conflict Mineral, including, without limitation, whether the Conflict Mineral appears in any amount in the applicable Product (including trace amounts) and a valid and verifiable certificate of origin of the Conflict Mineral used. Manufacturer must be able to demonstrate that it undertook a reasonable country of origin inquiry and due diligence process in connection with its preparation and delivery of the certificate of origin. (d) Manufacturer will provide Customer with periodic access, upon reasonable notice, to any of its Facilities where it is performing under this Agreement, to its employees and Records and to any associated dormitories or lodging that Manufacturer provides to its employees, to permit Customer to determine Manufacturer's compliance with this Section 5.3. Customer may exercise its inspection rights under this Section 5.3(d) upon receipt of any information that would suggest to a reasonable Person that Manufacturer is not fulfilling its obligations under this Section 5.3. 5.4 Notice of Material Events. + +Manufacturer will promptly notify Customer of any actual or anticipated events of which Manufacturer is aware that have or would be reasonably expected to have a material effect on any Product or on its ability to manufacture or supply any Product in accordance with the provisions set forth herein, including any labor difficulties, strikes, shortages in materials, plant closings, interruptions in activity and the like. -46- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +5.5 Disclaimer of Warranties. + +EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, NEITHER PARTY MAKES NOR RECEIVES ANY WARRANTY OF ANY KIND, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, INCLUDING WARRANTIES OF MERCHANTABILITY, SUITABILITY OR FITNESS FOR A PARTICULAR PURPOSE, TITLE AND NON-INFRINGEMENT OF ANY FIRMWARE, SOFTWARE OR HARDWARE PROVIDED OR USED HEREUNDER, AND ANY REPRESENTATIONS OR WARRANTIES ARISING FROM COURSE OF DEALING, COURSE OF PERFORMANCE OR TRADE USAGE, AND ALL SUCH REPRESENTATIONS AND WARRANTIES ARE HEREBY EXPRESSLY DISCLAIMED. 6. Environmental Covenants. 6.1 Compliance with Environmental Laws. (a) Manufacturer shall perform all of its obligations herein in compliance with all Environmental Laws and all licenses, registrations, notifications, certificates, approvals, authorizations or permits required under Environmental Laws. (b) Manufacturer shall be solely responsible for all Environmental Liabilities arising from its performance of this Agreement. 6.2 Permits, Licenses and Authorization. (a) Manufacturer shall be solely responsible for obtaining, and shall obtain in a timely manner, and maintain in good standing, all licenses, registrations, notifications, certificates, approvals, authorizations or permits required under Environmental Laws, whether de novo documents or modifications to existing documents, which are necessary to perform the services hereunder, and shall bear all costs and expenses associated therewith. (b) Manufacturer shall provide copies of all material items referenced in Section 6.2(a) to Customer upon request by Customer and shall operate in compliance therewith. (c) Manufacturer shall provide Customer with reasonably prompt verbal notice, confirmed in writing within twenty-four (24) hours, in the event of any major incident, which shall include any event, occurrence, or circumstance, including any governmental or private action, which materially impacts or could materially impact Manufacturer's ability to fulfill its obligations under this Agreement. These include, but are not limited to: (i) material revocation or modification of any of the documents described in Section 6.2(a), -47- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +(ii) any action by Governmental Authorities that may reasonably lead to the material revocation or modification of Manufacturer's required permits, licenses, or authorizations, as listed above, (iii) any Third Party Claim against the management or ownership of the Facility that could reasonably materially impact Manufacturer's obligations under this Agreement, (iv) any fire, explosion, significant accident, or catastrophic Release of Hazardous Materials, or significant "near miss" incident, (v) any significant non-compliance with Environmental Laws and (vi) any environmental condition or operating practice that may reasonably be believed to present a significant threat to human health, safety or the environment. (d) Notwithstanding the requirements noted above, each Party, whether Customer or Manufacturer, is required to create and maintain: (i) required licenses, permits and agreements, including those necessary to affect imports, exports, and activities covered by economic sanctions regulations, including annual agreements for activities involving Restricted Markets; (ii) policies, procedures, controls, and systems to support compliance with Global Trade Control Laws; and (iii) agreements with Customs Brokers, freight forwarders, financial institutions, and other third parties, as necessary. 6.3 Generation of Hazardous Wastes. + +Without limiting other legally applicable requirements, Manufacturer shall prepare, execute and maintain, as the generator of Waste, all registrations, notices, shipping documents and manifests required under applicable Environmental Laws and in accordance therewith. Manufacturer shall utilize only reputable and lawful Waste transportation and disposal vendors, and shall not knowingly utilize any such vendor whose operations endanger human health or the environment. 6.4 Environmental Sustainability Information. + +Manufacturer will disclose to Customer, on an annual basis, its results with respect to any efforts to reduce greenhouse gas emissions, water consumption or the generation of waste associated with the performance of this Agreement, to the extent Manufacturer otherwise prepares such results. 6.5 Environmental and Health and Safety Reviews. (a) Manufacturer covenants that it will, to the Manufacturer's knowledge, completely and accurately disclose to Customer all material environmental and health and safety information regarding its Products (including an obligation to supplement this information, as necessary) during the Term of this Agreement, as reasonably requested by Customer. -48- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +(b) Manufacturer shall permit Customer (at Customer's expense) to conduct reasonable annual reviews of the environmental and health and safety practices and performance of the Facilities with respect to the Products where Manufacturer's performance under this Agreement is occurring; provided that such review shall not include any invasive sampling at such Facilities and shall not unreasonably interfere with Manufacturer's operation of such Facilities. In connection with such reviews, Manufacturer shall reasonably assist in the completion of an environmental health and safety survey of Manufacturer or the scheduling of an environmental health and safety audit of the Facility, as applicable, in each case with respect to the Products. Customer shall share its findings (including any deficiencies) with Manufacturer as soon as practicable, Manufacturer shall have the sole right to report any such deficiencies to third parties and Manufacturer shall use commercially reasonable efforts to correct, at no expense to Customer, such deficiencies in its environmental and health and safety management practices with respect to the Products that are not in compliance with applicable Law or create significant risk to human health or the environment. Manufacturer acknowledges that such reviews conducted by Customer are for the benefit of Customer only; they are not a substitute for Manufacturer's own environmental and health and safety management obligations under this Agreement and accordingly, Manufacturer may not rely upon them. 7. Term; Termination. 7.1 Term of Agreement. + +Unless otherwise provided in the applicable Facility Addendum, this Agreement (a) shall commence on the Effective Date and shall continue for a period of four (4) years from such date (the "Initial Term" of this Agreement), unless sooner terminated pursuant to Section 7.3, 7.4, 7.5, 7.6 or 7.7, and (b) may be extended for up to three (3) additional periods of twelve (12) months (each, an "Extension Period") by written notice given by Customer to Manufacturer not less than twelve (12) months prior to the expiration of the Initial Term or the applicable Extension Period, as the case may be. The Initial Term and all Extension Periods shall be referred to collectively as the "Term" of this Agreement. For the avoidance of doubt, the Term of this Agreement shall continue until all Facility Addenda hereunder expire or otherwise terminate, unless this Agreement or such Facility Addenda are sooner terminated pursuant to Section 7.3, 7.4, 7.5, 7.6 or 7.7. -49- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +7.2 Term of Facility Addendum. + +Unless otherwise provided in the applicable Facility Addendum, each Facility Addendum shall commence on the Effective Date and shall continue for a period of four (4) years from such date (the "Initial Term" of the Facility Addendum), unless extended or terminated pursuant to Section 7.3, 7.4, 7.5, 7.6 or 7.7. A Facility Addendum may be extended for up to three (3) additional periods of twelve (12) months (each, an "Extension Period") by written notice given by Customer to Manufacturer not less than twelve (12) months prior to the expiration of the Initial Term or the applicable Extension Period, as the case may be. The Initial Term and all Extension Periods shall be referred to collectively as the "Term" of the Facility Addendum. 7.3 Termination for Cause. (a) Either Party may terminate this Agreement and the applicable Facility Addendum, on a Product-by-Product basis, with respect to a particular Product, upon written notice to the other Party in the event of a material breach by the other Party of any term of this Agreement or Facility Addendum with respect to such Product, which breach remains uncured for ninety (90) calendar days following written notice to such breaching Party of such material breach. (b) Either Party may terminate this Agreement and the applicable Facility Addendum, on a Facility Addendum-by-Facility Addendum basis, with respect to a particular Facility, upon written notice to the other Party in the event of a material breach by the other Party of any term of this Agreement or Facility Addendum with respect to such Facility, which breach remains uncured for ninety (90) calendar days following written notice to such breaching Party of such material breach. (c) For clarity, in the event that multiple Products are manufactured by or on behalf of Manufacturer under this Agreement in the same Facility, a material breach by Manufacturer of this Agreement or Facility Addendum that is an act or omission specific to one or more Products in a Facility, but not all Products in such Facility, shall give rise to an ability of Customer to terminate this Agreement solely with respect to the affected Product(s) under Section 7.3(a) but shall not give rise to an ability of Customer to terminate the relevant Facility Addendum under Section 7.3(b). 7.4 Termination for Disposition of Facility. + +In the event that Manufacturer or any of its Affiliates, directly or indirectly, sells, assigns, leases, conveys, transfers or otherwise disposes of any Facility (a "Facility Disposition"), then Manufacturer shall immediately notify Customer of such event and Customer shall be entitled for a period of six (6) months after the receipt of such notice to terminate any Facility Addendum with respect to such Facility for cause immediately upon written notice to Manufacturer and, in the event Customer decides not to terminate the Facility Addendum for cause, Customer shall be entitled for a period of two (2) years (or such longer period in order to obtain approval for manufacture from all applicable Governmental Authorities) after -50- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +receipt of such notice to receive Technical Support at Manufacturer's sole cost to enable Customer to orderly transfer production of affected Product or Products to a Customer facility or an alternative facility as designated by Customer; provided that Manufacturer shall notify Customer of any proposed or planned Facility Disposition by Manufacturer or any of its Affiliates as soon as reasonably practicable and in any event no later than the date that is three (3) months prior to the effective date of such Facility Disposition. 7.5 Termination in Event of Insolvency. + +In the event that a Party hereto (a) becomes insolvent, or institutes or has instituted against it a petition for bankruptcy or is adjudicated bankrupt, (b) executes a bill of sale, deed of trust, or a general assignment for the benefit of creditors, (c) is dissolved or liquidated or (d) has a receiver appointed for the benefit of its creditors, or has a receiver appointed on account of insolvency (in the case of clauses (a)-(d), such Party shall be referred to as the "Insolvent Party"), then the Insolvent Party shall immediately notify the other Party of such event and such other Party shall be entitled to (i) terminate this Agreement or any and all Facility Addenda for cause immediately upon written notice to the Insolvent Party or (ii) request that the Insolvent Party or its successor provide adequate assurances of continued and future performance in form and substance acceptable to such other Party, which shall be provided by the Insolvent Party within ten (10) calendar days of such request, and the other Party may terminate this Agreement and any or all Facility Addenda for cause immediately upon written notice to the Insolvent Party in the event that the Insolvent Party fails to provide such assurances acceptable to the other Party within such ten (10) day period. 7.6 Termination for Breach of Anti-Bribery Representation. + +Customer may terminate this Agreement and any and all Facility Addenda effective immediately upon notice to Manufacturer, if Manufacturer (a) breaches any of the representations and warranties set forth in Section 5.2(f) or (b) Customer learns (i) that improper payments are being or have been made or offered to any Government Official or any other Person by Manufacturer or those acting on behalf of Manufacturer with respect to any obligations performed hereunder or (ii) that Manufacturer or those acting on behalf of Manufacturer with respect to the performance of any obligations hereunder has accepted any payment, item, or benefit, regardless of value, as an improper inducement to award, obtain or retain business or otherwise gain or grant an improper business advantage from or to any other Person or entity. Further, in the event of such termination, Manufacturer shall not be entitled to any further payment, regardless of any activities undertaken or agreements with additional Third Parties entered into by Manufacturer prior to such termination, and Manufacturer shall be liable for damages or remedies as provided by this Agreement, at Law or in equity. -51- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +7.7 Termination for Convenience by Customer. (a) This Agreement and/or any or all Facility Addendum (unless otherwise specified in the applicable Facility Addendum) may be terminated on a Product-by-Product basis by Customer immediately upon written notice to Manufacturer, if Customer cannot continue to distribute, use, market or sell such Product supplied under this Agreement or the relevant Facility Addendum without violating any then-current Laws. (b) This Agreement and/or any or all Facility Addenda shall be deemed to be terminated by Customer on a Product-by-Product basis without any further action of either Customer or Manufacturer in the event that Customer fails to order a Product during any rolling eighteen (18) month period; provided that this subsection (b) shall not apply with respect to API as Product. 7.8 Effect of Termination or Expiration. (a) The termination or expiration of this Agreement (whether in its entirety or with respect to any Product or Facility) or any Facility Addendum for any reason shall not release any Party hereto of any liability which at the time of termination or expiration had already accrued to the other Party in respect to any act or omission prior thereto. (b) Upon termination of this Agreement by Customer in whole or in part or upon the termination of any Facility Addendum, in each case, pursuant to Section 7.3, 7.4, 7.5 or 7.6, and on a terminated-Product-by-terminated-Product basis, at Customer's option and pursuant to Customer's instructions, Manufacturer shall provide Customer with sufficient inventory of such terminated Product to ensure business continuity according to then-current terms and pricing (subject to Section 3) until the earlier of: (i) Customer's identification of, and securing of Regulatory Approval for, another supplier of such terminated Product or (ii) unless otherwise set forth in the applicable Facility Addendum as the "Inventory Tail Period" for such Product, a time period that reflects Customer's reasonable needs of such Product as mutually agreed upon by the Parties in good faith. Manufacturer shall take such further action, at Manufacturer's expense, that Customer may reasonably request to minimize delay and expense arising from termination or expiration of this Agreement. For the avoidance of doubt, Manufacturer's obligation to supply Product pursuant to this Section 7.8(b) shall be subject to and governed by the terms of this Agreement, including terms pertaining to Forecasts and Purchase Orders and payment terms. (c) Upon Customer's request at any time during the Term, Manufacturer shall promptly notify Customer of any material contracts, licenses, permits, and other material documents, in each case, that are specific to, and are used solely in connection with, a Product or Facility Addendum and provide copies or access thereto subject to any restrictions on the provision of copies -52- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +or access. Upon termination or expiration of this Agreement in whole or in part or any Facility Addendum, if requested by Customer within ninety (90) days immediately following the effective date of such expiration or termination of this Agreement and pursuant to Customer's reasonable request and instructions, Manufacturer shall use commercially reasonable efforts to, as applicable, make assignments or partial assignments of such material contracts, licenses, permits, and other material documents, as applicable, in each case subject to any restrictions on assignment, or as may otherwise be set forth in any Contract relating thereto. Customer shall reimburse Manufacturer for all out-of-pocket costs reasonably incurred by Manufacturer in activities conducted pursuant to this Section 7.8(c), unless this Agreement has been terminated by Customer pursuant to Section 7.3, 7.4, 7.5 or 7.6, in which case Manufacturer shall bear all such reasonable expenses. (d) The termination or expiration of this Agreement shall not affect the survival and continuing validity of Section 2.10 (Transitional Support) (with respect to Manufacturer's obligations and to the extent Technical Support has been requested prior to, or within ninety (90) days following, the effective date of termination or expiration), Section 3.5 (Invoices and Payment), Sections 4.1, 4.5, 4.6, 4.8, 4.10, 4.11, 4.12 and 4.13 (Manufacturing Standards and Quality Assurance), Section 5 (Covenants), Section 6 (Environmental Covenants), Section 7.8 (Effect of Termination or Expiration), Section 7.9 (Unused Materials), Section 7.10 (Return of Materials, Tools and Equipment), Section 8 (Intellectual Property), Section 10 (Indemnification; Limitations of Liability), Section 11 (Insurance), Section 13 (Confidentiality), Section 15 (Records and Audits), Section 16 (Notices), Section 17 (Miscellaneous), or of any other provision which is expressly intended to continue in force after such termination or expiration. 7.9 Unused Materials. + +In the event of the expiration of this Agreement or termination of this Agreement in whole or in part (including the termination of any Facility Addendum) by Customer in accordance with Section 7.3, 7.4, 7.5 or 7.6, Customer may, at its option within ninety (90) days immediately following the effective date of the expiration or termination of this Agreement, purchase any work in process and/or Product Materials that Manufacturer has purchased exclusively for Customer in accordance with this Agreement for the production of any terminated Product. Customer shall pay Manufacturer's direct cost for works in process, and Manufacturer's purchase price from its suppliers for Product Materials. In the event of the termination of this Agreement by Customer in accordance with Section 7.7 or the termination of this Agreement by Manufacturer in accordance with Section 7.3, 7.4, 7.5 or 7.6, Customer shall purchase at cost all Product Materials purchased in accordance with Customer's Purchase Orders and on reasonable reliance upon Customer's Forecast; provided that Manufacturer uses its reasonable commercial efforts to exhaust existing stocks of such Product Materials prior to the date of -53- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +termination. In the event of the termination or expiration of this Agreement for any other reason, Customer shall have no obligation to purchase any Product Materials. Any Product Materials that are not purchased or required to be purchased by Customer pursuant to this Section 7.9 shall be disposed of or destroyed in accordance with Customer's instructions, which costs shall be borne by Manufacturer. 7.10 Return of Materials, Tools and Equipment. (a) Upon termination or expiration of this Agreement in whole or in part or, with respect to any Product, Facility or any Facility Addendum for any reason whatsoever, at Customer's request, Manufacturer shall, as promptly as practicable given relevant circumstances, deliver to Customer in accordance with Customer's reasonable instructions all Specifications (and copies thereof), artwork, labels, bottles, all premiums and packaging materials purchased by Customer and all Product Materials, Buy-Sell Materials, Customer-Supplied Materials, and equipment, molds, tablet press tooling or proprietary materials in Manufacturer's possession and control that during the Term had, pursuant to this Agreement or a Facility Addendum, either (i) been provided by Customer to Manufacturer, or (ii) purchased by Manufacturer (and reimbursed by Customer), in each case, that are used and held for use exclusively for the manufacture for Customer of Product or Products impacted by such termination or expiration; provided that Manufacturer shall not be so required to deliver any materials, tools or equipment that are fixtures or fittings or any items the removal of which from the Facility using good faith diligent efforts would be reasonably likely to disrupt in any material respect, or cause damage to, the Facility or its operations or any materials, tools or equipment owned, leased or otherwise controlled by Manufacturer or any of its Affiliates or any material expense. At Customer's request, Manufacturer shall, as promptly as reasonably practicable given relevant circumstances and in accordance with Customer's reasonable instructions, remove all such equipment, molds and tablet press tooling from the Facility and make such equipment, molds and tooling available for pickup at the Facility by a carrier designated by Customer. All delivery, removal and transportation costs reasonably incurred in connection with this Section 7.10(a) shall be borne by Customer, except in the event Customer terminates this Agreement pursuant to Section 7.3, 7.4, 7.5 or 7.6, in which case all such reasonable costs shall be borne by Manufacturer. (b) Any Product quarantined at the time of expiration or termination of this Agreement shall be disposed of or destroyed by Manufacturer in accordance with Customer's instructions and at Customer's cost; provided that, to the extent (i) such quarantine is the result of Manufacturer's gross negligence, fraud, willful misconduct or breach of this Agreement or (ii) this Agreement is terminated in whole or in part with respect to such Product (including the termination of the applicable Facility Addendum) by Customer in accordance with Section 7.3, 7.4, 7.5 or 7.6, then Manufacturer shall be responsible for all costs incurred by Manufacturer in connection with disposing and destroying such quarantined Product. -54- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +8. Intellectual Property. 8.1 Customer's Intellectual Property. + +Customer hereby grants to Manufacturer a non-exclusive license during the Term to use any Customer Property and Customer-Owned Improvements and Developments solely in connection with Manufacturer performing its obligations under this Agreement or the Facility Addendum in accordance with the terms hereof or thereof, as applicable. Manufacturer shall not acquire any other right, title or interest in or to the Customer Property or Customer-Owned Improvements and Developments as a result of its performance hereunder, and any and all goodwill arising from Manufacturer's use of any Customer Property or Customer-Owned Improvements and Developments shall inure to the sole and exclusive benefit of Customer. 8.2 Improvements and Developments. (a) Each Party acknowledges and agrees that improvements or modifications to Customer Property may be made by or on behalf of Manufacturer ("Improvements"), and creative ideas, proprietary information, developments, or inventions may be developed under or in connection with this Agreement by or on behalf of Manufacturer ("Developments"), in each case either alone or in concert with Customer or Third Parties. (b) Manufacturer acknowledges and agrees that, as between the Parties, any Improvements or Developments that are specific to and otherwise solely relate to, the manufacturing, processing or packaging of Products (such Improvements and Developments, collectively, "Customer-Owned Improvements and Developments") shall be the exclusive property of Customer, and Customer shall own all rights, title and interest in and to such Customer-Owned Improvements and Developments. Manufacturer agrees to and hereby does irrevocably transfer, assign and convey, and shall cause its Personnel to irrevocably transfer, assign and convey, all rights, title and interest in and to each of the Customer-Owned Improvements and Developments to Customer free and clear of any encumbrances, and Manufacturer agrees to execute, and shall cause its subcontractors and Personnel to execute, all documents necessary to do so. All such assignments shall include existing or prospective Intellectual Property rights therein in any country. -55- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +(c) Customer acknowledges and agrees that, as between the Parties, all Improvements and Developments made by or on behalf of Manufacturer in the conduct of activities under this Agreement or a Facility Addendum other than Customer-Owned Improvements and Developments (such Improvements and Developments, collectively, "Manufacturer-Owned Improvements and Developments") shall be the exclusive property of Manufacturer, and Manufacturer shall own all rights, title and interest in and to such Manufacturer- Owned Improvements and Developments. Customer agrees to and hereby does irrevocably transfer, assign and convey, and shall cause its Personnel to irrevocably transfer, assign and convey, all rights, title and interest in and to each of the Manufacturer-Owned Improvements and Developments to Manufacturer free and clear of any encumbrances, and Customer agrees to execute, and shall cause its Personnel and subcontractors to execute, all documents necessary to do so. All such assignments shall include existing or prospective Intellectual Property rights therein in any country. 8.3 Ownership of Other Property. + +Unless otherwise agreed by the Parties or specified in the Separation Agreement, Customer is the sole owner of any and all tools, specifications, blueprints and designs directly owned and supplied or paid for by Customer (i.e., not any materials that are included in the Price of Product), and Manufacturer shall not use, transfer, loan or publicize any of the above, except as necessary for its performance under this Agreement. 8.4 Limited Right to Use. + +Subject to the provisions of Section 8.1, nothing set forth in this Agreement shall be construed to grant to Manufacturer any title, right or interest in or to any Intellectual Property controlled by Customer or any of its Affiliates. Use by Manufacturer of any such Intellectual Property shall be limited exclusively to its performance of this Agreement. 9. Joint Advisory Committee. 9.1 Formation and Role. + +The Parties shall, as soon as practicable but not later than within ninety (90) days after the Effective Date, form a joint advisory committee (the "Joint Advisory Committee" or "JAC"). The JAC will provide a forum for the good faith discussion of major matters related to this Agreement, including in particular (but not limited to) matters of commercial performance, supply, overall performance, capital investment and business planning (strategy and management), and the transition to Customer-Supplied Materials arrangements contemplated by Section 12.1(f), but also any other items, matters or activities, including with respect to any Facility. -56- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +9.2 Membership; Chairs. (a) Membership. The JAC shall consist of up to five (5) representatives appointed by each Party in writing, or such other number of representatives as the Parties may agree in writing from time to time (each, a "JAC Member"). Either Party may invite any person that is not a JAC Member (including consultants and advisors of a Party) to participate in meetings of the JAC, without a right to participate in the discussions of the JAC, so long as (i) such person is under an appropriate obligation of confidentiality, (ii) the inviting Party provided at least three (3) Business Days' prior notice to the other Party identifying such person and (iii) the non- inviting Party does not reasonably object to such person participating in the discussions of the JAC prior to such meeting. (b) JAC Chairs. The JAC shall be co-chaired by one JAC Member of each Party (each, a "JAC Chair"), to be elected by the respective Party when naming its JAC Members. The JAC Chairs shall cooperate in good faith to: (i) notify the JAC Members of each Party of each JAC Meeting, which notice shall be provided at least thirty (30) calendar days in advance of such meeting (to the extent practicable) with respect to the ordinary quarterly JAC Meetings; (ii) collect and organize agenda items for each JAC Meeting, and circulate such agenda to all JAC Members at least two (2) Business Days prior to each meeting date; provided, however, that any JAC Member shall be free to propose additional topics to be included on such agenda, either prior to or in the course of any JAC Meeting; (iii) preside at JAC Meetings; and (iv) prepare the written minutes of each JAC Meeting and circulate such minutes for review and approval by the JAC Members of each Party, and identify action items to be carried out. 9.3 Meetings. (a) Ordinary JAC Meetings. During the Term of this Agreement, the JAC shall meet on a quarterly basis or as otherwise determined in writing by the Parties, and such meetings may be conducted in person, by videoconference or by telephone conference (each such meeting, a "JAC Meeting"). In-person meetings of the JAC will alternate between appropriate venues of each Party, as reasonably determined by the Parties. The Parties shall each bear all expenses of their respective representatives relating to their participation on the JAC. The members of the JAC also may convene or be polled or consulted from time to time by means of telecommunications, video or telephone conferences, electronic mail or correspondence, as deemed necessary or appropriate. (b) Additional JAC Meetings. Either Party may call an additional meeting of the JAC at any time upon twenty (20) Business Days' prior written notice if such Party reasonably determines that there is a need for discussions at the level of a JAC Meeting on top of the ordinary quarterly JAC Meetings, and reasonably specifies such grounds in its notice to the other Party. -57- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +(c) Provision of Information. Upon the request of the JAC Chairs or at least four (4) members of the JAC, each Party will provide written materials and information relating to matters within the purview of the JAC in advance of a JAC Meeting. In addition, the JAC shall be informed by each Party in good faith about any matters or issues within the purview of the JAC which a Party should reasonably deem to be of high importance for the other Party. 9.4 Areas of Responsibility. + +Subject to the terms of this Agreement, the JAC shall act as a forum to discuss in good faith in particular the following major items, matters and areas of interest: (a) Oversee, review and coordinate the activities of the Parties under this Agreement; (b) Each Facility's overall performance under this Agreement; and (c) Any other major matters, roles, obligations and responsibilities under this Agreement, to the extent any Party reasonably provides such matter to the JAC for discussion. 9.5 Advisory Role; No Decision-Making Authority. (a) Advisory Role. The JAC and its members shall only have an advisory role and shall discuss in good faith and provide to the Parties its opinion on the matters in its purview. The Parties agree to reasonably take into account the opinions and views expressed by the JAC and its members for performing their respective obligations under this Agreement. (b) No Decision-Making Authority. The JAC shall have no decision-making authority over the matters in its purview unless the Parties mutually decide in writing to delegate the decision-making authority on such specific item or matter to the JAC. Moreover, it shall not be within the authority of the JAC to (i) directly impose on either Party or its Affiliates any additional obligation(s) or a resolution on the Parties with respect to any dispute regarding the existence or extent/amount of any obligation, including payments obligations, under this Agreement, or to (ii) amend, modify or waive compliance with this Agreement. 10. Indemnification; Limitations of Liability. 10.1 Indemnification of Customer. (a) Subject to the provisions of this Section 10 and, for clarity, without limiting anything in the Separation Agreement or any other Ancillary Agreements, Manufacturer shall indemnify, defend and hold harmless Customer, its Affiliates and its and their respective directors, officers, managers, members, employees and agents, and each of the heirs, executors, successors and assigns of any of the foregoing (each, a "Customer Indemnified Party") from and against any and all Losses of such Customer -58- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +Indemnified Parties to the extent relating to, arising out of or resulting from any Action of a Third Party arising out of or resulting from any of the following items (without duplication): (i) any breach by Manufacturer or its Personnel of this Agreement or any Facility Addendum; (ii) any injury or death of any Person due to any breach by Manufacturer or its Personnel of this Agreement or any Facility Addendum; (iii) the infringement or misappropriation of a Third Party's Intellectual Property by the use or practice by Manufacturer or its Affiliate of any Product manufacturing process that has been changed (including as to the facility in which such manufacturing process takes place) on or following the Effective Date without the written approval of Customer to make such change; (iv) Manufacturer's supply of Non-Complying Product under this Agreement; or (v) the gross negligence, fraud or willful misconduct of Manufacturer or its Personnel in connection with the performance or non-performance of this Agreement. (b) Notwithstanding the foregoing, Manufacturer shall not be liable for Losses described in Section 10.1(a) to the extent such Losses are: (i) caused by the gross negligence, fraud or willful misconduct of a Customer Indemnified Party in connection with the performance or non-performance of this Agreement; (ii) caused by the breach of any of the terms of this Agreement or a Facility Addendum by a Customer Indemnified Party, including in connection with the performance or non-performance of this Agreement or (iii) subject to Customer's indemnification obligations pursuant to Section 10.2. 10.2 Indemnification of Manufacturer. (a) Subject to the provisions of this Section 10 and, for clarity, without limiting anything in the Separation Agreement or any Ancillary Agreements, Customer shall indemnify, defend and hold harmless Manufacturer, its Affiliates and its and their respective directors, officers, managers, members, employees and agents, and each of the heirs, executors, successors and assigns of any of the foregoing (each, a "Manufacturer Indemnified Party") from and against any and all Losses of such Manufacturer Indemnified Parties to the extent relating to, arising out of or resulting from any Action of a Third Party arising out of or resulting from any of the following items (without duplication): (i) any breach by Customer or its Personnel of this Agreement or any Facility Addendum; (ii) the gross negligence, fraud or willful misconduct of Customer or its Personnel in connection with the performance or non-performance of this Agreement; (iii) the infringement or misappropriation of a Third Party's Intellectual Property by the use or practice by Manufacturer or its Affiliate in performance of this Agreement of any Product manufacturing process that has been changed with the written approval of Customer to make such change; (iv) Customer's supply of Non-Complying Customer-Supplied Materials or Non-Complying Buy- Sell Materials under this Agreement; or (v) the use, sale, offer for sale, import or other commercialization of any Product (including any injury or death of any Person due to any of the foregoing in this clause (v)). -59- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +(b) Notwithstanding the foregoing, Customer shall not be liable for Losses described in Section 10.2(a) to the extent such Losses are: (i) caused by the gross negligence, fraud or willful misconduct of a Manufacturer Indemnified Party in connection with the performance or non-performance of this Agreement; (ii) caused by the breach of any of the terms of this Agreement or any Facility Addendum by a Manufacturer Indemnified Party or (iii) are subject to Manufacturer's indemnification obligation pursuant to Section 10.1. Furthermore, Customer shall not be liable for Losses pursuant to Section 10.2(a)(iii) above to the extent such infringement or misappropriation is caused by Manufacturer's unauthorized use or unauthorized modification of any Customer Property, Customer- Owned Improvements and Developments, Buy-Sell Materials or Customer-Supplied Materials. 10.3 Indemnification Procedures. (a) If, at or following the date of this Agreement, any Person entitled to be indemnified under this Section 10 (the "Indemnitee") shall receive notice or otherwise learn of the assertion by a Person (including any Governmental Authority) who is not a member of the Pluto Group or the Spinco Group of any claim or of the commencement by any such Person of any Action with respect to which the Party from whom indemnification may be sought under this Section 10 (the "Indemnifying Party") (such claim, a "Third-Party Claim"), such Indemnitee shall give such Indemnifying Party written notice thereof as promptly as practicable, but in any event within thirty (30) days (or sooner if the nature of the Third-Party Claim so requires) after becoming aware of such Third-Party Claim. Any such notice shall describe the Third-Party Claim in reasonable detail, including the facts and circumstances giving rise to such claim for indemnification, and include copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party Claim. Notwithstanding the foregoing, the failure of any Indemnitee to provide notice as provided in this Section 10.3(a) shall not relieve an Indemnifying Party of its obligations under this Section 10, except to the extent, and only to the extent, that such Indemnifying Party is materially prejudiced by such failure to give notice in accordance with this Section 10.3(a). (b) An Indemnifying Party may elect (but shall not be required) to defend (and seek to settle or compromise), at such Indemnifying Party's own expense and by such Indemnifying Party's own counsel (which counsel shall be reasonably satisfactory to the Indemnitee), any Third-Party Claim; provided that the Indemnifying Party shall not be entitled to defend such Third-Party Claim and shall pay the reasonable fees and expenses of one separate -60- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +counsel for all Indemnitees if the claim for indemnification relates to or arises in connection with any criminal action, indictment or allegation or if such Third-Party Claim seeks an injunction or equitable relief against the Indemnitee (and not any Indemnifying Party or any of its Affiliates). Within thirty (30) days after the receipt of notice from an Indemnitee in accordance with Section 10.3(a) (or sooner, if the nature of such Third-Party Claim so requires), the Indemnifying Party shall notify the Indemnitee of its election whether the Indemnifying Party will assume responsibility for defending such Third-Party Claim, which election shall specify any reservations or exceptions to its defense. After notice from an Indemnifying Party to an Indemnitee of its election to assume the defense of a Third-Party Claim, such Indemnitee shall have the right to employ separate counsel and to participate in (but not control) the defense, compromise, or settlement thereof, but the fees and expenses of such counsel shall be the expense of such Indemnitee; provided, however, in the event that the Indemnifying Party has elected to assume the defense of the Third-Party Claim but has specified, and continues to assert, any reservations or exceptions in such notice, then, in such case, the reasonable fees and expenses of one separate counsel for all Indemnitees shall be borne by the Indemnifying Party; and provided further that the Indemnifying Party will pay the reasonable fees and expenses of such separate counsel if, based on the reasonable opinion of legal counsel to the Indemnitee, a conflict or potential conflict of interest exists between the Indemnifying Party and the Indemnitee which makes representation of both parties inappropriate under applicable standards of professional conduct. (c) If an Indemnifying Party elects not to assume responsibility for defending a Third-Party Claim, or fails to notify an Indemnitee of its election as provided in Section 10.3(b), then the applicable Indemnitee may defend such Third-Party Claim at the cost and expense of the Indemnifying Party to the extent indemnification is available under the terms of this Agreement. If an Indemnifying Party elects not to assume responsibility for defending a Third-Party Claim, or fails to notify an Indemnitee of its election as provided in Section 10.3(b), then, it shall not be a defense to any obligation of the Indemnifying Party to pay any amount in respect of such Third-Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party's views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or, subject to Section 10.3(d), that such Third-Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability. (d) Neither Party may settle or compromise any Third-Party Claim for which either Party is seeking to be indemnified hereunder without the prior written consent of the other Party, which consent may not be unreasonably withheld, conditioned or delayed, unless such settlement or compromise is solely for monetary damages that are fully payable by the settling or compromising party, does not involve any admission, finding or determination of wrongdoing or violation of Law by the other Party and provides for a full, unconditional and irrevocable release of the other Party from all Liability in connection with the Third-Party Claim. -61- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +10.4 Limitations on Liability. (a) Except in the event of (i) Third Party Claims subject to a Party's indemnification obligations pursuant to Section 10.1, (ii) Third Party Claims subject to a Party's indemnification obligations pursuant to Section 10.2, (iii) the gross negligence, fraud or willful misconduct of a Party or its Personnel, (iv) a Party's willful breach of this Agreement, (v) a breach of Section 13 or (vi) customer liabilities pursuant to, and subject to the limitations set forth in, Section 2.5(e), neither Party's aggregate liability to the other Party (or its Personnel that are indemnitees under Section 10.1 or Section 10.2, as applicable) under this Agreement for the initial twelve (12) month period immediately following the Effective Date, and for any twelve (12) month period thereafter during the Term, shall exceed, on a cumulative basis, the amount that is one and one half (11∕2) times the aggregate amounts paid or payable pursuant to this Agreement in the preceding twelve (12) month period preceding the loss date by Customer to Manufacturer but solely with respect to the supply hereunder of Product (or Products) for which such corresponding liability arose (the "Affected Products") and not any other Products (or if, as of the time the liability arises, this Agreement has not been in effect for twelve (12) months, then the amounts paid or payable by Customer to Manufacturer hereunder during the period from the Effective Date until such time the liability arises, shall be annualized to a full twelve (12) months but solely with respect to the supply hereunder of the Affected Product(s) and not any other Products). (b) NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT TO THE CONTRARY, EXCEPT FOR DAMAGES OR CLAIMS ARISING OUT OF (I) A BREACH OF SECTION 13 OF THIS AGREEMENT, (II) CUSTOMER LIABILITIES PURSUANT TO, AND SUBJECT TO THE LIMITATIONS SET FORTH IN, SECTION 2.5(E), (III) A PARTY'S OR ITS PERSONNEL'S GROSS NEGLIGENCE, FRAUD OR WILLFUL MISCONDUCT, (IV) A PARTY'S WILLFUL BREACH OF THIS AGREEMENT, OR (V) A PARTY'S INDEMNIFICATION OBLIGATION WITH RESPECT TO THIRD PARTY CLAIMS UNDER SECTION 10.1 OR SECTION 10.2, IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY OR ANY INDEMNIFIED PARTY HEREUNDER FOR ANY CONSEQUENTIAL DAMAGES, SPECIAL DAMAGES, INCIDENTAL OR INDIRECT DAMAGES, LOSS OF REVENUE OR PROFITS, DIMINUTION IN VALUE, DAMAGES BASED ON MULTIPLE OF REVENUE OR EARNINGS OR OTHER PERFORMANCE METRIC, LOSS OF BUSINESS REPUTATION, PUNITIVE AND EXEMPLARY DAMAGES OR ANY SIMILAR DAMAGES ARISING OR RESULTING FROM OR RELATING TO THIS AGREEMENT, WHETHER SUCH ACTION IS BASED ON WARRANTY, CONTRACT, TORT (INCLUDING NEGLIGENCE OR STRICT LIABILITY) OR OTHERWISE. -62- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +10.5 Indemnification Obligations Net of Insurance Proceeds and Other Amounts. (a) The Parties intend that any Loss subject to indemnification or reimbursement pursuant to this Section 10 will be net of Insurance Proceeds or other amounts actually recovered (net of any out-of-pocket costs or expenses incurred in the collection thereof) from any Person by or on behalf of the Indemnitee in respect of any indemnifiable Liability. Accordingly, the amount that any Indemnifying Party is required to pay to any Indemnitee will be reduced by any Insurance Proceeds or other amounts actually recovered (net of any out-of-pocket costs or expenses incurred in the collection thereof) from any Person by or on behalf of such Indemnitee in respect of the related Loss. If an Indemnitee receives a payment (an "Indemnity Payment") required by this Agreement from an Indemnifying Party in respect of any Loss and subsequently receives Insurance Proceeds or any other amounts in respect of the related Loss, then the Indemnitee will pay to the Indemnifying Party an amount equal to the excess of the Indemnity Payment received over the amount of the Indemnity Payment that would have been due if the Insurance Proceeds or such other amounts (net of any out-of-pocket costs or expenses incurred in the collection thereof) had been received, realized or recovered before the Indemnity Payment was made. (b) An insurer that would otherwise be obligated to pay any claim shall not be relieved of the responsibility with respect thereto or, solely by virtue of any provisions contained in this Agreement, have any subrogation rights with respect thereto, it being expressly understood and agreed that no insurer or any other Third Party shall be entitled to a "wind-fall" (i.e., a benefit that such insurer or other Third Party would not be entitled to receive in the absence of the indemnification provisions) by virtue of the indemnification provisions hereof. Each Party shall, and shall cause the members of its Group to, use commercially reasonable efforts (taking into account the probability of success on the merits and the cost of expending such efforts, including attorneys' fees and expenses) to collect or recover any Insurance Proceeds that may be collectible or recoverable respecting the Liabilities for which indemnification may be available under this Section 10. Notwithstanding the foregoing, an Indemnifying Party may not delay making any indemnification payment required under the terms of this Agreement, or otherwise satisfying any indemnification obligation, pending the outcome of any Action to collect or recover Insurance Proceeds, and an Indemnitee need not attempt to collect any Insurance Proceeds prior to making a claim for indemnification or receiving any Indemnity Payment otherwise owed to it under this Agreement or any Ancillary Agreement. -63- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +10.6 Additional Matters. (a) Indemnification payments in respect of any Liabilities for which an Indemnitee is entitled to indemnification under this Section 10 shall be paid reasonably promptly (but in any event within sixty (60) days of the final determination of the amount that the Indemnitee is entitled to indemnification under this Section 10) by the Indemnifying Party to the Indemnitee as such Liabilities are incurred upon demand by the Indemnitee, including reasonably satisfactory documentation setting forth the basis for the amount of such indemnification payment, documentation with respect to calculations made and consideration of any Insurance Proceeds that actually reduce the amount of such Liabilities. (b) If (i) a Party incurs any Liability arising out of this Agreement or any Ancillary Agreement; (ii) an adequate legal or equitable remedy is not available for any reason against the other Party to satisfy the Liability incurred by the incurring Party; and (iii) a legal or equitable remedy may be available to the other Party against a Third Party for such Liability, then the other Party shall use its commercially reasonable efforts to cooperate with the incurring Party, at the incurring Party's expense, to permit the incurring Party to obtain the benefits of such legal or equitable remedy against the Third Party. (c) If payment is made by or on behalf of any Indemnifying Party to any Indemnitee in connection with any Third-Party Claim, such Indemnifying Party shall be subrogated to and shall stand in the place of such Indemnitee as to any events or circumstances in respect of which such Indemnitee may have any right, defense or claim relating to such Third-Party Claim against any claimant or plaintiff asserting such Third-Party Claim or against any other Person. Such Indemnitee shall cooperate with such Indemnifying Party in a reasonable manner, and at the cost and expense of such Indemnifying Party, in prosecuting any subrogated right, defense or claim. (d) In the event of an Action in which the Indemnifying Party is not a named defendant, if either the Indemnitee or Indemnifying Party shall so request, the Parties shall endeavor to substitute the Indemnifying Party for the named defendant or otherwise add the Indemnifying Party as party thereto, if at all practicable. If such substitution or addition cannot be achieved for any reason or is not requested, the named defendant shall allow the Indemnifying Party to manage the Action as set forth in this Section 10, and the Indemnifying Party shall fully indemnify the named defendant against all costs of defending the Action (including court costs, sanctions imposed by a court, attorneys' fees, experts fees and all other external expenses), the costs of any judgment or settlement, and the cost of any interest or penalties relating to any judgment or settlement with respect to such Third-Party Claim. -64- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +11. Insurance. 11.1 Requirements to Maintain. During the Term, Manufacturer shall self-insure or shall provide and maintain such insurance coverage, in minimum types and amounts as described below in this Section 11. (a) Any and all deductibles or retentions for such insurance policies shall be assumed by, for the account of, and at Manufacturer's sole risk. (b) To the extent of the liabilities assumed by Manufacturer under this Agreement, such insurance policies of Manufacturer shall be primary and non-contributing with respect to any other similar insurance policies available to Customer or its Affiliates. (c) Manufacturer shall furnish to Customer certificates of insurance (electronic is acceptable), evidencing the required insurance coverage, upon execution of this Agreement and annually, thereafter. 11.2 Amounts and Limits. The insurance required under this Section 11 shall be written for not less than any limits of liability specified herein or as required by applicable Law, whichever is greater. All insurance carriers shall have a minimum of "A-" A.M. Best rating. Manufacturer shall have the right to provide the total limits required by any combination of self-insurance, primary and umbrella/excess coverage; said insurance to include the following: (a) Insurance for liability under the workers' compensation or occupational disease Laws of any state of the United States (or be a qualified self-insurer in those states of the United States) or otherwise applicable with respect to Persons performing the services and employer's liability insurance covering all claims by or in respect to the employees of Manufacturer, providing: (i) Coverage for the statutory limits of all claims under the applicable State Workers' Compensation Act or Acts. If a Facility Addendum will result in exposures under the U.S. Longshore and Harbor Workers' Compensation Act and its amendments (work dockside or on water), the Jones Act (involving seamen, masters and crew of vessels) or the Federal Employers' Liability Act (railroad exposure), coverage shall be extended to include insurance coverages mandated thereby; (ii) Employer's liability insurance with a limit of not less than $1,000,000; (iii) Manufacturer warrants that all of its employees involved in this Agreement are covered by statutory workers' compensation; and -65- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +(iv) Where allowed by Applicable Law, Customer and its Affiliates shall be provided a waiver of subrogation, except for losses due to the sole negligence of Manufacturer. (b) Commercial general liability insurance with the following limits and forms/endorsements: + +Each Occurrence: $2,000,000 (i) Occurrence form including premises and operations coverage, property damage, liability, personal injury coverage, products and completed operations coverage, and transit. (ii) To the extent of Manufacturer's indemnification obligations, Customer and its Affiliates shall be additional insureds via ISO form CG20101185 or its equivalent. (c) Automobile and Truck Liability Insurance: $2,000,000 combined single limit for bodily injury and property damage arising out of all owned, non- owned and hired vehicles, including coverage for all automotive and truck equipment used in the performance of this Agreement and including the loading and unloading of same. (d) Umbrella (excess) liability coverage in an amount not less than $3,000,000 per occurrence and in the aggregate. (e) If Manufacturer has care, custody or control of Customer-Supplied Material, Manufacturer shall be responsible for any loss or damage to it and provide all risk property coverage at full replacement cost for property and at the costs-per-unit as specified in the Facility Addendum for inventory. 12. Customer-Supplied Materials; Buy-Sell Materials; Transition. 12.1 Supply; Rejection; Transition. (a) Customer shall at its own expense supply Manufacturer with the Customer-Supplied Materials identified in the applicable Facility Addendum. Customer shall supply Manufacturer with the Buy-Sell Materials at a price that Customer determines, subject to Section 3.2(c), and communicates to Manufacturer. At Customer's option, the Customer-Supplied Materials and Buy-Sell Materials may be delivered directly from Customer's Third-Party vendor to Manufacturer at the vendor's or Customer's expense. Customer or its vendor shall supply Manufacturer with a copy of the certificate of analysis for the Customer-Supplied Materials and Buy-Sell Materials no later than delivery of the Customer-Supplied Materials or Buy-Sell Materials to Manufacturer. Customer hereby covenants to Manufacturer that each Customer-Supplied Material and Buy-Sell Materials furnished by or on behalf of Customer to Manufacturer or its Affiliate or designee under -66- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +this Agreement will, upon delivery by Customer to Manufacturer pursuant to this Agreement, comply with, and have been used, handled and stored in accordance with, the specifications for such Customer-Supplied Materials or Buy-Sell Materials (as applicable), all applicable Laws, the Quality Agreement, this Agreement and the applicable Facility Addendum and otherwise have no defects. Manufacturer's obligations to manufacture and supply Product under this Agreement are subject to and conditioned upon Customer's timely delivery of Customer-Supplied Material and Buy-Sell Materials in accordance with this Section 12. (b) Manufacturer shall provide to Customer a monthly rolling forecast of its requirements for Customer-Supplied Materials and Buy-Sell Materials based upon Customer's Forecasts for Products, and Manufacturer shall issue to Customer "pro forma" purchase orders for Customer-Supplied Materials and actual purchase orders for Buy-Sell Materials, in each case, according to parameters included in the applicable Facility Addendum, including safety stock and lead time requirements. Manufacturer shall be responsible to receive, sample, store and maintain the inventory of such ordered Customer-Supplied Materials and Buy-Sell Materials at Manufacturer's Facility. (c) Within each calendar month during the Term, Manufacturer will provide a monthly inventory report of Customer-Supplied Materials substantially in the format attached as Attachment C to this Agreement. The Parties acknowledge and agree that the Manufacturer's timely providing the referenced monthly inventory report is a critical component of the Customer's Customer-Supplied Materials management program and further that any such failure on the part of Manufacturer to timely provide such monthly inventory report shall be addressed at the immediately following scheduled JAC Meeting. (d) Manufacturer may reject any Non-Complying Buy-Sell Materials or Non-Complying Customer-Supplied Materials by (i) providing Customer with no less than sixty (60) days' prior written notice of Manufacturer's intention to reject along with the documentation setting forth in reasonable detail the basis for rejection, (ii) meeting with Customer at Customer's request to discuss the basis for the proposed rejection, and (iii) providing Customer with notice of rejection in the event that Manufacturer rejects the subject Non- Complying Buy-Sell Materials or Non-Complying Customer-Supplied Materials (as applicable) at the end of such sixty (60) day period (or such other time frame as the Parties may agree upon). (e) Customer shall submit invoices to Manufacturer upon delivery to Manufacturer or its applicable Affiliate of Buy-Sell Materials, and Manufacturer shall make payments with respect thereto, in accordance with the invoice and payment requirements set forth in Section 3.5, applied correlatively, and the parties shall discuss in good faith further requirements with respect to the supply of Buy-Sell Materials. -67- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +(f) Customer shall use its commercially reasonable efforts to convert all Buy-Sell Materials arrangements to Customer-Supplied Materials arrangements as promptly as practicable after the Effective Date; provided that Customer shall provide updates with respect to such efforts at each JAC Meeting until all such Buy-Sell Materials arrangements shall have been converted to Customer-Supplied Materials arrangements. 12.2 Title and Risk of Loss. (a) Title to the Customer-Supplied Materials supplied by Customer to Manufacturer shall remain with Customer; provided, however, that risk of loss shall pass to Manufacturer at the time Customer-Supplied Materials are delivered to the Manufacturer DDP (Incoterms 2010) at the applicable Facility. Manufacturer shall not use Customer-Supplied Materials for any purposes other than those related to the manufacture of a Product pursuant to this Agreement. (b) The risk of loss or damage to Customer-Supplied Materials during the possession thereof by Manufacturer shall be solely with Manufacturer. (c) Manufacturer shall insure or self-insure the Customer-Supplied Materials and Products while such is in Manufacturer's possession at an agreed-upon value. (d) The title and risk of loss for Buy-Sell Materials shall pass to Manufacturer upon delivery to the Manufacturer DDP (Incoterms 2010) at the applicable Facility. 12.3 Reimbursement for Loss of Customer-Supplied Materials. Manufacturer shall reimburse Customer for excess Customer-Supplied Materials used as a result of Manufacturer's failure to achieve the minimum average yield or usage (as applicable) set forth in the applicable Facility Addendum. During the first quarter of each Fiscal Year during the Term of this Agreement, Manufacturer will report to Customer the actual yield achieved for all Customer-Supplied Materials used during the previous calendar year on a Facility-by-Facility basis. If the achieved yield is lower than the minimum average yield specified in the applicable Facility Addendum on an aggregated basis for all Customer- Supplied Materials for each applicable Facility Addendum, then Manufacturer will reimburse to Customer the actual cost of the excess Customer-Supplied Materials used as set forth in the applicable Facility Addendum. For the avoidance of doubt, (a) rejected batches and all Customer-Supplied Material that is, for any reason other than a determination that such Customer-Supplied Materials are non-conforming, not incorporated into Product delivered hereunder, shall be included in the annual yield calculation and (b) Customer-Supplied Materials for which Manufacturer is responsible for reimbursing Customer pursuant to Section 4.11(b) shall not be included in the annual yield calculation. -68- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +13. Confidentiality. + +The confidentiality obligations of the Parties and their respective Groups with respect to disclosures of information hereunder shall be governed, mutatis mutandis, by Section 6.08, Section 6.09 and Section 6.10 of the Separation Agreement. 14. Supply Chain Security. 14.1 Supply Chain Representations. + +Manufacturer represents, warrants and covenants to Customer that: + +Manufacturer has reviewed its supply chain security procedures and that these procedures and their implementation are, and shall remain during the Term of this Agreement, in accordance with the importer security criteria set forth by the "C-TPAT." Manufacturer represents and warrants that it has developed and implemented, or shall develop and implement within sixty (60) calendar days of its execution of this Agreement, procedures for periodically reviewing and, if necessary, improving its supply chain security procedures to assure compliance with C-TPAT minimum security criteria. 14.2 C-TPAT. + +Manufacturer acknowledges that Customer is a certified member of C-TPAT. As a C-TPAT member, Customer is required to make periodic assessment of its international supply chain based upon C-TPAT security criteria. Manufacturer agrees to conduct and document an annual security audit at each of its Facilities and to take all necessary corrective actions to ensure the continued participation of Customer in C- TPAT. Manufacturer agrees to share with Customer the results of such annual audits and agrees to prepare and submit to Customer a report on the corrective actions taken in response thereto. In addition, Customer may audit Manufacturer's Records and Facilities for the purpose of verifying that Manufacturer's procedures are in accordance with the C-TPAT security criteria, and Manufacturer shall provide Customer with access to Manufacturer's Records and Facilities reasonably necessary for the purpose of conducting such audit. Manufacturer agrees to notify Customer of any event that has resulted in or threatens the loss of its C-TPAT Benefits (if it is a member of the C-TPAT program) or alternatively jeopardizes Customer's retention of its own C-TPAT Benefits. In an effort to secure each part of the supply chain, Manufacturer agrees to work in good faith to become a member of the C-TPAT program, if Manufacturer is organized or incorporated in the United States, Mexico or Canada, or the equivalent supply chain security program criteria administered by the customs administration in Manufacturer's home country if Manufacturer is not organized or incorporated in the United States, Mexico or Canada. -69- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +15. Records and Audits. 15.1 Records. + +Manufacturer will maintain complete and accurate Records. Any Records that are financial in nature such as, but not limited to, time sheets, billing Records, invoices, payment applications, payments of consultants and subcontractors and receipts relating to reimbursable expenses shall be maintained in accordance with applicable Law in the jurisdiction in which the applicable Facility is located. Manufacturer shall maintain such Records for a period equal to the later of (x) three (3) years after the expiration or termination of this Agreement or the applicable Facility Addendum, (y) the expiration of the statute of limitation for the Tax period applicable to such Records, or (z) for such period as otherwise may be required by applicable Law (the "Record Retention Period"). 15.2 Audits. + +Customer or its representatives, including its external auditors, may audit such Records of Manufacturer, including all Records related to Manufacturer's compliance with applicable Laws, at any time during the Term of this Agreement or applicable Facility Addendum or the Record Retention Period, during normal business hours and upon reasonable advance written notice to Manufacturer (but in no event more than one (1) time per year except "for cause"). Manufacturer shall make such Records readily available for such audit. Any Records or information accessed or otherwise obtained by Customer or its representatives in connection with any audit (including any audit pursuant to Section 3.4) shall be deemed Manufacturer's confidential and proprietary Information and each representative of Customer will be subject to non-use and other confidentiality obligations substantially comparable to those set forth herein for Customer. Except as otherwise provided in Section 3.4, if any financial audit reveals that Manufacturer has overcharged Customer, Manufacturer shall reimburse Customer for such overcharge within thirty (30) days of Manufacturer's receipt of the relevant audit results, and in the event that any such overcharge equals an amount equal to or greater than five percent (5%) of the total amounts invoiced during the period under such audit, then Manufacturer shall promptly reimburse Customer for all reasonable Third Party costs and expenses actually incurred in the conduct of such audit. If any financial audit reveals that Customer has underpaid Manufacturer, Customer shall reimburse Manufacturer for such underpayment within thirty (30) days of Customer's receipt of the relevant audit results. For clarity, if there is a conflict between Section 3.4(a) and this Section 15.2 with respect to the review of a Price increase, Section 3.4(a) shall govern and control. -70- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +16. Notices. + +All notices or other communications hereunder shall be deemed to have been duly given and made if in writing and (a) when served by personal delivery upon the Party for whom it is intended; (b) one (1) Business Day following the day sent by overnight courier, return receipt requested; (c) when sent by facsimile; provided that the facsimile is promptly confirmed; or (d) when sent by e-mail; provided that a copy of the same notice or other communication sent by e-mail is also sent by overnight courier, return receipt requested, personal delivery, or facsimile as provided herein, on the same day as such e-mail is sent, in each case to the Person at the address, facsimile number or e-mail address set forth below, or such other address, facsimile number or e-mail address as may be designated in writing hereafter, in the same manner, by such Person: If to Customer: [INSERT NAME] [INSERT ADDRESS] ATTENTION: [INSERT NAME/TITLE] EMAIL ADDRESS: [INSERT E-MAIL ADDRESS] + +with copy (which shall not constitute notice) to: + +[INSERT NAME] [INSERT ADDRESS] ATTENTION: [INSERT NAME/TITLE] EMAIL ADDRESS: [INSERT E-MAIL ADDRESS] + +If to Manufacturer: [INSERT NAME] [INSERT ADDRESS] ATTENTION: [INSERT NAME/TITLE] EMAIL ADDRESS: [INSERT E-MAIL ADDRESS] + +with a copy (which shall not constitute notice) to: + +[INSERT NAME] [INSERT ADDRESS] ATTENTION: [INSERT NAME/TITLE] EMAIL ADDRESS: [INSERT E-MAIL ADDRESS] + +Either Party may, by notice to the other Party, change the addresses and names applicable to such Party given above. 17. Miscellaneous. 17.1 Negotiations of Dispute. + +The dispute resolution procedures set forth in Article VII of the Separation Agreement shall apply mutatis mutandis with respect to any controversy, claim, counterclaim, dispute, difference or misunderstanding arising out of or relating to the interpretation or application of any term or provisions of this Agreement, a Purchase Order or Facility Addendum. Further, the requirement to attempt to resolve a dispute in accordance with this Section 17.1 does not affect a Party's right to terminate this Agreement or a Purchase Order as provided in Section 7 hereof, and neither Party shall be required to follow these procedures prior to terminating this Agreement. -71- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +17.2 Publicity. + +Manufacturer shall not use the name, trade name, service marks, trademarks, trade dress or logos of Customer (or any of its Affiliates) in publicity releases, advertising or any other publication, nor identify Customer as a customer, without Customer's prior written consent in each instance. Customer shall not use the name, trade name, service marks, trademarks, trade dress or logos of Manufacturer (or any of its Affiliates) in publicity releases, advertising or any other publication, without Manufacturer's prior written consent in each instance. Nothing in this Section 17.2 shall or is intended to limit any Party's rights under the Separation Agreement or any Ancillary Agreement. 17.3 Governing Law and Venue. (a) This Agreement and all Actions (whether in contract or tort) that may be based upon, arise out of or relate to this Agreement or the negotiation, execution or performance hereof or thereof shall be governed by and construed in accordance with the Law of the State of Delaware, without regard to any Laws or principles thereof that would result in the application of the Laws of any other jurisdiction. The Parties expressly waive any right they may have, now or in the future, to demand or seek the application of a governing Law other than the Law of the State of Delaware. (b) Each of the Parties hereby irrevocably and unconditionally submits to the exclusive jurisdiction of the Court of Chancery of the State of Delaware or, if such court shall not have jurisdiction, the United States District Court for the District of Delaware, and any appellate court from any appeal thereof, in any Action arising out of or relating to this Agreement or the transactions contemplated hereby, and each of the Parties hereby irrevocably and unconditionally (i) agrees not to commence any such Action except in such courts, (ii) agrees that any claim in respect of any such Action may be heard and determined in the Court of Chancery of the State of Delaware or, to the extent permitted by Law, in such other courts, (iii) waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any such Action in the Court of Chancery of the State of Delaware or such other courts, (iv) waives, to the fullest extent permitted by Law, the defense of an inconvenient forum to the maintenance of such Action in the Court of Chancery of the State of Delaware or such other courts and (v) consents to service of process in the manner provided for notices in Section 16. Nothing in this Agreement will affect the right of any Party to serve process in any other manner permitted by Law. -72- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +(c) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OF THE OTHER ANCILLARY AGREEMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (INCLUDING THE FINANCING). EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (I) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE SUCH WAIVERS, (II) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVERS, (III) IT MAKES SUCH WAIVERS VOLUNTARILY AND (IV) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 17.3(C). 17.4 Relationship of the Parties. + +The relationship hereby established between Customer and Manufacturer is solely that of independent contractors. Manufacturer has no authority to act or make any agreements or representations on behalf of Customer or its Affiliates. This Agreement is not intended to create, and shall not be construed as creating, between Manufacturer and Customer, the relationship of fiduciary, principal and agent, employer and employee, joint venturers, co-partners, or any other such relationship, the existence of which is expressly denied. No employee or agent engaged by Manufacturer shall be, or shall be deemed to be, an employee or agent of Customer and shall not be entitled to any benefits that Customer provides to its own employees. 17.5 Assignment; Binding Effect. (a) Except as otherwise provided in this Section 17.5, neither Party shall assign this Agreement or any rights, benefits or obligations under or relating to this Agreement, in each case whether by operation of law or otherwise, without the other Party's prior written consent (not to be unreasonably withheld, conditioned or delayed). (b) Either Party may assign its rights and obligations under this Agreement to one or more of its Affiliates without the other Party's consent; provided that such Affiliate remains at all times during the Term an Affiliate of such Party; provided, further, that no such assignment shall release such Party from its obligations under this Agreement. -73- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +(c) Customer may, without Manufacturer's consent, assign the rights and obligations of this Agreement (i) on a Product-by-Product basis, to a Third Party in connection with a bona fide transfer, sale or divestiture of all or substantially all of its business to which such Product relates or in the event of such business's spin-off, merger or consolidation with another company or business entity or (ii) to any Third Party which acquires or succeeds to all or substantially all of the assets of the business of Customer to which this Agreement and the Facility Addenda relate (including in connection with such business's spin-off, merger or consolidation with another company or business entity). (d) Subject to Section 7.4, Manufacturer may, without Customer's consent, assign the rights and obligations of this Agreement (i) on a Facility-by-Facility basis, to a Third Party in connection with a bona fide transfer, sale or divestiture of such Facility or (ii) to any Third Party which acquires or succeeds to all or substantially all of the assets of the business of Manufacturer to which this Agreement and the Facility Addendum relates (including in connection with such business's spin-off, merger or consolidation with another company or business entity). (e) Notwithstanding anything to the contrary in this Agreement, neither Party may assign this Agreement in whole or in part to a Restricted Party. (f) In the event of a permitted assignment, this Agreement shall be binding upon and inure to the benefit of the Parties and their respective permitted successors and permitted assigns. Any attempted assignment that contravenes the terms of this Agreement shall be void ab initio and of no force or effect. Notwithstanding anything contained in this Agreement, each Party hereby acknowledges and agrees that the other Party may perform any of its obligations, and exercise any of its rights, under this Agreement, any Facility Addendum and Quality Agreement through any of its Affiliates. 17.6 Force Majeure. + +Subject to Manufacturer's obligations under Section 2.5(a), no Party shall be liable for any failure to perform or any delays in performance, and no Party shall be deemed to be in breach or default of its obligations set forth in this Agreement, if, to the extent and for so long as, such failure or delay is due to any causes that are beyond its reasonable control and not to its acts or omissions, including, without limitation, such causes as acts of God, natural disasters, hurricane, flood, severe storm, earthquake, civil disturbance, lockout, riot, order of any court or administrative body, embargo, acts of Government, war (whether or not declared), acts of terrorism, or other similar causes ("Force Majeure Event"). For clarity, raw material price increases, unavailability of raw materials, and labor disputes shall not be deemed a Force Majeure Event. In the event of a Force Majeure Event, the Party prevented from or delayed in performing shall promptly give notice to the -74- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +other Party and shall use commercially reasonable efforts to avoid or minimize the delay. In the event that the delay continues for a period of at least sixty (60) calendar days, the Party affected by the other Party's delay may elect to (a) suspend performance and extend the time for performance for the duration of the Force Majeure Event or (b) cancel all or any part of the unperformed part of this Agreement or any Purchase Orders. 17.7 Severability. + +If any provision of this Agreement or the application of any provision thereof to any Person or circumstance, is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement shall remain in full force and effect. The Parties further agree that if any provision contained herein is, to any extent, held invalid or unenforceable in any respect under the Laws governing this Agreement, they shall take any actions necessary to render the remaining provisions of this Agreement valid and enforceable to the fullest extent permitted by Law and, to the extent necessary, shall amend or otherwise modify this Agreement to replace any provision contained herein that is held invalid or unenforceable with a valid and enforceable provision giving effect to the intent of the Parties. 17.8 Non-Waiver; Remedies. + +Waiver by any Party of any default by the other Party of any provision of this Agreement shall not be deemed a waiver by the waiving Party of any subsequent or other default, nor shall it prejudice the rights of the other Party. No failure or delay by a Party in exercising any right, power or privilege under this Agreement shall operate as a waiver thereof, nor shall a single or partial exercise thereof prejudice any other or further exercise thereof or the exercise of any other right, power or privilege. + +All remedies specified in this Agreement shall be cumulative and in addition to any other remedies provided at Law or in equity. 17.9 Further Documents. + +Each Party hereto agrees to execute such further documents and take such further steps as may be reasonably necessary or desirable to effectuate the purposes of this Agreement. 17.10 Forms. + +The Parties recognize that, during the Term of this Agreement, a Purchase Order acknowledgment form or similar routine document (collectively, "Forms") may be used to implement or administer provisions of this Agreement. The Parties agree that the terms of this Agreement shall govern and control in the event of any conflict between terms of this Agreement and the terms of such Forms, and any additional or different terms contained in such Forms shall not apply to this Agreement. -75- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +17.11 Headings; Interpretation. + +(a) The captions in this Agreement are for convenience only and shall not be considered a part of or affect the construction or interpretation of any provision of this Agreement. + +(b) The definitions in Section 1 shall apply equally to both the singular and plural forms of the terms defined. + +(c) Unless the context of this Agreement otherwise requires: + +(i) (A) words of any gender include each other gender and neuter form; (B) words using the singular or plural number also include the plural or singular number, respectively; (C) derivative forms of defined terms will have correlative meanings; (D) the terms "hereof," "herein," "hereby," "hereto," "herewith," "hereunder" and derivative or similar words refer to this entire Agreement; (E) the terms "Section" and "Attachment" refer to the specified Section or Attachment of this Agreement and references to "paragraphs" or "clauses" shall be to separate paragraphs or clauses of the Section or subsection in which the reference occurs; (F) the words "include," "includes" and "including" shall be deemed to be followed by the phrase "without limitation"; (G) the word "or" shall be disjunctive but not exclusive; and (H) the word "from" (when used in reference to a period of time) means "from and including" and the word "through" (when used in reference to a period of time) means "through and including"; + +(ii) references to any federal, state, local, or foreign statute or Law shall (A) include all rules and regulations promulgated thereunder and (B) be to that statute or Law as amended, modified or supplemented from time to time; and + +(iii) references to any Person include references to such Person's successors and permitted assigns, and in the case of any Governmental Authority, to any Person succeeding to its functions and capacities. + +(d) Whenever this Agreement refers to a number of days, such number shall refer to calendar days unless Business Days are specified. If any action is to be taken or given on or by a particular calendar day, and such calendar day is not a Business Day, then such action may be deferred until the next Business Day. + +(e) The phrase "to the extent" shall mean the degree to which a subject or other thing extends, and such phrase shall not mean simply "if." + +(f) The terms "writing," "written" and comparable terms refer to printing, typing and other means of reproducing words (including electronic media) in a visible form. + +(g) All monetary figures shall be in United States dollars unless otherwise specified. + +(h) All references to "this Agreement" or any "Facility Addendum" shall include any amendments, modifications or supplements thereto. -76- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +17.12 Rules of Construction. + +The language used in this Agreement shall be deemed to be the language chosen by the Parties to express their mutual intent. The Parties acknowledge that each Party and its attorney has reviewed and participated in the drafting of this Agreement and that any rule of construction to the effect that any ambiguities are to be resolved against the drafting Party, or any similar rule operating against the drafter of an agreement, shall not be applicable to the construction or interpretation of this Agreement. 17.13 Counterparts. + +This Agreement may be executed in two (2) or more counterparts (including by electronic or .pdf transmission), each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Delivery of any signature page by facsimile, electronic or .pdf transmission shall be binding to the same extent as an original signature page. 17.14 Amendments. + +No provisions of this Agreement shall be deemed waived, amended, supplemented or modified by any Party, unless such waiver, amendment, supplement or modification is in writing and signed by the authorized representative of the Party against whom it is sought to enforce such waiver, amendment, supplement or modification. 17.15 Entire Agreement. + +This Agreement, the Separation Agreement, the other Ancillary Agreements, including any related annexes, exhibits, schedules and attachments, as well as any other agreements and documents referred to herein and therein, shall together constitute the entire agreement between the Parties relating to the transactions contemplated hereby and supersede any other agreements, whether written or oral, that may have been made or entered into by or among any of the Parties or any of their respective Affiliates relating to the transactions contemplated hereby. + +[Signature Page Follows] -77- + +Source: UPJOHN INC, 10-12G, 1/21/2020 + + + + + +IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be duly executed and delivered as of the date first written above. UPJOHN INC. PFIZER INC. + +By: By: Name: Name: Title: Title: + +[Signature Page to Manufacturing and Supply Agreement] + +Source: UPJOHN INC, 10-12G, 1/21/2020 \ No newline at end of file diff --git a/full_contract_txt/UsioInc_20040428_SB-2_EX-10.11_1723988_EX-10.11_Affiliate Agreement 2.txt b/full_contract_txt/UsioInc_20040428_SB-2_EX-10.11_1723988_EX-10.11_Affiliate Agreement 2.txt new file mode 100644 index 0000000000000000000000000000000000000000..bb2feae60d7b5530db4c763afdeb6db9f3d9c034 --- /dev/null +++ b/full_contract_txt/UsioInc_20040428_SB-2_EX-10.11_1723988_EX-10.11_Affiliate Agreement 2.txt @@ -0,0 +1,149 @@ +EXHIBIT 10.11 + + NETWORK 1 FINANCIAL CORPORATION + + AFFILIATE OFFICE AGREEMENT + +THIS AGREEMENT is entered into by and between NETWORK 1 FINANCIAL, INC. ("NETWORK 1"), a Virginia Corporation with its principal place of business at 1501 Farm Credit Drive, Suite 1500, McLean, Virginia 22102-5004, and Payment Data Systems, Inc., the Affiliate Office ("AFFILIATE"), a Nevada Corporation with its principal place of business at 12500 San Pedro Suite 120 San Antonio, TX 78216. NETWORK 1 and Affiliate hereby agree as follows: + + RECITALS + +WHEREAS, Network 1 Financial, Inc. ("Network 1") provides through various Member Bank(s) ("Member"), VISA and MasterCard processing and related payment processing services ("Services") to merchant(s) ("Merchant(s)") in accordance with the terms of certain Agreement (s) between Network 1, Member and other settlement/transaction processing providers; and + +WHEREAS, the Network 1 desires to locate individuals to market Services as Contractor(s) (the "Contractors") of Network 1; + +WHEREAS, Affiliate desires to establish an "Affiliate Office" on behalf of Network 1 and Affiliate to market the Services of Network 1 and its subsidiaries and to locate Contractors on behalf of Network 1, Member, and Affiliate and to provide a "Local Office" for such Contractors on the terms and for the consideration set forth herein; And + +WHEREAS, Affiliate requires a referral arrangement while Affiliate is negotiating an ISO sponsorship agreement with Network 1 and Harris Bank and this Agreement shall govern the agreement between the parties until such time that the ISO sponsorship agreement has been approval and executed in which case the Processing Agreement, ISO sponsorship Agreement, and Three Party Agreement will govern the relationship and this Agreement shall be terminated without penalty or prejudice; + +NOW, THEREFORE, in consideration of the foregoing and for the mutual promises set forth herein, the parties hereby agree as follows: + + ARTICLE I [OBLIGATIONS OF AFFILIATES] + +OBLIGATIONS OF AFFILIATES + +1.01 CONTRACTORS. Affiliate shall use its best efforts to market and sell to commercial businesses the Services of Network 1 and Network 1's subsidiaries and to locate individuals who are willing and capable of acting as Contractors of Network 1 and Affiliate subject to the approval of all such individuals by Network 1 as set out in Section 2.01 [CONTRACTORS]. All such Contractors must process Merchant applications and transactions exclusively through Network 1. Network 1 consents to waive said exclusivity requirement with respect to specific Merchants in the event Network 1 (i) is unable to process for such specific Merchant, and (ii) the declined Merchant is not accepted for processing by a provider that Network 1 designates for specific Merchant's that are declined by Network 1 ("B Bank Source"). Affiliate shall disclose to Network 1 all information known to Affiliate with respect to the background, character, employment history, business experience and other information regarding each prospective Contractor relevant to Network 1's determination whether to accept or not accept each prospective Contractor. + +1.02 LOCAL OFFICE (AFFILIATE OFFICE). Affiliate shall locate, establish and maintain such offices (the "Local Office"), as it deems necessary for use by all Contractors identified by Affiliate and accepted by Network 1. Network 1 expressly agrees that Affiliate shall not be geographically restricted in its establishment of such offices. Local Office has met the satisfaction of Network 1 in terms of space, quality, appearance, equipment, supplies, office hours, support staff, working conditions, and other factors materially affecting the working conditions of its Contractors. All Local Offices shall bear signs, emblems and other insignia, including a telephone number, indicating that the office is in fact an office of Network 1 subject to the conditions of 4.02. However, all leases, utility listing, telecommunication, furniture and equipment expense, employment contracts for support personnel and other contracts relating to the operation of the Local Office shall be in the name of the Affiliate and shall be the sole responsibility of the Affiliate. + +1.03 REQUIRED REGISTRATION. All of the Contractors located by Affiliate must also be registered representative through Network 1 pursuant to the registration documents noted on Exhibit D. + +Source: USIO, INC., SB-2, 4/28/2004 + + + + + +1.04 PURCHASE AND LEASE OF EQUIPMENT. All equipment and software sold, leased or otherwise provided by Affiliate to Merchants and Commercial Businesses (whether sold directly, through Contractors, or leasing companies) relating to any services provided by Network 1 may be purchased from Network 1. Network 1 agrees to sell such Equipment and Software to Affiliate at prices pursuant to a price list established by Network 1 and provided to the Affiliate. The Affiliate shall be responsible for and hereby guarantees the payments of all amounts owed to Network 1 with respects to the purchase of Equipment and Software from Network 1 by merchant or commercial business. + +1.05 NETWORK 1 TO APPROVE ALL MERCHANTS AGREEMENTS. Affiliate agrees to submit all Merchant Agreements procured by Affiliate in accordance with this Agreement to Network 1. Network 1 agrees to review and approve or decline all Merchant Agreements submitted by Affiliate to Network 1 in accordance with Network 1's approval policy. Affiliate acknowledges that approval of a Merchant creates a customer relationship between Bank and the Merchant, which involves, among other things, the collection and disbursement of funds to process and settle Merchant Transactions. Bank and Network 1 shall, in its sole discretion, make the final decision as to whether or not approve or decline any Merchant Agreement submitted to Bank in accordance with this Agreement. Network 1 agrees to make reasonable efforts to review and approve or decline all Merchant Agreements submitted to Network 1. + +1.06 RESTRICTED MERCHANTS AND MERCHANT ACTIVITIES. Affiliate shall market only to bona fide and lawful retail, MO/TO, and Internet businesses, all in accordance with Merchant Program Standards established by Network 1. Affiliate shall not engage in factoring or laundering or promote the same. Factoring or laundering, for purpose of this Agreement, means the processing or attempted processing of Merchant Transactions through a Merchant Account other than that which is the Merchant Account of the Merchant processing or attempting to process the Merchant Transaction. At the Affiliate request, a boarded Merchant may be terminated from services so long as good reason exists. + + ARTICLE II [RIGHTS OF NETWORK 1] + +RIGHTS OF NETWORK 1 + +2.01 CONTRACTORS. Network 1 shall have the right, at its discretion, to accept, not accept, terminate or otherwise deal with any individuals located by Affiliate pursuant to Section 1.01 [CONTRACTORS]. All individuals identified by Affiliate shall be subject to the rules imposed by Network 1, VISA, MasterCard, NACHA, and the Member bank ("Member") utilized by Network 1, including rules pertaining to qualification disqualification, conduct and otherwise, and shall agree to enter into, and shall in fact enter into, a three party Contractor Agreement in the form attached hereto as Exhibit 1 as amended from time to time. + +2.02 LOCAL OFFICE. Network 1 shall have the right to inspect the Local Offices during normal business hours to insure compliance by Affiliate with is obligations pursuant to Section 1.02 [LOCAL OFFICE (AFFILIATE OFFICE)]. + +2.03 RETENTION OF CONTRACTORS. In the event that this contract between Network 1 and Affiliate is terminated for any reason, the Contractors located by Affiliate shall remain Contractors of Network 1. + +(A) RIGHT OF FIRST REFUSAL. If during the term of this Agreement for any renewal of this Agreement (the "Right of First Refusal Period"), Affiliate shall receive (i) any Bona Fide Offer to purchase the revenue due Affiliate under this Agreement or Affiliate's company through an asset purchase or merger (in which case Network 1 shall be subordinate to the Checkfree first refusal right), or (ii) a Bona Fide Offer to acquire or merge with or into Affiliate (in which case Network 1 shall be subordinate to the Checkfree first refusal right), Affiliate shall immediately give written notice (the "Offer Notice") to Network 1 of the terms and conditions of the Bona Fide Offer, including without limitation the price. Network 1 shall have the exclusive right of first refusal to purchase all or any part of the revenue due Affiliate or acquire Affiliate (as the case may be) on the same terms and conditions as the Bona Fide Offer. If Network 1 desires to exercise its rights under this Section it will give written notice to Affiliate within 15 business days of receipt of the Offer. The failure by Network 1 to exercise its rights within the 15-day period shall be deemed a waiver of such right. Any changes in the terms of the Bona Fide Offer as well as any subsequent Bona Fide Offer received by Affiliate shall require full compliance by Affiliate with the procedures in this Section. (b) CLIENT shall have the right to withdraw ("Transfer") Merchants from the Merchant Program, provided (i) that CLIENT shall have given 120 days written notice to NET1, (ii) that Affiliate is not in, and has not breached any terms of this Agreement, (iii) NW1 has waived its rights in Section 2.03 (a) [RETENTION OF CONTRACTORS] (iv) 18 months have lapsed under this Agreement and (v) Affiliate pays the applicable Exit Fee as defined in section 7.6 (c) below. NET1 agrees that it shall use its reasonable efforts to cause the prompt and orderly Transfer of all Merchants to the processor or processors selected by Affiliate. Affiliate agrees that in + +Source: USIO, INC., SB-2, 4/28/2004 + + + + + +addition to the Exit Fee, all out of pocket and reasonable reimbursement of staff expenses shall be paid prior to the Transfer of the Merchants from NET1 or Harris Bank. (c) The Exit Fee shall be paid by Affiliate immediately prior to the assignment or Transfer of Merchants and/or its net revenue. The amount of the Exit Fee during and following the termination of this Agreement shall be defined as the following: (1) the aggregate sum, per transferring merchant, equal to eighteen (18) months net recurring revenue normally paid to Affiliate under the compensation terms of this Agreement to a maximum of $250,000. + + ARTICLE III [COMPENSATION] + +COMPENSATION + +3.01 AMOUNT. As compensation for Affiliate's services hereunder, Network 1, or an affiliate, shall pay to Affiliate the following (the "Affiliate's Fee"): A. The surplus funding amount after costs noted in Exhibit A based on all Merchant applications obtained for Equipment and Products sold or leased by Affiliate or Contractors located by Affiliate pursuant to Section 1.01 [CONTRACTORS]. Affiliate shall receive the buy rate with revenue share as noted in Exhibit A. B. Affiliate acknowledges and agrees that all merchants and subscribing businesses referred by Affiliate are a party to a contract with Network 1 and it's Member bank and that Network 1 and the Member bank has a direct contractual relationship with the merchants and subscribing businesses. Network 1 acknowledges and agrees that Affiliate has certain rights to residual revenue as specifically defined in this agreement. Affiliate acknowledges and agrees that it has no claims or rights of ownership over Merchants and subscribing businesses, Unless ISO agreement is consummated or Network 1 does not approve Affiliate or Network 1 cancels Affiliate and that it is a service provider to a customer of Network 1 (namely Merchants and subscribing businesses). In such case, Affiliate shall have the right to Transfer accounts in accordance with Section 2.03 (b) [RETENTION OF CONTRACTORS] and 2.03 (c). The Affiliate's Fees outlined in Exhibit A attached hereto and incorporated herein shall be subject to modification by Network 1, at its discretion, upon the giving of thirty-days (30) prior written notification. + +3.02 PAYMENT. The Affiliate's Fee payable pursuant to this agreement shall be payable as outlined in Exhibit A. All payments to Affiliate are subject to Network 1 receipt of all amounts payable to Network 1 by the Member Bank with respect to the transaction giving rise to Affiliate's Fee. Network 1 shall have no liability with respect to the payment of such Affiliate's Fee (for any specific Merchant) under Section 3.01 [AMOUNT] unless and until Network 1 receives the above referenced payment for Merchant. In the event Merchant rejects fees for any reason, the fees due to Affiliate shall not be due and only payable upon Network 1's receipt of such payment. Payments will be made on or before the 25th of each calendar month. + +3.03 LOSSES. All losses or charges arising from acts or omissions of the Affiliate, Contractors located by the Affiliate, or arising from transactions, chargebacks, lost revenues due to account cancellation or rejected fee collections, acts or omissions of Merchants obtained by Contractors located by Affiliate shall be borne as set out in Exhibit C. + + ARTICLE IV [RESTRICTIONS ON AFFILIATE] + +RESTRICTIONS ON AFFILIATE + +4.01 RESTRICTIONS. Affiliate shall not, without the express written consent of Network 1: i. Contact or otherwise deal directly with, VISA, MasterCard or the Member Bank; or ii. Make any representations with respect to Network 1, VISA, MasterCard or the Member Bank; or iii. Make contact with or contract with any vendor of Network 1 or its subsidiaries including other Affiliate's, direct sponsored ISO/MSP's of Network 1/Member Bank, or any merchants currently processing with Network 1 or Member Bank. iv. Network 1 expressly understands and gives permission to Affiliate to contact any organization that Affiliate deems necessary to implement its ISO program. + +4.02 NETWORK 1 NAME USAGE. Affiliate shall use the Network 1 name in Relationship to all Bankcard marketing activity as required by the rules of VISA USA, International and MasterCard International. Affiliate acknowledges that the use of the Network 1 name is on a non-exclusive basis and further agrees to cease using Network 1 name, including but not limited to logo(s) and insignia(s) at the written request of Network 1. In the event this contract terminates for any reason, Affiliate shall immediately cease using the Network 1 name. The insignia, logo's, Service Marks, trademarks and name of Network 1 are the + +Source: USIO, INC., SB-2, 4/28/2004 + + + + + +absolute and sole right of Network 1 Financial Corporation, a Virginia Corporation. + + ARTICLE V [TERM AND TERMINATION] + +TERM AND TERMINATION + +5.01 TERM. The term ("Term") of this Agreement shall be for one hundred eighty days (180) from the date set forth below unless Network 1 or Visa or MasterCard or Harris Bank doesn't approve Affiliate's ISO application, in which case, the Term will be 3 years. This Agreement will automatically renew for successive one-year terms unless terminated by either party by providing the other with 30 days written notice that this Agreement will not be renewed or Affiliate enters into a Processing agreement with Network 1 and an ISO Sponsorship agreement with Harris Bank in which case this Agreement will automatically terminate concurrent with the execution of such agreements. + +5.02 TERMINATION. Agreement may be terminated prior to the conclusion of the Term by giving written notice of termination: A. By either party as a result of default by the other party under this Agreement and failure to cure said default within thirty (30) days after notice of said default is given. B. By either party in the event of insolvency, receivership, voluntary or involuntary bankruptcy or an assignment for the benefit of creditors of or by the Affiliate other than in the ordinary course of business. However, Affiliate may pledge or otherwise collateralize assets for the purpose of securing commercial loans or lines of credit in the ordinary course of business provided that such pledge is subordinate to an security interest associated with the Merchant accounts and/or losses from such accounts. C. By Affiliate in the event of any changes in the Affiliate's Fee (other than direct pass through increases related to Visa and MasterCard interchange, fees, assessments and dues, processor communication costs, and other direct increases including terminal hardware). D. By Network 1, for cause. For purpose hereof; "cause" shall consist of (i) fraud, intentional misrepresentation or negligence by Affiliate or any Contractor located by Affiliate in compiling or providing any information submitted to or relied on by Network 1 to Network 1, whether or not such fraud or misrepresentation is based on a misstatement, omission, a substantive fact, or data; (ii) intentional violations by the Affiliate or any Contractor(s) located by Affiliate of any of the rules or regulations of VISA, MasterCard, the Member Bank or Network 1; and (iii) the providing of vendor services or merchant services by Affiliate or Contractor(s) located by Affiliate which are competitive with Network 1 or without the prior written consent of Network 1, contrary to Section 1.01 [CONTRACTORS] and IV, violation of any clause of Network 1 Affiliate Office Agreement and failure to cure such violation within 30 days of notification E. By Network 1 in the event any provision of the Sales Certificate or the Code of Ethics is in breach by the Affiliate or Contractor(s) located by Affiliate. F. Affiliate enters into a Processing agreement with Network 1 and an ISO Sponsorship agreement with Harris Bank in which case this Agreement will automatically terminate concurrent with the execution of such agreements. If this Agreement is terminated for cause, all rights of the Affiliate to future payments hereunder shall immediately terminate and Transferability will remain in place in accordance with Section 2.03 (b) [RETENTION OF CONTRACTORS] and 2.03 (c). + +5.03 EFFECT OF TERMINATION. Upon termination of this Agreement, except in the event of termination due to an uncured default by Affiliate pursuant to Section 5.02 [TERMINATION]A, Network 1 shall continue to pay to the Affiliate the Affiliate's Fee described in Section 3.01 [AMOUNT]B for so long as Network 1 continues to process transactions of the Merchants in accordance with Schedule B attached hereto and Affiliate continues to maintain the merchant accounts, provided, however, that no such Affiliate's Fees shall be earned or paid for any calendar month in which the Affiliate's Fee does not exceed $500. Upon termination due to an uncured default by Affiliate, or termination for cause pursuant to Section 5.02 [TERMINATION]D all Affiliates fees shall cease to be accrued and paid immediately upon the occurrence of said event. Additionally, upon termination of this contract for any reason, all merchants recruited by Affiliate on behalf of Network 1 for any product offered through Network 1, Affiliate shall not approach, rewrite, pursue, or contract with any current client for the purpose of obtaining said client as a new customer for Affiliate or any competing entity the Affiliate may be in contract with. Such restriction shall also apply to Affiliate's past, current and future officers, directors, sales representatives, and Contractors. If terminated for cause Affiliate is responsible for any expense incurred by Network 1 for investigating incidents, attorney fees, fines, and administration expense. + + ARTICLE VI [INDEPENDENT CONTRACTOR] + +INDEPENDENT CONTRACTOR + +Source: USIO, INC., SB-2, 4/28/2004 + + + + + +6.01 NO EMPLOYER-EMPLOYEE RELATIONSHIP. Nothing in this contract or its fulfillment is intended to create an employer-employee relationship between Affiliate and contractors located by Affiliate and Network 1. You must not take a position contrary to your status as an independent contractor. YOU agree to accept the responsibilities placed on an independent contractor by federal and state law, regulation, and rule or otherwise. + +6.02 MANNER & MEANS OF WORK CONDUCT. You decide when and where, as well as the manner and means by which you conduct your work activities. You acknowledge that you set your business hours. + +6.03 BUSINESS RESPONSIBILITY. You shall be responsible for and pay all expenses and fees incurred by you, including but not limited to your business overhead, transportation, state and federal income taxes, self-employment tax, unemployment tax and workers' compensation. You are responsible for and shall pay all taxes, duties, assessments and governmental charges, now or in the future, related to carrying out your obligations under this contract and or payments made to you by Network 1. + + ARTICLE VII [INDEMNIFICATION] + +INDEMNIFICATION + +7.01 AFFILIATE. Affiliate hereby agrees to indemnify and hold harmless Network 1, VISA, MasterCard and the Member Bank from and against any loss, cost or damage (including reasonable legal fees and court costs) incurred by Network 1, VISA, MasterCard and the Member Bank as a result of Affiliate's failure to comply with the terms of this Agreement, Affiliate's misrepresentation with respect to this Agreement or Affiliate's knowing or negligent misrepresentation with respect to Contractors. + +7.02 NETWORK 1. Network 1 hereby agrees to indemnify and hold harmless Affiliate from and against any loss, cost or damage (including reasonable legal fees and court costs) incurred by Affiliate as a result of Network 1's failure to comply with the terms of this Agreement. + + ARTICLE VIII [MISCELLANEOUS] + +MISCELLANEOUS + +8.01 NOTICES. All notices required hereunder shall be in writing and delivered in person, by e-mail, facsimile, Federal Express, UPS, or by certified or registered mail, return receipt requested, postage prepaid. Such notices shall be addressed as follows: To Network 1 To Affiliate Network 1 Financial Payment Data Systems 1501 Farm Credit Drive 12500 San Pedro, Suite 120 Suite 1500 San Antonio, TX 78216 McLean, Virginia 22102-5004 FAX: 210.249.4130 All notices shall be deemed given when delivered in person or upon depositing said notice in the United States mail with proper postage affixed thereto. + +8.02 NON-EXCLUSIVITY. Affiliate's rights to locate Contractors hereunder shall not be exclusive. It is expressly contemplated and understood that Network 1 will utilize other persons and companies to locate Contractors. + +8.03 AMENDMENT. Except as otherwise provided herein, this Agreement and the Schedules hereto may not be amended, altered or modified except in writing executed by all parties hereto. + +8.04 BENEFITS AND ASSIGNMENTS. This agreement may be assigned or delegated, in whole or in part, by NETWORK 1 without the prior written consent of the other party herein. This agreement may not be assigned or delegated by Affiliate without prior written consent from Network 1. Such consent shall not be unreasonably withheld. + +8.05 GOVERNING LAW. All disputes or claims by Payment Data Systems hereunder shall be resolved by arbitration in McLean, Virginia, pursuant to the rules of the American Arbitration Association. All disputes or claims by NETWORK 1 hereunder shall be resolved by arbitration in San Antonio, Texas, pursuant to the rules of the American Arbitration Association. + +8.06 ARBITRATION. All disputes or claims hereunder shall be resolved by arbitration in McLean, Virginia, pursuant to the rules of the American Arbitration Association. + +8.07 SEVERABILITY. The illegality, invalidity or unenforceability of any provision of this Agreement shall not affect the remainder of this Agreement. 8.08 ENTIRE AGREEMENT. This Agreement and the attached Schedules, Exhibits and Addendums hereto contain the entire understanding of the parties hereto and + +Source: USIO, INC., SB-2, 4/28/2004 + + + + + +supersede all prior agreements with respect to the subject of this Agreement. EXECUTED this ________ day of ______________________, in the year ____________. Network 1 Affiliate By: ______________________________________ By: ________________________________________ Authorized Representative Authorized Representative + +Source: USIO, INC., SB-2, 4/28/2004 \ No newline at end of file diff --git a/full_contract_txt/VALENCETECHNOLOGYINC_02_14_2003-EX-10-JOINT VENTURE CONTRACT.txt b/full_contract_txt/VALENCETECHNOLOGYINC_02_14_2003-EX-10-JOINT VENTURE CONTRACT.txt new file mode 100644 index 0000000000000000000000000000000000000000..3ffeda39fc9b57727b61ba3519afca627866dc7a --- /dev/null +++ b/full_contract_txt/VALENCETECHNOLOGYINC_02_14_2003-EX-10-JOINT VENTURE CONTRACT.txt @@ -0,0 +1,949 @@ +EXHIBIT 10.3 + + JOINT VENTURE CONTRACT + + CHAPTER 1 GENERAL PROVISIONS + + In accordance with the Law of the People's Republic of China on Joint Ventures Using Chinese and Foreign Investment (the "Joint Venture Law") and other relevant Chinese laws and regulations, Fengfan Group Limited Liability Company and Valence Technology Inc., in accordance with the principle of equality and mutual benefit and through friendly consultations, agree to jointly invest to establish a joint venture enterprise in Baoding City, Hebei Province of the People's Republic of China. + + CHAPTER 2 PARTIES TO THIS CONTRACT + +Article 1 Parties to this Joint Venture Contract + +1. Baoding Fengfan Group Limited Liability Company (hereinafter referred to as Party A), established and existing under the laws of the People's Republic of China ("PRC"), registered with the No. 1306001000338 Business License in China. + + Legal address: 8 Fuchang Road, Baoding City, Hebei Province, PRC + + Legal Representative of Party A: + + Name: Mengli Chen + + Position: CHAIRMAN AND GENERAL MANAGER + + Nationality: Chinese + +2. Valence Technology, Inc., (hereinafter referred to as Party B), established and existing under the laws of the State of Delaware in the United States of America ("USA"). + + Registered address: 301 Conestoga Way, Henderson, Nevada 89015, USA + + Legal Representative of Party B: + + Name: Stephan B. Godevais + + Position: CHAIRMAN AND CEO + + Nationality: United States of America + +3. Each of the Parties hereby represents and warrants to the other Party that, as of the date hereof and as of the Effective Date: + + Page 1 + + (1) such Party is duly organized, validly existing and in good standing under the laws of the place of its establishment or incorporation; + + (2) such Party has all requisite power and approval required to enter into this Contract and, upon the Effective Date, will have all requisite power and approval to perform fully each and every one of its obligations hereunder; + + (3) such Party has taken all internal and corporate actions necessary to authorize it to enter into this Contract and its representative whose signature is affixed hereto is fully authorized to sign this Contract and to bind such Party thereby; + + (4) upon the Effective Date, this Contract shall be legally binding on such Party; + + (5) neither the signature of this Contract nor the performance of its obligations hereunder will conflict with, or result in a breach of, or constitute a default under, any provision of the Articles of Association (in the case of Party A) or the Certificate of Incorporation or By-Laws (in the case of Party B) of such Party, or any law, regulation, rule, authorization or approval of any government agency or body, or of any contract or agreement, to which such Party is a party or subject; + + (6) no lawsuit, arbitration, other legal or administrative proceeding, or governmental investigation is pending, or to the best of such Party's knowledge threatened, against such Party that would affect in any way its ability to enter into or perform this Contract; and + + (7) all documents, statements and information of or derived from any + + + + + + governmental body of China in the possession of such Party relating to the transactions contemplated by this Contract which may have a material adverse effect on such Party's ability to fully perform its obligations hereunder, or which if disclosed to the other Party, would have a material effect on the other Party' willingness to enter into this Contract, have been disclosed to the other Party, and no document previously provided by such Party to the other Party contains any untrue statement of material fact or omits to state any material fact necessary in order to make the statements contained therein not misleading. + + CHAPTER 3 DEFINITIONS + +Unless otherwise provided herein, the following words and terms used in this Contract shall have the meanings set forth below: + +Article 2 + +"Affiliate" means, in relation to Party A, any enterprise or other entity which, directly or indirectly, controls, or is controlled by, Party A; the term "control" meaning ownership of fifty percent (50%) or more of the registered capital or voting stock or the power to appoint the general manager, factory chief or other principal person in charge of an enterprise or other entity. + + Page 2 + +"Affiliate" means, in relation to Party B, any company which, through ownership of voting stock or otherwise, directly or indirectly, is controlled by, under common control with, or in control of, Party B; the term "control" meaning ownership of fifty percent (50%) or more of the voting stock or the power to appoint or elect a majority of the directors or the power to direct the management of a company. + +Article 3 + +"Articles of Association" means the Articles of Association of the Joint Venture Company signed by Party A and Party B simultaneously with this Contract in Baoding, People's Republic of China. + +Article 4 + +"Board of Directors" means the board of directors of the Joint Venture Company. + +Article 5 + +"Business License" means the business license of the Joint Venture Company issued by the State Administration for Industry and Commerce or the competent local Administration for Industry and Commerce. + +Article 6 + +"CEO" means the general manager of the Joint Venture Company. "Deputy CEO" means the deputy general manager of the Joint Venture Company. + +Article 7 + +" China" or "PRC" means the People's Republic of China. + +Article 8 + +"Company Establishment Date" means the date of issuance of the Business License. + +Article 9 + +"Contract Term" means the term of this Contract as set forth in Chapter 18, including any extension thereof. + +Article 10 + +"Effective Date" means the effective date of this Contract, which shall be the date on which this Contract and the Articles of Association have been approved by the Examination and Approval Authority. + + Page 3 + +Article 11 + +"Examination and Approval Authority" means the Ministry of Foreign Trade and Economic Co-operation or other foreign trade and economic department with authority to approve this Contract and the Articles of Association. + +Article 12 + +"Plant" means [definition to be added]. + +Article 13 + + + + + +"Joint Venture Company" means [FengFan - Valence Battery Company, Ltd.], the Sino-foreign equity joint venture limited liability company formed by Party A and Party B pursuant to this Contract. + +Article 14 + +"Joint Venture Products" means technologically advanced batteries, including but not limited to lithium phosphate batteries, lithium cobalt oxide batteries and lithium manganese oxide batteries. + +Article 15 + +"Management Personnel" means the Joint Venture Company's CEO, Deputy CEO, Chief Financial Officer and other management personnel who report directly to the CEO. + +Article 16 + +"Renminbi" or "RMB" means the lawful currency of China. + +Article 17 + +"Site" means [definition to be added]. + +Article 18 + +"Contract for Technology Investment" means the contract for investment of technology in the form of technology license and services, signed by Party B and Party A simultaneously with the signature of this Contract, and which shall be ratified by the Board of Directors of the Joint Venture Company following its establishment, pursuant to which Party B will license to the Joint Venture Company the right to use the proprietary technology (including patented technology), related documentation and operational know-how, and provide technologically advanced management support and technical assistance for the production of the Joint Venture Products, which contract is attached hereto as Appendix 2. + + Page 4 + +Article 19 + +"Third Party" means any natural person, legal person or other organisation or entity other than the Parties to this Contract or the Joint Venture Company + +Article 20 + +"Three Funds" means the Joint Venture Company's reserve fund, expansion fund and employee bonus and welfare fund as stipulated in the Joint Venture Regulations. + +Article 21 + +"United States Dollars" or "US$" means the lawful currency of the United States of America. + +Article 22 + +"Working Personnel" means all employees and staff of the Joint Venture Company other than the Management Personnel. + + CHAPTER 4 ESTABLISHMENT AND LEGAL FORM OF THE JOINT VENTURE COMPANY + +Article 23 + +The Parties hereby agree to establish the Joint Venture Company in accordance with the laws and regulations of the PRC. + +Article 24 + +Name of Joint Venture Company in Chinese characters: [**[VALENCE IN CHINESE] ********] + +Joint Venture Company in English: [FENGFAN - VALENCE BATTERY COMPANY, LTD.] + +Legal address of Joint Venture Company: [Baoding City High and New Technology Zone, Baoding City, Hebei Province, the People's Republic of China.] + +Article 25 + +The Joint Venture Company shall be an enterprise legal person under the laws of China. The activities of the Joint Venture Company shall be governed by the laws, decrees, rules and regulations of China, and its lawful rights and interests shall be protected by the laws, decrees, rules and regulations of China. + + Page 5 + +Article 26 + + + + + +The organization form of the Joint Venture Company is a limited liability company. The liability of each Party to the Joint Venture Company shall be limited to contributing the full amount of its share of the Joint Venture Company's registered capital. Unless otherwise provided pursuant to a written agreement signed by a Party and a creditor of the Joint Venture Company, creditors of the Joint Venture Company and other claimants against the Joint Venture Company shall have recourse only to the assets of the Joint Venture Company and shall not have rights to seek compensation, damages or other remedies from any of the Parties. Subject to the foregoing, the Parties shall share the Joint Venture Company's profits, and bear the losses and risks arising from their investments in the Joint Venture Company, in proportion to their respective shares of the Joint Venture Company's registered capital. + + CHAPTER 5 THE PURPOSE, SCOPE AND SCALE OF PRODUCTION AND BUSINESS + +Article 27 + +The purpose of the Joint Venture Company is to use advanced technology and scientific management techniques to produce and sell the Joint Venture Products, to improve the quality and increase the value and competitiveness of such products, to develop and introduce new products and to obtain satisfactory economic benefits for the Parties. + +Article 28 + +The Joint Venture Company's scope of business shall be the design, manufacture and sale of technologically advanced batteries, including but not limited to lithium iron magnesium phosphate batteries, lithium cobalt oxide batteries and lithium manganese oxide batteries. + +Article 29 + +The goal is to produce one hundred million (100,000,000) watt-hours per year with target annual sales of Sixty Million United States Dollars (US$60,000,000). The Board of Directors will determine the Joint Venture Company's actual production levels based on relevant market and operating conditions. + + CHAPTER 6 TOTAL AMOUNT OF INVESTMENT AND REGISTERED CAPITAL + +Article 30 + +The Joint Venture Company's total amount of investment shall be Twenty-Nine Million Nine Hundred Thousand United States Dollars (US$29,900,000). + + Page 6 + +Article 31 + +The Joint Venture Company's registered capital shall be Twenty-Nine Million Nine Hundred Thousand United States Dollars (US$29,900,000), including: + +Party A's contribution to the registered capital of the Joint Venture Company shall be Fourteen Million Six Hundred Fifty-One Thousand United States Dollars (US$14,651,000), representing a forty-nine percent (49%) share of the Joint Venture Company's registered capital. Party B's contribution to the registered capital of the Joint Venture Company shall be Fifteen Million Two Hundred Forty Nine Thousand United States Dollars (US$15,249,000), representing a fifty-one percent (51%) share of the Joint Venture Company's registered capital. + +Article 32 The Method of Investment + +Party A's total contribution (US$14,651,000) to the registered capital shall be invested as cash. US$7,000,000 of this contribution is used for the Joint Venture Company's initial purchase of foreign equipment from Party B and the remainder is used for purchase of foreign and domestic + +equipment, and land use rights and construction of workshops in China. (If the contribution is in RMB, it shall be converted using the median rate for buying and selling for foreign currency announced by the People's Bank of China on the date of investment). + +Party B's total contribution (US$15,249,000) to the registered capital shall be invested as follows: + + (1) use of technology in accordance with the Contract for Technology Investment, which is attached hereto as Appendix 2, which the parties agree to be valued at US$5,900,000; and + + (2) production equipment, in accordance with the Contract for Equipment Investment and Purchase ( Appendix 3 hereto), which equipment the parties agree to be valued at US$9,349,000. + +(If any part of the contribution is in RMB, the investment shall be converted using the median rate for buying and selling for foreign currency announced by the People's Bank of China on the date of investment). + +Article 33 + +The Joint Venture Company's registered capital shall be contributed according to both Parties' proportion of investment. The detailed method, quantity and timing + + + + + +of the contributions are shown in Appendix 1. + + Page 7 + +Article 34 + +No Party shall be obligated to make any contribution to the Joint Venture Company's registered capital if any of the following conditions have not been satisfied or waived in writing by both parties: + + (1) this Contract and the Articles of Association have been signed by both Parties, and approved by the Examination and Approval Authority without altering their terms and conditions, unless each Party has been notified in advance of and consented in writing to such alterations ; + + (2) the Business License has been issued without altering the Joint Venture Company's business scope as set forth in Article28, unless each Party has been notified in advance of and consented in writing to such alteration; + + (3) signature by the parties thereto of all the Contract for Technology Investment, the forms of which are annexed to this Contract and, where required by law, approval or registration of such contracts by the relevant government approval authority without altering their terms and conditions, unless each Party has been notified in advance of and consented in writing to such alterations; and + + (4) [the Parties have taken those steps necessary for the identification and securing of an operating site suitable for the JV Company's purposes]. + +Article 35 + +Each time a Party makes a contribution to the Joint Venture Company's registered capital, a Chinese registered accountant appointed by the Board of Directors shall promptly verify the contribution and issue a capital verification report to the Joint Venture Company. Within sixty (60) days from receipt of the capital verification report, the Joint Venture Company shall issue an investment certificate to such Party in the form prescribed by the Joint Venture Regulations, signed by the Chairman and the Vice-Chairman of the Board and chopped with the Joint Venture Company's chop. Each investment certificate shall indicate the amount of the capital contribution and the date on which such contribution was made, and a copy shall be submitted to the Examination and Approval Authority for the record. The CEO shall maintain a file of all capital verification reports and copies of all investment certificates that have been issued to the Parties. + +Article 36 + +Any increase in the registered capital of the Joint Venture Company shall require the written consent of each Party and the unanimous approval of the Board of Directors. All increases in registered capital must be approved by the Examination and Approval Authority in accordance with relevant law. + + Page 8 + +Article 37 + +Unless it obtains written consent of the other Party and approval of the Examination and Approval Authority, no party to this Contract can transfer all or part of its interest in the registered capital of the Joint Venture Company to a Third Party. Each Party agrees promptly to take all actions and to sign all documents, and to cause its appointees on the Board of Directors promptly to take all actions and sign all documents, that are legally required to effect a transfer of registered capital for which the foregoing consent has been obtained. Upon receipt of approval from the Examination and Approval Authority, the Joint Venture Company shall register the change in ownership with the competent Administration for Industry and Commerce. + +Article 38 + +If there is a difference between the total amount of investment and the registered capital or if the Joint Venture Company needs working capital, the Joint Venture Company and, if entrusted by the Joint Venture Company, either party to this Contract may negotiate to obtain loans from banks or other authorized lenders. Such loans may be secured by the guarantee, mortgage and pledge of the Joint Venture Company. Any loans provided by the parties to the Joint Venture Company or any guarantees or securities provided by the parties to secure loans to the Joint Venture Company shall only be provided by both parties and shall be provided in proportion to each party's interest in the Joint Venture Company. + +Article 39 + + + + + +No Party shall mortgage, pledge or otherwise encumber all or any part of its share of the Joint Venture Company's registered capital without the prior written consent of the other Party. + + CHAPTER 7 RESPONSIBILITIES OF EACH PARTY + +Article 40 + +Responsibilities of Party A + +In addition to its other obligations under this Contract, Party A shall have the following responsibilities: + +o Handle all applications to the relevant Examination and Approval Authority in China, register and obtain the Business License necessary for the establishment of the Joint Venture Company. Party A shall provide Party B with copies of all such approvals and licenses and all notices, letters and other correspondence submitted to or received from the Examination and Approval Authority, the competent Administration for Industry and Commerce and other Chinese government departments in respect of the Company. + + Page 9 + +o Assist the Joint Venture Company, upon request, in processing the application for the right to the use of a site to the authority in charge of the land. + +o Assist the Joint Venture Company, upon request, in organizing the design and construction of the premises and other facilities of the Joint Venture Company. + +o Assist the Joint Venture Company, upon request, in processing import customs declarations for the machinery and equipment which is provided as investment or purchased in accordance with this Contract, and arranging the transportation of the same within the Chinese territory. + +o Assist the Joint Venture Company, upon request, in contacting providers and arranging fundamental facilities such as water, electricity, transportation etc. + +o Assist the Joint Venture Company, upon request, in applying for all licenses and permits required for the operation of the Joint Venture Company's business. + +o Assist the Joint Venture Company, upon request, in applying for all possible preferential tax treatment and other preferential treatment. + +o Assist the Joint Venture Company, upon request, in recruiting Chinese management personnel, technical personnel, workers and other required personnel. + +o Assist the Joint Venture Company, upon request, in obtaining all necessary entry visas, work permits, residence permits and other necessary help for personnel working at the Joint Venture Company. + +o Assist the Joint Venture Company, upon request, in obtaining and maintaining a Foreign Exchange Registration Certificate; + +o Implementing its obligations, if any, stated in the Schedule of Capital Contributions, the Contract for Investment of Technology, the Contract for Equipment Investment and Purchase, and the Contract for Export Sales, which documents are attached hereto as Appendices 1 to 4 + +o Be responsible for handling other matters entrusted by the Joint Venture Company. + +Article 41 + +Responsibilities of Party B + +In addition to its other obligations under this Contract, Party B shall have the following responsibilities: + +o Upon request by the Joint Venture Company, handle the purchase of equipment, machinery, tools and other materials entrusted by the Joint Venture Company. + + Page 10 + +o Providing necessary technical personnel to the Joint Venture Company for installing and testing equipment, and being responsible for assisting with the operation of the equipment. + +o Training the management personnel, technical personnel and operation workers of the Joint Venture Company in accordance with the provisions + + + + + + of the Contract for Technology Investment. + +o Implementing its obligations stated in the Schedule of Capital Contributions, the Contract for Investment of Technology, the Contract for Equipment Investment and Purchase, and the Contract for Export Sales, which documents are attached hereto as Appendices 1 to 4. + +o Be responsible for handling other matters entrusted by the Joint Venture Company. + + CHAPTER 8 TECHNOLOGY + +Article 42 + +Party A and Party B shall sign the Contract for Technology Investment simultaneously with the signature of this Contract, and pursuant to the Contract for Technology Investment shall license to the Joint Venture Company the right to utilize proprietary technology (including patented technology), related documentation and know-how for the production of the Joint Venture Products. The Contract for Technology Investment is attached hereto as Appendix 2. + +The technology license fee of Five Million Nine Hundred Thousand United States Dollars (US$5,900,000) shall be deemed to be paid by the Joint Venture Company and shall constitute part of Party B's contribution to the registered capital of the Joint Venture Company in accordance with Article 32 of this Contract. The Contract for Technology Investment shall be signed by the Parties simultaneously with the signing of this Joint Venture Contract and shall come into effect upon its approval by the Examination and Approval Authority. The Board of Directors shall ratify the Contract for Technology Investment at the first meeting of the Board of Directors. + +Party B and the Joint Venture Company shall comply with the provisions of the Contract for Technology Investment, and Party B further warrants that the technology provided in accordance with the Contract for Technology Investment is complete, correct, effective and can fulfil the technological goals set forth in the Contract for Technology Investment. + +Article 43 + +Party B will provide to the Joint Venture Company new inventions, creations and technology related to the Lithium Iron Magnesium Phosphate powder manufacture and battery manufacture and Bellcore battery configuration at no additional charge. The Joint Venture Company may manufacture products using such new inventions, creations and technology on the same terms as other batteries are manufactured, under the Contract for Technology Investment. Improvements for all other batteries may be licensed to the Joint Venture Company on terms to be agreed by the Party B and the Joint Venture Company. + +Article 44 + + Page 11 + +Party A and Party B shall sign the Contract for Technology Investment simultaneously with the signature of this Contract, and pursuant to the Technical Service Contract shall provide technical services to the Joint Venture Company, which shall reimburse to Party B the direct expenses incurred in China for those Party B personnel rendering such services. The form of the Contract for Technology Investment is attached hereto as Appendix 2. + +Article 45 + +The parties to this Contract agree that the technology, documentation and know-how provided under the Contract for Technology Investment and the technical services provided under the Contract for Technology Investment are provided for the use of the Joint Venture Company. Party A hereby undertakes to Party B and the Joint Venture Company that: + + (1) Party A and its Affiliates shall not at any time during or after the Contract Term use such technology and know-how except for the purpose of marketing and selling batteries produced by the Joint Venture Company; + + (2) In respect of such technology and know-how, Party A and its Affiliates shall comply with the confidentiality obligations set forth in Chapter 17 of this Contact; and + + (3) Breach of this Article by Party A shall be deemed to be a material breach of this Contract. + +Article 46 + +Party B and its Affiliates guarantee that following the Effective Date of this Contract, it will not further transfer to any Third Party: i) the proprietary technology for production of Powder (as defined below) to be made into Batteries (as defined below) or ii) the proprietary technology for production of Batteries that use the Bellcore configuration. Party B also guarantees that any new inventions and improvements in the proprietary technology for production of Batteries shall be provided to the Joint Venture Company at no fee, excepting reimbursement of any direct travel or communication costs required for the + + + + + +provision of such technology, consistent with the terms of the Contract for Technology Investment. + +In this Article, "Powder" shall mean the Cathode Active Materials (defined below) required for the fabrication of the Batteries. In this paragraph, "Batteries" shall mean and include any aggregate of components or compositions of matter primarily adapted for storing or providing electrical energy and which include a positive and negative electrode, at least one of which shall include materials made from Cathode Active Materials, and the other shall include a carbonaceous anode material. "Cathode Active Material(s)" shall mean Lithium Cobalt Oxide, Lithium Manganese Dioxide, Lithium Nickel Oxide, Lithium Nickel Cobalt Oxide, Lithium Manganese Oxide Spinel and Lithium Iron Magnesium Phosphate, and Lithium Phosphate material. + + Page 12 + +Article 47 + +Until such time that the Joint Venture Company is capable of providing cost-effective, high quality Powder that satisfies all technical specifications identified by Party B, the Parties agree that either Party B or the Joint Venture Company shall have the right to purchase Powder from a Third Party. In no circumstances shall the Joint Venture Company offer the Powder for sale to Third Parties. + +Both Party A and Party B agree that they will not compete with the Joint Venture Company or with each other utilizing knowledge or expertise or production capabilities gained from the Joint Venture Company or gained from the Parties' respective technology contributions thereof. + + CHAPTER 9 SALE OF PRODUCTS AND USE OF TRADEMARK + +Article 48 + +The Joint Venture Company may sell the Joint Venture Products in the domestic and overseas markets, and may entrust Third Party's to sell the Joint Venture Products with approval from the Board of Directors. + +Article 49 + +It is the intention of the parties that no less than 50% of the Joint Venture Products should be sold overseas. + +Article 50 + +Each Party retains all ownership to its trademarks, service marks, logos, trade names, and similar designations identified in Exhibit B of the Contract for Technology Investment and any other such marks which such Party may from time to time designate in writing, and the other Party and the Joint Venture Company will neither register or use, directly or indirectly, any mark that is identical or confusingly similar to Valence's marks or any translations or transliterations thereof, anywhere in the world. Notwithstanding the foregoing, the Joint Venture Company may register its own trademarks, service marks, logos and trade names, and it may use the marks owned by a Party without compensation, provided that the use is in accordance with terms of a written trademark license contract signed with that Party. + + CHAPTER 10 THE BOARD OF DIRECTORS + +Article 51 + +The date of registration of the Joint Venture Company shall be the date of the establishment of the board of directors of the Joint Venture Contract. + + Page 13 + +Article 52 + +The Board of Directors shall comprise seven (7) directors, three (3) of whom shall be appointed by Party A and four (4) of whom shall be appointed by Party B. The chairman of the board shall be appointed by Party A, and its vice-chairman by Party B. + +Article 53 + +Directors shall be appointed for a term of four (4) years, provided that the Party who has appointed a director may remove that director and appoint a replacement at any time. A director may serve consecutive terms if reappointed by the Party that originally appointed him/her. If a seat on the Board of Directors is vacated by the retirement, resignation, disability or death of a director or by the removal of such director by the Party who originally appointed him/her, the Party who originally appointed such director shall appoint a successor to serve out such director's term. At the time this Contract is signed and each time a director is appointed or replaced, each Party shall notify the other Party in writing of the names of its appointees or replacements. + + + + + +Article 54 + +The Board of Directors shall be the highest authority of the Joint Venture Company. It shall decide all matters of major importance to the Joint Venture Company. The following matters shall require the unanimous assent of all the directors: + +o Amendment of the Articles of Association; + +o Termination and dissolution of the Joint Venture Company; + +o Merger of the Joint Venture Company with another organization; + +o Major investment by the Joint Venture Company; + +o Distribution of profit of the Joint Venture Company; + +o The recruitment and dismissal of the Senior Management Personnel of the Joint Venture Company; + +o Transfer of a part of all of either Party's interest in the registered capital of the Joint Venture Company; + +o Increase and decrease of the Joint Venture Company's registered capital; and + +o The examination and approval of the annual financial report of the Joint Venture Company. + +Article 55 + +Except for the matters stipulated in the above article, all other matters shall be decided by the assent of a majority of the directors present in person or by proxy at a duly convened meeting of the board of + + Page 14 + +directors, provided however that at least one member of the Board of Directors nominated by each Party assents to such decision of the Board + +If a vote on any resolution (other than resolutions requiring unanimous assent) results in a failure to obtain an affirmative vote, then the directors promptly shall endeavour to resolve the matter through further consultations. Any director shall have the right to call a meeting for a second vote on the matter after seven (7)days has elapsed from the first vote. If the second vote also results in a failure to obtain an affirmative vote, then the Chairman and Vice-Chairman of the Board shall jointly refer the matter to the highest executive officer of each Party within seven (7) days from the second vote, and they shall endeavour to agree on a resolution of the matter, which resolution shall be binding upon the Board of Directors and the Joint Venture Company. If the highest executive officers of each Party are unable to resolve the matter within thirty (30) days from the date of receipt of the referral from the Chairman and Vice-Chairman of the Board, the resolution shall be deemed not to have been passed by the Board of Directors. + +If the non-passage under this Article 55 of a resolution concerning management or financial matters results in a material adverse effect on the economic benefits derived by one or both Parties from their respective investments in the Joint Venture Company, then a Party whose benefits are adversely and materially affected may terminate this Contract. + +Article 56 + +Party A shall designate a director to serve as Chairman of the Board and Party B shall designate another director to serve as Vice-Chairman of the Board. The Chairman of the Board shall be the legal representative of the Joint Venture Company, but shall have only the authority delegated to him/her by the Board of Directors, and no individual member of the Board of Directors shall contractually or otherwise bind the Joint Venture Company without the prior written authorization of the Board of Directors. The Party appointing the Chairman of the Board shall be responsible for all losses and liabilities that the Joint Venture Company may incur as a result of the Chairman of the Board exceeding the scope of authority stipulated in this Contract. Whenever the Chairman of the Board is unable to perform his responsibilities for any reason, he shall authorise the Vice-Chairman of the Board to represent him. If the Vice-Chairman is not available, the Chairman of the Board shall authorise another director to represent him/her. + +Article 57 + +The Joint Venture Company shall indemnify each director against all claims and liabilities incurred by reason of his being a director of the Joint Venture Company, provided that the director's acts or omissions giving rise to such claim or liability did not constitute intentional misconduct or gross negligence or a violation of criminal laws. + +Article 58 + +The first meeting of the Board of Directors shall be held within one (1) month from the Company Establishment Date. Thereafter, the Board of Directors shall hold at least one (1) regular meeting in each calendar year. Upon the written + + + + + +request of two (2) or more of the directors of the Joint Venture + + Page 15 + +Company specifying the matters to be discussed, the Chairman of the Board shall within thirty (30) days of receipt thereof convene an interim meeting of the Board of Directors. Meetings shall be held at the registered address of the Joint Venture Company or such other address in China or abroad as may be agreed by the Chairman of the Board and the Vice-Chairman of the Board. The Chairman of the Board shall set the agenda for Board meetings after consultation with the Vice-Chairman of the Board and the Chairman shall be responsible for convening and presiding over such meetings. Board meetings may be attended by directors in person or by telephone, video conference or by proxy. + +Article 59 + +Five (5) directors present in person or by proxy shall constitute a quorum for all meetings of the Board of Directors. If at any properly convened meeting, no quorum is constituted because less than five (5) directors are present in person or by proxy, then the Chairman of the Board may call another meeting with seven (7) days notice to each director. All directors receiving notice of such second meeting shall be deemed to be present at such meeting. + +Article 60 + +If a director is unable to attend a Board of Directors meeting, he may issue a proxy and entrust a representative to attend the meeting on his behalf. The representative so entrusted shall have the same rights and powers as the director who entrusted him. One person may represent more than one director by proxy. + +Article 61 + +The Board of Directors will cause complete and accurate minutes (in both English and Chinese) to be kept of all Board meetings. The Chinese and English text of all resolutions to be adopted by the Board of Directors at Board meetings shall be agreed by the directors at the Board meeting and recorded by the secretary appointed for the meeting, and those members approving the resolutions shall sign such records. Draft minutes of all meetings of the Board of Directors shall be distributed to all the directors as soon as practicable after each meeting but not later than thirty (30) days from the date of such meeting. The final minutes shall be completed by the Chairman and the Vice-Chairman and distributed to each director and each Party not later than sixty (60) days after the relevant meeting. The Joint Venture Company shall maintain a file of all Board meeting minutes and make the same freely available to the Parties and their authorized representatives. + +Article 62 + +The Board of Directors may adopt any resolution without a meeting if all of the directors then holding office consent in writing to such action. Such written consent may be signed by the directors in different counterparts, shall be filed with the minutes of the Board of Directors proceedings and shall have the same force and effect as a unanimous vote of the directors present at a duly constituted meeting of the Board. + + Page 16 + +Article 63 + +Directors shall serve without any remuneration, but all reasonable costs incurred by the directors in attending Board meetings (including but not limited to travel expenses) shall be borne by the Joint Venture Company. + + CHAPTER 11 BUSINESS MANAGEMENT ORGANISATION + +Article 64 + +The Joint Venture Company shall establish a business management organization to be in change of the day-today operation and management of the Joint Venture Company. + +Article 65 + +The Joint Venture Company's business management organization shall be under the leadership of a CEO, who shall report directly to the Board of Directors. In addition to the CEO, the Joint Venture Company shall have a Deputy CEO, Chief Financial Officer, Director of Sales, Director of Human Resources, Director of Manufacturing, and Director of Research and Development (together with the CEO, the "Senior Management Personnel"). The CEO shall be in charge of the day-to-day operation and management of the Joint Venture Company. The Deputy CEO shall assist the CEO in his work and shall report to the CEO. Other department directors shall report directly to the CEO. + +Article 66 + + + + + +The CEO shall be nominated by Party B, and the Deputy CEO shall be nominated by Party A The Chief Financial Officer shall be nominated by Party A, and an Assistant Financial Officer may be nominated by Party B. The Chief Financial Officer must consult with the Assistant Financial Officer, if any, on all important financial matters. Each officer nominated by a party or parties in accordance with this paragraph shall be appointed by the Board of Directors. The other Management Personnel shall be nominated by the CEO and appointed by the Board of Directors. The Board may dismiss any Management Personnel. All replacements for any of the Management Personnel, whether by reason of the retirement, resignation, disability or death of a manager or of the removal of a manager by the Board of Directors or by the Party which nominated him, shall be nominated and appointed in the same manner as the original appointee. Other details of management shall be decided by the CEO. + +Article 67 + +The CEO shall be in charge of the day-to-day operation and management of the Joint Venture Company and shall carry out all matters entrusted by the Board of Directors. The Deputy CEO shall assist the CEO in his work and shall report to the CEO. + + Page 17 + +Article 68 + +The CEO, Deputy CEO and all other Management Personnel shall perform their duties on a full-time basis and shall not concurrently serve as a manager, an employee or a consultant of any other company or enterprise, nor shall they serve as a director of, or hold any interest in, any company or enterprise that competes with the Joint Venture Company. + +Article 69 + +The Joint Venture Company's basic departmental structure and other management positions reporting directly to the CEO shall be approved by the Board of Directors based on proposals formulated by the CEO. The details of the Joint Venture Company's organizational structure and all other employment positions shall be determined by the CEO. + +Article 70 + +Both Chinese and English shall be used concurrently as the management languages of the Joint Venture Company. + +Article 71 + +In case of graft or serious dereliction of duty on the part of the CEO, Deputy CEO and other management personnel of the Joint Venture Company, the Board of Directors shall have the power to dismiss such individuals at any time pursuant to the provisions of relevant PRC law. + + CHAPTER 12 SITE FOR JOINT VENTURE COMPANY + +Article 72 + +Party A confirms that it will procure for use of the Joint Venture Company a site to be further identified and agreed by the Parties. The site shall be in the Baoding High Technology Development Zone, shall have granted land use rights, and shall have utilities that may be directly connected by the Joint Venture Company at the site. + +The Parties shall further agree on the size and standards of the building to be constructed to meet the Joint Venture Company's operating needs. + + CHAPTER 13 PURCHASE OF EQUIPMENT AND MATERIALS + +Article 73 + + Page 18 + +The Joint Venture Company has the right to purchase equipment, machinery, raw materials, etc. required for the Joint Venture Company's production and operations. In its purchase of required equipment, instruments, raw materials, fuel, parts, and means of transportation etc., the Joint Venture Company shall give first priority to purchase of same in China where relevant purchase terms conditions are the same or more favorable. + +Article 74 + +The Joint Venture Company may entrust Party A or Party B to purchase the items listed in the above article. Any party so entrusted shall use its best endeavors to accomplish the purpose of the entrustment. The price shall be fair and reasonable. The party so entrusted shall follow the internationally accepted procedures to purchase materials when their quantity is large. The other party and the Joint Venture Company shall supervise the action of purchasing. + + + + + +Article 75 + +A list of equipment that the Joint Venture Company intends to import as Party B's capital contribution and as purchase from Party B for the commencement of the Joint Venture Company's production and operations is set forth as Appendix 3 to this Contract. + + CHAPTER 14 LABOR MANAGEMENT + +Article 76 + +Matters relating to the recruitment, wages, insurance, welfare, dismissal of the staff and workers of the Joint Venture Company shall be handled in accordance with the LABOR LAW OF THE PEOPLE'S REPUBLIC OF CHINA and the REGULATIONS OF THE PEOPLE'S REPUBLIC OF CHINA ON LABOR MANAGEMENT IN FOREIGN INVESTMENT ENTERPRISES and related PRC regulations. The Joint Venture Company's internal labor policies shall be established pursuant to relevant PRC laws and regulations, and approved by the Board of Directors. + +Article 77 + +The Joint Venture Company shall adopt a labor contract system. The wages, welfare, labor insurance and other rights and obligations of working personnel and Management Personnel shall be regulated through individual or group labor contracts. + +Article 78 + +Expatriate management personnel and Chinese management personnel in the same position shall receive equivalent salary and benefits. + +Article 79 + +Employees will be selected according to their professional qualifications, language abilities, individual characteristics and working experience. The specific number and qualifications of the Working Personnel shall be determined by the CEO in accordance with the operating needs of the + + Page 19 + +Joint Venture Company. All employees hired by the Joint Venture Company must complete satisfactorily a six-month probationary period of employment before they will be considered regular employees of the Joint Venture Company. + +Article 80 + +Except as provided in Article 78, expatriate personnel and Chinese personnel in the same position shall be treated equally and without discrimination. + +Article 81 + +Working Personnel shall have the right to establish a labor union in accordance with the LABOR UNION LAW OF THE PEOPLE'S REPUBLIC OF CHINA and develop activities pursuant to related regulations. In accordance with relevant PRC regulations, the Joint Venture Company shall allot each month two percent (2%) of the total amount of the real wages received by the Joint Venture Company staff and workers for payment into a labor union fund, such payment to be an expense of the Joint Venture Company. The labor union may use these funds in accordance with the relevant control measures for labor union funds formulated by the All China Federation of Labor Unions. + + CHAPTER 15 FINANCIAL AFFAIRS AND ACCOUNTING + +Article 82 + +The Chief Financial Officer and Assistant Financial Officer of the Joint Venture Company, under the leadership of the CEO, shall be responsible for the financial management of the Joint Venture Company. The CEO, the Chief Financial Officer and Assistant Financial Officer shall prepare the Joint Venture Company's accounting system and procedures in accordance with the relevant PRC laws and regulations, and submit the same to the Board of Directors for adoption. + +Article 83 + +The Joint Venture Company shall adopt Renminbi as its bookkeeping base currency, but may also adopt United States Dollars or other foreign currencies as supplementary bookkeeping currencies. The debit and credit method, as well as the accrual basis of accounting, shall be adopted as the methods and principles for keeping accounts. + +Article 84 + +The Joint Venture Company shall adopt the calendar year as its fiscal year. The Joint Venture Company's first fiscal year shall commence on the date that the Joint Venture Company receives a business license and shall end on the immediately succeeding December 31. + +Article 85 + +All accounting records, vouchers, books and statements of the Joint Venture Company must be made and kept in Chinese. All financial statements and reports + + + + + +of the Joint Venture Company shall also be made and kept in English. + + Page 20 + +Article 86 + +For the purpose of preparing the Joint Venture Company's accounts and statements, calculation of profits to be distributed to the Parties, and for any other purposes where it may be necessary to effect a currency conversion, such conversion shall be made using the median rate for buying and selling for such currency announced by the People's Bank of China on the date of actual receipt or payment by the Joint Venture Company. + +Article 87 + +The Parties shall have full and equal access to the Joint Venture Company's accounts, which shall be kept at the legal address of the Joint Venture Company. In addition, each Party at its own expense and upon advance notice to the Joint Venture Company may appoint an accountant (which may be either an accountant registered abroad or registered in China), to audit the accounts of the Joint Venture Company on behalf of such Party. Reasonable access to the Joint Venture Company's financial records shall be given to such auditor and such auditor shall keep confidential all documents under his auditing. + +Article 88 + +The Joint Venture Company shall furnish to the Parties unaudited financial reports on a monthly and quarterly basis so that they may continuously be informed about the Joint Venture Company's financial performance. + +Article 89 + +An accountant registered in China and independent of any Party shall be engaged by and at the expense of the Joint Venture Company as its auditor to examine and verify the Joint Venture Company's annual financial statements and report. The Joint Venture Company shall submit to the Parties an annual statement of final accounts (including the audited profit and loss statement and the balance sheet for the fiscal year) after the end of the fiscal year, together with the audit report of the Chinese registered accountant. + +Article 90 + +The Joint Venture Company shall separately open foreign exchange accounts and Renminbi accounts at banks within China approved by the State Administration of Exchange Control. Following approval by the State Administration of Exchange Control, the Joint Venture Company may also open foreign exchange bank accounts outside China. The Joint Venture Company shall apply for and maintain a Foreign Exchange Registration Certificate in accordance with applicable legal requirements. The Joint Venture Company shall abide by the regulations of the PRC concerning foreign exchange control and handle foreign exchange transaction pursuant to such regulations. + +Article 91 + +After the payment of income taxes by the Joint Venture Company, the Board of Directors will determine the annual allocations to each of the Three Funds from the after-tax net profits. The sum + + Page 21 + +of the allocations to the Three Funds for any fiscal year shall be determined by the Board and shall not exceed ten percent (10%) of the after-tax profit for that year so as to ensure the Joint Venture Company's smooth operation. + +Article 92 + +The distribution of the Joint Venture Company's after-tax profits to the Parties shall be carried out according to related laws and the Joint Venture Company's actual conditions. The Board of Directors shall once every year by a formally adopted resolution decide the amount of after-tax profit of the Joint Venture Company (after allocations to the Three Funds) to be retained in the Joint Venture Company for expanding its production and operations and the amount to be distributed to the Parties in proportion to their respective shares of the Joint Venture Company's registered capital. All remittances of profits and other payments out of China to Party B shall be made to a foreign bank account designated by Party B in United States Dollars or other freely convertible foreign currencies in accordance with the foreign exchange regulations of China. + + CHAPTER 16 TAXATION AND INSURANCE + +Article 93 + +The Joint Venture Company shall pay all taxes and duties required under the national and local laws and regulations of China. The Joint Venture Company's Chinese and expatriate personnel shall pay individual income tax in accordance with the INDIVIDUAL INCOME TAX LAW OF THE PEOPLE'S REPUBLIC OF CHINA. + + + + + +Article 94 + +The Joint Venture Company, at its own expense, shall take out and maintain at all times during the Contract Term with insurance companies insurance against loss or damage by fire, natural disasters and other risks of types and in amounts as may be recommended by the CEO and decided by the Board of Directors. The property, transport and other items of insurance of the Joint Venture Company will be denominated in Chinese and foreign currencies, as appropriate. + +Article 95 + +The Joint Venture Company shall take out the required insurance from an insurance company or organization permitted by Chinese laws and regulations to provide such insurance. + + CHAPTER 17 CONFIDENTIALITY + +Article 96 + +Prior to and during the Contract Term, each Party has disclosed or may disclose to the other Party, including without limitation through technology transfer or license agreements, confidential and proprietary information and materials concerning their respective businesses, financial condition, proprietary technology, research and development, and other confidential matters. Furthermore, + + Page 22 + +during the Contract Term, the Parties may obtain such confidential and proprietary information concerning the Joint Venture Company and the Joint Venture Company may obtain such confidential and proprietary information of the Parties. Each of the Parties and the Joint Venture Company receiving all such information as aforesaid (hereinafter referred to "Confidential Information") shall, during the Contract Term, or during the term of the Joint Venture Company and for two (2) years after the early termination or dissolution of the Joint Venture Company prior to the expiration of the Contract Term: + + (1) maintain the confidentiality of such Confidential Information; and + + (2) not disclose it to any person or entity, except to their respective employees who need to know such Confidential Information to perform their work responsibilities. + +The above provisions shall not apply to Confidential Information that: + + (1) can be proved to have been known by the receiving party by written records made prior to disclosure by the disclosing party; + + (2) is or becomes public knowledge otherwise than through the receiving party's breach of this Contract; + + (3) was obtained by the receiving party from a Third Party having no obligation of confidentiality with respect to such Confidential Information; or + + (4) is required by order of any competent court or governmental authority to be disclosed. + +Each Party shall advise its directors, senior staff, and other employees receiving such Confidential Information of the existence of and the importance of complying with the obligations set forth in this Article. + +Article 97 + +If required by any Party, the Joint Venture Company shall execute a separate secrecy agreement with provisions similar to those set out above with respect to Confidential Information obtained by the Joint Venture Company from such Party or its Affiliates. + +Article 98 + +Each of the Parties and the Joint Venture Company shall formulate rules and regulations to cause its directors, senior staff and other employees, and those of their Affiliates, also to comply with the confidentiality obligations set forth in this Chapter 17. All directors, managers and other employees of the Joint Venture Company shall be required to sign a confidentiality undertaking in a form acceptable to all Parties. + + Page 23 + +Article 99 + +If any Party or the Joint Venture Company breaches the provisions of this Chapter 17, it shall be liable for damages accrued to the other Party or the + + + + + +Joint Venture Company as a result of such breach. The payment of damages shall be without prejudice to any other rights or remedies accrued at the date of such breach. + +Article 100 + +This Chapter 17 and the obligations and benefits hereunder shall survive the expiration or early termination of this Contract and shall remain in effect for the periods stated herein, notwithstanding the dissolution or liquidation of the Joint Venture Company. + + CHAPTER 18 ENVIRONMENTAL PROTECTION AND COMPLIANCE + +Article 101 + +Party B warrants that to the best of its knowledge those products that are properly manufactured pursuant to the terms of the Contract for Technology Investment and other written instructions from Party B shall comply with those relevant PRC environmental laws and regulations existing and in effect as of the date of the Parties' signature of this Contract. + +Article 102 + +Following the establishment of the Joint Venture Company, if PRC environmental laws and regulations are amended such that the rights or interests of the Joint Venture Company or either Party's interest therein are affected, then the Parties shall discuss in good faith regarding a suitable approach to address such regulatory change, consistent with Article 119 hereto. + + CHAPTER 19 CONTRACT TERM + +Article 103 + +The Contract Term shall extend for a period of fifty (50) years. The date that the Business License is issued is the Establishment Date of the Joint Venture Company. Upon the agreement of all Parties and the unanimous consent of the Board of Directors, an application to extend the Contract Term may be made to the Examination and Approval Authority no less than six (6) months prior to the expiration of the Contract Term. + + Page 24 + + CHAPTER 20 TERMINATION AND LIQUIDATION + +Article 104 + +Each Party shall have the right to terminate this Contract prior to the expiration of the Contract Term by written notice to the other Party if any of the following events occur: + + (1) in the event that either party fails to make its capital contribution, in whole or in part, within [90] days of the due date, or in the event that any of the conditions precedent set forth in Article 34 of this Contract have not been satisfied or waived within [120] days of the date on which this Contract is signed by the parties; + + (2) the other Party materially breaches this Contract or materially violates the Articles of Association, and such breach or violation is not cured within sixty (60) days of written notice to the breaching/violating Party; + + (3) the Joint Venture Company or the other Party becomes bankrupt, or is the subject of proceedings for liquidation or dissolution, or ceases to carry on business, or becomes unable to pay its debts as they come due; + + (4) the other Party transfers all or any part of its share of the Joint Venture Company's registered capital in violation of the provisions of this Contract; + + (5) any government authority having authority over any Party requires any provision of this Contract or the Articles of Association to be revised in such a way as to cause significant adverse consequences to the Joint Venture Company or any Party; + + (6) the conditions or consequences of Force Majeure prevail with the result of a major impairment to the functioning of the Joint Venture Company for a period in excess of six (6) months and the Parties have been unable to find an equitable solution; or + + (7) the Parties cannot implement the economic adjustment described in Article 119. + +Article 105 + +If any Party gives notice to terminate this Contract pursuant to Article 104, the Parties shall endeavour to resolve the problem through negotiation and agreement. If, within thirty (30) days of receipt of such notice, the Parties have not agreed in writing to continue this Contract, then each Party and the directors appointed by each Party shall be deemed to have agreed to terminate + + + + + +this Contract and dissolve the Joint Venture Company. An application for the same shall forthwith be submitted to the Examination and Approval Authority. + +Article 106 + +Following an application to dissolve the Joint Venture Company pursuant to Article 105, the Board of Directors shall forthwith appoint a liquidation committee which shall have the power to represent the Joint Venture Company in all legal matters. The liquidation committee shall value and liquidate + + Page 25 + +the Joint Venture Company's assets in accordance with the applicable Chinese laws and regulations and the principles set forth herein. + +Article 107 + +The liquidation committee shall be made up of three (3) members, of whom one (1) member shall be nominated by Party A and two (2) members shall be nominated by Party B. Members of the liquidation committee may, but need not be, directors or senior employees of the Joint Venture Company. The liquidation committee may engage a lawyer and an accountant registered in China to assist the liquidation committee. When permitted by Chinese law, any Party may also appoint professional advisors to assist the liquidation committee. The Board of Directors shall report the formation of the liquidation committee to the department in charge of the Joint Venture Company. + +Article 108 + +The liquidation committee shall conduct a thorough examination of the Joint Venture Company's assets and liabilities, on the basis of which it shall develop a liquidation plan, which, if approved by the Board of Directors, shall be executed under the liquidation committee's supervision. + +Article 109 + +In developing and executing the liquidation plan, the liquidation committee shall use every effort to obtain the highest possible price for the Joint Venture Company's assets and, subject to compliance with PRC foreign exchange control regulations, sell such assets for United States Dollars or other freely convertible foreign currencies. + +Article 110 + +The liquidation expenses, including remuneration to members and the lawyers and accountants assisting the liquidation committee, shall be paid out of the Joint Venture Company's assets in priority to the claims of other creditors. + +Article 111 + +After the liquidation and division of the Joint Venture Company's assets and the settlement of all of its outstanding debts, the balance shall be paid over to the Parties in proportion to their respective shares of the registered capital of the Joint Venture Company. + +Article 112 + +On completion of all liquidation work, the liquidation committee shall provide a liquidation completion report approved by the Board of Directors to the Examination and Approval Authority, hand in the Joint Venture Company's business license to the original registration authority and complete all other formalities for nullifying the Joint Venture Company's registration. Party B shall have a right to obtain copies of all of the Joint Venture Company's accounting books and other documents at their own expense but the originals thereof shall be left in the care of Party A. + + Page 26 + + CHAPTER 21 BREACH OF CONTRACT + +Article 113 + +In the event that a breach of contract committed by a Party to this Contract results in the non- performance of or inability to perform this Contract or its appendices fully, the liabilities arising from the breach of this contract or its Appendices shall be borne by the Party in breach. In the event that a breach of contract is committed by more than one Party, each such Party shall bear its individual share of the liabilities arising from the breach of contract. + + CHAPTER 22 FORCE MAJEURE + +Article 114 + +"Force Majeure" shall mean all events which were unforeseeable at the time this Contract was signed, the occurrence and consequences of which cannot be avoided or overcome, and which arise after the Effective Date and prevent total or + + + + + +partial performance by any Party./ Such events shall include earthquakes, typhoons, flood, fire, war and any other instances which cannot be foreseen, avoided or overcome, including instances which are accepted as force majeure in general international commercial practice. + +Article 115 + +If an event of Force Majeure occurs, a Party's obligations under this Contract affected by such an event shall be suspended during the period of delay caused by the Force Majeure and shall be automatically extended, without penalty, for a period equal to such suspension. The Party claiming Force Majeure shall promptly inform the other Party in writing and shall furnish within fifteen (15) days thereafter sufficient evidence of the occurrence and duration of such Force Majeure. The Party claiming Force Majeure shall also use all reasonable endeavours to terminate the Force Majeure. In the event of Force Majeure, the Parties shall immediately consult with each other in order to find an equitable solution and shall use all reasonable endeavours to minimize the consequences of such Force Majeure. + + CHAPTER 23 SETTLEMENT OF DISPUTES + +Article 116 + +In the event a dispute arises in connection with the interpretation or implementation of this Contract, the Parties shall attempt in the first instance to resolve such dispute through friendly consultations. If the dispute is not resolved through consultations within sixty (60) days after one Party has served a written notice on the other Party requesting the commencement of consultations, then any Party may refer the dispute to arbitration in Singapore under the auspices of the Singapore International Arbitration Centre in accordance with the rules of that Centre for the time being in force and the provisions of Article 117 of this Contract. + + Page 27 + +Article 117 + +There shall be three (3) arbitrators, one (1) of whom shall be appointed by Party A, one (1) of whom shall be appointed by Party B, and one (1) of whom shall be appointed by the arbitration tribunal. The arbitration award shall be final and binding on the Parties. When any dispute occurs and when any dispute is under arbitration, except for the matters under dispute, the Parties shall continue to exercise their other respective rights and fulfil their other respective obligations under this Contract. In any arbitration proceeding, any legal proceeding to enforce any arbitration award and in any legal action between the Parties pursuant to or relating to this Contract, each Party expressly waives the defense of sovereign immunity and any other defence based on the fact or allegation that it is an agency or instrumentality of a sovereign state. + + CHAPTER 24 APPLICABLE LAW + +Article 118 + +The formation, validity, interpretation and implementation of this Contract, and any disputes arising under this Contract, shall be governed by the published laws of the People's Republic of China. If there is no published law in China governing a particular matter relating to this Contract, reference shall be made to general international commercial practices. + +Article 119 + +If one Party's economic benefits are adversely and materially affected by the promulgation of any new laws, rules or regulations of China or the amendment or interpretation of any existing laws, rules or regulations of China after the Effective Date of this Contract, the Parties shall promptly consult with each other and use their best endeavours to implement any adjustments necessary to maintain each Party's economic benefits derived from this Contract on a basis no less favourable than the economic benefits it would have derived if such laws, rules or regulations had not been promulgated or amended or so interpreted. If it is not possible to implement such adjustments, a Party may terminate this Contract pursuant to Chapter 20 of this Contract. + + CHAPTER 25 MISCELLANEOUS PROVISIONS + +Article 120 + +To the extent permitted by Chinese law, failure or delay on the part of any Party hereto to exercise a right under this Contract and the Appendices hereto shall not operate as a waiver thereof; nor shall any single or partial exercise of a right preclude any other future exercise thereof. + +Article 121 + +Except as otherwise provided herein, this Contract may not be assigned in whole or in part by any Party without the prior written consent of the other Party and the approval of the Examination and Approval Authority. + + Page 28 + + + + + +Article 122 + +This Contract is made for the benefit of Party A and Party B and their respective lawful successors and assignees and is legally binding on them. This Contract may not be amended orally, and any amendment hereto must be agreed to in a written instrument signed by all of the Parties and approved by the Examination and Approval Authority before taking effect. + +Article 123 + +Subject to the provisions of Article 118 hereof, the invalidity of any provision of this Contract shall not affect the validity of any other provision of this Contract. + +Article 124 + +This Contract is written and signed in the Chinese language in six (6) originals and in the English language in six (6) originals. Both language versions shall be equally valid and in the event of any discrepancy between the two versions, the wording in dispute shall be interpreted in accordance with the purpose of this Contract. + +Article 125 + +This Contract and the Appendices hereto constitute the entire agreement between the Parties with respect to the subject matter of this Contract and supersede all prior discussions, negotiations and agreements between them with respect to the subject matter of this Contract. In the event of any conflict between the terms and provisions of this Contract and the Articles of Association, the terms and provisions of this Contract shall prevail. + +Article 126 + +This Contract shall take effect after it is approved by the Examination and Approval Authority. + +Article 127 + +Any notice or written communication provided for in this Contract from one Party to the other Party or to the Joint Venture Company shall be made in writing in Chinese and English and may be sent telegram, telex or facsimile transmission, or by courier service delivered letter or by post. Any communication sent by facsimile transmission or e-mail shall be confirmed by courier service delivered letter or by post. The date of receipt of a notice or communication hereunder shall be deemed to be fourteen (14) days after the letter is given to the courier service or postal service, or one (1) working day after sending in the case of facsimile or e-mail, provided it is evidenced by a confirmation receipt and the confirmation letter is sent by courier delivered letter or post. All notices and communications shall be sent to the appropriate address set forth below, until the same is changed by notice given in writing to the other Party. + +PARTY A: + +Fengfan Group Limited Liability Company 8 Fu Chang Road, + + Page 29 + +Baoding City, Hebei Province, People's Republic of China + +Facsimile No: (0312) 3236562 Telephone No: (0312) 322 5931 E-mail: + +Representative: Chen Mengli + +PARTY B: + +Valence Technology, Inc. 301 Conestoga Way Henderson Nevada 89015 U.S.A. + +Facsimile No: (702) 558-1310 Telephone No: (702) 558-1073 Attention: General Counsel + +E-mail: + +THE JOINT VENTURE COMPANY: + +Fengfan-Valence Battery Company, Ltd.Baoding City High and New Technology Development Zone, Baoding City, Hebei Province People's Republic of China + + + + + +Attention: CEO + +E-mail: + +Article 128 + +The Appendices hereto listed below are made an integral part of this Contract and are equally binding with these the provisions of this Contract: + +Appendix 1 Schedule for Capital Contributions + +Appendix 2 Contract for Technology Investment + +Appendix 3 Contract for Equipment Investment and Purchase + +Appendix 4 Export Sales Contract + + Page 30 + +IN WITNESS WHEREOF, the duly authorized representative of each Party has signed this Contract in Baoding, People's Republic of China on November 8, 2002. + +FENGFAN GROUP LIMITED VALENCE TECHNOLOGY, INC. LIABILITY COMPANY + +By: /S/ CHEN MENGLI By: /S/ DEEPAK SWAMY ---------------------------- -------------------------------- + +Name: CHEN MENGLI Name: DEEPAK SWAMY + +Title: CHAIRMAN OF THE BOARD Title: VICE PRESIDENT OF LICENSING OPERATIONS + +Nationality: P.R. CHINA Nationality: AMERICAN + + Page 31 \ No newline at end of file diff --git a/full_contract_txt/VAPOTHERM, INC. - Manufacturing and Supply Agreement.txt b/full_contract_txt/VAPOTHERM, INC. - Manufacturing and Supply Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..08ff387eea09f28055060d4fe188782a54543a32 --- /dev/null +++ b/full_contract_txt/VAPOTHERM, INC. - Manufacturing and Supply Agreement.txt @@ -0,0 +1,651 @@ +Exhibit 10.14 + +[* * *] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + +MANUFACTURING AND SUPPLY AGREEMENT + +DATED AS OF January 1, 2013 + +BETWEEN + +VAPOTHERM, INC. + +AND + +MEDICA, S.p.A. + + + + + +TABLE OF CONTENTS Page ARTICLE 1 SALE AND PURCHASE 1 + +1.1 Supply of Cartridge 1 1.2 [* * *] 1 1.3 Purchase of Cartridge 1 + +ARTICLE 2 FORECASTS; INVENTORY 1 + +2.1 Rolling Forecasts 1 2.2 Inventory 2 + +ARTICLE 3 ORDERS, SHIPMENT, AND PAYMENT 2 + +3.1 Price 2 3.2 Purchase Orders 2 3.3 Delivery 3 3.4 [* * *] 3 3.5 Delay in Delivery 3 3.6 Delivery Default Rights 3 3.7 Invoices and Payment Terms 3 3.8 Delay in Payment 4 + +ARTICLE 4 QUALITY OF THE CARTRIDGE 4 + +4.1 Conformity with Specifications 4 4.2 Conditions to Rejection 4 4.3 Rejection 4 4.4 Nonconformity Default Rights 5 4.5 Acceptance of Cartridges 5 4.6 Quality Monitoring 5 + +ARTICLE 5 PRODUCTION PROCESS 5 + +5.1 Joint Review Committee 5 5.2 Process Development 5 5.3 Inventory of Raw Materials and Spare Parts 5 5.4 [* * *] 5 -i- + +[* * *] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +ARTICLE 6 QUALITY SYSTEM 6 + +6.1 General Quality Statement 6 6.2 Quality System Changes 6 6.3 Vendor Quality 6 6.4 Vigilance System 6 + +ARTICLE 7 OTHER OBLIGATIONS OF MEDICA 7 + +7.1 Debarment Certification 7 7.2 Permits and Certifications 7 7.3 Manufacturing Problems 7 7.4 Insurance 7 + +ARTICLE 8 INSPECITONS; RECORDS 8 + +8.1 Notification of Inquiries and Inspections 8 8.2 Access to Medica Facilities and Records 8 8.3 Records 9 + +ARTICLE 9 CARTRIDGE RECALLS 9 + +9.1 Cartridge Recalls 9 9.2 Notice of Events that May Lead to Cartridge Recall 9 9.3 Recall Due to Breach By Medica 9 9.4 Definition of Recall 9 9.5 Recall Process 10 + +ARTICLE 10 PUBLICITY; CONFIDENTIALITY; INTELLECTUAL PROPERTY 10 + +10.1 Publicity 10 10.2 Confidentiality 10 10.3 Pre-existing and Independently Developed Intellectual Property 11 10.4 Ownership 11 10.5 [* * *] 11 10.6 Reservation of All Other Rights 11 + +ARTICLE 11 REPRESENTATIONS 12 + +11.1 Representations of Medica 12 -ii- + +[* * *] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +11.2 Representations of Vapotherm 13 + +ARTICLE 12 INDEMNIFICATION 13 + +12.1 Indemnification 13 12.2 Procedures Relating to Indemnification 14 12.3 No Liability for Consequential Damages 15 12.4 Limitation on Liability 15 + +ARTICLE 13 TERM AND TERMINATION; BUSINESS CONTINUITY 15 + +13.1 Term 15 13.2 Termination 16 13.3 Effect of Termination 17 13.4 Business Continuity 17 + +ARTICLE 14 MISCELLANEOUS 18 + +14.1 Definitions 18 14.2 Further Assurances 21 14.3 Governing Law 21 14.4 Dispute Resolution 21 14.5 Arbitration 22 14.6 Force Majeure 22 14.7 Assignment 22 14.8 Notices 22 14.9 Severability 23 14.10 Entire Agreement 23 14.11 Amendment 23 14.12 Independent Contractor 23 14.13 Counterparts 23 14.14 Compliance with Laws 24 -iii- + +[* * *] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +MANUFACTURING AND SUPPLY AGREEMENT + +This Manufacturing and Supply Agreement (this "Agreement") is dated January 1st, 2013, between VAPOTHERM, INC., a Maryland corporation ("Vapotherm") and MEDICA S.p.A., an Italian company ("Medica"). + +WHEREAS, Vapotherm sells systems it has developed for delivering humidified, blended medical gas therapy (the "System"), which system includes a vapor transfer cartridge; + +WHEREAS, Vapotherm and Medica wish for Medica to manufacture [* * *] (each, a "Cartridge" and collectively, the "Cartridges") for Vapotherm for use in the System, using fiber provided by Medica as developed for the System and packaged as specified in Vapotherm Specification Exhibit D. + +NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which have hereby acknowledged, the parties therefore agree as follows: + +ARTICLE 1 SALE AND PURCHASE + +1.1 Supply of Cartridge. Subject to the terms of this Agreement, Medica shall manufacture, in such quantities as Vapotherm orders, the Cartridge. + +1.2 [* * *] + +1.3 Purchase of Cartridge. Subject to the terms of this Agreement, Vapotherm shall purchase from Medica Cartridges following regulatory approval. + +ARTICLE 2 FORECASTS; INVENTORY + +2.1 Rolling Forecasts. + +Attached hereto and incorporated herein by reference as Exhibit A-2 is Vapotherm's initial forecast of Cartridges that Vapotherm will purchase for delivery on a monthly basis in calendar year 2013 (the "Initial Forecast"). On or prior to January 1, 2013 (the "Forecast Initiation Date"), Vapotherm shall deliver to Medica a forecast of Cartridge demand in each of the [* * *] consecutive months beginning one month following the FID. On or prior to one month following the FID, Vapotherm shall provide a forecast for the next [* * *] consecutive months beginning [* * *] months following the FID. On or prior to the first day of each subsequent month, Vapotherm shall deliver to Medica an update to its previously submitted forecast of its expected purchases of Cartridges (each forecast delivered pursuant to this Section 2.l(a), a "Rolling Forecast"). [* * *] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +(a) Vapotherm will place a firm Purchase Order for the following [* * *] months. Every month there after, Vapotherm will placed a PO for the following month to maintain a rolling [* * *] month commitment. + +(b) The forecast for any month specified in any Rolling Forecast may not be less than the total number of Cartridges for which Vapotherm, prior to delivery of that Rolling Forecast to Medica in accordance with Section 2.l(a), has submitted purchase orders in accordance with Section 3.2 specifying a delivery date in that month. + +2.2 Inventory. + +During the Term, Medica shall at all times maintain as safety stock that quantity of Cartridges equal to one (1) times the monthly average number of Cartridges ordered by Vapotherm during the immediately preceding [* * *] months. + +ARTICLE 3 ORDERS, SHIPMENT, AND PAYMENT + +3.1 Price. The price paid by Vapotherm for any given shipment of Cartridges during the Initial Term is as stated in Exhibit A-1. No later than [* * *] days prior to the end of the Initial Term and each Renewal Term, Medica shall provide Vapotherm with reasonable documentation of its actual and direct costs in manufacturing the Cartridges (the "Costs"). The parties will then negotiate in good faith the Cartridge prices for the subsequent + +3.2 Purchase Orders. + +(a) Each purchase order that Vapotherm places for Cartridges must be in the form attached as Exhibit B and must specify (1) how many Cartridges are desired, (2) the one or more places to which, and the manner and date by which, delivery is to be made, and (3) the applicable price per Cartridge. Vapotherm shall deliver all purchase orders by facsimile, or by one of the means specified in Section 14.8 for giving notice, to Medica at the following address and facsimile number or as otherwise instructed by Medica: + +Medica S.p.A. Via Degli Artigiani, 7 41036 Medolla (MO) Italy Attention: Daniele Giubertoni MKTG & Sales Manager Facsimile: 39-0535-52605 E-mail: daniele.giubertoni@medica.it + +(b) Vapotherm shall order for delivery in any given month an aggregate number of Cartridges equal to at least [* * *]% of the final amount forecast for that month in the Rolling Forecasts (that quantity, the "Final Forecast Quantity"). Vapotherm may order for delivery in any given Quarter an aggregate quantity of Cartridge not exceeding [* * *]% of the Final Forecast Quantity. Only with Medica's written consent may Vapotherm order for delivery in any given Quarter an aggregate number of Cartridges exceeding [* * *]% of the aggregate Final Forecast Quantity for the months in such Quarter. -2- + +[* * *] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +(c) Vapotherm shall deliver each purchase order for quantities of the Cartridge at least [* * *] in advance of the delivery date specified in that purchase order. + +(d) If Vapotherm delivers any purchase order with less lead time than is required under Section 3.2(c), then Medica shall use [* * *] efforts to fill that purchase order but will not be liable to Vapotherm if despite those best efforts they fail to do so. + +(e) Medica shall acknowledge and accept in writing on behalf of Medica any purchase order that Vapotherm places for Cartridges. Any such purchase order will be deemed accepted by Medica if Medica does not reject it by written notice to Vapotherm delivered within [* * *] Business Days of Medica's receiving that purchase order. Medica may not reject any purchase order that complies with the provisions of Article 3. If the terms of any purchase are inconsistent with the terms of this Agreement, the terms of this Agreement will control. + +3.3 Delivery. Each shipment of Cartridges will be delivered by [* * *] to the applicable Vapotherm manufacturing facility or retained in Medica's warehouse facility, in accordance with Vapotherm instructions for each shipment. Medica shall deliver by the delivery date specified in a purchase order all of the Cartridges specified in that purchase order. Vapotherm is only required to pay for Cartridges actually delivered. Medica shall make shipping arrangements with carriers designated in writing by Vapotherm from the [* * *] point to points specified by Vapotherm, under the arrangements that Vapotherm has with those carriers. + +3.4 [* * *] + +3.5 Delay in Delivery. If for any reason other than an Event of Force Majeure, Medica delivers any shipment of Cartridges later than the date of delivery set out in the applicable purchase order, Vapotherm will be entitled to the following as an alternative, in its sole discretion, to its rights under Section 3.6 and Section 13.2(a): + +(1) a [* * *]% reduction in the price of each Cartridge in the shipment for every [* * *] the shipment is delayed (from the Required Ship Date specified in the Purchase Order) to a maximum of [* * *]%. + +3.6 Delivery Default Rights. If more than [* * *] days have passed since the delivery date for any Cartridges and Medica has, for any reason other than an Event of Force Majeure, failed to deliver those Cartridges, then, in addition to any other remedies it might have under this Agreement or by law, Vapotherm may cancel that purchase order or the portion thereof relating to those cartridges, as applicable. + +3.7 Invoices and Payment Terms. On delivery by Medica of a shipment of Cartridges in accordance with Section 3.3, Medica shall issue to Vapotherm an invoice for that shipment stating a price consistent with the terms of this Agreement. Vapotherm shall pay each such invoice in full within [* * *] Calendar Days from the date of invoice, unless Vapotherm has rejected the shipment in question in accordance with Section 4.2. -3- + +[* * *] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +3.8 Delay in Payment. Upon delay of payment beyond [* * *] days from invoice date, Medica at its' sole discretion may levy an increase to the net transfer price a [* * *]% per week to a maximum of [* * *]%. + +ARTICLE 4 QUALITY OF THE CARTRIDGE + +4.1 Conformity with Specifications. Any Cartridges that Medica manufactures under this Agreement must conform to the specifications in Exhibit D (the "Specifications") and (2) be manufactured, labeled, packaged, stored, and tested (while in the possession of, stored by, or under the control of Medica) in accordance with cGMP. Medica shall provide adequate packaging for protection during normal shipping and handling environments. + +4.2 Conditions to Rejection. In order to be entitled to reject any Cartridge, Vapotherm must notify Medica of any failure of the Cartridge to meet the Specifications or otherwise comply with this Agreement. Misuse or improper storage will not be grounds for rejection. + +4.3 Rejection. Vapotherm may reject any Cartridge that does not meet the Specifications or otherwise comply with this Agreement (any such Cartridge, a "Nonconforming Cartridge"). If Medica accepts that Vapotherm was entitled to reject the Nonconforming Cartridge(s) and Vapotherm has already paid the purchase price for the Nonconforming Cartridge(s), then, within [* * *] Calendar Days after receiving notice from Vapotherm under Section 4.2, Medica shall, at Vapotherm's election, either replace the Nonconforming Cartridge(s) at no additional cost to Vapotherm or reimburse Vapotherm for the purchase price of the Nonconforming Cartridge(s) via wire transfer. Further, if Medica accepts that Vapotherm was entitled to reject the Nonconforming Cartridge(s) and Vapotherm has not already paid the purchase price for the Nonconforming Cartridge(s), then, within [* * *] Calendar Days after receiving notice from Vapotherm under Section 4.2, Medical shall, at Vapotherm's election, either replace the Nonconforming Cartridge(s) at no additional to Vapotherm beyond the original purchase price charged to Vapotherm for the Nonconforming Cartridge(s) or cancel that purchase order or the portion thereof relating to the Nonconforming Cartridge(s), s applicable. + +(b) If Medica does not agree that one or more Cartridges constitute Nonconforming Cartridges, the Joint Review Committee, consisting of quality assurance representatives from both companies, must consider the matter. If after consideration by the Joint Review Committee the parties are unable to reach agreement within [* * *] Calendar Days after the date Medica received notice from Vapotherm under Section 4.2, they shall submit the dispute to arbitration in accordance with Section 14.5. -4- + +[* * *] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +4.4 Nonconformity Default Rights. If for any reason other than an event of Force Majeure Medica (1) fails to replace any Nonconforming Cartridge as required by Section 4.3 or (2) fails to replace any Nonconforming Cartridge within [* * *] Business Days after a dispute regarding whether any rejected quantity of Cartridge constitutes Nonconforming Cartridge is decided in Vapotherm's favor, then, in addition to any other remedies it might have under this Agreement or by law, Vapotherm may cancel that purchase order or the portion thereof of relating to the Nonconforming Cartridge, as applicable. + +4.5 Acceptance of Cartridges. If Vapotherm does not notify Medica that one or more Cartridges do not meet the Specifications or otherwise fail to comply with this Agreement, those Cartridges will be deemed to have been accepted by Vapotherm as being fully compliant with the Specifications and this Agreement. + +4.6 Quality Monitoring. Medica will periodically sample and trend the Cartridge performance in accordance with specification and Medica's internal production tests to monitor process and product control. Medica will share the results with Vapotherm as part of the Production Process as outlined in Article 5. + +4.7 If Medica becomes aware of any Cartridge problem that could endanger patient health, Medica will report the problem to Vapotherm within 24 hours. + +ARTICLE 5 PRODUCTION PROCESS + +5.1 Joint Review Committee. The parties shall establish and hold teleconference meetings of a Joint Review Committee annually. The Joint Review Committee shall consist of six (6) members, including the head of each party's engineering, quality assurance and material management divisions or their designees. + +5.2 Process Development. Medica shall use [* * *] efforts to develop technical know-how that would permit them to manufacture the Cartridge less expensively and shall no less than semiannually furnish the Joint Review Committee with a detailed report as to their progress in this area. Vapotherm and Medica shall at the time of each report determine jointly the actions to be taken with respect to these findings. + +5.3 Inventory of Raw Materials and Spare Parts. Medica shall at all times use best efforts to efficiently manage their inventories of raw materials so as to enable Medica to meet Vapotherm's demand as specified in the Rolling Forecasts. Medica shall also maintain, consistent with the manufacturer's recommendations, an inventory of spare parts of all equipment they use to manufacture the Cartridge. + +5.4 [* * *] -5- + +[* * *] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +ARTICLE 6 QUALITY SYSTEM + +6.1 General Quality Statement. The Cartridges shall be manufactured, assembled and tested in compliance with (a) the Specifications, (b) Vapotherm supplied specifications and documentation; (c) relevant ISO and FDA standards, guidelines and regulations, but not limited to ISO 13485, US 21CFR 820 FDA ("QSR"), EU MDD 93/43 and Canadian MDR (d) Medica's design and manufacturing policies followed by Medica as of the date hereof ("Medica's Quality System"), and (e) applicable U.S. and foreign Laws, including but not limited to FDA standards, guidelines and regulations. During the Term and notwithstanding Section 6.2 below, Medica shall not make any material change to the Specifications or Medica's Quality System without Vapotherm's prior written approval. For purposes of this Section 6.1, a material change to either the Specifications or Medica's Quality System shall mean any change that could have a material adverse effect on the safety or efficacy of the Cartridges or System, or that would be reasonably likely to have a material effect on the proper integration of the Cartridges or System. + +6.2 Quality System Changes. Any changes to the status of the Medica Quality System shall be reported to Vapotherm Quality Assurance and Vapotherm Executive Management by sending notice in accordance with Section 14.8 within 72 hours. Status changes may include, but not be limited to the following: + +(a) ISO Certifications or CE Marking status charges; + +(b) Process or material failures, including significant vendor related failures or relevant vendor terminations due to quality related issues; and + +(c) Specification changes for supplemental manufacturing processes, equipment, or materials. + +6.3 Vendor Quality. The quality ratings of vendors that supply Medica with materials used in the manufacture/assembly and/or testing of the Cartridges shall be reported to Vapotherm Quality Assurance in a manner consistent with the Medica Quality System. Any collective actions, regulatory holds, suspensions, or terminations of vendors related to the Cartridges shall be reported to Vapotherm Quality Assurance in a timely manner. + +6.4 Vigilance System. Vapotherm has an established Authorized Representative to communicate complaints and vigilance reports that results from the use of the Cartridges. + +(a) Complaint investigations shall be a shared process between Medica (QA, manufacturing, and engineering) and Vapotherm (QA, Manufacturing, and R&D). + +(b) All investigation reports shall be issued jointly and in a timely manner to satisfy the requirements for vigilance reporting (when necessary). -6- + +[* * *] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +(c) When a complaint is determined to be a vigilance reportable event then Vapotherm shall be responsible for administering and reporting to both Medica and the necessary competent authorities any Cartridge related vigilance incidents within [* * *] days or as outlined in the Vapotherm Quality System. + +(d) Vapotherm shall copy in writing via email or facsimile to Medica Quality Assurance within 24-48 hours on all and any vigilance reporting, including health outcome, relationship between the incidents, and timeliness of reporting the vigilance incident to the Competent Authorities. + +ARTICLE 7 OTHER OBLIGATIONS OF MEDICA + +7.1 Debarment Certification. Medica hereby agrees to review the United States Department of Health and Human Services Office of the Inspector General and General Services Administration exclusion lists upon initially hiring and annually thereafter to ensure that any employee or manager responsible for providing services under is not excluded from any United States Federal or State health care program. Medica hereby represents and warrants that neither it, nor any of its officers, directors, or managers, or employees are currently excluded from, or have ever been excluded from, any United States Federal or State health care program or, if previously excluded, have been fully reinstated, in which case Medica shall provide Vapotherm written proof of such reinstatement and such other information as Vapotherm may require describing the reasons for the prior exclusion. Medica shall immediately notify Vapotherm, in writing, in the event that it knows, or has reason to know, that any United States Federal or State health care program has initiated proceedings to sanction, bar, suspend or exclude Medica, or any of its officers, directors, managers or employees. If Medica fails to comply with any of the foregoing provisions, Vapotherm may terminate the Agreement immediately upon written notice to Medica. + +7.2 Permits and Certifications. Medica currently has all Permits and Certifications necessary to enable it to perform all its obligations under this Agreement. At all times during the Term Medica shall maintain those Permits and secure any additional Permits that become necessary. + +7.3 Manufacturing Problems. Medica shall promptly notify Vapotherm if it experiences any significant problems in manufacturing Cartridges, shall use [* * *] efforts to resolve those problems, and shall keep Vapotherm informed of the status of those efforts. + +7.4 Insurance. Medica shall at its cost obtain and maintain one or more insurance policies providing coverage of at least Euro [* * *] in the aggregate that cover Medica for fire, theft, fidelity, product liability, and any and all potential claims, suits, losses, expenses, or damages arising out of Medica's obligations under this Agreement. At Vapotherm's request to Medica from time to time, Medica shall furnish Vapotherm with certification of insurance evidencing that insurance and shall provide at least [* * *] Business Days prior written notice to Vapotherm of any cancellation of or decrease in the dollar amount of coverage provided by any such policy. Vapotherm shall have the right to maintain such insurance coverage on Vapotherm's behalf and at Vapotherm' s expense in the event of nonpayment of premiums or lapse of coverage. -7- + +[* * *] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +(b) Vapotherm shall at its cost obtain and maintain product-liability insurance coverage in the amount of $[* * *] in relation to the Cartridge. At the request of Medica from time to time, Vapotherm shall famish Medica with certification of insurance evidencing that insurance and shall endeavour to provide at least [* * *] Business Days prior written notice to Medica of any cancellation of or decrease in the amount of coverage provided by any such policy. + +ARTICLE 8 INSPECITONS; RECORDS + +8.1 Notification of Inquiries and Inspections. Medica shall notify Vapotherm within [* * *] Business Days of any written or oral inquiries, notifications, or inspection activity by any Governmental Authority in regard to Medica's manufacture of Cartridges. Medica shall permit up to two individuals selected by Vapotherm to attend any such inspections and shall provide Vapotherm with an accurate and reasonably complete description of any such inquiries, notifications, or inspections. Medica shall also furnish to Vapotherm (1) within [* * *] Business Days after receipt any report or correspondence issued by any Governmental Authority in connection with any such inquiries, notifications, or inspections, and (2) not later than [* * *] Business Days prior to the time Medica proposes to send it, a copy of any proposed response or explanation relating to any such inquiries, notifications, or inspections or any report or correspondence issued by any Governmental Authority in connection therewith (each, a "Proposed Response"), in each case redacted of trade secrets or other confidential or proprietary information of Medica that are unrelated to Medica's obligations under this Agreement or are unrelated to manufacture of Cartridges. Medica shall discuss with Vapotherm any Proposed Response and shall incorporate in that Proposed Response any reasonable comments provided by Vapotherm with respect to that Proposed Response. After filing a response with any Governmental Authority, Medica shall within [* * *] Business Days notify Vapotherm of any further contacts with that Governmental Authority with respect to that response. + +8.2 Access to Medica Facilities and Records. Medica shall at Vapotherm's request give Vapotherm and any designee of Vapotherm reasonable access to Medica's facilities, procedures, and books and records, including Medica's protocols, standard operating procedures (SOPs), equipment specifications, and manufacturing records, for purposes of (1) observing manufacturing, operations and (2) auditing and inspecting Medica's facilities for compliance with applicable Laws and the terms of this Agreement. Vapotherm acknowledges that it and its designee may be permitted only to review, rather than obtain copies of, certain proprietary documents of Medica; Medica shall at Vapotherm's request provide Vapotherm with a copy of any other document that Vapotherm requests provided it is reasonable and applicable to the Cartridges or System. -8- + +[* * *] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +8.3 Records. Medica shall maintain all records necessary to evidence compliance with all applicable Laws and other requirements of applicable Governmental Authorities relating to the manufacture of the Cartridge. Medica shall also maintain records with respect to its costs, obligations, and performance under this Agreement. All such records shall be maintained for a period of not less than two years from the date of expiration of each Cartridge batch to which those records pertain, or such longer period as may be required by Law or cGMPs. + +ARTICLE 9 CARTRIDGE RECALLS + +9.1 Cartridge Recalls. If any Governmental Authority withdraws its approval to sell the Cartridge in any country or issues a directive or request that some or all Cartridges be recalled for safety reasons relating to the Cartridge or Vapotherm reasonably determines that some or all Cartridges should be recalled, and if that recall is due to any reason other than Medica having manufactured Cartridges that fail to conform to the Specifications or that was not manufactured in accordance with any applicable Laws, Vapotherm shall pay all costs, including Medica's reasonable out-of-pocket expenses, associated with that recall. Those actions may include developing reports on records pertaining to the lot traceability, assist in conducting an investigation to rule out a root cause for failure and other related activities requiring Medica's resources. Vapotherm shall provide Medica in writing specific instructions as to actions required. Medical shall in good faith provide an estimate for expenses if the request has material burden. + +9.2 Notice of Events that May Lead to Cartridge Recall. Medica, on the one hand, and Vapotherm, on the other hand, shall keep each other fully and promptly informed of any notification, event, or other information, whether received directly or indirectly, that might affect the marketability, safety or effectiveness of the Cartridge or might result in a recall of any Cartridges by any Governmental Authority. + +9.3 Recall Due to Breach By Medica. If there occurs any Cartridge recall that is due to Medica having manufactured one or more Cartridges that fail to conform to the Specifications or that were not manufactured in accordance with any applicable Laws, Medica will be responsible for the costs of that recall. Medica shall promptly, at the election of Vapotherm, compensate Vapotherm for the Cartridge so recalled by either replacing without charge Cartridges recalled or refunding Vapotherm the price paid by Vapotherm to Medica for the Cartridges recalled, plus freight, insurance, sales taxes, and all other costs duties, fees, and expenses paid by Vapotherm in connection with such recall. + +9.4 Definition of Recall. For purposes of this Article 8, "recall" means any action by Vapotherm or any of its Affiliates, or either Medica or any of its Affiliates, to recover title or possession or halt distribution or use of any Cartridges sold or shipped to any other Persons. The term "recall" also applies to Cartridge that would have been subject to recall if it had been sold or shipped. -9- + +[* * *] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +9.5 Recall Process. The purpose of initiating a "recall", either party will notify the other party immediately regarding the need within 24 hrs. Vapotherm will be responsible for notifying the appropriate regulatory bodies with respect to the Cartridge. Medica will provide best efforts to support Vapotherm with the appropriate regulatory documentation in an timely fashion. Medica will make efforts to conduct the necessary investigations as it pertains to the Cartridge and report factual data has required. Medica will also take necessary efforts to take the appropriate corrective action and make best efforts to remedy the disruption in supply. + +ARTICLE 10 PUBLICITY; CONFIDENTIALITY; INTELLECTUAL PROPERTY + +10.1 Publicity. Except as required by Law or the standards of any securities or regulatory authority, including without limitation the National Association of Securities Dealers, Medica and Vapotherm may not make any official press release, announcement, or other formal publicity relating to the transactions that are the subject of this Agreement without first obtaining in each case the prior written consent of Vapotherm and Medica, respectively (which consent may not be unreasonably withheld). If any party is required to file this Agreement with the Securities and Exchange Commission or another applicable securities regulatory authority, that party must seek confidential treatment for any provisions of this Agreement that either party believes would disclose trade secrets, confidential commercial, or financial information and thereby impair the value of the contractual rights represented by this Agreement or provide detailed commercial and financial information to competitors or other Persons. Except as required by Law or the standards of any securities regulatory authority, Medica and Vapotherm may not use the name Vapotherm and Medica, respectively, or the name of any director, officer or employee thereof or any adaptation thereof without the prior written approval of Vapotherm and Medica, respectively. + +(b) Medica shall send to Vapotherm for its approval at least [* * *] Business Days before it is filed or submitted any publication, abstract, or patent application resulting from this Agreement. The authorship on any publication or abstract will be determined by agreement of the parties or as deemed scientifically appropriate. Any publication resulting from this Agreement will be delayed or prohibited if, in Vapotherm's reasonable opinion, delay or prohibition is required in order to file or procure patent application or rights protection in respect of any invention or discovery arising from this Agreement. Publication by Medica of any information relating to the Cartridge is subject to the provisions of Section 10.2. + +10.2 Confidentiality. It is contemplated that Medica may from time to time disclose Confidential Information to Vapotherm, or vice versa. Medica shall disclose such Vapotherm Confidential Information and shall not use any Vapotherm Confidential Information other than in connection with performing its obligations hereunder, and Vapotherm shall not disclose Medica Confidential Information and shall not use any Medica Confidential Information other than in connection with performing its obligations hereunder. + +(b) A party receiving Confidential Information shall only disclose it to those of its Representatives who need to review that Confidential Information in connection with that party's performance of its obligations and evaluation of its rights under this Agreement. Any party who so discloses any Confidential Information pursuant to this Section 10.2(b) shall (1) inform those Representatives of the confidential nature of that Confidential Information, and (2) direct those Representatives to keep that Confidential Information confidential. -10- + +[* * *] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +(c) The provisions of this Section 10.2 will survive termination or expiration of this Agreement and will continue for a period of 5 years from the date of that termination or expiration. + +10.3 Pre-existing and Independently Developed Intellectual Property. Each party is and shall remain the owner of its Intellectual Property in existence as of the Effective Date and all such rights that a party acquires or develops independent of this Agreement ("Baseline IP"). + +10.4 Ownership. + +(a) Except as specified elsewhere in Section 10.4, all rights in patents, inventions, processes, discoveries, and other research materials and any other novel or valuable information reflected in any medium that arise or are created during the course of this Agreement are the property of the creating party. + +(b) Any additions, improvements and enhancements to Vapotherm Baseline IP which are made during the course of this Agreement shall solely be the property of Vapotherm ("Vapotherm Inventions"). + +(c) Any additions, improvements and enhancements to Medica Baseline IP which are made during the course of this Agreement shall solely be the property of Medica ("Medica Inventions"). + +(d) It is understood and agreed that Vapotherm shall be free and without restriction to develop, market, license, and sell products and technology as it may see fit (including products and technology that may) or may not compete with the Cartridges), provided that Vapotherm strictly and fully complies with its obligations concerning Medica Confidential Information under Section 10.2 (Confidentiality). + +(e) It is understood and agreed that Medica shall be free and without restriction to develop, market, license, and sell products and technology based on Medica proprietary membrane with an intended use different from oxygen delivery humidification for patients. + +10.5 [* * *] + +(b) [* * *] + +10.6 Reservation of All Other Rights. Except as expressly set forth in this Agreement, nothing contained herein may be construed as doing the following: -11- + +[* * *] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +(a) Giving Medica any rights to any Intellectual Property of Vapotherm or any other proprietary technology of Vapotherm (whether Vapotherm Baseline IP or Vapotherm Inventions arising in connection with this Agreement), including without limitation any of Vapotherm's patent rights relating to the design, development, testing, use and sale of the System or the Cartridge; or + +(b) Giving Vapotherm any rights to any Intellectual Property of Medica or any other proprietary technology of Medica (whether Medica Baseline IP or Medica Inventions arising in connection with this Agreement). + +ARTICLE 11 REPRESENTATIONS + +11.1 Representations of Medica. Medica represents to Vapotherm as follows: + +(a) Medica is a corporation validly existing under the laws of its jurisdiction of organization with the power to own all of its properties and assets and to carry on its business as it is currently being conducted. + +(b) Medica has the power to execute and deliver this Agreement and to perform its obligations under this Agreement. + +(c) Medica's Chief Executive Officer, or Amministratore Unico (AU), has duly authorized Medica to execute and deliver this Agreement and perform its obligations under this Agreement, and no other corporate proceedings of Medica are necessary with respect thereto. + +(d) This Agreement constitutes its valid and binding obligation, enforceable in accordance with its terms, except as enforceability is limited by (A) any applicable bankruptcy, insolvency, reorganization, moratorium or similar law affecting creditors' rights generally, or (B) general principles of equity, whether considered in a proceeding in equity or at law. + +(e) Medica is not required to obtain the Consent of any Person, including the Consent of any party to any Contract to which it is a party, in connection with execution and delivery of this Agreement and performance of its obligations under this Agreement. + +(f) Medica is the rightful owner or licensee of any Intellectual Property that it may use in performing its obligations under this Agreement. + +(g) To Medica's knowledge, the Medica Baseline IP does not infringe or violate any patent, copyright, trademark, or any other proprietary right of a third party. + +(h) Medica's execution and delivery of this Agreement and performance of its obligations under this Agreement do not (A) violate any provision of its articles of incorporation or by-laws, as applicable, as currently in effect, (B) conflict with, result in a breach of, constitute a default under (or an event which, with notice or lapse of time or both, would constitute a default under), accelerate the performance required by, result in the creation of any Lien upon any of its properties or assets under, or create in any party the right to accelerate, terminate, modify, or cancel, or require any notice under, any Contract to which it is a party or by which any of its properties or assets are bound, or (C) violate any Law or Order currently in effect to which it is subject. -12- + +[* * *] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +11.2 Representations of Vapotherm. Vapotherm represents to Medica as follows; + +(a) Vapotherm is a corporation validly existing and in good standing under the law of the State of Maryland with the power to own all of its properties and assets and to carry on its business as it is currently being conducted. + +(b) Vapotherm has the power to execute and deliver this Agreement and to perform its obligations under this Agreement. + +(c) This Agreement constitutes the valid and binding obligation of Vapotherm, enforceable in accordance with its terms, except as enforceability is limited by (A) any applicable bankruptcy, insolvency, reorganization, moratorium or similar law affecting creditors' rights generally, or (B) general principles of equity, whether considered in a proceeding in equity or at law. + +(d) Vapotherm's execution and delivery of this Agreement and performance of its obligations under this Agreement do not (A) violate any provision of Vapotherm's articles of incorporation or by-laws as currently in effect, or (B) violate any Law or Order currently in effect to which Vapotherm is subject. + +ARTICLE 12 INDEMNIFICATION + +12.1 Indemnification. Medica shall indemnify Vapotherm, each Affiliate of Vapotherm, each Representative of Vapotherm, and the heirs, executors, successors, and assigns of any of the foregoing, against the following Indemnifiable Losses: a. Indemnifiable Losses arising out of or relating to a claim made for bodily injury, including death, or property damage to the extent that such claim arises out of or results from the failure of the Cartridges to comply with the Specifications or Medica's failure to comply with Medica's Quality System; b. Indemnifiable Losses arising out of or relating to any claim, demand, action or proceeding based upon infringement of a patent, trademark, copyright or trade secret, or similar intellectual property rights as a result of Vapotherm's marketing, promotion or distribution of the Cartridges; c. Indemnifiable Losses arising out of relating to any breach of this Agreement by Medica or any negligent or fraudulent act or willful misconduct of Medica or its employees, other agents, subcontractors or representatives in connection with this Agreement; or -13- + +[* * *] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +d. Indemnifiable Losses arising out of or relating to any inaccuracy in any representations of Medica contained in this Agreement. + +(b) Vapotherm shall indemnify each Medica Entity, each Affiliate of each Medica Entity, each Representative of each Medica Entity, and the heirs, executors, successors, and assigns of any of the foregoing, against the following Indemnifiable Losses: + +(i) Indemnifiable Losses arising out of or relating to any claim, demand, action or proceeding based upon infringement of a patent, trademark, copyright or trade secret, or similar intellectual property rights as a result of Vapotherm's marketing, promotion or distribution of the System, except to the extent such claim, demand, action or proceeding arising out of or relates to the Cartridge; + +(ii) Indemnifiable Losses arising out of or relating to any breach of this Agreement by Vapotherm or any negligent or fraudulent act or willful misconduct of Vapotherm or its employees, other agents, subcontractors or representatives in connection with this Agreement; or + +(iii) Indemnifiable Losses arising out of or relating to any inaccuracy in any representations of Vapotherm contained in this Agreement. + +12.2 Procedures Relating to Indemnification. In order to be entitled to indemnification under this Article 12 in connection with an Indemnifiable Loss, the party seeking indemnification (the "Indemnified Party") must: (1) notify the party obligated to indemnify it (the "Indemnifying Party") in writing, and in reasonable detail, of any third party claims, demands, lawsuits, proceedings or action ("Third Party Claims") as soon as possible but in any event within [* * *] Business Days after receipt of notice of that Third Party Claim; and (2) deliver to the Indemnifying Party as soon as possible but in any event within [* * *] Business Days after the Indemnified Party receives a copy of all notices and documents (including court papers) delivered to that Indemnified Party relating to that Third Party Claim. + +(b) In the event of a Third Party Claim against an Indemnified Party, the Indemnifying Party may participate in the defense of that Third Party Claim and, if it so chooses, assume at its expense the defense of that Third Party Claim with counsel selected by the Indemnifying Party and reasonably satisfactory to the Indemnified Party. If the Indemnifying Party so elects to assume the defense of a Third Party Claim, the Indemnifying Party will not be liable to the Indemnified Party for any legal expenses subsequently incurred by the Indemnified Party in connection with the defense of that Third Party Claim, except that if, under applicable standards of professional conduct, there exists a conflict on any significant issue between the Indemnified Party mid the Indemnifying Party in connection with that Third Party Claim, the -14- + +[* * *] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +Indemnifying Party shall pay the reasonable fees and expenses of one additional counsel to act with respect to that issue to the extent necessary to resolve that conflict. If the Indemnifying Party assumes defense of any Third Party Claim, the Indemnified Party will be entitled to participate in the defense of that Third Party Claim and to employ counsel, at its own expense, separate from counsel employed by the Indemnifying Party, it being understood that the Indemnifying Party will be entitled to control that defense. The Indemnifying Party will be liable for the fees and expenses of counsel employed by the Indemnified Party for any period during which the Indemnifying Party did not assume the defense of any Third Party Claim (other than during any period in which the Indemnified Party failed to give notice of the Third Party Claim as provided above and a reasonable period after such notice). If the Indemnifying Party chooses to defend or prosecute a Third Party Claim, all the parties shall cooperate in the defense or prosecution of that Third Party Claim, including by retaining and providing to the Indemnifying Party records and information reasonably relevant to that Third Party Claim, and making employees available on a reasonably convenient basis. If the Indemnifying Party chooses to defend or prosecute any Third Party Claim, the Indemnified Party will agree to any settlement, compromise or discharge of that Third Party Claim that the Indemnifying Party recommends, except that the Indemnifying Party may not without the Indemnified Party's prior written consent agree to entry of any judgment or enter into any settlement that provides for injunctive or other non-monetary relief affecting the Indemnified Party or that does not include as a unconditional term that each claimant or plaintiff give to the Indemnified Party a release from all liability with respect to that Third Party Claim. Whether or not the Indemnifying Party has assumed the defense of a Third Party Claim, the Indemnified Party shall not admit any liability with respect to, or settle, compromise or discharge, that Third Party Claim without the Indemnifying Party's prior written consent. + +12.3 No Liability for Consequential Damages. No party will be liable to any other for any indirect, consequential, or special damages or for loss of profits. This limitation does not, however, apply to any obligation of either party to indemnify the other in connection with any Indemnifiable Loss. + +12.4 Limitation on Liability. + +Notwithstanding any other provision contained in this Agreement, each party's maximum aggregate liability to the other party for any and all causes whatsoever, and each party's remedy, regardless of the form of action, whether in contract or tort, including negligence, and whether or not pursuant to the indemnification provisions contained in Section 12 and whether or not such party is notified of the possibility of damage to the other party, shall be limited to $[* * *]. + +ARTICLE 13 + +TERM AND TERMINATION; BUSINESS CONTINUITY + +13.1 Term. The term of this Agreement is three years from and including the date of this Agreement (the "Initial Term"), with automatic renewal for additional successive one-year terms (each a "Renewal Term" and together wit the Initial Term, the "Term") unless no later than [* * *] days prior to the end of the Initial Term, or any Renewal Term either party notifies the other that it wishes to terminate this Agreement effective the end of the Initial Term or that Renewal Term, as applicable. -15- + +[* * *] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +13.2 Termination. This Agreement may be terminated as follows: (1) by Vapotherm upon [* * *] Business Days' written notice to Medica if any representation made in this Agreement by Medica was materially inaccurate when made and either (1) that inaccuracy has contributed to Vapotherm's incurring Indemnifiable Losses or (2) Medica fails to take action to render the inaccurate representation accurate as if it were made on the day Vapotherm would otherwise be entitled to terminate this Agreement under this Section 13.2(a)(l); (2) by Medica upon [* * *] Business Days; written notice to Vapotherm if any representation made in this Agreement by Vapotherm was materially inaccurate when made and either (1) that inaccuracy has contributed to either or both Medica Entities' incurring Indemnifiable Losses or (2) Vapotherm fails to take action to render the inaccurate representation accurate as if it were made on the day Medica would otherwise be entitled to terminate this Agreement pursuant to this Section 13.2(a)(2); (3) by Vapotherm immediately if Medica has breached any of its material obligation under this Agreement and, if it is curable, has not cured that breach prior to expiration of a [* * *]-Business-Day period following notice of the breach from Vapotherm; (4) by Medica immediately if Vapotherm has breached any of its material obligations under this Agreement and, if it is curable, has not cured that breach prior to expiration of a [* * *]-Business-Day period following notice of the breach from Medica; (5) by Vapotherm immediately if there occurs an Event of Insolvency with respect to Medica; (6) by Medica immediately if there occurs an Event of Insolvency with respect to Vapotherm; (7) by Vapotherm, if for any reason other than an Event of Force Majeure Medica fails to deliver within [* * *] days after the required delivery date, or on more than two occasions in any [* * *]-day period fails to deliver within [* * *] days after the required delivery day, any shipment of Cartridge it is required to deliver pursuant to Section 3.2, Section 4.2, or Section 9.3; or (8) by Medica or Vapotherm on [* * *] Business Days' prior written notice to Vapotherm or Medica, respectively, if due to an Event of Force Majeure (A) Vapotherm or (B) Medica or both of them, respectively, is prevented from performing an obligation under this Agreement for more than [* * *] days, unless prior to the end of the [* * *]-Business-Day period the Event of Force Majeure ceases to exist and the party prevented from performing resumes performance under this Agreement and notifies the party giving the notice of termination. -16- + +[* * *] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +(b) The parties may terminate this Agreement at any time by written agreement. + +13.3 Effect of Termination. + +(a) Upon any termination (including expiration) of this Agreement, each party shall return to the other party all documents and other tangible items to it or its employees or agents have received or created pursuant to this Agreement pertaining, referring, or relating to Confidential Information of the other party. + +(b) Termination of this Agreement will not affect rights and obligations of either party that may have accrued prior to the date of termination or any other obligation contained in Section 5.5, 6.3, 6.4, 8.1, 8.3, Article 9, 10.1, 10.2, 10.3, 10.4, 10.5(b), 10.6, Article 12, Article 13, and Sections 14.3, 14.4, and 14.5. All rights and obligation decay after 2 (two) years from termination or expiration. + +(c) Upon any termination (including expiration) of this Agreement, Vapotherm shall pay to Medica, and Medica shall pay to Vapotherm, all amounts payable up to the date of termination but not yet paid. + +(d) The termination or expiration of this Agreement shall not relieve either party of its responsibility to comply in all material respects with any statutory or regulatory requirements associated with the System and/or the Cartridges. + +13.4 Business Continuity. + +Medica agrees to have the capability to manufacture in either (2) facilities of the Medica Group in the event of disruption for any reason and deliver the Cartridges within [* * *] weeks. + +13.4.1 Medica agrees to maintain [* * *] weeks [* * *] of inventory in the event of business disruption consistent with section 2 of the agreement. + +13.4.2 Notwithstanding anything to the contrary in this Agreement, Medica shall neither enter into an agreement to nor shall consummate (a) any Change of Control or (b) any sale of all or substantially all of its assets relating to the manufacture of the Cartridges unless (a) it provides Vapotherm written notice of any such proposed transaction, which notice shall include the specific terms and conditions of the proposed transaction, including the identify of the proposed acquirer, (b) Medica offers to enter into such transaction with Vapotherm on substantially the same terms and conditions, and (c) with [* * *] days of such notice, Vapotherm declines to accept such offer. For purposes of this Agreement, "Change of Control" means (i) the acquisition, directly or indirectly, by any person or group (within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended) that is not a subsidiary or Affiliate -17- + +[* * *] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +(as defined below) of Medica of the beneficial ownership of securities of Medica possessing more than fifty percent (50%) of the total combined voting power of all outstanding securities of Medica; (ii) a merger or consolidation in which neither Medica nor a subsidiary or Affiliate of Medica is the surviving entity; (iii) a reverse merger in which Medica is the surviving entity but in which securities possessing more than fifty percent (50%) of the total combined voting power of Medica's outstanding securities are transferred to or acquired by a person or persons different from the persons holding those securities immediately prior to such merger and where such persons are not a subsidiary or Affiliate of Medica; or (iv) the sale, transfer or other disposition of all or substantially all of the assets of Medica to a person or entity that is not a subsidiary or Affiliate of Medica. + +ARTICLE 14 + +MISCELLANEOUS + +14.1 Definitions. When used in this Agreement, the following terms have the - following meanings: + +"Affiliate" means, with respect to any given Person, any other Person at the time directly or indirectly controlling, controlled by or under common control with that Person, or (2) any director, officer or employee of that Person. For purposes of this Agreement, "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise. + +"Business Day" means any Monday, Tuesday, Wednesday, Thursday, or Friday that is not a day on which banking institutions in the State of New York authorized by law, regulation or executive order to close. + +"cGMPs" means current Good Manufacturing Practices (as provided for, respectively, in the Rules Governing Medicinal Products in the European Community Volume 4 (Guide to Good Manufacturing Practice for Medicinal Products) and by the FDA as set out in 21 C.F.R. 210 and 21 C.F.R. 211, as amended from time to time). + +"Confidential Information" means all data, specifications, training, and any other know-how related to the design, development, manufacture, or performance of the System or the Cartridge, the customers, finances, methods, research, processes or procedures of a party, as well as all other information and data provided by either party to the other party pursuant to this Agreement (i) in written or other tangible medium and marked as confidential, or (ii) if disclosed orally or displayed, confirmed in writing within [* * *] Business Days after disclosure and marked as confidential, or (iii) that by the nature of the information or the circumstances surrounding disclosure, should in good faith be treated as confidential, except that the term "Confidential Information" does not include the following: (1) information that is or becomes generally available to the public other than as a result of a breach of this Agreement by the receiving party or its Representatives; -18- + +[* * *] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +(2) information that was within the receiving party's possession or knowledge prior to its being furnished to the receiving party by or on behalf of the disclosing party, on condition that the source of that information was not bound by a confidentiality agreement with or other contractual, legal or fiduciary obligation of confidentiality to the disclosing party or any other Person with respect to that information; (3) information that is or becomes available to the receiving party on a non-confidential basis from a source other than the disclosing party or any of its Representatives, on condition that that source was not bound by a confidentiality agreement with or other contractual, legal or fiduciary obligation of confidentiality to the disclosing party or any other Person with respect to that information; (4) information that is independently developed by the receiving party without use of Confidential Information and otherwise in a manner not .inconsistent -with this Agreement; or (5) information that is required to be disclosed by law, provided that the disclosing Party is promptly notified by the receiving Party in order to provide the disclosing Party an opportunity to seek a protective order or other relief. + +"Consent" means any approval, consent, ratification, filing, declaration, registration, waiver, or other authorization. + +"Contract" means any oral or written agreement, contract, obligation, promise, arrangement, or undertaking that is legally binding. + +"Event of Insolvency" with respect to any Person means any of the following: (1) the institution by that Person of proceedings under the United States Bankruptcy Code, or any other applicable U.S. federal or state Law or any applicable foreign Law seeking an order for relief; (2) the consent of that Person to the institution of bankruptcy or insolvency proceedings against that Person; (3) the filing by that Person of a petition seeking reorganization or release under the Federal Bankruptcy Reform Act or any other applicable U.S. federal or state Law or applicable foreign Law, or the consent by that Person to the filing of any such petition or to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of that Person or of any substantial part of the property of that Person; (4) the making by that Person of an assignment for the benefit of creditors; -19- + +[* * *] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +(5) admission by that Person of its inability to pay its debts generally as they become due; (6) the entry of a decree or order by a court having jurisdiction adjudging that Person bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of that Person under the U.S. Bankruptcy Code or any other applicable U.S. federal or state Law or any applicable foreign Law, or appointing a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of that Person, or of any substantial part of the property of that Person, or ordering the winding up or liquidation of the affairs of that Person, and (A) that Person consents to that decree or order or (B) that decree or order remains unstayed and in effect for more than [* * *] consecutive days. + +"FDA" means the U.S. Food and Drug Administration. + +"FOB" means "Free on Board," as that term is defined in INCOTERMS 2000, + +"Governmental Authority" means any (1) nation, state, comity, city, town, village, district, or other jurisdiction of any nature, (2) federal, state, local, municipal, or other government, whether U.S. or foreign, (3) governmental or quasi-governmental authority of any nature (including any governmental agency, branch, department, official, or entity and any court or other tribunal, including an arbitral tribunal), (4) multi-national organization or body including the EU and notified bodies, or (5) body exercising, or entitled to exercise, any administrative, executive, judicial, legislative, police, regulator)', or taxing power of any nature. + +"Indemnifiable Losses" means all losses, liabilities, taxes, damages, deficiencies, obligations, fines, expenses, judgments or settlements resulting from Third Party Claims that are incurred or suffered by an Indemnified Party, including interest and penalties with respect thereto and out-of-pocket expenses and reasonable attorneys' and accountants' and experts' fees and expenses incurred in the investigation or defense of any of the same or in asserting, preserving or enforcing any of the Indemnified Party's rights hereunder, net of any amounts recovered or recoverable under any insurance policy. + +"Intellectual Property" means, with respect to any Person, all unpatented ideas, inventions, processes, discoveries trademarks, patents, copyrights, and any applications for registration thereof, and trade secrets and know-how of that Person, whether owned, used, or licensed by that Person as licensee or licensor. + +"Law" means any federal, state, local, municipal, foreign, international, multinational, or other administrative order, constitution, law, ordinance, principle of common law, regulation, statute, or treaty. + +"Lien" means any charge, claim, community property interest, condition, equitable interest, lien, option, pledge, security interest, right of first refusal, or restriction of any kind, including any restriction on use, voting, transfer, receipt of income, or exercise of any other attribute of ownership. -20- + +[* * *] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +"Month" means any of the twelve months of a year. + +"Order" means any award, decision, injunction, judgment, order, ruling, subpoena, or verdict of any court, arbitral tribunal, administrative agency, or other Governmental Authority. + +"Person" means any individual, corporation (including any non-profit corporation), general or limited partnership, limited liability company, joint venture, estate, trust, association, organization, labor union, Governmental Authority or other entity. + +"Representative" means, with respect to a particular Person, any director, officer, employee, agent, consultant, advisor, or other representative of that Person, including legal counsel, accountants, and financial advisors. + +"Year" means (1) the period commencing with the date of this Agreement and ending on November 7th 2009, (2) any subsequent 12-month period commencing on January 1st and ending on December 31st, and (3) the period beginning January 1st of the year in which this Agreement expires or is terminated and ending on the date this Agreement expires or is terminated. + +14.2 Further Assurances. At any time or from time to time from the date of this Agreement, Medica, on the one hand, and Vapotherm, on the other hand, shall at the request, and at the expense, of the other do the following: (1) to the extent consistent with this Agreement deliver to the other such records, data, or other documents requested by the other; and (2) take or cause to be taken all such other actions as are reasonably necessary or desirable in order to permit the other to obtain the full benefits of this Agreement. + +14.3 Governing Law. This Agreement is governed by the laws of the State of New York without giving effect to principles of conflict of laws. + +14.4 Dispute Resolution. The parties shall attempt in good faith to resolve any controversy or claim that may arise concerning their respective rights and obligations under this Agreement. If they are unable to do so within [* * *] Business Days from the date that controversy or claim arose, they shall refer the controversy or claim to the AU of Medica and the CEO of Vapotherm, who shall meet in person or telephonically within [* * *] Business Days of being requested to do so and shall in good faith attempt to resolve the dispute. If the controversy or claim cannot then be solved, the parties hereby agree first to try in good faith to settle the dispute by mediation administered by the American arbitration Association at its New York City offices before resorting to arbitration. -21- + +[* * *] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +14.5 Arbitration. Any controversy or claim arising out of or relating to this Agreement or the applicability of this Section 14.5 that is not resolved pursuant to Section 14.4 will be determined by arbitration in accordance with the International Arbitration Rules of the American Arbitration Association. Unless the parties agree otherwise the number of arbitrators will be three, each of whom will be appointed by the American Arbitration Association. One arbitrator must be a lawyer, the second must be an expert in financial matters, and the third must have expertise in the manufacture of hemodialysis products. The place of arbitration will be Washington, D.C., U.S.A. The language of the arbitration will be English. Prior to the commencement of hearings, each of the arbitrators appointed must provide an oath or undertaking of impartiality. Judgment upon the award rendered by the arbitrators may be entered by any court having jurisdiction thereof. The cost of any such arbitration will be divided equally between Vapotherm, on the one hand, and Medica, on the other hand, with each party bearing its own attorneys' fees and costs. + +14.6 Force Majeure. No party will be responsible to the other under this Agreement for failure or delay in performing any obligations under this Agreement, other than payment obligations, due to factors beyond its control, including without limitation any war, fire, earthquake, or other natural catastrophe, or any act of God, but excluding labor disputes involving all or any part of the work force of that party (each such factor, an "Event of Force Majeure"). Upon the occurrence of an Event of Force Majeure, the party failing or delaying performance shall promptly notify the other party in writing, setting forth the nature of the occurrence, its expected duration, and how that party's performance is affected. Any party subject to an Event of Force Majeure shall use commercially reasonable efforts to resume performing its obligations under this Agreement as soon as practicable. Except as provided in Section 14.6(b), if an Event of Force Majeure occurs, the affected party' will be excused from performing and the time for performance will be extended as long as that party is unable to perform as result of the Event of Force Majeure. + +(b) If any Event of Force Majeure prevents Medica from delivering any shipment of Cartridges for more than [* * *] Business Days beyond the scheduled delivery date, then Vapotherm may cancel its order without incurring any liability to Medica with respect thereto. + +14.7 Assignment. This Agreement inures to the benefit of and is binding upon the successors and assignees of the parties. Neither party may assign any of its rights or obligations under this Agreement without the prior written consent of the other except that: (1) Vapotherm may assign this Agreement or transfer its rights and obligations under this Agreement to an Affiliate of Vapotherm or a successor to all or substantially all of its assets or business relating to this-Agreement, whether by sale, merger, operation of law, or otherwise. + +14.8 Notices. Every notice or other communication required or contemplated by this Agreement must be in writing and sent by one of the following methods: (1) personal delivery, in which case delivery will be deemed to occur the day of delivery; -22- + +[* * *] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +(2) by a recognized overnight delivery service such as Federal Express or DHL Worldwide Express, in which case delivery will be deemed to occur the day of delivery. + +(b) In each case, a notice or other communication sent to a party must be directed to the address for that party set forth below, or to another address designated by that party by written notice. All notices to be given by a Medica Entity may be given on its behalf by the other Medica Entity following consultation between Medica. If to: + +Vapotherm Inc. 198 Log Canoe Circle Stevensville MD 21666 Attention: CFO + +with a copy to: + +Hogan & Hartson L.L.P. 555 13t h Street, N.W., Washington, D.C. 20004-1009 Attention: Stephen J. Zempolich, Esq. + +if to Medica: + +Medica S.p.A. Via Degli Artigiani, 7 41036 Medolla (MO) Italy Attention: Luciano Fecondini + +14.9 Severability. If any provision of this Agreement is held unenforceable by any court of competent jurisdiction, all other provisions of this Agreement will remain effective. If any provision of this Agreement is held to be unenforceable only in part or degree, it will remain effective to the extent not held unenforceable. + +14.10 Entire Agreement. This Agreement constitutes the entire agreement of the parties pertaining to the subject matter of this Agreement. It supersedes all prior agreements of the parties, whether oral or written, pertaining to the subject matter of this Agreement. + +14.11 Amendment. This Agreement may not be amended except by an instrument in writing signed on behalf of both parties. + +14.12 Independent Contractor. Nothing in this Agreement creates, or will be deemed to create, a partnership or the relationship of principal and agent or employer and employee between the parties. Each party agrees to perform under this Agreement solely as an independent contractor, + +14.13 Counterparts. This Agreement may be executed in counterparts, each of which is an original and all of which together constitute one and the same instrument. -23- + +[* * *] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +14.14 Compliance with Laws. Vapotherm and Medica shall each comply in all material respects with all applicable Laws that pertain to the activities for which Vapotherm and Medica are each responsible under this Agreement and, except as provided for herein, shall bear their own cost and expense of complying therewith. -24- + +[* * *] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +IN WITNESS WHEREOF, each of the undersigned have caused this Manufacturing and Supply Agreement to be duly executed and delivered in their name and on their behalf as of the date first set forth above. VAPOTHERM, INC. + +By: /s/ Joseph Army Name: Joseph Army Title: President & CEO + +MEDICA S.p.A + +By: /s/ Luciano Fecondini Name: Luciano Fecondini Title: Amministratore Unico + +[* * *] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +Exhibit A-1 Price Schedule: in EURO (Euro) + +[* * *] + +Exhibit A-2: Forecast + +[* * *] + +[* * *] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +Exhibit B: Purchase Order Form Example + +[* * *] + +[* * *] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +Exhibit C - Vapotherm Tools + +[* * *] + +[* * *] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. + + + + + +Exhibit D: [* * *] Purchase Specifications + +[* * *] + +[* * *] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. \ No newline at end of file diff --git a/full_contract_txt/VARIABLESEPARATEACCOUNT_04_30_2014-EX-13.C-UNCONDITIONAL CAPITAL MAINTENANCE AGREEMENT.txt b/full_contract_txt/VARIABLESEPARATEACCOUNT_04_30_2014-EX-13.C-UNCONDITIONAL CAPITAL MAINTENANCE AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..dd294b4ea5ffa35dade1cc060d83732d9bbfe453 --- /dev/null +++ b/full_contract_txt/VARIABLESEPARATEACCOUNT_04_30_2014-EX-13.C-UNCONDITIONAL CAPITAL MAINTENANCE AGREEMENT.txt @@ -0,0 +1,133 @@ +Exhibit (13)(c) + +AMENDED AND RESTATED UNCONDITIONAL CAPITAL MAINTENANCE AGREEMENT BETWEEN AMERICAN INTERNATIONAL GROUP, INC. AND AMERICAN GENERAL LIFE INSURANCE COMPANY + +This Amended and Restated Unconditional Capital Maintenance Agreement (this "Agreement"), is made, entered into and effective as of February 18, 2014, by and between American International Group, Inc., a corporation organized under the laws of the State of Delaware ("AIG"), and American General Life Insurance Company, a corporation organized under the laws of the Texas (the "Company"). + +WITNESSETH: + +WHEREAS, the Company is a life insurer subject to certain capital requirements of the insurance laws and regulations of Texas (the "Domiciliary State"); + +WHEREAS, the Company is an indirect wholly owned subsidiary of AIG; + +WHEREAS, AIG has an interest in unconditionally maintaining the Company's financial condition; and + +WHEREAS, AIG and the Company executed that certain Unconditional Capital Maintenance Agreement, dated March 30, 2011 (as amended, the "2011 CMA"), and the parties have agreed to amend and restate such 2011 CMA as provided in this Agreement: + +NOW, THEREFORE, in consideration of the mutual promises herein contained, the parties hereto agree as follows: + + 1. Capital Contributions. In the event that the Company's Total Adjusted Capital for each of the Company's first and third fiscal quarters (as determined based on the Company's first and third fiscal quarterly filed statutory financial statements, respectively, subject to any adjustments or modifications thereto required by the Domiciliary State's insurance department or the Company's independent auditors) falls below the Specified Minimum Percentage of the Company's projected Company Action Level RBC (in each case as estimated by the Company as of the end of each such first and third fiscal quarters, as the case may be, taking into account (for purposes of such estimation) facts and circumstances occurring after the end of such fiscal quarter but before such time as AIG would be obligated pursuant to paragraph 3 to make a contribution), AIG shall, within the respective time periods set forth under paragraph 3, in accordance with paragraph 4 and in compliance with applicable law, provide to the Company cash, cash equivalents, securities or other + + + + + + + + instruments that qualify (as admitted assets) for purposes of calculating the Company's Total Adjusted Capital, as a contribution and not as a loan, in an amount such that the Company's Total Adjusted Capital as of the end of each of the Company's second and fourth fiscal quarter, as the case may be, will be projected to be at least equal to the Specified Minimum Percentage of the Company's Company Action Level RBC. Notwithstanding the foregoing, AIG may, at any time as it deems necessary in its sole discretion and in compliance with applicable law, make a contribution to the Company in such amount as is required for the Company's Total Adjusted Capital to equal a percentage of its Company Action Level RBC determined to be appropriate by the Company and AIG. + + 2. Defined Terms. For the avoidance of doubt, the terms "Total Adjusted Capital" and "Company Action Level RBC" shall have the meanings ascribed thereto under the insurance laws and regulations of the Domiciliary State, or, if not defined therein, shall have the meanings ascribed thereto in the risk-based capital ("RBC") instructions promulgated by the National Association of Insurance Commissioners ("NAIC"). The term "Specified Minimum Percentage" shall be equal to the percentage set forth on Schedule 1 attached hereto, which shall be agreed to by AIG and the Company at least once every year beginning upon the date of the filing of the Company's 2014 Annual Statement with the Domiciliary State's insurance department and following review against the capital adequacy standards and criteria ("Agency Criteria") of each of Standard & Poor's Corp. ("S&P"), Moody's Investors Service ("Moody's") and A.M. Best Company ("A.M. Best"). Notwithstanding the obligation of the Company and AIG to review the Specified Minimum Percentage on an annual basis, the parties hereto agree to review and revise the Specified Minimum Percentage on a more frequent basis, if the parties agree it is appropriate, to take into account (a) any material changes after the date hereof to any Agency Criteria adopted by any of S&P, Moody's or A.M. Best, on the one hand, or to the law of the Domiciliary State or NAIC RBC rules or instructions, on the other hand, which causes the results under the Agency Criteria to diverge from that under the law of the Domiciliary State or NAIC RBC rules or instructions, (b) the Company completes a material transaction that is treated materially differently by the Agency Criteria, on the one hand, and the NAIC RBC rules or instructions, on the other hand, or (c) any other material development or circumstance affecting the Company which AIG and the Company agree merits a reevaluation of the Specified Minimum Percentage then in effect. + + 3. Timing of Capital Contributions. The Company and AIG agree that any contribution to be made under paragraph 1 will take place within the following two time periods per year, as applicable: (a) during the time beginning on the first business day after the filing of the Company's first + +2 + + + + + + + + fiscal quarterly statutory financial statements and ending on the last business day prior to the end of the Company's second fiscal quarter; and (b) during the time beginning on the first business day after the filing of the Company's third fiscal quarterly statutory financial statements and ending on the last business day prior to the end of the Company's fourth fiscal quarter. Notwithstanding the foregoing, in compliance with applicable law, any capital contribution provided for under paragraph 1 may be made by AIG after the close of any fiscal quarter or fiscal year of the Company but prior to the filing by the Company of its statutory financial statements for such fiscal quarter or fiscal year, respectively, and contributions of this nature shall be recognized as capital contributions receivable as of the balance sheet date of the yet to be filed quarterly or annual financial statement (as the case may be), pursuant to paragraph 8 of Statement of Statutory Accounting Principles No. 72, to the extent approved by the Domiciliary State. + + 4. Funding Mechanics. At the time that any contribution is due under paragraph 3, AIG agrees that it will either (a) make such contribution to the Company's direct parent and cause such direct parent to then contribute such funds, securities or instruments so contributed by AIG to the Company, or (b) make such contribution directly to the Company without receiving any capital stock or other ownership interest in exchange therefor. All contributions contemplated under this Agreement shall be approved and made in compliance with applicable law, including, without limitation, approval by the board of directors of each applicable entity and any prior notice or approval requirements specified under applicable rules and regulations. + + 5. AIG Policies. Subject to the requirements of applicable law and the approval, to the extent required, by any or all of the Company's senior management, relevant management committees, board of directors, and of any insurance regulator, the Company hereby acknowledges that, in a manner consistent with past practice and any other reasonable requirements of AIG, it will comply with all financial and budgetary planning, risk mitigation, derisking or pricing, corporate governance, investment, informational and procedural requirements set forth by AIG. + + 6. No Failure to Claim. AIG hereby waives any failure or delay on the part of the Company in asserting or enforcing any of its rights or in making any claims or demands hereunder. + + 7. Termination. Unless earlier terminated in accordance with this paragraph 7, this Agreement shall continue indefinitely. AIG shall have the absolute right to terminate this Agreement upon thirty (30) days' prior written notice to the Company, which notice shall state the effective date of termination (the "Termination Date"); provided, however, that AIG agrees not to terminate this Agreement unless (a) AIG significantly modifies the + +3 + + + + + + + + corporate structure or ownership of the Company, or (b) AIG sells the Company to an acquirer, in each case, (i) having a rating from at least one of S&P, Moody's, A.M. Best or a substitute agency, which is a nationally recognized statistical rating organization, that is at least equal to the lower of (x) AIG's then-current rating from such agency or (y) the Company's then-current rating as supported by this Agreement from such agency; or (ii) such that, immediately on the effective date of the modification of corporate structure or sale by AIG of the Company, the Company's capitalization is consistent with the minimum capital adequacy standards and criteria of at least one of S&P, Moody's, A.M. Best or a substitute agency, which is a nationally recognized statistical rating organization, for a rating that is equal to or better than the Company's then-current rating on the date immediately preceding such modification of corporate structure or sale. To the extent not terminated previously by AIG pursuant to the foregoing, this Agreement will terminate automatically one year after the closing of any sale of the Company by AIG, and all provisions hereof will be of no further force and effect. For the avoidance of doubt, the termination of this Agreement pursuant to this paragraph 7 shall not relieve either party of any obligation it may owe to the other party hereunder that existed prior to, and remains outstanding as of, the Termination Date. + + 8. Policyholder Rights. Any policyholder holding a policy issued by the Company prior to the termination of this Agreement shall have the right to demand that the Company enforce the Company's rights under paragraphs 1, 3 and 4 of this Agreement, and, if the Company fails or refuses to take timely action to enforce such rights or the Company defaults in any claim or other payment owed to any such policyholder when due, such policyholder may proceed directly against AIG to enforce the Company's rights under paragraphs 1, 3 and 4 of this Agreement; provided, however, that no policyholder of the Company may take any action authorized under this paragraph 8 unless and until (a) such policyholder has given AIG written notice of its intent to enforce the terms of this Agreement as provided in this paragraph 8, which notice shall specify in reasonable detail the nature of and basis for the policyholder's complaint and (b) AIG has failed to comply with this Agreement within sixty (60) days after such notice is given; and, provided, further, that upon termination of this Agreement in accordance with paragraph 7 hereof, the rights of any policyholder as provided for under this paragraph 8 shall terminate effective as of the Termination Date, except with respect to the obligation of AIG (if any) to make capital contributions to the Company pursuant to paragraphs 1, 3 and 4 of this Agreement solely to the extent such obligation arose prior to, and remained unsatisfied as of, the Termination Date (it being understood that upon AIG's satisfaction of all such obligations after the Termination Date, no such policyholder shall have any rights against the Company or AIG, as the case may be, under this paragraph 8). + +4 + + + + + + + + 9. No Indebtedness; No Policyholder Recourse Against AIG. This Agreement is not, and nothing herein contained and nothing done pursuant hereto by AIG shall constitute or be construed or deemed to constitute, an evidence of indebtedness or an obligation or liability of AIG as guarantor, endorser, surety or otherwise in respect of any obligation, indebtedness or liability, of any kind whatsoever, of the Company. This Agreement does not provide, and is not intended to be construed or deemed to provide, any policyholder of the Company with recourse to or against any of the assets of AIG. + + 10. Notices. Any notice, instruction, request, consent, demand or other communication required or contemplated by this Agreement shall be in writing, shall be given or made or communicated by United States first class mail, addressed as follows: + +If to AIG: + +American International Group, Inc. 175 Water Street New York, New York 10038 Attention: Secretary + +If to the Company: + +American General Life Insurance Company + +2919 Allen Parkway Houston, Texas 77019 Attention: Chief Financial Officer + +with a copy (which shall not constitute notice) to: + +American General Life Insurance Company c/o AIG Life and Retirement 1999 Avenue of the Stars, 27t h Floor Los Angeles, CA 90067 Attention: General Counsel + + 11. Successors. The covenants, representations, warranties and agreements herein set forth shall be mutually binding upon and inure to the mutual benefit of AIG and its successors and the Company and its successors. + + 12. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of New York, without giving effect to the principles of conflict of laws. + +5 + + + + + + + + 13. Severability. If any provision of this Agreement shall be declared null, void or unenforceable in whole or in part by any court, arbitrator or governmental agency, said provision shall survive to the extent it is not so declared and all the other provisions of this Agreement shall remain in full force and effect unless, in each case, such declaration shall serve to deprive any of the parties hereto of the fundamental benefits of or rights under this Agreement. + + 14. Entire Agreement; Amendments. This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings, negotiations and discussion, whether oral or written, of the parties. This Agreement may be amended at any time by written agreement or instrument signed by the parties hereto. + + 15. Headings. The section headings contained in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement. + + 16. Counterparts. This Agreement may be signed by the parties in one or more counterparts which together shall constitute one and the same agreement among the parties. + +[signature page follows] + +6 + + + + + + + +IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written. AMERICAN INTERNATIONAL GROUP, INC. By: /s/ Charles S. Shamieh + +Name: Charles S. Shamieh Title: Senior Vice President and Chief Corporate Actuary AMERICAN GENERAL LIFE INSURANCE COMPANY By: /s/ Mary Jane Fortin + +Name: Mary Jane Fortin Title: Executive Vice President & Chief Financial Officer + + + + + + + +SCHEDULE 1 + +The Specified Minimum Percentage shall equal 385% of the Company's Company Action Level RBC. \ No newline at end of file diff --git a/full_contract_txt/VAXCYTE,INC_05_22_2020-EX-10.19-SUPPLY AGREEMENT.txt b/full_contract_txt/VAXCYTE,INC_05_22_2020-EX-10.19-SUPPLY AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..9bf1f828a5d62f567ec426080713b6053a431607 --- /dev/null +++ b/full_contract_txt/VAXCYTE,INC_05_22_2020-EX-10.19-SUPPLY AGREEMENT.txt @@ -0,0 +1,537 @@ +Exhibit 10.19 + +CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY [***], HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM IF PUBLICLY DISCLOSED. + +SUPPLY AGREEMENT + +This SUPPLY AGREEMENT ("Supply Agreement") is made as of May 29, 2018 (the "Effective Date") by and between SutroVax, Inc., a Delaware corporation having principal offices at 353 Hatch Dr., Foster City, CA 94404 ("SutroVax") and Sutro Biopharma, Inc., a Delaware corporation, having principal offices at 310 Utah Ave, Suite 150, South San Francisco, CA, 94080 ("Sutro"). SutroVax and Sutro may be referred to herein by name or individually, as a "Party" and collectively, as the "Parties." + +BACKGROUND + +A. Sutro controls certain proprietary technology which permits cell-free expression of proteins, and Sutro licensed such technology to SutroVax under that certain Amended and Restated SutroVax Agreement dated as of October 12, 2015 (the "License Agreement"). + +B. SutroVax is a vaccine company primarily in the business of developing, manufacturing and marketing vaccine products; and + +C. SutroVax desires to purchase from Sutro, and Sutro desires to supply to SutroVax, the Extracts and Custom Reagents (as defined below) upon the terms and subject to the conditions set forth herein. + +NOW, THEREFORE, in consideration of the covenants, conditions and undertakings hereinafter set forth, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereby agree as follows: + +AGREEMENT + +ARTICLE 1 + +DEFINITIONS/ INTERPRETATION + +For the purposes of this Supply Agreement, the following capitalized words and phrases shall have the following meanings: + +1.1 "Affiliate" means, with respect to either Party, any business entity controlling, controlled by, or under common control with such Party. For the purpose of this definition only, "control" means (i) the possession, directly or indirectly, of the power to direct the management or policies of a business entity, whether through the ownership of voting securities, by contract or otherwise, or (ii) the ownership, directly or indirectly, of at least fifty percent (50%) of the voting securities or other ownership interest of a business entity. Notwithstanding the above, in no event shall Sutro (or any entity that would be an Affiliate of SutroVax solely because it is an Affiliate of Sutro) be deemed an Affiliate of SutroVax, or SutroVax (or any entity that would be an Affiliate of Sutro solely because it is an Affiliate of SutroVax) an Affiliate of Sutro. + + + + + +1.2 "Applicable Law" means all laws, ordinances, rules, rulings, directives and regulations of any Governmental Authority that apply to the development, manufacture or supply of any Product or the other activities contemplated under this Supply Agreement, including (i) all applicable federal, state and local laws, rules and regulations; (ii) the U.S. Federal Food, Drug and Cosmetic Act; (iii) regulations and guidelines of the FDA and other Regulatory Authorities, including cGMPs, if applicable; and (iv) any applicable non-U.S. equivalents of any of the foregoing, including guidelines of the International Conference on Harmonization of Technical Requirements for Registration of Pharmaceuticals for Human Use (as amended from time to time). + +1.3 "cGMPs" means current good manufacturing practices and standards as set forth (and as amended from time to time) in the current Good Manufacturing Practice Regulations of the U.S. Code of Federal Regulations, including 21 C.F.R. Sections 210 and 211, the European Community Directive 2003/94/EC and the ICH Harmonised Tripartite Guideline, Good Manufacturing Practice Guides for Active Pharmaceutical Ingredients (Q7). + +1.4 "Components" means any product or material used in the Manufacture of the Products including the packaging materials. + +1.5 "Extract" means Sutro's extract derived from strains of E. coli identified on Schedule 1 attached hereto, as may be amended from time to time in accordance with Section 12.7, and any new versions and improvements thereof that may be included in Schedule 1 by written agreement of the Parties in accordance with Section 12.7. + +1.6 "Facility" or "Facilities" means the facilities where Product will be Manufactured as set forth in Schedule 1. Schedule 1 may be amended from time to time in accordance with this Supply Agreement to add or remove facilities. + +1.7 "FDA" means the United States Food and Drug Administration, or any successor agency thereto performing similar functions. + +1.8 "Fully Burdened Manufacturing Costs" means, with respect to a Product, Sutro's costs of manufacturing such Product, which manufacturing costs shall mean: (a) [***], and (b) [***], in each case to the extent directly allocated to and incurred in the manufacture by Sutro of such Product supplied to SutroVax, its Affiliates and Sublicensees. Fully Burdened Manufacturing Costs shall not include any [***] and shall be calculated in accordance with the foregoing, GAAP and Sutro's policies and procedures for its other products, in each case consistently applied (and such plant operations and support services costs shall be allocated consistent with GAAP and other products of Sutro in that facility). + +1.9 "Governmental Authority" means any court, agency, department, authority or other instrumentality of any nation, state, country, city or other political subdivision, including any Regulatory Authority. + + + + + +1.10 "Manufacture" or "Manufacturing" means the processes and procedures for the supply of the Products, including, (a) the supply and quality control of the Components; (b) the manufacture of the Products in bulk; (c) the Packaging and labeling of the Products; (d) the quality control of the Products; and (e) the storage of the Products until shipment. + +1.11 "Package" or "Packaging" means packaging Product(s) in accordance with applicable Specifications. + +1.12 "Person" means an individual, a corporation, a partnership, an association, a trust or other entity or organization, including a government or political subdivision or an agency thereof. + +1.13 "Price" means the price to be paid by SutroVax for each Product as set forth on Schedule 1 of this Supply Agreement and as may be modified from time to time in accordance with Section 3.2. + +1.14 "Product(s)" means the Extract and Custom Reagents. + +1.15 "Custom Reagents" means Sutro's custom reagents identified on Schedule 1 attached hereto, and any new versions and improvements thereof that may be included in Schedule 1 by written agreement of the Parties in accordance with Section 12.7. + +1.16 "Regulatory Approval" means, with respect to a product, all approvals, licenses, registrations or authorizations necessary to market and sell such product in a particular jurisdiction in the Territory (including applicable approvals of labeling, price and reimbursement for such product in such jurisdiction). + +1.17 "Regulatory Authority" means any federal, national, multinational, state, provincial or local regulatory agency, department, bureau or other governmental entity, including the FDA, with authority over the development, Manufacture or commercialization (including approval of Regulatory Approvals) of any Product(s) in any jurisdiction in the Territory. + +1.18 "Regulatory Materials" means regulatory applications, submissions, notifications, communications, correspondence, registrations, Regulatory Approvals and/or other filings made to, received from or otherwise conducted with a Regulatory Authority (including minutes of meeting with Regulatory Authorities) that are necessary or reasonably desirable to access in connection with the development, manufacture, marketing, sale or other commercialization of any Product in a particular country or regulatory jurisdiction. Regulatory Materials include, without limitation, INDs, NDAs, BLAs, clinical trial applications, marketing approval applications and applications for pricing approvals. + +1.19 "Required Standards" means Applicable Law, the Specifications, and the warranties given by Sutro in Section 7.3, provided that Required Standards shall not include compliance with cGMPs for Custom Reagents, Extract identified as "research grade" Extract or Other Extracts. + + + + + +1.20 "Specifications" means, with respect to a Product or applicable Component thereof, all written product, regulatory, Manufacturing, release criterion, quality control and quality assurance procedures, processes, practices, standards, instructions and specifications applicable to the Manufacture of such Product or Component, as agreed to by the Parties in writing from time to time. The initial Specifications for the Products are attached hereto as Schedule 2. + +1.21 "SutroVax CMO" means any contract manufacturer responsible for supplying or manufacturing a Vaccine Composition on behalf of SutroVax or its Affiliates, selected in accordance with Section .2. + +1.22 "Territory" means worldwide. + +1.23 "Third Party" means any Person other than SutroVax, Sutro, or their respective Affiliates. + +1.24 Additional Definitions. Each of the following terms shall have the meaning described in the corresponding Section of this Supply Agreement indicated below: + +1.25 Interpretation. The captions and headings to this Supply Agreement are for convenience only, and are to be of no force or effect in construing or interpreting any of the provisions of this Supply Agreement. Unless specified to the contrary, references to Articles, Sections, Schedules or Exhibits mean the particular Articles, Sections, Schedules or Exhibits to this Supply Agreement and references to this Supply Agreement include all Schedules and Exhibits hereto. Unless context clearly requires otherwise, whenever used in this Supply Agreement: (i) the words "include" or "including" shall be construed as incorporating, also, "but not limited to" or "without limitation;" (ii) the word "or" shall have its inclusive meaning of "and/or;" (iii) the word "notice" shall require notice in writing (whether or not specifically stated) and shall include notices, consents, approvals and other written communications contemplated under this Supply Agreement; (iv) the words "hereof," "herein," "hereunder," "hereby" and derivative or similar words refer to this Supply Agreement (including any Schedules and + +Term Section Defined Alternate Supplier 2.15 Acceptance Period 4.2 COA/COC 4.1 CMC 6.2 CMO 2.15 Delivery Time Period 2.9.2 Disputed Matter 11.4 Drug Master File 6.2 Effective Date Preamble Force Majeure 12.3 Forecast 2.3 Indemnify 9.1.1 Laboratory 4.3 Latent Defect 4.2 Liabilities 9.1.1 License Agreement Background Manufacturing Change 6.6 MSDS 4.1 Other Extract 2.16 Party or Parties Preamble + +Term Section Defined Phase 3/Commercial Supply Agreement 2.14 Q1, Q2 or Q3 2.3 Quality Agreement 6.7 Senior Management 11.2 Short Dated Product 2.11 Sutro Preamble Sutro Activity Criteria 4.1 Sutro Activity Test 4.1 Sutro Indemnitees 9.1.2 SutroVax Preamble SutroVax Activity Criteria 4.1 SutroVax Activity Test 4.1 SutroVax Indemnitees 9.1.1 Supply Agreement Preamble Term 10.1 Third-Party Claim 9.1.1 Transfer Addendum 2.15 Work Order 2.3 + + + + + +Exhibits); (v) provisions that require that a Party or the Parties "agree," "consent" or "approve" or the like shall require that such agreement, consent or approval be specific and in writing; (vi) words of any gender include the other gender; (vii) words using the singular or plural number also include the plural or singular number, respectively; (viii) references to any specific law, or article, section or other division thereof, shall be deemed to include the then-current amendments thereto or any replacement thereof; (ix) neither Party shall be deemed to be acting "under the authority" of the other Party; and (x) any capitalized terms used and not defined in this Supply Agreement shall have the meaning set forth in the License Agreement. + +ARTICLE 2 SUPPLY + +2.1 Supply. Pursuant to the terms and conditions of this Supply Agreement, Sutro agrees that it will Manufacture the Product(s) at the Facility(ies) for SutroVax and shall supply the Product(s) to SutroVax, its Affiliates, and any SutroVax CMO, for purposes of production of Vaccine Compositions (including development of processes for the production of Vaccine Compositions), solely for non-clinical research purposes or in Phase I or Phase II clinical trials of such Vaccine Compositions.. + +2.2 Transfer of Product. Subject to Section 2.1, SutroVax may transfer Products to SutroVax CMOs selected by SutroVax and that are reasonably acceptable to Sutro (the acceptance of which by Sutro not to be unreasonably withheld, conditioned or delayed) or previously approved by Sutro. + +2.3 Work Orders. From time to time, Sutro and SutroVax may execute one or more work orders, that describe the Product to be Manufactured, the quantities of each Product to be Manufactured and supplied to SutroVax, the Price to be charged by Sutro (which shall be as set forth in Section 3.2) and paid by SutroVax for the Product, and the delivery date(s) for such Product, (as executed, a "Work Order"). Each Work Order will expressly refer to this Supply Agreement, will form a part of this Supply Agreement, and will be subject to the terms and conditions contained herein. Sutro shall not unreasonably withhold its agreement to any proposed Work Order requested by SutroVax. Sutro shall be obligated to execute proposed Work Orders requested by SutroVax (except with respect to Other Extracts) with respect to quantities in such proposed Work Order for delivery at least [***] months after SutroVax's request to the extent such quantities of Product (when added to the quantities of such Product in Work Orders previously agreed between the Parties for delivery within the one (1) calendar year period prior to the requested delivery date of the proposed Work Order) are less than (a) [***] liters with respect to Extract or (b) a corresponding amount of each Custom Reagent to support use of [***] liters of Extract. Sutro shall notify SutroVax as soon as possible if Sutro believes it will be unable to deliver Product in accordance with the applicable Work Order. Sutro's providing of such notification shall not be interpreted in any manner as relieving Sutro of its obligations under this Supply Agreement, nor shall it prevent SutroVax from pursuing any and all rights and remedies SutroVax may have based on Sutro's failure to be able to deliver any Product in accordance with the terms of this Supply Agreement. + + + + + +2.4 Orders. + +2.4.1 Purchase Orders. Once both parties have executed a Work Order, SutroVax shall place a purchase order for the amounts of Products to be purchased under such Work Order with delivery dates for such amounts consistent with such Work Order. Additionally, SutroVax may from time to time place purchase orders for additional quantities specifying requested delivery dates in accordance with reasonable delivery schedules and lead times; in each case, as may be agreed upon from time to time by the Parties. Each purchase order placed by SutroVax shall specify the quantity of Product, destination(s) and requested delivery dates. Sutro shall promptly accept all purchase orders with respect to the amounts of Products to be purchased under the applicable Work Order and shall accept or reject any amount in the purchase order in excess of the amounts of Products to be purchased under the applicable Work Order and all other purchase orders for Product submitted by SutroVax in accordance with this Article 2 within [***] days from receipt of the order; provided however that Sutro shall use Commercially Reasonable Efforts to accept such amounts and purchase orders. Accepted purchase orders may not be cancelled without the prior written agreement of both Parties except as set forth in Sections 2.5. Unless otherwise directed by SutroVax, Sutro shall fill all accepted purchase orders for Product in accordance with the requested due dates as set forth in further detail in Section 2.9.2. + +2.4.2 No Conflicting Terms. The terms and conditions of this Supply Agreement shall be controlling over any conflicting terms and conditions stated in SutroVax's purchase order or Sutro's invoice, confirmation or other standardized document. Any purchase order, order acknowledgement, invoice, proposal or other document which conflicts with or adds to the terms and conditions of this Supply Agreement with respect to the Manufacture and supply of Product for the Territory is hereby rejected, unless the Parties mutually agree to the contrary in writing. + +2.4.3 Initial Order. Notwithstanding Section 2.3 or this Section 2.4, Sutro accepts and agrees to fulfil the order previously placed by or on behalf of SutroVax (or to be placed by or on behalf of SutroVax, if no already placed) for the quantities of Product set forth in Schedule 3 by the delivery date set forth therein (the "Initial Order"). + +2.5 Cancellation. Notwithstanding anything herein to the contrary, SutroVax may not modify or cancel purchase orders with respect to the amounts of Product to be purchased under the applicable Work Order, however SutroVax may modify or cancel other purchase orders (including amounts in a purchase order in excess of the amounts of Product to be purchased under the applicable Work Order) for the Products provided that such modification or change is made further in advance of the originally requested delivery date than the required lead time, where the agreed required lead time for the applicable purchase order has been evidenced in writing (including, for example, by email) between the Parties. + +2.6 Delivery and Risk of Loss. Sutro shall mark Product for delivery to the destination(s) specified by SutroVax. All shipments of Product(s) shall be delivered [***] (lncoterms 2010) Sutro Facility. Title and risk of loss and damage to the Product(s) shall remain with Sutro until the Product(s) are delivered in accordance with the foregoing, at which time title and risk ofloss and damage to the Product(s) shall pass to SutroVax. SutroVax will arrange for shipping from Sutro's Facility to the destination specified by SutroVax at SutroVax's cost and expense. + + + + + +2.7 Packaging. Sutro shall provide the Product to SutroVax in Packaged form in accordance with the Required Standards. + +2.8 Conformance to Required Standards. Sutro shall Manufacture the Product(s) in accordance with the Required Standards, as the same may be amended or supplemented from time to time. Each Party shall keep the other promptly and fully advised of any new requirements of the applicable Regulatory Authority or Applicable Law of which it becomes aware and Sutro shall promptly implement such requirements as described in Section 6.6. + +2.9 Supply and Delivery. + +2.9.1 Shortage. Sutro shall use reasonable efforts to promptly notify SutroVax in writing in the event that Sutro is unable or anticipates that it will be unable to supply compliant Product in accordance with the requirements of this Supply Agreement, including the Quality Agreement and all Required Standards, and each Work Order. Sutro shall use Commercially Reasonable Efforts to overcome any inability or anticipated inability to so supply compliant Product to SutroVax. + +2.9.2 Delivery Delays. Subject to Section 2.4.1 (including applicable lead times agreed upon in accordance with Section 2.4.1) Sutro shall make deliveries of Product(s) in accordance with Section 2.6, no more than [***] days before or [***] after the delivery dates specified by SutroVax in the relevant purchase order (provided that such delivery date is in accordance with the applicable Work Order or such purchase order was otherwise accepted by Sutro) (the "Delivery Time Period"). For any failure to supply compliant Product(s) in the later of the Delivery Time Period and the period ending [***] after the delivery date specified under the Work Order, without limiting SutroVax's other remedies, subject to this Section 2.9.2 and Section 9.3 (Limitation of Liability), Sutro shall be liable for any non-cancelable Third Party penalties, costs and expenses incurred by SutroVax as a result of Sutro's failure to supply Product(s) as aforesaid, subject to receipt by Sutro of appropriate documentary evidence of such penalties, costs and expenses to the extent such evidence of such amounts may be provided by SutroVax without breaching SutroVax's or its Affiliates' duties of confidentiality to such Third Party (and provided that SutroVax shall use commercially reasonable efforts to (i) minimize or eliminate such penalties, costs and expenses and (ii) where provision of such evidence to Sutro would result in a breach of such duties of confidentiality, to obtain the consent of the applicable Third Party to the provision of such evidence to Sutro). In the event that Sutro makes a Manufacturing Change and is not able to Manufacture and supply Product in conformance with the Required Standards within [***] days of the delivery date identified on the applicable purchase order, Sutro shall Manufacture such Product without such Manufacturing Change. The rights of SutroVax set forth in this paragraph are in addition to any other rights set forth in this Supply Agreement. + +2.10 Allocation. Without limiting any other rights or remedies available to SutroVax, if the demand for a Product in aggregate exceeds available supply or Sutro otherwise concludes that it may be unable to supply a Product in accordance with the requirements of this Supply Agreement in the quantities and within the time periods specified in each Work Order and the corresponding purchase orders that have been accepted by Sutro, Sutro shall immediately notify SutroVax of such shortfall (or anticipated shortfall), and shall use Commercially Reasonable + + + + + +Efforts to procure Components and capacity adequate to meet accepted purchase orders and supply compliant Product in accordance with the requirements of this Supply Agreement. Sutro shall allocate its available Components and manufacturing capacity to provide SutroVax with quantities of such Product at least equal to the greater of (a) [***] of the amount of Product (or products equivalent to Product) that Sutro allocates for itself and its Affiliates (but in no event less than [***] liters of Extract per month and the minimum allocation volume set out in Schedule 1 of each Custom Reagent per month), provided that SutroVax demonstrates actual need for the applicable quantities of Extract, and (b) the [***]. Without limiting the foregoing, if there is a shortage of supply of Product, Sutro shall provide Product to SutroVax for any quantities of Product ordered by SutroVax in accordance with the applicable Work Order or purchase order in priority to any subsequent Third Party purchase orders, but not in priority to any Third Party purchase orders or other binding commitment placed before placement of the applicable SutroVax Work Order or purchase order. + +2.11 Short Dated Product. Sutro agrees to ship all Product(s) so that they are delivered to SutroVax and will remain compliant with the Specifications for at least [***] months from the date of delivery in accordance with this Supply Agreement. + +2.12 Subcontracting by Sutro. Sutro shall (a) ensure that any subcontractor or delegatee of Sutro's obligations under this Supply Agreement has and maintains all appropriate qualifications; (b) enter into a quality agreement with each such subcontractor and delegatee which terms are similar to the terms of the Quality Agreement between SutroVax and Sutro; and (c) be responsible for each subcontractor's and delegatee's performance hereunder (including performance or non-performance by such subcontractor or delegatee that would constitute a breach of this Supply Agreement or such quality agreement if conducted by Sutro) as if Sutro were itself performing such activities. Sutro shall not subcontract the Manufacture of Product to a Third Party without SutroVax's prior consent other than to an Alternate Supplier as expressly set forth in Section 2.15. + +2.13 CMOs. Notwithstanding anything to the contrary in this Supply Agreement, SutroVax shall have the rights to purchase Available Extracts and Extracts from CMOs (as defined in the License Agreement) to the extent provided in section 3.1 of the License Agreement. + +2.14 Phase 3/Commercial Supply Agreement. If requested by SutroVax in writing (which request shall not be made prior to [***]), the Parties shall negotiate in good faith reasonable terms and conditions of an agreement for the supply by Sutro of the Products for the production of Vaccine Compositions for use in phase 3 clinical studies and for commercial purposes ("Phase 3/Commercial Supply Agreement"). The price for the Products Manufactured by Sutro under the Phase 3/Commercial Supply Agreement shall not exceed [***] of the Fully Burdened Manufacturing Cost thereof. If the Parties have not entered into the Phase 3/Commercial Supply Agreement within [***] after SutroVax's request to negotiate the Phase 3/Commercial Supply Agreement, upon either Party's request by written notice to the other Party the terms and conditions of the Phase 3/Commercial Supply Agreement shall be determined by binding arbitration in accordance with the procedures set forth in Section 11.4. Upon the selection of one draft Phase 3/Commercial Supply Agreement by the arbitrator pursuant to Section 11.4, unless SutroVax elects not to enter into such Phase 3/Commercial Supply + + + + + +Agreement by written notice thereof to Sutro within [***] days after such selection, the Parties shall execute the definitive Phase 3/Commercial Supply Agreement selected by the arbitrator (but excluding, for clarity, any provision granting to SutroVax or its Affiliates or Sublicensees any right to obtain or use any Sutro Core Know-How); and if SutroVax elects to not enter into the Phase 3/Commercial Supply Agreement selected by the arbitrator by providing notice thereof within such [***] day period, then neither Party shall be obligated to enter into the Phase 3/Commercial Supply Agreement. + +2.15 Qualification of Alternate Supplier. + +2.15.1 Transfer Addendum. + +(a) Transfer Addendum. Upon SutroVax' written request, the Parties agree to negotiate in good faith an addendum to this Supply Agreement setting forth the terms and conditions pursuant to which Sutro will conduct a Process Transfer to a Third Party contract manufacturer ("CMO") and/or engage such CMO to establish Capacity to Manufacture Extract (as Process Transfer and Capacity are defined below), in each case for the Manufacture and supply of such Extract for SutroVax' (or its Affiliate's or SutroVax CMO's) use to manufacture Vaccine Compositions, consistent with the remainder of this Section 2.15 (such addendum, a "Transfer Addendum"). As requested by SutroVax, this procedure may also be used in the event that SutroVax wishes Sutro to conduct a Process Transfer to a Third Party CMO in order to establish Capacity to Manufacture Custom Reagents. In connection with such request, SutroVax shall provide to Sutro a description of the desired Process Transfer and/or Capacity, including timing and other requirements thereof. Such Transfer Addendum shall: + +(i) include a plan and budget for the conduct of the Process Transfer and/or establishment of such Capacity, which shall include amounts charged by the CMO (as defined further below, the "Alternate Supplier") to receive and conduct such Process Transfer and/or establish such Capacity, as well as reasonable FTE costs for Sutro personnel performing and managing technology transfer activities in accordance with the Transfer Addendum· + +(ii) require SutroVax to fund the costs incurred by Sutro to conduct Process Transfer and/or establish such Capacity in accordance with such budget; + +(iii) provide for initiation and completion of the Process Transfer and establishment of Capacity as requested by SutroVax, to the extent possible; + +(iv) to the extent requested by SutroVax, be designed to enable the Alternate Supplier to Manufacture Extract of suitable quality for use in Phase 3 clinical trials and commercialization of a Vaccine Composition at a capacity to support SutroVax' projected commercial requirements for Extract (or other capacity identified by SutroVax in connection with the negotiation of the Transfer Addendum), as requested by SutroVax; + +(v) require the Parties to fully cooperate to verify that the Extract supplied by the Alternate Supplier meets the Specifications, to validate the Manufacturing process implemented at the Alternate Supplier and to qualify the Alternate Supplier, in each case to supply Extract for SutroVax' use in Phase 3 clinical trials and commercialization of a Vaccine Composition (collectively, with respect to Capacity established, "Validating" such Capacity); + + + + + +(vi) include mechanisms for keeping SutroVax fully informed, at scheduled intervals not to exceed once per quarter, of the progress of the Process Transfer and establishing such Capacity, as applicable, including with respect to the anticipated date for qualifying the Alternate Supplier and any changes to such anticipated date; + +(vii) provide a right for SutroVax to modify the timing of or terminate the Process Transfer, Capacity or specified aspects thereof on reasonable notice, subject to SutroVax' agreement to bear any resulting termination or cancellation fees charged by the Alternative Supplier; and + +(viii) include a mechanism for Sutro to cooperate with SutroVax and keep SutroVax reasonably informed with respect to Sutro's negotiation of an agreement with a potential Alternate Supplier for a Process Transfer and/or establishment of Capacity, including with respect to pricing for Extract from the Alternate Supplier to Sutro and any commitments to purchase quantities of Extract from the Alternate Supplier that SutroVax would be obligated to assume (e.g., in connection with establishing Capacity), if any, and require Sutro to obtain SutroVax' approval (not to be withheld unreasonably) of the terms of such agreement prior to entering into such agreement to the extent that the terms apply to SutroVax (it being understood that Sutro may redact any terms that are not relevant to SutroVax). + +(b) Scope. As used above, "Process Transfer" means a technology transfer of Sutro's know-how and information as is necessary or useful for the Third Party CMO to Manufacture in its own facilities Extract that meets SutroVax' requirements, including any such information and know-how as would be needed for such CMO to scale up such Manufacture to the requested commercial volumes. To establish "Capacity" means that the CMO would take such actions as are necessary (including validation and if necessary adapting or reserving existing facilities, establishing new facilities and/or procuring necessary equipment) to Manufacture Extract meeting SutroVax' requirements for Phase 3 and commercial supply in such quantities as SutroVax designates. It is understood that SutroVax may request that the Process Transfer and establishment of Capacity be undertaken in separate steps, for example by undertaking an initial Process Transfer to demonstrate the CMO's ability to Manufacture Extract, and then later establishing Capacity for Phase 3 and commercial supply, as requested by SutroVax in accordance with Section 2.15.1(a) (i.e., in separate requests). + +(c) Selection of Alternate Supplier. The "Alternate Supplier" will be selected by Sutro, provided that Sutro must select an "Alternate Supplier" that is substantially similar to those CMOs identified on Schedule 2.15.1 hereto and provided further that SutroVax shall have the right to veto such selection based only on a genuine and material conflict of interest between SutroVax and the Alternate Supplier. Additional CMOs may be added to Schedule 2.15.1 by Sutro with SutroVax's approval (not to be withheld unreasonably). + + + + + +(d) Alternate Supplier as Subcontractor. It is understood that the Alternate Supplier established under the Transfer Addendum shall operate as a subcontractor of Sutro under this Supply Agreement and the Phase 3/Commercial Supply Agreement, and as such SutroVax will order from Sutro thereunder any Extract to be Manufactured by such Alternate Supplier. Subject to the foregoing, the Transfer Addendum and the Phase 3/Commercial Supply Agreement will include reasonable and customary rights for SutroVax to conduct audits/inspections, site visits, quarterly meetings, each such audit/inspection, site visit and quarterly meeting to be coordinated by Sutro and to occur in the presence of a representative for Sutro and SutroVax, in connection with the Alternate Supplier's manufacture of Extract for supply to SutroVax. For clarity, SutroVax shall not conduct any business discussions for the supply of Extract with the Alternate Supplier in a manner that induces the Alternate Supplier to breach its agreement with Sutro. Notwithstanding the foregoing, in the event Sutro undergoes a Change of Control or Sutro permits any third party to acquire Extract directly from an Alternate Supplier established under the Transfer Addendum, then SutroVax shall thereafter have the right to establish a supply agreement with and obtain supply of Extract directly from such Alternate Supplier. + +(e) Quotations. Upon SutroVax's request (which request, for clarity, may be before a request to negotiate a Transfer Addendum), Sutro shall seek quotations from one or more Third Party CMO(s) for such a Process Transfer and/or establishment of such Capacity, in each case as requested by SutroVax, and the Parties shall reasonably cooperate to establish requests for quotations for such purposes. + +(f) Arbitration. If the Parties have not agreed upon a Transfer Addendum within [***] after SutroVax' request, upon SutroVax' request by written notice to Sutro, the terms and conditions of the Transfer Addendum shall be determined by binding arbitration in accordance with the procedures set forth in Section 11.4. For clarity, however, it is understood that a Transfer Addendum shall not include any provision granting to SutroVax or its Affiliates or Sublicens.ee s any right to obtain or use any Sutro Core Know-How. + +2.15.2 Source of Supply. It is understood that after the Alternate Supplier is qualified, SutroVax shall have the right under this Supply Agreement and the Phase 3/Commercial Supply Agreement to specify whether Extract ordered from Sutro pursuant to this Agreement or the Phase 3/Commercial Supply Agreement will be Manufactured at Sutro's Facility or at the Alternate Supplier's facilities (and to the extent Extract from the Alternate Supplier is ordered under this Supply Agreement or the Phase 3/Commercial Supply Agreement, the facility of the Alternate Supplier shall be deemed a Facility for purposes of this Supply Agreement and the Phase 3/Commercial Supply Agreement). Notwithstanding the foregoing, to the extent the FDA and EMA have confirmed that Extract manufactured at Sutro's Facility and the Alternate Supplier's Facility are interchangeable and can be supplied from either such Facility without any additional regulatory requirements or regulatory delay with respect to the applicable Vaccine Composition, and such Extract otherwise meets SutroVax' requirements, then with SutroVax' consent (not to be withheld unreasonably) Sutro may supply Extract from either Sutro's Facility or the Alternate Supplier's Facility. + +2.15.3 Price. To the extent Sutro or its Affiliate Manufactures Extract supplied to SutroVax, the Price (per unit volume or unit weight) under this Supply Agreement and the Phase 3/Commercial Supply Agreement for such Extract shall not exceed [***] of the Fully Burdened Manufacturing Costs of such Extract; and to the extent the Extract to be supplied to SutroVax is Manufactured by a Third Party (including the Alternate Supplier), the Price to be + + + + + +charged to SutroVax under this Supply Agreement and the Phase 3/Commercial Supply Agreement for such Extract shall equal the amount Sutro paid such Third Party for such Extract ("OOP Cost") plus an amount reasonably calculated to cover Sutro's FTE costs to procure and manage the relationship with such Third Party, such amount not to exceed [***] of the OOP Cost for such Extract. To the extent that Sutro or its Affiliate receives any portion of the amounts paid to such Third Party to Manufacture Extract (e.g., as a profit share or otherwise), the Price to be charged SutroVax shall be the lesser of i) [***], or ii) [***]; in either case, [***]. For clarity, Section 3.4 of the License Agreement shall apply with respect to the Alternate Supplier. + +2.15.4 Sutro/Third Party use of Alternate Supplier. Once the Alternate Supplier is qualified pursuant to this Section 2.15, SutroVax shall have the first right (as between SutroVax and Sutro or Third Parties supplied or authorized by Sutro) to obtain Extract Manufactured by the Alternate Supplier up to the Capacity established pursuant to the Transfer Addendum for a period ending the later of [***] or [***], and provided SutroVax commits to [***] or [***]. + +2.16 Other Extracts. From time-to-time, subject to an agreed-upon Work Order, SutroVax may place purchase orders for quantities of research grade extract derived from strains of E. Coli other than that set forth on Schedule 1 attached hereto (each an "Other Extract"). Sutro shall use Commercially Reasonable Efforts to accept such purchase orders (and shall accept such purchase orders placed consistent with an agreed-upon Work Order) and manufacture and supply to SutroVax such Other Extracts. For the purpose of calculating the Price for Other Extracts in accordance with this Section, the Price will be the cost of materials and Sutro's labor at an FTE rate of [***] per year for Sutro laboratory scientists. Upon Sutro's acceptance of a purchase order for Other Extract, such Other Extract in such purchase order shall be deemed Extract for purposes of Sections 2.1, 2.2, 2.3, 2.4.1 (solely with respect to the last two sentences thereof), 2.5, 2.6, 2.7, 2.8, 2.9.1 , 3.1, 4, 5, 6, 7 and 9. + +2.17 Manufacture of Custom Reagents. For clarity, SutroVax may Manufacture Custom Reagents itself or obtain supply thereof through a Third Party independent of this Supply Agreement and nothing in this Supply Agreement is intended to restrict SutroVax from doing so. Upon SutroVax's request, and subject to the remainder of the terms of this Section 2.17, Sutro shall (a) transfer to SutroVax or a contract manufacturer designated by SutroVax (which contract manufacturer is reasonably acceptable to Sutro, the approval of which shall not be unreasonably withheld, conditions or delayed by Sutro) as soon as reasonably practicable the process to Manufacture each Custom Reagent and the items of Sutro Know-How reasonably necessary for SutroVax or its designee to Manufacture each Custom Reagent, including cell lines, standard operating procedures, protocols, batch records, analytical method standard operating procedures and analytical method transfer protocols and (b) make Sutro Personnel reasonably available to SutroVax or its designee for scientific and technical explanations and on-site support that may reasonably be requested by SutroVax or its designee to Manufacture the Custom Reagents; provided however, that SutroVax shall fully reimburse Sutro for all documented time spent by Sutro's personnel to perform such transfer (on an FTE basis, each such FTE charged at an annual rate of [***]) and out-of-pocket costs incurred by Sutro in connection with all of the activities under the preceding sub-clauses (a) and (b), in accordance with a budget reasonably approved in advance by SutroVax. Upon such SutroVax request, Sutro and SutroVax shall, within [***] days, agree on a scope of work for such transfer, including + + + + + +scale, timeline, estimated budget, and required materials; both parties shall use reasonable efforts to complete the transfer as soon as reasonably practical. If requested by SutroVax (including if such request is prior to agreement on a scope of work), Sutro shall promptly transfer to SutroVax or its designee the cell lines, manufacturing instructions and analytical methods used for Manufacture of each Custom Reagent. For clarity, SutroVax shall have the right to enter into an agreement directly with such designee for the Manufacture and supply of Custom Reagents directly to SutroVax, its Affiliates, and any SutroVax CMO and, upon SutroVax's request, to the extent necessary, Sutro shall authorize such designee to enter into such agreement with SutroVax and perform such activities. For further clarity, Sutro shall not be responsible for any damages resulting from delay or failure in establishing the processes for Manufacture of Custom Reagents at SutroVax's designee resulting from action or inaction on the part of the designee or to the extent beyond Sutro's control. SutroVax shall have the right to obtain from such designee such items of Sutro Know-How transferred to such designee and use such items in connection with the exercise of its rights pursuant to the License Agreement, including for the Manufacture of Custom Reagents and the management of such designee. SutroVax shall use such Sutro Know-How transferred under this Section 2.17 (to the extent it is Discloser's Information of Sutro and does not meet one or more the criteria in clause (a) through (e) of Section 10.1 of the License Agreement) only for the Manufacture of Custom Reagents or otherwise within the scope of rights and licenses granted SutroVax in the License Agreement. In case of such a transfer to SutroVax or its designee, SutroVax will share with Sutro (i) the proposed process for manufacture of Custom Reagents through a Third Party so that Sutro may provide feedback and ensure that the process and Specifications are consistent with Sutro's process, and (ii) all regulatory submissions (including DMFs with respect to Custom Reagents) at least [***] days in advance of their intended date of submission to a Regulatory Authority in the Territory, and shall take into account Sutro's feedback to ensure alignment with Sutro's regulatory submissions and Regulatory Approvals with respect to Custom Reagents. Following completion of the transfer set forth above, Sutro shall provide reasonable support for the use of Third Party Custom Reagents in conjunction with Extract supplied by or on behalf of Sutro. In addition, Extract supplied by Sutro that conforms to the Required Standards when tested with Custom Reagents supplied by Sutro but not with Custom Reagents manufactured under this Section shall be deemed to conform to the Required Standards and SutroVax may not reject such Extract as a result of such non-conformance to the Required Standards when tested with Custom Reagents. SutroVax shall not prevent Sutro from separately contracting with the contract manufacturer for Manufacture of Custom Reagents for use on its own behalf or on behalf of other third parties. + +2.18 Sutro Core Know-How. Notwithstanding anything to the contrary, except as set forth in Section 15.3 of the License Agreement, in no event shall SutroVax, its Affiliates or Sublicensees have the right to access any Sutro Core Know-How (as defined in the License Agreement), whether directly from Sutro or its Affiliates or through a CMO or otherwise, and SutroVax, its Affiliates and Sublicensees shall not require, request or solicit any CMO to deliver any Sutro Core Know-How to SutroVax, its Affiliates and/or its Sublicensees, and no agreement between any CMO and Sutro, its Affiliates and Subsidiaries shall contain any provision granting to SutroVax or its Affiliates or Sublicensees any right to obtain or use any Sutro Core Know-How. Without limiting the foregoing, in the event any item of Sutro Core Know-How is delivered to SutroVax, its Affiliates and/or its Sublicensees (except as set forth in Section 15.3 of the License Agreement), SutroVax, its Affiliates and Sublicensees shall immediately return such item to Sutro. Notwithstanding the foregoing, to the extent SutroVax or any of its Affiliates + + + + + +or Sublicensees is required by a Regulatory Authority (or Applicable Law) in the United States, Europe or Japan to confidentially disclose, as part of the applicable regulatory filings with respect to a Vaccine Composition, any Sutro Core Know-How (for clarity, excluding any tangible embodiments of such Sutro Core Know-How other than information and documentation), Sutro shall, upon SutroVax's written request, confidentially disclose such Sutro Core Know-How as part of the applicable regulatory filings, subject to the payment obligations set forth in Section 5.4 of the License Agreement. + +2.19 Express Rights. Except as expressly set forth in this Supply Agreement, no rights or licenses are granted to SutroVax under this Supply Agreement. + +2.20 Extract Requirements. SutroVax agrees to purchase all its requirements of Extract from Sutro in accordance with this Agreement, except to the extent SutroVax is allowed to purchase Extract from (a) Alternate Suppliers engaged by Sutro in accordance with Section 2.15 of this Agreement; (b) a CMO engaged or established and authorized by Sutro under Section 3.l(d) of the License Agreement; or (c) a CMO authorized by Sutro under Section 3.l(e) of the License Agreement. Manufacturing of Extracts in breach of this Section 2.20 shall be deemed a material breach of this Agreement and the License Agreement by SutroVax. + +ARTICLE 3 PRICING AND PAYMENT + +3.1 Invoices. Sutro shall invoice SutroVax at the time of each shipment of Product(s) for the Price for such shipment. SutroVax will pay such invoices within [***] days of receipt of invoice (including all required documentation) by SutroVax. + +3.2 Prices. The Prices for the Products shall not exceed [***] of the Fully Burdened Manufacturing Costs of such Product at the time such Product is manufactured and shall be set forth in the applicable Work Order. Upon SutroVax's request from time-to-time, Sutro shall disclose to SutroVax the then- current Price for Product. The Price for the Products as of the Effective Date is set forth in Schedule 1. + +3.3 Recordkeeping. During the Term and for [***] years thereafter, or for such longer period as may be required by Applicable Law, Sutro shall prepare and retain, and shall cause its subcontractors to prepare and retain, accurate books and records related to transactions made pursuant to this Supply Agreement and Prices. Such records shall be made available for reasonable review, audit and inspection upon reasonable notice and with reasonable frequency, upon SutroVax's request for the purpose of verifying Sutro's calculations of amounts due hereunder, the basis for such calculations (including Sutro's calculation of the Fully Burdened Manufacturing Costs) or payments and Sutro's compliance with the terms and conditions of this Supply Agreement. Audits and inspections may be conducted by SutroVax's own personnel or retained consultant(s), subject to the confidentiality obligations set forth in this Supply Agreement. + +3.4 Taxes. The Prices are exclusive of all Taxes. SutroVax will pay all taxes and duties that are assessed by any national, federal, state or local governmental authority on SutroVax's purchase or use of the Products, including, without limitation, sales, use, excise, value-added and withholding taxes, but excluding any taxes based on Sutro's income or gross receipts (collectively, "Taxes"). Sutro will separately identify all such Taxes on Sutro's invoice. + + + + + +ARTICLE 4 PRODUCT TESTING + +4.1 Product Testing and Inspections. Each shipment of Product shall be accompanied by a certificate of analysis describing all current requirements of the Specifications and results of tests performed on such Product and a certificate of conformity certifying that the quantities of Product supplied have been Manufactured, controlled and released according to the Required Standards ("COA/COC") as set forth in the applicable Quality Agreement (subject to SutroVax's conduct of the SutroVax Activity Test to confirm Extract meets the SutroVax Activity Criteria). The COA/COC acceptance criteria for each Product shall be set forth in the Specification for such Product. Two of the tests and corresponding COA/COC acceptance criteria for the Extract shall be the performance of a productivity (Activity) test of the applicable Sutro protein (the "Sutro Activity Test" and "Sutro Activity Criteria") and the performance of a productivity (activity) test of the applicable Vaccine Composition (the "SutroVax Activity Test" and "SutroVax Activity Criteria"). Sutro shall perform the Sutro Activity Test to confirm that all shipments of Extract meet the Sutro Activity Criteria and SutroVax (or its designee) shall perform the SutroVax Activity Test to confirm that all shipments of Extract meet the SutroVax Activity Criteria. Sutro will also provide SutroVax with Material Safety Data Sheets ("MSDS") or an equivalent instrument recognized by the applicable Regulatory Authority as required for the Product(s), and updates of the same as necessary. + +4.2 Acceptance/Rejection of Non-Conforming Goods. SutroVax or its designee shall have a period of [***] calendar days from the date of delivery of the Product(s) in accordance with Section 2.6 and the COA/COCs or the equivalent instrument recognized by the applicable Regulatory Authority for such Product(s) ("Acceptance Period"), to inspect any shipment of Product(s) and conduct the SutroVax Activity Test to determine whether such shipment conforms to the Required Standards. If SutroVax determines that the Product(s) do not conform to the Required Standards, it hall notify Sutro within the Acceptance Period, and, if requested by Sutro, SutroVax shall ship a sample of such non-conforming Product(s) to Sutro at Sutro's expense. SutroVax's failure to notify Sutro of the non-conformity within the Acceptance Period will be deemed for purposes of this Supply Agreement to constitute SutroVax's acceptance of such shipment, provided, however, that such acceptance shall be subject to SutroVax's right to reject Product(s) until [***] days from the delivery date of the applicable Product, in each case, due to discovery by SutroVax or SutroVax's Affiliates or designees that the applicable Product does not conform to the Required Standards and such non-conformance could not reasonably be discovered within the Acceptance Period ("Latent Defects") provided that SutroVax gives Sutro with written notice of such Latent Defect within [***] days of SutroVax or any SutroVax Affiliate or designee becoming aware of such defect. + +4.3 Disputes Regarding Conformance to Required Standards. If Sutro does not agree with SutroVax's determination that Product fails to conform to the Required Standards, then Sutro shall so notify SutroVax in writing within [***] days of its receipt of SutroVax's notice of non-conformity with respect to such Product and (if requested) Product sample. Sutro and SutroVax shall use reasonable efforts to resolve such disagreement as promptly as possible. + + + + + +Without limiting the foregoing, Sutro and SutroVax shall discuss in good faith mutually acceptable testing procedures pursuant to which both Sutro and SutroVax will re-test a sample of the disputed Product to determine whether such Product meets the Required Standards. Notwithstanding the foregoing, in the event that Sutro and SutroVax are unable to resolve such disagreement within [***] days of the date of the applicable rejection notice, either Party may submit a sample of the allegedly non-conforming Product for testing and a determination as to whether or not such Product conforms to the Required Standards to an independent testing organization, or to a consultant of recognized repute within the United States pharmaceutical industry, in either case mutually agreed upon by the Parties (such organization or consultant, the "Laboratory"), the appointment of which shall not be unreasonably withheld or delayed by either Party. The determination of the Laboratory with respect to all or part of any shipment of Product shall be final and binding upon the Parties. The fees and expenses of the Laboratory making such determination shall be borne by Sutro, in the event that the Laboratory determines that the Product was non-conforming and by SutroVax, in the event that the Laboratory determines that the Product did conform to the Required Standards. + +4.4 Return and Replacement of Non-Conforming Goods. Product that is either rejected by SutroVax as not meeting the Required Standards, or that is determined by the Laboratory not to meet such Required Standards, shall, [***], be returned by SutroVax to Sutro, or destroyed pursuant to Applicable Law, at Sutro's reasonable expense. Sutro shall replace any non-conforming Product(s) within the shortest possible time. SutroVax shall have no responsibility to Sutro for the amounts invoiced for non-conforming Product(s), and shall be credited for any amounts paid, but shall pay Sutro the applicable Price for the replacement Product(s) under the terms of Section 3.1. + +ARTICLE 5 INSPECTION + +5.1 Right to Audit. During the Term and the [***] period thereafter, SutroVax or a SutroVax Affiliate may, during normal working hours and upon reasonable advance notice perform site audits and inspect, or request information relating to, Sutro's or its subcontractor's Facilities and records directly or indirectly involved in the performance of this Supply Agreement or related to the Product(s). Such requests should be made in writing and Sutro will allow for such audits or inspection to occur within [***] days from request (excepting for cause audits) for Sutro's Facilities and within [***] days' from request (excepting for cause audits) for Sutro's subcontractor's facilities. Reasonable advance notice for audits for cause shall not require more than [***] advance notice. During such an inspection or request for information the inspectors may inquire about the progress of the work being carried out by Sutro or its subcontractor, and are in particular but not exclusively authorized to: + +5.1.1 Inspect the Facilities, documents and equipment used, or to be used, in the Manufacture of the Product(s); + +5.1.2 Verify the qualifications of the employees and subcontractors carrying out such work and their use of the relevant equipment; + + + + + +5.1.3 Evaluate all scientific techniques used by Sutro, its subcontractors and their respective employees in the performance of this Supply Agreement and the procedures used in the creation and storage of samples of the Product(s), provided that nothing in this Section 5.1.3 shall require Sutroto disclose any Sutro Core Know-How; + +5.1.4 Verify and evaluate information relating to the utilization of the Manufacturing capacity of Sutro's Facilities or its subcontractor's Facilities; + +5.1.5 Review correspondence, reports, filings and other documents from Regulatory Authorities to the extent related to the Manufacturing activities hereunder; + +5.1.6 Evaluate the implementation of all Manufacturing and process changes made with respect to the Product, including pursuant to any corrective action plan; and + +5.1.7 Ascertain compliance with Applicable Laws, the Specifications and this Supply Agreement. + +5.2 Access. Sutro shall provide SutroVax's and its Affiliate's and Sublicensee's inspectors with access to its Facilities, and information related to such Facilities, in order that the inspectors may carry out the inspections or inquiries referred to in the provisions of this Article 5. For the avoidance of doubt, neither SutroVax nor any of its Affiliates or Sublicensees (or their respective inspectors) shall have the right to observe the Manufacture of the Extract or be present at Sutro and its subcontractors' Facilities at such times when Extract is being Manufactured. Sutro shall use Commercially Reasonable Efforts to obtain from its subcontractors commitments similar to those contemplated in this Section 5.2. Audits and inspections may be conducted by SutroVax's own personnel or retained consultant(s), subject to the confidentiality obligations set forth in this Supply Agreement. + +5.3 Sutro Audits. Without limiting the foregoing; Sutro is responsible for auditing the facilities of the suppliers of Components, if any, periodically, and Sutro agrees to provide SutroVax, upon SutroVax's request with a current copy of the audit report of such facilities and to incorporate SutroVax's comments with respect to any corrective action plan related to the Product. + +ARTICLE 6 REGULATORY AND QUALITY RESPONSIBILITIES + +6.1 Regulatory Responsibilities. Sutro shall obtain and maintain any and all regulatory and governmental permits, licenses and approvals that are necessary for Sutro to Manufacture the Product(s) for SutroVax or its Affiliates in accordance with the terms of this Supply Agreement and Applicable Law. As between the Parties, SutroVax shall have the sole responsibility for all Regulatory Approvals of the Vaccine Compositions. + +6.2 Right of Reference; Drug Master Files. Sutro shall (a) file Drug Master File(s) for the Products with the FDA as requested by SutroVax, and with Regulatory Authorities in the European Union (including the United Kingdom) and Japan in accordance with timelines to be mutually agreed upon (such agreement not to be unreasonably withheld by either Party) (provided at SutroVax's request, Sutro shall do so within [***] of SutroVax's request using + + + + + +Regulatory Filings that comprise versions of the DMF(s) filed with the FDA that have been reformatted to comply with EU and Japanese requirements), and (b) provide the appropriate authorizations to such Regulatory Authority(ies) allowing the Regulatory Authority the right to review and SutroVax or its designee to reference such Drug Master File(s) in support of (and other Regulatory Materials, to the extent necessary to support) an application for Regulatory Approval submitted by SutroVax (or its permitted designee) for any Vaccine Composition produced using the Product the subject of the applicable Drug Master File (it being understood that SutroVax, its Affiliates· and Sublicensees shall not have access to the information contained in such Drug Master Files (or other confidential Regulatory Materials submitted for a similar purpose as a Drug Master File (e.g., a clinical trial application for such purpose in the European Union)) as a result of such authorization and right to reference). Sutro shall file such Drug Master File in coordination with SutroVax's efforts to file and prosecute the applicable regulatory filings to such Regulatory Authority and Sutro shall be responsible, at SutroVax's sole expense (subject to a budget reasonably approved in advance by SutroVax), for providing the applicable Regulatory Authorities with such additional data as they may request (which may in some cases require Sutro to conduct additional studies), and for correcting any deficiencies of such Drug Master File identified by such Regulatory Authority, in each case in a reasonably prompt and efficient manner so as to prevent any delay in obtaining Regulatory Approvals for any Vaccine Composition based on such Drug Master File. In addition, Sutro shall be responsible for maintaining such Drug Master File in accordance with applicable Laws as necessary to support filing and prosecuting the applicable regulatory filing(s) and obtaining and maintaining the applicable Regulatory Approval(s) for Vaccine Compositions produced using the Products. For further clarity, to the extent Sutro discloses. Sutro Know- How to SutroVax, SutroVax shall have the right to include (and authorize the inclusion of) such Sutro Know-How in Regulatory Materials to the extent it is necessary or useful for the purpose of obtaining Regulatory Approval of a Vaccine Composition. Sutro's obligations under this Section 6.2 shall [***]. Sutro shall cause its personnel to record time spent performing such activities to a job code specific to such activities. For purposes of this Article 6 "Drug Master File" or "DMF" means a submission to a Regulatory Authority of information concerning the chemistry, manufacturing and controls ("CMC") of the Products to permit such Regulatory Authority to review this information in support of any application for Regulatory Approval for a product submitted by a party that has been granted a right to reference such submission without disclosing the contents of such submission to such party. Sutro shall file DMF(s) for the Products with other Regulatory Authorities in the Territory in accordance with the terms and conditions of the Phase 3/Commercial Supply Agreement referenced in Section 2.14 (and, for clarity, shall file DMF(s) for the Products with Regulatory Authorities in the European Union (including the United Kingdom) and Japan as necessary to comply with the requirements of such Regulatory Authorities, to the extent not filed under this Supply Agreement). + +6.2.1 Compliance. Subject to the foregoing, Sutro shall provide the information set forth under this Section 6.2 in a timely manner and compliant with the reporting requirements of the Regulatory Authorities. + + + + + +6.2.2 Safety Data. Each Party understands and acknowledges that the other Party and its Affiliates and respective licensees or sublicensees may need to access and utilize and include certain safety data (e.g., adverse event reports) pertaining to product made using Products that is generated or received by such Party and its Affiliates and respective licensees or sublicensees in its Regulatory Materials in its respective Territory as required by applicable Laws. Each Party shall have the right to share any and all such safety data generated by the other Party or the other Party's Affiliates or licensees or sublicensees with its Affiliates and Third Parties (including its licensees and sublicensees) as permitted under section 10.2 of the License Agreement. + +6.2.3 Cooperation. Each Party agrees to (i) make its personnel reasonably available at their respective places of employment to consult with the other Party on issues related to the activities conducted in accordance with this Article 6 or otherwise relating to the development of the Products or Vaccine Compositions and thereafter in connection with any request from any Regulatory Authority, including with respect to regulatory, scientific, technical and clinical testing issues, or otherwise, throughout the Term, and (ii) otherwise provide such assistance as may be reasonably requested by the other from time-to-time in connection with the activities to be conducted under this Article 6 or otherwise relating to the development of the Vaccine Compositions or Products. + +6.3 Recalls. Each of SutroVax and Sutro will immediately inform the other in writing if it believes one or more lots of any Product(s), or any products made by Sutro or its licensees using the Products (to the extent such products are made using Products from the same batch provided to SutroVax), or any Vaccine Compositions should be subject to recall from distribution, withdrawal or some other field action, or that potential adulteration, misbranding, and/or other issues have arisen that relate to the safety or efficacy of such Product. SutroVax shall have the final decision-making authority as to any such recall or field action and the sole right to initiate any such recall or field action with respect to Vaccine Compositions made using the Products. Sutro shall cooperate in the conduct of any recall or field action with respect to the Vaccine Compositions as reasonably requested by SutroVax. In the event it is determined that such a recall resulted from a breach by either Party of any of its representations, warranties, duties or obligations under this Supply Agreement, such Party shall be responsible for the costs of the recall and shall reimburse the other Party as necessary; provided that if both Parties share responsibility with respect to such recall, the costs shall be shared in the ratio of the Parties' contributory responsibility. + +6.4 Retention of Samples. Sutro shall prepare and retain, and shall cause its subcontractors to prepare and retain, such samples and records in respect of the Product(s) and the Manufacture thereof as are required by Applicable Law (including, as applicable, cGMPs). + +6.5 Regulatory Authority Inspections and Correspondence. Sutro shall permit Regulatory Authorities to conduct such inspections of any Facility at which any of the Manufacturing activities relating to the Product(s) are performed, as such Regulatory Authorities may request, including pre-approval inspections,· and shall cooperate with such Regulatory Authorities with respect to such inspections and any related matters, in each case that is related to the Manufacture of Product(s). Sutro shall give SutroVax or its Affiliates prior written notice of any such inspections, and shall keep SutroVax informed about the results and conclusions of each such regulatory inspection, including actions taken by Sutro to remedy conditions cited in such inspections. Sutro shall provide SutroVax with copies of any written inspection reports issued by anyRegulatory Authority and all correspondence between Sutro and any Regulatory Authority with respect thereto, including any notices of observation and all related + + + + + +correspondence, in each case relating to the Product(s) or its Manufacture or to general manufacturing concerns (e.g., facility compliance or the like) that are reasonably likely to impact the Product(s) to the extent such general manufacturing matters would be reasonably expected to have a material effect on the manufacture of Vaccine Compositions; provided that Sutro may redact from any such report and correspondence any Sutro Core Know-How and any information subject to an obligation of confidentiality to a Third Party. In addition, Sutro agrees to promptly notify and provide SutroVax copies of any material request, directive, or other written communication to or from Regulatory Authorities related to the Product or its Manufacture that would reasonably be expected to have a material effect on the manufacture of Vaccine Compositions (it being understood that SutroVax, its Affiliates and Sublicensees shall not have access to Sutro Core Know How (which Sutro may redact from such reports or correspondence provided to SutroVax) or Sutro's Drug Master Files or other confidential Regulatory Materials submitted for a similar purpose as a Drug Master File). Sutro shall provide SutroVax with a copy of the applicable portion of any correspondence made by Sutro to a Regulatory Authority for review and comment prior to submission to the applicable Regulatory Authority solely to the extent such correspondence made by Sutro is related to SutroVax or is in response to a request, directive or correspondence from the applicable Regulatory Authority regarding SutroVax or a Vaccine Composition (e.g., in response to a report regarding a pre- approval inspection for SutroVax). Sutro will consider in good faith any comments received from SutroVax within the time period indicated by Sutro (which shall not be less than [***], to the extent consistent with the require timeline for Sutro's response) with respect to any matter that relates to SutroVax. In addition, Sutro shall notify SutroVax of any occurrences or information that arise out of Sutro's Manufacturing activities that have, or could reasonably be expected to have, adverse regulatory compliance or reporting consequences concerning any Product(s) or which might otherwise be reasonably expected to adversely affect the supply by Sutro of Product(s) to SutroVax. + +6.6 Changes or Modifications in Manufacturing Activities. Sutro shall not make any changes to the Specifications, processes, Facilities, raw materials, raw material suppliers or any other item that would affect the Manufacturing activities related to the Product (a "Manufacturing Change") that (a) would require a change to the applicable Drug Master File, (b) would be reasonably expected to cause SutroVax to be materially delayed obtaining any Regulatory Approval with respect to Vaccine Compositions or (c) causes the Product to not meet the Specification therefor (including the Activity Test with respect to Extract); without SutroVax's prior written consent (not to be unreasonably withheld, conditioned or delated). Notwithstanding the foregoing, Sutro shall promptly make and implement such changes as are required by Applicable Law provided that, prior to implementation, Sutro shall provide notice thereof to SutroVax and confer with SutroVax with respect to its timelines, estimated effect on Price and other issues regarding such implementation. Sutro shall provide SutroVax at least [***] days' written notice prior to implementing any Manufacturing Change. Sutro shall not make any change to the Specification for a Product without SutroVax's prior written consent. In addition, SutroVax shall have the right to request changes in or modifications to the Specifications and Sutro will consider in good faith any such requested changes or modifications. All such changes or modifications shall be documented in writing and shall be signed by an authorized representative of SutroVax and Sutro. If such changes or modifications result in a material change in Sutro's Manufacturing costs or lead times, the Parties shall agree upon an appropriate adjustment to the Price or in the delivery schedules, as the case may be, for Product(s) to be provided by Sutro hereunder. Sutro shall promptly implement any agreed upon changes to the Specifications. + + + + + +6.7 Quality Agreement. As soon as reasonably practicable after the Effective Date, the Parties shall enter into a quality agreement governing Sutro's supply of Products (the "Quality Agreement"), which Quality Agreement shall include the Specifications for the Product(s) consistent with the Specifications set forth in Schedule 2. Accordingly, to permit the Quality Agreement to be finalized within such period, Sutro shall provide SutroVax or its designee access to Sutro's Facilities and records to enable SutroVax or its designee to complete an audit pursuant to Section 5.1 within [***] days after the Effective Date. + +ARTICLE 7 REPRESENTATION AND WARRANTIES + +7.1 SutroVax Warranties and Representations. SutroVax represents and warrants the following: + +7.1.1 SutroVax is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. + +7.1.2 SutroVax has all requisite power and authority to enter into this Supply Agreement. The person signing this Supply Agreement has the necessary corporate authority to legally bind SutroVax to the terms set forth herein. + +7.1.3 SutroVax's execution of this Supply Agreement and performance of the terms set forth herein will not cause SutroVax to be in conflict with or constitute a breach of its organizational documents nor any other agreement, court order, consent decree or other arrangement, whether written or oral, by which it is bound. + +7.1.4 SutroVax's execution of this Supply Agreement and performance hereunder are in, and will be in, compliance with any Applicable Law in all material respects. + +7.1.5 This Supply Agreement is its legal, valid and binding obligation, enforceable against SutroVax in accordance with the terms and conditions hereof, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors' rights generally or by the principles governing the availability of equitable remedies. + +7.2 Sutro Warranties and Representations. Sutro represents and warrants the following: + +7.2.1 Sutro is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. + +7.2.2 Sutro has all requisite power and authority to enter into this Supply Agreement and has the requisite skill, knowledge, staffing, financial resources, capacity and ability to carry out its obligations hereunder. The person signing this Supply Agreement has the necessary authority to legally bind Sutro to the terms set forth herein. + + + + + +7.2.3 Sutro's execution of this Supply Agreement and performance of the terms set forth herein will not cause Sutro to be in conflict with or constitute a breach of its organizational documents nor any other agreement, court order, consent decree or other arrangement, whether written or oral, by which it is bound. + +7.2.4 Sutro's execution of this Supply Agreement and performance hereunder are in, and will be in, compliance with any Applicable Law in all material respects. + +7.2.5 Sutro has and will maintain throughout the Term all permits, licenses, registrations and other forms of governmental authorization. and approval as required by Applicable Law in order for Sutro to execute and deliver this Supply Agreement and to perform its obligations hereunder in accordance with all Applicable Law. + +7.2.6 as of the Effective Date, to the best of Sutro's knowledge, the practice of the Sutro Platform, including the use of the Products, does not infringe any Third Party patents. + +7.2.7 7.2.7 Sutro is not debarred and Sutro has not and will not use in any capacity the services of any person debarred under subsection 306(a) or (b) of the U.S. Generic Drug Enforcement Act of 1992, or other Applicable Law, nor have debarment proceedings against Sutro or any of its employees or permitted subcontractors been commenced. + +7.2.8 This Supply Agreement is its legal, valid and binding obligation, enforceable against Sutro in accordance with the terms and conditions hereof, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors' rights generally or by the principles governing the availability of equitable remedies. + +7.2.9 As of the Effective Date, there are no claims, judgments or settlements against or owed by Sutro or its Affiliates, or pending or, to the best of Sutro's knowledge, threatened claims or litigation, relating to the Product(s). + +7.3 Product Warranties. Sutro represents and warrants that: + +7.3.1 Sutro's Facility and all Product (as delivered in accordance with Section 2.1 and until the expiration date thereof) supplied hereunder (and the Manufacture thereof) shall comply with this Supply Agreement, all Applicable Law (including cGMPs, if applicable),·be free from defects in material and workmanship, and meet all Specifications. + +7.3.2 Title to all Product(s) provided under this Supply Agreement shall pass to SutroVax as set forth in Section 2.6, free and clear of any security interest, lien, or other encumbrance. + +7.4 Disclaimer. EACH PARTY AGREES AND ACKNOWLEDGES THAT, EXCEPT AS SET FORTH IN THIS ARTICLE 7, NEITHER PARTY MAKES ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND WHATSOEVER, IMPLIED OR STATUTORY, AND EACH PARTY HEREBY EXPRESSLY DISCLAIMS ALL REPRESENTATIONS AND WARRANTIES, IMPLIED OR STATUTORY, INCLUDING ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AGAINST NON-INFRINGEMENT OR THE LIKE, OR ARISING FROM COURSE OF PERFORMANCE. + + + + + +ARTICLE 8 CONFIDENTIALITY + +8.1 Article 10 of the License Agreement (Confidentiality) is hereby incorporated into this Supply Agreement by reference. The terms and provisions of this Supply Agreement (which shall be the Discloser's Information of both Parties) and all other information and data, including all notes, books, papers, diagrams, documents, reports, e-mail, memoranda, visual observations, oral communications and all other data or information in whatever form, that one Party or any of its Affiliates or representatives supplies or otherwise makes available to the other Party or its Affiliates or representatives pursuant to this Supply Agreement shall be deemed Discloser's Information pursuant to Article 10 of the License Agreement. + +ARTICLE 9 INDEMNIFICATION AND INSURANCE + +9.1 Indemnification. + +9.1.1 Indemnification by Sutro. Sutro hereby agrees, at its sole cost and expense, to defend, hold harmless and indemnify, to the extent permitted by Applicable Law, (collectively, "Indemnify") SutroVax and its Affiliates and their respective agents, directors, officers and employees of such Persons and the respective successors and assigns of any of the foregoing (the "SutroVax Indemnitees") from and against any and all liabilities, damages, penalties, fines, costs and expenses (including, reasonable attorneys' fees and other expenses of litigation) (collectively, "Liabilities") resulting from suits, claims, actions and demands, in each case brought by a Third Party (each, a "Third-Party Claim") against any SutroVax Indemnitee and arising from or occurring as a result of: [***]. Sutro's obligation to Indemnify the SutroVax Indemnitees pursuant to this Section 9.1.1 shall not apply to the extent that any such Liabilities are the result of a material breach by SutroVax of its obligations, representations, warranties or covenants under this Supply Agreement or the License Agreement or any SutroVax Indemnitee' s negligence or willful misconduct. + +9.1.2 Indemnification by SutroVax. SutroVax hereby agrees to Indemnify Sutro and its agents, directors, officers and employees and the respective successors and assigns of any of the foregoing (the "Sutro lndemnitees") from and against any and all Liabilities resulting from Third-Party Claims against any Sutro Indemnitee arising from or occurring as a result of: [***]. SutroVax's obligation to Indemnify the Sutro Indemnitees pursuant to this Section 9.1.2 shall not apply to the extent that any such Liabilities are the result of a material breach by Sutro of its obligations, representations, warranties or covenants under this Supply Agreement or the License Agreement or any Sutro Indemnitee's negligence or willful misconduct. + + + + + +9.1.3 Procedure. To be eligible to be Indemnified hereunder, the indemnified Person shall provide the indemnifying Party with prompt written notice of the Third-Party Claim giving rise to the indemnification obligation pursuant to this Section 9.1 and the right to control the defense (with the reasonable cooperation of the indemnified Person) or settlement any such claim; provided, however, that the indemnifying Party shall not enter into any settlement that admits fault, wrongdoing or damages without the indemnified Person's written consent, such consent not to be unreasonably withheld or delayed. The indemnified Person shall have the right to join, but not to control, at its own expense and with counsel of its choice, the defense of any claim or suit that has been assumed by the indemnifying Party. + +9.2 Insurance. Each Party shall procure and maintain insurance, including clinical trials and product liability insurance, adequate to cover its obligations hereunder and consistent with normal business practices of prudent companies similarly situated at all times during which any Product or Vaccine Compositions is being clinically tested in human subjects or commercially distributed or sold by such Party. It is understood that such insurance shall not be construed to create a limit of either Party's liability or indemnification obligations under this Article 9, or that the maintenance of such insurance shall not be construed to relieve either Party of its other obligations under this Supply Agreement. Each Party shall provide the other with written evidence of such insurance upon request. Each Party shall provide the other with written notice at least [***] days prior to the cancellation, non renewal or material change in such insurance. + +9.3 LIMITATION OF LIABILITY. EXCEPT (I) WITH RESPECT TO ANY BREACH OF ARTICLE 8 (CONFIDENTIALITY), (II) FOR THIRD PARTY PENALTIES, COSTS AND EXPENSES AS SET FORTH IN SECTION 2.9, OR (III) FOR [***], TO THE MAXIMUM EXTENT PERMITTED BY LAW, (A) NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL OR PUNITIVE DAMAGES, WHETHER LIABILITY IS ASSERTED IN CONTRACT, TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY, OR ANY OTHER THEORY OR FORM OF ACTION, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY THEREOF; AND (B) EACH PARTY'S TOTAL LIABILITY TO THE OTHER PARTY UNDER THIS SUPPLY AGREEMENT SHALL NOT EXCEED [***]. SUTRO'S LIABITY TO SUTROVAX FOR THIRD PARTY PENALTIES, COSTS AND EXPENSES UNDER SECTION 2.9 SHALL NOT EXCEED [***]. + +ARTICLE 10 TERM AND TERMINATION + +10.1 Term. The term of this Supply Agreement shall begin on the Effective Date first set forth above and shall remain in effect until the later of (a) July 31, 2021 or (b) the date that the Parties enter into the Phase 3/Commercial Supply Agreement and Sutro is supplying to SutroVax each Product under the Phase 3/Commercial Supply Agreement (the "Term"), unless it is terminated earlier in accordance with Section 10.2. + +10.2 Termination. Notwithstanding anything to the contrary in this Supply Agreement, this Supply Agreement may be terminated: + +10.2.1 in its entirety or with respect to one or more Products, on a Product-by-Product basis, by mutual written consent of Sutro and SutroVax; + + + + + +10.2.2 in its entirety by a Party if the other Party materially breaches any of the material terms, conditions or agreements contained in this Supply Agreement to be kept, observed or performed by the other Party, by giving the Party who committed the breach [***] days' prior written notice, unless the notified Party shall have cured the breach within such [***]-day period; and + +10.2.3 in its entirety or with respect to one or more Products, on a Product-by-Product basis, by SutroVax upon [***] days' prior written notice to Sutro for any reason. + +10.3 Effects of Termination. Upon the expiration of the Term or termination of this Supply Agreement, in its entirety or with respect to one or more Products, this Supply Agreement shall, except as otherwise provided in this Section 10.3 or Section 10.5, be of no further force or effect; provided, however, that (a) in the event this Supply Agreement is terminated by SutroVax pursuant to Section 10.2.3 and there are outstanding Work Orders or other purchase orders accepted by Sutro that would not be fulfilled as a result of such termination, SutroVax shall reimburse Sutro for all supplies and materials purchased by Sutro and time incurred by Sutro personnel (to the extent incurred solely for manufacture of Product for SutroVax) for the manufacture, or preparation for the manufacture, of Products for any Work Orders placed by SutroVax and any other purchase orders accepted by Sutro prior to such expiration or termination, in each case to the extent Sutro cannot otherwise reasonably mitigate such the costs and expenses of such supplies, materials and time (e.g., by use of resulting supplies, materials and work-in-progress Product for other purposes); provided that to the extent SutroVax pays for any supplies or materials, upon SutroVax's request Sutro shall promptly transfer and deliver such supplies and materials to SutroVax; and (b) if this Supply Agreement is terminated with respect to one or more Products, but not all Products, then this Supply Agreement shall continue in full force and effect with respect to the applicable Product(s) for which it is not terminated. + +10.4 Nonexclusive Remedy. Exercise of any right of termination afforded to either Party under this Supply Agreement (i) shall not prejudice any other legal rights or remedies either Party have against the other in respect of any breach of the terms and conditions of this Supply Agreement, and (ii) shall be without any obligation or liability arising from such termination other than such obligations expressly arising from termination of this Supply Agreement. + +10.5 Survival. Expiration of the Term or termination of this Supply Agreement (for any reason) shall not affect any accrued rights or liabilities of either Party. Article 4 (Product Testing), Article 5 (Inspection), Article 8 (Confidentiality), Article 9 (Indemnification and Insurance), Article 11 (Disputes), Article 12 (Miscellaneous), and Sections 2.2 (Transfer of Product), 2.14 (Phase 3/Commercial Supply Agreement), 2.15 (Qualification of Alternate Supplier), 2.17 (Manufacture of Custom Reagents), 3.3 (Recordkeeping), 3.4 (Taxes), 6.2 (Right of Reference; Drug Master Files), 6.3 (Recalls), 6.4 (Retention of Samples), 6.5 Regulatory Authority Inspections and Correspondence), 7.3 (Product Warranties), 7.4 (Disclaimer), 10.3 (Effects of Termination), 10.4 (Nonexclusive Remedy), and 10.5 (Survival) shall survive any expiration of the Term or termination of this Supply Agreement. + + + + + +ARTICLE 11 DISPUTE RESOLUTION + +11.1 Principal Contacts. Each Party will appoint an individual employed by it to serve as its "Principal Contact" for purposes of this Supply Agreement. Either Party may from time to time replace its Principal Contact with a different employee, but unless required due to events beyond its control, neither Party will replace its Principal Contact without at least [***] days prior notice to the other Party. The two Principal Contacts shall communicate with each other regularly during the Term as the Parties may agree or as the Principal Contacts shall mutually determine to be useful. + +11.2 Escalation. The Parties intend that, to the maximum extent practicable, they shall reach decisions hereunder cooperatively through discussions among the Principal Contacts and by mutual consent of the Parties. In situations in which that does not occur, disputes or differences arising out of or in connection with this Supply Agreement shall initially be referred for review by the Parties' respective Senior Managements (as defined below). Such Senior Managements shall discuss the proposed dispute or difference, and shall meet with respect thereto if either of them believes a meeting or meetings are likely to be useful. If the Senior Managements do not resolve the dispute or difference within [***] days (or such lesser or longer period as they may agree is a useful period for their discussions), then either Party may pursue its other available remedies, consistent with this Supply Agreement. As used herein, Sutro's "Senior Management" means its then-current CEO, and SutroVax's "Senior Management" means its then-current CEO. For clarity, there shall be no obligation for any Disputed Matter arising out of Section 2.14 or 2.15 to be referred to the Senior Management to review prior to such matters being resolved by arbitration pursuant to Sections 11.3 and 11.4. + +11.3 Arbitration. If the Senior Managements are not able to resolve such dispute referred to them under Section 11.2 within such [***] day period, then such dispute shall be resolved by final and binding arbitration as follows: The Parties shall select a mutually agreeable arbitrator who has significant relevant experience in the subject matter of the disputed issue and no affiliation or pre-existing relationship with either Party. If the Parties cannot agree on an arbitrator within [***] days after the end of the [***] day period referred in Section 11.2 (or with respect to a Disputed Matter described in Section 11.4, after referral by a Party of such Disputed Matter to arbitration), either Party may request the Judicial and Mediation Services ("JAMS") in San Francisco, CA to appoint an arbitrator on behalf of the Parties in accordance with the commercial arbitration rules of JAMS, and the proceeding shall be conducted in accordance with JAMS rules. The arbitrator may decide any issue as to whether, or as to the extent to which, any dispute is subject to the arbitration and other dispute resolution provisions in this Supply Agreement. The arbitrator must base the award on the provisions of this Supply Agreement and must render the award in a writing which must include an explanation of the reasons for such award. Judgment upon the award rendered by the arbitrator may be entered by any court having jurisdiction thereof. The arbitrator's fees and expenses shall be shared equally by the Parties, unless the arbitrator in the award assesses such fees and expenses against one of the Parties or allocates such fees and expenses other than equally between the Parties. Each Party shall bear and pay its own expenses incurred in connection with any dispute resolution under this Section 11.3. Notwithstanding the foregoing, either Party shall have the right, without waiving any right or remedy available to such Party under this Supply Agreement or otherwise, to seek and obtain from any court of competent jurisdiction any interim or provisional relief that is necessary or desirable to protect the rights or property of such Party, pending the selection of the arbitrator hereunder or pending the arbitrator's decision of the dispute subject to arbitration. + + + + + +11.4 Baseball Arbitration. In the event (a) the Parties do not enter into a Phase 3/Commercial Supply Agreement as described in Section 2.14 or (b) the Parties do not enter into a Transfer Addendum as described in Section 2.15 ("Disputed Matter"), then upon either Party's request with respect to the Disputed Matter in clause (a) or SutroVax's request with respect to the Disputed Matter in clause (b), such Disputed Matter shall be resolved by binding arbitration conducted pursuant to Section 11.3, except that the procedures for the conduct of such arbitration shall be as follows: + +11.4.1 Each Party shall provide the arbitrator and the other Party with a written report setting forth its position with respect to the substance of such Disputed Matter and a full draft Phase 3/Commercial Supply Agreement or Transfer Addendum, as applicable, and may submit a revised report, position and draft Phase 3/Commercial Supply Agreement or Transfer Addendum, as applicable, to the arbitrator within [***] days of receiving the other Party's report and draft Phase 3/Commercial Supply Agreement or Transfer Addendum, as applicable. If so requested by the arbitrator, each Party shall make oral and/or other written submissions to the arbitrator in accordance with procedures to be established by the arbitrator; provided that other Party shall have the right to be present during any oral submissions. The arbitrator shall select one of the Party's draft Phase 3/Commercial Supply Agreement or Transfer Addendum, as applicable, as his or her decision, based on what is most reasonable and equitable to each of the Parties under the circumstances and reflective of reasonable and customary terms in the biopharmaceutical industry for agreements of this type and most closely reflects the Parties' intent as expressed in this Supply Agreement and the License Agreement, and shall not have the authority to render any substantive decision other than to so select the draft Phase 3/Commercial Supply Agreement or Transfer Addendum, as applicable, of Sutro or SutroVax (as initially submitted, or as revised in accordance with the foregoing, as applicable). For clarity, it is understood that the Parties intend the arbitration under this Section 11.4 to be a "baseball arbitration" type proceeding; and the arbitrator may fashion such detailed procedures as the arbitrator considers appropriate to implement this intent. Notwithstanding anything to the contrary, in no event shall the Phase 3/Commercial Supply Agreement or Transfer Addendum contain any provision granting to SutroVax or its Affiliates or Sublicensees any right to obtain or use any Sutro Core Know-How. + +11.4.2 In any arbitration under this Section 11.4, the arbitrator and the Parties shall use their best efforts to resolve such Disputed Matter within [***] days after the selection of the arbitrator, or as soon thereafter as is practicable. + +ARTICLE 12 MISCELLANEOUS + +12.1 Expenses. Except as otherwise expressly provided herein, each Party shall bear its own costs, fees and expenses incurred by such Party in connection with this Supply Agreement. + +12.2 Licenses and Permits. Each Party shall, at its sole cost and expense, maintain in full force and affect all necessary licenses, permits, and other authorizations required by Applicable Law in order to carry out its duties and obligations hereunder. + + + + + +12.3 Force Majeure. No Party shall be liable for a failure or delay in performing any of its obligations under this Supply Agreement if, but only to the extent that such failure or delay is due to causes beyond the reasonable control of the affected Party, including: (a) acts of God; (b) fire, explosion, or unusually severe weather; (c) war, invasion, riot, terrorism, or other civil unrest; (d) governmental laws, orders, restrictions, actions, embargo or blockages; (e) national or regional emergency; (f) strikes or industrial disputes at a national level which directly impact the affected Party's performance under this Supply Agreement; or (g) other similar cause outside of the reasonable control of such Party ("Force Majeure"); provided that the Party affected shall promptly notify the other of the Force Majeure condition and shall use reasonable efforts to eliminate, cure or overcome any such causes and resume performance of its obligations as soon as possible. If the performance of any obligation of a Party under this Supply Agreement is delayed owing to such a Force Majeure for any continuous period of more than [***] days, the other Party shall have the right to terminate this Supply Agreement. + +12.4 Neither Party may assign or transfer this Supply Agreement, including by merger, operation of law, or otherwise, without the other Party's prior written consent (which shall not be withheld unreasonably) except each Party may assign this Supply Agreement without the other Party's consent in the case of assignment or transfer to a Third Party that succeeds to all or substantially all of the assigning Party's business and assets relating to the subject matter of this Supply Agreement, whether by sale, merger, operation of law or otherwise. Any attempted assignment by a Party in violation of this Section without the written consent of the other Party will be null and void. Except as above limited, this Supply Agreement is binding upon and will inure to the benefit of each of the Parties, its successors and assigns. Without limiting the foregoing, in the event that a Party is acquired, the acquiring Party shall agree in writing to abide by the terms of this Supply Agreement. Sutro agrees that if it assigns the License Agreement to any successor as allowed under section 15.1 of the License Agreement, it will also assign to such successor this Supply Agreement in accordance with this Section 12.4. + +12.5 This Supply Agreement incorporates the Exhibits referenced herein. This Supply Agreement, together with the License Agreement, constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral, between the Parties hereto with respect to its subject matter. To the extent of any conflict between this Agreement and the License Agreement, the License Agreement shall govern and control. + +12.6 All notices, requests or other communication provided for or permitted hereunder shall be given in writing and shall be hand delivered or sent by confirmed facsimile, reputable courier or by registered or certified mail, postage prepaid, return receipt requested, to the address set forth below, or to such other address of which either Party may inform the other in writing. Notices will be deemed delivered on the earliest of transmission by facsimile, actual receipt or [***] days after mailing as described herein. + +If to Sutro: Sutro Biopharma, Inc. 310 Utah Ave., Suite 150 South San Francisco, CA 94080 Attention: Chief Executive Officer + + + + + +If to SutroVax: SutroVax, Inc. 353 Hatch Dr. Foster City, CA 94404 Attention: Chief Executive Officer + +12.7 This Supply Agreement may be amended, modified or waived only in a writing signed by the Party or Parties to be bound thereby. + +12.8 If any provision of this Supply Agreement shall be held invalid, illegal or unenforceable, such provision shall be enforced to the maximum extent permitted by law and the Parties' fundamental intentions hereunder, and the remaining provisions shall not be affected or impaired. + +12.9 Nothing herein contained shall constitute this a joint venture agreement and nothing herein shall constitute any Party as a partner, principal or agent of any other, this being an agreement between independent contracting entities. Except as expressly set forth herein, no Party shall have the authority to bind any other in any respect whatsoever to Third Parties. Except as provided herein, nothing contained in this Supply Agreement shall be construed as conferring any right on any Party to use any name, trade name, trademark or other designation of any other Party hereto, unless the express, written permission of such other Party has been obtained. + +12.10 This Supply Agreement has been submitted to the scrutiny of, and has been negotiated by, both Parties and their counsel, and shall be given a fair and reasonable interpretation in accordance with its terms, without consideration or weight being given to any such term's having been drafted by any Party or its counsel. + +12.11 This Supply Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of California, without regard to any conflict of laws rules to the contrary. + +12.12 Each Party acknowledges that the other Party may likely suffer irreparable harm from such Party's breach or threatened breach of this Agreement and the other Party, in such cases, would therefore be entitled, without waiving any other right or remedy available to, to injunctive relief (including specific performance) without the requirement to post a bond, provided the waiver by such Party of the other Party's requirement to post a bond shall expire on the Change of Control of the other Party, and each party agrees that the arbitrator selected under Section 11.3 shall have the power to grant such injunctive relief (or order specific performance). The Parties shall comply with any such injunctive relief (including specific performance) ordered by the arbitrator and agree that such order may, to the extent not precluded by applicable law, be enforceable as a final award in any court of competent jurisdiction. + +12.13 This Supply Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Facsimile and other electronically scanned signatures shall have the same effect as their originals. + +[The remainder of this page is left intentionally blank] + + + + + +IN WITNESS WHEREOF, the Parties have caused this Supply Agreement to be executed by their respective duly authorized officers as of the Effective Date, each copy of which will for all purposes be deemed to be an original. SUTRO BIOPHARMA, INC. SUTROVAX, INC. + +By: /s/ William J. Newell By: /s/ Grant E. Pickering Name: William J. Newell Name: Grant E. Pickering Title: CEO Title: President & CEO + + + + + +SCHEDULE 1 + +PRODUCTS AND PRICE + +[***] + + + + + +SCHEDULE2 + +SPECIFICATIONS + +{6 pages omitted} + +[***] + + + + + +SCHEDULE3 + +INITIAL ORDER + +[***] + + + + + +SCHEDULE 2.15.1 + +REPRESENTATIVE CMOS + +[***] \ No newline at end of file diff --git a/full_contract_txt/VEONEER,INC_02_21_2020-EX-10.11-JOINT VENTURE AGREEMENT.txt b/full_contract_txt/VEONEER,INC_02_21_2020-EX-10.11-JOINT VENTURE AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..93d7d8b452f98ff007307ce0163f51a0639ffaac --- /dev/null +++ b/full_contract_txt/VEONEER,INC_02_21_2020-EX-10.11-JOINT VENTURE AGREEMENT.txt @@ -0,0 +1,93 @@ +Exhibit 10.11 + +AMENDMENT AND TERMINATION + +OF + +JOINT VENTURE AGREEMENT + +This AMENDMENT AND TERMINATION OF JOINT VENTURE AGREEMENT (this "Amendment") is made and entered into effective as of October 30, 2019 (the "Effective Date") by and among (1) Veoneer AB, a Swedish corporation ("Veoneer AB") and Veoneer US, Inc., a Delaware corporation ("Veoneer US" and together with Veoneer AB, the "Veoneer Parties"), and (2) Nissin Kogyo Co., Ltd., a Japanese corporation ("Nissin"), Nissin Kogyo Holdings USA, Inc., an Ohio corporation ("Nissin Holding") and Zhongshan Nissin Industry Co., Ltd., a Peoples' Republic of China company ("NBZ" and together with Nissin and Nissin Holding, the "Nissin Parties"), as an amendment to that certain Joint Venture Agreement dated March 7, 2016 by and among Autoliv ASP, Inc. ("Autoliv ASP"), Autoliv AB ("Autoliv AB") and Autoliv Holding, Inc. ("Autoliv Holding" and together with Autoliv ASP and Autoliv AB, the "Autoliv Parties") and the Nissin Parties, as amended, supplemented or otherwise modified from time to time in accordance with the terms thereof and in effect on the date hereof (the "JV Agreement"). Capitalized terms not defined in this Amendment shall have the meanings as assigned thereto in the JV Agreement. + +RECITALS + +(A)The Autoliv Parties and the Nissin Parties entered into the JV Agreement as of March 7, 2016 to engage in the JV Business through Veoneer Nissin Brake Systems Japan, Co., Ltd. ("VNBJ"), Veoneer Nissin Brake Systems America, LLC (whose corporate name has since been changed to Veoneer Brake Systems, LLC, "VNBA"), Veoneer Nissin Brake Systems (Zhongshan), Co., Ltd. ("VNBZ") and Autoliv Nissin Brake Research Asia Co., Ltd. ("ANRA"); + +(B)The Autoliv Parties, the Veoneer Parties and the Nissin Parties entered into that certain Addendum to Joint Venture Agreement as of September 3, 2018 pursuant to which (i) Autoliv ASP assigned the JV Agreement as well as all the rights and obligations thereunder to Veoneer US and ceased to be a party thereto and (ii) each of Autoliv AB and Autoliv Holding assigned the JV Agreement as well as all the rights and obligations thereunder to Veoneer AB and ceased to be a party thereto; + +(C)Notwithstanding the preceding paragraph (B), Autoliv AB remains a party to the JV Agreement only in relation to ANRA and only to the extent necessary to deal with the liquidation proceedings of ANRA; + +(D)Nissin and the Veoneer Parties entered into that certain VNBA Separation Agreement as of June 14, 2019 pursuant to which, among other things, Nissin Holding sold, and Veoneer Roadscape Automotive, Inc. purchased, as of June 28, 2019, all of Nissin Holding's membership interests in VNBA; + +(E)The Veoneer Parties and the Nissin Parties entered into that certain Amendment to Joint Venture Agreement as of June 28, 2019 pursuant to which, among other things, the JV Agreement ceased to have any application or effect to VNBA as of June 28, 2019; + +(F)Honda Motor Co., Ltd. ("Honda"), as of the Effective Date, Nissin and Veoneer AB entered into those certain (1) VNBJ Share Purchase Agreement, pursuant to which Veoneer AB is selling, and Honda and Nissin are purchasing, all of Veoneer AB's outstanding shares in VNBJ (the "VNBJ SPA," and the consummation of the transactions pursuant to the terms of the VNBJ SPA, the "VNBJ Closing") and (2) VNBZ Share Purchase Agreement, pursuant to which Veoneer AB is selling, and Honda and Nissin are purchasing, all of Veoneer AB's equity interests in VNBZ (the "VNBZ SPA," and the consummation of the transactions pursuant to the terms of the VNBZ SPA, the "VNBZ Closing"); and + + + + + +(A)Upon the later of the VNBJ Closing and the VNBZ Closing, no Veoneer Party will hold any equity interest in any of the Companies. + +NOW, THEREFORE, the Veoneer Parties and the Nissin Parties hereby agree as follows: + +Article 1.Amendment and Termination of JV Agreement + +a.As of the VNBJ Closing, except as expressly set forth in this Amendment, the JV Agreement shall immediately cease to have any application or effect with respect to VNBJ, all rights and obligations with respect to VNBJ under the JV Agreement shall terminate and all references to "Company" or "Companies" in the JV Agreement (either in the body of the JV Agreement or its schedules and other attachments) shall read and be interpreted to mean VNBZ and/or ANRA except as the context otherwise requires. + +b.As of the VNBZ Closing, except as expressly set forth in this Amendment, the JV Agreement shall immediately cease to have any application or effect with respect to VNBZ, all rights and obligations with respect to VNBZ under the JV Agreement shall terminate and all references to "Company" or "Companies" in the JV Agreement (either in the body of the JV Agreement or its schedules and other attachments) shall read and be interpreted to mean VNBJ and/or ANRA except as the context otherwise requires. + +c.Except as expressly set forth in this Amendment and notwithstanding anything to the contrary contained in the JV Agreement (including Section 9.3.11 (Termination and Survival)), (a) effective as of the later of the VNBJ Closing and the VNBZ Closing, the JV Agreement shall terminate in its entirety with respect to the Veoneer Parties and (b) after the later of the VNBJ Closing and the VNBZ Closing, the Veoneer Parties shall cease to be a party to the JV Agreement and shall have no further obligations with respect thereto. For clarity, upon the later of the VNBJ Closing and the VNBZ Closing, the JV Agreement will remain in full force and effect in accordance with the terms thereof solely between the Nissin Parties and Autoliv AB with respect to the liquidation proceedings of ANRA. + +d.Notwithstanding Article 1.1, Article 1.2 and Article 1.3 above, the termination of the JV Agreement with respect to VNBJ, VNBZ or the Veoneer Parties shall not release any Veoneer Party or any Nissin Party from liability for the breach of any of its representations, warranties, covenants or agreements set forth in the JV Agreement that arise prior to the VNBJ Closing or the VNBZ Closing, as applicable. + +Article 2.D&O Indemnity + +Notwithstanding Article 1.1, Article 1.2 and Article 1.3 above, the Nissin Parties agree to cause each of VNBJ and VNBZ to comply with Sections 4.3.2 and 4.3.3 of the JV Agreement with respect to the indemnification or reimbursement, as applicable, of all Directors and Officers (except those individuals resigning pursuant to Section 6.2.6 of the VNBJ SPA and Section 6.2.6 of the VNBZ SPA) with respect to any Liabilities arising prior to the VNBJ Closing or the VNBZ Closing, as applicable. + +Article 3.Governing Law + +This Amendment shall be governed by and construed in accordance with the laws of Japan. + +Article 4.Effectiveness + +This Amendment shall only become effective upon the VNBJ Closing with respect to Article 1.1 and the VNBZ Closing with respect to Article 1.2, and shall terminate without any force or effect in the event that the VNBJ SPA and the VNBZ SPA are terminated in accordance with the terms thereof. + +(The remainder of this page has intentionally been blank.) + + + + + +IN WITNESS WHEREOF, each of the Veoneer Parties and the Nissin Parties has caused this Amendment to be executed through its duly authorized representative effective as of the date first above written. + +Veoneer AB + +By: /s/ Mats Backman Name: Mats Backman Title: Director + +By: /s/ Amelie Wendels Name: Amelie Wendels Title: Director + +Veoneer US, Inc. + +By: /s/ Eric R. Swanson Name: Eric R. Swanson Title: President & Secretary + +Nissin Kogyo Co., Ltd. + +By: /s/ Yasushi Kawaguchi Name: Yasushi Kawaguchi Title: Representative Director, President for and on behalf of each of the Nissin Parties + +Signature Page to Amendment and Termination of Joint Venture Agreement + + + + + +IN WITNESS WHEREOF, each of the following companies hereby acknowledges and agrees to be bound by the terms and conditions set forth in this Amendment: + +Veoneer Nissin Brake Systems Japan Co., Ltd. + +By: /s/ John T. Jensen Name: John T. Jensen Title: President, Representative Director + +Veoneer Nissin Brake Systems (Zhongshan) Co., Ltd. + +By: /s/ Steven M. Rodé Name: Steven M. Rodé Title: Director + +Signature Page to Amendment and Termination of Joint Venture Agreement \ No newline at end of file diff --git a/full_contract_txt/VERICELCORP_08_06_2019-EX-10.10-SUPPLY AGREEMENT.txt b/full_contract_txt/VERICELCORP_08_06_2019-EX-10.10-SUPPLY AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..25f0eaeefbf93ec3d033f60602dcfc84afd40c2f --- /dev/null +++ b/full_contract_txt/VERICELCORP_08_06_2019-EX-10.10-SUPPLY AGREEMENT.txt @@ -0,0 +1,867 @@ +Exhibit 10.10 + +CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND REPLACED WITH "[***]". SUCH IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS (I) NOT MATERIAL AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM TO THE COMPANY IF DISCLOSED. + +SUPPLY AGREEMENT + +by and between + +MEDIWOUND LTD. + +and + +VERICEL CORPORATION + +May 6, 2019 + + + + + +TABLE OF CONTENTS + +Page + +ARTICLE 1 DEFINITIONS 1 + +ARTICLE 2 SUPPLY OF PRODUCTS 5 + +2.1 Scope of Agreement 5 2.2 Exclusive Supply 6 2.3 Materials 6 2.4 Labeling 6 2.5 Subcontracting 7 2.6 Facilities 8 2.7 Establishment of Second Source 9 2.8 Forecasting and Ordering 9 2.9 Delivery 11 2.10 Dating 12 2.11 Safety Stock 12 2.12 Non-Conforming Product 12 2.13 Shortages 13 2.14 Supply Failures 13 ARTICLE 3 COMPLIANCE, QUALITY AND ENVIRONMENTAL 14 + +3.1 Certificates of Analysis; Release 14 3.2 Records 14 3.3 Regulatory Compliance 14 3.4 Audit 15 3.5 Results of Audits and /or Regulatory Inspection 16 3.6 Regulatory Information 16 3.7 Recall 16 3.8 Quality Agreement 16 ARTICLE 4 CHANGES 17 + +4.1 Changes 17 4.2 Changes to Facility 17 4.3 Discretionary Manufacturing Changes 17 4.4 Regulatory Changes 18 4.5 Ongoing Regulatory Assistance 18 ARTICLE 5 PRICE AND PAYMENT TERMS 19 + +5.1 Supply Price 19 5.2 Price Mechanics 19 5.3 Cost Savings 19 5.4 Payments 20 + +ii + +9012190/26 + + + + + +5.5 Late Payments 20 5.6 Taxes 20 + +ARTICLE 6 REPRESENTATIONS, WARRANTIES AND COVENANTS 21 + +6.1 Mutual Representations and Warranties 21 6.2 Compliance with Law 21 6.3 Product Warranty 21 6.4 No Liens 21 6.5 Debarment 21 ARTICLE 7 INDEMNITY, INSURANCE 22 + +7.1 Indemnification by MediWound 22 7.2 Indemnification by Vericel 22 7.3 No Right of Indemnification under License Agreement 23 7.4 Procedure 23 7.5 Disclaimer 24 7.6 LIMITATION OF LIABILITY 24 7.7 Insurance 25 ARTICLE 8 TERM AND TERMINATION 25 + +8.1 Term 25 8.2 Automatic Termination 25 8.3 Termination for Breach 25 8.4 Termination by Vericel 25 8.5 Termination by MediWound 26 8.6 Effects of Termination 26 8.7 Survival 26 ARTICLE 9 INTELLECTUAL PROPERTY RIGHTS 27 + +9.1 Manufacturing License Grant 27 9.2 Trademarks License Grant. 27 9.3 Ownership 27 ARTICLE 10 FORCE MAJEURE 27 + +10.1 Excusing Performance 27 10.2 Notice of Force Majeure Event 27 10.3 Resumption; Termination 27 ARTICLE 11 MISCELLANEOUS 28 + +11.1 Assignment 28 11.2 Further Actions 28 11.3 Notices 28 11.4 Amendment 29 11.5 Waiver 29 + +iii + +9012190/26 + + + + + +11.6 Severability 29 11.7 Descriptive Headings 29 11.8 Interpretation 29 11.9 Governing Law 30 11.10 Consent to Jurisdiction 30 11.11 Entire Agreement 31 11.12 Representation by Legal Counsel 31 11.13 Counterparts 31 11.14 No Third Party Rights or Obligations 31 11.15 Confidentiality 31 11.16 Bankruptcy 32 + +iv + +9012190/26 + + + + + +SUPPLY AGREEMENT + +THIS SUPPLY AGREEMENT (the "Agreement") is entered into as of May 6, 2019 (the "Effective Date"), by and between Vericel Corporation, a corporation organized and existing under the laws of Michigan and having a principal place of business at 64 Sidney Street, Cambridge, MA 02139 ("Vericel") and MediWound Ltd., a corporation organized and existing under the laws of Israel and having a principal place of business at 42 Hayarkon Street, Yavne, Israel 8122745 ("MediWound"). Vericel and MediWound may each be referred to herein individually as a "Party" and collectively as the "Parties." + +RECITALS + +WHEREAS, Vericel and MediWound are parties to that certain License Agreement of even date herewith (the "License Agreement"), pursuant to which Vericel acquired an exclusive license to certain rights from MediWound; and + +WHEREAS, in connection with the License Agreement, the Parties contemplate that during the Term, MediWound will provide certain manufacturing and other related services to Vericel in accordance with the terms and conditions set forth herein. + +NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows: + +Article 1 DEFINITIONS + +The following terms have the meanings set forth below. Capitalized terms which are used but not defined herein have the meanings ascribed to such terms in the License Agreement. + +1.1 "Additional Service" shall mean any service in addition to the Manufacture of a Product, as such services are identified on Exhibit B attached hereto, or such other service as may be requested by Vericel and agreed to by MediWound from time to time. + +1.2 "Additional Service Fee" shall mean the fee, cost and/or expense to be paid by Vericel to MediWound for the performance of Additional Services, as such fee, cost and/or expense is agreed to by Vericel and MediWound in writing in respect of such Additional Services (plus VAT or similar taxes, if applicable). + +1.3 "Agreement" has the meaning set forth in the Preamble. + +1.4 "Batch" shall mean one (1) production lot of a Product. + +1.5 "Binding Forecast" has the meaning set forth in Section 2.8(a). + +1.6 "Binding Orders" has the meaning set forth in Section 2.8(b). + +1.7 "BLA" means (a) a Biologics License Application as defined in the FD&C Act and the regulations promulgated thereunder, or (b) any equivalent or comparable application, registration or certification in any other country or region in the Territory. + +1 9012190/26 + + + + + +1.8 "Bulk Vehicle Gel" means the formulated NexoBrid product gel in bulk form, prior to filling and finishing, as further described in the applicable Specifications. + +1.9 "Business Day" means a day other than a Friday, Saturday, Sunday or bank or other public holiday in New York, New York or Yavne, Israel. + +1.10 "cGMP" means the then-current good manufacturing practices for pharmaceuticals, as set forth in the United States Federal Food, Drug, and Cosmetic Act, as amended, and applicable regulations promulgated thereunder, as amended from time to time, and such equivalent or similar standards for good manufacturing practice as are required by other Governmental Authorities in countries in which Products are intended to be manufactured or sold. + +1.11 "Change Notification Period" has the meaning set forth in Section 4.1. + +1.12 "Confidential Information" has the meaning set forth in the License Agreement insofar as such information is disclosed pursuant to this Agreement. The terms of this Agreement are the Confidential Information of both Parties, subject to Section 11.15. + +1.13 "Conforming Product" means, with respect to the applicable Product, that, as of the date of delivery to Vericel or its designated Affiliate or contractor in accordance with Section 2.9(c) hereof, such Product (a) meets, and was Manufactured in accordance with, the applicable Specifications, Regulatory Standards (including cGMP where applicable) and the requirements set forth in the Quality Agreement, (b) is free from defects in materials and workmanship, (c) is not adulterated or misbranded within the meaning of the FD&C Act (or similar requirements of the countries for which the Product will be distributed), and (d) is not an article which may not, under the provisions of the FD&C Act, be introduced into interstate commerce. + +1.14 "Cost Savings Change" has the meaning set forth in Section 5.3. + +1.15 "Discretionary Manufacturing Changes" has the meaning set forth in Section 4.1. + +1.16 "Effective Date" has the meaning set forth in the Preamble. + +1.17 "Excess Amount" has the meaning set forth in Section 2.8(b). + +1.18 "Facility" means MediWound facility located at 42 Hayarkon Street, Yavne, Israel 8122745 and any other facility approved by Vericel in accordance with Section 2.6. + +1.19 "Finished Product" means finished NexoBrid product, comprising the Intermediate Drug Product filled into unit packages and Bulk Vehicle Gel filled into unit packages and sterilized, including labeling and packaging, as further described in the applicable Specifications. + +2 9012190/26 + + + + + +1.20 "First Commercial Sale" means, with respect to any Licensed Product and with respect to any country of the Territory, the first sale of such Licensed Product by Vericel or an Affiliate or Sublicensee of Vericel to a Third Party in such country after such Licensed Product has been granted Regulatory Approval by the appropriate Regulatory Authority(ies) for such country. + +1.21 "Force Majeure Event" has the meaning set forth in Section 10.1. + +1.22 "Initial Term" has the meaning set forth in Section 8.1. + +1.23 "Intermediate Drug Product" means the formulated Intermediate Drug Substance as a bulk lyophilized powder, prior to filling and finishing, for use in the Product, as further described in the applicable Specifications. + +1.24 "Intermediate Drug Substance" means formulated mixture of proteolytic enzymes enriched in bromelain in solution manufactured for use in manufacturing the Intermediate Drug Product. + +1.25 "Key Material" means, with respect to a given Product, those key Materials for the Manufacture of such Product as designated by the Parties. Schedule 1.26 will include a list of the then-current Key Materials, as designated by the Parties, which will be updated by the Parties from time to time during the Term to reflect additions and deletions thereof. + +1.26 "Key Materials Suppliers" means, with respect to a given Product, the entities that MediWound, its Affiliate or its Third Party manufacturer has engaged (whether as of the Effective Date or from time to time during the Term) to manufacture, supply, furnish or provide the Key Materials for such Product. Schedule 1.26 will include a list of the then-current Key Materials Suppliers for each Product, which will be updated by MediWound from time to time during the Term to reflect additions and deletions thereof. + +1.27 "Latent Defect" means, with respect to a Product supplied by MediWound to Vericel hereunder, a defect existing at the time of delivery of such Product to Vericel that causes such Product to fail to conform to the corresponding Product Warranty for such Product, which defect is not reasonably obvious to Vericel upon inspection of such Product during the [***] period pursuant to Section 2.12 following such delivery but is discovered at a later time. + +1.28 "Liability" has the meaning set forth in Section 7.1. + +1.29 "License Agreement" has the meaning set forth in the recitals of this Agreement. + +1.30 "Manufacture" or "Manufacturing" means to make, produce, manufacture, process, fill, finish, package, label, perform quality assurance testing, release a compound or product or any component thereof. When used as a noun, "Manufacture" or "Manufacturing" means any and all activities involved in Manufacturing a compound or product or any component thereof. + +3 9012190/26 + + + + + +1.31 "Materials" means, with respect to a given Product, all raw materials, Bulk Vehicle Gel (where MediWound is supplying a Product other than Bulk Vehicle Gel), Intermediate Drug Product (where MediWound is supplying a Product other than Intermediate Drug Product), supplies, components, excipients, and intermediates, labels and packaging materials necessary to Manufacture and ship such Product in accordance with the applicable Specifications. + +1.32 "Maximum Capacity" has the meaning set forth in Section 2.6. + +1.33 "MediWound" has the meaning set forth in the Preamble. + +1.34 "MediWound Indemnified Party" has the meaning set forth in Section 7.2. + +1.35 "Minimum Shelf Life" has the meaning set forth in Section 2.10. + +1.36 "Non-Conforming Product" has the meaning set forth in Section 2.12. + +1.37 "Parties" has the meaning set forth in the Preamble. + +1.38 "Product" means, as applicable, the (a) Intermediate Drug Product, (b) Bulk Vehicle Gel and (c) Finished Product. + +1.39 "Product Warranty" has the meaning set forth in Section 6.3. + +1.40 "Purchase Order" shall mean a firm, written order for purchase of one or more Products submitted by Vericel to MediWound that complies with the terms and conditions of this Agreement. + +1.41 "Quality Agreement" has the meaning set forth in Section 3.8. + +1.42 "Recall" means a recall, withdrawal or field correction of a Product. + +1.43 "Regulatory Change" has the meaning set forth in Section 4.4. + +1.44 "Regulatory Standards" means all applicable Laws within the Territory applicable to the Manufacturing and shipment of the Product or any aspect thereof and the obligations of MediWound hereunder, including, without limitation, (a) the FD&C Act (or similar requirements of the countries for which the Product will be distributed), (b) cGMPs, and (c) the rules and regulations promulgated under or by a Regulatory Authority or any successor agency or other comparable agency thereto as each may be amended from time to time. + +1.45 "Remediation Plan" means a reasonably detailed corrective action plan that would outline remediation of a Supply Failure that include the date by which MediWound will implement such remediation and remedy such Supply Failure. + +1.46 "Renewal Term" has the meaning set forth in Section 8.1. + +1.47 "Rolling Forecast" has the meaning set forth in Section 2.8(a). + +4 9012190/26 + + + + + +1.48 "Safety Stock" has the meaning set forth in Section 2.11. + +1.49 "Second Source" has the meaning set forth in Section 2.7. + +1.50 "Specifications" means, with respect to a given Product, the written specifications for such Product set forth in the applicable Regulatory Approval corresponding thereto as defined in the Quality Agreement, which specifications may be amended from time to time in accordance with this Agreement. + +1.51 "Suppliers" has the meaning set forth in Section 2.3. + +1.52 "Supply Failure" means, with respect to a given Product, MediWound's failure to timely deliver to Vericel (i) at least [***] of the quantity of such Product ordered in accordance with the Binding Orders for such Product (for avoidance of doubt, in determining the percentage of Product delivered for purposes of this clause (i), only Product that conforms to the Product Warranty and is delivered by MediWound in accordance with this Agreement, shall be included), as measured over a period of any [***], or (ii) a cessation or suspension of Manufacturing of Product by MediWound that is not cured by MediWound in accordance with Section 2.14, that is reasonably likely to result in a failure by MediWound to timely deliver Product to Vericel as described in the foregoing clause (i), that, in either case (the foregoing clause (i) or clause (ii)), is not caused by a breach of this Agreement by Vericel. + +1.53 "Supply Price" has the meaning set forth in Section 5.1. + +1.54 "Term" has the meaning set forth in Section 8.1. + +1.55 "Territory" means the United States, Canada and Mexico. + +1.56 "Third Party" shall mean any Person other than Vericel, MediWound or their respective Affiliates. + +1.57 "Third Party Claims" has the meaning set forth in Section 7.1. + +1.58 "Third Party Supply Agreement" means any agreement between MediWound (or any of its Affiliates) and any Third Party that relates to Manufacture or supply of a Licensed Product. + +1.59 "Vericel" has the meaning set forth in the Preamble. + +1.60 "Vericel Indemnified Party" has the meaning set forth in Section 7.1. + +ARTICLE 2 SUPPLY OF PRODUCTS + +2.1 Scope of Agreement. Subject to the terms and conditions of this Agreement, MediWound shall Manufacture (or have Manufactured) Product for clinical and commercial use by Vericel and perform the Additional Services as required for completion of the activities + +5 9012190/26 + + + + + +contemplated under this Agreement and the License Agreement in accordance with the applicable Specifications, Regulatory Standards and the Quality Agreement. MediWound shall Manufacture and supply Product in exchange for the Supply Price and shall perform the Additional Services for the Additional Service Fees. + +2.2 Exclusive Supply. During the first five (5) years of the Term, with respect to the Bulk Vehicle Gel, Intermediate Drug Product and Finished Product, Vericel shall order and purchase such Products exclusively from MediWound in accordance with the terms of this Agreement; provided, however, Vericel may Manufacture or have Manufactured the Products (a) upon the occurrence of a Supply Failure with respect to any Product hereunder, or (b) as otherwise permitted under the terms of the License Agreement or this Agreement. The Parties agree that nothing in this Section 2.2 is intended to limit the identification, evaluation, technology transfer or validation by Vericel of (x) a Second Source for the Manufacture and supply of Product or (y) a provider of filling and packaging services for Product, and that such activities are expressly permitted hereunder. + +2.3 Materials. MediWound shall purchase at its cost and expense all Materials required for Manufacture by MediWound of the Product for supply to Vericel for the Territory pursuant to this Agreement. Any and all forecasts and purchase orders for such Materials shall be placed at MediWound's sole expense and under its sole responsibility. MediWound shall place such purchase orders on a timely basis in order to avoid any undue delay, interruption or other discontinuance in the Manufacture or delivery of the Product. MediWound shall manage and be responsible for all contracts or other arrangements with MediWound's suppliers of Materials ("Suppliers"). Subject to the terms of this Agreement and the Quality Agreement, as between the Parties, MediWound shall be responsible and have liability for all actions and omissions of, and the failure to comply with the applicable terms of this Agreement, applicable Law or Regulatory Standards by the Suppliers in performance of Manufacturing activities for the supply of Products to Vericel for the Territory on behalf of MediWound hereunder. MediWound shall ensure that all Materials conform to the terms of this Agreement, including the applicable Specifications and to the terms of the Quality Agreement. + +2.4 Labeling. Vericel shall be responsible for supplying MediWound with copy for labeling. Upon its receipt of labeling copy from Vericel, MediWound shall provide artwork of the labeling to Vericel for its review and approval. Vericel's review time shall not exceed [***] after its receipt of the artwork from MediWound. In the event that Vericel requests any changes to the labeling, MediWound shall make such changes as promptly as possible and return such labeling artwork to Vericel for its final review and approval, which it shall complete with [***] after its receipt of the modified artwork. MediWound shall be responsible for ordering, at its expense, sufficient quantities of labeling as forecasted to be required, based upon the [***] of the then-current Rolling Forecast. MediWound shall store the labeling as required by Regulatory Standards and shall use the labeling in Product packaging as set forth in the Specifications. Vericel shall be permitted to require changes to the labeling artwork from time-to-time at its cost, but will be required to reimburse MediWound for the cost of any quantities of labeling procured by MediWound that is rendered unusable by such changes, up to the quantities of labeling as + +6 9012190/26 + + + + + +forecasted to be required, based upon the [***] of the then-current Rolling Forecast as of the date of such change by Vericel of the labeling artwork. [***]. + +2.5 Subcontracting. + +(a) [***]. No Third Party service provider or subcontractor shall be provided with Vericel's Confidential Information without first executing a confidentiality agreement that contains terms and conditions that are at least as protective as the confidentiality terms, conditions and restrictions set forth in this Agreement. Notwithstanding the foregoing, MediWound shall remain liable for the performance of all Third Party subcontractors and its Affiliates under this Agreement. + +(b) MediWound shall use commercially reasonable efforts to ensure that any Third Party Supply Agreement [***]. + +(c) If the forecasting or order timing or other provisions of a Third Party Supply Agreement do not align with the corresponding provisions of this Agreement then the Parties shall discuss in good faith appropriate modifications to this Agreement or to such Third Party Supply Agreement, to bring the relevant provisions into alignment; provided, however, that Vericel or MediWound shall have no obligation to agree to any amendment to this Agreement or such Third Party Supply Agreement that can reasonably be expected to materially disadvantage Vericel or MediWound, respectively. + +2.6 Facilities. + +(a) Current and Expanded Capacity. The Parties agree and acknowledge that, as of the Effective Date, MediWound's current Facility can fill orders from Vericel for use in the Territory up to [***] of Intermediate Drug Product, whether provided in that form or in the form of the equivalent amount of Finished Product within a calendar year ("Maximum Capacity"). The Parties agree and acknowledge that the Facility will require either expansion or modification (which may include moving to or adding another location) to meet future capacity requirements for the Product. By no later than [***], MediWound shall fund, at its sole cost, the expansion of its annual manufacturing capacity to be [***] of Intermediate Drug Product (whether provided in that form or in the form of the equivalent amount of Finished Product). The Parties will in good faith review existing market research to mutually agree on peak anticipated volume prior to [***]. After the foregoing expansion, the expanded capacity shall be deemed the "Maximum Capacity" for purposes of this Agreement. As part of the expansion of the Facility, the Parties will discuss any shut down or transfer to another facility made in connection therewith. + +(b) Shut-Down or Expansion of Facility; Transfer to Another Facility. In the event that MediWound desires to cease or shut down operations at a Facility, expand or modify a Facility, or transfer the Manufacturing of a Product to another facility which would reasonably be anticipated to result in inability (permanent or temporary) of MediWound to Manufacture, supply or otherwise perform its obligations hereunder, MediWound shall provide prior written notice to Vericel within the applicable Change Notification Period of such planned shut-down, cessation, expansion, modification or transfer. During such Change Notification Period, Vericel + +7 9012190/26 + + + + + +will have the right to order, and in such case MediWound will manufacture, up to [***] of quantities of Product set forth in the Rolling Forecast with respect to such Change Notification Period which in any event will not exceed the Maximum Capacity. Notwithstanding the foregoing, MediWound shall remain obligated to supply Product at the then current Facility and will not supply Product to Vericel from a new facility unless and until MediWound can perform the Manufacturing and supply Product from such new Facility in accordance with the terms of this Agreement and any modifications to the regulatory filings for such Product are approved by the relevant Regulatory Authorities. MediWound shall bear all costs incurred in connection with the shut-down, cessation, expansion or modification of the Facility or transfer of the Manufacturing of a Product to a new facility pursuant to this Section 2.6(b), including any costs associated with changes to the regulatory filings. Once such new facility is able to Manufacture in accordance with the terms of this Agreement and all required regulatory changes have been approved, such new facility shall be the Facility for purposes of such Product under this Agreement. + +2.7 Establishment of Second Source. + +(a) Within [***] of the Effective Date, MediWound must provide Vericel with true and accurate copies of all documents consistent with Schedule 2.7. If MediWound does not provide all documents within [***] of the Effective Date, Vericel's obligation under Section 8.1 regarding the time period to provide MediWound with a notice of an extension of the Initial Term shall be extended by the amount of time beyond [***] taken by MediWound to provide the required documents. + +(b) Within [***] of a request by Vericel to initiate technology transfer or as soon as reasonably practicable upon request by Vericel in connection with a Supply Failure, MediWound shall provide Vericel, at Vericel's cost consistent with Schedule 4.5, with information necessary for Vericel to qualify a second or back-up supplier identified by Vericel for the Manufacture and supply of Product (a "Second Source") and facilitate technology transfer to such Second Source so that Vericel can consistently manufacture intermediate and final product that meets all specifications. MediWound will notify the IIA in accordance with applicable Israeli Laws upon the commencement of Manufacture of Product by such Second Source. MediWound will provide Vericel with access to the manufacturing process and information and any and all original processes, records, and any other information required to manufacture, package and test the Product in accordance with the Specifications. Second Source manufacturers shall be permitted to manufacture Product for Vericel, its Affiliates and Sublicensees as provided in Section 9.1 and the License Agreement; provided that such Second Source manufacturers: [***]. + +2.8 Forecasting and Ordering. + +(a) Forecasting. Vericel shall furnish MediWound with a [***] rolling forecast of the quantities of each Product that Vericel intends to order during the succeeding [***] period (each, a "Rolling Forecast") which in any event will not exceed the Maximum Capacity for the Binding Forecast. No later than [***] after the filing of a BLA, Vericel shall + +8 9012190/26 + + + + + +furnish MediWound the first rolling Forecast. Subject to this Section 2.8, the [***] of each Rolling Forecast shall constitute a binding order for the quantities of Product specified ("Binding Forecast"). The remaining [***] of each Rolling Forecast shall be non-binding, but shall represent Vericel's good faith estimate, as of the date of its submission of the Rolling Forecast, of its forecasted requirements of the Product during such period. MediWound shall maintain at all times the manufacturing capacity at the relevant Facility to manufacture [***] of the quantities of Product set forth in the current Calendar Year of the Rolling Forecast (as was set forth at the Rolling Forecast submitted immediately prior to the beginning of such Calendar Year) which in any event will not exceed the Maximum Capacity. + +(b) Purchase Orders. On a Calendar Quarter basis, Vericel shall issue at least one Purchase Order for the number and unit size of each Product specified in the Binding Forecast. Vericel is not limited to one Purchase Order per Calendar Quarter. Each Purchase Order shall specify (i) a purchase order number; (ii) the quantity of units of each Product to be Manufactured; and (iii) the requested delivery date of such Product (which in no event shall be earlier than [***] days following the date the applicable Purchase Order was received by MediWound). MediWound shall respond to each Purchase Order within [***] of receipt by: (i) accepting such Purchase Order if it conforms to the requirements of this Agreement or (ii) notifying Vericel if such Purchase Order does not conform to the requirements of this Agreement. If MediWound timely notifies Vericel that a Purchase Order does not conform to the requirements of this Agreement, the Parties shall confer as soon as reasonably practicable to resolve any issues related to such purported nonconformity. If MediWound fails to respond to a Purchase Order that is consistent with the Binding Forecast within [***] after receiving it, Vericel will, within [***] thereafter, confirm with MediWound that such Purchase Order was received by MediWound, and if such Purchase Order is consistent with the Binding Forecast and was properly submitted by Vericel in accordance with this Section 2.8(b), MediWound shall be deemed to have accepted such Purchase Order ("Binding Order") as of the date of MediWound's receipt of such Purchase Order. If a Purchase Order contains quantities of Products in excess of the quantity of such Product forecasted for such quarter (as was set forth at the Rolling Forecast submitted immediately prior to the beginning of such Calendar Year) by an amount greater than [***] of the Binding Forecast ("Excess Amount"), MediWound will accept the Purchase Order up to, but not including the Excess Amount which in any event will not exceed the Maximum Capacity. Should Vericel place a Purchase Order to procure a given Product in a given Calendar Quarter which includes an Excess Amount, MediWound shall use commercially reasonable efforts to meet Vericel's request. If there is a conflict between this Agreement and any Purchase Order, this Agreement shall govern. + +(c) Minimum Purchase Obligation. In each Calendar Year following Vericel's submission of the first Rolling Forecast, Vericel shall issue Purchase Orders for at least [***] of the quantities of each Product set forth in the current Calendar Year of the Rolling Forecast (as was set forth at the Rolling Forecast submitted immediately prior to the beginning of such Calendar Year). + +(d) BARDA. As of the Effective Date, MediWound is a party to BARDA Contract HHSO100201500035C and BARDA Contract HHSO100201800023C (collectively, the + +9 9012190/26 + + + + + +"BARDA Agreements") with the Biomedical Advanced Research and Development Authority ("BARDA"). The Parties agree that until commercial obligations under such BARDA Agreements are transferred to Vericel, MediWound shall remain responsible for the supply and other obligations and shall manage the forecasts and production schedule for such BARDA Agreements. During such period, any Product ordered by BARDA from MediWound will not be included in Purchase Orders, Binding Orders, Rolling Forecasts or the minimum purchase obligation set forth in Section 2.8(c); provided that the Product ordered by BARDA from MediWound will be included in the Maximum Capacity and thus the applicable Maximum Capacity for the Binding Orders will be adjusted accordingly. If and when commercial obligations under such BARDA Agreements are transferred to Vericel, then Vericel shall become responsible for including the applicable purchases by BARDA in its Purchase Orders, Binding Orders and Rolling Forecasts and such purchases will be included in the Maximum Capacity and the minimum purchase obligation set forth in Section 2.8(c). + +2.9 Delivery. + +(a) Shipping. MediWound shall only ship Products that have been Manufactured and released in accordance with the Specifications. Unless agreed in advance by Vericel and MediWound in writing, MediWound shall not ship (or permit such Third Party packager to ship) any Products prior to approval and release by MediWound in accordance with the Quality Agreement and Regulatory Standards. Unless otherwise agreed upon by the Parties, Products shall be delivered to Vericel Ex-Works (Incoterms 2010), at MediWound's facility (the "Delivery Site") at which point, the title and risk of loss shall transfer to Vericel which shall transfer the Products from the Delivery Site in accordance with cGMP as applicable. MediWound shall notify (or cause such Third Party packager to notify) Vericel at least [***] prior to any shipment of Products. + +(b) Delivery Amount. MediWound shall deliver Product within [***] of the units set out on the relevant Purchase Order. To the extent that a delivery is in excess of [***] of the amount set out on the relevant Purchase Order, Vericel may accept such excess Product provided that if Vericel accepts such excess, Vericel shall be entitled, (i) where commercially reasonable for Vericel, to vary the delivery date agreed between Vericel and MediWound in accordance with Section 2.8 for the immediately following shipment(s) of the applicable Product to the extent reasonably required due to the acceptance of such excess, and (ii) to reduce subsequent Purchase Orders and take credits for the amount of excess Product received against the minimum purchase obligation set forth in Section 2.8(c). To the extent that a delivery is less than [***] but at least [***] of the amount set out on the relevant Purchase Order, Vericel shall accept such delivery and shall be entitled, (A) where commercially reasonable for Vericel, to vary the delivery date agreed between Vericel and MediWound in accordance with Section 2.8 for the immediately following shipment(s) of the applicable Product due to the acceptance of such delivery, and (B) to increase subsequent Purchase Orders with the applicable shortage quantities. + +(c) On Time Delivery. MediWound's performance with respect to "on time delivery" will be measured as delivery to Vericel [***] before or after the delivery date agreed + +10 9012190/26 + + + + + +between Vericel and MediWound in accordance with Section 2.8; provided that MediWound shall be deemed to have made a delivery during the "on time delivery" window if the delay in delivery to Vericel is due to Vericel's failure to comply with its obligations under this Agreement (including in connection with Vericel's review of the Batch records). + +2.10 Dating. The remaining shelf-life for each Product for the Territory shall be at least [***] of the FDA approved shelf-life of such Product, as measured from the time of delivery of such Product to Vericel (the "Minimum Shelf Life"). + +2.11 Safety Stock. MediWound shall be entitled to meet its obligation to maintain as safety stock not less than [***] of the Rolling Forecast demand of stock of each of the Key Materials (the "Safety Stock") so long as the Minimum Shelf Life has been satisfied by holding either Product or an equivalent quantity of Materials, or a mixture of the two. The Parties will cooperate to set minimum inventory levels of Key Materials held by Key Materials Suppliers. Vericel shall maintain an inventory of [***] supply of unlabeled or labeled Finished Product in order to supply its commercial requirements in accordance with the Rolling Forecast, which may be stored at Facility at Vericel's option, cost and risk. + +2.12 Non-Conforming Product. + +(a) Rejection Notice. Unless otherwise mutually agreed by the Parties in writing, within [***] after receipt of a delivery of Product hereunder, Vericel shall give MediWound written notice of rejection ("Rejection Notice") (i) if the Product does not constitute Conforming Product ("Non-Conforming Product") or (ii) of any shortage in quantity of such delivery of Product. Any such Rejection Notice provided with respect to any quantity of Product shall be deemed to apply to the full Batch of such Product unless otherwise specified by Vericel. Vericel shall be deemed to have accepted such shipment of Product as Conforming Product and any shortage in quantity if it does not provide Rejection Notice within [***] after receipt of delivery describing the reasons for such rejections in reasonable detail, provided, however, that such [***] period shall not apply to any Latent Defects, in which case Vericel shall notify MediWound of any such failure as soon as reasonably possible, but in any event within [***] after the Latent Defect is confirmed by Vericel and prior to expiration of the shelf-life for such Product. + +(b) Disputes. In the event that MediWound disagrees with Vericel's claim that Product fails to constitute Conforming Product, then the Parties shall promptly attempt to resolve such dispute. If the Parties cannot resolve such dispute, a sample of such Product shall be submitted by MediWound and Vericel to a mutually agreeable qualified Third Party laboratory for testing against the applicable Specifications, Regulatory Standards and other standards and controls in the Quality Agreement and the test results obtained by such laboratory shall be final and controlling (absent manifest error). Test results must be furnished to both Parties within [***] of concluding such testing. The fees and expenses of such laboratory testing and any obsolescence due to short dating shall be borne entirely by the Party whose original Product analysis was in error. + +11 9012190/26 + + + + + +(c) Remedy. On receipt of Vericel's Rejection Notice pursuant to Section 2.12(a), subject to Section 2.12(b), MediWound shall, [***] (except if such Non-Conforming Product is due to MediWound's gross negligence or willful misconduct): + +(i) deliver the appropriate shortage quantities of Conforming Product as promptly as possible, at no additional cost or expense (including, without limitation, freight costs) to Vericel; + +(ii) replace the Non-Conforming Product with Conforming Product as promptly as possible, at no additional cost or expense (including, without limitation, freight costs) to Vericel; or + +(iii) promptly grant Vericel a credit in an amount equal to the amount paid or payable by Vericel with respect to reasonable out of pocket expenses directly associated with the Non-Conforming Product to the extent applicable (e.g. shipment costs, destruction fees, and restocking fees) and any such shortage or Non-Conforming Product, including, without limitation, but solely in the case of Non-Conforming Product, expenses associated with destruction or return at MediWound's instruction. This subsection (iii) shall additionally apply in the event Vericel elects as its option the foregoing (i) or (ii), as applicable, and such delivery or replace of Product thereunder is not practicable within a reasonable period of time (as reasonably determined by MediWound). + +2.13 Shortages. + +(a) Without limiting any other rights or remedies available to Vericel, in the event of any shortage in the supply of any Materials or Product, or if MediWound is for any other reason unable to supply Product in compliance with the terms of this Agreement, then MediWound will promptly notify Vericel and, in the event such inability is caused by a shortage of any Materials and/or capacity required for the Manufacture of any Product, will take all commercially reasonable steps to (i) procure adequate quantities of Materials from Third Party suppliers reasonably acceptable to Vericel, and (ii) use commercially reasonable efforts to fulfill all Binding Orders for Product. + +(b) Prior to a Second Source commencing supply of Product, in the event of a shortage of (i) any Materials required to Manufacture Product or (ii) Product, MediWound will allocate the available Materials to the Manufacture of Product for sale to Vericel and will allocate the available Product for sale to Vericel, in each case ((i) or (ii)), to the extent any Binding Orders then in place prior to allocating such materials to the Manufacture of any other product (including EscharEx), or for any entity other than Vericel. + +(c) After a Second Source commences supply of Product, in the event of a shortage of Materials or Product, MediWound will allocate to Vericel its pro rata share of MediWound's supply of the same in a manner no less favorable than those of its equivalently situated customers or MediWound's own similarly situated products. + +12 9012190/26 + + + + + +(d) The Parties will cooperate to discuss expansion plans, address capacity and any other product supply issues, including efficient use of resources, manufacturing schedules and shipping schedules. + +2.14 Supply Failures. In the event that MediWound becomes aware of the existence of a situation that may lead to a Supply Failure, then MediWound shall promptly (and in no event later than [***] from the date of such awareness) notify Vericel of the particular circumstances. MediWound and Vericel shall promptly discuss how to resolve such circumstances in an effort to avoid or mitigate such potential Supply Failure. MediWound shall investigate the root cause of the anticipated Supply Failure and prepare and provide to Vericel a Remediation Plan within [***] of MediWound's notice to Vericel. If the Remediation Plan is acceptable to Vericel, and MediWound is able to reasonably assure Vericel of MediWound's ability to Manufacture Product and, thereby, (a) avoid a Supply Failure or (b) supply Product in accordance with the Rolling Forecast within [***], then MediWound shall continue to Manufacture Product for Vericel. In all other cases, Vericel shall be permitted to take such measures as are reasonably determined in good faith by Vericel to ensure the supply of Product to the marketplace including cancelling or revising outstanding Purchase Orders and, at Vericel's option, Vericel's obligations under Section 2.8(a), (b) and (c) shall be deemed terminated. + +ARTICLE 3 COMPLIANCE, QUALITY AND ENVIRONMENTAL + +3.1 Certificates of Analysis; Release. MediWound shall perform, or cause to be performed testing and other activities on each Batch of Product Manufactured pursuant to this Agreement before delivery to Vericel or Vericel's designated Affiliate or contractor and consistent with the testing and procedures specified in the Quality Agreement. In the event of any change in Specifications, the certificate of analysis shall contain the required information in accordance with the then-approved release tests in conjunction with applicable change control procedures in accordance with this Agreement and the Quality Agreement. MediWound shall send, or cause to be sent, such certificates to Vericel prior to delivery of each such Batch unless otherwise agreed by the Parties in writing or specified in the Quality Agreement. + +3.2 Records. MediWound shall maintain and shall cause each Supplier to maintain all Manufacturing records, including packaging, analytical and stability records, all records of shipment, and all validation data relating to the Product Manufactured and supplied to Vericel hereunder for the Territory to the extent and for the time periods required by applicable Regulatory Standards with respect to such Product. MediWound shall make such records and data available for Vericel's review on Vericel's reasonable request as mutually agreed by the Parties. + +3.3 Regulatory Compliance. MediWound shall advise Vericel promptly, but in any event within [***] on becoming aware of an authorized agent of a Regulatory Authority visit or inspection to its or any of the Suppliers' Facilities where the Products are being Manufactured for supply to Vericel for the Territory hereunder and in connection with the Manufacturing of the Products. MediWound agrees to use commercially reasonable efforts to permit one or more + +13 9012190/26 + + + + + +Vericel representatives to be present for all or part of such visit or inspection if Vericel so requests. MediWound shall use commercially reasonable efforts to furnish to Vericel a copy of all material information supplied and/or issued by any Regulatory Authority to the extent that such report relates to the Manufacture or supply of Product to Vericel for the Territory, or the ability of MediWound or the Suppliers to so Manufacture or supply hereunder, within [***] of its receipt of such information. Before MediWound or any Supplier responds to any Regulatory Authority where such correspondence would reasonably be expected to have a material impact on the Manufacture or supply of Product to Vericel for the Territory, Vericel will be provided a reasonable opportunity, unless prohibited by applicable Law, to review and comment on the portion of such response related thereto, provided that Vericel shall conduct such review and provide such comments reasonably in advance of when any such response is due to such Regulatory Authority, and further provided that nothing herein, including failure by Vericel to provide such timely review and comment, shall in any way restrict MediWound or its Suppliers from taking, and MediWound and its Suppliers shall at all times be permitted to take, such actions or inactions necessary for its and their compliance with applicable Law. With respect to any and all requirements of a Regulatory Authority for the Manufacture of Product for Commercialization in the Territory following the First Commercial Sale of the Product in a country in the Territory, the Parties shall discuss in good faith such requirements and allocation of responsibility between the Parties. + +3.4 Audit. + +(a) Vericel shall have the right from time to time during the Term of this Agreement, but not more than [***] (unless (i) otherwise agreed between the Parties or (ii) if Section 3.4(b) below applies) during normal business hours and upon not less than [***] prior notice (unless Section 3.4(b)(iv) applies), to enter and inspect any Facility and any related utilities and/or services used in Manufacturing Product in order to carry out a cGMP quality and compliance audit of those parts of the Facility involved in or which could have any impact on Manufacture of such Product (including those used for storing, warehousing and/or testing and utilities), including for the purpose of confirming that no types of product which could reasonably be expected to impact the quality of the Product are being manufactured on site in deviation of cGMP. + +(b) In addition to the rights set out in Section 3.4(a), where (i) any audit carried out in accordance with this Section 3.4 has identified any breach of this Agreement, (ii) Vericel has a reasonable basis to suspect a breach of this Agreement, (iii) any previous audit carried out in accordance with this Section 3.4 has identified any major or critical findings, or (iv) if such audit is in response to or following an audit from a regulatory agency, and such audit resulted in a 483 or equivalent citation, then Vericel shall have the right to carry out, upon reasonable prior notice and during normal business hours, follow up compliance audit(s). + +(c) MediWound shall be solely responsible for ensuring the cGMP compliance status of subcontractors (where such subcontractors are carrying out activities to which cGMP applies) used in relation to the performance of its obligations under this Agreement. + +14 9012190/26 + + + + + +(d) MediWound shall use commercially reasonable efforts to procure the right for Vericel to have the same inspection rights described in this Section 3.4 at the premises of any such subcontractor, and if unable to procure such rights, shall carry out such audits itself and shall report its non-confidential findings to Vericel. + +(e) The above obligations of MediWound and rights of Vericel shall apply, mutatis mutandis, to the rights of MediWound and obligations of Vericel with respect to the undertaking of Vericel and its Affiliates, Sublicensees and Distributors to comply with the cGMP as applicable to their activities and the related audit rights to ensure such compliance. + +3.5 Results of Audits and /or Regulatory Inspection. Observations and conclusions of Vericel's audits will be issued to MediWound, which materials shall be deemed Confidential Information, provided that any Confidential Information of MediWound contained therein or upon which such observations and conclusions are based shall remain the Confidential Information of MediWound. MediWound and Vericel shall, at Vericel's expense (unless the result is due to a material breach of MediWound of any of its obligations under this Agreement), (a) cooperate to determine the cause for any identified issues, (b) work together in good faith to develop a corrective action, and (c) endeavor to implement such corrective action within a mutually agreed time period thereafter. + +3.6 Regulatory Information. MediWound shall promptly disclose to Vericel, upon its request, information in MediWound's possession required for Vericel to obtain and maintain any and all needed permits, approvals, or licenses issued by any and all Regulatory Authorities relating to the Manufacture, storage, packaging, and sale of a Product, as the case may be. MediWound shall use reasonable commercial efforts to cause Suppliers to, provide to Vericel in a reasonable, timely manner (including within a reasonable period prior to the due date of Vericel's annual report to an applicable Regulatory Authority with respect to the Product), all information in its or their respective possession which Vericel requires regarding the Product in order to comply with such Regulatory Standards. MediWound shall provide new regulatory correspondence related to the Product as soon as possible but in no event less than [***]. + +3.7 Recall. Any decision to initiate a Recall of a Product in a country in the Territory shall be made by the marketing approval holder and shall be made in compliance with and to the extent permitted by applicable Law, after consultation between the Parties. Vericel's and its Affiliates', Sublicensees' and Distributors' costs (including internal costs of Vericel) associated with any such Recall shall be borne solely by Vericel (including refunds to customers); provided, however, that all out of pocket expenses associated with a Recall (including those of Vericel and its Affiliates, Sublicensees and Distributors and refunds to customers) shall be borne solely by MediWound to the extent such Recall (a) arises from or is caused directly by any breach by MediWound of this Agreement, the License Agreement or the Quality Agreement, or MediWound's or any of its Affiliates', Suppliers' or subcontractors' negligence or willful misconduct; or (b) resulting directly from MediWound's failure to supply Product that conforms to the applicable Product Warranty. MediWound shall cooperate in the implementation of any Recall of Product in the Territory, as required by applicable Law or reasonably requested by Vericel and, for such a Recall, the cost of such cooperation shall be at Vericel's reasonable + +15 9012190/26 + + + + + +expense (except to the extent the Recall results from the matters described in the foregoing clauses (a) or (b)). + +3.8 Quality Agreement. Each Party shall perform the duties required of it pursuant to a quality agreement to be entered into by the Parties within [***] of the execution of this Agreement (the "Quality Agreement"). To the extent the Quality Agreement either conflicts with this Agreement or is silent on an issue addressed, this Agreement shall control, except to the extent the matter is strictly a quality matter, in which event the Quality Agreement shall supersede this Agreement solely with respect to such quality matter. + +ARTICLE 4 CHANGES + +4.1 Changes. MediWound shall not change the Specifications or Manufacturing process for the Manufacture of Product for supply to Vericel for the Territory hereunder except as expressly permitted pursuant to this Article 4. Each Party shall notify the other Party of any change in the Regulatory Standards applicable to the Manufacturing of Product for the supply to Vericel for the Territory that could reasonably affect the obligations of MediWound under this Agreement. All changes shall include an assessment of the need for regulatory submission and approval by a method to be defined in the Quality Agreement. The applicable notification period for any change or proposed change by a Party to the Manufacturing process or Specifications for a Product or Key Materials, the Facility and other Manufacturing changes (the "Change Notification Period") is set forth on Schedule 4.1. + +4.2 Changes to Facility. Except as expressly permitted pursuant to Section 2.6 and this Article 4, MediWound shall not perform any change of any part of any Facility, change the physical location within the Facility for Manufacturing any Products or change the Facility at which the Manufacturing of any Products takes place, if such change would reasonably be expected to (a) impact the Regulatory Approval for one or more of the Products or any regulatory compliance program; or (b) result in inability (permanent or temporary) of MediWound to Manufacture, supply or otherwise perform its obligations per Vericel's Rolling Forecast in accordance with this Agreement. For any change in the Facility at which the Manufacturing of any Products takes place, MediWound shall (i) give Vericel notice within the applicable Change Notification Period, and (ii) provide Vericel a plan for avoiding any interruption in supply that may result from such change. In the event of a "Major" change to the Facility (as detailed in Schedule 4.1), such change will be treated in accordance with Section 2.6(b). + +4.3 Discretionary Manufacturing Changes. Vericel may propose changes to the Specifications or Manufacturing process for the supply of Product to Vericel for the Territory that are not Regulatory Changes (any such change, a "Discretionary Manufacturing Change"). If agreed to by MediWound, MediWound or its Suppliers will use commercially reasonable efforts to make such proposed changes, and Vericel will bear [***] of the costs associated with such changes. MediWound may propose changes to the Specifications or Manufacturing process for the supply of Product for the Territory that are not Regulatory Changes. MediWound shall propose any such Discretionary Manufacturing Change in accordance with the applicable + +16 9012190/26 + + + + + +Change Notification Period prior to the proposed implementation. [***]. Vericel shall, within [***] of receipt of MediWound's notice, notify MediWound in writing whether Vericel accepts or rejects the proposed change, such consent not to be unreasonably withheld, conditioned or delayed unless consultations with regulatory authorities are required to assess the impact of such proposed change. + +4.4 Regulatory Changes. + +(a) Notwithstanding any other provision under this Agreement to the contrary, if either Party receives notice, or is otherwise informed of, any change to the Manufacturing process or Specifications for a Product or Key Materials, the Facility or any change that has an impact of the obligations of Vericel or MediWound under this Agreement that is required by applicable Law or that is otherwise required by any applicable Regulatory Authority (any such change, a "Regulatory Change"), such Party shall promptly deliver notice thereof to the other Party. Within the applicable Change Notification Period, MediWound shall notify Vericel in writing of MediWound's good faith and reasonable determination as to (i) whether MediWound is technically able to comply with such Regulatory Change, (ii) whether the Regulatory Change would adversely affect MediWound's ability to timely manufacture and supply any Product supplied hereunder and (iii) the costs to implement such Regulatory Change. MediWound shall use commercially reasonable efforts to cause Key Material Suppliers to provide such notice of any Regulatory Change to MediWound or Vericel. + +(b) If MediWound determines it is technically unable to comply with the Regulatory Change at the Facility in the timeframe required by the applicable Regulatory Authority, then, in MediWound's discretion, it shall have the right to transfer the Manufacturing of the applicable Product to an alternative facility of MediWound that is qualified and approved for Manufacturing such Product in accordance with this Agreement, if available. In the event MediWound is unable to supply Product as a result of such Regulatory Change, Vericel, in its sole discretion, shall be entitled to source all or any portion of Vericel's requirements of the applicable Product, until MediWound regains the ability to supply Product, from a Third Party, including from the Second Source. Notwithstanding anything to the contrary contained in this Agreement, if as a result of a Regulatory Change, MediWound is unable to Manufacture and supply a Product to Vericel, Vericel shall be entitled to source such Product, until MediWound regains the ability to supply Product, from a Third Party or Second Source in accordance with this Section 4.4(b), in which case MediWound shall use commercially reasonable efforts to provide Vericel with reasonable technical assistance with regard to transferring the technology relating to the Product to such Third Party, and the Parties shall discuss the allocation of such costs related to such transfer, including MediWound's expenses and any incremental costs of supply of such Product and Materials from such Third Party consistent with Schedule 4.5. + +(c) If MediWound determines it is technically able to implement a Regulatory Change required by a Regulatory Authority in the Territory, the costs for such Regulatory Change shall be borne by Vericel consistent with Schedule 4.5. + +17 9012190/26 + + + + + +4.5 Ongoing Regulatory Assistance. Within [***] following Vericel's request, MediWound shall provide technical data and assistance in answering Vericel's questions (a) for regulatory filings and for process changes initiated by MediWound at no cost to Vericel, (b) for process changes initiated by Vericel at the cost of Vericel for the applicable number of hours at a Full Time Equivalent rate described in Schedule 4.5, (c) for new regulatory registrations, which shall be at Vericel's cost, and (d) for periodic regulatory reporting and questions from regulatory authorities, which shall be at the cost of Vericel. + +ARTICLE 5 PRICE AND PAYMENT TERMS + +5.1 Supply Price. On a Product-by-Product basis, the price payable in U.S. Dollars by Vericel for supply of such Product for a given Calendar Year shall be as set forth on a per unit basis on Exhibit A (with respect to each Product, the "Supply Price"), which shall be updated on a Calendar Year basis in accordance with Section 5.2 below. + +5.2 Price Mechanics. + +(a) Beginning on [***] (each, a "Re-Pricing Date"), MediWound may annually increase the Supply Price for a Calendar Year in accordance with the terms of this Section 5.2. MediWound may increase the Supply Price for a Calendar Year if the United States Producer Price Index (Chemical Manufacturing) published by the Bureau of Labor Statistics (the "PPI") [***] and (b) in the event the PPI [***]. MediWound shall give Vericel at least [***] prior written notice of any such adjustment to the Supply Price. + +(b) In addition to the foregoing price adjustment mechanism, MediWound may propose an adjustment to the Supply Price to reflect changes that substantially affect MediWound's costs or ability to supply Product. MediWound shall provide Vericel with written notice of such changes and its proposed adjustment and provide appropriate documentation demonstrating that the price adjustment is required. Following Vericel's receipt of such notice and documentation, the Parties will engage in good faith discussions to negotiate a mutually agreed upon adjustment to the Supply Price, if any. + +(c) Unless otherwise agreed by the Parties, the adjusted Supply Price will be the Supply Price for the next applicable Purchase Order placed after Vericel's receipt of notification of the adjusted Supply Price, and shall apply to each Purchase Order placed thereafter until the next adjustment is made (if any) in accordance with the above mechanism. + +5.3 Cost Savings. Either Party may propose changes to any Manufacturing process in order to obtain efficiencies and cost savings in such process ("Cost Savings Change"). The proposing Party shall submit to the other Party a proposal detailing the Cost Savings Change, the implementation of such Cost Savings Change, and the analysis of the expected efficiencies and cost savings from such Cost Savings Change. If Vericel proposes a Cost Savings Change and (a) MediWound determines it is technically able to implement the Cost Savings Change, (b) the Cost Savings Change would not materially adversely affect the applicable Facility, and (c) Vericel agrees to pay the costs to implement such Costs Saving Change as an Additional Service Fee, + +18 9012190/26 + + + + + +MediWound shall agree to implement such proposed change which MediWound shall not unreasonably decline to implement. If MediWound proposes a Cost Savings Change and the Parties agree to its implementation, (i) Vericel shall pay MediWound the agreed amount to implement such change as an Additional Service Fee prior to the implementation of such Cost Savings Change; and (ii) MediWound shall make its reasonable commercial efforts to implement such Cost Savings Change pursuant to a mutually agreed upon schedule. In the event cost savings are actually achieved, then the cost saving will be [***] between the Parties (i.e. [***] of the cost savings shall be added to the new discounted Supply Price). + +5.4 Payments. Unless specified otherwise, any payment to be made by Vericel under this Agreement shall be made within [***] from date of invoice. It is hereby agreed that the invoice with respect to any shipment will be issued upon the delivery date. The Parties' respective rights and responsibilities under Sections 5.6.5 and 5.6.6 of the License Agreement shall apply as such Section pertains to the Parties' performance under this Agreement, and are hereby incorporated by reference. + +5.5 Late Payments. Any payments due under this Agreement shall be due on such date as specified in this Agreement and, in the event such date is not a Business Day, then the next succeeding Business Day. In the event that any payment due under this Agreement is not made when due, the amount due shall accrue interest beginning on the [***] following the date on which such payment was due, calculated at the [***] for the due date, or, if lower, the maximum rate permitted by law, calculated from the due date until paid in full. Each payment made after the due date shall be accompanied by all interest so accrued. Notwithstanding the foregoing, a Party shall have recourse to any other remedy available at law or in equity with respect to any delinquent payment, subject to the terms of this Agreement. + +5.6 Taxes. Vericel shall be responsible for the payment of any value added or similar tax (but excluding, for avoidance of doubt, any tax on the income of MediWound) on the Products delivered by MediWound to Vericel, to the extent such taxes are itemized and included on a valid invoice and required to be collected from Vericel under applicable Law. In addition, in the event any payments made by Vericel pursuant to this Agreement become subject to withholding taxes under the Laws or regulations of any jurisdiction or Governmental Authority, Vericel shall deduct and withhold the amount of such taxes for the account of MediWound to the extent required by applicable Laws or regulations; such amounts payable to MediWound shall be reduced by the amount of taxes deducted and withheld; and Vericel shall pay the amounts of such taxes to the proper Governmental Authority in a timely manner and transmit to MediWound an official tax certificate or other evidence of such tax obligations together with proof of payment from the relevant Governmental Authority of all amounts deducted and withheld. Any such withholding taxes required under applicable Laws or regulations to be paid or withheld shall be an expense of, and borne solely by, MediWound. Each Party agrees to cooperate with the other Party in claiming refunds or exemptions from such deductions or withholdings under any relevant agreement or treaty which is in effect. The Parties shall discuss applicable mechanisms for minimizing such taxes to the extent possible in compliance with applicable Laws. Vericel will provide MediWound with reasonable assistance to enable MediWound to recover such taxes as permitted by applicable Laws or regulations. + +19 9012190/26 + + + + + +ARTICLE 6 REPRESENTATIONS, WARRANTIES AND COVENANTS + +6.1 Mutual Representations and Warranties. As of the Effective Date unless otherwise specified, each of MediWound and Vericel hereby represents and warrants to the other Party that: + +(a) it is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization; + +(b) the execution, delivery and performance of this Agreement by such Party has been duly authorized by all requisite action under the provisions of its charter, bylaws and other organizational documents, and does not require any action or approval by any of its shareholders or other holders of its voting securities or voting interests; + +(c) it has the power and authority to execute and deliver this Agreement and to perform its obligations hereunder; + +(d) this Agreement has been duly executed and is a legal, valid and binding obligation on each Party, enforceable against such Party in accordance with its terms; and + +(e) the execution, delivery and performance by such Party of this Agreement and its compliance with the terms and provisions hereof does not and will not conflict with or result in a breach of or default under any agreement or arrangement with any Third Party existing as of the Effective Date. + +6.2 Compliance with Law. During the Term of this Agreement, each Party shall comply in all material respects with all applicable Laws (including Regulatory Standards, cGMP as applicable to MediWound and cGMP to the extent applicable to Vericel) applicable to its performance under this Agreement. + +6.3 Product Warranty. MediWound represents and warrants to Vericel that, at the time of delivery of the given Product to the Delivery Site pursuant to Section 2.9(c), such Product so delivered pursuant to this Agreement will constitute Conforming Product and, except with respect to Section 2.13, will have a shelf life equal to or exceeding the Minimum Shelf Life (the "Product Warranty"). + +6.4 No Liens. MediWound represents, warrants and covenants that all Product delivered to Vericel (or its designated Affiliate or contractor) pursuant to this Agreement will, at the time of such delivery, be free and clear of all liens, encumbrances, security interests and other encumbrances. + +6.5 Debarment. As of the Effective Date hereof and at all times during the Term of the Agreement, each Party represents and warrants to the other Party that neither it nor, to its knowledge, any of its existing subcontractors or Suppliers, is debarred as of the Effective Date, and neither it nor any of its subcontractors or Suppliers shall, during the Term, use in any + +20 9012190/26 + + + + + +capacity the services of any Person debarred by any Regulatory Authority, including under Subsection 306(a) or (b) of the Generic Drug Enforcement Act of 1992 or any other equivalent Regulatory Standard. In the event either Party learns that it, any of its employees or contractors, any Supplier or any of a Supplier's employees or contractors has been debarred, it shall notify the other Party promptly, and in any event within [***] of learning of such debarment. In the event that MediWound, any of its employees or contractors, any Supplier or any of a Supplier's employees or contractors has been debarred, MediWound shall immediately remove or have removed such Person from thereafter performing Manufacturing or supply activities under this Agreement with respect to the Product upon learning of such debarment. In the event that Vericel, any of its employees or contractors, any Sublicensee or any of such Sublicensee's employees or contractors has been debarred, it shall immediately remove or have removed such Person from thereafter performing distribution activities under this Agreement with respect to the Product upon learning of such debarment. + +ARTICLE 7 INDEMNITY, INSURANCE + +7.1 Indemnification by MediWound. MediWound will indemnify, defend and hold harmless Vericel, its Affiliates, Sublicensees, contractors, Distributors and each of its and their respective employees, officers, directors and agents (each, a "Vericel Indemnified Party") from and against any and all liability, loss, damage, expense (including reasonable attorneys' fees and expenses) and cost (collectively, "Liability") that the Vericel Indemnified Party may be required to pay to one or more Third Parties resulting from or arising out of: + +(a) the material breach by MediWound of any of its representations, warranties or covenants set forth in Article 6; + +(b) any Recall or withdrawal of Product to the extent attributable to MediWound's breach of this Agreement or the Quality Agreement; or + +(c) the gross negligence or willful misconduct of MediWound or any subcontractor or Supplier acting on behalf of MediWound relating to its activities in connection with this Agreement; except, in each case, to the extent (y) caused by the negligence, recklessness or intentional acts of Vericel or any Vericel Indemnified Party or (z) Vericel is required to indemnify MediWound pursuant to Section 7.2. + +7.2 Indemnification by Vericel. Vericel will indemnify, defend and hold harmless MediWound, each of its Affiliates, and each of its and its Affiliates' employees, officers, directors and agents (each, a "MediWound Indemnified Party") from and against any and all Liability that the MediWound Indemnified Party may be required to pay to one or more Third Parties (other than shareholders of MediWound or its Affiliates) resulting from or arising out of: + +(a) the material breach by Vericel of any of its representations, warranties or covenants set forth in Article 6; + +21 9012190/26 + + + + + +(b) any Recall or withdrawal of Product to the extent attributable to Vericel's breach of this Agreement or the Quality Agreement; or + +(c) the gross negligence or willful misconduct of Vericel or any subcontractor or Supplier acting on behalf of Vericel relating to its activities in connection with this Agreement; except, in each case, to the extent (y) caused by the negligence, recklessness or intentional acts of MediWound or any MediWound Indemnified Party or (z) MediWound is required to indemnify Vericel pursuant to Section 7.1. + +7.3 No Right of Indemnification under License Agreement. No right of indemnification shall exist under the License Agreement for claims arising out of the performance of this Agreement, it being the intent of the Parties that such claims shall be solely governed by the provisions of this Agreement and, for the avoidance of doubt, except as set forth in Section 7.6, no limits on indemnification or liability set forth in the License Agreement shall apply to this Agreement. + +7.4 Procedure. + +(a) Notice. Each Party will notify the other Party in writing in the event it becomes aware of a claim for which indemnification may be sought hereunder. In the event that any Third Party asserts a claim or other proceeding (including any governmental investigation) with respect to any matter for which a Party (the "Indemnified Party") is entitled to indemnification hereunder (a "Third Party Claim"), then the Indemnified Party shall promptly notify the Party obligated to indemnify the Indemnified Party (the "Indemnifying Party") thereof; provided, however, that no delay on the part of the Indemnified Party in notifying the Indemnifying Party shall relieve the Indemnifying Party from any obligation hereunder unless (and then only to the extent that) the Indemnifying Party is prejudiced thereby. + +(b) Control. The Indemnifying Party shall have the right, exercisable by notice to the Indemnified Party within [***] after receipt of notice from the Indemnified Party of the commencement of or assertion of any Third Party Claim, to assume direction and control of the defense, litigation, settlement, appeal or other disposition of the Third Party Claim (including the right to settle the claim solely for monetary consideration) with counsel selected by the Indemnifying Party and reasonably acceptable to the Indemnified Party; provided that (i) the Indemnifying Party has sufficient financial resources, in the reasonable judgment of the Indemnified Party, to satisfy the amount of any adverse monetary judgment that is sought, (ii) the Third Party Claim seeks solely monetary damages and (iii) the Indemnifying Party expressly agrees in writing that as between the Indemnifying Party and the Indemnified Party, the Indemnifying Party shall be solely obligated to satisfy and discharge the Third Party Claim in full (the conditions set forth in clauses (i), (ii) and (iii) above are collectively referred to as the "Litigation Conditions"). Within [***] after the Indemnifying Party has given notice to the Indemnified Party of its exercise of its right to defend a Third Party Claim, the Indemnified Party shall give notice to the Indemnifying Party of any objection thereto based upon the Litigation Conditions. If the Indemnified Party reasonably so objects, the Indemnified Party shall continue to defend the Third Party Claim, at the expense of the Indemnifying Party, until such time as + +22 9012190/26 + + + + + +such objection is withdrawn. If no such notice is given, or if any such objection is withdrawn, the Indemnifying Party shall be entitled, at its sole cost and expense, to assume direction and control of such defense, with counsel selected by the Indemnifying Party and reasonably acceptable to the Indemnified Party. During such time as the Indemnifying Party is controlling the defense of such Third Party Claim, the Indemnified Party shall cooperate, and shall cause its Affiliates and agents to cooperate upon request of the Indemnifying Party, in the defense or prosecution of the Third Party Claim, including by furnishing such records, information and testimony and attending such conferences, discovery proceedings, hearings, trials or appeals as may reasonably be requested by the Indemnifying Party. In the event that the Indemnifying Party does not satisfy the Litigation Conditions or does not notify the Indemnified Party of the Indemnifying Party's intent to defend any Third Party Claim within [***] after notice thereof, the Indemnified Party may (without further notice to the Indemnifying Party) undertake the defense thereof with counsel of its choice and at the Indemnifying Party's expense (including reasonable, out-of-pocket attorneys' fees and costs and expenses of enforcement or defense). The Indemnifying Party or the Indemnified Party, as the case may be, shall have the right to join in (including the right to conduct discovery, interview and examine witnesses and participate in all settlement conferences), but not control, at its own expense, the defense of any Third Party Claim that the other party is defending as provided in this Agreement. + +(c) Settlement. The Indemnifying Party shall not, without the prior written consent of the Indemnified Party, enter into any compromise or settlement that commits the Indemnified Party to take, or to forbear to take, any action. The Indemnified Party shall have the sole and exclusive right to settle any Third Party Claim, on such terms and conditions as it deems reasonably appropriate, to the extent such Third Party Claim involves equitable or other non-monetary relief, but shall not have the right to settle such Third Party Claim to the extent such Third Party Claim involves monetary damages without the prior written consent of the Indemnifying Party. Each of the Indemnifying Party and the Indemnified Party shall not make any admission of liability in respect of any Third Party Claim without the prior written consent of the other party, and the Indemnified Party shall use reasonable efforts to mitigate liabilities arising from such Third Party Claim. + +7.5 Disclaimer. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, NEITHER PARTY MAKES, AND EACH PARTY EXPRESSLY DISCLAIMS, ANY AND ALL REPRESENTATIONS OR WARRANTIES OF ANY KIND, WITH RESPECT TO THIS AGREEMENT (INCLUDING THE MANUFACTURE AND SUPPLY OF PRODUCT HEREUNDER), EXPRESS, IMPLIED OR STATUTORY, INCLUDING, ANY WARRANTY OF TITLE, NON-INFRINGEMENT, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. + +7.6 LIMITATION OF LIABILITY. NEITHER PARTY SHALL BE LIABLE FOR ANY SPECIAL, INCIDENTAL, EXEMPLARY OR CONSEQUENTIAL DAMAGES OF ANY KIND (INCLUDING LOST PROFITS) REGARDLESS OF THE FORM OF ACTION, WHETHER IN CONTRACT, TORT, NEGLIGENCE, BREACH OF STATUTORY DUTY OR OTHERWISE, SUFFERED BY THE OTHER PARTY, EVEN IF THAT PARTY HAS BEEN INFORMED OF THE POSSIBILITY OF ANY SUCH DAMAGES IN ADVANCE. [***]. + +23 9012190/26 + + + + + +7.7 Insurance. For the duration of this Agreement and for a period of [***] following its termination, each Party agrees to obtain and maintain, during the Term, commercial general liability insurance, including product liability insurance, with reputable and financially secure insurance carriers (or pursuant to a program of self-insurance reasonably satisfactory to the other Party) to cover its indemnification obligations under Section 7.1 or Section 7.2, as applicable, in each case with limits of not less than [***] per occurrence and in the aggregate. Insurance shall be procured with carriers having an A.M. Best Rating of A-VII or better. + +ARTICLE 8 TERM AND TERMINATION + +8.1 Term. The term of this Agreement will commence upon the Effective Date and will continue until the fifth (5th) anniversary of the Effective Date, unless earlier terminated or extended under this Article 8 (the "Initial Term"). At least twenty-four (24) months from the end of the Initial Term, Vericel shall provide MediWound notice whether Vericel elects to extend the Initial Term of the Agreement by an additional twenty four (24) months. After the Initial Term (including any extension thereto made in accordance with the preceding sentence), the Agreement may be extended on a yearly basis up to ten (10) years at Vericel's sole discretion, with renewal notice to be provided to MediWound no later than twelve (12) months prior to the expiry of any yearly extension (the "Renewal Term", and the Initial Term, together with the Renewal Term, if any, the "Term"); provided that unless otherwise agreed by the Parties, the Term of this Agreement (including the Initial Term, any extension of the Initial Term and any Renewal Terms) shall be no more than fifteen (15) years in total. + +8.2 Automatic Termination. This Agreement will automatically immediately terminate in the event of the expiration or termination of the License Agreement. + +8.3 Termination for Breach. Subject to the provisions of Article 10 below, either Party may terminate this Agreement in its entirety if the other Party materially breaches a material provision and does not cure such breach, or does not take reasonable steps required under the circumstances to cure such breach going forward, within [***] after receiving notice of the breach. + +8.4 Termination by Vericel. Following the Initial Term, Vericel may, without penalty or prejudice to any other rights or remedies Vericel may have, in its sole discretion terminate or reduce the scope of any individual activities contemplated by this Agreement or any Additional Service or with respect to any Product or terminate this Agreement as a whole with or without cause, upon [***] prior written notice of such termination or reduction (which such written notice may be provided during the Initial Term). + +8.5 Termination by MediWound. Following the Initial Term, MediWound may terminate this Agreement by notice in writing to Vericel upon on at least [***] advanced written notice (or such longer period of time as reasonably necessary to avoid a supply disruption) if MediWound determines to cease Manufacturing the applicable Product for the Territory, but in such case MediWound will reasonably cooperate with Vericel to enable Vericel to establish its own source for the Product (including, to the extent requested by Vericel and within + +24 9012190/26 + + + + + +MediWound's ability to do so, by transferring MediWound's applicable Third Party manufacturing relationships to Vericel). + +8.6 Effects of Termination. Any expiration or termination of this Agreement shall not affect any claims that have accrued or outstanding obligations or payments due hereunder prior to such termination or expiration, nor shall it prejudice any other remedies that the Parties may have under this Agreement. In addition, upon the expiration or earlier termination of this Agreement: + +(a) if Vericel terminates the Agreement for breach or MediWound terminates in accordance with Section 8.5, Vericel shall have the option of [***] + +(b) Vericel shall pay to MediWound: (i) all amounts outstanding and remaining to be paid for Product supplied prior to such expiration or termination or under any other obligation under the Agreement; (ii) all amounts for Product in the Binding Forecasts and Binding Orders prior to the expiration or termination, provided that MediWound delivers such Product in accordance with the terms of this Agreement; (iii) all amounts representing the purchase by MediWound of Materials in reliance upon the Binding Forecasts and Binding Orders (if MediWound is unable to cancel (without incurring any costs) or otherwise use such Materials); and (iv) all amounts representing remaining inventory of Product and all Product work in process undertaken in accordance with the Binding Forecasts or Binding Orders or undertaken otherwise in accordance with the terms of this Agreement. + +(c) Following expiration of the Royalty Term (as defined in the License Agreement) for any Licensed Product in a given country, the license granted to Vericel under Section 9.1 of this Agreement with respect to such Licensed Product in such country shall automatically become fully paid-up, perpetual, irrevocable and royalty-free. + +8.7 Survival. Upon expiration or termination of this Agreement for any reason, the following terms of this Agreement shall survive: Article 1, Sections 3.2, 5.4, 5.5 and 5.6, Article 7, Article 8, Sections 9.1 and 9.2 (except in the event of termination of the License Agreement under Section 9.2, 9.3 or 9.4 thereof), Section 9.3, Article 10, and Article 11. + +ARTICLE 9 INTELLECTUAL PROPERTY RIGHTS + +9.1 Manufacturing License Grant. Subject to the terms herein, MediWound hereby grants to Vericel a non-exclusive, sublicensable (subject to Section 4.2 of the License Agreement) license under the MediWound Technology and MediWound's interest in the Joint Technology, to Manufacture and have Manufactured Licensed Products in the Territory for use in the Field in the Territory. + +9.2 Trademarks License Grant. MediWound hereby grants to Vericel an exclusive (even as to MediWound), sublicensable, royalty- free, fully paid-up, license in the Territory to use the Licensed Trademarks (as defined in the License Agreement) and a non- exclusive, sublicensable, royalty-free, fully paid-up, license to use the MediWound name and trademark, in + +25 9012190/26 + + + + + +each case, in connection with the Manufacture of Licensed Products in or for the Territory. All uses of the Licensed Trademarks by Vericel (and its Affiliates, Sublicensees and Distributors) in connection with the Manufacture of Licensed Products in or for the Territory shall be in accordance with Regulatory Approvals and all applicable Laws and MediWound's quality control guidelines for the Licensed Trademarks, as may be amended from time to time. Vericel (and its Affiliates) shall only use the Licensed Trademarks licensed hereunder in connection with the Manufacture of Licensed Products in the Territory. Vericel shall not (and shall cause its Affiliates, Sublicensee and Distributors not to) use such Licensed Trademarks to identify, or in connection with the marketing of, any other products. + +9.1 Ownership. Ownership of all inventions and discoveries made by the Parties in the course of Manufacturing and supply of the Product hereunder (including Manufacture and supply of Product) shall be determined in accordance with the terms of the License Agreement. + +ARTICLE 10 FORCE MAJEURE + +10.1 Excusing Performance. Neither Party shall be liable for the failure to perform its obligations under this Agreement to the extent such failure is due to events beyond the reasonable control of the non-performing Party, including fires, floods, earthquakes, hurricanes, embargoes, shortages, epidemics, quarantines, war, acts of war (whether war be declared or not), terrorist acts, insurrections, riots, civil commotion, strikes, lockouts or other labor disturbances involving the workforce of any Third Party, or acts of God (a "Force Majeure Event"). Notwithstanding anything to the contrary herein, the occurrence of a Force Majeure Event will not excuse or prevent a failure of MediWound to deliver Product from being deemed a "Supply Failure" or otherwise limit Vericel's rights, to the extent applicable, under Section 2.13. + +10.2 Notice of Force Majeure Event. A Party claiming a right to be excused from performance under Section 10.1 shall immediately notify the other Party in writing of the extent of its inability to perform, which notice shall specify the Force Majeure Event and the estimated likely period of time during which its performance will be affected. + +10.3 Resumption; Termination. A non-performing Party as a result of a Force Majeure Event shall use reasonable best efforts, at its own expense, to eliminate the Force Majeure Event and to mitigate the effect of such cause and resume performance under this Agreement, in each case, as soon as practicable and for as long as such Force Majeure Event continues. Further, consistent with diligent risk management practices, MediWound will keep current a risk management program. If MediWound is affected by any Force Majeure Event, MediWound agrees to perform its obligations under this Section 10.3 to mitigate the effect thereof and resume performance under this Agreement in the same manner as MediWound would use to resolve any similar disruptions affecting its own products (including EscharEx). MediWound shall use reasonable best efforts to ensure that the impact of the Force Majeure Event shall not be relatively greater for Vericel than it is for MediWound with respect to MediWound's products (including EscharEx). + +26 9012190/26 + + + + + +ARTICLE 11 MISCELLANEOUS + +11.1 Assignment. Neither this Agreement nor any interest hereunder shall be assignable by a Party without the prior written consent of the other Party, except as follows: (a) such Party may assign its rights and obligations under this Agreement to any of its Affiliates, provided that the assignee shall expressly agree to be bound by such Party's obligations under this Agreement and that such Party shall remain liable for all of its rights and obligations under this Agreement, and (b) either Party may assign its rights and obligations hereunder to a Third Party in connection with a permitted assignment or other permitted transfer of the License Agreement. Each Party shall promptly notify the other Party of any assignment or transfer under the provisions of this Section 11.1. This Agreement shall be binding upon the successors and permitted assigns of the Parties and the name of a Party appearing herein shall be deemed to include the names of such Party's successors and permitted assigns to the extent necessary to carry out the intent of this Agreement. Any assignment not in accordance with this Section 11.1 shall be void. + +11.2 Further Actions. Each Party agrees to execute, acknowledge and deliver such further instruments, and to do all such other acts, as may be necessary or appropriate in order to carry out the purposes and intent of the Agreement. + +11.3 Notices. Any notice or notification required or permitted to be provided pursuant to the terms and conditions of this Agreement (including any notice of force majeure, breach, termination, change of address, etc.) shall be in writing and shall be deemed given upon receipt if delivered personally or by facsimile transmission (receipt verified), five days after deposited in the mail if mailed by registered or certified mail (return receipt requested) postage prepaid, or on the next Business Day if sent by overnight delivery using a nationally recognized express courier service and specifying next Business Day delivery (receipt verified), to the Parties at the following addresses or facsimile numbers (or at such other address or facsimile number for a Party as shall be specified by like notice, provided, however, that notices of a change of address shall be effective only upon receipt thereof): + +All correspondence to Vericel shall be addressed as follows: + +Vericel Corporation 64 Sidney Street Cambridge, Massachusetts 02139 Attention: Chief Financial Officer + +with a copy to: + +General Counsel + +All correspondence to MediWound shall be addressed as follows: + +27 9012190/26 + + + + + +MediWound Ltd. 42 Hayarkon Street Yavne, Israel 8122745 Attention: Chief Financial Officer + +with a copy to: + +General Counsel + +11.4 Amendment. No amendment, modification or supplement of any provision of this Agreement shall be valid or effective unless made in writing and signed by a duly authorized officer of each Party. + +11.5 Waiver. No provision of this Agreement shall be waived by any act, omission or knowledge of a Party or its agents or employees except by an instrument in writing expressly waiving such provision and signed by a duly authorized officer of the waiving Party. The waiver by either of the Parties of any breach of any provision hereof by the other Party shall not be construed to be a waiver of any succeeding breach of such provision or a waiver of the provision itself. + +11.6 Severability. If any clause or portion thereof in this Agreement is for any reason held to be invalid, illegal or unenforceable, the same shall not affect any other portion of this Agreement, as it is the intent of the Parties that this Agreement shall be construed in such fashion as to maintain its existence, validity and enforceability to the greatest extent possible. In any such event, this Agreement shall be construed as if such clause of portion thereof had never been contained in this Agreement, and there shall be deemed substituted therefor such provision as will most nearly carry out the intent of the Parties as expressed in this Agreement to the fullest extent permitted by applicable Law. + +11.7 Descriptive Headings. The descriptive headings of this Agreement are for convenience only and shall be of no force or effect in construing or interpreting any of the provisions of this Agreement. + +11.8 Interpretation. Except where the context expressly requires otherwise, (a) the use of any gender herein shall be deemed to encompass references to either or both genders, and the use of the singular shall be deemed to include the plural (and vice versa), (b) the words "include", "includes" and "including" shall be deemed to be followed by the phrase "without limitation", (c) the word "will" shall be construed to have the same meaning and effect as the word "shall", (d) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (e) any reference herein to any Person shall be construed to include the Person's successors and assigns, (f) the words "herein", "hereof" and "hereunder", and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (g) all references herein to Sections, Exhibits or Schedules shall be construed to refer to Sections, Exhibits or Schedules of + +28 9012190/26 + + + + + +this Agreement, and references to this Agreement include all Exhibits and Schedules hereto, (h) the word "notice" means notice in writing (whether or not specifically stated) and shall include notices, consents, approvals and other written communications contemplated under this Agreement, (i) provisions that require that a Party, the Parties or any committee hereunder "agree," "consent" or "approve" or the like shall require that such agreement, consent or approval be specific and in writing, whether by written agreement, letter, approved minutes or otherwise (but excluding e-mail and instant messaging), (j) references to any specific law, rule or regulation, or article, section or other division thereof, shall be deemed to include the then-current amendments thereto or any replacement or successor law, rule or regulation thereof, and (k) the term "or" shall be interpreted in the inclusive sense commonly associated with the term "and/or." + +11.9 Governing Law. This Agreement, and all claims arising under or in connection therewith, shall be governed by and interpreted in accordance with the substantive laws of the State of New York, without regard to conflict of law principles thereof. + +11.10 Consent to Jurisdiction. In the event of any dispute arising out of or relating to this Agreement other than a dispute arising under Section 2.7(b), the affected Party shall notify the other Party, and the parties shall attempt in good faith to resolve the matter within [***] after the date of such notice (the "Notice Date"). Any disputes not resolved by good faith discussions shall be referred to senior executives of each party, who shall meet at a mutually acceptable time and location within [***] after the Notice Date and attempt to negotiate a settlement. If the matter remains unresolved within [***] after the Notice Date, each Party to this Agreement hereby (a) irrevocably submits to the exclusive jurisdiction of the state courts of the State of New York or the United States District Court for the Southern District of New York for the purpose of any and all actions, suits or proceedings arising in whole or in part out of, related to, based upon or in connection with this Agreement or the subject matter hereof, (b) waives to the extent not prohibited by applicable Law, and agrees not to assert, by way of motion, as a defense or otherwise, in any such action, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that any such action brought in one of the above-named courts should be dismissed on grounds of forum non conveniens, should be transferred to any court other than one of the above-named courts, or should be stayed by reason of the pendency of some other proceeding in any other court other than one of the above-named courts, or that this Agreement or the subject matter hereof may not be enforced in or by such court, and (c) agrees not to commence any such action other than before one of the above-named courts nor to make any motion or take any other action seeking or intending to cause the transfer or removal of any such action to any court other than one of the above-named courts whether on the grounds of inconvenient forum or otherwise. Notwithstanding the foregoing, MediWound agrees that a final judgement in an action, suit or proceeding brought in one of the above-named courts may be enforced by Vericel in the competent courts of the State of Israel by suit on such judgment or in any other manner provided by applicable Law. + +11.11 Entire Agreement. This Agreement together with the License Agreement and the Quality Agreement, constitutes and contains the complete, final and exclusive understanding and + +29 9012190/26 + + + + + +agreement of the Parties and cancels and supersedes any and all prior negotiations, correspondence, understandings and agreements, whether oral or written, between the Parties respecting the subject matter hereof and thereof. + +11.12 Representation by Legal Counsel. Each Party hereto represents that it has been represented by legal counsel in connection with this Agreement and acknowledges that it has participated in the drafting hereof. In interpreting and applying the terms and provisions of this Agreement, the Parties agree that no presumption shall exist or be implied against the Party which drafted such terms and provisions. + +11.13 Counterparts. This Agreement may be executed in two counterparts, each of which shall be an original and both of which shall constitute together the same document. Counterparts may be signed and delivered by facsimile or PDF file, each of which shall be binding when received by the applicable Party. + +11.14 No Third Party Rights or Obligations. No provision of this Agreement shall be deemed or construed in any way to result in the creation of any rights or obligation in any Person not a Party to this Agreement. + +11.15 Confidentiality. + +(a) Section 7 of the License Agreement shall govern the use and disclosure of information disclosed by the Parties under this Agreement. Either Party may disclose the terms of this Agreement to the extent required, in the reasonable opinion of such Party's legal counsel, to comply with applicable Law, including the rules and regulations promulgated by the United States Securities and Exchange Commission or any equivalent governmental agency in any country in the Territory. Before disclosing this Agreement or any of the terms hereof pursuant to this Section 11.15(a), the Parties will consult with one another on the terms of this Agreement to be redacted in making any such disclosure (which, at a minimum, shall include redaction of certain financial terms), with the disclosing Party providing as much advance notice as is feasible under the circumstances, and giving consideration to the comments of the other Party. Further, if a Party discloses this Agreement or any of the terms hereof in accordance with this Section 11.15(a), such Party shall, at its own expense, seek such confidential treatment of confidential portions of this Agreement, as may be reasonably requested by the other Party. + +(b) No Party to this Agreement shall originate any publicity, news release or other similar public announcement, written or oral, whether relating to this Agreement or any documents or transactions contemplated hereby or the existence of any arrangement between the Parties, without the prior written consent of the other Party whether or not named in such publicity, news release or other similar public announcement, except to the extent permitted under the License Agreement. + +11.16 Bankruptcy. All rights and licenses granted under or pursuant to this Agreement by a Party to the other are and will otherwise be deemed to be, for purposes of Section 365(n) of the Bankruptcy Code, licenses of right to "intellectual property" as defined under Section 101 of the Bankruptcy Code. The Parties agree that Vericel and its Sublicensees, + +30 9012190/26 + + + + + +as Sublicensees of such rights under this Agreement, will retain and may fully exercise all of their rights and elections under the Bankruptcy Code and any foreign counterpart thereto. + +[SIGNATURE PAGE FOLLOWS] + +31 9012190/26 + + + + + +IN WITNESS WHEREOF, the Parties hereto have each caused this Agreement to be duly executed as of the Effective Date. + +MEDIWOUND LTD. + +By: /s/ Stephen T. Wills Name: Stephen T. Wills Title: Chairman + +VERICEL CORPORATION + +By: /s/ Dominick Colangelo Name: Dominick Colangelo Title: President & CEO + +32 9012190/26 + + + + + +SCHEDULE 1.26 + +KEY MATERIALS & KEY MATERIALS SUPPLIERS + +Bromelain special Production - CBC Taiwan + +[***] + +[***] + +33 9012190/26 + + + + + +SCHEDULE 2.7 + +TECHNOLOGY TRANSFER DOCUMENTATION + +Technology Transfer documents include but are not limited to + +[***] + +34 9012190/26 + + + + + +SCHEDULE 4.1 + +CHANGE NOTIFICATION + +Category of Change Minimum Notification prior to effectiveness of implementation of the change Section 4.2 : Changes in Facility Major - Changes to facility have the potential to have an adverse effect on product quality that requires BLA Prior Approval Supplement. [***] + +• Moderate - Changes to facility have a moderate potential to have an adverse effect on product quality that requires Notification to the Regulatory Authority (e.g., CBE, CBE-30) + +[***] + +• Minor - Changes to facility have minimal potential to have an adverse effect on product quality that requires annual or periodic reporting to the FDA. + +[***] + +Section 4.3: Discretionary Manufacturing changes • Major - Changes have the potential to have an adverse effect on product quality that requires BLA Prior Approval Supplement. [***] + +• Moderate - Changes have a moderate potential to have an adverse effect on product quality that requires Notification to the Regulatory Authority (e.g., CBE, CBE-30). + +[***] + +35 9012190/26 + + + + + +Category of Change Minimum Notification prior to effectiveness of implementation of the change • Minor - Changes have minimal potential to have an adverse effect on product quality that requires annual or periodic reporting to the FDA. [***] + +• None - Changes have no potential to have an adverse effect on product quality and has no regulatory impact. + +• Example + +o Clarification of internal SOPs + +[***] + +Section 4.4 Changes required by a Regulatory Authority [***] + +Example Timeline for Major Change (BLA Prior Approval Supplement Required) Vericel Evaluation: [***] Pre-Submission discussions with FDA and/or BARDA: [***] Testing (presumes rate limitation is stability testing of > 6 months): [***] Submission drafting: [***] FDA Review: [***] Implementation: [***] + +Example Timeline for Moderate Change (BLA CBE-30 Required) Vericel Evaluation: [***] Testing: [***] Submission drafting: [***] FDA Review: [***] Implementation: [***] + +36 9012190/26 + + + + + +SCHEDULE 4.5 + +FULL-TIME EQUIVALENT + +FTE Rates for Reimbursement of Preapproved Activities Completed by MediWound per Section 4.5: + +The FTE rate will be capped per [***]. + +MediWound personnel will be reimbursed at the designated FTE with an overhead of [***]. + +Consultants' costs will be reimbursed only if pre-approved by Vericel before any work is conducted. [***]. + +Subcontractor costs will be reimbursed only if pre-approved by Vericel before any work is conducted. [***]. + +Total invoices including FTE wages, applicable overhead, consultant costs and subcontractor costs will be subject [***]. + +37 9012190/26 + + + + + +EXHIBIT A + +UNIT PRICES + +◦ 5 gram units of Finished Product at [***] per unit ◦ 2 gram units of Finished Product at [***] per unit + +38 9012190/26 + + + + + +EXHIBIT B + +ADDITIONAL SERVICES + +ADDITIONAL SERVICE COST + +Other Additional Services At the FTE Rates set forth on Schedule 4.5 + +39 + +9012190/26 \ No newline at end of file diff --git a/full_contract_txt/VERSOTECHNOLOGIESINC_12_28_2007-EX-99.3-INTELLECTUAL PROPERTY AGREEMENT.txt b/full_contract_txt/VERSOTECHNOLOGIESINC_12_28_2007-EX-99.3-INTELLECTUAL PROPERTY AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..9c84e385133f8d3afb6bc888ac6131ce9fbd9928 --- /dev/null +++ b/full_contract_txt/VERSOTECHNOLOGIESINC_12_28_2007-EX-99.3-INTELLECTUAL PROPERTY AGREEMENT.txt @@ -0,0 +1,99 @@ +Exhibit 99.3 + +EXECUTION COPY + +INTELLECTUAL PROPERTY AGREEMENT + +THIS INTELLECTUAL PROPERTY AGREEMENT (this "Intellectual Property Agreement"), dated as of December 20, 2007, is made by and between NMS COMMUNICATIONS CORP., a Delaware corporation ("Seller"), and VERSO BACKHAUL SOLUTIONS, INC., a Georgia corporation ("Backhaul"). + +RECITALS: + +WHEREAS, Seller and Verso Technologies, Inc., a Minnesota corporation ("Buyer"), have entered into that certain Asset Purchase Agreement, dated as of the date hereof (the "Asset Purchase Agreement"), pursuant to which Buyer has the right to acquire the Purchased Assets of Seller and its Subsidiaries, as more particularly described in the Asset Purchase Agreement (all capitalized words and terms used herein and not otherwise defined herein shall have the meanings ascribed to them in the Asset Purchase Agreement); and + +WHEREAS, Buyer has designated Backhaul as a Buyer Designee for purposes of the Asset Purchase Agreement, and Buyer has assigned to Backhaul the right to receive the Purchased Assets pursuant to that certain Assignment of Asset Purchase Agreement between Buyer and Backhaul dated as of the date hereof. + +ASSIGNMENT: + +NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, Seller does hereby transfer, sell, assign, convey and deliver to Backhaul all right, title and interest in, to and under the Assigned Intellectual Property, including, without limitation, the Trademarks and Patents set forth on Schedules A and B hereof, respectively, and all goodwill of the Purchased Business associated therewith. Seller hereby covenants and agrees, that from time to time forthwith upon the reasonable written request of Backhaul or Buyer, that Seller will, at Backhaul's cost and expense, do, execute, acknowledge and deliver or cause to be done, executed, acknowledged and delivered, each and all of such further acts, deeds, assignments, transfers, conveyances and assurances as may reasonably be required by Backhaul or Buyer in order to transfer, assign, convey and deliver unto and vest in Backhaul title to all right, title and interest of Seller in, to and under the Assigned Intellectual Property. + +This Intellectual Property Agreement is subject in all respects to the terms and conditions of the Asset Purchase Agreement and is intended only to document the assignment of the Assigned Intellectual Property. Nothing contained in this Intellectual Property Agreement shall be deemed to supersede any of the obligations, agreements, representations, covenants or warranties of Seller and Buyer contained in the Asset Purchase Agreement. + +This Intellectual Property Agreement shall be construed and interpreted according to the laws of the State of Georgia, applicable contracts to be wholly performed within the State of Georgia. + + + + + + + +This Intellectual Property Agreement may be executed in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Intellectual Property Agreement by facsimile shall be effective as delivery of a manually executed counterpart of this Intellectual Property Agreement. + +[Signature Page to Follow] + +2 + + + + + + + +IN WITNESS WHEREOF, the parties hereto have executed and delivered this Intellectual Property Agreement as of the date first written above. + + + + NMS COMMUNICATIONS CORP. By: /s/ Robert Schechter Name: Robert Schechter Title: CEO/President VERSO BACKHAUL SOLUTIONS, INC. By: /s/ Martin D. Kidder Name: Martin D. Kidder Title: President + + + + + + + +STATE OF Massachusetts: + +COUNTY OF Middlesex: + +On the 20th day of December, 2007, before me personally came Robert Schechter, to me known (or satisfactorily proven), who being by me duly sworn, did depose and say that he/she is the CEO/President of NMS Communications Corporation, the corporation described in, and which executed the foregoing instrument, and that he/she was fully authorized to execute this Intellectual Property Agreement on behalf of said corporation. + + + + /s/ Jason A. Minio (SEAL) Jason A. Minio Notary Public Commonwealth of Massachusetts My Commission Expires November 1, 2013 + + + +STATE OF Georgia: + +COUNTY OF Cobb: + +On the 20th day of December, 2007, before me personally came Martin Kidder, to me known (or satisfactorily proven), who being by me duly sworn, did depose and say that he/she is the CFO of Verso Technologies, the corporation described in, and which executed the foregoing instrument, and that he/she was fully authorized to execute this Intellectual Property Agreement on behalf of said corporation. + + + + /s/ Susanne G. Davis (SEAL) Susanne G. Davis Notary Public, Cobb County, GA My Commission expires Aug. 10, 2010 + + + + + + + + + +SCHEDULE A + + + +[INTENTIONALLY OMITTED] + + + + + + + +SCHEDULE B + + + +[INTENTIONALLY OMITTED] \ No newline at end of file diff --git a/full_contract_txt/VERTEXENERGYINC_08_14_2014-EX-10.24-OPERATION AND MAINTENANCE AGREEMENT.txt b/full_contract_txt/VERTEXENERGYINC_08_14_2014-EX-10.24-OPERATION AND MAINTENANCE AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..4ee49f70853524c23cd30c8538d4961eab25490b --- /dev/null +++ b/full_contract_txt/VERTEXENERGYINC_08_14_2014-EX-10.24-OPERATION AND MAINTENANCE AGREEMENT.txt @@ -0,0 +1,489 @@ +Exhibit 10.24 + +______________________________________________________________________________ + +______________________________________________________________________________ + +OPERATION AND MAINTENANCE AGREEMENT + +Dated as of November 3, 2010 + +______________________________________________________________________________ + +______________________________________________________________________________ + +10.23 + + + + + +TABLE OF CONTENTS Page + +ARTICLE I : DEFINITIONS1 + +ARTICLE II : ENGAGEMENT OF OPERATOR5 2.1 Engagement.. 5 2.2 Independent Contractor. 5 2.3 Owner Cooperation 5 + +ARTICLE III : TERM, RESIGNATION OR REMOVAL OF OPERATOR5 3.1 Term. 5 3.2 Owner Default. 5 3.3 Operator Default 6 3.4 Cooperation with Owner or Successor Operator 7 3.5 Effect of Termination 7 + +ARTICLE IV : DUTIES AS OPERATOR7 4.1 Duties as Operator. 7 4.2 Standard of Care.. 11 4.4 Limitation of Authority 12 + +ARTICLE V : ACCOUNTING, REPORTS, RECORDS12 5.1 Accounting Methods. 12 5.2 Independent Audit. 12 + +ARTICLE VI : FORCE MAJEURE12 6.1 Procedure.. 12 + + + + + +6.2 Strikes. 13 + +ARTICLE VII : INSURANCE AND INDEMNIFICATION13 7.1 Operator Insurance. 13 7.2 Contractors 14 7.3 Notice of Claims.. 14 7.4 Mutual Release and Indemnification. 14 + +ARTICLE VIII : GENERAL PROVISIONS15 8.2 Notices 15 8.3 Rights 16 8.4 Applicable Laws 16 8.5 Rules of Construction. 16 8.6 Governing Law.. 17 8.7 Dispute Resolution. 17 8.8 Limitation of Liability.. 17 8.9 Entirety of Agreement, Amendments 17 8.10 Waivers. 18 8.11 Headings. 18 8.12 Rights and Remedies. 18 8.13 Assignment 18 8.14 Counterparts 18 8.15 No Third Party Beneficiary 18 8.16 Further Assurances. 28 + +10.23 + + + + + +OPERATION AND MAINTENANCE AGREEMENT This OPERATIONS AND MAINTENANCE AGREEMENT dated this 3rd day of November, 2010 (the "Effective Date"), is made and entered into by and between MAGELLAN TERMINALS HOLDINGS, L.P. (f/k/a Marrero Terminal, LLC), a Delaware limited partnership ("Owner"), and OMEGA REFINING, LLC, a Delaware limited liability company ("Omega" or "Operator"). Owner and Operator are referred to individually herein as a "Party" and collectively herein as the "Parties". + +WITNESSETH: + +WHEREAS, Owner currently operates that certain six spot rail car loading/offloading area located at 5000 River Road, Marrero, Louisiana, including associated piping, hoses, and pumps as more particularly described on Exhibit "A" attached hereto and incorporated by reference herein (the "Rail Facility"); and + +WHEREAS, Owner wishes to retain Operator to maintain and operate the Rail Facility as well as administering the business and regulatory affairs of Owner relating to the Rail Facility, all in accordance with the terms and conditions set forth below. + + NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows: + +ARTICLE I : DEFINITIONS + +Capitalized terms used in this Agreement but not otherwise defined herein shall have the following meanings: + +"Affiliate" means, with respect to any Person, any other Person that, directly or indirectly, controls, is controlled by, or is under common control with, such specified Person through one or more intermediaries or otherwise. For the purposes of this definition, "control" means, where used with respect to any Person, the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of Voting Securities or interests, by contract or otherwise, and the terms "controlling" and "controlled" have correlative meanings. + +"Agreement" means this Amended and Restated Operations and Maintenance Agreement (including all exhibits), as amended from time to time in accordance with the terms hereof. + +"Business Day" means any calendar day, other than a Saturday or Sunday, on which commercial banks in New Orleans, Louisiana are open for business. + +"Calendar Year" means the time period from January 1 through December 31 of the same calendar year. + +1 + + + + + +"Capital Project" means any capital expenditure to repair, maintain, construct, expand, or modify the Rail Facility. + +"Capital Project Proposal" shall have the meaning set forth in Section 4.1.11. + +"Claim" means any lawsuit, claim, proceeding, investigation, review, audit or other cause of action of any kind. + +"Constituent of Concern" means any substance defined as a hazardous substance, hazardous waste, hazardous material, toxic substance, solid waste, pollutant or contaminant by an Environmental Law. + +"Effective Date" shall have the meaning set forth in the preamble to this Agreement. + +"Emergency" means a sudden or unexpected event that causes, or risks causing, imminent material damage to the Rail Facility, death or injury to any Person, or material damage to property or the environment. + +"Emergency Work" shall have the meaning set forth in Section 4.1.12. + +"Environmental Law" means all applicable Laws and Environmental Permits of any Governmental Authority relating to the environment, natural resources, or the protection thereof, including, without limitation: (a) all requirements pertaining to liability for reporting, management, licensing, permitting, investigation, and remediation of emissions, discharges, releases, or threatened releases of a Constituent of Concern; and (b) CERCLA, the Hazardous Materials Transportation Act, 49 U.S.C. § 5101 et seq. the Federal Clean Water Act, the Federal Clean Air Act, the Federal Solid Waste Disposal Act (which includes the Resource Conservation and Recovery Act), the Federal Toxic Substances Control Act, and the Federal Insecticide, Fungicide and Rodenticide Act, the Oil Pollution Act of 1990, 33 U.S.C. § 2701 et seq., and the Safe Drinking Water Act, 42 U.S.C. § 300f et seq. and any applicable Law relating to health, safety, the environment, natural resources or the protection thereof, each as amended from time to time, including any regulations promulgated pursuant thereto, and any state or local counterparts. "Environmental Permits" all permits, licenses, registrations, authorizations, certificates and approvals, and any other similar items, of Governmental Authorities required by Environmental Laws and necessary for or held in connection with the ownership and/or operation of the Rail Facility or any of the transactions contemplated hereby. + +"Force Majeure" means any cause or causes not reasonably within the control of the Party claiming suspension and which, by the exercise of reasonable diligence, such Party is unable to prevent or overcome, including, without limitation, acts of God, acts, omissions to act, and/or delays in action of federal, state, or local government or any agency thereof, strikes, lockouts, work stoppages, or other industrial disturbances, acts of a public enemy, sabotage, wars, blockades, insurrections, riots, acts of terror, epidemics, landslides, lightning, earthquakes, fires, storms, storm warnings, floods, washouts, extreme cold or freezing weather, arrests and restraints of governments + +2 10.23 + + + + + +and people, civil or criminal disturbances, interruptions by governmental or court orders, present and future valid orders of any regulatory body having jurisdiction, explosions, mechanical failures, breakage, or accident to equipment installations, machinery, compressors, or lines of pipe, and associated repairs, freezing of wells or lines of pipe, partial or entire failure of wells, pipes, facilities, or equipment, electric power unavailability or shortages, failure of pipelines or carriers to transport, partial or entire failure or refusal of operators of upstream or downstream pipelines or facilities to receive used motor oil, governmental regulations, and inability to obtain or timely obtain, or obtain at a reasonable cost, after exercise of reasonable diligence, pipe, materials, equipment, rights-of-way, servitudes, governmental approvals, or labor, including those necessary for the facilities provided for in this Agreement. + +"GAAP" means generally accepted accounting principles, consistently applied. + +"Governmental Authority" means any federal, state, municipal, local or similar governmental authority, regulatory or administrative agency, court or arbitral body with jurisdiction over the Parties, this Agreement, any of the transactions contemplated hereby or the Rail Facility. + +"Hazardous Materials" means any materials, including without limitation chemicals and wastes that are regulated under Environmental Law. "Law" means any statute, writ, law, common law, rule, regulation, ordinance, order, judgment, injunction, award, determination or decree of a Governmental Authority, or any requirement under the common law. + +"Lease" shall mean that certain Land Lease dated as of April 30, 2008, pursuant to which Operator leased certain property from Owner's predecessor in interest, as described therein, as amended by that certain First Amendment to Land Lease dated as of October 29, 2009. + +"Liability Claim" means a Claim arising out of the administration, operation, or maintenance of the Rail Facility, or arising out of or incidental to the activities carried on or work performed or required by this Agreement. + +"Loss" means any loss, cost, expense, liability, damage, sanction, judgment, lien, fine, or penalty, including reasonable attorney's and consultant's fees and expenses, incurred, suffered or paid by, or resulting to, the applicable indemnified Persons on account of (i) injuries (including death) to any Person or damage to or destruction of any property, sustained or alleged to have been sustained in connection with or arising out of the matters for which the indemnifying Party has indemnified the applicable indemnified Persons, (ii) any failure of any representation or warranty made by Operator in this Agreement to be true and correct when made, or (iii) the breach of any covenant or agreement made or to be performed by the indemnifying Party pursuant to this Agreement. + +"Operating and Capital Expenditure Budget" means, with respect to each period, the Operating and Capital Expenditure Budget for such period approved by Owner. + +3 10.23 + + + + + +"Operator" shall have the meaning set forth in the preamble to this Agreement. + +"Operator Indemnified Parties" means, collectively, Operator, its successors and permitted assigns, and their respective Affiliates, shareholders, members, partners, officers, directors, employees, and agents. + +"Operator Parties" means, collectively, Operator, Operator's Affiliates, and their respective successors and assigns; "Operator Party" means any such Person individually. + +"Owner" shall have the meaning set forth in the preamble to this Agreement. + +"Owner Indemnified Parties" means, collectively, Owner, its successors and permitted assigns, and their respective Affiliates, shareholders, members, partners, officers, directors, employees, and agents. + +"Party" means either Owner or Operator, as applicable, and "Parties" means both Owner and Operator. + +"Person" means an individual, a corporation, a partnership, a limited partnership, a limited liability company, an association, a joint venture, a trust, an unincorporated organization, or any other entity or organization, including a government or political subdivision or an agency or instrumentality thereof. + +"Rail Facility" shall have the meaning ascribed to such term m the recital of this Agreement. + +""Tax" or "Taxes" means any (i) federal, state, provincial, county, local or foreign taxes, charges, fees, levies or other assessments, including all sales and use, goods and services, ad valorem, transfer, gains, profits, excise, franchise, real and personal property, gross receipt, value added, capital stock, production, business and occupation, disability, employment, payroll, license, estimated, stamp, custom duties, severance, unemployment, social security, Medicare, alternative minimum or withholding taxes or charges imposed by any Governmental Authority, and including any interest and penalties (civil or criminal) on or additions to any such taxes, but expressly excluding any income tax or tax based on income, such as, without limitation, the franchise tax set forth in Delaware Tax Code: 8 Del. Laws, c. 5 §501 et. seq., as the same may be amended or recodified from time to time, and (ii) liability for items in (i) of any other Person by contract, operation of Law (including Treasury Regulation 1.1502-6) or otherwise. + +"Tax Returns" means any return, report, election, declaration, statement, notice, information return, schedule, or other document (including any related or supporting information) filed or required to be filed with any Governmental Authority in connection with the determination, assessment, collection or administration of any Taxes or any income tax or tax based on income, such as, without limitation, the franchise tax set forth in Delaware Tax Code 8 Del. Laws, c. 5 §501 + +4 10.23 + + + + + +et. seq., as the same may be amended or recodified from time to time, or the administration of any laws, regulations or administrative requirements relating to any Taxes or any amendment thereof. + +"Voting Securities" means, as it relates to a Person, securities of any class of such Person entitling the holders thereof to vote in the election of, or to appoint, members of the board of directors or other similar governing body of the Person; provided that if such Person is a limited partnership, Voting Securities of such Person shall be the general partner interest in such Person. + +ARTICLE II : ENGAGEMENT OF OPERATOR + +2.1 Engagement. Owner hereby appoints and retains Operator to manage, operate, and maintain the Rail Facility and to administer the business and regulatory affairs of Owner relating to the Rail Facility in accordance with the terms and conditions set forth herein, and Operator hereby accepts such appointment. + +2.2 Independent Contractor. The Parties expressly understand and agree that Operator is acting and shall perform and execute the provisions of this Agreement as an independent contractor unrelated to Owner or any Owner Affiliate, and the work performed by Operator hereunder shall be subject to Owner's general right of inspection and approval. Nothing in this Agreement is intended to create a relationship, expressed or implied, of employer-employee or principal-agent between Owner and Operator or between Owner and any individual employed or provided to work hereunder by Operator. + +2.3 Owner Cooperation. Owner shall cooperate with Operator and provide Operator with such information as Operator may reasonably request from time to time in connection with the performance of Operator's duties hereunder. + +ARTICLE III : TERM, RESIGNATION OR REMOVAL OF OPERATOR + +3.1 Term. This Agreement shall commence on the Effective Date and, shall continue for the duration of the Lease, unless terminated earlier pursuant to Section 3.2 or 3.3. + +3.2 Owner Default. Operator may terminate this Agreement at any time upon the occurrence of any of the following: + +(a) the dissolution or bankruptcy of Owner; + +(b) Owner fails to pay when due any amount due and payable hereunder, including, without limitation, any interest, fees, reimbursements or indemnifications, and such failure shall continue for a period of 15 days after the due date thereof; or + +(c) other than as set forth in clause (b) above, Owner breaches or fails to observe or perform any material term, condition, or obligation contained in this Agreement and fails to correct, or fails to diligently pursue correction of, such breach within 60 days after receipt of written notice from Operator of any such breach. + +5 10.23 + + + + + +If any of the above occurs and Operator elects to terminate this Agreement, then Operator may give a written notice of termination to Owner, which termination shall be effective on the date specified by Operator in such notice, provided that such termination date shall be within 60 days of the date such notice is delivered to Owner. Operator's notice of breach to Owner under Section 3.2(b) or (c) shall state with particularity the breach alleged by Operator. To the extent Owner disputes the basis for Operator's notice of breach, the matter shall be addressed under Section 8.6. Nothing in this Section 3.2 shall be construed to limit or preclude any remedy Operator may have at law or in equity with respect to any material breach by Owner. + +3.3 Operator Default. Owner may terminate this Agreement at any time upon the occurrence of any of the following: + +(a) the dissolution or bankruptcy of Operator; + +(b) Operator fails to pay when due any amount due and payable hereunder, including, without limitation, any interest, fees, reimbursements or indemnifications, and such failure shall continue for a period of 15 days after the due date thereof; + +(c) other than as set forth in clause (b) above, Operator breaches or fails to observe or perform any material term, condition, or obligation contained in this Agreement and fails to correct, or fails to diligently pursue correction of, such breach within 60 days after receipt of written notice from Owner of any such breach; + +(d) Termination by Owner pursuant to Section 4.1.1; or + +(e) Without cause on no less than seven (7) days prior written notice. + +In the event Owner terminates this Agreement pursuant to subparagraph (e) above, Owner may reimburse Operator for any unamortized capital expenditure (determined in accordance with GAAP) to the extent such capital expenditure was included in the Operating and Capital Expenditure Budget. If any of the above occurs, other than an event described in subparagraph (d), and Owner elects to terminate this Agreement (a termination for "cause"), then Owner may give a written notice of termination to Operator, which termination shall be effective on the date specified by Owner in the notice, provided that such termination date shall be within 60 days of the date the notice is delivered to Operator. Owner's notice of breach to Operator under Section 3.3(b) or (c) shall state with particularity the breach alleged by Owner. To the extent Operator disputes the basis for Owner's notice of breach, the matter shall be addressed under Section 8.6. Nothing in this Section 3.3 shall be construed to limit or preclude any remedy Owner may have at law or in equity with respect to any material breach by Operator. + +3.4 Cooperation with Owner or Successor Operator. Upon the termination of this Agreement, Operator shall cooperate in the transition of operations to Owner or a successor operator + +6 10.23 + + + + + +and upon Owner's request, will promptly deliver all books and records and other property (including, without limitation, intellectual property) of Owner to Owner or the successor operator, as applicable. + +3.5 Effect of Termination. Any termination of this Agreement pursuant to this Article III will release Operator from, and Owner agrees to indemnify Operator against, any liability accruing or accrued hereunder after the effective date of termination, except with respect to the obligations and liabilities of Operator that survive termination including any and all liabilities arising out of or resulting from Operator's operation and maintenance of the Rail Facility. Termination of this Agreement shall not relieve the Parties from any liability or obligation accruing or accrued prior to the date of such termination or deprive a Party not in breach (other than a breach which occurs because such Party is rightfully withholding performance in response to a breach by the other Party) of its right to any remedy otherwise available to such Party. + +ARTICLE IV : DUTIES AS OPERATOR + +4.1 Duties as Operator. Operator shall be responsible for (1) construction of the improvements to the Rail Facility in accordance with those plans and specifications approved by Owner in writing, (2) administering the regulatory, business, and financial affairs of the Rail Facility; (3) maintaining the financial and product accounting records of the Rail Facility; 4) preparing and distributing financial statements; (5) complying with any and all instructions it receives from Owner with respect to the operation and maintenance of the Rail Facility, provided that such instructions are consistent with applicable Laws and (6) complying with any and all Law and Environmental Law including any other permits or licenses. + +4.1.2 Improvements/Alterations to the Rail Facility. Operator shall evaluate and modify, at its sole cost and expense, the rail car containment pan system (the "Containment Pan System") so that such system is in compliance with the Spill Prevention, Control, and Countermeasure Regulations promulgated by the Environmental Protection Agency (the "SPCC Regulations") and any other applicable regulations, rules or similar administrative publications promulgated by any other federal, state, or local regulatory agency. Such evaluation and modification, if necessary, of the Containment Pan System shall occur within ninety (90) days of the Effective Date. Owner specifically reserves the right to review, evaluate and approve the plans and specifications developed by Operator for any modifications to be made to the Containment Pan System for such compliance. Owner will provide written notice to Operator, within fifteen (15) days of Operator's submission of the plans and specifications for the Containment Pan System, confirming or denying its approval of Operator's plans and specifications for modification to the Containment Pan System, and in the event Owner does not approve such plans and specifications, Owner will provide Operator with written detail describing why such approval was withheld. Operator will have ten (10) days from the date it receives such written notice from Owner denying approval of its Containment Pan System plans and specifications to remediate such plans and specifications so that the modifications will comply with the SPCC Regulations. If Operator fails to remediate the Containment Pan System plans and specifications in a manner that will result in the modifications to the Containment Pan System complying with the SPCC Regulations within such ten (10) day period in a manner satisfactory to Owner, Owner, in its sole discretion, may unilaterally terminate this Agreement. Additionally, Owner reserves the right to inspect the + +7 10.23 + + + + + +Containment Pan System after Operator has modified such equipment, and if such modifications made by Operator to the Containment Pay System do not comply with SPCC Regulations, then Owner, in its sole discretion, may unilaterally terminate this Agreement. Any other alterations or improvements to the Rail Facility may not be made by Operator without the written consent of Owner. + +4.1.3 Operation of the Rail Facility. Operator shall manage and operate the Rail Facility, the construction and future modifications to the Rail Facility, and negotiate agreements in Owner's name with third parties related to the operation of the Rail Facility (provided that (i) Owner shall have the right to approve or disapprove any such agreements, and (ii) if approved, except as provided in Section 4.1.1, Owner, and not Operator, shall execute all such agreements), comply with any instructions it receives from Owner with respect to the operation and maintenance of the Rail Facility, provided that such instructions are consistent with applicable Laws, and perform all other services and functions related thereto subject to the limits, requirements, and restrictions otherwise set forth in this Agreement. + +4.1.4 Maintenance of the Rail Facility. Subject to the terms, conditions and limitations set forth in this Agreement, Owner hereby authorizes and empowers Operator, and Operator agrees, in the name of and on behalf of Owner, to, at its sole cost and expense, keep and maintain the Rail Facility in a condition and repair similar to, but not less than, its condition and repair on the Effective Date hereof. + +4.1.5 Operator Recommendations. In the event that Operator makes a good-faith recommendation in writing regarding an operational issue to Owner, and Owner does not, for any reason whatsoever, approve such recommendation, then Operator shall not be liable and Owner hereby releases and shall indemnify, defend and hold Operator harmless from and against any Claim or Loss that arises from, or is attributable to, the failure to implement such recommendation. + +4.1.6 Compliance with Owner Instructions. Notwithstanding anything to the contrary in this Agreement, in the event that Owner instructs Operator to take any action or refrain from taking any action in connection with the operation or maintenance of the Rail Facility and Operator in good faith disagrees with Owner because, among other reasons, it is not consistent with prudent operating standards, then Operator shall notify Owner of such disagreement in writing, and Owner hereby releases and shall indemnify, defend and hold Operator harmless from and against any Claim or Loss that arises from, or is attributable to, Operator's compliance with Owner's instructions. + +4.1.7 Environmental Laws. Operator shall comply, in the performance of its duties and responsibilities hereunder, in all respects with all Environmental Laws and all Environmental Permits. + +4.1.8 Purchase of Services, Materials and Supplies. Except as otherwise provided below and subject to the limitations herein, Operator shall, on Owner's behalf and as its agent, purchase or cause to be purchased necessary services, materials and supplies and incur such expenses and enter into such commitments as may be necessary to operate and maintain the Rail Facility, including, but not limited to, (i) contracts for the maintenance, repair and replacement of the Rail + +8 10.23 + + + + + +Facility and, if requested by Owner, construction of additions to the Rail Facility; and (ii) contracts for power, fuel, other utilities, and communication facilities as may be necessary in connection with proper operation and maintenance of the Rail Facility and for providing adjustments and replacements thereto. + +4.1.9 Personnel. Except as otherwise provided below and subject to the limitations herein, Operator, in its reasonable judgment, shall employ such personnel, with Operator or an Affiliate as their employer, as it may deem necessary to operate and maintain the Rail Facility and to provide adjustments and replacements thereto and to perform its other obligations hereunder. In addition to Operator's or Operator's Affiliates' employees who are either full-time or part-time dedicated to operating and maintaining the Rail Facility, Operator may: (i) utilize from time to time its other employees or the employees of Operator's Affiliates in services in connection therewith at a usual and customary rate of compensation; and/or (ii) engage the services of third-party contractors in the performance of such functions. Notwithstanding the foregoing, all personnel provided by Operator to operate and maintain the Rail Facility shall have the requisite background, training and skill necessary to operate such a facility in accordance with all current industry standards and any and all applicable state and federal Laws, Environmental Laws, and Environmental Permits. + +4.1.10 Payment of Operating Expenses. Operator shall promptly pay all direct costs and expenses incurred in operating and maintaining the Rail Facility as they become due, without reimbursement by Owner save and except to the extent specifically provided otherwise herein. + +4.1.11 Operating Expense Budget. Operator shall (i) administer and otherwise comply with the budget proposed by Operator and approved by Owner (ii) operate and maintain the Rail Facility in compliance with the Operating and Capital Expenditure Budget established for the Rail Facility; provided, however, if Owner instructs Operator to perform any services outside of the scope of the services contemplated in the Operating and Capital Expenditure Budget (exclusive of those services to be performed by Operator in connection with any necessary alterations or modifications to the Containment Pan System pursuant to Section 4.1.1), then Owner shall reimburse Operator for the costs and expenses associated therewith. + +4.1.12 Capital Projects. Operator may propose an unbudgeted Capital Project at any time by giving written notice of such to Owner. The notice (the "Capital Project Proposal") must specifically describe the proposed Capital Project and shall include the following: + +(i)a good-faith estimate of the costs associated with the operation and maintenance of the proposed Capital Project; + +(ii)preliminary engineering designs and plans; and + +(iii)general requirements or provisions for the Capital Project, including construction of the Capital Project and insurance coverage. + +9 10.23 + + + + + +Owner shall approve or reject the proposed Capital Project set forth in the applicable Capital Project Proposal within fifteen (15) days from the date of receipt of the same, such approval not to be unreasonably withheld, conditioned or delayed. If Owner approves the applicable Capital Project, then Operator shall have the right and authority with respect to the approved Capital Project to make expenditures, or enter into contracts to incur expenditures, without further authorization by Owner; provided, however, Owner will not be responsible for reimbursing Operator for any expenditures incurred by Operator related to the construction, operation, and maintenance of the Capital Project. + +4.1.13 Emergencies. Notwithstanding any provision of this Agreement, in the event of an Emergency, Operator shall proceed with maintenance or repair work or with any other action when necessary to minimize damage and to end the Emergency ("Emergency Work"), without regard to the limits set forth in this Article IV. Operator shall, as soon as reasonably practicable, notify Owner of the existence or occurrence of the Emergency, setting forth the nature of the emergency, the corrective action taken or proposed to be taken, and the actual or estimated cost of such corrective action. Emergency Work shall include only such work as is necessary to immediately address the Emergency and does not include any work necessary to restore the Rail Facility or improve the Rail Facility in order to permit continued operations. + +4.1.14 Reporting By Operator. Operator shall (by either (i) submitting written reports or records or (ii) providing Owner with access to Operator's internet website containing the relevant information, at Operator's discretion) provide to Owner the following reports or records, based on the best data available at the time of preparation and subject to revision based on acquisition of more accurate data: + +(i) as soon as available, and in any event within 30 days after the end of each calendar month, an operational report on major repairs and other operational details materially affecting the operations of the Rail Facility during such month; + +(ii) as soon as available, and in any event within 30 days after the end of each Calendar Year, a certificate from the president or chief executive officer of Operator stating that no event or condition exists or has occurred that violates, results in a breach of, or constitutes a default on the part of any Operator Party under, any of the terms, conditions or provisions of this Agreement; + +(iii) within 5 days of Owner's request, environmental information or records pertaining to the Rail Facility (as specified by Owner) necessary for Owner to comply with any reporting obligations of Owner related to all applicable Environmental Law and Environmental Permits; and + +(iv) such other information regarding the Rail Facility or the operation and maintenance of the Rail Facility as Owner may from time to time reasonably request. + +10 10.23 + + + + + +4.1.15 Notices to Owner. Operator shall immediately notify Owner in writing of (i) any enforcement, clean-up, removal or other governmental or regulatory action instituted, completed or threatened against Operator Parties or Owner pursuant to any Law or Environmental Law as a result of the operation of the Rail Facility; (ii) any claim made or threatened by any person arising out of or in connection with the operation of the Rail Facility against Operator Parties or Owner relating to damage, contribution, cost recovery, compensation loss or injury resulting from or claimed to result from any Hazardous Materials; (iii) any reports made to any environmental agency arising out of or in connection with any Hazardous Materials removed from the Rail Facility or the property on which the Rail Facility is situated including any complaints, notices, warnings, reports or asserted violations in connection therewith; and (d) the discovery of any Hazardous Materials at the Rail Facility or the property on which the Rail Facility is situated that are or may be in violation of Environmental Law. Operator shall also provide to Owner, as promptly as possible, and in any event within five (5) business days after the Operator Parties first received or sent the same, copies of all claims, reports, complaints, notices, warnings or asserted violations relating in any way to the Rail Facility or the Operator Parties' operation thereof. Upon written request of Owner (to enable Owner to defend itself from any claim or charge related to any Law or Environmental Law), Operator shall promptly deliver to Owner notices of hazardous waste manifests reflecting the legal and proper disposal of all such Hazardous Materials removed from the Rail Facility or the property on which the Rail Facility is situated. + +4.1.16 Chevron Terminaling Agreement. Each of the parties hereto acknowledges that rail car utilization is a service to which Chevron Marine Products LLC ("Chevron") is entitled under that certain Terminaling Agreement between Chevron and Owner, dated as of May 1, 2008 (the "Chevron Terminaling Agreement"). As such, Operator agrees to provide such service to Chevron in the event such service is warranted until the earlier to occur of (i) the termination of the provisions of this Agreement, or (ii) the termination of the Chevron Terminaling Agreement. + +4.1.17 Regulatory Affairs. Operator shall be responsible for preparing and submitting all regulatory filings pertaining to the Rail Facility required by any Governmental Authority. + +4.1.18 Devotion of Time. The employees of Operator, or the Operator Parties, as applicable, designated to perform the functions under this Agreement shall devote such time to the operation and maintenance of the Rail Facility as necessary to accomplish the responsibilities of Operator as set forth in this Article IV. Owner recognizes that the employees of Operator, or the Operator Parties, as applicable, shall not be obligated to devote full time to the operation and maintenance of the Rail Facility and that such employees of Operator may act on behalf of Operator or the Operator Parties, as applicable, in activities not associated with this Agreement. + +4.2 Standard of Care. Operator shall perform its duties and obligations hereunder and its responsibilities as Operator of the Rail Facility, (i) in a good and workmanlike manner, (ii) in conformity with the good practices in the rail car loading and unloading industry, (iii) in accordance with all valid and applicable Laws, including, without limitation, all Environmental Laws and Environmental Permits, and (iv) in accordance with the Operating and Capital Expenditure Budget. + +11 10.23 + + + + + +4.3 Limitation of Authority. Notwithstanding anything in this Agreement, Operator shall seek prior approval of Owner prior to taking the following actions: + +4.3.1 Binding Owner. Endorsing the name of Owner on any contract, commercial paper, or instruments of any nature or otherwise creating any obligation binding upon Owner except as expressly permitted under this Agreement. + +4.3.2 Asset Sales. Acquiring or disposing of any assets of Owner in a single transaction or in a series of related transactions, with a fair market value exceeding $10,000 in the aggregate, provided, however that Operator is expressly permitted to terminate leases or other contracts in respect of rental equipment regardless of value. + +4.3.3 Incurring any indebtedness on behalf of Owner, except for trade credit incurred by Operator in the ordinary course of business or within its expenditure authority set forth in this Agreement. + +ARTICLE V : ACCOUNTING, REPORTS, RECORDS + +5.1 Accounting Methods. Operator shall keep proper and complete records and books of account, which shall fully and accurately reflect all transactions and other matters relative to its operation and maintenance of the Rail Facility as are entered into records and books of account in accordance with generally accepted industry practices, and the same shall be supported by purchase orders, invoices, payrolls or other customary or necessary records pertaining thereto. Operator's financial books and records shall be kept in accordance with GAAP and shall be maintained on an accrual basis. The costs of any audit of Operator's books or records shall be borne by Owner absent manifest error. + +5.2 Independent Audits. Upon reasonable prior written notice to Operator, Owner shall have the right during normal business hours to audit or examine all books and records of Operator to the extent they relate to Operator's performance hereunder as well as the relevant books of account of Operator's contractors, relating to the performance of Operator's obligations under this Agreement. Operator shall cooperate with Owner's auditors by (i) making the applicable books and records available for inspection by Owner's auditors, and (ii) making such copies of books and records as may be reasonably requested by such auditors. In no event shall Owner's audits unreasonably interfere with Operator's operations. + +ARTICLE VI : FORCE MAJEURE + +6.1 Procedure. If either Party is rendered unable, wholly or in part, by Force Majeure to carry out its obligations under this Agreement, other than the obligation to indemnify and to make payments then or thereafter due hereunder, upon such Party giving notice and full particulars of such Force Majeure in writing to the other Party as soon as reasonably possible after the occurrence of the cause relied on, then the obligations of the Party giving such notice, so far as they are affected by such Force Majeure, will be suspended during the continuance of any inability so caused but for no longer period, and such cause must as far as possible be remedied with all reasonable and diligent dispatch by the Party claiming such in order to put itself in a position to carry out its obligations + +12 10.23 + + + + + +under this Agreement. Such notifying Party must also provide notice of the date of termination of such Force Majeure event. A Force Majeure event affecting the performance by either Party shall not relieve it of liability in the event of its negligence, where such negligence was a cause of the Force Majeure event, or in the event of its failure to use commercially reasonable efforts to remedy the situation and remove the cause with all reasonable dispatch. + +6.2 Strikes. It is understood and agreed that the settlement of strikes or lockouts is entirely within the discretion of the Party directly involved in the strike or lockout, and that the above requirement that any Force Majeure must be remedied with all reasonable dispatch will not require the settlement of strikes or lockouts by acceding to the demands of the opposing party when such course is inadvisable in the discretion of the Party having the difficulty. + +ARTICLE VII : INSURANCE AND INDEMNIFICATION + +7.1 Operator Insurance. + +7.1.1 Operator, with respect to Operator's activities provided for under this Agreement, shall maintain the following insurance coverage with responsible insurance carriers: + +(a) Workers' Compensation. Operator shall maintain statutory worker's compensation insurance, covering all of its and its Affiliates' employees and statutory employees, in accordance with the benefits afforded by the statutory Worker's Compensation Acts applicable to the state, territory, or district of hire, supervision, or place of accident. In addition, Operator shall maintain employer's liability insurance with a limit of not less than one million dollars ($1,000,000) each accident, one million dollars ($1,000,000) disease each employee, and one million dollars ($1,000,000) disease policy limit. Where not prohibited by law, Operator shall waive its right of subrogation against Owner. + +(b) Commercial General Liability Insurance. Operator shall maintain Commercial General Liability Insurance covering its operations under this Agreement including, without limitation, bodily injury, death, property damage, premises/operations, sudden and accidental pollution, independent contractors, products/completed operations, contractual, and personal injury liability, with a limit of not less than one million dollars ($1,000,000) per occurrence and two million dollars ($2,000,000) in the annual aggregate. + +(c) Commercial Automobile Insurance. Operator shall maintain Commercial Automobile Insurance coverage, including, without limitation, bodily injury and property damage for owned, hired, rented, and non-owned automotive equipment with a limit of not less than one million dollars ($1,000,000) per accident. + +(d) Umbrella Liability Insurance. Operator shall maintain Umbrella Liability Insurance coverage covering in excess of (a), (b), and (c) above, excluding Worker's Compensation, in the amount of ten million dollars ($10,000,000). + +7.1.2 To the extent of the liabilities assumed by Operator in this Agreement, Operator shall name Owner Indemnified Parties as additional insured on all insurance policies, + +13 10.23 + + + + + +except Workers' Compensation. The Owner Indemnified Parties' additional insured status will not limit the application of insurance protection as required by this Agreement which arises out of the Operator's indemnity obligations. These policies shall provide primary coverage for claims in which Operator has agreed to hold harmless and/or to indemnify the Owner Indemnified Parties. No "other insurance" clause may be invoked by any insurer. This coverage shall apply whether or not the indemnification is valid. Operator shall have its insurer(s) waive its right of subrogation against Owner Indemnified Parties on all insurance carried. Unless expressly stated to the contrary elsewhere in this Agreement or prohibited by applicable law or legal statute, Operator's indemnification obligations under this Agreement shall not be limited by amount or in scope to coverage provided by insurance which is required under this Agreement. + +7.1.3 Upon request, Operator agrees to furnish to Owner certificates of insurance or other evidence satisfactory to Owner to demonstrate that the required insurance has been procured and is in force. The certificate shall accurately reflect the required insurance coverages and shall provide that in the event of modification, expiration, cancellation or material change in a policy affecting the certificate holder, thirty days prior written notice shall be given to the certificate holder. Operator waives all rights against Owner for recovery of damages to the extent such damages are covered by the insurance maintained in accordance with this Section 7.1. + +7.2 Contractors. Operator acknowledges and agrees that any contractor engaged by Operator to perform services at the Rail Facility will be required to execute an access agreement, in a form acceptable to Owner, prior to such contractor accessing the Rail Facility and performing any services. Further, Operator shall attempt to obtain reasonable indemnification and insurance protection from contractors performing services for Owner to protect Owner and Operator. Operator shall require each of its contractors to carry insurance coverage substantially equivalent to the insurance required of Operator above, and to include provisions for its contractors to name Owner and Operator as additional insureds, with the exception of Workers' Compensation Insurance, and state that such policies will be primary to and non-contributory with any other insurance maintained by Operator and Owner. With respect to Workers' Compensation Insurance, the applicable contractor shall be required to cause its insurers to wave all rights of recovery or subrogation against Owner and Operator, where not prohibited by law. + +7.3 Notice of Claims. In the event that Operator receives notice, either in writing or orally, of an asserted or threatened Liability Claim against Operator or Owner, Operator shall provide Owner within 10 days of receipt of such Liability Claim a copy of any demand letter, petition, or similar documentation of the Liability Claim. + +7.4 Mutual Release and Indemnification. + +7.4.1 Owner's Indemnification. Subject to the terms of this Agreement, including, without limitation, Section 8.8 of this Agreement, Owner shall indemnify, defend, and hold harmless the Operator Indemnified Parties from and against all Claims and Losses arising out of or relating to (i) allegations of death or bodily injury or damage to property, to the extent arising out of or resulting from the negligence, gross negligence or willful misconduct of Owner, its Affiliates or its or their respective officers, directors, employees, or contractors in connection with this Agreement or the performance hereof; provided that Owner shall not be required to indemnify the Operator + +14 10.23 + + + + + +Indemnified Parties against such Claims and Losses to the extent such Claims and Losses are attributable to the acts or omissions of any Operator Indemnified Parties, (ii) any breach of this Agreement by Owner, and (iii) any agreements relating to the Rail Facility between Owner and third parties not affiliated with the Operator Parties (except to the extent expressly assumed by Operator hereunder). The duty to indemnify, defend and hold harmless under this Section 7.4.1 shall continue in full force and effect, notwithstanding the expiration or early termination of this Agreement, with respect to any Claims or Losses based on facts or conditions that occurred prior to such expiration or termination. + +7.4.2 Operator's Indemnification. Subject to the terms of this Agreement, including, without limitation, Section 8.8 of this Agreement, Operator shall indemnify, defend, and hold harmless the Owner Indemnified Parties from and against all Claims and Losses arising out of or relating to (i) allegations of death or bodily injury or damage to property, to the extent arising out of or resulting from the negligence, gross negligence or willful misconduct of Operator, its Affiliates or its or their respective officers, directors, employees, or contractors in connection with this Agreement or the performance hereof; provided that Operator shall not be required to indemnify the Owner Indemnified Parties against such Claims or Losses to the extent such Claims or Losses are attributable to the acts or omissions of any Owner Indemnified Party, (ii) any breach of this Agreement by Operator, and (iii) any agreements relating to the Rail Facility between Operator and third parties not affiliated with Owner (except to the extent expressly assumed by Owner hereunder). The duty to indemnify, defend and hold harmless under this Section 7.4.2 shall continue in full force and effect, notwithstanding the expiration or early termination of this Agreement, with respect to any Claims or Losses based on facts or conditions that occurred prior to such expiration or termination. + +ARTICLE VIII : GENERAL PROVISIONS + +8.1 Additional Rail Facilities. Nothing in this Agreement shall limit Owner's right to construct, expand or modify, and operate other rail car loading/off loading facilities (i) at Owner's terminal and storage facility located on the property on which the Rail Facility is located, or (ii) at any other location in Owner deems necessary and beneficial. + +8.2 Notices. Except as specifically provided otherwise herein, any notice, claim, or other communication provided for in this Agreement or any notice that either Party may desire to give to the other shall be in writing and shall be: (i) sent by facsimile transmission; (ii) delivered by hand; (iii) sent by United States mail with all postage fully prepaid; or (iv) delivered by courier with charges paid in accordance with the customary arrangements established by such courier, in each of the foregoing cases addressed to the Party at the following addresses: + +To Owner: + +Magellan Terminals Holdings, L.P. Attn: Mark Roles Manager, Commercial Development P.O. Box 22186 MD 31st Floor + +15 10.23 + + + + + +Tulsa, Oklahoma 74121-2186 To Operator: + +Omega Refining, LLC Attn: Robert Winland 5000 River Road Marrero, Louisiana 70072 + +with a copy to: + +Gregory & Plotkin, LLC Attn: James P. Gregory, Esq. 1331 17t h Street, Suite 1060 Denver, Colorado 80202 + +or at such other address as either Party may at any time designate by giving written notice to the other Party. Such notices, claims, or other communications shall be deemed received as follows: + +(i) if delivered personally, upon delivery; + +(ii) if sent by United States mail, whether by express mail, registered mail, certified mail or regular mail, the notice shall be deemed to have been received on the day receipt is refused or is confirmed orally or in writing by the receiving Party; + +(iii)if sent by a courier service, upon delivery; or + +(iv)if sent by facsimile, the Business Day following the day on which it was transmitted and confirmed by transmission report or such earlier time as confirmed orally or in writing by the receiving Party. + +8.3 Rights. The failure of either Party to exercise any right granted hereunder shall not impair nor be deemed a waiver of that Party's privilege of exercising that right at any subsequent time or times. + +8.4 Applicable Laws. This Agreement is subject to all valid present and future laws, regulations, rules, and orders of governmental authorities now or hereafter having jurisdiction over the Parties, this Agreement, any of the transactions contemplated hereby or the Rail Facility. + +8.5 Rules of Construction. In construing this Agreement, the following principles shall be followed: + +8.5.1 no consideration shall be given to the fact or presumption that one Party had a greater or lesser hand in drafting this Agreement; + +16 10.23 + + + + + +8.5.2 examples shall not be construed to limit, expressly or by implication, the matter they illustrate; + +8.5.3 the word "includes" and its syntactical variants mean "includes, but is not limited to" and corresponding syntactical variant expressions; and + +8.5.4 the plural shall be deemed to include the singular and vice versa, as applicable. + +8.6 Governing Law. This Agreement shall be governed by, construed, and enforced in accordance with the laws of the State of Delaware, without regard to choice of law principles that would require the application of the laws of any other jurisdiction. + +8.7 Dispute Resolution. + +8.7.1 Negotiation. Prior to submitting any dispute for resolution by a court, a Party shall provide written notice to the other of the occurrence of such dispute. If the Parties have failed to resolve the dispute within 15 Business Days after such notice was given, the Parties shall seek to resolve the dispute by negotiation between senior management personnel of each Party. Such personnel shall endeavor to meet and attempt to amicably resolve the dispute. If the Parties are unable to resolve the dispute for any reason within 30 Business Days after the original notice of dispute was given, then either Party shall be entitled to pursue any remedies available at law or in equity; provided, however, this Section 8.6.1 shall not limit a Party's right to initiate litigation prior to the expiration of the time periods set forth herein of such limitations would prevent a Party from filing a lawsuit or claim within the applicable period for filing lawsuits (e.g. statutes of limitation, prescription, etc.). + +8.7.2 Costs and Expenses. The prevailing Party in any litigation pertaining to any dispute hereunder shall be entitled to recover its reasonable costs, expenses, and attorney's fees in connection with such litigation. + +8.8 Limitation of Liability. Notwithstanding anything in this agreement to the contrary, neither Party shall be liable to the other Party for special, indirect, consequential, punitive, or exemplary damages suffered by such Party resulting from or arising out of this Agreement or the breach thereof or under any other theory of liability, whether tort, negligence, strict liability, breach of contract, warranty, indemnity, or otherwise, including, without limitation, loss of use, increased cost of operations, loss of profit or revenue, or business interruptions. In furtherance of the foregoing, each Party releases the other Party and waives any right of recovery for special, indirect, consequential, punitive, or exemplary damages suffered by such Party regardless of whether any such damages are caused by the other Party's negligence (and regardless of whether such negligence is sole, joint, concurrent, active, passive, or gross negligence), fault, or liability without fault. + +8.9 Entirety of Agreement, Amendments. This Agreement, including, without limitation, all exhibits hereto, integrate the entire understanding between the Parties with respect to the operation and maintenance by Operator of Owner's Rail Facility and supersede all prior understandings, drafts, discussions, or statements, whether oral or in writing, expressed or implied, + +17 10.23 + + + + + +dealing with the same subject matter. This Agreement may not be amended or modified in any manner except by a written document signed by the Parties that expressly amends this Agreement. + +8.10 Waivers. No waiver by either Party of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision hereof (whether or not similar), nor shall such waiver constitute a continuing waiver unless expressly provided. No waiver shall be effective unless made in writing and signed by the Party to be charged with such waiver. + +8.11 Headings. The headings and captions in this Agreement have been inserted for convenience of reference only and shall not define or limit any of the terms and provisions hereof. + +8.12 Rights and Remedies. Except as otherwise provided in this Agreement, each Party reserves to itself all rights, counterclaims, other remedies, and defenses to which such Party is or may be entitled arising from or out of this Agreement or as otherwise provided by law. + +8.13 Assignment. Operator shall not make any assignment of all or any part of this Agreement or any of the rights or obligations hereunder unless there first shall have been obtained the written consent thereto of Owner, which consent shall not be unreasonably withheld, conditioned, or delayed. Owner shall not make any assignment of all or any part of this Agreement or any of the rights or obligations hereunder except in connection with the sale, financing or conveyance of all or any part of the Rail Facility. This Agreement shall be binding upon and inure to the benefit of the successors and assigns of the Parties. Any attempted assignment of this Agreement in violation of this Section 8.12 shall be null and void. + +8.14 Counterparts. This Agreement may be executed in one or more counterparts (including by facsimile), each of which shall be deemed an original, and all of which shall be deemed one and the same Agreement. + +8.15 No Third Party Beneficiary. Except for parties indemnified hereunder, this Agreement is for the sole benefit of the Parties and their respective successors and permitted assigns, and shall not inure to the benefit of any other Person whomsoever or whatsoever, it being the intention of the Parties that no third Person shall be deemed a third-party beneficiary of this Agreement. + +8.16 Further Assurances. Each Party shall take such acts and execute and deliver such documents as may be reasonably required to effectuate the purposes of this Agreement. + +* * * * * + +18 10.23 + + + + + +IN WITNESS WHEREOF, the undersigned have executed or caused to be executed on their behalf this Agreement to be effective on the Effective Date. + + + + + +Operation & Maintenance Agreement Signature Page K&E 10351208.3 + + + + + +EXHIBIT "A" + + Exhibit "A" K&E 10351208.3 + + + + + +EXHIBIT "C" Owner's Facility Security Plan + +2 10.23 \ No newline at end of file diff --git a/full_contract_txt/VERTICALNETINC_04_01_2002-EX-10.19-MAINTENANCE AND SUPPORT AGREEMENT.txt b/full_contract_txt/VERTICALNETINC_04_01_2002-EX-10.19-MAINTENANCE AND SUPPORT AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..6bfc4a736347a6570f868bb3133d9c2c6057df2e --- /dev/null +++ b/full_contract_txt/VERTICALNETINC_04_01_2002-EX-10.19-MAINTENANCE AND SUPPORT AGREEMENT.txt @@ -0,0 +1,451 @@ +EXHIBIT 10.19 + + MAINTENANCE AND SUPPORT AGREEMENT + + This Maintenance and Support Agreement (this "Agreement") is entered on this 9th day of October, 2001 and is deemed effective as of October 1, 2001 (the "Effective Date"), by and between VerticalNet, Inc. ("VNI") and VerticalNet Enterprises LLC, formerly known as Tradeum, Inc. which d/b/a VerticalNet Solutions ("VNE"; collectively with VNI, "Vert"), on the one hand, and Converge, Inc. ("Converge") on the other hand. + + RECITALS + + WHEREAS, VNI, VNE and Converge have entered into Amended and Restated Subscription License Agreement effective as of the date hereof (the "Subscription License Agreement") pursuant to which Vert has licensed to Converge certain proprietary software products; and + + WHEREAS, Converge desires to obtain and VNE is willing to provide certain maintenance and support services with respect to such products on the terms and conditions set forth herein. + + NOW, THEREFORE, in consideration of the mutual covenants and obligations set forth below, and intending to be legally bound, the parties agree as follows: + + AGREEMENT + + 1. Definitions. + + 1.1 "Affiliate" means, when used with reference to a party, any individual or entity directly or indirectly Controlling, Controlled by or under common Control with such party. + + 1.2 "Business Day" means a day other than a Saturday, Sunday or federal holiday. + + 1.3 "Control" (including all derivations thereof) means, with respect to a party, the direct or indirect ownership of at least 50% of the outstanding voting securities of a party, or the right to control the policy decisions of such party. + + 1.4 "Converge-Requested Enhancement" means any modification, improvement or enhancement to a Product that is developed by VNE at the specific request of Converge as part of the Professional Services provided hereunder. + + 1.5 "Documentation" means the documentation for the Supported Products that is made generally available by Vert to users or licensees of such Supported Products and, with respect to Supported Products that have been customized for Converge, any supplemental documentation for such Supported Products that is provided by VNE to Converge. + + 1.6 "Enhancement" means a Vert-General Release Enhancement or a Converge-Requested Enhancement. + + 1.7 "Error" means a failure of a Supported Product to substantially conform to its corresponding Documentation (or if there is no such Documentation, to its closest reasonable equivalent). + + 1.8 "Initial Term" is defined in Section 9.1 below. + + 1.9 "Intellectual Property" shall mean any and all trade secrets, patents, copyrights, trademarks, service marks, trade names, domain names, trade dress, URLs, brand features, know-how and similar rights of any type under the laws of any applicable governmental authority, including, without limitation, all applications and registrations relating to any of the foregoing. + + 1.10 "Intellectual Property Rights" shall mean all rights in and to Intellectual Property. + + 1.11 "Maintenance and Support Services" means the services described in Section 2 below. + + 1.12 "Maintenance Update" means any workaround, bug fix or other software code for a Supported Product that is primarily designed to correct an Error in or other Problem caused by such Supported Product. + + 1.13 "Object Code" means computer programming code in compiled, machine readable format, running, to the extent requested under a Work Plan or SOW, on each of Unix (at least Tru64 and HP-UX) and Windows NT (or their successor operating systems), together with all related end-user or installation manuals and other similar documentation. + + 1.14 "Party" or "party" means Vert, VNI and/or VNE, as applicable, on the one hand, and Converge on the other hand. + + 1.15 "Personnel" means agents, employees, independent contractors, temporary employees or subcontractors engaged or appointed by Converge, VNI or VNE, respectively. + + 1.16 "Problem" means a Severity Level 1, 2, 3 or 4 problem with a Supported Product (whether or not attributable or believed to be attributable to + + + + + +an Error), as such problems are described in greater detail in Exhibit A hereto. + + 1.17 "Problem Report" means a report by Converge of a Problem with respect to a Supported Product, which report indicates the Problem and identifies its Severity Level. + + 1.18 "Professional Services" means services performed or to be performed by VNE hereunder with respect to the development of Converge-Requested Enhancements, the implementation of or migration to new Products or Enhancements, customer installations of the Products, training with respect to use or operation of the Products or any Enhancements (including training designed to enable Converge to provide Level 1 support for the Supported Products), consulting services with respect to the Products or their hardware or other application and system software environments, or any other services described in Section 3 below. + + 2 + + 1.19 "Quarterly Allocation" means the quarterly allocation of Services being made available to Converge hereunder, as specified in greater detail in Exhibit C attached hereto. + + 1.20 "Renewal Term" is defined in Section 9.1 below. + + 1.21 "Services" means all of the services provided or to be provided by VNE under this Agreement, including, without limitation, the Maintenance and Support Services and the Professional Services. + + 1.22 "Source Code" means computer programming code in human readable, high-level language format, together with all related documentation (including programmers' notes and annotations, logic flows, etc.). + + 1.23 "Support Day" means Monday through Friday, excluding VNE-recognized holidays. + + 1.24 "Support Hours" means the hours between 8:00 a.m., Eastern Time, and 5:00 p.m., Eastern Time on Support Days. + + 1.25 "Support Request" means a question, inquiry or other support request by Converge with respect to a Deployed Product, but excluding any Problem Report or request for an Enhancement. Should any question, inquiry or other support request by Converge include or encompass a Problem Report, the portion of such question, inquiry or other support request that is a Problem Report shall be treated as such and the remainder shall be treated as a Support Request. + + 1.26 "Supported Products" means the Deployed Products, as such term is defined under the Subscription License Agreement, but excluding the Structured Negotiations Product, as such term is defined under the Subscription License Agreement. + + 1.27 "Term" means the Initial Term and any Renewal Term(s). + + 1.28 "Vert-General Release Enhancement" shall have the meaning ascribed to such term under the Subscription License Agreement. + + 1.29 "VNE Service Personnel" means the VNE personnel primarily responsible for performing the Services hereunder, including any such personnel identified on Exhibit C attached hereto. + + 2. Maintenance and Support Services. + + 2.1 General. The Maintenance and Support Services provided by VNE hereunder shall encompass responding to Problem Reports and Support Requests, and providing Converge with Maintenance Updates, as more particularly described in, and subject to the provisions of, this Agreement. + + 2.2 Converge Support Personnel. Only authorized personnel designated by Converge ("Converge Support Personnel") may communicate Problem Reports and Support + + 3 + +Requests to VNE. The number of Converge Support Personnel will not exceed seven persons without VNE's prior approval. The initial Converge Support Personnel shall be identified to VNE in writing within 10 business days following the Effective Date. Converge may change the Converge Support Personnel on written notice to VNE; provided, however, that Converge shall use reasonable efforts not to change the Converge Support Personnel more frequently than once every 30 days. All replacement personnel shall be required to participate in Support Training as described in Section 3.3 below. Converge Support Personnel will be the "single point of contact" for the Maintenance and Support Services provided by VNE under this Section 2. + + 2.3 Method of Reporting. All Problem Reports and Support Requests shall be communicated by the Converge Support Personnel to VNE as follows: (1) via telephone at 1-877-249-1423, or such other telephone number(s) as VNE may provide to Converge from time to time, or (2) via electronic mail to support.solutions@verticalnet.com, or such other e-mail address(es) as VNE may provide to Converge from time to time, or (3) in person to VNE Service Personnel (if any) on Converge premises at the time; provided, however, that the Converge Support Personnel shall communicate all Severity Level 1 and Severity Level 2 + + + + + +Problems to VNE via method (1) or method (3) above. Converge shall classify all Problems reported to VNE according to the Problem Severity Levels listed in Exhibit A attached hereto. + + 2.4 Support Responsibilities. Converge and the Converge Support Personnel shall be responsible for providing "Level 1" (help desk-type support) support to both Converge personnel (internal help desk) and Converge users (external help desk), for each of the Supported Products on which VNE has provided training as set forth in Section 3.3 below. Subject to the provisions of this Section 2, VNE shall be responsible for providing "Level 2" (responding to technical inquiries) and "Level 3" (code fixes) support for such Supported Products. In the case of Supported Products for which Converge is providing Level 1 support, Converge shall not escalate Problem Reports or Support Requests to VNE until such Problem Reports or Support Requests have been reasonably escalated through the "Level 1" support procedures of Converge. In addition, Converge shall conduct reasonable problem identification and isolation activities to determine whether or not a given problem relates to the Products (i.e., whether a "Problem" as defined exists). Converge shall not escalate Problem Reports or Support Requests to VNE prior to conducting such activities or if Converge has determined that the Problem Report or Support Request does not relate to the Supported Products. + + 2.5 Additional Information for Problems. With respect to each Problem reported to VNE, Converge shall provide, at the time the Problem Report is communicated to VNE and to the extent known to or reasonably ascertainable by Converge, information that will enable VNE to reproduce (in as complete a step-by-step manner as is reasonably possible), or verify the existence of the Problem, plus any additional information regarding the Problem that Converge believes will assist in the diagnosis thereof and response thereto. The parties shall reasonably cooperate to obtain and provide to VNE any additional information about the reported Problem that may be relevant to diagnosing and responding thereto. In the event that Converge is unable to make a determination based on the problem identification and isolation activities described in Section 2.4 or reproduce, or provide the information necessary for VNE to diagnose or reproduce, any Problem, Converge may request VNE's assistance in performing identification and isolation or reproducing the Problem and/or generating or documenting such information. + + 4 + + 2.6 Response to Problem Reports. VNE shall use its reasonable best efforts to provide Converge with an initial response to and status reports for all Problems reported by Converge, and to resolve all Problems identified, in accordance with the provisions of Exhibit B attached hereto; provided, however, that VNE shall have no further obligation to respond to or attempt to diagnose or resolve a Problem once it is determined not to be attributable to Errors. VNE will review all Problem Requests submitted by Converge at the Problem Severity Level indicated by Converge unless another Problem Severity Level is clearly warranted. In the event of a reasonable uncertainty, the parties will assume a higher Severity Level for a Problem until they have sufficient information to make a determination that a lower Severity Level is warranted. If, at Converge's request, VNE responds to a Problem at a Severity Level that is higher than what proves to be the actual Severity Level of the Problem, or if VNE's review of a Problem reported by Converge establishes that the Problem was not due to an Error, Converge shall pay or reimburse VNE for all incremental fees and expenses reasonably incurred by VNE in performing such activities. + + 2.7 Response to Support Requests. VNE shall respond to all Support Requests submitted by Converge within a reasonable period of time, taking into consideration the nature of the Support Request, its impact on Converge's business operations and any Problem Reports or other Support Requests VNE is responding to at such time. + + 2.8 Tracking Procedures. VNE will maintain procedures and systems designed to ensure that Problem Reports and Support Requests submitted by Converge are properly logged and tracked. In addition, VNE will provide to Converge a weekly status log of Problem Reports and Support Requests currently being tracked. Such report shall identify, as appropriate, each Problem Report or Support Request as submitted by Converge, the Severity Level for each identified Problem, the date and time each Problem Report or Support Request was received by VNE, an assessment of the Problem Report or Support Request and an action plan detailing the proposed method of resolution, and an estimated time schedule for delivery of any necessary Error corrections. + + 2.9 Remote Access. Converge shall provide VNE with remote access, via modem, the Internet or some other remote communications method mutually agreed-upon by the parties and subject to Converge's network security procedures and requirements, to Converge's servers on which the Supported Products are installed for the sole and limited purpose of enabling VNE to fulfill its obligation to provide Maintenance and Support Services hereunder. Converge shall be responsible for all costs associated with providing data network connectivity at the point of connectivity to Converge's data network. The parties will share equally in the cost of such connectivity between VNE's facilities and Converge's facilities (including all associated telecommunications charges). VNE shall not be responsible for any delay in providing Maintenance and Support Services under this Agreement to the extent such delay is due to Converge's adoption of unreasonable network security procedures or requirements. + + 2.10 Provision of Maintenance Updates. VNE shall provide Converge with Maintenance Updates as VNE makes them generally available to its other customers. Converge agrees to install in the recommend environments all Maintenance Updates within a reasonable time following the date they are provided by VNE, taking into consideration any testing and customization required by Converge (the parties expect that the time for such installation + + + + + + 5 + +generally will not exceed 90 days). Should Converge find one or more material deficiencies in any Maintenance Update, Converge shall promptly identify such deficiencies to VNE in reasonable detail. + + 2.11 Method of Delivery. VNE will transfer to Converge all Maintenance Updates, and any associated Documentation, by remote telecommunications from the VNE place of business, to a Converge computer located at a Converge place of business in the Commonwealth of Massachusetts, if any. If any such Maintenance Update and/or associated Documentation cannot be delivered via remote telecommunications to a Converge computer located at a Converge place of business in the Commonwealth of Massachusetts, such Maintenance Update and/or Documentation will be installed by VNE on a Converge computer located at a Converge place of business in the Commonwealth of Massachusetts, if any. Converge will not obtain title or possession of any tangible personal property, including any storage media, as a result of the delivery of any Maintenance Update or associated Documentation under this Agreement. + + 2.12 Acceptance. Each Maintenance Update will be deemed accepted by Converge upon Converge's receipt of the complete delivery thereof to a Converge computer located at a Converge place of business. + + 2.13 License Rights. The scope of Converge's license rights to all Maintenance Updates shall be as set forth in the Subscription License Agreement. Except as may be set forth in the Subscription License Agreement, Converge acknowledges and agrees that Vert has no obligation to deliver Source Code for any Maintenance Update, or to grant Converge any license to use the Source Code form of any Maintenance Update. + + 2.14 Tracking of Maintenance Updates. VNE will maintain procedures and systems designed to ensure that all Maintenance Updates are compatible with previous versions of the Supported Products and any previously provided Maintenance Updates and Enhancements. + + 2.15 Modifications by Converge. Converge may notify VNE at least 10 Business Days in advance, through the Problem reporting process above, of Converge's desire to modify any Supported Product, or the hardware and other application and system software environment for any Supported Product. Within 10 Business Days of VNE's receipt of Converge's written notice, VNE will provide Converge with any recommendations that VNE may have as to how Converge should implement the desired modification. VNE shall have no responsibility for any Problems, Errors or other issues with respect to the Supported Products that are due to Converge's failure to ask for or follow any such recommendations of VNE. + + 3. Professional Services. + + 3.1 Project Managers. Each of Converge and VNE shall appoint a Project Manager to coordinate such party's activities with respect to the Professional Services hereunder. The initial VNE Project Manager shall be Michael Decker and the initial Converge Project Manager shall be Farooq Ahmad. Either party may change its Project Manager on notice (via e-mail or in some other reasonable fashion not necessarily in accordance with the express notice + + 6 + +provisions of this Agreement) to the other party's Project Manager and Relationship Manager at any time. + + 3.2 Monthly Work Plans. As reasonably requested by either party, the Converge Project Manager and the VNE Project Manager will conduct planning meetings to determine the Professional Services that VNE will provide to Converge for each month during the Term. In connection with each such planning meeting, the Converge Project Manager and the VNE Project Manager will jointly prepare a written work summary or plan (each, a "Work Plan") indicating the Professional Services to be performed by VNE for such month. The Work Plan shall identify those Professional Services that the Project Managers anticipate can be performed without causing VNE to materially exceed (on a pro-rata monthly basis for the given quarter, unless otherwise mutually agreed upon in writing) the Quarterly Allocation for any quarter during the Term. All Professional Services that the Project Managers anticipate will cause VNE to materially exceed (on a pro-rata monthly basis for the given quarter, unless otherwise mutually agreed upon in writing) the Quarterly Allocation shall either be separately identified in the applicable Work Plan or performed by VNE pursuant to a Statement of Work prepared in accordance with the following provisions of this Section 3. The Converge Project Manager and the VNE Project Manager may amend any Work Plan upon their written agreement at any time. + + 3.3 Training to Converge. VNE will provide, and the Work Plans will encompass as appropriate, VNE providing reasonable training and available training materials to enable Converge to provide Level 1 support for the Supported Products ("Support Training"). Support Training will include both introductory training reasonably in advance of when new Supported Products are put into production by Converge and periodic refreshers as appropriate when Maintenance Updates and Vert-General Release Enhancements are released. Support Training will be provided at mutually agreed locations and times. + + 3.4 Environment and Deployment Process. As part of the Professional Services provided by VNE, VNE will create a document entitled, "Environment and Deployment Process." This document will detail the recommended Supported Product environments and the build and deployment process for the Supported Products. + + + + + +VNE agrees to complete a draft of this document for Converge's review within 30 days following the Effective Date. Converge agrees to review and provide final comments on this draft document within 30 days after receipt thereof. Both parties shall use commercially reasonable efforts to reach a mutual agreement on the document and execute the final document within 90 days following the Effective Date. + + 3.5 Initial Request and Response. If Converge desires that VNE perform any Professional Services that the Project Managers anticipate would cause VNE to materially exceed (on a pro-rata monthly basis for the given quarter, unless otherwise mutually agreed upon in writing) the Quarterly Allocation, Converge shall submit to VNE a written request for such Professional Services, which request shall detail the Professional Services being requested in reasonable detail. Within 45 days after VNE's receipt of Converge's request for VNE to perform any such Professional Services, VNE shall furnish to Converge a preliminary statement of work (including proposed pricing, which shall take into account any portion of such work that will be covered by a portion of the Quarterly Allocation) under which VNE would be willing to perform such Professional Services for Converge (each, a "Proposed SOW"). VNE may respond to + + 7 + +separate requests for Professional Services in a single Proposed SOW; provided, however, that the Proposed SOW will itemize the foregoing information separately for each of the requested Professional Services. + + 3.6 Finalization of Proposed SOWs. If Converge desires to have VNE provide any Professional Services under the terms of a Proposed SOW, Converge shall notify VNE thereof in writing. Should Converge wish to negotiate the terms of the Proposed SOW, the Converge Project Manager and the VNE Project Manager shall promptly and in good faith discuss and agree upon what revisions, if any, should be made to the Proposed SOW. Should the Converge Project Manager and the VNE Project Manager reach mutual agreement on such revisions, if any, the Proposed SOW shall be finalized and executed by both parties in writing (each, a "Final SOW"). + + 3.7 Change Orders. Either party may request changes to a previously agreed upon Final SOW. In such event, VNE will inform Converge the impact of such changes. Changes to any Final SOW will be specified in a written change order or amendment to the Final SOW. Neither party shall be bound by any change order or amendment to a Final SOW unless and until such change order or amendment has been executed by both parties in writing. + + 3.8 Implementation. VNE will use commercially reasonable efforts to perform all Professional Services covered by a Work Plan or Final SOW in accordance with the schedule for performance of such Services set forth therein (or within a reasonable time, with due regard for the consequences of delayed performance, if no such schedule is set forth). Converge will reasonably cooperate with VNE in connection with its performance of such Professional Services as specified in the corresponding Work Plan or Final SOW and as may otherwise be reasonably requested by VNE. VNE shall not be liable for any default or delay in performance of such Professional Services to the extent the same is attributable to the failure of Converge to comply in any material respect with its obligations under this Agreement or any Work Plan or Final SOW. + + 3.9 Method of Delivery. VNE will transfer to Converge all Converge-Requested Enhancements to Converge, and any associated&bbsp;Documentation, by remote telecommunications from the VNE place of business, to a Converge computer located at a Converge place of business in the Commonwealth of Massachusetts, if any. If any such Converge-Requested Enhancement and/or associated Documentation cannot be delivered via remote telecommunications to a Converge computer located at a Converge place of business in the Commonwealth of Massachusetts, such Enhancement and/or Documentation will be installed by VNE on a Converge computer located at a Converge place of business in the Commonwealth of Massachusetts, if any. Converge will not obtain title or possession of any tangible personal property, including any storage media, as a result of the delivery of any Converge-Requested Enhancement or associated Documentation under this Agreement. + + 3.10 Acceptance. Each Converge-Requested Enhancement provided to Converge under a Final SOW will be subject to acceptance testing by Converge in accordance with the provisions of its corresponding Final SOW. All other Converge-Requested Enhancements provided to Converge under this Agreement will be deemed accepted by + + 8 + +Converge upon Converge's receipt of the complete delivery thereof to a Converge computer located at a Converge place of business. + + 3.11 Ownership; License to Vert. Unless otherwise expressly stated in an applicable Work Plan or Final SOW, Vert shall be the sole and exclusive owner of all Converge-Requested Enhancements, but excluding any portions thereof that are or were developed independently by Converge or its Affiliates ("Converge-Independent Materials") and any portions thereof that are Converge Brand Features or Third-Party Materials. Except as the parties may otherwise agree in writing, Converge, to the extent it has the legal right to do so, hereby grants to Vert an irrevocable, perpetual, world-wide, non-exclusive right and license to use, load, store, transmit, execute, copy, market, distribute, in any medium or distribution technology whatsoever, known or unknown, display, perform and sublicense the Converge-Independent Materials and the Third-Party Materials, in both Source Code and Object Code formats, and to make unlimited + + + + + +instantiations thereof, for any and all purposes. As used herein, "Converge Brand Features" means all logos, trademarks, service marks and trade names, brand names and other brand features of Converge and its licensors (other than Vert). As used herein, "Third-Party Materials" means any products or materials of third parties (including Converge's licensors and third-party contractors) to be incorporated into or provided as part of any Converge-Requested Enhancement. Converge shall use reasonable efforts to identify to VNE all relevant Third-Party Materials in the applicable Work Plan or Final SOW. + + 3.12 License Rights of Converge. The scope of Converge's license rights to each Converge-Requested Enhancement shall be as set forth in the Subscription License Agreement and, if relevant, the applicable Final SOW. Except as may be set forth in the Subscription License Agreement or as the parties may otherwise expressly agree in writing, Converge acknowledges and agrees that Vert has no obligation to deliver Source Code for any Converge-Requested Enhancement, or to grant Converge any license to use the Source Code form of any Converge-Requested Enhancement. + + 3.13 Installation and Configuration. Converge shall be responsible for installing and configuring any Converge-Requested Enhancements provided by VNE hereunder. Converge may request, and VNE will provide, reasonable assistance to Converge in its efforts to install and configure such Enhancements as part of the Professional Services provided hereunder. + + 3.14 Third-Party Technology. Except as the parties may otherwise expressly agree in writing, Converge shall be responsible for paying for and, with VNE's assistance, securing license rights to any third-party technology required for the provision or use of any Converge-Requested Enhancements provided under this Agreement. Vert shall use reasonable efforts to identify to Converge all required license rights to third-party technology in the applicable Work Plan or Final SOW. + + 3.15 Unforseen Costs and Expenses. Notwithstanding anything to the contrary in this Section 3, neither party shall be obligated to incur any costs or expenses in connection with the performance or implementation of a Work Plan or Final SOW unless such Work Plan or Final SOW reasonably contemplates that such party shall be responsible for such costs or expenses, or such party otherwise agrees in writing to incur such costs and expenses. + + 9 + + 3.16 Escalation Procedures. Should the Converge Project Manager and the VNE Project Manager be unable to reach agreement on any matter within the scope of their discretion under this Section 3, the matter shall be escalated to the parties' respective Relationship Managers for discussion. In addition, should either party believe that the other party has failed to fulfill its obligations under Section 2 or this Section 3 above, the matter shall be escalated to the parties' respective Relationship Managers for discussion. The initial VNE Relationship Manager shall be William Swank and the initial Converge Relationship Manager shall be Francesco DeMarchis. Either party may change its Relationship Manager on notice (via e-mail or in some other reasonable fashion not necessarily in accordance with the express notice provisions of this Agreement) to the other party's Project Manager and Relationship Manager at any time, except that the Relationship Manager always shall be at the director level or higher. + + 4. Fees and Payments. + + 4.1 Minimum Fee During Initial Term. Converge shall pay to VNE a minimum fee of Four and One-Half Million Dollars ($4,500,000) for VNE's provision of the Services during the Initial Term (the "Initial Term Minimum Fee"). Converge shall pay the Initial Term Minimum Fee to VNE in 18 equal installments of Two Hundred Fifty Thousand Dollars ($250,000) (each, a "Monthly Installment"). Converge shall pay the first such Monthly Installment to VNE on the date this Agreement is executed and delivered by both parties. Thereafter, Converge shall pay each such Monthly Installment to VNE no later than the first day of each month during the Initial Term (November 2001 and through March 2003). All such Monthly Installments are non-refundable. + + 4.2 Minimum Fee During Each Renewal Term. If the Parties mutually agree in writing to renew this Agreement pursuant to Section 9.1, the minimum fee payable by Converge to VNE during any such renewal period shall be as mutually determined by the Parties. + + 4.3 Application of Quarterly Allocation; Out-Of-Scope Services. For each quarter during the Term of this Agreement that Converge pays the applicable Monthly Installments, Converge shall be entitled to receive Services in an amount equal to the Quarterly Allocation; provided, however, that VNE shall provide all Maintenance and Support Services with respect to Problem Reports (but not with respect to Support Requests) reported during such quarter, and all Maintenance Updates released by VNE during such quarter, regardless of whether the provision of such Services would cause VNE to exceed the Quarterly Allocation for such quarter; and provided further, however, that if Converge fails to make a Monthly Installment when due (subject to the cure period in Section 9.2(c)), VNE shall not be required to provided additional Services during the remaining portion of the applicable quarter until such payment is made. Should Converge request and VNE provide any Professional Services, or any Maintenance and Support Services with respect to Support Requests, that would cause VNE to exceed the Quarterly Allocation for any quarter, then Converge shall pay VNE's then-current time charges, or such other charges as the parties may otherwise agree in any Final SOW ("Out-Of-Scope Services"), for such Out-Of-Scope Services. VNE shall use commercially reasonable efforts to inform Converge that any Professional Services requested by Converge would be Out-Of-Scope Services prior to VNE's performance of such Professional Services. + + + + + +Converge shall not be required to pay for and VNS shall not be required to perform any such Services that have not been approved in a Work Plan or Final SOW, or otherwise approved by Converge in writing. + + 10 + + 4.4 Materials Costs and Expenses. Converge will reimburse VNE for all reasonable materials costs and expenses actually incurred by VNE in providing the Services under this Agreement, including travel and related expenses; provided, however, that VNE shall bear any travel or related expenses incurred by VNE at its sole option or as may be required in connection with the correction of any Error. Notwithstanding the foregoing, if travel is required due to the unavailability of remote access (see Section 2.9), then Converge shall reimburse VNE for the reasonable costs of such travel and related expenses. Upon Converge's request, the parties shall prepare budgets of any materials costs and expenses to be incurred by VNE in its performance of any Professional Services hereunder and any costs or expenses in excess of the applicable budgeted amounts shall be subject to Converge's written approval, such approval not to be unreasonably withheld or delayed. VNE's invoices for all travel and related expenses shall be reasonably itemized and list all such expenses by category/person/trip, and be accompanied by reasonable documentation sufficient to support the deductibility by Converge of the reimbursable expense. + + 4.5 Invoicing and Payments. Converge shall pay the Monthly Installments to VNE on the dates specified in Section 4.1 and, if applicable, Section 4.2 above. All other amounts due under this Agreement will be invoiced by VNE to Converge on a monthly basis in arrears. All such invoiced amounts shall be due to VNE within 30 days following Converge's receipt of VNE's invoice. All payments will be made by Converge in U.S. dollars, without setoff, recoupment or deduction. All fees and other amounts not paid when due shall be subject to late charges of the lesser of (a) 1.5% per month of the overdue amount or (b) the maximum permitted under applicable law. + + 4.6 Taxes. The fees and other payments specified in this Agreement are exclusive of any sales, use and other taxes on consumption of goods and services ("Sales Taxes"), however designated or levied, based on this Agreement, delivery of the Services under this Agreement, or Converge's or its Affiliates' use thereof. In those jurisdictions in which VNE determines it is required to register, collect and remit Sales Taxes, VNE will separately invoice Converge for such Sales Taxes (which invoices shall be payable by Converge as set forth in Section 4.5), collect such Sales Taxes from Converge and remit such Sales Taxes to the proper taxing authority. In those jurisdictions in which VNE has determined that it does not have a collection responsibility, Converge will be required to self-assess and remit any Sales Taxes due on the purchase of taxable property and services acquired under this Agreement. Converge will retain ultimate responsibility and liability for remitting any Sales Taxes due on the purchase of any property and/or services acquired under this Agreement, including, without limitation, any interest, penalties or additions attributable to or imposed on or with respect to any such assessment excluding any taxes imposed upon the net income of either party). Subject to the express provisions of this Agreement, the parties will cooperate and use their commercially reasonable efforts to minimize or avoid, to the maximum extent allowed by law, the obligation to pay any Sales Taxes that may be levied on payments made under this Agreement or otherwise are chargeable by any applicable government authority with respect to the Services. + + 4.7 Tax Withholding. If laws, rules or regulations require withholding of any taxes imposed upon amounts payable to a party hereunder, the other party shall make such withholding payments as required and subtract such withholding payments from the amounts payable to such party. The other party shall submit reasonable proof of payment of the + + 11 + +withholding taxes to such party within 30 days after obtaining such proof. The parties agree to fully cooperate with each other, including, without limitation, in the filing of appropriate certificates of tax exemption, to ensure that any withholding payments required to be made by the other party are reduced or avoided to the fullest extent permitted by law. Converge shall be deemed to be the sole payor of payments owed to VNE under this Agreement and shall not have the right to substitute any domestic or foreign affiliate for that purpose, and if Converge reincorporates or otherwise reorganizes as a foreign person that would thereupon cause payments hereunder to VNE to become subject to withholding, then Converge shall comply with applicable laws to the extent required and shall gross up the payments otherwise owed to VNE so that VNE receives, net of withholding taxes, the amounts VNE would have received if Converge had not substituted a foreign person or had remained a domestic person. + + 5. Warranty. + + 5.1 Services Warranty. VNE warrants that the Services provided hereunder will be provided in accordance with generally-accepted industry standards applicable to the performance of services of a similar nature. In the event of any breach of the foregoing warranty, and provided that Converge reports such breach to VNE in writing within 90 days following the date of performance of the Services in question, VNE shall, as its sole obligation and Converge's sole and exclusive remedy, promptly repair, replace or re-perform the Services in question, without additional cost to Converge, so as to correct the warranty non-compliance as promptly as practicable (within 30 days to the extent technically feasible). + + 5.2 Disclaimer. WITH THE EXCEPTION OF THE EXPRESS WARRANTY PROVIDED + + + + + +IN SECTION 5.1 AND AS THE PARTIES MAY OTHERWISE AGREE IN ANY WORK PLAN, VNI AND ALL AFFILIATES OF VNI SPECIFICALLY DISCLAIM ANY AND ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, IMPLIED WARRANTIES OF MERCHANTABILITY, ACCURACY, FITNESS FOR A PARTICULAR PURPOSE, QUIET ENJOYMENT AND NON-INFRINGEMENT OF THIRD PARTY RIGHTS RELATING TO ANY SERVICES, MAINTENANCE UPDATES OR ENHANCEMENTS PROVIDED OR TO BE PROVIDED HEREUNDER. + + 6. Limitation of Liability. + + 6.1 Disclaimer of Liability for Certain Damages. + + 6.1.1 Consequential and Similar Damages. TO THE MAXIMUM EXTENT PERMITTED BY LAW, IN NO EVENT SHALL EITHER PARTY BE LIABLE OR OBLIGATED IN ANY MANNER FOR ANY SPECIAL, INCIDENTAL, EXEMPLARY OR CONSEQUENTIAL DAMAGES OF ANY KIND ARISING OUT OF OR RELATING TO THIS AGREEMENT (INCLUDING, BUT NOT LIMITED TO, LOST PROFITS, REVENUES OR BUSINESS OPPORTUNITIES) HOWEVER CAUSED AND REGARDLESS OF THE FORM OF ACTION, WHETHER IN CONTRACT, TORT, NEGLIGENCE, STRICT PRODUCT LIABILITY, OR OTHERWISE, EVEN IF THE PARTY HAS BEEN INFORMED OF THE POSSIBILITY OF ANY SUCH DAMAGES IN ADVANCE. The foregoing limitation + + 12 + +is independent of any exclusive remedies available to either party under this Agreement, including any failure of such remedies. + + 6.1.2 Loss of Data, Usage, Etc. VERT DOES NOT GUARANTEE THAT ANY MAINTENANCE UPDATES OR ENHANCEMENTS WILL OPERATE WITHOUT ERROR OR INTERRUPTION AND VERT SHALL NOT BE RESPONSIBLE FOR ANY DAMAGES ASSOCIATED WITH LOSS OF DATA OR INTERRUPTION OR LOSS OF USE OF ANY PRODUCTS, MAINTENANCE UPDATES OR ENHANCEMENTS RESULTING THEREFROM. + + 6.2 Sole Remedy. IF A CLAIM OR CAUSE OF ACTION IS ATTRIBUTABLE TO ANY MAINTENANCE UPDATE, ENHANCEMENT OR SERVICES PROVIDED OR TO BE PROVIDED UNDER THIS AGREEMENT, THE REMEDIES SET FORTH IN THIS AGREEMENT, TO THE EXCLUSION OF THE REMEDIES SET FORTH IN THE SUBSCRIPTION LICENSE AGREEMENT, SHALL CONSTITUTE THE SOLE AND EXCLUSIVE REMEDIES AVAILABLE TO A PARTY FOR SUCH CLAIM OR CAUSE OF ACTION. IF A CLAIM OR CAUSE OF ACTION IS ATTRIBUTABLE TO A PRODUCT OR ANY SERVICES PROVIDED UNDER THE SUBSCRIPTION LICENSE AGREEMENT, THE REMEDIES SET FORTH IN THE SUBSCRIPTION LICENSE AGREEMENT, TO THE EXCLUSION OF THE REMEDIES SET FORTH IN THIS AGREEMENT, SHALL CONSTITUTE THE SOLE AND EXCLUSIVE REMEDIES AVAILABLE TO A PARTY FOR SUCH CLAIM OR CAUSE OF ACTION. For the sake of clarity, the parties acknowledge that claims concerning Vert's ownership of and Converge's license rights to any Maintenance Updates, Enhancements or associated Documentation shall be deemed to have arisen under the Subscription License Agreement, that claims with respect to VNE's delivery of any Vert-General Release Enhancements or associated Documentation, or the performance or non-performance of any Vert-General Release Enhancements, shall be deemed to have arisen under the Subscription License Agreement, and that claims with respect to VNE's delivery of any Maintenance Updates, Converge-Requested Enhancements or associated Documentation, or the performance or non-performance of any Maintenance Updates or Converge-Requested Enhancements, shall be deemed to have arisen under this Agreement. NO LIABILITY SHALL EXTEND UNDER THIS AGREEMENT TO ANY THIRD PARTY (INCLUDING, BUT NOT LIMITED TO, ANY AFFILIATES OF VNI OTHER THAN VNE, OR THEIR LICENSORS) IF NOT INVOLVED IN THE DEVELOPMENT OR DELIVERY OF ANY MAINTENANCE UPDATE, ENHANCEMENT OR SERVICES HEREUNDER. + + 6.3 Maximum Aggregate Liability. TO THE MAXIMUM EXTENT PERMITTED BY LAW, THE MAXIMUM LIABILITY OF EACH PARTY TO THE OTHER OR TO ANY THIRD PARTY FOR DAMAGES, IF ANY, RELATING TO THIS AGREEMENT OR ANY MAINTENANCE UPDATE, ENHANCEMENT OR SERVICES PROVIDED OR TO BE PROVIDED HEREUNDER, WHETHER FOR BREACH OF CONTRACT OR WARRANTY, STRICT LIABILITY, NEGLIGENCE OR OTHER TORT, STRICT PRODUCT LIABILITY, THE FAILURE OF ANY LIMITED REMEDY TO ACHIEVE ITS ESSENTIAL PURPOSE, OR OTHERWISE, SHALL NOT EXCEED (I) WITH RESPECT TO ANY ENHANCEMENT PROVIDED HEREUNDER, THE AMOUNTS PAID BY CONVERGE TO VERT FOR SUCH ENHANCEMENT, AND (II) WITH RESPECT TO ANY MAINTENANCE AND SUPPORT SERVICES, THE AMOUNTS PAID BY + + 13 + +CONVERGE TO VERT FOR SUCH MAINTENANCE AND SUPPORT SERVICES DURING THE THREE MONTH PERIOD IMMEDIATELY PRECEDING THE DATE ON WHICH THE CLAIM OR CAUSE OF ACTION FOR ANY SUCH DAMAGES FIRST AROSE. THE FOREGOING LIMITATIONS ON EACH PARTY'S AGGREGATE LIABILITY TO THE OTHER SHALL BE IN ADDITION TO ANY FEES AND OTHER AMOUNTS DUE AND OWING UNDER SECTION 4. FOR PURPOSES OF THIS SECTION 6.3, THE TERM "PARTY" MEANS CONVERGE ON THE ONE HAND, AND VNI AND VNE COLLECTIVELY ON THE OTHER HAND, SO THAT AS TO VNI AND VNE THE LIMITATIONS IN THIS SECTION 6.3 ARE COLLECTIVE LIMITATIONS AND NOT SEPARATE LIMITATIONS FOR EACH OF VNI AND VNE. + + 6.4 Exceptions. THE LIMITATIONS OF LIABILITY CONTAINED IN THIS SECTION 6 SHALL NOT APPLY WITH RESPECT TO (A) ANY CLAIMS OF BODILY INJURY OR DAMAGE TO TANGIBLE PERSONAL PROPERTY RESULTING FROM WILLFUL MISCONDUCT OR GROSS NEGLIGENCE, (B) ANY BREACH OF THE CONFIDENTIALITY OBLIGATIONS IN SECTION 7, OR (C) LIABILITY FOR PAYMENT OF INTEREST ADDED BY A COURT OF LAW OR AN ARBITRATION PANEL TO A JUDGMENT ENTERED IN ANY ACTION OR PROCEEDING UNDER THIS AGREEMENT. + + 6.5 Duty to Mitigate. Each party will have a duty to take reasonable steps to mitigate damages for which the other party is responsible. + + 6.6 Acknowledgement. Each of the parties acknowledge that the disclaimers and limitations set forth in this Section 6 are an essential element of this Agreement between the parties and that the parties would not have entered into this Agreement without such disclaimers and limitations. + + + + + + 7. Confidential Information. + + 7.1 Definition of Confidential Information. "Confidential Information" as used in this Agreement shall mean any and all proprietary or non-public information of a party whether in oral, written or other tangible form that the party disclosing the information (the "Discloser") designates as being confidential or which, under the circumstances surrounding disclosure, the receiving party (the "Recipient") knows or has reason to know should be treated as confidential. + + 7.2 Nondisclosure and Nonuse Obligations. Each of the parties, as Recipient, agrees that such Recipient will not use, disseminate, or in any way disclose any Confidential Information of the other party, as Discloser, to any person, firm or business, except to the extent necessary for the performance of such party's obligations or the enjoyment of such party's rights and benefits hereunder, and for any other purpose such Discloser may hereafter authorize in writing. Each of the parties, as Recipient, agrees that such Recipient shall treat all Confidential Information of the other party, as Discloser, with the same degree of care as such Recipient accords to such Recipient's own Confidential Information, but in no case less than reasonable care. Each of the parties, as Recipient, agrees&bbsp;that such Recipient shall disclose Confidential Information of the other party, as Discloser, only to those of such Recipient's employees who need to know such information, and such Recipient certifies that such Recipient employees have + + 14 + +previously agreed, either as a condition to employment or in order to obtain the Confidential Information of the Discloser, to be bound by terms and conditions substantially similar to those terms and conditions applicable to such Recipient under this Agreement. Each of the parties, as Recipient, shall immediately give notice to the other party, as Discloser, of any unauthorized use or disclosure of Discloser's Confidential Information. Each of the parties, as Recipient, agrees to assist the other party, as Discloser, in remedying any such unauthorized use or disclosure of Discloser's Confidential Information. + + 7.3 Exclusions from Nondisclosure and Nonuse Obligations. The obligations under this Section 7 of each of the parties, as Recipient, with respect to any portion of the Confidential Information of the other party, as Discloser, shall not apply to such portion that Recipient can document: (a) was in the public domain at or subsequent to the time such portion was communicated to Recipient by Discloser through no fault of Recipient; (b) was rightfully in Recipient's possession free of any obligation of confidence at or subsequent to the time such portion was communicated to Recipient by Discloser; (c) was developed by employees or agents of Recipient independently of and without reference to any information communicated to Recipient by Discloser; or (d) was communicated by Discloser to an unaffiliated third party free of any obligation of confidence. A disclosure by either of the parties, as Recipient, of Confidential Information of the other party, as Discloser, either (i) in response to a valid order by a court or other governmental body; (ii) as otherwise required by law; or (iii) as necessary to establish the rights of either party under this Agreement, shall not be considered to be a breach of this Agreement by Recipient or a waiver of confidentiality for other purposes; provided, however, that Recipient shall provide prompt prior written notice thereof to Discloser to enable Discloser to seek a protective order or otherwise prevent such disclosure. + + 7.4 Confidentiality of this Agreement. The parties hereto agree to keep the terms of this Agreement confidential and not to divulge any part thereof to any third party except: (a) with the prior written consent of the other party; (b) to any governmental body having jurisdiction to request and to read the same; (c) as otherwise may be required by law or legal process; or (d) to legal counsel representing either party. Notwithstanding the foregoing, no disclosure of this Agreement shall be made pursuant to clauses (b) or (c) of the foregoing sentence without the disclosing party first giving the other party reasonable notice prior to the intended disclosure so as to allow the other party sufficient time to seek a protective order or otherwise assure the confidentiality of this Agreement as that other party shall deem appropriate. Each party agrees not to file this Agreement as an exhibit to its SEC filings without first redacting and requesting confidential treatment for any information reasonably considered by the other party to be confidential. Such other party shall inform the first party of any such information it wishes to redact and request confidential treatment for within five Business Days following the date such other party is requested to do so in writing. Nothing herein shall prohibit either party from complying with applicable securities or other laws, rules or regulations. + + 8. Non-Solicitation. During the Term of this Agreement and for a period of one year thereafter, Converge and Vert each agree not to directly or indirectly solicit, encourage or cause others to solicit or encourage any employees or individual independent contractors of the other party to terminate their employment or independent contracting relationship with the other party and become an employee or independent contractor of the soliciting party or its Affiliate. This provision does not prohibit a party's responding to unsolicited employment inquiries and/or any + + 15 + +indirect solicitations and other employment activities (e.g., job postings, advertising of positions) that are not specifically targeted at any particular individual. + + + + + + 9. Term; Events of Default; and Termination. + + 9.1 Term. The initial period of this Agreement (the "Initial Term") shall commence upon the Effective Date and continue until March 31, 2003. Thereafter, this Agreement shall renew only upon the mutual written agreement of the parties for up to three additional renewal terms of one year each (each, a "Renewal Term"). Notwithstanding the foregoing provisions of this Section 9.1, in the event any Services or other obligations of either party (including payment obligations) with respect to any Final Work Plan have not been completed or discharged as of the date on which this Agreement would otherwise expire, this Agreement shall remain in effect solely with respect to such Work Plan until such Services or other obligations have been completed or discharged. + + 9.2 Events of Default. The occurrence of any one or more of the following acts, events or occurrences shall constitute an "Event of Default" under this Agreement: (a) either party becomes insolvent, files for bankruptcy or is subjected to involuntary bankruptcy proceedings that are not dismissed within 60 days, or makes a general assignment for the benefit of its creditors; (b) either party breaches any material provision of this Agreement and the result is the non-breaching party experiencing a substantial deprivation of the benefits to which the non-breaching party is entitled under this Agreement, which material breach is not cured by the breaching party within 30 days after the breaching party's receipt of the non-breaching party's written notice specifying the breach in detail; provided, however, that if the breach is of such a nature that it may be cured, but it may not reasonably be cured within such 30-day period, the non-breaching party may not terminate this Agreement unless such breach is not cured by the breaching party on or before the 60th day after the breaching party's receipt of the non-breaching party's notice of breach if breaching party has commenced substantial efforts to cure the breach within the initial 30-day period and has continued in good faith to work to cure the breach as soon as reasonably practicable thereafter, or (c) Converge fails to pay when due any amounts payable under Section 4 and fails to cure such breach within 3 Business Days after VNE gives Converge written notice specifying the breach. + + 9.3 Termination. Immediately upon the occurrence of an Event of Default by either party, the other party shall have the right, but not the obligation, to terminate this Agreement, exercisable by such other party giving written notice thereof to first party within 10 Business Days after the occurrence of such Event of Default. In addition, this Agreement shall automatically terminate upon any termination of the Subscription License Agreement as permitted thereunder. + + 9.4 Effect of Termination. Upon the expiration or termination of this Agreement, each party shall erase, destroy or return to the other party all copies of the Confidential Information of or provided by such party under this Agreement and, upon such other party's written request, shall certify its compliance with this Section 9.4 to the other party in writing. Notwithstanding the foregoing provisions of this Section 9.4, with respect to and for so long as any licenses granted to Converge respecting Deployed Products and/or Source Code under the Subscription License Agreement survive the expiration or termination of this + + 16 + +Agreement, Converge shall not be required to erase, destroy or return any Confidential Information of Vert or its Affiliates respecting such Deployed Products and/or Source Code. + + 9.5 Effect of Vert Non-Renewal Election. If VNE or VNI is unwilling to renew this Agreement on its existing terms for any Renewal Term, a "Vert Non-Renewal Election" shall be deemed to have occurred. In the event of a Vert-Non-Renewal Election, in addition to any rights or remedies that may be available to Converge under the Subscription License Agreement, the provisions of Section 8 above shall cease to apply with respect to Converge's solicitation or encouragement of any of the VNE Service Personnel to terminate their employment or independent contracting relationship with VNE and become an employee or independent contractor of Converge or its Affiliate. + + 9.6 Effect of Converge Non-Renewal Election. If VNE or VNI is willing to renew this Agreement on its existing terms for any Renewal Term, but Converge elects not to renew this Agreement for any for any reason, a "Converge Non-Renewal Election" shall be deemed to have occurred. In the event of a Converge-Non-Renewal Election, the rights or remedies that may be available to Converge under the Subscription License Agreement, if any, shall apply. + + 9.7 Survival. Sections 3.11, 3.12, 4.1, 4.2, 4.6, 4.7, 5.2, 6, 7, 8, 9.4, 9.5, 9.6, 9.7 and 10 shall survive any expiration or termination of this Agreement. In addition, all payment obligations under Section 5 that pertain to Services provided or otherwise accrue prior to the effective date of expiration or termination of this Agreement shall survive such expiration or termination. + + 10. General. + + 10.1 Notices. All notices permitted or required under this Agreement ("Notices") shall be in writing and shall be delivered as follows with notice deemed given as indicated (a) by personal delivery when delivered personally; (b) by overnight courier upon written verification of receipt; or (c) by certified or registered mail, return receipt requested, five days after deposit in the mail. All Notices shall be properly addressed as follows, or to such other addresses as may be specified in a Notice given hereunder: + +If to VNI or VNE: with a copy to: + + + + + +Attn: General Counsel Attn: Michael L. Pillion VerticalNet, Inc. Morgan, Lewis & Bockius, LLP 507 Prudential Road 1701 Market Street Horsham, Pennsylvania 19044 Philadelphia, Pennsylvania 19103 + + 17 + +If to Converge: + +Attn: General Counsel Converge, Inc. Four Technology Drive Peabody, MA 01960 + + 10.2 Force Majeure. Except for the obligation to pay monies due, neither party shall be liable hereunder by reason of any failure or delay in the performance of its obligations hereunder (except for the payment of money) on account of strikes, riots, insurrection, fires, flood, storm, explosions, acts of God, war, governmental action, labor conditions, earthquakes, or any other cause which is beyond the control of such party. + + 10.3 Waiver. An effective waiver under this Agreement must be in writing signed by the party waiving its right. The failure of either party to require performance by the other party of any provision hereof shall not affect the full right to require such performance at any time thereafter; nor shall the waiver by either party of a breach of any provision hereof be taken or held to be a waiver of subsequent breaches of that or any other provision hereof. + + 10.4 Severability. In the event that any provision of this Agreement shall be unenforceable or invalid under any applicable law or be so held by applicable court decision, such unenforceability or invalidity shall not render this Agreement unenforceable or invalid as a whole, and, in such event, such provision shall be changed and interpreted so as to best accomplish the objectives of such provisions within the limits of applicable law or applicable court decisions. + + 10.5 Headings. The section headings appearing in this Agreement are inserted only as a matter of convenience and in no way define, limit, construe or describe the scope or extent of such section or in any way affect such section. + + &sbsp; 10.6 Choice of Law; Waiver of Jury Trial; Limitation of Action. This Agreement and performance under this Agreement shall be governed by the laws of the United States of America and of the Commonwealth of Pennsylvania as applied to agreements entered into and to be performed entirely within Pennsylvania between Pennsylvania residents, excluding its conflicts of law provisions. The United Nations Convention on Contracts for the International Sale of Goods is specifically excluded from application to this Agreement. The parties expressly waive any right to a jury trial regarding disputes related to this Agreement. Unless otherwise provided by local law without the possibility of contractual waiver or limitation, any legal or other action related to this Agreement must be commenced no later than two years from the date on which the cause of action arose. + + 10.7 No Agency. Nothing contained herein shall be construed as creating any agency, partnership or other form of joint enterprise between the parties or to allow either party to bind the other or incur any obligation on its behalf. + + 10.8 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which together shall constitute + + 18 + +one and the same instrument. This Agreement shall become binding when any one or more counterparts hereof, individually or taken together, bear the signatures of both parties hereto. For the purposes hereof, a facsimile copy of this Agreement, including the signature pages hereto, shall be deemed an original. + + 10.9 Assignment. A party may assign this Agreement to any Affiliate. Otherwise, neither party may assign this Agreement without the other party's prior written consent (not to be unreasonably withheld). No transfer of this Agreement by operation of law or change in Control of a party, including, without limitation, by merger, consolidation or sale or other transfer of equity interests, shall be considered an assignment for purposes of this Section 11.9. This Agreement will bind and inure to the benefit of the parties and their respective successors and permitted assigns. + + 10.10 No Third-Party Beneficiaries. Nothing in this Agreement is intended to confer benefits, rights or remedies unto any person or entity other than the parties and their successors and permitted assigns. + + 10.11 Non-Exclusive Agreement. Except as expressly stated herein, this Agreement is not exclusive as to either party, and, subject to the express provisions of this Agreement, each party will have the right to conduct any other business in which it may now or hereafter be engaged. + + 10.12 Entire Agreement. This Agreement, together with the Subscription License Agreement and the other agreements referenced therein, are the entire agreement between Vert and Converge relating to the subject matter of this Agreement. This Agreement shall supersede any prior agreement or + + + + + +understanding, whether written or oral, and any other communications between Vert and Converge relating to the subject matter of this Agreement. This Agreement may only be amended by a writing specifically referencing this Agreement, which has been signed by authorized representatives of each party. + + 19 + + IN WITNESS WHEREOF, the undersigned do hereby execute this parties have caused this Agreement to be signed by their duly authorized representatives as of the date first written above in this Agreement. + +VerticalNet, Inc. Converge, Inc. + +By:__________________________________ By:________________________________ + +_____________________________________ ___________________________________ (Print Name) (Print Name) + +Title:_______________________________ Title:_____________________________ + +VerticalNet Enterprises LLC + +By:__________________________________ + +_____________________________________ (Print Name) + +Title:_______________________________ + + 20 + + Exhibit A Severity Levels of Problems + +The following chart describes the distinctions between the different severity levels for Problems reported by Converge. + +Severity Definition Level 1 A "Severity Level 1" Problem is one where critical or central functionality of the Supported Product is unavailable and the Supported Product cannot reasonably be used, or performance of critical or central functionality of the Supported Product is severely degraded, and in either such case Converge does not have or cannot implement a reasonable workaround. The adverse impact of a Severity 1 Problem on Converge's business is severe and immediate, and requires an immediate solution. A "Severity Level 1" Problem may have one or more of the following characteristics, in each case without Converge being able to implement a reasonable workaround: + + - Data is corrupted or lost by the Supported Product, or the Supported Product returns incorrect results, and such corruption, loss or incorrect results have a material adverse impact on critical or central functionality of the Supported Product - Complete or severe lack of ability to use the critical or central functionality of the Supported Product - The Supported Product crashes repeatedly - Critical or central functionality of the Supported Product is not operational or is severely degraded - Critical or central functionality of the Supported Product fails to run to completion + +2 A "Severity Level 2" Problem is one where critical or central functionality of the Supported Product is unavailable, or performance of critical or central functionality of the Supported Product is severely degraded, but in either such case Converge can implement a reasonable workaround but such workaround does not downgrade the Problem to Severity Level 3 or 4. Use of critical or central functionality of the Supported Product can continue in a restricted fashion through use of such workaround, but the user still experiences a significant degradation of performance of such functionality. A "Severity Level 2" Problem may have one or more of the characteristics of a "Severity Level 1" Problem, but critical or central functionality of + + - the Supported Product can continue to operate in a restricted fashion through use of such workaround. + +3 A "Severity Level 3" Problem causes minimal interruption to non-central or non-important functionality. The Problem has a minor impact or is inconvenient. A "Severity Level 3" Problem may have one or more of the following characteristics: + + - Performance of the Supported Product is degraded in a non-critical manner - Performance of the Supported Product is minimally impaired + + + + + + 21 + + 4 A "Severity Level 4" Problem causes no loss of use of the Supported Product. The following would be "Severity Level 4" Problems: + + - Cosmetic problem with the Supported Product - Documentation error - Minor incorrect behavior of the Supported Product that does not impede its operation + + 22 + + Exhibit B Problem Response and Resolution Efforts + +SEVERITY RESPONSE TIME AND STATUS REPORTS RESOLUTION EFFORTS LEVEL 1 - "Initial Response" (defined - Continuous efforts (24x7) with below) within 30 minutes after best available resources to the Problem is reported to VNE provide a workaround, patch, if the Problem is reported fix or other solution for the during Support Hours. Problem as quickly and - Initial Response within two efficiently as possible, hours if the Problem is beginning as soon as reported to VNE outside of practicable after diagnosis of Support Hours, or within 30 the Problem commences. minutes following the - If a workaround, patch, fix or resumption of Support Hours, other solution is not provided whichever is sooner. within 24 hours after - Diagnosis commences as soon as diagnosis of the Problem is reasonably practicable. commences, provide Converge - Status reports every 24 hours with an assessment and action thereafter. plan detailing the proposed method of resolution and a time schedule for delivery of a correction. - Severity Level 1 requires maximum effort support until an emergency fix or bypass is developed and available for shipment to Converge. Critical situations may require customer, Converge and VNE personnel to be at their respective work locations or available on an around-the-clock basis. - Provide a final patch, fix or other solution within 24 hours that down grades the Problem to Severity Level 3 or less and that does not substantially impair performance or functionality. + + 2 - Initial Response within two - Continuous efforts during hours after the Problem is Support Hours to provide a reported to VNE if the Problem patch, fix or other solution is reported during Support for the Problem as quickly and Hours. efficiently as possible, - Initial Response within two beginning as soon as hours after the resumption of practicable after diagnosis of Support Hours if the Problem the Problem commences. is reported to VNE outside of - If a patch, fix or other Support Hours. solution is not provided - Diagnosis commences within one within 48 hours after Support Day after the Problem diagnosis of the Problem is reported to VNE. commences, provide Converge - Status reports every other with an assessment and action Support Day thereafter. plan detailing the proposed method of resolution and a time schedule for delivery of a correction. - Provide a final patch, fix or other solution within 72 hours that down grades the Problem to Severity Level 3 or less and that does not substantially impair performance or functionality. + + 3 - Initial Response by the end of - Reasonable efforts during the Support Day immediately Support Hours to provide a following the day on which the workaround, patch, fix or Problem is reported to VNE. other solution for the Problem - Diagnosis commences within two within five Support Days, + + + + + + Support Days after the Initial beginning within a reasonable Response period of time after diagnosis - Progress and status reports as of the Problem commences. appropriate thereafter, but at least weekly. + + 4 - Reasonable efforts to commence - Reasonable efforts to resolve the Problem in a + + 23 + +SEVERITY RESPONSE TIME AND STATUS REPORTS RESOLUTION EFFORTS LEVEL diagnosis of the Problem future Maintenance Update. within five Support Days after the Problem is reported to VNE. - Progress and status reports as appropriate thereafter. + +For purposes of this Exhibit B, "Initial Response" means (a) communication back to the Converge Support Personnel by the appropriate VNE personnel acknowledging receipt of the applicable Problem Report; and (b) consistent with the nature and extent of the information provided by Converge to VNE, communication by VNE to the Converge Support Personnel of VNE's initial analysis of the nature and/or cause of the Problem and suggestions for a possible temporary or interim solution to the Problem, including any interim work-around or other temporary "quick fix." + + 24 + + Exhibit C Quarterly Allocation and VNE Support Personnel + + ESTIMATED ESTIMATED ESTIMATED VERTICALNET TITLE PERCENTAGE HOURS PER NUMBER OF TOTAL TEAM MEMBER OF TIME WEEK WEEKS HOURS Stephen Project Manager 50% 20 12 240 DePalantino + +Mike Decker Support Mgr 50% 20 12 240 + +Christian Programmer Analyst 50% 20 12 240 Torstensson + +Roland Ngokila Programmer Analyst 50% 20 12 240 + +Ken Ridler Programmer Analyst 100% 40 12 480 + +Kelley Nelson Programmer Analyst 100% 40 12 480 ---- TOTAL HOURS &bbsp; 1920 ==== + +Upon notice (via e-mail or in some other reasonable fashion not necessarily in accordance with the express notice provisions of this Agreement) to and in consultation with the Converge Project Manager, VNE shall be entitled to replace (or substitute temporarily for) the VNE Service Personnel identified above. Any replacement personnel shall be reasonably qualified to perform the Services they are to perform under this Agreement, and VNE will use reasonable efforts to maintain continuity of assignment with respect to the VNE personnel assigned to provide essential Services. VNE shall use commercially reasonable efforts to limit the replacement of (or substitution for) the persons identified above during the 90 day period immediately following the Effective Date. VNE, in the reasonable discretion of the VNE Project Manager, shall make Mark Rodriguez reasonably available to perform any Maintenance and Support Services that would be materially benefited by his participation, and, notwithstanding the foregoing sentence, VNE shall be free to substitute Mark Rodriguez for any of the persons identified above for such purposes. + + 25 \ No newline at end of file diff --git a/full_contract_txt/VIOLINMEMORYINC_12_12_2012-EX-10.14-SPONSORSHIP AGREEMENT.txt b/full_contract_txt/VIOLINMEMORYINC_12_12_2012-EX-10.14-SPONSORSHIP AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..29f43fa2a220a61d2610bd4104d312453932480c --- /dev/null +++ b/full_contract_txt/VIOLINMEMORYINC_12_12_2012-EX-10.14-SPONSORSHIP AGREEMENT.txt @@ -0,0 +1,579 @@ +Exhibit 10.14 + +Confidential Treatment Requested. Confidential portions of this document have been redacted and have been separately filed with the Commission. + +SPONSORSHIP AGREEMENT + +THIS SPONSORSHIP AGREEMENT (this "Agreement") is made and entered into as of June 13, 2012 the ("Effective Date"), by and between Forty Niners SC Stadium Company LLC, a Delaware limited liability company ("Forty Niners SC") having its principal place of business at 4949 Centennial Boulevard, Santa Clara, CA 95054, and Violin Memory, Inc., a Delaware corporation ("Sponsor") having its principal place of business at 685 Clyde Avenue, Mountain View, CA 94043. For purposes of this Agreement, Forty Niners SC and Sponsor may each be referred to individually as a "Party" and may be collectively referred to as the "Parties." + +Recitals + +WHEREAS, Forty Niners SC is an affiliate of Forty Niners Football Company LLC, (the "Team"), a Delaware limited liability company that owns the National Football League franchise for the professional football team known as the San Francisco 49ers. + +WHEREAS, the Santa Clara Stadium Authority ("SCSA") is building a new stadium in Santa Clara (the "Stadium") which it will own and operate. + +WHEREAS, Forty Niners SC entered into a lease with SCSA pursuant to which Forty Niners SC will have the right to sell sponsorships at the Stadium. + +WHEREAS, Team entered into a sub-lease with Forty Niners SC and will play substantially all of its home games at the Stadium. + +WHEREAS, Sponsor desires to become a sponsor of Forty Niners SC, and Forty Niners SC desires to grant Sponsor certain sponsorship rights, under the terms and conditions set forth herein. + +NOW, THEREFORE, in consideration of the mutual promises and obligations set forth herein, the sufficiency of which is hereby acknowledged, the Parties agree as follows: + +Agreement + +1. Definitions. + +(a) "Affiliate" means a person or entity that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, a Party. The term 'control' means the possession of the power to direct the management and policies of the person or entity, whether through ownership of voting securities, by contract or otherwise. + +(b) "Agreement" has the meaning set forth in the initial paragraph. + +(c) "Contract Year" means, for the first year of this Agreement, from March 1 of the year in which the Stadium is anticipated to open through February 28 of the following year. For all years thereafter, Contract Year means the period from March 1 through February 28 (or 29). + + + + + +Confidential Treatment Requested. Confidential portions of this document have been redacted and have been separately filed with the Commission. + +(d) "Deposit" has the meaning set forth in Section 5(b) of this Agreement, + +(e) "Effective Date" has the meaning set forth in the initial paragraph. + +(f) "Forty Niners SC" has the meaning set forth in the initial paragraph. + +(g) "Indemnitee" has the meaning set forth in Section 11(a) of this Agreement. + +(h) "Lost Sponsorship Benefits" has the meaning set forth in Section 7(c) of this Agreement. + +(i) "Marks" means collectively the Team Marks and the Sponsor Marks. + +(j) "No­Signage Event" has the meaning set forth in Section 3(c) of this Agreement. + +(k) "Party" has the meaning set forth in the initial paragraph. + +(l) "Product and Services Category " means flash data storage and/or video surveillance products. + +(m) "Scheduled Opening Date" has the meaning set forth in Section 7(a) of this Agreement. + +(n) "SCSA" has the meaning set forth in the Recitals. + +(o) "Sponsor" has the meaning set forth in the initial paragraph. + +(p) "Sponsor Marks" means those trademarks and services marks set forth in Schedule 3, as may be updated by Sponsor from time to time, provided that in the event that Sponsor changes its name, the cost of effectuating the change of such Sponsor Marks shall be borne by Sponsor. + +(q) "Sponsorship Fee" has the meaning set forth in Section 5(a) of this Agreement. + +(r) "Sponsorship Rights" has the meaning set forth in Section 3(a) of this Agreement. + +(s) "Stadium" has the meaning set forth in the Recitals. + +(t) "Team" has the meaning set forth in the Recitals. + +(u) "Team Companies" shall mean, collectively, Forty Niners SC and the Team. + +(v) "Team Marks" means those trademarks and services marks set forth in Schedule 2. + + + + + +Confidential Treatment Requested. Confidential portions of this document have been redacted and have been separately filed with the Commission. + +*** Confidential material redacted and filed separately with the Commission. + +2. Term. + +(a) This Agreement shall commence on the "Effective Date" and shall continue for ten (10) Contract Years, unless terminated in accordance with the provisions of Section 6 of this Agreement or extended by renewal by written agreement of the Parties in accordance with the provisions of Section 13(o) of this Agreement (the "Term"). + +(b) Provided the Agreement is not earlier terminated in accordance with its terms, *** shall have ***, from ***, to *** for the period ***. During such period, ***. The parties agree and acknowledge that ***. Nothing herein shall prevent Team from *** at any time, provided Team does not ***. Nothing herein shall prevent Team from ***, so long as such *** is limited to stating that the ***. + +3. Grant of Sponsorship Rights. + +(a) From the commencement of the first Contract Year through the end of the Term, Forty Niners SC will provide (or cause to be provided) to Sponsor those sponsorship rights ("Sponsorship Rights") as set forth in Schedule 1 to this Agreement. + +(b) License to Use Team Marks. From the commencement of the first Contract Year through the end of the Term, Forty Niners SC grants to Sponsor a limited license during the Term to (a) advertise and promote the fact that Sponsor is an "official sponsor of the San Francisco 49ers," (b) use, reproduce and display the Team Marks in connection with advertising and promotion of Sponsor's goods and services in the Product and Services Category, and (c) promote Sponsor's sponsorship, subject to the terms and conditions of use set forth herein. + +(c) No-Signage Events. Sponsor acknowledges and agrees that SCSA (directly or through its appointed manager) may determine in its sole discretion that certain events at the Stadium (other than Team events) from time to time (each referred to herein as a "No-Signage Event"), including, but not limited to the Olympic Games, World Cup Soccer, NCAA championships, college football bowl games, college football championship games and other events, may require that signage and advertising be covered, obscured or temporarily removed during the event or may prohibit signage or advertising for any party other than a sponsor of the event itself. Sponsor agrees that it shall not be entitled to Sponsorship Rights, signage or other advertising benefits in or around the Stadium for a reasonable period before, during and after a No-Signage Event. + +(d) Does Not Cover Other Professional Sports Teams. Sponsor acknowledges and agrees that the Sponsorship Rights granted hereunder do not include any rights or benefits related to or in connection with any other professional sports team that may, from time to time, play its home games in the Stadium. SCSA and/or such other team shall have the right to grant Stadium-related rights and benefits to another sponsor within the Product and Services Category with respect to such other team's home games played at the Stadium. + +(e) Grant of License by Sponsor. In order for Forty Niners SC to fulfill its obligations hereunder, Sponsor hereby grants to Forty Niners SC a limited license during the + + + + + +Confidential Treatment Requested. Confidential portions of this document have been redacted and have been separately filed with the Commission. + +*** Confidential material redacted and filed separately with the Commission. + +Term to use, reproduce and display the Sponsor Marks in connection with advertising and promotion of Sponsor and its sponsorship. + +4. Exclusivity. + +(a) Exclusive Sponsor of the Team. Forty Niners SC acknowledges and agrees that, except as otherwise provided herein, the rights granted to Sponsor herein are exclusive to Sponsor within the Product and Services Category with respect to Forty Niners SC at the Stadium. Forty Niners SC shall not enter into a sponsorship agreement with a party with respect to the Product and Services Category, provided however, that Forty Niners SC shall be permitted to enter into a sponsorship agreement with any party that enters into a naming rights agreement with SCSA for the Stadium, provided that if SCSA enters into a naming rights agreement for the Stadium with a party that is in the Products and Services Category, Sponsor may immediately terminate this Agreement and receive a pro rated refund of any amounts paid by Sponsor for the unexpired Contract Year in which the termination occurs. + +(b) Ability to Seek Other Sponsorships. Sponsor acknowledges and agrees that, notwithstanding the grant of exclusivity set forth in this Section 4, Team shall have the right to solicit and enter into sponsorships with other parties that are not known primarily or exclusively as suppliers or providers of any product or service within the Product and Services Category. Without limiting Section 4(a) above, the Parties agree that *** are, at the Effective Date, primarily or exclusively known as suppliers or providers in the Product and Services Category. Accordingly, Forty Niners SC shall not solicit or enter into sponsorships with such Parties. + +5. Sponsorship Fee. + +(a) Fee. In exchange for the Sponsorship Rights to be provided to Sponsor during each Contract Year of this Agreement, Sponsor shall pay an annual fee (the "Sponsorship Fee") during each Contract Year of the Term. The Sponsorship Fee shall be four­million U.S. Dollars (USD $4,000,000.00) during each Contract Year. + +(b) Deposit. Sponsor shall make a non-refundable deposit upon execution of this Agreement of five-hundred-thousand U.S. dollars (USD $500,000.00) (the "Deposit"), which shall be applied against the Sponsorship Fee for the first Contract Year. + +(c) Payment Schedule. The Sponsorship Fee shall be payable in two (2) equal semiannual installments per year on or before March 1 and September 1 of each Contract Year of the Term; with the first installment due on March 1, 2014, unless Forty Niners SC notifies Sponsor that the Stadium will not open in 2014. + +(d) Taxes. The Sponsor Fee is net of any commissions. Sponsor shall be liable for all applicable taxes or charges, other than taxes or charges based solely on Forty Niners SC's net income. + +(e) Cost of Materials. Unless otherwise agreed in writing, Sponsor shall be solely responsible for all costs and expenses incurred producing (including, without limitation, design, production and installation) marketing materials, signage, and/or branding or entitlement, if any + +4 + + + + + +Confidential Treatment Requested. Confidential portions of this document have been redacted and have been separately filed with the Commission. + +*** Confidential material redacted and filed separately with the Commission. + +(e.g., advertising copy, fixed signage, build-out of entitled club space, etc.), used in connection with the Agreement. In the event Sponsor terminates the Agreement prior to expiration, Sponsor shall pay for the removal of its signage from the Stadium. + +(f) Interest on Late Payments. Any payment required to be made by Sponsor hereunder that is not paid within fourteen (14) days from the date such payment becomes due and owing shall bear interest at an annual rate of twelve percent (12%) per annum or, if lower, the maximum allowed by law from the due date to the date payment is actually made. The right of Forty Niners SC to receive interest under this Section 5(f) shall be in addition to all other rights it may have as a result of Sponsor's failure to make payments when due. + +(g) Business Back. Over the course of the Term, Forty Niners SC shall purchase, at retail (measured by the average price sold to other customers), and subject to the terms of such future purchase agreements, *** of Sponsor's products, services, and support. + +6. Termination. + +(a) Default. If either Party defaults in the performance of, or compliance with, any term or condition of this Agreement, the other Party may terminate this Agreement by written notice. Termination of this Agreement shall be effective thirty (30) days from the date of receipt of such notice, unless, within thirty (30) days after receipt of such notice, the defaulting Party has corrected the default or if such default is capable of correction, has taken timely and reasonable steps to correct and will complete such correction within another thirty (30) days. + +(b) Insolvency or Bankruptcy. If either Party files a petition in bankruptcy or is adjudicated a bankrupt, or if a petition in bankruptcy is filed against a Party, or if a Party becomes insolvent, makes an assignment for the benefit of its creditors or an arrangement pursuant to any bankruptcy law, or if a Party discontinues its business or if a receiver is appointed for it or its business, exclusivity under Section 4 shall terminate automatically and immediately and the other Party shall have the right to terminate this Agreement effective upon giving of notice to insolvent/bankrupt Party. + +(c) Harmful Behavior. Either Party shall have the right to immediately terminate this Agreement in the event the other Party, in such Party's reasonable discretion, engages in illegal, indecent, immoral, harmful or scandalous behavior or activities that may directly or indirectly damage such Party's reputation or goodwill or violates any rules or regulations of Team or the National Football League or if this would otherwise violate League policy or directive. + +(d) Stadium Naming. Sponsor shall have the right to immediately terminate this Agreement as set forth in Section 4(b) above. + +(e) Discontinuance of Use of Marks. Upon expiration or termination of this Agreement, Sponsor shall immediately cease any new uses of all Team Marks, as well as any statements of association with Forty Niners SC, the Team and the Stadium. Sponsor acknowledges that its failure to cease the use of Team Marks at the termination or expiration of the Agreement will result in immediate and irreparable harm to Team, Forty Niners SC and the + +5 + + + + + +Confidential Treatment Requested. Confidential portions of this document have been redacted and have been separately filed with the Commission. + +SCSA and to the rights of any subsequent sponsor. Sponsor agrees that in the event of such failure to cease such use, Team, Forty Niners SC, and SCSA shall be entitled to equitable relief by way of temporary and permanent injunctions and such other and further relief as any court with jurisdiction may deem just and proper. Upon expiration or termination of this Agreement, Forty Niners SC and the Team shall immediately cease any new uses of all Sponsor Marks. + +(f) Termination Is Without Prejudice to Terminating Party's Rights. Any termination of this Agreement pursuant to this Section 6 shall be without prejudice to the terminating Party's rights and remedies available at law or equity. + +7. Opening of Stadium. + +(a) Scheduled Opening Date. Sponsor acknowledges that the opening of the Stadium is scheduled for August 31, 2014 (the "Scheduled Opening Date"). During the 2014 NFL season, Team expects to play all home pre­season games at the existing facility and not in the Stadium. Sponsor further acknowledges that, due to the complexity of constructing the Stadium, the possibility exists that the opening of the Stadium could occur after the Scheduled Opening Date. In the event that the opening of the Stadium occurs after the Scheduled Opening Date, then Sponsor agrees that its sole remedies shall be as set forth in this Section 7. + +(b) Four Regular Season Home Games or Fewer. In the event that the opening of the Stadium causes the first four or fewer regular 2014 season home games to be played outside of the Stadium, then there shall be no adjustment to the benefits provided as part of the Team Sponsorship Rights and/or the Stadium Sponsorship Rights. Team acknowledges and agrees that Sponsor shall still be entitled to receive all benefits provided under the Team Sponsorship Rights for all such games played outside the Stadium. + +(c) Greater than Four Regular Season Home Games. In the event that the Stadium opens in 2014 but four or more regular 2014 season games are played outside of the Stadium, then (i) Sponsor shall be entitled to receive all benefits provided under the Sponsorship Rights for all such games played outside the Stadium and (ii) Sponsor shall be entitled to receive "make good benefits" for the value of benefits to be provided as part of the Sponsorship Rights that are not provided (the "Lost Sponsorship Benefits"). The Parties shall meet to determine make good benefits to be provided to compensate for Lost Sponsorship Benefits. In the event that the Parties are unable to agree on the make good benefits to be provided, then the make good benefits shall be determined under the arbitration process set forth in Section 12. + +(d) Stadium Opens for the 2015 or 2016 Season. In the event that the Stadium does not open during the 2014 season, then, pursuant to Section 2, the first Contract Year will not commence until the year in which the Stadium is anticipated to open. + +(e) Stadium Does Not Open. In the event that the Stadium does not open within two years of the Scheduled Opening Date, then the Sponsorship Fee shall thereafter be reduced to an amount equal to the value of the Team Sponsorship Rights only. The Parties shall negotiate in good faith to determine the value of the Team Sponsorship Rights alone. If they are unable to + +6 + + + + + +Confidential Treatment Requested. Confidential portions of this document have been redacted and have been separately filed with the Commission. + +reach an agreement on this issue, then the dispute shall be resolved under the arbitration process set forth in Section 12. + +8. Intellectual Property. + +(a) Ownership of Marks. Nothing herein contained shall be construed as an assignment or grant to Sponsor of any right, title or interest in or to the Team Marks, or in or to any copyright, design patent or trademark thereto, beyond the grant of the licensing rights on the terms herein specified. Sponsor hereby agrees that its every use of Team Marks shall inure to the benefit of Team Companies and that Sponsor shall not at any time acquire any rights in Team Marks by virtue of any use it may make of such marks. Likewise, nothing herein shall be construed as an assignment or grant to Forty Niners SC of any right, title or interest in or to the Sponsor Marks, or in or to any copyright, design patent or trademark thereto, beyond the grant of the licensing rights on the terms herein specified. Forty Niners SC hereby agrees that its every use of the Sponsor Marks shall inure to the benefit of Sponsor, and Forty Niners SC shall not at any time acquire any rights in Sponsor Marks by virtue of any use Team Companies may make of such marks. Sponsor shall have no sub-license or pass-through rights. Sponsor agrees that it will not create any trademark, logo or other intellectual property that is derived from or confusingly similar with the Team Marks or that in any way indicates or implies a connection, affiliation, endorsement, sponsorship or other relationship between Sponsor, or any product or service of Sponsor, and the Team Companies, without the prior written approval of Forty Niners SC. + +(b) Notification of Infringement. Sponsor shall notify Forty Niners SC of any infringement of the trademark rights or copyright in the Team Marks, and to assist in any action, legal or otherwise, necessary to protect such trademark rights or copyright, provided that all costs and expenses related to such an action shall be the sole responsibility of Forty Niners SC. + +(c) Use According to Specifications. Sponsor agrees to use the Team Marks only in accordance with the Team Companies' specifications and guidelines as may be provided from time to time. Sponsor's materials shall be of high standard and superior quality and shall in no manner reflect adversely on Team Companies or the Stadium. The Team Companies agree to use the Sponsor Marks only in accordance with Sponsor's specifications and guidelines as may be provided from time to time. + +(d) Approval of Use of Marks. Sponsor shall submit to the Team Companies all advertising or promotional materials related to this Agreement and involving Team Marks a minimum of ten (10) days prior to the production of such materials. Sponsor need not receive specific approval to release such advertising or promotional materials to the public. However, the Team Companies shall have the right, at any time during the ten (10) day period, to object to any advertising or promotional materials. Sponsor will not use the advertising or promotional material if the Team Companies objects to advertising or promotional materials. The Team Companies shall submit to Sponsor all materials related to this Agreement and involving Sponsor Marks a minimum of ten (10) days prior to the production of such materials. The Team Companies need not receive specific approval to release such advertising or promotional materials to the public. However, Sponsor shall have the right, at any time during the ten (10) + +7 + + + + + +Confidential Treatment Requested. Confidential portions of this document have been redacted and have been separately filed with the Commission. + +day period, to object to any advertising or promotional materials. The Team Companies will not use the advertising or promotional material if Sponsor objects to advertising or promotional materials. + +(e) Players and Coaches. With the exception of certain group player licensing rights made available to the Sponsor by the Team Companies pursuant to the Team's rights under the NFL Collective Bargaining Agreement, Sponsor acknowledges that this Agreement does not grant it any rights with respect to the name, likeness, signature or other attributes of any player, coach, or other employee of the Team. Sponsor shall be responsible for securing whatever rights may be required for the use of such names, likenesses, signatures or other attributes and may only do so with the prior written consent of the Team Companies. Sponsor represents that it will not exercise the rights granted in this Agreement in any manner that will imply Sponsor has obtained any such rights without separate written authorization from the, appropriate player, coach or employee. + +(f) No Contests Without Approval. Unless otherwise indicated in this Agreement, Sponsor has no right to run contests, sweepstakes, or promotions in connection with Team Marks or the Agreement or for the award of invitations, tickets or other benefits acquired by Sponsor under the Agreement. In the event the Team Companies grant Sponsor the right to run a contest, sweepstakes or promotion, then Sponsor shall comply with all applicable federal, state and local laws, rules, regulations or orders applicable to any such activities and hereby indemnifies the Team Companies and SCSA from any failure to so comply. + +9. Confidentiality. The Parties shall each keep confidential all provisions of this Agreement and (unless required by law or judicial process after making reasonable efforts to resist disclosure, including without limitation he requirements of any securities exchange), shall not disclose any of same to any third party (other than the NFL, the Parties' respective lenders or potential lenders, and the agents, counsel,­ and other representatives of NFL, the Parties, and such lenders) without first obtaining the prior written consent of the other Party. The provisions of this Section 9 shall survive the termination or expiration of this Agreement for any reason Warranties and Representations. + +(a) By Forty Niners SC. Forty Niners SC represents and warrants to Sponsor the following: + +(i) Forty Niners SC is a limited liability company in good standing under the laws of the State of Delaware and is duly authorized to transact business in the State of California, with full power and authority to enter into and fully perform its obligations under this Agreement. The execution and delivery of this Agreement on behalf of Forty Niners SC has been duly authorized, and no consent or approval of any other person or entity is required for execution of and performance by Forty Niners SC of this Agreement. + +(ii) Forty Niners SC is not a party to any existing agreement regarding the sponsorship or promotion of or advertising relating to the Stadium, which other agreement would conflict with the provisions of this Agreement or otherwise impair any of the rights or other benefits Sponsor is entitled to receive hereunder. + +8 + + + + + +Confidential Treatment Requested. Confidential portions of this document have been redacted and have been separately filed with the Commission. + +(iii) Forty Niners SC has not granted any rights pertaining to the subject matter of this Agreement to any party in a manner which would cause Forty Niners SC to be in default under any such agreement or which prevents Forty Niners SC from granting the rights and licenses to Sponsor under this Agreement. + +(iv) The execution, delivery and performance of this Agreement and the transactions contemplated hereby (a) are within the authority of the Team Companies, and (b) do not conflict with or result in any breach or contravention of any provision of applicable law or the constitution, bylaws or other requirements of the NFL. + +(v) There are no actions, suits, proceedings or investigations of any kind ending or threatened against the Team Companies with respect to the transactions contemplated hereby. + +(vi) The Team Companies own or otherwise have sufficient rights in and to the Team Marks to grant the rights and licenses granted herein. + +(b) By Sponsor. Sponsor represents and warrants to Forty Niners SC the following: + +(i) Sponsor is a corporation in good standing under the laws of the State of Delaware and is duly authorized to transact business in the State of California with full power and authority to enter into and fully perform its obligations under this Agreement. The execution and delivery of this Agreement on behalf of Sponsor has been duly authorized by Sponsor and, no consent or approval of any other person or entity is required for execution of and performance by Sponsor of this Agreement. + +(ii) Neither this Agreement nor anything required to be done hereunder by Sponsor violates any corporate charter, contract, or other document to which Sponsor is a party or by which it is otherwise bound. + +(iii) Sponsor has not granted any rights pertaining to the subject matter of this Agreement to any party in a manner which would cause Sponsor to be in default under any such agreement or which prevents Sponsor from entering into this Agreement. + +(iv) The execution, delivery and performance of this Agreement and the transactions contemplated hereby (a) are within the authority of Sponsor, and (b) do not conflict with or result in any breach or contravention of any provision of applicable law. + +(v) There are no actions, suits, proceedings or investigations of any kind ending or threatened against Sponsor with respect to the transactions contemplated hereby. + +(vi) Sponsor is the sole owner of all right, title and interest in and to the Sponsor Marks. + +10. Indemnification and Insurance. + + + + + +Confidential Treatment Requested. Confidential portions of this document have been redacted and have been separately filed with the Commission. + +*** Confidential material redacted and filed separately with the Commission. + +(a) Indemnification. Sponsor hereby agrees to and does (a) waive any and all suits, actions, claims, losses, demands, damages, liabilities, costs and reasonable expenses of every kind (including consequential, incidental or punitive damages, or lost profits), including court costs and reasonable attorneys' fees (collectively, "Claims") Sponsor may have now or in the future against Forty Niners SC, its Affiliates, the National Football League, SCSA and any of their respective officers, directors, employees, agents, insurers, and assigns (collectively, the "Indemnitees") for damage to or destruction of Sponsor's property, excepting only claims caused by the gross negligence or willful misconduct of an Indemnitee; (b) fully compensate Forty Niners SC, the SCSA and their respective Affiliates ("Indemnitees") for damage to or destruction of their tangible property caused by, resulting from, or arising out of Sponsor's negligence or willful misconduct under this Agreement; (b) defend, indemnify, protect and hold the Indemnitees harmless from and against any and all claims by Sponsor's officers, directors, employees, insurers, invitees, and agents for any personal injury or death or any property damage, regardless of how caused, including claims caused in whole or in part by the act, omission or negligence of an Indemnitee, excepting with respect to any Indemnitee only claims caused by the negligence or willful misconduct of such Indemnitee, to the extent of such negligence or willful misconduct, and (c) defend, indemnify, protect and hold harmless the Indemnitees against any and all claims by third parties, including, without limitation, all costs, liabilities, judgments, expenses, damages and reasonable attorneys' fees, arising out of or in connection with (i) any breach by Sponsor of any provision of the Agreement or any representation or warranty made by it therein; (ii) the use of the Sponsor Marks displayed in any advertising materials; (iii) any negligence or willful misconduct of Sponsor, its employees, servants and agents hereunder or in respect hereto; and (iv) any event for which Sponsor is credited with sponsorship or which is controlled or directed by Sponsor or anyone with whom Sponsor has contracted to control or direct such activities. ***. Promptly after the receipt by an indemnified party of notice of any claim, such indemnified party will, if a claim with respect thereto is to be made against an indemnifying party, give such indemnifying party written notice within a reasonable period of such asserted liability or commencement of such action or proceeding. The indemnifying party shall have the right, at its option, to compromise, settle or defend, at its own expense and with its own counsel, such claim; provided, however, such right shall apply only to claims for monetary damages and not to claims for injunction or other equitable relief, and provided further that no Party shall have the right to bind the other Party under the terms of a settlement without the consent of such Party. If the indemnifying party undertakes to compromise, settle or defend any such claim, it shall promptly notify the indemnified party. The indemnified party shall cooperate reasonably with the indemnifying party and its counsel, at the sole expense of the indemnifying party, in the compromise or settlement of, or defense against, any such claim. + +(b) Insurance. During the Term of this Agreement, *** shall, at no cost to the ***, maintain (or cause to be maintained) the following insurance coverage with insurers having a "Best's" rating of A­VIII or better: commercial general liability insurance, including coverage for bodily injury, property damage, personal and advertising injury, products/completed operations and contractual liability with a minimum amount of ten million US Dollars (USD $10,000,000.00) for each occurrence. *** shall furnish the other Party with a certificate of insurance evidencing such insurance coverage, which shall further contain a provision that the + + + + + +Confidential Treatment Requested. Confidential portions of this document have been redacted and have been separately filed with the Commission. + +*** Confidential material redacted and filed separately with the Commission. + +policy or policies evidenced thereby shall not be canceled or modified without thirty (30) days advance written notice. + +(c) ***. In no event shall *** be *** or ***, even if apprised of the *** of such ***. + +11. Arbitration. + +(a) Disputes Subject to Arbitration. Any dispute arising under or relating to this Agreement shall be resolved exclusively by arbitration under the Commercial Arbitration Rules of the American Arbitration Association, with the venue of any such arbitration proceeding to be in Santa Clara, California or such other location as maybe agreed by the Parties. + +(b) Arbitrator. The arbitrator for any dispute shall be selected according to the Commercial Arbitration Rules of the American Arbitration Association. + +(c) Arbitration Award. The award rendered by the arbitrator shall be final, shall identify a winning Party, and judgment may be entered upon the award in accordance with applicable law in any court having jurisdiction thereof + +(d) Expenses; Attorneys' Fees and Costs. The fees and expenses of the arbitrators shall be paid by the non-winning Party. In addition, the winning Party's reasonable attorneys' fees and costs shall be paid by the non­winning Party. + +12. Miscellaneous Provisions. + +(a) Relationship of Parties. Forty Niners SC and Sponsor shall at all times be independent contractors with respect to each other, and this Agreement shall not constitute either as the agent, partner, or legal representative of the other for any purpose whatsoever. From time to time during the Term, each Party will designate an individual to serve as the primary liaison of such Party for the day-to-day administration of this Agreement. + +(b) Third Party Beneficiaries. This Agreement does not and is not intended to confer any rights upon any person other than the Parties, except that it is expressly agreed that Team and SCSA are intended third party beneficiaries of Section 8. + +(c) Compliance. This Agreement and the rights conferred herein are subject to (i) the Constitution and Bylaws and all other rules and regulations of the NFL as they presently exist and as they may, from time to time, be amended; (ii) the terms of any existing or future contracts or agreement entered into by NFL Properties or a related entity relating to sponsorships, the telecasting or radio broadcasting of NFL games; (iii) any rule or regulation of the NFL or any agreement to which the NFL is a party which restricts the visibility of signage within the Stadium during NFL games which are televised nationally; and (iv) any and all statutes and regulations of the United States, the State of California, the County of Santa Clara or the City of Santa Clara, as may from time to time be in force. + +(d) Waiver. The failure by either Party to exercise any right, power or option given to it by this Agreement, or to insist upon strict compliance with the provisions of this Agreement, + +11 + + + + + +Confidential Treatment Requested. Confidential portions of this document have been redacted and have been separately filed with the Commission. + +*** Confidential material redacted and filed separately with the Commission. + +shall not constitute a waiver of the provisions of this Agreement with respect to any other or subsequent breach thereof, nor a waiver by such Party of its rights at any time thereafter to require exact and strict compliance with all the provisions hereof. The rights or remedies under this Agreement are cumulative to any other rights or remedies which may be granted by law. + +(e) Notice. All notices, requests, or offers required or permitted to be made under this Agreement shall be in writing and shall be deemed properly delivered on the earlier of actual receipt or three days after the date deposited in the U.S. Mail, by certified mail, return receipt requested, or by recognized overnight delivery service with signature required (e.g., FedEx, UPS) addressed as follows: If to Forty Niners SC: + + + +San Francisco 49ers Attn: Legal Affairs 4949 Centennial Blvd. Santa Clara, CA 95054 + +If to Sponsor: + + + +Violin Memory, Inc. Attn: Legal 685 Clyde Ave Mountain View, CA 94043 + +(f) Severability. Should any provision of this Agreement be determined to be invalid for any reason, such invalidity shall not affect the validity of any other provisions, which other provisions shall remain in full force and effect as if this Agreement had been executed with the invalid provision eliminated, and it is hereby declared the intention of the Parties that they would have executed the other provisions of this Agreement without including therein any such provisions which may for any reason be hereafter determined invalid. + +(g) Assignment. This Agreement and the rights granted hereunder may not be assigned, sold, transferred, pledged or exchanged by Sponsor by operation of law or otherwise without the prior written consent of Forty Niners SC, which consent shall be in Forty Niners SC's sole discretion; provided, however, that Forty Niners SC shall consent to an assignment to any entity that acquires Sponsor (or a substantial portion of Sponsor's assets) via merger, acquisition or other similar transaction so long as (i) such entity's sponsorship would not cause Forty Niners SC to breach any existing agreement, (ii) Sponsor is not in default under this Agreements, and (iii) such sponsorship shall not otherwise cause a breach under this Agreement. ***. Sponsor shall have no right to assign any right granted hereunder to use Team Marks, or any other Sponsorship Rights granted hereunder, to any third party, except as otherwise explicitly set forth herein. The rights and obligations of Forty Niners SC under this Agreement may be assigned by Forty Niners SC without the consent of Sponsor so long as the assignment shall be the assignment of Team's rights and obligations hereunder (i) as collateral security for financing arrangements, (ii) to any Affiliate or successor entity, or (iii) to any purchaser of Team's interest in its NFL franchise. The Agreement and all of the terms and provisions hereof will be binding upon and will inure to the benefit of the Parties hereto and their respective successors and permitted assigns, upon proper assignment where required. + +12 + + + + + +Confidential Treatment Requested. Confidential portions of this document have been redacted and have been separately filed with the Commission. + +(h) Force Majeure. Neither Party shall be liable for failure to comply with any of the terms or conditions of this Agreement when such failure to comply has been caused by fire, war, insurrection, labor disturbances, work stoppages, terrorism, government restrictions, natural disasters, weather, or acts of God beyond the reasonable control of the Parties, provided the Party so affected gives prompt notice to the other. In the event of a suspension or any obligation by reason of this Section 13(h) which extends beyond one-hundred-and-eighty (180) days, this Agreement shall be tolled. + +(i) Unavailable Elements. Due to the nature of this Agreement, the rights granted may become unavailable or become impossible to provide during the Term (each an "Unavailable Element"). In such event, the Parties shall mutually and reasonably agree on a different "make good" benefit or right that has substantially the same value as the Unavailable Element(s). + +(j) Media Releases. Any media releases to be issued in connection with this Agreement must be approved by the Parties, in writing, prior to their release. + +(k) Headings. The Paragraph and Section headings in this Agreement are for convenience only and shall not be used in the interpretation nor considered part of this Agreement. + +(l) Survival. The provisions set forth in Sections 9, 11, and 12 shall survive the expiration or termination of this Agreement. + +(m) Entire Agreement and Effect. This Agreement, including all Schedules and Exhibits, constitutes the entire agreement and understanding between the Parties with respect to the subject matter hereof and supersedes all prior agreements and understandings. All representations and negotiations relative to the matters contemplated by this Agreement are merged herein, and there are no contemporaneous understandings or agreements relating to the matters set forth herein other than those incorporated herein. + +(n) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California without regard to its conflict of laws provisions. + +(o) Amendments/Modification. This Agreement may not be amended or modified except by written document signed by both Parties. + +(p) Execution In Counterpart. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. + +[Remainder of page intentionally left blank.] + + + + + +Confidential Treatment Requested. Confidential portions of this document have been redacted and have been separately filed with the Commission. + +IN WITNESS WHEREOF, the Patties have executed this Agreement, effective as of the Effective Date. VIOLIN MEMORY + +By: /s/ Dixon Doll Jr. + + Name: Dixon Doll Jr. + + Title: COO/Director + +FORTY NINERS SC STADIUM COMPANY LLC + +By: /s/ Gideon Yu + + Name: Gideon Yu + + Title: President + + + + + +Confidential Treatment Requested. Confidential portions of this document have been redacted and have been separately filed with the Commission. + +*** Confidential material redacted and filed separately with the Commission. + +SCHEDULE 1 + +SPONSORSHIP RIGHTS + +During each Contract Year: + +1. Designation. Sponsor will be permitted to use the designation of "The Official Data Storage and Video Surveillance Provider of the San Francisco 49ers." + +2. Signage. Design, production and installation of all signage or other displays or branding shall be subject to the mutual agreement of the Parties, and shall be paid for by Sponsor, as set forth in Section 5(e) of this Agreement. + +(a) Branded Areas. Sponsor shall receive exclusive branding and entitlement at the Stadium at (i) a ticketed entryway for the suite tower guests (currently referred to as "Suite Tower Gate F"); (ii) an open communal space in front of the suite tower (currently referred to as the "Suite Tower Plaza"); (iii) first floor welcome lobby of suite tower and individual suite corridors (currently referred to as the "Suite Tower Atrium"); and (iv) an on­site meeting space (currently referred to as the "Executive Briefing Center") located adjacent to the suite described below and Forty Niners SC will provide a *** credit towards buildout of the Executive Briefing Center. + +(b) Exterior Stadium Signage. Sponsor shall be permitted to display outside the stadium a three-dimensional metal lettered sign with a translucent face, internally illuminated by LED (i) in a *** space on the face of a suite tower (the "West Suite Tower Banner Sign") with the words "Violin Memory Tower" or another mutually agreed upon name; and (ii) in a *** space over a gate entryway (the "West Gate Entry Sign") with the words "Violin Memory Plaza" or another mutually agreed upon name. + +(c) Interior Stadium Signage. Sponsor shall be permitted to display in Stadium (i) a prominent digital rotational sign (one of ten founding partners), as determined by Forty Niners SC, located above each of the (a) north endzone (the "North Scoreboard Rotator") and (b) south endzone (the "South Scoreboard Rotator"); and (ii) a bold, channel­cut, high­contrast panel (one of ten founding partners) located between the 40­yard lines on the Stadium's west side (the "Suite Tower Fixed Bowl Signage"). + +(d) Digital Signage. Sponsor shall receive *** thirty-second (:30) advertisements on the Stadium 360-degree LED ribbon in Stadium at each Forty Niners home game in the Stadium. Sponsor shall also receive (i) advertising in a mutually-determined number of thirty-second (:30) units and (ii) one (1) mutually-determined co-branded feature, played on a minimum of *** high-definition monitors located in the Stadium at each Forty Niners home game. + +3. Gameday Activation. + +(a) Display Booth. Sponsor shall receive booth space for an interactive showcase in an area for pre-game fan activity (currently referred to as the "Faithful Mile") at each home game. + + + + + +Confidential Treatment Requested. Confidential portions of this document have been redacted and have been separately filed with the Commission. + +*** Confidential material redacted and filed separately with the Commission. + +(b) In-Game Fan Promotion. Sponsor and Forty Niners SC shall agree on a presenting sponsorship of a promotion for each home game each Contract Year (by way of example only, "early fan of the game" receives a coupon for food and beverage and feature them on the scoreboard). + +(c) In-Game Scoreboard Feature. Sponsor and Forty Niners SC shall agree on a presenting sponsorship of a fan-engagement or football action scoreboard feature (by way of example only, instant replays or messages to "make noise") for each home game. + +(d) Presenting Sponsorship of Regular Season Home Game. Sponsor shall be named the "presenting sponsor" of a regular season home game, and such home game shall be given a similar theme or be located in a similar part of the calendar each Contract Year (by way of example only, Veteran's Day). + +4. Media. The following media assets shall he provided, subject to annual review by the Parties, based on then-existing media and Sponsor needs: + +(a) Television. + +(i) *** shall be played during all team-controlled television broadcast of Forty Niners preseason games. + +(ii) *** shall be played in each Total Access episode per season, including during playoffs and re-airs. There shall be a minimum of twenty (20) episodes. + +(iii) *** shall be played in each Postgame Live (or similar postgame show) per season, including during playoffs and re-airs. There shall be a minimum of ***. + +(iv) *** shall be played in each "Press Pass" or similar television show episode per season, including re­airs. There shall be a minimum of ***. + +(b) Radio. The following Sponsor commercials shall be played on Team's preseason and regular season radio programming: + +(i) *** on 49ers Insider or similar shoulder programming; + +(ii) *** on pre-game radio broadcast; + +(iii) *** on game radio broadcast; + +(iv) *** on game radio broadcast ; + +(v) *** shall be entitled with Sponsor's name (by way of example only, game time and temperature, scoring summary, etc.); + +(vi) *** on local station and affiliate network; and + + + + + +Confidential Treatment Requested. Confidential portions of this document have been redacted and have been separately filed with the Commission. + +*** Confidential material redacted and filed separately with the Commission. + +(vii) *** shall be played in each game broadcast on the Team's Spanish radio network. + +(c) Print. Sponsor shall receive: + +(i) *** in each issue of the Gameday magazine (or similar program), a minimum of ten such programs per season, including playoffs; + +(ii) *** in the annual Forty Niner Yearbook; + +(iii) *** in the season ticket holder guide/handbook; and + +(iv) Sponsor's logo will appear on the front of the game ticket associated with the aforementioned presenting sponsorship of one (1) regular season home game. + +(d) Online and Social Media. Sponsor and Forty Niners SC shall develop each year a package of advertising and sponsored content on the Team's website, emails and social media (by way of example, Twitter, Facebook, and/or YouTube). + +5. Hospitality. + +(a) Luxury Suite. Subject to execution of the standard executive suite license agreement with Forty Niners SC ( Suite License Agreement"), Sponsor will receive admission tickets to *** located in the suite tower on the Stadium's west side with access to "Champions" and "Broadcast" clubs for Forty Niners preseason and regular season home games played at the Stadium with VIP parking passes and a *** season-long food and beverage credit. Sponsor shall have the opportunity to purchase the suite for the postseason at prevailing prices, as available. + +(b) 49er Home Games. Sponsor shall receive the following seating package for Forty Niners preseason and regular season home games played at the Stadium. Sponsor shall have the opportunity to purchase the same seating package for the postseason at prevailing prices, as available: + +(i) *** with access to the "West Legacy Club;" + +(ii) *** on the 100 level with access to the "Champions" and "Broadcast" clubs; + +(iii) *** on the 200 level with access to the "Loft" club; + +(c) Sponsor Trips (Pro Bowl, Road Game). Forty Niners SC shall include *** on a road game trip (particular game to be mutually agreed upon on an annual basis) or a similar event, as available. + +(c) Super Bowl. Forty Niners SC shall include ***. In the event that the Team is a participant in the Super Bowl, Sponsor shall be allowed to bring ***. Forty Niners SC shall make reasonable efforts to make available additional Super Bowl tickets for purchase, based on + +" + + + + + +Confidential Treatment Requested. Confidential portions of this document have been redacted and have been separately filed with the Commission. + +*** Confidential material redacted and filed separately with the Commission. + +availability, solely for the use, enjoyment and entertainment of Sponsor and its guests. Sponsor agrees not to solicit or accept any direct or indirect payment or income from any person or entity for the use of the tickets. + +(d) Stadium Events. Forty Niners SC shall make commercially reasonable efforts to make tickets available for purchase as requested to non- NFL events at Stadium. + +6. Additional Events and Marketing. + +(a) Database Marketing and Business to Business Opportunities. Forty Niners SC shall provide on annual basis a list of team clients, including season ticket holders, suite holders and fans, and shall permit Sponsor to direct market to such list(s) ***. + +(b) Corporate Stadium Events. Right to host at least *** at the Team's training facility and *** at the Stadium (by way of example only, conferences, holiday parties, etc.) with a mutually determined food and beverage credit, staffing credits (for planning, execution and security) and a gift for guests, with such credits dependent on the number of events held. + +(c) Team Marketing Events. Sponsor shall receive VIP invitations to marketing events throughout the year, including, annual Draft party and training camp. In addition, Sponsor shall receive a foursome invitation to an annual golf event or equivalent sponsor appreciation event. Further, Sponsor shall have the opportunity to utilize a display booth at the Draft party, Fan Fest and at one day of training camp, or equivalent events. + +(d) Appearances. + +(i) Head Coach Appearance. Forty Niners SC shall schedule *** at a time that is reasonably convenient for the Head Coach. + +(ii) Current Player Appearances. Forty Niners SC shall assist Sponsor in securing ***. Sponsors shall pay active players directly for such appearances. + +(iii) Alumni Player Appearances. Forty Niners SC shall *** alumni player appearances per year for Sponsor. + +(iv) Cheerleader Appearances. Forty Niners SC shall schedule *** Gold Rush cheerleading appearances upon reasonable, advance request for Sponsor events. + +(v) Mascot Appearances. Forty Niners SC shall schedule *** Team mascot appearances upon reasonable, advance request for Sponsor events. + +(vi) Niner Noise Appearances. Forty Niners SC shall schedule *** Niner Noise appearances upon reasonable, advance request for Sponsor events. + +(e) Merchandise Credit. Sponsor shall receive ***, worth, measured at retail price, of San Francisco 49ers merchandise upon request. Sponsor may send requests for any + +18 + + + + + +Confidential Treatment Requested. Confidential portions of this document have been redacted and have been separately filed with the Commission. + +*** Confidential material redacted and filed separately with the Commission. + +merchandise available on shop49ers.com or any successor team-affiliated retailer) to Forty Niners SC for fulfillment. + +(f) Autographed Memorabilia. Sponsor shall receive ***. Such autographs shall be signed by players who are members of the Team's active roster and Forty Niners SC shall make reasonable efforts to accommodate Sponsor's requests for specific players. + +7. Community Relations. Sponsor will receive a presenting or integrative sponsorship of *** community program (by way of example only, 49ers Academy, Habitat for Humanity build, etc.); *** foundation event (by way of example only, Pasta Bowl, Winter Fest), and *** youth football event (by way of example only, camp, awards). + +19 + + + + + +Confidential Treatment Requested. Confidential portions of this document have been redacted and have been separately filed with the Commission. + +SCHEDULE 2 + +Team MARKS + + + + + +Confidential Treatment Requested. Confidential portions of this document have been redacted and have been separately filed with the Commission. + +SCHEDULE 3 + +SPONSOR MARKS + +[Please insert logo here.] + + + + + +Confidential Treatment Requested. Confidential portions of this document have been redacted and have been separately filed with the Commission. + +*** Confidential material redacted and filed separately with the Commission. + +SCHEDULE 4 + +RENDERINGS OF SPONSORSHIP RIGHTS + +The attached renderings represent the Parties' current expectations of development of Sponsor's branded areas, as described in detail on Schedule 1. Sponsor acknowledges that all signage is subject to SCSA approvals and construction/engineering alterations. + +*** \ No newline at end of file diff --git a/full_contract_txt/VIRGINGALACTICHOLDINGS,INC_04_08_2020-EX-99.1-JOINT FILING STATEMENT.txt b/full_contract_txt/VIRGINGALACTICHOLDINGS,INC_04_08_2020-EX-99.1-JOINT FILING STATEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..66a906c2d9ae720d3459b14faefc20de287a52ff --- /dev/null +++ b/full_contract_txt/VIRGINGALACTICHOLDINGS,INC_04_08_2020-EX-99.1-JOINT FILING STATEMENT.txt @@ -0,0 +1,13 @@ +Schedule 13 G CUSIP No. 30734W208 EXHIBIT 1 JOINT FILING STATEMENT PURSUANT TO RULE 13d-1(k) + +The undersigned acknowledge and agree that the foregoing statement on this Schedule 13G is filed on behalf of each of the undersigned and that all subsequent amendments to this statement on Schedule 13G shall be filed on behalf of each of the undersigned without the necessity of filing additional joint acquisition statements. The undersigned acknowledge that each shall be responsible for the timely filing of such amendments and for the completeness and accuracy of the information concerning him or it contained herein or therein, but shall not be responsible for the completeness and accuracy of the information concerning the others, except to the extent that he or it knows or has reason to believe that such information is inaccurate. + +DATED: April 8, 2020 SCULPTOR CAPITAL LP + +By: /s/ Thomas Sipp Thomas Sipp Chief Financial Officer SCULPTOR CAPITAL HOLDING CORPORATION + +By: /s/ Thomas Sipp Thomas Sipp Chief Financial Officer SCULPTOR MANAGEMENT, INC. + +By: /s/ Thomas Sipp Thomas Sipp Chief Financial Officer SCULPTOR MASTER FUND LTD + +By: /s/ Thomas Sipp Thomas Sipp Chief Financial Officer \ No newline at end of file diff --git a/full_contract_txt/VIRTUALSCOPICS,INC_11_12_2010-EX-10.1-STRATEGIC ALLIANCE AGREEMENT.txt b/full_contract_txt/VIRTUALSCOPICS,INC_11_12_2010-EX-10.1-STRATEGIC ALLIANCE AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..dae0399fa79be3d9d00081dfc5843a7699a03bbc --- /dev/null +++ b/full_contract_txt/VIRTUALSCOPICS,INC_11_12_2010-EX-10.1-STRATEGIC ALLIANCE AGREEMENT.txt @@ -0,0 +1,169 @@ +Exhibit 10.1 + +Confidential treatment has been requested for portions of this Exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are marked by brackets with asterisks, such as [***]. A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. + +STRATEGIC ALLIANCE AGREEMENT THIS STRATEGIC ALLIANCE AGREEMENT ("Agreement"), entered into as of October 22, 2010 (the "Effective Date") by and between PPD Development, LP, a Texas limited partnership, with its principal executive offices located at 929 North Front Street, Wilmington, North Carolina 28401 ("PPD") and VirtualScopics, Inc., with an address of 500 Linden Oaks, Second Floor, Rochester, New York 14625 ("VS"). WHEREAS, PPD is a clinical research organization engaged in the business of managing clinical research programs and providing services regarding the development of pharmaceuticals, chemicals, biotechnology and other products through clinical testing; WHEREAS, VS is in the business of providing imaging services to the medical, pharmaceutical and related industries; WHEREAS, PPD and VS desire to enter into a mutually beneficial relationship with a mission to deliver a comprehensive set of clinical and medical imaging services that will enable biopharmaceutical companies to make faster, more confident decisions on the development of their compounds, creating time and cost efficiencies; and WHEREAS, the parties desire to develop, market, sell, and deliver those joint service offerings pursuant to the terms and conditions set forth herein. NOW, THEREFORE, in consideration of the promises and mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: 1. Term. The term of this Agreement shall begin on the Effective Date and shall continue for a period of two (2) years ("Initial Term") unless terminated earlier in accordance with Section 11 of this Agreement. Upon expiration of the Initial Term, unless written notice to the contrary is provided by one party to the other party at least 30 days prior to the expiration of the then-current term, this Agreement shall be renewed for additional, successive periods of one (1) year each (each a "Renewal" and together with the Initial Term, collectively, the "Term"). In connection with any Renewal, the parties shall mutually agree upon and set forth in a written amendment signed by the parties (i) any changes to the Services constituting Preferred Services and (ii) any changes to the [***], VS Preferred Pricing, percentage Discount (defined in Section 4 below) or Bookings thresholds for all such Preferred Services. Upon any expiration or termination of this Agreement, all active Work Orders issued prior to such expiration or termination shall remain subject to the terms and conditions contained herein so long as such Work Order remains active. 2. Services. PPD or any of its subsidiaries or affiliates may engage VS to perform imaging services (the "Services") for a specific sponsor's clinical research study ("Sponsor") or for a particular project. The Services may be amended, supplemented, or replaced from time to time upon mutual agreement of VS and PPD. + +[***] Represents material which has been redacted and filed separately with the Commission pursuant to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. + +1 + + + + + +3. Services Commitment. "Preferred Services" shall be defined as those imaging services included within the service offerings of VS at the time of final execution of this Agreement which are specifically provided by VS in the therapeutic areas of hematology and oncology ("Designated Therapeutic Areas") to the extent such imaging services are subject to the commitments of VS set forth in this Section 3 (the "Commitments"). "PPD Services" shall be defined as clinical research organization services regarding the management of clinical trials for the development of pharmaceuticals, chemicals, biotechnology and other products through clinical testing. Preferred Services and PPD Services shall be subject to all of the rights and obligations otherwise set forth in this Agreement. Nothing contained herein shall be construed to limit the provision of non-Preferred Services hereunder, however, such non-Preferred Services shall not be subject to the Commitments set forth in this Section 3. a. Joint Commitments (i) The parties acknowledge and agree that it is their intent and commitment to expand the Joint Solution (as defined below) to therapeutic areas beyond the Designated Therapeutic Areas. Upon mutual agreement regarding such expansion, it is the parties' further intent to make such additional Joint Solution services subject to substantially the same commitments as those set forth herein. (ii) The parties acknowledge and agree that each party has in place, or will develop, processes and procedures applicable to their performance hereunder as specified on Exhibit A ("Integration Services"). The Integration Services shall be reviewed and assessed by the parties from time to time and may be amended or updated from time to time. Exhibit A shall be used as a guide for developing integrated service offerings to meet the needs of each party's clients, as applicable (in each instance, a "Joint Solution" or collectively, the "Joint Solution"). (iii) Where either party determines that an opportunity exists and is appropriate for the offering of the Joint Solution to that party's customer or client, it is the parties' mutual intent and commitment to collaborate, as needed, to propose the Joint Solution to that customer or client. Each party agrees to make a good faith effort to promote a Joint Solution for a Sponsor seeking services that could reasonably be addressed by the Joint Solution. In connection with PPD's response to a request for proposal (an "RFP") in which a Joint Solution is proposed, PPD shall be responsible for the preparation and submission of such RFP response; provided, however, that PPD shall provide VS an opportunity to review and provide approval on the Joint Solution framework, including, the scope of the Preferred Services and the pricing thereof. VS shall provide such review within two (2) business days following receipt by VS of such RFP response from PPD. Where reasonably appropriate for the proper defense of an RFP, PPD will use its reasonable efforts to provide VS an opportunity to participate in a call or bid defense meeting to the extent related to the Joint Solution. In the event PPD is awarded a clinical research study and such award includes selection by Sponsor of the Joint Solution, the parties shall mutually agree upon an applicable Work Order in accordance with Section 4 below. + +2 + + + + + +A. However, nothing contained herein shall be construed to impose upon PPD an obligation to offer the Joint Solution or to use VS for Preferred Services where: (1) Sponsor is not in agreement, (2) VS's pricing is not competitive, or (3) there have been advances in technology not offered by VS. B. Further, nothing contained herein shall enable either party to utilize the Joint Solution where the client has rejected the involvement of either party. For the avoidance of doubt, the Joint Solution shall only be utilized where both parties' services in furtherance of the Joint Solution have been retained by the client. Nonetheless, a client's selection or rejection of either party for services outside the Joint Solution shall in no way impact or impede a party from performing such services, regardless of the other party's selection or rejection by the client. C. In the event either party discovers, directly or indirectly, technology not currently in use by the other party but which could improve the Preferred Services, PPD Services or the Joint Solution, the discovering party may elect to share such technology with the other party with the intent of integration by the other party. However, to the extent such other party elects not to integrate or otherwise use such technology, the discovering party shall not be prohibited from using that technology without the other party's involvement. (iv) During the Term, VS acknowledges and agrees that, to the extent it is aware of an opportunity for clinical research services, it will refer such opportunity to PPD as soon as possible. VS shall not refer that opportunity to any other third party provider unless PPD declines to bid on such opportunity or does not offer the service in question. During the Term, PPD acknowledges and agrees that, to the extent it is aware of an opportunity for imaging services outside of the Joint Solution, it will refer such opportunity to VS as soon as possible. Unless otherwise required by a particular Sponsor, PPD shall not refer that opportunity to any other third party provider unless VS declines to bid on such opportunity or does not offer the service in question. + +3 + + + + + +(v) During the Term of this Agreement, except as otherwise permitted by this Section 3(a)(v), VS agrees that it shall not enter into the same or substantially similar Commitments with any other company or entity which performs clinical research services the same or similar to those provided by PPD or any PPD affiliate (collectively, "PPD Competitor"), nor shall VS provide preferred pricing to a PPD Competitor which is better than that provided by VS hereunder to PPD. Further, during the Term of this Agreement, PPD agrees that it shall not enter into commitments which are the same or substantially similar to the PPD commitments set forth in Section 3 with any other imaging vendor for the performance of Preferred Services. In the event that, during the Term of this Agreement, VS desires to enter into the same or substantially similar Commitments with a PPD Competitor for imaging services outside of the Designated Therapeutic Areas (defined herein or in any amendment hereto), VS shall first notify PPD regarding the same and PPD shall have a right, for a period of 45 days following receipt of such notice (the "Election Period"), to elect to include such imaging services as "Preferred Services" hereunder (the "Right of First Refusal"). In the event PPD either (i) fails to respond within the Election Period or (ii) declines to include such imaging services as "Preferred Services" prior to termination of the Election Period, then in either such event, VS shall be permitted to pursue such relationship without being considered in violation of the Commitments or this Agreement. Additionally, in the event that PPD enters into a relationship with a VS competitor which provides for commitments which are the same or substantially similar to the Commitments in a therapeutic area outside the Designated Therapeutic Areas (defined herein or in any amendment hereto), VS shall have the right, without violating the Commitments or this Agreement (including the Right of First Refusal), to enter into a relationship with a PPD Competitor which provides for commitments which are the same or substantially similar to the Commitments outside the Designated Therapeutic Areas (defined herein or in any amendment hereto). (vi) The parties shall form a Steering Committee comprised of high level personnel from each party which shall meet quarterly during the Term of this Agreement to oversee the implementation of this preferred relationship and the obligations set forth herein. The Steering Committee shall be comprised of an equal number of representatives from each party. PPD's Steering Committee representatives shall be comprised of: Director, Finance; Therapeutic Head; Relationship Manager; Executive Director, Business Development; Executive Director, Information Technology; Medical Director, Global Drug Development. VS's Steering Committee representatives shall be comprised of: Chief Financial Officer; Chief Executive Officer/President; Director of Operations and Director of Project Management. Each party shall provide prior written notice to the other party of any desired change in Steering Committee representatives. Each party's Steering Committee representatives shall hold a position of sufficient level within its respective company to be able to obtain timely resolution of disputes submitted to the Steering Committee. + +4 + + + + + +In the event a Sponsor shall raise concerns or issues with respect to any Preferred Services performed by VS in conjunction with Sponsor's selection of the Joint Solution, which Preferred Services are agreed upon by the parties in an executed Work Order, VS and PPD shall mutually evaluate such concerns or issues prior to any communication with Sponsor and shall mutually agree upon an appropriate response to Sponsor related to such concerns or issues. The resolution of any such matters shall be submitted first to the parties' respective Project Manager for the study, and in the event such persons are unable to agree upon resolution, then to each parties' Relationship Manager/Senior Director and finally to the Therapeutic Head or equivalent position. The foregoing paragraph shall not be deemed to restrict a PPD project manager from ordinary course discussions with a Sponsor in order to collect information related to the nature of any such concerns or issues raised by Sponsor. b. VS Commitment. VS agrees to continue to make investments in and improvements to those processes, technologies, techniques, software, hardware and methods which are integral or beneficial to the Services provided by VS, specifically but without limitation, to the Preferred Services. c. PPD Commitment. Where PPD is in a position to make a recommendation to Sponsor with regard to imaging services, and VS is able to provide such imaging services in accordance with Sponsor's specifications, PPD agrees to recommend VS to Sponsor. PPD also agrees to maintain, when present, VS's name and logo on all VS generated deliverables to the Sponsor. 4. Compensation. a. Each time VS is requested to perform Services, PPD shall provide VS with a work order or other similar written document mutually agreed upon by VS and PPD which shall set forth the specific services being requested, the compensation therefore and such other terms, conditions and specifications as VS and PPD may mutually agree (referred to herein as a "Work Order"). The parties acknowledge that no services shall be conducted by VS and no compensation shall be due and payable to VS without a Work Order. In the event PPD receives a change order from a Sponsor which includes changes to VS's Services as set forth in an executed Work Order or may otherwise impact the provision by VS of Services to PPD hereunder, PPD shall promptly notify VS. Thereafter, the parties shall negotiate, in good faith, for an amendment to the applicable Work Order, as appropriate, as a result of such Sponsor change order. b. VS shall be compensated for the Services in accordance with the Work Order. All pricing and rates used to establish the budget for Services set forth in each Work Order shall be in accordance with the pricing structures agreed upon by the parties herein and set forth in Exhibit B attached hereto and incorporated herein by reference. PPD acknowledges that VS customarily receives an advance payment in connection with the provision of imaging services to its clients. PPD agrees that, where appropriate and permitted by the Sponsor, PPD will provide for an advance payment mutually determined by PPD and VS (and acceptable to Sponsor) in connection with the provision of Preferred Services to such Sponsor. 5 + + + + + + c. Exhibit B sets forth the pricing and rates for Preferred Services [***]. The prices and rates set forth in Exhibit B and the Discount and Booking thresholds set forth in Exhibit C shall remain in effect, without adjustment, during the Initial Term of this Agreement and may thereafter be updated to reflect changes in connection with any Renewal of this Agreement, as specified in Section 1 herein. [*** 2.5 paragraphs omitted] Upon the termination of this Agreement for any reason, VS shall no longer have any obligation to provide PPD with any Discount with respect to Preferred Services nor shall VS be required to offer VS Preferred Pricing [***]. The parties acknowledge and agree that the VS Preferred Pricing [***] shall apply to, and remain in effect for, all active Work Orders issued hereunder, regardless of the expiration or termination of this Agreement, as well as for any timeline extensions to an active Work Order, provided that in the case of a timeline extension, the parties may mutually agree to apply an inflation rate for the extension period. In the event a Work Order shall be amended in any respect (including with respect to the scope of the Preferred Services, the timing for the delivery thereof, or otherwise), the VS Preferred Pricing [***] applicable to any Preferred Services included in such amendment and the Discount shall be the VS Preferred Pricing [***] and the Discount in effect on the date of the original Work Order. The parties further acknowledge and agree that VS Preferred Pricing [***] shall be applicable to any agreed upon expansion of the Preferred Services. With respect to any Services provided to PPD hereunder, PPD shall charge each Sponsor the actual invoiced amounts charged by VS to PPD for such Services without any mark-up or administrative or other fee, unless VS has agreed otherwise in writing in the applicable Work Order. d. Additionally, PPD shall reimburse VS for all reasonable expenses incurred in the course of performing the Services which are set forth in the Work Order. VS shall maintain a complete accounting of all expenses incurred and shall include such accounting with VS's invoice submitted to PPD. Expenses incurred must be invoiced separately and must include an expense report along with original receipts for such expenses. e. VS shall submit monthly invoices to PPD detailing its activities and fees in accordance with Section 5 of this Agreement. Notwithstanding the foregoing, invoices must be submitted to PPD within thirty (30) days of performing the Service or incurring the expense. PPD shall have no obligation to issue payment to VS for Services performed or expenses incurred which were not invoiced to PPD in accordance with this Agreement. f. VS acknowledges and agrees that where VS's Services relate to a specific Sponsor's clinical research study, all payments under a Work Order are pass through payments from Sponsor and PPD shall not have any payment obligations until such payments are received from Sponsor. PPD shall use all reasonable diligence to obtain timely payment from Sponsor in order to make payment to VS within 45 days following the date of invoice receipt. In furtherance thereof, PPD shall ensure that Sponsor is invoiced no later than ten (10) days following PPD's receipt of VS's invoice, assuming such invoice was provided to PPD by VS in accordance herewith and provided that Sponsor's invoice requirements do not preclude the same. PPD shall ensure that VS is aware of any such Sponsor restrictions as soon as possible. Further, PPD shall ensure that payment is made to VS either by wire transfer or PPD check in accordance with PPD's applicable payment processes no later than ten (10) days following PPD's receipt of applicable funds from Sponsor; provided, however, that in the event such payment occurs more than 45 days following the date of PPD's receipt of VS' invoice, such payment shall be made by wire transfer. Notwithstanding the foregoing, where a Sponsor fails to issue payment to PPD, affecting PPD's ability to pay VS, the parties shall communicate with the other to jointly pursue communication with the Sponsor to address the non­payment. + +[***] Represents material which has been redacted and filed separately with the Commission pursuant to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. + +6 + + + + + +g. Where PPD and Sponsor have agreed upon and captured in a fully executed contract any bonus/penalty or other similar, milestone based incentive provisions, and PPD's ability to meet the terms of such provisions will be impacted by VS's Services, PPD and VS may mutually agree, case by case, to flow through to the applicable Work Order all or agreed upon portions of such bonuses, penalties or incentives. 5. Invoices and Billing Account Number. PPD shall assign a billing account number ("Purchase Order Number") to VS for the Services in each Work Order. All VS invoices must reference the Purchase Order Number, Service fees, any PPD pre-approved expenses incurred by VS, the remittance address, and the total amount of compensation owed to VS. These invoices must be sent to the following address: PPD, 929 North Front Street, Wilmington, NC 28401, Attention: Accounts Payable. 6. Independent Contractor. VS shall perform all Services under this Agreement as an independent contractor and not as an employee, partner or agent of PPD. As such, VS shall be solely responsible for the payment of all taxes, payroll deductions and similar items associated with compensation for its services under this Agreement as may be required by applicable law. VS acknowledges that as an independent contractor it will not be entitled to insurance or other benefits made available to employees of PPD. 7. Additional Personnel. VS shall have the authority to utilize a third party vendor as may be required to perform the Services ("Subcontractors"); provided, however, that: a. Subcontractors must be approved in advance by PPD, such approval not to be unreasonably withheld, conditioned or delayed. b . VS shall be responsible for all taxes, payroll deductions and similar items which may result from the retention of such Subcontractors to assist in the performance of VS's obligations under this Agreement. c. Compensation for the services of said Subcontractor shall be paid to VS by PPD on a pass-through basis and at no profit to VS. d. Any such Subcontractor and its employees or other personnel shall be bound by the terms and conditions of this Agreement with respect to representations and warranties, privacy, confidential information, intellectual property, indemnification, debarment, record keeping and audit (see Sections 8, 9, 10, 12, 14 and 15), which provisions shall be incorporated into a written agreement between VS and such Subcontractor. e. Notwithstanding the foregoing, VS shall remain responsible for the actions of all of the Subcontractors retained by VS. + +7 + + + + + +8. Representation and Warranties. VS represents and warrants that it shall utilize independent discretion and judgment in discharging its responsibilities in a timely, professional and workmanlike manner in accordance with internationally accepted standards, and shall, at all times: (i) use individuals of suitable training and skill to perform its duties and responsibilities under this Agreement, if applicable; (ii) be in possession of all the necessary facilities, resources and personnel required to perform its duties and responsibilities under this Agreement; and (iii) comply with all applicable laws, rules, regulations and guidelines. Further, VS represents and warrants that it has all of the necessary licenses, permits and/or registrations to perform the Services in accordance with the terms and conditions of this Agreement and that during the Term of this Agreement, all such licenses, permits and/or registrations are and shall remain current and in good standing. [*** 1 paragraph omitted] 9. Confidential Information. It is understood and agreed that any and all information which may be made available to, learned by or generated by either party during the Term of this Agreement, including without limitation, information relating to the other party's businesses, its affiliates or the Sponsor, Sponsor's protocol, and this Agreement (collectively, "Confidential Information"), is to be treated as strictly confidential (the party disclosing such Confidential Information, the "Disclosing Party" and the party receiving such Confidential Information, the "Receiving Party", with the understanding that either term may include, as applicable, an affiliate of either party). Confidential Information shall be used solely in connection with performance hereunder or as otherwise may be necessary for a party to fulfill its obligations to a customer or client and shall not to be published or disclosed to any third parties other than the Receiving Party's employees on a strict need­to­know basis and provided that such employee is under a similar written and enforceable obligation to keep such information strictly confidential. Further, nothing contained herein shall prevent PPD from disclosing VS Confidential Information to PPD's customers and clients solely to the extent directly related to the provision of Services to such customer or client. The nondisclosure obligations set forth in this Section 9 shall not apply to any portion of Confidential Information (i) which is, or subsequently may, become within the knowledge of the general public other than as a result of a breach of this Agreement by the Receiving Party; (ii) which is known to the Receiving Party on a non-confidential basis at the time of receipt thereof from the Disclosing Party; (iii) which may subsequently be rightfully obtained from a third party not bound by an obligation of confidentiality to the Disclosing Party, or (iv) which is required by any law, rule, regulation, order, decision, decree, subpoena or other judicial, administrative or legal process to be disclosed, provided that the Disclosing Party receives prior written notice of such disclosure and that the Receiving Party takes all reasonable and lawful actions to obtain confidential treatment for such disclosure and, if possible, to minimize the extent of such disclosure. Receiving Party shall take reasonable care of all Confidential Information entrusted to it by or on behalf of the Disclosing Party or Sponsor, and shall return such materials to the Disclosing Party or Sponsor (as the case may be) immediately upon expiration or termination of this Agreement. Both parties agree to handle all information containing personal data in accordance with all applicable privacy laws, rules, and regulations. + +[***] Represents material which has been redacted and filed separately with the Commission pursuant to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. + +8 + + + + + +10. Intellectual Property. Nothing contained herein, nor the delivery of any information to either party hereunder, shall be deemed to grant the other party a right or license under any patent or patent application or to any know-how, technology, invention or other intellectual property of the other party or of the Sponsor. All inventions, patents, know-how, trademarks, copyrights, information, data, software, methodologies, writings and other property in any form whatsoever, which are provided to either party and which were owned or controlled by the providing party ("Originator") shall remain the sole property of the Originator. The parties' ownership rights in any inventions, patents, trademarks, copyrights, software, methodologies, writings and other property in any form whatsoever that results out of the development of a Joint Solution shall be addressed by the parties by separate written agreement which may include, an applicable Work Order and/or an amendment to this Agreement ("Intellectual Property Amendment") . Unless otherwise addressed in an Intellectual Property Amendment, VS hereby assigns to PPD (or Sponsor as the case may be) all rights that VS may have in any invention, technology, know-how or other intellectual property which is developed with use of Confidential Information provided to VS by PPD. Additionally, VS shall assist PPD (or Sponsor), at PPD's (or Sponsor's) sole cost and expense, in obtaining or extending protection therefor. Unless otherwise addressed in an Intellectual Property Amendment, PPD hereby assigns to VS all rights that PPD may have in any invention, technology, know-how or other intellectual property which is developed with use of Confidential Information provided to PPD by VS. Additionally, PPD shall assist VS, at the sole cost and expense of VS, in obtaining or extending protection therefor. 11. Termination. Either party may terminate this Agreement, without cause, upon ninety (90) days prior written notice to the other party, provided, however, that all outstanding Work Orders shall continue to be governed by the terms and conditions hereof. Either party may terminate this Agreement, or a relevant Work Order, immediately, upon the occurrence of any of the following for cause events: (a) either party's material breach of the commitments set forth in Section 3; (b) either party commences a voluntary proceeding under any bankruptcy, insolvency or other similar law or an involuntary case or proceeding is commenced against a party under any bankruptcy, insolvency or other similar law; (c) significant audit findings are identified by the other party, a Sponsor, or an applicable regulatory authority; or (d) significant operational deficiencies that are not resolved in accordance with the Steering Committee determinations following escalation. PPD shall further be permitted to terminate this Agreement or a relevant Work Order, immediately, for cause, upon the occurrence of any of the following: (a) VS's failure to meet the agreed upon timelines, provided that such failure is due to circumstances within VS's reasonable control; (b) VS's failure to provide pricing which is reasonably competitive; (c) a change of ownership equal to fifty percent (50%) or more in the outstanding voting securities of VS; (d) the acquisition of a number of VS's outstanding voting securities by a PPD Competitor that would require disclosure by such PPD Competitor pursuant to Rule 13d-1 of the Securities Exchange Act of 1934 (a "Significant Ownership Position"); (e) a change in any VS Key Leadership Position. In the event Sponsor, with or without cause, terminates, or requests that PPD terminate, VS's involvement in a project, PPD shall have the right to immediately terminate the Work Order to which such project relates. Additionally, in the event the services requested of PPD by Sponsor are cancelled or put on hold or the services agreement between PPD and Sponsor is terminated, PPD may terminate any relevant Work Order immediately upon notice to VS. In the event any Work Order is terminated, PPD shall pay VS for all Services performed in accordance with the Work Order through the date of termination plus any agreed upon costs necessary to close-out the Work Order (which costs shall be documented in a Work Order amendment if not included in the Work Order) and any non-cancelable expenses incurred prior to the termination of such Work Order, provided VS makes all reasonable attempts to mitigate such non-cancelable expenses. + +9 + + + + + +12. Indemnification. VS shall indemnify, defend and hold harmless PPD, its affiliates, directors, officers and employees thereof for any and all damages, costs, expenses and other liabilities, including reasonable attorney's fees and court costs, incurred by any such party as a result of any claim, action or proceeding by a third party (a "Third Party Claim") arising from VS's negligence, intentional misconduct, or breach of this Agreement. PPD shall indemnify, defend and hold harmless VS, its directors, officers and employees thereof for any and all damages, costs, expenses and other liabilities, including reasonable attorney's fees and court costs, incurred by any such party as a result of any Third Party Claim arising from PPD's negligence, intentional misconduct, or breach of this Agreement. Either indemnified party shall give the indemnifying party prompt notice of any Third Party Claim for which indemnification is sought hereunder. The indemnifying party shall have the right to control the defense and settlement of such Third Party Claim, provided the indemnifying party shall act reasonably and in good faith with respect to all matters relating to the settlement or disposition of the claim, and the indemnified party shall reasonably cooperate in the investigation, defense and settlement of such claim. The indemnified party shall have the right to participate in, but not control, the defense and settlement of a claim and to employ separate legal counsel of its own choice; provided, however, that such employment shall be at the indemnified party's own expense, unless (i) the employment thereof has been specifically authorized by the indemnifying party, or (ii) the indemnifying party has failed to assume the defense and employ counsel (in which case the indemnified party shall control the defense and settlement of such claim). 13. Limitation of Liability. EXCEPT WITH REGARD TO A PARTY'S BREACH OF SECTION 9, GROSS NEGLIGENCE, WILLFUL MISCONDUCT AND INDEMNIFICATION OBLIGATIONS RELATED TO THIRD PARTY CLAIMS PURSUANT TO SECTION 12, EACH PARTY'S ENTIRE LIABILITY UNDER THIS AGREEMENT WILL IN NO EVENT EXCEED THREE TIMES (3X) THE TOTAL VALUE OF THE WORK ORDER UNDER WHICH THE CLAIM AROSE. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS AGREEMENT, NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR INCIDENTAL, INDIRECT, CONSEQUENTIAL OR SPECIAL DAMAGES OR FOR ANY DAMAGES ARISING OUT OF OR IN CONNECTION WITH ANY LOSS OF PROFIT, INTERRUPTION OF SERVICE OR LOSS OF BUSINESS OR ANTICIPATORY PROFITS, EVEN IF A PARTY OR ITS AFFILIATES HAVE BEEN APPRISED OF THE LIKELIHOOD OF SUCH DAMAGES OCCURRING, IN EACH CASE ARISING IN CONNECTION WITH ANY DEFAULT OR BREACH OF OBLIGATIONS UNDER THIS AGREEMENT OR ANY ATTACHMENTS HERETO. IN THE EVENT OF A BREACH OR DEFAULT BY VS UNDER THIS AGREEMENT OR ANY WORK ORDER, VS AGREES, AT PPD'S OPTION, TO EITHER REPEAT THE SERVICES AT ISSUE OR REFUND THE PORTION OF THE CONSIDERATION ATTRIBUTABLE THERETO. + +10 + + + + + +THE WARRANTIES PROVIDED IN SECTION 8 AND ANY WORK ORDER ARE IN LIEU OF ALL OTHER CONDITIONS OR WARRANTIES, EXPRESS OR IMPLIED, WHETHER ARISING BY STATUTE, COURSE OF DEALING OR PERFORMANCE, CUSTOM, USAGE IN THE TRADE OR PROFESSION OR OTHERWISE, INCLUDING BUT NOT LIMITED TO, MERCHANTABILITY, AND FITNESS FOR A PARTICULAR PURPOSE, AND ARE IN LIEU OF ALL OTHER OBLIGATIONS RELATING TO THE QUALITY OR ADEQUACY OF THE SERVICES IMPOSED BY LAW, ALL OF WHICH ARE EXPRESSLY DISCLAIMED TO THE EXTENT PERMITTED BY APPLICABLE LAW. + +14. Debarment. VS hereby certifies that it has not been debarred, and has not been convicted of a crime which could lead to debarment, under the Generic Drug Enforcement Act of 1992. If VS or any of its employees or agents who perform Services hereunder is debarred or receives notice of an action or threat of action of debarment, VS shall immediately notify PPD. 15. Record Keeping and Audit. During the Term of this Agreement, VS shall maintain all materials and all other data obtained or generated by VS in the course of providing the Services hereunder, including all computerized records and files. VS shall cooperate with any internal reviews or audits by PPD or Sponsor (or its and their representatives) and shall make available for examination and duplication, during normal business hours and at mutually agreeable times, all documentation, data and information relating to this Agreement or any Work Order. Further, VS shall inform PPD within one (1) business day of being notified of an audit by any regulatory authority or by any Sponsor to the extent such audit relates to the Preferred Services, the Joint Solution or a Work Order hereunder. PPD or its representatives shall be permitted to be present at and directly communicate with such regulatory authority or Sponsor representatives (as the case may be) concerning any matters related to the Preferred Services, the Joint Solution or a Work Order hereunder arising in connection with such audit. To the extent permitted by the auditing entity, VS shall ensure that PPD is provided with copies of any written communications, reports and findings resulting from any inspection of VS by that regulatory authority or Sponsor to the extent related to the Preferred Services, the Joint Solution or a Work Order. To the extent any such communications, reports or findings require action by VS, VS shall include with such copies its remedial plan of action, including timelines for completion of the same. To the extent such remedial plan of action impacts the Preferred Services or Joint Solution, and, where applicable, to the extent permitted by the relevant regulatory authority, VS shall collaborate with PPD prior to developing or implementing any changes to the Preferred Services or Joint Solution as a result of the audit findings. 16. Insurance. VS represents and warrants that it has and will maintain during the Term of this Agreement and, additionally, where applicable, during the term of any active Work Order, and for a period of two (2) years following expiration or termination of either, insurance in the types and limits generally accepted in the industry. Upon request, VS shall provide PPD with a copy of its certificate of insurance. 17. Governing Law. This Agreement shall be construed in accordance with the laws of the State of Delaware without regard to its conflict of laws provisions. 18. Assignment. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their successors and assigns. Neither party shall have the right to assign this Agreement or any Work Order or to assign any rights thereunder without the prior written consent of the other party. Notwithstanding the foregoing, PPD may assign a Work Order to an affiliate or to Sponsor upon written notice to VS. In the event PPD assigns a Work Order to a Sponsor, VS agrees to release and forever discharge PPD from any and all claims that may arise out of the relevant Work Order after the effective date of such assignment. Unless otherwise agreed in writing by VS, PPD shall not be released from any liability or obligation under this Agreement upon assignment of any Work Order to an affiliate of PPD. VS may subcontract all or a portion of the Services to be provided hereunder in accordance with Section 7 above. Any unauthorized attempt to assign or delegate any portion of this Agreement or any Work Order shall be void. + +11 + + + + + +19. Publicity. Except as otherwise specifically set forth herein, neither party shall use the name, insignia, symbol, trademark, trade name, logo, logotype, or any abbreviation or adaptation thereof, of the other party or any affiliate of the other party, in any publication, press release, promotional material or other form of publicity, nor will either party use the same as verbal endorsement of its services, without the prior written approval of the other party in each instance. Further, VS shall be similarly restricted as it pertains to Sponsor and any Sponsor affiliate. The restrictions imposed by this Section shall not prohibit the parties from making any disclosure identifying the other party that is required by any applicable law, rule or regulation. Additionally, following final execution of this Agreement, the parties acknowledge and agree that a joint press release statement regarding the parties' preferred relationship and its impact on the parties' ability to provide Services hereunder shall be prepared and mutually agreed upon prior to its release or use by either party. 20. Force Majeure. The parties shall be excused from performing their obligations under this Agreement if its performance is delayed or prevented by any event beyond such party's reasonable control, including, but not limited to, acts of God, fire, explosion, weather, disease, war, insurrection, civil strife, riots, government action, or power failure, provided that such performance shall be excused only to the extent of and during such disability. 21. Covenant Not to Interfere. Neither party will solicit for employment any employee of the other party during the active term of this Agreement and further, where applicable, the term of any active Work Order. As used in this section "solicit" means the initiation by a party or its agent or representative of a contact with any of the other party's then current employees who are performing services under this Agreement for the purpose of offering employment to such employees, but shall not include the circumstance where any such employee initiates a contact with the other party for the purpose of obtaining employment whether in response to a general advertisement of employment or where such contact is initiated by a third party who was not instructed to contact such employee by the hiring party. 22. Miscellaneous. a. By agreeing to the terms and conditions of this Agreement and performing the Services for PPD, VS is representing that it is not in violation of any terms and conditions of any agreement with any other individual or entity. b. This Agreement constitutes the entire agreement between the parties and supersedes all prior agreements, whether written or oral. This Agreement shall be construed according to its fair meaning and not strictly for or against any party. c. This Agreement may be modified only by a writing signed by the parties hereto. d. If any provision of this Agreement conflicts with the law under which this Agreement is to be construed or if any such provision is held invalid by a court, such provision shall be deemed to be restated to reflect as nearly as possible the original intentions of the parties in accordance with applicable law and the remainder of this Agreement shall remain in full force and effect. + +12 + + + + + +e. Waiver or forbearance by either party with respect to a breach of any provision of this Agreement or any applicable law shall not be deemed to constitute a waiver with respect to any subsequent breach of any provision hereof. f. Any notice required or permitted to be given hereunder by either party hereto shall be in writing and shall be deemed given on the date received if delivered personally, by recognized overnight courier, by facsimile or by electronic delivery, or five (5) days after the date postmarked if sent by registered or certified U.S. mail, return receipt requested postage prepaid, to the following address: If to PPD: PPD Development, LP 929 North Front Street Wilmington, NC 28401 Telephone: (910) 251-0081 Facsimile: (910) 343-5920 Attn.: Chief Executive Officer With a Copy to: General Counsel + +If to VS: VirtualScopics, Inc. 500 Linden Oaks, Second Floor Rochester, New York 14625 Telephone: (585) 249-6231 Facsimile: (585) 218-7350 Attn: Molly Henderson + +Either party may change its notice address and contact person by giving notice of same in the manner herein provided. g. This Agreement may be executed in one or more counterparts, each of which for all purposes shall be deemed to be an original, and all of which when taken together shall constitute but one and the same instrument. This Agreement and any amendments hereto, to the extent signed and delivered by means of a facsimile machine or by electronic mail, shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. 23. Survival. The obligations of the parties contained in Sections 4 (provided that any payments due upon termination shall be governed in accordance with Section 11), 5, 9, 10, 12, 13, 15, 19 and 23 hereof and herein shall survive termination of this Agreement or any Work Order. 24. Conflict. Any and all Services provided during the Term of this Agreement, including all Services provided pursuant to a Work Order, shall be subject to the terms and conditions contained herein. To the extent any terms contained in this Agreement conflict with a Work Order, the terms of this Agreement shall govern and control unless the Work Order specifically states otherwise. To the extent any terms contained in this Agreement or a Work Order conflict with a Purchase Order, the terms of this Agreement shall govern and control first, followed by the terms of the applicable Work Order. + +13 + + + + + +[signatures appear on following page] + +14 + + + + + +IN WITNESS WHEREOF, the parties have caused their duly authorized representatives to execute this Agreement as of the Effective Date. + +VirtualScopics, Inc. By: Name: Molly J. Henderson Title: Chief Business and Financial Officer, Sr. Vice President PPD Development, LP By: PPD GP, LLC Its General Partner By: Name: Title: + +[Signature Page to Strategic Alliance Agreement] + + + + + +Exhibit A + +Integration Services + +[*** 2 pages omitted] + +[***] Represents material which has been redacted and filed separately with the Commission pursuant to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. + + + + + +Exhibit B + +[***] Pricing + +[*** 3 pages omitted] + +[***] Represents material which has been redacted and filed separately with the Commission pursuant to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. + + + + + +Exhibit C + +Discounts and Bookings Thresholds + +The percentage Discount applicable to Bookings in any given Measurement Period shall be determined in accordance with the discount structure set forth in the table below: + +[*** .5 pages omitted] + +[***] Represents material which has been redacted and filed separately with the Commission pursuant to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. \ No newline at end of file diff --git a/full_contract_txt/VISIUMTECHNOLOGIES,INC_10_20_2004-EX-10.20-DISTRIBUTOR AGREEMENT.txt b/full_contract_txt/VISIUMTECHNOLOGIES,INC_10_20_2004-EX-10.20-DISTRIBUTOR AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..94427c07d338f03b71aa49d9744ccfa5098c634f --- /dev/null +++ b/full_contract_txt/VISIUMTECHNOLOGIES,INC_10_20_2004-EX-10.20-DISTRIBUTOR AGREEMENT.txt @@ -0,0 +1,327 @@ +DISTRIBUTOR AGREEMENT + +This Agreement is made and entered into this 7th day of April, 2003 (the "Effective Date"), by and between Wireless Links Inc, a Pennsylvania corporation having its principal place of business at 1050 Wall Street, Suite 202, Lyndhurst, New Jersey 07071 (hereinafter called "WLI"), and Jaguar Investments, Inc. and its affiliates, a Nevada corporation, having its principal place of business at 10400 Griffin Rd., Suite 101, Ft. Lauderdale, Florida 33328 (hereinafter called "Power2Ship") with reference to the following facts: + +Whereas WLI is engaged in the design and development, manufacture, importation, distribution, resale, service and support of mobile data and GPS based information products and services; + +Whereas Power2Ship is engaged in the business of collecting, processing and disseminating logistics information and providing other transportation-related products and services to shippers and carriers of freight and + +Whereas Power2Ship desires to become a distributor of certain of WLI's products and services on the terms and conditions hereinafter set forth. + +NOW, THEREFORE; in consideration of the mutual covenants and agreements hereinafter set forth, the parties hereto do hereby agree as follows: + +1. APPOINTMENT + +1.1. WLI hereby grants to Power2Ship the non-exclusive right and license to distribute certain WLI's products and services (the "Products" or "Units") and software programs ("Licensed Programs") to Power2Ship's customers (which are end users) located in North America. "Products" or "Units" in this Agreement are limited to WLI's G3001 GPSLink mobile terminal as defined in Section 1.2. "Licensed Programs" in this Agreement are limited to WLI's MidLink Middleware software and G3001 programming tools. Further, Power2Ship shall also be authorized to resell other WLI products, services and support programs subject to separate written amendments to be made by the parties to this Agreement. WLI reserves the right to add additional products and to delete obsolete or superseded products at any time during the term of this Agreement upon sixty (60) days prior written notice to Power2Ship. + +1.2. G3001 GPSLink is a fully functional device including GPS receiver with an integrated CDPD or GPRS modem including 4 dry contact alarm inputs and one contact output and a DB9 connector for serial connection to a PDA. When integrated with MidLink middleware the G3001 can integrate to any third party software application subject to specifications published from time to time by WLI and available for download from the WLI web site. + +1.3. The Products and Licensed Programs shall be sold by Power2Ship to its customers pursuant to WLI's standard warranty and software license agreements. + +1.4. Power2Ship may, at any time during the term of this Agreement, assign its rights and obligations under this Agreement to one or more of its subsidiaries in which it owns at least 50.1% of the actual equity of the subsidiary on a fully diluted basis and as long as Power2Ship remains the guarantor for the payments and terms and conditions of this Agreement (individually, a "Subsidiary"). Each Subsidiary shall thereafter have the rights and obligations of Power2Ship hereunder with respect to all terms and conditions of this agreement as if such Subsidiary had entered into this Agreement directly with WLI. + +1.5. If Power2Ship merges with another company and/or changes its name, this Agreement will survive the merger and/or name change and the new entity will assume all the rights and obligations of Power2Ship pursuant to this Agreement. + +1.6. WLI may, at any time during the term of this Agreement, assign its rights and obligations under this Agreement to any subsidiary in which it owns at least 50.1% of the equity on a fully diluted basis. + +1.7. Power2Ship acknowledges that it has already integrated the G3001 packaged with the MidLink middleware into its application tested it and found it to meet its requirements. + +2. TERM + +2.1. Unless otherwise terminated as provided herein, the initial term of this Agreement shall be three (3) years from the Effective Date and shall thereafter be automatically renewed for subsequent one (1) year periods unless either party notifies the other in writing of its election not to renew the Agreement at least one hundred twenty (120) days prior to the expiration of the then-current term. Should this Agreement be terminated by either party for any reason, the obligations of the parties to each other as set forth herein will survive any termination. + +3. PRICES + +3.1. Subject to Section 3.6 below the price of the Product, excluding the Licensed Programs, is $[*] per Unit. The total price for both of the Licensed Programs together is $[*] per month per Product ("License Fee"). The License Fee shall begin on the date the Product is shipped to a customer and shall be paid by Power2Ship to WLI by the 7th of each month for the prior month (prorated if the Unit was shipped during the prior month) and shall continue for as long as the Product is active on any wireless network. Notwithstanding the foregoing, Power2Ship is obligated to pay the License Fee to WLI for a minimum of 36 months. + + + + + +3.2. Once the monthly License Fee for a particular Unit has started, it will continue for a minimum of 36 consecutive months with the only exception being that should Power2Ship uninstall a particular Unit from one customer and install it at another customer, Power2Ship is permitted to suspend the monthly License Fee for that particular Unit for a maximum of 2 months during the life of this Agreement. This suspension of the License Fee is permitted only once per a particular Unit during the life of the Agreement (i.e., the suspension can't occur in two non-consecutive months). Units that are suspended for less than thirty consecutive days are not considered suspended. + +3.3. Once Power2Ship has paid WLI the License Fee for a minimum of 36 months for a particular Unit, Power2Ship may discontinue paying the month License Fee only if that particular Unit has been deactivated from the wireless network. If a Unit is deactivated after 36 months and subsequently is reactivated, Power2Ship must restart the payment of the License Fee for as long as that particular Unit remains active on the wireless network. + +3.4. The $[*] hardware price per Unit is based on a single order of a minimum of 1000 Units and manufacturing of a minimum 500 Units. At the time of placing the order with WLI, Power2Ship must pay the full purchase price of $[*] per Unit. The delivery time is 8-10 weeks starting with the date the payment is received by WLI. + +-------- ------- RH JS 6/7/2002 Page 1 of 9 + +3.5. To shorten the delivery time to 3-4 weeks, Power2Ship has the option to purchase all the key components for $[*] per Unit and have them stored at no charge by WLI on behalf of Power2Ship so they can be available for immediate manufacturing when Power2Ship places an order. If this option is exercised, when Power2ship places an order to authorize Units to be manufactured it will pay with the $[*] balance per Unit at the time of such order. + +3.6. Power2ship has the option to order Units in lower quantities at higher Unit prices as follows: 100 to 299 Unit at $[*]; 300 to 499 Units at $[*] and; 500 to 999 Units at $[*]. The only exception to this will be the first order of 100 Units at a Unit price of $[*] if the order is placed no later than April 4, 2003. + +3.7. The Unit prices and monthly License Fees of $[*] can't be increased by WLI under the terms of this Agreement. + +3.8. Unless otherwise stated in writing by WLI, all prices quoted shall be exclusive of state and local use, sales and property taxes. Power2Ship agrees to be responsible for any such taxes incurred as a result of its purchase of Products from WLI, unless Power2Ship shall have presented WLI with an exemption certificate. + +3.9. Power2Ship may purchase dual antennas with a " screw for the Units from WLI at the following unit prices: $[*] when purchased in quantities of 100 to 499; $[*] when purchased in quantities of 500 to 999 and; $[*] when purchased in quantities of 1000 or more. Terms of payment for the antennas are [*]% upon placing the order with WLI and the balance when the antennas are ready to be shipped to Power2Ship. A lead time of at least four weeks is required for delivery. + +3.10. Power2Ship will pay WLI 10% of any activation commissions ("Unit Commissions"), if any, it receives as a result of any Unit activated on a specific wireless network. The payment will be paid on the 7th of every month for any Unit Commissions received by Power2Ship during the previous month. Power2Ship will provide with the payment a report of the total number of activations during the month and the amount received per activation. + +3.11. All prices are FOB WLI offices in NJ. + +4. RESERVATION OF TITLE; COPYRIGHT; CONFIDENTIALITY + +4.1. Licensed Programs are provided solely in executable files. This Agreement does not provide Power2Ship with title or ownership of the Licensed Programs, but only a limited right to sub-license the Licensed Programs. The Licensed Programs are, and shall remain, the property of WLI and certain third-party licensors who have authorized WLI to incorporate their software into the Licensed Programs. + +4.2. Power2Ship acknowledges that the programs, software information, and user materials included in the Licensed Programs contain confidential information and trade secrets, which WLI has entrusted to Power2Ship in confidence to use only as expressly permitted by this Agreement. Power2Ship acknowledges that WLI claims and reserves all rights and benefits afforded under federal law in the programs, software information, and user materials included in the Licensed Programs as copyrighted works. + +4.3. The MidLink software is licensed to Power2Ship for the exclusive use with WLI's products. Power2ship commits not to connect to WLI's MidLink software using any other wireless devices and /or terminal (s) and /or GPS devices other than WLI branded products. + +4.4. Power2Ship shall protect the programs, software information, and user materials included in the Licensed Programs as confidential information and trade secrets. Power2Ship shall not, at any time, disclose such confidential information and trade secrets to any other person, firm, organization, or employee that does not (consistent with Power2Ship's right of use hereunder) + + + + + +need to obtain access to the Licensed Programs. Power2Ship shall devote its best efforts to ensure that all Power2Ship's personnel and all other persons afforded access to the Licensed Programs by Power2Ship protect the Licensed Programs as trade secrets and confidential information and refrain from any use or disclosure in any manner not expressly permitted by this Agreement. These restrictions shall not apply to information (1) generally known to the public or obtainable from public sources; (2) readily apparent from the keyboard operation, visual display, or output reports of the Licensed Programs; (3) previously in the possession of Power2Ship or subsequently developed or acquired without reliance on the Licensed Programs; or (4) approved by WLI for release without restriction. + +4.5. Restrictions on Use of Licensed Programs and Products. The programs, software information and user materials included in the Licensed Programs and Products may not be decomposed, reverse engineered, reprinted, transcribed, extracted or reproduced, in whole or in part, without the prior written consent of WLI. Power2Ship shall not in any way modify or alter the Licensed Programs without the prior written consent of WLI. + +4.6. Survival of Obligations. Power2Ship's obligations under Section 4 of this Agreement shall survive the termination of this Agreement. + +4.7. Specific Performance and Injunctive Relief. Power2Ship agrees and acknowledges that, in the event of any breach directly or indirectly by Power2Ship of any provision of this Section 4, monetary damages will not afford WLI an adequate remedy, and irreparable harm may be presumed. Accordingly, WLI shall be entitled to receive injunctive relief from a court of competent jurisdiction for any such breach by Power2Ship. + +4.8. Confidentiality. Power2Ship acknowledges that the Licensed Programs and all copies thereof are proprietary, confidential and a trade secret of WLI and the exclusive title shall remain with WLI. All applicable rights to copyrights, patents, trademarks, trade names, logos and identifying slogans and other intellectual property rights in the products are the exclusive property of WLI and Power2Ship shall not contest such ownership. Power2Ship is committing directly or indirectly not to copy and/or not to reverse engineer any of WLI's software and/or hardware products. Power2Ship shall be responsible for any breach of this Section by its employees, agents, subcontractors or consultants. WLI acknowledges that the conceptual functionality of its Unit is in the public domain and this paragraph does not cover the Unit's actual functionality. But this Section 4.8 shall apply to the proprietary WLI implementation and technology. + +5. ORDER PROCEDURE AND MANDATORY REPORTS BY POWER2SHIP + +5.1. Power2Ship shall place individual written purchase orders for Products from time to time during the term of this Agreement. Each purchase order placed by Power2Ship shall contain the following minimum information: (i) identification of each Product ordered by model number, quantity and price; (ii) shipping instructions and destinations; and (iii) requested delivery date for each Product. Power2Ship will pay for shipping cost from WLI offices in NJ to any destination. + +-------- ------- RH JS Page 2 + +5.2. Any Units shipped by WLI directly to a customer of Power2ship as per Power2Ship's instruction is considered activated at the date of the shipment and the $[*] monthly License Fee will start as of that date . + +5.3. Once an order is placed by Power2Ship, such order can't be cancelled and delivery dates for Units can't be rescheduled. + +5.4. When Products are ordered for the GPRS network, Power2Ship must provide one SIM card for every Unit ordered within a maximum of two weeks from the date of order. The Sim Cards have to be placed and tested in the Unit as they are being manufactured at the factory. Failure to provide the SIM cards in time will require re-opening and re-test of the Units in the US at a cost of $[*] per Unit to be paid by Power2Ship. + +5.5. Every Unit has a serial number. Power2Ship must provide WLI with a weekly report listing the serial number of every Unit shipped to a customer during the prior week. + +5.6. Power2Ship must provide a separate weekly report to WLI that lists the serial number of any Units suspended during the prior week and that includes the SIM # and ID, date of return, name of returning customer and reason for return. + +5.7. Power2Ship must provide a separate weekly report to WLI that lists the serial number of any Units reactivated (i.e., after having previously been suspended) during the prior week. + +5.8. The weekly reports in Section 5.5, 5.6 and 5.7 must be sent to WLI every Monday. The weekly reports are to be sent in Excel file format via e-mail. The report must be sent even if there is no activity during the prior week. + +5.9. Power2Ship must provide WLI with a complete copy of its monthly airtime bill for the Units as received by the respective wireless operators (T-Mobile, Verizon, AT&T, etc.). Power2Ship is required to keep all the WLI Unit activations on every wireless network on a separate account from any other vendor's brand used by Power2Ship. Every such monthly invoice (one per operator) must be submitted to WLI within 7 days from the date it is received by Power2Ship and the invoice must include all pages listed on the invoice (example 7of 7 pages). Power2Ship's Chief Executive Officer or Chief Financial Officer + + + + + +must confirm in writing to WLI every quarter that the account numbers under which the WLI Units are being activated on the various networks are the only accounts under which the WLI units are activated. + +6. DELIVERY, TITLE AND RISK OF LOSS + +6.1. Delivery shall be F.O.B. WLI's facility in Lyndhurst, New Jersey. WLI shall use its reasonable efforts to deliver Products to Power2Ship on the date of delivery specified by Power2Ship. WLI will use its reasonable efforts to notify Power2Ship of any delays in scheduled delivery dates. + +6.2. Title to the Products and the risk of loss or damage shall pass to Power2Ship upon delivery of the Products to Power2Ship or its shipping company of choice. In the event of any loss of or damage to the Products following delivery to the carrier, WLI shall, upon request, cooperate with Power2Ship in connection with the proof of loss claim presented by Power2Ship to the carrier and/or insurer. + +6.3. Power2Ship shall bear the entire risk of loss or damage to the Units and any other equipment purchased from WLI (collectively the "Equipment") after installation of the Equipment in the customers' vehicles. The occurrence of any such loss or damage shall not permit Power2Ship to delay or reduce the payment of any fees prescribed under this agreement unless Power2Ship presents WLI with proof of a claim to an insurance company and, in such case, Power2Ship should replace the lost or damaged Equipment within a maximum of 60 days and resume the payment of monthly License Fees to WLI. Power2Ship is advised to obtain and maintain property and casualty insurance for the Equipment against all risks of loss or damage. The amount of such insurance shall not be less than the replacement cost of the Equipment. + +6.4. Power2Ship is responsible for maintaining and storing in a safe and secure location backup copies of all data files Power2Ship may place in the System. In no event shall WLI be liable for loss or destruction of Power2Ship's data files for any reason. + +7. PAYMENT + +7.1. Power2Ship must pay WLI for the Products in full on the day it submits a PO (i.e., the PO is not valid unless accompanied by payment in full). + +7.2. The payment of the optional antenna is 50% with the purchase order and 50% when the antennas are ready to be shipped to Power2Ship. + +7.3. Monthly License Fees must be paid no later then the 7th of the month for all Units active during the previous month. For example, on the 7th of July Power2Ship will pay for Units that were active in June. + +7.4. The purchase price for the Unit does not include repair beyond the first year limited warranty. The renewal of the limited warranty after the first year is at the option of the customer, but in any case, Unit failure does not relieve Power2Ship of its obligation to pay the monthly License Fees to WLI for that Unit. The first year limited warranty starts on the day of the activation of the Unit on a wireless network. As a distributor, Power2Ship should keep a minimum number of Units in stock for immediate replacement for its customers. + +7.5. This Agreement is separate and apart from the contract between Power2Ship and its customer. Failure of the customer to pay Power2Ship, for whatever reason, does not affect the obligation of Power2Ship to pay its contractual obligations to WLI. + +7.6. If an invoice is past due by more than 30 days, WLI may discontinue providing technical support to Power2Ship until the invoice is paid. If Power2Ship does not make payment of any amount due and payable hereunder within 60 days of the date of invoice, WLI (without prejudice to any other remedy) shall be entitled to interest on all past due amounts at the lower of eighteen percent (18%) per annum or the highest rate permitted by law, plus reimbursement of all costs incurred in collecting such amounts, including court costs and reasonable attorney fees. + +8. LICENSED SOFTWARE ACCESS AND AUDIT + +8.1. Should a dispute occur concerning the number of Units that Power2Ship has activated with its customer, WLI may designate an independent certified public accountant who may audit Power2Ship's books and records concerning sales of Units and of Licensed Software under this Agreement. Said examination shall be at WLI's sole cost and expense during normal business hours and upon reasonable notice, and may not be conducted more than once annually; provided, however, -------- ------- that if such audit reveals an underpayment by Power2Ship of more than 10% for the period audited, Power2Ship shall pay WLI's actual costs and expenses for performing such audit. + +8.2. WLI, at its own discretion, may visit Power2Ship's warehouse at normal business hours to verify the actual number of Units in inventory and/or the number of Units suspended. + +-------- ------- RH JS Page 3 + +8.3. Power2Ship commits to allow WLI free access to its MidLink software via the Internet for ongoing maintenance and updates. + +9. PRODUCT INFORMATION OBLIGATIONS + + + + + +9.1. Product Descriptions and Technical Support Requirements. WLI shall provide Power2Ship with integration documentation and programming information for its Unit. + +9.2. Warranty Return Procedure. WLI's warranty return procedure is set forth in Exhibit A. + +10. TECHNICAL INFORMATION AND SERVICES + +10.1. WLI shall provide, at no cost to Power2Ship, reasonable training, including but not limited to, training of Power2Ship's sales and technical personnel, to enable Power2Ship to meets its obligations under this Agreement, including its obligation to provide service or support to end-users following termination of this Agreement. + +10.2. Power2Ship is committed to provide technical support and service for WLI's Products sold by Power2Ship to its customers. + +10.3. Power2Ship will receive the first customer call and will have to maintain a minimum inventory level of spare Units to service its customers within 48 hours. WLI will support an end-user only upon Power2Ship's request and only after Power2Ship has tried to provide the support and has failed to fix the problem. WLI will not be involved in any end-user training. + +10.4. Power2Ship will maintain a minimum level of inventory of the Product for service purposes, which the parties estimate to be 1% of the aggregate number of Units active on any wireless network at any given time. + +11. WARRANTY AND INDEMNIFICATION + +11.1. WLI warrants the Products pursuant to the terms of its hardware limited warranty and limited software warranty set forth in Exhibit B hereto. Subject to the terms and conditions of Exhibit A, WLI agrees, in its sole discretion, to repair or replace at its sole cost and expense, any defective Products or parts thereof which are returned to it within the applicable warranty period, provided that the Products have not been altered or repaired other than with authorization from WLI and by its approved procedures; that the Products have not been subjected to misuse, improper maintenance, negligence or accident; that the Products have not been damaged by excessive physical or electrical stress; and that the Products have not had their serial number or any part thereof altered, defaced or removed. + +11.2. The warranty and remedies set forth in Exhibit B are exclusive and in lieu of any other warranties or remedies, express or implied, including the implied warranties of merchantability and fitness for intended or particular purpose. The liability of WLI to Power2Ship for any claim whatsoever related to the Products or the Licensed Programs or this Agreement, including any cause of action in contract, tort, or strict liability, shall not exceed the total amount payable under this Agreement by Power2Ship to WLI within the most recent six-month period for the Licensed Programs (if such claim relates to the Licensed Programs), or for the WLI Products (if such claim relates to the WLI Products). Under no circumstances shall WLI be liable to Power2Ship or to any other person or entity for any incidental, special or consequential damages whether arising out of breach of warranty, breach of contract or otherwise even if WLI has been advised of the possibility of such claims or demands. + +11.3. To the extent not otherwise provided herein, WLI agrees to defend, indemnify and hold harmless Power2Ship from and against (a) any claim by a third party that a Product supplied hereunder did not conform to WLI's warranty when received by Power2Ship or that WLI failed on request to provide warranty service in accordance with WLI's applicable warranty statement or (b) any claim arising under Section 14 of this Agreement. Power2Ship shall be reimbursed for any actual loss, liability or damage suffered or incurred by Power2Ship and for all reasonable costs and expenses (including reasonable attorneys' fees) incurred by Power2Ship in connection with any action, suit, proceeding, demand, assessment or judgment incident to any of the matters indemnified against in this provision provided that Power2Ship immediately notifies WLI as to the institution of such suit, gives or obtains for WLI such authority as may be necessary for WLI to defend same, and supplies WLI such further information and assistance for the defense thereof as WLI may reasonably require and request. WLI shall have no obligation under this section, and shall have no liability to Power2Ship, if such claim arises due to the alteration or modification of any Product without the prior written consent of WLI. + +11.4. Power2Ship shall defend, indemnify and hold harmless WLI from all liability and claims whatsoever for any injury to persons or property or for any loss, expense, or damage incurred by any of Power2Ship's personnel or invitees or by any other person or party (except agents or employees of WLI) arising as a result of or in connection with Power2Ship's acquisition or use of the Products and Licensed Programs or WLI 's performance of its obligations or exercise of its rights hereunder except for those claims which are the result of the willful acts or gross negligence of WLI. + +12. INTELLECTUAL PROPERTY RIGHTS INDEMNIFICATION + +12.1. WLI represents and warrants that: (i) it owns all right, title and interest in and to the Products necessary to enter into and perform its obligations to Power2Ship hereunder, and (ii) no Product or Licensed Programs sold to Power2Ship during the term of this Agreement, nor the use of any such Product or Licensed Program, nor anything in or contemplated by this Agreement, infringes upon the Intellectual Rights (as defined herein) of any other person or entity, and no suit or proceeding is pending or threatened alleging that any Product or Licensed program, or the use thereof, infringes upon any Intellectual Rights. As used herein, the term "Intellectual Right" means any rights relating to any trademark, trade name, service mark, copyright, patent, trade secret or other proprietary right. + + + + + +13. USE OF TRADEMARKS + +13.1. Power2Ship shall not acquire any right to or interest in any trademark or trade name owned or used by WLI. Power2Ship may use for purposes of this Agreement such trademarks and trade names as appear on the Products and on promotional materials therefore when received by Power2Ship from WLI. + +13.2. Power2Ship acknowledges that WLI and its affiliates are the owners and/or licensees of the trademarks, service marks, commercial symbols and trade names used by WLI. Power2Ship shall not contest the right of WLI and its affiliates to the use of any trademarks, service marks, commercial symbols or trade names used or claimed by WLI. + +13.3. All WLI's use of Power2Ship's company name, logos, trademarks or other registered identifiers must meet Power2Ship's corporate communications standards and must have Power2Ship's written approval prior to such use by WLI. All Power2Ship's use of WLI's company name, logos, trademarks or other registered identifiers must meet WLI's corporate communications standards and must have WLI's written approval prior to such use by WLI. + +-------- ------- RH JS Page 4 + +13.4. Power2Ship shall have the right to place its trademarks on the Products but shall not obscure any WLI trademarks. + +14. TERMINATION + +14.1. Termination for Cause by WLI WLI may, upon written notice, terminate this Agreement at any time in the event that (a) Power2Ship defaults or otherwise fails to perform any obligation, warranty, duty, responsibility or other term or condition of this Agreement, including failure to make a payment when due and such default or failure continues unremedied for a period fifteen (15) days after such notice; (b) Power2Ship ceases permanently to carry on its present business, except as a result of a bona fide reorganization in the course of which the Agreement is transferred to a successor company of equal or greater financial resources carrying on substantially the same business; (c) Power2Ship makes an assignment for the benefit of creditors; or admits in writing its inability to pay debts as they mature; or a trustee or receiver of Power2Ship, or of any substantial part of Power2Ship's assets, is appointed by any court; or a proceeding is instituted by or against Power2Ship under any provision of the United States Bankruptcy Code or any other law affecting the rights of creditors and such proceeding is acquiesced in or is not dismissed within sixty (60) days; or (d) WLI's continued performance under this Agreement would cause it to be in violation of (i) any order of any court or regulatory agency having jurisdiction over WLI, or (ii) any law, statute, ordinance or regulation to which WLI is subject. + +14.2. Termination for Cause by Power2Ship. Power2Ship may, upon written notice, terminate this Agreement at any time in the event that (a) WLI defaults or otherwise fails to perform any obligation, warranty, duty, responsibility or other term or condition of this Agreement, including failure to pay a refund when due and such default or failure continues unremedied for a period fifteen (15) days after such notice; (b) WLI ceases permanently to carry on its present business, except as a result of a bona fide reorganization in the course of which the Agreement is transferred to a successor company of equal or greater financial resources carrying on substantially the same business; (c) WLI makes an assignment for the benefit of creditors; or admits in writing its inability to pay debts as they mature; or a trustee or receiver of WLI, or of any substantial part of WLI's assets, is appointed by any court; or a proceeding is instituted by or against WLI under any provision of the United States Bankruptcy Code or any other law affecting the rights of creditors and such proceeding is acquiesced in or is not dismissed within sixty (60) days; or (d) Power2Ship's continued performance under this Agreement would cause it to be in violation of (i) any order of any court or regulatory agency having jurisdiction over Power2Ship, or (ii) any law, statute, ordinance or regulation to which Power2Ship is subject. + +14.3. Termination of this Agreement shall not release either party from the obligation to pay any sums to the other party whether then or thereafter due or operate to discharge any liability which has been incurred prior to the effective date of such termination. + +14.4. Upon expiration of this Agreement or termination by either party, Power2Ship may sell off any remaining inventory of the Products or Licensed Software acquired prior to termination. + +14.5. Neither party shall be liable to the other party for any special, incidental, or consequential damages arising in connection with, or out of termination of, this agreement. + +15. NOTICES + +Any notice or communication given pursuant to this Agreement shall be in writing, delivered in person or may be telegraphed, telexed, sent by facsimile transmission or United States certified, registered or express mail, Federal Express or other private courier, postage prepaid, return receipt requested in the event of delivery by mail. In the event notice shall be given by facsimile transmission an original of such notice shall simultaneously be deposited in United States mail, postage prepaid, or sent by Federal Express or other private courier, addressed as hereinafter required. Notices shall be given to the parties addressed as set forth in the first paragraph of the Agreement or at such other address as the parties may from time to time designate by notice hereunder. Notices shall be given when delivered personally, or when + + + + + +telegraphed, telexed or sent by facsimile transmission if sent during regular business hours of the recipient and if not, on the next following business day or if mailed, at midnight on the third business day after the date of mailing or if sent by Federal Express or by other private courier on the next following business day. + +If to WLI: Wireless Links, Inc. Attention: Joe Shayovitch 1050 Wall Street Suite 320 Lyndhurst, New Jersey 07071 Facsimile No. 201-531-9795 + +If to Power2Ship: Freight Rate, Inc. Attention: Richard Hersh 10400 Griffin Rd., Suite 101 Ft. Lauderdale, FL 33328 + +16. GENERAL + +16.1. This Agreement, its interpretation and construction, and the remedies for its enforcement or breach are to be applied in accordance with the laws of the State of New Jersey. + +16.2. Failure on any occasion by WLI or Power2Ship to enforce any term or condition of this Agreement shall not prevent or bar enforcement on any other occasion. + +16.3. Neither party shall be deemed to be in default of any provision hereof or be liable for any delay, failure in performance or interruption of service resulting directly or indirectly from act of war, act of God, act of civil or military authority, civil disturbance or any other cause beyond its reasonable control. + +16.4. The relationship between WLI and Power2Ship is that of independent contractors. Neither party, nor its agents or its employees shall be deemed to be the agent of the other party. Neither party shall have the right to bind the other party, transact any business in the other party's name or in its behalf or incur any liability for or on behalf of the other party. + +16.5. Neither WLI nor Power2Ship shall intentionally disclose, and each party shall use reasonable efforts to prohibit, the unintentional disclosure to any third party of any confidential or proprietary information of the other party during the term of this Agreement and for a period of one (1) year thereafter. + +16.6. The headings to the paragraphs of this Agreement are included merely for convenience of reference and shall not affect the meaning of the language included therein. + +16.7. No provisions of this Agreement may be altered or amended unless such alteration or amendment is in writing and executed by duly authorized officers of both parties, except where otherwise specifically provided for in this Agreement. + +16.8. The covenants contained in this Agreement which, by their terms, require or contemplate performance by the parties after the expiration or termination of this Agreement shall be enforceable notwithstanding said expiration or termination. + +16.9. This Agreement (including all Exhibits hereto), constitutes the entire Agreement and understanding between the parties relating to the subject matter hereof, supersedes all other agreements, oral or written, heretofore made between the parties with respect to such subject matter, supersedes the standard terms and conditions in Power2Ship's purchase order form and WLI's quotation, invoice or acknowledgment form, and supersedes any other terms or conditions of purchase proposed by Power2Ship or WLI. This Agreement may not be assigned by either party without the prior written consent of the other party. If any provision in this Agreement should be held illegal or unenforceable, no other provision of this Agreement shall be affected. + +-------- ------- RH JS Page 5 + +IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first written above. + +Wireless Links, Inc. Jaguar Investments, Inc. + +By: By: ------------------------- ----------------------------- Its: Its: Chief Executive Officer ------------------------ ---------------------------- + +-------- ------- RH JS Page 6 + +EXHIBIT A + + PRODUCT WARRANTY INFORMATION + +WARRANTY + + + + + +A) HARDWARE LIMITED WARRANTY - WLI will provide a one year limited warranty for its hardware products as per the terms and conditions described in "Attachment B". The first year warranty starts with the date of shipment and terminates on the anniversary of the first year. + +B) Extended limited warranty beyond the first year is available at the same terms and conditions described in "Attachment B ". The second year Limited warranty price will be determined between the parties based on the total number of units to be under warranty in a particular year. + +- The Warranty is a limited warranty that does not cover damage caused by improper use, abuse or use for other than intended purposes. The Warranty does not cover LCD screen or batteries. See Attachment B, Limited Warranty for the Acknowledger(TM) and related accessories. + +- The parties understand and agree that WLI does not warrant any part of the Peripheral equipment that is not sold directly by WLI + +- Within 14 days from discovery of a defect, the Integrator shall notify WLI in writing of said defect. Said notice of defect shall contain a reasonably detailed description of the defect as determinable by the Integrator. Said notice shall also indicate the serial numbers of all Acknowledgers and the release levels of software in which the defect was discovered. + +C) DEFECTIVE EQUIPMENT RETURN. Defective equipment will be returned promptly to WLI's repair centre at the Power2Ship cost. The integrator will return for repair products under warranty and will pay the shipping cost to WLI and will carry the risk of loss until the package has been delivered to WLI. WLI will pay the shipping cost back via standard "UPS ground" and will carry the risk of loss until the package is delivered to the integrator. + + For each unit, prior to return Power2Ship must send WLI a description of the problem including the serial number and date of shipping and date of purchase. Every return must have a Return Merchandise Authorisation number (RMA) as issued by WLI. Replacement or repaired units will be returned to the Integrator within 14 working days of receipt of a defective unit at WLI's cost. + +D) LIMITED WARRANTY OF LICENSED PROGRAMS. WLI warrants, for the benefit of the Integrator only, that at the time Integrator's license of Licensed Programs commences, WLI has the right and authority to license the Licensed Programs to Integrator, and the Licensed Programs conform in all material respects to any specifications supplied to Integrator in writing by WLI. WLI does not warrant that the Licensed Programs can be used without interruption or that they are error-free. + + Any implied warranties of the Licensed Software are LIMITED to one year starting from the date it was shipped to the integrator or starting with the date specified as the starting date in the leasing and / or purchase agreement with the Integrator. If the date is different then the shipping date to the integrator the integrator has to provide a copy of the agreement with the Integrator to verify the start of warranty. + +E) CORRECTIONS AND UPDATES OF LICENSED PROGRAMS. + + WLI shall maintain the accuracy of the Licensed Programs by making a reasonable attempt to correct any programming or database errors that Integrator brings to WLI attention. In addition, WLI from time to time may furnish Integrator with further releases of the Licensed Programs to provide corrections of significant programming or database errors and updates of database information. WLI obtains the information contained in the database of the Licensed Programs from established outside sources, and WLI makes every effort to keep the information up-to-date, but it cannot guarantee absolute accuracy and timeliness. After the expiration of the initial term of this Agreement, WLI shall provide any correction and update assistance only on mutually acceptable terms at WLI's customary rates then in effect. WLI reserves the right to make modifications and enhancements of the Licensed Programs (other than simple corrections and updates + +-------- ------- RH JS Page 7 + + EXHIBIT B End User Warranty + + LIMITED WARRANTY FOR THE ACKNOWLEDGER(TM) AND RELATED ACCESSORIES ----------------------------------------------------------------- Wireless Links (WLI) warrants to the original end user purchaser ("You") that the Equipment will be free from defects in workmanship and materials ("Limited Warranty") for a period of one (1) year from the date of the purchase of the Equipment (the "Warranty Period"). This limited warranty does not&sbsp;apply to normal wear and tear and does not cover repair or replacement of Equipment damaged by misuse, accident, abuse, neglect, misapplication, alteration of any kind (including upgrades and expansions)' disaster or defects due to repairs or modifications made by anyone other than the Manufacturer or its authorized service representative. In addition, this limited warranty does not apply to physical damage of any nature whatsoever to the surface of the display, to the surface of the signature pad of the Equipment or to any data stored within the Equipment. WLI shall not have any liability whatsoever with respect to any data stored within the Equipment. Before returning any Equipment under this limited warranty, call WLI and request a return merchandise authorization number (RMA - number)' then ship the Equipment in the original packaging or its equivalent to the location designated by WLI accompanied by proof of purchase, a brief written explanation of the defects, the RMA Number and a return shipment address. WLI at + + + + + +its discretion will repair or replace the Equipment in accordance with the terms of this limited warranty and send it back to you. You are responsible for the cost of shipping the Equipment to the location designated by WLI and the risk of loss or damage in transit. WLI will bear the cost of return shipment to you and the risk of loss or damage during such return shipment. REPAIR OR REPLACEMENT BY WLI AS PROVIDED IN THIS LIMITED WARRANTY IS YOUR EXCLUSIVE REMEDY UNDER THIS LIMITED WARRANTY. WLI SHALL NOT BE LIABLE FOR ANY SPECIAL, INCIDENTAL, CONSEQUENTIAL OR EXEMPLARY DAMAGES. WLI DISCLAIMS ALL OTHER WARRANTIES, WHETHER EXPRESS, IMPLIED, OR STATUTORY INCLUDING BUT NOT LIMITED TO, ALL IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR ANY WARRANTY ARISING OUT OF ANY PROPOSAL, SPECIFICATION OR SAMPLE. ANY SOFTWARE PROVIDED WITH THE EQUIPMENT IS PROVIDED UNDER A SEPARATE SOFTWARE LICENSE AGREEMENT. + +-------- ------- RH JS Page 8 + + EXHIBIT C-2 END-USER PROGRAM LICENSE AGREEMENT + +WIRELESS LINKS (WLI) SOFTWARE LICENSE AGREEMENT ---------------------------------------------------- + +Licensed Programs are provided solely in executable files and consist of the following programs: MidLink (WLI's middleware), MapLink, and all G3001 related programming tools, + +1. RESERVATION OF TITLE. This Agreement does not provide the Power2Ship (you) with title or ownership of the Licensed Programs, but only a right of limited use of one copy per software package per license. The Licensed Programs are, and shall remain, the property of Wireless Links and certain third-party licensers who have authorized Wireless Links to incorporate their software into the System. Subject to a distribution agreement the Power2Ship (you) can redistribute the licensed products but you can't reproduce the Licensed Programs. + +2. COPYRIGHT PROTECTION. Power2Ship acknowledges that the programs, software information, and user materials included in the Licensed Programs contain confidential information and trade secrets, which WLI(TM) has entrusted to Power2Ship in confidence to use only as expressly permitted by this Agreement. Power2Ship acknowledges that Wireless Links claims and reserves all rights and benefits afforded under federal law in the programs, database information, and user materials included in the Licensed Programs as copyrighted works. + +3. PRESERVATION OF SECRECY AND CONFIDENTIALITY. Power2Ship shall protect the programs, database information, and user materials include din the Licensed Programs as confidential information and trade secrets. Power2Ship shall not, at any time, disclose such confidential information and trade secrets to any other person, firm, organization, or employee that does not (consistent with Power2Ship's right of use hereunder) need to obtain access to the Licensed Programs. Power2Ship shall devote its best efforts to ensure that all Power2Ship's personnel and all other persons afforded access to the Licensed Programs by Power2Ship protect the Licensed Programs as trade secrets and confidential information and refrain from any use of disclosure in any manner not expressly permitted by this Agreement. These restrictions shall not apply to information (1) generally know to the public of obtainable from public sources; (2) readily apparent from the keyboard operation, visual display, or output reports of the Licensed Program; (3) previously in the possession of Power2Ship or subsequently developed or acquired without reliance on the Licensed programs; or (4) approved by WLI for release without restriction. + +4. RESTRICTIONS ON USE OF LICENSED PROGRAMS. The programs, software information, and user materials included in the Licensed Programs may not be decompiled, reverse engineered, reprinted, transcribed, extracted, or reproduced, in whole or in part, without the prior written consent of WLI. Power2Ship shall not in any way modify or alter the Licensed Programs without the prior written consent of WLI. + +5. SURVIVALS OF OBLIGATIONS; RETURN OF PROGRAMS. Power2Ship's obligations under this Agreement shall remain in effect for as long as Power2Ship continues to use the Licensed Programs. Power2Ship shall promptly return all materials and documentation relating to the Licensed Programs provided by WLI upon (1) termination of either this Agreement of Power2Ship's license of the Licensed Programs, for any reason, or (2) discontinuance or abandonment of Power2Ship's use or control of the Licensed Programs. + +6. POWER2SHIP'S DATA FILES. Power2Ship is responsible for maintaining and storing in a safe and secure location backup copies of all data files Power2Ship may place in the System. In no event shall WLI(TM) be liable for loss or destruction of Power2Ship's data files for any reason. + +7. LIMITED WARRANTY ON LICENSED PROGRAMS. WLI(TM) warrants, for the benefit of Power2Ship only, that at the time Power2Ship's license of Licensed Programs commences, WLI(TM) has the right and authority to license the Licensed Programs to Power2Ship, and the Licensed Programs conform in all material respects to any specification supplied to Power2Ship in writing by WLI(TM). WLI(TM) does not warrant that the Licensed Programs can be used without interruption or that they are error-free. Any implied warranties of the Licensed Software are LIMITED to one year starting from the date of purchase or for the period described in the contractual agreement with the Power2Ship. For best and fast service WLI recommends to Power2Ship to install on the server NT computer a modem fax with PC-Anywhere software and a dedicated phone line to allow WLI to dial in for routine maintenance. + + + + + +8. CORRECTIONS AND UPDATES OF LICENSED PROGRAMS. WLI shall maintain the accuracy of the Licensed Programs by using its best endeavors to correct any programming or database errors that Power2Ship brings to WLI(TM)'s attention. In addition, during the warranty period and/or duration of this agreement WLI from time to time may furnish Power2Ship with further releases of the Licensed Programs to provide corrections of significant programming or software errors. After the expiration of this agreement, WLI shall provide any correction and update assistance only on mutually acceptable terms at WLI's customary rates then in effect. WLI(TM) reserves the right to make optional modifications and enhancements of the Licensed Programs (other than simple corrections and updates) available only at additional charges. + +-------- ------- RH JS Page 9 \ No newline at end of file diff --git a/full_contract_txt/VITAMINSHOPPECOMINC_09_13_1999-EX-10.26-SPONSORSHIP AGREEMENT.txt b/full_contract_txt/VITAMINSHOPPECOMINC_09_13_1999-EX-10.26-SPONSORSHIP AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..d674366845011c423825046c3b28e0d4c04bd9be --- /dev/null +++ b/full_contract_txt/VITAMINSHOPPECOMINC_09_13_1999-EX-10.26-SPONSORSHIP AGREEMENT.txt @@ -0,0 +1,459 @@ +1 + + EXHIBIT 10.26 + + CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS. + + SPONSORSHIP AGREEMENT + +This agreement ("Agreement") is entered into as of the 23rd day of September 1998 ("Effective Date"), by and between Excite, Inc., a Delaware corporation, located at 555 Broadway, Redwood City, California 94063 ("Excite"), and Vitamin Shoppe Industries Inc., a New York corporation, located at 4700 Westside Avenue, North Bergen, New Jersey 07047 ("Client"). + + RECITALS + +A. Excite maintains sites on the Internet at http://www.excite.com (the "Excite Site"), http://www.webcrawler.com (the "WebCrawler Site) and http://www.excite.co.jp (the "Excite Japan Site"), and owns, manages or is authorized to place advertising on affiliated sites on the Internet worldwide (collectively, the "Excite Network") which, among other things, allow its users to search for and access content and other sites on the Internet. For purposes of this Agreement, the parties hereby acknowledge that the Excite Network does not include the site on the Internet located at http://home.netscape.com and/or other URLs or locations designated by Netscape Communications Corporation. + +B. Within the Excite Site and the WebCrawler Site, Excite currently organizes certain content into topical channels (the "Channels"). + +C. Client is engaged in the business of selling vitamins, minerals, nutritional supplements, herbs, sports nutrition formulae, homeopathic remedies and other health related products ("Vitamins") at its site on the Internet located at http://www.vitaminshoppe.com (the "Client Site"). + +D. Client wishes to promote its business to users of the Excite Network through promotions and advertising in various portions of the Excite Network. + +Therefore, the parties agree as follows: + +1. SPONSORSHIP ON THE WEBCRAWLER HEALTH CHANNEL + + a) Client will be promoted as the preferred and dominant reseller of Vitamins in the Health Channel on the WebCrawler Site during the term of this Agreement. As such, Excite may not display banner advertising and/or promotional placements for any of Client's Competitors that are, in the aggregate, of equal or greater prominence and exposure than the aggregate of Client's links, advertising banners and promotional placements on the pages of the Health Channel on the WebCrawler Site during the term of this Agreement. For purposes of this Agreement, Client's Competitors means those merchants identified in Exhibit D attached hereto. Client may update + +2 CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS. + + this list in writing not more than once every six (6) months by adding other merchants whose primary business is reselling Vitamins upon the mutual agreement of Excite. Notwithstanding the foregoing, Excite may display links to Excite's own products and services anywhere in the Excite Network, and may display links to Client's Competitors in results pages of search services in response to user queries, in general directories of Web sites, in classified advertising listings and in results in the "Jango" shopping search service throughout the Excite Network. Client's preferred and dominant status as a reseller of Vitamins will be extended on the terms stated in this Section l(a) to its presence within future departments within the WebCrawler Health Channel, when launched, which may include, but are not limited to, the alternative medicine and senior living departments. + + + + + + b) The parties will cooperate in good faith to identify and implement appropriate promotional opportunities for Client to be displayed in rotation on the home page of the WebCrawler Health Channel during the term of the Agreement. + + c) A link to the Client Site (consistent with the format used on similar links on the same page) will be displayed in the Nutrition & Vitamins department of the WebCrawler Health Channel during the term of the Agreement. Excite estimates, but does not guarantee, delivery of [*****] impressions of the Client promotional placement described in this Section l(c) during [*****] of the term of the Agreement and [*****] such impressions during [*****] of the term of the Agreement. + + d) The parties will cooperate in good faith to identify and implement other appropriate promotional opportunities for Client on the WebCrawler Health Channel including (if and when launched) but not limited to, the alternative medicine and senior living departments during the term of the Agreement. Excite estimates, but does not guarantee, delivery of [*****] impressions of the Client promotional placement described in this Section 1(d) during [*****] of the term of the Agreement and [*****] such impressions during [*****] of the term of the Agreement. + + e) Excite is in the process of developing a "Sponsorship Strip" for the WebCrawler Health Channel consisting of a row of graphic links to sponsors' Web sites. Excite will display a graphic link to the Client Site on the Sponsorship Strip (consistent with the format used on similar links on the same strip) in the pages of the WebCrawler Health Channel for the duration of the term of the Agreement. Excite estimates, but does not guarantee, delivery of [*****] impressions of the Client promotional placement described in this Section 1(e) during [*****] of the term of the Agreement and [*****] such impressions during [*****] of the term of the Agreement. + + f) Excite and Client acknowledge that neither party to this Agreement possesses any right to control the content or promotional programming displayed on any third party + + 2 3 CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS. + + site. However, Excite will work with Client in good faith to evaluate the display of any Excite co-branded pages one level deep that directly link from the WebCrawler Health Channel to determine whether the non-banner display of modules related to Client's Competitors on those pages materially and adversely affect the aggregate value of Client's promotional placements on the WebCrawler Health Channel as described in this Agreement. Under such circumstances, Excite will then exert commercially reasonable efforts to modify such co-branded pages to reduce such material and adverse effects. + +2. SPONSORSHIP ON THE WEBCRAWLER SHOPPING CHANNEL + + a) Client will be promoted as the preferred and dominant reseller of Vitamins in the Shopping Channel on the WebCrawler Site during the term of this Agreement. As such, Excite may not display banner advertising and/or promotional placements for any of Client's Competitors that are, in the aggregate, of equal or greater prominence and exposure than the aggregate of Client's links, advertising banners and promotional placements on the pages of the Shopping Channel or the WebCrawler Site. Notwithstanding the foregoing, Excite may display links to Excite's own products and services anywhere in the Excite Network, and may display links to Client's Competitors in results pages of search services in response to user queries, in general directories of Web sites, in classified advertising listings and in results in the "Jango" shopping search service throughout the Excite Network. + + + + + + b) A link to the Client Site (consistent with the format used on similar links on the same page) will be displayed in rotation on the first page of the health & fitness department of the WebCrawler Shopping Channel during the term of the Agreement. Excite estimates, but does not guarantee, delivery of [*****] impressions of the Client promotional placement described in this Section 2(b) during [*****] of the term of the Agreement and [*****] such impressions during [*****] of the term of the Agreement. + + c) A link to the Client Site (consistent with the format used on similar links on the same page) will be displayed under the health foods category on the first page of the health & fitness groceries department of the WebCrawler Shopping Channel. Excite estimates, but does not guarantee, delivery of [*****] impressions of the Client promotional placement described in this Section 2(c) during [*****] of the term of the Agreement and [*****] such impressions during [*****] of the term of the Agreement. + + 3 4 CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS. + +3. ADDITIONAL SPONSORSHIP + + a) The parties will cooperate in good faith to identify and implement selective sponsorship and promotional opportunities for Client in the Nutrition & Vitamins department of the Health Channel on the Excite Site. Such opportunities may include sponsorship links, sponsorship boxes and/or promotional boxes. The parties hereby acknowledge that Client will be sharing such opportunities in the Nutrition & Vitamins department of the Excite Health Channel with one other reseller of vitamins. + + b) The parties will cooperate in good faith to identify and implement selective sponsorship and promotional opportunities for Client on the Excite Japan Site. Such opportunities may include sponsorship links, sponsorship boxes and/or promotional boxes. Excite estimates, but does not guarantee, delivery of [*****] impressions of the Client promotional placements described in this Section 3(b) during [*****] of the term of the Agreement and [*****] such impressions during [*****] of the term of the Agreement. + + c) Excite estimates, but does not guarantee, delivery of a total of [*****] impressions of the Client promotional placements described in Sections 3(a) and 3(b) during the term of this Agreement. + +4. DeliverE MESSAGE PROMOTIONS + + a) Excite and Client will cooperate in developing and delivering MatchLogic DeliverE message campaigns during the term of the Agreement as described in Exhibit B. The MatchLogic DeliverE is an opt in email service providing the opportunity to distribute messages to highly targeted audiences on the Web via email. All such message campaigns will comply with Excite's then current privacy policy which is located at http://www.excite.com/privacy_policy and is subject to change from time to time. If the privacy policy changes in a manner that has a material adverse effect on the value, functionality or implementation of the DeliverE message campaign for Client, Excite will notify Client, which will then have the option to cancel future DeliverE campaigns and both parties will be relieved of their obligations related to those canceled DeliverE campaigns, if Client, in its sole but reasonable discretion, finds such changed privacy policy objectionable. + + b) Excite estimates, but does not guarantee, delivery of [*****] impressions of the email messages described in this Section 4 during [*****] of the term of this Agreement and [*****] impressions during [*****] of the term of the Agreement. + + + + + + 4 5 CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS. + + c) Excite and Client agree that Client may purchase additional DeliverE messages during the term of this Agreement at a rate of [*****] impressions ("CPM"), subject to availability. + +5. ADVERTISING ON THE EXCITE NETWORK + + a) Excite will display Client's banner advertising on [*****] in response to the keywords set forth in Exhibit A as amended from time to time by Client, and with additional keywords related to Vitamins, subject to availability, during the term of the Agreement. Excite estimates, but does not guarantee, the display of [*****] impressions of the banner advertisements described in this Section 5(a) during [*****] of the term of the Agreement and [*****] such impressions during [*****] of the term of the Agreement. + + b) Excite will display Client's banner advertising in [*****] during the term of the Agreement. Excite estimates, but does not guarantee, the display of [*****] impressions of the banner advertisements described in this Section 5(b) during [*****] of the term of the Agreement and [*****] such during [*****] of the term of the Agreement. + + c) Excite will display Client's banner advertising in [*****] during the term of the Agreement. Excite estimates, but does not guarantee, the display of [*****] impressions of the banner advertisements described in this Section 5(c) during [*****] of the term of the Agreement and [*****] such impressions during [*****] of the term of the Agreement. + + d) Excite will display Client's banner advertising in [*****] during the term of the Agreement. Excite estimates, but does not guarantee, the display of [*****] impressions of the banner advertisements described in this Section 5(d) during [*****] of the term of the Agreement and [*****] such impressions during [*****] of the term of the Agreement. + +6. LAUNCH DATE, RESPONSIBILITY FOR EXCITE NETWORK AND REPORTING + + a) Client and Excite will use reasonable efforts to implement the display of the promotional placements and advertising described in the Agreement by October 1, 1998 (the "Scheduled Launch Date"). The parties recognize that the Scheduled Launch Date can be met only if Client provides final versions of all graphics, text, keywords, banner advertising, promotional placements, other promotional media and valid URL links necessary to implement the promotional placements and advertising described in the Agreement (collectively, "Impression Material") to Excite fourteen (14) days prior to Scheduled Launch Date. + + 5 6 CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS. + + b) In the event that Client fails to provide the Impression Material to Excite fourteen (14) days in + + + + + + advance of the Scheduled Launch Date, Excite may, at its sole discretion (i) reschedule the Scheduled Launch Date at the earliest practicable date according to the availability of Excite's engineering resources after delivery of the complete Impression Material or (ii) commence delivery of Impressions based on Impression Material in Excite's possession at the time. + + c) Client and Excite agree that the day the promotional placements and advertising described in this Agreement are first displayed on the Excite Network will be the "Launch Date" for purposes of this Agreement. + + d) Excite will have sole responsibility for providing, hosting and maintaining, at its expense, the Excite Network. Excite will have sole control over the "look and feel" of the Excite Network including, but not limited to, the display, appearance and placement of the parties' respective names and/or brands and the promotional links, but such control shall not permit Excite to modify Client's logos and trademarks and it does not relieve Excite from its obligations regarding Client's preferred and dominant sponsorship status as set forth elsewhere in this Agreement. + + e) Advertising banners will be served, tracked and reported by Excite's subsidiary, MatchLogic, Inc. ("MatchLogic") as described in Exhibit B. MatchLogic will also provide Client with feedback as to comparisons of the performance of (i) the different creative messages supplied by Client for the advertising banners, (ii) the placements of those advertising banners on the Excite Network as set forth in this Agreement and (iii) through the implementation of MatchLogic's Closed Loop transaction reporting system on the Client Site, will report on correlations between transaction activity by users referred to the Client Site from the Excite Network and the various promotional placements and advertising displayed on the Excite Network, all as described in Exhibit B. Promotional placements, including text links, will be served, tracked and reported by Excite. These promotional placements will be tracked and reported by MatchLogic when this implementation becomes available. Excite will provide Client with monthly reports substantiating the number of impressions of Client's advertising banners and promotional placements displayed on the Excite Network. + + f) As soon as such third party auditing is available to Excite, Excite will provide Client with monthly reports, including certified reports by a third party auditing firm substantiating the number of impressions of Client's advertising banners and promotional placements displayed on the Excite Network. When available, such third party audit reports will be at Excite's cost and expense. + + 6 7 CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS. + +7. FEES; REVENUE SHARE + + a) Client will pay Excite sponsorship and advertising fees of [*****] for the first twelve (12) month period following the Launch Date ([*****]). These fees will be paid in twelve (12) equal monthly installments of [*****]. The first monthly payment for [*****] will be due one month following the Launch Date. Subsequent installments will be due on a monthly basis thereafter. + + b) Client will pay Excite sponsorship and advertising fees of [*****] for the twelve (12) month period following the first anniversary of the Launch Date ([*****]). These fees will be paid in equal monthly installments of [*****]. The first monthly payment for [*****] will be due one month following the first anniversary of the Launch Date. Subsequent + + + + + + installments will be due on a monthly basis thereafter. + + c) Separate and apart from the sponsorship and advertising fees, Client will pay Excite MatchLogic DeliverE fees of [*****] for [*****]. These fees will be paid in equal monthly installments of [*****]. The first monthly payment for [*****] will be due one month following the Launch Date. Subsequent installments will be due on a monthly basis. + + d) Separate and apart from the sponsorship and advertising fees, Client will pay Excite MatchLogic DeliverE fees of [*****] for [*****]. These fees will be paid in equal monthly installments of [*****]. The first monthly payment for [*****] will be due one month following the first anniversary of the Launch Date. Subsequent installments will be due on a monthly basis. + + e) Separate and apart from the sponsorship and advertising fees and the MatchLogic DeliverE fees, Client will pay Excite MatchLogic banner and link serving fees of [*****] for [*****]. These fees will be paid in equal monthly installments of [*****]. The first monthly payment for [*****] will be due one month following the Launch Date. Subsequent installments will be due on a monthly basis. + + f) Separate and apart from the sponsorship and advertising fees and the MatchLogic DeliverE fees, Client will pay Excite MatchLogic banner and link serving fees of [*****] for [*****]. These fees will be paid in equal monthly installments of [*****] + + 7 8 CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS. + + [*****]. The first monthly payment for [*****] will be due one month following the first anniversary of the Launch Date. Subsequent installments will be due on a monthly basis. + + g) Separate and apart from the sponsorship and advertising fees, the MatchLogic DeliverE fees and the MatchLogic banner and link serving fees, Client will pay Excite [*****] recognized by Client on transactions conducted by users referred to the Client Site from the Excite Network during [*****]. Separate and apart from the sponsorship and advertising fees, the MatchLogic DeliverE fees and the MatchLogic banner and link serving fees, Client will pay Excite [*****] recognized by Client on transactions conducted by users referred to the Client Site from the Excite Network during [*****] of the term of the Agreement. For purposes of this Agreement "Net Revenue" means gross revenue recognized by Client on transactions conducted by users referred to the Client Site from the Excite Network minus sales tax, sales returns and allowances. Client will pay Excite these revenue share payments within thirty (30) days after the close of the financial quarter in which Client recognizes the Net Revenue on these transactions. + + h) The fees and revenue share payments are net of any agency commissions to be paid by Client. + + i) Client will maintain accurate records with respect to the calculation of all payments due under this Agreement. Once per year, the parties will review these records to verify the accuracy and appropriate accounting of all payments made pursuant to the Agreement. In addition, Excite may, upon no less than thirty (30) days prior written notice to Client, cause an independent Certified Public Accountant to inspect the records of Client reasonably related to the calculation of such payments during Client's normal business hours. The fees charged by such Certified Public Accountant in connection with the + + + + + + inspection will be paid by Excite unless the payments made to Excite are determined to have been less than ninety-five percent (95%) of the payments actually owed to Excite, in which case Client will be responsible for the payment of the reasonable fees for such inspection. + +8. PUBLICITY + + Unless required by law, neither party will make any public statement, press release or other announcement relating to the terms of or existence of this Agreement without the prior written approval of the other. Notwithstanding the foregoing, either party may issue an initial press release regarding the relationship between Excite and Client, the timing and wording of which will be mutually agreed upon, and nothing herein shall preclude Client from promoting the Client Site. + + 8 9 CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS. + +9. TERM AND TERMINATION + + a) Unless terminated earlier in accordance with the specific terms of this Agreement, the term of this Agreement will begin on the Launch Date and will not end until Excite displays a total of [*****] impressions of the Client advertising banners and promotional placements on the Excite Network as described in this Agreement and pushes [*****] emails using the email vehicles specified in Exhibit B. Regardless of Excite's actual delivery of impressions, the term of this Agreement will not be shorter than [*****] after the Launch Date, unless the Agreement is terminated earlier in accordance with the specific terms of this Agreement. + + b) Either party may terminate this Agreement if the other party materially breaches its obligations hereunder and such breach remains uncured for thirty (30) days following the notice to the breaching party of the breach. + + c) All undisputed payments that have accrued prior to the termination or expiration of this Agreement will be payable in full within thirty (30) days thereof. + + d) The provisions of Section 12 (Confidentiality and User Data), Section 13 (Indemnity), Section 14 (Limitation of Liability) and Section 15 (Dispute Resolution) will survive any termination or expiration of this Agreement. + + e) Excite guarantees to deliver the annual impressions totals set forth in Exhibit C hereto. If Excite fails to deliver the indicated number of impressions required during any annual period, Client may suspend (but not eliminate) its payments specified in Section 7 for a maximum of sixty (60) days (the "Make-Good Period) during which Excite will deliver the shortfall of such impressions. The parties agree to cooperate in good faith to evaluate the quality and performance of the placements used to deliver the impressions during the Make-Good Period. Until such shortfall is delivered, no impressions will be deemed delivered for the next annual period. If Excite has not achieved the required annual impression delivery by the end of the Make-Good Period, Client may then terminate this Agreement upon written notice within ten (10) days following the end of the Make-Good Period. Client's termination of the Agreement in accordance with the previous sentence will not relieve Excite of its obligation to deliver any previously paid for but undelivered impressions. If Excite achieves the annual impression delivery goal at any time during the Make-Good Period, the term of this Agreement will continue and Client shall immediately resume payment of the sponsorship and advertising fees specified in Section 7. + + + + + + 9 10 CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS. + +10. TRADEMARK OWNERSHIP AND LICENSE + + a) Client will retain all right, title and interest in and to its trademarks, service marks and trade names worldwide, subject to the limited license granted to Excite hereunder. + + b) Excite will retain all right, title and interest in and to its trademarks, service marks and trade names worldwide, subject to the limited license granted to Client hereunder. + + c) Each party hereby grants to the other a non-exclusive, limited license to use its trademarks, service marks or trade names only as specifically described in this Agreement. All such use shall be in accordance with each party's reasonable policies regarding advertising and trademark usage as established from time to time. Client agrees to obtain Excite's written consent prior to use of Excite's logo and trademarks. + + d) Upon the expiration or termination of this Agreement, each party will cease using the trademarks, service marks and/or trade names of the other except: + + i) As the parties may agree in writing; or + + ii) To the extent permitted by applicable law. + +11. OWNERSHIP + + a) Client will retain all right, title and interest in and to the Client Site worldwide including all intellectual property rights, including but not limited to copyright, trademark, trade secrets, patents, moral rights or any derivative rights thereof. Any intellectual property rights, including but not limited to copyright, trademark, trade secrets, patents, moral rights or any derivative rights thereof, created by changes made by Excite to Impression Materials are the sole property of Client. + + b) Excite will retain all right, title, and interest in and to the Excite Network worldwide including, but not limited to, ownership of all copyrights, look and feel and other intellectual property rights therein. + +12. CONFIDENTIALITY AND USER DATA + + a) For the purposes of this Agreement, "Confidential Information" means information about the disclosing party's (or its suppliers') business or activities that is proprietary and confidential, which shall include all business, financial, technical and other information of a party marked or designated by such party as "confidential or + + 10 11 CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS. + + "proprietary" or information which, by the nature of the circumstances surrounding the disclosure, ought in good faith to be treated as confidential. + + b) Confidential Information will not include information that (i) is in or enters the public domain without breach of this Agreement, (ii) the receiving party lawfully receives from a third party without restriction on disclosure and without breach of a nondisclosure obligation, (iii) the receiving party knew prior to receiving such information from the disclosing party or (iv) the receiving party develops independent of any information originating from the disclosing party. + + c) Each party agrees (i) that it will not disclose to + + + + + + any third party or use any Confidential Information disclosed to it by the other except as expressly permitted in this Agreement and (ii) that it will take all reasonable measures to maintain the confidentiality of all Confidential Information of the other party in its possession or control, which will in no event be less than the measures it uses to maintain the confidentiality of its own information of similar importance. + + d) The usage reports provided by Excite to Client hereunder will be deemed to be the Confidential Information of Excite. + + e) The terms and conditions of this Agreement will be deemed to be Confidential Information and will not be disclosed without the written consent of the other party. + + f) For the purposes of this Agreement, "User Data" means all information submitted by users referred to the Client Site from the Excite Network during the term of the Agreement. Such User Data includes, but is not limited to, the number of purchase requests requested by such users, the number of purchase requests completed, the number of purchases completed and the dollar values of completed purchases The parties acknowledge that any individual user of the Internet could be a user of Excite, WebCrawler and/or Client through activities unrelated to this Agreement and that user data gathered independent of this Agreement, even from individuals who are users of both parties' services, will not be deemed to be "User Data" for the purposes of this Agreement. + + g) User Data will be owned by Client, and subject to the limitations contained herein, Client grants to Excite a non-exclusive license to use the User Data for the purposes of this Agreement. + + h) In order to facilitate optimization of Client's sponsorship program, Client will make good faith efforts to develop tracking and reporting capabilities to correlate information regarding transaction activity by users referred to the Client Site from the Excite Network to the various promotional placements and advertising banners displayed on the Excite Network. Client will provide to Excite all User Data and + + 11 12 CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS. + + user transaction reports collected by Client within thirty (30) days following the end of each calendar month during the term of this Agreement in a mutually-determined electronic format. + + i) Client will not use User Data to specifically target any Excite and/or WebCrawler users, as distinct from all users of the Client Site, for solicitations (except as specifically provided in this Agreement), either individually or in the aggregate, during the term of this Agreement and for a period of twelve (12) months following the expiration or termination of this Agreement. + + j) Neither party will sell, disclose, transfer or rent any User Data which could reasonably be used to identify a specific named individual ("Individual Data") to any third party nor will either party use Individual Data on behalf of any third party without the express permission of the individual user. Where user permission for dissemination of Individual Data to third parties has been obtained, each party will use commercially reasonable efforts to require the third party recipients of Individual Data to provide an "unsubscribe" feature in any email communications generated by, or on behalf of, the third party recipients of Individual Data. + + k) Notwithstanding the foregoing, each party may disclose Confidential Information or User Data (i) to the extent required by a court of competent jurisdiction or other governmental authority or otherwise as required by law or (ii) on a + + + + + + "need-to-know" basis under an obligation of confidentiality to its legal counsel, accountants, banks and other financing sources and their advisors. + +13. INDEMNITY + + a) Client will indemnify, defend and hold harmless Excite, its affiliates, officers, directors, employees, consultants and agents from any and all third party claims, liability, damages and/or costs (including, but not limited to, attorneys fees) arising from: + + i) Its breach of any representation or covenant in this Agreement; or + + ii) Any claim that Client's Impression Material infringes or violates any third party's copyright, patent, trade secret, trademark, right of publicity or right of privacy or contain any defamatory content; or + + iii) Any claim that Client's Impression Material and/or its display on the Excite Network violates any federal, state or local laws, regulations or statutes, including but not limited to restrictions on the sale, advertisement or promotion of vitamins, nutritional supplements, drugs or other health-related products; or + + 12 13 CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS. + + iv) Any claim of personal injury or product liability with respect to products or services sold, advertised or otherwise offered to consumers or third parties through display of Client's Impression Material on the Excite Network or links to the Client Site; or + + v) Any claim arising from content displayed on the Client Site. + + Excite will promptly notify Client of any and all such claims and will reasonably cooperate with Client with the defense and/or settlement thereof; provided that, if any settlement requires an affirmative obligation of, results in any ongoing liability to or prejudices or detrimentally impacts Excite in any way and such obligation, liability, prejudice or impact can reasonably be expected to be material, then such settlement shall require Excite's written consent (not to be unreasonably withheld or delayed) and Excite may have its own counsel in attendance at all proceedings and substantive negotiations relating to such claim. + + b) Excite will indemnify, defend and hold harmless Client, its affiliates, officers, directors, employees, consultants and agents from any and all third party claims, liability, damages and/or costs (including, but not limited to, attorneys fees) arising from: + + i) Its breach of any representation or covenant in this Agreement; or + + ii) Any claim arising from the Excite Network other than content or services provided by Client. + + Client will promptly notify Excite of any and all such claims and will reasonably cooperate with Excite with the defense and/or settlement thereof; provided that, if any settlement requires an affirmative obligation of, results in any ongoing liability to or prejudices or detrimentally impacts Client in any way and such obligation, liability, prejudice or impact can reasonably be expected to be material, then such settlement shall require Client's written consent (not to be unreasonably withheld or delayed) and Client may have its own counsel in attendance at all proceedings and substantive negotiations relating to such claim. + + + + + + c) EXCEPT AS SPECIFIED IN THIS AGREEMENT, NEITHER PARTY MAKES ANY WARRANTY IN CONNECTION WITH THE SUBJECT MATTER OF THIS AGREEMENT AND HEREBY DISCLAIMS ANY AND ALL IMPLIED WARRANTIES, INCLUDING ALL IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE REGARDING SUCH SUBJECT MATTER. + + 13 14 CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS. + +14. LIMITATION OF LIABILITY + + EXCEPT UNDER SECTIONS 13(a) AND 13(b), IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, WHETHER BASED ON BREACH OF CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE, WHETHER OR NOT THAT PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE. EXCEPT UNDER SECTIONS 13(a) AND 13(b), THE LIABILITY OF EITHER PARTY FOR DAMAGES OR ALLEGED DAMAGES HEREUNDER, WHETHER IN CONTRACT, TORT OR ANY OTHER LEGAL THEORY, IS LIMITED TO, AND WILL NOT EXCEED, THE AMOUNTS TO BE PAID BY CLIENT TO EXCITE HEREUNDER. + +15. DISPUTE RESOLUTION + + a) The parties agree that any breach of either of the parties' obligations regarding trademarks, service marks or trade names, confidentiality and/or User Data would result in irreparable injury for which there is no adequate remedy at law. Therefore, in the event of any breach or threatened breach of a party's obligations regarding trademarks, service marks or trade names or confidentiality, the aggrieved party will be entitled to seek equitable relief in addition to its other available legal remedies in a court of competent jurisdiction. + + b) In the event of disputes between the parties arising from or concerning in any manner the subject matter of this Agreement, other than disputes arising from or concerning trademarks, service marks or trade names, confidentiality and/or User Data, the parties will first attempt to resolve the dispute(s) through good faith negotiation. In the event that the dispute(s) cannot be resolved through good faith negotiation, the parties will refer the dispute(s) to a mutually acceptable mediator. + + c) In the event that disputes between the parties arising from or concerning in any manner the subject matter of this Agreement, other than disputes arising from or concerning trademarks, service marks or trade names, confidentiality and/or User Data, cannot be resolved through good faith negotiation and mediation, the parties will refer the dispute(s) to the American Arbitration Association for resolution through binding arbitration by a single arbitrator pursuant to the American Arbitration Association's rules applicable to commercial disputes. + +16. GENERAL + + a) Assignment. Neither party may assign this Agreement, in whole or in part, without the other party's written consent (which will not be unreasonably withheld or delayed), except that no such consent will be required in connection with (i) a merger, reorganization or sale of all, or substantially all, of such party's assets or its + + 14 15 CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS. + + Internet business assets (ii) either party's assignment and/or delegation of its rights and + + + + + + responsibilities hereunder to a wholly-owned subsidiary or affiliate or joint venture in which the assigning party holds an interest. Any attempt to assign this Agreement other than as permitted above will be null and void. + + b) Governing Law. This Agreement will be governed by and construed in accordance with the laws of the State of California, notwithstanding the actual state or country of residence or incorporation of Excite or Client. + + c) Notice. Any notice under this Agreement will be in writing and delivered by personal delivery, express courier, confirmed facsimile, confirmed email or certified or registered mail, return receipt requested, and will be deemed given upon personal delivery, one (1) day after deposit with express courier, upon confirmation of receipt of facsimile or email or five (5) days after deposit in the mail. Notices will be sent to a party at its address set forth in this Agreement or such other address as that party may specify in writing pursuant to this Section. + + d) No Agency. The parties are independent contractors and will have no power or authority to assume or create any obligation or responsibility on behalf of each other. This Agreement will not be construed to create or imply any partnership, agency or joint venture. + + e) Force Majeure. Any delay in or failure of performance by either party under this Agreement will not be considered a breach of this Agreement and will be excused to the extent caused by any occurrence beyond the reasonable control of such party including, but not limited to, acts of God, power outages and governmental restrictions. + + f) Severability. In the event that any of the provisions of this Agreement are held to be unenforceable by a court or arbitrator, the remaining portions of the Agreement will remain in full force and effect. + + g) Entire Agreement. This Agreement is the complete and exclusive agreement between the parties with respect to the subject matter hereof, superseding any prior agreements and communications (both written and oral) regarding such subject matter. This Agreement may only be modified, or any rights under it waived, by a written document executed by both parties. + + h) Counterparts. This Agreement may be executed in counterparts, each of which will serve to evidence the parties' binding agreement. + + 15 16 CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS. + +VITAMIN SHOPPE INDUSTRIES INC. EXCITE, INC. + + By: [SIG] By: [SIG] -------------------------------- -------------------------------- + +Name: J. Howard Name: Robert C. Hood ------------------------------ ------------------------------ + +Title: President/CEO Title: EVP/CFO ----------------------------- ----------------------------- + +Date: 9/23/98 Date: 9/29/98 ------------------------------ ------------------------------ + +4700 Westside Avenue 555 Broadway North Bergen, New Jersey 07047 Redwood City, California 94063 650.568.6000 (voice) 650.568.6030 (fax) + + + + + + 16 17 CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS. + + EXHIBIT A + + KEYWORDS + + acidophilus cholesterol greentree obesity medicine acids chondroitin healing omega aromatherapy adhd chromium picolinate health organic bodybuilding aids co q 10 herb pinnacle diet alternative medicine coenzyme q10 herb tea pms fitness amino acids complimentary herbal pregnant herbs andrew weil energy herbal extracts pregnancy health andro complex enzymmatic herbal tea prenatal homeopathic androstat therapy herbal teas prevention multivitamins Androstat 100 essential oils herbs protein nutrition androstat 6 ester hiv protein powders stress Androstene exercise holistic ripped vitamins androstenedione extract holistic healing rna vitamin antioxidant fat holistic medicine saint john's wort wellness antioxidants fatty acids homeopathic saw palmetto weightloss anxiety fen phen homeopathic schiff aphrodisiac phen fen natrol sex aphrodisiacs fiber nature sexual enhancer aroma fitness natural steroids aromatherapy garry null natural food solaray atkins ginkgo supplements source natural bodybuilder ginkgo biloba natural healing sports nutrition bodybuilders ginseng natural medicine st. johns wort bodybuilding glucosamine natures way st john's wort calcium green tea nature's way stress cancer green tree nutrition sulfate cats claw greentea nutritional alternative + + 17 18 CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS. + + medicine remedies coq10 homeopathy supplement country life iron supplements creatine kal tablets creatine kava teas monohydrate depression kava kava twinlab diet lactose vegetarian dietary magnesium vegetarians dione melatonin viagra disease mental alertness vitamin dna MetRx vitamins dr. andrew weil mother nature vitasave dr. atkins mother's nature weight lifting dr. weil msm weight loss dr. wiel msm sulphur weightlifting eas multivitamins weightloss echinacea natrol wellness yohimbe + + 18 19 CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS. + + EXHIBIT B + + MATCHLOGIC SERVICES + +AD MANAGEMENT, MEASUREMENT & OPTIMIZATION Ad Management, Measurement and Optimization refers to the suite of services and technologies to be used to measure and evaluate variables contributing to the performance of client marketing messages within the Excite Network. Descriptions of the services and technologies to be leveraged throughout the + + + + + +optimization process are highlighted below. + +CENTRALIZED AD SERVING Through its proprietary centralized ad serving infrastructure, MatchLogic will facilitate the trafficking, delivery, tracking and reporting of Client's banners throughout the Excite Network. During the ad management process, MatchLogic will employ TrueCount(sm) cache counting techniques as the underlying measurement technology for the reporting of client campaign performance data. Basic campaign performance data including primary impressions, clicks, click %, cache impressions and total impressions will be supplied to Client daily through an online interface. + +TRUEFFECT(sm) TruEffect(sm) refers to the process of establishing, tracking and communicating the relationship between locations from which users have interacted with Client's marketing messages and the activities they engaged in at the Client Site as a result of these interactions. TruEffect(sm) measurement will allow Client to directly relate user activity within the Client Site to marketing messages within the Excite Network. As a result of these measurements, Client will have the ability to optimize campaigns in order to drive actual user activities or transactions. Client will be able to identify the number of unique visitors coming to the Client Site or promotional areas, from which message and area they originated, and the number of measurable transactions these visitors performed. Additionally, measurements of reach and frequency will accompany this analysis. + +Upon successful implementation of TruEffect(sm), performance reporting will be available to Client on a daily basis through an online interface. + +LANDSCAPE(sm) LandscapE(sm) demographic profile reports will afford Client an effective means of understanding the visitor segments exposed to Client's messages or interacting with Client sponsored content areas within the Excite Network. All of the information contained within the demographic profiles is derived from consumers who have been both exposed to an advertising campaign and are also within MatchLogic's Digital 1:1(sm) database (MatchLogic's proprietary consumer database). When a subset of unique visitors taken from all visitors exposed to a Client's marketing message or content area are matched against the Digital 1:1(sm) database, demographic profiles are derived. The matched records create a sample of visitors that are used to demographically represent and statistically profile + + 19 20 CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS. + +each visitor segment. These profiles will allow Client to compare its understanding of its customers offline to its customers online as a basis for more effective segmenting and future targeting. + +LandscapE(sm) reports are generated on a campaign basis and will include measurements of campaign reach by Age, Gender, Age/Gender, Household Income, and Household Income/Age. These reports will be made available to Client once statistically significant profiles have been established. + +TRUESELECT(sm) TrueSelect(sm) is MatchLogic's centralized advertising targeting system. TrueSelect(sm) enables MatchLogic to project demographics of users across the Internet based on our Digital 1:1 database, user traffic and user search patterns. The first implementation of this technology will be Virtual Keywords slated for release in 4Q98. Virtual Keywords will allow MatchLogic to actively target a user on the Excite Network based on the user's input of search terms at a previous point in time. TrueSelect(sm) will be able to track and target users by Virtual Keywords on both an inter-day and intra-day basis. Following Virtual Keywords, TrueSelect(sm) capabilities will enable marketers to actively target specific users based on predetermined demographic or lifestyle information in real time. + +Upon release of this technology, delivery of TrueSelect(sm) targeted messaging for Client is highly dependent on a number of qualifying criteria. A critical qualifier for the implementation of TrueSelect(sm) will be the establishment of a significant behavioral profile target for Client's customers as highlighted within the LandscapE(sm) services description above. + +DELIVERE(sm) DeliverE(sm), MatchLogic's email marketing service will be leveraged to deliver email marketing campaigns on behalf of Vitamin Shoppe. The DeliverE(sm) team will consult with Client to evaluate current business objectives (branding, acquisition, retention, reactivation, etc.) and develop e-mail strategies that meet these specific objectives. Once appropriate strategies have been established, MatchLogic will target both MatchLogic and Excite registered users for the facilitation of the Client's program. Performance results for these campaigns will be provided to Client and assist in the development of strategies for subsequent e-mail campaigns. + + + + + +Projected delivery schedules for DeliverE(sm) services over the [*****]-year term of this agreement are as follows. + + 20 21 CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS. + +are matched against the Digital 1:1(sm) database, demographic profiles are derived. The matched records create a sample of visitors that are used to demographically represent and statistically profile each visitor segment. These profiles will allow Client to compare its understanding of its customers offline to its customers online as a basis for more effective segmenting and future targeting. + +LandscapE(sm) reports are generated on a campaign basis and will include measurements of campaign reach by Age, Gender, Age/Gender, Household Income, and Household Income/Age. These reports will be made available to Client once statistically significant profiles have been established. + +TRUESELECT(sm) + +TrueSelect(sm) is MatchLogic' centralized advertising targeting system. TrueSelect(sm) enables MatchLogic to project demographics of users across the Internet based on our Digital 1:1 database, user traffic and user search patterns. The first implementation of this technology will be Virtual Keywords stated for release in 4Q98. Virtual Keywords will allow MatchLogic to actively target a user on the Excite Network based on the user's input of search terms at a previous point in time. TrueSelect(sm) will be able to track and target users by Virtual Keywords on both an inter-day and intra-day basis. Following Virtual Keywords, TrueSelect(sm) capabilities will enable marketers to actively target specific users based on predetermined demographic or lifestyle information in real time. + +Upon release of this technology, delivery of TrueSelect(sm) targeted messaging for Client is highly dependent on a number of qualifying criteria. A critical qualifier for the implementation of TrueSelect(sm) will be the establishment of a significant behavioral profile target for Client's customers as highlighted within the LandscapE(sm) services description above. + +DELIVERE(sm) + +DeliverE(sm), MatchLogic's email marketing service will be leveraged to deliver email marketing campaigns on behalf of Vitamin Shoppe. The DeliverE(sm) team will consult with Client to evaluate current business objectives (branding, acquisition, retention, reactivation, etc.) and develop e-mail strategies that meet these specific objectives. Once appropriate strategies have been established, MatchLogic will target both MatchLogic and Excite registered users for the facilitation of the Client's program. Performance results for these campaigns will be provided to Client and assist in the development of strategies for subsequent e-mail campaigns. + +Projected delivery schedules for DeliverE(sm) services over the [*****]-year term of this agreement are as follows. + +[*****] TESTS INCLUSIONS VOLUME - ---------------------------------------------------------------------------- 12 Exclusive Offer 2 e-mail offer tests [*****] Tests Push against best offer [*****] + + Target model creation [*****] + + Model role-out [*****] - ---------------------------------------------------------------------------- 7 Prospecting Co-op Offer role-out to co-op [*****] Tests file - ---------------------------------------------------------------------------- [*****] - ---------------------------------------------------------------------------- + +[*****] TESTS INCLUSIONS VOLUME - ---------------------------------------------------------------------------- 12 Exclusive Offer 2 e-mail offer tests [*****] Tests Push against best offer [*****] + + + + + + Target model creation [*****] + + Model role-out [*****] - ---------------------------------------------------------------------------- 13 Prospecting Co-op Offer role-out to co-op [*****] Tests file - ---------------------------------------------------------------------------- [*****] - ---------------------------------------------------------------------------- + +Above listed DeliverE(sm) services are to be allocated to meet Client's needs and overall production schedule. + + 21 22 CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS. + + EXHIBIT C + + ANNUAL IMPRESSION DELIVERY SCHEDULE + +Vitamin Shoppe Industries WC/Excite Placement Details *LINE ITEM PLACEMENTS AND IMPRESSIONS ARE ESTIMATES ONLY AN WILL CHANGE OVER TIME + +EXHIBIT C + +Products Description Item # [*****] Estimated [*****] Estimated TOTALS in IMPS IMPS Contract Excite Integrated Links Excite Japan Sponsorship/Promotion Positions #3b [*****] [*****] [*****] Excite Nutrition & Vitamins Sponsorship/Promotion Positions #3c [*****] [*****] [*****] 0 0 0 - ---------------------------------------------------------------------------------------------------------------------------- Excite Links, subtotal [*****] [*****] [*****] - ---------------------------------------------------------------------------------------------------------------------------- Excite Banners NONE - ---------------------------------------------------------------------------------------------------------------------------- Excite Banner subtotal [*****] [*****] [*****] - ---------------------------------------------------------------------------------------------------------------------------- Excite Links/Banner subtotal [*****] [*****] [*****] - ---------------------------------------------------------------------------------------------------------------------------- WebCrawler Integrated Links WC Health Home Page Home Page Rotation #1b [*****] [*****] [*****] WC Nutrition & Vitamin Sub Channel Link #1c [*****] [*****] [*****] WC Health Channel Promotional Opportunities, [*****] [*****] [*****] i.e., alternative medicine #1d WC Health Channel Sponsorship Strip #1e [*****] [*****] [*****] WC Shopping Channel Under Health & Fitness Sub Channel #2b [*****] [*****] [*****] WC Shopping Channel Under Health & Fitness/ Groceries Sub Channel #2c [*****] [*****] [*****] 0 0 0 - ---------------------------------------------------------------------------------------------------------------------------- WebCrawler Links Subtotal [*****] [*****] [*****] - ---------------------------------------------------------------------------------------------------------------------------- WebCrawler Banners + +WC Keywords Search #5a [*****] [*****] [*****] WC Health Channel Channel Rotation #5b [*****] [*****] [*****] WC Health Channel Mutually determined departments #5c [*****] [*****] [*****] WC General Rotation General Rotation across WC site #5d [*****] [*****] [*****] 0 - ---------------------------------------------------------------------------------------------------------------------------- WebCrawler Banner subtotal [*****] [*****] [*****] - ---------------------------------------------------------------------------------------------------------------------------- WebCrawler Links/Banner subtotal [*****] [*****] [*****] - ---------------------------------------------------------------------------------------------------------------------------- 0 - ---------------------------------------------------------------------------------------------------------------------------- 0 - ----------------------------------------------------------------------------------------------------------------------------------- 0 - ----------------------------------------------------------------------------------------------------------------------------------- S&P Links Total [*****] [*****] [*****] S&P Banner Total [*****] [*****] [*****] + + + + + +- ---------------------------------------------------------------------------------------------------------------------------- Grand Total [*****] [*****] [*****] - ---------------------------------------------------------------------------------------------------------------------------- + +Vitamin Shoppe E Sponsorship Agr/bja Version 980918 + + 22 + +23 CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS. + +During the term of the Agreement, the parties agree to cooperate in good faith and use commercially reasonable efforts to evaluate the quality and performance of the placements used to deliver the impressions described in the Agreement and to modify such placements in an effort to reach the objectives set forth in this Agreement. + + 23 24 CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS. + + EXHIBIT D + + CLIENT'S COMPETITORS + +Acta Pharmacal Nutritional Warehouse All Vitamins Phillips Nutritional Austin Nutritional Puritans Pride BenSalem Naturals Reach4life B-Vital Realtime Chayas Chemical-Free S. Shiraishi Office, Inc. Cherokee Naturals, Inc Shop Vitamins Club Vitamin The Herb Shop GNC The Herb Shoppe Good Life Nutrition The Nickel and Thyme Shoppe Green Tree The Vitamin Source Green Turtle Bay Vitamin The Vitamin Tree Greenshack Direct US Health Distributors, Inc Health and Vitamin Express Vita Save Health Depot VitaCare Infinity 2 VitaFit Jamieson Natural Sources Vital Life Karemore Vitamin Company Vitamin Depot Kava Systems Vitamin Express L & H Vitamins Vitamin House Life Plus Vitamins Vitamin House MineralNet Vitamin Shack Mother Nature's General Store Vitamin Warehouse, Inc. Mountain Naturals Vitamins Vitamins for Life My Vitamins Vitamins Online Nature Sunshine Vitamins.com Nature Sunshine Herb and Vitamins Vitanet Noah's Ark Vitawise Nutritional Direct Wholesale Vitamins + + 24 \ No newline at end of file diff --git a/full_contract_txt/VIVINT SOLAR, INC. - NON-COMPETITION AGREEMENT.txt b/full_contract_txt/VIVINT SOLAR, INC. - NON-COMPETITION AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..7a5f2580abb31c93c99ba50ea7606b58209e9c2c --- /dev/null +++ b/full_contract_txt/VIVINT SOLAR, INC. - NON-COMPETITION AGREEMENT.txt @@ -0,0 +1,55 @@ +Exhibit 10.1 NON-COMPETITION AGREEMENT AMENDMENT NO. 1 This NON-COMPETITION AGREEMENT AMENDMENT NO. 1 (this "Amendment") is entered into as of August 16, 2017, by and between VIVINT SOLAR, INC., a Delaware corporation (together with its successors and permitted assigns, "Vivint Solar"), and VIVINT, INC., a Utah corporation (together with its successors and permitted assigns "Vivint"). Each of Vivint Solar and Vivint may also be referred to herein individually as a "Party", and collectively as the "Parties". RECITALS + +WHEREAS, Vivint Solar and Vivint are affiliate business entities, under the common control and ownership of 313 Acquisition, LLC, a Delaware limited liability company. + +WHEREAS, the Parties had entered into a Non-Competition Agreement dated September 30, 2014, by and between the Parties (collectively, the "Non-Competition Agreement") to set out certain restrictive covenants of each Party. + +WHEREAS, the Parties wish to amend the existing obligations under the Non-Competition Agreement. + +WHEREAS, the Parties also desire to extend the term of the non-solicitation obligations under the Non-Competition Agreement. + +AGREEMENT + +NOW, THEREFORE, in consideration of the mutual covenants, agreements and conditions set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows: + +1. Definitions. Any capitalized term used but not defined in this Amendment will have the meaning set forth for that term in the Non-Competition Agreement or the Master Framework Agreement, dated September 30, 2016, by and between the Parties (the "Master Framework Agreement"). + +2. Non-Competition. Section 2 of the Non-Competition Agreement shall be deleted in its entirety and the other provisions of the Non-Competition Agreement that relate to such Section 2, including, without limitation, Sections 5 and 6, shall be amended hereby to delete the applicable references, and provisions solely applicable to, Section 2, mutatis mutandis. 3. Non-Solicitation. Section 4 of the Non-Competition Agreement is hereby deleted in its entirety and replaced with the following: + +"Term. This Agreement will become effective on the Effective Date, and will continue until the expiration of the "Sales Term" as that term is defined in the Sales Dealer Agreement dated as of August 16, 2017 between Vivint and Vivint Solar Developer, LLC (the "Term")." 4. Continuation. This Amendment will apply and be effective only with respect to the provisions of the Non- Competition Agreement specifically referred to herein. Except as otherwise set forth in this Amendment, the Non-Competition Agreement will continue in full force and effect in accordance with its terms. + +1 + + + + + + 5. Master Framework Agreement. This Amendment is governed by the Master Framework Agreement, including, without limitation, the provisions of Sections 4 (Confidentiality) and 6 (Miscellaneous) of the Master Framework Agreement. + +[SIGNATURE PAGES FOLLOW] + +2 + + + + + + IN WITNESS WHEREOF, the Parties have executed this Non-Competition Agreement Amendment No. 1 as of the date first written above. + + + +VIVINT SOLAR: VIVINT SOLAR, INC., a Delaware corporation By: /s/ David Bywater Name: David Bywater Title: Chief Executive Officer + +[SIGNATURE PAGES CONTINUE ON FOLLOWING PAGE] + + + +[SIGNATURE PAGE] + + + + + +VIVINT: VIVINT, INC., a Utah corporation By: /s/ Alex J. Dunn Name: Alex J. Dunn Title: President + +[SIGNATURE PAGE] \ No newline at end of file diff --git a/full_contract_txt/VNUE,INC_07_10_2015-EX-10.1-SPONSORSHIP AGREEMENT.txt b/full_contract_txt/VNUE,INC_07_10_2015-EX-10.1-SPONSORSHIP AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..1363ac2d81f59cd6def21ecb12953c785d24551c --- /dev/null +++ b/full_contract_txt/VNUE,INC_07_10_2015-EX-10.1-SPONSORSHIP AGREEMENT.txt @@ -0,0 +1,89 @@ +Exhibit 10.1 SPONSORSHIP AGREEMENT BY AND BETWEEN ANTHEMIC, LLC & VNUE This Sponsorship Agreement (the Agreement) is entered into as of JUNE 23, 2015 (the "Effective Date") by and between ANTHEMIC, LLC ("ANTHEMIC") and VNUE INC (the "Sponsor"). A. ANTHEMIC is producing FLOODFEST Chicago 2015. In this Agreement, "Event" means the FLOODfest Event at the Virgin Hotel Chicago. The Event is scheduled for Thursday July 30, 2015 thru Saturday, August 1st, 2015 (the "Event Date(s)"). B. VNUE is a video streaming App/Technology Company. ANTHEMIC and VNUE both want VNUE to be a sponsor of the Event under the terms of this Agreement. For and in consideration of the mutual covenants, rights, and obligations set forth in this Agreement, the parties agree as follows: 1. Sponsorship. (a) During the term of this Agreement, the Sponsor will be a co-presenting sponsor of FLOODfest Chicago at Virgin Hotel, which entitles the Sponsor to the following: (i) Sponsor will be a non-exclusive co-presenting sponsor of the Event. (ii) ANTHEMIC shall provide to Sponsor space for a VNUE activation on the 3rd Floor at Virgin Hotel (the "Sponsor area"). This space will be roughly 10 feet by 10 feet (100 square feet). (iii) Sponsor shall receive access to the On-Site Event Dates location for onsite distribution of Company approved marketing materials. Specific amount of said materials To Be Determined, after being mutually agreed upon by both ANTHEMIC and VNUE. (iv) Sponsor will be included as co-presenting partner upon on-site signage. (v) Distribute approved promotional materials as part of VNUE's activation, VNUE responsible for staffing of said activation. (vi) Conduct demonstrations, approved activation in designated area on 3rd Floor (vii) Name or logo usage of FLOODfest Chicago use, No Rights for use of official Lollapalooza Festival are given as part of this sponsorship. (viii) Rights to event marks subject to FLOOD Magazine and ANTHEMIC approval. (ix) The Sponsor's logo or name on Event website and opt in on RSVP page for event (x) Full page ad in fall issue of FLOOD Magazine (xi) Dedicated e-mail sent to attendees post-event to watch and/ or listen to FLOODfest content + +Page of 1 of Sponsorship Agreement + + + + + + + + (xii) One month ROS of FLOODMAGAZINE.COM. Campaign beginning August 2015. All finished art and deliverables must be sent from VNUE to ANTHEMIC by no later than July 15, 2015 to insure inclusion. Refer to media plan for specific dates. (xiii) The Sponsor's logo or name on all print and/or web Event collateral (xiv) The Sponsor's logo or name included on Event website and opt-in RSVP pages, as follows: FLOODmagazine.com/ FLOODfestChicago and/ or FLOODfest.com (xv) The Sponsor's logo or name also included on any FLOODfest Chicago flyers (digital and/ or physical). (xvi) The Sponsor's logo or name also included on FLOODfest Chicago-dedicated email blasts, both pre and post event. These email blasts will include a call to action to watch and/ or listen to content from FLOODfest Chicago shows, with a link to download the VNUE app. (xvii) Post-event email blast(s) will go out as soon as possible, once the FLOODfest Chicago content is ready, ideally targeting that next Monday, August 10, 2015. Formal blast date will be dependent upon turn-around time of content from VNUE (maximum ANTHEMIC/ FLOOD Magazine turnaround time = VNUE content delivery date+7 days). This post-event email blast will go out to tall ANTHEMIC and FLOOD Magazine RSVP's, as well as our FLOOD Magazine's national newsletter list of roughly 100,000 recipients. (xviii) There will be a press release generated by ANTHEMIC and FLOOD Magazine for FLOODfest Chicago. This press release will include mention of VNUE as co-presenting sponsor of said event. (xix) ANTHEMIC and FLOOD Magazine will promote FLOODfest Chicago content page(s), including The Sponsor logo or name via FLOOD Magazine socials including: Twitter, Facebook and Instagram. (xx) FLOOD Magazine will have at least one future editorial piece based around FLOODfest Chicago content, and VNUE will be featured within this piece. (xxi) FLOODfest Chicago data will be collected, compiled and forwarded to VNUE by Monday August 10, 2015. (xxii) VNUE may include approved FLOOD Magazine logo or name on top of videos. VNUE is also approved to use the phrasing "FLOODfest LIVE at Virgin Hotel Chicago" above applicable FLOODfest Chicago video content. (xxiii) ANTHEMIC and/ or FLOOD Magazine agree to introduce key VNUE personnel/ staff to key VIRGIN HOTEL CHICAGO personnel/ staff, upon receipt of final payment, on or before July 15, 2015. (b) All costs associated with the creation, operation and management of the Sponsor Area and any activities conducted, included (without limitation) the set-up, breakdown and staffing of the Sponsor Area, recording and filming of live shows, and artist and label/ mechanical clearances shall be the sole responsibility of the Sponsor. + +Page of 2 of Sponsorship Agreement + + + + + + + + (c) ANTHEMIC will have no liability whatsoever for (and Sponsor shall indemnify and hold ANTHEMIC harmless for) any injuries to persons, or loss of damage to property arising out of or in any way related to the Sponsor Area, or to any property, materials, products and/or merchandise which Sponsor uses, distributes and/or exhibits during Event Dates. 2. Sponsorship Consideration. (a) To be a sponsor of the Event, the Sponsor will pay ANTHEMIC the following: + +Fee Due Dates + +$75,000 - Sponsorship Fee $50,000 due upon receipt of this term sheet $25,000 final balance payment due upon announcement date of July 15, 2015. + + (b) If the Sponsor fails to pay ANTHEMIC within the designated time period, then interest will begin to accrue immediately on the past due amount at the rate of the lesser of the maximum amount allowed by law or 10% annually. If it becomes necessary for ANTHEMIC to retain legal counsel to collect any portion of the fees due under this Agreement, in addition to all such fees, the Sponsor will be liable for payment of all legal fees incurred by ANTHEMIC plus interest at the maximum rate permitted by law on any late payments plus any other costs of collection. 3. Term and Termination: This term of this Agreement commences on the Effective Date and terminates on August 2nd, 2015 upon completion of event. ANTHEMIC may at any time terminate this Agreement if the Sponsor breaches any material term or provision of this Agreement. 4. Sponsorship of Future FLOODfest Chicago event. Before April 1, 2016 ANTHEMIC will not discuss in any manner with any person or entity (other than the Sponsor) to be a sponsor of the Event in the Video App category. If ANTHEMIC produces the Event in 2016 and seeks a sponsor in the category, ANTHEMIC will first contact the Sponsor and provide the Sponsor with written notice (the "Notice) of the terms under which the Sponsor can be the category sponsor for the 2016 Event. The Sponsor will have 15 days from receipt of the Notice to accept the terms to be the category sponsor of the 2014 Event. If the Sponsor decides not to be the category sponsor of the 2016 Event or fails to timely respond to the Notice, then ANTHEMIC may approach other parties to be the category sponsor. + +Page of 3 of Sponsorship Agreement + + + + + + + + 5. License. (a) The Sponsor grants ANTHEMIC a license to use the Sponsor's name, logo, and other identifying characteristics in promoting the Event. ANTHEMIC may use the Sponsor's name, logo, and other identifying characteristics on merchandise related to the Event, and the Sponsor is not entitled to any compensation from the sale of such merchandise. The right to use the Sponsor's name, logo and other identifying characteristics in connection with merchandise for the 2015 Event survives termination of this Agreement. After termination of this Agreement, ANTHEMIC may not design new merchandise that includes the Sponsor's name, logo, or other identifying characteristics for the 2015 Event but may produce additional previously designed and approved merchandise. (b) During the term of this Agreement, the Sponsor may identify itself as a sponsor of the Event in any and all of its advertising for the Sponsor's products and or services in the Category. ANTHEMIC will provide the Sponsor with a suite of official logos and images for the Event to use on advertising, web site and other avenues as approved by ANTHEMIC. Any use by the Sponsor of the Event's name or logo must be approved in advance by ANTHEMIC. Any creative work used by the Sponsor with respect to this Agreement must be approved by ANTHEMIC. (c) Any use by ANTHEMIC of the Sponsor's name or logo, must be approved in advance by the Sponsor. Subject to the preceding, ANTHEMIC has absolute control and discretion regarding all signage at the Event. (d) ANTHEMIC acknowledges the Sponsor's exclusive ownership in the Sponsor's trademarks and further acknowledges that the trademarks are unique and original to the Sponsor and that the Sponsor is the owner of the trademarks. ANTHEMIC will not, at any time during or after the Effective Date, dispute or contest, directly or indirectly, the Sponsor's exclusive ownership in the Sponsor's trademarks. ANTHEMIC acknowledges that its use of the Sponsor's trademarks inures to the Sponsor's benefit, and that ANTHEMIC will not acquire any ownership in the Sponsor's trademarks as a result of the license granted by this Agreement. (e) The Sponsor acknowledges ANTHEMIC's exclusive ownership in their respective trademarks and further acknowledges that the trademarks are unique and original to ANTHEMIC and that ANTHEMIC are the owners of their respective trademarks. The Sponsor will not, at any time after the Effective Date, dispute or contest, directly or indirectly, ANTHEMIC's exclusive ownership in their respective trademarks. The Sponsor acknowledges that its use of ANTHEMIC's trademarks inures to ANTHEMIC's benefit, and that the Sponsor will not acquire any ownership in ANTHEMIC's trademarks as a result of the license granted by this Agreement. + +Page of 4 of Sponsorship Agreement + + + + + + + + The Sponsor acknowledges that it has no claims or rights in the "FLOODfest" trademark and, during or after the Term of this Agreement, will not assert any claim in the "FLOODfest" trademark. 6. Sponsor Merchandise. The Sponsor may not distribute any merchandise or articles at the Event without ANTHEMIC's prior written consent. 7. Force Majeure. Any delay or failure of either party to perform its obligations under this Agreement is excused to the extent that it is caused by an event or occurrence beyond its reasonable control, including acts of God, actions by governmental authority (whether valid or invalid), fires, floods, windstorms, explosions, riots, natural disasters, wars, sabotage or labor problems, provided the party claiming force majeure promptly notifies the other party of the event of force majeure, the anticipated duration of the event of force majeure, and the steps being taken to remedy the failure. 8. Rain or Shine. ANTHEMIC anticipates that the Event will be held regardless of the weather. If the Event cannot be held on the scheduled dates, ANTHEMIC will make good faith efforts to re-schedule the Event. The Sponsor must provide the consideration in Section 2 regardless of whether the Event is actually held. 9. Warranties. (a) The Sponsor's Warranty. The Sponsor warrants to ANTHEMIC that: (i) the Sponsor has the right and authority to enter into and perform its obligations under this Agreement; (ii) the Sponsor will perform its obligations under this Agreement in a commercially reasonable manner; (iii) the Sponsor's marks do not and will not violate any applicable law or regulation or infringe any proprietary, intellectual property, contract or tort right of any person; and (iv) the Sponsor owns its marks and all intellectual property rights therein. (b) ANTHEMIC Warranty. ANTHEMIC represents and warrants to the Sponsor that: (i) ANTHEMIC has the rights and authority to enter into and perform its obligations under this Agreement, and that, in doing so, it will not violate the rights of any third parties; (ii) any ANTHEMIC- provided materials (including trademarks) will not contain any content, materials or advertising that actually or potentially violates any applicable law or regulation or infringe any proprietary, intellectual property, contract or tort right of any person; and (iii) ANTHEMIC will perform its obligations under this Agreement in a commercially reasonable manner. + +Page of 5 of Sponsorship Agreement + + + + + + + + 10. Indemnification. (a) By The Sponsor. The Sponsor will indemnify, hold harmless and defend ANTHEMIC, and their directors, officers, shareholders, members, managers, employees and agents from and against any action, claim, demand, expense, or liability, including reasonable attorneys' fees and court costs incurred in connection with any claim, demand, or suit for damages, injunction, or other relief to the extent such claim arises out of: (i) any allegation that the Sponsor's marks infringe a third person's copyright or trademark right, or misappropriate a third person's trade secret; (ii) any gross negligence or willful misconduct of the Sponsor; (iii) Sponsor's products; (iv) consumer or other contesting/ prizing. ANTHEMIC will have the right to participate, at its own cost, in the defense of any such claim through counsel of its own choosing. (b) By ANTHEMIC. ANTHEMIC will indemnify, hold harmless and defend the Sponsor, and its directors, officers, employees and agents from and against any action, claim, demand, expense, or liability, including reasonable attorneys' fees and court costs incurred in connection with any claim, demand, or suit for damages, injunction, or other relief to the extent such claim arises out of: (i) any allegation that ANTHEMIC's marks infringe a third person's copyright or trademark right, or misappropriate a third person's trade secret; or (ii) any gross negligence or willful misconduct of ANTHEMIC. The Sponsor will have the right to participate, at its own cost, in the defense of any such claim through counsel of its own choosing. 11. Insurance. Without limiting or qualifying the Sponsor's liabilities, obligations, or indemnities, before the Event, the Sponsor will obtain, at its sole cost and expense, a comprehensive general liability insurance policy from a company acceptable to ANTHEMIC and authorized to do business in the state of Illinois with limits of no less than $1,000,000.00 per occurrence and $2,000,000.00 as an annual aggregate. The insurance mentioned in the preceding sentence will name ANTHEMIC as additional insured. The Sponsor will also maintain any statutorily required workers compensation insurance. The Sponsor will provide ANTHEMIC with properly executed certificates of insurance before the Sponsor provides any products or services at the Event, and the insurance will contain a provision that it cannot be reduced or cancelled unless and until the insurance company notifies ANTHEMIC. Any third party that performs services on the Event grounds on behalf of the Sponsor will be required to satisfy the same insurance requirements as provided in this section. 12. Independent Contractors. The parties and their respective personnel, are and will be independent contractors and neither party by virtue of this Agreement will have any right, power or authority to act or create any obligation on behalf of the other party, unless expressly provided in this Agreement. + +Page of 6 of Sponsorship Agreement + + + + + + + + 13. Notices. All notices and payment given in accordance with this Agreement will be effective if hand delivered or sent by overnight courier or by certified mail, return receipt requested to the following addresses: ANTHEMIC, LLC 5810 W. 3rd Street LA, CA 90036 Attn: Alan Sartirana VNUE INC 2003 Western Avenue, Suite 460 Seattle, Washington 98121 ATTN: Matthew Carona Addresses for notice may be changed from time to time by written notice to the other party. Any communication or payment given by mail will be effective upon the earlier of (a) five business days following deposit in a post office or other official depository under the care and custody of the United States Postal Service; or (b) actual receipt, as indicated by the return receipt. If notice or payment is given by personal delivery or by overnight air courier, the notice or payment will be effective when delivered to the appropriate address set forth above. 14. LIMITATION OF DAMAGES. EXCEPT FOR INDEMNIFICATION OBLIGATIONS DUE TO LIABILITIES TO THIRD PARTIES, NOTWITHSTANDING ANY PROVISION CONTAINED IN THIS AGREEMENT TO THE CONTRARY, NO PARTY TO THIS AGREEMENT WILL BE LIABLE TO ANY OTHER PARTY TO THIS AGREEMENT FOR ANY INCIDENTAL, INDIRECT, SPECIAL, CONSEQUENTIAL OR PUNITIVE DAMAGES (INCLUDING DAMAGES FOR LOSS OF USE, POWER, BUSINESS GOOD WILL, REVENUE OR PROFIT, NOR FOR INCREASED EXPENSES, OR BUSINESS INTERRUPTION) ARISING OUT OF OR RELATED TO THE PERFORMANCE OR NON PERFORMANCE OF THIS AGREEMENT UNLESS THE DAMAGES AROSE DUE TO A PARTY'S GROSS NEGLIGENCE OR WILLFUL BREACH OF THIS AGREEMENT. 15. Survival. Those provisions of this Agreement that by their nature extend beyond termination or expiration of this Agreement will survive such termination or expiration. 16. Assignment. This Agreement is personal to each of the parties, and neither party may assign or delegate any of its rights or obligations under this Agreement without first obtaining the other party's written consent. + +Page of 7 of Sponsorship Agreement + + + + + + + + 17. Governing Law and Venue. This Agreement is to be governed and construed according to the laws of the State of California without regard to conflicts of law. The proper exclusive venue for resolution of any dispute related to this Agreement is only in Los Angeles, California, and both parties consent to jurisdiction and venue in Los Angeles, California. 18. Entire Agreement. This Agreement contains the entire agreement between the parties relative to the subject matter and supersedes any other prior understandings, written or oral, between the parties with respect to this subject matter. No variations, modifications, or changes in the Agreement are binding on any party to the Agreement unless set forth in a document duly executed by or on behalf of such parties. 19. Section References. When this Agreement makes reference to an article, section, paragraph, clause, schedule or exhibit, that reference is to an article, section, paragraph, clause, schedule or exhibit of this Agreement unless the context clearly indicates otherwise. Whenever the words "include," "includes," or "including" are used in this Agreement, they are deemed to be followed by the words "without limitation." 20. Severability. If a mediator, arbitrator, or court holds, for any reason, that one or more provisions of this Agreement is invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability will not affect any other provision of this Agreement, but such provision will be deemed deleted, and the deletion will not affect the validity of other provisions of this Agreement. 21. Counterparts. The parties may execute this Agreement in any number of counterparts, each of which is deemed an original, but all of which together constitute one and the same instrument. This Agreement may be executed by facsimile, PDF, or other electronic signature. 22. Construction. All parties have been advised to seek their own independent counsel concerning the interpretation and legal effect of this Agreement and have either obtained such counsel or have intentionally refrained from doing so and have knowingly and voluntarily waived such right. Consequently, the normal rule of construction to the effect that any drafting ambiguities are to be resolved against the drafting party will not be employed in the interpretation of this Agreement or any amendment or exhibits. + +Page of 8 of Sponsorship Agreement + + + + + + + + By their representative's signature, the parties agree to and accept this Agreement. ANTHEMIC, LLC VNUE, INC By: Alan Sartirana By: /s/ Matthew Carona Title: CEO/ Founder Title: CEO Date: June 23, 2015 Date: June 23rd 2015 + +Page of 9 of Sponsorship Agreement \ No newline at end of file diff --git a/full_contract_txt/VerizonAbsLlc_20200123_8-K_EX-10.4_11952335_EX-10.4_Service Agreement.txt b/full_contract_txt/VerizonAbsLlc_20200123_8-K_EX-10.4_11952335_EX-10.4_Service Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..6fbfde04f6aaf97f5fd71b3ff338784724af799f --- /dev/null +++ b/full_contract_txt/VerizonAbsLlc_20200123_8-K_EX-10.4_11952335_EX-10.4_Service Agreement.txt @@ -0,0 +1,2689 @@ +Exhibit 10.4 + +FORM OF TRANSFER AND SERVICING AGREEMENT + +among + +VERIZON OWNER TRUST 2020-A, as Issuer, + +VERIZON ABS LLC, as Depositor + +and + +CELLCO PARTNERSHIP d/b/a VERIZON WIRELESS, as Servicer, Marketing Agent and Custodian + +Dated as of January 29, 2020 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +TABLE OF CONTENTS + +ARTICLE I USAGE AND DEFINITIONS 1 Section 1.1 Usage and Definitions 1 + +ARTICLE II TRANSFER AND ACQUISITION OF DEPOSITOR TRANSFERRED PROPERTY; REPRESENTATIONS AND WARRANTIES + +Section 2.1 Transfers of Depositor Transferred Property 1 Section 2.2 Acknowledgement of Further Assignments 3 Section 2.3 Savings Clause 3 Section 2.4 Representations and Warranties About Depositor Transferred Property. 3 Section 2.5 Originators' Reacquisition and Servicer's Acquisition of Receivables for Breach of Representations 5 + +Section 2.6 Originators' Reacquisition or Servicer's Acquisition of Bankruptcy Surrendered Receivables 6 + +ARTICLE III SERVICING OF RECEIVABLES 7 Section 3.1 Engagement 7 Section 3.2 Servicing of Receivables. 7 Section 3.3 Servicer's Acquisition of Receivables 9 Section 3.4 Sale of Written-Off Receivables 10 Section 3.5 Servicer Reports and Compliance Statements 11 Section 3.6 Review of Servicer's Records 12 Section 3.7 Servicer's Authorized and Responsible Persons 13 Section 3.8 Servicer's Fees 13 Section 3.9 Servicer's Expenses 13 Section 3.10 Custodian. 13 Section 3.11 Marketing Agent 14 Section 3.12 Termination of Upgrade Programs; Credits Related to Upgrade Programs 15 Section 3.13 Notices to Obligors 16 + +ARTICLE IV ACCOUNTS, COLLECTIONS AND APPLICATION OF FUNDS 16 Section 4.1 Bank Accounts 16 Section 4.2 Investment of Funds in Bank Accounts 18 Section 4.3 Deposits and Payments 19 Section 4.4 Reserve Account; Negative Carry Account; Acquisition Account 21 Section 4.5 Direction to Indenture Trustee for Distributions 22 + +ARTICLE V DEPOSITOR 23 Section 5.1 Depositor's Representations and Warranties 23 Section 5.2 Liability of Depositor 24 Section 5.3 Merger, Consolidation, Succession or Assignment 25 Section 5.4 Depositor May Own Notes 25 Section 5.5 Depositor's Authorized and Responsible Persons 25 Section 5.6 Company Existence 25 Section 5.7 No Division 25 + +ARTICLE VI SERVICER AND MARKETING AGENT 25 Section 6.1 Servicer's and Marketing Agent's Representations and Warranties 25 Section 6.2 Liability of Servicer and Marketing Agent 29 Section 6.3 Indemnities of Servicer and the Marketing Agent 29 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +Section 6.4 Delegation and Contracting 31 Section 6.5 Servicer May Own Notes 31 Section 6.6 Annual Statement as to Compliance 31 Section 6.7 Assessment of Compliance and Accountants' Attestation 31 + +ARTICLE VII SERVICER RESIGNATION AND TERMINATION; SUCCESSOR SERVICER 32 Section 7.1 No Resignation 32 Section 7.2 Servicer Termination Events 33 Section 7.3 Continue to Perform 34 Section 7.4 Successor Servicer 35 Section 7.5 Transition of Servicing 36 Section 7.6 Merger, Consolidation, Succession or Assignment 37 + +ARTICLE VIII TERMINATION 37 Section 8.1 Optional Acquisition of Receivables; Clean-Up Redemption of Notes 37 Section 8.2 Optional Redemption of Notes 38 Section 8.3 Termination 39 + +ARTICLE IX OTHER AGREEMENTS 39 Section 9.1 Financing Statements 39 Section 9.2 No Transfer or Lien by Depositor 40 Section 9.3 Expenses 40 Section 9.4 Receivables Information 40 Section 9.5 No Petition 40 Section 9.6 Limited Recourse 40 Section 9.7 Limitation of Liability 41 Section 9.8 Tax Treatment of Notes 41 Section 9.9 Regulation RR Risk Retention 41 Section 9.10 Cap Collateral Account 41 + +ARTICLE X MISCELLANEOUS 42 Section 10.1 Amendments 42 Section 10.2 Assignment; Benefit of Agreement; Third-Party Beneficiary 44 Section 10.3 Notices 44 Section 10.4 Agent for Service 45 Section 10.5 GOVERNING LAW 45 Section 10.6 Submission to Jurisdiction 45 Section 10.7 WAIVER OF JURY TRIAL 46 Section 10.8 No Waiver; Remedies 46 Section 10.9 Severability 46 Section 10.10 Headings 46 Section 10.11 Counterparts 46 Section 10.12 Limitation of Rights of the Cap Counterparty 46 Section 10.13 Intent of the Parties; Reasonableness 46 + +ARTICLE XI ASSET REPRESENTATIONS REVIEW; DISPUTE RESOLUTION 47 Section 11.1 Asset Representations Review 47 Section 11.2 Dispute Resolution 47 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +Schedule A Schedule of Initial Receivables SA-1 Schedule B Notice Addresses SB-1 Appendix A Usage and Definitions AA-1 Exhibit A Custodian's Security Requirements EA-1 Exhibit B Form of Annual Certification EB-1 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +TRANSFER AND SERVICING AGREEMENT, dated as of January 29, 2020 (this "Agreement"), among VERIZON OWNER TRUST 2020-A, a Delaware statutory trust, as issuer (the "Issuer"), VERIZON ABS LLC, a Delaware limited liability company, as depositor (the "Depositor"), and Cellco Partnership d/b/a Verizon Wireless, a Delaware general partnership ("Cellco"), as servicer (in such capacity, the "Servicer"), as marketing agent (in such capacity, the "Marketing Agent") and as custodian (in such capacity, the "Custodian"). + +BACKGROUND + +In the normal course of their businesses, Cellco and the other Originators originate device payment plan agreements for various wireless devices. In addition, the Master Trust holds certain device payment plan agreements originated by Cellco and certain other Originators. + +In connection with a securitization transaction sponsored by Cellco in which the Issuer will issue Notes secured by a pool of Receivables consisting of device payment plan agreements, certain of the Originators and/or the Master Trust have transferred a pool of Receivables and related property, and any of the Originators and/or the Master Trust may from time to time transfer additional pools of Receivables and related property to the Depositor, who will transfer them to the Issuer. The Issuer will engage the Servicer to service the Receivables. + +The parties agree as follows: + +ARTICLE I USAGE AND DEFINITIONS + +Section 1.1 Usage and Definitions. Capitalized terms used but not defined in this Agreement are defined in Appendix A. Appendix A also contains usage rules that apply to this Agreement. Appendix A is incorporated by reference into this Agreement. + +ARTICLE II TRANSFER AND ACQUISITION OF DEPOSITOR TRANSFERRED PROPERTY; REPRESENTATIONS AND WARRANTIES + +Section 2.1 Transfers of Depositor Transferred Property. + +(a) Transfer and Absolute Assignment of Initial Receivables. In consideration of the Issuer's delivery to the Depositor of the Notes, the Class A Certificate and the Class B Certificate, effective on the Closing Date, the Depositor transfers and absolutely assigns to the Issuer, without recourse (other than the Depositor's obligations under this Agreement), all of the Depositor's right, title and interest, whether now owned or later acquired, in the Initial Receivables and the other related Depositor Transferred Property. The Depositor certifies that the Credit Enhancement Test and the Pool Composition Tests are satisfied for the transfer and assignment of the Initial Receivables and the other related Depositor Transferred Property on the Closing Date. + +(b) Transfers and Absolute Assignments of Additional Receivables. Subject to the satisfaction of the conditions in Section 2.1(d), effective on each Acquisition Date, in consideration of the Issuer's distribution to the Depositor of the (i) Additional Receivables Cash + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +Transfer Amount for the Additional Receivables to be transferred to the Issuer on that Acquisition Date and (ii) an increase in the Class B Certificate Principal Balance in an amount equal to the excess, if any, of the Additional Receivables Transfer Amount over the Additional Receivables Cash Transfer Amount for such Additional Receivables, the Depositor will transfer and absolutely assign to the Issuer, without recourse (other than the Depositor's obligations under this Agreement), all of the Depositor's right, title and interest, whether then owned or later acquired, in the Additional Receivables and the other related Depositor Transferred Property. + +(c) No Assumption of Obligations. These transfers and absolute assignments do not, and are not intended to, include any obligation of the Depositor or any Originator to the Obligors or any other Person relating to the Receivables and the other Depositor Transferred Property, and the Issuer does not assume any of these obligations. + +(d) Conditions for Transfers of Additional Receivables. The transfer and assignment of the Additional Receivables and the other related Depositor Transferred Property on each Acquisition Date will be subject to the satisfaction of the following conditions on or before such Acquisition Date: + +(i) Transfer Notice. At least two (2) Business Days before the applicable Acquisition Date, the Administrator shall deliver to the Issuer and the Indenture Trustee a Transfer Notice for the Additional Receivables to be transferred and absolutely assigned on that Acquisition Date, which will specify the Additional Receivables Transfer Amount and attach or include therewith the Schedule of Receivables; + +(ii) Satisfaction of Tests. After giving effect to the transfer and assignment of the Additional Receivables by the Depositor to the Issuer, (A) the Credit Enhancement Test is satisfied and (B) the Receivables, in the aggregate, owned by the Issuer, excluding any Temporarily Excluded Receivables, satisfy each of the Pool Composition Tests under Section 3.5(b); and + +(iii) Depositor's Certifications. The Depositor certifies that: + +(A) as of such Acquisition Date, (1) the Depositor is Solvent and will not become insolvent as a result of the transfer and assignment of the Additional Receivables on the Acquisition Date, (2) the Depositor does not intend to incur or believe that it would incur debts that would be beyond the Depositor's ability to pay as they matured and (3) the transfer and assignment of the Additional Receivables is not made by the Depositor with actual intent to hinder, delay or defraud any Person; + +(B) each of the representations and warranties made by the Depositor under Sections 2.4(a) and 2.4(b), in each case, solely with respect to the related Additional Receivables, will be true and correct as of the Acquisition Date; and + +(C) all conditions to the transfer and assignment of the related Additional Receivables by the Originators to the Depositor under + +2 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +Section 2.1(d) of the Originator Receivables Transfer Agreement and by the Master Trust to the Depositor under Section 2.1(d) of the Master Trust Receivables Transfer Agreement, as applicable, have been satisfied. + +The delivery by the Administrator, on behalf of the Depositor, of the Transfer Notice will be considered a certification by the Depositor that the conditions set forth in this Section 2.1(d) have been satisfied or will be satisfied on the Acquisition Date. + +Section 2.2 Acknowledgement of Further Assignments. The Depositor acknowledges that, under the Indenture, the Issuer will assign and pledge the Depositor Transferred Property and related property and rights to the Indenture Trustee for the benefit of the Secured Parties. + +Section 2.3 Savings Clause. The Depositor and the Issuer intend that each transfer and assignment under this Agreement be an absolute transfer and assignment of the Depositor Transferred Property, conveying good title to the Depositor Transferred Property free and clear of any Lien, other than Permitted Liens, from the Depositor to the Issuer. The Depositor and the Issuer intend that the Depositor Transferred Property not be a part of the Depositor's estate if there is a bankruptcy or insolvency of the Depositor. If, despite the intent of the Depositor and the Issuer, a transfer and assignment of Depositor Transferred Property under this Agreement is determined to be a pledge for a financing or is determined not to be an absolute transfer and assignment, the Depositor Grants to the Issuer a security interest in the Depositor's right, title and interest in the Depositor Transferred Property to secure a loan in an amount equal to all amounts payable by the Depositor under this Agreement, all amounts payable as principal of or interest on the Notes, all amounts payable as Servicing Fees under this Agreement and all other amounts payable by the Issuer under the Transaction Documents. In that case, this Agreement will be a security agreement under Law and the Issuer will have the rights and remedies of a secured party and creditor under the UCC. + +Section 2.4 Representations and Warranties About Depositor Transferred Property. + +(a) Representations and Warranties About Pool of Receivables. The Depositor makes the following representations and warranties about the pool of Receivables on which the Issuer is relying in acquiring the Depositor Transferred Property. The representations and warranties are made as of the Closing Date (for the Initial Receivables) and as of each Acquisition Date (for the related Additional Receivables) and will survive the transfer and absolute assignment of the Depositor Transferred Property by the Depositor to the Issuer under this Agreement and the pledge of the Depositor Transferred Property by the Issuer to the Indenture Trustee under the Indenture. + +(i) Valid Transfer and Assignment. This Agreement evidences a valid transfer and absolute assignment of the Depositor Transferred Property from the Depositor to the Issuer, enforceable against creditors of, purchasers from and transferees and absolute assignees of the Depositor. + +(ii) Good Title to Depositor Transferred Property. Immediately before the transfer and absolute assignment under this Agreement, the Depositor has good title to + +3 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +the Depositor Transferred Property free and clear of any Lien, other than Permitted Liens, and, immediately after the transfer and absolute assignment under this Agreement, the Issuer will have good title to the Depositor Transferred Property, free and clear of any Lien, other than Permitted Liens. + +(iii) Security Interest in Depositor Transferred Property. + +(A) This Agreement creates a valid and continuing security interest (as defined in the applicable UCC) in the Depositor Transferred Property in favor of the Issuer, which is prior to any Lien, other than Permitted Liens, and is enforceable against all creditors of, purchasers from and transferees and absolute assignees of the Depositor. + +(B) All filings (including UCC filings) necessary in any jurisdiction to give the Depositor a first priority, validly perfected ownership and security interest in the Originator Transferred Property and the Master Trust Transferred Property, to give the Issuer a first priority, validly perfected ownership and security interest in the Depositor Transferred Property and to give the Indenture Trustee a first priority perfected security interest in the Collateral, will be made within ten (10) days after the Closing Date or the related Acquisition Date, as applicable. + +(C) All financing statements filed or to be filed against the Depositor in favor of the Issuer describing the Depositor Transferred Property transferred under this Agreement will contain a statement to the following effect: "A purchase, absolute assignment or transfer of or security interest in any collateral described in this financing statement will violate the rights of the Secured Party/Assignee." + +(D) The Depositor has not authorized the filing of and is not aware of any financing statements against the Depositor that include a description of collateral covering any Depositor Transferred Property other than the financing statements relating to the security interest Granted to the Depositor under the Receivables Transfer Agreements, by the Depositor to the Issuer under this Agreement or by the Issuer to the Indenture Trustee under the Indenture, or that has been terminated. + +(b) Representations and Warranties About Security Interest. If the transfer and absolute assignment of the Depositor Transferred Property under this Agreement is determined to be a pledge relating to a financing or is determined not to be a transfer and absolute assignment, the Depositor makes the following representations and warranties on which the Issuer is relying in acquiring the Depositor Transferred Property, which representations and warranties are made as of the Closing Date or as of the related Acquisition Date, as applicable, + +4 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +will survive termination of this Agreement and may not be waived by the Issuer or the Indenture Trustee: + +(i) Valid Security Interest. This Agreement creates a valid and continuing security interest (as defined in the applicable UCC) in the Depositor Transferred Property in favor of the Issuer, which is prior to all other Liens, other than Permitted Liens, and is enforceable against creditors of, purchasers from and transferees and absolute assignees of the Depositor. + +(ii) Type. Each Receivable is (A) if the Receivable is not secured by the related Device, an "account" or "payment intangible," or (B) if the Receivable is secured by the related Device, "chattel paper," in each case, within the meaning of the applicable UCC. + +(iii) Good Title. Immediately before the transfer and absolute assignment under this Agreement, the Depositor owns and has good title to the Depositor Transferred Property free and clear of all Liens, other than Permitted Liens. The Depositor has received all consents and approvals required by the terms of the Depositor Transferred Property to Grant to the Issuer its right, title and interest in the Depositor Transferred Property, except to the extent the requirement for consent or approval is extinguished under the applicable UCC. + +(iv) Filing Financing Statements. The Depositor has caused, or will cause within ten (10) days after the Closing Date, the filing of all appropriate financing statements in the proper filing office in the appropriate jurisdictions under applicable Law to perfect the security interest Granted in the Depositor Transferred Property to the Issuer under this Agreement. All financing statements filed or to be filed against the Depositor in favor of the Issuer under this Agreement describing the Depositor Transferred Property will contain a statement to the following effect: "A purchase, absolute assignment or transfer of or grant of a security interest in any collateral described in this financing statement will violate the rights of the Secured Parties." + +(v) No Other Transfer, Grant or Financing Statement. Other than the security interest Granted to the Issuer under this Agreement, the Depositor has not transferred or Granted a security interest in any of the Depositor Transferred Property. The Depositor has not authorized the filing of and is not aware of any financing statements against the Depositor that include a description of collateral covering any of the Depositor Transferred Property, other than financing statements relating to the security interest Granted to the Issuer. The Depositor is not aware of any judgment or tax Lien filings against it. + +Section 2.5 Originators' Reacquisition and Servicer's Acquisition of Receivables for Breach of Representations. + +(a) Representations and Warranties from Receivables Transfer Agreements. Each Originator and the Servicer, severally has made, as of the Closing Date, and each Originator or the Servicer, as applicable, severally will make, as of each Acquisition Date, the Eligibility + +5 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +Representation about the Receivables transferred and absolutely assigned by such Originator or the Master Trust, respectively, on that date, and has consented to the transfer by the Depositor to the Issuer of the Depositor's rights to such Eligibility Representation. The Issuer is relying on each applicable Originator's or the Servicer's Eligibility Representation in acquiring the Receivables, which Eligibility Representation will survive the transfer and absolute assignment of the Receivables by the Depositor to the Issuer under this Agreement and the pledge of the Receivables to the Indenture Trustee under the Indenture. + +(b) Reacquisition or Acquisition. Under Section 2.1(a), the Depositor has transferred and absolutely assigned to the Issuer the Depositor's rights under the Receivables Transfer Agreements, including the right to require (i) an Originator to reacquire any Receivables transferred and absolutely assigned by it under the Originator Receivables Transfer Agreement or (ii) the Servicer to acquire any Receivable transferred and absolutely assigned by the Master Trust under the Master Trust Receivables Transfer Agreement, in each case, for which such party has made the Eligibility Representation if, in each case, there is a breach of such Eligibility Representation, such breach is not cured and such breach results in a material adverse effect on the Issuer. If any Originator or the Servicer breaches the Eligibility Representation made by it with respect to any Receivable transferred by such Originator or the Master Trust, respectively, to the Depositor, such breach is not cured and such breach has a material adverse effect on the Issuer, then the Depositor will enforce such Originator's or the Servicer's obligation, as applicable, to reacquire or acquire, respectively, any such Receivable transferred and absolutely assigned by it to the Depositor for which the Eligibility Representation was breached pursuant to Section 3.4 of the applicable Receivables Transfer Agreement. + +(c) Reacquisition or Acquisition Sole Remedy. The sole remedy of the Depositor, the Issuer or the Indenture Trustee for a breach of any Eligibility Representation is to require the related Originator or the Servicer, as applicable, to reacquire or acquire, respectively, the Receivable under Section 3.4 of the applicable Receivables Transfer Agreement. + +Section 2.6 Originators' Reacquisition or Servicer's Acquisition of Bankruptcy Surrendered Receivables. + +(a) Reacquisition or Acquisition. Under Section 2.1(a), the Depositor has transferred and absolutely assigned to the Issuer the Depositor's rights under the Receivables Transfer Agreements, including the right to require (i) an Originator to reacquire any Receivables transferred and absolutely assigned by it under the Originator Receivables Transfer Agreement or (ii) the Servicer to acquire any Receivable transferred and absolutely assigned by the Master Trust under the Master Trust Receivables Transfer Agreement, in each case, when such Receivable becomes a Bankruptcy Surrendered Receivable. If any Receivable becomes a Bankruptcy Surrendered Receivable, the Depositor will enforce such Originator's or the Servicer's obligation, as applicable, to reacquire or acquire, respectively, any such Receivable transferred and absolutely assigned by it to the Depositor pursuant to Section 4.6 or 4.7, respectively, of the applicable Receivables Transfer Agreement. + +(b) Reacquisition or Acquisition Sole Remedy. If a Receivable becomes a Bankruptcy Surrendered Receivable, the sole remedy of the Depositor, the Issuer or the Indenture Trustee is to require the related Originator or the Servicer, as applicable, to reacquire + +6 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +or acquire, respectively, the Bankruptcy Surrendered Receivable under Section 4.6 or 4.7, respectively, of the applicable Receivables Transfer Agreement. + +ARTICLE III SERVICING OF RECEIVABLES + +Section 3.1 Engagement. The Issuer engages Cellco as the Servicer of the Receivables for the Issuer and the Indenture Trustee, and Cellco accepts this engagement. + +Section 3.2 Servicing of Receivables. + +(a) General Servicing Obligations. The Servicer will manage, service, administer and collect on the Receivables with reasonable care using that degree of skill and attention that the Servicer exercises for all comparable device payment plan agreement receivables that it services for itself or others according to the Servicing Procedures. Without limiting the generality of the foregoing, the Servicer's obligations will include: + +(i) collecting and applying all payments made on, or credits applied to, the Receivables and any other amounts received related to the Depositor Transferred Property; + +(ii) investigating delinquencies; + +(iii) sending invoices and notices and responding to inquiries of Obligors; + +(iv) processing requests for extensions, modifications and adjustments; + +(v) administering payoffs, prepayments, defaults and delinquencies; + +(vi) maintaining accurate and complete accounts and receivables systems for servicing the Receivables; + +(vii) providing to the Custodian copies, or access to, any documents that modify or supplement information in the Receivable Files; and + +(viii) preparing and providing Monthly Investor Reports and any other periodic reports required to be prepared by the Servicer under this Agreement or any other Transaction Document. + +(b) Collection of Payments; Extensions and Amendments. The Servicer shall take, or cause to be taken, all actions necessary or advisable to collect each Receivable in accordance with this Agreement and the Servicing Procedures using commercially reasonable care and diligence and in any event, with no less care or diligence than the Servicer exercises in collecting other similar receivables or obligations owed to it and its Affiliates. All payments remitted by an Obligor to the Servicer in respect of a Receivable, any release of a security deposit, and any application of a Credit granted to a customer by Verizon Wireless (other than applications of payments and credits granted to an Obligor under a Receivable in respect of cancellations, prepayments, invoicing errors or in connection with an Upgrade Offer as described under Section + +7 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +3.12(b)) will be applied to the related account by the Servicer based on invoice aging, so that such amounts are applied to the oldest invoiced balances first, then the second oldest invoiced balances, etc., and finally to current billing amounts, in each case, in the order described below: + +• late fees; + +• service and all other charges, including, but not limited to, insurance premium payments and purchases (including accessories) billed to the account, other than amounts due under any device payment plan agreement, including any Receivable; and + +• any amounts related to any device payment plan agreements, including Receivables, which, in the case of multiple device payment plan agreements related to a single account, will be applied in the order in which such device payment plan agreements were originated with the most recent device payment plan agreement being paid last. + +Notwithstanding anything to the contrary in any other Transaction Document, the process for application of payments remitted by an Obligor to the Servicer in respect of a Receivable, releases of security deposits, and applications of Credits granted to an Obligor under a Receivable by Verizon Wireless (other than those credits granted to an Obligor in respect of an Upgrade Offer as described under Section 3.12(b)) described in the bullet points above may be changed at any time in the sole discretion of the Servicer, as long as any change in such application of any such amounts applicable to the Receivables (i) is also applicable to any device payment plan agreements that the Servicer services for itself and others and (ii) so long as Cellco is the Servicer, does not have a material adverse effect on the Noteholders. In addition, the Servicer may waive late payment charges or other fees that may be collected in the ordinary course of servicing a Receivable. The Servicer may grant extensions, refunds, rebates or adjustments on any Receivable or amend any Receivable according to the Servicing Procedures. However, if the Servicer (i) grants payment extensions resulting in the final payment date of the Receivable being later than the Collection Period immediately preceding the Final Maturity Date for the latest maturing Class of Notes, (ii) cancels a Receivable or reduces or waives (including with respect to any Upgrade Offer) the remaining Principal Balance under a Receivable or any portion thereof and/or as a result, the monthly payments due thereunder, or (iii) modifies, supplements, amends or revises a Receivable to grant the Obligor under such Receivable a contractual right to upgrade the related Device, it will acquire the affected Receivable solely as described under Section 3.3, unless it is required to take the action by Law. In addition, if the Marketing Agent or the Servicer (x) applies a payment or grants a credit to an Obligor with respect to cancellations, prepayments or invoicing errors the Servicer may apply such credits either directly to the applicable device payment plan agreement or in accordance with its customary payment application procedures set forth above and (y) applies a payment or grants a credit to an Obligor under a Receivable in connection with an Upgrade Offer as set forth in Section 3.12(b), the Servicer will apply such credits directly to the applicable device payment plan agreement and will not apply such credits in accordance with its customary payment application procedures set forth above. + +8 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +(c) Maintenance of Security Interests in the Receivables. The Servicer will maintain perfection of the security interest of the Issuer and the Indenture Trustee in each Receivable. + +(d) No Impairment. The Servicer will not impair in any material respect the rights of the Issuer or the Noteholders in any Receivable except as permitted by this Agreement. + +(e) Assignment for Enforcement. Effective as of the related Cutoff Date, the Receivables are assigned to the Servicer solely for the purpose of permitting the Servicer to perform its servicing and administrative obligations under this Agreement, including the start or pursuit of or participation in a legal proceeding to enforce its rights or remedies with respect to a Receivable or such other Proceeding otherwise related to a Receivable. If in a legal proceeding it is held that the Servicer may not enforce its rights or remedies with respect to a Receivable on the grounds that it is not a real party in interest or a holder entitled to enforce rights or remedies with respect to the Receivable, the Issuer will, at the Servicer's expense and direction, assign the Receivable to the Servicer solely for that purpose or take steps to enforce its rights and remedies with respect to the Receivable, including bringing suit in the names of the Indenture Trustee, the Noteholders and the Issuer. + +(f) Powers of Attorney. The Issuer appoints the Servicer as the Issuer's attorney-in-fact, with full power of substitution to exercise all rights of the Issuer for the servicing and administration of the Receivables. This power of attorney, and all authority given, under this Section 3.2(f) is revocable and is given solely to facilitate the performance of the Servicer's obligations under this Agreement and may only be used by the Servicer consistent with this Agreement. On request of the Servicer, the Issuer will furnish the Servicer with written powers of attorney and other documents to enable the Servicer to perform its obligations under this Agreement. + +(g) Release Documents. The Servicer is authorized to execute and deliver, on behalf of itself, the Issuer, the Indenture Trustee and the Noteholders any documents of satisfaction, cancellation, partial or full release or discharge, and other comparable documents, for the Receivables. + +(h) Enforcement of Receivables Under an Upgrade Offer. If an Obligor accepts an Upgrade Offer with respect to a Receivable but fails to satisfy the required terms and conditions related to such Upgrade Offer, the Servicer agrees to (i) not waive any amounts due by such Obligor under the related Receivable and pursue its Servicing Procedures against such Obligor in respect of the related Receivable until all amounts due under the related Receivable are received and (ii) enforce, on behalf of the Issuer, any rights and obligations under the related Receivable. + +Section 3.3 Servicer's Acquisition of Receivables. + +(a) Acquisition for Servicer Modifications. If extensions, modifications, amendments, cancellations or waivers of Receivables or any terms thereof are made that would require such Receivables to be acquired under Section 3.2(b), the Servicer will acquire all such Receivables as set forth in Section 3.3(d). + +(b) Acquisition for Breach of Servicer's Obligations. If a Responsible Person of the Servicer receives written notice from the Depositor, the Issuer, the Owner Trustee or the + +9 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +Indenture Trustee of a breach of the Servicer's obligations in Section 3.2(c) or (d), and the Servicer fails to correct such failure or impairment in all material respects by the end of the second month following the month in which the Servicer received such written notice, the Servicer will acquire all Receivables with respect to which such breach was not so cured as set forth in Section 3.3(d). + +(c) Acquisition for System Limitation or Inability to Service. If the Servicer, in its sole discretion, determines that as a result of a receivables systems error or receivables systems limitation or for any other reason the Servicer is unable to service a Receivable according to the Servicing Procedures and the terms of this Agreement, the Servicer may acquire the relevant Receivable as set forth in Section 3.3(d). + +(d) Acquisition of Receivables; Payment of Acquisition Amount. For any acquisition of a Receivable by the Servicer under this Section 3.3, the Servicer will acquire the Receivable by remitting the related Acquisition Amount on or prior to the second Business Day before the Payment Date related to the Collection Period in which such Receivable was acquired by the Servicer. If Cellco is the Servicer, it may pay any Acquisition Amounts according to Section 4.3(c). + +(e) Transfer and Assignment of Acquired Receivables. When the Servicer's payment of the Acquisition Amount for a Receivable is included in Available Funds for a Payment Date, the Issuer will be deemed to have transferred and assigned to the Servicer, effective as of the last day of the Collection Period immediately preceding the related Collection Period, all of the Issuer's right, title and interest in the Receivable and all security and documents relating to the Receivable. The transfer and assignment will not require any action by the Issuer or the Indenture Trustee and will be without recourse, representation or warranty by the Issuer except the representation that the Issuer owns the Receivable free and clear of any Lien, other than Permitted Liens. After the transfer and assignment, the Servicer will mark its receivables systems to indicate that the receivable is no longer a Receivable and may take any action necessary or advisable to transfer the Receivable free from any Lien of the Issuer or the Indenture Trustee. + +(f) No Obligation to Investigate. None of the Issuer, the Owner Trustee, the Indenture Trustee (including in its capacity as Successor Servicer hereunder), the Sponsor, the Marketing Agent, the Depositor, the Parent Support Provider, the Administrator or the Servicer will be obligated to investigate whether a breach or other event has occurred that would require the acquisition of any Receivable under this Section 3.3 or whether any Receivables are otherwise required to be acquired under this Section 3.3. + +(g) Acquisition is Sole Remedy. The sole remedy of the Issuer, the Indenture Trustee, the Owner Trustee, and the Secured Parties for any extension, modification, amendment, cancellation or waiver of a Receivable or any terms thereof under Section 3.2(b) or a breach of the covenants made by the Servicer in Section 3.2(c) or (d) is the Servicer's acquisition of the Receivables, as described under this Section 3.3. + +Section 3.4 Sale of Written-Off Receivables. The Servicer may sell to any third party a Receivable that has been written off. Proceeds of any sale allocable to the Written-Off + +10 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +Receivable will be Recoveries. Any Recoveries will be paid to the Servicer as Supplemental Servicing Fees and will not be a part of Available Funds. If the Servicer elects to sell a Written-Off Receivable, the Receivable will be deemed to have been transferred and assigned by the Issuer to the Servicer immediately before the sale by the Servicer. After the sale, the Servicer will mark its receivables systems to indicate that the Written-Off Receivable sold is no longer a Receivable and may take any action necessary or advisable to transfer the receivable free from any Lien of the Issuer or the Indenture Trustee. + +Section 3.5 Servicer Reports and Compliance Statements. + +(a) Monthly Investor Report. + +(i) On or about the 15th day of each month, and in no case later than at least two (2) Business Days before each Payment Date, the Servicer will deliver to the Depositor, the Indenture Trustee, the Owner Trustee, the Note Paying Agent, the Cap Counterparty, the Rating Agencies and the Administrator a servicing report (the "Monthly Investor Report") for that Payment Date and the related Collection Period. The Monthly Investor Report will include (i) an Acquisition Date Supplement if the Collection Period includes an Acquisition Date and (ii) a statement as to whether or not a Delinquency Trigger has occurred in respect of the related Collection Period, together with reasonably detailed calculations thereof. A Responsible Person of the Servicer will certify that the information in the Monthly Investor Report is accurate in all material respects. The Monthly Investor Report will also be posted on the Indenture Trustee's password protected website located at https://pivot.usbank.com. + +(ii) The Sponsor, in its capacity as Servicer, will include information about the pool of Initial Receivables and the disclosure required by Section 246.4(c)(1)(ii) of the U.S. Credit Risk Retention Rules in the Monthly Investor Report for the first Payment Date, which Monthly Investor Report will also be included in the Distribution Report on Form 10-D filed with the Commission for the related Collection Period. + +(iii) The Sponsor, in its capacity as Servicer, will include in the Monthly Investor Report notice of the occurrence of (i) any Benchmark Transition Event and its related Benchmark Replacement Date, (ii) the determination of any Benchmark Replacement, and (iii) the making of any Benchmark Replacement Conforming Changes. + +(b) Credit Enhancement and Pool Composition Tests. On or before each Payment Date and each Acquisition Date, the Servicer will determine whether the pool of Receivables to be held by the Issuer as of the related Cutoff Date, including any Additional Receivables to be acquired, satisfies the Credit Enhancement Test and each Pool Composition Test. If the pool of Receivables does not satisfy all of the Pool Composition Tests, the Administrator may identify Receivables in the pool as Temporarily Excluded Receivables so that the remaining Receivables in the pool will satisfy all of the Pool Composition Tests; provided, that the Administrator may only deem Receivables to be Temporarily Excluded Receivables if the Overcollateralization Target Amount is reached as of the close of business on such date of determination, without taking into account the Temporarily Excluded Receivables. In addition, the Principal Balance of any Temporarily Excluded Receivables will be subtracted from the Adjusted Pool Balance for + +11 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +purposes of calculating the Credit Enhancement Test. The Servicer will state on the Acquisition Date Supplement for each Collection Period for which there is an Acquisition Date the aggregate Principal Balance of the Receivables deemed Temporarily Excluded Receivables. For the avoidance of doubt, Collections on Temporarily Excluded Receivables (solely during the time that they are Temporarily Excluded Receivables) will not constitute Available Funds and, up to the amount of the Temporarily Excluded Receivables Servicing Fee will be distributed to the Servicer, and any remaining amounts will be deposited into the Certificate Distribution Account for distribution to the Certificateholders in the priority set forth in Section 4.1(b) of the Trust Agreement. The Administrator may, at its sole option, designate Receivables that were deemed Temporarily Excluded Receivables on any prior date to no longer be deemed Temporarily Excluded Receivables as long as after such designation by the Administrator, all of the Pool Composition Tests either will remain satisfied or will not be adversely affected. + +(c) Amortization Events. In connection with the preparation of each Monthly Investor Report, the Servicer will review the Amortization Events and determine whether an Amortization Event occurred during the Collection Period immediately preceding the related Collection Period (after giving effect to any acquisition of Additional Receivables during such Collection Period), and the Monthly Investor Report shall indicate whether or not an Amortization Event has occurred. + +(d) Remittance Reports. For as long as the Servicer and the Marketing Agent are depositing Collections pursuant to Section 4.3(b)(ii) and depositing any required Upgrade Payments within two (2) Business Days after the identification that all of the terms and conditions related to such Upgrade Offer have been satisfied by the related Obligor, the Servicer will provide a written report (which may be electronically submitted) to the Indenture Trustee and the Note Paying Agent on each such deposit or remittance date setting forth (x) the aggregate dollar amount deposited or remitted into the Collection Account by the Servicer, the Marketing Agent or an Originator on such date, (y) the aggregate dollar amount of Collections deposited by the Servicer on such date and (z) the aggregate number of Upgrade Offers accepted since the deposit or remittance date immediately preceding the related deposit or remittance date, and the aggregate amount of Upgrade Payments remitted by the Marketing Agent or an Originator on such date. + +Section 3.6 Review of Servicer's Records. The Servicer will maintain records and documents relating to its performance under this Agreement according to its customary business practices. Upon reasonable request not more than once during any calendar year, and with reasonable notice, the Servicer will give the Issuer, the Depositor, the Parent Support Provider, the Administrator, the Owner Trustee and the Indenture Trustee (or their representatives) access to the records and documents to conduct a review of the Servicer's performance under this Agreement. Any access or review will be conducted by all parties at the same time at the Servicer's offices during its normal business hours at a time reasonably convenient to the Servicer and in a manner that will minimize disruption to its business operations. Any access or review will be subject to the Servicer's security, confidentiality and privacy policies and any regulatory, legal and data protection policies. Notwithstanding the foregoing, the permissive right of the Indenture Trustee to access or review any records of the Servicer shall not be deemed to be an obligation of the Indenture Trustee to do so. + +12 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +Section 3.7 Servicer's Authorized and Responsible Persons. On or before the Closing Date, the Servicer will notify the Indenture Trustee and the Owner Trustee and provide a specimen signature of each Person who (a) is authorized to give instructions and directions to the Indenture Trustee and the Owner Trustee on behalf of the Servicer and (b) is a Responsible Person for the Servicer. The Servicer may change such Persons at any time by notifying the Indenture Trustee and the Owner Trustee. + +Section 3.8 Servicer's Fees. As compensation for performing its obligations under this Agreement, the Servicer will be paid the Servicing Fee. On each Payment Date, the Issuer will pay the Servicing Fee to the Servicer according to Section 8.2 of the Indenture. In addition, the Servicer may retain any Supplemental Servicing Fees. The Servicer will also receive the Temporarily Excluded Receivables Servicing Fee on each Payment Date, which will be payable solely from Collections on the Temporarily Excluded Receivables, as set forth in Section 3.5(b). + +Section 3.9 Servicer's Expenses. Except as otherwise stated in this Agreement, the Servicer will pay all its expenses for servicing the Receivables under this Agreement, including fees and expenses of legal counsel and independent accountants, taxes imposed on the Servicer and expenses to prepare reports, certificates or notices under this Agreement. + +Section 3.10 Custodian. + +(a) Appointment of Custodian. To reduce administrative costs and facilitate the servicing of the Receivables by the Servicer, the Issuer appoints Cellco, in its capacity as the Servicer, to act as the Custodian of the Receivables for the Issuer and the Indenture Trustee (for the benefit of the Secured Parties), as their interests may appear. Cellco accepts the appointment and agrees to perform the custodial obligations in this Section 3.10. + +(b) Custody of Receivable Files. The Custodian will hold and maintain in custody the following documents for each Receivable (the "Receivable File") for the benefit of the Issuer and the Indenture Trustee, using reasonable care and according to the Servicing Procedures: + +(i) the original Receivable (or an imaged copy of such Receivable) or an authoritative copy of the Receivable, if in electronic form; and + +(ii) all other documents, notices and correspondence relating to the Receivable or the Obligor that the Servicer generates in the course of servicing the Receivable. + +Except as stated above, any document in a Receivable File may be a photocopy or in electronic format or may be converted to electronic format at any time. The Custodian will hold and maintain the Receivable Files, including any receivables systems on which the Receivable Files are electronically stored, in a manner that will permit the Servicer and the Issuer to comply with this Agreement and the Indenture Trustee to comply with the Indenture. + +(c) Delivery of Receivable Files. The Receivable Files are or will be constructively delivered to the Indenture Trustee, as pledgee of the Issuer under the Indenture, and the Custodian confirms to the Issuer and the Indenture Trustee that it has received the Receivable Files for the Initial Receivables and, by its delivery (in its capacity as Servicer) to the Issuer and the Indenture Trustee of an Acquisition Date Supplement, will be deemed to confirm to the + +13 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +Issuer and the Indenture Trustee that it has received the Receivable Files for the Additional Receivables. No initial review or any periodic review of the Receivable Files by the Issuer, the Owner Trustee or the Indenture Trustee is required. + +(d) Location of Receivable Files. The Custodian will maintain the Receivable Files (or access to any Receivable Files stored in an electronic format) at one of its offices or the offices of one of its custodians in the United States. On request of the Depositor, the Issuer and the Indenture Trustee, the Custodian will provide a list of locations of the Receivable Files. + +(e) Access to Receivable Files. The Custodian will give the Servicer access to the Receivable Files and, on request of the Servicer, the Custodian will promptly release any document in the Receivable Files to the Servicer for purposes of servicing the Receivables. The Custodian will give the Depositor, the Issuer and the Indenture Trustee access to the Receivable Files and the receivables systems to conduct a review of the Receivables. Any access or review will be conducted at the Custodian's offices during normal business hours at a time reasonably convenient to the Custodian in a manner that will minimize disruption of its business operations. Any access or review will be subject to the Custodian's legal, regulatory, confidentiality, privacy and data protection policies. Attached hereto as Exhibit A is a copy of the Custodian's security requirements in effect on the date of this Agreement. + +(f) Effective Period and Termination. Cellco's appointment as custodian is effective as of the Initial Cutoff Date and will continue until the later of (i) the date on which all obligations of the Issuer have been paid in full and (ii) the date on which such appointment is terminated under this Section 3.10(f). If the Servicer resigns under Section 7.1 or is terminated under Section 7.2, the Servicer's appointment as custodian under this Agreement may be terminated in the same manner as the Servicer may be terminated under Section 7.2. As soon as practicable after any termination of its appointment as custodian and subject to the legal, regulatory, confidentiality, privacy and data protection policies of the Custodian and Cellco, the Custodian will deliver the Receivable Files to the Indenture Trustee or its designee or successor custodian at a place designated by the Indenture Trustee. All reasonable expenses of transferring the Receivable Files to the designee or successor custodian will be paid by the terminated custodian on receipt of an invoice in reasonable detail. + +(g) No Agency. Neither the Custodian nor the Servicer shall be deemed to be an agent of the Indenture Trustee, and the Indenture Trustee shall have no liability for the acts or omissions of the Custodian or the Servicer. + +Section 3.11 Marketing Agent. + +(a) Appointment of Marketing Agent. The Issuer and the Servicer appoint Cellco to act as Marketing Agent for the Receivables. Cellco accepts the appointment and agrees to perform its obligations set forth in this Agreement. + +(b) Duties of the Marketing Agent. The Marketing Agent will be required to remit, or to cause the related Originator to remit, to the Collection Account the amounts set forth in Sections 4.3(g), (h) and (i). + +14 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +(c) Fees and Expenses of the Marketing Agent. Fees and expenses, if any, of the Marketing Agent will be paid by the Originators, as separately agreed to under the Marketing Agent Agency Agreement. + +(d) Covenants of the Marketing Agent. The Marketing Agent will not (i) make any Upgrade Offers that waive any obligations of an Obligor under the related device payment plan agreement, (ii) eliminate the obligation of Verizon Wireless to pay off a device payment plan agreement if an Obligor satisfies the related terms and conditions thereof, or (iii) eliminate or impair any third party beneficiary rights of an assignee under an Upgrade Offer, including the right of such assignee to enforce Verizon Wireless' payment obligation under any Upgrade Offer. + +Section 3.12 Termination of Upgrade Programs; Credits Related to Upgrade Programs. + +(a) To the extent any Upgrade Offer has not been terminated and an Obligor satisfies all of the terms and conditions of such Upgrade Offer in respect of a Receivable, and (i) the Marketing Agent fails to make, or to cause the related Originator to make, the required Upgrade Payment into the Collection Account as set forth in Section 4.3(g) and (ii) the Parent Support Provider fails to make any required Upgrade Payments as set forth in Section 1 of the Parent Support Agreement, the Servicer and the Marketing Agent shall terminate all Upgrade Offers within ten (10) Business Days after the date the Parent Support Provider received notice from the Indenture Trustee that an Upgrade Payment was due under Section 1 of the Parent Support Agreement. + +(b) If the Marketing Agent, the relevant Originator and the Parent Support Provider fail to make such Upgrade Payments with respect to an Upgrade Offer, (i) the Servicer shall deliver the notice to Obligors pursuant to Section 3.13 with respect to such Obligors' recoupment rights against Verizon Wireless, and (ii) notwithstanding any failure to deliver such notice, (x) if Cellco is still the Servicer, the Servicer shall give a monthly credit to the Obligor against amounts owing with respect to the new device payment plan agreement resulting from the Upgrade Offer, in an amount equal to the amount due that month under the original device payment plan agreement that is a Receivable, or (y) if Cellco is no longer the Servicer, Cellco, (1) if required, shall give such monthly credit to the Obligor only if Cellco has received notice from the Servicer that the Obligor has paid the amount due in the prior month under the original device payment plan agreement that is a Receivable, and (2) shall cooperate with any Successor Servicer to properly bill and credit such Obligor's account with respect to the Receivable and the new device payment plan agreement related to the Upgrade Offer. Any such monthly credit granted to an Obligor shall be applied directly against the monthly payment due on the new device payment plan agreement and will not be applied in accordance with the Servicer's customary payment application procedures pursuant to its Servicing Procedures, if different. For the avoidance of doubt, if during such time as Cellco is no longer the Servicer, an Obligor remits the full amount due under the related new device payment plan agreement, but does not make a payment to the new Servicer for the original device payment plan agreement, a portion of such amount equal to the amount of the monthly credit granted to such Obligor resulting from the Upgrade Offer in respect of the original device payment plan agreement that is a Receivable shall be paid by Cellco to the new Servicer. In such case, to the extent that all other amounts owed on the related account are current, the Servicer will not consider such account or payments + +15 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +under the new device payment plan agreement to be Delinquent. In addition, regardless of whether Cellco continues to be the Servicer of any Receivable for which the terms and conditions of an Upgrade Offer (other than the requirement that the Marketing Agent remit, or cause the related Originator to remit, an Upgrade Payment for such Receivable) were satisfied by the related Obligor and for which the Marketing Agent, the related Originator and the Parent Support Provider failed to make the related Upgrade Payment, Cellco shall remit any Collections received on such Receivable to the Collection Account in the time period in which it would have been otherwise obligated to do so. + +Section 3.13 Notices to Obligors. + +Within ten (10) days following the earlier to occur of (i) a ratings downgrade by each of the Rating Agencies of Verizon to below investment grade, or (ii) a Servicer Termination Event, the Servicer will send a notice to all Obligors indicating (a) that their Receivables have been assigned to the Issuer, and (b)(x) if Cellco has not been removed as Servicer, that the Obligors shall continue to make their payments as they had previously, or (y) if Cellco has been removed as Servicer, the name of the Successor Servicer and any new instructions with respect to their payments. In addition, if the Servicer Termination Event was as a result of the failure of the Marketing Agent to satisfy its obligation to make, or to cause the related Originators to make, required Upgrade Payments pursuant to Section 7.2(a)(i)(y), then Cellco shall also send a notice to (i) all Obligors who have a continuing right to an upgrade, indicating that Cellco has recently failed to make the necessary prepayments with respect to one or more of its customers in connection with an Upgrade Offer, and that if any Obligor chooses to upgrade and Cellco fails to make the related Upgrade Payment with respect to them, such Obligor will still be required to make payments on his or her original device payment plan agreement, but that such Obligor will have a corresponding recoupment right against his or her new device payment plan agreement with Verizon Wireless, and (ii) all Obligors who had initiated upgrades under an Upgrade Offer, indicating that Cellco had failed to make the relevant Upgrade Payment, and stating that such Obligors will continue to have an obligation to make payments on their original device payment plan agreements, but will have a corresponding right of recoupment against their new device payment plan agreements with Verizon Wireless. + +ARTICLE IV ACCOUNTS, COLLECTIONS AND APPLICATION OF FUNDS + +Section 4.1 Bank Accounts. + +(a) Establishment of Bank Accounts. On or before the Closing Date, the Servicer will establish the following segregated accounts or subaccounts at a Qualified Institution (initially the corporate trust department of U.S. Bank National Association), each in the name of "U.S. Bank National Association, as Note Paying Agent for the benefit of the Indenture Trustee, as secured party for Verizon Owner Trust 2020-A", to be designated as follows: + +(i) "Collection Account" with account number 272062000; + +(ii) "Reserve Account" with account number 272062001; + +16 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +(iii) "Acquisition Account," as a subaccount of the Collection Account, with account number 272062002; and + +(iv) "Negative Carry Account" with account number 272062003. + +(b) Control of Bank Accounts. Each of the Bank Accounts will be under the control of the Indenture Trustee so long as the Bank Accounts remain subject to the Lien of the Indenture, except that the Servicer may make deposits into and direct the Note Paying Agent to make deposits into or withdrawals from the Bank Accounts according to the Transaction Documents. The Servicer may direct the Note Paying Agent to withdraw from the Collection Account and pay to the Servicer, or as directed by the Servicer, amounts that are not Available Funds for a Collection Period or that were deposited into the Collection Account in error. Following the payment in full of the Notes and the release of the Bank Accounts from the Lien of the Indenture, the Bank Accounts will be under the control of the Issuer. + +(c) Benefit of Accounts; Deposits and Withdrawals. The Bank Accounts and all cash, money, securities, investments, financial assets and other property deposited in or credited to them will be held by the Note Paying Agent for the benefit of the Indenture Trustee as secured party for the benefit of the Secured Parties and, after payment in full of the Notes and the release of the Bank Accounts from the Lien of the Indenture, as agent of the Issuer and as part of the Trust Property. All deposits to and withdrawals from the Bank Accounts will be made according to the Transaction Documents. + +(d) Maintenance of Accounts. If an institution maintaining the Bank Accounts ceases to be a Qualified Institution, the Servicer will, with the Indenture Trustee's assistance as necessary, move the Bank Accounts to a Qualified Institution within thirty (30) days. + +(e) Compliance. Each Bank Account will be subject to the Account Control Agreement. The Servicer will ensure that the Account Control Agreement requires the Qualified Institution maintaining the Bank Accounts to comply with "entitlement orders" (as defined in Section 8-102 of the UCC) from the Indenture Trustee without further consent of the Issuer, if the Notes are Outstanding, and to act as a "securities intermediary" according to the UCC. + +(f) Agreements With Respect to Accounts. The Servicer, the Issuer, the Indenture Trustee and the Securities Intermediary agree as follows: + +(i) each of the Bank Accounts is, and will be maintained as, a "securities account" (as defined in Section 8-501 of the UCC); + +(ii) the Securities Intermediary is acting, and will act as a "securities intermediary" (as defined in the UCC) with respect to the Bank Accounts; + +(iii) this Agreement (together with the Indenture and the Account Control Agreement) is the only agreement entered into among the parties with respect to the Bank Accounts and the parties will not enter into any other agreement related to the Bank Accounts; and + +17 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +(iv) at the time this Agreement was entered into and the Bank Accounts were established, the Securities Intermediary has one or more offices in the United States of America that maintains the securities accounts. + +Section 4.2 Investment of Funds in Bank Accounts. + +(a) Permitted Investments. If (i) no Default or Event of Default has occurred and is continuing and (ii) Cellco is the Servicer, the Servicer may instruct the Indenture Trustee to invest any funds in the Collection Account, the Acquisition Account, the Reserve Account and the Negative Carry Account in Permitted Investments and, if investment instructions are received, the Indenture Trustee will direct the Qualified Institution maintaining the Bank Accounts to invest the funds in the Collection Account, the Acquisition Account, the Reserve Account or the Negative Carry Account, as applicable, in those Permitted Investments; provided, that, if on any Payment Date, the amount on deposit in the Acquisition Account (after giving effect to the acquisition of any Additional Receivables on such date) is greater than 25% of the aggregate Note Balance (after giving effect to any payments made on the Notes on such date), the Servicer shall instruct the Indenture Trustee to invest any amounts in the Acquisition Account in excess of such amount in any Permitted Investments, other than (x) any investments set forth in clauses (b) or (c) of the definition of Permitted Investments that are held by or at the Indenture Trustee or (y) any investments set forth in clause (e) of the definition thereof. If (i) the Servicer fails to give investment instructions for any funds in the Collection Account, the Acquisition Account, the Reserve Account or the Negative Carry Account to the Indenture Trustee by 11:00 a.m. New York time (or other time as may be agreed by the Indenture Trustee) on the Business Day before a Payment Date or (ii) the Qualified Institution receives notice from the Indenture Trustee that a Default or Event of Default has occurred and is continuing, the Qualified Institution will invest and reinvest funds in such Bank Account according to the last investment instructions received, if any. If no prior investment instructions have been received or if the instructed investments are no longer available or permitted, the Indenture Trustee will notify the Servicer and request new investment instructions, and the funds will remain uninvested until new investment instructions are received. The Servicer may direct the Indenture Trustee to consent, vote, waive or take any other action, or not to take any action, on any matters available to the holder of the Permitted Investments. If Cellco is not the Servicer, funds on deposit in the Collection Account, the Acquisition Account, the Reserve Account and the Negative Carry Account will remain uninvested. Notwithstanding anything to the contrary in this Section 4.2(a) or in the Transaction Documents, the Servicer shall not allow amounts held in the Collection Account or the Acquisition Account to be invested unless it is able to maintain records on a daily basis as to the amounts realized from the investment of Collections received on each Originator's Receivables. + +(b) Maturity of Investments. For so long as Cellco is the Servicer, any Permitted Investments of funds in the Collection Account and the Reserve Account (or any reinvestments of the Permitted Investments) for a Collection Period must mature, if applicable, and be available no later than the second Business Day before the related Payment Date and any Permitted Investments of funds in the Acquisition Account and the Negative Carry Account (or any reinvestments of the Permitted Investments) for a Collection Period must mature or be available overnight. Any Permitted Investments with a maturity date will be held to their maturity, except + +18 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +that such Permitted Investments may be sold or disposed of before their maturity in connection with the sale or liquidation of the Collateral under Section 5.6 of the Indenture. + +(c) No Liability for Investments. None of the Depositor, the Servicer, the Indenture Trustee, the Note Paying Agent or the Qualified Institution maintaining any Bank Account will be liable for the selection of Permitted Investments or for investment losses incurred on Permitted Investments (other than in the capacity as obligor, if applicable). + +(d) Continuation of Liens in Investments. The Servicer will not direct the Indenture Trustee or the Note Paying Agent to make any investment of funds or to sell any investment held in the Bank Accounts unless the security interest Granted and perfected in the account in favor of the Indenture Trustee will continue to be perfected in the investment or the proceeds of the sale without further action by any Person. + +(e) Investment Earnings. Investment earnings (net of losses and investment expenses) on the Collection Account, the Acquisition Account, the Reserve Account and the Negative Carry Account will be deposited into the Certificate Distribution Account for distribution to the Certificateholders in the priority set forth in Section 4.1(b) of the Trust Agreement. + +Section 4.3 Deposits and Payments. + +(a) Closing Date and Acquisition Date Deposit. On the Closing Date and on each Acquisition Date, the Servicer will deposit into the Collection Account all amounts received and applied as interest or principal on the Initial Receivables or the Additional Receivables, as applicable, during the period from the related Cutoff Date to two (2) Business Days before the Closing Date or Acquisition Date, as applicable. + +(b) Deposit of Collections. + +(i) If Cellco is the Servicer and (x) Verizon's long-term unsecured debt is rated equal to or higher than "Baa2" by Moody's and "A" by S&P (the "Monthly Deposit Required Ratings"), (y) Verizon guarantees certain payment obligations of Cellco, as Servicer, as provided in the Parent Support Agreement and (z) no Servicer Termination Event has occurred, the Servicer may deposit Collections into the Collection Account on the second Business Day before each Payment Date. + +(ii) For as long as (x) Verizon's long-term unsecured debt is not rated at least the Monthly Deposit Required Ratings, (y) Verizon does not guaranty certain payment obligations of Cellco, as Servicer or (z) a Servicer Termination Event occurs, the Servicer will (1) deposit into the Collection Account all amounts received and applied as interest or principal on the Receivables within two (2) Business Days after identification of receipt of good funds and (2) provide a written report (which may be electronically submitted) to the Indenture Trustee and the Note Paying Agent regarding such deposit set forth in clause (1) above, as required by Section 3.5(d). + +(c) Reconciliation of Deposits. If Cellco is the Servicer and for any Payment Date, the sum of (i) Collections for the Collection Period, plus (ii) Acquisition Amounts for the + +19 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +Payment Date, exceeds the amounts deposited under Section 4.3(b) for the Collection Period, Cellco will deposit an amount equal to the excess into the Collection Account on the second Business Day before the Payment Date. If, for any Payment Date, the amounts deposited under Section 4.3(b) for the Collection Period exceed the sum of (i) Collections for the Collection Period, plus (ii) Acquisition Amounts for the Payment Date, the Indenture Trustee or the Note Paying Agent will pay to Cellco from Available Funds in the Collection Account an amount equal to the excess within two (2) Business Days after Cellco's direction, but no later than the Payment Date. If requested by the Indenture Trustee, Cellco will provide reasonable supporting details for its calculation of the amounts to be deposited or paid under this Section 4.3(c). + +(d) Net Deposits. Cellco may make the deposits and payments required by Section 4.3(b) net of Servicing Fees to be paid to Cellco for the Collection Period and amounts the Servicer is permitted to retain under Section 3.8 and be reimbursed for under Section 3.9. The Servicer will account for all deposits and payments in the Monthly Investor Report as if the amounts were deposited and/or paid separately. + +(e) No Segregation. Pending deposit in the Collection Account, the Servicer is not required to segregate Collections from its own funds. + +(f) Negative Carry Account Deposits. Any Certificateholder may, at its option, deposit funds into the Negative Carry Account on any date. + +(g) Deposit of Upgrade Payments. If any Upgrade Offer has not been terminated and an Obligor satisfies all of the terms and conditions of such Upgrade Offer in respect of a Receivable, the Marketing Agent shall deposit, or shall cause the related Originator to deposit, into the Collection Account the related Upgrade Payment, within two (2) Business Days after the identification that all of the terms and conditions related to such Upgrade Offer have been satisfied by the related Obligor in respect of a Receivable; provided, that if the conditions set forth in Section 4.3(b) (i) are satisfied, the Marketing Agent shall deposit, or shall cause the related Originators to deposit, such amounts into the Collection Account on the second Business Day before the Payment Date related to the Collection Period in which the related Obligor has satisfied all of the terms and conditions (for the avoidance of doubt, other than the required prepayment) related to such Upgrade Offer in respect of a Receivable. The parties acknowledge that the failure of the Marketing Agent to deposit, or to cause the related Originator to deposit, into the Collection Account the related Upgrade Payment or otherwise to pay off the Receivable would constitute a breach by the related Originator of its obligation to the Obligor under the Upgrade Contract and that this breach would adversely affect the value of the Receivables, and give the Obligor a claim in recoupment against the related Originator and a right to offset that claim against the amounts that the Obligor would owe to the related Originator under the new device payment plan agreement (each such agreement, a "New Upgrade DPP") entered into by the related Originator (or its agent, on its behalf) pursuant to the Upgrade Contract. The parties hereto intend that the payment by the Marketing Agent or the related Originator of the Upgrade Payment as provided in this Section 4.3(g) shall extinguish such Obligor's claim in recoupment against the related Originator and the Obligor's right to offset the amount of that claim against the amounts that the Obligor would owe under the New Upgrade DPP contemporaneously with such Upgrade Payment by the Marketing Agent or the related Originator. The parties hereto also intend that the payment by the Marketing Agent or the related Originator of the Upgrade + +20 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +Payment as provided in Section 2.2.1 of the Marketing Agent Agency Agreement shall extinguish each Obligor's claim in recoupment against the "Verizon Originator" described in that Section and the Obligor's right to offset the amount of that claim against the amounts that the Obligor would owe under the new device payment plan agreement entered into by such Verizon Originator (or its agent, on its behalf) pursuant to the Upgrade Contract as described in that Section 2.2.1 contemporaneously with such Upgrade Payment by the Marketing Agent or the related Originator. + +(h) Deposit of Credit Payments. If an Obligor is granted a Credit and the application of such Credit to the related Obligor's account results in a shortfall in Collections for the related Collection Period, the Marketing Agent shall deposit, or shall cause the related Originator to deposit, into the Collection Account the related Credit Payment within two (2) Business Days after identification that such Credit was applied to an Obligor account; provided, that if the conditions set forth in Section 4.3(b)(i) are satisfied, the Marketing Agent shall deposit, or shall cause the related Originator to deposit, such amounts into the Collection Account on the second Business Day before the Payment Date related to the Collection Period in which such Credit was applied to an Obligor account. + +(i) Deposit of Assumption of Liability Payments. If an Originator or the Servicer allows a device payment plan agreement that is a Receivable to be transferred to a new Obligor, the Marketing Agent shall acquire such Receivable and deposit, or cause the related Originator to acquire and deposit, into the Collection Account an amount equal to the applicable Acquisition Amount for the related Receivable on or prior to the second Business Day before the Payment Date related to the Collection Period in which such transfer occurred. + +Section 4.4 Reserve Account; Negative Carry Account; Acquisition Account. + +(a) Initial Reserve Account Deposit. On the Closing Date, the Depositor will deposit or cause to be deposited the Required Reserve Amount into the Reserve Account from the net proceeds of the sale of the Notes. + +(b) Reserve Account Draw Amount. On or before two (2) Business Days before a Payment Date, the Servicer will calculate the Reserve Account Draw Amount for the Payment Date and will direct the Note Paying Agent to withdraw from the Reserve Account and deposit into the Collection Account on or before the Payment Date (x) the Reserve Account Draw Amount and (y) any amount in excess of the Required Reserve Amount for such Payment Date, after giving effect to the withdrawal of the Reserve Account Draw Amount with respect to such Payment Date. + +(c) Negative Carry Account Amounts. + +(i) To the extent that the Class A Certificateholder, solely at its option, deposits any amounts into the Acquisition Account, pursuant to Section 4.4(d)(i), the Class A Certificateholder will deposit into the Negative Carry Account an amount equal to the Required Negative Carry Amount related to such amount deposited into the Acquisition Account on such date. + +21 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +(ii) On or before two (2) Business Days before a Payment Date, the Servicer will calculate the Negative Carry Account Draw Amount for the Payment Date and will instruct the Note Paying Agent to withdraw from the Negative Carry Account and deposit the Negative Carry Account Draw Amount into the Collection Account on or before the Payment Date. + +(iii) On each Payment Date, any amounts in the Negative Carry Account in excess of the Required Negative Carry Amount, after giving effect to any acquisition of Receivables on such Payment Date, shall be withdrawn from the Negative Carry Account and deposited into the Certificate Distribution Account, for distribution to the Certificateholders in the priority set forth in Section 4.1(b) of the Trust Agreement. + +(iv) On or before the first Payment Date during the Amortization Period, the Servicer will direct the Note Paying Agent to withdraw all funds in the Negative Carry Account and deposit the funds into the Collection Account. + +(d) Acquisition Account Amounts. + +(i) From time to time, the Class A Certificateholder may, solely at its option, deposit amounts into the Acquisition Account, as set forth in Section 2.5 of the Trust Agreement. + +(ii) On or before two (2) Business Days before an Acquisition Date, the Issuer, or the Servicer on its behalf, will direct the Note Paying Agent to withdraw the Additional Receivables Cash Transfer Amount from the Acquisition Account and pay that amount to the Depositor on the Acquisition Date in consideration for the acquisition of Additional Receivables by the Issuer on the Acquisition Date. + +(iii) On each Payment Date, any amounts in the Acquisition Account in excess of the Required Acquisition Deposit Amount, after giving effect to any acquisition of Receivables on such Payment Date, shall be withdrawn from the Acquisition Account and deposited into the Certificate Distribution Account, for distribution to the Certificateholders in the priority set forth in Section 4.1(b) of the Trust Agreement. + +(iv) On or before the first Payment Date during the Amortization Period, the Servicer will direct the Note Paying Agent to withdraw all funds in the Acquisition Account and deposit the funds into the Collection Account. + +(e) Release of Funds. The Indenture Trustee shall, at such time as there are no Notes outstanding, release any remaining portion of the Collection Account from the Lien of the Indenture and release to or to the order of the Issuer or, in the case of the Reserve Account, to the Depositor. + +Section 4.5 Direction to Indenture Trustee for Distributions. On or about the 15th day of each month, and in no case later than at least two (2) Business Days before each Payment Date, the Servicer will direct the Indenture Trustee or Note Paying Agent (based on the most recent Monthly Investor Report) to make the withdrawals, deposits, distributions and payments + +22 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +required to be made on the Payment Date under Section 8.2 of the Indenture and Section 4.3(c) of this Agreement. + +ARTICLE V DEPOSITOR + +Section 5.1 Depositor's Representations and Warranties. The Depositor represents and warrants to the Issuer as of the Closing Date and as of each Acquisition Date, on which representations and warranties the Issuer is relying in purchasing the Depositor Transferred Property and which will survive the transfer and assignment of the Depositor Transferred Property by the Depositor to the Issuer under this Agreement and the pledge of the Depositor Transferred Property by the Issuer to the Indenture Trustee under the Indenture: + +(a) Organization and Good Standing. The Depositor is a validly existing limited liability company in good standing under the laws of the State of Delaware and has full power and authority to own its properties and conduct its business as presently owned or conducted, and to execute, deliver and perform its obligations under this Agreement and each other Transaction Document to which it is a party. + +(b) Due Qualification. The Depositor is duly qualified to do business, is in good standing as a foreign limited liability company (or is exempt from such requirements) and has obtained all necessary licenses and approvals in each jurisdiction in which the conduct of its business requires such qualification, licenses or approvals, except where the failure to so qualify or obtain licenses or approvals would not reasonably be expected to have a Material Adverse Effect. + +(c) Due Authorization. The execution, delivery, and performance of this Agreement and each other Transaction Document to which it is a party, have been duly authorized by the Depositor by all necessary limited liability company action on the part of the Depositor. + +(d) No Proceedings. There are no actions, suits, investigations or other proceedings pending, or to its knowledge threatened, against the Depositor or any of its properties: (i) asserting the invalidity of this Agreement or any other Transaction Document to which it is a party; (ii) seeking to prevent the consummation of any of the transactions contemplated by this Agreement or any other Transaction Document to which it is a party; or (iii) seeking any determination or ruling that might have a Material Adverse Effect on the performance by the Depositor of its obligations under, or the validity or enforceability of, this Agreement or any other Transaction Document to which it is a party. + +(e) All Consents. All authorizations, consents, orders or approvals of or registrations or declarations with any Governmental Authority required to be obtained, effected or given to it, if any, in connection with the execution and delivery of this Agreement and each other Transaction Document to which it is a party and the performance of the transactions contemplated by this Agreement or any other Transaction Document by the Depositor, in each case, have been duly obtained, effected or given and are in full force and effect, except for those which the failure to obtain would not reasonably be expected to have a Material Adverse Effect. + +23 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +(f) Binding Obligation. This Agreement and each other Transaction Document to which it is a party constitutes, when duly executed and delivered by each other party hereto and thereto, a legal, valid and binding obligation of the Depositor, enforceable against it in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, receivership, conservatorship or other similar Laws affecting creditors' rights generally or by general principles of equity. + +(g) No Conflict. The execution and delivery of this Agreement or any other Transaction Document to which it is a party by the Depositor, and the performance by it of the transactions contemplated by the Transaction Documents and the fulfillment of the terms hereof and thereof applicable to the Depositor, (i) do not contravene (A) its limited liability company agreement, (B) any contractual restriction binding on or affecting it or its property, or (C) any order, writ, judgment, award, injunction or decree binding on or affecting it or its property, except, in each case of (A), (B) or (C), where such contravention would not reasonably be expected to have a Material Adverse Effect and (ii) do not result in or require the creation of any Adverse Claim upon or with respect to any of its properties. + +(h) No Violation. The execution and delivery of this Agreement by the Depositor, the performance by the Depositor of the transactions contemplated by this Agreement or any other Transaction Document to which it is a party and the fulfillment of the terms hereof and thereof applicable to the Depositor will not violate any Law applicable to the Depositor, except where such violation would not reasonably be expected to have a Material Adverse Effect. + +Section 5.2 Liability of Depositor. + +(a) Liability for Specific Obligations. The Depositor will be liable under this Agreement only for its specific obligations under this Agreement. All other liability is expressly waived and released as a condition of, and consideration for, the execution of this Agreement by the Depositor and the issuance of the Notes. The Depositor will be liable for its willful misconduct, bad faith or gross negligence in performing its obligations under this Agreement. + +(b) No Liability of Others. The Depositor's obligations under this Agreement are corporate obligations. No Person will have recourse, directly or indirectly, to any member, manager, officer, director, employee or agent of the Depositor for the Depositor's obligations under this Agreement. + +(c) Legal Proceedings. The Depositor will not be required to start, pursue or participate in any legal proceeding that is unrelated to its obligations under this Agreement and that, in its opinion, may result in liability or cause it to pay or risk funds or incur financial liability. + +(d) Payment of Taxes. The Depositor will pay all taxes levied or assessed on the Trust Property. + +(e) Reliance by Depositor. The Depositor may rely in good faith on the advice of counsel or on any document believed to be genuine and to have been executed by the proper party for any matters under this Agreement. + +24 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +Section 5.3 Merger, Consolidation, Succession or Assignment. Any Person (a) into which the Depositor is merged or consolidated, (b) resulting from a merger or consolidation to which the Depositor is a party, (c) succeeding to the Depositor's business or (d) that is an Affiliate of the Depositor to whom the Depositor has assigned this Agreement, will be the successor to the Depositor under this Agreement. Within fifteen (15) Business Days after the merger, consolidation, succession or assignment, such Person will (i) execute an agreement to assume the Depositor's obligations under this Agreement and each Transaction Document to which the Depositor is a party (unless the assumption happens by operation of Law), (ii) deliver to the Issuer, the Owner Trustee and the Indenture Trustee an Officer's Certificate and an Opinion of Counsel each stating that the merger, consolidation, succession or assignment and the assumption agreement comply with this Section 5.3, (iii) deliver to the Issuer, the Owner Trustee and the Indenture Trustee an Opinion of Counsel stating that the security interest in favor of the Issuer in the Depositor Transferred Property and the Indenture Trustee in the Collateral is or will be perfected and (iv) notify the Rating Agencies of the merger, consolidation, succession or assignment. + +Section 5.4 Depositor May Own Notes. The Depositor and any Affiliate of the Depositor, in its individual or any other capacity, may become the owner or pledgee of Notes with the same rights as any other Person except as limited in any Transaction Document. Notes owned by or pledged to the Depositor or any Affiliate of the Depositor will have an equal and proportionate benefit under the Transaction Documents, except as limited in any Transaction Document. + +Section 5.5 Depositor's Authorized and Responsible Persons. On or before the Closing Date, the Depositor will notify the Indenture Trustee and the Owner Trustee and provide specimen signatures of (i) each Person who is authorized to give instructions and directions to the Indenture Trustee and the Owner Trustee on behalf of the Depositor and (ii) each Person who is a Responsible Person for the Depositor. The Depositor may change such Persons at any time by notifying the Indenture Trustee and the Owner Trustee in writing. + +Section 5.6 Company Existence. During the term of this Agreement, the Depositor shall keep in full force and effect its existence, rights and franchises as a limited liability company under the Laws of the jurisdiction of its formation and shall obtain and preserve its qualification to do business in each jurisdiction in which such qualification is or shall be necessary to protect the validity and enforceability of the Transaction Documents and each other instrument or agreement necessary or appropriate to the proper administration of this Agreement and the transactions contemplated hereby. + +Section 5.7 No Division. Notwithstanding Section 18- 217 of the Delaware Limited Liability Company Act or the Depositor's limited liability company agreement, for so long as the Notes remain Outstanding, the Depositor shall not divide or enter into a plan of division within the meaning of Section 18- 217 of the Delaware Limited Liability Company Act. + +ARTICLE VI SERVICER AND MARKETING AGENT + +Section 6.1 Servicer's and Marketing Agent's Representations and Warranties. + +25 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +(a) The Servicer represents and warrants to the Issuer as of the Closing Date and as of each Acquisition Date, on which representations and warranties the Issuer is relying in purchasing the Depositor Transferred Property and which will survive the transfer and assignment of the Depositor Transferred Property by the Depositor to the Issuer under this Agreement and the pledge of the Depositor Transferred Property by the Issuer to the Indenture Trustee under the Indenture: + +(i) Organization and Good Standing. The Servicer is a validly existing partnership in good standing under the laws of the State of Delaware and has full power and authority to own its properties and conduct its servicing business as presently owned or conducted, and to execute, deliver and perform its obligations under this Agreement and each other Transaction Document to which it is a party. + +(ii) Due Qualification. The Servicer is duly qualified to do business, is in good standing as a foreign entity (or is exempt from such requirements) and has obtained all necessary licenses and approvals in each jurisdiction in which the servicing of the Receivables requires such qualification, licenses or approvals, except where the failure to so qualify or obtain licenses or approvals would not reasonably be expected to have a Material Adverse Effect. + +(iii) Due Authorization. The execution, delivery, and performance of this Agreement and each other Transaction Document to which it is a party, have been duly authorized by the Servicer by all necessary partnership action on the part of the Servicer. + +(iv) No Proceedings. There are no actions, suits, investigations or other proceedings pending, or to its knowledge threatened, against the Servicer or any of its properties: (i) asserting the invalidity of this Agreement or any other Transaction Document to which it is a party; (ii) seeking to prevent the consummation of any of the transactions contemplated by this Agreement or any other Transaction Document to which it is a party; or (iii) seeking any determination or ruling that might have a Material Adverse Effect on the performance by the Servicer of its obligations under, or the validity or enforceability of, this Agreement or any other Transaction Document to which it is a party. + +(v) All Consents. All authorizations, consents, orders or approvals of or registrations or declarations with any Governmental Authority required to be obtained, effected or given to it, if any, in connection with the execution and delivery of this Agreement and each other Transaction Document to which it is a party and the performance of the transactions contemplated by this Agreement or any other Transaction Document by the Servicer, in each case, have been duly obtained, effected or given and are in full force and effect, except for those which the failure to obtain would not reasonably be expected to have a Material Adverse Effect. + +(vi) Binding Obligation. This Agreement and each other Transaction Document to which it is a party constitutes, when duly executed and delivered by each other party hereto and thereto, a legal, valid and binding obligation of the Servicer, enforceable against it in accordance with its terms, except as such enforceability may be + +26 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +limited by applicable bankruptcy, insolvency, reorganization, moratorium, receivership, conservatorship or other similar Laws affecting creditors' rights generally or by general principles of equity. + +(vii) No Conflict. The execution and delivery of this Agreement or any other Transaction Document to which it is a party by the Servicer, and the performance by it of the transactions contemplated by the Transaction Documents and the fulfillment of the terms hereof and thereof applicable to the Servicer, (i) do not contravene (A) the organizational documents of the Servicer, (B) any contractual restriction binding on or affecting it or its property, or (C) any order, writ, judgment, award, injunction or decree binding on or affecting it or its property, except, in each case of (A), (B) or (C), where such contravention would not reasonably be expected to have a Material Adverse Effect and (ii) do not result in or require the creation of any Adverse Claim upon or with respect to any of its properties. + +(viii) No Violation. The execution and delivery of this Agreement by the Servicer, the performance by the Servicer of the transactions contemplated by this Agreement or any other Transaction Document to which it is a party and the fulfillment of the terms hereof and thereof applicable to the Servicer will not violate any Law applicable to the Servicer, except where such violation would not reasonably be expected to have a Material Adverse Effect. + +(ix) Compliance with Law. It has complied with all Laws applicable to the servicing of the Receivables, except where the failure to do so, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect. + +(x) Servicing Procedures. It has complied in all material respects with the Servicing Procedures with respect to the Receivables. + +(b) The Marketing Agent represents and warrants to the Issuer as of the Closing Date and as of each Acquisition Date, on which representations and warranties the Issuer is relying in purchasing the Depositor Transferred Property and which will survive the transfer and assignment of the Depositor Transferred Property by the Depositor to the Issuer under this Agreement and the pledge of the Depositor Transferred Property by the Issuer to the Indenture Trustee under the Indenture: + +(i) Organization and Good Standing. The Marketing Agent is a validly existing partnership in good standing under the laws of the State of Delaware and has full power and authority to own its properties and conduct its business as presently owned or conducted, and to execute, deliver and perform its obligations under this Agreement and each other Transaction Document to which it is a party. + +(ii) Due Qualification. The Marketing Agent is duly qualified to do business, is in good standing as a foreign entity (or is exempt from such requirements) and has obtained all necessary licenses and approvals in each jurisdiction in which the conduct of its business requires such qualification, licenses or approvals, except where the failure to + +27 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +so qualify or obtain licenses or approvals would not reasonably be expected to have a Material Adverse Effect. + +(iii) Due Authorization. The execution, delivery, and performance of this Agreement and each other Transaction Document to which it is a party, have been duly authorized by the Marketing Agent by all necessary partnership action on the part of the Marketing Agent. + +(iv) No Proceedings. There are no actions, suits, investigations or other proceedings pending, or to its knowledge threatened, against the Marketing Agent or any of its properties: (i) asserting the invalidity of this Agreement or any other Transaction Document to which it is a party; (ii) seeking to prevent the consummation of any of the transactions contemplated by this Agreement or any other Transaction Document to which it is a party; or (iii) seeking any determination or ruling that might have a Material Adverse Effect on the performance by the Marketing Agent of its obligations under, or the validity or enforceability of, this Agreement or any other Transaction Document to which it is a party. + +(v) All Consents. All authorizations, consents, orders or approvals of or registrations or declarations with any Governmental Authority required to be obtained, effected or given to it, if any, in connection with the execution and delivery of this Agreement and each other Transaction Document to which it is a party and the performance of the transactions contemplated by this Agreement or any other Transaction Document by the Marketing Agent, in each case, have been duly obtained, effected or given and are in full force and effect, except for those which the failure to obtain would not reasonably be expected to have a Material Adverse Effect. + +(vi) Binding Obligation. This Agreement and each other Transaction Document to which it is a party constitutes, when duly executed and delivered by each other party hereto and thereto, a legal, valid and binding obligation of the Marketing Agent, enforceable against it in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, receivership, conservatorship or other similar Laws affecting creditors' rights generally or by general principles of equity. + +(vii) No Conflict. The execution and delivery of this Agreement or any other Transaction Document to which it is a party by the Marketing Agent, and the performance by it of the transactions contemplated by the Transaction Documents and the fulfillment of the terms hereof and thereof applicable to the Marketing Agent, (i) do not contravene (A) the organizational documents of the Marketing Agent, (B) any contractual restriction binding on or affecting it or its property, or (C) any order, writ, judgment, award, injunction or decree binding on or affecting it or its property, except, in each case of (A), (B) or (C), where such contravention would not reasonably be expected to have a Material Adverse Effect and (ii) do not result in or require the creation of any Adverse Claim upon or with respect to any of its properties. + +28 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +(viii) No Violation. The execution and delivery of this Agreement by the Marketing Agent, the performance by the Marketing Agent of the transactions contemplated by this Agreement or any other Transaction Document to which it is a party and the fulfillment of the terms hereof and thereof applicable to the Marketing Agent will not violate any Law applicable to the Marketing Agent, except where such violation would not reasonably be expected to have a Material Adverse Effect. + +Section 6.2 Liability of Servicer and Marketing Agent. + +(a) Liability for Specific Obligations. Each of the Servicer and the Marketing Agent, severally and not jointly, will be liable under this Agreement only for its specific obligations under this Agreement. All other liability is expressly waived and released as a condition of, and consideration for, the execution of this Agreement by the Servicer or the Marketing Agent, as applicable. Each of the Servicer and the Marketing Agent, severally and not jointly, will be liable only for its own willful misconduct, bad faith or gross negligence in performing its obligations under this Agreement. + +(b) No Liability of Others. Each of the Servicer's and the Marketing Agent's obligations under this Agreement are corporate obligations. No Person will have recourse, directly or indirectly, to any member, manager, officer, director, employee or agent of the Servicer for the Servicer's obligations or the Marketing Agent for the Marketing Agent's obligations, as applicable, under this Agreement. + +(c) Legal Proceedings. The Servicer will not be required to start, pursue or participate in any legal proceeding that is not incidental or related to its obligations to service the Receivables under this Agreement and that in its opinion may result in liability or cause it to pay or risk funds or incur financial liability. The Servicer may in its sole discretion start or pursue any legal proceeding to protect the interests of the Noteholders or the Depositor under the Transaction Documents. The Servicer will be responsible for the fees and expenses of legal counsel and any liability resulting from the legal proceeding. + +(d) Force Majeure. Neither the Servicer nor the Marketing Agent will be responsible or liable for any failure or delay in performing its obligations under this Agreement caused by, directly or indirectly, forces beyond its control, including strikes, work stoppages, acts of war, terrorism, civil or military disturbances, fire, flood, earthquakes, storms, hurricanes or other natural disasters or failures of mechanical, electronic or communication systems; provided, however that this provision shall not limit the right to remove the Servicer for a Servicer Termination Event as provided in Section 7.2(a), other than with respect to the extension of the grace periods as provided in Section 7.2(a). Each of the Servicer and the Marketing Agent, as applicable, will use commercially reasonable efforts to resume performance as soon as practicable in the circumstances. + +(e) Reliance by Servicer and Marketing Agent. Each of the Servicer and the Marketing Agent may rely in good faith on the advice of counsel or on any document believed to be genuine and to have been executed by the proper party for any matters under this Agreement. + +Section 6.3 Indemnities of Servicer and the Marketing Agent. + +29 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +(a) Indemnification. + +(i) The Servicer will indemnify the Issuer, the Owner Trustee and the Indenture Trustee (including in its capacity as Note Paying Agent), and their officers, directors, employees and agents (each, an "Indemnified Person") for all fees, expenses, losses, claims, actions, suits, damages and liabilities (including reasonable legal fees and expenses) resulting from the Servicer's (including in its capacity as Custodian) willful misconduct, bad faith or gross negligence in performing its obligations under the Transaction Documents (including such amounts incurred by such parties in defending themselves against any loss, damage or liability and any fees and expenses incurred in connection with any proceedings brought by the Indemnified Person to enforce the Servicer's indemnification or other obligations under this Agreement). + +(ii) The Marketing Agent will indemnify the Indemnified Persons for all fees, expenses, losses, claims, actions, suits, damages and liabilities (including reasonable legal fees and expenses) resulting from the Marketing Agent's willful misconduct, bad faith or gross negligence in performing its obligations under the Transaction Documents (including such amounts incurred by such parties in defending themselves against any loss, damage or liability and any fees and expenses incurred in connection with any proceedings brought by the Indemnified Person to enforce the Marketing Agent's indemnification or other obligations under this Agreement). + +(b) Proceedings. If an Indemnified Person receives notice of a Proceeding against it, the Indemnified Person will, if a claim for indemnity will be made against the Servicer or the Marketing Agent, as applicable, under this Section 6.3, promptly notify the Servicer or the Marketing Agent, as applicable, of the Proceeding; provided, that the failure to give such notice shall not affect the right of an Indemnified Person to indemnification hereunder to the extent that such failure does not prejudice the rights of the Servicer, the Marketing Agent or the Indemnified Person in such Proceeding. The Servicer or the Marketing Agent, as applicable, may participate in and assume the defense and settlement of a Proceeding at its expense. If the Servicer or the Marketing Agent, as applicable, notifies the Indemnified Person of its intention to assume the defense of the Proceeding, the Servicer or the Marketing Agent, as applicable, will assume such defense with counsel reasonably satisfactory to the Indemnified Person, and in a manner reasonably satisfactory to the Indemnified Person, and the Servicer or the Marketing Agent, as applicable, and will not be liable for fees and expenses of separate counsel to the Indemnified Person unless there is a conflict between the interests of the Servicer or the Marketing Agent, as applicable, and the Indemnified Person. If there is a conflict or if the parties cannot reasonably agree as to the selection of counsel, the Servicer or the Marketing Agent, as applicable, will pay the reasonable fees and expenses of separate counsel to the Indemnified Person. No settlement of the Proceeding in which a claim is brought against the Servicer or the Marketing Agent may be settled in the name of, on behalf of, or in any manner in which the Servicer or the Marketing Agent, as applicable, is understood to acknowledge the validity of any claim without the approval of the Servicer or the Marketing Agent, respectively, and the Indemnified Person, which approvals will not be unreasonably withheld. + +(c) Survival of Obligations. Each of the Servicer's and the Marketing Agent's obligations under this Section 6.3, for the period it was the Servicer or the Marketing Agent, + +30 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +respectively, will survive the Servicer's or the Marketing Agent's, as applicable, resignation or termination, the termination of this Agreement, the resignation or removal of the Owner Trustee or the Indenture Trustee and the termination of the Issuer. + +(d) Repayment. If the Servicer or the Marketing Agent makes a payment to an Indemnified Person under this Section 6.3 and the Indemnified Person later collects from others any amounts for which the payment was made, the Indemnified Person will promptly repay those amounts to the Servicer or the Marketing Agent, as applicable. + +Section 6.4 Delegation and Contracting. If Cellco is not the Servicer or the Custodian, the Servicer or the Custodian, as applicable, may not delegate to any Person its obligations under this Agreement without the consent of the Issuer. However, no notice or consent will be required for any delegation if Cellco is the Servicer or the Custodian. No notice or consent will be required for any delegation by the Marketing Agent of its obligations under this Agreement. Any of the Servicer, the Custodian or the Marketing Agent may contract with other Persons to perform its obligations under this Agreement. No delegation or contracting will relieve the Servicer, the Custodian or the Marketing Agent, as applicable, of its responsibilities, and the Servicer, the Custodian or the Marketing Agent, respectively, will remain responsible for those obligations. Each of the Servicer, the Custodian and the Marketing Agent will be responsible for the fees of its delegates and contractors, as applicable. + +Section 6.5 Servicer May Own Notes. The Servicer and any Affiliate of the Servicer, may, in its individual or any other capacity, become the owner or pledgee of Notes with the same rights as it would have if it were not the Servicer or an Affiliate of the Servicer, except as otherwise stated in any Transaction Document. + +Section 6.6 Annual Statement as to Compliance. Within ninety (90) days after the end of each fiscal year for which a report on Form 10-K is required to be filed with the Commission by or on behalf of the Issuer (commencing with the fiscal year ended December 31, 2020), the Servicer will deliver an Officer's Certificate to the Administrator, the Depositor, the Owner Trustee and the Indenture Trustee to the effect that (A) a review of the Servicer's activities during the prior fiscal year (or since the Closing Date in the case of the first such Officer's Certificate) and of its performance under this Agreement has been made under the supervision of the officer executing such Officer's Certificate and (B) to the best of his or her knowledge, based on the review, the Servicer has fulfilled in all material respects its obligations under this Agreement, or, if there has been a failure to fulfill any such obligation in any material respect, specifying each such failure known to such officer and the nature and status of the failure. + +Section 6.7 Assessment of Compliance and Accountants' Attestation. + +(a) Within ninety (90) days after the end of each fiscal year for which a report on Form 10-K is required to be filed with the Commission by or on behalf of the Issuer (commencing with the fiscal year ended December 31, 2020), the Servicer will: + +(i) deliver to the Issuer, the Depositor, the Administrator, the Owner Trustee, the Indenture Trustee and the Rating Agencies a report regarding the Servicer's assessment of compliance with the Servicing Criteria during the immediately preceding + +31 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +calendar year, including disclosure of any material instance of non-compliance identified by the Servicer, as required under Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122 of Regulation AB. Such report shall be addressed to the Issuer and signed by an authorized officer of the Servicer, and shall address each of the Servicing Criteria applicable to the Servicer; + +(ii) deliver to the Issuer, the Depositor, the Administrator, the Owner Trustee, the Indenture Trustee and the Rating Agencies a report of a registered public accounting firm reasonably acceptable to the Issuer and the Administrator that attests to, and reports on, the assessment of compliance made by the Servicer and delivered pursuant to the preceding paragraph. This attestation shall be delivered in accordance with Rules 1-02(a)(3) and 2-02(g) of Regulation S‑X under the Securities Act and the Exchange Act; + +(iii) cause each Subservicer and each Subcontractor, if any, determined by the Servicer to be "participating in the servicing function" within the meaning of Item 1122 of Regulation AB, to deliver to the Issuer, the Depositor, the Administrator, the Owner Trustee and the Indenture Trustee an assessment of compliance and accountants' attestation as and when provided in paragraphs (i) and (ii) of this Section; and + +(iv) if requested by the Administrator, acting on behalf of the Issuer, deliver to the Issuer, the Depositor and the Administrator and any other Person that will be responsible for signing the certification (a "Sarbanes Certification") required by Rules 13a-14(d) and 15d- 14(d) under the Exchange Act (pursuant to Section 302 of the Sarbanes-Oxley Act of 2002) on behalf of an asset-backed issuer with respect to a securitization transaction a certification in the form attached hereto as Exhibit B. + +The Servicer acknowledges that the parties identified in clause (a)(iv) above may rely on the certification provided by the Servicer pursuant to such clause in signing a Sarbanes Certification and filing such with the Commission. The Administrator, acting on behalf of the Issuer, will not request delivery of a certification under clause (a)(iv) above unless the Depositor is required under the Exchange Act to file an annual report on Form 10‑K with respect to an asset-backed issuer whose asset pool includes receivables. + +(b) Each assessment of compliance provided by a Subservicer pursuant to Section 6.7(a)(iii) shall address each of the Servicing Criteria specified on a certification to be delivered by such Subservicer to the Servicer, the Issuer, the Depositor and the Administrator on or prior to the date of such appointment. An assessment of compliance provided by a Subcontractor pursuant to Section 6.7(a)(iii) need not address any elements of the Servicing Criteria other than those specified by the Servicer and the Issuer on the date of such appointment. + +ARTICLE VII SERVICER RESIGNATION AND TERMINATION; SUCCESSOR SERVICER + +Section 7.1 No Resignation. The Servicer will not resign as Servicer under this Agreement unless it determines it is legally unable to perform its obligations under this Agreement. The Servicer will notify the Issuer, the Parent Support Provider, the Owner Trustee and the Indenture Trustee of its resignation as soon as practicable after it determines it is required to resign, together with an Opinion of Counsel supporting its determination. The Issuer will + +32 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +promptly notify the Rating Agencies of any resignation of the Servicer. Notwithstanding anything to the contrary in this Agreement or in any other Transaction Document, immediately upon the resignation of Cellco as Servicer pursuant to this Section 7.1, Cellco, in its individual capacity, will be required to assume the obligations of the Servicer to acquire Receivables as set forth in Sections 3.4 and 4.7 of the Master Trust Receivables Transfer Agreement and Sections 2.5 and 2.6 of this Agreement without further action. + +Section 7.2 Servicer Termination Events. + +(a) Servicer Termination Events. The following events will each be a "Servicer Termination Event": + +(i) (x) the Servicer fails to deposit, or deliver to the Owner Trustee or the Indenture Trustee for deposit, any Collections required to be delivered under this Agreement; (y) so long as Cellco is the Servicer, the Marketing Agent fails to deposit, or to cause the related Originators to deposit, into the Collection Account any Upgrade Payments required to be delivered under this Agreement, or (z) so long as Cellco is the Servicer, the Parent Support Provider fails to make any payments with respect to the items set forth in clause (x) or clause (y) above, to the extent the Servicer, or the Marketing Agent or any related Originator, respectively, fails to do so, and, in each case, which such failure continues for five (5) Business Days after the Servicer, the Marketing Agent or the Parent Support Provider, as applicable, receives written notice of the failure from the Owner Trustee or the Indenture Trustee, or a Responsible Person of the Servicer, the Marketing Agent or the Parent Support Provider, as applicable, obtains actual knowledge of the failure; or + +(ii) the Servicer (including in its capacity as Custodian) fails to observe or to perform any obligation under this Agreement, other than as set forth in clause (i) or (iii), which failure has a material adverse effect on the Noteholders and continues for ninety (90) days after the Servicer receives written notice of the failure from the Owner Trustee, the Indenture Trustee or the Noteholders of at least a majority of the Note Balance of the Controlling Class; or + +(iii) so long as Cellco is the Servicer, the failure by (x) the Marketing Agent to make, or to cause the related Originators to make, (i) any payments required to be paid by the Marketing Agent, including without limitation Credit Payments or (ii) payments relating to the acquisition by the Marketing Agent or the related Originators of Receivables that are subject to certain transfers, but not including Upgrade Payments, or (y) the Parent Support Provider to make any payments set forth in clause (x) above, to the extent that the Marketing Agent or any related Originator fails to do so, and in either case, that continues for ten (10) Business Days after the Marketing Agent or Parent Support Provider, as applicable, receives written notice of the failure from the Owner Trustee or the Indenture Trustee, or a Responsible Person of the Marketing Agent or the Parent Support Provider, as applicable, obtains actual knowledge of the failure; or + +(iv) an Insolvency Event of the Servicer occurs; + +33 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +provided, however, that a delay or failure of performance referred to in clauses (i), (ii) or (iii) above for an additional period of sixty (60) days will not constitute a Servicer Termination Event if such delay or failure was caused by force majeure or other similar occurrence, as further described in Section 6.2(d). + +(b) Notice of Servicer Termination Event. The Servicer will notify the Issuer, the Owner Trustee and the Indenture Trustee of any Servicer Termination Event or any event that with the giving of notice or passage of time, or both, would become a Servicer Termination Event, no later than five (5) Business Days after a Responsible Person of the Servicer has received written notice of or has actual knowledge of the event. If a Servicer Termination Event occurs, the Issuer will promptly notify the Rating Agencies and the Asset Representations Reviewer. + +(c) Removal. If a Servicer Termination Event occurs and is continuing, the Indenture Trustee may and, if directed by the Noteholders of a majority of the Note Balance of the Controlling Class, must remove the Servicer and terminate its rights and obligations under this Agreement by notifying the Servicer, the Issuer, the Parent Support Provider, the Owner Trustee, and the Secured Parties. The notice of termination will state the date the termination will be effective. On receipt of the notice, the Issuer will promptly notify the Rating Agencies, and the Owner Trustee will promptly notify the Certificateholders. Notwithstanding anything to the contrary in this Agreement or in any other Transaction Document, immediately upon the removal of Cellco as Servicer pursuant to this Section 7.2, Cellco, in its individual capacity, shall assume the obligations of the Servicer to acquire Receivables as set forth in Sections 3.4 and 4.7 of the Master Trust Receivables Transfer Agreement and Sections 2.5 and 2.6 of this Agreement without further action. + +(d) Waiver of Servicer Termination Events. The Noteholders of a majority of the Note Balance of the Controlling Class or, if no Notes are Outstanding, the Owner Trustee, at the direction of the Class A Certificateholder, may direct the Indenture Trustee to waive a Servicer Termination Event, except with respect to a failure to make required deposits to or payment from any of the Bank Accounts, and the consequences thereof. Upon the waiver, the Servicer Termination Event will be deemed not to have occurred. No waiver will extend to any other Servicer Termination Event or impair a right relating to any other Servicer Termination Event. The Issuer will promptly notify the Rating Agencies of any waiver. + +Section 7.3 Continue to Perform. If the Servicer resigns under Section 7.1, it will continue to perform its obligations as Servicer under this Agreement until the earlier to occur of (a) a Successor Servicer accepting its engagement as Servicer under Section 7.4 or (b) the date the Servicer is legally unable to act as Servicer. If the Servicer is terminated under this Agreement, it will continue to perform its obligations as Servicer under this Agreement until the date stated in the notice of termination. If Cellco is the resigning or removed Servicer, Cellco shall (x) remit any amounts due on the Receivables that are remitted to Cellco in error, rather than to the Successor Servicer as set forth in the notice sent to Obligors under Section 3.13, and provide the Successor Servicer with any necessary information regarding the amount remitted to the Successor Servicer by Cellco and the Receivable for which such amount was remitted and (y) continue to perform its remittance obligations set forth in Section 3.12(b) for as long as any + +34 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +Receivable continues to have a Principal Balance or until this Agreement is terminated as set forth in Section 8.3. + +Section 7.4 Successor Servicer. + +(a) Engagement of Successor Servicer; Indenture Trustee to Act. + +(i) If the Servicer resigns or is terminated under this Agreement, the Indenture Trustee will promptly engage an institution having a net worth of not less than $50,000,000 whose regular business and operations includes the servicing of consumer receivables and can accommodate the servicing of device payment plan agreements, as the successor to the Servicer under this Agreement (the "Successor Servicer") and successor to the Administrator under Section 3.4 of the Administration Agreement. + +(ii) If no Person has accepted the engagement as Successor Servicer when the Servicer stops performing its obligations, the Indenture Trustee, without further action, will be automatically appointed the Successor Servicer to perform the obligations of the Servicer (other than any obligations specifically excluded) until such time as another Successor Servicer shall accept engagement as Successor Servicer. If the Indenture Trustee becomes the Successor Servicer, it (A) will do so in its individual capacity and not in its capacity as Indenture Trustee and, accordingly, Article VI of the Indenture will be inapplicable to the Indenture Trustee solely in its capacity as Successor Servicer and (B) may appoint as Servicer any one of its Affiliates, but the Indenture Trustee, in its capacity as Successor Servicer, will be liable for the actions and omissions of such Affiliate. If the Indenture Trustee is unwilling or legally unable to act as Successor Servicer, it will appoint, or petition a court of competent jurisdiction to appoint, an institution having a net worth of not less than $50,000,000 whose regular business and operations includes the servicing of consumer receivables and can accommodate the servicing of device payment plan agreements, as successor to the Servicer under this Agreement. The Indenture Trustee will be released from its obligations as Successor Servicer on the date that a new Servicer accepts its engagement as Successor Servicer. + +(b) Acceptance of Engagement. The Successor Servicer will accept its engagement by assuming the Servicer's obligations under this Agreement or entering into an amendment to this Agreement or a new servicing agreement on substantially the same terms as this Agreement, in a form acceptable to the Owner Trustee and the Indenture Trustee. The Successor Servicer will deliver a copy of the assumption, amendment or new servicing agreement to the other parties and the Indenture Trustee. The Successor Servicer (other than the Indenture Trustee as Successor Servicer) will accept its engagement as Administrator according to Section 3.5 of the Administration Agreement. Promptly following a Successor Servicer's acceptance of its engagement, the Indenture Trustee will notify the Issuer, the Owner Trustee and the Secured Parties of the engagement. On receipt of a notice of engagement, the Issuer will promptly notify the Rating Agencies and the Asset Representations Reviewer, and the Owner Trustee will promptly notify the Certificateholders. Any Successor Servicer will agree to provide to Cellco any information relating to payments received from Obligors (including any payments received on a Receivable that was the subject of an upgrade for which none of the Marketing Agent, the related Originator or the Parent Support Provider deposited a required Upgrade Payment), + +35 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +delinquencies in payments by Obligors, any Written-Off Receivables and any other information related to the Obligors and the Receivables required by Cellco to service the accounts of which any Receivables are a part, including, but not limited to, granting and applying credits to any account for which none of the Marketing Agent, the related Originator or the Parent Support Provider remitted an Upgrade Payment, as set forth in Section 3.12(b). Any Successor Servicer will agree to be bound by the terms and conditions of the legal, regulatory, privacy and data protection policies set forth in Exhibit A attached hereto to the extent such Successor Servicer receives information from Cellco or any of its Affiliates relating to the Receivables. For the avoidance of doubt, no Successor Servicer will be required to assume or undertake the obligations of Cellco, as Servicer, under Sections 3.4 and 4.7 of the Master Trust Receivables Transfer Agreement or Sections 2.5 and 2.6 of this Agreement. No Successor Servicer shall have any liability for the acts or omissions of any predecessor Servicer. + +(c) Compensation of Successor Servicer. The Indenture Trustee may make arrangements for the compensation of the Successor Servicer out of Collections as it and the Successor Servicer may agree. In addition to the Servicing Fee, on the date of its appointment as Successor Servicer, such Successor Servicer will receive a fee of $150,000 payable pursuant to Section 8.2(c) or 8.2(e) of the Indenture, as applicable, and thereafter, will be entitled to the Additional Successor Servicer Fee, which will be paid in accordance with the priorities set forth in Section 8.2(c) or 8.2(e) of the Indenture, as applicable. + +(d) Transfer of Authority. On the effective date of the Servicer's resignation or termination or the later date that the Servicer stops performing its obligations, and solely to the extent the Successor Servicer is an entity other than the Indenture Trustee, all rights and obligations of the Servicer under this Agreement and of the Administrator under the Administration Agreement will become the rights and obligations of the Successor Servicer, including as successor Administrator. For the avoidance of doubt, (x) the resignation or removal of Cellco as Servicer will not result in the termination of Cellco's duties as Marketing Agent and (y) if the Indenture Trustee is the Successor Servicer, Cellco will continue to act as Administrator under the Administration Agreement, to the extent it is able to continue to perform thereunder pursuant to the terms of the Administration Agreement. + +(e) Authority of Issuer and Indenture Trustee. The Issuer and the Indenture Trustee are authorized to execute and deliver, on behalf of the Servicer, as attorney-in-fact or otherwise, all documents, and to do all other acts or things necessary or advisable to effect the termination and replacement of the Servicer. + +Section 7.5 Transition of Servicing. + +(a) Cooperation on Termination. On its resignation or termination, the Servicer will cooperate with the Issuer, the Owner Trustee, the Indenture Trustee and the Successor Servicer in effecting (i) the termination of its rights and obligations under this Agreement and (ii) an orderly transition of such rights and obligations to the Successor Servicer. + +(b) Transfer of Cash, Receivable Files and Records. As soon as practicable after the effective date of its resignation or termination, the predecessor Servicer will (i) transfer to the Successor Servicer all funds relating to the Receivables that are held or later received by the + +36 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +predecessor Servicer and (ii) deliver to the Successor Servicer the Receivable Files and the accounts and records maintained by the Servicer. The Servicer will not be obligated to provide, license or assign its processes, procedures, models, servicing software or other applications to any Successor Servicer or any third party, or provide anything covered by a restriction on transfer or assignment or a confidentiality agreement or otherwise restricted by legal, regulatory, privacy or data protection policies. + +(c) Expenses of Servicing Transition. All reasonable expenses incurred by the Issuer, the Owner Trustee, the Indenture Trustee and the Successor Servicer in connection with (i) the transition of servicing rights and obligations to the Successor Servicer and (ii) amending this Agreement or entering into an assumption agreement or new agreement to reflect a succession of the Servicer will be paid by the resigning or terminated Servicer on receipt of an invoice in reasonable detail. + +Section 7.6 Merger, Consolidation, Succession or Assignment. Any Person (a) into which the Servicer is merged or consolidated, (b) resulting from a merger or consolidation to which the Servicer is a party, (c) succeeding to the Servicer's business or (d) that is an Affiliate of the Servicer to whom the Servicer has assigned this Agreement, will be the successor to the Servicer under this Agreement. Within fifteen (15) Business Days after the merger, consolidation, succession or assignment, such Person will (i) execute an agreement to assume the Servicer's obligations under this Agreement and each Transaction Document to which the Servicer is a party (unless the assumption happens by operation of Law), (ii) deliver to the Issuer, the Owner Trustee and the Indenture Trustee an Officer's Certificate and an Opinion of Counsel each stating that the merger, consolidation, succession or assignment and the assumption agreement comply with this Section 7.6 and (iii) notify the Rating Agencies of the merger, consolidation, succession or assignment. + +ARTICLE VIII TERMINATION + +Section 8.1 Optional Acquisition of Receivables; Clean-Up Redemption of Notes. + +(a) Optional Acquisition. On each Payment Date following the last day of a Collection Period as of which the aggregate Principal Balance of the Receivables shall be equal to or less than 10% of the aggregate Principal Balance of the Receivables as of the Closing Date, the Class A Certificateholder (for as long as the Class A Certificateholder is an Originator or an Affiliate of the Originators), with the consent of the Administrator, on behalf of the Issuer, shall have the option to acquire, as of the end of the immediately preceding Collection Period, any Receivables remaining in the Trust Property on such date by transferring to the Issuer an amount equal to the Optional Acquisition Amount (the "Optional Acquisition"), and to redeem the Notes, in whole but not in part (the "Clean-Up Redemption") without any Make-Whole Payment (other than any Make-Whole Payments already due and payable on such date). + +(b) Exercise of Optional Acquisition and Clean-Up Redemption of Notes. The Class A Certificateholder may exercise its option set forth in Section 8.1(a) by notifying the Issuer, the Servicer, the Indenture Trustee, the Owner Trustee and the Rating Agencies, in writing, at least ten (10) days before the Payment Date on which the Optional Acquisition is to be exercised, + +37 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +After receiving such notice, the Indenture Trustee will promptly notify the Noteholders of the resulting Clean-Up Redemption and provide instructions for surrender of the Notes for final payment including all accrued and unpaid interest and any applicable Make-Whole Payments already due and payable on the Notes, as set forth in Section 10.1(a) of the Indenture. + +On the Payment Date related to the Collection Period in which the Optional Acquisition is exercised, the Class A Certificateholder will deposit into the Collection Account the acquisition amount for such remaining Receivables as set forth in Section 8.1(a) equal to the fair market value of such Receivables as of the last day of the Collection Period immediately preceding such Payment Date as agreed upon by the Class A Certificateholder and the Issuer (the "Optional Acquisition Amount"); provided that the transfer may only occur if the Optional Acquisition Amount, together with any amounts on deposit in the Bank Accounts, is greater than or equal to the sum of (A) the Note Balance of the Notes, any accrued but unpaid interest and any unpaid Make-Whole Payments and (B) all other amounts payable by the Issuer under the Transaction Documents including, but not limited to, all fees, expenses and indemnities owed to the Indenture Trustee and the Owner Trustee under the Transaction Documents as of such date. For the avoidance of doubt, if the Class A Certificateholder and the Issuer cannot agree on the Optional Acquisition Amount, the Class A Certificateholder will not be permitted to exercise its option set forth in Section 8.1(a). On the Payment Date on which the Optional Acquisition is to be exercised, the Indenture Trustee shall transfer any amounts on deposit in the Reserve Account, the Acquisition Account and the Negative Carry Account into the Collection Account. Upon the exercise of the Optional Acquisition, the Notes will be redeemed and paid in full. + +Section 8.2 Optional Redemption of Notes. + +(a) Optional Redemption. On any Payment Date on and after the Payment Date in February 2021, the Class A Certificateholder (for as long as the Class A Certificateholder is an Originator or an Affiliate of the Originators), with the consent of the Administrator, on behalf of the Issuer, shall have the option to redeem the Notes, in whole but not in part (the "Optional Redemption"), with a required Make-Whole Payment. + +(b) Exercise of Optional Redemption. The Class A Certificateholder may exercise its option set forth in Section 8.2(a) by notifying the Issuer, the Servicer, the Indenture Trustee, the Owner Trustee and the Rating Agencies, in writing, at least ten (10) days before the Payment Date on which the Optional Redemption is to be exercised. After receiving such notice, the Indenture Trustee will promptly notify the Noteholders of the Optional Redemption and provide instructions for surrender of the Notes for final payment including all accrued and unpaid interest and any applicable Make-Whole Payments due and payable on the Notes, as set forth in Section 10.1(a) of the Indenture. + +On the Payment Date on which the Optional Redemption is to be exercised, the Issuer shall transfer the entire pool of Receivables to another Verizon special purpose entity or a third-party purchaser and the party receiving the Receivables shall cause the acquisition amount received by the Issuer for the Receivables to be deposited by the Issuer (or the Servicer, on its behalf) into the Collection Account, which amount shall be equal to the fair market value of such Receivables as of the last day of the Collection Period immediately preceding such Payment Date as agreed upon by the Class A Certificateholder and the Issuer; provided that the transfer + +38 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +may only occur if the amount received in connection with any such transfer, together with any amounts on deposit in the Bank Accounts, is greater than or equal to the sum of (A) the Note Balance of the Notes, any accrued but unpaid interest and any unpaid Make-Whole Payments and (B) all other amounts payable by the Issuer under the Transaction Documents including, but not limited to, all fees, expenses and indemnities owed to the Indenture Trustee and the Owner Trustee under the Transaction Documents as of such date. On the Payment Date on which the Optional Redemption is to be exercised, the Indenture Trustee shall transfer any amounts on deposit in the Reserve Account, the Acquisition Account and the Negative Carry Account into the Collection Account. Upon the exercise of the Optional Redemption, the Notes will be redeemed and paid in full. + +Section 8.3 Termination. This Agreement will terminate on the earlier to occur of (a) the date upon which the last remaining Receivable is paid in full, settled, sold or written off and any amounts received are applied and (b) the Issuer is terminated under Section 8.1 of the Trust Agreement. + +ARTICLE IX OTHER AGREEMENTS + +Section 9.1 Financing Statements. + +(a) Filing of Financing Statements. The Depositor will file financing and continuation statements, and amendments to the statements, in the jurisdictions and with the filing offices necessary to perfect the Issuer's interest in the Depositor Transferred Property. The Depositor will promptly deliver to the Issuer and the Indenture Trustee file-stamped copies of, or filing receipts for, any financing statement, continuation statement and amendment to a previously filed financing statement. + +(b) Issuer and Indenture Trustee Authorized to File Financing Statements. The Depositor authorizes the Issuer and the Indenture Trustee (but the Indenture Trustee will not be required to do so) to file financing and continuation statements, and amendments to the statements, in the jurisdictions and with the filing offices as the Issuer or the Indenture Trustee may determine are necessary or advisable to perfect the Issuer's interest in the Depositor Transferred Property. The financing and continuation statements may describe the Depositor Transferred Property as the Issuer or the Indenture Trustee may reasonably determine to perfect the Issuer's interest in the Depositor Transferred Property. The Issuer or the Indenture Trustee (with respect to the Indenture Trustee, solely to the extent it has elected to make such filing) will promptly deliver to the Depositor file-stamped copies of, or filing receipts for, any financing statement, continuation statement and amendment to a previously filed financing statement. The permissive right of the Indenture Trustee to file any financing statement shall not be construed as a duty or obligation. + +(c) Relocation of Depositor. The Depositor will notify the Owner Trustee and the Indenture Trustee at least ten (10) days before a relocation of its chief executive office or change in its corporate structure, form of organization or jurisdiction of organization if it could require the filing of a new financing statement or an amendment to a previously filed financing statement under Section 9-307 of the UCC. If required, the Depositor will promptly file new + +39 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +financing statements or amendments to all previously filed financing statements. The Depositor will maintain its chief executive office within the United States and will maintain its jurisdiction of organization in only one State. + +(d) Change of Depositor's Name. The Depositor will notify the Owner Trustee and the Indenture Trustee at least ten (10) days before any change in the Depositor's name that could make a financing statement filed under this Section 9.1 seriously misleading under Section 9-506 of the UCC. If required, the Depositor will promptly file amendments to all previously filed financing statements. + +Section 9.2 No Transfer or Lien by Depositor. Except for the transfer and assignment under this Agreement, the Depositor will not transfer or assign any Depositor Transferred Property to another Person or Grant or allow a Lien, other than a Permitted Lien, on an interest in any Depositor Transferred Property. The Depositor will defend the Issuer's interest in the Depositor Transferred Property against claims of third parties claiming through the Depositor. + +Section 9.3 Expenses. The Depositor will pay the expenses to perform its obligations under this Agreement and the Issuer's and the Indenture Trustee's reasonable expenses to perfect the Issuer's interest in the Depositor Transferred Property and to enforce the Depositor's obligations under this Agreement. + +Section 9.4 Receivables Information. + +(a) Servicer's Receivables Systems. On and after the Closing Date or Acquisition Date, as applicable, until a Receivable has been paid in full, acquired or sold to a third party under Section 3.4, the Servicer will mark its receivables systems to indicate clearly that the Receivable is owned by the Issuer and has been pledged to the Indenture Trustee under the Indenture. + +(b) List of Receivables. If requested by the Owner Trustee or the Indenture Trustee, the Servicer will furnish a list of Receivables (by loan number) to the Owner Trustee and the Indenture Trustee. + +Section 9.5 No Petition. The parties agree that, before the date that is one year and one day (or, if longer, any applicable preference period) after the payment in full of (a) all securities issued by the Depositor or by a trust for which the Depositor was a depositor or (b) the Notes, it will not start or pursue against, or join any other Person in starting or pursuing against, (i) the Depositor or (ii) the Issuer, respectively, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or other proceedings under any bankruptcy or similar Law. This Section 9.5 will survive the termination of this Agreement. + +Section 9.6 Limited Recourse. Each party agrees that any claim that it may seek to enforce against the Depositor or the Issuer under this Agreement is limited to the Depositor Transferred Property only and is not a claim against the Depositor's or the Issuer's assets as a whole or against assets other than the Depositor Transferred Property. + +40 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +Section 9.7 Limitation of Liability. + +(a) Owner Trustee. This Agreement has been signed on behalf of the Issuer by Wilmington Trust, National Association not in its individual capacity but solely in its capacity as Owner Trustee of the Issuer. In no event will Wilmington Trust, National Association in its individual capacity or as a beneficial owner of the Issuer be liable for the representations, warranties, covenants, agreements or other obligations of the Issuer under this Agreement. For all purposes under this Agreement, the Owner Trustee is subject to, and entitled to the benefits of, the Trust Agreement. Neither the Issuer nor the Owner Trustee will have any liability for any act or failure to act of the Servicer, including any action taken under a power of attorney given under this Agreement. + +(b) Indenture Trustee. This Agreement has been signed by U.S. Bank National Association not in its individual capacity but solely in its capacity as Indenture Trustee. In performing its obligations under this Agreement, the Indenture Trustee is subject to, and entitled to the benefits of, the Indenture. The Indenture Trustee will not have any liability for any act or failure to act of the Servicer, the Custodian, the Marketing Agent, the Issuer or any other Person. + +Section 9.8 Tax Treatment of Notes. Each of the Depositor and the Servicer agree to treat the Notes as indebtedness for U.S. federal, State and local income and franchise tax purposes. + +Section 9.9 Regulation RR Risk Retention. Cellco, as Sponsor, agrees that (i) each of the Sponsor, the Master Trust, each Originator and the nominee of the Originators is under the common control of Verizon and therefore, the nominee of the Originators (which nominee is also the sole equityholder of the Master Trust) is a "majority-owned affiliate" of the Sponsor as defined in the U.S. Credit Risk Retention Rules, (ii) the Sponsor will cause the nominee of the Originators to, and the nominee of the Originators will, retain the Residual Interest on the Closing Date and (iii) the Sponsor will not, and will not permit the Master Trust, the Originators or the nominee of the Originators to, sell, transfer, finance or hedge the Residual Interest except as permitted by the U.S. Credit Risk Retention Rules. + +Section 9.10 Cap Collateral Account. If the Cap Counterparty is required to post collateral under the terms of the Cap Agreement, upon written direction and notification of such requirement, the Servicer shall establish a segregated account (the "Cap Collateral Account") at a Qualified Institution that (i) is not affiliated with the Cap Counterparty and (ii) has total assets of at least $10,000,000,000 (the "Cap Custodian"), titled as an account of the Cap Counterparty as depositor and entitlement holder. In the event that the Cap Custodian no longer satisfies the requirements set forth in the immediately preceding sentence, the Issuer, the Servicer and the Cap Counterparty shall use their reasonable best efforts to move the Cap Collateral Account and any collateral posted therein to another financial institution satisfying the requirements set forth in the immediately preceding sentence within sixty (60) calendar days. The Cap Collateral Account shall be subject to a tri-party account control agreement to be entered into among the Cap Counterparty, the Issuer and the Cap Custodian (the "Control Agreement"). The Control Agreement shall provide, among other customary matters, that (x) the Cap Counterparty shall be entitled to originate entitlement orders and instructions, and receive interest and distributions, with respect to the Cap Collateral Account so long as the Issuer has not delivered a notice to the + +41 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +Cap Custodian and the Cap Counterparty to the effect that the Issuer shall have exclusive control over the Cap Collateral Account, (y) following delivery of such notice of exclusive control the Cap Custodian shall comply with instructions and entitlement orders originated by the Issuer without further consent by the Cap Counterparty, and (z) the Control Agreement shall terminate on the fifth Business Day following delivery of a notice from the Cap Counterparty to the Cap Custodian and the Issuer that the Cap Counterparty has designated an "Early Termination Date" (as defined in the Cap Agreement) in respect of all "Transactions" (as defined in the Cap Agreement) for the reason that the Issuer is the "Defaulting Party" (as defined in the Cap Agreement) or the sole "Affected Party" (as defined in the Cap Agreement) with respect to a "Termination Event" (as defined in the Cap Agreement), unless such notice is contested by the Issuer within such period of five (5) Business Days. The Issuer agrees that it shall not assert exclusive control over, or originate entitlement orders or instructions for the disposition of funds with respect to, the Cap Collateral Account unless the conditions for the exercise of its rights and remedies pursuant to the Cap Agreement are met and such assertion of exclusive control or origination of instructions or entitlement orders is for the purpose of exercising such rights and remedies. The only permitted withdrawal from or application of funds on deposit in, or otherwise to the credit of, the Cap Collateral Account shall be (i) for application to obligations of the Cap Counterparty to the Issuer under the Cap Agreement in accordance with the terms of the Cap Agreement or (ii) to return collateral to the Cap Counterparty when and as required by the Cap Agreement or applicable law. Investment earnings on the Cap Collateral Account, if any, will be distributed to the Cap Counterparty. + +ARTICLE X MISCELLANEOUS + +Section 10.1 Amendments. + +(a) Amendments to Clarify and Correct Errors and Defects. The parties may amend this Agreement (including Appendix A) to clarify an ambiguity, correct an error or correct or supplement any term of this Agreement that may be defective or inconsistent with the other terms of this Agreement, or to make Benchmark Replacement Conforming Changes, in each case, without the consent of the Noteholders, the Certificateholders or any other Person. The parties may amend any term or provision of this Agreement (including Appendix A) from time to time for the purpose of conforming the terms of this Agreement (including Appendix A) to the description thereof in the Prospectus, without the consent of Noteholders, the Certificateholders or any other Person. The Administrator may amend any term or provision of this Agreement (including Appendix A) from time to time for the purpose of making Benchmark Replacement Conforming Changes, without the consent of Noteholders, the Certificateholders, any party to this Agreement or any other Person. Notice of the occurrence of a Benchmark Transition Event and its related Benchmark Replacement Date, the determination of a Benchmark Replacement and the making of any Benchmark Replacement Conforming Changes will be delivered in writing by the Administrator to the Issuer, the Owner Trustee, a Responsible Person of the Indenture Trustee, the Parent Support Provider, the Sponsor, the Depositor and the Servicer and included in the Monthly Investor Report. Notwithstanding anything in the Transaction Documents to the contrary, upon the delivery of notice to a Responsible Person of the Indenture Trustee and the inclusion of such information in the Monthly Investor Report, the relevant Transaction Documents will be deemed to have been amended to reflect the new Unadjusted + +42 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +Benchmark Replacement, Benchmark Replacement Adjustment and/or Benchmark Replacement Conforming Changes without further compliance with the amendment provisions of the relevant Transaction Documents. + +(b) Other Amendments. Other than as set forth in Section 10.1(c), the parties may amend this Agreement (including Appendix A) to add any provisions to, or change in any manner or eliminate any provisions of, this Agreement or for the purpose of modifying in any manner the rights of the Noteholders under this Agreement, with the consent of the Certificateholders, either (1) without the consent of the Noteholders if (x) the Issuer or the Administrator delivers an Officer's Certificate to the Indenture Trustee and the Owner Trustee stating that the amendment will not have a material adverse effect on the Noteholders, or (y) the Rating Agency Condition is satisfied with respect to such amendment or (2) if the interests of the Noteholders are materially and adversely affected, with the consent of the holders of a majority of the Note Balance of the Controlling Class. + +(c) Amendments Requiring Consent of all Affected Noteholders and Certificateholders. No amendment to this Agreement (including Appendix A) may, without the consent of all adversely affected Noteholders and Certificateholders, (i) change the applicable Final Maturity Date on a Note or change the principal amount of or interest rate or Make-Whole Payment on a Note; (ii) modify the percentage of the Note Balance of the Notes or the Controlling Class required for any action; (iii) modify or alter the definition of "Outstanding," "Controlling Class" or "Amortization Events", or (iv) change the Required Reserve Amount, the Required Acquisition Deposit Amount or the Required Negative Carry Amount. + +(d) Consent of Indenture Trustee and Owner Trustee. The consent of the Indenture Trustee will be required for any amendment under Sections 10.1(b) or (c) that has a material adverse effect on the rights, obligations, immunities or indemnities of the Indenture Trustee. The consent of the Owner Trustee will be required for any amendment under Sections 10.1(b) or (c) that has a material adverse effect on the rights, obligations, immunities or indemnities of the Owner Trustee, which consent will not be unreasonably withheld. + +(e) Opinion of Counsel. Before executing any amendment to this Agreement, the Owner Trustee and the Indenture Trustee shall be entitled to receive and conclusively rely upon, and the Depositor will deliver, an Opinion of Counsel stating that the execution of the amendment is permitted by this Agreement and all conditions precedent thereto have been satisfied. + +(f) Notice of Amendments. Promptly after the execution of an amendment, the Depositor will deliver, or will cause the Administrator to deliver, a copy of the amendment to the Indenture Trustee and the Rating Agencies, and the Indenture Trustee will notify the Noteholders of the substance of the amendment. + +(g) Noteholder Consent. For any amendment to this Agreement (or Appendix A) requiring the consent of any Noteholders, the Indenture Trustee will, when directed by Issuer Order, notify the Noteholders to request consent and follow its reasonable procedures to obtain consent. It shall not be necessary for the consent of the Noteholders to approve the particular form of any proposed amendment or consent, but it shall be sufficient if such consent shall + +43 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +approve the substance thereof. For the avoidance of doubt, any Noteholder consenting to any amendment shall be deemed to agree that such amendment does not have a material adverse effect on such Noteholder. + +Section 10.2 Assignment; Benefit of Agreement; Third-Party Beneficiary. + +(a) Assignment. Except as stated in Sections 5.3, 7.4 and 7.6, this Agreement may not be assigned by the Depositor or the Servicer without the consent of the Owner Trustee, the Indenture Trustee, the Certificateholders and the Noteholders of at least 66-2/3% of the Note Balance of the Controlling Class. + +(b) Benefit of Agreement; Third-Party Beneficiaries. This Agreement is for the benefit of and will be binding on the parties and their permitted successors and assigns. The Owner Trustee and the Indenture Trustee, for the benefit of the Secured Parties, will be third-party beneficiaries of this Agreement and may enforce this Agreement against the Depositor and the Servicer. No other Person will have any right or obligation under this Agreement. + +Section 10.3 Notices. + +(a) Notices to Parties. All notices, requests, directions, consents, waivers or other communications to or from the parties must be in writing and will be considered received by the recipient: + +(i) for personally delivered, express or certified mail or courier, when received; + +(ii) for a fax, when receipt is confirmed by telephone, reply email or reply fax from the recipient; + +(iii) for an email, when receipt is confirmed by telephone or reply email from the recipient; and + +(iv) for an electronic posting to a password-protected website to which the recipient has access, on delivery of an email (without the requirement of confirmation of receipt) stating that the electronic posting has been made. + +(b) Notice Addresses. A notice, request, direction, consent, waiver or other communication must be addressed to the recipient at its address stated in Schedule B, which address the party may change at any time by notifying the other parties. + +(c) Notices to Noteholders. Notices to a Noteholder will be considered received by the Noteholder: + +(i) for Definitive Notes, for overnight mail, on delivery or, for registered first class mail, postage prepaid, three (3) days after deposit in the mail properly addressed to the Noteholder at its address in the Note Register; or + +44 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +(ii) for Book-Entry Notes, when delivered under the procedures of the Clearing Agency, whether or not the Noteholder actually receives the notice. + +Section 10.4 Agent for Service. + +(a) Depositor. The agent for service of the Depositor for this Agreement will be the person holding the office of Secretary of the Depositor at the following address: + +Verizon ABS LLC One Verizon Way Basking Ridge, New Jersey 07920 + +(b) Servicer. The agent for service of the Servicer for this Agreement will be the person holding the office of Secretary of the Servicer at the following address: + +Cellco Partnership d/b/a Verizon Wireless One Verizon Way Basking Ridge, New Jersey 07920 + +(c) Marketing Agent. The agent for service of the Marketing Agent for this Agreement will be the person holding the office of Secretary of the Marketing Agent at the following address: + +Cellco Partnership d/b/a Verizon Wireless One Verizon Way Basking Ridge, New Jersey 07920 + +Section 10.5 GOVERNING LAW. THIS AGREEMENT, INCLUDING THE RIGHTS AND DUTIES OF THE PARTIES HERETO, SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK, BUT WITHOUT REGARD TO ANY OTHERWISE APPLICABLE CONFLICTS OF LAW PRINCIPLES). FOR PURPOSES OF THE UCC, NEW YORK SHALL BE DEEMED TO BE THE SECURITIES INTERMEDIARY'S JURISDICTION, AND THE LAW OF THE STATE OF NEW YORK SHALL GOVERN ALL ISSUES SPECIFIED IN ARTICLE 2(1) OF THE HAGUE SECURITIES CONVENTION. NOTWITHSTANDING SECTION 10.1 OF THIS AGREEMENT, THE PARTIES WILL NOT AGREE TO AMEND THIS AGREEMENT TO CHANGE THE GOVERNING LAW TO ANY LAW OTHER THAN THE LAWS OF THE STATE OF NEW YORK. + +Section 10.6 Submission to Jurisdiction. Each party submits to the nonexclusive jurisdiction of the United States District Court for the Southern District of New York and of any New York State Court sitting in New York, New York for legal proceedings relating to this Agreement. Each party irrevocably waives, to the fullest extent permitted by Law, any objection that it may now or in the future have to the venue of a proceeding brought in such a court and any claim that the proceeding was brought in an inconvenient forum. + +45 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +Section 10.7 WAIVER OF JURY TRIAL. TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY HERETO IRREVOCABLY WAIVES ALL RIGHT OF TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY MATTER ARISING THEREUNDER WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE. + +Section 10.8 No Waiver; Remedies. No party's failure or delay in exercising a power, right or remedy under this Agreement will operate as a waiver. No single or partial exercise of a power, right or remedy will preclude any other or further exercise of the power, right or remedy or the exercise of any other power, right or remedy. The powers, rights and remedies under this Agreement are in addition to any powers, rights and remedies under Law. + +Section 10.9 Severability. If a part of this Agreement is held invalid, illegal or unenforceable, then it will be deemed severable from the remaining Agreement and will not affect the validity, legality or enforceability of the remaining Agreement. + +Section 10.10 Headings. The headings in this Agreement are included for convenience and will not affect the meaning or interpretation of this Agreement. + +Section 10.11 Counterparts. This Agreement may be executed in multiple counterparts. Each counterpart will be an original and all counterparts will together be one document. + +Section 10.12 Limitation of Rights of the Cap Counterparty. All of the rights of the Cap Counterparty in, to and under this Agreement or any other Transaction Document, other than the Cap Agreement (including, but not limited to, the Cap Counterparty's rights to receive notice of any action hereunder or under any other Transaction Document and to give or withhold consent to any action hereunder or under any other Transaction Document), shall terminate upon the termination of the Cap Agreement in accordance with the terms thereof. + +Section 10.13 Intent of the Parties; Reasonableness. The Depositor, the Servicer and the Issuer acknowledge and agree that the purpose of Sections 6.6 and 6.7 of this Agreement is to facilitate compliance by the Issuer and the Depositor with the provisions of Regulation AB and related rules and regulations of the Commission. None of the Depositor, the Administrator nor the Issuer shall exercise its right to request delivery of information or other performance under these provisions other than in good faith, or for purposes other than compliance with the Securities Act, the Exchange Act and the rules and regulations of the Commission thereunder. The Servicer acknowledges that interpretations of the requirements of Regulation AB may change over time, whether due to interpretive guidance provided by the Commission or its staff, consensus among participants in the asset-backed securities markets, advice of counsel, or otherwise, and agrees to comply with requests made by the Issuer or the Administrator in good faith for delivery of information under these provisions on the basis of evolving interpretations of Regulation AB. In connection with this transaction, the Servicer shall cooperate fully with the Administrator and the Issuer to deliver to the Administrator or Issuer, as applicable (including any of its assignees or designees), any and all statements, reports, certifications, records and any other information necessary in the good faith determination of the Issuer or the Administrator to permit the Issuer or Administrator (acting on behalf of the Issuer) to comply with the provisions of Regulation AB, together with such disclosures relating to the Servicer, any Subservicer and + +46 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +the Receivables, or the servicing of the Receivables, reasonably believed by the Issuer or the Administrator to be necessary in order to effect such compliance. + +ARTICLE XI + +ASSET REPRESENTATIONS REVIEW; DISPUTE RESOLUTION + +Section 11.1 Asset Representations Review. + +(a) Upon the occurrence of a Delinquency Trigger with respect to any Collection Period, the Servicer will promptly send to the Administrator, the Indenture Trustee and each Noteholder (and to each applicable Clearing Agency for distribution to Note Owners in accordance with the rules of such Clearing Agency) as of the most recent Record Date a notice describing (i) the occurrence of the Delinquency Trigger, and including reasonably detailed calculations thereof, and (ii) the rights of the Noteholders and Note Owners regarding an Asset Representations Review (including a description of the method by which Noteholders and Note Owners may contact the Indenture Trustee in order to request a Noteholder vote in respect of an Asset Representations Review). In connection with the foregoing, upon request from the Servicer, the Indenture Trustee shall provide a list of the Noteholders of record as of the most recent Record Date. The notice provided under this Section 11.1 (a) and the related 10-D that is filed are the only notices that will be provided to Noteholders concerning whether the Delinquency Trigger has occurred. + +(b) If the Indenture Trustee notifies the Servicer pursuant to 14.2 of the Indenture that sufficient Noteholders have voted within the required time to initiate an Asset Representations Review of all 60-Day Delinquent Receivables by the Asset Representations Reviewer pursuant to the Asset Representations Review Agreement, then the Servicer shall: + +(i) promptly notify the Asset Representations Reviewer and the Indenture Trustee of the number of 60-Day Delinquent Receivables; + +(ii) within sixty (60) days after receipt by the Servicer of that notice from the Indenture Trustee, render reasonable assistance, including granting access to copies of any underlying documents and Receivable Files and all other relevant documents, to the Asset Representations Reviewer to facilitate the performance of a review of all 60-Day Delinquent Receivables, pursuant to Section 3.3(a) of the Asset Representations Review Agreement, in order to verify compliance with the representations and warranties made to the Issuer by the Depositor; provided, that the Servicer shall use its best efforts to redact any materials provided to the Asset Representations Reviewer in order to remove any Personally Identifiable Information without changing the meaning or usefulness of the Review Materials; and + +(iii) provide such other reasonable assistance to the Asset Representations Reviewer as it requests in order to facilitate its Asset Representations Review of the 60-Day Delinquent Receivables pursuant to the Asset Representations Review Agreement. + +Section 11.2 Dispute Resolution. + +47 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +(a) If (i) the Issuer or the Indenture Trustee (acting on behalf of the Noteholders) or (ii) any Noteholder or Verified Note Owner requests, by written notice to (x) the Indenture Trustee (which will be forwarded to the related Originator or the Servicer as applicable) or (y) the related Originator or the Servicer (in the case of Receivables transferred by the Master Trust) (any such party making a request, the "Requesting Party"), that a Receivable be reacquired or acquired due to an alleged breach of the Eligibility Representation with respect to that Receivable as set forth in Section 3.3 of the Originator Receivables Transfer Agreement or Section 3.3 of the Master Trust Receivables Transfer Agreement, respectively, and the request has not been fulfilled or otherwise resolved to the reasonable satisfaction of the Requesting Party within one-hundred eighty (180) days of the receipt of such request by the related Originator or the Servicer (in the case of Receivables transferred by the Master Trust), then the Requesting Party will have the right to refer the matter, at its discretion, to either mediation (including non-binding arbitration) or third-party binding arbitration pursuant to this Section 11.2. Dispute resolution to resolve reacquisition or acquisition requests will be available regardless of whether Noteholders and Note Owners voted to direct an Asset Representations Review or whether the Delinquency Trigger occurred. The Depositor will provide written direction to the Indenture Trustee instructing it to notify the Requesting Party (directly if the Requesting Party is a Noteholder and through the applicable Clearing Agency for distribution to such Requesting Party, if the Requesting Party is a Note Owner, in accordance with the rules of such Clearing Agency) no later than five (5) Business Days after the end of the 180-day period of the date when the 180-day period ends without resolution by the appropriate party, which written direction will specify the identity of the Requesting Party and the date as of which that 180-day period shall have ended; provided, that the Indenture Trustee shall have no other obligation whatsoever to participate in any dispute resolution, mediation or arbitration to determine if a reacquisition or acquisition request has been resolved within the applicable 180-day period. The Requesting Party must provide notice of its intention to refer the matter to mediation, to refer the matter to arbitration, or to institute a legal proceeding, to the Depositor within thirty (30) days after the delivery of notice of the end of the 180-day period. The Depositor will participate in the resolution method selected by the Requesting Party. For the avoidance of doubt, the Owner Trustee shall have no obligation whatsoever to participate in any dispute resolution, mediation or arbitration to determine if a reacquisition or acquisition request has been resolved within the applicable 180-day period. For the avoidance of doubt, if the Indenture Trustee does not agree to pursue or otherwise be involved in resolving any reacquisition or acquisition request or dispute resolution proceeding, the related Noteholders or Verified Note Owners may independently pursue dispute resolution in respect of such reacquisition or acquisition. If the Indenture Trustee brings a dispute resolution action based on Noteholder direction to do so, the "Requesting Party" shall be deemed to be the requesting Note Owners (or the party to the arbitration) for purposes of the dispute resolution proceeding, including allocation of fees and expenses. The Indenture Trustee shall not be liable for any costs, expenses and/or liabilities allocated to a Requesting Party as part of the dispute resolution proceeding. Further, the Indenture Trustee shall be under no obligation under this Agreement, any other Transaction Document or otherwise to monitor reacquisition or acquisition activity or to independently determine which reacquisition or acquisition requests remain unresolved after one-hundred eighty (180) days. + +(b) If the Requesting Party selects mediation (including non-binding arbitration) as the resolution method, the following provisions will apply: + +48 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +(i) The mediation will be administered by JAMS pursuant to its Mediation Procedures in effect on the date the arbitration is filed. + +(ii) The mediator will be impartial, knowledgeable about and experienced with the laws of the State of New York and an attorney specializing in commercial litigation with at least 15 years of experience and who will be appointed from a list of neutrals maintained by JAMS. Upon being supplied a list of at least 10 potential mediators by JAMS each party will have the right to exercise two peremptory challenges within fourteen (14) days and to rank the remaining potential mediators in order of preference JAMS will select the mediator from the remaining attorneys on the list respecting the preference choices of the parties to the extent possible. + +(iii) The parties will use commercially reasonable efforts to begin the mediation within thirty (30) days of the selection of the mediator and to conclude the mediation within sixty (60) days of the start of the mediation. + +(iv) The fees and expenses of the mediation will be allocated as mutually agreed by the parties as part of the mediation. + +(c) If the Requesting Party selects binding arbitration as the resolution method, the following provisions will apply: + +(i) The arbitration will be administered by the AAA pursuant its Arbitration Rules in effect on the date the arbitration is filed. + +(ii) The arbitral panel will consist of three members, (i) one to be appointed by the Requesting Party within five (5) Business Days of providing notice to the Depositor of its selection of arbitration, (ii) one to be appointed by the Depositor within five (5) Business Days of that appointment and (iii) the third, who will preside over the panel, to be chosen by the two party-appointed arbitrators within five (5) Business Days of the second appointment. If any party fails to appoint an arbitrator or the two party-appointed arbitrators fail to appoint the third within the stated time periods, then the appointments will be made by AAA pursuant to the Arbitration Rules. In each such case, each arbitrator will be impartial, knowledgeable about and experienced with the laws of the State of New York and an attorney specializing in commercial litigation with at least 15 years of experience. + +(iii) Each arbitrator will be independent and will abide by the Code of Ethics for Arbitrators in Commercial Disputes in effect as of the date of this Agreement. Prior to accepting an appointment, each arbitrator must promptly disclose any circumstances likely to create a reasonable inference of bias or conflict of interest or likely to preclude completion of the hearings within the prescribed time schedule. Any arbitrator may be removed by AAA for cause consisting of actual bias, conflict of interest or other serious potential for conflict. + +(iv) After consulting with the parties, the arbitral panel will devise procedures and deadlines for the arbitration, to the extent not already agreed to by the parties, with the goal of expediting the proceeding and completing the arbitration within ninety (90) + +49 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +days after appointment. The arbitral panel will have the authority to schedule, hear, and determine any and all motions, including dispositive and discovery motions, in accordance with then-prevailing New York law (including prehearing and post hearing motions), and will do so on the motion of any party to the arbitration. + +(v) Notwithstanding whatever other discovery may be available under the Rules, unless otherwise agreed by the parties, each party to the arbitration will be presumptively limited to the following discovery in the arbitration: (A) four witness depositions not to exceed five hours, and (B) one set of interrogations, document requests, and requests for admissions; provided that the arbitral panel will have the ability to grant the parties, or either of them, additional discovery to the extent that the arbitral panel determines good cause is shown that such additional discovery is reasonable and necessary. + +(vi) The arbitral panel will make its final determination no later than ninety (90) days after appointment. The arbitral panel will resolve the dispute in accordance with the terms of this Agreement, and may not modify or change this Agreement in any way. The arbitral panel will not have the power to award punitive damages or consequential damages in any arbitration conducted by them. In its final determination, the arbitral panel will determine and award the costs of the arbitration (including the fees of the arbitral panel, cost of any record or transcript of the arbitration, and administrative fees) and reasonable attorneys' fees to the parties as determined by the arbitral panel in its reasonable discretion. The determination in any binding arbitration of the arbitral panel will be in writing and counterpart copies will be promptly delivered to the parties. The determination will be final and non-appealable and may be enforced in any court of competent jurisdiction. + +(vii) By selecting binding arbitration, the selecting party is giving up the right to sue in court, including the right to a trial by jury. + +(viii) No person may bring class or collective claims in arbitration even if the Arbitration Rules would allow them. Notwithstanding anything herein to the contrary, the arbitral panel may award money or injunctive relief in favor of the individual party seeking relief and only to the extent necessary to provide relief warranted by that party's individual claim. + +(d) The following provisions will apply to both mediations and arbitrations: + +(i) Any mediation or arbitration will be held in New York, New York; and + +(ii) The details and/or existence of any unfulfilled reacquisition or acquisition request, any informal meetings, mediations or arbitration proceedings conducted under this Section 11.2, including all offers, promises, conduct and statements, whether oral or written, made in the course of the parties' attempt to informally resolve an unfulfilled reacquisition or acquisition request, and any discovery taken in connection with any arbitration, will be confidential, privileged and inadmissible for any purpose, including impeachment, in any mediation, arbitration or litigation, or other proceeding (including + +50 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +any proceeding under this Section 11.2). This information will be kept strictly confidential and will not be disclosed or discussed with any third party (excluding a party's attorneys, experts, accountants and other agents and representatives, as reasonably required in connection with any resolution procedure under this Section 11.2), except as otherwise required by law, regulatory requirement or court order. If any party to a resolution procedure receives a subpoena or other request for information from a third party (other than a governmental regulatory body) for such confidential information, the recipient will promptly notify the other party to the resolution procedure and will provide the other party with the opportunity to object to the production of its confidential information. + +[Remainder of Page Left Blank] + +51 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +IN WITNESS WHEREOF, the undersigned has caused this Agreement to be executed by its duly authorized officer as of the date and year first above written. + +VERIZON ABS LLC, as Depositor + +By: Name: Title: + +VERIZON OWNER TRUST 2020-A, as Issuer + +By: Wilmington Trust, National Association, not in its individual capacity but solely as Owner Trustee of Verizon Owner Trust 2020-A + +By: Name: Title: + +CELLCO PARTNERSHIP d/b/a VERIZON WIRELESS, as Servicer, Marketing Agent and Custodian + +By: Name: Title: + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +AGREED AND ACCEPTED BY: + +U.S. BANK NATIONAL ASSOCIATION, not in its individual capacity but solely as Indenture Trustee + +By: Name: Title: + +Solely with respect to Section 4.1(f): + +U.S. BANK NATIONAL ASSOCIATION, not in its individual capacity but solely as Securities Intermediary + +By: Name: Title: + +WILMINGTON TRUST, NATIONAL ASSOCIATION, not in its individual capacity but solely as Owner Trustee + +By: Name: Title: + +CELLCO PARTNERSHIP d/b/a VERIZON WIRELESS, solely with respect to the obligations set forth in Section 7.1, in its individual capacity + +By: Name: Title: + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +CELLCO PARTNERSHIP d/b/a VERIZON WIRELESS, as Sponsor, solely with respect to the obligations set forth in Section 3.5(a)(ii) and Section 9.9 + +By: Name: Title: + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +Schedule A + +Schedule of Initial Receivables + +Delivered Electronically to Indenture Trustee at Closing + +SA-1 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +Schedule B + +Notice Addresses + +1. If to Cellco, in its individual capacity or as Servicer, Marketing Agent, Custodian or Administrator: + +Cellco Partnership One Verizon Way Basking Ridge, New Jersey 07920 Attention: Assistant Treasurer Telephone: 908-559-5870 Email: kee.chan.sin@verizon.com + +2. If to the Depositor: + +Verizon ABS LLC One Verizon Way Basking Ridge, New Jersey 07920 Attention: Chief Financial Officer Telephone: 908-559-5870 Email: kee.chan.sin@verizon.com + +With a copy to: + +Cellco Partnership One Verizon Way Basking Ridge, New Jersey 07920 Attention: Assistant Treasurer Telephone: 908-559-5870 Email: kee.chan.sin@verizon.com + +3. If to the Issuer: + +c/o the Owner Trustee at the Corporate Trust Office of the Owner Trustee + +With copies to: + +Cellco Partnership One Verizon Way Basking Ridge, New Jersey 07920 Attention: Assistant Treasurer Telephone: 908-559-5870 Email: kee.chan.sin@verizon.com + +SB-1 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +4. If to the Parent Support Provider: + +Verizon Communications Inc. 1095 Avenue of the Americas New York, New York 10036 Attn: Assistant Treasurer Telephone: 908-559-5870 Email: kee.chan.sin@verizon.com + +5. If to the Owner Trustee, at the Corporate Trust Office of the Owner Trustee + +6. If to the Indenture Trustee, at the Corporate Trust Office of the Indenture Trustee + +7. If to S&P: + +S&P Global Ratings 55 Water Street New York, New York 10041 Attention: Asset Backed Surveillance Department Telephone: (212) 438-1000 Fax: (212) 438-2649 + +8. If to Moody's: + +Moody's Investors Service, Inc. ABS Monitoring Department 7 World Trade Center 250 Greenwich Street New York, New York 10007 Email: abssurveillance@moodys.com + +9. If to the Cap Counterparty: + +Bank of America Merrill Lynch 1133 Avenue of the Americas 42nd Floor, NY1-533-42-01 New York, NY 10036-6710 Attention: Agreements & Documentation Facsimile No.: (212) 548-8622 + +With a copy to: dg.dg_gmg_cid_fax_notices@bofasecurities.com + +10. If to the Asset Representations Reviewer: + +Pentalpha Surveillance LLC 375 N French Rd Suite 100 Amherst NY 14228 + +SB-2 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +Attention: VZOT 2020-A Transaction Manager Telephone: (716) 418-1634 Fax: (716) 204-5902 Email: notices@pentalphasurveillance.com (with VZOT 2020-A in the subject line) + +SB-3 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +Appendix A + +Usage and Definitions + +Verizon Owner Trust 2020-A + +Usage + +The following usage rules apply to this Appendix, any document that incorporates this Appendix and any document delivered under any such document: + +(a) The term "document" includes any document, agreement, instrument, certificate, notice, report, statement or other writing, whether in electronic or physical form. + +(b) Accounting terms not defined or not completely defined in this Appendix will have the meanings given to them under generally accepted accounting principles, international financial reporting standards or other applicable accounting principles in effect in the United States on the date of the document that incorporates this Appendix. + +(c) References to "Article," "Section," "Exhibit," "Schedule," "Appendix" or another subdivision of or to an attachment are, unless otherwise stated, to an article, section, exhibit, schedule, appendix or subdivision of or an attachment to the document in which the reference appears. + +(d) Any document defined or referred to in this Appendix or in any document that incorporates this Appendix means the document as amended, modified, supplemented, restated or replaced, including by waiver or consent, and includes all attachments to and instruments incorporated in the document. + +(e) Any statute defined or referred to in this Appendix or in any document that incorporates this Appendix means the statute as amended, modified, supplemented, restated or replaced, including by succession of comparable successor statute, and includes any rules and regulations under the statute and any judicial and administrative interpretations of the statute. + +(f) References to "law" or "applicable law" in this Appendix or in any document that incorporates this Appendix include all rules and regulations enacted under such law. + +(g) The calculation of any amount as of a Cutoff Date or any other day, unless otherwise stated, will be determined as of the end of that calendar day after the application or processing of any funds, payments and other transactions on that day. + +(h) References to deposits, transfers and payments of any funds refer to deposits, transfers or payments of such funds in immediately available funds. + +(i) The terms defined in this Appendix apply to the singular and plural forms of those terms. + +A-1 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +(j) The term "including" means "including without limitation." + +(k) References to a Person are also to its permitted successors and assigns, whether in its individual or representative capacity. + +(l) In the computation of periods of time from one date to or through a later date, the word "from" means "from and including," the word "to" means "to but excluding," and the word "through" means "to and including." + +(m) Except where "not less than zero" or similar language is indicated, amounts determined by reference to a mathematical formula may be positive or negative. + +(n) References to a month, quarter or year are, unless otherwise stated, to a calendar month, calendar quarter or calendar year. + +(o) No Person will be deemed to have "knowledge" of a particular event or occurrence for purposes of any document that incorporates this Appendix, unless either (i) a Responsible Person of the Person has actual knowledge of the event or occurrence or (ii) the Person has received notice of the event or occurrence according to any Transaction Document. + +Definitions + +"60-Day Delinquent Receivable" means, for any date of determination, a Receivable for which there are unpaid charges remaining on the account sixty (60) days after the bill's date due; provided that a Written-Off Receivable is not considered a 60-Day Delinquent Receivable. + +"AAA" means the American Arbitration Association. + +"Account Control Agreement" means the Account Control Agreement, dated as of the Closing Date, among the Issuer, as grantor, the Indenture Trustee, as secured party, and U.S. Bank National Association, in its capacity as both a "securities intermediary" as defined in Section 8- 102 of the UCC and a "bank" as defined in Section 9-102 of the UCC, as amended, restated, supplemented or modified from time to time. + +"Accrued Note Interest" means, for a Class and a Payment Date, the sum of the Note Monthly Interest and the Note Interest Shortfall. + +"Acquired Receivable" means, for a Collection Period, a Receivable (a) acquired by the Servicer under Section 3.3 of the Transfer and Servicing Agreement, (b) acquired by the Marketing Agent under Section 4.3(i) of the Transfer and Servicing Agreement, (c) reacquired by an Originator under Section 3.4 or 4.6 of the Originator Receivables Transfer Agreement, or (d) acquired by the Servicer under Section 3.4 or 4.7 of the Master Trust Receivables Transfer Agreement and for which, in each case, the acquisition or reacquisition is effective during the Collection Period and the Acquisition Amount is included in Available Funds for the related Payment Date. + +A-2 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +"Acquisition Account" means the subaccount of the Collection Account established under Section 4.1(a) of the Transfer and Servicing Agreement. + +"Acquisition Amount" means, for an Acquired Receivable for which the Acquisition Amount is to be included in Available Funds for a Payment Date, the excess of (i) the present value of the Principal Balance of the Receivable as of the last day of the Collection Period immediately preceding the related Collection Period (calculated using the Discount Rate on the basis of a 360-day year of twelve 30-day months and assuming each amount is received at the end of the Collection Period in which the amount is scheduled to be received) over (ii) all cash collections and any other cash proceeds received by the Issuer on the related Receivable from (but excluding) the last day of the Collection Period immediately preceding the related Collection Period to the day on which such Receivable becomes an Acquired Receivable. + +"Acquisition Date" means each date during the Revolving Period on which the Issuer acquires Additional Receivables under Section 2.1(b) of the Transfer and Servicing Agreement and the Depositor acquires Additional Receivables under Section 2.1(b) of the Originator Receivables Transfer Agreement or Section 2.1(a) of the Master Trust Receivables Transfer Agreement; provided that there shall be no more than five (5) Acquisition Dates in any calendar month. + +"Acquisition Date Supplement" means, for any Collection Period that includes an Acquisition Date, the supplement (which may be incorporated into the Monthly Investor Report) delivered by the Servicer setting forth (a) the aggregate Principal Balance as of the Cutoff Date for the Additional Receivables transferred by the Issuer, (b) the Additional Receivables Transfer Amount for such Acquisition Date, (c) the amount in the Acquisition Account on such Acquisition Date, (d) the Yield Supplement Overcollateralization Amount for such Acquisition Date and (e) the results of the Credit Enhancement Test, the Pool Composition Tests and the Floor Credit Enhancement Composition Tests as of such Acquisition Date. + +"Acquisition Deposit Amount" means, for any Payment Date during the Revolving Period, an amount equal to (a) the Required Acquisition Deposit Amount minus (b) the amount on deposit in the Acquisition Account on such Payment Date (before payments under Section 8.2(c) of the Indenture on that Payment Date). + +"Additional Originator" has the meaning stated in Section 6.11 of the Originator Receivables Transfer Agreement. + +"Additional Receivable" means any device payment plan agreement acquired by the Issuer on an Acquisition Date and listed on the Schedule of Receivables attached to a Transfer Notice delivered to the Issuer and the Indenture Trustee in connection with such Acquisition Date. + +"Additional Receivables Cash Transfer Amount" means, for an Acquisition Date, the lesser of (x) the Additional Receivables Transfer Amount and (y) the amount on deposit in the Acquisition Account on such Acquisition Date. + +A-3 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +"Additional Receivables Transfer Amount" means, for an Acquisition Date, an amount equal to the discounted present value of the remaining payments (after the end of the calendar day on the related Cutoff Date) for the remaining term of such Additional Receivable discounted using the Discount Rate. + +"Additional Successor Servicer Fee" means, for any Payment Date, the excess, if any, of (x) $425,000 over (y) the Servicing Fee. + +"Additional Trust Property" means, for any Acquisition Date, (a) the Depositor Transferred Property for that Acquisition Date, (b) all present and future claims, demands, causes of action and choses in action for any of the foregoing, and (c) all payments on or under and all proceeds for any of the foregoing. + +"Adjusted Pool Balance" means, on the Closing Date, an amount equal to: + +(a) the Initial Pool Balance; minus (b) the Yield Supplement Overcollateralization Amount for the Closing Date; + +and means, on a Payment Date or Acquisition Date, an amount (not less than zero) equal to: + +(a) the Pool Balance as of the last day of the Collection Period immediately preceding such Payment Date or Acquisition Date; minus (b) the Yield Supplement Overcollateralization Amount for such Payment Date or Acquisition Date. + +"Administration Agreement" means the Administration Agreement, dated as of the Closing Date, between the Administrator and the Issuer, as amended, restated, supplemented or modified from time to time. + +"Administrator" means Cellco, in its capacity as administrator under the Administration Agreement. + +"Adverse Claim" means any Lien other than a Permitted Lien. + +"Affiliate" means, for a specified Person (other than a natural Person), (a) another Person controlling, controlled by or under common control with the specified Person, (b) any other Person beneficially owning or controlling more than fifty percent (50%) of the outstanding voting securities or rights of or interest in the capital, distributions or profits of the specified Person or (c) any controlling shareholder of, or partner in, the specified Person. For the purposes of this definition, "control" when used with respect to any Person means the direct or indirect possession of the power to direct or cause the direction of the management or policies of the Person, whether through ownership, by contract, arrangement or understanding, or otherwise. + +"Amortization Event" means the occurrence of any of the following: + +A-4 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +(a) the Issuer fails on a Payment Date during the Revolving Period to (i) pay the Accrued Note Interest on the Notes, (ii) have the Required Reserve Amount on deposit in the Reserve Account or (iii) have the Required Negative Carry Amount on deposit in the Negative Carry Account; + +(b) for any Payment Date, the sum of the fractions, expressed as percentages for each of the three Collection Periods immediately preceding such Payment Date, calculated by dividing the aggregate Principal Balance of Written-Off Receivables during each of those Collection Periods by the Pool Balance as of the first day of each of those Collection Periods, multiplied by four, exceeds 10.00%, as determined by the Servicer at least two (2) Business Days before each Payment Date; + +(c) for any Payment Date, the sum of the fractions, expressed as percentages for each of the three Collection Periods immediately preceding such Payment Date, calculated by dividing the aggregate Principal Balance of all Receivables that are ninety-one (91) days or more Delinquent at the end of each of those Collection Periods by the Pool Balance as of the last day of each of those Collection Periods, divided by three, exceeds 2.00%, as determined by the Servicer at least two (2) Business Days before each Payment Date; + +(d) the Adjusted Pool Balance is less than 50.00% of the aggregate Note Balance of the Notes; + +(e) on any Payment Date, after giving effect to all payments to be made on such Payment Date pursuant to Section 8.2 of the Indenture and the acquisition of Additional Receivables on that date, the amount of Overcollateralization for the Notes is not at least equal to the Overcollateralization Target Amount; provided, that if the Overcollateralization Target Amount is not reached on any Payment Date solely due to a change in the percentage used to calculate such Overcollateralization Target Amount, such an event will not constitute an "Amortization Event" unless the Overcollateralization Target Amount is not reached by the end of the third month after the related Payment Date; + +(f) a Servicer Termination Event has occurred and is continuing; or + +(g) an Event of Default has occurred and is continuing. + +"Amortization Period" means the Payment Date beginning on the earlier of (i) the Payment Date in February 2022 or (ii) the Payment Date on or immediately following the date on which an Amortization Event occurs and ending on the earlier of (a) the Payment Date on which each Class of Notes have been paid in full and (b) the Final Maturity Date. + +"Amount Financed" means, for a Receivable, the amount of credit provided to the Obligor for the purchase of the related Device. + +A-5 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +"Annual Percentage Rate" or "APR" of a Receivable means the annual rate of finance charges stated in the Receivable or in any federal Truth-in-Lending Act correction notice related to the Receivable. + +"Annual Upgrade Offer" means the annual upgrade offer extended by Verizon Wireless as of the date hereof to an existing Obligor under which such Obligor can upgrade certain specified Devices that are the subject of a device payment plan agreement if the following terms and conditions specified in such offer are satisfied: + +• The customer may be able to upgrade an eligible device for a new qualifying device after thirty (30) days provided that such customer has paid at least 50% of the retail price of the eligible device under the related device payment plan agreement and returns such eligible device to Verizon Wireless in good working condition with no significant damage as determined by Verizon Wireless; + +• The customer is required to purchase a new qualifying device under a new device payment plan agreement. New device purchases are subject to then-available offers and any associated wireless service requirements; + +• A customer's account must be in good standing and such customer must satisfy Verizon Wireless' eligibility requirements for a new device payment plan agreement; + +• Upon entering into a device payment plan agreement for a new qualifying device, and after returning the eligible device to Verizon Wireless within fourteen (14) days, Verizon Wireless will agree, for the benefit of such customer and for the express benefit of any assignee of such customer's original device payment plan agreement, to acquire such customer's eligible device for the remaining balance of the related customer's original device payment plan agreement and pay off and settle that remaining balance. After Verizon Wireless does that, such customer's only remaining obligations will be under the new device payment plan agreement and for associated wireless service; + +• If a customer does not return an eligible device when upgrading, or if it is not returned to Verizon Wireless in good working condition, in each case the remaining balance under such customer's original device payment plan agreement will be due on such customer's next bill. Good working condition requires, among other things, that the customer's returned device powers on and off, does not have a cracked screen, has no significant damage as determined by Verizon Wireless, and has all password-protected security features (e.g., Find My iPhone) turned off; + +• The Annual Upgrade Offer and the related terms and conditions may be modified or terminated by Verizon Wireless at any time. A customer's upgrade eligibility will be determined in the sole discretion of Verizon Wireless. If the Annual Upgrade Offer is terminated or the related terms and conditions are not satisfied, a customer will remain responsible for the remaining balance due under the original device payment plan agreement. + +A-6 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +"Applicable Anti-Money Laundering Law" has the meaning stated in Section 6.8 of the Trust Agreement. + +"Arbitration Rules" means the AAA's Commercial Arbitration Rules and Mediation Procedures. + +"Asset Representations Review" means, following the occurrence of a Delinquency Trigger, the review of 60-Day Delinquent Receivables to be undertaken by the Asset Representations Reviewer pursuant to the terms of the Asset Representations Review Agreement. + +"Asset Representations Review Agreement" means the Asset Representations Review Agreement, dated as of the Closing Date, among the Asset Representations Reviewer, the Issuer, the Servicer and the Administrator. + +"Asset Representations Reviewer" means Pentalpha Surveillance LLC, or any successor Asset Representations Reviewer under the Asset Representations Review Agreement. + +"Asset Representations Reviewer Fee" means (i) a monthly fee equal to $416.67 per month, payable on each Payment Date, and (ii) the amount of any fee payable to the Asset Representations Reviewer in connection with its review of 60-Day Delinquent Receivables in accordance with the terms of the Asset Representations Review Agreement. + +"Assumed Amortization Schedule" means, for each class of Notes, an amortization that results in the Note Balance for such class on any future Payment Date being equal to the percentage of the initial Note Balance of such class shown in the decrement table for such class set forth under "Maturity and Prepayment Considerations-Weighted Average Life" in the Prospectus, using a prepayment assumption percentage of 100% and assuming exercise of the Optional Acquisition on the earliest applicable Payment Date. + +"Authenticating Agent" has the meaning stated in Section 2.14(a) of the Indenture. + +"Available Funds" means, for a Payment Date, the sum of the following amounts for the Payment Date (without duplication): + +(a) Collections on the Receivables (other than Temporarily Excluded Receivables) for the related Collection Period in the Collection Account; plus + +(b) Acquisition Amounts received on Receivables that became Acquired Receivables during the related Collection Period and any amounts in respect of Acquisition Amounts paid by the Parent Support Provider; plus + +(c) Credit Payments received on Receivables from the Marketing Agent or the related Originators during the related Collection Period and any amounts in respect of Credit Payments paid by the Parent Support Provider; plus + +A-7 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +(d) Upgrade Payments received from the Marketing Agent or the related Originators on Receivables subject to an Upgrade Offer during the related Collection Period and any amounts in respect of Upgrade Payments paid by the Parent Support Provider; plus + +(e) any amounts deposited by the Class A Certificateholder to acquire the Receivables on the Payment Date under Section 8.1 of the Transfer and Servicing Agreement or any amounts received by the Issuer from a transferee of the Receivables under Section 8.2 of the Transfer and Servicing Agreement; plus + +(f) the Negative Carry Account Draw Amount, if any; plus + +(g) the Reserve Account Draw Amount, if any, and, after withdrawing the Reserve Account Draw Amount from the Reserve Account, any amount in excess of the Required Reserve Amount remaining on deposit in the Reserve Account; plus + +(h) the amount, if any, deposited into the Collection Account from the Negative Carry Account and, on the first Payment Date during the Amortization Period, the entire amount on deposit in the Negative Carry Account and the Acquisition Account; plus + +(i) any Cap Payment paid by the Cap Counterparty to the Issuer under the Cap Agreement and deposited into the Collection Account. + +"Bank Accounts" means the Collection Account, the Reserve Account, the Acquisition Account and the Negative Carry Account. + +"Bankruptcy Action" has the meaning stated in Section 5.5 of the Trust Agreement. + +"Bankruptcy Code" means the United States Bankruptcy Code, 11 U.S.C. 101 et seq. + +"Bankruptcy Surrendered Receivable" means any Receivable that is secured by the related Device and is not a Written-Off Receivable for which (i) the related Obligor has entered into a bankruptcy proceeding and (ii) the Servicer has accepted the surrender of the related Device in satisfaction of the Receivable. + +"Benchmark" means, initially, One-Month LIBOR; provided that if a Benchmark Transition Event and its related Benchmark Replacement Date have occurred with respect to One-Month LIBOR or the then-current Benchmark, then "Benchmark" means the applicable Benchmark Replacement. + +"Benchmark Administrator" means, (1) with respect to One-Month LIBOR, the ICE Benchmark Administration Limited, (2) with respect to SOFR, the Federal Reserve Bank of New York and (3) with respect to any other Benchmark, the entity responsible for administration of such Benchmark (or in each case, any successor administrator). + +A-8 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +"Benchmark Replacement" means the first alternative set forth in the order below that can be determined by the Administrator as of the Benchmark Replacement Date: + +(1) the sum of (a) Term SOFR and (b) the Benchmark Replacement Adjustment, provided that there has been no official public statement or publication of information by the Benchmark Administrator or the regulatory supervisor for the Benchmark Administrator announcing that Term SOFR is not yet representative that has not been either withdrawn or superseded by a similar official public statement or publication that Term SOFR has become representative, + +(2) the sum of (a) Compounded SOFR and (b) the Benchmark Replacement Adjustment, + +(3) the sum of (a) the ISDA Fallback Rate and (b) the Benchmark Replacement Adjustment, + +(4) the sum of (a) the alternate rate of interest that has been selected or recommended by the Relevant Governmental Body as the replacement for the then-current Benchmark for the applicable Corresponding Tenor and (b) the Benchmark Replacement Adjustment, and + +(5) the sum of (a) the alternate rate of interest that has been selected by the Administrator in its reasonable discretion as the replacement for the then-current Benchmark for the applicable Corresponding Tenor and (b) the Benchmark Replacement Adjustment. + +"Benchmark Replacement Adjustment" means the first alternative set forth in the order below that can be determined by the Administrator as of the Benchmark Replacement Date: + +(1) the spread adjustment, or method for calculating or determining such spread adjustment (which may be a positive or negative value or zero), that has been selected or recommended by the Relevant Governmental Body for the applicable Unadjusted Benchmark Replacement, + +(2) if the applicable Unadjusted Benchmark Replacement is equivalent to the ISDA Fallback Rate, then the ISDA Fallback Adjustment, and + +(3) the spread adjustment (which may be a positive or negative value or zero) that has been selected by the Administrator in its reasonable discretion for the replacement of the then-current Benchmark with the applicable Unadjusted Benchmark Replacement. + +"Benchmark Replacement Conforming Changes" means, with respect to any Benchmark Replacement, any technical, administrative or operational changes (including changes to the timing and frequency of determining rates and making payments of interest, and other administrative matters) that the Administrator decides in its reasonable discretion may be appropriate to reflect the adoption of such Benchmark Replacement in a manner substantially consistent with market practice (or, if the Administrator decides that adoption of any portion of such market practice is not administratively feasible or if the Administrator determines that no + +A-9 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +market practice for use of the Benchmark Replacement exists, in such other manner as the Administrator determines in its reasonable discretion is reasonably necessary). + +"Benchmark Replacement Date" means: + +(1) in the case of clause (1) or (2) of the definition of "Benchmark Transition Event", the later of (a) the date of the related official public statement or publication of information referenced therein and (b) the date on which the applicable Benchmark Administrator permanently or indefinitely ceases to provide the Benchmark, or + +(2) in the case of clause (3) of the definition of "Benchmark Transition Event", the date of the official public statement or publication of information. + +For the avoidance of doubt, if the event giving rise to the Benchmark Replacement Date occurs on the same day as, but earlier than, the Reference Time in respect of any determination, the Benchmark Replacement Date shall be deemed to have occurred prior to the Reference Time for such determination. + +"Benchmark Transition Event" means the occurrence of one or more of the following events with respect to the then-current Benchmark: + +(1) an official public statement or publication of information by or on behalf of the Benchmark Administrator announcing that such Benchmark Administrator has ceased or will cease to provide the Benchmark, permanently or indefinitely; provided, that, at the time of such statement or publication, there is no successor Benchmark Administrator that will continue to provide the Benchmark, + +(2) an official public statement or publication of information by the regulatory supervisor for the Benchmark Administrator, the central bank for the currency of the Benchmark, an insolvency official with jurisdiction over the Benchmark Administrator, a resolution authority with jurisdiction over the Benchmark Administrator or a court or an entity with similar insolvency or resolution authority over the Benchmark Administrator, which states that the Benchmark Administrator has ceased or will cease to provide the Benchmark permanently or indefinitely; provided, that, at the time of such statement or publication, there is no successor Benchmark Administrator that will continue to provide the Benchmark, or + +(3) an official public statement or publication of information by the regulatory supervisor for the Benchmark Administrator announcing that the Benchmark is no longer representative. + +"Beneficiary" has the meaning stated in the Parent Support Agreement. + +"Benefit Plan" means an "employee benefit plan" as defined in Section 3(3) of ERISA, which is subject to the provisions of Title I of ERISA, a "plan" described in and subject to + +A-10 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +Section 4975 of the Code, an entity whose underlying assets include "plan assets" by reason of an employee benefit plan's or plan's investment in the entity or any other employee benefit plan that is subject to any Similar Law. + +"Book-Entry Note" means any of the Notes issued in book-entry form under Section 2.12 of the Indenture. + +"Business Day" means any day other than (a) a Saturday, Sunday or other day on which banks in New York, New York or any jurisdiction in which the Corporate Trust Office of the Indenture Trustee or the Owner Trustee is located are authorized or required to close or (b) a holiday on the Federal Reserve calendar. + +"Cap Agreement" means the interest rate cap agreement relating to the Class A-1b Notes consisting of the 2002 ISDA Master Agreement (Multicurrency Cross-Border), schedule and credit support annex, each dated as of January 24, 2020, and the confirmation, dated on or about January 23, 2020, in each case, between the Issuer and the Cap Counterparty, as such agreement may be amended and supplemented from time to time in accordance with its terms. + +"Cap Collateral Account" means the account or accounts, if any, established under Section 9.10 of the Transfer and Servicing Agreement as required by the terms of the Cap Agreement. + +"Cap Counterparty" means Bank of America, N.A., or any Eligible Replacement Cap Counterparty, to the extent such Eligible Replacement Cap Counterparty replaces the existing Cap Counterparty under the Cap Agreement or any replacement interest rate cap agreement. + +"Cap Custodian" has the meaning stated in Section 9.10 of the Transfer and Servicing Agreement. + +"Cap Payment" means, for any Interest Period in which One-Month LIBOR (calculated in accordance with the Cap Agreement) exceeds 3.00%, an amount equal to the product of (x) the excess, if any, of One-Month LIBOR (calculated in accordance with the Cap Agreement) for the related Payment Date over 3.00%, (y) the notional amount of the cap for such Payment Date, as set forth in the Cap Agreement, and (z) a fraction, the numerator of which is the actual number of days elapsed in such Interest Period and the denominator of which is 360, which payment shall be deposited into the Collection Account by the Cap Counterparty on or before the second Business Day preceding the related Payment Date. + +"Cellco" means Cellco Partnership d/b/a Verizon Wireless, a Delaware general partnership, doing business as Verizon Wireless. + +"Certificate" means either the Class A Certificate or the Class B Certificate, as the context requires. + +"Certificate Distribution Account" means the account established and maintained as such pursuant to Section 4.1 of the Trust Agreement. + +A-11 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +"Certificate of Trust" means the Certificate of Trust of Verizon Owner Trust 2020-A. + +"Certificate Paying Agent" means initially the Owner Trustee and any other Person appointed as Certificate Paying Agent under Section 3.11 of the Trust Agreement. + +"Certificateholder" means the registered holder of a Certificate. + +"Class" means the Class A-1a Notes, the Class A-1b Notes, the Class B Notes and the Class C Notes, as applicable. + +"Class A Certificate" means the Class A Certificate executed by the Issuer and authenticated by the Owner Trustee, evidencing a portion of the Equity Interest in the Issuer, substantially in the form attached as Exhibit B-1 to the Trust Agreement. + +"Class A Certificateholder" means collectively, the Originators or their designee. + +"Class A Notes" means, collectively, the Class A-1a Notes and the Class A-1b Notes. + +"Class A-1a Notes" means the $1,325,700,000 Class A-1a 1.85% Asset Backed Notes issued by the Issuer, substantially in the form of Exhibit A to the Indenture. + +"Class A-1b Notes" means the $100,000,000 Class A-1b One-Month LIBOR (or, upon the occurrence of a Benchmark Transition Event, the appropriate Benchmark Replacement) + 0.27% Asset Backed Notes issued by the Issuer, substantially in the form of Exhibit A to the Indenture. + +"Class B Certificate" means the variable funding certificate executed by the Issuer and authenticated by the Owner Trustee, substantially in the form attached as Exhibit B-2 to the Trust Agreement. + +"Class B Certificate Principal Balance" means (i) on the Closing Date, $0, (ii) on any Acquisition Date, an amount equal to the excess, if any, of the Additional Receivables Transfer Amount for the Additional Receivables to be acquired by the Issuer on such Acquisition Date over the Additional Receivables Cash Transfer Amount for such Additional Receivables, and (iii) during the Amortization Period, $0; provided, that, with respect to clause (ii), immediately following the acquisition by the Depositor of Additional Receivables from the Originators on any Acquisition Date, and upon distribution by the Depositor to the Originators of the amounts set forth in Section 2.2(b) of the Originator Receivables Transfer Agreement, the Class B Certificate Principal Balance will be decreased to zero for such date. + +"Class B Certificateholder" means the Depositor or its designee. + +"Class B Notes" means the $98,300,000 Class B 1.98% Asset Backed Notes issued by the Issuer, substantially in the form of Exhibit A to the Indenture. + +"Class C Notes" means the $76,000,000 Class C 2.06% Asset Backed Notes issued by the Issuer, substantially in the form of Exhibit A to the Indenture. + +A-12 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +"Clean-Up Redemption" has the meaning stated in Section 8.1(a) of the Transfer and Servicing Agreement. + +"Clearing Agency" means an organization registered as a "clearing agency" under Section 17A of the Exchange Act. + +"Closing Date" means January 29, 2020. + +"Code" means the Internal Revenue Code of 1986, as amended. + +"Collateral" means (a) the Trust Property, (b) all present and future claims, demands, causes of action and choses in action relating to the Trust Property and (c) all payments on or under and all proceeds of the Trust Property. + +"Collection Account" means the account or accounts established under Section 4.1(a) of the Transfer and Servicing Agreement. + +"Collection Period" means each calendar month. For a Payment Date, the related Collection Period means (i) for any Payment Date other than the initial Payment Date, the Collection Period immediately preceding the month in which the Payment Date occurs, or (ii) for the initial Payment Date, the period from the end of the calendar day on the Initial Cutoff Date and ending on and including the last day of the month immediately preceding the initial Payment Date. For purposes of determining the Principal Balance, Pool Balance or Note Pool Factor, the related Collection Period is the month in which the Principal Balance, Pool Balance or Note Pool Factor is determined. + +"Collections" means, for a Collection Period, all cash collections received from Obligors and any other cash proceeds (whether in the form of cash, wire transfer or check) in respect of the Receivables received and applied by the Servicer to the payment of the Receivables during that Collection Period, but excluding: + +(i) the Supplemental Servicing Fee; + +(ii) amounts on any Receivable for which the Acquisition Amount is included in the Available Funds for the related Payment Date; and + +(iii) any Recoveries or cash collections received with respect to Written-Off Receivables that were written-off before or during such Collection Period. + +"Commission" means the U.S. Securities and Exchange Commission, and any successor thereto. + +"Comparable Treasury Issue" means the United States Treasury security selected by the Independent Investment Banker as having a maturity comparable to the remaining term, referred to as the Remaining Life, of the Notes to be redeemed that would be utilized, at the time of + +A-13 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of the Notes. + +"Comparable Treasury Price" means (1) the average of three Reference Treasury Dealer Quotations for that date of redemption, or (2) if the Independent Investment Banker is unable to obtain three Reference Treasury Dealer Quotations, the average of all quotations obtained. + +"Compounded SOFR" means the compounded average of SOFRs for the applicable Corresponding Tenor, with the rate, or methodology of this rate, and conventions of this rate (which, for example, may be compounded in arrears with a lookback and/or suspension period as a mechanism to determine the interest amount payable prior to the end of each Collection Period or compounded in advance) being established by the Administrator in accordance with: + +(1) the rate, or methodology of this rate, and conventions of this rate selected or recommended by the Relevant Governmental Body for determining compounded SOFR; provided that + +(2) if, and to the extent that, the Administrator determines that Compounded SOFR cannot be determined in accordance with clause (1) above, then the rate, or methodology of this rate, and conventions of this rate that have been selected by the Administrator in its reasonable discretion. + +"Control Agreement" has the meaning stated in Section 9.10 of the Transfer and Servicing Agreement. + +"Controlling Class" means (a) the Outstanding Class A Notes, voting together as a single class, (b) if no Class A Notes are Outstanding, the Outstanding Class B Notes and (c) if no Class B Notes are Outstanding, the Outstanding Class C Notes. + +"Corporate Trust Office" means, + +(a) for the Owner Trustee: + +Rodney Square North, 1100 North Market Street Wilmington, Delaware 19890-1600 Attn: Corporate Trust Administration Telephone: 302-636-6704 Fax: 302-636-4141 + +or at another address in the State of Delaware as the Owner Trustee may notify the Indenture Trustee, the Administrator and the Depositor, + +(b) for the Indenture Trustee, the office of the Indenture Trustee at which at any particular time its corporate trust business shall be administered which office on the date of the execution of the Indenture is located at: + +A-14 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +(i) solely for the purposes of transfer, surrender, exchange or presentation for final payment: + +EP-MN-WS2N 111 Fillmore Avenue East St. Paul, MN 55107, Attn: Bondholder Services/VZOT 2020-A + +and (ii) for all other purposes: + +MK-IL-SL7C 190 South LaSalle Street Chicago, Illinois 60603 Attention: Global Structured Finance/VZOT 2020-A Fax: (312) 332-7992 + +or at such other address as the Indenture Trustee may designate from time to time by notice to the Noteholders, the Servicer, and the Owner Trustee, or the principal corporate trust office of any successor Indenture Trustee (the address of which the successor Indenture Trustee will notify the Noteholders, the Servicer and the Owner Trustee), and + +(c) for the Master Trust Owner Trustee: + +Rodney Square North, 1100 North Market Street Wilmington, Delaware 19890-1600 Attn: Corporate Trust Administration Telephone: 302-636-6704 Fax: 302-636-4141 + +or at another address in the State of Delaware as the Master Trust Owner Trustee may notify the Indenture Trustee, the Administrator, the Owner Trustee and the Depositor. + +"Corresponding Tenor" means a tenor (including overnight) having approximately the same length (disregarding business day adjustment) as the applicable tenor for the then-current Benchmark. + +"Covered Entity" and "Covered Entities" have the meanings stated in Section 1(a) of the Parent Support Agreement. + +"Credit" means any payment credit (including one-time upfront credits and contingent, recurring credits), including the application of a returned security deposit, allocated to the account of an Obligor that is applied by the Servicer against amounts due on the Obligor's related invoice. + +"Credit Enhancement Test" means the test that will be satisfied on the Closing Date and on each Acquisition Date, after giving effect to all payments required to be made under Section 8.2(c) of the Indenture and the acquisition of Additional Receivables on the Acquisition Date, if + +A-15 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +(a) (i) the Adjusted Pool Balance as of the end of the Collection Period immediately preceding the Closing Date or such Acquisition Date, as applicable, plus (ii) any amounts on deposit in the Acquisition Account minus (iii) the Overcollateralization Target Amount, is equal to or greater than (b) the aggregate Note Balance on that date. + +"Credit Payment" means, with respect to any Collection Period, an amount equal to the reduction in the amount owed by an Obligor under a Receivable due to the application of any Credits to such Obligor's account that would have otherwise constituted Collections during such Collection Period. + +"Custodian" means Cellco, in its capacity as custodian of the Receivable Files. + +"Customer Tenure" means the number of months an Obligor has had a Verizon Wireless account based on the oldest active account establishment date for such Obligor, inclusive of any periods of up to fifty (50) days of disconnected service, up to ninety (90) days of suspended service or longer service suspensions in connection with the Servicemembers Civil Relief Act, as amended. + +"Cutoff Date" means (a) for the Initial Receivables, the Initial Cutoff Date and (b) for any Additional Receivables, the end of the calendar day on the last day of the month immediately preceding the month in which such Acquisition Date occurs. + +"Default" means any event that with notice or the passage of time or both would become an Event of Default. + +"Definitive Notes" has the meaning stated in Section 2.13 of the Indenture. + +"Delaware Statutory Trust Act" means Chapter 38 of Title 12 of the Delaware Code. + +"Delinquent" means an account on which an Obligor has unpaid charges remaining on the related account on the day immediately following the related date due as indicated on the Obligor's bill. + +"Delinquency Trigger" means, with respect to a Collection Period, the aggregate Principal Balance of 60-Day Delinquent Receivables as a percentage of the aggregate Principal Balance of Receivables as of the end of such Collection Period exceeds the Delinquency Trigger Percentage for such Collection Period. + +"Delinquency Trigger Percentage" equals (i) during the Revolving Period, 5.0% and (ii) during the Amortization Period, 5.5%. + +"Depositor" means Verizon ABS LLC, a Delaware limited liability company. + +"Depositor Transferred Property" means, for the Closing Date and any Acquisition Date, (a) the Originator Transferred Property, (b) the Master Trust Transferred Property, (c) the Depositor's rights under the Receivables Transfer Agreements, (d) all present and future claims, + +A-16 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +demands, causes of action and choses in action relating to any of the property described above and (e) all payments on or under and all proceeds of the property described above. + +"Depository Agreement" means the letter of representations for the Notes, dated January 29, 2020, by the Issuer in favor of The Depository Trust Company. + +"Device" means the wireless device that is the subject of a device payment plan agreement that is a Receivable. + +"Discount Rate" means, with respect to a Receivable, the greater of (i) the APR with respect to such Receivable, and (ii) 7.65%. + +"Eligibility Representation" has the meaning stated in Section 3.3 of the related Receivables Transfer Agreement. + +"Eligible Receivable" means a Receivable that satisfies the characteristics set forth in Section 3.3 of the related Receivables Transfer Agreement. + +"Eligible Replacement Cap Counterparty" means a counterparty that meets the eligibility requirements set forth in the Cap Agreement. + +"Equity Interest" means a beneficial ownership interest in the Issuer, as recorded on the Trust Register. + +"ERISA" means the Employee Retirement Income Security Act of 1974, as amended. + +"Event of Default" has the meaning stated in Section 5.1(a) of the Indenture. + +"Exchange Act" means the Securities Exchange Act of 1934, as amended. + +"FATCA Information" has the meaning stated in Section 3.3(e) of the Indenture. + +"FATCA Withholding Tax" has the meaning stated in Section 3.3(e) of the Indenture. + +"FICO® Score 8" means the FICO® Score 8 calculated on or about the date on which such Receivable was originated. + +"Final Maturity Date" means, for (i) the Class A-1a Notes, the Payment Date in July, 2024, (ii) the Class A-1b Notes, the Payment Date in July, 2024, (iii) the Class B Notes, the Payment Date in July, 2024, and (iv) the Class C Notes, the Payment Date in July, 2024. + +"First Priority Principal Payment" means, for a Payment Date, the greater of: + +(a) an amount (not less than zero) equal to the aggregate Note Balance of the Class A Notes as of the immediately preceding Payment Date (or, for the initial Payment Date, as of the Closing Date) minus the Adjusted Pool Balance; and + +A-17 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +(b) on and after the Final Maturity Date for the Class A Notes, the aggregate Note Balance of the Class A Notes until paid in full. + +"Floor Credit Enhancement Composition Tests" means, for any Payment Date and the pool of Receivables (excluding any Temporarily Excluded Receivables) held by the Issuer as of such date, each of the following tests calculated as of the end of the month preceding the month in which such date occurs: + +(a) the weighted average FICO® Score 8 of the Obligors with respect to the Receivables is at least 700 (excluding Receivables with Obligors for whom FICO® Score 8s are not available), + +(b) Receivables with Obligors for whom FICO® Score 8s are not available represent no more than 4.50% of the Pool Balance, + +(c) Receivables with Obligors that have less than 12 months of Customer Tenure with Verizon Wireless represent no more than 22.00% of the Pool Balance, + +(d) Receivables with Obligors that have 7 months or more, but less than 24 months of Customer Tenure with Verizon Wireless represent no more than 12.00% of the Pool Balance, + +(e) Receivables with Obligors that have 60 months or more of Customer Tenure with Verizon Wireless represent at least 55.00% of the Pool Balance, + +(f) Receivables with Obligors that have less than 12 months of Customer Tenure with Verizon Wireless and (i) for whom FICO® Score 8s are not available or (ii) that have FICO® Score 8s below 650, represent no more than 10.00% of the Pool Balance, + +(g) Receivables with Obligors that have 12 months or more, but less than 60 months of Customer Tenure with Verizon Wireless and (i) for whom FICO® Score 8s are not available or (ii) that have FICO® Score 8s below 650, represent no more than 50.00% of the aggregate Principal Balance of all Receivables with Obligors that have 12 months or more, but less than 60 months of Customer Tenure with Verizon Wireless, and + +(h) Receivables with Obligors that have 60 months or more of Customer Tenure with Verizon Wireless and (i) for whom FICO® Score 8s are not available or (ii) that have FICO® Score 8s below 650, represent no more than 27.50% of the aggregate Principal Balance of all Receivables with Obligors that have 60 months or more of Customer Tenure with Verizon Wireless. + +"Governmental Authority" means any government or political subdivision or any agency, authority, bureau, regulatory body, central bank, commission, department or instrumentality of any such government or political subdivision, or any other entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government or any + +A-18 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +court, tribunal, grand jury or arbitrator, or any accounting board or authority (whether or not part of a government) which is responsible for the establishment or interpretation of national or international accounting principles, in each case whether foreign or domestic. + +"Grant" means to mortgage, pledge, assign and to grant a lien on and a security interest in the relevant property. + +"Guaranteed Obligations" has the meaning stated in Section 1(a) of the Parent Support Agreement. + +"Hague Securities Convention" means The Convention on the Law Applicable to Certain Rights in Respect of Securities Held with an Intermediary (Concluded 5 July 2006), which became effective in the United States of America on April 1, 2017. + +"Indemnified Person" has the meaning stated in Section 6.7(b) of the Indenture, Section 6.3(a) of the Transfer and Servicing Agreement and Section 7.2(a) of the Trust Agreement, as applicable. + +"Indenture" means the Indenture, dated as of the Closing Date, between the Issuer and the Indenture Trustee. + +"Indenture Trustee" means U.S. Bank National Association, a national banking association, not in its individual capacity but solely as Indenture Trustee under the Indenture. + +"Indenture Trustee Fee" means a monthly fee equal to 1/12th of $12,000, payable on each Payment Date. + +"Independent" means that the relevant Person (a) is independent of the Issuer, the Depositor and their Affiliates, (b) does not have any direct financial interest or any material indirect financial interest in the Issuer, the Depositor or their Affiliates and (c) is not an officer, employee, underwriter, trustee, partner, director or person performing similar functions of or for the Issuer, the Depositor or their Affiliates. + +"Independent Certificate" means a certificate or opinion to be delivered to the Indenture Trustee under the circumstances described in Section 11.3 of the Indenture, made by an Independent appraiser, a firm of certified public accountants of national reputation or other expert appointed by an Issuer Order and approved by the Indenture Trustee in the exercise of reasonable care, and such opinion or certificate shall state that the signer has read the definition of "Independent" in this Indenture and that the signer is Independent within the meaning thereof. + +"Independent Investment Banker" means an independent investment banking or commercial banking institution of national standing appointed by Verizon. + +"Initial Cutoff Date" means the end of the calendar day on December 31, 2019. + +A-19 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +"Initial Pool Balance" means $1,917,450,478.10 which is the aggregate Principal Balance of the Initial Receivables as of the Initial Cutoff Date. + +"Initial Receivable" means any device payment plan agreement acquired by the Issuer on the Closing Date and listed on the Schedule of Receivables delivered on the Closing Date. + +"Initial Trust Property" means (a) the Depositor Transferred Property for the Closing Date, (b) the Issuer's rights under the Transfer and Servicing Agreement, (c) the Issuer's rights under the Cap Agreement, (d) all security entitlements relating to the Bank Accounts and the property deposited in or credited to any of the Bank Accounts, (e) all present and future claims, demands, causes of action and choses in action for any of the foregoing and (f) all payments on or under and all proceeds for any of the foregoing. + +"Insolvency Event" means, for a Person, that (1) (a) such Person admits in writing its inability to pay its debts generally as they become due, or makes a general assignment for the benefit of creditors, or (b) any proceeding is instituted by or against such Person seeking to adjudicate it bankrupt or insolvent, or seeking the liquidation, winding up, reorganization, arrangement, adjustment, protection, relief or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee or other similar official for it or any substantial part of its property, or (c) such Person generally does not pay its debts as such debts become due and, in the case of any proceeding instituted against such Person, such proceeding remains unstayed for more than sixty (60) days or an order or decree approving or ordering any of the foregoing shall be entered or (2) such person takes any corporate action to authorize any such action. + +"Interest Period" means for any Payment Date and (a) the Class A-1a Notes, Class B Notes and Class C Notes, the period from and including the 20th day of the calendar month immediately preceding the Payment Date to but excluding the 20th day of the month in which the Payment Date occurs (or from and including the Closing Date to but excluding March 20, 2020 for the first Payment Date) or (b) the Class A-1b Notes, the period from and including the Payment Date immediately preceding the current Payment Date to but excluding the current Payment Date (or from and including the Closing Date to but excluding March 20, 2020 for the first Payment Date). + +"Investment Company Act" means the Investment Company Act of 1940, as amended. + +"ISDA Definitions" means the 2006 ISDA Definitions published by the International Swaps and Derivatives Association, Inc. or any successor thereto, as amended or supplemented from time to time, or any successor definitional booklet for interest rate derivatives published from time to time. + +"ISDA Fallback Adjustment" means the spread adjustment (which may be a positive or negative value or zero) that would apply for derivatives transactions referencing the ISDA Definitions to be determined upon the occurrence of an index cessation event with respect to the Benchmark for the applicable tenor. + +A-20 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +"ISDA Fallback Rate" means the rate that would apply for derivatives transactions referencing the ISDA Definitions to be effective upon the occurrence of an index cessation date with respect to the Benchmark for the applicable tenor excluding the applicable ISDA Fallback Adjustment. + +"Issuer" means Verizon Owner Trust 2020-A, a Delaware statutory trust. + +"Issuer Order" and "Issuer Request" has the meaning stated in Section 11.3(a) of the Indenture. + +"Law" means any law (including common law), constitution, statute, treaty, regulation, rule, ordinance, executive order, order, court order, injunction, writ, decree, directive, judgment, injunction, award or similar item of or by a Governmental Authority or any interpretation, implementation or application thereof. + +"LIBOR Determination Date" means, (i) with respect to the first Payment Date, the second London Business Day prior to the Closing Date and (ii) with respect to each subsequent Payment Date, the second London Business Day prior to the immediately preceding Payment Date. + +"Lien" means a security interest, lien, charge, pledge or encumbrance. + +"London Business Day" means any day other than a Saturday, Sunday or day on which banking institutions in London, England are authorized or obligated by law or government decree to be closed. + +"Make-Whole Payment" means, for any payment of principal of the Notes on any Payment Date: + +(a) for any Make-Whole Payment due, other than with respect to an Optional Redemption, + +(i) for each Class of Notes other than the Class A-1b Notes, the excess of (a) the present value of (i) the amount of all future interest payments that would otherwise accrue on the principal payment until the Payment Date in February 2022 and (ii) the principal payment, each such payment discounted from the Payment Date in February 2022 to such Payment Date monthly on a 30/360 day basis at 0.15% plus the higher of (1) zero and (2) the then-current maturity matched Treasury Rate to such payment over (b) the principal payment; or + +(ii) for the Class A-1b Notes, the excess of (a) the present value of (i) the amount of all future interest payments that would otherwise accrue on the principal payment at an interest rate of One-Month LIBOR applicable to such Payment Date plus 0.27% until the Payment Date in February 2022 and (ii) the principal payment, each such payment discounted from the Payment Date in February 2022 to such Payment Date monthly on an actual/360 day basis at One- + +A-21 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +Month LIBOR applicable to such Payment Date over (b) the principal payment; and + +(b) for any Make-Whole Payment due with respect to an Optional Redemption, + +(i) for each Class of Notes other than the Class A-1b Notes, the excess of (a) the present value of (i) the amount of all future interest payments that would otherwise accrue on such Class of Notes assuming principal payments on such Class are made based on the Assumed Amortization Schedule for such Class and (ii) the amount of all future principal payments that would otherwise be paid on such Class of Notes assuming principal payments on such Class are paid based on the Assumed Amortization Schedule for such Class, each such amount discounted from the Payment Date on which such payment would be made in accordance with the Assumed Amortization Schedule to the Payment Date on which the Optional Redemption occurs, monthly on a 30/360 day basis at 0.15% plus the higher of (1) zero and (2) the then-current maturity matched Treasury Rate to such payment over (b) the Note Balance of such Class of Notes immediately prior to the Optional Redemption; or + +(ii) for the Class A-1b Notes, the excess of (a) the present value of (i) the amount of all future interest payments that would otherwise accrue on the Class A-1b Notes at an interest rate of One-Month LIBOR applicable to such Payment Date plus 0.27% assuming principal payments on the Class A-1b Notes are made based on the Assumed Amortization Schedule for the Class A-1b Notes and (ii) the amount of all future principal payments that would otherwise be paid on the Class A-1b Notes assuming principal payments on the Class A-1b Notes are paid based on the Assumed Amortization Schedule for the Class A-1b Notes, each such amount discounted from the Payment Date on which such payment would be made in accordance with the Assumed Amortization Schedule to the Payment Date on which the Optional Redemption occurs, monthly on an actual/360 day basis at One-Month LIBOR applicable to such Payment Date over (b) the Note Balance of the Class A-1b Notes immediately prior to the Optional Redemption; + +provided, that, upon the occurrence of a Benchmark Transition Event, One-Month LIBOR used in the calculation of Make-Whole Payments will be replaced by the appropriate Benchmark Replacement as set forth in Section 2.16 of the Indenture. + +"Marketing Agent" means Cellco. + +"Marketing Agent Agency Agreement" means the Amended and Restated Marketing Agent Agency Agreement, dated as of September 27, 2016, between the Marketing Agent and the Verizon Originators, as amended, restated, supplemented or modified from time to time. + +A-22 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +"Marketing Agent Remittance Obligation" has the meaning stated in the Parent Support Agreement. + +"Master Collateral Agency Agreement" means the Amended and Restated Master Collateral Agency and Intercreditor Agreement, dated as of May 8, 2019, among the Master Trust, U.S. Bank National Association, as master collateral agent, Cellco, as servicer, and each creditor representative from time to time party thereto, as amended, restated, supplemented or modified from time to time. + +"Master Trust" means Verizon DPPA Master Trust, a Delaware statutory trust, created and existing pursuant to the Master Trust Agreement. + +"Master Trust Administrator" means Cellco. + +"Master Trust Agreement" means the Second Amended and Restated Trust Agreement, dated as of May 8, 2019, between Verizon ABS II LLC, as depositor, and the Master Trust Owner Trustee, as amended, restated, supplemented or modified from time to time. + +"Master Trust Owner Trustee" means Wilmington Trust, National Association, a national banking association, not in its individual capacity but solely as Master Trust Owner Trustee under the Master Trust Agreement. + +"Master Trust Receivables Transfer Agreement" means the Master Trust Receivables Transfer Agreement, dated as of the Closing Date, among the Master Trust, the Servicer and the Depositor, as amended, restated, supplemented or modified from time to time. + +"Master Trust Transferred Property" means, for the Closing Date and any Acquisition Date, (a) the Initial Receivables or the Additional Receivables, as applicable, transferred by the Master Trust, (b) all amounts received and applied on such Receivables after the end of the calendar day on the related Cutoff Date, (c) all present and future claims, demands, causes of action and choses in action relating to any of the property described above and (d) all payments on or under and all proceeds of the property described above. + +"Material Adverse Effect" means, with respect to any event or circumstance, a material adverse effect on the ability of the applicable Person to perform its obligations under any Transaction Document. + +"Monthly Deposit Required Ratings" has the meaning stated in Section 4.3(b)(i) of the Transfer and Servicing Agreement. + +"Monthly Investor Report" has the meaning stated in Section 3.5(a)(i) of the Transfer and Servicing Agreement. + +"Moody's" means Moody's Investors Service, Inc. + +"Negative Carry Account" means the account or accounts established under Section 4.1(a) of the Transfer and Servicing Agreement. + +A-23 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +"Negative Carry Deposit Amount" means, for a Payment Date during the Revolving Period on which amounts are in the Acquisition Account, an amount equal to (a) the Required Negative Carry Amount for that Payment Date minus (b) the amount in the Negative Carry Account on that Payment Date (before payments under Section 8.2(c) of the Indenture on that Payment Date). + +"Negative Carry Account Draw Amount" means, for a Payment Date during the Revolving Period: + +(a) if that Payment Date is not an Acquisition Date, the lesser of: + +(i) an amount (not less than zero) equal to the Total Required Payment, plus the Reserve Deposit Amount, plus the Acquisition Deposit Amount, minus the Available Funds determined without regard to the Negative Carry Account Draw Amount or the Reserve Account Draw Amount; and + +(ii) the amount in the Negative Carry Account; and + +(b) if the Payment Date is an Acquisition Date, the amount in the Negative Carry Account in excess of the Required Negative Carry Amount. + +"New Upgrade DPP" has the meaning stated in Section 4.3(g) of the Transfer and Servicing Agreement. + +"Note Balance" means, for a Note or Class, the initial aggregate principal balance of the Note or Class minus all amounts distributed on the Note or Class that is applied to principal. + +"Note Interest Rate" means a per annum rate equal to, for: (i) the Class A-1a Notes, 1.85% (computed on the basis of a 360 day year consisting of twelve 30 day months), (ii) the Class A-1b Notes, One-Month LIBOR (or, upon the occurrence of a Benchmark Transition Event, the appropriate Benchmark Replacement) + 0.27% (computed on the basis of the actual number of days elapsed during the relevant Interest Period and a 360 day year), (iii) the Class B Notes, 1.98% (computed on the basis of a 360 day year consisting of twelve 30 day months), and (iv) the Class C Notes, 2.06% (computed on the basis of a 360 day year consisting of twelve 30 day months). + +"Note Interest Shortfall" means, for a Class and a Payment Date, an amount equal to the excess, if any, of the Accrued Note Interest for the Payment Date immediately preceding such Payment Date for the Class over the amount of interest that was paid to the Noteholders of that Class on the Payment Date immediately preceding such Payment Date, together with interest on the excess amount, to the extent lawful, at the Note Interest Rate for the Class for that Interest Period. + +A-24 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +"Note Monthly Interest" means, for a Class and a Payment Date, the aggregate amount of interest accrued on the Note Balance of the Class at the Note Interest Rate for the Class for the related Interest Period. + +"Note Owner" means, for a Book-Entry Note, the Person who is the beneficial owner of a Book-Entry Note as reflected on the books of the Clearing Agency or on the books of a Person maintaining an account with the Clearing Agency (as a direct participant or as an indirect participant, in each case according to the rules of the Clearing Agency). + +"Note Paying Agent" means initially the Indenture Trustee and any other Person appointed as Note Paying Agent under Section 2.15 of the Indenture. + +"Note Pool Factor" means, for a Class and a Payment Date, a seven-digit decimal figure equal to the Note Balance of the Class after giving effect to any payments of principal of the Class on that Payment Date divided by the initial Note Balance of the Class. + +"Note Register" and "Note Registrar" have the meanings stated in Section 2.4 of the Indenture. + +"Noteholder" means the Person in whose name a Note is registered on the Note Register. + +"Noteholder Tax Identification Information" means properly completed and signed tax certifications (generally with respect to U.S. Federal Income Tax, IRS Form W-9 (or applicable successor form) in the case of a person that is a "United States Person" within the meaning of Section 7701(a)(30) of the Code or the appropriate IRS Form W-8 (or applicable successor form) in the case of a person that is not a "United States Person" within the meaning of Section 7701(a)(30) of the Code). + +"Notes" or "Note" means, collectively or individually, as the context may require, the Class A-1a Notes, the Class A-1b Notes, the Class B Notes and the Class C Notes. + +"Obligor" means the Person that has signed the account agreement of which the device payment plan agreement that constitutes the Receivable is a part and who owes payments under the Receivable. + +"Officer's Certificate" means (a) for the Issuer, a certificate signed by a Responsible Person of the Issuer, (b) for the Depositor, the Administrator, the Marketing Agent, the Parent Support Provider, any Originator or the Servicer, a certificate signed by any officer of such entity, as applicable, (c) for the Master Trust, a certificate signed by a Responsible Person of the Master Trust and (d) for the Indenture Trustee, a certificate signed by a Responsible Person of the Indenture Trustee. + +"One-Month LIBOR" means, with respect to any Interest Period for which One-Month LIBOR is the Benchmark, the London interbank offered rate for deposits in U.S. Dollars having a maturity of one month commencing on the related LIBOR Determination Date which appears on the Reuters Screen LIBOR01 Page as of 11:00 a.m., London time, on such LIBOR + +A-25 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +Determination Date; provided, however, that for the first Interest Period, One-Month LIBOR shall mean an interpolated rate for deposits based on London interbank offered rates for deposits in U.S. Dollars for a period that corresponds to the actual number of days in the first Interest Period. If the rates used to determine One-Month LIBOR do not appear on the Reuters Screen LIBOR01 Page, the rates for that day will be determined on the basis of the rates at which deposits in U.S. Dollars, having a maturity of one month and in a principal balance of not less than U.S. $1,000,000 are offered at approximately 11:00 a.m., London time, on such LIBOR Determination Date to prime banks in the London interbank market by the Reference Banks. The Administrator will request the principal London office of each Reference Bank to provide a quotation of its rate to the Administrator and the Indenture Trustee. If at least two such quotations are provided, the Indenture Trustee will calculate the rate for that day as the arithmetic mean of such quoted rates to the nearest 1/100,000 of 1.00% (0.0000001), with five one-millionths of a percentage point rounded upward, of all such quotations. If fewer than two such quotations are provided, the Indenture Trustee will calculate the rate for that day as the arithmetic mean to the nearest 1/100,000 of 1.00% (0.0000001), with five one-millionths of a percentage point rounded upward, of the offered per annum rates that one or more major banks in New York City, selected by the Administrator, are quoting as of approximately 11:00 a.m., New York City time, on such LIBOR Determination Date to leading European banks for United States Dollar deposits for that maturity; provided that if the Administrator is not able to identify any major banks in New York City that are quoting as described in this sentence and for the avoidance of doubt, regardless of whether others in similar transactions are using a different index, it shall direct the Indenture Trustee to use One-Month LIBOR in effect for the applicable Interest Period which will be One-Month LIBOR in effect for the previous Interest Period, and any such direction will be deemed to apply to all subsequent LIBOR Determination Dates unless otherwise directed by the Administrator. In no event shall the Indenture Trustee be responsible for determining One-Month LIBOR or any substitute for One-Month LIBOR if such rate does not appear on Reuters Screen LIBOR01 Page. + +"Opinion of Counsel" means a written opinion of counsel (which may be internal counsel) which counsel is reasonably acceptable to the Indenture Trustee, the Owner Trustee and the Rating Agencies, as applicable. + +"Optional Acquisition" has the meaning stated in Section 8.1(a) of the Transfer and Servicing Agreement. + +"Optional Acquisition Amount" has the meaning stated in Section 8.1(b) of the Transfer and Servicing Agreement. + +"Optional Redemption" has the meaning stated in Section 8.2(a) of the Transfer and Servicing Agreement. + +"Originator" means (i) with respect to the Initial Receivables or the Additional Receivables, any of Cellco or certain Affiliates of Verizon listed on Schedule B to the Originator Receivables Transfer Agreement and (ii) with respect to the Additional Receivables transferred to the Depositor pursuant to the Originator Receivables Transfer Agreement, any additional Affiliate of Verizon not listed on Schedule B to the Originator Receivables Transfer Agreement + +A-26 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +that executes an Additional Originator Joinder Agreement substantially in the form of Exhibit B to the Originator Receivables Transfer Agreement; provided, that with respect to any amounts remitted by, or caused to be remitted by, the Marketing Agent pursuant to Sections 4.3(g), (h) and (i) of the Transfer and Servicing Agreement, the term "Originator" shall also mean, with respect to the Additional Receivables transferred to the Depositor pursuant to the Master Trust Receivables Transfer Agreement, any additional Affiliate of Verizon not listed on Schedule B to the Originator Receivables Transfer Agreement that originated any such Receivables. + +"Originator Reacquisition Obligation" has the meaning stated in the Parent Support Agreement. + +"Originator Receivables Transfer Agreement" means the Originator Receivables Transfer Agreement, dated as of the Closing Date, between the Originators party thereto and the Depositor, as amended, restated, supplemented or modified from time to time. + +"Originator Transferred Property" means, for the Closing Date and any Acquisition Date, (a) the Initial Receivables or the Additional Receivables, as applicable, transferred by the Originators, (b) all amounts received and applied on such Receivables after the end of the calendar day on the related Cutoff Date, (c) all present and future claims, demands, causes of action and choses in action relating to any of the property described above and (d) all payments on or under and all proceeds of the property described above. + +"Other Assets" means any assets (other than the Trust Property) sold, assigned or conveyed or intended to be sold, assigned or conveyed by the Depositor to any Person other than the Issuer, whether by way of a sale, capital contribution, pledge or otherwise. + +"Outstanding" means, as of a date, all Notes authenticated and delivered under the Indenture on or before that date except (a) Notes that have been cancelled by the Note Registrar or delivered to the Note Registrar for cancellation, (b) Notes to the extent the amount necessary to pay the Notes has been deposited with the Indenture Trustee or Note Paying Agent in trust for the Noteholders and, if those Notes are to be redeemed, notice of the redemption has been given under the Indenture, and (c) Notes in exchange for or in place of which other Notes have been authenticated and delivered under the Indenture unless proof satisfactory to the Indenture Trustee is presented that the Notes are held by a bona fide purchaser. In determining whether Noteholders of the required Note Balance have made or given a request, demand, authorization, direction, notice, consent or waiver under any Transaction Document, Notes owned by the Issuer, the Depositor, the Servicer or their Affiliates will not be considered to be Outstanding. However, Notes owned by the Issuer, the Depositor, the Servicer or their Affiliates will be considered to be Outstanding if (A) no other Notes remain Outstanding, or (B) the Notes have been pledged in good faith and the pledgee establishes to the reasonable satisfaction of the Indenture Trustee the pledgee's right to act for the Notes and that the pledgee is not the Issuer, the Depositor, the Servicer or their Affiliates. + +"Overcollateralization" means, for any date of determination other than the Closing Date, the amount by which (x) the sum of (i) the Adjusted Pool Balance as of the last day of the related + +A-27 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +Collection Period, and (ii) the amount on deposit in the Acquisition Account after giving effect to the acquisition of Receivables on that date exceeds (y) the aggregate Note Balance. + +"Overcollateralization Target Amount" means an amount equal to: + +(i) on the Closing Date, 10.50% of the Adjusted Pool Balance as of the Initial Cutoff Date; + +(ii) for any date of determination (other than the Closing Date), prior to the Amortization Period, on which the pool of Receivables meets all of the Floor Credit Enhancement Composition Tests, the greater of (x) the result of (a)(i) the aggregate Note Balance, divided by (ii) 1 minus 0.1050, minus (b) the aggregate Note Balance, and (y) 1.00% of the Adjusted Pool Balance as of the Closing Date; + +(iii) for any date of determination (other than the Closing Date), prior to the Amortization Period, on which the pool of Receivables does not meet all of the Floor Credit Enhancement Composition Tests, the greater of (x) the result of (a)(i) the aggregate Note Balance, divided by (ii) 1 minus 0.1350, minus (b) the aggregate Note Balance, and (y) 1.00% of the Adjusted Pool Balance as of the Closing Date; + +(iv) for any date of determination, during the Amortization Period, on which the pool of Receivables meets all of the Floor Credit Enhancement Composition Tests, the greater of (x) 14.50% of the Adjusted Pool Balance as of the end of the calendar month immediately preceding such date of determination, and (y) 1.00% of the Adjusted Pool Balance as of the Closing Date; or + +(v) for any date of determination, during the Amortization Period, on which the pool of Receivables does not meet all of the Floor Credit Enhancement Composition Tests, the greater of (x) 17.50% of the Adjusted Pool Balance as of the end of the calendar month immediately preceding such date of determination, and (y) 1.00% of the Adjusted Pool Balance as of the Closing Date. + +"Owner Trustee" means Wilmington Trust, National Association, a national banking association, not in its individual capacity but solely as Owner Trustee under the Trust Agreement. + +"Owner Trustee Fee" means a monthly fee equal to 1/12th of $15,000, payable on each Payment Date. + +"Parent Support Agreement" means the guaranty, dated as of the Closing Date, among the Parent Support Provider, the Depositor, the Issuer and the Indenture Trustee, as amended, restated, supplemented or modified from time to time. + +"Parent Support Provider" means Verizon. + +A-28 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +"Payment Date" means the 20th day of each month or, if not a Business Day, the next Business Day, starting in March 2020. For a Collection Period, the related Payment Date means the Payment Date following the end of the Collection Period. + +"Percentage Interest" shall mean, with respect to each Certificate, the percentage interest in the Issuer represented by such Certificate. + +"Permitted Activities" has the meaning stated in Section 2.3(a) of the Trust Agreement. + +"Permitted Investments" means book-entry securities, negotiable instruments or securities represented by instruments in bearer or registered form that evidence: + +(a) (x) direct or fully guaranteed United States treasury obligations, (y) U.S. Department of Housing and Urban Development public agency bonds, Federal Housing Administration debentures, Government National Mortgage Association guaranteed mortgage-backed securities or participation certificates, RefCorp debt obligations, SBA-guaranteed participation certificates and guaranteed pool certificates or (z) Farm Credit System consolidated systemwide bonds and notes, Federal Home Loan Banks' consolidated debt obligations, Federal Home Loan Mortgage Corp. debt obligations and Federal National Mortgage Association debt obligations, if, with respect to the investments listed in clause (z), they meet the criteria of S&P for collateral for securities having ratings equivalent to the respective ratings of the Notes in effect at the Closing Date; + +(b) demand deposits, time deposits, certificates of deposit or bankers' acceptances of any depository institution or trust company (i) incorporated under the laws of the United States or any State or any United States branch or agency of a foreign bank, (ii) subject to supervision and examination by federal or State banking or depository institution authorities and (iii) where the commercial paper or other short-term unsecured debt obligations (other than obligations with a rating based on the credit of a Person other than the depository institution or trust company) of such depository institution or trust company have the Required Rating; + +(c) commercial paper, including asset-backed commercial paper, having the Required Rating; + +(d) investments in money market funds having a rating in the highest investment grade category from each of S&P and Moody's (including funds for which the Indenture Trustee or the Owner Trustee or any of their Affiliates is investment manager or advisor); and + +(e) any other investment that is acceptable to each Rating Agency. + +"Permitted Lien" means a Lien that attaches by operation of law, or any security interest of the Depositor in the Originator Transferred Property and the Master Trust Transferred Property under the related Receivables Transfer Agreement, the Issuer in the Depositor + +A-29 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +Transferred Property under the Transfer and Servicing Agreement or the Indenture Trustee in the Collateral under the Indenture. + +"Person" means a legal person, including a corporation, natural person, joint venture, limited liability company, partnership, trust, business trust, association, government, a department or agency of a government or any other entity. + +"Personally Identifiable Information" has the meaning stated in the Asset Representations Review Agreement. + +"Pool Balance" means, for any Collection Period, an amount equal to (i) the aggregate Principal Balance of the Receivables on the last day of the Collection Period immediately preceding such Collection Period (excluding Acquired Receivables), plus the aggregate Principal Balance on the related Cutoff Date of any Additional Receivables transferred during the Collection Period less (ii) the aggregate Principal Balance of any Temporarily Excluded Receivables as of the last day of the Collection Period immediately preceding such Collection Period. + +"Pool Composition Tests" means, for the Closing Date, each Payment Date and any Acquisition Date and with respect to the pool of Receivables held by the Issuer as of the related Cutoff Date, including any Additional Receivables acquired by the Issuer on an Acquisition Date, each of the following tests calculated as of the end of the month preceding the month in which such date occurs: + +(a) the weighted average FICO® Score 8 of the Obligors with respect to the Receivables is at least 685 (excluding Receivables with Obligors for whom FICO® Score 8s are not available), + +(b) Receivables with Obligors for whom FICO® Score 8s are not available represent no more than 5.00% of the Pool Balance, + +(c) Receivables with Obligors that have less than 12 months of Customer Tenure with Verizon Wireless represent no more than 28.00% of the Pool Balance, + +(d) Receivables with Obligors that have 7 months or more, but less than 24 months of Customer Tenure with Verizon Wireless represent no more than 15.00% of the Pool Balance, + +(e) Receivables with Obligors that have 60 months or more of Customer Tenure with Verizon Wireless represent at least 50.00% of the Pool Balance, + +(f) Receivables with Obligors that have less than 12 months of Customer Tenure with Verizon Wireless and (i) for whom FICO® Score 8s are not available or (ii) that have FICO® Score 8s below 650, represent no more than 10.00% of the Pool Balance, + +A-30 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +(g) Receivables with Obligors that have 12 months or more, but less than 60 months of Customer Tenure with Verizon Wireless and (i) for whom FICO® Score 8s are not available or (ii) that have FICO® Score 8s below 650, represent no more than 55.00% of the aggregate Principal Balance of all Receivables with Obligors that have 12 months or more, but less than 60 months of Customer Tenure with Verizon Wireless, and + +(h) Receivables with Obligors that have 60 months or more of Customer Tenure with Verizon Wireless and (i) for whom FICO® Score 8s are not available or (ii) that have FICO® Score 8s below 650, represent no more than 30.00% of the aggregate Principal Balance of all Receivables with Obligors that have 60 months or more of Customer Tenure with Verizon Wireless. + +"Principal Balance" means, for a Receivable as of the last day of a month, an amount (not less than zero) equal to, without duplication: + +(a) the Amount Financed; minus + +(b) the portion of the amounts paid by the related Obligor applied on or before that date allocable to principal; minus + +(c) any Credits allocated to such Receivable; + +provided that, the Principal Balance for any Written-Off Receivable will be deemed to be zero. + +"Proceeding" means a suit in equity, action at law or other judicial or administrative proceeding, or governmental investigation. + +"Prospectus" means the prospectus dated as of January 21, 2020, relating to the offering of the Notes. + +"Qualified Institution" means U.S. Bank National Association, Wilmington Trust, National Association, or a trust company or a bank or depository institution organized under the laws of the United States or any State or any United States branch or agency of a foreign bank or depository institution that (i) is subject to supervision and examination by federal or State banking authorities, (ii) has a short-term deposit rating of "P-1" from Moody's, if rated by Moody's, and "A-1+" from S&P, if rated by S&P, (iii) if the institution holds any Bank Accounts, has a long-term unsecured debt rating or issuer rating of at least "Aa3" from Moody's, if rated by Moody's, and at least "A" from S&P, if rated by S&P and (iv) if the institution is organized under the laws of the United States, whose deposits are insured by the Federal Deposit Insurance Corporation. + +"Rating Agency" means each of Moody's and S&P. + +"Rating Agency Condition" means, for an action or request and with respect to a Rating Agency, that, according to the then-current policies of the relevant Rating Agency for that action + +A-31 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +or request, the Rating Agency has notified the Depositor, the Servicer, the Owner Trustee and the Indenture Trustee that the proposed action or request will not result in a downgrade or withdrawal of its then-current rating on any of the Notes. + +"Receivable" means, for a Collection Period, an Initial Receivable or an Additional Receivable, excluding any device payment plan agreement that became an Acquired Receivable during a prior Collection Period or was a Written-Off Receivable sold under Section 3.4 of the Transfer and Servicing Agreement during a prior Collection Period. + +"Receivable File" has the meaning stated in Section 3.10(b) of the Transfer and Servicing Agreement. + +"Receivables Transfer Agreements" or "Receivables Transfer Agreement" means, collectively or individually, the Originator Receivables Transfer Agreement and the Master Trust Receivables Transfer Agreement, as the context may require. + +"Record Date" means, for a Payment Date and a Book-Entry Note, the close of business on the day before the Payment Date and, for a Payment Date and a Definitive Note, the last day of the calendar month immediately preceding the month in which the Payment Date occurs and with respect to any notice, vote or consent, the most recently occurring Record Date for a Payment Date. + +"Recoveries" means, for any Written-Off Receivable and a Collection Period, an amount equal to: + +(a) all amounts received and applied by the Servicer during the Collection Period for the Receivable after the date on which it became a Written-Off Receivable, including any proceeds from the sale of a Device securing any Receivable; minus + +(b) any amounts paid by the Servicer for the account of the related Obligor, including collection expenses and other amounts paid to third parties, if any, in connection with collections on the Written-Off Receivable; minus + +(c) amounts, if any, required by Law or under the Servicing Procedures to be paid to the Obligor. + +"Redemption Date" has the meaning stated in Section 10.1 of the Indenture. + +"Reference Banks" means, for any LIBOR Determination Date, the four major banks in the London interbank market selected by the Administrator. + +"Reference Time" with respect to any determination of the Benchmark means (1) if the Benchmark is One-Month LIBOR, 11:00 a.m. (London time) on the day that is two (2) London banking days preceding the date of such determination, and (2) if the Benchmark is not One- Month LIBOR, the time determined by the Administrator in accordance with the Benchmark Replacement Conforming Changes. + +A-32 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +"Reference Treasury Dealer" means (1) any independent investment banking or commercial banking institution of national standing and any of its successors appointed by Verizon; provided, however, that if any of the foregoing shall cease to be a primary U.S. Government securities dealer in the United States, referred to as a "Primary Treasury Dealer," another Primary Treasury Dealer substituted therefor, and (2) any other Primary Treasury Dealer selected by an Independent Investment Banker and approved in writing by Verizon. + +"Reference Treasury Dealer Quotations" means, with respect to each Reference Treasury Dealer and any date of determination, the average, as determined by the Independent Investment Banker, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Independent Investment Banker at 3:30 p.m., New York City time, on the third Business Day preceding the date of determination. + +"Regular Priority Principal Payment" means, for a Payment Date, an amount equal to the greater of (A) an amount (not less than zero) equal to the excess, if any, of (a) the aggregate Note Balance of the Class A Notes, the Class B Notes and the Class C Notes as of the immediately preceding Payment Date (or, for the initial Payment Date, as of the Closing Date), minus the sum of the First Priority Principal Payment, the Second Priority Principal Payment and the Third Priority Principal Payment for the current Payment Date, over (b) the Adjusted Pool Balance as of the last day of the related Collection Period minus the Overcollateralization Target Amount, and (B) on and after the Final Maturity Date for any Class of Notes, the amount that is necessary to reduce the principal amount of each such Class, as applicable, to zero (after the application of any First Priority Principal Payment, Second Priority Principal Payment and Third Priority Principal Payment). + +"Regulation AB" means Subpart 229.1100 - Asset Backed Securities (Regulation AB), 17 C.F.R. §§229.1100-229.1125, as such may be amended from time to time, and subject to such clarification and interpretation as have been provided by the Commission in the adopting releases (Asset-Backed Securities, Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005) and Asset-Backed Securities Disclosure and Registration, Securities Act Release No. 33-9638, 79 Fed. Reg. 57,184 (Sept. 24, 2014)) or by the staff of the Commission, or as may be provided by the Commission or its staff from time to time. + +"Relevant Governmental Body" means the Federal Reserve Board and/or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Federal Reserve Board and/or the Federal Reserve Bank of New York, or any successor thereto. + +"Requesting Noteholders" has the meaning stated in Section 14.1 of the Indenture. + +"Requesting Party" has the meaning stated in Section 11.2 of the Transfer and Servicing Agreement. + +"Required Acquisition Deposit Amount" means, for any Payment Date during the Revolving Period, an amount equal to the excess, if any, of (x) the aggregate Note Balance of the Notes over (y) (i) the Adjusted Pool Balance as of the end of the related Collection Period minus + +A-33 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +(ii) the Overcollateralization Target Amount, after giving effect to any acquisition of Additional Receivables on such date. + +"Required Negative Carry Amount" means, for any Payment Date during the Revolving Period, an amount equal to the product of (i) the amount in the Acquisition Account on the Payment Date (after giving effect to all payments under Section 8.2(c) of the Indenture and the acquisition of Additional Receivables, if any, on the Payment Date), (ii) the weighted average Note Interest Rate and (iii) 1/12. + +"Required Rating" means, for short-term unsecured debt obligations, a rating of (a) "P-1" from Moody's and (b) "A-1+" from S&P. + +"Required Reserve Amount" means $17,877,097.97, or approximately 1% of the Adjusted Pool Balance as of the Initial Cutoff Date. + +"Reserve Account" means the account established under Section 4.1(a) of the Transfer and Servicing Agreement. + +"Reserve Account Draw Amount" means: + +(a) for each Payment Date before the Amortization Period, the lesser of: + +(i) an amount (not less than zero) equal to the Total Required Payment minus the Available Funds determined without regard to the Reserve Account Draw Amount; and + +(ii) the amount in the Reserve Account; and + +(b) for each Payment Date during the Amortization Period, an amount equal to the amount in the Reserve Account, if that amount together with Available Funds for that Payment Date is sufficient to pay the entire Note Balance of the Notes, all accrued and unpaid interest and any unpaid Make-Whole Payments and all other amounts to be distributed to the Secured Parties under the Indenture and the Transfer and Servicing Agreement in full. + +"Reserve Deposit Amount" means, for a Payment Date, an amount equal to (a) the Required Reserve Amount minus (b) the amount in the Reserve Account on the Payment Date (before payments under Section 8.2(c) of the Indenture on that Payment Date). + +"Residual Interest" means an "eligible horizontal residual interest" (as defined in the U.S. Credit Risk Retention Rules) equal to at least 5% of the fair value of all of the "ABS interests" (as defined in the U.S. Credit Risk Retention Rules) in the Issuer issued as part of the transactions contemplated by the Transaction Documents, determined as of the Closing Date using a fair value measurement framework under United States generally accepted accounting principles. + +A-34 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +"Responsible Person" means: + +(a) for the Administrator, the Depositor, the Sponsor, the Servicer, the Marketing Agent, the Parent Support Provider or any Originator, a Person designated in an Officer's Certificate of the Person or other notice signed by an officer of the Person authorized to act for the Person or any treasurer, assistant treasurer or corporate secretary of such Person that has responsibility for the matter; + +(b) for the Issuer, an officer in the Corporate Trust Office of the Owner Trustee, any officer of the Owner Trustee to whom any matter is referred because of the officer's knowledge of and familiarity with the matter, and a Responsible Person of the Administrator; + +(c) for the Master Trust, an officer in the Corporate Trust Office of the Master Trust Owner Trustee, any officer of the Master Trust Owner Trustee to whom any matter is referred because of the officer's knowledge of and familiarity with the matter, and a Responsible Person of the Master Trust Administrator; and + +(d) for the Indenture Trustee or the Owner Trustee, an officer in the Corporate Trust Office of the Indenture Trustee or the Owner Trustee, as applicable, including each vice president, assistant vice president, secretary, assistant secretary or other officer customarily performing functions similar to those performed by those officers listed above, and any officer of the Indenture Trustee or the Owner Trustee, as applicable, to whom any matter is referred because of the officer's knowledge of and familiarity with the matter, and in each case, having direct responsibility for the administration of the Transaction Documents. + +"Review" has the meaning stated in the Asset Representations Review Agreement. + +"Review Materials" has the meaning stated in the Asset Representations Review Agreement. + +"Review Notice" has the meaning stated in the Asset Representations Review Agreement. + +"Review Receivable" has the meaning stated in the Asset Representations Review Agreement. + +"Review Report" means, for an Asset Representations Review, the report of the Asset Representations Reviewer described in Section 3.5 of the Asset Representations Review Agreement. + +"Revolving Period" means the period from the Closing Date to the start of the Amortization Period. + +"S&P" means S&P Global Ratings. + +A-35 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +"Sarbanes Certification" has the meaning stated in Section 6.7(a)(iv) of the Transfer and Servicing Agreement. + +"Schedule of Receivables" means (a) the schedule identifying the Initial Receivables attached as Schedule A to each Receivables Transfer Agreement and Schedule A to each of the Transfer and Servicing Agreement and the Indenture or the electronic file with respect thereto delivered on the Closing Date, and (b) each schedule identifying any Additional Receivables attached as Schedule A to any Transfer Notice or the electronic file with respect thereto delivered by the Depositor, or the Administrator on its behalf, to the Issuer and the Indenture Trustee for an Acquisition Date. + +"Second Priority Principal Payment" means, for a Payment Date, the greater of: + +(a) an amount (not less than zero) equal to: + +(i) the aggregate Note Balances of the Class A Notes and the Class B Notes as of the immediately preceding Payment Date (or, for the initial Payment Date, as of the Closing Date); minus + +(ii) the Adjusted Pool Balance; minus + +(iii) the First Priority Principal Payment; and + +(b) on and after the Final Maturity Date for the Class B Notes, the Note Balance of the Class B Notes until paid in full. + +"Secured Parties" means the Indenture Trustee, for the benefit of the Noteholders. + +"Securities Account" means each Bank Account subject to the terms of the Account Control Agreement. + +"Securities Act" means the Securities Act of 1933, as amended. + +"Securities Intermediary" means U.S. Bank National Association. + +"Servicer" means Cellco or any Successor Servicer engaged under Section 7.4 of the Transfer and Servicing Agreement. + +"Servicer Acquisition Obligation" has the meaning stated in the Parent Support Agreement. + +"Servicer Deposit Obligation" has the meaning stated in the Parent Support Agreement. + +"Servicer Representation Obligation" has the meaning stated in the Parent Support Agreement. + +A-36 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +"Servicer Termination Event" has the meaning stated in Section 7.2 of the Transfer and Servicing Agreement. + +"Servicer's Certificate" means an Officer's Certificate of the Servicer delivered pursuant to Section 6.6 of the Transfer and Servicing Agreement. + +"Servicing Criteria" means the "servicing criteria" set forth in Item 1122(d) of Regulation AB, as such may be amended from time to time. + +"Servicing Fee" means, for a Collection Period, the fee payable to the Servicer in an amount equal to the product of: + +(a) one-twelfth of the Servicing Fee Rate; times + +(b) the Adjusted Pool Balance at the beginning of the full calendar month immediately preceding such Payment Date; + +provided, that the Servicing Fee for the initial Payment Date will equal the product of (i) a fraction, the numerator of which is the number of days from and including the Closing Date to and including the last day of the first Collection Period and the denominator of which is 360, and (ii) the Servicing Fee Rate times the Adjusted Pool Balance as of the Closing Date. + +"Servicing Fee Rate" means 0.75%. + +"Servicing Procedures" means the servicing procedures of Cellco relating to device payment plan agreements originated by the Originators, as amended or modified from time to time. + +"Similar Law" means any federal, State, local or non-U.S. law or regulation that is substantially similar to Title I of ERISA or Section 4975 of the Code. + +"SOFR" with respect to any day means the secured overnight financing rate published for such day by the Federal Reserve Bank of New York, as the Benchmark Administrator for SOFR (or a successor Benchmark Administrator). + +"Solvent" means, with respect to any Person and as of any particular date, that (i) the present fair market value (or present fair saleable value) of the assets of such Person is not less than the total amount required to pay the probable liabilities of such Person on its total existing debts and liabilities (including contingent liabilities) as they become absolute and matured, (ii) such Person is able to realize upon its assets and pay its debts and other liabilities, contingent obligations and commitments as they mature and become due in the normal course of business and (iii) such Person is not incurring debts or liabilities beyond its ability to pay such debts and liabilities as they mature. + +"Sponsor" means Cellco. + +A-37 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +"State" means a state or commonwealth of the United States of America, or the District of Columbia. + +"Subcontractor" means any vendor, subcontractor or other Person that is not responsible for the overall servicing (as "servicing" is commonly understood by participants in the asset-backed securities market) of the Receivables but performs one or more discrete functions identified in the Servicing Criteria with respect to the Receivables under the direction or authority of the Servicer or a Subservicer. + +"Subservicer" means any Person that services Receivables on behalf of the Servicer or any Subservicer and is responsible for the performance (whether directly or through Subservicers or Subcontractors) of a substantial portion of the material servicing functions required to be performed by the Servicer under this Agreement that are identified in the Servicing Criteria. + +"Successor Servicer" has the meaning stated in Section 7.4(a)(i) of the Transfer and Servicing Agreement. + +"Supplemental Servicing Fee" means, for a Collection Period, all net Recoveries, late fees, prepayment charges, extension fees and other administrative fees or similar charges on the Receivables. + +"Temporarily Excluded Receivables" means any Receivable deemed to be temporarily excluded by the Administrator from any calculation required to be made by the Administrator or the Servicer pursuant to and in accordance with the terms of the Transaction Documents. + +"Temporarily Excluded Receivables Servicing Fee" means, for a Collection Period, the fee payable to the Servicer in an amount equal to the product of: + +(a) one-twelfth of the Servicing Fee Rate; times + +(b) the aggregate Principal Balance of all Temporarily Excluded Receivables at the beginning of the calendar month immediately preceding such Collection Period. + +"Term SOFR" means the forward-looking term rate for the applicable Corresponding Tenor based on SOFR that has been selected or recommended by the Relevant Governmental Body. + +"Third Priority Principal Payment" means, for a Payment Date, the greater of: + +(a) an amount (not less than zero) equal to: + +(i) the aggregate Note Balances of the Class A Notes, the Class B Notes and the Class C Notes as of the immediately preceding Payment Date (or, for the initial Payment Date, as of the Closing Date); minus + +(ii) the Adjusted Pool Balance; minus + +A-38 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +(iii) the First Priority Principal Payment; minus + +(iv) the Second Priority Principal Payment; and + +(b) on and after the Final Maturity Date for the Class C Notes, the Note Balance of the Class C Notes until paid in full. + +"Total Required Payment" means, + +(a) for a Payment Date and the Reserve Account Draw Amount, the sum of the amounts set forth in Sections 8.2(c)(i) through (viii) of the Indenture; and + +(b) for a Payment Date and the Negative Carry Account Draw Amount, the sum of the amounts set forth in Sections 8.2(c)(i) through (xiii) of the Indenture. + +Following an Event of Default and an acceleration of the Notes or an Insolvency Event or dissolution of the Depositor, until the Note Balances of each Class of Notes have been paid in full, the Total Required Payment will also include the aggregate Note Balances of all Notes. + +"Transaction Documents" means the Certificate of Trust, the Trust Agreement, the Receivables Transfer Agreements, the Transfer and Servicing Agreement, the Indenture, the Administration Agreement, the Asset Representations Review Agreement, the Parent Support Agreement, the Underwriting Agreement, the Marketing Agent Agency Agreement, the Depository Agreement, the Cap Agreement and the Account Control Agreement. + +"Transfer and Servicing Agreement" means the Transfer and Servicing Agreement, dated as of the Closing Date, among the Issuer, the Depositor and Cellco as Servicer, Marketing Agent and Custodian, as amended, restated, supplemented or modified from time to time. + +"Transfer Notice" means the notice to the Issuer, the Depositor and the Indenture Trustee regarding the acquisition of Additional Receivables under Section 2.1(d) of each of the Receivables Transfer Agreements, substantially in the form of Exhibit A to each such Receivables Transfer Agreement. + +"Treasury Rate" means, for any Payment Date on which a Make-Whole Payment is to be made, the rate determined on the third Business Day preceding such Payment Date equal to: + +(i) the yield, under the heading which represents the average for the immediately preceding week, appearing in the most recently published statistical release published by the Board of Governors of the Federal Reserve System designated as "Statistical Release H. 15(519)" or any successor publication which is published weekly by the Board of Governors of the Federal Reserve System and which establishes yields on actively traded United States Treasury securities adjusted to constant maturity under the caption "Treasury Constant Maturities," for the maturity corresponding to the Comparable Treasury Issue (if no maturity is within three months before or after the Remaining Life (as defined in the definition of Comparable Treasury Issue), yields for the two published + +A-39 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +maturities most closely corresponding to the Comparable Treasury Issue will be determined and the Treasury Rate will be interpolated or extrapolated from those yields on a straightline basis, rounding to the nearest month), or + +(ii) if that release (or any successor release) is not published during the week preceding the calculation date or does not contain those yields, the rate per annum equal to the semiannual equivalent yield to maturity of the Comparable Treasury Issue, calculated using a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for the date of redemption. + +"Treasury Regulations" shall mean regulations, including proposed or temporary regulations, promulgated under the Code. References herein to specific provisions of proposed or temporary regulations shall include analogous provisions of final Treasury Regulations or other successor Treasury Regulations. + +"True Up Trust" means Verizon DPPA True Up Trust, a Delaware statutory trust, or its successors or assigns. + +"Trust Agreement" means the Amended and Restated Trust Agreement, dated as of the Closing Date, between the Depositor and the Owner Trustee, as amended, restated, supplemented or modified from time to time. + +"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939 as in force on the date hereof, unless otherwise specifically provided. + +"Trust Property" means the Initial Trust Property and any Additional Trust Property. + +"Trust Register" has the meaning stated in Section 3.3(a) of the Trust Agreement. + +"Trust Registrar" has the meaning stated in Section 3.3(a) of the Trust Agreement. + +"U.S. Credit Risk Retention Rules" means Regulation RR, 17 C.F.R. §246.1, et seq. + +"UCC" means the Uniform Commercial Code as in effect in any relevant jurisdiction. + +"Unadjusted Benchmark Replacement" means the Benchmark Replacement excluding the Benchmark Replacement Adjustment. + +"Underwriting Agreement" means the Underwriting Agreement, dated as of January 21, 2020, by and among the Depositor, Cellco and each of BofA Securities, Inc., Mizuho Securities USA LLC, MUFG Securities Americas Inc. and Wells Fargo Securities, LLC, each on its own behalf and as a representative of the several underwriters identified therein. + +"Underwriting Procedures" means the underwriting procedures of the Originators, as established by Cellco, relating to device payment plan agreements originated by the Originators, as such underwriting procedures may be amended or modified from time to time. + +A-40 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +"Upgrade Contract" has the meaning stated in the Glossary of the Marketing Agent Agency Agreement. + +"Upgrade Offer" means the Annual Upgrade Offer or any other upgrade offer extended by Verizon Wireless to an existing Obligor under which such Obligor can upgrade a Device that is the subject of a device payment plan agreement if the terms and conditions specified in such offer are satisfied. + +"Upgrade Payment" means a prepayment amount equal to the remaining unpaid Principal Balance of the related Receivable determined as of the date of the relevant upgrade, after giving effect to any prepayment made by the related Obligor in connection with the related Upgrade Offer. + +"Verified Note Owner" has the meaning stated in Section 14.1 of the Indenture. + +"Verizon" means Verizon Communications Inc., a Delaware corporation. + +"Verizon Originators" means the various subsidiaries and Affiliates of Cellco listed on Schedule I to the Marketing Agent Agency Agreement. + +"Verizon Wireless" means the wireless business of Verizon, operated by Cellco and various other subsidiaries of Verizon, including the Originators, under the Verizon Wireless brand. + +"Written-Off Receivable" means any Receivable that in accordance with the Servicing Procedures has been charged off or written off by the Servicer. + +"Yield Amount" means, for each Receivable on the Closing Date, on each Payment Date and on each Acquisition Date other than a Payment Date, the amount by which (x) the Principal Balance as of the last day of the related Collection Period or as of the applicable Cutoff Date, as applicable, for such Receivable exceeds (y) the present value of the future scheduled payments on the Receivable as of the last day of the related Collection Period (or as of the applicable Cutoff Date, for the first Payment Date for the Receivables) calculated using the Discount Rate. For purposes of this calculation, the future scheduled payments on each Receivable are the equal monthly payments that would reduce the Receivable's Principal Balance as of the related Cutoff Date to zero on the Receivable's final scheduled payment date, at an interest rate equal to the APR of the Receivable, which payments are received at the end of each month without any delays, defaults or prepayments. + +"Yield Supplement Overcollateralization Amount" means, for the Closing Date, for each Payment Date and for each Acquisition Date other than a Payment Date, an amount calculated as the sum of the Yield Amounts for all Receivables owned by the Issuer with an APR as stated in the related device payment plan agreement of less than 7.65%. + +A-41 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +Exhibit A + +Custodian's Security Requirements + +(See Attached) + +EA-1 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +Exhibit B + +FORM OF ANNUAL CERTIFICATION + +Re: The Transfer and Servicing Agreement, dated as of January 29, 2020 (the "Agreement"), among Verizon Owner Trust 2020-A (the "Issuer"), Verizon ABS LLC (the "Depositor"), and Cellco Partnership d/b/a Verizon Wireless ("Cellco"), as servicer (in such capacity, the "Servicer"), as marketing agent and as custodian. + +I, ________________________________, the _____________of __________ [NAME OF COMPANY] (the "Company"), certify to the Issuer, the Administrator and the Depositor, and their officers, with the knowledge and intent that they will rely upon this certification, that: + +(1) I have reviewed the servicer compliance statement of the Company provided in accordance with Item 1123 of Regulation AB (the "Compliance Statement"), the report on assessment of the Company's compliance with the servicing criteria set forth in Item 1122(d) of Regulation AB (the "Servicing Criteria"), provided in accordance with Rules 13a-18 and 15d-18 under Securities Exchange Act of 1934, as amended (the "Exchange Act") and Item 1122 of Regulation AB (the "Servicing Assessment"), the registered public accounting firm's attestation report provided in accordance with Rules 13a-18 and 15d-18 under the Exchange Act and Section 1122(b) of Regulation AB (the "Attestation Report"), and all servicing reports, officer's certificates and other information relating to the servicing of the Receivables by the Company during 20[__] that were delivered by the Company to the Issuer and the Depositor pursuant to the Agreement (collectively, the "Company Servicing Information"); + +(2) Based on my knowledge, the Company Servicing Information, taken as a whole, does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in the light of the circumstances under which such statements were made, not misleading with respect to the period of time covered by the Company Servicing Information; + +(3) Based on my knowledge, all of the Company Servicing Information required to be provided by the Company under the Agreement has been provided to the Issuer and the Depositor; + +(4) I am responsible for reviewing the activities performed by the Company as Servicer under the Agreement, and based on my knowledge and the compliance review conducted in preparing the Compliance Statement [and except as disclosed in the Compliance Statement, the Servicing Assessment or the Attestation Report,] the Company has fulfilled its obligations under the Agreement in all material respects; and + +(5) The Compliance Statement required to be delivered by the Company pursuant to the Agreement, and each Servicing Assessment and Attestation Report required to be provided by the Company and by any Subservicer or Subcontractor pursuant to the Agreement, have been provided to the Issuer, the Administrator, the Depositor, the Indenture Trustee and the Owner Trustee. Any material instances of + +EB-1 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 + + + + + +noncompliance with the Servicing Criteria have been disclosed in such reports and have been disclosed to the Issuer, the Administrator and the Depositor. + +Capitalized terms used herein and not otherwise defined have the meaning given to such terms in the Agreement. + +Date: _________________________ + +By: ___________________________ Name: Title: EB-2 + +Source: VERIZON ABS LLC, 8-K, 1/23/2020 \ No newline at end of file diff --git a/full_contract_txt/VertexEnergyInc_20200113_8-K_EX-10.1_11943624_EX-10.1_Marketing Agreement.txt b/full_contract_txt/VertexEnergyInc_20200113_8-K_EX-10.1_11943624_EX-10.1_Marketing Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..fe9e30674b83978e1cc2ce3f1cd9ee8d25018348 --- /dev/null +++ b/full_contract_txt/VertexEnergyInc_20200113_8-K_EX-10.1_11943624_EX-10.1_Marketing Agreement.txt @@ -0,0 +1,117 @@ +Vertex Energy, Inc. 8-K Exhibit 10.1 THE SYMBOL "[****]" DENOTES PLACES WHERE CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THE EXHIBIT BECAUSE IT IS BOTH (i) NOT MATERIAL, AND (ii) WOULD LIKELY CAUSE COMPETITIVE HARM TO THE COMPANY IF PUBLICLY DISCLOSED JOINT SUPPLY AND MARKETING AGREEMENT This Joint Supply and Marketing Agreement (hereinafter referred to as the "JSMA") shall be effective as of May 1, 2020 "the Commencement Date" and is made and entered into this 10t h day of January, 2020 between Bunker One (USA) Inc., with principal offices located at 107 St. Francis Street, Mobile, AL 36602 ("Bunker One"), and Vertex Energy Operating, LLC, with principal offices located at 1331 Gemini Suite 250, Houston, TX 77058 ("Vertex"). BUNKER ONE and VERTEX are hereinafter sometimes referred to as a Party or jointly as Parties. WHEREAS: A. Vertex currently owns a production facility in Marrero, LA which has the capacity to produce 100,000 bbls/mo. +/- 10 % of a feedstock/product (the "Output") that can be consumed as bunker suitable fuel for offshore use and use as a marine vessel's propulsion system. See Appendix A for qualities of the feedstock/product (the "Product"). B. Bunker One being a physical supplier of bunker fuel having blending expertise being able to utilize the Product together with associated physical assets for storage and transportation, leased and owned real property, tangible and intangible personal property, personnel, intellectual prop- erty and know-how (collectively the "Bunkering Business"). C. Pursuant to the terms of a Co-operation Agreement that went into effect on October 15, 2017 (the "Original COOA"), which addressed the sourcing, storing, transportation, marketing and selling of the Product in the states of Louisiana and Texas, Vertex agreed to sell, and Bunker One agreed to purchase, the Output (as defined in the above) each month. By virtue of entering into this JSMA the Parties intend to continue the activities previously conducted pursuant to the Original COOA and expand thereon as more particularly hereinbelow set forth. D. The overall objective of the Original COOA was to give the Parties the opportunity to further expand their business by co-operating in the sourcing, storing, transportation, marketing and selling of the Product in and around Louisiana and Texas, where (i) Vertex was primarily responsible for the sourcing and storing of the feedstock Product, (ii) Bunker One was primarily responsible for the transporting, blending, marketing, selling and delivering of the Product, (iii) Bunker One was responsible for the risk management/exposure (e.g. hedging) of the bunker fuels, and (iv) Bunker One was the exclusive seller of the Product to third parties. E. The Parties wish to amend and restate the Original COOA as a JSMA to extend the term, provide for the inclusion of new and existing businesses and territories not previously included in the Original COOA, and to address certain governance issues, all as more particularly hereinbelow provided. + +Source: VERTEX ENERGY INC., 8-K, 1/13/2020 + + + + + +THE PARTIES hereto hereby agree as follows: 1. Definitions. "Area" means Texas, Louisiana, Alabama and areas immediately adjacent thereto if mutually agreed. "Bunker Holding", a Danish holding company and sole shareholder of Bunker One (USA) Inc.. "Business Day" means any day except a Saturday, Sunday, or a Federal Reserve Bank holiday. A Business Day shall open at 8:00a.m. and close at 5:00p.m. Houston, Texas, time. "JSMA Output" has the meaning ascribed thereto in Section 2.1. "Effective Date" means the date as of which the last signature of a Party is affixed hereto. "Fiscal Year" shall mean the period beginning with May 1st in each calendar year and ending on the next succeeding April 30t h. "Hedge Position Value" means the then current settlement value of any and all open hedge transactions entered into by Bunker One as determined by Bunker One on a mark-to-market basis in a commercially reasonable manner. "Hedging Profit" means the greater of zero and the net gain on all hedging transactions closed and settled during the applicable Tracking Account reporting or settlement period, including any interest received by Bunker One with respect to any margin deposits made by Bunker One with any hedge transaction counterparties exclusive of any such amount in excess of that which would be taken into account by parties dealing at arm's length on a commercial basis. "Hedging Loss" means the lesser of zero and the net loss on all hedging transactions closed and settled during the applicable Tracking Account reporting or settlement period, including any in- terest received by Bunker One with respect to any margin deposits made by Bunker One with any hedge transaction counterparties exclusive of any such amount in excess of that which would be taken into account by parties dealing at arm's length on a commercial basis. "Interest Rate" means (a) with respect to a non-defaulting Party, a per annum rate of interest equal to USD 1M LIBOR as per the last fixing of the preceding month + 3.5 per cent pro anno (compounded monthly for each month or part thereof) and (b) with respect to a Defaulting Party, a per annum rate of interest equal to 5 % over the rate mentioned above in (a), provided, how- ever, that the rate set forth in (a) shall be adjusted by the Parties annually at the last meeting of the JDMB (as such term is defined in the Heads of Agreement entered into between the Parties as of January 10, 2020. "Inventory" shall mean the Product purchased by Bunker One pursuant to this Agreement. "Inventory Cost" shall mean the amount paid by Bunker One to Vertex for the Inventory. + +Source: VERTEX ENERGY INC., 8-K, 1/13/2020 + + + + + +"Inventory Market Value" shall mean the then current market value of Inventory as determined by Bunker One on a mark-to-market basis in a commercially reasonable manner. "Inventory Resale Transaction(s)" shall mean any sale by Bunker One to a third party of the Inventory whether or not the Inventory is sold in the original condition delivered to Bunker One or is blended by Bunker One into a different product. "Nomination" shall be as defined in Section 2.6. "Output" has the meaning ascribed thereto in the recitals. "Product" has the meaning ascribed thereto in the recitals. "Remaining Exposure" means Total Exposure plus payments received by Bunker One and Vertex pursuant to this Agreement during the applicable Tracking Account Statement reporting period less payments made by Bunker One and Vertex pursuant to this Agreement during the applicable Tracking Account Statement reporting period. "Term Sheet" means that certain summary of terms regarding the proposed purchase of Series B1 Preferred Shares of Vertex Energy, Inc. dated November 25, 2019. "Total Exposure" means the sum of (i) Unrealized Gain on Hedging, (ii) Unrealized Loss on Hedg- ing, (iii) Unrealized Gain on Inventory, (iv) Unrealized Loss on Inventory and (v) Total Realized P/L. "Total Realized P/L" means and shall be equal to the sum of each monthly calculation of below following IFRS principles: (a) the sum of: (i) gross revenue received by Bunker One from any third party for Inventory Resale Transactions (but excluding for any applicable Tracking Account reporting or settlement period any such gross revenue that was included in a prior reporting or settlement period as described in clause (ii) immediately below), (ii) gross revenue due, but not yet received by Bunker One from any third party for Inventory which has been sold at a fixed price, whether or not delivered, (iii) Hedging Profit; and (iv) proceeds of insurance maintained by Bunker One with respect to the Inventory that are received by Bunker One; less (b) the sum of: (i) the measured cost of the goods sold, (ii) all actual costs incurred by Bunker One (U.S.) hereunder including, but not limited to costs for tank storage, tank expenses, tank cleaning, freight (includes fleeting/heating/tanker man/sparging), cargo insurance, inspection, demurrage, broker commissions, blending costs (including blending inventories/products, additives and other direct costs incurred in blending the Product for resale), financial charges, interest, Transfer Taxes and miscellaneous items, + +Source: VERTEX ENERGY INC., 8-K, 1/13/2020 + + + + + +(iii) Hedging Loss, and (iv) SG&A costs allocated to the operation (to be agreed to in a budget and in writing ahead of time, provided, however, neither Party will include SG&A incurred by a parent entity absent mutual agreement otherwise). "Transfer Taxes" means all transfer, documentary, sales, use, stamp, registration, conveyance or similar taxes or charges ("Transfer Taxes") arising out of the transactions contemplated hereby and all charges for or in connection with the recording of any document or instrument contem- plated hereby. "Unrealized Gain on Hedging" means the greater of zero and the Hedge Position Value. "Unrealized Loss on Hedging" means the lesser of zero and the Hedge Position Value. "Unrealized Gain on Inventory" means the greater of zero and the net gain in Inventory Market Value as compared to the Inventory Cost. "Unrealized Loss on Inventory" means the lesser of zero and the net loss in Inventory Market Value as compared to the Inventory Cost. 2. Co-operation procedure. 2.1. Sourcing and Purchase. Vertex shall be responsible for the sourcing/producing of the Product and shall sell to Bunker One, and Bunker One shall purchase, the agreed Output of the Product in accordance to FOB (Marrero, LA, US (or per new/additional agreed Area)) the Incoterms® 2010 rules, at the following scheduled pricing: the arithmetic mean of Platts #2 USGC Pipe and Platt's ULSD USGC Waterborne on agreed pricing days less the agreed upon discount [****]. Pricing mechanism for the Product will be made in accordance to FOB (Marrero, LA, US) the Incoterms® 2010 rules (hereinafter, the "Product Cost"). The above pricing will be mutually negotiated and revised every third month. Unless the Parties otherwise agree in writing, 100% of the Output shall be allocated for use in the Area (the "COOA Output") . Vertex, on not less than 120 days prior written notice to Bunker One (the "Withdrawal Notice"), shall have the right to remove all or a portion of the Output from the coverage of the JSMA, provided, however, that, in such event, (a) Vertex shall supply a volume of alternative material equal to, or better than, in amount and quality (the "Alternative Supply") to the volume of material withdrawn, or (b) Vertex shall reimburse Bunker One for the net loss experienced by Bunker One by reason of the loss of the withdrawn material, determined on the basis of what Bunker One would have earned on a net basis under the terms of the JSMA had the Output not been withdrawn. + +Source: VERTEX ENERGY INC., 8-K, 1/13/2020 + + + + + +In addition, in calculating the net loss experienced by Bunker One in the event of withdrawal subject to compensation under (b) mentioned in the above, Vertex shall be credited with any additional income realized by Bunker One, determined on a cumulative basis from and after the date of this JSMA, for any Product provided by Vertex in excess of the Output as well as any cost savings realized by Bunker One with respect to the Alternative Supply. 2.2. Blending. The JSMA Output is meant for blending into other products by Bunker One for the pur- pose of being transformed into bunker suitable fuel for a marine vessel's propulsion system and/or marketable wholesale products in various other markets for sale by Bunker One to cus- tomers in the Area. Bunker One will be solely responsible for the blending, marketing, sale and delivery of the Product in the Area. The JSMA Output may also be sold as is without any blending. 2.3. Storage. The Parties will, with prior written agreement, coordinate efforts to secure storage ca- pacity for the accumulation and blending of Product to make up the cargo to be supplied pursuant to the JSMA. The Parties agree that tank/storage fees incurred for the sole (any other use will be upon mutual written agreement) purposes of the JSMA shall be for the account of the JSMA. At commencement of this Agreement the Parties have entered into the sublet agreement attached hereto as Appendix B. 2.4. Vessel Charter: Bunker One will coordinate, secure and charter suitable vessels needed for the shipment of the Product to various sale destinations. The Parties agree that fees incurred in con- nection with chartering vessels for the sole (any other use will be upon mutual written agreement) purposes of the JSMA shall be for the account of the JSMA. 2.5. Risk management: Bunker One shall be responsible for obtaining risk management related prod- ucts / hedging of the JSMA Output consistent with the decisions of the JDMB under the Heads of Agreement. All fees incurred, and profit/loss incurred in connection with hedging of the JSMA Output shall be for the account of the JSMA. All hedging is to be done on a physical, not specula- tive, basis. 2.6. Exclusive co-operation: It is agreed that only Bunker One will be marketing this JSMA and the JSMA Output towards various customers, but if a Party receives a Nomination (being a written or oral request by/from a customer to a Party stating delivery place, delivery date and window etc.) or any other communication from a customer regarding the supply of Product (either spot or whole cargo) in the Area, the Party is obliged to forward the Nomination to Bunker One and refer the customer to Bunker One. During the Term, neither Vertex nor any affiliate of Vertex may sell any Product to any customers for their use as bunker fuel other than pursuant to the terms of this JSMA. All sales towards customers for bunker fuel will be carried out exclusively by Bunker One in accordance to the terms set forth herein. As such all communication with customers shall go via Bunker One unless otherwise is specific written agreed in advance. 3. Mutual Cooperation. 3.1. The JSMA will generate either a profit or a loss which shall be distributed between the Parties as set out forth further below in this clause. VERTEX and Bunker One will act cooperatively in a commercially reasonable manner, to maximize profits and minimize losses and comply with all terms and conditions pursuant to the JSMA. The Parties have established a Joint Decision-Making Body that will: (a) establish a budget no later than March in each Fiscal Year for the immediately ensuing + +Source: VERTEX ENERGY INC., 8-K, 1/13/2020 + + + + + +Fiscal Year, to include forecasts of income and expense and planned capital expenditures (which capital expenditure budgets shall include a focus on items related to the supply and optimization of the marine fuels or components and items related to support the marketing of the Product and associated credit risks with respect to Bunker One, and with respect to Vertex, a focus on asset acquisition/leasing of improvements required in support of acquisition and production of the Product to the refining rack or other designated transfer point), (b) review the financial information provided by the respective Parties for the transactions occurring during the preceding month/quarter/year; (c) Strategize on the proposed blending plan, ensuing month for volume and margin per MT. plan for resupply of components and associated pricing targets, related expenses, timing and volumes; (d) discuss and approve any other business brought before the Committee for its review and approval. 3.2. Accounting Records; Reporting: Bunker One shall establish and maintain at its office in Mobile, Alabama a detailed ledger (the "detailed ledger") within their current reporting system with re- spect to this Agreement and all transactions hereunder sufficient to track and reconcile all such transactions and to calculate and track Hedge Position Value, Hedging Profit, Hedging Loss, Inventory Cost, Inventory Market Value, Remaining Exposure, Total Exposure, Total Realized P/L, Inter- est, Unrealized Gain on Hedging, Unrealized Loss on Hedging, Unrealized Gain on Inventory and Unrealized Loss on Inventory and any and all payments made by or to Bunker One or Vertex with respect to this Agreement. 3.3. Bunker One shall prepare and provide to Vertex, on a monthly and quarterly basis, a statement setting forth the status of the detailed ledger and each component thereof (the "detailed ledger Statement"). The detailed ledger Statement and all other reports and settlement statements provided for herein shall be in such format as may be agreed upon by the Parties from time to time and shall include such supporting documentation as is reasonably necessary or reasonably requested by Vertex to enable Vertex to verify the accuracy of such report or settlement statement. Bunker One shall prepare and maintain such other accounting and transaction records as may be necessary to provide a full accounting of all transactions and other activities under this Agree- ment. Vertex has the right, at its sole expense and during normal working hours, to have a third party accountant examine the records of Bunker One. If any such examination reveals any inaccuracy in any statement, the necessary adjustments in such statement and the payments thereof will be made promptly and shall bear interest calculated at the Interest Rate from the date the overpayment or underpayment was made until paid. 4. Settlement and Payment term. 4.1. Payment by Bunker One for the Product, as defined in clause 2.1, will be made by wire transfer within three (3) Business Days after the date Vertex invoices Bunker One, to an account desig- nated from time to time by Vertex. 4.2. On or before the seventh (7t h) Business Day after the end of each quarter during the Fiscal Year May 1- April 30) Bunker One shall prepare and send to Vertex the detailed ledger statement for the immediately preceding quarter. If any such quarterly detailed ledger statement, or the final detailed ledger statement issued by Bunker One, shows positive Remaining Exposure for the pe- riod covered by the statement, then Bunker One shall pay [****] percent ([****]%) of such amount to Vertex. If any such quarterly detailed ledger statement shows negative Remaining Exposure for the period covered by the statement, then Vertex shall pay [****] percent ([****]%) + +Source: VERTEX ENERGY INC., 8-K, 1/13/2020 + + + + + +of such amount to Bunker One. The first ledger statement for the first full fiscal quarter ending after the Effective Date shall include an adjustment taking into account the period beginning with the first day following the last day included in the last ledger statement provided under the terms of the Original COOA, and the first day of the period included in the first ledger statement provided in accordance with the provisions of this JSMA. For example, if the last ledger statement provided under the Original COOA includes the three-month period ending on September 30, 2019, and the first ledger statement provided under the terms of this JSMA includes the three- month period ending January 31, 2020, then such first ledger statement shall also include the month of October, 2019 in addition to the months of November, December and January. 4.3. In addition to the foregoing, on or before the fifteenth (15t h) Business Day after the end of each Fiscal Year Bunker One shall prepare and send to Vertex the detailed ledger statement for the immediately preceding Fiscal Year calculated on a cumulative basis showing payments made and received by the Parties in satisfaction of the percentage splits shown above, adjusted to include any period excluded by reason of the conversion from a calendar year to a fiscal year in the same manner in which quarterly calculations are adjusted in Section 4.2 (i.e. the months of January, February, March and April, 2019 would be excluded in the annual calculations for the Fiscal Year ending April 30, 2020, and these must be included for purposes of preparing the ledger statement for FYE 4/30/20). In the event a Party has received payments in excess of those to which such Party is entitled on a cumulative basis as reflected in the annual detailed ledger Statement, such Party shall remit such excess to the other Party promptly upon receipt of demand therefor, or if such Party has underfunded its obligation in these same regards, such Party shall promptly remit the amount underfunded to the other Party. Any amount to which a Party is entitled by virtue of any monthly or quarterly detailed ledger Statement in excess of that reflected in the annual de- tailed ledger Statement that has not been received shall be canceled. 4.4. In addition, within thirty (30) days after the later of the expiration of the Term or the final settlement and termination of all resale and hedge transactions entered into during the term of this Agreement, Bunker One shall issue a final detailed ledger Statement. If the Remaining Exposure shown on such final detailed ledger Statement is less than zero then Vertex shall pay [****] percent ([****]%) of such amount to Bunker One. If the Remaining Exposure shown on such final detailed ledger Statement is greater than zero then Bunker One shall pay [****] percent ([****]%) of such amount to Vertex. 4.5. Payment for any amounts due in accordance with the above shall be made within three (3) Business Days after the date of the applicable detailed ledger Statement. If any detailed ledger State- ment is disputed in good faith, the Party owing money will pay the undisputed portion by the due date and will by such due date provide a written explanation of the basis for the disputed portion to such due date. The Parties shall endeavor to resolve any disputes promptly, and the disputed amount found due, if any, plus accrued interest at the Interest Rate shall be paid within three (3) Business Days following resolution of the dispute. All payments under the terms of this Agreement shall be made in US Dollars and immediately available funds. The Parties shall net all undisputed amounts due and owing on the same day, and/or past due, arising under this Agreement such that the Party owing the greater amount shall make a single payment of the net amount to the other Party. Interest on late payments shall accrue at the Interest Rate from the due date until the date of payment. + +Source: VERTEX ENERGY INC., 8-K, 1/13/2020 + + + + + +5. Term 5.1. The term of this JSMA shall commence on May 1, 2020 (the "Commencement Date") and ends at April 30, 2029 (the "Term"), with automatic renewals each for a period of five (5) years (a "Renewal Term") unless notice is given pursuant to 5.2. 5.2. This JSMA will be terminated as of the end of the Term or any Renewal Term, by either Party giving written notice of non-renewal to the other Party no less than 120 prior to the applicable expiry date (the "Termination Period"). 5.3. If at any time an Event of Default (as defined below) has occurred and is continuing, the Defaulting Party shall have ten (10) days after receipt of written notice from the Non-Defaulting Party speci- fying the default, within which to cure any such default, unless such default is not susceptible of cure within such ten (10) day period in which case the Defaulting Party shall have such additional time as may be accepted by the Non-Defaulting Party (in its sole discretion), provided that the Defaulting Party initiates cure proceedings promptly and thereafter diligently pursues cure to completion. Notwithstanding the foregoing, in no event shall the cure period exceed thirty (30) days. Upon the expiration or lapse of all notice and cure rights if the default remains uncured the Non-Defaulting Party may terminate this JSMA with immediate effect. 5.4. In the event of a termination in accordance to clause 5.2 it is agreed that both parties agree to unwind and minimize costs and exit the JSMA as soon as practicably possible not exceeding 120 days. 5.5. In the event of a termination in accordance to clause 5.3 the Defaulting Party has to indemnify and hold harmless the Non-Defaulting Party for any and all losses, damages, costs etc. incurred by the Non-defaulting Party as a consequence of an Event of Default. 5.6. A Party may terminate the JSMA immediately upon the delivery of written notice to the other Party if there has been a Change in Control. The term "Change in Control", as used in this Agreement, means (A) the sale or transfer, through one transaction or a series of transactions, of all or some portion of the issued and outstanding shares of voting equity interests of a Party, or such Party's parent, such that the majority of such equity interests are owned by individual(s) or entity(ies) that did not own a majority of such equity interests on the Commencement Date; (B) the reorganization, merger or consolidation of a Party, or such Party's parent, unless immediately following such business combination, all or substantially all of the individuals and entities who were the beneficial owners of either entity immediately prior to such business combination beneficially own, directly or indirectly, a majority of the issued and outstanding shares of voting equity interests of such entity; (C) the sale or transfer, through one transaction or a series of transactions, of all or substantially all of the assets of a Party, or such Party's parent; or (D) the occurrence of any other event(s) whereby the individual or group of individuals who ultimately own or control a Party or such Party's parent as of the Commencement Date no longer has the right or ability to control or cause the direction of the management and policies of such entity. For these purposes Bunker Holding Group is the parent of Bunker One, Inc., and Vertex Energy, Inc. is the parent of Vertex Energy Operating LLC. + +Source: VERTEX ENERGY INC., 8-K, 1/13/2020 + + + + + +6. Event of Default 6.1. The occurrence at any time of any of the following events, and expiration of any applicable notice or cure rights, shall constitute an event of default (an "Event of Default") : 6.1.1. A Party fails to make, when due, any payment under this JSMA and such failure is not remedied within three (3) Business Days after written notice of such failure is given to the Party; 6.1.2. A Party fails to comply with or perform any other obligation under this JSMA, if such failure is not cured within the expiration of all applicable notice and cure rights; 6.1.3. Insolvency etc. A Party is (i) dissolved; (ii) becomes insolvent or is unable to pay its debts as they fall due or admits to be so in writing; (iii) makes a general arrangement with or for the benefits of its creditors; (iv) suspends making payments; (v) institutes or has instituted against it a proceeding seeking a judgement of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law other similar law affecting creditor's rights, or a petition is presented for its winding-up or liquidation and such petition is not withdrawn, dismissed, discharged, stayed or restrained within thirty (30) days; (vi) seeks or becomes subject to the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian or other similar official for it for all or substantially all its assets; (vii) has a secured party take possession of all or substantially all its assets; (viii) causes or is subject to any event with respect to it which, under the applicable laws of any jurisdiction, has an analogous effect to any of the events specified in (i)-(viii); or (ix) takes any action in furtherance of, or indicating its consent of, approval of, or acquiescence in, any of the acts referred to in this clause. 7. Taxes 7.1. Each Party is responsible for payment and reporting of its federal, state, and local income taxes and state franchise, license, and similar taxes required for the maintenance of its business existence. 7.2. Should any unexpected taxes, fees, and/or other charges, including penalties and/ or interest, occur because of one Party's failure to pay and/or report, said Party shall bear all costs associated with such failure and shall indemnify the other Party from additional costs. 8. Confidentiality 8.1. The JSMA is private and confidential. Both Parties agree that all information, other than Exempt Information, obtained in connection with the JSMA from the other Party shall be treated as confidential property of the other Party, and such confidential property shall not be disclosed without the written consent of the other Party or used by the other Party for any purpose other than fulfilling its duties and responsibilities established hereunder; provided however, that either Party may disclose such information where required or requested by any law, court of competent jurisdiction or any judicial, governmental, supervisory or regulatory body, provided that the disclosing Party notifies the other Party (to the extent permitted by law and regulation), as soon as possible, upon becoming aware of any such requirement to give that Party the opportunity to seek any other legal remedies to maintain such information in confidence. Each Party shall use its reasonable efforts to have the information maintained as confidential when such disclosure is required. "Exempt Information" is any information that the recipient can demonstrate (a) was in + +Source: VERTEX ENERGY INC., 8-K, 1/13/2020 + + + + + +its possession prior to the time of disclosure; (b) is or becomes public knowledge through no fault, omission, or other act of the recipient; (c) is obtained from a third party under no obligation of confidentiality; or (d) was independently developed by or for the recipient without violating the terms of this Agreement. 8.2. In the event that any Party makes a disclosure contrary to the provisions of this clause the other Party shall have the right, without prejudice to any other rights or remedies it may have hereunder or otherwise, to terminate the JSMA effective immediately upon notice to the disclosing Party. The obligation of confidentiality shall be of a continuing nature for 2 years after termination of this JSMA and shall not be canceled by the expiration, suspension or termination of the JSMA. Notwithstanding the foregoing, each Party on demand shall promptly disclose to the other all documents and accounts relating to the JSMA. 9. Non-competition 9.1. Both Parties undertake, during the Term of this JSMA and for 2 (two) years from the termination or expiry of the JSMA not to directly conduct or otherwise promote activities which compete at the point source of the other Party's business in the Area. The point source of Vertex being a specialty refiner of alternative feedstocks engaged in supply and marketing of said refined streams and the point source of Bunker One being a marine fuel blending bunker company with sale outlets via trade, direct, wholesale and bunkering business. Any exceptions from the above-stated principle require the written consent of the other Party. Each Party is entitled to exercise any and all rights and remedies available at law or in equity, including, without limitation, pursuing injunc- tive relief. 10. No authority to bind. 10.1. Neither Party has the authority to bind or enter into any contracts or agreements on behalf of the other Party, unless instructed in writing prior to the conclusion of the respective transaction. The Parties specifically acknowledge that they are not establishing a joint venture or partnership or any similar arrangement. 11. Assignment. 11.1. Neither Party shall assign or transfer any rights or obligations hereunder without the express prior written consent of the other Party, which may not be unreasonably withheld. Nothing in the JSMA is intended or shall be construed to confer upon or give to any person or entity any rights as a third party beneficiary of the JSMA or any Party thereof. 12. Indemnification. 12.1. Vertex shall promptly indemnify Bunker One and pay any and all damages, losses, liabilities, costs and expenses, including reasonable attorneys' fees, incident to any suits, actions, investigations, claims or proceedings suffered, sustained, incurred or required to be paid by Bunker One by reason of any negligence, gross negligence and/or intentional act or omission on the part of Vertex in rendering services hereunder, or any breach or failure of observance or performance of any representation, warranty, covenant or agreement made by Vertex hereunder. + +Source: VERTEX ENERGY INC., 8-K, 1/13/2020 + + + + + +12.2. Bunker One shall promptly indemnify Vertex and pay any and all damages, losses, liabilities, costs and expenses, including reasonable attorneys' fees, incident to any suits, actions, investigations, claims or proceedings suffered, sustained, incurred or required to be paid by Vertex by reason of any negligence, gross negligence and/or intentional act or omission on the part of Bunker One in rendering services hereunder, or any breach or failure of observance or performance of any rep- resentation, warranty, covenant or agreement made by Bunker One hereunder. 12.3. This clause shall survive termination of this JSMA. 13. Law and jurisdiction. 13.1. This Agreement shall be governed, interpreted and construed in accordance with the laws of the State of Alabama, without giving effect to its conflict of laws provisions. Any dispute arising out of or in connection with this JSMA, including without limitation any question regarding its existence, validity or termination, that is not resolved in accordance with the provisions set forth below in Section 13.3, shall be submitted to the exclusive jurisdiction of the United States District Court for the Southern District of Alabama in the City of Mobile, unless that court does not have subject-matter jurisdiction or declines jurisdiction, in which case any such dispute shall be submitted to the exclusive jurisdiction of the State Court for the State of Alabama, City of Mobile, as described in the following paragraphs. Any counterclaim arising out of, or in connection with, the dispute shall be brought in the same proceeding. 13.2. Each Party submits to the jurisdiction of the United States District Court for the Southern District of Alabama. Each Party waives, to the fullest extent permitted by applicable law, any objection to venue in the United States District Court for the Southern District of Alabama or to or any claim of inconvenient forum of such court or of sovereign immunity. Each Party waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect of any proceeding relating to this JSMA. 13.3. Arbitration. 13.3.1 Resolution of Disputes. If a Dispute arises between the parties, the parties agree to use the following procedures in good faith to resolve such Dispute promptly and non judicially. For purposes of this Agreement, "Dispute" shall mean any alleged material breach of any representation, warranty or obligation herein, or a disagreement regarding the interpretation, performance or nonperformance of any provision thereof, or the validity, scope and enforceability of these dispute resolution procedures, or any dispute regarding any damages arising from the termination of this Agreement. Any party may give written notice to any other party of the existence of a Dispute (a "Dispute Notice"). 13.3.2 Negotiation. Within five (5) days after delivery of any Dispute Notice the parties involved in the Dispute shall meet at a mutually agreeable time and place and thereafter as often as they deem reasonably necessary to exchange relevant information and attempt in good faith to negotiate a resolution of the Dispute. If the Dispute has not been resolved within ten (10) days after the first meeting of the parties, or, if the party receiving the Dispute Notice will not meet within ten (10) days after receipt of the Dispute Notice, then either party may, by delivering notice to the other party, commence arbitration proceedings. + +Source: VERTEX ENERGY INC., 8-K, 1/13/2020 + + + + + +13.3.3 General Dispute Resolution Provisions. (a) All deadlines specified in this Section 13.3 may be extended by mutual agreement. The procedures specified in this Section 13.3 are an essential provision of this Agreement and are legally binding on the parties. These procedures shall be the sole and exclusive procedures for the resolution of any Dispute between the parties arising out of or relating to this Agreement. Any and all actions to enforce the obligations under this Section 13.3 shall be brought in any court specified in Section 13.1. (b) The parties acknowledge that the provisions of this Section 13.3 are intended to provide a private resolution of Disputes between them. Accordingly, all documents, records, and other information relating to the Dispute shall at all times be maintained in the strictest confi- dence and not disclosed to any third party, other than the arbitrators, except where specifically allowed hereunder. All proceedings, communications and negotiations pursuant to this Section 13.3 are confidential. In the event of any judicial challenge to, or enforcement of, any order or award hereunder, any party may designate such portions of the record of such proceedings, communications, and negotiations as such party deems appropriate to be filed under seal. All pro- ceedings, communications and negotiations pursuant to this Section 13.3 shall be treated as com- promise negotiations for all purposes, including for purposes of the US Federal Rules of Evidence and state rules of evidence. None of the statements, disclosures, offers, or communications (or other assertions made in any proceeding or negotiation) made pursuant to this Section 13.3 shall be deemed admissions, nor shall any of said statements, disclosures, offers, communications or assertions be admissible for any purpose other than the enforcement of the terms of this Section 13.3. (c) The parties agree to act in good faith to comply with all of their respective obligations under this Agreement as much as possible as if there were no Dispute during any pending mediation or arbitration hereunder. (d) The parties agree that the terms of this Section 13.3 shall survive the termination or expiration of this Agreement. (e) WAIVER OF JURY TRIAL. The parties agree to have any Dispute that is not resolved pursuant to the procedures established in Section 13.3(a) - (c) decided by neutral arbitration as provided in this Section 13.3(e) and the parties are giving up any rights they might possess to have the Dispute litigated in a court or by a jury trial. The parties are giving up their judicial rights to discovery and appeal, unless such rights are specifically included in this Section 13.3(e). The parties acknowledge and agree that their agreement to this arbitration provision is voluntary. FOR THE AVOIDANCE OF DOUBT AND IN FURTHERANCE OF THE FOREGOING, EACH PARTY HERETO HEREBY WAIVES AND COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE) ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE OR ACTION, CLAIM, CAUSE OF ACTION OR SUIT (IN CONTRACT, TORT OR OTHERWISE), INQUIRY, PROCEEDING OR INVESTIGATION ARISING OUT OF OR BASED UPON THIS AGREEMENT OR THE SUBJECT MATTER HEREOF, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING. 13.4 Each Party agrees to the service of any court process by registered or certified U.S. mail (return receipt requested) or by express mail courier delivered to the Party at its last designated address. In + +Source: VERTEX ENERGY INC., 8-K, 1/13/2020 + + + + + +addition, each party agrees that any other method of service allowed by Alabama law may be used. All process and any accompanying complaint or other pleadings shall be in the English language and do not require officialization. 13.5 The United Nations Convention on Contracts for the International Sale of Goods of Vienna 1980 shall not apply to this JSMA. 14. Merger. 14.1. The JSMA is a complete and exclusive statement of all terms and conditions governing the activities contemplated by the JSMA, and supersedes all prior agreements between the parties, written or oral, relating hereto. Unless identified in the JSMA (i.e. sales agreement, terminaling agreements, charter party agreements, etc.) or subsequently documented in writing, no other contract or course of dealing between the Parties, and no statement of any agent, employee or representa- tive of either Party shall be admissible in construing the terms of the JSMA. Each Party affirms that no representations have been made by the other Party, or relied on by it, in entering into this JSMA. 15. Severability of Provisions. 15.1. The invalidity, illegality or unenforceability of any one or more of the provisions of the JSMA, other than the FCPA provision, shall in no way affect or impair the validity and enforceability of the remaining provisions hereof. 16. Notices. 16.1. All notices and other communications given under the JSMA shall be in writing (including, without limitation, by fax and email) and shall be effective upon receipt by the addressee. 17. Waiver. 17.1. No failure or any delay on the part of a Party exercising any rights hereunder shall operate as a waiver of any such rights. No waiver of any default or breach of any provision of this JSMA shall be deemed a continuing waiver or waiver of any other breach or default. 18. Anti-Bribery/Corruption. 18.1. Each Party, and any agent or representative of any Party acting at such Party's direction, on such Party's behalf, or for such Party's benefit, in any way related to this Agreement (collectively, "Concerned Persons"), will be familiar with and comply with (i) the provisions of the United States Foreign Corrupt Practices Act (15 U.S.C.A. §§ 78dcl-1 et seq. (1997 & Supp. 2004)), including any amendments which may be effected during the term hereof (ii) the Laws of the country of incor- poration of such Party or such Party's ultimate parent company or the principal place of business of such ultimate parent company; or (m) the principles described in the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions signed in Paris in December 19, 1997, which entered into force on February 15, 1999 and the Conventions Commentaries + +Source: VERTEX ENERGY INC., 8-K, 1/13/2020 + + + + + +or the UK Bribery Act 2010. In particular, in carrying out any duties under this Agreement, no Concerned Person will make or offer to make the payment of money or anything else of value to: a. any government official of any country, b. any political party of any country, c. any candidate of any political party of any country, d. any other person, while knowing or having reason to know, that such person will make a payment to a government official, political party, or a candidate of a political party of any country. 18.2. Any breach of this Paragraph by a Concerned Person will result in the termination of this Agreement and will obligate the return of any amounts paid hereunder to such Concerned Person. 19. Board of Directors meetings. During the Term of this JSMA, provided that Bunker One, directly or indirectly, consummates the capital investment described in the Term Sheet, Vertex shall permit a representative of Bunker One, reasonably acceptable to a majority of Vertex's Board of Directors (it being understood that Carlos G. Torres, Sara Shipman Myers and Peter Zachariassen meet such criteria), to attend all meetings of the Board of Directors of Vertex and its committees (committees defied as Audit and Nominating Committee and any special committee formed to consider extraordinary transac- tions) in a non-voting observer capacity and, in this respect, shall give such representative of Bunker One copies of all notices, minutes, consents and other material that Vertex provides to its directors and committee members, provided, that Vertex reserves the right to withhold any in- formation and to exclude such representative from any meeting or portion thereof if Vertex de- termines, upon advice of counsel, such withholding or exclusion is necessary to preserve the at- torney-client privilege between Vertex and its counsel or would result in disclosure of trade se- crets. Bunker One agrees, and any representative of Bunker One will agree, to hold in confidence any confidential information provided to or learned by it in connection with its rights under this section. The confidentiality provisions hereof will survive termination of the Term. + +Source: VERTEX ENERGY INC., 8-K, 1/13/2020 + + + + + +APPENDIX A: (SEE INTERTEK REPORT OF ANALYSIS to include IFO-180, IFO-380 and DMA) APPENDIX B: Storage Agreement. IN WITNESS WHEREOF, THE PARTIES HERETO HAVE HEREBY EXECUTED THIS AGREEMENT AS OF THE DATE FIRST WRITTEN ABOVE. Bunker One, Inc. /s/ Sara Shipman Myers Name: Sara Shipman Myers Vertex Energy Operating, LLC + +Name: Ben Cowart + +Source: VERTEX ENERGY INC., 8-K, 1/13/2020 \ No newline at end of file diff --git a/full_contract_txt/VgrabCommunicationsInc_20200129_10-K_EX-10.33_11958828_EX-10.33_Development Agreement.txt b/full_contract_txt/VgrabCommunicationsInc_20200129_10-K_EX-10.33_11958828_EX-10.33_Development Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..c6dd511af5a4460c614585c2895fac79fe629deb --- /dev/null +++ b/full_contract_txt/VgrabCommunicationsInc_20200129_10-K_EX-10.33_11958828_EX-10.33_Development Agreement.txt @@ -0,0 +1,217 @@ +MOBILE APPLICATION DEVELOPMENT AGREEMENT (Agreement No: VAL/MAD/PVTINV/DC/190305/1) EDT (Electronic document transmissions) + +EDT (Electronic document transmissions) shall be deemed valid and enforceable in respect of any provisions of this Contract. As applicable, this agreement shall be:- Incorporate U.S. Public Law 106-229, ''Electronic Signatures in Global and National Commerce Act'' or such other applicable law conforming to the UNCITRAL Model Law on Electronic Signatures (2001) and ELECTRONIC COMMERCE AGREEMENT (ECE/TRADE/257, Geneva, May 2000) adopted by the United Nations Centre for Trade Facilitation and Electronic Business (UN/CEFACT). EDT documents shall be subject to European Community Directive No. 95/46/EEC, as applicable. Either Party may request hard copy of any document that has been previously transmitted by electronic means provided however, that any such request shall in no manner delay the parties from performing their respective obligations and duties under EDT instruments. + +PRIVATE & CONFIDENTIAL + +1- + +2- + +3- + +Source: VGRAB COMMUNICATIONS INC., 10-K, 1/29/2020 + + + + + +Mobile Application Development Agreement Agreement No: VAL/MAD/PVTINV/DC/190305/1 + +Mobile Application Development Agreement This Mobile Application Development Agreement (the "Agreement") is made and effective from 5th Day of March, 2019 BETWEEN: VGrab Asia Ltd. (hereinafter called as the "VAL"), located at Room E, 6th Floor, Eastern Commercial Center, 397 Hennessy Road, Hong Kong. AND: Mr. Zheng Qing, Mr. Gu Xianwin and Ms. Chen Weijie (hereinafter called as the "Developer"), a group of private software developers individuals' lead and coordinated by Ms. Chen Weijie with its operations in P.R.China. And hereinafter, the parties hereto shall be referred to as "Party" or "Parties". RECITALS Whereas, VAL wishes to engage the Developer for services as an independent contractor for the sole purpose of designing the Duesey Coffee Chinese Mobile Apps and backend software contained for iPhone, iPad, Android (Hereinafter called as the "Project") developed as per the requirements specifications by VAL within this mobile application development agreement Whereas, the "Developer" is engaged in the making of such applications and holds all the necessary tools to obtain the needed results of this Project for VAL. NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, the parties hereto, intending, to be legally bound, agree as follows: SCOPE OF WORK The high level scope of work is the development of the Project on the requirements specifications as per Clause 6. Creative designs and graphics development is covered in the scope of work of this Agreement; Developer may recommend or create their own designs for the betterment of the App. COMMENCEMENT DATE This Agreement shall commence on 5th March 2019 AGREEMENT PERIOD This Agreement will be for the maximum period of six (6) months beginning for the commencement date, renewable in accordance with the terms hereof, unless earlier terminated pursuant to this Agreement. + +Page 1 of 7 + +1. + +2. + +3. + +Source: VGRAB COMMUNICATIONS INC., 10-K, 1/29/2020 + + + + + +Mobile Application Development Agreement Agreement No: VAL/MAD/PVTINV/DC/190305/1 + +ESTIMATION AND COMMERCIALS Platform iOS, Android + +Development Chinese WeChat's Online Store, Social Media, Website, Online Promotion/Marketing and Online Payment for the P.R.China market. Total Delivery Time Min - 4 Calendar Months, Max - 6 Calendar Months Quotation (In USD) $ 200,000.00 Notes: Payments for this Agreement will be transferred by VAL via Bank Wire Transfer Method in US Dollars Currency as per Clause 5. PAYMENT TERMS All Parties agreed the payment listed below are fair and just for the services being provided. Payment to the following individual below within 7 days upon completion and handover on the Project to VAL. No. Name Function Amount + +1. Ms. Chen Weijie Coordinator/Lead Developer USD100,000.00 + +2. Mr. Zheng Qing Developer USD50,000.00 + +3. Mr. Gu Xianwin Developer USD50,000.00 ENGAGEMENT PROCESS & MILESTONE The Engagement Process and Milestone corresponding for this Fixed Price Project Agreement are as follows: Graphic Design/ UI/ Creative Design/ multimedia The VAL is responsible for, and will supply any graphics/ design/ artwork/ multimedia (sound/ video) required for the project to the Developer at either the beginning of the project, or partially during the development. Developer will however put its recommendations; assist in graphic creation for the betterment of the App. Collaboration, coordination A status update on the progress of the work will be shared with VAL by the lead on milestones basis formally by developer, and informally on weekly/ fortnight/ or as and when required basis. Weekly status calls will also happen to discuss and review the work in progress. WeChat's Official Account Setup Developer will register a WeChat Official Account on behalf of VAL, which has access to all advanced APIs for the development of WeChat Online Duesey Coffee Store in P.R.China. WeChat's Official Social Media and Moments Setup Developer will develop and registered a Duesey Coffee Social Media Platform within the WeChat Official Account on behalf of VAL. WeChat's Mini Program and WeChat Pay Compliance + +Page 2 of 7 + +4. + +‐ + +5. + +6. + +6.1 + +6.2 + +6.3 + +6.4 + +6.5 + +Source: VGRAB COMMUNICATIONS INC., 10-K, 1/29/2020 + + + + + +Mobile Application Development Agreement Agreement No: VAL/MAD/PVTINV/DC/190305/1 + +Developer will develop the Duesey Coffee Mini Program which incorporates the website, products storefront, inventory, ordering systems and payment system. Developer shall ensure the app is technically compliant to WeChat's App guidelines, and VAL's business compliance. Being Developer of the project, Developer will be responsible and liable for the product's business compliance with WeChat Mini Program and Payment guidelines. Simple tabular representation of the Milestone's definition schedule as per the points mentioned above: + +No Definition Timeline + +1 + +Setup WeChat Official Account for Duesey Coffee App design and Architecture completed. Backend API partially done. Front end Apps Alpha release initiated. Sent for test/ review by VAL + +6 w e e k s u p o n s i g n i n g o f Agreement + +2 + +WeChat Store Front and Backend development Social Medial and WeChat Moments Front and Backend development Backend API fully done. Front end Apps Alpha release completed. Sent for test/ review by VAL. Previously reported bugs fixed. + +Week 7 - 13 + +3 + +Bugs or feedback escaped in Alpha release fixed. Front end Apps beta release completed. Sent for test/ review by VAL Live run of Duesey Coffee Apps in WeChat + +Week 14 - 18 + +4 + +All Apps fully completed. Sent for test/ review by VAL. All bugs or feedback resolved and incorporated. Submission to the stores if all tests are passed. + +Week 19 - 21 + +5 Bug Fixing Warranty Time. If any bug is reported then it will be resolved on priority. Week 22 - 23 + +6 Live and Handover Project to VAL Week 24 + +100 % Completed + +CHANGE ORDERS Definition of Change Order: Any change or modification in functionality or feature or UI of the App required by VAL which is beyond agreed functional requirements considered in this Agreement will be considered as a "Change" in the original specifications, and that shall be agree by Developer to VAL or vice versa as a "Change Order" in writing. + +Page 3 of 7 + +6.6 + +· · · · · · · + +· · · · · · · · · · · · · · + +· + +7. + +Source: VGRAB COMMUNICATIONS INC., 10-K, 1/29/2020 + + + + + +Mobile Application Development Agreement Agreement No: VAL/MAD/PVTINV/DC/190305/1 + +Change Orders do not however cover any bug or glitch fixing produced out of the code written by Developer as any "bug" will be fixed by Developer for free up to 3 months after final delivery (Bug Fixing Warranty). SCOPE OF DELIVERABLES No. Deliverable Name Scope + +1. Duesey Coffee WeChatFunctionality Development WeChat Mobile App functionality to be developed across both platforms, API development. + +2. Functional requirements & UI/Multimedia, backend access. VAL will supply products, logo, pricing and final design approval, multimedia, CMS access. + +3. Application package App package to be shared with the VAL for testing andreview. + +4. WeChat Official Account upload Apps to be uploaded in WeChat for public viewing anddownloading. DEVELOPMENT TECHNOLOGIES & TARGET DEVICES AND OS The proposed technologies are as follows: iOS SDK, Android, app.json, PHP iPhone and iPad running OS versions 5 to 8; Android devices running 3.0 and above. ASSUMPTIONS AND DEPENDENCIES The development and unit testing of the products will be done online for actual live functionality. The Developer shall on own cost use its credentials of its WeChat Developer Account to develop this Project for VAL. INTELLECTUAL PROPERTY RIGHTS AND OWNERSHIP All Intellectual Property during the project is owned by VAL, and will be turned over to VAL at the conclusion of the project by Developer and after the fulfillment of all commercial obligations by the VAL. All rights and title to Duesey Coffee Intellectual Property created pursuant to the Project shall belong to VAL and shall be subject to the terms and conditions of this Agreement. + +Page 4 of 7 + +8. + +9. + +Development Technologies: Target Device and OS: + +10. · · + +11. 11.1 + +11.2. + +Source: VGRAB COMMUNICATIONS INC., 10-K, 1/29/2020 + + + + + +Mobile Application Development Agreement Agreement No: VAL/MAD/PVTINV/DC/190305/1 + +CONFIDENTIALITY Any information, data and/or contents of documents made available by a party hereto to the other for the purposes of this Agreement hereby contemplated shall not, without the prior written consent of such party, be disclosed to any person, firm or corporation (and to only such extent for) the implementation of the Agreement. Such information, data and/or contents of documents may be disclosed to officers, employees, auditors, solicitors and other professional advisors of this Agreement but only to the extent required in each instance for the implementation of the Agreement hereby contemplated. Each party hereto hereby undertakes with the other party hereto, and to the intent that such undertaking shall have full force and effect notwithstanding that such party shall cease to participate in the Agreement, that it will not, without the prior written consent of the other party hereto, divulge to any person, firm or corporation, any information on technical, economic, financial and marketing matters and any material, data and/or contents of documents received by such party hereto from the other party hereto relating to the Agreement except where (but only to the extent that) disclosure is required by law and will ensure that its employees and agents shall at all times observe this clause. TERMINATION VAL shall, in the event of Developer committing any breach of any of the terms and conditions of this agreement or for any other reason considered as sufficient, be entitled to terminate this agreement by giving two (2) weeks' notice in writing and it is applicable only when the project is not completed. If the customer terminates the agreement, then VAL shall compensate the Developer up to the date of termination with a fee calculated on Pro-rata basis. Developer may also terminate this Agreement by giving two (2) weeks' notice in writing to VAL. It is applicable only when the project is not completed. In case Developer terminates the agreement, it shall handover the entire project related IPR, work done till date to VAL. TERM OF AGREEMENT This Agreement commences on the date it is executed and shall continue until full performance by both parties, or until earlier terminated by one party under the terms of this Agreement. ENTIRE AGREEMENT AND GOVERNING LAW AND JURISDICTION This agreement supersedes all oral and written representations and agreements between the parties including, but not limited to any earlier agreement relating to the subject matter thereof. This agreement shall be construed, interpreted and governed by and in accordance with the laws of Hong Kong. In case the arbitration proceedings fail, an unresolved dispute between Developer and VAL is subject to the binding laws of Hong Kong as a first attempt at formal resolution. Should arbitration fail to reach a resolution and either party wish to pursue the dispute further, this shall be conducted within the binding laws of Hong Kong. LANGUAGE The English language shall be the medium used in all correspondence and legally binding tender. + +Page 5 of 7 + +12. 12.1 + +12.2 + +13. + +14. + +15. + +16. + +Source: VGRAB COMMUNICATIONS INC., 10-K, 1/29/2020 + + + + + +Mobile Application Development Agreement Agreement No: VAL/MAD/PVTINV/DC/190305/1 + +NOTICE Any notice or other communication required or permitted to be given between the parties under this agreement shall be given in writing at the following address or such other addresses may be intimated from time to time:- For VAL Kind Attn: Mr. Charles Liong, CFO Located at Room E, 6th Floor, Eastern Commercial Center, 397 Hennessy Road, Hong Kong. For Developer Kind Attn: Ms. Chen Weijie, Coordinator/Lead Developer No 12-12-1, City Gardens Condo, Persiaran Raja Chulan, 50200 Kuala Lumpur, Malaysia ENTIRE AGREEMENT AND AMENDMENTS Save insofar as the terms herein contained are supplemented by the articles of association of the Cooperation, this Agreement represents the complete and entire understanding between the parties to the exclusion of all agreements to the contrary, whether oral or written, made prior to the date hereof. Any modification, amendment or alteration of this Agreement shall be made only with the written consent duty signed by all parties and shall be effective from the date of the revision or such other date as may be agreed upon between the parties. EFFECT OF HEADINGS The headings of the Clauses hereof have been inserted for convenience only and shall not affect the interpretation of the provisions of this Agreement. BINDING EFFECT This Agreement shall be binding on the successors in title and permitted assigns of the parties hereto. + +Page 6 of 7 + +17. + +18. 18.1 + +18.2 + +19. + +20. + +Source: VGRAB COMMUNICATIONS INC., 10-K, 1/29/2020 + + + + + +Mobile Application Development Agreement Agreement No: VAL/MAD/PVTINV/DC/190305/1 + +IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first above written. Represented legally by For and on behalf of VGRAB ASIA LTD. Represented by: /s/ Liong Fook Weng Liong Fook Weng (Charles) Executive Director/Chief Financial Officer Represented legally by DEVELOPER /s/ Chen Weijie /s/ Zheng Qing Chen Weijie Zheng Qing Passport No: [REDACTED] Passport No: [REDACTED] + +/s/ Gu Xianwin Gu Xianwin Passport No: [REDACTED] + +Page 7 of 7 + +Source: VGRAB COMMUNICATIONS INC., 10-K, 1/29/2020 \ No newline at end of file diff --git a/full_contract_txt/VirtuosoSurgicalInc_20191227_1-A_EX1A-6 MAT CTRCT_11933379_EX1A-6 MAT CTRCT_License Agreement.txt b/full_contract_txt/VirtuosoSurgicalInc_20191227_1-A_EX1A-6 MAT CTRCT_11933379_EX1A-6 MAT CTRCT_License Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..025b3b1eade5ba16ebf0136023eff7d89216a406 --- /dev/null +++ b/full_contract_txt/VirtuosoSurgicalInc_20191227_1-A_EX1A-6 MAT CTRCT_11933379_EX1A-6 MAT CTRCT_License Agreement.txt @@ -0,0 +1,209 @@ +Exhibit 6.2 NON-EXCLUSIVE LICENSE AGREEMENT BETWEEN THE JOHNS HOPKINS UNIVERSITY & VIRTUOSO SURGICAL, INC. + +JHU Agreement: A29889 + +Source: VIRTUOSO SURGICAL, INC., 1-A, 12/27/2019 + + + + + +1 + +May 3, 2016 NON-EXCLUSIVE LICENSE AGREEMENT- FOR SALES This Non-Exclusive License Agreement (hereinafter "Agreement") is entered into by and between The Johns Hopkins University (hereinafter "JHU"), a corporation of the State of Maryland, having a principal place of business 3400 N. Charles Street, Baltimore, Maryland 21218- 2695 and, Virtuoso Surgical, Inc. (hereinafter "Company"), a Tennessee corporation having an address at 5701 Old Harding Pike; Suite 200; Nashville, TN 37205. The parties hereto agree as follows: 1. BACKGROUND 1.1 In the course of a fundamental research program at JHU, a valuable invention entitled Active Cannulas for Bio-Sensing and Surgical Intervention (JHU Ref. C04873) was developed by Drs. Robert Webster, III, Noah Cowan, Allison Okamura, and Russell Taylor (hereinafter "Inventors"). 1.2 JHU has acquired all right, title and interest, with the exception of certain retained rights by the United States government, in said invention but is without the capacity to commercially develop, manufacture and distribute products and methods which embody the invention. 1.3 Company is interested in providing such commercial products and methods to third parties on a non-exclusive basis and agrees to comply with the terms and conditions in this Agreement. 1.4 All references to particular Exhibits or Paragraphs shall mean the Exhibits to, and Paragraphs of, this Agreement, unless otherwise specified. 2. DEFINITIONS 2.1 "EFFECTIVE DATE" of this Agreement shall mean the date the last party hereto has executed this Agreement. 2.2 "LICENSED FIELD" shall mean Cannulated Surgical Intervention. 2.3 "LICENSED PRODUCT(S)" as used herein in either singular or plural shall mean any material, compositions, or other product, the manufacture, use or sale of which would constitute, but for the license granted to Company pursuant to this Agreement, an infringement of a claim of PATENT RIGHT(S) (infringement shall include, but is not limited to, direct, contributory, or inducement to infringe). 2.4 "LICENSED SERVICE(S)" as used herein in either singular or plural shall mean the performance on behalf of a third party of any method including cannulated surgical intervention or the manufacture of any product or the use of any product which would constitute, but for the license granted to Company pursuant to this Agreement, an infringement of a claim of the PATENT RIGHT(S), (infringement shall include, but not be limited to, direct, contributory or inducement to infringe). + +Source: VIRTUOSO SURGICAL, INC., 1-A, 12/27/2019 + + + + + +2 + +May 3, 2016 2.5 "NET SALES" shall mean gross sales revenues and fees billed by Company from the sale of LICENSED PRODUCT(S) less trade discounts allowed, refunds, returns and recalls, and sales taxes. In the event that Company sells a LICENSED PRODUCT(S) in combination with other ingredients or substances or as part of a kit, the NET SALES for purposes of royalty payments shall be based on the sales revenues and fees received from the entire combination or kit. 2.6 "NET SERVICE REVENUES" shall mean gross service revenues and fees billed by Company for the performance of LICENSED SERVICE(S) less sales and/or use taxes imposed upon and with specific reference to the LICENSED SERVICE(S). In the event that Company sells a LICENSED SERVICE(S) in combination with other services or substances or as part of a kit, the NET SERVICE REVENUES for purposes of royalty payments shall be based on the sales revenues and fees received from the entire combination. 2.7 "PATENT RIGHT(S)" shall mean, collectively, JHU's interest in those set forth in EXHIBIT C of this Agreement and the inventions disclosed and claimed therein, and all continuations, divisions, and reissues based thereof, and any corresponding foreign patent applications, and any patents, or other equivalent foreign PATENT RIGHT(S) issuing, granted or registered thereon. 3. GRANT 3.1 License Granted: Subject to the terms and conditions of this Agreement and to non-exclusive license agreements executed prior to the EFFECTIVE DATE, JHU hereby grants to the Company a non-exclusive, non-transferable license to make, have made, import, offer for sale and sell the LICENSED PRODUCT(S) and the LICENSED SERVICE(S) in the United States and worldwide under the PATENT RIGHT(S) in the LICENSED FIELD. 3.2 No Sublicensing: Company shall not sublicense to others under this Agreement, nor extend the rights granted hereunder to any affiliated company. 4. PAYMENTS, ROYALTY AND REPORTING 4.1 License Fee: As consideration for JHU's grant of a License to Company under this Agreement, Company shall pay to JHU a license fee, cash and equity, as set forth in Exhibit A within thirty (30) days of the EFFECTIVE DATE. The license fee is nonrefundable and shall not be credited against royalties or other fees. 4.2 Minimum Annual Royalties: Company shall pay to JHU minimum annual royalties as set forth in Exhibit A. These minimum annual royalties shall be due within thirty (30) days of each anniversary of the EFFECTIVE DATE beginning with the first anniversary. Running royalties accrued under Paragraph 4.3 and paid to JHU during the one year period preceding an anniversary of the EFFECTIVE DATE shall be credited against the minimum annual royalties due on that anniversary date. + +Source: VIRTUOSO SURGICAL, INC., 1-A, 12/27/2019 + + + + + +3 + +May 3, 2016 4.3 Running Royalties: Company shall pay to JHU, a running royalty as set forth in Exhibit A, for each LICENSED PRODUCT(S) sold and each LICENSED SERVICE(S) provided, based upon NET SALES and NET SERVICE REVENUES respectively, for the term of this Agreement. Such payments shall be made within thirty (30) days of the end of each calendar quarter following first commercial sale of LICENSED PRODUCT or providing LICENSED SERVICES. All non-US taxes related to LICENSED PRODUCT(S) and LICENSED SERVICE(S) sold under this Agreement shall be paid by Company and shall not be deducted from royalty or other payments due to JHU. 4.4 Reporting and Payments: Upon achieving first commercial sale of LICENSED PRODUCTS and LICENSED SERVICES, Company shall provide a quarterly royalty report, substantially in the format of Exhibit B, accompanying each royalty payment as required in Paragraph 4.3. Royalty reports shall disclose the amount of LICENSED PRODUCT(S) and LICENSED SERVICE(S) sold, the total NET SALES and NET SERVICE REVENUES of such LICENSED PRODUCT(S) and LICENSED SERVICE(S), and the running royalties due to JHU as a result of NET SALES and NET SERVICE REVENUES by Company. In lieu of sending quarterly royalty reports to JHU via mail or courier, Company may provide all required reports in electronic format to the email address specified by JHU. 4.5 Late Payments: In the event that any payment due hereunder is not made when due, the payment shall accrue interest beginning on the tenth day following the due date thereof, calculated at the annual rate of six percent (6%), the interest being compounded on the last day of each calendar year. Each such royalty payment when made shall be accompanied by all interest so accrued. Said interest and the payment and acceptance thereof shall not negate or waive the right of JHU to seek any other remedy, legal or equitable, to which it may be entitled because of the delinquency of any payment. 4.6 Records: The Company shall make and retain, for a period of three (3) years following the period of each report required by Paragraph 4.4, true and accurate records, files and books of account containing all the data reasonably required for the full computation and verification of sales and other information required in Paragraph 4.4. Such books and records shall be in accordance with generally accepted accounting principles consistently applied. The Company shall permit the inspection and copying of such records, files and books of account by JHU or its agents during regular business hours upon ten (10) business days' written notice to the Company. Such inspection shall not be made more than once each calendar year. All costs of such inspection and copying shall be paid by JHU, provided that if any such inspection shall reveal that an error has been made in the amount equal to five percent (5%) or more of such payment, such costs shall be borne by the Company. + +Source: VIRTUOSO SURGICAL, INC., 1-A, 12/27/2019 + + + + + +4 + +May 3, 2016 4.7 Non-Arms Length Transactions: In order to insure JHU the full royalty payments contemplated hereunder, the Company agrees that in the event any LICENSED PRODUCT(S) shall be sold to an affiliated company or to a corporation, firm or association with which Company shall have any agreement, understanding or arrangement with respect to consideration (such as, among other things, an option to purchase stock or actual stock ownership, or an arrangement involving division of profits or special rebates or allowances) the royalties to be paid hereunder for such LICENSED PRODUCT(S) shall be based upon the greater of: 1) the net selling price at which the purchaser of LICENSED PRODUCT(S) resells such product to the end user, 2) the NET SERVICE REVENUE received from using the LICENSED PRODUCT(S) in providing a service, 3) the fair market value of the LICENSED PRODUCT(S) or 4) the net selling price of LICENSED PRODUCT(S) paid by the purchaser. 4.8 Method of Payment: All payments under this Agreement shall be made in U.S. Dollars by either check or wire transfer. 4.9 Payment Information. All check payments from Company to JHU shall be sent to: Director Johns Hopkins Technology Ventures The Johns Hopkins University 100 N. Charles Street, 5t h Floor Baltimore, MD 21201 Reference: JHU Agreement A29889 or such other addresses which JHU may designate in writing from time to time. Checks are to be made payable to "The Johns Hopkins University". Wire transfers may be made through: ACH for U.S. Payments Johns Hopkins University Central Lockbox Bank of America 1400 Best Plaza Drive Richmond, VA 23227 Transit/routing/ABA number: 052001633 Account number: Type of account: depository CTX format is preferred; CCD+ is also accepted Reference: JHU Tech Transfer (JHU Agreement A29889) FED WIRE for International Payments Johns Hopkins University Central Lockbox Bank of America 100 West 33rd Street New York, NY 10001 SWIFT code: BOFAUS3N Account number: Type of account: depository + +Source: VIRTUOSO SURGICAL, INC., 1-A, 12/27/2019 + + + + + +5 + +May 3, 2016 Reference: JHU Tech Transfer (JHU Agreement A29889) Company shall be responsible for any and all costs associated with wire transfers. Company shall provide JHU with the date of wire transfer payment and ACH confirmation number upon completion of such payment. 4.10 Invoices. Any invoice for payment sent by JHU to Company may be electronically provided by e-mail service. JHU will send invoices to an e-mail address provided by Company. Company will provide JHU with any updates to this e-mail address. 5. PATENT MATTERS 5.1 Prosecution & Maintenance: JHU, at its sole option and discretion, shall file, prosecute and maintain all patents and patent applications specified under PATENT RIGHT(S). Title to all such patents and patent applications shall reside in JHU. JHU shall have full and complete control over all patent matters in connection therewith under the PATENT RIGHT(S). 5.2 Right to Enforce: JHU shall have the first right to enforce the PATENT RIGHTS against any infringement or alleged infringement thereof in the LICENSED FIELD OF USE. 6. TERM AND TERMINATION 6.1 Expiration: This term of this Agreement shall commence on the EFFECTIVE DATE and shall continue, in each country, until the date of expiration of the last to expire patent within PATENT RIGHT(S) in that country. 6.2 Termination by Company: Company may terminate this Agreement and the license granted herein, for any reason, upon giving JHU sixty (60) days written notice under Paragraph 8.1. 6.3 Termination by JHU: JHU, at its option, may terminate this Agreement and the license granted herein if Company has not made any sales of LICENSED PRODUCT(S) or LICENSED SERVICE(S) in any period of four consecutive quarters, after the initial commercial sale of the PRODUCT(S) or LICENSED SERVICE(S). 6.4 Unpaid Royalty/Reversion of Rights: Termination or expiration of this Agreement shall not affect JHU's right to recover unpaid royalties accrued prior to termination or expiration. Upon termination or expiration of this Agreement, all rights in and to the licensed technology shall revert to JHU at no cost to JHU. 6.5 Survival: All applicable provisions, including but not limited to Paragraphs 4.1 (License Fee), 9.3 (Severability), 9.4 (Use of Name), 9.6 (Disclaimer of Warranties), 9.7 (Indemnification), 9.8 (Product Liability), 9.13 (Binding Effect) and 9.14 (Governing Law) shall survive termination or expiration of this Agreement. + +Source: VIRTUOSO SURGICAL, INC., 1-A, 12/27/2019 + + + + + +6 + +May 3, 2016 7. DEFAULT 7.1 Default & Termination: Upon breach or default of any term or condition of this Agreement by either party, the defaulting party shall be given written notice of such default in writing by the party not in default. The defaulting party shall have a period of sixty (60) days after receipt of such notice to correct the default or breach. If the default or breach is not corrected within said sixty (60) day period, the party not in default shall have the right to terminate this Agreement. 8. NOTICES 8.1 Notice Information: All notices and/or other communications pertaining to this Agreement shall be in writing and sent by registered mail or certified mail, return receipt requested, or sent by overnight courier, such as Federal Express, to the parties at the following addresses or such other address as such party shall have furnished in writing to the other party in accordance with this Paragraph 8.1: FOR JHU: Director Johns Hopkins Technology Ventures The Johns Hopkins University 100 N. Charles Street, 5t h Floor Baltimore, MD 21201 Reference: JHU Agreement A29889 FOR Company: VIRTUOSO SURGICAL, INC. 5701 Old Harding Pike; Suite 200 Nashville, TN 37205 9. MISCELLANEOUS 9.1 Audit: JHU shall have the right to audit any and all Company records related to this Agreement. 9.2 Assignment: This Agreement is binding upon and shall inure to the benefit of JHU, its successors and assignees and shall not be assignable to another party, except that the Company shall have the right to assign this Agreement to another party in the case of the sale or transfer by the Company of all, or substantially all, of its assets relating to the LICENSED PRODUCT(S), LICENSED SERVICE(S) or PATENT RIGHT(S), to that party. + +Source: VIRTUOSO SURGICAL, INC., 1-A, 12/27/2019 + + + + + +7 + +May 3, 2016 9.3 Severability: In the event that any one or more of the provisions of this Agreement should for any reason be held by any court or authority having jurisdiction over this Agreement, or over any of the parties hereto to be invalid, illegal or unenforceable, such provision or provisions shall be reformed to approximate as nearly as possible the intent of the parties, and if unreformable, shall be divisible and deleted in such jurisdictions; elsewhere, this Agreement shall not be affected. 9.4 Use of Name: The Company shall not use the name of The Johns Hopkins University or The Johns Hopkins Health System or any of its constituent parts, such as the Johns Hopkins Hospital or any contraction thereof or the name of Inventors in any advertising, promotional, sales literature or fundraising documents without prior written consent from an authorized representative of JHU. Company shall allow at least seven (7) business days notice of any proposed public disclosure for JHU's review and comment or to provide written consent. 9.5 Duties of the Parties: JHU is not a commercial organization. It is an institute of research and education. Therefore, JHU has no ability to evaluate the commercial potential of any PATENT RIGHT(S), LICENSED PRODUCT(S), LICENSED SERVICE(S) or other license or rights granted in this Agreement. It is therefore incumbent upon Company to evaluate the rights and products in question, to examine the materials and information provided by JHU, and to determine for itself the validity of any PATENT RIGHT(S), its freedom to operate, and the value of any LICENSED PRODUCT(S) or LICENSED SERVICE(S) or other rights granted. 9.6 Disclaimer of Warranties: JHU does not warrant the validity of any patents or that the practice under such patents, or the manufacture, use, sale or import of LICENSED PRODUCT(S) or LICENSED SERVICE(S), shall be free from patent infringement. EXCEPT AS EXPRESSLY SET FORTH IN THIS PARAGRAPH 9.6, COMPANY AGREES THAT THE PATENT RIGHT(S) ARE PROVIDED "AS IS", AND THAT JHU MAKES NO REPRESENTATION OR WARRANTY WITH RESPECT TO THE PERFORMANCE OF LICENSED PRODUCTS OR LICENSED SERVICES INCLUDING THEIR SAFETY, EFFECTIVENESS, OR COMMERCIAL VIABILITY. JHU DISCLAIMS ALL WARRANTIES WITH REGARD TO LICENSED PRODUCTS AND LICENSED SERVICES UNDER THIS AGREEMENT, INCLUDING, BUT NOT LIMITED TO, ALL WARRANTIES, EXPRESS OR IMPLIED, OF MERCHANTABILITY AND FITNESS FOR ANY PARTICULAR PURPOSE. NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, JHU ADDITIONALLY DISCLAIMS ALL OBLIGATIONS AND LIABILITIES ON THE PART OF JHU AND INVENTORS, FOR DAMAGES, INCLUDING, BUT NOT LIMITED TO, DIRECT, INDIRECT, SPECIAL, AND CONSEQUENTIAL DAMAGES, ATTORNEYS' AND EXPERTS' FEES, AND COURT COSTS (EVEN IF JHU HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, FEES OR COSTS), ARISING OUT OF OR IN CONNECTION WITH THE MANUFACTURE, USE, OR SALE OF THE LICENSED PRODUCTS AND LICENSED SERVICES UNDER THIS AGREEMENT. COMPANY ASSUMES ALL RESPONSIBILITY AND LIABILITY FOR LOSS OR DAMAGE CAUSED BY ANY PRODUCT OR SERVICE MANUFACTURED, USED, OR SOLD BY COMPANY WHICH IS A LICENSED PRODUCT OR LICENSED SERVICE AS DEFINED IN THIS AGREEMENT. + +Source: VIRTUOSO SURGICAL, INC., 1-A, 12/27/2019 + + + + + +8 + +May 3, 2016 9.7 Indemnification: JHU and the Inventors will have no legal liability exposure to third parties if JHU does not license the LICENSED PRODUCT(S) and LICENSED SERVICE(S), and any royalties JHU and the Inventors may receive is not adequate compensation for such legal liability exposure. Therefore, JHU requires Company to protect JHU and Inventors from such exposure to the same manner and extent to which insurance, if available, would protect JHU and Inventors. JHU and the Inventors will not, under the provisions of this Agreement or otherwise, have control over the manner in which Company or those operating for its account or third parties who purchase LICENSED PRODUCT(S) or LICENSED SERVICE(S) from any of the foregoing entities, practice the inventions of LICENSED PRODUCT(S) and LICENSED SERVICE(S). The Company shall indemnify, defend with counsel reasonably acceptable to JHU, and hold JHU, The Johns Hopkins Health Systems, their representatives including but not limited to present and former, trustees, officers, Inventors, agents, faculty, employees and students harmless as against any judgments, fees, expenses, or other costs arising from or incidental to any product liability or other lawsuit, claim, demand or other action brought as a consequence of the practice of said inventions by any of the foregoing entities, whether or not JHU or said Inventors, either jointly or severally, is/are named as a party defendant in any such lawsuit. Practice of the inventions covered by LICENSED PRODUCT(S) or LICENSED SERVICE(S) by an agent or a third party on behalf of or for the account of the Company, or by a third party who purchases LICENSED PRODUCT(S) or LICENSED SERVICE(S) from the Company, shall be considered the Company's practice of said inventions for purposes of this Paragraph 9.7. The obligation of the Company to defend and indemnify as set out in this Paragraph 9.7 shall survive the termination of this Agreement and shall not be limited by any other limitation of liability elsewhere in the Agreement. 9.8 Product Liability: Prior to first commercial sale of any LICENSED PRODUCT(S) or LICENSED SERVICE(S) as the case may be in any particular country, Company shall establish and maintain, in each country in which Company shall sell LICENSED PRODUCT(S) or LICENSED SERVICE(S), product liability or other appropriate insurance coverage appropriate to the risks involved in marketing LICENSED PRODUCT(S) and/or LICENSED SERVICE(S) and will annually present evidence to JHU that such coverage is being maintained. Upon JHU's request, Company will furnish JHU with a Certificate of Insurance of each product liability insurance policy obtained. JHU shall be listed as an additional insured in Company's said insurance policies. If such Product Liability insurance is underwritten on a 'claims made' basis, Company agrees that any change in underwriters during the term of this Agreement will require the purchase of 'prior acts' coverage to ensure that coverage will be continuous throughout the term of this Agreement. 9.9 Entire Agreement: This Agreement constitutes the entire understanding between the parties with respect to the obligations of the parties with respect to the subject matter hereof, and supersedes and replaces all prior agreements, understandings, writings, and discussions between the parties relating to said subject matter. + +Source: VIRTUOSO SURGICAL, INC., 1-A, 12/27/2019 + + + + + +9 + +May 3, 2016 9.10 Amendment & Waiver: This Agreement may be amended and any of its terms or conditions may be waived only by a written instrument executed by the authorized officials of the parties or, in the case of a waiver, by the party waiving compliance. The failure of either party at any time or times to require performance of any provision hereof shall in no manner affect its right at a later time to enforce the same. No waiver by either party of any condition or term in any one or more instances shall be construed as a further or continuing waiver of such condition or term or of any other condition or term. 9.11 Binding Effect: This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors and permitted assigns. 9.12 Governing Law: This Agreement shall be construed, and legal relations between the parties hereto shall be determined, in accordance with the laws of the State of Maryland applicable to contracts solely executed and wholly to be performed within the State of Maryland without giving effect to the principles of conflicts of laws. Any disputes between the parties to the Agreement shall be brought in the state or federal courts of Maryland. Both parties agree to waive their right to a jury trial. 9.13 Headings: Article headings are for convenient reference and are not a part of this Agreement. All Exhibits are incorporated herein by this reference. 9.14 Use of Name: Nothing contained in this Agreement confers any right to either party hereto to use in advertising, publicity, or other promotional activities any name, trade name, trademark, or other designation of the other party hereto (including any contraction, abbreviation or simulation of any of the foregoing). Unless otherwise required by law, LICENSEE is prohibited from using the name "The Johns Hopkins University" or the name of any affiliate of the Johns Hopkins University, including but not limited to The Johns Hopkins Health System Corporation, or any of its hospitals or affiliates, or the names of any of their respective faculty, employees, students or INVENTORS, in advertising, publicity, or other promotional activities, without JHU's prior written approval of such use. JHU may disclose to all INVENTORS the terms and conditions of this Agreement upon their request. JHU may acknowledge to third parties the existence of this Agreement and the extent of the licenses granted to LICENSEE and AFFILIATES under Section 3 hereof, but JHU shall not disclose the financial terms of this Agreement to third parties, except where JHU is required by law to do so. LICENSEE hereby grants JHU permission to include LICENSEE's name and a link to LICENSEE's website in JHU's annual reports and on JHU's website to showcase technology transfer-related stories. JHU shall have the right to list LICENSEE and display the logotype or symbol of LICENSEE on JHU's website and on JHU publications as a licensee startup company based upon JHU technology. + +Source: VIRTUOSO SURGICAL, INC., 1-A, 12/27/2019 + + + + + +10 + +May 3, 2016 IN WITNESS WHEREOF the respective parties hereto have executed this Agreement by their duly authorized officers on the date appearing below their signatures. THE JOHNS HOPKINS UNIVERSITY VIRTUOSO SURGICAL, INC. By: /s/ Neil Veloso By: /s/ C. Mark Pickrell Neil Veloso Name:C. Mark Pickrell Executive Director Title: Attorney-in-Fact Johns Hopkins Technology Ventures Date:5/11/2016 Date:: 5/4/2016 + +Source: VIRTUOSO SURGICAL, INC., 1-A, 12/27/2019 + + + + + +11 + +May 3, 2016 EXHIBIT A LICENSE FEES and ROYALTY 1. LICENSE FEE 1.1 The license fee due under Paragraph 4.1 is two-thousand dollars ($2000). 1.2 In addition, COMPANY shall issue to JHU that number of shares of common stock representing five percent (5%) of the outstanding common and preferred shares on a fully diluted basis of COMPANY pursuant to an agreed upon stock purchase agreement between COMPANY and JHU. The stock purchase agreement shall contain provisions protecting JHU against dilution of its equity interest in the event the post-money valuation of any equity investment is less than two million dollars ($2,000,000), and it will also contain a provision for the piggy-back registration of common shares with any other class of stock in an initial public offering. If COMPANY proposes to sell any equity securities or securities that are convertible into equity securities of COMPANY (collectively, "Equity Securities") in any new round of financing, then COMPANY shall offer JHU and/or its Assignee (as defined below) an opportunity to purchase either: (i) up to that portion of the Equity Securities that equals JHU's then current, fully-diluted percentage ownership interest in COMPANY, or (ii) if the percentage offered for sale by COMPANY is less, then up to five percent (5%) of the Equity Securities offered for sale. Such offer to purchase shall be on the same terms and conditions as are offered with respect to such Equity Securities sold in such financing. For purposes of this section 7 of Exhibit A, the term "Assignee" means: (a) any entity to which JHU's preemptive rights have been assigned either by JHU or by another entity, or (b) any entity that is controlled by JHU. 2. EARNED ROYALTY 2.1 Annual Earned Royalty. COMPANY shall pay an annual EARNED ROYALTY as follows: 2.1.1 Four percent (4%) of the sum of NET REVENUES. 2.2 Royalty Stacking. If COMPANY is required to pay running royalties on any patent rights not licensed hereunder ("Other Royalties") in order to make, use or sell a particular LICENSED PRODUCT or LICENSED SERVICE, COMPANY shall be entitled to credit half (50%) of such Other Royalties against the Earned Royalty due, but the Earned Royalties shall not be reduced below fifty percent (50%) of those that would otherwise be due JHU for that LICENSED PRODUCT or LICENSED SERVICE. + +Source: VIRTUOSO SURGICAL, INC., 1-A, 12/27/2019 + + + + + +12 + +May 3, 2016 2.3 Least Developed Countries. EARNED ROYALTY shall not be due and payable to JHU on NET REVENUES generated from: (i) LICENSED PRODUCTS sold in Least Developed Countries as defined by the United Nations Country Classification in the most recent United Nations' publication "Statistical Annex" ("LEAST DEVELOPED COUNTRIES"); or (ii) LICENSED PRODUCTS sold to the Public Sector providing LICENSED PRODUCTS at a Cost-Based Price in such Least Developed Countries, but only if COMPANY sells such LICENSED PRODUCTS at COMPANY's cost of production thereof. 3. MINIMUM ANNUAL ROYALTIES 3.1 The minimum annual royalties pursuant to the Agreement are: 1st anniversary of the EFFECTIVE DATE and each subsequent anniversary of the EFFECTIVE DATE during the term: Three-thousand dollars ($3000) 3.2 Earned Royalties payable for each calendar year are creditable on a non-cumulative basis against MINIMUM ANNUAL ROYALTIES for that year only. 4. LIQUIDITY EVENT 4.1 COMPANY will pay JHU a fee equal one percent (1%) of the Aggregate Consideration received by the COMPANY, or the total amount received by stockholders of COMPANY, upon the occurrence of a Liquidity Event. Such fee shall be paid after only the first to occur of either a Liquidation Event or an Initial Public Offering. The respective fees, when and if payable, shall be paid upon closing; except that if there are additional contingent amounts ("Trailing Consideration") payable upon the occurrence of subsequent events, then the Trailing Consideration shall be due and payable to JHU within thirty (30) days after receipt thereof by COMPANY. 4.2 For a Liquidity Event, the fee required under Section 4.1 of this Exhibit A above shall be payable to JHU by COMPANY in the same form as the proceeds paid or payable to either COMPANY or its security holders, whether in cash, securities or other property, and in the same proportion as such form of consideration is paid or payable to COMPANY or its security holders. Notwithstanding the foregoing, in the event the form of consideration paid or payable includes securities for which there is not an active public market, in lieu of paying that portion of the fee with such securities COMPANY will make a cash payment to JHU equal to the fair market value of such securities. The valuation of such securities shall be determined in accordance with the definition of "Aggregate Consideration" set forth below. 4.3 For an Initial Public Offering, the fee shall be payable in the form of cash, and shall be based upon the Pre Money Valuation. + +Source: VIRTUOSO SURGICAL, INC., 1-A, 12/27/2019 + + + + + +13 + +May 3, 2016 4.4 "Aggregate Consideration" means the amount equal to: 4.4.1 In the case of an Asset Sale, the sum of: (a) all cash, and the fair market value of all securities or other property transferred to COMPANY at the time of the transaction, less all current and long-term liabilities (but not contingent liabilities) of COMPANY that are not discharged or assumed by the buyer (or its affiliates) in connection with the Asset Sale; and (b) all cash, and the fair market value of all securities and other property for Trailing Consideration payable to COMPANY, when and if actually paid; or 4.4.2 In the case of a Merger or Stock Sale, the sum of: (a) all cash, and the fair market value of all securities and other property transferred to the stockholders of COMPANY (and any option holders or warrant holders) in return for their stock (or options or warrants) in COMPANY at the time of the transaction, and (b) all cash, and the fair market value of all securities and other property transferred to the stockholders of COMPANY (and any option holders or warrant holders) for Trailing Consideration payable to the holders of COMPANY's securities, when and if actually paid. 4.4.3 The valuation of any securities or other property shall be determined by reference to the operative transaction agreement for a respective Merger, Stock Sale or Asset Sale, provided that, if no such valuation is readily determinable from such operative transaction agreement, then for securities for which there is an active public market: (a) If traded on a securities exchange or the NASDAQ Stock Market, the value shall be deemed to be the average of the closing prices of the securities on such exchange or market over the thirty day (30) period ending three (3) days prior to the closing of such transaction; or (b) If actively traded over-the-counter, the value shall be deemed to be the average of the closing bid prices over the thirty day (30) period ending three (3) days prior to the closing of such transaction. (c) The method of valuation of securities subject to investment letters or other similar restrictions on free marketability shall take into account an appropriate discount from the market value as determined pursuant to clause (a) or (b) above so as to reflect the approximate fair market value thereof. (d) For securities for which there is no active public market, the value shall be the fair market value thereof as either: (i) determined in good faith by the Board of Directors of COMPANY; (ii) approved by JHU, such approval not to be unreasonably withheld; or (iii) determined by a third party appraiser appointed and paid for by COMPANY. + +Source: VIRTUOSO SURGICAL, INC., 1-A, 12/27/2019 + + + + + +14 + +May 3, 2016 4.5 "Pre-Money Valuation" means the amount equal to the product of: (i) the price per share of common stock sold in the Initial Public Offering, and (ii) the total number of outstanding shares of common stock of COMPANY immediately prior to the closing of the Initial Public Offering, determined on a fully diluted, as converted into common stock basis, giving effect to any stock split, stock dividend, stock combination, recapitalization or similar action impacting COMPANY's capitalization that occurs, or is deemed to occur, upon consummation of the Initial Public Offering. + +Source: VIRTUOSO SURGICAL, INC., 1-A, 12/27/2019 + + + + + +15 + +May 3, 2016 EXHIBIT B QUARTERLY SALES & ROYALTY REPORT FOR NON-EXCLUSIVE LICENSE AGREEMENT A29889 BETWEEN VIRTUOSO SURGICAL, INC. AND THE JOHNS HOPKINS UNIVERSITY EFFECTIVE DATE OF AGREEMENT _________________ FOR PERIOD OF _________ TO _________ TOTAL ROYALTIES DUE FOR THIS PERIOD$_________ + +PRODUCT ID NO. PRODUCT NAME + +*JHU REF NO. + +PT COMMERCIAL SALE DATE TOTAL NE SALES/SERVICES ROYALTY RATE AMOUNT DUE + +* Please provide the JHU Ref. C04873 This report format is to be used to report quarterly royalty statements to JHU. It should be placed on Company letterhead and accompany any royalty payments due for the reporting period. This report shall be submitted even if no sales are reported. + +Source: VIRTUOSO SURGICAL, INC., 1-A, 12/27/2019 + + + + + +16 + +May 3, 2016 EXHIBIT C JHU Ref Number Technology Title Inventors Country/# + +C04873 Active Cannulas for Bio-sensing and Surgical Intervention Allison M. Okamura Noah J. Cowan Robert James Webster, III Russell H. Taylor + +Japan 2008-541319 + +C04873 Active Cannulas for Bio-sensing and Surgical Intervention Allison M. Okamura Noah J. Cowan Robert James Webster, III Russell H. Taylor + +European Patent Office 06844376.1 + +C04873 Active Cannulas for Bio-sensing and Surgical Intervention Allison M. Okamura Noah J. Cowan Robert James Webster, III Russell H. Taylor + +Canada 2,630,061 + +C04873 Active Cannulas for Bio-sensing and Surgical Intervention Allison M. Okamura Noah J. Cowan Robert James Webster, III Russell H. Taylor + +Japan 2012-139088 5550682 + +C04873 Active Cannulas for Bio-sensing and Surgical Intervention Allison M. Okamura Noah J. Cowan Robert James Webster, III Russell H. Taylor + +Japan 2015-094824 + +C04873 Active Cannulas for Bio-sensing and Surgical Intervention Allison M. Okamura Noah J. Cowan Robert James Webster, III Russell H. Taylor + +Japan 2014-000372 + +C04873 Active Cannulas for Bio-sensing and Surgical Intervention Allison M. Okamura Noah J. Cowan Robert James Webster, III Russell H. Taylor + +China 200680050046.8 ZL 200680050046.8 + +C04873 Active Cannulas for Bio-sensing and Surgical Intervention Allison M. Okamura Noah J. Cowan Robert James Webster, III Russell H. Taylor + +United States 8,152,756 + +C04873 Active Cannulas for Bio-sensing and Surgical Intervention Allison M. Okamura Noah J. Cowan Robert James Webster, III Russell H. Taylor + +United States 8,715,226 + +Source: VIRTUOSO SURGICAL, INC., 1-A, 12/27/2019 \ No newline at end of file diff --git a/full_contract_txt/VitalibisInc_20180316_8-K_EX-10.2_11100168_EX-10.2_Hosting Agreement.txt b/full_contract_txt/VitalibisInc_20180316_8-K_EX-10.2_11100168_EX-10.2_Hosting Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..a225ade7ffc0f23cafed3cbe1f6ebc30a1237497 --- /dev/null +++ b/full_contract_txt/VitalibisInc_20180316_8-K_EX-10.2_11100168_EX-10.2_Hosting Agreement.txt @@ -0,0 +1,161 @@ +Exhibit 10.2 SERVICES AND HOSTING AGREEMENT THIS SERVICES AND HOSTING AGREEMENT (this "Agreement") is entered into by and between VITALIBIS INC a Nevada C having its principal place of business at 5348 Vegas Drive, Las Vegas, NV 89108 (hereinafter, -Licensee"), and VOTOCAST, Inc. a California corporation (dba, newkleus), having its principal place of business at PO Box 7302 Newport Beach, CA 92658 (hereinafter, "VOTOCAST). VOTOCAST and Licensee may also be referred to individually as a "Party" and collectively as the "Parties." WHEREAS, VOTOCAST provides certain hosting and technical services, including iOS and Android Mobile Applications, APIs, SDKs and Admin Module ("Services"); and WHEREAS, Licensee wishes to engage VOTOCAST, and VOTOCAST desires to be engaged by Licensee, to provide hosting and technical services on the terms and subject to the conditions set forth below. NOW. THEREFORE, in consideration of the promises, benefits, and covenants set forth herein, the Parties hereby agree as follows: 1. SERVICES 1.1 Grant of License. Under the terms and conditions of this Agreement, VOTOCAST hereby grants to Licensee a nonexclusive, nontransferable license, to access the Services and provide Licensee's users ("Licensee Users") with access to the Services. Licensee may not transfer the license granted in this Agreement unless such transfer is mutually agreed upon by the Parties in a writing signed by the Parties. VOTOCAST reserves all rights under any intellectual property rights in and to the Services not expressly granted in this Agreement. 1.2 Services. VOTOCAST shall provide the Services to Licensee as specifically set forth in Exhibit A, attached hereto. 1.3 Acceptance Testing. Prior to the payment of the License and Hosting Fees defined in Exhibit A, Licensee shall have the right to conduct acceptance testing ("Acceptance Testing") to verify that the Services satisfy the acceptance criteria set forth in Exhibit B ("Acceptance Criteria"). Acceptance Testing shall commence within five (5) business days from the date on which VOTOCAST notifies Licensee, in writing by U.S. mail or electronic mail that all implementation work has been completed and is ready for Acceptance Testing by Licensee. In the event that the Services do not conform to the Acceptance Criteria, Licensee shall give VOTOCAST written notice thereof. VOTOCAST shall make commercially reasonable efforts to correct any deficiencies that prevent the Services from conforming to the Acceptance Criteria. When the Services have successfully conformed to or satisfied the Acceptance Criteria, Licensee shall give VOTOCAST written notice by U.S. mail or electronic mail of acceptance ("Acceptance"). Acceptance by Licensee shall be automatically deemed to have occurred: (a) fifteen (15) business days after Licensee's receipt, if Licensee does not communicate to VOTOCAST any defects in the Services, or (b) if Licensee uses the Services in the normal and usual operation of Licensee's business prior to written Acceptance. Licensee shall have the right to terminate this Agreement if, in its sole discretion, the Services have not conformed to the Acceptance Criteria within thirty (30) days from the date of Acceptance Testing; provided however, VOTOCAST shall continue to be entitled to receive, and Licensee shall be obligated to pay to VOTOCAST, any and all amounts owing for Implementation Fees up to the date of termination. 1.4 Additional Services. VOTOCAST and Licensee agree that any additional services ("Additional Services") to be provided by VOTOCAST to Licensee shall be described in a statement of work ("SOW'). which shall be executed by authorized representatives of both Parties. The Parties agree that maintenance and support services as set forth in Sections 2.2 and 2.3, respectively, shall not constitute Additional Services arid shall not require an SOW. Each SOW will be deemed to incorporate the terms and conditions of this Agreement unless SOW explicitly states otherwise. Each SOW shall reference this Agreement, contain a description of the services to be provided and the associated fees and charges, and such additional terms and conditions as the Parties may desire to include. The Services and Additional Services shall be collectively referred to herein as the "Services?' The Agreement and any SOWs shall be collectively referred to herein as the "Agreement." The form of the SOW is outlined in Exhibit D. 1.5 Modification of the Services. VOTOCAST shall provide sixty (60) days prior written notice to Licensee of any proposed change or modification by VOTOCAST to the Services that will materially affect Licensee or Licensee Users' use of, or ability to use. the Services. + + 1 + +Source: VITALIBIS, INC., 8-K, 3/16/2018 + + + + + + + + 2. VOTOCAST'S OBLIGATIONS 2.1 Privacy. VOTOCAST shall use commercially reasonable efforts to protect the privacy of Licensee and Licensee Users and the content that is transmitted through the Services. VOTOCAST will only access and disclose information as necessary to comply with applicable laws and government orders or requests, to provide the Services, to operate or maintain its systems or to protect itself or Licensee Users. In all such instances. VOTOCAST shall provide prior written notice to Licensee of not less than three (3) business days prior to accessing or disclosing such information so that Licensee may have an opportunity to dispute or restrict such disclosure. Licensee acknowledges, however, that Licensee and Licensee Users' content will not pass through nor be stored in a segregated or separate physical location from which VOTOCAST'S other users content will be transmitted or stored. 2.2 Maintenance of System. VOTOCAST shall use commercially reasonable efforts to maintain or cause to be maintained the software and systems required for the operation of the Services. For avoidance of doubt. maintenance services are limited to Services and not custom code. 2.3 Support. VOTOCAST will identify a primary point of contact for support escalation, to be accessible pursuant to the Service Levels set forth in Exhibit C. 2.4 Availability of Services. Unless otherwise indicated on Exhibit A hereto, the Services will be accessible to Licensee and Licensee Users via the Wi-Fi, broadband, or cellular services twenty-four (24) hours a day, seven (7) days a week, except for scheduled maintenance and required repairs, and except for any loss or interruption of Services due to causes beyond the control of VOTOCAST or which are not reasonably foreseeable by VOTOCAST, including, but not limited to, interruption or failure of Wi-Fi, cellular, telecommunication or digital transmission links and Wi-Fi or cellular slow-downs or failures. VOTOCAST agrees to provide reasonable written notice to Licensee prior to any scheduled maintenance or required repairs that would cause the Services to be inaccessible. VOTOCAST does not provide Wi-Fi, broadband or cellular services to Licensee or Licensee Users. 2.5 Credit for Interruption of Services. In the event of any loss or interruption of Services solely due to VOTOCAST controlled activities. Licensee's sole and exclusive remedy and VOTOCAST'S sole and exclusive liability for any loss or interruption of Services shall be as follows. For loss or interruption of Services which is not due to scheduled maintenance, and is caused by VOTOCAST, and such loss or interruption of Services exceeds a continual period of one (I) hour per Exhibit C, Licensee shall receive a credit against future Services equal to one-thirtieth (1/30) of the monthly fees for the Services for each cumulative hour, up to a maximum total of the fees charged for Services for the applicable month of the affected Services. 2.6 Response Time. VOTOCAST shall have qualified personnel respond to outages, emergencies and requests for support from Licensee within the time frames set forth in the Service Levels set forth in Exhibit C. 3. LICENSEE'S OBLIGATIONS 3.1 Requirements. Licensee hereby agrees that it will offer, access, and make the Services available to Licensee Users pursuant to a terms of use agreement ("Terms of Use") adapted to local laws and languages no less protective of VOTOCAST'S rights, in all material respects, than the terms of this Agreement. Licensee agrees to obtain acceptance by provable electronic means from each Licensee User of the Terms of Use prior to such Licensee User's initial use of the Services. 3.2 Suspension or Termination. If VOTOCAST becomes aware of, or suspects any violation of, Licensee's Terms of Use by any Licensee User, VOTOCAST shall immediately notify Licensee and provide reasonable detail of such violation. The Parties shall use commercially reasonable efforts to promptly resolve the violation or suspected violation. If the matter cannot be promptly resolved, however, VOTOCAST reserves the right to suspend or terminate the provision of Services to the violating Licensee User as reasonably necessary to protect VOTOCAST'S interests. 3.3 Representations. Licensee shall not make any representations or warranties concerning the Services beyond those expressly made in writing by VOTOCAST, and shall not misrepresent the Services or the performance or functionality thereof. 3.4 Licensee Mobile Apps, APIs, SDKs. Licensee will provide to VOTOCAST the information, such as the domain name and URL for the Websites, that will be used for the Services and any other information of Licensee or a Licensee User necessary for VOTOCAST to perform the set- up and other initial services before Licensee or such Licensee User will have access to the Services. + + 2 + +Source: VITALIBIS, INC., 8-K, 3/16/2018 + + + + + + + + 3.5 Provision of Mobile Apps, APIs, SDKs. Licensee shall provide VOTOCAST with all logos, text, images. and other data of Licensee to be used to produce and support Licensee's Mobile Apps ("Licensee Content'). Licensee warrants and represents to VOTOCAST that Licensee has full power and authority to provide to VOTOCAST and to authorize VOTOCAST'S use of, the Licensee Content provided by Licensee for developing the Mobile Apps, and agrees to defend and indemnify VOTOCAST with respect to any claims arising from VOTOCAST'S or Licensee's use of such Licensee Content 3.6 Removal of Licensee Content. VOTOCAST shall not exclude or remove from the Mobile Apps or databases any Licensee Content or other content not supplied by VOTOCAST without the written consent of Licensee. Licensee is solely responsible for monitoring and exerting editorial control over the Mobile Apps, APIs, SDKs and databases. Nothing in this Agreement obligates VOTOCAST to monitor or exert editorial control over the Mobile Apps, APIs, SDKs or databases. 4. PRICING AND PAYMENT 4.1 Services Fees. Licensee shall pay VOTOCAST the Services Fees in accordance with the applicable fee and payment schedule set forth in Exhibit A hereto. VOTOCAST expressly reserves the right to change its rates charged hereunder for the Services during any Renewal Term (as detined herein) but agrees that rates may not increase by more than ten percent (10%) during any Renewal Term. If circumstances require VOTOCAST to raise its rates more than ten percent (10%) during any Renewal Term, VOTOCAST will provide Licensee cost related supporting documentation to justify the rate increase. VOTOCAST will give Licensee at least thirty (30) days prior written notice of any rate changes during any Renewal Term. 4.2 Payment. All fees are due and payable within thirty (30) days of the applicable VOTOCAST invoice. Any payments made later than the due date will accrue interest from the date due until the date paid at the rate of one percent (I%) per month on the amount due, or the maximum rate permitted by law, whichever is less. In addition, failure of Licensee to fully pay any fees within sixty (60) days after the applicable due date, shall be deemed a material breach of this Agreement, justifying suspension of the performance of Services by VOTOCAST, and will be sufficient cause for immediate termination of this Agreement by VOTOCAST. Any such suspension does not relieve Licensee from paying fees past due plus interest and in the event of collection enforcement, Licensee shall be liable for any costs associated with such collection, including, but not limited to, legal costs, attorneys' fees, court costs and collection agency fees. 4.3 Taxes. All amounts payable hereunder are exclusive of any sales, use, excise, property, value added or any other taxes associated with Licensee's or Licensee Users' use of the Services. Licensee is responsible for payment of any and all such taxes (excluding taxes based on VOTOCAST'S net income). 4.4 Licensee Revenues. Except with respect to the fees set forth in Exhibit A Licensee shall be authorized to keep all revenues derived from Licensee's exploitation of Services including. but not limited to advertising, sponsorships, subscriptions, and any other types of revenues. 5. OWNERSHIP AND PROPRIETARY RIGHTS 5.1 Proprietary Rights of Licensee. As between Licensee and VOTOCAST, Licensee Content shall remain the sole and exclusive property of Licensee, including, without limitation, all copyrights, trademarks, patents, trade secrets, and any other proprietary rights. Except as provided in this Section 6.1 nothing in this Agreement shall be construed to grant VOTOCAST any ownership rights in, or license to, the Licensee Content provided by Licensee or Licensee Users. Licensee hereby grants to VOTOCAST a non-exclusive, worldwide, royalty-free license during the term of this Agreement to edit, modify. adapt. translate, exhibit, publish, transmit, participate in the transfer of, reproduce, create derivative works from, distribute, perform, display and otherwise use Licensee Content as necessary to render Services to Licensee under this Agreement. 5.2 Proprietary Rights of VOTOCAST. THIS AGREEMENT IS NOT A WORK-FOR-HIRE AGREEMENT. All materials, including but not limited to any computer software (in object code and source code form), data, information or content developed or provided by VOTOCAST or its suppliers under this Agreement, and any know-how, methodologies, equipment. or processes used by VOTOCAST to provide the Services to Licensee and Licensee Users, including, without limitation, all copyrights, trademarks, patents, trade secrets, and any other proprietary rights inherent therein and appurtenant thereto (collectively, "VOTOCAST Materials") shall remain the sole and exclusive property of VOTOCAST or its suppliers. To the extent, if any, that ownership of the VOTOCAST Materials does not automatically vest in VOTOCAST by virtue of this Agreement or otherwise, Licensee hereby transfers and assigns to VOTOCAST all rights, title and interest which Licensee may have in and to the VOTOCAST Materials. Licensee acknowledges and agrees that VOTOCAST is in the business of hosting Mobile Apps and providing Mobile App services, and that VOTOCAST shall have the right to provide to third parties services which are the same or similar to the Services, and to use or otherwise exploit any VOTOCAST Materials in providing such services. + + 3 + +Source: VITALIBIS, INC., 8-K, 3/16/2018 + + + + + + + + 5.3 Feedback. With regard to any recommendations, ideas, contributions, corrections. enhancements, improvements, or the like relating to the Services that are created or originated by Licensee ("Feedback"), Licensee shall, prior to disclosure of such Feedback to VOTOCAST, provide written notice to VOTOCAST if Licensee considers the Feedback to be proprietary to Licensee. The Parties will then exercise commercially reasonable efforts to reach an agreement regarding ownership and use of the Feedback prior to disclosure by Licensee. Any Feedback submitted to VOTOCAST without Licensee providing such written notice, shall be deemed the sole property of VOTOCAST and the same, together with all copyrights, trade secrets, patent rights, and other intellectual property thereto shall be and hereby are assigned to VOTOCAST. 6. WARRANTIES 6.1 Licensee Warranties. Licensee warrants that: (a) it is duly organized, validly existing, and in good standing under the jurisdiction of its formation; (b) it has all requisite power and authority to execute this Agreement and to perform its obligations hereunder; (c) the execution, delivery, and performance of this Agreement has been duly authorized and this Agreement is a valid and binding contract enforceable in accordance with its terms; (d) VOTOCAST'S use of any data, information, or materials, including, without limitation, the Licensee Content and Licensee User information, provided by Licensee or Licensee Users does not and will not, to Licensee's knowledge, contain any content, materials, advertising or services that are materially inaccurate or that infringe on or violate any applicable law, regulation or right of a third party, including, without limitation, or any proprietary, contract, moral, or privacy right or any other third party right, and that Licensee and/or Licensee Users own the Licensee Content or otherwise has the right to place the Licensee Content on the Mobile Apps; and (e) Licensee has obtained any authorization(s) necessary. Should Licensee receive notice of a claim regarding the Mobile Apps, Licensee shall promptly provide VOTOCAST with written notice of such claim. The sole remedy for any breach of Section 6.1 (d) and (e) shall be the provisions in Section 7.1. 6.2 VOTOCAST'S Warranties. VOTOCAST warrants that: (a) it is a California corporation duly organized and validly existing under the jurisdiction of its formation; (b) it has all requisite power and authority to execute this Agreement and to perform its obligations hereunder; (c) the execution, delivery, and performance of this Agreement has been duly authorized and this Agreement is a valid and binding contract enforceable in accordance with its terms; (d) the Services, as set forth in the terms of this Agreement, will be performed in accordance with applicable industry standards; (e) Licensed Software—Warranty is not based on time, but is based on support and maintenance of the prior 2 versions (defined by update) and the current version. (For clarity, if the current version is 1.7. we would also warrant 1.6 and 1.5.); (f) Configuration and Customization Services — Licensee has a 15 business day period directly after the production release to report any defects related to the customization services; these defects are covered under the warrant and are corrected at "no cost" to the customer; and (g) Licensee's use of any VOTOCAST Materials provided on the Mobile Apps does not and v. ill not, to VOTOCAST'S knowledge, contain any content, materials, advertising or services that are materially inaccurate or that infringe on or violate any applicable law, regulation or right of a third party. including, without limitation, or any proprietary, contract, moral, or privacy right or any other third party right, and that VOTOCAST owns the content or otherwise has the right to place the content on the Mobile Apps. The sole remedy for any breach of Section 6.2 (e) shall be the provisions in Section 7.2. 6.3 Disclaimer of Warranty. EXCEPT FOR THE LIMITED WARRANTY SET FORTH IN SECTION 6.2 VOTOCAST MAKES NO WARRANTIES HEREUNDER, AND VOTOCAST EXPRESSLY DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR IMPLIED. INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR NON- INFRINGEMENT. 7. INDEMNIFICATION 7.1 Indemnification by Licensee. Licensee agrees to defend any action brought against VOTOCAST with respect to any claim, demand, cause of action, debt or liability, including reasonable outside attorneys' fees, to the extent that such action arises from the negligence or willful misconduct of Licensee or is based upon a claim that any of the Licensee Content to be provided by Licensee hereunder or other material on the Mobile App infringes or violates any rights of third parties, including without limitation, rights or publicity, rights of privacy, patents, copyrights, trademarks, trade secrets, and/or licenses. 7.2 Indenmification by VOTOCAST. VOTOCAST agrees to defend any action brought against Licensee with respect to any claim, demand, cause of action, debt or liability, including reasonable attorneys' fees, to the extent that such action arises from the negligence or willful misconduct of VOTOCAST or is based upon a claim that any of the VOTOCAST Materials provided by VOTOCAST on the Mobile Apps infringes or violates any rights of third parties, including without limitation, rights or publicity, rights of privacy, patents, copyrights, trademarks, trade secrets, and/or licenses. + + 4 + +Source: VITALIBIS, INC., 8-K, 3/16/2018 + + + + + + + + 7.3 Notice. In claiming any indemnification hereunder, the indemnified Party shall promptly provide the indemnifying Party with written notice of any claim which the indemnified Party believes falls within the scope of the foregoing Sections. The indemnified Party may, at its own expense, assist in the defense if it so chooses, provided that the indemnifying Party shall control such defense and all negotiations relative to the settlement of any such claim and further provided that any settlement intended to bind the indemnified Party shall not be final without the indemnified Party's written consent, which shall not be unreasonably withheld or delayed. 8. LIMITATION OF LIABILITY 8.1 Exclusion of Certain Damages. VOTOCAST SHALL HAVE NO LIABILITY FOR UNAUTHORIZED ACCESS TO, OR ALTERATION, THEFT OR DESTRUCTION OF, THE MOBILE APPS OR LICENSEE'S OR LICENSEE USER'S DATA FILES, PROGRAMS OR INFORMATION THROUGH ACCIDENT, FRAUDULENT MEANS OR DEVICES. VOTOCAST SHALL HAVE NO LIABILITY WITH RESPECT TO VOTOCAST'S OBLIGATIONS UNDER THIS AGREEMENT OR OTHERWISE FOR ANY CONSEQUENTIAL, EXEMPLARY, SPECIAL. INCIDENTAL, OR PUNITIVE DAMAGES OF ANY KIND (INCLUDING, WITHOUT LIMITATION, LOSS OF PROFITS, REVENUE. BUSINESS, OR DATA), EVEN IF VOTOCAST HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. 8.2 Limitation. TO THE MAXIMUM EXTENT PERMITTED BY LAW, VOTOCAST'S AGGREGATE LIABILITY ARISING FROM OR RELATING TO THIS AGREEMENT OR THE USE OR INABILITY TO USE THE SERVICES SHALL BE LIMITED TO THE AMOUNT OF ALL FEES ACTUALLY RECEIVED BY VOTOCAST FROM LICENSEE UNDER THIS AGREEMENT. THIS LIMITATION APPLIES TO ALL CAUSES OF ACTION IN THE AGGREGATE, INCLUDING, WITHOUT LIMITATION, TO BREACH OF CONTRACT, BREACH OF WARRANTY, NEGLIGENCE. STRICT LIABILITY, MISREPRESENTATIONS, AND OTHER TORTS. 9. CONFIDENTIALITY 9.1 Confidential Information. Each Party agrees that during the course of this Agreement, information that is confidential or proprietary may be disclosed to the other Party, including, but not limited to, software, algorithms, technical processes and procedures, product designs, sales, cost and other unpublished financial information, product and business plans, revenues, advertising relationships, projections, and marketing data, and any other information that the disclosing Party ("Discloser") desires to protect against unrestricted disclosure by the receiving Party ("Recipient') that: (a) if disclosed in tangible or electronic form, is marked as "confidential," (b) if disclosed orally or visually, is designated orally as "confidential" at the time of disclosure or within a reasonable period of time thereafter, or (c) that the Recipient knows or should reasonably know is confidential or proprietary. The Recipient will maintain the confidentiality of the Discloser's Confidential Information with at least the same degree of care that it uses to protect its own confidential information, but no less than a reasonable degree of care. The Recipient will not disclose any of the Discloser's Confidential Information to any employees or third parties except for (I) the employees of the Recipient who have a need to know and who have agreed in writing to maintain the confidentiality of such information, and (2) Recipient's third party contractors who have agreed in writing to maintain the confidentiality of such information. These confidentiality obligations shall survive for three (3) years after expiration or termination of this Agreement; provided, that the expiration of such obligations shall not affect any other restrictions on the Recipient, including without limitation, any restrictions under patent or copyright laws. 9.2 Exceptions. Confidential Information will not include any information that is: (a) rightfully in the public domain without any breach by the Recipient, but only from the date it entered the public domain. (b) rightfully received by Recipient from a third party without any obligation of confidentiality, (c) rightfully known to the Recipient without any obligation of confidentiality prior to its receipt from the Discloser, (d) independently developed by the Recipient's employees without use of the Discloser's Confidential Information. (e) made generally available to third parties by the Discloser without restrictions on disclosure, (0 required, on advice of counsel, to be disclosed under applicable laws, rules, or regulations, provided that Recipient gives reasonable prior notice to Discloser of such duty to disclose, or (vii) technical feedback from Licensee related to the Services. 10. TERM AND TERMINATION 10.1 Term. This Agreement shall commence as of the Effective Date and shall continue in effect for one (I) year, unless earlier terminated as expressly provided in Sections 1.3. 10.1. or 10.2 of this Agreement (the *Initial Term"). This Agreement shall automatically renew beyond the Initial Term for successive one (I) year terms (each, a "Renewal Term"), unless a Party provides the other with written notice of termination at least one hundred eighty (180) days prior to the expiration of the Initial Term or the then-current Renewal Term. Regardless of the term, Licensee can terminate Agreement with at least one hundred eighty (180) days written notice with no further obligation. + + 5 + +Source: VITALIBIS, INC., 8-K, 3/16/2018 + + + + + + + + 10.2 Termination for Breach. Notwithstanding the foregoing, either Party may terminate this Agreement by giving written notice to the other Party if the other Party is in material breach of any obligation under this Agreement, ''which breach is not cured within thirty (30) days after receipt of written notice of such breach. In addition, either Party may terminate this Agreement effective immediately upon written notice to the other Party if the other Party: (a) terminates or suspends its business operations, (b) becomes the subject of any bankruptcy or insolvency proceeding, (c) becomes insolvent or unable to pay its obligations as they accrue, or (d) becomes subject to direct control by a trustee, receiver, or similar authority. 10.3 Effect of Termination. Upon termination of this Agreement. VOTOCAST shall immediately cease providing all Services, Licensee and Licensees Users shall discontinue use of the Services. and VOTOCAST shall delete all stored contents of Licensee and Licensees Users (after first delivering a copy of such stored content to Licensee). However, VOTOCAST shall continue to be entitled to receive, and the Licensee shall continue to pay to VOTOCAST, the amounts owing to VOTOCAST up to the date of termination pursuant to Section 4. Termination of this Agreement shall not act as a waiver of any breach of this Agreement or as a release of either Party from any liability for breach of such Party's obligations under this Agreement. Regardless of any other provision of this Agreement, VOTOCAST shall not be liable by reason of termination of this Agreement for compensation, reimbursement, or damages on account of the loss of prospective profits on anticipated sales, or on account of expenditures, investments, leases or other commitments made in connection with Licensee's business or otherwise, excluding any amounts paid by Licensee to VOTOCAST pursuant to the terms of this Agreement. 10.4 Survival. Sections 4.2. 4.3. 5. 6. 7, 8. 9. 10.3. 10.4, 11, and any other provision of this Agreement which by its nature or express terms extends beyond the duration of this Agreement, shall survive any termination of this Agreement. 11. OTHER PROVISIONS 11.1 Independent Parties. Nothing contained in this Agreement shall be construed as creating a joint venture, partnership, agent or employment relationship between VOTOCAST and Licensee. 11.2 Waiver. The failure of either Party to enforce any provision of this Agreement shall not be deemed a waiver of that provision or of the right of the Party to thereafter enforce that or any other provision. 11.3 Severability. If any term or provision of this Agreement should be declared invalid by a court of competent jurisdiction or by operation of law, the remaining terms and provisions of this Agreement shall be unimpaired, and the invalid term or provision shall be replaced by such valid term or provision as comes closest to the intention underlying the invalid term or provision. 11.4 Notices. All notices and other communications required or permitted under this Agreement shall be in writing and shall be: (a) delivered personally, (b) sent by confirmed email, (c) sent by commercial overnight courier with written verification of receipt, or (d) sent by registered or certified mail, return receipt requested, postage paid, to the address of the Party to be noticed as set forth herein, or such other address as such Party last provided to the other by written notice. VITA LI BI S. INC. Attn: Thomas Raack 5348 Vegas Drive Las Vegas, NV 89108 Phone: 702-944-9620 Email: traack@vitalibis.com + +VOTOCAST, Inc. (dba, newkleus) Attn: Steve Raack PO Box 7302 Newport Beach, CA 92658 Phone: 310-259-1248 Email: steve@VOTOCAST.com 11.5 Integration. This Agreement and its exhibits constitute the entire agreement between the Parties with respect to the subject matter hereof and supersede all prior proposals, negotiations, conversations, discussions and agreements between the Panics concerning the subject matter hereof. + + 6 + +Source: VITALIBIS, INC., 8-K, 3/16/2018 + + + + + + + + 11.6 Assignment. Neither Party may assign this Agreement or otherwise transfer in any way any of the rights and obligations arising out of this Agreement without the prior written consent of the other Party. Notwithstanding the foregoing, (1) either Party may assign this Agreement to any entity who acquires (by merger, acquisition, or otherwise) all or substantially all of the business assets of such Party applicable to the subject matter of this Agreement; and (2) VOTOCAST may subcontract any portion of the Services to a third party contractor without the prior consent of Licensee, provided that VOTOCAST remains fully responsible to Licensee for the delivery of such Services as set forth in this Agreement. Any attempted assignment or delegation without such prior written consent, except as expressly set forth herein, will be void, or at the non-assigning Party's sole discretion, may be treated as fully binding upon and in force and effect against any such successor or assign. 11.7 Publicity. VOTOCAST may only use the name of and identify Licensee as a VOTOCAST client. in advertising, publicity, or similar materials distributed or displayed to prospective clients upon the written approval (by email or other written means) of Licensee, which approval shall not be unreasonably withheld or delayed. 11.8 Force Majeure. Except for the payment of fees by Licensee, neither Party shall be responsible for any delay or failure to perform obligations specified in this Agreement due to causes beyond the Party's reasonable control. including, without limitation, acts of God, strikes, lockouts, riots, acts of war, governmental regulations, shortage of equipment, materials or supplies, fire, power failure. earthquakes, severe weather, floods or other natural disaster; provided, however, it is understood that this Section is intended only to suspend and not discharge a Party's obligations under this Agreement and that when the causes of the delay or failure are removed or alleviated, the affected Party shall resume performance of its obligations hereunder. 11.9 Amendments. No amendment or modification of any provision of this Agreement shall be effective unless the same shall be in writing and signed by both Parties. 11.10 Governing Law. This Agreement shall be governed by the laws of the State of California without giving effect to conflict or choice of law principles. The Parties hereto agree that the exclusive jurisdiction and venue for any action under this Agreement shall be the state and federal courts sitting in California, and each of the Parties hereby agrees and submits itself to the exclusive jurisdiction and venue of such courts for such purpose. 11.11 Freedom of Action. This Agreement is non-exclusive. The Parties acknowledge that each Party is free to enter into agreements that are similar to this Agreement with any corporation or other entity; including competitors of the other Party, provided the confidentiality provisions of this Agreement are not breached and the intellectual property rights of the other Party are not misappropriated or infringed. 11.12 Injunctive Relief. The Parties acknowledge that any breach by the other Party of any of the covenants or provisions contained in this Agreement may give rise to irreparable injury to non-breaching Party inadequately compensable in damages alone. Accordingly, the non- breaching Party may seek preliminary and permanent injunctive relief against the breach or threatened breach of said covenants or provisions. Such relief shall be in addition to any other legal or equitable remedies that may be available to the non-breaching Party. 11.13 Laws and Regulations. Licensee and VOTOCAST agree to comply with applicable laws, rules, and regulations, including any Internet regulations or policies and applicable export laws, in its performance under this Agreement. 11.14 Non-Solicitation. Each Party agrees that during the term of this Agreement and for a period of twelve (12) consecutive months thereafter they shall not, directly, solicit, engage, compensate, induce in any way or hire for employment or other representation, any officer, employee, consultant or other representative employed or retained by the other Party or assist any other person or entity to do any of the foregoing. If any such action occurs and results in an employee accepting employment with the other Party, the Party with whom the employee accepts employment agrees to pay to the other Party as liquidated damages, an amount equal to two times that particular individual's annual salary and bonus. + + 7 + +Source: VITALIBIS, INC., 8-K, 3/16/2018 + + + + + + + + 11.15 Execution and Authority. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument. A facsimile or imaged copy of this Agreement, including the facsimile or imaged signatures of the Parties' representatives thereon, shall for all purposes be deemed equivalent to an original. 11.16 Effective Date. The Effective Date of this Agreement shall be the later of the dates shown by the signatures below. IN WITNESS WHEREOF. the Parties have caused this Agreement to be executed below by their respective duly authorized representatives. VITABILIS, INC. VOTOCAST, INC. ("Votocast") By: /s/ Markus Frick By: /s/ Steven P. Raack Name: Markus Frick Name: Steven P. Raack Title: Director Title: CEO Date: 3-14-18 Date: 3-7-18 + + 8 + +Source: VITALIBIS, INC., 8-K, 3/16/2018 + + + + + + + + EXHIBIT A SERVICES AND FEES Services Fees: 1. Implementation Fees: Implementation Fees for Branded Mobile Apps are shown in the table below: Service Fee Branded Mobile Apps $0 Admin Database $0 Website Integration (APIs) $0 Existing Mobile App Integration (APIs and/or SDKs) SO These are one-time fees, paid in advance. No work will begin until these fees have been received. 2. License and Hosting Fees License and Hosting Fees are as shown in the table below: # of Monthly Video Views Fee Up to 9,999 SO Between 10.000 — 24,999 $1.000 Between 25.000 — 49,999 $1.500 Over 50,000 $2,000 License and Hosting Fees will be billed after each month, based on the Total Number of Videos Views for that month. For tracking and validation purposes, the Total Number of Video Views will be shown within the Admin Database as a cumulative metric. 3. Scone of Services: - Branded iOS Mobile App - Branded Android Mobile App - Application APIs - Application SDKs - Admin Database Unless specifically noted othenwise, the scope of all services provided by VOTOCAST is limited to the usage and ongoing support of the Services only, and does not include analysis, operation, integration, development, additional training or modification of other custom or OEM packaged software applications, hardware or systems. Such services can be requested by Licensee and negotiated under a separate SOW. PRICES ARE STRICTLY CONFIDENTIAL. NO PART OF THIS DOCUMENT, ESPECIALLY PRICING INFORMATION, MAY BE DISCLOSED IN ANY MANNER TO A THIRD PARTY WITHOUT THE PRIOR WRITTEN CONSENT OF VOTOCAST. + + 9 + +Source: VITALIBIS, INC., 8-K, 3/16/2018 + + + + + + + + EXHIBIT B ACCEPTANCE CRITERIA Acceptance criteria shall be as follows: · Licensee Content was applied to the Mobile Apps appropriately · A user can create a new account and login using an existing account · A user can upload a video, vote for a video, comment on a video, share a video, report a video, follow another user, follow a campaign, and set up their user profile · An admin user can login to the Admin Module, create campaigns, delete comments, delete videos, export user information and monitor key metrics Upon Acceptance approval by Licensee per Section 13, VOTOCAST will assist in publishing the Mobile Apps on the AppStore and on GooglePlay. + + 10 + +Source: VITALIBIS, INC., 8-K, 3/16/2018 + + + + + + + + EXHIBIT C SERVICE LEVELS VOTOCAST shall provide support to Licensee, in English, through e-mail (support@VOTOCAST.com), five (5) days a week, eight hours a day (9:00 to 5:00 PST). Monday to Friday, excluding federal and banking holidays. Licensee shall be solely responsible for support to Licensee Users. Licensee agrees that VOTOCAST is responsible only for providing the Services, and is not responsible for providing any services or performing any tasks not specifically set forth in Exhibit A. unless such services or tasks are mutually agreed upon in writing by authorized representatives of the Parties. Severity Response Time Severity 1 Every Two Hours (24x7) Severity 2 Every 8 Hours (9AM-5PM PST) Severity 3 Every 48 Hours (9A1V1-5PM PST) Severity 4 Every 72 Hours (9AM-5PM PST) "Response Time" means the time beginning when Licensee informs VOTOCAST of a Support incident and ending when the Support incident is either resolved or a reasonable fix is implemented. Support Incident Severity Definitions and Responses: Classifications. By mutual agreement (following the definitions noted here below), Support incidents will be classified by type as a Severity I, 2, 3 or 4. Severity 1 Definition - Critical business impact, including Licensee being unable to use one or more of the features resulting in a critical impact on operations. This condition requires immediate resolution. Severity 1 Condition - Issue has a critical business impact and / or a crippling effect on the Licensee's business. Examples include the following: · The production system is down · Critical features are unusable · Data is not accessible · Company has repeated production outages that are disrupting the success of their business NOTE: A critical situation does not automatically imply Severity 1. The associated problem's business impact sets the Severity. Severity 2 Definition — To the extent not a Severity 1, significant business impact, including when one of the critical features is usable but is severely limited. Severity 2 Conditions. Examples include the following: · Non-production system data is inaccessible · Degraded performance having serious negative impact on business · A database/application error has occurred, severely hampering business operability Severity 3 Definition — To the extent not a Severity I or a Severity 2, some business impact, including when one of the critical features is usable but with less significant features (e.g., not critical to operations) being unavailable. + + 11 + +Source: VITALIBIS, INC., 8-K, 3/16/2018 + + + + + + + + Severity 3 Conditions. Examples include the following: · Aesthetic formatting inconsistencies · Degraded performance such as unusually slow application response causing user dissatisfaction and reported complaints · Acceptable (by Licensee) workarounds available for incidents initially classified as Severity I or Severity 2 Severity 4 Definition — To the extent not a Severity I, Severity 2 or Severity 3, minimal business impact, including when the problem results in little impact on operations or a reasonable circumvention to the problem has been implemented. Severity 4 Conditions. Examples include the following: · General question such as "how-to" · Issue with little or no impact on business · Documentation issues · Issue is essentially resolved but remains open for Licensee confirmation + + 12 + +Source: VITALIBIS, INC., 8-K, 3/16/2018 + + + + + + + + EXHIBIT D FORM OF SOW STATEMENT OF WORK #XXXX TO SERVICES AND HOSTING AGREEMENT THIS STATEMENT OF WORK # XA2X TO SERVICES AND HOSTING AGREEMENT (this "Statement of Work") is made and entered into as of (the "SOW Effective Date"), by and between VITALIBIS INC. a Nevada C Corporation having its principal place of business at 5348 Vegas Drive, Las Vegas NV 89108 (hereinafter, "Licensee"), and VOTOCAST, Inc., a California corporation (dba, newkleus), having its principal place of business at PO Box 7302 Newport Beach, CA 92658 (hereinafter, "VOTOCAST"). VOTOCAST and Licensee may also be referred to individually as a "Party" and collectively as the 'Parties." RECITALS WHEREAS, Licensee and VOTOCAST have entered into a Services and Hosting Agreement (the "Agreement') dated March 7t h, 2018 (the "Effective Date"). WHEREAS, pursuant to Section 1.4 of the Agreement, the Parties now desire to enter into this Statement of Work describing Professional Services to be performed by VOTOCAST and the terms and conditions applicable to the performance of such Professional Services. AGREEMENT NOW THEREFORE, in consideration of the promises and mutual covenants herein contained, the undersigned hereby agree as follows: 1. Statement of Work. This Statement of Work sets forth the scope of Professional Services to be rendered by VOTOCAST pursuant to the Agreement. The Agreement is hereby expressly supplemented by the terms and conditions contained in this Statement of Work and, except as expressly provided herein, the terms and conditions of the Agreement shall apply to the SOW Services (as defined below). Any capitalized terms used in this Statement of Work which are not defined herein shall have the meanings ascribed to such terms in the Agreement. Should a conflict arise between a term or provision of this Statement of Work and a term or provision of the Agreement, (i) every effort shall be made to interpret and construe the Agreement and this Statement of Work in an inclusive and consistent manncr, and (ii) if such consistent interpretation is impossible, then the terms of the Agreement shall prevail unless specifically provided otherwise in this Statement of Work. 2. Services. VOTOCAST agrees to use reasonable efforts to perform the Professional Services as set forth in Schedule A attached hereto (the "SOW Services"). 3. Payment. 3.1 Services Fee. As payment for the SOW Services, Licensee shall pay VOTOCAST TBD — as analysis and negotiations are necessary (the "SOW Services Fee"). Licensee shall pay or promptly reimburse VOTOCAST for any out-of-pocket expenses, including without limitation, travel and travel-related expenses, incurred by VOTOCAST in connection with the performance of the SOW Services. 3.2 Payment Terms. The SOW Services Fee will be invoiced twice monthly by VOTOCAST and invoiced in even increments between SOW execution and scheduled production deployment. Payment for the SOW Services Fee shall be in U.S. dollars and is due and payable within fifteen (15) days of the applicable VOTOCAST invoice. Except as othenwise provided herein, all payments due and payable under this Statement of Work shall be made in accordance with the payment terms set forth in Section 4 of the Agreement. + + 13 + +Source: VITALIBIS, INC., 8-K, 3/16/2018 + + + + + + + + 4. Change Orders. If Licensee desires to extend the SOW Services in any way, the Parties agree to negotiate in good faith and enter into a separate change order that sets forth the terms and conditions (including any additional consideration) applicable to such additional services as set forth in Schedule B attached hereto (the "Change Order"). Neither Party shall have any obligation with respect to any services not specifically described in the Agreement, this Statement of Work, or a Change Order unless and until such has been agreed to in a writing executed by the authorized representatives of both Parties. The following are authorized to sign or provide email approval Change Orders in behalf of Licensee: Name: Thomas Raack Title: CFO Secretary IN WITNESS WHEREOF, VOTOCAST and Licensee have executed this Statement of Work effective as of the SOW Effective Date. VITABILIS, INC. VOTOCAST, INC. "Votocast") By: ______________________ By: ______________________ Name: ____________________ Name: ____________________ Title: _____________________ Title: _____________________ Date: _______ Date: _______ + +Source: VITALIBIS, INC., 8-K, 3/16/2018 \ No newline at end of file diff --git a/full_contract_txt/VnueInc_20150914_8-K_EX-10.1_9259571_EX-10.1_Promotion Agreement.txt b/full_contract_txt/VnueInc_20150914_8-K_EX-10.1_9259571_EX-10.1_Promotion Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..2dd61206d6bfdc2ccd8561dc3142f0916fb67063 --- /dev/null +++ b/full_contract_txt/VnueInc_20150914_8-K_EX-10.1_9259571_EX-10.1_Promotion Agreement.txt @@ -0,0 +1,29 @@ +Exhibit 10.1 PROMOTION AGREEMENT This Promotion Agreement ("Agreement") is entered into effective September 10, 2015 between BookingEntertainment.com ("Promoter") of 275 Madison Avenue, 6t h Floor, New York, NY 10016 and VNUE, Inc., ("VNUE"), a Nevada corporation quoted on the OTCMarkets, with offices at 104 West 29th Street 11th Floor, New York, NY 10001. WHEREAS, Promoter has substantial business experience in the music industry, and since 1996 has built thousands of relationships with artists, entertainment venues and other industry professionals, while delivering turn-key fully produced live concerts worldwide for almost 20 years; and WHEREAS, VNUE believes Promoter can provide valuable Promotion services related to rapidly securing contracts with multiple venues with which Promoter has existing relationships. NOW, THEREFORE, in consideration of the representations, covenants and agreements hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, VNUE and the Promoter agree as follows: Independent Contractor. Nothing contained herein or any document executed in connection herewith, shall be construed to create an employer-employee, partnership or joint venture relationship between VNUE and Promoter. Promoter is an independent contractor and not an officer, director, affiliate, insider, employee or agent of VNUE or any of its subsidiaries or affiliates. Promoter has no authority to, and will not, enter into contracts, make representations, warranties or commitments purporting to be binding on VNUE or otherwise act on VNUE's behalf and shall not take any action that might lead third parties to believe Promoter has the right to do so. The consideration set forth in Section 3 shall be the sole consideration due Promoter for the services rendered hereunder. It is understood that VNUE will not withhold any amounts for payment of taxes from the compensation of Promoter hereunder. Section 1. Promotion Services. Promoter to provide the following services to VNUE in accordance with the terms and conditions set forth in this agreement: A. VNUE hereby engages the Promoter as an Independent Contractor to secure contracts for VNUE with Thirty (30) music venues. B. The Promoter will provide certain skills, expertise, experience and abilities developed as global leader in the music and entertainment business over two decades. C. The Promoter will consult and work with the Directors and Officers of VNUE concerning matters relating to business development and other matters deemed necessary to perform the Promotion Services. Section 2. Promoter's Fee. For providing services as set forth herein, VNUE will compensate Promoter i) Two Thousand Five Hundred Dollars ($2,500.00) for each One (1) Year contract Promoter secures per venue and Five Thousand Dollars ($5,000,00) for each Two (2) Year contract Promoter secures per venue, with payment due to Promoter within Thirty (30) Days from the date on which each such contract is countersigned; and ii) through the issuance of VNUE common stock as set forth below, and for the purposes of Rule 144 such shares of stock shall be deemed to have fully earned by Promoter upon the date of each issuance of such stock certificates by VStock Transfer: Three Million (3,000,000) shares of VNUE common stock shall be awarded to Promoter for performing Promotion Services as follows: + + + +Source: VNUE, INC., 8-K, 9/14/2015 + + + + + + + + For every Five (5) music venues that sign a contract with VNUE, Six Hundred Thousand (600,000) shares of VNUE common stock shall be awarded to Promoter; and If Ten (10) music venues sign a contract with VNUE before January 16, 2016, Promoter will receive an additional bonus of Three Hundred Thousand (300,000) shares of VNUE common stock. Section 3. Expenses. VNUE shall reimburse Promoter for expenses incurred by Promoter while performing the duties herein. Promoter shall deliver to VNUE an itemized accounting of expenses incurred on a weekly basis, and VNUE shall reimburse Promoter within Thirty (30) Days of receipt of such accounting. Section 4. Ability to Perform Services/Third-Party Trade Secrets. Promoter affirms that Promoter is not restricted from providing services in this Agreement due to any agreement with any other person or entity. Promoter will not disclose to VNUE or use in its work any trade secrets, inventions or confidential information of any other person or entity which Promoter is not lawfully entitled to disclose or use. Section 5. Place of Work. Promoter may perform the Promotion Services at such locations as Promoter may choose. Section 6. Term. This Agreement shall commence on September 10, 2015 and shall continue for One (1) Year (the "Term"). At any time prior to the end of the Term, the Parties may agree in writing to extend the Agreement for successive One (1) Year periods (the "Renewal Terms") under the same conditions set forth herein. Section 7. Liability. The work to be performed under this Agreement will be performed entirely at Promoter's risk, and Promoter assumes all responsibility for the condition of equipment and facilities used in the performance of this agreement. Promoter agrees to indemnify VNUE for any and all liability or loss arising in any way out of the actions of Promoter taken in the performance of this Agreement. VNUE agrees to indemnify and hold Promoter harmless for any and all liability or loss arising in any way out of the actions, during the term of this Agreement, of VNUE officers, directors, employees, agents or third parties not under the control of Promoter. Section 8. Competent Work. All work will be done in a competent fashion in accordance with applicable standards of the profession. Promoter represents, warrants, and covenants the following: A. Promoter will disclose to VNUE any and all material facts and circumstances, which may affect its ability to perform its undertaking herein. B. Promoter is an independent contractor acting in the limited capacity as an independent contractor for VNUE. C. Promoter will not disseminate or share with third parties any material information about VNUE not already contained in a Company report filed with the Securities and Exchange Commission, as Promoter acknowledges that such third parties might try to act on such material non-public information by engaging in "insider trading" to the detriment of VNUE. + + + +Source: VNUE, INC., 8-K, 9/14/2015 + + + + + + + + Section 9. Legal Right. Promoter covenants and warrants that Promoter has the unlimited legal right to enter into this Agreement and to perform in accordance with its terms without violating the rights of others or any applicable law and that he has not and shall not become a party to any other agreement of any kind which conflicts with this Agreement. Promoter shall indemnify and hold VNUE harmless from any and all damages, claims and expenses (including, but not limited to attorneys' fees and costs) arising out of or resulting from any claim that this Agreement violates any such other agreements. Breach of this Section shall operate to terminate this Agreement automatically without notice otherwise required by this Agreement. Section 10. Notice. Any notice or communication permitted or required by this Agreement shall be deemed effective when personally delivered, or sent by certified or registered mail, properly addressed to VNUE or Promoter at the addresses set forth above. Section 11. Enforceability. It is agreed between the parties that there are no other agreements or understandings between them relating to the subject matter of this agreement. This agreement supersedes all prior agreements, oral or written, between the parties and is intended as a complete and exclusive statement of the agreement between the parties. If any provision in this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions will continue in full force without being impaired or invalidated in any way. Section 12. Non-exclusion. It is understood that VNUE does not agree to use BookingEntertainment.com exclusively as its Promoter, and that Promoter shall not be held liable for the actions of third parties which may also be providing the same or similar services during the term of this Agreement. Likewise, Promoter is free to contract for services to be performed for other public and private companies while under contract with VNUE, subject to the terms of this Agreement. Section 13. Miscellaneous. This Agreement shall inure to the benefit of the parties hereto and their respective successors, heirs and assigns. In case any provision of this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions of the Agreement shall not in any way be affected or impaired thereby. This Agreement shall be governed by and construed in accordance with the laws of the State of Nevada without giving effect to choice of law doctrine. The party in violation of any of the provision agrees to pay to the injured party all court fees, attorney fees, charges and expenses as are deemed fair by the court. Each party hereto consents to personal jurisdiction in Nevada and voluntarily submits to its jurisdiction in any action or proceeding with respect to this Agreement. Venue for any action arising hereunder shall lie in the state and federal courts located Nevada. Section 14. Review by Counsel. Promoter acknowledges that Promoter has had the opportunity to have this Agreement reviewed by legal counsel of Promoter's choice. Section 15. Execution. This Agreement may be executed via facsimile and in counterparts, which together shall constitute the single Agreement. Section 16. SEC Reporting and Press Release. Promoter acknowledges that VNUE is an SEC reporting public company and that a Form 8-K will be filed announcing the Promotion Agreement, which shall include a copy of this Agreement, and that a Press Release summarizing the Agreement and Promoter's background may be issued as well. Promoter agrees to make no additional public statements or press releases related to VNUE or to this Agreement without VNUE's prior written consent. WHEREFORE, the parties have executed this Promotion Agreement as of the date written above. VNUE, INC. BOOKINGENTERTAINMENT.COM By: /s/ By: /s/ Matthew Carona, CEO Steve Einzig, President + + + +Source: VNUE, INC., 8-K, 9/14/2015 \ No newline at end of file diff --git a/full_contract_txt/WARNERCHILCOTTPLC_12_31_2003-EX-4.36-DEVELOPMENT AGREEMENT.txt b/full_contract_txt/WARNERCHILCOTTPLC_12_31_2003-EX-4.36-DEVELOPMENT AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..faf659682cbe29a77699e0fbf6908abb1dd6598f --- /dev/null +++ b/full_contract_txt/WARNERCHILCOTTPLC_12_31_2003-EX-4.36-DEVELOPMENT AGREEMENT.txt @@ -0,0 +1,265 @@ +Exhibit 4.36 + + DEVELOPMENT AGREEMENT + + between + +LEO PHARMA A/S of Industriparken 55, DK-2750 Ballerup, Denmark (hereinafter referred to as "LEO") --- + + and + +GALEN (CHEMICALS) LIMITED of 4 Adelaide Street, Dun Laoghaire, Co. Dublin, Ireland (hereinafter referred to as "GALEN"). + +Capitalized terms not otherwise defined herein shall have the meanings set forth in Article I of this Agreement. + +WHEREAS Bristol-Myers Squibb Company (BMS) has entered into a co-promotion agreement with GALEN regarding Dovonex(R) Product in the Territory (the "Co-promotion Agreement"). + +WHEREAS GALEN and BMS have entered into an option agreement (the "Option Agreement") in which GALEN has options to acquire all of BMS's rights and to assume BMS's obligations (the "Option") under the agreement dated September 28, 1989 between BMS (as successor to E.R. Squibb & Sons Inc.) and LEO, as amended July 6, 1992 and April 8, 1993 and as of the date hereof and the Product Supply Agreement between Bristol-Myers Squibb Company and LEO dated as of April 8, 1993 (each as may be amended or supplemented by the parties in the future, collectively, the "BMS Agreements"); and + +WHEREAS BMS has given up its rights under the BMS Agreements to a pharmaceutical preparation containing both the Compound and Betamethasone Dipropionate in an ointment (the "Combination Product") as of the date hereof; and + +WHEREAS LEO has developed and owns proprietary information regarding the Combination Product, and has filed a patent application for the Combination Product; and + +WHEREAS GALEN has marketing expertise within the dermatological field; and + +WHEREAS LEO and GALEN have entered into a License and Supply Agreement dated as of even date herewith between LEO and GALEN regarding the Combination Product (the "Dovobet(R) Agreement") and subject to the coming into force of that Agreement under its terms, LEO has appointed GALEN as its exclusive distributor in the Territory of the Combination Product expected to be marketed under the trademark Dovobet(R); and + +WHEREAS GALEN and LEO have entered into a License and Supply Agreement dated as of even date herewith pursuant to which GALEN will be the exclusive distributor of Dovonex(R) Product in the Territory subsequent to the exercise of the Option by GALEN and the acquisition of BMS's rights and assumption of BMS's obligations under the BMS Agreements by GALEN (the "Dovonex(R) Agreement"); and + +WHEREAS GALEN, if the FDA mandates an additional pivotal phase III clinical trial for the Combination Product, will financially support LEO; + +NOW THEREFORE the Parties hereby agree as follows: + +I - DEFINITIONS + +1.1 "AB rated" means, with respect to any Product (as defined in the Dovonex(R) Agreement), a pharmaceutical product which is an AB-rated equivalent to the Product, as defined in the 22nd edition of Approved Drug Products with Therapeutic Equivalence Evaluations issued by the United States Department of Health and Human Services. + +1.2 "Action or Proceeding" means any action, suit, proceeding, arbitration or Governmental or Regulatory Authority action, notification, investigation or audit. + +1.3 "Affiliate" means, with respect to any Person, any Person which, directly or indirectly, controls, is controlled by, or is under common control with, the specified Person. For purposes of this definition, the term "control" as applied to any Person, means the possession, directly or indirectly, of at least fifty-one per cent (51%) of the power to direct or cause the direction of the management of that Person, whether&sbsp;through ownership of voting securities or otherwise. + +1.4 "Agreement" means this Development Agreement between LEO and GALEN. + +1.5 "Compound" means the compound Calcipotriene, a vitamin D analogue with the formula C27H4003. + + 2 + +1.6 "Dovonex(R) Product" means the Compound marketed in the Territory under the trademark Dovonex(R). + +1.7 "FDA" means the United States Food and Drug Administration. + +1.8 "GALEN Information" means any information (including, but not limited to, technical improvements, financial and marketing information) developed, made and/or generated by GALEN relating to and made as a + + + + + + result of its work with the Combination Product. + +1.9 "Governmental or Regulatory Authority" means any court, tribunal, arbitrator, agency, commission, official or other instrumentality of the United States or any relevant country, state, province, county, city or other political subdivision. + +1.10 "IND" means the Investigational New Drug Application, as defined by the United States Federal Food, Drug and Cosmetic Act and applicable regulations promulgated thereunder as amended from time to time, filed in the United States, for the Combination Product. + +1.11 "Laws" means all laws, statutes, rules, regulations, ordinances and other pronouncements having the effect of law of any relevant Governmental or Regulatory Authority. + +1.12 "LEO Logo Guidelines" means the guidelines for use of the LEO name and the Assyrian Lion logo attached to the Dovobet(R) Agreement. + +1.13 "LEO Product Branding" means the Trademark, the LEO name, the Assyrian Lion, the LEO Logo Guidelines, the LEO Product Concept and any domain names or websites related to the Combination Product in the Territory. + +1.14 "LEO Product Concept" means the global design concept for packaging and promotional materials related to the Combination Product developed by LEO. + +1.15 "Losses" means any and all damages, fines, fees, penalties, deficiencies, losses and expenses (including without limitation interest, court costs, reasonable fees of attorneys, accountants and other experts or other expenses of litigation or other proceedings or of any claim, default or assessment). + +1.16 "Master Agreement" means the Master Agreement dated as of even date herewith between LEO and GALEN. + +1.17 "NDA" means a New Drug Application filed with the FDA for the Combination Product, requesting permission to place a drug on the market in accordance with 21 C.F.R. Part 314 and all supplements filed pursuant to the requirements of the FDA, including all documents, data and other + + 3 + + information concerning the Combination Product which are necessary for FDA approval to market a product in the United States. + +1.18 "Party" means GALEN or LEO, as the case may be, and "Parties" means GALEN and LEO. + +1.19 "Person" means any individual, firm, corporation, partnership, limited liability company, trust, joint venture, Governmental or Regulatory Authority or other entity or organization. + +1.20 "Technical Information" means all information in the possession of LEO and/or its Affiliates, and any information transferred from BMS to GALEN, regarding preclinical, chemical-pharmaceutical and clinical data or other scientific information (including specifications, master batch records, analytical methods including validation protocol and the drug master file), or secret know-how about the Combination Product including, but not limited to marketing know-how and show-how or uses for the Combination Product in the possession of LEO regarding the Combination Product necessary for GALEN to fulfil its obligations under the Agreement. + +1.21 "Territory" means the fifty (50) states of the United States of America, the District of Columbia, its territories and current possessions. + +1.22 "Trademark" means the trademark Dovobet(R) or any other trademark LEO may select for the Combination Product. + +II - WORK BY LEO + +2.1 LEO has performed any and all preclinical, clinical and other studies necessary to obtain marketing approval for the Combination Product in Europe and has borne all costs and expenses associated therewith. Furthermore, LEO will perform any and all additional studies, required specifically by the FDA and will bear all costs and expenses associated therewith except for the obligation of GALEN described in Article 3.1. + + A development plan is attached as Appendix I + +2.2 LEO is responsible for obtaining approval of the NDA in the United States. + +III - OBLIGATIONS OF GALEN + +3.1 If the FDA mandates that a second pivotal phase III clinical trial for the Combination Product is required for registration in the United States, GALEN agrees to pay 50% of the reasonable costs for + + 4 + + + + + + said study, such costs to be invoiced by LEO on a quarterly basis. The payments are non-refundable. + +3.2 GALEN will provide reasonable assistance to LEO in its endeavours to obtain approval of the NDA in the United States. + +3.3 Within thirty (30) days after the date hereof, GALEN will pay to LEO US$5,000,000 (five million United States dollars) to reimburse LEO for a portion of the actual development costs that have been incurred by LEO. This payment is non-refundable. + +IV - INDEMNIFICATION + +4.1 LEO shall indemnify and hold GALEN and its agents, directors, officers and employees and representatives harmless from and against any and all Losses which they may at any time incur by reason of any Action or Proceeding brought by any Governmental or Regulatory Authority or other third party against GALEN arising out of or resulting from (a) any misrepresentation, breach of warranty or non-fulfilment of or failure to perform any agreement or covenant made by LEO in this Agreement, (b) the use of the Combination Product in any clinical trial, or (c) any other negligent act or omission of LEO. + +4.2 GALEN shall indemnify and hold LEO and its agents, directors, officers and employees and representatives harmless from and against any and all Losses which they may at any time incur by reason of any Action or Proceeding brought by any Governmental or Regulatory Authority or other third party against LEO arising out of or resulting from (a) any misrepresentation, breach of warranty or non-fulfilment of or failure to perform any agreement or covenant made by GALEN in this Agreement, or (b) any other negligent act or omission of GALEN. + +4.3 The obligation of the Parties in this Article IV shall survive the expiration or earlier termination of this Agreement to the extent permitted by applicable Law. + +4.4 In any case under this Article IV, where GALEN or LEO is to indemnify the other, the control of the defence of any Action or Proceeding and negotiations for settlement and compromise thereof, shall repose with the indemnifying Party, except that nothing in this paragraph shall be construed to relieve either Party hereto of the obligation to give the other all reasonable co-operation, assistance and authority necessary to permit full and complete defence of any Action or Proceeding; provided, however, that no Party will settle any of such claims without consent of the other Party; however, such consent shall not be unreasonably withheld. Both Parties shall, if desired, be allowed to participate, at their own expense, directly or through a representative e.g. their product liability insurers, in any Action or Proceeding. + + 5 + +V - CONFIDENTIALITY + +5.1 All Technical Information disclosed to GALEN and all GALEN Information disclosed to LEO shall be considered confidential regardless of designation, and shall not be disclosed by the receiving Party to any third party or used outside the scope of this Agreement without the prior written consent of the disclosing Party except to a duly authorised Governmental or Regulatory Authority in connection with the registration or regulation of the Combination Product or if otherwise required by Law. In the event that a Party is asked to disclose any confidential information to a Governmental or Regulatory Authority, such Party will - if possible - notify the nondisclosing Party sufficiently prior to making such disclosure so as to allow the nondisclosing Party adequate time to take whatever action it may deem to be appropriate to protect the confidentiality of the information. The obligation not to disclose Technical Information and GALEN Information shall not apply to (a) any information that it now or later becomes publicly available through no fault of the receiver, its officers, employees or agents; (b) any information that the receiver obtains from a third party not under a confidentiality obligation to the discloser with respect to such information; (c) any information that the receiver already has in its possession as indicated in its written records; and (d) any information that is independently developed or created by the receiver. + +5.2 Each Party shall keep the terms of this Agreement confidential and shall not disclose the same&bbsp;to any third party other than (i) by agreement of the Parties hereto, or (ii) as required by Law or stock exchange regulation or an order of a competent Governmental or Regulatory Authority; provided that prior to disclosure pursuant to (ii) above, the disclosing Party shall - if possible - notify the nondisclosing Party sufficiently prior to making such disclosure so as to allow the nondisclosing Party adequate time to take whatever action it may deem to be appropriate to protect the confidentiality of the information. + +5.3 Neither Party shall make any press release or other public announcement or other disclosure to third Parties relating to this Agreement without the prior consent of the other Party, which consent shall not be unreasonably withheld, except where required by applicable Law; provided that prior to disclosure, the disclosing Party shall notify the nondisclosing Party sufficiently prior to making such disclosure so as to allow the nondisclosing Party adequate time to take whatever action it may deem to be appropriate to protect the confidentiality of the information. + + + + + +5.4 This Article V shall survive the termination of this Agreement for a period of ten (10) years, provided, however, that following the termination of this Agreement LEO shall be free to use all data, information or other confidential information relating to the Combination Product and following termination of this Agreement, GALEN shall be free to use all GALEN Information. + + 6 + +VI - COMPLIANCE WITH LAWS + +Both LEO and GALEN shall observe all applicable Laws in effect in fulfilling their obligations under this Agreement. + +VII - TERM AND TERMINATION - CONSEQUENCES OF TERMINATION + +7.1 This Agreement will be effective when signed by both Parties provided that the Co-promotion Agreement and the Option Agreement have been signed and have come into force and provided also that said agreements do not prohibit GALEN from entering into the Dovonex(R) Agreement and the Dovobet(R) Agreement. + +7.2 This Agreement shall terminate if (a) the Dovonex(R) Agreement is terminated by LEO pursuant to Articles 15.4, 15.7 or 15.8 thereof or (b) the Dovonex(R) Agreement is terminated by LEO pursuant to Article 15.2 thereof in the event that GALEN has not exercised the Option for reasons not including that (i) the aggregate turnover of the Products in the U.S. during the period 1 July 2004 - 30 June 2005, as measured by IMSHealth, is equal to or less than US$50,000,000 (fifty million dollars) or (ii) on or prior to August 1, 2005 a generic product that is AB rated to any Product (as defined in the Dovonex(R) Agreement) is approved by the FDA and has become commercially available, provided, for purposes of this subclause (ii), that GALEN has not provided assistance to the holder of the registration for the AB rated product to obtain such registration, or (c) the Dovobet(R) Agreement comes into force and GALEN has fulfilled its obligations under this Agreement, unless prior terminated in accordance with any of the provisions hereof. + +7.3 In the event that one of the Parties hereto materially defaults or breaches any of the provisions of this Agreement, the other Party shall have the right to terminate this Agreement upon sixty (60) days' written notice, provided, however, that if the Party in default, within the sixty day period referred to, remedies the said default or breach, the Agreement shall continue in full force and effect. + +7.4 In the event of termination of this Agreement under the provisions of this Article VII GALEN shall not be relieved of the duty and obligations to pay in full, any payments due and unpaid at the effective date of such termination. In such event GALEN shall: + + (a) return any and all Technical Information and any other information relating to the Combination Product provided to GALEN and shall make no further use thereof; + + (b) cease to make use of the Trademark, the other LEO Product Branding and all other information related to the Combination Product, and all rights in the Trademark, the other + + 7 + + LEO Product Branding and all other information relating to the Combination Product will promptly revert to LEO and be transferred to LEO; + + (c) if GALEN is then the owner of any patents specifically related to the Combination Product, GALEN shall transfer such ownership to LEO, except for LEO being in breach in which case GALEN will sell said patents and LEO will purchase said patents at a price equal to the expenses GALEN has borne in relation to developing, establishing and maintaining said patent rights; + + (d) if GALEN is then the owner of any patents, which in part relates to the Combination Product then LEO, its Affiliates and partners shall have a royalty free license to such patents for the term of the patents; + + (e) if GALEN is then the owner of any data related to the Combination Product, including, but not limited to, any data related to any study performed under this Agreement such data shall be transferred to LEO. At such time, LEO shall have the right, but not the obligation, to have assigned to LEO any third party clinical agreement then pending; + + (f) GALEN shall transfer the NDA, the IND and any other relevant registrations related to the Combination Product held by GALEN, if any, to LEO or its designee. + + In the event that LEO terminates this Agreement pursuant to Article 7.3 or Article 7.2(a) or (b), the transfers required under Article 7.4 (a), (b), (c), (e) and (f) shall be made free of charge to LEO. Otherwise, the costs of transfers shall be split evenly between the parties. + +VIII - ASSIGNABILITY + + + + + +This Agreement shall be binding upon, and shall inure to the benefit of successors of the Parties hereto, or to any assignee of all of the goodwill and entire business assets of a Party hereto relating to pharmaceuticals, but shall not otherwise be assignable without the prior written consent of the other Party. + +For the avoidance of doubt, LEO agrees and acknowledges that GALEN may perform any or all of its obligations under this agreement through its U.S. Affiliates, Warner Chilcott, Inc.. + +IX - AMENDMENT OF AGREEMENT; WAIVER; SEVERABILITY + +9.1 This Agreement shall not be changed or modified orally. + +9.2 Any term or condition of this Agreement may be waived at any time by the Party that is entitled to the benefit thereof, but no such waiver shall be effective unless set forth in a written instrument + + 8 + + duly executed by or on behalf of the Party waiving such term or condition. No waiver by either Party of any term or condition of this Agreement, in any one or more instances, shall be deemed to be or construed as a waiver of the same or any other term or condition of this Agreement on any future occasion. All remedies, either under this Agreement or by Law or otherwise afforded, will be cumulative and not alternative. + +9.3 If any provision of this Agreement is held to be illegal, invalid or unenforceable under any applicable present or future Law, and if the rights or obligations of any Party hereto under this Agreement will not be materially and adversely affected thereby, (a) such provision will be fully severable, (b) this Agreement will be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part hereof, (c) the remaining provisions of this Agreement will remain in full force and effect and will not be affected by the illegal, invalid or unenforceable provision or by its severance herefrom and (d) in lieu of such illegal, invalid or unenforceable provision, the Parties will add as a part of this Agreement, a legal, valid and enforceable provision as similar in terms to such illegal, invalid or unenforceable provision as may be possible. + +X - STATUS OF PRIOR AGREEMENTS + +This Agreement together with the Master Agreement, the Dovonex(R) Agreement and the Dovobet(R) Agreement constitute the entire agreement between the Parties hereto with respect to the subject matter and supersede all previous agreements, whether written or oral. + +XI - FORCE MAJEURE + +The occurrence of an event which materially interferes with the ability of a Party to perform its obligations or duties hereunder which is not within the reasonable control of the Party affected, not due to malfeasance, and which could not with the exercise of due diligence have been avoided ("Force Majeure") including, but not limited to, fire, accident, labour difficulty, strike, riot, civil commotion, act of God, delay or errors by shipping companies or change in Law shall not excuse such Party from the performance of its obligations or duties under this Agreement, but shall merely suspend such performance during the continuation of Force Majeure. The Party prevented from performing its obligations or duties because of Force Majeure shall promptly notify the other Party hereto (the "Other Party") of the occurrence and particulars of such Force Majeure and shall provide the Other Party, from time to time, with its best estimate of the duration of such Force Majeure and with notice of the termination thereof. The Party so affected shall use its best efforts to avoid or remove such causes of non-performance. Upon termination of Force Majeure, the performance of any suspended obligation or duty shall promptly recommence. Neither Party shall be liable to the Other Party for any direct, indirect, consequential, incidental, special, punitive or exemplary damages arising out of or relating to the + + 9 + +suspension or termination of any of its obligations or duties under this Agreement by reason of the occurrence of Force Majeure. In the event that Force Majeure has occurred and is continuing for a period of at least six (6) months, the Other Party shall have the right to terminate this Agreement upon thirty (30) days' notice. + +XII - PARTNERSHIP/AGENCY; THIRD PARTIES + +12.1 None of the provisions of this Agreement shall be deemed to constitute the relationship of partnership or agency between the Parties, and neither Party shall have any authority to bind the other Party in any way except as provided in this Agreement. + +12.2 The Parties agree that no third party which is not a Party to this Agreement is intended to benefit from or shall have any right to enforce any provision of this Agreement. + +XIII - GOVERNING LAW + +THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO THE CONFLICTS OF LAW PRINCIPLES OF SUCH STATE OTHER THAN SECTIONS 5-1401 OF THE NEW YORK GENERAL + + + + + +OBLIGATIONS LAW. + +Each Party irrevocably submits to the exclusive jurisdiction of (a) the Supreme Court of the State of New York, New York County, and (b) the United States District Court for the Southern District of New York, for the purposes of any suit, action or other proceeding arising out of this Agreement or any transaction contemplated hereby or thereby. Each Party agrees to commence any such action, suit or proceeding either in the United States District Court for the Southern District of New York or if such suit, action or other proceeding may not be brought in such court for jurisdictional reasons, in the Supreme Court of the State of New York, New York County. Each Party further agrees that service of any process, summons, notice or document by registered mail to such Party's respective address set forth above shall be effective service of process for any action, suit or proceeding in New York with respect to any matters to which it has submitted to jurisdiction in this Article XIII. Each Party irrevocably and unconditionally waives any objection to the laying of venue of any action, suit or proceeding arising out of this Agreement or the transactions contemplated hereby and thereby in (i) the Supreme Court of the State of New York, New York County or (ii) the United States District Court for the Southern District of New York, and hereby and thereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum. + + 10 + +Each Party hereto hereby waives to the fullest extent permitted by applicable Law, any right it may have to a trial by jury in respect to any litigation directly or indirectly arising out of, under or in connection with this Agreement. + +XIV - NOTICES + +Any notice hereunder shall be deemed to be sufficiently given if sent by registered mail or by fax followed by mail to: + +In the case of GALEN: + + GALEN (CHEMICALS) LIMITED 4 Adelaide Street Dun Laoghaire, Co. Dublin Ireland + + Fax: + 353 1 214 8477 + +With a copy to: + + Galen Holdings PLC Att. Chief Executive Officer 100 Enterprise Drive, Suite 280 Rockaway, New Jersey 07866 USA + + Fax: + 1 973 442 3362 + +In the case of LEO: + + LEO PHARMA A/S + + Att. CEO, President Industriparken 55 DK-2750 Ballerup Denmark + + Fax: + 45 44 64 15 80 + +or such other address as the receiver shall have last furnished to the sender. + + 11 + +IN WITNESS WHEREOF the Parties hereto have caused this Agreement to be duly executed in duplicate by their authorised officers as of the date last below written. + +Rockaway, April ____, 2003 Ballerup, April ____, 2003 + +GALEN (CHEMICALS) LIMITED LEO Pharma A/S + +------------------------------ ---------------------------- Name: Roger M. Boissonneault Name: Title: Director Title: \ No newline at end of file diff --git a/full_contract_txt/WARNINGMANAGEMENTSERVICESINC_12_10_1999-EX-10-ENDORSEMENT AGREEMENT.txt b/full_contract_txt/WARNINGMANAGEMENTSERVICESINC_12_10_1999-EX-10-ENDORSEMENT AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..e098cb67a4ac2bbde4fcbc1394260a3746a98666 --- /dev/null +++ b/full_contract_txt/WARNINGMANAGEMENTSERVICESINC_12_10_1999-EX-10-ENDORSEMENT AGREEMENT.txt @@ -0,0 +1,161 @@ +EXHIBIT 10.14 + + ENDORSEMENT AGREEMENT + + THIS ENDORSEMENT AGREEMENT (this "Agreement"), made and entered into as of May 31, 1999, by and between FAMOUS FIXINS, INC., 250 West 57th Street, Suite 2501, New York, New York 10107 ("Company") and PEY DIRT, INC. ("Pey Dirt"). + + WITNESSETH + + WHEREAS, Company desires to obtain the right to use the name, likeness and endorsement of Peyton Manning (hereinafter called "Manning") in connection with the advertisement, promotion and sale of Company's "Products" (hereinafter defined); and + + WHEREAS, Manning has granted such rights to Pey Dirt together with the right to sublicense such rights. + + NOW, THEREFORE, for and in consideration of the premises and of the mutual promises and conditions herein contained, the parties do hereby agree as follows: + + 1. Definitions. As used herein, the following terms shall be defined as set forth below: + + (a) "Contract Period" shall mean that period of time commencing as of May 31, 1999 and concluding May 31, 2000. + + (b) "Contract Territory" shall mean the states of Indianapolis and Tennessee and Company's e-commerce site. + + (c) "Contract Year Quarter" shall mean each 3 consecutive month period occurring during any Contract Year ("Contract Year" meaning any twelve month period herein commencing as of June 1) (so that, by way of example, the first Contract Year Quarter of the first Contract Year commences as of June 1, 1999, the second commences on September 1, 1999, etc.). + + (d) "Endorsed Products" shall mean all Products of Company which have the Manning Identification (defined below) highlighted as a part thereof (in the Products' name or otherwise) or which are shipped in containers or packages bearing the Manning Identification. + + (e) "Manning Identification" shall mean any words or symbols or photographic or graphic representations or combinations thereof which identify Manning such as, for example, the name and likeness of Manning. + + (f) "Premium Program" shall mean any traffic builder, third party tie-in program or other program involving the use of a premium and shall include any program primarily designed to attract the consumer to purchase a product or service other than Endorsed Products themselves. + + (g) "Products" shall mean cold breakfast cereals. + + 2. Grant of Endorsement Rights. (a) Pey Dirt grants to Company the exclusive right and license to use Manning Identification within the Contract Territory during the Contract Period in connection with the advertisement and promotion by Company of Products in television, radio, print and point of purchase. Pey Dirt also grants to Company, subject to all of the terms and conditions herein, the non-exclusive right to use the Manning Identification in connection with certain merchandise that may be featured on the back panel of the Endorsed Products packaging, said merchandise to be subject to Pey Dirt's sole and exclusive discretion and approval. Notwithstanding anything herein to the contrary, it is specifically agreed that the Manning Identification cannot be used, in whole or in part, in connection with (i) Premium Programs and/or (ii) any multi-media use except for Company's e- commerce site. Pey Dirt expressly agrees that the right to use Manning Identification will not be granted to anyone other than Company for use within the Contract Territory during the Contract Period in connection with the advertisement, promotion and sale of Products. Anything herein to the contrary notwithstanding, Company shall not have the right to distribute photographs of Manning which are larger than 5" x 7". + + (b) Company agrees that during the Contract Period it will use its best efforts actively and aggressively to (i) promote the sale of all Endorsed Products in the Contract Territory, and (ii) prevent the sale of any Endorsed Products outside the Contract Territory. Failure of Company to comply with the provisions of this Section 2(b) shall entitle Pey Dirt to revoke this license immediately (notwithstanding any other provision in this Agreement to the contrary). + + (c) Pey Dirt has the right to terminate this Agreement immediately if Company's Endorsed Products are not being distributed in the Contract Territory to a significant number of stores by October 1, 1999. + + 3. Approvals. Company agrees that no use whatsoever of Manning Identification nor any item used in connection with Manning Identification (including, without limitation, advertising) will be made hereunder unless + + + + + +and until the same has been approved by Pey Dirt. Pey Dirt agrees that any material, advertising or otherwise, submitted for approval as provided herein may be deemed by Company to have been approved hereunder if the same is not disapproved in writing within fourteen (14) days after receipt thereof. Pey Dirt agrees that any material submitted hereunder will not be unreasonably disapproved and, if it is disapproved, that Company will be advised of the specific grounds therefor. Company agrees to protect, indemnify and save harmless Pey Dirt and Manning, or either of them, from and against any and + + -2- + +all expenses, damages, claims, suits, actions, judgments and costs whatsoever, arising out of, or in any way connected with, any advertising material furnished by, or on behalf of, Company. + + 4. Remuneration. (a) Within thirty (30) days following the conclusion of each Contract Year Quarter, Company shall deliver to Pey Dirt an itemized statement setting forth the total shipments of Endorsed Products during said Contract Year Quarter and, at the same time, shall pay to Pey Dirt a royalty with respect to such shipments as hereinafter provided. Such royalties shall be based upon the actual invoice price of such shipments, exclusive only of shipping charges and sales taxes, and shall be at the rate of 8.5% of the total of said invoice prices with a minimum invoice price of $2.50 per box. + + (b) In addition to the royalty payments set forth above, Company agrees to grant Pey Dirt an option to purchase an aggregate of 50,000 shares of Company's publicly traded and registered stock (the "Shares") at an exercise price of $0.15 per share (the "Option"), which Option shall vest and become unrestricted when the SEC declares Company's registration statement effective (anticipated to be no later than November 30, 1999) and shall be exercisable until June 30, 2004. As further inducement to Pey Dirt to enter into this Agreement, Company and Pey Dirt will enter into that certain Option Agreement dated as of the date of this Agreement, which shall govern all aspects of the Option. + + (c) Further, Pey Dirt will be entitled to fifty percent (50%) of all gross profits (i.e., gross revenues less only Company's actual out-of-pocket costs of obtaining the raw merchandise) generated from merchandise related to the Endorsed Products and/or the Manning Identification, said merchandise to be advertised exclusively on the back panel of each box of Endorsed Products. Except for the advertising of merchandise related to the Endorsed Products and/or the Manning Identification, no other use of the back panel of each box of Endorsed Products is permitted without Pey Dirt's prior written consent. It is agreed that all such merchandise must be mutually approved in all respects by the parties hereto, including, without limitation, the style, design and cost thereof. + + (d) In addition to and separate from any other remuneration hereunder, if Company uses any performance or service of Manning hereunder in any way that is subject to the jurisdiction of any applicable artists' union, guild or other organization (including, without limitation, SAG and AFTRA), either during or after the Contract Period, Company shall pay directly to such organization all minimum payments or fees (for benefit plans or otherwise) required to be made with respect to Manning's performance or services. + + (e) If, at any time during the Contract Period, Company shall enter into any agreement (the terms of what are significantly the same as the terms hereof) in connection with the production and sale of Company's products using the name, likeness, photographic representation or signature of any other National Football League quarterback (active or retired), which agreement provides for the payment to such individual of remuneration in excess of that set forth herein, then Company agrees it will immediately so notify Pey Dirt + + -3- + +and, at the same time, shall, retroactive to the effective date of such other agreement, increase the rate of remuneration paid to Pey Dirt hereunder up to the highest then-current rate paid by Company to any such National Football League quarterback (active or retired) for a regional endorsement deal. + + 5. Notices and Submissions. Pey Dirt hereby designates International Merchandising Corporation, IMG Center, Suite 100, 1360 East 9th Street, Cleveland, Ohio 44114, Attn.: Peter Johnson, as Pey Dirt's authorized agent for all purposes hereunder. All notices, submissions and/or requests for approval to be made, obtained or delivered by Company to Pey Dirt pursuant to this Agreement shall be delivered to said address free of all charges such as, for example, shipping charges and customs charges. In the event that any such charges are paid by Pey Dirt or by Pey Dirt's authorized agent, Company agrees to make prompt reimbursement. + + 6. Payments; Books and Records. (a) Pey Dirt may elect to have + + + + + +payments made by check, wire transfer or bank transfer. Unless such election has been made in writing, all payments shall be made by check drawn to the order of "Pey Dirt, Inc." and delivered to IMG, Suite 100, 1360 East 9th Street, Cleveland, Ohio 44114, Attn.: Peter Johnson. Past due payments hereunder shall bear interest at the rate of (i) one and one-half percent (1-1/2%) per month, or (ii) the maximum interest rate permissible under law, whichever is less. + + (b) Company agrees that it will keep accurate and complete records and books of account showing all Endorsed Products shipped by it and the price thereof. Pey Dirt, or its representatives, shall, upon two weeks' written notice, have the right at all reasonable times (prior to the expiration of two (2) years after the termination of the Contract Period) to inspect and make copies of the books and records of Company insofar as they shall relate to the computation of royalties to be paid to Pey Dirt hereunder and the shipment of Endorsed Products pursuant to this Agreement. In the event that any such inspections show an underreporting and underpayment in excess of five percent (5%) for any twelve (12) month period, then Company shall pay the cost of such examination. + + 7. Labels/Packaging. (a) It is understood that each of the Endorsed Products shipped by Company or its container or the packaging therefor shall have affixed thereto a label or other permanent identification which includes Manning Identification. + + (b) It is hereby agreed that the back panel of the Endorsed Products' packaging will feature ad copy or offers as determined by Pey Dirt and its agent, subject to Company's right to reasonably reject such materials only if such materials are clearly offensive to a majority of the populace. Any and all revenues generated by such ad copy or offers shall be disbursed in accordance with Section 4(c) above. Further, the side panel of the Endorsed Products packaging shall feature a charity or other entity of Manning's sole choice. All packaging costs shall be Company's sole responsibility. + + -4- + + 8. Trademarks. Should Company, at any time or times during the Contract Period, desire to register a trademark or trademarks which include Manning Identification, or which relate in any manner to Manning, and/or to register Company as a user thereof, Pey Dirt shall execute any and all documents which the parties reasonably believe to be necessary or desirable for registration or protection of such trademark or trademarks in the name of Manning. All costs related to any such trademarks shall be borne by Company, and ownership of any such trademarks shall rest solely in the name of Pey Dirt or its designee. Upon registration of any such trademark, Pey Dirt shall grant to Company a license for the use of such registered trademark on or in connection with the advertisement, promotion and sale of Endorsed Products, which license shall be coextensive and coterminous with the rights granted thereunder with respect to Manning Identification and shall require no increase in the payments set forth but shall contain such additional provisions as Pey Dirt reasonably believes are necessary for the protection of such trademark registered in the name of Manning or Pey Dirt. Company agrees that it will not file, during the Contract Period or thereafter, any application for trademark registration or otherwise obtain or attempt to obtain ownership of any trademark or trade name within the Contract Territory or in any other country of the world which consists of Manning Identification or any mark, design or logo intended to make reference to Manning or to identify products endorsed by Manning. In the event that, prior to the Contract Period, Company has filed one or more applications for registration of any such trademark, or otherwise has obtained any rights to such trademark, Company agrees to cause such applications and/or trademarks to be assigned and transferred to Pey Dirt forthwith. + + 9. Products for the Use of Pey Dirt. During the Contract Period, Company shall supply Pey Dirt and/or its agent with such amounts of Endorsed Products as Pey Dirt and/or its agent may reasonably request. Company agrees to pay all charges in connection with the delivery of Endorsed Products to Pey Dirt and/or Pey Dirt's agent, including shipping charges, air freight charges and customs charges. Company agrees to reimburse Pey Dirt's authorized agent for all such expenses incurred by it in connection with the transfer of Endorsed Products to Pey Dirt and/or Pey Dirt's agent. + + 10. Services of Manning. If Company desires to utilize the services of Manning as a model in connection with photographs or drawings for advertising or for personal appearances, Pey Dirt agrees, at the reasonable request of Company and upon adequate notice, to provide the services of Manning at a time and place reasonably convenient to the schedule of Manning. Company agrees that it will reimburse Pey Dirt for reasonable travel (including first class air fare), lodging, ground transportation and meal expenses incurred by Manning and one traveling companion designated by Manning. Company further agrees it will reimburse Pey Dirt's authorized agent for reasonable travel (including air fare), lodging and meal expenses incurred in providing one representative to accompany Manning. Company understands that if services are requested hereunder, such services may be coordinated with similar services for others entitled to the use of Manning Identification in other connections. Company further understands that such services may be required not more than once during the Contract Period for up to one (1) hour. In the event that Company elects to use the services of Manning in connection with television + + -5- + + + + + +advertising, Company shall make all required union scale and union pension and welfare payments. Company further understands that failure to utilize services of Manning pursuant to this section shall not result in any reduction in payments to Pey Dirt hereunder, nor may the obligation to provide services be carried past the Contract Period. The obligations of Pey Dirt to provide the services of Manning hereunder are subject to the condition that payments to Pey Dirt are current and up to date. + + 11. Force Majeure. If, at any time during this Agreement, Pey Dirt or Manning is prevented from or hampered or interrupted or interfered with in any manner whatever in fully performing its/his duties hereunder, by reason of any present or future statute, law, ordinance, regulation, order, judgment or decree, whether legislative, executive or judicial (whether or not valid), act of God, earthquake, fire, flood, epidemic, accident, explosion, casualty, lockout, boycott, strike, labor controversy (including but not limited to threat of lockout, boycott or strike), riot, civil disturbance, war or armed conflict (whether or not there has been an official declaration of war or official statement as to the existence of a state of war), invasion, occupation, intervention of military forces, act of public enemy, embargo, delay of a common carrier, inability without default on Company's part to obtain sufficient material, labor, transportation, power or other essential commodity required in the conduct of its business; or by reason of any cause beyond his reasonable control; or by reason of any other cause of any similar nature (all of the foregoing being herein referred to as an "event of force majeure"), then Pey Dirt's/Manning's obligations hereunder shall be suspended as often as any such event of force majeure occurs and during such periods of time as such events of force majeure exist and such non-performance shall not be deemed to be a breach of this Agreement. + + 12. Default. (a) If either party at any time during the Contract Period shall (i) fail to make any payment of any sum of money herein specified to be made, or (ii) fail to observe or perform any of the covenants, agreements or obligations hereunder (other than the payment of money), the non-defaulting party may terminate this Agreement as follows: as to subparagraph (i) if such payment is not made within ten (10) days after the defaulting party shall have received written notice of such failure to make payment, or as to subparagraph (ii) if such default is not cured within thirty (30) days after the defaulting party shall have received written notice specifying in reasonable detail the nature of such default. In order to be a sufficient notice hereunder, any such written notice shall specify in detail each item of default and shall specify the provision of this Agreement which applies to each item of default, and shall specify in detail the action the defaulting party must take in order to cure each such item of default. The termination rights set forth in this section shall not constitute the exclusive remedy of the nondefaulting party hereunder, however, and if default is made by either party hereunder, the other may resort to such other remedies as said party would have been entitled to if this section had been omitted from this Agreement. Termination under the provisions of this section shall be without prejudice to any rights or claims which the terminating party may otherwise have against the defaulting party. + + -6- + + (b) Notwithstanding anything herein to the contrary, the cure periods set forth in subparagraphs (a)(i) and (a)(ii) above only apply to Company's first default under this Agreement. Accordingly, Pey Dirt may, after Company's first default has occurred under either subparagraph (a)(i) or subparagraph (a)(ii) above and has been cured, thereafter immediately terminate this Agreement upon any further defaults by Company hereunder without providing Company an opportunity to cure any additional defaults. + + 13. Termination. From and after the termination of the Contract Period all of the rights of Company to the use of Manning Identification shall cease absolutely and Company shall not thereafter use or refer to Manning Identification in advertising or promotion in any manner whatsoever, it being understood by Company that Manning Identification may be used at any time by others in connection with the advertisement and promotion of Products the shipment of which is completed after the termination of the Contract Period. It is further agreed that following termination of the Contract Period, Company shall not advertise, promote, distribute or sell any item whatsoever in connection with the use of any name, figure, design, logo, trademark or trade name similar to or suggestive of Manning Identification. + + 14. Inventory of Endorsed Products on Termination/Expiration. Any Endorsed Products that may have been manufactured by or for Company prior to the termination or expiration of the Contract Period may be sold by Company during the ninety (90) day period next following the date of termination or expiration; provided, however, that Company shall have no such rights unless (a) Company is not in default of any of its obligations hereunder on the date of termination or expiration, (b) within fifteen (15) days after the date of termination or expiration, Company shall furnish to Pey Dirt a written statement of the number and description of Endorsed Products actually in stock on the date of termination or expiration, (c) the quantity of Endorsed Products in stock on the date of termination or expiration is not in excess of a reasonable inventory based upon Company's selling requirements of Endorsed Products during the Contract Period, (d) Company shall continue to pay to Pey Dirt with respect to such sales a royalty at the rates specified herein, and (e) royalties payable pursuant to this section shall be paid within thirty (30) days following the end of each calendar month with respect + + + + + +to shipments made during such month. + + 15. Collegiate/National Football League Trademarks. Nothing contained herein shall be construed to convey to Company any rights to use the trademarks, logos or uniform of the University of Tennessee, the Indianapolis Colts, the National Football League or any other professional or amateur football association (including any member clubs or teams of such association) in conjunction with the rights granted hereunder. All rights to the use of such trademarks, logos or team identification must be acquired from the University of Tennessee, the Indianapolis Colts, the National Football League, or any other appropriate rights holder. + + 16. Indemnity. Company agrees to protect, indemnify and save harmless Pey Dirt, Pey Dirt's agent and Manning, or any of them, from and against any and all expenses, damages, claims, suits, actions, judgments and costs whatsoever, including reasonable attorneys' fees, + + -7- + +arising out of, or in any way connected with, this Agreement, Company's default hereunder, the negligence, actions, errors or omissions of Company or any claim or action for personal injury, death or otherwise involving alleged defects in Company's Products, provided that Company shall be given notice of any such action or claim. Company agrees to provide and maintain, at its own expense, general liability insurance and product liability insurance with limits no less than $3,000,000 and within thirty (30) days from the date hereof, Company will submit to Pey Dirt a fully paid policy or certificate of insurance naming Pey Dirt, Pey Dirt's agent and Manning as additional insured parties, requiring that the insurer shall not terminate or materially modify such without written notice to Pey Dirt at least twenty (20) days in advance thereof. + + 17. Waiver. The failure of either party at any time or times to demand strict performance by the other of any of the terms, covenants or conditions set forth herein shall not be construed as a continuing waiver or relinquishment thereof and each may at any time demand strict and complete performance by the other of said terms, covenants and conditions. + + 18. Bankruptcy. If Company shall become bankrupt or insolvent, or if Company's business shall be placed in the hands of a Receiver, Assignee or Trustee, whether by voluntary act of Company r otherwise, the Contract Period shall, at the option of Pey Dirt, immediately terminate. + + 19. Assignment. This Agreement shall bind and inure to the benefit of Pey Dirt and the successors and assigns of Pey Dirt. Nothing herein shall prevent Pey Dirt from assigning the monetary benefits of this Agreement as it may so desire. Further, inasmuch as it is recognized that Pey Dirt is the representative of Manning, Pey Dirt may at any time assign this Agreement to Manning and, in such event, Pey Dirt shall have no further obligation or liability in connection herewith and Pey Dirt's position vis-a-vis Company in connection herewith shall be in all respects the same as if Pey Dirt had signed this Agreement as agent rather than as principal from the beginning. The rights granted Company hereunder shall be used only by it and shall not, without the prior written consent of Pey Dirt, be transferred or assigned to any other. In the event of the merger or consolidation of Company with any other entity, Pey Dirt shall have the right to terminate the Contract Period by so notifying Company in writing on or before sixty (60) days after Pey Dirt has received notice of such merger or consolidation. + + 20. Arbitration. In the event a dispute arises under this agreement which cannot be resolved, such dispute shall be submitted to arbitration and resolved by a single arbitrator (who shall be a lawyer) in accordance with the Commercial Arbitration Rules of the American Arbitration Association then in effect. All such arbitration shall take place at the office of the American Arbitration Association located in Nashville, Tennessee. Each party is entitled to depose one (1) fact witness and any expert witness designated by the other party, and to conduct such other discovery as the arbitrator deems appropriate. The award or decision rendered by the arbitrator shall be final, binding and conclusive and judgment may be entered upon such award by any court. + + -8- + + 21. Significance of Headings. Section headings contained herein are solely for the purpose of aiding in speedy location of subject matter and are not in any sense to be given weight in the construction of this Agreement. Accordingly, in case of any question with respect to the construction of this Agreement, it is to be construed as though such section headings had been omitted. + + 22. Entire Agreement. This writing constitutes the entire agreement between the parties hereto and may not be changed or modified except by a writing signed by the party or parties to be charged thereby. + + 23. Governing Law. This Agreement shall be governed and construed according to the law of Tennessee. + + 24. Reservation of Rights. All rights not herein specifically + + + + + +granted to Company shall remain the property of Pey Dirt to be used in any manner Pey Dirt deems appropriate. Company understands that Pey Dirt has reserved to itself the right to authorize others to use Pey Dirt Identification within the Contract Territory and during the Contract Period in connection with all tangible and intangible items and services other than Products themselves. + + 25. No Joint Venture. This Agreement does not constitute and shall not be construed as constituting a partnership or joint venture between Turn 2 and Company. Neither party shall have any right to obligate or bind the other party in any manner whatsoever, and nothing herein contained shall give, or is intended to give, any rights of any kind to any third person. + + 26. Authorization. The execution, delivery and performance of this Agreement by Company and by Pey Dirt has been duly authorized and approved by the Board of Directors of Company and by the Board of Directors of Pey Dirt and constitutes a valid and binding obligation of Company and of Pey Dirt enforceable in accordance with its terms. + + 27. Execution and Delivery . This instrument shall not be considered to be an agreement or contract nor shall it create any obligation whatsoever on the part of Pey Dirt and Company, or either of them, unless and until it has been personally signed by a representative of Pey Dirt and by a representative of Company and delivery has been made of a fully signed original. Acceptance of the offer made herein is expressly limited to the terms of the offer. + + 28. Liability. In no event (including, but not limited to, Manning's or Pey Dirt's default hereunder) shall Manning or Pey Dirt be liable to Company (or any entity claiming through Company) for any amount in excess of the amounts of royalties actually received by Pey Dirt hereunder, excluding the reimbursement of expenses. Under no circumstances will Manning or Pey Dirt, on the one hand, or Company, on the other hand, be liable to the other or any other entity for any special, consequential, indirect, exemplary and/or punitive damages, or for loss of good will or business profits. + + -9- + + IN WITNESS WHEREOF, the par-ties hereto have caused this Agreement to be executed as of the date first above written. + +FAMOUS FIXINS, INC. PEY DIRT, INC. + +By: /s/ Jason Bauer By: /s/ Peyton Manning --------------------- ------------------------ Jason Bauer Peyton Manning President President + + -10- \ No newline at end of file diff --git a/full_contract_txt/WASTE2ENERGYHOLDINGS,INC_06_03_2010-EX-10.2-STRATEGIC ALLIANCE AGREEMENT.txt b/full_contract_txt/WASTE2ENERGYHOLDINGS,INC_06_03_2010-EX-10.2-STRATEGIC ALLIANCE AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..78a2830bee7f70de4d822081d8e9ff5f8948a963 --- /dev/null +++ b/full_contract_txt/WASTE2ENERGYHOLDINGS,INC_06_03_2010-EX-10.2-STRATEGIC ALLIANCE AGREEMENT.txt @@ -0,0 +1,147 @@ +Exhibit 10.2 SHBV (HONG KONG) LTD. and WASTE2ENERGY GROUP HOLDINGS PLC + + STRATEGIC ALLIANCE AGREEMENT + + 1 + + + + + + THIS AGREEMENT IS MADE ON THE 19 DAY OF MAY , 2010 PARTIES (1) SHBV (HONG KONG) LTD, a company incorporated in Hong Kong whose registered office is at Unit 3208, 32/F Office Tower ("SHBV"); and Convention Plaza, 1 Harbour Rd, Hong Kong (2) WASTE2ENERGY GROUP HOLDINGS PLC a company incorporated in Isle of Man whose registered office is at Stanley House, Lord Street, Douglas, Isle of Man 1M1 2BF ("W2E"), each a "Party" and together the "Parties". BACKGROUND (A) SHBV is engaged in the business of design, marketing, manufacture, commissioning and post sales servicing of steam and hot water plant and possesses certain proprietary products, technologies, formulations, know-how and/or rights within the fields of steam and hot water plant and equipment, engineering, and process designs (hereinafter, "SHBV Technologies"). (B) W2E is a provider of engineered solutions for waste to energy plants (each being an "Engineered Solution") utilising W2E proprietary technology for the destruction of waste through gasification and the conversion of latent energy into thermal energy. (C) The Parties wish to collaborate together to provide for a world class manufacturing facility for W2E Equipment, for the integration of SHBV Technologies into the Engineered Solution and to exploit joint sales channels and post sales support, for the mutual benefit of both Parties. (D) The Parties wish to cooperate and work together to promote, market and sell their respective products and services in accordance with the terms of this Agreement. AGREED PROVISIONS 1. DEFINITIONS AND INTERPRETATION 1.1 In this Agreement, the terms and expressions below shall have the following meanings: 2 + +TH + + + + + + Affiliates means subsidiaries or other entities that will be mutually agreed in writing. Agreement means the body of this agreement and its schedules, as each may be amended from time to time in accordance with its provisions; Alliance means the strategic alliance between the Parties facilitated under this Agreement; SHBV Boiler means a boiler that is manufactured and supplied by SHBV from time to time; SHBV Technologies has the meaning given in Recital A above; Commencement Date means the date of this Agreement; Dispute means any dispute, issue or claim arising out of or relating to this Agreement; Engineered Solution has the meaning given in Recital B above; Good Industry Practice means the exercise of that degree of skill, diligence, prudence, foresight and practice which would reasonably and ordinarily be expected from a skilled and experienced person engaged in performing obligations the same as or similar to the obligations under this Agreement or any part of them (as appropriate to the context in which this expression is used); Group means, in relation to any company, that company and the following for the time being: (i) its Holding Company, (ii) its Subsidiaries and (iii) the Subsidiaries of its Holding Company; Holding Company has the meaning given in $1159 Companies Act 2006; Intellectual Property Rights means (i) patents, designs, trade marks and trade names (whether registered or unregistered), copyright and related rights, database rights, know-how and confidential information; (ii) all other intellectual property rights and similar or equivalent rights anywhere in the world which currently exist or are recognised in the future; and (iii) applications, extensions and renewals in relation to any such rights; Manufacturing Agreement has the meaning given in clause 5.1; Subsidiary has the meaning given to it in $1159 Companies Act 2006; Supply Agreement means an agreement under which an Engineered Solution is to be delivered to a customer of W2E by W2E or such other entity established or nominated for that purpose; Term has the meaning set out in Clause 3.1; 3 + + + + + + Territory shall mean the world with the exception of the following countries which are expressly reserved by W2E: Spain, Italy and Canada. Working Day means any day that is not a Saturday, a Sunday or a bank or public holiday in England; W2E Equipment means products, plant and equipment to be manufactured pursuant to the Manufacturing Agreement and which may incorporate W2E Technology, including as specified in Schedule 1 of this Agreement; and W2E Technology means 'W2E's proprietary technology for the destruction of waste through gasification and the conversion of latent energy into thermal energy. 1.2 The Clause and Schedule headings are for convenience only and shall not affect the interpretation of this Agreement. 1.3 References to Clauses are to Clauses in the main body of this Agreement, and references to Paragraphs are to paragraphs of the Schedules. 1.4 References to the singular include the plural and vice versa, and references to one gender include the other gender. 1.5 Any reference to persons includes natural persons, firms, partnerships, limited liability partnerships, companies, corporations, unincorporated associations, local authorities, governments, states, foundations and trusts (in each case whether or not having separate legal personality) and any agency of any of the above. 1.6 Any phrase introduced by the expressions "including," "include," "in particular" or any similar expression shall be construed as illustrative and shall not limit the sense of the words preceding those terms. 1.7 Any reference to a statute, statutory provision or subordinate legislation (legislation) (except where the context otherwise requires) (i) shall be deemed to include any bye-laws, licences, statutory instruments, rules, regulations, orders, notices, directions, consents or permissions made under that legislation and (ii) shall be construed as referring to any legislation which replaces, re-enacts, amends or consolidates such legislation (with or without modification) at any time. 2. OBJECTIVES 2.1 The Parties enter into this Agreement with the intention that they meet the following key objectives ("Objectives"): 2.1.1 the achievement of mutual business goals by the servicing of W2E customers; 2.1.2 the establishment of a Manufacturing Agreement, as that term is hereinafter defined, for the ongoing manufacture and fulfilment of W2E Equipment in accordance with the terms of W2E's agreements with its customers.; 4 + + + + + + 2.1.3 the establishment of a waste heat recovery solution for W2E proprietary equipment and a technical process for handling new enquiries; 2.1.4 the establishment of a pricing methodology and business process for answering new business enquiries; and 2.1.5 the establishment of a cooperative relationship between the Parties, with agreement on the roles, responsibilities, and specific terms and conditions which will govern it. 2.2 The Parties acknowledge and agree that the Objectives are not contractually binding upon the Parties and shall only be referenced to the extent that there is any inconsistency or ambiguity in this Agreement, in which case the Parties shall attempt to resolve that inconsistency or ambiguity by having regard to the Objectives. 3. TERM 3.1 This Agreement shall commence on the Commencement Date and shall continue for a term of ten (10) years, unless previously terminated in accordance with Clause 15 (Termination). 4. COOPERATION OBLIGATIONS 4.1 Without prejudice to the other provisions of this Agreement, each Party shall perform its obligations under this Agreement in accordance with Good Industry Practice. 4.2 Each Party shall, during the course of its normal business, use reasonable endeavours subject to the terms of this Agreement to: 4.2.1 promote and market the experience and capabilities of the Parties in order to identify opportunities for W2E, such promotion and marketing activities to be as agreed by the Parties from time to time; 4.2.2 identify, assess and communicate opportunities for W2E; and 4.2.3 undertake joint marketing initiatives and other marketing activities which are mutually beneficial for the business interests of both Parties and as shall be agreed by the Parties from time to time. 4.3 Each Party will provide cooperation, support, assistance and information to the other Party in order to: 4.3.1 coordinate efforts to seek to obtain work from the new or prospective customer; 4.3.2 promote and market the services of both Parties, including by the development of standardised pricing, joint sales proposals and joint marketing materials; 5 + + + + + + 4.3.3 where appropriate, form a consortium for the purposes of undertaking joint pitches or presentations; 4.3.4 develop and agree to the pricing structure to be offered to Customers from time to time, having regard to the cost of delivery and related products and services, including the cost of raw materials, quality assurance, volume, manufacturing overhead, G&A overhead and health and safety costs; and 4.3.5 develop and agree to the pricing strategies (including a hedging strategy where appropriate) to guard against significant variance in product and service costs over the term of this Agreement as a result of fluctuations in raw material prices, currency fluctuations, wage inflation and other factors. 4.4 The Parties shall jointly collaborate on all aspects of the Alliance (including in relation to technology for process and manufacture) and shall convene regular meetings from time to time in order to discuss joint activities and to give effect to the terms of this Agreement. 5. SHBV OBLIGATIONS 5.1 SHBV agrees that it shall manufacture and supply to W2E (or as it shall direct), W2E Equipment, in each case in accordance with the terms of the manufacturing agreement ("Manufacturing Agreement") to be entered into by the Parties on or following the entry into this Agreement. 5.2 SHBV agrees that it shall at the request of W2E, supply (and if requested, install) SHBV Boilers, as well as primary chambers, secondary chambers and economises (which SHBV agrees to manufacture and supply) to such persons as W2E shall nominate, on the terms specified in or otherwise agreed to by the Parties. 5.3 SHBV shall continually during the Term and from time to time at W2E's request, provide W2E with verbal and written technical and business advisory assistance concerning SHBV Technologies where these would integrate into an Engineered Solution as part of servicing W2E Customers. This assistance shall include the development and provision of research, technical papers, background information, product and process information, process and equipment schematics, marketing presentations, capital cost information, industry reports, pricing models, scientific data, project proposals, technology evaluation, and preliminary project development services for any proposed projects. This advisory assistance will be in outline only and therefore to be considered not comprehensive detail. 5.4 SHBV shall from time to time at W2E's request, perform and provide to W2E project specific technical calculations and assessments needed to support the delivery of an Engineered Solution for servicing W2E Customers.. 6 + + + + + + 6. W2E OBLIGATIONS 6.1 W2E agrees that it will use reasonable endeavours to procure that a SHBV Boiler, and where applicable, a primary chamber, a secondary chamber and an economiser (in each case as supplied by SHBV as contemplated by Clause 5.2), forms part of the Engineered Solution implemented for a W2E Customer within the Territory. W2E shall have no obligations under this Clause where a W2E Customer elects for whatever reason not to include a SHBV Boiler, a primary chamber, a secondary chamber or an economiser supplied by SHBV as part of the Engineered Solution or directs W2E to utilise an alternative product. 6.2 Without prejudice to the obligations of the Parties under Clause 4, W2E shall be responsible, as it deems appropriate in relation to individual projects and unless otherwise agreed in writing, for the following: 6.2.1 conceptual and front end engineering design (FEED) in order to establish unknowns for customers and to establish a basis for plant design; 6.2.2 entering into construction and installation contracts for the Engineered Solution as it sees fit; 6.2.3 the commissioning of waste2energy plants; and 6.2.4 the negotiation and entry into operations and maintenance contracts in respect of waste to energy plants as customer demand requires. 6.3 W2E agrees that it shall use reasonable endeavours to procure the right for SHBV to commission SHBV Boilers (and where applicable, primary chambers, secondary chambers and economisers that are supplied by SHBV as contemplated by Clause 5.2) that form part of the Engineered Solution. 7. MANUFACTURING AGREEMENT 7.1 The Parties agree that they shall on or following the date of this Agreement, enter into the Manufacturing Agreement which shall govern the manner and terms upon which they will co-operate and fulfil their respective obligations to each other relating to the W2E Equipment and the SHBV Technologies (including the quantity of SHBV Boilers, primary chambers, secondary chambers and economisers that SHBV shall supply, their price and timetable for delivery). 7.2 Each Party agrees to negotiate in good faith the terms of the Manufacturing Agreement and to use its reasonable endeavours to enter into said agreement within 1 DAY DN 20/5/2010 of the Commencement Date. 7.3 The Manufacturing Agreement shall take precedence over the terms of this Agreement to the extent of any inconsistency. 7 + + + + + + 7.4 It is the intention of the Parties that W2E (or such other entity that it shall nominate) shall be the prime contractor entering into agreements with its customers, with SHBV acting as a subcontractor under the Manufacturing Agreement for the responsibilities that fall to SHBV. The Parties agree that it is the intention that they shall have the following responsibilities to fulfil under their agreements with W2E Customer: 7.4.1 SHBV will be responsible for all engineering and design work for the SHBV Technologies and related equipment that it supplies for any applicable project; 7.4.2 W2E shall be responsible for all engineering and design work for the W2E Technologies and related equipment that it supplies for any applicable project; and 7.4.3 the Parties shall share responsibility for the preparation of all reports, statements, proposals, applications, or disclosures, in relation to their own technology supply which are required by applicable governmental laws and/or regulations in order to implement any of the projects. 8. NON-SOLICITATION Each Party agrees that during the Term of this Agreement and for a period of six (6) months thereafter it shall not, without the prior written consent of the other Party, either on its own account or through its employees or agents or otherwise or on behalf of any other person, firm, company or other organisation and other than by general advertising, solicit, interfere with, procure or entice away (or, in each case, attempt so to do), either directly or indirectly, any employee or contractor of the other Party. 9. NON-CIRCUMVENTION 9.1 W2E agrees not to engage in business dealings, discussions, or otherwise work directly with any third parties introduced to W2E through SHBV, or to exploit any pre-existing relationship of SHBV with any third party that has been represented to W2E by SHBV, without the prior consent and/or direct participation of SHBV. 9.2 SHBV agrees not to engage in business dealings, discussions, or otherwise work directly with any third parties introduced to SHBV through W2E, or to exploit any pre-existing relationship of W2E with any third party that has been represented to SHBV by W2E, without the prior consent and/or direct participation of W2E. 8 + + + + + + 10. INTELLECTUAL PROPERTY RIGHTS 10.1 Except as expressly agreed otherwise in writing, all Intellectual Property Rights vested in a Party prior to the date of this Agreement shall remain vested in that Party. Further, any improvements, enhancements, modifications or developments to a Party's intellectual property shall automatically vest in that Party irrespective of who generates the relevant improvement, enhancement, modification or development. 10.2 Each Party grants to the other Party a non-exclusive, non-transferable, royalty-free licence to use the other Party's Intellectual Property Rights as far is strictly necessary to comply with its marketing and promotional obligations under this Agreement. For the sake of certainty, the licence created by this Agreement does not extend to the use of the other Party's Intellectual Property Rights for any other commercial purpose. 10.3 The licence granted in Clause 10.2 above will automatically expire at the end of the Term of this Agreement. 10.4 Each Party shall indemnify and keep indemnified the other Party against all costs, claims, losses, expenses and damages incurred by the other Party as a result of any breach of the provisions set out in this Clause 10 or arising directly or indirectly out of any infringement by that Party of the other Party's Intellectual Property Rights. 11. CONFIDENTIALITY 11.1 For purposes of this Clause: Authorised Persons means the directors, employees, officers, professional advisers, agents and contractors of each Party; Confidential Information means all information in any medium or format (written, oral, visual or electronic, and whether or not marked or described as "confidential"), together with Copies, which relates to a Party (the "Disclosing Party"), to its Group, or to its (or its Group members') employees, officers, customers or suppliers, and which is directly or indirectly disclosed by the Disclosing Party to the other Party (the "Recipient Party") in the course of its dealings relating to this Agreement, before or after the date of this Agreement. However, the following information is not "Confidential Information" for the purposes of this Agreement: (i) information which is in the public domain other than as a result of breach of this Agreement or any separate confidentiality undertaking between the Parties; (ii) information which the Recipient Party received, free of any obligation of confidence, from a third party which itself was not under any obligation of confidence in relation to that information; and 9 + + + + + + (iii) information which was developed or created independently by or on behalf of the Recipient Party or any member of the Recipient Party's Group; and Copies means all reproductions (hard copy or electronic), extracts, summaries or analyses of Confidential Information in any medium or format made by or on behalf of any Party. 11.2 In return for the disclosure by each Party of Confidential Information and for other consideration given under this Agreement, each Party shall (except as expressly permitted by this Agreement or with the written consent of the Disclosing Party); 11.2.1 keep all Confidential Information secret; 11.2.2 only use or make Copies of Confidential Information in connection with and to the extent necessary for the purposes of this Agreement; 11.2.3 take all reasonable action to ensure that, within its organisation, the Confidential Information is not made available to any person who is not an Authorised Person; 11.2.4 use all reasonable endeavours to ensure that Confidential Information within its control is kept securely protected against theft or unauthorised access, and in any event shall maintain its security, integrity and confidentiality to at least the same standard as it applies to its own confidential information; and 11.2.5 not reverse engineer, or attempt to reverse engineer, any software comprised within the Confidential Information, except to the extent permitted by law. 11.3 A Party may disclose Confidential Information to any Authorised Persons on a "need-to-know" basis solely in relation to the Agreement, provided that that Party: 11.3.1 informs all Authorised Persons that the Confidential Information is confidential; and 11.3.2 ensures that all Authorised Persons (other than those already under a professional duty of confidence to that Party or an obligation of confidence as part of employment arrangements) enter into written confidentiality undertakings with it on equivalent terms to this Clause, and provides copies of such undertakings to the other Party to this Agreement upon that other Party's reasonable request; and 11.3.3 shall be responsible for all acts and omissions of Authorised Persons as though they were its own acts or omissions under this Agreement. 11.4 Either Party may disclose Confidential Information to a third party, provided that before any such disclosure the express written consent of the other Party has been received in writing and signed by a duly authorised signatory. Such consent lies in the entire discretion of the Party owning the Confidential Information and 10 + + + + + + without prejudice to that, the Party's consent may be conditional upon the third party entering into a confidentiality or non-disclosure agreement with the owner of the Confidential Information prior to any disclosure being made. 11.5 Each Party shall promptly notify the other Party if it becomes aware of any unauthorised use or disclosure by any Authorised Person or any other person of any Confidential Information. 11.6 A Party may disclose any Confidential Information to any regulator, law enforcement agency or other third party if it is required to do so by law, regulation, or similar authority. In those circumstances: 11.6.1 that Party shall (provided that it is practical and lawful to do so) notify the other Party in writing as soon as practicable before the disclosure; 11.6.2 the Parties shall use all reasonable endeavours to consult with each other with a view to agreeing the timing, manner and extent of the disclosure; and 11.6.3 the Party required to disclose shall in any event use all reasonable endeavours to obtain written confidentiality undertakings in its favour from the third party. 11.7 If the Party required to disclose is unable to inform the Disclosing Party before Confidential Information is disclosed, it shall (provided that it is lawful to do so) fully inform the Disclosing Party immediately afterwards in writing of the circumstances of the disclosure and the Confidential Information which has been disclosed. 11.8 Nothing in this Agreement or the disclosures envisaged by this Clause shall (except as expressly agreed otherwise) operate to transfer any Intellectual Property Rights in the Confidential Information. 11.9 The undertakings and other provisions of this Clause shall continue in force without limit in time and shall survive termination of this Agreement, but shall cease to apply to information which may enter the public domain otherwise than through the unauthorised disclosure by or fault of the recipient of the Confidential Information or by a person with whom such recipient is connected in any way. 11.10 Each Party acknowledges that damages alone would not be an adequate remedy in the event of breach by the other Party of the provisions of this Clause. Accordingly, it is agreed that either Party shall be entitled, without proof of special damages, to seek an injunction or other interim remedy for any threatened or actual breach of this Clause, without prejudice to any other rights and remedies which that Party may have. 12. PUBLICITY 12.1 The Parties shall cooperate in any public relations or publicity exercises pertaining to the Alliance, and agree to share with each other and coordinate the content and 11 + + + + + + timing of press releases, prior to submission of such information for public release. Unless specifically agreed in writing by the Parties (including as to form and content) or required by law, by relevant regulations, or by a relevant Stock Exchange, neither Party may make any public announcement (including any press release) in respect of the subject matter of this Agreement, its terms or its operation. 12.2 Neither Party, nor any of their respective customers, end-users, or licensees may use the name or marks of the other Party in any way including in any advertising of products or processes without the prior specific written authorization of that other Party. 12.3 Notwithstanding Clauses 11 (Confidentiality) and this Clause 12: 12.3.1 W2E may advise others of the source of the SHBV Technology and the nature of the Alliance formed under this Agreement; and 12.3.2 each Party may disclose the existence, but not the details, of this Agreement in a release to the general public within thirty (30) days of the Commencement Date hereof. 2.4 Each Party shall take all reasonable steps to ensure the observance of the provisions of this Clause 12 by all employees, agents, subcontractors and consultants (including professional advisers) of that Party. 13. WARRANTIES 13.1 Each Party hereby represents and warrants to the other Party that: 13.1.1 all acts, conditions, authorisations, consents (including shareholder or parent company consents) and other things (including all licences and permits) required in order to enable it lawfully to enter into, exercise its rights under or perform its obligations under this Agreement and any other documents to be executed in connection with it or to authorise the same, have been duly done, fulfilled, obtained and performed and are in full force and effect; and 13.1.2 neither the execution nor the delivery nor the performance of this Agreement will: 13.1.2.1 result in a breach of, or constitute a default under, or require the consent of a person under, any agreement or arrangement by which it is bound; 13.1.2.2 conflict with its constitutional documents/result in a breach of any provision of its memorandum or articles of association; or 13.1.2.3 result in a breach of any law, regulation, order, judgement or decree of any court or government. 12 + + + + + + 13.2 The express provisions of this Agreement are in place of corresponding warranties, conditions, terms, undertakings and obligations implied by statute, common law, custom, trade usage, course of dealing or otherwise (including implied undertakings of satisfactory quality, conformity with description and reasonable fitness for purpose), all of which are hereby excluded to the maximum extent permitted by law. 14. INDEMNITIES 14.1 Each Party agrees to indemnify, hold and save harmless the other Party, and defend at its own expense, from and against all suits, claims, demands and liability of any nature and kind, including their cost and expenses, arising from: 14.1.1 the negligence; or 14.1.2 any intentionally wrongful acts or omissions, of the Party's own employees, agents, affiliates or subcontractors in connection with this Agreement. 15. TERMINATION 15.1 Either Party may (without prejudice to its other rights) terminate this Agreement at any time by giving written notice to the other Party if: 15.1.1 the other Party becomes unable to pay its debts (within the meaning of section 123 (l)(e) or (2) of the Insolvency Act 1986), admits its inability to pay its debts or becomes insolvent, or (ii) a petition is presented, an order made or a resolution passed for the liquidation (otherwise than for the purposes of a solvent amalgamation or reconstruction), administration, bankruptcy or dissolution of the other Party, or (iii) an administrative or other receiver, manager, trustee, liquidator, administrator or similar person or officer is appointed to the other Party and/or over all or any part of the assets of the other Party, or (iv) the other Party enters into or proposes any composition or arrangement concerning its debts with its creditors (or any class of its creditors) generally, or (v) anything equivalent to any of the events or circumstances stated in (i) to (iv) inclusive occurs in any applicable jurisdiction; or 15.1.2 the other Party commits a material or persistent breach of the provisions of this Agreement (a "Breach"), provided that if the Breach is remediable, the other Party shall be given thirty (30) days to remedy the Breach from receipt of the first Party's written notice specifying the nature of the Breach and requesting that the same be remedied. 15.2 Any termination of the Agreement under Clause 15.1 above shall take effect either immediately on receipt of written notice or at such other date as may be specified in the written notice. 13 + + + + + + 15.3 On termination of this Agreement: 15.3.1 each Party shall ensure that all documentation and all information (including all copies of such information stored in any written or electronic form) which constitutes Confidential Information shall be returned to the other Party forthwith; and 15.3.2 each Party shall immediately cease to use the other Party's Intellectual Property Rights and shall destroy or on request return to the other all materials in its possession bearing the other Party's trade marks, logos, brand name and other intellectual property. 15.4 The termination of this Agreement for any reason whatsoever, or its expiry: 15.4.1 shall not affect any provision of this Agreement which by its very nature should survive or operate in the event of the termination of this Agreement; and 15.4.2 shall not prejudice or affect the rights of either Party against the other in respect of any breach of this Agreement or in respect of any monies payable by one Party to another in respect of any period prior to termination. 15.5 The parties may terminate this Agreement at any time by mutual consent. 15.6 Each party may terminate this Agreement if in the 12 months period immediately prior to such termination they fail to achieve the target annual business levels set out in Schedule 2 of the Manufacturing Agreement between the Parties. 15.7 Each party may terminate this Agreement without liability if, despite their best efforts, the parties fail to conclude the Manufacturing Agreement pursuant to Clauses 10 - 13 of this Agreement within one month from the date of this Agreement. 16. FURTHER ASSURANCE 16.1 Each Party shall at its own cost and expense carry out, or use all reasonable endeavours to ensure the carrying out of, whatever further actions (including the execution of further documents) the other Party reasonably requires from time to time for the purpose of giving that other Party the full benefit of the provisions of this Agreement. 17. ASSIGNMENT 17.1 SHBV acknowledges and agrees that W2E may from time to time establish or nominate a separate entity for the purpose of entering into agreements with 14 + + + + + + SHBV, in which case W2E shall have the right to require that SHBV's obligations under the Manufacturing Agreement (including warranties and indemnities) and any project schedules to be given in favour of both W2E and such entity. 18. ENTIRE AGREEMENT 18.1 This Agreement (together with the Manufacturing Agreement and any project schedule entered into by the Parties as contemplated herein) constitutes the entire agreement between the Parties in relation to its subject matter, and replaces and extinguishes all prior agreements, draft agreements, arrangements, undertakings, or collateral contracts of any nature made by the Parties, whether oral or written, in relation to such subject matter. 18.2 Each Party acknowledges that in entering into this Agreement it is not relying on, and shall have no rights or remedies (whether in tort, under statute or otherwise) in respect of any statements, collateral or other warranties, assurances, undertakings or representations (whether innocently or negligently made) by any person or entity in relation to the subject-matter of this Agreement, except for those rights and remedies available under this Agreement. 18.3 Nothing in this Clause shall exclude or restrict the liability of either Party arising out of fraud, fraudulent misrepresentation or fraudulent concealment. 19. DISPUTE RESOLUTION 19.1 The Parties agree to co-operate with each other in an amicable manner with a view to achieving the successful implementation of this Agreement. 19.2 If a Dispute arises it shall first be referred to the Managing Director (or equivalent) of SHBV and the Managing Director (or equivalent) of W2E for resolution. 19.3 If the Parties are unable to resolve a Dispute within ten (10) Working Days of its referral to the Managing Director (or equivalent) of SHBV and the Managing Director (or equivalent) of W2E referred to in Clause 19.2 above, then the Parties will attempt to settle it by mediation in accordance with the Centre for Effective Dispute Resolution ("CEDR")'s Model Mediation Procedure and the following shall prevail in the event of a conflict with that procedure: 19.3.1 the mediation shall be conducted by a single mediator who shall be appointed by agreement in writing between the Parties or, if the Parties are unable to agree on the identity of the mediator within ten (10) Working Days of the date of the request that the Dispute be determined by a mediator, or if the mediator appointed is unable or unwilling to act, shall be appointed by the CEDR; 15 + + + + + + 19.3.2 the mediation shall be conducted in London and in the English language; 19.3.3 the mediation shall be conducted in private and without prejudice to the rights of the Parties in any future proceedings; and 19.3.4 the mediation shall be held within thirty (30) Working Days of the appointment of the mediator pursuant to Clause 19.3.1 above. 19.4 Nothing in this Clause shall prejudice the right of either Party to: 19.4.1 apply to Court for interim relief to prevent the violation by a Party of any proprietary interest, or any breach of either Party's obligations which could cause irreparable harm to the other Party; or 19.4.2 to bring proceedings intended to result in the enforcement of a settlement agreement or of a binding determination of a dispute between the Parties. 20 NOTICES 20.1 Except as otherwise expressly provided, any notice or other communication from either Party ("Sender") to the other Party ("Recipient") which is required to be given under this Agreement ("Notice") must be in writing (which for these purposes excludes e-mail), signed by or on behalf of the Sender, and be addressed to the officer of the Recipient whose details are set out in Clause 20.3 below. 20.2 The Sender may either: 20.2.1 deliver the Notice, or arrange for its delivery, by hand and retain satisfactory proof of delivery; or 20.2.2 send the Notice by fax and retain a successful fax transmission report recording the correct number of pages; or 20.2.3 send the Notice by recorded delivery or registered post and retain a receipt of delivery or sending; or 20.2.4 send the Notice by registered airmail if it is to be served by post outside the country from which it is sent and retain a receipt of sending. 20.3 The details of the Parties for the purpose of Notices are as follows: 16 + + + + + + + + Each Party may alter the above details that relate to it and shall promptly notify the other of any such change by a Notice in accordance with this Clause. 20.4 Any Notice shall be deemed to have been served: 20.4.1 if delivered by hand, at the time and date of delivery; 20.4.2 if sent by fax, at the time and date of the successful fax transmission report; 20.4.3 if sent by recorded delivery or registered post, 48 hours from the date of posting (such date as evidenced by postal receipt etc); or 20.4.4 if sent by registered airmail, five days from the date of posting. 21 GENERAL 21.1 Variations only in writing 21.2 No variation of or amendment to this Agreement (including its Schedules) shall be effective unless made in writing and signed by or on behalf of both Parties or by their duly authorised representatives. 21.3 Remedies cumulative 21.4 The rights, powers and remedies provided in this Agreement are (except as expressly provided) cumulative and not exclusive of any rights, powers and remedies provided by law, or otherwise. 17 + +SHBV + + For the attention of: Managing Director Address: + + With copy to: Managing Director, Telephone number: + +Fax number: + + W2E + + For the attention of: Mr John Murphy Address: Dargavel Stores, Lockerbie Road, Dumfries, DG1 3PG Telephone number: [Insert details] Fax number: [Insert details] + + + + + + 21.5 No partnership or agency 21.5.1 Nothing in this Agreement shall (except as expressly provided) be deemed to constitute a partnership, or create a relationship of principal and agent for any purpose between the Parties. 21.5.2 Any statement or representation made by either Party shall not be binding on the other unless agreed otherwise agreed in writing and neither Party shall be liable to any third party for any loss or damages arising out of such statements or representations. 21.6 No waiver 21.7 The failure to exercise, or delay in exercising, a right, power or remedy provided by this Agreement or by law shall not constitute a waiver of that right, power or remedy. If a Party waives a breach of any provision of this Agreement this shall not operate as a waiver of a subsequent breach of that provision, or as a waiver of a breach of any other provision. 21.8 Costs of each of the Parties 21.9 Each Party shall bear its own costs and expenses in connection with the preparation, negotiation, and execution of the Agreement. 21.10 Third Party Rights A person who is not a party to this Agreement may not enforce any of its provisions under the Contracts (Rights of Third Parties) Act 1999. 21.11 Counterparts / Execution of Agreement 21.12 This Agreement may be entered into by the Parties in any number of counterparts. Each counterpart shall, when executed and delivered, be regarded as an original, and all the counterparts shall together constitute one and the same instrument. This Agreement shall not take effect until it has been executed by both the Parties. This Agreement may be validly exchanged and delivered by fax. 21.13 Severability 21.13.1 If any Clause, or part of a Clause, of this Agreement, is found by any court or administrative body of competent jurisdiction to be illegal, invalid or unenforceable, and the provision in question is not of a fundamental nature to the Agreement as a whole, the legality, validity or enforceability of the remainder of this Agreement (including the remainder of the Clause or sub Clause which contains the relevant provision) shall not be affected. 21.13.2 If the foregoing applies, the Parties shall use all reasonable endeavours to agree within a reasonable time upon any lawful and reasonable variations to the 18 + + + + + + Agreement which may be necessary in order to achieve, to the greatest extent possible, the same effect as would have been achieved by the Clause, or the part of the Clause, in question. 22 GOVERNING LAW 22.1 This Agreement is governed by English law. 22.2 The Parties submit to the non-exclusive jurisdiction of the courts of England and Wales. This Agreement shall come into force on the date given at the beginning of this Agreement. + + 19 + +SIGNED by + + ) ) (name), ) a duly authorised signatory of ) (signature) SHBV (HONG KONG) LTD ) + +SIGNED by + + ) ) (name), + + + + + + ) + +a duly authorised signatory of ) (signature) WASTE2ENERGY GROUP HOLDINGS PLC ) \ No newline at end of file diff --git a/full_contract_txt/WEBHELPCOMINC_03_22_2000-EX-10.8-HOSTING AGREEMENT.txt b/full_contract_txt/WEBHELPCOMINC_03_22_2000-EX-10.8-HOSTING AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..f145a9dde8acf48d03ae846be6eeede1c58aed6a --- /dev/null +++ b/full_contract_txt/WEBHELPCOMINC_03_22_2000-EX-10.8-HOSTING AGREEMENT.txt @@ -0,0 +1,93 @@ +Exhibit 10.8 + +eGAIN COMMUNICATIONS CORPORATION + +HOSTING AGREEMENT + +1. Hosting Agreement. This Agreement (including its Exhibit A and all other documents referenced herein) is entered into by eGain Communications Corporation ("eGain") and Eliance Corporation ("Customer") for the purpose of providing Customer with Web-based access to eGain's software specified in Exhibit A, including any updates, upgrades or revisions provided under this Agreement ("Software"), and certain other services relating to the processing of and response to online inquiries and messages ("Online Messages") received by Customer from its customers and other users of Customer's Web site ("Users"). + +2. Provision of Services. eGain will provide Customer with access, maintenance and related hosting services ("Hosting Services") to the Software installed on eGain's servers and other equipment (the "eGain System"). Customer agrees, as reasonably requested by eGain, to provide eGain with access to Customer's premises and equipment and to otherwise cooperate with eGain in performing the services. During the term of this Agreement, Customer may obtain information ("Reports") regarding Customer's use of the Software and the quantity and handling of Online Messages routed to the eGain System by accessing the eGain System through a password-protected Web site made available by eGain. Customer shall be responsible for maintaining the confidentiality of such passwords and shall permit only authorized employees of Customer to access the eGain System. The Hosting Services, and the hosting fees specified in Exhibit A, do not include any deployment, training or other consulting or professional services which, if applicable, will be specified in a Statement of Work, signed by both parties, and incorporated herein by this reference. + +2.1 Customer Support. eGain will provide live telephone support to Customer 24-hours-a-day, seven-days-a-week by a trained eGain customer support representative. + +3. Customer's Responsibilities. Customer agrees that it shall be responsible for providing and maintaining its own Internet access and all necessary telecommunications equipment, software and other materials ("Customer Equipment") at Customer's location necessary for accessing the Software and the eGain System through the Internet. Customer agrees to notify eGain of any changes in the Customer Equipment, including any system configuration changes or any hardware or software upgrades, which may affect the Hosting Services provided hereunder. The eGain System is only to be used for lawful purposes. Customer agrees not to transmit, re-transmit or store materials on or through the eGain System or the Software that are harmful to the eGain System or Software, or in violation of any applicable laws or regulations, including without limitation laws relating to infringement of intellectual property and proprietary rights of others. To the extent that certain components of the Software may be downloaded to Customer's or User's computer as a result of accessing the Software as part of the Hosting Services, eGain grants Customers a non-exclusive, non-transferable, limited license, with right to sublicense solely to Users, to use such Software only in connection with the Hosting Services. Neither Customer nor Users are otherwise permitted to use the Software, nor will Customer or Users disassemble, decompile or otherwise attempt to discern the source code of such Software. Customer agrees that, except as expressly set forth in this Section and in Section 11, it will not rent, lease, sublicense, re-sell, time-share or otherwise assign to any third party this Agreement or any of Customer's rights or licenses to access the Software or the eGain System, nor shall Customer use, or authorize others to use, the Software, Hosting Services or the eGain System to operate a service bureau. Notwithstanding the preceding sentence, Customer shall be permitted to provide access to the eGain System to its employees and agents located worldwide. + +4. Proprietary Rights. Except for the limited access right granted to Customer in this Agreement, all right, title and interest in and to the Software (including any and all modifications as a result of any implementation services rendered) and the eGain System are and shall remain the exclusive property of eGain and its licensors. eGain acknowledges and agrees that the Online Messages are the property of Customer and that eGain has only a limited right to use the Online Messages as set forth in the following sentence. Notwithstanding the foregoing, eGain may access and disclose the Online Messages solely as necessary to provide the Hosting Services, to operate and maintain its systems, to comply with applicable laws and government orders and requests, and to protect itself and its customers. + +5. Pricing and Payment. Customer agrees to pay the fees and other charges for the Hosting Services and other services provided under this Agreement as specified in Exhibit A of this Agreement. CUSTOMER AGREES TO PAY FOR HOSTING SERVICES ON OR BEFORE THE FIRST DAY OF THE MONTH IN WHICH THE HOSTING SERVICES ARE PROVIDED, except that, with respect to Additional Fees (as defined in Exhibit A), eGain will invoice Customer for such Fees in the month after the month in which such fees accrue as provided in Exhibit A. All amounts payable hereunder are exclusive of any and all taxes, and Customer is responsible for payment of such taxes (excluding taxes based on eGain's net income). All prices are stated, and Customer shall pay, in United States dollars. Payment received by eGain after the due date shall be subject to a late fee equal to one and one-half percent (1.5%) per month, or, if less, the maximum amount allowed by applicable law. At the end of the initial one-year term of this Agreement and any subsequent one-year terms, eGain may adjust the monthly fee payable under this Agreement by providing Customer written notice of such adjustment at least sixty (60) days prior to the beginning of the new term. + +6. Limited Warranties; Disclaimer of Warranties. + + + + + +6.1 eGain warrants and represents to Customer that (i) the Software will perform substantially in accordance with the documentation, if any, provided by eGain to Customer, and (ii) the Hosting Services will be performed in a professional and workmanlike manner and in accordance with Section 2. In the event of Downtime (as defined in this Section 6.1 below), as Customer's sole and exclusive remedy and eGain's sole and exclusive liability, the monthly fee payable for the Hosting Services shall be reduced as follows: + +a) For the first sixty (60) minutes of Downtime during Normal Business Hours or the first four (4) hours of Downtime outside of Normal Business Hours ("Initial Downtime"), eGain will credit Customer's account for one (1) day of service. + +b) For each eight (8) hour period of Downtime per day in addition to the Initial Downtime, eGain will credit Customer's account for one (1) additional day of service. + +For the purposes of this Agreement, "Downtime" shall mean any interruption in the availability of Hosting Services to Customer (excluding scheduled interruptions of which Customer is notified 48 hours in advanced), only if such interruption is due either to: 1) an error in the Software, or 2) failure of the eGain System (but not including problems associated with Internet connectivity). Downtime begins upon Customer notification to eGain of the interruption, either + +eGAIN COMMUNICATIONS CORPORATION + +HOSTING AGREEMENT + +by speaking directly with an eGain customer service representative or recording a voice mail message in the eGain customer service voice mail box, and continues until the availability of the Hosting Services is restored to the Customer. For purposes of this Agreement, "Normal Business Hours" shall mean between the hours of 6:00 a.m to 6:00 p.m. Pacific time, Monday through Friday excluding national holidays. + +In the event of a breach (other than Downtime) of the warranty set forth in Section 6.1(i) above, Customer's sole and exclusive remedy, and eGain's sole and exclusive liability shall be, at eGain's option, repair or replacement of the Software. + +THE FOREGOING CONSTITUTES CUSTOMER'S SOLE AND EXCLUSIVE REMEDY, AND eGAIN'S ENTIRE LIABILITY, FOR DOWNTIME AND FOR BREACH OF THE HOSTING SERVICES WARRANTY PROVIDED IN THIS SECTION 6.1. + +6.2 eGain represents and warrants that, prior to, during and after the calendar year 2000 A.D., the Software and the eGain System will process, calculate, manipulate, sort, store and transfer date data without material error or material performance degradation, including without limitation date data which represents or references different centuries or more than one century (such representation and warranty being referred to as "Year 2000 Compliant"). In the event that the Software or eGain System is not Year 2000 Compliant, Customer's sole and exclusive remedy and eGain's sole and exclusive liability shall be for eGain, at no additional cost to Customer, to promptly modify the Software or the eGain System so that the Software or eGain System is Year 2000 Compliant. The foregoing warranty is conditioned upon the Customer using the Software and/or the eGain System in accordance with its applicable Documentation, and on other software, hardware, network and systems (other than the Software and the eGain System) with which the Software and/or the eGain System interface or interoperate also being Year 2000 Compliant. + +6.3 EXCEPT AS PROVIDED IN SECTIONS 6.1-6.2, (A) THE HOSTING SERVICES ARE PROVIDED, AND THE SOFTWARE AND THE eGAIN SYSTEM ARE MADE AVAILABLE, BY eGAIN TO CUSTOMER "AS IS," AND (B) eGAIN AND ITS SUPPLIERS MAKE NO WARRANTY OF ANY KIND, WHETHER EXPRESS OR IMPLIED, REGARDING THE HOSTING SERVICES, THE SOFTWARE OR THE eGAIN SYSTEM, AND SPECIFICALLY DISCLAIM THE WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND AGAINST INFRINGEMENT, TO THE MAXIMUM EXTENT POSSIBLE BY LAW. + +6.4 Without limiting the express warranties set forth in this Agreement, eGain does not warrant that the Software, the eGain System or the Hosting Services will meet Customer's requirements (except as provided in Section 6.1) or that Customer's access to and use of the Software, the eGain System or the Hosting Services will be uninterrupted or free of errors or omissions. eGain cannot and does not guarantee the privacy, security, authenticity and non-corruption of any information transmitted through, or stored in any system connected to, the Internet. eGain will use commercially reasonable efforts to adequately maintain, and upgrade as necessary, the eGain System to provide the Hosting Services to its customers. However, except as expressly set forth herein, eGain shall not be responsible for any delays, errors, failures to perform, or disruptions in the Hosting Services caused by or resulting from any act, omission or condition beyond eGain's reasonable control. + +7. Limitation of liability. EXCLUDING LIABILITY FOR INFRINGEMENT CLAIMS AS DISCUSSED IN SECTION 9 OF THIS AGREEMENT, IN NO EVENT SHALL eGAIN BE LIABLE TO CUSTOMER FOR CONSEQUENTIAL, EXEMPLARY, INDIRECT, SPECIAL OR INCIDENTAL DAMAGES (INCLUDING, WITHOUT LIMITATION, LOST PROFITS), OR BE LIABLE TO ANY THIRD PARTY FOR ANY DAMAGES WHATSOEVER, EVEN IF eGAIN HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. eGain's entire liability under this Agreement for any damages from any cause whatsoever, regardless of form or action, whether in contract, negligence or otherwise, shall in no event exceed an amount equal to the price paid for the Services out of which the claim arose. + + + + + +8. Confidential Information. Each party agrees to keep confidential and to use only for purposes of performing (or as otherwise permitted under) this Agreement, any proprietary or confidential information of the other party disclosed pursuant to this Agreement which is marked as confidential or which would reasonably be considered of a confidential nature. The obligation of confidentiality shall not apply to information which is publicly available through authorized disclosure, is known by the receiving party at the time of disclosure as evidenced in writing, is rightfully obtained from a third party who has the right to disclose it, or which is required by law, government order or request to be disclosed. Upon any termination of this Agreement, each party shall return to the other party all confidential information of the other party, and all copies thereof, in the possession, custody or control of the party unless otherwise expressly provided in this Agreement. + +9. Indemnification. Subject to the limitations set forth in this Section 9, eGain will defend any third-party suit or action against Customer to the extent such suit or action is based on a claim that the Software or the eGain System infringes any valid United States patent, copyright, trade secret or other proprietary right, and eGain will pay those damages and costs finally awarded against Customer in any monetary settlement of such suit or action which are specifically attributable to such claim. These obligations do not include any claims to the extent they are based on use of the Software or eGain System in violation of this Agreement or in combination with any other software or hardware, or any modification to the Software or eGain System pursuant to Customer's specifications. If any portion of the Software or eGain System becomes, or in eGain's opinion is likely to become, the subject of a claim of infringement, then eGain may, at its option and expense, (a) procure for Customer the right to continue using such Software or the eGain System, or (b) replace or modify the Software or the eGain System so that it becomes non-infringing. The indemnity obligations set forth in this Section 9 are contingent upon: (i) Customer giving prompt written notice to the eGain of any such claim(s); (ii) eGain having sole control of the defense or settlement of the claim; and (iii) at eGain's request and expense, Customer cooperating in the investigation and defense of such claim(s). THE FOREGOING STATES eGAIN'S ENTIRE LIABILITY FOR INFRINGEMENT CLAIMS. + +10. Term and Termination. + +10.1 Term and Termination. This Agreement shall continue in effect from the Effective Date for a one (1) year period, unless earlier terminated as set forth below, and thereafter shall renew automatically for successive one (1) year periods unless either party gives the other party at least thirty (30) days prior written notice of its intent not to renew the Agreement. In addition, either party may terminate this Agreement by giving to the other party written notice + +eGAIN COMMUNICATIONS CORPORATION + +HOSTING AGREEMENT + +of such termination upon the other party's material breach of any material term (subject to the other party's right to cure within thirty (30) days after receipt of such notice), the other party's insolvency, or the institution of any bankruptcy or similar proceedings by or against the other party. + +10.2 Effect of Termination. Upon any termination of this Agreement, eGain shall immediately cease providing all Hosting Services, and Customer shall no longer have access to the Software or the eGain System. Except in the event of termination for Customer's breach, eGain shall provide Customer with an electronic copy of the final Reports (covering the month just prior to termination of this Agreement). eGain shall be entitled to retain a copy (whether electronic or otherwise) of the Online Messages and the Reports for its records and internal purposes and shall not disclose such Online Messages or Reports to any third party except as permitted under Section 4. Within fifteen (15) days of any termination of this Agreement, Customer shall pay to eGain all unpaid fees accrued prior to termination. Sections 4, 5 (as to amounts accrued but unpaid), 7, 8, 10.2 and 12 and Exhibit A (as to amounts accrued but unpaid) shall survive any expiration or termination of this Agreement. + +11. Customer References. Customer agrees that, during the term of this Agreement, eGain may reference Customer in eGain's customer listings and may place Customer's name and logo on eGain's Web site and in collateral marketing materials relating to eGain's products and services. Customer hereby grants eGain a right to use Customer's trademarks (name and logo only) designated by Customer for such limited uses, subject to Customer's trademark/logo usage guidelines, if any, provided by Customer to eGain. With these limited exceptions, eGain agrees that it may not use Customer's name, logo or any other trademarks (including in any press releases, customer "case studies," and the like) without Customer's prior consent. + +12. Miscellaneous. This Agreement, including Exhibit A and any other exhibits hereto, constitutes the entire agreement of the parties, and supersedes any prior or contemporaneous agreements between the parties, with respect to the subject of this Agreement. Except as otherwise expressly provided herein, this Agreement may be modified only by a writing signed by an authorized representative of each party. This Agreement shall be governed by and construed in accordance with the laws of the State of California exclusive of its conflict of laws principles. Notices under this Agreement shall be in writing, addressed to the party at its last-provided address, and shall be deemed given when delivered personally, or by e-mail (with confirmation of receipt) or conventional mail (registered or certified, postage prepaid with return receipt requested). Nothing contained in this Agreement is intended or is to be construed to constitute eGain and Customer as partners or joint venturers or + + + + + +either party as an agent of the other. If any provision of this Agreement shall be declared invalid, illegal or unenforceable, all remaining provisions shall continue in full force and effect. All waivers of any rights or breach hereunder must be in writing to be effective, and no failure to enforce any right or provision shall be deemed to be a waiver of the same or other right or provision on that or any other occasion. Neither party may assign or otherwise transfer its rights and/or obligations under this Agreement without the prior written consent of the other party. Notwithstanding the foregoing, no consent shall be required for an assignment of this Agreement made pursuant to a merger, consolidation, or the acquisition of all or substantially all of the business and assets of a party. This Agreement will bind and inure to the benefit of the parties and their successors and permitted assigns. + +Each party agrees to the terms and conditions contained in this Agreement. + +Customer: Eliance Corporation + +Name:/s/ Title: ___________________________ _________ + +Signature:______________________ Date:__________ + +eGain Communications Corporation: + +Name:/s/ Title: ___________________________ _________ + +Signature:______________________ Date:__________ \ No newline at end of file diff --git a/full_contract_txt/WELLSFARGOMORTGAGEBACKEDSECURITIES2006-6TRUST_05_11_2006-EX-10.3-Yield Maintenance Agreement.txt b/full_contract_txt/WELLSFARGOMORTGAGEBACKEDSECURITIES2006-6TRUST_05_11_2006-EX-10.3-Yield Maintenance Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..5a8eaf1b781c53a89d3be79db42f3f14ed6e511d --- /dev/null +++ b/full_contract_txt/WELLSFARGOMORTGAGEBACKEDSECURITIES2006-6TRUST_05_11_2006-EX-10.3-Yield Maintenance Agreement.txt @@ -0,0 +1,293 @@ +EXHIBIT 10.3 + +Yield Maintenance Agreement + +[LOGO UBS] + +Date: 27 April 2006 + +To: Wells Fargo Bank, N.A., not individually, but solely as Master Servicer on behalf of Wells Fargo Mortgage Backed Securities 2006-6 Trust ("Counterparty") + +Attention: Swaps Administration + +From: UBS AG, London Branch ("UBS AG") + +Subject: Interest Rate Cap Transaction UBS AG Ref: 37346733 + +Dear Sirs + +The purpose of this communication is to confirm the terms and conditions of the Transaction entered into between us on the Trade Date specified below. This Confirmation constitutes a "Confirmation" as referred to in the Master Agreement or Agreement specified below. + +The definitions contained in the 2000 ISDA Definitions as published by the International Swaps and Derivatives Association, Inc., are incorporated into this Confirmation. In the event of any inconsistency between any of the definitions listed above and this Confirmation, this Confirmation will govern. + +If you and we are parties to a master agreement that governs transactions of this type (whether in the form of the 1992 ISDA Master Agreement (Multicurrency-Cross Border)(the "ISDA Form") or any other form (a "Master Agreement"), then this Confirmation will supplement, form a part of, and be subject to that Master Agreement. If you and we are not parties to such a Master Agreement, then you and we agree to use all reasonable efforts promptly to negotiate, execute and deliver an agreement in the form of the ISDA Form, with such modifications as you and we will in good faith agree. Upon the execution by you and us of such an agreement, this Confirmation will supplement, form a part of and be subject to and governed by that agreement, except as expressly modified below. Until we execute and deliver that agreement, this Confirmation, together with all other documents referring to the ISDA Form (each a "Confirmation") confirming transactions (each a "Transaction") entered into between us (notwithstanding anything to the contrary in a confirmation), shall supplement, form a part of, and be subject to an agreement in the form of the ISDA Form as if we had executed an agreement in such form (but without any Schedule except for the election of the laws of New York as the Governing Law and U.S. Dollars as the Termination Currency) on the Trade Date of the first Transaction between us (hereinafter the "Agreement"). In the event of any inconsistency between the provisions of any such Agreement and this Confirmation, this Confirmation will prevail for the purposes of this Transaction. + +The terms of the particular Swap Transaction to which this Confirmation relates are as follows: + +General Terms + +Trade Date: 27 April 2006 + +Effective Date 01 April 2006 + +Termination Date: 1 April 2009 + +Calculation Amount: The lesser of (a) USD 20,000,000.00 and (b) the aggregate Principal Balance (as defined in the Pooling and Servicing Agreement) of the Class I-A-22 Certificates as of the last day of the relevant Calculation Period. + +Seller of the Cap: UBS AG + +Buyer of the Cap: Counterparty + +Calculation Agent: UBS AG + +Business Days: New York + +Broker: None + +Fixed Amounts + +Fixed Rate Payer: Counterparty + +Fixed Amount: USD[ ] + +Fixed Rate Payer Payment Date: 27 April 2006 + +Business Day Convention: Not Applicable + +Floating Amounts + + + + + +Floating Rate Payer: UBS AG + +Cap Rate: 5.0 percent per annum + +Floating Amount: To be determined in accordance with the following formula: Greater of (1)Calculation Amount * Floating Rate Day Count Fraction * (Floating Rate Option - Cap Rate) and (2) 0 + +Floating Rate Option: USD-LIBOR-BBA + +Designated Maturity: One Month + +Spread: None + +Floating Rate Day Count 30/360 Fraction: + +Floating Rate Payer Period 01 January, 01 February, 01 March, 01 April, End Dates: 01 May, 01 June, 01 July, 01 August, 01 September, 01 October, 01 November and 01 December, in each year, from and including 01 May 2006, up to and including the Termination Date, subject to adjustment in accordance with the Business DayConvention specified immediately below, and thereshall be No Adjustment to the Period End Dates. + +Floating Rate Payer Payment Delayed Payment shall be applicable. The Dates: FloatingRate Payer Payment Dates shall be two Business Days prior to 25 January, 25 February, 25 March, 25 April, 25 May, 25 June, 25 July, 25 August, 25 September, 25 October, 25 November and 25 December, in each year, from and including 25 May 2006, up to and including 25 April 2009, notwithstanding the specified &bbsp; Termination Date, subject to adjustment in accordance with the Business Day Convention specified immediately below. + +Reset Dates: First day of each Calculation Period. + +Business Day Convention: Modified Following + +Additional Provisions + +(i) "Specified Transaction" shall have the meaning specified in Section 14 of the ISDA Form. + +(ii) The "Breach of Agreement" provisions of Section 5(a)(ii) of the ISDA Form will be applicable to UBS AG and inapplicable to the Counterparty. + +(iii) The "Credit Support Default" provisions of Section 5(a)(iii) of the ISDA Form will be inapplicable to UBS AG and the Counterparty. + +(iv) The "Misrepresentation" provisions of Section 5(a)(iv) of the ISDA Form will be inapplicable to UBS AG and the Counterparty. + +(v) The "Default Under Specified Transaction" provisions of Section 5(a)(v) of the ISDA Form will be inapplicable to UBS AG and the Counterparty. + +(vi) The "Cross Default" provisions of Section 5(a)(vi) of the ISDA Form will be inapplicable to UBS AG and the Counterparty. + +(vii) The "Credit Event Upon Merger" provisions of Section 5(b)(iv) of the ISDA Form will be inapplicable to UBS AG and the Counterparty. + +(viii) The "Automatic Early Termination" provision of Section 6(a) of the ISDA Form will be inapplicable to UBS AG and the Counterparty. + +(ix) Severability. If any term, provision, covenant, or condition of this Agreement, or the application thereof to any party or circumstance, shall be held to be invalid or unenforceable (in whole or in part) for any reason, the remaining terms, provisions, covenants, and conditions hereof shall continue in full force and effect as if this Agreement had been executed with the invalid or unenforceable portion eliminated, so long as this Agreement as so modified continues to express, without material change, the original intentions of the parties as to the subject matter of this Agreement and the deletion of such portion of this Agreement will not substantially impair the respective benefits or expectations of the parties; provided, however, that this severability provision will not be applicable if any provision of Section 2, 5, 6 or 13 (or any definition or provision in Section 14 to the extent it relates to, or is used in or in connection with, such section) is held to be invalid or unenforceable, provided, further, that the parties agree to first use reasonable efforts to amend the affected provisions of Section 2, 5, 6 or 13 (or any definition or provision in Section 14 to the extent it relates to, or is used in or in connection with, such section) so as to preserve the original intention of the parties. + +The parties shall endeavor to engage in good faith negotiations to replace any invalid or unenforceable term, provision, covenant or condition with a valid or enforceable term, provision, covenant or condition, the economic effect of which comes as close as possible to + + + + + +that of the invalid or unenforceable term, provision, covenant or condition. + +(x) Consent to Recording. Each party hereto consents to the monitoring or recording, at any time and from time to time, by the other party of any and all communications between officers or employees of the parties, waives any further notice of such monitoring or recording, and agrees to notify its officers and employees of such monitoring or recording. + +(xi) Waiver of Jury Trial. EACH PARTY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING IN CONNECTION WITH THIS AGREEMENT, ANY CREDIT SUPPORT DOCUMENT TO WHICH IT IS A PARTY, OR ANY TRANSACTION. EACH PARTY ALSO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO THE OTHER PARTY'S ENTERING INTO THIS AGREEMENT. + +(xii) Fully Paid Transaction. Notwithstanding the terms of Sections 5 and 6 of the Agreement, if Counterparty has satisfied all of its payment obligations under Section 2(a)(i) of the Agreement with respect to this Transaction, and unless UBS AG is required to return (whether pursuant to an order of a court with due authority to cause UBS AG to be required to return any such payment to Counterparty (or any duly authorized representative thereof) or whether otherwise pursuant to appropriate proceedings to return to Counterparty (or any duly authorized representative thereof)) or UBS AG otherwise returns to Counterparty (or any duly authorized representative thereof) upon demand of Counterparty (or any duly authorized representative thereof) any portion of such payment, then: (a) the occurrence of an event described in Section 5(a) of the Agreement with respect to Counterparty shall not constitute an Event of Default or Potential Event of Default with respect to Counterparty as the Defaulting Party in respect of this Transaction and (b) UBS AG shall be entitled to designate an Early Termination Date pursuant to Section 6 of the Agreement in respect of this Transaction only as a result of a Termination Event set forth in either Section 5(b)(i) or Section 5(b)(ii) of the Agreement with respect to UBS AG as the Affected Party or Section 5(b)(iii) of the Agreement with respect to UBS AG as the Burdened Party. For purposes of the Transaction to which this Confirmation relates, Counterparty's only obligation under Section 2(a)(i) of the Agreement is to pay the Fixed Amount on the Fixed Rate Payer Payment Date, each as defined in this Confirmation. + +(xiii) Governing Law. The parties to this Agreement hereby agree that the law of the State of New York shall govern their rights and duties in whole without regard to the conflict of law provisions thereof (other than New York General Obligations Law Sections 5-1401 and 5-1402). + +(xiv) Non-Recourse. Notwithstanding any provision herein or in the ISDA Form to the contrary, the obligations of Counterparty hereunder are limited recourse obligations of Counterparty, payable solely from the Trust Estate (as defined in the Pooling and Servicing Agreement) and the proceeds thereof to satisfy Counterparty's obligations hereunder. In the event that the Trust Estate and proceeds thereof should be insufficient to satisfy all claims outstanding and following the realization of the Trust Estate and the distribution of the proceeds thereof in accordance with the Pooling and Servicing Agreement, any claims against or obligations of Counterparty under the ISDA Form or any other confirmation thereunder, still outstanding shall be extinguished and thereafter not revive. + +(xv) Set-Off. Notwithstanding any provision of this Agreement or any other existing or future agreement, each party irrevocably waives any and all rights it may have to set off, net, recoup or otherwise withhold or suspend or condition payment or performance of any obligation between it and the other party hereunder against any obligation between it and the other party under any other agreements. The provisions for Set-off set forth in Section 6(e) of the Agreement shall not apply for purposes of this Transaction; provided, however, that upon the designation of any Early Termination Date, in addition to, and not in limitation of any other right or remedy under applicable law, UBS AG may, by notice to Counterparty require Counterparty to set off any sum or obligation that UBS AG owed to Counterparty against any collateral currently held by Counterparty that UBS AG has posted to Counterparty, and Counterparty shall effect such setoff promptly, if and to the extent permitted to do so under applicable law, provided that Counterparty's exercise of this setoff is not stayed or otherwise delayed by order of any court, regulatory authority or other governmental agency or any receiver other person appointed in respect of UBS AG or any of its property. + +(xvi) Proceedings. UBS AG covenants and agrees that it will not institute against or join any other person in instituting against the Counterparty any bankruptcy, reorganization, arrangement, insolvency, winding up or liquidation proceedings, or other proceedings under any United States federal or state law, or other bankruptcy, insolvency, liquidation, or similar law, in connection with any obligations relating to this Transaction or otherwise prior to the date that is one year and one day or, if longer, the applicable preference period after all the Certificates (as defined below) have been paid in full; provided, that this paragraph shall not restrict or prohibit UBS AG, after the filing of any proceeding filed independently of UBS AG, from joining any other person, including without limitation the Master Servicer, in any bankruptcy, reorganization, arrangement, insolvency, moratorium, liquidation or other analogous proceedings relating to Counterparty under any bankruptcy or similar law. + + + + + +(xvii) The ISDA Form is hereby amended as follows: for the purposes of this Transaction, the word "third" shall be replaced by he word "first" in the third line of Section 5(a)(i) of the ISDA Form; provided, however, that notwithstanding the foregoing, an Event of Default shall not occur under either if, as demonstrated to the reasonable satisfaction of the other party, (a) the failure to pay or deliver is caused by an error or omission of an administrative or operational nature; and (b) funds or the relevant instrument were available to such party to enable it to make the relevant payment or delivery when due; and (c) such relevant payment is made within the earlier of (a) three Business Days following receipt of written notice from an the other party of such failure to pay or (b) 12:00 p.m. Eastern Standard Time on the Distribution Date (as defined in the Pooling and Servicing Agreement) immediately following the failure to pay. + +(xviii) Multibranch Party. For the purpose of Section 10(c) of the Agreement: + +(i) UBS AG is a Multibranch Party and may act through its branches in any of the following territories or countries: England and Wales, France, Hong Kong, United States of America, Singapore, Sweden and Switzerland. + +(ii) Counterparty is not a Multibranch Party. + +(xix) Offices. Section 10(a) of the ISDA Form shall apply with respect to UBS AG. + +(xx) Payments on Early Termination. For the purpose of Section 6(e) of this Agreement: + +(i) Market Quotation will apply. (ii) The Second Method will apply. + +(xxi) Event of Default relating to Bankruptcy. Clause (2) of Section 5(a)(vii) shall not apply to Counterparty. + +(xxii) "Affiliate" will have the meaning specified in Section 14 of the ISDA Form Master Agreement, provided that the Counterparty shall be deemed to not have any Affiliates for purposes of this Agreement, including for purposes of Section 6(b)(ii). + +(xxiii) Compliance with Regulation AB. + +(i) UBS AG agrees and acknowledges that Wells Fargo Asset Securities Corporation (the "Depositor") is required under Regulation AB under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended (the "Exchange Act") ("Regulation AB"), to disclose certain financial information regarding UBS AG, depending on the aggregate "Significance Percentage" (as defined in Item 1115 of Regulation AB) of all Transactions under this Agreement, together with any other transactions that fall within the meaning of "derivative contracts" for the purposes of Item 1115 of Regulation AB between UBS AG and Counterparty, as calculated from time to time in accordance with the Calculation Methodology (as defined below). + +(ii) It shall be a swap disclosure event ("Swap Disclosure Event") if, on any Business Day after the date hereof, the Depositor notifies UBS AG the Significance Percentage has reached one of the thresholds for significance of derivative contracts set forth in Item 1115 of Regulation AB (based on a reasonable determination by the Depositor, in good faith and using the Calculation Methodology, of such Significance Percentage). + +(iii) Upon the occurrence of a Swap Disclosure Event, UBS AG, at its own expense, shall (a) provide to the Depositor the applicable Swap Financial Disclosure (as defined below), (b) secure another entity to replace UBS AG as party to this Agreement on terms substantially similar to this Agreement and subject to prior notification to the Swap Rating Agencies, which entity (or a guarantor therefor) meets or exceeds the Approved Rating Thresholds (or which satisfies the Rating Agency Condition) and which entity is able to provide the appropriate Swap Financial Disclosure or (c) obtain a guaranty of UBS AG's obligations under this Agreement from an affiliate of UBS AG that is able to comply with the financial information disclosure requirements of Item 1115 of Regulation AB, such that disclosure provided in respect of the affiliate will, in the judgment of counsel to the Depositor, satisfy any disclosure requirements applicable to the Swap Provider, cause such affiliate to provide Swap Financial Disclosure and cause such affiliate to provide indemnity for the Swap Financial Disclosure that is reasonably acceptable to the Depositor. If permitted by Regulation AB, any required Swap Financial Disclosure may be provided by reference to or incorporation by reference from reports filed pursuant to the Exchange Act. + +(iv) UBS AG agrees that, in the event that UBS AG provides Swap Financial Disclosure to the Depositor in accordance with paragraph (iii)(a) above, or causes its affiliate to provide Swap Financial Disclosure to the Depositor in accordance with paragraph (iii)(c) above, it will indemnify and hold harmless the Depositor, its respective directors or officers and any person controlling the Depositor, from and against any and all losses, claims, damages and liabilities (any "Damage") caused by any untrue statement or alleged untrue statement of a material fact contained in such Swap Financial Disclosure or caused by any omission or alleged omission to state in such Swap Financial Disclosure a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; provided, however that the foregoing shall not apply to any Damage caused by the negligence or any willful action of the Depositor or any other party (other than UBS AG or any of its affiliates or any of their respective agents), including without limitation any failure to calculate the Significance Percentage according to the terms of this Agreement or to make any + + + + + +filing as and when required under Regulation AB. + +(v) In the event that UBS AG provides the information referred to above, such information shall be provided not later than five (5) business days prior to the date in which the Master Servicer is required to file a Form 10-D for such Distribution Date. + +For the purposes hereof: + +"Calculation Methodology" means such method for determining maximum probable exposure of a derivative contract as reasonably determined by the Depositor. + +"Swap Financial Disclosure" means the financial information specified in Item 1115 of Regulation AB relating to the applicable Significance Percentage and any necessary auditors consents relating to such financial information. + +Additional Termination Events: + +The following Additional Termination Events will apply to UBS AG: + +1. Ratings Event. If a Ratings Event (as defined below) has occurred and UBS AG has not complied with the requirements set forth in the succeeding paragraph within the 30 day time period specified therein, then an Additional Termination Event shall have occurred with respect to UBS AG and UBS AG shall be the sole Affected Party with respect to such an Additional Termination Event. + +Rating Agency Downgrade: + +If a Ratings Event occurs with respect to UBS AG, then UBS AG shall, at its own expense, (i) assign this Transaction hereunder to a third party within thirty (30) days of such Ratings Event that meets or exceeds, or as to which any applicable credit support provider meets or exceeds, the Approved Rating Threshold (as defined below) on terms substantially similar to this Confirmation or (ii) deliver collateral acceptable in a form and amount acceptable to Fitch Ratings ("Fitch") and Moody's Investors Service Inc. ("Moody's) within thirty (30) days of such Ratings Event and subject to written confirmation from Fitch and Moody's that delivery of such collateral in the context of such downgrade will not result in a withdrawal, qualification or downgrade of the then current ratings assigned to the Certificates. For the avoidance of doubt, a downgrade of the rating on Wells Fargo Mortgage Backed Securities 2006-6 Trust, Mortgage Pass-Through Certificates, Series 2006-6, Class I-A-22 (the "Certificates") could occur in the event that UBS AG does not post sufficient collateral. + +For purposes of this Transaction, a "Ratings Event" shall occur with respect to UBS AG if its long term unsecured debt rating (the "Long Term Rating") ceases to be rated at least "A1" by Moody's Investors Service, Inc. or at least "A+ by Fitch Ratings (such ratings being referred to as the "Approved Ratings Threshold"), (unless, within 30 days after such withdrawal or downgrade Fitch and Moody's have reconfirmed the rating of the Certificates which were in effect immediately prior to such withdrawal or downgrade). + +2. Swap Disclosure Event. If upon the occurrence of a Swap Disclosure Event (as defined in paragraph (xxiii) above), UBS AG has not, within 5 business days after such Swap Disclosure Event complied with any of the provisions set forth in paragraph (xxiii) above, then an Additional Termination Event shall have occurred with respect to UBS AG with UBS AG as the sole Affected Party with respect to such Additional Termination Event. + +Transfer, Amendment and Assignment: + +No transfer, amendment, waiver, supplement, assignment or other modification of this Transaction (other than the pledge of this Transaction to the Master Servicer pursuant to the Pooling and Servicing Agreement) shall be permitted by either party unless Moody's and Fitch have been provided notice of the same and confirm in writing (including by facsimile transmission) that they will not downgrade, qualify, withdraw or otherwise modify its then-current rating of the Certificates; provided however that except with respect to a transfer at the direction of UBS, nothing in this provision shall impose any obligation on UBS to give notice to any rating agency. + +Permitted Security Interest: + +For purposes of Section 7 of the Agreement, UBS AG hereby consents to the Permitted Security Interest. + +"Permitted Security Interest" means the collateral assignment by the Counterparty of the Cap Collateral to the Master Servicer pursuant to the Pooling and Servicing Agreement, and the granting to the Master Servicer of a security interest in the Cap Collateral pursuant to the Pooling and Servicing Agreement. + +"Cap Collateral" means all right, title and interest of the Counterparty in this Agreement, each Transaction hereunder, and all present and future amounts payable by UBS AG to the Counterparty under or in connection with the Agreement or any Transaction governed by the Agreement, whether or not evidenced by a Confirmation, including, without limitation, any transfer or termination of any such Transaction. + +Payer Tax Representations + +For the purposes of Section 3(e) of the Master Agreement, UBS AG will make the + + + + + +following representation and Counterparty will not make the following representation: it is not required by any applicable law, as modified by the practice of any relevant governmental revenue authority, of any Relevant Jurisdiction to make any deduction or withholding for or on account of any Tax from any payment (other than interest under Section 2(e), 6(d)(ii) or 6(e) of the Master Agreement) to be made by it to the other party under this Agreement. In making this representation, it may rely on (i) the accuracy of any representations made by the other party pursuant to Section 3(f) of the Master Agreement, (ii) the satisfaction of the agreement contained in Section 4(a)(i) or 4(a)(iii) of the Master Agreement and the accuracy and effectiveness of any document provided by the other party pursuant to Section 4(a)(i) or 4(a)(iii) of this Agreement and (iii) the satisfaction of the agreement of the other party contained in Section 4(d) of this Agreement, provided that it shall not be a breach of this representation where reliance is placed on clause (ii) and the other party does not deliver a form or document under Section 4(a)(iii) of this Agreement by reason of material prejudice to its legal or commercial position. + +Payee Tax Representations + +For the purpose of Section 3(f) of the ISDA Form, UBS AG makes the following representation: + +It is a non-U.S. branch of a foreign person as that term is used in section 1.1441-4(a)(3)(ii) of the United States Treasury Regulations (the "Regulations") for United States federal income tax purposes. + +For the purpose of Section 3(f) of the ISDA Form, the Counterparty makes the following representations: + +1. The Counterparty is a New York common law trust and is regarded as a Real Estate Mortgage Investment Conduit for federal income tax purposes. + +2. It is a "U.S. person" (as that term is used in section 1.1441-4(a)(3)(ii) of the United States Treasury Regulations for United States federal income tax purposes. + +Agreement to Deliver Documents + +For purposes of Section 4(a)(i) and (ii) of the ISDA Form, the parties agree to deliver the following documents as applicable. + +Party required Form/Document/ Date by which to deliver Certificate to be delivered document + +UBS AG and Any form or document Promptly upon Counterparty required or reasonably reasonable requested to allow the demand by the other party to make other party. payments without any deduction or withholding for or on account of any Tax, or with such deduction or withholding at a reduced rate. Counterparty One duly executed and Promptly upon completed U.S. Internal reasonable Revenue Service Form demand by the W-9 (or successor other party thereto) + +Party required to Form/Document/ Date by which to Covered by Section deliver document Certificate be delivered 3(d) Representation UBS AG Any documents required Upon the Yes by the receiving party execution and to evidence the delivery of authority of the this Agreement delivering party for it and such to execute and deliver Confirmation this Confirmation and to evidence the authority of the delivering party to perform its obligations under this Agreement or the Transaction governed by this Confirmation + +UBS AG A certificate of an Upon the Yes authorized officer of the execution and party, as to the delivery of incumbency and authority this of the respective Confirmation officers of the party signing this Confirmation + +UBS AG Opinion of Counsel for No later than No UBS AG 15 days after + + + + + +closing + +Relationship Between Parties Each party will be deemed to represent to the other party on the date on which it enters into this Transaction that (in the absence of a written agreement between the parties which expressly imposes affirmative obligations to the contrary for this Transaction): + +(a) Non-Reliance. Each party is acting for its own account, and has made its own independent decisions to enter into this Transaction and this Transaction is appropriate or proper for it based upon its own judgment and upon advice from such advisers as it has deemed necessary. Each party is not relying on any communication (written or oral) of the other party as investment advice or as a recommendation to enter into this Transaction; it being understood that information and explanation relating to the terms and conditions of this Transaction shall not be considered investment advice or a recommendation to enter into this Transaction. No communication (written or oral) received from the other party shall be deemed to be an assurance or guarantee as to the expected results of this Transaction. + +(b) Assessment and Understanding. Each party is capable of assessing the merits of and understands (on its own behalf or through independent professional advice), and accepts, the terms, conditions and risks of this Transaction. Each party is also capable of assuming and assumes, the risks of this Transaction. + +(c) Status of the Parties. Neither party is acting as a fiduciary for or as an adviser to the other in respect of this Transaction. + +(d) Eligible Contract Participant. Each party constitutes an "eligible contract participant" as such term is defined in Section 1(a)12 of the Commodity Exchange Act, as amended. + +Master Servicer Capacity. It is expressly understood and agreed by the parties hereto that insofar as this Confirmation is executed by the Master Servicer (i) this Confirmation is executed and delivered by Wells Fargo Bank, N.A., not in its individual capacity, but solely as Master Servicer with respect to Wells Fargo Mortgage Backed Securities 2006-6 Trust (the "Trust") under the Pooling and Servicing Agreement, dated as of April 27, 2006 (the "Pooling and Servicing Agreement") in the exercise of the powers and authority conferred upon and vested in it thereunder and pursuant to instruction set forth therein, (ii) each of the representations, undertakings and agreements herein made on the part of the Trust is made and intended not as a personal representation, undertaking or agreement by Wells Fargo Bank, N.A., but is made and intended for the purpose of binding only the Trust, (iii) nothing herein contained shall be construed as imposing any liability on Wells Fargo Bank, N.A. individually or personally, to perform any covenant either express or implied contained herein, all such liability, if any, being expressly waived by the parties hereto and by any Person claiming by, through or under the parties hereto, and (iv) under no circumstances shall Wells Fargo Bank, N.A. in its individual capacity be personally liable for the payment of any indebtedness or expenses or be personally liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by the Trust under this Confirmation or any other related documents (other than the Master Servicer's express obligations under the Pooling and Servicing Agreement). + +References in this clause to "a party" shall, in the case of UBS AG and where the context so allows, include references to any affiliate of UBS AG. + +Account Details for UBS AG: Currency: USD Correspondent Bank: UBS AG, STAMFORD BRANCH Swift Address: UBSWUS33XXX Favour: UBS AG LONDON BRANCH Swift Address: UBSWGB2LXXX Account No: 101-wa-140007-000 + +Offices (a) The office of UBS AG for the Interest Rate Cap Transaction is London; and The office of Counterparty for the Interest Rate Cap Transaction is: + +9062 Annapolis Road Columbia, Maryland 21045 Attn: Client Manager - WFMBS 2006-6 Telephone: 410.884.2000 Fax: 410.715.2380 + +Contact Names at UBS AG: Payment Inquiries Elisa Doctor Email: &bbsp; DL-USOTCRATES-SETTS@ubs.com + +Phone: 203.719.1110 Pre Value Payments: Pre Value Payment 203.719.1110 Investigations: Post Value Payments: Post Value Payment 203.719.1110 Investigations: Confirmation Queries: Confirmation Control: 203.719.3373 ISDA Documentation: Credit Risk Management: 212.713.1170 Swift: UBSWGB2L Fax: 203.719.0274 Address: UBS AG + + + + + +100 Liverpool Street London EC2M 2RH + +Address for notices or communications to the Counterparty: + +9062 Old Annapolis Road Columbia, MD 21045 Attn: Corporate Trust Services - WFMBS 2006-6 + +Payments to Counterparty: Wells Fargo Bank, NA San Francisco, CA ABA #: 121-000-248 Acct #: 3970771416 Acct Name: SAS Clearing For Further Credit: Interest Rate Cap, Account # 50915701 + +(For all purposes) + +Please confirm that the foregoing correctly sets forth the terms and conditions of our agreement by executing a copy of this Confirmation and returning it to us or by sending to us a letter or facsimile substantially similar to this letter, which letter or facsimile sets forth the material terms of the Transaction to which this Confirmation relates and indicates your agreement to those terms or by sending to us a return letter or facsimile in the form attached. + +This Confirmation may be executed in several counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. + +Yours Faithfully For and on Behalf of UBS AG, London Branch + +By: /s/ Todd Harper By: /s/ Mark J. Evans II + +Name : Todd Harper Name : Mark J. Evans II Title : Associate Director Title: Director UBS Operations Operations + +Acknowledged and Agreed by Wells Fargo Bank N.A., not individually, but solely as Master Servicer on behalf of Wells Fargo Mortgage Backed Securities 2006-6 Trust By: /s/ Jennifer L. Richardson + +Name : Jennifer L. Richardson Title : Assistant Vice President + +UBS AG London Branch, 1 Finsbury Avenue, London, EC2M 2PP UBS AG is a member of the London Stock Exchange and is regulated in the UK by the Financial Services Authority. Representatives of UBS Limited introduce trades to UBS AG via UBS Limited. \ No newline at end of file diff --git a/full_contract_txt/WESTERN COPPER - NON-COMPETITION AGREEMENT.txt b/full_contract_txt/WESTERN COPPER - NON-COMPETITION AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..875de4f0c43615cae1cbc0077f67c70adaba0b3f --- /dev/null +++ b/full_contract_txt/WESTERN COPPER - NON-COMPETITION AGREEMENT.txt @@ -0,0 +1,251 @@ +NON COMPETITION AGREEMENT AND RIGHT OF FIRST OFFER + +THIS AGREEMENT is dated May 3,2006. + +BETWEEN: + +GLAMIS GOLD LTD., a company incorporated under the laws of the Province of British Columbia, having an office at 310-5190 Neil Road, Reno, Nevada 89502 + +("Glam is") + +AND: + +WESTERN COPPER CORPORATION, a company incorporated under the laws of the Province of British Columbia, having an office at 2050-1111 West Georgia Street, Vancouver. B.C. V6E 4M3 + +("Western Copper") + +WHEREAS: + +(A) Glamis, Western Copper and Western Silver Corporation ("Western Silver") are parties to an arrangement agreement dated as of February 23, 2006 (the "Arrangement Agreement"), pursuant to which, among other things, Western Copper will acquire certain assets of Western Silver and Glamis will become the sole shareholder of Western Silver and the indirect owner, through Western Silver, of certain corporations and mineral properties in Mexico (the "Arrangement"); and + +(B) It is an obligation under the Arrangement Agreement that Western Copper agree not to compete with Glamis in certain areas of Mexico and that Glamis grant Western Copper a right of first offer with respect to the proposed disposition by Glamis of mineral properties or legal interests therein located in Mexico that Glamis acquired under the Arrangement. + +NOW THEREFORE TIHS AGREEMENT WITNESSES that in consideration of the mutual covenants and agreements contained herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto covenant and agree as follows: (Scheme B. mca) + +1I629<<7J + + + + + +PART I + +INTERPRETATION + +Definitions + +1.1 In this Agreement, including the recitals, except as expressly provided or unless the context otherwise requires, + +(a) Affiliate means, in respect of a party hereto, a corporation which is the subsidiary of the party or vice versa or where each of the party and the corporation is controlled by the same person, + +(b) Area of Non-Competition means the State of Zacatecas, Mexico and the area extending 20 kilometers in all directions from the external boundary of each mineral property owned or controlled by Western Silver or in which Western Silver holds any legal interest, in Mexico, as at the Effective Date, + +(c) Business Day means a day which is not a Saturday, Sunday or a civic or statutory holiday in Reno, Nevada and Vancouver, British Columbia, + +(d) Closing means the completion of the transactions contemplated by the Arrangement Agreement, + +(e) Designated Mineral Property means a mineral property or individual mineral concession within a mineral property, that is owned or controlled by Western Silver or in which Western Silver holds any legal interest in Mexico as of the Effective Date, + +(f) Effective Date means May 3, 200ri or such later date as determined under the Arrangement Agreement, + +(g) Mining Activities means any acquisition of mineral rights or any mineral exploration or development activities, in any manner whatsoever, and + +(h) Person means an individual, corporation, body corporate, firm, limited liability company, parmership, syndicate, joint venture, society, association, trust or unincorporated organization. + +Interpretation + +1.2 In this Agreement, except as otherwise expressly provided or unless the context otherwise requires, + +(a) the terms "this Agreement", "hereof', "herein", "hereunder" and similar expressions refer to this Agreement as from time to time supplemented or amended by one or more agreements entered into pursuant to the applicable provisions of this Agreement and not to any particular section or other portion, + +1162967.3 + + + + + +- 3 ' + +(b) a reference to a Part means a Part of this Agreement and the symbol § followed by a number or some combination of numbers and letters refers to the provision of this Agreement so designated and the symbol § followed by a letter within a provision refers to a clause within such provision, + +(c) the headings used in this Agreement are for convenience only and do not form a part of this Agreement and are not intended to interpret, define or limit the scope, extent or intent of this Agreement or any provision hereof, + +(d) the word "including", when following any general statement, term or matter, is not to be construed to limit such general statement, term or matter to the specific items or matters set forth immediately following such word or to similar items or matters, whether or not non-limiting language (such as "without limitation" or "but not limited to" or words of similar import) is used with reference thereto, but rather is to be construed to permit such general statement, term or matter to refer to all other items or matters that could reasonably fall within its broadest possible scope, + +(c) if any date on which any action is required to be taken hereunder by any of the parties is not a Business Day, such action will be required to be taken on the next succeeding day which is a Business Day. and + +(f) words imparting the masculine gender include the feminine or neuter gender and the wrords in the singular include the plural and vice versa. + +Subsidiaries and Affiliates + +1.3 Bach of the parties hereto agree that all of their covenants, agreements and obligations hereunder shall extend to and be binding upon and may be enforced against any and all of their respective subsidiaries and other Affiliates, as well as against the parties themselves, as the case may be, and that the names of Glamis and Western Copper will herein be deemed to refer collectively to Glamis and all of its subsidiaries and other Affiliates and to Western Copper and all of its subsidiaries and other Affiliates, respectively. + +PART 2 + +NON COMPETITION AND RIGHT OF FIRST REFUSAL + +Non-Competition by Western Copper + +2.1 Western Copper covenants and agrees with Glamis that, for a period of 2 years after the Effective Date, it will not, directly or indirectly, either individually or in partnership or jointly or in conjunction with any Person, which will include being a principal, agent, shareholder, or advisor of such Person or in any other manner whatsoever, + +(a) carry on or be engaged in Mining Activities, or + +i 162967.3 + + + + + +-4- + +(b) advise, lend money to, guarantee the debts or obligations of or permit its name to be used by any Person who carries on or is engaged in Mining Activities, + +in the Area of Non-Competition. + +Right of First Offer + +2.2 Glamis covenants and agrees with Western Copper that if at any time it intends to dispose of a Designated Mineral Property for cash consideration or by abandonment, it will give Western Copper notice (the ' Disposition Notice") of the intended disposition. For a period of 30 days from the time of delivery of the Disposition Notice Glamis will, if requested by Western Silver, entertain an offer from Western Copper to acquire the Designated Mineral Property. In the ease of a Designated Mineral Property that Glamis intends to dispose of for cash consideration, the parties will negotiate in good faith to reach a mutually agreeable agreement for the sale to Western Copper of the [Designated Mineral Property. If Glamis and Western Copper are unable to negotiate an acceptable agreement with respect to the Designated Mineral Property within the 30 day period, Glamis may thereafter dispose of the Designated Mineral Property as it sees til in its absolute discretion. If Glamis does not dispose of the Designated Mineral Property within a period of 3 months from the first to occur of the date that Glamis and Western Copper acknowledge failure to negotiate an acceptable agreement with respect to the Designated Mineral Property and the end of the 30 day period, the provisions of this section 2.2 will once again apply to any intended disposition of the Designated Mineral Property by Glamis. In the case of a Designated Mineral Property that Glamis intends to abandon, Glamis wall, if requested by Western Copper, transfer such Designated Mineral Property to Western Copper at no cost save and except for the reasonable costs of transfer incurred by Glamis. + +PARTS + +ENFORCEMENT + +Glamis' Remedies for Breach + +3.1 Western Copper acknowledges and agrees that a breach of its covenants contained in this Agreement would result in damage to Glamis that could not adequately be compensated for by monetary award alone, Accordingly, Western Copper agrees that in the event of any such breach, in addition to any other remedies available to Glamis at law or otherwise, Glamis will be entitled, as a matter of right and without the need to prove damage, to apply to a court of competent jurisdiction for relief by way of injunction, restraining order, decree or otherwise as may be appropriate to ensure compliance by Western Copper with the provisions of this Agreement and to restrain any breach of this Agreement by Western Copper, Any remedy expressly set forth in this §3.1 wall be in addition to and not inclusive of or dependent upon the exercise of any other remedy available to Glamis at law or otherwise. + +Western Copper's Remedies for Breach + +3.2 Glamis acknowledges and agrees that a breach of its covenants contained in this Agreement would result in damage to Western Copper that could not adequately be compensated + +1162967.3 + + + + + +-5- + +ibr by monetary award alone. Accordingly, Glamis agrees that in the event of any such breach, in addition to any other remedies available to Western Copper at law or otherwise, Western Copper will be entitled, as a matter of right and without the need to prove damage, to apply to a court of competent jurisdiction for relief by way of injunction, restraining order, decree or otherwise as may be appropriate to ensure compliance by Glamis with the provisions of this Agreement and to restrain any breach of this Agreement by Glamis. Any remedy expressly set forth in this §3.2 will be in addition to and not inclusive of or dependent upon the exercise of any other remedy available to Western Copper at law or otherwise + +Restrictions Reasonable + +3.3 Each of Western Copper and Glamis agree that all restrictions in this Agreement applicable to them are reasonable and valid, and all defences to the strict enforcement thereof by Western Copper or Glamis, as the case may be, arc hereby waived by them. + +Cumulative Remedies + +3.4 No remedy provided for in this Agreement is intended to be exclusive of any other remedy and each such remedy will be cumulative and will be in addition to every other remedy given hereunder or available at law or in equity, + +Western Copper's Right of Termination + +3.5 W'estem Copper may, at its option, terminate this Agreement by written notice to Glamis, effective immediately upon delivery of the notice, should Glamis cease conducting business in the normal course, become insolvent, make a general assignment for the benefit of creditors, suffer or permit the appointment of a receiver for its business or assets or avail itself of, or become subject to, any proceedings under the Bankruptcy and Insolvency Act (Canada) or any other statute of any province or state relating to insolvency or the protection of rights of creditors. + +Glamis' Right of TerminaHon + +3.6 Glamis may, at its option, terminate this Agreement by written notice to Western Copper, effective immediately upon delivery of the notice, should Western Copper cease conducting business in the normal course, become insolvent, make a general assignment for the benefit of creditors, suffer or permit the appointment of a receiver for its business or assets or avail itself of, or become subject to, any proceedings under the Bankruptcy and Insolvency Act (Canada) or any other statute of any province or state relating to insolvency or the protection of rights of creditors. + +1!62967.3 + + + + + +~6- + +PART4 + +GENERAL PROVISIONS + +Time of Essence + +4.1 Time is of the essence in the performance of all obligations under this Agreement. + +Notices + +(a) Any notice or other communication required or permitted to be delivered pursuant to this Agreement will be deemed to have been well and sufficiently given if in writing and delivered or transmitted by facsimile addressed as follows: + +(i) if to Glamis: + +Suite 310-5190 Neil Road Reno, Nevada 89502 + +Telecopier: (775) 827-5044 Attention: Charles A. Jeannes + +(ii) if to Western Copper: + +Suite 2050-1111 West Georgia Street Vancouver, B.C, V6E 4M3 + +Telecopier: (604) 669-2926 Attention: F. Dale Corman + +(b) Any such notice, direction or other instrument, whether delivered or transmitted by facsimile transmission, will be deemed to have been given at the time and on the date on which it was delivered to or received in the office of the addressee, as the case may be, if delivered or transmitted prior to 5:00 p.m. (Pacific time) on a Business Day or at 9:00 a.m. (Pacific time) on the next succeeding Business Day if delivered or transmitted subsequent to such time; + +(c) Either party hereto may change its address for service from time to time by notice given to the other party hereto in accordance with the foregoing; and + +(d) Any notice, direction or other instrument delivered under this Agreement will be signed by one or more duly authorized officers of the party delivering it. + +4.2 The delivery of any notice, direction or other instrument, or a copy thereof, to a party hereunder will be deemed to constitute the representation and warranty of the party who has delivered it to the other party that such delivering party' is authorized to deliver such notice, direction or other instrument at such time under this Agreement (unless the receiving party has + +1162967 } + + + + + +-7- + +actual knowledge lo the contrary) and the receiving party will not be required to make any inquiry to confirm such authority. + +Entire Agreement + +4.3 The provisions in this Agreement constitute the entire agreement among the parties hereto with respect to the matters agreed to or expressly contemplated herein and supersede all previous expectations, understandings, communications, representations and agreements between the parties. + +Amendments + +4.4 No alteration or amendment of this Agreement will lake effect unless the same is in writing duly executed by each of the parties in the same manner as this Agreement. + +Waiver + +4.5 No waiver of any provision of this Agreement shall be binding on any of the parties hereto unless consented to in writing by such party. No waiver of any provision of this Agreement by either of the parties hereto shall constitute a waiver of any other provision, nor shall any waiver constitute a continuing waiver unless otherwise clearly provided. + +Further Assurances + +4.6 Each party hereto covenants and agrees with each other party hereto that it will at all times hereafter execute and deliver, at the request of the other, all such further documents, deeds and instruments, and will do and perform all such acts as may be necessary to give full effect to the intent and meaning of this Agreement. + +Successors and Assigns + +4.7 This Agreement will enure to the benefit of and be binding upon the respective heirs, executors, administrators, personal representatives, successors and permitted assigns of each party hereto. + +Governing Law and Attornment + +4.8 This Agreement will be governed exclusively by and construed in accordance with the laws of the Province of British Columbia, and the parties attorn to the exclusive jurisdiction of the Courts of British Columbia. + +Severability + +4.9 The parties covenant and agree that if any part of this Agreement is determined to be void or unenforceable, such determination will not be deemed to affect or impair the validity of any other part of this Agreement. + +I62W.3 + + + + + +Termination + +- 8 - + +4.10 This Agreement may be terminated at any time by agreement in writing executed by the parties. + +Counterparts + +4.11 This Agreement may be executed in counterparts, each of which when delivered (whether in originally executed form or by facsimile transmission) will be deemed to be an original and all of which together will constitute one and the same document. + +IN WITNESS WHEREOF this Agreement has been executed by the parties hereto on the day and year first above written. + +GLAMIS GOLD LTD. + +Per: Authorized Signatory + +WESTERN COPPER CORPORATION + +Per: Authorized Signatory + +1162967.3 \ No newline at end of file diff --git a/full_contract_txt/WHITESMOKE,INC_11_08_2011-EX-10.26-PROMOTION AND DISTRIBUTION AGREEMENT.txt b/full_contract_txt/WHITESMOKE,INC_11_08_2011-EX-10.26-PROMOTION AND DISTRIBUTION AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..4fb7fc519281948111bd9a31fc86628917378eac --- /dev/null +++ b/full_contract_txt/WHITESMOKE,INC_11_08_2011-EX-10.26-PROMOTION AND DISTRIBUTION AGREEMENT.txt @@ -0,0 +1,978 @@ +Exhibit 10.26 CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS DOCUMENT. EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN ASTERISK [*], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. PROMOTION AND DISTRIBUTION AGREEMENT This Promotion and Distribution Agreement including all exhibits (collectively referred to as the "Agreement"), effective as of 1 August 2011 (the "Effective Date"), is made by and between Whitesmoke Inc., with registered offices/principle place of business at 501 Silverside Road, Suite 105, Wilmington DE 19809, USA, ("Distributor"), and Google Inc whose principle place of business is at 1600 Amphitheatre Parkway, Mountain View, CA 94043, USA ("Google"). + + + + "Bundle" means the Distribution Products bundled with the Distributor App(s). "Chrome Browser" means the machine-readable binary code version of the Google Chrome browser provided to Distributor in connection with this Agreement, and any modifications or updates to it that Google may provide to Distributor. "Chrome Browser Installer" means: (a) the machine-readable binary code version of the installer provided to Distributor in connection with this Agreement that installs the Chrome Browser, and any modifications, updates or upgrades to it that Google may provide to Distributor; and (b) the Chrome Browser Criteria Checker. "Chrome Use Event" means an event that indicates an [* ] has occurred. "Chrome Server Communication" means a communication that, as determined solely by Google, is sent for the purpose of indicating that an End User: (a) is [* ] to the [* ]; and (b) has kept the [* ] open for a minimum of [* ] during a [* ] (whether during the [* ] or a [* ] of the Chrome Browser). "Criteria Checker" means a set of software routines (and any updates to them) provided to Distributor by Google, as part of a software library, that check certain criteria (as determined by Google and modified by Google from time to time) to determine if the Chrome Browser or Google Toolbar (as applicable) can be installed on an End User's operating system. Accordingly, "Chrome Browser Criteria Checker" means the Criteria Checker provided by Google in respect of the Chrome Browser and "Google Toolbar Criteria Checker" means the Criteria Checker provided by Google in respect of the Google Toolbar. "Distributor App(s)" means the following application (and successor versions of such software): the trial version of the WhiteSmoke Writer (currently called WhiteSmoke 2011) available on a worldwide basis, but for the avoidance of doubt shall not mean any other products of Distributor, including without limitation the full paid version of Whitesmoke Writer or any version of Whitesmoke "Translator" software, regardless of whether Whitesmoke Writer incorporates any translation functionality. *Confidential treatment requested Google Confidential + +1. DEFINITIONS + +1.1 In this Agreement unless expressly stated otherwise: + + - 1 - + + + + + + "Distribution Products" means: + + + + + + "End User" means an end user customer of Distributor who is located in the Territory. "EULA" means the end user license agreement applicable to a Product, which end user license agreement may be updated or modified by Google in its sole discretion from time to time. "False" means a "false" response (or equivalent negative response) given by the Criteria Checker. "Google Program Guidelines" means the policy and implementation guidelines applicable to the Products as updated by Google and provided to Distributor from time to time. "Google Toolbar" means the machine-readable binary code version of the Google toolbar for Internet Explorer provided to Distributor in connection with this Agreement, and any modifications or updates to it that Google may provide to Distributor. "Google Toolbar Installer" means: (a) the machine-readable binary code version of the installer provided to Distributor in connection with this Agreement that installs the Google Toolbar, and any modifications, updates or upgrades to it that Google may provide to Distributor; and (b) the Google Toolbar Criteria Checker. "Google Trademarks" means all names, trade names, trademarks, and logos used by Google in connection with the Products. "Group Company" means in relation to each of the parties: + + + + "Install Completed" occurs when an End User has completed the install process for a Bundle and the install completed screen is shown to the End User in accordance with Exhibit B. + + + + (a) as at the Effective Date, the Google Toolbar Installer and the Chrome Browser Installer; and + + (b) if Distributor notifies Google at any time after the Effective Date that it wishes to bundle the full Google Toolbar and Google provides its approval in writing (including email), the Google Toolbar; and + + (c) if Distributor notifies Google at any time after the Effective Date that it wishes to bundle the full Chrome Browser and Google provides its approval in writing (including email), the Chrome Browser. + + (a) any parent company of that party; and + + (b) any corporate body of which that party directly or indirectly has control or which is directly or indirectly controlled by the same person or group of persons as that party. + + - 2 - + + + + + + "Intellectual Property Rights" means all copyright, moral rights, patent rights, trade marks, design right, rights in or relating to databases, rights in or relating to confidential information, rights in relation to domain names, and any other intellectual property rights (registered or unregistered) throughout the world. "IPO" means an initial public offering of all or any of the shares in Distributor or securities representing those shares for the purposes of being publically traded or quoted on an investment exchange. "Maximum Distribution Commitment" means [* ] , as may be increased by Google pursuant to Clause 4.2 (Maximum Distribution Commitment). "[ * ]" means a [ * ] or [ * ] entered by the [ * ] into the [ * ] located at the [ * ] of the [ * ]. [ * ] do not include the events listed in Clause 3.9(c)(ii). "Products" means the Google Toolbar, Google Toolbar Installer, Chrome Browser and Chrome Browser Installer. "[ * ]" means the [ * ] received by a [ * ] that, as determined solely by [ * ]: (a) is [ * ] by a [ * ] obtained via a [ * ]; (b) is the next [ * ] that occurs following a [ * ]; and (c) includes the [ * ]. [ * ] only include those [ * ] which meet the requirements set out in Clause 3.9(c)(iii). "[ * ]" means a [ * ] received by [ * ] that, as determined solely by [ * ]: (a) is [ * ] by a [ * ] obtained via a [ * ]; (b) is sent for the [ * ] of indicating that an [ * ]: (i) has opened [ * ] following installation of the [ * ], (ii) is [ * ] to the [ * ], and (iii) has [ * ] a [ * ] into the [ * ]; and (c) includes the correct [ * ]. [ * ] only include those [ * ] which meet the requirements set out in Clause 3.9(c)(i). "Term" means the earlier of: (a) the end of the two year period from the Effective Date to 31 July 2013; or (b) the last day of the calendar month within which the Maximum Distribution Commitment is reached. "Territory" means those countries listed in Exhibit A, excluding any territory or state prohibited under Clause 11.5. "True" means a "true" response (or equivalent positive response) given by the Criteria Checker. + + + + + + *Confidential treatment requested Google Confidential + + + +1.2 In this Agreement, the words "include" and "including" will not limit the generality of any words preceding them. + +2. LICENSE GRANTS AND RESTRICTIONS + +2.1 Products License Grant. Subject to the terms and conditions of this Agreement, Google grants to Distributor a [* ] license during the Term to: (a) bundle the Distribution Products, in machine-readable binary code format only, solely with Distributor App(s); (b) distribute Bundles directly (or indirectly, subject to Clause 2.2 (Third Party Distribution)) to End Users in the Territory; (c) when indicated by the applicable Criteria Checker and requested by the End User in accordance with clause 3.2 (Form of Distribution Offering), install the Chrome Browser or the Google Toolbar (as applicable) on the End User's system using the Google Installers; and (d) reproduce (or have reproduced by Third Party Distributors as defined in Clause 2.2 (Third Party Distribution)), the Distribution Products to the extent necessary to exercise the rights granted in (a), (b) and (c). + + - 3 - + + + + + + + + + + + + + + + + + + + + *Confidential treatment requested Google Confidential + + + +2.2 Third Party Distribution. Distributor may distribute Bundles to third parties solely for redistribution of such Bundles by those third parties directly to End Users (such third parties, "Third Party Distributors"); provided that: (a) in connection with any and all such offers or distributions, Distributor shall, and shall ensure that each Third Party Distributor shall, distribute Bundles in a manner that is no less protective of the Products and Google than the terms of this Agreement, and (b) Google in its sole discretion may direct Distributor to cease distributing Bundles to any Third Party Distributor that in Google's sole discretion would either: (i) harm or devalue Google's business, brand or name, or (ii) violate Google's privacy policy, and Distributor shall cause any such Third Party Distributor to cease distribution of Bundles as soon as practicable but in no event longer than [ * ] following receipt of such request from Google. Distributor shall ensure that no Third Party Distributor bundles anything in or with Bundles without Google's prior written approval, and if Google grants its approval, Distributor shall provide Google with information about any such bundling arrangements at Google's request. + +2.3 License Grant Restrictions. Distributor shall not, and shall not allow any third party to (except to the extent that such prohibitions are not permitted by law): (a) disassemble, de-compile or otherwise reverse engineer the Products or otherwise attempt to learn the source code or algorithms underlying the Products; (b) modify the Products, create derivative works from or based on the Products; (c) except as expressly set out in this Agreement, provide, sell, license, distribute, lease, lend, or disclose the Products to any third party; (d) use the Products for timeshare, service bureau, or other unauthorised purposes; or (e) exceed the scope of any license granted to Distributor under this Agreement. + +2.4 Trademark License and Use. Subject to the terms and conditions of this Agreement, Google grants to Distributor a limited, [ * ] license during the Term to use the Google Trademarks, in accordance with Google's trademark usage guidelines, solely to market and promote the Products consistent with this Agreement, provided that all use of the Google Trademarks shall be subject to Google's prior review and advance written consent. All uses of the Google Trademarks, and all goodwill associated therewith, shall inure solely to the benefit of Google. + +2.5 Trademark Restrictions. Distributor shall not remove, modify, adapt, or prepare derivative works of any Google Trademarks or Google copyright notices, or other Google proprietary rights notices. + +2.6 Updated Versions of Distribution Products. Google may request that Distributor distribute the latest version of the Distribution Products. Distributor shall begin such distribution within [ * ] following Google's request. + +3. DISTRIBUTION AND OTHER OBLIGATIONS + +3.1 Delivery. Google shall deliver the Distribution Products electronically to Distributor at a [ * ] following the Effective Date and prior to Launch (as defined in Clause 3.4 (Launch)). + + - 4 - + + + + + + + + + + + + + + + + + + + + User to review such EULA via a hyperlink to such EULA: and (c) a button on which each End User may click indicating agreement to the terms of such EULA. In the event that an End User does not affirmatively agree to install the Google Toolbar or Chrome Browser, by clicking on the button to agree to the terms of the applicable EULA, then the Google Toolbar or Chrome Browser (as applicable) shall not be installed on such End User's computer. + + + + *Confidential treatment requested Google Confidential + + + +3.2 Form of Distribution Offering. Distributor shall ensure that the form of any offering of the Products by Distributor, including the timing, relative and absolute placement, visual presentation to End Users, initial launch of the Products (and any modifications to them) and the presentation of any other applications or products offered with the Products, conforms to the Google Program Guidelines and to Exhibit B of this Agreement. Except as set out in Clause 2 (Licence Grant and Restrictions) and except for End Users as expressly set out in this Agreement, Distributor shall not offer or distribute the Products to any third party. If, during the Term, Exhibit B and the Google Program Guidelines conflict, Exhibit B will take precedence with respect to the conflicting terms. + +3.3 Guidelines for Applications. Distributor shall comply, and shall ensure that each Third Party Distributor complies, with the Guidelines for Applications set out in Exhibit C. + +3.4 Launch. Distributor shall begin distribution of Bundles in accordance with this Agreement ("Launch") within [ * ] days following the Effective Date (the date of such Launch, the "Launch Date"). Beginning on the Launch Date and continuing throughout the Term, Distributor shall ensure that [ * ]Distributor App distributed by or on behalf of Distributor is bundled with the Distribution Products as set out in this Agreement. + +3.5 Exclusivity. + + (a) [ * ] + + (b) [ * ]. + +3.6 EULA. In connection with Distributor's distribution of the Products under this Agreement, and before the Google Toolbar or Chrome Browser can be installed by an End User, Distributor shall provide each End User with: (a) a clear statement inviting the End User to agree to the terms of the applicable EULA; (b) the opportunity for each End + +3.7 Accurate Reproduction. Distributor agrees that in connection with its exercise of the right granted in Clause 2.1 (Products Licence Grant) it shall accurately reproduce the Distribution Products and shall not: (a) modify any Product (including modify the Chrome Browser or Google Toolbar configuration files or registry settings); or (b) insert into the Products any viruses, worms, date bombs, time bombs, or other code that is specifically designed to cause the Products to cease operating, or to damage, interrupt, or interfere with any Products or End User data. + +3.8 [ * ]. During the Term and for a period of [ * ] following the expiration or termination of this Agreement, Distributor shall not, and shall not engage any third party to: (a) restrict, modify, or reconfigure in any manner any of the Products that have been installed by End Users (such End Users, "Installed Base End Users") in connection with this Agreement; or (b) engage in activities that encourage Installed Base End Users to modify, uninstall or reconfigure any or the Products. + + - 5 - + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + *Confidential treatment requested Google Confidential + + + +3.9 Reporting. + + (a) By Distributor. During the Term, Distributor shall, on a [ * ] basis, no later than the [ * ] of the following [ * ], provide Google with a report identifying, on a country-by-country basis, the total number of: (i) Bundles distributed; (ii) Installs Completed; (iii) Google Toolbar offers presented to End Users; and (iv) Chrome Browser offers presented to End Users, in the preceding [ * ]. + + (b) By Google. During the Term, Google shall on a [ * ] basis, provide Distributor with a report of the [ * ] of [ * ] and [ * ] in the preceding [ * ] broken down on a [ * ] basis and by the [ * ] in Exhibit A. + + (c) Parameters. Distributor acknowledges, and shall cooperate with Google to [ * ] that: + + (i) [ * ]: (A) are determined on a [ * ] (B) are only [ * ]; (C) do not include [ * ] from computers on which another [ * ] of the [ * ] is [ * ]; and (D) do not include use of the [ * ] in any [ * ] other than [ * ]. + + (ii) [ * ] do not include: (A) [ * ] that has been [ * ], (B) [ * ] or [ * ] in any area other than in the [ * ], or (C) any other [ * ] of the [ * ] designed to artificially [ * ]. + + (iii) [ * ]: (A) are determined on a [ * ]; (B) are only [ * ]; (C) are not sent in response to [ * ] from computers on which another [ * ] of the [ * ] is [ * ]; and (D) are sent only in response to [ * ] from computers that meet the [ * ] requirements as determined by the [ * ]. + + (d) Records and Audit Rights. Distributor will keep and maintain complete and accurate books, records, and accounts relating to this Agreement. During the Term, and for a period of [ * ] thereafter, Google may audit Distributor's relevant records to confirm Distributor's compliance with this Agreement. Google's auditor will only have access to those books and records of Distributor which are reasonably necessary to confirm such compliance. + +4. PAYMENT TERMS + +4.1 Payments. Subject to Clause 4.2, during the Term on a [ * ] basis, Google shall pay to Distributor the applicable payment set out in Exhibit A for each [ * ] and each [ * ] that occurred during the previous [ * ]. Google shall determine the [ * ] in respect of which each [ * ] and [ * ] took [ * ] (using the relevant [ * ]). Notwithstanding the foregoing, in no event will the [ * ] of [ * ] by Google to Distributor for all [ * ] and all [ * ] in respect of [ * ] (as set out in Exhibit A) exceed [ * ] ([ * ]) of the [ * ] to Distributor for such [ * ]. + +4.2 [ * ]. Notwithstanding anything to the contrary, in no event shall the [ * ] paid or payable to Distributor by Google pursuant to Clause 4.1 (Payments) exceed the [ * ]. Google shall have the right, at its sole option, to increase the [ * ] by providing written notice to Distributor no later than [ * ] prior to the end of the Term. The foregoing sentence shall not relieve Google of any payment obligations that have accrued prior to the achievement of the [ * ]. + +4.3 Payment Terms. All payments under this Agreement shall be made in [ * ] in the [ * ] following the [ * ] for which the payments are applicable. The party receiving payment will be responsible for any bank charges assessed by the recipient's bank. In addition to other rights and remedies Google may have, Google may offset any payment obligations to Distributor that Google may incur under this Agreement against any product or service fees owed to Google and not yet paid by Distributor under any agreement between Distributor and Google. Google may also withhold and offset against its payment obligations under this Agreement, or require Distributor to pay to Google within [ * ] of any invoice, any amounts Google [ * ] overpaid to Distributor in prior periods. + + - 6 - + + + + + + + + + + + + + + + + + + + + + + + + + + + + *Confidential treatment requested Google Confidential + + + +4.4 Taxes. All payments under this Agreement are exclusive of taxes imposed by any governmental entity. Google shall pay any applicable taxes imposed by governmental agencies with respect to the transactions under this Agreement other than taxes based upon Distributor's income. Google shall promptly provide to Distributor a copy of an official tax receipt or other appropriate evidence of any taxes imposed on payments made under this Agreement. When Distributor has the legal obligation to collect any applicable taxes, the appropriate amount shall be invoiced to and paid by Google unless Google provides Distributor with a valid tax exemption certificate authorised by the appropriate taxing authority. + +4.5 Interest. Distributor may charge interest at the rate of [ * ] above the base rate of Barclays Bank PLC from time to time, from the due date until the date of actual payment, whether before or after judgment, on any payment pursuant to this Clause 4 (Payment Terms) which is overdue. + +5. TERM AND TERMINATION + +5.1 Term. This Agreement shall commence on the Effective Date and, unless earlier terminated as set out in this Agreement, shall continue for the Term. + +5.2 Termination for breach. A party may suspend performance and/or terminate this Agreement, with immediate effect, if the other party: + + (a) is in material breach of this Agreement where the breach is incapable of remedy; or + + (b) is in material breach of this Agreement where the breach is capable of remedy and fails to remedy that breach within thirty (30) days after receiving written notice of such breach. + +5.3 Termination for insolvency. A party may suspend performance and/or terminate this Agreement with immediate effect, if: + + (a) the other party enters into an arrangement or composition with or for the benefit of its creditors, goes into administration, receivership or administrative receivership, is declared bankrupt or insolvent or is dissolved or otherwise ceases to carry on business; or + + (b) any analogous event happens to the other party in any jurisdiction in which it is incorporated or resident or in which it carries on business or has assets. + +5.4 Change of Control. [ * ] may terminate this Agreement immediately upon written notice if there is a Change of Control of [ * ]. In this Clause the term "Control" shall mean the possession by any person(s) directly or indirectly of the power to direct or cause the direction of another person and "Change of Control" is to be construed accordingly. [ * ] expected to experience, or [ * ] is experiencing, such Change of Control shall notify [ * ] in writing of this before or within [ * ] after the Change of Control. If [ * ] has not exercised its right of termination under this Clause within [ * ] following the later of (i) the receipt of notice of [ * ] Change of Control or (ii) the Change of Control event, that [ * ]. The parties acknowledge that as at the Effective Date, [ * ] may [ * ] its [ * ]. [ * ] agrees not to exercise its termination right under this clause 5.4 if [ * ], provided that following [ * ]: + + - 7 - + + + + + + + + + + For the avoidance of doubt, if following [ * ] there is a transfer of shareholding or interests in Distributor to any existing or new shareholder(s) which results in any person or persons subsequently gaining Control of Distributor, then Google may exercise its right to terminate in accordance with this clause 5.4.. + + + + *Confidential treatment requested Google Confidential + + + + 5.4.1. no one person Controls [ * ] (other than an[ * ] which is not a [ * ] of [ * ] (as determined by [ * ]in its sole discretion)); and + + 5.4.2. no [ * ] of [ * ] (as determined by [ * ] in its sole discretion) holds a [ * ] or [ * ] in [ * ]. + +5.5 Additional Termination Rights. Google may terminate this Agreement immediately upon written notice to Distributor if: (a) Distributor breaches Clause 2 (License Grants and Restrictions), Clause 3.6 (EULA), Clause 3.7 (Accurate Reproduction), or Clause 6 (Confidential Information), (b) if Google believes, in good faith, that the Distributor has violated or caused Google to violate any Anti-Bribery Laws (as defined in Clause 8.5) or that such a violation is reasonably likely to occur, or (c) Distributor is in material breach of this Agreement more than [ * ] notwithstanding any cure of such breaches. Notwithstanding anything to the contrary, in the event that the government or controlling body of any country or territory in which Bundles are distributed imposes any law, restriction or regulation that makes it illegal to distribute the Products, or any portion of them, into such country or territory, or if any such law, restriction or regulation places a substantial burden on Google, where substantial is measured with respect to Google's economic benefit under this Agreement, as determined by Google in its reasonable and good faith judgment (such substantial burden, a "Substantial Burden") then either party or Google (in the case of a Substantial Burden) may require the suspension of all distributions of Bundles in such country or territory until such time as such law, restriction or regulation is repealed, nullified or modified such that it is no longer illegal or a Substantial Burden (in the case of Google), as applicable, for Bundles to be distributed in such country or territory ("Special Suspension"); provided, however, that Distributor's obligations under Clause 3.5 (Exclusivity) shall not apply in respect of the relevant country or territory during any period of Special Suspension. If a period of Special Suspension extends for more than [ * ] may then terminate this Agreement (in part) in respect of the affected country or territory only, such termination to take effect upon written notice[ * ]. [ * ] will use its reasonable endeavours to provide [ * ] with [ * ] (to the extent it is practicable to do so) of the [ * ] or [ * ] (which was commenced by [ * ]). + +5.6 Effect of Termination. Upon expiration or termination of this Agreement: (a) all rights and licenses granted under this Agreement shall immediately cease; (b) Distributor shall (and shall ensure that any Third Party Distributors shall) immediately stop reproducing the Products and offering or distributing Bundles; (c) Distributor shall return or destroy (and a duly appointed officer of Distributor shall certify to such destruction) all copies of the Products and any other Google Confidential Information in its possession; and (d) the fees payable to Distributor shall immediately cease accruing and Google shall within [ * ] following such expiration or termination pay to Distributor any undisputed amounts which have accrued from the time of the most recent payment to Distributor through the date of termination or expiration of this Agreement. Clauses 5.6 (Effect of Termination), 6 (Confidential Information), 7 (Proprietary Rights), 9 (Limitation of Liability), 10 (Indemnification) and 11 (General) shall survive the termination or expiration of this Agreement. + + - 8 - + + + + + + + + + + + + + + + + + + + + + + *Confidential treatment requested Google Confidential + + + +6. CONFIDENTIAL INFORMATION + +6.1 In this Agreement, "Confidential Information" means information disclosed by (or on behalf of) one party to the other party under this Agreement that is marked as confidential or, from its nature, content or the circumstances in which it is disclosed, might reasonably be supposed to be confidential, including the terms and conditions (including the Exhibits) of this Agreement. It does not include information that the recipient already knew, that becomes public through no fault of the recipient, that was independently developed by the recipient or that was lawfully given to the recipient by a third party. + +6.2 The recipient of any Confidential Information shall not disclose that Confidential Information, except to Group Companies, employees and/or professional advisors who need to know it and who have agreed in writing (or in the case of professional advisors are otherwise bound) to keep it confidential. The recipient shall ensure that those people and entities: (a) use such Confidential Information only to exercise rights and fulfill obligations under this Agreement, and (b) keep such Confidential Information confidential. The recipient may also disclose Confidential Information when required by law, or the regulation or rule of a major US stock exchange or the United States Securities and Exchange Commission, after giving reasonable notice to the discloser, such notice to be sufficient to give the discloser: (i) the opportunity to seek confidential treatment, a protective order or similar remedies or relief prior to disclosure (if applicable) and (ii) (where any disclosure is necessary) time to consult on and approve the form and content of the relevant disclosure. The parties shall then promptly discuss and agree in good faith on the form and content of the disclosure (each acting reasonably). + +7. PROPRIETARY RIGHTS + +7.1 Distributor acknowledges that Google and/or its licensors own all right, title and interest, including all Intellectual Property Rights in and to the Products and the Google Trademarks and all modifications to them. Distributor has, and shall acquire, no rights in the foregoing except those expressly granted by this Agreement. Google shall not be restricted from selling, licensing, modifying, or otherwise distributing the Products and/or the Google Trademarks to any third party. + +7.2 Google acknowledges that Distributor and/or its licensors own all right, title and interest, including all Intellectual Property Rights, in and to the Distributor Apps and all [ * ] to [ * ]. Except as expressly set forth in this Agreement, Distributor shall not be [ * ]from [ * ], or otherwise [ * ]the Distributor App(s) or other products of Distributor to [ * ]. + +8. WARRANTIES + +8.1 Each party warrants to the other that it will use reasonable care and skill in complying with its obligations under this Agreement. Distributor also represents and warrants that it will undertake commercially reasonable endeavours in good faith to comply with Google's business partner due diligence process including providing requested information. + + - 9 - + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + *Confidential treatment requested Google Confidential + + + +8.2 Google warrants that the Distribution Products will for a period of [ * ] from the date of their supply to Distributor be free from any defect which has a materially adverse effect on their use or operation. + +8.3 If any of the warranties in Clause 8.1 or 8.2 is breached by Google, Distributor must tell Google as soon as possible. Distributor must give Google a reasonable time to fix the problem and (if necessary) to supply Distributor with a corrected or replacement version of the Distribution Product or a way to work-around the problem that is not materially detrimental to Distributor, or to re-perform any relevant services. This will be done without any additional charge to Distributor. If Google is able to do this within a reasonable time, Google will have no other obligations or liability in relation to that breach. + +8.4 Google will not be liable for breach of any of the warranties or other terms in this Agreement to the extent that the breach arises from: + + (a) use of the Products other than in accordance with normal operating procedures; + + (b) any alterations or maintenance to the Products done by anyone other than Google or someone authorised by Google; + + (c) any problem with a computer on which the Products are installed, or with any equipment connected to that computer or any other software which is installed on that computer; + + (d) any abnormal or incorrect operating conditions; or + + (e) use of the Products in combination with any other hardware or software, unless this use has been approved by Google in writing. + +8.5 Distributor will comply with all applicable commercial and public anti-bribery laws, including, without limitation, the UK's Bribery Act 2010 and the U.S. Foreign Corrupt Practices Act of 1977 ("Anti-Bribery Laws"), which prohibit (amongst other things) corrupt offers of anything of value, either directly or indirectly, to a government official to obtain or keep business. ''Government officials" include any government employee, candidate for public office, and employee of government-owned or government-controlled companies, public international organisations, and political parties. Furthermore, Distributor will not make any facilitation payments, which are payments to induce officials to perform routine functions they are otherwise obligated to perform. + +8.6 No conditions, warranties or other terms apply to the Products, [ * ] or to any other goods or services supplied under this Agreement unless expressly set out in this Agreement. Subject to Clause 9.1, no implied conditions, warranties or other terms apply (including any implied terms as to satisfactory quality, fitness for purpose or conformance with description). + +9. LIMITATION OF LIABILITY + +9.1 Nothing in this Agreement shall exclude or limit either party's liability for: + + (a) death or personal injury resulting from the negligence of either party or their servants, agents or employees; + + (b) fraud or fraudulent misrepresentation; + + - 10 - + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + In this Clause 9.4, "Contract Year" means a period of one year starting on the Effective Date or the relevant anniversary of the Effective Date (as appropriate). If the amount referred to in (b) above cannot be calculated accurately at the time the relevant liability is to be assessed (the "Applicable Time"), it shall be calculated on a pro-rata basis as X/Y x Z. Where: X = the total sum paid and payable to the Distributor pursuant to Clause 4 in the relevant Contract Year prior to the Applicable Time; Y = the number of days elapsed in the relevant Contract Year prior to the Applicable Time; and Z = 365 *Confidential treatment requested Google Confidential + + + + (c) breach of any implied condition as to title or quiet enjoyment; and + + (d) misuse of confidential information. + +9.2 Nothing in this Agreement shall exclude or limit either party's liability under Clause 10 (Indemnities), or Distributor's liability under Clause 2 (License Grants and Restrictions), Clause 3.5 (Exclusivity), Clause 3.6 (End User License Agreement) and Clause 3.7 (Accurate Reproduction) or Clause [ * ]. + +9.3 Subject to Clauses 9.1 and 9.2, neither party shall be liable under this Agreement (whether in contract, tort or otherwise) for any: + + (a) loss of anticipated savings; + + (b) loss of business opportunity (which for the avoidance of doubt shall not include loss of advertising revenue); + + (c) loss of or corruption of data; + + (d) loss or damage resulting from third party claims; or + + (e) indirect or consequential losses; + suffered or incurred by the other party (whether or not such losses were within the contemplation of the parties at the date of this Agreement). + +9.4 Subject to Clauses 9.1 and 9.2, each party's total liability under or in connection with this Agreement (whether in contract, tort or otherwise) arising in any Contract Year is limited to the greater of: + + (a) [ * ] Euros ([ * ] Euros); and + + (b) [ * ]% of the total payment due to the Distributor in the relevant Contract Year pursuant to Clause 4 (Payment Terms). + + - 11 - + + + + + + + + + + + + + + + + + + + + + + + + + + By Distributor. + + User claim arising out of or resulting from such End Users use of any Distributor App(s), including any actions or claims in product liability, tort, contract or equity. *Confidential treatment requested Google Confidential + + + +10. INDEMNIFICATION BY GOOGLE. + +10.1 Google [ * ] and will indemnify Distributor against all liabilities, costs, damages and expenses (including settlement costs approved in writing by Google and reasonable legal fees [ * ]) suffered or incurred by Distributor arising from any claim from a third party that any Products or any Google Trademark infringe(s) any copyright, trade secret or trademark of such third party (an "IP Claim"), provided that Distributor: + + (a) promptly notifies Google; + + (b) provides Google with reasonable information, assistance and cooperation in responding to and, where applicable, defending such IP Claim; and + + (c) gives Google full control and sole authority over the defence and settlement of such IP Claim. Distributor may appoint its own supervising counsel of its choice at its own expense. + +10.2 Google will not have any obligations or liability under this Clause 10 in relation to any IP Claim arising from: + + (a) use of the Products or Google Trademarks in a modified form or in combination with materials not furnished by Google; + + (b) use of the Products or Google Trademarks other than in accordance with this Agreement; or + + (c) any content, information or data provided to Google by Distributor, End Users or any other third parties; + +10.3 Google may (at its sole discretion) suspend Distributors distribution or use of the Products or the Google Trademarks which are alleged, or believed by Google, to infringe any third party's Intellectual Property Rights, or modify such items to make them non-infringing. if any suspension under this Clause continues for more than 30 days, Distributor may, at any time until use of the distribution or use of the Products or the Google Trademarks is reinstated, terminate this Agreement immediately upon written notice. [ * ] will use reasonable endeavours to [ * ] with [ * ] (to the extent it is practicable to do so) of the [ * ] or [ * ]. + +10.4 Distributor [ * ] and will indemnify Google against all liabilities, costs, damages and expenses (including settlement costs approved in writing by Distributor and reasonable legal fees [ * ]) suffered or incurred by Google or any Google Group Company arising from: (a) Distributor's improper (ie not in accordance with the requirements of this Agreement including the Exhibits) or unauthorised, replication, packaging, marketing, distribution, or installation of the Products, including any breach of Clause 8.5 and any claims based on representations, warranties, or misrepresentations made by Distributor, (b) any claim from a third party that the Distributor App(s) infringe any third party copyright, trademark, or trade secret, or (c) any End + + - 12 - + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + *Confidential treatment requested Google Confidential + + + +10.5 The indemnification obligations set out in Clause 10.4(b) shall exist only if Google: (a) promptly notifies Distributor of such claim, (b) provides Distributor with reasonable information, assistance and cooperation in responding to and, where applicable, defending the lawsuit or proceeding, and (c) gives Distributor full control and sole authority over the defense and settlement of such claim. Google may join in defense with counsel of its choice at its own expense. + +10.6 The foregoing Clauses 10.1 to 10.5 states the parties' entire liability and exclusive remedy with respect to infringement of a third party's Intellectual Property Rights. + +11. GENERAL + +11.1 Publicity. Subject to clause 6 (Confidential Information), neither party may make any public statement regarding the relationship contemplated by this Agreement without the other's prior written approval. + +11.2 Notices. All notices of termination or breach must be in English, in writing, addressed to the other party's Legal Department and sent to Distributor's address set out at the head of this Agreement or to [ * ] (as applicable) or such other address as either party has notified the other in accordance with this Clause. All notices shall be deemed to have been given on receipt as verified by written or automated receipt or electronic log (as applicable). All other notices must be in English, in writing, addressed to the other party's primary contact and sent to their then current postal address or email address. + +11.3 Assignment. [ * ] may [ * ]any of its rights or obligations under this Agreement without the prior written consent of [ * ]. For the avoidance of doubt, a Change of Control shall be deemed an assignment hereunder unless [ * ] does not exercise its [ * ]. + +11.4 Force Majeure. Neither party shall be liable for failure to perform or delay in performing any obligation under this Agreement if the failure or delay is caused by any circumstances beyond its reasonable control. + +11.5 Compliance with Export Laws. Distributor shall comply with all applicable export and re-export control laws and regulations ("Export Laws"), which the parties agree include: (a) the Export Administration Regulations maintained by the U.S. Department of Commerce, (b) trade and economic sanctions maintained by the U.S. Treasury Department's Office of Foreign Assets Control, and (c) the International Traffic in Arms Regulations maintained by the U.S. Department of State. Unless Distributor obtains prior authorisation required by applicable Export Laws, Distributor shall not export any Product to Cuba, Iran, North Korea, Sudan or Syria. + +11.6 No Waiver. Failure or delay in exercising any right or remedy under this Agreement shall not constitute a waiver of such (or any other) right or remedy. + +11.7 Severability. The invalidity, illegality or unenforceability of any term (or part of a term) of this Agreement shall not affect the continuation in force of the remainder of the term (if any) and this Agreement. + +11.8 No Agency. Except as expressly stated otherwise, nothing in this Agreement shall create an agency, partnership or joint venture of any kind between the parties. + +11.9 No Third-Party Beneficiaries. Except as expressly stated otherwise, nothing in this Agreement shall create or confer any rights or other benefits in favour of any person other than the parties to this Agreement. + + - 13 - + + + + + + + + + + + + Signed by the parties on the dates shown below. + + *Confidential treatment requested Google Confidential + + + +11.10 Governing Law. This Agreement is governed by English law and the parties submit to the exclusive jurisdiction of the English courts in relation to any dispute (contractual or non-contractual) concerning this Agreement save that either party may apply to any court for an injunction or other relief to protect its Intellectual Property Rights. If this Agreement is translated into any other language, if there is conflict the English text will take precedence. + +11.11 Counterparts. The parties may execute this agreement in counterparts, which taken together will constitute one instrument. + +11.12 Entire Agreement. Subject to Clause 9.1, this Agreement sets out all terms agreed between the parties in relation to its subject matter and supersedes all previous agreements between the parties relating to the same. In entering into this Agreement neither party has relied on any statement, representation or warranty not expressly set out in this Agreement. + +DISTRIBUTOR GOOGLE INC /[ * ] /s/ [ * ] By By [ * ] [ * ] Name Name [ * ] [ * ] Title Title [ * ] [ * ] Date Date + + - 14 - + + + + + + EXHIBIT A Payments + + *[ * ] ** [ * ]. *Confidential treatment requested Google Confidential + + + +[ * ] [ * ] [ * ] [ * ] [ * ] $ [ * ] [ * ] [ * ] $ [ * ] [ * ] [ * ] $ [ * ] [ * ] [ * ] $ [ * ] [ * ] [ * ] $ [ * ] [ * ] [ * ] $ [ * ] [ * ] [ * ] $ [ * ] [ * ] [ * ] $ [ * ] [ * ] [ * ] $ [ * ] [ * ] [ * ] $ [ * ] [ * ] [ * ] $ [ * ] [ * ] [ * ] $ [ * ] [ * ] [ * ] $ [ * ] [ * ] [ * ] $ [ * ] [ * ] [ * ] $ [ * ] [ * ] [ * ] $ [ * ] [ * ] [ * ] $ [ * ] [ * ] [ * ] $ [ * ] [ * ] [ * ] $ [ * ] [ * ] [ * ] $ [ * ] [ * ]** [ * ]* $ [ * ] + + - 15 - + + + + + + EXHIBIT B Process Flow + + + + + + - 16 - + + + + + + Form of Offering 1 - WhiteSmoke Welcome Screen + + + + + + - 17 - + + + + + + 2-Toolbar offer lf [ * ] Criteria Checker has returned "True" + + *Confidential treatment requested + + + + - 18 - + + + + + + 3-Chrome offer If [ * ] Criteria Checker has not returned 'True" AND [ * ] Criteria Checker has returned "True" + + *Confidential treatment requested + + + + - 19 - + + + + + + 4 - Installation Progress + + Google Confidential + + + + - 20 - + + + + + + 5 - Chrome First Launch If Chrome has been installed + + Criteria Checker During the Term, for each End User who installs the Distributor App, Distributor shall use the [ * ] Criteria Checker to determine if [ * ] can be offered to such End User. If the [ * ] Criteria Checker returns True, Distributor shall offer the End User the opportunity to install the [ * ] in conjunction with the Distributor App. If the [ * ] Criteria Checker returns False Distributor shall: a) not offer the End User the opportunity to install the [ * ] and b) use the [ * ] Criteria Checker to determine whether the [ * ] can be offered to such End User. If the [ * ] Criteria Checker returns True, Distributor shall offer the End User the opportunity to install the [ * ] in conjunction with the Distributor App. If the [ * ] Criteria Checker returns False, Distributor shall not offer such End User the opportunity to install the [ * ]. Prior to Launch, Distributor shall obtain Google's approval of the parameters Distributor uses to call the [ * ] Criteria Checker and [ * ] Criteria Checker Chrome Browser Auto Launch. Distributor shall ensure that the first launch of the Chrome Browser following installation of the Chrome Browser complies with each of the following requirements (the "Chrome Launch Requirements"): (a) The Chrome Browser shall auto-launch immediately prior to the launch of the Distributor App, no earlier and no later. *Confidential treatment requested + + + + - 21 - + + + + + + (b) No advertisements, offers, or other communications shall appear between launch of a Distributor App and launch of the Chrome Browser. (c) Upon launch of the Chrome Browser, the Chrome Browser shall immediately appear on the End User's computer desktop exactly as shown in this Exhibit B. Without limiting the preceding sentence, each of the following shall appear on the End User's desktop exactly as shown in this Exhibit B: (i) the location and size of the Chrome Browser window and the Distributor App window, (ii) the z-order of the Distributor App and the Chrome Browser, and (iii) the number and content of the tabs in the Chrome Browser (i.e., the Chrome Browser shall contain exactly two (2) tabs, with the first tab set to google.com, and the second tab set to http://tools.google.com/chrome/intlfen-US/welcome.html (or such other url as Google may specify). In no event shall the Chrome Browser window be minimized. Notwithstanding the foregoing, Distributor may modify the content and design of the Distributor App window provided that Distributor complies with the other restrictions in this Agreement and obtains Google's prior consent. (d) The tabs in the Chrome Browser and the Omnibox shall be clearly visible to the End User as shown in this Exhibit B, regardless of the resolution of the End User's monitor. In no event shall the tabs in the Chrome Browser or the Omnibox be hidden behind a Distributor App. (e) Distributor shall implement (or, if implemented by Google, Distributor shall not modify) the six-month flag (i.e., the functionality that prevents an End User from receiving more than one (1) offer for the Chrome Browser within any six (6)-month period) unless Google has provided written confirmation (including by email) that the 6-months flag can be turned off. Note that this authorisation may be revoked at any time and Distributor shall then include the 6 months flag again in future builds. + + + + - 22 - + + + + + + EXHIBIT C Guidelines for Applications Bundled with Google Applications Google has observed a significant increase in the number of reports of software that is engaging in deceptive, malicious and other annoying practices that significantly diminish user perception and enjoyment of the internet. These practices include but are not limited to installing software on computers without obtaining informed end user consent (the so-called "drive-by download"), inundating end users with advertisements without adequate attribution or labeling, exposing users to pornographic material without obtaining informed end user consent, obtaining or transmitting personal information about an end user without obtaining informed end user consent, and interfering with an end user's ability to easily uninstall applications the end user does not wish to be on his or her computer. Google does not wish to be associated with these types of practices. Accordingly, Google has developed the Guidelines set forth below to prevent its trademark, other intellectual property, and services from being used in connection with these practices. Google believes that these Guidelines are necessary to protect Google from any allegation that it has contributed to practices that might be viewed as unlawful or actionable; to preserve the reputation of Google as a provider of trusted software and services in a manner that is beneficial and fair to users and other constituents; and to stem the rising incidence of practices that harm users and diminish the perceived value and reliability of the internet, which are essential to Google's business. With this objective in mind, Google has established the following Guidelines to apply to customer Applications that are bundled with any Google Application. Except to the extent Google has otherwise specifically agreed in writing, Google does not grant permission to, and you will not, bundle any Application with a Google Application unless you ensure that any such Application specified in the agreement between you and Google that incorporated these Guidelines complies with these Guidelines. For the avoidance of doubt, by these Guidelines Google does not intend to, and does not, impose any restrictions on what you may do with any Application that is not bundled with a Google Application, bundled with an Application that accesses Google services, or used to access Google services; you remain free to sell any Application you wish (whether or not it complies with these Guidelines) so long as it is not bundled with a Google Application, bundled with an Application that accesses Google services, or used to access Google services. In these Guidelines: (a) "you" and "your" refer to the legal entity(ies) that has entered into the contract with Google into which these Guidelines are incorporated, as well as any person or entity acting on your behalf; and (b) "Application" means any application, plug-in, helper, component or other executable code that runs on a user's computer, examples of which include those that provide browser helper objects, instant messaging, chat, email, data, file viewing, media playing, file sharing, games, internet navigation, search and other services. Google Confidential + + + + - 23 - + + + + + + Google welcomes input about these Guidelines from you and from other interested parties, and is always willing to consider revisions as appropriate to encourage innovation while protecting against deceptive, unfair and harmful practices. Accordingly, Google may update these Guidelines, including the Attachments, from time to time as provided in Section 10 below. If you have any questions about these Guidelines, please do not hesitate to discuss them with your Google account manager. Google Confidential + + + + - 24 - + + + + + + 1. General. 1.1 Approval and Ongoing Compliance. You may bundle Google Applications with Applications only to the extent permitted in the signed written agreement into which these Guidelines have been incorporated. In such instance, you must ensure that your Application both (1) has been approved by Google for the purpose of being bundled with Google Applications in writing in advance, and (2) complies at all times with the requirements outlined herein. To obtain Google's approval for any Applications not expressly approved in your agreement, you must submit a written request. 1.2 No Google Branding or Attribution. Your Application, and any related collateral material (including any Web pages promoting your Application or from which your Application is made available), must not contain any Google branding, trademarks or attribution unless (and then only to the extent) Google expressly consents otherwise in writing. In addition, queries entered into Applications may not resolve to a results page that contains any Google branding, trademarks or attribution unless (and then only to the extent) Google expressly consents otherwise in writing. 2. Prohibited Content. You may not bundle any Google Application with an Application that: (a) contains any viruses, worms, trojan horses, or the like; and (b) is distributed primarily for the purpose of (i) distributing pornographic, obscene, excessively profane, gambling-related, deceptive, fraudulent or illegal content, or (ii) distributing content related to "hacking" or "cracking." 3. Prohibited Behavior. You may not bundle any Google Application with an Application that engages in deceptive, unfair, harassing or otherwise annoying practices. For example, the Application may not: + + + + + + + + Google Confidential + + + + (a) use, or permit an unaffiliated person to use, an end user's computer system for any purpose not understood and affirmatively consented to by the end user (including, without limitation, for purposes of consuming bandwidth or computer resources, sending email messages, launching denial of service attacks, accruing toll charges through a dialer or obtaining personal information from an end user's computer such as login, password, account or other information personal to the end user); + + (b) intentionally create or exploit any security vulnerabilities in end user computers; + + (c) trigger pop-ups, pop-unders, exit windows, or similar obstructive or intrusive functionality, that materially interfere with an end user's Web navigation or browsing or the use of his or her computer; + + (d) repeatedly ask an end user to take, or try to deceive an end user into taking, an action that the end user has previously declined to take (such as repeatedly asking an end user to change his or her home page or some other setting or configuration); + + - 25 - + + + + + + + + + + + + 4. Disclosure and Consent. 4.1 Disclosure and Consent before Installation. You may not bundle any Google Application with any Application unless you (and your distribution and bundling partners, if applicable under the terms of the agreement between you and Google that incorporates these Guidelines) design the installation of any such Application in a manner that ensures that it is installed by end users in a knowing and willful manner - e.g., no "drive-by' downloads or installs. By "distribution partner" we mean any third party who distributes your Application and by "bundling partner" we mean any third party who installs your Application in combination with or alongside one or more other Applications. At a minimum, compliance with this provision requires that, prior to installing your Application, you and any third party distributing or bundling your Application: + + + + + + + + + + 4.2 Disclosure and Consent for Collection and Transmission of Personally Identifiable information. You may not bundle any Google Application with any Application that (1) collects or transmits to any entity other than the end user personally identifiable information, or (2) collects or transmits information related to a user's computer or Internet usage or activity in a manner that could collect or transmit such user's personally identifiable information (such as through keystroke logging), unless prior to the first occurrence of any such collection or transmission you: + + Google Confidential + + + + (e) redirect browser traffic away from valid DNS entries (except that your Application may direct unresolved URLs to an alternative URL designated by you, provided that the page to which the end user resolves adequately informs the end user that you and your Application are the source of that page); + + (f) interfere with the browser default search functionality (except that your Application may permit an end user to change his or her default search engine with proper disclosure, consent and attribution as provided below); or + + (g) engage in activity that violates any applicable Jaw or regulation. + + (a) first, fully, accurately, clearly and conspicuously disclose to end users: + + (i) that they are installing an application, + + (ii) the name of the Application, identifying you as the entity responsible for it, and + + (iii) the principal and significant features and functionality of the Application; and + + (b) then, obtain the end user's affirmative consent to install the Application. + + (a) first, fully, accurately, clearly and conspicuously disclose: + + - 26 - + + + + + + + + + + + + + + 4.3 Disclosure and Consent for Setting Changes. You may not bundle any Google Application with any Application that makes a change to any operating system or Application data setting which will impact the user experience of other Applications (e.g., changing the browser default home page or changing the default application for a file type, such as the default email, browser or media player application), unless prior to making such change you: + + + + Notwithstanding the foregoing, (i) no disclosure and consent need be made for changes to operating system or Application data settings that have only a minor impact on user experience, such as adding a small number of bookmarks to the browser menu or adding an item to a start menu, and (ii) the disclosure and consent requirements of this Section 4.3 will not apply to those setting changes that may be made prior to sale to the end user. 4.4 Method of Disclosure and Consent. In order to satisfy the requirements above, the disclosure of the items specified above (a) must be provided in both (1) the End User License Agreement (EULA) or privacy policy (to the extent required by law or otherwise by industry custom) and (2) separately from the EULA and/or privacy policy (e.g. in installation screens or message boxes, as the case may be), and (b) must be designed so that it will be read by, adequately inform and evidence the consent of a typical Internet user. See Attachment 1 for sample disclosure and consent implementations that would satisfy certain of the requirements above. 4.5 EULA and Privacy Policy. You may not bundle any Google Application with any Application unless it conforms, and is distributed pursuant to a EULA that conforms, with all applicable laws and regulations. In addition, you and your Application must comply with the agreements and representations you make with your end users in your EULA and privacy policy. Your privacy policy must be accessible from your Application in an easily found location. If your Application collects or transmits any other information related to the user's use of his or her computer, but not required to be disclosed and consented to pursuant to Section 4.2, then the collection and use of such other information must be disclosed in your privacy policy. Google Confidential + + + + (i) the type of information collected (described with specificity in the case of personally identifiable information), + + (ii) the method of collection (e.g. by registration, etc.), and + + (iii) the location of (i.e., a link to) the privacy policy that governs the collection, use and disclosure of the information; and + + (b) then, obtain the end user's affirmative consent to such collection and/or transmission. + + (a) first, fully, accurately, clearly and conspicuously disclose the change in a manner that will explain the practical effect of such change; and + + (b) then, obtain the end user's affirmative consent to make such change. + + - 27 - + + + + + + 5. Transparency. Neither you nor any of your third party distribution or bundling partners may mislead end users or create end user confusion with regard to the source or owner of an Application or any portion of its purpose, functionality or features. For example, all elements of your Application that are visible to the end user must clearly identify their source through its branding and attribution, and that identification, whatever form it takes, must correspond to the identification of your application in the menu that permits end users to remove programs. You must clearly label advertisements provided by your Application (if any) as such and clearly identify your Application as the source of those advertisements. In addition, if your Application modifies the operation or display of other applications or Web sites (other than Web sites that you own), then in each instance you must clearly and conspicuously attribute the source of that modification to your Application (as distinct from the application or Web site modified) in a manner that will inform a typical Internet user; provided that this requirement will not apply to modifications for which you obtain disclosure and consent pursuant to Section 4.3. See Attachment 1 for examples of modifications that are clearly and conspicuously disclosed to end users. 6. Deactivation. You may not bundle any Google Application with any Application that impairs an end user's ability to change any preferences or settings set by the Application in accordance with the way that such preferences or settings ordinarily may be changed by the applicable Application. Once disabled by an end user, your Application may not be re-enabled without an affirmative action by the end user to explicitly re- enable your application. Accordingly, no use, update, installation or re-enablement of a separate Application, and no code downloaded as a result of browsing a Web site, may operate to re-enable your Application. Your Application must permit end users to uninstall it (in the customary place the applicable operating system has designated for adding or removing programs, e.g., Add/Remove Programs control panel in Windows) in a straightforward manner, without undue effort or skill. In addition, your Application, when running, must provide (in an easily found location) clear and concise instructions on how it may be uninstalled. Once uninstalled, your Application must not leave behind any functionality or design elements, and all setting changes made by the application, but not explicitly agreed to by the end user, should be reversed to the extent practicable. 7. Bundling of Applications. In addition to the requirements set forth in the agreement between you and Google that incorporates these Guidelines, in order for you to bundle any Application with a Google Application must satisfy each of the following requirements: + + + + + + Google Confidential + + + + (a) the end user is made aware of all of the Applications included in the bundle prior to any installation; + + (b) all such Applications included in the bundle or download comply with the provisions of Section 2 through 6 of these Guidelines; + + (c) if Applications in a bundle in which you are participating are supported in part by revenue generated by advertising displayed in another independent Application included in that bundle and the continued use of the Application is conditioned on such other independent Application remaining installed and active on the end user's computer, the end user must be made aware of that relationship; and + + - 28 - + + + + + + + + 8. Information and Assistance. Subject to any confidentiality obligations owed to third parties, you must provide Google with such information as Google may reasonably request about the distribution of those of your Applications that are bundled with any Google Application. For example, we may ask you to share with us: (a) the means by and/or the locations from which your Applications are distributed; or (b) the identity of any applications included in any of your bundling relationships (and the entities responsible for such applications). In addition, you must provide such assistance as Google may reasonably request to investigate and stop potential violations of these Guidelines that may be connected to your Application, including by way of using such number of identifiers and other tracking parameters as Google may reasonably request. This would include providing Google with "golden masters" of any bundle or other distribution that includes your Application, or working with Google to stop any entities that may be financially benefiting from your Application from engaging in any of these proscribed practices. You understand, however, that Google has no obligation to provide support to end users of your Application. For the avoidance of doubt, these information and assistance rights do not extend to any of your Applications that are not used to access Google services, bundled with a Google Application, or bundled with an Application that accesses Google services. 9. Legal. You must maintain ownership and control of your Application at all times to the extent required to practically and legally enforce the requirements of these guidelines. If you are seeking to permit a third party Application to be bundled with a Google Application, then you must also obtain Google's written approval of that third party Application (in addition to the approval required for your Application). If Google approves the third party Application, you are responsible for ensuring that such third party Application also complies with these Guidelines. Special indemnity and other suspension and/or termination provisions may apply. These are addressed in your agreement with Google. 10. Updates. 10.1 General. As mentioned above, Google may update these Guidelines, including the Attachments, from time to time; provided, however, that no updates will be effective until Google provides you with thirty (30) days' written notice thereof. Once you receive that notice (the date on which you receive such notice, the "Update Notice Date"), you will be required to bring your Application into compliance within thirty (30) days Google Confidential + + + + (d) either (1) the bundle must provide for a master uninstaller that will enable the end user to uninstall every Application in the bundle without undue effort or skill, or (2) if no master uninstaller is provided, the de-installation of any Application may not be dependent or conditioned upon the de-installation of any other Application included in the bundle. + + - 29 - + + + + + + 10.2 Extended Compliance Period. If, solely as a result of an updated requirement, one or more of your Applications no longer complies with these Guidelines, as updated, and you are incapable of bringing such Application into compliance prior to the scheduled effective date of such update (the "Update Effective Date"), you agree to provide Google with written notice thereof as soon as reasonably practicable, but in any event no later than the Update Effective Date, identifying the Application and the reasons why it may not be brought into compliance prior to the Update Effective Date, and providing such other detail as Google may reasonably request with respect thereto (consistent in any event with your confidentiality obligations). Thereafter, the parties will consult, and you agree to will work, diligently and in good faith to develop and execute a plan to bring such Application into compliance with these Guidelines, as updated, as soon as reasonably practicable, but in any event within ninety (90) days of the Update Notice Date (the "Maximum Compliance Period"). You agree that you will provide Google with such information as Google reasonably requests during this period to keep Google apprised of your progress in bringing your Application into compliance. Notwithstanding the foregoing (but subject to the next sentence), in no event may a new requirement provided for in any update to these Guidelines require you to take any action which would violate the terms of any agreement between you and any unaffiliated third party that is in effect on the date that Google delivers notice of the proposed update. In any event, if you are unable to bring any Application into compliance during the Maximum Compliance Period, Google may elect, by providing at least thirty (30) days prior written notice, to require you to cease bundling either the specific non-conforming Application or those versions of the Application which are, or are distributed, in violation of the Guidelines, as updated; it being understood that, at such time, you will be entitled to procure services from an alternative source for those Applications (or versions thereof) with respect to which Google has exercised such election. Google Confidential + + + + - 30 - + + + + + + Attachment 1 Prohibited Behavior and Content The application may not impact the display of other applications unless you provide clear disclosure in each instance + + Google Confidential + + + + - 31 - + + + + + + + + Google Confidential + + + + - 32 - + + + + + + Disclosure and Consent Clear and conspicuous disclosure is required prior to download or install: what it is, what it does, and how it will be displayed to the end user + + Disclosure and Consent Describe type, method, and use of personal information, if applicable. Point user to privacy policy + + Google Confidential + + + + - 33 - + + + + + + + + Google Confidential + + + + - 34 - + + + + + + Branding & Attribution The visible elements of the application should be easily identifiable to the end user + + Google Confidential + + + + - 35 - + + + + + + Implementation, Transparency and Deactivation The Application must permit end users to uninstall it in the customary place the applicable operating system has designated for adding or removing programs (e.g., Add/Remove Programs control panel in Windows) in a straightforward manner Google Confidential + + + + - 36 - + + + + + + + + Google Confidential + + + + - 37 - + + + + + + Implementation, Transparency and Deactivation The Application must contain (in an easily found location) clear and concise instructions on how it may be uninstalled + + Google Confidential + + + + - 38 - + + + + + + Bundling of Applications When bundling, the end user must be made aware of all the applications included prior to installation. + + Google Confidential + + + + - 39 - + + + + + + Bundling of Applications When bundling, the end user must be made aware of advertising revenue relationships to other applications, if the continued use of the primary application is conditioned on the other applications being installed and active on the end user's computer + + Google Confidential + + + + - 40 - \ No newline at end of file diff --git a/full_contract_txt/WOMENSGOLFUNLIMITEDINC_03_29_2000-EX-10.13-ENDORSEMENT AGREEMENT - Intellectual Property Rights Confidentiality and Non-Use Obligations Agreement.txt b/full_contract_txt/WOMENSGOLFUNLIMITEDINC_03_29_2000-EX-10.13-ENDORSEMENT AGREEMENT - Intellectual Property Rights Confidentiality and Non-Use Obligations Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..ecd57f1ce30cf74948c96eb8e40d8bd9d81e2d56 --- /dev/null +++ b/full_contract_txt/WOMENSGOLFUNLIMITEDINC_03_29_2000-EX-10.13-ENDORSEMENT AGREEMENT - Intellectual Property Rights Confidentiality and Non-Use Obligations Agreement.txt @@ -0,0 +1,69 @@ +-8- 9 + + EXECUTION COPY + + 11.6. COUNTERPARTS. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. + + 11.7. INTELLECTUAL PROPERTY RIGHTS, CONFIDENTIALITY AND NON-USE. The Professional acknowledges her obligations under the provisions of the Intellectual Property Rights Confidentiality and Non-Use Obligations Agreement attached hereto as "Exhibit A" and made a part hereof by this reference. The rights and obligations of the parties set forth in Exhibit A shall survive the termination or expiration of this endorsement agreement, regardless of cause or circumstances of the termination or expiration. + + IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. + + SQUARE TWO GOLF, INC. + + By: /s/DOUGLAS A. BUFFINGTON --------------------------------- Douglas A. Buffington President + + PROFESSIONAL + + /s/ KATHY WHITWORTH ------------------------------ Kathy Whitworth + + -9- 10 + + EXECUTION COPY + + EXHIBIT A + + Intellectual Property Rights Confidentiality and Non-Use Obligations Agreement + + This Agreement by and between SQUARE TWO GOLF INC., a New Jersey corporation (the "Company") and KATHY WHITWORTH, an individual residing at 302 La Mancha Court, Santa Fe, New Mexico 87501 (the "Recipient"), is part of the Endorsement Agreement of the parties. In consideration of and as an inducement for the Company entering into said Endorsement Agreement with Recipient: + + (a) Recipient acknowledges and agrees that communications for the purpose of proposing to work for or working for the Company have in the past or will entail the disclosure, observation and display to Recipient of information and materials of the Company that are proprietary, confidential and trade secret, which include, but are not limited to, golf equipment marketing plans, research, development and designs, computer software, screens, user interfaces, systems designs and documentation, processes, methods, fees, charges, know-how and any result from the work performed by Recipient or the Company, new discoveries, Intellectual Property (as defined below) and improvements to the Company's products made for or on behalf of the Company (all of which, singly and collectively, "Information"). + + With regard to such Information, whether or not labeled or specified as confidential, proprietary or trade secret, Recipient agrees: + + (i) to use the Information solely for the purpose of making proposals to or working under contracts with the Company; and + + (ii) not to disclose or transfer the Information to others without the Company's written permission. + + (b) Recipient will not be prevented from using or disclosing Information: + + (i) which Recipient can demonstrate, by written records, was known to it before the disclosure or display of the Information by the Company to Recipient; or + + (ii) which is now, or becomes in the future, public knowledge other than by breach of this Agreement or the endorsement agreement by Recipient, its employees or agents; or + + (iii) that is lawfully obtained by Recipient from a source independent of the Company, which source was lawfully in possession of the Information and which source had the unrestricted right to disclose or display the Information to the Recipient; or + + (iv) that is required by legal process to be disclosed, provided that Recipient will timely inform the Company of the requirement for disclosure, will permit the Company to attempt, by appropriate legal means, to limit such disclosure and will itself + + + + + + A-1 + +11 + + EXECUTION COPY + + use appropriate efforts to limit the disclosure and maintain confidentiality to the extent possible. + + (c) The confidentiality and non-use obligations of Recipient will remain in effect after all work for the Company has been completed. + + (d) All Information, including any copies thereof, in any media, in the possession or control of Recipient and Information embodied or included in any software or data files loaded or stored on computers in the possession or control of Recipient, its agents or employees, shall be removed and returned to the Company upon demand, but no later than the completion of work for the Company. + + (e) Recipient agrees that she will not copy the Information in whole or in part or use all or any part of the Information to reverse engineer, duplicate the function, sequence or organization of the Information for any purpose without the prior written permission of the Company. + + (f) Recipient further acknowledges and agrees that all new discoveries, inventions, improvements, processes, formulae, designs, drawings, training materials, original works of authorship, photos, video tapes, electronic images, documentation, trademarks and copyrights (the "Intellectual Property"), that may be developed, conceived, or made by Recipient, alone or jointly with others during her work for the Company, shall be the exclusive property of the Company and shall be deemed a work for hire. Recipient hereby assigns and agrees to assign all Recipient's rights in any Intellectual Property to the Company. Recipient hereby grants to the Company power of attorney for the purpose of assigning all Recipient's rights in Intellectual Property to the Company for the purposes of filings, registrations and other formalities deemed necessary by the Company to prosecute, protect, perfect or exploit its ownership and interests in Intellectual Property. Recipient further agrees to execute, acknowledge and deliver any documentation, instruments, specifications or disclosures necessary to assign, prosecute, protect, perfect or exploit the Company ownership of Intellectual Property. + + (g) Recipient acknowledges and agrees that the Company possesses valuable know-how, proprietary, confidential and trade secret Information that has been procured or developed by the Company at great expense and that its unauthorized disclosure would result in substantial damages to the Company that may not be adequately compensated by monetary relief. Accordingly, Recipient hereby consents to the jurisdiction of the Federal and County Courts in Essex County, New Jersey and agrees that the Company may seek temporary restraining orders against it or other extraordinary relief necessary to protect the Information. + + A-2 \ No newline at end of file diff --git a/full_contract_txt/WOMENSGOLFUNLIMITEDINC_03_29_2000-EX-10.13-ENDORSEMENT AGREEMENT.txt b/full_contract_txt/WOMENSGOLFUNLIMITEDINC_03_29_2000-EX-10.13-ENDORSEMENT AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..9c1db961459810fd5c45083eb3fb83a9281ffab1 --- /dev/null +++ b/full_contract_txt/WOMENSGOLFUNLIMITEDINC_03_29_2000-EX-10.13-ENDORSEMENT AGREEMENT.txt @@ -0,0 +1,279 @@ +1 + + EXHIBIT 10.13 + + EXECUTION COPY + + ENDORSEMENT AGREEMENT --------------------- + + This Endorsement Agreement ("Agreement") is made this 13th day of October, 1999 by and between SQUARE TWO GOLF INC., a New Jersey corporation (the "Company"), and KATHY WHITWORTH, an individual, with an address at 302 La Mancha Court, Santa Fe, New Mexico, 87501 (the "Professional"). + + RECITALS -------- + + WHEREAS, the Company manufactures and sells women's golf clubs and other golf equipment; + + WHEREAS, the Professional is a retired Ladies Professional Golf Association ("LPGA") Tour Professional; + + WHEREAS, the Company desires to utilize the services of the Professional in connection with the promotion, marketing, and sale of a signature line of women's golf clubs and the Company's other products and services; and + + WHEREAS, the Company and the Professional desire to enter into an agreement pursuant to which the Professional will serve the Company as an independent contractor, on the terms and subject to the conditions set forth herein. + + NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, the Company and the Professional hereby agree as follows: + +1. TERM. + + 1.1 The term of this Agreement shall begin on January 1, 2000 and continue for an initial period of five (5) years unless earlier terminated in accordance with Section 7 hereof, and may be renewed under Section 8 hereof (the initial period plus any renewal period, the "Term"). + +2. ENDORSEMENT SERVICES. + + During the Term, the Professional will provide the services described in this Section 2 (the "Services"): + + 2.1 The Professional hereby grants to the Company an exclusive license to use her name, likeness, image and personal identification, singly or in any combination, in connection with the production, use, marketing and sale of a "Kathy Whitworth" signature line of women's golf clubs (the "Products"), as described more fully in Section 3 below. + + 2 + + EXECUTION COPY + + 2.2 The Professional agrees to serve as a professional golf instructor during up to ten (10) golf clinics hosted by the Company per calendar year at locations within the United States to be determined by the Company. The golf clinics shall be one or two day events. + + 2.3 The Professional agrees to serve as a spokesperson for the Company at up to two (2) Professional Golf Association merchandise shows, including but not limited to the PGA Merchandise Shows. + + 2.4 The Professional hereby grants to the Company the exclusive and worldwide right to use her name, likeness, image and personal identification, singly or in any combination, during the Term and for a period of six (6) months after the Term as provided in Section 2.8, in the creation of two (2) print advertisements per year and one (1) television advertisement per year (together, the "Advertisements") for any golf equipment, along with all rights in any images, videos, advertisement copy or other materials created by the Professional or others. The Professional agrees that the Company shall own all such materials and all intellectual property rights&bbsp;therein for use in perpetuity in any media now known or hereafter devised or developed, including but not limited to the internet. The Professional hereby grants to the Company the worldwide right during the Term and for a period of six (6) months after the Term as provided in Section 2.8 to use, reproduce, print, publish, distribute, broadcast, modify, edit, condense, or expand any materials containing her name, image, likeness or personal identification that are created hereunder. + + 2.5 The Professional hereby grants to the Company an exclusive license to use her name, likeness, image and personal identification in the Company's catalog of products. + + 2.6 The Professional agrees to participate in a minimum of five (5) other events per calendar year to market and promote the Company's products, + + + + + +including but not limited to market consultations, each of which shall include meeting with the Company executives to assist in the design, development, marketing and promotion of the Company's products. + + 2.7 The Professional agrees to use only the golf clubs and golf bags of the Company in any golf event, whether professional or social, during the Term. The Professional agrees (i) to use no golf bag bearing any identification of a competitor of the Company and (ii) to wear no apparel bearing any identification of a competitor of the Company, and will prohibit any caddy of hers from bearing any such identification. + + 2.8 The Company shall cease use of the name, likeness, image or personal identification of the Professional upon expiration or termination of this Agreement. However, the Company will have the right to dispose of its inventory of Products existing at the time of termination or expiration of this Agreement and the right to use the name, likeness, image and personal identification of the Professional in connection with the disposition of such inventory. The right granted in this section shall expire six (6) months after the termination or expiration of this Agreement. The Professional understands and agrees that the Company shall have no obligation to take action against or attempt to stop distributors, retailers and other third parties to this Agreement who have purchased Products bearing the name, likeness, image or personal + + -2- 3 + + EXECUTION COPY + +identification of the Professional from any marketing, advertising, sale or other disposition of such Products, regardless of any use they make of the name, likeness, image or personal identification of the Professional. + +3. LICENSE AND ENDORSEMENT FOR PRODUCTS. + + 3.1 The Professional hereby grants an exclusive, worldwide license to the Company to use the name, likeness, image and personal identification of the Professional, during the Term and for a period of six (6) months after the Term as provided in Section 2.8, in connection with the creation, manufacture, marketing, sale and promotion of the Products. As a condition precedent to, and a continuing precedent of, any obligations of the Company hereunder, the Professional hereby agrees to use the Products upon their creation and to provide an unqualified and unequivocal endorsement thereof during the Term at the request of the Company at any time or times during the Term in verbal, written or recorded forms. If the Professional is unable at any time during the Term to provide such endorsement of the Products, the Company shall be released from any of its obligations under Sections 4.1, 4.2, and 4.3 hereof to pay any fees or royalties or to provide any stock options to the Professional and may elect to terminate this Agreement without any further obligation to the Professional. + +4. COMPENSATION FOR ENDORSEMENT SERVICES. + + 4.1 The Company will pay the Professional a base fee of thirty-six thousand dollars ($36,000) per year (the "Base Fee") for Services performed during the Term. The Company shall pay the Base Fee in four (4) equal installments of nine thousand dollars ($9,000) each on March 15, June 15, September 15 and December 15 of each year during the Term commencing on January 15, 2000. The Professional acknowledges that the Company is under no obligation to create or maintain the Products. The Professional agrees that payment of the Base Fee shall satisfy all obligations of the Company hereunder if it elects not to create or market and sell the Products. + + 4.2 If the Company elects to create and market the Products, the Company will pay to the Professional a "Royalty Fee" on the sales of Products during the Term, except as provided in the following sentence, of two percent (2%) of the "Royalty Base," which Royalty Base shall be calculated as the wholesale selling price of all Products for which the Company actually receives the proceeds of such net of returns, allowances, discounts, shipping, taxes, insurance and credits. During the Term, the Company shall pay the Royalty Fee, earned for the preceding quarter, to the Professional quarterly, within thirty (30) days of the end of the succeeding calendar year quarter. If the Company decides not to renew this Agreement in accordance with the provisions of Section 8 below, the Company shall pay the Professional an amount equal to two percent (2%) of the net book value of its unsold inventory of Products on December 31, 2004. + + 4.3 If the Company elects to create and market the Products, the Company will grant to the Professional options to purchase shares of the Company's capital stock ("Options"), as provided in this paragraph. On each March 31, June 30, September 30, and December 31 during the Term that the Company elects to continue the marketing and sale of the Products, the Company will grant to the Professional a number of Options (the "Quarterly Grant Number"). + + -3- 4 + + EXECUTION COPY + +The Quarterly Grant Number shall be the nearest whole number that results from the division of the number of dollars represented by one half of one percent + + + + + +(0.5%) of the Royalty Base by the closing price of the Company's stock on the grant date. The exercise price of the Options shall be the closing price of the Company stock on the grant date. The sum of the Quarterly Grant Numbers in each calendar year of the Term shall not exceed fifteen thousand (15,000). The options will expire five (5) years after each grant date. The Options shall not be assigned, transferred or alienated by the Professional. Any attempt to assign, transfer or alienate the Options without the prior written consent of the Company shall be void. + + 4.4 The Company will reimburse the Professional for her reasonable and necessary travel expenses in connection with her performance of the Services. + + 4.5 The Company shall be under no obligation to create, market, promote or sell the Products. There shall be no minimum amounts due from the Company hereunder except as specified in Section 4.1 above. The failure of the Company to create, market, promote or sell the Products or to reach any specific sales volume shall not result in any liability of the Company or create any right for the Professional to make a claim against the Company. The Company may elect to dispose of the Products at any price or for no consideration in its sole discretion and shall not be obligated to the Professional for any sale or transfer of the Products which does not produce compensation for the Professional. + +5. PROFESSIONAL'S CONDUCT. + + 5.1 The Professional shall at all times during the Term refrain from: + + 5.1.1 dishonest, fraudulent, illegal or unethical acts or omissions; + + 5.1.2 excessive use or abuse of alcohol; + + 5.1.3 use of controlled substances, except as prescribed by a licensed medical professional in the treatment of illness or disease; + + 5.1.4 acts or omissions reasonably determined by the Company to be prejudicial or injurious to the business or goodwill of the Company, its officers, employees, shareholders or products, the golf industry or professional golf; and + + 5.1.5 conduct which could reasonably be expected to degrade the Professional, devalue the services of the Professional or to bring the Professional into public hatred, contempt, scorn or ridicule, or that could reasonably be expected to shock, insult or offend the community or to offend public morals or decency. + +6. INDEPENDENT CONTRACTOR. + + 6.1 With respect to all Services described in this Agreement, the Professional's status will be that of an independent contractor and not a partner, employee or agent of the Company. The Professional has no power or authority whatsoever to make binding commitments or + + -4- 5 + + EXECUTION COPY + +contracts on behalf of the Company. The Professional agrees that she will pay and hold the Company harmless from any and all costs, expenses, fees, dues, pension contributions, benefit contributions and fines associated with her present or future required membership in any trade association, union or professional organization, including but not limited to LPGA, PGA, USGA, SAG or AFTRA, that may be associated with her performance of this Agreement. The Professional represents that no agent or representative fees, charges, rights or claims exist in connection with her execution or performance of this Agreement, and the Professional shall hold harmless the Company from any such liability. Any costs incurred by the Company to comply with any rule, contract, order or other requirement of SAG, AFTRA or other union or professional organization having control or jurisdiction over the Professional or her performance of the services required by this Agreement shall be deducted from the sums due from the Company to the Professional. The Professional agrees that the compensation provided to her under Section 4 of this Agreement shall be deemed compensation for purposes of meeting any minimum pay requirements of any SAG or AFTRA agreement. If any of the above terms are deemed to violate any SAG or AFTRA agreement, the Company shall have the option to terminate this Agreement without liability. + + 6.2 The Professional shall have no authority to incur expenses on behalf of the Company without the Company's prior written approval. The Professional shall submit to the Company for written approval a description of anticipated expenses, other than those for reasonable and necessary travel, prior to incurring such expenses. All statements submitted by the Professional for expenses that were not pre-approved by the Company will be subject to review, approval or rejection by the Company in its sole discretion. + + 6.3 The Professional will be solely responsible for withholding and paying any and all federal, state and local taxes, including but not limited to payroll, unemployment, social security and income taxes, and any other payments which may be due as a result of or in connection with payments made by the Company for services rendered under this Agreement. The Professional acknowledges that she is not qualified for and will not receive any Company employee benefits or other incidents of employment. + + + + + + 6.4 The Professional agrees to maintain at all times during the Term such insurance, including without limitation, health insurance, workers' compensation, automobile and general comprehensive liability coverage, as will protect and hold harmless the Company from any claims, losses, damages, costs, expenses or liability arising out of the Services performed under this Agreement. The Company may require the Professional to provide insurance certificates evidencing the same. + + 6.5 The Professional represents and warrants that: + + 6.5.1 The Professional has the right to enter into this Agreement; + + 6.5.2 By agreeing to perform or performing this Agreement, the Professional will not breach any existing agreement; and + + -5- 6 + + EXECUTION COPY + + 6.5.3 Neither the Professional's grant of rights to the Company under this Agreement nor the Company's exercise of such rights will cause the infringement of any rights of third parties. + + 6.6 The Professional agrees not to enter into any other agreement the performance of which would or could cause an infringement of the rights that the Professional grants to the Company under this Agreement. + +7. TERMINATION. + + 7.1 This Agreement shall terminate automatically if the Professional dies or becomes disabled, or suffers illness, mental or physical disability to the extent that she is unable to perform the obligations of the Professional under the terms of this Agreement. + + 7.2 Either the Company or the Professional may terminate this Agreement in the event of a non-curable breach of this Agreement by the other party. + + 7.3 In case of a breach of the Agreement that is capable of being cured, the non-breaching party shall, before terminating the Agreement, give the breaching party written notice of such breach, and a thirty (30) day period in which to cure such breach. + + 7.4 The Professional's obligations under (i) Section 9 hereof and (ii) Exhibit A shall survive a termination of this Agreement for the applicable periods set forth therein. The Company's obligation to compensate the Professional pursuant to Section 4 of this Agreement shall cease on the effective date of termination except as to amounts earned by the Professional and due from the Company accruing prior to such date. + + 7.5 The right to terminate outlined in this section shall be in addition to, and not in lieu of, all other remedies which may be available to the non-breaching party, whether at law or in equity, for a breach of this Agreement. + +8. RENEWAL. + + 8.1 The Company may renew this Agreement on the same terms and conditions for one (1) additional five year period that shall begin on January 1, 2005 and end on December 31, 2009, by providing a written notice of its intent to effect such renewal to the Professional by November 30, 2004. + +9. NON-COMPETITION. + + 9.1 The Professional acknowledges that any use of her name, likeness, image or personal identification by any third party in connection with the making, use, sale, marketing, promotion or advertising of golf equipment, including but not limited to golf clubs and golf bags, would cause a likelihood of confusion with the Products of the Company, during the Term and thereafter during the time the Company disposes of inventory on hand at the expiration of this Agreement. The Professional acknowledges that she will have a right, pursuant to and under the + + -6- 7 + + EXECUTION COPY + +conditions described in Section 4.2 above, to receive a specified royalty for inventory on hand at the expiration of the initial term, and accordingly hereby grants to the Company the right to fill any orders for, assemble components of, market, advertise, promote and sell any inventory of Products in its inventory existing at the expiration or termination of this Agreement, for a period not to exceed two (2) years after such expiration or termination of the original term. To avoid any possibility of confusion of the public, trademark infringement or interference with the rights of the Company, the Professional agrees not to endorse, license or otherwise authorize the use of her name, likeness or image in connection with another company's golf clubs or golf-related clothing or equipment during the Term and for a period of two (2) years thereafter. + + 9.2 The Professional agrees to divest herself of any management or control interest that she currently has in any entity that is a competitor of + + + + + +the Company, and not to acquire any such interest during the Term. + +10. RIGHT OF INJUNCTIVE RELIEF. + + 10.1 The Professional acknowledges and agrees that a breach of the covenants contained in Section 9 of this Agreement would actually or potentially deprive the Company of a substantial amount of sales and business value and that the amount of injury would be impossible or difficult to ascertain fully. The Company shall, therefore, be entitled to obtain an injunction against the Professional restraining any violation, further violation, or threatened violation of Section 9 above, in addition to any other remedies to which the Company may be entitled by law. + +11. MISCELLANEOUS. + + 11.1. ENFORCEABILITY. The unenforceability or invalidity of any provision of this Agreement shall not affect the enforceability or validity of the balance of the Agreement. In the event that any such provision should be or becomes invalid for any reason, such provision shall remain effective to the maximum extent permissible, and the parties shall consult and agree on a legally acceptable modification giving effect to the commercial objectives of the unenforceable or invalid provision, and every other provision of this Agreement shall remain in full force and effect. + + 11.2. ASSIGNABILITY. This Agreement is not assignable by the Professional but is assignable by the Company to any affiliate or successor entity. Any attempted assignment by the Professional without the prior written consent of the Company shall be void. As used in this Agreement, the term "Company" shall include any entity to which this Agreement shall have been assigned by the Company, in accordance with the preceding. + + 11.3. AMENDMENT/WAIVER. + + 11.3.1 This Agreement supersedes all prior and contemporaneous agreements and understandings between the parties with respect to the subject matter hereof and may not be changed or amended orally. + + -7- 8 + + EXECUTION COPY + + 11.3.2 No change, termination or attempted waiver of any of the provisions of this Agreement shall be of any effect unless the same is set forth in writing and duly executed by the party against which it is sought to be enforced. + + 11.3.3 The failure of any party at any time or from time to time to require performance of the other party's obligations under this Agreement shall in no manner affect such party's right to enforce any provisions of this Agreement at a subsequent time. The waiver by any party of any right arising out of any breach by the other party shall not be construed as a waiver of any right arising out of a subsequent breach. + + 11.4. GOVERNING LAW. The validity, interpretation, construction and performance of this Agreement shall be governed in accordance with the laws of the State of New Jersey without giving effect to the principles of conflicts of laws of such state. + + 11.5. NOTICES. Any communication (including any notice, consent, approval or instructions) provided for under this Agreement may be given to the person to whom it is addressed by delivering the same to or for such person at the address or facsimile number of such person as set out hereinafter or at such other address or number as such person shall have notified to the other party hereto, provided that a copy of any communication sent by fax shall be immediately deposited in the mail. Any communication so addressed and delivered as aforesaid shall be deemed to have been sufficiently given or made on the date on which it was delivered. + + If to the Company: S2 GOLF INC. 18 Gloria Lane Fairfield, New Jersey 07004 Attention: Mr. Douglas A. Buffington Facsimile number: (973) 227-7018 + + With a copy to: Mary Ann Jorgenson, Esq. Squire, Sanders & Dempsey L.L.P. 4900 Key Tower 127 Public Square Cleveland, Ohio 44114 Facsimile number: (216) 479-8776 + + If to the Professional: Kathy Whitworth 1735 Mistletoe Flower Mound, Texas 75022 Facsimile number: (792) 355-7021 + + With a copy to: Nick Lampros 16615 Lark Avenue Suite 101 Los Gatos, California 95032 Facsimile number: (408) 358-2486 + + + + + + -8- 9 + + EXECUTION COPY + + 11.6. COUNTERPARTS. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. + + 11.7. INTELLECTUAL PROPERTY RIGHTS, CONFIDENTIALITY AND NON-USE. The Professional acknowledges her obligations under the provisions of the Intellectual Property Rights Confidentiality and Non-Use Obligations Agreement attached hereto as "Exhibit A" and made a part hereof by this reference. The rights and obligations of the parties set forth in Exhibit A shall survive the termination or expiration of this endorsement agreement, regardless of cause or circumstances of the termination or expiration. + + IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. + + SQUARE TWO GOLF, INC. + + By: /s/DOUGLAS A. BUFFINGTON --------------------------------- Douglas A. Buffington President + + PROFESSIONAL + + /s/ KATHY WHITWORTH ------------------------------ Kathy Whitworth + + -9- 10 + + EXECUTION COPY + + EXHIBIT A + + Intellectual Property Rights Confidentiality and Non-Use Obligations Agreement + + This Agreement by and between SQUARE TWO GOLF INC., a New Jersey corporation (the "Company") and KATHY WHITWORTH, an individual residing at 302 La Mancha Court, Santa Fe, New Mexico 87501 (the "Recipient"), is part of the Endorsement Agreement of the parties. In consideration of and as an inducement for the Company entering into said Endorsement Agreement with Recipient: + + (a) Recipient acknowledges and agrees that communications for the purpose of proposing to work for or working for the Company have in the past or will entail the disclosure, observation and display to Recipient of information and materials of the Company that are proprietary, confidential and trade secret, which include, but are not limited to, golf equipment marketing plans, research, development and designs, computer software, screens, user interfaces, systems designs and documentation, processes, methods, fees, charges, know-how and any result from the work performed by Recipient or the Company, new discoveries, Intellectual Property (as defined below) and improvements to the Company's products made for or on behalf of the Company (all of which, singly and collectively, "Information"). + + With regard to such Information, whether or not labeled or specified as confidential, proprietary or trade secret, Recipient agrees: + + (i) to use the Information solely for the purpose of making proposals to or working under contracts with the Company; and + + (ii) not to disclose or transfer the Information to others without the Company's written permission. + + (b) Recipient will not be prevented from using or disclosing Information: + + (i) which Recipient can demonstrate, by written records, was known to it before the disclosure or display of the Information by the Company to Recipient; or + + (ii) which is now, or becomes in the future, public knowledge other than by breach of this Agreement or the endorsement agreement by Recipient, its employees or agents; or + + (iii) that is lawfully obtained by Recipient from a source independent of the Company, which source was lawfully in possession of the Information and which source had the unrestricted right to disclose or display the Information to the Recipient; or + + (iv) that is required by legal process to be disclosed, provided that Recipient will timely inform the Company of the requirement for disclosure, will permit the Company to attempt, by appropriate legal means, to limit such disclosure and will itself + + + + + + A-1 + + 11 + + EXECUTION COPY + + use appropriate efforts to limit the disclosure and maintain confidentiality to the extent possible. + + (c) The confidentiality and non-use obligations of Recipient will remain in effect after all work for the Company has been completed. + + (d) All Information, including any copies thereof, in any media, in the possession or control of Recipient and Information embodied or included in any software or data files loaded or stored on computers in the possession or control of Recipient, its agents or employees, shall be removed and returned to the Company upon demand, but no later than the completion of work for the Company. + + (e) Recipient agrees that she will not copy the Information in whole or in part or use all or any part of the Information to reverse engineer, duplicate the function, sequence or organization of the Information for any purpose without the prior written permission of the Company. + + (f) Recipient further acknowledges and agrees that all new discoveries, inventions, improvements, processes, formulae, designs, drawings, training materials, original works of authorship, photos, video tapes, electronic images, documentation, trademarks and copyrights (the "Intellectual Property"), that may be developed, conceived, or made by Recipient, alone or jointly with others during her work for the Company, shall be the exclusive property of the Company and shall be deemed a work for hire. Recipient hereby assigns and agrees to assign all Recipient's rights in any Intellectual Property to the Company. Recipient hereby grants to the Company power of attorney for the purpose of assigning all Recipient's rights in Intellectual Property to the Company for the purposes of filings, registrations and other formalities deemed necessary by the Company to prosecute, protect, perfect or exploit its ownership and interests in Intellectual Property. Recipient further agrees to execute, acknowledge and deliver any documentation, instruments, specifications or disclosures necessary to assign, prosecute, protect, perfect or exploit the Company ownership of Intellectual Property. + + (g) Recipient acknowledges and agrees that the Company possesses valuable know-how, proprietary, confidential and trade secret Information that has been procured or developed by the Company at great expense and that its unauthorized disclosure would result in substantial damages to the Company that may not be adequately compensated by monetary relief. Accordingly, Recipient hereby consents to the jurisdiction of the Federal and County Courts in Essex County, New Jersey and agrees that the Company may seek temporary restraining orders against it or other extraordinary relief necessary to protect the Information. + + A-2 \ No newline at end of file diff --git a/full_contract_txt/WORLDWIDESTRATEGIESINC_11_02_2005-EX-10-RESELLER AGREEMENT.txt b/full_contract_txt/WORLDWIDESTRATEGIESINC_11_02_2005-EX-10-RESELLER AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..2d5db3c4943b22f40874617e2818c7a82f0443cf --- /dev/null +++ b/full_contract_txt/WORLDWIDESTRATEGIESINC_11_02_2005-EX-10-RESELLER AGREEMENT.txt @@ -0,0 +1,549 @@ +EXHIBIT 10.2 + + TOUCHSTAR SOFTWARE CORPORATION RESELLER AGREEMENT DATED SEPTEMBER 14, 2005 + + TOUCHSTAR SOFTWARE CORPORATION + + RESELLER AGREEMENT + + This Reseller Agreement is made and entered into as of this 14 day of SEPTEMBER, 200_ (the "Effective Date"), by and between TOUCHSTAR SOFTWARE CORPORATION, a Delaware corporation with its principal place of business at 3025 South Parker Road, Suite 925, Aurora, Colorado 80014, United States ("TouchStar"), and WORLDWIDE STRATEGIES, a NEVADA corporation, with its principal place of business at 3801-E FLORIDA AVE STE 400 DENVER, CO 80210 ("Reseller"). + + RECITALS + +A. TouchStar produces and distributes the TouchStar Software and provides the related Support Services. + +B. Reseller has represented to TouchStar that it possesses experience, knowledge, and skill in the calling service industry and has the capability to effectively market and distribute the TouchStar Software and Support Services in the Territory. + +C. Reseller desires to market and distribute the TouchStar Software to Customers as a non-exclusive value added reseller in the Territory pursuant to the terms contained in this Agreement. + + AGREEMENT + + NOW, THEREFORE, in consideration of the foregoing and the mutual promises set forth in this Agreement, and intending legally to be bound hereby, the parties agree as follows: + +1. DEFINITIONS. + + In addition to the terms defined elsewhere in this Agreement, the following terms shall have the meanings set forth below (such meanings to be equally applicable to the singular as well as the plural forms of the terms defined): + + "AAA" has the meaning ascribed to that term in Section 10.12(b) of this Agreement. + + "AAA Rules" has the meaning ascribed to that term in Section 10.12(b) of this Agreement. + + "Affiliate" as used in this Agreement with respect to an Entity, means any person controlling, controlled by or under common control with such Entity. For the purpose of this definition, "control" means the possession, directly or indirectly, of the power to direct or cause the direction of an Entity, whether through the ownership of voting securities or otherwise. + + "Agreement" means this Reseller Agreement and the Exhibits attached hereto as the same may be amended from time to time in accordance with the terms set forth herein. + +Rev 3/05 + + "Ancillary Software" has the meaning ascribed to that term in Section 4.13 of this Agreement. + + "Annual Marketing Plan" has the meaning ascribed to that term in Section 4.3 of this Agreement. + + "Assessment" has the meaning ascribed to that term in Section 6.2 of + + + + + +this Agreement. + + "Confidential Information" means any and all trade secrets and other confidential information and know-how related directly or indirectly to TouchStar's business or its products, including inventions, materials, formulae, confidential research, technical information, technology, general know-how, patterns, specifications, systems data, equipment, operating standards and procedures, developments and improvements, computer programs, operating systems, source code, object code, middleware, firmware, information regarding projects, programs and sales, names and addresses of past and present customers, pricing data, internal procedures, systems, methods forms, manuals, financial data, price lists, customer service information, marketing information, and all other information relating to TouchStar, the TouchStar Software, Support Services, or other products or services of TouchStar that is not generally known to the public. + + &bbsp; "Copyrights" means all right, title, and interest of TouchStar in and to all copyrights and rights and interests in copyrights and works protectible by copyright, whether now owned or hereafter acquired or created by TouchStar (in whole or in part) and all renewals and extensions thereof, throughout the universe and in perpetuity, whether or not registered or recorded in the United States Copyright Office or in the copyright office or agency of any other country or jurisdiction and including all works based upon, incorporated in, derived from, incorporating or relating to all works covered by copyright, including copyrights or rights or interests in copyrights registered or recorded in the United States Copyright Office or in the copyright office or agency of any other country or jurisdiction. + + "Customer" means a third party end-user with headquarter offices in the Territory to whom or to which Reseller resells or causes the resale of the TouchStar Software and Support Services. + + "Dollars" or "US$" means the lawful currency of the United States. + + "Effective Date" has the meaning ascribed to that term in the introductory paragraph of this Agreement. + + "Entity" means any general partnership (including a limited liability partnership), limited partnership (including a limited liability limited partnership), limited liability company, corporation, joint venture, trust, business trust, cooperative, association or any foreign trust or foreign business organization. + + "Fees" means the installation fees, licensing fees and support service fees owed by Reseller to TouchStar, as set forth on EXHIBIT A. + + 2 + + "Government Controls" means economic and other sanctions instituted by a Governmental Body related to certain transactions, such as the transfer of technology and technical data, the transfer of funds, the provisions of goods and services, and other dealings, including, but not limited to, sanctions administered by the United States government pursuant to the United States Export Administration Act, the United States Arms Export Control Act, the International Emergency Economic Powers Act, the United States Foreign Corrupt Practices Act of 1977, all as amended, and the USA PATRIOT Act, and the regulations promulgated thereunder and certain regulations promulgated by the United States Department of Treasury. + + "Governmental Body" means any (a) nation, state, country, or other jurisdiction of any nature, (b) national, federal, state, local, municipal, foreign, or other government, governmental, or quasi-governmental authority of any nature (including any governmental agency, branch, department, official, or entity and any court or other tribunal), or (c) body exercising, or entitled to exercise, any administrative, executive, judicial, legislative, police, regulatory, or taxing authority or power of any nature. + + "Intellectual Property Rights" means the Confidential Information of TouchStar, the Copyrights, the Patents, and the Trademarks. + + "Legal Requirements" means any national, federal, state, local, municipal, foreign, international, multinational, or other administrative order, law, constitutional law, ordinance, principle of law, regulation, statute, treaty, directive or decree, including Government Controls. + + "License Agreement" means the license agreement to be provided to each Customer with regard to the use by such Customer of the TouchStar Software, in the form of EXHIBIT B, attached to this Agreement. + + "Licenses" means those software and other licenses from third parties necessary lawfully to provide the Support Services. + + "Marketing Materials" has the meaning ascribed to that term in Section 3.2 of this Agreement. + + "Other Reseller" means any person or Entity acceptable to TouchStar in its sole discretion with whom or with which Reseller enters into an Other Reseller Agreement to promote, market, distribute, license and sell the TouchStar Software and Support Services to Customers in the Territory; PROVIDED that such person or Entity shall not be an end-user of either the TouchStar Software or the Support Services. + + "Other Reseller Agreement" has the meaning ascribed to that term in + + + + + +Section 2.2(a)(i) of this Agreement. + + "Patents" means (a) all right, title and interest of TouchStar in and to all applicable Letters Patent and applications for Letters Patent and the inventions described therein and any Letters Patent which may issue therefrom and which have been or may have been filed in the United States or in any other country for any such inventions or for any improvements, reissues, divisions, continuations, renewals, additions, extensions, substitutes, continuations-in-part which may be made, filed, or + + 3 + +granted on any of them, including the rights to all benefits therefrom arising under the International Convention for the Protection of Industrial Property or any other international treaty affecting such rights; (b) any right, title and interest of TouchStar in any utility model, design registration, trade secret, confidential research, development and commercial information, know-how, technical information, engineering, practical information, patterns, specifications, formulae, manufacturing procedures, quality control, data and procedures, systems' data, software programs, equipment, operating standards and applications, developments, and improvements; and (c) any rights to licenses or other benefits under any Letters Patent, applications for Letters Patent and/or invention, utility model registration, design registration and inventor's certificate anywhere in the world, whether or not patentable, which are obtained by TouchStar or to which TouchStar becomes entitled during the term of this Agreement. + + "Private Label Software" has the meaning ascribed to that term in Section 7.2 of this Agreement. + + "Quotas" has the meaning ascribed to that term in Section 4.11 of this Agreement. + + "Registered Leads" has the meaning ascribed to that term in Section 2.6 of this Agreement. + + "Reseller" has the meaning ascribed to that term in the introductory paragraph of this Agreement, including its legal representatives, successors, and assigns. + + "Reseller Marks" has the meaning ascribed to that term in Section 7.2 of this Agreement. + + "Reverse Engineer" means translate, disassemble, decompile, analyze, reverse engineer or reverse program, or otherwise attempt to derive the code or programming for the TouchStar Software or the Private Label Software. + + "Specifications" has the meaning ascribed to that term in Section 3.4(a) of this Agreement. + + "Support Services" means those support services related to the TouchStar Software as described in the attached EXHIBIT C. + + "Technical Prerequisites" has the meaning ascribed to that term in Section 3.4(b) of this Agreement. + + "Term" has the meaning ascribed to that term in Section 8.1 of this Agreement. + + "Territory" means the geographical region described in the attached EXHIBIT D. + + "TouchStar" has the meaning ascribed to that term in the introductory paragraph of this Agreement, including its legal representatives, successors, and assigns. + + "TouchStar Intellectual Property Rights" means the Copyrights, the Patents, and the Trademarks. + + 4 + + "TouchStar Software" means the software necessary for the operation of call center systems which is being licensed by TouchStar pursuant to this Agreement. In the event that TouchStar develops Private Label Software for Reseller, the term "TouchStar Software," when the context so requires, shall include Private Label Software. + + "Trademarks" means all right, title and interest of TouchStar in and to (a) all trademarks, trade names, trade styles, service marks, logos, trade dress, unpatentable designs, and designations and indicia of any kind, now existing or hereafter adopted or acquired, and all registrations and recordings thereof, including applications, registrations, and recordings in the United States Patent and Trademark Office or in any similar office or agency of the United States, any state thereof, any other country or jurisdiction or any political subdivision thereof, all whether now owned or hereafter acquired by TouchStar and all reissues, extensions, or renewals thereof, and (b) any licenses of or licensing agreements (including registered user agreements) pertaining to any of the foregoing, together with all amendments, supplements, modifications or extensions thereof. + + "United States" means the United States of America and its territories + + + + + +and possessions. + +2. APPOINTMENT OF RESELLER. + + 2.1 NONEXCLUSIVE RESELLER. Subject to applicable Legal Requirements: + + (a) TouchStar hereby appoints Reseller as its nonexclusive value- added reseller for the limited purposes of promoting, marketing, distributing, licensing and selling the TouchStar Software and Support Services in the Territory, and Reseller accepts the appointment as such. Reseller shall have the right under this Agreement to promote, market, distribute, license and sell the TouchStar Software and Support Services to Customers in the Territory. TouchStar reserves the right to provide the TouchStar Software and Support Services to other customers in the Territory and/or to appoint additional distributors or representatives in all or any part of the Territory. + + 2.2 OTHER RESELLERS. Subject to applicable Legal Requirements and to the provisions of this Section 2.2: + + (a) Reseller may promote, market, distribute, license and sell TouchStar Software and Support Services in the Territory through Other Resellers; PROVIDED that: + + (i) Reseller notifies TouchStar in writing in respect of each Other Reseller that Reseller intends to use to promote, market, distribute, license and sell TouchStar Software and Support Services in the Territory; + + (ii) TouchStar approves in writing each Other Reseller that Reseller intends to use to promote, market, distribute, license and sell TouchStar Software and Support Services in the Territory, which approval TouchStar may grant in its sole discretion; + + 5 + + (iii) Reseller enters into a binding written agreement with each Other Reseller (the "Other Reseller Agreement"), which Other Reseller Agreement incorporates the terms, conditions, duties, rights and obligations of this Agreement; + + (iv) Reseller provides to TouchStar a fully executed copy of each Other Reseller Agreement; + + (v) each Other Reseller shall promote, market, distribute, license and sell the TouchStar Software and the Support Services only in the Territory and only in accordance with the provisions of this Agreement, including, but not limited to, delivery of License Agreements to Customers, and compliance with Legal Requirements and Government Controls; and + + (vi) Reseller shall terminate any Other Reseller Agreement in the event that the Other Reseller to whom or to which the Other Reseller Agreement relates fails to comply with the terms and conditions of such Other Reseller Agreement or this Agreement. Any Other Reseller shall obtain the TouchStar Software and the Support Services directly from the Reseller. + + (b) Reseller shall be responsible for all actions of Other Resellers with regard to the promotion, marketing, distribution, licensing and sale of TouchStar Software. Reseller shall be liable for any unauthorized or illegal use of the TouchStar Software by any Other Reseller, including, but not limited to, any actions or attempts to Reverse Engineer the TouchStar Software and any promotion, marketing, distribution, licensing or sale of the TouchStar Software in violation of Government Controls or other Legal Requirements. + + (c) No Other Reseller shall have the right to use, copy, modify, alter or Reverse Engineer any TouchStar Software whatsoever, and Reseller shall take all necessary steps to ensure that all acts or any Other Reseller related in any way to the TouchStar Software are consistent with the terms and conditions of this Agreement. + + 2.3 RESELLER'S OBLIGATION NOT TO COMPETE. Reseller shall not obtain the TouchStar Software or Support Services (or any software or services which compete with the TouchStar Software) for sale from any Entity other than TouchStar or its authorized agents. Nothing contained in this Agreement is intended to limit Reseller from responding to unsolicited requests from Customers from outside of the Territory; PROVIDED, HOWEVER, that Reseller shall (a) immediately notify TouchStar upon receipt of any such request and (b) not seek customers of TouchStar Software or Support Services in any other location other than in the Territory. Reseller shall not sell TouchStar Software or Support Services to any person or Entity outside the Territory or within the Territory if, to Reseller's knowledge, any such person or Entity intends to resell the TouchStar Software or Support Services outside of the Territory. Reseller shall not import, promote, + + + + + + distribute, license, market or sell any products in + + 6 + + the Territory which directly compete with the TouchStar Software or Support Services. + + 2.4 CHANGES IN TOUCHSTAR SOFTWARE AND SUPPORT SERVICES. TouchStar shall have the right at any time and from time to time, in its sole discretion, (a) to change the TouchStar Software or Support Services included within the scope of this Agreement by providing written notice to Reseller at least thirty (30) days prior to the date the change becomes effective and (b) to change the design, capabilities or other characteristics of the TouchStar Software or Support Services, or discontinue the production or marketing of all or any portion of the TouchStar Software or Support Services, without prior notice of any kind. Upgrades and enhancements to the TouchStar Software or Support Services shall automatically be deemed included as TouchStar Software or Support Services, as applicable, unless TouchStar notifies Reseller otherwise. + + 2.5 USE OF TOUCHSTAR SOFTWARE. + + (a) TouchStar hereby grants to Reseller, with the additional right to grant to Other Resellers who or which enter into an Other Reseller Agreement, the nontransferable and nonexclusive right and license to use one copy of the TouchStar Software as necessary to demonstrate the TouchStar Software to potential Customers in the Territory. Reseller shall not copy, modify, alter, Reverse Engineer or transfer, electronically or otherwise, any TouchStar Software. + + (b) TouchStar reserves the absolute right, without providing notice to Reseller, to include software code or other markings in the TouchStar Software (and the Private Label Software) to assist TouchStar in monitoring the compliance by Reseller and Other Resellers with their respective obligations not to copy, modify, alter, modify or Reverse Engineer the TouchStar Software. In addition, in order to protect TouchStar's rights in and to the TouchStar Software, THE TOUCHSTAR SOFTWARE MAY CONTAIN A PROPRIETARY SCHEME THAT ALLOWS TOUCHSTAR TO DISABLE USE OF THE TOUCHSTAR SOFTWARE BY RESELLER, ANY OTHER RESELLER, OR CUSTOMER. TOUCHSTAR MAY DISABLE THE TOUCHSTAR SOFTWARE IN THE EVENT THAT TOUCHSTAR DISCOVERS THAT RESELLER OR ANY OTHER RESELLER HAS, OR HAS ATTEMPTED TO, COPY, MODIFY, ALTER OR REVERSE ENGINEER THE TOUCHSTAR SOFTWARE. + + 2.6 LEADS FOR TOUCHSTAR SOFTWARE. Reseller shall solicit orders for TouchStar Software from potential Customers and shall submit such leads in writing to TouchStar (the "Registered Leads"). No Registered Leads shall be binding on TouchStar until accepted by TouchStar, and TouchStar reserves the right to reject any order or to cancel the same or any part of it after acceptance, for credit or for any other reason whatsoever deemed by TouchStar to be sufficient. Each Registered Lead shall include: (a) the name, address and telephone number of the Customer; (b) a list of the TouchStar Software and Support Services to be provided; (c) the delivery address for + + 7 + + the TouchStar Software, whether to Reseller or Customer; (d) the proposed shipment date; and (e) a reference to this Agreement. + + 2.7 LEAD TIMES. Registered Leads shall be submitted at least thirty (30) days prior to the requested shipping date for any TouchStar Software or Support Services. + +3. TOUCHSTAR'S DUTIES. + + 3.1 AVAILABILITY OF SUPPORT SERVICES. TouchStar shall use reasonable commercial efforts to maintain or cause to be maintained the availability of the TouchStar Software and Support Services to Customers in the Territory. + + 3.2 MARKETING AND PROMOTIONAL LITERATURE. TouchStar shall provide to Reseller marketing presentations and other literature prepared by TouchStar in the ordinary course of business describing the TouchStar Software and Support Services in order to assist Reseller in the marketing of the Support Services in the Territory (the "Marketing Materials"). The Marketing Materials will contain some or all of the Trademarks. Reseller may include its trademarks, service marks or other logos on the Marketing Materials; provided that Reseller may not remove, replace or otherwise modify the Trademarks included on such Marketing Materials. + + 3.3 LICENSES. TouchStar shall grant to Reseller those Licenses necessary for Reseller to provide Support Services to Customers. TouchStar shall charge to Reseller the cost incurred by TouchStar to obtain such Licenses. + + 3.4 INSTALLATION. + + + + + + (a) At the request and on behalf of Reseller and any Other Reseller, TouchStar will install call center systems at Customer locations; PROVIDED that (i) TouchStar and Reseller or any Other Reseller, as applicable, agree in writing on the configuration of such call center systems (the "Specifications") and (ii) Reseller and any Other Reseller informs the Customer that TouchStar is installing the call center system on behalf of such Reseller or any Other Reseller. + + (b) TouchStar will use reasonable commercial efforts to install the call center system on behalf of Reseller or any Other Reseller in a timely fashion. However, TouchStar and Reseller or any Other Reseller recognize and agree that the installation of the call center system depends on (i) TouchStar receiving certain information and data from Customer, (ii) Customer providing on a timely basis the necessary technical prerequisites for the installation of the call center system, such as T-1 lines, cabling and workstations (the "Technical Prerequisites"), and (iii) the number and type of any change orders requested by the Customer during the installation of the call center system. TouchStar will not be responsible for any delays in the installation of the call center system based on whole or in part on (i) delays by the Customer in providing information and data to TouchStar required for the installation of the call center system, (ii) the delay or failure by the Customer + + 8 + + to provide the Technical prerequisites, and (iii) any change orders requested with regard to the call center system. + +4. RESELLER'S DUTIES. + + 4.1 TECHNICAL AND SALES CAPABILITIES. Reseller acknowledges that the proper marketing and support of the TouchStar Software and Support Services requires substantial expertise and commitment. Reseller shall at all times during the term of this Agreement, at its expense, maintain the ability (a) to provide competent and adequate technical assistance, service and support, (b) to explain in detail to its Customers the features and capabilities of the Support Services, (c) to assist Customers in determining which configuration of the Support Services will best meet their particular needs and desires, and (d) otherwise to carry out its obligations under this Agreement. + + 4.2 DISTRIBUTION OF TOUCHSTAR SOFTWARE AND SUPPORT SERVICES. Reseller shall use its best endeavors to vigorously promote and resell the TouchStar Software and Support Services within the Territory. + + 4.3 MARKETING PLAN. Reseller shall be responsible for developing and implementing an annual marketing plan and system for reselling the TouchStar Software and the Support Services (the "Annual Marketing Plan"), which Annual Marketing Plan shall, prior to any use by Reseller, be approved by TouchStar. The Annual Marketing Plan shall be submitted to TouchStar no later than thirty (30) days after the Effective Date. + + 4.4 MARKETING PRACTICES. Reseller shall at all times conduct its business in a manner that reflects favorably on the TouchStar Software, the Support Services and upon TouchStar's name, goodwill, and reputation. Reseller shall demonstrate and otherwise represent the TouchStar Software and the Support Services fairly in comparison with competitive products and shall not make any false or misleading comparisons or representations regarding the TouchStar Software or the Support Services or any representations relating to the TouchStar Software or the Support Services that are inconsistent with TouchStar's product literature, or warranties. Reseller shall not engage in any illegal, deceptive, misleading, or unethical practices that may be detrimental to TouchStar. + + 4.5 PRODUCT LITERATURE. Subject to the provisions of Section 3.2, Reseller &bbsp; shall have the right to use and distribute the Marketing Literature to Customers. In the event Reseller desires to use, in connection with sales of the Support Services, any literature, technical data, price lists, promotional materials, or similar materials (including, for example, any materials written in any language other than English) other than the Marketing Materials, Reseller shall prepare such materials at its expense. All such materials shall be submitted to TouchStar for approval, and Reseller shall not use, in connection with the sale of the Support Services, any materials that have not been prepared or approved by TouchStar. + + 4.6 CUSTOMER ASSISTANCE. Reseller, at its expense, shall provide assistance to its Customers in connection with the TouchStar Software and Support Services, + + 9 + + including installation assistance, direction regarding the operation of the TouchStar Software and Support Services, and other similar assistance. + + 4.7 SOFTWARE LICENSE AGREEMENT. Reseller and each Other Reseller shall + + + + + + deliver to each Customer a copy of the License Agreement. TouchStar shall have the right to modify the terms and conditions of the License Agreement from time to time, in the sole discretion of TouchStar. Upon request from TouchStar, Reseller and each Other Reseller shall deliver the License Agreement prior to delivery of the TouchStar Software and Support Services. Reseller shall provide TouchStar with the name and address of each Customer who or which receives a copy of the License Agreement, whether from Reseller or from an Other Reseller. + + 4.8 REPORTS, FORECASTS. As frequently as TouchStar reasonably requests (but in no event less than quarterly), Reseller shall provide to TouchStar written reports showing (a) Reseller's current Customers for TouchStar Software and Support Services, (b) forecasts of Reseller's anticipated orders for TouchStar Software and Support Services, and (c) any other information regarding the TouchStar Software and Support Services and the resale of TouchStar Software and Support Services that TouchStar reasonably requests. All expenses associated with such written reports shall be borne by Reseller. + + 4.9 NOTIFICATION. Reseller shall report promptly to TouchStar concerning any market information that comes to Reseller's attention regarding TouchStar, the TouchStar Software or the Support Services, including information regarding TouchStar's market position and the competitiveness of the TouchStar Software or the Support Services in the marketplace. Reseller shall report promptly to TouchStar all claimed or suspected defects in the TouchStar Software or Support Services and shall notify TouchStar in writing of any claim or proceeding involving the TouchStar Software or Support Services within five (5) days after Reseller learns of the claim or proceeding. + + 4.10 COMPLIANCE WITH LAWS. Reseller and each Other Reseller shall conduct its business in compliance with all applicable laws and regulations in any way related to the Support Services, and performance of Reseller's duties under this Agreement. Without limiting the generality of the foregoing, Reseller shall: + + (a) Comply with all applicable international, national, regional and local laws and rules in and of the Territory now in effect or hereafter enacted or issued relating to the TouchStar Software and the Support Services; + + (b) Comply with any requirement for the registration or recording of this Agreement with any Governmental Body in the Territory; + + (c) Give proper weight and consideration to the interests of TouchStar in all dealings; + + (d) Comply at all times, and cause persons under its control to comply at all times, with any and all Government Controls and other Legal Requirements; + + 10 + + (e) Refrain from any action or omission which will cause TouchStar to be in violation of any law of any jurisdiction in the Territory or of any other Legal Requirement, including Government Controls. + + 4.11 PERFORMANCE QUOTAS. Each Annual Marketing Plan developed by Reseller during the term of this Agreement and any extension thereof shall contain quotas mutually agreed between TouchStar and Reseller for the sale by Reseller of TouchStar Software and Support Services in the Territory for the year to which such Annual Marketing Plan relates (the "Quotas"). Reseller acknowledges that meeting the Quotas is an essential element of this Agreement and that this Agreement may be terminated by TouchStar if, in TouchStar's reasonable opinion, Reseller will not meet the Quotas during the Term or any extension thereof. + + 4.12 INSURANCE. At a minimum, Reseller will subscribe for and maintain during the Term and for a period of two (2) years thereafter, commercial general liability insurance and errors and omission insurance in minimum amounts of Two Million Dollars (US$2,000,000) per occurrence. Reseller will cause its insurance agent or broker to issue and deliver to TouchStar certified copies of certificates evidencing that insurance coverage of the required types and limits are in full force and effect. Reseller will ensure that any persons or entities engaged by or employed by it will carry and maintain such insurance coverage. Each policy will include a provision requiring notice to the other party at least thirty (30) days prior to any cancellation, non-renewal, or material modification of the policy and will require that each policy will name TouchStar as an additional insured. + + 4.13 ANCILLARY SOFTWARE. Reseller shall have the right to develop ancillary software compatible with the TouchStar Software for the use of its Customers, including, but not limited to translations of the TouchStar Software for use in languages other than English (the "Ancillary Software"). In the event Reseller decides to develop Ancillary Software, Reseller shall give TouchStar thirty (30) days notice of its intent to develop the Ancillary Software. TouchStar, at its sole discretion may decide to assist with the development of the Ancillary Software. TouchStar shall own all Ancillary Software. + + + + + + 4.14 TECHNICAL PREREQUISITES. In the event that TouchStar installs call center systems on behalf of Reseller, Reseller shall provide to TouchStar any and all information on Technical Prerequisites reasonably requested by TouchStar in order to assist TouchStar in the installation of the applicable call center system. + + 4.15 COVENANT NOT TO SOLICIT. During the Term, and for a period of one year following the termination or expiration of this Agreement, Reseller will not, directly or indirectly, make an offer of employment to any current employee of TouchStar or otherwise encourage or solicit any current employee of TouchStar to leave the employ of TouchStar for any reason, or to devote less than all of such employee's efforts to the affairs of TouchStar, without (a) the prior written agreement of TouchStar, which TouchStar may grant in its sole discretion, and (b) the payment by Reseller to TouchStar of a mutually agreeable severance fee. Reseller will not make an offer of + + 11 + + employment to any former employee of TouchStar for a period of four (4) months after such employee leaves the employ of TouchStar. In the event that a court of competent jurisdiction refuses to enforce all or any portion of this Section 4.15, then such unenforceable portion will be eliminated or modified, but only to the extent necessary to permit the remaining portion of this Section 4.15 to be enforced. In the event that any provisions of this Section 4.15 are deemed to exceed the time, geographic or scope limitations permitted by applicable law, such provisions will be reformed to the maximum time, geographic or scope limitations, as the case may be, permitted by applicable law. + +5. TECHNICAL ASSISTANCE. + + 5.1 TOUCHSTAR SOFTWARE INFORMATION. TouchStar shall make available to Reseller in English such technical information relating to the TouchStar Software as it makes available to its other Resellers generally. Reseller is not entitled to receive any source code or other technical information relating to the TouchStar Software. + + 5.2 UPGRADE OF RESELLER'S CUSTOMERS. Reseller shall use reasonable commercial efforts to upgrade the software used by its Customers prior to the Effective Date to the TouchStar Software. At Reseller's request, TouchStar shall provide to Reseller and its employees assistance relating to the upgrade of software used by Reseller's Customers as of the Effective Date. + + 5.3 ADDITIONAL ASSISTANCE. TouchStar shall provide to Reseller, the Other Resellers, and its and their employees assistance relating to the TouchStar Software as reasonably requested by Reseller, but in any event in an amount not to exceed twenty (20) hours of assistance per month. In the event TouchStar provides assistance to Reseller related to technical aspects of the TouchStar Software or related to the preparation of literature, technical aspects of the TouchStar Software or related to the preparation of literature, technical materials or promotional materials, Reseller shall promptly reimburse TouchStar for any out-of-pocket expenses incurred by TouchStar in connection with rendering such assistance, including all travel expenses, lodging, and meals. TouchStar may also charge reasonably hourly or per diem rates for some or all of the services rendered under this provision, provided that TouchStar notifies Reseller before the services are rendered of the rates that will apply to the services. Nothing in this Section 5.3 shall be construed to obligate TouchStar to provide assistance of any kind to Reseller. In the event TouchStar agrees to provide assistance, the assistance shall at all times be subject to the availability of TouchStar's personnel. + +6. TERMS AND CONDITIONS OF SALE. + + 6.1 PRICE AND PAYMENT. + + (a) TouchStar shall sell the TouchStar Software and Support Services, and provide for the installation of call center systems, for the Fees. The Fees shall be valid only for TouchStar Software and Support Services sold by Reseller or Other Resellers to Customers, and the installation of call center systems on + + 12 + + behalf of Reseller and any Other Resellers at Customer locations, in the Territory during the Term. TouchStar shall have the right at any time and from time to time to change the Fees by providing to Reseller written notice at least thirty (30) days prior to the date the change becomes effective. TouchStar may change the Fees from time to time in its sole discretion; PROVIDED, HOWEVER, that new Fees shall not apply to any agreement to provide Support Services accepted by TouchStar before Reseller receives notice of the change. + + (b) TouchStar will invoice Reseller for payment of the Fee incurred within ten (10) days after the end of each billable month. + + + + + + Payment of the Fees shall be due and payable within ten (10) days of the date of the invoice. All or any portion of the Fees not paid when due shall bear interest at the rate of one and one-half (1.5%) per month, calculated from the date such payment is due until the date on which such payment is made, inclusive; PROVIDED, HOWEVER, that if such interest rate exceeds the amount allowed by applicable law, then the interest rate shall be adjusted to reflect the maximum amount allowed by such applicable law. + + 6.2 ASSESSMENTS. Reseller shall pay when due, and indemnify and hold TouchStar harmless from any and all taxes, value added taxes, general service taxes, duties, assessments and other fees associated with the providing by Reseller of the TouchStar Software and the Support Services, and the installation of call center systems on behalf of Reseller, to Customers in the Territory pursuant to this Agreement ("Assessments"). If Reseller fails to pay any Assessments when due, and TouchStar receives any Assessment from any Governmental Body, then TouchStar shall give written notice of the Assessment to Reseller. Failure by Reseller immediately to pay such Assessment may, in TouchStar's sole discretion, result in the immediate termination of this Agreement. + + 6.3 OTHER TERMS AND CONDITIONS. The terms and conditions of this Agreement and of the applicable TouchStar invoice or confirmation shall apply to all TouchStar Software and Support Services, and the installation of call center systems, provided by TouchStar under this Agreement. Terms in Reseller's purchase orders and other printed forms shall not apply to any order, notwithstanding TouchStar's acknowledgment or acceptance of the order. In the event of any conflict between the terms of this Agreement and any standard forms of either TouchStar or Reseller, the terms of this Agreement shall govern. Reseller shall not, and is not authorized to, make any warranties as to the TouchStar Software and Support Services, or with regard to the installation of call center systems by TouchStar, and any warranties exceeding the scope of TouchStar warranties shall be null and void, subject only to contrary legal requirements applicable to the Territory. + + 6.4 LIMITED WARRANTY. TouchStar warrants that (a) with regard to the TouchStar Software, (i) TouchStar will convey good title to the TouchStar Software free and clear of any claims, liens, security agreements or other encumbrances and (ii) for a period of ninety (90) days after delivery, the TouchStar Software will perform in all + + 13 + + material respects with the specifications contained in TouchStar's technical literature with regard to the TouchStar Software, (b) the Support Services will be provided in a good and workmanlike manner consistent with industry practices, and (c) with regard to call center systems installed by TouchStar, (i) TouchStar will convey good title to the call center system free and clear of any claims, liens, security agreements or other encumbrances and (ii) the call center system will be installed in a good and workmanlike manner substantially in conformance with the Specifications. EXCEPT AS PROVIDED IN THIS SECTION 6.4, TOUCHSTAR DOES NOT WARRANT THE TOUCHSTAR SOFTWARE OR SUPPORT SERVICES, OR THE INSTALLATION OF ANY CALL CENTER SYSTEM, TO RESELLER, ANY OTHER RESELLER OR ANY CUSTOMER. TOUCHSTAR MAKES NO OTHER WARRANTIES, EXPRESS OR IMPLIED, RELATING THERETO. TOUCHSTAR IS UNAWARE OF THE USE OF ANY CALL CENTER SYSTEM INSTALLED&bbsp;BY TOUCHSTAR. TOUCHSTAR MAKES NO REPRESENTATION OR WARRANTY OF ANY KIND WHATSOEVER WITH REGARD TO THE USE OF ANY CALL CENTER SYSTEM, INCLUIDNG WHETHER THE USE OF THE CALL CENTER SYSTEM CONFORMS TO APPLICABLE FEDERAL, STATE AND LOCAL LAWS. RESELLER BEARS SOLE RESPONSIBILITY TO DETERMINE WHETHER THE USE OF A CALL CENTER SYSTEM BY A CUSTOMER COMPLIES WITH APPLICABLE FEDERAL STATE AND LOCAL LAWS. SHOULD APPLICABLE LAW NOT PERMIT THE FOREGOING EXCLUSION OF EXPRESS OR IMPLIED WARRANTIES, THEN TOUCHSTAR HEREBY GRANTS THE MINIMUM EXPRESS AND IMPLIED WARRANTIES REQUIRED BY SUCH APPLICABLE LAW. + + 6.5 LIMITATION OF LIABILITY. IN NO EVENT SHALL TOUCHSTAR BE LIABLE TO RESELLER, ANY OTHER RESELLER OR ANY CUSTOMER BY REASON OF ANY REPRESENTATION OR IMPLIED WARRANTY, CONDITION, OTHER TERM, OR ANY DUTY AT COMMON LAW, OR UNDER THE TERMS OF THIS AGREEMENT, FOR ANY DIRECT, INDIRECT, SPECIAL, CONSEQUENTIAL OR PUNITIVE LOSS OR DAMAGE (WHETHER FOR LOSS OF PROFIT OR OTHERWISE) ARISING OUT OF OR IN CONNECTION WITH ANY ACT OR OMISSION OF TOUCHSTAR RELATING TO THE DEVELOPMENT, MANUFACTURE, OR SUPPLY OF THE TOUCHSTAR SOFTWARE, THE SERVICES, OR THE INSTALLATION OF ANY CALL CENTER SYSTEM, THEIR RESALE BY RESELLER, OR THEIR USE BY ANY CUSTOMER OR OTHER END USER. TOUCHSTAR SHALL NOT BE LIABLE FOR THE PROVISION OF SERVICES BY RESELLER OR ANY OTHER RESELLER, OR ANY ALTERATIONS OR MODIFICATIONS BY RESELLER TO THE TOUCHSTAR SOFTWARE OR ANY CALL CENTER SYSTEM. THE SOLE OBLIGATION OF TOUCHSTAR, AND THE SOLE REMEDY OF RESELLER OR ANY OTHER RESELLER, UNDER THIS AGREEMENT SHALL BE (A) WITH REGARD TO THE TOUCHSTAR SOFTWARE OR ANY CALL CENTER SYSTEM, THE REPLACEMENT OR REPAIR OF THE TOUCHSTAR SOFTWARE OR THE CALL CENTER SYSTEM OR, AT THE OPTION OF TOUCHSTAR, THE RETURN OF THE PURCHASE PRICE PAID BY RESELLER + + 14 + + FOR SUCH TOUCHSTAR SOFTWARE OR CALL CENTER SYSTEM AND (B) WITH REGARD + + + + + + TO SERVICES, THE REPERFORMANCE OF THE SERVICES. + +7. INTELLECTUAL PROPERTY RIGHTS. + + 7.1 OWNERSHIP OF INTELLECTUAL PROPERTY. + + (a) Reseller acknowledges that TouchStar owns or has rights to license the intellectual property and proprietary rights in, to, and relating to the TouchStar Software and Support Services, including, but not limited to, the Intellectual Property Rights. + + (b) To the extent that Reseller or any Other Reseller is deemed to be the owner of all or any portion of the TouchStar Software, any Intellectual Property Rights of TouchStar or any Ancillary Software, or any improvements or intellectual property rights related thereto pursuant to applicable law, Reseller (i) hereby assigns exclusively to TouchStar all rights of Reseller in and to such Software and any improvements and intellectual property rights related thereto royalty-free and exclusively and (ii) shall include in any Other Reseller Agreement provision by which any Other Reseller grants to TouchStar an exclusive, perpetual, irrevocable, royalty-free assignment of all deemed rights of such Other Reseller in and to such TouchStar Software, Ancillary Software and Intellectual Property Rights. Reseller shall execute, and shall cause any Other Reseller to execute, any such documents and instruments necessary to vest in TouchStar the deemed ownership rights of Reseller or Other Reseller in and to any TouchStar Software, Ancillary Software or Intellectual Property Rights, and any improvements or intellectual property rights related thereto. + + 7.2 PRIVATE LABELING. At the request of Reseller, TouchStar shall use reasonable commercial efforts to provide a private label version of the TouchStar Software (the "Private Label Software") using logos, trademarks, trade names or service marks owned by Reseller or to which Reseller has exclusive rights (the "Reseller Marks"). Reseller represents and warrants that Reseller has valid legal ownership and other exclusive rights to the Reseller Marks. Reseller grants to TouchStar a right and license to use the Reseller Marks in the preparation of the Private Label Software. Reseller shall have the right to promote, market, distribute and resell the Private Label Software pursuant to the terms and conditions of this Agreement. Reseller shall reimburse TouchStar for all costs and expenses incurred by TouchStar in making the Private Label Software available to Reseller. Except for the Reseller Marks, TouchStar shall retain all right, title and interest in and to the Private Label Software. Reseller shall indemnify, defend and hold harmless TouchStar, its Affiliates, and its and their respective directors, officers, employees, agents and representatives from and against any and all claims, suits, proceedings, costs and expenses arising out of or relating to the use by TouchStar of the Reseller Marks. TouchStar may include in the Private Label Software a legend to the effect that TouchStar owns the Private Label Software. + + 15 + + 7.3 USE OF TOUCHSTAR INTELLECTUAL PROPERTY RIGHTS. Reseller shall use the Intellectual Property Rights only to refer to the TouchStar Software in accordance with TouchStar's policies as announced from time to time. In particular, and without limitation, Reseller shall not (a) remove Trademarks from any Marketing Materials, (b) include any Trademarks or other Intellectual Property Rights in any promotional literature prepared by Reseller without the express written consent of TouchStar; (c) dispute or deny the validity of any of the Intellectual Property Rights (including any attempt to register or record the same in any jurisdiction), (d) do any act or omit to do any act whereby TouchStar's right, title, and interest in the Intellectual Property Rights may become invalidated or otherwise adversely affected, (e) alter, remove, destroy, conceal, or tamper with any Trademarks, (f) use any Intellectual Property Rights in any way which might prejudice their distinctiveness or validity or goodwill of TouchStar therein, (g) use in relation to Support Services any patents, copyrights, trademarks, or trade names other than the Intellectual Property Rights without TouchStar's prior written consent, or (h) use in the Territory any trademarks or trade names so resembling any Trademark of TouchStar as to be likely to cause confusion or deception. Upon expiration or termination of this Agreement, Reseller shall immediately cease all use of the Intellectual Property Rights and shall not thereafter use any of them or any intellectual property rights confusingly similar to the Intellectual Property Rights. + + 7.4 USE OF CONFIDENTIAL INFORMATION. Reseller acknowledges that it may receive, during the term of this Agreement, certain Confidential Information belonging to TouchStar. Reseller recognizes that such Confidential Information is proprietary to TouchStar and very valuable, having involved the expenditure of substantial amounts of money and the use of skilled experts over a long period of time. Reseller shall hold TouchStar's Confidential Information in strict confidence and shall not use or disclose any Confidential Information, or permit any person to examine or copy any Confidential Information, regardless of the manner in which Reseller gained access to it, except as necessary for the performance of Reseller's obligations under this Agreement. + + + + + + 7.5 PROTECTION OF CONFIDENTIAL INFORMATION. Reseller shall protect TouchStar's Confidential Information with the utmost care and shall cause its employees, agents, and independent contractors having access to such Confidential Information to sign confidentiality agreements requiring them to comply with all the terms of this Article 7. + + 7.6 INFRINGEMENT CLAIMS. Reseller shall promptly notify TouchStar of any known or suspected breach of the Intellectual Property Rights and shall cooperate (without charge for personal time incurred) in TouchStar's efforts to protect such TouchStar Intellectual Property Rights. TouchStar shall defend any action brought against Reseller based on an allegation that any TouchStar Software infringes a United States or foreign Patent, Copyright, or Trademark, and TouchStar shall pay all costs and damages made in settlement or awarded as a result of any such action. If a final injunction shall be obtained in any such action restraining use of the TouchStar Software by any Customer, or if TouchStar believes that any TouchStar Software is + + 16 + + likely to become the subject of a claim of infringement, TouchStar shall, at its option and at its expense, (a) procure for Reseller's Customer the right to continue using the TouchStar Software, (b) replace or modify the TouchStar Software so that it becomes non-infringing, or (c) repurchase the TouchStar Software on a depreciated (five-year straight line) basis. Notwithstanding the foregoing, TouchStar shall have no obligation with respect to any action brought against Reseller based on an allegation of Patent, Copyright, or Trademark infringement unless TouchStar is promptly notified by Reseller in writing of such action and is allowed complete control of the defense of such action and all negotiations for its settlement or compromise. This Section 7.6 states TouchStar's entire liability with respect to infringement of Patents, Copyrights, or Trademarks. + + 7.7 EQUITABLE REMEDIES. Reseller acknowledges that TouchStar will be irreparably harmed by any breach of the provisions of this Section 7. Therefore, in addition to any other remedies that TouchStar may have, TouchStar shall be entitled to an injunction, issued by any court of competent jurisdiction, wherever located, restraining any violation of this Section 7 or specified performance if applicable. Reseller hereby waives, with respect to any future dispute related to this Section 7, any defense based on the argument that TouchStar will not be irreparably harmed by a breach or that TouchStar has available to it an adequate remedy for damages. + + 7.8 RESELLER'S OBLIGATIONS AS TO CONFIDENTIAL INFORMATION AFTER TERMINATION. All obligations of Reseller relating to TouchStar Confidential Information shall survive the expiration or termination of this Agreement. Promptly upon expiration or termination of this Agreement, Reseller shall not have a right of retention with respect to, and shall return to TouchStar, all materials in Reseller's possession or control that represent or contain Confidential Information, including all memoranda, computer programs, documents, notes, and every other medium. Reseller shall not retain for its own use or the use of any third party any such materials or any copies thereof. + +8. TERM AND TERMINATION. + + 8.1 TERM OF AGREEMENT. This Agreement shall continue in force for a term of twelve (12) months from the Effective Date, unless terminated earlier under the provisions of this Article 8 (the "Term"); PROVIDED that TouchStar shall have the right to terminate this Agreement at any time after the Effective Date upon not less than fifteen (15) days' prior written notice to Reseller. Prior to the end of the Term, each of TouchStar and Reseller may notify the other if it desires to negotiate a further agreement by written request received at least ninety (90) days in advance of the termination of this Agreement. If both parties desire to negotiate a further agreement, they may consider the terms of this Agreement in coming to an understanding. Nothing in this Agreement shall be construed to obligate either party to renew or extend the term of this Agreement. Renewals for additional terms, if any, shall not cause this Agreement to be construed as an agreement of indefinite duration. + + 8.2 TERMINATION AT TOUCHSTAR OPTION. TouchStar may terminate this Agreement upon the occurrence and continuation of any of the following events, with the understanding + + 17 + + that, if no cure period specifically is stated with regard to an event, then no cure period for such event applies: + + (a) Reseller fails to make any payment of Fees due to TouchStar under this Agreement and such failure remains unremedied for a period of ten (10) days; + + (b) Reseller breaches any of its other obligations under this Agreement and such breach remains unremedied for a period of + + + + + + thirty (30) days; + + (c) Reseller or any Other Reseller takes any action to Reverse Engineer the TouchStar Software; + + (d) Reseller fails to comply with applicable Legal Requirements, including Government Controls; + + (e) Reseller fails to reach the Quotas established by the parties; + + (f) Reseller repeatedly breaches any of its obligations under this Agreement, even though Reseller remedies each such breach within the applicable time period specified above; + + (g) Reseller fails to execute an Other Reseller Agreement with any Other Reseller; + + (h) Reseller or any Other Reseller fails to deliver a License Agreement to a Customer; + + (i) Reseller fails to indemnify TouchStar, its Affiliates and its and their respective directors, officers, employees, agents and representatives for any claims related to or arising under any Other Reseller Agreement or the use by TouchStar of the Reseller Marks; + + (j) Reseller is negligent in the fulfillment of its obligations to market and resell the TouchStar Software; + + (k) Reseller breaches any of its obligations relating to the Intellectual Property Rights or Confidential Information; + + (l) Reseller, any of Reseller's officers, directors, or shareholders, or any entity controlling, controlled by or under common control with Reseller promotes, sells, or offers for sale any product or other item that is, in TouchStar's reasonable opinion, competitive with or capable of being substituted for any of the TouchStar Software; or Reseller engages in overt or subvert forms of boycott of the TouchStar Software, including the offer for sale of any product or other item that is, in TouchStar's reasonable opinion, competitive with or capable of being substituted for any of the TouchStar Software; + + (m) In the event of a sale, conveyance, transfer or other disposition, in any transaction or series of transactions that results, directly or indirectly, in a + + 18 + + change of fifty percent (50%) or more of the aggregate voting power in Reseller as such existed on and as of the Effective Date; + + (n) Reseller is merged or consolidated with any other entity or there is a substantial change in the management or control of Reseller; or + + (o) Reseller ceases to function as a going concern or ceases to conduct its operations in the normal course of business or any of its directors, shareholders, or officers is convicted of a criminal offense or engages in any other act that in TouchStar's opinion could have an adverse effect upon TouchStar's reputation and goodwill. + + 8.3 SUSPENSION OF TOUCHSTAR OBLIGATIONS. Immediately upon the occurrence of any breach by Reseller of any of its obligations under this Agreement or upon the occurrence of any event or circumstance identified in Section 7.3 of this Agreement, all of TouchStar's obligations to provide Support Services shall be suspended and such obligations shall remain suspended until the event or circumstance giving rise to the suspension has been corrected to TouchStar's satisfaction. + + 8.4 SURVIVAL OF RESELLER OBLIGATIONS. The termination of this Agreement shall not terminate or affect the continuing binding obligations imposed by Sections 4.4, 4.7, 4.10, 4.12, and 5, 6, 7, 8, 9 and 10 this Agreement. It is understood and agreed that the obligations of Reseller set forth in such provisions may be specifically enforced by TouchStar in any court of competent jurisdiction, wherever located, notwithstanding the provisions of Section 10.12(b) hereof, since no other adequate remedy may exist in the event of a breach or threatened breach by Reseller of any such provisions. + +9. DUTIES UPON TERMINATION. + + In addition to any other provision of this Agreement which is designated in Section 8.6 as a provision surviving termination, the following shall apply: + + 9.1 CUSTOMER AGREEMENTS. + + (a) In the event that (i) TouchStar terminates this Agreement in accordance with any one or more of the provisions of Section 8.2 or (ii) Reseller elects not to enter into a new agreement with + + + + + + TouchStar pursuant to Section 8.1, all Customer Agreements with Customers shall be transferred by Reseller to TouchStar. + + (b) In the event that (i) TouchStar elects not to enter into a new agreement with Reseller pursuant to Section 8.2 or (ii) Reseller terminates this Agreement in accordance with the provisions of Section 8.3, Reseller shall retain all Customer Agreements with Customers and TouchStar shall continue to provide Support Services under such Customer Agreements for the remaining term of such Customer Agreements. + +&bbsp; 19 + + 9.2 REFERRALS BY RESELLER. In the event that (a) TouchStar terminates this Agreement in accordance with any one or more of the provisions of Section 8.2 or (b) Reseller elects not to enter into a new agreement with TouchStar pursuant to Section 8.1, Reseller shall refer to TouchStar or TouchStar's designee all inquiries and orders received by Reseller pertaining to the purchase of Support Services. + + 9.3 PAYMENT OF FEES. + + (a) In the event that this Agreement terminates or expires pursuant to Section 8.1(a), Reseller immediately shall pay to TouchStar all Fees outstanding on and as of the date of termination or expiration of this Agreement. + + (b) In the event that this Agreement terminates or expires pursuant to Section 8.1(b), Reseller shall continue to pay all Fees in accordance with the provisions of Section 6.2. + + 9.4 INTELLECTUAL PROPERTY RIGHTS. Reseller immediately shall stop the use of Marketing Materials and Intellectual Property Rights, and shall return any unused Marketing Materials and all physical media upon which Intellectual Property Rights are contained by TouchStar. + + 9.5 SHIPMENTS FOLLOWING NOTICE OF TERMINATION. The expiration or termination of this Agreement shall not relieve TouchStar of its continuing obligation to ship TouchStar Software pursuant to any purchase orders accepted by TouchStar prior to the notice of termination, nor shall it relieve Reseller of its continuing obligation to accept and pay for such TouchStar Software; PROVIDED, HOWEVER, that with respect to all TouchStar Software shipped after any notice of termination, Reseller shall make payment prior to shipment on terms and conditions and by means satisfactory to TouchStar, notwithstanding any credit terms that may have been available to Reseller prior to such notice of termination. + + 9.6 LIABILITY UPON TERMINATION. TouchStar shall have no liability to Reseller or any Other Reseller by reason of the termination or expiration of this Agreement for compensation, reimbursement, or damages of any kind, including any loss of prospective profits on anticipated sales, loss of goodwill, or investments made in reliance on this Agreement. Reseller acknowledges that it has received no assurances from TouchStar that its business relationship with TouchStar will continue beyond the term established in this Agreement, or that it will obtain any anticipated amounts of profits in connection with this Agreement, or that it will recoup its investment in the promotion of the TouchStar Software. Reseller also acknowledges that Reseller's failure to reach the Quotas will have a significant adverse impact on TouchStar's goodwill in the Territory, and that if Reseller is terminated because of failure to meet the Quotas, then Reseller will not be entitled to compensation of any kind (beyond the notice period set forth in this Agreement), since the damage to &sbsp; TouchStar's goodwill is likely to be at least as great as any losses Reseller might incur as a result of the termination. However, these provisions apply only to damages that are attributable to the expiration or termination of this Agreement and shall not affect any amount due + + 20 + + under this Agreement or the right of either party to seek damages directly attributable to any breach. + +10. GENERAL PROVISIONS. + + 10.1 RELATIONSHIP BETWEEN THE PARTIES. Neither party to this Agreement and none of their respective agents, employees, representatives or independent contractors shall (a) be considered an agent, employee, or representative of the other party for any purpose whatsoever, (b) have any authority to make any agreement or commitment for the other party or to incur liability or obligation in the other party's name or on its behalf, or (c) represent to third parties that any of them has any right so to bind the other party hereto, it being intended that each party shall remain an independent contractor responsible only for its own actions. Nothing contained in this Agreement shall be construed or interpreted as creating an agency, partnership, or joint venture relationship between the parties. + + + + + + 10.2 RESELLER REPRESENTATION, WARRANTY AND UNDERTAKING. Reseller (a) represents and warrants that (i) it is a corporation duly organized and existing under the laws of the jurisdiction of its incorporation with all necessary corporate power and authority to execute, deliver, and perform its obligations under this Agreement, and that the execution, delivery, and performance of its obligations under this Agreement have been duly authorized by all requisite corporate action of Reseller and all Legal Requirements of Governmental Bodies, (ii) it has the requisite skill and knowledge necessary to perform its obligations under this Agreement, (iii) that it currently is not in violation of any Legal Requirements, and (iv) no current employee or shareholder of TouchStar has an ownership interest in Reseller or any affiliate or related entity of Reseller; and (b) covenants that, during the Term, it (i) shall use its best endeavors to maintain its corporate identity and remain in existence under the organizing laws of its jurisdiction and (ii) promptly notify TouchStar in the event that any employee or shareholder of TouchStar obtains an ownership interest in Reseller or any affiliate or related entity of Reseller. + + 10.3 NOTICES. Without precluding any other sufficient form of notice, all notices, demands, or other communications under this Agreement shall be deemed given if sent by registered airmail, facsimile, hand delivery, or express courier to the address of the party as set out in this Agreement or to another address specified by the party. All notices, demands, and other communications in connection with this Agreement shall be written in the English language. + + 10.4 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement between the parties pertaining to its subject matter, and it supersedes any and all written or oral agreements previously existing between the parties with respect to such subject matter. No supplement, modification, or amendment of this Agreement shall be binding unless executed in writing by both parties. + + 10.5 WAIVER. Either party's failure to insist on strict performance of any provision of this Agreement shall not be deemed a waiver of any of its rights or remedies, nor shall it relieve the other party from performing any subsequent obligation strictly in + + 21 + + accordance with the terms of this Agreement. No waiver shall be effective unless it is in writing and signed by the party against whom enforcement is sought. Such waiver shall be limited to provisions of this Agreement specifically referred to therein and shall not be deemed a waiver of any other provision. No waiver shall constitute a continuing waiver unless the writing states otherwise. + + 10.6 SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit of, and shall be binding upon, the respective heirs, legal representatives, successors, and assigns of each of the parties. + + 10.7 ASSIGNMENT. + + (a) TouchStar may assign this Agreement and the rights and responsibilities under this Agreement to an Affiliate upon written notice to Reseller. + + (b) Except for the rights of TouchStar under Section 10.7(a), this Agreement may not be assigned by either party without the prior written consent of the other. Any attempted assignment in violation of this provision shall be void and shall be deemed a breach of this Agreement. + + 10.8 INDEMNIFICATION. Reseller shall be solely responsible for, and shall indemnify TouchStar, its officers, directors, employees, and agents against, and hold each of them harmless from, any and all claims (including without limitation, all damages (whether direct, indirect, incidental, criminal, special, or punitive), losses, liabilities, expenses, costs, and attorneys' fees related to such claims) resulting from (a) the negligent or willful failure of Reseller to comply with its obligations hereunder, (b) the acts or omissions of Reseller, its officers, directors, employees, or agents during the term of this Agreement or thereafter, (c) any express or implied representation or warranty made by Reseller or any of its officers, directors, employees or agents with regard to the TouchStar Software or the Support Services not contained in written literature of TouchStar or specifically authorized by TouchStar in writing, and (c) the installation of a call center system by TouchStar on behalf of Reseller or any Other Reseller and the use of the TouchStar Software in the operation of a call center system, unless caused by the gross negligence or willful misconduct of TouchStar. + + 10.9 SECTION HEADINGS; CONSTRUCTION. The section headings in this Agreement are included for convenience only and shall not be deemed to limit or otherwise affect the construction of any of its provisions. The word "including" shall be ascribed a non-exclusive meaning unless followed by the word "only." + + 10.10 SEVERABILITY. In the event that any of the provisions of this Agreement shall be held by a court, arbitral panel, or tribunal of competent jurisdiction to be unenforceable, such provision will be enforced to the maximum extent permissible and the remaining portions + + + + + + of this Agreement shall remain in full force and effect. + + 10.11 PARTIES IN INTEREST. Nothing in this Agreement is intended to confer any rights or remedies on any persons other than the parties to it. This Agreement shall not be construed to relieve or discharge any obligations or liabilities of third persons, nor + + 22 + + shall it be construed to give third persons any right of subrogation or action over against any party to this Agreement. + + 10.12 GOVERNING LAW AND ARBITRATION. + + (a) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF COLORADO, UNITED STATES, WITHOUT REGARD TO ITS PRINCIPLES REGARDING CONFLICT OF LAWS. + + (b) ARBITRATION. Any dispute arising out of or relating to this Agreement, including, without limitation, the interpretation of any provision of this Agreement or the breach, termination or invalidity of this Agreement that cannot reasonably be resolved by the Parties shall be settled exclusively and finally by binding arbitration under the International Arbitration Rules of the American Arbitration Association in effect on and as of the date of this Agreement (the "AAA Rules"), except as such AAA Rules are modified pursuant to this Section 10.12(b). + + (i) The arbitration shall be conducted before a panel of three (3) arbitrators, each of whom shall be fluent in English and shall have knowledge in the call center industry. TouchStar shall appoint one (1) arbitrator, Customer shall appoint one (1) arbitrator, and the third arbitrator shall be selected by the two (2) arbitrators so appointed; PROVIDED, HOWEVER, that if the two (2) arbitrators appointed by the parties fail to select the third arbitrator within thirty (30) days after the date on which the last of such two (2) arbitrators are appointed, then the third arbitrator shall be appointed by the administrator in accordance with the AAA Rules. The third arbitrator, regardless of how selected, shall chair the arbitration panel. + + (ii) Once the arbitrators are impaneled, if (A) an arbitrator withdraws after a challenge, (B) the administrator sustains a challenge and removes an arbitrator, (C) an arbitrator dies, or (D) an arbitrator otherwise resigns or is removed, then the party which appointed such arbitrator shall appoint a replacement arbitrator within thirty (30) days in accordance with the procedures set forth in Section 10.12(b)(i). + + (iii) The arbitration shall be conducted in Denver, Colorado, United States. The arbitration shall be conducted in English; PROVIDED, that either party, at its cost, may provide for the simultaneous translation of the arbitration into a language other than English. + + (iv) No less than thirty (30) days prior to the date on which the arbitration proceeding is to begin, each party shall submit to the other party the documents, in English, and list of witnesses it + + 23 + + intends to use in the arbitration. At any oral hearing of evidence in connection with the arbitration, each party or its legal counsel shall have the right to examine witnesses and to cross-examine the witnesses of the opposing party. + + (v) The arbitrators shall apply the substantive law of the State of Colorado to any decision issued by the arbitration panel, and the arbitrators shall be so instructed. The arbitrators shall issue a written opinion stating the findings of fact and the conclusions of law upon which the decision is based. The decision of the arbitrators shall be final and binding. Judgment on such award may be entered in any court of appropriate jurisdiction, or application may be made to that court for a judicial acceptance of the award and an order of enforcement, as the party seeking to enforce that award may elect. Any arbitration award for money damages shall be in Dollars. Other than pursuant to this Section 10.12(b)(v), the arbitration award shall not include any indirect, incidental, special, consequential, or punitive damages and the arbitrators shall be so instructed. + + (vi) Any arbitration award pursuant to this Section 10.12(b) shall be subject to the United Nations Convention on the + + + + + + Recognition and Enforcement of Foreign Arbitral Awards of 1958. + + (c) JURISDICTION AND VENUE FOR INTERIM RELIEF. Notwithstanding the provisions of Section 10.12(b), each party shall have the right to bring an action in a court of competent jurisdiction of any equitable or other relief as may be necessary to protect the rights of such party under this Agreement. + + (d) WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING, CLAIM OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ITS INTERPRETATIONS. + + 10.13 GOVERNING LANGUAGE. The governing language of this Agreement shall be English. If this Agreement is translated into a language other than English, then the English version shall prevail. + + 10.14 EXCLUSION OF UNITED NATIONS CONVENTION. The United Nations Convention on Contracts for the International Sale of Goods is hereby excluded from application to this Agreement. + + 10.15 FORCE MAJEURE. Neither party shall be responsible for any failure to perform due to unforeseen circumstances or to causes beyond that party's control, including but not limited to acts of God, war, riot, acts of terrorism, embargoes, acts of civil or military authorities, compliance with governmental laws, rules or regulations, failure of telecommunications connectivity beyond the reasonable control of the parties, + + 24 + + accidents, strikes, labor disputes, or shortages. Failure to perform shall be excused during the continuance of such circumstances, but this Agreement shall otherwise remain in effect. + + 10.16 PUBLICITY; DISCLOSURES. Except as expressly provided herein and except to the extent required by applicable law, no news releases or other public disclosures relating to this Agreement, its existence or its subject matter, including without limitation, photographs, public announcements or confirmation of the same, shall be made by either party without the prior written approval of the other party. + + [SIGNATURE PAGE FOLLOWS] + + 25 + + IN WITNESS OF THE FOREGOING, the parties have caused this Agreement to be signed by their respective duly authorized representatives all as of the Effective Date. + +WORLDWIDE STRATEGIES INC. TOUCHSTAR SOFTWARE CORPORATION + +By: /s/ JAMES P.R. SAMUELS By: /s/ SHAWN SUHRSTEDT ---------------------------- ----------------------------- Title: PRESIDENT Title: CFO ------------------------- --------------------------- Date: SEPT 14-2005 Date: 9/15/5 -------------------------- ---------------------------- + + + + + + 26 \ No newline at end of file diff --git a/full_contract_txt/WPPPLC_04_30_2020-EX-4.28-SERVICE AGREEMENT.txt b/full_contract_txt/WPPPLC_04_30_2020-EX-4.28-SERVICE AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..f776f50ff644237256bdf4836c1321bfbab4e348 --- /dev/null +++ b/full_contract_txt/WPPPLC_04_30_2020-EX-4.28-SERVICE AGREEMENT.txt @@ -0,0 +1,319 @@ +Table of Contents + +Exhibit 4.28 + +SERVICE AGREEMENT + +1 OCTOBER 2019 + +WPP 2005 LIMITED + +and + +JOHN ROGERS + + + + + +Table of Contents + +CONTENTS Clause Page + +1. Interpretation 3 2. Commencement of Appointment 4 3. Executive's Duties 4 4. Place of Work 5 5. Working Hours 5 6. Remuneration 5 7. Expenses 6 8. Pensions 6 9. Insurances 7 10. Sickness Absence 8 11. Holidays 8 12. Other Interests 8 13. Confidential Information 9 14. Intellectual Property 10 15. Termination of Employment 12 16. Garden Leave 14 17. Office as a Director 14 18. Protective Covenants 15 19. Data Protection 15 20. Grievance and Disciplinary Procedure 15 21. Collective Agreements 16 22. General 16 + +Signatories 16 + +Schedule + +1. Power of Attorney 17 2. Incentive Plans 18 3. Protective Covenants 21 + + + + + +Table of Contents + +THIS AGREEMENT is made on 1 October 2019 + +BETWEEN: (1) WPP 2005 LIMITED (registered number 01003653) whose registered office is at Sea Containers, 19 Upper Ground, London SE1 9GL (the Company) (2) JOHN ROGERS (the Executive). + +IT IS AGREED as follows: 1. INTERPRETATION 1.1 In this Agreement: + +Appointment means the employment of the Executive by the Company on and subject to the terms of this Agreement; + +Board means the board of directors of the Company or any committee of the board duly appointed for the purpose in question, from time to time; + +Financial Year means the Company's financial year ending on 31 December each year; + +Group means the Company, any holding company of the Company, and any holding company of the holding company from time to time, together with any subsidiary of the Company or its holding company or the holding company of its holding company, and Group Company means any one of them; + +holding company and subsidiary shall, as the context so permits, have the meaning given by section 1159 of the Companies Act 2006 or under relevant applicable laws in Jersey; + +Recognised Investment Exchange means a relevant EEA market as defined in, or a market established under, the rules of any investment exchange specified in schedule 3 to the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005; + +Compensation Committee means the committee of non-executive directors as appointed by the Board of WPP plc from time to time for the purposes of determining the Company's policy on executive remuneration; + +Termination Date means the date on which the Appointment terminates for whatever reason; and + +UK Listing Authority means the FCA, acting in its capacity as the competent authority for the purposes of part VI of the Financial Services and Markets Act 2000. 1.2 A reference to a particular law is a reference to it as it is in force for the time being, taking account of any amendment, extension or re-enactment, and includes any subordinate legislation for the time being in force made under it. 1.3 The headings in this Agreement are for convenience only and do not affect its interpretation. 3 + + + + + +Table of Contents + +2. COMMENCEMENT OF APPOINTMENT 2.1 The Appointment will begin on 27 January 2020 or such other date as the parties shall agree and when the Executive is not subject to any restrictions to prevent the commencement of his employment with the Company. There is no period of previous employment with the Company. 2.2 The Appointment may be terminated in accordance with clause 15 (or in furtherance of any right either party may have at common law). 3. EXECUTIVE'S DUTIES 3.1 The Executive shall serve the Company as Chief Financial Officer and as an Executive Director of WPP plc, and/or in such other capacity or capacities, within the Group as the Company may reasonably require from time to time, but subject always to it being consistent with his status, skills and experience. 3.2 During the Appointment the Executive shall: (a) diligently exercise such powers and perform such duties as may from time to time be assigned to him by the Board of WPP plc; (b) accept any offices or directorships as reasonably required by the Company; (c) use his best endeavours to promote, protect, develop and extend the business of the Company and any Group Company; (d) comply with all reasonable and lawful directions given to him by the Board of WPP plc; (e) comply with all policies and procedures of the Company and/or the Group. The Executive's attention is drawn, in particular, but without limitation, to the Company's data protection, anti-bribery and corruption and expenses policies and the WPP Code of Conduct; (f) comply with all requirements, recommendations or regulations of any regulatory authority which is relevant to the Executive's role and/or to the Company or any relevant Group Company; (g) promptly make such reports to the Board of WPP plc in connection with the affairs of the Company or any Group Company on such matters and at such times as are reasonably required; (h) report to the Board of WPP plc his own wrongdoing and any wrongdoing or proposed wrongdoing of any other employee who reports to him or a director of the Company or any Group Company, to the extent he has first-hand knowledge of such wrongdoing or proposed wrongdoing by such employee or director, promptly on becoming aware of it; (i) comply with the articles of association (as amended from time to time) of any Group Company of which he is a director; (j) abide by all statutory, fiduciary or common law duties to the Company or any Group Company of which he is a director; (k) do such things as are necessary to ensure compliance by himself and the Company or any relevant Group Company with the UK Corporate Governance Code of the UK Listing Authority (as amended from time to time); 4 + + + + + +Table of Contents + +(l) comply with all requirements, recommendations or regulations, as amended from time to time, of the UK Listing Authority, the Market Abuse Regulation (596/2014/EU), the FCA and all other regulatory authorities relevant to the Company or any Group Company and any code of practice issued by the Company (as amended from time to time) relating to dealing in the securities of the Company or any Group Company; and (m) comply with the requirements under both legislation and regulations on insider dealing. 4. PLACE OF WORK 4.1 The Executive's normal place of work shall be the Company's head office in the UK from time to time as the Company may reasonably determine, for the proper performance of his duties. The Executive shall travel to such places (inside and) outside the UK as may be required in order to properly perform his duties, in particular, to the head office in the USA. In connection therewith, the Executive is likely from time to time to be required to work outside the UK for periods exceeding one month. 4.2 There are currently no additional terms which apply where the Executive is required to work outside the UK for a period exceeding one month, but the Company reserves the right to issue such terms, and any such terms will be notified to the Executive. 5. WORKING HOURS 5.1 The parties agree that the Executive's role and senior status are such that the Executive will determine the whole of his working time himself and his working time cannot be measured or pre-determined and, accordingly, that the Appointment falls within the scope of Regulation 20 of the Working Time Regulations 1998, meaning that the restrictions on working time set out in the Working Time Regulations do not apply to him. 5.2 During the Appointment, unless prevented by ill-health or accident and except during holiday taken in accordance with clause 11, the Executive shall devote the whole of his time, skill and attention during normal business hours, and at such other times as may be reasonably necessary (without additional remuneration), to his duties under this Agreement. 6. REMUNERATION 6.1 The Company will pay the Executive a salary of £740,000 and a fixed benefits allowance of £30,000 per annum. The salary (and so far, as is reasonably possible) the benefits allowance will accrue from day to day and be payable in equal instalments in arrears on or around the 25th day of every month, less deductions for income tax and National Insurance contributions and shall be inclusive of any fees receivable by the Executive as a director of any Group Company. 6.2 The Executive's salary will be reviewed by the Compensation Committee every two years. There will be no salary review after notice to terminate this Agreement has been given by either party. The Company has no obligation to increase the Executive's salary following a review. 6.3 The Executive will be eligible to participate in any bonus or discretionary remuneration plan on such terms as the Compensation Committee may from time to time decide and always subject to the terms of the Executive Remuneration policy as approved by shareholders of WPP plc and to additional terms and conditions including the malus and clawback provisions of all relevant share or stock plans and as referred to in Schedule 2. 6.4 Any bonus payment to the Executive shall be purely discretionary and shall not form part of the Executive's contractual remuneration under this Agreement. Payment of a bonus to the Executive in 5 + + + + + +Table of Contents + +one year shall confer no right on the Executive to receive a bonus in any other year. Specifically, but without limitation, the Executive shall have no right to be considered for, or payment of, a bonus where the Executive is subject to, or may about to be subject to, an ongoing investigation or disciplinary process into facts or matters which could lead to such bonus being forfeited, or reduced and in all events if the Appointment has terminated for any reason or if he is under notice of termination whether given by the Executive or the Company at or prior to the date when a bonus might otherwise have been payable. For the avoidance of doubt, if the Executive is exonerated of any of the allegations made during any such disciplinary process or if any investigation does not result in any material action against the Executive, he will (once the disciplinary process or investigation is concluded) have the right to be considered for a bonus as if there had been no such investigation or disciplinary process. If any bonus becomes payable in such circumstances it will be paid without delay following the conclusion of the disciplinary process or investigation. 6.5 The Executive hereby irrevocably consents to the Company, at any time during the Appointment or on its termination (however arising), deducting from salary or any other payments due to the Executive in respect of the Appointment any monies due from him to the Company or any Group Company. 6.6 The Executive agrees that every benefit arising out of or in connection with his employment whilst he remains a director is subject to change (including detrimental change without compensation) where any particular benefit paid, or otherwise owing or becoming payable to him in the future, breaches or may breach the terms of the shareholder approved Executive Compensation Policy at any time. 7. EXPENSES + +The Company will reimburse the Executive (on production of such evidence as it may reasonably require) the amount of all travelling and other expenses properly and reasonably incurred by him in the discharge of his duties in strict accordance with the Company's expenses policy from time to time. 8. PENSION 8.1 The Company operates a Group pension plan (the Plan). The Executive is entitled to participate in the Plan (or such pension scheme as may be established by the Company to replace the Plan), subject to its trust deeds and rules from time to time. The Executive has opted out of the Plan. Whilst his status remains so, he will receive in lieu the annual sum of 10% of his current salary, paid monthly in instalments, together with his salary. 8.2 The Company reserves the right to terminate the Plan at any time without replacing it. In this event, and assuming he is, or has been, a member, the Executive's rights (if any) will be in accordance with the said trust deeds and rules. 8.3 The Executive has been grated Fixed Protection. The Company acknowledges that once the Executive has informed the Company that he has Fixed Protection, under Regulation 5D of the Occupational and Personal Pension Schemes (Automatic Enrolment) Regulations 2010 it does not need to automatically-enrol or automatically re-enrol the Executive into a pension scheme. The Company therefore agrees not to enrol the Executive in the Plan or any other pension scheme at any time after the Executive has informed the Company that he has Fixed Protection 2016, + +The Company agrees in the meantime that it will not enrol the Executive into the Plan or any other pension scheme unless it is compelled to do so by law or the parties agree in writing otherwise. If the Company is compelled to enrol the Executive into the Plan or another pension scheme under law, or the Executive opts to join the Plan or any other pension scheme the Executive acknowledges and agrees that: 6 + + + + + +Table of Contents + +(a) the Company has no liability to him if payment of any contribution to, or the provision of any benefit under, the Plan (whether by itself or when aggregated with any contribution to or any increase in value of the Executive's rights under any other arrangement) gives rise to an annual allowance or lifetime allowance charge (within the meaning of the Finance Act 2004) and that the Company has no responsibility to make any enquiry or advise the Executive as to the possibility of any such charge; (b) he is liable for reporting and paying any such charge in accordance with the Finance Act 2004; and (c) the Company has no liability to him in respect of any loss for any reason of enhanced protection, fixed protection, fixed protection 2014, fixed protection 2016 or any similar protection allowed in future (for the purposes of the Finance Act 2004) if applicable to the Executive. 9. INSURANCES 9.1 In partial spend of the fixed benefits allowance referred to in sub-clause 6.1, the Executive and his spouse or civil partner and any children under the age of 21 (or 24 if in full time education) are entitled to membership of a private medical insurance scheme. 9.2 The Executive is entitled to membership of a Group income protection plan and life assurance cover, which will be paid for by the Company. 9.3 Participation in all insurance schemes from time to time is subject to: (a) the terms of the relevant insurance scheme, as amended from time to time; (b) the rules or the insurance policy of the relevant insurance provider, or WPP Healthcare Trust as amended from time to time; and (c) the Executive (and where relevant any other potential beneficiary) satisfying the normal underwriting requirements of the relevant insurance provider and the premium being at a rate which the Company considers reasonable. 9.4 If the insurer refuses for any reason to provide the benefit to the Executive (or any relevant dependant) the Company shall not be liable to provide to the Executive any replacement benefit of the same or similar kind or to pay any compensation in lieu of such benefit. Full details of the insurance schemes are available from the Company's Worldwide Compensation and Benefits Director. 9.5 For the avoidance of doubt, the Company's sole obligations in respect of the insurance benefits referred to in sub clause 9.1 and 9.2 is to pay the premia from time to time requested by the provider and to pay to the Executive any sums as may from time to time be received by the Company from the provider in respect of any claim made by the Executive (for him or a dependent) under any insurance scheme. 9.6 The Company shall have the right at its sole discretion to alter the cover provided or any term of any insurance scheme or to cease to provide (without replacement) any insurance scheme or cover at any time. 9.7 The Executive is entitled to the benefit of any indemnity in the Company's articles of association and may also entitled to the benefit of cover under such directors and officers liability insurance policy as may be maintained by the Company from time to time. 7 + + + + + +Table of Contents + +10. SICKNESS ABSENCE 10.1 If the Executive cannot attend work due to sickness or injury, the Executive will keep the Chairman informed of his condition and, where the absence lasts for a period of seven calendar days or more, the Executive will (at the request of the Company) produce a doctor's certificate to the Company in respect of his absence. (a) Provided the Executive complies with the Company's sickness absence notification and certification requirements, the Executive shall be entitled to receive his full salary and contractual benefits during any period of sickness absence not exceeding 26 weeks in any rolling period of 12 months. These payments shall be inclusive of any Statutory Sick Pay due. No payment of salary will be made during any subsequent period of absence when the Executive is eligible to receive benefits under the Group income protection plan referred to in sub clause 9.2. 10.2 If the Company so reasonably requires, the Executive agrees to consent to a medical examination by a medical practitioner nominated by the Company, at the Company's expense. The Executive agrees that the Company may have access to reports and results produced in connection with any such examination and that it may discuss the contents of the report with the relevant medical practitioner, subject to the Executive being given the opportunity to review and comment on the report before it is disclosed to anyone within the Company. 10.3 If the Executive is absent due to illness for more than one month, the Board shall be entitled at any time thereafter to appoint an executive director or employee to perform the Executive's duties and to exercise his powers until the Executive is able to resume his duties, following which such substitute will cease to act in the Executive's role. 10.4 The Company reserves the right to terminate the Appointment under the terms of this Agreement even when this would or might cause the Executive to forfeit any entitlement to sick pay or Group income protection benefit. 11. HOLIDAYS 11.1 The Company's holiday year runs from 1 January to 31 December (the Holiday Year). The Executive is entitled to 25 days' paid holiday in addition to the usual public or bank holidays in England) in every Holiday Year, to be taken at times convenient to the Company. 11.2 No accrued but untaken holiday may be carried forward to the next holiday year and will lapse unless the Executive has been prevented from taking holiday due to sickness or statutory family leave to which he is or may be entitled further to Company policy from time to time. 11.3 The Company reserves the right to require the Executive to take any outstanding holiday during any period of notice of termination of employment or to make a payment in lieu of holiday outstanding at the Termination Date. If, at the Termination Date, the Executive has taken more holiday than he has accrued, the Executive hereby expressly consents to the Company deducting an appropriate amount from any payments otherwise due him. Deductions and payments in lieu of holiday are to be calculated on the basis that a day's holiday is equal to 1/260 of the Executive's basic salary. 12. OTHER INTERESTS + +During the Appointment, the Executive may not accept any employment with or appointment to any office, whether paid or unpaid, in relation to anybody, whether corporate or not (other than a Group Company), or directly or indirectly be interested in any manner in any other business except: 8 + + + + + +Table of Contents + +(a) as holder or beneficial owner (for investment purposes only) of any class of securities in a company if those securities are listed or dealt in on a Recognised Investment Exchange and the Executive (together with his spouse, children, parents and parents' issue) neither holds nor is beneficially interested in more than 1% of the securities of that class; or (b) with the consent in writing of the Company, which may be given subject to any terms which the Company requires. 13. CONFIDENTIAL INFORMATION 13.1 In this clause 13, Confidential Information means information (whether or not recorded in documentary form, or stored on any magnetic or optical disk or memory) relating, without limitation, to the business, clients, customers, products, affairs and finances of the Company or any Group Company for the time being confidential to the Company or any Group Company or in relation to which the Company or any Group Company is subject to a duty of confidentiality and trade secrets including, without limitation, technical data and know-how relating to the business of the Company or any Group Company or of any persons having dealings with the Company or any Group Company, whether or not such information (if it is not in oral form) is marked confidential, and includes, without limitation: (a) existing and prospective activities of the Company or any Group Company, including timing, business plans and financial information; (b) existing and prospective terms of business, prices and pricing strategies and structures, profit margins, trading arrangements, discounts and rebates of the Company or any Group Company; (c) existing and prospective marketing information, plans, strategies, tactics and timing relating to the Company or any Group Company; (d) existing and prospective lists of suppliers and rates of charge relating to the Company or any Group Company; (e) existing and prospective financial and other products or services, including applications, designs, technical data and qualifications relating to the Company or any Group Company; (f) existing and prospective software applications relating to the Company or any Group Company; (g) information relating to existing and prospective officers, employees and consultants of the Company or any Group Company including their engagement, their contractual terms including commission and bonuses and information relating to the termination of their employment or appointment with the Company or any Group Company; (h) any disputes and litigation proposed, in progress or settled in relation to the Company or any Group Company; (i) any invention, technical data, know-how or other manufacturing information of the Group or its customers/clients; and (j) existing and prospective research and development activities. 13.2 The Executive must not make use of or divulge to any person or entity, and must use his best endeavours to prevent the unauthorised use, publication or disclosure of, any Confidential 9 + + + + + +Table of Contents + +Information which is disclosed or made available to the Executive, either directly or indirectly, during the course of, or in connection with, the Executive's employment or his holding any office within the Group from any source within the Company or any Group Company and shall be under an obligation promptly to report to the Group any such unauthorised use or disclosure which comes to his knowledge. 13.3 This clause 13 does not apply to information which: (a) is used or disclosed in the proper performance of the Executive's duties or with the prior written consent of the Company or any Group Company; (b) is ordered to be disclosed by a court of competent jurisdiction or otherwise required to be disclosed by law; (c) is already in the public domain (other than as a result of unauthorised disclosure by the Executive or any other person); or (d) is already lawfully possessed by the Executive without any obligations of confidentiality or restrictions on use. 13.4 The Executive shall not, during the Appointment or at any time thereafter, make, except for the benefit of the Company or any Group Company, any copy, record or memorandum (whether or not recorded in writing or on computer disk or tape) of any Confidential Information and any such copy, record or memorandum made by the Executive during the Appointment shall be and remain the property of the Company and accordingly shall be returned by the Executive to the Company on the Termination Date or when required to do so by the Company. 13.5 The Executive shall not other than in the ordinary course of the Appointment without the prior written consent of the Board either directly or indirectly publish any opinion, fact or material or deliver any lecture or address or participate in the making of any film, radio broadcast or television transmission or communicate with any representative of the media or any third party relating to: (a) the business or affairs of the Company or of any other Group Company or to any of its or their officers, employees, customers, clients, suppliers, distributors, agents or shareholders; or (b) the development or exploitation of any Intellectual Property Rights, including Confidential Information. 13.6 Each of the restrictions in each sub clause above will be enforceable independently of each of the others and its validity will not be affected if any of the others are invalid. If any of those restrictions are void but would be valid if some part of the restriction were deleted, the restriction in question will apply with such modification as may be necessary to make it valid. 13.7 For the avoidance of doubt, nothing in this Agreement precludes the Executive from making a protected disclosure within the meaning of Part 4A (Protected Disclosures) of the Employment Rights Act 1996. 14. INTELLECTUAL PROPERTY 14.1 For the purposes of this Agreement, the following definitions shall apply: (a) Intellectual Property Rights means: (i) copyrights, moral rights, patents, inventions, know-how, Confidential Information, database rights, brands, business names, domain names, 10 + + + + + +Table of Contents + +and rights in trademarks, service marks and designs (whether registered or unregistered); (ii) applications for registration, and the right to apply for registration, and registrations for any of the same, and any renewals, reissues, extensions, continuations or divisions thereof; (iii) rights to use such assets listed in subparagraphs (i) and (ii) under licences, consents, orders, statutes or otherwise; and (iv) all other intellectual property rights and equivalent or similar forms of protection now or hereafter existing anywhere in the world. (b) IP Materials means all documents, software, photographic or graphic works of any type, and other materials in any medium or format which are created by or on behalf of the Executive in the course of performing his obligations under this Agreement and which are protected by or relate to Intellectual Property Rights. 14.2 Any Intellectual Property Rights created by the Executive or arising in the course of his employment or his performing his obligations under this Agreement shall belong to and vest in the Company. 14.3 To the extent that ownership of Intellectual Property Rights does not vest in the Company by operation of law, the Executive hereby assigns to the Company his entire right, title and interest in all Intellectual Property Rights which arise in the course of performing his obligations under this Agreement (including all present and future copyright, and copyright revivals and extensions). This assignment shall take effect upon the creation of each of the Intellectual Property Rights but if for any reason this does not occur, he agrees that he will hold all such Intellectual Property Rights on trust for the benefit of the Company until such time as it does. 14.4 The Executive agrees to sign all documents and to do all other acts which the Company requests (at its expense) to enable the Company to enjoy the full benefit of this clause 14. This includes joining in any application, which may be made in the Company's sole name for registration of any Intellectual Property Rights (such as a patent, trademark or registered design), and assisting the Company in defending and enforcing such rights during and after the employment (at the Company's expense). 14.5 Without prejudice to the generality of clause 13 (Confidential Information), the Executive may only use the Intellectual Property Rights and IP Materials to perform his obligations under this Agreement, and shall not disclose any Intellectual Property Rights or IP Materials to any third party without the express prior written consent of the Company. 14.6 The Executive waives all moral rights in IP Materials to which he may otherwise be entitled under the law of any relevant jurisdiction and which cannot be vested or assigned pursuant to sub clause 14.2 or 14.3. To the extent that any moral rights cannot be waived under the laws of any relevant jurisdiction, the Executive agrees that he will not enforce such rights. 14.7 The Executive shall promptly transfer to the Company all IP Materials in his possession or under his control as at the Termination Date, or at any time when the Company requests. No copies or other record of any IP Materials may be retained by the Executive except with the prior written consent of the Company. 14.8 The Executive understands and accepts that the remuneration and benefits provided to him by the Company in accordance with this Agreement constitute sufficient consideration to the Executive for the performance of his obligations under this clause 14 including, for the avoidance of doubt, the waiver of or covenant not to assert any moral rights that he may have. 14.9 This clause 14, and the rights and obligations of the parties contained herein, shall survive expiry of this Agreement, or its termination, for any reason. 11 + + + + + +Table of Contents + +15. TERMINATION OF EMPLOYMENT 15.1 The Appointment may be terminated by either party giving the other at least 12 months' notice in writing. 15.2 The Company may in its sole and absolute discretion (whether or not any notice of termination has been given under sub clause 15.1) terminate this Agreement at any time and with immediate effect by giving notice in writing to the Executive that the Company is exercising its rights pursuant to this clause 15. If the Company elects to terminate the Executive's employment in this way, it will make, within 30 days, either the first instalment (of equal monthly instalments) of a, or an entire, payment in lieu of notice (Payment in Lieu) equal to the basic salary, benefit allowance and any benefits, as at the Termination Date, which the Executive would have been entitled to receive under this Agreement during the notice period referred to at sub clause 15.1 (or, if notice has already been given, during the remainder of the notice period), less all relevant deductions for income tax and National Insurance contributions. For the avoidance of doubt, the Payment in Lieu shall not include any element in relation to: (a) any bonus or discretionary payment(s) that might otherwise have been due during the period for which the Payment in Lieu is made; and (b) any payment in respect of any holiday entitlement that would have accrued during the period for which the Payment in Lieu is made. 15.3 The Company may pay any sums due under sub clause 15.2 in equal monthly instalments until the date on which the notice period referred to at sub clause 15.1 would have expired if notice had been given (the Payment Period). 15.4 The Payment in Lieu is at all times conditional on the Executive informing the Company immediately in the event that he receives, or has a right to receive, remuneration from any source in respect of his employment or the provision of his services during the Payment Period or relating to the Payment Period (remuneration shall include any salary, fee or other benefit). 15.5 If the Executive obtains alternative employment or an alternative engagement during the Payment Period any further monthly instalments of the Payment in Lieu will be reduced on a pro rata basis by any payment or remuneration in respect of such alternative employment or alternative engagement during the Payment Period or relating to the Payment Period. 15.6 The Executive shall have no right to receive a Payment in Lieu unless the Company has exercised its discretion in sub clause 15.2. 15.7 Nothing in this clause 15 shall prevent the Company from terminating the Appointment in breach of contract or of common law. 15.8 If the Executive: (a) in the reasonable opinion of the Board fails or neglects efficiently and diligently to discharge his duties, including, without limitation his duties under Chapter 2 of part 10 of the Companies Act 2006, or is guilty of any serious or repeated material breach of his obligations under this Agreement and, if that material breach is remediable, fails to remedy the breach within a period of 21 days after being notified in writing to do so; (b) is guilty of any fraud, dishonesty, serious misconduct or any other conduct which, in the reasonable opinion of the Board, brings or is likely to bring the Executive or the Company or 12 + + + + + +Table of Contents + +any Group Company into disrepute or affects or is likely to affect prejudicially the interests of the Company or the Group; (c) is convicted of an arrestable offence (other than a road traffic offence for which a non-custodial penalty is imposed); (d) is guilty of any material breach or material non-observance of any code of conduct, requirement, rule or regulation referred to in sub clause 3.2; (e) becomes bankrupt or makes any arrangement or composition with his creditors; (f) is prohibited from being a director by law; (g) resigns as a director without the Company's prior consent; (h) has become physically or mentally incapable of acting as a director and may remain so for more than six months, according to a written opinion issued in relation to the Executive to the Company from a registered medical practitioner who is treating the Executive; or (i) is not or ceases to be eligible to work in the UK, + +the Company may by written notice to the Executive terminate this Agreement with immediate effect. 15.9 The Company's rights under clause 15.8 are without prejudice to any other rights that it might have at common law to terminate the Appointment or to accept any breach of this Agreement by the Executive as having brought the agreement to an end. Any delay by the Company in exercising its rights shall not constitute a waiver thereof. 15.10 On the Termination Date or, at the request of the Board on either party giving notice to terminate this Agreement, the Executive will immediately: (a) deliver to the Company all other property in his possession, custody or under his control belonging to any Group Company including (but not limited to) computers and any other electronic devices, business cards, credit and charge cards, security passes, original and copy documents or other media on which information is held in his possession relating to the business or affairs of any Group Company; and (b) to the extent possible, irretrievably delete (without keeping any copies in any format) any information relating to the business or affairs of the Company or any Group Company or any of its or their business contacts from any computer or communications systems, including any website or email account, owned or used by the Executive outside the Company's premises and notify the Company of any passwords the Executive used in relation to its computer system. 15.11 If the Executive's rights or benefits under any share option or share incentive scheme in which the Executive may participate (as set out at the date hereof in Schedule 2) are affected by the termination of the Employment, his rights will be determined solely in accordance with the rules of the relevant scheme and the Executive shall not be entitled to any compensation for the loss of any rights or benefits under such scheme. 15.12 If the Appointment is terminated for the purpose of the reconstruction or amalgamation of the Company or by reason of the Company transferring all or a substantial part of its business to another company and the Executive is offered employment by the reconstructed or amalgamated or transferee company on similar terms to the terms of this Agreement, the Executive will have no claim 13 + + + + + +Table of Contents + +against the Company or such reconstructed or amalgamated or transferee company in respect of the termination of the Appointment. 16. GARDEN LEAVE 16.1 Following service of notice to terminate the Appointment by either party or if the Executive purports to terminate the Appointment in breach, the Board may suspend all or any of the Executive's duties and powers for such periods and on such terms as he considers expedient and this may include a term that: (a) the Executive must stay away from all or any of the Company's premises, and/or (b) will not be provided with any work, and/or (c) will have no business contact with all or any of the Group's agents, employees, customers, clients, distributors and suppliers, and/or (d) will have no access to the Company's communications systems. + +(referred to as Garden Leave). 16.2 During any period of Garden Leave the Company will continue to pay the Executive's salary, benefits allowance and maintain the benefits to which he is contractually entitled prior to the commencement of his Garden Leave (for the avoidance of doubt the Executive shall not be entitled to any bonus or discretionary payment(s) during any period of Garden Leave). 16.3 During any period of Garden Leave may appoint a replacement to exercise any of the Executive's duties and responsibilities and may require the Executive to take such actions as he reasonably requires to effect a proper handover of any of his duties and responsibilities. Alternatively, the Company may require the Executive to carry out exceptional duties or special projects outside the normal scope of his duties and responsibilities (provided such projects are broadly commensurate with his status). 16.4 During any period of Garden Leave the Executive's employment will continue and the Executive will continue to be bound by his obligations under this Agreement and by his general duties of fidelity and good faith (and, where applicable, as a fiduciary). The Executive agrees that the Company may, if it so chooses, announce to third parties that the Executive has resigned or been given notice (as the case may be) but the Executive will not make any comment on his status or change of duties, except to confirm he is on garden leave. 17. OFFICE AS A DIRECTOR 17.1 Any office or directorship which the Executive holds in any Group Company is subject to the articles of association of the relevant company from time to time. 17.2 The Executive is required to familiarise himself with all his responsibilities as a director, legal and/or otherwise. 17.3 Upon termination of this Agreement, or on the Board's request, the Executive will resign from any office held by him in any Group Company without any claim for compensation. 17.4 The Executive shall, at the time of signing this Agreement, appoint the Company as his attorney by executing a Power of Attorney in the form set out in Schedule 1 so that the Company can give effect to the provisions of sub clause 17.3 above and clause 14 above as required. 14 + + + + + +Table of Contents + +17.5 In the event that the Executive fails to be re-elected as a director of any Group Company, or if the Executive resigns as a director of any Group Company at the Company's request, this Agreement shall not automatically terminate and the Executive will continue as an employee of the Company unless and until either party elect to terminate the employment (either in accordance with clause 15.1, or where the Company may have a right to terminate his employment summarily under clause 15 or at common law). 17.6 The Executive must not resign from any directorship or office of any Group Company, except on termination of this Agreement (by either party), on the Board's request or as provided in the articles of association of the Company, and he must not do anything that would cause him to be disqualified from continuing to act as a director. 18. PROTECTIVE COVENANTS 18.1 The Executive acknowledges that his senior position with the Company and any Group Company gives him access to and the benefit of confidential information vital to the continuing business of the Company and any Group Company and influence over and connection with the Company's customers, clients, suppliers, distributors, agents, employees, workers, consultants and directors and those of any Group Company in or with which the Executive is engaged or in contact and acknowledges and agrees that the provisions in Schedule 3 are reasonable in their application to him and necessary but no more than sufficient to protect the interests of the Company and any Group Company. 18.2 If any person offers to the Executive any arrangement, contractual or otherwise, and whether paid or unpaid, which might or would cause the Executive to breach any of the covenants in Schedule 3, he will notify that person of the terms of that Schedule 3 and provide that person with a complete copy of it. 19. DATA PROTECTION 19.1 The Company takes its data protection obligations very seriously and complies with its legal obligations under the General Data Protection Regulation and the Data Protection Act 2018 to protect the privacy and security of the Executive's personal information. As a data controller the Company is required to inform the Executive how we hold and use his information. 20. GRIEVANCE AND DISCIPLINARY PROCEDURE 20.1 If the Executive is dissatisfied with any disciplinary decision relating to him, including any decision to dismiss him, he will have the right to appeal to the Chairman of WPP plc, whose decision will be final. 20.2 If the Executive seeks to redress any grievance relating to his employment, the Executive should raise this in the first instance with the Chairman. If the matter is not satisfactorily resolved, the Executive should then apply in writing to the Board and the Board's decision will be final. 20.3 The Company may suspend the Executive from any or all of his duties for as long as is reasonably necessary to investigate any matter in which the Executive is implicated or involved, whether directly or indirectly, or in the event that the Company believes that the Executive's presence in the office would be detrimental to any investigation or to other employees or to the Executive. The provisions of clause 16.1 (a) to (d) and 16.2 will apply during any such period of suspension, with any additional terms depending on the circumstances that may be notified to the Executive in writing at that time. 15 + + + + + +Table of Contents + +21. COLLECTIVE AGREEMENTS + +The Company is not a party to any collective agreement which affects the Executive's employment. 22. GENERAL 22.1 This Agreement is governed by and construed in accordance with English law, save where provided otherwise herein. 22.2 The parties irrevocably agree that the courts of England and Wales shall have exclusive jurisdiction to settle any dispute or claim that arises out of or in connection with this Agreement or its subject matter or formation (including non-contractual disputes or claims). 22.3 This Agreement contains all the information which is required to be provided to the Executive under section 1 of the Employment Rights Act 1996. 22.4 As from the effective date of this Agreement, all other agreements or arrangements between the Company or any Group Company relating to the employment of the Executive cease to have effect. This Agreement (and the documents referred to within it, including but not limited to the share plans that the Executive participates in from time to time) comprises the whole agreement between the Executive and the Company relating to the Executive's employment by the Company. 22.5 Each Group Company shall have the right under the Contracts (Rights of Third Parties) Act 1999 to enforce the rights bestowed on it by this Agreement. The consent of a Group Company is not required to amend any terms of this Agreement. Except as set out in this clause 22, a person who is not a party to this Agreement may not enforce any of its provisions under the Contracts (Rights of Third Parties) Act 1999. 22.6 This Agreement may be executed in any number of counterparts, each of which, when executed, shall constitute a duplicate original, but all the counterparts shall together constitute the one agreement. + +AS WITNESS the hands of the Executive and of the duly authorised representatives of the Company on the date which appears first on page 1. + +SIGNATORIES SIGNED by WPP 2005 LIMITED acting by MARK READ ) /s/ Mark Read + +SIGNED by JOHN ROGERS ) /s/ John Rogers 16 + + + + + +Table of Contents + +SCHEDULE 1 POWER OF ATTORNEY + +By this Power of Attorney made on 1 October 2019, I JOHN ROGERS in accordance with the terms of my service agreement (the Service Agreement) with WPP 2005 Limited (the Company) dated today HEREBY APPOINT the Company to act as my attorney with authority in my name and on my behalf (so that words and expressions defined in the Service Agreement shall have the same meaning herein): (a) during my employment or after it has terminated, to do anything and sign or execute any document and generally to use my name for the purpose of giving to the Company or to any Group Company or its or their nominee(s) the full benefit of clause 14 (Intellectual Property); (b) during my employment or after it has terminated, to do anything and sign or execute any document as may be required under the constitution of the Company and each Group Company to make my resignation as a director from those companies effective; and (c) to appoint any substitute and to delegate to that substitute all or any powers conferred by this Power of Attorney. + +I declare that this Power of Attorney, having been given by me to secure my obligations under clause 14 (Intellectual Property) and clause 15 (Termination of Employment) of the Service Agreement, shall be irrevocable in accordance with section 4 of the Powers of Attorney Act 1971. + +This Power of Attorney is governed by and construed in accordance with English law, save where provided otherwise herein. + +The parties irrevocably agree that the courts of England and Wales shall have exclusive jurisdiction to settle any dispute or claim that arises out of or in connection with this Power of Attorney or its subject matter or formation (including non-contractual disputes or claims). + +IN WITNESS whereof this Power of Attorney has been duly executed. EXECUTED as a deed by JOHN ROGERS ) ) /s/ John Rogers in the presence of: ) + +Witness: Signature: /s/ Rachel Blackman - Rogers + +Name: Rachel Blackman - Rogers + +Address: + +17 + + + + + +Table of Contents + +SCHEDULE 2 INCENTIVE PLANS + +The Executive will be eligible to participate in each of the Incentive plans referred to below in accordance with the rules of the relevant plans from time to time. + +The receipt of any bonus, award, stock or payment under any or all of these plans in one year shall not create any right or expectation to any bonus or payment in any subsequent year. 1 SHORT TERM INCENTIVE PLAN (STIP) 1.1 The Executive's STIP target award will be up to 112% of base salary with a potential award of up to a maximum of 225% of basic salary depending how far the target may be exceeded. 1.2 All payments under the STIP are discretionary and subject to the approval of the Compensation Committee. 1.3 STIP awards are paid out partly in cash and partly in the form of a deferred stock award under the ESA, the exact split from time to time being a matter of Compensation Committee discretion. The cash element under the STIP is payable in the year following the year for which the bonus is payable. The deferred stock element will be governed by the rules of the relevant stock plan. 1.4 In the event the Executive's employment is terminated or he is under notice of termination, whether such notice is given or received by the Company, prior to the date on which the bonus is paid (in respect of the cash element) or prior to the vesting date of the deferred stock award (in respect of the deferred stock element) the Executive will forfeit all and any rights or entitlements under the STIP and will not have any rights against the Company and/or WPP plc in respect of the loss of such entitlement. 2 EXECUTIVE SHARE AWARD (ESA) 2.1 The Executive will be eligible to receive Executive Share Awards (ESA) further to his STIP awards. 2.2 Annual targets based on the financial results of the Company will be determined by WPP plc. ESAs are granted in form of awards (if any) made after the end of the relevant calendar year, under the relevant stock plan and are subject to such conditions as the Compensation Committee may determine from time to time. All ESAs are subject to the overriding discretion of the Compensation Committee up to the point at which the award under the relevant stock plan is granted. Currently the ESA share vesting period is three years from the start of the Financial Year to which the relevant ESA award relates. 2.3 The granting and vesting of stock awards will be subject to such conditions as the Compensation Committee may determine from time to time and subject always to the provisions of the relevant stock plan. 3 EXECUTIVE PERFORMANCE SHARE PLAN (EPSP) 3.1 At the discretion of the Compensation Committee, the Executive will be eligible to participate in the Executive Performance Share Plan. 3.2 The Company currently expects that the Executive will be granted a target award under the EPSP of WPP plc stock of 300% of his base salary (but this is subject always to the discretion of the 18 + + + + + +Table of Contents + +Compensation Committee and may be adjusted downwards prior to the grant being made) which will vest subject to performance (as deemed by the Compensation Committee in its discretion) at the end of the performance period. 3.3 The granting and vesting of awards under the EPSP will be subject to such conditions as the Compensation Committee may determine from time to time and subject always to the provisions of the EPSP 4 PERFORMANCE ADJUSTMENTS 4.1 If the Executive: (a) commits an act of fraud, dishonesty, deceit, breach of fiduciary duty or other gross misconduct; (b) does or omits to do something that results in a set of audited accounts of a Group Company being materially wrong or misleading; and either (i) those accounts have to be materially corrected; or (ii) a subsequent set of accounts or data have to be adjusted or include a provision or write down as a result of that act or omission; or (iii) a liquidation event occurs in relation to that Group Company; or (c) knew or should have known that any information used to calculate any STIP awarded to him was incorrect; or (d) prior to the award or payment of any STIP award, committed any material wrongdoing that had the Company known of it would have entitled the Company to terminate the Executive's employment in accordance with clause 15 of the Agreement, + +then the Compensation Committee can decide that: (i) any STIP award or part of a STIP award awarded to him pursuant to this Agreement will be cancelled; and/or (ii) any STIP award or part of a STIP award paid to him in satisfaction of any STIP award under this Agreement must be repaid by the Executive. 4.2 This sub-clause 4.2 applies if, at any time prior to the third anniversary of the payment of any STIP awarded pursuant to this Agreement, the Compensation Committee determines that any of the circumstances described in sub-clauses 4.1(a) to 4.1(d) has arisen. 4.3 If sub-clause 4.2 applies, the Compensation Committee can decide that the relevant STIP award or part of the STIP award will be cancelled or should not have been paid and must be repaid by the Executive to compensate the Company for any overpayment. 4.4 Subject to sub-clause 4.5 the Executive will, if required to do so by the Compensation Committee, repay to the Company or to another Group Company as notified by the Company the amount of cash that the Compensation Committee determines is required to compensate the Company for any overpayment. 19 + + + + + +Table of Contents + +4.5 If the Executive was subject to tax, social security contributions or other levies (Taxes) on payment of the STIP award, and in the Compensation Committee's reasonable opinion he will not get a credit or repayment of some or all of the Taxes, the Compensation Committee will reduce the amount of cash that the Executive can be required to transfer under sub-clause 4.4 by the amount that reflects the Taxes in respect of which credit or repayment is unavailable. 4.6 The Compensation Committee will act reasonably in using its authority under sub-clauses 4.1to 4.5of this Schedule 2 5 ONE-TIME AWARDS + +5.1 The Executive will, subject to the terms of this Schedule 2, be eligible to receive the following one-time awards in compensation for the short term and long-term incentive awards he will cease to be entitled to on cessation of his previous directorship of and employment with J Sainsbury plc or one of its subsidiaries ("JS"): + +(a) a cash award equivalent to the cash bonus he would have received from JS in respect of the 2019 financial year and payable in 2020 determined on the same basis as the compensation committee of JS awards a cash bonus to the CEO and Executive management team of JS; and + +(b) £361,252 payable in cash in respect of the JS 2018 Deferred Share Award; and + +(c) £368,455 payable in cash in respect of the JS 2016 LTIP Award; and + +(d) an award equivalent to the value of the deferred share award he would have received from JS in respect of the 2019 financial year and awarded in 2020 determined on the same basis as the compensation committee of JS awards a cash bonus to the CEO and Executive management team of JS, to be granted over restricted ordinary WPP shares with a vesting date in May 2022; + +(e) an award to the value of £364,102 to be granted over restricted ordinary WPP shares with a vesting date in May 2021 in respect of the JS 2019 Deferred Share Award; and + +(f) a cash award in respect of the JS 2017 LTIP award currently estimated to be valued at £644,160 but to be determined based on the actual performance disclosed in the JS 2020 annual report and accounts and to include JS dividend equivalents. The Executive commits to utilise the net amount after tax and deductions to acquire WPP ordinary shares that he will hold beneficially for a minimum of two years; and + +(g) an award to the value of £1,069,788 to be granted over ordinary shares under the terms of the WPP EPSP 2019 award with a vesting date of March 2021 in respect of the JS 2018 LTIP. The Executive commits to utilise the net amount after tax and deductions to acquire WPP ordinary shares that he will hold beneficially for a minimum of two years; and + +(h) an award to the value of £1,427,991 to be granted over ordinary shares under the terms of the WPP EPSP 2019 award with a vesting date of March 2022 in respect of the JS 2019 LTIP. The Executive commits to utilise the net amount after tax and deductions to acquire WPP ordinary shares that he will hold beneficially for a minimum of two years. + +5.2 In relation to the one-time awards in clause 5.1 payable in cash, the payment will be made in the second month following the Executive's commencement of employment with the Company or such later date when the outcomes of the JS incentive plans are available. The one-time share award in clause 5.1 will be made in the first open period of WPP plc following the Executive's commencement of employment with the Company. 20 + + + + + +Table of Contents + +SCHEDULE 3 PROTECTIVE COVENANTS 1 The Executive agrees and undertakes with the Company acting on behalf of itself and as agent for each Group Company that he will not in any Relevant Capacity at any time during the Restricted Period: (a) within or in relation to the Restricted Territory take any steps preparatory to or be directly or indirectly engaged, employed, interested or concerned in: (i) any Competing Business; and/or (ii) any Target Business Entity, (b) within or in relation to the Restricted Territory acquire a substantial or controlling interest directly or by or through any nominee or nominees in any Competing Business, Target Business Entity or in any Person owning or controlling a Competing Business or Target Business Entity; or (c) solicit or attempt to solicit, canvass, interfere with or entice away from the Company or any Relevant Group Company the custom or any prospective custom of any Client or any Prospect with a view to providing to that Client or Prospect any products or services which are the same as or materially similar to any Restricted Business in competition with the Company or any Relevant Group Company; or (d) provide or agree to provide any products or services which are the same as or materially similar to any Restricted Business to any Client or any Prospect in competition with the Company or any Relevant Group Company; or (e) solicit, entice or encourage or attempt to solicit, entice or encourage any Key Individual to leave the employment of the Company or any Relevant Group Company (whether or not such person would commit any breach of his contract of employment by doing so); or (f) employ, engage, appoint, enter into partnership or association with or in any way cause to be employed, engaged or appointed any Key Individual in relation to any Person which is or is proposing to be a Competing Business or is or is proposed to be directly or indirectly owned by or controlling any Competing Business; or (g) provide or agree to provide any products or services which are the same as or materially similar to any Restricted Business in respect of any Competitor Account; or (h) be employed or engaged by any Client or Prospect if as a result the Client or Prospect will cease to use or materially reduce its usage of the products or services of the Company or any Relevant Group Company or, in the case of a Prospect, will not use the products or services of the Company or any Relevant Group Company or use them to a materially lesser extent; or (i) solicit or try to solicit or place orders for the supply of products or services from any Supplier if as a result the Supplier will cease supplying, materially reduce its supply or vary detrimentally the terms on which it supplies products or services to the Company or any Relevant Group Company; or 21 + + + + + +Table of Contents + +(j) encourage, assist or procure any Person to do anything which if done by the Executive would be a breach of sub clauses 1 (a) to (i). 2 The Executive agrees that updating his profile and/or connecting or reconnecting to Clients, Suppliers or Prospects using Social Media during the Restricted Period may amount to a breach of sub clauses 1 (a) to (j) above. 3 The parties agree that the restrictions (whether taken individually or as a whole) in sub clauses 1 (a) to (j) above are reasonable having regard to the legitimate protectable interests of the Company and the Group and that each such restriction is intended to be separate and severable and the validity of each is not affect if any of the others are involved. In the event that any of the restrictions is held to be void but would be valid if part of its wording was deleted, that restriction shall apply with whatever deletion is necessary to make it valid and effective. 4 It is understood and agreed by the parties that damages shall be an inadequate remedy in the event of a breach by the Executive of any of the restrictions contained in sub clauses 1 (a) to (i) above and that any such breach by him or on his behalf will cause the Company and any Relevant Group Company great and irreparable injury and damage. Accordingly, he agrees that the Company and/or any Relevant Group Company shall be entitled, without waiving any additional rights or remedies otherwise available to it at law or in equity or by statute, to injunctive and other equitable relief in the event of a breach or intended or threatened breach by the Executive of any of those restrictions. 5 If the Company exercises its right to suspend the Executive's duties and powers under clause 16, the period of the suspension will reduce the Restricted Period. 6 For the purposes of this Schedule 3 the following additional definitions shall apply: + +Client means any Person with whom or which the Company or any Relevant Group Company has arrangements in place for the provision of any Restricted Business and with whom or which the Executive had material involvement or for whose business he was responsible or about which he acquired material Confidential Information, in the course of his employment at any time during the Relevant Period. + +Competing Business means any Person providing or proposing to provide any products or services which are the same as or materially similar to and competitive with any Restricted Business. + +Competitor Account means any account, product or brand which competes with any Client's account, product or brand in respect of which the Executive had material dealings or responsibility on behalf of the Company or any Relevant Group Company or about which he acquired Confidential Information, during the course of his employment at any time during the Relevant Period. + +Key Individual means any individual who was employed by the Company or any Relevant Group Company to provide services personally at the date on which the Appointment terminates (or but for the breach by the Executive of his obligations under this Agreement and/or implied by law would have been so employed at the date on which the Appointment terminates) and who in the course of his duties during the Relevant Period had material dealings with the Executive and: (a) either: (i) reported directly to him; and 22 + + + + + +Table of Contents + +(ii) had material contact with clients or suppliers of the Company or any other Relevant Group Company in the course of his employment; + +or (b) was a member of the board of directors or the senior management team of the Company or any Relevant Group Company or reported to any such board of directors or senior management team. + +Prospect means any Person who was at any time during the Relevant Period negotiating or discussing (which shall include for these purposes a pitch or presentation) with the Company or any Relevant Group Company the provision of any Restricted Business and in respect of which such negotiations or discussions the Executive was materially involved or had responsibility for or about which he acquired material Confidential Information, in the course of his employment at any time during the Relevant Period. + +Relevant Capacity means either alone or jointly with another or others, whether as principal, agent, consultant, director, partner, shareholder, independent contractor, employee or in any other capacity, whether directly or indirectly, through any Person and whether for the Executive's own benefit or that of others (other than as a shareholder holding directly or indirectly by way of bona fide investment only and subject to prior disclosure to the Company up to 1% in nominal value of the issued share capital or other securities of any class of any company listed or dealt in on any Recognised Investment Exchange). + +Relevant Group Company means any Group Company to which the Executive rendered services or for which he had management or operational responsibility during the course of his employment at any time during the Relevant Period. + +Relevant Period means the twelve-month period ending with the Termination Date. + +Restricted Business means and includes any of the products or services provided by the Company or any Relevant Group Company at any time during the Relevant Period with which the Executive had a material involvement or about which he acquired Confidential Information at any time during the Relevant Period. + +Restricted Period means the 12-month period commencing on the Termination Date in relation to sub-clause 1(a) and the 18- month period commencing on the Termination Date in relation to all remaining sub-clauses in clause 1 above. + +Restricted Territory means England and such other countries in which the Company or any Relevant Group Company carried on any Restricted Business at the Termination Date. + +Supplier means any Person who at any time during the Relevant Period provided products or services to the Company or any Relevant Group Company being a Person with whom the Executive had material dealings or for whom he had responsibility or about whom he acquired material Confidential Information, in the course of his employment at any time during the Relevant Period. + +Target Business Entity means any business howsoever constituted (whether or not conducting a Restricted Business) which was at the Effective Date or at any time during the Relevant Period a business which the Company or any Relevant Group Company had entered into negotiations with or had approached or had identified as: 23 + + + + + +Table of Contents + +(a) a potential target with a view to its acquisition by the Company or any Relevant Group Company; and/or (b) a potential party to any joint venture with the Company or any Relevant Group Company, + +in either case where such approach or negotiations or identity were known to a material degree by the Executive or about which he acquired material Confidential Information, in the course of his employment during the Relevant Period. 24 \ No newline at end of file diff --git a/full_contract_txt/WatchitMediaInc_20061201_8-K_EX-10.1_4148672_EX-10.1_Content License Agreement.txt b/full_contract_txt/WatchitMediaInc_20061201_8-K_EX-10.1_4148672_EX-10.1_Content License Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..5b48fcace928a910379e688165430ba321b8b8e6 --- /dev/null +++ b/full_contract_txt/WatchitMediaInc_20061201_8-K_EX-10.1_4148672_EX-10.1_Content License Agreement.txt @@ -0,0 +1,39 @@ +Exhibit 10.1 + + + +Oceanic Time Warner Cable and Watchit Media Content and License Agreement + +Effective Dates: September 1, 2006, August 31, 2007 + +Watchit agrees to provide Oceanic Time Warner Cable the following content: + +- Watchit Gaming Guides - Lunchtime with Ira segments every week + +Watchit will provide the content on BetaSp format and reserves the right to modify the content to reflect sponsorship by an advertiser and advertisers. + +Oceanic Time Warner Cable agrees to not edit or modify the above content. + +Oceanic Time Warner Cable will use the content solely on channel 777, the Las Vegas channel. + +In the event that Oceanic Time Warner Cable removes the above content and or terminates this agreement prior to December 31, 2006, Oceanic Time Warner Cable agrees to pay a cancellation fee of Five Thousand Dollars ($5,000) per month multiplied by the number of months remain on the agreement. + +Watchit shall have the exclusive right to sell third party advertising as sponsors of their content and will have the right to brand the content under the Watchit brand and place a "bug" on the screen identifying the content with a Watchit trademark. + +Oceanic Time Warner Cable will include the following disclaimer on the Watchit Content: "The materials shown are for entertainment purposes only and does not provide any guarantees of winning or improving your odds of winning on this program. The rules of the games as shown may not apply to all properties and may change from time to time." + +Ocean Time Warner Cable will provide Watchit with data on viewership to both Channel 777 and specifically to the content provided by Watchit. + +Ocean Time Warner Cable will be able to not include any content that it deems inappropriate or distasteful. + +This agreement will be in effect until the end of 2006 and will be evaluated at that time. + +Both parties agree to discuss use of information gathered form this arrangement before using it in any kind of promotional or public message. + +Accepted by: + + Oceanic Time Warner Cable/Date + +Watchit Media/Date + +Source: WATCHIT MEDIA, INC., 8-K, 12/1/2006 \ No newline at end of file diff --git a/full_contract_txt/WaterNowInc_20191120_10-Q_EX-10.12_11900227_EX-10.12_Distributor Agreement.txt b/full_contract_txt/WaterNowInc_20191120_10-Q_EX-10.12_11900227_EX-10.12_Distributor Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..5d5977e7c283e63fb65311795fe5fa3576305f56 --- /dev/null +++ b/full_contract_txt/WaterNowInc_20191120_10-Q_EX-10.12_11900227_EX-10.12_Distributor Agreement.txt @@ -0,0 +1,173 @@ +Exhibit 10.12 EXCLUSIVE DISTRIBUTOR AGREEMENT THIS EXCLUSIVE DISTRIBUTOR AGREEMENT (this "Agreement") is made and entered into as of the 12th day of November, 2019 (the "Effective Date"), by and among WATER NOW, INC., a Texas corporation ("Water Now"), Hydraspin USA, Inc., a Texas corporation and a subsidiary of Water Now (the "Subsidiary," and collectively with Water Now, "Hydraspin") and BESTEV MANAGEMENT, LLC, a Texas limited liability company ("Distributor"). Hydraspin and Distributor are sometimes hereinafter referred to individually as a "Party" and collectively as the "Parties." RECITALS: A. Hydraspin holds the exclusive distribution rights in the United States of America for certain commercial oil and gas products,and the associated technology, used to separate and remove Hydrocarbons from natural and injected water involved in the extraction process. B. Hydraspin desires to appoint Distributor, and Distributor desires to be appointed, as the exclusive distributor of products of Hydraspin in the Territory (as defined below), pursuant to the terms and conditions of this Agreement. NOW, THEREFORE, in consideration of the premises and the mutual promises and covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows: ARTICLE I. DEFINITIONS 1.1 For purposes of this Agreement, the following terms, where written with an initial capital letter, shall have the meanings assigned to them in this Article I unless the context otherwise requires: "Affiliate" means an individual or legal entity that directly or indirectly, through one or more intermediaries, controls or is controlled by, or is under common control with, another Person. The term "Control" as utilized herein means the possession, directly or indirectly, of the power to direct or cause direction of the management and policies of a Person, whether through management, ownership, by contract, or otherwise; provided, however, in no event shall Hydraspin be deemed an Affiliate of the Distributor. "Change of Control" means the sale, conveyance or disposition of all or substantially all of the assets of Hydraspin, the effectuation by Hydraspin of a transaction or series of transactions in which more than 50% of the voting power of Hydraspin is disposed of, or any consolidation, merger or other business combination of Hydraspin with or into any other Person or Persons where Hydraspin is not the survivor. "Customer" means any Person that is a customer of the Distributor and any Affiliate of Distributor that has an interest in or ultimately utilizes the Product (as defined below). "Distributor Share" means, with respect to Net Revenue, the percentage of Net Revenue that the Distributor is entitled to receive, as follows: (i) for the first ten (10) Products installed, 7.5% of Net Revenue, and (ii) for the eleventh (11th) Product installed and all Products installed thereafter, 15% of Net Revenue. Notwithstanding anything to the contrary contained herein, the 1 + +Source: WATER NOW, INC., 10-Q, 11/20/2019 + + + + + +Distributor Share with respect to the split of Net Revenue between Hydraspin and the Distributor with respect to any particular Production installation or group Product installation may be negotiated by Hydraspin and the Distributor and set forth in a separate written agreement between the Parties, and in such case, the Distributor Share set forth in the separate written agreement shall supersede and control over the Distributor Share set forth above. "Governmental Entity" means any and all federal, state or local governments, governmental institutions, public authorities and any other governmental entities of any nature whatsoever, and any subdivisions or instrumentalities thereof, including, but not limited to, departments, boards, bureaus and panels, and any divisions or instrumentalities thereof, whether permanent or ad hoc and whether now or hereafter constituted or existing. "Hydraspin Share" means, with respect to Net Revenue, the percentage of Net Revenue that Hydraspin is entitled to receive, as follows: (i) for the first ten (10) Products installed, 92.5% of Net Revenue, and (ii) for the eleventh (11th) Product installed and all Products installed thereafter, 85% of Net Revenue. Notwithstanding anything to the contrary contained herein, the Hydraspin Share with respect to the split of Net Revenue between Hydraspin and the Distributor with respect to any particular Production installation or group Product installation may be negotiated by Hydraspin and the Distributor and set forth in a separate written agreement between the Parties, and in such case, the Hydraspin Share set forth in the separate written agreement shall supersede and control over the Hydraspin Share set forth above. "Hydrocarbons" means and includes oil, gas, casinghead gas, condensate, natural gas liquids, and all components of the foregoing. "Law" means any constitution, law, ordinance, principle of common law, regulation, order, statute or treaty of or issued by any Governmental Entity. "Loss" means any damage, deficiency, penalty, fine, cost, amount paid in settlement, liability, obligation, tax, loss, expense or fee, including court costs and reasonable attorneys' fees and expenses. "Marks" means mean the trademark(s), service mark(s) and/or logo(s) applicable to each Product and owned by either Hydraspin or African Horizon Technologies (PTY) Ltd ("AHT"). "Net Revenue" means the gross revenue derived from the sale of the Hydrocarbons resulting from the Products, less (i) the share of gross revenue due to the Customers under the agreements between the Customers and the Distributor or any Affiliate of the Distributor, which is generally 50%, but may be greater or less than 50%, and (ii) ordinary and customary costs, expenses and fees that are deducted from the gross revenue. "Person" means natural persons, corporations, ventures, limited liability companies, partnerships, trusts and all other entities and organizations. "Performance Benchmarks" shall mean the following requirements necessary for Distributor to maintain the exclusivity granted in Section 2.1 hereof: (a) the execution of contracts to deploy Products in 25 new locations approved in advance by Hydraspin ("Customer Locations") during each 12 month period following the Effective Date and (b) all Customer Locations in the aggregate shall generate an average of 7,500 barrels of fluid per day on a trailing 12 month basis. Customer Locations must be available for installation within 90 days of approval by Hydraspin to be applied toward the satisfaction of the Performance Benchmark. All Customer Locations in excess of 2 + +Source: WATER NOW, INC., 10-Q, 11/20/2019 + + + + + +25 secured during an applicable 12 month period shall be credited toward the satisfaction of the Performance Benchmark for the subsequent 12 month period. If this Agreement is extended beyond the Initial Term, as hereinafter defined, the number of Customer Locations to be secured to maintain exclusivity during the pendency of the Agreement shall be increased to 50 from 25. "Products" shall mean, collectively, (i) the products listed on Exhibit A attached hereto, as such Exhibit may be amended from time to time by the Parties, (ii) all modifications, alterations, improvements, upgrades, and replacements to the products listed on Exhibit "A", now existing and existing in the future, and (iii) all other products, now existing and existing in the future, distributed by Hydraspin or any Affiliate thereof that perform substantially the same functions as the products listed on Exhibit "A", now existing and existing in the future. "Revenue Event" means any payment in cash, or by check or wire transfer resulting from the sale of Hydrocarbons to oil and gas companies or other third parties, due to the use of one or more Products to separate such Hydrocarbons from water during the extraction of such Hydrocarbons from the earth. "Support Services" shall mean (a) promptly responding to all inquiries from Customers, (b) servicing the Products, (c) educating Customers how to properly use and maintain the Products, (d) liaising between Customers, Distributor and Hydraspin, (d) distributing instructions for use, and any updates thereto, of each Product, and (e) any other related services performed for or on behalf of Customers. "Territory" shall mean the geographic territories described on Exhibit B attached hereto, as such Exhibit may be amended from time to time by the Parties. 1.2 Other Definitions. In addition to the terms defined in Section 1.1 hereof, certain other terms are defined elsewhere in this Agreement, and whenever such terms are used in this Agreement, they shall have their respective defined meanings, unless the context expressly or by necessary implication otherwise requires. ARTICLE II. APPOINTMENT 2.1 Exclusivity and Territory. Hydraspin hereby appoints Distributor, and Distributor hereby accepts appointment, as Hydraspin's exclusive distributor of the Products in the Territory during the term of this Agreement, subject to the terms and conditions of this Agreement, including, but not limited to, the satisfaction of the Performance Benchmarks. The Territory may be amended with the mutual agreement of both Parties from time to time to add or delete geographic territories by amending Exhibit B attached hereto. If Hydraspin desires to enter a new territory in the United States, Hydraspin will offer Distributor the first opportunity to become the exclusive distributor for the new territory. If the Parties are unable to reach an agreement on the terms of exclusivity within ten (10) business days of the date the opportunity is presented to Distributor, Hydraspin shall have no obligation to enter into a contract with Distributor regarding the new territory. In the event the Distributor loses exclusivity on a territory due to not meeting Performance Benchmarks, the Distributor shall maintain exclusivity on any and all existing Products that are in the field and operating at them time exclusivity if forfeited. 2.2 Sales Outside the Territory. Distributor shall be entitled to advertise, promote, market or 3 + +Source: WATER NOW, INC., 10-Q, 11/20/2019 + + + + + +solicit any Customers that have a business presence outside the Territory, except that Distributor shall not conduct solicitation activities in any outside territory where Hydraspin is bound to an exclusive distributor agreement with a third party, provided that Hydraspin has notified Distributor in writing of its arrangements with the other distributor and of the territory which is subject to exclusivity in favor of the other distributor. 2.3 Noncircumvention. Hydraspin certifies, stipulates, and agrees that the Hydraspin will deal exclusively with and through the Distributor in relation to the distribution of the Products in the Territory. Hydraspin will not in any way or in any capacity, either directly or indirectly (including without limitation acting by, with or through one or more Persons in which the Hydraspin has an interest and/or with whom Hydraspin has a relationship): except pursuant to an agreement with the Distributor, (a) contact, approach or negotiate with any Customer outside of the Distributor, or (b) contact, approach or negotiate with any Person other than the Distributor and its representatives on any matter with respect to the Products, without the prior written consent of the Distributor. Hydraspin agrees that the Hydraspin will not, in any manner, directly or indirectly, circumvent or attempt to circumvent this Agreement, including, without limitation, forming, joining, or in any way participating in any Person or otherwise act in concert with any Person, for the purpose of taking any actions in circumvention of this Agreement or which are restricted or prohibited under this Agreement. ARTICLE III. GENERAL OBLIGATIONS 3.1 Marketing. Distributor shall use its commercially reasonable efforts to further the advertising, promotion, marketing, distribution and sale of the Products throughout the Territory. 3.2 Support Services. Hydraspin shall install all Products and train Distributor to provide necessary maintenance of the Products. Following installation and necessary training, Distributor shall provide any and all necessary and appropriate Support Services to Customers in the Territory. Hydraspin, if requested and the nature of the request is reasonable, shall assist Distributor in providing Support Services to the Customers in the Territory. 3.3 Licenses. Hydraspin shall obtain such authorizations, licenses, permits, and other governmental or regulatory agency approvals, if any, as are required for the distribution and sale of the Products in the Territory. Distributor will incur no liability arising from Hydraspin's possession, or lack of possession, of such requisite governmental authorizations and approvals. 3.4 Proprietary Right. Distributor will not modify or remove any trademark, copyright and other notices of proprietary rights included by AHT or Hydraspin on the Products. + +ARTICLE IV. PRODUCT AND INVENTORY 4.1 Products. Hydraspin reserves the right, from time to time and in its sole discretion, to modify, alter, change, or improve any or all of the Products covered by this Agreement; provided, that this Agreement shall continue to apply to all Products in their altered, changed or improved state. Hydraspin shall promptly send Distributor written notice of any modification, alteration, change or improvement to any Product. 4 + +Source: WATER NOW, INC., 10-Q, 11/20/2019 + + + + + +4.2 Unauthorized Sales of Products. If during the term of this Agreement, Hydraspin has actual knowledge of any unauthorized sale of any of the Products in the Territory, Hydraspin shall take commercially reasonable action as soon as reasonably possible to bring such selling activities to an end. 4.3 Product Adulteration. Distributor shall not modify, alter and/or change any Product as provided by Hydraspin without the prior written consent of Hydraspin. 4.4 Supply of Products. Hydraspin shall use its commercially reasonable efforts to supply the Products as provided in this Agreement. In the event that the demand for any Product exceeds Hydraspin's delivery capabilities, Hydraspin shall exercise a good faith effort to allocate available Products production resources on a pro rata basis so that Distributor will receive Product in the same ratio as Distributor's purchases of such Product during the period contemplated by the purchase order bears to Hydraspin's total distribution of such Product during such period. 4.5 Regulatory Approvals. Hydraspin shall be responsible, at its sole expense, for obtaining all required approvals, notices, filings and applications for Products in the Territory under all applicable Laws and shall own all regulatory approvals with respect to Products. Distributor shall have the right to rely on all such approvals, notices, filings and applications in the Territory to the extent necessary to perform its obligations hereunder. Hydraspin shall be responsible for undertaking all activities required under all applicable Laws in the Territory. If any separate regulatory approval is required to be made by Distributor, Hydraspin shall assist Distributor in obtaining such regulatory approval. 4.6 Product Information. Hydraspin will, at its sole cost and to the extent it is available from the manufacturer of the Product, furnish Distributor with a reasonable supply of sales and technical information, literature and other marketing materials regarding Hydraspin and the Products in order to aid Distributor in effectively carrying out its activities under this Agreement. 4.7 Problem Identification. During the term of this Agreement, Distributor shall provide Hydraspin with written notice of any claim or legal proceeding in the Territory involving any of the Products promptly after Distributor has actual knowledge of such claim or legal proceeding. Likewise, during the term of this Agreement, Hydraspin shall provide Distributor with written notice of any claim or legal proceeding in the Territory involving any of the Products promptly after Hydraspin has actual knowledge of such claim or legal proceeding. Distributor will also keep Hydraspin informed as to any problems encountered with any of the Products. Hydraspin will repair or replace all defective or damaged Products at the time of delivery at its sole cost and expense. ARTICLE V. ORDERS AND DELIVERY 5.1 Orders. Distributor shall order Products from Hydraspin by submitting purchase orders and an installation plan identifying the number(s) and type(s) of Products ordered, the requested delivery date(s) (each, an "Order"). The requested delivery date shall be no less than 120 days from the date the Order is accepted by Hydraspin. Hydraspin will not unreasonably reject any Order for Products. Hydraspin will accept or reject each Order submitted by Distributor within ten (10) days after receipt of the Order. Any Orders not expressly rejected by Hydraspin within such ten (10) day period shall be deemed accepted by Hydraspin. Notwithstanding the foregoing, Distributor may cancel any Order for Products that are not delivered within sixty (60) days after the delivery date specified therein. 5.2 Delivery; Storage; Risk of Loss. Hydraspin shall use commercially reasonable efforts to deliver Products to Customers by the delivery dates specified in Distributor's Orders. Products shall be 5 + +Source: WATER NOW, INC., 10-Q, 11/20/2019 + + + + + +delivered directly to the Customer. All costs and expenses of shipping, freight, delivery, transportation and storage, including, without limitation, insurance covering the Products during transportation and while stored at any facility will be borne solely by Hydraspin and the Distributor shall not be liable therefor. Risk of loss shall be borne entirely by Hydraspin, even while Products are in the possession or control of Distributor or any customer, and the Distributor and the customers shall not be liable therefor, except solely in the case of Distributor's or any customer's intentional misconduct or gross negligence. Hydraspin may request Distributor to store Products at Distributor's facilities, and Distributor shall use commercially reasonable efforts to accommodate Hydraspin's storage requests; provided, that Hydraspin shall bear the full risk of loss with respect to Products stored at Distributor's facility and Distributor shall not be liable therefor, except solely in the case of Distributor's intentional misconduct or gross negligence. ARTICLE VI. NET REVENUE AND REPORTS 6.1 No Cost. Hydraspin shall provide the Products to Distributor's Customers at no cost to Distributor or the Customers, except solely for the Hydraspin Share of Net Revenue, which shall be due and payable to Hydraspin as set forth in this Article VI. Likewise, Hydraspin shall install, service and maintain the Products, with the commercially reasonable assistance of Distributor, at no cost to Distributor or the customers except solely for the Hydraspin Share of Net Revenue, which shall be due and payable to Hydraspin as set forth in this Article VI. 6.2 Net Revenue. With respect to each Revenue Event, Distributor shall be entitled to receive the Distributor Share of Net Revenue, and Hydraspin shall be entitled to receive the Hydraspin Share of Net Revenue. Hydraspin and the Distributor will cooperate to ensure that the Parties each receive the correct percentages of Net Revenue. If Hydraspin receives any payment in excess of the Hydraspin Share, then Hydraspin agrees to remit promptly to the Distributor such excess amount. Likewise, if the Distributor receives any payment or in excess of the Distributor Share, then the Distributor agrees to remit promptly to Hydraspin such excess amount. 6.3 Calculation of Net Revenue. The Parties hereto acknowledge and agree that the Net Revenue is determined, in part, by the method under which the Hydrocarbons are measured, that such methods differ from Customer to Customer, and are outside of the control of the Parties. Likewise, the Parties hereto acknowledge and agree that the timing of receipt of Net Revenue is outside of the control of the Parties. No Party shall be liable to another Party as a result of any Losses sustained by such Party resulting from the measurement of Hydrocarbons and the resulting Net Revenue derived from the Products or the timing of receipt of a Party's share of Net Revenue. 6.4 Records. During the term of this Agreement and for any additional time period thereafter required by applicable Law, Distributor shall maintain complete and accurate books and records relating to the Products, including, without limitation, the names and addresses of Customers, the location of the Products, the sales of Hydrocarbons relating to the Products, the Net Revenue, the Hydraspin Share of Net Revenue, and the Distributor Share of Net Revenue. During the term of this Agreement, Distributor shall afford to Hydraspin and its authorized representatives full access at all reasonable times and upon reasonable prior notice, to all such books and records with respect to the Products. ARTICLE VII. REPRESENTATIONS AND WARRANTIES 7.1 Representations of Hydraspin. Hydraspin represents and warrants to Distributor as follows: 6 + +Source: WATER NOW, INC., 10-Q, 11/20/2019 + + + + + +(a) Due Organization, Existence and Authority. Hydraspin (i) is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization, and (ii) has full power and authority to own its properties, carry on its business as presently conducted and as proposed to be conducted, and to enter into and perform its obligations under this Agreement. (b) Authorization. The execution and delivery by Hydraspin of this Agreement and the other documents related thereto and the full and timely performance of all obligations thereunder have been duly authorized by all necessary action under the constituent documents of Hydraspin and otherwise. (c) Valid, Binding and Enforceable. This has been duly and validly executed, issued and delivered by Hydraspin and constitutes the valid and legally binding obligations of Hydraspin, enforceable in accordance with its terms, except as limited by bankruptcy, insolvency, reorganization or other similar laws relating to or affecting enforcement of creditor's rights. (d) No Violation. The execution, delivery and performance by Hydraspin of this Agreement does not and will not (i) contravene the constituent documents of Hydraspin, (ii) contravene any law, rule or regulation, or any order, writ, judgment, injunction or decree or any contractual restriction binding on or affecting Hydraspin or the Products, and (iii) require any approval or consent of any general partner, board, manager, member, lender or any other person or entity, other than approvals or consents that have been previously obtained and disclosed in writing to the Distributor, [including, without limitation, the consent of AHT.] No authorization or approval or other action by, and no notice to or filing with, any Governmental Authority is required for the due execution, delivery and performance by Hydraspin of this Agreement, other than approvals or consents that have been previously obtained and disclosed in writing to the Distributor. 7.2 Representations of Distributor. Distributor represents and warrants to Hydraspin as follows: (a) Due Organization, Existence and Authority. Distributor (i) is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization, and (ii) has full power and authority to own its properties, carry on its business as presently conducted and as proposed to be conducted, and to enter into and perform its obligations under this Agreement. (b) Authorization. The execution and delivery by Distributor of this Agreement and the other documents related thereto and the full and timely performance of all obligations thereunder have been duly authorized by all necessary action under the constituent documents of Distributor and otherwise. (c) Valid, Binding and Enforceable. This has been duly and validly executed, issued and delivered by Distributor and constitutes the valid and legally binding obligations of Distributor, enforceable in accordance with its terms, except as limited by bankruptcy, insolvency, reorganization or other similar laws relating to or affecting enforcement of creditor's rights. (d) No Violation. The execution, delivery and performance by Distributor of this Agreement does not and will not (i) contravene the constituent documents of Distributor, (ii) contravene any law, rule or regulation, or any order, writ, judgment, injunction or decree or any contractual restriction binding on or affecting Distributor, or (iii) require any approval or consent of any general partner, board, manager, member, lender or any other person or entity, other than approvals or consents that have been previously obtained and disclosed in writing to the Hydraspin. 7 + +Source: WATER NOW, INC., 10-Q, 11/20/2019 + + + + + +No authorization or approval or other action by, and no notice to or filing with, any Governmental Authority is required for the due execution, delivery and performance by Distributor of this Agreement, other than approvals or consents that have been previously obtained and disclosed in writing to Hydraspin. ARTICLE VIII. + +INTELLECTUAL PROPERTY RIGHTS 8.1 Limited Grant. Hydraspin hereby grants to Distributor an exclusive non-transferable and royalty-free right and license to use Hydraspin's Marks in connection with the advertising, promotion, marketing, distribution and sale of the Products in the Territory in accordance with Hydraspin's standards and instructions. Distributor shall acquire no right, title or interest in or to the Marks, other than the above license, and Distributor shall not use any Mark as part of Distributor's corporate or trade name or permit any third person or party to do so without the prior written consent of Hydraspin. 8.2 Notice of Infringements. Distributor shall notify Hydraspin in writing of any and all infringements of the intellectual property relating to the Products in the Territory that may come to Distributor's attention, and Distributor shall assist Hydraspin in taking such action against such infringements as Hydraspin in its sole discretion may decide; provided, however, that Hydraspin shall bear any and all expenses and costs incident to such action. 8.3 Termination of Use. Distributor acknowledges Hydraspin's proprietary rights in and to the intellectual property relating to the Products, and Distributor waives in favor of Hydraspin all rights to the intellectual property relating to the Products, including any additions to the intellectual property hereafter originated by Hydraspin or AHT. Distributor shall not adopt, use or register any words, phrases or symbols which are identical to or confusingly similar to any of the Marks. Upon termination of this Agreement, Distributor shall immediately cease using the Marks. 8.4 Ownership. Except for the limited rights expressly granted herein by Hydraspin to Distributor, nothing in this Agreement will serve to transfer to Distributor any patent, copyright, trademark or other intellectual property rights in or to any Product, the Marks, or other intellectual property owned or claimed by Hydraspin or AHT. Distributor acknowledges and agrees that Hydraspin or AHT have sole right, title and interest in and to all intellectual property rights covering, claiming or associated with the Products, the Marks and all goodwill associated therewith. 8.5 Maintenance of Intellectual Property Rights. During the term of this Agreement, Hydraspin shall be responsible for maintaining, at Hydraspin's sole cost and expense, any and all intellectual property rights related to the Products, including, without limitation, (i) patents and patent applications, and any and all divisions, continuations, continuations-in-part, reissues, continuing patent applications, reexaminations, and extensions thereof (iii) trademarks and service marks, trade names, trade dress, and logos; and (iii) copyrights and other works of authorship. + +ARTICLE IX. CONFIDENTIAL AND/OR PROPRIETARY INFORMATION 9.1 Confidentiality. Each Party acknowledges that in the course of performing its respective duties under this Agreement, such Party may obtain information related to the other Party, which is of a 8 + +Source: WATER NOW, INC., 10-Q, 11/20/2019 + + + + + +confidential or proprietary nature ("Confidential Information"). Each Party agrees not to use such other party's Confidential Information, either directly or indirectly, for any purpose other than as required for performance of such Party's obligations hereunder. Such Confidential Information may include but is not limited to copyright, trade secrets or other proprietary information, techniques, processes, schematics, software source documents, pricing and discount lists and schedules, customer lists, contract terms, customer leads, financial information, sales and marketing plans, and information regarding the responsibilities, skills and compensation of employees. Title to Confidential Information shall remain with the owner of the Confidential Information at all times. Each Party agrees to treat the Confidential Information with at least the degree of care and protection with which it treats its own confidential information, but in any event with no less than reasonable care and protection, and to use the Confidential Information only for the purpose set forth in this Agreement. Except as otherwise required by law, applicable regulations or the terms of this Agreement or as mutually agreed upon by the parties hereto, each Party shall treat as confidential the terms and conditions of this Agreement. Notwithstanding anything contained in this Agreement to the contrary, Confidential Information shall not include information that: + +(a) is or becomes available to the public other than through a disclosure in breach hereof by the receiving Party or any of its representatives; + +(b) was in the possession of the receiving Party or its representatives prior to the Effective Date; + +(c) was communicated by the disclosing Party to an unaffiliated third party free of any obligation of confidentiality, and the unaffiliated third party communicated the Confidential Information to the receiving Party or its representatives; + +(d) becomes available to the receiving Party or its representatives from a source other than the disclosing Party, provided, that such source is not known to the receiving Party or its representatives to have made such information available in violation of an obligation of confidentiality owed to the disclosing Party; or + +(e) is independently developed by or on behalf of a Party or its representatives without use of the Confidential Information of the other Party. + +9.2 Nondisclosure. Each Party agrees not to disclose or otherwise make such Confidential Information available to third parties without the other Party's prior written consent. Each Party agrees that it will take appropriate action by instruction, agreement, or otherwise with such Party's employees to satisfy its obligations under this Agreement with respect to the use, copying, modification, protection, and security of Confidential Information. Nothing in this section prohibits any disclosure required by applicable law, a valid court order or subpoena; provided, that the disclosing Party gives the other Party prior notice of, and if possible a reasonable opportunity to contest, such required disclosure. 9.3 Return of Confidential Information. Each Party will promptly return all Confidential Information to the other Party upon expiration or termination of this Agreement, or upon receipt by such Party of written notice from the other Party requesting return of such Confidential Information. Such Confidential Information shall be returned promptly and the non-disclosing Party shall not retain any documents or materials or copies thereof containing any Confidential Information. 9.4 Injunctive Relief. Any breach of the restrictions contained in this Article IX is a breach of this 9 + +Source: WATER NOW, INC., 10-Q, 11/20/2019 + + + + + +Agreement that may cause irreparable harm to a party and as such each Party is entitled to injunctive relief to enforce this Agreement without the need to post bond and that such relief shall be, in addition to, and not in lieu of, any monetary damages or other legal or equitable remedies that may be available. ARTICLE X. TERM AND TERMINATION 10.1 Term. The initial term of this Agreement shall commence on the Effective Date and end on the five (5) year anniversary of the Effective Date (the "Initial Term"), unless sooner terminated pursuant to the terms hereof. Upon expiration of the Initial Term of this Agreement, this Agreement will automatically renew for additional, successive five (5) year periods unless either Party provides the other Party written notice of its desire to terminate at least one hundred twenty (120) days prior to the end of the Initial Term or any renewal. 10.2 Termination. This Agreement may be terminated as follows: (a) In the event that the Parties mutually determine that the arrangements contemplated by this Agreement are no longer in the best interests of the Parties or the Parties are not otherwise compatible, the Parties may at any time, by mutual written agreement, terminate this Agreement. (b) Immediately upon the occurrence of any of the following events and effective upon delivery of notice: (1) by Hydraspin, i f Distributor ceases to do business, or otherwise terminates Distributor's business operations; (2) by Distributor, if Hydraspin ceases to do business, or otherwise terminates Hydraspin's business operations; + +(3) by Hydraspin, if Distributor fails to satisfy the Performance Thresholds; (4) by either Party, if any representation by the other Party made in this Agreement was false or misleading in any material respect when made; (5) by Distributor, if Hydraspin fails to secure or renew any license, permit, authorization, or approval for the conduct of Hydraspin's business or the distribution of the Products or if any such license, permit, authorization, or approval is revoked or suspended provided that such failure, revocation or suspension results in Hydraspin's failure or inability to perform substantially all of its obligations hereunder; (6) by either Party, if the other Party engages in fraud, criminal/negligent conduct in connection with this Agreement or the business relationship of the parties or if the other Party makes any material false representations, reports, or claims in connection with this Agreement or any Product; (7) by either Party, if the other Party breaches any of its obligations under this Agreement and such violation is not cured to the satisfaction of the non-breaching party within thirty (30) days after written notice is given from the non-breaching Party to the breaching Party; 10 + +Source: WATER NOW, INC., 10-Q, 11/20/2019 + + + + + +(8) by either Party, if Hydraspin undergoes a Change of Control; or (9) by either Party, if such other Party seeks protection under any bankruptcy, receivership, trustee, creditors arrangement, composition, or comparable proceeding, or if any such proceeding is instituted against such other Party. 10.3 Effect of Termination. + +(a) Termination or expiration of this Agreement will not relieve either Party of any obligation incurred hereunder prior to such termination or expiration. Each Party will be entitled to cancel any outstanding Orders, to the extent Products have not been delivered. Hydraspin shall be entitled to retrieve its Products from the Customers at its sole cost and expense. (b) If termination is the result of a Change of Control, Distributor shall be entitled to receive a onetime payment, within three (3) business days of the effective date of the Change of Control, equal to the greater of the following 1) the aggregate amount of the Distributor Share received during the 18 months prior to the effective date of such Change of Control or 2) the aggregate amount of the Distributor Share received on the 30 days prior to the effective date of such Change of Control multiplied by 18. (c) Neither Party will incur liability for any Losses of any kind suffered or incurred by the other Party arising from or incident to termination of this Agreement by such party as permitted by this Article X. ARTICLE XI. + +MISCELLANEOUS 11.1 Notices. (a) Manner of Notice. All notices, requests and other communications under this Agreement shall be in writing (including in portable document format (or similar format) delivered by email transmission) and shall be deemed to have been duly given if delivered personally, or sent by either certified or registered mail, return receipt requested, postage prepaid, or by overnight courier guaranteeing next day delivery, or by email transmission, addressed as follows: (i) If to Hydraspin: Water Now, Inc. Hydraspin USA, Inc. 5000 South Freeway, Suite 110 Fort Worth, Texas 76115 Attn: David King Email: dking@waternowinc.com or at such other address or email address as Hydraspin may have advised Distributor in writing; and (ii) If to Distributor: Bestev Management, LLC 11 + +Source: WATER NOW, INC., 10-Q, 11/20/2019 + + + + + +Attn: Email: or at such other address or email address as Distributor may have advised Hydraspin in writing. (b) Deemed Delivery. All such notices, requests and other communications shall be deemed to have been received (i) on the date of delivery thereof, if delivered by hand, (ii) on the fifth day after the mailing thereof, if mailed, (iii) on the next business day after the sending thereof, if sent by overnight courier, (iv) on the day of sending, if sent by email transmission prior to 5:00 p.m. on any business day, or (v) on the next business day, if sent by email transmission after 5:00 p.m. on any business day or on any day other than a business day. 11.2 Waivers and Amendments. No amendment or waiver of any provision of this Agreement, nor consent to any departure therefrom, shall be effective unless the same shall be in writing and signed by a duly authorized officer of each of the Parties, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. No failure on the part of a Party hereto to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right. The remedies provided in this Agreement are cumulative and not exclusive of any remedies provided by law. 11.3 Assignment. Neither Party may assign any right, or delegate any duty under this Agreement, in whole or in part, without the prior written consent of the other Party, which shall not be unreasonably withheld or delayed. Any attempted assignment without such consent shall be void and of no effect. Notwithstanding anything contained in this Section to the contrary, Hydraspin may assign this Agreement upon written notice to Distributor to any entity which controls, is controlled by or under common control with Hydraspin or to any successor to or purchaser of all or substantially all of its assets or stock, by merger or otherwise. 11.4 Force Majeure. The obligations of the Parties under this Agreement shall be suspended to the extent that a Party is hindered or prevented from complying therewith because of labor disturbances (including strikes or lockouts), war, acts of God, terrorism, fires, storms, accidents, governmental regulations or any other cause whatsoever reasonably beyond a Party's reasonable control. For so long as such circumstances prevail, the Party whose performance is delayed or hindered shall continue to use all commercially reasonable efforts to recommence performance without delay. 11.5 Relationship of Parties. Each Party hereto shall be, and at all times will remain, an independent contractor and will not represent itself to be the agent, joint venturer, or partner of the other party or related to such Party. No representations will be made or acts done by either Party which would establish any apparent relationship of agency, joint venture or partnership. Nothing herein is intended or may be construed to create any employer/employee relationship between the Parties. 11.6 Binding Effect. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns. 11.7 Exhibits. The Exhibits attached hereto or referred to herein are incorporated herein and made a part hereof for all purposes. As used herein, the expression "this Agreement" means this document and such Exhibits. 12 + +Source: WATER NOW, INC., 10-Q, 11/20/2019 + + + + + +11.8 Governing Law. THIS AGREEMENT, AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES, SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE STATE OF TEXAS, U.S.A. WITHOUT REGARD TO ITS PRINCIPLES OF CONFLICTS OF LAWS. 11.9 Arbitration. The Parties shall use their respective best efforts to settle amicably any disputes, differences or controversies arising between the Parties out of or in connection with or in respect of this Agreement. However, if not so settled, then the same shall be submitted to arbitration and, to the fullest extent permitted by law, be solely and finally settled by confidential binding arbitration, except as specifically provided otherwise herein. The confidential arbitration proceeding shall be held in Collin County, Texas and shall be conducted in accordance with the alternative dispute resolution rules of the American Arbitration Association. The arbitration proceeding shall be held before a single arbitrator unless (i) the matter in controversy exceeds Five Hundred Thousand Dollars ($500,000), (ii) the Parties cannot agree on the arbitrator, or (iii) either Party requests a panel of three (3) arbitrators. Judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction, or application may be made to such court for a judicial acceptance of the award and any order of enforcement as the case may be. The arbitrator shall not award any Party punitive, exemplary, multiplied or consequential damages, and each Party hereby irrevocably waives any right to seek such damages in arbitration or in judicial proceedings. Each Party shall bear its own costs in the arbitration, and the fees and expenses of the arbitration shall be shared equally by the Parties. Notwithstanding the foregoing, the arbitrator shall have the right and authority to apportion among the parties all reasonable costs, including attorneys' fees and witness fees, taking into account the relative fault of the Parties. The foregoing provisions of this Section 11.9 do not limit the right of a Party to seek injunctive or other equitable relief from a court of competent jurisdiction pending resolution of a dispute by arbitration. 11.10 Jurisdiction and Venue. Subject to the arbitration provisions set forth in Section 11.10, any judicial proceeding brought by or against either of the Parties on any dispute arising out of this Agreement or any matter relating thereto shall be brought in any federal or state court sitting or having jurisdiction in the County of Collin, State of Texas, and by execution and delivery of this Agreement, each Party hereby accepts for itself the exclusive jurisdiction and venue of the aforesaid courts as trial courts, and irrevocably agrees to be bound by any final non-appealable judgment rendered in connection with this Agreement. 11.11 Number and Gender. Whenever herein the singular number is used, the same shall include the plural where appropriate, and words of any gender shall include each other gender where appropriate. 11.12 Captions. The captions, headings and arrangements used in this Agreement are for convenience only and do not in any way affect, limit or amplify the provisions hereof. 11.13 Invalid Provisions. If any provision of this Agreement is held to be illegal, invalid or unenforceable under present or future laws effective during the term hereof, such provision shall be fully severable, this Agreement shall be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part hereof, and the remaining provisions of this Agreement shall remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable provision or its severance from this Agreement. Furthermore, in lieu of such illegal, invalid or unenforceable provision, there shall be added automatically as part hereof a provision as similar in terms, but in any event no more restrictive than, such illegal, invalid or unenforceable provision as may be possible and be legal, valid and enforceable. 11.14 Entirety. This Agreement and the documents executed and delivered pursuant hereto, executed on the date hereof or in connection herewith, contain the entire agreement between the Parties with 13 + +Source: WATER NOW, INC., 10-Q, 11/20/2019 + + + + + +respect to the matters addressed herein and supersede all prior representations, inducements, promises or agreements, oral or otherwise, which are not embodied herein or therein. 11.15 Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original for all purposes and all of which shall be deemed collectively to be one agreement. Signatures given by facsimile or portable document format (or similar format) shall be binding and effective to the same extent as original signatures. 11.16 Third Party Beneficiaries. Nothing contained herein, express or implied, is intended to confer upon any person or entity other than the Parties and their respective successors in interest and permitted assigns any rights or remedies under or by reason of this Agreement. 11.17 Interpretation. This Agreement has been prepared in the English language which language shall be controlling in all respects. 14 + +Source: WATER NOW, INC., 10-Q, 11/20/2019 + + + + + +IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Agreement as of the date first set forth above. + +WATER NOW: WATER NOW, INC. + +By: Name: David King Title: Chief Executive Officer + +HYDRASPIN: HYDRASPIN USA, INC. + +By: Name: David King Title: Chief Executive Officer WATER NOW: WATER NOW, INC. + +By: Name: Title: + +DISTRIBUTOR: BESTEV MANAGEMENT, LLC + +By: Name: Title: + +15 + +Source: WATER NOW, INC., 10-Q, 11/20/2019 + + + + + +EXHIBIT A PRODUCTS African Horizon Technologies Hydraspin Units + +16 + +Source: WATER NOW, INC., 10-Q, 11/20/2019 + + + + + +EXHIBIT B TERRITORY The Territory consists of all of the following: A. The San Juan Basin located near the Four Corners region of the Southwestern United States. The San Juan Basin Territory includes, without limitation, that certain area covering 7,500 square miles and resides in northwestern New Mexico, southwestern Colorado, and parts of Utah and Arizona. Specifically, the San Juan Basin occupies space in the San Juan, Rio Arriba, Sandoval, and McKinley counties in New Mexico, and La Plata and Archuleta counties in Colorado. B. The Permian Basin located in the southwestern part of the United States. The Permian Basin Territory includes, without limitation, the Mid-Continent Oil Field province located in western Texas and southeastern New Mexico, reaching from just south of Lubbock, past Midland and Odessa, south nearly to the Rio Grande River in southern West Central Texas, and extending westward into the southeastern part of New Mexico. C. The Eagle Ford Group Basin (also called the Eagle Ford Shale Basin) covering much of the state of Texas. The Eagle Ford Group Basin Territory includes, without limitation, the Eagle Ford outcrop belt trending from the Oklahoma/Texas border southward to San Antonio, westward to the Rio Grande, Big Bend National Park, and the Quitman Mountains of West Texas. + +Source: WATER NOW, INC., 10-Q, 11/20/2019 \ No newline at end of file diff --git a/full_contract_txt/WebmdHealthCorp_20050908_S-1A_EX-10.7_1027007_EX-10.7_Content License Agreement.txt b/full_contract_txt/WebmdHealthCorp_20050908_S-1A_EX-10.7_1027007_EX-10.7_Content License Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..5761345d2fe2a457c860dcab2febeabc520f43d8 --- /dev/null +++ b/full_contract_txt/WebmdHealthCorp_20050908_S-1A_EX-10.7_1027007_EX-10.7_Content License Agreement.txt @@ -0,0 +1,159 @@ +Exhibit 10.7 + +CONTENT LICENSE AGREEMENT + +This Content License Agreement (this "Agreement") is dated as of October 1, 2005 (the "Effective Date") and is by and between Emdeon Corporation a Delaware corporation ("Emdeon"), with offices at at 669 River Drive, Center 2, Elmwood Park, New Jersey 07407 and WebMD, Inc. a Georgia Corporation ("WebMD"), with offices at 111 Eighth Avenue, New York, NY 10011. Emdeon and WebMD expressly agree that this Agreement incorporates the Terms and Conditions attached hereto. + +WebMD agrees to grant, and Emdeon agrees to accept, a license to use the Content (as defined below) in connection with various software products it has all right title and interest to (the "Software") in accordance with the terms of this Agreement. + +Content to be provided under this Agreement is specified on Exhibit A (the "Content"). + +Expiration Date: August 31, 2006 + +AGREED TO AND ACCEPTED: WebMD, Inc. Emdeon Corporation By: By: + + Name: Name: + + Title: Title: + + + +Source: WEBMD HEALTH CORP., S-1/A, 9/8/2005 + + + + + + + +EXHIBIT A + +CONTENT TO BE PROVIDED + +WebMD shall provide Content as follows: + +The entire set of Anatomical Line Drawings. Anatomical Line Drawings are printable line drawings intended for physicians to draw on and illustrate diseases and conditions to patients. + +-2- + +Source: WEBMD HEALTH CORP., S-1/A, 9/8/2005 + + + + + + + +EXHIBIT B + +FEES + +Fees for the Content shall be $5,000 per year. + +Additional anatomical line drawings shall be licensed to Emdeon at an incremental charge of $150 per drawing. + +-3- + +Source: WEBMD HEALTH CORP., S-1/A, 9/8/2005 + + + + + + + +TERMS AND CONDITIONS + +1. Content. + +(a) Description. WebMD hereby agrees to provide Emdeon the Content described on Exhibit A in accordance with the terms of this Agreement. + +(b) License. Subject to Emdeon's compliance with the provisions of this Agreement, Emdeon is hereby authorized and licensed to use the Content by making such Content available to third parties verbatim or as source material via the Software. Such license is a non-exclusive, non-transferrable and worldwide license and shall include the right to use, reproduce, copy and publish the Content solely in connection with the Software. Emdeon may determine the placement and formatting of the Content in the Software, but may not change the substance of the Content to any extent whatsoever without WebMD's written approval of the change. + +(c) Updates. If WebMD should reprint, issue a new edition, change or modify the edition, or otherwise enhance or edit the Content Emdeon has licensed (collectively, "Updates"), Emdeon has the option, at no additional cost, to receive the most recent Update. WebMD shall promptly notify Emdeon when a new Update is available. + +(d) Format. WebMD agrees to provide Emdeon the Content, including any Updates, in a mutually agreeable format (the "Format"). WebMD shall bear the cost of any reformatting necessary to provide the Content in the Format. Emdeon shall bear all the cost associated with the integration of the Content into the Software. + +(e) WebMD retains absolute editorial control over the Content. Nothing in this Agreement shall restrict WebMD's right to place other marks (such as third party marks) within the Content. + +(f) From time to time, WebMD will provide Content that supersedes and replaces Content previously provided (for example, a corrected news article). Promptly after receipt of replacement Content, Emdeon will either (a) remove the superseded Content and replace it with the replacement Content or (b) note at the top of the superseded Content that it has been replaced and give a hypertext link to the replacement Content. + +(g) WebMD does not provide medical or diagnostic advice or services. Emdeon agrees that the Content is to be used for informational and educational purposes only. Emdeon agrees that it shall not rely, or promote reliance, on the Content as a substitute for the professional judgment of a health care professional in diagnosing and treating patients. + +2. Intellectual Property. As between WebMD and Emdeon, WebMD or its suppliers retain all worldwide right, title, and interest in and to the Content. All rights in the Content not expressly granted by WebMD to Emdeon are reserved to WebMD. Except as expressly provided, no rights or licenses are intended or conveyed herein, whether by implication, estoppel, or otherwise. + +3. Term and Termination. + +(a) Term. This Agreement shall be effective as of the Effective Date and shall expire on the Expiration Date set forth above (the "Initial Term"), unless earlier terminated in accordance with Section 3(b). Upon mutual agreement, this Agreement may be renewed for one (1) additional one (1) year term upon the expiration of the Initial Term. + +(b) Termination. In addition to expiration of this Agreement as set forth in Section 3(a) hereof in the event either party fails to perform any of its material obligations hereunder, the other party may terminate this Agreement at its election after thirty (30) days written notice to the party of such breach, if such breach is not cured by the party within such thirty (30) day period. + +(c) Survival. All representations, warranties and indemnities shall survive the execution, delivery, suspension, expiration and/or termination of this Agreement or any provision hereof. Upon any expiration or termination of this Agreement, Emdeon shall have a reasonable period of time to remove the Content from the Software. + +4. Fees and Payment. + +-4- + +Source: WEBMD HEALTH CORP., S-1/A, 9/8/2005 + + + + + + + +(a) Payments. In consideration for provision of the Content and all rights granted hereunder, Emdeon hereby agreed to pay WebMD the amounts set forth on Exhibit B of this Agreement. All amounts payable shall be due be due thirty (30) days after the receipt of WebMD's invoice. + +(b) Taxes. All payments under the Agreement are exclusive of all federal, state, local and foreign taxes, levies and assessments. Emdeon agrees to bear and be responsible for the payment of all such taxes, levies and assessments imposed on WebMD arising out of this Agreement, excluding any tax based on WebMD's net income. All fees charged hereunder by WebMD are net of any such taxes. + +(c) Late payments are subject to an interest charge, at the lower rate of (i) one and one-half percent (1.5%) per month, or (ii) the maximum legal rate. + +5. Trademark License. + +(a) Emdeon is hereby granted a non-exclusive and worldwide right to use WebMD's trademarks and logos ("Marks") for the purpose of identifying the origin of the Content during the term of this Agreement. These Marks may be used by Emdeon, in its sole discretion, in connection with the Content in the Software, and in any form, format, forum, media, medium, means or method by which the Content is delivered. Notwithstanding the foregoing, portions of the Software that contain Content shall include a WebMD Mark in appearance and format mutually agreed to by the parties. + +6. Disclaimer. WebMD MAKES NO REPRESENTATIONS OR WARRANTIES OF ANY KIND, WHETHER EXPRESS OR IMPLIED, WITH RESPECT TO THE CONTENT OR THE ACCURACY OF THE CONTENT. WEBMD EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE AND ALL WARRANTIES ARISING FROM CONDUCT, COURSE OF DEALING OR CUSTOM OF TRADE. IN NO EVENT WILL WEBMD OR ITS SUPPLIERS OR LICENSORS BE LIABLE UNDER ANY THEORY OF LIABILITY, HOWEVER ARISING, FOR ANY COSTS OF COVER OR FOR INDIRECT, SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES OF ANY KIND ARISING OUT OF THIS AGREEMENT, OR THE PROVISION OR USE OF CONTENT, EVEN IF WEBMD HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. WEBMD'S AGGREGATE LIABILITY FOR ALL DAMAGES, LOSSES AND CAUSES OF ACTION IN ANY WAY RELATED TO THIS AGREEMENT OR THE CONTENT, WHETHER IN CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE, EITHER JOINTLY OR SEVERALLY, SHALL NOT EXCEED FIFTY DOLLARS ($50). THIS SECTION REFLECTS AN ALLOCATION OF RISK BETWEEN THE PARTIES, IS NOT A PENALTY, AND SHALL BE EXCLUSIVE. THIS SECTION SHALL APPLY DESPITE ANY FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED WARRANTY OR REMEDY. + +6. Confidentiality. + +(a) Confidential Information. "Confidential Information" means any data, materials or information that is disclosed by either party to the other party during the term hereof, in oral or written form, and which is marked or otherwise reasonably identified as "confidential" or "proprietary". Confidential Information also includes any information described in this Section which either party obtains from a third party under an obligation of confidentiality. Confidential Information does not include any data or information which the receiving party can demonstrate with competent written proof: (i) was already known to it at the time of disclosure; (ii) was independently developed by it without reference to the disclosing party's Confidential Information; (iii) is in the public domain; (iv) was rightfully disclosed to it by a third party without obligation of confidentiality; or (v) is required to be disclosed pursuant to any statutory or regulatory authority or court order, provided the disclosing party is given prompt written notice of such requirement and the scope of such disclosure is limited to the extent possible. + +(b) Trade Secrets. "Trade Secrets" shall mean Confidential Information, including but not limited to technical or non-technical data, a formula, a pattern, a compilation, a program, a device, a method, a technique, a drawing, a process, financial data, financial plans, product plans, or a list of actual or potential customers or suppliers, in any form or format, which is not commonly known by or available to the public and which: (i) derives economic value, actual or potential, from not being generally known to and not being readily ascertainable by proper means by other persons who can obtain economic value from its disclosure or use, and (ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy. + +(c) Requirements. During the term of this Agreement and for so long as such information remains a trade secret under applicable law, neither party will, except as otherwise expressly directed by the other + +-5- + +Source: WEBMD HEALTH CORP., S-1/A, 9/8/2005 + + + + + + + +party, use, copy, or disclose, or permit any unauthorized person access to, any of the other party's Trade Secrets, except as expressly permitted herein and necessary for accomplishment of activities required hereby. During the term of this Agreement and for a period of two (2) years after termination hereof, neither party will use, copy, or disclose, or permit any unauthorized person access to, any of the other party's Confidential Information, except as expressly directed by such party or as permitted herein. The receiving party agrees to take reasonable precautions (no less rigorous than the receiving party takes with respect to its own comparable Confidential Information and Trade Secrets) to prevent unauthorized or inadvertent disclosure of the Confidential Information and Trade Secrets of the disclosing party. + +(d) Return of Information. The receiving party will, at the request of the disclosing party, during the term of this Agreement or thereafter (i) promptly return all Confidential Information and Trade Secrets held or used by the receiving party in whatever form, or (ii) at the discretion of the disclosing party, promptly destroy all such Confidential Information and Trade Secrets, including all copies thereof, and those portions of all documents that incorporate such Confidential Information and/or Trade Secrets. + +7. Assignment. Neither party shall have the right to sell, assign, transfer or hypothecate (all hereinafter referred to as "assign" or "assignment") this Agreement, or delegate any of its obligations hereunder, voluntarily or by operation of law, without the prior written consent of the other party. Any such purported assignment or delegation without such prior written consent shall be null and void and have no force and effect. + +8. General. + +(a) Notices. All material notices and other communications required or permitted under this Agreement shall be in writing and notices will be deemed given three (3) days after they are sent by first class mail, return receipt requested, and one (1) day after they are sent by overnight courier or upon receipt if delivered by hand delivery, to the receiving party's address as set forth in the first paragraph above, or to such other address that the receiving party may have provided in writing to the other party for purposes of receiving notices as provided in this Section. + +(b) Governing Law, Venue and Jurisdiction. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without application of conflict of laws principles. + +(c) Force Majeure. Neither party shall be held responsible for any inability to perform occasioned by labor strife, war, riot, fires, embargoes, floods, government requirements, or other similar events beyond the control of such party. + +(d) Relationship. WebMD's relationship to Emdeon shall be that of an independent contractor. Nothing herein shall create any association, partnership, joint venture or agency relationship between WebMD and Emdeon. Without limiting the generality of the foregoing, it is expressly understood and agreed that WebMD shall have no authority whatsoever to make any representations or commitments to or enter into any agreements with any third party on behalf of Emdeon. + +(e) Severability and Non-Waiver. In the event any provision of this Agreement shall be found to be contrary to any law or regulation of any federal, state or municipal administrative agency or body, the other provisions of this Agreement shall not be affected thereby but shall notwithstanding continue in full force and effect. No waiver by either party hereto of any breach or default by the other party shall be construed to be a waiver of any other breach or default by such other party. Resort to any remedies referred to herein shall not be construed as a waiver of any other rights and remedies to which either party is entitled under this Agreement or otherwise nor shall an election to terminate be deemed an election of remedies or a waiver of any claim for damages or otherwise. + +(f) Counterparts. This Agreement may be executed in one or more counterparts, each of which will be deemed original, but all of which will constitute one and the same instrument. + +(g) Complete Agreement. This Agreement, including the attached Exhibits, constitutes the entire understanding between the parties with respect to the subject matter hereof and all prior understandings, whether oral or written, have been merged herein and are superseded hereby. This Agreement may not be altered or modified except in writing signed by both parties hereto. + +-6- + +Source: WEBMD HEALTH CORP., S-1/A, 9/8/2005 \ No newline at end of file diff --git a/full_contract_txt/WestPharmaceuticalServicesInc_20200116_8-K_EX-10.1_11947529_EX-10.1_Supply Agreement.txt b/full_contract_txt/WestPharmaceuticalServicesInc_20200116_8-K_EX-10.1_11947529_EX-10.1_Supply Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..6f28d7d418e40e8c5033b0e46088fb4b26a37a79 --- /dev/null +++ b/full_contract_txt/WestPharmaceuticalServicesInc_20200116_8-K_EX-10.1_11947529_EX-10.1_Supply Agreement.txt @@ -0,0 +1,623 @@ +Exhibit 10.1 + +[*****] Text omitted for confidential treatment. The redacted information has been excluded because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed. + +GLOBAL MASTER SUPPLY AGREEMENT + +This Global Master Supply Agreement ("Agreement" or "Contract") is between ExxonMobil Chemical Company, a division of Exxon Mobil Corporation ("Seller"),on behalf of itself and in the interest of the ExxonMobil affiliates listed on Attachment B (each an "ExxonMobil Selling Affiliate" or "EMCC/A" or collectively, "ExxonMobil Selling Affiliates"), and West Pharmaceutical Services, Inc. ("Buyer"), on behalf of itself and the Buyer affiliates listed on Attachment C (each a "Buyer Affiliate" or "West/A" or collectively, "Buyer Affiliates"). + +PRODUCTS, QUANTITY, PRICE + +In accordance with the provisions of this Agreement, ExxonMobil Selling Affiliates agree to sell to Buyer Affiliates, and Buyer Affiliates agree to purchase from ExxonMobil Selling Affiliates, the following product(s) (collectively, "Product"): + +Products Quantity [Metric Tons / Year] Container PackageYear 2019 2020 2021 2022 2023 [*****] [*****] Minimum Maximum [*****] [*****] [*****] [*****] [*****] [*****] [*****] [*****] [*****] [*****] Leased metal crates + +[*****] [*****] [*****] [*****] [*****] [*****] Leased metal crates [*****] not defined Leased metal crates + +Subject to this Agreement's terms and conditions, Buyer Affiliates shall purchase and ExxonMobil Selling Affiliates shall sell the yearly minimum amount of Product amounts (in the aggregate) listed above. Buyer or Buyer Affiliates may request to purchase amounts over the Product maximum amounts per year, however, it shall be solely within Seller or any ExxonMobil Selling Affiliate's discretion whether and under which conditions to accommodate Buyer's request. + +Buyer Affiliates shall issue a purchase order(s), or call off order(s) when purchasing Product from ExxonMobil Selling Affiliates in writing pursuant to this Contract ("Purchase Order"). Such Purchase Order(s) shall specify (a) the quantity of Product, and (b) general date of delivery. All Purchase Orders agreed to be filled by an ExxonMobil Selling affiliate shall be deemed to be a separate agreement between the relevant ExxonMobil Selling Affiliate and the relevant Buyer Affiliate, incorporating the terms of this Contract. Notwithstanding anything to the contrary in the attachments ExxonMobil and the ExxonMobil Selling Affiliates shall not unreasonably reject any Purchase Order that otherwise complies with the terms of this Agreement. + +Purchase Order(s), order acknowledgements and similar form documents evidencing the purchase or sale of Products, including any terms and conditions contained or referenced therein, shall not supersede, add to or amend in any way this Contract. In the event of any conflict between the terms of this Contract and the terms of any Purchase Order, order acknowledgement or similar document the terms of this Contract shall prevail. + +[*****] + +PRICING + +For calendar years 2019, 2020, 2021, 2022 and 2023, the price of Products sold by Seller/ExxonMobil Selling Affiliates to Buyer/Buyer Affiliates will comprise the Base Price, the crude adjustment and the freight cost depending on Incoterms. + +Source: WEST PHARMACEUTICAL SERVICES INC, 8-K, 1/16/2020 + + + + + +Base price + +Requested delivery date 1.1.2019 - 28.2.2019: All [*****] grades except [*****]: [*****] $/t [*****]: [*****] $/t [*****]: [*****] $/t + +1.3.2019 - 31.12.2019: All [*****] grades except [*****]: [*****] $/t [*****]: [*****] $/t [*****]: [*****] $/t + +1.1.2020 - 31.12.2020: All [*****] grades except [*****]: [*****] $/t [*****]: [*****] $/t [*****]: [*****] $/t + +1.1.2021 - 31.12.2021: All [*****] grades except [*****]: [*****] $/t [*****]: [*****] $/t [*****]: [*****] $/t + +1.1.2022 - 31.12.2022: All [*****] grades except [*****]: [*****] $/t [*****]: [*****] $/t [*****]: [*****] $/t + +1.1.2023 - 31.12.2023: All [*****] grades except [*****]: [*****] $/t [*****]: [*****] $/t [*****]: [*****] $/t + +[*****] + +Base prices listed above are non-delivered pricing (i.e., Ex-Works designated Exxon Affiliate location (see Attachment B) - Incoterms 2010 ("EXW") and does not include freight or insurance. + +Seller and Buyer shall meet on or before December 31, [*****] to assess the requirements for a price and/or volume adjustment in good faith on the price for Products sold by Seller/ExxonMobil Selling Affiliates to Buyer/Buyer Affiliates for years [*****] and [*****]. + +Notwithstanding anything to the contrary in Attachments A, G and H to this Agreement, the parties agree that any permitted adjustments to the price, freight or payment terms for Products sold hereunder will be governed by the terms of the Pricing and Payment Terms sections of this Agreement. + +Buyer Affiliates shall pay ExxonMobil's Selling Affiliates invoice(s) not later than the days set forth in Attachment E hereto. All invoices shall be paid in full by wire transfer in accordance with the invoice's instructions. + +Crude Trigger Clause + +Product price(s) shall be subject to the Average Brent crude oil price evolution (as further detailed below) in order to reflect the cost of energy. Should the Average Brent crude oil price at any moment during the term of this Agreement move to a different Average Brent crude oil price bracket as mentioned below, Seller may increase or decrease the Product price by $[*****] for every $[*****] change in the Average Brent crude oil price. In no event shall the Product price's increase or decrease exceed $[*****] for every $[*****] change in the Average Brent crude oil price brackets. Each Average Brent crude oil bracket is calculated on a $5 range basis (e.g., $30-$35, $40-$45, $50-$55, etc.). + +The Average Brent crude oil price evolution shall be expressed as the three-month average spot price per barrel of the Brent crude + +Source: WEST PHARMACEUTICAL SERVICES INC, 8-K, 1/16/2020 + + + + + +oil (as published in the Wall Street Journal). This average shall be calculated as the average of the prices for the immediate preceding three consecutive calendar months, with each month's price calculated as the average of the daily prices. + +Any conversion between United States Dollars and Euros will be carried out by using the average of the European Central Bank's daily foreign exchange rate as published in Reuter's screen ECB 37 for the period in question. + +Any Product price adjustment shall take effect the month immediately following Seller's notification of an increase or decrease in Product price. + +TITLE AND RISK OF LOSS - EXXONMOBIL CHEMICAL COMPANY AND EXXONMOBIL CHEMICAL SERVICES AMERICAS INC. + +Title to the Product(s) to be sold and delivered hereunder will transfer simultaneously with the risks upon delivery as per the applicable lncoterm (lncoterms 2010) in Attachment E with the exception of the following: + +For Product sold and/or sourced by ExxonMobil Chemical Company or ExxonMobil Chemical Services Americas Inc. that is shipped overseas to a non-U.S. location, title and risk of loss of Product shall transfer from ExxonMobil Chemical Company or ExxonMobil Chemical Services Americas Inc. to Buyer Affiliates at the first point upon which the delivering marine vessel crosses the outer boundary of the United States Exclusive Economic Zone (EEZ). The EEZ extends 200 nautical miles beyond the coastal baseline defined in the United Nations Convention on the Law of the Sea. + +For Product sold by ExxonMobil Chemical Company that is transported by land to Mexico, title and risk of loss of Product shall transfer from ExxonMobil Chemical Company to Buyer Affiliates at the frontier between Laredo, Texas, U.S.A. and Mexico (not unloaded), but prior to the customs border of Mexico. + +LOCATIONS OF SUPPLY + +Buyer/Buyer Affiliates that may purchase Product from ExxonMobil Selling Affiliates are listed in Attachment C. Other products and locations may be added upon mutual agreement in writing. + +Any and all sales of Product between ExxonMobil Chemical Company and/or ExxonMobil Chemical Services Americas, Inc. and Buyer Affiliates in the U.S., Mexico and Brazil shall be subject to the terms and conditions set forth in Attachment A hereto. + +Any and all sales of Product between ExxonMobil Petroleum & Chemical and Buyer Affiliates in France, Germany, Denmark, Serbia, Ireland and the United Kingdom shall be subject to the terms and conditions set forth in Attachment H hereto. + +Any and all sales of Product between ExxonMobil Chemical Asia Pacific and Buyer Affiliates in Singapore, China and India shall be subject to the terms and conditions set forth in Attachment G hereto. + +Buyer/Buyer Affiliates are responsible for the Product and returnable crates in their custody at the sales value of the Product and the replacement value of the metal crates, respectively. The terms relating to the use and return of metal crates are set out in Attachment F. + +AFFILIATES + +ExxonMobil Selling Affiliates participating in this Agreement are listed in Attachment B. Buyer Affiliates participating in this Agreement are listed in Attachment C. Seller and Buyer each represent and warrant that each will cause its respective affiliates, so listed, to become bound to the terms of this Agreement. + +QUALITY + +Product shall conform to ExxonMobil Selling Affiliates' standard sales specifications as of the date of shipment. + +Sellers agrees to support the creation of purchasing specifications for Products by Buyer and agrees to supply Products in accordance to those purchasing specifications. Seller has the right to review each purchasing specification and needs to accept in writing before such purchasing specifications become effective. Seller has the right to take exceptions to terms and provisions in these purchasing specifications if in contradiction with Seller's Sales specifications, General Terms and Condition of Sales or other Seller's procedures and policies. + +Source: WEST PHARMACEUTICAL SERVICES INC, 8-K, 1/16/2020 + + + + + +Buyer and Seller agree to enter into negotiations on an extended Quality Assurance Agreement. Provided that these negotiations will be successful, such agreement shall then be incorporated into this Contract as an amendment to it. + +AGREEMENT PERIOD + +Effective Date: January 1, 2019 + +Termination Date: December 31, 2023 + +PAYMENT TERMS + +Buyer/Buyer Affiliates shall pay for Product by Electronic Funds Transfer (EFT) through the Automated Clearing House (ACH) using the Corporate Trade Exchange (CTX) format, according to the payment terms described in Attachment E. + +TECHNICAL SUPPORT + +EMCC/A will provide technical expertise in the use of Products and will use its technical centers to enhance technical communications with West Pharmaceutical Services Affiliates technical centers. West/A will share its needs with EMCC/A and how they relate to West/A activities to help guide ExxonMobil Chemical Affiliates technical efforts. + +The parties have created and continue to entertain a research and development governance structure with a steering team, program management team and working team. The charter, roles and meeting frequencies are described in mutually agreed documents and will be reviewed periodically as deemed appropriate by the parties. + +SAFETY, HEALTH & ENVIRONMENT + +Safety, health and environment (SHE) professional representatives from both parties shall endeavor to meet once a year (face to face or via teleconference) to exchange and benchmark on best practices. + +The parties agree to notify each other on SHE related issues that may arise from the use of Products. The parties agree to explore the reuse/recycling of articles, manufacturing trim and scrap Buyer produces from Products purchased from Seller. + +AUDIT + +On request of Buyer, Buyer is allowed to carry out on-site manufacturing and quality audits in manufacturing units where Products are produced. The frequency of such audits shall not exceed one audit per site within three years + +SUPPLY SECURITY + +Buyer is seeking for an increased level of supply security and additional risk mitigation strategies and actions in case of short and long term supply disruptions of Products. + +Seller agrees to enter into discussions and negotiations with Buyer and to take reasonable efforts to enhance such risk mitigation and business continuity strategies. + +COLLABORATION PLANNING AND SUPPLY ASSURANCE, FORECAST + +Buyer and Seller agree to convene once every calendar year to discuss annual Product quantities. Buyer has provided Seller with an annual non- binding forecast for the respective contract year. + +As requested by the Seller, the Buyer will provide a quarterly forecast for the subsequent contract years. Seller will provide Buyer a quarterly overview of the planned production run of each Butyl grade purchased for Buyer. + +Seller shall acknowledge in writing the requested delivery and timing of Products and Volumes. + +Source: WEST PHARMACEUTICAL SERVICES INC, 8-K, 1/16/2020 + + + + + +CHANGE CONTROL + +Changes to the manufacturing process are carefully controlled and are subject to review and formal approval by EMCC/A or other affiliates of Exxon Mobil Corporation prior to implementation. Buyer will be informed at least six months in advance of any change determined by EMCC/A to result in a significant change to the chemical composition or performance of the Product. + +[*****] + +CREDIT + +If Seller/ExxonMobil Selling Affiliates' has reasonable grounds for insecurity with respect to the financial responsibility of Buyer/Buyer Affiliates, Seller/ExxonMobil Selling Affiliates may require advance cash payment or satisfactory security and may withhold Product shipments until receipt of such payment or security. Such action by Seller/ExxonMobil Selling Affiliates shall not constitute a change of payment terms hereunder. If amounts due hereunder are placed with an outside agency for collection, or if suit is brought for collection, or if collected through probate, bankruptcy or other judicial proceedings, then Buyer/Buyer Affiliates shall pay all costs of collection, including attorneys' fees, in addition to all other amounts due. + +SET-OFF AND RECOVERY + +With respect to any monetary amounts and/or product-exchange delivery imbalances due from Buyer/Buyer Affiliates to Seller/ExxonMobil Selling Affiliates, Seller/ExxonMobil Selling Affiliates may (i) set-off such monetary amounts and/or product-exchange delivery imbalances against any monetary amounts and/or product-exchange delivery imbalances owing to Buyer/Buyer Affiliates; and/or (ii) recoup such monetary amounts and/or product-exchange delivery imbalances from any amounts paid and/or deliveries made to Buyer/Buyer Affiliates by Seller/ExxonMobil Selling Affiliates. For purposes hereof, any and all written agreements between Buyer and Seller shall be deemed to be part of an integrated agreement set forth herein. + +ECONOMIC CONDITIONS AND TRENDS CLAUSE + +It is understood and agreed that the basis for this Agreement is an extraordinary level of mutual trust and confidence between the parties, not only in matters of price, quality, and service relating to the quantities of Product purchased and sold hereunder, but also with respect to the accommodation of changes that may develop in the business environment or the pursuit of such mutual undertakings as may benefit either or both of the parties to this Agreement. Moreover, the terms relating to quantity and price presume the continuation of economic conditions and trends now prevailing, including but not limited to levels of industrial production, tire demand, labor rates, energy costs, and foreign exchange relationships. In the event that, in the view of either party, a significant change of any kind does occur which materially and significantly alters the value received by either party in this transaction, that party may, upon written notice of its election and reasons therefor, request that this Agreement be renegotiated and the other party will be obligated to enter into the renegotiation unless the request is formally withdrawn. Neither party shall unreasonably request such renegotiation + +FAILURE IN PERFORMANCE + +Notwithstanding anything to the contrary in Attachments A, G or H, no liability shall result to either party from delay in performance or non- performance of an obligation hereunder (including an obligation to make payment) in whole or in part caused by circumstances reasonably beyond the control of the party affected, including but not limited to, acts of God, terrorist activity, transportation failure, breakdowns, equipment failure, criminal enterprise, sabotage, diminishment, or failure of power, telecommunications, data systems or networks, shortage or inability to obtain Product or raw material for Product, or good-faith compliance with any governmental order or request (whether valid or invalid). Notwithstanding any other notice requirement in this Agreement, actual notice (e.g., phone, email, letter) to a counterparty of a delay or failure described in this provision will constitute effective notice for purposes of this provision. Regardless, however, of the occurrence or nonoccurrence of any such circumstances, if, supplies of Product or distribution logistics for, or feedstock for making Product, from any of Seller's/ExxonMobil Selling Affiliates' existing sources are curtailed or are inadequate to meet Seller's/ExxonMobil Selling Affiliates' own requirements and/or its obligations to its customers, Seller's/ExxonMobil Selling Affiliates' obligation to deliver Product during such period shall be reduced to the extent necessary, in Seller's/ExxonMobil Selling Affiliates' reasonable judgment, to apportion fairly among Seller's/ExxonMobil Selling Affiliates' own requirements and its customers such Product as received and as may be available in the ordinary and usual course of Seller's/ExxonMobil Selling Affiliates' business from any existing sources of supply at the location(s) from which deliveries like those covered hereby are normally shipped. Seller/ExxonMobil Selling + +Source: WEST PHARMACEUTICAL SERVICES INC, 8-K, 1/16/2020 + + + + + +Affiliates shall not be obligated to purchase or obtain Product, or feedstock to make Product, to replace deliveries omitted or curtailed under this paragraph. + +CHANGE IN CIRCUMSTANCES + +Notwithstanding anything to the contrary in Attachments A, G or H, in connection with any Change in Circumstances (as defined below), and without limiting Seller's/ExxonMobil Selling Affiliate's other rights under this Agreement or applicable law, Seller/ExxonMobil Selling Affiliates shall have the right: (i) only if required to enable Seller/ExxonMobil Selling Affiliate to comply with applicable laws and regulations, to terminate this Agreement and accelerate all amounts due from Buyer hereunder, making them immediately payable (ii) to modify the payment terms hereunder; and/or (iii) to require that Buyer/Buyer Affiliates pay in advance for shipments hereunder. + +Promptly after any public announcement regarding any proposed transaction that would result in a Change in Circumstances, Buyer/Buyer Affiliates shall notify Seller/ExxonMobil Selling Affiliates, in writing, of the nature of such transaction, the parties thereto and the proposed date of consummation. If Seller/ExxonMobil Selling Affiliates elects to exercise any of its rights under the preceding paragraph, Seller/ExxonMobil Selling Affiliates shall so notify Buyer/Buyer Affiliates, in writing, within forty-five (45) days after receipt of Buyer's/Buyer Affiliates' notice. + +As used above, "Change in Circumstances" means any of the following: (i) any transaction, or series of transactions, that would result in the transfer of at least twenty-five percent (25%) of the equity interest in Buyer/Buyer Affiliates (or of at least twenty-five percent (25%) of the equity interest in any business entity that owns or controls, directly or indirectly, at least fifty percent (50%) of the equity interest in Buyer/Buyer Affiliates ("Buyer's Parent")) to a single transferee or multiple transferees under common control; (ii) any transaction that would result in Buyer's /Buyer Affiliates' (or Buyer's Parent's) merging with one or more other entities; or (iii) any transaction not in the ordinary course of Buyer's/Buyer Affiliates (or Buyer's Parent's) business that calls for the sale, purchase or other transfer of one or more significant assets, including (without limitation) manufacturing facilities and ownership interests in other business entities. + +WARRANTY DISPUTE RESOLUTION + +Notwithstanding anything to the contrary in Attachments A, G or H, if Buyer/Buyer Affiliates and Seller/ExxonMobil Selling Affiliates are unable to agree on the quality or quantity of Product delivered and received following their internal investigations and good faith efforts to resolve the dispute, the parties shall cooperate to have the Products in dispute analyzed by a mutually selected independent testing laboratory. The results of such laboratory testing shall be final and binding on the parties on the issue of conformance of the Products. If the Products are determined to be conforming, then Buyer/Buyer Affiliates shall bear the cost of such laboratory testing. If the Products are determined not to be conforming, then Seller/ExxonMobil Selling Affiliates shall bear the cost of such laboratory testing. + +US LAW AND REGULATION + +The Parties represent, warrant and undertake to each other on a continuous basis that they shall comply with all applicable anti-bribery and anti- money laundering laws, rules, and regulations of any government, including the U.S. Foreign Corrupt Practices Act, and the applicable country legislation implementing the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions as such laws and regulations may be amended or updated from time to time. + +DATA PRIVACY + +Seller informs Buyer that any information relating to an identified or identifiable natural person ("individual"), in particular business contact details of Buyer's personnel and contractors, which is communicated by or on behalf of Buyer to Seller ("personal data"), will be subject to data processing by Seller. To learn more about the processing of personal data and about individual's rights in relation to the processing, read the Seller data privacy notice at http://www.exxonmobil.be/en-be/company/locations/belgium/legal-information-belgium-only Buyer shall inform its personnel and contractors and other relevant individuals of the Seller data privacy notice. + +USE ACKNOWLEDGEMENT + +In accordance with Section 8 of Attachment A, the "Warranties" section of Attachment G and Section 14 of Attachment H, Seller hereby expressly acknowledges that Buyer has provided notice so Seller that Product(s) purchased hereunder will be used by Buyer in connection with only the following medical applications: + +Source: WEST PHARMACEUTICAL SERVICES INC, 8-K, 1/16/2020 + + + + + +• Elastomeric components for pharmaceutical packaging and containment solutions, including stoppers, seals, plungers, and syringe components. + +TERMINATION + +Notwithstanding anything to the contrary in Attachments A, G or H, neither party can suspend its further performance, terminate this Agreement or require specific performance of the other party of this Agreement in whole or in part as a result of the other party's material breach of the terms and conditions of this Agreement without first providing notice to such party in writing and thirty (30) days' opportunity to cure the material breach (and then only if such party fails to cure such breach). + +TERMS AND CONDITIONS + +The following attachments are made part of this Agreement: + +Attachment A - ExxonMobil Chemical Company and ExxonMobil Chemical Services Americas Inc. General Terms and Conditions of Sale Attachment B - List of ExxonMobil Affiliates/Divisions Attachment C - List of West Pharmaceutical Services Affiliates Attachment D - Notices Attachment E - Payment Terms Attachment F - Returnable Metal Crates Attachment G - ExxonMobil Chemical Asia Pacific - Terms and Conditions of Sale Attachment H - ExxonMobil Chemical Petroleum & Chemical BVBA - Terms and Conditions of Sale + +GOVERNING LAW + +This Agreement shall be governed and construed in accordance with the law set forth in the ExxonMobil Selling Affiliate's general terms and conditions, as applicable. + +BINDING EFFECT + +Seller shall not be obligated by this Agreement unless Buyer executes and returns this Agreement to Seller no later than thirty (30) days from the date Seller signs below. + +ENTIRE AGREEMENT + +This Agreement and its attachments constitute the complete and exclusive statement of the terms of agreement between Seller and Buyer and supersede any and all agreements, representations and understandings, oral and written made prior to signing and relating to the subject matter of this Agreement. In no event shall either party be responsible for any special, punitive, or consequential damages whatsoever. + +No modification of this Agreement shall be of any force or effect unless such modification is in writing, expressly designated as an amendment hereto and signed by the parties' duly authorized representatives; and no modification shall be effected by the acknowledgment or acceptance of purchase order forms containing terms or conditions at variance with those set forth herein. + +None of the parties shall be legally bound by anything contained in this instrument, or any negotiations pursuant thereto, unless and until the companies have agreed to all terms and this instrument has been signed by authorized representatives of each company. + +ORDER OF PRECEDENCE + +In the event of conflict between this Agreement (including the Failure in Performance and Change in Circumstances clauses herein) and the Attachments hereto, this Agreement shall prevail, except with respect to the governing law specified in Attachments A, G and H, respectively, and as applicable to the appropriate ExxonMobil Selling Affiliate. + +Source: WEST PHARMACEUTICAL SERVICES INC, 8-K, 1/16/2020 + + + + + +BUYER SELLER ACCEPTED AND AGREED TO BY BUYER ExxonMobil Chemical Company, a division of DATE OF: Exxon Mobil Corporation January 10, 2020 Date: December 11, 2018 + +/s/ Eric M. Green /s/ Kurt Aerts BY: Eric M. Green BY: Kurt Aerts Title: President and CEO Title: Vice President, SERI + +Source: WEST PHARMACEUTICAL SERVICES INC, 8-K, 1/16/2020 + + + + + +ATTACHMENT A + +West Pharmaceutical Services and ExxonMobil Chemical Company 2019-2023 Global Master Supply Agreement + +ExxonMobil Chemical Company (EMCC) & ExxonMobil Chemical Services Americas Inc. (EMCSA) Standard Terms and Conditions of Sales and Acceptance of Order + +1. PRICE AND QUANTITY; PRICE ADJUSTMENTS Except as otherwise provided in this Agreement, and without regard to any course of dealing between the parties: (1) Seller shall not be obligated to sell or deliver any quantity of product(s) covered hereby ("Product") beyond the amount, if any, which in Seller's sole judgment, is available for such purpose as of the proposed date of shipment to Buyer; (2) the price of Product shall be Seller's price therefor as of the date of shipment; (3) Seller reserves the right to set minimums and/or premiums or to reject orders for unusual configurations, sizes and folds; (4) an overrun or underrun of up to ten percent (10%) shall constitute due performance of any order; (5) any freight allowances shall be those specified by Seller as of the date of shipment; and (6) Buyer shall allow Seller a reasonable period for delivery of shipments of Product. Seller may change any price, freight or payment term hereof upon no less than thirty (30) days' prior written notice; provided, however, that Seller may at any time institute or remove a temporary voluntary allowance of other similar competitive allowance without prior notice. + +2. PAYMENT Unless otherwise specified in Attachment E of the Agreement, Payment for Product shall be made in U.S. Dollars and shall be due, in good funds in Seller's account, no later than thirty (30) days after the date of shipment. With respect to any monetary obligations of Buyer or Buyer's affiliates owed to Seller, Seller may (i) set-off such obligations against any sums owing to Buyer or Buyer's affiliates; and/or (ii) recoup such obligation from any amounts paid to Buyer or Buyer's affiliates by Seller. + +3. TAXES Any tax (except income taxes), excise or other governmental charge that now or in the future may be imposed, increased or levied upon the production, value added, sale, transportation, storage, handling, delivery, use or disposal of Product sold hereunder which Seller may be required to pay, shall be paid by Buyer to Seller in addition to the purchase price. Buyer shall provide Seller, on request, with properly completed exemption certificates for any tax from which Buyer claims exemption. + +4. CREDIT If Seller has reasonable grounds for insecurity with respect to the financial responsibility of Buyer, Seller may require advance cash payment or satisfactory security and may withhold Product shipments until receipt of such payment or security. Such action by Seller shall not constitute a change of payment terms hereunder. If amounts due hereunder are placed with an outside agency for collection, or if suit is brought for collection, or if collected through probate, bankruptcy or other judicial proceedings, then Buyer shall pay all costs of collection, including attorneys' fees, in addition to other amounts due. + +5. SET-OFF AND RECOVERY With respect to any monetary amounts and/or product-exchange delivery imbalances due from Buyer/Buyer Affiliates to Seller/ExxonMobil Selling Affiliates, Seller/ExxonMobil Selling Affiliates may (i) set-off such monetary amounts and/or product-exchange delivery imbalances against any monetary amounts and/or product-exchange delivery imbalances owing to Buyer/Buyer Affiliates; and/or (ii) recoup such monetary amounts and/or product-exchange delivery imbalances from any amounts paid and/or deliveries made to Buyer/Buyer Affiliates by Seller/ExxonMobil Selling Affiliates. For purposes hereof, any and all agreements between Buyer and Seller, whether written or oral, shall be deemed to be part of an integrated agreement set forth herein. + +6. CHANGE IN CIRCUMSTANCES In connection with any Change in Circumstances (as defined below), and without limiting Seller's other rights under this Agreement or applicable law, Seller shall have the right: (i) to terminate this Agreement and accelerate all amounts due from Buyer hereunder, making them immediately payable; (ii) to modify the payment terms hereunder; and/or (iii) to require Buyer to pay in advance for shipments hereunder. + +Promptly after any public announcement regarding any proposed transaction that would result in a Change in Circumstances, Buyer shall notify Seller, in writing, of the nature of such transaction, the parties thereto and the proposed date of consummation. If Seller elects to exercise any of its rights under the preceding paragraph, Seller shall so notify Buyer, in writing, within forty-five (45) days after receipt of Buyer's notice. As used above, "Change in Circumstances" means any of the following: (i) any transaction, or series of transactions, that would result in the transfer of at least twenty-five percent (25%) of the equity interest + +Source: WEST PHARMACEUTICAL SERVICES INC, 8-K, 1/16/2020 + + + + + +in Buyer (or of at least twenty-five percent 25%) of the equity interest in any business entity that owns or controls, directly or indirectly, at least fifty percent (50%) of the equity interest in Buyer ("Buyer's Parent") to a single transferee or multiple transferees under common control; (ii) any transaction that would result in Buyer's (or Buyer's Parent's) merging with one or more other entities; or (iii) any transaction not in the ordinary course of Buyer's (or Buyer's Parent's) business that calls for the sale, purchase or other transfer of one or more significant assets, including (without limitation) manufacturing facilities and ownership interests in other business entities. + +7. TITLE; RISK OF LOSS Title to Product and risk of loss shall pass to Buyer at Seller's facilities upon delivery to a carrier or into Buyer's transport unless otherwise specified in the agreement. + +8. LIMITED WARRANTY AND MEDICAL APPLICATIONS THERE ARE NO WARRANTIES WHICH EXTEND BEYOND THE PRODUCT DESCRIPTION HEREIN, AND SELLER MAKES NO WARRANTY, EXPRESS OR IMPLIED, OF FITNESS FOR PARTICULAR USE, MERCHANTABILITY OR OTHERWISE WITH RESPECT TO PRODUCT, WHETHER USED SINGLY OR IN COMBINATION WITH OTHER SUBSTANCES OR IN ANY PROCESS, EXCEPT THAT PRODUCT SOLD HEREUNDER SHALL CONFORM TO SELLER'S STANDARD SALES SPECIFICATIONS AS OF THE DATE OF SHIPMENT. Without limiting the foregoing, Seller does not recommend nor endorse the use of Product(s) in any medical application and specifically disclaims any representation or warranty, express or implied, of suitability or fitness for use, or otherwise, with respect to Product(s)' use in any medical application. Buyer represents and warrants that no Product(s) purchased hereunder will be used in or resold into any commercial or developmental manner in connection with medical applications without Seller's prior express written acknowledgement. Further, Buyer agrees that it will make no representations, express or implied, to any person to the effect that Seller recommends or endorses the use of Product(s) purchased hereunder in any medical application. + +9. INSPECTION AND LIMITATION OF LIABILITY Buyer shall inspect and test Product delivered hereunder for damage, defect or shortage immediately upon receipt at Buyer's plant or such other location as determined by Buyer and provide Seller notice of any such damage, defect or shortage within ten (10) days of receipt. Any claims for shortages must be supported by certified railroad scale tickets (or similar documents if shipments were not by rail) and Seller shall have an opportunity to have an independent weighing. All claims for any cause whatsoever, whether based in contract, negligence or other tort, strict liability, breach of warranty or otherwise, shall be deemed waived unconditionally and absolutely unless Seller receives written notice of such claim not later than one hundred fifty (150) days after Buyer's receipt of Product as to which such claim is made. Defective or nonconforming Product shall be replaced by Seller without additional charge, or in lieu thereof, at Seller's option, Seller may refund the purchase price upon return of such Product at Seller's expense and such refund or replacement shall constitute Buyer's sole and exclusive remedy. NOTWITHSTANDING THE ABOVE AND REGARDLESS OF THE CIRCUMSTANCES, SELLER'S TOTAL LIABILITY TO BUYER FOR ANY AND ALL CLAIMS, LOSSES OR DAMAGES ARISING OUT OF ANY CAUSE WHATSOEVER, WHETHER BASED IN CONTRACT, NEGLIGENCE OR OTHER TORT, STRICT LIABILITY, BREACH OF WARRANTY OR OTHERWISE, SHALL IN NO EVENT EXCEED THE PURCHASE PRICE OF PRODUCT IN RESPECT TO WHICH SUCH CAUSE AROSE. IN NO EVENT SHALL SELLER BE LIABLE FOR SPECIAL, INCIDENTAL, CONSEQUENTIAL OR EXEMPLARY DAMAGES. Any cause of action that Buyer may have against Seller and which may arise in connection with the transaction(s) specified herein must be commenced within two (2) years after the cause of action has accrued. + +10. SAFETY, HEALTH AND INDEMNITY Seller shall furnish to Buyer Material Safety Data Sheets, including warnings and safety and health information concerning Products and/or the containers therefor. Buyer agrees to disseminate such information so as to give warning of possible hazards to persons who Buyer can reasonably foresee may be exposed to such hazards, including but not limited to Buyer's employees, agents, contractors or customers. Buyer shall instruct its employees, agents, contractors and customers on the safe handling, use, selling, storing, transportation and disposal practices for the Product. IF BUYER FAILS TO DISSEMINATE SUCH WARNINGS AND INFORMATION, BUYER AGREES TO DEFEND AND INDEMNIFY SELLER AGAINST ANY AND ALL LIABILITY ARISING OUT OF OR IN ANY WAY CONNECTED WITH SUCH FAILURE, INCLUDING BUT NOT LIMITED TO LIABILITY FOR INJURY, SICKNESS, DEATH AND PROPERTY DAMAGE; PROVIDED, HOWEVER, THAT IF SELLER IN THIS INSTANCE HAS CONTRIBUTED TO SUCH LIABILITY, BUYER'S INDEMNITY TO SELLER SHALL BE REDUCED BY THE PROPORTION IN WHICH SELLER CONTRIBUTED TO SUCH LIABILITY. Seller will provide Buyer with reasonable notice and opportunity to defend in the event any claim or demand is made on Seller as to which such indemnity relates. + +11. CARS, TRUCKS AND BARGES Buyer shall unload railroad cars, trucks and barges furnished by Seller within the free time specified by tariffs or time periods on file with applicable regulatory bodies, or promptly after receipt if no such tariffs or time periods are on file, and pay any charges + +Source: WEST PHARMACEUTICAL SERVICES INC, 8-K, 1/16/2020 + + + + + +resulting from its failure to do so directly to the common carrier upon receipt of invoice therefor. Buyer shall pay Seller's daily charges for trip-leased tank cars for tank cars held longer than seven (7) days from constructive placement. BUYER ASSUMES FULL RESPONSIBILITY FOR USE AND CONDITION OF CARS, TRUCKS AND BARGES WHILE IN BUYER'S POSSESSION AND AGREES TO (1) COMPENSATE SELLER FOR LOSS OR DAMAGE TO SELLER'S PROPERTY AND (2) INDEMNIFY AND SAVE SELLER HARMLESS FROM ANY LOSS OR DAMAGE TO PROPERTY OTHER THAN SELLER'S AND FROM ANY INJURIES TO PERSONS RELATING IN ANY WAY TO THE USE OF SUCH CAR(S), TRUCK(S) AND BARGE(S) WHILE SUCH ARE IN BUYER'S POSSESSION. Buyer shall report to Seller promptly any damage that may be sustained by the car(s), truck(s) or barge(s) in Buyer's possession. + +12. LEASED TRACKS Seller may elect to provide rail cars of Product to Buyer on leased tracks. If Seller does so, Buyer shall contact Seller to receive shipments of Product from the leased tracks and not request such shipment directly from the railroad. + +13. FAILURE IN PERFORMANCE No liability shall result to either party from delay in performance or non-performance in whole or in part caused by circumstances reasonably beyond the control of the party affected, including but not limited to acts of God, terrorist activity, transportation failure, breakdowns, equipment failure, criminal enterprise, sabotage, diminishment, or failure of power, telecommunications, data systems or networks, shortage or inability to obtain Product or raw material for Product, or good-faith compliance with any governmental order or request (whether valid or invalid). Notwithstanding any other notice requirement in this Agreement, actual notice (e.g., phone, email, letter) to a counterparty of a delay or failure described in this provision will constitute effective notice for purposes of this provision. Regardless, however, of the occurrence or nonoccurrence of any such circumstances, if for any reason supplies of or distribution logistics for Product, or feedstock for making Product, from any of Seller's existing sources are curtailed or are inadequate to meet Seller's own requirements and/or its obligations to its customers, Seller's obligation to deliver Product during such period shall be reduced to the extent necessary, in Seller's sole judgment, to apportion fairly among Seller's own requirements and its customers (whether under contract or not) such Product as received and as may be available in the ordinary and usual course of Seller's business from any existing sources of supply at the location(s) from which deliveries like those covered hereby are normally shipped. Seller shall not be obligated to purchase or obtain Product, or feedstock to make Product, to replace deliveries omitted or curtailed under this paragraph. + +14. INTENTIONALLY OMITTED + +15. EXPORT COMPLIANCE The transaction(s) specified herein, unless otherwise indicated, constitute domestic sales within the United States. For domestic U.S. sales, where Buyer chooses to subsequently export the Product, Buyer shall comply with all applicable laws relating to export controls and economic sanctions, including, but not limited to, those maintained by the US Department of the Treasury (Office of Foreign Assets Controls) and the US Department of Commerce (Bureau of Industry and Security). For U.S. domestic sales, if Buyer elects to export Product, Buyer shall constitute the U.S. Principal Party in Interest or Exporter for all purposes under applicable law. + +16. NON-US BUYERS If Buyer is a natural or legal person of any jurisdiction other than the United States and/or a State thereof, any dispute arising with respect to the transaction(s) specified herein shall be referred to three (3) arbitrators in accordance with the Rules of Arbitration of the International Chamber of Commerce as in effect on the date of such referral. The arbitration shall take place in Houston, Texas, U.S.A. The proceedings shall be in the English language. The American Arbitration Association shall act as appointing authority in the event required. Monetary awards shall be expressed in U.S. Dollars and all awards shall be final and binding on the parties. Judgment upon any award may be entered in any court having jurisdiction. + +17. AMENDMENT; CANCELLATION No modification of this Agreement shall be of any force or effect unless such modification is in writing, expressly designated as an amendment hereto and signed by the parties' duly authorized representatives; and no modification shall be effected by the acknowledgment or acceptance of purchase order forms containing terms or conditions at variance with those set forth herein. Except as explicitly set forth in this Agreement, this Agreement and the transaction(s) specified herein can be cancelled only with both parties' written consent. + +18. GOVERNING LAW AND DISPUTE RESOLUTION The parties' rights and obligations hereunder shall be construed and enforced under the laws of the State of Texas, U.S.A., without regard to conflict of laws principles. Incoterms 2010 (or any subsequent revision thereof) ("Incoterms") shall also apply; provided, however, that Incoterms shall apply only to the extent specified in the agreement hereof, and provided, further, that in the event of a conflict between Incoterms and the laws of the State of Texas, U.S.A., the latter shall govern. The parties specifically exclude + +Source: WEST PHARMACEUTICAL SERVICES INC, 8-K, 1/16/2020 + + + + + +application of the U.N. Convention on Contracts for the International Sale of Goods. For any dispute regarding this Agreement, the Parties agree to exclusive jurisdiction and venue in the district courts of Harris County, Texas, or the United States District Court for the Southern District of Texas (Houston Division). + +19. MISCELLANEOUS No waiver by either party of a right, default or breach of any of the terms and conditions herein shall be effective unless in writing. No such waiver shall be deemed a waiver of any subsequent right, default or breach (whether similar or dissimilar) except as expressly stated therein. + +20. ASSIGNMENT This Agreement shall not be assigned in whole or in part by Buyer or Seller without the written consent of the other party and any attempted assignment without such consent shall be void and of no effect, except that Seller may assign all of its rights and obligations hereunder to any entity of which Exxon Mobil Corporation owns, directly or indirectly, at least fifty percent (50%) of the shares or other indicia of equity having the right to elect such entity's board of directors or other governing body. + +Source: WEST PHARMACEUTICAL SERVICES INC, 8-K, 1/16/2020 + + + + + +ATTACHMENT B + +West Pharmaceutical Services and ExxonMobil Chemical Company 2019-2023 Global Master Supply Agreement + +List of ExxonMobil Affiliates / Divisions + +At its sole discretion and with prior written notice to Buyer, Seller may designate a different selling entity from the ones listed in this Attachment. + +For Product purchases made by Buyer Affiliates in: U.S.A., Brazil, Mexico ExxonMobil Chemical Company, a division of Exxon Mobil Corporation ("EMCC") and/or ExxonMobil Chemical Services Americas, Inc. 22777 Springwoods Village Pkwy Spring, TX 77389 + +For Product purchases made by Buyer Affiliates i n: Denmark, France, Germany, United Kingdom, Serbia and Ireland ExxonMobil Petroleum & Chemical BVBA (EMPC) Polderdijkweg B - 2030 Antwerpen, Belgium + +For Product purchases made by Buyer Affiliates i n: Singapore, China, India ExxonMobil Affiliate: ExxonMobil Chemical Asia Pacific, a division of ExxonMobil Asia Pacific Pte Ltd (EMCAP) 1 Harbour Front Place #06-00HarbourFront Tower One Singapore 098633 + +Source: WEST PHARMACEUTICAL SERVICES INC, 8-K, 1/16/2020 + + + + + +ATTACHMENT C + +West Pharmaceutical Services and ExxonMobil Chemical Company 2019-2023 Global Master Supply Agreement List of West Pharmaceutical Affiliates + +Buyer may update this list from time to time with written notice to Seller. + +Brazil West Pharmaceutical Services Brasil Ltda AV Nossa Senhora Das Gracas, 115 Diadema, Sao Paulo, Brazil 09980-000 + +China West Pharmaceutical Packaging (China) Co., Ltd No. 111 Tianchen Road Qingpu, Shanghai 201707 China + +Denmark West Pharmaceutical Services Denmark A/S Fuglevangsvej 51 Horsens, Denmark + +France West Pharmaceutical Services France,S.A. 38, Rue Robert Degon Le Nouvion EN Thierache 02170 + +Germany West Pharmaceutical Services Deutschland GmbH & Co. KG Stalberger Str. 21-41 Eschweiler 52249 + +Ireland West Pharmaceutical Products Ireland, Ltd. Carrickpherish Road Waterford, X91 R9V6 + +India West Pharmaceutical Packaging India Pvt. Ltd. 900 Peepul Boulevard-Sector 36-Sri City-Satyavedu (P.O) Chittoor District - A.P. - India - 517 546 + +Mexico West Pharmaceutical Services Mexico, S.A. de C.V. Calle 40 Sur No. 706, Esq. 36 Este Civac, Jiutepec Morelos - MéxicoC. P. 62500 + +Serbia West Pharmaceutical Services Beograd d.o.o. Kovin Crvenka 76 Kovin 26220, Serbia + +Source: WEST PHARMACEUTICAL SERVICES INC, 8-K, 1/16/2020 + + + + + +Singapore West Pharmaceutical Services Singapore Pte. Ltd. 15 Joo Koon Circle Jurong, Singapore 629046 + +U.S.A West Pharmaceutical Services, Inc. 530 Herman O. West Drive Exton, PA 19341-1147 + +West Pharmaceutical Services, Inc. 1028 Innovation Way Kinston, NC 28504-7616 + +West Pharmaceutical Services, Inc. 923 West Railroad Street Kearney, NE 68845-5128 + +West Pharmaceutical Services of Florida, Inc. 5111 Park Street North St. Petersburg, FL 33709-1109 + +West Pharmaceutical Services, Inc. 347 Oliver Street Jersey Shore, PA 17740-1923 + +Source: WEST PHARMACEUTICAL SERVICES INC, 8-K, 1/16/2020 + + + + + +ATTACHMENT D West Pharmaceutical Services and ExxonMobil Chemical Company 2019-2023 Global Supply Master Agreement + +Notices + +For all notices, communications, or questions regarding this Contract, the following addresses listed below shall be used; provided, however, that Seller and Buyer can each change any of its address information by providing written notice to the other party. + +ExxonMobil Chemical Company West Pharmaceutical Services, Inc. 22777 Springwoods Village Pkwy 530 W. Herman O. Drive Spring, TX 77389 Exton, PA 19341-1147 + +Attn: Gerd Merhof Attn: Oliver Steven ExxonMobil Chemical Central Europe West Pharmaceutical Services Deutschland GmbH & Co. KG Im Mediapark 2 Kiefernweg 5 50670 Köln 52249 Eschweiler Germany Germany + +Source: WEST PHARMACEUTICAL SERVICES INC, 8-K, 1/16/2020 + + + + + +ATTACHMENT E + +West Pharmaceutical Services and ExxonMobil Chemical Company 2019-2023 Global Supply Master Agreement + +Payment Terms + +Buyer Affiliates shall pay ExxonMobil Selling Affiliates' invoice(s) in full within the days set forth below: + +Location Payment Terms Delivery Terms - lncoterms 2010 Brazil [*****] [*****] China [*****] [*****] Denmark [*****] [*****] France [*****] [*****] Germany [*****] [*****] India [*****] [*****] Mexico [*****] [*****] Serbia [*****] [*****] Singapore [*****] [*****] U.S.A. [*****] [*****] Ireland [*****] [*****] + +* For Product sold and/or sourced from the US that is shipped overseas to a non-US location, title and risk of loss of Product shall transfer from ExxonMobil Chemical Company or any other ExxonMobil Seller to Buyer at the first point upon which the delivering marine vessel crosses the outer boundary of the United States Exclusive Economic Zone (EEZ). The EEZ extends 200 nautical miles beyond the coastal baseline defined in the United Nations Convention on the Law of the Sea. + +For U.S. sales to Brazil or Mexico, Seller shall constitute the U.S. Principal Party in interest or Exporter for all purposes under applicable law. + +Source: WEST PHARMACEUTICAL SERVICES INC, 8-K, 1/16/2020 + + + + + +ATTACHMENT F + +West Pharmaceutical Services and ExxonMobil Chemical Company 2019-2023 Global Supply Master Agreement + +Returnable Metal Crates + +Attachment F documents Buyer's/Buyer Affiliates' responsibility for returnable metal crates ("Metal Crates") used in the supply of Butyl products from Seller/ExxonMobil Selling Affiliates ("ExxonMobil"). Buyer/Buyer Affiliates wishes to receive Butyl in Metal Crates and ExxonMobil is willing to supply Butyl in Metal Crates, subject to the following agreement. + +Agreement + +Buyer/Buyer Affiliates is responsible for the Metal Crates in their custody at the replacement value of the Metal Crates. Buyer's /Buyer Affiliates' custody begins when Metal Crates are loaded onto the delivering carrier at the ExxonMobil or third party warehouse and ends when Metal Crates are loaded onto the carrier for return to Global Pallet Services Limited (GPS) USA, Inc. + +Buyer/Buyer Affiliates must implement a system to ensure Metal Crates are not lost or damaged, and are returned in undamaged condition (normal wear and tear excepted). Buyer/Buyer Affiliates will supply to ExxonMobil upon request copies of any Bills of Lading needed to verify return shipments of Metal Crates. + +For each Metal Crate not received back at Global Pallet Services Limited (GPS) and where a physical inventory determines that such Metal Crate is not in the custody of Buyer/Buyer Affiliates, Buyer/Affiliates will have 30 days from end of the calendar year to reimburse ExxonMobil as stated below. + +For the purposes of this agreement, a Metal Crate is considered to be in undamaged condition if the base and all four sides are in working condition. Buyer/Buyer Affiliates agrees to pay for all repairs for damage to any Metal Crate, or to pay the replacement charge of $[*****] per Metal Crate for any Metal Crate that is either permanently lost or damaged beyond repair while in the custody of Buyer/Buyer Affiliates, and a replacement charge ($[*****] per door) for any removable door missing from Metal Crates collected at Buyer's /Buyer Affiliates' location. A Metal Crate shall be deemed to have been damaged beyond repair if the documented repair costs to restore the damaged Metal Crate to fit-for-fill condition would exceed $[*****]. In addition, if any of the charges imposed by Global Pallet Services Limited (GPS) under the agreement between the ExxonMobil and Global Pallet Service Limited (GPS) for damage to or loss of Metal Crates, are revised, the aforesaid amount reimbursable by Buyer/Buyer Affiliates shall automatically be revised in similar manner. + +Source: WEST PHARMACEUTICAL SERVICES INC, 8-K, 1/16/2020 + + + + + +ATTACHMENT G + +The West Pharmaceutical Services and ExxonMobil Chemical Company/Affiliates 2019-2023 Global Master Supply Agreement + +EMCAP STANDARD TERMS AND CONDITIONS OF SALE AND ACCEPTANCE OF ORDER + +ACCEPTANCE The acceptance of Buyer's order by Seller is expressly made conditional upon Buyer's assent to these Standard Terms and Conditions of Sale. Terms as specified in Seller's Order Confirmation (if any) and these Standard Terms and Conditions shall constitute the only binding contract terms and conditions between the parties (the "Agreement") in the absence of a written agreement as described in the Clause on Written Agreement. + +WRITTEN AGREEMENT If there is an executed written sales contract or agreement in effect between Buyer and Seller covering Buyer's order, the terms and conditions of that contract or agreement shall prevail over any conflicting term in Seller's Order Confirmation and/or these Standard Terms and Conditions and/or Buyer's purchase order. + +PRICE ADJUSTMENT [*****] Buyer's failure to deliver to Seller written objection to any such change at least ten (10) days before its effective date shall constitute acceptance. If Buyer does deliver such objections within the deadline, no delivery shall be made until parties agree on the new price, freight and/or payment terms. + +[*****] + +QUANTITY Quantity of all shipments shall be determined by Seller and shall have a shipping allowance of plus or minus five percent (+/-5%) of the quantity indicated in Seller's Order Confirmation or separate sales contract, or such other percentage as determined by Seller. To allow for standard tolerances of scales, Seller will not consider any claims for shortages of less than one half of one percent (0.5%) of the gross weight of any shipment of packaged product or less than one half of one percent (0.5%) of the net weight of bulk shipment. Seller shall have the right at all times to appoint an independent surveyor. + +TAXES All prices are exclusive of taxes, duties, or other governmental charges levied on or in respect of the product or delivery thereof. Buyer shall pay or reimburse Seller for such taxes, duties or charges. + +RISK AND TITLE TRANSFER Risk of loss of and damage to product shall pass to Buyer in accordance with the Incoterm specified in Seller's Order Confirmation or separate sales contract. Without negating Seller's warranty obligations hereunder, Buyer assumes all risk and liability for loss, damage, or injury to the person or property of Buyer or other parties arising out of the use or possession of any Product sold hereunder. Unless stated otherwise in Seller's Order Confirmation or separate sales contract, title in product shall pass to Buyer simultaneously with risk of loss of and damage to product. However, if the product is shipped by Seller from the US, such title and risk shall pass to Buyer at the first point at which the delivering vessel crosses the outer boundary of the US Exclusive Economic Zone (EEZ). The EEZ extends 200 nautical miles beyond the coastal baseline defined in the United Nations Convention on the Law of the Sea or as such term is used in the said Convention. + +WARRANTIES There are no warranties which extend beyond the description on the face hereof, and Seller makes no warranty, expressed or implied, of satisfactory quality, merchantability, fitness for any particular use or otherwise, except that the products sold hereunder shall meet Seller's applicable standard specifications or such other specifications as may be notified by Seller to Buyer from time to time. Buyer assumes all risk whatsoever as a result of the use of the products purchased, whether used singly or in combination with other substances or in any process. + +Without limiting the foregoing, Seller does not recommend nor endorse the use of product in any medical application and specifically disclaims any representation or warranty, express or implied, of suitability or fitness for use, or otherwise with respect to product's use in any medical application. Buyer represents and warrants that no product purchased hereunder will be + +Source: WEST PHARMACEUTICAL SERVICES INC, 8-K, 1/16/2020 + + + + + +used or resold for use in any commercial or developmental manner in connection with medical applications without Seller's prior express written acknowledgment. Further, Buyer agrees that it will make no representations, express or implied, to any person to the effect that Seller recommends or endorses the use of product purchased hereunder in any medical application. + +LIMITATION OF CLAIMS Seller's total liability for all claims arising hereunder or connected with the products sold hereunder, whether based in contract, tort or otherwise, shall be no greater than an amount equal to the purchase price of the products to which any such claims relate, or at the Seller's option, and only in the case of claims regarding defective or non-conforming product, to replacement of such products, provided that in all cases Buyer shall be under an obligation to mitigate any loss as far as possible. Seller shall not in any event be liable for any special, incidental, exemplary or consequential damages. + +Subject to the Clauses on Quantity, Transfer of Risk and Title Transfer, Buyer shall inspect and test product delivered hereunder for damage, defect or shortage immediately upon receipt and provide Seller notice of any such damage, defect or shortage within ten (10) days of receipt. Any claim must be accompanied by documents as required by Seller, including but not limited to a certified weigh scale ticket or an independent surveyor report, and Seller shall have an opportunity to an independent assessment. All claims for any cause whatsoever, whether based in contract, negligence or other tort, strict liability, breach of warranty or otherwise, shall be deemed waived unconditionally and absolutely unless Seller receives complete written details of such claim not later than [*****] after Buyer's receipt of product as to which such claim is made. Receipt will be deemed to have taken place for purposes of this subparagraph when the product has been loaded onto Buyer's transport, or offloaded from the vessel or other means of transport on which delivery has been made when delivery is arranged by Seller. LAYTIME AND DEMURRAGE Buyer shall unload tank containers, cars, trucks and barges furnished by Seller and clear products from port, or at delivery destination, within the free time specified by tariffs or time periods on file with applicable bodies, or promptly after receipt if no such tariffs or time periods are on file. Buyer shall pay charges resulting from its failure to do to Seller or directly to the common carrier upon receipt of invoice. + +For bulk marine shipment, demurrage charge at load port is for account of Seller and at discharge port for Buyer's account. For sales other than FOB sales, laytime allowed, demurrage rate and applicable charter party terms shall be as specified in Seller's vessel nomination to Buyer failing which, the terms in Seller's contract of affreightment with the vessel owner shall apply and Buyer shall pay Seller or the carrier the demurrage incurred at the discharge port by Seller's stipulated deadline. Subject to the foregoing, for the first discharge terminal, laytime shall commence six (6) hours after the vessel's notice of readiness is tendered to Buyer (or its agent) or upon the vessel being all fast to the discharge terminal, whichever occurs first, and for subsequent discharge terminal(s), laytime shall commence immediately when the vessel's notice of readiness is tendered to Buyer (or its agent). Laytime shall cease upon disconnection of all cargo hoses upon completion of discharge. For FOB sales, vessels nominated by Buyer are subject to Seller's screening, inspection and acceptance process and Seller's agreement to loading-date range duration / loading-date range narrowing profile / loading-date range communication leadtime and other shipping logistics, and any claim for demurrage by Buyer shall be waived unless notice in writing of such claim is received by Seller with full supporting documentation (including the invoice and time sheet issued by the vessel) by Seller's stipulated deadline. + +FAILURE IN PERFORMANCE Failure by Seller to deliver on a specific date shall not entitle Buyer to repudiate this Agreement. Buyer shall not be relieved of any obligations to accept or pay for products by reason of any delay in delivery or dispatch. Furthermore, no liability shall result to either party for delay in performance or non-performance of an obligation hereunder (except an obligation to make payment) in whole or in part caused by circumstances reasonably beyond the control of the party affected, including but not limited to acts of God, terrorist activity, transportation failure, breakdowns, equipment failure, shortage or inability to obtain product or raw material for product, or good-faith compliance with any governmental order or request (whether valid or invalid) . Regardless, however, of the occurrence or nonoccurrence of any such circumstances, if for any reason supplies of product or feedstock for making product, from any of Seller's existing sources are curtailed or are inadequate to meet Seller's own requirement and/or its obligation to its customers, Seller's obligation to deliver product during such period shall be reduced to the extent necessary, in Seller's sole judgment, to apportion fairly among Seller's own requirements and its customers (whether under contract or not) such products as received and as may be available in the ordinary and usual course of Seller's business from any existing sources of supply at the location(s) from which deliveries like those covered hereby are normally shipped. Seller shall not be obligated to purchase or obtain product, or feedstock to make product, to replace deliveries omitted or curtailed under this Paragraph. + +MODIFICATION AND AMENDMENTS There are no oral understandings, representations or warranties between the parties that conflict with these Standard Terms and + +Source: WEST PHARMACEUTICAL SERVICES INC, 8-K, 1/16/2020 + + + + + +Conditions or the details of price, payment, shipment or delivery schedule as communicated by Seller. No modification of any Standard Terms and Conditions shall be of any force or effect unless such modification is in writing and signed by the party to be bound thereby, and no modification of the same shall be effected by the acknowledgement of Buyer's purchase orders or equivalent forms containing terms and conditions at variance with those set forth herein and all such terms or conditions in Buyer's purchase orders or equivalent forms shall be considered null and void. + +GOVERNING LAW This Agreement shall be governed by Singapore law, without regard to its conflict of laws principles. Parties agree to exclude the application of the United Nations Convention on Contracts for the International Sale of Goods. A party that is not a party to this Agreement shall have no rights under the Contracts (Rights of Third Parties) Act (Cap 53B) to enforce any of the terms in this Agreement. + +ASSIGNMENT This Agreement shall not be assigned, in whole or in part, by either party without the prior consent of the other party, but shall be binding upon and shall inure to the benefit of the legal successors of the respective parties hereto; except that Seller may assign this Agreement, in whole or in part, to any affiliate. For purposes of this Clause, an "affiliate" of Seller means the ultimate holding company of Seller or any corporation of which fifty percent (50%) or more of the outstanding stock is held directly or indirectly by such ultimate holding company. + +DEFINITION To the extent not inconsistent with the terms hereof, Incoterms 2010 ("Incoterms") shall apply hereto. + +NO WAIVER No waiver by either party of any breach of these Standard Terms and Conditions shall be construed as a waiver of any succeeding breach of the same. + +CREDIT CLAUSE If Buyer fails to make payment when due or if Seller reasonably believes the financial status of Buyer is impaired due to any reason, Seller shall have the right, without prejudice to its other rights in contract or at law, upon notice to Buyer, to withhold further deliveries of product, modify or change any terms of payment or credit, suspend performance under this Agreement, accelerate payment obligations such that all amounts owed under prior deliveries and not paid shall become immediately due and payable, require Buyer to furnish security as deemed appropriate by Seller and/or exercise rights against any collateral and apply the proceeds against amounts due and owing. Seller shall in any event have the right to set- off any claim that Seller (or its affiliate) may have against Buyer (or its affiliate), against any sum which Seller may owe to Buyer (or its affiliate). + +In the event Seller requires a documentary letter of credit or a standby letter of credit, such letter of credit shall be issued by an international bank in form and substance acceptable to Seller. A clean letter of credit is to be received by Seller prior to the estimated shipment date or by such date as Seller shall agree. Seller shall have no obligation to deliver product if the letter of credit is not so received by Seller. + +Without prejudice to Seller's other rights in law and contract, it is agreed that Buyer shall indemnify and hold harmless the Seller from and against any dead-freight, vessel and/or port charges and payments, demurrage and/or any damages, losses or expenses incurred as a result of any delay in loading or non-delivery of any product under this Agreement arising from Buyer's failure or delay in providing the letter of credit in accordance with the terms of this Agreement. + +BUSINESS PRACTICES (a) Business Standards. Each party to this Agreement shall establish precautions to prevent its employees or subcontractors from making, receiving, providing or offering any substantial gifts, extravagant entertainment, payments, loans, or other considerations to the employees of the other party and/or their families and/or third parties in connection with this Agreement. + +(b) Compliance With Law. Each party agrees and will secure agreement by its subcontractors to comply with all applicable laws, regulations, decrees and judicial orders. Notwithstanding anything in this Agreement to the contrary, no provision shall be interpreted or applied so as to require any party to do, or refrain from doing, anything which would constitute a violation of, or result in a loss of economic benefit under, United States anti-boycott and other export laws and regulations. Each party represents to the other party that it shall not make any improper payments of money or anything of value to a government official (whether appointed, elected, honorary, or a career government employee) in connection with this Agreement, nor shall it make improper payments to a third party knowing or suspecting that the third party will give the payment, or a portion of it, to a government official. + +Source: WEST PHARMACEUTICAL SERVICES INC, 8-K, 1/16/2020 + + + + + +(c) Notice of Non-Compliance. Each party ("the Relevant Party") agrees to notify the other party promptly upon discovery of any instance where the Relevant Party fails to comply with this Clause. If either party discovers or is advised of any errors or exceptions related to its invoicing under this Agreement, both parties will together review the nature of the errors or exceptions, and will, if appropriate, promptly take corrective action that is necessary on its part and adjust the relevant invoice or refund overpayments. + +Source: WEST PHARMACEUTICAL SERVICES INC, 8-K, 1/16/2020 + + + + + +ATTACHMENT H The West Pharmaceutical Services and ExxonMobil Chemical Company/Affiliates 2019-2023 Global Master Supply Agreement + +EMPC STANDARD TERMS AND CONDITIONS OF SALE (hereafter referred to as "EM") + +1. Agreement(s) as used herein shall mean any order confirmation issued by EM or any other contractual arrangement between EM and Buyer. These general terms and conditions shall apply to and form part of all Agreements. The Agreement constitutes the complete and entire understanding and agreement between EM and Buyer. No other general terms and conditions will have an effect on the Agreement. Deviations from the Agreement, including these general terms and conditions, shall be valid only if expressly agreed in writing by the parties. + +2. Title to the product shall transfer from EM to Buyer simultaneously with the transfer of risks as per Incoterms. All references to Incoterms shall mean ICC Incoterms 2010. + +3. EM will use reasonable efforts to meet the planned delivery date which shall be deemed to be only approximate. + +4. If Buyer is responsible for the transport of products, Buyer shall ensure that the means of transport is clean and dry, suitable for loading and carrying the products, and complies with the safety standards of EM and with the legal standards for such means of transport. In case of non- or incomplete compliance with the above requirements, EM will be entitled not to load or cause to load this means of transportation, without any obligation to compensation. + +5. If delivery takes place on reusable pallets (regardless of whether they are property of EM), Buyer will maintain these pallets in good condition and make them available on request for collection by or on behalf of EM. + +6. EM's determination of quantity and quality shall be binding for both parties. Without prejudice to the foregoing, Buyer has the right to have a representative present at said determination, at his own cost. + +7. Products shall be supplied by EM at the price valid on the planned delivery date. + +8. Prices are exclusive of taxes (such as VAT), duties or other governmental charges. In addition to the price of the product, EM shall have the right to charge any taxes, duties or other governmental charges that now or in the future may be levied, in connection with the manufacture, sale, transportation, storage, handling, delivery, use, possession of or disposal of the product or raw materials used in it. VAT and excise tax exemptions granted on request of Buyer in accordance with legislation or administrative regulations imposed by any lawful authority, shall be the exclusive responsibility of Buyer who shall indemnify EM in respect of any VAT or excise Tax liabilities arising therefrom. + +9. EM will invoice Buyer and Buyer will pay the invoice in the currency stated on the invoice, without any discount, deduction or set off, so that EM's designated bank account is credited with the full invoiced amount within 30 days from the invoice date. + +10. Failure by Buyer to pay on the due date shall make all sums owing by Buyer to EM on any account whatsoever immediately and automatically due and payable, without prejudice to EM's right to charge automatically and without giving any notice the statutory late payment interest rate as defined in applicable legislation on combating late payment in commercial transactions. + +11. EM and any of its Affiliates (as herein defined) may at any time without giving notice to or making demand upon Buyer, set off and apply any and all sums at any time owing by EM and/or by any of its Affiliates to Buyer or any of Buyer's Affiliates, against any and all sums owing by Buyer or any of Buyer's Affiliates to EM and/or to any of its Affiliates. An Affiliate is (1) for EM: Exxon Mobil Corporation or any company in which Exxon Mobil Corporation owns or controls, directly or indirectly, 50 % or more of the voting stock and (2) for the Buyer: any company in which its ultimate holding company owns or controls, directly or indirectly, 50 % or more of the voting stock. + +12. If one party has objective reasons to conclude that the financial status of the other party becomes impaired or unsatisfactory, or in case of late payment, it may require the other party to provide adequate securities, including cash in advance, for the timely payment of future deliveries, absent which it may suspend its supply obligations. + +Source: WEST PHARMACEUTICAL SERVICES INC, 8-K, 1/16/2020 + + + + + +13. Health and safety information relating to handling and use of products are in the Safety Data Sheets (SDS) that EM has sent or will send to Buyer. Buyer shall notify EM if Buyer has not received such information by the delivery date. EM will assume that Buyer has received the necessary information absent notification from Buyer. Buyer shall provide such health and safety information to anyone including without limitation its employees, contractors, agents or customers who may be exposed to the product. Buyer warrants that it possesses the necessary expertise for handling products of the type being supplied hereunder and that it will take the steps necessary to review and understand that information contained on the SDS for each product it purchases. Such data and statements are offered only for Buyer's and its users' and customers' considerations, investigation and verification. + +14. EM gives no guarantees or warranties, express or implied, as to the quality, merchantability, fitness for purpose or suitability of the products except that the product sold pursuant to the terms of this Agreement shall meet the relevant EM standard specification in force at the time of loading or such other specification or requirement which may be explicitly agreed in writing between the parties. Without limiting the foregoing, EM does not recommend nor endorse the use of product(s) in any medical application and specifically disclaims any representation or warranty, express or implied, of suitability or fitness for use, or otherwise with respect to product(s)' use in any medical application. Buyer represents and warrants that no product(s) purchased hereunder will be used in or resold into any commercial or developmental manner in connection with medical applications without EM's prior express written acknowledgement. Further, Buyer agrees that it will make no representations, express or implied, to any person to the effect that EM recommends or endorses the use of product(s) purchased hereunder in any medical application. EM's maximum liability for all claims for any reason is the sales price of the product involved and EM shall not be liable for indirect or consequential damage. Claims by Buyer are waived unless made in writing within 150 days from date of (non-) delivery. Buyer shall indemnity and hold EM harmless in respect of all claims for which Buyer is liable. + +15. EM makes no representation or warranty of any kind, express or implied, that the products sold hereunder, or the use of such products, or articles made therefrom, either alone or in conjunction with other materials, will not infringe any patent or trademark rights. Buyer agrees that it will promptly notify EM of any claim or suit involving Buyer in which patent or trademark infringement is alleged with respect to the products sold hereunder, and that Buyer will permit EM, at its option and expense, to control completely the defence or settlement of any such allegation of infringement. + +16. Neither party shall be liable for any delay in performance or non-performance in whole or in part caused by circumstances beyond the reasonable control of the party affected including but not limited to, acts of God, fire, flood, war, terrorist activity, or the threat of one of these events, criminal acts or sabotage, diminishment or failure of power, telecommunications, data systems or networks, accident, explosion, equipment breakdowns, labour disputes, shortage or inability to obtain energy, utilities, equipment, transportation, the Product, or the feedstock from which the Product is directly or indirectly derived; or good faith compliance with any regulation, direction r request (whether ultimately determined to be valid or invalid) made by governmental authority or any person or persons purporting to act for such an authority. + +Regardless of the occurrence or non-occurrence of any of the circumstances set forth above, if for any reason, supplies of or distribution logistics of the Product deliverable under this Agreement or of the feedstock from which the Product is directly or indirectly derived from any of EM's then existing sources of supply are curtailed or cut off, or otherwise inadequate to meet EM's own requirements and its obligations to its customers, EM shall have the option during such period of curtailment, or cessation to apportion fairly among its customers including EM's Affiliates and whether under contract or not, such Product as may be received in the ordinary course of business or manufactured at EM then existing sources. + +EM shall not be obliged to purchase or otherwise obtain alternative supplies of product deliverable under this Agreement, or the feedstock from which product directly or indirectly is derived. Nor shall EM be obliged to settle labour disputes, run down inventories below normal levels, adapt or vary its manufacturing plan except at its own sole discretion, or to take any steps other than in accordance with good business practice to make up inadequate supplies or to replace the supplies so curtailed or cut off. EM shall not be obliged to make up deliveries omitted or curtailed under this Agreement. Any such deficiencies in deliveries shall be cancelled with no liability to either party, it being agreed, however, that a force majeure situation hereunder shall not entitle either party to cancel this Agreement. + +17. In case of any material breach of the terms and conditions contained in the Agreement by one of the parties, the other party may, without giving prior written notice in the event the material breach is not cured within such notice period or without undertaking any recourse to legal proceedings, suspend its further performance, terminate the Agreement or require specific performance by the other party of the Agreement in whole or in part, without prejudice to its right to damages for any losses incurred subject to Article 14. + +18. Neither party may assign this Agreement without the written consent of the other party save in the case where such assignment is to an EM Affiliate and prior written notice has been given to the Buyer. + +Source: WEST PHARMACEUTICAL SERVICES INC, 8-K, 1/16/2020 + + + + + +19. EM informs Buyer that any information relating to an identified or identifiable natural person ("individual"), in particular business contact details of Buyer's personnel and contractors, which is communicated by or on behalf of Buyer to EM ("personal data"), will be subject to data processing by EM. To learn more about the processing of personal data and about individual's rights in relation to the processing, read the EM data privacy notice at http://www.exxonmobil.be/enbe/company/locations/belgium/legal-information-belgium-only Buyer shall inform its personnel and contractors and other relevant individuals of the EM data privacy notice. + +20. Notwithstanding any other provision in this Agreement or any other document, neither this Agreement nor any other document shall constitute an agreement by EM to take any action or refrain from taking any action that is in conflict with, penalized under or compliance with which is prohibited by the laws or regulations of the United States, the European Union (EU), any EU member State, the United Kingdom and/or Norway, as applicable. The parties furthermore represent, warrant and undertake to each other on a continuous basis that they shall comply with all applicable anti-bribery and anti-money laundering laws, rules and regulations of any government relevant to the transaction, including the US Foreign Corrupt Practices Act and the applicable country legislation implementing OECD Convention on Combating Bribery of Foreign Public Officials in international business transactions as such laws and regulations may be updated or amended from time to time. + +21. To the extent permitted by law, in the event that a party becomes aware that it will or may undergo a Change of Control ("Affected Party") within the following three (3) Months, the Affected Party will notify the other party without delay after it becomes so aware. Together with such notification, the Affected Party will supply the other party with sufficient information to allow that other party to reasonably assess the impact that such Change of Control may have on it and/or its Affiliates, on the Affected Party's creditworthiness, and on the Affected Party's ability to perform its obligations under this Agreement. In the event that the other party concludes in its sole discretion that such Change of Control, if it is implemented: (a) may result in it and/or its Affiliates being subjected to any fact, matter, event, circumstance, condition or change which materially and adversely affects, or could reasonably be expected to materially and adversely affect, individually or in aggregate, the business, operations, assets, liabilities, condition (whether financial, trading or otherwise), prospects or operating results of it and/or its Affiliates; (b) that the Affected Party's creditworthiness may be reduced; and/or (c) that the Affected Party's ability to perform its obligations under the Agreement may be negatively affected; + +then the other party may (but is not obliged to) terminate this Agreement forthwith upon notice to the Affected Party. Such termination is without prejudice to the rights and obligations of the parties that have accrued up to and including the date of termination. As used above, "Change of Control" means any of the following: (i) any transaction, or series of transactions, that would result in the transfer of at least fifty percent (50%) of the equity interest in a party (or of at least fifty percent (50%) of the equity interest in any business entity that owns or controls, directly or indirectly, at least fifty percent (50%) of the equity interest in a party ("Party's Parent")) to a single transferee or multiple transferees under common control; (ii) any transaction that would result in a Party's (or Party's Parent's) merging with one or more other entities. + +22. This Agreement between EM and Buyer shall be governed by the laws of Belgium (excluding its rules on conflict of laws). Neither the Uniform Law on the International Sale of Goods ('ULIS'), nor the United Nations Convention on Contracts for the International Sale of Goods 1980 ('CISG') shall apply. (i) If Buyer's registered office is located within the territory of the European Economic Area ('EEA'), any disputes between EM and Buyer arising out of or in relation to this Agreement shall be of the exclusive jurisdiction of the Courts of Antwerp. (ii) If Buyer's registered office is located outside the territory of the EEA, any disputes arising out of or in relation to this Agreement shall be finally settled under the CEPANI Rules of Arbitration by three (3) arbitrators appointed in accordance with said Rules. The seat of the arbitration shall be Brussels. The arbitration shall be conducted in the English language. ________________________________ * Further information on ExxonMobil Petroleum & Chemical BVBA is available on: http://www.exxonmobil.be/en-be/company/locations/belgium/legal-information-belgium-only + +Source: WEST PHARMACEUTICAL SERVICES INC, 8-K, 1/16/2020 \ No newline at end of file diff --git a/full_contract_txt/XACCT Technologies, Inc.SUPPORT AND MAINTENANCE AGREEMENT.txt b/full_contract_txt/XACCT Technologies, Inc.SUPPORT AND MAINTENANCE AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..5ff078c6bd40d07aa71bc95f3fac3f3b1fe3e5d8 --- /dev/null +++ b/full_contract_txt/XACCT Technologies, Inc.SUPPORT AND MAINTENANCE AGREEMENT.txt @@ -0,0 +1,113 @@ +EXHIBIT 10.16 + +DRAFT (Americas) 1/12/00 (Rev 1) SUPPORT AND MAINTENANCE AGREEMENT + + This Support and Maintenance Agreement ("Agreement") is entered into and is effective as of the ____ day of _______________2000 (the "Effective Date") by and between XACCT Technologies, Inc., a Delaware corporation ("XACCT") with its principal place of business at 2900 Lakeside Drive, Suite 100, Santa Clara, California 95054 and ________________________________, a _______________corporation ("Licensee") with its principal place of business at _________________________________. + +This Agreement sets forth the terms and conditions under which XACCT will provide Product Maintenance (as defined below) and Support Services (as defined below) for the Product which is licensed by Licensee pursuant to XACCT's End User Software License Agreement ("License Agreement"). Except where superseded by this Agreement, all other terms and conditions of the License Agreement are incorporated by reference. Capitalized terms that are not defined in Section 1. below or elsewhere in this Agreement have the same meaning as in the License Agreement. + +1. DEFINITIONS + +1.1 "Designated Support Contact " means Licensee's employee who is authorized to contact the XACCT support center. + +1.2 "Incident" means a single, discrete, malfunction or other problem which may require more than one (1) response before it is closed. + +1.3 "Major Release" means a version of the Product containing significant changes in functionality which usually will be designated with a whole number product version change such as 3.x to 4.x. + +1.4 "Minor Release" means a version of the Product containing minor improvements which usually will be designated with a one (1) decimal version change such as 3.x to 3.x; also sometimes referred to as "dot releases." + +1.5 "Product Maintenance" means the Product updates and revisions that are available from XACCT and selected by Licensee, as further referenced herein and the attachments hereto as may be amended from time to time. + +1.6 "Support Services" means the software support services that are available from XACCT and selected by Licensee, as further referenced herein and the attachments hereto as may be amended from time to time. + +2. COVERAGE AND PAYMENT OF FEES + + Licensee may purchase the level of Product Maintenance and Support Services set forth in Attachment 1 to this Agreement. XACCT will provide the Product Maintenance and Support Services purchased by Licensee subject to the terms and conditions of this Agreement and the License Agreement. Fees shall be payable within thirty (30) days of invoice which shall be exclusive of any applicable local, state, federal, use, excise, value added, GST or other taxes imposed on the fees payable for the Product Maintenance and Support Services which shall be the responsibility of Licensee. + +3. SUPPORT SERVICES + +3.1 XACCT will provide reasonable commercial efforts to provide the appropriate solutions for reported Incidents. Initial response times for reported Incidents are as set forth in Attachment 1. + +3.2 In order for Licensee to receive the Support Services referenced above, Licensee must: + + (a) Appoint Designated Support Contact(s), trained and qualified, who will maintain the integrity of the&sbsp;Product and who will act as Licensee's liaison for all technical communications with XACCT. The number of Designated Support Contact(s) will be determined by the level of Support Services purchased by Licensee set forth in Attachment 1referenced in Section 2. Names of Designated Support Contact(s) must be provided to XACCT prior to initial contact with the XACCT support center. All technical communications by Licensee to XACCT shall only be made by the Designated Support Contact(s). All information and materials provided to Licensee by XACCT pursuant to this Agreement will be routed to the Designated Support Contact(s). Licensee may change the Designated Support Contact(s) upon written notice to XACCT; + + (b) Promptly obtain training on the use of the Product for the Designated Support Contact(s), and any other employee substituting or replacing the Designated Support Contact(s); + + (c) Subject to Licensee's applicable security requirements, provide XACCT with access to and use of all information and + + + + + + system facilities including but not limited to a modem connection to Licensee's systems determined necessary by XACCT to provide timely Support Services pursuant to this Agreement; + + (d) Follow operating instructions and procedures as specified in, but not limited to, XACCT's documentation and other correspondence related to the Product; + + (e) Follow procedures and recommendations provided by the XACCT support center in an effort to correct problems; or + + (f) Notify XACCT of a malfunction or other problem in accordance with XACCT's then current problem reporting procedures and as provided in Attachment 1. If XACCT determines that a problem reported by Licensee is not due to an error in the Product, XACCT will so notify Licensee. XACCT may in its sole discretion charge additional fees for time and materials for the resolution of problems that are not attributable to an error in the Product or which are excluded from XACCT's support obligations as set forth below. + +3.5 XACCT shall have no obligation to support: + + (a) altered, damaged or Licensee-modified Product, or any portion of the Product incorporated with or into other software other than as contemplated by XACCT's documentation or as otherwise expressly approved by XACCT in writing; + + (b) any version of the Product other than the current version of the Product, the immediately previous version and the version preceding the immediately previous version; XACCT's obligation to support the version prior to the immediately previous version shall not extend beyond six (6) months after the release of the current Major Release of the Product; + + (c) Product problems caused by Licensee's negligence, abuse or misapplication, use of Product other than as specified in the XACCT documentation, or other causes beyond the reasonable control of XACCT; + + (d) Product installed on any hardware, operating system version or network environment that is not supported by XACCT; or + + (e) Incidents if XACCT makes a good faith determination that the primary cause of the problem results from the failure or malfunction of any system, equipment, facilities or devices not furnished by XACCT. + +3.6 Any obligation for Support for non-standard versions of the Product or portions thereof developed for Licensee on a customized basis shall be only as set forth in an amendment or other supplement to this Agreement. + +4. PRODUCT MAINTENANCE + +4.1 XACCT will use reasonable commercial efforts to provide maintenance releases and Minor Releases to the then-current embodiment of the Product that it provides to its customers generally. Maintenance Releases and Minor Releases may also include one copy of revisions to the documentation applicable to such maintenance releases and Minor Releases. + +4.2 From time to time XACCT in its sole discretion may develop and provide Major Releases which will be made available to Licensee with or without additional fees according to the level of Support Services purchased by Licensee as set forth in Attachment 1 referenced in Section 2. + +4.3 THE TERMS OF THE LICENSE AGREEMENT PERTAINING TO LIMITED WARRANTY, DISCLAIMERS OF WARRANTY AND LIMITATION OF LIABILITY SHALL APPLY TO THE MAJOR AND MINOR RELEASES OF PRODUCT DELIVERED ACCORDING TO THIS AGREEMENT. + +5. TERM AND TERMINATION + +5.1 The initial term of this Agreement is one (1) year from the date of delivery of the Product to Licensee unless earlier terminated in accordance with this Agreement. The Agreement will be automatically renewed for additional one (1) year terms (subject to applicable fee adjustments) unless thirty (30) days prior to the anniversary of the Effective Date Licensee gives written notice to XACCT of its intention not to renew. + +5.2 XACCT may suspend or terminate Product Maintenance and Support Services if Licensee fails to timely pay Product Maintenance and Support Service fees as provided in this Agreement. XACCT may also terminate Support Services if Licensee breaches any provision of this Agreement or the License Agreement and such breach is not remedied within thirty (30) days after Licensee receives written notice of the breach. XACCT shall also have the right not to renew this Agreement with respect to any Product by providing written notice of such election at least sixty (60) days prior to the termination of Support Services for such Product, provided that XACCT no longer generally provides Support Services for such Product, or no longer provides the specific Support + + + + + + Services previously offered. + +5.3 Product Maintenance and Support Services shall automatically terminate upon termination of the License Agreement. + +6. REINSTATEMENT OR RENEWAL OF PRODUCT MAINTENANCE AND SUPPORT SERVICES + + In the event Product Maintenance and Support Services are terminated by Licensee by notice of non-renewal, Product Maintenance and Support Services shall be discontinued at the end of the then current term. If Product Maintenance and Support Services are terminated for any reason, at XACCT's sole option, Licensee may reinstate or renew Product Maintenance and Support Services by paying XACCT all applicable Product Maintenance and Support Services and reinstatement fees. + +7. LIMITATION OF LIABILITY + +7.1 Direct Damages. XACCT'S SOLE LIABILITY AND LICENSEE'S EXCLUSIVE REMEDY FOR DAMAGES WITH RESPECT TO THE SUPPORT SERVICES UNDER ANY CONTRACT, TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY OR OTHER THEORY, SHALL BE LIMITED TO THE AMOUNT PAID BY LICENSEE FOR THE SUPPORT SERVICES FOR THE PRIOR 12 MONTHS. XACCT'S SOLE LIABILITY AND LICENSEE'S EXCLUSIVE REMEDY FOR DAMAGES WITH RESPECT TO PRODUCT MAINTENANCE SHALL BE AS SET FORTH IN THE LICENSE AGREEMENT. + +7.2 Consequential Damages. UNDER NO CIRCUMSTANCES, INCLUDING NEGLIGENCE, SHALL XACCT BE LIABLE FOR ANY SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES INCLUDING, WITHOUT LIMITATION, DAMAGES FOR LOST PROFITS, LOSS OF DATA, OR COSTS OF PROCUREMENT OF SUBSTITUTE GOODS OR SERVICES, ARISING IN ANY WAY OUT OF THIS AGREEMENT OR THE USE OF THE PRODUCT AND DOCUMENTATION EVEN IF XACCT HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES OR LOSSES. + +8. GENERAL + + This Agreement, the attachments and the License Agreement constitute the entire agreement between the parties regarding Product Maintenance and Support Services and supersede all previous agreements or + + representations, oral or written, regarding the subject matter. This Agreement may not be modified or amended except in a writing signed by a duly authorized representative of each party. Both parties acknowledge having read the terms and conditions set forth in this Agreement and attachments hereto, understand all terms and conditions, and agree to be bound thereby. The laws of the State of California shall govern all issues arising under or relating to this Agreement, without giving effect to the conflict of laws principles thereof. All disputes arising under or relating to this Agreement shall be resolved exclusively in the appropriate state court in Santa Clara County, California or in the federal court in the Northern District of California, and it is explicitly agreed that no other court shall have such jurisdiction. This Agreement shall not be governed by the United Nations Convention on Contracts for the International Sale of Goods + +IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized representatives: + +LICENSEE XACCT TECHNOLOGIES, INC. + +By: By: --------------------------------- ----------------------------------- + +Name: Name: ------------------------------- --------------------------------- + +Title: Title: ------------------------------ -------------------------------- + +Date: Date: ------------------------------- --------------------------------- \ No newline at end of file diff --git a/full_contract_txt/XENCORINC_10_25_2013-EX-10.24-COLLABORATION AGREEMENT (3).txt b/full_contract_txt/XENCORINC_10_25_2013-EX-10.24-COLLABORATION AGREEMENT (3).txt new file mode 100644 index 0000000000000000000000000000000000000000..2a58d26f86684ec12e6d685cecbd393e96242818 --- /dev/null +++ b/full_contract_txt/XENCORINC_10_25_2013-EX-10.24-COLLABORATION AGREEMENT (3).txt @@ -0,0 +1,5237 @@ +Exhibit 10.24 ***Text Omitted and Filed Separately with the Securities and Exchange Commission. Confidential Treatment Requested Under 17 C.F.R. Sections 200.80(b)(4) and Rule 406 of the Securities Act of 1933, as amended. + + Collaboration Agreement, BII/ XENCOR + + + + Confidential + + COLLABORATION AGREEMENT This Collaboration Agreement ("Agreement") is made by and among Xencor, Inc. 111 W. Lemon Ave. Monrovia, CA 91016 USA + +(hereinafter called "XENCOR"), and Boehringer Ingelheim International GmbH Binger Straße 173 55216 Ingelheim Germany (hereinafter called "BII") (hereinafter BII an XENCOR each shall also be called "Party" and collectively "Parties" as the case may be). EFFECTIVE DATE: February 10, 2012 1 + + + + + + TABLE OF CONTENTS + + 1 + + Definitions + + 5 + + 1.1 + + "Acceptance Criteria" 5 + + 1.2 + + "Affiliated Companies" 5 + + 1.3 + + "Batch" 5 + + 1.4 + + "BII Confidential Information and Know­How" 5 + + 1.5 + + "BII Facility" 6 + + 1.6 + + "BII Intellectual Property" 6 + + 1.7 + + "BII Technology" 6 + + 1.8 + + "Business Partner" 6 + + 1.9 + + "Certificate of Analysis" 6 + + 1.10 + + "Claim" 6 + + 1.11 + + "CMO" 6 + + 1.12 + + "Confidential Information­and Know­How" 6 + + 1.13 + + "Confirmation of Compliance" 6 + + 1.14 + + "Controlled Technology" 6 + + 1.15 + + "cGMP" 6 + + 1.16 + + "Deliverables" 7 + + 1.17 + + "Due Date" 7 + + 1.18 + + "Effective Date" 7 + + 1.19 + + "FTE" 7 + + 1.20 + + "Improvements" 7 + + 1.21 + + "Knowledge" 7 + + 1.22 + + "Latent Defects" 7 + + 1.23 + + "Licensing Revenue" 7 + + 1.24 + + "Losses" 7 + + 1.25 + + "Major Territories" 7 + + 1.26 + + "Material" 7 + + 1.27 + + "MTA" 7 + + 1.28 + + "Obvious Defects" 8 + + 1.29 + + "Other Improvements" 8 + + 1.30 + + "Principal Supplier" 8 + + 1.31 + + "Process" 8 + + + + + + + + 1.32 + + "Process Description" 8 + + 1.33 + + "Product" 8 + + 1.34 + + "Project" 8 + + 1.35 + + "Project Fees" 8 + + 1.36 + + "Project Manager" 8 + + 1.37 + + "Project Plan" 8 + + 1.38 + + "Project Team" 8 + + 1.39 + + "QAA" 9 + + 1.40 + + "Representatives" 9 + + 1.41 + + "Service(s)" 9 + + 1.42 + + "Specification(s)" 9 + + 1.43 + + "Steering Committee" 9 + + 1.44 + + "Technology" 9 + + 1.45 + + "Technology Access Fee" 9 + + 1.46 + + "Total Amount" 9 + + 1.47 + + "XENCOR Confidential Information and Know­How" 9 + + 1.48 + + "XENCOR Intellectual Property" 9 + + 1.49 + + "XENCOR Technology" 9 + + 2 + + + + + + + + 2 + + Cooperation between the Parties in the Course of a Project + + 10 + + 2.1 + + General + + 10 + + + + 2.1.1 General + + 10 + + + + + + + + + + + + 2.1.2 Priority + + 10 + + + + + + + + + + 2.2 + + Personnel + + 10 + + + + 2.2.1 Designation of Project Manager + + 10 + + + + + + + + + + + + 2.2.2 Project Team + + 10 + + + + + + + + + + + + 2.2.3 Steering Committee + + 11 + + + + + + + + + + 2.3 + + Conduct of the Project and BII's Work and Tasks 11 + + 2.4 + + Deliverables + + 12 + + 2.5 + + Nature of the Project + + 12 + + 2.6 + + Additional Work + + 12 + + 2.7 + + XENCOR Confidential Information and Know-How and Material + + 12 + + 2.8 + + Further Obligations of XENCOR + + 13 + + + + 2.8.1 General + + 13 + + + + + + + + + + + + 2.8.2 Obligations of XENCOR + + 13 + + + + + + + + + + + + 2.8.3 Timelines and Information + + 13 + + + + + + + + + + 3 + + Payments + + 14 + + 3.1 + + Project Fee + + 14 + + + + 3.1.1 Consideration for Services + + 14 + + + + + + + + + + + + 3.1.2 Payment of the Project Fees + + 14 + + + + + + + + + + + + 3.1.3 Invoicing + + 15 + + + + + + + + + + + + + + + + 3.2 + + Technology Access Fee + + 15 + + 3.3 + + VAT + + 15 + + + + + + + + 4 + + Delivery Terms of Product + + 16 + + 4.1 + + Delivery Terms + + 16 + + 4.2 + + Cancellation of Order + + 17 + + + + + + + + 5 + + Ownership and Use of Project Data + + 17 + + 5.1 + + Project Data + + 17 + + 5.2 + + Use of the Process; Right of Negotiation + + 18 + + + + 5.2.1 Use of the Process outside this Agreement + + 18 + + + + + + + + + + + + 5.2.2 Right of First Negotiation to Manufacture + + 18 + + + + + + + + + + + + 5.2.3 Technology Access Fee and Technology Transfer + + 20 + + + + + + + + + + + + 5.2.4 Payment Terms + + 21 + + + + + + + + + + + + 5.2.5 License + + 21 + + + + + + + + + + 5.3 + + Acknowledgement + + 21 + + + + + + + + 6 + + Representations, Warranties and Indemnification + + 22 + + 6.1 + + Mutual Representations, Warranties and Covenants + + 22 + + 6.2 + + XENCOR Warranties + + 22 + + 6.3 + + BII Warranties + + 22 + + 6.4 + + Process for Defense of Infringement of Third Party Intellectual Property + + 23 + + 6.5 + + Disclaimer of Warranties + + 24 + + 3 + + + + + + + + 7 + + Liability, Indemnification, Limitations and Insurance + + 24 + + 7.1 + + General + + 24 + + 7.2 + + Liability + + 24 + + 7.3 + + Indemnification + + 25 + + 7.4 + + Limitation of Liability and Indemnification Obligations + + 25 + + 7.5 + + Insurance + + 26 + + + + + + + + 8 + + Intellectual Property + + 26 + + 8.1 + + Existing Intellectual Property Rights + + 26 + + 8.2 + + New Intellectual Property, Project Results and Licenses + + 26 + + + + 8.2.1 XENCOR + + 26 + + + + + + + + + + + + 8.2.2 BII + + 27 + + + + + + + + + + + + 8.2.3 Other Improvements + + 27 + + + + + + + + + + + + 8.2.4 Licenses to Xencor + + 27 + + + + + + + + + + + + 8.2.5 Licenses to BII + + 27 + + + + + + + + + + 9 + + Confidentiality + + 28 + + 9.1 + + General + + 28 + + 9.2 + + MTA Superseded + + 30 + + 9.3 + + Controlled Technology + + 30 + + + + + + + + 10 + + Term and Termination + + 30 + + 10.1 + + Term + + 30 + + 10.2 + + Termination of this Agreement + + 30 + + + + 10.2.1 + + + + 30 + + + + + + + + + + 10.2.2 + + + + 30 + + + + + + + + 10.3 + + Effects of Termination of this Agreement + + 31 + + + + + + + + + + 10.3.2 + + + + 31 + + + + + + + + + + 10.3.3 + + + + 32 + + + + + + + + 10.4 + + Surviving Provisions + + 32 + + + + + + + + 11 + + Miscellaneous + + 32 + + 11.1 + + Force Majeure + + 32 + + 11.2 + + Conflict with Improvements under the MTA + + 33 + + 11.3 + + Secrecy Agreement between the Parties + + 33 + + 11.4 + + Publicity + + 33 + + 11.5 + + Notices + + 33 + + 11.6 + + Applicable Law and Arbitration + + 34 + + 11.7 + + Entire Agreement + + 34 + + 11.8 + + Waiver; Amendment + + 34 + + 11.9 + + Severability + + 35 + + 11.10 + + Dispute Resolution + + 35 + + 11.11 + + Assignment + + 35 + + 11.12 + + Independent Contractors + + 35 + + 11.13 + + Counterparts + + 35 + + 4 + + Preamble WHEREAS, XENCOR and an Affiliated Company (as defined below) of BII, the Boehringer Ingelheim Pharma GmbH & Co. KG, Birkendorfer Str. 65, 88397 Biberach, Germany ("BI Pharma") entered into a Material Transfer and Initial Service Agreement dated as of June 28, 2011 relating to XENCOR's proprietary product, a monoclonal antibody directed against TNF­ known as "Xtend­TNF" or "XmAb6755"; and WHEREAS, XENCOR is a company engaged in the design and development of biopharmaceutical drugs and is owner of a cell line expressing the Product (as defined below); WHEREAS, BII has know-how and expertise to develop production processes for biopharmaceuticals towards commercial scale volumes and within international regulatory requirements; WHEREAS, XENCOR and BII herewith agreed on a business collaboration for the mutual benefit of both Parties by having XENCOR providing the Material (as defined below) and the description of the Product and by having BII developing a fed­batch production process to have XENCOR's Product expressed from the Material in the quantity suitable for preclinical and completion of Phase 1 clinical testing; and WHEREAS, as BII finances the Project in advance and receives a first right to negotiate to manufacture and payments at a later point in the future, XENCOR agrees, in order to make both Parties benefit from their collaboration, to use its commercially reasonable efforts to complete Phase 1 clinical testing of the Product and to find a business partner for the further development of the Product into a successful medicinal product; NOW THEREFORE and in consideration of the mutual covenants set forth in this Agreement, BII and XENCOR hereby agree as follows: 1 Definitions 1.1 "Acceptance Criteria" + + + + + + shall mean either, (as the case may be) the following criteria with respect to a Batch of Product; (i) the preliminary specifications as agreed upon by the Parties with respect to the three (3) initial manufacturing runs as described in Section 2.5, or (ii) except as provided in clause (i), the Specifications accompanied by a Confirmation of Compliance and Certificate of Analysis. 1.2 "Affiliated Companies" shall mean any company or business entity which controls, is controlled by, or is under common control with, either XENCOR or BII. For purposes of this definition, "control" shall mean the possession, directly or indirectly of the power to direct or cause the direction of the management and policies of an entity (other than a natural person), whether through the majority ownership of voting capital stock, by contract or otherwise. 1.3 "Batch" shall mean Product from one fermentation run using the Process. 1.4 "BII Confidential Information and Know­How" shall mean all existing or future technical or other information relating specifically to (a) the BII Facility, (b) the Process, (c) BII Intellectual Property, and/or (d) know-how for the development and manufacture of biopharmaceuticals generally, in each case (a)-(d) whether 5 + + + + + + patented or not patented, including, without limitation, trade secrets, know-how, processes, concepts, experimental methods and results and business and scientific plans that are disclosed or supplied directly or indirectly to XENCOR or used in connection with the Project, but always excluding all confidential technical or other information of XENCOR specifically relating to XENCOR Technology. 1.5 "BII Facility" shall mean the biotech buildings and all other buildings used by BII and/or its Affiliated Companies in performance of the Project in Fremont, CA, USA (it being understood that certain aspects of the Services may be performed in Germany, and, with respect thereto, such buildings in Germany used by BII and/or its Affiliated Companies in performance of the Project, shall also be deemed "BII Facility"). 1.6 "BII Intellectual Property" shall have the meaning set forth in Section 8.2.2 hereof. 1.7 "BII Technology" shall mean the Technology developed or obtained by or on behalf of BII or any of its Affiliated Companies without the use of the of XENCOR Confidential Information and Know-How or the Material, including without limitation, the Process. 1.8 "Business Partner" shall have the meaning set forth in Section 2.8.2 hereof. 1.9 "Certificate of Analysis" shall mean, with respect to a Batch, that complete and accurate document setting forth the conformance with the Specifications set forth in the QAA. 1.10 "Claim" shall have the meaning set forth in section 6.4.(a)a) hereof. 1.11 "CMO" shall mean Contract Manufacturing Organization. 1.12 "Confidential Information­and Know­How" shall mean either or both Xencor Confidential Information and Know-How (as defined herein) or BII Confidential Information and Know- How (as defined herein), as applicable. 1.13 "Confirmation of Compliance" shall mean BII's complete and accurate certificate, executed and delivered to XENCOR in connection with each Batch of Product, confirming that such Batch of Product was manufactured according to cGMP, the Process and applicable laws at the BI Facility, and setting forth any deviations therefrom and the results of final investigations performed by BII according to the QAA. 1.14 "Controlled Technology" shall have the meaning specified in Section 9.3 hereof. 1.15 "cGMP" shall mean current Good Manufacturing Practice regulations as codified in: The Rules Governing Medicinal products supplied in the European Union: Volume 4 -Medicinal products supplied for Human and Veterinary Use: Good Manufacturing Practice, as amended from time to time; the United States Code of Federal Regulations, title 21, parts 6 + + + + + + 210, 211, 600 and 610, as amended from time to time; and the International Committee on Harmonisation and other comparable guidelines, directives or standards required by governmental authorities in the Major Territories or in any other country or countries agreed in writing by the Parties. 1.16 "Deliverables" shall have the meaning specified in Section 2.4 hereof. 1.17 "Due Date" shall have the meaning specified in Section 3.1.2 hereof. 1.18 "Effective Date" shall mean the date of commencement of this Agreement as mentioned on the cover page above. 1.19 "FTE" shall mean a fully allocated employee or consultant of BII and working on the Technology transfer with such time and effort to constitute the equivalent of one (1) employee on a full time basis consistent with normal business and scientific practice […***…]. 1.20 "Improvements" shall mean all discoveries and inventions, and all modifications, derivatives and improvements to Technology or new uses thereof (whether or not protectable under patent, trademark, copyright or similar laws) that are discovered, developed or reduced to practice by or on behalf of BII or any of its Affiliated Companies (alone or jointly with XENCOR) in the performance of this Agreement. 1.21 "Knowledge" shall mean that which a Party knows or should have known following that inquiry a reasonable person would have made in light of the facts and circumstances. 1.22 "Latent Defects" shall mean non-conformance of the Product with this Agreement other than Obvious Defects. 1.23 "Licensing Revenue" shall have the meaning set forth in Section 3.1.2 hereof. 1.24 "Losses" shall have the meaning set forth in Section 7.2.a hereof. 1.25 "Major Territories" shall mean the United States, the European Union and/or Japan. 1.26 "Material" shall mean the respective XENCOR proprietary cell line as laid down in detail in Appendix 1 and any know-how or data relating directly thereto and provided together with such cell line to BII by or on behalf of XENCOR (including any progeny or derivative thereof). 1.27 "MTA" shall mean the Material Transfer and Initial Service Agreement entered into by XENCOR and BI Pharma on June 28, 2011 attached to this Agreement as Appendix 4. + +***Confidential Treatment Requested 7 + + + + + + 1.28 "Obvious Defects" shall mean any non-conformance of the Product with this Agreement, which is visible or easily detectable without any analysis in a laboratory, such as noticeable damages of the Product caused by the transport of Product. 1.29 "Other Improvements" shall have the meaning set forth in Section 8.2.3 hereof. 1.30 "Principal Supplier" shall mean the right to manufacture and supply commercial Product in the amount per annum of at least […***…] of the worldwide annual demand of commercial Product calculated based on XENCOR's reasonably forecasted request for commercial Product for the respective calendar year. 1.31 "Process" shall mean all the respective steps involved in the process developed and performed by BII pursuant to this Agreement to produce the respective Product from the Material or having the Product expressed from the Material, including, without limitation, the manufacture, testing and packaging thereof. 1.32 "Process Description" shall mean a controlled document, approved by authorized technical and quality representatives of both Parties, that documents the general outline of the respective Process. It includes all relevant Process parameters to be met and equipment and raw materials to be used. 1.33 "Product" shall mean XENCOR's proprietary biopharmaceutical product, a monoclonal antibody directed against TNF­ known as "Xtend­INF" or "XmAb6755", as further laid down in detail in Appendix 1, expressed from the Material disclosed by XENCOR to BII and formulated either as bulk drug substance or in final dosage form as drug product, as the context requires. 1.34 "Project" shall mean the performance of the Services, including without limitation the Process development program for the Product. 1.35 "Project Fees" shall have the meaning specified in Section 3.1 hereof. 1.36 "Project Manager" shall have the meaning specified in Section 2.2.1 hereof. 1.37 "Project Plan" shall mean the plan describing the Services to be performed by BII under the Project, including the Project timeline and the Project Fees, attached to this Agreement as Appendix 2. 1.38 "Project Team" shall have the meaning specified in Section 2.2.2 hereof and at the Effective Date shall consist of the persons listed in Appendix 3. 1.39 "QAA" + +***Confidential Treatment Requested 8 + + + + + + shall mean the Quality (Assurance) Agreement entered into between the Parties simultaneously with this Agreement and attached hereto as Appendix 5. 1.40 "Representatives" shall have the meaning specified in Section 7.3 a hereof. 1.41 "Service(s)" shall mean those certain services performed by BII under this Agreement. 1.42 "Specification(s)" shall mean all the tests, analytical methods and/or limits, and the results thereof, as applicable, agreed by the Parties, within which the Product has to conform to be considered acceptable by XENCOR for clinical use set forth in Appendix 6. The Parties are in agreement, that in the first instance they will agree on preliminary specifications which shall then be fixed to final Specifications in accordance with Section 2.5. 1.43 "Steering Committee" shall have the meaning specified in Section 2.2.3 hereof. 1.44 "Technology" shall mean all cDNA, cell lines, cell banks, master cell banks, constructs, reagents, antibodies and/or other tangible materials, methods, techniques, processes, trade secrets, copyrights, know-how, data, documentation, regulatory submissions, specifications and other intellectual property of any kind (whether or not protectable under patent, trademark, copyright or similar laws). 1.45 "Technology Access Fee" is defined in Section 5.2.3. 1.46 "Total Amount" shall have the meaning specified in Section 3.1.2 hereof. 1.47 "XENCOR Confidential Information and Know­How" shall mean all existing or future technical or other information relating specifically to (a) the Material, (b) the Product (and any modification, derivative or fragment thereof), and/or (c) the XENCOR Technology, in each case (a), (b) and (c) whether patented or not patented, and including, without limitation, all know-how, trade secrets, inventions, patent applications, processes, concepts, experimental methods and any other information concerning XENCOR's financial situation, business plans, and its research and product designs, that are disclosed or supplied to BII in connection with the Project, but always excluding BII Confidential Information and Know-How. 1.48 "XENCOR Intellectual Property" shall have the meaning specified in Section 8.2.1 hereof. 1.49 "XENCOR Technology" shall mean (i) the Material, (ii) the Product, and any modifications, derivatives, or fragments thereof, and (iii) the Technology of XENCOR developed or obtained by or on behalf of XENCOR independent of and without the use of technical or other information disclosed or supplied by BII or its Affiliated Companies to XENCOR relating specifically to the BII Facility, the Process, BII Intellectual Property and/or know-how for the development and manufacturer of biopharmaceuticals generally, and which was introduced by XENCOR to the Project. 9 + + + + + + 2 Cooperation between the Parties in the Course of a Project 2.1 General 2.1.1 General This Agreement sets forth the terms and conditions under which BII and XENCOR will perform their tasks regarding the Project. BII shall (by itself or by its Affiliated Companies) perform for XENCOR the Services as specified in this Agreement and the Project Plan and BII and XENCOR shall adhere to their obligations under this Agreement and the Project Plan. 2.1.2 Priority In the event of a conflict or ambiguity between any term of this Agreement and an Appendix, the terms of this Agreement shall prevail. In case the Parties mutually agree that a specific Section of this Agreement shall be modified by the terms of a Project Plan (and that such term of the Project Plan shall prevail) for a specific Service, they may only do so by explicit reference to the Section of this Agreement that shall be modified. 2.2 Personnel 2.2.1 Designation of Project Manager Upon commencement of the Project, BII and XFNCOR will each appoint a Project Manager, who will coordinate and supervise the Project including communication of all instructions and information concerning the Project to the other Party. The Project Manager will serve as the primary contact person for the other Party. Each Project Manager will be available on an agreed basis for consultation at prearranged times during the course of the Project. The Project Managers shall be copied on all correspondence by other Project Team members and all correspondence between the Parties. In the absence of the Project Manager, a substitute shall be appointed. Additional modes or methods of communication and decision making may be implemented with the mutual written consent of each Party. Each Party will use reasonable efforts to provide the other Party with […***…] prior written notice of any change in such Party's Project Manager. 2.2.2 Project Team The Parties shall establish a Project Team consisting of representatives of each Party from the necessary disciplines and their respective Project Managers to (a) ensure the progress of the Project, (b) coordinate the performance of the Project, and (c) facilitate communication among the Parties. Each Project Team member shall have knowledge and ongoing familiarity with the Project and will possess the authority to make decisions on matters likely to be raised in the Project Team. Each Party shall have the right to substitute its members of the Project Team as needed from time to time by giving written notice to the other Party due time in advance. The Project Team shall meet in person or by means of a video conference or teleconference on a periodic basis (a) as agreed by the Project Managers within [...***...] after written request for such meeting by either Party, or (b) as specified in the Project Plan (Appendix 2, as amended from time to time), but in any event, unless otherwise agreed in writing by the Parties, the Project Team shall meet at least one (1) time per calendar quarter (by means of a video conference or teleconference or in person, provided, however, that at least two (2) of these meetings per calendar year are held in person on an alternating basis between XENCOR's facilities and BII's facilities in Fremont, CA, USA). The Project Team shall oversee the Project. Prior to each meeting of the Project Team the Parties will distribute to each other written copies of all materials, data and information arising out of the conduct of their activities hereunder. + +***Confidential Treatment Requested 10 + + + + + + Each Party shall bear its own costs associated with such meetings and communications. It is the right of each Party to call for a Project Team meeting according to the covenants of this Section 2.2 upon written request at any time. The Parties shall alternate responsibility for preparing minutes of the meeting which shall be circulated promptly following the meeting. The initial members of the Project Team and the Project Managers are set forth in Appendix 3 attached hereto which may be updated from time to time to reflect changes in the Project Team and/or Project Managers as provided in this Section 2.2. 2.2.3 Steering Committee The Parties shall form a Steering Committee, to which each Party will appoint three (3) executive employees, including the Project Managers, all of whom shall be familiar with the Project. The Steering Committee shall have general oversight and review of the activities of the Project Team and shall resolve any issues referred to the Steering Committee by the Project Team. Each Party shall have the right to substitute its members of the Steering Committee as needed from time to time by giving written notice to the other Party due time in advance. The Steering Committee shall meet within [...***...] after receipt of a written request by one Party to the other Party. The request shall describe the matter in dispute and the solution which the requesting Party proposes to be decided. Each Party shall bear its own costs associated with meetings and communications of the Steering Committee. The Steering Committee will take action by unanimous consent of the Parties, with the representatives of BII collectively having a single vote and the representatives of XENCOR collectively having a single vote, or by a written resolution signed by all of the representatives. If the Steering Committee is unable to reach unanimous consent on a particular matter, then the matter will be referred to the chief executive officers of the Parties, who will use good faith efforts to resolve such matter, and the decision reached by mutual agreement of the chief executive officers of the Parties shall be final and binding on the Parties. If, (i) after good faith efforts, the chief executive officers of the Parties are unable to resolve such matter by mutual agreement, and (ii) such matter concerns the Product or the Process, but does not concern the BI Facility or the management of manufacturing slots, then the chief executive officer of XENCOR shall make the final decision about how to resolve such dispute, after good faith consideration of BII's position, which decision shall be final and binding on the Parties; provided, however, that, in resolving such matter, XENCOR's chief executive officer shall not have any authority to require BII or its Affiliated Companies to incur additional expenses or obligations not contemplated by this Agreement. In no event will the Steering Committee, or the executive officers of the Parties in resolving any Steering Committee matter, have any authority to amend or modify this Agreement; any such amendment or modification of this Agreement must be in accordance with Section 11.8. For the avoidance of doubt, nothing in this Section shall prevent any Party from seeking arbitration proceedings pursuant to Section 11.6 hereof with regard to any matters other than matters resolved by mutual agreement of the chief executive officers in accordance with this Section 2.2.3. The members of the Steering Committee are set forth in Appendix 3 attached hereto, which may be updated from time to time to reflect changes in the Steering Committee as provided in this Section 2.2.3. 2.3 Conduct of the Project and BII's Work and Tasks The Parties shall engage in the Project upon the terms and conditions set forth in this Agreement. In the course of this Agreement the Parties shall perform the Project as laid down and detailed in the Project Plan. Each Party shall fully and reasonably cooperate with the other Party to provide appropriate information and assistance to the other Party in connection with the Project, responding in a + +***Confidential Treatment Requested 11 + + + + + + reasonable and timely manner with respect to all reasonable requests for information and approval. Neither Party shall be liable for any delays in its performance of the Project to the extent caused solely by the other Party's failure to provide in a reasonably timely manner any information or approval reasonably requested by the other Party. The Parties shall assign a sufficient number of professionally qualified personnel to perform the Project and shall perform its tasks under this Agreement according to the generally acceptable professional and then current industry standards and subject to terms and conditions as set forth herein, at all times in compliance in all material respects with all requirements of applicable laws and regulations. The Parties will use commercially reasonable efforts to achieve the estimated timelines as laid down in the Project Plan. Changes to the Project Plan, if any, shall require the written consent of both Parties. 2.4 Deliverables BII will deliver such deliverables expressly laid down in detail in the Project Plan, including but not limited to the Product (the "Deliverables") within the timelines laid down in the Project Plan to XENCOR. Following the completion of the activities required under the Project, BII will provide to XENCOR then available Product (if any), Batch records and a summary containing manufacturing and analytical testing, including without limitation, the information and the results of the development phase according to the workscope as further described in the Project Plan. 2.5 Nature of the Project As the Product has never been produced by BII or on behalf of BII by its Affiliated Companies at the BI Facility, XENCOR acknowledges that the Project is experimental in nature and that no favorable or useful results can be assured by BII. However, after […***…], the Parties shall in good faith agree on a revision (if necessary) to the preliminary specifications for the Product (that have been mutually agreed upon by the Parties) that shall then be the Specifications for subsequent runs in subsequent campaigns that shall form a basis for rejection or acceptance of the respective Product produced in any additional runs at such scale under the provisions of Section 4.1, and, provided that the Process has not been materially changed (i.e. a change that is subject to the Change Control procedures of the QAA), the Project shall no longer be considered experimental in nature and the obligation to meet the respective Specification shall apply to all future runs at such scale. 2.6 Additional Work In case the Parties mutually agree on additional work for the benefit of the Project by changing the Project Plan by written agreement of the Parties, BII shall perform such additional work to sustain the progress of the Project on conditions in terms of money, time and scope to be subject to agreement of the Parties hereto as set forth in the then amended Project plan. 2.7 XENCOR Confidential Information and Know-How and Material To the extent not already transferred by XENCOR, XENCOR shall transfer the Material for the Project to BII to the BII Facility subject to the terms of this Section 2.7, and BII shall use or have used by its Affiliated Companies such Material solely to conduct the Project in accordance with the Project Plan, this Agreement, or as otherwise may be agreed to by the Parties in writing. The Material will not be used in connection with any animal studies or diagnosis, treatment or any activity in humans or for any use not directly related to the Project. BII's use of the Material will be in compliance with all applicable laws in the state or country where the Services are performed. BII accepts the Material with the knowledge that it is experimental. The Material may not be transferred or otherwise made available, in whole or in part, by BII to any other individual, entity or institution other than any Affiliated Companies + +***Confidential Treatment Requested 12 + + + + + + of BII without the prior written consent of XENCOR, which may be withheld by XENCOR for any reason. Such consent is hereby given for BII or its Affiliated Companies to transfer the Material for quality control testing performed by a third party on a blinded basis. For the avoidance of doubt, in the event of a transfer of Material to an Affiliated Company of BII or to any third party with the consent of XENCOR, BII shall ensure that the respective Affiliated Company or third party shall use such Material solely to conduct the Project in accordance with the Project Plan, this Agreement, or as otherwise may be agreed to by the Parties in writing and shall not transfer or otherwise make available, in whole or in part, the Material to any other individual, entity or institution. The Material is the property of XENCOR. It is agreed that the transfer of the Material hereunder shall not constitute a sale of Material or a grant, option or license of any patent or other rights except to allow BII to perform the Project. XENCOR shall retain and have all right, title and interest in and to the Material. XENCOR will inform BII in a timely manner about any safety issues of which XENCOR becomes aware relating to the handling of the Material and the Product after the date of the execution of this Agreement. BII shall at all times take reasonable measures to protect the Material from loss or damage and in no event measures less than employed by BII in the protection of its own proprietary materials, and shall promptly notify XENCOR, if at any time it believes the Material has been damaged, lost or stolen. XENCOR and BII hereby acknowledge and agree that XENCOR is providing XENCOR Confidential Information and Know-How to BII for its use by BII for the purposes of this Agreement, and BII will make use thereof solely for such purposes and XENCOR hereby consents to such use. 2.8 Further Obligations of XENCOR 2.8.1 General The Parties acknowledge and agree, that. subject to the terms and conditions of this Agreement, BII substantially finances the Project at the costs and fees outlined in Appendix 2 in advance and receives payments at a later point in the future. Accordingly, XENCOR agrees, in order to make both Parties benefit from their collaboration, that the success of the collaboration between the Parties depends strongly on the fact whether or not XENCOR is able to find a suitable business partner for the further development of the Product into a successful medicinal product with one or more marketing authorisations worldwide. 2.8.2 Obligations of XENCOR Therefore, XENCOR shall use commercially reasonable efforts to conduct and complete at its own cost and risk a Phase 1 clinical trial with the Product as described in Section 2.8.3 within the timelines set forth herein (subject to Section 2.8.3); and find one or more suitable third party/parties as business partner(s) for the further development of the Product into a medicinal product ("Business Partner"). For the avoidance of doubt, XENCOR bears the sole responsibility for the conduct and completion of the clinical trials of the Product and the search for the Business Partner and shall bear all costs and expenses in connection therewith. In no event will it be a breach of this Agreement by XENCOR if the Phase 1 clinical trial or other clinical trials of the Product are not completed or an agreement is not entered into with a Business Partner so long as XENCOR uses commercially reasonable efforts to do so. 2.8.3 Timelines and Information XENCOR shall use commercially reasonable efforts to conduct and complete a Phase 1 clinical trial of the Product in a timely fashion and to search for the Business Partner. A summary of the preliminary plan for the Phase 1 clinical trial of the Product to be conducted by XENCOR is attached as Appendix 7, it being understood that timing of such clinical trial 13 + + + + + + may be delayed to the extent (i) caused primarily by BII's failure to provide Product conforming to the Specifications; or (ii) by safety issues relating to the Product; or (iii) by regulatory delays; or (iv) other causes outside the control of XENCOR. XENCOR shall promptly provide BII notice of the completion and a summary overview of the outcome/observations of the Phase 1 clinical trial regarding the Product and a summary overview of any negotiations with a possible Business Partner regarding the further development of the Product. Moreover, XENCOR shall inform BII on an annual basis or, if there is good cause, upon request of BII (whichever is the case) about the actual status of such Phase 1 clinical trial or such negotiations, such request not to be more often than twice per year. 3 Payments 3.1 Project Fee 3.1.1 Consideration for Services As consideration for the performance of BII's Services, XENCOR shall pay BII all fees to be paid to BII as set forth in the Project Plan (the "Project Fees") according to the terms and conditions set forth in the following subsections of this Section 3.1. The Project Fees as set forth in the Project Plan include BII's internal and out­of­pocket cost and expenses for its performance of the Project, including without limitation, ordinary and standard raw materials, components and consumables, and XENCOR shall not be obligated to make any payments with respect to any Services except the Project Fees or payments for additional work agreed upon according to Section 2.6 (which shall then be considered "Project Fees"). 3.1.2 Payment of the Project Fees The Project Fees referred to in Section 3.1.1 above, together with interest at a […***…] percent ([...***...]%) annual interest rate on any unpaid Project Fees accruing from the earlier of (i) the date of completion of the clinical summary report for the Phase 1 clinical trials of the Product as planned according to Appendix 7 unless delayed as described in Section 2.8.3 or (ii) the date that is five (5) calendar years after the Effective Date (each of the alternatives above, the "Due Date") until paid in full (the Project Fees together with any such interest, referred to as the "Total Amount"), shall become duly payable in accordance with the following schedule: a. In case XENCOR has entered into an agreement with at least one Business Partner, then, beginning from the later of (i) the effective date of such agreement or (ii) the Due Date, XENCOR will pay BII the Total Amount in [...***...] installments of [...***...] of the [...***...] (defined below) that [...***...]; provided, however, that in no event will [...***...] of the annual Licensing Revenue [...***...]; provided that, for the avoidance of doubt, [...***...] shall be excluded from [...***...]. + +***Confidential Treatment Requested 14 + + b. In case XENCOR decides to proceed with the further development of the Product without a Business Partner, XENCOR will pay BII the Total Amount in one or more lump sum payments within five (5) calendar years from the Due Date. c. As long as XENCOR, notwithstanding its commercially reasonable efforts after the completion of the Phase 1 clinical trial either (i) is not able to further develop the Product for technical and/or scientific reasons or (ii) does not decide to proceed with the further development of the Product without a Business Partner and does not enter into an agreement with a Business Partner within two (2) calendar years from the Due Date, then XENCOR shall have no obligation to pay BII any or all of the Total Amount. For the avoidance of doubt, such obligations will become due as described in this Section 3.1.2, at any time XENCOR enters into an agreement with at least one Business Partner or further develops the Product within ten (10) calendar years following the Effective Date, as provided in Section 10.3. 3.1.3 Invoicing XENCOR shall notify BII in writing of any of the circumstances listed in Section 3.1.2.a to 3.1.2.c. BII shall issue an invoice for the payments of the Total Amount agreed upon with XENCOR according to the payment schedule in Section 3.1.2 and payment of the Technology Access Fee, as applicable. The amount of the Project Fees and the interest (if any) will be shown separately in the invoice. XENCOR shall make payments of all invoiced amounts for the payments of the Total Amount and of the Technology Access Fee due and payable in accordance with Section 5.2.3 and 5.2.4, as applicable [...***...] from the date of receipt of BII's invoice. If XENCOR fails to make timely payment of the invoiced amount, interest shall accrue on the amount of the Project Fees shown in the invoice at a fixed annual rate equal to the highest rate of interest quoted as the "prime rate" in The Wall Street Journal on the day that payment was due. All payments due under this Agreement shall be paid in US dollars by wire transfer or by such other means agreed to in writing by the Parties. XENCOR will provide at least twenty-four (24) hours advance notice to BII of each wire transfer to the bank account identified below or such other bank accounts as BII shall designate in writing. + + Account Name: + + [...***...] + + Account Number: + + [...***...] + + + + + + + +Bank: + + [...***...] + + BIC (SWIFT-CODE): + + [...***...] + + IBAN: + + [...***...] + + 3.2 Technology Access Fee The Technology Access Fee (if any) is due according to Section 5.2.3 and 5.2.4 below. Section 3.1.3 shall apply accordingly. 3.3 VAT All payments under this Agreement (including the Technology Access Fee) shall be understood as net payments without value added tax ("VAT"). VAT, if applicable, shall be added to the respective payment. The Parties will reasonably cooperate in completing and filing documents required under applicable law in connection with any refund of or credit for any such payment of VAT. + +***Confidential Treatment Requested 15 + + + + + + 4 Delivery Terms of Product 4.1 Delivery Terms BII shall (a) deliver to XENCOR or, (b) at the request of XENCOR, store, the agreed amounts of the Product produced according to the Project Plan in accordance with agreed upon schedule, at the price set forth in the Project Plan. Delivery of Product by BII shall be made [...***...] BII Facility (Incoterms 2010). BII shall package and arrange for shipment of Product to the delivery address specified by XENCOR, all in accordance with the instructions of XENCOR provided that BII shall not be responsible for any damages with respect to Product or third party claims arising out of such arrangements for shipment of Product after delivery of such Product to the shipper in accordance with such instructions in accordance with XENCOR's instructions. Each shipment of cGMP Product will include a Certificate of Analysis, a Confirmation of Compliance and such other documentation as reasonably required to meet all applicable statutory and regulatory requirements. Delivery of the Product shall be subject to quality and other provisions set forth in the QAA. The Parties shall cooperate reasonably to obtain all customs licenses or permits necessary to ship the Product (the evaluation of which customs licenses or permits required shall be performed by XENCOR), and no shipment shall be made until such licenses or permits, if any, have been obtained. XENCOR shall diligently examine all Product delivered under this Agreement as soon as practicable after receipt. Notice of all claims arising out of or relating to Obvious Defects shall be given in writing to BII within [...***...] after the date of XENCOR's receipt of Product, otherwise, such Product shall be considered free of any Obvious Defects as between BII and XENCOR. XENCOR shall make a damaged Product available for inspection and shall comply with the requirements of any insurance policy covering the Product, and BII shall offer XENCOR all reasonable assistance, at the cost and expense of XENCOR, in pursuing any claims arising out of the transportation of the Product. Except as otherwise provided herein and as set forth in Section 2.5, XENCOR shall have [...***...] after the date of XENCOR's receipt of Product, for all claims arising out of or relating to any Latent Defects and to reject such delivered Product for Latent Defects; provided, however that XENCOR shall only be permitted to reject the Product if the Acceptance Criteria are not met. If XENCOR determines after reviewing the relevant documentation and performing reasonable testing that any Batch does not meet the Acceptance Criteria, or if Product is determined by BII to be unsuitable for release, then the Parties will mutually agree, as promptly as reasonably possible, whether (a) to produce a new Batch at BII's cost and expense, including the costs of materials used in the manufacture of such Batch, or (b) to rework or reprocess the Batch, at BII's cost and expense, so that the Batch can be deemed to have been manufactured in compliance with cGMP and the agreed Process Description, and to conform to the Acceptance Criteria (provided that the Parties have mutually agreed in writing on any procedures for reworking or reprocessing a Batch). If the remedy set forth in either (a) or (b) is agreed to be performed by BII, then BII shall start the applicable work as soon as reasonably practicable, such that the next reasonably available (taking into consideration BII's entire contract manufacturing business) manufacturing slot shall be used by BII to produce Product, and BII will use commercially reasonable efforts to resupply within [...***...] but in any event no later than [...***...] from time of rejection by XENCOR. For the avoidance of doubt, if Product is not accepted by XENCOR as provided above, then BII's obligations set forth above shall apply both to the drug product and the bulk drug substance contained therein. In the event XENCOR rejects the Product for Obvious Defects or Latent Defects as provided above, BII shall have the right to sample and retest the Product, which shall be done as soon as + +***Confidential Treatment Requested 16 + + + + + + practicable, provided that, if BII does not notify XENCOR in writing of its election to retest the Product within [...***...] after notice of rejection from XENCOR, BII shall be deemed to agree with XENCOR's rejection of the Product. In the event of a discrepancy between XENCOR's and BII' s test results such that one Party's results fall within the Acceptance Criteria and the other Party's test results fall outside the Acceptance Criteria, or there exists a dispute over whether such failure is due (in whole or in part) to acts or omissions of XENCOR or any third party after delivery, the Parties shall cause a testing laboratory agreeable to both Parties to perform comparative tests and/or analyses on samples of the alleged defective Product. The testing laboratory's results shall be in writing and shall be final and binding save for manifest error on the face of its report. Unless otherwise agreed to by the Parties in writing, the costs associated with such testing and review shall be borne by the Party against whom the testing laboratory result finally rules. The testing laboratory shall be required to enter into written undertakings of confidentiality no less burdensome than set forth or referred to by this Agreement. 4.2 Cancellation of Order If XENCOR at any time cancels or postpones any campaign set forth in the Project Plan for the manufacture of Product for non-technical reasons later than [...***...] prior to the date on which inoculation of the respective production fermenter is to take place, XENCOR shall nevertheless be obliged to pay [...***...] percent ([...***...]%) of the Project Fees for such campaign to the extent that BII is not able to adequately use the respective capacity for such campaign alternatively (e.g. for production of any other material for any third party or itself) provided always that BII shall use its commercially reasonable efforts to use such capacity and mitigate any losses that may incur arising from such cancellation or postponement, including, for the avoidance of doubt, the reapplication of raw materials, if possible. 5 Ownership and Use of Project Data 5.1 Project Data In consideration of the Project Fees: a. BII shall carry out the Project by itself or by its Affiliated Companies) and provide XENCOR with a summary of the results from the Project, including manufacturing and analytical release and also shall provide XENCOR with a summary report about the results on the various stages of Process development; b. BII shall supply XENCOR with data, results and information required to comply with any mandatory request of any applicable regulatory body in the Major Territories to comply with such regulatory body's requirements. BII shall provide complete Batch records for all cGMP runs and will provide to XENCOR all data reasonably necessary from all process development and manufacturing activities to enable XENCOR's preparation of any regulatory filings; and shall not unreasonably reject supplying data results and information required to comply with any requirement of any applicable regulatory body outside the Major Territories or cooperating with XENCOR's preparation of the chemistry, manufacturing and controls section of any regulatory filing supporting the clinical development of the Product in and outside the Major Territories. BII shall bear the cost of such supply and cooperation by BII, provided that, if there are specific requirements of a given country that are significant and in addition to requirements of the Major Territories, the Parties will enter into good faith discussions whether additional resources and costs are required, with the intent of minimizing any additional cost to XENCOR. + +***Confidential Treatment Requested 17 + + + + + + c. Certain trade secret information may be provided by BII via DMF or similar filing (e.g. to a notified body) directly to the respective authorities. d. For the avoidance of doubt, all summaries and/or reports generated as a result of the BII's performance under this Agreement and delivered to XENCOR by BII will be part of the Process and the sole and exclusive property of BII. Subject to XENCOR's confidentiality and non-use obligations hereunder and without affecting the ownership of Improvements as set forth in Section 8, BII hereby grants to XENCOR a non-exclusive, worldwide license to use and reproduce all such summaries and/or reports for all uses in connection with development activities relating to Product that do not involve manufacturing of Product (e.g., formulation work, toxicology studies or the development of a manufacturing process), regulatory activities relating to the Product and, to the extent necessary, any commercial activities relating to the Product, which XENCOR may sublicense in connection with any license of rights to the Product. 5.2 Use of the Process; Right of Negotiation 5.2.1 Use of the Process outside this Agreement Except as set forth in this Agreement, the Process shall not be used by XENCOR or any third party outside the scope of this Agreement without the prior written consent of BII. 5.2.2 Right of First Negotiation to Manufacture a. XENCOR hereby grants and will make an eventual Business Partner do so, BII a first right to negotiate to manufacture and supply Product for use in Phase 2 and 3 clinical trials. XENCOR shall provide BII written notice (i) of the completion of the Phase 1 clinical trials of the Product, which notice shall include reasonable documentation of the results of such Phase 1 clinical trials of the Product or (ii) that XENCOR has entered into an agreement with at least one Business Partner, whichever of (i) and (ii) occurs earlier. If BII provides XENCOR written notice of its exercise of the first right to negotiate within [...***...] after receipt of such written notice from XENCOR, then for a period of [...***...] following such written notice from BII or such longer period as agreed in writing by BII and XENCOR (or its Business Partner) (the "Clinical Negotiation Period"), XENCOR (or its Business Partner) and BII will negotiate in good faith an agreement for the manufacture and supply of Product for use in Phase 2 and 3 clinical trials, at market rate terms and conditions common for the contract manufacture of monoclonal antibodies within the contract manufacturing industry, to be mutually agreed in writing by the Parties. If BII does not provide written notice of its exercise of the first right to negotiate within such [...***...] period, XENCOR and any Business Partner shall be free to enter into one or more agreements with third parties for the manufacture and supply of Product for use in Phase 2 and 3 clinical trials. If BII provides written notice of its exercise of the first right to negotiate within such [...***...] period but BII and XENCOR (or its Business Partner) do not enter into such a contract manufacturing agreement within the Clinical Negotiation Period, XENCOR and any Business Partner shall be free to enter into one or more agreements with third parties for the manufacture and supply of Product for use in Phase 2 and 3 clinical trials (which may include an agreement for any Business Partner or its affiliate to manufacture and supply Product for clinical trials), provided that the supply price for Product is no more than [...***...] percent ([...***...]%) of the clinical supply price of Product last proposed by BII during the negotiations between the Parties (or BII and the Business Partner). If the supply price for Product proposed by a third party (which may include a Business Partner or its affiliate) is more than [...***...] percent ([...***...]%) of the clinical supply price of Product last proposed by BII during the negotiations between the Parties (or BII and the Business Partner) , XENCOR (or its Business Partner) shall provide written notice to BII that XENCOR (and its Business Partner) will accept the clinical supply price last proposed by BII, and BII and XENCOR (or its Business Partner) will enter into a contract manufacturing agreement reflecting such clinical supply price; provided that, if BII does not agree to enter into such contract + +***Confidential Treatment Requested 18 + + + + + + manufacturing agreement within [...***...] after such written notice, XENCOR (or its Business Partner) shall be free to enter into an agreement with a third party (or an agreement for the Business Partner or its affiliate to manufacture and supply Product). b. In addition, if BI has exercised its first right of negotiation in Section 5.2.2.a, XENCOR hereby grants and will make an eventual Business Partner do so, BII a first right to negotiate to manufacture and supply commercial Product as Principal Supplier for a period up to the [...***...], starting with the first commercial launch of the Product. XENCOR shall provide BII written notice (i) of the decision to have the Product manufactured at a commercial scale and to launch the Product commercially or (ii) that XENCOR has entered into an agreement with at least one Business Partner, whichever of (i) and (ii) occurs earlier. If BII provides XENCOR written notice of its exercise of the first right to negotiate within [...***...] after receipt of such written notice from XENCOR, then for a period of [...***...] following such written notice, or such longer period as agreed in writing by BII and XENCOR (or its Business Partner) (the "Commercial Negotiation Period"), XENCOR (or its Business Partner) and BII will negotiate in good faith an agreement for the manufacture and supply of commercial Product as Principal Supplier, at market rate terms and conditions common for the contract manufacture of monoclonal antibodies within the contract manufacturing industry to be mutually agreed in writing by the Parties. If BII does not provide written notice of its exercise of the first right to negotiate within such [...***...] period, XENCOR and any Business Partner shall be free to enter into one or more agreements with third parties for the manufacture and supply of commercial Product (which may include an agreement for any Business Partner or its affiliate to manufacture and supply commercial Product). If BII provides written notice of its exercise of the first right to negotiate within such [...***...] period but BII and XENCOR (or its Business Partner) do not enter into such a contract manufacturing agreement within the Commercial Negotiation Period, XENCOR and any Business Partner shall be free to enter into one or more agreements with third parties for the manufacture and supply, of commercial Product (which may include an agreement for any Business Partner or its affiliate to manufacture and supply commercial Product); provided that the supply price for Product is no more than [...***...] percent ([...***...]%) of the commercial supply price of Product last proposed by BII during the negotiations between the Parties (or BII and the Business Partner). If the supply price for Product proposed by a third party (which may include a Business Partner or its affiliate) is more than [...***...] percent ([...***...]%) of the commercial supply price of Product last proposed by BII during the negotiations between the Parties (or BII and the Business Partner), XENCOR (or its Business Partner) shall provide written notice to BII that XENCOR (and its Business Partner) will accept the commercial supply price last proposed by BII, and BII and XENCOR (or its Business Partner) will enter into a contract manufacturing agreement reflecting such commercial supply price; provided that, if BII does not agree to enter into such contract manufacturing agreement within [...***...] after such written notice, XENCOR (or its Business Partner) shall be free to enter into an agreement with a third party (which may include an agreement for any Business Partner or its affiliate to manufacture and supply Product). c. The right set forth in Section 5.2.2.b shall automatically terminate if BII does not exercise the first right of negotiation set forth in Section 5.2.2.a. The rights set forth in Section 5.2.2.a and b shall automatically terminate if BII does not produce a viable Process for manufacture of Product as evidenced by failure to produce cGMP Product within a timeframe reasonably and customary in the biopharmaceutical industry for companies of comparable size and the respective activities. d. In both cases set forth above, in Section 5.2.2.a. and b., if BII exercises its first right of negotiation, BII and XENCOR (and/or its Business Partner, as applicable) will negotiate in good faith a respective contract manufacturing agreement based on the market rate + +***Confidential Treatment Requested 19 + + + + + + terms and conditions common for the contract manufacture of monoclonal antibodies within the contract manufacturing industry, it being understood that any such contract manufacturing agreement would provide for Technology transfer, payment of the Technology Access Fee (if applicable), and other terms set forth in Sections 5.2.3, 5.2.4 and 5.2.5 below. e. Any use of the Process by XENCOR or any third party outside the terms and conditions set forth in such contract manufacturing agreement is always subject to the provisions set forth in Section 5.2.3 below. f. In the event that BII elects not to exercise its first right of negotiation described in Section 5.2.2.a or 5.2.2.b, or, despite their commercially reasonably efforts and good faith negotiations the Parties (or BII and the Business Partner) are unable to agree upon a manufacturing agreement within the Clinical Negotiation Period or, Commercial Negotiation Period, as applicable; and/or XENCOR (and/or XENCOR's Business Partner) wishes to use the Process outside the terms and conditions set forth in a contract manufacturing agreement with BII, BII shall transfer the Process in accordance with Section 5.2.3 below. g. All of BII's rights of negotiation set forth in this Secti6n 5.2.2 shall terminate upon payment of the Technology Access Fee by XENCOR. 5.2.3 Technology Access Fee and Technology Transfer In the event that XENCOR wishes to use or have used (e.g. by a Business Partner) the Process outside this Agreement or the terms and conditions set forth in a contract manufacturing agreement with BII, except as provided below, XENCOR shall pay BII a technology access fee of three million five hundred thousand (3,500,000.00) US dollars (the "Technology Access Fee"). In the event that XENCOR pays the Technology Access Fee set forth above, XENCOR shall have the right to use or have used (e.g. by a Business Partner) the Process worldwide for the manufacture of Product in accordance with the terms and conditions of this Agreement, without entering into a contract manufacturing agreement with BII. Notwithstanding the foregoing, no Technology Access Fee shall be due or payable if BII does not produce a viable Process for manufacture of Product as evidenced by failure to produce cGMP Product within the timeframe agreed in the Project Plan or, if factors outside of the reasonable control of BII (such as e.g. a cell-line not suitable for production, delay in the growth of the cell line; shortage of raw materials and supplies, delay or non­performance of BII's suppliers, requests or orders of governments or regulatory authorities, etc.) require the timeframe in the Project Plan to be extended, the extended timeframe agreed upon in writing between BII and XENCOR that is reasonable and customary for paying customers in the biopharmaceutical industry for companies of comparable size and the respective activities. In addition, no Technology Access Fee shall be due or payable in connection with XENCOR's election to use or have used (e.g. by a Business Partner) the Process if (i) BII does not exercise its first right to negotiate under either Section 5.2.2.a or 5.2.2.b, (ii) BII exercises its first right to negotiate but demands a supply price for clinical/commercial supply of Product that exceeds the bid price for the clinical/ commercial supply of Product of a comparable quantity and quality by a third party biopharmaceutical CMO of comparable size and respective activities to BII and with registered headquarters in the Major Territories, or (iii) XENCOR (or its Business Partner) has entered into a contract manufacturing agreement with BII, but BII is not able to supply XENCOR and its Business Partners [...***...] of the Product required. For the avoidance of doubt, nothing in this Section 5.2.3 (ii) shall affect such contract manufacturing agreement or BII's position as Principal Supplier, but XENCOR may solely request the Technology Transfer pursuant to the following sentences of this Section without paying the Technology Access Fee in order to have manufactured the amount of Product missing to satisfy XENCOR's and its Business Partners' demand. + +***Confidential Treatment Requested 20 + + + + + + For the avoidance of doubt, the Technology Access Fee is only due one time, and if XENCOR pays the Technology Access Fee, except for the Project Fees, no additional amount will be payable for use or having used the Process worldwide. The Technology Access Fee includes Technology transfer support of [...***...] FTEs of BII for a period of [...***...] for each of the [...***...] FTEs in a time frame of [...***...] beginning with XENCOR's written request to use or have used (e.g. by a Business Partner) the Process outside the terms and conditions set forth in a contract manufacturing agreement with BII. Further support of BII requested by XENCOR shall be reimbursed at an hourly rate of [...***...] US dollars. The Parties will agree upon the times when to render such Technology transfer support in good faith. Promptly following XENCOR's election to use the Process, BII shall start to transfer the Process and all reasonably necessary related BII Confidential Information and Know-How) to XENCOR or such designee experienced in the biopharmaceutical production and shall use commercially reasonable efforts, taking into consideration BII's entire contract manufacturing business and other contract manufacturing contracts, to transfer the Process as quickly as possible (and in any event within [...***...] from receipt of XENCOR's written election notice). Both Parties agree and XENCOR will make its Business Partner agree that BII may, however, select the way how to render such support of any Technology transfer at its own discretion, in particular but not only any support of such Technology transfer to a company whose primary business is providing biopharmaceutical CMO services (including e.g. a Technology transfer outside the BI Facility), provided, however, that BII's exercise of such discretion is not unreasonable. XENCOR and/or any third party may not use the Process outside the terms and conditions set forth in a contract manufacturing agreement with BII except as set forth in Section 5.2.2 and this Section 5.2.3 and provided that XENCOR or it Business Partner strictly adhere to the license conditions set forth in Sect ion 5.2.5 herein. 5.2.4 Payment Terms The Technology Access Fee, as applicable, shall be paid to BII upon completion of the Technology transfer described in Section 5.2.3 and shall be payable in accordance with the provisions set forth under Sections 3.2 and 3.3 above. Parties agree that the Technology transfer shall be completed upon the transfer of Process and all reasonably necessary related BII Confidential Information and Know-How. 5.2.5 License Subject to XENCOR's adherence to the obligations under this Agreement, BII hereby grants XENCOR a worldwide, irrevocable, exclusive, sublicensable and royalty free license to use the Process and all reasonably necessary related BII Confidential Information and Know- How, BII Technology and BII Intellectual Property for the sole purpose of making and having made the Product; provided that such license shall become effective only upon complete payment of the Technology Access Fee, as applicable. 5.3 Acknowledgement The Parties acknowledge that nothing in this Agreement shall limit or restrict XENCOR, itself or with or through any third party, from developing and using any process (except for the Process) for the manufacture of any of its products, including the Product, provided that no BII Confidential Information and Know-How is used and XENCOR adheres to its confidentiality and non-use obligations hereunder and complies with the ownership of intellectual property and Improvements as set forth in Section 8 below. + +***Confidential Treatment Requested 21 + + + + + + 6 Representations, Warranties and Indemnification 6.1 Mutual Representations, Warranties and Covenants Each Party hereby represents, warrants and covenants to the other Party as follows as of the Effective Date: a. it is a corporation duly organized and validly existing under the laws of the state or other jurisdiction of incorporation or formation; and b. the execution, delivery and performance of this Agreement by such Party has been duly authorized by all requisite corporate action; and c. it has full corporate authority to execute and deliver this Agreement and to perform its obligations hereunder, and the Agreement is binding upon it in accordance with it terms; and d. it has the right, without restriction, to grant the licenses granted under this Agreement. 6.2 XENCOR Warranties XENCOR hereby warrants that: a. XENCOR has the right to provide the Material, the XENCOR Technology, the XENCOR Intellectual Property and all XENCOR Confidential. Information and Know-How under this Agreement and to the best of its Knowledge at the Effective Date that there are no third party rights that will limit or restrict use thereof by BII in accordance with this Agreement; and b. to the best of its Knowledge at the Effective Date XENCOR is not aware of any special or unusual hazards involved in handling the Materials and/or Product of which it has failed to inform BII; and that it will inform BII immediately of any changes related thereto after the date of execution of this Agreement; and c. at the Effective Date, no third party has asserted any claim or lawsuit against XENCOR claiming that use of the Material, XENCOR Technology, the XENCOR Intellectual Property and the XENCOR Confidential Information and Know-How infringes any intellectual property owned by a third party, and it will promptly notify BII in writing should it become aware of any claims by a third party asserting that use of such infringes any third part intellectual property rights owned by such third party. d. it will use commercially reasonable efforts to conduct and complete a clinical trial phase 1 regarding the Product; and e. it will use commercially reasonable efforts to find and enter into an agreement with a suitable Business Partner. For avoidance of doubt, all XENCOR liability or indemnification obligations that might result from representations and the warranties under this Section 6 are always subject to the limitations set forth in Section 7.4 of this Agreement. 6.3 BII Warranties BII hereby warrants that: a. BI is entitled to use the BI Facility and BII Confidential Information and Know-How, for the purposes set forth in this Agreement; and b. BII at the Effective Date, it is not aware of any special or unusual hazards that would arise as a result of its carrying out of the Projects as planned; and c. at the Effective Date, it has not been debarred, nor is it subject to a pending debarment, and that it will not, to the best of its Knowledge, use in any capacity in connection with 22 + + + + + + the Services under this Agreement any person, who has been debarred pursuant to section 306 of the FDCA, 21 U.S.C. § 335a, or who is the subject of a conviction described in such section. BII agrees to notify XENCOR in writing immediately if it has Knowledge that BII or any person who is performing Services is debarred or is the subject of a conviction described in section 306, or if any action, suit, claim, investigation, or proceeding is pending, or to BII's Knowledge, is threatened, relating to the debarment or conviction of BII or any person performing Services under this Agreement; and d. to the best of its Knowledge at the Effective Date its performance under this Agreement including, but not limited to, the BII Technology and its use in the Process, by BII, XENCOR or a third party manufacturer of XENCOR does not infringe the intellectual property rights of any third party and it will promptly notify XENCOR in writing should it become aware of any claims asserting such infringement or of any third party intellectual property rights, that would be infringed by the BII Technology and its use in the Process. For the avoidance of doubt, the currently pending Cabilly dispute is excluded and will be addressed/ compensated by XENCOR once applicable: and e. as of the Effective Date no third party has asserted any claim or lawsuit against BII claiming infringement of any intellectual property owned by a third party with relation to BII Technology and/or the Process, or any part or component thereof. For avoidance of doubt, all BII liability or indemnification obligation that might result from representations and the warranties under this Section 6 are always subject to the limitations set forth in Section 7.4 of this Agreement. 6.4 Process for Defense of Infringement of Third Party Intellectual Property Subject to each Party's indemnification obligations, in the event that there occurs a Claim (as defined below), the Parties shall follow the following procedures with respect to the defense of the Claim: a. BII agrees that if a third party threatens or asserts any claim or files any lawsuit, claiming that BII Intellectual Property utilized under this Agreement and necessary for manufacture and production of the Product in accordance with this Agreement, including, without limitation, the BII Technology or the Process, or the use thereof, constitutes infringement of any intellectual property owned by a third party (each, a "Claim"), BII will promptly and timely inform XENCOR of such Claim, and BII shall have the first right to negotiate, litigate and/or settle any such Claim, and shall defend any such Claim unless it would not be commercially reasonable for BII to bear the reasonably anticipated losses, damages, costs and expenses arising from any settlement or judgment resulting from such Claim. For the avoidance of doubt, the term "commercially reasonable", as used in this paragraph a. shall be determined (i) in the context of BII's entire business related to the intellectual property that is the subject to the Claim, where the Claim asserts infringement that impacts aspects of BII's business beyond the XENCOR relationship, and (ii) if the Claim asserts infringement that is limited only to activities performed for XENCOR, in the context of the entire relationship between XENCOR and BII. b. BII will keep XENCOR reasonably informed about such negotiation or litigation at all times, including all material events related thereto, and in the event that the amounts paid or to be paid by BII in settlement of any such Claim or group of related or unrelated Claims appear reasonably likely to exceed, individually or in the aggregate, BII's indemnification obligations, or any contemplated settlement would place any obligations or restrictions upon XENCOR or the Product, then BII shall immediately inform XENCOR. c. XENCOR shall not be responsible to pay for any costs of any settlement by BII of any Claim(s) (including, without limitation, any payments resulting of such settlement) that 23 + + + + + + exceed BII's indemnification obligations or be bound by any obligations or restrictions agreed to by BII in any such settlement, in case such settlement is made without the prior written consent of XENCOR, which may be granted or withheld in its sole discretion. d. In the case that BII decides not to negotiate, litigate or settle any Claim, XENCOR shall have the right to negotiate, litigate and settle any such Claim, and, provided that XENCOR decides to pursue such negotiation, litigation or settlement, BII will provide all commercially reasonable cooperation to XENCOR such that XENCOR may appropriately defend such Claims. 6.5 Disclaimer of Warranties EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT, NEITHER PARTY MAKES ANY WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, WITH RESPECT TO ANY INTELLECTUAL PROPERTY, TECHNOLOGY, RIGHTS, RESULTS OF THE PROJECTS, MATERIAL, THE DELIVERABLES OR OTHER SUBJECT MATTER OF THIS AGREEMENT OR THAT THE PROJECTS WILL RESULT IN A COMMERCIALLY-VIABLE PROCESS, INCLUDING, WITHOUT LIMITATION, WARRANTIES OF MERCHANTABIIITY AND FITNESS FOR A PARTICULAR PURPOSE. 7 Liability, Indemnification, Limitations and Insurance 7.1 General BII has no control over the manner in which XENCOR intends to use the results of the Project, the Product or the Deliverables, if any, obtained in the Project and in particular does not know or control how XENCOR intends to use such Product or results in clinical studies. 7.2 Liability a. Of BII Always subject Section 7.4, in consideration of the aspects set forth in Section 7.1, BII shall only be liable for any losses, damages, costs or expenses including, without limitation, reasonable attorneys' fees of any nature ("Losses") incurred or suffered by XENCOR or its Affiliated Companies or any third party (including but not limited to Business Partners) to the extent such Losses are arising from either (i) BII's non­compliance with the warranties given under Sections 6.1 and 6.3 of this Agreement, or (ii) gross negligence or willful acts or omissions of BII or its Affiliated Companies in performing its obligations under this Agreement. BII shall not be liable to XENCOR or be obligated to indemnify XENCOR or its Representatives under Section 7.3 for any Losses incurred or suffered by XENCOR, its Affiliated Companies or by any third party, arising out of any dispute or other claims or proceedings made by or brought against XENCOR and/or its Affiliated Companies with respect to XENCOR's use of any results of the Project, the Deliverables (including but not limited to the Product, if any), the Process, the BII Technology and/or the BII Confidential Information and Know-How, obtained (including but not limited to the use under a license that may be granted under this Agreement) under this Agreement including, without limitation, product liability claims, except to the extent such Losses are caused by the gross negligence or wilful acts or omissions of BII or its Affiliated Companies in performing its obligations under this Agreement, nor shall BII be responsible in any way for dealing with any such disputes, claims or proceedings. 24 + + b. Of XENCOR Always subject to Section 7.4, XENCOR shall be liable for any Losses incurred or suffered by BII, its Affiliated Companies or by any third party arising from either (i) XENCOR's non­compliance with the warranties given under Sections 6.1 and/or 6.2 of this Agreement, or (ii) BII's or XENCOR's use of XENCOR Confidential Information and Know­How, the Material, the XENCOR Intellectual Property and/or the XENCOR Technology in accordance with this Agreement, or (iii) XENCOR's use of the Deliverables (including but not limited to the Product, if any), or (iv) XENCOR' s use of the Process, the BII Technology, the BII Confidential Information and Know-How, and/or any other results of the Project or this Agreement, not in accordance with this Agreement. XENCOR shall not be liable to BII or its Affiliated Companies or be ob1igated to indemnify BII or its Representatives under Section 7.3 for any Losses incurred or suffered by BII or its Affiliated Companies or any third party arising out of any dispute or other claims or proceedings made by or brought against BII or its Affiliated Companies with respect to BII's use of the BII Confidential Information and Know-How, the Material, the XENCOR Intellectual Property, and/or the XENCOR Technology or BII's use of the license granted to BII under Section 8.2.5.a outside the scope of this Agreement, in each case except to the extent such liability is caused by the gross negligence or wilful acts or omissions of XENCOR, or its Affiliated Companies in performing its obligations under this Agreement, nor shall XENCOR be responsible in any way for dealing with any such disputes, claims or proceedings. 7.3 Indemnification a. BII's Indemnification Obligations Always subject to Section 7.4, BII shall indemnify, defend and hold XENCOR, its Affiliated Companies and their respective officers, employees and agents (the "Representatives") harmless from and against all Losses incurred by them as a result of third + + + + + +party claims based on or resulting from (i) BII's non­compliance with the warranties given under Sections 6.1 and 6.3 of this Agreement, or (ii) any gross negligence or wilful acts or omissions of BII or any of its Affiliated Companies in performing its obligations under this Agreement. b. XENCOR's Indemnification Obligations Always subject to Section 7.4, XENCOR shall indemnify, defend and hold BII and its Representatives harmless from and against all Losses incurred by them as a result of third party claims based on or resulting from (i) BII's use of the XENCOR Confidential Information and Know-How, the Material, the XENCOR Intellectual Property and/or the XENCOR Technology in accordance with this Agreement; or (ii) XENCOR's non­compliance with the warranties given under Sections 6.1 and 6.2 of this Agreement, or (iii) XENCOR's use of the Deliverables (including but not limited to the Product, if any), or (iv) XENCOR' s use of the Process, the BII Technology, the BII Confidential Information and Know-How, and/or any other results of the Project or this Agreement, not in accordance with this Agreement. 7.4 Limitation of Liability and Indemnification Obligations With the exception of wilful misconduct by a Party, and such cases where a limitation of liability and/or indemnification is not possible under applicable law, for which cases there shall be no limitation, any and all liability and/or indemnification obligations of each of BII and XENCOR under this Agreement shall be: a. excluded for incidental, indirect, consequential, punitive or special damages (provided that the foregoing shall not exclude a Party's right to consequential or incidental 25 + + + + + + damages for any negligent or intentional breach of confidentiality and non-use obligations under Section 9); and b. each Party's aggregate liability and/or indemnification obligations towards the other Party under this Agreement shall not exceed an amount equal to the average annual aggregate amount paid or to be paid by XENCOR to BII hereunder; provided, however, that in the case of a Party's negligent or intentional breach of confidentiality and non­use obligations pursuant to Section 9, this limitation of liability shall be increased to twice the average annual aggregate amount paid or to be paid by XENCOR to BII hereunder; provided however that the foregoing Subsections a. and b. of this Section 7.4 shall not limit XENCOR' s liability and indemnification obligation towards BII with respect to any third party claims according to clause (iii) and (iv) of Section 7.3 b. regarding any use of the Deliverables (in particular the Product) in humans and/or with respect to any third party claim that BII's use of the Material to manufacture the Product infringes any issued patent owed by such third party (excluding any such claim based specifically on use of the Process but not on the use of the Material). 7.5 Insurance XENCOR and BII shall obtain and/or maintain during the term of this Agreement and for a period of [...***...] thereafter, liability insurance in amounts which are reasonable and customary in the biopharmaceutical industry for companies of comparable size and the respective activities (i.e. BII as CMO and XENCOR as sponsor/pharmaceutical company) at the respective place of business and such liability insurance shall insure against all mandatory liability, including liability for personal injury, physical injury and property damage. BII shall have the right to reasonably self insure. 8 Intellectual Property 8.1 Existing Intellectual Property Rights BII hereby acknowledges that XENCOR is the owner of XENCOR Confidential Information and Know-How and the XENCOR Technology and BII shall acquire no rights, title or interest whatsoever in or to any of XENCOR Confidential Information and Know-How and/or XENCOR Technology, except as specifically provided for in this Agreement. XENCOR hereby acknowledges that BII is the owner of BII Confidential Information and Know-How and the BII Technology and XENCOR shall acquire no rights, title or interest whatsoever in or to any of BII Confidential Information and Know-How and/or the BII Technology, except as specifically provided for in this Agreement. 8.2 New Intellectual Property, Project Results and Licenses 8.2.1 XENCOR Improvements that (i) relate specifically to XENCOR Confidential Information and Know-How and/or the Product (or any modification, derivative or fragment thereof), and (ii) do not relate to BII Confidential Information and Know­How (collectively, "XENCOR Intellectual Property"), will be exclusively owned by XENCOR and XENCOR shall control patent prosecution and maintenance thereof. BII (on behalf of itself and its Affiliated Companies) agrees to assign and hereby assigns to XENCOR all right title and interest it may have in any XENCOR Intellectual Property. BII shall provide reasonable assistance to XENCOR for any action which may be necessary to assign or otherwise transfer any rights to XENCOR Intellectual Property contemplated by this Section 8.2.1. BII shall notify XENCOR within [...***...] of becoming aware of such XENCOR Intellectual Property. + +***Confidential Treatment Requested 26 + + + + + + 8.2.2 BII Improvements that (i) relate specifically to BII Confidential Information and Know-How, and (ii) do not relate to XENCOR Confidential Information and Know­How (collectively, "BII Intellectual Property") will be exclusively owned by BII, and BII shall control patent prosecution and maintenance thereof. XENCOR agrees to assign and hereby assigns to BII all right title and interest it may have in any BII Intellectual Property. XENCOR shall provide reasonable assistance to BII for any action which may be necessary to assign or otherwise transfer such rights to BII Intellectual Property contemplated by this Section 8.2.2. 8.2.3 Other Improvements Any Improvements that are neither XENCOR Intellectual Property nor BII Intellectual Property shall be defined as "Other Improvements" and shall be jointly owned by BII and XENCOR, with the Parties entitled to practice the same as joint owners, without duty of accounting to the other Party and with the right to license to others without consent of the other Party. BII shall notify XENCOR within [...***...] days of becoming aware of such Other Improvements. Each Party agrees to assign and hereby assigns to the other Party such right title and interest it may have in any Other Improvements as necessary to effect joint ownership of the Other Improvements by BII and XENCOR. Each Party shall provide reasonable assistance for any action which may be necessary to assign or otherwise transfer such rights to Other Improvements to Parties as joint owners. BII shall have the first right to prosecute and maintain patent rights within the Other Improvements, at its expense, provided that if BII elects not to prosecute or maintain an Other Improvement it shall provide written notice to XENCOR, and XENCOR may elect to take over responsibility for prosecution and maintenance of such Other Improvement, at its own expense, by providing written notice to BII, in which case all rights to such Other Improvement shall be assigned to XENCOR. For the avoidance of doubt, except as expressly stated otherwise in Section 10.3, Parties agree that XENCOR's use of the Process is always subject to Section 5.2.3, 5.2.4 and 5.2.5. For the avoidance of doubt, (i) know-how pertaining to manufacturing of biopharmaceuticals generally and gained during the course of performing this Agreement may be freely used by BII in its biopharmaceutical business without any restrictions, provided, that, notwithstanding the foregoing, BII may not use any Other Improvement that relates specifically to the Product. a. Each Party shall ensure that all of such Party's (or its Affiliated Company's) employees or contractors acting on its behalf pursuant to this Agreement are and will be obligated under a binding written agreement or by law to assign to such Party all inventions and rights on the inventions made under this Agreement so that such Party can comply with the terms of this Agreement. b. Subject to the terms and conditions contained in this Agreement, BII shall be responsible for filing, prosecution and maintenance of patent applications and patents granted or generated under this Agreement and owned by BR. XENCOR shall be responsible for filing, prosecution and maintenance of patent applications and patents granted or generated under this Agreement and owned by XENCOR. c. BII shall keep XENCOR and XENCOR shall keep BII reasonably informed about prosecution of any patent applications and maintenance of any patents generated under this Agreement. 8.2.4 Licenses to Xencor BII grants to XENCOR the license set forth in Section 5.2.5 as provided therein. 8.2.5 Licenses to BII a. Freedom to operate XENCOR hereby grants to BII and BII herewith accepts a non exclusive, worldwide, irrevocable, sublicensable (in several cascades), perpetual, royalty-free/fully paid up license under the XENCOR Intellectual Property to the extent it is generally applicable to the manufacturing of biopharmaceutical products, handling 27 + + + + + + of cell lines and/or development of manufacturing processes, to use such XENCOR Intellectual Property in for the manufacture of biopharmaceutical products, handling of cell lines and/or development of manufacturing processes, but excluding any use with respect to the Product (or any modification, derivative or fragment thereof). BII expressly agrees not to practice any XENCOR Intellectual Property specific to the Product or for any purpose other than as expressly provided in this Section 8.2.5. b. Performance of Project: During the term of this Agreement, XENCOR hereby grants to BII and BII hereby accepts for the purpose of pursuing the Project a non-exclusive, non-sub-licensable (except to Affiliated Companies), royalty-free, license to use the XENCOR Confidential Information and Know-How, the Material, the XENCOR Intellectual Property and/or any part of the Other Improvements for the sole purpose to develop the Process, and for the manufacturing of the Product for clinical purposes in accordance with this Agreement. BII expressly agrees not to use or practice any XENCOR Confidential Information and Know- How, the Material, and/or the XENCOR Intellectual Property for any purpose other than performance or the Services in accordance with this Agreement, except if otherwise expressly permitted in this Agreement. 9 Confidentiality 9.1 General The Parties agree, for the duration of this Agreement and a term of [...***...] after the Effective Date: (a) to hold in strict confidence all Confidential Information and Know­How of a Party ("Disclosing Party") or its Affiliated Companies which has been or will be made available to the other Party ("Receiving Party") or its Affiliated Companies, and not to disclose such Confidential Information and Know­ How of the Disclosing Party to any third party whatsoever, (b) not to use such Confidential Information and Know-How of the Disclosing Party for any purpose other than those set forth herein. For clarification, all XENCOR Confidential Information and Know-How, XENCOR Technology and XENCOR Intellectual Property shall be Confidential Information and Know-How of XENCOR and XENCOR shall be the Disclosing Party and BII shall be the Receiving Party with respect thereto, and all BII Confidential Information and Know-How, BII Technology and BII Intellectual Property shall be Confidential Information and Know-How of BII and BII shall be the Disclosing Party and XENCOR shall be the Receiving Party with respect thereto. The Receiving Party undertakes to protect the Disclosing Party's Confidential Information and Know ­How against unauthorized access by third parties using all commercially reasonable efforts. If Confidential Information and Know-How is disclosed by Disclosing Party or its Affiliated Companies other than in written or electronic form, then Receiving Parties' obligations of confidentiality and non­use shall only apply if the Confidential Information and Know­How is indicated upon disclosure as being confidential and is then summarised electronically or in writing and provided to Receiving Party within [...***...] after initial disclosure. Notwithstanding the foregoing, in no event shall a failure to provide such an electronic or written summary preclude either Party from asserting that such information is Confidential Information and Know-How. The obligations to keep secret, not to disclose and not to use the Disclosing Party's Confidential Information and Know­How or parts thereof shall not apply in the event that the respective Confidential Information or and Know-How such parts thereof: + +***Confidential Treatment Requested 28 + + + + + + a. can be shown by written documentation to have been known to Receiving Party or its Affiliated Companies prior to disclosure by the Disclosing Party or its Affiliated Companies hereunder or under the MTA (in no event will Confidential Information and Know- How of the Disclosing Party that is generated by the Receiving Party or its Affiliated Companies (e.g., Improvements that are XENCOR Intellectual Property) be considered to be known by the Receiving Party or its Affiliated Companies prior to disclosure by the Disclosing Party or its Affiliated Companies), b. is or comes into the public domain by publication or otherwise through no breach of this Agreement or the MTA, or c. can be shown by written documentation to have been made known to Receiving Party or its Affiliated Companies from another source free from any obligation of confidentiality and was not obtained either directly or indirectly from Disclosing Party or its Affiliated Companies, or d. can be shown by written documentation to have been independently developed or created by Receiving Party or its Affiliated Companies without access to the other Party's Confidential Information and Know­How (in no event will Confidential Information and Know-How of the Disclosing Party that is generated by the Receiving Party or its Affiliated Companies (e.g., Improvements that are XENCOR Intellectual Property) be considered to be independently developed by the Receiving Party or its Affiliated Companies). Confidential Information and Know-How not be deemed to be in the public domain merely because they may be derived from one or more items which are publicly known. Receiving Party shall not disclose Disclosing Party Confidential Information and Know-How to any third party without the prior written consent of Disclosing Party, except to such of the Receiving Party's or its Affiliated Companies' responsible employees and/or advisors to whom it is necessary to disclose such Confidential Information and Know-How for purpose set forth herein. Before such Confidential Information and Know-How is disclosed to such employees and/or advisors, Receiving Party shall first impose on such employees and/or advisors confidentiality and non-use obligations not less stringent than those set forth herein, however, the imposition of such obligations shall not relieve Receiving Party of its obligations hereunder. In the event that Receiving Party or its Affiliated Companies are required by law, regulation, rule, act or order of any governmental authority or agency to disclose the Disclosing Party's Confidential Information and Know­How, the Receiving Party or its Affiliated Companies shall be entitled to do so provided that Receiving Party shall first notify Disclosing Party forthwith of any such required disclosure and limit such disclosure as far as is possible under applicable law. Such disclosure shall, however, not relieve Receiving Party of its other obligations contained herein. Furthermore, a Receiving Party may make such disclosures of the Disclosing Party's Confidential Information and Know­How to governmental entities to the extent reasonably necessary in connection with pursuit of intellectual property protection, development and commercialization activities related to the Product as contemplated by this Agreement, and approvals to use and sell the Product. Moreover, XENCOR may disclose BII Confidential Information and Know-How to entities (i) with whom XENCOR has (or may have) a marketing and/or development collaboration for the Product (including an actual or potential Business Partner) or (ii) that are actual or potential investors in or acquirers of XENCOR, to the extent reasonably necessary for the pursuit of such actual/ potential collaboration or relationship pursuant to (i) or (ii), and, in both cases, who have a specific need to know such information and who are bound by obligations of confidentiality and restrictions on use similar to those set forth in this Agreement, provided always that XENCOR may not disclose any BII 29 + + + + + + Confidential Information and Know-How to any company whose primary business is providing biopharmaceutical CMO services except with BII's prior written consent. 9.2 MTA Superseded The confidentiality and non-use obligations under the MTA shall be superseded hereby and all information disclosed pursuant to the MTA shall be Confidential Information and Know-How subject to this Agreement. 9.3 Controlled Technology XENCOR hereby agrees and covenants that if it or its Affiliated Companies intend to provide Confidential Information and Know-How to BII or its Affiliated Companies that XENCOR has Knowledge may be listed on the Commerce Control List or the Chemical Weapons Convention Schedules of Chemicals, both contained within the U.S. Export Administration Regulations (hereinafter "Controlled Technology"), then XENCOR shall notify promptly BII of such Knowledge as soon as possible prior to such intended disclosure. In order for BII to take any appropriate precautionary actions before receipt of such Controlled Technology and to ensure compliance with U.S. export laws, XENCOR shall, before providing the Controlled Technology: a. identify all Confidential Information and Know-How of XENCOR that may be Controlled Technology; and b. inform BII, to the extent known to XENCOR, where the Controlled Technology is listed on the Commerce Control List or the Chemical Weapons Convention Schedules of Chemicals and what restrictions apply to the export or disclosure of the Controlled Technology under U.S. law. XENCOR further agrees to cooperate with BII by providing upon request information and other assistance necessary for the export classification, export documentation and export licensing, if required, for the Controlled Technology under U.S. export laws. In any event, XENCOR hereby agrees that it will not disclose Controlled Technology to BII or its Affiliated Companies without the express prior consent of BII. 10 Term and Termination 10.1 Term This Agreement shall take effect as of the Effective Date and shall expire upon completion of the Project as set forth in the Project Plan and after payment of all payments due and payable according to this Agreement, unless terminated earlier in accordance with this Agreement. 10.2 Termination of this Agreement 10.2.1 If it is apparent to either Party at any stage of the Project that it will not be possible to carry out the Project for scientific, technical or business reasons, such Party may terminate this Agreement upon one hundred eighty (180) days prior written notice to the other Party. 10.2.2 Termination for Material Breach: This Agreement may be terminated at once by written notice by either Party, if the other Party breaches this Agreement in any material manner and shall have failed to remedy such default within thirty (30) days after written notice thereof from the terminating Party. 10.3 Effects of Termination of this Agreement 30 + + + + + + 10.3.1 Effect of Termination prior to completion of the Phase 1 clinical trial with the Product as described in Section 2.8.3. a. In the event of termination by XENCOR according to Section 10.2.1 prior to completion of the Phase 1 clinical trial with the Product as described in Section 2.8.3 for technical and/or scientific reasons, XENCOR shall have no obligation to pay BII any or all of the Total Amount. For the avoidance of doubt, in such case, XENCOR may not use the Process outside BII, except as otherwise agreed in writing by XENCOR and BII. b. In the event of termination by XENCOR according to Section 10.2.1 prior to completion of the Phase 1 clinical trial with the Product as described in Section 2.8.3. for any other reason than the reasons set forth under Section 10.3.1.a the Total Amount shall be limited to all non-cancellable expenses reasonably incurred by BII in accordance with the Project Plan prior to such termination in respect of the purchase of supplies or raw materials, and reasonable wind-down costs not to exceed sixty (60) days. BII shall mitigate all wind-down costs and non-cancellable expenses to the extent possible. Campaigns cancelled shall be paid as provided for in Section 4.2 above. For the avoidance of doubt, in such case, XENCOR many not use the Process outside BII, except as otherwise agreed in writing by XENCOR and BII. c. In the event of termination by BII according to Section 10.2.1 prior to completion of the Phase 1 clinical trial with the Product, XENCOR shall have no obligation to pay BII any or all of the Total Amount. The use of the Process is subject to Section 5.2.3, 5.2.4 and 5.2.5. d. In all of the foregoing cases a.-c., at the request of XENCOR and to the extent available at BII, BII shall destroy the Material or deliver the Material to XENCOR at XENCOR's cost and shall promptly return all XENCOR Confidential Information and Know­How to XENCOR; except for a copy and/or sample of each material for documentation purposes only, which shall remain to the confidentiality and non­use provisions in Section 9, and shall refrain from using the Material. Except for the foregoing, BII's responsibility to keep and store the Material and any other materials shall terminate one hundred eighty (180) days after expiration or termination of the respective Project or this Agreement. In the foregoing cases a.-c., XENCOR shall promptly return all BII Confidential Information and Know-How to BII, except for a single copy and/or sample for documentation purposes only, which shall remain to the confidentiality and non-use provisions in Section 9, and shall refrain from using the Process, except as contemplated in Section 10.3.1.c or 10.3.1.d. For the a voidance of doubt, in the event of a termination by XENCOR as contemplated in clause b of this Section 10.3.1, Section 3.1.2.c shall continue in effect, but Section 3.1.2 shall not survive in the event of any termination described in clause a. and c. 10.3.2 Effect of Termination after completion of the Phase 1 clinical trial with the Product as described in Section 2.8.3. a. In the event of termination by XENCOR according to Section 10.2.1 after completion of the Phase 1 clinical trial with the Product as described in Section 2.8.3 for technical and/or scientific reasons, XENCOR shall have no obligation to pay BII any or all of the Total Amount. For the avoidance of doubt, in such case, XENCOR may not use the Process outside BII, except as otherwise agreed in writing by XENCOR and BII. For the avoidance of doubt, in the event of a termination as contemplated in this Section 10.3.2a, Section 3.1.2 c shall survive. b. In the event of termination by XENCOR according to Section 10.2.1 after completion of the Phase 1 clinical trial with the Product as described in Section 2.8.3 for a reason not listed in Section 10.3.2.a, the Total Amount shall be limited to all non-cancellable expenses reasonably incurred by BII in accordance with the Project Plan prior to such 31 + + + + + + termination in respect of the purchase of supplies or raw materials, and reasonable wind-down costs not to exceed sixty (60) days. BII shall mitigate all wind-down costs and non-cancellable expenses to the extent possible. Campaigns cancelled shall be paid as provided for in Section 4.2 above. For the avoidance of doubt, in the event of a termination as contemplated in this Section 10.3.2b, Section 3.1.2.c shall continue in effect. The use of the Process is subject to Sections 5.2.3, 5.2.4 and 5.2.5. c. In the event of termination by BII according to Section 10.2.1 after completion of the Phase 1 clinical trial with the Product, XENCOR shall have no obligation to pay BII any or all of the Total Amount. The use of the Process is subject to Sections 5.2.3, 5.2.4 and 5.2.5. For the avoidance of doubt, in the event of a termination as contemplated in this Section 10.3.2c, Section 3.1.2 shall not survive. 10.3.3 Effect of Termination due to Material Breach a. In case of a termination by BII according to Section 10.2.2, the Total Amount shall become immediately due and BII shall be free to claim for damages according to the applicable law and, subject to Section 7.4 above. All licenses granted by either Party to the other Party hereunder shall be null and void. For the avoidance of doubt, XENCOR may not use the Process outside BII, except as otherwise agreed in writing by XENCOR and BII; except that, if XENCOR has already exercised its rights under Sections 5.2.3, 5.2.4 and 5.2.5, all such rights granted prior to termination shall remain in effect. b. In case of a termination by XENCOR according to Section 10.2.2, XENCOR shall have no obligation to pay BII any or all of the Total Amount, and subject to Section 7.4 above, XENCOR shall be free to claim for damages according to the applicable law. All licenses granted by XENCOR to BII hereunder shall be null and void. For the avoidance of doubt, Section 3.1.2 shall not survive in the event of termination as described in this Section 10.3.3.b. The use of the Process is subject to Sections 5.2.3, 5.2.4 and 5.2.5. 10.4 Surviving Provisions Upon any expiration or termination of this Agreement by either Party pursuant to Section 10.2, all rights and obligations of the Parties under this Agreement shall terminate and be of no further force or effect, except as otherwise expressly set forth below in this Section 10.4 and in Section 10.3. The expiration or termination of this Agreement for any reason shall not release either Party from any liability that, at the time of such expiration or termination, has already accrued to the other Party or that is attributable to a period prior to such expiration or termination. The following provisions of this Agreement shall survive expiration or termination of this Agreement for any reason: Section 1 (Definitions), Section 3 (Payments) except as expressly set forth in Section 10.3; Section 5 (Ownership and Use of Project Data), Section 6.4 (Process for Defense of Infringement of Third Party Intellectual Property); Section 6.5 (Disclaimer of Warranties); Section 7 (Liability, Indemnification, Limitations and Insurance); Section 8 (Intellectual Property), but excluding the last sentence of the first paragraph of Section 8.2.3 (Other Improvements) referring to Sections 5.2.3, 5.2.4 and 5.2.4 except to the extent that those sections are expressly stated to survive termination as set forth in Section 10.3, and excluding Section 8.2.5b; Section 9 (Confidentiality); Section 10.3 (Effects of Termination of this Agreement), including the provisions referenced in Section 10.3 as continuing after termination, as applicable; Section 10.4 (Surviving Provisions); and Section 11 (Miscellaneous). 11 Miscellaneous 11.1 Force Majeure Neither Party shall be in breach of this Agreement if there is any failure of performance under this Agreement (except for payment of any amounts due hereunder) occasioned by any reason 32 + + + + + + beyond the control of either Party, including, without limitation, any act of God, fire, act of government or state, war, civil commotion, insurrection, embargo, prevention from or hindrance in obtaining energy or other utilities, or labour disputes of whatever nature. 11.2 Conflict with Improvements under the MTA The Parties agree that with respect to the ownership of intellectual property rights and/or ownership of Improvements, this Agreement shall prevail over the terms and conditions of the MTA and shall also cover the term of the MTA. 11.3 Secrecy Agreement between the Parties The Parties agree that all information exchanged pursuant to the Secrecy Agreement between the Parties with effectiveness as of June 28, 2011 shall be Confidential Information and Know-How protected in accordance with this Agreement, and such Secrecy Agreement shall be superseded by the terms of this Agreement and shall have no further force or effect. 11.4 Publicity XENCOR or BII may issue the mutually agreed press release attached as Appendix 8 announcing the execution of this Agreement. Except as provided in the preceding sentence, no press release or other form of publicity regarding a Project or this Agreement shall be permitted by either Party to be published unless both Parties have indicated their consent to the form of the release in writing. The same applies, to any changes in the press release attached as Appendix 8. Nothing in this Section shall prevent the Parties from disclosing this Agreement, if and as far as required by applicable laws, rules or regulations. However, the disclosing Party shall inform the other Party well in advance whenever reasonably possible and shall provide the opportunity to comment on such required disclosure (e.g. under SEC rules). In addition, subject to XENCOR's compliance with Section 9.1, nothing in this Section shall prevent XENCOR from disclosing the status of development, regulatory approval or commercialization of the Product. 11.5 Notices Any notice required or permitted to be given hereunder by either Party shall be in writing and shall be (i) delivered personally, (ii) sent by registered mail, return receipt requested, postage prepaid or (iii) delivered by facsimile with immediate confirmation of receipt, to the addresses or facsimile numbers set forth below: If to BII: Boehringer Ingelheim International GmbH Binger Straße 17355216 Ingelheim Federal Republic of Germany Attention: Mr. Alois Konrad (Global Dept. Biopharma Contract Manufacturing Business) Fax: 0049- 7351/54 - 4845 Phone: 0049- 7351/54 - 96145 33 + + + + + + If to XENCOR: 111 West Lemon Avenue Monrovia, CA 91016 Attention: Chief Executive Officer Phone: (626) 305-5900 Fax: (626) 305-0350 11.6 Applicable Law and Arbitration This Agreement shall be exclusively governed by and construed in accordance with the laws of the State of New York, USA without regard to its conflict of laws provisions. The application of the UN Convention on Contracts for the International Sale of Goods is excluded. The Parties agree that all disputes, claims or controversies arising out of, relating to, or in connection with this Agreement, including any question regarding its formation, existence, validity, enforceability, performance, interpretation, breach or termination, shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce ("ICC") by one arbitrator appointed in accordance with said rules. The exclusive place of arbitration shall be New York State of New York, USA and the proceedings shall be conducted in English language. The award for arbitration shall be final and binding and may be enforced in any court of competent jurisdiction against BII or XENCOR. Nothing in this Section shall prevent any Party, before an arbitration has commenced hereunder or any time thereafter during such arbitration proceedings, from seeking conservatory and interim measures, including, but not limited to temporary restraining orders or preliminary injunctions, or their equivalent, from any court of competent jurisdiction. The Parties further agree that a. except as may be otherwise required by applicable laws, rules or regulations, neither Party, its witnesses, or the arbitrator may disclose the existence, content, results of the arbitration hereunder without prior written consent of both Parties; and b. neither Party shall be required to give general discovery of documents, but may be required only to produce specific, identified documents, or narrow and specific categories of documents, which are relevant to the case and material to its outcome and reasonably believed to be in the custody, possession or control of the other Party; and c. decisions ex aequo et bono or in equity are not permissible. 11.7 Entire Agreement This Agreement (including the Exhibits and Schedules attached hereto) constitutes the entire agreement between the Parties relating to its subject matter and supersedes all prior or contemporaneous agreements, understandings or representations, either written or oral, between XENCOR and BII with respect to such subject matter (including the Secrecy Agreement effective as of June 28, 2011). 11.8 Waiver; Amendment No waiver of any term, provision or condition of this Agreement whether by conduct or otherwise in any one or more instances shall be deemed to be or construed as a further or continuing waiver of any such term, provision or condition or of any other term, provision or 34 + + condition of this Agreement. No amendment or modification of any provision of this Agreement shall be effective unless in writing signed by a duly authorized representative of each Party. No provision of this Agreement shall be varied, contradicted or explained by any oral agreement, course of dealing or performance or any other matter not set forth in an agreement in writing and signed by a duly authorized representative of each Party. 11.9 Severability If any provision of this Agreement is held to be invalid or unenforceable by a court of competent jurisdiction all other provisions shall continue in full force and effect. The Parties hereby agree to attempt to substitute for any invalid or unenforceable provision a valid and enforceable provision which achieves to the greatest extent possible the economic legal and commercial objectives of the invalid or unenforceable provision. 11.10 Dispute Resolution Any dispute relating to the Project shall first be submitted for resolution to the Steering Committee. 11.11 Assignment This Agreement shall be binding upon the successors and assigns of the Parties and the name of a Party appearing herein shall be deemed to include, the names of its successors and assigns. This Agreement shall not be assignable by either Party, except with the written + + + + + +consent of the other Party hereto; provided, however, that either Party may assign this Agreement without the other Party's consent to an acquiring party in connection with the transfer or sale of all or substantially all of the business of such Party to which this Agreement relates to such acquiring party, whether by merger, sale of stock, sale of assets or otherwise, provided that in the event of such a sale or transfer (whether this Agreement is actually assigned or is assumed by the acquiring party by operation of law (e.g,. in the context of a reverse triangular merger)). 11.12 Independent Contractors Nothing in this Agreement is intended, or shall be deemed, to establish a joint venture or partnership (or any fiduciary duty) between XENCOR and BII. Neither Party to this Agreement shall have any express or implied right or authority to assume or create any obligations on behalf of, or in the name of, the other Party, or to bind the other Party to any contract, agreement or undertaking with any third party. 11.13 Counterparts This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. 35 + + + + + + IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed as of the Effective Date. + + + + + + Monrovia, February 16 2012 + + Biberach, February 13, 2012 + + + + + + + + + + XENCOR, Inc. + + Boehringer Ingelheim International GmbH + + + + + + + + + + + + ppa. ppa. + + + + + + + + /s/ Bassil Dahiyat + + + + + + /s/ Alois Konrad + + + + /s/ Dr. Andreas Felder Bassil Dahiyat + + + + + + Alois Konrad + + + + Dr. Andreas Felder President and CEO + + + + + + + + + + + + + + 36 + + + + + + List of Appendices: Appendix 1: Material and Product Appendix 2: Project Plan Appendix 3: Members of the Project Team, Steering Committee and Chief Executive Officers Appendix 4: MTA Appendix 5: Quality Agreement Appendix 6: Specifications, incl. shipping and packing instructions agreed by the Parties (to be attached upon agreement of the Parties) Appendix 7: Summary Plan for Phase 1 Clinical Trials Appendix 8: Press Release 37 + + + + + + Appendix 1: XmAb®6755 : Anti­TNF_Adalimumab_lgG1/2_M428L/N434S_Xtend Heavy Chain ORF (Protein) [...***...] [...***...] [...***...] [...***...] [...***...] [...***...] + +***Confidential Treatment Requested 38 + + + + + + [...***...] [...***...] [...***...] + + [...***...] + + [...***...] + + [...***...] + + [...***...] + + [...***...] + + [...***...]] + + [...***...] + + [...***...] + + [...***...] + + [...***...] + + [...***...] + + [...***...] + + + +***Confidential Treatment Requested 39 + + + + + + + + + + [...***...] [...***...] + + [...***...] + + [...***...] + + 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Material Version of December 19, 2011 45 + + + + + + [...***...] […***…] […***…] […***…] […***…] […***…] […***…] […***…] […***…] […***…] […***…] […***…] […***…] […***…] […***…] […***…] […***…] […***…] […***…] […***…] […***…] […***…] […***…] […***…] […***…] […***…] + +***Confidential Treatment Requested 46 + + + + + + [...***...] […***…] […***…] + +***Confidential Treatment Requested 47 + + + + + + [...***...] […***…] […***…] […***…] […***…] […***…] […***…] […***…] […***…] + + […***…] […***…] […***…] […***…] […***…] […***…] + +***Confidential Treatment Requested 48 + + + + + + [...***...] […***…] […***…] […***…] […***…] […***…] […***…] […***…] […***…] […***…] […***…] […***…] + +***Confidential Treatment Requested 49 + + + + + + + + [...***...] + + […***…] […***…] […***…] […***…] […***…] […***…] […***…] […***…] […***…] […***…] […***…] […***…] […***…] + + […***…] […***…] […***…] […***…] […***…] […***…] […***…] + +***Confidential Treatment Requested 50 + + + + + + [...***...] […***…] 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+***Confidential Treatment Requested 83 + + + + + + [...***...] […***…] […***…] […***…] […***…] […***…] […***…] + +***Confidential Treatment Requested 84 + + [...***...] […***…] […***…] […***…] […***…] […***…] […***…] […***…] […***…] […***…] + +***Confidential Treatment Requested 85 + + + + + + [...***...] […***…] […***…] […***…] […***…] […***…] […***…] […***…] […***…] […***…] […***…] […***…] […***…] […***…] […***…] […***…] + +***Confidential Treatment Requested 86 + + + + + + [...***...] […***…] […***…] […***…] […***…] […***…] […***…] […***…] […***…] […***…] […***…] […***…] + +***Confidential Treatment Requested 87 + + + + + + Exhibit 1 [...***...] + + [...***...] + + + + [...***...] + + + + [...***...] + + + + + + [...***...] + + [...***...] + + + + + + + + + + + + + +[...***...] [...***...] + + + + [...***...] [...***...] [...***...] + + + + [...***...] + + + + + + [...***...] + + + + [...***...] [...***...] + + + + + + [...***...] [...***...] [...***...] + + + + [...***...] + + + + 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[...***...] + + […***…] + + + + + + + + + + + + + + + + + + […***…] […***…] […***…] + + + + […***…] […***…] + +[…***…] + +[…***…] + + + + […***…] […***…] […***…] + + + + + +[…***…] + + + + […***…] […***…] […***…] […***…] + + + + + +[…***…] […***…] + + […***…] + + + + + + […***…] […***…] […***…] […***…] + + + + […***…] […***…] + + […***…] + + + + […***…] […***…] + + […***…] + + + + […***…] […***…] […***…] + + + + […***…] […***…] […***…] […***…] […***…] + + + + + +[…***…] + + + + […***…] […***…] […***…] + + + + + +[…***…] + + + + + + + + + + + + + +***Confidential Treatment Requested 93 + + + + + + + + [...***...] + + […***…] Exhibit 5 […***…] + + […***…] + + […***…] […***…] […***…] […***…] […***…] […***…] […***…] […***…] […***…] + +***Confidential Treatment Requested 94 + + Exhibit 6 […***…] […***…] + + + + + + […***…] + + + + + + […***…] + + […***…] + + […***…] + + […***…] […***…] + + + + + + + + + + + + + + + + […***…] + + + + + + […***…] + + + + + + + + + + […***…] + + + + + + + + + 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+***Confidential Treatment Requested 100 + + + + + + Appendix 8: Press Release February 8th, 2012 Boehringer Ingelheim GmbH Corporate Communications: Heidrun Thoma +49/6132 77 3966 Heidrun.Thoma@boehringer-ingelheim.com Twitter: www.twitter.com/boehringer Xencor Media Contact Heidi Chokeir, Ph.D. Canale Communications Tel: 619-849-5377 heidi@canalecomm.com Boehringer Ingelheim and Xencor Enter a Collaboration Agreement for the Development, Manufacture, and Supply of Biosuperior Monoclonal Antibodies Antibodies engineered with Xencor's proprietary Xtend™ technology for increasing antibody half­life MONROVIA, Calif., USA and INGELHEIM, Germany — February 14 , 2012 — Xencor, Inc., a company using its proprietary Protein Design Automation® (PDA) platform technology to engineer next­generation antibodies, and Boehringer Ingelheim announced today a collaboration agreement for certain Xencor biosuperior monoclonal antibodies. Under the terms of the agreement, Boehringer Ingelheim will provide all manufacturing and product supply from preclinical through Phase I development. Xencor is responsible for preclinical and clinical studies and retains all development and commercial rights to products under the agreement. Upon successful advancement of clinical programs beyond Phase 1 development, Boehringer Ingelheim has certain manufacturing rights to supply clinical and commercial material to Xencor. "Xencor has developed deep portfolio of biosuperior antibodies with the potential for superior clinical and commercial performance, and this collaboration agreement with Boehringer Ingelheim allows us to establish an important relationship with the leading global contract manufacturer of biologics," said Bassil Dahiyat, Ph.D., president and CEO of Xencor. "Xencor and Boehringer Ingelheim will share the financial risk in early preclinical and clinical development with the incentive of sharing in future success of the programs." "We are delighted to start this collaboration with Xencor. It reflects one of our new business models in the contract manufacturing in which both parties are enabled to focus on their core competencies", stated Corporate Senior Vice President Simon Sturge at Boehringer Ingelheim Biopharmaceuticals. "We are convinced that this creates a win­win situation for both parties." Xencor's lead biosuperior compound is an anti­TNF antibody engineered using the company's proprietary Xtend™ antibody engineering technology for increasing antibody half­life. Xencor expects to initiate a Phase 1 trial in 2013 potentially resulting in key human pharmacokinetic data validating Xtend technology. 101 + +th + + + + + + About Xencor, Inc. Xencor, Inc. engineers superior biotherapeutics using its proprietary Protein Design Automation® technology platform, and is a leader in the field of antibody engineering to significantly improve antibody half-life, immune-regulatory function and potency. The company is advancing multiple XmAb® antibody drug candidates in the clinic, including XmAb®5871 targeting CD32b and CD19 for autoimmune diseases, and an anti­ CD30 candidate XmAb®2513 for the treatment of Hodgkin's lymphoma. Xencor is also advancing a portfolio of biosuperior versions of blockbuster antibody drugs engineered for superior half-life and dosing schedule. Xencor has entered into multiple partnerships with industry leaders such as Amgen, Pfizer, Centocor, MorphoSys, Boehringer Ingelheim, CSL Ltd. and Human Genome Sciences. In these partnerships Xencor is applying its suite of proprietary antibody Fc domains to improve antibody drug candidates for traits such as sustained half-life and/or potency. For more information, please visit www.xencor.com. About Boehringer Ingelheim The Boehringer Ingelheim group is one of the world's 20 leading pharmaceutical companies. Headquartered in Ingelheim, Germany, it operates globally with 145 affiliates in 50 countries and more than 42,000 employees. Since it was founded in 1885, the family-owned company has been committed for 125 years to researching, developing, manufacturing and marketing novel products of high therapeutic value for human and veterinary medicine. Today, Boehringer Ingelheim is one of the world's leading companies for contract development and manufacture of biopharmaceuticals. All types of services from mammalian cell line or microbial strain development to final drug production can be delivered within a one-stop-shop concept. Boehringer Ingelheim delivers services for pre-clinical development up to global market supply with a strong commitment to its customers at its global manufacturing facilities for mammalian cell culture and microbial fermentation. Boehringer Ingelheim has brought 19 molecules to market and has many years of experience in multiple molecule classes such as monoclonal antibodies, recombinant proteins, interferons, enzymes, fusion molecules and plasmid DNA. Furthermore, high-titer platform technologies for new antibody mimetic formats such as scaffold proteins and antibody fragments are available for the manufacture of customer products. www.biopharma-cmo.com. For more information, please contact: Xencor Inc. Heidi Chokeir, Ph.D. Canale Communications for Xencor Tel: 619-849-5377 heidi@canalecomm.com Boehringer Ingelheim GmbH Heidrun Thoma Corporate communications Boehringer Ingelheim GmbH 55216 Ingelheim/Germany Phone: +49/6132 77 3966 Twitter: www.twitter.com/boehringer More information: bio-cmo@boehringer-ingelheim.com 102 \ No newline at end of file diff --git a/full_contract_txt/XLITECHNOLOGIES,INC_12_02_2015-EX-10.02-STRATEGIC ALLIANCE AGREEMENT.txt b/full_contract_txt/XLITECHNOLOGIES,INC_12_02_2015-EX-10.02-STRATEGIC ALLIANCE AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..ae5ff9cd0a9fef86a1b760d8a18d39716ca26659 --- /dev/null +++ b/full_contract_txt/XLITECHNOLOGIES,INC_12_02_2015-EX-10.02-STRATEGIC ALLIANCE AGREEMENT.txt @@ -0,0 +1,11 @@ +EXHIBIT 10.02 STRATEGIC ALLIANCE AGREEMENT THIS AGREEMENT is made on this 1st day of December, 2015 by and between BOSCH INTERNATIONAL, LLC, a Nevada Limited Liability Company located at 3753 Howard Hughes Pkwy #200 Las Vegas NV 89169 (hereinafter "CLIENT"), and BOSCH TECHNOLOGIES, LLC, a Nevada Limited Liability Company located at 6795 Edmonds Street 3rd Floor, Las Vegas, NV 89118 (hereinafter "BOSCH"). 1. PARTIES: a) BOSCH TECHNOLOGIES, LLC ("BOSCH"); and b) BOSCH INTERNATIONAL, LLC ("CLIENT") 2. STRATEGIC ALLIANCE: Title of this relationship and agreement between BOSCH and CLIENT are detailed as follows: Both CLIENT and BOSCH act as two separate and individual companies operating independently of each other. BOSCH and CLIENT do not have any controlling interest of each other and are independently run and responsible for all of operations, reporting, taxes, liabilities and relationships. BOSCH reserves the right in keeping product generation and delivery confidential in which is not available for any type of audit. BOSCH reserves the right to share rights given unless it disrupts and/or interferes with CLIENTS business and/or productivity. 3. PRODUCT: "Product " BOSCH" has acquired, developed and continues to develop, a business using proprietary "Nano Printed Lights," and associated other products (the "Products"). BOSCH calls this Nano Printed Lights product "Printed LightSheets" which is considered the "Product Name". 4. PRODUCT NAME: "PRINTED LIGHT SHEETS" is the name and title CLIENT will use to market for Nano Printed Lights. 5. RIGHTS GRANTED: BOSCH hereby grants CLIENT the "Exclusive Distribution License Rights" sell and distribute the Products within the "Territory". BOSCH hereby grants CLIENT un-exclusive "Reserved Rights" to sell and distribute the "Product" within the "Territory". 6. EXCLUSIVE RIGHTS: Bosch hereby grants to Client the exclusive rights to sell and distribute the Product, subject to the Territory as set forth below, to certain select companies in the Automotive Industry, each of which shall be approved by Bosch in writing as requested by the Client on a case by case basis. 7. TERRITORY: United States of America and Canada, excluding the US Virgin Islands 8. RESERVED RIGHTS: All business, locations, entities, people, etc... without any limitations. This is in concert and approval with BOSCH and is limited to any and all of BOSCH's current clients. CLIENT will not exercise nor authorize any other Party to to take any action which would reasonably be deemed to derogate from, impair or compete with the Exclusive Rights, Reserved rights, and Rights Granted herein granted. (i) COST OF PRODUCT: Cost is based upon square inch and reserved confidentially. (ii) COST OF PRODUCT TO MARKET: The established price for the market place will be negotiated confidentially but will follow the max and min limitations allowed. Special pricing for large orders and/or custom orders will need written approval (email) from BOSCH. (iv) COST AND EXPENSES FOR CLIENT: All Costs, Marketing, sales reports/delivery, sales staff, office locations and expense as well as miscellaneous delivery costs accrued by CLIENT (including its subsidiaries and affiliates) by reason of, in connection with the products is the sole responsibility of CLIENT. All manufacturing and delivery will be the responsibility of BOSCH. CLIENT is responsible for shipping and delivery cost of product to end user. (v) ASSISTANCE TO CLIENT: In addition to its other obligations under this Agreement, BOSCH shall assist CLIENT in obtaining (and provide all documentation required to obtain) such licenses and/or permits as may be necessary or desirable for the sales and/or Distribution and/or Placement of the Product for city, state and/or federal contract accounts (Exit signs in and on buildings, mandatory safety fixtures, freeway signs, etc...) within the Territory. 1 + + + + + +9. INDEMNITY: Without limiting any other agreement contained in this Agreement, CLIENT agrees to defend, indemnify and hold harmless BOSCH and its parents, subsidiary and affiliated entities, successors, assigns and licensees, and their respective officers, agents, directors, owners, shareholders and employees, harmless from any and all claims, actions or proceedings of any kind and from any and all damages, liabilities, costs and expenses (including reasonable legal fees) relating to or arising out of any claim by a third Party. 10. CONFIDENTIALITY: CLIENT acknowledges that irreparable injury and damage will result from the disclosure to any third party of Proprietary Information associated with the Product and agrees (1) not to disclose any Proprietary Information to any third party, and (2) not to allow any third party to possess, handle, disassemble, touch, photograph, film or otherwise record images of the Product while the Product is upon CLIENT'S premises or in CLIENT'S possession, custody or control if the product is or has not been purchased with a purchase order and payment fulfilled. 11. ENTIRE AGREEMENT: This Strategic Alliance Agreement ("Agreement"), between BOSCH and CLIENT as to the subject matter hereof, and supersede all previous agreements, warranties or representations, oral or written, which may have been made between Studio and Licensor as to the subject matter hereof. By signing in the spaces provided below BOSCH and CLIENT accept and agree to all of the terms and conditions of this Agreement. + +CLIENT BOSCH BOSCH INTERNATIONAL, LLC BOSCH TECHNOLOGIES, LLC 3753 Howard Hughes Pkwy. Suite 200 6795 Edmond St 3rd Floor Las Vegas, NV 89169 Las Vegas NV 89114 /s/ James Schramm /s/ Authorized Agent signature signature print name and title print name and title + +2 \ No newline at end of file diff --git a/full_contract_txt/XLITECHNOLOGIES,INC_12_11_2015-EX-10.1-Sponsorship Agreement.txt b/full_contract_txt/XLITECHNOLOGIES,INC_12_11_2015-EX-10.1-Sponsorship Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..afa04d6425073c4f2dd5ea6660cb4bd0c39811bf --- /dev/null +++ b/full_contract_txt/XLITECHNOLOGIES,INC_12_11_2015-EX-10.1-Sponsorship Agreement.txt @@ -0,0 +1,61 @@ +EXHIBIT 10.1 Sponsorship Agreement Parties This Agreement is effective as of December 1st, 2015 by and between RMF Empire, Inc. DBA West Coast Customs, located at 2101 West Empire Avenue, Burbank, CA 91504 (hereinafter "WCC"), and Bosch International, LLC / XLI Technologies, Inc. located at 3753 Howard Hughes Parkway, Suite 200 Las Vegas, NV 89169 (hereinafter "XLI"). Recitals A. XLI is engaged in the distribution and marketing of "Light Sheets". B. It is the desire and intention of both parties that WCC cooperates with XLI in the marketing and promotion of XLI products and technology ("PROMOTION"). C. In connection with the PROMOTION, WCC and XLI further desire to enter into a relationship to the mutual benefit of both parties. THEREFORE, in consideration of the mutual promises and undertakings contained herein, and for other good and valuable consideration, the parties agree as follows: 1. Promotional Consideration 1.1 Grant of License. 1.1.1 WCC grants a limited, non-exclusive license to XLI to use the West Coast Customs name, image, likeness and signature, including specific West Coast Customs Trademarks (including West Coast Customs logo trademarks and approved West Coast Customs vehicle imagery and trademarks) (collectively the "Trademarks") during the term of this Agreement in connection with national, regional or local print advertising, together with Internet, television, video and on-site event advertising, only in connection with the PROMOTION, subject to all of the terms and conditions hereof. This license shall terminate automatically upon the expiration or termination of this Agreement, at which time XLI shall cease all use of the Trademarks. In further consideration of this Agreement, XLI shall not in any way disparage the Trademarks, nor any of WCC's parent, subsidiary, or affiliated companies' trademarks or its or their products. WCC shall provide XLI with all applicable logos and usage guidelines for the Trademarks. WCC shall have the right of prior written approval over all uses of the Trademarks by XLI. The parties understand and acknowledge the importance of protecting the goodwill associated with their respective trademarks. Consequently, XLI hereby assigns to WCC all goodwill and all other rights developed in connection with XLI's use of WCC's trademarks which shall inure to the benefit of WCC. 1.1.2 XLI grants WCC a limited, non-exclusive, royalty-free license to use the registered trademark "Light Sheets" during the term of this Agreement in connection with national, regional or local print advertising, together with Internet, television, video and on-site advertising, for WCC and its Event(s) during the term of this Agreement, subject to all of the terms and conditions hereof. This license shall terminate automatically upon the expiration or termination of this Agreement, at which time WCC agrees to cease all use of the registered trademark "Light Sheets". In further consideration of this Agreement, WCC agrees that it shall not in any way disparage the brand name "XLI", nor any of XLI's parent, subsidiary, or affiliated companies or its or their products. XLI shall provide WCC with all the applicable logos for the "Light Sheets" trademark. XLI shall have the right of prior written approval over all uses of the trademark "XLI" by WCC. The parties understand and acknowledge the importance of protecting the goodwill associated with their respective trademarks. Consequently, WCC hereby assigns to XLI all goodwill and all other rights developed in connection with WCC's use of XLI's trademarks which shall inure to the benefit of XLI. 1 + + + + + + 1.1.3 Sponsor Identification. WCC shall ensure that all WCC public communications shall make reference to XLI products as "Light Sheets", as further defined in Attachment A [Sponsor Benefits Schedule] attached hereto and incorporated herein by reference. 1.2 Additional Promotional Support. In addition to the items set forth in Section 1.1.3, WCC shall promote XLI as outlined in the Sponsor Benefits Schedule, attached hereto as Attachment A, which shall be deemed an extension of this Agreement. In the event of a conflict between said Sponsor Benefits Schedule and this Agreement, the Sponsor Benefits Schedule shall control. 2. Term and Termination 1. Term. Unless earlier terminated, this Agreement shall take effect on December 1st, 2015 and shall expire on November 30, 2016. XLI and/or WCC may renegotiate and/or cancel this Agreement at any time during its term, in the event any of the following conditions occur: 1. Any significant changes to the Benefits Schedule which cannot be cured as stated in Section 2.2 (Termination upon Breach) 2. By mutual consent of WCC and XLI to pursue other arrangements. 3. In the event either party becomes bankrupt or insolvent. 2.2 Termination upon Breach. This Agreement may be terminated upon written notice by either party in the event of a default by the other party in the performance of any term or condition of this Agreement. Any termination allowed by this Agreement will take place only after written notice of default has been given to the defaulting party, providing such party with thirty (30) days in which to cure the default. 2.3 Survival. Sections 4.1, 5.1, 5.2 and 6 shall survive termination of this Agreement. 3. Agreement Fee 3.1 In consideration of the rights herein granted, and in keeping with XLI's desire to utilize WCC in the PROMOTION of its products and technology, XLI will pay WCC in accordance with Attachment B, which shall be deemed a part of this Agreement. 4. Representations and Warranties 4.1 Each party represents and warrants to the other that: (i) it has the right, and will continue to have the right during the Term, to grant the other party all of the rights granted to it under this Agreement, (ii) neither this Agreement nor the transactions contemplated hereby will cause a violation of any other agreement to which it is a party, and (iii) it has complied, and will comply, with all laws, rules and regulations applicable to the performance of its duties and obligations under this Agreement. 2 + + + + + + 5. Indemnification 5.1 WCC shall indemnify, defend and hold harmless XLI, and its respective affiliates, officers, directors, employees, agents and representatives, from any and all claims, losses, damages, expenses, costs and other liabilities to any person or entity ("Claims") arising out of, relating to or in connection with: (i) the breach by WCC of any of the representations and warranties made by WCC in this Agreement or the failure by WCC to fulfill any of its covenants set forth herein, and (ii) the use by XLI (as approved by WCC) of the WCC Trademarks pursuant to Section 1.1.1, above. Notwithstanding any other provision herein, under no circumstances shall WCC be liable for any claims arising out of the negligent acts or omissions of XLI or third parties. 5.2 XLI shall indemnify, defend and hold harmless WCC, and its affiliates, officers, directors, shareholders, members, employees, agents and representatives, from any and all Claims arising out of, relating to or in connection with: (i) the breach by XLI of any of the representations and warranties made by XLI in this Agreement or the failure by XLI to fulfill any of its covenants set forth herein and (ii) the use by WCC (as approved by XLI) of the "XLI" trademark pursuant to Section 1.1.2, above. Notwithstanding any other provisions herein, under no circumstances shall XLI be liable for any Claims arising out of the negligent acts or omissions of WCC. 6. Insurance 6.1 Both parties shall at all times while this Agreement is in effect and for one (1) year thereafter, at its expense, carry and maintain, at its own expense, insurance on all its operations necessary to comply with insurance laws as applicable. 7. Independent Contractor 7.1 WCC, in performing under this Agreement, shall act as and be an independent contractor, and this Agreement is not intended to and does not create in any manner a principal-agent, employer-employee, partnership or joint venture relationship between WCC and XLI. Neither party shall have the right or authority to assume or to create any obligation or responsibility, expressed or implied on behalf or in the name of the other party or to bind the other party in any manner. 8. Miscellaneous 8.1 Complete Agreement. This Agreement and any attachments, exhibits, or schedules attached to hereto contains the complete agreement between the parties and supersede any prior understandings, representations, covenants or agreements between the parties, written or oral, with respect to said subject matter. 8.2 Approvals. All requests for "approval" hereunder shall be in writing (email) and shall provide the party from whom approval is sought a period of not less than ten (10) days in which to respond. All responses shall be in writing (email) and, in the instance where approval is denied, shall include an explanation for the denial of approval. In the absence of a written (email) response, a request for approval shall be deemed denied. In those instances in which a party has been granted "discretion" hereunder, such right may be exercised in the sole and absolute discretion of the party having such right. 3 + + + + + + 8.3 Non Waiver. No term hereof may be waived or modified except in writing and signed by both parties. The failure or delay by either party in enforcing any of its rights under this Agreement shall not be deemed a continuing waiver or modification thereof, and either party may within the time provided by applicable law, commence appropriate legal proceedings to enforce any or all such rights. 8.4 Section Headings. The various section headings are for convenience only and shall not affect the meaning or interpretation of this Agreement. 8.5 Costs, Attorney's Fee on Breach. If any action is brought by either party under this Agreement whether by suit, arbitration or otherwise by reason of any claim or cause of action against the other, arising out of or in connection with any breach or other non-performance of the provision of this Agreement, then the party which is successful upon any final determination of such claim or cause shall be entitled to recovery of its actual reasonable costs and reasonable attorney's fees incurred therein. 8.6 Provisions not Construed Against Party Drafting Agreement. This Agreement shall be deemed to have been drafted by all parties and in the event of a dispute, no party hereto shall be entitled to claim that any provisions should be construed against any other party by reason of the fact that it was drafted by one particular party. 8.7 Force Majeure. Neither party shall be liable for any failure of or delay in the performance of its respective obligations under this Agreement to the extent such failure or delay is due to circumstances beyond its reasonable control, including (without limitation) fires, floods, wars, civil disturbances, sabotage, accidents, insurrections, blockades, embargoes, storms, explosions, labor disputes, acts of any governmental, and/or any other acts of God or a public enemy, nor shall any such failure or delay give either party the right to terminate this Agreement. Each party shall use good faith efforts to minimize the duration and consequence of any failure of or delay in performance resulting from a force majeure. 8.8 Confidentiality and Publicity. The parties agree: (i) the terms and conditions of this Agreement are confidential and are not to be disclosed to anyone outside of the parties, their officers, employees, agents, and representatives. (ii) no public announcement or disclosure pertaining to details of this Agreement will be made without the prior written consent from the parties. The provisions of this paragraph will survive termination of this Agreement. (iii) Certain technical and other information provided by both XLI and WCC pursuant to this Agreement pertains to confidential matters and trade secrets of XLI and WCC, and their respective parent, subsidiary, and affiliate companies, and is provided to each other in furtherance of internal development efforts. Both parties agree that they will treat any information received from the other party, directly or indirectly, in strict confidence, will not disclose such information to any person, except to its employees and agents who have an immediate "need to know", and will promptly return such information, including all copies or reproductions thereof, to the other party upon termination of this Agreement or at such other time as may be reasonably requested in writing. Confidential information shall not include information which: (i) was known to a party without confidentiality restrictions prior to receipt hereunder, (ii) was or becomes generally publicly known through no fault of the WCC, or (iii) subsequent to receipt hereunder, is made available to a party without confidentiality restrictions by a third party who is legally entitled to do so and who is under no obligation to either party hereunder to maintain the confidentiality of such information. 4 + + + + + + 8.9 Notices. Any notice, request, instruction or other documents permitted or required to be given hereunder by any party to the other parties shall be in writing and delivered personally, by certified U.S. Mail return receipt requested, by nationally recognized reputable overnight courier, or by facsimile transmission as follows: + + + +If to XLI: Bosch International 3753 Howard Hughes Parkway, Suite 200 Las Vegas, NV 89169 Attn: James Schramm Phone : (310) 871-4046 + + + +If to WCC: RMF Empire Inc. 2101 W. Empire Ave. Burbank, CA 91504 Attn: Ryan Friedlinghaus Phone: (818) 237-1287 A party receiving a notice delivered personally shall sign a receipt therefore. Notices by U.S. Mail or facsimile transmission shall contain an acknowledgement of receipt. A party receiving a notice by facsimile or Email shall acknowledge receipt by return facsimile or reply email within two (2) business days of receipt. A party receiving notice by U.S. Mail shall place the acknowledgment in the U.S. Mail, postage prepaid, within two (2) business days of receipt. 8.10 Further Assurances. Each party hereto agrees to execute, acknowledge and deliver such further instruments, and to do all such other acts, as may be reasonably necessary or appropriate in order to carry out the purposes and intents of this Agreement. 5 + + + + + + IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized officers or representatives as of the date and year first written above. RMF EMPIRE, INC. DBA WEST COAST CUSTOMS Bosch International DBA XLI Technologies, Inc. + +By: _____________________________________ By: _____________________________________ + +Name:___________________________________ Name:___________________________________ + +Title:____________________________________ Title:____________________________________ + +Date:____________________________________ Date:____________________________________ + + 6 + + + + + + Attachment A Sponsor Benefits Schedule Provided from WCC to XLI WCC agrees to provide the following to XLI as part of this agreement: 1. WCC will incorporate XLI into other existing WCC relationships and opportunities as appropriate for the products and technology. 2. XLI and the products and technology will receive direct brand mention during any episode produced for 2016 by WCC to the extent the products and technology are used in the production. 3. XLI representatives will be included in WCC media days and will make guest appearances as the support for "Light Sheets". 4. XLI shall receive mentions in all applicable WCC press releases that relate to the "Light Sheets". 5. XLI shall receive 3 thirty second commercial spot times per episode produced for 2016 by WCC. All commercial pre and post production, fulfillment and delivery within deadlines will the responsibility of XLI. 6. WCC shall provide XLI the opportunity to integrate into the WCC SEMA Experience and other trade show Activities that WCC is part of. The terms of such a potential program to be mutually agreed upon under a separate agreement. 7. As part of any episode produced in 2016 by WCC, WCC will include the process of installation of "Light Sheets" on two Lamborghini's including the principal appearances of the owners of these Lamborghini's (CEO of XLI and the inventor of "Light Sheets"), allowing and capturing conversation regarding the direction of the custom work and details of the "Light Sheets". WCC will provide the installation of the "Light Sheets". WCC may elect to do both car simultaneously or separately. XLI and the two car owners will provide, at their expense, the cars and the "Light Sheets" product needed to complete this process in its entirety. For the purposes of the above, episodes are expected to be filmed during January - September 2016, with release dates anticipated for October - December 2016. All of the foregoing sponsor benefits shall be provided within the general parameters provided above. 7 + + + + + + Attachment B Sponsor Benefits Schedule Provided from XLI to WCC: XLI agrees to provide the following to WCC as part of this agreement: 1. Provide WCC with five million five hundred thousand (5,500,000) common stock shares of XLI Technologies, Inc. These shares will be issued within five (5) days of signing of this Agreement. The shares are fully earned and vested upon signing of this Agreement. The shares also have piggyback registration rights. 2. XLI will provide WCC "Light Sheets" at no cost for the exclusive use in the limited operations and production to support the PROMOTION activities. WCC will request "Light Sheets" for use in operations and projects for XLI consideration. XLI may provide "Light Sheets" at no cost for these uses at their sole discretion. WCC has no obligation to purchase "Light Sheets" if XLI is not providing them free of charge. If WCC elects to purchase "Light Sheets" from XLI, the cost charged to WCC will be the current wholesale distributor price. 8 \ No newline at end of file diff --git a/full_contract_txt/XYBERNAUTCORP_07_12_2002-EX-4-SPONSORSHIP AGREEMENT.txt b/full_contract_txt/XYBERNAUTCORP_07_12_2002-EX-4-SPONSORSHIP AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..4c86239673fb402cd671015fcfb931b8666ba908 --- /dev/null +++ b/full_contract_txt/XYBERNAUTCORP_07_12_2002-EX-4-SPONSORSHIP AGREEMENT.txt @@ -0,0 +1,309 @@ +EXHIBIT 4.11 + + SPONSORSHIP AGREEMENT --------------------- + + SPONSORSHIP AGREEMENT dated as of May 1, 2002 (this "Agreement"), by and between XYBERNAUT CORPORATION, a Virginia corporation ("XC"), and ALEX JOB RACING, INC., a Florida corporation ("AJR"). + + W I T N E S S T H - - - - - - - - - + + WHEREAS, XC is the market leader in wearable computers and related solutions and engages in other activities related thereto; and + + WHEREAS, AJR is in the business of operating and maintaining "Le Mans" level racing car teams for the 2002 Le Mans American Racing Season (the "Season"); and + + WHEREAS, XC is desirous of sponsoring an automobile racing team comprised of two (2) Porsche GT racing cars which will be raced and managed during the Season by AJR (the "Team"), in order to enhance market awareness and visibility of XC, and its business and products; and + + WHEREAS, AJR is desirous of providing the aforementioned sponsorship to XC. + + NOW, THEREFORE, in consideration of the terms, covenants and conditions herein contained, and other good and valuable consideration, the receipt and legal sufficiency of which is hereby acknowledged by the parties, XC and AJR agree as follows: + + A G R E E M E N T - - - - - - - - - + + 1. Sponsorship. + + (a) In consideration of the payments, through the issuance of securities to AJR as provided for in Section 3 hereof, AJR agrees to designate XC as an associate sponsor and the "exclusive technology sponsor" for wearable computer technology" of the Team for the Season and grants to XC the rights and benefits of such sponsorship as more fully set forth herein. + + (b) In order to publicly reflect this sponsorship and provide the XC with the goodwill associated with the sponsorship, AJR shall provide and XC shall receive, throughout the Term (as hereinafter defined) of this Agreement the following: + + (i) an XC logo shall be prominently displayed on the front hoods and rear quarters of the two (2) Le Mans level Porsche racing cars (the "Cars"), which will be raced by Team throughout the Season, + + (ii) a large XC logo will be prominently displayed on the transporter vehicles for the Cars, + + (iii) an XC logo shall be displayed on the dashboard of each Car in a prominent and conspicuous place so that the logo will be visible to + + any in-car camera which may be located in either of the Cars. XC acknowledges that the installation and operation of an in-car camera is not within the control of, or guaranteed by, AJR, and + + (iv) XC logo patches (which will be furnished by XC) shall be worn on a prominent place on the uniforms of all of the crew and Team members. + + The size and placement of the XC logos, as mutually agreed upon by XC and AJR, shall be the same size and placement as appearing in the first race of the Season on the Cars, transport vehicles and crew uniforms. XC shall have approval rights over use of its logo by AJR and shall designate which XC trademark identifications are utilized by AJR and how they are used in connection with the logos. The costs and expenses of placing the XC logos on the Cars as contemplated by subsections (ii), (ii) and (iii) of this Section 1(b) shall be borne exclusively by AJR. + + (c) In addition to the logo placements described in Section 1(b) hereof, as part of the sponsorship granted hereby, during the Term of this Agreement, XC shall also receive and AJR shall provide, at AJR's cost and expense (except as otherwise expressly provided), the following: + + (i) AJR shall make one of the Cars available for display at one (1) promotional event to be designated by XC. + + (ii) If requested by XC, XC shall have the right to host XC's employees and invitees at a hospitality tent at the various race venues during the Season, the details of each hospitality event to be agreed to by XC and AJR (such details to include, without limitation, the amount of costs to be paid by XC, the drinks and food service + + + + + + at the event, seating, the availability of VIP parking, etc.). + + (iii) If requested by XC, in its sole discretion, AJR shall make one of the drivers of the Cars available to attend promotional and media events hosted by XC; provided that XC shall pay for the reasonable out-of-pocket costs and expenses incurred by AJR in making the driver available for such events. + + (iv) AJR shall provide a link from its website to XC's website, such linking to be accomplished as soon as possible after the date of this Agreement. AJR shall not &bbsp; make any reference to XC on its website (or modify any approved reference) without XC's prior written approval. + + (v) AJR shall use its best efforts to promote the name, image, brand and reputation of XC and the products and services of XC. In addition, AJR shall assist XC in evaluating various applications of wearable and wireless devices to automobile racing including + + -2- + + potential applications for the use of devices at the track, in the pits, in the stands and generally for crowd control. + + (vi) Subject to the prior approval of Porsche, XC shall have the right to use photographs of the Cars, the drivers and other Team members in connection with the preparation of promotional and marketing materials, without paying any royalty or other fee. If clearance or approvals are required to be obtained in connection with the use of such photographs, AJR shall use commercially reasonable efforts to obtain such clearances and approvals. The extent of the approvals to be sought from the drivers and other Team members shall include the right to use their name, likeness, approved biography and sobriquet in connection with such marketing and promotional materials. + + 2. Other Rights of XC. During the Term of this Agreement, XC shall have the right to identify itself with the Team and to identify itself as an official "technology sponsor for wearable computers" of the Team in any promotional, marking or other materials used by XC. + + 3. Consideration to AJR; Registration Rights. + + (a) In consideration of the rights granted to XC pursuant to Sections 1 and 2 hereof and the provisions of this Agreement, XC shall issue to AJR (i) 125,000 shares (the "Shares") of common stock, par value $0.01 of XC (the "Common Stock"); and (ii) warrants to purchase 50,000 shares of Common Stock (the "Warrants"). The Warrants shall have an exercise price of $1.18 per share being the closing market price for the Common Stock on April 30, 2002 and shall be exercisable for a period of three (3) years from their date of issue. + + (b) In addition to the Shares and Warrants to be issued to AJR pursuant to Section 3(a) hereof, XC agrees to provide to AJR five (5) to eight (8) (as determined by XC in its discretion) MAV(R) wearable computers (the "Units") to be used by AJR to promote XC's products and services as contemplated by Section 1(c)(v). AJR shall have no liability for any damage to or loss of the wearable computers issued to AJR under this Agreement, except to the extent such damage or loss results from the intentional abuse of the equipment by AJR personnel. + + (c) XC shall provide a link from its website to AJR's website. + + (d) XC hereby grants to AJR "piggyback" registration rights with respect to the Shares and the shares of Common Stock underlying the Warrants (collectively, the "Registrable Securities"). Pursuant to such "piggyback" registration rights, XC shall include all of the Registrable Securities in any registration statement filed by XC with respect to its Common Stock (other than on a registration statement on Forms S-8 or S-4 (or any successors to such forms) or relating to any employee stock option plan) with the Securities and Exchange Commission. In the event a registration statement covering all of the Registrable Securities has + + -3- + +not been filed with the Securities and Exchange Commission on or before July 1, 2002, XC agrees to pay to AJR $10,000. XC shall pay to AJR an additional $10,000 for each thirty-day period thereafter (e.g., ending, August 1, September 1, etc.) in which a registration statement has not been filed with the Securities and Exchange Commission for purposes of registering all Registrable Securities. All such payments due hereunder shall be payable on or before the 5th of the month in which such payment becomes due. In the event XC voluntarily withdraws any registration statement submitted to the Securities and Exchange Commission, XC shall be deemed to have never submitted such registration statement for purposes of this paragraph. Unless otherwise agreed by XC and AJR, none of the + + + + + +Registrable Securities shall be sold as part of an underwritten public offering in connection with the registration statement filed pursuant to this paragraph, but, instead, shall be delivered to AJR as unrestricted, freely trading Shares. + + (e) All costs and expenses associated with the registration of the Registrable Securities shall be born by XC.AJR shall provide XC with such information regarding AJR as XC shall request for inclusion in the registration statement and shall indemnify the Company and hold it harmless with respect to any material misstatement or material omission with respect to such information + + (f) All Registrable Securities that are registered pursuant to Section 3(d) hereof shall be subject to the "lock-up" provided for in this Section 3(f) (the "Lock-Up"), and AJR agrees to be bound by the Lock-Up. Pursuant to the Lock-Up, AJR agrees that following the registration of Registrable Securities, it shall not directly or indirectly, sell, transfer, pledge, assign, gift, hypothecate or otherwise dispose of more than 25,000 shares of Common Stock during any five (5) consecutive trading days on the principal securities exchange or securities market where XC's Common Stock is then traded. + + 4. Accredited Investor Representations. In order to induce XC to issue the Shares and the Warrants to AJR, AJR hereby represents and warrants to XC as follows: + + (a) AJR is aware of what constitutes an "accredited investor" as that term is defined under Regulation D promulgated under the Securities Act of 1933, as amended (the "Securities Act"), and under applicable state securities laws, and AJR represents and warrants that is an "accredited investor" for purposes of Regulation D and such state securities laws. + + (b) AJR acknowledges that an investment in the Shares and the Warrants is a speculative investment and involves a high degree of risk, and that XC makes no assurances whatsoever concerning the present or prospective value of the Shares or the Warrants. AJR is able to bear the economic risks of an investment in the Shares and the Warrants, and, consequently, without limiting the generality of the foregoing, is able to hold the Shares and the Warrants for an indefinite period of time and has a sufficient net worth to sustain a loss of its entire investment in the Shares and the Warrants in the event such a loss should occur. + + (c) AJR has had an opportunity to review copies of XC's public filings with the United States Securities and Exchange Commission (the "SEC") (collectively, the "Public Documents"). AJR has had the opportunity to obtain any additional information necessary to verify the accuracy of the information contained in the Public Documents and has been given the opportunity to meet with representatives of XC and to have them answer any questions and + + -4- + +provide any additional information considered relevant by AJR. In making its decision to invest in Shares and the Warrants, AJR has relied solely on the Public Documents. + + (d) AJR is acquiring the Shares and the Warrants for AJR's own account for investment and not with a view to or for resale in connection with any distribution of the Shares or the Warrants. AJR has not offered or sold any portion of the Shares or the Warrants and has no present intention of dividing the Shares or the Warrants with others or of selling, distributing or otherwise disposing of any portion of the Shares or the Warrants either currently or after the passage of a fixed or determinable period of time or upon the occurrence or non-occurrence of any predetermined event or circumstance. AJR is acquiring the Shares and the Warrants for AJR's own account for investment and not with a view to or for resale in connection with any distribution of the Shares or the Warrants. AJR has not offered or sold any portion of the Shares or the Warrants and has no present intention of dividing the Shares or the Warrants with others or of selling, distributing or otherwise disposing of any portion of the Shares or the Warrants either currently or after the passage of a fixed or determinable period of time or upon the occurrence or non-occurrence of any predetermined event or circumstance. Nothing in this Section 4(d) shall limit the ability of the AJR to sell or transfer any of the Shares following the effectiveness of a registration statement concerning the Shares in accordance with Section 3(d) hereof. + + (e) AJR understands that the issuance of the Shares and the Warrants has not been registered under the Securities Act and that the Shares and the Warrants have been issued in reliance upon an exemption therefrom for non-public limited offerings. AJR acknowledges that the Shares and the Warrants constitute "restricted securities" under the Securities Act and they may not be sold, transferred, assigned, pledged or otherwise disposed of, except pursuant to a registration statement that is declared effective under the Securities Act, or an exemption from registration under the Securities Act as determined by XC's legal counsel. AJR further acknowledges and agrees that XC will place an appropriate restrictive legend on the certificates for the Shares and the Warrants, as applicable, to comply with the Securities Act and to identify the Shares and the Warrants as "restricted securities". + + (f) AJR further acknowledges that no United States federal (including, without limitation, the SEC), or state agency or similar agency of any other country, has reviewed, approved, passed upon or made any recommendation or endorsement regarding XC or the Shares or the Warrants. + + (g) AJR acknowledges that XC is relying on the accuracy of AJR's representations and warranties set forth in Section 4 in issuing the Shares and the Warrants to AJR. + + + + + + (h) AJR acknowledges that the certificate for the Registrable Securities shall contain such legends as XC shall consider necessary to ensure compliance with the restrictions of the Securities Act and with the Lock-Up. + + 5. Term. Subject to earlier termination as provided for herein, the term of this Agreement shall commence as of the date hereof and shall terminate at the end of the Season which is scheduled to end on October 12, 2002 (the "Term"). + + -5- + + 6. Licensed Materials. + + (a) XC does hereby grant AJR a limited and non-transferable license and non-exclusive right to use XC's logo and trademarks and service marks set forth on Schedule A attached hereto (the "Licensed Materials") during the Term of this Agreement. AJR shall only be permitted to use the Licensed Materials in connection with the Sponsorship and only in the limited manner expressly permitted as set forth on Schedule A attached hereto. No other use of any of the Licensed Materials by AJR shall be permitted. AJR shall not have the right to modify, alter or change any of the Licensed Materials. All Licensed Materials shall remain the sole and exclusive property of XC and AJR shall not obtain any right, title or interest therein. AJR shall not have any right to sub-license any of the Licensed Materials to any third party. + + (b) Upon the termination of this Agreement, AJR shall immediately cease using any of the Licensed Materials and shall comply with the written directions of XC in connection therewith. + + (c) XC represents and warrants to AJR that XC has the right to grant to AJR the right to use the Licensed Materials as contemplated by this Agreement. + + (d) AJR shall not use any of the Licensed Materials to express or imply any endorsement of any other sponsor of the Team by XC. AJR shall not use any of the Licensed Materials in connection with, or in any way associated with, the names, marks, trademarks, servicemarks, symbols, products, services, logos or proprietary designations or properties of any third party. + + (e) Notwithstanding anything to the contrary herein, AJR and/or Porsche shall be permitted to use photographs of the Cars, transport vehicles and crew uniforms containing XC logos and Licensed Materials for any promotional or marketing purposes during and forever after the term of this Agreement. + + 7. Reputation. AJR shall not take any action or suffer any action to occur, whether taken by the Team or others, which could result in an adverse impact on XC, its Licensed Materials and the goodwill associated therewith as a result of this Agreement. Neither party shall have the right to use the corporate name of the other. + + 8. Representations and Warranties. + + (a) In order to induce the other party hereto to enter into this Agreement, each of XC and AJR hereby represents and warrants to the other party as follows: (i) it is duly organized, validly existing and in good standing under the laws of the jurisdiction of the state of its incorporation, with full power to carry on its business as presently conducted and as contemplated by this Agreement and to execute, deliver and perform this Agreement in accordance with its terms; (ii) this Agreement constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms; and (iii) its execution, delivery and performance of this Agreement does not and will not conflict with, violate or breach any of its constituent documents (including, without limitation, its articles of incorporation and by-laws) or + + -6- + +any material contract or agreement or any decree, order or judgment or any law or regulation to which it is a party or subject or by which it or any of its properties or assets is bound. + + (b) AJR hereby further represents and warrants to XC as follows: + + (i) that AJR entering into this Agreement does not violate any rule or regulation of the entity and/or organization that oversees the Season; and + + (ii) AJR shall not make any representation or warranty that the Cars are owned by or the property of XC. + + 9. Confidentiality Covenant. + + (a) As a consequence of this Agreement and the relationship established hereby, each party may obtain from the other party certain confidential and proprietary and/or non-public information with respect to the other party, including, without limitation, pricing terms, business plans and prospects, sales and marketing techniques, design concepts, information regarding the development, composition and manufacture of products, ideas, drawings, product specifications, trade and industrial secrets, intellectual property rights, financial information, the names and the nature of, business + + + + + +dealings with, suppliers, customers and others, and the other party's structure, organization, commercial and business affairs and financial condition and the other party's trade secrets (collectively "Confidential Information"). Each of XC and AJR acknowledges that the Confidential Information it obtains from the other party hereto constitutes the trade secrets of the disclosing party. AJR and XC each agrees that it shall keep the Confidential Information it receives from the other party hereto strictly confidential and shall not disclose any of the Confidential Information to any other person or entity, or take or use any of the Confidential Information for its own purposes, except as may be required in connection with the performance of its obligations under this Agreement or the enforcement of this Agreement. Notwithstanding the foregoing, a party may disclose the Confidential Information of the other party hereto: (i) if such Confidential Information becomes generally known or available to the public, other than due to a breach of this Agreement by the party receiving the Confidential Information hereunder; (ii) in connection with the enforcement of this Agreement; (iii) pursuant to applicable law, regulation or subpoena; or (iv) if such Confidential Information was disclosed to either AJR or XC, as the case may be, by a source that was not bound, to the knowledge of the party receiving the Confidential Information, to a confidentiality obligation for the benefit of, or fiduciary relationship in favor of, the other party hereto. In furtherance of the confidentiality obligations set forth herein, AJR and XC will adopt and implement appropriate procedures intended to prevent the unauthorized disclosure of Confidential Information that it receives from the other party. The obligations of the parties pursuant to this Section 9 shall survive the expiration or termination of this Agreement. + + (b) In the event that XC and AJR, as applicable, is requested or required (by deposition, interrogatory, request for documents, subpoena, civil investigative demand or similar legal, judicial or regulatory process or as otherwise required by applicable law or regulation) to disclose any of the Confidential Information of the other party hereto, such person shall (i) provide the other party hereto with prompt prior written notice of such request or requirement, + + -7- + +and (ii) cooperate with the other party so that the other party may seek a protective order or other appropriate remedy or, if appropriate, waive compliance with the terms and provisions of this Agreement. In the event that such protective order or other remedy is not obtained, or the other party waives compliance with the terms and provisions hereof, each of XC and AJR, as the case may be, may disclose only that portion of the Confidential Information that such person is advised by legal counsel in writing is legally required to be disclosed. + + (c) Each of XC and AJR agree that money damages would not be a sufficient remedy for any breach of the provisions of this Section 9 and that either XC and AJR, as the case may be, shall be entitled to equitable relief, including, without limitation, injunctive relief and specific performance (without being required to obtain a bond or post other security or prove actual damages), in the event of any breach or threatened breach of any of the provisions of this Section 9 by the other party, in addition to all other rights and remedies available to XC and AJR, as the case may be, whether at law, in equity or otherwise relating to such breach. + + 10. Termination by XC. + + (a) XC may terminate this Agreement upon written notice to AJR upon the occurrence of any of the following events (each an "AJR Event of Default"): + + (i) AJR breaches any material term, provision or covenant of this Agreement on the part of AJR to be observed or performed and such breach is not cured within ten (10) days after written notice of the breach is given by XC; or + + (ii) Any representation or warranty made by AJR in this Agreement shall be materially false or misleading as of the date made; or + + (iii) AJR makes a general assignment for the benefit of creditors or has a custodian, receiver or similar official appointed over it or all or substantially all of its properties or assets; or + + (iv) AJR shall commence any case, proceeding or other action seeking to have an order for relief entered on its behalf as a debtor or to adjudicate AJR as bankrupt or insolvent, or seeking the reorganization, arrangement, adjustment, liquidation, dissolution or composition of AJR or its debts under any applicable law, domestic or foreign, relating to bankruptcy, insolvency, reorganization, dissolution or relief of debtors or seeking the appointment of a receiver, trustee, custodian or other similar official for AJR or for all or a substantial part of its properties or assets; or an involuntary case, proceeding or other action is commenced against AJR by any other party with respect to any of the foregoing, and in the case of any such involuntary case, proceeding or other action, such case, proceeding or other action is not stayed or dismissed within sixty (60) days of the commencement thereof; or + + + + + + -8- + + (v) XC reasonably determines that AJR is using any of the Licensed Materials in a manner that is not permitted by, or inconsistent with, the limited rights granted to AJR hereunder. + + (vi) XC reasonably determines that its continued involvement with AJR or the Term will result in an adverse impact to XC's reputation. + + (b) Early Termination by AJR. AJR shall have the right to terminate this Agreement upon written notice to XC upon the occurrence of any of the following events (each an "AJR Event of Default"): + + (i) XC breaches any material term, provision or covenant of this Agreement on the part of XC to be observed or performed and such breach is not cured within ten (10) days after written notice of the breach is given by AJR; or + + (ii) Any representation or warranty made by XC in this Agreement shall be materially false or misleading as of the date made; or + + (iii) XC makes a general assignment for the benefit of creditors or has a custodian, receiver or similar official appointed over it or all or substantially all of its properties or assets; or + + (iv) XC shall commence any case, proceeding or other action seeking to have an order for relief entered on its behalf as a debtor or to adjudicate XC as bankrupt or insolvent, or seeking the reorganization, arrangement, adjustment, liquidation, dissolution or composition of XC or its debts under any applicable law, domestic or foreign, relating to bankruptcy, insolvency, reorganization, dissolution or relief of debtors or seeking the appointment of a receiver, trustee, custodian or other similar official for XC or for all or a substantial part of its properties or assets; or an involuntary case, proceeding or other action is commenced against XC by any other party with respect to any of the foregoing, and in the case of any such involuntary case, proceeding or other action, such case, proceeding or other action is not stayed or dismissed within sixty (60) days of the commencement thereof. + + (c) Rights Upon An Event of Default. In addition to the rights of termination set forth in Sections 11 (a) and (b), respectively, upon the occurrence of an AJR Event of Default or a XC Event of Default, as the case may be, the other party shall be entitled to all of its rights and remedies under this Agreement, applicable law, in equity or otherwise with respect to the actions or inactions that gave rise to the AJR Event of Default or the XC Event of Default, as the case may be. In addition, upon the occurrence of an AJR Event of Default any of the Warrants which have not been exercised shall automatically terminate and be void and all of the Shares and any shares of Common Stock issued in the exercise of the Warrants shall be purchasable by + + -9- + +XC at the purchase price of $1.00. Upon XC tendering the purchase price, AJR shall promptly deliver to XC the certificates for the Shares and any shares of Common Stock issued upon the exercise of the Warrants, together with duly executed blank stock powers. + + 11. Indemnification. + + (a) AJR shall indemnify each XC Indemnified Party and hold each XC Indemnified Party harmless from and against any and all Losses incurred by any XC Indemnified Party, directly or indirectly, as a result of or based upon any of the following: + + (i) any breach by AJR of any of its agreements, covenants or obligations hereunder; or + + (ii) the use of any of the Licensed Materials in a manner that is not permitted hereby. + + (b) XC shall indemnify AJR and its directors, officers, employees, agents and attorneys and their respective successors and assigns (each an "AJR Indemnified Party") and to hold each AJR Indemnified Party harmless from and against any and all Losses incurred by any AJR Indemnified Party, directly or indirectly, as a result of or based upon, any of the following: + + (i) any breach by XC of any of its agreements, covenants or obligations hereunder; or + + (ii) a claim by any third party that the permitted uses of any of the Licensed Materials hereunder violates or infringes any of the trademarks, tradenames, + + + + + + servicemarks, servicenames or other intellectual property rights of such third party. + + (c) Either party seeking indemnification under this Agreement (the "Indemnified Party") shall give notice to the party required to provide indemnification hereunder (the "Indemnifying Party") promptly after the Indemnified Party has actual knowledge of any claim as to which indemnity may be sought hereunder, and the Indemnified Party shall permit the Indemnifying Party (at the sole cost and expense of the indemnifying Party) to assume the defense of any claim or litigation resulting therefrom; provided, that: (i) counsel for the Indemnifying Party who shall conduct the defense of such claim or litigation shall be reasonably satisfactory to the Indemnified Party; (ii) the Indemnified Party may participate in such defense, but only at the Indemnified Party's own cost and expense; and (iii) the omission by the Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its indemnification obligations hereunder, except to the extent that such omission results in a material impairment of the deficiencies to the Claims asserted. + + (d) The Indemnifying Party shall not, except with the prior written consent of the Indemnified Party, consent to entry of any judgment or administrative order or enter into any settlement that (i) could affect the intellectual property rights or other business interests of the Indemnified Party or (ii) does not include as an unconditional term thereof the giving by the claimant or plaintiff to the Indemnified Party of a release from all liability with respect to such claim or litigation. + + (e) In the event that either (i) the Indemnifying Party does not assume the defense of the claim subject to indemnification within ten (10) business days after receiving written notice of the claim from the Indemnified Party pursuant to Section 12(c) hereof or (ii) the Indemnified Party shall reasonably and in good faith determine that the conduct of the defense of any claim subject to indemnification hereunder or any proposed settlement of any such claim by the Indemnifying Party might be expected to affect adversely the Indemnified Party's intellectual property rights or ability to conduct future business, the Indemnified Party shall have the right at all times to take over and assume control over the defense, settlement, negotiations or lawsuit relating to any such claim at the sole cost and expense of the Indemnifying Party. + + -10- + + (f) For purposes hereof, the term "XC Indemnified Party" shall mean XC and its directors, officers, employees, agents and attorneys and their respective successors and assigns. + + (g) For purpose hereof the term "Losses" shall mean out-of pocket costs and expenses. + + (h) Notwithstanding anything herein to the contrary, AJR's liability under this Section 11 shall not exceed One Hundred Fifty Thousand Dollars ($150,000). In addition, AJR's obligations under Section 11(a) above shall survive for a period of one (1) year after the date of this Agreement. Thereafter, AJR's obligations under Section 11(a) shall terminate and be of no further force and effect, except to the extent of any claims made thereunder by XC prior to such date, which claims shall survive. The indemnification obligations described in Section 11(a), including all limitations on such obligations, shall be the exclusive remedy of the XC Indemnified Parties for any Losses resulting from or based upon any breach by AJR of any of its agreements, covenants or obligations hereunder or the use of any of the Licensed Materials in a manner that is not permitted hereby. + + 12. Independent Entities. This Agreement is being entered into by two (2) independent corporations and nothing herein shall create a partnership, joint venture, fiduciary or other relationship. Neither party has the right or shall represent to any other person or entity that it has the right to legally bind the other party hereto. + + 13. Force Majeure. XC and AJR shall not be liable to the other for any delay or failure to perform its obligations hereunder which is principally the result of the occurrence of an Event of Force Majeure. In the event of any such delay or failure, XC or AJR, as applicable, shall immediately furnish written notice thereof and the reason therefor to the other party. The performance of XC or AJR, as applicable shall be deemed suspended so long as and to the extent that any such Event Force Majeure continues. XC or AJR, as the case may be, shall use its best efforts to cure or correct any such Event of Force Majeure and resume performance of its duties and obligations hereunder, within the shortest period of time possible. For purposes of this Agreement, the term "Event of Force Majeure" shall mean any of the following: war, sabotage, insurrection, riot, the act of any government (de facto or de jure) or any agency or subdivision thereof, acts of terrorism, accident, fire, explosion, flood, storm, hurricane or other acts of God or other similar acts beyond the reasonable control of XC or AJR, as the case may be, which prevents XC or AJR, as the case may be, from performing its obligations hereunder. + + -11- + + 14. Governing Law. This Agreement and all acts and transactions hereunder shall in all respects be governed by and construed in accordance with the laws of the Commonwealth of Virginia, without regard to any of its conflicts of laws principles which would result in the application of the substantive laws of + + + + + +another jurisdiction. This Agreement shall not be construed or interpreted with any presumption against the party that caused this Agreement to be drafted. + + 15. Notices. Any and all notices, consents, instructions and other communications which are required or permitted to be given hereunder or made by one party hereto to the other party hereto shall be in writing and given as follows: (a) by personal delivery; (b) by first-class international mail (postage prepaid); (c) by facsimile; or (d) by overnight delivery by a recognized international express courier company (all costs prepaid), at the following respective addresses or facsimile numbers, set forth below: + + If to XC: Xybernaut Corporation 12701 Fair Lakes Circle, Suite 550 Fairfax, VA 22033 Fax: 703-631-6734 Attention: Mr. Edward G. Newman President + + with copies to: Xybernaut Corporation 12701 Fair Lakes Circle, Suite 550 Fairfax, VA 22033 Fax: 703-631-6734 Attention: H. Jan Roltsch-Anoll, Esq. General Counsel + + and + + Jenkens & Gilchrist Parker Chapin LLP 405 Lexington Avenue New York, NY 10174 Fax: 212-704-6288 Attention: Martin Eric Weisberg, Esq. + + If to AJR: Alex Job Racing, Inc. 551 Southridge Industrial Drive Tavares, FL 32778 Fax: (703) 343-3890 Attention: Alex Job + +or at such other address or facsimile number as either party hereto may designate by notice to the other party hereto in accordance with this Section 15. All such notices, consents, demands, instructions and other communications shall be deemed given (a) on the date delivered, if + + -12- + +delivered, personally; (b) or on the date received if mailed, by first-class international mail (with all postage prepaid); (c) on the date of the facsimile transmission, if received on a business day between the hours of 9:00 a. m. and 6:00 p. m. in the time zone of the intended recipient or on the next business day if received after that time, in each case with an automatic machine confirmation indicating the time of receipt; or (d) on the second business day after delivery&bbsp;to a recognized international overnight express courier company (with all costs prepaid). + + 16. Consent to Jurisdiction. The parties hereby unconditionally and irrevocably consent to the exclusive jurisdiction of the courts of the Commonwealth of Virginia located in Fairfax County and the Federal District Court for the Northern District of Virginia with respect to any action, suit or any proceeding to enforce this Agreement and unconditionally and irrevocably waive the right to trial by jury in any such action, suit or other proceeding. Each of the parties hereby unconditionally and irrevocably waives any right to challenge the jurisdiction of such courts or to assert that such courts constitute an inconvenient forum or that venue in such courts is improper. A party that prevails in any action, suit or other proceeding to enforce this Agreement shall be entitled to be reimbursed for its costs and expenses incurred in connection therewith (including, without limitation, reasonable attorney's fees and disbursements). + + 17. Assignment. Neither this Agreement nor any of the rights, duties and obligations of the parties hereunder may be assigned or delegated by XC or the AJR, as the case may be, without the prior written consent of the other party hereto. Any such assignment or delegation made without the written consent of the other party hereto shall be ab inito null and void and of no force or effect. This Agreement and the provisions hereof shall be binding upon each of the parties hereto, and shall inure to the benefit of their respective successors (whether by merger, consolidation, recapitalization or other similar transaction) and permitted assigns, sublicensees or delegatees. + + 18. Severability. If any term, provision or condition of this Agreement, or the application thereof to any person or circumstance, shall be held by a court or other tribunal of competent jurisdiction to be invalid, illegal or unenforceable, the remainder of this Agreement, and the application of such term, provision or condition to persons or circumstances other than those as to which it is held invalid, illegal or unenforceable shall be unaffected thereby, and each term, provision and condition of this Agreement shall be enforced to the fullest extent permitted by applicable law. + + 19. Further Assurances. The parties agree to do such further acts and things and to execute and deliver such additional documents and instruments as the other party may reasonably request in order to consummate, evidence or + + + + + +confirm the agreement of the parties contained herein in the manner contemplated hereby. + + 20. Amendment: Waiver. This Agreement may not be modified, amended, changed or supplemented, nor may any obligations hereunder be waived or extensions of time for performance be granted, except by a written instrument executed by each of the parties hereto. No waiver of any breach of any agreement, covenant or provision herein contained shall be deemed to be a waiver of any preceding or succeeding breach thereof or of any other agreement, covenant or provision herein contained. Any waiver granted in accordance with the terms of this Agreement shall be limited to the specific instance and purpose for which it is granted. + + -13- + + 21. Entire Agreement. This Agreement, together with the Schedule attached hereto, sets forth the entire understanding and agreement between the parties hereto with respect to the subject matter hereof and it supersedes all prior and/or contemporaneous understandings and agreements (whether written or oral) with respect to such subject matter, all of which are merged herein. There are no covenants, promises, agreements, conditions, understandings, representations or warranties with respect to the subject matter hereof, except those expressly set forth herein. All indemnification obligations of the parties hereunder shall survive the expiration or termination of this Agreement. + + 22. Counterparts, etc. This Agreement may be executed in two (2) or more counterparts (including, without limitation, by means of a facsimile signature), each of which shall be deemed an original, but all of which, when together constitute one and the same instrument. Section headings in this Agreement have been inserted for convenience of reference only and they shall not affect the construction or interpretation of any term or provisions of this Agreement. The use of the singular shall be deemed to include the plural, and the use of the masculine shall be deemed to include the feminine and the neuter, and vice versa, wherever the context so requires. + + IN WITNESS WHEREOF, the parties have executed this Agreement as of the year and day first above written. + + XYBERNAUT CORPORATION + + By: ------------------------------------------ Name: ---------------------------------- Title: --------------------------------- + + ALEX JOB RACING, INC. + + By: ------------------------------------------ Name: ---------------------------------- Title: --------------------------------- + + -14- + +SCHEDULE A + + Licensed Materials + +1. Xybernaut(R); 2. Mobile Assistant(R); 3. MA(R)V; 4. XyberKids(TM); and 5. The Xybernaut logo: + + [GRAPHIC OMITTED][GRAPHIC OMITTED] \ No newline at end of file diff --git a/full_contract_txt/XinhuaSportsEntertainmentLtd_20070221_F-1_EX-99.4_645553_EX-99.4_Content License Agreement.txt b/full_contract_txt/XinhuaSportsEntertainmentLtd_20070221_F-1_EX-99.4_645553_EX-99.4_Content License Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..0e64551e7b24418502f0ca953db88ebc1ed8f67e --- /dev/null +++ b/full_contract_txt/XinhuaSportsEntertainmentLtd_20070221_F-1_EX-99.4_645553_EX-99.4_Content License Agreement.txt @@ -0,0 +1,277 @@ +EXHIBIT 99.4 + + DATED 15TH DECEMBER 2001 + + CHINA ECONOMIC INFORMATION SERVICE OF XINHUA NEWS AGENCY + + AND + + XINHUA FINANCIAL NETWORK LIMITED + + ---------- + + CONTENT LICENSE AGREEMENT SUPPLEMENT TO THE EXCLUSIVE BROADCASTING AGREEMENT + + ---------- + + BAKER & McKENZIE 14th Floor Hutchison House 10 Harcourt Road Hong Kong Tel: 2846-1888 Fax: 2845-0476 + + CONTENT + +Clause Page ------ ---- 1. Definitions and Interpretation....................................... 1 2. Grant of Rights...................................................... 2 3. Delivery of Content.................................................. 3 4. Consideration........................................................ 3 5. Representations and Warranties....................................... 4 6. Indemnity............................................................ 4 7. Term................................................................. 5 8. Termination.......................................................... 5 9. Further Assurance.................................................... 6 10. Entire Agreement; Amendments......................................... 6 11. Severance............................................................ 6 12. No Waiver............................................................ 6 13. Costs And Expenses................................................... 6 14. Counterparts......................................................... 6 15. Notice............................................................... 6 16. Governing Law And Arbitration........................................ 7 Execution................................................................ 8 + +Schedule 1 - Contents + + -i- + +THIS AGREEMENT is made the 15th day of December 2001. + +BETWEEN + +(1) CHINA ECONOMIC INFORMATION SERVICE OF XINHUA NEWS AGENCY, the organisation within the Xinhua News Agency that is responsible for news and information operations and business, registered in the People's Republic of China with offices at 57 Xuanwumen Xidajie, Beijing, the People's Republic of China ( "CEIS"); and + +(2) XINHUA FINANCIAL NETWORK LIMITED, a company incorporated in Hong Kong whose registered office is at Room 2003-4, Vicwood Plaza, 199 Des Voeux Road Central, Hong Kong ("XFN"), + + (collectively referred to as "PARTIES"; individually, a "PARTY"). + +Source: XINHUA SPORTS & ENTERTAINMENT LTD, F-1, 2/21/2007 + + + + + +WHEREAS: + +(A) CEIS is the owner and distributor of certain content of Xinhua News Agency relating to financial and economic information; + +(B) CEIS wishes to appoint XFN as its licensee to distribute the content to users throughout the world in accordance with the terms and conditions of this Agreement. + +IT IS HEREBY AGREED as follows: + +1. DEFINITIONS AND INTERPRETATION + +1.1 In this Agreement unless the context otherwise requires the following words shall have the following meaning: + + "AFFILIATES" means any company, corporation, partnership, joint venture or other entity that directly or indirectly controls, is controlled by or is under common control with XFN; + +"CONTENT" means real-time economic news including articles, reports, data, information and such materials that have or have been and/or will be published from time to time and that is or will be in the possession or control of CEIS from time to time, in respect of the subject matters as more particularly described in Schedule 1; + +EFFECTIVE DATE means 18 May 2000; + +"INTELLECTUAL means patents, trade marks, service marks, trade names, PROPERTY RIGHTS" design rights (whether registrable or not), any applications for the foregoing, copyright and other assignable intellectual property + + -1- + + rights (whether registrable or not) in any country, including but not limited to the format, layout, and the look and feel of any of the Content; + +"TERM" means the term as set out in Clause 7; and + +"TERRITORY" means the world excluding the People's Republic of China. + +1.2 Words importing the singular number shall include the plural and vice versa. + +1.3 Words importing any particular gender shall include all other genders. + +1.4 References in this Agreement to Clauses and Schedules are to clauses of and schedules to this Agreement except where otherwise expressly stated. + +1.5 Headings are used in this Agreement for the convenience of the Parties only and shall not be incorporated into this Agreement and shall not be deemed to be any indication of the meaning of the Clauses or Schedules to which they relate. + +2. GRANT OF RIGHTS + +2.1 Exclusive Rights in the Territory: CEIS hereby grants XFN and its Affiliates an exclusive license (free of all third-party liens, claims and encumbrances) to, and to permit others to, during the Term in the Territory: + +Source: XINHUA SPORTS & ENTERTAINMENT LTD, F-1, 2/21/2007 + + + + + + (a) store or cache the Content in one or more host computers controlled directly or indirectly by XFN or its Affiliates; + + (b) adapt, translate, modify, reproduce, copy, amend, revise or encode the Content; and + + (c) publish, broadcast, distribute, re-distribute, transmit, display, make available to the public or otherwise exploit the Content in any manner by any device or in media now or hereafter known. + +2.2 Non-exclusive Rights in the People's Republic of China: CEIS hereby grants XFN and its Affiliates a non-exclusive license (free of all third-party liens, claims and encumbrances) to, and to permit others to, during the Term in the People's Republic of China: + + (a) store or cache the Content in one or more host computers controlled directly or indirectly by XFN or its Affiliates; + + (b) adapt, translate, modify, reproduce, copy, amend, revise or encode the Content; and + + (c) publish, broadcast, distribute, re-distribute, transmit, display, make available to the public or otherwise exploit the Content in any manner by any device or in + + -2- + + media now or hereafter known. + + During the Term, CEIS agrees not to appoint any other licensees for the distribution of the Content in the People's Republic of China. + +2.3 The Intellectual Property Rights to use "Xinhua" as the first name of XFN and its affiliates world-wide. + +2.4 All Intellectual Property Rights and other proprietary rights in any translated, amended, revised or updated Content independently created by XFN ("AMENDED CONTENT") shall automatically vest in XFN. + +2.5 XFN and/or its Affiliates have the right at any time to suspend or cease distributing or making the Content available to the public. + +2.6 XFN and/or its Affiliates are entitled to publish or distribute content of any third party where such content is similar to or competitive with the Content. + +2.7 XFN and/or its Affiliate(s) shall have the right to charge users to access or view the Content and/or sub-license the Content to third parties for re-distribution to users. Revenues generated thereby shall be for the account of XFN or its Affiliates, and CEIS shall not be entitled to, nor make any action, claim or demand in relation thereto. XFN's only payment obligation to CEIS in consideration of the rights granted pursuant to this Clause 2 is set forth in Clause 4. + +2.8 XFN does not intend and is not under any obligation to edit or review the Content licensed herein for accuracy or appropriateness or compliance with any applicable laws or regulations. + +3. DELIVERY OF CONTENT + +3.1 During the Term of this Agreement, CEIS shall supply the Content of XFN by such means of delivery or transmission as may be reasonably required by XFN including by online transmission. + +3.2 CEIS shall use its best endeavours to ensure that the Content is made available to XFN on a continuous, uninterrupted real-time basis. + +4. CONSIDERATION + +4.1 In consideration of the rights and obligations of the Parties, XFN shall pay to CEIS US$1.1 million (United States Dollars One Million and One + +Source: XINHUA SPORTS & ENTERTAINMENT LTD, F-1, 2/21/2007 + + + + + + Hundred Thousand) for a term of twenty (20) years, in cash or such other consideration as the Parties may agree. The payment schedule shall be by five (5) instalments of US$220,000 each. The first instalment will be effect on condition that XFN can raise at least US$1.1 million additional funding in 2002. + + -3- + +5. REPRESENTATIONS AND WARRANTIES + +5.1 CEIS represents and warrants to XFN that during the Term of this Agreement: + + (a) CEIS is and shall remain entitled to grant to XFN the license to use the Content and other rights contained herein, free of all third-party liens, claims and encumbrances; + + (b) use of any Content by XFN in the manner contemplated by this Agreement does not and will not infringe any Intellectual Property Rights or other proprietary rights of any third party; + + (c) neither the Content nor any part thereof contains anything which is obscene, indecent, seditious, offensive, defamatory, threatening, liable to incite racial hatred, discriminatory, menacing or in breach of confidence; + + (d) the Content complies with and will comply with all applicable laws and regulations; + + (e) with respect to the provision of the Content, CEIS has acquired all requisite licenses, permissions and clearances for XFN to exercise the rights granted herein; + + (f) the Content is and will be reasonably accurate at the time of each delivery to XFN; + + (g) CEIS is a statutory body with legal person status validly existing under the laws of the People's Republic of China, being its jurisdiction of organization, and the execution, delivery and performance of this Agreement for and on its behalf has been duly and properly authorised by all required action, and Mr. Wang Zhongming, the Legal Representative of CEIS has been duly authorised to execute and deliver this Agreement for and on behalf of CEIS; + + (h) this Agreement is a valid and binding legal obligation enforceable against it in accordance with its terms; and + + (i) the execution, delivery and performance of this Agreement by it does not and will not: + + (i) require any authorization, consent, filing, registration or notice of or with any government agency in the People's Republic of China or Hong Kong; or + + (ii) result in any violation or breach of any agreement, obligation or order to which it is a party or to which it is subject. + +6. INDEMNITY + + -4- + +6.1 CEIS shall fully indemnify XFN and hold XFN harmless from and against any and all costs, expenses, loss, damages, liabilities, claims and proceedings which may be incurred or suffered by or taken against XFN in relation to: + + (a) the exercise by XFN of the rights granted herein; and + + (b) any breach by CEIS of any provision of this Agreement or any act, + +Source: XINHUA SPORTS & ENTERTAINMENT LTD, F-1, 2/21/2007 + + + + + + default, omission or negligence of any nature on the part of CEIS and any of CEIS's officers, employees or agents and otherwise howsoever in connection with the rights hereby granted. + +7. TERM + +7.1 This Agreement shall take effect from the Effective Date and continue in full force and effect for twenty (20) years thereafter, unless otherwise terminated in accordance with Clause 8. + +7.2 This Agreement may be renewed for an additional term of ten (10) years by notice in writing given by XFN to CEIS at the expiry of the Term, for a consideration to be mutually agreed. + +8. TERMINATION + +8.1 XFN may terminate this Agreement by giving thirty (30) days written notice to the CEIS. + +8.2 Either Party may terminate this Agreement: + + (a) if the other Party commits a material breach of this Agreement which is not capable of being remedied; + + (b) if the other Party commits a material breach of this Agreement which is capable of being remedied but not remedied within thirty (30) days upon receiving written notice from the non-breaching party requiring remedy; and + + (c) if the other Party becomes insolvent or bankrupt. + +8.3 Upon termination of the Agreement: + + (a) CEIS shall terminate the transmission of the Content with immediate effect; and + + (b) in the event that this Agreement is terminated prior to the expiry of the Term, XFN shall recover any sums paid to CEIS in advance for the unexpired Term of this Agreement, together with interest from the date those sums were paid until the date of full refund. + + -5- + +9. FURTHER ASSURANCE + + Each Party agrees, at its own expense, to take any further action and to execute any further documents or instruments as the other Party may reasonably request to give effect to the transactions contemplated by, and to the terms of, this Agreement. In particular, and without limiting the foregoing, the Parties agree to amend this Agreement as may be necessary to comply with applicable laws, including without limitation the laws of the People's Republic of China. + +10. ENTIRE AGREEMENT; AMENDMENTS + + This Agreement constitutes the entire agreement between CEIS and XFN and supersedes any prior written or oral agreement between them in relation to its subject matter. Any amendment of this Agreement shall be in writing and signed by CEIS and XFN. + +11. SEVERANCE + + If at any time any provision of this Agreement is or becomes illegal, invalid or unenforceable in any respect, the legality, validity and enforceability of the remaining provisions of this Agreement shall not be affected or impaired thereby. + +12. NO WAIVER + + Failure of either Party to require strict performance of any of the terms and conditions herein shall not be deemed a waiver of any rights or + +Source: XINHUA SPORTS & ENTERTAINMENT LTD, F-1, 2/21/2007 + + + + + + remedies that either Party shall have and shall not be deemed a waiver of any subsequent default of terms and conditions thereof. + +13. COSTS AND EXPENSES + + Each party shall bear its own costs (including but not limited to legal costs) and disbursements of and incidental to the preparation, negotiation and execution of this Agreement and all ancillary documentation. + +14. COUNTERPARTS + + This Agreement may be executed in any number of counterparts all of which taken together shall constitute one and the same instrument. + +15. NOTICE + + Each notice, demand or other communication given or made under this Agreement shall + + -6- + + be in writing and delivered or sent to the relevant Party's Managing Director or General Manager at its aforesaid address (or such other address as the addressee may specify by five days' prior written notice to the other Party). Any notice, demand or other communication so addressed to the relevant Party shall be deemed to have been delivered (a) if given or made by letter by hand, when actually delivered to the relevant address against receipt; (b) if given or made by letter by post, two business days after posting; and (c) if given or made by fax, when dispatched and received in good order. + +16. GOVERNING LAW AND ARBITRATION + +16.1 The English language version shall prevail in the event of any discrepancy between the interpretation of the English and the Chinese versions of this Agreement. This Agreement is governed by and shall be construed in accordance with the laws of Hong Kong + +16.2 The Parties shall attempt to resolve any dispute, controversy or claim arising out of this Agreement through good faith consultation and negotiations. If the Parties fail to resolve the dispute through negotiation, such dispute shall be referred to and be resolved by arbitration in accordance with the UNCITRAL Arbitration Rules as may be amended from time to time. The place of arbitration shall be in Hong Kong. The language to be used in the arbitral proceedings shall be English. There shall be one arbitrator to be agreed by Parties. If the Parties are unable to agree on an arbitrator, the International Chamber of Commerce shall appoint one. + + -7- + +IN WITNESS WHEREOF this Agreement has been executed on the day and year first above written. + +SIGNED BY ) ) for and on behalf of ) CHINA ECONOMIC INFORMATION ) /s/ SERVICE OF XINHUA NEWS ) ---------------------------------- AGENCY ) in the presence of:- ) ) ) /s/ ) --------------------------- + +Source: XINHUA SPORTS & ENTERTAINMENT LTD, F-1, 2/21/2007 + + + + + +SIGNED BY ) ) for and on behalf of ) XINHUA FINANCIAL NETWORK ) /s/ LIMITED ) ---------------------------------- in the presence of:- ) ) ) /s/ ) --------------------------- + + -8- + + SCHEDULE 1 - CONTENT + + -9- + +Source: XINHUA SPORTS & ENTERTAINMENT LTD, F-1, 2/21/2007 \ No newline at end of file diff --git a/full_contract_txt/XpresspaGroupInc_20190401_10-K_EX-10.28_11599457_EX-10.28_Marketing Agreement.txt b/full_contract_txt/XpresspaGroupInc_20190401_10-K_EX-10.28_11599457_EX-10.28_Marketing Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..c633c10ccddea0653d2e5d0cecb6a3cd5aa86482 --- /dev/null +++ b/full_contract_txt/XpresspaGroupInc_20190401_10-K_EX-10.28_11599457_EX-10.28_Marketing Agreement.txt @@ -0,0 +1,223 @@ +Exhibit 10.28 PRODUCT SALE AND MARKETING AGREEMENT THIS PRODUCT SALE AND MARKETING AGREEMENT (this "Agreement") is made this 12th day of November, 2018 (the "Effective Date"), by and between Calm.com, Inc., a Delaware corporation, having offices at 140 2nd Street, 3rd Floor, San Francisco, California 94105 ("Calm") and XpresSpa Group, Inc., a Delaware corporation, having offices at 780 Third Avenue, 12th Floor, New York, New York 10017 ("XSPA"). Each of Calm and XSPA may be referred to herein individually as a "Party" and collectively as the "Parties". RECITALS WHEREAS, Calm is the manufacturer and distributor of Calm branded products and services, including those set forth on Exhibit A (the "Products"); WHEREAS, XSPA is the owner, operator and/or franchisor of XpresSpa branded stores (each a "Store") throughout the United States of America (the "Territory"); WHEREAS, Calm desires to increase its brand exposure in the Territory by collaborating with XSPA for the display, marketing, promotion, offer for sale and sale of Products at each Store in the Territory; and WHEREAS, XSPA desires to collaborate with Calm in connection with the display, marketing, promotion, offer for sale and sale of Products at each Store in the Territory in accordance with the terms and conditions of this Agreement. NOW THEREFORE, in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows: 1. Term. Unless this Agreement is terminated earlier in accordance with the terms of Section ​12, the term of this Agreement shall commence on the Effective Date and shall continue until July 31, 2019 (the "Initial Term"). Following the Initial Term, this Agreement shall automatically renew for successive terms of six (6) months (each a "Renewal Term", and together with the Initial Term, the "Term") unless written notice is given by either Party no later than thirty (30) days in advance of the expiration of the Initial Term or the applicable Renewal Term. 2. Sale of Products. 2.01. XSPA shall use its commercially reasonable efforts to display, market, promote, offer for sale and sell the Products set forth on Exhibit A in all Stores throughout the Territory. The Products shall only be sold by XSPA at the retail price of the applicable Product as set forth on Exhibit A (the "Retail Price"). For the avoidance of doubt, the Retail Price for the Products at the Stores in the Territory (i) may only be modified by mutual agreement of the Parties, and (ii) does not include any discounts, promotions or applicable sales taxes. + +Source: XPRESSPA GROUP, INC., 10-K, 4/1/2019 + + + + + +2.02. In addition to the Products, Calm shall have the right to identify up to five (5) additional products, with such products and the price thereof to be mutually agreed by the Parties, to be displayed, marketed, promoted, offered for sale and sold in the Stores in the Territory. Such products, once agreed on by both Parties and priced in accordance with the previous sentence, shall be deemed Products set forth on Exhibit A for the purposes of this Agreement. 3. Exclusivity and Right of First Refusal 3.01. Throughout the Term and for a period of six (6) months after the expiration or termination of this Agreement, neither XSPA nor any of its affiliates shall, directly or indirectly, sell, offer for sale, market or promote any digital meditation or digital sleep products (other than the Products), including online or in any Store in the Territory, without the express prior written consent of Calm. 3.02. Throughout the Term and for a period of six (6) months after the expiration or termination of this Agreement, neither Calm nor any of its affiliates shall, directly or indirectly, sell, offer for sale, market or promote any digital meditation or digital sleep products in any retail location located in an airport other than in collaboration with XSPA, without the express prior written consent of XSPA. 3.03. Throughout the Term and for a period of six (6) months after the expiration or termination of this Agreement, Calm shall have a right of first refusal to expand the rights and obligations described in this Agreement to any Stores outside the Territory (the "ROFR"). XSPA shall give prompt written notice to Calm each time it offers, proposes to offer, or has received an offer to enter into any agreement or arrangement under which XSPA or any of its affiliates would sell, offer for sale, market, promote or undertake any similar action with respect to any meditation or sleep digital products or similar products at any Store outside the Territory (each, a "ROFR Notice"). Calm shall have thirty (30) business days (the "ROFR Period") from receipt of a ROFR Notice to exercise its ROFR with respect to the region and/or Stores described in the ROFR Notice. If Calm exercises its ROFR within the ROFR Period, the Parties shall enter into an amendment or addendum to this Agreement to include such additional region and/or Stores. If Calm does not exercise its ROFR within the ROFR Period, XSPA may enter into such agreement or arrangement with respect to the applicable region and/or Stores set forth in the ROFR Notice with any third party; provided that, such agreement or arrangement are on the same terms offered to Calm (it being understood that in the event XSPA modifies such terms, XSPA shall provide a new ROFR Notice to Calm in accordance with this Section ​3.02). 4. Marketing, Signage and Displays. 4.01. With respect to each Store in the Territory, XSPA shall use commercially reasonable efforts to: (a) promptly after the Effective Date, (i) prepare notices and consents and take all other actions reasonably necessary to obtain and maintain approval as necessary for bulkhead signage from airport regulatory authorities or other entities whose approval is required for such Store and install such bulkhead signage as soon as practicable thereafter, and (ii) once installed, maintain such bulkhead signage throughout the Term; + +2 + +Source: XPRESSPA GROUP, INC., 10-K, 4/1/2019 + + + + + +(b) allocate at least the retail space for the display of the Products in Stores as set forth on Exhibit B; (c) cause any and all XSPA employees working in such Store to wear uniforms co-branded with Calm's and XSPA's Marks (as defined herein), including shirts and lanyards (such uniform, which will be jointly designed by and mutually acceptable to the Parties, the "Uniforms") during normal working hours; (d) display Calm branded marketing materials in such Store (which marketing materials shall be highly visible beyond the lease line as determined in Calm's sole discretion), including the items set forth on Exhibit C; (e) distribute free of charge as free gifts with purchase certain Calm branded gift products (the "Gifts"), as mutually selected by Calm and XSPA; (f) distribute free trial or discount inserts for Calm digital product subscriptions (the "Inserts") to customers of such Store (it being understood that such Inserts shall contain a unique promotional code enabling Calm to attribute purchases to such Store); and (g) use and distribute to any purchaser of any Product sold at the Stores shopping bag(s) co-branded with Calm's and XSPA's Marks (the "Shopping Bags"). Calm will collaborate with XSPA on the design of Shopping Bags and such design shall be mutually agreed by the Parties. 4.02. Calm and XSPA shall jointly market their activities under this Agreement to their respective user bases, including by: (a) sending at least two (2) emails to each of their respective email marketing lists during the Initial Term that concern one or more of the Products, (b) making at least four (4) posts across each of their respective social media channels during the Initial Term that concern one or more of the Products and (c) marketing their activities concerning one or more of the Products under this Agreement on each of their respective websites throughout the Term. All such emails, co-branded communications and marketing materials are subject to the prior written approval of the Parties. 5. Store Operations. 5.01. With respect to any and all Stores owned or operated by XSPA, as between Calm and XSPA, XSPA shall be the sole owner and operator of any and all such Stores throughout the Territory and XSPA shall have sole management and operational control and liability with respect to such Stores and any and all costs and expense associated with the operation and maintenance thereof. XSPA shall operate and maintain the Stores with high standards of quality and service and shall at all times comply with any and all applicable laws in connection therewith. + +3 + +Source: XPRESSPA GROUP, INC., 10-K, 4/1/2019 + + + + + +5.02. With respect to any and all Stores owned or operated by any of XSPA's Airport Concession Disadvantaged Business Enterprise partners ("ACDBE Partner(s)") in conjunction with XSPA, XSPA shall cause each of its ACDBE Partners to fulfill all of the obligations set forth herein with respect to the display, marketing, promotion, offer for sale and sale of Products at each Store in the Territory owned or operated by XSPA and such ACDBE Partner(s). As between Calm and XSPA, XSPA shall remain liable for the acts and omissions of each ACDBE Partner. As between Calm on the one hand and XSPA and its ACDBE Partner(s) on the other hand, XSPA and its ACDBE Partner(s) shall be the sole owners and operators of any and all such Stores throughout the Territory and XSPA and its ACDBE Partner(s) shall have sole management and operational control and liability with respect to such Stores and any and all costs and expense associated with the operation and maintenance thereof. XSPA and its ACDBE Partner(s) shall operate and maintain the Stores with high standards of quality and service and shall at all times comply with any and all applicable laws in connection therewith. 5.03. With respect to any and all Stores owned or operated by a third party who is not an ACDBE Partner (any such third party a "Franchisee"), where XSPA is a franchisor, XSPA shall cause each Franchisee to fulfill all of the obligations set forth herein with respect to the display, marketing, promotion, offer for sale and sale of Products at each Store in the Territory owned or operated by such Franchisee. Except as otherwise set forth in this Agreement, including Section 10.03, as between Calm and XSPA, XSPA shall remain liable for the acts and omissions of each Franchisee. 5.04. Calm shall have the right, but not the obligation, to hire personnel of its choosing to be present in any Store(s) to assist in the display, marketing, promotion, offer for sale and sale of Products, provided, however, that no more than one such person shall be present at any one time in any store without the prior written consent of XSPA. XSPA shall permit such personnel access to each Store and the ability to assist in the marketing, promotion and sale of the Products. For the avoidance of doubt, as between the Parties, Calm shall remain responsible for any and all employee compensation or other benefits with respect to any such personnel. 5.05. Calm or its authorized designees shall be the sole suppliers to XSPA of XSPA's requirements for Products, Gifts, Shopping Bags, Uniforms and Inserts (collectively, "Product Collateral") for each Store throughout the Territory. Calm shall use reasonable efforts to fulfill all of XSPA's requirements for Product Collateral in accordance with the terms and conditions of this Agreement. In the event that inventory of any Product Collateral in any Store falls below fifty percent (50%) of the initial amount of such Product Collateral provided to such Store, XSPA shall use best efforts to advise Calm in sufficient detail to enable Calm to ship additional inventory of such Product Collateral to such Store. The Parties acknowledge and agree that, as between the Parties, Calm shall retain legal title to any and all Product Collateral (other than Uniforms) until sold in a Store in the Territory or otherwise disbursed in a Store in the Territory (in the case of Gifts, Inserts and Shopping Bags) in accordance with the terms and conditions of this Agreement. In the event Calm identifies any issue with any Product Collateral making it unsuitable for use as contemplated by this Agreement or issues a recall with respect to any Product, XSPA shall promptly return any and all affected Product Collateral to Calm or its authorized designees upon receiving notice of such issue or recall. + +4 + +Source: XPRESSPA GROUP, INC., 10-K, 4/1/2019 + + + + + +6. Training. XSPA shall provide training to any and all employees in each Store throughout the Territory regarding the display, marketing, promotion, offer for sale and sale of Products based on training materials (including PDF documents and/or instruction videos) provided by Calm. At XSPA's request, Calm shall provide training to XSPA area managers and select store managers at times and locations mutually agreed upon by the Parties regarding the display, marketing, promotion, offer for sale and sale of Products. 7. Collaborative Efforts. 7.01. XSPA and Calm shall jointly consult and work together in good faith throughout the Term to develop and execute a plan for the marketing, promotion and sale of Products in all Stores throughout the Territory, including with respect to Product layout and display, in-store marketing and promotional activities, the design of any co-branded Product Collateral or other marketing materials, and bulkhead signage at the Stores, in each case, taking into account any plan restrictions on the Store that may be imposed by an airport regulatory authority or other entity and all applicable laws. 7.02. Any Product Collateral item or other marketing material co-branded with Calm's and XSPA's Marks shall be subject to each Party's prior review and approval, which shall not be unreasonably withheld. 8. Payments. 8.01. XSPA shall pay to Calm on a monthly basis an amount equal to (i) fifty percent (50%) of the Retail Price for all Products sold in the Stores in the Territory during the applicable month minus (ii) fifty percent (50%) of any commission actually paid or payable to XSPA employee(s) or contractor(s) attributable to sales of such Products during such month; provided that in no event shall such commission be greater than fifteen percent (15%) of the Retail Price for the applicable Product. 8.02. Calm shall pay to XSPA on a monthly basis a retail commission of $20.00 for each sale of Calm digital product subscriptions (excluding, for the avoidance of doubt, any free trial subscriptions) that result from XSPA's distribution of Inserts and a customer's use of the unique promotional discount code set forth therein in accordance with the terms and conditions set forth herein (it being understood that XSPA shall ensure fifty percent (50%) of each such commission shall be distributed to the applicable Store's retail employees or contractors via a pool or other format as mutually agreed to by the Parties). Calm shall prepare and maintain complete and accurate books and records covering all transactions relating to this Agreement. XSPA's representatives may, from time to time during regular business hours on reasonable advance notice, during the Term of this Agreement and for a period of six (6) months thereafter, inspect and audit such books and records and examine and copy all other documents and material in the possession or under the control of Calm with respect to the subject matter and the terms of this Agreement. + +5 + +Source: XPRESSPA GROUP, INC., 10-K, 4/1/2019 + + + + + +After completion of any inspection or audit pursuant to this Section 8.02, XSPA shall notify Calm of the results of such inspection and audit (the "Calm Audit Results"). Upon receipt of such information, Calm shall have thirty (30) days (the "Calm Review Period") to review the Calm Audit Results. On or prior to the last day of the Calm Review Period, Calm may object to the Calm Audit Results by delivering to XSPA a written statement setting forth its objections in reasonable detail, indicating each disputed item or amount and the basis for its disagreement therewith (the "Calm Statement of Objections"). If Calm fails to deliver the Calm Statement of Objections before the expiration of the Calm Review Period, the Calm Audit Results shall be deemed to have been accepted by Calm. If Calm delivers the Calm Statement of Objections before the expiration of the Calm Review Period, Calm and XSPA shall negotiate in good faith to resolve such objections within thirty (30) days after the delivery of the Calm Statement of Objections (the "Calm Resolution Period"), and, if the same are so resolved within the Calm Resolution Period, the Calm Audit Results with such changes as may have been previously agreed in writing by Calm and XSPA, shall be final and binding. If Calm and XSPA fail to reach an agreement with respect to all of the matters set forth in the Calm Statement of Objections before expiration of the Calm Resolution Period, then any amounts remaining in dispute ("Calm Disputed Amounts" and any amounts not so disputed, the "Calm Undisputed Amounts") shall be submitted for resolution to the office of an impartial nationally recognized firm of independent certified public accountants mutually agreeable to Calm and XSPA (each acting reasonably and in good faith) (the "Independent Accountant") who, acting as experts and not arbitrators, shall resolve the Calm Disputed Amounts only and make any adjustments to the Calm Audit Results. The parties hereto agree that all adjustments shall be made without regard to materiality. The Independent Accountant shall only decide the specific items under dispute by the parties and their decision for each Calm Disputed Amount must be within the range of values assigned to each such item in the Calm Audit Results and the Calm Statement of Objections, respectively. The Independent Accountant shall make a determination as soon as practicable within thirty (30) days (or such other time as the parties hereto shall agree in writing) after their engagement, and their resolution of the Calm Disputed Amounts and their adjustments to the Calm Audit Results shall be conclusive and binding upon the parties hereto. If it is conclusively determined that any of Calm's payments due hereunder was less than the amount that should have been paid or any of XSPA's payments or reimbursements was more than the amount that should have been paid, all payments required to be made to eliminate the discrepancy, plus interest, shall be made promptly upon XSPA's demand, and, if the discrepancy in amounts due to XSPA is greater than ten percent (10%) or more of the amount due during the period in question, Calm promptly shall reimburse XSPA for the reasonable costs and expenses related to such inspection and audit not to exceed $5,000.00. In all other cases, XSPA shall be responsible for any and all costs and expenses related to such inspection and audit pursuant to this Section 8.02. + +6 + +Source: XPRESSPA GROUP, INC., 10-K, 4/1/2019 + + + + + +If it is conclusively determined that any of Calm's payments due hereunder was more than the amount that should have been paid or any of XSPA's payments or reimbursements was less than the amount that should have been paid, all payments required to be made to eliminate the discrepancy, plus interest, shall be made promptly upon Calm's demand. 8.03. Subject to the terms and conditions set forth herein, and considering that Calm or its authorized designees shall be the sole supplier of Product Collateral under Section 5.04 of this Agreement, Calm shall pay (or reimburse XSPA upon receipt of payment to a third party) for all costs associated with (a) the design, manufacture, shipping, distribution and installation, as applicable, of Product Collateral and other marketing materials and bulkhead signage as set forth in Section ​4.01, (b) the creation of training materials and the costs associated with training (excluding cost of labor for any XSPA employee) pursuant to Section ​6, (c) obtaining and maintaining approval of, and the creation, installation, maintenance and removal of any bulkhead signage advertising pursuant to Section 4.01(a), and (d) the design, manufacture, shipping and installation of in-store marketing changes to any Store. Notwithstanding anything in this Agreement to the contrary, Calm shall not be obligated to reimburse XSPA for any such costs described in the previous sentence of this Section 8.03 incurred by XSPA above $500.00 unless Calm has provided prior written approval of such cost (including via email). 8.04. All payments required of XSPA hereunder shall be made to Calm in United States Dollars via wire transfers, or in such other manner as Calm shall designate, as follows: Account Name Calm.com, Inc. Account Address 140 2nd St. FL3 San Francisco, CA 94105 Account # 3302444451 Bank Name SIL VLY BK SJ Bank Address 3003 TASMAN DRIVE, SANTA CLARA, CA 95054 Fed ABA 121140399 8.05. All payments required of Calm hereunder shall be made to XSPA in United States Dollars via wire transfers, ACH payment, or in such other manner as XSPA shall designate, as follows: Account Name XpresSpa Group, Inc. Account # 483044863901 Bank Name Bank of America Bank Address One Bryant Park New York, NY 10036 Fed ABA 026009593 + +7 + +Source: XPRESSPA GROUP, INC., 10-K, 4/1/2019 + + + + + +8.06. With respect to Products sold in Stores in the Territory, XSPA shall deliver to Calm within twenty (20) days after each calendar month, a statement ("Monthly Statement") identifying (i) the total sales of each Product during said calendar month and (ii) the total commission paid to XSPA employees or contractors under Section ​8.02, which shall include a breakdown by each individual Product and Store. Each Monthly Statement shall be fully completed and signed and certified as accurate by one of XSPA's senior officers. 8.07. XSPA shall prepare and maintain complete and accurate books and records covering all transactions relating to this Agreement. Calm's representatives may, from time to time during regular business hours on reasonable advance notice, during the Term of this Agreement and for a period of six (6) months thereafter, inspect and audit such books and records and examine and copy all other documents and material in the possession or under the control of XSPA with respect to the subject matter and the terms of this Agreement. After completion of any inspection or audit pursuant to this Section 8.07, Calm shall notify XSPA of the results of such inspection and audit (the "XSPA Audit Results"). Upon receipt of such information, XSPA shall have thirty (30) days (the "XSPA Review Period") to review the XSPA Audit Results. On or prior to the last day of the XSPA Review Period, XSPA may object to the XSPA Audit Results by delivering to Calm a written statement setting forth its objections in reasonable detail, indicating each disputed item or amount and the basis for its disagreement therewith (the "XSPA Statement of Objections"). If XSPA fails to deliver the XSPA Statement of Objections before the expiration of the XSPA Review Period, the XSPA Audit Results shall be deemed to have been accepted by XSPA. If XSPA delivers the XSPA Statement of Objections before the expiration of the XSPA Review Period, XSPA and Calm shall negotiate in good faith to resolve such objections within thirty (30) days after the delivery of the XSPA Statement of Objections (the "XSPA Resolution Period"), and, if the same are so resolved within the XSPA Resolution Period, the XSPA Audit Results with such changes as may have been previously agreed in writing by XSPA and Calm, shall be final and binding. If Calm and XSPA fail to reach an agreement with respect to all of the matters set forth in the XSPA Statement of Objections before expiration of the XSPA Resolution Period, then any amounts remaining in dispute ("XSPA Disputed Amounts" and any amounts not so disputed, the "XSPA Undisputed Amounts") shall be submitted for resolution to the Independent Accountant who, acting as experts and not arbitrators, shall resolve the XSPA Disputed Amounts only and make any adjustments to the XSPA Audit Results. The parties hereto agree that all adjustments shall be made without regard to materiality. The Independent Accountant shall only decide the specific items under dispute by the parties and their decision for each XSPA Disputed Amount must be within the range of values assigned to each such item in the XSPA Audit Results and the XSPA Statement of Objections, respectively. + +8 + +Source: XPRESSPA GROUP, INC., 10-K, 4/1/2019 + + + + + +The Independent Accountant shall make a determination as soon as practicable within thirty (30) days (or such other time as the parties hereto shall agree in writing) after their engagement, and their resolution of the XSPA Disputed Amounts and their adjustments to the XSPA Audit Results shall be conclusive and binding upon the parties hereto. If it is conclusively determined that any of XSPA's payments due hereunder was less than the amount that should have been paid or any of Calm's payments or reimbursements was more than the amount that should have been paid, all payments required to be made to eliminate the discrepancy, plus interest, shall be made promptly upon Calm's demand, and, if the discrepancy in amounts due to Calm is greater than ten percent (10%) or more of the amount due during the period in question, XSPA promptly shall reimburse Calm for the reasonable costs and expenses related to such inspection and audit not to exceed $5,000.00. In all other cases, Calm shall be responsible for any and all costs and expenses related to such inspection and audit pursuant to this Section 8.02. If it is conclusively determined that any of XSPA's payments due hereunder was more than the amount that should have been paid or any of Calm's payments or reimbursements was less than the amount that should have been paid, all payments required to be made to eliminate the discrepancy, plus interest, shall be made promptly upon XSPA's demand. 9. Intellectual Property Matters. 9.01. Subject to the terms and conditions of this Agreement, Calm hereby grants to XSPA, solely during the Term and in the Territory, a revocable (as set forth in ​Section ​​12.04), royalty-free, assignable (solely as set forth in Section ​16.05), non-sublicensable (except as set forth in Section ​9.03), non-exclusive license to use the marks set forth on Exhibit D ("Calm's Marks"), solely to the extent necessary for XSPA to exercise its rights or perform its obligations set forth in this Agreement. 9.02. Subject to the terms and conditions of this Agreement, XSPA hereby grants to Calm, solely during the Term and in the Territory, a revocable (as set forth in ​Section ​​12.04), royalty-free, assignable (solely as set forth in Section ​16.05), non-sublicensable (except as set forth in Section ​9.03), non-exclusive license to use the marks set forth on Exhibit E ("XSPA's Marks", and together with Calm's Marks, the "Marks"), solely to the extent necessary for Calm to exercise its rights or perform its obligations set forth in this Agreement. 9.03. Each Party may sublicense the rights granted to such Party under Sections 9.01 and 9.02 of this Agreement to any third party vendor, supplier or manufacturer of Product Collateral solely to the extent necessary for such Party to exercise its rights or perform its obligations set forth in this Agreement. + +9 + +Source: XPRESSPA GROUP, INC., 10-K, 4/1/2019 + + + + + +9.04. Neither Party shall use the other Party's Marks, in whole or in part, as a corporate name, trade name or domain name and shall not use the other Party's Marks in combination with any other mark, design or designation except pursuant to the terms of this Agreement. Each Party shall use the other Party's Marks in the Territory strictly in compliance with all applicable legal requirements of the Territory. Each Party acknowledges and agrees that, as between the Parties, the other Party is the sole and exclusive owner of the Marks licensed by such other Party pursuant to this Section ​9 and all goodwill associated therewith. Neither Party shall do or cause to be done any act or thing that may in any way adversely affect any rights of the other Party in and to such other Party's Marks or any registrations thereof or that, directly or indirectly, may reduce the value of such Marks or detract from any Mark's reputation, including challenging the ownership, validity or enforceability of such Marks. Each Party agrees that it will display the trademark registration symbol ® or the designations "SM" or "TM" adjacent to the Marks when directed to do so by the Party owning the relevant Mark and, when circumstances reasonably permit, it will cause a notice of ownership to appear on advertisements or in store displays bearing the Marks. Each Party will take care to display the other Party's Marks in a manner that does not bring the other Party's brand into disrepute. 9.05. All goodwill associated with the use of a Party's Marks by the other Party shall inure to the sole and exclusive benefit of the Party which owns such Mark. Each Party shall execute any documents and take any actions reasonably required by the other Party to confirm such Party's ownership of all rights in and to such Party's Marks in the Territory and the respective rights of the Parties pursuant to this Agreement. 9.06. In the event that either Party learns of any infringement, imitation or counterfeiting of the other Party's Marks or Products or of any use by any person of a trademark similar to such Marks, it shall promptly notify the other Party thereof. Thereupon, the Party owning the relevant Marks, or in the case of Products, Calm, shall take such action as it deems advisable for the protection of its rights in and to its Marks and Products and, if reasonably requested to do so by such Party, the other Party shall reasonably cooperate in all respects (at the sole costs and expense of the Party owning the relevant Marks, or in the case of Products, Calm), including by choosing to be a plaintiff or co-plaintiff and/or by causing its officers to execute pleadings and other necessary documents. Any action contemplated by this Section ​9.06 shall be controlled by the Party with ownership of the relevant Marks, or in the case of Products, Calm. 9.07. Any intellectual property or moral right in any Product Collateral or other marketing materials concerning Calm or one or more Products, including patterns, sketches, logos, designs, packaging, labels, tags, advertising materials or the like ("Product Collateral IP") bearing Calm's Marks shall be, as between the Parties, the sole and exclusive property of Calm, it being understood that XSPA shall retain sole and exclusive ownership of its Marks, including with respect to co-branded Product Collateral and any other co-branded marketing materials concerning Calm or one or more Products. Any co-branded Product Collateral IP shall be used solely (i) in the Stores in the Territory or (ii) in connection with digital marketing activities by Calm with respect to Calm or one or more Products, in accordance with the terms and conditions set forth in this Agreement. If any Product Collateral IP (or any aspect thereof) are not designed and/or created by Calm, such Product Collateral IP (or aspect thereof) shall be deemed "works made for hire" for Calm within the meaning of the U.S. Copyright Law and/or other applicable comparable laws or, if they do not so qualify, all ownership rights thereto shall be, and are hereby, assigned to Calm. XSPA shall not, directly or indirectly, do or suffer to be done any act or thing which may affect adversely any of Calm's rights in the Product Collateral IP, including filing any application in its name to record any claims to Product Collateral IP (or any aspect thereof). XSPA shall execute any documents and take any actions reasonably required by Calm to confirm Calm's ownership of all rights in and to such Product Collateral IP. + +10 + +Source: XPRESSPA GROUP, INC., 10-K, 4/1/2019 + + + + + +10. Agency, Indemnification and Insurance. 10.01. Calm and XSPA are each independent contractors. The Parties are not and shall not be considered as joint venturers, partners or agents of each other. Neither Party shall have the authority to bind or obligate the other Party. 10.02. XSPA hereby agrees to indemnify and hold harmless Calm and its affiliates and their respective directors, officers, employees and agents from and against any and all claims, suits, alleged regulatory violations, losses, damages and costs (including reasonable attorneys' fees) arising out of or relating to (i) any alleged action or failure to take action by XSPA in connection with the operation or maintenance of the Stores or provision of any product or service (other than the Products), including but not limited to: violations of applicable law, regulations or other rules; defects in XSPA sourced products or services provided or obtained therein; employment and labor issues with respect to XSPA employees; any product liability or personal injury claims with respect to XSPA's provision of any product or service (other than the Products); property damage; and collection, remittance or payment of any taxes, license fees or any other payment due to any party; (ii) the use of XSPA's Marks by Calm as authorized by this Agreement; and (iii) any breach of any covenant or agreement of XSPA contained in this Agreement. 10.03. Calm hereby agrees to indemnify and hold harmless XSPA and its affiliates and their respective directors, officers, employees and agents from and against any and all claims, suits, alleged regulatory violations, losses, damages and costs (including reasonable attorneys' fees) arising out of or relating to (i) any product liability or personal injury claims with respect to any Products or Product Collateral or any alleged defects in any Products or Product Collateral; (ii) any alleged action or failure to take action by Calm's employees; (iii) the use of Calm's Marks by XSPA as authorized by this Agreement; and (iv) any breach of any covenant or agreement of Calm contained in this Agreement. 10.04. In the event any claim, action, suit or proceeding (each, a "Claim") is brought or made against an indemnified Party for which defense and indemnification by the indemnifying Party may be sought hereunder, the indemnified Party will promptly notify the indemnifying Party of the commencement thereof, and the indemnified Party will be entitled to reasonably participate in (but not assume) the defense thereof. Notwithstanding any other provision of this Agreement, the indemnifying Party shall not enter into any settlement of any Claim without the prior written consent of the indemnified Party, except as provided in this Section 10.04. If a firm offer is made to settle a Claim without leading to liability or the creation of a financial or other obligation on the part of the indemnified Party and provides, in customary form, for the unconditional release of each indemnified Party from all liabilities and obligations in connection with such Claim and the indemnifying Party desires to accept and agree to such offer, the indemnifying Party shall give written notice to that effect to the indemnified Party. If the indemnified Party fails to consent to such firm offer within ten (10) days after its receipt of such notice, the indemnified Party may continue to contest or defend such Claim and in such event, the maximum liability of the indemnifying Party as to such Claim shall not exceed the amount of such settlement offer. If the indemnified Party fails to consent to such firm offer and also fails to assume defense of such Claim, the indemnifying Party may settle the Claim upon the terms set forth in such firm offer to settle such Claim. + +11 + +Source: XPRESSPA GROUP, INC., 10-K, 4/1/2019 + + + + + +10.05. XSPA shall obtain, and thereafter maintain during the Term, the following insurance: (a) Special form property policy covering all stock on premises of the Store, including with respect to all Product Collateral; (b) Workers' Compensation Insurance in the statutorily required amount (or XSPA shall participate in the appropriate state fund if such insurance is not available or allowed), together with Employer's Liability Insurance with a limit of $1,000,000 for each accident; and (c) Commercial General Liability insurance, (including fire liability, contractual liability, personal injury, product liability and completed operations coverage) in the amount of not less than $3,000,000 combined single limit with umbrella liability coverage with a limit of not less than $10,000,000; The foregoing insurance policies shall name XSPA as the insured and Calm as additional insured (except for Workers' Compensation Insurance). If any such insurance is on a "claims made" basis, XSPA shall maintain coverage thereunder for a period of at least two (2) years following the termination of this Agreement. With respect to the foregoing, XSPA shall provide to Calm certificate(s) evidencing such insurance prior to or upon execution of this Agreement. The certificates shall provide that Calm will be given at least thirty (30) days prior written notice of cancellation or any material change in these policies. Calm shall have no obligation to XSPA for the costs of insurance required, or for any other coverage that XSPA obtains, directly or indirectly for its own account. In no event shall any insurer have a Best's Insurance rating of less than (A-) of class size VII. 10.06. EXCEPT WITH RESPECT TO EACH PARTY'S INDEMNIFICATION OBLIGATIONS UNDER THIS AGREEMENT, (A) UNDER NO CIRCUMSTANCE AND UNDER NO LEGAL THEORY (TORT, CONTRACT, OR OTHERWISE), SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR ANY LOST PROFITS, LOSS OF OPPORTUNITY OR OTHER SPECIAL, PUNITIVE, INDIRECT, OR CONSEQUENTIAL DAMAGES SUFFERED BY THE OTHER PARTY ARISING IN CONNECTION WITH THIS AGREEMENT; AND (B) THE MAXIMUM LIABILITY OF EACH PARTY IN ANY WAY RELATED TO THIS AGREEMENT SHALL NOT EXCEED $2,000,000.00 (EXCLUDING ANY AMOUNTS DUE AND PAYABLE PURSUANT TO SECTION ​8 HEREUNDER). + +12 + +Source: XPRESSPA GROUP, INC., 10-K, 4/1/2019 + + + + + +11. Representations and Warranties. 11.01. Calm represents and warrants that: (a) it has the legal power and authority to enter into this Agreement and to grant the rights to its Marks granted hereunder, and the execution and performance of this agreement does not violate or put Calm in default of any other agreement, order or judgment by which it is bound or to which it is subject; (b) Calm's Marks do not infringe any third parties' rights and that the Marks were not misappropriated from any third party; (c) it is aware of and will comply with all federal, state and local laws and regulations governing the Products and the Product Collateral in the Territory; and (d) it is the sole and exclusive owner of Calm's Marks. 11.02. XSPA represents and warrants that: (a) it has the legal power and authority to enter into this Agreement and to grant the rights to its Marks granted hereunder, and the execution and performance of this Agreement does not violate or put XSPA in default of any other agreement, order or judgment by which it is bound or to which it is subject: and (b) it is aware of and will comply with all federal, state and local laws and regulations governing its operation of the Stores in the Territory; (c) XSPA's Marks do not infringe any third parties' rights and that the Marks were not misappropriated from any third party, and (d) it is the sole and exclusive owner of XSPA's Marks. 12. Termination. 12.01. This Agreement may be terminated by either Party, prior to its expiration, by reason of a material breach of the terms and conditions hereof; provided that the Party alleged to be in material breach shall have failed to cure such alleged material breach within thirty (30) days following the receipt of a written notice from the Party alleging the material breach which notice shall describe in reasonable detail the nature of the alleged material breach. + +13 + +Source: XPRESSPA GROUP, INC., 10-K, 4/1/2019 + + + + + +12.02. Calm may terminate this Agreement immediately, upon written notice, if XSPA experiences an insolvency event. 12.03. Beginning on February 28, 2019, XSPA may terminate this Agreement immediately, upon written notice, if Calm has not purchased and funded the purchase of the Second Closing Shares (as defined in the Series E Preferred Stock Purchase Agreement dated as of even date herewith by and between XSPA and Calm) by December 31, 2018. 12.04. Upon termination or expiration of this Agreement, Calm (at its sole expense) may engage a third party to audit XSPA's inventory of any and all Product Collateral then on hand at each Store and XSPA shall promptly return or dispose of such inventory as instructed by Calm at Calm's sole expense. In addition, if Calm does not provide XSPA with instructions within twenty (20) days of the termination or expiration of this Agreement, XSPA shall be permitted to dispose of any inventory of any and all Product Collateral then on hand at each Store. The Parties agree to promptly settle all accounting associated with such inventory of any and all Product Collateral then on hand at each Store upon termination or expiration of this Agreement. Except as expressly set forth herein, all of the rights granted hereunder shall automatically terminate and XSPA shall immediately cease the distribution, marketing and sale of Products and the Parties shall discontinue all use of the other Party's Marks. 12.05. The following provisions shall survive the expiration or termination of this Agreement: Sections ​ ​ ​3, ​9.07, 10, ​12 and any other provision hereunder which by its terms, may reasonably be expected to survive such expiration or termination. In addition to the foregoing, upon termination each Party shall pay to the other Party any and all amounts then owed to the other Party. 13. Arbitration. Without limiting Section ​16.08, any and all disputes or claims arising from either Party's rights or obligations under this Agreement shall be subject to arbitration. Any arbitration commenced with respect to a dispute or claim under this Agreement shall be conducted pursuant to the Commercial Arbitration Rules of the American Arbitration Association and the Supplementary Procedures for Large, Complex Disputes then in effect (the "Rules"), except to the extent such rules conflict with this Section ​13. In any arbitration, New York law shall govern, except to the extent that such law conflicts with the Rules or this Section ​13. The Parties further agree that each issue submitted for arbitration be submitted to a panel of three (3) impartial arbitrators with each Party selecting one (1) arbitrator within fifteen (15) days after the commencement of the arbitration period and the two (2) selected arbitrators selecting a third arbitrator who is experienced in the commercial retail industry within thirty (30) days after the commencement of the arbitration period. Any arbitration hereunder shall commence within thirty (30) days after appointment of the third arbitrator and shall be held in New York, New York, USA. No discovery by either Party shall be permitted unless the arbitrators determine that the Party requesting such discovery has a substantial, demonstrable need. The arbitrators shall make final determinations as to any discovery disputes and all other procedural matters. If any Party fails to comply with the procedures in any arbitration in a manner deemed material by the arbitrators, then the arbitrators shall fix a reasonable time for compliance, and if the Party does not comply within such period, then a remedy deemed just by the arbitrators, including an award of default, may be imposed. The decision of the arbitrators shall be rendered no later than one hundred twenty (120) days after commencement of the arbitration period. The costs of arbitration shall be borne by the Party against whom the arbitral decision is made. Any judgment or decision rendered by the panel shall be binding upon the Parties and shall be enforceable by any court of competent jurisdiction. + +14 + +Source: XPRESSPA GROUP, INC., 10-K, 4/1/2019 + + + + + +14. Notice. All notices required or permitted by this Agreement shall be in writing and may be delivered in person (by hand or by messenger or courier service) or may be sent by certified mail, return receipt requested, or U.S. Postal Service Express Mail, with postage prepaid, or by facsimile transmission during normal business hours, and shall be deemed sufficiently given if served in a manner specified in this Section ​14 to the addresses and facsimile numbers noted below. Either Party may, by notice to the other, specify a different address for notice purposes. Any notice sent by certified mail, return receipt requested, shall be deemed given on the date of delivery shown on the receipt card, or if no delivery date is shown, the postmarks thereon. Notices delivered by United States Express Mail or overnight courier that guarantees next day delivery shall be deemed given twenty-four (24) hours after delivery of the same to the United States Postal Service or courier. If any notice is transmitted by facsimile transmission or similar means, the same shall be deemed served or delivered upon telephone or facsimile confirmation of receipt of the transmission thereof, provided a copy is also delivered via delivery or mail. If notice is received after 5:00 PM, local time of the recipient, or on a Saturday or a Sunday or a legal holiday, it shall be deemed received on the next business day. Notice addresses are as follows: If to XSPA: XpresSpa Group, Inc. 780 Third Avenue, 12th Floor New York, NY 10017 Attn: Edward Jankowski, CEO Email: notices@xpresspagroup.com If to Calm: Calm.com, Inc. 140 2nd St., 3rd Floor San Francisco, CA 94105 Attn: Dun Wang Email: legal@calm.com and dun@calm.com 15. Confidentiality. Neither Party shall, directly or indirectly, without the other Party's consent, disclose to any third party (other than their respective employees or representatives) any information designated in writing as confidential by other Party (including the terms and conditions of this Agreement); provided, that the foregoing restriction shall not (a) apply to any information (i) generally available to, or known by, the public (other than as a result of disclosure in violation of this ​Section ​15) or (ii) independently developed by the receiving Party, or (b) prohibit any disclosure (i) determined in good faith by any Party to be required by any listing agreement with any applicable national or regional securities exchange or market, securities laws or any other applicable law so long as the disclosing Party has made all reasonable efforts to obtain confidential treatment of the terms of the Agreement in connection with such disclosure and, to the extent practicable and legally permissible, the receiving Party provides the disclosing Party with reasonable prior notice of such disclosure or (ii) made in connection with the enforcement of any right or remedy relating to this Agreement. + +15 + +Source: XPRESSPA GROUP, INC., 10-K, 4/1/2019 + + + + + +16. Miscellaneous Provisions. 16.01. This Agreement embodies and constitutes the entire understanding between the Parties with respect to subject matter hereof, and no prior agreements, understandings, representations and statements, oral or written, shall have any legal effect with respect to such subject matter. Neither this Agreement nor any provision hereof may be waived, modified, amended, discharged or terminated except by an instrument signed by the Party against whom the enforcement of such waiver, modification, amendment, discharge or termination is sought, and then only to the extent set forth in such instrument. 16.02. This Agreement shall be governed by, and construed in accordance with the law of the State of New York. In the event of any litigation, arbitration, or other proceeding by which one Party either seeks to enforce its rights under this Agreement or seeks a declaration of any rights or obligations under this Agreement, the prevailing Party shall be entitled to recover from the other Party, in addition to any other relief awarded, any and all costs and expenses incurred with respect to such litigation, arbitration or other proceeding, including without limitation, reasonable attorneys' fees, disbursements and costs, and experts' fees and costs. 16.03. The captions in this Agreement are inserted for convenience of reference only and in no way define, describe or limit the scope or intent of this Agreement or any of the provisions hereof. 16.04. In the event that any one or more of the provisions of this Agreement shall be determined to be void or unenforceable by a court of competent jurisdiction, such determination will not render this Agreement invalid or unenforceable and the remaining provisions hereof shall remain in full force and effect. 16.05. Neither Party shall assign or transfer this Agreement or its rights hereunder without first obtaining the consent of the other, in writing, which consent shall not unreasonably be withheld or delayed. Subject to the foregoing, this Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective permitted successors and assigns; provided, however, Calm may, without the prior written consent of XSPA, assign or otherwise transfer its rights and obligations to an affiliate of Calm or the acquirer of all or substantially all of the assets of Calm; provided, however, that the prior written consent of XSPA shall be required in connection with the assignment to an acquirer of all or substantially all of the assets of Calm if such acquirer's primary business is an airport-based provider of spa services. + +16 + +Source: XPRESSPA GROUP, INC., 10-K, 4/1/2019 + + + + + +16.06. For the convenience of the Parties, this Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same document. 16.07. No waiver by either Party, whether express or implied, of any provision hereof, or of any breach or default thereof, shall constitute a continuing waiver of such provision or of any other provision of this Agreement. Acceptance of payments by Calm shall not be deemed a waiver by Calm of any violation of or default under any of the provisions of this Agreement by XSPA. Also, if for any reason any acts or omissions by XSPA hereunder not in conformance with any of the requirements hereof are not objected to by Calm from time to time, such a failure to object shall not be deemed a waiver by Calm of any such requirement and Calm may insist upon due performance thereof by XSPA at any time. 16.08. The Parties acknowledge that irreparable injury would be caused by any breach or threatened breach by the other Party of any of the provisions of this Agreement and both Parties shall have the right to enforce the specific performance of the Agreement and to apply for injunctive relief against any act which would violate any of its provisions. [signatures on following page] + +17 + +Source: XPRESSPA GROUP, INC., 10-K, 4/1/2019 + + + + + +IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first above written. XpresSpa Group, Inc. By: /s/Edward Jankowski Name: Edward Jankowski Title: Calm.com, Inc. By: /s/ Michael Acton Smith + +18 + +Source: XPRESSPA GROUP, INC., 10-K, 4/1/2019 + + + + + +Exhibit A + +19 + +Source: XPRESSPA GROUP, INC., 10-K, 4/1/2019 + + + + + +Exhibit B + +20 + +Source: XPRESSPA GROUP, INC., 10-K, 4/1/2019 + + + + + +Exhibit C + +21 + +Source: XPRESSPA GROUP, INC., 10-K, 4/1/2019 + + + + + +Exhibit D + +22 + +Source: XPRESSPA GROUP, INC., 10-K, 4/1/2019 + + + + + +Exhibit E + +23 + +Source: XPRESSPA GROUP, INC., 10-K, 4/1/2019 \ No newline at end of file diff --git a/full_contract_txt/ZEBRATECHNOLOGIESCORP_04_16_2014-EX-10.1-INTELLECTUAL PROPERTY AGREEMENT.txt b/full_contract_txt/ZEBRATECHNOLOGIESCORP_04_16_2014-EX-10.1-INTELLECTUAL PROPERTY AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..a53562c56659f35954c9474206ae509428877ef6 --- /dev/null +++ b/full_contract_txt/ZEBRATECHNOLOGIESCORP_04_16_2014-EX-10.1-INTELLECTUAL PROPERTY AGREEMENT.txt @@ -0,0 +1,679 @@ +Exhibit 10.1 + +INTELLECTUAL PROPERTY AGREEMENT + +THIS INTELLECTUAL PROPERTY AGREEMENT (this "IP Agreement") is entered into as of April 14, 2014 (the "Effective Date"), by and between Motorola Solutions, Inc., a Delaware corporation (the "Seller"), and Zebra Technologies Corporation, a Delaware corporation (the "Purchaser"). + +RECITALS + +WHEREAS, the Seller, directly and through certain of its Affiliates, is engaged in the Business; + +WHEREAS, the Seller desires to sell and transfer to the Purchaser, and the Purchaser desires to acquire from the Seller, the Business, and in furtherance thereof, at each applicable Closing, the Seller will sell and assign, and will cause the other members of the Seller Group to sell and assign, to the Purchaser Group, and the Purchaser will purchase and assume, and will cause the other members of the Purchaser Group to purchase and assume, from the Seller Group, certain of the assets and liabilities of the Business, including all of the capital stock of the Acquired Companies, all on terms and conditions set forth in that certain Master Acquisition Agreement of even date herewith (the "Acquisition Agreement"); + +WHEREAS, certain assets owned, developed, or used by the Seller Parties in connection with the Business constitute Intellectual Property (as defined below); + +WHEREAS, as part of the Purchaser's acquisition of the Business, the Seller intends to assign to the Purchaser Assignees certain of such Intellectual Property and to license the Purchaser Licensees to use certain of such Intellectual Property, in each case pursuant to the terms and conditions set forth herein; and + +WHEREAS, as part of such acquisition, the Purchaser Assignees and Acquired Companies intend to license the Seller Parties to use certain of such assigned Intellectual Property and certain other Intellectual Property owned by the Acquired Companies. + +AGREEMENT + +NOW, THEREFORE, in consideration of the foregoing recitals, the mutual representations, warranties and covenants set forth in this IP Agreement and the other Transaction Agreements, and other good and valuable consideration, the receipt and sufficiency of which the parties acknowledge, the parties agree as follows: + +ARTICLE I DEFINITIONS + +Section 1.1 Definitions. For the purposes of this IP Agreement, the following terms have the meanings set forth below. Capitalized terms used in this IP Agreement but not otherwise defined herein have the meanings ascribed to them in the Acquisition Agreement. + +(a) "Acquired Company IP" means all Intellectual Property owned by, as of the Initial Closing Date, any of the Acquired Companies, including the Acquired Company Patents and the Acquired Company Trademarks, but for the avoidance of doubt, excluding any Assigned IP. + + + + + +(b) "Acquired Company Patents" means (i) all of the Patents owned by, as of the Initial Closing Date, any of the Acquired Companies, including those set forth on Schedule 1.1(b) of the Seller IPA Disclosure Schedule, and (ii) any Patents that are based on any invention disclosure that is owned by, as of the Initial Closing Date, any of the Acquired Companies, but for the avoidance of doubt, excluding any Assigned IP. + +(c) "Acquired Company Trademarks" means all of the Trademarks owned by, as of the Initial Closing Date, any of the Acquired Companies, including those set forth on Schedule 1.1(c) of the Seller IPA Disclosure Schedule, but for the avoidance of doubt, excluding any Assigned IP. + +(d) "Acquisition Agreement" has the meaning ascribed to it in the recitals. + +(e) "Additional Patents" has the meaning ascribed to it in Section 2.1(b)(iii)(F). + +(f) "Ancillary IP Rights" means, with respect to any Intellectual Property, any and all of the following in any jurisdiction throughout the world: (i) rights to pursue and collect damages, costs, injunctive relief and other remedies for past, current or future infringement, misappropriation, or conflict with such Intellectual Property; and (ii) royalties, fees, income and other payments and proceeds due or accrued as of the Initial Closing Date and thereafter under or arising from such Intellectual Property. + +(g) "Assigned Copyright Materials" means all of the copyrightable or copyrighted materials owned by any Seller Party as of the Initial Closing Date that were created by a Business Employee, including the materials set forth on Schedule 1.1(g); provided that, for the avoidance of doubt, the Assigned Copyright Materials do not include any copyrightable or copyrighted material that is Software. + +(h) "Assigned Copyrights" means all of the (i) Copyright registrations and unregistered Copyrights owned by of any Seller Party as of the Initial Closing Date that are for the Assigned Copyright Materials or the Assigned Software, and (ii) other Copyrights owned by any Seller Party as of the Initial Closing Date that were created by a Business Employee, including the Copyrights set forth on Schedule 1.1(h) of the Seller IPA Disclosure Schedule; provided that, for the avoidance of doubt, the Assigned Copyrights do not include any copyright registrations or unregistered copyrights for Software other than Assigned Software. + +(i) "Assigned IP" means: (i) Assigned Copyrights, Assigned Copyright Materials, Assigned Patents, Assigned Know-How, Assigned Software, Assigned Trademarks, and Assigned Other IP; and (ii) any other Intellectual Property that is owned by any Seller Party as of the Initial Closing Date and that (a) is Formerly Owned by the Business, or (b) is or was used exclusively in connection with the Business on or prior to the Initial Closing Date. + +(j) "Assigned Know-How" means all of the Know-How owned by any Seller Party as of the Initial Closing Date that was created by a Business Employee, including the Know-How set forth on Schedule 1.1(j). 2 + + + + + +(k) "Assigned Other IP" means all of the Intellectual Property (other than Copyrights, Know-How, Patents, and Software), if any, owned by any Seller Party as of the Initial Closing Date that was created by a Business Employee, including the Trademarks and other Intellectual Property set forth on Schedule 1.1(k)(i), but for the avoidance of doubt, excluding the Trademarks set forth on Schedule 1.1(k)(ii). + +(l) "Assigned Patents" means (i) all of the Patents owned by any Seller Party as of the Initial Closing Date that are set forth on Schedule 1.1(l) of the Seller IPA Disclosure Schedule, and (ii) any Patents that are based on any invention disclosure that is owned by any Seller Party as of the Initial Closing Date and that is assigned to any of the Purchaser Assignees. + +(m) "Assigned Software" means all of the Software owned by any Seller Party as of the Initial Closing Date that was created by a Business Employee, including the Software set forth on Schedule 1.1(m); provided that, for the avoidance of doubt, the Assigned Software does not include any rights under any Licensed Patents that cover Software. + +(n) "Assigned Trademarks" means all of the Trademarks owned by any Seller Party as of the Initial Closing Date that are exclusively used in connection with the Business on the Initial Closing Date, including the Trademarks set forth on Schedule 1.1(n) of the Seller IPA Disclosure Schedule. + +(o) Intentionally Omitted. + +(p) "Business Employee" means any current or former employee or independent contractor of any Seller Party or any Acquired Company who, at the time of creation of Intellectual Property, was performing work for the Business and created such Intellectual Property for the Business in connection with the performance of such work. + +(q) "Buyer" has the meaning ascribed to it in Section 6.3. + +(r) "Change of Control Event" has the meaning ascribed to it in Section 6.3. + +(s) "Copyrights" has the meaning ascribed to it in the definition of Intellectual Property. + +(t) "Derivative Works" (i) with respect to copyrightable works shall have the meaning set forth in the U.S. Copyright Act, 17 U.S.C. §101, et seq. (including translation into other computer language and any other form in which an existing work may be recast, transformed or adapted which would constitute a derivative work under the U.S. Copyright Act, 17 U.S.C. §101), and (ii) with respect to Know-How, it shall also mean any material derived from such Know-How. + +(u) "Enterprise Data Capture Products" means (i) bar code scanner products for reading machine-readable symbols (including fixed, handheld, portable, wearable, and vehicle-mounted laser scanners and linear and area imagers), (ii) radio frequency identification ("RFID") reader products used to communicate with RFID tags (including portal RFID readers, doorway, forklift, crane and delivery-door RFID readers, handheld RFID readers, and fixed, vehicle-mounted, wearable, portable, hands-free and mobile RFID readers), or (iii) associated 3 + + + + + +accessories and Software, in each case, to the extent such products are the same as those (a) offered by the Enterprise Segment on or prior to the Initial Closing Date or (b) under development by the Enterprise Segment on the Initial Closing Date. + +(v) "Enterprise Mobile Computing Products" means durable or rugged enterprise-grade fixed, handheld, wearable, vehicle-mounted, or portable computing or smartphone products, which products shall include handheld and portable mobile computers, gun handle mobile computers, tablet computers, vehicle-mounted computers and wearable computers, in each case, to the extent such products are the same as those (i) offered by the Enterprise Segment on or prior to the Initial Closing Date, or (ii) under development by the Enterprise Segment on the Initial Closing Date. + +(w) "Enterprise Products" means (i) Enterprise Data Capture Products, (ii) Enterprise Mobile Computing Products, or (iii) Enterprise Wireless LAN Products. + +(x) "Enterprise Segment" means the Enterprise reporting segment as reflected in the Seller Financial Statements except to the extent they include Integrated Digital Enhanced (iDEN) protocol network infrastructure products and related Software and services. + +(y) "Enterprise Wireless LAN Products" means products that provide connectivity to wireless products within a local area network (whether indoors or outdoors) and that operate in compliance with the IEEE 802.11 standard (which products shall include types of products that are wireless local area network ("LAN") products, including (i) wireless access points and ports compliant with the IEEE 802.11 standard, (ii) wireless controllers compliant with the IEEE 802.11 standard, (iii) wireless switches designed for use with the foregoing wireless access points, ports and controllers, and (iv) related LAN accessories and Software), in each case, to the extent such products are the same as those (a) offered by the Enterprise Segment on or prior to the Initial Closing Date, or (b) under development by the Enterprise Segment on the Initial Closing Date. + +(z) "Excluded Field Products" means any product to the extent it was designed, developed, or manufactured for use in conjunction with or for interoperability with a (i) Public Safety Next-Gen LTE Network or (ii) Two-Way Radio Network. + +(aa) "Excluded Infrastructure Equipment" means (i) (a) government, public safety or defense communications network infrastructure equipment and systems, or (b) professional and commercial communications network infrastructure equipment and systems, in each case of clauses (a) and (b), to the extent designed, developed, or manufactured to operate with Excluded Mobile Radio Products, or (ii) network infrastructure equipment to the extent designed, developed, or manufactured to operate with a Public Safety Next-Gen LTE Network and on the frequency band allocated to the Public Safety Community. + +(bb) "Excluded Mobile Radio Products" means any product (including any government, public safety and defense, professional, and commercial product): (i) to the extent that such product has a primary communication mode of Push-to-Talk and contains a transceiver that operates: (a) in a frequency band that is allocated for land mobile radio users; and (b) in compliance with any Two-Way Radio Standard; or (ii) to the extent that such product contains a transceiver that operates in compliance with the Integrated Digital Enhanced (iDEN) protocol. 4 + + + + + +(cc) "Excluded Software and Solutions" means (i) a command and control solution (hardware and Software) to the extent that it is designed, developed, or manufactured primarily for use by the Public Safety Community or Government Entities, or (ii) Software to the extent designed primarily to operate Excluded Mobile Radio Products or Excluded Infrastructure Equipment. + +(dd) "Existing Stock" has the meaning ascribed to it in Section 2.2(d). + +(ee) "Formerly Owned by the Business" means, with respect to any type of Intellectual Property, any item of such Intellectual Property that (i) is owned by any Seller Party as of the Initial Closing Date and (ii) was at any time prior to the Initial Closing Date owned by any Acquired Company in any form, e.g., an invention owned by an Acquired Company prior to the Initial Closing Date for which a patent or patent application is owned by a Seller Party as of the Initial Closing Date. + +(ff) "Future Acquisition" has the meaning ascribed to it in Section 6.4. + +(gg) "Group" means (i) with respect to the Seller, the Seller Group, and (ii) with respect to the Purchaser, the Purchaser Group. + +(hh) "In-bound Licenses" has the meaning ascribed to it in Section 3.4. + +(ii) "Incorporated Into" means, with respect to a product, embedded in, used in, incorporated into, combined with, linked with, distributed with, provided as a service with or made available with such product, including any Object Code that is referenced or required to be present or available (e.g., available via another machine connected directly or through a network) in such product for such product to properly function in accordance with its specifications. + +(jj) "Insolvent Party" has the meaning ascribed to it in Section 4.5. + +(kk) "Intellectual Property" means any and all of the following in any jurisdiction throughout the world: (i) patents, patent applications, industrial design rights (including utility model rights, design rights, and industrial property rights), registrations and applications for registration of industrial design rights, patents of importation/confirmation, statutory invention registrations, and certificates of invention and like statutory right, all counterparts, continuations, divisions, continuations-in-part, revisions, extensions, supplementary certificates, substitutions, reexaminations, renewals, and reissuances of any of the foregoing and any patent or patent application that claims priority to any of the foregoing (collectively, "Patents"); (ii) Trademarks; (iii) copyright registrations and applications, and unregistered copyrights, published and unpublished works of authorship, and Mask Works, together with all applications, registrations, and renewals in connection therewith, and all common-law rights to any of the foregoing (collectively, "Copyrights"); (iv) computer programs, whether embodied in software, firmware or otherwise, including, software compilations, software implementations of algorithms, software tool sets, compilers, and software models and methodologies (whether in Source Code or Object Code form), and (C) translation, ported 5 + + + + + +versions and modifications of any of the foregoing (collectively, "Software"); (v) trade secrets, know-how, inventions, invention disclosures, and other confidential or proprietary information (collectively, "Know-How"); and (vi) all other intellectual property rights or industrial property rights. + +(ll) "Invention Disclosure Review List" has the meaning ascribed to it in Section 2.1(b)(iii)(A). + +(mm) "Invention Disclosure Review Team" means Paul Steinberg and Bob Sanders (or their replacements or proxies, as applicable, as determined by their respective then-current employer). + +(nn) "IP Agreement" has the meaning ascribed to it in the preamble. + +(oo) "Know-How" has the meaning ascribed to it in the definition of Intellectual Property. + +(pp) "LAN" has the meaning ascribed to it in the definition of Enterprise Wireless LAN Products. + +(qq) "Licensable" means, with respect to Intellectual Property, that (i) such Intellectual Property is owned by a third Person (other than a Seller Party), and (ii) as of the Initial Closing Date, a Seller Party has (to the extent which and for such time that a Seller Party has) a right to grant to any Purchaser Licensee the licenses, sublicenses, or related rights to such Intellectual Property as set forth in this IP Agreement without the payment of royalties or other consideration to third Persons (except for payments for which the Purchaser agrees to reimburse the Seller or payments to any third Person: (A) for inventions made by such third Person while engaged by any Seller Party; and (B) as consideration for the acquisition of such Intellectual Property) and without obtaining the consent of any third Person (except where such consent has already been granted). + +(rr) "Licensed Copyright Materials" means all of the copyrighted and copyrightable materials owned or Licensable by any Seller Party as of the Initial Closing Date that are or have been, on or prior to the Initial Closing Date, (i) used in connection with the Business, (ii) used in connection with the development of any product, service, or system in the Business, or (iii) incorporated into any product, service, or system in the Business; provided, that, for the avoidance of doubt, the Licensed Copyright Materials do not include (A) the Assigned Copyright Materials, (B) works authored after, or acquired by any Seller Party after, the Initial Closing Date, or (C) Software. + +(ss) "Licensed Copyrights" means: (i) all of the copyright registrations and unregistered copyrights owned or Licensable by any Seller Party as of the Initial Closing Date that are for the Licensed Copyright Materials or the Licensed Software; and (ii) all other Copyrights that are owned or Licensable by any Seller Party as of the Initial Closing Date that are or have been, on or prior to the Initial Closing Date, (A) used in connection with the Business, (B) used in connection with the development of any product, service, or system in the Business, or (C) incorporated into any product, service, or system in the Business; provided that, for the avoidance of doubt, the Licensed Copyrights do not include the Assigned Copyrights or 6 + + + + + +any copyright registrations or unregistered copyrights that are for (I) copyrightable works authored after, or acquired by any Seller Party after, the Initial Closing Date or (II) Software (other than the Licensed Software). + +(tt) "Licensed IP" means the Licensed Copyrights, Licensed Copyright Materials, Licensed Know-How, Licensed Patents, Licensed Software, Licensed Trademarks, Mobility Trademarks, Non-Mobility Trademarks, and Licensed Other IP. + +(uu) "Licensed Know-How" means all of the Know-How owned or Licensable by any Seller Party as of the Initial Closing Date that is or has been, on or prior to the Initial Closing Date, (i) used in connection with the Business, (ii) used in connection with the development of any product, service, or system in the Business, or (iii) incorporated into any product, service, or system in the Business; provided that, for the avoidance of doubt, the Licensed Know-How does not include (A) the Assigned Know-How, or (B) any Know-How that is developed or acquired by any Seller Party after the Initial Closing Date. + +(vv) "Licensed Other IP" means all of the Intellectual Property (other than the Licensed Copyrights, Licensed Patents, Licensed Copyright Materials, Licensed Know-How, Licensed Software, and Trademarks), if any, owned or Licensable by any Seller Party as of the Initial Closing Date that is or has been, on or prior to the Initial Closing Date, (i) used in connection with the Business, (ii) used in connection with the development of any product, service, or system in the Business, or (iii) incorporated into any product, service, or system in the Business; provided that, for the avoidance of doubt, the Licensed Other IP does not include the Assigned Other IP. + +(ww) "Licensed Patents" means all of the Patents (i) owned by any Seller Party as of the Initial Closing Date or that are based on an invention disclosure owned by any Seller Party as of the Initial Closing Date, or (ii) Licensable by any Seller Party as of the Initial Closing Date; provided that, for the avoidance of doubt, the Licensed Patents do not include the Assigned Patents. + +(xx) "Licensed Software" means the Software owned or Licensable by any Seller Party as of the Initial Closing Date that is or has been, on or prior to the Initial Closing Date, (i) used in connection with the Business, (ii) used in connection with the development of any product, service, or system in the Business, or (iii) incorporated into any product, service, or system in the Business; provided that, for the avoidance of doubt, the Licensed Software does not include (I) the Assigned Software, (II) Software developed or acquired by any Seller Party after the Initial Closing Date, or (C) Seller Group Software specifically licensed to the Purchaser Group under another Transaction Agreement. + +(yy) "Licensed Trademarks" means the Trademarks set forth on Schedule 1.1(yy); provided that, for the avoidance of doubt, the Licensed Trademarks do not include the Assigned Trademarks, the Mobility Trademarks, or the Non-Mobility Trademarks. + +(zz) "LTE" means the Long Term Evolution (LTE) or Long Term Evolution Advanced (LTE-A) fourth generation (4G) broadband communications standards, including various derivations thereof that do not fundamentally alter the character thereof (e.g., wireless air-interface, framing structure, control, call set-up and connection management). 7 + + + + + +(aaa) "Mask Work" means: (i) any mask work, registered or unregistered, as defined in 17 U.S.C. §901; (ii) all registrations and applications to register the foregoing anywhere in the world; (iii) all foreign counterparts and analogous rights anywhere in the world (including semiconductor topography rights); and (iv) all rights in and to any of the foregoing. + +(bbb) "Material IP Contracts" has the meaning ascribed to it in Section 3.4. + +(ccc) "Mobility Intellectual Property License" means that certain Amended and Restated Intellectual Property License Agreement, by and between Motorola Mobility, Inc. and Motorola, Inc., effective as of July 31, 2010. + +(ddd) "Mobility Trademark License" means that certain Amended and Restated Exclusive License Agreement, by and between Motorola Trademark Holdings, LLC and Motorola, Inc., effective as of July 30, 2010. + +(eee) "Mobility Trademarks" means any Trademarks licensed to any Seller Party or any Acquired Company pursuant to the Mobility Trademark License that are, as of the Initial Closing Date, used in connection with the Business or any product, service, or system in the Business. + +(fff) "Mobility Transition Period" has the meaning ascribed to it in Section 2.2(d)(i)(A). + +(ggg) "New Business Employee" has the meaning ascribed to it in Section 2.1(b)(iii)(D). + +(hhh) "Non-Mobility Trademarks" has the meaning ascribed to it in Section 2.2(d)(i)(B). + +(iii) "Non-Mobility Transition Period" has the meaning ascribed to it in Section 2.2(d)(i)(B). + +(jjj) "Object Code" means one or more computer instructions in machine readable form (whether or not packaged in directly executable form), including any such instructions that are readable in a virtual machine, whether or not derived from Source Code, together with any partially compiled or intermediate code that may result from the compilation, assembly or interpretation of any Source Code. Object Code includes firmware, compiled or interpreted programmable logic, libraries, objects, bytecode, machine code, and middleware. + +(kkk) "Off-the-Shelf Software Licenses" means licenses in respect of commercially available, unmodified, "off-the-shelf" Software used by any of the Seller Entities solely for its own internal use with respect to the Business. + +(lll) "Open Source Software" means any Software that is subject to any license that is, or is substantially similar to, a license approved by the Open Source Initiative and listed 8 + + + + + +at http://www.opensource.org/licenses as of the Initial Closing Date, which licenses include all versions of the GNU General Public License (GPL), the Lesser GNU Public License (LGPL), the GNU Affero GPL, the MIT License, the Eclipse Public License, the Common Public License, the CDDL, the Mozilla Public License, the Academic Free License, the BSD License and the Apache License, or any Reciprocal License. + +(mmm) "Out-bound Licenses" has the meaning ascribed to it in Section 3.4. + +(nnn) "Outstanding Patents" has the meaning ascribed to it in Section 2.1(b)(iii)(F). + +(ooo) "Patent Review List" has the meaning ascribed to it in Section 2.1(b)(iii)(A). + +(ppp) "Patents" has the meaning ascribed to it in the definition of Intellectual Property. + +(qqq) "Permitted Type of Enterprise Mobile Computing Product" means a Type of Enterprise Mobile Computing Product that: (i) (a) is a component used in a solution, (b) interoperates with one or more Purchaser Excluded Products in such solution, and (c) is designed primarily for such use and interoperation; (ii) is a standalone product that is designed primarily for use by the Public Safety Community or Governmental Entities; or (iii) is a Purchaser Excluded Product that is designed primarily (A) for use by the Public Safety Community or Governmental Entities, (B) to operate in compliance with the Integrated Digital Enhanced (iDEN) protocol, or (C) to operate in compliance with any Two-Way Radio Standard. + +(rrr) "product" means device or product. + +(sss) "Public Safety LTE Smartphone Devices" means any fixed, handheld, vehicle-mounted, wearable, or portable wireless product that is compliant with LTE and is designed primarily for use by either the Public Safety Community or Governmental Entities. + +(ttt) "Public Safety Next-Gen LTE Network" means a network that is based upon LTE and operates on a frequency band allocated to the Public Safety Community. + +(uuu) "Purchaser" has the meaning ascribed to it in the preamble. + +(vvv) "Purchaser Assignees" means one or more Persons designated, on or prior to the Initial Closing Date, by Purchaser to Seller. + +(www) "Purchaser Excluded Products" means (i) Excluded Infrastructure Equipment, (ii) Excluded Mobile Radio Products, (iii) Excluded Software and Solutions, or (iv) Excluded Field Products. + +(xxx) "Purchaser Licensees" means each (for the avoidance of doubt, and without limiting any other provision of this IP Agreement, current or future) Affiliate of the Purchaser (including the Acquired Companies). 9 + + + + + +(yyy) "Push-to-Talk" ("PTT") means a method of transmitting voice or data communications on simplex and half-duplex channels that uses a momentary button to switch from voice or data reception mode to transmit mode. + +(zzz) "Reciprocal License" means a license of an item of Software that requires or conditions any rights granted in such license upon: (i) the disclosure, licensing or distribution of other Software (whether or not in Source Code form); (ii) a requirement that any other licensee of the Software be permitted to modify, make Derivative Works of, or reverse-engineer any such other Software; (iii) a requirement that such other Software be redistributable by other licensees; (iv) the grant of any patent rights including non-assertion or patent license obligations; or (v) the imposition of any other material limitation, restriction, or condition on any Seller Entity's right to use or distribute other Software in connection with the Business (other than a requirement to include an acknowledgement of authorship of such item of Software or to distribute a copy of the terms and conditions of the applicable license agreement with respect to such Software). + +(aaaa) "Registered Intellectual Property" has the meaning ascribed to it in Section 3.1. + +(bbbb) "Retained Seller Trademarks" means any and all Trademarks owned or used by any Seller Party on or prior to the Initial Closing Date or at any time thereafter (but excluding, for the avoidance of doubt, any Trademarks that constitute an Acquired Asset). + +(cccc) "Review Patent" has the meaning ascribed to it in Section 2.1(b)(iii). + +(dddd) "Review Period" means the period of time on or prior to the one year anniversary of the Initial Closing Date. + +(eeee) "RFID" has the meaning ascribed to it in Enterprise Data Capture Products. + +(ffff) "SDO" means a patent pool, official or de facto standards setting or development organization, industry standards body industry, trade association or other similar organization. + +(gggg) "SDO Member" means any Person that is or has ever been, directly or indirectly, (i) a member or promoter of, or a contributor to or a participant in, any SDO, (ii) obligated to license or disclose any Intellectual Property to, or made any commitments or agreements regarding, any SDO, or (iii) a participant in the writing, preparing, amending, revising, sponsoring, organizing, promulgating, setting, or approving of any specifications, standards, requirements, or guidelines related to the Business. + +(hhhh) "Section 365" has the meaning ascribed to it in Section 4.5. + +(iiii) "Section 365(n)" has the meaning ascribed to it in Section 4.5. + +(jjjj) "Seller" has the meaning ascribed to it in the preamble. 10 + + + + + +(kkkk) "Seller Business" means, collectively, the businesses of each member of the Seller Parties as of the Initial Closing Date, but excluding the Business. + +(llll) "Seller Entity" means each Acquired Company and each Seller Party. + +(mmmm) "Seller Excluded Products" means a (i) Type of Enterprise Data Capture Product, (ii) Type of Enterprise Mobile Computing Product, or (iii) Type of Enterprise Wireless LAN Product. + +(nnnn) "Seller IP" means any and all Intellectual Property owned by any Seller Party prior to the Initial Closing Date or at any time thereafter. + +(oooo) "Seller IPA Disclosure Schedule" has the meaning ascribed to it in Article III. + +(pppp) "Seller Licensed Activities" has the meaning ascribed to it in Section 2.1(d). + +(qqqq) "Seller Party" means Seller and each of its Affiliates (but, for the avoidance of doubt, excluding the Acquired Companies). + +(rrrr) "Shared Review Invention Disclosure" has the meaning ascribed to it in Section 2.1(b)(iii)(C). + +(ssss) "Shared Review Patent" has the meaning ascribed to it in Section 2.1(b)(iii)(B). + +(tttt) "Smart Sensing Network Equipment" means any sensing equipment for use in conjunction with or interoperable with a distributed network of sensors intended to measure or ascertain data, including video, imaging, RFID, audio, temperature, and data measurements. + +(uuuu) "Software" has the meaning ascribed to it in the definition of Intellectual Property. + +(vvvv) "Source Code" means one or more statements in human readable form, including comments, definitions and annotations, which are generally formed and organized to the syntax of a computer or programmable logic programming language (including such statements in batch or scripting languages and including hardware definition languages such as VHDL), together with any and all text, data and data structures, diagrams, manuals, instructions, procedures, and other information that describe the foregoing. + +(wwww) "Third-Party Intellectual Property" means any and all Intellectual Property licensed to any Seller Party from, or otherwise owned by, a Person other than a Seller Party (including open source Software, freeware or other publicly available Software). + +(xxxx) "Trademarks" means (i) trademarks, service marks, logos, product numbers, trade dress, trade names, corporate names and Internet domain names, slogans, and 11 + + + + + +other indicia of commercial source or origin (whether registered, common law, statutory, or otherwise, and together with all translations thereof), (ii) all registrations and applications to register the foregoing anywhere in the world (including all renewals in connection therewith), and (iii) all goodwill symbolized by any of the foregoing clauses (i) and (ii). + +(yyyy) "Transferred IP" means the Assigned IP and the Acquired Company IP. + +(zzzz) "Transferred IP Docket" has the meaning ascribed to it in Section 2.3(a). + +(aaaaa) "Two-Way Radio Network" means a wireless network (whether implemented in hardware or Software) capable of enabling, managing, supervising, or securing a communication of voice, data, or multimedia information in compliance with any one or more of the Two-Way Radio Standards. + +(bbbbb) "Two-Way Radio Standards" means (i) any of the following standards: (A) Association of Public-Safety Communications Officials Project 25 (including Digital APCO P25), (B) European Telecommunications Standards Institute Terrestrial Trunked Radio (including TETRA), (C) European Telecommunications Standards Institute Digital Mobile Radio (including TETRAPOL), (D) European Telecommunications Standards Institute Digital Private Mobile Radio, (E) MotoTalk, (F) General Mobile Radio Service, (G) Family Radio Service, (H) Analog MDC-1200, (I) Analog Conventional, (J) Private Mobile Radio (PMR), Logic Trunked Radio (LTR), MPT 1327 / MPS 1327, Selcall (5-Tone), and NXDN, (K) Dogota, Mobile Radio (DMR), digital Private Mobile Radio (dPMR), and Police Digital Trunking (PDT), (L) Global Open Trunked Architecture (GoTa), (M) ARIB standards T-98 and T-102 (also known as DCR for Japan), (N) China specific protocol (PDMS/CDMR), (O) Enhanced Digital Access Communication System (EDACS), (P) OpenSky and GSM-R (Railway variant of GSM for Two-Way Radio), and (Q) Project 25 Conventional TDMA and China specific protocols (PDMR-T, PDMR-F); and (ii) various derivations thereof that do not fundamentally alter the character thereof. For the avoidance of doubt, "Two-Way Radio Standards" do not include Wireless Standards. + +(ccccc) "Type of Enterprise Data Capture Product" means (i) bar code scanner products for reading machine-readable symbols (including fixed, handheld, portable, wearable, and vehicle-mounted laser scanners and linear and area imagers), (ii) RFID reader products used to communicate with RFID tags (including portal RFID readers, doorway, forklift, crane and delivery-door RFID readers, handheld RFID readers, and fixed, vehicle-mounted, wearable, portable, hands-free and mobile RFID readers), or (iii) associated accessories and Software. + +(ddddd) "Type of Enterprise Mobile Computing Product" means durable or rugged enterprise-grade fixed, handheld, wearable, vehicle- mounted, or portable computing or smartphone products, which products shall include handheld and portable mobile computers, gun handle mobile computers, tablet computers, vehicle mounted computers and wearable computers. + +(eeeee) "Type of Enterprise Wireless LAN Product" means products that provide connectivity to wireless products within a local area network (whether indoors or outdoors) and that operate in compliance with the IEEE 802.11 standard (which products shall include types of 12 + + + + + +products that are wireless LAN products, including (i) wireless access points and ports compliant with the IEEE 802.11 standard, (ii) wireless controllers compliant with the IEEE 802.11 standard, (iii) wireless switches designed for use with the foregoing wireless access points, ports and controllers, and (iv) related LAN accessories and Software). + +(fffff) "Wireless Standards" means: (i) all cellular communication technical specifications adopted as a standard by either an SDO or a major operator of public subscription systems for in-country requirements (e.g., frequency spectrum availability, interconnection with preexisting telephony networks, etc.), as well as various adjunct protocols to the extent incorporated into such standards, including those technical specifications for digital radiotelephone service (A) promulgated by ETSI and presently known as the GSM, Pan-European Digital Cellular radiotelephone service (including Personal Communications Network services, presently known as DCS1800 and in the United States PCS1900), (B) promulgated in the United States by the Telecommunications Industry Association / Electronic Industries Associates (TIA/EIA) and presently known as AMPS (Advanced Mobile Phone System), NAMPS (Narrowband AMPS), TDMA Cellular/PCS - Radio Interface Interim Standards IS-I36, IS-137 or IS-138 (including IS-54, IS-55 and IS-56 and PCS 1900 standards JSTD-009, JSTD-010 and JSTD-011), (C) promulgated by ARIB (formerly RCR) and presently known as PDC (Personal Digital Cellular), (D) promulgated by the TIA and presently known as IS-95, IS-95B, RTT MC 1X, 1X Plus, and 1Xtreme Code Division Multiple Access services, (E) presently known as third generation (3G) cellular standards currently under development and known by such designations, including 3GPP, UMTS, WCDMA, 3GPP2, and CDMA2000, or (F) presently known as LTE; (ii) all technical specifications promulgated or currently under development by any of (A) IEEE and presently known as IEEE 802.11/WiFi or 802.15/WPAN standards, (B) EPCGlobal and presently known as EPC Radio Frequency Identity Protocols, (C) ISO/IEC 18000, 13157, 21481, 14443, or 15693, and presently known as RFID or NFC, or (D) Bluetooth; (iii) various derivations of the specifications and protocols referenced in clauses (i) and (ii) that do not fundamentally alter the character of such specifications and protocols (e.g., wireless air-interface, framing structure, control, call set-up and connection management); and (iv) any and all international versions of the specifications and protocols referenced in clauses (i) through (iii). + +Section 1.2 Construction. Section 11.10 of the Acquisition Agreement shall apply mutatis mutandis to this IP Agreement. + +ARTICLE II ASSIGNMENTS AND LICENSES + +Section 2.1 Transferred IP. + +(a) Acquired Company IP. For the avoidance of doubt, the Purchaser Group will acquire all Acquired Company IP by virtue of the acquisition by the Purchaser Group of the Acquired Company Shares pursuant to the terms of the Acquisition Agreement. 13 + + + + + +(b) Assignment of Assigned IP. + +(i) Assignment. Effective as of the applicable Closing Date, the Seller hereby sells, assigns, transfers, conveys and delivers all of its right, title, and interest in and to the Assigned IP (together with the goodwill of the business symbolized by any Trademarks that constitute Assigned IP) and all Ancillary IP Rights with respect thereto, and shall cause the other Seller Parties to do the same, to the Purchaser Assignees and, effective as of the applicable Closing Date, the Purchaser Assignees hereby purchase, acquire and accept the same from the Seller Parties. The Seller hereby waives (and shall cause the other Seller Parties to waive) any moral rights, including rights of attribution, integrity, and disclosure, arising from all or any part of any Copyrights that constitute Assigned IP, together with all claims for damages and other remedies asserted on the basis of moral rights, and hereby sells, assigns, transfers, conveys, and delivers (and shall cause the other Seller Parties to do the same) to the Purchaser Assignees any waivers granted to any Seller Party of any such moral rights. + +(ii) Mandatory Laws. If and to the extent that, as a matter of Law in any jurisdiction, ownership, title, or any rights or interest in or to any of the Assigned IP cannot be assigned as provided in Section 2.1(b)(i), (A) the Seller irrevocably agrees to (and shall cause the other Seller Parties to) assign and transfer, and the Seller hereby assigns and transfers (and shall cause the other Seller Parties to assign and transfer) to the Purchaser Assignees all rights (including all economic and commercialization rights) that can be assigned pursuant to Section 2.1(b)(i) to the fullest extent permissible, and (B) the Seller hereby grants to the Purchaser Assignees, and hereby agrees to cause the other Seller Parties to grant to the Purchaser Assignees, an unlimited, exclusive, irrevocable, assignable, transferable, sublicenseable, worldwide, perpetual, royalty-free, fully-paid up license to use, exploit, and commercialize in any manner now known or in the future discovered and for whatever purpose, any and all rights to Assigned IP that cannot be assigned as contemplated by Section 2.1(b)(i). + +(iii) Patent Review Process. + +(A) Information Exchange. Within forty-five (45) days after the Effective Date, Seller shall provide (I) to the Purchaser, an updated list of all Patents (other than those set forth on Schedule 1.1(l) of the Seller IPA Disclosure Schedule) owned by any Seller Party that (x) have an effective filing date or are based on an invention disclosure having a date of disclosure that is on or after January 9, 2007, and (y) that name as inventors, in Seller's reasonable, good-faith belief, one or more Business Employees and one or more Persons that are not Business Employees (the "Patent Review List"), and (II) to the Invention Disclosure Review Team, a list of invention disclosures (other than those set forth on Schedule 1.1(l) of the Seller IPA Disclosure Schedule or Schedule 1.1(j)) owned by any Seller Party that name as contributors one or more Business Employees 14 + + + + + +and one or more Persons that are not Business Employees (which list shall include the contributors, the title thereof, and the "location code" therefor) (the "Invention Disclosure Review List"). The Patent Review List shall include the Patents set forth on Schedule 2.1(b)(iii)(A). + +(B) Patent Review and Ownership. The parties shall promptly review the Patent Review List and, in good-faith, discuss and negotiate during the Review Period whether any of the Patents listed on such Patent Review List (each, a "Shared Review Patent") should be or should have been, as applicable, an Assigned Patent, based upon the general guideline and principle that Shared Review Patents that are primarily paid for, primarily used by, or primarily arising out of, or for which associated costs and fees were primarily allocated to, the Business or any Acquired Company (as compared with the Seller Business) should be or should have been, as applicable, Assigned Patents. Seller shall provide to Purchaser, upon Purchaser's reasonable request during the Review Period, information regarding such Patent Review List, the Patents listed thereon, and each such determination. If the parties agree, during the Review Period, that a Shared Review Patent should be or should have been, as applicable, an Assigned Patent, then, if such agreement was reached on or prior to the Initial Closing Date, the parties shall add such Shared Review Patent to Schedule 1.1(l) of the Seller IPA Disclosure Schedule and, if such agreement was reached after the Initial Closing Date, Seller shall (and shall cause the other Seller Parties to) promptly execute a Contract containing a present grant of assignment (or, if and to the extent, as a matter of Law in any jurisdiction, ownership, title, or any rights or interest in or to any such Shared Review Patent cannot be so assigned, a license) of such Shared Review Patent to the Purchaser Assignees, consistent with the terms and conditions of Section 2.1(b)(i) or Section 2.1(b)(ii), as applicable. If the parties cannot agree on whether any Shared Review Patent should be or should have been, as applicable, an Assigned Patent, the parties shall, during the Review Period, escalate such dispute to successively more senior-levels of executives and shall each make sure each such senior executive is promptly available to speak with (including by telephone) his or her counterpart. + +(C) Invention Disclosure Review and Ownership. During the Review Period, within seventy-five (75) days after the Effective Date (or, in the event of any repeat of the process set forth in this Section 2.1(b)(iii)(C) in accordance with Section 2.1(b)(iii)(D), promptly (and no later than seventy-five (75) days) thereafter), Seller shall cause (on and prior to the Initial Closing Date), or the parties shall each cause (following the Initial Closing Date), as applicable, their respective employees on the Invention Disclosure Review Team to: (I) promptly review the Invention Disclosure Review List; (II) in good-faith determine whether any of the invention disclosures (and inventions listed on the Invention Disclosure Review List (and inventions described therein)) 15 + + + + + +(each, a "Shared Review Invention Disclosure") should be or should have been, as applicable, Assigned Know-How, based upon the general guideline and principle that Shared Review Invention Disclosures that are primarily paid for, primarily used by, or primarily arising out of, or for which associated costs and fees were primarily allocated to, the Business or any Acquired Company (as compared with the Seller Business) should be Assigned Know-How; and (III) provide to Purchaser the applicable Invention Disclosure Review List and such determinations of the Invention Disclosure Review Team with respect to such Invention Disclosure Review List. + +Seller shall provide to Purchaser, upon Purchaser's reasonable request during the Review Period, information regarding such Invention Disclosure Review List, the invention disclosures listed thereon, and each such determination; provided, however, that Seller shall not be required to disclose to Purchaser the content of any Shared Review Invention Disclosure in response to any such request. Upon review of such determinations or information, as applicable, the parties shall promptly jointly review such determinations and information, during the Review Period, and determine, in good faith, whether the Invention Disclosure Review Team should re-review any Shared Review Invention Disclosures on such Invention Disclosure Review List and, if so, the parties shall repeat the process set forth in this Section 2.1(b)(iii)(C) with respect to such Shared Review Invention Disclosures. If the Invention Disclosure Review Team determines, during the Review Period, that a Shared Review Invention Disclosure should be or should have been, as applicable, Assigned Know- How, then, if such agreement was reached on or prior to the Initial Closing Date, the parties shall add such Shared Review Invention Disclosure to Schedule 1.1(j) and, if such agreement was reached after the Initial Closing Date, Seller shall (and shall cause the other Seller Parties to) promptly execute a Contract containing a present grant of assignment (or, if and to the extent, as a matter of Law in any jurisdiction, ownership, title, or any rights or interest in or to any such Shared Review Invention Disclosure cannot be so assigned, a license) of such Shared Review Invention Disclosure to the Purchaser Assignees, consistent with the terms and conditions of Section 2.1(b)(i) or Section 2.1(b)(ii), as applicable. + +(D) Newly Identified Business Employee. If, during the Review Period, the Purchaser identifies a Person ("New Business Employee") that the Purchaser reasonably believes, in good faith, is or was a Business Employee and (I) such New Business Employee is not named as a contributor on any Shared Review Invention Disclosure on an Invention 16 + + + + + +Disclosure Review List and is not named as an inventor on any Shared Review Patent on a Patent Review List, in each case previously provided to the Purchaser, or (II) Purchaser reasonably believes, in good faith, that Seller has not provided a complete and accurate Invention Disclosure Review List or Patent Review List with respect to any Patents or invention disclosures for which such New Business Employee is named as an inventor or contributor, respectively, then in each case of clauses (I) and (II), the Purchaser may notify Seller of such belief, and Seller shall promptly (but in no event more than thirty (30) days following such notice) provide to the Purchaser or the Invention Disclosure Review Team, as applicable, an updated Patent Review List and Invention Disclosure Review List with respect to such New Business Employee, and the parties shall repeat the process set forth in Section 2.1(b)(iii)(B) and Section 2.1(b)(iii)(C) with respect to such updated Patent Review List and Invention Disclosure Review List, respectively. + +(E) Inventors Are All Business Employees. If (i) during the Review Period, Purchaser identifies a Patent or invention disclosure owned by any Seller Party where all of the inventors of such Patent or all of the contributors of such Invention Disclosure, respectively, are Business Employees, and (ii) Purchaser provides to Seller the evidence on which Purchaser is basing such identification, then such Patent or Invention Disclosure shall be an Assigned Patent or Assigned Know-How, as applicable, and the parties shall, where applicable on or prior to the Initial Closing Date, add such Patent or invention disclosure, as applicable, to Schedule 1.1(l) of the Seller IPA Disclosure Schedule or Schedule 1.1(j), as applicable, or, where applicable after the Initial Closing Date, Seller shall (and shall cause the other Seller Parties to) promptly execute a Contract containing a present grant of assignment (or, if and to the extent, as a matter of Law in any jurisdiction, ownership, title, or any rights or interest in or to any such Patent or Invention Disclosure, as applicable, cannot be so assigned, a license) of such Patent or Invention Disclosure, as applicable, to the Purchaser Assignees, consistent with the terms and conditions of Section 2.1(b)(i) or Section 2.1(b)(ii), as applicable. + +(F) Arbitration. Attached as Schedule 2.1(b)(iii)(F) is a schedule of additional Patents provided by Seller to Purchaser prior to the Effective Date for review with respect to ownership allocation between the parties pursuant to the general guidelines and principles set forth in Section 2.1(b)(iii)(B) (the "Additional Patents"). The parties shall promptly, in good- faith, discuss and negotiate whether any of the Additional Patents should be or should have been, as applicable, an Assigned Patent. If any of such Additional Patents are not reviewed, or the parties cannot agree on whether any Additional Patent should be or should have been, as applicable, an Assigned Patent, prior to the Initial Closing Date, then the parties shall escalate such dispute to successively more senior-levels of executives as set forth in Section 2.1(b)(iii)(B). If such senior-levels of executives cannot resolve the dispute with respect to any such Patents (the "Outstanding Patents") by the Initial Closing Date, then either party may, within thirty (30) days after the Initial Closing Date, 17 + + + + + +submit such Outstanding Patents for dispute resolution as follows. One or both parties may, within thirty (30) days after the Initial Closing Date, submit the dispute with respect to such Outstanding Patents for arbitration in Chicago, Illinois before a single arbitrator. The arbitration shall be administered by JAMS pursuant to JAMS' Streamlined Arbitration Rules and Procedures, as those Rules may be amended by written agreement of the parties. The parties shall cooperate, in good faith, prior to the commencement of any arbitration under this Section 2.1(b)(iii)(F), to agree to any such amendments or other processes with respect to such arbitration (e.g., timing of the arbitration, arbitrator's familiarity with patent law). The parties shall instruct the arbitrator, and the arbitrator shall resolve each dispute regarding the ownership of each Outstanding Patent, based upon the general guideline and principle that such Outstanding Patents that are primarily paid for, primarily used by, or primarily arising out of, or for which associated costs and fees were primarily allocated to, the Business or any Acquired Company (as compared with the Seller Business) should be or should have been, as applicable, Assigned Patents. The parties shall maintain the confidential nature of all information, documents and materials disclosed and statements made in connection with any negotiations or arbitration proceeding, and any arbitration proceeding and the judgment, including any hearing or award, except as may be necessary to prepare for or conduct the arbitration hearing on the merits. The parties shall each bear their respective costs and expenses with respect to any arbitration pursuant to this Section 2.1(b)(iii)(F); provided, however, that the parties shall equally share (on a 50/50 basis) the cost of the arbitrator. If the arbitrator determines that any Outstanding Patent should be or should have been, as applicable, an Assigned Patent, Seller shall (and shall cause the other Seller Parties to) assign such Patent to the Purchaser Assignees in accordance with Section 2.1(b)(iii)(E). + +(c) License-Back of Patents. Effective as of the Initial Closing Date, the Purchaser will cause each Acquired Company and each Purchaser Assignee to grant, following each applicable Closing Date, to the Seller Parties, an irrevocable (except as expressly set forth herein), perpetual, non-sublicenseable (except as expressly set forth herein), fully paid-up, royalty-free, worldwide, non-transferable (except as expressly set forth herein), non-exclusive license, under the Acquired Company Patents and Assigned Patents: + +(i) (A) to use the Acquired Company Patents and Assigned Patents in the operation of the Seller Business and to practice any methods, processes, and procedures in connection therewith and (B) to make, have made, use, sell, offer for sale, import, and otherwise dispose of products, services, and systems that were designed, developed, manufactured, distributed, offered for sale, sold, resold, supported, otherwise under development, or provided, as of the applicable Closing Date, by the Seller Parties in connection with the Seller Business and to practice any methods, processes, and procedures in connection therewith, and in each case of clauses (A) and (B), including with respect to all Derivative Works and natural evolutions thereof; 18 + + + + + +(ii) to make, have made, use, sell, offer for sale, import, and otherwise dispose of Smart Sensing Network Equipment; and + +(iii) to make, have made, use, sell, offer for sale, import, and otherwise dispose of Public Safety LTE Smartphone Devices. + +(d) License-Back of Non-Patent, Non-Trademark IP. Effective as of the Initial Closing Date, the Purchaser will cause each Acquired Company and each Purchaser Assignee to grant, following each applicable Closing Date, to the Seller Parties, an irrevocable (except as expressly set forth herein), non-sublicenseable (except as expressly set forth herein), perpetual, fully paid-up, royalty-free, worldwide, non-transferable (except as expressly set forth herein), non-exclusive license, under the Transferred IP (other than Trademarks and Patents) that is or has been, on or prior to the Initial Closing Date, (x) used in connection with the Seller Business, (y) used in connection with the development of any product, service, or system in the Seller Business, or (z) incorporated into any product, service, or system in the Seller Business: + +(i) (A) to use such Transferred IP in the operation of the Seller Business and to practice any methods, processes, and procedures in connection therewith and (B) to make, have made, use, sell, offer for sale, import, and otherwise dispose of products, services, and systems that were designed, developed, manufactured, distributed, offered for sale, sold, resold, supported, otherwise under development, or provided, as of the applicable Closing Date, by the Seller Parties in connection with in the Seller Business and to practice any methods, processes, and procedures in connection therewith, and in each case of clauses (A) and (B), including with respect to all Derivative Works and natural evolutions thereof; + +(ii) to make, have made, use, sell, offer for sale, import and otherwise dispose of Smart Sensing Network Equipment; and + +(iii) to make, have made, use, sell, offer for sale, import, and otherwise dispose of Public Safety LTE Smartphone Devices. + +Clauses (i) through (iii) above are collectively referred to as the "Seller Licensed Activities." The license rights granted under this Section 2.1(d) include: + +(1) with respect to such Transferred IP that constitutes Copyrights or copyrightable materials (other than Software), the rights to reproduce, prepare Derivative Works of, perform, display, and distribute such Copyrights and copyrightable materials in connection with the Seller Licensed Activities; and + +(2) with respect to such Transferred IP that constitutes Software, the rights to: (I) use, reproduce, prepare Derivative Works of, 19 + + + + + +perform, and display such Software in connection with the Seller Licensed Activities; and (II) distribute such Software and Derivative Works of such Software in connection with the Seller Licensed Activities (but in Source Code form, solely as permitted pursuant to Section 2.1(f) and in accordance with Article V). + +For the avoidance of doubt, this Section 2.1(d) shall not constitute a license to Trademarks. + +(e) Seller Excluded Products. The licenses granted pursuant to Section 2.1(c)(i), Section 2.1(c)(ii), Section 2.1(d)(i), and Section 2.1(d)(ii) do not extend to any product, system, or service if and solely to the extent such product, system, or service constitutes or includes a Seller Excluded Product; provided, that if any such Seller Excluded Product is a Type of Enterprise Mobile Computing Product, then if and solely to the extent that such Seller Excluded Product is a Permitted Type of Enterprise Mobile Computing Product, such licenses will extend solely to such Permitted Type of Enterprise Mobile Computing Product that constitutes such product, system, or service or, as included in such product, system, or service, is included in such product, system, or service, as applicable. By way of example, if a Seller Excluded Product is a single component of a product, system, or service that is otherwise licensed under Section 2.1(c)(i), Section 2.1(c)(ii), Section 2.1(d)(i), or Section 2.1(d)(ii) and such Seller Excluded Product is not a Permitted Type of Enterprise Mobile Computing Product, such licenses do not extend to such component, but such licenses do extend to the remainder of such licensed product, system, or service. By way of further example, if a Seller Excluded Product is a single component of a product, system, or service that is otherwise licensed under Section 2.1(c)(i), Section 2.1(c)(ii), Section 2.1(d)(i), or Section 2.1(d)(ii), then to the extent such Seller Excluded Product is a Permitted Type of Enterprise Mobile Computing Product, such licenses extend to such component as included in such licensed product, system, or service. + +(f) Sublicenses. Each of the Seller Parties may grant sublicenses of the licenses granted to it pursuant to Section 2.1(c) or Section 2.1(d): (i) to any (for the avoidance of doubt, and without limiting any other provision of this IP Agreement, current or future) direct or indirect Subsidiary of Seller (but only for so long as such Person remains such a Subsidiary); (ii) to any other Person in connection with the sale or disposition of substantially all of the assets of a business or product line of any of the Seller Parties; (iii) other than with respect to Section 2.1(c), for the purpose of any Person's (including resellers, distributors, and OEMs) distribution of products licensed under Section 2.1(c) or Section 2.1(d); (iv) other than with respect to Section 2.1(c), to any Person (including OEMs, JDMs, suppliers, contractors, and subcontractors) solely for the purpose of, and to the extent necessary for, such Person to perform any service (including any service with respect to the design, manufacture, import, export, or supply of any product, service, or system in the Seller Business or any components thereof) for a Seller Party, and not for the direct benefit of such Person or any other Person, (v) other than with respect to Section 2.1(c), to a customer of a Seller Party for such customer's use of a product licensed under Section 2.1(c) or Section 2.1(d); or (vi) other than with respect to Section 2.1(c), with respect to Software, to any Person for the purpose of such 20 + + + + + +Person's development of Software that is compatible or interoperates with a product licensed under Section 2.1(c) or Section 2.1(d). The Seller Parties have no other right to grant sublicenses under any of the licenses granted to the Seller Parties under this IP Agreement. + +(g) No Implied Rights. The Seller acknowledges and agrees that, except as expressly set forth in this Section 2.1 of this IP Agreement, the Seller Parties are not obtaining any rights under this IP Agreement in or to any Intellectual Property owned by Purchaser or any Purchaser Licensee as of the Initial Closing Date or at any time thereafter, and nothing in this IP Agreement confers on any Seller Party any right to use any names of the Purchaser or any Purchaser Licensee in any advertising publicity or other promotional activities. + +Section 2.2 Licensed IP. + +(a) Patent License. Effective as of the Initial Closing Date, the Seller hereby grants (and will cause each other Seller Party to grant following each applicable Closing Date), to the Purchaser Licensees an irrevocable (except as expressly set forth herein), perpetual, non-sublicenseable (except as expressly set forth herein), fully paid-up, royalty-free, worldwide, non-transferable (except as expressly set forth herein), non-exclusive license, under the Licensed Patents: + +(i) (A) to use the Licensed Patents in the operation of the Business and to practice any methods, processes, and procedures in connection therewith and (B) to make, have made, use, sell, offer for sale, import and otherwise dispose of products, services, and systems that were designed, developed, manufactured, distributed, offered for sale, sold, resold, supported, otherwise under development, or provided, as of the applicable Closing Date, by the Seller Entities in connection with the Business and to practice any methods, processes, and procedures in connection therewith, and in each case of clauses (A) and (B), including with respect to all Derivative Works and natural evolutions thereof; and + +(ii) to make, have made, use, sell, offer for sale, import, and otherwise dispose of Smart Sensing Network Equipment. + +(b) License of Non-Patent, Non-Trademark Licensed IP. Effective as of the Initial Closing Date the Seller hereby grants (and will cause each other Seller Party to grant, following each applicable Closing Date), to the Purchaser Licensees an irrevocable (except as expressly set forth herein), non-sublicenseable (except as expressly set forth herein), perpetual, fully paid-up, royalty-free, worldwide, non-transferable (except as expressly set forth herein), non-exclusive license, under the Licensed IP (other than Trademarks and Patents): + +(i) (A) to use such Licensed IP in the operation of the Business and to practice any methods, processes, and procedures in connection therewith and (B) to make, have made, use, sell, offer for sale, import, and otherwise dispose of products, services, and systems that were designed, developed, manufactured, 21 + + + + + +distributed, offered for sale, sold, resold, supported, otherwise under development, or provided, as of the applicable Closing Date, by the Seller Entities in connection with the Business and to practice any methods, processes, and procedures in connection therewith, and in each case of clauses (A) and (B), including with respect to all Derivative Works and natural evolutions thereof; and + +(ii) to make, have made, use, sell, offer for sale, import, and otherwise dispose of Smart Sensing Network Equipment. + +Clauses (i) and (ii) above are collectively referred to as the "Purchaser Licensed Activities." The license rights granted under this Section 2.2(b) include: + +(1) with respect to Licensed IP that constitutes Copyrights or copyrightable materials (other than Software), the rights to reproduce, prepare Derivative Works of, perform, display, and distribute such Copyrights and copyrightable materials in connection with the Purchaser Licensed Activities; and + +(2) with respect to Licensed IP that constitutes Software, the rights to (I) use, reproduce, prepare Derivative Works of, perform, and display such Software in connection with the Purchaser Licensed Activities; and (II) distribute such Software and Derivative Works of such Software in connection with the Purchaser Licensed Activities (but in Source Code form, solely as permitted pursuant to Section 2.2(f) and in accordance with Article V). + +For the avoidance of doubt, this Section 2.2(b) shall not constitute a license to Trademarks. + +(c) License of Trademark IP. + +(i) License Grant. Effective as of the Initial Closing Date, the Seller hereby grants (and will cause each other Seller Party to grant, following each applicable Closing Date, to the Purchaser Licensees) a perpetual (unless terminated in accordance with Section 4.2(ii)(c)), fully paid-up, royalty-free, worldwide, non-transferable (except as set forth herein), non-exclusive license to use any and all Licensed Trademarks in the Business (including with respect to the Purchaser Licensed Activities), including with respect to all Derivative Works and natural evolutions of such Business, in a manner that is the same or substantially similar to the manner in which the Seller Entities have used the Licensed Trademarks in the Business. + +(ii) Quality Control. Purchaser will cause each Purchaser Licensee, following the Initial Closing Date, to include appropriate Trademark notices as required by applicable Law in connection with each of their respective uses of the Licensed Trademarks. The Purchaser acknowledges and agrees that all use of the Licensed Trademarks by the Purchaser Licensees following the Initial Closing Date and all goodwill associated therewith shall inure to the benefit of the Seller. 22 + + + + + +Purchaser will cause the Purchaser Licensees to use the Licensed Trademarks following the Initial Closing Date with appropriate legends as required under applicable Law. Purchaser agrees that the quality of all Seller Excluded Products and any other products and services marketed or sold by the Purchaser Licensees under the Licensed Trademarks will conform to at least the level of quality of the Enterprise Products as currently provided by the Seller Entities as of the Initial Closing Date. Purchaser will (and will cause each Purchaser Licensee to) reasonably cooperate with Seller in facilitating Seller's control of such quality, permit reasonable inspection of the Purchaser Licensees' operations (upon reasonable notice and during normal business hours) solely with respect to their respective use of the Licensed Trademarks (if any), and supply Seller with specimens of any of their respective uses of the Licensed Trademarks (if any), including such specimens that are advertising or marketing materials, upon Seller's reasonable request, at Seller's expense. + +(d) Transitional Trademark License. + +(i) License Grant. Effective as of the Initial Closing Date, the Seller hereby grants (and will cause each other Seller Party to grant following each applicable Closing Date) to the Purchaser Licensees: + +(A) for a period of one hundred eighty (180) days after the applicable Closing Date (the "Mobility Transition Period"), a fully paid-up, royalty-free, worldwide, non-transferable, non-exclusive sublicense to use any and all Mobility Trademarks, in accordance with the terms and conditions of the Mobility Trademark License; and + +(B) for a period of seven hundred thirty (730) days after the applicable Closing Date (the "Non-Mobility Transition Period"), a fully paid-up, royalty-free, irrevocable (except as expressly set forth herein), worldwide, non-transferable, non- exclusive license to use any and all Retained Seller Trademarks (other than the Mobility Trademarks and Licensed Trademarks) that are or have been, on or prior to the Initial Closing Date, used in connection with the Business or any product, service, or system in the Business (the "Non-Mobility Trademarks"), + +in each case of clauses (A) and (B), solely in connection with the operation of the Business or with the exercise of the licenses granted pursuant to Section 2.2(a) and Section 2.2(b), in a manner that is the same or substantially similar to the manner in which the Seller Entities used the Mobility Trademarks or Non-Mobility Trademarks, as applicable, in connection with the Business as of the Initial Closing Date, including with respect to existing signs and stocks of advertisements and promotional materials and items, inventory and packaging included in the Acquired Assets ("Existing Stock") containing any Mobility Trademark or Non- Mobility Trademark. Seller Excluded Products manufactured during the Mobility Transition Period or Non-Mobility Transition Period that bear the Mobility Trademarks or the Non-Mobility Trademarks will be treated as 23 + + + + + +Existing Stock under this Section 2.2(d), except to the extent a Purchaser Licensee is separately sublicensed with respect to any such Mobility Trademark or Non-Mobility Trademark. + +(ii) Purchaser Transition Efforts. Notwithstanding Section 2.2(d)(i), each Purchaser Licensee shall use Reasonable Efforts to discontinue the use of, exhaust, or otherwise dispose of, the Existing Stock after the Initial Closing Date and to modify all manufacturing equipment to cease to manufacture Seller Excluded Products marked with the Mobility Trademarks as soon as reasonably practicable after the Initial Closing Date. + +(e) Purchaser Excluded Products. The licenses granted pursuant to Section 2.2(a), Section 2.2(b), and Section 2.2(c) do not extend to any product, system, or service if and solely to the extent such product, system, or service constitutes or includes a Purchaser Excluded Product, except for a Purchaser Excluded Product that is Smart Sensing Network Equipment that is, as manufactured by or for a Purchaser Licensee, not specifically enabled for use in conjunction with or for interoperability with a (i) Public Safety Next-Gen LTE Network or (ii) Two-Way Radio Network. By way of example, if a Purchaser Excluded Product is a single component of a product, system, or service that is otherwise licensed under Section 2.2(a), Section 2.2(b), or Section 2.2(c), such licenses do not extend to such component, but such licenses do extend to the remainder of such licensed product, system, or service. + +(f) Sublicenses. Each Purchaser Licensee may grant sublicenses of the licenses granted to it pursuant to Section 2.2: (i) to any (for the avoidance of doubt, and without limiting any other provision of this IP Agreement, current or future) direct or indirect Subsidiary of Purchaser (but only for so long as such Person remains such a Subsidiary); (ii) to any other Person in connection with the sale or disposition of substantially all of the assets of a business or product line of any Purchaser Licensee; (iii) other than with respect to Section 2.2(a), for the purpose of any Person's (including resellers, distributors, and OEMs) distribution of products licensed under Section 2.2; (iv) other than with respect to Section 2.2(a), to any Person (including OEMs, JDMs, suppliers, contractors, and subcontractors) solely for the purpose of, and to the extent necessary for, such Person to perform any service (including any service with respect to the design, manufacture, import, export, or supply of any product, service, or system in the Business or any components thereof) for a Purchaser Licensee, and not for the direct benefit of such Person or any other Person, (v) other than with respect to Section 2.2(a), to a customer of a Purchaser Licensee for such customer's use of a product licensed under Section 2.2; or (vi) other than with respect to Section 2.2(a), with respect to Software, to any Person for the purpose of such Person's development of Software that is compatible or interoperates with a product licensed under Section 2.2. The Purchaser Licensees have no other right to grant sublicenses under any of the licenses granted to the Purchaser Licensees under this Section 2.2. + +(g) Acknowledgement. The Purchaser acknowledges and agrees that the licenses granted under this Section 2.2 do not extend to Purchaser or any product, system or service manufactured, sold, designed, distributed, or supported by Purchaser directly or indirectly through any Purchaser Licensee, other than any Business Activities for Seller Excluded Products or Smart Sensing Network Equipment. 24 + + + + + +Section 2.3 Delivery. + +(a) Documentation. To the extent in the possession or under the control of any Seller Party, the Seller shall provide (and shall cause the other Seller Parties to provide) to the Purchaser: (i) promptly after the Initial Closing Date, complete and accurate copies of all the following that constitute Transferred IP: file histories and notes (where such notes are regarding, with respect to Transferred IP, actual or potential disclosure dates or prior art dates, standards-essential Patents, or license or covenants not to sue granted to any Person with respect to such Transferred IP) from the Seller Parties' docketing systems of the pending Patent applications and issued Patents (and invention disclosures, if any, for all such applications and Patents that any Seller Party is able to provide using Reasonable Efforts), pending Trademark applications and Trademark registrations, Copyright applications and Copyright registrations, and unpublished Patent applications; (ii) within thirty (30) days after the Effective Date, for Transferred IP throughout the world, a list of the names, addresses, email addresses, and phone numbers of prosecution counsel and agents; (iii) within thirty (30) days after the Effective Date, a list of all actions that must be taken for Transferred IP throughout the world (a "Transferred IP Docket") within one hundred eighty (180) days after the Effective Date (including the payment of any registration, maintenance, or renewal fees or the filing of any documents, corrections, or replies to any Governmental Entity, applications or certificates, for the purposes of prosecuting, maintaining, or renewing any such registered, issued, or applied-for Transferred IP); and (iv) at least on a monthly basis during the period of time from the Effective Date until the Initial Closing Date, reasonable access to the docketing information (with respect to such Transferred IP) generated by any Seller Party in the Ordinary Course consistent with how such Seller Party generates such information for itself. As of the Initial Closing Date, the Purchaser assumes all responsibility for the prosecution, maintenance and enforcement of the Transferred IP assigned under this IP Agreement as of the Initial Closing Date to a Purchaser Assignee, and the payment of all fees, and all other prosecution and maintenance activities associated with such Transferred IP. After the Effective Date, Seller shall (and shall cause the other Seller Parties to) cooperate and assist Purchaser in good faith with respect to: (A) providing information to Purchaser that is reasonably sufficient to allow Purchaser to understand prosecution, maintenance, renewal, and new filing activities with respect to the Transferred IP that occur or will occur between the Effective Date and the Initial Closing Date; and (B) providing written instructions to all prosecution counsel and agents throughout the world who are responsible for the Transferred IP to instruct such counsel and agents that Purchaser and the Purchaser Assignees will be responsible for the Transferred IP as of the Initial Closing Date and that all reasonably necessary steps should be taken to prevent the loss of any rights embodied by the Transferred IP unless such counsel and agents have received express written instructions to the contrary from Purchaser. + +(b) Obligation to Deliver Technology. Following the Initial Closing Date, to the extent in the possession or under the control of any Seller Party and to the extent not 25 + + + + + +contained in storage media that constitutes an Acquired Asset and is delivered to the Purchaser, the Seller shall (and shall cause the other Seller Parties to), upon the Purchaser's reasonable request, use Reasonable Efforts to provide the Purchaser with all materials, Software, information, tangible embodiments, and other tangible things, as those terms have been interpreted pursuant to any applicable Laws governing the production of documents and things, constituting, comprising, related to, or necessary to practice the Transferred IP or Licensed IP. To the extent that such materials, Software, information, tangible embodiments, and other tangible things constitute, comprise or relate to any Intellectual Property licensed to Seller under Section 2.1(c) or Section 2.1(d) or the Licensed IP, the Seller shall be permitted to retain a reasonable number of copies of such documents, materials, Software, information, tangible embodiments, and other tangible things. Purchaser shall use Reasonable Efforts to inform Seller of the locations of any such materials, Software, information, tangible embodiments, and other tangible things requested by Purchaser, where Purchaser has actual knowledge of such locations. + +Section 2.4 General Intellectual Property Provisions. + +(a) Termination of Third Party Contracts. The license rights granted to the Purchaser Licensees under any Licensed IP that constitutes Third-Party Intellectual Property, if any, are subject to the terms and conditions of the Contracts applicable to such Licensed IP, and will terminate upon (i) termination of such Contracts, or (ii) termination of the Seller Parties' right to sublicense the Purchaser Licensees under such Contracts, in each case by the applicable third party licensor or sublicensor, as applicable (and not by a Seller Party). + +(b) Compliance with Third Party Contracts. Following the Initial Closing Date, the Purchaser shall cause the Purchaser Licensees and its and their employees, contractors and agents to, comply with the terms and conditions of any such Contracts that are listed on Schedule 2.4(b) to the extent such terms and conditions are applicable to the Third-Party Intellectual Property sublicense rights granted to the Purchaser Licensees pursuant to this IP Agreement; provided, however, that the foregoing shall not require any Purchaser Licensee (or any current or future Affiliate thereof) or any of their respective employees, contractors, or agents (i) to pay or otherwise be responsible for any direct or indirect amounts, fees, charges, costs, or other consideration to any Person or (ii) to grant any license (or covenant not to sue) with respect to any Intellectual Property, in each case of clauses (i) and (ii) with respect to any such Contract. + +(c) No Implied Rights. The Purchaser acknowledges and agrees that, except as expressly set forth in Section 2.1 and Section 2.2 of this IP Agreement, (i) the Purchaser Licensees are not obtaining any rights in or to any Seller IP or Retained Seller Trademarks under this IP Agreement, and (ii) nothing in this IP Agreement confers on the Purchaser Licensees any right to use any name of any Seller Party in any advertising, publicity or other promotional activities; provided, however, that notwithstanding anything to the contrary contained in this IP Agreement, the Purchaser Licensees and any of their current or future Affiliates may make factual, non-trademark use of Seller's and the other Seller Parties' full corporate names in order to fairly and accurately describe the history of the Business. Nothing herein prohibits such Purchaser Licensees and such 26 + + + + + +Affiliates from maintaining books and records containing documents of files marked with any Retained Seller Trademarks in the Ordinary Course for archival and regulatory compliance purposes. + +(d) Third-Party Trademarks. Except as otherwise expressly provided herein, nothing in this IP Agreement confers on the Purchaser Licensees any right to use any Trademarks owned by any Person other than the Seller Parties. Except with respect to the Trademarks set forth on Schedule 2.4(d), following the Initial Closing Date, the Purchaser Licensees may not add any such Trademarks to any inventoried Enterprise Products of the Business existing as of the Initial Closing Date that are part of the Acquired Assets and that contain a Trademark licensed to the Seller Parties pursuant to the Mobility Trademark License without the Seller's prior written consent. + +Section 2.5 Standards Organizations. The Seller or at least one other Seller Party is a member of the SDOs listed on Schedule 3.8(a) of the Seller IPA Disclosure Schedule. The Seller shall provide (and shall cause the other Seller Parties to provide) to Purchaser within ninety (90) days of the Initial Closing Date, complete and accurate copies of, any IP policies, other licensing commitments, and generally applicable member requirements that are associated with any SDO listed on Schedule 3.8(a) of the Seller IPA Disclosure Schedule and complete copies of all IP declarations, pledges, commitments, and other statements that any Seller Party has made in association with the Transferred IP, in all cases, with respect to each such copy, to the extent that Purchaser cannot obtain such copy using Reasonable Efforts and Seller is not prohibited from providing such copy to Purchaser). During the period of time between the Effective Date and the Initial Closing Date, Seller shall promptly notify Purchaser if any Seller Party becomes a member of any SDO not listed on Schedule 3.8(a) of the Seller IPA Disclosure Schedule, becomes subject to any other IP policy, licensing commitment, or generally applicable member requirement of any SDO, or submits any IP declaration, pledge, commitment, or other statement to any SDO. The Purchaser acknowledges and agrees that Patents that are Transferred IP may be subject to the requirements of such SDOs. Subject to the Purchaser's receipt prior to the Initial Closing Date of such applicable IP policies, other licensing commitments, and generally applicable member requirements, the Purchaser agrees, with respect to Patents that are Transferred IP, to comply (and will cause the Purchaser Assignees to comply) with the licensing commitments imposed on members of such SDOs and to comply with any other requirements of such SDOs that are generally applicable to members thereof, to the extent Seller is required to pass such commitments or requirements on to Purchaser under its agreements with the applicable SDO. + +ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE SELLER + +Except as specifically set forth in, or qualified by any matter set forth in, the disclosure schedules, dated as of the date of this IP Agreement and delivered by the Seller to the Purchaser (collectively, the "Seller IPA Disclosure Schedule") (it being agreed that the disclosure of any matter in any section or subsection in the Seller Disclosure Schedule, the Seller IPA Disclosure Schedule or the Seller EMA Disclosure Schedule shall be deemed to have been disclosed in any other section or subsection in the Seller Disclosure Schedule to which the applicability of such 27 + + + + + +disclosure is reasonably apparent on the face of such disclosure), the Seller represents and warrants to the Purchaser as follows: + +Section 3.1 Ownership. With respect to each item of Assigned IP and Acquired Company IP, respectively, such item is owned by a Seller Party or an Acquired Company, respectively, and such Seller Party or Acquired Company, respectively, has marketable title to such item. Schedules 1.1(b) and 1.1(c) of the Seller IPA Disclosure Schedule collectively set forth a complete and accurate list of all registered, issued, or applied-for Intellectual Property that constitutes Acquired Company IP and Schedules 1.1(h), 1.1(l), and 1.1(n) of the Seller IPA Disclosure Schedule collectively set forth a complete and accurate list of all registered, issued, or applied-for Intellectual Property that constitutes Assigned IP (such Acquired Company IP and Assigned IP, collectively, the "Registered Intellectual Property"). For each listed item, each of Schedule 1.1(b), 1.1(c), 1.1(h), 1.1(l), and 1.1(n) of the Seller IPA Disclosure Schedule, as applicable, indicates, as applicable, each owner of each such item of Registered Intellectual Property, the jurisdictions in which each such item of Registered Intellectual Property has been issued or registered or in which any application for such issuance or registration has been filed, the registration or application number, and the application filing or registration dates thereof. Each such item of Registered Intellectual Property is subsisting and, to the Knowledge of the Seller, valid and enforceable (except with respect to applications for Intellectual Property). A Seller Party has sufficient right, title, and interest in and to the Licensed IP to grant the licenses granted under this IP Agreement with respect thereto. + +Section 3.2 Encumbrances. Except as set forth on Schedule 3.2(a) of the Seller IPA Disclosure Schedule, the Transferred IP is free and clear of any Encumbrances (other than Permitted Encumbrances and obligations under applicable SDO agreements with SDOs listed on Schedule 3.8 of the Seller IPA Disclosure Schedule) and, as of the Initial Closing Date, will be fully transferable, alienable, and licensable by the Purchaser Assignees and Acquired Companies without restriction and without payment to any Person and, except as set forth on Schedule 3.2(b) of the Seller IPA Disclosure Schedule, no Person has an option to take an assignment or license of any Transferred IP. + +Section 3.3 Claims. Except as set forth on Schedule 3.3(a) of the Seller IPA Disclosure Schedule, (i) no Legal Proceeding is pending against any Seller Entity, (ii) no Legal Proceeding has been brought against any Seller Entity during the last three (3) years that was not resolved (other than pursuant to a settlement or license Contract), and (iii) no Claim has been threatened in writing against any Seller Entity during the last three (3) years (and, with respect to clause (B), was directed to the Seller Entities' Legal and Governmental Affairs group (including any member or representative thereof and any attorney of any of the Seller Entities) or of which any of them were aware), in each case of clauses (i) through (iii), (A) with respect to any infringement, misappropriation, or other violation, of any Intellectual Property of any Person (or any unfair competition or trade practices) by any Seller Entity in connection with an Enterprise Product (including by any making, having made, using, selling, offering for sale, importing, and otherwise disposing of an Enterprise Product or any services in connection therewith), including any unsolicited offers to license specifically directed (in whole or in part) to an Enterprise Product and directed to the Seller Entities' Legal and Governmental Affairs group (including any member or representative thereof and any attorney of any of the Seller Entities) or of which any of them were aware, unsolicited demands to license, or cease and desist letters, or 28 + + + + + +(B) challenging the enforceability, use, ownership, scope, or validity, of any Transferred IP (other than office actions issued in the ordinary course of prosecuting any pending patent or trademark application). Except as set forth on Schedule 3.3(b) of the Seller IPA Disclosure Schedule, with respect to the infringement, misappropriation, or other violation of any Transferred IP, (1) no Legal Proceeding has been brought during the last six (6) years or is pending, and (2) no Claim has been threatened in writing during the last three (3) years, against any Person by any Seller Entity. None of the Enterprise Products or Transferred IP are subject to any outstanding Order restricting or otherwise limiting the use, validity, enforceability, disposition, or exploitation thereof or any right, title, or interest of any Seller Entity with respect thereto. + +Section 3.4 Material IP Contracts. Schedule 3.4 of the Seller IPA Disclosure Schedule sets forth a complete and accurate list of all of the following (the "Material IP Contracts"): (i) Contracts to which any Acquired Company is a party under which (A) a Person grants to an Acquired Company a license to (or covenant not to sue with respect to) Intellectual Property in connection with the Business (the "In-bound Licenses") (provided that Seller shall not be required to list Off-the-Shelf Software Licenses and Contracts for Open Source Software), or (B) an Acquired Company grants to any Person a license to (or covenant not to sue with respect to) Intellectual Property (the "Out-bound Licenses") (provided that Seller shall not be required to so list non-exclusive licenses granted in the Ordinary Course to a (I) supplier solely for the purposes of, and to the extent necessary for, such supplier to design, manufacture and supply Enterprise Products for any Seller Entity with respect to the Business, and not for the direct benefit of such supplier or any other Person, or (II) customer solely for such customer's use of an Enterprise Product), (ii) other than In-Bound Licenses and Out-Bound Licenses set forth in Schedule 3.4(a) or Schedule 3.4(b) of the Seller IPA Disclosure Schedule, material Contracts entered into by any Seller Entity that materially adversely affect any Seller Entities' ability to own, use, transfer, license, or enforce any Transferred IP (including any sole or exclusive license grants) or that require payment of royalties with respect to any Transferred IP, and (iii) all Contracts (other than Assumed Contracts set forth on Schedule 1.1(c) of the Acquisition Agreement) entered into by any Seller Entity pursuant to which, as of the Initial Closing Date, any Acquired Company is a licensee or sublicensee of any cross-license to any Patent that claims or is alleged to claim any Wireless Standard or that is a general cross-license to any Patent, excluding any such Contracts that will expire or terminate within six (6) months after the Effective Date. + +Section 3.5 Non-Infringement. Except as set forth on Schedule 3.5(a) of the Seller IPA Disclosure Schedule, the operation of the Business as currently conducted does not infringe, misappropriate, or otherwise violate (or constitute any unfair competition or trade practices), and has not, during the past six (6) years with respect to Patents and during the past three (3) years with respect to all other Intellectual Property, infringed, misappropriated, or otherwise violated (or constituted unfair competition or trade practices), of any Intellectual Property of any Person in any material respect; provided that the foregoing representation is limited to the Knowledge of the Seller with respect to any third party Patents to the extent they claim or are alleged to claim Wireless Standards. Except as set forth on Schedule 3.5(b) of the Seller IPA Disclosure Schedule, to the Knowledge of the Seller, no Person is infringing, misappropriating, or otherwise violating, or, within the last three (3) years, has infringed, misappropriated, or otherwise violated, any Transferred IP in any manner material to the Business. 29 + + + + + +Section 3.6 Employees. All Persons (including current and former employees, contractors, and consultants of any of the Seller Entities) who have conceived, created, invented, modified, improved, or developed any Intellectual Property material to, and used in or necessary for, the operation of the Business, for (or under the direction or supervision of) any Seller Entity (during the course of such employment, engagement, or Contract term therewith, as applicable) have executed and delivered to a Seller Entity, a Contract (i) providing for the non-disclosure by such Person of any trade secrets or other material confidential information of any of the Seller Entities with respect to such Intellectual Property, and (ii) providing for the assignment by way of a present grant of assignment (or, in the case of an independent contractor or consultant of (a) a Seller Entity (other than an Acquired Company), a sublicenseable license, or (b) an Acquired Company, a license) by such Person to a Seller Entity of any such Intellectual Property arising out of such Person's employment by, engagement by, or Contract with such Seller Entity, except where the failure to have such a Contract would not reasonably be expected to have a material adverse effect on the Business; provided, however, that the foregoing representation shall be to the Knowledge of the Seller solely with respect to any such contractor or consultant engaged by, or contracted with, a Seller Entity other than with the involvement or awareness of the Seller Entities' Legal and Governmental Affairs group (including any member or representative of and any attorney of any of the Seller Entities). No such Person has made any assertions with respect to any alleged ownership or title to any such Intellectual Property. To the Knowledge of the Seller, no such Person is in violation of any term or condition of any such Contract. + +Section 3.7 Software. None of the Seller Entities (i) has delivered, licensed, released, or disclosed to any Person any of the Source Code for any Enterprise Product (other than, in the Ordinary Course to: (1) an employee of a Seller Entity, (2) a contractor or supplier of a Seller Entity solely for the purposes of, and to the extent necessary for, such contractor or supplier to develop, manufacture, and supply Enterprise Products for any Seller Entity, and not for the direct benefit of such contractor or supplier or any other Person, or (3) with respect to Source Code that is not material to the Business, a customer of a Seller Entity with respect to Enterprise Products or to any Person for the purpose of such Person's development of Software that is compatible or interoperates with an Enterprise Product, in each case of clauses (1) through (3), under written Contracts (which include confidentiality, use, and disclosure restrictions) normally used by the applicable Seller Entity to protect its own similar confidential or proprietary information (and in no event less stringent than the terms and conditions of Article V)), except as would not reasonably be expected to have a material effect on the Business, or (ii) is a party to any Contract requiring the deposit of any such Source Code with an escrow agent or escrow service (or other escrow Contract) or requiring the sharing or disclosure of any such Source Code with any Person. With respect to any Open Source Software that is or has been used by a Seller Entity in any way in connection with any Enterprise Product (including any Open Source Software that is Incorporated Into any Enterprise Product by or on behalf of a Seller Entity), the Seller Entities are and have been in compliance in all material respects with all applicable licenses with respect thereto. No Software that is governed by (or has otherwise been licensed or made available to a Seller Entity under) a Reciprocal License has been (a) Incorporated Into any Enterprise Product by or on behalf of a Seller Entity, or (b) distributed or made available to any Person in connection with the Business by any Seller Entity, in each case of clauses (a) and (b), in a manner that would or does require or condition any right to perform the activity described in clause (a) or (b) on any of clauses (i) through (v) of the definition of Reciprocal License (with 30 + + + + + +respect to such Software). The Seller Entities are in possession of any material Source Code owned by any of the Seller Entities (including any such Source Code to any Enterprise Product) that is related to the Business. + +Section 3.8 SDOs. Except as set forth on Schedule 3.8(a) of the Seller IPA Disclosure Schedule, no Seller Entity is an SDO Member. To the extent any Seller Entity is an SDO Member, such Person complies and has complied with all applicable rules and terms and conditions of membership (including all related disclosure obligations), and each Seller Entity is and has been, in material compliance with all Laws related to being an SDO Member, in each case, in connection with the Business. Schedule 3.8(b) of the Seller IPA Disclosure Schedule sets forth a complete and accurate list, to the Knowledge of the Seller, of all Transferred IP that constitutes a Patent that is specifically identified in a disclosure to any SDO where such Patent is subject to any rule, term or condition, license, disclosure obligation, commitment, or agreement related to such SDO (together with a description or reference to such rule, term or condition, license, disclosure obligation, commitment, or agreement). + +Section 3.9 Intellectual Property Assets. Assuming (i) the receipt of all consents required to assign or transfer any Assumed Contract (or, with respect to those which are not received, the cooperation by Seller pursuant to Section 10.6 of the Acquisition Agreement), (ii) the replication or split and partial assignment of all Non-Assignable Shared Contracts material, individually or in the aggregate, to the Business as contemplated by Section 10.7 of the Acquisition Agreement, and (iii) the acquisition of all regulatory approvals of Governmental Entities required in connection with the authorization, execution and delivery of the Acquisition Agreement and the consummation of the Contemplated Transactions and excluding all (A) with respect to the receipt of administrative or corporate services or benefits (as set forth in Section 1.2(b) of the Acquisition Agreement), Software and other Third-Party Intellectual Property used in connection with such services or benefits provided to the Acquired Companies pursuant to the Transition Services Agreement, (B) rights granted to the Seller Group under the Contracts set forth on Schedule 3.9 of the Seller IPA Disclosure Schedule, (C) Licensed Mobility Patents (as defined in the Mobility Intellectual Property License) and Mobility Technology (as defined in the Mobility Intellectual Property License), in each case to the extent licensed to each member of the Motorola Group (as defined in the Mobility Intellectual Property License) as of the Initial Closing Date pursuant to the Mobility Intellectual Property License, and (D) Intellectual Property (other than Licensed IP) owned by, or licensed from any Person (other than the Seller Entities) to, a supplier of the Seller Entities that is used by such supplier for the purposes of, and to the extent necessary for, such supplier to manufacture and supply Enterprise Products for the Seller Entities with respect to the Business, and (E) Patents to which the Seller Entities are not licensed as of the Effective Date and that claim Wireless Standards,: the Transferred IP and the Licensed IP, taking into account all provisions of this IP Agreement and the other Transaction Agreements, will be sufficient to enable the Purchaser Assignees and Purchaser Licensees to design, develop, manufacture, import, market, distribute, offer for sale, sell, resell, import, export, use, and support the Enterprise Products and perform services in connection therewith immediately following the Initial Closing in all material respects as designed, manufactured, imported, marketed, distributed, offered for sale, sold, imported, exported, used, supported, and provided, as applicable, by the Seller Entities as of the Effective Date; provided that the foregoing shall not be construed as a representation or warranty against third party Intellectual Property infringement claims. The Purchaser Licensees shall have, 31 + + + + + +following the Initial Closing Date, sufficient rights with respect to the Trademarks licensed to the Purchaser Licensees pursuant to Section 2.2(d), to resell after the Initial Closing Date, finished Enterprise Products that are part of the Acquired Assets or Acquired Company Assets and that bear, as of the Initial Closing Date, any of such Trademarks. + +Section 3.10 Disclaimer. EXCEPT AS SPECIFICALLY SET FORTH IN THIS IP AGREEMENT OR ANOTHER TRANSACTION AGREEMENT, NEITHER PARTY (NOR ANY MEMBER OF ITS GROUP OR ANY OF ITS AFFILIATES) MAKES ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO ANY MATTER WHATSOEVER RELATING TO ANY INTELLECTUAL PROPERTY ASSIGNED OR LICENSED BY ANY OF THEM TO THE OTHER PARTY (OR ANY MEMBER OF THE OTHER PARTY'S GROUP OR ANY OF ITS AFFILIATES), IN EACH CASE INCLUDING ITS CONDITION, ITS MERCHANTABILITY, ITS FITNESS FOR ANY PARTICULAR PURPOSE, OR TITLE OR NON- INFRINGEMENT. + +Section 3.11 No Other Warranties or Covenants. Without limiting Section 3.11, except as expressly set forth in this IP Agreement or another Transaction Agreement, nothing contained in this IP Agreement shall be construed as: (i) a warranty or representation by any Seller Party or Purchaser Assignee or Acquired Company as to the validity or scope of the Transferred IP or the Licensed IP; (ii) conferring any license or any other right, by implication, estoppel or otherwise, under any Seller IP or Transferred IP, except as expressly granted herein; (iii) imposing on any Seller Party or Purchaser Assignee or Acquired Company any obligation to institute any suit or action for infringement of any Transferred IP or Licensed IP, or to defend any suit or action brought by any Person which challenges or concerns the validity of any Transferred IP or Licensed IP; (iv) a warranty or representation by any Seller Party or Purchaser Assignee or Acquired Company that any manufacture, use, sale, lease or other disposition of products by the Purchaser Licensees or Seller Parties or the use of any Transferred IP or Licensed IP will be free from infringement of any Intellectual Property; or (v) imposing on either party any obligation to file any patent application or to secure any patent or maintain any patent in force. + +ARTICLE IV TERM AND TERMINATION + +Section 4.1 Term. The term of this IP Agreement shall be from the Effective Date until all of the Intellectual Property licensed hereunder is in the public domain (provided, however, that in such event the representations and warranties in Article III shall survive (and terminate) in accordance with the Acquisition Agreement) or this IP Agreement is terminated pursuant to Section 4.3. This IP Agreement shall not expire or terminate for any other reason (even in the event of a material breach). + +Section 4.2 Irrevocability of Licenses. Each of the parties acknowledges and agrees that the licenses granted hereunder (i) are irrevocable and (ii) may not be terminated for any reason (even in the event of a material breach), except that (a) with respect to Licensed IP that constitutes Third-Party Intellectual Property, solely as provided in Section 2.4(a), (b) with respect to a particular Patent licensed under this IP Agreement, the license granted to such Patent shall automatically terminate upon the expiration of the statutory term (including all extensions 32 + + + + + +and renewals) of such Patent, and (c) Seller may terminate the license granted to the Purchaser Licensees pursuant to Section 2.2(c) (and no other provision of this IP Agreement), following the Initial Closing Date and upon prior written notice to Purchaser, in the event Purchaser materially breaches Section 2.2(c) and fails to cure such material breach within one hundred twenty (120) days after Purchaser's receipt of written notice from Seller (which such notice shall contain a reasonable description of such material breach and a statement of Seller's intent to terminate the license granted to the Purchaser Licensees pursuant to Section 2.2(c) if such material breach is not cured within such one hundred twenty (120) day period). Nothing herein shall preclude any party from seeking damages or other remedies at law or in equity (other than termination of this IP Agreement or any license to any Intellectual Property granted under this IP Agreement) for any breach hereof. + +Section 4.3 Termination of Agreement. This IP Agreement will terminate automatically and without need for further action by either party in the event that the Acquisition Agreement is terminated in accordance with its terms. + +Section 4.4 Effect of Termination. Upon termination of this IP Agreement pursuant to Section 4.3, this IP Agreement and the rights and obligations of the parties under this IP Agreement, including any obligation to make any assignment or grant any license hereunder, automatically end without any liability against any party or its Affiliates, except as otherwise provided in the Acquisition Agreement and except that the provisions of this Section 4.4, Article V, Section 6.1, Section 6.2, Section 6.6, Section 6.7, Section 6.8, Section 6.9, Section 6.10, Section 6.11, Section 6.12, and Section 6.13 will remain in force and survive any termination of this IP Agreement. + +Section 4.5 Bankruptcy. The parties acknowledge and agree that the licenses granted hereunder are licenses of "intellectual property" within the meaning of Section 365(n) of the Bankruptcy Code ("Section 365(n)"), which have been licensed hereunder in a contemporaneous exchange for value. The parties further acknowledge and agree that if the Seller (or any of its Affiliates) or the Purchaser (or any of its Affiliates), as applicable (the "Insolvent Party"): (i) becomes insolvent or generally fails to pay, or admits in writing its inability to pay, its debts as they become due; (ii) applies for or consents to the appointment of a trustee, receiver or other custodian for it, or makes a general assignment for the benefit of its creditors; (iii) commences, or has commenced against it, any bankruptcy, reorganization, debt arrangement, or other case or proceeding under any bankruptcy or insolvency law, or any dissolution or liquidation proceedings; or (iv) elects to reject, or a trustee on behalf of it elects to reject, this IP Agreement or any agreement supplementary hereto, pursuant to Section 365 of the Bankruptcy Code ("Section 365"), or if this IP Agreement or any agreement supplementary hereto is deemed to be rejected pursuant to Section 365 for any reason, this IP Agreement, and any agreement supplementary hereto, shall be governed by Section 365(n) and the other party may elect to fully exercise its rights under this IP Agreement in accordance with Section 365(n). Upon written request from such other party to the Insolvent Party, its applicable Affiliates, or the bankruptcy trustee, of such other party's election to proceed under Section 365(n), such Insolvent Party, its applicable Affiliates, such bankruptcy trustee, or any third party agent shall comply in all respects with Section 365(n), including providing such other party (and its Affiliates) with the Intellectual Property licensed to such other party (and its Affiliates) and not interfering with the rights of such other party (and such Affiliates) as provided in this IP Agreement to obtain access to such Intellectual Property from such Insolvent Party, its applicable Affiliates, the bankruptcy trustee, or any third party agent. 33 + + + + + +ARTICLE V CONFIDENTIALITY + +Each party shall (and shall cause the other members of its Group and its Affiliates to) hold the Source Code, trade secrets and other confidential information licensed to any of them under this IP Agreement in confidence, and shall protect the confidentiality thereof using at least the same degree of care that it uses to protect its own similar confidentiality or proprietary information, but in no event using less than a reasonable degree of care. Each party shall not (and shall cause the other members of its Group and its Affiliates not to) (i) disclose any such Source Code, trade secrets, or confidential information to any Person other than to (a) those of its employees who have a "need to know," or (b) other third Persons (including customers, suppliers, prospective suppliers, or joint developers), or (ii) use or disclose such Source Code, trade secrets and other confidential information except as necessary to exercise its rights or perform its obligations under this IP Agreement in accordance with any applicable restrictions or obligations with respect thereto, in each case of clauses (i) and (ii), under written Contracts (which include confidentiality, use, and disclosure restrictions) normally used by such party to protect its own similar confidential or proprietary information (and in no event less stringent than the terms and conditions of this Article V). This Article V will not apply to Source Code, trade secrets, or other confidential information of a party or any other member of its Group or any of its Affiliates where the other party can demonstrate such Source Code, trade secrets, or other confidential information (A) is or becomes generally known to the public or enters the public domain, other than as a result of a breach of this IP Agreement by such other party or a member of its Group or its Affiliates, (B) was rightfully disclosed to such other party or a member of its Group or its Affiliates by a third Person provided that such other party or member complies with the restrictions imposed by the third Person, or (C) was developed independently by such other party or member or Affiliate without use of or reference to any information disclosed to any of them by such party. If a party or any of members of its Group or its Affiliates is legally required to disclose any of the other party's Source Code, trade secrets, or other confidential information in connection with any legal proceeding, such party shall promptly notify the other party of the foregoing so that the other party may seek to prevent such disclosure or obtain the entry of a protective order or other appropriate protective device or procedure. The disclosing party shall fully cooperate with and aid such other party in connection with the foregoing. If a protective order or other protective device satisfactory to such other party is not obtained, the disclosing party or its applicable member will disclose only that portion of such Source Code, trade secrets, or other confidential information that is legally required to be disclosed (and will notify the other party of which portions are disclosed). Each party shall take steps reasonable under the circumstances to protect the confidentiality of all Source Code, trade secrets, and other confidential information licensed under this IP Agreement by it or its Affiliates to the other party or a member of its Group or any of its Affiliates. 34 + + + + + +ARTICLE VI GENERAL PROVISIONS + +Section 6.1 Remedies. The sole and exclusive remedy for any breach of this IP Agreement, including the representations and warranties and covenants herein, shall be as set forth in Article 8 of the Acquisition Agreement. The representations and warranties and covenants contained herein shall terminate in accordance with Section 8.4 of the Acquisition Agreement + +Section 6.2 Assignment. Neither party may assign (whether by operation of law or otherwise) this IP Agreement, or any of its licenses, rights, privileges or obligations hereunder, without the prior written consent of the other party, and any such attempted assignment shall be void; provided, however, that, following the Initial Closing Date, without any such prior written consent but upon prior written notice to the other party, each party may assign this IP Agreement to: (i) an Affiliate; (ii) a lender for collateral security; (iii) a Person that succeeds to all or substantially all of its business or assets to which this IP Agreement relates in connection with a merger or sale of all or substantially all of its assets to which this IP Agreement relates; or (iv) corporate reorganization of the party in which the ultimate ownership of the party immediately prior to such reorganization is the same as the ultimate ownership of the party immediately after such reorganization. If a Seller Party assigns or transfers any Licensed IP, the Seller shall (or shall cause the applicable Seller Party to) expressly condition such assignment or transfer on the express acknowledgement and agreement of the assignee or transferee that all such Licensed IP is bound by the license grants set forth herein. If Purchaser or a Purchaser Assignee assigns or transfers any Intellectual Property licensed to the Seller Parties pursuant to Section 2.1(c) or Section 2.1(d), the Purchaser shall (or shall cause the applicable Purchaser Assignee to) expressly condition such assignment or transfer on the express acknowledgement and agreement of the assignee or transferee that all such Intellectual Property is bound by such license grants. Notwithstanding anything to the contrary contained in this IP Agreement, Article III may only be assigned by a party (and shall be assigned by a party) together with such party's assignment of the Acquisition Agreement in accordance with the terms and conditions thereof. Subject to the foregoing limitations, this IP Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns. + +Section 6.3 Effect of Merger or Change of Control. Upon a merger or change of control of a party (including, for purposes of this Section 6.3, with respect to Purchaser any Purchaser Licensee and with respect to Seller any Seller Party) (a "Change of Control Event") with or to a Person (other than a Person that is a then-current Affiliate of such party) (the "Buyer"), the license rights granted under Article II to such party shall not extend to the Buyer or any of its Affiliates existing immediately prior to the Change of Control Event or any of its or their past, current, or future products, systems or services. If as a result of the Change of Control Event such party remains a separate, independent legal entity (or is merged into another Person, where such Person was formed or created for the purpose of the Change of Control Event or where such Person is a then-current Affiliate of such party), then the license rights granted to such party under Article II shall continue in full force and effect. If as a result of the Change of Control Event such party is merged into the Buyer (other than if the Buyer is formed or created for the purpose of the Change of Control Event) or another Person (other than if such Person is formed or created for the purpose of the Change of Control Event or if such Person is a then- 35 + + + + + +current Affiliate of such party) or otherwise does not remain a separate, independent legal entity (except if such party is merged into another Person, where such Person was formed or created for the purpose of the Change of Control Event or where such Person is a then-current Affiliate of such party), then (i) the license rights granted to such party under Article II shall be limited to the operation of the business and the products, systems, and services (including Smart Sensing Network Equipment and Public Safety LTE Smartphone Devices, as applicable) of such party existing as of the effective date of the Change of Control Event and Derivative Works and natural evolutions thereof (but, in all cases, with respect to such license rights, subject to Section 2.1(e) or Section 2.2(e), as applicable), and (ii) no rights or licenses granted to such party under Article II may be extended to the Buyer or any of its Affiliates existing immediately prior to the Change of Control Event in connection with any of its or their past, current, or future products, systems or services. + +Section 6.4 Acquisitions. If either party acquires a business or a Person that conducts a business covering any of the same products, systems, or services as those covered by any license granted under Article II to such acquiring party (a "Future Acquisition") (whether in an asset or equity transaction), any such license shall be deemed to apply to such same products, systems, and services (but no other products, systems or services) of such acquired business or Person; provided, that all Patents acquired in connection with such Future Acquisition are licensed to the non-acquiring party and, in the case of Seller, the Seller Parties or, in the case of Purchaser, the Purchaser Licensees, pursuant to the terms and conditions of this IP Agreement. In such event, any such acquired Person shall be deemed a Seller Party or a Purchaser Licensee hereunder, as the case may be. + +Section 6.5 Further Assurances. Each of the parties agrees that from time to time, at the reasonable request and expense of the other party, it shall execute and deliver such other documents and take such other actions as the other party may reasonably request to effectuate the transactions contemplated by this IP Agreement (including any short form documentation evidencing the licenses granted by any Seller Party hereunder or other documentation to perfect or record the rights granted hereunder in the Transferred IP or Licensed IP in any jurisdiction throughout the world). The Seller acknowledges and agrees (including on behalf of the other Seller Parties) that the Purchaser or any of its Affiliates may record and perfect this IP Agreement or such documentation in any jurisdiction throughout the world, and the Seller shall (and shall cause the other Seller Parties to) cooperate therewith, at the Purchaser's expense. The Purchaser hereby requests, and the Seller hereby grants (and shall cause the other Seller Parties to grant) to the Purchaser and its Affiliates, all rights necessary to record this IP Agreement or such documentation with the United States Patent and Trademark Office, the United States Copyright Office, and any equivalent office or agency in any jurisdiction in the world. Seller shall (and shall cause the other Seller Parties) to, between the Effective Date and the Initial Closing Date, cooperate with the Purchaser in connection with the Purchaser's preparation for acquiring the Business, including (i) by reasonably sharing information to prevent any loss of any of the Seller Entities' rights to any Intellectual Property constituting Transferred IP or Licensed IP, and (ii) facilitating between the parties and their respective Affiliates' communication and sharing of information related to this IP Agreement. 36 + + + + + +Section 6.6 Governing Law; Forum. + +(a) The Laws of the State of Delaware (without reference to its principles of conflicts of law) shall govern the construction, interpretation and other matters arising out of or in connection with this IP Agreement and its schedules (whether arising in contract, tort, equity or otherwise). + +(b) Except with respect to (i) the result arising out of the escalation referenced in Section 2.1(b)(iii)(B) and (ii) the result of the escalation referenced in Section 2.1(b)(iii)(F) and any arbitration pursuant to Section 2.1(b)(iii)(F) (other than to enforce any arbitral judgment), the parties hereto irrevocably submit to the exclusive jurisdiction of the courts of the State of Delaware and the federal courts of the United States of America located in the State of Delaware over any Dispute arising out of or relating to this IP Agreements or any agreement or instrument contemplated thereby or entered into in connection herewith or therewith or any of the transactions contemplated hereby or thereby. Each party hereby irrevocably agrees that all claims in respect of such Dispute or proceeding will be heard and determined in such courts (and the courts hearing appeals from such courts). The parties hereby irrevocably waive, to the fullest extent permitted by applicable Law, any objection which they may now or hereafter have to the laying of venue of any such Dispute brought in such court or any defense of inconvenient forum in connection therewith. TO THE EXTENT PERMITTED BY APPLICABLE LAW THEN IN EFFECT, EACH PARTY HERETO WAIVES ITS RIGHT TO TRIAL OF ANY ISSUE BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM WHETHER BASED ON CONTRACT, TORT OR OTHERWISE ARISING OUT OF OR RELATING TO THIS IP AGREEMENT OR THE ACTION OF ANY OF THE PARTIES THERETO IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT THEREOF. + +Section 6.7 Severability. If any term or provision of this IP Agreement is determined to be invalid, illegal or unenforceable, the remaining terms and provisions of this IP Agreement remain in full force, if the essential terms and conditions of this IP Agreement for each party remain valid, binding and enforceable. Upon such determination that any term or other provision is invalid, illegal or unenforceable, the parties hereto will negotiate in good faith to modify this IP Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible. + +Section 6.8 Entire Agreement; Conflicting Provisions. This IP Agreement, together with the other Transaction Agreements and any side letters executed by the parties in connection therewith, and all of the exhibits and schedules appended hereto and thereto, constitute the final, complete and exclusive statement of the parties' agreement on the matters contained herein and therein. All prior and contemporaneous negotiations and agreements between the parties on the matters contained in this IP Agreement and the other Transaction Agreements are superseded by this IP Agreement and the other Transaction Agreements, including, but subject to Section 5.5(b) of the Acquisition Agreement, the NDA. In the event of any conflict between any specific provision of this IP Agreement (including Article V) and the provisions of the Acquisition Agreement with respect to the subject matter hereof, the provisions of this IP Agreement will control. + + + + + +Section 6.9 Counterparts. The parties may execute this IP Agreement in multiple counterparts, each of which constitutes an original as against the party that signed it, and all of which together constitute one agreement. This IP Agreement is effective upon delivery of one executed counterpart from each party to the other party. The signatures of all parties need not appear on the same counterpart. The delivery of signed counterparts by facsimile or email transmission which includes a copy of the sending party's signature(s) is as effective as signing and delivering the counterpart in person. + +Section 6.10 Amendment. The parties may amend this IP Agreement only by a written agreement signed by the parties and that identifies itself as an amendment to this IP Agreement. + +Section 6.11 Waiver. The parties may waive a provision of this IP Agreement only by a writing signed by the party against whom enforcement of the waiver is sought. A party is not prevented from enforcing any right, remedy or condition in the party's favor because of any failure or delay in exercising any right or remedy or in requiring satisfaction of any condition, except to the extent that the party specifically waives the same in writing. A written waiver given for one matter or occasion is effective only in that instance and only for the purpose stated. A waiver once given is not to be construed as a waiver for any other matter or occasion. Any enumeration of a party's rights and remedies in this Agreement is not intended to be exclusive, and a party's rights and remedies are intended to be cumulative to the extent permitted by Law and include any rights and remedies authorized in Law or in equity. + +Section 6.12 Notices. Each party giving any notice required or permitted under this IP Agreement will give the notice in writing, and shall be deemed to have been duly given: (i) when received if delivered personally; (ii) when transmitted if sent by facsimile (with transmission confirmed); (iii) the day after it is sent if sent by commercial overnight courier; (iv) upon receipt if sent by certified or registered mail (return receipt requested); or (v) when transmitted if sent by email (with receipt confirmed by recipient). Notice to a party is effective for purposes of this Agreement only if given as provided in this Section 6.12 at the address of which the sending party has been notified in accordance with this Section 6.12. If to the Seller: + + + +Motorola Solutions, Inc. 1303 E. Algonquin Road Schaumburg, Illinois 60196 Facsimile: +847.576.4688 Email: michael.annes@motorolasolutions.com + + + +Attention: Michael Annes, Senior Vice President, Business Development and Ventures 38 + + + + + +With copies to: + + + +Motorola Solutions, Inc. 1303 E. Algonquin Road Schaumburg, Illinois 60196 Facsimile: +847.576.4688 Email: mark.hacker@motorolasolutions.com Attention: Mark Hacker, General Counsel Winston & Strawn LLP 35 West Wacker Drive Chicago, Illinois 60601 United States of America Facsimile: +1.312.558.5700 Email: mcostigan@winston.com odavid@winston.com Attention: Matthew D. Costigan Oscar A. David + +If to the Purchaser: + + + +Zebra Technologies Corporation 475 Half Day Road Suite 500 Lincolnshire, IL 60069 Facsimile: (847) 821-1492 Email: jkaput@zebra.com Attention: Jim Kaput, General Counsel + +With a copy to: + + + +Kirkland & Ellis LLP 300 N. LaSalle Street Chicago, Illinois 60654 Facsimile: +1.312.862.2200 Email: henry.kleeman@kirkland.com scott.falk@kirkland.com Attention: R. Henry Kleeman R. Scott Falk, P.C. + +Section 6.13 No Joint Venture. Nothing in this IP Agreement creates a joint venture or partnership between the parties. This IP Agreement does not authorize any party (i) to bind or commit, or to act as an agent, employee or legal representative of, another party, except as may be specifically set forth in other provisions of this Agreement, or (ii) to have the power to control the activities and operations of another party. The parties are independent contractors with respect to each other under this IP Agreement. Each party agrees not to hold itself out as having any authority or relationship contrary to this Section 6.13. + +[Remainder of Page Intentionally Left Blank] 39 + + + + + +IN WITNESS WHEREOF, the parties have duly executed and delivered this Intellectual Property Agreement on the date first written above. MOTOROLA SOLUTIONS, INC. + +By: /s/ Anders Gustafsson Name: Anders Gustafsson Title: Chief Executive Officer + +ZEBRA TECHNOLOGIES CORPORATION By: /s/ Michael Annes Name: Michael Annes Title: Senior Vice President \ No newline at end of file diff --git a/full_contract_txt/ZONDWINDSYSTEMPARTNERSLTDSERIES85-B_04_03_2006-EX-10-MANAGEMENT AND MAINTENANCE AGREEMENT.txt b/full_contract_txt/ZONDWINDSYSTEMPARTNERSLTDSERIES85-B_04_03_2006-EX-10-MANAGEMENT AND MAINTENANCE AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..9b6680fff498b599b23bf9cbc2bdbc27fb8b5dba --- /dev/null +++ b/full_contract_txt/ZONDWINDSYSTEMPARTNERSLTDSERIES85-B_04_03_2006-EX-10-MANAGEMENT AND MAINTENANCE AGREEMENT.txt @@ -0,0 +1,153 @@ +Exhibit 10.17(b) ---------------- + + FIRST AMENDMENT TO SAGEBRUSH MANAGEMENT AND MAINTENANCE AGREEMENT + + THIS FIRST AMENDMENT TO SAGEBRUSH MANAGEMENT AND MAINTENANCE AGREEMENT ("Amendment") is made and entered into as of December 1, 1990 by and among Sagebrush, a California general partnership ("Partnership"), the undersigned partners of the Partnership, being all of the Sagebrush partners ("Partners"), and ToyoWest Management Inc., a California corporation ("Manager"), with respect to the following facts and circumstances: + + R E C I T A L S --------------- + + A. The Partnership, all of the Partners except Alpha Mariah (Prime), Inc. and Beta Mariah (Prime) Inc., and Manager entered into that certain Sagebrush Management and Maintenance Agreement, dated as of September 1, 1989 (the "Agreement"). + + B. Concurrently herewith, all of the Partners are entering into a First Amendment to Second Amended and Restated Sagebrush General Co-Ownership Partnership Agreement, by which the Partners agree, among other things, that Alpha Mariah (Prime), Inc. and Beta Mariah (Prime), Inc. are admitted to the Partnership. + + C. The Partnership, the Partners and Manager desire to amend the Agreement to extend the term of the Agreement and to add a new section concerning curtailment of the LIFO Partners (as defined below), all as set forth in this Amendment. + + NOW, THEREFORE, IN CONSIDERATION of the foregoing premises, the parties hereby agree as follows: + + 1. Amendment. --------- + + (a) Section 6.1 of the Agreement shall be, and hereby is, amended by deleting the date "September 30, 2003" where it appears therein, and inserting in its place the date "July 20, 2006". + + (b) A new Section 7.4 is hereby added to the Agreement, as follows: + + "7.4 Disconnection of LIFO Partners. In addition to the other rights provided to Manager hereunder to disconnect the Projects of the Partners (or their Partner Affiliates), Manager shall disconnect the Projects of Alpha Willow, SP11, SP12, SP13, SP14 and SP21 (together with their Partner Affiliates, the "LIFO Partners") in the following circumstances. + +If at any time, and for any reason other than force majeure affecting the Transmission Line, (i) the Transmission Line is incapable of delivering power at its designed capacity, availability or voltage and curtailment of the Projects of the LIFO Partners would improve the capability of the transmission Line to deliver power at its designed capacity, availability and voltage, or (ii) the Transmission Line line losses exceed 1.14%, the excess line losses have an adverse effect on the Projects of Alpha Mariah, Alpha Mariah (Prime), Beta Mariah, Beta Mariah (Prime), or Gamma Mariah or their Partner Affiliates, and curtailment of the Projects of the LIFO Partners would reduce or eliminate such excess line losses, or (iii) the Transmission Line line losses for either of the power purchase contracts commonly known as Desert Winds I and Desert Winds III exceed the levels experienced immediately prior to the addition of the Projects of the LIFO Partners to the Transmission Line, the excess line losses have an adverse effect on the Projects of Alpha Joshua, Alpha Joshua (Prime), Beta Joshua, Beta Willow or Beta Willow (Prime) or their Partner Affiliates, and curtailment of the Projects of the LIFO Partners would reduce or eliminate such excess line losses, then the Manager shall curtail the Projects of the LIFO Partners. Nothing contained in the preceding sentence shall affect the rights of the Manager to curtail or disconnect the Project of a Partner under Section 4 of that Partner's Technical Use Agreement. Any curtailment under this provision shall be in an amount sufficient to cause the Transmission Line to deliver power at its designed capacity, availability and voltage, or to reduce the Transmission Line line losses, as applicable, up to and including the Projects of all of the LIFO Partners. Such curtailment shall continue until the Manager shall determine that reconnecting the Projects of the LIFO Partners shall not result in the recurrence of the event giving rise to the curtailment. If the LIFO Partners shall inform the Manager in writing of an agreement among them concerning the priority of the curtailment of their respective Projects, the Manager shall effect any curtailment under these provisions according to such priority. If the LIFO Partners fail to so inform the Manager, the Manager shall in its discretion determine which of the Projects of the LIFO Partners to curtail. The Manager shall cooperate with the LIFO Partners to attempt to eliminate the cause of any curtailment under this provision, provided that any expenses in connection with such cooperation shall be paid by the LIFO Partners. In connection with any attempt to eliminate the cause of any curtailment, no change to the Transmission Line shall be made without the prior unanimous consent of the Partners (excluding the LIFO Partners), which consent shall not be unreasonably withheld." + + (c) Existing Section 7.4 shall be renumbered as Section 7.5. + + + + + + 2 + + (d) All references in the Agreement to Manager as "ToyoWest Management Company" shall be interpreted as referring to "ToyoWest Management Inc.," the correct name of Manager. + + 2. Continuing Validity. Except as expressly modified by Section 1 of this ------------------- Amendment, all of the terms and conditions of the Agreement shall remain in full force and effect. By execution of this Amendment, Alpha Mariah (Prime), Inc. and Beta Mariah (Prime), Inc. hereby become parties to the Agreement and agree to be bound by all of the terms of the Agreement and this Amendment. + + 3. Miscellaneous. The provisions contained in Article 10 of the Agreement ------------- are hereby incorporated herein by this cross-reference. + + 3 + + IN WITNESS WHEREOF, the Partnership, the Partners, and Manager have caused this Amendment to be executed on the dates set forth below the signatures of their respective representatives. + + TOYOWEST MANAGEMENT INC., a California corporation + + By: --------------------------------- Name: Robert L. Eisen Title: Vice President Date: Dec 28, 1990 + + Partners, on behalf of themselves and ------------------------------------- Sagebrush: --------- + + ALPHA JOSHUA, INC., a California corporation + + By: --------------------------------- Name: Geoffrey Hawkes Title: President Date: Dec 28, 1990 + + BETA WILLOW, INC., a California corporation + + By: --------------------------------- Name: Geoffrey Hawkes Title: President Date: Dec 28, 1990 + + ALPHA JOSHUA (PRIME), INC., a California corporation + + By: /s/ Kenneth W. Oberg --------------------------------- Name: Kenneth W. Oberg Title: President Date: Dec 28, 1990 + + BETA WILLOW (PRIME), INC., a California corporation + + By: /s/ Kenneth W. Oberg &sbsp; --------------------------------- Name: Kenneth W. Oberg Title: President Date: Dec 28, 1990 + + BETA JOSHUA, INC., a California corporation + + + + + + By: --------------------------------- Name: Peter Lofquist Title: President Date: Dec 28, 1990 + + ALPHA WILLOW, INC., a California corporation + + By: --------------------------------- Name: Robert L. Eisen Title: Vice President Date: Dec 28, 1990 + + ALPHA MARIAH, INC., a California corporation + + By: --------------------------------- Name: Robert L. Eisen Title: Vice President Date: Dec 28, 1990 + + ALPHA MARIAH (PRIME), INC., a California corporation + +&bbsp; By: --------------------------------- Name: Robert L. Eisen Title: Vice President Date: Dec 28, 1990 + + BETA MARIAH, INC., a California corporation + + By: --------------------------------- Name: Robert L. Eisen Title: Vice President Date: Dec 28, 1990 + + BETA MARIAH (PRIME), INC., a California corporation + + By: --------------------------------- Name: Robert L. Eisen Title: Vice President Date: Dec 28, 1990 + + GAMMA MARIAH, INC., a California corporation + + By: --------------------------------- Name: Robert L. Eisen Title: Vice President Date: Dec 28, 1990 + + DELTA MARIAH, INC., a California corporation + + By: --------------------------------- Name: Robert L. Eisen Title: Vice President Date: Dec 28, 1990 + + SAGEBRUSH PARTNER ELEVEN, INC., a California corporation + + By: --------------------------------- Name: Robert L. Eisen Title: Vice President Date: Dec 28, 1990 + + + + + + SAGEBRUSH PARTNER TWELVE, INC., a California corporation + + By: --------------------------------- Name: Robert L. Eisen Title: Vice President Date: Dec 28, 1990 + + SAGEBRUSH PARTNER THIRTEEN, INC., a California corporation + + By: --------------------------------- Name: Robert L. Eisen Title: Vice President Date: Dec 28, 1990 + + SAGEBRUSH PARTNER FOURTEEN, INC., a California corporation + + By: --------------------------------- Name: Robert L. Eisen Title: Vice President Date: Dec 28, 1990 + + SAGEBRUSH PARTNER FIFTEEN, INC., a California corporation + + By: --------------------------------- Name: Title: Date: + + SAGEBRUSH PARTNER SIXTEEN, INC., a California corporation + + By: --------------------------------- Name: Title: Date: + + SAGEBRUSH PARTNER SEVENTEEN, INC., a California corporation + + By: --------------------------------- Name: Title: Date: + + SAGEBRUSH PARTNER EIGHTEEN, INC., a California corporation + + By: --------------------------------- Name: Title: Date: + + SAGEBRUSH PARTNER NINETEEN, INC., a California corporation + + By: --------------------------------- Name: Title: Date: + + SAGEBRUSH PARTNER TWENTY, INC., a California corporation + + + + + + By: --------------------------------- Name: Title: Date: + + SAGEBRUSH PARTNER TWENTY-ONE, INC., a California corporation + + By: --------------------------------- &sbsp; Name: Robert L. Eisen Title: Vice President Date: Dec 28, 1990 \ No newline at end of file diff --git a/full_contract_txt/ZogenixInc_20190509_10-Q_EX-10.2_11663313_EX-10.2_Distributor Agreement.txt b/full_contract_txt/ZogenixInc_20190509_10-Q_EX-10.2_11663313_EX-10.2_Distributor Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..41ade3251b1fb328a02efaafdf2fde2f4abe2fdb --- /dev/null +++ b/full_contract_txt/ZogenixInc_20190509_10-Q_EX-10.2_11663313_EX-10.2_Distributor Agreement.txt @@ -0,0 +1,1541 @@ +Exhibit 10.2 + +CERTAIN INFORMATION (INDICATED BY ASTERISKS) HAS BEEN OMITTED FROM THIS DOCUMENT BECAUSE IT IS NOT MATERIAL AND WOULD LIKELY CAUSE COMPETITIVE HARM TO THE REGISTRANT IF PUBLICLY DISCLOSED. + +Zogenix Inc. + +and + +Nippon Shinyaku Company Ltd. + +Distributorship Agreement + +US-DOCS\105216871.19 + +Source: ZOGENIX, INC., 10-Q, 5/9/2019 + + + + + +Table of Contents + +Article 1. Definitions Article 2. Grant of Rights 2.1 Grant of Rights to Distributor 2.2 Sub-distribution by Distributor 2.3 Supply of Product for Distributorship 2.4 No Other Rights; Other Limitations 2.5 Non-Compete Covenant 2.6 No Activities Outside the Territory or Field Article 3. Governance 3.1 Joint Steering Committee 3.2 Expenses 3.3 Alliance Managers 3.4 Scope of Governance Article 4. Development and Regulatory Activities 4.1 Nonclinical and Clinical Studies and CMC Requirements 4.2 Regulatory Activities 4.3 Distributor's Right to Use and Reference 4.4 Zogenix's Right to Use and Reference 4.5 Adverse Event Reporting 4.6 Drug Safety and Pharmacovigilance System including Global Safety Database 4.7 Regulatory Audit 4.8 Use of Subcontractors 4.9 Recalls 4.1 Development Expenses Article 5. Commercialization; Supply: Trademarks 5.1 Commercialization of the Product. 5.2 Supply 5.3 Trademark Rights 5.4 Commercial Expenses Article 6. Payments 6.1 Upfront Payment 6.2 Funding to Support Development of The Product 6.3 Regulatory Milestones 6.4 Sales Milestones 6.5 Supply Payments Article 7. Payments, Books and Records 7.1 Payment Method + +i + +US-DOCS\105216871.19 + +Source: ZOGENIX, INC., 10-Q, 5/9/2019 + + + + + +7.2 Currency Conversion 7.3 Taxes 7.4 Records 7.5 Audits 7.6 Late Payments Article 8. Confidentiality 8.1 Confidential Information 8.2 Exceptions 8.3 Permitted Disclosures 8.4 Confidentiality of this Agreement and its Terms 8.5 Public Announcements 8.6 Publication 8.7 Prior Non-Disclosure Agreements 8.8 Equitable Relief Article 9. Intellectual Property Ownership and Enforcement 9.1 Ownership of Intellectual Property 9.2 Zogenix Patent Prosecution and Maintenance 9.3 Infringement by Third Parties 9.4 Third Party Intellectual Property Rights 9.5 Patent Term Restoration 9.6 Patent Marking 9.7 Zogenix Trademarks 9.8 Product Trademarks Article 10. Representations, Warranties and Covenants; Limitation of Liability 10.1 Mutual Representations, Warranties and Covenants 10.2 Representations, Warranties and Covenants of Distributor 10.3 Representations and Warranties of Zogenix 10.4 Disclaimer 10.5 Limitation of Liability Article 11. Indemnification 11.1 Indemnification of Zogenix 11.2 Indemnification of Distributor 11.3 Procedure 11.4 Insurance Article 12. Term and Termination 12.1 Term 12.2 Termination 12.3 Rights on Termination 12.4 Exercise of Right to Terminate 12.5 Damages; Relief 12.6 Accrued Obligations; Survival + +ii + +US-DOCS\105216871.19 + +Source: ZOGENIX, INC., 10-Q, 5/9/2019 + + + + + +Article 13. Dispute Resolution 13.1 Objective 13.2 Resolution by Executives 13.3 Arbitration Article 14. General Provisions 14.1 Governing Law 14.2 Force Majeure 14.3 Assignment 14.4 Severability 14.5 Notices 14.6 Entire Agreement; Amendments 14.7 Headings 14.8 Independent Contractors 14.9 Waiver 14.1 Cumulative Remedies 14.11 Waiver of Rule of Construction 14.12 Interpretation 14.13 No Third Party Beneficiaries 14.14 English Language 14.15 Counterparts 14.16 Further Actions + +iii + +US-DOCS\105216871.19 + +Source: ZOGENIX, INC., 10-Q, 5/9/2019 + + + + + +List of Exhibits + +Exhibit 1.70 Unlabeled Drug Product Exhibit 1.74 Zogenix ZX008 Patents as of the Effective Date Exhibit 2.3 Material Terms of Supply Agreement Exhibit 4.2(a) The initial version of the Regulatory Plan Exhibit 8.5(a) Press Release Exhibit 9.7 Zogenix Trademarks Exhibit 9.8 Product Trademarks Exhibit 10.2(b) Form of Compliance Certification + +US-DOCS\105216871.19 + +Source: ZOGENIX, INC., 10-Q, 5/9/2019 + + + + + +DISTRIBUTORSHIP AGREEMENT + +This DISTRIBUTORSHIP AGREEMENT ("Agreement") is entered into as of March 18, 2019 (the "Effective Date") by and between ZOGENIX, INC., having a place of business at 5959 Horton Street, Suite 500, Emeryville, California 94608( "Zogenix") and Nippon Shinyaku Company, Ltd., having a place of business at 14, Nishinosho-Monguchi-cho, Kisshoin, Minami-ku, Kyoto 601-8550, Japan ("Distributor"). Zogenix and Distributor may be referred to individually as a "Party" and collectively as the "Parties". + +RECITALS + +WHEREAS, Zogenix is developing its proprietary fenfluramine product, known as Fintepla®. + +WHEREAS, Zogenix wishes to commercialize such product through a distributor that will promote, market, sell and distribute such product within the Territory; + +WHEREAS, Distributor has the ability to promote, market, sell and distribute such product within the Territory for the treatment of Dravet syndrome and Lennox-Gastaut syndrome and any additional indications approved in the Territory, and wishes to be Zogenix's exclusive distributor of such product for such indications within the Territory, and Zogenix is willing to grant to Distributor such exclusive distribution rights on the terms and conditions set forth in this Agreement; and + +WHEREAS, Zogenix agrees to manufacture (or have manufactured) and sell to Distributor such product for such commercialization activities in the Territory, on the terms and conditions set forth in this Agreement and in a separate supply agreement to be entered into by the Parties. + +NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Zogenix and Distributor hereby agree as follows: + +ARTICLE 1. DEFINITIONS + +1.1 "Affiliate" of a Party means any entity that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with such Party, as the case may be, but for only so long as such control exists. As used in this Section 1.1, "control" means (a) to possess, directly or indirectly, the power to direct the management or policies of an entity, whether through ownership of voting securities, or by contract relating to voting rights or corporate governance; or (b) direct or indirect beneficial ownership of more than fifty percent (50%) (or such lesser percentage which is the maximum allowed to be owned by a foreign corporation in a particular jurisdiction) of the voting share capital or other equity interest in such entity. + +US-DOCS\105216871.19 + +Source: ZOGENIX, INC., 10-Q, 5/9/2019 + + + + + +1.2 "Alliance Manager" has the meaning set forth in Section 3.3. + +1.3 "Annual Report" has the meaning set forth in Section 6.5(c). + +1.4 "Applicable Laws" means the applicable provisions of any and all national, supranational, regional, state and local laws, treaties, statutes, rules, regulations, administrative codes, industry codes, guidance, ordinances, judgments, decrees, directives, injunctions, orders or permits (including Regulatory Approvals) of or from any court, arbitrator, Regulatory Authority or governmental agency or authority having jurisdiction over or related to the subject item, including the FCPA, export control, embargo, trade sanction and data privacy laws, regulations, rules and licenses, and other laws and regulations pertaining to domestic or international corruption, commercial bribery, fraud, embezzlement or money laundering. + +1.5 "Business Day" means a day other than a Saturday, Sunday, any public holiday, or any bank holiday in the United States or Japan. + +1.6 "Change of Control" means any (a) direct or indirect acquisition of assets of a Party (i) equal to fifty percent (50%) or more of the fair market value of a Party's consolidated assets, or (ii) to which fifty percent (50%) or more of a Party's net revenues or net income on a consolidated basis are attributable, or (iii) representing substantially all of the properties or assets related to a Party's obligations under this Agreement, (b) direct or indirect acquisition by a Person, or group of Persons acting in concert, of fifty percent (50%) or more of the voting equity interests of a Party, (c) tender offer or exchange offer that if consummated would result in any Person, or group of Persons acting in concert, beneficially owning fifty percent (50%) or more of the voting equity interests of a Party, (d) merger, consolidation, other business combination or similar transaction involving a Party, pursuant to which any Person would own fifty percent (50%) or more of the consolidated assets, net revenues or net income of a Party, taken as a whole, or which results in the holders of the voting equity interests of a Party immediately prior to such merger, consolidation, business combination or similar transaction ceasing to hold fifty percent (50%) or more of the combined voting power of the surviving, purchasing or continuing entity immediately after such merger, consolidation, business combination or similar transaction, (e) liquidation or dissolution (or the adoption of a plan of liquidation or dissolution) of a Party, or (f) declaration or payment of an extraordinary dividend (whether in cash or other property) by a Party, where the amount of the dividend or the in specie property which is the subject of the dividend would otherwise come within the application of any of clauses (a)-(e) above, in all cases where such transaction is to be entered into with any Person other than the other Party. + +1.7 "CMC" means chemistry, manufacturing and controls. + +1.8 "Commercialization" means all activities directed to marketing, promoting, advertising, exhibiting, distributing (including storage for distribution or inventory), detailing, selling, (and offering for sale or contracting to sell), or otherwise commercially exploiting the Product in the Field in the Territory. + +1.9 "Commercialization Plan" has the meaning set forth in Section 5.1(b). + +2 + +US-DOCS\105216871.19 + +Source: ZOGENIX, INC., 10-Q, 5/9/2019 + + + + + +1.10 "Commercially Reasonable Efforts" means, with respect to a Party's specific obligations under this Agreement, that level of efforts and resources, [***]. Commercially Reasonable Efforts requires that the applicable Party: (i) [***], (ii) [***], and (iii) [***]. + +1.11 "Confidential Information" has the meaning set forth in Section 8.1. + +1.12 "Confidentiality Agreement" means that certain Mutual Confidential Disclosure Agreement, dated June 21, 2018, between Zogenix and Distributor. + +1.13 "Control" (including any variations such as "Controlled" and "Controlling") means, with respect to any Information, Data, Patent or other intellectual property rights, possession by a Party of the ability (whether by ownership or grant of rights, other than pursuant to this Agreement) to grant to the other Party the applicable access or other right under this Agreement without violating the terms of an agreement with a Third Party. + +1.14 "Data" means any and all scientific, technical or test data pertaining to the Product in the Field that is generated by or under the authority of Distributor or its Affiliates, Sub-distributors or other subcontractors or by or under the authority of Zogenix or Zogenix ex-Territory Distributors before or during the Term, including research data, clinical pharmacology data, CMC data (including analytical and quality control data and stability data), preclinical data, clinical data and all submissions made in association with an IND or MAA filed in or outside the Territory with respect to the Product in the Field, in each case to the extent such data either (a) is Controlled by Zogenix on the Effective Date or (b) comes within a Party's Control during the Term. + +1.15 "Development" means all activities directed to research, non-clinical and preclinical studies and trials, CMC Data collection, clinical studies and trials, Investigator Initiated Studies, toxicology studies, publication and presentation of study results, preparation and submission to Regulatory Authorities of an MAA concerning the Product, interacting with Regulatory Authorities prior to and following Regulatory Approval of the Product, and Product pricing negotiations and decisions concerning the Product. + +1.16 "Disclosing Party" has the meaning set forth in Section 8.1. + +1.17 "Distribution Term" means the period commencing on the first Regulatory Approval of the Product in the Territory and continuing until [***], or if this Agreement is terminated earlier pursuant to Article 12, the effective date of such termination. + +1.18 "Distributor Invention" has the meaning set forth in Section 9.1(b)(i). + +1.19 "Executives" has the meaning set forth in Section 3.1(d). + +1.20 "FCPA" means the U.S. Foreign Corrupt Practices Act (15 U.S.C. § 78dd-1 et seq.), as amended. + +1.21 "FDA" means the Food and Drug Administration, or any successor agency thereto + +3 + +US-DOCS\105216871.19 + +Source: ZOGENIX, INC., 10-Q, 5/9/2019 + + + + + +having the administrative authority to regulate the marketing of human pharmaceutical products in the United States. + +1.22 "Field" means the Indications of treatment for the Product in the Territory. + +1.23 "First Commercial Sale" means the first bona fide, arm's-length sale of the Product in the Field in the Territory following Regulatory Approval of the Product in the Field in the Territory. + +1.24 "Fiscal Quarter" means a period of three (3) consecutive months during a Fiscal Year beginning on and including April 1st, July 1st or October 1st or January 1st. + +1.25 "Fiscal Year" means a year that starts from April 1st and ends on March 31st. + +1.26 "Fully-Burdened Manufacturing Cost" means the costs incurred by Zogenix that are directly attributable to and reasonably allocated to the manufacture and delivery of the Product to Distributor. Fully-Burdened Manufacturing Costs shall include the following: [***]. + +1.27 "Generic Product" means a pharmaceutical product that (a) [***]; (b) [***]; (c) [***]; and (d) [***]. + +1.28 "IFRS" means international financial reporting standards, as may be amended from time to time. + +1.29 "IND" means any Investigational New Drug application, as defined in Title 21 of the Code of Federal Regulations, on file with the FDA before the commencement of clinical trials of the Product in humans, or any comparable filing with any Regulatory Authority. + +1.30 "Indemnitee" has the meaning set forth in Section 11.3. + +1.31 "Indemnitor" has the meaning set forth in Section 11.3. + +1.32 "Indication" means the treatment of Dravet syndrome, Lennox-Gastaut syndrome, [***] during the Distribution Term. + +1.33 "Indirect Losses" means any damages or other losses involving, but only to the extent of, any loss of profits, diminution in value, or incidental, indirect, consequential, special or punitive damages. + +1.34 "Information" means information, ideas, inventions, discoveries, concepts, formulas, practices, procedures, processes, methods, knowledge, know-how, trade secrets, technology, inventories, machines, techniques, development, designs, drawings, computer programs, skill, experience, documents, apparatus, results, clinical and regulatory strategies, documentation, information and submissions pertaining to, or made in association with, filings with any Regulatory Authority, data, including pharmacological, toxicological and clinical data, analytical and quality control data, manufacturing data and descriptions, patent and legal data, + +4 + +US-DOCS\105216871.19 + +Source: ZOGENIX, INC., 10-Q, 5/9/2019 + + + + + +market data, financial data or descriptions, specifications and the like, in written, electronic or other form, now known or hereafter developed, whether or not patentable. + +1.35 "Invention" means any new and useful process, article of manufacture, composition of matter, formulation or apparatus, or any improvement thereof, discovery or finding, whether or not patentable, as determined in accordance with the patent laws of the United States of America. + +1.36 "Japan GAAP" means Japan generally accepted accounting principles, as may be amended from time to time. + +1.37 "Joint Steering Committee" or "JSC" has the meaning set forth in Section 3.1. + +1.38 "Losses" has the meaning set forth in Section 11.1. + +1.39 "MAA" means a marketing authorization application or equivalent application, and all amendments and supplements thereto, filed with a Regulatory Authority. + +1.40 "MAH" means a marketing authorization holder of the Product in the Field in the Territory. + +1.41 "MHLW" means the Japanese Ministry of Health, Labor and Welfare. + +1.42 "Net Price" means, for any Fiscal Year, the unit price of the Product in the Territory in the Field calculated by dividing the aggregate Net Sales for the Product in the Territory in such Fiscal Year by the total number of units of the Product sold by or on behalf of Distributor or its Affiliate or Sub-distributor in the Territory in such Fiscal Year. + +1.43 "Net Sales" means, with respect to any period of time, the gross amounts invoiced for sales or other dispositions of the Product in the Territory by or on behalf of Distributor or its Affiliates or Sub-distributors to Third Parties (other than Sub- distributors) during such period, less the value added taxes levied on or measured by the billing amount for the Product to the extent included in the gross invoiced sales price for the Product or otherwise directly paid or incurred by Distributor or its Affiliates or Sub-distributors, as applicable, with respect to the sale or other disposition of the Product, less the following deductions to the extent actually allowed, paid, incurred or accrued during the applicable period, calculated in accordance with Japan GAAP or IFRS (consistently applied): + +[***] + +Net Sales shall be calculated in accordance with Japan GAAP or IFRS, consistently applied in the Territory and shall be consistent with net sales reported in Distributor's audited financial statements. If net sales reported in Distributor's audited financial statements include discounts for products sold in combination or bundled with other products, these discounts will not be included in the calculation of Net Sales of the Product. + +5 + +US-DOCS\105216871.19 + +Source: ZOGENIX, INC., 10-Q, 5/9/2019 + + + + + +Sales of a Product for use in conducting clinical trials of the Product in the Territory in order to obtain Regulatory Approval of the Product in the Territory shall be excluded from Net Sales calculations for all purposes. + +Upon any sale or other disposition of the Product for any consideration other than exclusively monetary consideration on bona fide arm's-length terms, for purposes of calculating Net Sales under this Agreement, the Product shall be deemed to be sold exclusively for money at the average sales price during the applicable reporting period generally achieved for the Product in the Field in the Territory when the Product is sold alone and not with other products. + +Distributor and its Affiliates and Sub-distributors shall not sell the Product in combination with or as part of a bundle with other products, or offer packaged arrangements to customers that include the Product, in such a manner as to disproportionately discount the selling price of the Product as compared with the weighted-average discount applied to the other products, as a percent of the respective list prices (or if not available, a good faith estimate thereof) of such products and the Product prior to applying the discount. + +1.44 "NHI" means the Japanese national health insurance system, or its successor system. + +1.45 "NHI Price" means the reimbursement price of the maximum daily dose of Product for purposes of the NHI. + +1.46 "NHI Price Listing" means the listing of the NHI Price by Central Social Insurance Medical Council (Chuikyo) of the MHLW. + +1.47 "Out-of-Pocket Costs and Expenses" means the costs and expenses incurred by one or both Parties (as applicable) that are directly attributable to and reasonably allocated to a specified project, program or task. Out-of-Pocket Costs and Expenses shall include payments made to third parties such as contract research organizations and investigators and the fully burdened cost of drug product. Out-of-Pocket Costs and Expenses shall not include a Party's employee costs. + +1.48 "Patent" means (a) any patent, certificate of invention, application for certificate of invention, priority patent filing and patent application, and (b) any renewal, division, continuation (in whole or in part) or request for continued examination of any of such patent, certificate of invention and patent application, and any patent or certificate of invention issuing thereon, and any reissue, reexamination, extension, restoration by any existing or future extension or restoration mechanism, division, renewal, substitution, confirmation, registration, revalidation, revision and addition of or to any of the foregoing. + +1.49 "Person" means any individual, corporation, partnership, limited liability company, trust or other entity. + +1.50 "Pharmacovigilance Agreement" has the meaning set forth in Section 4.5. + +6 + +US-DOCS\105216871.19 + +Source: ZOGENIX, INC., 10-Q, 5/9/2019 + + + + + +1.51 "PMDA" means the Japanese Pharmaceuticals and Medical Devices Agency, and local counterparts thereto, and any successor agency(ies) or authority thereto having substantially the same function. + +1.52 "Product" means Zogenix's proprietary fenfluramine product, known as Fintepla®, or any drug product containing a salt, enantiomer, or polymorph of fenfluramine. + +1.53 "Product Invention" has the meaning set forth in Section 9.1(b)(i). + +1.54 "Product Trademark" has the meaning set forth in Section 9.8(a). + +1.55 "Public Official or Entity" means (a) any officer, employee (including physicians, hospital administrators or other healthcare professionals), agent, representative, department, agency, de facto official, representative, corporate entity, instrumentality or subdivision of any government, military or international organization, including any ministry or department of health or any state-owned or affiliated company or hospital, or (b) any candidate for political office, any political party or any official of a political party. + +1.56 "Transfer Price" has the meaning set forth in Section 6.5(a). + +1.57 "Receiving Party" has the meaning set forth in Section 8.1. + +1.58 "Regulatory Approval" means any and all approvals (except NHI Price Listing), licenses, registrations, or authorizations of Regulatory Authorities in the applicable regulatory jurisdiction that are necessary for the manufacture, use, storage, import, transport and/or sale of a pharmaceutical product in such regulatory jurisdiction. + +1.59 "Regulatory Authority" means any national, regional, state or local regulatory agency, department, bureau, commission, council or other governmental entity whose review and/or approval is necessary for the manufacture, packaging, use, storage, import, export, distribution or promotion of a pharmaceutical product in the applicable regulatory jurisdiction, including the PMDA in the Territory. If governmental approval is required for pricing or reimbursement by national health insurance (or its local equivalent), "Regulatory Authority" shall also include any national, regional, state or local regulatory agency, department, bureau, commission, council or other governmental entity whose review and/or approval of pricing or reimbursement is required. + +1.60 "Regulatory Filings" means all applications, approvals, licenses, notifications, registrations, submissions and authorizations made to or received from a Regulatory Authority in connection with the development, manufacture or commercialization of a pharmaceutical product, including any INDs, MAAs and Regulatory Approvals. + +1.61 "Regulatory Plan" has the meaning set forth in Section 4.2(a). + +1.62 "SEC" means the U.S. Securities and Exchange Commission or any successor agency. + +7 + +US-DOCS\105216871.19 + +Source: ZOGENIX, INC., 10-Q, 5/9/2019 + + + + + +1.63 "Sub-distributor" means any Person other than Distributor or its Affiliates that Distributor appoints to market, promote, offer for sale, sell, import or distribute the Product in the Field in the Territory, beyond the mere right to purchase the Product from Distributor or its Affiliates for end use. + +1.64 "Supply Agreement" has the meaning set forth in Section 5.2. + +1.65 "Territory" means Japan. + +1.66 "Third Party" means any governmental authority or Person other than Zogenix, Distributor and their respective Affiliates. + +1.67 "Third Party Claims" has the meaning set forth in Section 11.1. + +1.68 "Trademark" means any word, name, symbol, color, designation or device or any combination thereof, including any trademark, trade dress, brand mark, service mark, trade name, brand name, logo or business symbol, whether or not registered, as determined in accordance with the trademark laws of the Unites States of America. + +1.69 "United States" or "U.S." means the United States of America, including its territories and possessions and the District of Columbia. + +1.70 "Unlabeled Drug Product" means [***]. + +1.71 "Zogenix ex-Territory Distributor" means a licensee, collaborator or distributor engaged by Zogenix or any of its Affiliates to market, promote or sell the Product outside the Territory. + +1.72 "Zogenix Indemnitees" has the meaning set forth in Section 11.1. + +1.73 "Zogenix Know-How" means all Information and Data that Zogenix Controls as of the Effective Date or during the Term, which Information is necessary or reasonably useful to file for, obtain or maintain Regulatory Approval or to market, promote, sell, offer for sale or import the Product in the Field in the Territory. + +1.74 "Zogenix Patents" means all Patents that Zogenix Controls as of the Effective Date or during the Term, which Patents would be infringed, absent a license, by the use, sale, offer for sale or import of the Product in the Field in the Territory, including any Patents issuing from the applications listed in Exhibit 1.74. + +1.75 "Zogenix Technology" means the Zogenix Know-How and Zogenix Patents. + +1.76 "Zogenix Trademark" has the meaning set forth in Section 9.7. + +8 + +US-DOCS\105216871.19 + +Source: ZOGENIX, INC., 10-Q, 5/9/2019 + + + + + +ARTICLE 2. GRANT OF RIGHTS + +2.1 Grant of Rights to Distributor. Subject to the terms and conditions of this Agreement, Zogenix hereby appoints Distributor, and Distributor accepts appointment, as the exclusive distributor (even as to Zogenix) of the Product in the Field in the Territory during the Term, and grants to Distributor the exclusive rights to maintain Regulatory Approval of (while Distributor is the MAH Party), package, promote, market, offer for sale, sell, import and distribute the Product in the Field in the Territory during the Term. The Parties agree that the rights granted in this Section 2.1 do not grant any right or license to, and Distributor shall not, supply, sell, offer for sale or otherwise dispose of or provide access to the Product in the Territory unless and until the Product obtains Regulatory Approval in the Field in the Territory. + +2.2 Sub-distribution by Distributor. Distributor shall not have the right to (a) appoint any Sub-distributors for the Product in the Field in the Territory or (b) otherwise subcontract any sales, marketing, distribution or promotional activities with respect to the Product in the Field in the Territory, including to any contract sales organization, in each case, except with the prior written approval of Zogenix. If Zogenix grants such approval, in accordance with this Section 2.2 and Section 4.8, any Sub- distributor agreement shall be in writing and, with the exception of the financial terms, on substantially the same terms as this Agreement, to the extent applicable to the Sub-distributor's activity, and shall provide for the assignment of all Data generated by such Sub-distributors to Distributor, and the right for Distributor to terminate such agreement immediately in the event of any violation by such Sub-distributor of the FCPA or other Applicable Laws. Distributor shall be responsible for the acts or omissions of its Sub-distributors under any Sub-distributors agreement, including any such act or omission that would constitute a breach hereunder. In the event of any such breach by a Sub-distributor of its obligations to comply with the FCPA or other Applicable Laws, Distributor shall immediately terminate the applicable Sub-distributor agreement(s), unless otherwise agreed to by Zogenix in writing. Within [***] after execution thereof, Distributor shall provide Zogenix with a full and complete copy of each Sub- distributor agreement (provided that Distributor may redact any confidential information contained therein that is not relevant to compliance with this Agreement). + +2.3 Supply of Product for Distributorship. Zogenix shall supply (or have supplied) to Distributor, in accordance with the terms set forth on Exhibit 2.3, and Distributor shall purchase exclusively from Zogenix, Distributor's and its Affiliates' and Sub- distributors' Unlabeled Drug Product requirements of the Product for sale by Distributor or its Affiliates or Sub-distributors in the Territory in the Field, subject to and under the provisions of Section 5.2 and the Supply Agreement. Distributor shall purchase all such amounts of Unlabeled Drug Product of the Product for sale by Distributor supplied by Zogenix under the payment provisions of Section 6.5 and Article 7. Notwithstanding the foregoing, upon the reasonable request of Distributor, Zogenix will provide Product free of charge to Distributor to the extent necessary for Distributor to meet its analytical testing obligations hereunder. + +9 + +US-DOCS\105216871.19 + +Source: ZOGENIX, INC., 10-Q, 5/9/2019 + + + + + +2.4 No Other Rights; Other Limitations. Except for the rights expressly granted in this Agreement, Zogenix retains all rights under the Zogenix Technology and with respect to the Product, including the exclusive right to manufacture and sell the Product to Distributor, to develop the Product, and to promote, market and sell the Product outside the Territory, and all rights with respect to the Product outside the Field in the Territory. No rights shall be deemed granted by one Party to the other Party under this Agreement by implication, estoppel or otherwise. Distributor agrees not to use any Zogenix Technology except as necessary to file for and maintain Regulatory Approval of, promote, market, sell, offer for sale, distribute and import the Product in the Field in the Territory during the Term in accordance with the terms of this Agreement and the Supply Agreement. Without limiting the foregoing, Distributor agrees that in no event shall Distributor or its Affiliates manufacture or have manufactured the Product, or purchase the Product from any party other than Zogenix pursuant to the Supply Agreement. Without limiting the foregoing, Distributor further acknowledges that it has no right to and agrees that it will not perform any studies of the Product or allow its Affiliate or any Third Party to perform any studies of the Product (including any investigator-initiated studies) except with the prior written approval of Zogenix, which Zogenix may withhold in its sole discretion. + +2.5 Non-Compete Covenant. During the Term, without the prior written approval of Zogenix, Distributor shall not, and shall cause its Affiliates not to, either directly or indirectly, file for Regulatory Approval of, promote, market, offer for sale, sell, import or distribute in the Territory any product containing fenfluramine or any salt, enantiomer, or polymorph of fenfluramine, or any product for [***]. + +2.6 No Activities Outside the Territory or Field. Distributor shall not, and shall cause its Affiliates and Sub-distributors not to, (a) actively seek customers for the Product outside the Territory or the Field, (b) establish or maintain a branch office, warehouse, or distribution facility for the Product outside the Territory, (c) engage in any advertising or promotional activities relating to the Product directed to customers outside the Territory or directed to any use outside the Field, or (d) solicit orders from any prospective purchaser with its principal place of business located outside the Territory. If Distributor receives any order from a prospective purchaser outside the Territory, Distributor shall not accept any such order but shall immediately refer that order to Zogenix. + +ARTICLE 3. GOVERNANCE + +3.1 Joint Steering Committee. The Parties shall establish a joint steering committee (the "Joint Steering Committee" or "JSC") to oversee the activities of the Parties pursuant to this Agreement. + +(a) Composition. The JSC will be comprised of [***] members appointed by Distributor and [***] members appointed by Zogenix, which members shall be senior level employees or representatives of each Party with decision-making authority. Each Party will + +10 + +US-DOCS\105216871.19 + +Source: ZOGENIX, INC., 10-Q, 5/9/2019 + + + + + +notify the other Party of its initial JSC members within [***] after the Effective Date. The Parties, through the JSC, may change the number of JSC members as long as an equal number of members from each of Distributor and Zogenix is maintained. Each Party may change its JSC members at any time by written notice to the other Party, which may be delivered at a scheduled meeting of the JSC. Any member of the JSC may designate a substitute to attend and perform the functions of that member at any meeting of the JSC. Zogenix shall appoint one (1) of its members as chair, whose role shall be to convene and preside at meetings of the JSC, but the chair shall not be entitled to prevent items from being discussed or to cast any tie-breaking vote. Each Party may, with the consent of the other Party, such consent not to be unreasonably withheld or delayed, invite non-member, non-voting representatives of such Party to attend meetings of the JSC. + +(b) Responsibilities. The JSC shall be responsible for oversight of the Parties' activities under this Agreement with respect to filing for, obtaining and maintaining Regulatory Approval and commercializing (including commercial supply to Distributor and marketing and sales) the Product in the Field in the Territory. Without limiting the foregoing, the JSC shall: + +(i) review, discuss and approve the Regulatory Plan, including all amendments thereto; + +(ii) review, discuss and approve the Commercialization Plan, including all amendments thereto; + +(iii) periodically review, discuss and assess the progress and results of the Parties under the Regulatory Plan and Commercialization Plan to ensure, to the extent reasonably practical, compliance with obligations under this Agreement; + +(iv) periodically discuss the status of the development and commercialization of the Product in the Field outside the Territory; + +(v) review Distributor's binding and non-binding forecasts for the Product and monitor the production capacity of Zogenix and its Third Party manufacturers; + +(vi) periodically review Distributor's and Zogenix's pharmacovigilance policies and procedures; + +(vii) facilitate the exchange of Data between the Parties; and + +(viii) perform such other duties as are specifically assigned by the Parties to the JSC in this Agreement. + +(c) Meetings. The JSC will hold meetings at such frequency as determined by the JSC members, but no less than twice every calendar year. Such meetings may be in person, via videoconference, or via teleconference; provided, that no fewer than two (2) JSC + +11 + +US-DOCS\105216871.19 + +Source: ZOGENIX, INC., 10-Q, 5/9/2019 + + + + + +meetings each calendar year prior to First Commercial Sale shall be in-person unless the Parties otherwise agree. The location of in-person JSC meetings will alternate between Zogenix's offices and Distributor's offices, unless the Parties otherwise agree. At least [***] prior to each JSC meeting, each Party shall provide written notice to the other Party of agenda items proposed by such Party for discussion or decision at such meeting, together with appropriate information related thereto. Reasonably detailed written minutes will be kept of all JSC meetings and will reflect material decisions made at such meetings. Meeting minutes will be prepared by each Party on an alternating basis and sent to each member of the JSC for review and approval within [***] after a meeting. Minutes will be deemed approved unless a member of the JSC objects to the accuracy of such minutes within [***] of receipt. + +(d) Decisions. The JSC may make decisions with respect to any subject matter that is within the JSC's responsibilities. Subject to this Section 3.1(d), all decisions of the JSC shall be made by unanimous vote, with Zogenix and Distributor each having, collectively, among its respective members, one (1) vote in all such decisions. If the JSC cannot reach consensus with regard to any matter to be decided by the JSC within [***] after such matter has been brought to the JSC's attention, then such matter shall be referred to the Chief Executive Officer of Zogenix and the Director, Member of the Board of Distributor (the "Executives") for resolution. If the Executives cannot resolve the issue within [***] after the matter has been brought to their attention then: + +(i) Subject to good faith consideration of the views of Distributor, Zogenix shall have the tie-breaking vote on all matters to be decided by the JSC relating to [***]; provided, however, [***]; and + +(ii) Subject to good faith consideration of the views of Zogenix and to Section 3.1(d)(iii), Distributor shall have the tie-breaking vote on all matters to be decided by the JSC relating to [***]; provided, however, [***]; and + +(iii) Subject to good faith consideration of the views of Zogenix and Section 12.2(g), Distributor shall have the tie-breaking vote on the decision of [***], unless otherwise mutually agreed between the Parties; and + +(iv) Subject to good faith consideration of the views of Distributor, Zogenix shall have the tie-breaking vote on all matters other than the decisions set forth in Section 3.1(d)(ii) and (iii) to be decided by the JSC that may affect commercialization outside the Territory; provided, however, that Zogenix shall not have power to amend or waive compliance with this Agreement or the Commercialization Plan. + +(e) Discontinuation of JSC Participation. The activities to be performed by the JSC relate solely to governance under this Agreement, and are not intended to be or involve the delivery of services. The JSC will continue to exist until the Parties mutually agreeing to disband the JSC. Once the Parties mutually agree to disband the JSC, the JSC shall have no further obligations under this Agreement and, thereafter, each Party shall designate a contact person for the exchange of information under this Agreement, and decisions of the JSC shall be + +12 + +US-DOCS\105216871.19 + +Source: ZOGENIX, INC., 10-Q, 5/9/2019 + + + + + +decisions as between the Parties, subject to the decision-making authority under Section 3.1(d) and other terms and conditions of this Agreement. + +3.2 Expenses. Each Party shall bear all its own costs, including expenses incurred by the members nominated by it, in connection with its members' JSC representation and meetings. + +3.3 Alliance Managers. Promptly after the Effective Date, each Party shall appoint an individual to act as the alliance manager for such Party (the "Alliance Manager"). Each Alliance Manager will be permitted to attend meetings of the JSC as non-voting participants. The Alliance Managers will be the primary contact for the Parties regarding the activities contemplated by this Agreement and shall facilitate all such activities hereunder. Each Party may replace its Alliance Manager with an alternative representative at any time with prior written notice to the other Party. Any Alliance Manager may designate a substitute to temporarily perform the functions of that Alliance Manager. + +3.4 Scope of Governance. Notwithstanding the creation of the JSC, each Party shall retain the rights, powers and discretion granted to it hereunder, and the JSC shall not be delegated or vested with rights, powers or discretion unless such delegation or vesting is expressly provided herein or the Parties expressly so agree in writing. The JSC shall not have the power to amend or modify this Agreement, and no decision of the JSC shall be in contravention of any terms and conditions of this Agreement. It is understood and agreed that issues to be formally decided by the JSC are only those specific issues that are expressly provided in this Agreement to be decided by the JSC. In no event shall the JSC have any decision-making authority with respect to matters relating to the Product outside the Territory or outside the Field. For clarity, any decision of an Executive made in resolution of a dispute of the JSC pursuant to Section 3.1(d) shall be treated as decisions of the JSC for purposes of this Agreement. It is understood between the Parties that under no circumstances are the activities to be performed by the JSC intended or allowed to violate any Applicable Laws (including but not limited to any competition and/or antitrust law). + +ARTICLE 4. DEVELOPMENT AND REGULATORY ACTIVITIES + +4.1 Nonclinical and Clinical Studies and CMC Requirements. Promptly after the Effective Date, the JSC will discuss what nonclinical or clinical Development studies or CMC requirements are required to obtain Regulatory Approval of the Product for the treatment of Dravet syndrome and Lennox-Gastaut syndrome or would otherwise be useful for the Commercialization of the Product in the Field in the Territory, and if Zogenix agrees that such Development activities should be conducted, Zogenix will be responsible for conducting or having conducted all such Development activities. All non-clinical and clinical studies and CMC requirements completed or initiated by Zogenix as of the Effective Date or any such non-clinical and clinical studies and CMC requirements that are described in the initial version of Regulatory Plan, shall be conducted at Zogenix's own cost and expense, except for Distributor's payment + +13 + +US-DOCS\105216871.19 + +Source: ZOGENIX, INC., 10-Q, 5/9/2019 + + + + + +obligations under Section 6.2 and as otherwise expressly set forth herein. Any additional Territory-specific Development activities not set forth in the initial version of the Regulatory Plan, including those conducted at the suggestion or requirement of the MHLW or at [***] incurred by the Parties while conducting such Territory-specific Development activities. For clarity, Distributor shall have no right to conduct any Development activities for the Product unless otherwise agreed by Zogenix, and Zogenix shall have and retain all rights, in its sole discretion, to conduct any Development activities for the Product in the Territory outside the Field or any Development activities outside the Territory. + +4.2 Regulatory Activities. + +(a) Regulatory Plan. All regulatory Development activities with respect to the Product in the Field in the Territory will be conducted in accordance with a comprehensive regulatory plan (as amended in accordance with this Agreement, the "Regulatory Plan") which sets forth [***]. The initial version of the Regulatory Plan prepared by Zogenix and agreed to by Distributor will be attached to this Agreement as Exhibit 4.2(a) [***]. Any changes and updates to the Regulatory Plan must be approved by the JSC, subject to the decision-making procedures set forth in Section 3.1(d). As between the Parties, Zogenix will have the sole right and obligation to conduct (itself or through an Affiliate or Third Party) nonclinical and clinical studies concerning the Product in the Field in or for the Territory. Zogenix shall provide updates to the JSC concerning its progress under the Regulatory Plan and copies of final nonclinical and clinical study reports following completion of such Development studies. The JSC shall discuss such activities, including any updates on the progress and results thereof provided by Zogenix. During the Term, Zogenix shall use Commercially Reasonable Efforts to Develop the Product in the Field in the Territory in accordance with the Regulatory Plan and the terms of this Agreement. + +(b) Global Clinical Studies for New Indications. In the event that Zogenix intends to conduct a global (including the Territory) clinical trial of the Product for indications other than Dravet syndrome and Lennox-Gastaut syndrome (a "Global Study"), Zogenix will provide a summary of such Global Study to Distributor for review. In the event Distributor agrees to participate in a Global Study, Zogenix (or its designee) will be responsible for conducting such Global Study, including in the Territory, [***]. + +(c) Conduct of Regulatory Activities. Subject to Section 4.2(d), Zogenix shall be the marketing authorization holder for the Product in the Territory, and Zogenix shall be deemed the MAH Party and Distributor deemed the Non-MAH Party for purposes of this Agreement. Zogenix shall use Commercially Reasonable Efforts to [***]. In addition, Zogenix shall use Commercially Reasonable Effort to ensure [***] shall have the capabilities and obtain the necessary licenses for filing an MAA for the Product in the Territory in advance of the planned MAA submission date in the initial version of Regulatory Plan. + +(i) Regulatory Approval Activities. Zogenix will be responsible for filing for and obtaining Regulatory Approval of the Product in the Field in the Territory. In connection with such activities, Zogenix shall be responsible for preparing and filing INDs and + +14 + +US-DOCS\105216871.19 + +Source: ZOGENIX, INC., 10-Q, 5/9/2019 + + + + + +other necessary Regulatory Filings and for communicating with Regulatory Authorities in the Territory, except as otherwise mutually agreed to by the Parties in writing. Zogenix shall be responsible for preparing, filing and obtaining Regulatory Approval of the Product in the Field in the Territory, all in accordance with the Regulatory Plan. Zogenix shall ensure that the Distributor is involved in the planning and conduct of all such activities and the decisions with respect thereto, including discussions with any Regulatory Authority and any decisions regarding the labeling of the Product in the Field in the Territory. Zogenix shall consider in good faith all input provided by the Distributor with respect to such regulatory approval activities. In connection with such activities, Zogenix shall: (i) timely inform the Distributor of any scheduled meetings with Regulatory Authorities in the Territory with respect to the Product in the Field as soon as practicable in order to allow the Distributor time to convey its opinion on the matter and (ii) use all reasonable efforts to ensure that the Distributor is afforded the opportunity to participate in such meetings. Zogenix shall keep the Distributor regularly and fully informed of the preparation, Regulatory Authority review and approval of submissions and communications with Regulatory Authorities with respect to the Product in the Field in the Territory. In particular, Zogenix shall promptly provide the Distributor with copies of all material documents, information and correspondence received from or provided to a Regulatory Authority with respect to the Product in the Field in the Territory and, upon reasonable request, with copies of any other documents, reports and communications from or to any Regulatory Authority relating to the Product in the Field in the Territory, as well as written summaries of all material oral communications with a Regulatory Authority with respect to the Product in the Field in the Territory. + +(ii) Post-Approval Regulatory Activities. Following the filing of the MAA for the Product in the Territory, Zogenix and Distributor shall collaborate in good faith concerning a pricing negotiation strategy for the Product. Following Regulatory Approval of the Product in the Field in the Territory, Zogenix will be responsible for negotiating and obtaining initial pricing approval for the Product with the applicable Regulatory Authority in accordance with such strategy. The MAH Party shall use Commercially Reasonable Efforts to maintain Regulatory Approval for the Product in the Field in the Territory. The MAH Party shall be responsible for all interactions with Regulatory Authorities with respect to the Product in the Field in the Territory during the Term and maintaining Regulatory Approval of the Product in the Field in the Territory. In connection with such activities, the MAH Party shall: (i) timely inform the Non-MAH Party of any scheduled meetings with Regulatory Authorities in the Territory with respect to the Product in the Field as soon as practicable in order to allow the Non-MAH Party time to convey its opinion on the matter and (ii) use all reasonable efforts to ensure that the Non-MAH Party is afforded the opportunity to participate in such meetings. The MAH Party shall keep the Non-MAH Party regularly and fully informed of the preparation of submissions and communications with Regulatory Authorities with respect to the Product in the Field in the Territory. In particular, the MAH Party shall promptly provide the Non-MAH Party with copies of all material documents, information and correspondence received from or provided to a Regulatory Authority with respect to the Product in the Field in the Territory and, upon reasonable request, with copies of any other documents, reports and communications from or to any Regulatory Authority relating to the Product in the Field in the Territory, as well as written + +15 + +US-DOCS\105216871.19 + +Source: ZOGENIX, INC., 10-Q, 5/9/2019 + + + + + +summaries of all material oral communications with a Regulatory Authority with respect to the Product in the Field in the Territory. + +(A) Post-Marketing Surveillance Studies. The MAH Party shall be responsible for conducting any post-marketing surveillance studies, including those required by the MHLW or Applicable Law, that are required to maintain the MAA. The MAH Party shall ensure that Non-MAH Party is involved in the planning and conduct of all such post-approval activities and the decisions with respect thereto, including discussions with any Regulatory Authority and any decisions regarding any post-marketing surveillance studies with respect to, the Product in Field in the Territory. The MAH Party shall consider in good faith all input provided by Zogenix with respect to such regulatory activities. The MAH Party shall be responsible for filing any post-marketing surveillance studies with the MHLW. + +(B) Post-Approval Clinical Studies. Zogenix shall be responsible for conducting any post- approval clinical study that is requested upon or after approval or otherwise required by the MHLW as a condition of or to maintain the MAA approval. [***] shall bear [***] the total Out-of-Pocket Costs and Expenses incurred by the Parties while conducting any such post-approval clinical study that is for the Territory. Zogenix shall ensure that Distributor is involved in the planning and conduct of all such post-approval clinical studies and the decisions with respect thereto, including discussions with any Regulatory Authority and any decisions regarding any post-approval clinical study with respect to, the Product in Field in the Territory. Zogenix shall consider in good faith all input provided by the Distributor with respect to such post-approval clinical study. The MAH Party shall be responsible for filing any post-approval clinical studies with the MHLW. + +(C) Risk Management Plan. Zogenix shall be responsible for filing the initial risk management plan, if any, and approving any subsequent changes thereto. The MAH Party shall be responsible for conducting or having conducted any risk management plan requested or required by the MHLW. The Distributor shall support and implement the risk management plan and cooperate with Zogenix, and the Parties shall share and discuss the results and data generated from any risk management plan required by MHLW. The Distributor shall collaborate with Zogenix to ensure global alignment and consistency with the safety specifications, pharmacovigilance planning and risk management commitments and activities. + +(d) Transfer of Marketing Authorization. Zogenix shall be the marketing authorization holder of the Product in the Territory for the [***] following Regulatory Approval of the Product in the Territory. Thereafter, Zogenix shall transfer the marketing authorization for the Product in the Territory to Distributor within [***] following [***], unless delayed or prohibited by a Regulatory Authority or Applicable Law or otherwise agreed by the Parties. Upon the transfer of the marketing authorization of the Product in the Territory to Distributor, then Distributor shall be deemed the MAH Party for purposes of this Agreement and Zogenix shall be deemed the Non-MAH Party. + +(e) Ownership of Regulatory Information. The Parties acknowledge and agree that Zogenix shall retain the full unfettered ownership of the Data and drug dossier + +16 + +US-DOCS\105216871.19 + +Source: ZOGENIX, INC., 10-Q, 5/9/2019 + + + + + +submitted to the PMDA for the Regulatory Approval (including but not limited to safety & efficacy data, clinical data package, drug formulation and method of administration). Notwithstanding the foregoing, if Zogenix asks Distributor to solely conduct any additional Territory-specific Development activities which are urgently required by the MHLW for the MAA in the Territory, Distributor shall retain co-ownership with Zogenix of any Data generated solely by Distributor. Distributor hereby grants Zogenix an irrevocable, perpetual, royalty-free, fully paid-up, exclusive license with the right to grant sublicenses to use such Data solely generated and co-owned by Distributor outside of the Territory and a co-exclusive license in the Territory upon expiration or termination of the Agreement. + +(f) Regulatory Cooperation. Each Party shall cooperate in good faith with any reasonable requests for assistance from the other Party with respect to obtaining or maintaining Regulatory Approval of the Product in and outside the Territory, including by providing to the other Party all Information in its possession and Control that is requested by, or needed to respond to inquiries of, a Regulatory Authority with respect to the Product. + +4.3 Distributor's Right to Use and Reference. Distributor shall have the right to reference and use all Data and Regulatory Filings (including all Regulatory Approvals) for the purpose of fulfilling Distributor's obligations set forth in this Agreement. For clarity, in accordance with Section 4.2(b), [***]. + +4.4 Zogenix's Right to Use and Reference. In the event that Distributor is responsible for filing for and obtaining Regulatory Approval of the Product in the Field in the Territory or Distributor otherwise is the holder of the Regulatory Approval for the Product in the Territory, Zogenix and its Affiliates and Zogenix ex-Territory Distributors shall have the royalty-free right to reference and use all Data and Regulatory Filings (including all Regulatory Approvals), including all data contained or referenced therein, provided by or to Distributor under this Article 4, such reference and use in connection with filing for, obtaining and maintaining Regulatory Approval and commercializing the Product outside the Territory and in the Territory outside the Field. Distributor shall, on written request by Zogenix, provide, or shall cause its applicable Affiliate to provide, to Zogenix and to any specified Regulatory Authority a letter, in the form reasonably required by Zogenix, acknowledging and confirming that Zogenix and its Affiliates and/or Zogenix ex-Territory Distributors, as applicable, have the rights of reference to any such Regulatory Filing (including any such Regulatory Approval) for all purposes consistent with the Development, Regulatory Approval and commercialization of the Product outside the Territory and in the Territory outside the Field. Distributor shall not, and shall cause its Affiliates not to, transfer or disclose any Regulatory Filings (including any Regulatory Approval) relating to the Product in the Territory to any Third Party without the prior written consent of Zogenix, and in any such permitted transfer Distributor shall require the transferee to acknowledge in writing to Zogenix, Zogenix's (and its Affiliates' and Zogenix ex-Territory Distributors') rights of reference to and right to use all such Regulatory Filings (including Regulatory Approvals) as provided in this Section 4.3. + +4.5 Adverse Event Reporting. The MAH Party shall be responsible for the timely + +17 + +US-DOCS\105216871.19 + +Source: ZOGENIX, INC., 10-Q, 5/9/2019 + + + + + +reporting of all relevant adverse drug reactions/experiences, Product quality, Product complaints and safety data relating to the Product in the Field to the appropriate Regulatory Authorities in the Territory, all in accordance with Applicable Laws and requirements of Regulatory Authorities in the Territory. Zogenix (or its Affiliate, or Zogenix ex-Territory Distributors) shall be responsible for the timely reporting of all relevant adverse drug reactions/experiences, Product quality, Product complaints and safety data relating to the Product to the appropriate Regulatory Authorities outside the Territory. The details of such reporting shall be set forth in a pharmacovigilance agreement (as may be amended, the "Pharmacovigilance Agreement"), which will be agreed to by the Parties prior to the First Commercial Sale in the Territory. The Pharmacovigilance Agreement shall include, without limitation, governance provisions that set forth a process for communication and escalation, where necessary, of safety issues, label changes, and the like. Zogenix shall have the right to share any and all information received from Distributor under this Section 4.5, or the Pharmacovigilance Agreement, with Zogenix's Affiliates and Zogenix ex-Territory Distributors. The Pharmacovigilance Agreement shall identify the responsibilities of each Party regarding the information to be exchanged and the timeframes for such exchange, regulatory reporting, literature review, risk management, and labeling. Prior to executing the Pharmacovigilance Agreement, the Parties agree to work together in good faith to coordinate regarding pharmacovigilance activities with respect to the Product in the Field, including by exchanging Distributor's standard operating procedures and other Information relevant to such pharmacovigilance activities. + +4.6 Drug Safety and Pharmacovigilance System including Global Safety Database. Zogenix shall maintain a global system for monitoring and management of the risks associated with the Product. This system will provide signal management as well as the collection, identification, evaluation, and management of individual case safety reports and cumulative reports. As part of this pharmacovigilance system, Zogenix shall maintain the global safety database with respect to the Product, which shall serve as the reference database for all responses to safety queries and aggregate safety reports and be the main source for individual case safety report processing. Each Party shall cooperate, and shall cause its Affiliates, Sub-distributors and Zogenix ex-Territory Distributors, as applicable, to cooperate, in implementing and adhering to a pharmacovigilance mutual alert process with respect to the Product to comply with Applicable Laws, as set forth in the Pharmacovigilance Agreement. Notwithstanding anything to the contrary in this Agreement, Zogenix shall have final decision making authority over all issues that implicate global safety. + +4.7 Regulatory Audit. Each Party shall notify the other Party within [***] of receipt of any notice of a MHLW audit of any of such Party or its Affiliate or subcontractor with respect to the Product in the Territory. Notwithstanding the foregoing, if a Party is subject to an unannounced audit from the MHLW or receives a notice of an imminent audit from the MHLW, in each case with respect to the Product in the Territory, such Party shall notify the other Party promptly, but in any event within [***]. Such other Party shall have the right to have its or its Affiliates' or its subcontractors' employees or consultants participate in any audits or other inspections to the extent permitted by Applicable Law. To the extent permitted by Applicable Law, the audited Party shall provide the other Party with the copies of any resulting document or + +18 + +US-DOCS\105216871.19 + +Source: ZOGENIX, INC., 10-Q, 5/9/2019 + + + + + +action pertaining to the Product in the Territory that results from such audit within [***] of their receipt. + +4.8 Use of Subcontractors. To the extent that Distributor performs any of its regulatory or commercial activities under this Agreement through one or more subcontractors (including a Sub-distributor), if and as permitted under the terms of this Agreement, Distributor shall ensure that (a) none of Zogenix's rights hereunder are diminished or otherwise adversely affected as a result of such subcontracting, (b) the subcontractor assigns to Distributor all Distributor Inventions and all data generated by such subcontractor that, if Controlled by Distributor, would be included in the definition of Data, (c) the subcontractor undertakes in writing obligations of confidentiality and non-use regarding Confidential Information and compliance with the FCPA and other Applicable Laws that are substantially the same as those undertaken by the Parties pursuant to Article 8 and Section 10.2, (d) the subcontractor does not have an adverse history or reputation, (e) the use of the subcontractor will not cause the Zogenix Indemnitees to be in violation of the FCPA or any other Applicable Laws, and (f) the use of the subcontractor will not cause reputational harm to the Zogenix Indemnitees. In the event that Distributor performs any of its regulatory activities hereunder through a subcontractor, Distributor will at all times be fully responsible for the performance and payment of such subcontractor. + +4.9 Recalls. + +(a) In the event that the MHLW issues a request or orders a recall or takes similar action in connection with the Product in the Territory, or in the event either Party determines that an event, incident, or circumstance has occurred that may result in the need for a voluntary withdrawal of the Product in the Territory, the Party notified of such recall or desiring such voluntary withdrawal shall, within [***], advise the other Party thereof by telephone (and confirm by electronic mail or facsimile). Regarding any recall order or request from the MHLW, the Parties shall, to the extent practicable, discuss and endeavor to agree upon a plan for recalling the affected Product. Regarding any request for a voluntary withdrawal, the Parties shall discuss and endeavor to agree upon whether to voluntarily withdraw the Product in the Territory, and each Party shall review and consider in good faith all information provided by the other Party in connection with such discussion, including any assessment of safety and whether to withdraw the Product. + +(b) For all recalls requested or ordered by the MHLW, the MAH Party shall have the sole authority and responsibility to make all decisions with respect to such recall, subject to good faith consideration of the views of the non-MAH Party. For all voluntary withdrawals concerning quality defects, such as compliance, foreign substances, tampering and labeling defects, the MAH Party shall have the sole authority and responsibility to make all decisions with respect to such withdrawal, subject to good faith consideration of the views of non-MAH party. For all voluntary withdrawals concerning efficacy or safety, Zogenix shall have the sole authority and responsibility to make all decisions with respect to such withdrawal, subject to good faith consideration of the views of the Distributor. + +19 + +US-DOCS\105216871.19 + +Source: ZOGENIX, INC., 10-Q, 5/9/2019 + + + + + +(c) Distributor shall be responsible for conducting any such recall or withdrawal, shall use Commercially Reasonable Efforts to minimize the expenses of any such recall or withdrawal and shall keep Zogenix fully informed of all actions taken in conducting such recall or withdrawal. If a recall or withdrawal is due to Zogenix's negligence, willful misconduct or breach of this Agreement, Zogenix shall reimburse Distributor for all of the reasonable costs and expenses actually incurred by Distributor in connection with such recall or withdrawal, including, but not limited to, costs of personnel expenses of Distributor's sales representatives, fees for consultation with the Regulatory Authority in the Territory and travel expenses for consultation, and its actual reasonable Out-of-Pocket Costs and Expenses incurred while retrieving Product already delivered to customers, costs and expenses Distributor is required to pay for notification, shipping and handling charges, and such other costs as may be reasonably related to the recall or withdrawal. If a recall or withdrawal is due to Distributor's negligence, willful misconduct or breach of this Agreement, Distributor shall reimburse Zogenix for all the reasonable costs and expenses described above actually incurred by Zogenix in connection with such recall or withdrawal, including administration of the recall and such other actual costs as may be reasonably related to the recall or withdrawal in the Territory. If a recall or withdrawal results from a cause other than the negligence in the Territory, willful misconduct or breach of this Agreement of or by Distributor or Zogenix, the parties hereto [***]. Prior to any reimbursements pursuant to this Section, the party claiming any reimbursement shall provide the other party with reasonably acceptable documentation of all reimbursable costs and expenses. Neither Party will be liable to the other for Indirect Losses in connection with any recall or withdrawal pursuant to this Section. + +4.10 Development Expenses. Unless expressly stated otherwise, each Party shall bear its own Out-of-Pocket Costs and Expenses and any employee and overhead expenses incurred while performing its obligations under this Article 4. + +ARTICLE 5. COMMERCIALIZATION; SUPPLY: TRADEMARKS + +5.1 Commercialization of the Product. + +(a) Distributor Responsibilities. Distributor shall have the exclusive right to market, promote, sell, offer for sale, import, package and otherwise Commercialize the Product in the Field in the Territory, at its sole cost and expense, in accordance with Applicable Laws and the Commercialization Plan and subject to the terms and conditions of this Agreement. Without limiting the foregoing, Distributor will have the exclusive right and responsibility in the Field in the Territory for the following: + +(i) designing the Commercialization strategy and tactics for the Product, subject to JSC approval of the Commercialization Plan; + +(ii) undertaking all promotional activities for the Product; + +20 + +US-DOCS\105216871.19 + +Source: ZOGENIX, INC., 10-Q, 5/9/2019 + + + + + +(iii) establishing and implementing post-marketing surveillance studies for the Product in the Territory as required or recommended by a Regulatory Authority; + +(iv) receiving, accepting and filling orders for the Product from customers; + +(v) warehousing and distributing the Product to customers; + +(vi) controlling invoicing, order processing and collection of accounts receivable for sales of the Product; + +(vii) recording sales of the Product in the Territory in its books of account for sales; and + +(viii) providing results of sales of the Product in the Territory for purposes of periodic safety reports and exposure estimates. + +Distributor shall provide updates regularly to the JSC relating to Commercialization activities for the Product in the Field in the Territory. + +(b) Commercialization Plan. Distributor shall be responsible for the creation and implementation of an annual plan for the Commercialization of the Product in the Field in the Territory, which shall identify proposed plans to address potential challenges with respect to Commercialization of the Product in the Field in the Territory (the "Commercialization Plan"). The Commercialization Plan shall set forth in reasonable detail the major Commercialization activities planned for the Product in the Territory for the applicable period, including [***]. Distributor shall prepare and submit to the JSC the initial Commercialization Plan no later than [***] after MAA filing for the Product in the Field in the Territory for review and approval by the JSC in accordance with the decision-making procedures set forth in Section 3.1(d). Distributor shall submit subsequent updated Commercialization Plans to the JSC on an annual basis on or before the end of each Fiscal Year for review and approval by the JSC. Through the JSC, Distributor shall regularly consult with and provide updates to Zogenix regarding the Commercialization strategy for and the Commercialization of the Product in the Field in the Territory. + +(c) Diligence. During the Term, Distributor shall use Commercially Reasonable Efforts to market, promote, sell, offer for sale, import, package, distribute and otherwise commercialize the Product in the Field in the Territory in accordance with the Commercialization Plan and the terms of this Agreement. Without limiting the foregoing, Distributor shall Submit the first purchase order of the Product in the Field in the Territory to Zogenix within [***], achieve First Commercial Sale of the Product in the Field in the Territory as soon as reasonably practicable after the Product is first available for delivery to Distributor in the Territory, and use Commercially Reasonable Efforts to timely accomplish all the activities set forth in the Commercialization Plan. + +21 + +US-DOCS\105216871.19 + +Source: ZOGENIX, INC., 10-Q, 5/9/2019 + + + + + +(d) Distributor's Diligence Failure. + +(i) After [***] of the First Commercial Sale of the Product in the Territory, if Zogenix reasonably believes that Distributor has failed to achieve or maintain the diligence obligations set forth in Section 5.1(c), Zogenix shall provide written notice thereof to Distributor requesting a detailed written response concerning such failure and Distributor shall provide such detailed written response to Zogenix within [***] of the date of Zogenix's request. Zogenix's notice shall specify in reasonable detail the facts and circumstances constituting Zogenix's reasons for reaching such a determination. Following Zogenix's receipt of Distributor's response, the Parties shall promptly, and in any event within [***], discuss in good faith Distributor's obligations and its proposed actions to cure its failure to achieve its diligence obligations. Where remedy is possible and reasonably acceptable to Zogenix, Distributor shall use its Commercially Reasonable Efforts to start substantive steps within [***] of the date of Zogenix's notice to Distributor. If Distributor (A) fails to provide a detailed written response to Zogenix within [***] of the date of Zogenix's notice to Distributor, or (B) fails to use its Commercially Reasonable Efforts to start substantive steps to remedy such failure [***] of the date of Zogenix's notice to Distributor, Zogenix shall have the right, [***] effective upon written notice thereof by Zogenix to Distributor, to (1) [***] or (2) [***]. + +(ii) Any failure of Distributor to achieve the diligence obligations set forth in Section 5.1(c) shall not be considered Distributor's diligence failure as described in Section 5.1(d)(i) or a breach of this Agreement to the extent such failure was caused by (A) Zogenix's inability or failure to supply Product in accordance with the terms of the Supply Agreement, (B) any changes to the Regulatory Plan approved by the JSC in accordance with Section 4.2(a), or (C) any changes to the Commercialization Plan approved by the JSC in accordance with Section 5.1(b). + +(iii) This Section 5.1(d) shall not limit any other remedies or damages that Zogenix may have or seek under this Agreement or Applicable Laws. + +5.2 Supply. The Parties acknowledge and agree that Zogenix shall retain all rights to make and have made the Product in and for the Territory. Promptly after the Effective Date, the Parties shall commence negotiating a supply agreement containing reasonable and customary terms for an agreement of such type, governing Zogenix's supply of the Product to Distributor for sale in the Field in the Territory in accordance with the terms of this Agreement (as may be amended, the "Supply Agreement"), and shall use reasonable efforts to enter into the Supply Agreement within [***] after the Effective Date. Zogenix shall supply, or cause to be supplied, Product to Distributor in accordance with the Supply Agreement, and Distributor shall purchase all of its and its Affiliates' and Sub-distributors' requirements for the Product under the Supply Agreement. Distributor shall pay to Zogenix the Transfer Price for Product supplied under the Supply Agreement in accordance with Section 6.5. + +22 + +US-DOCS\105216871.19 + +Source: ZOGENIX, INC., 10-Q, 5/9/2019 + + + + + +5.3 Trademark Rights. + +(a) Product Trademarks. Subject to the terms and conditions of this Agreement, Zogenix hereby grants to Distributor an co-exclusive, royalty-free, limited right under the Product Trademarks solely to promote, market, sell, offer for sale, import, package and distribute the Product in Field in the Territory in accordance with the terms of this Agreement. + +(b) Zogenix Trademarks. Subject to the terms and conditions of this Agreement, Zogenix hereby grants to Distributor a non-exclusive, royalty-free, limited right under the Zogenix Trademarks solely to promote, market, sell, offer for sale, import, package and distribute the Product in Field in the Territory in accordance with the terms of this Agreement. + +5.4 Commercial Expenses. Unless expressly stated otherwise, each Party shall bear its own Out-of-Pocket Costs and Expenses and all employee and overhead expenses incurred while performing its obligations under this Article 5. + +ARTICLE 6. PAYMENTS + +6.1 Upfront Payment. Distributor shall pay to Zogenix, upon the receipt of the invoice from Zogenix after the Effective Date, a non-refundable, non-creditable upfront payment of Seven Million Five Hundred Thousand U.S. Dollars (US $7,500,000), which upfront payment shall consist of [***] in consideration for the exclusive right to distribute Product in the Territory for the treatment of Dravet syndrome and [***] in consideration for the exclusive right to distribute Product in the Territory for the treatment of Lennox-Gastaut syndrome. Distributor shall pay such payment to Zogenix within [***] of receipt of the invoice. + +6.2 Funding to Support Development of The Product. Distributor shall pay to Zogenix Twelve Million Five Hundred Thousand U.S. Dollars (US $12,500,000) for support of Zogenix's global nonclinical and clinical Development studies concerning the Product for Dravet syndrome and Lennox-Gastaut syndrome as it relates to Regulatory Approval of the Product in the Territory. For clarity, the Six Million Five Hundred Thousand U.S. Dollar (US $6,500,000) payment is intended to support studies previously conducted by Zogenix and that will be included in the MAA for the Territory. The remaining Six Million U.S. Dollars (US 6,000,000) in payments are intended to support those studies conducted by Zogenix and indicated as being paid for by Zogenix under the initial Regulatory Plan during [***] after the Effective Date, and such payments will be made [***]. The five (5) Development payments pursuant to this Section 6.2 will be made according to the following schedule: + +(a) Within [***] after the Effective Date, a non-refundable, non-creditable one-time payment of [***]; + +(b) Within [***] after the Effective Date, a non-refundable, non-creditable + +23 + +US-DOCS\105216871.19 + +Source: ZOGENIX, INC., 10-Q, 5/9/2019 + + + + + +one-time payment of [***]; + +(c) On the [***] of the Effective Date, a non-refundable, non-creditable one-time payment of [***]; + +(d) On the [***] of the Effective Date, a non-refundable, non-creditable one-time payment of [***]; and + +(e) On the [***] of the Effective Date, a non-refundable, non-creditable one-time payment of [***]. + +For clarity, each of the foregoing payments to be made by Distributor to Zogenix shall be payable within [***] of receipt of the invoice therefor from Zogenix. In the event that Zogenix terminates the Development the Product in the Territory for both Dravet syndrome and Lennox-Gastaut syndrome prior to the due date for any of the foregoing payments any such payment whose due date is after such termination shall no longer be due and payable to Zogenix. + +6.3 Regulatory Milestones. Distributor shall pay to Zogenix the non-refundable, non-creditable milestone payments as set forth in this Section 6.3. Upon the occurrence of each milestone event in this Section 6.3 Zogenix shall issue an invoice to Distributor for the amount of the milestone payment corresponding to such achieved milestone event, and Distributor shall pay to Zogenix such invoiced amount within [***] of its receipt from Zogenix. + +24 + +US-DOCS\105216871.19 + +Source: ZOGENIX, INC., 10-Q, 5/9/2019 + + + + + +Regulatory Milestone Event Milestone Payment [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] + +Each milestone payment set forth above shall be payable only once for the Product. For clarity, the total regulatory milestone payments set forth in this Section shall not exceed: (a) [***] if [***]; (b) [***] if [***]; and (c) [***]. + +6.4 Sales Milestones. For each Fiscal Quarter in which aggregate annual Net Sales first reach a threshold indicated in the table below, Distributor shall inform Zogenix within [***] that the aggregated annual Net Sales first reached such threshold. Zogenix shall issue an invoice to Distributor for the applicable milestone payment, and Distributor shall pay such invoice within [***] of its receipt from Zogenix: + +Annual Net Sales Level Milestone Payment + +First Fiscal Year in which aggregate annual Net Sales of the Product in the Field in the Territory exceed [***] [***] + +First Fiscal Year in which aggregate annual Net Sales of the Product in the Field in the Territory exceed [***] [***] + +First Fiscal Year in which aggregate annual Net Sales of the Products in the Field in the Territory exceed [***] [***] + +The milestone payments set forth in this Section 6.4 shall be additive, such that if all three (3) + +25 + +US-DOCS\105216871.19 + +Source: ZOGENIX, INC., 10-Q, 5/9/2019 + + + + + +milestone events are achieved in the same Fiscal Year, Distributor shall pay to Zogenix all three (3) milestone payments. + +6.5 Supply Payments. + +(a) Transfer Price. During the Distribution Term, and in addition to the consideration provided pursuant to Sections 6.1, 6.2, 6.3, and 6.4, for all Product supplied by Zogenix to Distributor under purchase orders submitted pursuant to the Supply Agreement in a particular Fiscal Year, Distributor shall pay to Zogenix a transfer price per unit of Product supplied (the "Transfer Price") equal to the sum of (i) [***] of the Fully-Burdened Manufacturing Cost per unit of Product for such Fiscal Year, (ii) [***] of aggregate annual Net Sales for such Fiscal Year, and (iii) the applicable markup percent of the applicable aggregate Net Price for such Fiscal Year, which markup percent is determined based on the incremental amount of Product ordered in such Fiscal Year as set forth below, as may be adjusted pursuant to Section 6.5(b): + +Amount of Product Supplied per Fiscal Year Net Price Markup + +For the portion of Product supplied less than or equal to the equivalent of [***] in Net Sales in such Fiscal Year [***] + +For the portion of Product supplied in excess of the equivalent of [***] in Net Sales and less than or equal to the equivalent of [***] in Net Sales in such Fiscal Year [***] + +For the portion of Product supplied in excess of the equivalent of [***] in Net Sales and less than or equal to the equivalent of [***] in Net Sales in such Fiscal Year [***] + +For the portion of Product supplied in excess of the equivalent of [***] in Net Sales in such Fiscal Year [***] + +The Net Sales equivalent described in the left column of the table above is calculated by determining the total number of units ordered in the applicable Fiscal Year and multiplying such number by the Net Price for such Fiscal Year. + +Following the expiration of the Distribution Term and during the remaining Term of this Agreement, for all Product supplied by Zogenix to Distributor under purchase orders submitted pursuant to the Supply Agreement in a particular Fiscal Year, Distributor shall pay to Zogenix the Transfer Price per unit of Product supplied shall be equal to the sum of (i) [***] of the Fully-Burdened Manufacturing Cost per unit of Product for such Fiscal Year, and (ii) [***] of aggregate annual Net Sales for such Fiscal Year. + +(b) Estimates. No later than [***] before the beginning of each Fiscal Year, starting with the Fiscal Year in which the First Commercial Sale is anticipated to occur, the Parties shall discuss in good faith and agree on a reasonable estimate of the Net Price for the Product for such Fiscal Year, which estimate will be based on a reasonable approximation of the aggregate Net Sales of Product to be recognized by Distributor and its Affiliates during such Fiscal Year. The agreed Net Price will be used to calculate the Transfer Price initially invoiced by Zogenix and payable by Distributor for the total number of units of the Product ordered by + +26 + +US-DOCS\105216871.19 + +Source: ZOGENIX, INC., 10-Q, 5/9/2019 + + + + + +and delivered to Distributor under the Supply Agreement during such Fiscal Year. + +(c) Reports. Within [***] after the end of each of the first three Fiscal Quarters in a Fiscal Year, starting with the Fiscal Quarter in which the First Commercial Sale occurs, Distributor shall deliver to Zogenix a report setting forth: (i) the total Net Sales of the Product in the Territory during such Fiscal Quarter, (ii) the detailed and total deductions from gross amounts invoiced to arrive at such Net Sales, (iii) the number of units of the Product sold in the Territory during such Fiscal Quarter and (iv) gross amounts invoiced for such sales. Within [***] after the end of each Fiscal Year, starting with the Fiscal Year in which the First Commercial Sale occurs, Distributor shall deliver to Zogenix a report setting forth: (A) the total Net Sales of the Product in the Territory during such Fiscal Year, (B) the detailed and total deductions from gross amounts invoiced to arrive at such Net Sales, (C) the number of units of the Product sold in the Territory during such Fiscal Year, (D) the gross amounts invoiced for such sales, (E) the calculation of actual Net Price for such Fiscal Year, (F) the total amount invoiced by Zogenix and paid by Distributor to Zogenix under the Supply Agreement for the total number of units of the Product ordered by and delivered to Distributor during such Fiscal Year, based on the estimated Net Price for such Fiscal Year, (G) the total amount actually owed to Zogenix for the total number of units of the Product ordered by and delivered to Distributor during such Fiscal Year based on the actual Net Price and (H) the difference between the amounts in clauses (F) and (G) (each such report, an "Annual Report"). + +(d) True-Up. For each Annual Report, if the amount in clause (G) of such Annual Report exceeds the amount in clause (F), then Distributor shall pay the amount in clause (H) to Zogenix concurrently with its delivery of such Annual Report to Zogenix. Otherwise, if the amount in clause (G) is less than the amount in clause (F), the amount in clause (H) will be credited against the subsequent payment(s) due from Distributor to Zogenix (or if no further payments will be due, paid by Zogenix to Distributor within [***] after Zogenix's receipt of such Annual Report from Distributor). In no event shall the effective Transfer Price for the Product in a Fiscal Year exceed [***] of the aggregate annual Net Sales of the Product in the Field in the Territory for such Fiscal Year. + +ARTICLE 7. PAYMENTS, BOOKS AND RECORDS + +7.1 Payment Method. All amounts specified to be payable under this Agreement are in United States dollars and shall be paid in United States dollars. All payments under this Agreement shall be made by bank wire transfer in immediately available funds to an account designated in writing by the payee Party or by such other means as directed by such Party in writing. Payments hereunder will be considered to be made as of the day on which they are received by the payee Party's designated bank. + +27 + +US-DOCS\105216871.19 + +Source: ZOGENIX, INC., 10-Q, 5/9/2019 + + + + + +7.2 Currency Conversion. For the purpose of calculating any sums due under this Agreement and determining the annual Net Sales levels in Section 6.5, conversion shall be made to U.S. dollars by using the arithmetic mean of the exchange rates for the purchase of United States dollars as published in The Wall Street Journal, Eastern Edition, for each Business Day in the Fiscal Quarter to which such calculations relate. + +7.3 Taxes. Any taxes imposed on Distributor or with respect to Distributor's business operations or activities hereunder, including any value added taxes, consumption, transfer, sales, use or other such taxes relating to the transactions contemplated herein, shall be borne by Distributor, and Distributor shall timely pay, and indemnify and hold harmless, Zogenix from and against all such taxes, including any penalties or interest associated therewith. If Distributor is required by Applicable Law to deduct and withhold taxes from a payment due and payable to Zogenix hereunder (excluding national, state or local taxes based on income to Zogenix), Distributor shall: (a) promptly notify Zogenix of such requirement; (b) make such required deduction and withholding from the corresponding payment; (c) pay to the relevant Governmental Authority the full amount required to be so deducted and withheld; and (d) promptly forward to Zogenix an official receipt or other documentation reasonably acceptable to Zogenix evidencing such payment to such Governmental Authority(ies). The Parties acknowledge and agree that it is their mutual objective and intent to minimize, to the extent feasible under the Applicable Laws, any taxes payable in connection with this Agreement, and shall reasonably cooperate each other in good faith in accordance with Applicable Laws to minimize any Taxes in connection with this Agreement, including provision of any tax forms and other information that may be reasonably necessary in order for the paying Party not to withhold tax or to withhold tax at a reduced rate under an applicable bilateral income tax treaty. + +7.4 Records. Distributor shall keep, and require its Affiliate and Sub-distributors to keep, complete, fair and true books of accounts and records for the purpose of (a) determining the amounts payable to Zogenix pursuant to this Agreement and the Supply Agreement and (b) ensuring that Distributor and its Affiliates and Sub-distributors do not otherwise cause any Zogenix Indemnitees to be in violation of the FCPA or other Applicable Laws. Such books and records shall be kept for such period of time required by Applicable Laws, but no less than three (3) years following the end of the Fiscal Year to which they pertain. Such records shall be subject to inspection in accordance with Section 7.5. + +7.5 Audits. Upon reasonable prior written notice, Distributor shall permit an independent, certified public accountant selected by Zogenix and reasonably acceptable to Distributor, which acceptance will not be unreasonably withheld or delayed, to audit or inspect those books or records of Distributor and its Affiliates and Sub-distributors that relate to Net Sales for the sole purpose of verifying: (a) the payments due hereunder and payments due under the Supply Agreement; (b) the withholding taxes, if any, required by Applicable Laws to be withheld; and (c) Distributor's compliance with Sections 10.1 and 10.2. Such accountant will disclose to Zogenix only the amount and accuracy of payments reported and actually paid or otherwise payable under this Agreement or the Supply Agreement, and will send a copy of the report to Distributor at the same time it is sent to Zogenix. Prompt adjustments (including + +28 + +US-DOCS\105216871.19 + +Source: ZOGENIX, INC., 10-Q, 5/9/2019 + + + + + +interest under Section 7.6 for underpaid amounts) shall be made by the Parties to reflect the results of such audit. Such inspections may be made no more than once each Fiscal Year (unless an audit or inspection reveals a material inaccuracy in reports made under this Agreement, in which case it may be repeated within such Fiscal Year), and during normal business hours, with reasonable efforts to minimize disruption of Distributor's normal business activities. Inspections conducted under this Section 7.5 shall be at the expense of Zogenix, unless a variation or error producing an underpayment in amounts payable exceeding [***] of the amount paid for a period covered by the inspection is established, in which case all reasonable costs relating to the inspection for such period shall be paid by Distributor. Absent manifest error, the accountant's report will be final and binding on the Parties. + +7.6 Late Payments. In the event that any payment due under this Agreement or the Supply Agreement is not made when due, the payment shall accrue interest from the date due at a rate per annum equal to [***] above the U.S. Prime Rate (as set forth in The Wall Street Journal, Eastern U.S. Edition) for the date on which payment was due, calculated daily on the basis of a 365-day year, or similar reputable data source; provided that in no event shall such rate exceed the maximum legal annual interest rate. The payment of such interest shall not limit a Party from exercising any other rights it may have as a consequence of the lateness of any payment. + +ARTICLE 8. CONFIDENTIALITY + +8.1 Confidential Information. Except to the extent expressly authorized by this Agreement or otherwise agreed in writing by the Parties, the Parties agree that during the Term and for [***] thereafter, the receiving Party (the "Receiving Party") shall keep confidential and shall not publish or otherwise disclose or use for any purpose other than as provided for in this Agreement or the Supply Agreement any Information or materials furnished to it or its Affiliates by or on behalf of the other Party (the "Disclosing Party") or its Affiliates pursuant to this Agreement, the Supply Agreement, the Confidentiality Agreement or any other written agreement between the Parties or their Affiliates, in any form (written, oral, photographic, electronic, magnetic, or otherwise), including all information concerning the Product and any other technical or business information of whatever nature (collectively, "Confidential Information" of the Disclosing Party). All Zogenix Technology (including, without limitation, all Product Inventions and Data) shall be deemed the Confidential Information of Zogenix. Distributor Inventions shall be deemed the Confidential Information of Distributor. Joint Inventions shall be deemed the Confidential Information of each of Zogenix and Distributor. Each Party may use the Confidential Information of the other Party only to the extent required to accomplish the purposes of this Agreement or the Supply Agreement (including to exercise its rights or fulfill its obligations under this Agreement or the Supply Agreement). Each Party will use at least the same standard of care as it uses to protect proprietary or confidential information of its own (but in no event less than reasonable care) to ensure that its employees, agents, consultants and other representatives do not disclose or make any unauthorized use of the + +29 + +US-DOCS\105216871.19 + +Source: ZOGENIX, INC., 10-Q, 5/9/2019 + + + + + +Confidential Information of the other Party. Each Party will promptly notify the other upon discovery of any unauthorized use or disclosure of the Confidential Information of the other Party. + +8.2 Exceptions. Notwithstanding Section 8.1 above, the obligations of confidentiality and non‑use shall not apply to information that the Receiving Party can prove by competent written evidence: (a) is now, or hereafter becomes, through no act or failure to act on the part of the Receiving Party or any of its Affiliates, generally known or available; (b) is known by the Receiving Party or any of its Affiliates, other than under an obligation of confidentiality to the Disclosing Party, at the time of receiving such information; (c) is hereafter lawfully furnished to the Receiving Party or any of its Affiliates by a Third Party, which Third Party did not receive such information directly or indirectly from the Disclosing Party under an obligation of confidence; (d) is independently discovered or developed by the Receiving Party or any of its Affiliates without the use of Confidential Information belonging to the Disclosing Party; or (e) is the subject of a written permission to disclose provided by the Disclosing Party. + +8.3 Permitted Disclosures. Notwithstanding the provisions of Section 8.1, the Receiving Party may disclose Confidential Information of the Disclosing Party as expressly permitted by this Agreement or if and to the extent such disclosure is reasonably necessary in the following instances: + +(a) filing or prosecuting Patents as permitted by this Agreement; + +(b) prosecuting or defending litigation as permitted by this Agreement; + +(c) complying with applicable court orders, governmental regulations, applicable subpoenas or reasonable requests issued by governmental authorities in relation to compliance with the FCPA and other Applicable Laws; + +(d) in the case of Zogenix, disclosure under terms of confidentiality no less stringent than under this Agreement to potential or actual Zogenix ex-Territory Distributors; + +(e) disclosure to its and its Affiliates' contractors, employees and consultants, in each case who need to know such information for filing for, obtaining and maintaining Regulatory Approvals and Commercialization of Product in the Territory in accordance with this Agreement and manufacturing and supplying of Product in accordance with the Supply Agreement (or, in the case of disclosures by Zogenix, who need to know such information for the Development, manufacture and commercialization of the Product outside the Field or Territory), on the condition that any such Third Parties agree to be bound by confidentiality and non-use obligations that are no less stringent than those confidentiality and non-use provisions contained in this Agreement; and + +(f) disclosure to Third Parties in connection with due diligence or similar investigations by such Third Parties, and disclosure to potential Third Party investors in confidential financing documents, provided, in each case, that any such Third Party agrees to be + +30 + +US-DOCS\105216871.19 + +Source: ZOGENIX, INC., 10-Q, 5/9/2019 + + + + + +bound by confidentiality and non-use obligations that are no less stringent than those confidentiality and non-use provisions contained in this Agreement. + +Notwithstanding the foregoing, in the event a Party is required to make a disclosure of the other Party's Confidential Information pursuant to Section 8.3(b) or (c), it will, except where impracticable, give reasonable advance notice to the other Party of such disclosure and use efforts to secure confidential treatment of such information at least as diligent as such Party would use to protect its own confidential information, but in no event less than reasonable efforts. In any event, the Parties agree to take all reasonable action to avoid disclosure of Confidential Information hereunder. + +8.4 Confidentiality of this Agreement and its Terms. Except as otherwise provided in this Article 8, each Party agrees not to disclose to any Third Party the existence of this Agreement or the terms of this Agreement without the prior written consent of the other Party, except that each Party may disclose the terms of this Agreement that are not otherwise made public as contemplated by Section 8.5 as permitted under Section 8.3. + +8.5 Public Announcements. + +(a) As soon as practicable following the Effective Date, the Parties may each issue a press release in English and/or Japanese, in the form attached hereto as Exhibit 8.5(a), announcing the existence of this Agreement. Except as required by Applicable Laws (including disclosure requirements of the SEC or any stock exchange on which securities issued by a Party or its Affiliates are traded), neither Party shall make any other public announcement concerning this Agreement or the subject matter hereof without the prior written consent of the other, which shall not be unreasonably withheld or delayed; provided that each Party may make any public statement in response to questions by the press, analysts, investors or those attending industry conferences or financial analyst calls, or issue press releases, so long as any such public statement or press release is not inconsistent with prior public disclosures or public statements approved by the other Party pursuant to this Section 8.5 and does not reveal non‑public information about the other Party; and provided further that Zogenix may make public statements regarding the results of Development and Commercialization activities in the Territory. In the event of a public announcement required by Applicable Laws, to the extent practicable under the circumstances, the Party making such announcement shall provide the other Party with a copy of the proposed text of such announcement sufficiently in advance of the scheduled release to afford such other Party a reasonable opportunity to review and comment upon the proposed text. + +(b) The Parties will coordinate in advance with each other in connection with the filing of this Agreement (including redaction of certain provisions of this Agreement) with the SEC or any stock exchange on which securities issued by a Party or its Affiliate are traded, and each Party will use reasonable efforts to seek confidential treatment for the terms proposed to be redacted; provided that each Party will ultimately retain control over what information to disclose to the SEC or other applicable government body, and provided further that the Parties will use their reasonable efforts to file redacted versions with any governing bodies which are consistent with redacted versions previously filed with any other governing bodies. Other than + +31 + +US-DOCS\105216871.19 + +Source: ZOGENIX, INC., 10-Q, 5/9/2019 + + + + + +such obligation, neither Party (nor its Affiliates) will be obligated to consult with or obtain approval from the other Party with respect to any filings to the SEC or any other government body governing a stock exchange. + +(c) Except as expressly permitted in this Agreement or as required by Applicable Laws, neither Party may use the other Party's trademarks, service marks or trade names, or otherwise refer to or identify that other Party in marketing or promotional materials, press releases, statements to news media or other public announcements, without the other Party's prior written consent, which that other Party may grant or withhold in its sole discretion. + +8.6 Publication. At least [***] prior to Distributor or its Affiliates or Sub-distributors publishing, publicly presenting, and/or submitting for written or oral publication a manuscript, presentation, abstract, marketing document or the like that includes Information relating to the Product that has not been previously published, Distributor shall provide to Zogenix's Alliance Manager a draft copy thereof for Zogenix's review (unless Distributor is required by Applicable Laws to publish such Information sooner, in which case Distributor shall provide such draft copy to Zogenix's Alliance Manager as much in advance of such publication as possible). Distributor shall consider in good faith any comments provided by Zogenix during such [***] period, and in the event that Zogenix raises any concerns the matter shall be raised at the JSC; provided that Distributor shall, at Zogenix's reasonable request, cease such proposed publication or remove therefrom any information requested by Zogenix. The contribution of each Party shall be noted in all publications or presentations by acknowledgment or co-authorship, whichever is appropriate. + +8.7 Prior Non-Disclosure Agreements. As of the Effective Date, the terms of this Article 8 shall supersede any prior non-disclosure, secrecy or confidentiality agreement between the Parties (or their Affiliates) dealing with the subject of this Agreement, including the Confidentiality Agreement, but excluding any terms of the Supply Agreement. Any information disclosed under such prior agreements shall be deemed disclosed under this Agreement. + +8.8 Equitable Relief. Given the nature and value of the Confidential Information and the competitive damage and irreparable harm that would result to a Party upon unauthorized disclosure, use or transfer of its Confidential Information to any Third Party, the Parties agree that monetary damages may not be a sufficient remedy for any breach of this Article 8. If the Receiving Party becomes aware of any breach or threatened breach of this Article 8 by the Receiving Party or a Third Party to whom the Receiving Party disclosed the Disclosing Party's Confidential Information, the Receiving Party promptly shall notify the Disclosing Party and cooperate with the Disclosing Party to regain possession of its Confidential Information and prevent any further breach. In addition to all other remedies, a Party shall be entitled to seek specific performance and injunctive and other equitable relief as a remedy for any breach or threatened breach of this Article 8 without furnishing proof of actual damages or posting a bond. + +ARTICLE 9. + +32 + +US-DOCS\105216871.19 + +Source: ZOGENIX, INC., 10-Q, 5/9/2019 + + + + + +INTELLECTUAL PROPERTY OWNERSHIP AND ENFORCEMENT + +9.1 Ownership of Intellectual Property. + +(a) Zogenix Technology. Zogenix shall retain all right, title and interest in and to the Zogenix Technology. + +(b) Inventions and Intellectual Property Rights. + +(i) Ownership. Zogenix shall own the entire right, title and interest in and to any and all Inventions discovered, developed, identified, made, conceived or reduced to practice solely by or on behalf of Zogenix under or in connection with this Agreement, including in the course of conducting regulatory activities or Commercialization of the Product in the Field in the Territory, whether or not patented or patentable, together with any and all intellectual property rights in any such Inventions, including Patents that claim or disclose any such Inventions (collectively, the "Product Invention"). Distributor shall own the entire right, title and interest in and to any and all Inventions discovered, developed, identified, made, conceived or reduced to practice solely by Distributor or its Affiliates or Sub-distributors or its other subcontractors in the Territory and under or in connection with this Agreement, including in the course of conducting regulatory activities or Commercialization of the Product in the Field in the Territory, whether or not patented or patentable, together with any and all intellectual property rights in any such Inventions, including Patents that claim or disclose any such Inventions (collectively, the "Distributor Invention"). Zogenix and Distributor shall each own an undivided right, title, and interest in and to any and all Inventions discovered, developed, identified, made, conceived or reduced to practice jointly by or on behalf of Zogenix under or in connection with this Agreement and by Distributor or its Affiliates or Sub-distributors or its other subcontractors in the Territory and under or in connection with this Agreement ("Joint Invention"). In the event that either Zogenix or Distributor intends to file a patent application containing a Joint Invention, such Party shall promptly notify the other Party of such intention and shall provide a draft of any such patent application to such other Party [***] before filing such patent application with any patent office and the Parties shall negotiate in good faith concerning the terms and conditions of a joint patent agreement. + +(ii) Disclosure, License. Distributor shall, and shall cause its Affiliates and Sub-distributors and other subcontractors to, promptly disclose any Distributor Inventions to Zogenix in writing promptly following its discovery, development, identification, making, conception or reduction to practice by the Distributor, its Affiliates, Sub-distributors or other subcontractors. Distributor hereby grants Zogenix an irrevocable, perpetual, world-wide, royalty-free, fully paid-up, non-exclusive license with the right to grant sublicenses under such Distributor Inventions and any patents or patent applications claiming or disclosing such Distributor Inventions. In the event that Distributor intends to file a patent application containing Distributor Inventions, Distributor shall promptly notify Zogenix of such intention and shall provide a draft of any such patent application to Zogenix at least [***] before filing such patent application with any patent office. Distributor shall have the sole right to file for patent protection for such Distributor Inventions only if Zogenix does not provide a written objection + +33 + +US-DOCS\105216871.19 + +Source: ZOGENIX, INC., 10-Q, 5/9/2019 + + + + + +within [***] of being provided with a draft of such patent application. + +(c) Personnel Obligations. Prior to receiving any Confidential Information or beginning work under this Agreement, Distributor shall ensure that each employee, agent or contractor of Distributor or its Affiliates or Sub-distributors shall be bound in writing by non-disclosure and Invention assignment obligations that are consistent with the obligations of the Parties in Article 8 and this Article 9, including obligations to: (a) promptly report any invention, discovery, process or other intellectual property right; (b) assign to Distributor or Zogenix all of his, her or its right, title and interest in and to any invention, discovery, process or other intellectual property right; (c) cooperate in the preparation, filing, prosecution, maintenance and enforcement of any patent and patent application; (d) perform all acts and sign, execute, acknowledge and deliver any and all documents required for effecting the obligations and purposes of this Agreement; and (e) abide by the obligations of confidentiality and non-use set forth in Article 8. It is understood and agreed that such non-disclosure and invention assignment agreements need not reference or be specific to this Agreement. + +9.2 Zogenix Patent Prosecution and Maintenance. During the term of this Agreement, Zogenix shall use Commercially Reasonable Efforts to prepare, file, prosecute (including any reissues, re-examinations, post-grant proceedings, requests for patent term extensions, interferences, and defense of oppositions), at Zogenix's sole discretion and cost. If there is any material change in Zogenix Patents specified in Exhibit 1.74, Zogenix shall provide Distributor with updated information concerning the Zogenix Patent in a timely manner. + +9.3 Infringement by Third Parties. + +(a) Notice. In the event that either Zogenix or Distributor becomes aware of any infringement or threatened infringement by a Third Party in the Territory of any Zogenix Patents, it shall notify the other Party in writing to that effect. Any such notice shall include evidence to support an allegation of infringement or threatened infringement by such Third Party. + +(b) Control of Action. Each Party shall share with the other Party all information available to it regarding such alleged or threatened infringement by a Third Party. Zogenix shall have the sole right, but not the obligation, to bring and control any action or proceeding with respect to alleged or threatened infringement by a Third Party in the Territory of any Zogenix Patent at Zogenix's cost and expense. If Zogenix elects to commence a suit to enforce the applicable Zogenix Patent against such infringements, then Distributor shall have the right to join such enforcement action, if permitted by Applicable Law, upon notice to Zogenix and be represented by a counsel of its own choice at its own cost and expense. Zogenix shall keep Distributor reasonably informed of any such actions or proceedings and consider in good faith any comments or requests made by Distributor, and the Parties shall cooperate and consult with each other in strategizing regarding any such action or proceeding, provided that Zogenix shall control and have the right to make all final decisions (regardless of whether or not Distributor is a party to such action or proceeding) regarding all matters in the preparation and conduct of any such action or proceeding. Each Party shall cooperate fully with the other Party with respect to actions or proceedings under this Section 9.3, including being joined as a party + +34 + +US-DOCS\105216871.19 + +Source: ZOGENIX, INC., 10-Q, 5/9/2019 + + + + + +plaintiff in any such action or proceeding and providing access to relevant documents and other evidence and making its employees available at reasonable business hours, with the costs of such cooperation to be included as shared costs for actions or proceedings brought hereunder. + +(c) Recoveries. Any monetary recovery resulting from actions or proceedings under this Section 9.3 will be allocated as follows: each of Distributor and Zogenix first will be reimbursed, out of such recovery, for its reasonable and verifiable costs and expenses with respect to such action or proceeding (such reimbursement to be pro-rata based on the Parties' relative costs and expenses if the recovery is not sufficient to reimburse both Parties fully) with any remainder being (i) allocated [***] if[***] or (ii) allocated [***] if [***]. + +9.4 Third Party Intellectual Property Rights. + +(a) If either Party becomes aware of a Patent in the Territory owned by a Third Party that it believes will, or may, be infringed by the manufacture, importation, Development or Commercialization of the Product in the Field in the Territory as contemplated by this Agreement, such Party shall notify the other Party of such Patent. The Parties then shall discuss the matter and seek in good faith to agree on whether the Parties should take a license under such Patent, and if so, on what terms; provided, that if the Parties are unable to agree after a reasonable period, [***], of good faith discussions, then Zogenix shall have the right to obtain such a license on such terms as it determines in its sole discretion and at its own cost and expense. Provided, however, in the event that Zogenix elects not to seek or fails to obtain a license under such Patent, Distributor shall have the right to obtain such a license with prior written notice to Zogenix. + +(b) Each Party shall promptly notify the other Party in writing of any allegation by a Third Party that the activity of either Party pursuant to this Agreement or the Supply Agreement infringes or may infringe the intellectual property rights of such Third Party. Zogenix shall have the sole right to control any defense of any such claim involving alleged infringement of Third Party rights, at Zogenix's sole cost and expense and by counsel of its own choice; provided however that Distributor may participate in the defense, at its own expense, to be represented in any such action by counsel of its own choice. In any event, Zogenix agrees to keep Distributor reasonably informed of all material developments in connection with any such action. Zogenix agrees not to settle such infringement or make any admissions or assert any position in such action in a manner that would materially adversely affect the rights or interest of Distributor, without the prior written consent of Distributor, which shall not be unreasonably withheld, delayed or conditioned. Neither Party shall enter into any settlement or compromise of any action under this Section 9.4 which would in any manner alter, diminish, or be in derogation of the other Party's rights under this Agreement without the prior written consent of such other Party, which shall not be unreasonably withheld, delayed or conditioned. + +9.5 Patent Term Restoration. At the request of Zogenix, the Parties shall cooperate with each other in obtaining patent term restoration, extensions and/or any other extensions of the Zogenix Patents as available under Applicable Laws, subject to Zogenix's rights under Section 9.2. Zogenix shall bear the cost for such patent term restoration and/or any other + +35 + +US-DOCS\105216871.19 + +Source: ZOGENIX, INC., 10-Q, 5/9/2019 + + + + + +extensions of the Zogenix Patent. + +9.6 Patent Marking. Distributor shall, and shall require its Affiliates and Sub-distributors to, mark all Product sold in the Territory (in a reasonable manner consistent with industry custom and practice and Applicable Law) with appropriate patent numbers or indicia to the extent permitted by Applicable Laws, if such markings impact recoveries of damages or equitable remedies available with respect to infringements of patents. + +9.7 Zogenix Trademarks. All packaging, promotional materials, package inserts, and labeling for the Product in the Field in the Territory shall bear, free of charge, one or more house Trademarks chosen and owned by Zogenix, including the Zogenix name and logo set forth in Exhibit 9.7 (each, a "Zogenix Trademark"). Zogenix or its Affiliates shall own all right, title, and interest in and to all Zogenix Trademarks, all corresponding trademark applications and registrations thereof, and all common law rights thereto. Zogenix shall, at Zogenix's sole expense, have sole control over the registration, prosecution, maintenance, enforcement and defense of the Zogenix Trademarks. All goodwill of the business associated with or symbolized by the Zogenix Trademarks shall inure to the benefit of Zogenix. Distributor acknowledges Zogenix's exclusive ownership of the Zogenix Trademarks and agrees not to take any action inconsistent with such ownership. Distributor shall provide Zogenix with samples of any advertising and promotional materials in original language that incorporate the Zogenix Trademarks prior to distributing such materials for use. Distributor shall comply with reasonable policies provided by Zogenix from time to time to maintain the goodwill and value of the Zogenix Trademarks. Distributor shall not, and shall cause its Affiliates not to, (i) use, seek to register, or otherwise claim rights in any Trademark that is confusingly similar to, misleading or deceptive with respect to, or that materially dilutes, any of the Zogenix Trademarks, or (ii) knowingly do, cause to be done, or knowingly omit to do any act, the doing, causing or omitting of which endangers, undermines, impairs, destroys or similarly affects, in any material respect, the validity or strength of any of the Zogenix Trademarks (including any registration or pending registration application relating thereto) or the value of the goodwill pertaining to any of the Zogenix Trademarks. + +9.8 Product Trademarks. + +(a) Selection and Ownership of Product Trademarks. All packaging, promotional materials, package inserts, and labeling for the Product in the Field in the Territory shall bear one or more Trademarks that pertain specifically to the Product, including the Trademarks in existence as of the Effective Date as set forth in Exhibit 9.8 (each, a "Product Trademark"). If the Product Trademarks in existence as of the Effective Date are not eligible for trademark protection or for use in connection with the Product in the Field in the Territory or if the Parties agree that alternative or additional Trademarks may be beneficial, Distributor may investigate appropriate Trademarks for the Product in the Territory. If the Parties identify and agree on alternative or additional Trademarks for the Product in the Territory, Zogenix shall use Commercially Reasonable Efforts to register such Trademark(s) for the Product in the Field in the Territory. Zogenix or its Affiliates shall own all right, title, and interest in and to all Product + +36 + +US-DOCS\105216871.19 + +Source: ZOGENIX, INC., 10-Q, 5/9/2019 + + + + + +Trademarks, all corresponding trademark applications and registrations thereof, and all common law rights thereto. All goodwill of the business associated with or symbolized by the Product Trademarks shall inure to the benefit of Zogenix. Distributor acknowledges Zogenix's exclusive ownership of the Product Trademarks and agrees not to take any action inconsistent with such ownership. + +(b) Maintenance and Prosecution of Product Trademarks. Zogenix shall, at Zogenix's sole expense, control the registration, prosecution and maintenance of the Product Trademarks in the Territory; provided, that Zogenix shall keep Distributor reasonably informed of Zogenix's actions with respect thereto and shall consider in good faith any reasonable comments made by Distributor with respect thereto. + +(c) Use of Product Trademarks. Distributor shall promote, market, sell, offer for sale, import, distribute and otherwise commercialize the Product in the Field in the Territory only under the Product Trademarks. Distributor shall provide Zogenix with samples of any advertising and promotional materials that incorporate the Product Trademarks prior to distributing such materials for use. Distributor shall comply with reasonable policies provided by Zogenix from time to time to maintain the goodwill and value of the Product Trademarks. Distributor shall not, and shall cause its Affiliates not to, (i) use, seek to register, or otherwise claim rights in the Territory in any Trademark that is confusingly similar to, misleading or deceptive with respect to, or that materially dilutes, any of the Product Trademarks, or (ii) knowingly do, cause to be done, or knowingly omit to do any act, the doing, causing or omitting of which endangers, undermines, impairs, destroys or similarly affects, in any material respect, the validity or strength of any of the Product Trademarks (including any registration or pending registration application relating thereto) or the value of the goodwill pertaining to any of the Product Trademarks. + +(d) Enforcement of Product Trademarks. Zogenix shall have the first right, but not the obligation, at Zogenix's expense, to enforce and defend the Product Trademarks in the Territory, including (i) defending against any alleged, threatened or actual claim by a Third Party that the use of the Product Trademarks in the Territory infringes, dilutes or misappropriates any Trademark of that Third Party or constitutes unfair trade practices, or any other claims that may be brought by a Third Party against a Party in connection with the use of or relating to Product Trademarks in the Territory with respect to the Product and (ii) taking such action as Zogenix deems necessary against a Third Party based on any alleged, threatened or actual infringement, dilution or misappropriation of, or unfair trade practices or any other like offense relating to, the Product Trademarks in the Territory by a Third Party. If Zogenix elects not to enforce or defend the Product Trademarks in any such instance, then Zogenix shall promptly so notify Distributor and Distributor shall have the right, but not the obligation, at its expense, to do so. Each Party shall provide to the other Party all reasonable assistance requested by such first Party in connection with any such action, claim or suit under this Section 9.8(d), including allowing such first Party access to such other Party's documents and to such other Party's personnel who may have possession of relevant information. + +37 + +US-DOCS\105216871.19 + +Source: ZOGENIX, INC., 10-Q, 5/9/2019 + + + + + +(e) Distributor's Housemarks. In addition to the Product Trademarks, Distributor shall have the right to brand the Product in the Territory with those trademarks of Distributor that are associated with Distributor's name or identity and are pre-approved in writing by Zogenix ("Distributor Housemarks"). Distributor shall own all rights in the Distributor Housemarks, and all goodwill in the Distributor Housemarks shall accrue to Distributor. Distributor and its Affiliates and Sub-distributor shall not use any trademarks, other than the Zogenix Trademarks, Product Trademarks and the approved Distributor Housemarks, in connection with the Commercialization of the Product in the Field in the Territory, without the prior written consent of Zogenix. + +ARTICLE 10. REPRESENTATIONS, WARRANTIES AND COVENANTS; LIMITATION OF LIABILITY + +10.1 Mutual Representations, Warranties and Covenants. Each Party hereby represents and warrants to the other Party, as of the Effective Date, as follows: + +(a) Duly Organized. Such Party is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation, is qualified to do business and is in good standing as a foreign corporation in each jurisdiction in which the conduct of its business or the ownership of its properties requires such qualification and failure to have such would prevent such Party from performing its obligations under this Agreement. + +(b) Due Authorization; Binding Agreement. The execution, delivery and performance of this Agreement by such Party have been duly authorized by all necessary corporate action. This Agreement is a legal and valid obligation binding on such Party and enforceable in accordance with its terms and does not: (i) to such Party's knowledge and belief, violate any law, rule, regulation, order, writ, judgment, decree, determination or award of any court, governmental body or administrative or other agency having jurisdiction over such Party; nor (ii) conflict with, or constitute a default under, any agreement, instrument or understanding, oral or written, to which such Party is a party or by which it is bound. + +(c) Consents. Such Party has obtained, or is not required to obtain, the consent, approval, order or authorization of any Third Party, or has completed, or is not required to complete, any registration, qualification, designation, declaration or filing with any Regulatory Authority or governmental authority in connection with the execution and delivery of this Agreement and the performance by such Party of its obligations under this Agreement. + +(d) No Conflicting Grant of Rights. Such Party has the right to grant the rights contemplated under this Agreement and has not, and will not during the Term, grant any right to any Third Party that would conflict with the rights granted to the other Party hereunder. + +(e) Debarment. Such Party is not debarred or disqualified under the United + +38 + +US-DOCS\105216871.19 + +Source: ZOGENIX, INC., 10-Q, 5/9/2019 + + + + + +States Federal Food, Drug and Cosmetic Act or comparable Applicable Laws in the Territory and it does not, and will not during the Term, employ or use the services of any Person who is debarred or disqualified, in connection with activities relating to the Product. In the event that either Party becomes aware of the debarment or disqualification or threatened debarment or disqualification of any Person providing services to such Party, including the Party itself and its Affiliates or Sub-distributors, that directly or indirectly relate to activities under this Agreement, such Party shall immediately notify the other Party and shall cease employing, contracting with, or retaining any such person to perform any services under this Agreement. + +(f) Comply with Applicable Laws. In the performance of its obligations hereunder, such Party shall comply and shall cause its and its Affiliates' employees and contractors to comply with all Applicable Laws. + +(g) Anti-Corruption. Such Party shall not, directly or indirectly through Third Parties, pay, promise or offer to pay, or authorize the payment of, any money or give any promise or offer to give, or authorize the giving of anything of value to a Public Official or Entity or other Person for purpose of obtaining or retaining business for or with, or directing business to, any Person, including, without limitation, Zogenix or Distributor. Without any limitation to the foregoing, such Party has not and shall not directly or indirectly promise, offer or provide any corrupt payment, gratuity, emolument, bribe, kickback, illicit gift or hospitality or other illegal or unethical benefit to a Public Official or Entity or any other Person. + +(h) Accuracy of Materials. All due diligence materials that such Party has provided and will provide to the other Party were and will be to the knowledge of such Party accurate, truthful, and complete at the time such materials are provided to the other Party, and such Party has not and will not intentionally omit any material facts requested by the other Party. + +(i) Notification for Violation of Applicable Laws. Such Party shall immediately notify the other Party if it has any information or suspicion that there may be a violation of the FCPA or any other Applicable Law in connection with the performance of this Agreement or the sale of the Product in the Territory. + +(j) No Pubic Officials. No owner, shareholder (direct or beneficial), officer, director, employee, third-party representative, agent, or other individual with any direct or indirect beneficial interest in such Party or its Affiliates or, to its knowledge, in its Sub-distributors or other contractors, or any immediate family relation of any such Person (collectively, "Interested Persons"), is a Public Official or Entity. Such Party shall notify the other Party immediately if during the Term (i) any Interested Person becomes a Public Official or Entity or (ii) any Public Official or Entity acquires a legal or beneficial interest in it or its Affiliate or, to its knowledge, in its Sub-distributors or other subcontractors. + +10.2 Representations, Warranties and Covenants of Distributor. Distributor represents, warrants, and covenants to Zogenix that: + +(a) in the performance of its obligations hereunder, Distributor shall comply + +39 + +US-DOCS\105216871.19 + +Source: ZOGENIX, INC., 10-Q, 5/9/2019 + + + + + +and shall cause its and its Affiliates' and Sub-distributors' employees and contractors to comply with Applicable Law and Distributor's compliance policies, complete copies of which will be provided to Zogenix before the launch of the Product in the Territory; + +(b) during the Term, Distributor agrees that: + +(i) Zogenix will have the right, upon reasonable prior written notice and during Distributor's regular business hours, to audit Distributor's and its Affiliates' books and records by an independent certified public accounting firm of recognized international standing, and Distributor shall ensure that Zogenix has the right to audit its Sub-distributors' and subcontractors' books and records, to investigation potential violations of any of the representations, warranties or covenants in this Section 10.2, the FCPA or other Applicable Laws or Distributor's compliance policies. Such audit may be made no more than once each Fiscal Year (unless an audit reveals a violation under this Agreement, in which case an additional audit may be conducted within such Fiscal Year); + +(ii) Distributor will certify to Zogenix annually in writing or otherwise upon Zogenix's written request, under the form set forth in Exhibit 10.2(b) attached hereto, Distributor's compliance with the representations, warranties and covenants in this Section 10.2, the FCPA and other Applicable Laws and Distributor's compliance policies; + +(iii) Distributor will inform Zogenix promptly of any changes in its business that would change any of its representations, warranties or covenants in this Section 10.2; + +(iv) Zogenix shall have the right to suspend or terminate the supply of Product under the Supply Agreement and to terminate this Agreement if there is credible evidence that Distributor or its Affiliate or Sub-distributor may have violated any of the representations, warranties or covenants in this Section 10.2 the FCPA or other Applicable Laws or Distributor's compliance policies. + +10.3 Representations and Warranties of Zogenix. Zogenix represents, warrants and covenants to Distributor that: + +(a) Zogenix will inform Distributor promptly of any changes in its business that would change any of its representations, warranties or covenants in this Section 10.3; and + +(b) as of the Effective Date, Zogenix has not received written notice of any pending or threatened claims or actions alleging that the Development or Commercialization of the Product in the Field infringes or would infringe the Patents of any Third Party in the Territory. + +10.4 Disclaimer. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT AND THE SUPPLY AGREEMENT, NEITHER PARTY MAKES ANY REPRESENTATIONS OR EXTENDS ANY WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, AND + +40 + +US-DOCS\105216871.19 + +Source: ZOGENIX, INC., 10-Q, 5/9/2019 + + + + + +EACH PARTY EXPRESSLY DISCLAIMS ALL IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR USE, NON-INFRINGEMENT, VALIDITY AND ENFORCEABILITY OF PATENTS, OR THE PROSPECTS OR LIKELIHOOD OF DEVELOPMENT OR COMMERCIAL SUCCESS OF THE PRODUCT. + +10.5 Limitation of Liability. NEITHER PARTY SHALL BE ENTITLED TO RECOVER FROM THE OTHER PARTY ANY SPECIAL, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES IN CONNECTION WITH THIS AGREEMENT; provided however, that this Section 10.5 shall not be construed to limit (a) either Party's right to special, incidental or consequential damages for the other Party's breach of Article 8 or (b) either Party's indemnification rights or obligations under Article 11. + +ARTICLE 11. INDEMNIFICATION + +11.1 Indemnification of Zogenix. Distributor shall indemnify, defend and hold harmless Zogenix and its Affiliates and their respective directors, officers, employees and agents (the "Zogenix Indemnitees"), from and against any and all losses, liabilities, damages, penalties, fines, costs and expenses (including reasonable attorneys' fees and other expenses of litigation) ("Losses") incurred by any Zogenix Indemnitee resulting from any claims, actions, suits or proceedings brought by a Third Party ("Third Party Claims") to the extent arising from, or occurring as a result of: (a) the registration, use, handling, storage, import, offer for sale, sale or other disposition of the Product in the Territory by or on behalf of Distributor or its Affiliates; (b) the negligence or willful misconduct of any Distributor Indemnitees in connection with Distributor's performance of its obligations or exercise of its rights under this Agreement; or (c) any breach of any representations, warranties or covenants of Distributor in this Agreement, except to the extent such Third Party Claims fall within the scope of the indemnification obligations of Zogenix set forth in Section 11.2 or arise out of the breach by Zogenix of any of the terms of the Supply Agreement. + +11.2 Indemnification of Distributor. Zogenix shall indemnify, defend and hold harmless Distributor and its Affiliates and their respective directors, officers, employees and agents (the "Distributor Indemnitees"), from and against any and all Losses incurred by any Distributor Indemnitee resulting from any Third Party Claims to the extent arising from, or occurring as a result of: (a) the manufacture, use, handling, storage, import, offer for sale, sale or other disposition of the Product outside the Territory by or on behalf of Zogenix or its Affiliates; (b) the negligence or willful misconduct of any Zogenix Indemnitees in connection with Zogenix's performance of its obligations or exercise of its rights under this Agreement; or (c) any breach of any representations, warranties or covenants of Zogenix in this Agreement, except to the extent such Third Party Claims fall within the scope of the indemnification obligations of Distributor set forth in Section 11.1 or arise out of the breach by Distributor of any of the terms of the Supply Agreement. + +41 + +US-DOCS\105216871.19 + +Source: ZOGENIX, INC., 10-Q, 5/9/2019 + + + + + +11.3 Procedure. A Party that intends to claim indemnification under this Article 11 (the "Indemnitee") shall promptly notify the indemnifying Party (the "Indemnitor") in writing of any Third Party Claim, in respect of which the Indemnitee intends to claim such indemnification, and the Indemnitor shall have sole control of the defense and/or settlement thereof. The Indemnitee may participate at its expense in the Indemnitor's defense of and settlement negotiations for any Third Party Claim with counsel of the Indemnitee's own selection. The indemnity arrangement in this Article 11 shall not apply to amounts paid in settlement of any action with respect to a Third Party Claim, if such settlement is effected without the consent of the Indemnitor, which consent shall not be withheld or delayed unreasonably. The failure to deliver written notice to the Indemnitor within a reasonable time after the commencement of any action with respect to a Third Party Claim shall only relieve the Indemnitor of its indemnification obligations under this Article 11 if and to the extent the Indemnitor is actually prejudiced thereby. The Indemnitee shall cooperate fully with the Indemnitor and its legal representatives in the investigation of any action with respect to a Third Party Claim covered by this indemnification. + +11.4 Insurance. Each Party, at its own expense, shall maintain product liability and other appropriate insurance (or self- insure) in an amount consistent with industry standards during the Term. Each Party shall provide a certificate of insurance (or evidence of self-insurance) evidencing such coverage to the other Party upon written request. + +ARTICLE 12. TERM AND TERMINATION + +12.1 Term. This Agreement shall commence on the Effective Date and shall remain in effect until September 1, 2045, unless earlier terminated by either Party pursuant to this Article 12 (the "Term"). + +12.2 Termination. + +(a) Mutual Agreement. The Parties may terminate this Agreement by mutual written agreement. + +(b) Distributor Convenience. At any time following the expiration of the Distribution Term (as defined in Section 1.17), the Distributor may terminate this Agreement at will upon [***] prior written notice to Zogenix. + +(c) Zogenix Convenience. At any time following the expiration of the Distribution Term, Zogenix may terminate this Agreement at will upon [***] prior written notice to Distributor. + +(d) Material Breach. If either Party believes in good faith that the other is in material breach of its obligations hereunder, then the non-breaching Party may deliver written + +42 + +US-DOCS\105216871.19 + +Source: ZOGENIX, INC., 10-Q, 5/9/2019 + + + + + +notice of such breach to the other Party, and the allegedly breaching Party shall have [***] from receipt of such notice to dispute the validity of such breach. For all breaches of this Agreement, the allegedly breaching Party shall have [***] from the receipt of the initial notice to cure such breach. If the Party receiving notice of breach fails to cure the breach within such [***] period, then the non-breaching Party may terminate this Agreement in its entirety effective on written notice of termination to the other Party. Notwithstanding the foregoing, (a) if such material breach (other than a payment breach), by its nature, is curable, but is not reasonably curable within the [***] period, then such period shall be extended if the breaching Party provides a written plan for curing such breach to the non-breaching Party and uses Commercially Reasonable Efforts to cure such breach in accordance with such written plan; provided, that no such extension shall exceed [***] without the consent of the non-breaching Party. + +(e) Diligence. Zogenix shall have the right to terminate this Agreement pursuant to Section 5.1(d). + +(f) Bankruptcy. A Party shall have the right to terminate this Agreement upon written notice to the other Party upon the bankruptcy, dissolution or winding up of such other Party, or the making or seeking to make or arrange an assignment for the benefit of creditors of such other Party, or the initiation of proceedings in voluntary or involuntary bankruptcy, or the appointment of a receiver or trustee of such other Party's property, that is not discharged within [***]. + +(g) Commercial Viability. In the event that prior to launch of the Product in the Field in the Territory (i) either Party has a good faith concern that the launch of the Product in the Field in the Territory is not likely to be possible with Commercially Reasonable Efforts, based upon credible evidence, such as any decision by a Regulatory Authority to require significant additional information before granting or as a condition to granting Regulatory Approval, or (ii) Distributor has a good faith concern that the Commercialization of the Product in the Territory will not be commercially viable, such Party may raise such concern for discussion by the JSC. If, within the time periods set forth in Section 3.1(d) or such longer time period as the Parties may mutually agree upon in writing, neither the JSC nor the Executives agree whether to launch or commercialize Product in the Territory, then, notwithstanding anything to the contrary in Section 3.1(d) or Article 13, either Party shall have the right to terminate this Agreement upon at least [***] written notice to the other Party. + +(h) Third Party Patent. + +(i) Distributor shall have the right to terminate this Agreement upon written notice to Zogenix if (A) the Parties have discussed an issued Patent under Section 9.4(a), (B) either (1) both Zogenix and Distributor agree not to seek a license under such issued Patent or (2) the applicable Party as determined pursuant to Section 9.4(a) failed to obtain a license under such issued Patent, after good faith efforts to do so, within [***] after the Parties' agreement as to which Party would seek such license, and (C) Distributor reasonably and in good faith believes that the sale, offer for sale or import of the Product in the Territory in the Field infringes such issued Patent in the Territory, such that Distributor is not able to sell the Product in + +43 + +US-DOCS\105216871.19 + +Source: ZOGENIX, INC., 10-Q, 5/9/2019 + + + + + +the Territory in the Field without infringing such issued Patent. + +(ii) Zogenix shall have the right to terminate this Agreement upon written notice to Distributor if (A) the Parties have discussed an issued Patent under Section 9.4(a), (B) either (1) both Zogenix and Distributor agree not to seek a license under such issued Patent or (2) the applicable Party as determined pursuant to Section 9.4(a) failed to obtain a license under such issued Patent, after good faith efforts to do so, within [***] after the Parties' agreement as to which Party would seek such license, and (C) Zogenix reasonably and in good faith believes that the manufacture for and sale to Distributor of the Product infringes such issued Patent, such that Zogenix will not be able to conduct (or have conducted on its behalf) such manufacturing for and sale of the Product to Distributor without infringing (or its contract manufacturers infringing) such issued Patent. + +(i) Change of Control. This Agreement may be terminated by either Party upon [***] written notice to the other Party in the event that the other Party undergoes a Change of Control; provided, however, that such termination notice shall only be effective if delivered within [***] after the later of the occurrence of such Change of Control or the date the Party undergoing the Change of Control delivers written notice thereof to the other Party. + +(j) Other Zogenix Termination Rights. Zogenix shall have the right to terminate this Agreement immediately upon written notice to Distributor (i) if Distributor or any of its Affiliates or Sub-distributors, directly or indirectly through any Third Party, commences any interference or opposition proceeding with respect to, challenges the validity or enforceability of, or opposes any extension of or the grant of a supplementary protection certificate with respect to, any Zogenix Patent (or any related Patent owned or controlled by Zogenix outside the Territory); (ii) if Zogenix determines that Distributor or its Affiliates or Sub- distributors are, or have caused or shall cause any Zogenix Indemnitee to be, in violation of the FCPA or any other Applicable Laws; or (iii) if Zogenix decides to withdraw the Product from the market in the Territory or otherwise believes that the promotion of the Product in the Field in the Territory presents a substantial risk of harm or injury to consumers which risk is unacceptable according to established principles of medical ethics. + +(k) Termination of Supply Agreement. Following the execution of the Supply Agreement pursuant to Section 5.2, the Parties agree that this Agreement shall automatically terminate upon termination of the Supply Agreement for any reason. + +(l) Distributor Safety Concern. This Agreement may be terminated by Distributor upon written notice to Zogenix, in the event that Distributor has a reasonable belief after due inquiry that the promotion of the Product in the Field in the Territory presents a substantial risk of harm or injury to consumers which risk is unacceptable according to established principles of medical ethics. Prior to terminating this Agreement in accordance with this Section 12.2(l), Distributor shall present evidence supporting the basis for such termination to Zogenix and shall consider in good faith all comments provided by Zogenix prior to terminating this Agreement. + +44 + +US-DOCS\105216871.19 + +Source: ZOGENIX, INC., 10-Q, 5/9/2019 + + + + + +12.3 Rights on Termination. The following will apply upon any termination of this Agreement: + +(a) Termination of Rights and Obligations. Upon termination of this Agreement, all rights and obligations of the Parties under this Agreement will terminate, except as provided in this Section 12.3 and Sections 12.4, 12.5 and 12.6. Within [***] after the effective date of termination of this Agreement, each Party shall deliver to the other Party any and all Confidential Information of such other Party then in its possession, except to the extent a Party retains the right to use such Confidential Information pursuant to any rights granted under this Agreement that survive termination of this Agreement, and except for one (1) copy which may be kept in such Party's (or its counsel's) office for archival purposes subject to a continuing obligation of confidentiality and non-use under Article 8 for the duration set forth in Section 8.1. Neither Party shall be required to destroy Confidential Information contained in any electronic back-up tapes or other electronic back-up files that have been created solely by its automatic or routine archiving and back-up procedures, to the extent created and retained in a manner consistent with its standard archiving and back-up. + +(b) Technology and Trademark License, Including Right to Reference and Technology Transfer. In the event that Zogenix terminates this Agreement pursuant to Section 12.2(c) or Distributor terminates this Agreement pursuant to Section 12.2(d), or after the expiration of this Agreement in accordance with Section 12.1, Zogenix shall negotiate in good faith with Distributor a license agreement for Distributor to make, use and sell the Product in the Field in the Territory under the Zogenix Technology, Zogenix Trademarks and the Product Trademarks. Any such license would include a royalty rate for the net sales of Product in the Field in the Territory of [***] if this Agreement is terminated by Distributor pursuant to Section 12.2(d) or of [***] if this Agreement is terminated by Zogenix pursuant to Section 12.2(c) or if the Agreement expires in accordance with Section 12.1. For clarity, the royalty rates, as applicable, set forth in this Section would be the total royalty due to Zogenix on Net Sales of the Product in the Territory under any such license agreement. In the event that Zogenix is the holder of the Regulatory Approval for the Product in the Territory at the time of termination pursuant to Section 12.2(c) by Zogenix or Section 12.2(d) by Distributor or expiration pursuant to Section 12.1, such license agreement shall also include a grant by Zogenix to Distributor of the right to reference and use all Data and Regulatory Filings (including all Regulatory Approvals), such reference and use solely for maintaining Regulatory Approval and commercializing the Product in the Territory in the Field. Such license shall also include Zogenix's agreement to use Commercially Reasonable Efforts to enable Distributor to establish manufacturing capability for the Product in or for the Territory at Distributor's cost. Such support and assistance would include: (i) amending agreements with Zogenix's contract manufacturers of Product for the Territory to permit such contract manufacturers to enter into manufacturing agreements with Distributor to manufacture the Product in or for the Territory and introducing Distributor to such contract manufacturers, (ii) provision of reasonable access to and consultation with Persons knowledgeable of the manufacture of such Products and (iii) providing such technical assistance as may be reasonably requested by Distributor relating to methods and manufacturing know-how transfer to Distributor's manufacturing facility. Such license + +45 + +US-DOCS\105216871.19 + +Source: ZOGENIX, INC., 10-Q, 5/9/2019 + + + + + +agreement would include such other standard terms and conditions for license agreements of this type as are mutually agreed to by the Parties. + +(c) Commercialization Transition. Unless this Agreement is terminated by Zogenix under Sections 12.2(f), (g)(i), (h)(ii), (j)(ii), or (j)(iii), or by Distributor under Sections 12.2(d), (g), or (l), or terminated automatically under Section 12.2(k), Distributor shall continue, to the extent that Distributor continues to have Product inventory, to fulfill orders received from customers for Product in the Territory until up to [***] after the date on which Zogenix notifies Distributor in writing that Zogenix has secured an alternative distributor for the Product in the Territory, but in no event for more for than [***] after the effective date of termination. All Product sold by or on behalf of Distributor or its Affiliates or Sub-distributors after the effective date of termination will be included in calculations under Article 6. Notwithstanding the foregoing, Distributor shall cease such activities upon [***] written notice from Zogenix at any time after the effective date of termination requesting that such activities cease. Within [***] after receipt of such cessation request, Distributor shall provide Zogenix an estimate of the quantity and shelf life of all Product remaining in Distributor's or its Affiliates' or Sub-distributors' inventory, and Zogenix shall have the right to purchase any such quantities of Product from Distributor at a price mutually agreed by the Parties. + +(d) Assignment of Regulatory Filings and Regulatory Approvals. Unless this Agreement is terminated by Zogenix under Section 12.2(c), at Zogenix's option, which shall be exercised by written notice to Distributor, to the extent permitted under Applicable Laws, Distributor shall assign or cause to be assigned to Zogenix or its designee (or to the extent not so assignable, Distributor shall take all reasonable actions to make available to Zogenix or its designee the benefits of), at Zogenix's cost, all Regulatory Filings and Regulatory Approvals for the Product in the Field in the Territory. + +(e) Transition. Unless this Agreement is terminated by Zogenix under Section 12.2(c), Distributor shall use Commercially Reasonable Efforts to cooperate with Zogenix and/or its designee to effect a smooth and orderly transition in the registration and Commercialization of the Product in the Field in the Territory during the applicable notice period under Section 12.2 and following the effective date of termination. Without limiting the foregoing, Distributor shall use Commercially Reasonable Efforts to conduct, in an expeditious manner, any activities to be conducted under this Section 12.3. + +(f) Third Party Agreements. Unless this Agreement is terminated by Zogenix under Section 12.2(c), at the written request of Zogenix, Distributor shall assign to Zogenix any Product-specific Third Party agreements, to the furthest extent possible, provided that such assignment is permitted under the Product-specific agreement or is otherwise agreed by the applicable Third Party. In the event such assignment is not requested by Zogenix or is not permitted or agreed by such Third Party, then the rights of such Third Party with respect to the Product will terminate upon termination of Distributor's rights. Distributor shall ensure that each such Third Party (if its contract is not assigned to Zogenix pursuant to this Section 12.3) will transition any remaining Product back to Zogenix in the manner set forth in this Section 12.3 as + +46 + +US-DOCS\105216871.19 + +Source: ZOGENIX, INC., 10-Q, 5/9/2019 + + + + + +if such Third Party were named herein. Distributor shall include provisions requiring compliance with these provisions in all applicable agreements with Third Parties. + +12.4 Exercise of Right to Terminate. The use by either Party hereto of a termination right provided for under this Agreement shall not give rise, on its own, to the payment of damages or any other form of compensation or relief to the other Party with respect thereto. + +12.5 Damages; Relief. Subject to Section 12.4 above, termination of this Agreement shall not preclude either Party from claiming any other damages, compensation or relief that it may be entitled to upon such termination. + +12.6 Accrued Obligations; Survival. The expiration or termination of this Agreement for any reason shall not release either Party from any liability that, at the time of such expiration or termination, has already accrued to such Party or that is attributable to a period prior to such termination, nor will any termination of this Agreement preclude either Party from pursuing all rights and remedies it may have under this Agreement, at law or in equity, with respect to breach of this Agreement. The following Articles and Sections will survive any expiration or termination of this Agreement: Sections 4.2(e) (Ownership of Regulatory Information), 4.9 (Recalls) (to the extent Product remains on the market that was distributed under this Agreement), 7.4 (Records), 9.1 (Ownership of Intellectual Property), 9.7 (Zogenix Trademarks) (to the extent applicable to any post-termination distribution provided under Section 12.3(c)), 9.8 (Product Trademarks) (to the extent applicable to any post-termination distribution provided under Section 12.3(c)), 10.5 (Limitation of Liability), 12.3 (Rights on Termination), 12.4 (Exercise of Right to Terminate), 12.5 (Damages; Relief) and 12.6 (Accrued Obligations; Survival) and Articles 1 (Definitions) (to the extent necessary to give effect to other surviving provisions), 7 (Payments, Books and Records) (only with respect to periods prior to termination and, if applicable, any post-termination distribution provided under Section 12.3(c)), 8 (Confidentiality), 11 (Indemnification), 13 (Dispute Resolution) and 14 (General Provisions). + +ARTICLE 13. DISPUTE RESOLUTION + +13.1 Objective. The Parties recognize that disputes as to matters arising under or relating to this Agreement or either Party's rights or obligations hereunder may arise from time to time. It is the objective of the Parties to establish procedures to facilitate the resolution of such disputes in an expedient manner by mutual cooperation and without resort to litigation. To accomplish this objective, the Parties agree to follow the procedures set forth in this Article 13 to resolve any such dispute if and when it arises. + +13.2 Resolution by Executives. Except as otherwise provided in Article 3, if an unresolved dispute as to matters arising under or relating to this Agreement or either Party's rights or obligations hereunder arises, either Party may refer such dispute to the Executives, who shall meet in person or by telephone within [***] after such referral to attempt in good faith to + +47 + +US-DOCS\105216871.19 + +Source: ZOGENIX, INC., 10-Q, 5/9/2019 + + + + + +resolve such dispute. If such matter cannot be resolved by discussion of such officers within such [***] (as may be extended by mutual written agreement), such dispute shall be resolved in accordance with Section 13.3. The Parties acknowledge that discussions between the Parties to resolve disputes are settlement discussions under applicable rules of evidence and without prejudice to either Party's legal position. + +13.3 Arbitration. + +(a) Any and all disputes that are not resolved pursuant to Section 13.2 shall be finally settled by binding arbitration administered under the Rules of Arbitration of the International Chamber of Commerce by three (3) arbitrators appointed in accordance with said Rules. The arbitration will be conducted in New York, New York. The language to be used in the arbitral proceedings will be English. Judgment on the award may be entered in any court having jurisdiction. + +(b) The award shall be rendered within [***] of the constitution of the arbitral tribunal, unless the arbitral tribunal determines that the interest of justice requires that such limit be extended. + +(c) The arbitrators shall award to the prevailing party, if any, as determined by the arbitrators, its reasonable attorneys' fees and costs. + +(d) The arbitration proceeding will be confidential and the arbitrators shall issue appropriate protective orders to safeguard each Party's Confidential Information. Except as required by Applicable Laws, no Party shall make (or instruct the arbitrators to make) any public announcement with respect to the proceedings or decision of the arbitrators without prior written consent of the other Party. The existence of any dispute submitted to arbitration, and the award, shall be kept in confidence by the Parties and the arbitrators, except as required in connection with the enforcement of such award or as otherwise required by Applicable Laws. + +ARTICLE 14. GENERAL PROVISIONS + +14.1 Governing Law. This Agreement and all questions regarding its existence, validity, interpretation, breach or performance and any dispute or claim arising out of or in connection with it (whether contractual or non-contractual in nature such as claims in tort, from breach of statute or regulation or otherwise) shall be governed by, and construed and enforced in accordance with, the laws of the State of New York, United States, without reference to its conflicts of law principles to the extent those principles would require applying another jurisdiction's laws. The United Nations Conventions on Contracts for the International Sale of Goods shall not be applicable to this Agreement or the Supply Agreement. + +14.2 Force Majeure. Neither Party shall be held liable to the other Party nor be + +48 + +US-DOCS\105216871.19 + +Source: ZOGENIX, INC., 10-Q, 5/9/2019 + + + + + +deemed to have defaulted under or breached this Agreement for failure or delay in performing any obligation under this Agreement (other than failure to make payment when due) when such failure or delay is caused by or results from causes beyond the reasonable control of the affected Party, including embargoes, war, acts of war (whether war be declared or not), insurrections, riots, fire, floods, or other acts of God, or acts, omissions or delays in acting by any governmental authority or the other Party. The affected Party shall notify the other Party of such force majeure circumstances as soon as reasonably practicable, and shall promptly undertake all reasonable efforts necessary to cure such force majeure circumstances. Such excuse from liability shall be effective only to the extent and duration of the event(s) causing the failure or delay in performance and provided that the Party has not caused such event(s) to occur. + +14.3 Assignment. Except as expressly provided in this Section 14.3, neither this Agreement nor any rights or obligations hereunder may be assigned or otherwise transferred by either Party without the prior written consent of the other Party, which consent shall not be unreasonably withheld; provided, however, that either Party may assign this Agreement and its rights and obligations hereunder without the other Party's consent: + +(a) in connection with the transfer or sale of all or substantially all of the business of the assigning Party to a Third Party, whether by merger, sale of stock, sale of assets or otherwise; provided that in the event of a transaction (whether this Agreement is actually assigned or is assumed by the acquiring party by operation of law (e.g., in the context of a reverse triangular merger)), unless otherwise agreed with the acquiring party in writing, intellectual property of the acquiring party shall not be included in the intellectual property to which the other Party has access under this Agreement; or + +(b) to an Affiliate, provided that the assigning Party shall remain liable and responsible to the non‑assigning Party hereto for the performance and observance of all such duties and obligations by such Affiliate. + +For the avoidance of doubt, in the event that either Party assigns this Agreement pursuant to this Section 14.3(a), the other Party shall have the right to terminate this Agreement pursuant to Section 12.2(i). This Agreement shall be binding upon successors and permitted assigns of the Parties. Any assignment not in accordance with this Section 14.3 will be null and void. + +14.4 Severability. If any one or more of the provisions contained in this Agreement is held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby, unless the absence of the invalidated provision(s) adversely affects the substantive rights of the Parties. The Parties shall in such an instance use their best efforts to replace the invalid, illegal or unenforceable provision(s) with valid, legal and enforceable provision(s) which, insofar as practical, implement the purposes of this Agreement. + +14.5 Notices. All notices required or permitted hereunder shall be in writing and sufficient if delivered personally, sent by facsimile (and promptly confirmed by personal delivery, registered or certified mail or overnight courier), sent by internationally- recognized + +49 + +US-DOCS\105216871.19 + +Source: ZOGENIX, INC., 10-Q, 5/9/2019 + + + + + +overnight courier or sent by registered or certified mail, postage prepaid, return receipt requested, addressed as follows: + +If to Zogenix, addressed to: + +Zogenix, Inc. 5959 Horton Street, Suite 500 Emeryville, CA 94608, U.S.A Attention: Chief Executive Officer Facsimile Number: +1 (510) 550-8340 + +With a copy to (which shall not constitute notice): + +Latham & Watkins, LLP 12670 High Bluff Drive San Diego, CA 92130, U.S.A Attention: Cheston Larson, Esq. Facsimile Number: +1 (858) 523-5450 + +If to Distributor, addressed to: + +Nippon Shinyaku Co., Ltd. 14, Nishinosho-monguchi-cho Kisshoin, Minami-ku Kyoto 601-8550, JAPAN Attention: Alliance Department Facsimile Number: +81-75-321-9019 + +or to such other address as the Party to whom notice is to be given may have furnished to the other Party in writing in accordance herewith. Any such notice shall be deemed to have been given: (a) when delivered if personally delivered or sent by facsimile on a Business Day; and (b) on the second Business Day after dispatch if sent by internationally-recognized overnight courier. + +14.6 Entire Agreement; Amendments. This Agreement and the Supply Agreement, together with the exhibits hereto and thereto, contain the entire understanding of the Parties with respect to the subject matter hereof and thereof and supersede and cancel all previous express or implied agreements and understandings, negotiations, writings and commitments, either oral or written, in respect to the subject matter hereof and thereof, including the Confidentiality Agreement. This Agreement may be amended, or any term hereof modified, only by a written instrument duly executed by authorized representatives of both Parties, but "written instrument" does not include the text of e-mails or similar electronic transmissions. + +14.7 Headings. The captions to the several Articles and Sections hereof are not a part of this Agreement, but are merely for convenience to assist in locating and reading the several + +50 + +US-DOCS\105216871.19 + +Source: ZOGENIX, INC., 10-Q, 5/9/2019 + + + + + +Sections hereof. + +14.8 Independent Contractors. It is expressly agreed that Zogenix and Distributor shall be independent contractors and that the relationship between the two Parties shall not constitute a partnership, joint venture or agency. Neither Zogenix nor Distributor shall have the authority to make any statements, representations or commitments of any kind or to take any action that shall be binding on the other Party, without the prior written consent of the other Party. + +14.9 Waiver. The waiver by either Party hereto of any right hereunder, or the failure of the other Party to perform, or a breach by the other Party, shall not be deemed a waiver of any other right hereunder or of any other breach or failure by such other Party whether of a similar nature or otherwise. + +14.10 Cumulative Remedies. No remedy referred to in this Agreement is intended to be exclusive, but each shall be cumulative and in addition to any other remedy referred to in this Agreement or otherwise available under law. + +14.11 Waiver of Rule of Construction. Each Party has had the opportunity to consult with counsel in connection with the review, drafting and negotiation of this Agreement. Accordingly, the rule of construction that any ambiguity in this Agreement shall be construed against the drafting Party shall not apply. + +14.12 Interpretation. All references in this Agreement to an Article or Section shall refer to an Article or Section in or to this Agreement, unless otherwise stated. Any reference to any federal, national, state, local, or foreign statute or law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise. The word "including" and similar words means including without limitation. The words "herein," "hereof" and "hereunder" and other words of similar import refer to this Agreement as a whole and not to any particular Section or other subdivision. All references to days, months, quarters or years are references to calendar days, calendar months, calendar quarters, or calendar years, unless stated otherwise. References to the singular include the plural. + +14.13 No Third Party Beneficiaries. This Agreement is neither expressly nor impliedly made for the benefit of any Party other than Zogenix and Distributor, except as otherwise provided in this Agreement with respect to Zogenix Indemnitees under Section 11.1 and Distributor Indemnitees under Section 11.2. This Agreement may be terminated, varied or amended in accordance with its terms or with the agreement of Distributor and Zogenix without the consent of the Zogenix Indemnitees or Distributor Indemnitees. + +14.14 English Language. This Agreement is in the English language, and the English language shall control its interpretation. In addition, unless otherwise explicitly stipulated in this Agreement, all notices required or permitted to be given under this Agreement, and all written, electronic, oral or other communications between the Parties regarding this Agreement, shall be in the English language. + +51 + +US-DOCS\105216871.19 + +Source: ZOGENIX, INC., 10-Q, 5/9/2019 + + + + + +14.15 Counterparts. This Agreement may be executed in two counterparts, each of which shall be deemed to be an original as against any party whose signature appears thereon, all of which together shall constitute but one and the same instrument. + +14.16 Further Actions. Each Party will execute, acknowledge and deliver such further instruments, and to do all such other ministerial, administrative or similar acts, as may be necessary or appropriate in order to carry out the purposes and intent of this Agreement. + +[Signature Page Follows] + +52 + +US-DOCS\105216871.19 + +Source: ZOGENIX, INC., 10-Q, 5/9/2019 + + + + + +IN WITNESS WHEREOF, the Parties have executed this Distributorship Agreement as of the Effective Date. + +ZOGENIX, INC. NIPPON SHINYAKU COMPANY, LTD. + +By: /s/ Stephen J. Farr By: /s/Shigenobu Maekawa Name: Stephen J. Farr Name: Shigenobu Maekawa Title: President and Chief Executive Officer Title: President + +53 + +US-DOCS\105216871.19 + +Source: ZOGENIX, INC., 10-Q, 5/9/2019 + + + + + +Exhibit 1.70 + +UNLABELED DRUG PRODUCT + +[***] [***] [***] [***] [***] [***] [***] + +US-DOCS\105216871.19 + +Source: ZOGENIX, INC., 10-Q, 5/9/2019 + + + + + +Exhibit 1.74 + +ZOGENIX ZX008 PATENTS AS OF THE EFFECTIVE DATE + +Patents claiming ZX008 or its use in Japan + +Docket No Appln. No Filing Date Publn. No Patent No Issue Date + +[***] + +ZGNX-135JP [***] [***] [***] [***] 11/30/18 ZGNX-135JP DIV [***] [***] + +[***] + +ZGNX-143JP [***] [***] [***] + +US-DOCS\105216871.19 + +Source: ZOGENIX, INC., 10-Q, 5/9/2019 + + + + + +Exhibit 2.3 + +MATERIAL TERMS OF SUPPLY AGREEMENT + +The Supply Agreement will include the following terms and conditions: + +Appointment as Exclusive Supplier. During the Term, Zogenix shall retain and have the sole and exclusive right to supply or have supplied all of Distributors' and its Affiliates' and Sub-distributors' requirements of the Product for sale in the Field in the Territory. + +Transfer Price. The price at which Zogenix supplies the Product (as Unlabeled Drug Product) to Distributor equals the consideration and Transfer Price set forth in the Agreement in Section 6.5. Distributor shall make payment in accordance with Sections 6.1, 6.3, and 6.4, and shall also pay Zogenix's invoice for the estimated Transfer Price within [***] of the date on which the applicable units of Product are delivered by Zogenix in accordance Section 6.5 and the terms of the Supply Agreement. The Parties will true-up the Fully-Burdened Manufacturing Cost on an annual basis when truing-up the Transfer Price. For any Product that is supplied to Distributor under this Agreement and damaged by Distributor during labeling or packaging, the transfer price for any such Product shall be [***] per unit of Product for the applicable Fiscal Year. The Supply Agreement shall also include terms permitting Distributor to audit Zogenix's Fully-Burdened Manufacturing Costs that are similar to Zogenix's audit rights in Section 7.5 of the Agreement. + +Third Party Manufacturer Agreements. The terms of the Supply Agreement shall (a) establish the procedures, terms and conditions for manufacture, quality control, forecasting, ordering, delivery price, payment and appropriate other activities relating to the supply of the Product in the Territory so as to reasonably enable Zogenix to meet its obligations under its agreements with Third Party manufacturers and (b) provide Distributor no remedies for Zogenix's failure to supply the Product in accordance with the Supply Agreement that are in addition to those set forth herein or that are available to Zogenix in its existing agreements with Third Party manufacturers, and (c) set forth such terms and conditions so that the Supply Agreement is otherwise consistent in all material respects with such agreements with Third Party manufacturers. + +Forecasts and Orders. [***] prior to the anticipated First Commercial Sale, Distributor shall provide Zogenix with a good faith, [***] rolling forecast of its anticipated requirements of the Product, the first [***] of which shall be on a monthly basis and the last [***] of which shall be on a quarterly basis. The first [***] of such forecast shall be binding. Distributor shall submit binding purchase orders consistent with the binding portion of its forecasts. Each purchase order shall have a requested delivery date that is at least [***] after the date of the purchase order. The terms of the Supply Agreement shall also provide for the order and delivery of launch stock for the Product prior to Regulatory Approval to ensure timely launch of the product following Regulatory Approval. + +US-DOCS\105216871.19 + +Source: ZOGENIX, INC., 10-Q, 5/9/2019 + + + + + +Purchase orders shall be placed in full batch increments as defined in the Supply Agreement. + +Delivery. All Products shall be shipped Ex Works manufacturing site (Incoterms 2010) to the destination requested by Distributor. Distributor shall be responsible for labeling and packaging Product. + +Safety Stock. Distributor shall use Commercially Reasonable Efforts to build promptly following Regulatory Approval and thereafter to maintain an inventory of Product (itself and/or with wholesalers) which is not less than the equivalent of the immediate next [***] of anticipated demand for the Product in the Territory. + +Change Controls. The Parties shall include in the Supply Agreement a reasonable change control procedure to deal with any reasonable changes to the Product specifications and other changes required by Applicable Laws. All Third Party costs incurred by either Party for any such changes in accordance with the agreed-upon change control procedure shall be paid by Distributor if requested by Distributor or if such changes are required by Applicable Laws in the Territory. + +Second Source. Based on Distributor's forecasts, including its [***] forecasts, the Parties will discuss and determine whether Zogenix will obtain additional capacity to support Distributor's requirements for the Product in the Territory. Any decisions to build or engage additional manufacturing capacity for the Territory will be at Zogenix's sole discretion, and in no event will Zogenix be obligated to supply Product in excess of Distributor's binding forecasts. + +Product Quality/Complaints. The Supply Agreement will define procedures for resolution of any disputes regarding Product quality and for notification of each Party in the event of a Product complaint or Product recall. The Supply Agreement will contain mutually acceptable provisions regarding release testing of the Product and, if applicable, the transfer of information necessary for Distributor to perform required quality testing, as applicable. + +Regulatory Audits. Not more than once per Fiscal Year or as otherwise agreed by the Parties, and subject to the terms of the applicable agreement between Zogenix and its Third Party manufacturers, Zogenix shall, at Distributor's request, conduct GMP audits of the Third Party manufacturers and, if applicable, exercise such other audit rights that Zogenix may have under such agreements, and shall disclose to Distributor the results of such audits. Zogenix will use commercially reasonable efforts to cause such Third Party manufacturers to promptly correct any deficiencies or other adverse findings. + +Representations and Warranties. Zogenix shall provide standard warranties applicable in the pharmaceutical industry, including warranties that all Product manufactured for Distributor: + +US-DOCS\105216871.19 + +Source: ZOGENIX, INC., 10-Q, 5/9/2019 + + + + + +shall be manufactured and tested in accordance with all Applicable Laws, including GMP applicable to the manufacturing, storage, and shipment of the Product, + +shall not be adulterated or misbranded within the meaning of the United States Food, Drug and Cosmetic Act, 21 U.S.C. Section 301c et. seq., or other Applicable Laws, and + +the time of delivery to Distributor will meet the Product specifications. + +Quality Agreement. The Parties shall work together in good faith to enter into a mutually acceptable quality agreement with respect to the manufacture of the Product prior to shipment of any Product to Distributor. + +US-DOCS\105216871.19 + +Source: ZOGENIX, INC., 10-Q, 5/9/2019 + + + + + +Exhibit 4.2(a) + +THE INITIAL VERSION OF THE REGULATORY PLAN + +US-DOCS\105216871.19 + +Source: ZOGENIX, INC., 10-Q, 5/9/2019 + + + + + +Exhibit 8.5(a) + +PRESS RELEASE + +US-DOCS\105216871.19 + +Source: ZOGENIX, INC., 10-Q, 5/9/2019 + + + + + +Exhibit 9.7 + +ZOGENIX TRADEMARKS + +Trademark Country Status Registration number Next renewal date Application number Application date Registration date Class + +(Zogenix Logo) Japan Pending N/A N/A 2019031449 2/28/2019 N/A 5, 42 + +US-DOCS\105216871.19 + +Source: ZOGENIX, INC., 10-Q, 5/9/2019 + + + + + +Exhibit 9.8 + +PRODUCT TRADEMARKS + +Trademark Country Status Registration number Next renewal date Application number Application date Registration date Class + +FINTEPLA Japan Registered 6105099 12/7/2028 2018028557 3/9/2018 12/7/2018 5 (Fintepla Logo) Japan Registered 6093116 10/26/2028 2018028558 3/9/2018 10/26/2018 5 + +US-DOCS\105216871.19 + +Source: ZOGENIX, INC., 10-Q, 5/9/2019 + + + + + +Exhibit 10.2(b) + +FORM OF COMPLIANCE CERTIFICATION + +Date: __________ + +To: Zogenix, Inc. and its Affiliates ("Zogenix") + +Re: Distributorship Agreement dated [ ] ("the Agreement") + +For and on behalf of [__________________] and our Affiliates (as defined in the Agreement) and employees, we confirm that in respect of our distribution of Zogenix Product within the Territory during the period [insert date] to [insert date]:- + +there was no offer, or promise to make, authorize or provide (directly or indirectly) a gift, payment or anything of value to a government official, political parties or candidates or private sector employee, in order to influence or reward any action or decision by such person in his or her official or professional capacity, for the purpose of corruptly obtaining or retaining business or securing any improper advantage; + +all payments, expenses or credits properly paid to or incurred on behalf of Zogenix, were accurately and appropriately recorded and described in accordance with acceptable accounting and recordkeeping procedures, and substantiated by supporting documents and evidence; + +there were no unauthorized and/or excessive payments of any kind to health care institutions, hospitals, hospital services or departments; and + +has performed the necessary due diligence to ensure compliance with Applicable Laws (including anti-bribery laws and the U.S. FCPA) and the terms of the Agreement. + +Please be advised accordingly. + +Yours faithfully, + +[____________________] + +Authorized Representative + +Name: Title: + +Signature: Date: + +US-DOCS\105216871.19 + +Source: ZOGENIX, INC., 10-Q, 5/9/2019 \ No newline at end of file diff --git a/full_contract_txt/Zounds Hearing, Inc. - MANUFACTURING DESIGN MARKETING AGREEMENT.txt b/full_contract_txt/Zounds Hearing, Inc. - MANUFACTURING DESIGN MARKETING AGREEMENT.txt new file mode 100644 index 0000000000000000000000000000000000000000..375853d16846042c7cfaede918dbad5e25298049 --- /dev/null +++ b/full_contract_txt/Zounds Hearing, Inc. - MANUFACTURING DESIGN MARKETING AGREEMENT.txt @@ -0,0 +1,105 @@ +Exhibit 10.1 MANUFACTURING, DESIGN AND MARKETING AGREEMENT This MANUFACTURING, DESIGN AND MARKETING AGREEMENT (this "Agreement") is entered into by and between Zounds Hearing, Inc., a Delaware corporation ("Subcontractor") and InnerScope Hearing Technologies, Inc., a Nevada corporation, (the "Manufacturer") Manufacturer dated effective October 3, 2018 (the "Effective Date"). Subcontractor and Manufacturer may also be referred to herein individually as "Party" or collectively as the "Parties". RECITALS WHEREAS, Subcontractor currently is the registered manufacturer of hearing aids and related components and accessories (the "Zounds Products") that are sold under the Subcontractor's brand names through various marketing and distribution channels. WHEREAS the Parties desire to enter an agreement whereby the Subcontractor as the Manufacturer's subcontractor will provide design, technology, manufacturing and supply chain services to the Manufacturer to enable the Manufacturer to manufacture comparable hearing aids and related components and accessories to be sold under Manufacturer's exclusive brand names (the "Manufacturer's Products") through the Manufacturer's various marketing and distribution channels. WHEREAS, the Parties also desire to enter into a lease agreement of Subcontractor's current Chandler, Arizona facility that provides the Manufacturer an FDA medical device facility for the Manufacturer's Products. WHEREAS, the Parties also desire to enter into an agreement that provides for the joint marketing and sale of each other's products. NOW, THEREFORE, in consideration of the promises and covenants contained herein, the Parties hereby agree as follows: 1. Term. Subject to earlier termination as provided in this Agreement, the initial term of this Agreement shall be for a period beginning on the Effective Date and ending ten (10) years thereafter unless this Agreement is terminated earlier as provided herein. This Agreement will renew automatically thereafter for successive one-year terms unless and until one Party gives notification of termination with at least sixty (60) days written notice. All orders placed under this Agreement must be placed prior to the expiration or termination of this Agreement. + +2. Technology Access Fee. Manufacturer will pay Subcontractor One Million and No/100 USD ($1,000,000) (the "Technology Access Fee"). The Technology Access Fee will be paid in two equal installments of $500,000 each. The first installment will be due thirty (30) days following the Effective Date and the second installment will be due sixty (60) days following the Effective Date. + +3. Orders for Manufacturer's Products to be Manufactured by Subcontractor + +3.1 Purchase Orders: Excess Inventory. Manufacturer shall provide to Subcontractor a purchase order setting forth the proposed quantity of Manufacturer's Products to be purchased by Manufacturer and delivery dates, which purchase order will be subject to written acceptance by Subcontractor. All purchase orders are non-cancellable, and the Manufacturer shall pay for the purchaser orders as follows: (i) for purchase orders for less than or equal to a total of five hundred (500) units in any given calendar month, payment of fifty percent (50%) of Product Cost (as defined below) shall be made in full at the time the order is placed and the remaining balance paid in full before the Manufacturer's Products are shipped; and (ii) for purchase orders for more than five hundred (500) units in any given calendar month, payment of one hundred percent (100%) of Product Cost shall be made in full at the time the order is placed. Manufacturer's purchase orders accepted by Subcontractor and any forecast provided to Subcontractor by Manufacturer will constitute authorization for Subcontractor to procure product components to manufacture the Manufacturer's Products covered by such purchase orders based on their lead times. Subcontractor will advise Manufacturer of the lead time of components contained within their order and any forecast and Manufacturer will pay for the components prior to the Subcontractor placing orders for the components. + +3.2 Contract Formation: Acceptance and Entire Agreement. Each time Manufacturer submits an order for Manufacturer's Products and Subcontractor accepts the order or ships the ordered Manufacturer's Products to Manufacturer, a new contract is formed consisting of this Agreement, the quantities and delivery dates specified in the order and the prices then offered by Subcontractor. ACCEPTANCE OF MANUFACTURER'S ORDER IS EXPRESSLY LIMITED TO THE TERMS AND CONDITIONS OF THIS AGREEMENT, NOTWITHSTANDING ANY ORAL OR WRITTEN STATEMENT MADE BY MANUFACTURER, AND DOES NOT IN ANY WAY WHATSOEVER CONSTITUTE ACCEPTANCE OF MANUFACTURER'S TERMS AND CONDITIONS EXCEPT AS SET FORTH IN THE TERMS OF THIS AGREEMENT. NO TERMS AND CONDITIONS CONTAINED IN ANY PURCHASE ORDER FORM, WHETHER PROVIDED BY MANUFACTURER OR SUBCONTRACTOR, WILL BECOME A PART OF THE CONTRACT AND THIS CONTRACT WILL GOVERN ALL PURCHASES. Manufacturer's acceptance of or payment for Manufacturer's Products that Manufacturer has not ordered creates a contract comprised of this Agreement, the quantities of Manufacturer's Products accepted or paid for, and the prices then offered by Subcontractor. This Agreement shall constitute the entire agreement with respect to any contract formed and shall not be altered, amended, supplemented or canceled without the express written agreement of both Manufacturer and Subcontractor. + + + + + +3.3 Product Prices. Pricing shall be the actual cost of the manufacturing of each Manufacturer's Product plus the proportional allocation of the costs of Subcontractor's manufacturing, engineering, and supply chain overhead, as mutually agreed by the Parties (the "Product Cost"). Title of the product will transfer to the Manufacturer at the shipping dock of the manufacturing facility. Manufacturer will be responsible for shipping costs. Manufacturer shall pay any taxes incurred in the manufacture of Manufacturer's Products, including any taxes incurred as a result of purchasing components or maintaining inventory. In addition to the Royalties paid under this Agreement to the Subcontractor, Manufacturer shall pay any other third-party royalties for technology that are required to manufacture the Manufacturer's Products for their intended purpose. As of the date of this Agreement neither Party is aware of any third-party royalties for technology that Manufacturer would be liable to pay. Subcontractor will provide Manufacturer with documentation substantiating any Product Cost variance upon request. + +3.4 Cost Reductions. Potential Product Cost reductions as a result of materials pricing will be reviewed and implemented periodically as mutually agreed and passed on to the Manufacturer. Product Cost reductions resulting from engineering changes or other changes, initiated by Manufacturer, that would impact either Product Costs or process changes at Subcontractor will be implemented at an agreed upon time. Manufacturer will be responsible for their proportionate share of any Product Cost reduction that is a result of engineering investment by the Subcontractor. If the Manufacturer does not pay its proportionate share, the Manufacturer will pay the Product Cost as if the cost reduction had not been made (i.e., the Product Cost prior to the cost reduction as if the cost reduction were not made). The Subcontractor will list the new Product Cost and a line item for engineering investment that accounts for the difference. + +3.5 Royalties. In addition to paying the Product Costs of Manufacturer's Products, Manufacturer shall also pay to Subcontractor the following royalty payments (each a "Royalty" and collectively the "Royalties") for each of Manufacturer's Product purchased under this Agreement. Royalties shall be paid 50% at time of shipping and the remaining balance of 50% due in 15-days after the Manufacturer's Products have shipped from the manufacturing facility. a) Non-Rechargeable Products. For Manufacturer's Products that are non-rechargeable, Manufacturer shall pay Subcontractor a Royalty equal to the higher of (i) eighty percent (80.0%) of the Product Cost; and (ii) $80 per unit. b) Rechargeable Products. For Manufacturer's Products that are rechargeable, Manufacturer shall pay Subcontractor a Royalty equal to the higher of (i) one hundred percent (100.0%) of the Product Cost; and (ii) $100 per unit. 3.6 Zounds' Products and Manufacturers Products Built to Manufacturer's Specifications. Subject to Section 7 below, Subcontractor agrees to manufacture Manufacturer's Products (i) that are identical to Zounds' Products allowing Manufacturer to utilize Subcontractor's existing product designs and features and/ or (ii) to specifications provided by Manufacturer from time to time with approval of such changes by Subcontractor. Any advice given by Subcontractor to Manufacturer before or after delivery of Products built to Manufacturer's specifications is based solely upon the information available to Subcontractor, and the use of such advice by Manufacturer is solely and entirely at Manufacturer's own risk. Manufacturer represents and warrants that it has independently determined the fitness, need, usefulness, and applicability of the Manufacturer's Products built to Manufacturer's specifications it has ordered and does not rely on any representation of Subcontractor in that regard. + +3.7 Engineering Services and Design Changes. Manufacturer may elect to utilize Subcontractor's design engineering resources (the "Engineering and Design Services") to further customize Manufacturer's Products. The cost of Engineering and Design Services to be paid by Manufacturer will be agreed to in a written document setting forth the scope, timing and other terms of such Engineering and Design Services executed by the Parties prior to any services being provided by Subcontractor. Subject to the written agreement of the parties with respect to any resulting change in price, delivery schedule and other terms, Subcontractor will accept design changes (i.e., Engineering Change Orders or "ECO's") according to Manufacturer's instructions. + +3.8 Tooling, Setup and Non-Recurring Engineering ("NRE") Charges. Subcontractor agrees to provide Manufacturer with a quote for any one-time tooling, setup or NRE charges payable by Manufacturer as a result of a change in design requested by Manufacturer, change in minimum quantity requirements by Manufacturer as originally quoted by Subcontractor, or an addition to the Manufacturer's Products purchased under this Agreement requested by Manufacturer. If Manufacturer elects to proceed with the design change, minimum quantity requirements change or addition as specified in Subcontractor's quote, Manufacturer will provide Subcontractor with written acceptance of Subcontractor's quoted terms. + +3.9 Inventory Reports. Subcontractor agrees to report its inventory position to Manufacturer on a monthly basis, including the following information: quantity of raw material, work in process and any open orders that cannot be cancelled to the supplier lead time. The report will specifically identify any material on hand or on order where the quantity exceeds the agreed three (3) month forward looking forecast plus safety stock as agreed upon by Subcontractor and Manufacturer. The Subcontractor and Manufacturer will review inventory levels and safety stocks quarterly. + +4. Delivery and Shipping. The agreed upon delivery dates are based on the Subcontractor's projected lead time, current inventory, commitments and Subcontractor's advice. Manufacturer agrees and acknowledges that all shipment dates are firm delivery dates. All shipments shall be F.O.B. the manufacturing facility unless otherwise mutually agreed upon in writing. The method and route of shipment shall be at Subcontractor's discretion, unless Manufacturer supplies instructions in writing at least five days prior to shipment. In addition to the purchase price, Manufacturer shall pay any and all transportation charges (including insurance). The risk of loss of and title to the Manufacturer's Products pass to Manufacturer upon the receipt of the Manufacturer's Products by the carrier. Subcontractor is not responsible for any installation of Manufacturer's Products sold + + + + + +hereunder or delays caused by Manufacturer-specified suppliers. + +5. Leased Space Agreement. Manufacturer will lease from Subcontractor a well-defined space for Manufacturer's Products within the Subcontractor's current FDA registered manufacturer's facility. Subcontractor is solely responsible for maintaining all aspects of such leased space including but not limited to; (i) segregation of Manufacturer's Products with all Manufacturer's Products clearly segregated and marked; and (ii) meeting all necessary requirements deemed appropriate by the FDA and any regulatory authorities for a medical device manufacturer's facility. Subcontractor will be also solely responsible for remaining in good standings at all times with all regulatory authorities including but not limited to the standards set forth by the FDA for medical device manufacturing facilities. The Manufacturer may list the address of the Subcontractor's current FDA registered manufacturer's facility as the Manufacturer's own FDA approved manufacturer's facility for the Manufacturer's Products. The terms of such lease agreement will be mutually agreed to by the Parties in a separate document. + +6. Payment Terms. Upon Subcontractor's approval and acceptance of a production forecast provided by Manufacturer, Manufacturer's payment for Manufacturer's Products will be due when forecasted materials or components must be ordered by the Subcontractor as set forth in Section 3 above. A schedule of the forecast payables will be provided by the Subcontractor to the Manufacturer based on the approved forecast. Components and products will only be procured and/or manufactured once payment has been received. All payments will be made by electronic wire transfer and all of the appropriate forms will need to be signed so that this can happen efficiently. Alternately, payments can be made to Subcontractor's address as shown Subcontractor's invoice. No offsets are allowed to be taken by either Party. Manufacturer represents that all sales to Manufacturer under this Agreement are sales for use in production or resale; therefore no sales, use, excise or other taxes are due as a result of such sales and Manufacturer will be responsible for payment of any such taxes. A copy of the Manufacturer's resale certificate will be provided by Manufacturer within 15-days of the Effective Date. + +7. Limited Warranty; Nonconforming Products. Since Manufacturer is paying the actual manufacturing cost of the product, Supplier has not reserved for any warranty related costs. The Manufacturer acknowledges that it is solely responsible for any warranty costs associated with Manufacturer's Products. Should any nonconformities be detected during or after the manufacturing process, Subcontractor will assist Manufacturer in resolving any quality issues with the suppliers. Subcontractor will provide support to Manufacturer to train Manufacturer's employees to repair the non-conforming products as appropriate. Upon Manufacturer's request, Subcontractor will provide repair services for a fee equal to the actual cost of these services. In the event Manufacturer in good faith believes that Manufacturer's Products are nonconforming under the specifications agreed to among the Parties (the "Standards"), Manufacturer shall give written notice to Subcontractor specifying in detail the nonconformity within thirty (30) days of Manufacturer's receipt of such Manufacturer's Products. Upon Manufacturer's request, Subcontractor will facilitate such Manufacturer's Products being repaired or replaced, Manufacturer must return the Manufacturer's Products to Subcontractor, transportation charges prepaid by Manufacturer, within fifteen (15) days of the end of such thirty (30) date notice period. Notwithstanding anything else in this Agreement, Subcontractor makes no representations or warranties whatsoever with respect to: (i) any materials, components or subassemblies; (ii) defects resulting from the Specifications or the design of the Manufacturer's Products; (iii) Manufacturer's Product that has been abused, damaged, altered or misused by any person or entity after title passes to Manufacturer; (iv) first articles, prototypes, pre-production units, test units or other similar Manufacturer's Products; or (v) defects resulting from tooling, designs or instructions produced or supplied by Manufacturer. Manufacturer shall be liable for costs or expenses incurred by Subcontractor related to the foregoing exclusions to Subcontractor's express limited warranty. If Subcontractor determines that the Manufacturer's Products are nonconforming under the Standards, Subcontractor, shall work with their vendors to rework the Manufacturer's Products or otherwise replace the Manufacturer's Products. Manufacturer shall be liable for the cost of rework or replacement and all associated costs therewith including, without limitation, transportation charges and inspection fees. If requested by the Manufacturer, Subcontractor will provide a cause of failure, a failure analysis provided in Subcontractor's standard format and correction action. + + + + + +MANUFACTURER ACKNOWLEDGES THAT SUBCONTRACTOR IS NOT THE MANUFACTURER OF MOST, IF NOT ALL, OF THE COMPONENTS OF THE MANUFACTURER'S PRODUCTS OR ANY THIRD PARTY MANUFACTURER'S AGENT. SUBCONTRACTOR MAKES NO REPRESENTATIONS OR WARRANTIES IN CONNECTION WITH THE PRODUCTS OR COMPONENTS THEREOF WHICH SUBCONTRACTOR DID NOT MANUFACTURE. FURTHER, SUBCONTRACTOR SPECIFICALLY DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIED, IN FACT OR BY OPERATION OF LAW OR OTHERWISE, CONTAINED IN OR DERIVED FROM THIS AGREEMENT, ANY ORDER, OR IN ANY OTHER MATERIALS, BROCHURES, PRESENTATIONS, SAMPLES, MODELS OR OTHER DOCUMENTATION OR COMMUNICATIONS WHETHER ORAL OR WRITTEN, INCLUDING, WITHOUT LIMITATION, IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, CONFORMANCE WITH THIRD PARTY MANUFACTURER'S SPECIFICATIONS OR OTHERWISE, WHICH WOULD EXTEND BEYOND THE WARRANTIES EXPRESSLY CONTAINED HEREIN. SUBCONTRACTOR AUTHORIZES MANUFACTURER TO ASSERT AT MANUFACTURER'S EXPENSE FOR SUBCONTRACTOR'S ACCOUNT, ALL OF SUBCONTRACTOR'S RIGHTS UNDER ANY APPLICABLE THIRD PARTY MANUFACTURER'S WARRANTY, AND SUBCONTRACTOR AGREES TO COOPERATE WITH MANUFACTURER IN ASSERTING SUCH RIGHTS; PROVIDED, HOWEVER, THAT MANUFACTURER WILL DEFEND, INDEMNIFY AND HOLD SUBCONTRACTOR HARMLESS FROM AND AGAINST ANY LOSS, LIABILITY OR EXPENSE, INCLUDING REASONABLE ATTORNEY'S FEES, RESULTING FROM OR ARISING IN CONNECTION WITH ANY ACTION BY MANUFACTURER RELATING TO THE ABOVE AUTHORIZATION. THIS SECTION 7 SETS FORTH SUBCONTRACTOR'S SOLE AND EXCLUSIVE LIABILITY, AND MANUFACTURER'S SOLE AND EXCLUSIVE REMEDY, AS TO ANY FAILURE OF THE MANUFACTURER'S PRODUCTS TO MEET THE WARRANTY STANDARDS. 8. Orders; Termination. + +8.1 Orders: All orders whether for Manufacturer's Products or components or inventory to be used in the manufacture of Manufacturer's Products are non-cancellable. 8.2 Termination. Either Party may terminate this Agreement and either may terminate a purchase order, effective upon written notice in any of the following events: (a) the other Party materially breaches this Agreement and such breach remains uncured for thirty (30) days following written notice of breach to the breaching Party; (b) the other Party (i) voluntarily suspends transaction of business; (ii) becomes insolvent or unable to pay any indebtedness as it matures; (iii) commences a voluntary case in bankruptcy or a voluntary petition seeking reorganization or to effect a plan or other arrangement with creditors; (iv) makes an assignment for the benefit of creditors; (v) applies for or consents to the appointment of a receiver or trustee for it or for any substantial portion of its property; (vi) makes an assignment to an agent authorized to liquidate any substantial part of its assets; (vii) has an involuntary case commenced against it with any court or other authority seeking liquidations, reorganization or a creditor's arrangement; (viii) by an order of any court or other authority, has appointed any receiver of trustee for it or for any substantial portion of its property; or (ix) has a writ or warranty of attachment or any petition seeking liquidation, reorganization or a creditor's arrangement or such order appointing a receiver or trustee is not vacated or stayed, or such writ, warranty of attachment or similar process is not vacated, released or bonded off within thirty (30) days after its entry or levy. 8.3 Party Liability Upon Termination a) Manufacturer Termination Without Cause. If the Manufacturer terminates this Agreement or cancels any purchase order without cause pursuant to Section 8.2, Subcontractor will stop all shipments and retain all inventory. Subcontractor may, at its sole discretion, assist Manufacturer in the liquidation of any inventory that is generic that does not utilize any of Subcontractor's technology. Manufacturer shall be liable for cancellation charges including the Product Costs and the costs as provided in Section 3.8. b) Manufacturer Termination With Cause. If the Manufacturer terminates this Agreement or cancels any purchase order for cause pursuant to Section 8.2 Manufacturer shall not be liable for any termination or cancellation charges but Subcontractor may, at Subcontractor's sole discretion, purchase all or part of any remaining inventory. c) Subcontractor Termination for Cause. If the Subcontractor terminates this Agreement or any purchase order for cause pursuant to Section 8.2, Manufacturer shall be liable for cancellation charges including the Product Costs and the costs as provided in Section 3.8. Subcontractor may at its sole discretion make commercially reasonable efforts to mitigate these costs by attempting to return products or components thereof to suppliers. 9. Joint Marketing. Subcontractor and Manufacturer have agreed to assist each other with marketing in other channels. When the Subcontractor helps the Manufacturer there will be a marketing fee associated with that assistance. When the Manufacturer helps the Subcontractor there will likewise be a marketing fee associated with that assistance. The Subcontractor and Manufacturer will mutually agree on the marketing fee before any assistance is provided. In some cases the marketing fee will be a percentage of the margin received by the other Party. The terms of such joint marketing agreement will be mutually agreed to by the Parties in a separate document. 10. Limitation of Liability. No Other Liability. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY "COVER" DAMAGES (INCLUDING INTERNAL COVER DAMAGES WHICH THE PARTIES AGREE MAY NOT BE CONSIDERED DIRECT DAMAGES), OR ANY INCIDENTAL, CONSEQUENTIAL, SPECIAL OR PUNITIVE DAMAGES OF ANY KIND OR NATURE ARISING OUT OF THIS AGREEMENT OR THE SALE OF MANUFACTURER'S PRODUCTS, WHETHER SUCH LIABILITY IS ASSERTED ON THE BASIS OF CONTRACT, TORT (INCLUDING THE POSSIBILITY OF NEGLIGENCE OR STRICT LIABILITY), OR OTHERWISE, EVEN IF THE PARTY HAS BEEN WARNED OF THE POSSIBILITY OF ANY SUCH LOSS OR DAMAGE, AND EVEN IF ANY OF THE LIMITED REMEDIES IN THIS AGREEMENT + + + + + +FAIL OF THEIR ESSENTIAL PURPOSE. NEITHER PARTY SHALL BE LIABLE FOR ANY DAMAGES ARISING FROM DELAY IN MANUFACTURE, SHIPMENT OR DELIVERY OF ANY MANUFACTURER'S PRODUCTS, IF SUCH DELAYS ARE DUE TO FORCE MAJEURE, AS DEFINED IN SECTION 15.2. 11. Confidentiality; Public Announcements; Non-Use; Intellectual Property Rights. 11.1 Confidentiality. Parties acknowledge that during the term of this Agreement, either Party may disclose to the other Party from time to time certain business, product pricing, financial, marketing, technical and other proprietary and sensitive information of each party. Both Parties shall use commercially reasonable efforts to keep confidential (a) the existence and terms of this Agreement and all information concerning the unit number and fees for Manufacturer's Products and inventory, and (b) any and all information concerning customers, suppliers, trade secrets, methods, processes or procedures and any other confidential, financial and business information of the other Party that is marked "Confidential" or the like or, if delivered verbally, confirmed in writing to be "Confidential" within thirty (30) days of the initial disclosure ("Confidential Information") with the same standard of care as it uses for its own Confidential Information. Neither Party shall disclose Confidential Information to any third Party without the prior written consent of the other party, except that both parties agree that the other party may disclose Confidential Information to its auditors and contractors under an obligation of confidentiality, to governmental authorities having jurisdiction over such Party or as otherwise required by applicable law, provided however, in the event the Manufacturer or Subcontractor is ordered to provide Confidential Information by a lawful judicial or government order, the party who is subject to such order shall promptly inform the Party whose information is to be disclosed and shall permit the Party to defend against such order of disclosure and shall assist in such defense to the extent permitted by law. In no other circumstances may the Manufacturer or Subcontractor disclose information without the consultation and prior written consent of the non-disclosing Party. Confidential Information of either Party hereto shall not include information which (i) is in the public domain, (ii) is previously known or independently developed by the receiving Party, (iii) is acquired by the receiving Party from any third party having a right to disclose such information or (iv) the receiving party is obligated to produce under a court or governmental order; provided, the disclosing Party complies with the notice requirements of the previous paragraph with respect the information subject to such court or governmental order. The Parties acknowledge that a breach by either Party of this Section 11 will give rise to irreparable injury to the other, inadequately compensable in damages. Accordingly, the Parties hereby consent to allow the other Party to seek injunctive relief against the breach or threatened breach of the undertakings of the Parties contained in this Section 11. The Parties further agree that such an order so enjoining a Party may be issued pending final determination thereof, without the requirement to post bond. 11.2 Public Announcements. Each Party reserves the right to publish press releases and public announcements (collectively, the "Publications") pertaining to this Agreement; provided, however, no Publications will contain any Confidential Information of a Party without such Party's prior written consent. The publishing Party shall indemnify and hold the non-publishing Party its, officers, agents, shareholders, and employees harmless against any and all claims, demands, damages, liabilities and costs which directly or indirectly result from, or arise in connection with, any negligent act or omission of the disclosing Party, its agents, or employees, pertaining to such disclosing Party's Publications under this Agreement. 11.3 Non-Use. Each Party to this Agreement acknowledges and agrees that at any time during the Term of this Agreement and at all times following the termination of this Agreement, neither Party may use any Confidential Information, Inventions and Intellectual Property (as these terms are defined in Section 11.3 below) of the other Party for any purpose other than in conjunction with its obligations under this Agreement. The Parties further agree that neither Party may analyze, or reverse engineer any samples, software or hardware provided by the other Party to determine composition, method of manufacture, or construction. 11.4 Intellectual Property Rights. Except as otherwise expressly provided in this Section 11,4, all inventions, discoveries, and trade secrets whether or not patentable, that are made by Subcontractor or Manufacturer, either alone or with others, in the course of its performance of its obligations under this Agreement (collectively, "Inventions") will become the exclusive property of Subcontractor. In the event this Agreement terminates for any reason or no reason, all licenses of Subcontractor's patents, trademarks, software, trade secrets or other intellectual property (collectively the "Intellectual Property") of Subcontractor, granted expressly or otherwise to Manufacturer under the terms of this Agreement or any other Agreement between Subcontractor and Manufacturer shall immediately terminate and Manufacturer must immediately cease use of all of Subcontractor's Intellectual Property. 12. Manufacturer's Indemnity. Manufacturer shall indemnify, defend and hold Subcontractor and its affiliates ("Subcontractor Indemnities") harmless from and against any and all loss, liability or expense, including reasonable attorneys' fees, resulting from or arising in connection with any claim or suit by any third party against the Subcontractor Indemnities (i) alleging infringement or dilution of any copyright, trademark, trade name, trade secret, patent or other third party proprietary rights, relating to the design, manufacture, sale, normal use or normal disposition of any Manufacturer's Products built to the specification of Manufacturer, (ii) alleging any failure of any Manufacturer's Product (or any Manufacturer's Product components contained therein) sold by Subcontractor hereunder to comply with any safety standards or any environmental regulations, or (iii) alleging loss, damages, bodily injury, sickness, disease, or death, or injury to property which is caused by (1) the negligence or intentional acts of Manufacturer, its agents, employees or subcontractors, or (2) a defect in Manufacturer Specifications or Manufacturer specified materials, components or design of the Manufacturer's Products or caused by Manufacturer specified suppliers; provided however, that Subcontractor shall have the right, at its option, to participate in the defense of any such claim or suit, + + + + + +without relieving Manufacturer of any obligations hereunder. 13. Ownership of Tooling and Testing Equipment. All tooling and testing equipment used in connection with this Agreement shall be owned by Subcontractor. + +14. Regulatory Compliance and Record Keeping. + +14.1 Approvals. Manufacturer shall be registered as the manufacturer of Manufacturer's Products and shall obtain such approvals from the United States Food and Drug Administration (the "FDA") and other regulatory bodies, public or private as may be required to manufacture and sell the products in the United States or internationally. Both Manufacturer and Subcontractor shall be responsible for complying with all federal, state and local laws, rules, regulations, guidelines and the like in the United States and in other countries as they may pertain to the Manufacturer's Products and to the obligations on the Parties to perform under this Agreement, including, without limitation, requirements in the United States with respect to registration of establishment, listing of medical devices, reporting of deaths, serious injuries and certain malfunctions under 21 CFR Medical Device Regulations and the potential therefore, tracking of medical devices, recalls, safety alerts and process controls. In no event shall either Party assume any risk arising out of the other Party's failure to comply with such laws, rules, regulations, guidelines and the like, and each Party shall cooperate with the other in all respects to facilitate and promote strict compliance with the provisions of this Section 14. + +14.2 Regulatory Inspection and Revision of Specifications. Following inspections by applicable regulatory authorities, including, without limitation, the FDA, Subcontractor shall do such actions or cause such actions to be done that are necessary, advisable or appropriate so that Subcontractor remains in good standing with any such regulatory authorities. Prior to undertaking any action pursuant to this section, Subcontractor shall notify Manufacturer of the inspection and disclose to Manufacturer the regulatory authorities' findings and related results of such inspection (the "Findings") pertaining to the business with Manufacturer. Subcontractor shall also provide full disclosure to Manufacturer with respect to any action undertaken or proposed to be undertaken pursuant to this Section prior to acting. Subcontractor shall keep correct and complete records and books covering the manufacture of the Manufacturer's Products and other documents relating to this Agreement. Each of the Parties will immediately notify the other of any complaints, adverse events, deaths or serious injuries relating to Manufacturer's Products that are manufactured by Subcontractor. All complaints, adverse events, deaths or serious injuries pertaining to Manufacturer's Products will be reported to Subcontractor's Quality Assurance departments in accordance with the requirements established in Subcontractor's and Manufacturer's Complaints Handling and Reporting procedures. All complaint related Manufacturer's Products returned to Manufacturer will be forwarded to Subcontractor for complaint handling and failure investigation. Subcontractor agrees to provide Manufacturer, at Manufacturer's expense and reasonable request and during ordinary business hours, access to, and copies of, such records, books and all other documents and materials in the possession and under the control of Subcontractor relating to or pertaining to the subject matter of this Agreement; including, but not limited to, the following: + +a) Subcontractor will provide Manufacturer a schedule of all audits of Subcontractors for materials used in the manufacture of Manufacturer's Products upon request. The schedule will be provided in accordance with the requirements established in Subcontractor's Auditing procedure. Reports on all material Subcontractors for the Manufacturer's Products will be made available to Manufacturer upon request. + +b) Upon reasonable notice, Manufacturer may review at any time routine reports relating to all nonconforming materials identified by Subcontractor during the manufacture or inspection of the Manufacturer's Products. + +Subcontractor shall maintain quality systems in compliance with ISO 9001 (the 2000 or current version) and the Quality System Requirements of the FDA. 14.3 Change Notification. Subcontractor will notify Manufacturer and obtain approval prior to implementing changes that may require amendments to the Device Master Record, manufacturing process changes or material changes relating to the manufacture and distribution of Manufacturer's Products. Manufacturer will notify Subcontractor of all changes to the Device Master Record, manufacturing process changes or material changes relating to the manufacture of Manufacturer's Products manufactured by Subcontractor. Manufacturer will provide appropriate documentation to Subcontractor to effect any changes to the Device Master Record, manufacturing process or changes in materials. 15. General Provisions. + +15.1 Notice. Notice shall be deemed effective and delivered three days after mailing if sent certified mail, return receipt requested, or when received if sent by electronic mail (e-mail), telecopy, prepaid courier, express mail or personal delivery to the intended recipient thereof at the address shown on the first page hereof with confirmation of delivery, or to such other address as either Party may specify in a written notice to the other Party pursuant hereto. + + + + + +15.2 Force Majeure. Except as otherwise provided herein, neither Party shall be liable to the other for its failure to perform any of its obligations hereunder during any period in which performance is delayed by circumstances beyond its reasonable control, including, without limitation, an act of God, war, civil disturbance, court order, labor dispute, third party nonperformance, acts of third parties, or failures, fluctuations or non-availability of materials, components, electrical power, heat, light, air conditioning, computing or information systems or telecommunications ("force majeure"), provided that the Party experiencing such delay promptly notifies the other Party of the delay and the cause thereof. The happening of any contingency beyond Subcontractor's reasonable control, including delays caused by Manufacturer or suppliers, shall not constitute cause for cancellation of Manufacturer's order, but shall extend Subcontractor's time to ship goods for a period equal to the duration of such contingency. + +15.3 Relationship of Parties. Subcontractor, in providing Manufacturer's Products hereunder, is acting as an independent contractor and does not undertake by this Agreement or otherwise to perform any obligation of Manufacturer, or to assume liability for Manufacturer's business or operations. Subcontractor has the sole right and obligation to supervise, manage, contract, direct, procure, perform, or cause to be performed, all work to be performed by Subcontractor hereunder. + +15.4 Right of Subcontractor to Sell Products to Others. Manufacturer understands and agrees that Subcontractor may itself use, manufacture or sell similar products as provided to Manufacturer hereunder to third parties and affiliates, some of whom may be competitors of Manufacturer, so long as: (a) Subcontractor does not use or disclose any Confidential Information of Manufacturer, (b) Subcontractor and third party do not infringe any of Manufacturer's patents or other intellectual property rights. + +15.5 No Third Party Beneficiaries. The Parties agree that this Agreement is for the benefit of the Parties hereto only and is not intended to confer any legal rights or benefits on any third party, and that there are no third party beneficiaries to this Agreement or any part or specific provision of this Agreement. + +15.6 Attorneys' Fees. The prevailing Party in any legal proceedings brought by or against the other Party to enforce any provision of this Agreement shall be entitled to recover against the non-prevailing Party the reasonable attorneys' fees, court costs and other expenses incurred by the prevailing Party. 15.7 Assignment; Change of Control. Neither Party may assign or transfer this Agreement by operation of law or otherwise. Any assignment made by either Party in contravention of this Section 15.7 shall be null and void for all purposes. In the event of a Change of Control (as defined below) this Agreement shall immediately terminate. A Change of Control shall occur with respect to the Manufacturer, unless Subcontractor shall have expressly consented to such Change of Control in writing. A "Change of Control" shall mean any event or circumstance as a result of which (i) any "Person" or "group" (as such terms are defined in Sections 13(d) and 14(d) of The Securities Exchange Act of 1934 (the "Exchange Act"), as in effect on the date hereof), other than the Subcontractor, is or becomes the "beneficial owner" (as defined in Rules 13(d)-3 and 13(d)-5 under the Exchange Act), directly or indirectly, of 50% or more on a fully diluted basis of the then outstanding voting equity interest of the Company, (ii) the board of directors of the Manufacturer shall cease to consist of a majority of the Manufacturer's board of directors on the date hereof (or directors appointed by a majority of the board of directors in effect immediately prior to such appointment) or (iii) the Manufacturer or any of its affiliates merges or consolidates with, or sells all or substantially all of its assets to, any other person or entity; 15.8 Amendment. This Agreement may be amended only by written amendment duly signed by authorized representatives of both Parties. + +15.9 Non-Solicitation of Employees. During the term hereof and for a period of five (5) years thereafter, each Party agrees not to, either directly or indirectly, for itself or on behalf of any other person, firm, partnership, corporation or other entity hire, solicit, contract for, attempt to solicit, or cause to be solicited, the employment or services of any current or previous employee of the other Party (unless a period of sixty months has elapsed from the last date that such employee was employed by such party) without the prior written consent of such other Party. Each Party agrees that in the event it violates the provisions of this Section 15.9, it will pay to the other Party as liquidated damages, and not as a penalty, an amount equal to one hundred times (100 X) of any such employee's then-current base annual salary. 15.10 Severability; Validity. If any provision of this Agreement is held invalid or unenforceable under applicable law, the parties agree to renegotiate such provision(s) in good faith, in order to maintain or achieve the economic position enjoyed by each Party as close as possible to that under the provision(s) rendered unenforceable. In the event that the Parties cannot reach a mutually agreeable and enforceable replacement for such provision(s), then (i) such provisions shall be excluded from this Agreement, (ii) the balance of the Agreement shall be interpreted as if such provision(s) were so excluded, (iii) the balance of the Agreement shall be enforceable in accordance with its terms, and (iv) the parties will revise the Agreement to effect the intent of such excluded provisions. 15.11 Waiver. Any waiver of any kind by a Party of a breach of this Agreement must be in writing, shall be effective only to the extent set forth in such writing and shall not operate or be construed as a waiver of any subsequent breach. Any delay or omission in exercising any right, power or remedy pursuant to a breach or default by a Party shall not impair any right, power or remedy which either Party may have with respect to a future breach or default. + +15.12 Dispute Resolution. 15.12.1 Obligation to Negotiate. Any dispute arising out of or relating to this Agreement shall be resolved exclusively in accordance with the procedures specified in this Section 15.12. The Parties shall attempt in good faith to resolve any + + + + + +dispute arising out of or relating to this Agreement by negotiation between a committee composed of four (4) members (two (2) from each Party) mutually agreed upon from the Subcontractor and Manufacturer boards of directors. Any Party may give the other Party written notice of any dispute not resolved in the normal course of business. Such notice shall include (a) a statement of that Party's position and a summary of arguments supporting that position, and (b) the name and title of the executive who will be representing that Party and of any other person who will accompany the executive in the negotiations. Within fifteen (15) days after delivery of the notice, the receiving Party shall respond with (a) a statement of that Party's position and a summary of arguments supporting that position, and (b) the name and title of the executive who will represent that Party and of any other person who will accompany the executive in the negotiations. Within thirty (30) days after delivery of the initial notice, the executives of both Parties shall meet at a mutually acceptable time and place and thereafter as often as they reasonably deem necessary to attempt to resolve the dispute. All reasonable requests for information made by one Party to the other will be honored. All negotiations pursuant to this clause are confidential and shall be treated as compromise and settlement negotiations for purposes of applicable rules of evidence. 15.12.2 Mediation. If the dispute has not been resolved by the negotiation process specified in Section 15.12.1 within forty-five (45) days following the initial notice, the Parties may endeavor to settle the dispute by mediation under the then current CPR Mediation Procedure published by the CPR Institute for Dispute Resolution (NYC). Unless otherwise agreed, the Parties will select a mediator from the CPR Panels of Distinguished Neutrals. 15.12.3 Choice of Law; Venue. If any dispute has not been resolved by a non-binding procedure as provided herein, within one-hundred twenty (120) days of the initiation of such procedure the complaining Party may seek such legal or equitable relief as may be appropriate in the federal or state courts located in Maricopa County, Arizona. The Parties agree that this Agreement shall be governed by and construed in accordance with the laws of the State of Arizona without regard to conflicts of law provisions thereof or any other applicable law and that exclusive venue shall be in the federal or state courts located in Maricopa County, Arizona. Nothing stated herein is intended to limit either Party's right to seek emergency, temporary or permanent injunctive relief and both Parties expressly agree that either Party will be entitled to such relief to prevent actual or threatened violation of the confidentiality provisions in Section 11 herein. If there is a dispute or legal action regarding this agreement, the prevailing Party shall be entitled to reasonable attorney's fees and costs. 15.13 Binding Effect; Recitals. This Agreement shall be binding on and inure to the benefit of the Parties and their respective successors and assigns. The recitals to this Agreement are incorporated into and shall constitute a part of this Agreement. + +15.14 Survival. The rights, limitations, obligations and duties under Sections 7, 10, 11, 12, 14 and 15 shall survive the expiration or termination of this Agreement. 15.15 Entire Agreement. This Agreement and the attachments attached hereto contain the entire agreement of the Parties with respect to the subject matter of this Agreement, and supersede all prior negotiations, agreements and understandings with respect thereto. Signature Page to Follow + + + + + +IN WITNESS WHEREFORE, the Parties have caused this Agreement to be executed by their duly authorized representatives as set forth below: ZOUNDS HEARING, INC. Date: ________________________ By:______________________________ Name: Samuel L. Thomasson Title: President & Chief Executive Officer Address: 6825 W. Galveston Street, Suite 9 Chandler, AZ 85226 Fax: _____________________________ Email: ____________________________ INNERSCOPE HEARING TECHNOLOGIES, INC. Date: ________________________ By:________________________________ Name: Matthew Moore Title: CEO Address: 2151 Professional Drive 2nd Floor Roseville, CA. 95616 Fax: (916) 218-4101 Email: matthew@innd.com \ No newline at end of file diff --git a/full_contract_txt/ZtoExpressCaymanInc_20160930_F-1_EX-10.10_9752871_EX-10.10_Transportation Agreement.txt b/full_contract_txt/ZtoExpressCaymanInc_20160930_F-1_EX-10.10_9752871_EX-10.10_Transportation Agreement.txt new file mode 100644 index 0000000000000000000000000000000000000000..3ad208244e31276ecde0049d0fc79812403283b5 --- /dev/null +++ b/full_contract_txt/ZtoExpressCaymanInc_20160930_F-1_EX-10.10_9752871_EX-10.10_Transportation Agreement.txt @@ -0,0 +1,39 @@ +Exhibit 10.10 Road Transportation Agreement Party A (Shipper): ZTO Express Co., Ltd. Address: Building 1, No. 1685, Huazhi Road, Huaxin Twon, Qingpu District, Shanghai Party B (Carrier): Tonglu Tongze Logistics Ltd. Address: 12 Floor, HSBC Tower, Yinchun South Road, Tonglu County, Zhejiang Province Due to the need for logistics business, Party A and Party B enter into this Road Transportation Agreement (this "Agreement"), in which Party A pays the freight and Party B provides parcel transportation services to Party A. In accordance with relevant laws and regulations, Party A and Party B have sufficiently negotiated the specific matters and voluntarily reached the following Agreement based on equality, reciprocity and integrity. This Agreement is to be complied by both Parties. 1. Party B shall provide parcel transportation services on highway line-haul routes based on the needs of Party A. 2. Period of transportation services: this Agreement is valid for an indefinite term. Subsequent contracts might be entered in case of special business. 3. Freight and payment method: (a) Verification of freight: Party A pays freight based on carload rate (such freight includes pick-up charges, door-to-door delivery charges and tax fees). (b) Party A shall not pay any other charges other than the freight. (c) Clearance of freight: the clearance method is based on both Parties' fund clearance arrangement and the final clearance amount is subject to actual carriage amount and EX-warehouse ("EXW") weight determined by Party A. Party B shall attach Party A's parcel EXW originals or copies for Party A's verification for clearance of freight. 4. Transportation route, time and relevant rules (a) Transportation time: (b) Any changes to the line-haul route and time are subject to both Parties' negotiation and written supplemental clauses. (c) Party B shall have its own loading crews and the parcel shall be loaded by Party B's loading crews. + +Source: ZTO EXPRESS (CAYMAN) INC., F-1, 9/30/2016 + + + + + + (d) Drivers, loading crews and attendant crews shall be employed and remunerated by Party B. Party A shall not interfere such matter. 5. In order to guarantee rapid transfer of Party A's parcel, Party B shall strictly comply with the following obligations: (a) During the transportation, Part B shall completely comply with Party A's transportation arrangement and relevant systems. Party B shall bear any consequences and legal liability arising out of Party B's non-compliance, and Party A shall have no liability. Party A has the right to terminate this Agreement without further legal liability in the case that Party B does not comply with Party A's management and arrangement. (b) Based on the business needs, Party A can negotiate with Party B to modify the transportation route and time whenever necessary, which shall be executed by signing supplemental agreements upon consensus of both Parties. (c) Party B shall ensure the vehicles are in good conditions, the compartments are properly sealed without leakage and the vehicles are equipped with fire-fighting equipment. In the event of parcel damage resulting from leakage or fire, Party B shall indemnify at the standard rate of RMB200 per parcel, and indemnify the actual price for high-end insured parcel (or indemnify by the value of the parcel provided by arbitration department determined by Party A). (d) Party B shall have valid and legal licenses for national road transportation. In the event of loss caused to Party A by delivery delay due to vehicles detention for the lack of license, Party B shall compensate for any loss to Party A. (e) Party B shall arrive at the network partners determined by Party A according to the time and route stipulated in this Agreement, and strictly comply with the start time and end time. Unless otherwise approved by Party A, in the event of parcel transfer due to Party B's vehicle delay, Party B shall pay liquidated damages to Party A at the standard rate of RMB500 per trip on the first working day, RMB1,000 per trip on the second working day and RMB2,000 per trip on the third working day (based on the time records on the parcel transfer documents) and such liquidated damages will be deducted from the current month's freight. In the special event of changes to route and time and severe weather (or other force majeure events), Party B shall be in touch with Party A in time and record such special event on the parcel transfer documents with Party A's approval. (f) In the event of delay by vehicle malfunction or traffic accidents, Party B shall settle such malfunction or accidents within half an hour. In the event of vehicle operation failure, Party B shall notify Party A within two hours and shall manage to deliver Party A's parcel to the destination designated by the contract. (g) Party B shall provide copies of driver licenses, working licenses, occupation licenses, insurance documents, operation licenses, outsourcing contracts, tax certificates, business licenses, road transportation permits and business code 2 + +Source: ZTO EXPRESS (CAYMAN) INC., F-1, 9/30/2016 + + + + + + licenses to Party A, and guarantee the authenticity, completeness, legality and validity of such licenses and materials. Party B's drivers shall have at least two years driving experience in large trucks and have relevant licenses. Party B shall bear any consequences and legal liability arising out of Party B's non-compliance, and Party A shall have no liability. (h) Party B shall bear any consequences and economic punishments arising out of the breach of traffic rules by Party B's drivers and other staff, and Party A shall have no liability. (i) Party B shall be responsible for driving safety. Party B shall bear any legal liability arising out of severe traffic accidents causing vehicle damage and personnel casualties, and Party A shall have no liability. Party B shall be responsible for any damages resulting from severe accidents causing Party A's personnel casualties. Party A has the right to indemnify from Party B upon advance payment of damages. 6. Party B shall purchase sufficient insurance for the transportation vehicles. The coverage of third-party liability insurance shall not be lower than RMB1 million. In addition to vehicle personnel insurance, Party B shall at least purchase injury insurance for two persons with coverage not lower than RMB500,000 per person. Party B shall bear any consequence arising out of the non-compliance of insurance purchase, and Party A shall have no liability. 7. Any parcel damage resulting from the fault of Party B's employees shall be compensated by Party B in accordance with Party A's relevant rules. Party B shall be responsible for all of Party A's economic loss and relevant liquidated damages arising out of any theft and disposal of stolen goods conducted by Party B's personnel. Such payment shall be deducted from the current month's freight and be topped up by Party B in case of inadequacy. The personnel breaching the rules shall be dismissed by Party B. 8. In the event the vehicle space insufficiency which causes Party A's need unable to be satisfied nor can it be adjusted to satisfy Party A's need, Party A can terminate this Agreement without any compensation. 9. Party A has the right to terminate this Agreement if Party B has breached the above articles in this Agreement. The termination of this Agreement shall not prejudice Party A's right to hold Party B responsible for breach of contract. 10. Party B shall obtain Party A's written consent in the case the early termination of the Agreement. Party B shall pay one-month freight as liquidated damages in case of termination of the Agreement without consent. Within the contract period, Party B shall not charge the freight difference if Party A rents same-level vehicles. Party B shall also compensate Party A's other losses. 11. Without Party A's approval, Party B shall not transfer the carriage of goods to any third party in the designated route. Otherwise, Party A has the right to terminate this Agreement directly. 3 + +Source: ZTO EXPRESS (CAYMAN) INC., F-1, 9/30/2016 + + + + + + 12. Any dispute arising out of the execution of this Agreement, which cannot be negotiated and settled by both Parties, shall be subject to the jurisdiction of the People's Court where this Agreement is signed. 13. The annex of this Agreement constitutes a part of this Agreement and has the same effect as this Agreement. Any undealt matter can be negotiated and added by both Parties. 14. This Agreement takes effect upon the signatures and seals of both Parties in triplicate. Party A shall have two copies and Party B shall have one copy. 15. Any different interpretation of this Agreement by both Parties is subject to final interpretation by Party A. Party A: ZTO Express Co., Ltd. + + + + Party B:Tonglu Tongze Logistics Ltd. Company seal: /s/ ZTO Express Co., Ltd. + + + + Company seal: /s/ Tonglu Tongze Logistics Ltd. Date: December 22, 2014 + + + + Date: December 22, 2014 4 + +Source: ZTO EXPRESS (CAYMAN) INC., F-1, 9/30/2016 \ No newline at end of file